Podcasts about michael thank

Could adding sleep apnea services to your practice be a life saver for patients? In this episode, we've brought on Dr. Dar Radfar to uncover why dentists are uniquely positioned to identify and treat sleep apnea, a commonly overlooked yet critical health concern. By breaking down how dentists can implement sleep apnea treatments into their practice using oral appliances, Dr. Radfar emphasizes the ethical responsibility and the immense health benefits this can afford to patients. Throughout our conversation, the importance of a systematic approach and patient education shines as a key takeaway, with Dar weaving in anecdotal insights from his personal experience in coaching and seminars.The episode delivers profound insights not only into the moral imperatives but also sheds light on the practicalities and financial benefits of adopting sleep apnea treatments. Dr. Radfar's recounting of his harrowing personal story about a car accident vividly illustrates the potential lifesaving impacts of proper sleep apnea diagnosis. His advice is clear and actionable, ending on a motivating note urging dentists to invest in ongoing education and practical implementation to make a real difference in their patients' lives.What You'll Learn in This Episode:Why dentists play a pivotal role in diagnosing and treating sleep apnea.The ethical obligation and professional duties involved in sleep apnea treatment.Four steps for incorporating sleep apnea treatment systems in your dental practice.Financial benefits and improved patient care outcomes tied to sleep apnea interventions.Strategies for effective patient education and communicating the importance of treatments.Dr. Radfar's personal experience and its influence on his professional journey.Common obstacles and solutions for dental practices new to sleep apnea treatments.Techniques for further education and training in implementing these systems.Don't miss this episode – your approach to sleep apnea treatment could profoundly impact your practice and your patient's well-being!‍‍Sponsors:‍CareStack: Modern, Secure, Cloud-Based Dental Software for Growing Your Practice! With state-of-the-art features including Online Appointments, Integrated Payments, Text Reminders and more. Click the link here for a special offer: https://lp.carestack.org/thedentalmarketer‍You can reach out to Dr. Dar Radfar here:Website: https://radseminar.com/‍Mentions and Links: ‍Tools/Software:Weave‍Organizations:ADAAmerican Medical Association‍Education:University of Wisconsin‍Brands/Businesses:InvisalignDental Intel‍Products:CPAP Machine‍People:Michael JordanStephen CurryKobe BryantElijah Desmond‍If you want your questions answered on Monday Morning Episodes, ask me on these platforms:My Newsletter: https://thedentalmarketer.lpages.co/newsletter/The Dental Marketer Society Facebook Group: https://www.facebook.com/groups/2031814726927041‍Episode Transcript (Auto-Generated - Please Excuse Errors)‍Michael: Hey Dar, so talk to us. What's one piece of advice you can give us this Monday morning? Dar: Alright, so if you're not doing sleep apnea treatment in your office, I think you're unethically treating your patients, or lack thereof. We look in the mouth as dentists and hygienists and dental assistants, and we are capable of identifying if someone has signs or patterns of sleep apnea or snoring issues. when I teach my courses on how to do sleep apnea implementation and screening and treatment and practices, people in the audience are shocked how many patients are walking in through the door. And as dentists, we see them two, three, three, four times a year. So it behooves us to be able to look in the mouth, look at the patient and go, Hey, Michael, do you sleep well at night?Anyone tell you that you snore, do you feel tired throughout the day? And it's really our job because there's only really three major treatments sleep and snoring. And that's a CPAP machine, which everybody loves, sarcastically speaking, and oral appliance that brings the jaw forward and couple of different kinds of surgery.Guess who can only do the oral appliance, the dentist. So we are the only ones that can actually treat a medical disease called sleep apnea. So, The a DA is pushing the screening to become mandatory, and I believe all dentists should definitely be doing this on a Monday morning. Michael: do you feel or practice owners aren't doing it?Dar: I think it's a lack of implementation of systems, worrying about where do I send this home sleep study can I do it? the answer is yes, you're obligated to do it. If a patient has diagnosis for sleep, there's one of the treatment modalities is an oral appliance as deemed by the American Medical Association for dentists to make.the hindrance here is the dentistry is easy to make the impression and the bite and the adjustments that I teach. It's super easy. It's as easy as doing sealants in dentistry. It's really the systems and the system is what do I do with the medical billing? have my own medical billing company that I refer to.never recommend anyone doing it in house unless that's all you're doing. And then you can have your team dedicated to that. But if you're busy doing dentistry, if staff is busy sending out dental insurance claims or remotely, there's dental billing companies. Now, why not have a medical billing company remotely do that?And at the end of the day, Mike, it's not just about medical billing. You can charge cash. We, as dentists charge cash for Invisalign, for ortho, for implants, for three, four, five, six, 7, 000 for these types of procedures. Why not 3, 000 for an oral appliance? Michael: You do seminars, right? Dar: Correct. Rad seminar. com. I have a list of all the seminars that I have, and I also have a coaching program. So when someone takes my full day course, that's not it. I teach them how to implement systems. We do weekly meetings 30 minutes a week. for total of six months to make sure that it's successful.Mike, the biggest thing here is we're saving lives 12 to 15 years off your life. If you have sleep apnea and you're not treated for it, 12 to 15 years. Five times higher risk of cancer of any kind. If you're not treated for sleep apnea, you know, a university of Wisconsin study reported a few years ago.So not only are you saving lives, but also the offices that I train about a quarter million dollars the first year to their practice, if they're open at least three days a week. that's a lot of good ROI and what we call R O L or return on life. Michael: I like that. So then, have you seen this, especially in your seminars or maybe just in general, Doctor goes, they get trained, they're hyped, they're excited to do this, and then it slowly starts dying down. The team's like, hey, it's slowing us down, we're not doing as great, we don't know what to do, right? And then it just ends there. And so that's the reason why they're saying, hey, we tried sleep apnea.We're trying it, but it just doesn't work in our community. Is that true? Dar: Yeah. since 2014 was my first course and when I used to do is just do courses then they would go home and on Monday they would try to implement. realistically, it was when we were doing follow ups with these doctors from the medical billing company and the home sleep testing coming to try to onboard them so they can refer home sleep tests to them do the medical billing for them, about 15 percent dentists would actually start doing this out of the.People who came to the course I believe without any arrogance, I have one of the best courses out there because it's real it's easy. It's implementation is easy. It's basically you come back on Monday and there's a patient that's upset and staff doesn't show the crown doesn't fit.So people get, bottled up with general dentistry stuff. And that's why I created the coaching program. and there's nothing out there like it. Michael: Really Dar: holds your hand after you do the instructional videos. Now you can do it on, your own. It's six hours of video for the doctor, 25 minutes of video for staff and hygienists to be able to say, okay, now I have the information.So now it's about implementation and just like any great athlete Michael Jordan or Steph Curry or Kobe Bryant had, coaches, even though they shot the ball. They still had coaches reminding them to take a thousand free throws every week. And it's the same thing, reminding you to do the screening, reminding you, this is the home sleep test.What have you discovered? What troubleshooting have you had when a patient says no to this or yes to this or has jaw problems or, or, any sort of other issues like dry mouth. How do you resolve for that when we're in the mouthpiece? So there's a lot of little things that are in the video, but we, kind of forget until we start playing the game push the doctors to play the game.When they see the outcomes coming and they get on I call it cruise control after six months, then they go month to month with me and I'm available for any more coaching on a monthly basis. Michael: Nice. Okay. So where do you see when it comes to implementation, especially with a sleep apnea, most drop the ball?Dar: the most drop ball is just basically being, let's call it not shy and opening your mouth. Elijah Desmond, my buddy and mastermind mentor. said to me one time, close mouths, don't get fed. So if you keep your mouth closed, you're not going to get, the response that you want and help the humans out there that are truly suffering from being able to sleep next to someone to snoring issues, to high blood pressure, to acid reflux, to cancer risks, to heart attacks, stroke, depression, anxiety, mental health connections.And so we are shy sometimes to, bring it up and say, Hey, see a little bit of scalloping on the side of the tongue shows maybe some thrusting of the tongue when you're sleeping at night, you sleep. Okay, Mike, you feel like you get enough air? You wake up feeling refreshed.Are you tired throughout the day? Or I see, you know, grinding of your lower front teeth. That's indicative of the jaw grinding forward at night when you sleep, that could mean that your breathing is altered and you're trying to do your own kind of CPR movement with your jaw, bringing your jaw forward, your teeth are grinding on the front.Can I help you with your sleep? That's it. the answer is either a yes or a no. we get rejected in dentistry and in life when we recommend other types of treatment modalities. And I kind of brush it off when it's okay. You don't want to do a crown. Okay. Half the cusp is fractured. no pain yet.Nine out of 10 may say yes. One says no, but people are really suffering energy levels being low to sleeping in other bedrooms. This is a different, Beast of practice. And so if we can actually just screen them properly, which is the number one thing, open your mouth and then know who do you refer to if they don't have a sleep study, which, talk about all that handed off to a home sleep testing company, no equipment to buy nothing like that.It's just know the knowledge and execute. And so I think that's the problem is just opening up the conversation because you think someone's complaining about their finances or their work and this, and you're too shy to bring it up because you don't want to scare your patients away. I there's a reason why I got into this, Mike.And I don't know if you know my story. I fell asleep with the wheel in 2009. I crashed my car into a tree, not knowing I had sleep apnea. I wasn't overweight. so if someone were to look in my mouth and say, Hey, Dar, how's your sleep? Are you feeling tired? I'd be like, yeah, you know what dentist?I actually am feeling a little bit more tired. Well, I can help you. Maybe you can do a home sleep test. You don't have to go to a lab anymore. And if I actually executed and said that I may have not had that accident. What if I hit somebody? 4 percent of crashes occur because people fall asleep at the wheel and it can happen to anyone, including our patients.So it behooves us to jump in and try to at least screen the patient to be able to see what's going on. Michael: So screening the patient is like the best way to not just, I guess for like lack of a better word, sell it, but at the same time to. Bring awareness to let them know to say like, Hey, we're not going to drop the ball here because Your mouth is showing these symptoms.Does your life reflect that and if they're like, you know what? Yeah, I am not sleeping Well, I'm not doing that. Now's the point where we do what we can just oh, let's do a Yeah, Dar: the screening is there, but also like when people are a part of my program we have emails ready to go that sends through the, software program, like dental Intel or we've, when they confirm their appointments, they also have weekly emails and say, did you know snoring can affect not only, your bed partner, but also your bed partner's life expectancy.The person who sleeps next to a snore is not sleeping well and waking up a bunch of times that's going to affect their overall health. Come in and see Dr. Rad for a complimentary consult. He now treats snoring and sleep apnea. Next email. congratulations Dr. Rad for finishing the course and being able to treat snoring and sleep apnea with an oral appliance.For those of you who have been tested and don't like your CPAP machine or haven't been home sleep tested at all, come in and have Dr. Rad do a complimentary consult for you. So educating your patients before they even come in. Through emails once every other week for once a week, giving them information like the five times high risk of cancer.Come on in, let's do an evaluation or bring it up at your next checkup appointment. These are ways to be able to touch your patients a lot of these patients have no idea that an oral appliance is a solution, let alone that you're capable of doing it. Michael: Have you seen this? People would say like, I'd rather snore a little bit more than have that big machine. Dar: Oh yeah, absolutely. It's like, I'm not going to wear that thing, but also Mike, think about it, you're single you're dating be adults for a minute.you get intimate and putting that mask on let alone traveling with that to go to your partner's. Home. It's so much easier to carry your mouthpiece with you to at least reduce the story, if not eliminate it depending on how severe, 80 percent of patients mild to moderate sleep apnea, which the mouthpiece works brilliantly for them.And even severe patients, we can get their scores down to a mild to moderate in most cases. And so, it's not for everyone, but CPAPs not for everyone. You know, it's a mild case, I have patients, I'm like why did the medical doctor even give you a CPAP when your apnea is so mild? And they come in mouthpiece, one shot, you put it in, they go home, they're like, Oh my God, this is so much easier than wearing the CPAP machine, travel purposes, camping on an airplane, hotels, keeping the machine clean.That's it. You've got nothing else. You've got the mouthpiece, you've got the CPAP and the surgery is very invasive. And you have to pretty much be very severe to end up having any sort of surgery called Inspire, which is a hypoglossal nerve stimulation device that's put onto your chest muscle there.And then there's also some rotor rooter of your throat called the triple UP where they remove the tonsils, the uvula. I mean, It's not easy for the surgical part as well. Michael: that's a good way to also educate the patient is like, Hey man, You want to go camping? so much, I guess we can talk about this, but any final pieces of advice that you'd like to give to our audience. Dar: first thing is, get educated, have the ammunition to understand what to look for when you look in the mouth and the medical history and then all of a sudden you see like these patients coming in with class five lesions near the gum line, the little or acid reflux and you see dentin exposure and it's It's not just dentistry now. It's, we need to see what the root cause is. And part of the root cause clenching and grinding of your teeth over 50 percent of people who grind their teeth is because they have a fight or flight response because they're not getting up oxygen. You open up the airway, their TMJ symptoms actually get better.And so educate yourself. Once you get educated and you understand how to do this, the rest is implementation. helped over 3000 dental offices. Now I'm open to help more just because if I can help one dentist and he or she can help dozens, if not hundreds of their patients we all come together, we sleep better.we're not as grumpy. We're more kind to each other in the mornings and throughout the day. And we have more energy for our loved ones. For working out, at our work, being more focused and alert. it's, our duty as dentists to be able to do this.And it also makes some good money too, if that's one of your motivating factor. Michael: Nice. Awesome. I appreciate your time. And if anyone has further questions, you can definitely find them on the Dental Marketer Society Facebook group, or where can they reach out to you directly? Dar: if you go to rad seminar dot com r a d seminar dot com there's a chat there that you can throw message and it comes directly to my cell phone.It also shows my virtual courses as well. If you want to do all the cart stuff, I also do webinars once a month. For the masses to come on just get some new information and updates. So I'd love to have you guys on, and then we'll do a call together once you send me a message and I can show everyone how to be able to do this in their own practice.whatever I do for the six months, I guarantee that the investment that the dentist puts in, they get it back. I've never had to give a full refund or any refund whatsoever to any dentists out there. That's how confident we are that. It works it's profitable.Michael: Thank you so much, Doc, for being with us. It's been a pleasure. And thank you for being with me on this Monday morning episode. Dar: Thank you guys.‍

https://theapsocietyorg.wordpress.com/news-and-events/suntree-retreat-2024/   Episode from 2022 Suntree: https://thewonderpodcast.podbean.com/e/live-from-suntree-retreat/   ----more----     Mark: Welcome back to The Wonder, Science Based Paganism. I'm your host, Mark, Yucca: And I'm Yucca. Mark: and today we have a really exciting group of people to talk about a really exciting upcoming event, which is the Sun Tree Retreat, which is the second of these retreats that we've held in person for atheopagans from all over the world who can come. Held in Colorado Springs, Colorado, and it's going to be over Labor Day weekend this summer. So, I'd like to introduce our two panelists here, who were at the last one Rana and Michael. Michael: Hello. Yucca: Rana, we Mark: I can't hear you at all. Rana: Oh, thank you for having us. Yucca: Welcome. And I think both of you've been on the podcast before, right? So, welcome back. Michael: Oh, thanks. Can Yucca: Yeah. Michael: put that Yucca: So let's, let's start with the, some of the details because that's coming up really soon, right? That's Mark: It is, Yucca: two months, which is not very long. Mark: nope, not very long, especially if you have to get plane tickets and that kind of thing, so, Really encourage folks that want to go to get registered and get organized around it, because it's going to be a really good time. So, details. The event is August 30th, which is a Friday starting in the afternoon through noon ish or one o'clock or so 2nd. Registration includes nine meals. As a part of your, your registration fee you also need to register for lodging, which is very affordable and you can find all the information about it by going to the Athe O Pagan Society website, which is the ap society.org, THE ap society.org, Yucca: And the lodging has several diff oh, Michael: notes as well for this Yucca: absolutely, yeah, we'll put that in the show notes so that people can just go ahead and click on it. I was gonna say the lodging has several different options including tent camping, and yurt and Mark: guest house, you're. Yucca: I think it's dry camping, but you could, if you have an RV and you're in the area, you can do an RV too, is that correct? Mark: Yes, there are no hookups, but but there is parking for RVs. We had a couple of people, at least one couple came last time, actually in a school bus, Yucca: was really cool. Mark: was converted. It was really cool. Yucca: Yeah, Mark: So, Michael and Rana we wanted to talk some about why this event was so cool last time and what we're looking forward to going into this next one at the end of this summer. So why don't we start with kind of golden moments. Michael, you want to go ahead? Michael: I wanted to just say beforehand, you mentioned the meals, and one of the high points of it was the options available. Like, every dietary requirement was accommodated, I think. Mark: Yeah, Michael: The catering team there are fantastic, and I think people shouldn't feel concerned about food at all because the options were great the food was really high quality I think everybody felt really good about the food, so that was an important, that was a real high point so just wanted to make sure we got that mentioned. And, Mark: Yeah, great. Thank you. And, and eating together was really a high point for me. Just sitting down for meals, you know, they had these round tables that I think seated eight or ten or something like that, and different combinations of people would sit together for different meals. And so we got to know one another better in those mealtimes. So that was a high point for me. Somebody want to go with another cool thing that they remember from Suntree in 2022? Yucca: well, I remember Robin led these I'm not sure what you would really call it,  Rana: yeah, the meal acknowledgement. We have talked about them in the group, but it was really different being able to experience it together. And it was things like bringing to mind the history of our food or thinking about the systems that brought it to us today or the hands that it passed through. And we've had some discussion in Mihal's full moon. We were doing like a full moon lunch thing for a little while as well where we kind of continued that conversation and, and thinking about that, which is something that I find really enriching and really enjoy. Also want to strongly second the dietary accommodations that they had. I really, really appreciate it because I have a little bit of an odd diet and I felt. Really good and definitely did not lack for good options for food. Mark: Mihal, you want to go? Michael: yeah, what I found really interesting about the, The whole experience was how quickly we created a community in space particularly when we did our Fire Circle get togethers. And the kind of spontaneous sharing that occurred at those events was really amazing. People really just suddenly kind of created this family. in situ and it was it was great to be part of that. Just sometimes if you go to other kind of retreats it can take a while to kind of break down those those barriers we put up. Just as just as being human but it seemed within a just a few hours we'd kind of already started to create a special Sun Tree community and I thought that was fantastic. Mark: Yeah, I really agree with that. I mean, I've been to a whole lot of various kinds of pagan gatherings and retreats of various sorts. And it seemed as though we just kind of got at this visceral level that we were among, you know, people that were of like mind and similar values. And so that we were safe. Right? We were all, we were all going to play nice with one another, and so we could talk about really deep stuff in our, in our lives, and in our, our experience. And I found that really moving throughout the whole long weekend. It was, it was, it came up over and over again. Yucca: I was also really struck just by the immediate level of respect and consent that was just part of the, Everybody had going in. So I had my five year old with me and in a lot of situations in our culture, people you know, will go up and touch five year old's heads and give them hugs and, you know, all of those sorts of things. And I remember it just being great because people automatically were so great with her about asking for her permission. Like, do you want a hug? And would you like to shake hands? And that was just the culture of it. And it was just so refreshing and wonderful to just be in that space, just from the get go. Like Mark: and I mean, we had, we had laid out guidelines around consent and around conduct because, you know, we wanted to be very clear about, you know, what the expectations are, but it seemed like people read them and were like, yeah, that's civilized behavior. That's how I'm going to be. And the subject Honestly, never came up. There was never a situation where somebody felt like they had been inappropriately touched or or somehow invaded in that kind of way. And I thought that was, that was really pretty amazing. Michael: I just wanted to talk about the actual place as well. The Retreat Center is Really, really phenomenal. There's this beautiful forest. You're kind of just on the edge of Colorado Springs, so it's not too far from any stores or anything that you might need. But once you get in there, you suddenly feel like The outside world has disappeared just in this beautiful forest really a fantastic place just to go for walks just to go into the forest by yourself if you want to go for I think one of the big highlights was that we had a lunar eclipse while we were, while we were there, and being able to all, for the whole, all of us to go out there onto this big lawn and just stare up at the, at the moon together, and people howling at the moon, it was It was just a really fantastic experience as well especially just having that, we, we had the the Ponderosa Lodge, which is this big log cabin lodge that we can use for a lot of our activities, for rituals, and for our workshops. And that's a real, that's, that's a really nice space as well, there are different rooms, so you can kind of break off and do different things with people, or you can kind of come to the main room and have a bigger discussion. We had dance parties there, we had the Carnival of Change, which was a chance to kind of take on a different persona, like dress up. be a different version of yourself for the evening. So I think the whole, the whole retreat center just kind of facilitates that. There's a, there's a labyrinth there as well, which we didn't really incorporate too much into any rituals the last time around, but I think we're going to try and bring that in more this time around. Mark: Yeah, it's a beautiful spot. Rano? Rana: Yeah, the, the shared experience of the lunar eclipse was pretty special and it, it just so perfectly aligned with what we were doing. It was the same night as the Carnival of Change and it just felt like great, like the weather cooperated and we got to see this cool celestial event. It wasn't even at a super late time, like it was, it felt like a Yucca: like eight or nine. Yeah, Rana: Yeah, yeah, it felt like started our evening, kind of, or, you know, it didn't, it wasn't, you know, too far on late night or anything. The Carnival of Change itself was really fun, just to be able to play dress up together and listen to some music and, and just have fun. And I also like, like Michael said being able to split off into other little rooms and areas. It And I think for me, something that I really appreciated was the ability to have these just kind of unplanned moments where so much of our online interactions are very scheduled and it, you just show up at a certain time and there's a group of people and that's kind of mostly how it's gone. But, like, I just remember some folks were up later one night just all chatting and hanging out. And I love that feeling of if you're up late and feeling a little bit chatty or sociable, you can just kind of see who's up and just take a seat and hang out for a bit. And that's something that otherwise has felt like not really something we have access to. So it was particularly nice just to be able to connect in a more organic way, depending on how you're feeling. Mark: hmm. Yeah. Nihal? Michael: Yeah I think we, there was a lot of, there's been some learnings from that event as well, and I think there, we were really concerned about accessibility this time around, because there was a lot of movement between different areas. And so this time around we are definitely going to be making it more accessible as well. There's going to be designated drivers, so we want to make sure that everybody feels comfortable and everybody's able to take part in all the different events that we're having. So, I, I know that there's going to be a lot of more accessibility this time around, especially just in terms of shuttling people around the property. Yucca: Because there were a few hills and we were moving from the bottom of the hill back up to the dining room and then back down. Michael: Yes, yes, yeah, but I think we, Mark: and we were at 7, 000 feet. Michael: that was another, yeah  Mark: yeah one of the things that we learned from the Sun Tree Retreat in 2022 is that we had programmed a lot of the time, but some of the most memorable and wonderful moments were the unscripted times. The, the, The break periods when we could just gather together and socialize, or plan what we wanted to do for a rite of passage during the rite of passage period that we had later on, which was one of the most moving things to me. That was really an experience. So this time we've programmed in more free time. There's still plenty of workshops and, and rituals and experiences to have, but we've made it a little bit looser so that people have opportunities just to hang out and experience the place and one another. Michael: yeah, yeah, I just wanted to I might talk about the rites of passage a bit more because that was quite a unique experience. I guess we didn't really know how that was going to go because it's kind of like, it's a make your own ritual event, basically. You, you just DIY it with some help from some friends. So I think people were, they had various things that they wanted to celebrate or commemorate and or mark the end of a period in their life, or the start of a period in their life. And we all came together and celebrated those those events together. And I think what was really amazing was just the creativity that people brought to their rituals. Really very moving and even though they were very personal, I felt that We all kind of, as a community, came together and it became something for all of us. Mark: Yeah. I felt so included in all of those rituals. I felt like my being there mattered. And even if just as a witness and that. You know, that there was room for everyone to have the kind of experience that they wanted to have. And it, and we, we ended the rites of passage with a wedding, which was sweet. It's kind of, you know, the classic act four of the movie, right? And that was really lovely. So, I was, I was super happy with that, and we're doing that rites of passage process again this summer. Michael: Maybe we could talk about some of the workshops that took, that people liked. Mark: Oh, yeah. Michael: I really, I think one of the highlights was the Cosmala workshop, bead workshop, which is basically making a bead necklace that, with each bead representing an important part of, in the life of the universe, or in your own personal life, or just various different events that you want to commemorate. That's, that's kind of right, isn't it? Or was there any Mark: John Cleland Host, who is our friend and a real innovator in the whole realm of naturalistic paganism, one of the earliest people to write about it in its new resurgence. He has this amazing more than a hundred bead string. Of, that all, it starts with the Big Bang and it works all the way until, at least until the Sun Tree Retreat, because he had special beads made for the Sun Tree Retreat that he distributed to people so they could put them on their own cosmola. That was very, very cool. And some of them are signed by people like Starhawk and Jane Goodall and just really a fascinating, wonderful ritual tool and evocative piece of art. Yucca: so there were a lot of different styles of workshops too. There was a, like a history one and there was a John did another one which was like the Wheel of the Year, which he had some really cool handouts for too for that. Mark: We live the year for families, which I thought was really wonderful. You know, a lot of people in our community have families that they're working to build traditions with together, and so, and John has really, you know, pioneered some of that, you know, working with his, with his wife and his sons. And just had a lot of great ideas about different things he could do at different times of the year and was, you know, freely sharing all that stuff. It was great. Rana: There was also a group guided meditation that we did outside overlooking Pikes Peak on their big, expansive, beautiful lawn with all the ponderosa pines, which I'd never, I don't think I'd ever seen them before. I'd never been to Colorado before. And that was really lovely just to kind of take a moment to be there and be present. And there was also a body painting. Which, I appreciated the, like, especially interactive stuff because it's something we're normally restricted about online. And I really loved Mihal's presentation about virtual meals because I think food is just such an integral way to connect with other people and you can infuse it with all this symbolism. And it gave me a lot of ideas. I need to revisit my notes on that and thinking forward to the next one a little bit too, just that ability to share food and those meal acknowledgements really adds to that feeling of making meaning with other people and making community. Michael: Yeah, we had a food altar as well, which was kind of cool. An abundance of food. People brought stuff to share. And I thought that was fantastic as well. Just, uh, one, one person brought some really good kimbap, which I love. So that, if you don't know what that is, it's Korean sushi, basically. And it was just really good. Mark: Yeah, there, there was there was just a vibe of generosity and mutual support. Mutual affirmation. You know, I came away from it feeling like, you know, I've got these amazing, super cool people in my world, and they feel the same about me, and that's just good for my life, generally. Even if I'm not going to see them for a couple of years, except online, just knowing that we shared this experience together just helps me to feel affirmed in who I am and what I do. And I, I, I think I think that was the general vibe that people got out of the event. Yucca: That certainly was, I felt that strongly as well. I was, you know, riding that for several weeks after coming home. Michael: Definitely an afterglow of, kind of like, hard to come down from the high of the event as well. It took a while because it was so special. Mark: yeah, absolutely. So we want to talk a little bit about some of the offerings we're going to have this time. Some of them are repeats from last time, but some of them are new. Let me see if I can pick one. Oh, go ahead. Michael: I was just going to say, maybe everybody's had a chance to look at the program and if you, if there's any particular highlights you want to, that you'd like to talk about that maybe you're looking forward to. Mark: There's so many things. Um,  Michael: Well, should we talk, let's talk about the theme first. Mark: sure, of course. That's a great Michael: we didn't, we didn't have a theme last time, but we do have a theme this, this time. Mark: Which is Solarpunk, a chosen family reunion. The idea being that Solarpunk being a very kind of optimistic movement for the betterment of the world, the betterment of our relationship with nature rather than kind of the doom and gloom that we, that we see everywhere around us now, Solarpunk is a, It's a genre of of writing and of art that is optimistic and looks to the future as, yes, filled with challenges, but also filled with opportunities for us to grow and change and do better. And the chosen family reunion part is I mean, I certainly felt and I think that a lot of us felt at the last Sun Tree Retreat that these, these people were my chosen family. It was, it felt like, oh, wow, all my cousins and uncles and, and nephews and nieces have all shown up and now we're having this great sort of family hoopla together. It was, it was great that way. Yucca: And one of the workshops is going to be on solar punk and atheopaganism more specifically, right? That's Mark: yeah. Michael: Yeah, Hanna is going to be leading that one. Mark: Mm hmm. I'm looking forward to that one as well. And of course we'll have some some elements that will be around, you know, learning how to organize rituals or to you know, to design them. Or you know, kind of learning the observational skills about getting more in touch with the processes of nature around you. Mm hmm. That was something about the, the lunar eclipse last time that it really dovetailed with something that, that Yucca and I talk about on here all the time, which is just about, you know, paying attention, about being present and experiencing the moment and observing what's happening in nature, and That was such a dramatic event. It really, really riveted our attention for about an hour or so. Michael: We're bringing back the Cosmala again, because that was so popular, and I think, I'm sure that new people are going to want to try their hand at making Cosmolas. Mark: I've never made one. I, I'm, it's an oversight. I have to do it now. Going to do a reader's theater. I'm organizing that of a reworking of the myth of Hades and Persephone and Demeter in Greek mythology. Because, even though that's a very popular myth in pagan, kind of modern pagan circles and a lot of different groups have done reenactments of the Eleusinian mysteries that enact that story, it's a pretty terrible story, really. I mean, Hades, Hades captures the innocent daughter Kore, drags her away and makes her his wife. That's terrible. Not so cool in modern, Yucca: way of putting it, Mark: yes, that is a very polite way of putting it, yeah. So, so I rewrote it. I rewrote it to have a different kind of ending and a different set of teachings than the original story did. And we're going to do a reader's theater where people who come to the workshop can pick up a script and take a part and we'll all read it together. And and it'll be fun and hopefully people will enjoy it. So that's another thing we're going to do. Michael: Yeah, we've occasionally done death cafes online which are kind of opportunities to talk about death and, you know, I think our movement's kind of a death positive movement, and we want to kind of honor that, and so something I'm going to be leading is an Irish wake kind of experience, and, you know, at an Irish wake, it's not just mourning the dead, it's kind of celebrating life. And kind of celebrating chaos and causing mayhem. So we're gonna have we're gonna have a bit of an Irish wake experience and I'm, people are gonna be invited to bury the things they want to bury, or remember the things they want to remember. And then we will also cause some mischief as well. Mark: Sounds great. I'm up for all of that. Yucca: And on Saturday, at lunchtime, we're planning to do the same thing that we did last time. to do a live podcast episode, and that may be an opportunity for folks who can't attend in person to zoom in and connect. Yes, Mark: Yes, cross, cross your fingers for the internet connection at the Retreat Center. Yucca: that's why we say May, we're going to try really hard, technology willing, right, Rana? Rana: So, the last time we had Sun Tree, we hadn't yet started our adult salon. Which we recently rebranded as Adult Forum, and I'm really excited to be able to have that in person for the very first time. I've really valued it as a space to connect and share resources and share a little bit about our experiences and our lives. And for folks that might not be as familiar with what it is, it is a peer support space to discuss adult topics openly, and it is, we consider it kind of semi structured. We usually start with a topic just as a starting point of conversation, and then we let things naturally flow depending on what the participants want to talk about, what's on their minds, can go through multiple topics in one session. It is a confidential and non judgmental setting where we're really there to learn from each other's experiences, share our knowledge, especially if you have a range of ages. There's folks that have just lived different lives or experiences that may have things to share feel less alone. In a lot of things that we encounter in life I know. There's a real epidemic of loneliness, especially in America, and it's something I always have felt really deeply about, but don't really know what to do about it, so I appreciate being able to be a part of this space and have this space together in order to continue that kind of connection and We're going to have a way for people to anonymously submit topics or questions while we're at the event so that the people that are there attending are really crafting what it is that we want to talk about and the topics have really ranged in the past and included things like money, relationship styles, aging, death, altered states, sexuality, and more and Yeah, I've just been really looking forward to it. It is an 18 plus event, and I just, I can't wait to have that in, in person. I think it'll be a great version of it, just because we've always had it remote. Mark: Yeah. Michael? Michael: I know there's one of the FAQs we get around this is that you know, is it going to be recorded? Am I going to be able to participate online? And unfortunately, no, it's just for some of the reasons we discussed. First of all, technology, it's not always reliable, so we can't really do live stuff. I think it's possible that some of the workshops will be recorded. That depends on the presenter. And, but we don't want to, we want to also, honor people's confidentiality as well. So it's possible that we can record some of them, but maybe some of them won't be recorded. But that's why we also offer our totally online conference every other year as well. So if you can't make it in person to SunTree, we will be doing our web weaving online conference next year. So that is just a way of bridging that gap where if you can't make it in person, there is still an online space for you to take part in. Mark: Right. Right. And I, and I should point out the adult forum will not be recorded. It's, it's a totally confidential, just live action space for people to, to have discussions about sensitive stuff. So you needn't worry that you're going to find yourself on the internet talking about personal things. Yucca: Right, and for any of the presenters who do choose to have their, their presentation recorded, it would just be of them, not of the audience. So there'll be the private, privacy for the folks in the audience. Mark: Yeah, because, I mean, there are, in our community, there are people who are You know, in various stages of outness in relation to their non theist atheopaganism, right? Some are out as atheists, but not necessarily the pagan part. Some are completely solitary in, in their You know, practice of their path, and we want to be respectful of all of that. So, it's really important to us that people be able to participate without endangering something that, that is important to them. Mijo? Michael: Something that's New this time around, as well, is that we will be kind of having formal vendors. I will be sharing a sign up sheet for people in the coming days, where you, if you want to, if you've got anything you want to sell, or products or services we will have a space for you to do that. So, if you're, it could be anything, you could be selling, selling your own craft, or, I guess, doing Readings or things like this. We'll just sign up and we'll we'll reach out to you if we need, if we have any further questions about the kind of stuff you're going to be sharing with us. Mark: We should say, though, that, that the vending is going to be during a particular window of time at the event, because what we don't want is for a vendor to be there stuck behind a counter, and for the entire event and unable to participate in the various activities, right? Because they're part of the community and we want them in with us doing all the stuff. So we're going to have a marketplace slot in the program, and that's when you can do your vending and, you know, promote your services and all that kind of stuff. So what else should we say about this? I mean, we know because we've been there, it's really cool. Hope that our listeners Yucca: to just put that out there for that part of the world. It's a nice warm time of year. Last time Michael: Will the swimming pool, Yucca: May, which was a little bit iffy, we got really lucky. last Mark: we did. Yucca: I think it started snowing right after we left, Mark: Yeah, something like three days afterwards it started snowing at the retreat center, but that's not going to happen this time, because we're on Labor Day weekend and it should be pretty temperate and nice. Michael: I think there's a swimming pool there as well. Mark: Oh, that's right, it was closed when we were there before, but there is a swimming pool there. Yes, Michael: We should double check if we have access to that, but I think we will, but we should probably double check that. Mark: yes, that's true. Ha ha ha! Michael: I guess you should definitely get booked in quickly if you are intending to come. Because we're, it's coming up fast. I can't believe it's only two months away, so you really need to start thinking about getting your, making your way there and booking your tickets. Mark: Yeah, yeah it's very affordable especially when you consider that it includes nine meals and the lodging for the, the Yurt guest houses is only 75 for the entire event. So it's you know, we, we, we set price points low because we wanted people to be able to access it and we know that there are travel expenses associated. We if you, if you want to come, but there are, you know, financial issues, we have limited scholarship support, so please contact us. You can use the the Wonder Podcast queues at gmail. com, podcast email address to contact us, and we'll get back to you about that. But we'd really encourage our listeners, you know, if you like what you've been hearing on this podcast for the last five years now come and, come and meet us. Come and, and, you know, meet the community and, and check us out. Michael: It was just, I don't know if I expressed how Amazing it was, but it was just such a unique, a singular event and kind of a highlight of my life, I'd really say. It was just spectacular, and I don't know if I, I don't know if I captured that before, but I just thought it was just an amazing thing to be part of. And I think it's going to be just as amazing this time around. Mark: Me too. Yeah. I, I, I can't wait to see you all. And and other folks that, you know, I met two years ago. I'm just, I'm so looking forward to it rana, I Rana: so for me, it, it really felt like coming full circle, like I'd connected with you all, and we spent so much time together during the pandemic. so much. My personal life was also going through some transition and Suntree was actually pretty emotional for me. It was good But I don't know it's a little hard to explain But it just felt like I did a lot of emotional processing while I was there But I very much felt like I was in community I was able to finally meet these people that I had connected with and So now it just feels like I have something to look forward to You going forward knowing that we're gonna do this with some regularity. And for myself as well, it also gave me some more confidence traveling alone because I'm used to traveling with a partner if I go somewhere, especially airplane travel. And so it helped me feel a little bit more adventurous and confident feeling like I went to a state I've never been to before and met up with some people and everything went great. Like, no, no complaints. Mark: really felt that same sense of just really being able to be myself. And I was surprised by that because as one of the organizers last time, I thought I was kind of going to have to be on and sort of be a host. You know, for the whole weekend. And that really wasn't the case at all. I, I, I just felt like, you know, I was, I was welcomed there, warts and all, and there were plenty of other people to help. And it was great. It was just really a good, good time. Well, listen, thank you. Oh, Michael: Hopefully we can do the, the firewalking this time, because last time we couldn't do it because there was a burn ban, but there is potential for doing a firework walk. So people are into that, that might be available. So we'll see what happens. Yucca: Keep our fingers crossed. Mark: that would be exciting. I've never done that, and I'd like to try it. I don't know why I'd like to try it. I, but I would. Michael: That's the ultimate ritual, I guess. And for anybody who's kind of, their ears are pricking up when they hear that the person leading that has got decades of experience. Mark: Yeah. And, you know, very, very careful rules around, you know, everybody having to be absolutely sober, you know, being, you know, a lot of focus, doing this in a really sacred kind of container, so that's that's That's all to the good. Let me see. So, we're gonna put the link to the the event in the show notes. You can go, you can read the program, you can read about the event, you can see a picture of the Ponderosa Lodge and Atheopagan Society website, there's also a gallery of photos that were taken at the last Suntree retreat. So you can take a look at that.  Michael: Could you add in the show notes as well? Could you add the episode we actually recorded? Yucca: Oh yeah, let's link to that because we, yeah, that would be nice to go back and listen to actually. And what was it like in the moment? So that'll be in the show notes too. Mark: yeah, yeah, I just, I just remember we're sitting there and we're talking and people would cruise up to the table glowing and sit down in front of the microphone for a little while and talk about the experience they were having and then toddle off and somebody else would come by. It was just, it was lovely. So listen, folks Sun Tree Retreat, you don't want to miss it. Please come join us, visit with us. We, we would so love to see you. And we will be back next week with another episode of The Wonders of Science Based Paganism. Thank you, Rana and Michael. Thank you for being here. Michael: Thank you.   

In this profound episode, Jonathan is joined by esteemed theologian and author Michael Horton to discuss his latest book, "Recovering Our Sanity: How the Fear of God Conquers the Fears that Divide Us." In a world teetering on the brink of chaos—from unsettling politics to the lingering effects of the global pandemic—Horton's book offers not a typical self-help guide but a deep theological exploration of how a proper fear of God can liberate us from our myriad earthly fears.Dr. Horton, Professor of Theology and Apologetics at Westminster Seminary, explains what it truly means to fear God—both biblically and theologically—and how this reverential fear can effectively drive out fears of the future, others, and even death itself.Throughout the episode, Dr. Horton discusses the different types of fears that plague our society—from cultural anxieties to personal struggles—and how these stem from a lack of genuine fear of God. He emphasizes confronting our earthly fears with the hope found in Christ, rooted in the Gospel, and the shift from self-preservation to a Christ-focused life.This episode is a humbling, thought-provoking, and hope-igniting journey that challenges listeners to replace false securities with the profound joy of knowing Christ, who commands us, "Do not be afraid." Join us as we explore how cultivating a healthy fear of God can recover our sanity in these turbulent times.To ask Jonathan a question or connect with the Candid community, visit https://LTW.org/CandidFacebook: https://www.facebook.com/candidpodInstagram: https://www.instagram.com/candidpodTwitter: https://twitter.com/thecandidpodTRANSCRIPT:This transcript recounts Candid Conversations with Jonathan Youssef Episode 249: Recovering Our Sanity: How the Fear of God Conquers the Fears That Divide Us: Michael Horton.  [00:01] Jonathan: My very special guest is Mike Horton. He is a professor of systematic theology and apologetics at Westminster Seminary in California, and he is the author of many books, including The Christian Faith Ordinary and Core Christianity. He also hosts the White Horse Inn radio program. He lives with his wife, Lisa, and their four children in Escondido, California, and it looks like he's on his back patio,  having a conversation with me and being very gracious with his time. Mike Horton, thank you so much for taking the time to be on Candid Conversations.[00:45] Michael: Thank you, Jonathan.[00:50] Jonathan: I do thank you for your time. Now Mike, I've read your books, I have subscribed and I do recommend all of our listeners subscribe to the White Horse Inn. If you could just give us a quick, whirlwind tour of your story, we can talk a little bit about the podcast and some of your books as we progress through the interview.[01:19] Michael: Well, thank you, Jonathan. Yeah, I was raised in a Christian home and came to understand the doctrines of grace partly through my older brother. Kind of had my own little, not little, my own Romans revolution and then started digging deeper into Church history and theology and biblical studies, and eventually went to Biola University, Westminster California, then to Oxford for doctoral studies and then post-doc at Yale and came back to teach at my alma mater and have been here for 25 years. Blessed to be able to have a hand, with my colleagues, in training pastors; pastors training pastors.[02:17] Jonathan: I've been a recipient of many of the students of Westminster Seminary who taught me at Reformed Theological Seminary in Atlanta, and I've been really blessed by your work. You've got a very jovial, friendly, California vibe to you, but when you speak, you're like a double-edged sword. It's so penetrating. And I think there could be a theological issue that I've been struggling with for months and you'll say it so concisely in a few sentences, and I'll think, Where was that when I needed that?[03:09] Michael: You're too kind. Thank you.[03:11] Jonathan: Tell us a little bit about the White Horse Inn. It has been on for something like thirty years.[03:17] Michael: Yeah, thirty-plus, almost thirty-five years now. It has been such a fun thing. I've learned so much from my colleagues on the program. I still learn from the new team. We produce a magazine, too, Modern Reformation Magazine, which is really—I encourage people to subscribe to that. It's a good digest of topical theology related to culture. The umbrella organization is called Sola Media, and one of the things that we do that I'm so excited about being a part of is called Theo Global, where we host theological conversations (like we do on the White Horse Inn) between Baptist, Lutheran, Reformed, Anglican traditions and bring people together from a particular region. So we've been doing it for eleven years in India and also almost that long in Nigeria or in Kenya, in Nairobi. And then also Cairo for the Middle East. We just did one in Thailand that Pakistanis and Indians were able to come to, because they're not able usually to see each other. And then we are, Lord willing, starting another one in Southeast Asia, probably Singapore.So these have been so rich. Out of them are coming, a series of theology books from the global church to the global church. And so instead of having just regional theologies or theologies that pretend that they're not culturally contextual, we want to hear the voices of people from different locations testifying to the same Gospel, and that's just really been lots of fun.[05:42] Jonathan: Well, having ministered near that area of the world in Australia, you're right, there can be a disconnect between the cultures. We read each other's books and that sort of thing, and those are Western cultures, but I think we miss out on hearing about what is happening in Southeast Asia, Because they do face similar obstacles but also some quite different. As one of the points of your book is, there is still the one true God and the one Gospel that reaches across those cultures and reaches across so many of those things that we would consider barriers. And I think that's wonderful. I pray the Lord would bless that.[06:30] Michael: Thank you. One of the things I find, Jonathan, is there is a sweet unity around the Gospel that binds us when I go to these other places. Wherever I am in the world, I don't feel like I'm a stranger because I'm with my brothers and sisters. I wish I felt the same way in America. It's very different here.[06:51] Jonathan: Yeah, I was going to say it's interesting that what you're doing is you're unifying and uniting across denominations, across cultural things, and yet that's working almost in the opposite direction of where we see things here, which is there's division within denominations; there's division within small regions. You're undoing what is happening on a bigger scale in some of the Western parts. It's exciting to hear that's not happening everywhere, that there's actually some unification taking place and that's encouraging. And I know that's going to be an aspect of what we talk about in our conversation about one of your new books.Now, I know that you had some health issues with your heart a couple of years ago. Maybe for some of our audience who didn't know or having heard any updates, are you healthy?[07:54] Michael: Thanks for asking. Yes, what it was was a valve that just exploded in my heart, so it was an emergency open-heart surgery. But they said—they know my arteries and my heart better than anybody, they said, you'll die of something, but it won't be of heart disease. You have a good heart; you have good arteries; this was just a fluke.[08:24] Jonathan: Unbelievable.[08:25] Michael: So—yeah. I'm fully recovered. They said I could go bungee jumping again if I want to.[08:32] Jonathan: Again. I'm glad that you were already doing that—I picked up your book a while ago and I've been wanting to have you on the podcast ever since reading it. And the book is called Recovering Our Sanity: How the Fear of God Conquers the Fears that Divide Us. And my goodness, what a perfect title for everything we see. Give us a little bit of the reason for writing and the timing of the book.[09:18] Michael: Well, it had been percolating for years now, actually. I wrote a book many years ago called Beyond Culture Wars: Is America a Mission Field or a Battlefield? And this is in a similar vein, but really in light of the fears that really divide us today. And the center used to be the Bible, the Gospel, getting the Gospel right and getting the Gospel out. We have our doctrinal differences across the evangelical mainstream, but basically we had different political views and those political views didn't divide between brothers and sisters and churches.And what I've seen lately has just been like a food fight in a cafeteria, and political issues and social issues raised to the level of the Trinity. And it's like, okay, well, we can argue about that over coffee, but we don't bring it into the church. That used to be kind of how people thought about things. These things are important, but they're not as important as our unity in Christ. But I hear people attacking pastors, pastors attacking their flock, back and forth over these issues. And I think people don't get this heated over the doctrine of election or justification or the Trinity. Does it suggest that these issues are deeper in our hearts than the truth of Christianity, so what really binds us?And I looked at it and I said what really binds us is salvation, what we think we're saved from. If we think we're saved from the people over there who are threatening our values, or the people over there who are different from us ethnically, or the people over there who have a different view of economics and social justice? What are we really afraid of? What are our ultimate fears? And I argue that we have all these secondary fears. The real fear deep down, the mother of all fears, is the fear of death. And none of the solutions that can be offered by FOX or CNN, there is no solution to that. But we have it. Why isn't that on our dashboard as central, getting it right and getting it out?[13:01] Jonathan: In the book you cast a broad net in kind of what you've just said up here, picking out a few of the issues that you're seeing so much division over. But then you lay out some of the theological framework to reorientate your reader to where fear should rightly be placed. And it's away from the fear of one another and having a right fear of God.And you use the word sublime in the book, which I found really helpful as an aspect of God. I wonder if you could give us a little bit of explanation and walk that out for us.[13:52] Michael: Sure. I love that word. Sublime is really, I think, what we're talking about when we talk about the fear of God. Some people will say, “Well, it's not really fear. It's reverence, awe.” Fear is a big part of it, but it's a kind of fear that attracts. Think of what happens if you've ever stood at the mouth of a volcano, looking over it, watching the lava flow. Or I live in Southern California, so we have fires, and there's a kind of weird attraction to going to the fire and seeing it. Or you're out on the ocean and you're terrified. A squall comes up you're afraid, but you're also kind of your heart is racing not just because you're afraid, but also because you're kind of in awe of what's happening. In awe of the waves.God, you know whenever an angel shows up in the Bible, an emissary of God, what's the first thing? You know the number-one commandment throughout Scripture? The number-one command is “Be not afraid.” Because when even the mailman of God shows up, people are terrified.[15:31] Jonathan: Yeah, or Moses's face is a little too bright.[15:36] Michael: Yeah. Hey, put a napkin over that or something… That's what, really, is the basis for all sublime events, encounters that we have is really the fear of God. And so it's … A Jewish writer, John Levinson, puts it well. He says, “In the Hebrew Scriptures God beckons with one hand and repels with the other.”So there's a kind of don't get too close. Even Jesus in His Resurrection, “Don't touch me. I'm different.” God is different from us. And that sense of awe, of majesty, of even terror. Think of the disciples in the boat with Jesus. They were afraid of the storm, and then Jesus calmed the storm and they were afraid of Jesus. Who is this who has control over the winds and the waves? They were terrified. And that's the kind of Who is this? What am I dealing with here? The kind of shock and awe, the surprise is something that is missing, I think, from a lot of our experience as Christians today.[17:11] Jonathan: Well, and I know in the book we've seen a lot of the statistical evidence that comes in support of what you've just said, which shows that evangelical Christians really don't know what they believe. They have a complete misunderstanding of God, of the nature of Christ, of their roles.[17:51] Michael: If the fear of God is not the beginning of our wisdom, then something else will be. We'll fear something else. We will fear other people who are different from us and we'll fear cancer, we'll fear losing our job, we'll fear environmental collapse and catastrophe, we'll fear these other people taking over. It's not that those … that there aren't legitimate concerns of a political and social and cultural nature. But we have a disordered fear. And if we have disordered fears, we have disordered loves.God is not only the source of our greatest fear, legitimate fear; He's also the only one who conquers our fears and says, “Welcome home, prodigal. Welcome home, here's the feast.”[19:22] Jonathan: And deals with our, as you refer to it, the mother of all fears.[19:27] Michael: Death. We're dying. In California, people aren't allowed to die; they pass away; and we put these cemeteries out, far away from view, or we turn them into parks and things. And it used to be every time you walked into a church there would be headstones, and it reminded you as you walked in why you're going in there. The Gospel is for dying people, and we're all on that road. And so the question is, How do we face death? … How is that ultimate anxiety relieved? We mourn, but not as those who have no hope. So what does that mean for my daily life now? I could be twelve years old and I'm dying. I could be eighty and I'm dying. So what … Let's talk about that. Let's talk about the dying and the resurrection of the dead and being attached to Jesus so that what He is in His humanity right now, glorified, we will be. Let's talk about that. That's a lot better than anything on CNN or FOX.[21:00] Jonathan: I love it. I think in the book you tell the story of when you went to a debate with, I might be messing this up, but I think it was with an atheist and you sort of said, “Yep. Great. Can I talk about Jesus now” and kind of put him off, and he sort of like, “I wasn't prepared to debate that.”[21:22] Michael: Yeah. This was years ago. Bill Nye the Science Nye.[21:24] Jonathan: Bill Nigh, that's right.[21:25] Michael: He was talking about how religion is based on false fears and so they develop myths and so forth.[21:37] Jonathan: And you were like, “Well, that's true.”[21:39] Michael: Yeah. I don't disagree; that's a pretty fair analysis of religions. I guess you'd have to take one by one and analyze it, but as a generalization, now can I talk about Jesus and His Resurrection? Let's keep getting back to the main business here.[21:59] Jonathan: The main issue. Yeah. In the book you draw this distinction between naturalistic and hyper supernatural, but then you sort of carve out this third option of ordinary. Can we talk a little bit about that and how we see that playing out in our world today, particularly in the Church?[22:23] Michael: Sure. Often what you see today is a naturalism underwriting the progressive agenda and John Lennon's “Imagine.” On the right, you tend to have a hyper supernaturalism wedded to a conservative agenda. And so what do I mean by that? Well, a naturalistic worldview says, of course, God isn't involved. If God exists, then He's not involved in this world. He didn't create it, it's self-evolving and so forth.A hyper-supernatural worldview says that God works miraculous. You know, to say that God did it means it's a miracle.[23:34] Jonathan: Yeah.[23:35] Michael: Whereas in the Bible God does all sorts of things. Mostly, He doesn't perform miracles. What about all the times when we cut our finger and it heals after a week? What about that? What about a child [who] has a brain bleed in NICU and it resolves in 24 hours. How about those? Those aren't miracles. People say, “the miracle of childbirth.” There's no miracle of childbirth; it's just a spectacular example of God's providence. That's part of our problem is we're looking for God only in the spectacular, only in the extraordinary, only in places where we can point to and say, “Oh, God did that.”So we can't explain how somebody recovered from cancer; we say, “Well, God did it, not the doctors.”[24:46] Jonathan: Right.[24:47] Michael: Well, how about God did it and the doctors did it. God did it through the doctors.[24:52] Jonathan: How much control does God have here?[24:55] Michael: Right. He has control of everything. It's not just supernatural events; it's not just miracles. God's in control of every second, every breath. Every breath that you and I take is under His dominion.[25:11] Jonathan: That's right. He holds all things together. You know, I hear that phrase a lot, “That was a God thing. That was a God thing,” and I always have to stop and say to them, “Everything is a God thing.” I mean, conversations. The fact that your brain works. The ability to read. The ability to understand and reason. It's like I hate when you get that narrow scope, as you're saying. We've lost the sublime. We've lost an understanding of how much—you know, it's almost a deistic view that, you know, God sort of—[25:42] Michael: Yes![25:43] Jonathan: He's put some things in place and then He occasionally steps in and—[25:47] Michael: That's why I argue that actually naturalism and hyper supernaturalism unintentionally conspire with each other against Christianity—[25:57] Jonathan: Right.[25:58] Michael: —you know because, you know, we get to the place where we don't see God in our ordinary, everyday existence, but only in these punctuated events, and we've got to raise things. I think we do a lot of pretending. We pretend that things that have an ordinary explanation are miracles because we have to have God in our life. These large swaths of our lives where there are no miracles are upheld by God's marvelous providence.[26:40] Jonathan: Right. Amen to that. In the book, one of the fears you mentioned is fear of losing your job. And I think in the book you helpfully distinguish between calling and vocation or job and helping us understand and distinguish the two things. I wonder if we can talk a little bit of bringing clarity to that, because we're longing for something to put our identity in. Is it a football club? Is it a university? We're currently, I don't know when this will air, but we're in the middle of March Madness. Who did you pick? What's your university? What's your background?And vocation is very much one of those things we can put our identity in, and yet I think you talk about the ultimate and the penultimate between calling and vocation. I wonder if you could bring some clarity to that, and then we'll turn to some of the practical outworkings of the division we see after that.[27:53] Michael: Yeah. Well, one of the things I try to maintain throughout the book is, look, the things I'm talking about are not unimportant. They are legitimate fears. There is a legitimate anxiety. The question is, where do we go with that? But yes, let's affirm it. It's real, it's a deal, but penultimate not ultimate.For example, if I am in a circle of people I've never met before, we're having breakfast, and I ask them, “Tell me about yourself,” very ordinarily they'll say, “Well, I'm a dentist. I'm a …”Now okay, there's an example. That is part of our identity. Vocation is a gift of God; it's a calling. So to say, you know, we shouldn't place our identity in our vocations, well, not ultimately. That's the problem. It's a part of our identity, just like being a father is part of my identity. That's a calling. And we have to realize, as Luther said, we have many callings, many vocations during our life. We're parents, we're spouses, we're children, we are extended family members, we're dentists, and cleaning movie theaters. We have all kinds of callings/vocations. Sometimes we have a vocation to suffer, to carry a cross. Sometimes we have a vocation to be a friend. We have lots of vocations, and keeping them in balance is very important.Keeping them penultimate, not ultimate, is my point. My ultimate identity is chosen, redeemed, justified, being sanctified, will be glorified, in union with Christ. That's my identity and that's really who I am. Paul talks about himself as if he's almost collapsed into Jesus. His identity is so bound up with Christ that he can even say his suffering is something he glories in because it shares in Christ's suffering. That's my identity; that's where I really find who I am. The other stuff is not just stuff I do, that turns it back into a job. It is part of my identity, but it's penultimate, not ultimate.[30:57] Jonathan: Well, as we said at the beginning, we see division in so many different places. We're, of course, as you know, we're in another election year, and that—fear is going to be used as a … it's going to be weaponized this year, particularly this year, in America. And we have an international audience, so I want to be sensitive, but I know that internationally also they see a lot of American news as well. I think you talk about how, in the book, two sides to the fear coin. You mention both in the book. One side, fear is easily exploited as a motivator. On the other, fear is a weak motivator in the long term. Why is that? Let's kind of unpack that a little bit.[32:07] Michael: Yeah. I use the analogy of deer who are … there is this fight or flight that God gave us and the animals as well. It's purely instinctual, instinctive. You don't … Whether you're a deer or a human being, you don't really think about, you don't contemplate, you don't calculate, you don't explore what … You have a car coming towards you, you flee. You get out of its way if you can. But what happens is—That's adrenaline. That adrenaline rush is just a marvelous gift of God's providence. The problem is what would happen is deer had this disease of constantly being afraid, every crack of brush of another deer drove them wild running in fear? That's what I see us doing now, and what happens is it works in the short term. If you're going to cynically use fear to get a herd of people to do what you want them to do, that might work in the short term, but long term, people can't live like that. Long term, people actually become cynical. They won't participate at all. They'll just turn it off because “I've had this scare a thousand times and I'm not going to have it anymore. I'm tired of it.” It just runs out.And that's what I think a lot of people are feeling right now with American politics. So I'm not an analyst of American politics by any stretch of the imagination; I'm simply looking at it on the pastoral side. What is driving us to be like the deer in the headlights every five minutes? And it's exhausting us.[34:33] Jonathan: Yeah.[34:34] Michael: Each side whipping up the other side against each other. If I don't win this election, dot, dot, dot. If the other person wins the election, dot, dot, dot. It's apocalypse not. I especially find offensive any use of God or the Bible or Christ for that fear. Anyone who does that, particularly cynical leaders who don't even go to church, aren't professing Christians really, but they use the lingo to gain the nomination of particular groups. When Christians participate in that, they carry crosses to the U.S. Capitol to storm it and talk about hanging the vice president, and they're carrying crosses with Bible verses, this is the sort of thing that must just aggravate our Lord and Savior whose name is taken in vain.And yeah, is that a critique especially of evangelical political conservatives? Yes, it is. Because they are my brothers and sisters closest to me. The secularists aren't really invoking the name of Jesus and Bible verses and carrying crosses. I'm more worried about evangelicals distorting the gospel than I am about who wins this next election.[36:54] Jonathan: What is that doing to your testimony to those people who don't know the Lord? What message is it giving them?[37:10] Michael: That Christianity is about power.[37:11] Jonathan: Right, exactly.[37:12] Michael: It's not about a cross with God who has all power becoming flesh being spat upon and then being crucified upon a cross, bleeding for our sins. It's about basically choosing Caesar over Jesus, making Pilate our hero rather than Jesus.[37:45] Jonathan: I found that chapter, I can't remember if it's the Christian nationalism chapter or the one before, but it was really helpful the way that you walked out American history in a way that probably a lot of the readers might say, “I don't know if I understood that.” Or “I don't know if I fully understood Thomas Jefferson and his letter to the Danbury Baptist Church in Connecticut.” Understanding separation of church and state, understanding like how we got to where we are and the creating of even thinking between the British … French revolution and those different paths that were laid out before us. And even just understanding our own history and how we got to where we are, I think a lot of it is just cast as Christian nation. And I found it helpful the way you distinguish that.Because I hear this a lot in the church in terms of America being the new Israel, are there blessings that have come with certain things? Sure, fine. Our Constitution is well put together. I love the history of Witherspoon, the Scottish Presbyterian, and you can see some of that in the language that comes out through the Constitution. Again, I think it's helpful to have your historical understanding rather than this reinterpretation that we have now that it's, as you said, it's this feeling like someone's come in and taken this from us. And now, to use the title of your other book, now we're at war, right? It's not a mission field, it's a battlefield. We're fighting for the honor of our country. And all that's done is create us and them division and a lack of clarity and a lack of what we're called to in a mission sense as Christians. Where was I going with that? Who knows? Anyway, I found it helpful.[40:10] Michael: You said it better. Preach it, brother.[40:16] Jonathan: Just random thoughts. Just reading your books and regurgitating it to the people. So later on in the book you sort of walk us through the areas where division has come in. So we have Christian nationalism has certainly seeped into churches. Then you have some really helpful, short chapters with issues with LGBTQ+ community, cancel culture, racism. Let's just kind of walk through some of these and help Christians who are listening to this who are saying, I thought this was the right way to handle that situation but you're saying something else. Let's kind of walk through maybe even just one or two of those. Again, you had a really great illustration under your LGBTQ+ chapter of the young man whose family had sent him to you and you were pastoring him and what happened with all that. If you could tell us a little bit about that, just to help kind of encapsulate what we're talking about here.[41:35] Michael: Sure, this brother struggling with homosexuality, his dad was on the board of a prominent evangelical organization, and his pastor had told him that we basically don't want your influence in the church, so he was considering leaving the faith. But then he read Putting Amazing Back Into Grace, a book I wrote a long time ago, and came out to work at our organization as just a pretext for just hanging out and shepherding this guy. He became a part of our church and a lot of people looked after him and we got a lot back from him.He went back home, and his pastor said that all this reformed teaching he was getting was heresy and so forth, and no, you've lost your salvation. Romans says that He gave them over to a depraved mind. So he committed suicide and …So what is it? Why do you do stuff like that? Well, you do it out of bad theology, to be sure, but also out of fear. There are a lot of churches that just don't want to deal with it. They don't want to have this problem. They don't want to say that they have people in their congregation who are really, really suffering. If you're a secularist, you don't suffer from homosexuality. You don't suffer with gender dysphoria. Only Christians do. And only Christians suffer with greed and envy and malice and other sins that are listed in these same sin lists in the New Testament. You don't lose your salvation over those.The key is repentance, right? We're called to a life of repentance. Whatever our tendencies are towards particular sins, we're all corrupt in heart. We're sinners and we're sinned against and we are in a sin-cursed world. And so where do we go with that fear? And then once that fear is solved objectively in Christ, having been justified through faith, we have peace with God. That's an objective fact. With that now as an objective fact, how do I respond to this brother or sister who's justified just as I am, and who is being sanctified just as I am, but has propensity toward a particular sin that I think is particularly serious, particularly great? How do I love this person? How do I respond to this person?John Calvin said a pastor needs to learn how to have two voices: one for the sheep and one for the wolves. And what I've seen in some very close cases to my own experience, what I've seen sometimes is pastors confusing the sheep for wolves and treating them as apostates or as people who, you know, if you really were a Christian, you wouldn't be suffering with that. Well, they're not saying, “I have a right to this sin.” They're not saying that it's okay. That's why they're struggling with it—and they're struggling with it in your church.So one of the surveys, actually a couple of the surveys concluded that about 80 percent of people in the LGBTQ+ community were raised in conservative Roman Catholic or Protestant churches.[46:39] Jonathan: Give that statistic again because I think we need to hear it again.[46:42] Michael: I don't know exact, it's in the 80s, 80 percent.[46:46] Jonathan: Over 80 percent.[46:49] Michael: Right. And what's even more striking is the same percentage said that they would come back to church, even if they didn't change their rules, but listened to them and cared for them. That's what I found amazing. I was glad that they asked … they added in that survey even if they didn't change their beliefs but they were kind and they listened and they cared for me.So if I'm fearful, here again the adrenaline, the deer in the headlights, that's a gift God gave us for fleeing something that is imminently threatening. This is not imminently threatening. If I come to understand that, then I'm not a deer in the headlights; instead, my brother or sister, my friend, parent, I'm someone who is looking out for the best of this person and now I can actually get ahold of myself and think and make judgments and articulate things. And ask questions and get information. That's a big part of it. It's not all spiritual. People are suffering from mental health disorders, and that's physical, that's brain chemistry. All kinds of things.People are suffering from sins that have been committed against them in the past. A lot of this is very complicated, and it's not all that person's direct fault. Again, we're all sinners, sinned against, and live in a sin-cursed world. And all those factors play into what we have to consider when we're not the deer in the headlights but can sit down with people over a long time, be willing to walk with them over a long time, be willing to read up on things, ask them questions, we're that interested in them and understanding what they're going through, understanding their pain. It's like if they have cancer we'd be at their house with casseroles, but if they have these things, you know … So let's … fear of the Lord drives out the fears of everyone and everything else. This is the beginning of wisdom.[48:52] Jonathan: Exactly. Well, I think we could probably have this conversation for probably another four more hours, which we might do just because we're having so many technical difficulties. You know, I can't recommend this book enough. Mike Horton, Recovering Our Sanity: How the Fear of God Conquers the Fears that Divide Us. I told my team I want to re-air this as we get closer to November so that we can all be reminded once again of what we're called to. Mike, what are you working on at the moment?[50:35] Michael: I've been kind of obsessive compulsive about a project, three volumes with Eerdmans. First volume is coming out in May, titled Shaman and Sage. This is a very different project. It's the history of spiritual not religious. Where does this come from? You have this divine self within trying to break out of all constraints. And so I trace it all the way back to ancient Greece and to the Renaissance. And then the second volume, Renaissance to the scientific revolution. And then the third volume is covering Romanticism to the present.[51:31] Jonathan: Oprah.[51:32] Michael: Exactly.[51:35] Jonathan: That's going to be a massive help for believers, because that's the one we see a lot in those statistics. Yeah, I hear that from quite a few people, spiritual but not religious, or whatever the phrase is. But well, Mike Horton, it's been such a privilege. I'm so grateful for your time and coming on to Candid Conversations and sharing with us.[52:10] Michael: Jonathan, thank you so much. It's been a pleasure.[52:14] Jonathan: Thank you, brother.  

Michael talks about new 2024 race polling data, and the latest concerns surrounding the two top candidates, President Biden & Former President Trump, and expands on his reaction to criticism he received on social media over the weekend, in response to his coverage of Biden and Trump on CNN. Original air date 12 February 2024.

At the AI Pioneers Summit we announced Latent Space Launchpad, an AI-focused accelerator in partnership with Decibel. If you're an AI founder of enterprise early adopter, fill out this form and we'll be in touch with more details. We also have a lot of events coming up as we wrap up the year, so make sure to check out our community events page and come say hi!We previously interviewed the founders of many developer productivity startups embedded in the IDE, like Codium AI, Cursor, and Codeium. We also covered Replit's (former) SOTA model, replit-code-v1-3b and most recently had Amjad and Michele announce replit-code-v1_5-3b at the AI Engineer Summit.Much has been speculated about the StackOverflow traffic drop since ChatGPT release, but the experience is still not perfect. There's now a new player in the “search for developers” arena: Phind.Phind's goal is to help you find answers to your technical questions, and then help you implement them. For example “What should I use to create a frontend for a Python script?” returns a list of frameworks as well as links to the sources. You can then ask follow up questions on specific implementation details, having it write some code for you, etc. They have both a web version and a VS Code integrationThey recently were top of Hacker News with the announcement of their latest model, which is now the #1 rated model on the BigCode Leaderboard, beating their previous version:TLDR Cheat Sheet:* Based on CodeLlama-34B, which is trained on 500B tokens* Further fine-tuned on 70B+ high quality code and reasoning tokens* Expanded context window to 16k tokens* 5x faster than GPT-4 (100 tok/s vs 20 tok/s on single stream)* 74.7% HumanEval vs 45% for the base modelWe've talked before about HumanEval being limited in a lot of cases and how it needs to be complemented with “vibe based” evals. Phind thinks of evals alongside two axis: * Context quality: when asking the model to generate code, was the context high quality? Did we put outdated examples in it? Did we retrieve the wrong files?* Result quality: was the code generated correct? Did it follow the instructions I gave it or did it misunderstand some of it?If you have bad results with bad context, you might get to a good result by working on better RAG. If you have good context and bad result you might either need to work on your prompting or you have hit the limits of the model, which leads you to fine tuning (like they did). Michael was really early to this space and started working on CommonCrawl filtering and indexing back in 2020, which led to a lot of the insights that now power Phind. We talked about that evolution, his experience at YC, how he got Paul Graham to invest in Phind and invite him to dinner at his house, and how Ron Conway connected him with Jensen Huang to get access to more GPUs!Show Notes* Phind* BigScience T0* InstructGPT Paper* Inception-V3* LMQL* Marginalia Nu* Mistral AI* People:* Paul Graham (pg)* Ron Conway* Yacine Jernite from HuggingFace* Jeff DelaneyTimestamps* [00:00:00] Intros & Michael's early interest in computer vision* [00:03:14] Pivoting to NLP and natural language question answering models* [00:07:20] Building a search engine index of Common Crawl and web pages* [00:11:26] Releasing the first version of Hello based on the search index and BigScience T0 model* [00:14:02] Deciding to focus the search engine specifically for programmers* [00:17:39] Overview of Phind's current product and focus on code reasoning* [00:21:51] The future vision for Phind to go from idea to complete code* [00:24:03] Transitioning to using the GPT-4 model and the impact it had* [00:29:43] Developing the Phind model based on CodeLlama and additional training* [00:32:28] Plans to continue improving the Phind model with open source technologies* [00:43:59] The story of meeting Paul Graham and Ron Conway and how that impacted the company* [00:53:02] How Ron Conway helped them get GPUs from Nvidia* [00:57:12] Tips on how Michael learns complex AI topics* [01:01:12] Lightning RoundTranscriptAlessio: Hey everyone, welcome to the Latent Space Podcast. This is Alessio, partner and CTO of Residence and Decibel Partners, and I'm joined by my co-host Swyx, founder of Smol AI. [00:00:19]Swyx: Hey, and today we have in the studio Michael Royzen from Phind. Welcome. [00:00:23]Michael: Thank you so much. [00:00:24]Alessio: It's great to be here. [00:00:25]Swyx: Yeah, we are recording this in a surprisingly hot October in San Francisco. And sometimes the studio works, but the blue angels are flying by right now, so sorry about the noise. So welcome. I've seen Phind blow up this year, mostly, I think since your launch in Feb and V2 and then your Hacker News posts. We tend to like to introduce our guests, but then obviously you can fill in the blanks with the origin story. You actually were a high school entrepreneur. You started SmartLens, which is a computer vision startup in 2017. [00:00:59]Michael: That's right. I remember when like TensorFlow came out and people started talking about, obviously at the time after AlexNet, the deep learning revolution was already in flow. Good computer vision models were a thing. And what really made me interested in deep learning was I got invited to go to Apple's WWDC conference as a student scholar because I was really into making iOS apps at the time. So I go there and I go to this talk where they added an API that let people run computer vision models on the device using far more efficient GPU primitives. After seeing that, I was like, oh, this is cool. This is going to have a big explosion of different computer vision models running locally on the iPhone. And so I had this crazy idea where it was like, what if I could just make this model that could recognize just about anything and have it run on the device? And that was the genesis for what eventually became SmartLens. I took this data set called ImageNet 22K. So most people, when they think of ImageNet, think of ImageNet 1K. But the full ImageNet actually has, I think, 22,000 different categories. So I took that, filtered it, pre-processed it, and then did a massive fine tune on Inception V3, which was, I think, the state of the art deep convolutional computer vision model at the time. And to my surprise, it actually worked insanely well. I had no idea what would happen if I give a single model. I think it ended up being 17,000 categories approximately that I collapsed them into. It worked so well that it actually worked better than Google Lens, which released its V1 around the same time. And on top of this, the model ran on the device. So it didn't need an internet connection. A big part of the issue with Google Lens at the time was that connections were slower. 4G was around, but it wasn't nearly as fast. So there was a noticeable lag having to upload an image to a server and get it back. But just processing it locally, even on the iPhones of the day in 2017, much faster. It was a cool little project. It got some traction. TechCrunch wrote about it. There was kind of like one big spike in usage, and then over time it tapered off. But people still pay for it, which is wild. [00:03:14]Swyx: That's awesome. Oh, it's like a monthly or annual subscription? [00:03:16]Michael: Yeah, it's like a monthly subscription. [00:03:18]Swyx: Even though you don't actually have any servers? [00:03:19]Michael: Even though we don't have any servers. That's right. I was in high school. I had a little bit of money. I was like, yeah. [00:03:25]Swyx: That's awesome. I always wonder what the modern equivalents kind of "Be my eyes". And it would be actually disclosed in the GPT-4 Vision system card recently that the usage was surprisingly not that frequent. The extent to which all three of us have our sense of sight. I would think that if I lost my sense of sight, I would use Be My Eyes all the time. The average usage of Be My Eyes per day is 1.5 times. [00:03:49]Michael: Exactly. I was thinking about this as well, where I was also looking into image captioning, where you give a model an image and then it tells you what's in the image. But it turns out that what people want is the exact opposite. People want to give a description of an image and then have the AI generate the image. [00:04:04]Alessio: Oh, the other way. [00:04:06]Michael: Exactly. And so at the time, I think there were some GANs, NVIDIA was working on this back in 2019, 2020. They had some impressive, I think, face GANs where they had this model that would produce these really high quality portraits, but it wasn't able to take a natural language description the way Midjourney or DALL-E 3 can and just generate you an image with exactly what you described in it. [00:04:32]Swyx: And how did that get into NLP? [00:04:35]Michael: Yeah, I released the SmartLens app and that was around the time I was a senior in high school. I was applying to college. College rolls around. I'm still sort of working on updating the app in college. But I start thinking like, hey, what if I make an enterprise version of this as well? At the time, there was Clarify that provided some computer vision APIs, but I thought this massive classification model works so well and it's so small and so fast, might as well build an enterprise product. And I didn't even talk to users or do any of those things that you're supposed to do. I was just mainly interested in building a type of backend I've never built before. So I was mainly just doing it for myself just to learn. I built this enterprise classification product and as part of it, I'm also building an invoice processing product where using some of the aspects that I built previously, although obviously it's very different from classification, I wanted to be able to just extract a bunch of structured data from an unstructured invoice through our API. And that's what led me to Hugnyface for the first time because that involves some natural language components. And so I go to Hugnyface and with various encoder models that were around at the time, I used the standard BERT and also Longformer, which came out around the same time. And Longformer was interesting because it had a much bigger context window than those models at the time, like BERT, all of the first gen encoder only models, they only had a context window of 512 tokens and it's fixed. There's none of this alibi or ROPE that we have now where we can basically massage it to be longer. They're fixed, 512 absolute encodings. Longformer at the time was the only way that you can fit, say, like a sequence length or ask a question about like 4,000 tokens worth of text. Implemented Longformer, it worked super well, but like nobody really kind of used the enterprise product and that's kind of what I expected because at the end of the day, it was COVID. I was building this kind of mostly for me, mostly just kind of to learn. And so nobody really used it and my heart wasn't in it and I kind of just shelved it. But a little later, I went back to HugMeFace and I saw this demo that they had, and this is in the summer of 2020. They had this demo made by this researcher, Yacine Jernite, and he called it long form question answering. And basically, it was this self-contained notebook demo where you can ask a question the way that we do now with ChatGPT. It would do a lookup into some database and it would give you an answer. And it absolutely blew my mind. The demo itself, it used, I think, BART as the model and in the notebook, it had support for both an Elasticsearch index of Wikipedia, as well as a dense index powered by Facebook's FAISS. I think that's how you pronounce it. It was very iffy, but when it worked, I think the question in the demo was, why are all boats white? When it worked, it blew my mind that instead of doing this few shot thing, like people were doing with GPT-3 at the time, which is all the rage, you could just ask a model a question, provide no extra context, and it would know what to do and just give you the answer. It blew my mind to such an extent that I couldn't stop thinking about that. When I started thinking about ways to make it better, I tried training, doing the fine tune with a larger BART model. And this BART model, yeah, it was fine tuned on this Reddit data set called Eli5. So basically... [00:08:02]Alessio: Subreddit. [00:08:03]Swyx: Yeah, subreddit. [00:08:04]Alessio: Yeah. [00:08:05]Michael: And put it into like a well-formatted, relatively clean data set of like human questions and human answers. And that was a really great bootstrap for that model to be able to answer these types of questions. And so Eli5 actually turned out to be a good data set for training these types of question answering models, because the question is written by a human, the answer is written by a human, and at least helps the model get the format right, even if the model is still very small and it can't really think super well, at least it gets the format right. And so it ends up acting as kind of a glorified summarization model, where if it's fed in high quality context from the retrieval system, it's able to have a reasonably high quality output. And so once I made the model as big as I can, just fine tuning on BART large, I started looking for ways to improve the index. So in the demo, in the notebook, there were instructions for how to make an Elasticsearch index just for Wikipedia. And I was like, why not do all of Common Crawl? So I downloaded Common Crawl, and thankfully, I had like 10 or $15,000 worth of AWS credits left over from the SmartLens project. And that's what really allowed me to do this, because there's no other funding. I was still in college, not a lot of money, and so I was able to spin up a bunch of instances and just process all of Common Crawl, which is massive. So it's roughly like, it's terabytes of text. I went to Alexa to get the top 1,000 websites or 10,000 websites in the world, then filtered only by those websites, and then indexed those websites, because the web pages were already included in Dump. [00:09:38]Swyx: You mean to supplement Common Crawl or to filter Common Crawl? [00:09:41]Michael: Filter Common Crawl. [00:09:42]Alessio: Oh, okay. [00:09:43]Michael: Yeah, sorry. So we filtered Common Crawl just by the top, I think, 10,000, just to limit this, because obviously there's this massive long tail of small sites that are really cool, actually. There's other projects like, shout out to Marginalia Nu, which is a search engine specialized on the long tail. I think they actually exclude the top 10,000. [00:10:03]Swyx: That's what they do. [00:10:04]Alessio: Yeah. [00:10:05]Swyx: I've seen them around, I just don't really know what their pitch is. Okay, that makes sense. [00:10:08]Michael: So they exclude all the top stuff. So the long tail is cool, but for this, that was kind of out of the question, and that was most of the data anyway. So we've removed that. And then I indexed the remaining approximately 350 million webpages through Elasticsearch. So I built this index running on AWS with these webpages, and it actually worked quite well. You can ask it general common knowledge, history, politics, current events, questions, and it would be able to do a fast lookup in the index, feed it into the model, and it would give a surprisingly good result. And so when I saw that, I thought that this is definitely doable. And it kind of shocked me that no one else was doing this. And so this was now the fall of 2020. And yeah, I was kind of shocked no one was doing this, but it costs a lot of money to keep it up. I was still in college. There are things going on. I got bogged down by classes. And so I ended up shelving this for almost a full year, actually. When I returned to it in fall of 2021, when BigScience released T0, when BigScience released the T0 models, that was a massive jump in the reasoning ability of the model. And it was better at reasoning, it was better at summarization, it was still a glorified summarizer basically. [00:11:26]Swyx: Was this a precursor to Bloom? Because Bloom's the one that I know. [00:11:29]Alessio: Yeah. [00:11:30]Michael: Actually coming out in 2022. But Bloom had other problems where for whatever reason, the Bloom models just were never really that good, which is so sad because I really wanted to use them. But I think they didn't turn on that much data. I think they used like the original, they were trying to replicate GPT-3. So they just use those numbers, which we now know are like far below Chinchilla Optimal and even Chinchilla Optimal, which we can like talk about later, like what we're currently doing with MIMO goes, yeah, it goes way beyond that. But they weren't trying enough data. I'm not sure how that data was clean, but it probably wasn't super clean. And then they didn't really do any fine tuning until much later. So T0 worked well because they took the T5 models, which were closer to Chinchilla Optimal because I think they were trained on also like 300 something billion tokens, similar to GPT-3, but the models were much smaller. I think T0 is the first model that did large scale instruction tuning from diverse data sources in the fall of 2021. This is before Instruct GPT. This is before Flan T5, which came out in 2022. This is the very, very first, at least well-known example of that. And so it came out and then I did, on top of T0, I also did the Reddit Eli5 fine tune. And that was the first model and system that actually worked well enough to where I didn't get discouraged like I did previously, because the failure cases of the BART based system was so egregious. Sometimes it would just miss a question so horribly that it was just extremely discouraging. But for the first time, it was working reasonably well. Also using a much bigger model. I think the BART model is like 800 million parameters, but T0, we were using 3B. So it was T0, 3B, bigger model. And that was the very first iteration of Hello. So I ended up doing a show HN on Hacker News in January 2022 of that system. Our fine tune T0 model connected to our Elasticsearch index of those 350 million top 10,000 common crawl websites. And to the best of my knowledge, I think that's the first example that I'm aware of a LLM search engine model that's effectively connected to like a large enough index that I consider like an internet scale. So I think we were the first to release like an internet scale LLM powered rag search system In January 2022, around the time me and my future co-founder, Justin, we were like, this seems like the future. [00:14:02]Alessio: This is really cool. [00:14:03]Michael: I couldn't really sleep even like I was going to bed and I was like, I was thinking about it. Like I would say up until like 2.30 AM, like reading papers on my phone in bed, go to sleep, wake up the next morning at like eight and just be super excited to keep working. And I was also doing my thesis at the same time, my senior honors thesis at UT Austin about something very similar. We were researching factuality in abstractive question answering systems. So a lot of overlap with this project and the conclusions of my research actually kind of helped guide the development path of Hello. In the research, we found that LLMs, they don't know what they don't know. So the conclusion was, is that you always have to do a search to ensure that the model actually knows what it's talking about. And my favorite example of this even today is kind of with chat GPT browsing, where you can ask chat GPT browsing, how do I run llama.cpp? And chat GPT browsing will think that llama.cpp is some file on your computer that you can just compile with GCC and you're all good. It won't even bother doing a lookup, even though I'm sure somewhere in their internal prompts they have something like, if you're not sure, do a lookup. [00:15:13]Alessio: That's not good enough. So models don't know what they don't know. [00:15:15]Michael: You always have to do a search. And so we approached LLM powered question answering from the search angle. We pivoted to make this for programmers in June of 2022, around the time that we were getting into YC. We realized that what we're really interested in is the case where the models actually have to think. Because up until then, the models were kind of more glorified summarization models. We really thought of them like the Google featured snippets, but on steroids. And so we saw a future where the simpler questions would get commoditized. And I still think that's going to happen with like Google SGE and like it's nowadays, it's really not that hard to answer the more basic kind of like summarization, like current events questions with lightweight models that'll only continue to get cheaper over time. And so we kind of started thinking about this trade off where LLM models are going to get both better and cheaper over time. And that's going to force people who run them to make a choice. Either you can run a model of the same intelligence that you could previously for cheaper, or you can run a better model for the same price. So someone like Google, once the price kind of falls low enough, they're going to deploy and they're already doing this with SGE, they're going to deploy a relatively basic glorified summarizer model that can answer very basic questions about like current events, who won the Super Bowl, like, you know, what's going on on Capitol Hill, like those types of things. The flip side of that is like more complex questions where like you have to reason and you have to solve problems and like debug code. And we realized like we're much more interested in kind of going along the bleeding edge of that frontier case. And so we've optimized everything that we do for that. And that's a big reason of why we've built Phind specifically for programmers, as opposed to saying like, you know, we're kind of a search engine for everyone because as these models get more capable, we're very interested in seeing kind of what the emergent properties are in terms of reasoning, in terms of being able to solve complex multi-step problems. And I think that some of those emerging capabilities like we're starting to see, but we don't even fully understand. So I think there's always an opportunity for us to become more general if we wanted, but we've been along this path of like, what is the best, most advanced reasoning engine that's connected to your code base, that's connected to the internet that we can just provide. [00:17:39]Alessio: What is Phind today, pragmatically, from a product perspective, how do people interact with it? Yeah. Or does it plug into your workflow? [00:17:46]Michael: Yeah. [00:17:47]Alessio: So Phind is really a system. [00:17:48]Michael: Phind is a system for programmers when they have a question or when they're frustrated or when something's not working. [00:17:54]Swyx: When they're frustrated. [00:17:55]Alessio: Yeah. [00:17:56]Michael: For them to get on block. I think like the single, the most abstract page for Phind is like, if you're experiencing really any kind of issue as a programmer, we'll solve that issue for you in 15 seconds as opposed to 15 minutes or longer. Phind has an interface on the web. It has an interface in VS code and more IDEs to come, but ultimately it's just a system where a developer can paste in a question or paste in code that's not working and Phind will do a search on the internet or they will find other code in your code base perhaps that's relevant. And then we'll find the context that it needs to answer your question and then feed it to a reasoning engine powerful enough to actually answer it. So that's really the philosophy behind Phind. It's a system for getting developers the answers that they're looking for. And so right now from a product perspective, this means that we're really all about getting the right context. So the VS code extension that we launched recently is a big part of this because you can just ask a question and it knows where to find the right code context in your code. It can do an internet search as well. So it's up to date and it's not just reliant on what the model knows and it's able to figure out what it needs by itself and answer your question based on that. If it needs some help, you can also get yourself kind of just, there's opportunities for you yourself to put in all that context in. But the issue is also like not everyone wants these VS code. Some people like are real Neovim sticklers or they're using like PyCharm or other IDEs, JetBrains. And so for those people, they're actually like okay with switching tabs, at least for now, if it means them getting their answer. Because really like there's been an explosion of all these like startups doing code, doing search, etc. But really who everyone's competing with is ChatGPT, which only has like that one web interface. Like ChatGPT is really the bar. And so that's what we're up against. [00:19:50]Alessio: And so your idea, you know, we have Amman from Cursor on the podcast and they've gone through the we need to own the IDE thing. Yours is more like in order to get the right answer, people are happy to like go somewhere else basically. They're happy to get out of their IDE. [00:20:05]Michael: That was a great podcast, by the way. But yeah, so part of it is that people sometimes perhaps aren't even in an IDE. So like the whole task of software engineering goes way beyond just running code, right? There's also like a design stage. There's a planning stage. A lot of this happens like on whiteboards. It happens in notebooks. And so the web part also exists for that where you're not even coding it and you're just trying to get like a more conceptual understanding of what you're trying to build first. The podcast with Amman was great, but somewhere where I disagree with him is that you need to own the IDE. I think like he made some good points about not having platform risk in the long term. But some of the features that were mentioned like suggesting diffs, for example, those are all doable with an extension. We haven't yet seen with VS Code in particular any functionality that we'd like to do yet in the IDE that we can't either do through directly supported VS Code functionality or something that we kind of hack into there, which we've also done a fair bit of. And so I think it remains to be seen where that goes. But I think what we're looking to be is like we're not trying to just be in an IDE or be an IDE. Like Phind is a system that goes beyond the IDE and like is really meant to cover the entire lifecycle of a developer's thought process in going about like, hey, like I have this idea and I want to get from that idea to a working product. And so then that's what the long term vision of Phind is really about is starting with that. In the future, I think programming is just going to be really just the problem solving. Like you come up with an idea, you come up with like the basic design for the algorithm in your head, and you just tell the AI, hey, just like just do it, just make it work. And that's what we're building towards. [00:21:51]Swyx: I think we might want to give people an impression about like type of traffic that you have, because when you present it with a text box, you could type in anything. And I don't know if you have some mental categorization of like what are like the top three use cases that people tend to coalesce around. [00:22:08]Alessio: Yeah, that's a great question. [00:22:09]Michael: The two main types of searches that we see are how-to questions, like how to do X using Y tool. And this historically has been our bread and butter, because with our embeddings, like we're really, really good at just going over a bunch of developer documentation and figuring out exactly the part that's relevant and just telling you, OK, like you can use this method. But as LLMs have gotten better, and as we've really transitioned to using GPT-4 a lot in our product, people organically just started pasting in code that's not working and just said, fix it for me. [00:22:42]Swyx: Fix this. [00:22:43]Alessio: Yeah. [00:22:44]Michael: And what really shocks us is that a lot of the people who do that, they're coming from chat GPT. So they tried it in chat GPT with chat GPT-4. It didn't work. Maybe it required like some multi-step reasoning. Maybe it required some internet context or something found in either a Stack Overflow post or some documentation to solve it. And so then they paste it into find and then find works. So those are really those two different cases. Like, how can I build this conceptually or like remind me of this one detail that I need to build this thing? Or just like, here's this code. Fix it. And so that's what a big part of our VS Code extension is, is like enabling a much smoother here just like fix it for me type of workflow. That's really its main benefits. Like it's in your code base. It's in the IDE. It knows how to find the relevant context to answer that question. But at the end of the day, like I said previously, that's still a relatively, not to say it's a small part, but it's a limited part of the entire mental life cycle of a programmer. [00:23:47]Swyx: Yep. So you launched in Feb and then you launched V2 in August. You had a couple other pretty impactful posts slash feature launches. The web search one was massive. So you were mostly a GPT-4 wrapper. We were for a long time. [00:24:03]Michael: For a long time until recently. Yeah. [00:24:05]Alessio: Until recently. [00:24:06]Swyx: So like people coming over from ChatGPT were saying, we're going to say model with your version of web search. Would that be the primary value proposition? [00:24:13]Michael: Basically yeah. And so what we've seen is that any model plus web search is just significantly better than [00:24:18]Alessio: that model itself. Do you think that's what you got right in April? [00:24:21]Swyx: Like so you got 1500 points on Hacking News in April, which is like, if you live on Hacking News a lot, that is unheard of for someone so early on in your journey. [00:24:31]Alessio: Yeah. [00:24:32]Michael: We're super, super grateful for that. Definitely was not expecting it. So what we've done with Hacker News is we've just kept launching. [00:24:38]Alessio: Yeah. [00:24:39]Michael: Like what they don't tell you is that you can just keep launching. That's what we've been doing. So we launched the very first version of Find in its current incarnation after like the previous demo connected to our own index. Like once we got into YC, we scrapped our own index because it was too cumbersome at the time. So we moved over to using Bing as kind of just the raw source data. We launched as Hello Cognition. Over time, every time we like added some intelligence to the product, a better model, we just keep launching. And every additional time we launched, we got way more traffic. So we actually silently rebranded to Find in late December of last year. But like we didn't have that much traffic. Nobody really knew who we were. [00:25:18]Swyx: How'd you pick the name out of it? [00:25:19]Michael: Paul Graham actually picked it for us. [00:25:21]Swyx: All right. [00:25:22]Alessio: Tell the story. Yeah. So, oh boy. [00:25:25]Michael: So this is the biggest side. Should we go for like the full Paul Graham story or just the name? [00:25:29]Swyx: Do you want to do it now? Or do you want to do it later? I'll give you a choice. [00:25:32]Alessio: Hmm. [00:25:33]Michael: I think, okay, let's just start with the name for now and then we can do the full Paul Graham story later. But basically, Paul Graham, when we were lucky enough to meet him, he saw our name and our domain was at the time, sayhello.so and he's just like, guys, like, come on, like, what is this? You know? And we were like, yeah, but like when we bought it, you know, we just kind of broke college students. Like we didn't have that much money. And like, we really liked hello as a name because it was the first like conversational search engine. And that's kind of, that's the angle that we were approaching it from. And so we had sayhello.so and he's like, there's so many problems with that. Like, like, like the say hello, like, what does that even mean? And like .so, like, it's gotta be like a .com. And so we did some time just like with Paul Graham in the room. We just like looked at different domain names, like different things that like popped into our head. And one of the things that popped into like Paul Graham said was fine with the Phind spelling in particular. [00:26:33]Swyx: Yeah. Which is not typical naming advice, right? Yes. Because it's not when people hear it, they don't spell it that way. [00:26:38]Michael: Exactly. It's hard to spell. And also it's like very 90s. And so at first, like, we didn't like, I was like, like, ah, like, I don't know. But over time it kept growing on us. And eventually we're like, okay, we like the name. It's owned by this elderly Canadian gentleman who we got to know, and he was willing to sell it to us. [00:26:57]Michael: And so we bought it and we changed the name. Yeah. [00:27:01]Swyx: Anyways, where were you? [00:27:02]Alessio: I had to ask. [00:27:03]Swyx: I mean, you know, everyone who looks at you is wondering. [00:27:06]Michael: And a lot of people actually pronounce it Phind, which, you know, by now it's part of the game. But eventually we want to buy Phind.com and then just have that redirect to Phind. So Phind is like definitely the right spelling. But like, we'll just, yeah, we'll have all the cases addressed. [00:27:23]Swyx: Cool. So Bing web search, and then August you launched V2. Is V2 the Phind as a system pitch? Or have you moved, evolved since then? [00:27:31]Michael: Yeah, so I don't, like the V2 moniker, like, I don't really think of it that way in my mind. There's like, there's the version we launched during, last summer during YC, which was the Bing version directed towards programmers. And that's kind of like, that's why I call it like the first incarnation of what we currently are. Because it was already directed towards programmers. We had like a code snippet search built in as well, because at the time, you know, the models we were using weren't good enough to generate code snippets. Even GPT, like the text DaVinci 2 was available at the time, wasn't that good at generating code and it would generate like very, very short, very incomplete code snippets. And so we launched that last summer, got some traction, but really like we were only doing like, I don't know, maybe like 10,000 searches a day. [00:28:15]Alessio: Some people knew about it. [00:28:16]Michael: Some people used it, which is impressive because looking back, the product like was not that good. And every time we've like made an improvement to the way that we retrieve context through better embeddings, more intelligent, like HTML parsers, and importantly, like better underlying models. Every major version after that was when we introduced a better underlying answering model. Like in February, we had to swallow a bit of our pride when we were like, okay, our own models aren't good enough. We have to go to open AI. And actually that did lead to kind of like our first decent bump of traffic in February. And people kept using it, like our attention was way better too. But we were still kind of running into problems of like more advanced reasoning. Some people tried it, but people were leaving because even like GPT 3.5, both turbo and non-turbo, like still not that great at doing like code related reasoning beyond the how do you do X, like documentation search type of use case. And so it was really only when GPT 4 came around in April that we were like, okay, like this is like our first real opportunity to really make this thing like the way that it should have been all along. And having GPT 4 as the brain is what led to that Hacker News post. And so what we did was we just let anyone use GPT 4 on Fyne for free without a login, [00:29:43]Alessio: which I actually don't regret. [00:29:45]Michael: So it was very expensive, obviously. But like at that stage, all we needed to do was show like, we just needed to like show people here's what Fyne can do. That was the main thing. And so that worked. That worked. [00:29:58]Alessio: Like we got a lot of users. [00:29:59]Michael: Do you know Fireship? [00:30:01]Swyx: Yeah. YouTube, Jeff Delaney. [00:30:03]Michael: Yeah. He made a short about Fyne. [00:30:06]Alessio: Oh. [00:30:07]Michael: And that's on top of the Hacker News post. And that's what like really, really made it blow up. It got millions of views in days. And he's just funny. Like what I love about Fireship is like he like you guys, yeah, like humor goes a long a long way towards like really grabbing people's attention. And so that blew up. [00:30:25]Swyx: Something I would be anxious about as a founder during that period, so obviously we all remember that pretty closely. So there were a couple of people who had access to the GPT-4 API doing this, which is unrestricted access to GPT-4. And I have to imagine OpenAI wasn't that happy about that because it was like kind of de facto access to GPT-4 before they released it. [00:30:46]Alessio: No, no. [00:30:47]Michael: GPT-4 was in chat GPT from day one. I think. OpenAI actually came to our support because what happened was we had people building unofficial APIs around to try to get free access to it. And I think OpenAI actually has the right perspective on this where they're like, OK, people can do whatever they want with the API if they're paying for it, like they can do whatever they want, but it's like not OK if, you know, paying customers are being exploite by these other actors. They actually got in touch with us and they helped us like set up better Cloudflare bot monitoring controls to effectively like crack down on those unofficial APIs, which we're very happy about. But yeah, so we launched GPT-4. A lot of people come to the product and yeah, for a long time, we're just we're figuring out like what do we make of this, right? How do we a make it better, but also deal with like our costs, which have just like massively, massively ballooned. Over time, it's become more clear with the release of Llama 2 and Llama 3 on the horizon that we will once again see a return to vertical applications running their own models. As was true last year and before, I think that GPT-4, my hypothesis is that the jump from 4 to 4.5 or 4 to 5 will be smaller than the jump from 3 to 4. And the reason why is because there were a lot of different things. Like there was two plus, effectively two, two and a half years of research that went into going from 3 to 4. Like more data, bigger model, all of the instruction tuning techniques, RLHF, all of that is known. And like Meta, for example, and now there's all these other startups like Mistral too, like there's a bunch of very well-funded open source players that are now working on just like taking the recipe that's now known and scaling it up. So I think that even if a delta exists, the delta between in 2024, the delta between proprietary and open source won't be large enough that a startup like us with a lot of data that we've collected can take the data that we have, fine tune an open source model, and like be able to have it be better than whatever the proprietary model is at the time. That's my hypothesis.Michael: But we'll once again see a return to these verticalized models. And that's something that we're super excited about because, yeah, that brings us to kind of the fine model because the plan from kind of the start was to be able to return to that if that makes sense. And I think now we're definitely at a point where it does make sense because we have requests from users who like, they want longer context in the model, basically, like they want to be able to ask questions about their entire code base without, you know, context and retrieval and taking a chance of that. Like, I think it's generally been shown that if you have the space to just put the raw files inside of a big context window, that is still better than chunking and retrieval. So there's various things that we could do with longer context, faster speed, lower cost. Super excited about that. And that's the direction that we're going with the fine model. And our big hypothesis there is precisely that we can take a really good open source model and then just train it on absolutely all of the high quality data that we can find. And there's a lot of various, you know, interesting ideas for this. We have our own techniques that we're kind of playing with internally. One of the very interesting ideas that I've seen, I think it's called Octopack from BigCode. I don't think that it made that big waves when it came out, I think in August. But the idea is that they have this data set that maps GitHub commits to a change. So basically there's all this really high quality, like human made, human written diff data out there on every time someone makes a commit in some repo. And you can use that to train models. Take the file state before and like given a commit message, what should that code look like in the future? [00:34:52]Swyx: Got it. [00:34:53]Alessio: Do you think your HumanEval is any good?Michael: So we ran this experiment. We trained the Phind model. And if you go to the BigCode leaderboard, as of today, October 5th, all of our models are at the top of the BigCode leaderboard by far. It's not close, particularly in languages other than Python. We have a 10 point gap between us and the next best model on JavaScript. I think C sharp, multilingual. And what we kind of learned from that whole experience releasing those models is that human eval doesn't really matter. Not just that, but GPT-4 itself has been trained on human eval. And we know this because GPT-4 is able to predict the exact docstring in many of the problems. I've seen it predict like the specific example values in the docstring, which is extremely improbable. So I think there's a lot of dataset contamination and it only captures a very limited subset of what programmers are actually doing. What we do internally for evaluations are we have GPT-4 score answers. GPT-4 is a really good evaluator. I mean, obviously it's by really good, I mean, it's the best that we have. I'm sure that, you know, a couple of months from now, next year, we'll be like, oh, you know, like GPT-4.5, GPT-5, it's so much better. Like GPT-4 is terrible, but like right now it's the best that we have short of humans. And what we found is that when doing like temperature zero evals, it's actually mostly deterministic GPT-4 across runs in assigning scores to two different answers. So we found it to be a very useful tool in comparing our model to say, GPT-4, but yeah, on our like internal real world, here's what people will be asking this model dataset. And the other thing that we're running is just like releasing the model to our users and just seeing what they think. Because that's like the only thing that really matters is like releasing it for the application that it's intended for, and then seeing how people react. And for the most part, the incredible thing is, is that people don't notice a difference between our model and GPT-4 for the vast majority of searches. There's some reasoning problems that GPT-4 can still do better. We're working on addressing that. But in terms of like the types of questions that people are asking on find, there's not that much difference. And in fact, I've been running my own kind of side by side comparisons, shout out to GodMode, by the way. [00:37:16]Michael: And I've like myself, I've kind of confirmed this to be the case. And even sometimes it gives a better answer, perhaps like more concise or just like better implementation than GPT-4, which that's what surprises me. And by now we kind of have like this reasoning is all you need kind of hypothesis where we've seen emerging capabilities in the find model, whereby training it on high quality code, it can actually like reason better. It went from not being able to solve world problems, where riddles were like with like temporal placement of objects and moving and stuff like that, that GPT-4 can do pretty well. We went from not being able to do those at all to being able to do them just by training on more code, which is wild. So we're already like starting to see like these emerging capabilities. [00:37:59]Swyx: So I just wanted to make sure that we have the, I guess, like the model card in our heads. So you started from Code Llama? [00:38:07]Alessio: Yes. [00:38:08]Swyx: 65, 34? 34. [00:38:10]Michael: So unfortunately, there's no Code Llama 70b. If there was, that would be super cool. But there's not. [00:38:15]Swyx: 34. And then, which in itself was Llama 2, which is on 2 trillion tokens and the added 500 billion code tokens. Yes. [00:38:22]Michael: And you just added a bunch more. [00:38:23]Alessio: Yeah. [00:38:24]Michael: And they also did a couple of things. So they did, I think they did 500 billion, like general pre-training and then they did an extra 20 billion long context pre-training. So they actually increased the like max position tokens to 16k up from 8k. And then they changed the theta parameter for the ROPE embeddings as well to give it theoretically better long context support up to 100k tokens. But yeah, but otherwise it's like basically Llama 2. [00:38:50]Swyx: And so you just took that and just added data. [00:38:52]Michael: Exactly. [00:38:53]Swyx: You didn't do any other fundamental. [00:38:54]Michael: Yeah. So we didn't actually, we haven't yet done anything with the model architecture and we just trained it on like many, many more billions of tokens on our own infrastructure. And something else that we're taking a look at now is using reinforcement learning for correctness. One of the interesting pitfalls that we've noticed with the Phind model is that in cases where it gets stuff wrong, it sometimes is capable of getting the right answer. It's just, there's a big variance problem. It's wildly inconsistent. There are cases when it is able to get the right chain of thought and able to arrive [00:39:25]Alessio: at the right answer, but not always. [00:39:27]Michael: And so like one of our hypotheses is something that we're going to try is that like we can actually do reinforcement learning on, for a given problem, generate a bunch of completions and then like use the correct answer as like a loss basically to try to get it to be more correct. And I think there's a high chance I think of this working because it's very similar to the like RLHF method where you basically show pairs of completions for a given question except the criteria is like which one is like less harmful. But here we have a different criteria. But if the model is already capable of getting the right answer, which it is, we're just, we just need to cajole it into being more consistent. [00:40:06]Alessio: There were a couple of things that I noticed in the product that were not strange but unique. So first of all, the model can talk multiple times in a row, like most other applications is like human model, human model. And then you had outside of the thumbs up, thumbs down, you have things like have DLLM prioritize this message and its answers or then continue from this message to like go back. How does that change the flow of the user and like in terms of like prompting it, yeah, what are like some tricks or learnings you've had? [00:40:37]Michael: So yeah, that's specifically in our pair programmer mode, which is a more conversational mode that also like asks you clarifying questions back if it doesn't fully understand what you're doing and it kind of it holds your hand a bit more. And so from user feedback, we had requests to make more of an auto GPT where you can kind of give it this problem that might take multiple searches or multiple different steps like multiple reasoning steps to solve. And so that's the impetus behind building that product. Being able to do multiple steps and also be able to handle really long conversations. Like people are really trying to use the pair programmer to go from like sometimes really from like basic idea to like complete working code. And so we noticed was is that we were having like these very, very long threads, sometimes with like 60 messages, like 100 messages. And like those become really, really challenging to manage the appropriate context window of what should go inside of the context and how to preserve the context so that the model can continue or the product can continue giving good responses, even if you're like 60 messages deep in a conversation. So that's where the prioritized user messages like comes from. It's like people have asked us to just like let them pin messages that they want to be left in the conversation. And yeah, and then that seems to have like really gone a long way towards solving that problem, yeah. [00:41:54]Alessio: And then you have a run on Replit thing. Are you planning to build your own repl? Like learning some people trying to run the wrong code, unsafe code? [00:42:03]Michael: Yes. Yes. So I think like in the long term vision of like being a place where people can go from like idea to like fully working code, having a code sandbox, like a natively integrated code sandbox makes a lot of sense. And replit is great and people use that feature. But yeah, I think there's more we can do in terms of like having something a bit closer to code interpreter where it's able to run the code and then like recursively iterate on it. Exactly. [00:42:31]Swyx: So you're working on APIs to enable you to do that? Yep. So Amjad has specifically told me in person that he wants to enable that for people at the same time. He's also working on his own models, and Ghostwriter and you know, all the other stuff. So it's going to get interesting. Like he wants to power you, but also compete with you. Yeah. [00:42:47]Michael: And like, and we love replit. I think that a lot of the companies in our space, like we're all going to converge to solving a very similar problem, but from a different angle. So like replit approaches this problem from the IDE side. Like they started as like this IDE that you can run in the browser. And they started from that side, making coding just like more accessible. And we're approaching it from the side of like an LLM that's just like connected to everything that it needs to be connected to, which includes your code context. So that's why we're kind of making inroads into IDEs, but we're kind of, we're approaching this problem from different sides. And I think it'll be interesting to see where things end up. But I think that in the long, long term, we have an opportunity to also just have like this general technical reasoning engine product that's potentially also not just for, not just for programmers. It's also powered in this web interface, like where there's potential, I think other things that we will build that eventually might go beyond like our current scope. [00:43:49]Swyx: Exciting. We'll look forward to that. We're going to zoom out a little bit into sort of AI ecosystem stories, but first we got to get the Paul Graham, Ron Conway story. [00:43:59]Alessio: Yeah. [00:44:00]Michael: So flashback to last summer, we're in the YC batch. We're doing the summer batch, summer 22. So the summer batch runs from June to September, approximately. And so this was late July, early August, right around the time that many like YC startups start like going out, like during up, here's how we're going to pitch investors and everything. And at the same time, me and my co-founder, Justin, we were planning on moving to New York. So for a long time, actually, we were thinking about building this company in New York, mainly for personal reasons, actually, because like during the pandemic, pre-ChatGPT, pre last year, pre the AI boom, SF unfortunately really kind of, you know, like lost its luster. Yeah. Like no one was here. It was far from clear, like if there would be an AI boom, if like SF would be like... [00:44:49]Alessio: Back. [00:44:50]Michael: Yeah, exactly. Back. As everyone is saying these days, it was far from clear. And so, and all of our friends, we were graduating college because like we happened to just graduate college and immediately start YC, like we didn't even have, I think we had a week in between. [00:45:06]Swyx: You didn't bother looking for jobs. You were just like, this is what we want to do. [00:45:08]Michael: Well, actually both me and my co-founder, we had jobs that we secured in 2021 from previous internships, but we both, funny enough, when I spoke to my boss's boss at the company at where I reneged my offer, I told him we got into YC, they actually said, yeah, you should do YC. [00:45:27]Swyx: Wow. [00:45:28]Alessio: That's very selfless. [00:45:29]Swyx: That was really great that they did that. But in San Francisco, they would have offered to invest as well. [00:45:33]Michael: Yes, they would have. But yeah, but we were both planning to be in New York and all of our friends were there from college at this point, like we have this whole plan where like on August 1st, we're going to move to New York and we had like this Airbnb for the month of New York. We're going to stay there and we're going to work and like all of that. The day before we go to New York, I called Justin and I just, I tell him like, why are we doing this? Because in our batch, by the time August 1st rolled around, all of our mentors at YC were saying like, hey, like you should really consider staying in SF. [00:46:03]Swyx: It's the hybrid batch, right? [00:46:04]Michael: Yeah, it was the hybrid batch, but like there were already signs that like something was kind of like afoot in SF, even if like we didn't fully want to admit it yet. And so we were like, I don't know, I don't know. Something kind of clicked when the rubber met the road and it was time to go to New York. We're like, why are we doing this? And like, we didn't have any good reasons for staying in New York at that point beyond like our friends are there. So we still go to New York because like we have the Airbnb, like we don't have any other kind of place to go for the next few weeks. We're in New York and New York is just unfortunately too much fun. Like all of my other friends from college who are just, you know, basically starting their jobs, starting their lives as adults. They just stepped into these jobs, they're making all this money and they're like partying and like all these things are happening. And like, yeah, it's just a very distracting place to be. And so we were just like sitting in this like small, you know, like cramped apartment, terrible posture, trying to get as much work done as we can, too many distractions. And then we get this email from YC saying that Paul Graham is in town in SF and he is doing office hours with a certain number of startups in the current batch. And whoever signs up first gets it. And I happen to be super lucky. I was about to go for a run, but I just, I saw the email notification come across the street. I immediately clicked on the link and like immediately, like half the spots were gone, but somehow the very last spot was still available. And so I picked the very, very last time slot at 7 p.m. semi-strategically, you know, so we would have like time to go over. And also because I didn't really know how we're going to get to SF yet. And so we made a plan that we're going to fly from New York to SF and back to New York in one day and do like the full round trip. And we're going to meet with PG at the YC Mountain View office. And so we go there, we do that, we meet PG, we tell him about the startup. And one thing I love about PG is that he gets like, he gets so excited. Like when he gets excited about something, like you can see his eyes like really light up. And he'll just start asking you questions. In fact, it's a little challenging sometimes to like finish kind of like the rest of like the description of your pitch because like, he'll just like asking all these questions about how it works. And I'm like, you know, what's going on? [00:48:19]Swyx: What was the most challenging question that he asked you? [00:48:21]Michael: I think that like really how it worked. Because like as soon as like we told him like, hey, like we think that the future of search is answers, not links. Like we could really see like the gears turning in his head. I think we were like the first demo of that. [00:48:35]Swyx: And you're like 10 minutes with him, right? [00:48:37]Michael: We had like 45, yeah, we had a decent chunk of time. And so we tell him how it works. Like he's very excited about it. And I just like, I just blurted out, I just like asked him to invest and he hasn't even seen the product yet. We just asked him to invest and he says, yeah. And like, we're super excited about that. [00:48:55]Swyx: You haven't started your batch. [00:48:56]Michael: No, no, no. This is about halfway through the batch or two, two, no, two thirds of the batch. [00:49:02]Swyx: And you're like not technically fundraising yet. We're about to start fundraising. Yeah. [00:49:06]Michael: So we have like this demo and like we showed him and like there was still a lot of issues with the product, but I think like it must have like still kind of like blown his mind in some way. So like we're having fun. He's having fun. We have this dinner planned with this other friend that we had in SF because we were only there for that one day. So we thought, okay, you know, after an hour we'll be done, you know, we'll grab dinner with our friend and we'll fly back to New York. But PG was like, like, I'm having so much fun. Do you want to have dinner? Yeah. Come to my house. Or he's like, I gotta go have dinner with my wife, Jessica, who's also awesome, by the way. [00:49:40]Swyx: She's like the heart of YC. Yeah. [00:49:42]Michael: Jessica does not get enough credit as an aside for her role. [00:49:46]Swyx: He tries. [00:49:47]Michael: He understands like the technical side and she understands people and together they're just like a phenomenal team. But he's like, yeah, I got to go see Jessica, but you guys are welcome to come with. Do you want to come with? And we're like, we have this friend who's like right now outside of like literally outside the door who like we also promised to get dinner with. It's like, we'd love to, but like, I don't know if we can. He's like, oh, he's welcome to come too. So all of us just like hop in his car and we go to his house and we just like have this like we have dinner and we have this just chat about the future of search. Like I remember him telling Jessica distinctly, like our kids as kids are not going to know what like a search result is. Like they're just going to like have answers. That was really like a mind blowing, like inflection point moment for sure. [00:50:34]Swyx: Wow, that email changed your life. [00:50:35]Michael: Absolutely. [00:50:36]Swyx: And you also just spoiled the booking system for PG because now everyone's just going to go after the last slot. Oh man. [00:50:42]Michael: Yeah. But like, I don't know if he even does that anymore. [00:50:46]Swyx: He does. He does. Yeah. I've met other founders that he did it this year. [00:50:49]Michael: This year. Gotcha. But when we told him about how we did it, he was like, I am like frankly shocked that YC just did like a random like scheduling system. [00:50:55]Alessio: They didn't like do anything else. But, um. [00:50:58]Swyx: Okay. And then he introduces Duron Conway. Yes. Who is one of the most legendary angels in Silicon Valley. [00:51:04]Michael: Yes.So after PG invested, the rest of our round came together pretty quickly. [00:51:10]Swyx: I'm, by the way, I'm surprised. Like it's, it might feel like playing favorites right within the current batch to be like, yo, PG invested in this one. Right. [00:51:17]Alessio: Too bad for the others. [00:51:18]Swyx: Too bad for the others, I guess. [00:51:19]Michael: I think this is a bigger point about YC and like these accelerators in general is like YC gets like a lot of criticism from founders who feel like they didn't get value out of it. But like, in my view, YC is what you make of it. And YC tells you this. They're like, you really got to grab this opportunity, like buy the balls and make the most of it. And if you do, then it could be the best thing in the world. And if you don't, and if you're just kind of like a passive, even like an average founder in YC, you're still going to fail. And they tell you that. They're like, if you're average in your batch, you're going to fail. Like you have to just be exceptional in every way. With that in mind, perhaps that's even part of the reason why we asked PG to invest. And so yeah, after PG invested, the rest of our round came together pretty quickly, which I'm very fortunate for. And yeah, he introduced us to Ron. And after he did, I get a call from Ron. And then Ron says like, hey, like PG tells me what you're working on. I'd love to come meet you guys. And I'm like, wait, no way. And then we're just holed up in this like little house in San Mateo, which is a little small, but you know, it had a nice patio. In fact, we had like a monitor set up outside on the deck out there. And so Ron Conway comes over, we go over to the patio where like our workstation is. And Ron Conway, he's known for having like this notebook that he goes around with where he like sits down with the notebook and like takes very, very detailed notes. So he never like forgets anything. So he sits down with his notebook and he asks us like, hey guys, like, what do you need? And we're like, oh, we need GPUs. Back then, the GPU shortage wasn't even nearly as bad as it is now. But like even then, it was still challenging to get like the quota that we needed. And he's like, okay, no problem. And then like he leaves a couple hours later, we get an email and we're CC'd on an email that Ron wrote to Jensen, the CEO of Nvidia, saying like, hey, these guys need GPUs. [00:53:02]Swyx: You didn't say how much? It was just like, just give them GPUs. [00:53:04]Alessio: Basically, yeah. [00:53:05]Michael: Ron is known for writing these like one-liner emails that are like very short, but very to the point. And I think that's why like everyone responds to Ron. Everyone loves Ron. And so Jensen responds. He responds quickly, like tagging this VP of AI at Nvidia. And we start working with Nvidia, which is great. And something that I love about Nvidia, by the way, is that after that intro, we got matched with like a dedicated team. And at Nvidia, they know that they're going to win regardless. So they don't care where you get the GPUs from. They're like, they're truly neutral, unlike various sales reps that you might encounter at various like clouds and, you know, hardware companies, et cetera. They actually just want to help you because they know they don't care. Like regardless, they know that if you're getting Nvidia GPUs, they're still winning. So I guess that's a tip is that like if you're looking for GPUs like Nvidia, they'll help you do it. [00:53:54]Swyx: So just to tie up this thing, because so first of all, that's a fantastic story. And I just wanted to let you tell that because it's special. That is a strategic shift, right? That you already decided to make by the time you met Ron, which is we are going to have our own hardware. We're going to rack him in a data center somewhere. [00:54:11]Michael: Well, not even that we need our own hardware because actually we don't. Right. But we just we just need GPUs, period. And like every cloud loves like they have their own sales tactics and like they want to make you commit to long terms and like very non-flexible terms. And like there's a web of different things that you kind of have to navigate. Nvidia will kind of be to the point like, OK, you can do this on this cloud, this on this cloud. Like this is your budget. Maybe you want to consider buying as well. Like they'll help you walk through what the options are. And the reason why they're helpful is because like they look at the full picture. So they'll help you with the hardware. And in terms of software, they actually implemented a custom feature for us in Faster Transformer, which is one of their libraries.Swyx: For you? [00:54:53]Michael: For us. Yeah. Which is wild. I don't think they would have done it otherwise. They implemented streaming generation for T5 based models, which we were running at the time up until we switched to GPT in February, March of this year. So they implemented that just for us, actually, in Faster Transformer. And so like they'll help you like look at the complete picture and then just help you get done what you need to get done. I know one of your interests is also local models, open source models and hardware kind of goes hand in hand.Alessio: Any fun projects, explorations in the space that you want to share with local llamas and stuff? [00:55:27]Michael: Yeah, it's something that we're very interested in because something that kind of we're hearing a lot about is like people want something like find, especially comp

In today's CIHAS episode, I'm speaking to online personal trainer and performance nutritionist, Michael Ulloa. Michael is on a mission to make the fitness industry a more welcoming and accepting space for all, which is exactly what we dive into in this ‘sode. We are unpacking some toxic myths about exercise, Michael spills the beans on his feelings about Joe Wicks, and we discuss what really goes into professional fitness models' photo shoots. Plus we answer loads of your questions like how to find a more joyful relationship with movement after a lifetime of using it as punishment for eating. Find out more about Michael's work here.Follow his work on Instagram here.Follow Laura on Instagram here.Subscribe to Laura's newsletter here.Enrol in the Raising Embodied Eaters course here.Here's the transcript in full:INTRO:Michael: The way that we're being sold health and fitness just isn't sustainable or achievable in any way and then people blame themselves and feel worse and then therefore they're more likely to spend money on all these other programs repeatedly and it's just a vicious cycle that just doesn't ever end.Laura: Hey, and welcome to the Can I Have Another Snack? Podcast, where we talk about appetite, bodies, and identity, especially through the lens of parenting. I'm Laura Thomas. I'm an anti diet registered nutritionist, and I also write the Can I Have Another Snack? Newsletter. Today, I'm talking to Michael Ulloa.Michael is an online personal trainer and performance nutritionist who is on a mission to make the fitness industry a more welcoming and accepting space for all. In today's episode, Michael and I are shooting the shit about the fitness industry, unpacking some toxic myths about exercise, and answering loads of your questions: like how to find a more joyful relationship with movement after a lifetime of using it as punishment for eating.Some of you have been asking for more episodes on movement and fitness, so I think you're going to enjoy this conversation. We'll get to Michael in just a second, but first, I want to tell you real quick about the benefits of becoming a paid subscriber to the Can I Have Another Snack? Newsletter and community.For just £5 a month, or £50 a year, you get access to the extended CIHAS universe. That means exclusive weekly discussion threads, links and recommendations, you get commenting privileges and access to my monthly Dear Laura column, as well as the whole CIHAS archive and a few other sweet perks, but more than anything, you're supporting independent evidence based nutrition information free from diet culture and anti fatness. I can't do this work without the help of paying subscribers. So if you get something out of being here, then please consider upgrading your subscription today. And if you're still not convinced, then check out this recent review I received from a reader. They said: "Laura's podcast and newsletter are always thought provoking, filled with care and compassion, and a respite from one size fits all health and nutrition advice."So if that sounds good to you, then head to laurathomas.substack.com and become a paying subscriber today. Alright team, let's get to today's episode, here's Michael. MAIN EPISODE:All right, Michael, I need to know what the deal is. Because you're like one of maybe five PTs who isn't pushing aesthetic or weight loss goals on us.Has that always been your deal? Or is this more of an evolution for you? Michael: Yeah, it's definitely an evolution and it's funny you mentioned that because I get a lot of angry messages from personal trainers that don't think that my approach is right, which is always quite funny to me. I don't know, it's, I definitely, when I first started off in the fitness industry... I've been a personal trainer now for nearly 10 years.And in terms of personal training, that kind of makes you a bit of a veteran because a lot of trainers are quite short lived on average. When I first started off, I definitely did have your typical, like, mainstream slightly bro approach to fitness and nutrition. And I know most people that maybe work in the kind of space that, like, you operate in, for example, there tends to usually be a reason or a thing that caused them to go down that path.But I didn't have that at all. It really has just been a really slow evolution of just actually reading the research, working with people on a day to day basis, getting feedback from clients about what is working and what isn't, and then just really tweaking things over a very long period of time. I've also had some very honest clients, which have been great too, who kind of really follow my content on social media and they would message me like, oh, that's not very helpful. How about approaching it like this? And i'm always open to feedback, I always want to improve my practice and my messaging and I was always just quite receptive to that and I don't know... 10 years later I now finally feel like i'm working with people in a way that genuinely helps them long term and i'm actually creating content that is useful for people rather than just almost creating content for other personal trainers, which seems to be what a lot of fitness professionals do.Laura: Tell me about the angry messages. Why are other PTs up in your shit about...? Michael: I really don't know. I wish I knew the answer. I think... I guess if you're attacking someone's entire being and their work and their ethos that they've believed in for so many years, then I guess that a lot of people will react to that in quite a negative way.I really don't understand it at all either. Usually male coaches too, are very angry in the way that I approach social media and some of the names and things I've been called are pretty grim, but I only... I wish I knew the answer to that, but some, for some reason people get very angry in the way that I am approaching fitness and nutrition.But yeah, I really don't mind. Like I, as I said, I feel like I'm really helping people now and I'm happy to keep championing that message. Laura: I mean, I'm just wondering if part of it is because that myth, certain myth of no pain, no gain. And that you need to like, basically punish yourself with exercise in order to achieve a particular body type.You're saying, actually, we don't need to do that. It's okay if you don't kill yourself with exercise. We shouldn't be weaponising it against ourselves. For me, it speaks to how deeply internalised people's anti fat bias is. You're challenging the fundamental sort of premise that their beliefs are resting on, which is that, you can't be fit and fat.Or you...yeah, like I said before, that you have to punish yourself with exercise or like that... it's somehow okay to exist in a body that isn't fulfilling this ideal that we have been told that we should not strive for. Michael: Completely. And I mean, if we're completely honest about it, the way that the fitness industry is set up now is way more profitable for these people too.So if you do start attacking the way that they're approaching their lives or their businesses too, then they're probably going to be a little bit grumpy about that. It's so much easier for me as a personal trainer to make money saying, here we go, come sign up for the six week program and we'll strip body fat off you in such a short space of time, rather than me saying, cool, let's work together for three, six, 12 months. And let's really work on those habits and have you feeling and performing better. Like it's just such a hard sell. I mean, especially for, as I mentioned, like, personal training tends to be quite a short lived career for a lot of people. And I appreciate that when people first start off, the best way to get clients is shock and awe, like showing before and after photos, like having the secrets or whatever it is. And the best way to get clients at the start is by doing that. So people are going to follow that path rather than doing it the right way. That is a bit of a slow burner. I know that a lot of coaches aren't really up for that, sadly. Laura: Yeah, no, I think you make a really good point when you're talking about... the financial aspect of things, because, yeah, there's no money to be made in being like, yeah, take a rest day or go for a gentle walk and look at the sky. Yeah, those like making huge promises of around body transformations and then making people sign up for some sort of like intensive bootcamp situation. Of course, that makes sense from like a business model perspective, but as so often is the case, anything that involves capitalism is probably not great for our health overall. Okay, so I am absolutely not in the fitness space at all. I've purged my social media account. I think I follow you and maybe a couple of other personal trainers, because I find it really annoying, honestly, watching fitness content.Michael: I strongly relate to that. And first of all, thank you for following me, but yeah, I honestly, I feel exactly the same way.  Laura: And I think, especially since having had a baby and because I have some enduring physical stuff going on as a result of my pregnancy in terms of, like, pelvic health, even the stuff that is like geared towards women who have had babies and like postpartum stuff.It's just anyway, so I've just checked out of it. So I have no idea. What is going on in that space, really? So I need you to like, translate it all for me. What are some of the most pervasive and toxic fitness myths that you're seeing at the moment? Michael: Everything. Honestly, every topic is so toxic at the moment.It's really frustrating. And I speak to... There's a few coaches that I'm really good friends with, who I think you probably know as well, that I tend to follow their content, I like engaging with them and talking about the fitness industry, but I have also removed myself from a lot of the mainstream approach because...I don't find it motivating or helpful in any way. Like I think a lot of the... Laura: You don't even hate follow some people just to have like stuff to...? Because I hate feed a lot of big feeding. I hate-feed?! I hate-follow a lot of big accounts. I just have this folder on my Instagram called Ammunition.And I just save posts in there that I want to come back and get angry about at some point. What are you seeing from... I know you do it! But what are you seeing from those folks? Michael: So I do a little bit of that. And I, so I've also, I've got an Instagram account for my dog, but I started up ages ago. I don't post anything to it, but every time I see something pop up on, like, the explore page or I see another trainer share, I'll send it to her account. And then I'll use that as fodder for, like, creating content and coming up with ideas. But I do not, I don't hate follow that many people now because like I spent a lot of time on social media, right?And I know that because of that following these accounts and seeing them on a day to day basis all of the time does massively negatively impact my mental health. And I think if i'm feeling that way as a fitness professional who knows the research, knows what these accounts are doing to us and can see through the nonsense... how are everyday people feeling? When they're seeing this content and they don't really know if it's the truth or not. So I actually don't follow that many trainers. There's probably a lot of trainers who... . Laura: So very evolved of you. Michael: Yeah. Thank you. Thank you. There's a few trainers who, like, I know through just from working in gyms or whatever, I'll follow them, but I mute them so that I don't have to see their content.Laura: Yeah, that's smart. Michael: But yeah, I don't know. There's so many myths about every topic. Like you mentioned there about, like, women's health and pelvic health and anything pre and postnatal. The stuff around that is really gross because it's not even just the fact that they're spreading misinformation. They somehow always tie in with just losing weight, like this is pretty much what it all comes down to, right? Laura: Yeah. Yeah. That's the subtext. It's always there. Michael: It's always like improve your pelvic health and slim your waist, like it's everything. It just pushes people down the route of still obsessing about body weight and focusing on body weight rather than focusing on general health and wellbeing and health promotion, and it's infuriating.I guess the same as, like, building muscle. Like it's nearly always advertised by these guys that are absolutely jacked, clearly taking steroids, using images of themselves going... you can look like this if you work out like me and buy my programs and my nutrition plans, and you're just never going to look like these people. So you're always going to fail. Like everything within the fitness space is geared towards repeat sales and having people come back for more because the way that we're being sold health and fitness, just isn't sustainable or achievable in any way. And then people blame themselves and feel worse. And then therefore they're more likely to spend money on all these other programs repeatedly. And it's just a vicious cycle that just doesn't ever end. And that's why with my page, I'm trying to step away from any aesthetic goals. Like you'll probably see through my social media, I don't, I'm not against people having aesthetic goals. I just don't really ever talk about it because I don't think it should ever be the focus of someone's fitness journey. I mean, I think that's the bit that seems to piss people off. Laura: Yeah. And I mean, there's some interesting research that shows that people who exercise for aesthetic goals, they're less likely to engage in something that is sustainable for them.Like, it's more likely that they will give up. And I don't mean that in, like, defeatist kind of way, but it just won't be sustainable for them. Versus for people who are approaching, I don't know, a type of exercise or training or whatever it is from a place of maybe wanting to feel stronger or feel more comfortable in their bodies or because they have mobility stuff that they're working through or something like that.So it's really difficult though, because And we'll get to some of the listener questions in a bit where they're asking this, like, how do you uncouple the aesthetic goals from, those more internally motivated goals from the perspective that we are just constantly being drip fed, idealised images of people all over the internet? And then, like you say, half the time those images aren't even real, right? There's people on ‘roids. There are people who are like starving themselves, like making themselves dehydrated, like posing in particular ways. I don't even know what other tactics people use to stylise these images.But I feel like the sort of falsification of these pictures is huge in the fitness industry. Michael: It's honestly horrific. And I would probably go as far as to say, like, every professional fitness model has taken or is taking steroids of some form. That's like the level of manipulation that the fitness industry...I don't know, I don't think there's any issue with... having aesthetic goals. Like I always like to hammer this point home because I think sometimes with my content, I can... people misconstrue that I'm against anyone having any aesthetic goal at all. I'm not, it's just, I think that the emphasis needs to be elsewhere.For example, when I first started in the fitness industry, I was in that loop of must build muscle, have to build muscle to show that I know what I'm talking about and also to be seen as manly and capable or whatever, and I would do a lot of strength training. I would never do cardio because cardio is bad.It ruins your gains. Laura: It's for girls.Michael: Yeah, it's just exactly that. And it's so frustrating that I would... I spent years just, like, strength training, nothing but strength training, even when I was going through cycles of really hating it. Like I had to do strength training, got to build muscle. When I switched up my training... I still do strength training now. I enjoy building muscle. The challenge of building strength and muscle is really fun, but I also do a lot of cardio because I really enjoy it and it makes me feel great in terms of physical and mental health. And actually since switching up, dropping a bit of strength training that I was doing and doing more cardio, the exercise I really enjoy, I've made so much more progress with my strength building and muscle building gains.And I've just got such a better balance with it all. So if someone listening to this is really struggling of knowing like what they should really be doing, what should they be focusing on? Honestly, just like enjoyment and mental health, that needs to be the priority. And then everything else just tends to fall into line after that.And the fitness industry, just the tactics, as I said, like the trainers use. The one thing that really annoys me is a lot of personal trainers will, anyone who follows any trainers will... I've seen this in the past where a trainer goes through a really extreme cycle of dieting, exercise regime because they're training for a photo shoot - in quotation marks - Where they'll go and get professional photos done that they've dieted down to within an inch of their lives. And they'll get a little snapshot image of look how amazing I look and then they'll use that in all their advertising of promoting healthy behaviour change or whatever other nonsense. It's if you're not using healthy, sustainable habits in achieving your physique, then you should not be allowed to use that in terms of advertising it to say that you're going to help people improve their health and their life, their health and their lives.It's just, it's incredibly infuriating and... Laura: it's false advertising. Michael: Massively. Yeah. Massively. Laura: Need to get that fucking, is it ASA, advertising...? Michael: Yeah. Yeah. Standards Agency. Absolutely. Yeah. Laura: I'm on the case! But two interesting things that I wanted to pick out from what you were saying.First of all, I think there's some complexity and nuance around this idea aesthetic goals, isn't there? Because we are all aesthetically driven, right? We are all, like we're aesthetic creatures in some ways, like when you brush your hair in the morning or I don't know, you trim your beard, Michael, or like I chose clothes that I thought looked somewhat okay together. Like those are all aesthetic goals, right? And so I think it's really, like, hard for people to decouple aesthetic goals from their overall movement, exercise routines, whatever you want to call them. But I think what you're saying, and certainly what I would advocate is that the fitness industry has just blown... yeah, they've blown up aesthetics to be like the sole purpose that people should exercise, right? And that I think is the problem is that yeah, they've just coupled exercise and aesthetics to the point that it's like you were saying, people are engaging in disorderly eating behaviours. They're using illicit drugs, they are, like, punishing themselves to look a particular way, and that's when it becomes problematic, right? Michael: Completely agree. Laura: And you end up on that slippery, slippery slope to disordered eating and eating disorders. Michael: Yeah, it's so true the barometer of success or health or knowledge within the fitness industry is body fat levels. That's pretty much what it all comes down to. Like a trainer who is absolutely jacked and really ripped is seen as being an authority figure without really knowing anything about them. And whereas you'll have a trainer who's in maybe a naturally larger sized body who naturally carries a little bit more body fat, has a much healthier balance of exercise and nutrition, a far better trainer. Just look at the comments under the content that they push out there onto social media and people will criticize them and say they don't know what they're talking about. Like our barometer of success is leanness. I don't know what the answer is to trying to combat that other than just keep churning out content, calling out this nonsense.But unfortunately you feel like you take a few steps forward when it was like two, three years ago, when you see, started to see a lot more body diversity on fitness accounts and kind of big companies like Gymshark and Nike and stuff were using people in larger bodies to advertise clothing.That's now disappearing again because it's no longer.... and it's just toxic. And you just have to go on like TikTok, the latest platform, even though it's been around a few years, I felt like we were maybe making a bit of progress. Then TikTok just flips that again, and you just got to search the hashtag fitness on TikTok.And it's just white, slim, muscular people clearly taking steroids that are the main bulk of the content that you're going to see. It's infuriating. Laura: Everyone in the fitness industry really collectively needs to be speaking out against this, but I think there's a simultaneous thing that has to happen whereby we are amplifying and centering experiences and the work of fat fitness creators, right? And I'm using fat, for anyone who's not listened to the podcast before, fat as a neutral descriptor, as a reclamation of a word that is often used to weaponise and hurt people and harm people. So, yeah, I'm just thinking of some people off the top of my head.Like Intuitive Fatty, Jessamyn Stanley is fantastic for yoga content. Lauren Leavell does a lot of barre stuff, but there's loads. I mean, is there anyone that you would want to give a shout out to like anyone that's doing...? Michael: The Instagram handle Decolonizing Fitness? Ilya. The content is amazing. We're trying to set up a time for Ilya to come into our podcast to chat about this at the moment. And I just... there's so many voices that need to be amplified. And I know that I always have to check my privilege in the content that I'm creating. Like you see very few men within the kind of body neutrality, body positivity, space, whatever you want to call the area I'm working in.So I always like to acknowledge that, okay, I'm creating content for a space that isn't really for me, but I do think that can be really powerful. And we still need more voices of guys, especially within this space, calling it out because I rarely ever see male fitness professionals creating the kind of content that I am.They tend to go down the more mainstream approach. And I like to yes, fitness can look like me. I look how the fitness industry says you're supposed to look, but it doesn't have to look like that, right? This is one way it can look, but it doesn't need to be like that for everyone. And I think that can be really powerful whilst amplifying the voices of those who are marginalised and don't get the airtime that I do.Laura: Yeah, absolutely. And I think, yeah, you make a really good point about men in this space. Like just in body neutrality, body positivity and again, there are some really great people doing stuff in that space. I agree like it's still underrepresented, but like the 300 pound runner. I don't know if you've come across his stuff? Michael: yeah, Martinus Evans.Laura: Yeah, His stuff is really cool as well. But yeah, anyway, just wanted to shout out some accounts and I'll link to them in the show notes as well. Yeah, so you mentioned that fitness professionals will embark on this really extreme diet, they will really bulk up, they'll, probably restrict what they're eating for a really long time, and then they'll do all their photos, and they'll probably go back to whatever they were doing before that. And it just reminded me when... and this is it's like really sad, but do you remember when Joe Wicks was talking all about binging? He went to America, and then it ... he just started talking about like he was eating all this chocolate and pizza and like stuff that he obviously was restricting so hard that when he went to the States, he had this like backlash against all of that and his body was just like, fuck this, and he just started eating like all of the food that he'd been denying himself.It just made me think of that and how he's... how disordered like this space is and how normalised that kind of thing is like that just like binge restrict cycle. Michael: Yeah, I mean when your entire business model relies on getting people really lean. If you're not sticking to those rules and keeping your body lean 100 percent of the time, then your business model kind of goes to shit. And I guess that's probably why he was having issues coming to terms with that. Joe Wicks is a really funny one because I don't like his content at all. I'll throw that out there. Some of the nutrition stuff he's spouted has been... I was going to say nonsense, but it's actually just damaging some of the stuff he comes out with.Also, on the other hand, I feel like, maybe this is giving him too much credit, I always feel like his heart is in the right place, but he just goes about it in completely the wrong way. I don't know if you would agree with that. When I hear him being interviewed, I feel like he's a really passionate guy who feels like he's doing the right thing, but he's just absolutely not.Because all of his content is focused on being lean and weight loss. And I just wish that... he's got such a huge platform now. It's terrifying. That if you had someone like him who could start promoting like a balanced and sensible message, it's never going to happen because he makes too much money now, then it would just be so powerful.Laura: But I don't know, like this piece around heart in the right place. I think we say that about a lot of these actually quite problematic white men. Joe Wicks, Jamie Oliver, I'm just gonna say it, don't @ me. But, of course their heart's in the right place, but their heart's also in their fucking bank balance, right?Michael: Completely, 100%. Laura: So that's one part of it, but also, I don't know when we can, when someone is, like you say, promoting harmful messages around food and around nutrition. And I don't. I think it matters where their heart is. Michael: Agreed. I wonder whether this... Laura: A murderer could use that justification to be like, Oh, well, this man is really toxic to women, so I'm just going to kill him.But that's not the solution. Michael: I know. I wonder whether kind of in my head, the reason I use those words is because I think of kind of the fitness industry as like a huge, like a line of like how problematic someone is. And I feel like he feels he's trying to do the right thing despite doing it very badly.Whereas you have a lot of people within the fitness space that go far beyond that, who are intentionally doing the really bad thing, trying to make a lot of money, it's still very bad. And Jamie Oliver is one of those as well, where he's got such a huge platform, thinks he knows what he's doing is the best thing, but it's just not. Like trying to ban the buy one get one free offers when people are really struggling to feed their families right now.It's just, I feel yes, hearts in the right place, but just no, like they need to be more informed and go about it in a better way. Laura: And especially when they are being given this feedback, right? Like it's one thing if you fuck up and you say, I was really wrong about that and I've learned some new information now like you have, right? And like I have. And you hold your hands up and you say, yeah, I was really fucking wrong and I'm sorry that I've caused harm and I don't want to do that anymore. I'm gonna learn and I'm gonna do better. And Michael: that's the sign of a good practitioner, right? And yeah. Laura: But speaking of Joe Wicks... Michael: Oh god!Laura: So, so you are a new ish parent, right? You have a seven month old. Michael: Yes, my son is seven months old, yeah. Laura: How do you feel about the prospect of Joe Wicks teaching your kid PE someday? Michael: Oh, just no, like awful. Yeah it's terrifying, isn't it? And these people do wangle their way into every aspect of our society of fitness.And there's just no getting away from them now. Personally, I never watched any of his school fitness things throughout lockdown. I know they're very popular. What was his wording? Did you watch any of them then with your kids? Laura: I didn't cause my little one was just a newborn at that point. And he's only three now.It just wasn't on my radar. I've seen his books. He has the burpee bears. And I've written a couple of like book reviews. They're super like, just tongue in cheek. But it strikes me as really problematic that he feels that we need to teach specific moves like burpees or other things like that to children, like to young children, like primary school age kids, and I don't really have a good justification for that because I'm not a fitness professional that other than does a five year old need to learn how to plank? Right? Or should we not be focusing on embodied movement that is climbing on play equipment in the playground or running or skipping or jumping or like, all of these things that kids, depending on their level of mobility and ability that they would intuitively do?Michael: I am completely with you there. I don't think we need to be teaching a five year old how to do a burpee. It's a bit ridiculous, to be honest. Yeah, that's the way that movement should be promoted and advertised to kids, if you want to use those kind of technical terms. It should just be about play and fun and movement, and that's... what it should be. Like if a kid sees their parent doing burpees or lifting weights and they want to try a bit out and get involved yeah, absolutely. But it just, it shouldn't be the go to, right? Yeah, absolutely. Laura: Yeah. My kid has seen me do a downward dog and he like gets involved and we do the cosmic kids yoga. I feel like that's a slightly different thing because it's a, it's so gentle and b it's animal poses. I don't know. All right. So I got sent through loads of questions from listeners and I thought they were really fun. So I just thought we could go through them. I think we've touched on a bit of it already, but maybe you can just give me your quick fire answers.Michael: Sure. Yeah. Laura: So this is an interesting question that Gwen from Dieticians for Teachers sent in. She said she would like to know more about the messages in your formal training. I think we can take a good guess, but I guess what she's getting at is, like, what toxic messages were in your formal training?Michael: Unfortunately, when you're learning to become a personal trainer still so much of it is about weight loss, still. You'll get taught, right, this is what we're going to learn about nutrition and this is how you help someone lose weight. So that is still at the core. And I guess a lot of the training for personal trainers, in terms of nutrition anyway, It's still very like basic government guidelines, which you can take those as you will. Some recommendations are maybe okay, others not that helpful. The training for nutrition for personal trainers is so, so, so, so basic that I would encourage any personal trainer who has recently qualified and not done any further nutrition study from there to please sign up to another course and learn more because what you learn as a personal trainer at the basic level is just nowhere near good enough to work with clients in depth.Laura: I have a lot of thoughts about personal trainers and nutrition, but I'm going to keep them to myself! Michael: No, no feel free to talk about it! It terrifies me. And it's very rare now that... a lot of the people I work with have had personal trainers in the past. The large majority of them have had negative experiences, and it's quite scary that's now just the norm.And I'll ask questions of my clients in consultations whilst working together and they'll be like, Oh, I've never been asked that before. I've never even considered that. And it just blows my mind that these things are being missed out or neglected by coaches. But the training is just not there. Laura: It's so interesting that the focus, I mean, it's not surprising, but that the focus is still on body size and not like flexibility or mobility or like rehab or like any of these, which I'm sure they like get touched on, but it sounds like from what you're saying that the real central focus is not mental health or like overall wellbeing. It's here's how you try and get people shredded, which we know is like biogenetically, if not difficult, if not impossible for most people. Michael: Pretty much. Yeah. Like I'm sure... I don't want to call out every personal training course. Like I did qualify a few years ago now, but I know there's some personal training qualifications that are trying to shift that, but it is still a large majority.And that is why a lot of the coaches coming through now, it's still very much before and after photos, weight centric. Yeah, unfortunately. Laura: Well, it's good to know that maybe there are some shifts coming down the pipe a little bit and I guess it just goes to show why again, you need to keep, like, pushing these alternative messages.Okay. This I thought was a really interesting question. And so this person asked, is exercise truly necessary? I don't enjoy exercising, but I do move a lot during the day, running errands and running after a toddler, all while baby wearing a newborn. And then the follow up question is, and if it is necessary to exercise intentionally, what form of exercise is best for someone who wouldn't otherwise prioritise it? Michael: That's such a good question. And it's very nuanced as well, depending on the person's situation. I would say, I mean, no, it's not necessary if you're moving around a lot throughout the day. However, so many health benefits come from incorporating some form of like direct exercise that it would be really sad to not explore all the potential areas that people could incorporate exercise into their life that maybe might not be the mainstream approach, right? If you are someone who moves around a lot throughout your day, if you say running errands and your general movement and step count is actually really high, then you could argue that as long as you get your nutrition, right, you're doing pretty well.However, strength training. Every time someone comes to me, no matter what their fitness goals are, I try and incorporate some form of strength training that I can, but that can take so many different forms. Laura: This person is carrying a baby around! Michael: Right. Yeah, exactly. Which is strength training, right?Exactly. So it's... when I say strength training, a lot of people listening to this episode right now will automatically... they'll think, like, gym, barbells, dumbbells, heavy weights, and it can come in so many different forms and it can be with resistance bands, body weight, dumbbells, kettlebells, barbells at home. It can be like TRX, it can be like so many different ways that you might enjoy at some point. So don't just think, Oh, I'm not an exercise-y person. I've always hated it because there are so many different ways that we can incorporate exercise. That is a very vague answer. without me knowing much more about this person. However, if you can find a form of exercise you enjoy, that should be a priority because the health benefits are huge. Laura: I'm going to push back because this is my opinion, not necessarily based on scientific fact, but it does feel as though there is this tendency, and I'm also conscious of your bias as a fitness professional, that exercise is held up as the pinnacle of health.And it's like the one thing that we need to do in order to be healthy. And I'm not disputing that there are health benefits. I also am like curious about the magnitude of those benefits within the broader context of health and health behaviours, but also nesting that within sort of social determinants of health and like, how do we measure the effect size of exercise individually from, I don't know, sleep, other elements of mental health, community? I guess what I'm maybe trying to temper is like that there are so many, like, variables and factors that contribute to someone's overall picture of health and I appreciate that movement can be an important facet of that.Michael: Yeah, no I really like that point because it is so important and I think that's why it's important to approach exercise and hence why I said without knowing more about this person, it's hard to give an exact answer. I think it's important to look at all of those things in terms of context when you're trying to prescribe or recommend exercise to someone, right?Let's say that this person is, they're likely lacking in sleep right now at the moment, right? Because their life is very busy running around after small humans. If that person is exhausted and they have no free time at all. I'm not then going to say, right, you've got to go and exercise 30 minutes a day for three times a week, because it's just not going to be helpful. There's other areas of your lifestyle that we can focus on to improve your health. However, if there is a bit of wiggle room, if you have a bit of time, then maybe there are things that we could explore that you could quite comfortably fit into your day without it taking over your life like a lot of the fitness industry wants us to do. Laura: Yeah. I think that the, maybe the TL;DR there is you don't have to sweat it when you are running around after a small child and doing other, all these other things. But if it feels like it's something that you want to explore, and you're curious to give something a try, then yeah, you could have a think about some gentle movement or something, see how that feels and how that fits in the context of your life But yeah, it's tricky to prescribe something without knowing, yeah knowing someone's life and what they want to get out of it. Michael: So true and you're never gonna know if it was directly the exercise. It could be so many other things that then, yeah, that then causes the health benefit.I would just say, once again, like anecdotally, rather than looking at research, every person that I've worked with that we've tried to think, right, how can we incorporate exercising today in some format? The large majority of the time, everything else feels better and improves as a result.Laura: Yeah, no , it can, it has a knock on effect on like sleep and pain and like all these other things. So, okay. How can I move my body without shame and guilt driving it? These are two separate questions, but I'm just lumping them together, and then this, another person asked, how to find the joy in movement after a life forcing it?Michael: I think first of all, it's really important to, like, vet where you're getting all of your inspiration and information from is a really important one because a lot of the time, if we're following the kind of general societal recommendations when it comes to exercise and nutrition. It's always going to have quite a prescriptive image focused approach to movement.And if you can shift away, like what we spoke about at the start of this, you don't follow many personal trainers because you don't think that they're motivating or helpful to you. They actually just make you feel worse. I'm the same. When I constantly see gym bros. telling me that I have to lift weights X amount of times a week, and I've got to get shredded and have low body fat levels, it has the complete opposite impact on me. So if you can first of all vet where you're getting your information from, that is absolutely huge. And then, yeah, I guess also once again, it's not beating yourself up for having the more mainstream thoughts that you used to have. I know a lot of people when they're trying to shift into kind of taking a more intuitive eating approach or a more intuitive eating approach with like exercise too, as well as nutrition, we can sometimes feel really guilty when we start slipping back into older habits that maybe are slightly disordered.I'm just... like giving yourself a bit of leeway and a bit of space to grow and learn. I'm still doing that. I still probably get things wrong and have room for improvement, but I think by doing that, removing the pressure on yourself can be really helpful. Laura: Yeah. Two things that I might add to that are something that I've explored with clients as part of working on the relationship with food and body and movement often comes up as part of that, we might explore this idea of, what it feels like in your body where you've had a period where you haven't moved at all, right? Maybe it's because you're recovering from an injury or because you just were so burnt out with exercise that you just really didn't move. How did that feel in your body? Did you get any pain or did it feel nice to rest or what was that experience? And then also thinking about periods of your life where maybe you've been really deeply invested in fitness culture. And maybe doing the punishing exercises, maybe also getting injuries because of that, maybe getting ill a lot of the time, maybe losing your period, like all kinds of different things, like different experiences that you could have in your bodies.If you've got that framing of this is what no exercise feels like in my body, and this is what too much feels like in my body, then it can help you explore what some sort of happy balance might feel like. So that's something that I encourage people to think about. And I also just wanted to shout out Tally Rye's Intuitive Movement Journal.It's her book Intuitive Movement as well. It is isn't it? Clients have found that those are helpful resources for navigating stepping back from exercise and just exploring what rest feels like through kind of the framework of, or a similar framework to intuitive being. So if intuitive being resonates with you, then maybe Tally's work will as well. So I'll link to them in the show notes. All right, this will be our last question. And it is: I cut out all deliberate movement for a while, by which I mean, I walk to get places and that's it. I'd like to try some movement. and see how it makes me feel. But where on earth do I even start? Michael: Okay, once again, without a lot of context, this is very hard to give specific advice.So I would say think about where you would feel most comfortable exercising and start from there. So I know that for a lot of people, the gym environment can be incredibly intense and intimidating for many reasons. So if you think that maybe that feels a bit much and it's going to put you off. Let's write that off. Don't do that. So let's think, okay, maybe we could start some movement at home. Is there a form of exercise that you really enjoy? Do you like dancing? Do you like jump rope? Do you like bodyweight workouts? What is it that kind of you think, Oh, actually that sounds quite fun to me and start there.And then let's say that there's so many decent content creators online, depending on what you like that I could recommend. Feel free to reach out and just start from that point. If you're thinking that kind of back to my earlier point that, okay, strength training doesn't have to look like that in the gym. What can it look like? A set of basic resistance bands from Amazon for 10 quid, you've got a gym at home. Like you don't have to go to a gym. There's so many different ways that it could look start from that start from what gives you that, Oh, that's interesting. I might give it a try, and start really, really small and build from there and that's probably the best place to start. Laura: If someone hasn't done much movement other than, like, incidental daily movements for a while... there's obviously a lot of privilege in this question but I'm wondering if you would recommend like doing a couple of one on one sessions with a trainer, like a safe trainer that could help build up strength or make like a bespoke kind of program for someone or just help them with their form so that they... I'm maybe thinking of myself here, but I know that I have to be really careful what I do at home because I'm more likely to end up injuring myself just because of my like, specific needs and in terms of managing pain. And so what I've ended up doing... and again shitload of privilege in this but, I'm, after three years of pelvic girdle pain, I'm like, at my limit. So I've started seeing a physio one on one who does clinical Pilates. So it's like very much helping me build my strength, which I could do... like I was going to a barre class before that, but I was walking away with more pain, even though it was supposedly like a supervised class, like there were no adjustments. There were no like modifications for my body, like nothing. So I personally, I have found that trying to build my strength and reduce pain, like finding someone who's really specialised has been a game changer for me. Michael: Yeah, I would say... I was gonna say one of the benefits of COVID. That's not what I meant. I was gonna say for the benefits of kind of the lockdown that happened as a result of COVID is the fitness industry got pushed forward by about five to ten years in terms of the way that it can support people, especially on a tighter budget as well. There are now so many... Laura: oh, you mean like online?Michael: Online support, right? Because I know that personal training is an investment for a lot of people. It's not a cheap route to go down. If you can afford it, absolutely, yes. If you can have the support of a professional who's got years of experience, it does speed things up and it makes things a lot more kind of personalised and perhaps more enjoyable.However, the way that the online fitness space works now, it has improved massively. And for, kind of, much cheaper options, monthly options, you can get the support of a trainer online that will be able to do a video call with you to check your form. You can send them videos. Like I speak to people that follow me on Instagram all the time and they'll ask me a question. I'll say, just send me a video of you doing the exercise. I'm happy to give you some pointers. If you find people online that are truly passionate and care. If you send them a video of you doing an exercise, they'll happily help you out. So there are so many different routes that you can go down to get the support that don't cost a huge amount of money.Once again, even the cheaper forms are still an investment, but there are different routes that you can go down now. Yeah, absolutely. Laura: Yeah. Okay. I appreciate that. And then just to add to that, like I've done some sessions with this, like a one on one physio. And now I'm going to, like the group classes as well.So it's, I think, helpful to just... if you have any kind of rehab that needs to be done, or if you just want to feel more confident in the movements. Cause like Pilates can be tricky if you don't know exactly what you're doing to just be thrown into a class situation. So it's helped me at least like doing a few sessions, even though I've done Pilates before, but just having that refresher to then go into a class setting, it's just helped build up my confidence a little bit. And it's also, I'm not going to like this, like a gym. Sorry, I said that with so much disdain, realizing you're a personal trainer! Michael: Ugh, these disgusting personal trainers!Laura: It had, like, a visceral effect. Michael: It's so funny though, isn't it? That it's so sad that's what the fitness industry has become. And especially as a trainer who is one, every time I meet someone and they'll ask oh, what do you do? I have to like preface, Oh, like I'm not like the rest of them, but I'm a personal trainer, like it's really sad.Laura: I do the same thing, but with nutrition, I'm like, I'm a nutritionist, but I'm not that kind of nutritionist. Michael: I'm not going to sell you a cleanse, I promise! Laura: All right, Michael, this has been so fun to have you on and just shoot the shit about fitness culture. But at the end of every episode, my guest and I share something that they have been snacking on. So it can be a book, a podcast, a TV show. Yeah, just about anything that, that you feel like. So what are you snacking on at the moment? Michael: So one podcast I'm listening to, this is going to be a bit of a curve ball, there's probably quite a few people, especially in the UK listening to it... I don't like politics because in this country, it's so gross the way that politics is at the moment, but I like being well informed in what's going in politics because it has such a huge knock on impact to like societal changes.Laura: I was really glad that you said that, because when you said I don't like politics, I was like, argh where is this going! Michael: no, I do, but I get so infuriated by it because it's so important and I feel like coaches need to be informed because it does directly impact everything we're doing with our clients in terms of like socioeconomic impacts and food access and education and stuff, so I've been listening to The Rest Is Politics podcast. I don't know if you've ever listened to it. It's actually really good. It's Alastair Campbell, Rory Stewart, Labour side, Tory side. They chat about all daily topics and I quite like that they disagree and argue. I, depending on what you think about those two individuals, I'm still very mixed on what I think of them.However, I think it's very good to have a nice balanced approach there. So that's the podcast I've been listening to a lot recently. I really like it. In terms of food. So I can't eat eggs and dairy. I'm lactose intolerant and intolerant to eggs as well. Laura: I think you were probably going to wait for like the bummer, yeah, for me to be like, oh, that's such a bummer. But I'm vegan, so I don't eat any of that stuff . Michael: Yeah, I know. I was saying, I'm like the worst gym bro ever. I can't have whey protein shakes and I can't eat like 12 eggs a day. So maybe that's another reason they all hate me. So I found a vegan chocolate bar from Aldi. I don't know if you've ever had it. I don't think so. What? So they do milk, in quotation marks, milk chocolate and a white chocolate. They do a dark chocolate too, but a lot of vegan chocolate is dark. Anyway, so I haven't even tried that but their milk chocolate and their white chocolate is so good .And i'm getting through far too much of this chocolate at the moment but I finally found a chocolate bar that tastes amazing. They're by far the best chocolate you can get that's vegan, hands down Laura: That sounds really good, but we don't have an Aldi near us. We have a Lidl. Michael: So it's worth commuting. Laura: Oh, is it? Michael: Yeah. Yes. Laura: Okay. Might have to go to the dark depths of Dalston too.Okay. So I'm actually going to do a podcast also, and it's Getting Curious with Jonathan van Ness, which everyone knows who JVN is, obviously. He's amazing. Yeah, love them. There was like a bit of a thing a while ago where on their Netflix show they talked about like food addiction and it was just really problematic and icky and fatphobic. But JVN seems to have really been on a bit of a journey with this stuff and the latest, well, at the time that we are recording, they've just come out with a podcast called... well, an episode of their podcast Getting Curious called What's the Cultural History of the Calorie? With Dr. Athia Chaudhry. They're a fat activist and it's immersed in like fat politics. So, yeah. I would recommend going and giving that one a listen, because yeah, JVN has been on a journey, it seems. Michael: That sounds awesome. And that is my afternoon listening. Thank you very much. Laura: I will link to all of those things in the show notes.Michael, before I let you go, can you tell everyone where they can find out more about you and your work? Michael: Of course, so, most of the content I create is through Instagram, so it's just my name, which is very hard to spell, so probably best if you check it in the show notes. Laura: Yeah, I will link to everything.Michael: Thank you very much. So it's @MichaelUlloaPT, and that's on Instagram, Threads, Twitter, TikTok, whatever platform, it's all the same. Laura: All right, Michael, I will make sure that... It's all fully linked in the show notes so that everyone can find you. Thank you so much for coming on and yeah, like I said before, shooting the shit with us about fitness culture was really fun.Michael: Thank you so much for having me.OUTRO:Laura: Thanks so much for listening to the Can I Have Another Snack? podcast. You can support the show by subscribing in your podcast player and leaving a rating and review. And if you want to support the show further and get full access to the Can I Have Another Snack? universe, you can become a paid subscriber.It's just £5 a month or £50 for the year. As well as getting tons of cool perks you help make this work sustainable and we couldn't do it without the support of paying subscribers. Head to laurathomas.substack.com to learn more and sign up today. Can I Have Another Snack? is hosted by me, Laura Thomas. Our sound engineer is Lucy Dearlove. Fiona Bray formats and schedules all of our posts and makes sure that they're out on time every week. Our funky artwork is by Caitlin Preyser, and the music is by Jason Barkhouse. Thanks so much for listening.ICYMI this week: "I'm Not Your Target Audience" - How Do We Get Men To Care?* Reclaiming our Appetites* MORE Teens, TikTok, and some Good News for a Change.* Dear Laura: I'm freaking out about what my kids eat - but is it really about them? This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit laurathomas.substack.com/subscribe

Michael Sullivan is a property management entrepreneur who has grown his business to 275 doors. Join property management growth experts Jason and Sarah Hull as they chat with former DoorGrow client Michael Sullivan to learn about his experience starting and growing a property management business. You'll Learn [01:44] Getting started in the property management industry [07:49] Growing a property management business [24:01] Having support and feeling fulfilled in the business [28:13] Growing and scaling to the next level Tweetables “To go faster, you need to invest the currency of cash if you want to get more of the other currencies and to get the business to the next level.” “If you're not making mistakes, you're not learning.” “A lot of us business owners, we have a bit of ego.” “Being an entrepreneur can be one can be very lonely, and it is really important to have people in the same industry kind of in your village.” Resources DoorGrow and Scale Mastermind DoorGrow Academy DoorGrow on YouTube DoorGrowClub DoorGrowLive TalkRoute Referral Link Transcript [00:00:00] Jason: To go faster, you need to invest the currency of cash. If you want to get more of the other currencies and to get the business to the next level. Welcome DoorGrow hackers to the DoorGrowShow. 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 in business and life, and you're 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 business owners and their businesses. 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, along with Sarah Hull, the co owner and CEO of DoorGrow. [00:01:09] Now let's get into the show and our guest today is Michael L Sullivan. Michael Sullivan is here hanging out with us. He is a client of ours and of Sullivan property management. Did I say that right? MLS ullivan property management. All right, your initials. Got it. And Michael, welcome to the show.  [00:01:33] Michael: Thank you. Thank you very much. Good to be here.  [00:01:36] Jason: We're glad to have you. So we've really enjoyed having you in our program and it's been really amazing seeing your progress. So maybe to kick things off, let's start with talking about how you got into this crazy industry of property management. Like you woke up when you were like maybe five years old and said "property management is the thing for me" maybe. [00:01:57] Michael: Yeah, like every little boy and girl, dreams about being a real estate agent or a property manager.  [00:02:03] Jason: It's right there next to veterinarian and firefighter. [00:02:06] Michael: I think that's right. That's right or professional baseball player so, I left the teaching profession in 1993 and became a real estate agent, a general brokerage real estate agent here in the Greater Research Triangle region of North Carolina, and I did very well. I, on average, sold anywhere between 5 and 15 million dollars worth of real estate when our average sale price was $150,000. Yeah, we were shifting a lot of shacks, and it was a good life. And for the 15 or so years between 1993 and the Great Recession of 2007, 2008, my biggest fear was, "what is going to happen when the market flips?" Because inevitably, real estate flips. It goes from a boom market to a bust market, a buyer's market to a seller market. And so during those years, I socked away cash. When the market crashed in 2008, I had an inventory of 40 general brokerage homes that were for sale. I had clients that were still moving to Massachusetts or Plano, Texas, or Austin, or Seattle, you know, to the other tech hubs in the United States and my clients were like, "All right, problem solver, what are you going to do because we still have to move?" And I was like, "we're going to rent them." And so with an Excel spreadsheet and time, because I had lots of time then I started managing property and in the first year, our goal was 30 homes and we had 50 and it was me and one part time assistant and an Excel spreadsheet. Well, after about 18 months, that didn't work anymore. So I went out and I found what I thought was a reasonable property management software. And then over the course of the next decade or so, we got up to 110 properties or so and things were good, you know, we were chugging along and profits were good, but I really didn't know what I didn't know, I kind of. [00:04:22] Believe that once you had an Appfolio or a Buildium on board that you had won the day and that your business was set and you know, it should be easy. And I soon discovered when I got to 115 doors and just kind of got stuck there that the business wasn't growing the way it should be. And I couldn't figure out why. I was on Facebook one day. And there was this guy, Jason Hull, talking about this company called DoorGrow. And so I did the click, click, clickety click. And then I started listening to some of his podcasts and I started researching DoorGrow and I thought, " huh, this guy knows a whole lot about this industry and maybe this is someone I need to engage with." and so that's how I came to DoorGrow about two and a half years ago, I think.  [00:05:21] Jason: And now you're on one, you're on one of the podcasts.  [00:05:24] Michael: I know.  [00:05:25] Jason: So what challenges did you start to realize you were dealing with at the time? Because generally, you've made a ton of changes in your business since working with us, and you know, it's been impressive to watch. What do you feel like were your challenges at that time? Like, what did you not know that you did not know? So  [00:05:43] Michael: I knew that there were currencies in a business, but I didn't know that there were five of them. And I knew that I was working really hard. So the currency of effort was there. Yeah, my bank account showed me that the currency of cash was there. Yeah, the currency of focus was really lacking because I was still doing a lot of general brokerage and still trying to do property management. The focus of energy was lacking. Because it was draining me kind of going in these different directions. And then there was a lack of time. I didn't have time to take off. I didn't have time to turn it off because it was me and an assistant property manager at that time, I was still doing all of the day to day operations and the round pegs in the round holes work. And figuring out those currencies and how to better divide them and focus on them was one of the things that I didn't know and that once I could put a name to it and once I could focus on fixing where there was a deficiency, then I kind of won the battle. I felt, you know, before you launched all of your different systems to help property managers, I listened to you and I went out and got Lead Simple. I went out and got Property Meld and kind of brought them into the fold. And I recognize that those tools, which you paid dearly for using these outside vendors, really bring you a wealth of time that didn't exist before. So I was able to capture that currency and by extension, the currency of effort was able to kind of tamp down because I had systems now in place to deal with the endless maintenance requests that having a practice that. Goes up over a hundred percent in growth is going to require.  [00:07:48] Jason: So let's talk about that growth. You had mentioned you'd gotten up to maybe, where were you when you started with DoorGrow?  [00:07:56] 118. [00:07:58] 118. Okay.  [00:07:59] And where are you at right now?  [00:08:01] Michael: 275.  [00:08:03] Jason: I mean, it sounds like you had pretty decent profit margin before. Well, what was that? If you don't mind sharing, what is it? [00:08:09] Michael: So, on a gross per door basis, when I joined DoorGrow, we were right at about $122 a door per month. Yeah. And today we're up. $153 and 82 cents per door per month.  [00:08:26] Jason: That's very specific. So, you know, your numbers, which is good.  [00:08:30] Michael: Well I try. Yeah. And year over year revenue increases from last year is up 58.7%.  [00:08:36] Jason: Wow. That's awesome. So money's up. So the cash currency has improved the focus currency. Have you been able to do less in the business and narrow your focus?  [00:08:48] Michael: Yes. So Saturday is my benchmark. I call it my Zen day. And if Saturday can be a Zen day for me, where I don't feel like I have tasks that I have to accomplish, that I can do the things that I want to do, still working on the business, not in the business, then I feel like the week has been a win. If I feel like there are pressing tasks that I have to work on within the business on Saturday, then I feel like the week has not been a win. So if Saturday is Zen, if I come into it feeling very kind of centered and relaxed, then I feel like things are in balance the way they should be. [00:09:34] Jason: So what percent profit margin are you operating at now?  [00:09:37] Michael: So coming into this year 2022, we were at 27 percent profit margin, but a lot of that was really underpinned by very robust general brokerage sales. I made a concerted effort this year to pour gasoline on the fire to really grow the business. The goal is to be over 300 doors by the end of the year. So we're 25 away. Nice. I'm pretty sure we're going to make that, you know, that goal. But our profit margin right now is at. 11 and a half, 11 and three quarters percent. So it's down substantially, but that was deliberate.  [00:10:14] Jason: Got it. And is deliberate because  [00:10:18] Michael: why? [00:10:18] Because we're making an investment in people. We're making an investment in systems and we're making an investment in things like vehicles and computers and marketing.  [00:10:30] Jason: Yeah. So I think that's an important thing for business owners to recognize that. To go faster, you need to invest the currency of cash if you want to get more of the other currencies and to get the business to the next level. And you can grow faster if you have thinner margins, which can feel a little more dangerous. And you know, if you're investing into the growth of the business and into the future, but you know how to add doors, so this isn't a concern for you. [00:10:57] Michael: It isn't. My bookkeeper and my accountant were a little apoplectic until I told them like, this is where we're going. And what I said to my bookkeeper was before the great depression of 1929, Ford motor company was the preeminent motor car company in the world. They had an amazing market share. Then the stock market crashed and the economy tanked and Ford circled the wagons, folded their tents and got very conservative. They scaled back. General Motors, by extension, said, "ah," and they saw it as an opportunity and they poured gasoline on the fire. And for the next 70 years, General Motors was the dominant car company in the world. And so I kind of am using that model.  [00:11:47] Jason: Yeah. So, now a lot of people listening to this might think, well, cool, I can get Property Meld, I can do something, you know, get something like Lead Simple, or we have a better tool now, which is DoorGrow Flow. " I can go and get tools and maybe I can do it on my own." Because I think this is the challenge. A lot of us business owners, we have a bit of ego. " I've made a lot of mistakes in the past and we think I can do it myself. Maybe if I watch enough YouTube videos, listen to enough podcast episodes, I can figure it all out on my own. I don't need DoorGrow or I don't need it." Like, so what would you say to people that listening to this or thinking that?  [00:12:22] Michael: So I would say to them, when I think back to me and one assistant and 115, 110 doors and good profit margins. You know, and a good life. I was in a really kind of felt very isolated and very alone I didn't have other friends or colleagues in the property management space that I could talk to. I felt like I was the only person in the world that was doing this, and once I joined DoorGrow and made very valuable, long lasting friends within the organization that I can call on off hours to discuss specific problems related to property management, that burden of feeling on my own and alone disappeared. Being an entrepreneur can be one can be very lonely, and it is really important to have people in the same industry kind of in your village. And that's why that's 1 of the benefits of joining DoorGrow is that I can call friends in Texas, Idaho, Pennsylvania, California and say, "hey, I've got this going on. What do you think?"  [00:13:40] Jason: Yeah, and I think you know, that's a testament to you is that you've been such a contributor that in the mastermind that it's allowed you to connect with all of these people, you know, there are some people that join the program and they still stay somewhat isolated. They're like, "I'm going to watch videos I'm going to learn stuff and do my own thing and they maybe don't get some of those advantages or benefits But I think that's key. [00:14:02] So yeah Yes. I mean, Sarah, when she had her property management business, I imagine you experienced some of the same sort of things of thinking it's. You know, this is, you're the only one in the world doing this. You're on your own.  [00:14:17] Sarah: Yeah, very much. And especially in the area that I was in I was always different and I just kind of do things differently and I think differently and oftentimes people are like, she's nuts, like, why would you do that? [00:14:29] Even my mom, sometimes she's like, are you sure you're going to do that? Like, are you sure? Like, I'm kind of nervous. But I've just always done things a little differently. And it's so, it is really lonely. And I think the mindset that I had back when I was in Pennsylvania versus, you know, the mindset I have now really has a lot to do with who you surround yourself with and that can. [00:14:53] I think it can just give you hope and it can show you like, Hey, like, I'm not so crazy. Like I've got it. Like I've got it figured out and I'm like doing the right thing and I'm on the right path. And you know, it feels right, but sometimes it's just, you know, you're like, Oh, is this really right? [00:15:07] Because it feels good to me, but man, everybody else is doing something so different.  [00:15:12] Michael: Yeah. And that's another benefit that DoorGrow has given me is. I now have the ability to say no. So I am the business development manager. I have someone in charge of maintenance. I have someone in charge of tenant experience. [00:15:28] I have someone in charge of ops within the office. They color within their lines and we are good. My job is to go out and build the business to work on the business, not work in the business. And until I joined DoorGrow, it didn't matter what came my way. Property wise, I was going to take it last week. I turned away more properties than we took on because they weren't the right fit. [00:15:53] And I have a very nice conversation with prospective clients about qualification and that they're qualifying us to make sure we're a good fit for them. But at the same time. I'm qualifying them, their mindset, their properties, their attitudes toward spending money, their attitudes toward maintaining their properties, and if those things don't align with what we believe here, that housing is a human right that people have the right to live in nice homes that are maintained and maintained properly, then We're not going to accept the business. [00:16:30] We're also not going to accept people that are rude, mean and abusive. Because I've learned since kind of letting the stress of being a general brokerage real estate agent. Slip away that there is plenty of good business out there and that it's more important to have the Philosophical fits with the business than it is to take just any property no matter what the cost  [00:16:57] Jason: Yeah, your ability to say no in business Gives you a business that you feel you can easily say yes to each  [00:17:03] Michael: day. [00:17:04] That's right.  [00:17:05] Jason: Yeah. Yeah. It's nice to not have to wake up and go, man, I really don't want to do this today. And that's because we're setting boundaries for ourselves and that boundary in those containers allow us to create a business that we really like to be inside.  [00:17:20] Michael: Right. That's correct. Yeah. Now,  [00:17:22] Jason: when you came. [00:17:23] To us DoorGrow initially. I remember like you really had this mindset that you, and now you're doing business development, you had mentioned, you really believed you were the operator. It all was on your shoulders to operate the business, do operations, and you were good at it, but you believe that was your primary gift, I think, to the business and what your contribution needed to be. [00:17:45] And and I know you had some conversations with Sarah and some shifts in that, so could you touch on that a bit?  [00:17:51] Michael: Yeah well, control freak and always have been a control freak. I know one of those. You know, own it. And to a certain degree, I still, I observe. I trust and verify, but I don't get involved. [00:18:07] My number two said it best the other day. He said, yeah, with you. I only have to come to you if I know it's a problem that I can't solve. So I have kind of empowered the people who work with me to color in their lines. And when they are in trouble, come here and ask and we'll figure it out. I have also given them permission to make mistakes because if you're not making mistakes, you're not learning. You're static, and I let them see that I make mistakes and that I admit when I make a mistakes above all else. I expect complete honesty here. We make mistakes. We admit our mistakes. You know, if we have to eat it because it's a financial error that we've made well, then by golly, we're going to eat it because it was our mistake. And we come by it honestly the empowerment of becoming a business development manager is I don't have to worry that the books are balanced every week because I know that there is someone who I've paid good money to who has balanced the books and they can't hide because the system has been created where I can see that it's been uploaded into the accounting software and that the books are in balance. [00:19:25] I can verify that the financial piece of the puzzle in the business is running properly because I get a report monthly from my accountant and my bookkeeper that says, "this is where we are. This is your cash flow. This is your profit. This is where you're spending a lot of money. Are you okay with that?" and I pay them good money to do those things. I have a maintenance coordinator who deals with maintenance and on the Property Meld dashboard, which I log into every morning. I can see the tasks picking off or I can see things progressing and I can see that we're handling our maintenance requests in 3 to 4 days on average and that's fine. I've also told him to maintain his sanity because he's a bit of a control freak. If it's after hours and it's a garbage disposal in a dishwasher and it's after 5 o'clock, you don't need to deal with that today. If it's a leak and we have a catastrophe, then you deal with that after five o'clock, but the small stuff can wait until tomorrow. [00:20:26] It's still important. It's important to get it done and move it off our plates, but you don't have to deal with it when you need to be spending time with your children at soccer camp or baseball practice or whatever he does in the evening with his four kids. And then my other teammates, I can see that they are moving their tasks forward and that I don't have to worry about the job that they're doing. And that's empowered me to go out and find the right properties to bring into the practice for us to manage.  [00:20:56] Jason: You know, one of the gifts that I see in you, which I think really sets you apart, Michael, is coming into the program you're really intelligent. You know this. You're an intelligent guy. I think everybody can pick that up just by hearing you and listening to you. But even though you're intelligent, you have humility about, you know, and this openness to learning. And you've come into the program and you just started to do stuff. Like you tried it out. You experimented, and you allowed yourself the time to prove whether or not it would work or not. And some of the times we get clients that are intelligent, but they're not humble and they're usually the biggest stumbling block to themselves. So I just wanted to point that out. I'm curious what Sarah's experience has been of you as well, because she worked closely with you on like reviewing some of the systems, reviewing your team assessing you and some of this kind of stuff. [00:21:54] Sarah: So, yeah, I think I definitely agree with what you just said about being open to learning and trying things just a bit differently. And I think a lot of entrepreneurs, we do things differently. We're okay with that. But sometimes if it's not our idea, then we're like "I don't know if I want to do it because I didn't think of it." right. So, I think Michael is, he's open to thinking differently. He's open to trying things out and implementing a system. He'll do the research. He doesn't just, you know, blindly jump and he's like, well, Jason said to do this, so I'm going to do it, but he'll do the research and he's very thorough. And I really appreciate that about Michael. He's all into the details and he knows exactly what's going on in his business. He's not like, "Hey, I'm just going to kind of sit back and like, let the team run everything, and then I just, I'm going to cross my fingers and hope and pray that everything is going well, right?" like we know that it's going well because you're not the one who's doing it, so you've been able to get out of the hot seat in a lot of different ways and get yourself more into the things that you actually enjoy. because I remember that conversation with you about the operations and you said, "well, I really just, I love to sell" like, okay, then let's let you sell. Like if you're doing things in the business and you're just holding on to them going, "well, I have to be the one to do this." I think it's really common for us to think that like, " well, I own the business, so I have to do this piece or I own this. And it has to be me. It doesn't always have to be you." do you have to know what's going on? Absolutely. Do you have to have the right people on your team? Absolutely. And do you have to set it up so that things can run smoothly? Absolutely. But do you have to be the one who's actually like doing the work? Right. And I think that's one of the biggest shifts that I've seen in you is that you're able to say, okay I don't have to do this part and I don't want to do this part. [00:23:54] This is where I want to be. So I'm going to move closer to this and I'm going to figure out how to get these pieces kind of offloaded.  [00:24:01] Michael: Yeah. Yeah. When you taught me how to write R docs and after I had a disastrous hire two years ago, disaster, and I had to fire someone, something I'd never had to do, but it was my fault. There was nothing wrong with the person I hired. She was just the wrong fit for the job. And then we sat down, we wrote R docs. With detailed job descriptions and parameters and that made bringing on the next person who is now in that role a dream because she fit the culture. We knew what her profile was before she even interviewed with us. We knew who the person was and then she walked through the door and poof, there she was. And that's one thing I didn't know. I just thought you could teach someone into a position. Well, you can teach skills, but you can't teach the human touch. And that's what I had missed with the disaster, the mistake that I made.  [00:25:02] Jason: Yeah. You'd learn some concepts from us, like the three fits , mapping out R docs. One of you explain what R docs are for those of us. This is DoorGrow speak here.  [00:25:11] Sarah: I know it is. So an R doc, it's just basically a fancy word for job description. We call it R doc because every section on it starts with 'R.' [00:25:20] Jason: There you go. So the ultimate job descriptions. Awesome. So, yeah, so all of these little pieces and systems and mindsets that you've installed in your business have really, I think, primed your business for a lot of growth. Like, where do you see the business going in the future?  [00:25:37] Michael: Oh, so that's another thing I learned. And it was at, I think, Austin at the Austin meeting. And it was you said it in the first like two minutes and I got my nugget and I was like, okay, I can go home. I got it. You said, don't limit your growth. And I had constantly said 200 doors, 200 doors. That's where I'm going. That's where I'm going. And you already passed that now. Yeah, you said that. And I was like. " Why would I create like this false ceiling that I'm going to just bump into and stop at?" Yeah. So, ultimately, and I'd like to retire in the next 10 to 12, 15 years, maybe. We're realistically thinking in the neighborhood of 1,000-2,000 doors. Yeah, people have started to come a calling about, "Hey, do you want to sell your business?" And the time is not right. Some of the financial offers that have been made already are very intriguing. Yeah. But then I'm like, " what will I do with myself?" You know, "what's the next iteration?" And I think until I figure that out, we're going to just stay the course. [00:26:47] Jason: Yeah, I think that's one of the key things that I think a lot of people realize in the program that if it was just about money, then maybe you'd cash out, but it's not just about money, right? There's other things we want out of our experience here on this planet. And that's something else you got a lot of clarity on is what really personally drives you, which allowed you to build the business and the team around you so that you really could move into those plus signs and out of those minus signs. [00:27:13] Michael: Yeah, so the key is I went to the Netherlands in May to see art because it's my thing. Cool. And a little ostentatious to fly to Europe to see Vermeer, but I did it. And I was gone for a good long time and things here chugged right along and it was beautiful. And I knew then that we were doing things right, that I could leave and not be here for 10 days, and the business continued to operate. I continued to watch and check in. But they didn't need me.  [00:27:49] Jason: And how's that different from before you came to DoorGrow?  [00:27:53] Michael: Oh my God. Like the first meeting in Austin that I came to, I had I came really close to not coming because I was like "I can't leave. I just can't leave. I can't leave them." I was wrong. I was wrong and I went to Austin and I went to Vegas and you know, things were good. Yeah.  [00:28:12] Jason: Yeah. So awesome. Well, it's been really cool to see your progress. We really appreciate. Seeing your growth and yeah, there's no question in my mind. A lot of people hear you say, Oh, maybe a thousand, 2000 doors. And they probably think: this guy is ridiculously off his rocker that he could just believe that and the audacity to have that mindset. And I'm sure when you first came to DoorGrow, a thousand doors was like, probably magic, some magic, like pipe dream in the ethers that you would never even consider. I don't know, but. [00:28:40] Michael: 300 seemed unimaginable.  [00:28:43] Jason: Yeah, but now it seems very doable. And you're aware of the DoorGrow code and like we've got clients breaking a thousand doors. We've got clients doing it. And there's no question in my mind. You could easily do this in the next two to three years. If you really wanted to easily.  [00:28:57] Michael: Yeah, I work my golden 100. That's another thing I learned at DoorGrow. To have people that are valuable people that I love and care about that. I have to touch every 30 days because they love and care about me and buy it. So they send business. They ask questions and we share information. Yeah. And for that, I'm indebted to you.  [00:29:19] Jason: Not at all. Well, great. Well, yeah we, it's been really awesome seeing your growth. So cool. Anything else we should ask Michael? We've got him hanging out here with us. What's next for you, Michael? What's next?  [00:29:31] Michael: Well, once we go over 300, then the double it again. [00:29:34] Jason: Yeah. So what I see next for you is you've got some of the systems installed. And then I think what it will be next is to level up your three key systems of. People, process, and planning and maybe starting to build out even a little bit more of that executive team. I think you've got a good team going now and I think then what would be next would be maybe starting to acquire you'll be the one eating up some of these other companies. And I think, maybe working with us on acquisitions, and I think that'll be the quick pace to grow. And that also bring you really great people too, if you want. So [00:30:07] Michael: we're working on two. They're on a slow simmer because companies that I'm looking at have some. Bookkeeping issues. We'll just put it at that.  [00:30:17] Jason: It's an opportunity. Yeah. Always do.  [00:30:20] Michael: So we may be able to fix the problem. Definitely.  [00:30:24] Jason: You'll be able to fix the problem. Yeah. Yeah. Very cool. Well, I'm excited to see what you do in the future. I know like, I've seen companies hit all these different stages. I know. We know the challenges that you're going to hit at these different stages in growth. We're here to support you. And for those listening here on the DoorGrowShow if you are struggling, you're hitting some of these sticking points, these milestones, you're stuck in your mindset, whatever. Be like Michael, be like Mike, not Mike, but all the reference, be like Michael and you know, talk to us and let us map things out with you and see if we could help you out. We'll be sure with you. So, well, Michael, appreciate you coming on the show. We appreciate having you as a client and grateful for you.  [00:31:09] Michael: Thank you. Thanks. I appreciate it. Have a good day.  [00:31:12] Jason: All right. Cool. So, if you're wanting to get into our free community of property management entrepreneurs on Facebook, go to DoorGrowClub.Com. We have some free gifts that we want to give to you. You'll provide your email as you join the group, we'll give you an, a drip, an email drip of some free gifts, including a fee Bible and some vendors that you can use and some different tools just to help you help yourself and help the industry level up. [00:31:42] And we, and if you provide your info, we will also reach out to see if you'd like to have a conversation with us and see if we could help you grow your business, which the answer usually is. Yes, we can. So we would love to support you and help you out. And if you're wanting to test out your website, which you think might be amazing, go to doorgrowcom/quiz and test your website. A lot of times, this is a great gateway to realizing that you have some blind spots in your business. When you see that your website is leaking lots of money. Which is something we can help you out with. There's a lot of other leaks you can't see, and this might crack your mind open, get you to be open minded like Michael and allow us to be able to help you and support you and make a lot more money, have a lot more freedom and make a bigger difference out there in the marketplace. [00:32:34] We appreciate you listening to our show. If you could do us a favor and leave us a good testimonial on, if you're hearing us on iTunes or like, or comment all of these things help us out and help us get the message out to enact our vision and our mission for this industry of helping it level up. [00:32:50] And until next time to our mutual growth, everybody, bye everyone.  [00:32:54] You just listened to the #DoorGrowShow. We are building a community of the savviest property management entrepreneurs on the planet in the DoorGrowClub. 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!  [00:33:21] 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 doorgrow.com, and 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.

The subtlety of Temptations! Again, and again the fathers show us the relentless work of the evil one in drawing the mind ans the heart of individuals into sin. He can create within our hearts a kind of childishness; a veneer of sanctity or virtue. One can experience, joy or tears or consolation in their soul, but it can all be an illusion, and not truly rooted in repentance. It is for this reason that we so often backslide in the spiritual life. We do not let go of the attachments that we have to the things that lead us into sin. We may repent and go to confession, but within our hearts we still hold on to a multitude of things that give rise to temptation or that stimulate our inclination to particular sins. Fornication in particular is something that is seen as having great weight among the fathers because it is so tied to our very make up as human beings and to our bodily appetites and desires. We can fall into error in our thinking and be corrected of this error even when we cling to it with pride. But once we have acknowledged the error we are unlikely to return to it. However, when the sins of the flesh become tied up with our imagination and memory, and when we give ourselves over to the sin, the deeper the roots become. What is lodged in the imagination and memory is easily taken hold of again through fantasy, at first, and then finally an action. Therefore the sins the flesh often need the greatest commitment to ascetic disciplines in order to uproot them. We were told in the Scriptures that the kingdom of heaven suffers violence, and the violent to bear it away. Similarly, there are things that we must be willing to cut out of our life in order to keep us from falling into the same sins again. Our desire and our courage in doing so, however, is often lacking. --- Text of chat during the group: 00:05:54 John Ingram: Greater Cincinnati/N KY   00:08:32 FrDavid Abernethy: page 145 para 42   00:25:53 Ashley Kaschl: Is St. John saying this over sharing/emotionalism be a symptom of this sin?   00:25:53 Louise: Blind to consequences.   00:29:25 Louise: Hooking up maybe to avoid aloneness at all cost.   00:29:26 Debra: Hook Up culture isn't just on Universities   00:32:27 Rory: Being in the moment with prayer, incarnate with God, we are never alone, as a temple of the Holy Spirit   00:36:40 Rory: ?is sin a correction?   00:37:39 Anthony: When I look at the history of heresy, I see that mental and physical errors often go together.   00:39:00 Anthony: Examples that come to mind: Marcion & other Gnostics; Cathars; Lutherans; Munsterites   00:45:48 Louise: As a Catholic child, I was taught that we were forgiven if we recognize our fault, repent (suffer from having caused pain, which would reduce repetition), and to repair (in reality as much as possible). The last two requirements seem to be dismissed these days , especially the third one.   00:48:17 Ambrose Little, OP: It goes both ways. Some heretics go the way of overly puritanical approaches to the Faith.   00:54:31 Ashley Kaschl: The thought troubles me, and there's a lot more to be said, I think, but the penance of not being permitted to receive the Holy Eucharist because of the sin of fornication makes a lot of sense.    Being that we receive the whole Christ, if someone has developed a deeply rooted habit of fornication they would have a kind of morbid, contraceptive disposition of soul that says “I want the pleasure of receiving Christ in the Eucharist, but I do not want His effects.” Even if the soul is fighting against the sin, that person still needs to be freed from that disposition before seeking a union with God they have trained their body and, thus, their soul not to seek above all other things. Obviously it's not so cut and dry but I can see what the footnote is saying

Michael Isbitski, Director of Cybersecurity Strategy at Sysdig, joins Corey on Screaming in the Cloud to discuss the nuances of an effective cybersecurity strategy. Michael explains that many companies are caught between creating a strategy that's truly secure and one that's merely compliant and within the bounds of cost-effectiveness, and what can be done to help balance the two aims more effectively. Corey and Michael also explore what it means to hire for transferrable skills in the realm of cybersecurity and tech, and Michael reveals that while there's no such thing as a silver-bullet solution for cybersecurity, Sysdig can help bridge many gaps in a company's strategy. About MichaelMike has researched and advised on cybersecurity for over 5 years. He's versed in cloud security, container security, Kubernetes security,  API security, security testing, mobile security, application protection, and secure continuous delivery. He's guided countless organizations globally in their security initiatives and supporting their business.Prior to his research and advisory experience, Mike learned many hard lessons on the front lines of IT with over twenty years of practitioner and leadership experience focused on application security, vulnerability management, enterprise architecture, and systems engineering.Links Referenced: Sysdig: https://sysdig.com/ LinkedIn: https://www.linkedin.com/in/michael-isbitski/ TranscriptAnnouncer: Hello, and welcome to Screaming in the Cloud with your host, Chief Cloud Economist at The Duckbill Group, Corey Quinn. This weekly show features conversations with people doing interesting work in the world of cloud, thoughtful commentary on the state of the technical world, and ridiculous titles for which Corey refuses to apologize. This is Screaming in the Cloud.Corey: Tailscale SSH is a new, and arguably better way to SSH. Once you've enabled Tailscale SSH on your server and user devices, Tailscale takes care of the rest. So you don't need to manage, rotate, or distribute new SSH keys every time someone on your team leaves. Pretty cool, right? Tailscale gives each device in your network a node key to connect to your VPN, and uses that same key for SSH authorization and encryption. So basically you're SSHing the same way that you're already managing your network.So what's the benefit? Well, built-in key rotation, the ability to manage permissions as code, connectivity between any two devices, and reduced latency. You can even ask users to re-authenticate SSH connections for that extra bit of security to keep the compliance folks happy. Try Tailscale now - it's free forever for personal use.Corey: Do you wish your developers had less permanent access to AWS? Has the complexity of Amazon's reference architecture for temporary elevated access caused you to sob uncontrollably? With Sym, you can protect your cloud infrastructure with customizable, just-in-time access workflows that can be setup in minutes. By automating the access request lifecycle, Sym helps you reduce the scope of default access while keeping your developers moving quickly. Say goodbye to your cloud access woes with Sym. Go to symops.com/corey to learn more. That's S-Y-M-O-P-S.com/coreyCorey: Welcome to Screaming in the Cloud, I'm Corey Quinn. I periodically find myself in something of a weird spot when it comes to talking about security. I spent a lot of my time in previous lives having to care about it, but the word security was never in my job title. That's who my weekly podcast on the AWS Morning Brief and the accompanying newsletter goes out to: it's people who have to care about security but don't have it as part of their job title. They just want to know what's going on without all of the buzzwords.This promoted guest episode is brought to us by our friends at Sysdig and my guest is Mike Isbitski, Director of Cybersecurity Strategy at Sysdig. Mike, thanks for joining me.Michael: Thanks, Corey. Yeah, it's great to be here.Corey: So, you've been at Sysdig for a little bit, but your history is fascinating to me. You were at Gartner, which on the one hand would lead someone to think, “Oh okay, you talk about this stuff a lot, but might not have been particularly hands-on,” but that's not true. Either. You have a strong background as a practitioner, but not directly security-focused. Is that right?Michael: Yeah. Yeah, that is correct. I can certainly give the short version of the history lesson [laugh]. It is true, yes. As a Gartner analyst, you don't always get as hands-on, certainly talking to practitioners and leaders from all walks of life, different industries, different company sizes, and organization sizes.But yeah, as a Gartner analyst, I was in a different division that was much more technical. So, for me personally, I did actually try to tinker a lot: set up Docker, deploy Kubernetes clusters, all that fun stuff. But yeah, prior to my life, as an analyst, I was a practitioner, a security leader for close to 20 years at Verizon so, saw quite a bit. And actually started as enterprise architect building, kind of, systems and infrastructure to support all of those business needs, then I kind of transitioned over to application security towards the tail end of that career at Verizon.Corey: And one of the things that I find that I enjoy doing is talking with folks in positions like yours, the folks who did not come to the cybersecurity side of the world from a pure strategy advisory sense, but have been hands-on with these things at varying points in our careers, just because otherwise I feel like I'm sort of coming at this from a very different world. When I walk around the RSA show floor, I am consistently confronted by people trying to sell me the same dozen products over and over again with different words and different branding, but it seems like it's all buzzwords aimed from security people who are deep in the weeds to other security people who are deep in the weeds and it's just presumed that everyone knows what they're talking about already. And obviously worse. I'm not here to tell them that they're going about their business wrong, but for smaller companies, SMBs, folks who have to care about security but don't know the vernacular in the same way and don't have sophisticated security apparatus at their companies, it feels like a dense thicket of impenetrable buzzwords.Michael: Yes. Very, very fair assessment, [laugh] I would say. So, I'd say my life as an analyst was a lot of lengthy conversations. I guess a little bit of the secret behind analyst inquiry, I mean, a lot of times, they are hour-long conversations, sometimes multiple sets of them. But yeah, it's very true, right?There's a lot of nuance to how you work with technology and how you build things, but then also how you secure it, it's very hard to, kind of, condense that, you know, hours of conversation and many pages of documentation down into some bite-size nuggets that marketers might run with. So, I try to kind of live in that in-between world where I can kind of explain deep technology problems and business realities, and kind of explain that in more common language to people. Sometimes it's easier said than done when you're speaking it as opposed to writing it. But yeah, that's kind of where I tried to bring my skills and experience.Corey: It's a little counterintuitive to folks coming out from the other side, I suspect. For me, at least the hardest part of getting into the business of cloud cost optimization the way that I do with the Duckbill Group was learning to talk. Where I come from a background of heavy on the engineering and operations side, but being able to talk to business stakeholders who do not particularly care what a Kubernetes might be, is critical. You have to effectively be able to speak to different constituencies, sometimes in the same conversation, without alienating the rest of them. That was the hard part for me.Michael: Yeah, that's absolutely true and I certainly ran into that quite a bit as an enterprise architect at Verizon. There's kind of really need to work to identify, like, what is the business need. And typically, that is talking to the stakeholders, you know, what are they trying to achieve? They might not even know that, right, [laugh] because not everybody is very structured in how they think about the problem you're trying to solve. And then what is their daily workflow?And then you kind of arrive at the technology. I'd say, a common pitfall for anybody, right, Whether you're an engineer or a security practitioner is to kind of start with the technology or the solution and then try to force that on people, right? “Here's your solution to the problem that maybe you didn't know you had.” [laugh]. It kind of should work in reverse, right? What's the actual business need? What's your workflow? And what's the appropriate technology for that, right?Whether it's right-sizing the infrastructure or a particular type of functionality or protection, all those things, right? So, very similar kind of way of approaching the problem. It's just what you're trying to solve but [laugh] I've definitely seen that, kind of, Kubernetes is all the rage, right, or service mesh. Like, everybody needs to start deploying Istio, and you really should be asking the question—Corey: Oh, it's all resume-driven development.Michael: Yep, exactly. Yeah. It's kind of the new kid on the block, right? Let's push out this cool new technology and then problems be damned, right?Corey: I'm only half-kidding on that. I've talked to folks who are not running those types of things and they said that it is a bit of a drag on their being able to attract talent.Michael: Yeah, it's—you know, I mean, it's newer technologies, right, so it can be hard to find them, right, kind of unicorn status. I used to talk quite a bit in advisory calls to find DevOps practitioners that were kind of full-stack. That's tricky.Corey: I always wonder if it's possible to find them, on some level.Michael: Yeah. And it's like, well, can you find them and then when you do find them, can you afford them?Corey: Oh, yeah. What I'm seeing in these other direction, though, is people who are making, you know, sensible technology choices where you actually understand what lives were without turning it into a murder mystery where you need to hire a private investigator to track it down. Those are the companies that are having trouble hiring because it seems that an awful lot of the talent, or at least a significant subset of it, want to have the latest and greatest technologies on their resume on their next stop. Which, I'm not saying they're wrong for doing that, but it is a strange outcome that I wasn't quite predicting.Michael: Yeah. No, it is very true, I definitely see that quite a bit in tech sector. I've run into it myself, even with the amount of experience I have and skills. Yeah, companies sometimes get in a mode where they're looking for very specific skills, potentially even products or technologies, right? And that's not always the best way to go about it.If you understand concepts, right, with technology and systems engineering, that should translate, right? So, it's kind of learning the new syntax, or semantics, working with a framework or a platform or a piece of technology.Corey: One of the reasons that I started the security side of what I do on the newsletter piece, and it caught some people by surprise, but the reason I did it was because I have always found that, more or less, security and cost are closely aligned spiritually, if nothing else. They're reactive problems and they don't, in the general sense, get companies one iota closer to the business outcome they're chasing, but it's something you have to do, like buying fire insurance for the building. You can spend infinite money on those things, but it doesn't advance. It's all on the defensive, reactive side. And you tend to care about these things a lot right after you failed to care about them sufficiently. Does that track at all from your experience?Michael: Yeah. Yeah, absolutely. I'm just kind of flashing back to some war stories at Verizon, right? It was… I'd say very common that, once you've kind of addressed, well, these are the business problems we want to solve for and we're off to the races, right, we're going to build this cool thing. And then you deploy it, right [laugh], and then you forgot to account for backup, right? What's your disaster recovery plan? Do you have logging in place? Are you monitoring the thing effectively? Are your access controls accounted for?All those, kind of, tangential processes, but super-critical, right, when you think about, kind of, production systems, like, they have to be in place. So, it's absolutely true, right, and it's kind of definitely for just general availability, you need to be thinking about these things. And yeah, they almost always translate to that security piece of it as well, right, particularly with all the regulations that organizations are impacted with today. You really need to be thinking about, kind of, all these pieces of the puzzle, not just hey, let's build this thing and get it on running infrastructure and we're done with our work.Corey: A question that I've got for you—because I'm seeing a very definite pattern emerging tied to the overall macro environment, now, where after a ten-year bull run, suddenly a bunch of companies are discovering, holy crap, money means something again, where instead of being able to go out and gets infinite money, more or less, to throw at an AWS bill, suddenly, oh, that's a big number, and we have no idea what's in it. We should care about that. So, almost overnight, we've seen people suddenly caring about their bill. How are you seeing security over the past year or so? Has there been a similar awareness around that or has that not really been tied to the overall macro-cycle?Michael: Very good question, yeah. So unfortunately, security's often an afterthought, right, just like, kind of those things that support availability—probably going to get a little bit better ranking because it's going to support your customers and employees, so you're going to get budget and headcount to support that. Security, usually in the pecking order, is below that, right, which is unfortunate because [laugh] there can be severe repercussions with that, such as privacy impacts, or data breach, right, lost revenue, all kinds of things. But yeah, typically, security has been undercut, right? You're always seeking headcount, you need more budget.So, security teams tend to look to delegate security process out, right? So, you kind of see a lot of DevOps programs, like, can we empower engineers to run some of these processes and tooling, and then security, kind of, becomes the overseer. So, we see a lot of that where can we kind of have people satisfy some of these pieces. But then with respect to, like, security budgets, it is often security tools consolidation because a lot organizations tend to have a lot of things, right? So, security leaders are looking to scale that back, right, so they can work more effectively, but then also cut costs, which is definitely true these days in the current macroeconomic environment.Corey: I'm curious as well, to see what your take is on the interplay between cost and security. And what I mean by that is, I did the numbers once, and if you were to go into an AWS native environment, ignore third-party vendors for a second, just configure all of the AWS security services in your account, so the way that best practices dictate that you should, you're pretty quickly going to end up in a scenario where the cost of that outweighs that of the data breach that you're ostensibly trying to prevent. So—Michael: Yes.Corey: It's an infinite money pit that you can just throw everything into. So, people care about security, but they also care about cost. Plus, let's be very direct here, you can spend all the money on security and still lose. How do companies think about that now?Michael: A lot of leaders will struggle with, are we trying to be compliant or are we trying to be secure? Because those can be very different conversations and solutions to the problem. I mean, ideally, everybody would pursue that perfect model of security, right, enable all the things, but that's not necessarily cost-effective to do that. And so, most organizations and most security teams are going to prioritize their risks, right? So, they'll start to carve out, maybe these are all our internet-facing applications, these are the business-critical ones, so we're going to allocate more security focus to them and security spend, so [maybe we will be turn up 00:13:20] more security services to protect those things and monitor them.Then [laugh], unfortunately, you can end up with a glut of maybe internal applications or non-critical things that just don't get that TLC from security, unfortunately, for security teams, but fortunate for attackers, those things become attack targets, right? So, they don't necessarily care how you've prioritized your controls or your risk. They're going to go for the low-hanging fruit. So, security teams have always struggled with that, but it's very true. Like, in a cloud environment like AWS, yeah, if you start turning everything up, be prepared for a very, very costly cloud expense bill.Corey: Yeah, in my spare time, I'm working on a project that I was originally going to open-source, but I realized if I did it, it would cause nothing but pain and drama for everyone, of enabling a whole bunch of AWS misconfiguration options, given a set of arbitrary credentials, that just effectively try to get the high score on the bill. And it turned out that my early tests were way more successful than anticipated, and instead, I'm just basically treating it as a security vulnerability reporting exercise, just because people don't think about this in quite the same way. And again, it's not that these tools are necessarily overpriced; it's not that they aren't delivering value. It's that in many cases, it is unexpectedly expensive when they bill across dimensions that people are not aware of. And it's one of those everyone's aware of that trap the second time type of situations.It's a hard problem. And I don't know that there's a great way to answer it. I don't think that AWS is doing anything untoward here; I don't think that they're being intentionally malicious around these things, but it's very vast, very complex, and nobody sees all of it.Michael: Very good point, yes. Kind of, cloud complexity and ephemeral nature of cloud resources, but also the cost, right? Like, AWS isn't in the business of providing free service, right? Really, no cloud provider is. They are a business, right, so they want to make money on Cloud consumption.And it's interesting, I remember, like, the first time I started exploring Kubernetes, I did deploy clusters in cloud providers, so you can kind of tinker and see how these things work, right, and they give you some free credits, [a month of credit 00:15:30], to kind of work with this stuff. And, you know, if you spin up a [laugh] Kubernetes cluster with very bare bones, you're going to chew through that probably within a day, right? There's a lot of services in it. And that's even with defaults, which includes things like minimal, if anything, with respect to logging. Which is a problem, right, because then you're going to miss general troubleshooting events, but also actual security events.So, it's not necessarily something that AWS could solve for by turning everything up, right, because they are going to start giving away services. Although I'm starting to see some tide shifts with respect to cybersecurity. The Biden administration just released their cybersecurity strategy that talks about some of this, right? Like, should cloud providers start assuming more of the responsibility and accountability, potentially just turning up logging services? Like, why should those be additional cost to customers, right, because that's really critical to even support basic monitoring and security monitoring so you can report incidents and breaches.Corey: When you look across what customers are doing, you have a different problem than I do. I go in and I say, “Oh, I fixed the horrifying AWS bill.” And then I stop talking and I wait. Because if people [unintelligible 00:16:44] to that, “Ooh, that's a problem for us,” great. We're having a conversation.If they don't, then there's no opportunity for my consulting over in that part of the world. I don't have to sit down and explain to people why their bill is too high or why they wouldn't want it to be they intrinsically know and understand it or they're honestly not fit to be in business if they can't make a strategic evaluation of whether or not their bill is too high for what they're doing. Security is very different, especially given how vast it is and how unbounded the problem space is, relatively speaking. You have to first educate customers in some ways before attempting to sell them something. How do you do that without, I guess, drifting into the world of FUD where, “Here are all the terrible things that could happen. The solution is to pay me.” Which in many cases is honest, but people have an aversion to it.Michael: Yeah. So, that's how I feel [laugh] a lot of my days here at Sysdig. So, I do try to explain, kind of, these problems in general terms as opposed to just how Sysdig can help you solve for it. But you know, in reality, it is larger strategic challenges, right, there's not necessarily going to be one tool that's going to solve all your problems, the silver bullet, right, it's always true. Yes, Sysdig has a platform that can address a lot of cloud security-type issues, like over-permissioning or telling you what are the actual exploitable workloads in your environment, but that's not necessarily going to help you with, you know, if you have a regulator breathing down your neck and wants to know about an incident, how do you actually relay that information to them, right?It's really just going to help surface event data, stitch things together, that now you have to carry that over to that person or figure out within your organization who's handling that. So, there is kind of this larger piece of, you know, governance risk and compliance, and security tooling helps inform a lot of that, but yeah, every organization is, kind of, have to answer to [laugh] those authorities, often within their own organization, but it could also be government authorities.Corey: Part of the challenge as well is that there's—part of it is tooling, absolutely, but an awful lot of it is a people problem where you have these companies in the security space talking about a variety of advanced threats, of deeply sophisticated attackers that are doing incredibly arcane stuff, and then you have the CEO yelling about what they're doing on a phone call in the airport lounge and their password—which is ‘kitty' by the way—is on a Post-It note on their laptop for everyone to see. It feels like it's one of those, get the basic stuff taken care of first, before going down the path to increasingly arcane attacks. There's an awful lot of vectors to wind up attacking an infrastructure, but so much of what we see from data breaches is simply people not securing S3 buckets, as a common example. It's one of those crawl, walk, run types of stories. For what you do, is there a certain level of sophistication that companies need to get to before what you offer starts to bear fruit?Michael: Very good question, right, and I'd start with… right, there's certainly an element of truth that we're lagging behind on some of the security basics, right, or good security hygiene. But it's not as simple as, like, well, you picked a bad password or you left the port exposed, you know? I think certainly security practitioners know this, I'd even put forth that a lot of engineers know it, particularly if they're been trained more recently. There's been a lot of work to promote security awareness, so we know that we should provide IDs and passwords of sufficient strength, don't expose things you shouldn't be doing. But what tends to happen is, like, as you build monitoring systems, they're just extremely complex and distributed.Not to go down the weeds with app designs, with microservices architecture patterns, and containerized architectures, but that is what happens, right, because the days of building some heavyweight system in the confines of a data center in your organization, those things still do happen, but that's not typically how new systems are being architected. So, a lot of the old problems still linger, there's just many more instances of it and it's highly distributed. So it, kind of, the—the problem becomes very amplified very quickly.Corey: That's, I think, on some level, part of the challenge. It's worse in some ways that even the monitoring and observability space where, “All right, we have 15 tools that we're using right now. Why should we talk to yours?” And the answer is often, “Because we want to be number 16.” It's one of those stories where it winds up just adding incremental cost. And by cost, I don't just mean money; I mean complexity on top of these things. So, you folks are, of course, sponsoring this episode, so the least I can do is ask you, where do you folks start and stop? Sysdig: you do a lot of stuff. What's the sweet spot?Michael: Yeah, I mean, there's a few, right, because it is a larger platform. So, I often talk in terms of full lifecycle security, right? And a lot of organizations will split their approaches. We'll talk about shift left, which is really, let's focus very heavily on secure design, let's test all the code and all the artifacts prior to delivering that thing, try to knock out all quality issues, right, for kind of that general IT, but also security problems, which really should be tracked as quality issues, but including those things like vulnerabilities and misconfigs. So, Sysdig absolutely provides that capability that to satisfy that shift left approach.And Sysdig also focuses very heavily on runtime security or the shield right side of the equation. And that's, you know, give me those capabilities that allow me to monitor all types of workloads, whether they're virtual machines, or containers, serverless abstractions like Fargate because I need to know what's going on everywhere. In the event that there is a potential security incident or breach, I need all that information so I can actually know what happened or report that to a regulatory authority.And that's easier said than done, right? Because when you think about containerized environments, they are very ephemeral. A container might spin up a tear down within minutes, right, and if you're not thinking about your forensics and incident response processes, that data is going to be lost [unintelligible 00:23:10] [laugh]. You're kind of shooting yourself in the foot that way. So yeah, Sysdig kind of provides that platform to give you that full range of capabilities throughout the lifecycle.Corey: I think that that is something that is not fully understood in a lot of cases. I remember a very early Sysdig, I don't know if it was a demo or what exactly it was, I remember was the old Heavybit space in San Francisco, where they came out, it was, I believe, based on an open-source project and it was still taking the perspective, isn't this neat? It gives you really in-depth insight into almost a system-call level of what it is the system is doing. “Cool. So, what's the value proposition for this?”It's like, “Well, step one, be an incredibly gifted engineer when it comes to systems internals.” It's like, “Okay, I'll be back in five years. What's step two?” It's like, “We'll figure it out then.” Now, the story has gone up the stack. It originally felt a little bit like it was a solution in search of a problem. Now, I think you have found that problem, you have clearly hit product-market fit. I see you folks in the wild in many of my customer engagements. You are doing something very right. But it was neat watching, like, it's almost for me, I turned around, took my eye off the ball for a few seconds and it went from, “We have no idea of what we're doing” to, “We know exactly what we're doing.” Nice work.Michael: Yeah. Yeah. Thanks, Corey. Yeah, and there's quite a history with Sysdig in the open-source community. So, one of our co-founders, Loris Degioanni, was one of the creators of Wireshark, which some of your listeners may be familiar with.So, Wireshark was a great network traffic inspection and observability tool. It certainly could be used by, you know, just engineers, but also security practitioners. So, I actually used it quite a bit in my days when I would do pen tests. So, a lot of that design philosophy carried over to the Sysdig open source. So, you're absolutely correct.Sysdig open source is all about gathering that sys-call data on what is happening at that low level. But it's just one piece of the puzzle, exactly as you described. The other big piece of open-source that Sysdig does provide is Falco, which is kind of a threat detection and response engine that can act on all of those signals to tell you, well, what is actually happening is this potentially a malicious event? Is somebody trying to compromise the container runtime? Are they trying to launch a suspicious process? So that those pieces are there under the hood, right, and then Sysdig Secure is, kind of, the larger platform of capabilities that provide a lot of the workflow, nice visualizations, all those things you kind of need to operate at scale when you're supporting your systems and security.Corey: One thing that I do find somewhat interesting is there's always an evolution as companies wind up stumbling through the product lifecycle, where originally it starts off as we have an idea around one specific thing. And that's great. And for you folks, it feels like it was security. Then it started changing a little bit, where okay, now we're going to start doing different things. And I am very happy with the fact right now that when I look at your site, you have two offerings and not two dozen, like a number of other companies tend to. You do Sysdig Secure, which is around the security side of the world, and Sysdig Monitor, which is around the observability side of the world. How did that come to be?Michael: Yeah, it's a really good point, right, and it's kind of in the vendor space [laugh], there's also, like, chasing the acronyms. And [audio break 00:26:41] full disclosure, we are guilty of that at times, right, because sometimes practitioners and buyers seek those things. So, you have to kind of say, yeah, we checked that box for CSPM or CWPP. But yeah, it's kind of talking more generally to organizations and how they operate their businesses, like, that's more well-known constructs, right? I need to monitor this thing or I need to get some security. So, lumping into those buckets helps that way, right, and then you turn on those capabilities you need to support your environment, right?Because you might not be going full-bore into a containerized environment, and maybe you're focusing specifically on the runtime pieces and you're going to, kind of, circle back on security testing in your build pipeline. So, you're only going to use some of those features at the moment. So, it is kind of that platform approach to addressing that problem.Corey: Oh, I would agree. I think that one of the challenges I still have around the observability space—which let's remind people, is hipster monitoring; I don't care what other people say. That's what it is—is that it is depressingly tied to a bunch of other things. To this day, the only place to get a holistic view of everything in your AWS account in every region is the bill. That somehow has become an observability tool. And that's ridiculous.On the other side of it, I have had several engagements that inadvertently went from, “We're going to help optimize your cost,” to, “Yay. We found security incidents.” I don't love a lot of these crossover episodes we wind up seeing, but it is the nature of reality where security, observability, and yes, costs all seem to tie together to some sort of unholy triumvirate. So, I guess the big question is when does Sysdig launch a cost product?Michael: Well, we do have one [laugh], specifically for—Corey: [laugh]. Oh, events once again outpace me.Michael: [laugh]. But yeah, I mean, you touched on this a few times in our discussion today, right? There's heavy intersections, right, and the telemetry you need to gather, right, or the log data you need to gather to inform monitoring use cases or security use cases, a lot of the times that telemetry is the same set of data, it's just you're using it for different purposes. So, we actually see this quite commonly where Sysdig customers might pursue, Monitor or Secure, and then they actually find that there's a lot of value-add to look at the other pieces.And it goes both ways, right? They might start with the security use cases and then they find, well, we've over-allocated on our container environments and we're over-provisioning in Kubernetes resources, so all right, that's cool. We can actually reduce costs that could help create more funding to secure more hosts or more workloads in an environment, right? So it's, kind of, show me the things I'm doing wrong on this side of the equation, whether that's general IT security problems and then benefit the other. And yeah, typically we find that because things are so complex, yeah, you're over-permissioning you're over-allocating, it's just very common, rights? Kubernetes, as amazing as it can be or is, it's really difficult to operate that in practice, right? Things can go off the rails very, very quickly.Corey: I really want to thank you for taking time to speak about how you see the industry and the world. If people want to learn more, where's the best place for them to find you?Michael: Yes, thanks, Corey. It's really been great to be here and talk with you about these topics. So, for me personally, you know, I try to visit LinkedIn pretty regularly. Probably not daily but, you know, at least once a week, so please, by all means, if you ever have questions, do contact me. I love talking about this stuff.But then also on Sysdig, sysdig.com, I do author content on there. I speak regularly in all types of event formats. So yeah, you'll find me out there. I have a pretty unique last name. And yeah, that's kind of it. That's the, I'd say the main sources for me at the moment. Don't fall for the other Isbitski; that's actually my brother, who does work for AWS.Corey: [laugh]. That's okay. There's no accounting for family, sometimes.Michael: [laugh].Corey: I kid, I kid. Okay, great company. Great work. Thank you so much for your time. I appreciate it.Michael: Thank you, Corey.Corey: Mike Isbitski, Director of Cybersecurity Strategy at Sysdig. I'm Cloud Economist Corey Quinn and this has been a promoted guest episode brought to us by our friends at Sysdig. If you've enjoyed this podcast, please leave a five-star review on your podcast platform of choice, whereas if you've hated this podcast, please leave a five-star review on your podcast platform of choice along with an angry, insulting comment from your place, which is no doubt expensive, opaque, and insecure, hitting all three points of that triumvirate.Corey: If your AWS bill keeps rising and your blood pressure is doing the same, then you need The Duckbill Group. We help companies fix their AWS bill by making it smaller and less horrifying. The Duckbill Group works for you, not AWS. We tailor recommendations to your business and we get to the point. Visit duckbillgroup.com to get started.

As a special reflection for this Holy Week, we chose a reading from Fr., Thomas Acklin‘s book “The Passion of the Lamb.”  In particular we reflected on the chapter entitled “Behold His Face.” As one participant in tonight‘s group stated: “This reflection is a gem!”  I agree. It is a rarest of gems and I'm grateful to Fr. Tom for writing it and the entire book. While small, it has had an incalculable effect upon me and I hope for all who listen to this podcast.  What Fr. Tom seeks to do is to open our minds and our hearts to the truth revealed in the Passion of Christ. So often we approach this mystery bound by the limits of our reason and our sin. Fr. Tom challenges us to allow ourselves to be guided and drawn into the mystery by faith; to comprehend what God has revealed to us and what is beyond the measure of man's mind.  Many Christians throughout the centuries have struggled with the mystery of the Cross and the reality of our Lord's suffering. Theologically, the human mind, almost in a form of resistance, intellectually and spiritually, tries to hold on to the notion of God being impassible. We are comfortable with notions of God being all powerful and all knowing. What we have trouble understanding and what we are often unwilling to embrace is the reality of a God who is Omni-kenotic and Omni-vulnerable. What Fr. Tom wants us to reflect upon is a God in whom we see and attribute not human deficiencies and sinfulness, hatred, ignorance, or illness. Rather, he wants us to contemplate and attribute to God in an infinite and perfect way the good qualities that we have in a finite and even deficient way. Thus, Fr. Tom says, rather than being impassible, incapable of feeling or having passion as we do as human beings, it would be more accurate to say that not only Christ but all three persons of the Trinity are infinitely caring, infinitely affected by us; Omni-passible. To believe such a thing is to understand that “at the height of his agony, he could see, not only the people who stood before him, jeering or weeping, but all the people of all time. He saw us in our loving and in our refusing to love, our sinning and our repenting. At the same eternal moment, he took on all the moments of every life and death. He could be the infinite love of God in person to each human being who ever lived, and who will ever live.”  May God bless us this Holy Week with the gift of faith to see this love, this perfect vulnerability, even in the smallest measure. --- Text of chat during the group: 00:05:42 FrDavid Abernethy: https://mcusercontent.com/c38acab568d650f7ef65f39df/files/679d1720-7a17-e9b4-7355-2bd4ae5431fd/Behold_His_Face_Booklet.pdf   00:14:52 Cath Lamb: I don't have microphone or camera

In this episode, we welcome House Canary's Director of Research, Brandon Lwowski to look at what has been happening in the real estate market over the last years and where we are headed as an industry. We discuss the health of the real estate market, the residual effects of the response to COVID-19, and the main challenges facing investors today. Brandon Lwowski built his career after studying Computer Science Mathematics at The University of Texas at San Antonio. In his role at HouseCanary as Director of Research, Brandon distills what is happening in the real estate market through data analytics and machine learning to help investors make more informed decisions about their portfolios. Links: https://www.housecanary.com/ https://www.linkedin.com/in/brandon-lwowski/ --- Transcript Before we get into the episode, here's a quick disclaimer about our content. The SFR show is for informational purposes only, and is not intended as investment advice. The views, opinions, and strategies of the hosts and the guests are their own and should not be considered as guidance, from Roofstock. Make sure to run your own numbers, make your own independent decisions and seek investment advice from licensed professionals.   Michael: Hey, everyone, welcome to an episode of the SFR show, the place where you get all of your up to date SFR investing information. I'm Michael Albaum, and today my guest is Brandon Lwowski, the director of Research over HouseCanary and he's gonna be talking to us about all of the things that have been going on in the market over the last several years and months, and how we can use that information going forward. So let's get into it.   Hey, Brandon, what's going on? Thanks so much for taking the time to come jump in chat with me today. Appreciate it, man.   Brandon: No, of course, it's good to be here to get an opportunity to discuss the real estate market for sure.   Michael: Yeah, I'm super excited. So you're the director of Research at HouseCanary. Give us all just a quick little bit of insight background on who you are and what house canary is and what they do as a company.   Brandon: Yeah, definitely. So HouseCanary, you know, it's basically a national brokerage and so it's really known for its real estate valuation, technology and accuracy. This company has been around since 2013. It was founded by Jeremy Sicklick, our CEO and our Chief of Research, Chris Stroud, kind of off of the 2008 housing crisis, they did decide to form this company to kind of help speed up the transactions and speed up and really gain knowledge and just competence in the real estate market through using analytics machine learning to provide 100 and 14 million valuations on properties as well as 91 million rental valuations. So if you think of how scary it's built around the analytics and valuations of the United States real estate market.   Michael: It was at $114 million valuations that you said since it since inception.   Brandon: No, that's monthly, we produce 114 million property valuations. Of course, the 114 million is a subset of you know, every property in the United States and that repeated monthly, but we train this very complex machine learning model AI model to produce 114 million property valuations.   Michael: That's incredible. Well, I want to come back to HouseCanary as a company here in a minute. But I want to first start by asking you, Brandon, because it is so analytics and data driven, what is it that HouseCanary as a company and you as an as the director of research are seeing in the numbers in the data with regard to just where we are in the market, there's so much chatter about market cycles and ups and downs and bubbles, give us a little bit of insight to what are the numbers and facts supporting where we are right now, as we're recording this brand new into the new year 2023.   Brandon: I think kind of the one of the biggest headlines to kind of drive home right now, especially in the market, we have this unique combination of these elevated interest rates and you know, the slow buying season that we typically see during the winter months, this has really impacted across the board, our new inventory coming into the market, our new listings, listings going under contract, all of these metrics that we typically look at to understand the health of the market and the health of the real estate market, have really had significant declines year on a year over year basis, that's across the board inventory listings under contract, the Feds kind of you know, their fourth straight 75 basis point interest rate increase, you know, as the thing is, the fourth month straight or the fourth, fourth one straight, has really had that negative impact on net inventory. But this is just providing more evidence that you know, supply of homes is still squeezed and it's remaining negative over time, we've kind of seen this trend since August, right where our supply of affordable housing and actually all housing in the market has really continued to drop and this is basically you know, the biggest driving factor here is that interest rates shot really driving down these new listings volumes to like a multiyear low since pre you know, I don't use the word pre pandemic because you know, we're still in the pandemic, but that pre pandemic peaks we'll call them we're seeing you know, all its multi-year lows in terms of new listings, everything going on the real estate market. The biggest picture here is even as these interest rates come up, our supply just remains extremely negative and still going in a downward trajectory.   Michael: And when you say downward trajectory is that From 12 months prior, or is that from the prior month?   Brandon: We're looking at a year a year basis right now. If you think about the month over month basis, we are still seeing declines. But when we're talking about these multi year lows in terms of net new listings, on the purchase side of the market, we've reached those multi year lows. I think, you know, the reason why this supply crisis is also happening right now is, in this current real estate environment, it's really difficult to convert homeowners and current renters and convert them into future homebuyers, right. In this elevated interest, interest rate market, it just doesn't make sense financially for a lot of people to enter the market, you think of this large group of, of homebuyers that purchase homes at record low interest rates, they refinanced during the peak of a call it the peak of the refinance, boom, that happened during the pandemic and for them to reenter the market, it just doesn't make financial sense for them. So in order to move out of their current home and into a new loan, they're going to be paying a higher premium for the same quality of home. So they're available availability to spend money has definitely decreased and I really don't see this inventory shortage, kind of relieving itself or beginning to increase well into, you know, the first quarter, second half or first half of 2023, the supply just remains super squeezed.   Michael: Okay and so that, like the supply aspect is, I'm guessing one ingredient in the recipe, so to speak, what are some of the other things that you're looking at, and that you're seeing, to give you an indicator of where we're headed and where we are currently.   Brandon: Right. So I think so the supply is, has been squeezed, I think since COVID, there's been a really tight squeeze on the flat supply side of the market. But with those low interest rates that were happening, I mean, 1- 2% interest rates, people were getting their home loans that the demand for property shot up, which is why we really saw that two, three years of just record breaking price growth and the real estate market. Now we're looking at the demand side, and we're actually in the seventh consecutive month of double digit declines in on a year over year basis, we're looking at the listings that are coming under contract in the market. So if you look at inventory as a supply of new listings coming in, if we look at listings of those listings, and the existing market, this existing supply, existing supply, listings under contract is still seven consecutive months of double digit declines since November, are all of our data right now, it's kind of up to that first week of December 2, so we kind of think of it as, as of November. This is this kind of is the driving force behind this is, you know, we've never seen this kind of seventh consecutive month of double digit. So it's kind of driving a lot of fear into homebuyers and home owners and the way we kind of know that this is not normal, it's kind of beyond the typical seasonality we'd expect during the cold winter months to have seven consecutive months, this kind of uncertainty in the market around interest rates, economic downturn, the inflation, they just continue to force homeowners and would be buyers, you know, to play the waiting game, they're, they're gonna sit in the sidelines, they're gonna stay away from the market and so they're a little more competent in in where this kind of roller coaster is going.   Michael: As I'm thinking about such a visual thinker. I'm thinking about this as almost like a race to the bottom in a sense of like supply versus demand once because it sounds like they're almost moving in lockstep negatively, we were having a reduction in supply, but we also have a reduction in demand and once right is that is that the right way to think about it?   Brandon: The demand has definitely began to decrease or is decreasing at a faster rate than supply because supply has been squeezed since the pandemic whenever the shutdowns happened. People just stop selling houses. They stopped listing their home so the supply side of the market has been squeezed since the shutdown the pandemic. The demand side due to the interest rate hikes the economic uncertainty, that's where we're really seeing the decrease on the supply side where the decreases are coming from. So even though you know supply is always been net always been tight. We've been tight recently in recent years. A lot of the continued decrease on supply side is actually coming from net new listings so people aren't putting listings on the market right now. For the reason that we discussed earlier. It's hard to get homeowners back into the game. They're actually down around 25% on a year over year basis, in terms of like how many new listings are coming into the market, but even a bigger piece here is on the supply side is our removals of listings are up 65% on a year over year basis. So houses that were listed last month six are being removed from the market further impacting supply, while supply has been remained squeezed like very, very tight supply of properties over the years, there still is a decrease in net new listings, and also an increase in removal. So in that supply is being affected. But when it's so squeezed already, that that impact in the market will not be as significant as the impact of a decreasing demand side of the market.   Michael: Yeah and that makes total sense and so what are you seeing with regard to sale, as opposed to sale of percent of this price and then also days on market?   Brandon: Yeah. So I think some other key indicators, the market, you kind of just discussed, you know, we have days on market, I think price lists ratio is important, I think, the median price, right, the time series of how is price behaving in this environment, all important and understanding kind of the overall health of the market and I kinda like to go with the big one first, in my opinion, which is the median price, right? Where is the market going? I kind of macro at a national scale. The, if you look at the year over year basis, median price of all single family listings, right, so single family dwellings, that those are actually up 10%, on list prices, and actually up 2% in terms of actual close prices. So even though we're seeing the storyline of these prices really starting to decline and kind of freefall, we're still seeing as a year over year basis, because we hit such a huge peak in the middle of 2022. We're still up year over year, by those two percentage I meant mentioned. On a month over month basis that compared to last month, we are slightly down, but it's very, very small. We're down around one and a half percent on listings and down and less than half a percent on close prices. So we see a lot of the storylines and the headlines across the news, that these prices are falling drastically. We're in a deep decline. The roller coaster rails are off and we're down to 2008 again, but just looking at the data alone without any sort of human interjection or opinions. I'm not an economist, I'm a data scientist. But by heart, I'm just looking at the data because we had such a high peak in the middle of 2022, in terms of the median house prices were still up year over year and on a month over month basis, the declines in price are very, very miniscule, to what we're kind of hearing in the media. So that's one thing, right? The median price is definitely a driving factor. Everyone's concerned about like, what am I going to get for my property? Where's the trend of our nationwide real estate market heading and even though we're in a slight downtick month, over month, if you look at long term, we're still up 10% on listings and up, you know, 2% on closed prices.   Michael: It seems like there has been so much resiliency, if we're seeing such a miniscule price reduction month over month and year over year, there seems to be a lot of resiliency to interest rate increases for folks, and that they're still closing transactions, even at this much higher interest rates, and they're not saving a lot or really anything at all, in terms of the price that they're paying out the door.   Brandon: Right, I think what's causing these prices to, I don't wanna say remain elevated, but kind of not declining at the pace that we would expect is that tight supply. Now, we're still a few months probably away from seeing how this kind of mass layoff and technology could affect the real estate market. Because, in my opinion, what's really going to drive these prices down is when we see supply, increase at levels that the demand has decreased and that imbalance in the market is what will really drive those prices down and the reason why kind of refer to that technology, layoff if that same style, that same volume of layoffs, hits other sectors of employment, then we're going to see defaults and people need to give up their homes because they can't afford it anymore. So unless something in outside of the real estate market really drives the demand. I'm sorry the supply side of the market to escalate at a very fast rate, that safety net is there to kind of keep our prices from really crashing, like we saw in 2008. We don't have the same supply that we saw in 2008. So we're kind of have that safety net there. Unless like I said, something really drives that unemployment up and forces people to default and give up their homes or sell their homes because they can't afford the mortgage anymore.   Michael: But it's interesting, because from all the news that I've been hearing, and correct me if I'm wrong, maybe you've been hearing, the unemployment rate is super low. Like there just doesn't seem to be those mass layoffs that we saw in the tech industry, yet anyhow, affecting so much of the so many other industries. So it doesn't feel as imminent.   Brandon: 100% right, I'm hoping I mean, just for the health of our economy, I'm hoping that that mass layoff doesn't reach other sectors and I hope that we're done with majority of it. But we're probably a month or two away from really understanding did that actually have an impact on our median, price per square foot or median close price of a property and then we can track those defaults, and those the supply over the next few months to see if that really impacted the real estate market or not.   Michael: And that makes total sense. We'll talk this Brandon about those other two factors that you mentioned the price to list ratio, and then the days on market.   Brandon: The price to list ratio has actually been on a pretty big decline. I think back in May 2022, it may have been June or May, I think we're at a multiyear high of around 102%. So most properties, were selling 100 or 2% higher than the list price, which means that it's definitely a seller's market, right. If I if I can list my house for X amount of dollars, I know I'm gonna get 102% return, I mean, I happen to present a 2% return on that is definitely a seller's market. We actually for the first time in about mid-August of last year, we're now down below 100. So that's just an indicator that the markets kind of switched right now buyers kind of have that power and that ratio now stands around 98%, which is kind of the levels before COVID emerged, and actually the lowest number since the first half of 2020. So we're not we went from a high of 102 in May to now we're down to about 98 which is definitely a key indicator that buyers now have more power than the seller's because of you know, just multiple aspects that we've been talking about the high interest rates buyers be a little more choosy. Even though the supply is down sewer buyers, there's not enough buyers in the pool to compete with me anymore. So I have a little bit more pool, which is why we're seeing that sale to list price or price to list ratio, starting to decrease. That kind of in parallel, what we see with that is to kind of tell that same story that we're now entering that buyers' market, even though demand is low, if you look at the volume of price drops, right, think about how many times a listing comes on the market for 100k. It sits there for 30 days, they come back and they say hey, you know what, let's list it for 95 maybe we can get more buyers, those price drops in terms of volume are actually up 142% year over year since the last time. It's just more evidence that buyers now because demand is so is so squeezing this high interest rate environment, they get more power listings are staying on the market longer list to or sale to list price ratio is down and then but yet the because supply still squeezed, we're not really seeing a huge impact that we're kind of seeing in the news right now, on the actual median price of all listings.   Michael: Brandon, just out of curiosity, I think I remember if my memory serves me correctly, which it often doesn't, but like in the height of 2022, the max or the highest median home price in the country was like 395k. But do you happen to recall what that number was and maybe what it is now today?   Brandon: Yeah, so if you look at the peak of 2022. So kind of that halfway mark, I think it was right around the ending of H 122. The actual median price is actually higher, at least according to our data, right? The data that we have availability to our actual median price was actually above 400,000. We're sitting right around like 420,000 was kind of that median price for closed listings for active listings was actually even higher than that. So for closed listings were around that for 120,000 range, right now as of the first week of December is kind of our data cut off. Right now in terms of the data that I'm giving you, we're sitting right around $380,000 as the kind of median price per square foot, I'm sorry, median price of closed listings, it sounds dramatic, and we go from, you know, that 420 ish down to three, it's a pretty big drop. But as you look at the entire time series from, we'll call it the pandemic, the start of the closed downs, all the way to today, if you bought a house, during those pandemic years, you're still doing really well in terms of the amount of equity, it's still in your home prices haven't dropped that drastically to where you're now upside on your loan, you're still well above you know, what you bought the house in, during the bottom of the pandemic years, what's really going to cause kind of some worry, and headaches is these people who kind of bought later in the year, kind of towards the end, or middle of 2022. Now, they're beginning to worry the most because they didn't have that same amount of cushion that these homeowners bought when they don't worry about houses a year or two years ago. So that number does seem like a big decrease. But if you look at the longevity of the time series of the pandemic eight pandemic shutdowns to now, you're still up quite a bit in terms of percent and you have a large cushion before you even have to worry about being upside down in a mortgage or, you know, losing a large amount of equity in your property.   Michael: Does the data give us any indicators as to what's coming down the pike because obviously, data is rear looking. But how can we use that to be forward looking or is there a way to be?   Brandon: Yeah, so I think you're talking about forward looking, you know, the next 6,12,18 months. If you look back slightly, we hit this topic quite a bit. It's a big topic right now in real estate is these large interest rate hikes. If you look at the timeline, the time series of the real estate market in terms of medium price terms of you know, list to sale rate of sale to price ratio, you look at, you know, the days on market, it seems that with the large amount of growth that we experienced in two years, you know, record growth, that was actually able to absorb a lot of the impact that people would assume, continuing to month over month raise this interest rate to higher and higher levels, they assumed that it was going to impact the real estate market at much a much quicker, much faster way. So then they can stop, right, the goal of raising interest rates tend to raise them forever. They're just raising them until they kind of see the market growth kind of settled down and adjust and kind of normalize. But it's kind of shocking when you think about how much and how quickly that interest rate rose and until a few months back. I mean, most of 2022 there was very little impact from those rounds of interest rates. So it's one thing that we can we can learn as, as we saw record growth, even that dramatic increase really did not impact the real estate market as we thought it would. Secondly, what's really kind of driving any sort of kind of negative view of the real estate market right now around this interest rate, is you gotta think of like purchase power of our homebuyers, right?   We didn't see salaries raised at the same rate as the real estate market, we didn't see household income raise at the same rate as real estate. So the really big question here and the kind of the, you know, the driving force here is the purchase power of homebuyers. We actually seeing and this is from Freddie Mac, I believe a 32% decrease in purchase power, based on this 30 year, you know, FRM, that's given the same monthly payments for a loan made at the end of 2021. So we're really seeing a decrease in what homebuyers can afford and that combined with hopefully the Fed has definitely signaled smaller rate hikes in the future. We're hoping that housing fundamentals can hopefully come back to a quote unquote normal seasonality cycle and the expected returns, but into early 2023. I think we're still going to see you know, a real estate market that's just characterized by this continued tight squeeze on supply tight squeeze on demand. With the exception of what we discussed earlier, which was a major economic event causing mass layoffs or firings, then I'm thinking early 2023 is going to be characterized the same kind of, of patterns we're seeing now, which is tight supply, shrinking demand, days on market, increasing. median price is slowly decreasing month over month, until we see hopefully towards the second half of 2023, a market that's brought back to its normal seasonality and its normal housing market fundamentals.   Michael: Brandon, I want to be super respectful of your time and get you out of here, man. But before I do if people want to learn more about you and the research team HouseCanary has a whole services that y'all provide. Where's the best place for them to do that or get a hold of someone?   Brandon: Yeah, I would definitely just go to https://www.housecanary.com/ . From there, you can get a list of all the products services, there's probably people on our company that can explain the better business use cases and appear researcher, I'm all about the data. But if you go to https://www.housecanary.com/, there's plenty of people to contact through there and also, I'll attach my email. I'll pass it on to you, Michael after this. So you can share it with the listeners.   Michael: Thank you so much for taking the time. This was super informative and definitely again, curious to see how things all pan out.   Brandon: Yeah, stay up, same tune. I think next week, our new market pulse comes out as well. So if you're interested in different states and how the market is performing, and also at the national level, it's a free report and that report will be valid all the way up into the end of December. So it will have kind of our December numbers added to that report and you can see those trends going on there as well. So usually is dispersed on our website. Also LinkedIn, if you follow HouseCanary on LinkedIn, that report is shared monthly for free and you can see all those metrics that we talked about updated on a monthly cadence. So you can kind of have competence in your decision making process.   Michael: Love it, love it. We'll definitely check that out as well. Well, thanks again, Brandon. Appreciate you and we'll chat soon.   Brandon: Appreciate it, thanks, Michael.   Michael: All right, everyone. That was our show a big thank you to Brandon for coming on and dropping so much knowledge, facts, data and statistics on us to help us guide our investing through these kind of tumultuous times. As always, if you enjoyed the episode, we would love to hear from you all ratings and reviews are always appreciated as are comments with additional topic ideas that you are interested in learning about. We look forward to seeing on the next one. Happy investing…

This episode features the masterminds behind Roofstock OnChain, Geoffrey Thompson, and Sanjay Raghavan. We discuss the revolutionary product of tokenized real estate, how it works, the problems it solves, the incredible scaling power of this new technology, and who it is for.   Geoff Thompson built his career at top-tier law firms practicing in the areas of capital markets, banking and credit, structured finance, private equity, and cross-border transactions. Geoff's prior role at Roofstock was as general counsel where he advised on partnerships, product innovation, fundraising, deal structuring, real estate matters, securities law, international expansion, and all other legal and compliance matters. Sanjay Raghavan is the Head of Web3 Initiatives of Roofstock onChain where he leads the real estate investing platform's blockchain initiative. After being accepted into Cypher Accelerator, Sanjay continues to build connections between real estate investing and blockchain. Sanjay is also an advisor at Pudgy Penguins NFTs. Roofstock onChain is the Web3 subsidiary of Roofstock, the leading digital real estate investing platform for the $4 trillion single-family rental home sector. Relevant links: https://mobile.twitter.com/eth_sanjay https://mobile.twitter.com/_gthomps     Before we jump into the episode, here's a quick disclaimer about our content. The Remote Real Estate Investor podcast is for informational purposes only, and is not intended as investment advice. The views, opinions and strategies of both the hosts and the guests are their own and should not be considered as guidance from Roofstock. Make sure to always run your own numbers, make your own independent decisions and seek investment advice from licensed professionals.   Michael: What's going on everyone, Michael Albaum here from the Remote Real Estate Investor, we're actually in the midst of a pivot and so we're changing the name of our show to be the SFR show. Reason being is we really want to double down on the single family rental industry as a whole and so we wanted to pick a title and a name that's reflective of that. So join us here on the new show, the SFR show where we're gonna be bringing you everything you need to know about SFR investing from what the market is doing at the micro and macro level, to what the factors are influencing and changing the space. So let's kick it off with this first episode. We hope you enjoy.   Hey everyone, welcome to the SFR show. We're going to be talking today with Geoff and Sanjay on Roofstocks web three team about cryptocurrency tokenization, alternative investments, portfolio theory and risk management just to name a few. So with that, let's just jump straight into it.   Geoff and Sanjay, good to see you both. How have you been?   Sanjay: Great. Good to see you again and, Michael, you look really different from the last time we spoke and so much younger and much more refreshed, I think after the holidays.   Michael: Thank you. Yeah, I came back from the holidays ready, you know, cut, put some 10 pounds on and took 10 years off my face. So I'm doing the best I can, so…   Geoff: That's it.   Michael: That's it. So for anyone who didn't catch our prior episode together, I'd love if you could give a really quick intro who you guys are and what is it that you're doing here at Roofstock.   Geoff: So yeah, we are co leading the web three business unit every stock. I'm Geoff Thompson, this is Sanjay Raghavan and we have been at Roofstock for several years and over the last year, we've spent all of our time focusing on how to use blockchain and web three technology to improve the real estate transaction process and to generally make single family rentals more accessible and asset class.   Michael: And for anyone who isn't familiar with what web three is definitely go back and give that prior episode a listen. Sanjay gets into it and kind of what the technology is. So I'm curious gents where we are today, where are you seeing blockchain and tokenization playing a role in the single family space.   Sanjay: So first of all, we had a sale of our Genesis property in mid-October. So for your audience who may have read about it on crypto Twitter or on media publications, that was a very successful launch of this product, we spent about 10 months working on legal and tax analysis of how to structure this product so that it would be compliant and when somebody was purchasing this property in a web three as a web three home, they were in fact getting, you know, ownership of the underlying assets. So that took us about 10 months to engineer and the sale. The first sale that happened in mid-October was a huge success, went viral on crypto Twitter, and was picked up by all the leading crypto and non-crypto publications and the reason for that was because for the first time, what really happened in crypto and blockchain, which, if your followers are looking at the market, in general, this has been a really particularly bad year in the industry for the stock market. Inflation has been at a 40 year high feds have been drastically, like we went to 475 basis point interest rate hike and so, you know, we're going through this very tumultuous time in the industry and crypto has not been an exception, either, they've, you know, Krypto has been having an unprecedented winter, where either like Bitcoin and Aetherium lost 60% of their value since last year to this year and then a bunch of crypto companies went insolvent, because of various either it was just poor risk management or just, you know, for whatever other reasons, you know, they didn't have the capital to withstand the, this bear market. So during these times, you know, this was sort of like a ray of light in this industry, because we had successfully demonstrated that it was actually possible to sell a single family rental property, which normally is a three four week closing process was done instantaneously using battery technologies. But we were also able to find a leverage partner who was able to provide a loan for that property at a 65% LTV and so the combination of all of this really was a very positive thing in the industry, and we got a lot of outreach because of that.   Michael: Hopefully it wasn't FTX, right…   Sanjay: No, the leverage partner was not FTY, it was Dehler finance. But specifically, you know, about your question about, you know, with respect to blockchain tokenization, what does that really mean for real estate is that, you know, we've been able to now demonstrate that it is possible to have a better sale experience, right? When you typically look at the three week closing process on a real estate transaction, there's a bunch of contingencies on an offer, both the buyer and seller are extremely nervous about what happens during the diligence period in those three weeks. You know, like, for example, as you're aware, you know, the inspection results come in, and then you find out something about the property that you were not aware of before and then there's typically some kind of negotiation that goes on the offer price after the fact. There's an appraisal, contingency financing contingency, and, you know, so anything can happen during this three week period, the seller and buyer, even though an offer was accepted, may have a disagreement later on, you know, based on the results of further analysis, and sometimes the offer can be rescinded and then you're back to the drawing board trying to relist the property and sell it. So it's a particularly stressful time, both for the buyer and seller and doing it through this web three mechanism essentially allows us to take a lot of that diligence, which still has to happen, but we're just moving it, you know, upfront in the process, so the buyer and seller have access to the same information about the property, and the buyer is able to perform all of their diligence upfront. The way Geoff talks about his experiences, you may spend a week or two looking at Amazon Prime to figure out what you want to buy for Christmas. But once you've made that decision, you want it to be delivered, you know, on Amazon Prime, same day or next day, you don't want to wait four weeks for it to be then shipped from China to you know, get to Los Angeles, and then from there to be transported to, you know, San Francisco. So, you know, we really want to make this process easy for people, right. So you do all your diligence upfront, but when you decide to make that purchase decision, it happens instantaneously and on top of that, when you add that financing in a way that's asset based and not based on your personal credit underwriting, you're not trying to find a lender and you know, sending them two years of tax returns and bank statements and as you as you're aware, Michael, what happens in this process is you send all this information, you get a pre underwriting approval and then as you're getting ready to close on the property a month or two have elapsed, and all your information is outdated, and you're resending all the information back to the lender. So you know, you want to avoid all of this as well, because that's also incredibly stressful as you're going through a purchase process and here, because it's a rental property, it's cashflow generating, you based on the value of the asset, you can actually underwrite the loan and say, you know, it's a $200,000 property, I'm comfortable giving you $100,000 loan against it and that makes the lending paradigm a lot simpler as well. So overall, it's generally a better experience, both for the seller and the buyer, when you bring in the battery technology into this process.   Michael: This is mind blowing, you guys. So, I'm curious, like, how are you seeing really or rather, are people doing this at scale? I mean, is this we did it once we've, we've proven that it can be done once. But what is the scalability factor look like here? For both buyers and for sellers?   Geoff: It is yeah, I can jump in here. It is scalable. It's scalable in the same way that buying and selling homes today can be done, you know in bulk, or you can assemble your own portfolio over time. It's not you know, there isn't a delayed production process in creating these and preparing them to be sold on the blockchain. We do get that question a lot. Well, how much does it cost to mint a token? You know, is it 10s of 1000s of dollars? No, that's, that's essentially free. How long does it take, it's essentially instantaneous. The work that we do to prepare this to be sold is, is what Sanjay alluded to the diligence and inspection making sure everything photos have been taken, taxes have been paid HOA square all of those things. That's what we do up front, which has to happen in any real estate transaction, we just package that up in a very short timeframe of you know, call it five or 10 days, once the home has been purchased, and rehabbed and you know, it's ready to be listed for sale. So this can be this can be scaled and then once the home has been put on chain, then this is where the seller really is going to feel the scalability and the ease of interaction because imagine that you own five or 10 or you know some number of homes, you want to rebalance your portfolio. Maybe you want to get into one market and get out of another market. Right now you know, you'd have to do that through the traditional process. It might take a few months and involved a number of different intermediaries. In our case, if you if you own those homes as tokenized properties, we can get them ready for sale in five or 10 days, and then they can be listed immediately and once they've been listed on an NFT marketplace, the sale can happen with one click. So you don't as the seller, you don't have to go through a you know, a prolonged and painful back and forth with the buyer countering after they get the inspection and you know, trying to haggle on the price or trying to get a discount here, whatever it might be. That's all taken care of up front. So in that sense, it's it does make this much more scalable and much more liquid than the traditional process.   Michael: Should audience and listeners be thinking about crypto almost like a foreign currency and so just quick anecdote. So I've invested in Portugal, I signed my purchase agreement to purchase the property in Portugal back in 2020, just before the pandemic, then where the dollar was really strong against the euro than the Dollar tanked against the Euro and so I changed money after the fact and just got totally hosed on the exchange rate. How should people be thinking about exchange rate, if you will, between cryptocurrency and whatever currency there?   Sanjay: Yeah, that's a that's a really good question, right and when you think about a cryptocurrency, like Bitcoin or Aetherium, these are the two sort of more commonly discussed cryptocurrencies, in a way it is, you can make the analogy that these are almost as though they are, you know, sovereign currencies of their own and there is an exchange rate between the US dollar and Bitcoin or Aetherium. The only difference here being that, you know, unlike Euro, or the British pound, where they have their own fiscal and monetary policies that, you know, determine what happens to their bank against the dollar, in the case of cryptocurrencies, they are highly volatile and we see that there's, they're very, actually strongly correlated to the stock market today. So, when, for example, the, there was an indication that the feds might slow down the rate at which they're increasing the interest rates and I think the expectation for, I believe this week the Fed is meeting and the expectation is that this week, it will be a 50 basis point taken sort of a 75 basis point high, the stock markets rallied and sorted Bitcoin with that and however, even though they're kind of strongly correlated, they're also highly volatile and so when we talk about people having cryptocurrencies that they can use to buy these properties, we actually suggest that they buy and keep their money in stable coins, which are pegged against the US dollar and there are companies such as circle which have USDC, and Paxos which has its own version of dollar pegged stable coin. And having your money in stable coins means that you're not subject to the same volatility, as Bitcoin or Aetherium might be which can drop or go up in value by 20-30% in a single day and that's, that's how we will really think about it. If people want to, you know, have an allocation, if somebody is really long on Bitcoin or Aetherium, and they want to have an allocation in that asset class, that's fine. As long as they're aware that those are highly volatile and in the short term, they could be, you know, fluctuating quite a bit.   Michael: Yeah and that makes sense and so when are you seeing people make the change from the stable coin to whatever coin they're going to be using to purchase the properties?   Sanjay: So the stable, you can actually purchase properties with stable coins and because, you know, we have a way to when we received those stable coins, for example, if we are the seller of the property, and, you know, property is purchased using, let's say, serpents, USDC. Once were paid in USD C, we have a way to convert that back into US dollars. So that's, you know, it makes essentially, you can think of the stable coins as programmable money meaning this whole transaction is happening on the blockchain, and it's happening through a piece of computer code, there's no you know, you and I are not sitting across the table signing documents and you know, giving a check and receiving title and in return. So, this is all happening because a piece of computer code is transferring money from you to me and transferring the, the LLC through the NFT giving you the LLC that I own, which has this property and since this is all being executed by computer code, this stable coin is really, you know, we refer to it as programmable money because a piece of computer program is able to move money from you to me, and, and allow this transaction to happen in that one click process that Geoff was talking about earlier.   Geoff: You know, it feels like this is the way things should work, right? If you think about the system that we have right now for closing property transactions. It's basically inherited from England 800 years ago. You know, we've made small advancements, but not really and it shouldn't you know, it all of everyone who is involved in these transactions, and every step that's taken is taken for a reason it's solving a particular problem. But if you stop and rethink how this is done, you realize that by reordering some things, and maybe, you know, using a splash of new technology here, you can actually dramatically change the experience for everyone and it's not necessarily, you know, a zero sum game, I think it's best, it's better for everyone, everyone who's in the industry is going to be better off, there will be more transactions, because it's easier to transact, there'll be more demand because people are interested in getting in, if they know they can get out easily, right? Right now, you know that if you're looking at buying a property, you're probably going to have to hold it at least five years to recover your closing costs and wait for it to appreciate a little bit and you know, it's going to be a headache, when you do have to sell, if you don't have those constraints, you know, transaction fees are less and the time involved is less, you'll be more inclined to get in the market, because you know, you can get out when you need to.   Sanjay: And, you know, I'll also add one more thing to that, right. So Michael, if you think about, you know, back in the day, when there were these kind of all day, buyers, a lot of them were like businessmen that, you know, one year, they might have made half a million dollars, but you know, then another year, it was only 150, or something and so it's very hard to underwrite those types of folks through a traditional underwriting process, because you're looking at two years of, you know, income and tax returns, and all of that, and a lot of them may not can qualify for more conventional financing. However, in an asset based lending type solution, you know, as long as you have the money, and, you know, you're not constrained by, you know, your income for the last two years or three years, as long as you have the money to buy the, you know, to put in as down payment on the product, and the asset itself has the value, you're able to borrow against it much more easily. So, you know, we just talked about the complexity of closing a real estate transaction, in general. But once you add in the financing layer, on top of that, it gets even harder because, you know, there's, again, in a in a, you know, when the market is going up, you just, you just don't know, if you know the max, you want to make the best offer, you can but at that offer, you don't know if you will qualify for the loan, because the also the rate might have moved since the time, you initially got underwritten and suddenly, with the new rate, you don't qualify anymore for that and you have to find that little bit more down payment to offset it or buy some points. You know, you and I have gone through this numerous times in our lives. But you know, you can avoid all of those types of issues because in an asset based lending program, you know, that when you buy this asset, which is worth $200,000, there's a lender, if they're willing to come in at 65%, LTV, you know that based on the value of the asset, you're going to get that loan.   Michael: And if we just decouple the crypto piece of this and blockchain piece of this, I mean, asset based lending, is that available for regular folks?   Sanjay: So in the traditional finance world, it is available, right, but it becomes it becomes harder, because when you're buying an investment property. As you know, Fannie Mae puts limitations on how many investment properties you can get financing for as an individual. Once you get past that limit, then you're looking at pretty much private money, hard money type lending solutions, until you can get up to a scale where you have enough properties where Citibank or Wells Fargo or Goldman Sachs might be interested in working with you. But there's this pocket where after you know, your first 10 properties till you get to a few 100, we are primarily working with, you know, non-bank lenders who are generally, you know, where the rate could be 10 or 12% and then, oftentimes, some of these lenders will also ask for a personal guarantee on top of it. So it's not, you know, while it is possible to get financing on investment properties in the traditional finance world, at some point, it doesn't scale very well and, you know, you're sort of in that desert for until you can somehow figure out a way to get to 200 properties when suddenly the larger lenders are willing to talk to you. So that problem goes away when you're using Blockchain, and specifically decentralized finance or defy as we refer to it, because they're incrementally each property that you're buying is getting financed based on asset value and so you know, you're able to get a much more sort of a pleasurable experience to get through the lending process on the blockchain than on the traditional work.   Michael: Let's pivot just a little bit and talk about risk management and portfolio theory and as folks are starting to scale their portfolio or really as institutions have already a sizable portfolio, where does tokenization fit in to their playbook? When's the appropriate time? When should people be thinking about it in general?   Sanjay: The way I like to answer this question is if you as an individual, if you went to your financial advisor, and said, okay, you know, I have, you know, a million dollars, I want to invest, and I want to make sure there's, you know, come up with a portfolio allocation, that makes sense for me, typically, they're going to, like, in the old days, it was just a sort of a 60,40 rule, there was 60%, in stocks, 40%. In bonds, yeah, but I think people have gotten smarter over the last 10 years and nowadays, when you go to a financial advisor, they're going to say, some allocation in stock, some allocation in fixed income bond products, and then an allocation to alternative investments, because that's where, you know, you can get non correlated yields, because the stock market moving in one direction should not and like, you know, God forbid, if you have an emergency, and you need some cash, like this would be a, you know, if you bought at the height of the market last year, this would be a really bad time to sell, you know, your S&P 500 shares to, to, you know, pay for whatever you had to write, whether it's a wedding, a doctor's thing, education, whatever it is. So, generally speaking, financial advisors these days suggest that you should have an allocation in alternative investments that are non-correlated to the stock and bond markets and, you know, you can access that pool of capital, you know, when you need to, right. So from that, from that perspective, diversification, and then when you talk about alternatives, there's, obviously, there's a wide range of assets there. But real estate is on top of mind, for almost all the, you know, anytime we talk about alternatives, real estate, sort of is one of the top things people talk about. So from that perspective, you know, almost every investor should probably be looking at some allocation, and it will depend on their individual circumstances, whether their age, their income, their marital status, and you know, their need for cash there, this cauldrons and all that, but, you know, advisors might ask you to put five to 10% or, or more into alternative asset classes and so the same financial hygiene should also be applied by corporations and institutions, because you're sort of being asked to manage the treasury of your company, let's say you are a venture funded company, and you just raised $100 million, well, you are going to keep a good portion of that money in cash and cash like instruments, money market, and so on, because you have working capital, you have other things that you need to be spending on. But some allocation of that you might put in US Treasuries, for example, right and in the crypto world, crypto institutions may keep some allocation in Bitcoin and Aetherium and other protocols that they have high conviction and but nevertheless, whether it's a web two institution or a crypto institution, it's just basic financial hygiene to have an allocation in alternative asset classes and specifically, with our product, being a web three product, you know, that money can stay, you know, essentially, the token they're purchasing is a is an NFT and it is part of the blockchain ecosystem, so they can keep their assets within the crypto world without having to continuously off ramp into US dollars and then on ramp it back into crypto when they need to switch back and forth with respect to how they receive rental income, of course, you know, if your properties are managed by a property manager, which they should be because institutions are not in the business of managing properties, you can collect your rent in cash if you have, you know, if you have to, if you have expenses that need to be paid out in US dollars, but also if you want to collect your rent and USDC or DDM, you have the option to do that as well.   So whether you're a two institution or a web three institution, depending on your cash needs and your crypto needs, now you can have a yield generating crypto asset, and the yield can be collected in Fiat or in or in cryptocurrency. So, you know, it is good financial health to do it. We encourage everybody to have some allocation, whether it's through Roofstock, or through any other channel channels that they would like to pursue, but they should have some allocation and alternatives if it just makes sense. Geoff, if you'd like to add something back?   Geoff: No, that's it. I mean, in our case, because we've designed a solution that allows you to transact with crypto natively. This is something that we've heard from a number of crypto or web three institutions that it's potentially very interesting for them, as opposed to maintaining all of their assets in a cryptocurrency or a stable coin, this isn't a way to get access to, you know, a diversified asset that does create yield and it does have a price appreciation component. So there are a lot of, you know, we've heard from the web three community in particular that this is a perfect diversification play.   Michael: And if I'm someone that owns a sizable portfolio, maybe I own it all in cash, because that's been my mantra and I do need that quick capital injection. I mean, could I tokenize these properties and then go get asset based lending and convert that into cash very quickly.   Geoff: Yes, that's your thinking ahead, I like that. Yes, the properties can be tokenized. Basically any point in their lifecycle. If you own them, now, you bought them through a traditional sale and settlement, you can, you know, basically what it means is you have to drop it into an LLC and the LLC has a particular structure that we've worked out, it is very particular. So you know, we'll work with you to set that create that LLC, to help transfer the property into the LLC. In most states, I think the vast majority of states that transfer from an owner to an LLC that's owned by the owner doesn't create transfer tax obligations. So there's, you know, there's a little bit of the traditional closing costs, recreation fee, or whatever that might be part of that. But it is perfectly possible to onboard existing assets that you own into the system and similarly, for if we're talking about other points in the lifecycle for builders, we've had a few builders reach out and say they're close to completing a community and they might want to try to sell some of these as in an NFT form, those can those new assets as new properties that really have never been titled before, those can also be titled directly into an LLC. So it's a very flexible structure, it accommodates property at whatever stage of the lifecycle it's in.   Michael: Anyone who's got conventional financing experience under their belt might be listening to this and saying, Well, you're talking about lending or talking about LLCs. Those two things often don't jive play nice get in the sandbox. So the acid base lender that we're working with, or that we are going to be working with, I would imagine has no issue lending to an LLC. Is that right?   Geoff: Yes, that's exactly right. The lenders that we're working with are the web three lenders, we have talked to numerous traditional lenders, and some of them expressed a lot of interest in digital assets and maybe they've even created a team. But in most cases, the underwriting aspect of it isn't, isn't there yet. They're not ready to take this to credit committee and make a loan on the structure that we're proposing here but that's okay because there are there's a lot of money that's available in the web three space, and it is more flexible in terms of what it requires. They don't necessarily need to have all of the same checks and balances that a traditional lender would be in terms of underwriting against the individual. They can be comfortable underwriting against the asset, because they're comfortable that in the event of default, that asset, it is already in their vaults. So it's in the lenders wallet at the time of default and because we're building this system where you can sell them through an NFT marketplace, there is liquidity that there wouldn't otherwise be if you were holding this you know the traditional way so you to your to your question. Are Trade Fi lenders, the traditional finance space interested? Yes, we've heard some say they're interested we haven't seen anyone actually show up to engage in detail. But there is an entirely separate pool of capital into web three space that's much more flexible and willing to work with Blockchain structure.   Michael: I think my last question, guys before I let you out of here is like I'm sold this sounds obviously like a really great product, like a really cool technology that exists. Who isn't this for who, who listening to this should think about that. It's not a good fit for me because XY and Z.   Sanjay: Yeah, I mean, I can start with a couple of things and then Geoff, you can add to that as well. So if the property already has financing in the Trade Fi world, this structure is hard, because we can't really transfer unencumbered property into an LLC and then tokenize it right because there's a traditional mortgage on the property and there's a whole kind of thing that's a fillip off chain, in terms of financing. So it's not going to work. If primarily you're looking to get off chain financing, then this is not for you. You have to you know, sort of follow the traditional sense. But anybody that's open to purchasing this as a web three property and open to looking at web three financing alternatives. For those people, this absolutely should be something they should consider. The one kind of drawback or question we've heard from a lot of people as they need to become familiar with how to use crypto wallets and how to essentially convert money into USD C or some stable coin, and then use that to go and make a purchase. We're here to help with those types of Q&A, right? The, you know, until you do it for the first time, it's hard, but after you've done it, then it's you know, it's easy, right? Just like when we, the, you know, iPhones first game, and people didn't know, you know, how do you which way do you swipe to do what, but then over time you get used to it and so we're absolutely happy to help anybody that's staying in the sidelines, purely because they don't understand the technology aspects of it, we can help them out. But for people that have financing constraints or other things, and you know, for them, it is until they can, you know, overcome those issues and look at sort of a pure web unencumbered property in the web three world with, then financing added to it on the blockchain. So for those audiences, that might, you know, until they figured out that, it might be a challenge.   Geoff: I'd also add for owner occupants, the financing isn't fully worked out yet. So the financing that we added to the initial home sale a few weeks ago, that was very much geared towards an investment property, and for the immediate future, to the extent that we're building out the different options for defi lending, it looks like most of them will be focused on these as investment properties, as opposed to owner occupant properties and that's for lending law reasons, not wanting to cross over into a mortgage lending licensing requirement and it also just dealing with, you know, the people that are different in the, at that point, the underwriting is different as well, because it's not as easy to necessarily sell that asset if the owner is living in it and so that type of thing. So for at the at the moment, we're thinking of this mostly for investment property, use cases.   Michael: Really, really cool stuff. For people that have questions that want to reach out that want to learn more, what's the best way for them to do so?   Geoff: Reach out on Email or Twitter. We're, we can drop our emails here, but it's: gthompson@roofstock.com or is it sraghavan, right?   Sanjay: Yeah, it's a sraghavan, so: S R A G H A V A N @roofstock.com. I'm also @eth_sanjay, Sanjay, Y on Twitter, so you can also reach out to me there. One thing before we sign off for today, we're super excited to say that we are in the process of closing our second property, that's going to get tokenized. Soon, this one's going to be in Georgia, at CES Atlanta suburb and we'll be going through the process as soon as this is closed in the next few days, we will be going through the process of documenting what the property looks like when we bought it and any Rehab we end up doing on it and you know, they'll be you know, talking about it on social media quite a bit as well as people who are new to real estate investing, maybe this is an opportunity for them to understand, well, you know, what are the kinds of things people should be looking at when they're analyzing a rental property and so as we go through the process of rehabbing this will sort of document that a little bit. But that, you know, once the rehab is completed that that'll get, they'll get tokenized soon, but once the rehab is completed, we'll have it available for sale.   Michael: Awesome, we'll definitely have to keep my eyes peeled for the process and for the property once it's finished. That's super exciting. Well, guys, it's always a pleasure, great seeing you both. Thanks for hanging out with me.   Sanjay: Thanks for having us.   Geoff: Always great to chat.   Sanjay: Bye!   Michael: Take care and talk soon. Hey, everyone. That was a wrap to our show. Thank you so much to Geoff and Sanjay. Super, super, super interesting stuff. Definitely leave us a rating or review wherever it is you get your podcasts and definitely reach out to those guys if you have any questions about web three, about tokenization about cryptocurrency home purchases. Again, really cool stuff. We look forward to seeing you on the next one. Thanks so much for listening. Happy investing…

Constantin Kogan joins Michael Kunz, Senior Legal Associate and Future Partner at MME to have a highly productive legislative conversation about DAO set-up in Switzerland and worldwide. MME serves clients with personal and thorough attention in Legal, Tax, and Compliance. They provide integrated, comprehensive and interdisciplinary services with speed and efficiency.

About MichaelMichael is the Director of Threat Research at Sysdig, managing a team of experts tasked with discovering and defending against novel security threats. Michael has more than 20 years of industry experience in many different roles, including incident response, threat intelligence, offensive security research, and software development at companies like Rapid7, ThreatQuotient, and Mantech. Prior to joining Sysdig, Michael worked as a Gartner analyst, advising enterprise clients on security operations topics.Links Referenced: Sysdig: https://sysdig.com/ “2022 Sysdig Cloud-Native Threat Report”: https://sysdig.com/threatreport TranscriptAnnouncer: Hello, and welcome to Screaming in the Cloud with your host, Chief Cloud Economist at The Duckbill Group, Corey Quinn. This weekly show features conversations with people doing interesting work in the world of cloud, thoughtful commentary on the state of the technical world, and ridiculous titles for which Corey refuses to apologize. This is Screaming in the Cloud.Corey: Welcome to Screaming in the Cloud. I'm Corey Quinn. Something interesting about this particular promoted guest episode that is brought to us by our friends at Sysdig is that when they reached out to set this up, one of the first things out of their mouth was, “We don't want to sell anything,” which is novel. And I said, “Tell me more,” because I was also slightly skeptical. But based upon the conversations that I've had, and what I've seen, they were being honest. So, my guest today—surprising as though it may be—is Mike Clark, Director of Threat Research at Sysdig. Mike, how are you doing?Michael: I'm doing great. Thanks for having me. How are you doing?Corey: Not dead yet. So, we take what we can get sometimes. You folks have just come out with the “2022 Sysdig Cloud-Native Threat Report”, which on one hand, it feels like it's kind of a wordy title, on the other it actually encompasses everything that it is, and you need every single word of that report. At a very high level, what is that thing?Michael: Sure. So, this is our first threat report we've ever done, and it's kind of a rite of passage, I think for any security company in the space; you have to have a threat report. And the cloud-native part, Sysdig specializes in cloud and containers, so we really wanted to focus in on those areas when we were making this threat report, which talks about, you know, some of the common threats and attacks we were seeing over the past year, and we just wanted to let people know what they are and how they protect themselves.Corey: One thing that I've found about a variety of threat reports is that they tend to excel at living in the fear, uncertainty, and doubt space. And invariably, they paint a very dire picture of the internet about become cascading down. And then at the end, there's always a, “But there is hope. Click here to set up a meeting with us.” It's basically a very thinly- veiled cover around what is fundamentally a fear, uncertainty, and doubt-driven marketing strategy, and then it tries to turn into a sales pitch.This does absolutely none of that. So, I have to ask, did you set out to intentionally make something that added value in that way and have contributed to the body of knowledge, or is it because it's your inaugural report; you didn't realize you were supposed to turn it into a terrible sales pitch.Michael: We definitely went into that on purpose. There's a lot of ways to fix things, especially these days with all the different technologies, so we can easily talk about the solutions without going into specific products. And that's kind of way we went about it. There's a lot of ways to fix each of the things we mentioned in the report. And hopefully, the person reading it finds a good way to do it.Corey: I'd like to unpack a fair bit of what's in the report. And let's be clear, I don't intend to read this report into a microphone; that is generally not a great way of conveying information that I have found. But I want to highlight a few things that leapt out to me that I find interesting. Before I do that, I'm curious to know, most people who write reports, especially ones of this quality, are not sitting there cogitating in their office by themselves, and they set pen to paper and emerge four days later with the finished treatise. There's a team involved, there's more than one person that weighs in. Who was behind this?Michael: Yeah, it was a pretty big team effort across several departments. But mostly, it came to the Sysdig threat research team. It's about ten people right now. It's grown quite a bit through the past year. And, you know, it's made up of all sorts of backgrounds and expertise.So, we have machine learning people, data scientists, data engineers, former pen-testers and red team, a lot of blue team people, people from the NSA, people from other government agencies as well. And we're also a global research team, so we have people in Europe and North America working on all of this. So, we try to get perspectives on how these threats are viewed by multiple areas, not just Silicon Valley, and express fixes that appeal to them, too.Corey: Your executive summary on this report starts off with a cloud adversary analysis of TeamTNT. And my initial throwaway joke on that, it was going to be, “Oh, when you start off talking about any entity that isn't you folks, they must have gotten the platinum sponsorship package.” But then I read the rest of that paragraph and I realized that wait a minute, this is actually interesting and germane to something that I see an awful lot. Specifically, they are—and please correct me if I'm wrong on any of this; you are definitionally the expert whereas I am, obviously the peanut gallery—but you talk about TeamTNT as being a threat actor that focuses on targeting the cloud via cryptojacking, which is a fanciful word for, “Okay, I've gotten access to your cloud environment; what am I going to do with it? Mine Bitcoin and other various cryptocurrencies.” Is that generally accurate or have I missed the boat somewhere fierce on that? Which is entirely possible.Michael: That's pretty accurate. We also think it just one person, actually, and they are very prolific. So, they were pretty hard to get that platinum support package because they are everywhere. And even though it's one person, they can do a lot of damage, especially with all the automation people can make now, one person can appear like a dozen.Corey: There was an old t-shirt that basically encompassed everything that was wrong with the culture of the sysadmin world back in the naughts, that said, “Go away, or I will replace you with a very small shell script.” But, on some level, you can get a surprising amount of work done on computers, just with things like for loops and whatnot. What I found interesting was that you have put numbers and data behind something that I've always taken for granted and just implicitly assumed that everyone knew. This is a common failure mode that we all have. We all have blind spots where we assume the things that we spend our time on is easy and the stuff that other people are good at and you're not good at, those are the hard things.It has always been intuitively obvious to me as a cloud economist, that when you wind up spending $10,000 in cloud resources to mine cryptocurrency, it does not generate $10,000 of cryptocurrency on the other end. In fact, the line I've been using for years is that it's totally economical to mine Bitcoin in the cloud; the only trick is you have to do it in someone else's account. And you've taken that joke and turned it into data. Something that you found was that in one case, that you were able to attribute $8,100 of cryptocurrency that were generated by stealing $430,000 of cloud resources to do it. And oh, my God, we now have a number and a ratio, and I can talk intelligently and sound four times smarter. So, ignoring anything else in this entire report, congratulations, you have successfully turned this into what is beginning to become a talking point of mine. Value unlocked. Good work. Tell me more.Michael: Oh, thank you. Cryptomining is kind of like viruses in the old on-prem environment. Normally it just cleaned up and never thought of again; the antivirus software does its thing, life goes on. And I think cryptominers are kind of treated like that. Oh, there's a miner; let's rebuild the instance or bring a new container online or something like that.So, it's often considered a nuisance rather than a serious threat. It also doesn't have the, you know, the dangerous ransomware connotation to it. So, a lot of people generally just think of as a nuisance, as I said. So, what we wanted to show was, it's not really a nuisance and it can cost you a lot of money if you don't take it seriously. And what we found was for every dollar that they make, it costs you $53. And, you know, as you mentioned, it really puts it into view of what it could cost you by not taking it seriously. And that number can scale very quickly, just like your cloud environment can scale very quickly.Corey: They say this cloud scales infinitely and that is not true. First, tried it; didn't work. Secondly, it scales, but there is an inherent limit, which is your budget, on some level. I promise they can add hard drives to S3 faster than you can stuff data into it. I've checked.One thing that I've seen recently was—speaking of S3—I had someone reach out in what I will charitably refer to as a blind panic because they were using AWS to do something. Their bill was largely $4 a month in S3 charges. Very reasonable. That carries us surprisingly far. And then they had a credential leak and they had a threat actor spin up all the Lambda functions in all of the regions, and it went from $4 a month to $60,000 a day and it wasn't caught for six days.And then AWS as they tend to do, very straight-faced, says, “Yeah, we would like our $360,000, please.” At which point, people start panicking because a lot of the people who experience this are not themselves sophisticated customers; they're students, they're learning how this stuff works. And when I'm paying $4 a month for something, it is logical and intuitive for me to think that, well, if I wind up being sloppy with their credentials, they could run that bill up to possibly $25 a month and that wouldn't be great, so I should keep an eye on it. Yeah, you dropped a whole bunch of zeros off the end of that. Here you go. And as AWS spins up more and more regions and as they spin up more and more services, the ability to exploit this becomes greater and greater. This problem is not getting better, it is only getting worse, by a lot.Michael: Oh, yeah, absolutely. And I feel really bad for those students who do have that happen to them. I've heard on occasion that the cloud providers will forgive some debts, but there's no guarantee of that happening, from breaches. And you know, the more that breaches happen, the less likely they are going to forgive it because they still to pay for it; someone's paying for it in the end. And if you don't improve and fix your environment and it keeps happening, one day, they're just going to stick you with the bill.Corey: To my understanding, they've always done the right thing when I've highlighted something to them. I don't have intimate visibility into it and of course, they have a threat model themselves of, okay, I'm going to spin up a bunch of stuff, mine cryptocurrency for a month—cry and scream and pretend I got hacked because fraud is very much a thing, there is a financial incentive attached to this—and they mostly seem to get it right. But the danger that I see for the cloud provider is not that they're going to stop being nice and giving money away, but assume you're a student who just winds up getting more than your entire college tuition as a surprise bill for this month from a cloud provider. Even assuming at the end of that everything gets wiped and you don't owe anything. I don't know about you, but I've never used that cloud provider again because I've just gotten a firsthand lesson in exactly what those risks are, it's bad for the brand.Michael: Yeah, it really does scare people off of that. Now, some cloud providers try to offer more proactive protections against this, try to shut down instances really quick. And you know, you can take advantage of limits and other things, but they don't make that really easy to do. And setting those up is critical for everybody.Corey: The one cloud provider that I've seen get this right, of all things, has been Oracle Cloud, where they have an always free tier. Until you affirmatively upgrade your account to chargeable, they will not charge you a penny. And I have experimented with this extensively, and they're right, they will not charge you a penny. They do have warnings plastered on the site, as they should, that until you upgrade your account, do understand that if you exceed a threshold, we will stop serving traffic, we will stop servicing your workload. And yeah, for a student learner, that's absolutely what I want. For a big enterprise gearing up for a giant Superbowl commercial or whatnot, it's, “Yeah, don't care what it costs, just make sure you continue serving traffic. We don't get a redo on this.” And without understanding exactly which profile of given customer falls into, whenever the cloud provider tries to make an assumption and a default in either direction, they're wrong.Michael: Yeah, I'm surprised that Oracle Cloud of all clouds. It's good to hear that they actually have a free tier. Now, we've seen attackers have used free tiers quite a bit. It all depends on how people set it up. And it's actually a little outside the threat report, but the CI/CD pipelines in DevOps, anywhere there's free compute, attackers will try to get their miners in because it's all about scale and not quality.Corey: Well, that is something I'd be curious to know. Because you talk about focusing specifically on cloud and containers as a company, which puts you in a position to be authoritative on this. That Lambda story that I mentioned about, surprise $60,000 a day in cryptomining, what struck me about that and caught me by surprise was not what I think would catch most people who didn't swim in this world by surprise of, “You can spend that much?” In my case, what I'm wondering about is, well hang on a minute. I did an article a year or two ago, “17 Ways to Run Containers On AWS” and listed 17 AWS services that you could use to run containers.And a few months later, I wrote another article called “17 More Ways to Run Containers On AWS.” And people thought I was belaboring the point and making a silly joke, and on some level, of course I was. But I was also highlighting very clearly that every one of those containers running in a service could be mining cryptocurrency. So, if you get access to someone else's AWS account, when you see those breaches happen, are people using just the one or two services they have things ready to go for, or are they proliferating as many containers as they can through every service that borderline supports it?Michael: From what we've seen, they usually just go after a compute, like EC2 for example, as it's most well understood, it gets the job done, it's very easy to use, and then get your miner set up. So, if they happen to compromise your credentials versus the other method that cryptominers or cryptojackers do is exploitation, then they'll try to spread throughout their all their EC2 they can and spin up as much as they can. But the other interesting thing is if they get into your system, maybe via an exploit or some other misconfiguration, they'll look for the IAM metadata service as soon as they get in, to try to get your IAM credentials and see if they can leverage them to also spin up things through the API. So, they'll spin up on the thing they compromised and then actively look for other ways to get even more.Corey: Restricting the permissions that anything has in your cloud environment is important. I mean, from my perspective, if I were to have my account breached, yes, they're going to cost me a giant pile of money, but I know the magic incantations to say to AWS and worst case, everyone has a pet or something they don't want to see unfortunate things happen to, so they'll waive my fee; that's fine. The bigger concern I've got—in seriousness—I think most companies do is the data. It is the access to things in the account. In my case, I have a number of my clients' AWS bills, given that that is what they pay me to work on.And I'm not trying to undersell the value of security here, but on the plus side that helps me sleep at night, that's only money. There are datasets that are far more damaging and valuable about that. The worst sleep I ever had in my career came during a very brief stint I had about 12 years ago when I was the director of TechOps at Grindr, the gay dating site. At that scenario, if that data had been breached, people could very well have died. They live in countries where that winds up not being something that is allowed, or their family now winds up shunning them and whatnot. And that's the stuff that keeps me up at night. Compared to that, it's, “Well, you cost us some money and embarrassed a company.” It doesn't really rank on the same scale to me.Michael: Yeah. I guess the interesting part is, data requires a lot of work to do something with for a lot of attackers. Like, it may be opportunistic and come across interesting data, but they need to do something with it, there's a lot more risk once they start trying to sell the data, or like you said, if it turns into something very unfortunate, then there's a lot more risk from law enforcement coming after them. Whereas with cryptomining, there's very little risk from being chased down by the authorities. Like you said, people, they rebuild things and ask AWS for credit, or whoever, and move on with their lives. So, that's one reason I think cryptomining is so popular among threat actors right now. It's just the low risk compared to other ways of doing things.Corey: It feels like it's a nuisance. One thing that I was dreading when I got this copy of the report was that there was going to be what I see so often, which is let's talk about ransomware in the cloud, where people talk about encrypting data in S3 buckets and sneakily polluting the backups that go into different accounts and how your air -gapping and the rest. And I don't see that in the wild. I see that in the fear-driven marketing from companies that have a thing that they say will fix that, but in practice, when you hear about ransomware attacks, it's much more frequently that it is their corporate network, it is on-premises environments, it is servers, perhaps running in AWS, but they're being treated like servers would be on-prem, and that is what winds up getting encrypted. I just don't see the attacks that everyone is warning about. But again, I am not primarily in the security space. What do you see in that area?Michael: You're absolutely right. Like we don't see that at all, either. It's certainly theoretically possible and it may have happened, but there just doesn't seem to be that appetite to do that. Now, the reasoning? I'm not a hundred percent sure why, but I think it's easier to make money with cryptomining, even with the crypto markets the way they are. It's essentially free money, no expenses on your part.So, maybe they're not looking because again, that requires more effort to understand especially if it's not targeted—what data is important. And then it's not exactly the same method to do the attack. There's versioning, there's all this other hoops you have to jump through to do an extortion attack with buckets and things like that.Corey: Oh, it's high risk and feels dirty, too. Whereas if you're just, I guess, on some level, psychologically, if you're just going to spin up a bunch of coin mining somewhere and then some company finds it and turns it off, whatever. You're not, as in some cases, shaking down a children's hospital. Like that's one of those great, I can't imagine how you deal with that as a human being, but I guess it takes all types. This doesn't get us to sort of the second tentpole of the report that you've put together, specifically around the idea of supply chain attacks against containers. There have been such a tremendous number of think pieces—thought pieces, whatever they're called these days—talking about a software bill of materials and supply chain threats. Break it down for me. What are you seeing?Michael: Sure. So, containers are very fun because, you know, you can define things as code about what gets put on it, and they become so popular that sharing sites have popped up, like Docker Hub and other public registries, where you can easily share your container, it has everything built, set up, so other people can use it. But you know, attackers have kind of taken notice of this, too. Where anything's easy, an attacker will be. So, we've seen a lot of malicious containers be uploaded to these systems.A lot of times, they're just hoping for a developer or user to come along and use them because your Docker Hub does have the official designation, so while they can try to pretend to be like Ubuntu, they won't be the official. But instead, they may try to see theirs and links and things like that to entice people to use theirs instead. And then when they do, it's already pre-loaded with a miner or, you know, other malware. So, we see quite a bit of these containers in Docker Hub. And they're disguised as many different popular packages.They don't stand up to too much scrutiny, but enough that, you know, a casual looker, even Docker file may not see it. So yeah, we see a lot of—and embedded credentials and other big part that we see in these containers. That could be an organizational issue, like just a leaked credential, but you can put malicious credentials into Docker files, to0, like, say an SSH private key that, you know, if they start this up, the attacker can now just log—SSH in. Or other API keys or other AWS changing commands you can put in there. You can put really anything in there, and wherever you load it, it's going to run. So, you have to be really careful.[midroll 00:22:15]Corey: Years ago, I gave a talk at the conference circuit called, “Terrible Ideas in Git” that purported to teach people how to get worked through hilarious examples of misadventure. And the demos that I did on that were, well, this was fun and great, but it was really annoying resetting them every time I gave the talk, so I stuffed them all into a Docker image and then pushed that up to Docker Hub. Great. It was awesome. I didn't publicize it and talk about it, but I also just left it as an open repository there because what are you going to do? It's just a few directories in the route that have very specific contrived scenarios with Git, set up and ready to go.There's nothing sensitive there. And the thing is called, “Terrible Ideas.” And I just kept watching the download numbers continue to increment week over week, and I took it down because it's, I don't know what people are going to do with that. Like, you see something on there and it says, “Terrible Ideas.” For all I know, some bank is like, “And that's what we're running in production now.” So, who knows?But the idea o—not that there was necessarily anything wrong with that, but the fact that there's this theoretical possibility someone could use that or put the wrong string in if I give an example, and then wind up running something that is fairly compromisable in a serious environment was just something I didn't want to be a part of. And you see that again, and again, and again. This idea of what Docker unlocks is amazing, but there's such a tremendous risk to it. I mean, I've never understood 15 years ago, how you're going to go and spin up a Linux server on top of EC2 and just grab a community AMI and use that. It's yeah, I used to take provisioning hardware very seriously to make sure that I wasn't inadvertently using something compromised. Here, it's like, “Oh, just grab whatever seems plausible from the catalog and go ahead and run that.” But it feels like there's so much of that, turtles all the way down.Michael: Yeah. And I mean, even if you've looked at the Docker file, with all the dependencies of the things you download, it really gets to be difficult. So, I mean, to protect yourself, it really becomes about, like, you know, you can do the static scanning of it, looking for bad strings in it or bad version numbers for vulnerabilities, but it really comes down to runtime analysis. So, when you start to Docker container, you really need the tools to have visibility to what's going on in the container. That's the only real way to know if it's safe or not in the end because you can't eyeball it and really see all that, and there could be a binary assortment of layers, too, that'll get run and things like that.Corey: Hell is other people's workflows, as I'm sure everyone's experienced themselves, but one of mine has always been that if I'm doing something as a proof of concept to build it up on a developer box—and I do keep my developer environments for these sorts of things isolated—I will absolutely go and grab something that is plausible- looking from Docker Hub as I go down that process. But when it comes time to wind up putting it into a production environment, okay, now we're going to build our own resources. Yeah, I'm sure the Postgres container or whatever it is that you're using is probably fine, but just so I can sleep at night, I'm going to take the public Docker file they have, and I'm going to go ahead and build that myself. And I feel better about doing that rather than trusting some rando user out there and whatever it is that they've put up there. Which on the one hand feels like a somewhat responsible thing to do, but on the other, it feels like I'm only fooling myself because some rando putting things up there is kind of what the entire open-source world is, to a point.Michael: Yeah, that's very true. At some point, you have to trust some product or some foundation to have done the right thing. But what's also true about containers is they're attacked and use for attacks, but they're also used to conduct attacks quite a bit. And we saw a lot of that with the Russian-Ukrainian conflict this year. Containers were released that were preloaded with denial-of-service software that automatically collected target lists from, I think, GitHub they were hosted on.So, all a user to get involved had to do was really just get the container and run it. That's it. And now they're participating in this cyberwar kind of activity. And they could also use this to put on a botnet or if they compromise an organization, they could spin up at all these instances with that Docker container on it. And now that company is implicated in that cyber war. So, they can also be used for evil.Corey: This gets to the third point of your report: “Geopolitical conflict influences attacker behaviors.” Something that happened in the early days of the Russian invasion was that a bunch of open-source maintainers would wind up either disabling what their software did or subverting it into something actively harmful if it detected it was running in the Russian language and/or in a Russian timezone. And I understand the desire to do that, truly I do. I am no Russian apologist. Let's be clear.But the counterpoint to that as well is that, well, to make a reference I made earlier, Russia has children's hospitals, too, and you don't necessarily know the impact of fallout like that, not to mention that you have completely made it untenable to use anything you're doing for a regulated industry or anyone else who gets caught in that and discovers that is now in their production environment. It really sets a lot of stuff back. I've never been a believer in that particular form of vigilantism, for lack of a better term. I'm not sure that I have a better answer, let's be clear. I just, I always knew that, on some level, the risk of opening that Pandora's box were significant.Michael: Yeah. Even if you're doing it for the right reasons. It still erodes trust.Corey: Yeah.Michael: Especially it erodes trust throughout open-source. Like, not just the one project because you'll start thinking, “Oh, how many other projects might do this?” And—Corey: Wait, maybe those dirty hippies did something in our—like, I don't know, they've let those people anywhere near this operating system Linux thing that we use? I don't think they would have done that. Red Hat seems trustworthy and reliable. And it's yo, [laugh] someone needs to crack open a history book, on some level. It's a sticky situation.I do want to call out something here that it might be easy to get the wrong idea from the summary that we just gave. Very few things wind up raising my hackles quite like companies using tragedy to wind up shilling whatever it is they're trying to sell. And I'll admit when I first got this report, and I saw, “Oh, you're talking about geopolitical conflict, great.” I'm not super proud of this, but I was prepared to read you the riot act, more or less when I inevitably got to that. And I never did. Nothing in this entire report even hints in that direction.Michael: Was it you never got to it, or, uh—Corey: Oh, no. I've read the whole thing, let's be clear. You're not using that to sell things in the way that I was afraid you were. And simultaneously I want to say—I want to just point that out because that is laudable. At the same time, I am deeply and bitterly resentful that that even is laudable. That should be the common state.Capitalizing on tragedy is just not something that ever leaves any customer feeling good about one of their vendors, and you've stayed away from that. I just want to call that out is doing the right thing.Michael: Thank you. Yeah, it was actually a big topic about how we should broach this. But we have a good data point on right after it started, there was a huge spike in denial-of-service installs. And that we have a bunch of data collection technology, honeypots and other things, and we saw the day after cryptomining started going down and denial-of-service installs started going up. So, it was just interesting how that community changed their behaviors, at least for a time, to participate in whatever you want to call it, the hacktivism.Over time, though, it kind of has gone back to the norm where maybe they've gotten bored or something or, you know, run out of funds, but they're starting cryptomining again. But these events can cause big changes in the hacktivism community. And like I mentioned, it's very easy to get involved. We saw over 150,000 downloads of those pre-canned denial-of-service containers, so it's definitely something that a lot of people participated in.Corey: It's a truism that war drives innovation and different ways of thinking about things. It's a driver of progress, which says something deeply troubling about us. But it's also clear that it serves as a driver for change, even in this space, where we start to see different applications of things, we see different threat patterns start to emerge. And one thing I do want to call out here that I think often gets overlooked in the larger ecosystem and industry as a whole is, “Well, no one's going to bother to hack my nonsense. I don't have anything interesting for them to look at.”And it's, on some level, an awful lot of people running tools like this aren't sophisticated enough themselves to determine that. And combined with your first point in the report as well that, well, you have an AWS account, don't you? Congratulations. You suddenly have enormous piles of money—from their perspective—sitting there relatively unguarded. Yay. Security has now become everyone's problem, once again.Michael: Right. And it's just easier now. It means, it was always everyone's problem, but now it's even easier for attackers to leverage almost everybody. Like before, you had to get something on your PC. You had to download something. Now, your search of GitHub can find API keys, and then that's it, you know? Things like that will make it game over or your account gets compromised and big bills get run up. And yeah, it's very easy for all that to happen.Corey: Ugh. I do want to ask at some point, and I know you asked me not to do it, but I'm going to do it anyway because I have this sneaking suspicion that given that you've spent this much time on studying this problem space, that you probably, as a company, have some answers around how to address the pain that lives in these problems. What exactly, at a high level, is it that Sysdig does? Like, how would you describe that in an elevator without sabotaging the elevator for 45 minutes to explain it in depth to someone?Michael: So, I would describe it as threat detection and response for cloud containers and workloads in general. And all the other kind of acronyms for cloud, like CSPM, CIEM.Corey: They're inventing new and exciting acronyms all the time. And I honestly at this point, I want to have almost an acronym challenge of, “Is this a cybersecurity acronym or is it an audio cable? Which is it?” Because it winds up going down that path, super easily. I was at RSA walking the expo floor and I had I think 15 different companies I counted pitching XDR, without a single one bothering to explain what that meant. Okay, I guess it's just the thing we've all decided we need. It feels like security people selling to security people, on some level.Michael: I was a Gartner analyst.Corey: Yeah. Oh… that would do it then. Terrific. So, it's partially your fault, then?Michael: No. I was going to say, don't know what it means either.Corey: Yeah.Michael: So, I have no idea [laugh]. I couldn't tell you.Corey: I'm only half kidding when I say in many cases, from the vendor perspective, it seems like what it means is whatever it is they're trying to shoehorn the thing that they built into filling. It's kind of like observability. Observability means what we've been doing for ten years already, just repurposed to catch the next hype wave.Michael: Yeah. The only thing I really understand is: detection and response is a very clear detect things and respond to things. So, that's a lot of what we do.Corey: It's got to beat the default detection mechanism for an awful lot of companies who in years past have found out that they have gotten breached in the headline of The New York Times. Like it's always fun when that, “Wait, what? What? That's u—what? How did we not know this was coming?”It's when a third party tells you that you've been breached, it's never as positive—not that it's a positive experience anyway—than discovering yourself internally. And this stuff is complicated, the entire space is fraught, and it always feels like no matter how far you go, you could always go further, but left to its inevitable conclusion, you'll burn through the entire company budget purely on security without advancing the other things that company does.Michael: Yeah.Corey: It's a balance.Michael: It's tough because it's a lot to know in the security discipline, so you have to balance how much you're spending and how much your people actually know and can use the things you've spent money on.Corey: I really want to thank you for taking the time to go through the findings of the report for me. I had skimmed it before we spoke, but talking to you about this in significantly more depth, every time I start going to cite something from it, I find myself coming away more impressed. This is now actively going on my calendar to see what the 2023 version looks like. Congratulations, you've gotten me hooked. If people want to download a copy of the report for themselves, where should they go to do that?Michael: They could just go to sysdig.com/threatreport. There's no email blocking or gating, so you just download it.Corey: I'm sure someone in your marketing team is twitching at that. Like, why can't we wind up using this as a lead magnet? But ugh. I look at this and my default is, oh, wow, you definitely understand your target market. Because we all hate that stuff. Every mandatory field you put on those things makes it less likely I'm going to download something here. Click it and have a copy that's awesome.Michael: Yep. And thank you for having me. It's a lot of fun.Corey: No, thank you for coming. Thanks for taking so much time to go through this, and thanks for keeping it to the high road, which I did not expect to discover because no one ever seems to. Thanks again for your time. I really appreciate it.Michael: Thanks. Have a great day.Corey: Mike Clark, Director of Threat Research at Sysdig. I'm Cloud Economist Corey Quinn and this is Screaming in the Cloud. If you've enjoyed this podcast, please leave a five-star review on your podcast platform of choice, whereas if you've hated this podcast, please leave a five-star review on your podcast platform of choice along with an angry comment pointing out that I didn't disclose the biggest security risk at all to your AWS bill, an AWS Solutions Architect who is working on commission.Corey: If your AWS bill keeps rising and your blood pressure is doing the same, then you need The Duckbill Group. We help companies fix their AWS bill by making it smaller and less horrifying. The Duckbill Group works for you, not AWS. We tailor recommendations to your business and we get to the point. Visit duckbillgroup.com to get started.Announcer: This has been a HumblePod production. Stay humble.

Neal Bawa is a technologist who is universally known in real estate circles as the Mad Scientist of Multifamily. Besides being one of the most in-demand speakers in commercial real estate, Neal is a data guru, a process freak, and an outsourcing expert. Neal treats his $947 million-dollar portfolio as an ongoing experiment in efficiency and optimization. The Mad Scientist lives by two mantras. His first mantra is that "We can only manage what we can measure". His second mantra is that "Data beats gut feel by a million miles". These mantras and a dozen other disruptive beliefs drive profit for his 700+ investors. In today's episode, Neal gives his take on what is happening in the multi-family market today, the dynamics of the current economy, and what he sees coming over the next year. Episode Links: https://multifamilyu.com/ https://www.linkedin.com/in/neal-bawa/  --- Transcript Before we jump into the episode, here's a quick disclaimer about our content. The Remote Real Estate Investor podcast is for informational purposes only, and is not intended as investment advice. The views, opinions and strategies of both the hosts and the guests are their own and should not be considered as guidance from Roofstock. Make sure to always run your own numbers, make your own independent decisions and seek investment advice from licensed professionals.   Michael: Hey, everyone, welcome to another episode of the Remote Real Estate Investor. I'm Michael Albaum and today joining me again is Neal Bawa, who is the founder of MultifamilyU and a big time multifamily syndicator and Neal is gonna be putting his finger on the pulse of the multifamily market and sharing with us some pretty hard hitting facts. So let's strap in, and let's get into it.   Neal, welcome back to the show. Thank you so much for taking the time to hang out with me. I really appreciate you coming on.   Neal: It's great to be back, Michael. Great to be back.   Michael: Thank you, Neal. So last time, on our prior episode, we talked a lot about the single family space and what we saw going on with the market today. I'd love if we could focus our conversation on multifamily, since I know that you do quite a bit in that space as well.   Neal: That's right. I live and breathe multifamily. I started with single family like a lot of you know, the folks that are using your platform did, but multifamily is more scalable. So we currently have about a billion dollars of multifamily 31 projects about 4800 units that are either in construction or in lease up or you know, are stabilize, right. So, you know, a significant portion of them are already stabilized that we're holding, but we're also building a bunch of them, and working on the construction of some of them. So it's you know, what's happening today is so dramatic and so unusual. We you know, one could compare, maybe it's not as dramatic as the first three months of COVID. But otherwise, it's pretty crazy. It's pretty dramatic, dramatic. So it's, it's a great time to talk about multifamily.   Michael: Yeah. So a billion dollars and just turning back the clock a minute. I'm curious, how long did it take you to get to that point from when you started?   Neal: So I you know, ignoring a past company where I was a partner, this particular company has basically gotten to that billion dollars since February 2018. So, so about four and a half years, roughly.   Michael: Holy smoke, I was just interviewing a gentleman who's got a business he wants to scale to a billion dollars over a nine year period. So you mourn cut that in half, that's incredible growth. Neal: Well, keep in mind, I don't want to demean what we've done, because we're very proud of it. But with a when you're purchasing multifamily, the numbers get big, pretty, you know, quickly, right? So 100 unit multifamily today is $20 million. So you do get up there very fast. So I still consider myself to be a mid-level syndicator. There's dozens and dozens and dozens of companies that have bigger portfolios than I do and also, for reference, a billion dollar portfolio usually only equates to about 10 employees in a syndication business. Now, in my case, I have 30 employees, because I've 20 of them in the Philippines and that's helping me scale and so I have 20 full time employees in the Philippines in addition to those 10 people. But I think it's useful to have that frame of reference, I think that you're setting targets in multifamily, a billion is actually not a bad target the set.   Michael: Okay, I will definitely keep that in mind as I as I scale my portfolio. That's, that's really great to know. But Neal, let's transition and I would love to get your thoughts because you are a data scientist, you have so many great analytics to kind of backup your thoughts and opinions and viewpoints. Tell us what like what's going on in the multifamily space as we recording this today late, mid to late September.   Neal: Prices are falling and they will continue to fall. It's a bad time to buy any kind of multifamily in any market in the US and I rarely, I've never actually said that before, maybe with the exception of you know, first month COVID. It's currently right now, no one should be buying anything in the United States. But here's the good news. You don't have to wait very long. The market is now adjusting very rapidly. So I think that I think February March of next year would be a terrific time to buy you know whether it's the one to four units that get listed on Roofstock. By the way, I currently have a triplex listed on roof stock, check it out, it's on Brandon Avenue in Chicago. Whether it's those units or it's the you know, the larger unit we were also selling, you know, a 200 unit property at this point in time not on Roofstock but we're not buying anything. I mean, we've basically told our acquisition people to be pencils down stop looking, stop talking to brokers stop traveling to properties, because we are halfway through a correction. So and I'll explain why. Multifamily is a very different animal from single family. So let's say Michael is buying a single family property and it's next to another one that's identical to it. So there's two row houses and next to it. Well, if somebody last month paid a million dollars for the first one, Michael can get a loan that appraises for 1,000,000 value for his property, he can get that easily, regardless of what really happens in the market, he can get that, you know, and prices take so long to fall that even if the price actually falls, Michael can use a comp from half a mile away to still get that million dollars in value. So the banks on the single family side are really trusting you to do your, you know, to not to overpay, right. So if they're just looking at it, is there a comp that matches it and if it does, we'll just give this guy alone, right and if they feel like the times are hard, they might change their LTVs from 75 to 70 and but that's pretty much as far as the single family market goes. The multifamily market is radically different because a multi one multifamily property is a business. It's like you're buying a Tommy's carwash, or you're buying, you know you're buying a subway or a chain of subways, that's the best way to look at it. It's a business. So your underwriting really doesn't matter. It's the banks underwriting that matters, the bank that's giving you the funding and the moment that we start seeing interest rates go up in the market, the value of the property immediately decreases. Why? Because the bank's underwriting decreases the value of the property, because multifamily properties are based on just two things, something known as a cap rate, which is basically the market's estimate of what the property should be worth and then something else known as net operating income, which is basically rents minus expenses right? Now, the moment and you know, the moment your interest rates increase, and most multifamily today in the US is on floating rate debt. So what that means is, as interest rates go up, your mortgage is going up something a number called DSCR. I won't go into that into detail on that. But there's a number called DSCR, that basically starts to fall. So the higher your mortgage goes, the lower that number is. This means that, you know, let's say I'm a buyer and I'm selling two multi families and they're right next to each other, right. So they're same number of units, same occupancy, same design, so that their net operating income for both of these properties is exactly the same, like down to the last cent right. Now one, let's say one soft sell sold for $30 million. Okay, and I waited a month like 30 days, and the Fed raise interest rates by 100 bits right, but basically 1%. The second property now is worth less. It's worth less, even though there's another property that sold 30 days ago, that's identical with the same number of tenants with the same rents. It's now worth less so multifamily is on a sliding scale and that sliding scale is affected by interest rate hikes much sooner than single family.   Obviously, single family is also affected. We've seen there's 90 bond markets in the US where single family prices are coming down, but they're coming down really slowly, right. Like the I think the average decline in the last six weeks has been 2%, right and I mean, seasonal declines are bigger than 2%. So I don't even know what to make of that 2% yet, but on the multifamily side, depending upon the market, we've seen declines of six to 12% in multifamily prices already and in remember, the Fed only really started raising in May of this year that you know, we're doing this in the middle of September, right. So in five months, the Feds basically raised everything there was a tiny raise back in March, but it was it was so tiny that it really didn't make any difference. So in five months, the Fed has basically affected multifamily prices to the tune of six to 12%. Here's the bad news. That's not the end, because everybody including yours truly was thinking that when last week's inflation report came out, we would see a downward trend, and the Fed would give us some guidance that yeah, okay, well, instead of raising by 75 bits this week that there's a Fed meeting going on this week, we're gonna raise by 50 and then we'll see what happens in November, maybe we'll raise it by 25 and we were like, okay, if that happens, great. You know, where the Fed funds rate is at 2.25. They raised by 50 pips this week, then they raised about 25 pips in November at 3%. We're done with the Fed funds rate, and that means that multifamily doesn't have to drop any further. Well, it sucks but that didn't happen. Inflation didn't drop and so now the Fed this week is definitely going to raise interest rates by 75 bits, maybe they might even do it by 100 and that basically will spike up interest rates by 100 points immediately and then they'll have to do 75 points in November and maybe another 50 points or 25 points in December. So because of that bad news, we now know that we're midway through this drop in multifamily, right. So we think that there's another five or 6% drop coming by February or March. Is this bad? No. If you're not, you know, if you're not buying anything, just wait for five or six months and you get five or 6%. You know, you know benefits. What the heck is wrong about that because the market isn't bad. Rents haven't decreased, rents are continuing to increase nationwide for both single family and multifamily. So this isn't like 2008, where there's 5 million empty homes show me empty homes. I mean, there really aren't any, the market is an amazing occupancy levels. This is just one single factor, the cost of debt. So, if you can, in February, buy a property for 5%, cheaper, you will have had two advantages. Number one, the next six months, you're not paying for that high cost of debt, right? Number two, you would, you know, say 5%. So your property is cheaper, so your debts less right? Number three, you will be within six months of the Fed cutting interest rates. This is the part that most people don't understand. The Federal Reserve is not trying to kill us. They're just doing their job. and their job is to control inflation because if you don't control inflation, really bad shit happens really, really bad should happen. So it's much better to control inflation and obviously the industry that is most affected when you raise interest rates is real estate. No other industry in the US is affected as much as real estate by interest rate hikes. Here's the good news though. If you look at the last 61 years, the Fed raised interest rates nine times sharp up sharp down. So if you buy in Feb, by, I think July or August, the Fed should be dropping interest rates or at least talking about dropping interest rates.   Why is that important? Mortgage rates are guesses. So single family mortgage rates and multifamily mortgage rates in the US are just guesswork where the market tries to guess what the Fed will do next. So if the Fed starts talking about interest rate declines, the market starts to prices in., right and when the Fed says oh, well, we might hold, right the market reacts. So the interest rates basically adjust even before the Fed actually does anything. Perfect example of this: In December, the Fed started talking about interest rate hikes, but didn't actually raise anything. They didn't change anything until March. But in those four months, interest rates went up 100 basis points, they went up an entire 1% because the market was guessing what the Fed would do. So if you buy a multifamily in February and the Feds basically start to lower rates by June, July and August. Now you're in a better environment and as long as your rates are floating, they may float the other way, they may float down and give you a benefit. Where you start high and then you float downwards. That's why I think it makes sense to wait. I've seen a lot of my friends that have larger portfolios and me 2 billion 3 billion send emails to their investor saying we're pencils down. mean, what that means is we're not even underwriting a property we you know, we see 10 properties a day and normally we underwrite three or four of them. Pencils down means you just click the delete button 10 times and you're done with your job for the day.   Michael: Wow, I have so many questions. But I guess the first one is, why are mortgage rate guesses? Why doesn't, why don't banks look at actual data and what the actual borrowing rate is today and not worry about forecasting, but use hindsight. So it takes the guesswork out of it.   Neal: I'm not 100% sure on that. Just so you know, that's what the multifamily market does, right. So the multifamily market has two kinds of loans or I should say three kinds of loans. One of them is the guesswork kind where they try and guess what the Fed is going to do. The other one is one that's based on LIBOR or now called Sofer, these are basically and basically they're based on like treasury bonds and what those numbers are those loans. The moment the Fed hikes the they're going to hike this week, right so that they have a meeting on Wednesday, that we're probably going to hype it by 75 pips. Well, if I have that kind of loan, and I do at some of my properties, guess what, on Thursday, my debt is a lot more expensive. 75 basis points more expensive. So you can see that on the multifamily side. I have never, ever seen a single family loan do that. Every mortgage that I've seen 30 year 15 year five year ARM, they're all guesses forward looking guesses on the Feds rate. Why? I have no freaking clue.   Michael: Okay… We'll have to find someone out there that can give us a definitive answer as to why that is. But I'm also curious now, you mentioned at the beginning of our conversation that in the single family space, the banks are kind of depending on us as borrowers to look at the value of the home and determine hey, this is worth or not, which seems very counterintuitive because the majority of multifamily investors that I know, tend to be able to underwrite really, really well, oftentimes better than the bank and so why is the bank's taking the power away from a multifamily investor and really giving it to a single family owner it seems a little bit backwards now.   Neal: Single Family is considered to be a REIT in the United States and single family lending is encouraged by politicians. The overall banking system believes that even if they go a little it over on the single family side, it's not such a bad thing, obviously 2008 was 2007 was different because it was not a real estate failure. It was a failure of lending standards, you know, they were basically giving gardeners million dollar loans, right. So that's not going to end well. So obviously, I don't see any evidence of that kind of stupidity existing today. So there are lending standards, they're pretty tight on those lending standards, they're not going above them, you have to be, you know, a good, good buyer. But beyond that, they as long as there's an appraised property that similar your property will appraise. I am not in favor of this other countries do not do this. Banks underwrite single family loans in other countries, the way that we underwrite multifamily loans. But because of Americans believe that single family is a very key part of their life. We've seen this appraisal based system for the last 30 or 40 years and every once in a while it blows up a bubble just like it did in 2007. So this is a conscious decision that the people that run this company had a country have made, and it has lots and lots of good sides, because it tends to overall increase the prices of single family appraisal, you know, somebody buys for more, the your property is more than next was more next one's more. So generally, it has a beneficial effect on the real estate market. But it also tends to create more bubbles than other countries.   Michael: Interesting. Okay, that's really good insights. So knowing that this isn't the ideal time to buy multifamily. What should people be doing? Is this the time to get educated, is the time to go get capitals is the time you know, what should folks be doing right now?   Neal: Um, I think that I'll give you some ideas, right? So I'll give you kind of a sense of, Well, what would Neal Bawa be doing and what would maybe somebody that's newer than Neal Bawa, you know, doesn't have a lot of multifamily should be doing. So let's just focus on that piece first, right, because what I do is really different from what you should be doing, depending upon where you are in the process. So let's say you're early in the multifamily process, you should be educating your investors, that an extraordinary opportunity is going to present itself most likely in q2 of next year. So that's, you know, April, May, June and that opportunity is there for the first time since the Great Depression, that in the 2008, depression, we have an unusual thing happening, and that will be multifamily prices, not single family, but multifamily prices will be low in q2 next year, compared to let's say, now, or compared to, especially compared to a year ago, they will be low. But the economy will not be anywhere like 2008, it'll still it'll be weak, it will be in a recession. But this is what is known as an artificial recession. So recessions are of two kinds, they come in two flavors. Number one, a recession that is artificially created by the Fed to cool down inflation, and we're about to go into one of those recessions, those tend to be shallow, and the they don't damage the economy in the long term, they create short term damage, and the economy tends to recover fairly quickly from those unemployment doesn't tend to go down too much. You know, so, so go up too much, I should say, you know, so. So we're about to go into one of those and those are the kinds of recessions where you want to buy multifamily. Why because multifamily prices still decrease as interest rates go up, regardless of the strength of the underlying economy. So the underlying economy right now is amazingly strong, right. So with all the hand grenades that the Fed has thrown at us for over five months, they've managed to move the unemployment rate from a historic 3.5% to a historic 3.7%. In five months, they basically haven't managed to dent the unemployment market at all and even that point, 2% increase has largely been because of being because of more people joining the workforce. So post COVID, a lot of people took a year and two years off, a lot of those people are now returning to the to the workforce because they're running out of that stimulus money and that's really what that point to otherwise, when you see like you might see, you know, news about layoffs in the United States, Google it actually look at the statistics. Anytime at any point in the economy, there's layoffs, right. But there haven't been more layoffs than they were six months ago or 12 months ago. It's just the regular layoffs that happened in a normal economy. So there's the economy is extraordinarily strong, and it's going to get dragged into recession simply because the Fed is going to keep throwing hand grenades until the economy goes into recession. But because the underlying economy will stay pretty strong during this shallow recession, you've got a onetime opportunity to buy cheap multifamily because multifamily is just as affected in terms of price. Whether the economy underlying is weak or strong right and you have a quick chance to come out of it and make a lot of money. You should be educating your investors telling them about this opportunity, because I haven't seen that opportunity at all since 2013.   Michael: Interesting.   Neal: That's what you should be doing, telling every investor about this and telling them, I am not buying anything now. Well, you probably know me, you know, don't have the investor money to buy anything now. But what's the harm in saying it's still true?   Michael: Right, right, right. Do you think though, Neal, that at that time, q2, next year, that folks, sellers, owners are going to see that, hey, there's this dip in prices, and therefore, I'm not going to sell because I don't want to sell at a loss I bought 234 or five years ago, I'm going to hold on to my property and no, there will be an inventory shortage, or do you do not foresee that happening?   Neal: There is already an inventory shortage in multifamily prices have still dropped. So the if you look at the inventory available to sell in the multifamily market, it's half of what we had a year ago. But multifamily is different from single family in single family is shortage of inventory tends to drive prices up. With multifamily a shortage of inventory cannot drive prices up because banks are underwriting and they don't give a flying F about what the inventory is. They just care about your debt cost and your debt cost is going up. So when so the key thing is that the single family and multifamily markets are fundamentally different. One of them is just a business and the business is based on its debt cost, and its net operating income and nothing else right. Whereas single family is based on demand. If there's nothing available on your street to sell whatever appears is going to sell for more. That's not how multifamily works. So even right now, supply is pretty low. But that doesn't mean that people are over able to over bid, because if they over bid, guess what happens, Michael, they can't get a loan for that amount and now they have to raise lots of extra equity, which reduces their returns and so a lot of them are like this is painful, we're just going to sit back for three to four months for the market to adjust. Buyers have sellers have to understand that either they just keep their property off the marketplace, which you know, you can do infinite infinitely, you can do it for some amount of time or they will adjust their pricing as they already have. Remember, we've already seen a six to 12% delta in just six months. That's how quickly multifamily reacts and I think that's why I'm in the multifamily business because I liked the logic of that. If your costs are increasing and your profits are decreasing, you should get a lower price, right.   Michael: It's pretty black and white.   Neal: Yeah, yes and that's how it works in multifamily. With single family, you can very often see costs increasing, but because everyone's holding off, nobody's basically selling their property. Everyone's like I've got lots of equity in the property. Now there's no property in the marketplace and even with costs increasing, you can often see increase in pricing. To me that has no logic and so I don't play in in that in that field.   Michael: Yeah, yeah, no, it makes total sense. Neal, let's talk about multifamily loan products and some of the different ones that are out there. You mentioned there's three different loan types. There's the fix for five 710 years, there's the LIBOR, floating rates, what's the third one?   Neal: So the second one is tied to so I'll go back, right. So the first one straightforward, fixed, usually it's five years and 10 year fixed. The second one is tied to a number called LIBOR or LIBOR or so far, these days, it's called Silver. That's kind of the new version of LIBOR. So it's a number and the loans will be, you know, LIBOR plus something LIBOR plus 2.25, right and what that means is the moment the Fed changes, interest rates, that's gonna change, right? So your, the interest rate, you're paying changes the very next day, right, the bank's gonna send you a letter saying, hey, Sofer has changed, therefore your interest rate is now x, right and boom, you're paying more, the third one is available, that is basically a rate that you it's a floating rate. right, but it's not tied to LIBOR. It's not tied to Sofer. It's speculative in some sort of ways. Now, it does tend to go up as interest rates go up, it's really tied to treasuries. Now, US Treasury bonds are a speculative product, right? So today, something happens in China or something happens in Russia, something happens in Ukraine, and all of a sudden, treasury bonds will shoot up or shoot down and so that particular rate is tied to the treasury bonds. So it's speculative and so, you know, Fannie Mae and Freddie Mac, often these floating off of these floating rates. Now, in the end, the rate is going to end up more or less where the Sofer one is, but it's not immediate. It's not like you don't get that happening the next day after the Fed raises interest rates and I'll tell you why because it's tied to treasuries and treasuries move upward. Are downwards because of 100 different factors. Only one of those are interest rates. So geopolitical situations can often make treasuries move downwards. For example, if the Chinese economy collapses tomorrow and there's blood on the street, treasuries will go downwards, even if the Fed continues to raise interest rates. That makes sense? So, to these sorts of things, these movements can happen so that rates that are tied to the US Treasury bonds tend to move up and down with Treasury bonds. So those are the three kinds.   Michael: Okay, and who is do you think well suited or conversely, not well suited for each type of loan?   Neal: So in terms of who is the lender?   Michael: No, if I'm a buyer, and I'm going to buy … Yeah…   Neal: I think, yeah, yeah. So there's also something known as a bridge rate, when it bridge loans, which no one is getting, I don't know, if a single person that's gotten a bridge loan in the last 30 days, because there are simply very high there are 7%, or even higher in the last, you know, 30 days. So the vast majority of people today that should be buying, let's say you have to buy for whatever reason, you're not stopping you want to buy the key advisors, everyone should today should get a floating rate loan, because if you believe like I do, that the feds job is to raise rates and then drop them and that's what they've done nine times in the last 61 years, then you have to believe at some point in the future 6-12 18, 24 months rates will be lower, because right now, they're pretty darn high, right? So if you believe that locking in your rates doesn't make sense. So the market today, all we have is really Fannie Freddie floating lanes, rate rates, which are similar to what your local bank would provide. So maybe you have a smaller project, you want to go with local bank, those are the same kinds of rates that Fannie Freddie provides, they're probably charging you a quarter point more, but you've got a relationship with them, their points are lower. So lots of people go with local banks. But I think that's the only game in the market for multifamily today and the other thing that's happening in the multifamily market, which is driving prices down as you get multifamily, you might in a really boom time environment, you could get loans that are 75%, loan to value, right and then when the market starts to tighten up, they go to 70. Well, a few weeks ago, most lenders went to 65. So they're giving you a lot less loan to value for the same property forcing you to raise more equity. When you raise more equity, your returns go down, your underwriting suffers. So once again, people are like this not working. I'm not going to make any money. My investors have something known as pref or preferential treatment. So the property underperforms, they're going to make their pref I'm gonna make nothing. So a lot of people are stepping back, pencils down.   Michael: Yeah. Yeah, that makes total sense. That makes total sense.   Neal: And, and none of this has anything to do with a crash, you know, the 2008 scenario. If you believe that that is going to occur in the next 12 months, you're not data driven because the 2008 scenario, if you look at every if you list the top 10 factors that caused it, because it wasn't any one thing, right? None of those factors, not one of those factors exist today, right? What we do have is we pulled demand forward in 2021. In 2021, we basically helicoptered $10 trillion, worldwide, not 10 trillion in the US, luckily, 4 trillion in the US, but 10 trillion worldwide, we helicopter money to people for the first time in modern history. We've done a little bit of it before in 2009. But remember, we were bailing out banks, we were bailing out General Motors, the money wasn't going directly into people's pockets, right. So here we helicopter $10 trillion worldwide, and there's an inflationary effect. It pulled demand forward, everyone, all of a sudden had money, everyone spent money and so we pulled demand forward from let's say, 2023, next year, to 2021 and when we did that, we ended up creating massive amounts of inflation, nothing to do with the economy itself, but it created massive inflation and now we have no choice but to deal with it. I can tell you this if on the one side you said you know will you take 7% single Family interest rates right over the Fed stopping you know their program now just let him stop it I would say don't do that. Hyperinflation is so insanely dangerous, and so insanely destructive, that I would, even though it would really hurt me. I would take 7% interest rates any day, I will take 8% but I wouldn't tell the thread to stop doing what they're doing. 9% inflation if it gets entrenched if everyone believes that two years from now we're going to be at 9% It's astonishingly destructive.   Michael: Wow, wow. Okay and Neal, I'm just curious in based on your research the nine times over the last six to 10 years, the Fed has raised rates and then pretty succinctly thereafter dropped them. How far do you think we're gonna get, how low do you think inch rates are gonna go? I want the Neal Bawa prediction the crystal ball, if you will…   Neal: The federal funds rate, right, the Fed funds rate is what the Fed raises, they don't raise or lower mortgage rates. It's currently at 2.25% and in two days, it's going to go to 3%. We believe currently that the peak is going to be either 3.5 or 3.75% for the Fed funds rate and we think that on the downward path, they'll cut it all the way down to 1.75%. So from their peak, they'll go down 2%. So from the peak, whatever that peak interest rate is, it should go down 2%, right. Now, sometimes they have to go past that 1.75 on the downward leg, because they've hurt the economy so much when they were raising rates that they have to compensate. But we think that the Meet the perfect equilibrium rate for the Fed is around 1.75. Now, in their, in their public, in the public, they talk about it being 2.25. That's where they would like equilibrium to be. But they never seem to ever achieve that. It's always lower than that in a normal market. So they just like to talk it up a little bit to set expectations. So we think that whatever that top interest rate is that you're going to see the highest interest rate, the mortgage rate. Once the Fed is done and brings it down, you should see mortgage rates 2%, lower. So it there's a possibility that sometime in the next 180 days, you'll see a 7% mortgage rate, right. So it might touch that number, but I don't think it goes further beyond that. Okay, but I could be completely wrong, because if the Fed doesn't kill inflation, then all bets are off.   Michael: Right, right. Yeah, this is all under the guise of inflation getting tampered back because of the moves and so just to kind of put that in perspective for people as the end users, 2% reduction of the Fed funds rate will typically constitute a 2% drop on what a borrower is going to pay. So if rates get up to 7%, and then Fed Funds pullback to two by 2%, we would expect mortgage rates to hover on that 5% in the consumer market.   Neal: Yes, exactly four and a half to five and a half going up and down a little bit, you'd remember it's speculative, but you'll have plenty of opportunities to you know, lock something in under 5%. So I think the key message is this, never be afraid of 5%. It's really beyond 5%, that the single family economy starts to you know, it starts to miss heartbeats. That's where it starts to be problematic until five, I've really not seen much of an impact in the marketplace, there'll be a little slow down in price increases and right now a slowdown is healthy, they've gone way too much way too fast and so retrenchment is a very healthy thing.   Michael: Yeah. Okay and just for frame of reference for folks, during COVID, the Fed funds rate was zero, right?   Neal: They dropped it. It was zero, correct. So there were we've gone from zero to 2.25, in five and a half months, right and they were threatening to do it for about four months before that, but they wanted the market to adjust before they actually raise the rate. So we've gone up to 2.25. It was zero for two consecutive years. So two years, in two months, the Fed funds rate was zero.   Michael: And has that ever happened in American history that you know if?   Neal: No, I think that pandemic is very unique. We saw the Fed funds rate fall to about 1% in 2009 2010. But they didn't take it down to zero. So the only time they've ever taken it to zero is this time, I expect all future crisis will go beyond zero now that the eurozone has gone negative and Japan's gone negative. There's no stigma attached to going negative. So I think the next crisis will go below zero.   Michael: Wow and that'll be an interesting time to have a loan tied to LIBOR or Sofer?   Neal: It'll be is it's fantastically interesting. I think what we are, Michael, we're living in the middle of the greatest financial experiment in history and it's, it's an experiment that has no precedent, it doesn't have anything that you can look back to, right. We're doing some truly crazy stuff and we're hoping that it will work out even though we have about three years three or 3000 years of monetary history that says it's never worked out for anyone in the past. So we're just hoping that we are different so right it's all about you know, as long as the musical chairs are going people are you know, people are walking and that's how it's going to be and I don't know when the real challenges happen. I think we're getting closer and closer. I feel like China is just about ready to combust at this point. We'll see what happens.   Michael: Okay, well, I will definitely stay tuned, Neal. This was amazing as always, for people that want to pick your brain more, continue the conversation learn more about you. Where's the best place nice for them to do that,   Neal: Um, you can connect with me simply by typing in my name. I'm the only Neal Bawa on the worldwide web. So just NEAL BAWA, hit enter, there's a couple 100 podcasts that I've appeared on. There's webinars, conference recordings, where I'm on stage. If you'd like to chat with me on LinkedIn, once again, I'm the only Neal Bawa on LinkedIn. So go ahead and connect with me there or go to my website, multifamilyu.com. So that's multifamily, followed by the letter u.com. There's about 30,000 people that attend the webinars that are on that site, we have a new one coming up, which is the impact of interest rates on the economy, and the upcoming recession. So real estate at this point is officially in a recession. The housing market is now in a recession, because it's declining. But I think the rest of the economy is going to follow it and so we have a webinar on that and I think that's going to be in three weeks.   Michael; Okay, fantastic. Well, Neal, thank you. Again, really a pleasure to chat with you and have you on and I'm sure we'll stay in touch.   Neal: Awesome. Thanks for having me on.   Michael: You got it, take care.   All right, everyone. That was our episode a big thank you to Neal for coming on love his data driven approach to his conclusions, which I think we probably all could use another dose of that. As always, if you enjoyed the episode, feel free to leave us a rating or review wherever you get your podcasts and we look forward to seeing the next one. Happy investing…

Today we chat with Cisco's head of developer content, community, and events, Michael Chenetz. We discuss everything from KubeCon to kindness and Legos! Michael delves into some of the main themes he heard from creators at KubeCon, and we discuss methods for increasing adoption of new concepts in your organization. We have a conversation about attending live conferences, COVID protocol, and COVID shaming, and then we talk about how Legos can be used in talks to demonstrate concepts. We end the conversation with a discussion about combining passions to practice creativity. We discuss our time at KubeCon in Spain (5:51) Themes Michael heard at KubeCon talking with creators (7:46) Increasing adoption of new concepts (9:27) We talk conferences, COVID shaming, and blamelessness (12:21) Legos and reliability  (18:04) Michael talks about ways to exercise creativity (23:20) Links: KubeCon October 2022: https://events.linuxfoundation.org/kubecon-cloudnativecon-north-america/ Nintendo Lego Set: https://www.amazon.com/dp/B08HVXMQ87?ref_=cm_sw_r_cp_ud_dp_ED7NVBWPR8ANGT8WNGS5 Cloud Unfiltered podcast episode featuring Julie and Jason:https://podcasts.apple.com/us/podcast/ep125-chaos-engineering-with-julie-gunderson-and-jason/id1215105578?i=1000562393884 Links Referenced: Cisco: https://www.cisco.com/ Cloud Unfiltered Podcast with Julie and Jason: https://podcasts.apple.com/us/podcast/ep125-chaos-engineering-with-julie-gunderson-and-jason/id1215105578?i=1000562393884 Cloud Unfiltered Podcast: https://www.cisco.com/c/en/us/solutions/cloud/podcasts.html Nintendo Lego: https://www.amazon.com/dp/B08HVXMQ87 TranscriptJulie: And for folks that are interested in, too, what day it is—because I think we're all still a little bit confused—it is Monday, May 24th that we are recording this episode.Jason: Uh, Julie's definitely confused on what day it is because it's actually Tuesday, [laugh] May 24th.Michael: Oh, my God. [laugh]. That's great. I love it.Julie: Welcome to Break Things on Purpose, a podcast about reliability, learning from each other, and blamelessness. In this episode, we talk to Michael Chenetz, head of developer content, community, and events at Cisco, about all of the learnings from KubeCon, the importance of being kind to each other, and of course, how Lego translates into technology.Julie: Today, we are joined by Michael Chenetz. Michael, do you want to tell us a little bit about yourself?Michael: Yeah. [laugh]. Well, first of all, thank you for having me on the show. And I'm really good at breaking things, so I guess that's why I'm asked to be here is because I'm superb at it. What I'm not so good at is, like, putting things back together.Like when I was a kid, I remember taking my dad's stereo apart; wasn't too happy about that. Wasn't very good at putting it back together. But you know, so that's just going back a little ways there. But yeah, so I work for the DevRel at Cisco and my whole responsibility is, you know, to get people to know that know a little bit about us in terms of, you know, all the developer-related topics.Julie: Well, and Jason and I had the awesome opportunity to hang out with you at KubeCon, where we got to join your Cloud Unfiltered podcast. So folks, definitely go check out that episode. We have a lot of fun. We'll put a link in the [show notes 00:02:03]. But yeah, let's talk a little bit about KubeCon. So, as of recording this episode, we all just recently traveled back from Spain, for KubeCon EU, which was… amazing. I really enjoyed being there. My first time in Spain. I got back, I can tell you, less than 24 hours ago. Michael, I think—when did you get back?Michael: So, I got back Saturday night, but my bags have not arrived yet. So, they're still traveling and they're enjoying Europe. And they should be back soon, I guess when they're when they feel like they're—you know, they should be back from vacation.Julie: [laugh].Michael: So. [laugh].Julie: Jason, how about you? When did you get home?Jason: I got home on Sunday night. So, I took the train from Valencia to Barcelona on Saturday evening, and then an early morning flight on Sunday and got home late Sunday night.Julie: And for folks that are interested in, too, what day it is—because I think we're all still a little bit confused—it is Monday, May 24th that we are recording this episode.Jason: Uh, Julie's definitely confused on what day it is because it's actually Tuesday, [laugh] May 24th.Michael: Oh, my God. [laugh]. That's great. I love it. By the way, yesterday was my birthday so I'm going to say—Julie: Happy birthday.Michael: —happy birthday to myself.Julie: Oh, my gosh, happy birthday. [laugh].Michael: Thank you [laugh].Julie: So… what is time anyway?Jason: Yeah.Michael: It's all good. It's all relative. Time is relative.Julie: Time is relative. And so, you know, tell us a little bit about—I'd love to know a little bit about why you want folks to know about, like, what is the message you try to get across?Jason: Oh, that's not the question I thought you were going to ask. I thought you were going to ask, “What's on your Amazon wishlist so people can send you birthday presents?”Julie: Yeah, let's back up. Let's do that. So, let's start with your Amazon wishlist. We know that there might be some Legos involved.Michael: Oh, my God, yeah. I mean, you just told me about a cool one, which was Optimus Prime and I just—I'm already on the website, my credit card is out and I'm ready to buy. So, you know, this is the problem with talking to you guys. [laugh]. It's definitely—you know, that's definitely on my list. So, anything that, anything music-related because obviously behind me is a lot of music equipment—I love music stuff—and anything tech. The combination of tech and music, and if you can combine Legos and that, too, man that would just match all the boxes. [laugh].Julie: Just to let you know, there's a Lego Con. Like, I did not know this until last night, actually. But it is a virtual conference.Michael: Really.Julie: Yeah. But one of the things I was looking at actually on Lego, when you look at their website, like, to request one of their speakers, to request one of their engineers as a speaker, they actually don't do that because they get so many requests for their folks to speak at conferences, they actually have a dedicated part of their website that talks about this. So, I thought that was interesting.Michael: Well listen, just because of that, if they want somebody that's in, you know, cloud computing, I'm not going to go talk for Lego. And I know they really want somebody from cloud computing talking to Lego, so, you know… it's, you know, quid pro quo there, so that's just the way it's going to work. [laugh].Julie: I want to be best friends with Lego people.Michael: [laugh]. I know, me too.Julie: I'm just going to make it a goal in life now to have one of their engineers speak at DevOpsDays Boise. It's like a challenge.Michael: It is. I accept it.Julie: [laugh]. With that, though, just on other Lego news, before we start talking about all the other things that folks may also want to hear about, there is another new Lego, which is the Van Gogh Starry Night that has been newly released by the time this episode comes out.Michael: With a free ear, right?Julie: I mean—[laugh].Michael: Is that what happens?Julie: —well played. Well, played. [laugh]. So, now you really got to spend a lot of time at KubeCon, you were just really recording podcast after podcast.Michael: Oh, my God. Yeah. So, I mean, it was great. I love—because I'm a techie, so I love tech and I love to find out origin stories of stuff. So, I love to, like, talk to these people and like, “Why did that come about? How did—” you know, “What happened in your life that made you want to do this? Who hurt you?” [laugh].And so, that's what I constantly try and figure out is, like, [laugh], “What is that?” So, it was really cool because I had, like, Jimmy Zelinskie who came from CoreOS, and he came from—you know, they create, you know, Quay and some of this other kinds of stuff. And you know, just to talk about, like, some of the operators and how they came about, and like… those were the original operators, so that was pretty cool. Varun from Tetrate was supposed to come on, and he created Istio, you know? So, there were so many of these things that I just geek out knowing about, you know?And then the other thing that was really high on our list, and it's really high from where I am, is API quality, API testing, API—so really, that's why I got in touch with you guys because I was like, “Wow, that fits in really good, you know? You guys are doing stuff that's around chaos, and you know, I think that's amazing.” So, all of this stuff is just so interesting to me. But man, it was just a whirlwind of every day just recording, and by the end that was just like, you know, “I'm so sorry, but I just, I can't talk anymore.” You know, and that was it. [laugh].Jason: I love that chatting with the creators. We had Zack Butcher on who is also from Tetrate and one of the early Istio—Michael: Yeah, yeah.Jason: Contributors. And I find it fascinating because I feel like when you chat with these folks, you start to understand the context of why things were built. And it—Michael: Yes.Jason: —it opens your brain up to, like, cool, there's a software—oh, now I know exactly why it's doing things that way, right? Like, it's just so, so eye-opening. I love it.Julie: With that, though, like, did you see any trends or any themes as you were talking to all these folks?Michael: Yeah, so a few real big trends. One is everybody wants to know about eBPF. That was the biggest thing at KubeCon, by far, was that, “We want to learn how to do this low-level kernel stuff that's really fast, that can give us all the information we need, and we don't have to use sidecars and things like that.” I mean it was—you know, that was the most excitement that I saw. OTel was another one for OpenTelemetry, which was a big one.The other thing was simplification. You know, a lot of people were looking to simplify the Kubernetes ecosystem because there's so much out there, and there's so many things that you have to learn about that it was super hard, you know, for somebody to come into it to say, “Where do I even start?” You know? So, that was a big theme was simplification.I'm trying to think. I think another one is APIs, for sure. You know, because there's this whole thing about API sprawl. And people don't know what their APIs are, people just, like—you know, I always say people can see—like, developers are lazy in a good way, and I consider myself one of them. So, what that means is that when we want to develop something, what we're going to do is we're just going to pull down the nearest API that does what we need, that has the best documentation, that has the best blog, that has the best everything.We don't know what their testing strategy is; we don't know what their security strategy is; we don't know if they use other libraries. And you have to figure that stuff out. And that's the thing that—you know, so everything around APIs is super important. And you really have to test that stuff out. Yes, people, you have to test it [laugh] and know more about it. So, those are those were the big themes, I think. [laugh].Julie: You know, I know that Kerim and I gave a talk on observability where we kind of talked more high-level about some of the overarching concepts, but folks were really excited about that. I think is was because we briefly touched on OpenTelemetry, which we should have gone into a little bit more depth, but there's only so much you can fit into a 30-minute talk, so hopefully we'll be able to talk about that more at a KubeCon in the future, we [crosstalk 00:09:54] to the selection committee.Michael: Hashtag topics?Julie: Uh-huh. [laugh]. You know, that said, though, it really did seem like a huge topic that people just wanted to learn more about. I know, too, at the Gremlin booth, a lot of folks were also interested in talking about, like, how do we just get our organization to adopt some of these concepts that we're hearing about here? And I think that was the thing that surprised me the most is I expected people to be coming up to the booth and deep-diving into very, very deep, technical-level questions, and really, a lot of it was how do we get our organization to do this? How can we increase adoption? So, that was a surprise for me.Michael: Yeah, you know what, and I would say two things to that. One is, when you talk about Chaos Engineering, I think people think it's like rocket science and people are really scared and they don't want to claim to be experts in it, so they're like, “Wow, this is, like, next-level stuff, and you know, we're really scared. You guys are the experts. I don't want to even attempt this.” And the other thing is that organizations are scared because they think that it's going to, like, create mass hysteria throughout their organization.And really, none of this is true in either way. In reality, it's a very, very scripted, very exacting stuff that you're testing, and you throw stuff out there and see what kind of response you get. So, you know, it's not this, like, you know—I think people just have—there needs to be more education around a lot of areas in cloud-native. But you know, that's one of the areas. So, I think it's really interesting there.Julie: I think so too. How about for you, Jason? Like, what was your surprise from the conference or something that maybe—Jason: Yeah, I mean, I think my surprise was mostly around just seeing people coming back, right? Because we're now I would say, six months into conferences being back as a thing, right? Like, we had re:Invent last year in Vegas; we had KubeCon last year in LA, and so, like, those are okay events. They weren't, like, back to normal. And this was, I feel like, one of the first conferences, that it really started to feel back to normal.Like, there was much better attendance, there was much more just buzz and hallway tracking and everything else that we're used to. Like, the whole reason that we go to conferences is getting together with people and hanging out and stuff, and this one has so far felt the most back-to-normal out of any event that I've been to over the past six months.Michael: Can I just talk about one thing that I think, you know, people have to get over is, you know, I see a lot online, I think it was—I forget who it was that was talking about it. But this whole idea of Covid shaming. I mean, we're going to this event, and it's like, yeah, everybody wants to get out, everybody wants to learn things, but don't shame people just because they got Covid, everybody's getting Covid, okay? That's just the point of life at this point. So, let's just, you know, let's just be nice to each other, be friendly to each other, you know? I just have to say that because I think it's a shame that people are getting shamed, you know, just for going to an event. [laugh].Julie: See, and I think that—that's an interesting—there's been a lot of conversation around this. And I don't think anybody should be Covid-shamed. Look, I think that we all took a calculated risk in coming—Michael: Absolutely.Julie: To this event. I personally gave out a lot of hugs. I hugged some of the folks that have mentioned that they have come up positive from Covid, so there's a calculated risk in going. I think there has been a little bit of pushback on maybe how some of the communication has come out around it. That said, as an organizer of a small conference with, like, 400 people, I think that these are very complicated matters. And what I really think is important is to listen to feedback from attendees and to take that.And then we're always looking to improve, right?Michael: Absolutely.Julie: If everything that we did was perfect right out of the gate, then we wouldn't have Chaos Engineering because there'd be nothing [crosstalk 00:13:45] be just perfectly reliable. And so, if we take away anything, let's take away—just like what you said, first of all, Covid, you should never shame somebody for having Covid. Like, that's not cool. It's not somebody's fault that they caught an illness.Michael: Yes.Julie: I mean unless they were licking doorknobs. And that's a whole different—Michael: Yes. [laugh]. That's a whole different thing, right there.Julie: Conversation. But when we talk about just like these questions around cultural adoption, we talk about blamelessness; we talk about learning from failure; we talked about finding ways to improve, and I think all of that can come into play. So, it'll be interesting to see how we learn and grow as we move forward. And like, thank you to re:Invent, thank you to KubeCon, thank you to DevOpsDays Boise. But these conferences that have started going back in-person, at great risk to organizers and the committee because people are going to be mad, one way or the other.Michael: Yeah. And you can see that people want to be back because it was huge, you know?Julie: Yeah.Michael: Maybe you guys, I'm going to put in a feature request for Gremlin to chaos engineer crowds. Can we do that so we can figure out, like, what's going to happen when we have these big events? Can we do that?Julie: I mean, that sounds fun. I think what's going to happen is there's going to be hugs, there's going to be people getting sick, but there's going to be people learning and growing.Michael: Yes.Julie: And ultimately, I just think that we have to remember that just, like, our systems aren't perfect, and neither are people. Like, the fact that we expect people to be perfect, and maybe we should just keep some mask mandates for a little bit longer when we're at conferences with 8000 people.Michael: Sure.Julie: I mean, that's—Michael: That makes sense.Jason: Yeah. I mean, it's all about risk management, right? This is, essentially what we do in SRE is there's always a risk of a massive outage, and so it's that balance of, right, do what you can, but ultimately, that's why we have SLOs and things is, you can never be a hundred percent, so like, where do we draw the line of here are the things that we're going to do to help manage this risk, but you can never shoot for a perfectly, entirely safe space, right? Because then we'd all be having conferences in padded rooms, and not touching each other, and things like that. There's a balance there.And I think we're all just trying to find that, so yeah, as you mentioned, that whole, like, DevOps blamelessness thing, you know, treat each other with the notion that we're all trying to get through this together and do what we think is best. Nobody's just like John Allspaw said, you know, “Nobody goes to work thinking that, like, their intent is to crash everything and destroy the company.” No one's going to KubeCon or any of these conferences thinking, “Yeah, I'm going to be a super-spreader.”Julie: [laugh].Michael: Yeah, that would be [crosstalk 00:16:22].Jason: Like, everyone's trying not to do it. They're doing their best. They're not actively, like, aggressively trying to get you sick or intentionally about it. But you know—so just be kind to one another.Michael: Yeah. And that's the key.Julie: It is.Michael: The key. Be kind to one another, you know? I mean, it's a great community. People are really nice, so, you know, let's keep that up. I think that's something special about the, you know, the community around KubeCon, specifically.Julie: As we can refine this and find ways, I would take all of the hugs over virtual conferences—Michael: Yes.Julie: Any day now. Because, as Jason mentioned, is even just with you, Michael, the time we got to spend with you, or the time I kept going up to Jfrog's booth and Baruch and I would have conversations as he made me a delicious coffee, these hallway tracks, these conversations, that's what no one figured out how to recreate during the virtual events—Michael: Absolutely.Julie: —and it's just not possible, right?Michael: Yeah. I mean, I think it would take a little bit of VR and then maybe some, like, suit that you wear in order to feel the hug. And, you know, so it would take a lot more in order to do that. I mean, I guess it's technologically possible. I don't know if the graphics are there yet, so it might be like a pixelated version, like, you know, like, NES-style, or something like that. But it could look pretty cool. [laugh]. So, we'll have to see, you know?Julie: Everybody listening to this episode, I hope you're getting as much of a kick out of it as we are recording it because I mean, there are so many different topics here. One of the things that Michael and I bonded about years ago, for our listeners that are—not years ago; months ago. Again, what is time?Michael: Yeah. What is time? It's all relative.Julie: It is. It was Lego, though, and so we've been talking about that. But Michael, you asked a great question when we were recording with you, which is, like—Michael: Wow.Julie: Can—just one. Only one great question.Michael: [laugh].Julie: [laugh]. Which was, how would you incorporate Lego into a talk? And, like, when we look at our systems breaking and all of that, I've really been thinking about that and how to make our systems more reliable. And here's one of the things I really wanted to clarify that answer. I kind of went… I went talking about my Lego that I build, like, my Optim—not my Optimus Primes, I don't have it, but my Voltron or my Nintendo Lego. And those are all box sets.Michael: Yep.Julie: But one of the things if you're not playing with a box set with instruction, if you're just playing with just the—or excuse me, architecting with just the Lego blocks because it's not playing because we're adults now, I think.Michael: Yes, now it's architecting. Yes.Julie: Yes, now that we're architecting, like, that's one of the things that I was really thinking about this, and I think that it would make something really fun to talk about is how you're building upon each layer and you're testing out these new connection pieces. And then that really goes into, like, when we get into Technics, into dependencies because if you forget that one little one-inch plastic piece that goes from the one to the other, then your whole Lego can fall apart. So anyway, I just thought that was really interesting, and I'd wondered if you or Jason even gave that any more thought, or if it was just fleeting for you.Michael: It was definitely fleeting for me, but I will give it some more thought, you know? But you know, when—as you're saying that though, I'm thinking these Lego pieces really need names because you're like that little two-inch Lego piece that kind of connects this and this, like, we got to give these all names so that people can know, that's x-54 that's—that you're putting between x-53 and x-52. I don't know but you need some kind of name for these parts now.Julie: There are Lego names. You just Google it. There are actual names for all of the parts but—Michael: Wow. [laugh].Julie: Like, Jason, what do you think? I know you've got [unintelligible 00:19:59].Jason: Yeah, I mean, I think it's interesting because I am one of those, like, freeform folks, right? You know, my standard practice when I was growing up with Legos was you build the thing that you bought once and then you immediately, like, tear it apart, and you build whatever the hell you want.Michael: Absolutely.Jason: So, I think that that's kind of an interesting thing as we think about our systems and stuff, right? Like, part of it is, like, yeah, there's best practices and various companies will publish, like, you know, “Here's how to architect such-and-such system.” And it's interesting because that's just not reality, right? You're not going to go and take, like, the Amazon CloudFormation thing, and like, congrats, you're done. You know, you just implement that and your job's done; you just kick back for the rest of the week.It never works that way, right? You're taking these little bits of, like, cool, I might have, like, set that up once just to see what's happening but then you immediately, like, deconstruct it, and you take the knowledge of what you learned in those building blocks, and you, like, go and remix it to build the thing that you actually need to build.Michael: But yeah, I mean, that's exactly—so you know, Legos is what got me interested in that as a kid, but when you look at, you know, cloud services and things like that, there's so many different ways to combine things and so many different ways to, like—you know, you could use Terraform, you could use Crossplane, you could use, you know, any of the services in the cloud, you could use FaaS, you could use serverless, you could use, you know, all these different kinds of solutions and tie them together. So, there's so much choice, and what Lego teaches you is that, embrace the choice. Figure out and embrace the different pieces, embrace all the different things that you have and what the art of possibility is, and then start to build on that. So, I think it's a really good thing. And that's why there's so much correlation between, like, kind of, art and tech and things like that because that's the kind of mentality that you need in order to be really successful in tech.Jason: And I think the other thing that works really well with what you said is, as you're playing with Legos, you start to learn these hacks, right? Like, I don't have, like, a four-by-one brick, but I know that if I have three four-by-one flats, I can stack those three and it's the same height as a brick, right?Michael: Yep.Jason: And you can start combining things. And I love that engineering mentality of, like, I have this problem that I need to solve, I have a limited toolbox for whatever constraints, right, and understanding those constraints, and then cool, how can I remix what I've got in my toolbox to get this thing done?Michael: And that's a thing that I'm always doing. Like, when I used to do a lot of development, you know, it was always like, what is the right code? Or what is the library that's going to solve my problem? Or what is the API that's going to solve my problem, you know?And there's so many different ways to do it. I mean, so many people are afraid of, like, making the wrong choice, when really in programming, there is no wrong choice. It's all about how you want to do it and what makes sense to you, you know? There might be better options in formatting and in the way that you kind of, you know, format that code together and put them in different libraries and things like that, but making choices on, like, APIs and things like that, that's all up to the artist. I would say that's an artist. [laugh]. So, you know, I think it all stems though, when you go back from, you know, just being creative with things… so creativity is king.Jason: So Michael, how do you exercise your creativity, then? How do you keep up that creativity?Michael: Yeah, so there's multiple ways. And that's a great segment because one of the things that I really enjoy—so you know, I like development, but I'm also a people person. And I like product management, but I also like dealing with people. So really, to me, it's about how do I relate products, how do I relate solutions, how do I talk to people about solutions that people can understand? And that's a creative process.Like, what is the right media? What is the right demos? What is the right—you know, what do people need? And what do people need to, kind of, embrace things? And to me, that's a really creative medium to me, and I love it.So, I love that I can use my technical, I love that I can use my artistic, I love that I can use, you know, all these pieces all at once. And sometimes maybe I'll play guitar and just put it in the intro or something, I don't know. So, that kind of combines that together, too. So, we'll figure that piece out later. Maybe nobody wants to hear me play guitar, that's fine, too. [laugh].But I love to be able to use, you know, both sides of my brain to do these creative aspects. So, that's really what does it. And then sometimes I'll program again and I'll find the need, and I'll say, “Hey, look, you know, I realized there's a need for this,” just like a lot of those creators are. But I haven't created anything cool, but you know, maybe someday I will. I feel like it's just been in between all those different intersections that's really cool.Jason: I love the electric guitar stuff that you mentioned. So, for folks who are listening to this show, during our recording of the Cloud Unfiltered you were talking about bringing that art and technical together with electric guitars, and you've been building electric guitar pickups.Michael: Yes. Yeah. So, I mean, I love anything that can combine my music passion with tech, so I have a CNC machine back here that winds pickups and it does it automatically. So, I can say, “Hey, I need a 57 pickup, you know, whatever it is,” and it'll wind it to that exact spec.But that's not the only thing I do. I mean, I used to design control surfaces for artists that were a big band, and I really can't—a lot of them I can't mention because we're under NDA. But I designed a lot of these big, you know, control surfaces for a lot of the big electronic and rock bands that are out there. I taught people how to use Max for Live, which is an artist's, kind of, programming language that's graphical, so [NMax 00:25:33] and MSP and all that kind of stuff. So, I really, really like to combine that.Nowadays, you know, I'm talking about doing some kind of events that may be combined tech, with art. So, maybe doing things like Algorave, and you know, things that are live-coding music and an art. So, being able to combine all these things together, I love that. That's my ultimate passion.Jason: That is super cool.Julie: I think we have learned quite a bit on this episode of Break Things on Purpose, first of all, from the guy who said he hasn't created much—because you did say that, which I'm going to call you out on that because you just gave a long list of things that you created. And I think we need to remember that we're all creators in our own way, so it's very important to remember that. But I think that right now we've created a couple of options for talks in the future, whether or not it's with Lego, or guitar pickups.Michael: Yeah.Julie: Is that—Michael: Hey—Julie: Because I—Michael: Yeah, why not?Julie: —know you do kind of explain that a little bit to me as well when I was there. So, Michael, this has just been amazing having you. We're going to put a lot of links in the notes for everybody today. So, to Michael's podcast, to some Lego, and to anything else Michael wants to share with us as well. Oh, real quick, is there anything you want to leave our listeners with other than that? You know, are you looking to hire Cisco? Is there anything you wanted to share with us?Michael: Yeah, I mean, we're always looking for great people at Cisco, but the biggest thing I'd say is, just realize that we are doing stuff around cloud-native, we're not just network. And I think that's something to note there. But you know, I just love being on the show with you guys. I love doing anything with you guys. You guys are awesome, you know. So.Julie: You're great too, and I think we'll probably do more stuff, all of us together, in the future. And with that, I just want to thank everybody for joining us today.Michael: Thank you. Thanks so much. Thanks for having me.Jason: For links to all the information mentioned, visit our website at gremlin.com/podcast. If you liked this episode, subscribe to the Break Things on Purpose podcast on Spotify, Apple Podcasts, or your favorite podcast platform. Our theme song is called, “Battle of Pogs” by Komiku, and it's available on loyaltyfreakmusic.com.

About MichaelMichael is the creator of IT automation platforms Cobbler and Ansible, the latter allegedly used by ~60% of the Fortune 500, and at one time one of the top 10 contributed to projects on GitHub.Links Referenced: Speaking Tech: https://michaeldehaan.substack.com/ michaeldehaan.net: https://michaeldehaan.net Twitter: https://twitter.com/laserllama TranscriptAnnouncer: Hello, and welcome to Screaming in the Cloud with your host, Chief Cloud Economist at The Duckbill Group, Corey Quinn. This weekly show features conversations with people doing interesting work in the world of cloud, thoughtful commentary on the state of the technical world, and ridiculous titles for which Corey refuses to apologize. This is Screaming in the Cloud.Corey: This episode is sponsored by our friends at Revelo. Revelo is the Spanish word of the day, and its spelled R-E-V-E-L-O. It means “I reveal.” Now, have you tried to hire an engineer lately? I assure you it is significantly harder than it sounds. One of the things that Revelo has recognized is something I've been talking about for a while, specifically that while talent is evenly distributed, opportunity is absolutely not. They're exposing a new talent pool to, basically, those of us without a presence in Latin America via their platform. It's the largest tech talent marketplace in Latin America with over a million engineers in their network, which includes—but isn't limited to—talent in Mexico, Costa Rica, Brazil, and Argentina. Now, not only do they wind up spreading all of their talent on English ability, as well as you know, their engineering skills, but they go significantly beyond that. Some of the folks on their platform are hands down the most talented engineers that I've ever spoken to. Let's also not forget that Latin America has high time zone overlap with what we have here in the United States, so you can hire full-time remote engineers who share most of the workday as your team. It's an end-to-end talent service, so you can find and hire engineers in Central and South America without having to worry about, frankly, the colossal pain of cross-border payroll and benefits and compliance because Revelo handles all of it. If you're hiring engineers, check out revelo.io/screaming to get 20% off your first three months. That's R-E-V-E-L-O dot I-O slash screaming.Corey: This episode is sponsored in part by LaunchDarkly. Take a look at what it takes to get your code into production. I'm going to just guess that it's awful because it's always awful. No one loves their deployment process. What if launching new features didn't require you to do a full-on code and possibly infrastructure deploy? What if you could test on a small subset of users and then roll it back immediately if results aren't what you expect? LaunchDarkly does exactly this. To learn more, visit launchdarkly.com and tell them Corey sent you, and watch for the wince.Corey: Once upon a time, Docker came out and change an entire industry forever. But believe it or not, for many of you, this predates your involvement in the space. There was a time where we had to manage computer systems ourselves with our hands—kind of—like in the prehistoric days, chiseling bits onto disk and whatnot. It was an area crying out for automation, as we started using more and more computers to run various websites. “Oh, that's a big website. It needs three servers now.” Et cetera.The times have changed rather significantly. One of the formative voices in that era was Michael DeHaan, who's joining me today, originally one of the—or if not the creator of Cobbler, and later—for which you became better known—Ansible. First, thanks for joining me.Michael: Thank you for having me. You're also making me feel very, very old there. So, uh, yes.Corey: I hear you. I keep telling people, I'm in my mid-30s, and my wife gets incensed because I'm turning 40 in July. But still. I go for the idea of yeah, the middle is expanding all the time, but it's always disturbing talking to people who are in our sector, who are younger than some of the code that we're using, which is just bizarre to me. We're all standing on the backs of giants. Like it or not, one of them's you.Michael: Oh, well, thank you. Thank you very much. Yeah, I was, like, talking to some undergrads, I was doing a little bit of stuff helping out my alma mater for a little bit, and teaching somebody the REST lecture. I was like, “In another year, REST is going to be older than everybody in the room.” And then I was just kind of… scared.Corey: Yeah. It's been a wild ride for basically everyone who's been around long enough if you don't fall off the teeter-totter and wind up breaking a limb somewhere. So, back in the bad old days, before cloud, when everything was no longer things back then were constrained by how much room you had on your credit card like they are today with cloud, but instead by things like how much space you had in the data center, what kind of purchase order you could ram through your various accounting departments. And one of the big problems you have is, great. So, finally—never on time—Dell has shipped out a whole bunch of servers—or HP or Supermicro or whoever—and the remote hands—which is always distinct from smart hands, which says something very insulting, but they seem to be good about it—would put them into racks for you.And great, so you'd walk in and see all of these brand new servers with nothing on them. How do we go ahead and configure these things? And by hand was how most of us started, and that means, oh, great, we're going to screw things up and not do them all quite the same, and it's just a treasure and a joy. Cobbler was something that you came up with that revolutionized how provisioning of bare-metal systems worked. Tell me about it.Michael: Yeah, um, so it's basically just glue. So, the story of how I came up with that is I was working for the Emerging Technologies Group at Red Hat, and I just joined. And they were like, “We have to have a solution to install Xen and KVM virtual machines.” So obviously, everybody's familiar with, like, EC2 and things now, but this was about people running non-VMware virtualization themselves. So, that was part of the problem, but in order to make that interesting, we really needed to have some automation around bare-metal installs.And that's PXE boot. So, it's TFTP and DHCP protocol and all that kind of boring stuff. And there was glue that existed, but it was usually humans would have to click on buttons to—like Red Hat had system-config-netboot, but what really happened was sysadmins all wrote their own automation at, like, every single company. And the idea that I had, and it was sort of cemented by the fact that, like, my boss, a really good guy left for another company and I didn't have a boss for, like, a couple years, was like, I'm just going to make IRC my boss, and let's get all these admins together and build a tool we can share, right?So, that was a really good experience, and it's just basically gluing all that stuff together to fully automate an install over a network so that when a system comes on, you can either pick it out from a menu; or maybe you've already got the MAC address and you can just say, “When you see this MAC address, go install this operating system.” And there's a kickstart file, or a preseed in the case of Debian, that says, “When you're booting up through the installer, basically, here's just the answers and go do these things.” And that install processes a lot slower than what we're used to, but for a bare-metal machine, that's a pretty good way to do it.Corey: Yeah, it got to a point where you could walk through and just turn on all the servers in a rack and go out to lunch, come back, they would all be configured and ready to go. And it sounds relatively basic the way we're talking about it now, but there were some gnarly cases. Like, “When I've rebooted the database server, why did it wipe itself and reprovision?” And it's, “Oh, dear.” And you have to make sure that things are—that there's a safety built into these things.And you also don't want to have to wind up plugging in a keyboard and monitor to all of these individual machines one-by-one to hit yes and acknowledge the thing. And it was a colossal pain in the ass. That's one of the things that cloud has freed us from.Michael: Yeah, definitely. And one of the nice things about the whole cloud environment is like, if you want to experiment with those ideas, like, I want to set up some DHCP or DNS, I don't have to have this massive lab and all the electricity and costs. But like, if I want to play with a load balancer, I can just get one. That kind of gives the experience of playing with all these data center technologies to everybody, which is pretty cool.Corey: On some level, you can almost view the history of all these things as speeding things up. With a well-tuned Cobbler install, it still took multiple minutes, in some cases, tens of minutes to go from machine you're powering on to getting it provisioned and ready to go. Virtual machines dropped that down to minutes. And cloud, of course, accelerated that a bit. But then you wind up with things like Docker and it gets down to less than a second. It's the meantime to dopamine.But in between the world of containers and bare-metal, there was another project—again, the one you're best known for—Ansible. Tell me about that because I have opinions on this whole space.Michael: [laugh]. Yeah. So, how Ansible got started—well, I guess configuration management is pretty old, so the people writing their own scripts, CFEngine came out, Puppet was a much better CFEngine. I was working at a company and I kind of wanted another open-source project because I enjoyed the Cobbler experience. So, I started Ansible on the side, kind of based on some frustrations around Puppet but also the desire to unify Capistrano kind of logic, which was like, “How do I push out my apps onto these servers that are already running,” with Puppet-style logic was like, “Is this computer's firewall configured directly? And is the time set correctly?”And you can obviously use that to install apps, but there's some places where that blurred together where a lot of people are using two different tools. And there's some prior art that I worked on called Funk, which I wrote with Seth Vidal and Adrian Likins at Red Hat, which was, like, 50% of the Ansible idea, and we just never built the config management layer on top. So, the idea was make something really, really simple that just uses SSH, which was controversial at the time because people thought it, like, wouldn't scale, because I was having trouble with setting up Puppet security because, like, it had DNS or timing issues or whatever.Corey: Yeah. Let's dive in a bit to what config management is first because it turns out that not everyone was living in the trenches in quite the same way that we were. I was a traveling trainer for Puppet for a summer once, and the best descriptor I found to explain it to people who are not in this space was, “All right, let's say that you go and you buy a new computer. What do you do? Well, you're going to install the applications you'd like to use, you're going to set up your own user account, you're going to set your password correctly, you're going to set up preferences, copy some files over so you have the stuff you care about. Great. Now, imagine you need to do that to a thousand computers and they all need to be the same. How do you do that?” Well, that is the world of configuration management.And there was sort of a bifurcation there, where there was the idea of, first, we're going to have configuration management that just describes what the system should look like, and that's going to run on a schedule or whatnot, and then you're going to have the other side of it, which is the idea of remote execution, of I want to run an arbitrary command on this server, or this set of servers, or all the servers, depending upon what it is. And depending on where you started on the side of that world, you wound up wanting things from the other side of that space. With Puppet, for example, is very oriented configuration management and the question became, well, can you use this for remote execution with arbitrary commands? And they wound up doing some work with Mcollective, which was a very complicated and expensive way to say, “No, not really.” There was a need for things that needed to hang out in that space.The two that really stuck out from that era were Ansible, which had its wild runaway success, and the one that I was smacking around for a bit, SaltStack, which never saw anywhere approaching that level of popularity.Michael: Yeah, sure. I mean, I think that you hit it pretty much exactly right. And it's hard to say what makes certain things take off, but I think, like, the just SSH approach was interesting because, well for one, everybody's running it. But there was this belief that this would not scale. And I tried to optimize the heck out of that because I liked performance, but it turns out that wasn't really a business problem because if you can imagine you just wrote this little bit of automation, and you're going to run it against your entire infrastructure and you've got 30,000 machines, do you want that to—if you were to, like, run an update command on 30,000 machines at once, you're going to DDoS something. Definitely, right?Corey: Yeah. Suddenly you have 30,000 machines all talk to the same things at the same times. And you want to do them in batches or smear it across.Michael: Right, so because that was there, like, you just add batch support in Ansible and things are fine, right? People want to target little small groups of things. So, like, that whole story wasn't true, and I think it was just a matter of testing this belief that everybody thought that we needed to have this whole network of things. And honestly, Salt's idea of using a message bus is great, but we took a little bit different approach with YAML because we have YAML variables in it, but they had something that compiled down to YAML. And I think those are some differences in the dialect and some things other people preferred, but—Corey: And they use Jinja, at one point to wind up making it effectively Turing complete; you could wind up having this ridicu—like, loop flow control and loops and the rest. And it was an interesting exposure to things, but yikes, at some l—at the same time.Michael: If you use all the language features in anything you can make something complicated, and too complicated. And I was like, I wanted automation to look like grocery lists. And when I started out, I said, “Hey, if anybody is doing this all day, for a day job, I will have failed.” And it clearly shows you that I have because there are people that are doing that all day. And the goal was, let me concentrate on dev and ops and my other things and keep this really, really simple.And some people just, like, get really, really into that automation technology, which is—in my opinion—why some of the earlier stuff was really popular because sysadmin were bored, so they see something new and it's kind of like a Java developer finding Perl for the first time. They're like, “I'm going to use all these things.” And they have all their little widgets, and it gets, like, really complicated.Corey: The thing that I always found interesting and terrifying at the same time about Ansible was the fact that you did ride on top of SSH, which is great because every company already had a way of controlling access by SSH to IT systems; everyone uses it, so it has an awful lot of eyes on the security protocol on the rest. The thing that I found terrifying in the early days was that more or less every ops person would wind up checking this out onto their laptop or whatnot, so whenever they wanted to run something, they would just run it from their laptop over a VPN or whatnot from wherever they happen to be, and you wind up with a dueling banjos type of circumstance where people were often not doing it from a centralized place. And in time, best practices emerged where, okay, that is going to be the command and control server where that runs at, and you log into it. And then you start guarding that with CI/CD flows and the rest. And like anything else, it wound up building some operational approaches to it.Michael: Yeah. Like, I kind of think that created a problem that allowed us to sell a product, right, which was good. If you knew what you were doing, you could use Jenkins completely and you'd be fine, right, if you had some level of discipline and access control, and you wanted to wire that up. And if you think about cloud, this whole, like, shadow IT idea of, “I just want to do this thing, therefore I'm going to get an Amazon account,” it's kind of the same thing. It's like, “I want to use this config management, but it's not approved. Who can stop me?” Right?And that kind of probably got us in the door in few accounts that way. But yeah, it did definitely create the problem where multiple people could be running things at the same time. So yeah, I mean, that's true.Corey: And the idea of, “Hey, maybe I should be controlling these things in Git,” or some other form of version control was sort of one of those evolutionary ideas that, oh, we could treat this like code. And the early days of DevOps, that was a controversial thing. These days, you say you're not doing it and people look at you very strangely. And things were going reasonably well in that direction for a while. Then this whole Docker thing showed up, where, well, what if instead of having these long-lived servers where you have to install updates and run patches and maintain a whole user list on them, instead you had this immutable infrastructure that every time there was a change, you would just go ahead and deploy a brand new set of servers?And you could do this in the olden days with virtual machines and whatnot; it just took a long time to push things out, so do I really want to roll the entire fleet for a two-line config change? Probably not, so we're going to batch it up, or maybe do this hybrid model. With Docker, it takes less than a second to wind up provisioning the—switching over to the new container series and you're done; you can keep going with that. That really solved a lot of these problems.But there were companies that, like, the entire configuration management space, who suddenly found themselves in a really weird position. Some of them tried to fight the tide forever and say, “Oh, this is terrible because it means we don't have a business model anymore.” But you can only fight the future for so long. And I think today, we'd be hard-pressed to say that Docker hasn't won, on some level.Michael: I mean, I think it has, like, the technology has won. But I guess the interesting thing is, config management now seems to be trying to pivot towards networking where I think the tool hasn't ever been designed for networking, so it's kind of a round peg, square hole. But it's all people have that unless they're buying something. Or, like, deploying the undercloud because, like, people are still running essentially clouds on top of clouds to get their Kubernetes deployments going and those are monstrous. Or maybe to deploy a data layer; like, I know Kafka has gotten off of ZooKeeper, but the Kafka-ZooKeeper thing—and I don't remember ZooKeeper [unintelligible 00:14:37] require [unintelligible 00:14:38] or not, but managing those sort of long, persistent implications, it still has a little bit of a place where it exists.But I mean, I think the whole immutable systems idea is theoretically completely great. I never was really happy with the whole Docker development workflow, and I think it does create a problem where people don't know what they're deploying and you kind of encourage that to where they could be deploying different versions of libraries, or—and that's kind of just a problem of the whole microservices thing in general where, “Did somebody change this?” And then I was working very briefly at one company where we essentially built a whole dashboard to detect service versions and what version of the base image everybody was on, and all these other things, and it can get out of hand, too. So, it's kind of like trading some problems for other problems, I think to me. But in general, containerization is good. I just wished the management glue around it was easy, right?Corey: I wound up giving a talk at a conference a while back, 2015 or so, called, “Heresy in the Church of Docker,” and it was a throwaway five-minute lightning talk, and someone approached me afterwards with, “Hey, can you give the full version of that at ContainerCon?” “There's a full version? Yes. Yes, I can.” And it talked about a number of problems with the management layer and the rest.Now, Kubernetes absolutely solves virtually every problem that I identified with it, but when you look at the other side of it, getting Kubernetes rolled out is effectively you get to cosplay being a cloud provider yourself. It is incredibly complicated, and of course, we're right back to managing it all with YAML.Michael: Right. And I think that's an interesting point, too, is I don't know who's exactly responsible for, like, the YAML explosion. And I like it as a data format; it's really good for humans. Cobbler originally used it more of an internal storage, which I think was a mistake because, like, even—I was trying to avoid setting up a database at the time, so—because I knew if I had to require setting up a database in 2007 or 2008, I'd get way less users, so it used flat files.A lot of the YAML dialects people are developing now are very, very nested and they requires, like, loading a webpage, for the Docks, like, all the time and reading what's valid here, what's valid there. I think people learn the wrong lesson from Ansible's YAML usage, right? It was supposed to be, like, YAML's good for things that are grocery lists. And there's a lot of places where I didn't do a good job. But when you see methods taking 15 parameters and you have to constantly have the reference up, maybe that's a sign that you should do something else.Corey: At least you saved us, on some level, from having to do this all in XML. But still, there are wrong ways and more wrong ways to do it. I don't think anyone could ever agree on the right way to approach these things.Michael: Yeah. I mean, and YAML, at the time was a good answer because I knew I didn't want to write and maintain a parser as, like, a guy that was running a project. We had a lot of awesome contributors, but if I had to also maintain a DSL, not only does that mean that I have to write the code for this thing—which I, you know, observed slowing down some other projects—but also that I'd have to explain it to people. Looking kind of like Bash was not a bad thing. Not having to know and learn something, so you can kind of feel really effective in about 15 minutes or something like that.Corey: One of the things that I find really interesting about you personally is that you were starting off in a bare-metal world; Ansible was sort of wherever you wanted to run it. Great, as long as there are systems that can receive these things, we're great. And now the world has changed, and for better or worse, configuration management slash remote execution is not the problem it once was and it is not a best practice way of solving a lot of those problems either. But you aren't spending your time basically remembering the glory years. You're actively moving forward doing some fairly interesting stuff. How would you describe what you're into these days?Michael: I tried to create a few projects to, like, kind of build other systems management things for the same audience for a while. I was building a build server and a new—trying to do some next-gen config stuff. And I saw people weren't interested. But I like having conversations with people, right, and I think one of the lessons from Ansible was how to explain highly technical things to technical audiences and cut out a lot of the marketing goo and all that; how to get people excited about an idea and make a community be really authentic. So, I've been writing about that for really, it's—rebooted blog is only a couple of weeks old. But also kind of trying to do some—helping out companies with some, like, basic marketing kind of stuff, right?There's just this pattern that everybody has where every website starts with this little basic slogan and two buttons and then there's a bunch of adjectives, but it doesn't say anything. So, how can you have really good documentation, and how can you explain an idea? Because, like, really, the reason you're in it is not just to sell stuff, but it's to help people and to see them get excited about your ideas. And there's just, like, we're not doing a good job in this, like, world where there's thousands upon thousands of applications, all competing at once to, like—how do you rise above that?Corey: And that's always the hard part is at some point, this does become your identity and you become known for a thing. And when you start branching out from that thing, you bring the expertise from that area that you were in, but you start applying it to new things. I feel like so many companies get focused—and people get focused—on assuming that their audience is just like them, where they're coming in with the exact same biases, the exact same experiences. And given that basically no one was as deep in the weeds as you were when it came to configuration management, that meant that you were spending time in that side of the world, not in other pursuits which aligned in some ways more directly with people developing other things. So, I suspect this might be one of the weird things we have in common when we show up and see something new.And a company is really excited. It's like, it's basically a few people talking [unintelligible 00:20:12] that both founders are technical. And they're super excited about something they can't quite articulate. And it's this, “Slow down. Tell me exactly what it is your product does.” And that's a hard thing to do because my default response was always the if I don't understand that is clearly the way in which I am deficient somehow. But marketing is really about clear communication and there's not that much of it in our space, at least not for early-stage companies.Michael: Yeah, I don't know why that is. I mean, I think there's this belief in that there's, like, this buyer audience where there's some vice president that's going to buy your stuff if you drop the right buzzwords. And 15 years ago, like, you had to say ‘synergy,' and now you say ‘time to value' or ‘total cost of ownership' or something. And I don't think that's true. I mean, I think people use products that they like and that they need to be shown them to try them out.So like, why can't your webpage have a diagram and a screenshot instead of this, like, picture of a couple of people drinking coffee around a computer, right? It's basic stuff. But I agree with you, I kind of feel dumb when I'm looking at all these tech products that I should be excited about, and, like, the way that we get there, as we ask questions. And the way that I've actually figured out what some of these things do is usually having to ask questions from someone who uses them that I randomly find on my diminishing circle of friends, right? And that's kind of busted.So, Ansible definitely had a lot of privilege in the way that it was launched in the sense that I launched it off Cobbler list and Cobbler list started off of [ET Management Tools 00:21:34] which was a company list. But people can do things like meetup groups really easily, they can give talks, they can get their blogs reblogged, and, you know, hope for some Hacker News or Reddit juice or whatever. But in order to get that to happen, you have to be able to talk to engineers that really want to know what you're doing, and they should be excited about it. So, learn to talk to them.Corey: You have to speak their language but without going so deep in the weeds that the only people that understand it are the folks who are never going to use your product because they want to build it themselves. It's a delicate balance to strike.Michael: And it's a difficult thing to do, too, when you know about it. So, when I was, like, developing all the Ansible docs, I've told people many times—and I hope it's true—that I, like, spent, like, 40% of my time just on the website and the docs, and whenever I heard somebody complain, I tried to fix it. But the idea was like, you can lose somebody really fast, but you kind of have to forget what you know about the product. So, the worst person to sometimes look at that as the person that built it. So, you have to forget what you know, and try to see, like, what questions they're asking, what do they need to find out? How do they want to learn something?And for me, I want to see a lot of pictures. A lot of people write a bunch of giant walls of text, or worse for me is when there's just these little pithy expressions and I don't know what they mean, right? And everybody's, like, kind of doing that these days.Corey: This episode is sponsored in part by our friends at ChaosSearch. You could run Elasticsearch or Elastic Cloud—or OpenSearch as they're calling it now—or a self-hosted ELK stack. But why? ChaosSearch gives you the same API you've come to know and tolerate, along with unlimited data retention and no data movement. Just throw your data into S3 and proceed from there as you would expect. This is great for IT operations folks, for app performance monitoring, cybersecurity. If you're using Elasticsearch, consider not running Elasticsearch. They're also available now in the AWS marketplace if you'd prefer not to go direct and have half of whatever you pay them count towards your EDB commitment. Discover what companies like Equifax, Armor Security, and Blackboard already have. To learn more, visit chaossearch.io and tell them I sent you just so you can see them facepalm, yet again.48]Corey: One thing that I've really found myself enjoying recently has been your substack-based newsletter, Speaking Techis what you call it. And I didn't quite know what to expect when I signed up for it, but it's been a few weeks now, and you are more or less hitting across the board on a bunch of different things, ranging from engineering design patterns, to a teardown of random company's entire website from a marketing and messaging perspective—which I just adore personally; like that is very aligned with how I see the world—Michael: There's more of that coming.Corey: Yeah, [unintelligible 00:23:17] a bunch of other stuff. Let's talk about, for example, the idea of those teardowns. I always found that I have to be somewhat careful in how I talk about it when I'm doing a tweet thread or something like that because you are talking about people's work, let's be clear here, and I tend to be a lot kinder to small, early-stage companies than I am to, you know, $1.6 trillion companies who really should have solved for this by now, on some level. But so much of it misses the mark of great, here's the way that I think about these things. Here's the way that I don't understand what the hell you're telling me.An easy example of this for me, at least I'm curious to get your thoughts on it, I tend to almost always just skim what they're saying, great. Let's look at the pricing page because I find that speaks to people in a way that very often companies forget that they're speaking to customers.Michael: Yeah, for sure. I always tried to find the product page lately, and then, like, the product page now is, like, a regurgitation of the homepage. But it's what you said earlier. I think I try to stay nice to everybody, but it's good to show people how to understand things by counterexample, to some extent, right? Like, oh, I've got some stuff coming out—I don't know when this is actually going to get published—but next week, where I was like just taking random snippets of home pages, and like, “What's everybody doing with the header these days?”And there's just, like, ridiculous amounts of copying going on. But it's not just for, like, people's companies because everybody listening here isn't going to have a company. If you have a project and you wanted to get it noticed, right, I think, like, in the early days, the projects that I paid attention to and got excited about were often the ones that spend time on their website and their messaging and their experience. So, everybody kind of understands you have to write a good readme now but some of, like, the early Ruby crowd, for instance, did awesome, awesome web pages. They know how to pick out fonts, and I still don't know how to pick out fonts. But—Corey: I ask someone good at those things. That's how I pick ‘em.Michael: Yeah, yeah. That's not my job; get somebody that's good at that. But all that matters, right? So, if you do invest a little bit in not promoting yourself, not promoting your company, but trying to help people and communicate to them, you can build that audience around your thing and it makes it a lot more interesting.Corey: There's so many great tools out there that I find on GitHub that other people have to either point me to or I find it when I'm looking at it from a code-first perspective, just trying to find a particular example of the library being used, where they do such a terrible job of describing the problem that they solve, and it doesn't take much; it takes a paragraph or two at most. Or the idea that, “Oh, yeah, here's a way to do this thing. Just go ahead and get your credential file somewhere else.” Great. Could you maybe link to an example of how to do that?It's the basic stuff; assume that someone who isn't you might possibly want to use this. And I'm not even slightly suggesting that you wind up talking your way through how to do all of that. Just link to somewhere that has a good write-up of it and call it good. Just don't get in the way of people's first-time user experiences.Michael: Yeah, for sure. And—Corey: For some reason, that's a radical thought.Michael: Yeah, I think one of the things the industry has—well, not the industry; it's not their problem to solve, but, like, we don't really have a way for people to find what's cool and interesting anymore. So, various people have their own little lists on GitHub or whatever, but there's just so many people posting on the one or two forums people read and it goes by in a day. So, it's really, really hard to get attention. Even your own circle of followers isn't really logging into Twitter or anything, or LinkedIn. Or there's all the congratulations for your five years of Acme Corp kind of posts, and it's really, really hard to get attention.And I feel for everybody, so like, if somebody like GitHub or Microsoft is listening, and you wanted to build, like, a dashboard of here's the cool 15 projects for the week, kind of thing where everybody would see it, and start spotlight some of these really cool new things, that would be awesome, right?Corey: Whenever you see those roundups, that was things like Kubernetes and Docker. And great, I don't think those projects need the help in the same way.Michael: No, no, they don't. It's like maybe somebody's cool data thing, or a cool visualization, or the other thing that's—it's completely random, but I used to write fun graphics programs for fun or games and libraries. And I don't see that anymore, right? Maybe if you find it, you can look for it, but the things that get people excited about programming. Maybe they have no commercial value at all, but the way that people discover stuff is getting so consolidated is about Docker and Kubernetes. And everyone's talking about these three things, and if you're not Google or you're not Facebook, it's really—or Amazon, obviously—it's hard to get attention.Corey: Open-source on some level has changed from a community perspective. And part of it is because once upon a time, you could start with the very low-level stuff and build something, get it up and working. And that's where things like [Cobbler 00:27:44] and Ansible came out of. Now it's, “Click the button and use the thing everyone else is using. And if you're not doing that, what are you doing over there?”So, the idea of getting started tinkering with computers are built on top of so many frameworks and other things. And that's always been the case, but now it's much more apparent in some ways. “Okay, I'm going to go ahead and build out my first HTML file and serve it out using something in Node.” “Great, what is those NPM stuff that's scrolling past?” It's like, “The devil. That is the devil's own language you are seeing scroll past. And you don't need to worry about that; just pretend it's not there.”But back when I was learning all this stuff, we're paying attention to things scrolling past, like, you know, compilation messages and the Linux boot story as it wound up scrolling past. Terrible story; the protagonist was unreliable, but all right. And you start learning how these things work when you start scratching at the things that you're just sort of hand-waving and glossing over. These days, it feels like every time I use a modern project, that's everything.Michael: I mean, it is. And like what, React has, like, 2000 dependencies, right? So, how do you ever feel like you understand it? Or when recruiters are asking for ten years at Amazon. And then—or we find a library that it can only explain itself by being like this other library and requiring these other five.And you read one of those, and it becomes, like, this… tree of knowledge that you have no way of possibly understanding. So, we've just built these stacks upon stacks upon stacks of things. And I tend to think I kind of believe in minimalism. And like, wouldn't it be cool if we just burned this all and start—you know, we burn the forest and let something new regrow. But we tend to not do that. We just—now running a cloud on top of a cloud, and our JavaScript is thousands of miles high.Corey: I really wish that there were better paths for getting started. Like, I used to think that the right way to wind up learning how all this stuff work is to do what I did: Start off as, you know, the grumpy sysadmin type, and then—or help desk—and then work your way up and the rest. Those jobs aren't there anymore, and it doesn't leave people in a productive environment. “Oh, you want to build a computer game. Great. For an iPhone? Terrific.” Where do you go to get started on that? It's a hard thing to do.And people don't care at that scale, nor should they necessarily, on how to run your own servers. Back in the day when you wanted to have a blog on the internet, you were either reduced to using LiveJournal or MySpace, or you were running your own web server and had to learn how to make sure that it didn't become an attack platform. There was a learning curve that was fairly steep. Now, there are so many different paths to go down, you don't really need to know how any of these things even work.Michael: Yeah, I think, like, one of the—I don't know whether DevOps means anything as a topic or not, but one of the original pieces around that movement was systems administrators learning to code things and really starting to enjoy it, whether that was Python or Ruby, and so on. And now it feels like we're gluing all the things together, but that's happening in App Dev as well, right? The number of people that can build a really, really good library from the ground up, like, something that has C bindings, that's a really, really small crowd. And most of it, what we're doing is gluing together other people's libraries and compensating for the flaws and bugs in them, and duct tape and error handling or whatever. And it feels like programming has changed a lot because of this—and it's good if you want to get an idea up quickly, no doubt. But it's a different experience.Corey: The problem I always ran into was the similar problems I had with doing Debian packaging. It was always the, oh, great, there's going to be four or five different guides on how to do it—same story with RPM—and they're all going to be assuming different things, and you can crossover between them without realizing it. And then you just do something monstrous that kind of works until an actual Debian developer shoves you aside like you were a hazard to everyone around you. Let me do it for you. And there we go.It's basically, get people to do work for you by being really bad at it. And I don't love that pattern, but I'm still reminded of that because there are so many different ways to achieve any outcome that, okay, I want to run a ridiculous Hotdog or Not Hotdog style website out there. Great. I can upload things. Well, Docker or serverless? What provider do I want to put it on? And oh, by the way, a lot of those decisions very early on are one-way doors that you don't realize you're crossing through, as well as not knowing what the nuances of all of those things are. And that's dangerous.Michael: I think people are also learning the vendor as well, right? Some people get really engrossed in whether it's Amazon, or Google, or HashiCorp, or somebody's API, and you spend so much of your brain cells just learning how these people's systems work versus, like, general programming practices or whatever.Corey: I make it a point to build something on other cloud providers that aren't Amazon every now and then, just because I don't want to wind up effectively embracing a monoculture.Michael: Yeah, for sure. I mean, I think that's kind of the trend I see with people looking just at the Kubernetes stuff, or whatever, it's that I don't think it necessarily existed in web dev; there seems to be a lot of—still a lot of creativity and different frameworks there, but people are kind of… what's popular? What gets me my next job, and that kind of thing. Whereas before it was… I wasn't necessarily a sysadmin; I kind of stumbled into building admin tools. I kind of made hammers not houses or whatever, but basically, everybody was kind of building their own tools and deciding what they wanted. Now, like, people that are wanting to make money or deciding what people want for them. And it's kind of not always the simplest, easiest thing.Corey: So, many open-source projects now are—for example, one that I was dealing with recently was the AWS CLI. Great, like, I'm thrilled to throw in issues and challenges here, but I'm not going to spend significant time writing code against it because, one, it's basically impossible to get these things accepted when all the maintainers work at Amazon, and two, is it really an open-source project in the way that you and I think about community and the rest, but it's basically sole purpose is to funnel money to Amazon faster. Like, that isn't really a community ethos I feel comfortable getting behind to be perfectly honest. They're a big company; they can afford to pay people to build these things out, full time.Michael: Yeah. And GitHub, I mean, we all mostly, I think, appreciate the fact that we can host the Git repo and it's performant and everything, and we don't have blazing unicorns quite as often or whatever they used to have, but it kind of changed the whole open-source culture because we used to talk about things on mailing lists, like, what should this be, and there was like an upfront conversation, or it might happen on IRC. And now people are used to just saying, “I've got a problem. Fix it for me.” Or they're throwing code over the wall and it might not be the code or feature that you wanted because they're not really part of your thing.So before, people would get really engrossed with, like, just a couple of projects, and if they were working on them as kind of like a collective of people working against different organizations, we'd talk about things, and they kind of know what was going on. And now it's very easy to get a patch that you don't want and you're, like, “Oh, can you change all of these things?” And then somebody's, like, now they're offended because now they have to do all this extra work, whereas that conversation didn't happen. And GitHub could absolutely remodel themselves to encourage those kinds of conversations and communities, but part of the death of open-source and the fact that now it's, “Give me free code,” is because of that kind of absence of the—because we're looking at that is, like, the front of a community versus, like, a conversation.Corey: I really want to appreciate your taking so much time out of your day to basically reminisce about some of these things. But on a forward-looking basis, if people want to learn more about how you see things, where's the best place to find you?Michael: Yeah. So, if you're interested in my blog, it's pretty random, but it's michaeldehaan.substack.com. I run a small emerging consultancy thing off of michaeldehaan.net. And that's basically it. My Twitter is laserllama if you want to follow that. Yeah, thank you very much for having me. Great conversation. Definitely making all this technology feel old and busted, but maybe there's still some merit in going back—Corey: Old and busted because it wasn't built this year? Great—Michael: Yes.Corey: —yes, its legacy, which is a condescending engineering term for ‘it makes money.' Yeah, there's an entire universe of stuff out there. There are companies that are still toying with virtualization: “Is this something we get on board with?” There's nothing inherently wrong with that. I find that judging what a bunch of startups are doing or ‘company started today' is a poor frame of reference to look at what you should do with your 200-year-old insurance company.Michael: Yeah, like, [unintelligible 00:35:53] software engineering is just ridiculously new. Like, if you compare it to, like, bridge-building, or even electrical engineering, right? The industry doesn't know what it's doing and it's kind of stumbling around trying to escape local maxima and things like that.Corey: I will, of course, put links to where to find you into the [show notes 00:36:09]. Thanks again for being so generous with your time. It's appreciated.Michael: Yeah, thank you very much.Corey: Michael DeHaan, founder of Cobbler, Ansible, and oh, so much more than that. I'm Cloud Economist Corey Quinn, and this is Screaming in the Cloud. If you've enjoyed this podcast, please leave a five-star review on your podcast platform of choice—and/or smash the like and subscribe buttons on the YouTubes—whereas if you've hated this podcast, please leave a five-star review on your podcast platform of choice, smash the buttons as mentioned, and leave a loud, angry comment explaining what you hated about it that I will then summarily reject because it wasn't properly formatted YAML.Corey: If your AWS bill keeps rising and your blood pressure is doing the same, then you need The Duckbill Group. We help companies fix their AWS bill by making it smaller and less horrifying. The Duckbill Group works for you, not AWS. We tailor recommendations to your business and we get to the point. Visit duckbillgroup.com to get started.Announcer: This has been a HumblePod production. Stay humble.

Mike Isaacson: Of course you're gonna be replaced. No one lives forever. [Theme song] Nazi SS UFOsLizards wearing human clothesHinduism's secret codesThese are nazi lies Race and IQ are in genesWarfare keeps the nation cleanWhiteness is an AIDS vaccineThese are nazi lies Hollow earth, white genocideMuslim's rampant femicideShooting suspects named Sam HydeHiter lived and no Jews died Army, navy, and the copsSecret service, special opsThey protect us, not sweatshopsThese are nazi lies Mike: Hello and welcome to another episode of The Nazi Lies Podcast. Subscribe to our Patreon to join our book club. This should be an interesting episode. I've got Dr. Michael Cholbi with me. He's chair in philosophy at the University of Edinburgh and editor of the volume Immortality and the Philosophy of Death. He's joining me to discuss Replacement theory. Welcome to the podcast, Dr. Cholbi. Michael Cholbi: Thanks very much, I really appreciate the invitation. Mike: All right, so before we get too deep into the philosophy, talk a bit about what you study and how it contributes to the human experience. Michael: Well, I'm a philosopher, and I specialize in particular in ethics. Within ethics, much of my research addresses philosophical issues, ethical issues, related to death and mortality. Some of the issues that I have written on include things like suicide and assisted dying, the desirability of immortality, the rationality of attitudes such as fear toward death, and most recently, working a significant bit on philosophical questions related to grief and bereavement. In terms of what I think it contributes to the human experience--well, I hope it contributes something to the experience--I do think that it's probably the case that even if non-human creatures have some understanding of death, some inchoate understanding of death, we human beings learn at a pretty early age about death, and we learn at a pretty early age as well, that death is ultimately unavoidable. We learn that every creature that we have ever known, every creature that ever will exist including ourselves, does die eventually. And I think as a consequence of that, we have to live our lives in light of that fact. It seems to be pretty clear that our attitudes about death and mortality impact a lot of how we approach the world, what our attitudes are, what our aspirations are. So I'd like to think that philosophy of death or dying is a subject that is relevant to people not because of, you know, their being a member of a profession, or because they come from a certain part of the world or whatever it might be, but simply because they're human and they are aware of the fact of their mortality. I think we all grapple with it, and I think that philosophy has some particular tools or methods that can help people grapple with it in a helpful way. Mike: Now, the reason I wanted to have you on is because I think replacement theory sort of revolves around a fear of death or an inability to grapple with one's own mortality. So there's this idea of being replaced, it's obviously fundamental to the theory itself, and I think this relates to the idea of the first part of your book, “Is death bad for those that die?” I think that replacement theory would answer in the affirmative, and probably most people, though less frantically. So what do philosophers have to say on this question? Does anyone say no? Michael: Well, I actually think there's a pretty significant contingent, right, of philosophers in different traditions who don't think that death is bad for the person who dies, or at least isn't bad necessarily. And I think that those who hold that view fall into several different categories. One category are those philosophers who believed in the afterlife. A significant number of philosophers have worked in Christian and Islamic traditions and of course, according to those traditions, death is not really the end of us; it's more like a transition for us in that we change from being mortal embodied living creatures to being immortal creatures. Not all of the thinkers who believe in afterlife have believed in what we would think of as religions in the usual sense. Socrates famously argued that his death was not going to be bad for him because this was his opportunity to be released from his body and to become acquainted with the eternal and unchanging forms that he believed are the source of all knowledge. Another school of thought that has denied that death is bad for us were the Epicureans and they have their contemporary defenders. Epicurean philosophers believe that death is neither good nor bad for us. Their famous slogan is "Death's nothing to us," and their point of view is that death is the end of us. We don't survive it. There's no afterlife. And because we don't survive it, we don't experience anything bad, there's nothing to be bad about death, and we simply don't exist. So in their view, death is neither bad nor good. Then there's a third school of thought that's a bit more contemporary. Most philosophers who adopt this school of thought would call themselves Deprivationists or Comparativists, and roughly the idea is something like this, that your death can be bad for you, and the way it can be bad for you is that if you die at a particular point in time, then had you not died at that time you would have lived longer, and had you lived longer, there's the possibility that you would have had a better life overall. So were I to die today then that means I would not survive longer, and perhaps had I survived longer, I would have had the opportunity to have a better life, a happier, more fulfilling life, to say. So there's certainly been many schools of philosophical thought, many philosophers, that have thought that death is not bad for us, or at least not necessarily bad for us, I should say. That said, I think it's been one of the sort of perennial questions in philosophy and there are a good number of people on the other side of the ledger who think that there's something deeply terrible about death just insofar as it represents the kind of destruction of our consciousness or of our subjectivity. It's bad simply insofar as it represents the cessation of the existence of the only thing that each of us can really say that we know or count on–ourselves. And maybe that's bad enough to make death bad. Mike: This kind of gets us into the next topic I want to get into. One of the topics that comes up in your book is the idea of life as a narrative arc that concludes with your death. And it seems like that is roundly refuted but it still feels compelling. It forms the basis of most action, adventure, sci fi, fantasy, etc, stories. And it kind of implies destiny, which is something crucial to replacement theory. Even the Comparative approach touched on in the first part of the book takes for granted one's destiny that we compare, you know, beyond one's ultimate death, or one's untimely death. Replacement theory kind of takes this narrative arc story of an individual life and puts it at the meta level with the grand narrative of the nation. So, how do philosophers take on this idea of life as a story, presumably that concludes with one's death? Michael: Well, I certainly think that outside of philosophy and say psychology, we see an abundance of evidence that perhaps one of the defining features of human beings is that we're storytellers, right? We tell stories about ourselves, about other people, about our communities. And it's certainly possible to look at one's life as a narrative, as a kind of story. There are philosophers who have denied that this is sort of essential to us. There's a living philosopher now named Galen Strawson who has essentially said that, or at least from his point of view, he lives his life as a series of disconnected episodes as if there's sort of no narrative, unity, or structure to them at all. And of course, there's also the possibility that we tell stories about our lives or craft narratives about our lives that turn out to be false or incoherent or really don't make any sense. I don't think necessarily that the notion that we view our lives as narratives and our lives as narratives implies destiny. In fact, I think a lot of what people are attempting to do in the course of their lives is to try to craft a life that corresponds to a certain story. So, perhaps you have a life where a certain kind of adversity was present early on in life, but one of the central things that you tried to do was to overcome that adversity, and by the end of your life, it's clear that you had overcome that adversity. That's a pretty common trope in the stories that people aspire to create for their lives. I think at the collective level-- and that seems to be really what sort of Nazi replacements theory is operating at a sort of meta level as you said-- you know, the notion that we aspire to tell stories about ourselves that connect us with others, and in particular connect us with others who will continue to exist after we are gone is a very powerful human equation. I think certainly, many people when they think about what they want out of their lives, they want in some ways their lives to transcend their own biographies, right, to have a legacy, to leave an impact in the world, to improve life for the next generation. In fact there's a philosopher recently, Samuel Scheffler, who has kind of coined this idea of the "collective afterlife" that much of what we do and care about, when we sit back and reflect upon it, seems to assume that there will be people who will exist after we're gone. So if you're a cancer researcher, and you were to learn that in the days after your death the entire earth and the whole human species were to be destroyed by an asteroid, Schaeffler says that would probably change your goals, right? You wouldn't think that curing cancer was so important a goal. So I think it's pretty baked in. I think, to human nature to be able to view our lives as stories, to want our stories to interconnect with other people, other members of our family, our community our nation, our religion. It's actually a very commonplace feature of human life that we struggle with death, and one of the ways that we try to address that struggle, I think, is by crafting a narrative that transcends ourselves as individuals. Mike: All right. So your book ends with a part on immortality, which I think is also important for Replacement theory. This idea that you will somehow live on through your nation or your race or your genes or whatever. It seems like a mystical way of achieving immortality. So, historically philosophically, how do people seek to attain immortality? How does it color the way we navigate the world? Michael: Well, I mean  in some ways I would say that the desire for a kind of immortality that is symbolic, as some people have said, a kind of immortality that doesn't involve literally surviving as an individual, but a kind of immortality that consists in having a legacy or leaving an impact on the world. That kind of immortality is, in some sense, less mystical than in certain other ways of thinking about immortality. I suppose the most mystical or most puzzling is one that I was referring to earlier in our conversation, you know, the notion of an afterlife. It does seem to be on its face puzzling how we can die and be entirely completely dead and yet somehow survive that and come out on the other side, so to speak. But certainly, the various narratives of the afterlife are one of the ways that people have thought they could attain immortality. Another, of course, is what we've been calling legacy through family, culture, religion, nation, and so forth. And a third one-- and this is the one I suppose that sometimes people forget about-- is that you could conceivably attain immortality simply by not dying. [laughs] So you know, if you were to be able to find the proverbial fountain of youth, that would give you eternal life rather than some post mortem immortal life, that'd be a kind of immortality too. I think in terms of the place that thinking about mortality has in human life, you know, there's a school of psychologists led by Sheldon Solomon who put forward something called terror management theory. And as the name suggests, what terror management theory is about is the idea that we human beings are aware of our deaths, and we either find this completely incomprehensible that we could die, or we find it completely terrifying, and either way, we adopt certain strategies, perhaps subconscious or unconscious strategies, to try to manage or address that anxiety. In this respect, the terror management theorists are following upon the work of an anthropologist's writing in the 1970s named Ernest Becker, he wrote a famous book called The Denial of Death. But the terror management theorists in effect say to us, "Well, many of us work very hard to either deny that we die. I suppose that could be one way of looking at belief in the afterlife as kind of the assertion that we simply don't die really. Or we try to live our lives in such a way that we're kind of reassured by the prospect that even if we do die, things that we care about continue, right? Our institutions that we're allied with, the community that we live in, our families, sports clubs that we root for, all of those kinds of things may continue to exist. And that gives us a kind of immortality that's not sort of metaphysical, right? It's not where you actually continue to exist, but I suppose you could call it a symbolic or ethical immortality." But again, I think that I agree with the terror management theorists that somewhere deep in most of our consciousness is the awareness of the fact of our death, and it probably has a huge influence on how we behave individually. It's probably responsible for many of the principal features of human culture. Anthropologists have observed that pretty much every culture that has ever been studied has beliefs and rituals surrounding death, right? [laughs] That's like the starting point for anthropologist's study of the world. So yes, definitely immortality, or striving for immortality, is a way to wrestle or grapple with a mortality that I think we all come to appreciate early on in life. Mike: So, replacement theory has been around for a while although it didn't really have a formal name as a theory until the Christchurch shooter wrote his manifesto, The Great Replacement. One thing I found interesting about the manifesto was the statistic he chooses to focus on. So fascists, racists, xenophobes, they generally appeal to a variety of statistics—racial crime statistics, racial population demographics, not very often racial immigration rates. But the Christchurch shooter chose to focus on racial birth rates. For him, death is the birth of the Other. There's this fear of being bred out. For fascists, there's a sort of philosophical underpinning to this. It has to do with how they view the life and the nation. They consider the nation or identity or whatever, to be literally a living organism or super organism. This implies all the normal things about life–the power of decision making, a lifecycle, etc. For fascists, the nation is a living thing with the state as its power of cognition. This is very similar to one thing we discussed on a previous episode, The Great Chain of Being, this idea that a kingdom is a living organism with the king is the head, and various classes of society as various body parts. So whereas The Great Chain of Being is held together by divine right, fascism is held together by kinship, yielding culture, civilization, politics, economics, etc. This kinship is a unifying force that fuses individuals into an organic nation. And like all living beings, a nation is born; it has a youth, it has a maturation, a frail old age, and an eventual death. Now, fundamentally this comes from a fascist obsession with the organic and applying pseudo-biological models to everything. Anyway, here's my question. How does death shape the way we view non-living phenomena? Michael: Hm. That's the toughest question you've asked me. When we're thinking about non-living phenomenon, are we thinking about just sort of matter? [laughs] Mike: One example you can think of may be like the way that we think of when a computer breaks down, it dies. You know? But also like the idea that a nation in decline is dying or things like that. Michael: Okay, I see. So death as a sort of metaphor for nonliving things, things that can't in some literal sense die. Good. Okay. Again, I think in some ways this goes back to storytelling. There is this well observed psychological tendency we have to attribute agency, personhood, to things that our better selves know aren't agents and don't have personhood. You know, your cell phone breaks down, your cell phone dies on you-- noticed how I used that word dies-- we tend to personify it, right? We sort of think of it as something like an organism. Now, part of that, of course, is simply that thinking of things as having agency, as being person-like, is one of the ways that we try to conceptualize the world around us. And of course, this has some limitations. Sometimes I think you could say that perhaps certain advances in science have been impeded because we have some difficulty in understanding the prospect that events can happen without there being a storyteller or something sort of behind these events that instigates them or chooses them. This is kind of the basis for the infamous argument for God's existence, the argument from design that the world seems so orderly and harmonious in certain sorts of ways. And so this argument tries to infer that that order, that harmoniousness had to have been willed into existence by a god, right? By some sort of divinity. It's certainly, I think, an instinct we have to personify other beings even when they're not persons, to treat them as agents even when they're not agents. I suppose that there's a kind of distortion there as at root in thinking about collective entities as if they are organisms. They're not organisms. And you're certainly right that there's something perhaps misguided about the Nazi replacement theory insofar as it thinks of society as a kind of organism that has these parts that can be healthy or diseased. And I suppose that part of the Nazi ideology has been to try to extirpate the diseased parts in order to preserve and maintain the healthy parts. I'm not sure it's the metaphor that's the problem, but perhaps the particular construal ofit that the Nazi ideology gives, that societies are collectivities or organisms that have these parts that thrive or can be unhealthy on their own. Mike: Okay so there was one article in the volume that at least one review I read took exception to. So the article in question is titled “Constructing Death as a Form of Failure: Addressing Mortality in a Neoliberal Age.” Now I won't make you rehash someone else's article. But I do want to talk about kind of the underriding theme of this article which is the idea that social values shape the way we conceptualize death. So how do social values shape the way we conceptualize death? Michael: I think that particular article was emphasizing a certain way in which contemporary societies sometimes seem to understand death. That death is a sort of failure and that we should attempt to extirpate it, eliminate it if we can, or delay it as long as possible. I mean, certainly many people as they face death, as they become ill and their days become short, some people--not all--do seem to think that their deaths would amount to a kind of failure. Even some physicians have difficulty letting go of the idea that a patient who dies is a patient that they have failed. But I think that's an indication of a sort of broader phenomenon and a broader reality where societies certainly do have values that invite certain interpretations or understandings of the significance of death. Just to give a sort of stark contrast, societies like ours that suppose often that the best sort of life is one that is very productive, where you have a lot of accomplishments, where you enjoy the various kinds of successes and various kinds of material goods. Well, death then looks like the end of all that, and that looks to be a misfortune. Conversely, if one looks at societies or cultures that have a much more communitarian or perhaps cyclical picture of the human condition, they don't necessarily seem to view death as the end of something good or a kind of failure. They view it as a fact that we need to reconcile ourselves to, because again we do eventually die. So I certainly think that our attitudes toward death have very rich logical and evidential interconnections with other things that we care about. And it certainly seems to be that with respect to the theme of your podcast, the Nazi belief system views deaths of white people or white culture or white civilizations as a profound loss, because of course the background ideology is one where those groups or those individuals are supposed to sort of be eternal to reign supreme. And so it's unsurprising then that they would view death as such a detrimental blow to them. Mike: All right. Now obviously, you didn't compile this book as a metaphor for replacement theory. So what do you hope that people get out of your book? Michael: Well, there's of course a collection of articles by a number of scholars--only one of the articles is by me--but I think that what this book can offer people is a richer understanding of two distinct questions that nevertheless interlock or overlap, if you will. So the first question that the book addresses is really the first question you asked about today; is death bad for us? Should we think that it's a bad thing? I think there's a diversity of opinions about this as I mentioned. There are certainly philosophical traditions that have thought that death is bad for us, others that have thought that it isn't bad in fact it's neither good nor bad. Others sort of thought that it may be bad depending upon sort of the circumstances of your death and the circumstances of your life. So I'm hoping that people will garner a more robust understanding of why that's an interesting question and the different ways that philosophers might answer it, and the kinds of arguments they give for their positions. Now, the other question that I think people will gain some insight about is the question of whether immortality would be good for us. It's natural to think that if death is bad for us then it would have to follow that the absence of death, which is to say immortality, would be good for us. But many philosophers have been skeptical about that too. [laughs] They've sort of argued that we're simply not built to be immortal, we would ultimately find the life of an immortal boring and tedious. We would end up like the immortal gods of Greek and Roman mythology where all they seemed to do with their days is sort of meddle in the lives of mortals and create mischief. Others have thought that this would amount to such a distortion of our values, you know, certain kinds of things that we care about in our mortal lives. They wouldn't be sustainable if we were immortal, right? I mean, what would it mean to marry someone, you know, to use that language "till death do us part" if death never comes? [laughs] Would we still value our romantic relationships in the same way? That's just one example where people have wondered whether immortality would in fact alter our values beyond recognition. But I guess what I'm hoping people will see in the book is that those two questions about the value of death and particularly whether it's bad, and on the other hand whether immortality would be good, are both independently interesting, but also, I think, interesting jointly. Because the question of the value of immortality arises very naturally if you believe that in fact death is bad for us. Mike: Okay. Well, Dr. Cholbi, thanks so much for coming on to The Nazi Lies Podcast to talk about death and replacement theory. The book again is Immortality and the Philosophy of Death out from Rowman and Littlefield. Thanks again. Michael: Thank you. It was really a pleasure to talk to you. Mike: If you want to be an upcoming guest with us, join The Nazi Lies Book Club on Patreon. Patrons get access to the Discord server where we host the book club and occasionally share Animal Crossing memes. Patrons also get a bundle of merch for signing up, access to The Nazi Lies Calendar, and advance show notes, transcripts and episodes. See you on the Discord! [Theme song]

What you'll learn in this episode: Why you won't see results if you have a “set it and forget it” mentality about your website Why jewelers should give their website as much attention as a brick-and-mortar location How jewelers can use tricks of the trade to encourage customers to purchase items online, even if jewelry is traditionally bought in person  How jewelry brands can take advantage of the new shopping feature on Instagram Why the jewelry business is more like Crate & Barrel than Sephora—and why that distinction is important About Michael Burpoe Michael Burpoe is Director of User Experience for Punchmark, a digital marketing agency that specializes in the jewelry industry. Michael created Punchmark's UX team, which was assembled to take very specific initiatives toward fine-tuning tools and features, and improving the platform on both the front-end and back-end. Since early 2019, Michael has also headed up the strategy, planning, and execution behind Punchmark's Livestream Education program, the In The Loupe podcast, and the Punchmark Community on Facebook. Originally from Saranac Lake, NY, in Michael's spare time you can find him practicing Brazilian Jiu Jitsu or painting cityscapes.  Additional Resources: In the Loupe on Spotify In the Loupe on Apple Podcasts Website Blog Facebook Photos: Design Themes: Podcast Logo: Website Samples: After working with jewelry brands of all sizes for the last several years, Michael Burpoe has learned a thing or two about the strategies that make jewelry businesses more successful online. As Director of User Experience for Punchmark, Michael has helped even the most hesitant jewelers invest in their websites and reap the rewards of a fine-tuned digital marketing strategy. He joined the Jewelry Journey Podcast to explain why selling jewelry online is only going to become more common; how to make customers feel comfortable buying luxury items online; and how jewelry companies can use digital marketing tricks to increase sales. Read the episode transcript here.  Sharon: Do you find that the people who are calling your company, prospective clients, do they tend to be in an older demographic, like a baby boomer? Not that they don't understand what you're saying, but do they see themselves in you, let's say? Michael: That's a great question. It depends. If you had asked me when I started out at Punchmark about five years ago what the average demographic of people coming to us for a website is, a lot of the time, it's an older demographic. Probably 60, 65 or so, looking for their first website or saying, “Oh I have this really bare-bones website and we need to get a modern website.” The reason why is because they went to some jewelry show and they were told by a speaker, “Hey, you need to have an online presence,” and they're like, “Alright, I'm here,” but they haven't really been convinced of the value of it.  Now what I'm seeing is that, again, we're in a Covid world where the impending-ness and the seriousness of business are paramount. A lot of times the people who are running the website aren't the owners anymore. They know it's a full-time job, like I said. You can't have the business owner being the only one that touches the website. It's not going to get the love it needs. A lot of times we're seeing younger people who are involved in the online business, whether that means it's their store manager or the children of the owner. Sometimes they are specialists who they hired specifically for their website, which I advocate for. We're seeing a switch in that. I think a lot of people still need to be convinced of the value of a website, but it's becoming better, I'd say. Sharon: I'm almost afraid to ask, but once you've done the website, do your clients understand that's just the beginning? That there's SEO, PPC and social media? Do they understand there's a lot more? Michael: Early on when I first started here, they did not know that. They thought that it was a set it and forget it methodology. They get it up, they launch their website, they push it live, and they think it's going to do all the things for them. That is not the case, and we do our best to communicate that as early and often as we possibly can. I always say to people, “Your website will never be done—ever, ever, ever, ever. It has to be constantly updated.” We do have services for that kind of stuff. This isn't a sales pitch. We do have services where people can pay for us to do a lot of the ongoing work: creating landing pages, doing their social media, taking on their SEO strategy. There are services out there for them, not just with us, but we need people to understand that you can't just set it up and it's going to make $1 million on its own. It takes some work. It takes some thought. Sharon: You said an important word, strategy. How do you explain to them that you can't have it look like the Lifesavers package over here and the Tiffany package over there? How do you explain this? Michael: It depends on your service. Every business, it's like its own unique person. They all have brand voice and brand ideology and all those things that come into it; that's the bigger picture. When it comes to the web presence in general, it comes into things like what are your goals as a business? What is your brick and mortar doing as far as dollars? Is it a $1 million dollar store? Is it a $5 million store? Is it a $20 million store?  We service the entire gambit. Are you in a small town? That gives you a different strategy. Do you have competitors? Are there other jewelry stores in your town? I'm from a town of 4,000 people. There was one jewelry store in the next town over, and those people have a different strategy for, for example, pay-per-click or SEO than people in Los Angeles, where there's a jewelry store every mile. That is a different strategy as far as how centralized they should be targeting, how broad. The people in the next town over who have a jewelry store, they can set their search radius to 40 miles or 50 miles, whereas the people in Los Angeles need to be targeting very hyper-specific keywords. It's also going to cost a lot more money because the competition is more. So, it all depends. There's no hard-and-fast rule when it comes to, “Oh, you need to be doing X,” because it has to be tailored to what your business approach is as well as where you're located. Sharon: I'm sure you're thinking about this when you're thinking about the user experience, but tell us more about how that role differs. Doesn't everybody in a sense have direct user experience? Michael: I think that's a great question also. User experience is very much the nebulous specter that we're always trying to catch. I always say I can feel it when I feel it. Buying with Amazon—I hate using Amazon for the experience, but let's even talk about Nike. Nike makes great shoes. I buy all my shoes from Nike. Well, what Nike does that is so incredible is that they make it so you can find your product as seamlessly and without pause as possible. When I am buying a pair of shoes, I know I can go in and find the shoes I want without having to look. You go on. You click on shoes. They ask you men's or women's shoes. Well, I want men's. Do you want running shoes or trail shoes, because there's a difference? I want street running shoes. You click on those. They show you all of them. They have alternative angles. Those are all things that go into user experience. The other things that go into it are kind of magic tricks. For example, people who are listening at home, do this: go to Nike and add a product to your shopping cart. Go to check out in the shopping cart. What you're not going to realize until I point it out to you is that the entire navigation goes away; it disappears. The only thing that shows is the Nike logo on the top. This is true for Burberry. This is true for Amazon. When you get into the buy funnel—buy funnel, that's a fancy word for when you get into the checkout process—they get rid of as many distractions as possible. They understand that you are as close as possible to taking out your wallet and paying for those shoes or what have you, and they don't want to distract you with the opportunity to go back and read about the latest tube tops. They want you to go in and buy those shoes, and they get rid of all the distractions. That's one thing we're trying to improve as well as our checkout experience.  You can see this in real life. There is user experience in real life, and one of those examples is Michael's, the craft store. There's a reason why they make the checkout line so frigging long. It's because they don't want you to get in line and see how long the line looks and then leave. They want you to get into it, and the chance of your leaving and not converting on your sale is much lower if you're going to have to bump into other people and exit the—what is it called—the cattle line. It's very important. People have done the strategy and thought about this kind of stuff, and you can see it everywhere on websites with user experience. Sharon: That's interesting. Maybe you do this on some of the sites—I'm thinking maybe it's Postmates that does this—but you check out people who bought what you bought, those pants or this top or whatever. Michael: Right, upsells. Sharon: I guess. It seems like that might be another strategy. Is it Home Goods where the checkout line is full of all the little impulse purchase things, the dollar items? Michael: Well, they know that those impulse purchases, that's exactly what they are.  They're impulse, which means I'm going to reach over and grab the stuffed animal for my significant other at home without thinking about it. If they took that stuffed animal and put it in one of their aisles, the chance of my doing that is going be less. Also, the time I'm going to spend in front of that stuffed animal is going to be quite a bit higher while I'm standing in line as opposed to walking down an aisle.  It all comes down to data. There you can find all these really interesting things. I use this example all the time; you buy a pair of sapphire earrings. Well, if you have a little bit of a budget, maybe you should get a sapphire bracelet or a sapphire necklace and those sorts of things. Maybe you don't; no problem. But when it comes to offering that and the chance that they convert on it, one in 10, even one in 100, well, you just sold double the amount of your product. It's all about those little things that go into having a successful website. It's taking into account previous trends and things that are hot, you might say, and leaning into them. Sharon: As the Director of User Experience, I know it's all about data no matter what, but are you looking at that data and saying, “This is how we can improve the experience”? What are you looking at, exactly? Michael: You can do things in a variety of different ways when you look at data. Two years ago, Punchmark had a big switch where we measure everything now internally and externally. The mindset is that you can't fix what you can't measure. A lot of what we're seeing is that the average transaction size is going up. What that means, if you think about it a little bit, is that people are becoming more comfortable buying stuff online. The other thing we're seeing as far as data is financing. There are companies like Sezzle and Affirm where you can see a variety of different options. We're seeing that retailers that offer some type of financing, shoppers want the opportunity to use that. Affirm allows you to split payments into up to 12 payments.  Why is that good? Well, buying jewelry is a luxury. It's expensive. If I'm going to say, “O.K., you need to throw down $1,000 for this bracelet,” maybe they don't have $1,000. Maybe you won't ever be in a financial state where you can afford $1,000 off the top and hand it over, but if I was to say, “O.K., you can pay me $100 for 12 months,” the odds are that fits a little bit better. We are looking at the state of these retailer websites that offer financing options, and we see that they are converting on higher-ticket price point items a lot more frequently. That's an example of the things we look for that we can reverse engineer. Sharon: What differences do you see between a website for the rest of us versus for those in the jewelry industry? Are there certain things that jewelry industry professionals, whether you're a jeweler, a retailer, a maker, a bench jeweler, should keep in mind, as opposed to somebody who manufactures widgets? Michael: To make sure I'm answering your correct question, you're saying a difference between a small-town jeweler versus a Tiffany? Sharon: I'm saying more if somebody who manufacturers bandages decides they're going to do a website because they want to attract wholesale clients versus a jewelry industry retailer or manufacturer, are there certain things that you think are different? Michael: Yeah, absolutely. We have to look at the similarities in the products and also the prices of these products. Back to jewelry and luxury items, it's a one-time purchase, one-time meaning if you buy this $1,000 bracelet and you wear it every day for a year and you love that bracelet, you're probably not going to go back and buy the same bracelet again. Maybe you would, but probably not; that's not what we see. The reason is because that bracelet is still as good as the first time you got it, and that has to do with luxury, long-terms items.  A similar industry that has a similar buying state of mind is the furniture business. For example, think about the similarities if I buy a couch. Couches are really expensive if you're curious. We'll pretend this couch is $4,000. I love that couch. If I sit on it every single day for a year and I think to myself, “Man, this couch is awesome,” odds are I'm not going to go back and buy that same couch, but I could buy a matching loveseat. The same thing with jewelry. If I like that bracelet, I'll probably buy a matching earring. You mentioned bandages. Bandages would be a recurring purchase. I try my best never to compare jewelry stores to websites like Sephora. They make makeup and beauty products. I'm very fascinated by Sephora's business model. If I buy a concealer, for example, and I love that concealer—some women get really attached to certain products if it's the right fit for them—and I use it every single day for one year, I will probably run out. If I really like it, I'm going to buy it again. That's why there's a different mindset in the purchasing and buying state-of-mind for shoppers for luxury one-time purchases and recurring purchases. We try to lean into other sites, like a Burberry who sells a fashion product like a trench coat. If you wear it all the time, you're not going buy the trench coat again; you're going to buy something similar. Sharon: Interesting. There's so much to talk about when it comes to marketing this stuff.  Michael: Thank you. Sharon: What do you see as the top three mistakes that those in the jewelry industry make on their websites or when you're talking digital marketing? Michael: I think the first mistake—and we've already talked about this ad nauseum, so I won't spend too much time on it—is the crockpot methodology, thinking that it's going to sell on its own. That's unfortunately just not the case. You need to be thinking about it. You need to be updating things and creating new pages and working on your SEO. That's probably one.  Number two has to do with imagery. Jewelry is the most visually impactful product that might be out there. I really can't think of anything else, because what it comes down to is not the functionality of the jewelry. A bracelet, it's on your wrist and it looks good, and that's the functionality of it. Beyond that, maybe with earrings, how they move, but not really. It comes down to what it looks like. The end goal is I see it, I want it and I get it. I think a lot of times, these retailers don't put enough time into finding the right products, taking their own product photos or having lifestyle, which is to say having models with the jewelry on their website. As an example of a product details page, when you're shopping for a specific product, you can have, for example, a front view of the piece of jewelry, a side view of the piece of jewelry, maybe an up-close version if it has embossing or engraving or something like that, and then a photo on someone. You probably have a worker in your store; have them put the jewelry on. Snap it with a nice background. Now people can see how it wraps, how it looks around that person's body. I think that that is absolutely a driving force in how you can sell, so that's a good one too. Sharon: That's interesting. The positive would be that the websites that do have that—I see it more and more, where now it's frustrating when you swipe and that's it. There's only one hero shot and that's it.  Michael: If it's just one thing, like a pendant, I want to see what the back of the pendant looks like. It's going to be common that I have to see the back of the pendant. I want to see what the clasp looks like. Does it have a lobster clasp or some fancy clasp? Showing that information, like we talked about in the beginning, aids in that comfortability and that confidence when they fork over a couple of thousand dollars on this piece of jewelry. They need to feel confident it's the right purchase. Sharon: You want to see how it looks on somebody's wrist, even if it's just a plastic mannequin. How does it look on a neck? I don't know if this is my last question because I could ask you questions all day long. Michael: No, I appreciate it. Sharon: What I noticed, and I find it a little concerning being a baby boomer who's looked at marketing for a long time, it seems that everybody is moving onto Instagram. Every jeweler has moved to Instagram. They may have a Facebook page and they may have a Twitter—I don't know what the others are—but it seems they're skipping a website. It's like, “Oh, I don't need the website. I'm just putting everything on Instagram.”  What are your thoughts about that? Michael: Again, I might be biased—I'll get that out of the way first. I will say this: I think the shopping tools on Instagram are absolutely marvelous. Full disclosure: I really dislike the company Facebook. I'm not a fan of them, but what they have done is make a whole suite of tools that go with Instagram. For example, if you do these collection photos where you show a bracelet, a necklace, earrings and a ring all on one page, you can tag those products. A lot of the time, they do rely on having a website as the hub, so they're feeding the information in. I don't know if the website's time is heading toward the sunset and going fully Instagram is nigh, but I will say the tools on Instagram are incredible.  The other thing they do offer is fantastic retargeting. If you go on there and you like a product, as in double-tap it, they're going to re-serve that to you, and they can get better at fine tuning it. You can tell that Instagram is serious about being a shopping tool because they've replaced one of the five icons on the bottom of the Instagram app to become a shopping bag so people can buy easier. Sharon: Very smart. I also find it annoying, but understandable and smart, that every time I say, “Oh yeah, I like this,” “Well, we need your email address. Do you want to see anything else you want on your email address?” No, don't give me the discount. I don't want to give you my email address. Let me just see the product. But you can't do that. Michael: It's all about that retargeting. It's because it works, unfortunately. Sharon: No, it does. Michael: As someone who has worked in the industry for enough time, it can be very easy to get jaded about this kind of stuff and be like, “They're just flooding my inbox with all this stuff.” I get it. If I was on the edge of buying this product and I don't buy it, and you're hitting me back with a discount code: “Hey, get 20 percent off on this thing,” well, I was going to buy it for 100 percent. Now it's a little bit off, and now I can rationalize it better and get it. It does work. Sharon: Absolutely, or they wouldn't be doing it. I'm sure they're looking at the data. Michael, thank you so much. This is so interesting, and I'm sure it's given a lot of people ideas about what they need to go back and revisit or start doing. Thank you so much for being with us today. Michael: Thank you so much, Sharon, for having me on. I really appreciate it. If you guys want to hear more about emerging tech and information regarding the jewelry industry, we have a podcast called In the Loupe. That's on Spotify, Apple Podcasts, whenever you want it. We have a lot more information about different merging tech. You can learn more about Punchmark general at Punchmark.com. Sharon: Thanks. I do want to mention that you have a lot of very informative articles on your site. Michael: I appreciate that. Thank you so much. Sharon: It's definitely worth checking out. We will have images posted on the website. You can find us wherever you download your podcasts, and please rate us. Please join us next time, when our guest will be another jewelry industry professional who will share their experience and expertise. Thank you so much for listening. Thank you again for listening. Please leave us a rating and review so we can help others start their own jewelry journey.  

What you'll learn in this episode: Why you won't see results if you have a “set it and forget it” mentality about your website Why jewelers should give their website as much attention as a brick-and-mortar location How jewelers can use tricks of the trade to encourage customers to purchase items online, even if jewelry is traditionally bought in person  How jewelry brands can take advantage of the new shopping feature on Instagram Why the jewelry business is more like Crate & Barrel than Sephora—and why that distinction is important About Michael Burpoe Michael Burpoe is Director of User Experience for Punchmark, a digital marketing agency that specializes in the jewelry industry. Michael created Punchmark's UX team, which was assembled to take very specific initiatives toward fine-tuning tools and features, and improving the platform on both the front-end and back-end. Since early 2019, Michael has also headed up the strategy, planning, and execution behind Punchmark's Livestream Education program, the In The Loupe podcast, and the Punchmark Community on Facebook. Originally from Saranac Lake, NY, in Michael's spare time you can find him practicing Brazilian Jiu Jitsu or painting cityscapes.  Additional Resources: In the Loupe on Spotify In the Loupe on Apple Podcasts Website Blog Facebook Photos: Design Themes: Podcast Logo: Website Samples: After working with jewelry brands of all sizes for the last several years, Michael Burpoe has learned a thing or two about the strategies that make jewelry businesses more successful online. As Director of User Experience for Punchmark, Michael has helped even the most hesitant jewelers invest in their websites and reap the rewards of a fine-tuned digital marketing strategy. He joined the Jewelry Journey Podcast to explain why selling jewelry online is only going to become more common; how to make customers feel comfortable buying luxury items online; and how jewelry companies can use digital marketing tricks to increase sales. Read the episode transcript here.  Sharon: Hello, everyone. Welcome to the Jewelry Journey Podcast. Today, my guest is Michael Burpoe with Punchmark. Michael is the Director of User Experience for this marketing agency, which specializes in creating effective and compelling websites for the jewelry industry. Today, Michael will talk with us about his journey into the world of jewelry. He'll also share with us some of the secrets about what it takes to create an effective website, one that drives revenue. Michael, welcome to the program. Michael: Thank you so much for having me. I really appreciate it. Sharon: We're so glad to have you. How did you get into the jewelry industry? I'm sure that's not where you started out when you decided to take this path. Michael: Yeah, great question. The starting point is, I went to school for design. I went to the Rochester Institute of Technology, which is called RIT, in Rochester, New York, and while I was there I was studying graphic design. I knew I wanted to study user experience. For people who aren't fully aware, that's the overall shopping ease when it comes to websites. It can extend beyond that, but that's where I was most focused. While I was doing a lot of application design and things that were related to e-commerce, I was scouted by this guy, Daniel Sirois, who is my CPO at Punchmark. He hired me on, and I've since found myself in a niche when it comes to e-commerce strategy and web design. I now am Director of User Experience at Punchmark. I lead our dev team as well as the overall production strategy when it comes to that.  Sharon: That's really interesting. I'm so surprised to hear you say you went to RIT because that's a heavy design school. All kinds of art jewelers come out of there. Michael: Yeah, it has a major, I think, in metal design as well as jewelry design. What's crazy is they do these installation pieces. I'm sure you're already aware of these pieces that almost orbit around the head, these really dynamic pieces. It might be one of the only master's programs in the U.S. for jewelry design. These pieces are absolutely stunning. They almost install around the head and then have a singular earring. It's all about how the piece is presented. It's very fascinating. I went to a couple of their shows, unbeknownst to me that I end up in the jewelry industry in the end. Sharon: I guess I thought you'd say you studied computer science. You were saying e-commerce.  Michael: Yeah. Sharon: What does Punchmark do, and why the name Punchmark for the company? Michael: The original idea behind Punchmark, as it's been told to me by the founders, is that a coin is just metal until it is punched with the original insignia that denotes its value. For example, a quarter is made of the same type of material as a dime; it's just a punch that makes the difference. That's how we see ourselves in bringing brands and businesses to life: everybody starts out, more or less, on the same footing. It's what you add to the process that adds the value.  We try to our best to stay ahead of the cutting edge and see where the ball is going, so that way we can lead our leaders. We were one of the first people to be doing serious e-commerce websites for the jewelry industry. Now, with a lot of things shifting toward e-commerce in addition to brick and mortar, what we call an omnichannel solution has had a definite, huge rise in popularity. It's really exciting to be a part of. Sharon: I really like that. That's an interesting concept. It's all the same; it's just what size, which President is on the face. We talked a little about this, but tell us more about the transition you're seeing with jewelers getting into the e-commerce space. Michael: Absolutely. Whenever people ask me about the shift towards e-commerce—obviously Covid had a huge impact on the jewelry industry, especially right in March 2020, the reason being that prior to those events, the vast majority of sales were done inside of brick-and-mortar stores. When I refer to jewelers, I'm referring to jewelry retailers. We also work with vendors and production companies and technology companies, but specifically jewelry retailers. They were doing so much of their business in their stores. When their stores were forced to close at that time, there was this real uncertainty about what they should be doing. I hate to say I told you so, so I won't, but I will say that we've been constantly pushing people as much as possible to take their online presence seriously. One of the things we are always saying is that your online store should be considered just as important or require as much time as any of your brick-and-mortar stores. Some of our retailers, they have three brick-and-mortar stores, and their website should their fourth. That's how we see it, and that's because it takes a lot of work and a lot of extra stuff. Sharon: That's a great way to look at it. It does; it takes a lot of nurturing, a lot of care and feeding to get it right. Michael: Absolutely. Sharon: I'm thinking about the dealers, maybe not so much the retailers that I've talked with. I remember an antique jewelry dealer telling me they had resisted for a long time even doing a website—this was years ago—and the first online sale they made was one of the largest sales they ever made. I know there's a lot of talk about, “Well, everybody has to touch and feel,” but I think a lot of people are getting past that. What do you think? Michael: I think it comes down to who the target customers are. What you just mentioned, being loath to adapt to these online businesses, it's very understandable. Tech is constantly changing, constantly evolving, and it can be extremely overwhelming to get into. That said, it's like learning a language. Once you learn, you learn how to learn, and then you learn how to adapt and pick up new things. That online presence, what we're seeing is—say you're a 60-year-old or 70-year-old retail jeweler. Your shoppers are not all 60 to 70-year-old shoppers. A lot of the target consumers are going to be younger.  Now millennials are buying engagement rings and jewelry in general. Gen Z is starting to have enough money that they can start shopping. These generations and Gen X as well are very tech fluent, extremely tech fluent. Speaking for myself as a millennial, I was brought up with a computer. I have had the internet as a part of my life for as long as I can remember, so the idea of me spending $200, $300, $400 online for a product that I have not touched is not as foreign to me as some retailers seem to assume because it's true for them. We're seeing that a lot of shoppers that are coming through are first-time jewelry shoppers, first-time ring buyers.  We run a podcast; we sometimes interview consumers for engagement ring buyers, and we're finding that people love the idea of sitting home alone. It's the middle of the night; their significant other might be in bed, and they're shopping online, finding information, getting an idea of what that engagement ring should look like. Whereas before, they walk into a store to buy that engagement ring, and it is intimidating because the store owner is—not breathing down your neck, but very interested. Some people just have social anxiety, and they don't want to talk to anybody. The idea of having all that information in front of them is very attractive to them. Sharon: That's really true. You mentioned two things I want to follow up on. First of all, you mentioned your podcast called In the Loupe, which is a great name; I love it. Michael: A jeweler's loupe, yep. Sharon: Tell us a little bit about that. Michael: Sure. In the Loupe actually started as a different podcast called the Jeweler Survival Kit. This launched in March 2020. Like I mentioned before, there was a lot of uncertainty when it came to how the pandemic was going to impact these businesses. There was all this silence from the movers and the shakers in the jewelry industry, and we decided to come through and be like, “Alright, here's how you do it. You should cash up your inventory by selling your unwanted products, selling them at a discount or doing Facebook sales and stuff like that.” As we did a couple of episodes of it, we realized that Coronavirus wasn't going to go away in one month or two months. We decided to shift to In the Loupe and make it more of a podcast along the lines of educating and advocating. So, not just telling people how things worked, but also saying, “You should be doing this about emerging technologies in the e-commerce space.” We talk about things like SEO, digital marketing, selling online, stuff like that. It's since evolved into a comprehensive look at the jewelry industry, and it's been a lot of fun to be a part of. Sharon: It sounds very interesting and necessary, but I could also visualize a lot of jewelers, retailers, manufacturers shutting it off and saying, “Forget it.” Michael: Yes, we started it like, “Alright, we've told you a million times that you should get SEO, which is search engine optimization. It's how you rank higher in Google. Well, we're going to tell you how it works.” We talk about Google and how it works, hoping that even if they don't buy SEO with us, they start to think, “Maybe I should get SEO.”  What we've learned is that trepidation and hesitancy towards these techniques, that doesn't go away in one day or one week or one month; it's a long-term process. I see myself as a steward for the industry in that if I do my job right with In the Loupe, which is a partnership with the Smithee Group, who we coproduce it with—if I do my job right, fewer jewelry stores will fall upon hard times in this really uncertain state. More jewelry stores will adapt and be ahead of the curve instead of being behind the curve, which the jewelry industry historically has always been. Sharon: Do you have people who have worked in the jewelry industry on your team? The reason I ask because I can see prospects pushing back and saying, “What do you know about it?” Michael: We have a GIA-certified gemologist as our CEO. He actually spent a considerable amount of time in the jewelry industry working at a jewelry store. That's how he got his founding. Also, our CTO spent a considerable amount of time in the jewelry industry— Sharon: CTO, you'll need to explain it. Go ahead. Michael: CTO is Chief Technology Officer. The Cockerham brothers, they spent many years in the jewelry industry. They grew up at a jewelry store and have done many trips to Antwerp, Belgium for different buying trips. The reason why we got into jewelry is because we have roots in the jewelry industry and we can relate to these jewelers on a deeper basis.  Sharon: First of all, you said something and then we jumped about. You said something about “we're going to tell you how to do it.” Could you just repeat that and then stop? Michael: Yeah. We're going to tell you how to do it. Sharon: What you've told me about your team, it sounds like you have deep jewelry experience on your team. Do you find that prospective clients breathe a sigh of relief when you say that?  Michael: It depends. Punchmark was founded in 2008. We've been in the jewelry industry for quite a while, and we have a history in the jewelry industry and have made a name for ourselves. We call ourselves the largest online provider for jewelry websites. We have almost 500 clients, and we can see the statistics that are inside our network. I've seen people be, again, loath or behind the curve when it comes to pushing forward with this emerging tech, but at the same time, we've also taken jewelers who are very slow to adapt and turned them into making frequent sales online. It only seems impossible before you start. Sharon: That's great. I have to remember that it only seems impossible before you start. I remember a lot that my father taught me, but one thing that always sticks in my mind and is very motivating is that he would say, “All beginnings are hard.” Michael: Yes. I also think anything that's worthwhile in business doesn't come out of the box, ready to rock and roll. There is some setup. It does require a little bit of hard work, and it requires some communication. You need to be on your email and, like I said before, it needs to be seen as a significant branch of your business if you want it to be a significant part of your business. The thought of, “Oh, I'm just going to load it up with some images and they're going to sell,” well, in reverse, let's think about it yourself. Would you buy a piece a jewelry if you have a photo of this necklace that's going for $1,000, and you took a photo through the display box window, and it's kind of grainy and the details about it are, “This necklace has 14-karat gold and it's $1,000.” Well, that seems crazy. I would never buy something with that little information, because who knows? It could be a scam. How do I know the details are there? Also, it doesn't look good.  That's why we're always advocating through In the Loupe saying, “If you want to sell, you almost need to market to yourself.” What would you look for in this jewelry? For me, at least, I want good photos, lots of details. I want to know everything about the piece of jewelry. I want to be assured that if I'm going to buy a $1,000 bracelet or watch or whatever have you that I am not going to get scammed. It's real; it's available, and I need to be assured about that. Sharon: It sounds like you are marketing to yourself. As director with user experience, you really are looking at what's going to build that trust in terms of, “this isn't a scam.” Let me ask you this: somebody we had on the podcast, a dealer, said they thought the most important thing when it comes to user experience is the return policy. What do you think about that? Michael: Absolutely. Return policies, warranties, shipping information, data policies, all of those accoutrements for an online sale, all of that information is what comes in for the trust factor. We can't get around it: jewelry is a luxury good. You can even think about a wallet or a pocketbook; these are all luxury items. When it comes to that kind of stuff, you can do without it. That's the nature of luxury; it's a want, not a need, but what ends up happening to it is that the other factors are just as important. If I buy this watch and it breaks the first day, am I SOL or am I going to be able to come back and have it refurbished? If I need a new battery, can I come in for that? If it gets shipped to me and it gets lost in the mail, am I out $1,000? All of those things are the trust.  At least with millennials and Gen Z, we're finding that they are so tech fluent that they know how to comparison shop much better. If they're not shopping at your store, if they see that there's no information and it feels like a risk, they can easily comparison shop and find the exact same product or a similar one somewhere else. That's the battle you're always going against. You want to have all of the checks in your box as much as possible. Sharon: I think that's such an important point, no matter what industry. If somebody is shopping for something, whether it's a service or whatever, and they go to one website and there's no information or it takes a long time to load, they're gone. That's it; they're on to the better website. Michael: We see that all the time with things like bounce rate. That's the rate of someone visiting your website and then leaving within, I think, 10 seconds. That means you need to load quickly. You also need to have eye-catching imagery and what we call “above the fold,” which is the information that loads that's visible on the screen first.  At lot of times, shoppers, they don't even know what they want when they start shopping. They start out as an open shopper. They're going in and they know they need to buy something for their significant other, and they know they like fancy jewelry. Well, they don't know if they want a hoop earring or a stud; they don't know that answer. It's up to you to convince them and show them the way so they can shop without feeling stupid or intimidated. I think that also has to come into the above the fold information.  

Author of Happy Ever After, The 7 Dollar Millionaire, joins us again to shed light on the complex world of personal finances. He shares tips on getting started, saving money, and aligning your goals with your family to work your way to financial peace of mind one step at a time. --- Transcript Before we jump into the episode, here's a quick disclaimer about our content. The remote real estate investor podcast is for informational purposes only, and is not intended as investment advice. The views, opinions and strategies of both the hosts and the guests are their own and should not be considered as guidance from Roofstock. Make sure to always run your own numbers, make your own independent decisions and seek investment advice from licensed professionals.   Michael: Hey, everyone, and welcome to another episode of the real estate investor. I'm Michael Albaum, and today I'm joined by my co host,   Tom: Tom Schneider.   Michael: And with us we have a very special repeat guests, the 7 Dollar Millionaire, if you recall, he wrote a book that we had him on chatting about Happy Ever After. And today, he's going to be talking to us again about personal finances, some things you can do to get started, as well as how to talk to your spouse or significant other or partner about personal finance. So let's get into it.   Michael: Awesome. Mr.7 Dollar Millionaire, thank you for joining us again, we so looking forward to recording with you.   7 Dollar Millionaire: It's a pleasure. Thanks for having me back on that says, this is a first for me. No one's ever invited me.   Michael: Well, hopefully the first of many. So how have you just curious how are things out in Singapore?   7 Dollar Millionaire: Things are just improved. Yesterday, we had like a mini re lockdown. So they call it circuit breaker here for about a month. Because there was a bit of a spike in cases. But that ended yesterday. The big change is very little apart from Oh, you're now allowed to go to restaurants, their restaurants are all closed. That's pretty much it. Gyms are kind of reopening slowly, that kind of stuff. But yeah, that was that was nice. It's nice to kind of go and get a meal somewhere, you know. But otherwise, it's you know, as with a lot of Asia, they're taking that kind of minimal risk approach to it.   So I mean, even when there was a spike, it was like 100 cases a day. 5 million people, right? I mean, it's still a very low number.   Michael: Yeah. But everybody in your world is healthy and safe.   7 Dollar Millionaire: Oh, yeah. Thanks. And you guys are on good.   Michael: Yeah, we just chatted with some family friends of ours yesterday, and they are double vaccinated. But she and her daughter just got his tested positive. So she had a breakthrough case. So she's feeling pretty crummy at the moment. But I'm hoping that she's hoping she's not going to go to the hospital or anything like that. So the breakthrough cases don't seem to be as severe as the unvaccinated stuff.   7 Dollar Millionaire: Fingers crossed. Yeah, fingers crossed. touchwood. Right. That's that's the big hope. As long as it stays like that we can live with it. Right?   Tom: I have a friend who had a breakthrough case who's also vaccinated. And he's got a wife and three little kids and his wife and three little kids didn't, didn't catch it. So he's hanging by himself. And you know, I feel much more for his wife, who's managing a house full of Toddlers and Babies versus him who's just hanging out at their their lake. Well, he's men. He's on the men. He's feeling much better. But it's Yeah, really.   7 Dollar Millionaire: Did she get did she get like a second opinion on that? Right. Yeah.   Michael: Thank goodness.   Tom: Yeah. Doing recovering. Well, good, good.   Michael: Well, Tom, it's it's funny as the wrong word. But interesting. This kind of segues nicely into what we want to chat with the 7 Dollar Millionaire about today. Again, circling back and talking some more about personal finance. But a question that I have is, so often people have these target goals in mind, and whether that's net worth or cash flow monthly annual basis. But that's so often based on today's needs, for their whatever family is currently in the picture. And I've got to imagine that changes over time. And so as someone who doesn't have kids, I don't have a really good sense of what kids costs, it could be 20 bucks a day, it could be 100 bucks it you know, I don't have a good sense for that. So how do you recommend folks think about not only their cash flow needs for today, but also for their future selves, as they continue to age but also as additional family members may enter the picture?   7 Dollar Millionaire: Yeah, I mean, it's a it's a there's no right answer, right?   Michael: I mean, I mean, oh, well, then we can we can we can cancel the show. We're done here.   7 Dollar Millionaire: There's just no single one right answer. I mean, the first step with the first answer to this is actually just taking the first step start actually doing some work, right. I think I was working recently with talking about how you make all the progress in personal finance. And a lot of people are discouraged because they think they can't come up with an answer. And it's like painting, right? The first blob of paint on the on the canvas doesn't look like the painting You can't expect it to you go put it on, put it on, put it on. Only after a long time does it actually start to get to the real picture, and it's the same, it's exactly the same with this. You just got to start doing the work. And starting doing the work is actually working out what you want your kids to be like, what kind of life you want to live with them where it's going to be, and the kinds of expenses you're going to have.   So you can roll that stuff out pretty easily. I mean, so For me, because I was an expert, I had to put my kids in international school, there's some serious education expenses. You know, it's like the, for me, when my kids went to college, they got cheaper. I mean, that doesn't happen very often, right? My kids got a lot cheaper when I was paying for them to live in a foreign country, flying them backwards and forwards and paying college fees, they were cheaper than the local education costs for me.   So that's how individually these things can be right? I mean, you just have to do that. So you have to look forward and you think, okay, and I'll give you perfect opposite example, really good friend of mine used to live like five floors below where I had seen the apartment block right here. He's got for various reasons, he ended up with like, kind of one of those joint families who so like, five kids under the age of five, you know, bizarrely, and really bonded, situated,   Tom: Yeah, Brady Bunch situation.   7 Dollar Millionaire: And he's, he's like a, he's a fund manager, based in Singapore. And he worked out that he could actually, it made sense for him to quit his job and move back to California, because paying for five kids in local education system here, when you know, that, and everything else, it's cheaper to move to a place with a good free education system and have a normal job rather than trying to have a high paid job and pay those kinds of costs.   So that's how individual all of these kinds of decisions get to be. The first thing is just to sit down and, and dream a little, right, exactly. Who do you want your kids to be? And how do you want to live with them. And because a lot of the costs, like your actual food costs, it's not a big deal, it's really not going to be an enormous deal. So the basic, you know, adding one bedroom to the house may or may not be a big deal, depending on on where you're at. And then after that is things like education and flying, holiday is right, they do cost literally an extra person on every single thing you do, when you start and that's times 20 years, right?   So there's, there's some, there's a lot of extra costs on that kind of stuff. And it's really just sitting down and working out those kinds of things, and those kinds of budgets. And then as you move closer, closer towards the end, you'll realize exactly what is going on, you'll get a much closer impression. But as always, it's just start, just sit down with a piece of paper and just go, Okay, I think it could be this, and then find out the extra information that you'd actually need. Because it can be a scary amount, or it can be really, if someone for someone like me, that was having to pay man it was 15 years of 14 years of school fees. I don't want to think what that was, you know, really, I definitely don't want to, you know, PV it, I mean, that's just insane amount of money. But you know, had to be done for In my case, if you don't have that you don't need to put it in.   Tom: I love that analogy of the paint, and it just kind of evolving a little bit over time. As far as, you know, practically getting the paint down, would you recommend a model where, say this is in Excel, and each row is like a year, and then, you know, perhaps there's some different sort of expenses within the different rows, or it's just like a really kind of basic form of that is that sort of a rough construct is, and I'm sure it's you know, could be a little unique for everyone. But that's immediately where my mind goes is seeing in that sort of a model.   7 Dollar Millionaire: That's definitely where I think you move it, I actually like to do a pen and paper to start with, I think there's a, there's kind of a free flow, when you're actually kind of sit down with pen and paper and just as scribble stuff out. I've even tried doing it on my iPad with you know, like the sketch but it doesn't work as well, there isn't that sort of connection, which sitting there with a piece of piece of paper and a pen for 10 minutes, and just sort of scribbling out the bunch of the cost because we're all prepared to be kind of messy on a piece of paper, right, and we can just draw in things and loop them around, that connects to that, scribble that out and need this.   And then once you've got probably only 10 minutes in, you can move that to a spreadsheet, seven or eight lines, seven or eight lines is going to get you most of the way to the kind of things you're thinking about.   Michael: And Tom, I'm curious not to put you on the spot here in the hot seat but having a young child is this an exercise that you went through with your wife and was this conversations that you had prior to the little one arriving?   7 Dollar Millionaire: You know, I was actually so I'm in my mid 30s now and when I was in my mid 20s and early 20s actually was way more active about kind of performing out like 20-30 years in advance so I actually had to pull back the old spreadsheets pain analogy I think it's probably time to have another round I love these interviews with you 7 Dollar Millionaire I literally after our last call that we had I went and totally redid all my you know auto deposit into my investing and I already have some immediate action items from from this one. So just to kind of go back I was I not not so much with these with with my current kid but I think it's an exercise to go revisit some work that I did in my mid 20s.   7 Dollar Millionaire: It's always good to know right? It's also good to know how good you are at modeling. Where you make mistakes and modeling, I mean, we we professionally we do that. And it's you know, you can be miles out. But if you actually, I mean, there's a company modeling, we're actually modeling like an investment will have various inputs that we can that we can change them to go back and you look and go, Oh my god, I was miles out, but then you realize that one of the inputs was x, y, zed, which turned out not to be remotely true. So you can, okay, then change that. And sometimes it kind of comes back to closer to reality. So all these things are really, really important to actually just understand how well you model because it's not like you have to stop modeling, or you never stop acts.   And modeling is like, it sounds like it's too specific to what we do. But we're all forecasting all of the time. Now, my favorite analogy for forecasting and how we're all forecasting all the time, is we all pretty much expect chairs not to break when we sit in them, right?   I mean, even some of my weight, I don't expect the chair to break when I sit in it. But I pretty certainly if you if you sat on three chair, three different chairs in a row, and they broke every time, that fourth chair, you'd be like pushing it scratching it thinking, Okay, is this thing solid, you'd have lost all your trust in chairs, that's just forecasting. It's just natural forecasting. We do it all the time. And so knowing if you're good or bad at it is a is an amazing life skill.   Tom: Do you find that most people are overly optimistic when forecasting I guess you could apply this to business or to kind of personal? I'd love to hear your kind of thoughts on, I guess human nature and in applying forecasts and ways to beat yourself and be better at it.   7 Dollar Millionaire: Yeah, I honestly, unfortunately, it really it is really bad answer. But 50% of people are better than average. And there's no other way of looking at it. I think the key is most of us aren't doing it particularly consciously most of the time. And so sense of like actual aware forecasting and awareness of how optimistic or pessimistic we tend to be. Pessimists, I mean, pessimism is one of the reasons that overcaution is what keeps a lot of people out of the markets. Right. And because they think of it as markets, right, they don't think of it as I'm working. I'm living in this economy, and not being in it with my capital is essentially an enormous risk that this economy is going to crash and burn. I'm literally taking that investment option. And not seeing it that way keeps them out because they view it as being very, very high risk and pessimistic because they don't understand it enough.   Let's throw some analogies around that's just like being in the dark, right? It's just being in the dark, you can walk out into your hallway with no light, and you can't find your way along the hallway anymore. Right? That's, it's it's still there. Everything's exactly where I was people without the education. I mean, we're moving back into financial education, right. It's what keeps people out. It's they're unsure, they're in the dark. And that's why I think creates most of the pessimism and overcaution around it.   Yeah, there's a bunch of people who, too, you know, too optimistic, too. But that's what I mean. I tend not to mind it when when investing, I don't engage over optimism. But when I'm doing things like a little bit more entrepreneurial, then yeah, I shoot for the moon. There's just no point right? or shoot for the stars even then you get the moon there's no point not being no point starting an endeavor without thinking it's going to be amazing.   Michael: Yeah, I love that analogy about being in the dark. I wonder though, your take on, when people have gotten out into the hallway realize that it's not that scary. Or maybe they've gotten a little flashlight, it a little bit of education, they understand. And now they think, Well, I know everything. And so how does that that little bit of education, a little bit of knowledge, not get overblown, and a bit turned into overconfidence, where now you are taking risks, well beyond your your light beam, so to speak.   Tom: Great point, Michael.   7 Dollar Millionaire: Yeah, it, it's it's actually why I think it's so important. This gets taught in schools. And, you know, there's, there's a bunch of different sides on this. But it's, that's why, you know, why are we confident reading? Right, we're confident reading because we've been taught it at such a young age, right? This is this is how we have that kind of confidence. Why are we not confident in a foreign language? Because we weren't taught it. We don't know any of the words, we don't know how this thing's put together. And we need that it's, it's about having that broad underpinning to what we do, and it's why it needs to be taught in schools because any other way, you're coming in at some random entry point, right?   So some friend tells you the you know, you should trade options on Robin Hood because I made x, y, zed and then you kind of get in there and you learn a little bit about it. Maybe you have like some Beginner's luck and you do quite well. That's now your little wheelhouse. It may just may be a good wheelhouse for you. It may be a terrible one. More likely the second option, right. So that becomes your think that's what you need that we need the education to make sure we get a little bit of light in all areas.   I mean, I'll give you a perfect example for this. I so the CFA exams Chartered Financial Analyst. I'm not one I did level one.I got way too busy to do levels two and three, my first daughter was born like immediately after getting level one. And level one even just shows you the entire spectrum. So you kind of you get like a beginners entry level on everything. And that's like, you kind of you know where to come back to later. Right? If I need to calculate a bond price, I can't do it off the top of my head, but I know where to read. I know where to look. And then I'd know how to do it. And that, obviously, that's a little bit specific for most people. But that kind of general entry level stuff is I think, you know, what's needed otherwise, you do end up with the flashlight, or moving from analogies. Under the under the street lamp looking for their keys, right?   You know, the stories like, you know, and the guy's looking for his keys under the street lamp and a piece of wedge, you lose them over there. So why are you looking here? Well, this is where the light is, right? That's it's so important to just have like a basic level of light.   Tom: To know what you don't know. Definitely.   Michael: Yeah, that's Yeah. I'm curious to know, in your opinion, if someone is looking to invest in the next 12 months, they're looking to get educated and wanting to get involved, whatever investment class they deem is in their wheelhouse, where should they be keeping those funds? Should that be something that they're investing the whole time labeling? And, you know, dollar cost averaging? Or should they kind of wait till they have enough funds to do something with curious to get your thoughts?   7 Dollar Millionaire: Okay, well, always dot dollar cost average, unless there's like a ticket price that, you know, makes that unavoidable that you have to go in single level, like, like some kinds of property, right, where you have to have a certain amount of downpayment, and that's the minimum you can get involved. The great thing about other asset classes is you can dollar cost average in the tiniest amounts. And you always should, I mean, cuz, you know, you can't predict the future, you don't know if it's gonna go up or down, right. So you should try and remove as much of that risk as possible. And dollar cost averaging is the is the free way of doing that.   Michael: Right.   7 Dollar Millionaire: So right, so always dollar cost averaging, I think there's a one thing that I quite like is what I think of it in my head is like a reverse ladder. So you know how you have ladders on fixed deposits, time deposits, whatever they call them. In the US, you know, where you can get kind of get like a little bit more return, if you lock the money into a deposit account for longer, let's say three months, six months, whatever it is, and you stagger it in. So you put in like a sixth this month and a six the next month, and then you do that over six months. So you got the money, you got access to six of the money every single month, you can put it put it into those and then actually dollar cost into the thing you're putting it into. So you can sort of you're still making a little bit of money doesn't have to sit as pure cash. Right.   Michael: So so go get six CDs.   7 Dollar Millionaire: Yeah, exactly.   Michael: on six month intervals. And okay, gotcha.   7 Dollar Millionaire: Yeah, exactly right. And then you can just plug it straight in. And you might only be making like an extra, like a few bucks. But this is how you make money, right is by it's like that little extra, which for no risk, right? That's always the key a little bit extra, no risk is better than a lot extra for a lot of risk. So just that just that small, those small moves are always useful.   But I think also one of the other things to do is depending on the asset class, if if what you're doing, if the cash you've got is a long way away from the asset class, then it does make sense to have some kind of hedge if it's possible. So I mean, I think one of the things often is say, like, being able to put some of the money into a REIT in advance of buying a property.   So let's say if there's like, if you're going to buy property in New York for some reason, then there's a new york rate, if you can do enough analysis around that read to understand it's like, oh, this is, this is pretty similar, this should go up when my property goes up, it should go down when my property goes down, you can at least put some of the money as you're building towards that downpayment into the REIT and then hedge out a little bit of that extra risk. Because, I mean, the risk on property is nearly always, everywhere in the world, the government prints more money, right? I mean, properties actually don't…   Micheal: Inflation.   7 Dollar Millionaire: Yeah, well, yeah, properties don't often go up in value, your money goes down in value in terms of property, right, that's what actually happens. So actually, removing that risk is is is useful. So I'd always think through these ways, rather than thinking, yeah, just chucking money in now. Just steady push it in steadily as it's just if you can, if you have the patience.   Tom: That's a that's a good discipline. I mean, it kind of related as an act of discipline I can think of like going to a, like a kiss going to Las Vegas or something and playing blackjack and it's like, oh, do I push it all in on one hand or do I slowly and you're gonna have a better time to her a little bit slower. I guess that kind of really kind of relates to having fun at the casino versus having fun at.   7 Dollar Millionaire: It is a good point because I do the exact opposite. I really don't like being in casinos and when I'm forced to go to them, I put it all in on one hand and literally   Michael: Walk away.   7 Dollar Millionaire: Just like get this over and done with either make a lot of money on one hand, or we are I'd leave and have a better time than I would do by sitting at a blackjack table, losing money steadily.   Michael: I love how you knew kind of exactly where I was going with the question with regard to property investment. Because I mean, Tom you were in a similar situation with regard to you had some cash or cash out refinance, you were looking to deploy it. And in the meantime, you were thinking about putting it in the market, and I think you ultimately did. And then there was some fluctuation in the market. And you're like, Whoa, this is not this is not feeling good. So you pull back a little bit, right?   Tom: Yeah, yeah, just, I think like within, there's more, like risky allocations, and then safer allocations. And I think, being cognizant of kind of which risk profile I was investing, versus the strategy I initially did was go running up to the blackjack table and throwing it all down. And, you know, thankfully, didn't get getting didn't get burned too bad. But, you know, stepped back away and left the casino and invested in a nice asset allocation that was comfortable for the time horizon at which I wanted to spend it. So..   7 Dollar Millionaire: That's I mean, that's, that's, that's also the other point is actually nothing wrong with taking a second most important thing of investing is actually understanding your own psychological needs, because you can't invest against them. It's really, really hard to actually invest in a way that you don't think is correct for you. So taking too much risk. And just I mean, I don't have sleepless nights with what I do for a living. Because I don't invest in a way that is wrong. For me. I actually feel like I understand what I do. Whenever I hear people like they have sleepless nights like that's because your style investing does not match what you actually believe. I mean, that just can't be. That can be the only reason I think what you did, there was smart.   So the only way I've done this in the past is that I buy I bought properties in the past in, in foreign countries I have bought in Singapore, once I buy in the UK, I bought in Japan, I bought in Australia, one of the things when I know I'm going to do that is I immediately switch the money into that currency. If I think it's cheap, I think it's expensive. I don't.   But I try and you know, work because current currency, and I do sometimes take a view on the currencies. So you know, but that's it's that kind of move. So for example, I think I kept I think I kept just cash in a deposit in Sterling for about three years before I bought a property there because I wanted to take away because it was cheap. And I wanted to remove the currency risk, that it would get more expensive at that particular time. Basically, the moment Brexit happened and the pound and the pound collapsed, I put money into Sterling, because I knew I'd be thinking about buying a house not long after,   Michael: I think I've mentioned this to you in the past, Michael, but I really took it on the nose with the currency exchange because I bought a place in Portugal. And it was right around February, January, when we were looking at doing a transaction and the dollar against the Euro was like 94 cents. And it has just continued to climb and climb and climb. And so this is going to be great. This is going to be an equal transaction, by the time I go to actually pull the trigger. And so I waited, waited, waited and then COVID hit and the dollar just tanked. And I really got taken to the carwash on that one.   So I think that makes sense is if if you if you know what it is today, that's worth something and how you feel about it, I think is also important, but also a bird in the hand is worth two in the bush.   7 Dollar Millionaire: Well, it's it's actually a lot of these things is understanding future liabilities, and not just your existing liabilities, but your future liabilities. And that's one of the ones like with kids, right? You're going to have these are future liabilities, you've got costs down the road. And if you know that you've got, you want to have a place in Portugal, then if you think the currencies pretty decent, and you know, you don't have a view either way, you can just put that money into into euros immediately and just remove that risk, right, there's no risk now. Right?   If that money wa s just gonna sit, and you could have it in euros doing something else, I mean, you can still take another risk on top of that, but at least you've closed off that currency risk. And currencies, they move around a lot. I mean, there's, you know, within like a two or three year timeframe, they can really shift. And that's a risk that's nice not to have or even potentially gain you can make rather than, you know, taking that huge risk.   Tom: So backtracking Just a minute, a little bit ago, you were talking about if you were to evaluating buying property in New York, and you know, parking it into a REIT in that space. I never and then you know, you can research that read I never thought of that, because they're sort of there's this is, you know, primarily single family rental investors. There are single family rental REITs out there. And is the idea to maybe to to learn more about that specific REITs that you're going into that asset class like to benchmark what kind of returns you what are my totally hearing this on a different?   7 Dollar Millionaire: I think you know more about the US property market than I do. So I'm, uh, yeah, you're probably hearing things I don't know, all I mean is is as close as you can remove risk, I'm not talking about actually   Tom: Sure getting as close.   7 Dollar Millionaire: Yeah, the closer the asset thing, the asset class you're going to buy, you're removing as much risk as you possibly can. So if it's in similar geography, in a similar asset class in a similar geography, it still may not correlate, and there's nothing you can do about that there may be a problem with the REIT, and there may be a problem with a manager and maybe a problem with something else. But if you're going to buy commercial property in New York State, if you can find a commercial property right, in New York State, yeah, then maybe maybe there'll be reasonably correlated, and you're taking a risk there, that, you know, there's no reason for cash to be correlated to it, there's definitely no reason for any other asset class to be correlated to that thing. So just a little bit of work and probably find you, okay, what's the new what's the New York State REIT, which ones are similar? Bang, okay, that one might reduce my costs and reads tend to pay pretty good dividends as well. So you actually could get paid out while you're doing it. So the return could be stronger, while being more correlated. And that's kind of all you're aiming for. with that.   But I mean, I'm gonna say as well, I don't know, if I mentioned on last couple of one of my it's a small family single, you know, real estate, is actually just such one of the best asset classes to be in as an individual. Just because it's not not something that big corporations do particularly well. And that's where it's sort of maybe steer clear of big corporations tend to do big properties very well, right. It's just like one guy making a decision pushes a button, and then the whole building does x, y, zed, right? Whereas when you look at what we all live in, so small fixer uppers, those single unit setup takes an enormous amount of management to run as a business.   So that's one of the reasons I love real estate as an asset class is because the world's capital is not trying to jump into this, right, it's just individuals doing the thing they do. So we can have an advantage. But within the REIT, maybe less if you get too specific, too granular. And I just sort of aim, you know, and the other thing would be to not get into to smaller thing, right? You want it to be liquid, you want it to be well traded, you know, one reasonably well known   Tom: That makes sense definitely.   Michael: Makes a ton of sense. I'm curious, Michael, do you have generic guidelines or principles when you're teaching, you know, financial education to folks around how much of someone's paycheck or how much someone's net worth should be broken down and spent on the different typical categories? So housing, or transportation or food entertainment? Do you have a pie chart that you that you utilize?   7 Dollar Millionaire: No. I mean, there is one, right. There's the 50 30 20, that is commonly used. And it's a great starting point, I actually think the 50 30 20 is a great starting point. But I think there's just too many examples of people who do way better than that, than I do. You know, you don't want to set the goalposts too easy, right? You know, you just come across people who are saving half or even three quarters of their of their income, and you don't want to tell them, You should save 20 it's similarly right, you know, it's just like, but the only one I really use is like, never go above like a third of your income on property.   And I think if you can keep it below that number, pretty much everything else starts to slide with it. Right? You start your cut, a lot of other costs are gonna be I mean, so in the book Happy Ever After I use 50 3020 as a starting point, but then say, Well, yeah, you know, but what if you could do 30 30 10? Right, you know, 30 30 30 30 30 40, because it would be, because 30 30 10 doesn't add up great. But if you can keep those costs down, all of those extra the 1530, way below those numbers, you're adding up to a much higher number on the 20. And that's the thing, I think, to use that 50 30 20 is a great thing to say to someone who's saving zero, or 5%.   Tom: Sorry, just to clarify the 5030 is 50% is your needs housing, grocery grocery, all that 30% is the ones and 20% savings. Is that the?   7 Dollar Millionaire: Yeah, that's right. Yeah, that's, I mean, it's not that I didn't invent that. I think that's a standard financial personal finance tool. And, you know, as as with the glob of paint, right, it's a great job of paint, unfortunately, it's kind of it sounds to 20 20% is gonna have you if you did it from the age of 20 20% is going to have you retired somewhere in your 60s. It's not amazing, right? That it's it's, it's better than not, but it's it's not amazing, and that's where I wouldn't want to see it to see us as I try to use it just as a general this is dob of pain. 20 is great, but if you want to do better, you should aim for better.   Michael: Yeah, that makes tons of sense. And I think that's great. I love I love that dob of paint analogy. I think it makes so much sense. I'm a very visual person. So that that resonates with me.   7 Dollar Millionaire: Cool. That's good. That's really good. Because it's because I wrote it for for a new book I'm working on. So I'm glad it works. I'm trying it out with you guys.   Michael: Are you really writing a new book?   7 Dollar Millionaire: Yeah, yeah. This is actually the first morning in about three weeks I am, I've got up to talk to you guys instead of getting up to write. But I've been writing to non stop for last three weeks.   Michael: Awesome. Can Can we get a little preview as to what it's about?   7 Dollar Millionaire: Yeah, it's it's an attempt to combine Zen mindfulness practice and personal finance. So I'm trying to map I'm trying to get that Venn diagram. I feel at the moment, those Venn diagrams are like, here, I'm just trying to merge them. But in many ways, I feel that they merge really easily. It's like, you know, it's what is tracking what is tracking your spending, if not being mindful of what you're doing?   Right. I mean, you sit down and journal but journal your expenses, right actually know what you're doing in life, I actually think they they align quite neatly, I just haven't seen anyone do it before. And, and I, one of the things I've realized more and more about personal finance is that the SEC, the same five or six things, we all need to know how to do the basics. But we need to approach every person in a slightly different way to get those five or six things in. Once you're in, you'll learn them really fast, but you need to get in.   And that's why I sort of just occurred to me will be a fun thing to do. So yeah, I need it to be fun. As well, I need to actually want to be able to, if I have to get up at six in the morning, I have to want to   Tom: Yeah, big, big mindfulness fan, I try and do have a personal retreat every year. And man, I can just see how a lot of those concepts of just being present is so relevant. And you can basically apply it to anything and it's so natural into, you know, the currency that, that our resources that we live off of its camp can't wait for it to talk more about it and for it to come out.   7 Dollar Millionaire: Cool. Well it come at it. Well, if I finish it, it should come out next year. That's exactly what it is. I mean, it is this sense of in every place in our finances, if you're not aware, they take control of you rather than the other way around. And if you can be aware and mindful of what you're doing. So even to the standard market to you over emotional, are you under emotional, you know, how are you what's actually going on in you, that is making you do things that are not to your benefit and understanding those things are such important drivers and in the in the space. So addressing all those things. Equally, what's quite nice is I feel like I can recycle the some of the Happy Ever After book as well, because the middle of the middle bit of this book is a man being the same steps mission, money income saving, spending, investing, owning now those steps.   And so rather than to using sort of like the fairy tale, we sort of really creating a path. And as with so many things on sort of mindfulness, this is a path, you have to understand the path and now you hear whether the dob of paint was coming in, right? Don't get upset that you don't know where you're at, you're just putting a dob of paint is just the first dollar painting this will build. And that's Yeah, that's why I'm so happy like the analogy cuz it's right up the front.   Michael: Oh, this is great. I'm very excited to read the book. I want to shift gears here a little bit. And I'm curious to know if you have any tips or tricks or guidelines for folks to have these types of financial, personal financial conversations with a spouse partner significant other, because so often I hear in the Roofstock Academy is Hey, I'm all on board for real estate, but my husband isn't, or my wife isn't or my partner isn't interested? How do you bring them in in a productive way?   7 Dollar Millionaire: Yeah, it's hard. And you know, you, it's okay, we're gonna get back to the mindfulness, but just for a second, and I'll come back to this, right, because   Tom: It's all part of everything   7 Dollar Millionaire: You have to know is that you, you can only affect yourself, you can't create change outside yourself, you can only create change inside yourself. So you, you can't force a partner to come up to your speed when you want them to. So that's the number one understanding. So you got to be ready for them to not be prepared to do this.   The second thing is, it's why I wrote the book is for the original one happy ever after it was to outsource a lot of the conversation with this time, but that time with my daughter to paper, get her to read it. So I don't have to go through an enormous amount of the background of how this works, right? It I can just imagine it. When I realized my daughter didn't know anything about money. I was like, I've got a teach her this stuff. I don't want to spend every weekend for the next year having daddy daughter money lectures, because that's just you know, it's wrong.   Right? So but if I write her book, she can read it in their own pace, and we can have those conversations and she's already up to speed. Right? So to get some level of outsourcing so to encourage, could you read this book, have a look at this, what do you think about this, and then let the person do it in their own time. So they'll come up to speak because again, we go back to that you can only change you they have to change themselves on on their timeframe.   I think the other thing is too, sometimes it's useful just to have like a group budget as a track as a family exactly where all the money goes. Because that That, to me is like, is the starting point we're spending money on on these things. And you know, if there's any dispute, it's like, let's get the, let's get the receipts out, this is actually exactly where all our money went in the in this period. Because I think that's the, I think it's very difficult to jump from an investing mindset. Jump to it, without going through saving. And you have to warn you that that requires understanding your spending.   So those two things combined to be like, okay, we understand that what we're saving and what we're spending, okay, now we can invest our asset class, we can we can move on to as you said, How do I get my spouse to think about real estate, they're probably not thinking about it, because they're not probably not thinking about the saving and spending, the moment you think about your, I'm going to give up this spending to save the money, you tend to get a lot more interested in how much money that money is going to make for you. So you tend to get a lot more interested in the asset class. So I that's why I do see these things as being a 1234. And then you can get them interested in the asset class.   Tom: Maslow's hierarchy of conversations to have with your significant other. Yeah, it's, so this is a one would be, I guess, spending, saving, and then more offensive investing that I understand this kind of triangle correctly.   7 Dollar Millionaire: Okay, I will never allow spending to go in front of saving savings by okay. It's in the dictionary in the book in life saving comes first, right? Get the saving done first. And the saving is how you top up your yield. So the safe spending is cutting down on your spending is how you top up your savings. Right? Did you put the put the savings away first.   But yeah, and then once you've got savings, you need to do something with them. And so the thing you do with them is what asset class and then you can have those conversations. But if the person isn't engaged in the saving, right, then they're probably saying I don't want to invest in real estate, because actually, I'd rather be spending the money on a car.   And you've got to move the people have got to be with you on those steps. And it's, if then if they haven't got those fundamentals like Well, yeah, we could buy the car, but these savings will double in 10 years time and quadruple in 20, et cetera, et cetera. And then we'll be setting we can have as many cars as we want, if that's your thing. But let's just actually understand our priorities today, and where we want to be with that.   But I do think it's really important not to make that a face to face conversation too often, unless you're both open to that and let that someone like me, let an author let a book, let a TV show, do the heavy lifting, right? I mean, and then then have the conversation subsequently.   Michael: So for anybody listening, needing to broach this subject with a partner, spouse, you can either go get Happy Ever After by 7 Dollar Millionaire, that's great.   7 Dollar Millionaire: I couldn't have said it better myself. Love it, love it.   Michael: I know you're not really familiar with the US system of Roth versus non Roth, but we can talk about it in a higher level discussion. And so in the US, we have Roth and non Roth retirement accounts. A Roth is simply you pay the tax on the dollars that you invest on the front end, and then you get tax free growth and distributions on the back end, versus a non Roth is you get a tax benefit of reducing your taxable income today, it grows tax deferred, and then when you go to remove those dollars, it gets taxed at that point in time. Do you have a sense for pros cons, how people might be thinking about this?   7 Dollar Millionaire: The only thing that go into there is I'm assuming there are some other sub clauses in terms of what your access to the money in the intervening periods? Right? So I'm guessing from what you've said, that the one where you get, like, you pay tax now and you'd be don't pay tax on on the eventual money. You can only take it out on a certain date. And if you take it out between those dates, I'm assuming there's some kind of penalty as the as the price of actually getting a tax tax, tax free later on, are tax exempt.   Whereas the other one sounds more like well, if you know, you're actually if you're not being taxed on the money that goes in that's probably fairly similar. But I'm guessing it's probably a little bit freer money in terms of you can probably access it at any point in time.   Tom: The big gating factor between the two is there's limitations on who has access to use a Roth, this one that's taxed up front, and that your income needs to be under a certain level.   Michael: But the access to the funds are fairly similar in that you pay a penalty on both if you remove them before your retirement age. Yeah, yeah, I mean, I think if you can afford it, you probably want to put the money away that you can take it out later tax free. That to me sounds like you know, because then you, hopefully if it's a long period of time, and it compounds reasonably well, that's a bigger number than the money you're putting in. And that's how the only thing I could think of that. Honestly, these things is weighing me up. I people make tax codes way too complicated.   It's just like they make tax codes complicated. And then don't teach financial literacy in schools. The idea of this is beggars believe, right? The problem with making them complicated is very often, it tells people like, it's like, we go back to a dog with pain, right? We go back to our dob of pain, someone is telling you, I need you to paint the Mona Lisa, and you've never painted before, you're scared to put the first piece of paint on, you won't, you'll just, you know, you'll have you'll kind of you'll have like a punk rock moment, and you'll toss the canvas and break it on the wall and walk out the room.   That's what everyone does. Everyone's just like, this is too hard. I'm not doing it. And so you stop people actually getting involved. So I am going again to run again, all of these systems are way too hard. The correct answer is save them money, one of those will be doing deep, it will be better than none of them and don't over stress it.   Personally, I probably go to have the tax deferred later. Because I want the money to compound my age, that's probably wrong. Because I'm you know, I'm probably begin taking the money out in 10-15 years, so might not compound that much. And I might be better off actually having more money now. And I suspect that's where the differential is. That's probably where, you know, that's where the delta is on that. But God, I mean, that's just way too hard. Sorry, not telling you off it. But it's way too hard a question to put to someone who probably has very minimal financial literacy, I could probably work out what the right answer is with a spreadsheet. That means it's a really bad policy to be offering people. Sorry to criticize your country.   Tom: I like it.   7 Dollar Millionaire: Okay, good.   Tom: My wife's a tax attorney and keeps keeps busy. Yeah, moving tax code.   7 Dollar Millionaire: Oh man. It's actually it's actually also one of the reasons why, you know, the financial literacy thing is so important, because you can't trust governments with this stuff. In the we all think that everything we experience from childhood has been around forever. The reality is, before the Second World War, most people were dying around 65 70, they did not get a pension because they didn't need it. They were literally going to last maybe four or five years after they after they finished work, they would expect to work to death. And only after the Second World War, do we get this mass input of pension schemes? And which is why in lots of countries, they're just paid out of government revenues. And I'm not saying that's necessarily a bad thing. But it does. What it means is it's not necessarily going to be around forever. Tax codes aren't around forever. And it's one of the things that I worry too much about putting too much time into worrying about tax codes. Because by the time you take the money out, you'll have been through five different tax codes. It will all have changed so many times that if you try to think long range about tax, you're doing the wrong thing, because the risk on that is enormous.   Michael: That's such a good point. I think so many people hear about Taxco changing scramble to do whatever they can. And then next president next administration comes around things change scramble to do what we can and then you know, over and over and over again.   7 Dollar Millionaire: The people that make the money are Tom's wife. They make all the money!   Tom: She is just there, interpretating whatever, whatever comes out. Yeah,   7 Dollar Millionaire: Yeah, exactly.   Tom: It's good for the Schneider family. It's good for them.   Michael: That's great. Well, I think we just got to wrap this up, Tom, any other questions for the 7 Dollar Millionaire?   Tom: No, I love it. I think of all of our podcast guests. I never have more like impactful like meaningful, like things that I go off and do after the episode. So I really appreciate you coming on super excited about the book coming out.   7 Dollar Millionaire: Yeah, thanks very much for that. It's, it's, um, I'm really excited about it, too. It was the publishers Wiley to appeal to published happy ever after. And they, they asked me when I kind of that they were actually publishing happily ever after they said, do you want to do a follow up? And I was like, No, no interest. The and it because I took that to mean that did they want me to write teaching my daughter how to invest properly, and not as a cop out? That's just too complex.   You know, the reason I write what I write is I'm interested in getting people off the ground up to being able to understand other books. I'm not interested in the other books, those are all great. They've already been done, you know?     And then, you know, while he was coaxing me and saying, Well, no, we have this book series called “The Little Book of“ Series, which like the Little Book of Common Sense investing is written by John Bogle. And I'm like, kidding, right? I get to write a book in series that that goes in. And actually the bigger one for me was actually The Little Book valuation is by Aswath Damodaran. Who, I don't know if you guys know him, but in my industry, he's a god.   Aswath Damodaran book bbout this thick on on, it's just got damodaran valuation. And it's got every way of valuing everything ever. And it's the Bible for my industry. Everyone's got a copy everyone's read it cover to cover. It's literally and it I mean, it's dense. He's I think he's a, he's a professor at NYU stern. And just like, super clever guy. So he wrote the little book of value valuation. And they're asking me 7 Dollar Millionaire if I want to write one of those. So I thought I've got to think about it. So just like so thinking about it. And I was like, still didn't want to write a follow up on investing. Now, I did literally woke up one morning, I was like, the little book of Zen Money. And just that the title just runs so nice. I was like, Yeah, okay, what, what can I do with that, and I was like, then the subtitle came to my head was like, okay, a simple path to financial peace of mind.   Okay. And literally, I'm writing the thing, first word to last word and like, not how you should write, you should break it up into bits. And Right, right, like the middle first, and then the end. And then the beginning. And I'm literally going from the title. And the last word, all right, will be the kind of the end. And just going that direction, because it just makes sense to me all the way through.   Tom: Yeah, it's there already. just pulling back.   Michael: Yeah, gotta get it onto paper.   7 Dollar Millionaire: I stay away from the other analogy. But the other analogy is chipping blocks off the stone, right to make a sculpture. That's what I'm doing with this one. It's there. It's already there. I've just got to find it. enough fun. Yeah, I wake up every morning and get at it part from today, when it's fun to talk to you guys instead.   Tom: Yeah, I mean, one of the takeaways also for these conversations is like, you know, this 80-20 principle where, you know, you get 80% of your value from 20% of the work and that last 20%, like, that's where it gets, like overly complicated moving targets, you know, anxiety, all that stuff, but just getting up and getting that initial blob of paint? I mean, I feel like I'm probably repeating a lot of the conversation, but it's a really powerful one.   7 Dollar Millionaire: Exactly. I mean, you know, it's it really is that that first move separates you from everyone who's not investing, who's not saving. That's it, right that if you were the stat or last year, it was ended. 2019. Right there, 61% of Americans didn't have $1,000 in an emergency fund.   Just having $1,000, that puts you already in the top 39% of the richest country in the world. That is already that that's the 80 20 rule right there. They're taking their money and opening an investing account, bang, you're probably in the top 10%. Right. And taking those actions is what moves you along these things all the time. That's why is is so important.   Yeah. It's the problem, as you said is, someone tells you, you should invest. Oh, and you should invest in this. So what you know, that's just way too complex. It should just be you should save, you should invest, and probably, you know, VTI just go there. He can be a while before you find anything else. So you can overcomplicate it later when you're ready to overcomplicate it, but to start with just go there.   Michael: Love it.   Tom: Love it. And VTi is the vanguard index fund. That's just kind of just blankets. The economy beautiful. Yeah, big fan.   7 Dollar Millionaire: It's, it's the it's the biggest economy in the world. It's the top 500 companies in the biggest economy in the world. You know, when we if you live off grid, you're not involved in the global economy. Fine, right. But that's like naught point naught naught 1% of us that's discussing this properly off grid. The rest of us are buying stuff to live our off grid life anyway, we're in the economy. That's that the most natural hedge just by that.   Michael: And the folks that do live off grid probably aren't gonna be listening to this podcast on their iPhone, in the middle of nowhere wherever they live off grid, so I don't think we have to worry about them.   7 Dollar Millionaire: They probably are.   Michael: Living off grid with faster Wi Fi than any of us.   7 Dollar Millionaire: Exactly.   Michael: Awesome. Well, $7 millionaire Always a pleasure to have you on thank you again for hanging out with us and bestowing some wisdom. And like I mentioned, and I mentioned very much looking forward to the book when it comes out. I know I'll be getting it. We will both be getting it I'm sure.   7 Dollar Millionaire: Excellent. Well, thank you very much. It really it's always a pleasure. Really good fun. Thanks, guys.   Michael: Awesome. Take care. I'll talk to you soon.   Alright, everybody, that was our episode a big big, big thank you to 7 Dollar Millionaire always such a pleasure chatting with him. Tom, I know you and I get so much value out of our talks with him and after all of our conversations, we have going making some changes to our own personal finance realm. So very excited to do that yet again. If you'd like the episode, please feel free to leave us a rating or review wherever it is just in your podcast. If you're checking this out on YouTube feel, feel free to hit that like and subscribe button. And as always, we look forward to seeing on the next one. Happy investing.   Tom: Happy investing.

We find out that Ubuntu's website isn't accessible before you pass the warning about cookies. We discuss the latest Linux distribution... from Microsoft! Our listeners ask questions and make comments. Episode Time Stamps 00:00 Going Linux #411 · Listener Feedback 01:43 David: Switching between interim and long term support releases 10:05 Mike: Printer problems with HPLIP on Linux Mint 16:20 Michael: Thank you! 22:18 Mark: Distros and photo workflow 28:20 Anonymous: The problem with dark themes and Firefox 32:35 Daniel: ubuntu.com is not accessible 35:26 Greg: A new Linux distro 40:45 goinglinux.com, goinglinux@gmail.com, +1-904-468-7889, @goinglinux, feedback, listen, subscribe 41:55 End

We find out that Ubuntu's website isn't accessible before you pass the warning about cookies. We discuss the latest Linux distribution... from Microsoft! Our listeners ask questions and make comments. Episode Time Stamps 00:00 Going Linux #411 · Listener Feedback 01:43 David: Switching between interim and long term support releases 10:05 Mike: Printer problems with HPLIP on Linux Mint 16:20 Michael: Thank you! 22:18 Mark: Distros and photo workflow 28:20 Anonymous: The problem with dark themes and Firefox 32:35 Daniel: ubuntu.com is not accessible 35:26 Greg: A new Linux distro 40:45 goinglinux.com, goinglinux@gmail.com, +1-904-468-7889, @goinglinux, feedback, listen, subscribe 41:55 End

Welcome to Your Anxiety Toolkit. I’m your host, Kimberley Quinlan. This podcast is fueled by three main goals. The first goal is to provide you with some extra tools to help you manage your anxiety. Second goal, to inspire you. Anxiety doesn’t get to decide how you live your life. And number three, and I leave the best for last, is to provide you with one big, fat virtual hug, because experiencing anxiety ain’t easy. If that sounds good to you, let’s go. Hello friends, you are going to love this episode. Holy smokes, I just recorded it, so you’ve got me fresh, and I’m so excited. I just had such an amazing conversation with Mike Heady. He is an LCPC and he treats OCD and anxiety disorders. We talked about shame and shame and shame and shame, and he brought so much wisdom. You guys are going to love this episode. It is packed full of all the good stuff. So, I’m not going to waste your time. I just want you to get straight there and listen to it. Before we get started, if you haven’t left a review, please do so. I love getting reviews from you. When we get good reviews, it doesn’t just stroke my ego. That’s not the point. It is because the more reviews we get, the more people will come and listen to the podcast, which means then I get to help people with these incredible tools, these science-based tools. Hopefully, even just from today, if you’re first time listening, welcome. We are talking about shame, and you are going to get so much from this. So if you are listening, please do leave a review. I would be so grateful. And enjoy the show. ----- Kimberley: Welcome. I am so excited to have with us today, Mike Heady. He is an LCPC. That’s correct. Right? Michael: That is, yes. Kimberley: Yes. We’re going to have a conversation that actually might be my favorite topic in the whole of the podcast. We’re talking about shame. So, welcome. Michael: Thanks for having me. I share your passion for the conversation. Kimberley: Yes. Not that I love shame, but I like talking about shame. Michael: Yes. I agree. It’s hard to say you love shame. It’s like saying I love fear. Kimberley: Exactly. So, why are you interested in this topic? Michael: It’s been a professional evolution for me, originally being trained to treat anxiety disorders and OCD. We talk a lot about fear and uncertainty and we have a ceremonial way of responding to shame. We’re like, “Oh yeah, and there’s a shame too.” In the last couple of years, I’ve really done a deep dive into like, “Well, what is this?” Because a lot of clients are having a hard time getting better. I don’t think it’s the fear that’s hard for them to get past sometimes. I don’t think it’s the uncertainty. I think it’s the shame. I think it’s a different animal. When I started doing a lot of digging, I realized there’s a whole world of shame out there in the literature, and how it applies to OCD fascinated me. So, that’s my new passion project. Kimberley: Yeah. Same. Exact same experience. Also seeing how much fear in and of itself is a generator of suffering. But as you said, there’s this shame that’s generating suffering at exponential levels. So, I’m so grateful to have this conversation with you. for those who are listening and who might not really understand shame, would you be interested in giving me your working definition of what shame is? Michael: Sure. Are you okay if I elaborate on it a little bit? Kimberley: Yeah. Go for it. Michael: Okay. I think a good definition is that shame is a really painful, aversive, unpleasant emotional experience. Fear or disgust, it’s natural or instinctive for us to want to back away and get rid of shame. Shame is often brought on by some kind of real or perceived violation of a social norm that we actually believe in. So it’s not this mystical emotional thing. It’s a thing either real or perceived occurred. And then I experienced this negative, painful emotion of shame. That’s the short version of the definition. I think it’s worth talking about shame as having two levels of shame. We might call an adaptive kind of shame, the shame where we view it as a response to a specific episode, rather than some generalizable character flaw or full-on assault of our identity. I violated something I believed in, I feel bad, which is different than guilt because guilt is about apologizing to the other person for something you’ve done. But I might feel bad for violating a norm I believe in. Okay, there’s nothing toxic about that. There’s another level of shame that we tend to want to talk about more. It’s the toxic shame. That’s the shame that is unworkable. It’s always unhelpful. It is a response to a perceived or real violation of a norm that has broad sweeping characteristics to it. It is a full-on assault on our identity. It is a condemnation of the self. That’s the toxic shame. I can wrap up this as saying, what was incredibly helpful for me when I was going deep dive into what shame was is, yes, shame is an emotion. We know what emotions are. We all feel emotions. We’ve all felt shame. You and I, as therapists, spend our careers trying to help our clients have a different relationship towards painful emotions, and understanding what an emotion is, specifically around shame, I think was really enlightening for me. I derive a lot of this understanding from some work that occurred in the sixties and seventies, probably before then, but the work from the sixties and seventies is what brought it to my attention, that emotions are an emergent experience constructed by an interaction between our biology and our biography. The biography piece comes out of Silvan Tomkins work in the late sixties where he suggested that, yes, there’s a universal kind of biological experience that contributes to an emotion. But the part that completes it is our own narrative, which is unique to us. My interaction with the world, as I develop from a child to an adult, the experiences I have, my environment, that’s the secret ingredient to my shame. So what makes me feel shame isn’t necessarily what makes you feel shame. For instance, if I were to, while talking to you, suddenly break out into a red flush on my face, start sweating, and my voice start cracking, I might experience that as an embarrassment, like a small shame. But if you perhaps had terrible social anxiety disorder and the same thing happened to you, the same exact event, you might see that as a humiliation. Both are derivative emotions of shame. But humiliation is different from embarrassment in orders of magnitude of pain. Humiliation is closer to trauma than it is to anxiety. This is anyway my long-winded way of saying, yes, shame is a complex animal, and that’s the working definition I tend to have. Kimberley: Yeah. It’s a different way of explaining it. This opportunity makes me so happy. What you’re saying is, it’s on a spectrum, would you say? Michael: Oh, absolutely. Yeah. Kimberley: Now, let’s play that out. We’re talking about the biology, and then there’s the story we tell ourselves. Would you give an example for you? You and me, let’s say we both got embarrassed. Let’s say we both made a mistake or something. We embarrassed ourselves in front of each other, which is not going to happen here. But if we did, what might be a difference in the story we told each other which would indicate that higher level of shame or toxic shame? Michael: Sure. Let me clarify the story. It’s not just how we appraise the shame itself. That’s a part of it. But the story is like my upbringing. I was brought up in a blue-collar family. There wasn’t a lot of room for emotions, especially for the male members of the family. So if I encountered a situation where I felt vulnerable or sensitive or hurt, the expression of that emotion could be shut down. That expression of that emotion could be punished, ridiculed. Not that I was ridiculed, but it could have been. Someone’s narrative about a negative emotional experience could have been that and ongoing. They could have been bullied for being a sensitive kid, whereas you may not have. now you both may experience the same thing as a generic sense of shame. “I wasn’t the way I wanted to be. I wanted to be put together and intelligent and I made a stupid GAF, and I came across looking silly.” One kind of embarrassment for one is not necessarily the embarrassment for the other. That’s what I mean when I say “the narrative.” Kimberley: Yeah. Okay. This is wonderful. I think that maybe we want to take a look at, and I know I have a few questions. What I’d love to take a look at is, why would, let’s say someone feel shame for having a mental illness? Michael: Well, yeah, that’s a great question. I think there’s a whole lot of reasons why someone might feel shame. One of them could be, I feel shame because the mental illness – we can say OCD in particular since this is one of the things I primarily treat – is that the content of my obsessions themselves could have a taboo theme or they could be otherwise conceived as bizarre. That’s going to create a sense of “I shouldn’t have this thought, there’s something wrong with me I have this thought.” The helping field, in general, commonly misinterprets and doesn’t understand OCD. If you present this set of thoughts to them, you’re going to get a sense of judgment and rejection or humiliation, and that’s not made up fear. That’s a real fear. That stuff happens to people. That’s an example of how someone with a mental health issue can develop shame. It’s because they may have gotten that feedback or fear rightfully so that they would get that feedback. Another way of looking at it is just, “I shouldn’t have this because having this means I’m not working properly. I’m otherwise defective or broken.” It’s a silent problem for people – these emotional and psychological things. We have a lot more empathy and understanding for people with a physical problem than we do for someone who has a psychological or emotional problem. So, I think that there’s this built-in-- Kimberley: Stigma. Michael: Yes. Stigma. Right. Thanks. Yeah, exactly. And then there’s the people who’ve tried to get better. I’ve certainly seen a number of clients who’ve gone through years of therapy. They’ve worked diligently with great therapists, all very well-intentioned, and they failed to get better. “What’s wrong with me? I must be really broken.” I’m sure there’s countless other ways, but I’ll pass that off to you, I think. Kimberley: Yeah. I mean, I think these are all societal expectations that are placed on us. It’s funny, you brought up the question about the concept around being humiliated for having an emotion. Somebody had written a question like: How can I be considered “the man of the house” if I have anxiety? I mean, there’s so much shame in that question. There’s so much societal expectations in that question and stigma in that question. I think it’s definitely there, and I think you’re right. For the things that are unknown, I see that to be more shame. I think everybody understands sadness. So we don’t feel so much shame around it. But fear of harming your baby – let’s not talk about that. You know what I mean? Let’s push that down. Michael: Right. And not only because it’s universally taboo. We know that instinctually. We don’t need to really be told that. We know that, because that’s our response if we were to hear that from someone else. Until we have that intrusive thought ourselves and they’re like, “Oh, me too?” Shame, I think it’s distinguishing shame from the other negative emotions that people have, because I don’t think they’re all the same. Oh, negative emotions or negative emotions – let’s just learn how to handle them. Fear, that’s a tough one. But shame? Shame is the most painful. Kimberley: It’s ouch because it’s in silence too, I think. My thing I say all the time is that shame thrives in secrecy. One of the best things you could do is to tell it out loud. Michael: I was having a conversation with colleagues about this a couple of weeks ago, and someone brought up a slogan that comes from AA, which is, “We’re only as sick as our secrets.” It’s such a powerful message. The idea that speaking that secret allowed, speaking that shame aloud can be healing. Now it can also be traumatizing. We can probably get into that later in the episode. But I think that there’s discernment about how and who we share with, and us as therapists creating a space where that’s good and healthy for the person. But you’re right. Absolutely. The things that thrive in darkness are painful. Kimberley: Okay, so you have a client and they have just very typical symptoms of OCD, even if it’s very typical taboo, obsessions – this is for people listening – any disorder, depression, BFRB, eating disorders, how do you work with that shame with your patients? Michael: That’s a fantastic question. I’m always evolving on how I figure that out with a particular client. I think if I were to try to distill that down to something helpful to the listeners, I think as a therapist, it would start with the very first interaction I had with the client. The first contact is the first opportunity, probably the best opportunity to provide a safe space that’s understanding, validating, authentic so that the client can then experience this interpersonal interaction that they’re having with this therapist as welcoming towards disclosure of a secret or their shame. I think that that first contact is vital. You can come across as the kind of person they want to talk to and try to set the stage and make that an effort, build that therapeutic alliance, continue to work on a therapeutic alliance because if you don’t, it might be a lot harder to build the work to let them disclose that shame. And then from there, I think education about what shame is, like I brought up in the beginning, that shame can exist on this continuum, that there is actually an adaptive kind of shame. We don’t tend to talk about it. We don’t tend to see it because we talk about the toxic and the pathological shame, the one that keeps people stuck in hurt. Through that education, through a demystifying of it, I think, is incredibly valuable. I’ll talk about the compass of shame in a minute. I don’t want to steal all the time from you. It’s like I talk a lot. Kimberley: Go for it. No, do. Michael: I’ve been thinking about this in preparation for our conversation today. I was thinking like, how would I want to set up an ideal way of dealing with shame with a client and again, creating that therapeutic space that they’d want to share that. And then if we have this experience that once we hand our secret or shame over to another person like, “Here you go,” that’s what the clients are doing to us, they’re handing it to us. If we receive it and hold it with compassion and understanding, if we hold it with acceptance of them as a person, I think we introduced them to common humanity – one of the three things that show up with self-compassion, that common humanity – perhaps for the very first time in their life. Because this is such a secret, quiet problem, this might be the first time they’ve ever been met with common humanity and acceptance when they’ve revealed this. I think that’s immeasurably powerful for the client. I think it helps them create a healthy distance from that narrative that’s been telling them to keep it a secret, keep it a secret, or else you’ll get rejected. “Wait a minute. I wasn’t rejected.” Kimberley: Yeah. It normalizes it too. Right? Michael: Yeah. Kimberley: Sometimes when I hand over the why box that has all the different obsessions, that in of itself can be a shame killer because they’re like, “Oh my goodness, all of the things I have are right here on this piece of paper and you don’t seem alarmed at all.” Michael: Yeah. I’ve had email interactions with clients who are like, “Have you ever heard of this kind of presentation?” I’ll shoot them links to three books written about it. They’ve written entire books about this so you’re not alone. It’s so helpful for them. Kimberley: Yeah. Tell me about the compass. Michael: Yes. I was introduced to this through one of my mentors, and it really rang true for me as a useful concept. The compass of shame was developed in the 1980s by a psychiatrist by the name of Donald Nathanson. I don’t want to bore the audience with the history, but he researched shame basically that was his career. Nathanson had found through his research that there are four predictable and common unhelpful responses to shame. I’ll say toxic shame. We’re all talking about toxic shame. Those four represented the four points of a compass – north, south, east, and west. It doesn’t matter where they go. One of the points is withdrawal. Withdrawal is when we get quiet, silent, small. Like a dog who got caught chewing on the cash knows they did wrong. They get small, they get quiet. They try to disappear into the moment. That’s one common response to shame. Another one is avoidance, behavioral avoidance of situations and people and circumstances, but also through substances, through food, through sex, through anything that would be a direct response to a cue, “I’m going to avoid this feeling.” Then another part of it is to attack others. This shows up when you felt humiliated or embarrassed by someone else. Someone made you feel this way, so you’re going to lash out verbally or physically. In a sense, the way I think of it is in the sense of trying to balance the scales. “You’ve made me feel small and vulnerable and insignificant. I’m going to try to balance that out by making you feel the same way.” The last one I think by far the most common in the people that we’re going to be working with is attack the self. This is self-criticism, this is berating ourselves, self-condemnation, degrading ourselves. It’s often seen as “I’m going to be holding myself accountable for this failure real or perceived,” and that’s going to make it better, that there’s somehow a utility to this attacking self-response. But when you poke at it just a little bit, it’s completely unhelpful. It’s just a massive perpetuator of the problem. So, that’s Nathanson’s Compass of Shame. I think his point in bringing this up is, look, everyone’s toxic shame response is going to fall probably into one of those four. Where do yours? if we can bring awareness to that, maybe we can learn to pivot to a more functional or helpful response instead. Kimberley: Right. I think that that awareness, again, it’s validating and it’s normalizing the normal response to shame, which helps the shame, I think, in and of itself. Okay, so let’s play this out. If something happens, you’ve made a mistake or you’ve had a thought that you’ve deemed unacceptable, or you showed up in a way that created shame, you did all four of those things, what do we do from there? Or you did one of them. Now that we have this awareness, how might we meet shame instead in your thoughts, in your mind? Michael: I think hearing that from a client and I was watching it unfold in the moment, I might say, “Can we pause for just a minute? I think shame showed up for us.” He might even be able to see some of the behavioral changes in their eye contact and the postures. I think shame showed up. What are you doing with that right now? Because again, it’s silent. It’s not broadcasting this out loud. It’s silent. What are you doing? What’s going on in your mind? Probably reveal what you said, they did one or all four of those things – I would point that out, give it a name. We understand this process. This is somewhat of a predictable response. Can we hit the pause button and can we now make a choice to pivot to a different response. Pivot to what? Pivot to self-compassion maybe. That might be a teachable moment. What is self-compassion? Can I give you an experiential exercise on meeting this moment with self-compassion? I can model meeting this moment with you with compassion so you can see what that looks like and feels like. Instead of spending time in the head, in the verbal, in the ruminative come back to the feeling, because that’s what we’re trying to avoid. When we criticize ourselves, we’re trying to avoid and escape criticism, or using criticism to try to avoid and escape shame and humiliation. Okay, let’s come back to that. That’s painful. We can learn how to sit with that without having to beat ourselves up or escape it. I think people can sit with it in different ways. You can use it as an exposure opportunity for people who are feeling smaller kinds of shame, like embarrassment, like let’s do some exposure towards what it feels like to be embarrassed. If we’re dealing with a much more painful kind of shame, that humiliation kind of shame, let’s meet that with more direct self-compassion in this moment. I think it gets sticky a little bit when we introduce self-compassion, if we haven’t already introduced it, because like any intervention, it hinges on the client buying into it and thinking that they deserve to receive it. Kimberley: Right. I’ll give you my personal experience with this because I think, and I see a lot and I would add a fourth point to the compass, which is, now as you’re talking, I think this even different than what we talked about in previous conversations, just the two of us, is I think if I were really to track it, I think that another thing that I did when shame showed up is I swing into perfectionism. The stronger shame was, the more I would do good or be good. It’s an interesting reflection for me because I think the more I felt imperfect and the more shame that brought up, the more it’s like compulsive do good kind of thing, which I think again, might be why some of our clients get stuck around shame because there is that sort of self-punishment. “Well, I did a bad thing. Well, I have to neutralize that with a positive, good thing.” I don’t know. Just something I’m thinking about. Michael: No, I think that’s really great. I’m sure a lot of people listening are thinking right now, nodding their heads, “Yup, I go into perfectionism.” If I can channel Nathanson for a second, I imagine he would say, “That’s a type of avoidance. It’s an avoidant behavior. You’re doing this thing and it’s a compensation to numb, or to balance the scale.” If I do enough good, it cancels out the bad. The message is that that thing is intolerable to feel, and it’s not. Kimberley: Good catch. That’s true. It is. It’s like neutralizing the compulsion, right? Yeah. Okay. This is amazing. I have some questions from the audience that I think is a perfect segue, and there’s one that really hit me, really deepened my heart and I wanted to ask your opinion on. Somebody had asked, how do I manage shame for having symptoms? They didn’t express which ones, but I’m assuming it’s having symptoms of being a human of some respect. But I also have privilege and resources and the ability to get care, how do I manage shame when I have privilege? Michael: That’s a really great question. I think if I can flip that around a little bit, I can say that the cost of your privilege towards access to care, towards a good community of people, the cost of that isn’t more shame. We don’t want to shame ourselves for having opportunities. In a way, it moves you away from doing something about that, about that privilege. If you recognize I have privileged shaming yourself is useless. Who’s that for? That’s a silent response to try to balance out this. It’s an avoidance. It’s a running away from. So can we try to meet that? I’d say first with patients and then recognition, yeah, there is some privilege here and I feel bad about that, and then move into a “what’s next” kind of a mindset. Like, I still need to work on my own shame about having these symptoms. It’s not like I have to suddenly stop working on that because I also happen to have the privilege and the capacity to work on those. But I think we throw it into the same mix. It’s like, okay, so you’re shaming yourself. Which one of the four points of the compass are you doing now in recognition of a privilege? Once we get off of that unhelpful response, we can then maybe find a more helpful way to recognize the privilege, to speak out against the privilege, to prop other people up and help other people have access, things like that. But we can’t do that if we’re shaming ourselves, because shaming yourself, criticizing yourself, avoiding isn’t workable. Kimberley: Yeah. There’s so much of this like self-punishment involved as a response to shame. Like, okay, so I have this one privilege, so I must be punished for that before I can address the problem that I have almost. I’m so grateful that you answered that because I have seen that multiple times, many, many times with my patients and I’m guessing you too. You’ve talked about shame around lots of emotions. Interestingly, there were two very common questions, and I’ll leave these as the last two questions for you. There was a lot of questions around having shame for anger and there was a lot of questions around having shame for having a “groinal response,” which I’m assuming is in relation to some kind of sexual obsession or maybe even sexual orientation as well. Can you share your thoughts on those? Michael: Sure. Shame around anger, I think... I’m trying to interpret the question a little bit. I imagine it goes beyond just the feeling of being angry, but maybe the act of being aggressive, if I can make some interpretation there. I helped the client recognize that anger, like any other emotion, is universal. It’s an emergent experience. It’s not really up to you about whether you get angry or not. We don’t have to act on the anger. We don’t have to become aggressive either passively or physically aggressive about it. So, teaching them that there is some workability in our response to anger and that if we accept anger as an emotion, if we make room for anger as an emotion, we don’t need to have a response to it in the same kind of way. We can let it in. Susan David, in one of her Ted Talks, she said that emotions are data, not directives. I love it. Super helpful way of organizing your thoughts around that. It’s just, let the emotion be data. It’s if you’re responding to something in your life, something happened that it shouldn’t have happened and it wasn’t fair, and then you felt angry. Okay, I understand that process. I don’t need to do something about it to get rid of it because there’s that relationship to an emotion that can be unhelpful. Now I have to find a way to control or get rid of it. Notice we only do that with the negative side of emotions. We don’t tend to be like, “I have to get rid of my joy.” Kimberley: Too much joy. Michael: Too much joy. Kimberley: Unless we feel privileged, so then we’re not allowed to have too much joy. Michael: Right. Yeah. In response to the groinal stuff, I think, again, it comes down to your biological, your physiological, your groinal response isn’t really up to you. I think Emily Nagoski does a really great job in her talk about unwanted arousal, and such a powerful Ted Talk and really great education around that. Your body’s going to respond, whether you like it to or not. I used to joke around and say, the reason why the 13-year-old boy isn’t standing up at the end of Spanish class is because he wants to get more lessons. It’s because he’s waiting to not be embarrassed when he stands up. It’s not that he’s attracted to Spanish as a language –maybe he is – it’s because he had a response and it wasn’t really up to him. Okay, so bodies respond to things. Can we separate that out from the thing that was in our mind? Bodies respond to sex generically. It doesn’t matter who it’s with, what it is. Just the idea of it, the notion of it, the hint, and it response. So even people listening to us now, using the words like sex, might respond to the word, and that doesn’t mean you’re attracted to the word or to this podcast. Maybe you are, but it’s probably not. It’s that your body responded to things because of all these associative learning cues that are going on. That education is powerful. And then, of course, I treat shame the way I treat any toxic shame, which is, the response to it is the biggest problem that needs to try to meet it with something a little bit more akin to self-compassion and common humanity. Kimberley: I love it. Thank you. Oh, you nailed it. Is there anything else you want to share? Michael: I mean, not off the top of my head. I’m sure that we could dive into so many different rabbit holes on the subject, but I think this was a good intro to it. Kimberley: Yeah. Intro, but also with depth. I’m really grateful. I love to give as many applicable tools as we can. I feel like there is some better understanding. The compass is so good. It’s so helpful to be able to deconstruct it that way. Michael: Yeah. That was a game-changer for me when I heard about that too. I will add a couple of things, just in passing other ways of therapeutically addressing shame. Once we’ve agreed that those four points in the compass are not the way we want to handle it, we have to have a new way. There’s a, what used to be, I think, a Broadway show called Get Mortified. It’s now a podcast, and it’s people sharing humiliating and mortifying personal stories. Again, this is going out to strangers and this is an idea that I’m normalizing these experiences in my life. Maybe someone else can relate to it and maybe we can bring some humor to it. It’s not about making fun of the person or the situation, it’s about saying, can we all just laugh at the fact that we’re busy concealing something that is so universal and ubiquitous. Kimberley: Yup. Life happens, right? It doesn’t go to plan. Michael: Yeah. I think that’s the other piece. Once you’re ready for it, humor is hard to think of a more helpful response to shame. Kimberley: I’m holding back every urge right now to be like, “What’s the most mortifying thing that’s ever happened to you?” Michael: That’s a different podcast. Kimberley: I was once on a podcast where he asked that, a very similar question. It was on OCD and he asked me a similar question. I think I completely went into your shame compass, like all the things, “What can I do to avoid this conversation?” Michael: Yes, yes. I think that would be like a few cocktails and we’re going to record a podcast and maybe we can talk about that. But again, you can see, you can notice how even here, I could easily come up with two very shaming experiences in my life, and the difficulty of sharing that when I think that other people are listening to it. Why should I care? It’s because it’s a painful emotion. So even us therapists have a lot of work to do with personally so that we can show up with the client in a way that’s helpful. Kimberley: Right. When I was doing one of the Mindful Self-compassion intensives, this is with Kristin Neff and Christopher Germer, one of the activities where we had to stop and do activity with the puzzle we came with if you came with someone. And then you had to turn to a person you didn’t know, and you had to tell them one of the most painful things that’s ever happened to you. They didn’t really give you a lot of choices either. They were like, you’re here, you’re going to do it. The whole act was there was tears everywhere, flying across the room. But the thing was then, the person who’s listening was not allowed to say anything, except “Thank you for sharing.” It was so powerful. It was so powerful. They weren’t allowed to say, oh. You weren’t allowed to touch them. You weren’t allowed to say anything, except “Thank you for sharing.” Michael: And again, an immeasurably effective and important thing. That wasn’t self-compassion. That was compassion, right? This is why I think like you with your Instagram work and people like Chrissie Hodges and OCD peers, and anyone who’s an advocate for OCD that is building a community of people where they can interact like OCD has a community of people. These communities allow other people who are struggling with OCD to interact with each other. You create this group acceptance. The group has accepted you in, shame and all. You no longer need to conceal or keep secret this thing. The weight, the anvil that gets lifted off your shoulders, you no longer have to be weighted in the past. It’d be nice if we could generalize that outside of an OCD community and just say, the community at large has now been sufficiently educated about what OCD is and isn’t, what depression is and isn’t, what eating disorders are and are not, trauma, so we can be a lot more understanding of one another. Perhaps that’s a little Pollyanna-ish to hope for, but I think that that’s the direction we should head on. Kimberley: That’s the mission. Yeah. Well, I actually think that this is a perfect place for us to end because I think that that is where we’re at. That common humanity, we all have it. You’re not alone. Yes, it’s the most painful thing you’ll feel. You’ll feel like your heart is breaking at the time. All of these things are so normal and part of being a human. So I love that that’s where we’re at. Thank you. Michael: Thank you for indulging the conversation. Kimberley: Easily, so easily. Tell us about where people can hear more about you and know about you. Michael: Sure. As you mentioned, my name is Mike Heady. I’m the Co-Director of the Anxiety and Stress Disorders Institute of Maryland. I work with my other Co-Director, Dr. Sarah Crawley, who’s a Child and Adolescent Psychologist. The Executive Director and Founder is Dr. Sally Winston. She’s written a number of books on OCD. We’re in Baltimore, Maryland. We’re an outpatient, private group practice. We have over 20 clinicians that specialize in depression, OCD, anxiety disorders, and other related conditions. Yeah, that’s us. That’s me. Kimberley: Amazing. Well, thank you. I really am grateful. I feel so calm after these conversations too because I feel like it’s the more you guess, you get to settle into it. So thank you. I’m so grateful personally, and for the community here, who sounded like they were very excited about this episode. Michael: Well, thank you for having me on. Kimberley: My pleasure. ----- Please note that this podcast or any other resources from cbtschool.com should not replace professional mental health care. If you feel you would benefit, please reach out to a provider in your area. Have a wonderful day, and thank you for supporting cbtschool.com.

Today’s guest — UgoVirtual’s Michael Cohen — describes the hospitality industry like a snowflake – add a little heat and, well, you can imagine. Hotels and cruises rely on proven practices to keep guests happy. Luckily, XR doesn’t have to disrupt those practices; they can build on top of them.  Alan: Coming up next on the XR for Business podcast, we have Michael Cohen from UgoVirtual. We’re going to be talking about how virtual/augmented/mixed reality solutions — or XR solutions — can be used for front-of-house for customer facing activations, from AR to VR. Pre-experiences, what is it like to book this hotel, looking all around you? And also the back-of-house: how do we use this technology to give the best possible training for the staff, so that the customer experience is flawless across the board? All that and more coming up, on the XR for Business podcast, coming up next. Michael, welcome to the show, my friend. Michael: Thank you very much. Really appreciate it, Alan. Alan: It’s my absolute pleasure. It’s been a long time coming. We’ve been kind of doing the dance, watching each other grow. And I’m really excited to learn about what you guys are doing in the hospitality field. It feels like it’s a greenfield opportunity in hospitality, from travel/tourism. A bunch of companies started with, “We’re going to put a 360 camera and let you have a virtual tour.” But explain to us, what are you doing at UgoVirtual, and what is the response so far in the hospitality industry? Michael: Well, first of all, timing is everything, as we know. [chuckles] And the global travel and hospitality industry is absolutely a greenfield opportunity. It’s primed for scale and expansion in regards to XR. The reason being is that there have been investments and there have been initiatives, both on the brand and enterprise level of hospitality and travel companies, but also in startups and larger companies who have enabled, let’s call it a slice of VR or a slice of AR. Or as you mentioned, enabled OK 360 hotel tours that were maybe derivative out of the real estate market and that sort of scenario. Now, the opportunity is very, very serious for UgoVirtual, because we are the travel and hospitality virtual solutions company, very myopically focused to both consult to the major travel and hospitality brands to help them navigate and make investments and strategic decisions for the next three, four, five years on what XR will be for them. And also from our perspective, we have a portfolio of XR oriented solutions that are very focused and linear to the travel and hospitality space. So we’re not taking generic solutions and trying to overlay them on travel and hospitality. The group that’s involved with UgoVirtual — who I’m a strategic advisor to — we’re all 15-20 year veterans on hospitality technology commercialization for the front-of the house, which is guest facing solutions and the back-of-the-house, which is employees and staff. So when you overlay that kind of multi-decade experience on how to get technology efficiently deployed, efficiently commercialized, exceed the demands or the needs of travel and hospitality brands, with these now slowly maturing VR/AR/XR opportunities, it’s a wonderful fit for UgoVirtual right now. Alan: So give us an example. You talked about front-of-house, customer facing solutions. Let’s start with front-of-house and then we’ll go back-of-house. Because I don’t know if you know this, but I actually met my wife working at Delta Hotels in Toronto. Michael: [chuckles] That’s perfect. Alan: Yeah.

Today’s guest — UgoVirtual’s Michael Cohen — describes the hospitality industry like a snowflake – add a little heat and, well, you can imagine. Hotels and cruises rely on proven practices to keep guests happy. Luckily, XR doesn’t have to disrupt those practices; they can build on top of them.  Alan: Coming up next on the XR for Business podcast, we have Michael Cohen from UgoVirtual. We’re going to be talking about how virtual/augmented/mixed reality solutions — or XR solutions — can be used for front-of-house for customer facing activations, from AR to VR. Pre-experiences, what is it like to book this hotel, looking all around you? And also the back-of-house: how do we use this technology to give the best possible training for the staff, so that the customer experience is flawless across the board? All that and more coming up, on the XR for Business podcast, coming up next. Michael, welcome to the show, my friend. Michael: Thank you very much. Really appreciate it, Alan. Alan: It’s my absolute pleasure. It’s been a long time coming. We’ve been kind of doing the dance, watching each other grow. And I’m really excited to learn about what you guys are doing in the hospitality field. It feels like it’s a greenfield opportunity in hospitality, from travel/tourism. A bunch of companies started with, “We’re going to put a 360 camera and let you have a virtual tour.” But explain to us, what are you doing at UgoVirtual, and what is the response so far in the hospitality industry? Michael: Well, first of all, timing is everything, as we know. [chuckles] And the global travel and hospitality industry is absolutely a greenfield opportunity. It’s primed for scale and expansion in regards to XR. The reason being is that there have been investments and there have been initiatives, both on the brand and enterprise level of hospitality and travel companies, but also in startups and larger companies who have enabled, let’s call it a slice of VR or a slice of AR. Or as you mentioned, enabled OK 360 hotel tours that were maybe derivative out of the real estate market and that sort of scenario. Now, the opportunity is very, very serious for UgoVirtual, because we are the travel and hospitality virtual solutions company, very myopically focused to both consult to the major travel and hospitality brands to help them navigate and make investments and strategic decisions for the next three, four, five years on what XR will be for them. And also from our perspective, we have a portfolio of XR oriented solutions that are very focused and linear to the travel and hospitality space. So we’re not taking generic solutions and trying to overlay them on travel and hospitality. The group that’s involved with UgoVirtual — who I’m a strategic advisor to — we’re all 15-20 year veterans on hospitality technology commercialization for the front-of the house, which is guest facing solutions and the back-of-the-house, which is employees and staff. So when you overlay that kind of multi-decade experience on how to get technology efficiently deployed, efficiently commercialized, exceed the demands or the needs of travel and hospitality brands, with these now slowly maturing VR/AR/XR opportunities, it’s a wonderful fit for UgoVirtual right now. Alan: So give us an example. You talked about front-of-house, customer facing solutions. Let’s start with front-of-house and then we’ll go back-of-house. Because I don’t know if you know this, but I actually met my wife working at Delta Hotels in Toronto. Michael: [chuckles] That’s perfect. Alan: Yeah.

Ask someone with enough experience with 360 filmmaking (like Alan), and they’ll tell you — it’s not always been a user-friendly undertaking. From exporting to editing, making great 360 content could definitely be a chore. Insta360 Marketing Director Michael Shabun visits the podcast to explain how their products try to make the process seamless for all 360 filmmakers. Alan: Welcome to the XR for Business Podcast with your host, Alan Smithson. Today’s guest is Michael Shabun from Insta360. He’s the marketing director of Insta360 and leads North American marketing strategy, partnerships and communication efforts. Michael specializes in helping overseas brands build their presence in North America. Previously to joining Insta360, Michael led the Business Development Team for DJI — that’s the crazy drone company in North America — where he was instrumental in moving the company into the public spotlight through a series of strategic partnerships with entertainment, sports, and enterprise verticals. If you want to learn more about Insta360 and the awesome cameras and platform that they’ve built, you can visit insta360.com. Michael, welcome to the show, my friend. Michael: Thank you so much for having me, Alan. Alan: All right. Tell us what Insta360 is, and how you got involved with it. Michael: It’s been quite a ride that the last couple of years. Insta360 actually started off as a very tiny company in the dorm room of our founder and his name is JK Liu. And what he wanted to do was create a product that was simple and easy to use and had 360-degree capabilities. And he didn’t really see an all-in-one product in market like that at the time, four years ago. And so he created the hardware and wrote the software to make 360 truly a consumer product. And in that four years, Insta360 has grown to become the global leader in 360-degree cameras, whether it’s on the consumer, prosumer, or professional side. We now have 11 products in market today that, again, range from tiny little portable cameras that are fun for social media, all the way through to cinematic cameras that now shoot 11k. We run the gamut in terms of what cameras are in market, could we cater these cameras, too. And at the end of the day, it’s really all about the user experience. So how do you create a powerful, strong camera, 360 camera tool, but also give it the ease of use of a consumer product, and not have to spend too much time in post and all those things? Alan: Insta360 in my mind really stands out above the crowd, is for you guys to be the number one 360 camera company is saying a lot because there have been a lot of entrants into this market. Samsung, Nokia entered with their OZO, Jaunt — which recently just got sold to Verizon — they had their Jaunt One camera. There’s been a ton of companies try to come to market with a 360 camera. There was even the Bubble Cam out of Toronto. But where you guys, in my opinion, have really made a big impact — and I love this about it — is two things. One, ease of use. I can take a photo, it stitches on my phone. I can take a video, it stitches on my phone. But then, the user experience on my phone is absolutely spectacular. I can create a tiny planet, I can create an animation, I can post it directly to all my social media platforms, instantly. And that’s where I think some of the other larger companies have failed. They’ve created amazing hardware, but they failed on the delivery of the actual experience, from the hardware to the software, out to how people actually want to use it. Where did you guys come up with the idea of the stabilization? Because this is key to VR. One of the key things about the Insta

Ask someone with enough experience with 360 filmmaking (like Alan), and they’ll tell you — it’s not always been a user-friendly undertaking. From exporting to editing, making great 360 content could definitely be a chore. Insta360 Marketing Director Michael Shabun visits the podcast to explain how their products try to make the process seamless for all 360 filmmakers. Alan: Welcome to the XR for Business Podcast with your host, Alan Smithson. Today’s guest is Michael Shabun from Insta360. He’s the marketing director of Insta360 and leads North American marketing strategy, partnerships and communication efforts. Michael specializes in helping overseas brands build their presence in North America. Previously to joining Insta360, Michael led the Business Development Team for DJI — that’s the crazy drone company in North America — where he was instrumental in moving the company into the public spotlight through a series of strategic partnerships with entertainment, sports, and enterprise verticals. If you want to learn more about Insta360 and the awesome cameras and platform that they’ve built, you can visit insta360.com. Michael, welcome to the show, my friend. Michael: Thank you so much for having me, Alan. Alan: All right. Tell us what Insta360 is, and how you got involved with it. Michael: It’s been quite a ride that the last couple of years. Insta360 actually started off as a very tiny company in the dorm room of our founder and his name is JK Liu. And what he wanted to do was create a product that was simple and easy to use and had 360-degree capabilities. And he didn’t really see an all-in-one product in market like that at the time, four years ago. And so he created the hardware and wrote the software to make 360 truly a consumer product. And in that four years, Insta360 has grown to become the global leader in 360-degree cameras, whether it’s on the consumer, prosumer, or professional side. We now have 11 products in market today that, again, range from tiny little portable cameras that are fun for social media, all the way through to cinematic cameras that now shoot 11k. We run the gamut in terms of what cameras are in market, could we cater these cameras, too. And at the end of the day, it’s really all about the user experience. So how do you create a powerful, strong camera, 360 camera tool, but also give it the ease of use of a consumer product, and not have to spend too much time in post and all those things? Alan: Insta360 in my mind really stands out above the crowd, is for you guys to be the number one 360 camera company is saying a lot because there have been a lot of entrants into this market. Samsung, Nokia entered with their OZO, Jaunt — which recently just got sold to Verizon — they had their Jaunt One camera. There’s been a ton of companies try to come to market with a 360 camera. There was even the Bubble Cam out of Toronto. But where you guys, in my opinion, have really made a big impact — and I love this about it — is two things. One, ease of use. I can take a photo, it stitches on my phone. I can take a video, it stitches on my phone. But then, the user experience on my phone is absolutely spectacular. I can create a tiny planet, I can create an animation, I can post it directly to all my social media platforms, instantly. And that’s where I think some of the other larger companies have failed. They’ve created amazing hardware, but they failed on the delivery of the actual experience, from the hardware to the software, out to how people actually want to use it. Where did you guys come up with the idea of the stabilization? Because this is key to VR. One of the key things about the Insta

All the world’s a stage, but in AR, that’s a stage we’re still building. Visualix is hard at work building that stage with their street mapping technology, which will one day help make everything from digital maps to Pokémon Go a whole lot better. Co-CEOs Michael Bucko and Darius Pajouh drop in to discuss their technology with Alan. Alan: Welcome to the XR for Business Podcast with your host, Alan Smithson. Today’s episode is with two amazing people from a company called Visualix. Michael Bucko and Darius Pajouh are really, really passionate about analytics and teleinformatics. Michael is a CTO and co-CEO of Visualix and has a computer science/teleinformatics background, he worked as a data and software engineer and founded many companies before. At Visualix he does packaging, partnerships, and technology, as well as make sure that Visualix has the best tech team in the world. Darius, on the other hand, is the co-founder and also co-CEO. He studied physics with a specialty in non-linear optics. He did not stay in research for long, because he founded a startup and then raised $200,000 and it fails — we’ll get into that — but he worked at a company called Innogy, the largest energy utility company in Europe. And the venture developer program that allowed employees to start companies, funding from the mother company. And so that’s how in 2017, Visualix was born. To learn more about Visualix, you can visit visualix.com. Welcome to the show, Michael and Darius. Darius: Thanks. Thanks for having us. Michael: Thank you very much. Welcome. Alan: We’ve been talking for so long and now we finally get to have a conversation on the record. Michael: Amazing. It’s been awhile. Alan: It’s been a minute. It’s funny, because one of my interviews today was with Dr. Walter Greenleaf. He’s been working in VR for 33 years. Darius & Michael: Wow. Alan: So when you think you’ve been pushing hard for a long time, think about Dr. Greenleaf. So, Michael, tell us what is Visualix and how does it work? Why somebody would want to use it? Michael: Ok, so Visualix is a mapping and positioning platform. We allow the largest scale, most reliable augmented reality in the world. It’s very simple. You take a mobile phone and you map a space, for instance, your apartment or a warehouse. And then in this map, in this digital twin that you’ve created, you can place augmented reality content. And then people — viewers — can see this content in real time extremely accurately. And it works at scale. So it’s very, very reliable, works at scale. And we have an SDK for that. Darius: And if I may add something, so the USP that we created is that we do all the computation on the backend. So we use the mobile only as a sensor to really get the data in terms of data we get on the phone. But the real computation, the heavy lifting for mapping, as well as localization, is in the backend side. So this allows us to basically escape the limitations of mobile devices such as phones or let’s say, AR glasses that only allow shared experiences on an area of about 20 square meters or 50 square meters. So basically a small room. Where we extend this from 20 square meter to 20,000 square meters. So about a thousand fold. And this is something that you only can do if you have a powerful backend. And this basically makes us the only company that can create one spatial map that is together. You can basically create one spatia

All the world’s a stage, but in AR, that’s a stage we’re still building. Visualix is hard at work building that stage with their street mapping technology, which will one day help make everything from digital maps to Pokémon Go a whole lot better. Co-CEOs Michael Bucko and Darius Pajouh drop in to discuss their technology with Alan. Alan: Welcome to the XR for Business Podcast with your host, Alan Smithson. Today’s episode is with two amazing people from a company called Visualix. Michael Bucko and Darius Pajouh are really, really passionate about analytics and teleinformatics. Michael is a CTO and co-CEO of Visualix and has a computer science/teleinformatics background, he worked as a data and software engineer and founded many companies before. At Visualix he does packaging, partnerships, and technology, as well as make sure that Visualix has the best tech team in the world. Darius, on the other hand, is the co-founder and also co-CEO. He studied physics with a specialty in non-linear optics. He did not stay in research for long, because he founded a startup and then raised $200,000 and it fails — we’ll get into that — but he worked at a company called Innogy, the largest energy utility company in Europe. And the venture developer program that allowed employees to start companies, funding from the mother company. And so that’s how in 2017, Visualix was born. To learn more about Visualix, you can visit visualix.com. Welcome to the show, Michael and Darius. Darius: Thanks. Thanks for having us. Michael: Thank you very much. Welcome. Alan: We’ve been talking for so long and now we finally get to have a conversation on the record. Michael: Amazing. It’s been awhile. Alan: It’s been a minute. It’s funny, because one of my interviews today was with Dr. Walter Greenleaf. He’s been working in VR for 33 years. Darius & Michael: Wow. Alan: So when you think you’ve been pushing hard for a long time, think about Dr. Greenleaf. So, Michael, tell us what is Visualix and how does it work? Why somebody would want to use it? Michael: Ok, so Visualix is a mapping and positioning platform. We allow the largest scale, most reliable augmented reality in the world. It’s very simple. You take a mobile phone and you map a space, for instance, your apartment or a warehouse. And then in this map, in this digital twin that you’ve created, you can place augmented reality content. And then people — viewers — can see this content in real time extremely accurately. And it works at scale. So it’s very, very reliable, works at scale. And we have an SDK for that. Darius: And if I may add something, so the USP that we created is that we do all the computation on the backend. So we use the mobile only as a sensor to really get the data in terms of data we get on the phone. But the real computation, the heavy lifting for mapping, as well as localization, is in the backend side. So this allows us to basically escape the limitations of mobile devices such as phones or let’s say, AR glasses that only allow shared experiences on an area of about 20 square meters or 50 square meters. So basically a small room. Where we extend this from 20 square meter to 20,000 square meters. So about a thousand fold. And this is something that you only can do if you have a powerful backend. And this basically makes us the only company that can create one spatial map that is together. You can basically create one spatia

Jeff & Will talk about their upcoming trip to New York City for the Romance Writers of America national conference and reveal the news that they will be among the presenters at the RITA Awards ceremony on Friday, July 26. Will reviews The Masterpiece by Bonnie Dee while Jeff reviews a book Bonnie co-wrote with Summer Devon called The Nobleman and the Spy. Jeff interviews Michael Vance Gurley about his new YA steampunk novel Absolute Heart (Infernal Instruments of the Dragon #1). Michael discusses the inspiration behind the story, what he did to build the world it takes place in and what he hopes for the trilogy. He also talks about what's coming up next for him. Complete shownotes for episode 198 along with a transcript of the interview are at BigGayFictionPodcast.com. Interview Transcript - Michael Vance Gurley This transcript was made possible by our community on Patreon. You can get information on how to join them at patreon.com/biggayfictionpodcast. Jeff: Welcome Michael to the podcast, or back to the podcast I should say. Michael: I'm super excited. Thanks for having me Jeff. Jeff: Yeah. We were talking before I hit the record button that we last had you on in Episode 42 and now we are at 198, it's kind of crazy. So like you did the first time we had you on, you've come up with a book that I didn't even know I needed to read when I first got to read it. So you've got this YA book called 'Absolute Heart'. It's the first book in the 'Infernal Instruments of the Dragon' series. Tell everybody what this is about, both the book and the series behind it. Michael: 'Absolute Heart' is above all else a steampunk book. It's an adventure set in a world where clockwork powered England - in 1880s Victorian era England - is at war, a sort of Cold War, when we first pick up the series, against the Magically Powered Ireland who's been kind of besieged by the Brotherhood of the mage. It's a clock. It's a warlock group that is sort of made the queen subservient to them in ways you have to find out when you read it. And it's really the story about two boys. Gavin the high councilman's son from England and his friends, following him when he has these terrible secrets - he thinks they're terrible - and when they're found out he could be executed for them, for at least one of them. So he does what all teenagers do when they have something awful happen and they think they're gonna get trouble, he runs away and his friend, his best friend Landa who's an art officer, which is a mechanic, a computer engineer and she's a powerful female character that I'm really proud of. And she has his back and challenges him and calls him foolish when he's foolish and she goes with him and some other people who have their own agendas on this quest. Then the other side, the Brotherhood, sends Orion of Oberon who is a young warlock of immense power because he's the nephew of the ailing Irish Queen. They send him off to get the most powerful weapon in the world - the dragon stones and there's a lot of mystery and history about the dragon stones and what they are and what they can actually do, but they want them to end this war in their favor. So of course they have a meet cute, or at least I hope people think it's a meet cute. They have to decide like, are they going to get together? Will they/won't they? Of course, there's the will they/won't they thing. I'm really excited about the steampunk adventure and it sets off and is set to be a trilogy so I'm really excited about that, and hopefully people will like it - the inclusion of fairies and the air steamships and all the wonder that is steampunk. Jeff: Steampunk it's so not really anything I read... I dabble in it periodically, but something about Gavin and Orion and the bad ass friend you gave Gavin. Full disclosure to the listeners, I read a very early draft of this. You have a lot going on in book one, what you've parroted back now, into a more condensed story, but how did all this coalesce and come together and what was the inspiration? Michael: You really should pat yourself on the back because your viewers should know that you read an early ARC and gave me notes, and edited, and really kind of dissected it for me - like, wherever it was messy you, like a good editor said, "That's messy." The research starts with reading steam punk books and reading a lots of YA, which is of course a terrible addiction of mine. In reading all of that steampunk and finding those characters that you like, and you want to write about - because I use Scrivener, you have the photo option to put your vision of the characters, the places, the ships - you put photos in there and I work with a split screen so I can always reference that, so I never really lose track of it. But yeah, it was great looking into all that steampunk stuff and going into like Cassandra Claire's 'Clockwork Angels' series or Scott Westerfield's 'Leviathan' series. And if I can get even a little bit of that spirit I'll be really happy. But it starts with loving steampunk. You really should write what you know and write what you love. I've never been an airship captain but I love reading about them and I love that whole idea. And you know, thinking about like 'Leviathan', that series has a powerful gender bending quality to it, with the girl because she has to, dresses like a boy and acts like a boy in order to have a career - and I love that. I hope I've engendered Landa with that a little bit as well. Jeff: What went into creating your world of magic in Ireland and steam power and clockwork in England, because there's so much that you can pull from to create the steampunk universe. What was your decision to make these things your universe? Michael: Steampunk is - one of the amazing things about it is, an amazing thing about worldbuilding as well, is you can go with historical fiction. You know, like my first book and it's wonderfully creative but you're also stuck with... you can't lie. It's historical fiction, you can make up characters and you can make up some things, but really if you get too far away from reality, people stop believing in what you're writing about with historical fiction. At least I think so. I stuck with the roaring 20s pretty well and that kind of thing. Steampunk is like a little bit to where you're in the 1880s Victorian era. But then you have these advances and you can get creative and wild and all of that. A lot of that came from traveling for me too, like I've traveled to Ireland and I kissed the Blarney Stone, which of course means I'm full of B.S. I guess, the gift gab you know. And then I went to England and I went to Stonehenge and I played around amongst all of the hinges there, because that's where they keep them, and how a lot of fun. And the idea of the magic stones and power and Irish magic and castles - and then of course the troubles with the war between Northern Ireland and England - and I just rolled that back 40 years or so, and brought all that magic and the Stones and the power, I brought all that together and that's really where the idea came from. I also wrote a comic book like 20 years ago that had a lot of the fantasy stuff in it and it never got published but I tweaked it and changed it throughout the years. You can almost say that this part of this book- the backstory, the fantasy magic side - is about 20 years in the making, which I guess makes this a labor of love. Jeff: That's very cool that it goes back quite that far. Michael: Makes me feel old saying it out loud. Jeff: You could have had the idea when you were 5 or 6. What do we have to look forward to as the as the trilogy progresses - without obviously spoiling anything necessarily - but what can you kind of hint at about the story arc? Michael: Well, you know I'm a big fan of sci-fi, and Steampunk is really an offshoot of sci-fi in a way, or vice versa I guess. But, you know 'Star Wars' originally was 'Star Wars' and then they added 'A New Hope' to the title when they were like, "Well, you know Darth Vader is still out there." I mean, you know they gave Luke and Han Solo some medals. But, you know, then you get Darth Vader out there. So I love that idea of there's always more. If you look for it, if you see the little bits, like there's actually Darth Vader and an emperor... we're still at war guys, so come back for 'Empire', and guess what, it's going to get darker and worse and that's really kind of what's happening here - the book sort of gives you an ending but - and I think so does every book [in the series]. It has an ending, but it really isn't. If you're reading it, you know there's a lot more that's about to come down, and we might lose some people along the way, and maybe find some new people that you love, who's together might not always be together. Jeff: So with everything, between the magic and the clockwork and the steam and everything, your story, your book bible for this must be huge. Michael: I used this great British author named Ellen Gregory who did some high seas adventure, and she read an early Edit 2 and gave me some criticisms - which I kept calling British-isms - and gave me some pointers in that, and we were joking about that too, that I have one hundred pages on the parts of a ship... hundreds of pages and you could just bore people to death writing about that. It's like giving that little bit to make it believable, and make it feel fantastic or whatever, and then let it go. And then I just use that incredible knowledge about mid ships and jibs at parties. I can talk about all that stuff at a party now, but you don't put too much worldbuilding in, but it is fun. I do have lots of stuff, like when I'm writing, there's fairies in the book and I did so much research about Oberon, the king of the fairies and all that history. And then my amazing editor Dawn Johnson at Dreamspinner/Harmony Ink - I mean the whole team has been amazing, and each person has challenged me. Which is really part of the deal, you have to kill your darlings right? You have to allow some of your characters to change with some of the professional feedback. And so, anyway, I was able to use that research and pull it in and I still miss stuff, and some of those editors were like, "Hey, you know the name of that person? Shouldn't it be this, for this reason historically?" I'm like, "Yep, I don't know what I was thinking." You know, And so it really takes a village, you know. Jeff: What do you hope people get out of this book? Michael: What I'm hoping to get out of it is enough people interested to get a whole trilogy out of it and to get an audio book. I really want to hear this story come alive - the swashbuckling adventure come alive. I hope people get entertainment out of it. I hope they feel empowered and maybe challenged on their beliefs a little bit, which is, you know, a lofty goal. And it sounds like hubris to say it, but I hope people read it and see the LGBTQ+ world is just like everything else. It's steeped in mystery, and history, and great characters with amazing depth, capable of heroic acts and terrible evils, and everything in between. You know, some people will write a character and be afraid to make the gay character or the trans character do something horrible, but that's wrong. They have to do everything that everyone else does in order to make it real. And so I'm hoping people will forgive me if I do something horrible to a character, or make them do something terribly wicked... you know, mustache twirling - and not, of course, hate the straight characters that do bad things as well. Jeff: Right. Now, you kept a lot of this book in your family, in some ways too, because your husband Jason Buren did the cover and interior art - and the cover is gorgeous. Michael: Thank you. I love the art. Jeff: How did he come to get involved in it an what was it like collaborating with him on those elements? Michael: Well, Jason's an amazing artist and graphic designer. We actually worked on the first one together and we worked on comic books together and what I realized through it - honestly working with Dawn and the great editors, kind of makes you realize some things - you have to back up and state your vision. Say what you want. Show covers of things you like, and things you don't like, and then not micromanage it. Because then what you're going to get is my artistry, which I'm a writer you know, not technically a graphic artist. So you really get your best work if you let the artist kind of figure it out and that's what happened. I let go of the reins of both books and I think that the covers are amazing, if I do say so myself. I think this cover is so exactly what I wanted to be, and I was unable to say it out loud. And that's what a good artist should do in the interiors too. I wanted so badly to have chapter art and I know that people don't have to let you do stuff like that, but [my publisher] Dreamspinner was so amazing. I pitched this idea of clockwork meets fantasy with the Dragon Wing and the clockwork gears together So I'm so excited to show some of that together with the dragon wings with the mixture. Anyway I'm so excited and geek about it. I even got a little gears as text breaks in the art, in the books, it's really fun. It's really gorgeous. But you, know let go and see what happens. That's the idea. Jeff: When you were here in Episode 42, we were talking about a historical m/m hockey romance called 'The Long Season'. This is a total departure. Unless you can talk about the fact that you're dealing with historical times. Had you always seen in your career switching genres so completely? Michael: You know that's a great question. I want to challenge myself to do something completely different every time. And so, like being a new writer, writing historical fiction was crazy. That's too much to take on. I said, "Well, whatever. It's a labor of love, you know?" So then for my second novel, a trilogy? Themed like science fiction? Like, "Oh you're crazy, that's too much. You're not going to handle it." And who knows what we'll see. The first one got picked up, thank you Dreamspinner and I'm super excited about it. I want to challenge myself and I love that genre. So I say, let's do something completely different. People ask me about doing a sequel of 'The Long Season'. We're doing another hockey book. You know, I'm really proud of the fact that I wrote a character, Maggie in 'The Long Season' who was Brett's best friend. Turns out Bret's best friend started off with John Paul, which I'm really proud that people want a Maggie story and I think that's amazing. Who knows when that might happen. I might do that. My grandmother certainly, when she read it before she passed away, she said it can't end here and she's right... another story. And I did all that roaring 20s research... who knows, I might go back, but I want to challenge myself to do something different. I could write another hockey book because I love it and I love the whole romance side of it and who knows. Jeff: I was thinking you need to find a way to introduce hockey into the Infernal Instruments universe. Michael: I mean, there might be some sports related in there a little bit, but like medieval hockey? That would be fun. I mean the 1880s isn't too far away from Lord Stanley, so they could theoretically run into Lord Stanley somewhere. You know that can happen. Good idea. Jeff: Do you foresee more in this universe, potentially if the if the trilogy works out and is successful? Michael: Yeah. I mean, you know, I think it's set up perfectly for a TV show. That's huge right. But I've even thought about - I have a friend who's a game designer and I even thought about... man, that would be amazing. That whole steampunk idea is a huge world and you'll see in book two, the world's even bigger than you see in book one because it's a world at war. It's a world half conquered by clockwork powered England and half conquered by magic powered Ireland. So everywhere you go France, and Germany, and Africa, and potentially the United States. Are they even the United States? It's a huge world, so the stories could go anywhere. You know I think of like, Gideon Smith books. 'Gideon Smith and the Mechanical Girl' I think the first is called. They, at some point, they end up in an airship going to the United States, and the Wild West, and Egypt, and all kinds of things. Steampunk is open. Jeff: I hope that just keeps going and expanding. So what's coming up next for you? Are you done with book two or are still writing on the trilogy ,and can you look beyond this first trilogy? What's next? Michael: Well, interestingly enough, it goes back to your last question. Books two and three, the trilogy, has a beginning, middle, and end in my head. Of course there could be more after that, much like 'The Long Season', but in my mind I've already started about halfway through writing a third completely different genre book, challenging myself with something completely different, which is a contemporary YA book built on my travels to Antarctica. So it's a YA, two young people who meet and fall in love on a cruise to Antarctica. Sort of a travelog and what happens, and the interesting things, and people, and penguins that they see. I won't give away too much, meaning - that's what I'm in the middle of now. Jeff: That's exciting. A little something new there. Again, totally disparate, but you mentioned what you want to keep mixing it up. Michael: So yeah. And we'll see how that works out. I'm working with a gender nonconforming character, which is really new for me, it's taken lots of research to get intersectionality in the forefront of the book, you know not as a ploy, but as a reality of the world that we live in, and people that need representation. So I'm really excited about that. Jeff: Hurry up and write that please. Michael: All right. Hopefully, if you're willing, you'll probably see it before anybody else as a proofreader. Jeff: What's the best way for folks to keep up with you online, to keep up is as 'Infernal Instruments' continues and this new contemporary book starts to take shape? Michael: If they go to my full name - MichaelVanceGurley.com. Go on there and there'll be links to my two book sites and to my Instagram, they can go to Captain Rhetoric on Instagram and find me, that's where I write self-involved book reviews where hopefully people care about what I think about these amazing books that I read, and travel pictures, and just little bits like that, not too much of me, just sort of what I see about the world. I like to do that on Instagram and that's the best way to keep up with me. Jeff: Well I wish you the best of success with 'Absolute Heart'. It's been great to talk to you a little bit about it. And when that contemporary is done you'll have to come on back. Book Reviews Here's the text of this week's book reviews: The Masterpiece by Bonnie Dee. Reviewed by Will.The Masterpiece by Bonnie Dee is a makeover story with Pygmalionthemes in a historical setting. Essentially, an irresistible gay version of My Fair Lady. The story centers on a guy named Arthur. He is the well-to-do gentleman in this particular scenario and, one day, he's out enjoying the good life with his bestie, a guy named Granville. Occasionally Arthur calls Granville, “Granny” and it totally cracked me up. Granville believes very heavily in the British class system. Arthur is a little more modern in views. He feels that if a man has the wherewithal and can pull himself up by his bootstraps, he can achieve anything with his life, no matter where he was born on the ladder of social hierarchy. In order to prove their different theories, they set a wager, and that bet involves Joe the shoeshine boy. Arthur must make Joe a gentleman in six weeks. It is there that he will make his debut at the biggest party of the social season. Joe moves in with Arthur who is very glad that to realize that Joe is not only very smart and very kind, he is hardworking and interested in bettering himself. Joe is undertaking this particular makeover because he has dreams of owning his own men's shop one day - with a focus on finely crafted shoes. They get down to work and, after spending several days studying and learning which fork to use, they decide to get some fresh air. So they go for a constitutional in the park where they unfortunately run into Granville, who's like escorting some demure young ladies. Joe does very in his first unexpected like test. Arthur and Joe now realize that they have definite feelings for one another. Their next test comes during an evening at the theater where they unfortunately run into Granville yet again (this dude's everywhere). Granville has befriended a professor of linguistics, and Arthur knows that Granville is only befriending this schlub because he plans on bringing the linguist to the party to expose Joe as some sort of lower-class fraud. Joe handles the situation admirably. He's proving himself time and time again, but Granny is not going to give up. He makes sure that Arthur's family is invited to the big soiree, and his family comes to stay, making it nearly impossible to have any alone time with Joe. Finally, the big evening arrives and everything goes swimmingly. Joe is tested but everyone is really charmed and quite taken by him. When it comes to Pygmalionstories there is usually a point in the narrative where the Eliza Doolittle character has to wonder if the professor is in love with her, or the person that she's pretending to be. We kind of skip over that in this particular story because it's really obvious that Arthur and Joe are like completely into one another. What ends up happening is that Joe feels guilty, his conscious getting the better of him. All these lords and ladies and debutantes are remarkably kind to him, and he feels genuinely bad that he's pulling the wool over their eyes. That guilt eventually leads him to leave Arthur's house sooner, rather than later. Arthur and Joe try to figure out how can they make their relationship work, but they can’t. Even though they've essentially won the bet and they've proven their point, the fact is that the class system is still very much a thing and the two of them are from two different worlds. Joe packs his bags and leaves and Arthur ends up going to India. He has been convinced by his brother and his father that he has to finally grow up and take part in the family business. While he's away, Joe uses the money that he earns from the bet and opens his own shop. When Arthur finally arrives back in England, there's a big declaration of love scene because they realize they are both utterly and completely miserable without one another. And they both vow to find some way that they're going to make it work. I really, really loved this book an awful lot. I loved these two characters that Bonnie Dee created I was rooting for them the entire time. The Nobleman and the Spy by Bonnie Dee & Summer Devon. Reviewed by Jeff & Will.Jeff: Bonnie and Summer are both new to me authors. The Nobleman and the Spy, which I would call a second-chance romantic suspense historical, was a complete delight full of intrigue and some steaming hot sex. Solider-turned-British spy Jonathan Reese is assigned to keep watch over German Karl von Binder. Jonathan knows Karl all too well because during the war Karl spared Jonathan’s life. It doesn’t take much for Jonathan to lose focus on his mission and pay attention to the man who has come back into his life. He’s also aware that he cares too much for Karl to allow anything to happen to him, despite the fact that his orders as the mission begins are a bit mixed if he should allow the man to be killed or not. Karl, despite the forbidden attraction to Jonathan, tries to keep the spy at length, sure that he can protect himself. As evidence piles up though that there’s someone on Karl’s trail, the two end up working together trying to figure out who’s behind it. It’s a tangled web that I didn’t quite believe even as it was all falling into place. The resolution was certainly something I’d never anticipated as I tried to solve it as I read along. It was quite a thrill. I loved the feel of this book. In often reminded me of a childhood favorite TV show, Wild Wild West, which was set in the same time period of the mid 1860s. While this isn’t set in the American west with some strange characters as villains, the time period comes through loud and clear in a rich setting and how the characters carry themselves. I also liked how Karl and Jonathan recognized that they couldn't give in to their attraction but the more they couldn't give into it the more they really want to. And then when they got together it was so intense. Narrator Todd Scott I have to say does a terrific job with the entire story but the sex scenes…off the charts! Will: What really struck me and what I enjoyed the most is that it's essentially a bodyguard trope and it has all the different things that go along with that but in a historical setting. So it was sexy and it was fun and there's lots of adventure and action. I really enjoyed this one as well. Jeff: Calling out the bodyguard trope is really appropriate. But what makes it a little different, at least to me, is that Karl doesn't really want to be guarded. But Jonathan certainly takes that role because he keeps reinserting himself even where he's taken off the case. He wants to keep Karl safe at all costs. So, yes, we both highly recommend The Nobleman and the Spy by Bonnie Dee and Summer Devon.

Are you sure your kitchen table or big-screen TV will fit? If you’re interested in renting or buying a specific property, there’s a few steps to take before actually visiting it. Watch a virtual tour video and get pre-qualified. Today, I am talking with Michael Sanz of Neesh Property, which started in 2009 and has more than 650 doors. We discuss the benefits of automating property showings, including the opportunity to spend more time with people and to travel. Who wouldn’t want to operate a property management business from beaches around the world? You’ll Learn... [02:25] Purpose of Neesh Property: Holistic real estate that helps people buy, sell, rent, and arrange financing. [03:20] Same Startup Suffering: Michael struggled to start a business, grow new doors, and retain customers. [03:37] Identify and Prevent Problems: Michael controls and protects his business and simplifies his life through systemization and automation. [05:45] Workforce Reduction: Michael went from 18 to 1½ staff members and replaced them with property management software to save money. [07:58] Eliminate Office Space: Doesn’t affect how you do business. [09:43] Competitive Advantage: Neesh Property closes deals and acquires new business by leasing properties quickly. [10:30] Retain Relationships: Be client-focused, not location-focused when managing properties. [12:40] Learn from Mistakes: Try and implement new things, which may or may not work completely; pivot when necessary. [14:29] What’s the problem? Any problem, big or small, should be documented and automated to disappear. [16:10] Build Knowledge Base: Take time to make “how-to, what to do...” videos, recordings, and other visuals to help people understand processes/procedures. [21:05] Leverage People as Process: Create core team of people who are thinkers and decision-makers. [27:38] Virtual Tour Stats: Neesh Property gets over 85% of its real estate booked based on the virtual platform and averages 1.8 showings per property. [31:05] Good Tenants Gone Bad: Rather than giving best to the bad, give it to the best of everyone; mesh type of tenant to property. [50:55] Common Beginner Pitfall: You don’t need to be cheaper than everybody else to get started and compete; change your value proposition. Tweetables Save Money: Replace staff members with property management software. Be client-focused, not location-focused. Meaningful Connections/Conversations: The rest just falls into place; it’s all systems. Automation offers the opportunity to simplify your life and spend more time with people. Resources Neesh Property Michael Sanz on Facebook Ricoh 360 Camera Matterport: 3D Camera and Virtual Tour Platform Vieweet Skype Zoom Housecraft GatherKudos Oculus Rift DoorGrowClub Facebook Group 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 perception, expand the market, and help the best property management entrepreneurs win. I’m your host, property management growth expert, Jason Hull, the founder and CEO of DoorGrow. Now, let’s get into the show. I am welcoming all the way from across the pond or even further maybe, Michael Sanz of Neesh Property Management. Michael, welcome to the show. Michael: Thank you very much for having me. Jason: I’m excited to have you. You’re a really cool guy. I got to connect with you in the past in person, which was great to meet you in person, and you’ve done some really cool things. But before we get into some of that, and today’s topic for those listening, is automating property showings. We’re going to be talking about that. But before we get into that, why don’t you give people a little bit of background on you and let everyone know why I think you’re so awesome. Michael: Thanks for the introduction and thanks for having me at the conference in Missouri last year. It was amazing. Perfect. As Jason said, I’m Michael Sanz. I am from Australia, from Melbourne, and I have a company called Neesh Property Residential that has been going since 2009, has over 650 doors. I started how everybody else started out in real estate and started from zero, or how much people started, started from zero doors. I had a new relationship started at the time. Add the pressure and the stress of a new relationship coming into a new business, setting all that up. I started from the study nook in an apartment that I had. I had left a previous business. It was quite a successful business. Left the partnership at the time and I started Neesh Property. What was Neesh Property to me? It was a holistic real estate that help people buy property, sell property, rent property, and arrange the finance. It’s holistic all under one roof. I had suffered the same problems everybody else has suffered from starting a business, trying to grow new doors, I guess retain business when people sell their properties or go to other agencies. I spent a lot of time methodically going through all the pros and cons of a property management business and I really started to systemize it, automate it, and not let the business control me from an early point, but how I could control my real estate business and what protections I could put in place to make sure that I could do some hyper growth, retain the customers that I had, and simplify life. A lot of people that know me would have say that I will operate Neesh Property from many beaches around the world. I would close down the company every Christmas time for two months. In real estate, people say, “That’s unheard of. What about maintenance? What about all the problems?” But I identified all these problems and I’ve been out of able to do a lot of travel, and I’ve spend a lot of family time while automating the business. Jason, as you’re talking about today, automating how I show properties and really break down that process meant that I could be in Missouri and show people property before I went on stage, after I went on stage, and successfully lease property without really having to do anything at all. Jason: This is wild. I think everybody listening goes, “Michael’s some sort of crazy, weird robot. This is some magical impossible thing. Nobody else can do this.” You’re maybe some sort of savant or guru. But you started your business and from the beginning had this intention of systemizing things and keeping things off your plate to keep that space, and some people, their intentions and focus is very different. They build a business that’s very difficult to manage and to run. Paint a picture. You’ve got 650 doors right now, I think you’ve said, right? Michael: I just sold a bulk of that and I’ve got Neesh Property. I’ve automated even more with a new portfolio, but that’s for a whole other conversation. Jason: Help people understand your business logistically. How many team members do you have? I think this is where it really showcases how different your business is than most companies that are at a similar size. Michael: Sure. At a point with the business, we had about 18 staff members. We had acquired another smaller business, and we acquired their team, and we had an office. A lot of which goes against the grain having office to me. But when I acquired another business, I took the office and it had a receptionist, it had a business development person, it had an account, they had all these people there. I couldn’t see, with total respect to their role, I couldn’t see the purpose of it, so I knocked them down from 18 down to 1½ staff members. One full-time property manager and one part-time who did routines and edit some showings as required. Jason: Wait. So, you went from 18, bring on another company, and then you whittled that down to 1½ team members. Michael: Yeah, correct. I couldn’t see the massive need to have all these people doing accounts when a lot of the property management software already did all the reconciliation. I was just having a bum on a seat to press a button to reconcile. I couldn’t see the purpose of having a receptionist when there are people there who could answer the phone, so we put in a good IVR, a good voicemail system, and we educated. We identified that a lot of the calls that were coming in were from tenants either trying to report maintenance or [...] it was. Then we put in automated responses there, too, and if there’s any business call, “Press one if you’re a landlord, press two if it’s new business,” and then it would come through to my cell where I could answer and respond to it quite fast. Identifying the flow of calls, the type of calls that are coming through the office meant I no longer had to have a receptionist there. In Australia, the wages are quite high. We’d be paying someone $50,000–$60,000 to sit at a front desk, to greet people if they came in. We have also identified that as property change, people will less and less likely to come to an office. Tenants wouldn’t necessarily walk into the office and let’s say they did walk into the office, we would be there to greet them but no one was really walking in. Owners rarely walk into an office anymore because they could call you, they could video call you. We ended up getting rid of the office. We have spent from a big 250 square meter office place to a two-bedroom apartment, and guess what? It didn’t affect how we did business, didn’t affect us picking up new business, didn’t affect us losing any business, and the world still spins. It’s not chaos. For us identifying all these headaches we’re able to see what mattered. If the team couldn’t adapt to technology changes, video, virtual reality, automated IVR systems, and things like that, then there wasn’t really a place in the business for them, respectfully. I actually have one property manager leave to go with a company where they still did paper condition reports because that’s how she wanted to do them. Jason: Right. You’re welcome to it. That’s so funny. Okay, so this will make a lot of sense and I think you and I have both significant, nerdy, technological side to us. This stuff sounds obvious to me and maybe obvious to you, some people listening maybe not so obvious. If they have all these questions, “How would I do this? I would I do that?” It’s scary. But if you make that your intention and your goal, you’ll figure it out just like you figured out whatever you’re doing now. One of your big competitive advantages now in closing deals and in acquiring new business is your ability to lease properties so rapidly. Paint this picture of how rapidly and how different your leasing process is, just to prime the pump here. Michael: To put it into another perspective—I know we touched on it previously—we were full suburbs. We manage properties in over 84 suburbs and we also have properties in two other states, which was Sydney and New South Wales in WA. WA is a four-hour plane ride and Sydney is 1½-hour plane ride from us. Now, we weren’t insane, crazy totally. We only manage properties of the clients that we actually had on our book and we did that so that we could retain the relationship with them and we would appoint other local agents to help with open inspections or routine inspections, or things like that. And because I’m a frequent traveler, when I was in the area, I would pop in, say good day to the tenants, and just touch face that way, so the owners knew that they are getting full kind of service. In Victoria, it is very much managed by our office and again, we are client-focused and not location-focused, which was one of our main selling points and is quite attractive to landlords that we had. Because we also offered mortgage brokering, we really didn’t do too many sales, we were mainly property management and then we offered mortgage brokering we saw the value in that. If it was [...] other agents that could help us do the menial tasks. It wasn’t a headache for us, we didn’t stress about it, but we covered a lot of space. You can imagine when properties come up for rent. It’s cyclical because people [...] properties around at Christmas time, they go home to their families and their friends. We would have sometimes 10%–15% of the book would start to come up for rent and you can imagine the franticness of trying to get out all the inspections, deal with tenants, vacates, and all those headaches that came with it. Now, it’s probably 11 where I started [...] this. This wouldn’t be a problem with the spread of properties. As I sat down, I started writing down all the problems that I could have. Petrol, time on the road, who am I going to have, how many staff members I need to to do this if I’m going to have potential growth? How do I automate this? That was the biggest thing. How do I automate this? What if it’s Christmas time and I want to go away on holiday? What am I going to do? The selfishness in me also came out because I still wanted to live and being an owner-operator. What would you do? I identified with myself that if I made mistakes, that was okay because being a business owner, if we don’t try and implement the things we’re looking, that ain’t worth. But it doesn’t mean that it’s not going to work in its entirety. It might mean that you just need to pivot a little bit and change what you’ve been doing to give another go. I had to automate the whole thing and I started the journey. Jason: I’m hearing a process here and I think you’ve mentioned this twice now. For those listening, you may have caught on this but it sounds like you have this mental process that you go through probably constantly where you list out potential problems, and then you sit down and figure out what are the solutions, and then you have this intention throughout that whole process of, “How can I have vacations? How can I make sure that I don’t have to always be doing it?” Which is a very different mindset than most ppl have. They’re just figuring out, “How to do I keep the business running? How do I make sure that we don’t drop the ball?” And you’re like, “No. How can I,” as you put it, “take Christmas and not have to work? How can I go on holiday and not have to do this, and it would still work?” That’s a different problem to solve. As entrepreneurs, we’re great at solving problems. But if we don’t give ourselves the right problem to work on, our subconscious isn’t going to work on it, our brains are not going to work on it, we’re not going to find those solutions. We stop prematurely at something superficial and that’s a whole level of depth to go beyond just making sure things work, it’s making sure things work without you. Maybe just describe that. What do you actually do? Do you just pull out a piece of paper and you write all the problems? Michael: A big point when I had staff in the office is that if anyone reported any type of problem, big or small, it had to be written down. If an owner said, for example, “I can’t reach you on your mobile phone.” Or, “I don’t understand the statement,” just general questions. If someone doesn’t understand the statement, what we did was we recorded what the landlord income statement meant. “This is your name, this is the date and everything.” We do a video. We do a screenshare/screengrab video and in that was a link. If anyone asks anything about statement, it was there for them. It was in one of our FAQs. People could see it. All of a sudden, we didn’t get all these calls. We worked out any problem in the business. Someone turned out in our office at 7:00 in the morning and said, “Why aren’t you open?” We address those things, we have better signage on the front door, and then all of a sudden, all these problems that a business would have were just disappearing and it was automated. By using video, by using written text, by having window displays, just simple things, the business became automated. So much so that religiously we close before Christmas and we open up towards the end of January, so that everyone gets time off to spend time with their family. Jason: And everyone being your 1½ team members. Michael: When I had a lot of team members, they were loving it big time. If people want to go on holiday, they can go on holiday because the business can run. Jason: All right, so this is really cool. Basically, what you’re talking about is you built a knowledge base of frequently asked questions and leveraged video screen shares, recordings, showing them how to do things so they visually could see, hear, and understand what needed to happen. As they would go through these and have these questions, or you send them a link to this frequently asked questions or in your knowledge base, or you send them this video, they would watch this video. The magic of video is they would feel like you’re right there, walking them through it, tell them, they’d hear you, see you, they feel like you’re taking care of them, and you’re not even there. You did it one time and now, it can be used for 650 different people or however many clients ;that you have. They can go through it multiple times instead of just once because they may not remember. But they’ll remember, “Oh, there’s this thing I can go to to get it.” Michael: Correct. A lot of the agents who I would speak to is on video. I don’t have to speak to video where it takes time, I don’t have enough time. A lot of the videos early on that I did [...] showing or like a routine inspection or open for inspection. I would just have the camera on a tripod and while I was waiting for people to come, I would do a video. “I’m at this property here. Look at this one,” or, “This is a leaking tap. This is how we address it. This is what we do.” Just small videos and I just built up content. I had the tenants any problems, what to do if it’s raining. What to do if your hot water service breaks. What to do if your dog runs out to your next door neighbor. Just simple things I turned into a video so I didn’t have to answer again and again. Again, this is like I’ve touched on before when people could call up and they address the problem or an issue or concern, we try to turn that into a video so that it was answered once, solved 100 times. Jason: The trick is that if you’re going to have to answer ever, once, take note of it, then put it on your to-do list to make a video so you don’t ever have to answer that again. Michael: Yeah. I think as business owners we need to give ourselves the emotional permission today to take the time, even if takes us half an hour to do it, so we bank up future time. That task is going to take us a 30-minute phone call or whatever it is, we spend 30 minutes recording it now, and you’re going to have that conversation a hundred times, you just saved yourself 50 future hours and you could be doing other things. Jason: Absolutely. We have done the same thing with clients who go through our program. I used to coach them all directly, but shifting it into video content allowed me to make sure that I said the same thing and got the best information to each client, and it allowed them to watch it more than once. My memory is not so amazing that I could remember every single thing I’ve said to every single clients about every single topic and not miss something. But I could put it into content. If I get a bunch of questions, I can add more content. I think some people would say, “Jason,” or, “Michael, you guys are really lazy.” I think there’s brilliance in that. I wouldn’t call it laziness; I would call it, we don’t like doing stupid stuff over and over. I mean, really simply, and that’s really frustrating to have to do redundant work. But some people, they love that. They would just do the same thing everyday. They love doing that. That’s not me. I would guess that that’s not really you, either. You like being able to have freedom and not have to answer the same questions over and over and over again. Michael: That’s the definition of insanity, isn’t it? Doing the same thing over and over again, getting the same result. I can’t understand doing the same thing over and over. I guess as business owners, we also get caught up in the really small things, and those small things we think become really important but they’re not. I’ve got some VAs that do the really menial, small tasks that I don’t even have to think about. Things that our software doesn’t do that a VA would do. Get out of that mindset that you have to do these really small things because it’s not important and when we identified that owners and tenants just want to get that problem resolved. If it needs to get escalated, then yeah of course, take it on. But the small things, they don’t really care who answers, it’s fine. As long as it’s clear, their problem is solved, they can walk away happy, then they’re good. Don’t stress. Jason: So, part of this automation, you’re leveraging technology, you’re leveraging video, you’re leveraging a database or knowledge base of frequently asked questions but also, you are leveraging people as process. You’re bringing people almost in a position of almost operating software in some instances. And then you have a core team of people that actually are thinkers and decision-makers that’s really small based on what you said. Let’s get into then the topic at hand, which is automating property showing. How can those listening start to move towards automating property showings and what are the benefits you’ve seen by doing that? Let’s get them excited about the why they should do this first. Michael: As a business owner, having staff members and having multiple properties that would come out open for inspection and also understanding that tenants are really demanding, they want to see the property, they would call you up and say, “Is it open now? Is somebody there now? Can I go now?” And then having a staff member get in the car, drive half an hour listening to music, speaking to their family and friends, doing whatever they want to do in the car, get to the property, wait for the tenant to turn up, show them the property, have them say, “Oh, yeah. It’s nice. The walls really look like they did in the photos.” Whatever it is, or they love it and again they’ll buy for it. “Can you wait for my friend to turn up? My partner’s on their way.” All these headaches. They do the inspection and then they spend another half an hour driving back or getting lunch on the way, or however long it is. One time, okay, but if you replicate that, you’ve got 8, or 10, or 15 properties for rent at that time, that’s a headache for any company because of all these inefficiencies on the road. I identified, “Okay. Well, what do we do?” My wife was working for a ticketing and event company based in San Diego. She was running it from Australia, it’s the operations. We’re in San Diego one time, I had this massive 3D 360 camera. I was going through all the theaters and from every seat there would be a 360 [...] so that people, when they go to buy a ticket, they could see their exact view of how they’re going to see the stage. I was like, “Hang on. Why can’t I do this in real estate? What’s stopping me from doing [...]? This is so simple.” The camera was huge. It was massive at the time. Even three months later, I couldn’t find an actual camera to do it. What I was doing was going to the room and taking 100 shots everywhere and then stitching it together. For one image it was taking way too long. At Christmas time, I was in London, closed the business down, before virtual reality [...]. It can be done. I was walking up the high street in London and I just thought, “I need to find something simple, cheap, to get the job done, and save me more time.” I just went on the phone, I looked at my phone, and I found a local supplier that had the Ricoh 360 camera. It has just been released. I went out and picked it up, and from that point in time, everything I did for real estate, for property had a 360 video. And went then into step two, and I made sure that all the rental properties had a normal video, just with a smartphone or SLR. From that moment on, when I brought the 360 camera, I really hit all our properties hard. Before I go with 360 virtual reality and video, a lot of people that I speak to, they go out and buy the camera, they’ll do one tour which generally happens after the tenant has vacated and they’ve already had marketing for 4–6 weeks, they’ll do the tour and they’ll say, “You know what? Michael, I tried that. It’s not for me. Didn’t help me get a tenant. It was no good.” That’s the biggest feedback I had. That’s cool. That’s fine. But for me, I want to persevere. I made sure that every single property we came up for rent, had a 360 virtual tour. Also in the start, it didn’t help with every single property because I had marketed without photos for four weeks prior, and I was able to find tenants thereabouts, most often than not. With the 360 virtual tours, it was the next time that it came up for rent. A tenant would give me notice to vacate. The day they gave me notice to vacate, the virtual tour went up on all the real estate platforms that are out there. We have the video and we have our photos which are okay. They’re good, they’re okay. But from day one, people could start to see the property without me having to worry about booking an open for inspection and the condition of the property is all boxed up, or the whole family’s home or whatever excuse the tenant was, people could start to see the property. That started to change things. Just to reiterate, if you’re starting off, you have a property that’s coming up for rent, the tenant’s moving out, you can do the 360 tour afterwards. You may not get the hyper result that you’re expecting. Don’t stress. Replicate it on every single property you’ve got and you will start to see massive change from the next time it’s for rent and every time after that. Don’t stress. Give it time. People fail because they give up straight away. Jason: And then each new door that you’re getting on, you’re going to do the virtual tour at the beginning so you’ll have that moving forward. Michael: Correct. I got to the point where if a tenant gave notice to vacate, I went in there, and I do the 360 tour with all the furniture in there as it was. I didn’t put that on publicly but I was able to show people with the tenant’s permission, just give them a link, and remove the link after they see it afterwards. I wouldn’t get it publicly on the real estate platforms but I would have the tour and I would give it to people. That changed everything, too. Tenants were okay with that because you can edit the 360 images to blur out photos in the wall and things like that. That was pretty good. I also just did on the iPhone walk-through videos that I could also comment on. I would take just photos, too. We had over 85% of our real estate booked on virtual platform. Can you imagine, Jason, having 85% of your business, that people can view the property without you having to worry about putting a lot box on, be physically attending the property, and having the issue of staff or even yourself going to have to show that property multiple times? To touch on that, we were averaging at 1.8 showings per property and I’ve got to cancel one showing per property on average. Jason: No kidding. Michael: Huge time savings. If you were to quantify that and you’re breaking out 15 properties a month, let’s say, that’s like $150,000 saving in a year, of time and profit based on our letting fees. Our letting fees are small than American letting fees. It’d be significantly higher in America but for us, it’s about $150,000 just the base saving in 15 properties a month. Jason: Oh, yeah. So, the cost savings compared to the cost of getting the digital cameras and maybe the little bit of work and labor that would take to get these virtual tours done and everything, it was an obvious no brainer, financially. Michael: Obviously, yeah. For me at the start, I would have spent a couple of thousand dollars, maybe more, trying to really solve it. I have a lot of cameras now, a lot of VR, a lot of 360 cameras, and I’m still using the same one that I bought years ago which was the Ricoh. But I’m trying to find the next camera that gives me more depth immersion like the Matterport but something that fits in my pocket. So, for me to do it, if it does not fit in my pocket, I’m not going to take it with me. The Ricoh fits in the pocket. I think it’s $170 or something like that on Amazon. A tripod is $30 or $40 on Amazon. To host 22 platforms of the year is $20. The platform that I use is Vieweet It’s one of the cheapest one out there. It’s robust, it’s simple, it’s no frills. If you’re an agency, you’re just starting out, and you’re looking for cheap ways to do 360 automated showings, $130 for the camera, $30 for the tripod, $20 a year to list 20 showings that you can put up and take down. A lot of people don’t have more than 20 properties available all at once. Jason: It's called Vieweet? Michael: Yes. If you're in $200-$250 US, you can be up and running today to do these things. But just remember, you may not get that sprinkled dust straight away. It’s something where you build that new catalog that does work. Results have been quite fast because I kept at it and you will, I can’t say, you'll get the same if not similar results that I was getting because what it all sold for us—that’s just kind of the odd part of things, Jason. Our property to more people around the world in different that [...] the property. Rather than having to rely on people to come into a lock box or view the property physically, they may not have been the best quality tenant. Rather than giving the best to the bad bunch, we’re able to give it to the best of everyone. Anyone who wants to see it within the markets to high-end income, at least they could go to relocation consultants that were actually being paid by people to come into the country to show them properties. We were showing it to the people before they go to relocation agencies in the end. If they will apply, they would inquire, “Hi, Michael. I'm actually relocating from America or Europe. I'll be there next month, try to arrange a viewing.” I’ll send in the link. They view the property. They don’t need to worry about looking at 10 properties when they get here. We can do the process, we can get them out of Skype or Zoom. At the end of the day, good tenants can go bad. Make sure you get landlord insurance if you can get that. We were so efficient with what we did and that’s probably for another conversation, but we got rent arrears to 0%. Not only will we have to get the best tenants in the marketplace, we get the best tenants that could afford to pay rent and not have any arrears and it solved a massive problem for us too. We are probably at about I think 3½ of rent arrears sometimes because people, they’re just lazy. By changing the type of tenants that we had, also made all the knock on effects that we had so that our arrears is 0% vacancy because we’re able to work credibly with our leases to make sure that longer leases we had better type of tenants. We’re also able to mesh the type of tenants to the property. For example, if we have an application that was someone 50 years plus as opposed to 18-25 year olds. An 18-25 year old would be more transient and they wouldn’t stay on the property for a long period of time, maybe 12 months. But someone who’s older is typically settling down, they don’t want to be moving around everywhere. We have a bit of a tenant selection too. Jason: I realized it might be a little different in Australia than here though. Michael: Well, what we did inside the office, we can verbalize it to the people that apply. Jason: Got it. Michael: No one from Australia is watching this, yeah? No tenants that I had. Jason: Right. This all makes a lot of sense. You have 0% vacancy rate. You’re renting out some of these places before they're even vacant because you're marketing them from the second there's a notice. You're getting people out of state or out of country that are able to look at it. I think it’s brilliant that you've got partnerships you've created in alignment with relocation agencies and relocation agents. I think that's sharp. All of this sounds really fascinating and this is something that anybody can do. Michael: Anyone can do it. Even like staff members. You’ve got people who work for bosses, there's no reason why [...] to help automate your showing. If a virtual tour or a video, or someone contact you at 10:00 o’clock at night and you're this type of person that picks up the phone at 10:00 o’clock and tries to make a time, you can send them link that’ll pre-qualify them. The good thing about UVR, it shows you the room, the whole room. They can be looking at the whole kitchen. They can be looking at the whole bathroom for so many times you go online and you just see a corner of the bathroom which shows the tiles, the toilet, the shower, and the bath. It eradicates all of that, it’s gone. I think I showed you too, when we got to the actual property, the other headache was, I'm not sure if my table would fit, or the fridge might fit in the cavity so then we included an incorporated AR, so the augmented reality which was just another boat. With the AR, you can record the screen, so you can be at the property while it’s taken and actually do a video recording of, “This is where your catch goes. This is where the fridge goes, and the TV goes,” and put the furniture down. Then you can send that video to people too when they inquire about, “Will it fit a king sofa bed, or what size is the fridge cavity?” Because people are visual, mostly. Jason: How are you doing that? How are you putting in beds, virtual beds and things like this into a video? Michael: The app that I use is a free app. I love this stuff. It isn’t going to cost anyone here. Housecraft. Now that’s free augmented reality application. Jason: Housecraft, it sounds like witchcraft, it’s like magic. Housecraft, okay. Michael: It is magic. Again, I have all these tools because they're objection handlers. I don't need to over complicate things because then it just starts making problems. These are free things that anyone can be using. Anyone can do anything that I've been doing. None of it is hard. It’s just I have a better use of my time. Jason: Yeah. You’re using Housecraft, you're using Vieweet, you’ve got your Ricoh camera, are there any other technological tools that help you automate the showing thing? Michael: Basically, how it would work for us was a tenant will give notice to vacate or we would have a brand new property come on. We would have the tour or take the tour. We would put that as a link on a description. A lot of the feedback I had from people around the world was, our property software, our showing software doesn't allow us to put a hyperlink in there. We just put it in the ads, we put it in the ad there too. We had every second photo for us was, “Did you know this property is in virtual reality? Make sure you click on the link in the description.” When people are looking on their smart device, because most people are probably looking ad property searches from their mobiles, it’s important that we could grab their attention with a nice bit of photo, grab their attention saying, “Hey, we've got a virtual tour, or a video, make sure you look at it and prequalify.” Rather than coming to the property and saying it’s for them. If someone did call and inquire the questions was, “Great. Have you seen the virtual tour?” If it was no, it’s like, “Okay, here’s the virtual tour,” and they all had to see it. We would not go to a property unless the person had seen the virtual tour. Jason: Right. Virtual tour first and then if you've watched that and it's still a go, then we will show you the property. Michael: Correct. When we did that, when we went to the property, we knew that it was really just a case of them checking if there's a smell, just their general feel, their juju. It was basically they’re going to apply for the property. Typically, if I went to the property, there's a 93% chance they got the property, and it was 96% that they would apply or they’d rent the property. Jason: Because the virtual tours have filtered out so much. Michael: Prequalified. Jason: Now, in the photos where you doing stuff like box brownie and like this kind of stuff or are we just getting photos? Michael: We change it to make sure that the header photo, the main photo in this sort of style—we’d have a blue sky, green grass—it was just a nice attractive image so that people would click on that, like a clickbait basically. It'll look nice, they click on it, and then the next image was the virtual tour. They knew that there was a virtual tour there and then there are the other photos. They were the only photos that were relevant like the way you actually see the room. If you couldn’t see the room or it was cut off, we wouldn’t show it, because the virtual tour was going to show the property in its entirety. This just meant that I would not put 20 photos up of a half-baked house when I can put three photos up, a virtual tour video, and a walkthrough video—far greater impact. That’s why we’re leasing properties four times faster than our competitors, and we were getting more than double the amount of views on all our properties according to realestate.com.au which is a massive property platform in Australia. What we were doing was, no major cost difference to competitors, but we were getting twice the people looking at our property, and four times faster with being leased. Jason: Michael, this sounds really incredible. Having all these stuff in place, it sounds really low cost, and it sounds like it actually saves you a ton of time, and a ton of money to get these things implemented. Now, what I love to do is connect this to how is this helping you grow your business. Obviously, it’s reducing cost, it's reducing staff, but this sounds like a huge competitive advantage selling point when you're pitching to new owners to say, “We have zero vacancy rate. We’re managing hundreds of properties…” which is unheard of in our industry, “…and we can we can get this thing taken care of and lease it out really rapidly. I've got the cameras on me, I'm ready to go. Let’s do this.” Michael: Correct. There’s a lot of white noise and noise generally in property management. When you're going to a listing presentation, it runs based on the same topics. “We collect rent. We have low vacancy. We are fantastic. We have good systems.” You can basically walk into a presentation and know verbatim what people are going to saying. If somebody inquired about renting out a property, they will get an email from me with our reviews, true statements, and things that we do differently. When I would go to the appraisal, I wouldn't actually bring anything other than a set of virtual reality goggles. For me, I didn’t go in with a booklet. Everyone kind of expects you to walk in with a booklet and pamphlet like all your competitors do. But me, it’s straight away, “Let's work on that trust that rapport with the owner.” I would walk into the presentation, I put the virtual goggles down the table which is a gimmick, they're a gimmick, and then I put them on the table and then I say, “Mr. and Mrs. Landlord, so tell me, what do you love about your property? What are the tenants going to love about the property? What would you do differently to the property that tenants might also think that they wouldn’t want changed?” I get them speaking about it. None of it is about my fees, none of it is about my service, none of it is about anything else about me, it’s just about them. Then it gets to the point where, “I can totally see why people fall in love in this property and it's so important that we show people what this property actually offers. Here are a couple of ways that we can do that.” Bear in mind, by the time they've already got to ask and called us, they've gone and seen our Google reviews. They've seen our social profile. They’ve already assessed us when they make the phone call. Jason: Sure. Michael: It’s so important that you’ve got some social proof and some history there. If you're just starting out as an agent, get reviews, get some social proof because you really are fantastic. As people, we’re fantastic, and there's so many great attributes. If you're starting fresh, you don't have to look fresh. Jason, you're helping build websites. You can make someone who's just starting out look as a major player in the marketplace. Jason: Absolutely. I tell potential clients, there's no reason why a company with zero doors or even five doors has to look any different than a company with a 1000 doors. They can have just as good a branding, just as good of a website, and we can help them with the reputation stuff. We have our service gatherkudos.com for those listening that you can check out, which helps you facilitate or lubricate I guess if you will, that process of getting more reviews from clients. Michael: There's no reason why you can’t. “I don’t have clients to get reviews.” “I'm sure you've done business with people before and they can leave you reviews.” That’s all you need, just that momentum. From the time that we’re meeting with them, they know a little bit about us. I'm not concerned about any other services because they all know that we collect rent, and we find tenants, and we manage maintenance, and we do all that stuff. It's going to the owners that we will love their property, and really focus on the things that they love also, and identify the weaknesses of the property too because it’s important for us at the start the owners to acknowledge their property may have some shortcomings. They wouldn’t have to have that awkward conversation later. The prospective tenants said that, “I like the pink wall in the kitchen.” We get the owners to draw out what they think is needed in the start, and then it sets the time. Then I bring out the virtual goggles, and I say, “This is one way that people are really going to immerse themselves in your property from their own lounge room. We also had virtual goggles and Oculus Rift in our office, so when people came in and they want to get a rental list, we stop giving out paper and we would say, “What are you after? A three-bedroom, two-bedroom?” And give them the goggles, and show them a property. We have far greater success than coming in, picking up some paper in the office, leaving, throwing it in the bin later on for one property they might be interested in. We cut down on paper too, Jason. That was a pretty good experience. We went paperless. For new owners, they could say that we were focused on serving the customer, rather than they burdened with admin and just a slow death in a real estate office. We could show them some of the other tours we've done. We were doing drone work too Jason, where we would showcase the aerial view of the property in proximity to shops because that was another question that people would say, “Probably looks great, but what's it near?” In Australia, with Google maps, sometimes, they hadn't caught up, so the area would look like just massive farmland, but actually, they’ve built up a state with shopping malls, and freeways going through it. We take aerial shot, and show it from what it was near. With owners, I think, I was at 140 doors and 141 appraisals. Jason: You show up for these initial contacts at the property, or these appraisals, or whatever you're doing, and you would pull out virtual reality goggles, and set your camera there, and start describing what you do. Michael: Correct. Now, fast forward a few more years, we didn’t have to go to the property anymore, because I had the virtual tours online, and people can see them, and it would tie on my websites, so people could see that too, and they got to the point where people would make an inquiry, and I will send them a video message. They're already seeing all the proof statements, and a video message to start the initial conversation. I didn't have to meet all these owners, I try to meet all the owners. Sometimes I make time for if they're interstate, they were overseas, whatever the reason. I found other ways to get inside the living room without being in their living room. You have the virtual tours, and then you get the video text messages, and a lot of people will say, “I’m too scared to do a video text message. What if I say the wrong thing?” I say, “It's easy, don’t send it. Just do it again.” Jason: Right, re-record it. Michael: If you're doing a video, you can edit it. If it’s not live, edit. If it’s live, I’d say laugh. So what? Make a mistake, we’re human. I will make the same mistake speaking with you, as I would do on a video. Recapping on it, our process was, every property had to have a virtual tour. When I had the staff, they weren't happy going out and taking a virtual tour, because it would take them between 15 minutes to 30 minutes, maybe depending on how many rooms there were. It's a very fast process to take photos and then you just copy them on to the Vieweet platform, and you put the hyperlinks, the hotspots, and the tour is done. The tour might take you 45 minutes to do. For me, that's no problem at all, if it’s a big one. If it’s small one bedroom place, might take you five minutes to stitch it together. It just depends. The more you do it, the faster you become. Every property had the virtual tour, had the video, had some updated photos. It just meant that as a tenant, trying to select for the property, all the problems were answered. As an owner, we're now looking at other agents online who’s going to rent out their property, they can take the methodical process of photo, virtual tour, application form. That’s very simple process. We then are going to back it up with proof statements, like the rent is zero vacancy. All those other things that were important, because if you guys are doing an appraisal and start just reeling off everything you do, you're the same as everyone else, but if you can show proof statements, then it's 97% there. Jason: Love it. You can easily send a video introducing yourself, and you can send them link to a page of video testimonials from clients. If you can give them all the social proof, and you say, “Look at how we market the properties.” Send them the link to your rental listings. “Here's an example. Here's a property similar to yours maybe.” Suddenly, they can imagine all of it, they can see it, and it becomes real to them. This becomes this huge competitive advantage in this huge differentiator between you, and other property management companies, and then it's allowing you to close more deals. I would imagine it facilitates word-of-mouth, because people are going to talk about you because they're probably impressed. I would be impressive if somebody showed up with goggles, and camera, and show me tours, and sent me a video text message. I'd be like, “These guys are on top of things, and they're tech savvy, and they're going to take care of me out of the gate.” Michael: I guess one of the great things is, I won't mention the exact pricing, but we were full fee. We weren’t competing with, “But that agent is offering a cheaper fee,” anymore. We’re full fee, we’re doing full leasing fee for management estate. In Australia, we can't charge as many fees as you can in America. I wish we could, but we were full fees. I was maximizing every potential fee that I could, so routine inspection fees, higher statement fees. We were full fees, we don’t have to compete with someone. I remember when I started, Jason, and I’m trying to get traction, I sent out a thousand flyers to people and offered a low management fee to people for three months. I got one person out of the thousand that I sent out, that was great, because there were multiple referring client. But starting out, thinking that I have to charge something low, so that I can get in front of more people was one of the biggest crazy thoughts that I had at the very start. Jason: It's one of the most common beginner pitfalls is, “I need to be cheaper than everybody else to get started and to compete.” Michael: Yeah. If I just realized back over 10 years ago that my value proposition had to change. Jason: Yeah. Michael: “Not with my fees but with my value proposition. How do I not complicate it? Now, I no longer have any other office. I work from a home office. I've restructured because I don’t want to have physical staff. I've got VAs that do all the menial tasks. All the properties that we have are on the virtual platform. I've got no properties arranged at the moment. No rent arrears. Last year, I was abroad seven months of the year. I was in Turkey for two months, Indonesia for two months, in and out of America, or like interstate. I traveled a lot. This year, maybe four months of the year. If I get a new business, I will have someone go and do the virtual tool for me. I’ll train a simple person who doesn't want to do anything else if I'm not around. I enjoy going to the properties and checking them out. I'm a bit of a property nerd, I like checking them out, seeing how we can add value and connecting. The most important thing for me as an agency was to make sure that we have meaningful conversations, getting rid of all the clutter and all the noise. Instead, we will focus on the good happy goals, the meaningful connections, making sure that we can add value to our customers and our clients. That was our end result, to have that meaningful connection. The rest just all falls into place, it’s all systems. Jason: You didn't go into it thinking, “I just want to automate everything to the nines.” Your core end goal was, “We want to have meaningful connections,” and then, “I want to have freedom as I'm doing this,” to just focus on that. Michael: Yeah. Automating it just allows the opportunity to spend more time with people. Jason: I love it. Michael: It wasn't to make it so easy that I could travel a lot. It just meant that I need to get better connections. I pick up properties from going overseas. So many Americans travel. I've been in Europe and picked up a new management system [...] abroad. It gives me that flexibility. Also, you get to actually get new systems. People do things differently, so go out and see how other people are doing things to make their businesses better and how can you implement it in your business. It’s so important. Jason: Yeah. I think I heard a quote the other day that was, “Travel is the language of peace.” The amount of tolerance, and learning, and growth that happens just from being in different environments and different cultures, I remember taking a trip to Israel and it just was so different than what I was used to in the US. Even the checkpoints where kids were holding machine guns. It was just all so different and it was just really eye opening. I've been in Mexico, very different. You’ve been exposed to so many different cultures. You get to really fill your soul with having this variety in life. I think that's part of why a lot of people are in property management. They love that unique variety. There's all these different unique challenges that come with it. There’s all these unique opportunities to meet unique people. You really got to focus on the even best and highest portions of that by being able to treat that freedom. Michael: Don't be scared of doing anything. Don’t be scared of making mistakes. Trial it. If it’s not 360 for someone, if it’s not video for someone. Go ahead and trial things and see how it can give you that freedom, but also to be able to engage with people, family, and friends. Imagine if you live in a suburb and you've got a sports club, a church, a local pub, or whatever you’ve got, all these meeting places but you never get to go there because you're so busy trying to do the admin. You're a local real estate agent and you're not even able to local. Flip that upside down. Imagine if you're a local real estate agent doing local things because you have all these other things automated and being done for you while you're networking, and meeting, and engaging with people in your area. Imagine for a second how different that looks. Jason: Yeah, I love it. I think, Michael, everybody listening has probably by now hopefully felt a little bit inspired that there's this possibility that you've painted for them that is probably for a lot of property manager still outside the current world view. I think that's exciting. I appreciate you coming on the show. How can people get in touch with you and what sort of take away would you want to leave them with? Michael: Well, if you’ve got any questions about anything we've spoken about today, just hit me up on Facebook and send me a message and I'll respond that way. It’s probably the easiest way rather than giving you a cell number or an email, just go to Facebook, we can connect there. I'm on messenger, it’s the simplest way. Again, I guess the constant message that we've been discussing today is try it; don’t give up, try new things that may automate your business and give you more time tomorrow even though you’re spending more time today to get it done. Jason: Perfect. This is an episode I will hope that people will listen to more than once. Michael, I appreciate you coming on the show. Michael: You're welcome. Jason: I think you gave a lot of value. I'm grateful to you. Thanks for being here and sharing so many ideas. Michael: Thank you. Jason: Alright, cool. That was really fun for me as a nerd to have Michael on. Message him through Facebook. If you are a property management entrepreneur that wants to add doors and make a difference, as I said in the intro, then you should be a part of our community. You would love it in there. Make sure you join the DoorGrow Club. You can get into that by going to doorgrowclub.com. Our Facebook group, there's really cool people in there like Michael, and there's just some phenomenal helpful property managers. People that buy into this vision that good property management can change the world. That what the industry needs here, especially in the US is collaboration over competition. These are people that are willing to collaborate, willing to help, willing to support you. Make sure you get inside the DoorGrow Club Facebook group and check it out. If you join that group, if you apply and join that group, it's free, but you have to apply. We will give you some free gifts including a fee bible and some other really cool takeaways and gifts over the next few days after we welcome you to the group, just to welcome you aboard, part of our Facebook group. Check that out at doorgrowclub.com. Until next time everybody, to our mutual growth. Bye everybody.  

Listen Here: iTunes | Overcast | PlayerFM Keep up with the North Star Podcast. My guest today is Michael Nielsen a scientist, writer and computer programmer who works as a research fellow at Y Combinator Research. Michael has written on various topics from quantum teleportation, geometric complexity and the future of science. Michael is the most original thinker I have discovered in a long time when it comes to artificial intelligence, augmenting human intelligence, reinventing explanation and using new media to enable new ways of thinking. Michael has pushed my mind towards new and unexpected places. This conversation gets a little wonky at times, but as you know, the best conversations are difficult. They are challenging because they venture into new, unexplored territory and that's exactly what we did here today.  Michael and I explored the history of tools and jump back to the invention of language, the defining feature of human collaboration and communication. We explore the future of data visualization and talk about the history of the spreadsheet as a tool for human thought.  “Before writing and mathematics, you have the invention of language which is the most significant event in some ways. That’s probably the defining feature of the human species as compared to other species.” LINKS Find Michael Online Michael’s Website Michael’s Twitter Michael’s Free Ebook: Neural Networks and Deep Learning Reinventing Discovery: The New Era of Networked Science Quantum Computation and Quantum Information Mentioned In the Show 2:12 Michael’s Essay Extreme Thinking 21:48 Photoshop 21:49 Microsoft Word 24:02 The David Bowie Exhibit 28:08 Google AI’s Deep Dream Images 29:26 Alpha Go 30:26 Brian Eno’s Infamous Airport Music 33:41 Listen to Speed of Life by Dirty South Books Mentioned 46:06 Zen and The Art of Motorcycle Maintenance by Robert M. Pirsig 54:12 Cat’s Cradle by Kurt Vonnegut People Mentioned 13:27 Rembrandt Van Rijn’s Artwork 15:01 Monet’s Gallery 15:02 Pierre Auguste Renoir’s Impressionist Art 15:05 Picasso’s Paintings 15:18 Paul Cezanne’s Post-Impressionist Art 25:40 David Brooke’s NYT Column 35:19 Franco of Cologne 56:58 Alan Kay’s Ted Talk on the future of education 57:04 Doug Engelbart 58:35 Karl Schroeder 01:02:06 Elon Musk’s Mars-bound company, SpaceX 01:04:25 Alex Tabarrok Show Topics 4:01 Michael’s North Star, which drives the direction of his research 5:32 Michael talks about how he sets his long-term goals and how he’s propelled by ideas he’s excited to see in the world. 7:13 The invention of language. Michael discusses human biology and how it’s easier to learn a language than writing or mathematics.  9:28 Michael talks about humanity’s ability to bootstrap itself. Examples include maps, planes, and photography  17:33 Limitations in media due to consolidation and the small number of communication platforms available to us  18:30 How self-driving cars and smartphones highlight the strange intersection where artificial intelligence meets human interaction and the possibilities that exist as technology improves 21:45 Why does Photoshop improve your editing skills, while Microsoft Word doesn’t improve your writing skills? 27:07 Michael’s opinion on how Artificial Intelligence can help people be more creative “Really good AI systems are going to depend upon building and currently depend on building very good models of different parts of the world, to the extent that we can then build tools to actually look in and see what those models are telling us about the world.”  30:22 The intersection of algorithms and creativity. Are algorithms the musicians of the future? 36:51 The emerging ability to create interactive visual representations of spreadsheets that are used in media, internally in companies, elections and more. “I’m interested in the shift from having media be predominantly static to dynamic, which the New York Times is a perfect example of. They can tell stories on newyorktimes.com that they can’t tell in the newspaper that gets delivered to your doorstep.” 45:42 The strategies Michael uses to successfully trail blaze uncharted territory and how they emulate building a sculpture   53:30 Michael’s learning and information consumption process, inspired by the idea that you are what you pretend to be 56:44 The foundation of Michael’s worldview. The people and ideas that have shaped and inspired Michael.  01:02:26 Michael’s hypothesis for the 21st century project involving blockchain and cryptocurrencies and their ability to make implementing marketplaces easier than ever before “The key point is that some of these cryptocurrencies actually, potentially, make it very easy to implement marketplaces. It’s plausible to me that the 21st century [project] turns out to be about [marketplaces]. It’s about inventing new types of markets, which really means inventing new types of collective action.” Host David Perell and Guest Michael Nielsen TRANSCRIPT Hello and welcome to the North Star. I'm your host, David Perell, the founder of North Star Media, and this is the North Star podcast. This show is a deep dive into the stories, habits, ideas, strategies, and rituals that guide fulfilled people and create enormous success for them, and while the guests are diverse, they share profound similarities. They're guided by purpose, live with intense joy, learn passionately, and see the world with a unique lens. With each episode, we get to jump into their minds, soak up their hard-earned wisdom and apply it to our lives. My guest today is Michael Nielson, a scientist, writer, and computer programmer, who works as a research fellow at Y Combinator Research. Michael's written on various topics from quantum teleportation to geometric complexity to the future of science, and now Michael is the most original thinker I've discovered in a long time. When it comes to artificial intelligence to augmenting human intelligence, reinventing explanation, or using new media to enable new ways of thinking, Michael has pushed my mind towards new and unexpected places. Now, this conversation gets a little wonky at times, but as you know, the best conversations are difficult. They're challenging because they venture into new, unexplored territory and that's exactly what we did here today. Michael and I explored the history of tools. This is an extension of human thought and we jump back to the invention of language, the defining feature of human collaboration and communication. We explore the future of data visualization and talk about the history of this spreadsheet as a tool for human thought. Here's my conversation with Michael Nielson. DAVID: Michael Nielson, welcome to the North Star Podcast. MICHAEL: Thank you, David. DAVID: So tell me a little bit about yourself and what you do. MICHAEL: So day to day, I'm a researcher at Y Combinator Research. I'm basically a reformed theoretical physicist. My original background is doing quantum computing work. And then I've moved around a bit over the years. I've worked on open science, I've worked on artificial intelligence and most of my current work is around tools for thought. DAVID: So you wrote an essay which I really enjoyed called Extreme Thinking. And in it, you said that one of the single most important principle of learning is having a strong sense of purpose and a strong sense of meaning. So let's be in there. What is that for you? MICHAEL: Okay. You've done your background. Haven't thought about that essay in years. God knows how long ago I wrote it. Having a strong sense of purpose. What did I actually mean? Let me kind of reboot my own thinking. It's, it's kind of the banal point of view. How much you want something really matters. There's this lovely interview with the physicist Richard Feynman, where he's asked about this Indian mathematical prodigy Ramanujan. A movie was made about Ramanujan’s mathematical prowess a couple of years ago. He was kind of this great genius. And a Feynman was asked what made Ramanujan so good. And the interview was expecting him to say something about how bright this guy was or whatever. And Feynman said instead, that it was desire. It was just that love of mathematics was at the heart of it. And he couldn't stop thinking about it and he was thinking about it. He was doing in many ways, I guess the hard things. It's very difficult to do the hard things that actually block you unless you have such a strong desire that you're willing to go through those things. Of course, I think you see that in all people who get really good at something, whether it be sort of a, just a skill like playing the violin or something, which is much more complicated. DAVID: So what is it for you? What is that sort of, I hate to say I want to just throw that out here, that North Star, so to speak, of what drives you in your research? MICHAEL: Research is funny. You go through these sort of down periods in which you don't necessarily have something driving you on. That used to really bother me early in my career. That was sort of a need to always be moving. But now I think that it's actually important to allow yourself to do that. That's actually how you find the problems, which really get, get you excited. If you don't sort of take those pauses, then you're not gonna find something that's really worth working on. I haven't actually answered your question. I think I know I've jumped to that other point because that's one thing that really matters to me and it was something that was hard to learn. DAVID: So one thing that I've been thinking a lot about recently is you sort of see it in companies. You see it in countries like Singapore, companies like Amazon and then something like the Long Now Foundation with like the 10,000-year clock. And I'm wondering to you in terms of learning, there's always sort of a tension between short-term learning and long-term learning. Like short-term learning so often is maybe trying to learn something that feels a little bit richer. So for me, that's reading, whereas maybe for a long-term learning project there are things I'd like to learn like Python. I'd like to learn some other things like that. And I'm wondering, do you set long-term learning goals for yourself or how would you think about that trade off? MICHAEL: I try to sit long-time learning goals to myself, in many ways against my better judgment. It's funny like you're very disconnected from you a year from now or five years from now, or 10 years from now. I can't remember, but Eisenhower or Bonaparte or somebody like that said that the planning is invaluable or planning plans are overrated, but planning is invaluable. And I think that's true. And this is the right sort of attitude to take towards these long-term lending goals. Sure. It's a great idea to decide that you're going out. Actually, I wouldn't say it was a great idea to say that you're going to learn python, I might say. However, there was a great idea to learn python if you had some project that you desperately wanted to do that it required you to learn python, then it's worth doing, otherwise stay away from python. I certainly favor, coupling learning stuff to projects that you're excited to actually see in the world. But also, then you may give stuff up, you don't become a master of python and instead you spend whatever, a hundred hours or so learning about it for this project that takes you a few hundred hours, and if you want to do a successor project which involves it, more of it. Great, you'll become better. And if you don't, well you move onto something else. DAVID: Right. Well now I want to dive into the thing that I'm most excited to talk to you about today and that's tools that extend human thought. And so let's start with the history of that. We'll go back sort of the history of tools and there's had great Walter Ong quote about how there are no new thoughts without new technologies. And maybe we can start there with maybe the invention of writing, the invention of mathematics and then work through that and work to where you see the future of human thought going with new technologies. MICHAEL: Actually, I mean before writing and mathematics, you have the invention of language, which is almost certainly the most significant single event in some ways. The history of the planet suddenly, you know, that's probably the defining feature of the human species as compared to other species. Um, I say invention, but it's not even really invention. There's certainly a lot of evidence to suggest that language is in some important sense built into our biology. Not the details of language. Um, but this second language acquisition device, it seems like every human is relatively very set to receive language. The actual details depend on the culture we grow up on. Obviously, you don't grow up speaking French if you were born in San Francisco and unless you were in a French-speaking household, some very interesting process of evolution going on there where you have something which is fundamentally a technology in some sense languages, humans, a human invention. It's something that's constructed. It's culturally carried. Um, it, there's all these connections between different words. There's almost sort of a graph of connections between the words if you like, or all sorts of interesting associations. So in that sense, it's a technology, something that's been constructed, but it's also something which has been over time built into our biology. Now if you look at later technologies of thought things like say mathematics, those are much, much later. That hasn't been the same sort of period of time. Those don't seem to be built into our biology in quite the same way. There's actually some hints of that we have some intrinsic sense of number and there's some sort of interesting experiments that suggest that we were built to do certain rudimentary kinds of mathematical reasoning but there's no, you know, section of the brain which specializes sort of from birth in solving quadratic equations, much less doing algebraic geometry or whatever, you know, super advanced. So it becomes this cultural thing over the last few thousand years, this kind of amazing process whereby we've started to bootstrap ourselves. If you think about something like say the invention of maps, which really has changed the way people relate to the environment. Initially, they were very rudimentary things. Um, and people just kept having new ideas for making maps more and more powerful as tools for thought. Okay. I can give you an example. You know, a very simple thing, if you've ever been to say the underground in London or most other subway systems around the world. It was actually the underground when this first happened, if you look at the map of the underground, I mean it's a very complicated map, but you can get pretty good at reasoning about how to get from one place to another. And if you look at maps prior to, I think it was 1936, in fact, the maps were much more complicated. And the reason was that mapmakers up to that point had the idea that where the stations were shown on the map had to correspond to the geography of London. Exactly. And then somebody involved in producing the underground map had just a brilliant insight that actually people don't care. They care about the connections between the stations and they want to know about the lines and they want some rough idea of the geography, but they're quite happy for it to be very rough indeed and he was able to dramatically simplify that map by simply doing away with any notion of exact geography. DAVID: Well, it's funny because I noticed the exact same thing in New York and so often you have insights when you see two things coming together. So I was on the subway coming home one day and I was looking at the map and I always thought that Manhattan was way smaller than Brooklyn, but on the subway map, Manhattan is actually the same size as Brooklyn. And in Manhattan where the majority of the subway action is, it takes up a disproportionate share of the New York City subway map. And then I went home to go read Power Broker, which is a book about Robert Moses building the highways and they had to scale map. And what I saw was that Brooklyn was way, way bigger than Manhattan. And from predominantly looking at subway maps. Actually, my topological geographical understanding of New York was flawed and I think exactly to your point. MICHAEL: It's interesting. When you think about what's going on there and what it is, is some person or a small group of people is thinking very hard about how to represent their understanding of the city and then the building, tools, sort of a technological tool of thought that actually then saves millions or in the case of a New York subway or the London underground, hundreds of millions or billions of people, mostly just seconds, sometimes, probably minutes. Like those maps would be substantially more complicated sort of every single day. So it's only a small difference. I mean, and it's just one invention, right? But, you know, our culture is of course accumulated thousands or millions of these inventions. DAVID: One of my other favorite ones from being a kid was I would always go on airplanes and I'd look at the route map and it would always show that the airplanes would fly over the North Pole, but on two-dimensional space that was never clear to me. And I remember being with my dad one night, we bought a globe and we took a rubber band and we stretched why it was actually shorter to fly over the North Pole, say if you're going from New York to India. And that was one of the first times in my life that I actually didn't realize it at the time, but understood exactly what I think you're trying to get at there. How about photography? Because that's another one that I think is really striking, vivid from the horse to slow motion to time lapses. MICHAEL: Photography I think is interesting in this vein in two separate ways. One is actually what it did to painting, which is of course painters have been getting more and more interested in being more and more realistic. And honestly, by the beginning of the 19th century, I think painting was pretty boring. Yeah, if you go back to say the 16th and 17th centuries, you have people who are already just astoundingly good at depicting things in a realistic fashion. To my mind, Rembrandt is probably still the best portrait painter in some sense to ever live. DAVID: And is that because he was the best at painting something that looked real? MICHAEL: I think he did something better than that. He did this very clever thing, you know, you will see a photograph or a picture of somebody and you'll say, oh, that really looks like them. And I think actually most of the time we, our minds almost construct this kind of composite image that we think of as what David looks like or what our mother looks like or whatever. But actually moment to moment, they mostly don't look like that. They mostly, you know, their faces a little bit more drawn or it's, you know, the skin color is a little bit different. And my guess, my theory of Rembrandt, is that he may have actually been very, very good at figuring out almost what that image was and actually capturing that. So, yeah, I mean this is purely hypothetical. I have no real reason to believe it, but I think it's why I responded so strongly to his paintings. DAVID: And then what happened? So after Rembrandt, what changed? MICHAEL: So like I said, you mean you keep going for a sort of another 200 years, people just keep getting more and more realistic in some sense. You have all the great landscape painters and then you have this catastrophe where photography comes along and all of a sudden you're being able to paint in a more and more realistic fashion. It doesn't seem like such a hot thing to be doing anymore. And if for some painters, I think this was a bit of a disaster, a bit of dose. I said of this modern wave, you start to see through people like Monet and Renoir. But then I think Picasso, for me anyway, was really the pivotal figure in realizing that actually what art could become, is the invention of completely new ways of seeing. And he starts to play inspired by Cezanne and others in really interesting ways with the construction of figures and such. Showing things from multiple angles in one painting and different points of view. And he just plays with hundreds of ideas along these lines, through all of his painting and how we see and what we see in how we actually construct reality in their heads from the images that we see. And he did so much of that. It really became something that I think a lot of artists, I'm not an artist or a sophisticated art theory person, but it became something that other people realized was actually an extraordinarily interesting thing to be doing. And much of the most interesting modern art is really a descendant of that understanding that it's a useful thing to be doing. A really interesting thing to be doing rather than becoming more and more realistic is actually finding more and more interesting ways of seeing and being able to represent the world. DAVID: So I think that the quote is attributed to Marshall McLuhan, but I have heard that Winston Churchill said it. And first, we shape our tools and then our tools shape us. And that seems to be sort of the foundation of a lot of the things that you're saying. MICHAEL: Yeah, that's absolutely right. I mean, on the other side, you also have, to your original question about photography. Photographers have gradually started to realize that they could shape how they saw nature. Ansel Adams and people like this, you know. Just what an eye. And understanding his tools so verbally he's not just capturing what you see. He's constructing stuff in really, really interesting ways. DAVID: And how about moving forward in terms of your work, thinking about where we are now to thinking about the future of technology. For example, one thing that frustrates me a bit as a podcast host is, you know, we just had this conversation about art and it's the limits of the audio medium to not be able to show the paintings of Rembrandt and Cezanne that we just alluded to. So as you think about jumping off of that, as you think about where we are now in terms of media to moving forward, what are some of the challenges that you see and the issues that you're grappling with? MICHAEL: One thing for sure, which I think inhibits a lot of exploration. We're trapped in a relatively small number of platforms. The web is this amazing thing as our phones, iOS and whatnot, but they're also pretty limited and that bothers me a little bit. Basically when you sort of narrow down to just a few platforms which have captured almost all of the attention, that's quite limiting. People also, they tend not to make their own hardware. They don't do these kinds of these kinds of things. If that were to change, I think that would certainly be exciting. Something that I think is very, very interesting over the next few years, artificial intelligence has gotten to the point now where we can do a pretty good job in understanding what's actually going on inside a room. Like we can set up sufficient cameras. If you think about something like self-driving cars, essentially what they're doing is they're building up a complete model of the environment and if that model is not pretty darned good, then you can't do self-driving cars, you need to know where the pedestrians are and where the signs are and all these kinds of things and if there's an obstruction and that technology when brought into, you know, the whole of the rest of the world means that you're pretty good at passing out. You know what's inside the room. Oh, there's a chair over there, there's a dog which is moving in that direction, there's a person, there’s a baby and sort of understanding all those actions and ideally starting to understand all the gestures which people are making as well. So we're in this very strange state right at the moment. Where the way we talk to computers is we have these tiny little rectangles and we talk to them through basically a square inch or so of sort of skin, which is our eyes. And then we, you know, we tap away with our fingers and the whole of the rest of our body and our existence is completely uncoupled from that. We've effectively reduced ourselves to our fingers and our eyes. We a couple to it only through the whatever, 100 square inches, couple hundred square inches of our screens or less if you're on a phone and everything else in the environment is gone. But we're actually at a point where we're nearly able to do an understanding of all of that sufficiently well that actually other modes of interaction will become possible. I don't think we're quite there yet, but we're pretty close. And you start to think about, something like one of my favorite sport is tennis. You think about what a tennis player can do with their body or you think about what a dancer can do with their body. It's just extraordinary. And all of that mode of being human and sort of understanding we can build up antibodies is completely shut out from the computing experience at the moment. And I think over the next sort of five to ten years that will start to reenter and then in the decades hence, it will just seem strange that it was ever shut out. DAVID: So help me understand this. So when you mean by start to reenter, do mean that we'll be able to control computers with other parts of our bodies or that we'll be spending less time maybe typing on keyboards. Help me flesh this out. MICHAEL: I just mean that at the moment. As you speak to David, you are waving your arms around and all sorts of interesting ways and there is no computer system which is aware of it, what your computer system is aware of. You're doing this recording. That's it. And even that, it doesn't understand in any sort of significant way. Once you've gained the ability to understand the environment. Lots of interesting things become possible. The obvious example, which everybody immediately understands is that self driving cars become possible. There's this sort of enormous capacity. But I think it's certainly reasonably likely that much more than that will become possible over the next 10 to 20 years. As your computer system becomes completely aware of your environment or as aware as you're willing to allow it to be. DAVID: You made a really interesting analogy in one of your essays about the difference between Photoshop and Microsoft Word. That was really fascinating to me because I know both programs pretty well. But to know Microsoft word doesn't necessarily mean that I'm a better writer. It actually doesn't mean that at all. But to know Photoshop well probably makes me pretty good at image manipulation. I'm sure there's more there, but if you could walk me through your thought process as you were thinking through that. I think that's really interesting. MICHAEL: So it's really about a difference in the type of tools which are built into the program. So in Photoshop, which I should say, I don't know that well, I know Word pretty well. I've certainly spent a lot more time in it than I have ever spent in Photoshop. But in Photoshop, you do have these very interesting tools which have been built in, which really condense an enormous amount of understanding of ideas like layers or an idea, different brushes, these kinds of ideas. There's just a tremendous amount of understanding which has been built in there. When I watch friends who are really good with these kinds of programs, what they can do with layers is just amazing. They understand all these kind of clever screening techniques. It seems like such a simple idea and yet they're able to do these things that let you do astonishing things just with sort of three or four apparently very simple operations. So in that sense, there are some very deep ideas about image manipulation, which had been built directly into Photoshop. By contrast, there's not really very many deep ideas about writing built into Microsoft Word. If you talk to writers about how they go about their actual craft and you say, well, you know, what heuristics do use to write stories and whatnot. Most of the ideas which they use aren't, you know, they don't correspond directly to any set of tools inside Word. Probably the one exception is ideas, like outlining. There are some tools which have been built into word and that's maybe an example where in fact Word does help the writer a little bit, but I don't think to nearly the same extent as Photoshop seems to. DAVID: I went to an awesome exhibit for David Bowie and one of the things that David but we did when he was writing songs was he had this word manipulator which would just throw him like 20, 30 words and the point wasn't that he would use those words. The point was that by getting words, his mind would then go to different places and so often when you're in my experience and clearly his, when you're trying to create something, it helps to just be thrown raw material at you rather than the perennial, oh my goodness, I'm looking at a white screen with like this clicking thing that is just terrifying, Word doesn't help you in that way. MICHAEL: So an example of something which does operate a little bit in that way, it was a Ph.D. thesis was somebody wrote at MIT about what was called the Remembrance Agent. And what it would do, it was a plugin essentially for a text editor that it would, look at what you are currently writing and it would search through your hard disk for documents that seemed like they might actually be relevant. Just kind of prompt you with what you're writing. Seems like it might be related to this or this or this or this or this. And to be perfectly honest, it didn't actually work all that well. I think mostly because the underlying machine learning algorithms it used weren't very clever. It's defunct now as far as I know. I tried to get it to run on my machine or a year or two ago and I couldn't get it running. It was still an interesting thing to do. It had exactly this same kind of the belly sort of experience. Even if they weren't terribly relevant. You kind of couldn't understand why on earth you are being shown it. It's still jogged your mind in an interesting way. DAVID: Yeah. I get a lot of help out of that. Actually, I’ll put this example. So David Brooks, you know the columnist for the New York Times. When he writes, what he does is he gets all of his notes and he just puts his notes on the floor and he literally crawls all around and tries to piece the notes together and so he's not even writing. He's just organizing ideas and it must really help him as it helps me to just have raw material and just organize it all in the same place. MICHAEL: There's a great British humorist, PG Boathouse, he supposedly wrote on I think it was the three by five-inch cards. He'd write a paragraph on each one, but he had supposedly a very complicated system in his office, well not complicated at all, but it must have looked amazing where he would basically paste the cards to the wall and as the quality of each paragraph rose, he would move the paragraph up the wall and I think the idea was something like once it got to the end, it was a lion or something, every paragraph in the book had to get above that line and at that point it was ready to go. DAVID: So I've been thinking a lot about sort of so often in normal media we take AI sort of on one side and art on another side. But I think that so many of the really interesting things that will emerge out of this as the collaboration between the two. And you've written a bit about art and AI, so how can maybe art or artificial intelligence help people be more creative in this way? MICHAEL: I think we still don't know the answer to the question, unfortunately. The hoped-for answer the answer that might turn out to be true. Real AI systems are going to build up very good models of different parts of the world, maybe better than any human has of those parts of the world. It might be the case, I don't know. It might be the case that something like the Google translate system, maybe in some sense that system already knows some facts about translation that would be pretty difficult to track down in any individual human mind and sort of so much about translation in some significant ways. I'm just speculating here. But if you can start to interrogate that understanding, it becomes a really useful sort of a prosthetic for human beings. If you've seen any of these amazing, well I guess probably the classics, the deep dream images that came out of Google brain a couple of years ago. Basically, you take ordinary images and you're sort of running them backwards through a neural net somehow. You're sort of seeing something about how the neural net sees that image. You get these very beautiful images as a result. There's something strange going on and sort of revealing about your own way of seeing the world. And at the same time, it's based on some structure which this neural net has discovered inside these images which is not ordinarily directly accessible to you. It's showing you that structure. So sort of I think the right way to think about this is that really good AI systems are going to depend upon building and do currently depend on building very good models of different parts of the world and to the extent that we can then build tools to actually look in and see what those models are telling us about the world, we can learn interesting new things which are useful for us. I think the conventional way, certainly the science fiction way to think about AI is that we're going to give it commands and it's going to do stuff. How you shut the whatever it is, the door or so on and so forth, and there was certainly will be a certain amount of that. Or with AlphaGo what is the best move to take now, but actually in some sense, with something like AlphaGo, it's probably more interesting to be able to look into it and see what it's understanding is of the board position than it is to ask what's the best move to be taken. A colleague showed me a go program, a prototype, what it would do. It was a very simple kind of a thing, but it would help train beginners. I think it was Go, but by essentially colorizing different parts of the board according to whether they were good or bad moves to be taking in its estimation. If you're a sophisticated player, it probably wasn't terribly helpful, but if you're just a beginner, there's an interesting kind of a conditioning going on there. At least potentially a which lets you start to see. You get a feeling for immediate feedback from. And all that's happening there is that you're seeing a little bit into one of these machine learning algorithms and that's maybe helping you see the world in a slightly different way. DAVID: As I was preparing for this podcast, you've liked a lot to Brian Eno and his work. So I spent as much time reading Brian Eno, which I'm super happy that I went down those rabbit holes. But one of the things that he said that was really interesting, so he's one of the fathers of ambient music and he said that a lot of art and especially music, there will sort of be algorithms where you sort of create an algorithm that to the listener might even sound better than what a human would produce. And he said two things that were interesting. The first one is that you create an algorithm and then a bunch of different musical forms could flower out of that algorithm. And then also said that often the art that algorithms create is more appealing to the viewer. But it takes some time to get there. And had the creator just followed their intuition. They probably would have never gotten there. MICHAEL: It certainly seems like it might be true. And that's the whole sort of interesting thing with that kind of computer-generated music is to, I think the creators of it often don't know where they're gonna end up. To be honest, I think my favorite music is all still by human composers. I do enjoy performances by people who live code. There's something really spectacular about that. So there are people who, they will set up the computer and hook it up to speakers and they will hook the text editor up to a projector and they'll have essentially usually a modified form of the programming language list a or people use a few different systems I guess. And they will write a program which producers music onstage and they'll just do it in real time and you know, it starts out sounding terrible of course. And that lasts for about 20 seconds and by about sort of 30 or 40 seconds in, already it's approaching the limits of complex, interesting music and I think even if you don't really have a clue what they're doing as they program, there's still something really hypnotic and interesting about watching them actually go through this process of creating music sort of both before your eyes and before your ears. It's a really interesting creative experience and sometimes quite beautiful. I think I suspect that if I just heard one of those pieces separately, I probably wouldn't do so much for me, but actually having a done in real time and sort of seeing the process of creation, it really changes the experience and makes it very, very interesting. And sometimes, I mean, sometimes it's just beautiful. That's the good moment, right? When clearly the person doing it has something beautiful happen. You feel something beautiful happen and everybody else around you feel something beautiful and spontaneous. It's just happened. That's quite a remarkable experience. Something really interesting is happening with the computer. It's not something that was anticipated by the creator. It arose out of an interaction between them and their machine. And it is actually beautiful. DAVID: Absolutely. Sort of on a similar vein, there's a song called Speed of Life by Dirty South. So I really liked electronic music, but what he does is he constructs a symphony, but he goes one layer at a time. It's about eight and a half minute song and he just goes layer after layer, after layer, after layer. And what's really cool about listening to it is you appreciate the depth of a piece of music that you would never be able to appreciate if you didn't have that. And also by being able to listen to it over and over again. Because before we had recording, you would only hear a certain piece of music live and one time. And so there are new forms that are bursting out of now because we listen to songs so often. MICHAEL: It's interesting to think, there's a sort of a history to that as well. If you go back, essentially modern systems for recording music, if you go back much more than a thousand years. And we didn't really have them. There's a multi-thousand-year history of recorded music. But a lot of the early technology was lost and it wasn't until sort of I think the eighth, ninth century that people started to do it again. But we didn't get all the way to button sheet music overnight. There was a whole lot of different inventions. For instance, the early representations didn't show absolute pitch. They didn't show the duration of the note. Those were ideas that had to be invented. So in I think it was 1026, somebody introduced the idea of actually showing a scale where you can have absolute pitch. And then a century or two after that, Franco of Cologne had the idea of representing duration. And so they said like tiny little things, but then you start to think about, well, what does that mean for the ability to compose music? It means now that actually, you can start to compose pieces, which for many, many, many different instruments. So you start to get the ability to have orchestral music. So you go from being able to basically you have to kind of instruct small groups of players that's the best you can hope to do and get them to practice together and whatever. So maybe you can do something like a piece for a relatively small number of people, but it's very hard to do something for an 80 piece orchestra. Right? So all of a sudden that kind of amazing orchestral music I think becomes possible. And then, you know, we're sort of in version 2.0 of that now where of course you can lay a thousand tracks on top of one another if you want. You get ideas like micropolyphony. And these things where you look at the score and it's just incredible, there are 10,000 notes in 10 seconds. DAVID: Well, to your point I was at a tea house in Berkeley on Monday right by UC Berkeley's campus and the people next to me, they were debating the musical notes that they were looking at but not listening to the music and it was evident that they both had such a clear ability to listen to music without even listening to it, that they could write the notes together and have this discussion and it was somebody who doesn't know so much about music. It was really impressive. MICHAEL: That sounds like a very interesting conversation. DAVID: I think it was. So one thing that I'm interested in and that sort of have this dream of, is I have a lot of friends in New York who do data visualization and sort of two things parallel. I have this vision of like remember the Harry Potter book where the newspaper comes alive and it becomes like a rich dynamic medium. So I have that compared with some immersive world that you can walk through and be able to like touch and move around data and I actually think there's some cool opportunities there and whatnot. But in terms of thinking about the future of being able to visualize numbers and the way that things change and whatnot. MICHAEL: I think it's a really complicated question like it actually needs to be broken down. So one thing, for example, I think it's one of the most interesting things you can do with computers. Lots of people never really get much experience playing with models and yet it's possible to do this. Now, basically, you can start to build very simple models. The example that a lot of people do get that they didn't use to get, is spreadsheets. So, you can sort of create a spreadsheet that is a simple model of your company or some organization or a country or of whatever. And the interesting thing about the spreadsheet is really that you can play with it. And it sort of, it's reactive in this interesting way. Anybody who spends as much time with spreadsheets is they start to build up hypotheses, oh, what would happen if I changed this number over here? How would it affect my bottom line? How would it affect the GDP of the country? How would it affect this? How would it affect that? And you know, as you kind of use it, you start to introduce, you start to make your model more complicated. If you're modeling some kind of a factory yet maybe you start to say, well, what would be the effect if a carbon tax was introduced? So you introduce some new column into the spreadsheet or maybe several extra columns into the spreadsheet and you start to ask questions, well, what would the structure of the carbon tax be? What would help you know, all these sorts of what if questions. And you start very incrementally to build up models. So this experience, of course, so many people take for granted. It was not an experience that almost anybody in the world had say 20 or 30 years ago. Well, spreadsheets data about 1980 or so, but this is certainly an experience that was extremely rare prior to 1980 and it's become a relatively common, but it hasn't made its way out into mass media. We don't as part of our everyday lives or the great majority of people don't have this experience of just exploring models. And I think it's one of the most interesting things which particularly the New York Times and to some extent some of the other newsrooms have done is they've started in a small way to build these models into the news reading experience. So, in particular, the data visualization team at the New York Times, people like Amanda Cox and others have done this really interesting thing where you start to get some of these models. You might have seen, for example, in the last few elections. They've built this very interesting model showing basically if you can sort of make choices about how different states will vote. So if such and such votes for Trump, what are Hillary's chances of winning the election. And you may have seen they have this sort of amazing interactive visualization of it where you can just go through and you can sort of look at the key swing states, what happens if Pennsylvania votes for so and so what happens if Florida does? And that's an example where they've built an enormous amount of sort of pulling information into this model and then you can play with it to build up some sort of understanding. And I mean, it's a very simple example. I certainly think that you know, normatively, we're not there yet. We don't actually have a shared understanding. There's very little shared language even around these models. You think about something like a map. A map is an incredibly sophisticated object, which however we will start learning from a very young age. And so we're actually really good at parsing them. We know if somebody shows us a map, how to engage, how to interpret it, how to use it. And if somebody just came from another planet, actually they need to learn all those things. How do you represent a road? How do you represent a shop on a map? How do you represent this or that, why do we know that up is north like that's a convention. All those kinds of things actually need to be learned and we learned them when we were small. With these kinds of things which the Times and other media outlets are trying to do, we lack all of that collective knowledge and so they're having to start from scratch and I think that over a couple of generations actually, they'll start to evolve a lot of conventions and people will start to take it for granted. But in a lot of contexts actually you're not just going to be given a narrative, you know, just going to be told sort of how some columnist thinks the world is. Instead, you'll actually expect to be given some kind of a model which you can play with. You can start to ask questions and sort of run your own hypotheses in much the same way as somebody who runs a business might actually set up a spreadsheet to model their business and ask interesting questions. It's not perfect. The model is certainly that the map is not the territory as they say, but it is nonetheless a different way of engaging rather than just having some expert tell you, oh, the world is this way. DAVID: I'm interested in sort of the shift from having media be predominantly static to dynamic, which the New York Times is a perfect example. They can tell stories on Newyorktimes.com that they can't tell in the newspaper that gets delivered to your doorstep. But what's really cool about spreadsheets that you're talking about is like when I use Excel, being able to go from numbers, so then different graphs and have the exact same data set, but some ways of visualizing that data totally clicked for me and sometimes nothing happens. MICHAEL: Sure. Yeah. And we're still in the early days of that too. There's so much sort of about literacy there. And I think so much about literacy is really about opportunity. People have been complaining essentially forever that the kids of today are not literate enough. But of course, once you actually provide people with the opportunity and a good reason to want to do something, then they can become very literate very quickly. I think basically going back to the rise of social media sort of 10 or 15 years ago, so Facebook around whatever, 2006, 2007 twitter a little bit later, and then all the other platforms which have come along since. They reward being a good writer. So all of a sudden a whole lot of people who normally wouldn't have necessarily been good writers are significantly more likely to become good writers. It depends on the platform. Certainly, Facebook is a relatively visual medium. Twitter probably helps. I think twitter and text messaging probably are actually good. Certainly, you're rewarded for being able to condense an awful lot into a small period. People complain that it's not good English, whatever that is. But I think I'm more interested in whether something is a virtuosic English than I am and whether or not it's grammatically correct. People are astonishingly good at that, but the same thing needs to start to happen with these kinds of models and with data visualizations and things like that. At the moment, you know, you have this priestly caste that makes a few of them and that's an interesting thing to be able to do, but it's not really part of the everyday experience of most people. It's an interesting question whether or not that's gonna change as it going to in the province of some small group of people, or will it actually become something that people just expect to be able to do? Spreadsheets are super interesting in that regard. They actually did. I think if you've talked to somebody in 1960 and said that by 2018, tens of millions of people around the world would be building sophisticated mathematical models as just part of their everyday life. It would've seemed absolutely ludicrous. But actually, that kind of model of literacy has become relatively common. I don't know whether we'll get to 8 billion people though. I think we probably will. DAVID: So when I was in high school I went to, what I like to say is the weirdest school in the weirdest city in America. I went to the weirdest high school in San Francisco and rather than teaching us math, they had us get in groups of three and four and they had us discover everything on our own. So we would have these things called problem sets and we would do about one a week and the teacher would come around and sort of help us every now and then. But the goal was really to get three or four people to think through every single problem. And they called it discovery-based learning, which you've also talked about too. So my question to you is we're really used to learning when the map is clear and it's clear what to do and you can sort of follow a set path, but you actually do the opposite. The map is unclear and you're actually trailblazing and charting new territory. What strategies do you have to sort of sense where to move? MICHAEL: There's sort of a precursor question which is how do you maintain your morale and the Robert Pirsig book, Zen and the Art of Motorcycle Maintenance. He proposes a university subject, gumptionology 101. Gumption is almost the most important quality that we have. The ability to keep going when things don't seem very good. And mostly that's about having ways of being playful and ways of essentially not running out of ideas. Some of that is about a very interesting tension between having, being ambitious in what you'd like to achieve, but also being very willing to sort of celebrate the tiniest, tiniest, tiniest successes. Suddenly a lot of creative people I know I think really struggle with that. They might be very good at celebrating tiny successes but not have that significant ambitions, but they might be extremely ambitious, but because they're so ambitious, if an idea doesn't look Nobel prize worthy, they're not particularly interested in it. You know, they struggle with just kind of the goofing around and they often feel pretty bad because of course most days you're not at your best, you don't actually have the greatest idea. So there's some interesting tension to manage there. There's really two different types of work. One is where you have a pretty good goal, you know what success looks like, right? But you may also be doing something that's more like problem discovery where you don't even know where you're going. Typically if you're going to compose a piece of music. Well, I'm not a composer, but certainly, my understanding from, from friends who are, is that they don't necessarily start out with a very clear idea of where they're going. Some composers do, but a lot, it's a process of discovery. Actually, a publisher once told me somebody who has published a lot of well-known books that she described one of her authors as a writing for discovery. Like he didn't know what his book was going to be about, he had a bunch of kind of vague ideas and the whole point of writing the book was to actually figure out what it was that he wanted to say, what problem was he really interested in. So we'd start with some very, very good ideas and they kind of get gradually refined. And it was very interesting. I really liked his books and it was interesting to see that. They looked like they'd been very carefully planned and he really knew what he was doing and she told me that no, he'd sort of come in and chat with her and be like, well, I'm sort of interested over here. And he'd have phrases and sort of ideas. But he didn't actually have a clear plan and then he'd get through this process of several years of gradually figuring out what it was that he wanted to say. And often the most significant themes wouldn't actually emerge until relatively late in that whole process. I asked another actually quite a well-known writer, I just bumped into when he was, he was reporting a story for a major magazine and I think he'd been working, he'd been reporting for two weeks, I think at that point. So just out interviewing people and whatever. And I said, how's it going? And he said, Oh yeah, pretty good. I said, what's your story about? He said, I don't know yet, which I thought was very interesting. He had a subject, he was following a person around. But he didn't actually know what his story was. DAVID: So the analogy that I have in my head as you're talking about this, it's like sculpture, right? Where you start maybe with a big thing of granite or whatnot, and slowly but surely you're carving the stone or whatnot and you're trying to come up with a form. But so often maybe it's the little details at the end that are so far removed from that piece of stone at the very beginning that make a sculpture exceptional. MICHAEL: Indeed. And you wonder what's going on. I haven't done sculpture. I've done a lot of writing and writing often feels so sometimes I know what I want to say. Those are the easy pieces to write, but more often it's writing for discovery and there you need to be very happy celebrating tiny improvements. I mean just fixing a word needs to be an event you actually enjoy, if not, the process will be an absolute nightmare. But then there's this sort of instinct where you realize, oh, that's a phrase that A: I should really refine and B: it might actually be the key to making this whole thing work and that seems to be a very instinctive kind of a process. Something that you, if you write enough, you start to get some sense of what actually works for you in those ways. The recognition is really hard. It's very tempting to just discount yourself. Like to not notice when you have a good phrase or something like that and sort of contrary wise sometimes to hang onto your darlings too long. You have the idea that you think it's about and it's actually wrong. DAVID: Why do you write and why do you choose the medium of writing to think through things sometimes? I know that you choose other ones as well. MICHAEL: Writing has this beautiful quality that you can improve your thoughts. That's really helpful. A friend of mine who makes very popular YouTube videos about mathematics has said to me that he doesn't really feel like people are learning much mathematics from them. Instead, it's almost a form of advertising like they get some sense of what it is. They know that it's very beautiful. They get excited. All those things are very important and matter a lot to him, but he believes that only a tiny, tiny number of people are actually really understanding much detail at all. There's actually a small group who have apparently do kind of. They have a way of processing video that lets them understand. DAVID: Also, I think you probably have to, with something like math, I've been trying to learn economics online and with something like math or economics that's a bit complex and difficult, you have to go back and re-watch and re-watch, but I think that there's a human tendency to want to watch more and more and more and it's hard to learn that way. You actually have to watch things again. MICHAEL: Absolutely. Totally. And you know, I have a friend who when he listens to podcasts, if he doesn't understand something, he, he rewinds it 30 seconds. But most people just don't have that discipline. Of course, you want to keep going. So I think the written word for most people is a little bit easier if they want to do that kind of detailed understanding. It's more random access to start with. It's easier to kind of skip around and to concentrate and say, well, I didn't really get that sentence. I'm going to think about it a little bit more, or yeah, I can see what's going to happen in those two or three paragraphs. I'll just very quickly skip through them. It's more built for that kind of detailed understanding, so you're getting really two very different experiences. In the case of the video, very often really what you're getting is principally an emotional experience with some bits and pieces of understanding tacked on with the written word. Often a lot of that emotion is stripped out, which makes can make it much harder to motivate yourself. You need that sort of emotional connection to the material, but it is actually, I think a great deal easier to understand sort of the details of it. There's a real kind of choice to be to be made. There's also the fact that people just seem to respond better to videos. If you want a large audience, you're probably better off making YouTube videos than you are publishing essays. DAVID: My last question to you, as somebody who admires your pace and speed of learning and what's been really fun about preparing for this podcast and come across your work is I really do feel like I've accessed a new perspective on the world which is really cool and I get excited probably most excited when I come across thinkers who don't think like anyone who I've come across before, so I'm asking to you first of all, how do you think about your learning process and what you consume and second of all, who have been the people and the ideas that have really formed the foundation of your thought? MICHAEL: A Kurt Vonnegut quote from his book, I think it's Cat's Cradle. He says, we become what we pretend to be, so you must be careful what we pretend to be and I think there's something closely analogously true, which is that we become what we pay attention to, so we should be careful what we pay attention to and that means being fairly careful how you curate your information diet. There's a lot of things. There's a lot of mistakes I've made. Paying attention to angry people is not very good. I think ideas like the filter bubble, for example, are actually bad ideas. And for the most part, it sounds virtuous to say, oh, I'm going to pay attention to people who disagree with me politically and whatever. Well, okay, there's a certain amount of truth to that. It's a good idea probably to pay attention to the very best arguments from the very best exponents of the other different political views. So sure, seek those people out, but you don't need to seek out the random person who has a different political view from you. And that's how most people actually interpret that kind of injunction. They, they're not looking for the very best alternate points of view. So that's something you need to be careful about. There's a whole lot of things like that I enjoy. So for example, I think one person, it's interesting on twitter to look, he's, he's no longer active but he's still following people is Marc Andreessen and I think he follows, it's like 18,000 people or something and it's really interesting just to look through the list of followers because it's all over the map and much of it I wouldn't find interesting at all, but you'll find the strangest corners people in sort of remote villages in India and people doing really interesting things in South Africa. Okay. So he's a venture capitalist but they're not connected to venture capital at all. So many of them, they're just doing interesting things all over the world and I wouldn't advocate doing the same thing. You kind of need to cultivate your own tastes and your own interests. But there's something very interesting about that sort of capitalist city of interests and curiosity about the world, which I think is probably very good for almost anybody to cultivate. I haven't really answered your question. DAVID: I do want to ask who were the people or the ideas or the areas of the world that have really shaped and inspired your thinking because I'm asking selfishly because I want to go down those rabbit holes. MICHAEL: Alright. A couple of people, Alan Kay and Doug Engelbart, who are two of the people who really developed the idea of what a computer might be. In the 1950's and 60's, people mostly thought computers were machines for solving mathematical problems, predicting the weather next week, computing artillery tables, doing these kinds of things. And they understood that actually there could be devices which humans would use for themselves to solve their own problems. That would be sort of almost personal prosthetics for the mind. They'd be new media. We could use to think with and a lot of their best ideas I think out there, there's still this kind of vision for the future. And if you look particularly at some of Alan Kay's talks, there's still a lot of interesting ideas there. DAVID: That the perspective is worth 80 IQ points. That's still true. MICHAEL: For example, the best way to predict the future is to invent it, right? He's actually, he's got a real gift for coming up with piddly little things, but there's also quite deep ideas. They're not two-year projects or five-year projects, they're thousand year projects or an entire civilization. And we're just getting started on them. I think that's true. Actually. It's in general, maybe that's an interesting variation question, which is, you know, what are the thousand year projects? A friend of mine, Cal Schroeder, who's a science fiction writer, has this term, The Project, which he uses to organize some of his thinking about science fictional civilizations. So The Project is whatever a civilization is currently doing, which possibly no member of the civilization is even aware of. So you might ask the question, what was the project for our planet in the 20th century? I think one plausible answer might be, for example, it was actually eliminating infectious diseases. You think about things like polio and smallpox and so many of these diseases were huge things at the start of the 20th century and they become much, much smaller by the end of the 20th century. Obviously AIDS is this terrible disease, but in fact, by historical comparison, even something like the Spanish flu, it's actually relatively small. I think it's several hundred million people it may have killed. Maybe that was actually the project for human civilization in the 20th century. I think it's interesting to think about those kinds of questions and sort of the, you know, where are the people who are sort of most connected to those? So I certainly think Doug Engelbart and Alan Kay. DAVID: Talk about Doug Engelbart, I know nothing about him. MICHAEL: So Engelbart is the person who I think more than anybody invented modern computing. He did this famous demo in 1968, 1969. It's often called the mother of all demos, in front of an audience of a thousand people I believe. Quite a while since I've watched it and it demonstrates a windowing system and what looks like a modern word processor, but it's not just a word processor. They're actually hooked up remotely to a person in another location and they're actually collaborating in real time. And it's the first public showing I believe of the mouse and of all these different sorts of ideas. And you look at other images of computers at the time and they're these giant machines with tapes and whatever. And here's this vision that looks a lot more like sort of Microsoft Windows and a than anything else. And it's got all these things like real-time collaboration between people in different locations that we really didn't have at scale until relatively recently. And he lays out a huge fraction of these ideas in 1962 in a paper he wrote then. But that paper is another one of these huge things. He's asking questions that you don't answer over two years or five years. You answer over a thousand years. I think it's Augmenting Human Intellect is the title of that paper. So he's certainly somebody else that I think is a very interesting thinker. There's something really interesting about the ability to ask an enormous question, but then actually to have other questions at every scale. So you know what to do in the next 10 minutes that will move you a little bit towar

Michael: Hello everybody. This is Michael Gross of OptionSellers.com. I’m here with head trader James Cordier. We are here for your monthly May video podcast from OptionSellers.com. James, welcome to the monthly show. James: Thank you, Michael. Can you believe we’re going into May already? Michael: It sure went fast. This last month here we saw some key developments in the markets. We have a lot of tensions between China and the U.S. over trade, and then we’re, lately, looking at 10-year treasuries going over 3%. A lot of people are wondering how this may affect commodities. What’s your take on that? James: Well, the trade wars that are supposedly about to take place, I think, are simply negotiation. President Trump mentioned many times going into the election that he was going to do “the art of the deal” and get us some more fair playing field, especially with China. Certainly the deficit that many goes out to China and doesn’t come back is something that he’s going to work on and, I believe, it’s more negotiating than it’s actually going to be major changes, as far as trade tariffs and such. Will some be put in place and some enacted? Probably so, but I know Mr. Mnuchin is going to China I believe in the next week or two, and he’s going to have probably the checkbook ready so he can basically get an olive branch going out. Needless to say, everybody wants a strong economic global growth and a trade war is not going to help that; however, getting a more fair and balanced trade, especially with China, I think is a really good idea and I think that’s what we’re going to get over the next month or two. All the discussion about it, I think, is going to be more of just that: just discussion. Michael: So, you don’t see any major changes in any commodities in the immediate term? Any immediate strategies people should be doing right now or as a result of that or, primarily, do you just see things leveling out here? James: Michael, the discussion of a trade war, like in soybeans or something that’s going to affect the demand for oil, I think a person or an investor should use that to look at the idea that it’s going to be settled. It’s not going to be a large disruption to production or demand in any of these commodities. When the price of a commodity is affected by discussion of it, I think you should take advantage of that. 3-6 months later, the fundamentals that we see now are going to be in place then, and basically it was hype that was going on and I think it’s going to offer opportunities. For markets that you’re following, if there’s trade discussion that’s going to move up or down the market that you were hoping to sell either puts or calls on, I think that’s going to be great picking in order to do that. Michael: Okay. Well, for those of you watching, we have an exciting show for you ahead this month. We’re going to be addressing a very common question we get. A lot of times, people sell an option, they get into the trade, the option moves a little bit against them, and then the question is “Well, what do I do now? Do I adjust the trade? Do I get out of it? If so, where do I get out of it?” What we’re going to do this month is we’re actually going to take you into some of our real trades we are doing in portfolios. Some of these, you’ve probably seen us talk about before. Pull back the curtain a little bit and show you a risk-parameter we might use and then recommend something you can use at home, as well, if you’re trading on your own or just get a little bit better insight into how we might do it professionally. A good analogy, and, James, I know you can comment on this, is we all saw the incident with Southwest Airlines this month where they had the problem with the engine. Certainly a tragedy for the people involved that it effected; however, one thing that really stuck out to me is the pilots that landed that plane and saved all those people. Have you heard the transcripts? They’re just cool as a cucumber. They knew exactly what to do, they had processes in place for every situation or condition, and you pilots out there that are clients, you know exactly what I’m talking about. When people are trading, and you know this more than anyone, James, you should have a contingency. Anything that happens, you should have a plan for that happening and have that type of control. That’s how you avoid that “what should I do” when you get into certain situations. When you’re trading, you deal with the same thing, James, am I right? James: I certainly do, nothing like that pilot was facing this past week, but in a similar note, you do have a plan. We are generally positioned in anywhere from 8-10 commodities and when one is causing the plane or the bow to veer right or veer left you simply need to make the adjustment. It shouldn’t be a huge deal to your portfolio. You should really be able to make a minor adjustment. If you’re in 10 commodities and 1 is going really in a direction you weren’t thinking, you should have a plan for that. It shouldn’t be a panic. It shouldn’t be large turns like this. You should just be turning the wheel like this and we’ve got an adjustment that needs to be made, the cocoa market or the coffee market or the silver market, and you just steer the plane and get it flying level again. Your portfolio, whether you’re having a portfolio with us or you’re investing with one on your own, you should never have a position that makes that much variance to your account. If you have 1 position in your account, name the commodity- it doesn’t really matter, and if it moves 5-10% in a short period of time, if that makes your account move larger than it really should be, it shouldn’t have a large variance because the market moved 5% or 10%. If it is doing that, you’re simply not positioned correctly. Always have in your portfolio 8-10 commodities and if 1 is making the plane go like this then you just pull it back like that. You should never have a position on your account that you can’t, in order to make the plane fly smoothly again, if you would. It happens all the time. We’re not right all the time. We’ll have 8-10 commodities in a portfolio and by-goodness, 1 is going to be causing this to happen and you just straighten the plane. Just like that brave pilot did, he knew exactly what to do. My goodness, 1 engine went out and he was able to do that. We have 10 engines on our plane. We should never have one commodity or another commodity make the plane go like this. It really shouldn’t happen. For your investors at home, if that’s happening to your portfolio you don’t have a diversified portfolio, and that is something that we at OptionSellers.com always strive to have so that when something happens that was unexpected, there’s a big headline in a certain commodity, you just straighten the plane and that’s what we do. Michael: That’s what we’re going to talk about today. If you’re trading at home or you’re checking out this strategy, one of the biggest advantages you have as an option seller is that flexibility James was talking about where if you’re trading, and say you are worried about a Chinese trade war or this or that, you have the ability to build out a strategy that can benefit from nearly any type of economic condition. It’s one you should use if you’re an option seller. We’re going to address and use a specific example this month from a market we talked about. We’ll show you how to adjust a trade if you do get into those type of situations where it’s not working exactly the way you hoped it would, and we’re going to give you a couple examples here of how to do just that. James, why don’t we move into the trading room and we’ll talk about our markets this month. James: Sounds good. Michael: Welcome to the markets segment of the OptionSellers.com May Podcast. We are going to talk about a market this month that we featured in last month’s podcast and that we’ve got a lot of questions on over the past month so we’re going to talk a little bit about it. This does go into the topic of this month’s podcast, which is how to turn a losing trade into a winning trade. So, first let’s talk about the market… this is the cocoa market. You saw us feature this market in last month’s podcast. Cocoa we talked about selling the 32 December call options. The markets rallied a little bit since then, did not threaten a strike, but it’s up a little bit. James, do you want to tell us what’s going on with this trade and this market? James: Michael, what’s going on with cocoa right now is the last several years we’ve had a production surplus worldwide. In 2018 and 2019, some of the largest cocoa analysis around the country is predicting the first deficit in quite some time for world production. Basically, high prices cure high prices and low prices cure low prices. The initial trade is that we’re going to have a production deficit this coming year and then the market must go much higher because we’re running out of cocoa, but in all actuality what happens when the price of something is rising that is dampening down demand. So, for example, when cocoa was trading around $2,000 and $2,100 a ton, chocolate manufacturers were purchasing cocoa. As it rallies, they purchase less and less and less, and the demand has already taken place. So, when we do get an announcement of a production deficit, that usually gets the last of the buyers, the headline traders, to get involved with the market. We saw a spike here recently in the last day or two where cocoa was threatening $2,900 a ton. Keep in mind that’s up almost 50% in price over the last few months. Basically what that does is commercial demand then starts to fall and then basically it’s a speculatively driven market. Usually a market that has moved 50%, we have just a couple percent difference in production, 2-3 years ago up until now, and yet we’ve had a 50% increase in price; thus, we think that’s a temporary move in the market. While we were suggesting selling the $3,200 calls last month, the market did not get anywhere near that level but, as some of the viewers and readers have mentioned, the price of those options are up slightly from, maybe, when we discussed selling them. Michael: Sure. I think that goes back to a good point is, we always say this, we don’t know where the top or bottom of a market’s going to be. That’s why we are selling options in the first place. We’re not trying to pick that anymore. You don’t have to pick that either as an option seller. It’s an important point to make as an option seller… you’re not trying to call the market, you’re just picking a window where you think prices should remain and then selling options outside that range. James: Exactly right. Fundamentally, the price of cocoa over the next 3-6 months should be at this level. The price of coffee or crude oil based on fundamentals will be at a certain level, as well. Basically, you’re selling option premium that puts you out-of-the-money sometimes 40-50-60%, and some 8 times out of 10, that leeway is all you’ll ever need. As a matter of fact, anyone listening to us right now and, of course, our clients are long-term investors. So, if you are, like we discussed just recently, you are flying a plane and you want it to have several engines, okay? Your portfolio should have several commodities; however, when one does exceed a level that you thought it would, you can roll up your position. For example, each day that cocoa gets more and more expensive, the likelihood of it staying above its fundamental value diminishes. So, if you did short cocoa prices at, for example, $3,200 a ton by selling the $3,200 call, you may choose to roll it up to the $3,400 or the $3,500 if in fact it’s something that if you want to stay with the market or you want to stay with your position, but speculatively the market is driven higher than we thought it would do. That is certainly one approach that we often take and someone who maybe has that position on right now might want to take that, as well. Michael: So, what you’ve just explained is how to turn a losing trade into a winning trade, the title of our podcast here today. Let’s go back and just explore that briefly. When we talked about selling the call here, we talked about selling it and we were right about here, now the market has rallied a little bit. As you said earlier, it really hasn’t threatened the original strike. In fact, I don’t even think the original premium has doubled yet. James: No, they hadn’t. Michael: Yet, we got a handful of people writing, “Ah, I sold a cocoa call. What do I do now?” Well, there’s 2 points to that. One, we’re not really an advisory service, we are managed fund here, so we can’t really instruct you all the way through the trade. The bigger point here is when we went back to the beginning of the podcast that James just referred to, we talk about the pilot steering the plane. If you’re putting a trade like this on, you better have a plan for what you’re going to do for when you go into that trade if it doesn’t move the way you think. Now, the movement in cocoa right now, it hasn’t really been extreme, it is pressuring the strike price a little bit. James feels it’s still fundamentally justified trade, but if you’re getting uncomfortable or it keeps rallying or starts pressuring that, he’s talking about rolling the positions up. James, do you want to explain the mechanics of that if you were, or if somebody was holding a 32 call what they would do to recapture that premium? James: Okay, so let’s say you sold 10 contracts of the 3,200 December call strike and the price is now exceeding your risk tolerance. Let’s say you sold them for $500 or $600. Let’s say you have the 100% rule for your portfolio, so the option has now doubled to approximately $1,000-$1,200. Now what I would do, if you were considering staying with a fundamental trade, which I think cocoa will probably be in the high 20’s at the end of the year and nowhere near 3,200; however, you buy back your $3,200 call and you can sell 20 now of the $3,400-$3,500 call. Eventually, the fundamental factors are going to slow this market down and we think that come November, when the December contracts expire, we’ll probably be in the high 20’s… like 2,800-2,900 at the most. So, if we do exceed 3,000 for a brief period, I would use that certainly as an option selling opportunity in cocoa calls. 3,400-3,500, I think, the market will not exceed that level in our opinion. We’ll have to wait and find out, but come November I think the market will be much below that. Michael: So, you’re doubling up on those strikes. So, you sold 10 and then when you roll you’re selling 20. That allows you to, one, get back your original premium, but it also allows you to recover the loss. James: That’s exactly right. Keep in mind as we discuss this, we always want to be in 8-10 commodities. We are selling options sometimes 40%, 50%, 60% out-of-the-money. You can’t, or you probably don’t want to, base your entire investment and the viability of this type of investment for you based on the idea that you sold 10 contracts of cocoa. Okay? We are selling commodity options in approximately 8-10 different sectors and, over the long-term, selling options 40%, 50%, 60% out-of-the-money is going to work out quite well, but, by all means, we stub our toe. We get kicked in the shin once in a while, but if you’re a long-term investor, and everyone should be, whether you’re long stocks or the real estate market or you’re selling options as an investment portfolio, you just know that 1 or 2 may not go your way and you definitely need to manage your portfolio. This is one way to do it. Another idea is, you know, taking a losing trade. If the investment idea wasn’t correct, we’ll take a look at it again. Let’s see if the market continues to rally, we’ll sell options on another day, or we’ll come and visit cocoa again next year. Have that ability to do that. Michael: That’s an excellent point. If you’re watching some of the things we do and you’re trying to trade just at home online saying “Oh I like that trade. I’ll sell this and see how it goes”, that’s really not how these are meant to go. When we are putting trades on a portfolio, we are putting them on as part of an overall portfolio of, as you said, 6, 8, 10 different positions. Sometimes they’re hedged on the other side of the market, sometimes they’re balanced by a long or short position somewhere else. So, these are incorporated into a much bigger scheme. If you’re just taking them and you’re really selling them out of context, so if something like this does move against you it’s a big deal for your portfolio, where for us is just like the captain of the plane. It’s a flip of a switch, just something different you need to do to adjust the position. James: Exactly, Michael. You should always be able to have both hands on the wheel and just make small adjustments. If you sold cocoa calls recently, your positioning should only be going like this and you shouldn’t be turning the wheel like this. If you’re doing that with your portfolio, you’re not doing it right. Michael: And as we talked about earlier for managed clients, we are going to be taking a closer look at this market this month. It is starting to get interesting and maybe look to see what we can do there in the coming weeks here. Let’s talk about another market here for our second part of the podcast this month. That will be the crude oil market. If you want a market that has been in the news lately, one that has been in the headlines has been the crude oil market. We’ve been closing in on the $70 mark for the first time in 2014. It’s been one of the strongest commodities on the board since last fall. James, you want to tell us what’s going on here? What’s behind this rally? What’s been pushing prices higher? James: Michael, Saudi Arabia has done just an incredible job leading the OPEC nations, as well as Russian production. Someone sat down with members of OPEC and said, “Listen. We cut production by 2-3%, we’re looking at the possibility of a 20%, 30%, or 40% gain in crude oil prices.” Lo and behold, that math sounded good to the OPEC producers, they did start cutting production, not a great deal, just a couple percent. Basically, we were looking at a 300-400 million barrel of surplus floating around the world, both in tankers and at storage facilities in some of the OPEC nations. After some 18 months of oil production cuts by OPEC and along with Russia, that 300-400 million barrel surplus is down to some 30 or 40 million barrels… just a huge gain for OPEC. Their ability to cut production has just paid off in spades. We have approximately 35-40% increase in oil prices. OPEC is very cohesive right now, something that a lot of analysts are quite surprised at and we are surprised at it, as well. The ability to keep that production offline when prices are going up, my hats off to OPEC, they’ve done a very nice job in order to do this. The market is now balanced. Basically, for every barrel that is being produced there is a consumer right now. We have a very balanced market and, as you can see, it’s up some $20-$25 from where we were just not that long ago. Michael: Yeah, compliance has been surprising, too. I read somewhere that they’re at like 138% compliance. Before, they used to have trouble even getting half the members to hit their quotas, now they’re above 100%. James: Someone did the math for the OPEC producers and said a small 2-3% cut can possibly increase the prices 20-30%. They nailed it. Here are the final results. Michael: As you mentioned, that’s taking quite a bit of oil off the market. OPEC production down 11.4% since these started in January 2017. So, that’s a pretty good drawdown. That’s really, what James is saying, is behind this rally right now. That and we have a pretty good seasonal in effect that’s helping drive prices now, as well. James: Basically, as we get into driving season in the U.S., the largest consumer of oil and gasoline in the world, you have a ramp-up of production where you’re cracking oil into gasoline and, generally, that happens between the months of March, April, and May getting ready for summer driving season. So, that cracking of oil takes oil production and supply off the market, turns it into gasoline, so you have, once again, a temporary shortage of oil as not only OPEC taking barrels off the market but also you have the largest refining season coming up going into driving times of June, July, and August here in the United States. This takes barrels of oil off the market, they are cracked into gasoline, and that’s why you usually have this seasonal rally going into May and June. Michael: Which seems to be following it very closely this year, the seasonal tendency. Now, one thing we’re seeing this year, and you and I were talking about this earlier, is refineries are operating at a torrid pace right now. They’re really hitting it pretty hard as far as production goes. Right now, gasoline production running about 4.2% ahead of pace for where it normally is. So, you’re thinking that they may hit those levels earlier this year and we may see a topping action in crude a little bit earlier this year? James: You know, consumption for gasoline in the United States peaks in June and July right around the 4th of July, or so it seems, but the price of crude oil will often top before then. Crude oil is clearly where gasoline comes from, and as those barrels come offline, in other words, they’re cracked into gasoline, the price of oil will often top before gasoline does. So, the demand is still there but it has already been produced. So, while the greatest demand in the United States is around the middle of the summer holidays, the demand for oil to produce that gasoline has already taken place and thus the seasonal comes down sooner than you would think. Michael: Sure, and this chart’s showing you can see a top in crude any time between mid-May to early-July, as you said; however, if refineries are hitting those levels where they deem supply adequate, they’re going to cut back production sooner and that will hurt demand for crude. James: And then the crude barrels start to accumulate more. Michael: Okay. So, we have that and then also, on the other side of the coin, what we have coming up or what’s even surprised OPEC is the level at which the United States has been able to ramp up production. They’re taking advantage of these higher prices and you referred to high prices carrying high prices earlier. We’re seeing U.S. production just blowing up, going up about 10.5 million barrels a day. Is this having an affect right now on the supply? James: Well, basically it’s balancing… the additional barrels coming from the United States is balancing what OPEC’s not producing. The fact that production in the United States is going to probably exceed 11 million barrels a day coming up in 2019 and 2020. We do see this plateauing and the excitement in oil right now is probably going to be rolling over. If the United States wasn’t the largest consumer, let’s say all these barrels were being produced on the opposite side of the globe, getting them to the United States would be difficult and then maybe the largest producer, now the United States, wouldn’t be such a big deal, but the fact that we’re producing it exactly where we need it, here in the United States, that will offset some of the global demand and price shock around the world. Everyone always talked about, “The United States is susceptible to what OPEC does”… well, we’re producing all the oil we need now, so the fact that oil is approaching $70 and here in the United States we can produce it for between $35-$45, how long is it going to stay above $70? It can only exceed it by a certain amount of dollars per barrel and for a certain period of time. If this level gets to 11 million barrels a day or 11.5 million barrels a day, oil will be coming back down into the low-mid 60’s at the very least, and probably setting up a sale here that’s looking like in May or June for option sellers. Michael: Okay. So, your outlook for the intermediate turn, obviously we talked earlier and we’re not trying to predict what prices are going to do, only what they’re not going to do, but do you see a little more strength coming in and then weakening, or what’s just the general outlook for that window? James: What’s so interesting right now is in some global economies, especially throughout Europe, they are going to feel this large gain in the price of oil. Japan is going to start feeling this large gain in the price of oil. Basically, they are 100% consumers and produce nothing, so oil going from $45 up to $70 will start slowing demand from these major consuming nations. At the same time, when the United States is now producing the most they ever have and now the largest producer in the world, we see oil kind of plateauing here this summer right around maybe June or July, but not falling a whole lot. The fact that we had a 400 million barrel world surplus and it’s not approximately 40 million barrels, the market’s extremely well balanced right now. So, we see some of the excitement that’s going on now in crude oil plateauing somewhat, maybe coming down some $3-$5, but not falling through the floor by any means. Oil production right now is down with OPEC. They have been rewarded for keeping barrels off the market, and I don’t think they’re going to forget that any time soon. I don’t see them going back and ramping up production. They’ve been rewarded so well, they’ve learned a great lesson by keeping, at first, some 3% oil barrels off the market, now it’s up to some 9%, 10%, or 11% of barrels off the market. They’ve learned a great lesson and they’re being rewarded for it, so we don’t see production swamping this market. We see oil possibly trading at about a $10 trading range from where it is now throughout the end of the year. Michael: All that media coverage and, of course, the price rally has increased the volatility, which is what we like to see as option sellers. Taking a look at a trading strategy, how to trade that exact scenario you just described, you’re looking at one of your favorite strategies, a strangle. James: It certainly is. You discussed, just now, headlines and OPEC and trade wars with China and the value of a dollar. All of this really has the volatility of petroleum, especially crude oil, at record levels that I haven’t seen almost since I’ve been investing in commodities, but right now you have put premium extremely high, even with a bullish fundamentals, and you have call premium through the roof right now. My favorite position in crude oil for the rest of the year is practically a $45-$50 strangle around the price of oil. So, in other words, we would be selling calls at the $90 level and selling puts at the $45 level. We think that the idea that strong fundamentals right now will keep the market from falling, but yet the fact that prices are high right now and that’s going to start curtailing demand. My prediction for the rest of the year is about a $10-$12 trade range for crude oil and here we have one of the best opportunities I’ve seen to position in crude oil in a long time. That’s putting a $45-$50 strangle around oil. We’re not right all the time and every once in a while we don’t get it right, but for oil to stay between 45 and 90 through the end of the year, I think, is an incredibly high probability position and that’s something that we’re taking advantage of, as you know, Michael, right now. Michael: You couldn’t do that a year ago. You didn’t get that wide of window, and now we have it, it’s on the table, and you want to take it. James: Michael, that volatility is your friend. I know when it first happens and you already have positions on, “Oh, it’s too volatile for us”… that’s what you like. A year ago, 2 years ago, 3 years ago, the widest strangle you would write on crude oil was approximately $15-$20 and now you’re writing a $45 strangle. We, as well, are going out slightly further in writing and $50 strangle around crude oil. We’re pretty confident it’s going to stay inside that window. We’ll have to wait and see. Michael: And again, watching this at home, this is an example. We are not recommending this to you personally as the perfect trade. In our portfolios, we are diversified over December, January, February, and March. Different strategies and different risk management techniques, but in going out to a month like February, a lot of people think that’s a long time out. We’re about 9 months out, but your plan isn’t to necessarily hold these until February or March or whatever you’re writing out there. Often times, with the right decay, you can be getting out of these a few months early. James: Michael, as we discuss with our clients when they first become clients, we will sell options 6 months, 9 months, 12 months out into the future, but not with the idea that we’re going to stay into that position until the very last day and try and collect the very last dollar. It’s really not important to do that. If we select options fairly well, for example, on the position that we’re looking at right here, after maybe let’s say you sell options 9 months out, if you selected them fairly well, 5-6 months later you should have collected about 85-90% of the potential premium. That is a great place to ring the register and lower your risk and be happy with the position and get out of the trade and buy it back early. Often, we look at February or March or April when we’re talking about selling options. Basically, you’re Tom Brady and you’re throwing it to where the market is not going to be. That is what we’re doing. So, when Michael discusses layering different months and different commodities that’s what we’re doing. To own a portfolio like that, it looks like a great deal of layering in the market and that is what it is and it allows you to have 10 engines on your plane so that when one goes a little bit awry you have other positions to make sure that 80% of your portfolio is going the right direction. This is a great example of doing that. Michael: Great advice. If you would like to read more about the crude oil market, what we’re recommending there this month, or going into our managed portfolios, you will want to read this month’s newsletter… that’s the May edition of the OptionSellers Newsletter. That comes out May 1st. It should be in your e-mail box or showing up in your hard copy mailbox a couple days after that. Of course, if you want to learn more about the strategies we discussed here or the rolling or strangle or some of the other concepts James mentioned, if you don’t have it yet, The Complete Guide to Option Selling: Third Edition, you can get it on our website at a discount, on Amazon, or the bookstore. The link to that is www.OptionSellers.com/book. Let’s move into our closing section for this month. Michael: Thank you for watching this month’s edition of OptionSellers TV. James, thank you for those insights on the cocoa and the oil markets. You have any predictions for the upcoming month? James: The month of May 2018, Michael, I think is going to be the realization that the U.S. dollar is not the weakest currency in the world. The U.S. is looking at probably 2 or 3 rate hikes this year. The U.S. economy is still doing quite well and its counterparts, especially in Europe, the economies in Germany, Italy, France, and England have been doing pretty well over the last 12-18 months, but the expansion in countries like Germany especially, the major driver of the European economy, is showing signs that it may be peaking already. Consumer Confidence in Germany is down, a lot of the sales in Germany is down right now, and not that it’s going into recession, if it does that would be the shortest-lived recovery ever, now don’t see that happening, but the U.S. economy still is on this footing and the European economy is fluttering already. That is going to make the U.S. dollar more buoyant than a lot of investors thought it would be and that is going to stabilize a lot of the commodities. So, getting into short options right now, whether it be puts or calls on precious metals, energies especially, and some of the foods, I think it will be a great calming effect in the 3rd or 4th quarter of this year. So, any discussion about the U.S. dollar isn’t doing so good, any discussion about inflation, I would fade those ideas and sell options on those ideas and, I think, later on this year you’ll be well rewarded. Michael: Sounds like a good outlook. We’ll have to keep an eye out for that. Also, May is a very active month in the grain markets. We have corn and soybean plantings going on here in the United States, so that can often create opportunities there, as well, for option sellers, sometimes on both sides of the market. James: Practically every year we have large influx of volatility in corn, wheat, and soybeans and we are ready and waiting for that to happen. Michael: Excellent. For those of you interested in finding out more about managed option selling portfolios with OptionSellers.com, you can call to request a consultation. At this point, we are booked out through July for our upcoming consultations; however, I believe we still have some spots left for consultations in June for those July account openings. I believe I misspoke there. The consultations are open in June, the account openings are for July. So, if you are interested in those upcoming openings, feel free to give our office a call here and speak with Rosemary. The number is 800-346-1949. If you’re calling from overseas, the number is 813-472-5760. James, again thank you for your insights this month. James: My pleasure, Michael. It’s always great to give our wisdoms and our insight. We’re not right all the time, but I do like the landscape for selling options here in May and June. Michael: Perfect. We’ll look forward to the month of May and we’ll talk to all of you again in 30 days. Thank you.

Michael: Hello everyone. This is Michael Gross of OptionSellers.com here with head trader James Cordier here for your April Option Sellers Video Podcast. Well, James, we didn’t see any abatement in the volatility in the stock market this month. In fact, Fed chairman Jerome Powell last week coming out, maybe spooking investors, talking about asset prices and maybe even financial markets being overvalued here… a little ghost of 2007. What do you think is going on here? James: Michael, it’s interesting... for the first time since quantitative easing was first announced practically a decade ago, investors and money managers now actually will have an option of not just pouring money into long stocks but fixed income is going to now be some of the talk. The tenure is approaching 3%. With what Jerome Powell said this past week, we will be reaching 3%, possibly 3.25 and 3.5 coming up over the next 6-12 months. With that in place, does the stock market have now still a free ride to the upside? Investors are going to be putting some of their money into fixed income and for the first time in practically a decade there’s an alternative from just being long the stock market. Michael: Obviously at this point, a lot of investors, especially high net-worth investors, are always looking to diversify into alternative asset classes. Physical commodities as hard assets always seem to have an appeal in any type of environment really but especially in this type where you have a lot of the jitters about paper assets. James: There’s probably more jitters now than I can think of over the last decade. As you know, we have investors contacting us on a daily basis, I think, just for that reason. Investors wanting to diversify right now from the stock market, I think, is hitting a really great stride right now. Wanting to get into markets that are uncorrelated to what the DOW does and what the S&P does is not only really popular right now but a lot of the real investors, you know, the people with millions of dollars under management, they are looking for alternatives now and I think they’re going to find some, not only in yield bearing accounts like fixed income but certainly in commodities like what we do, as well. Michael: Of course, we are in springtime now in the commodities markets. That means there’s a lot of things that happen in a lot of the physical commodities in the springtime, especially the agriculture markets and energy markets. We have some great seasonal tendencies, as well, in the spring. James: We do. Needless to say, a lot of people look at commodities and they think about the weather. Over the next 90 days the weather will be a really big factor. Quite often, end users for soybeans, corn, and wheat, they need to get insurance and make sure that they’re going to have these products for what they do and basically for animal feed. Of course in the United States, the largest producer of corn and soybeans, the weather is key. Often, they build in a certain premium during the months of May, June, and July just in case the farmers in the United States don’t do exactly what they would have hoped each year. Of course, later on in the year, once again the U.S. farmers are the best in the world and the spring rallies that often happen normally are just great sales for doing what we do. Michael: Speaking of those rallies or markets, we have a couple we’re going to feature this month that are maybe a little ahead of themselves. Now we have some of that inflated call premium. If you are one of those investors, it’s just learning how to sell options or learning how to sell options on commodities, these are two markets we think are really going to help you... Good opportunities, actually markets we are taking advantage of now in our management portfolios. We are going to cover those for you here in just a minute. Thank you. Michael: Okay everyone, we are back with our Market Segment for this month’s podcast. The first market we’re going to discuss this month is the soybean market. Soybeans have been in a strong rally the past couple of months primarily as a result of some things going on down in South America. James, do you want to talk a little bit about that and what’s driving prices right now? James: Michael, corn, soybeans, and wheat are all about the weather. The third largest producer in the world is Argentina. They’ve had a very dry growing season this year. For that reason, they do have reduced yields and we’re going to have a little bit of tightness out of that South American country. They are the third largest producer in the world and basically the U.S. weather is normally the big catalyst for the market moving up or down. This year, Argentina, which of course they have the opposite season here in the United States, their summers/our winter of course, and while there’s not much to talk about in the United States, traders look elsewhere. In South America, especially in Argentina, they had a really dry season. For that reason, the soybean prices have been bumping up to nearly 12-month highs over the last couple weeks. Michael: Yeah, we have seen some reduced yield expectations right now. We were at 60 million metric tons out of Argentina just a couple of years ago, now we are hearing it might be down as low as 40 million… it’s not reflected yet here. I guess that has been driving prices substantially higher, but we’re nearing the end of that growing season there now, aren’t we? James: We really are. Quite often, traders and investors will price on the worst-case scenario, so then once the corn and soybeans are actually harvested, often the weather wasn’t as bad as people thought and then the market readjusts to the current level of the production it actually turns out to be. Michael: So what you’re saying is although we’ve had some problems out of Argentina, they do about 50% of the production done in the U.S. or Brazil. From what I’m hearing, they’re thinking that production out of Brazil may make up some of those losses out of Argentina already. Is that correct? James: Unlike Argentina, just to the south of Brazil, Brazil has had just wonderful growing conditions for cocoa, coffee, soybeans, orange juice, sugar. Brazil is just a wonderful garden right now for growing soybeans. I think the Brazilian harvest will be larger than expected and that will make up probably a quarter and a half of what we’re going to be losing out of Argentina this year. Michael: Of course, as South American harvest is under way, we get started with planting here in the United States. The market probably starts focusing on what’s going on with the U.S. crop here pretty soon. If they do, the United States has some pretty big supplies heading into the planting season this year. James: We’re certainly going to have harvest pressure probably starting September-October of this year, and the Argentinean drought it probably going to be a forgone memory at that point. Supplies are going to be more than plentiful in the United States, and of course the U.S. is going to be the supplier to the world because of our ending stocks here in the United States, which is something I know we want to talk about as well. Michael: Starting off the year, we have the second highest ending stocks in the last 30 years and the highest in over a decade, so we’re already starting off the year with big supply. Now, the planting intentions, which we’ll know more for sure the 29th of March when that report comes out, but right now estimates are we’re going to have at least as many acres planted as last year, 90 million with estimates now at 90-92 million, so if we even have average yields we could be looking at all-time record ending stocks for next year. Like you said, that harvest pressure coming in… if they’re harvesting that size of a crop you’ll get some pretty substantial harvest pressure. So, the trade you’re recommending here right now, you’re thinking that this rally is probably going to fizzle and we’re going to see steadier lower prices. What are you looking at to trade here? James: Michael, we think that come October-November, soybean prices will probably be below $10 a bushel. We’re trading around $10.40-$10.50 right now. Basically, on the dry conditions in Argentina, we’re thinking that soybeans have a little bit of a chance to rally another 20-30 cents. They could get to the mid-upper dollar region. We love the idea of selling soybeans at the $13 level, so we’re going to be recommending soybean calls at $13 and $13.25 thinking that while soybeans might have a big of a rally going into May and June, we love the idea of being short in fall. So kind of like football, we’re not exactly throwing the ball to where we think the market is right now, but we’re selling options to where we think the runner’s going to be, and the runner being a huge harvest in the United States come September and October. $13 level for soybeans, you’ve got to bet on something, and boy we don’t see that happening nowhere being near that price. Michael: Yeah, that’s a pretty big cushion there to be wrong. The USDA itself has average on-farm price this year at $9.25, which is down here. So, that seems like a pretty safe bet. Let’s go ahead and move on to our next market right now, and that would be the cocoa market. Michael: James, cocoa is another one of these markets that has had a pretty good run here over the last several weeks. What’s going on here with prices? James: You know, similar to soybeans that we just talked about, one of the main producers of cocoa is the Ivory Coast. They are the largest producer in the world. They’ve had dry conditions this past year and, while those dry conditions certainly will reduce some of the pods yielding this year, we have what’s estimated to be 2% less cocoa being produced worldwide in 2018; however, a 2% drop in production has now caused and created a 30% increase in price. The balance doesn’t quite weigh out but we do have speculators buying, we have commercials buying on the idea that the Ivory Coast crop is going to be smaller, and it is certainly trading above what we think is going to be fair value in price later this year, probably be a couple hundred dollars a ton. Michael: So, while this west African crop got hit somewhat, you’re saying global production is probably going to make up for a lot of that? James: It is. A lot is always made at the Ivory Coast because they are the largest producer. Sometimes they have political turmoil. Sometimes they have the weather that’s not quite right. 2018 and 2019 there’s supposed to be a world production surplus for cocoa. So, all this discussion about the Ivory Coast being too dry is eventually going to take the back seat to the fact that the world does have enough cocoa. It’s not as tight in supply as a lot of people think. Rallying from $2,100-$2,200 a ton all the way up to $2,600 a ton, we think that the rally is overblown and probably, starting in August and September, we’re going to be quite a bit lower than where we are right now. Michael: There’s the numbers you were talking about. That’s the latest from the ICO (International Cocoa Organization) and it’s showing only 2.3%, so that’s a pretty good rally for the bigger picture short fall. James: It’s interesting. Commodities do have a reputation for overshooting on the downside and overshooting on the upside, and I think cocoa is a prime example of that here in 2018. Let’s say the cocoa production falls off 2.5-3%... we’ve had a nearly 30% increase in price and I think things will come into equilibrium the 3rd and 4th quarter of this year. Michael: So, how do you recommend that option sellers at home take advantage of this? James: You know, like we’re looking at on the chart here, $3,000 a ton, $3,100 a ton, yet a large leap above where we are right now, those options right now are fetching $500, $600, $700 each. We think those are a great sale. The market, needless to say, is still in an uptrend. It could still go slightly higher, but as harvest around the world starts taking place we will have harvest pressure again and a lot of the commercial and speculative buying will probably back off. We expect cocoa to probably be around $2,300-$2,400 later this year. If we’re short from $3,100 by selling those calls at $3,000 and higher, we think that’s going to be a really good way to position in this market. Michael: Yeah, especially I see the speed this moved up… probably really goosed those option premiums up there. Maybe just like the market, they’re probably overpriced too now at this point. James: Michael, it’s interesting. As you know, we follow 10 commodities. We don’t trade all 10 all the time. Cocoa is on our radar screen. It is one of the markets we follow extremely closely. When you have extremes in this market, cocoa is an absolute necessity to many households and many consumers around the world. Cocoa is not so much an exotic. It is a market that everyone is in touch with and the fact that we’ve had that large increase in a very short period of time, those options now open up to large premium and, we think, we’re going to be taking advantage of those in a very good way over the next 30 days. Michael: I know for me chocolate is a necessity, so I know how those people feel. Okay, let’s go ahead and move into our Q&A session now and answer some of our questions from readers. Michael: We’re back with out Q&A with the Trader section and, James, our first question this month comes from Orson Falck of Manchester, New Hampshire. Orson asks, “Dear James, I noticed when you talk about positioning an account, you say you keep a large cash reserve for your client accounts – fifty percent I believe. Are your published results based on the entire amount in the account, including the non-invested cash, or is it based on the amount you have invested?” James: Orson, that’s a good question. If you’ve been following our materials over the last period of time, we follow 8-10 commodities. We rarely find opportunities in all of them at one time. Therefore, Orson, what we do, for example, we want to keep our margin levels at 50% or lower so that when we do have an opportunity in cocoa or soybeans or coffee positions that we don’t currently hold, we have dry powder in which to take advantage of them. Even when we are fully positioned and we are in 2 energies, 2 metals, 2 foods, and 2 grains, we still don’t raise our margin level to much more than 50%. There’s not a right way or a wrong way to do this. For us, that’s been the sweet spot for margin and leverage. I know how we did last year, I know how our returns were last year, and that was on less than 50% margin. Our client is never going to receive a margin call, we’re never getting shaken out of the market because one market or another market moved a certain level. We like the comfort of that. That allows us to make the yield curve as flat as possible so that we have smaller equity swings in people’s accounts that have invested with us. To answer your second question, the published results last year and years prior is on the total amount of money invested, not just the amount of money that is put up as margin. It is the 100% of exactly what the client invested. Michael: Very good. I get that question a lot. People, especially stock investors, that aren’t used to how those margin fluctuations, they aren’t used to that big cash cushion, and knowing how to use leverage in commodities is really one of the biggest keys to being successful in it. This is how you use leverage properly, by keeping that cushion there. James: Absolutely. There’s no reason to push this type of investment product. I know how we’ve done the last several years, being invested less than 50%, I know what the results were, and I don’t feel the need to really push that envelope. I like the ability to be nimble in the market. If we have something on that we need to add to, we have extra cushion to do that. If a market moves against us slightly it doesn’t really mess up a portfolio to any great extent, and that is why we utilize the 50% rule. We rarely are going to be invested above that. Michael: Let’s go to our second question. Our second question this month comes from Harold W. Corson. Harold is writing in from Monterey, California. Harold asks, “Dear James, Thank you for your outstanding book that introduced me to selling options on commodities contracts. So far, I’ve sold options in oil, gold, and just started out in wheat. So far, so good. I’ve noticed some commodities don’t have much trading volume. How many commodities do you typically recommend trading in an option selling account?” James: The four sectors that we follow are energies, metals, foods, and grains. Generally, we’re watching about 8 or 9. We are often in 5 or 6 of these commodities, as I mentioned in the last question. Rarely are we in all 8 or 9 at a time. I like being in all 4 sectors. We definitely want to be in the grain market, that is the main staples, of course, in the world. Precious metals, energies are extremely high-volume trades. Great liquidity there, very large premiums generally, and in the foods, as well. Basically, volume is going to be mostly in these 8 commodities. We don’t like straying outside of them. Liquidity and volume is very important. Basically, you want to look at the round strikes. For example, if you’re managing your own portfolio and you’re looking at crude oil you’re going to be looking at the $70 strike. Don’t look at the $71. In gold, don’t look at the $1,825 option, look at the $1,800 or the $1,900 option. Easy tricks like that to find the volume in the open interest will help you get in and out of the market if you choose to do this on your own. Michael: Yeah, I mean, it’s a great point you make that, again, going back to stock traders and stock option sellers, they’ve got 2,000 or more stocks they can pick from. We’ve got 10-12 commodities we watched and maybe 6-8 you’re trading at any given time. So, there’s not a big universe there. You focus on the ones with the highest volume. Obviously, there are markets like lumber and aluminum or what have you that there’s really no volume there for option sellers, so you don’t have to bother with them. James: Right. The 8 or 10 that we follow are just absolute staples of life both here in the United States and abroad. They have excellent volume and excellent open interest, for the most part, and that’s where you want to be. The exotics so much, you know, every once in a while there’s an opportunity there, but having liquidity for our clients is of the utmost importance and it should be for you, as well. Michael: A couple resources if you are interested in learning more about selling options on commodities… obviously our book, The Complete Guide to Option Selling. You can get it on our website at a discount to where you’ll get it at the bookstore or Amazon. That link is www.optionsellers.com/book. If you’re not yet a subscriber to our newsletter, you can get a free copy by going to www.optionsellers.com/newsletter and get some of these trades we’ve been talking about and also more answers to option selling questions. That does it for our Q&A section for this month. We’re going to go ahead and move into our final section of the podcast. Michael: Thank you for joining us for the April podcast. We hope you’ve enjoyed what you saw here today. Next month, we’re going into May and we have even more seasonals coming up. James, some of your favorite markets come into some major seasonals next month. James: We will look at an active calendar starting in May, certainly. Soybeans and corn are probably the main feature. We’re selling options and call options during the next 60 days. Of course, cocoa is on our radar screen right now with 2% smaller production and an increase of 30% in the last several months. We’ve got a lot of activity going on in the next May, June, and July it really looks like. Michael: We also have the energy markets coming into play, as well, so there’ll be a lot to talk about next month. We’ll probably continue talking about some of these great seasonals that happen during the spring and how you can take advantage of them here. For those of you that are interested in how the accounts work here or may be interested in becoming a client of OptionSellers.com, we do recommend you get our free Discovery kit. That’s an information pack for investors. It’ll tell you all about our accounts and how you can invest directly with OptionSellers.com in a managed option selling account. If you’d like to get that, the website link is www.optionsellers.com/Discovery. Speaking with Rosie, we do have all our April consultations booked, so there is no further availability for them; however, we do have consultations still available in May. If you’re interested in discussing an account with OptionSellers.com, you can call Rosemary at the main office. That’s 800-346-1949 or Internationally at 813-472-5760. Depending on availability, Rosemary can get you scheduled with a consultation. As a reminder, our minimum account level did go up this month. The minimum account level is now $500,000. James, thanks for all of your insights this month. James: My pleasure, Michael. Always fun and very insightful to help our viewers and listeners out with this. Michael: We’ll talk to you right here in 30 days. Thank you.

Thank you for joining us for our 2nd Cabral HouseCall of the weekend! I’m looking forward to sharing with you some of our community’s questions that have come in over the past few weeks…  Let’s get started! Karin: Hi Dr Cabral, I heard your podcast with Melissa Ambrosini and have since been obsessed with your podcast. You have given me some hope. My issue is ... acne. And I know you see it a lot and have talked about it a lot but I can't really get a clear view of what my cause is and what I need to do. See I live in Australia and can't do your detox, if you know of a similar one in Australia that you would recommend please let me know. My acne started as a teenager, over the years I have gone on roacctune which has helped, but I never ever want to do that again. Horrible drugs. I was diagnosed with PCOS a few years ago. I then changed my lifestyle, eat well and cleaned out a lot of the chemicals and toxins in my house and life. I would say I am on a good path. Through these changes I was able to regulate my period however my skin never cleared. I feel like I have tried it all. 2 years ago I fell pregnant and my skin was amazing throughout breastfeeding. Then when i stopped and my period began again the acne came back. It started as lots of tiny bumps on my forehand and then around my mouth, on my chest and the odd one on my back. I feel like this might give you some insight. A few questions: - Does the location of the acne relate to specific problem areas? E.G- forehand with digestion? Chin with hormones? - I had a jaw operation as a teenager and have 2 screws in my jaw now for life. Would this metal have an effect on me? Not exactly sure what type of metal it is. - If I cant do your detox, how do I clean my blood? Other suggestions or detoxes you can recommend? - From my story can you tell where the problem is coming from? - I saw a naturopath and she advised I am slightly acidic and prescribed an alkalizing drink as well as a vitamin C and zinc supplement (i was also low in zinc). I must say this has helped and I would like to continue with this. - What kind of lab test would you recommend? I will have to look into where I can find them here in Oz. Thank you for your help! There must be an underlying issue, but I am just not sure what to do to find out what it is. Another random question.... we don't really get wild caught salmon here much. What is your take on canned wild caught salmon? Leigh: Hi, I am interested in your hormone testing kit but I live in NSW Australia, is there anyone over here that you could suggest that offers similar testing? Regards Leigh   Panagiota: Hi! I love your podcast !! I have reoccurring cold sores on my lip . I have been using Abreva it helps but I constantly need to use it. I’m looking forward to your advice is hard to deal with it’s very annoying problem. Thank you Panagiota     Kelly: Hello and Happy New Year, Dr. Cabral! On podcast #702, you mentioned you needed someone to reorganize your podcast collection. I would be happy to work for you remotely as I live in Colorado. I listen to multiple Cabral Concept podcasts each day and really find the work you are doing honorable! I am employed 40 hours Sunday-Wednesday, but would be available Thursdays and Fridays to work for you remotely. I use your search function frequently and have ideas on how it could be improved for ease of use. I am currently employed in Medical Records department of a major healthcare (aka Sickcare) system, but just left my previous career in public education after 10 years. I have a B.S. Degree in Psychology and a Masters of Education degree. Please email or call if I could be of service to your organization! Thank you for all you do in disrupting the corrupted healthcare system and helping people get well! I'm currently on day 6 of a 21 day Cabral Detox! Lynn: What are your thoughts on Les Mills Body Pump classes as a 3 days per week full body workout? The classes are full body weighted exercises with a focus on high reps thus requiring lower weight than what I would normally do for weighted execises with 8-10 reps. Michelle: Hi Dr. Cabral, I love your show and am currently attempting to go through the backlog of your shows for information to help my family become healthier, its such an amazing source of information. Thank you for the transparency of information, its such a blessing. I have just received my sons stool results, he's an Autistic 3 yo with a clostridium overgrowth and high fecal inflammation. We are being put on Flagyl. I was wondering if we should also use biocidin once we are off the antibiotic? We are giving him Sacc B while on the antibiotic. We have also found high levels of metals and I was wondering if we should wait to heal his gut before beginning any sort of natural chelation or heavy metal detox. What would be your course of action and timeline for my son? On a side note, Ive bought your detox program but am waiting to hear whether I should wait to begin the program until after I am done breastfeeding. Thank you for all you do for our community. Joshua: Hi Dr. Cabral. I started taking a supplement called restore4life and immediately got violentlly I'll. Extreme pain around my pelvic bone/lower back, side cramps, and flu like symptoms. I took a couple days off, but upon re-introducing it the symptoms returned. Is it possible I'm having a Herx like die-off? I can't decide whether or not I should continue taking this product. Thank you! Josh   Michael: Hey Dr Cabral and staff, My name is Michael and I have been listening to your show just over a year now. Love the information you are providing on all aspects of health. Particularly how you're now adding a lot of Ayurvedic influence into your podcast now. I have recently purchased a couple of Ayurvedic books myself and started adding it to my daily routine and listening to your shows just gives me more insight and perspective on the ancient practice. The reason I am contacting you today is actually pertaining to your CBD oil. I have been working with CBD oil for 3 years now and I have not come across a Supercritical CO2 extracted oil that just contains hemp. Other oils have MCT oil, or coconut oil, sunflower seed oil etc. I'm not against those oils because I know there are benefits to those oils as well, but I am looking to start my own CBD oil company in NV and start selling them to my clients(I have personal trained for 13 years now) and I would like to carry an oil like your in my facility. I would appreciate if you can point me in the right direction on getting started on purchasing oils in bulk. Thank you for your time and dedication to providing top quality information and products. Michael Thank you for tuning into this weekend’s Cabral HouseCalls and be sure to check back tomorrow for our Mindset & Motivation Monday show to get your week started off right! - - - Show Notes & Resources: http://StephenCabral.com/751 - - - Get Your Question Answered: http://StephenCabral.com/askcabral  

Violence and Maternity. Inside and something else. Eric: It’s ok, you’re in a safe place. This is Double Feature. Michael: Is our show fairly traded? Eric: And uh…oh, I remember that. That’s good, that’s a good…Michael: Thank you. Thanks. Eric: … Continue reading →

Elizabeth Harris visits Michael Salmon's studio in Kooyong, Melbourne, and learns from the children's author, illustrator, and entertainer of school children, what 50 years in the arts has taught him about -  Learning to trust your instincts about what early readers find funny. The importance of branching out and diversifying if you want to thrive as an author and illustrator in the long term. How your personality and people skills (or lack thereof) can influence your success in the arts. The pleasure of giving back to the community when you've attained a measure of professional success. How did a beloved children's book make it to the centre page of a newspaper, and its main character become 600 kilos of bronze outside a public library in the nation's capital? What's the connection between Michael, Healthy Harold (the Life Education giraffe that visits schools), and the Alannah and Madeline Foundation? Follow Michael as he travels around Australia visiting Indigenous schools and schools with students of diverse ethnicities, backgrounds, and levels of English fluency. Find out more about Michael Salmon's work at MichaelSalmon.com.au. Notes:Robyn Payne is an award-winning multi-instrumentalist, composer, producer and audio engineer of 25 years’ experience in the album, film, TV and advertising industries. She composed the music for the theme song 'Victoria Dances', which is featured in host Elizabeth Harris' children's book, Chantelle's Wish, available for sale on Elizabeth's website at ElizabethHarris.net.au. The lyrics for 'Victoria Dances' were written by Elizabeth Harris. FULL TRANSCRIPT  Elizabeth:        Welcome to Writers’ Tête-à-Tête with Elizabeth Harris, the global show that connects authors, songwriters and poets with their global audience. So I can continue to bring you high-calibre guests, I invite you to go to iTunes, click Subscribe, leave a review, and share this podcast with your friends. Today I’m delighted to introduce the highly creative and entertaining children’s author and illustrator, Michael Salmon. Michael Salmon has been involved in graphics, children’s literature, TV and theatre since 1967. He started his career with surfing cartoons, and exhibitions of his psychedelic art, and then joined the famous marionette troupe – The Tintookies – as a trainee set designer stage manager in 1968 (the Elizabethan Theatre Trust, Sydney). Since then his work has been solely for young people, both here in Australia and overseas. His many credits include his Alexander Bunyip Show (ABC TV 1978-1988), pantomimes, fabric and merchandise design, toy and board game invention, writing and illustrating of 176 picture story books – which Michael I’m absolutely flabbergasted and astonished and in wonderment at, and everybody’s laughing at that, or maybe he’s laughing at me, I don’t know. (Laughter) I’ll say it again – 176 picture story books for young readers. Several million copies of his titles have been sold worldwide. Michael has been visiting Australian primary schools for over 40 years. His hour-long sessions are interesting, fun, humorous and entertaining, with the focus on students developing their own creativity, which is just fantastic. Suitable for all years, many of these school visits can be seen on Michael’s website, which I will ask you to repeat later. Michael:          Okay. Elizabeth:        Several trips have been up to the Gulf of Carpentaria Savannah Schools and to the remote Aboriginal community Schools on Cape York Peninsula, as a guest of EDU. EDU – what is that? Michael:          Education Department, Queensland. Elizabeth:        The Australian Government honoured his work in 2004 by printing a 32nd Centenary, special edition of his first book The Monster that ate Canberra – I like that - as a Commonwealth publication … for both residents and visitors to our Capital. Every Federal Politician received a copy. Michael:          Even if they didn’t want it, they got one. (Laughter) Elizabeth: Michael was also the designer of ‘Buddy Bear’ for the Alannah and Madeline Foundation (Port Arthur 1996). The Foundation financially supports Children/Families who are victims of violence/violent crime; they are currently running an anti-bullying campaign in Australian Schools. In 2010 the ACT Government further recognized his work by commissioning a bronze statue of his first book character ‘Alexander Bunyip’. Unveiled in April 2011, it stands next to the new – and I’ll get you to say this, Michael … Michael:          GUN-GAH-LIN. Elizabeth:        Gungahlin Library in our Federal Capital. Thank you for saying that. Michael has presented ‘Bunyip-themed history sessions’ for audiences of School Children at the National Library of Australia since 2011. School touring and book titles continue, which I’m blown away by, because you’ve written and illustrated 176 books! Michael:          Some of those were activity books, to be fair, but they were necessitated – writing, the requirements of children, and illustrations, so they were all lumped in together, basically. Elizabeth:        So Michael Salmon, welcome to Writers’ Tête-à-Tête with Elizabeth Harris. Michael: Thank you very much. It’s a pleasure, and thank you for visiting my studio here in downtown Kooyong, Melbourne. Elizabeth:        We are delighted to be here – Serena Low and I, everybody – Serena being my wonderful tech support. Michael, we have been Facebook friends for some time now, which is a wonderful way to keep in contact with people. But do you think social media has affected children adversely, and stopped them from reading and enjoying children’s literature? Michael:          Do you know, in order to answer some of the questions you asked, I probably pondered this one the most. It’s strange times. I’m 67 years old now. If I go back to when I was a teenager … Elizabeth:        Looking very dapper, I may say. Michael:          Yes, thank you, thank you. (Laughter) It’s amazing what no exercise will do. (Laughter) Things have changed so much. If you go back to the fifties and sixties – which both you ladies will have to look at the old films and see reruns of Gidget and all that kind of stuff – however, the main communication of young people several, several decades ago, socially, would have been the telephone. Invariably, houses only had one line that mums and dads would need. But the girls mostly – and perhaps the boys too – would be on the line talking to their friends and all this kind of stuff. And that was the only direction of communication. Perhaps letters and whatever, but certainly the telephone was the main thing. Now how things have changed these days. Having 12 grandchildren ranging from – what are they now, 2 to 24 – I’ve seen a whole gamut, and I see daily just how much social media – the iPads, tablets and things – are taking up their time and the manners in which they take up their time. Elizabeth:        What a wonderful family to have! Michael:          Well, it’s certainly a bit like a zoo (laughter) – I hope they don’t mind me saying that – and I’m the head monkey, but that’s about it. That’s true. But if you think of a child – and one of the main loves in life is visiting schools, and over the many years in Australia I’ve visited many, many schools – and just see what the teachers are up against these days. And often the teachers are – it’s well-known – surrogate parents on many occasions. Often it’s left to teachers, whether it be librarians or very kind teachers … Elizabeth:        Challenging job. Michael:          … To instill in the children a love of literature and how important reading is. But I think of going back to my youth and my toy soldier collection and making and making balsa wood castles and Ormond keeps and whatever it may be, playing in my room with this fantasy world I had grown up in. Elizabeth:        What an imagination! Michael:          Well, my father read to me – when it first came out, back in the fifties, and I was quite young, but – The Hobbit, C.S. Lewis and the Narnian … – beautiful. I was brought up in those kind of – and he also read most of Dickens to me, as well as Kipling. Quite incredible stuff. So my father was a major player in my love of literature. And I’m not sure that it happens hugely these days, but I grew up in a world of imagination. And it wasn’t any great surprise to my parents that I entered the world I’m in, which is the fantasy world of children, because I never got out of it, basically. 67 years we’re looking at at the moment. I would say mental age is about 8 or 9. (Laughter) Elizabeth:        But you make very good coffee for a 9-year-old, Michael. Michael:          But it did eventuate that sitting in my studio in the early hours of the morning, if I start laughing at a concept or whatever, I know full well through the passage of time that preppies or Grade Ones or Twos or kinders will start laughing at it too. So you get to trust your judgement after a while in the arts. You get to know where your strengths are. But going back to your original question, I have a couple of grandchildren who are absolute whizzes on their tablets. They’ve gone through the Minecraft thing; they’ve gone this, they’ve gone that. Almost an obsessive kind of stuff there. Elizabeth:        It’s an addiction, I think. Michael:          Sometimes, you must take time away from the use of imagination. Because let’s face it, in using our imagination, our creativity – and creativity can be cooking a magnificent meal, it can be keeping a well-balanced house. There’s all kinds of creativity, or it could be the artist creativity, but that’s such an important thing, of finding who we are. Elizabeth:        Yes. Michael:          And to have children taken away to a certain extent Magic Land which is absolutely fine until they become obsessive or addictive, as some of these things are, there’s a great danger that children are – shall we say – not able to evaluate or to progress their natural talents etcetera coming through, especially in the arts. Elizabeth:        I totally agree with you. Michael, you’ve written and illustrated so many books. As I’ve mentioned a couple of times, 176. How do you decide what to write about? Michael:          Well, it’s probably – I’ve always written from a cover idea. There’s a book of mine going way back. It’s one of my old favourites, a very simple one, which is called The Pirate Who Wouldn’t Wash. And when I talk to children and they say where do you get your ideas from, I say sometimes you get two ideas that are unrelated and you put them together, and because hopefully my books are rather funny and I was brought up in the fifties on things like The Fabulous Goon Show, Peter Sellers, and Spike Milligan. I loved Monty Python which was a direct sort of baby from The Goon Show. So my love of comedy has always been UK-based. And so that strange juxtaposition of whatever, so I thought, okay, a pirate, and perhaps a person who doesn’t like to wash. And you put them together and you have the pirate who wouldn’t wash. And then you simply – it’s easy if you have a vivid imagination – you list a whole lot of encounters or what could happen to a pirate who wouldn’t wash. Elizabeth:        Could we talk about that? I’d love to talk about that. Michael:          A monster, and then someone who doesn’t like vegetables. Which was one of my stepsons, William, and he was ‘Grunt the Monster’, which was one of my early characters. Refused to eat his vegetables. His teachers went to great lengths to find out how he could eat them, disguise them in milkshakes or whatever it may be. So it was William I was writing about, one of my younger stepsons at that stage. And at university when he went through Architectural course, he was called Grunt, because they knew full well the book was based on him. So it’s good sometimes to disguise – but nonetheless feature things you see around you. Elizabeth:        How did he cope with it? Michael:          He loved it, he loved it, he loved it. Elizabeth:        He got attention? Michael:          He got attention, all that kind of stuff, and he had one of his best mates who let everyone know that he was called ‘Grunt’ – that was sort of his name. But at some stage, I think he uses that – he lectures in Architecture around the country these days. He’s gone and done very well, dear William, and he will sometimes use that as a joke. Elizabeth:        Yes. Icebreaker. Michael:          Icebreaker, exactly. Elizabeth:        Was there a pivotal person who influenced your career? And if so, can you tell us how they inspired you? Michael:          Probably apart from the people I’ve mentioned previously, the Tolkiens and the Hobbits and the Lord of the Rings and the C.S. Lewises and that sort of thing, I’ve always loved the classic British thing like Arthur Ransome’s Swallows and Amazons. These are very famous books that everyone read at one stage. Back in those early fifties, my father was at Cambridge University so we were hoisted out of New Zealand; we went to live in the UK, and it was such a great time for a child to be in the UK. It’s still suffering war damage from Second World War, and London still roped off sections of it - the Doodlebugs, the flying bombs that the Germans sent over to hit London. So it was a rather strange place, but the television was brilliant. I was a Enid Blyton fan, a foundation member of the Secret Seven Club. Elizabeth:        Were you really. Michael:          Even though based in Cambridge, we looked forward to every month of the Enid Blyton magazines, so I grew up on The Faraway Tree and the Secret Seven and the Famous Five. I had my badges, I had all the merchandise. But also on the television in those days was a show we never got to hear in Australia – Muffin the Mule. There was also Sooty the Sweep, Bill and Ben the Flowerpot Men. Andy Pandy was another one. Most of those were for kindies and little bubs. Basil Brush was a little bit later on. And British television was always superb, especially for children. Blue Peter and some of those famous shows was a little bit later on. I mention this because I had ten years of my own show on ABC which you’ll learn later on, and used puppets and things which I’d seen being used on British television. Elizabeth:        Can you tell us about that show please? Michael:          The show itself … When Alexander first became a character, it was a Michael 'Smartypants book', a little book I had published in 1972. This is The Monster That Ate Canberra. And this basically the genesis of the television show. I thought I would do a – I wasn’t a university student but it was like a smartypants university student publication, because the bunyip himself was not the Kangaroo – was in fact an oversized pink bunyip, more like a Chinese dragon. However, the monster was the public service, and so it was like a joke about the public service. Because back in those seventies and late sixties, large departments were being taken from Melbourne and Sydney and relocated in Canberra, Melbourne Commonwealth finance and other things, so Canberra was being flooded with the public service. And that was why Canberra was being set up, but anyway, as a youngster back in 1972 when I first wrote that book, I envisaged this large King Kong kind of character over Civic, which was the main principal shopping centre, the oldest shopping centre, going on Northbourne Avenue as you come in from Sydney. There’s this large monster devouring things, but this monster has a problem: he is short-sighted. Anyway, he saw the buildings – the famous, iconic buildings of Canberra as objects of food. So put them into – like the Academy of Science, a gigantic apple pie; the National Library, which was recently built, at that stage and still looks like a gigantic birthday cake; and I had the Carillon looking like a Paddle Pop or something like that, which are all to do with objects of food. And the bunyip devoured them. And the Prime Minister – the original Prime Minister back then was (William) “Billy” McMahon, and when he chucked, we had then changed to Gough Whitlam. So Prime Minsters changed within the reprints of this book. The best thing about this … way way back when Gough Whitlam became our Prime Minister, one of the first things he did was institute an office that had never been there before, called the Department of Women. It was there specially to consider and to aid passage of women in Australia into jobs and a whole range of things that had never been heard before in a male-dominated kind of world. Elizabeth:        I’ve always been a fan of Gough, so I must say … (Laughter) Michael:          Well, Gough appointed a single mum called Elizabeth Reid – Liz Reid – and she was a very famous lady and she really championed the cause of women, you know, equal rights, and these ridiculous things that should have been fixed a long time but hadn’t. So Liz Reid was pictured in the centre page of the Woman’s Weekly, soon after Gough – this was one of his first appointments, Liz Reid. And there was Liz with her little bub – so she was a brand new single mum. Elizabeth:        Oh wow. Which in those days would have been scandalous, wouldn’t it. Michael:          Oh yes, but Gough was famous for that. He already went out specially with the arts. Regardless of how he was considered as a Prime Minister, he was certainly a great patron of the arts, Gough Whitlam. Elizabeth:        As I said, I’m a fan. Michael:          In this picture, centre pages of Woman’s Weekly, double spread, was little bubba. And in little bubba’s hands, supported by his mother, was a copy of The Monster That Ate Canberra. Elizabeth:        Wow! How did you feel? Michael:          I thought, “Fantastic!” I got a call within a week from one of the biggest educational publishers in the world, called McGraw-Hill, asking “Can you tell us a little bit about this? And I was described as this is probably not how I would think, and I said “No, but thank you very much for calling.” So the most unusual thing sort of kicked up, and we were reprinting this book again and again for Canberra, because Canberra was laughing its head off. Elizabeth:        Good on you Ms Reid – and baby. Michael:          So we had a theatrical presentation, pantomimes based on it with the local Canberra youth theatre. ABC then serialized it on radio, and then came to me – this was about 1977 or so – saying, “Would you consider having Alexander Bunyip on television?” Elizabeth:        Wow. Michael:          And I said “Yes please, thank you very much.” And it was through a mate of mine, quite a well-known scriptwriter for Australian films called John Stevens, and also director of plays and whatever around Australia, and he was one of the directors of the young people’s programs in ABC, who were based at that stage in Sydney. Anyway, Alexander got on television through this rather, uh, strange path he led, entertaining the people of Canberra. Elizabeth:        Can I ask you with that, and throughout your life, you have enjoyed such great success, and certainly rightly so. Have you found that there’s been what has been seen as insignificant moments, turn into huge, huge achievements for you? Michael:          Well, (I) try to step away from cliché but sometimes it’s hard to, when I say you make your own luck. But the fact that that for example, one of my main – I love it – the statue of Alexander Bunyip, 600 kilograms of bronze outside the library. Elizabeth:        In that place I can’t pronounce. Michael:          Gungahlin, that’s right, Gungahlin. Elizabeth:        I’ll practise it. Michael:          I’ll tell you how that happened. Sometimes on Google if you’re an artistic person and you’re an author or illustrator, if you just put your name in and see what’s the latest thing, are there any new entries. Sometimes schools put in things in comments or whatever. Sometimes odd things about your life come up – business life, work life. And there was a situation that occurred, when Gungahlin Community Council had discussed whether – because John Stanhope, who was the chief minister of the ACT at that stage was putting up statues left right and centre, because he wanted a lot of edifices in Canberra to entertain people. Elizabeth:        He was a visual. Michael:          Yeah, visual person. And someone said, “Why don’t we have Alexander Bunyip?” and there was general laughter. But that was supported in the Council vote of Hansard, you know, the documented notes taken in that particular Council session, and I saw this online. And so I merely wrote to this person, sent them one of the more recent copies of The Monster That Ate Canberra, and said “That sounds great. Let me know if I can help.” Elizabeth:        Absolutely! Michael:          Gosh, one thing after another happened, and the head of the Council Alan Kirlin, with John Stanhope, got it organized, and within a year there was a brand new statue being launched by John Stanhope, one of the last things he did before he resigned. He’d done some magnificent work in Canberra. So new ministers were appointed etcetera, so John – the statue was launched, and I made a speech which was dedicated to my mum, who had died the year before. She was a Canberra girl, and I thought that would be nice to dedicate, at least mention her. I’m sure if she were around - in ethereal style - she wouldn’t miss out on that one, I can assure you. Elizabeth:        I’m sure. Michael:          But when the statue was dedicated – the statue stands there – Elizabeth:        Can we go back, because I would like to talk about that speech about your mum. Can we talk about that? Michael:          Yes. Well, my mother Judy, as I said who passed on in 2010 – the statue was put up in 2011 – was a very … went bush Port Douglas many years ago, before Christopher Skase was up there. (Laughter) So I used to go up there and visit her. A hurricane holiday house, which is simply a house in Port Douglas without any windows. It was up in the hills towards the Mosman River valley. Elizabeth:        For those who don’t know Christoper Skase, can you please touch on him briefly. Michael:          Christopher Skase was one of our major financial entrepreneurs who died over in a Spanish location owing millions of dollars to many people. He was like a younger brother of Alan Bond. That’s where Christopher Skase fitted in. I don’t think New York or Spain ever really sort of – Elizabeth:        Recovered. Michael:          Recovered from the Australian paparazzi to see whether Skase was in fact dying or whether he was in a wheelchair with breathing apparatus, wheeled out by his ever-loving wife Pixie, who is back safely in the country now. But that’s by the by. (Laughter) Michael:          My mother was a fairly gregarious character. Elizabeth:        Bit like yourself. Michael:          (Laughter) Pushy. Elizabeth:        No, no, no. Delightful, and entertaining. Michael:          Judy was one of the younger daughters of her father, my grandfather, Canon W. Edwards – Bill Edwards. He was a young Anglican curate who’d been badly gassed on the fields of Flanders and the Somme in the First World War. Elizabeth:        Oh dear. Michael:          But he was an educationalist, as well as a very strong Anglican within the church. So he was sent on his return out to Grammar School looking after that in Cooma. When Canberra was designated as the place to have our new capital, the Anglican Church from Sydney said, “Please harness up one of the buggies, and take six of your seniors and go look at four different venues in Canberra that we are looking at to have a brand new school.” Elizabeth:        Wow. Michael:          And they chose the most beautiful place, in a road called Mugga Way just at the bottom of Red Hill, which is Canberra Boys’ Grammar. He was their founding Headmaster. Elizabeth:        Was he! Michael:          But the fact was that they settled on that because they pitched their tents under the gum trees. They woke up with the sound of intense kookaburra noise, and thought this was perfect for a grammar school, or any other school for that matter. Elizabeth:        Oh, beautiful. Michael:          They were all talking and whatever it was. Elizabeth:        Bit like sounding the bell, you know. Michael:          (Laughter) So going back to those days, that was the start of Canberra and my family going back there to the thirties of last century. However, back in those days in the Second World War, my father had graduated from school in New Zealand, and was sent across as one of those New Zealand young soldiers to become an officer at Duntroon, the training college. The Defence Academy they call it now, but good old Duntroon. So when he graduated, it was the end of World War Two, and he was sent up to war crimes trials in Japan, as one of his first things the Aus-New Zealand ANZAC forces when they went up there to look after things for a while. But my mother was quite a brilliant lady, and she would always be the one painting and decorating and doing all this kind of stuff. Always a dynamic kind of person. And apart from loving her very much as a mum, she instilled in me this gregarious, rather exhibitionist kind of thing. Elizabeth:        (Laughter) Thank you Judy. It’s Judy, isn’t it. Thank you Judy. I know you’re here. Michael:          So Judy was responsible for – in younger, thinner days, long hair, beads, not necessarily hippie stuff but just total exhibitionist kind of stuff. Elizabeth:        Oh I’ve seen photographs of this man, everybody. My goodness, what a heartthrob. Michael:          I looked like I could have been another guitarist in Led Zeppelin or something. Elizabeth:        I’m actually just fanning myself with my paper. (Laughter) Michael:          But anyway, it’s all a bit of fun. Elizabeth:        Did you ever sing? Michael:          No, no, no. I was actually a drummer at one of the schools I attended. Elizabeth:        Were you? I like drummers. Michael:          Yes, but not this kind of drummer. In the pipe bands at Scotch College, Sydney. I was a tenor drummer. Elizabeth:        Okay. Michael:          So they have the big, the double bass drum or whatever and the tenor drums and the drumsticks - I forget the name – like the Poi they have in New Zealand. And the tenor drums – you have to have coordination if you want to play the tenor drums as you march along in your dress: the Black Watch dress. Elizabeth:        Isn’t learning music so important, which reflects in other areas? Michael:          It is, it is. Elizabeth:        Can we talk about that? Michael:          Well, I think that – not being musical but having written lyrics in my pantomimes – and down at a very amateur level worked out what a bunyip would sing about, or go back to an early blues song or doo-wop kind of song when Alexander is stuck in a zoo in the pantomime. So I had great fun. So my musical experience – I was lucky to have some very clever people, including one gentleman who until a few years ago was one of the Heads of Tutors at Canberra School of Music called Jim Cotter. Now Jim Cotter and I – he wrote my first music for me, for the pantomimes I used to do way back in the early days. And then Peter Scriven – he was the head of the Tintookies Marionette Theatre, who were all under the auspices of the Elizabethan Theatre Trust in Sydney at Potts Point. And Peter had engaged him to do – I was doing some sets – it was the first show, our first children’s show at the Opera House – and I did the costumes for Tintookies. It was a revamp of what Peter Scriven had been doing back in the fifties. And Jim had some brand new music, and so my musical experience was purely admiring music and talented people who did that, realizing that it was not my forte. Elizabeth:        Aren’t they clever. Michael:          Nonetheless, by writing lyrics and giving some vague, vague “rock ‘n roll and I like it” -like, you know. Not exactly “Stairway to Heaven”, you know what I’m saying? Elizabeth:        (Laughter) Who was your favourite band at that stage? Michael:          Ahh, I grew up in the Sixties. I got myself a hearing aid the other day. You can hardly see it – one of these new things. But essentially, I’ve had to, because I spent a lot of my younger life surfing in the eastern beaches of Sydney. The promotion of bone growth over the ear – there’s some kind of term for it – and they had to cut away the bone if I were to hear properly. And I thought, I don’t want my ear cut, so I’ll just leave it as it is at 67. But also too, I do attribute some of those early groups to my lack of hearing these days, because I did study for my exams with The Beatles, The Rolling Stones. Pretty much one of my favourite groups of all time was a group that spread, with different members going to different other groups, were The Byrds in America. Dylan songs. “Mr Tambourine”. Elizabeth:        Yes. Was it Eric – Eric somebody? Or did I get the wrong group. Michael:          We’re talking about David Crosby, Gene Clark, Jim McGuinn who changed his name and became Roger, or was it the other way round. But they had the Dylan. They came out with “Mr. Tambourine Man”. Elizabeth:        Yes, I know that song. Michael:          Their next one was ‘Turn, Turn, Turn’. Then they went into more Dylan of, “All I Really Want to Do”. And these are hits of the Sixties. Elizabeth:        You could sing a few bars. Michael:          No I couldn’t. Not even Dylan-style. (Laughter) But I love those songs, mainly because - Elizabeth:        They’re great. Michael:          Jim McGuinn had a 12-string guitar, and it was this jingly-jangly feel to their songs that I loved dearly. But another group which I must tell you, because I met up with them in real life, which is one of my favourite groups, is The Seekers. Elizabeth:        Oh! Miss Judith! Michael:          Now Keith Potger is a good mate of mine. We go for gentlemen’s clubs like Savage Club; he’s a member of Savage, enjoy long lunches, and often with some other guests. Elizabeth:        Athol Guy? Michael:          Yes. And Judith Durham – where you’re sitting there – came and sat down there with her manager a few years ago. Elizabeth:        My goodness! Michael:          She’d seen a presentation – Elizabeth:        She’s beautiful. Michael:          Oh, magnificent. And her voice! Elizabeth:        Angel. Michael:          Judith had seen a production by Garry Ginivan, who is one of the principal Australian children’s entrepreneurs for theatrics, theatres. He’s just finished doing Hazel E.’s Hippopotamus on the Roof kind of stuff, and I’m not sure if he’s doing Leigh Hobbs’ Horrible Harriet. Now that’s going to the Opera House. I’m not sure if Garry Ginivan’s doing that for Leigh. He did for Graeme Base. He did My Grandma Lived in Gooligulch, and also brought packaged stuff like Noddy and Toyland, Enid Blyton and other stuff like The Faraway Tree. So anyway he was presenting Puff the Magic Dragon – and I’m just looking around the room to find a graphic of the poster, because I’d designed Puff the Magic Dragon. Elizabeth:        Did you? Michael:          And they used that for all the promotional material and stuff there, but it was the puppet that I designed. And Judith went along to see – it was at The Athenaum Theatre here in Melbourne, a few years ago now. Elizabeth:        Lovely theatre. Michael:          And she liked the whole idea of the dragon, and she rang me. And so here was this most beautiful angel on the other line … Anyway, she was round a couple of days with her management. She was at that time – this was before The Seekers got back together and did all that magnificent tours they did over the last five or six years, Andre Rieu included. Judith is a honky-tonk girl; she loves the music of spiritual and going across to honky-tonk, like Scott Joplin, the ragtime, and all this sort of stuff. Elizabeth:        Oh, fun! Michael:          And she had written several things that she wanted the sheet music to be illustrated to sell, as part of the Judith Durham empire. And she did the ‘Banana Rag’. So immediately I did the illustration for her. I didn’t take any payment. I said, “Look, Judith, might I be impertinent and ask you to come to one of my clubs and sing – come to dinner?” She was a very strict vegetarian and looked after herself incredibly well after a terrible accident where she had to look after her whole system and she’s done that magnificently. So there she was singing, and this was when The Seekers had just released one of their LP’s, called “Morning Town Ride to Christmas”, which was for children’s songs, and there wasn’t a dry eye in the house of these senior gentlemen at the club I was talking about, one of these good old Melbourne clubs, when she sang “The Carnival’s Over”. Elizabeth:        Oh yes. Michael:          Absolutely superb, so that was more than enough payment for doing some artwork. But since then, I continued … and met the desperate Keith Potger. Elizabeth:        Weren’t you lucky. Weren’t you lucky. Weren’t you lucky to have that gorgeous woman. Michael:          I was lucky. I was lucky. But I had to tell you, Judith - they had an article on her website, and she’s on Facebook as well - had at that time recorded with The Lord Mayor’s Orchestra here in Melbourne. It was called “The Australian Cities Suite”, and she had written a song for every major city in Australia. And I remember she and I were trying to do a book together, a book based on a song that her husband – who passed on through, oh gosh, what was it – the wasting disease, muscular disease … Elizabeth:        MS? Muscular Dystrophy? Michael:          Muscular Dystrophy. I’m sure that must be it. He put in a song called “Billy the Bug and Sylvia Slug”, and so we put that into a book. And I took Judith along to see some of the heads of various publishing firms in Sydney as well as the head of ABC merchandising in their ivory tower down in Haymarket area. Beautiful beautiful premises they have there, ABC Studios. And so Judith was much heralded in both places when I took her as my guest to introduce this book to her. The book didn’t work unfortunately, but she did start singing in the car as we’d arrived early in the carpark of the ABC citadel in Haymarket. She started singing. And we were all sitting there. And she started singing songs again from The Seekers. Elizabeth:        I don’t think I’m ever going to stand up again. Michael:          So here we are in Kooyong, and there’s the beautiful strains of Judith Durham singing songs, and I thought, “It doesn’t get much better than this.” Elizabeth:        Oh wow. Michael:          I don’t think Deborah Harry could have done the same. Elizabeth:        Do you think Judith Durham would speak with me on this podcast? Michael:          Judith is a very accommodating person, and I’m sure that if you ask through her management, Graham her manager would – I’m sure - she would look at that favourably. Elizabeth:        Would I have to wear a ball gown? I have a couple. To meet the Queen. Michael:          Meet the Queen. (Laughter) But anyway, I suppose too, in my business – and Australia is not a huge place really, when it comes to who knows what and we talked before about the degrees of separation. Elizabeth:        Absolutely. Michael:          And so, a lot of my stuff has been … involved with, because of my work, a lot of singers and whatever via The Hat Books. I remember Russell Morris, not in this place but a previous place. Elizabeth:        “The Real Thing”? Michael:          “The Real Thing” Russell Morris. Brilliant, brilliant, and had the two LP’s as well. Elizabeth:        And Molly, Molly is attached to that – he produced it, didn’t he. Michael:          Yeah, but Russell Morris had this concept that he came up with his wife 30 years ago. It was about a toy that was pre-broken and you had to fix it. The whole idea of the toy was that you had to re-glue this broken toy. Elizabeth:        Right. Michael:          It was ceramic, and he was so keen on it, but I just didn’t think it was going to work. He was a man with an incredible imagination – Elizabeth:        Russell Morris? Michael:          Russell Morris. He had this toy concept, but it didn’t work, because I don’t think kids want to sit around re-gluing a toy that has been broken. I don’t know what he was on. Elizabeth:        He was quite resourceful. Michael:          Ah, he is. Look at the way Russell Morris has revived in recent times. And he’ll have to excuse me. I don’t remember, but I’ve certainly listened to his two LP’s – albums as we used to call them, back in the old days – that he did. All bluesy and whatever, and he’s still got a magnificent voice. Elizabeth:        You know, there are so many Australians that are not – what should I say – recognized as they should be, I think. And such talent. Michael:          Ah, yeah. Elizabeth:        And do you think we need to go overseas, like in the old day. I was listening to a program last night, actually, and Brian Cadd was on it. Love Brian Cadd. Beautiful, beautiful music. And he said you know, back in the day you had to go to London. Michael:          Yes, yes. Well, look at Easybeats and stuff like that. Elizabeth:        Do you think people need to go? Michael:          Brian Cadd and The (Bootleg) Family (Band), that’s what he calls his group, they are reappearing at – they are doing an Australian tour this month in February – I saw it on Facebook, actually. Elizabeth:        You know, a friend of mine who’s a pastel artist, highly acclaimed – we were talking about this, and she said in this country, she’s just not recognized and she really needs … She’s working in a boutique! Michael:          It is a problem. You know on Facebook, which is one of the loves of my life, you see a good deal of Australian up-and-coming authors and illustrators, and ones that you dearly wish would … And I do believe that you if you earn it, you deserve a place in the sun – your ten minutes, twelve minutes of fame, all that kind of stuff. And if you’re smart enough, after your time has been, you then start doing things which reinvent yourself. I’m not talking about Madonna-style, but I’m talking about coming up with new things, being aware of new trends and seeing whether you can adapt your talents. Elizabeth:        Being a survivor. Michael:          Being a survivor, absolutely. Because let’s face it, and I’m very grateful – for example, the schools around Australia – 45 years… Elizabeth:        I’m sure they’re grateful to you too. Michael:          I go into the schools and there are teachers there that say, “Look, the last time I saw you Michael, was when I was in Prep or Grade One, and I loved your books then and I still love them." I’m just so thankful. Elizabeth:        How do you feel, other than gratitude? Michael:          Well, this is one of those major things, of feedback you get. And some of them come up and say “I started drawing because of you drawing”. Elizabeth:        You’re inspirational! Michael:          There are just those things there that I … and also entertaining. Doing a bit of stand-up comedy, giving out very silly prizes like Barbie books to Grade Six boys for good behaviour. I know Preppies will never forget those things. Elizabeth:        Can you talk us through – when you present to the school, how do you do that? Michael:          This year I’ve got a ‘Michael Salmon’s Monster Show’ which is talking about more or less the same thing, but some different pictures to ones I’ve been doing before. Essentially what I realized right at the start is if I do some speed cartooning, right in the very first picture I draw there, and do it so quickly in a great show-off manner, you get the kids hooked.  Elizabeth:        It’s magic; it’s in front of us. Michael:          Because the little ones, they say “Look what he did! Look how fast he drew!” And I always knew that that particular facet, if you did it correctly, the little Preppies in the front – because we do try to get mixed grades, with the Grade Sixes at the back – is that you would have their attention if you kept on. So I sort of talked about the way I invented characters and how it happened. Bobo my dog who is not here today – dear Bobo in the book I wrote called Bobo My Super Dog, where I sort of – he saves the world a bit. Elizabeth:        Of course he would. (Laughter) Michael:          Oh, I don’t know. Let’s just go back to the bit about Australia and the people who are trying to make it, and they are doing their very best and you see their brilliant talent. And it’s very evident on Facebook – it’s one of my major purveyors of talent – the ideas that people come up with and all that sort of stuff. I mean, you’ve got some brilliant people here in Australia. You look at Leigh Hobbs for a start. Now he belongs to the Savage Club as I do, so I catch up with him for lunch on occasions. And there he is with his two-year tenure in his position championing children’s books and children’s literature around Australia. His cartoons are very much like Ronald Searle, the famous British cartoonist, who did the original cartoons that accompanied the original published books and also the film versions of St Trinian’s movies, of schoolgirls and things like that – the naughty schoolgirls. And Ronald Searle was a brilliant, brilliant artist, and he had the kind of nuttiness in his cartooning that Leigh Hobbs had. You look at Leigh Hobbs’ stuff – they are very, very sparse, great placement of colour, they are done in a very slapdash manner. It all works together beautifully – from Horrible Harriet, to Old Tom and whatever. And if you’ve got other people – what’s that book by Aaron Blabey – something or other Pug? (Pig the Pug) I bought some books for my very young grandchildren for Christmas, and I thought, “I haven’t seen these books before.” And here he is winning awards and YABBA (Young Australians Best Book Awards) Awards and all this kind of stuff. And so much talent around. And it’s hard in Australia to make a living as an author, because the royalties and stuff, even if you are one of the top ones, may suffice for a while but aren’t continuing. Elizabeth:        And yet Michael you’ve done that – for 50 years – haven’t you. Michael:          Only because of schools. 45 years in schools and 50 years in the arts. But mainly because I branched out and did things like theatre – the television show. You saw when you first entered the merchandise for 'Alexander Bunyip'. Spotlight stores were behind me for fabrics for a decade, and they finished not a huge many years ago. And that had nothing to do with 'Alexander Bunyip'. But the fact of really, of diversifying. Elizabeth:        Okay. Michael:          And the books for me lay a platform. When Mum or Dad read a book at night to their children, and it happens to be one of yours, and it’s something they like, and they happen to be one of the lead buyers of Spotlight stores and they say “We must do something about this guy”, and they came round and sat where you’re sitting, and they said “We’d like to offer you a deal.” And I thought, “Oh thank you. That’s great!” Elizabeth:        But can I interject? The vital part of that is certainly that there is talent and diversification, but it’s also the ability to connect with people - which you are very skilled at. And the warmth that you have … Michael:          Well, thanks to my mother, because she was a people person. Yes, you’re quite right – it does help to be a people person if you’re an artistic person. Of course sometimes it doesn’t flow. Some of the best children’s authors are not people persons. So you can’t expect to do anything. I learned long ago of creating an impact on your audience – start and hold them if you can from then on, and then you can impart any message you want. And the only message I really impart to the children is about developing their creativity, for them to start working on the things they’re good at, or keep drawing or singing or whatever it may be. Elizabeth:        I really want to segue into something from those comments about your work for the Alannah and Madeline Foundation. That is so, so pivotal. Can we talk about that? Michael:          Yes. Do you know, in general terms, it’s really good if you’ve had success, I’ve found, especially in the arts, to find venues and areas and avenues to give back to society. I hope that doesn’t sound too corny. Elizabeth:        It sounds beautiful. Michael:          Up here, I’ve got some – when I was one of the patrons of “Life Be In It” for the Victorian – Elizabeth:        Oh yes! Michael:          And I designed – not the vans, those large pantechnicon vans that went around and advertised anti-drugs and – Elizabeth:        It was Norm, wasn’t it. Norm. Michael:          Norm was “Life Be In It”. This was the Life Education Centre, the one started up by Ted Knox at King’s Cross Chapel, but they went to a huge thing. Large pantechnicon trailers filled with the latest kind of things, and all round Australia, but particularly in Victoria – because that’s where my expertise was, helping them design big wheels to go on, painted by local mums and dads. And I also do it to do some fundraising. But Life Education had a Harold Giraffe as their logo, and it’s still going gangbusters. So these things would go to schools, and like the dental van they locked you in that, and they would see these incredible digital displays of bodies and drugs and anti-drugs, things like that. Magnificent, magnificent. That was one thing I was involved in. A good mate of mine, a school librarian called Marie Stanley, who’s since not a school teacher anymore – a school librarian – she rang up soon after 1996 when the horrific Port Arthur thing had occurred. She had been seconded – Walter Mikac, whose wife Nanette and two daughters Alannah and Madeline were shot dead – he knew he had to do something. So he went to see the Victorian Premier at that stage, Steve Bracks, and also saw John Howard. And between them he got funding to set up a St Kilda Road office and start the Alannah and Madeline Foundation which is purely there to help the victims of violent crime – the families, the children – provide them with some kind of accommodation or support or clothing, needs, or toiletries – a whole range of stuff there. So they seconded Marie Stanley from Williamstown North Primary School. Because I’d visited her school many times, she rang me up and said, “Look, Michael, I’m doing this, I’m on salary, but I need your help. Could you help me invent a character?” So I came on board with Alannah and Madeline (Foundation) on a purely voluntary basis, which is my pleasure, and we invented a character called Buddy Bear as a very safe little bear and a spokes figure, whereby – and there are behind me as we speak in this interview – there are Buddy Bear chocolates up there. And they did something like five million chocolates with my name and my design on it through Coles stores and Target stores … Elizabeth:        You know Michael, next time we meet I need a camera. (Laughter) Michael:          That’s just 'Buddy Bear' stuff. And 'Buddy Bear' has gone on strongly and it’s now part of the Alannah and Madeline Foundation. But they got involved in a very important … the main focus of anti-bullying. And I was the person – I want to say one thing, because it’s true – I suggested that they should go – violence and all this stuff for families was terrible enough – but if they wanted to go to the bully, they really should get into the heart of the matter. And to me, I said to them once, “Look, please. I’ve seen what we’re doing. We’ve got Buddy Bear as the spokes figure for violence in the home. But we really should be hitting schools and things with something that centers around bullying and have an anti-bullying campaign. And you know, it is one of those things which is said at the right time and the right place. And now we’ve got Princess Mary of Denmark who is the international head of 'Buddy Bear' and they’ve got their own thing over there because of her Australian connection with Tasmania. We have the National Bank who are the sponsors of the 'Buddy Bear' program of the Alannah and Madeline (Foundation), so we have a fully-fledged charity. But the early days of inventing 'Buddy Bear', and a lot of people who gave their time and effort for no cost as I did, and pleasure to get the whole thing going. But it was all through initially Walter Mikac, thinking that with his deceased wife and two little girls, he had to do something. He was a pharmacist by trade and he was a smart man – he is a smart man – and he set the wheels in motion. And so it was a - ‘pleasure’ is not the right word. It was satisfying to be involved with a program that was ultimately going to help children feel better and safe and especially with this bullying thing, of being able to … Elizabeth:        Personally, I love fundraising and I do a lot of it. And actually we have on the agenda this year a fundraiser for another children’s author: Pat Guest. His son Noah, and Noah has Duchenne’s Muscular Dystrophy, and the family need a wheelchair-accessible vehicle. Michael:          Yes, yes, yes. Elizabeth:        Pat’s a wonderful person. He’s published five books and counting, and has written one about Noah called That’s What Wings Are For. He has actually podcasted with me. So I’m going to put you on the spot now and ask you if you would like to create something – Michael:          Absolutely! Let me know … Elizabeth:        I haven’t even finished my sentence! Michael:          No, no, no, the answer’s yes. The answer’s yes. Elizabeth:        The generosity! Thank you. Michael:          No, no, my pleasure. You talk about the – do you pronounce it ‘Duchenne’? There was a very famous fundraiser with that society up in Cairns several years ago, where various artists and musicians and illustrators were asked to provide – and they said a ukulele – so you had very famous artists and musicians and illustrators creating and painting their own version on this practical ukulele that was sent back to Cairns and auctioned off for charity and raised a whole lot of money. Elizabeth:        You know Pat, I think, would love to meet you. And I know Noah – the whole family are just beautiful people. Michael:          But I’ll have you know, only because of that connection where they contacted me saying “Would you like to …” and I had no knowledge whatever of the disease and the toll it took. Elizabeth:        I’ve nursed a couple of boys with it. Michael:          From my recollection, would it be quite correct to say it’s quite gender-specific? It hits boys more than girls? Elizabeth:        Yes. The two children that I nursed were brothers, and they passed. So we want to focus on the positive side, and this Saturday, actually there’s a trivia night which is sold out – Michael:          Oh good! Good, good. Elizabeth:        And it’s Eighties music which is my thing – I love that – so hopefully I will win, everybody. Don’t bet on me, Michael, but if there was a ticket, I’d invite you. But we’re looking at later in the year and we have some great people. Dave O’Neil wants to do a spot – Michael:          Oh yeah, good, good, good. Elizabeth:        And he podcasted with me. And like yourself, pretty much before I got my sentence out, he said 'yes'. Robyn Payne whom I wrote my song with for my children’s book – she wants to write a song. So we’ve got many … and Robyn Payne was in Hey Hey, It’s Saturday for many years. She was in that band, and Robyn’s incredible – she plays eight instruments. Michael:          Right, right, yes, yes. Elizabeth:        She’s performed at the Grand Final; incredibly talented lady. I just ran into her the other night with Neil, her husband, and Steph who’s a good friend of mine and recently performed with her on stage as well, they’re looking at writing a song for Noah. So it’s taking off. Michael:          One of the best fundraisers I’ve been to is a yearly event – still going – the Alannah and Madeline (Foundation) did. I don’t keep in contact with them directly; it was just a pleasure to work in, but what they did at the Palladium Ballroom – have 'Starry Starry Night'. Now 'Starry Starry Night' would have almost anyone who’s anyone in show business, on television and the media, would be there, from the jockeys at Melbourne Cup who would be singing Village People and whatever. Quite brilliant. And they had a huge host. We’re talking about – and I’m not exaggerating – 50 or so celebrities attended that. Black Night night and it really was a “starry starry night”. I haven’t attended for a long time, but I did my duty and it was a great pleasure to be there and part of it. But that was a brilliant fundraiser, and still continues as a fundraiser for the Alannah and Madeline Foundation. Elizabeth:        Oh, I’m so honoured that you said yes to me before I even finished my sentence. Thank you so much! Talking about stars, I’d like to go to my signature question, and then we’ll say adieu to you. Michael, this is a signature question I ask all my guests: what do you wish for, for the world, and most importantly for yourself? Michael:          Well, as we’re sitting here in early February of 2017, because of all these incredible events that are going on every quarter of the day from the United States there, where the world order seems to be rapidly changing, and oddities occurring there and without going into it too heavily we all know what we’re talking about, I have a hope that the situation in America remedies itself, and that the situations change rapidly, and that America gets back, because as the biggest country in the world for what it is and known as, because we need the stability of America etcetera, so it’s a fairly direct sort of wish that America gets its act together again soon, and maintains something that we can trust in. Because America really is being that main country in the world. Elizabeth:        Do you see a way – does that start one person at a time? Is that how things start to change? Michael:          Gosh, as we’ve evidenced with the Women’s March and a whole range of stuff now that the immigration – oh dear – it just goes on, goes on. And without going into a full-scale discussion of that, my wish is that America gets back together quickly, and maintains and gets someone new in charge. I don’t know how that’s going to happen – impeachment or … but something has to happen, so that the world can feel stable again. And that’s not grandiose, but that’s probably affecting a lot of people in the world. As every new edict or special signatory thing is signed in the White House, the ripples it sends across for instability is quite amazing. We’ve never seen it before, unless you were there during Chamberlain days when Neville Chamberlain was talking to Hitler, and some of those – not grandiose or high-flying stuff, but it does affect especially Aussies who love America dearly, and America loves us. Elizabeth:        But to me your books so beautifully reflect history. Michael:          Some of them do, some of them do. It’s like a Facebook page – I really do love entertaining people and making them laugh. And that’s probably the last part of your question – I really would like every child in the mass audiences I encounter, we’re talking about 500 or so -  I would like to think that every child had an opportunity – not because of anything to do with my talk that may be instrumental , it doesn’t really matter – the children of today can reach their potential, and the energy and the talents they have are recognized. Not squashed, quashed, forgotten, put to one side by society or families, issues, whatever it may be. Elizabeth:        You know, that reminds me of a good friend of mine, Andrew Eggelton. So Andrew Eggelton is an interesting man – he’s a New Zealander actually; he’s a Kiwi – and he believes in the Art of Play. So his wish is that everybody gets to use their God-given talents. Michael:          Ditto, ditto, absolutely. Because you do see the children out there. Just to give you an example: I spoke to close to 12,000 children during a tour that I organized myself – I do have some other agents organizing other states … Elizabeth:        How do you look after your throat? Michael:          Thank goodness I’ve always had a voice that can throw – a loud voice – I was captain of a rugby team in my machismo days. I was in New Zealand, and as a front row forward you don’t usually have a shy, retiring kind of personality. When you go out to tour, and on that tour we toured everything around the Riverina, we did places like West Wyalong, places you normally drive through as you are going up the back roads to Dubbo or some place like that. Then we went to Sydney, the western suburbs schools, and even this morning I had a phone call from one of the agents for a school near Loganlea. The school called and they want a couple of sessions. Most of their students are refugees with English ESL, so English Second Language. I would say English third or fourth language. Elizabeth:        How many children at that school? Michael:          Seven hundred. She said – the agent who rang me – and this is the first one in the tour that’s coming up late July for southeastern Queensland – “The reason no doubt that you’ve been invited to this particular school” which I know well, is because my act is highly visual. You don’t need a lot of language to understand it, because I draw all the cartoons. Or I’m caricaturing children, or getting them to caricature me. It’s almost like – ‘international language’ is not the right phrase – but it’s almost like a human comedy or whatever you call it. Elizabeth:        It’s like smiling. Michael:          It’s like smiling, and the more the merrier. So up there you’ve got the refugee children. You’ve got a lot of – and I really enjoy going to the Tongan or Samoan or Fijian or Maori schools or New Zealand, because I used to play rugby and I played with so many Islanders over the years and I’ve got some good mates there. And especially up there in southern parts of Brisbane, before you hit the Gold Coast, it’s always challenging, and I love to go up there, so it’s great to hear that. And the same thing applies to Indigenous schools up on the Gulf of Carpentaria, they call them, the Gulf Savannah schools up in Cape York, where you go to places like Weipa and stuff like that. And some of the notorious – notorious because of the troubles that have occurred – there’s a couple of places along the Peninsula there – they are trouble spots and have been for many years. Elizabeth:        You know Michael, that just says so much about you, because so many people would not go within cooee of those places, and it reflects your beautiful generosity. So I want to thank you very much for guesting on Writers’ Tête-à-Tête with Elizabeth Harris. And I think we need a Part Two. It’s been an absolute delight and thank you so much. Michael:          Thank you very much, and thank you Serena too. I babbled on a bit, but fifty years – fifty years of working in this country – there’s been a lot of water under the bridge. A lot of people, a lot of children, and I’m just very lucky. I consider myself very lucky to be in that position, to have that rapport with kids, and to just get on with them and entertain them and enjoy them. Elizabeth:        I consider those children and us very, very lucky to have met you today. Thank you so much. Michael:          Thank you guys. Thank you. [END OF TRANSCRIPT]

  Carolyn: Welcome to Circulation on the Run, your weekly podcast summary and backstage pass to the journal and its editors. I'm Dr. Carolyn Lam, Associate Editor from the National Heart Center and Duke National University of Singapore.     In just a moment, we are going to be discussing the feature paper on results of the RE-LY trial in patients with valvular heart disease. Yes, you heard me right, this means dabigatran versus warfarin in patients with atrial fibrillation and valvular heart disease. You need to listen to this discussion with first author Dr. Michael Ezekowitz, but first here is a summary of this week's issue.     In the first study, Dr. Norby and colleagues from the School of Public Heath University of Minnesota assessed trajectories of cardiovascular risk factors and the incidence of atrial fibrillation over 25 years in the ARIC study or the Atherosclerosis Risk in Communities Study. They first assessed the trajectories of cardiovascular risk factors in more than 2,400 individuals with incident atrial fibrillation and more than 6,400 matched controls. Next, they determined the association of those risk factor trajectories with the incidence of new atrial fibrillation among more than 10,500 individuals free of atrial fibrillation at baseline.     The main finding was that stroke, myocardial infarction and heart failure risk increase steeply during the time close to diagnosis of atrial fibrillation. All cardiovascular risk factors were elevated in atrial fibrillation cases compared to controls more than 15 years prior to the diagnosis. A trajectory analysis showed not only the presence of the risk factors such hypertension and obesity, but also their duration which was more informative in determining the risk of atrial fibrillation compared to a one time clinical measurement.     Finally, they identified diverse and distinct trajectories for the risk factors findings that carry implications for the different roles of different risk factors in the pathogenesis of atrial fibrillation. The findings of this very significant study also highlight the need to establish preventive strategies that address risk factors decades before atrial fibrillation diagnosis.     The next study is by first author Dr. van der Valk and corresponding author Dr. Strauss from the Academic Medical Center in Amsterdam. These authors aimed to better understand the underlying mechanisms responsible for atherogenicity of lipoprotein a or LPa. The authors achieved this aim by a combination of three approaches. First, in vivo magnetic resonance imaging using 18F-FDG PET/CT and SPECT to measure atherosclerotic burden, arterial wall inflammation and monocyte trafficking to the arterial wall. Secondly, ex vivo analysis of monocytes using facts analysis, inflammatory stimulation assays and trans endothelial migration assays. Third, in vitro studies on monocytes using an in vitro model for trained immunity.     Their main findings were that, firstly, individuals with elevated LPa had increased arterial wall inflammation in vivo. Secondly, that monocytes from these individual remain in a long lasting activated state ex vivo, and finally, that LPa elicited a pro-inflammatory response in healthy monocytes in vitro, an effect that was markedly attenuated by removing or inactivating oxidized phospholipids on LPa.     In summary, this study nicely shows that LPa induces monocyte trafficking to the arterial wall and mediates pro-inflammatory responses through its oxidized phospholipid content. The clinical implications are therefore, that oxidation's specific epitope targeted therapy using for example specific antibodies as single gene antibodies may bear clinical potential to modulate the arthrogenic impact of LPa.     The final study is from first author Dr. Mazen, and corresponding author Dr. Ouzounian from Toronto General Hospital and University of Toronto in Ontario, Canada. These authors sought to compare the long term outcomes of patients undergoing the Ross procedure compared to mechanical aortic valve replacement in a propensity match cohort study of 208 pairs followed for a mean of 14 years.     They found long term survival and freedom from re-intervention were comparable between the Ross procedure and mechanical aortic valve replacement. Of note however, the Ross procedure was associated with improved freedom from cardiac and valve related mortality, as well as a significant reduction in the incidence of stroke and major bleeding. This paper provides important evidence that supports continued used of the Ross procedure in properly selected young adult patients in specialized centers.     What this means is having experienced surgical teams dedicated to mastering the technique and committed to carefully following up the patients for possible late complications. This and more is discussed in a provocative editorial by Dr. Schaff from Mayo Clinic Rochester, Minnesota who provocatively entitled his editorial 'The Ross Procedure: Is it the Preferred Procedure or Double, Double Toil and Trouble?'     Those were all summaries, now for our featured paper.     I am so excited to be joined from all over the world to discuss the featured paper today, and that is on the comparison of dabigatran versus warfarin in patients with atrial fibrillation and valvular heart disease. To discuss this first we have, first and corresponding author, Dr. Michael Ezekowitz from the Sidney Kimmel Medical College at Thomas Jefferson University and Lankenau Medical Center in Philadelphia, as well as from the Cardiovascular Research Foundation in New York. Welcome Michael.   Michael: Thank you very much.   Carolyn: Michael, you're calling from South Africa aren't you?   Michael: I am indeed.   Carolyn: That's wonderful. We're very honored to have Dr. Shinya Goto Sensei, Associate Editor of Circulation from Tokai University Japan. Hello Shinya.   Shinya: Hello Carolyn, thank you very much for your invitation to such an excited podcast. I enjoy podcast every week.   Carolyn: I love this and it is extremely exciting and the most global discussion that we have had so far, with calling in Japan and Singapore and South Africa. Indeed it's because we're discussing a very important problem globally. Michael first, when we talk about the RE-LY trial and the NOAC trials, we're always associating them with non-valvular atrial fibrillation, and yet your topic is discussing valvular heart disease from RE-LY. Can you please start by clarifying that?   Michael: I think the reason we wrote this paper is that there is a misunderstanding of the patient populations that was studied in all the NOAC trials because they were characterized as having non-valvular atrial fibrillation. That's only partially true because in all the trials, patients with mechanical heart valve and hemodynamically significant mitral stenosis were excluded, and yet there were many patients with valvular disease that were included. In the RE-LY trial which is the focus of this particular paper, 25% of the patients had some form of valvular disease that were recruited into the study. So the term non-valvular is misleading.   Carolyn: That is such an important clarification, and it's an issue that I see a lot in Singapore. Frankly, lots of patients with atrial fibrillation have some valve disease even if you exclude prosthetic valves, significant mitral stenosis or valvular heart disease requiring intervention. We're very clear not that this is the patient population you're referring to. Shinya, I want to bring you into this. I see lots of these patients, how about you?   Shinya: The same. Majority of patients have valvular heart disease, small mitral regurgitation is very common. We are excluding only clinically overt mitral stenosis and basically mechanical heart valve in all the newest trials. As Michael pointed out, it is very important to correct misunderstanding. Non-valvular atrial fibrillation, we used in the clinical trial is all atrial fibrillation except clinical overt mitral stenosis and prosthetic for mechanical heart valve.   Carolyn: Exactly. A great foundation for us to get our understand right before we discuss the findings. Michael, could you please give us the top line result and tell us what do the results mean for your own clinical practice?   Michael: Basically, it means that the patients with valvular heart disease that were included in the trial, and these included patients with mitral regurgitation with was the most common lesion, mixed aortic valve disease, tricuspid regurgitation, and also it turned out that there were 192 patients that had mild mitral stenosis. Those with mitral stenosis were presumed to be rheumatic in ideology, and they did have a profile of having rheumatic heart disease, that there were more females, they were younger, there was a high incidence of heart failure and a high incidence of TIA and stroke.     The bottom line here is whether the patients had mild mitral stenosis or the other forms of valvular disease that I just mentioned, that they benefited in an identical fashion from the 150 milligram BID dose of dabigatran and the one 110 milligram BID dose of dabigatran as those patients without any valvular disease. The bottom line is that clinicians can use dabigatran with equal confidence in these patients with valvular disease as in patients without valvular disease.   Carolyn: Thank you Michael, that was very reassuring and something that is very clinically important. Shinya, I'm going to ask a different question. First, maybe your take on the findings, and secondly, what was it like handling this paper across the globe as the Associate Editor Managing this?   Shinya: That is a very important point. The past as Michael pointed out, this paper is very important to remind the clinician of non-valvular atrial fibrillation is not really non-valvular atrial fibrillation, and there is no difference between valvular atrial fibrillation except mitral stenosis and prosthetic valve. The result is similar to non-valvular atrial fibrillation in regard to the effect of dabigatran or by warfarin. That is the one point I have to assure. As a part, it is very important. We are now including many patients not limited in that North America, Europe. We are participating a huge number of patients from Asia. The results is applicable to the global level. We are now leading in that global evidence-based world and RE-LY is one of the good example for the global trial testing the hypothesis with [inaudible 00:13:58] over warfarin.     Michael made a very good summary of that, not only limited to RE-LY, he talked about as our trial like ARISTOTLE and the ROCKET trial. All of the NOAC trial include patient who is valvular heard disease, and the exclusion criteria is a little bit different. Michael beautifully summarized that difference in the table, in his paper.  There is a strong intention to publish this paper integration from all the editorial of old member. This is a very nice paper.   Michael: He's been very kind, that's very nice. That's true. In fact, the results in RE-LY were compared in an indirect fashion with the other trials, ROCKET and ARISTOTLE, through have published similar papers on patients with and without valvular heart disease. Just in summary, the bottom line is that this finding in RE-LY is highly reproducible in the other two trials so this is an important finding that is reproducible and true of the three novel agents that had looked at this in detail.     The other point that was raised is that there were differences in the exclusion criteria in these trials, but at the end of the day, the Europeans and the Americans in terms of guidelines, had fairly similar recommendation. For instance in the United States, it was felt that all patients with valvular disease could be anti-coagulated with the novel agent unless they had rheumatic mitral stenosis, mechanical or bioprosthetic heart valves, or patients that had undergone a prior mitral valve repair. The emphasis was that all other patients could be included.     The Europeans differed slightly and that they agreed that mechanical prosthetic valve and moderate to severe mitral stenosis should be excluded, but they were somewhat more global in recommending inclusions of all other valvular conditions. There is a slight difference then between the European and the American recommendations and guidelines.   Carolyn: On that note of looking across the world at the guidelines and what these results mean, it really leaves me to congratulate you Michael on such an excellent paper, and Shinya for just managing this paper so well.   Michael: Thank you.   Shinya: Thank you very much for your invitation. Bye-bye.   Carolyn: You've been listening to Circulation on the Run. Thank you for joining us today.    

Michael: Hello everyone, this is Michael Gross of OptionSellers.com, here with your monthly guest expert interview. This month’s guest expert is Don Singletary, author of the Options Exposed Playbook. Don spent 25 years as a consultant for commercial commodity hedge plans, helping him to implement option strategies to lower cost and increase their efficiency. He has also spent much of that time as an individual options trader. He is going to bring a unique perspective on that to you today. Don, welcome to OptionSeller.com Guest Expert Series. Don: Well, thank you very much, Michael. I’m glad to be here. It’s my pleasure. Michael: Don, let’s start off by telling us a little bit about your background and how you got started in the trading industry. Don: Well, there is a lot to talk about today about options and making money, so I’ll get to the buy out part pretty quickly here. I started in broadcasting at the age of 15 and I grew up in a small town that only had 2 radio stations. I worked for both of them- they used a different name at each one. While I was in high school, I became a licensed broadcast engineer, continued electronics in the Air Force, worked countermeasures during the Vietnam era, and worked for the Motion Picture Bureau at the Florida Department of Commerce and Economic Development. I had the pleasure for several years, a week every month, I spent in Hollywood, California. It’s a pretty remarkable “bubble-world” out there, and it still is. Patty and I were just starting a family in those years and that took a lot of travel, so I gave being a stockbroker a try. One of my specialties there was introducing customers to the covered call writings, sort of a specialty of mine. Now, back in those days, in the mid 1980’s, it was very much a bull market. I think a drunk monkey with a dartboard could’ve made money. As luck would have it, I got to be a broker during those few months. I got a good offer to teach at a technical college right before the big bust in October of ’87. I took a lot of my customers in cash before I left, not because I was smart or I knew a market crash was coming, I just needed to make a lot of money and they had become friends of mine and I didn’t want to leave them hanging. I kind of put them all in cash and gave them a proper goodbye. Now, when the market crashed 30 days after I left to take the college professor job, my clients thought I was a genius. That’s certainly not true- I was just lucky! So, the greatest work and financial undertaking I ever had was the last 20-25 years. I never saw it coming. I don’t think anybody grows up to be a consultant to private corporations for risk management. I never even knew such a thing existed. I spent thousands of dollars on commodity books and the best option modeling software that I could ever find, and I bought a few of the newest and most powerful computers in the early 90’s. I think I thought I was going to be a trader and make a lot of money, but fate stepped in. That was coming, but it’d be later. It was something I never even thought. I got a call from a commodity producer who’d seen some of my option modeling that I’d faxed to a buddy. That phone call resulted in the working in risk management for the next 25 years. I got to work with some amazingly smart and creative people at the top levels of some major corporations, and it was just my good luck. I really got an education that money can’t buy. Michael: Well, we’re hoping you can share some of the pointers you picked up there with us today, Don. I know one of the reasons we wanted to have you on was that you kind of have a unique insight and you have insight into the commercial side of this business, but you’ve also been an individual investor, so you have insight into that side as well and can give maybe people a perspective from both sides of that coin. Before we get into that, Don, I want to talk just a minute about you book, Options Exposed Playbook. Just a great options book for anybody that’s interested in learning about options. Don does cover some option selling strategies in there that I thought were very excellent discussion of. Don, you told me a great story earlier about how you came about writing the book. Can you share that with our listeners? Don: Yeah, I’d be glad to do it. I was winding down my standards of risk management consulting, and I decided to stay home. There’s an old saying by Ernest Hemingway that says, “I drink in order that my friends are more interesting”. I wanted to take some time off and give that theory a test. Fate wasn’t to be. A friend of mine had called and we often talk investments. He said “Hey, I got something here I have to show you. I want to get your opinion. You’ve got to see it!” I said okay. So I met him for breakfast one morning and he showed up with two or three pages he had printed out on the Internet. Attached to the papers, the first thing I saw was that he had already made out a $3,500 check to some investment guru to buy this system. Now, my friend, he’s usually not that excitable, but he was just real excited and said “Look here”, he put his finger on the paper, and I read with him. It said “98% winners for 5 years”. It promised that anyone could probably turn $25,000 into $2 million in that 3-5 years, and that it would only take a couple hours a week, and it took almost no work. I stopped believing in the tooth fairy a long time ago. There are people that live in Austin, Texas in a little bubble who still believe in him, but I’m not one of those. So anyway, I took a good look at the pages he gave me and this magic system used vertical credit spreads, covered calls, and iron condor spreads. It promised the subscribers all they need to make themselves plenty rich with almost no work and in quick time. Now, years ago, I did a stint in the Air Force and I lived a while in West Texas. West Texans have a colorful way with language, so I told my friend a little saying I picked up back in those days in West Texas. “If a fella comes at you with a ten gallon hat pulled over his ears in an ear to ear grin, and he seems too glad to see you while shaking your hand a bit too much, you better look down and make sure he ain’t peeing on your boots”. We’ve all seen them, and we get these kinds of things in e-mails and in the regular postal mail all the time. By the way, Boone Pickens didn’t say that, but maybe he should. I took a couple of sheets and scratch paper and I showed my buddy how to do these pre-strategies. I had a little experience with them doing options. But I just told him, this is all the guy is really doing and he is doing it over and over again. Personally, I don’t believe for a minute the fantastic claims he makes. My friend interrupted and said, “Well, if he’s half right, I’m going to do really good!” I said “Yeah, that’s true! I can’t argue with that!” After I took a couple of pieces of note paper and scratched out some diagrams and made a few notes, suggested a few places where he could find some more information, he tore up the check and he said “You should write a book about this”, and I was giving my friend all the reasons why I was not, absolutely not, going to write any book on options right now. I left that meeting thinking that I had done my good turn for the day. When somebody tells you not to think of elephants for the next 2 hours, every time you close your eyes it’s all you can see. So, I started thinking about it if I was to write this book. I’m more or less retired now, but if I were going to write this book, what would be in it? Before I knew it, I was consumed by it and it only took about 10 weeks to write the book. That’s the Options Exposed Playbook that I have and I was a lucky man as far as selling really well right away. I got very interesting e-mails from a lot of readers. Some had absolutely no experience and ranging all the way up to Ph.D’s who were asking me about the inadequacies of the Black Scholes Formula, and that’s a conversation that I did not want to get into. Before I finish this story, I was preparing for this interview this morning, and here’s one here from The GURUS Selling System. It says “I know I’m reaching you on Sunday, so I’ll be brief, but you’re about to miss out on the best opportunity to make money you’ve ever seen….You see, this guy selects trade recommendations with a high probability of doubling your money. For example, on May 16th, made 106.9% gains in 3 days. May 17th- 70.4% in 2 days. May 23rd, I made an amazing $8,000 in 24 hours.” Now, these kinds of ads prey on people. Often, it’s people who are desperate who could believe an ad like that. Here’s another one that says “Just 7 days, you pocket $2,000 on one trade and you make $725 the next day in 4 short days. You make another $950 and people make $100,000 a year this way”. These types of ads cater to people- not a sophisticated audience, but they cater to people who are hardworking people and think like my friend did that if they’re half-right, they’re going to make a fortune. One of my motivations in writing that book- I don’t spend a lot of time in it bashing these kinds of systems, I think that’s a waste of time- I simply wanted to save beginner and small intermediate investors, beginners small and medium sized accounts, I wanted to save them from playing the slot machines. I noticed in your book and mine, as we did this completely independent from each other years ago, we used casinos as an example when we talk about selling options. In my book, there’s a line in there that says “You went to a casino and the manager said ‘you’re kind of stupid. We’re only going to let you play the slot machines’.” You can’t sell options if you’re not sophisticated yet because you don’t have the experience. The slot machines pay out 95-98% of the money that’s put into it, and there’s always somebody that’s at the machine ringing and flashing its lights. When I go to Las Vegas, the first thing I do, just to remind me where I am, is I go down… Las Vegas is a Petri dish for human behavior, and I’m a people watcher…. I go down and I pick out rows of a hundred slot machines. At any given time, one of them is ringing and flashing loud bells and whistles, but I’m looking at the other 99 who all have losers sitting in front of them. Those things are like parking meters. The more you play, the more you lose. I think buying options can be that kind of game, but somebody hits it big once in a while. It’s like playing golf- you tell somebody about your hole in one you made for years, but you never talk about the ones you lost flushing them into the woods. I think investing and gambling may have some of that human behavior in common. There’s an old saying that says “Experience is what you get when you get what you didn’t want”. I’ve had a lot of experience! Michael: Well, your experience has certainly resulted in an excellent book, Don. Wanted to congratulate you on that and certainly recommend that to anybody reading the book. I wanted to go back and touch on the point you made about the guy selling courses for thousands of dollars, and usually selling them to the people that aren’t really educated that much in trading, although not always. Even experienced investors sometimes will buy these courses. I don’t want to bash all of them, because I know some of them have some good information. Don: Sure they do, Michael. One of my favorite books is by the old guy Will Rodgers. It’s what keeps me humble- that and investing. He said that everybody’s ignorant, just about different things. When I’m talking about neophyte investors, who earnestly are hardworking people, are very prodigious people in their work and their demands, and they’re just trying to do better, their motivation is absolutely stellar. Anyway, go ahead. Michael: Sure, no, that’s a great point. But there are a lot of these courses at there that they are charging these thousands of dollars for promising outrageous profits. In fact, I wrote about one in the upcoming newsletter where there’s a guy on CNBC now that said he took $4,600 and turned it into $460,000 in 2 years. I would be a little skeptical of those types of claims. The thing about it that a lot of these people don’t realize, even these courses that are good, a lot of that information you can get by picking up a couple of books for $30, $40, $50 a piece. Your book is a perfect example. When I talk to you about this book, I said “So, are you selling a course? Do you have a seminar?” and you said no, I just wrote the book to help people understand how to do this, so you don’t have anything you’re selling. It’s purely a book that is showing people option strategies that have worked for you, kind of bringing a perspective of both the personal and individual investor side to it. When you wrote the book, what would you think the biggest difference is or maybe the biggest advantages of being a commercial player or the advantages of being an individual investor? Don: That’s a great question. A lot of people- just hate the word hedge fund, which when you’re in risk management working with a corporation, usually ad commodities, it’ll be something like cotton, coffee, or orange juice or sugar. The goals of the commercials and the individual speculators are almost polar opposites. In helping people with their commercial risk management plans, and the term hedge fund is not the same as a fund you use to hedge for risk management. I don’t want to get into the semantics of it, but there is a big difference between the two. Commercial players I work with and the people who use hedge funds, their motivation is to preserve their capitol, to eliminate risk, and to get the highest possible margins on their products that they can. Now, some of them are selling commodities and some of them are buying them, and these can be commercial players on both sides of the same market, of course. It’s not just the speculators vs. the commercial players. I’ll give you an example: Maybe a speculator is selling a $5 bushel call for a relatively small premium and maybe this plant makes ethanol and has to buy corn. If corn goes over $5 a bushel and he has to pay that price, then he’s not going to have much profit margin, if any at all. So, what he does is buy a $5 corn call and if pollination doesn’t occur right, or weather gets too hot, or demand ceases or whatever the reason, if corn prices soon pass $5, instead of going out of business or having a year so bad he has to work the next 2 years just to make up losses, then they buy $5 calls and pay too much for their product, corn, which helps them make ethanol. At the same moment, somebody else on the other side of the market is saying, maybe a speculator, “Boy, corn has got some of the lowest stocks it has had in 5 years. Last year topped at $4.60 and maybe it’ll hit over $5 this year. Maybe I can afford to spend a few hundred dollars to bet that corn prices are going to hit the ceiling. Then, these two orders at the markets someplace meet, the transaction occurs, and everybody’s happy with what they did. It’s just about a zero sum gain. I don’t really see what we did. In fact, we used to have a rule and I explained this to my customers because I knew the CEO’s I was talking to would be talking about risk management. I discouraged them from using the word “profit” at all, and substitute the word “margins”, because we don’t care. We lose a bunch of money in a risk management account, and they say they’re startled to hear me say that. I say “Well, if it means you make more profits, then that’s fine! A higher profit margin is the goal and we’re not going to call them profits because they aren’t profits for the company.” Motivations in conserving capital to get rid of price risk and delivery risk, weather, or government upheavals, or changes in the laws and all those things. Plus, frankly, in the risk management programs, they can make some very creative contracts about buying options that they can offer their potential customers to give them an edge over their competitor…. things like that. Michael: Okay. So, a lot of the things you did in the commercial side of it was really helping to manage the true definition of hedging, where you’re helping them manage their risk for the price of the commodities they’re actually working with, whether they’re taking delivery or selling them. You have speculators on the other side that are taking the other side of those trades and both sides are getting what they want. Don: Many times, I work for an orange juice company, _____, at a processing plant, and they had a lot of their products sold, but they still had millions of gallons of orange juice in the tank. It wasn’t priced yet, it wasn’t sold, and they had uncertain profit margins to consider. Another of my clients, at the same time, was on the other side of the market. It was a very large grocery store chain, and they knew how much shelf space they had for orange juice, and they knew from years and years of selling orange juice about how much they were going to sell in the coming year. All the orange juice they know they have to put on the shelf but they haven’t bought yet is a price risk to them. If you had a freeze and all of the sudden prices went up and people who couldn’t even deliver the orange juice because of the damaged crops, the grocery store still has the same shelf space and demands from their customers. So, they would hedge and release themselves by selling options and contracts to speculators, they could insulate themselves so the contingency of price and delivery risk, that kind of thing. What’s fascinating is I felt like Dr. Jekyll and Mr. Hyde for working both sides of the market, but, actually, they weren’t really at odds with each other, they were at odds with the risk that was in the market – and both of them could successfully make trades to help meet their margin goals. Michael: Yeah, that’s a great point. A question we get often here is, a lot of people ask, “Well, you guys are selling these options. Who’s buying these deep out-of-the-money options? Yeah, sometimes it’s other speculators that are buying lottery tickets, but a lot of the time it’s these commercial players that don’t want to buy them, they have to buy them to insure their business. It’s like buying insurance. Don: Absolutely. It may be from a speculator who said, “Man, I’d never do that. Who’s crazy enough to take the other side of this trade?” 80% of the options expire worthless, as you point out in all of your material, too. That’s pretty good odds from the start. The thing I love most about selling options, and this is all in your book and mine I supposed, it doesn’t demand that you have to guess price direction. The amplitude of the price changes, nor do we have to do that within a defined time. Buying options is like standing on one leg and shooting at a moving target. Selling options can be like making a partnership with gravity. Gravity and time decay both work regardless, rain or shine, 24/7, in all kinds of conditions. They’re not dependent on the stock market and commodities, and they don’t depend on public opinion or on anything. One of the things about the financial channels, and, you know, this is July of 2016 and we’re in the middle of this presidential thing going on, which is the real Petri dish of human behavior, I think. It’s interesting no matter which side you’re on. It’s just crazy what the news channels do. It was all about the candidates a few days ago, they were running out of news, they were getting in experts to talk about every contingency that might happen. It was a slow news day, so they would take the small stories and somehow embellish them a little bit and bring them to the top so they could keep listeners, so they can sell adds, so they can make more money. It’s really funny on the financial channels, they even do that. This tragedy that happened in Orlando, Florida 2 days ago, now the financial channels are not talking about politics, but they’re talking about terrorism and what that means to investments and which investments would be best if there is a terrorist attack. These guys, with all do respect, they have some very bright people, but they have a tough job. They have to show up every day to a non-scripted program, and this goes for network news, too, and they have to take whatever is in front of them and make it sound like the sizzle on a steak and sell it to the listeners every day. With TV, they’re able to do that. Aaron Spelling, I think it was, said one time “The TV, you don’t have to be really good at programming because TV is a medium that has a default that’s kind of the most effortless thing to do- you just sit there and watch it.” I do it, everybody does it sometimes. It’s a rest for your brain sometimes, or whatever your reasons. It’s interesting and all of this fast Internet information everywhere we can get, it’s a lot of toxic half-truths and innuendo information. My mother-in-law, who’s in her 90’s, I tried to keep her from watching the news because she would just buy a new lock to put on the door every time she saw the nightly crime report. I think investors made that mistake when they watch the financial channels, and maybe some of the other news. It’s just a type of telescopic fear. It’s like you never think about an asteroid hitting earth. Matter of fact, just 3 weeks ago, there was a comet that came within 2.2 million miles of the earth and it was ½ a mile wide, and it would have had a giant impact and probably killed hundreds of millions of people. But you didn’t hear about that in the news, and we’re always in that unlimited risk like that, or satellites breaking, or things like that. I think unlimited risk gets a really bad rap because people are always taught to be afraid of it. There’s some merits that you go into in some great detail, and you and James Cordier’s material about what unlimited risk is and what other people sometimes fear. There’s a way to understand it and a way to be able to use and to do it intelligently and within the laws of a very good mathematical probability. You guys do a great job with that. Michael: Thank, Don. I appreciate that. You made a great point there I want to go back to for just a second, because I think it’s important and we talk about it a lot as well. The role of the media in both stock and commodities prices… we talk about, in some ways, you can actually use it to your advantage. The way you do that is by doing your own research or knowing where to go to look for that fundamental research on your own, and knowing what’s important and what isn’t, because if the media, like you said, they have a slow news day or they feel like covering something, they can take something that’s really, in the big picture, somewhat insignificant, and make it seem like it’s a big story for that individual stock or commodity. That can move the price- maybe not for the long term, but for the short term. If you know what the real story is, you can take advantage of that as a trader. It’s one of the reasons we spend a lot of time on fundamental research here and we recommend individual traders, if they’re trading on their own, they do the same thing. Don: Right, and that’s another reason why I love commodities. I have great respect for the work that you and James do there. It’s because you study the fundamental information on these markets. You know where the corn stocks are, you know the seasonal patterns, you know when grain pollinates, you know when the harvest begins, you understand world market, and you understand the United States Market. There was a story on TV on something that kept the commodity prices really not in sync with the true supply and demand. You have the ability because of your experience and because you stay up on these things- that’s your job. You can talk with your investor and let them know that it’s a puff news story or rumor or whatever. A number of years ago, there was one case of mad cow disease in Canada or someplace that crossed the Northwest United States. This sent ripples through the commodity markets, just on potential that we might not be able to buy a steak in 6 months. As a result of that, on down the line, prices went way up on the cattle. A lot of people that thought they wouldn’t be able to afford cattle got rid of the breeding stock and we’re still recovering from that, even though it was years ago. It takes a specialist in commodities and in these markets. Each market can be very specialized, and I don’t know very many people, any people, who are good at all the commodities markets. I know people claim to be, but I’ve never seen it and I’ve never heard of it. You have to go with 4 or 5 markets that I’m familiar with and have experience with and it’s kind of like writing a book. You have to write what you know and you invest what you know. You take things that you have all that experience in, rather than take a whack at something that might look attractive temporarily but you really don’t understand the market. That’s the value of having somebody like you at Option Sellers. These high net investors you serve, that’s the pivot and the very heart of what you do. The other side of that is being able to know the math and understand the mechanics of the market and things like seasonal volatility, and you incorporate fundamentals in there. With a high net worth investor, they can do things that most of my readers probably will never be able to do. They have a large enough capitol. You take a small investor that’s just starting out and maybe has an account of $10,000. There’s no way he can afford to draw down $5,000 the first week he makes a commodities option investment. I find net worth investors are not only able to tolerate that, but able to use the system that you guys use. I think it’s amazing and they can have a great deal of success with that. The huge benefit to investor for the types you do, I don’t recommend people start off dealing with a highly complicated commodity market, and the strategy that might be a naked option with unlimited risk, because, for a small investor, that can put you out of business in 2 days. You’re done. I teach that we’re going to start this way, we’re going to practice it, and we’re going to build it slow and sure and they can be able to do that. They can’t afford the same programs you offer for high net worth investors. For the people who do fit that category, I’ve never seen a better way to do it than what you guys do. Michael: Well, I appreciate that Don. I do, that’s a great point to make, as well. I do agree with you. I think there are some advantages of economy of scale when you get into and working with higher dollar amounts. Obviously, that’s one of the reasons why we have our minimum where we do. There are strategies that can fit almost any size of investor. It’s just a matter of matching the strategy. Let’s talk about that a little bit, Don. You’ve traded commodity options, you’ve traded stock options, do you have a preference for either one or an advantage(s) you think one might have over the other? Don: Yeah, well, like you just said, you’ve got to find suitable investments for the right advisors. For myself personally, since I have a lot of experience in both stocks and commodities, I stay in both. To me, normally, people will trade stocks first because some of the volatilities and some of the limits on all the smaller accounts, and they will start off in stocks and things. Those are the people that I suggest in my book a great deal, and I don’t talk a lot about commodities in there because I don’t want to give beginning investors the impression that they can make a killing in commodities. I’d start to sound like one of those ads I read a moment ago. Those things are doable, but they have to be doable to the right investor. Giving advice to my readers, one of my favorite trades is the vertical credit spread. They can put a capitol on a risk and make a relatively high return in 30-60 days out selling some options, and then they buy an option further out-of-the-money so they put a cap on any lawsuits they might have. When you do that, you can compute the risk of war ratios and it helps you with your money management in the account. Just like a floor trader, your first job every morning is to get up and survive to invest another day in preservation of the capitol, whether you’re a large investor or a small one. That’s number one above everything else. Now, I don’t get paid for selling any advisory services. I just do not want to do that. I ran around for a long time and managed a lot of money in hedge accounts and things, so it’s not something that I want to spend, at my age, the rest of my life doing. So now, I just love being able to write and share some of the information every day. I had a note here that I wanted to go over with you… These days, the old pros that learned years ago when they were doing Black Scholes computations, slide rules, it’s so 1985, to tell new investors that you don’t have the experience, you’re better off not even going with those options at all. You go find yourself different stocks. I read a Warren Buffet story one time that had a great impact on me. You remember the old mutual funds, and still many people have them these days. The ETF did kind of a better version of some of that type of investing. I don’t miss mutual funds lately, but I don’t choose investing in them. It’s because of what I read that Warren Buffett had said. I’m paraphrasing, “If I own race horses and I have a stable of 80 horses, and I know that 10 of those horses win 90% of their races. I’m not going to run all 80 horses, I’m just going to run the winners and stop picking now when the market has a new normal because of the news channels, the types of investments, and the sophistication. I think you have to find some winning bets. Frankly, 80% of options expire worthless; they’re certainly investigating to be able to go there. But you don’t race the whole stable, even though they are all thoroughbreds, because you just tend to jot down your profits. We live in an age with Internet and all the toxic information along with the good. The trick is being able to shift that out and to be able to discern which kind of investment is right for you.” I think Warren Buffett was on to something there. You know what they say about normal- it’s just a setting on the dryer. None of us are normal. Our needs and aspirations and everything are just not the same. I think those are decisions everybody has to make for themselves. Michael: I love that analogy of the racehorses and I also like the way you applied it to the options because it really does carry over like that. As you mentioned, if Warren is listening to the OptionSellers.com Radio Show, we certainly invite him to call in and give his opinion on that. Don: Well, he has been known to make millions off of covered calls. Michael: I know. It’s surprising if you go in at times in different part of the Wall Street Journal articles about who bought or sold these many options in the options market, and you don’t picture guys like Warren Buffett and Carl Icahn making these big option trades. You see them taking positions in stock, but they sell a ton of options. It’s well documented. Don: They’ll buy a great dividend stock these days that’s 2 ½ or 3% and then they sell covered calls on it. I don’t have their numbers in front of me, and I never will, but they might be able to make 5-15% more a year depending on the markets and the timing, but they can make a very nice return. Putting your money in the bank these days, you remember the old rule of 72... you just divide the annual interest rate into 72 and you get the years that it takes to double your money. If interest rates are 2%, it’ll take 36 years with your money in a bank savings account in CD’s to be able to double the money. For most of us, that’s just not acceptable. Michael: Yeah. I agree. I want to go back to something you mentioned because I did want to re-visit your book for just a second. You describe some really solid option strategies in there, but you said your favorite option selling strategy, you preferred vertical credit spreads. That’s one of our favorite strategies, too. Can you maybe just go through a quick description of how you would write that if you’re writing it on a stock or commodity, for instance? You probably talk about stocks in the book, so maybe just talk about how you would do that on a stock. Don: Sure. Well, first of all, I’d pick a stock. The nice thing is, and you go over this in your material too, anybody selling options has to understand that one of the major advantages is that I don’t have to guess prices direction or the amplitude of the timing. I just need to know where I think the stock price will not go. Then, in ¾ of the time, I’ll make money with it. That’s the whole thing. Vertical credit spreads limit themselves to this. If I had a stock that I think is going down or that it has already gone too high, I don’t try to press the reversals, but maybe it starts reversing. You want to be able to try and sell some options. With the market near it’s top all-time highs now, there’s a school that thinks it’s going higher, a school that think it has got to turn around and go lower, citing the bad economic news given daily now. I have no idea which one is going to be right. That’s why I don’t sell the apart, out-of-the-money call if I think the stock is going down. That leaves you with unlimited outside risk, because if price overruns your strike price, you’re going to be in the hole- it’s going to cost you and you’re going to lose money. With a vertical credit spread, you go just a little bit above the strike price. You go a little bit above the price where you sold the call and you buy a cheaper, less expensive call, and that puts a cap on your potential losses. So, with a cap on your losses, let’s say you’re a beginning option writer in stocks. You may collect $150 in premium by selling the call at a lower strike and then by buying one of the higher strike you might spend a third or a half that money, say $50 out of $150 to put a cap on your losses. So, if you have losses that are at the most $500, and you can make $100 profit off of it, that’s 20% in 30-60 days, which is great return on your money. Michael: Now, that’s a great strategy. I was glad to hear you say that because a lot of books and going back to some of these courses out there, they’ll talk about things like converted butterflies and everything. I know those can have their place, but a lot of times, especially for individual investors, they can be difficult to implement, especially if you’re doing it on a larger scale. We always say simple is better and vertical spreads are a great, simple strategy that can also be very effective. Don: One of the things, I get a lot of e-mails from my readers, and a lot of these people have never dealt with options. Most of them have little stock experience. A lot of them, frankly, are young millennials who had a couple of babies, they’re married, and they’re working as hard as they can, and they have money saved and they want to be able to use their laptop or iPad or whatever it is to be able to fiddle with options to try and make a little extra money. Of course, I try to tell them fiddling is not the preferred word and let’s get to work. You can make some money that way, but you have to be very, very careful about what you do as part of that with money management controlling your risks. The vertical credit spread and small steps are able for that. Another thing about most of the e-mails I get from my readers- almost everybody and I think that as a society, the financial planners have taught us to think this way. Maybe they’ve heard too many bank commercials, I don’t know what it is, but people immediately start thinking in terms of making thousands of dollars over years of time. I think that doesn’t allow them the focus that they need. It’s fine to dream and have a plan, we all do it, but when you wake up in the morning and you have something in front of you that you have to deal with, investing some place, so I try to tell them just to find an easy goal. Maybe start with trying to make $50 or $100 a day or a week or whatever suits their account. That’s very doable. You can’t get up in the morning and make several hundred thousand dollars and put it away and wait 20 years to collect it. I suppose there are some ways you could do that, but for an individual investor, you have to deal with what’s in front of you. I think trying to help people focus their attention to something they can do right now to begin to achieve some of the longer-term goals is the way to go. Michael: Yeah, that’s a great point. It’s a great discussion on options there, Don, and I appreciate that feedback. Let’s just talk a little bit briefly here to talk about how you pretty much trade for a living now. Would you say that’s a fair assessment?... or professional trader? I know you trade a lot of your own money, but do you have an opinion on the stock market right now for 2016? What’s your outlook? Don: Well, it depends on what the talking heads on the network say. What’s so funny to me is that those guys can come out one day and explain a bull market and then get up the next morning, go in at 6:30, and they’re talking about the bear market that we’re in and they never bat an eye. They can change. There’s a reason for that- it’s almost impossible to forecast what the market is going to do next. I can’t do it- I’m not that good. For that reason, I choose options and I try to make my money by knowing probably ¾ guess on what’s not going to happen instead of trying to predict what is going to happen. I think my odds are a lot better. I know it’s a disappointing answer, and when they get these experts on CNBC or wherever, at the end of the interview they say, “Well, what do you think about the market?” They always have a good answer and then they back-petal a little bit. Then, when it’s all said and done, I’m thinking, “What exactly did you say?” It’s confusing to me. I can’t tell the future. All of us can connect the dots backwards, but trying to do it forward is just impossible, which we talked about the other day. Nassim Nicholas Taleb has a book called Black Swan, and it’s about improbable events. If you’re a little bit of a sophisticated investor and you love to figure the odds of investing I think it’s a must-read. It’s a really interesting book. Whether you’re an investor or not, it’s a little walk down probability and philosophical terms. Michael: I’m familiar with the book. It’s a great book for especially sophisticated investors- somebody that’s really looking to get into trading and understand the nuances of it. Your answer was not disappointing at all. In fact, the guys that say “I don’t know what the market’s going to do. Nobody knows what it’s going to do”, those are usually the guys that really know what’s going on. I like that answer. Don: It’s like you say in your new material- sometimes you can take a news event or whatever happened, whether it’s stocks or commodities, sometimes those over-reactions or under-reactions can present some great investment opportunities. Michael: I agree 100%. One of the things we like to say is, and it takes people a while to get their arms around that, because it’s almost the opposite of what everyone else is doing, but you’re saying “Look, I don’t know what the market is going to do. I’m just going to pick something I think it’s not going to do.” Once people can understand that approach, it changes their whole outlook on how they invest. Don: That’s right, and a lot of people will tell you otherwise. But by and by, just keep your boots dry. Michael: Yeah. That takes a minute to think about, but that makes a lot of sense. Going forward, I know we’re not making predictions here, but do you have any favorite sectors of stocks or commodities or anything you’re keeping an eye on for the rest of 2016? Don: Well, I think part of the new normal that is developing, and we don’t know if it’s right, hindsight or not, but I look at the individual stocks and the ones that are my favorites are not gambles on new technology, but trends because of disruptive technology. The greatest example of that right now is a stock that I own known as Amazon. To these people, there seems no end. Half of their income now is from AWS, Amazon Web Services, in this cloud computing that they’re selling. They’re not even famous for that and it’s half of their income for the company. I’ll be the first one to tell you, on our way downtown, my wife asked me the other day what I want for Father’s Day. I said, “Well, I have a few items”, and she said, “Well, I’ll take you shopping”. Immediately I’m thinking, “Whatever it is, I can get it cheaper on Amazon and have it here in 48 hours”. I’m guilty. I know people do this all the time but I’ll admit it that I walk into brick and mortar stores and I’ll find something there and I’ll just think that I can make a better deal by internet shopping. I’ve done it for years. I’ll step outside the store and get a cup of coffee, get my iPad, and I’ll order one. A lot of retailers get mad at me for saying that, but it’s just the elephant in the room- that’s what people are doing. Not in every instance, of course, there is still people who enjoy going through the deals and being able to go out, it’s a social activity. When I need something, I’m busy and I don’t want to spend 30 minutes in the car to go down and buy what little item I needed- I’ll just order it online. Again, that’s my point with disrupted technology. This is what happens for investors, too, specifically smaller investors. Maybe you and I were investors a few years ago and we didn’t have the same information the pros have, we didn’t have instant quotes, and our smart phone has more electronics in it than the Apollo 11 Moon Mission to put a man on the moon. Commissions have fallen- first it was the discount commissions, you know, Charles Schwab and those who were innovative in that area. Now, electronic trading on a portable computerized device - iPhone, iPad, Tablet, Microsoft, whatever it is – that has displaced a lot of the brokerage business. For small investors who want to use self-directed accounts, it’s a perfectly great way of doing it. Conditions are low and you have the same (virtually) news and quotes that the pros have. Of course, for high net worth investors, they have the option because of their accomplishments of being able to probably find an easier entry point by finding somebody like you guys. Michael: Well, yeah. I agree with your assessment there. Disruptive technology is really affecting almost every industry. It’s certainly a sector to keep an eye on if you’re a stock investor. Don, just on a personal note, what’s your favorite investment book? Not counting yours or mine… Don: Well, like I say, although it’s not written as an investment book, I like books like Black Swan. I’m a voracious reader and I always have 2 or 3 books going at one time. I’ve got all 3 of the Taleb books right now and I’m alternating between them. There’s such good information out there in many things. I’ll just say Black Swan for right now, it’s not the book of a lifetime, but it’s one of the books I find pertinent in the type of environment that we have to invest in. We have to be aware and keep in mind those black swans – if you’re read the book or heard those terms, those are things that seem to come out of the blue and they’re totally unexpected but they have a very profound and lasting impact on society and culture and finance and everything else. It’s a wonderful topic and it’s very interesting to explore. Michael: Absolutely. Don, how can investors buy your book? If they want to get a copy of it where can they go? Don: One word: Amazon. The quickest, fastest way to get the best price, just go to Amazon.com and you can search for Options Exposed Playbook. That’s it. Michael: Excellent. Well, Don, this has been a great interview. We really appreciate you coming on. We hope you’ll be willing to come back again sometime to give us some great information here. Don: You bet, Michael. It is a pleasure to be able to talk with you more. I appreciate the opportunity and I want to thank all of the listeners you have out there and the people who have been reading your blog. Thank you very much, good day, and I’ll see you later. Michael: Great, Don. Thank you.

Michael DiMartini from Everest Bands come on the show to chat and share his success with us. He's gone from failed businesses to two successful Kickstarter campaigns and an amazing product line sold through Shopify. Michael doesn't just sell watch bands. He sells literally the best rubber watch strap made- and it's for a Rolex. We discuss: What Everest Bands is all about (it's more than just swiss rubber) What goes in to a successful Kickstarter The ROI of Facebook likes What it takes to be a luxury brand The Apple Watch Michael's favorite watch And his single best tip for Shopify store owners. Check out Everest Bands Shopify store or their Facebook campaign. PS: Be sure to subscribe to the podcast via iTunes and write a review. iTunes is all about reviews! Full transcript [opening music] Announcer: This is the Unofficial Shopify Podcast with Kurt Elster and Paul Reda, your resource for growing your Shopify business, sponsored by Ethercycle. Kurt Elster: Welcome to the inaugural episode of the Unofficial Shopify Podcast. I'm your host Kurt, and with me is my business partner and co-host Paul. Paul Reda: Welcome. Hello. Kurt: Joining us today is Michael DiMartini from Everest Bands. He is one of our favorite clients, a Kickstarter success, a manufacturer and a Shopify store owner. Michael, it's around 3:30 there in St Loius, what are you up to? Michael DiMartini: Well, if it was Friday, I'd be drinking a cold one. Kurt: There you go. Michael: Obviously, I am excited to do this first inaugural podcast with you guys and really appreciate it. Super excited to talk more about our company and Shopify and the great job that you guys have done for us. Kurt: Thank you. Tell us a little bit about Everest Band. What's an Everest Band? Michael: About two and a half years ago, my partners and I came up with an idea for a rubber Rolex replacement watch strap. Now, two years later, we had a successful Kickstarter with our first rubber strap. We are on our second version now, made in Switzerland. Just recently, last month, we had our second successful Kickstarter for a leather strap. It was a wonderful experience. Thank God for Kickstarter. Kurt: [laughs] This band is made in Switzerland, huh? Michael: Yeah. Our rubber strap is entirely made in Switzerland, rubber-wise. We actually have a steel oyster link that is attached to it and we coat that with a coating called DLC, diamond-like coating. That is actually from here on the US. Kurt: I think, I and a lot of people, we have ideas. We're like, "Oh, we got this great idea for a thing." Making a thing is hard. It's easy to have an idea. It's tough to actually get it manufactured. How did you go end up in Switzerland, asking a manufacturer to build your rubber? How does that happen? How do I get there? Michael: To be very honest, we actually had two previous versions. One was made, or tempted to be made, here in the St. Louis area. Honestly, it was a complete epic fail and we did not actually produce any straps for sale. We had a second version that was also made in the United States. That was a very good strap. We had some limitations with the manufacturer on, basically, material choices. We traveled the globe to find what we think would be the absolute best manufacturer. Honestly, the Swiss just blew us away with their technology at rubber molding. The company we use specializes in rubber watch strap molding. I can't list the names of the companies, but probably the top 10 watch manufacturers in the world use them to make their rubber straps. I actually had to pretty much beg them to take my business. Kurt: Did you pretty much beg them or did you literally beg them? Michael: Oh, no. I got on the proverbial hands and knees and literally said, "Please, please make my strap." They said, "Sure. We'll do it." How did I get there? A lot of research. Honestly, a tremendous amount of research and actually asking industry experts. I asked other watch companies who they used. Kurt: I think that's one of the things a lot of people should do or don't know how to do is, do I go out and ask people in my industry or even competitors, "What are you doing? How do you do it? Can I pick your brain?" Did you do that? How do you go about that? Michael: Yes, of course. There's a two-part answer to that. One of them does relate to Kickstarter. Whenever you're producing a product like we produce or really anything of a higher-end level, don't be embarrassed to ask others how they're doing it. For sure, other people are more than happy to help. We just started with other watchmakers, high-end watchmakers. They were very open with us. Some were, of course, tentative for giving us any information whatsoever. When they immediately found out that we weren't a competitor, a direct competitor in any way, they were more than happy to talk to us. Kurt: Really, the only barrier to entry is you psychologically just being willing to go out and ask. What's the worst that can happen, they say no? If you don't ask, you've guaranteed that you get nothing out of it. Michael: Honestly, let's call it, any entrepreneur has to have some balls. Kurt: [laughs] Right. It took me a long time to get there. Michael: You can't be fearful of being told to drop dead. Kurt: [laughs] That's a good line. That's a great quote. We should include that as a tweet. Tell me, what goes into...You got the seed money or got this off the ground using Kickstarter twice now, right? Michael: Yeah. Just a really quick back story, I had another business that was a failure, to be honest. I think that the best entrepreneur is the one that get kicked down at least once or twice and they then learn from those mistakes and take it from there. Our first business, completely unrelated in every single facet, local business, didn't deliver a product, delivered a service, et cetera, was a failure because of a lot of different things. One, we added too much debt to the business. When we were looking at the product itself, the product idea, we felt that Kickstarter was perfect for us. It gave us the ability to have a presale, so we knew if the product was worth doing. We did of course put a lot of money into it at the very beginning. The amount that we put in was a little bit more than what we got from Kickstarter, but really Kickstarter did finish line us on our first product. On the second one, we took a completely different direction. We were going not for what we did on our first one, where we were trying to get the seed money to finish the project. It was more of wanting to make sure the market place wanted the product. We, of course, used the funds to pay for the finish line of the second product. We also didn't go after retailers, for example. We just went after the general public. On our first Kickstarter, more than half of our Kickstarter proceeds were from retailers. If I was doing this all over again for a first time, I definitely would try and get retailers involved in my first product. Kurt: Now that you're a Kickstarter veteran, if you had one tip for someone who's about to launch their product on Kickstarter, what would it be? Michael: The first tip that I would give is you really have to have your crap together. I mean it. Kurt: It's a good tip. Get your shit together! Michael: Get your shit together! Don't start Kickstarter with questions, because you're going to get annihilated, number one. Number two, when I say that, I mean there are so many different levels to that. Starting with that, not only do you become an expert in your area through at least understanding the part that you're going to sell and manufacture, number one. Number two, you're going to want to have excellent pictures of a prototype. You want to have connected with the lowest level of purchasing. Usually, that's through forums and different items that are connected to some type of social media connection. Yes, get your sit together. Paul: You mentioned social media, and we think that social media advertising is sort of bullshit here. It's a lot of snake oil. It doesn't get the ROI that the social media people like to claim it does, at least in our experience. However, you have a ton of Facebook Likes and the majority of your traffic comes in via Facebook. Why do you think you were able to pull that off? Michael: That's a really good question. To be really honest with you, I think that each business has a different successful tool in some level of marketing. For example, we seem to have a product where people need to physically see it. With social media, we can present pictures constantly. When we have a Facebook Like, for example...and I'll be honest, it costs us very few cents per Facebook Like, whereas in other industries it's very expensive to acquire a Like because... Kurt: Actually, I didn't know that Likes are on like a bidding system where it varies by industry. How many Facebook Likes do you have, anyway? Michael: We have 128,000. We're probably going to achieve today 129,000. Kurt: How many did you have where you saw it really was paying off for you, in terms of sales? Michael: Probably after 5,000. Honestly, after about 5,000 Likes. Kurt: So, 5,000 is the baseline that people should be shooting for and 100,000 is ideal. Michael: Actually, to be very honest with you, our end goal for Facebook Likes for the end of 2015 is over a million. Kurt: Yes! There's no limit, so why not shoot for the ceiling? Michael: Exactly. To better answer your question, because that's a really good one especially for entrepreneurs, Facebook, Instagram, those things are free. There is no form of free marketing better that that. It costs you money to put a sign on the wall of your office or your storefront. It costs you money to have, honestly, Ethercycle do work for you. Facebook is free. Social media's free, but to make it successful, you need those tools behind you, like Ethercycle's work, like a sign maker for your outside, like a very good business card printer, so on and so forth. That is what gets you the end success. Paul: Social media marketing takes a lot of time too, which people just assume that it's a thing that just happens for free and you don't have to worry about it. There's a lot of time-suck there as well. Michael: Yeah. For my own self, as the marketing person for our company, I focus 50 percent of my day on social media. Development of it. Paul: Earlier, you mentioned forums and that really tickled something in my brain. Another one of our big clients that works in aftermarket auto parts and they do millions of dollars in revenue a year, a portion of their sale staff is just devoted to pumping up the product on forums and selling on forums. Because a forum dedicated to the kind of product that you're selling is essentially just a captured audience of people that are super interested in what you want to sell them. Michael: Yeah. A forum is a community of hobbyists, obviously. Some of them are not hobbyists. Some of those are people like, for example for us, a watch repair company. They might have access to a forum and they keep up to date on what's popular and what not. That's how a lot of our business has come from, especially on the retailer side. To be very honest with you, we involve ourselves enough to give a presentation of new products and ideas but not so much that we're going to get kicked off. Because it's a club. That's what it is. Paul: You think to swoop in and be, "Buy my stuff!" You can't spam them. Kurt: [laughs] Paul: Engaging is the word. You want to engage. Not just spam. Michael: Yeah. Exactly. At the end of the day, let's call that as it is, no one likes to be sold anything, everybody likes to buy stuff. Kurt: Speaking of buying, you're selling a luxury brand. You're selling a premium item for people who have already bought from a luxury brand. You only sell for Rolex, correct? Michael: On Everest Bands, yeah. We do have a secondary site, we don't need to get into that today but yeah. Our primary focus is Everest and Everest Horology products in general, just only focuses entirely on Rolex users, Rolex owners and wearers. Kurt: All right. I think luxury brands as an idea fascinate me. I know we've gone back and forth about it in the office. Sometimes you have to tease out, "Is this just a product with a very expensive price tag?" It's purely a status symbol. Rolex is extremely well made. It's a premium product. It's well made. At the same time, everyone knows it's expensive. Starting Rolex, brand new, is going to be eight grand. For a product like Everest Brands, it's a luxury product. How did you get to become a luxury product? What's the barrier to entry to be a premium luxury brand? Is it just a big price tag? What is it? Michael: A lot of people are trying to make things in different countries right now for a super low cost. The consumer today of course likes value but, if you're talking about a luxury product or becoming a luxury company, you have to remember that, what does the end user want? True end users. Luxury purchasers. Quality is a corner stone of whatever you're making. Second - longevity of life. Don't think that people with money have any interest in buying something over and over again every six to 12 months. They're just not interested in doing that. It's very uncommon that you see a destroyed Gucci bag or a pair Ferragamo shoes that are quite a few years old and still look excellent. Mercedes Benzes last a very long time. They're not a car that you drive for three years and throw away. At the end of the day, Everest makes a product that is the highest quality in the world. There is no better rubber strap or leather strap ever. The longevity and life of our product is very long. From a luxury standpoint, our service is extremely high. I have direct communication with almost with every single costumer at some level. Kurt: All right. A luxury brand obviously is more than just the premium price. You have to back it up. If you're going to talk the talk, you better walk the walk and have a product that's number one in its category, in terms of precision manufacturing. Then being able to back it up with customer support, so people don't even have to wonder. They know they'll be able to get a hold of you. Speaking of luxury products, premium brands, we can't ignore Apple. You're a watch guy. I'm into watches. I think partly you've got me into watches. The Apple watch was just announced yesterday. I'm dating this podcast a little bit. The Apple watch just came out. I love it. I think it looks great. For $350, I don't think you get a watch that's better. What do you think? Michael: First, obviously Everest has had its own level of getting kicked while it's down, we'll say, when we were first starting. I'm not going to kick the Apple watch while no one's even really seen it yet. Do I think it's going to hurt the hot horology world? Absolutely not. I don't think it's even going to get remotely dent Rolex, Omega, Bell & Ross's sales because, honestly, people buy those products because they love the watch. They could care less about time keeping. Paul: Yeah, I agree with you there. Hublot has nothing to worry about. But in my mind, judging by what I've read and what I've heard you and Kurt talk about about the low end of the watch industry, in terms of the low end of the luxury watches, the kind of things that are available at that price point, it's my impression that the Apple watch blows everything out of the water at that price point. Michael: Yeah. The other side of the spectrum is - not to try and compare entirely a Rolex to an Apple watch...I have a Rolex. It's seven years old. It looks brand new. I treat it well but I don't have a seven-year-old iPhone, gentlemen. Kurt: [laughs] Good point. Michael: Do I think it's going to be somewhat or something that you replace every three to four years at a maximum? Yeah. The Everest Band, for example, I am still wearing the original first single piece that came off the assembly line today and it still looks as if it's brand new. That was a year and a half ago. Again, it just goes back to the whole luxury idea. Is Apple producing a luxury product? No. They're just producing a great piece of technology that has a lot of advancements. It's not going to affect Hublot. It's not going to affect Omega. It's not going to affect Rolex. But on a low end line, say for example a Casio? Yeah. Casio, Seico, low ends, they're going to feel it. They're going to feel the heat pretty hard probably. Kurt: The sub-five hundred dollar people are in trouble. The heirloom, status symbol and $10,000 watches have nothing to worry about. Michael: Yeah. I don't particularly see that Southwest is affecting private jet sales. Kurt: [laughs] Good point I didn't figure it out that way. Michael: Lets call it as it is, but do I feel the Southwest is probably affecting American Airlines in sales? Hell yeah, gentlemen. Come on. It like $98. Give me a break. To go up to Chicago from St. Louis, I would pick that over $300 flight on American Airlines, for example. Also, there's a million of those, but I'm excited to see what happens with the Apple iWatch, especially because I watched kind of amazingly as the Pebble watch was coming down the pipeline. It was in its Kickstarter when I was doing my first Everest Band Kickstarter. We are brothers from another mother. I really feel that the Pebble hasn't really hit the marketplace the way they thought it would. Paul: I think that is true. Every smart watch that's come out. Kurt: Every smart watch, yeah. Michael: Oh yeah. Kurt: I had a Pebble watch, I thought it was an awful. I wore it like handful of times and I ended up selling it. I lost money on it. It's just not a good product. Michael: Then, on top of it, I really almost feel bad for Pebble, because they had such enormous phoenix rise at the very beginning with, I think it was $10 million in sales... Kurt: I know they broke a record for fundraising on Kickstarter. Michael: Oh yeah. Just recently the Coolest Cooler knocked them off the top. More importantly, they had countless issues. They couldn't get the damn thing out for a year. I can tell you right now, our customers were...we were late by three weeks and they were freaking out. I just feel that when it comes down to being successful, selling a product and what not, there are a lot of different parts that have to play in to it. The one great thing about Apple is that they are so well organized that this multiple-billion dollar company is going to probably hit it really well on their first version. The first iPhone was pretty sweet, but I am worried that, honestly, it could be the next Newton. I don't know if you guys remember that P.O.S. Kurt: Yeah. I love it. The only thing I can ever think of about the Newton, I think a lot of people our age too, is the Newton on the Simpsons. Paul: Yeah, "Eat up Martha." Kurt: "Eat up Martha." Paul: The main thing that is in my mind is that I don't wear watches. I don't understand why anyone would wear a watch, because I have an atomic clock that I carry around in my pocket at all times that also does things more than a watch. Kurt: It's jewelry really... Paul: No. and I don't... [crosstalk] Kurt: It's jewelry that happens to tell the time. Paul: I don't wear any jewelry, so it's kind of meaningless to me. I saw the smart watch and, because I'm stupid, I was kind of like, "All right, I kind of want it a little bit." Kurt: It's not stupid, it's geeky. It's another screen. I see the attraction. Michael: I totally see the attractions too, because honestly, you don't fit in to...like Kurt fits in to it but not everybody fits into that wanting of a high-end watch. Honestly, Rolex probably produces about a million high-end time pieces a year annually. Kurt: That blows my mind. A million people a year are spending $8,000 plus on a watch. Paul: I was doing research on how the watch might affect Apple's bottom line, because I am an Apple shareholder and... Kurt: That makes two of us. High five. Paul: ...the world watch market produces something like 1.2 billion watches a year. If 1.2 billion watches get made, Rolex makes 1 million of them. That's less than one percent. [laughs] Kurt: It's still crazy. Paul: I'm sure in terms of revenue, they're way higher, but not in terms of watches produced. Michael: Exactly. At the end of the day, you've got 1.2 billion watches being made annually. There's going to be a large percentage of them that are going to last a very short amount of time. They're $20, $15. They're $75. You know what? You're right. I think the Apple watch is a creative, brilliant idea that is well-designed. I'm simply not going to bang it, even though...I don't think I'll ever buy one. But it's just a different animal. Paul: It's a different thing. Kurt: It's a new market. Man 2: I think Jony Ive said during the video that, "You know, we are going to replace Rolex." He made some crack about replacing Rolex and a lot of those brands. That is kind of like, "All right. You are not right there." Because that's... Kurt: Don't be reaching for the stars. [crosstalk] Paul: This is a different thing they are selling. They both might be called watches, but they are different things. Michael: Rolex is not a buggy whip, gentlemen. Honestly, for him to say that shows, sadly, that even though he's a beautiful and wonderful designer, his complete and utter ignorance on the watch industry is completely...he overly showed it during that point. Paul: I'm really excited to listen to this in five years and then we're like, "Oh man, Apple controls everything. We were idiots." Kurt: [laughs] "I can't believe Apple bought Rolex." Tell me, you are a watch guy, what's your favorite watch? Michael: I hate to say that I'm a...Even though I love complex, beautiful watches, I have to still say that the Rolex Submariner, in it's simple form, it's absolutely the most beautiful watch I've ever seen. It is a timeless, gorgeous definition of what a watch should be. It's accuracy is absolutely impressive. It's an over a 60-year design that's slightly evolved to almost absolute perfection with their current version. I look at so many other watches, and you just don't ever see that. When you look at watches, in general, or really products in general, let's just start with the car or anything like that or the Internet for that matter, very seldomly do you see one company be able to take their vision from 60 years ago and still keep running with it perfectly. Kurt: Yeah, it's true. The Rolex Submariner shape is classic and timeless, like people will always recognize a bottle of Coke, I think number one, and number two, they'll know Rolex when they see it. Michael: Not to try and push Ethercycle in any way, but... [crosstalk] Kurt: Oh no, please do. Please do. Michael: I know, but I really feel like one thing that you guys did great was that...I said to you during our design meetings that I wanted a website that showed the essence of Rolex's website and Rolex's presence. I didn't want to be Rolex. That's not what my intension was, but you guys were able to take the essence of that. That's complex. Countless people try and make watches just like Rolex watches, and they are completely off the mark every single time. It's good to see you guys, actually, were able to both manufacture my idea of what our website should look like but also give it that same feeling that it's going to last. I'm not going to change my website six months from tomorrow. I actually think that we are only going to minorly evolve it over the next two or three years as technology develops better in Shopify. Kurt: That's the way to do it. I think the people who have the most success are not the ones who tear down their website every six months, but instead are doing just constant iterations. With you, it's really every two weeks, even sometimes weekly, we're making continuous changes that really add up to better conversion and more sales, et cetera. Speaking that, as a Shopify store owner, give me one tip for Shopify store owners. Michael: The one tip is I do believe you need to trust something as important as your website to professionals, because if you are going to run a website like Shopify's -- very well built technology -- you can download one of their templates. You can figure out how to put some images and things like that. At the end of the day, the consumer is very short lived in their decision-making online. I look at the amount of time that people are on our website, and they are only there for a minute or two really sometimes. Kurt: A minute and a half is good. That's extraordinary. Michael: That is such an integral important part. To spend 2, 3, 4 thousand dollars on something that you are going to have as an asset in your company for the next 12 to 24 to 36 months...it's kind of foolish to think that, "I will just download a fifty dollar template and just start going with it." You need professional guidance, especially, even at a base level when you first do Kickstarter, when you first do this things, when you're first coming up with the product idea or your first, you're even just starting up a retail store online, you need to have that guidance. Because without that, your conversion rate will be much lower. Even if you think it's looks great and your mom does too, it doesn't matter. What matters is the end consumer has complete confidence in buying the product and you need the company to really do that and develop your website. Kurt: Hell yeah. God, I'm going to have to embed that audio on the second website now. [laughs] Paul: Autoplay audio now on the website. Big conversion. People love that. Kurt: You are right. That is a conversion killer. [laughter] Kurt: I think that I learned a lot. I hope other people learned a lot. It was really good. It was great having you. Michael I looked forward to talking more with Everest Bands and really growing that brand. Thank you for joining us. Michael: Thank you guys. Again, I really feel, not to go back a couple of times to do something, but if you're going to do a Kickstarter, you really need to get things organized. One of the most important things in organizing it is the image that you put out there, because if you don't have that, you will fail. Kurt: Your number one tip is still, will always ring true in my mind and it's good to hear it, "get your shit together." Michael: Get your shit together. Don't start without your shit together boys, because it's going to fail. I had a great time... Paul: Advice for everyone. Michael: Yeah, honestly. Your mom told you when you were 18 years old, "Get your shit together." Kurt: All right, this is fantastic. Thank you, Michael. Michael: Thanks guys. Paul: Thank you. [closing music]

The guys welcome franchise owner Michael Davis to discuss his Cartridge World franchise and his experience as a franchise owner. They also answer the question, "How worried should I be about the arbitration clause in my employee agreement and does this force me to only arbitration?" Full Podcast Transcript NASIR: Welcome to Legally Sound Smart Business. This is Nasir Pasha. MATT: And this is Matt Staub. NASIR: And thank you for joining us. This is our business legal podcast where we cover business in the news and also answer some of your business legal questions that you, the listener, can submit to ask@legallysoundsmartbusiness.com. Here we go! Mid-week, I wonder is US won their game yesterday. I predict not, unfortunately. MATT: Wow. What a terrible way to start off the episode. NASIR: I know, it’s a downer. Well, hopefully, I’m just proven wrong. MATT: Yeah, I hope so. Our audience is going to stop listening too, unless we have a lot of audience listeners in Belgium. NASIR: Yeah, they’ll be depressed and won’t want to listen to our show. MATT: That’s fine. NASIR: I think our show is uplifting. Anyway, I think we have a good topic today because we have franchise owners as clients and we cover franchises all the time on our podcast. We get questions like this but today we actually brought in a franchise owner, Michael Davis. He’s the owner of a Cartridge World franchise in Atlanta, Georgia. Michael, welcome to the program. MICHAEL: Thank you, gentlemen. Glad to be here! NASIR: Yeah, absolutely. You know, we’ve talked about in the past how other franchise owners can have an effect on the franchise itself. It comes with the good and the bad, right? I mean, there was this one case we covered in New York where there was a Domino’s franchisee who stupidly fired all his employees for an illegal reason and, of course, had to bring them back and so forth. But those kind of things can have a negative effect but, at the same time, your successes also have a positive effect as well. Michael, why don’t you tell us a little bit about the franchise world in general and this little kind of secret family that I think a lot of people aren’t aware of? MICHAEL: Sure! Again, my name’s Michael Davis and I’m the owner of Cartridge World. We’re the world’s largest remanufacturer of ink cartridges – up to 30 percent less than the national big buck stores. There’s 1,400 of us globally. We’ve been around for six or seven years. Now, the beauty of franchises, much like you said, is you’ve got a known brand entity which you don’t have to build over time. It’s already there. You already have a support system from corporate in terms of marketing, operational, and other experience sets. The other parts you also have which you alluded to a few moments ago were business partners rather than franchisers who are going through the exact same experience you are that perhaps have different experience set that you. Really, you’re business partners. So, if you’ve got a situation like the pizza franchise you talked about, that’s a business partner of yours even if they’re across town because they’re damaging your brand. One wrong customer experience, they’ll tell ten people. One great customer experience, they might tell one person. You really can’t put a cost on that because, in the franchise business, the cost of new customer acquisition is huge but a damage control that you have to do from a bad experience from a franchise partner across town is priceless in a negative way. I’m a big advocate of franchisers because you have much of it already done. What you have to do as a franchise or within that structure, you have all that support and experience to figure out what is your unique brand going to be in your community. How are you going to differentiate yourselves in your ten miles of your graphic area? Are you going to partner with schools? Are you going to partner with non-profits and churches and do fundraising?