Podcasts about michael thanks

In this episode, Brian is joined by Michael Broadhurst, Chief Operating Officer at Stepstone Hospitality. With more than 30 properties across the United States, Stepstone is a premier hotel and restaurant management company driven by an unwavering commitment to excellence in every aspect of their operations. Through tailored operating strategies that complement investment objectives, Stepstone has continuously enhanced the value of their clients' assets. Tune in to hear who Michael Thanks for helping him along the way.

Health anxiety is a common yet often misunderstood condition that can significantly impact one's quality of life. Whether it's worrying excessively about potential illnesses or constantly seeking reassurance about your health, the effects can be overwhelming. Understanding the nature of health anxiety and learning effective strategies to manage it can make a world of difference. In this article, we explore five essential things you need to know about health anxiety and offer practical tips for recovery, with expert insights from Michael Steer. 1. UNDERSTANDING HEALTH ANXIETY: WHAT IT IS AND WHAT IT ISN'T Health anxiety is a term often misunderstood by many. It's not just about being overly concerned with your health or frequently looking up symptoms on Google. Health anxiety can be categorized into two main disorders: Illness Anxiety Disorder and Somatic Symptom Disorder. Illness Anxiety Disorder involves a preoccupation with health despite not having significant physical symptoms. On the other hand, Somatic Symptom Disorder includes severe and persistent physical symptoms that cause substantial distress. It's essential to understand these distinctions to recognize that health anxiety isn't simply a matter of being overly cautious or paranoid about one's health. Moreover, health anxiety can often intertwine with Obsessive-Compulsive Disorder (OCD), involving obsessive thoughts and compulsive behaviors centered around health concerns.  2. NAVIGATING THE MEDICAL SYSTEM WITH HEALTH ANXIETY Dealing with health anxiety within the medical system can be particularly challenging. One of the critical aspects to remember is the importance of finding a healthcare provider who listens and validates your concerns. If you feel dismissed or unheard, it is perfectly acceptable to seek a second opinion or switch providers. Additionally, distinguishing between different types of symptoms can help manage health anxiety more effectively. Medical symptoms require immediate attention, such as severe chest pain or sudden numbness. Physical symptoms, like a sore back from yard work, are often benign and manageable with self-care. Psychological symptoms stem from anxiety and can include manifestations like tightness in the chest or dizziness. Understanding these differences can help reduce unnecessary panic and improve communication with healthcare providers. 3. TRUSTING THE RELIABILITY OF YOUR THOUGHTS A common challenge with health anxiety is differentiating between real medical issues and anxiety-driven thoughts. Think of your anxious thoughts as spam emails—they're real, but their content isn't always reliable. Health anxiety often triggers false alarms that feel urgent and terrifying. Learning to question these thoughts and not take them at face value is crucial. Techniques like cognitive diffusion can help change your relationship with these thoughts. For instance, if you've convinced yourself numerous times that you're having a stroke and it hasn't happened, the likelihood that your current fear is another false alarm is high. Questioning the reliability of these thoughts can help manage the overwhelming fear they generate. 4. THE ROLE OF COMPULSIONS AND SAFETY BEHAVIORS Health Anxiety Compulsions and safety behaviors, such as constantly checking symptoms or seeking reassurance, often exacerbate health anxiety. One significant trap is becoming inwardly focused, constantly monitoring your body for signs of illness. This behavior leads to a vicious cycle where anxiety increases symptoms, which in turn heightens anxiety. Shifting your focus outward and engaging in meaningful activities can help break this cycle. It's essential to become more outwardly focused, enjoying life and participating in activities that bring you joy and fulfillment. This shift can reduce the power of health anxiety over your life. 5. EMBRACING LIFE DESPITE HEALTH ANXIETY Health anxiety often steals the very things we're afraid to lose—time, relationships, and enjoyment of life. The constant preoccupation with health can make us miss out on living fully. Therefore, the goal isn't just to reduce anxiety but to reclaim your life. Engage in activities you love and focus on adding value to your life. This shift in focus is incredibly powerful and can help you live a more fulfilling life despite health anxiety. It's not just about feeling less anxious; it's about living more fully and enjoying the moments that matter most. CONCLUSION Health anxiety can be overwhelming, but with the right strategies, it's possible to regain control and live a fulfilling life. Michael Steer's book, "The Complete Guide to Overcoming Health Anxiety," is a fantastic resource for those seeking further support and information. Additionally, his website, overcominghealthanxiety.com, offers a wealth of resources, including a free virtual support group. Remember, while health anxiety can take a toll on your life, effective strategies and a focus on meaningful activities can help you reclaim your joy and well-being. TRANSCRIPT: Kimberley: [00:00:00] Welcome back, everybody. Today I have Michael Steer here talking about the five things you need to know about health anxiety and how to recover from it. So welcome, Michael. Michael: Thanks for me. I'm really excited to be here and talk a little bit about health Kimberley: Yes. It's actually a very, very requested topic. It there's always questions about it. So I think this is really, really wonderful that we're doing it. Okay. So first of all, what is health anxiety? Let's just do a little bit of a, you know, intro, uh, tell me what it is and then tell me what it isn't. Cause that's point number one. Michael: Absolutely. Yeah. So we'll jump into point number one, which is I kind of was breaking down if I could have people know five things about health anxiety, what would I want them to know? Or people that support people with health anxiety. And number one point that you're going to bring it up is the first thing that I would want [00:01:00] people to know is exactly what health anxiety is. I feel like health anxiety is one of those things where, you know, you see somebody on their phone looking up symptoms and everybody kind of knows, right? They're like, Oh, I've been there before, right? We all kind of know what health anxiety is, but sometimes we don't know exactly like what it looks like or even more so that there's actually treatment that people can get that actually works. Not medical treatment, but maybe psychological treatment. So, um, I break down health anxiety in a couple of different ways, which is one is that. if you actually have a medical condition, so if you were diagnosed with cancer or, you know, whatever that might be. Um, there can still be anxiety around those types of things, but that's not exactly what we would be calling health anxiety. Uh, you know, kind of in a professional community, that would be an adjustment, Kimberley: Yeah. Michael: a massive adjustment, right? It's like you get this scary diagnosis, you're trying to go undergo treatment, those types of things. So that's kind of one category. And then, We also have this other category, maybe [00:02:00] what we would love them to call health anxiety, which actually is kind of awkward, too, because there's really no such thing as health anxiety, like, oops. Um, but there are some categories under health anxiety that we would say, these are actually what we're talking about. One of them is what we call illness anxiety disorder. Um, the other one is what we call somatic symptom disorder. And, uh, these are kind of the two things that we would call health anxiety. Now, Illness Anxiety Disorder is really a very basic way to break that down, is a preoccupation with your health, but you don't have a lot of symptoms that go along with it. I mean, you might have some here or there, and it's like, Oh, one day, like maybe my vision is a little bit more blurry, or I got a kind of weird pain over here. But the, usually the symptoms kind of come and go pretty, pretty quickly. Um, now, Somatic Symptom Disorder is still the preoccupation with your health. But the one big difference that people run into is usually the symptoms are pretty severe. They're [00:03:00] pretty significant, and they're usually a little bit long lasting. So, you know, maybe people are dealing with, you know, chronic stomach pain or pains in their stomach that they really become preoccupied about, but those symptoms are pretty significant where it's like impacting life, those types of things. Um, and then the other category that we can just throw in there real quick is also OCD. Um, and what we'll talk about here and, uh, maybe towards the end of this part is a lot of times I put health anxiety and OCD kind of as hand in hand. Uh, they're not the same thing, but they share so many of the similarities and how they work. And, um, if you ever look through some of the OCD literature. OCD can have health themes and so those would be times where we can be very, become very, you know, have the obsession and compulsion cycle go around health. So that's, that's really what health anxiety is, is usually one of those three things, which is either you don't really have many symptoms and you really worry [00:04:00] about it. You're actually having a lot of symptoms. you're worrying about it, or it may be a bigger dynamic of OCD, where maybe you have other obsessions and compulsions, and then maybe one of them is also just the obsessions and compulsions around your health. Kimberley: Amazing. Michael: yeah. Kimberley: What about hypochondria? Do we, where would you put that? Michael: So that's an older term. Kimberley: Yeah. Michael: So we've kind of, you know, and a lot of times, um, I feel like I'm kind of glad that that term has kind of shifted as just kind of like, you know, illness, anxiety, and somatic symptom. Um, just because there's a lot of judgment and a lot of negativity also around kind of, you know, as soon as somebody is like hypochondria, right? And it's kind of like, it comes with this like really negative experience and like, Oh, you know, they're, they just worry about their health all the Kimberley: Right. Michael: it kind of gets dismissed pretty quickly. So, um, that's just, if you ever see hypochondria, um, it's just an older term or sometimes it's still used in the medical community. [00:05:00] I think it's, even when you look up in some of the, um, Um, things to, uh, you know, for some of the coding, it still comes up as hypochondriasis. Um, however, it's just, it's the same, it's a different terminology just for what we would now call illness, anxiety disorder and somatic symptom disorder. Kimberley Quinlan, Thank you for sharing that too. Cause I think Googling, because that term has been used for decades, that is often what people are looking for. And I think, as you said, people get dismissed like, Oh, you're being such a hypochondriac about it. You know, that. I think is, I'm glad that you, you shared that. Okay. So that was number one. Number two, um, what is the second thing we need to know about health anxiety? Michael: So number two is kind of going right off of what you're saying is a lot of times, you know, what I would really want people to know is to, a lot of times people do get this mess. and even clients that I'm working with, because I work with a lot of health anxiety clients are still trying to navigate [00:06:00] that relationship between, they probably really do have some anxiety around their health, but they're also trying to work with the medical community. and that makes it quite challenging, um, because you know, there can, um, there can be some times where it can be challenging. People can get written kind of off of like, well, this person, you know, they've, they've been anxious about their health before, and then they've sort of become. Um, what could be an obsessive worry but also could be a very realistic worry of I go back into my doctor and they kind of know that I deal with anxiety around my health, they going to take me seriously? Michael: know, if I come in and I say, wow, I've been really having a pain here or here, are they really going to be listening to me? Like really take me seriously and investigating this or are they just kind of writing it off You know, this is, you know, awful, you know, this person has been anxious about a lot of those different things. So the one thing I, I think that we, um, that I think, I think is really important for people to know [00:07:00] is you're working with a medical provider and you don't feel like they're listening to you, they're not validating some of your concerns, they're, they're, you don't feel like they're really invested in some of these things. Um, it's always okay to go find somebody Kimberley: Mm hmm. Michael: That is totally okay to do. You can take it from me. Hell, like, you know, what I would, I don't know if there's no delineation of a health anxiety specialist, but I think there can be some of those times where things are not taken serious. So Kimberley: Yep. Michael: do feel like that is a relationship that you're having with a health provider, find somebody new. Go find somebody that really does listen to you, right? Now if you're also working with somebody that you feel like you really trust, you feel like They feel like they got your back, like they're, they're, you know, but maybe you're kind of running to the end of the road of like, I, don't know really what else we could test for. That's something different, right? Because at least there's that level of trust. So the second thing that we like when it goes into this piece of, you know, like Val or validating people's [00:08:00] symptoms is we also have to realize that there is a difference between physical symptoms, medical symptoms and then also psychological symptoms. And so here's how I break these things down. Medical symptoms is usually the ones we're really afraid of. medical symptom could be like if I have chest pain. And a medical symptom would be I need to go to the hospital because I'm having a heart attack. That is an explanation, a medical explanation of a symptom that I'm Kimberley: Mm hmm. Mm hmm. Mm. Mm. Mm. Mm. Michael: ER, those types of things. one category or one bucket that sometimes we put those in. A second bucket is what we call physical symptoms. And a physical symptom is something that's actually really happening in our body, probably don't need to run to the ER or the urgent care because of that. So like, for instance, if I went and did a bunch of yard work over the weekend, and my back really hurts, um, arguably because I'm getting [00:09:00] older or because I've done a lot of yard work, who knows? Um, Um, I don't, that's a real physical symptom that a lot of times our mind could try to catastrophize, but it's probably not something that I need to go and run to the doctor about. I probably need to take it easy, put a little bit of ice on my back, et cetera, et cetera. So we have medical symptoms, we have physical symptoms, but then also we have psychological symptoms and this is the way that our mental health can also affect our physical body. So for instance, if we're becoming anxious, I'm sure that, you know, if anybody has ever been anxious before, which I'm going to assume everyone has, If we become anxious, sometimes our chest gets tight. That's a real physical symptom. That's a real symptom that we have. But the origins of the conclusions of that is from a psychological standpoint. Now, here's why I think these buckets are important, why I want people to know about them. Surprise, surprise, health anxiety always usually goes to one bucket. Medical symptoms, right? It's like, Lower back pain, medical. You know, my chest is tight, medical. This weird kind of [00:10:00] feeling in the back of my head, medical. You know, all of those different types of things. And one of the things is being able to have this context of if I could start to separate some of these symptoms out to maybe there are some symptoms that I could have that are medical, but maybe there's also physical symptoms that are just happening. There's a great article that I always like to give all my clients The Noisy Body by, uh, Abramowitz, that's just a wonderful handout, a wonderful article. And it just speaks to the nature of like, well, we get signs and symptoms and weird feelings and burps and farts and all these things all the time. The hard thing is, is when our mind gets really preoccupied and starts to put them into the category of, oh no, what if, could this be this really negative thing? So I'd like to, that's the second point that I would really want people to know is. We have to realize that even though there is always this scary explanation of symptoms, it's important to have this perspective of noticing that there could be, there could [00:11:00] be medical symptoms that I need to really do something about, physical symptoms that I need to do to some TLC, and then also psychological symptoms. And then one last thing I just throw in there real quick before we can go on to the third one is, um, the most important part about this is regardless of what bucket you put this in, all of them are valid and real symptoms. that's the other piece that we get into this kind of like stigma or negativity, that sometimes people will talk about a real symptom that they're having, and then they'll be like, Oh, well, that's just your anxiety as almost as if the symptom is not happening. And so I think what I would really want people to know with health anxiety is regardless of what bucket it's coming from, it's always real. You're always valid and feeling it. The one question that we have to just ask, which is going to lead us into number three at some point is. Or can we trust that the explanation for the symptom that our brain has brought us really the explanation of what's happening? Kimberley: Mm. [00:12:00] So, I have a question, which you might answer it in, you can even use this for the, for an example. So, a lot of my followers know that I, in, um, in 2018 was diagnosed with Postural Orthostatic Tachycardic Syndrome. Michael: Mm. Mm Kimberley: one of the main symptoms of that is that you faint and a lot of, I'm very well in recovery of this right now, but one of the things was me without using this terminology, which you've beautifully put out. And I actually learned this terminology from you is it was about passing out, passing, like not, not, not passing out, like, uh, differentiating, sorry, my accent got it, differentiating. Um, is this dizziness from my anxiety? Is this dizziness evidence that I'm going to pass out, like faint? Um, Michael: hmm. Kimberley: because a lot of [00:13:00] having this condition is tolerating dizziness 24 seven of the day. Like it's a symptom of the condition. Um, so in that case, just as that as an example, how would you, which bucket would you put this in? Michael: For sure. Good. Great question. And this is where, like, health anxiety, I think that's why it's really important to, to really notice the stickiness of Kimberley: Mm. Michael: Because, you know, as an, also as an OCD specialist, a lot of times when we deal with OCD themes, not often having people, like, deal with, uh, you know, harm obsession. And also undergoing evaluations to see if they're a Kimberley: Yes. Yes. Michael: Uh, that doesn't really make sense. health anxiety starts to become this kind of interesting dynamic of, well, what happens if we have anxiety around medical Kimberley: Yeah. Michael: And also we have to like, go get evaluations and other things that are actually Kimberley: Yep.[00:14:00] Michael: that's a great point. And it's like, okay, so what if the, um, Um, you know, the symptoms that I'm feeling could be an explanation of a medical condition that's happening, or it also could be, you know, from the place of, um, you know, from my anxiety. Um, think the answer comes down to, um, is going to this, what I usually like try to call a pretty, a best guess. Which is, now, when we're thinking about passing out, the one thing I think is always important. as a person that works on a lot of needle phobias and blood phobias is that if you feel like you're going to pass out, get yourself in a safe place, right? Like sit down, make sure you don't hit your head. You know, Kimberley: Yep. Yep. Yep. Michael: But also there's this kind of conclusion that we can come through with our experience that says, know, um, if I, if I think about the symptoms that I'm having right now, where would I put my best guess on those, right? And if we're putting this, that medical side, then we could say, okay, well, [00:15:00] Um, I need to do whatever the doctor has recommended that I do in those situations because that's just what's most helpful. If I'm feeling like it's more on the anxiety side, that's maybe where I could use some of my tools that we learned in therapy to be able to manage that. Now is it a perfect system? No it's not, right? Because there's always this little piece of uncertainty and the unknown there Kimberley: hmm. Mm hmm. Mm hmm. Mm hmm. Mm hmm. Mm hmm. Michael: that's, I think that's what's also really important about being able to kind of discuss those things either with your doctor or a therapist to be able to really walk those muddy lines. Um, I have quite a few clients that we try to walk that line all the time where, I've had clients where thought that maybe this was or maybe it was assessed as like, Oh, this is just something anxiety related. That's why you're having symptoms. And then it's like, months later, surprise, I'm allergic to this, right? And so, that's why we don't always know the answers to all of [00:16:00] those things. Um, but as we kind of go, we can kind of walk that line to say, could I make my best guess about what this is at this current period of time? And if that was the case, what would I do in that Kimberley: Yeah. Michael: You know, and so do I need to go a medical route? Do I need to go to a psychological Kimberley: Yeah. Which I think takes us to next step number three so beautifully. So go ahead and share what is the third thing we need to know. Michael: Absolutely. So number three talks about. Um, a lot of times our brain can bring us to a lot of different conclusions and we just talked about the conclusions that a lot of times our brain Kimberley: Yeah. Michael: into in terms of medical, physical, psychological. And a lot of times we just take those conclusions as the truth. go with them because they're terrifying, they're scary, right? And they feel really threatening. And so one of the things that I think is important for people to recognize is I like to use the example of a spam email. is I'm sure we've all gotten spam emails. And if you haven't gotten a spam email, please let me know your trick because that would be I could clear out like [00:17:00] 75 percent of my email box. So but a spam email to me is kind of walking this line between is a spam email real? Oh, of course, we all get them in our email box, right? Like they actually come through to us. They have a time stamp, et cetera, et cetera, right? But the one question that we have to start to kind of wrestle with with health anxiety is. is the conclusion or email that I'm getting a reliable source of information. so if you get an email from tomjones1973 at AOL. com that claims to be from the FBI, why would the FBI be sending you from AOL? That doesn't make Kimberley: No. Michael: Now, is that email real? You betcha. However, if we can question its reliability to say, can, you know, do I trust this email to be what I think it is? Kimberley: Mm hmm. Michael: Then that can really start to dictate some of the actions that we take. So when we think about health anxiety, right, is your brain can give you a lot of really scary a lot of really unknown possibilities that could be going on with you. And [00:18:00] so, you know, one of the things that I think we have to really kind of start to become curious about is, do I just go with them? You know, am I there just responding to all of my spam emails in my email box? And if you do, we probably need to help like. Credit monitoring and all those Kimberley: Yeah. Michael: besides, from that point, do we get ourselves into a lot of actions that could be very unhelpful when we take these emails as as reliable? So, like, for instance, if you, you know, you have the dizziness, right? And you're, you're, you know, the initial evaluation or conclusion that your brain comes up with, aka what we could also call an obsession, right? Is like this could be an aneurysm, right? Or maybe you have a stroke or all these different types of really scary things. If we take that as a reliable piece of information, it starts to make Kimberley: Mm hmm. Michael: that we would be like, well, I need to figure that out. I need to be like, look up some symptoms of online or I need to go to the urgent care, whatever those things are, right? but if we get a, oh, by the way, I should have included this earlier, but [00:19:00] that's okay. We'll include it Michael: This is all on the premise that we have a relatively good answer. if you don't. If you're getting dizzy for no reason, and you have no idea why, I don't want you practicing anxiety Kimberley: Yes. Michael: Go to the doctor, right? Like, explore those things, figure those things out, try to get a pretty good answer. However, if we get a pretty good answer about something, and we are going to say it's like, I think this is because of my anxiety, but my brain wants to really convince me of all these other conclusions. can we use some of those tools in terms of, you know, Becoming curious about, can I really trust my brain sending me right Kimberley: Mm hmm. Mm Michael:  if this is like the 937th time that I'm convinced that I've had a stroke, what's the chances the 938th time is going to be it? Probably not. so, I could go look on things online, or probably got a lot of other things to do, too, that I could go and get involved with as well. So, that's it. One of those tools is, is really being [00:20:00] curious about, yeah, your brain's going to give you a lot of really scary medical possibilities. If we can ask that question of not if it's real or not, because those things are totally real, but can I trust the message that I'm being sent? It can start that process. Now, the other tool that I really like to use with people is diffusion. Um, and, and to kind of give it a quick breakdown of cognitive fusion, even though some people may be like some of the listeners may know, is just being able to like what kind of relationship that we have with some of our scary thoughts. so sometimes I kind of describe as like, well, it's not really necessarily getting away from them. It's just about changing our perspective towards them. So like, I kind of think about this example. It's like if you go out into like a really busy highway, you set up a lawn chair right in the middle of a busy highway and you have cars whizzing by you, you can see the traffic, but man, oh man, is it overwhelming. And so if we can use some diffusion skills and those would all be the great things, like, you know. Uh, just repeating or thanking our mind or my favorite is always just [00:21:00] singing, like, you know, the tune to happy birthday, Kimberley: Yep, Michael:  be right is sometimes those start to kind of be able to take us from this position of, could you just take your chair and put it on the side of the highway? And if we can do that, we can still see the traffic that's out in front of us, but it's much less overwhelming at that point because you don't have cars whizzing by Kimberley: all right Michael:  these cognitive interventions, I think, can be really helpful. Um, because a lot of times our brain is leading us to all of these conclusions, giving us these really scary ideas, and it might really start to go against the information that we have at that time, at least medically. Kimberley: Amazing. And I, the reason I love this is that was a big piece of it for me, just to sort of give a real example of me having health anxiety and a chronic illness when you are you're dizzy. My brain was like, this is it. You're going down, you're going down. And I had to get used to just having the thought like, yeah, you're dizzy. It could be it. But we know the symptoms of when you are, and you're just, you know, again, like you [00:22:00] often say, like, it's about being uncertain and being able to just to have the thoughts whenever they show up. So would you add anything to that or, Michael:  Know it. And I think what's important with that is, there's a piece of uncertainty Kimberley: um, Michael:  but we can also act within a reasonable Kimberley: yes, Michael:  right? It is like, you know, we can, we can always make those, you know, I always love delay in these situations Kimberley: um, Michael:  is if I start to become dizzy and I'm concerned that like this is going to be, this is me passing out, right? And if you just like, if you're dizzy and you remain dizzy and you remain dizzy, you know, those types of things and it, you know, you're just kind of like working through it and it's like, okay, maybe that's one thing if you're dizzy and then the wall start closing in, right? And you start to get tunnel Kimberley: yeah, Michael:  Well, that's what you can always make a different, Kimberley: yes, yes, um, Michael: I think the lay, but. nothing about health anxiety that likes delay, right? Because whenever these [00:23:00] symptoms come up, it's always going to be about you need to do this Kimberley urgent, Michael:  to the E. R. Currently, like right Kimberley: yeah, Michael:  wait, Kimberley: yeah, yeah, Michael:  if even if we're able to kind of like practice some type of delay, right? We'll be like, okay, this is what this feels like now. I understand the concerns my brain has, like not quite sure if I can trust it. I don't know. It's giving me some bad advice before. I But could I just wait that out and kind of see how that Kimberley yeah, Michael:  And, you know, if it continues to get worse or you start to get tunnel vision, go take care of it. There's probably something going on. But if those experiences, you know, I think what happens a lot of times for people is they, they try to move themselves on to something else, right? They get back to dinner or whatever it might be. And then they kind of have that reflection point or like later of being like, Oh yeah, I was like dizzy Kimberley: um, Michael:  earlier. And it's like, Oh, Kimberley: um. Michael:  to that? Right? So I think delay can be a really helpful Kimberley: Fantastic. Quickly, just because I have a couple of people in mind, and I know what their questions would be here, is in regards to [00:24:00] the, the point number two, where we were talking about the difference between medical, physical, and psychological. Let's say somebody. Um, has just intrusive thoughts about like, what if, actually maybe no, let's say they have a headache, a physical symptom and their brain is just constantly telling them like, this is a brain aneurysm, or this is a brain tumor, like this is cancer and it doesn't quit, um, Um, and the person also experiences this sort of intuition that this is what it is. What, how would you, what, what bucket would you put that in and would you use the same skills? Michael:  So, yeah, so the, the questions that I would have for that situation, which is number one, have you been to the doctor? You know, have you gotten it checked out? Have you like evaluated some of these, you know, headaches that you've been Kimberley: Mm. Michael:  Now if they say, uh, no, I've never been to the doctor about that. I'm, I'm not a doctor. I'm going to say would be [00:25:00] kind of silly of me at that point to be like, you're Kimberley: Yeah. Michael:  You know, that's Kimberley:  Just tolerate the uncertainty. Michael:  Yeah, that'd be good, right? We're like, that's probably not great. So because nobody would do Kimberley: No. Michael:  Like we, well, hopefully most people would not do that because if there is, so that's the first question I would always Kimberley: Mm. Michael:  is if you're having a physical symptom that's different, that's changed, that's more significant, whatever it might be, question needs to always be, have you gotten this Kimberley: Mm. Mm. Michael:  part that it's, I really wish there was a better answer to this. but there's not the least that I found, which is like how much is too much, you know? So if you're like, okay, so let's say the answer is yes, I have gotten it looked at and they can't find anything. Um, sometimes the conversation starts to become, well, how much, like, should I go for a second opinion or third or fourth or fifth or sixth? Um, and what's really difficult about that [00:26:00] is no one really knows that answer. Okay. And, um, what I try to really do to level with people, too, is that, you know, if you were having that headache and you're like, I don't know, Mike, like, this is like, I've seen like four doctors, still feel like there's something, like the intuition Kimberley: Mm hmm. Michael:  feel like there's something wrong. There's something going on. I can't, I can't fight you on that and being like, no, you shouldn't, right? Because I, the fifth time might actually be the time where it's like something comes back and you're like, oh my goodness, like, I'm so glad they found that. So. always this kind of difficult time that I get these questions where people would say like, what, what, what is too much now getting like a fourth or fifth or sixth opinion, whatever that might be, could just be reassurance Kimberley: Mm hmm. Mm hmm. Michael:  you know, getting another clear scan or whatever that might be. And it just kind of gives us that temporary relief of like, okay, goodness, like nothing's going on. But I think it's reasonable for us to know it's like it's not a very clear cut kimberley-_1_06-04-2024_101032: Mm hmm. Michael:  Of saying, like, [00:27:00] everybody's in their right to go get another opinion. you know, to, you know, however much you want to pursue that. We have to be on board and somewhat of being like, okay, like, go do that. But the other thing that I would always throw in there, too, that I like to try to work with people is, there's going to be productive ways that we can pursue that, there's going to be unproductive Kimberley: Mm. Michael:  you're having those headaches, and you're, and you're like, I've seen three people, I kind of want to go see four, I would say, I can't fight you on that. You should go see that fourth person, see what they say, but that's a productive method of trying to figure something out, right? Like, cause you could possibly, they could give you some scan, right? And be like, Oh my goodness, like right here, we found something, right? also other unproductive behaviors that sometimes people get into, um, that like your brain at 3 a. in the morning while you're ruminating about if there could be something going on in your brain or not, right? have no access to scans, like you're not gonna figure anything [00:28:00] out. You're not gonna come to some revelation of like, Oh, now that I can see inside my brain, I can see what the problem is, right? So, there's, there's kind of an encouragement that I try to give to people, too, is if you really feel like there's something wrong, and even though you've gotten a lot of things that have said maybe nothing is wrong, if you want, if you feel like it's necessary to continue to pursue those productive ways, set an appointment with a doctor. Go to that appointment when it's the time, right? Great, go do those. But some of these other things when we're thinking about like, but are we like ruminating about this for hours on end during the day? never going to become anything Kimberley: Mm. Michael:  not going to come to some insight of like, ah, I see everything clearly now, I see what's wrong. And so we try to practice those tools in those situations of saying, you know, if that's kind of an unhelpful thing to do, could I find something better to do? Uh, to do with my time than just endlessly going over this in my Kimberley: Yeah. Amazing. Which [00:29:00] ties us right into the thing number four. Um, tell us. Michael:  four, the four, I almost held up five, so that's good. Number four is, now, when we think of like, like, you know, for some of the viewers who might be a little bit more familiar with OCD, a lot of times I just use the terminology of TOs Kimberley: Mm. Michael:  triggers, obsessions, and Kimberley: Mm. Michael:  you might be saying, it's like, well, I didn't think health anxiety was really OCD. It's not. But. The functionality of these things kind of operate in the exact same way. So number four is talking about compulsions, or if you just wanted to view it as safety behaviors, that's cool, too. They kind of do the same thing, which is there's going to be physical or behavioral compulsions that we could do or mental. and one of the things that we really have to account for is just their ability to not really be able to give us an answer that we really want. and how sometimes it actually, especially with health anxiety, one of the things that I'll point with health anxiety. Usually makes things [00:30:00] worse. So there's always like pretty classic different mental or behavioral compulsions, you know, googling or, you know, going on Web and D and clicking on the little body right and being like, you know, we get the huge list, you know, you put in fatigue and it's like, gives you all these terrible things, right? It's like, Oh, maybe I don't Kimberley: There's like cancer at the bottom of every single Urban D article. Michael:  Yeah. Yeah, it's just like this. Just put it on the Kimberley: Yeah. Michael: you know, it'll be there. Um, the one thing I think is really important to consider specifically with health anxiety is the tendency for us to become really inwardly focused. And I think this makes it really difficult people to be able to have any chance of being able to move on from any of their health worries. a lot of times what we all want to do is the one thing that we want to monitor is the thing that's wrong. And so for instance, if you go back to your dizziness, right, we might continue to check in on that being like, well, my dizzy now or my dizzy now. How about now? [00:31:00] But the problem is, is that now you're like now you're swapping buckets, Because we have the medical that we have the physical and we have the psychological bucket. But what's a, um, I don't know. You feel dizzy because you drank a little bit too much coffee this morning. You're kind of feeling a little whoa, right? That's a physical symptom. not medical. You don't need to go to the doctor and be like, I've drank too much coffee and be like, great, just go run around for a little bit. Work it off. Right. Um, but the hard part about that is like, so that's a physical symptom. However, then we could start to get that conclusion that we talked about of like, Oh, my goodness, like, what does this mean? And maybe the conclusion is medical. You know, it's like, Oh, maybe I'm gonna pass out. but then the result of that is psychological. We start to get anxious about it. We're like, Oh my goodness, like this could be really bad and like, I don't want this to happen. However, now the byproduct of anxiety a lot of times is lightheadedness, right? And so we work into this catch 22. The [00:32:00] hard part about it is we keep checking in on those and there's a lot of body monitoring with health anxiety that really gets people stuck, um, paying attention to feelings and sensations and symptoms. And the hard part is it keeps going back and forth between these two things of we get really concerned about a symptom. It makes us feel anxious, which increases symptoms, which we notice more. And when we notice more, it makes us feel more anxious. And when we get more anxious, and so we just keep getting into the step ladder. So one of the things that I think is important when we think about this Catch 22 that starts to happen, is I try to really encourage people to think about, If often you get, start to get stuck within your body, your, your focus is inward thinking about how do I feel, what do I notice all of these different things? biggest goal that we can do with any of these things is how do we become more outwardly focused? That doesn't mean that you have to like [00:33:00] pretend that you're not feeling some of these things. Um, I'm a huge fan of dialectics in terms of using and Kimberley: Yes. Michael:  which is noticing like I'm feeling dizzy right now. And also I could try to be as best of my ability really involved in whatever is going on around me. Um, and so think it is, like there's a lot of different compulsions and things that we could talk about, but the biggest one I would want to bring up, at least for people to be aware of. it's becoming more inwardly focused, gets us stuck Kimberley: Yeah. Michael:  And, and it's, and understandably it's scary. to direct ourselves away from those, right? Because then it starts to feel terrifying of like, oh my goodness, if there's something that's really going wrong with me and I'm not paying attention to it? And that's where we start to get to the feared consequence, Kimberley: Yeah. Tell Michael:  some of the work starts to become, which is if I can recognize I have a pretty good answer about [00:34:00] this, maybe my brain isn't being all that reliable. I think this is just a psychological symptom. Um, maybe I'm willing to take the risk that maybe it could be something bigger, better. Um, but in service of being able to get back to my life do the things that I would like to be able to do, maybe that's a risk I'd be willing to take. Kimberley: me about number five. Michael:  That leads into number five. realize whenever I wrote these out, these were going to blend so well, but Kimberley: It's like we're flowing. We're in, we're jiving today. Michael: I know, right? The number five just goes back to this piece of The hardest thing about health anxiety is that one of the things it's not always about death because that sometimes that's what people always think is like, Oh, you're just afraid to die. Um, Kimberley: Mmm. Michael: people's faces whenever I always had the pre face, know, we always like to ask that question of like, what would be the worst thing about that? And health anxiety is always the really like, [00:35:00] uh, interesting one where it's like, well, I'd probably die and be like, what would be the worst thing about that? And people look at me and they're like, Kimberley: I'd be dead. Michael:  that'd be dead. And I'd be like, yeah, I know, but what would be the worst? And so for some people it is, Kimberley: Yeah. Michael:  death. But there's a variety of different, um, feared consequences that I think it's important for people to wrestle with too, which is some people it's around Kimberley: Mmm. Michael:  Some people it's about just the struggle. It's about treatment. It's about just how miserable it'd Kimberley: Mm. squadcaster-48hd_1_06-04-2024_121032: You know, uh, it would be about, you know, the whole process around, you know, getting treated and. You know, saying goodbye to people. For some people, it's not just about death, but it's also about, um, like, the impact that they would see a huge increase in health anxiety when people usually have, like, big life events. Uh, not just in terms of stress, but like, they get married, and now it's kind of like, it's up the ante of their health anxiety. It's like, well, now it would be kind of bad if you Kimberley: Yeah. Michael:  But it would be even [00:36:00] worse because now you'd leave like your spouse behind or even worse like Kimberley:  Yeah. Michael:  kids search into the picture, right? And it's like, Oh my goodness. And so I think it's really important to kind of start to look at is a lot of things that we could really fear to lose. The dirty trick that health anxiety plays it kind of makes us lose those things before we've even lost Kimberley: Yeah. Michael:  And what I mean by that is that sometimes we become so preoccupied with our health. Going to the ER, you know, running to the doctor again or, uh, just ruminating her mind or, you know, the family's around or you're having dinner and you're on your phone, right? Like looking up symptoms, right? things that we're afraid to lose might already be Kimberley: Yeah. Michael:  they're there in front of you to be able to engage in. the really hard thing is, is we're afraid that those would go away, but they've already gone Kimberley: Yeah. Umm. Michael: other process. So. think the one thing we have to kind of really wrestle with is [00:37:00] it's not just about trying to get rid of anxiety. I mean, that's part of the picture. Um, I'm sure for anybody that's ever in the helping profession, they'll always have somebody come in and saying, I really want, you know, this to go away, to be less pain, to feel less anxious, to feel less sad, whatever that might be. And those are cool goals. Like I'm on board with those, right? Like, I don't want people to feel more anxious. Um, I want people to feel less anxious. But if that's the extent of our goals for ourselves is just to, like, worry about my health less, I mean, that's kind of good, but we're missing a big part of the picture here, which is really, what can we add? You know, because health anxiety wants to steal all these things away from you in your life, The things that we're so scared to lose in the first place. And so a big part of number five, I think, is important for people to really recognize, is that Health anxiety is going to want to take those things away from you. And I wouldn't want people to work just like feel less anxious about their Kimberley: Yeah. Michael:  I would want them [00:38:00] to work in what are the things that you're really afraid to lose. I want you doing more of Kimberley: Yeah. Michael:  Right. And that is going to get to the point of having to work to give up some of the things that often would make us feel like we need to do to be able to keep ourselves safe. And that's hard. That is, that's the Kimberley: Yeah. Michael:  Is being able to lean into those things. But, the work also becomes, also gets with the reward, which is, we're actually being able to live life and be able to do those really meaningful and valuable things that we really are afraid to lose in the first Kimberley: Yeah. And when you start living your life, you tend to be focused less inward on all the symptoms as well. So it's sort of like a reverse snowball effect. Michael:  That one of the, absolutely. Good, I'm glad you bring up that point, right? Because that's what happens, Kimberley: Yeah. Michael: we get involved in something else, we start having fun, and then it's that tendency for our mind to want to go back to be like, well, how does this[00:39:00] Kimberley: Yes. Michael:  How does this feel? And so my encouragement for anybody is that about trying to get away from those. I try to draw a quick, line between distraction and redirection, which is a distraction is like an escape, right? Be like, I can't think about this. I got to get away from it. You know, like, let me focus on this movie, Kimberley: Mm hmm. Michael:  Where a redirection is really just trying to make a place for that of just noting of like, yeah, I am feeling this way. I noticed my brain is like yelling at me to be like, look this up on Google right Kimberley:  Yes. Michael: I could notice that. And also, I know it's going to be more helpful for me to make a place for that. Get back to the movie. Really try to get into that. Pay attention to it. that gives us a chance to do, just like what you said, is now we're focusing outside Kimberley:  Yeah. Michael: Instead of all the things that could be going on in our body, which some of them could possibly be serious, but most of them are probably just our bodies being Kimberley: and I think that's cool too is like our bodies will be bodies there, especially as we [00:40:00] age. I see a lot of people's health anxiety go up as aging. You said aches and pains, sleep issues, like it's so common. Yes. Yes. Okay. Yeah. Michael: and it's like sleeping on like something like really uncomfortable floor and And then like, I'm like, oh, I slept really good. And then like me, as I got older and there was like a sock in your bed that you slept on and you're like, oh my goodness. Like, and, and age is gonna Kimberley: Yeah. squadcaster-48hd_1_06-04-2024_121032: had to remember as, as age goes up, health kimberley-_1_06-04-2024_101032: Yes. Yeah. Yeah. Michael: you know, the question real quick, I'd just like to add with this is a lot of times I do get the question of like, well, what if you've had cancer in the past? Right? Like, is that still health anxiety? And it's like, well, you know, if you're in remission you're doing all the things that you need to do, you know, you're probably getting more frequent scans, all those different types of things. We can still become preoccupied with the [00:41:00] possibility of like, what if this new thing, whatever we're feeling is cancer again, right? And that's, I think we have to walk that, that piece of like, that's an incredibly understandable place. And also we go back to number three. which is, is like, are we getting information from our brain that's reliable? And if all the other information that we have in the current period of time, working with an oncologist, whatever it might be, is saying, Hey, your markers look good. Blood work looks good. Your scans look great. Then that's maybe what we challenge ourselves to say, maybe I need to get back the things that are most important. Kimberley:  I love this so much. Thank you so much for sharing these points and bringing so many applicable skills and tools as well. Tell us where people can hear about you. Tell us about your book. All the things. Michael: Yeah, absolutely. So, um, A couple different things with that. One is we did release a book in the mid December. Um, [00:42:00] it's right here. The Complete Guide to Overcoming Health Anxiety. Uh, How to Live Life to the Fullest Because You're Not Dead Yet. Kimberley:  Punchy little yes. Michael: Still here. So, um, there is a book out on Amazon. You can get it, uh, soft cover or you can get a Kindle version. It's written, wanted to write it. Uh, so the, my coauthor. Uh, Josh Kimberley:  Yes. Michael: and I wrote it, um, and we really wanted to write a book that didn't feel too clinical, didn't feel too like, um, you know, that, you know, like you're reading like a, an academic book or something like that. So I think if you appreciate maybe a little bit of a lighter approach, at sometimes funny, some points, uh, cringy, maybe not cringy, I'll just blame it on Josh. Maybe that was all his cringy points. I, I did all the good jokes. Uh, just kidding, Josh. I love you. Um, uh, it is, it's just written in a little bit of a different way that I hope that, you know, some of the feedback [00:43:00] is for people have said that like it's written differently, but it's just written and they feel like they can connect Kimberley: Yeah. Kimberley:  make sense. Um, but that's also very back to, you know, number three that we talked about in terms of cognitive interventions is that you know, it's really important to start to change our relationship with those. So the book is out there, but also we, we also started a website, um, overcoming health anxiety. com. Um, and it has a ton of different resources. We just redid it and try to add a bunch of different other stuff. So we have a health anxiety one on one section. We have treatment resources. have videos, you know, different podcasts. Um, we have a link to our free virtual support group that meets every Thursday of the month. Michael: So, um, uh, so, uh, we have a link to there. Because we really just want to be able to try to reach out. And like I said when we first started [00:44:00] is, a lot of people know that this is a thing, right? Because they, they know and there's even the term cyberchondria out there, right? Like people know about health anxiety. But very people do know that you can actually like get Michael: this not necessarily just through a doctor in terms of like, Oh, here's your medical treatment, but there's psychological tools that you can use that with that. So, yeah, those are our resources. We got that website. We got the book. Um, and, um, we're just trying to connect with health anxiety sufferers to show them that there's some hope to feel better. Kimberley: So good. Thank you. So many wonderful resources and amazing book. Thank you so much for coming on. Um, those folks are the five things you need to know about health anxiety. Thank you so much, Mike, for being here with us today. Michael: Thanks for having me. I appreciate it.

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.  

In this episode, Brian is joined by Michael Dominguez, President and CEO of Associated Luxury Hotels International. ALHI serves as the global sales and marketing extension to over 250 global hotels and resorts, cruise lines, and destinations management companies. With over 80 sales professionals in 26 offices across North America and Europe dedicated to connecting their clients with hotels and resorts that deliver personalized service to ensure successful programs for you and your attendees. Tune in to hear who Michael Thanks for helping him along the way.

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.

Sean: I mean, it should be that important, right? For a guy like you who is a business owner and a speaker and an author to choose this topic. How important is EQ for you today? Michael: Thanks for asking, Sean. It's super important. I've been a coach for 11 years and over those 11 years there's been a lot of iterations of the way that I uplift and serve people. But as time has passed and progressed, what I've realized is that the thing that helps an individual ascend and become their most authentic version of themselves the fastest is their level of EQ or emotional intelligence. Michael: So for me, it started as a child when I really turned back the clock and thought about my childhood and the folks that I was raised around. I didn't have a coach and I didn't have a mentor, and it wasn't always the most emotionally intelligent environment. And so for me, I promised myself that as I aged and got older or was in business in any way, shape, or form, I would not only do my best to become emotionally intelligent myself, but then I would also pay it forward and try to teach others the same things because I know how hard it was in my childhood to not have that. But I've also seen the success that high EQ can bring inside businesses. Michael: Because success inside of businesses is often attributed to someone's or the team's emotional intelligence. So I think there are a lot of reasons why I focus on it and why it's so important to my business, but I just know the power that it can bring to making people live really happy and meaningful lives. - - - Youtube: https://www.youtube.com/leadershipstack Join our community and ask questions here: from.sean.si/discord Facebook: https://www.facebook.com/leadershipstack Leadership Stack Merch: https://leadershipstack.com/shop/ - - - Michael Seaver Website: https://michaelsseaver.com Linkedin: https://www.linkedin.com/in/michaelsseaver Instagram: https://www.instagram.com/michaelsseaver/ Facebook: https://www.facebook.com/MichaelScottSeaver/

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.

A Florida Native and graduate of University of South Florida, Jeff Wills is an accomplished Tampa Bay Area agent who brings a strategic yet personable approach to the home buying and home selling process. Drawing from years of experience as an agent in the Tampa market, he has built a solid reputation for himself as an industry leader with a solid track record that specializes in attention to detail in commercial and residential transactions. Investors are buying homes in Tampa at a record rate. Between July and September 2021, one in four homes that sold had an investor as the buyer. According to a report from the Tampa Bay Times, Tampa Bay ranks as the 7th hottest metro area for investors nationwide. Today, Jeff talks about the Tampa Bay market: neighborhoods, price to rent ratios, economic drivers, geographic considerations, and more insights that investors will want to know before making moves there. Episode Links: https://sefair-inv.com/ --- 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 joining me today is Jeff Wills, our certified agent out in Tampa Bay, Florida and Jeff's gonna be talking to us today about all the things we as investors need to know and should be aware of, if we're investing in that market. So let's get into it.   Really quickly, before we get into the episode today, I want to encourage everyone to go check out roofstockacademy.com. Roofstock Academy is our one stop shop for real estate education, independent of whether you're just getting started or a seasoned investor looking to scale up or get involved in a different asset class. We've got lectures, we've got coaching, we've got one on one slack access forum and a plethora of other financial benefits, as well as money back on your marketplace fee credits. If you're transacting on Roofstock. So come check us out at rootstockacademy.com look forward to seeing you in there. Jeff wills thanks so much for taking the time to hang out with me today, man really appreciate you coming on.   Jeff: Absolutely, man. Love to do it and thank you for having me. Yeah, of course. So   Michael: Yeah, of course. So we're just gonna like jump right into it and we're talking today about Tampa Bay, Florida. I want you to give all of our listeners why Tampa why now.   Jeff: So why Tampa why now honestly, I've been hearing that a lot. However, it has been very, very popular as of late. A lot of the big things that people are hearing, actually, just yesterday, Goldman Sachs bought 305 units in downtown Tampa for 168 million, setting another record price per unit and a crazy valuation for cap rates right now and so there's just there's a lot of synergy. The biggest thing behind it has been Water Street water streets about halfway through its 10 year growth plan. They've got phase one out of the way, phase two starting, and that has really brought a lot of life and vibrance to Tampa that was kind of growing and burgeoning there prior to COVID prior to all the popularity we have now, but I think it's really hit its peak and honestly, it's probably got a good you know, 10-20 30.50 years stride to soon looking like Miami, although personally I hope not. I'd like there to be a little bit less people and, and keep the enjoyment that we have here and honestly, you know, Tampa is a big town, it's a big population. But it really does have an extremely small town feel with the micro communities inside the neighborhoods inside the certain you know, sectors and where we are on the map and near the water and so I think Tampa has a lot to offer, both from an investment standpoint, from a long term hold appreciation standpoint, and especially, especially a rent gross. I don't know what that's gonna look like now, just because you know, kind of has hit a very, very high mark. However, we're not seeing any vacancies. We're not seeing, you know, any kind of rent concessions. I was just talking to a very big property manager yesterday for a different reason. But they were saying, yeah, we're barely giving written concessions. We're hitting full market rent. Everything's at 95% occupancy or above and there's no signs of stopping. So I love it, I I've always thought Tampa was a hidden gem before COVID and before things got crazy, but you know, kind of very lucky to be here now and enjoying every minute of it.   Michael: Right on, Jeff, that is that's super interesting. So I'm wondering, what was that cap rate that they got for the Goldman Sachs purchase, do you recall?   Jeff: Honestly, I don't have that in front of me, I can almost guarantee it was probably sub four. Even after tax adjustment, it's crazy. I actually lived in that building. When it first opened, I got a I snuck in with some written concessions and realtor bonuses and stuff like that. So I kind of skated in a bit but I mean, it went through a lot of challenges. I mean, management was horrible. Two years, they had the same management then fired that one and then fired another one and they've had problems left, right and center what that building just knowing because I've got friends that live there and stuff still and it's still selling for that price given I mean there's a bar across the street that has so much drama tied to it. It's insane, that the publicity from that sale has anything to do and so backing up from that Goldman Sachs has long been rumored to be taking a very, very big piece of the pie in the Waterstreet office space and so while that hasn't been announced Goldman Sachs buying that building to me just sounds like corporate housing instead of them having to go and give all their employees stimulus, oh, we'll give you a 5000 monthly allowance. They'll say hey here, we've got a block of rooms, pick one enjoy yourself. It's paid for and I think that might be how they're skating that market rent because some of the stuff and water St. Tampa is going up. Actually, I just talked to my friend yesterday 966 square feet with a big balcony 5000 a month and it's it was exactly what I did you have 550 a square foot. Yeah, um, it's, it's insane and I mean, once you set that, once you set that standard, I mean, they do. I mean, okay, the Heron is the best multifamily building I've ever seen. But I mean, setting that precedent, all people have to do is just be nearby and just enjoy the overflows, people who can live there and by the way, they have zero vacancy, and they have a weightless for that unit. That's coming up down hole, it's crazy.   Michael: Holy smokes. So Jeff, you clearly an expert on the area, give people a little bit background, who you are, where is it that you come from and what is it you do in real estate today?   Jeff: Absolutely, so I grew up about an hour north of Tampa and a county called Pasco, a very small town and to me growing up, Tampa was a big city, a really big city, I had been there three, four times the aquarium a couple of times, and I just every time staring at the top of the skyscrapers and that was just the biggest thing to me and growing up, went to college, didn't really know what I was doing there. When for finance, I was like, yeah, let me kind of figure stuff out. My dad one day was like, hey, why don't you just, you know, pop into real estate, see what's going on? I'm like, yeah, sounds fun, should be pretty flexible. I like people, like, give it a go. Seven years later, here I am and it's just been, you know, from top to bottom, you get to help people with something that's extremely difficult, extremely stressful, and very nuanced and I mean, you know, from deal to deal, there's always something different. There's always a different backstory a different why and even growing up prior to all that I've always kind of felt that I was a good listener. You know, I, of course, I have my own, you know, opinions and desires and stuff. But I was always able to kind of peel back, what is somebody looking for? What does somebody want to do? You know, what they're, they're telling me one thing, but what do they actually mean and I've always, you know, of course, ask them, hey, you know, you're saying this, but what do you want this, and it's just been very enjoyable and, you know, the client feedback is the same, I've got a ton of referrals, a ton of repeat customers, and it's just, it's very, very enjoyable for me to be able to, you know, simmer it down to its the parts that they can control and make sense of, and then I just handle all the other legal mumbo jumbo stuff on the back end and it's just been very, very enjoyable.   The first three years, I was very retail focused, you know, end user not very investor friendly, and kind of got bored with that and I was like, you know, I, I've always enjoyed numbers always been pretty good at numbers, like, why can't I get to the investor side of things and that's when I joined my current brokerage see fair investments and from there, it just kind of skyrocketed. Our offices set up extremely streamlined and efficient, to the point where in the past 13 months, just me and my broker together have done about 137 million in business, and 98% of that was investors and we're just, we're just masterfully efficient, fine-tuned and, you know, we know how to strike valuations from, you know, Jacksonville down to Fort Myers, it's, you know, it's a few things we know how the appraisers operate, we know what a tenant is going to do to it as far as evaluation what people are paying, because we've got 30 under contract that we can look at and say, oh, you know, hey, a cap rate is this based on this or like, we just have a ton of insight and ability to help our investors and you know, even just last week, you know, we have, you know, I guess it's kind of our, our secret sauce, but it's very simple. Every Friday, all of our clients get an update, regardless of status did nothing happen, hey, nothing happened today, you know, that just wanted to let you know, have a great day and yet again, I had another client last week said, hey, you know, honestly, we haven't even spoke on the phone. Once. It's been all email. I just wanted to say thank you. You were exemplary and you know, he even brought up the Friday things like every Friday, I had an update, I didn't need an update. I didn't you know, I didn't ever had a question about what you were doing, how the property was going and so while those compliments don't always come, I mean, it's always 9 to 10 with that, we haven't had very many upset people at all and they always bring us their next listing or, hey, I'm trying to buy in here and buying has been very challenging right now. So a lot of the investors are on hold being patient, seeing what rates are doing. But all in all, it's been really, really great, especially on the sales side, and we're just, you know, happy to help people while we can while the market is doing great.   Michael: Right on. Well, it sounds like if you ever transition careers whenever you're done to be ready to be done with real estate, you'd be a great therapist. good listener.   Jeff: Oh my gosh, I joke about that all the time. I tell people sometimes like, man, I've done so much marriage counseling, I'm good to go. We need to like do one deal. You'll know you'll get one and I'm saying, oh, that's pretty, it's, it's a lot, but it's just very easy. You know, I mean, the end of the day, people want a couple of things. They want to be comforted, they want to be, you know, they want to know that you're honest, and they want someone reliable and if you can fit those buckets, while being a joy to talk to and to interact with, I think that's really all I needed to do.   Michael: Love it, love it, love it. Well, Jeff, let's dig into the kind of meat and potatoes of the Tampa market a little bit and give listeners some insights into other than this Goldman Sachs transaction, which set new record highs and the buying being a little bit difficult. Let's educate people about the Tampa market. So who are some of the major employers in the market and are you seeing people moving to the area or maybe moving out of Tampa?   Jeff: Definitely a massive influx, I'm not sure the exact daily rates, but I know Florida, pre COVID was about 1200 people per day. After COVID, we're at about 2400 to 2600 people per day from out of state moving to Florida and while that's not always Tampa, that really is the only place that has had affordable housing, affordable rents, especially compared to Miami. Compared to Orlando, Orlando is a relatively higher price than us just because it was more pocketed it was hard to find an actual community over there. While there are a handful. It's very spread out and sprawling, and Tampa is extremely concentrated. Some of the larger employers in Tampa are, I wouldn't say there's one or two, the majority are a lot of health care providers, hospitals, doctors, stuff of that nature, a very big presence with attorneys and then honestly Tampa is becoming a very, very big tech hub. Reliaquest is a very big cybersecurity firm, they signed in Waterstreet for the top of their class, a class A office tower and so it's been rumored I've seen a couple articles that Tampa is the next Austin as far as a tech hub and you know, we're tax friendly. We don't have any state income tax, we have homestead, there's a lot of things that were already here and then now as other states like California are being, you know, more tax even more stricter on a lot of things. It's just it's increased that flow and I don't think that stops for a long, long time. Because Florida has so much land, we have so much room for stuff and while you know, even though you might not be right in the heart of Tampa, a 3540 minute drive is no big deal and you are close to a million different things inside that span. So just you know all of those things and then one underlying factor too, that I like to tell that nearly no one knows that I mentioned is pre COVID. I haven't checked these numbers after the Port of Tampa. Probably Never heard of it does 3 billion in revenue every year, if not more and so that has been a very silent provider. Actually, one of the biggest companies in Tampa is mosaic. They own right over 400,000 acres, and they're a fertilizer company. So they are huge in Tampa, as you know, from ground all the way up to politics and everything else. So they are very big employer and advocate for the port and everything else that's going on there.   Michael: Right on and Jeff, you give folks a sense of like, what is a traditional typical three, two, single family home cost and what would the rent look like and maybe you can give people an idea of some of the different neighborhoods in which they could be considering?   Jeff: The median home price now is right around 335,000 today, and we have about less than two months of inventory, scroll back to 2019, we had about six and a half months of inventory. So we've reduced that by about 300% and days on market, three to five days max, if it's even close to move in ready and that that median price. I mean, I'm looking at the chart now it's almost it's very, very close to 350,000 as of today, and it's just it's very, very challenging, but some of the better neighborhoods. So if you're in Tampa, South Tampa is really where you want to be, but those price points are honestly million dollar homes for a three two and so those rents and cap rates just won't sweat. They won't crack the code for what we're looking for and what honestly any investors should be looking for. So that's not really where we want to be. But I would say that Brandon is a great area. It's just outside of Tampa. It's about 30 minutes east, very sprawling tons of land, tons of nature, tons of trees and that area is a great neighborhood. Same very roughly same median price per square foot, you'll probably be able to get rents around anywhere from 1900 to 2200 for that size home depending on the condition and that's honestly a pretty savory return. Of course, you're now seeing foreign 450 be the norm there too but the rents are following. You know, I mean rents for those are 26 to 2800, all day long and sometimes that makes the cap rate, it maybe the cap rates a little more compressed and the overall return, but the cash flow is higher, and you know, the appreciation is going to be there.   Another and it's really hard to find a great cap rate neighborhood right now, because it's just, it's getting nipped up so much. If you go west of Tampa, north to the west Chase Oldsmar area, that's a great little area to that has very, very, very, very quickly start to price up as everybody's moved there, to where they couldn't afford South Tampa to where they couldn't afford north of Kennedy and West Tampa and so that's an excellent little pocket there great schools, great golf courses, you've got all ages that enjoy that area, which is, in my mind, for somebody that's looking for a renter, always, that's a good market to be in and then if you go north of Tampa, you've got Carolwood up there and greater Northdale. So all that area, there is also a great pocket of Tampa, the price points are going to be pretty high on average as well. But you can still find that starter entry level home and if you can get it at a good cap rate buy it, the every growth that I've seen is coming north of Tampa, in waves and this cheval Lutz area all the way over to Keystone in an East Lake. This actually has the highest concentration of wealth in the Hillsborough County so it's actually not in South Tampa. It's not in downtown, it's not on Davis Islands, which is a phenomenal honestly the best part of Tampa but a home there's you know, 4 million for 1500 square feet so those prices are crazy, but this area is excellent very equestrian, tons of lakes, tons of lake homes, tons of golf courses, nature trails preserves, an excellent up and coming area to be in and then one last area I'd like to highlight is the Ybor City and Seminole Heights area.   So this area is directly north of downtown Tampa and if anybody on here is familiar with St. Pete and fourth Ave, fourth Ave, stretches out of downtown St. Pete and goes north and that stretch is probably a 10 mile stretch of the most golden real estate I've ever seen retail shopping centers, storage homes, but that's been there for 20-30 years and then north and east where you see that Columbia restaurant is Ybor City, historic Ybor ton of culture there a ton of background ton of history, an excellent place to be but it is very, very pocketed and very hard to find land there, but would be an absolute killer. The next best spot is going to be Tampa heights and Seminole heights. If we see the Hillsborough River here, that's kind of the cutoff point for Seminole heights and then everything south of the Hillsborough River to about 15 Street is both terminal, Tampa heights and Seminole heights. Those areas are fantastic. People love to be there. There's a whole bunch of you know, farmers markets and pop up shops and just cool boutique II stuff that is not you know, another McDonald's and Taco Bell that people are bored with. So this that's another great neighborhood, and that also sprawls out into a sea wells wood, and then West Ham over here by the airport.   Michael: That's a super great overview. Jeff, thank you so much.   Jeff: Absolutely.   Michael: I'm so curious if you can give people an idea of how property taxes work, because I think that can often be and I'm sure as you see, one of the biggest maker breaks of a real estate deal. So give folks a walkthrough in the Greater Tampa area. Of course, it varies county by county, but how should they be thinking about property taxes?   Jeff: Excellent questions. So obviously, we all know taxes based on a millage rate, every county, like you said is different county by county. But based on that, I mean, there's really not much else we can do to kind of guesstimate and or further understand it besides going to the Property Appraiser website. But plugging in the property and estimating the taxes. A good rule of thumb with that though, is that I found is anywhere between 85 and 90% of the purchase price, and then take the millage rate, then we can kind of skip the step of you know going in there and directly estimating it but that is that will get you within 99% accuracy of the taxes when they become reassessed after closing and so again, that's 8085 to 90% of the purchase price. So if it's 400 it's gonna be about you know, 375 380 and then take the millage and then that'll be your that'll be your new annual tax roll. And that is very, very, very, very important to take into account because I've seen a lot of investors in the past, go into a property and just pull the current taxes without any idea that they're gonna go. If that person's owned the home for 30 years tax you're going to have Got 1000 a month on a $400,000 home after you close, they're going to be closer to about, you know, five to 6000. So that that alone can easily skew a deal. So you always want to make sure that the taxes are, you know, properly at least estimated going in and then double checked while you're going through the process.   Michael: Jeff, you said 1000 a month for that 30 year old 30 year old hold, but I think he made 1000 a year, right?   Jeff: Correct. Yeah, absolutely, 1000 a year for sure.   Michael: Okay, okay. So is there like a good rule of thumb, if someone doesn't know the millage rate like 1% of the sale price, or one and a half percent of the sale price,   Jeff: I would I would inch to one and a half percent of the sales price because I'm seeing more and more than a $400,000 home is any anywhere between 5500 to 7500, depending on their tax district and while it is county by county, there are some overlays in some certain neighborhoods and CBDs that we'll have some effect on that. So I would I would definitely lean to one and a half percent and then if you want to be real conservative, just go 2% and then it'll always be below that.   Michael: Okay, right on. Now, anyone who's ever listened to the news ever, or who follows any kind of climate or weather has heard about that Florida has hurricanes. Talk to us a little bit about some of the weather and climate, things that are unique to Tampa that someone from California might not be aware of.   Jeff: Right, well, I will say anything that you've seen from not being in one, it's always way crazier, that are way less crazy than what they say it is obviously…   Michael: People hanging on the palm trees, you know, getting strung out.   Jeff: Oh, yeah. All, all extremely oversaturated. In my opinion, the biggest thing with Tampa Bay is flooding. And that really only happens in South Tampa and waterfront properties. So honestly, I would say any investor in Florida should really avoid waterfront properties because of hurricane insurance and flood insurance. They're just too high and they're gonna kill your returns not on not including any liability insurance you have. For the tenant that's there, I would say waterfront would work excellent in a short term rental, because that's kind of a hotel experience. But a long term tenant really is not going to do great there. I would certainly avoid it. Overall, if you're in the mainland and not in the low lying area, hurricanes aren't gonna do just about anything to you. As long as the home is up to code and you have a you know, Hurricane Preparedness step do you have the metal covers for the windows and just, you know, it's simple Google search will show you how to get hurricane ready, but it's really, it's really way more than they hype it up to be.   Michael: Okay, awesome and that's a really good point that you bring up. If the house is up to code, you expect it to withstand a hurricane or not became a drone? How should people be thinking about older housing stock or does Tampa even have older housing stock, like in California, we've got a lot of 1950s built ranch style homes. That's just a lot of the bulk of the inventory, what are you seeing there in Tampa?   Jeff: Exactly the same, the bulk of the inventory is probably going to fall in the 1970 range, a ton of homes and that 1950 to 1980 and then honestly, in Ybor you'll see a whole bunch of homes in 1912, 1915, where the area is very, very old, and has a ton of homes with crawl spaces. So what you want to avoid is homes on a crawlspace. If it doesn't have a slab Foundation, honestly, just avoid it. Can you get around it? Can you figure it out, can you have a foundation inspection? Absolutely but those are all things they're going to tack on to the cost and your whole period. If you're a five year holder, maybe it's not a big deal. But if you're at 1015 20, you are going to be dealing with foundation issues, at least at some point and it is not cheap. So that is one thing I would avoid with the age of the inventory and then one other special thing that kind of gets talked about a lot in Florida is sinkholes and so sinkholes are extremely common. They're not as bad as again, as you see on the news 99% of the time. But what happened back in, I would say 95 205 a couple people had a sinkhole that was relatively bad, you know, the home was falling in and unsafe living conditions and then insurance companies and engineers that were working with them came into the entire neighborhood and said, oh, you've got settlement cracks. This looks like a sinkhole and so you'll see 85% of homes maybe even higher than that that have had a sinkhole remediation done with no significant repairs or need for that at all and once the sinkhole home has been remediated with either a chemical grounding a underpinning or a another. They actually insert concrete under the home once you do either of those three things. Your risk for a sinkhole after that is slim to none because once you solidify all the Lime Rock and silt that's under the home you're done, there's nothing to worry about, just check for warranties, and make sure that engineering report gets to your insurance provider and I believe there's still only two insurance providers in the state of Florida, that will insure a single home. So it's going to be a little bit more expensive as well. So just keep that in mind.   Michael: Okay, good to know and, Jeff, I just want to go back to the foundation, you said that to avoid slabs or avoid crawl spaces?   Jeff: Avoid crawl spaces. I mean, you don't have to avoid them at all costs. But if the house looks a little wonky, even on the photos, just go on to the next one. I've seen 95% of every home that I've been that has a crawlspace has some sort of issue, you can drop a marble in the kitchen, and it ends up in the living room every time. It's just Florida. I mean, Florida with sinkholes, and still homes horrible mixture and there's not a ton of those. But you'll see him a lot in Ybor City a lot around some of the older areas of Tampa, but just stick to the easy stuff, you know, slab on frame or slab on block and you'll 9 times out of 10 you'll be good to go.   Michael: Okay, right on and from a kind of hurricane perspective, what are your thoughts and what should people be looking out for in terms of roofs?   Jeff: You want as long of a life expectancy on the roof as possible, um, shingle roofs are great, every roof made in the past, I think from 2010, or maybe even earlier, since we had that one bad hurricane that came through all of the code is updated. The majority of the roofs have roof strapping that straps the trusses down to the block and that helps tremendously during hurricanes and just about every home has that and when you get an inspection, you do your wind mitigation and that is a very, very, very big piece of the pie to save you money on insurance, especially if you're considering hurricane coverage. So I would say maybe one out of every 100 to 200 clients gets hurricane protection. But it's available and honestly, you really just want to make sure that it has up to code roofing and those standards and it'll be just fine.   Michael: Right on and kind of in the same vein as insurance. What are you seeing or do you have a good kind of ballpark estimate for clients and listeners about what insurance costs are in Florida?   Jeff: Absolutely, to keep it simple, like we did with the taxes, I would probably say that's very close to the 1% rule and probably even a little bit below that, a $400,000 home. I've seen quotes anywhere from 2800 to 3800. So if you use the 1%, it's going to be less but you know, as long as you're not in a flood zone and don't you know don't have any hazard or wind additional add ones, then that should be a perfect, perfect metric to keep track on.   Michael: Right on. Jeff, this has been super awesome, man. Any final thoughts, things tips tricks that folks should be aware of as they're investigating the Tampa market?   Jeff: Absolutely don't wait, don't sleep if you want something, get it now get it while it's hot, because it's only going up. I think we've been undervalued for a very long time. I think we're at market value now. But I think the you know, honestly, the 10 to 30 year window and long range gross of Tampa I think is going to pay massive dividends for whoever can get in there.   Michael: Right on and I guess my last question you, are you seeing stuff go over asking or are you still seeing things come under list price or how are you seeing that?   Jeff: The market right now is very weird. Only because I've been used to just stuff flying for 18 months now. With the rates kind of adjusting the way that they have been everything has slowed to a tolerable level instead of 20 offers on a home we have three to five, so it's still chaos, but it's controlled chaos and something we can all deal with a little bit. But yet if you're not offering asking, you're not getting the house, if you're not offering 10 grand 15-20 above the house, you're probably still not getting it if somebody else's cash. So it's, it's extremely competitive. You have to be willing to push that cap rate on your own and be ready for the appreciation and the rent growth next year to kind of float you to where you want to be.   Michael: Okay, so good to know, Jeff, our certified agent out in Tampa, and folks have questions for you want to get a hold up? Where's the best place for them to do that?   Jeff: Absolutely. Um, you can visit our website at any time https://sefair-inv.com or feel free to reach out to me directly. My cell phone and email will be left in the podcast notes and I'll be happy to do whatever you like.   Michael: Right on. Thanks so much Jeff, can't wait to hear from you to chat soon.   Jeff: Absolutely, buddy. Have a great day, thank you!   Michael: Thanks, take care. All right, everyone. That was our episode A big thank you to Jeff for coming on and hanging out with me. It was a lot of fun, super interesting and clearly he is jazz about the market. I think a lot of us should be too. As always, if you've liked the episode I would love, love, love to hear from you all check out some ratings or reviews from you all and just hear what you have to say about the show. We look forward to seeing on the next one and happy investing!

Michael Benezra is the Executive Director and Co-Founder of the GK Fund: a nonprofit social impact fund to support BIPOC-owned companies in Greater Boston. Michael also serves as the COO of Colette Phillips Communications, helping to lead the All Inclusive Boston (https://www.bostonusa.com/allinclusivebos/) tourism campaign, among other projects. Chad talks with Michael about being a BIPOC ally, disparities amongst the VC world, and how the GK Fund looks for the same things in BIPOC-owned companies that they look for in other companies because the innovation is there; it's just that the opportunity isn't. The GK Fund (https://www.thegkfund.org/) Follow The GK Fund on Twitter (https://twitter.com/GK_Fund) or LinkedIn (https://www.linkedin.com/company/thegkfund/). Colette Phillips Communications (https://www.cpcglobal.com/) All Inclusive Boston (https://www.bostonusa.com/allinclusivebos/) Black Owned Bos. (https://www.blackownedbos.com/) Follow Michael on Twitter (https://twitter.com/MichaelBenezra) or LinkedIn (https://www.linkedin.com/in/michaelbenezra/). Follow thoughtbot on Twitter (https://twitter.com/thoughtbot) or LinkedIn (https://www.linkedin.com/company/150727/). Become a Sponsor (https://thoughtbot.com/sponsorship) of Giant Robots! Transcript: CHAD: This is the Giant Robots Smashing Into Other Giant Robots Podcast, where we explore the design, development, and business of great products. I'm your host, Chad Pytel, and with me today is Michael Benezra, Executive Director and Co-founder of the GK Fund, a non-profit social impact fund to support BIPOC-owned companies in Greater Boston. Michael is also the COO of Colette Phillips Communications, helping to lead the All Inclusive Boston Tourism Campaign, among other projects. Michael, thank you for joining me. MICHAEL: Thanks for having me. CHAD: I'm curious about the GK Fund. When did you start the Fund? MICHAEL: So, at the time, I was working for the Israeli Foreign Ministry, and I was working with venture capital firms, private equity firms. And I was representing over 200 Israeli companies in New England, most of them startups. And my wife is Black; my family is Black. I've been close to that community for a long time. And especially in the venture capital world, I started to see some real disparities amongst other disparities in general everyday life, but it was particularly bad in the VC world. And so Colette being a mentor and a friend of mine, Colette Phillips, I approached her, and I said, "Hey, what do you think about starting this fund, this non-profit fund?" And her and Andre Porter, who is our other co-founder who used to be the head of the state's business development agency in Massachusetts, we all decided to band together and start this non-profit. Now, we started the non-profit in December of 2019, so the pandemic hit right as we were creating this organization. And we had a decision to make, do we put this on hold, or do we move forward and accelerate? And we decided to just move forward. CHAD: Well, I'm glad you did. I'm glad you made that decision. Hopefully, you feel the same way. [laughs] MICHAEL: Yeah, I do. CHAD: You're absolutely right. There's a big need here. And I actually have had over the last two months or so a few different guests that are creating VC funds or funds of certain kind that address underrepresented communities, Black, another one was veterans. And there's such a big need. How did you decide what you were going to focus on or focus down into so, for example, focusing on Boston? MICHAEL: For Boston specifically, it had to do mostly with proximity. So I went to Harvard here for grad school. I worked for Governor Patrick. And so, for me, it was natural to stay local, especially during COVID. In my experience, there were a lot of BIPOC, particularly Black-owned startups, that were on paper akin to a lot of other startups in the Israeli world, which were very developed or also in the United States. I'll give you an example; there was a company that I worked with that had a $100 million valuation but had no products, no physical products. They had no revenue, but they had innovation. Now, you and I being very honest, do you think a Black-owned company could get away with that? CHAD: Yeah, no. MICHAEL: There is no way. I knew that; the other entrepreneurs that I've talked to know that. That is a terrible double standard that needs to be fixed. So we look for the same things in BIPOC companies that we look for in other companies because, for the most part, the innovation is there; it's just that the opportunity isn't. CHAD: Yeah. To dig into that a little bit more, I think one might say, well, if they had a founding team that had a proven track record, then maybe. And that's where you get to the fact that it's systemic, too, because if the headwinds are there where they can never get that experience, to begin with, they never get that opportunity, to begin with, then they're not going to have a founding team that has a track record that will be invested in based on just the team. MICHAEL: That is 100% accurate, but it's actually even worse. So we do not ask our founders in the application process for their educational background. But all six of the companies that got grants from us last November they all have their bachelor's, four out of six have masters or higher. And so the cream definitely rose to the top. We had a store owner she owns an online boutique who got an engineering degree from Purdue. And we also have an entrepreneur who was an attorney at State Street, a corporate attorney, and now he's created this startup. And so, in some cases, like in most other areas, these individuals are overqualified. CHAD: So, what is the funding model for GK on both sides of the equation? Where is the money coming from, and then how are you funding the companies? MICHAEL: So we raise money organically like any other non-profit does. So we apply for grants. We take corporate donations. We take individual contributions online. Most of our money so far has come in through corporate contributions. So PNC Bank has been with us since the beginning. They made a very large commitment to supporting racial equity, and they've really stuck to it. The Bar Foundation has been exceptional. And then we've also had a group of individual donors who were actually White women who have started their own non-profit now, and they've also banded together to give us money that we need to re-grant to the companies. We have over 100,000 from the State of Massachusetts to operate a grant program. So money is coming through a number of different avenues. We've issued six micro-grants so far at $10,000 each. We did that in November. We plan to do ten more in the next month. I said in the Boston Business Journal article you can give us money, but you can't park it with us like you could with a donor-advised fund and watch it accumulate interest for 15 years. We're going to take it, and we're going to give it to the people that need it the most. CHAD: And are they grants then? You're using the word grants, so I assume that they are. So you're not doing this in exchange for equity in the companies? MICHAEL: No, no equity in the companies, no convertible notes, just a straight capital grant directly to the company. So I send a message over to our fiscal sponsors at Philanthropy Massachusetts. They send the check directly over to the company. After that, we have the company fill out a survey letting us know what they plan to use it for, but we're not overly prescriptive. And that's actually the way that philanthropy is heading right now is, putting fewer restrictions and barriers in the way. And that's another thing I'll talk about as well is making it easier for companies to gain access. CHAD: So, did you ever consider more of a traditional VC fund model with this? MICHAEL: Yeah, originally, I did. Before the pandemic, actually, I did. So the original purpose or impetus of the fund was to take companies that were coming out of accelerator programs that were underfunded. You have some great accelerators, but you have companies leaving with a business plan and $2,000. In some cases, there are companies that have been through three accelerator programs. They're not getting as much out of it as they should. I wanted us to intervene, find the companies that have the most potential, and make investments. But after COVID hit, it was a crisis. And so, we needed to shift our focus to philanthropy. CHAD: The nice thing about that is then you can do those grants with basically no strings attached for the companies. Whereas if you were taking money from people who expect to get a return on that investment, you wouldn't be able to do that. MICHAEL: That's exactly right. There are organizations out there that say that they're making an impact when in reality they're just making, you know, loans which is not a not a bad thing. But they're issuing loans, or they're taking equity in the companies, that's fine, but it's not what we're doing. CHAD: What are your plans for, like, upcoming? Are you going to be continuing with micro-grants, or do you have bigger plans? MICHAEL: We have bigger plans. So I can't say too much right now because we have an announcement coming up. But I will say issues like legal services have come up. There's a constant need for attorneys for any company, whether it's contracts, or locking down real estate, or copyright and trademark, or IP. We are working with a very large prestigious law firm that's really making a generous commitment to our companies. And this would involve us even adding free legal services for an entire year to our grantees. So that's one thing that we're planning to do. And then the other is, and this another function of the fund, is we speak with organizations like Lyft who's donated like $5,000 in ride credits that we're giving to our grantees or Wix, which has given us like 75% off of websites. We work with partners who can also give us other services that we can provide to these companies to try to get them closer to where there's a gap. Giving them capital is not enough. The disparities are too significant. We also partnered with Berkshire Bank, so I can make direct referrals for loans if they need them. But the idea is to really narrow that gap and give these companies the same opportunities that their White counterparts have. CHAD: That's great. So you, as someone who's White doing this work, how do you find yourself in the community? How do you be an effective ally and advocate? MICHAEL: For me personally, my connection personally through my wife and also through my family and my boss. Colette is a pioneer. She's a Black woman in Boston who moved here not knowing anybody. And 30 years later, she's on The Power of 50 and 100 influential lists, but she did that through hard work. And she's worked much harder, I think, than she would have had to if she weren't a woman from Antigua who came here on her own. But ultimately, as an ally, it's my role; it's our role to step in between situations where there's inequity. So if there is a company, one of our companies, for instance, who's having a problem locking down real estate, (I think I use this in the article.), and they're saying, "Well, the real estate agent is telling us they can eliminate our lease at any time they prefer which I know is basically legal." I'll call them up and say, "Look, I'm with the fund. We're backing this company; we support them. What's the situation?" And unfortunately, most of the time, the outcome actually changes. So it's a matter of almost you got to be proactive, and you got to be intentional. You have to use your privilege in the best way that you can. So I think that's how you do it. And then, when it's time to shed a light on these companies, you take a step back, so it's not my role to go out there and promote myself. If anyone asks me, I'm always promoting the companies. So the best thing we can do is be advocates. You can be out front, but at the end of the day, it's about uplifting them, these companies in this case. CHAD: Yeah, that's great. Speaking of that, I was going to ask you, what are some of the companies that you have given the micro-grants to, and do you know how they use them? MICHAEL: Yeah, so we gave our grants to six companies. One is called MustWatch, and MustWatch is founded by Che, and Che, his family, is from Haiti. They are an app. You can actually find them on the App Store. But what they do is they allow you to log in, select which movies and television shows that you watch, and share them with your friends. And it sounds like a very simple concept, but there is actually nothing on the market that allows you to do this. And the idea is that you're collecting data while you're doing this as MustWatch. So at the end of the day, if you have a sample of like 20,000 users on the platform, you gain a lot of valuable insight and data. And that data can be useful for Nielsen or the television networks or movie production studios. I encourage people to sign up for MustWatch because if you spend as much time as I do looking for good movies, you're probably miserable. CHAD: [laughs] MICHAEL: [laughs] I spend so much time doing that. We also have a few online retailers. So we have B. Royal Boutique and So Zen Spa, both of them have doubled their revenue during COVID. They originally had stores. They pivoted during COVID, went online, and really were excellent when it comes to branding and marketing on social media and on other digital platforms. So they've been very successful. We have a company called Black Owned Bos., which is pretty well known here in Boston. They basically focus on organizing and running pop-up shops. And Jae'da, who's the head of the company, is just, I mean, she's a business mastermind. She's brilliant, always finding new ways to innovate. And then we have Our Village, which is focused on community development and housing. And finally, sySTEMic flow, which is a company that helps school districts, educators support Black women in STEM and STEAM fields. So we looked for companies that could pivot, basically. CHAD: And you mean in the face of the pandemic. MICHAEL: In the face of the pandemic, we looked for companies that had success and had a plan and also knew their audience. The main things that we look for…and I should say this too; our application process takes an average of seven minutes. And the way that I did that was I evaluated over 20 accelerator applications. I did a comparative analysis and identified the questions that were either irrelevant or unhelpful for us. And that gave us a very short application for our companies but one that's really efficient. And basically, what we're looking for is companies that have a good business model, have a very specific customer base and target market, and have a strong founder, and also has been undersupported. There are companies that we've identified for our next cohort that by this point in their development would have been venture funded in my experience, at least, had they not been people of color. Mid-Roll Ad I wanted to tell you all about something I've been working on quietly for the past year or so, and that's AgencyU. AgencyU is a membership-based program where I work one-on-one with a small group of agency founders and leaders toward their business goals. We do one-on-one coaching sessions and also monthly group meetings. We start with goal setting, advice, and problem-solving based on my experiences over the last 18 years of running thoughtbot. As we progress as a group, we all get to know each other more. And many of the AgencyU members are now working on client projects together and even referring work to each other. Whether you're struggling to grow an agency, taking it to the next level and having growing pains, or a solo founder who just needs someone to talk to, in my 18 years of leading and growing thoughtbot, I've seen and learned from a lot of different situations, and I'd be happy to work with you. Learn more and sign up today at thoughtbot.com/agencyu. That's A-G-E-N-C-Y, the letter U. CHAD: What has been the most surprising use of one of the grants? MICHAEL: So B. Royal used the grant money to lock down a store in Assembly Square in Somerville. We kind of anticipated they might do that. So Zen Spa they improved their website. MustWatch actually really surprised us. So they went out and got a valuation of their company and then basically worked with a crowdfunding platform called Netcapital to raise more capital. They had a very specific plan, and they had disclosed that plan to us. I just didn't anticipate they would act so quickly on it. And based on the fact that we had given them a grant and all this mentoring and support, their valuation actually went up. CHAD: That's a really smart use of the funds to propel that into a larger fundraise. That's really smart. MICHAEL: I agree. CHAD: So you do this in addition to a day job. [laughs] MICHAEL: I mean, they're both day jobs; it's just, yeah. CHAD: So you mentioned Colette Phillips, the person, [laughs] how about Colette Phillips Communications? So The All Inclusive Campaign it really is historic. The genesis of the campaign is that back in 2020, Colette and I applied for an RFP from the City of Boston; it was for a tourism recovery campaign. All of the major cities in the country got this grant money through regional tourism agencies, you know, like they're a special interest niche. And they went to the Feds, and they're like, "Look, we're suffering, travel is suffering, we need a grant," so all these grants went out. The City of Boston actually said, "Look, we want to focus on diverse tourism." So that was perfect for us. We applied, we got the grant. And we brought on Proverb, which is an incredible digital marketing agency and creative design agency, and the Greater Boston Convention & Visitors Bureau. It was the largest contract ever to go to a minority-owned company by the City of Boston, ever, and it was about 1.5 million. CHAD: Which in and of itself for what the City of Boston probably spends on things [laughs] is a little ridiculous that that's the biggest one, but … get beyond that, I guess. MICHAEL: It's insane. It's very upsetting. And it was a long time overdue. In this case, that contract or that RFP was really only supposed to last like one quarter. So all these regional tourism agencies they get their influx of money, a million dollars or a few 100,000. And then from there, they do the campaign, they move on. We are now three mayor's into this. We are four million dollars into this. We submitted the campaign to the city 60 days after they contracted with us; 84% of the contractors on the project are minority-owned companies. And in that 60 days before delivering the campaign, we actually never met in person. So we did this whole campaign virtually from the start. We came in under budget. We came in ahead of time. This is what happens sometimes when you let minority-owned companies take the lead. CHAD: Yeah, that's great. How do you do a campaign like this? I mean, this is why they came to you, the experts, but I think it's important that this message seem authentic and not pandering. MICHAEL: Yeah, Colette is a visionary. She's been talking about diversity and inclusion for like 20 years. There's an article that came out, I think, in 1992 where she was talking about the importance of diversity in the business community. And now it's like microfilm; you can't even find it digitally online. CHAD: [laughs] MICHAEL: She's years ahead of her time. And she's constantly innovating, and All Inclusive was her idea, and she branded it. I think it was a long time coming, basically. This is a culmination of a message and campaign that she's been running her whole life. CHAD: Yeah, I think that that's very powerful. And I think it comes across in the campaign. It seems authentic. I think it would be easy for it to not seem that way. And so yeah, it comes from that place of this was already a thing. It was already brewing. It wasn't just -- MICHAEL: Do you want to hear a story? CHAD: Yeah, I'd love it. MICHAEL: So, most of the media coverage for this campaign was exceptionally positive. There are a few reasons for that. We included all small, locally-owned businesses in the campaign. So you won't find celebrities, no athletes, or anything like that; we may do that later. We also invested...we took 200,000 of the contract, which this was not even supposed to be in there. We actually did ad buys with 19 different local newspapers. In some cases, these newspapers would have actually closed down if we had not done that, and that was just a byproduct of something we felt was important. But amidst all of that, she got invited to do an interview on Bloomberg on the local Bloomberg station. She's on the phone, and some guy who was on the other line, and I won't go into it too much, said, "You know, as a White man, I'm really offended. I don't feel represented in this campaign." [laughs] And she's like, "I've had enough of this," hangs up the phone. [laughs] And this is another part of allyship I think is...naturally, you know, I said, "Look, I'm taking care of this." I wrote a letter to Bloomberg. I said, "This is unacceptable. You need to take him to task." I don't know if he still works there anymore. But that's kind of the role. You have a Black woman who's a pioneer. She just released a campaign. The first thing you should be saying to her is "Congratulations," instead of saying that, all you can tell her is about how being a White man is like, I don't know, a disadvantage? Which is crazy. There are tons of White people in the campaign. I'm White; I'm in the campaign. CHAD: It's so foolish. I don't even want to have to explain it, but the campaign is literally called All Inclusive. MICHAEL: [laughs] Exactly, exactly. It covers everybody, I mean, literally. And it's like, I don't know what you want from us. CHAD: Yeah. And it's not even...like you go to the site it talks about here's what you can do with families. Here's what you can do with kids, kid-friendly activities. MICHAEL: This campaign was also research-based. So we spent 100,000 on research with this incredible company called Heart + Mind. They did a lot of research, and they did a lot of surveying. And the words that came back when describing Boston were unwelcoming, masculine; I think Tom Brady, Ben Affleck, crime, you know, just this kind of machismo unwelcoming environment. And it kind of confirmed some of the assumptions we had, but it was really surprising to see it in the data. So we said, "All right, this is what we're working with. We have to come up with a narrative that counters that because Boston is a majority-minority city, 23 neighborhoods, 60% of the population speaks two languages or more. That ethos is really not accurate. So hopefully, we're doing a good job. CHAD: So if folks want to help, we already said GK Fund is a non-profit. It's coming up to tax season [laughs], so at the very least, even if you don't...hopefully, you care about the cause, but if you just want that tax write-off, I suppose that's another reason to donate. MICHAEL: Absolutely. CHAD: So where can folks do that if they want to learn more and donate? MICHAEL: Visit www.thegkfund.org. CHAD: And are you looking for help in other ways beyond monetary? How can people get involved? MICHAEL: Absolutely. So we're looking for mentors so individuals who feel like they have experience or skills to lend to these companies, and we'll try to deploy these individuals in the best way possible. Obviously, we're looking for partnerships. So if you have a company that you feel has something to contribute or is willing to make a contribution, not monetarily but either with your products or with a discount, we also want to give that benefit to the companies as well. And there are a number of different ways. CHAD: That's great. And if folks want to follow along with you or get in touch directly with you, how can they do that? MICHAEL: You can feel free to follow me on Twitter. It's just @MichaelBenezra, all one word on Twitter. I got a lot of positive messages after the Boston Business Journal article came out and in LinkedIn as well. CHAD: Great. And you can subscribe to the show and find notes and a full transcript for this episode at giantrobots.fm. If you have questions or comments, email us at hosts@giantrobots.fm. You can find me on Twitter @cpytel. This podcast is brought to you by thoughtbot and produced and edited by Mandy Moore. Michael, thanks so much for joining me. I really appreciate it. MICHAEL: Yeah, thank you for having me. CHAD: And thank you for listening. See you next time. ANNOUNCER: This podcast was brought to you by thoughtbot. thoughtbot is your expert design and development partner. Let's make your product and team a success. Special Guest: Michael Benezra.

Today with us on the Incite Change Podcast, Coach Mauro sits down with Pauline. Along with the cohosts of previous review episodes, Pauline helps to bring a client perspective to the concepts discussed. For the first time, we are having 2 parts of an episode and this is part 1.  Listen as they discuss episodes #31, #43, #47 and #50 and share how the concepts tie into their personal life. Thank you to all the guests mentioned in this review session. Episode Timestamps ●        [01:25] Stress, Snacking, & Sugar with Health Coach Jaci ●        [10:59] Professional Decisions with Louis ●        [16:30] It's NOT a Diet, It's a Lifestyle with Sanaz ●        [29:15] No More Homers with Michael ●        [36:09] Come back next week for Part 2 Episodes Mentioned ● Episode #31: Stress, Snacking, & Sugar with Health Coach Jaci ● Episode #43: Professional Decisions with Louis ● Episode #47: It's NOT a Diet, It's a Lifestyle with Sanaz  ● Episode #50: No More Homers with Michael Thanks so much for tuning in. Join us again next week for another episode! Contact us! If you would like to get in touch, leave us a comment! Visit our website - www.healthyincite.com Follow us on Instagram - https://www.instagram.com/incitecoaching/?hl=en Follow us on Twitter - https://twitter.com/healthyincite?lang=en  Like us on Facebook - https://www.facebook.com/incitecoaching/ 

@MartinGinnane from  @ginnaneassociates is an expert advisor on #retaildevelopment #placemaking and #brandactivation. He's worked with international cities and regional towns on major #investmentattraction #regionalrenewal and #retailrenewal projects. He was the #vicgov first retail industry specialist, is a member of the @victoriangovernment #SmallBusinessMinisterialCouncil and had senior roles at the #vicgov #DepartmentofBusinessandInnovation and was #DeputyManagingDirector of #DowntownDutyFree. The following quote from his website sums up his philosophy and approach to the work he does."Global Cities of significance all have one thing in common, a strong and vibrant, culturally diverse heart that encourages people to live, experience, participate and claim ownership of their location. At the heart of these cities, is a unique offering that makes them stand out from the sameness that is making so many cities bland and boring. Retail strength, placemaking and events are the economic backbone of all successful global cities and large residential developments." He's currently working on a major retail renewal project with the @cityofwarrnambool and in the discussion we cover;bringing his experience with major city #investmentattraction to regional townsthe exciting opportunities ahead for #regionaltownsavoiding the 'sameness' that is making so many cities bland and boring, the #oversuccess of big citieshow #Covid19 fast-tracked problems in the retail sectorwhere and how #prestige  has lost out to #masstige  and why "luxury is about where you found it rather where you bought it"#liebigstreet #warrnambool the critical role of #localgovernment   #restorationgrants  #landlords #localcouncilthe component pieces in a vibrant and vital #retailstrip#treechange and the influence of these younger people when they return to the towns they were born in#foodandbeverage #whiskybars #goodbottleshop  #ginbars #goodpizzabuilding #sustainable #businessmodel from services and products that appeals to #locals and #visitors #smallbusiness an #employmentgenerator in #regionaltownswww.kerrcapital.com.auA full transcript of the interview is below. Michael Kerr: Hi, it's Michael Kerr here presenting Small Business Banter.A healthy micro and small business sector means a successful economy and a more vibrant society. Small Business Banter is about helping regional business owners better prepare for current challenges, but also for the next stage of business success. I'm Michael Kerr, founder of Kerr Capital, advisors to business owners.Each week I interview a fellow small business owner or an expert and they share their stories, their life experiences, the wins and the losses, and their best advice to help you, the listener, get the most you can from your own business. Small Business Banter is brought to you from the studios of 104.7 Gippsland FM and is heard across Australia on the Community Radio Network. Thanks also to Kerr Capital supporters of the show.Okay, welcome to another edition of Small Business Banter. Really pleased to have in today with us, Martin Ginnane, from Ginnane & Associates. Martin will tell you a lot more about what he's done in a few minutes, but I just wanted to cover off some of the highlights. He's principally responsible for advising on retail development, place making and brand activation. He's done a lot of work in both big cities and regional areas. He's a member of the Small Business Ministerial Council, and he's really a Retail Industry Specialist here in Victoria. And prior to that, he was the Deputy Managing Director of Downtown Duty-Free. Firstly, welcome in today, Martin. Martin Ginnane: Thank you very much. It's a pleasure to be here. Michael: And for today's discussion with Martin, we're going to be talking about regional renewal, making the most of retail, attracting investment, and lessons learned from some of the major initiatives. Martin was involved in Melbourne and now has been working with regional Victoria locations in Camperdown Warrnambool and Ballarat. So we're looking forward to that. But Martin, if you could, just give us a couple of minutes in your background so the listeners are in sync with where you come from and what you do. Over to you.Martin: Thank you, Michael. I'm fortunate enough to have had a very varied background, but all around the retail sector. Born in Melbourne many, many years ago. I was raised in Melbourne. I spent 20 years in Sydney where I started my retail career with companies such as Angus and Coote, The Jeweler's and Diamond Traders, which was part of then of the Hooker Corporation owned by the illustrious George Herscu. And then was poached to join Downtown Duty Free in the days when Duty Free was a big business. We had Melbourne Airport, Brisbane Airport, Sydney Airport, and about 15 off-airport stores. So, at about 6,000 staff in those days. I joined there as Deputy Managing Director. And after six years, we were taken over by Swiss Air Company. I was retrenched and thought, well, I'll come back home to Melbourne. I came back to Melbourne and was appointed as the Victorian government's first Retail Industry Specialist at a time when Melbourne in particular had vacancy rates as high as 17 to 18%. I was appointed under the Kennett government for 12 months and ended up staying there for 17 years. And during that period, I work mainly on investment attraction for the CBD, an original advisor on the Melbourne Fashion Festival for the state government up until I departed 10 years ago to establish my own business, Ginnane & Associates.Michael: Excellent. So, from that background, you know a lot about foot traffic. So I'm looking forward to exploring the work that you've been doing. I mean, drawing on that rich experience, but also relating it to what you've been doing in some of the regional parts of Victoria. So, I just wanted to start off with a quote from your website, "Global Cities of significance all have one thing in common, a strong and vibrant, culturally diverse heart that encourages people to live, experience, participate and claim ownership of their location. At the heart of these cities, is a unique offering that makes them stand out from the sameness that is making so many cities bland and boring. Retail strength, placemaking and events are the economic backbone of all successful global cities and large residential developments." That's straight from your website. It was very powerful. I'm going to ask you about how regional towns and regional cities in Australia can take something from that. I'm assuming it applies across towns as well as cities.Martin: Most definitely, Michael, it does. It's a big statement, and it's a strong statement and it's one that I'm thinking actually of using on every single presentation that I do to whether be commercial or private government, particularly in this day and age. It came from the fact that a lot of things were happening in the retail sector prior to COVID. We can all say that COVID caused it, but there are massive changes happening prior. One of the things that was driving this belief that I have in that statement is that sameness was happening all around the world. So you could walk down in Collins Street, you could walk down all the major cities, and they were taken over now by the mega giants, the Louis Vuitton's, the Gucci's, the Prada's, who roll out their international branding twice a year.So, you can walk down these streets and look in the windows and you'll see the same thing. The only time that you'll notice if you'll look up and you'll see St Paul or St Patrick's Cathedral or Notre Dame and you'll think I'm not in Melbourne, I'm in Paris. So seriously, that's how bad retail was getting.Michael: They'd taken that McDonald's consistency of product just a little bit too far with their retail.Martin: Yeah, and I call it masstige rather than prestige. It has got to the point where the big players are having to buy smaller boutique operations now to make themselves unique and so-called exclusive again because of the success and over success of some of those global brands.Michael: Too much commoditization of a once glorious brand. Martin: Exactly. So, one of the things that comes out of this is the desire to experience something that is different and unique. One of my other sayings is, "luxury to me is about someone says where did you find that as opposed to where did you buy it." Because you can buy anything these days. If you've got the money, you can buy something at the top. When within 18 months it'll be at H&M or probably far less than that, or how you can buy the copy of it. But the wonderful discovery, finding something, whether it's a great old book or pre-love tie or whatever the case may be. So, jumping back into your question. This is where retail cities and towns across Australia had the upper hand. It is really, really their opportunity to shine. We can discuss that as we go along. Michael: Yeah. Look, I think we ought to jump straight into that. The renewal or the potential renewal of the local shopping strip. I mean, you're doing some work recently, I think, in Ballarat, which got some magnificent real estate and grand streets. But what would you take to those places to make that local shopping strip vital and exciting for the locals? I'm assuming we're not going to have potentially some of those big international luxury brands.Martin: Nor do you want them. But Michael, what I think is the scenario is that it's going to be driven by two things. You've got to have an appetite by the local government. You've got to have an appetite by the council. For example, I just almost finished four years work with the City of Warrnambool on the redevelopment of Liebig Street. So they had a counselor at the time who had a vision to say to themselves and their constituents, "If we don't do something with this beautiful old big wide street, it is falling into such disrepair that we are losing out to the new shopping centers that are opening and almost circling like a western movie with the wagon train circling the town." Michael: Right. And choking it off.Martin: And choking it off. Now, this scenario with success for any regional town or major strip is to make sure that they are no longer just selling stuff. I use the difference between a product and an NSA stuff. This is not being derogatory to any of the brands that are in the shopping centers around regional cities. And those shopping centers do offer convenience. If it's pouring with rain, a young mother can drive in or a young father can drive in. Unload the baby. It's dry. They are not going to get wet. But although found in those shopping centers is stuff. They'll find inexpensive football socks for the kids which they need because they grow so quickly. They'll find a dress. They might find a cheap, inexpensive set of cabinets or something for their bedroom. That's fine.When they come into Warrnambool or when they come into Ballarat or when they come in to Camperdown, it's about wanting to come into town because that is where they are going to experience and find things that are different and unique. They are going to be able to engage with the community in a much nicer environment, wider footpaths, planting, better awnings, easier parking. All those things make for an environment that will make regional cities and towns continue to thrive.Michael: Right. So Warrnambool, Ballarat, other regional towns around Australia, the history is there. But you talked about having local councilors being a big part of the equation they need to support. What about landlords? I mean, some of these buildings are grand and make for beautiful retail or food or whatever. But the older they get, the harder they are to maintain, or the costly they are to maintain.Martin: You can see examples not just in regional towns. You can see examples on Chapel Street under the Council of Stonnington on Glenferrie Road in many, many areas. One of the advantages that live shopping centers have is that every so many years, your store must be refurbished. You must meet the guidelines of the shopping center and so forth. So while that creates a great Disneyland feel and a very, very nice, safe environment and a pleasurable environment where we're almost craving. Well, we are craving something that's a bit more earthy and a bit more real.Warrnambool, and I know the City of Ballarat as well. Warrnambool successfully offered restoration grants for property owners during the redevelopment program. The City of Warrnambool got that funding from federal state and from their own coffers. So three lots of funding. I believe the City of Ballarat has done the same for the renewal of the mall. I believe both cities are offering grants and financial assistance to restore and renew these heritage buildings.Michael: Right. So assuming the landlord takes advantage, then it does really open up the opportunities for smaller retail operators, whether they be food or whether they are quirky retail, to start something.Martin: Michael, the exciting thing is when you walk down the streets of these areas now is that you are seeing young people. You are seeing in Warrnambool there's, I think, three whiskey bars. There's a gin bar. These are all being run by young people who were born and raised in Warrnambool. Evidently, you do need to either be born there or marry somebody. And if you marry somebody, you need to be married for 20 years before you are classed as a true business owner.Michael: Before you get your stamp. Yeah.Martin: Even though I've been there a lot, I still don't think I'm a local. But they are coming back to town. They are seeing opportunities to come back to their town and make a living for themselves and their families. There's new housing estates being built in big numbers around these large and medium-sized regional cities. And these people come in many ways, quite often from urban environments, and they still want to live the same way. They want to be able to go out to a whiskey bar. Well, they want to be out to buy some nice cheese and some nice bread. Michael: Yeah. And in today's edition of Small Business Banter, I'm talking with Martin Ginnane from Ginnane & Associates. Yeah, that's a trend that we talk about all the time on Small Business Banter. The movement back from CBD areas, whether it be Sydney or other states and capitals, and this reinvigoration of towns and those people bringing with them some of their experiences. There's no question me, Melbourne and Sydney and Brisbane and Adelaide have some incredible innovation in food, but it seems to be transplanting now in these regional locations. Is that a result of people just having enough of the city being too expensive to run businesses? What are your thoughts on why this is happening?Martin: I think, Michael, you are spot on it. But it's a combination of all those things. It's a combination of perhaps the over success that large cities have had in terms of urbanization, particularly Melbourne, in the last eight to ten years. Massive increase of student population, which we see the massive contribution they've given to the economy, particularly as I haven't been here for the last 12 months. It's a combination of all those things. People want to not necessarily escape, they just want to experience something, whether they are moving permanently or whether they are visiting. The other thing that's happening, of course, is that the ability. I know someone in particular who's going to be working. He stays in Ballarat but is working from Melbourne firm, and then you need to go to Melbourne that twice a week. So all that flexibility is something five years ago we didn't have.Michael: Yeah, I think you made a comment earlier about not what you bought, where you bought it or you found it. You know, I live down the Bellarine Peninsula. My office is in Queenscliff. Well, it's fascinating every day to walk through that street and what it might be and see the gin bars and the distilleries. Not so much in Queenscliff, but certainly in other places, it's booming. It's a combination of that vigor and energy. If you were to take a view of what the next town that wants to reinvigorate their retail strip, the historical retail strip, what are the key that we've talked about to support to restore buildings? I guess we need landlords to come onboard and buy into the vision, and the small business operators. What else or who else is needed to really kick start getting these places? Because people are traveling more and more through regional Australia because you can't go elsewhere. So the opportunities would seem to be there if you've got an interesting offer.Martin: The LGA, the Local Government Authority, has to have the passion. And the counselors, the CEO, have to have a dream of what that town could be. In many eyes, retail doesn't play a part. Retail services and hospitality don't really play a part in local government plans. They may have a four-year strategy for economic development, but retail and services don't normally play a big part in it. So, in order for what you've just said, the other players, the landlords, the small business operators, the potential investors. You have to know that you are moving into an area or considering to move into an area where a council is hungry for your business and is keen to get it.I'm just about to deliver an investment attraction to the opportunity in Warrnambool where we are inviting some of the big commercial real estate agents down to have a look at what the area has to offer. How it's grown, how it's changed. Not necessarily to get any big players down but for them to be able to put Warrnambool in their head for property investors, but also for businesses that might be looking to expand. Michael: So you're saying that retail and retail services aren't really a driver for the LGAs. Is that it?Martin: No. I'm not saying that with all of them, but with a lot of them it's very much... When I started originally with the state capital which was over 20 years ago. I remember having a director said to me, "But Martin, why are we even playing in this space? One shop closes, another shop opens." It's not as simple as that. It's a scenario where council needs to lead the way in a vision of what they want the city to be. And when I say retailer, not necessarily just talking about selling more stuff. A good regional town, a good regional city, should attract people. It should attract its own people. It should attract visitors. But it should attract them for a multitude of reasons. Retail, food, beverage is one of the biggest drivers in today's market.Michael: Absolutely. It is. And it's certainly an area for further discussion. But if you look around, I spend a lot of time in traveling in regional Victoria. I go a long way for a good bakery, a good beer, a good pizza. So, what are the components for a good contemporary retail strip in any given town? What must you have to get people to choose that town over another town? Martin: You have to have two things. You have to have a business model that appeals to the locals, and you also have to have a business model that will appeal to the visitors. Now, I spent a lot of time as a young boy, which was a long time ago in Daylesford and Hepburn Springs, and I remember how it was and I see how it is now. However, for all the success, Daylesford in particular is still very much a weakened economy. Because driven by everything that appeals to the tourist. You must maintain an offering that appeals to your local residents as well. So you need, as you just said, a good pizza joint which Warrnambool has about two and Ballarat has about six. You need a really good bottle shop. You need a couple of good pubs. You need a pub that has good live music. You need a good delicatessen. You know, there's one in Warrnambool called Darriwill Farm. It was a retail released by a woman by the name of Lisa Pitkethly. It's the most amazing business. It's got absolutely everything.Michael: I also tried some stores in the city. I didn't know that.Martin: They had one in [inaudible] and they had one in Albert Park, I think, but I think that both are gone. Lisa's got bought out her own business now. But it's that sort of business where you just go there. It's almost like a small Ikea for food and delicatessen. You just go in. You pick up a basket and you buy. The other thing is, do these towns need this as they get to and need to have the services as well? So there's a good banking infrastructure. There's two insurance brokers. There're things like that that help the community.Michael: Yeah. And those communities would think on across the board of growing. So you've got a bigger and more permanent base to build a business around. This idea of investment attraction, it's still a viable model for local government to think about, local councils. It's not just for big cities. Martin: It's essential because big cities have been so badly hurt. The big cities that have relied particularly on government employees, in a big, big way, and international students. I think of Victoria's wonderful campaign they had many years ago with the jigsaw puzzle. And the course CBD of Melbourne, which I'm actively involved in working on their precincts, review work at the moment. But the pieces of a jigsaw puzzle fall on that. So, the students are falling off the table. The tourists are falling off the table. The public servants in town.Michael: I get it. In that investment attraction, I just want to get your thoughts quickly. There's quite a difference between attracting big employers versus attracting new business operators. I'm very passionate about seeing more small business owners. So it's a balance between getting a bigger organization that can employ 20, 50, or 100 people. But also, I think, sometimes the opportunities to attract new and innovative small business operators. We had Carly Flecknoe from the Made the Grampians Way. She's a classic tree changer. This is maybe 30 episodes back. But that's the kind of energy and vigor that I think we need as well as obviously attracting... Not everyone wants to be a business owner, so we need to have a balance. But I sometimes wonder whether small business might get underappreciated as an employment generator. Martin: They certainly never get underappreciated if I'm involved in anything. I've been in small business in different ways on and off for so many years and I know the difficulties of it, but I am so passionate about believing that this is their time to rise. This is really, really their time to rise. They've got access to so much now in terms of they don't need to pay for big advertising. They've got Instagram. They've got everything at their fingertips to grow their business. Michael: Yeah. They got something that's interesting, quirky. They can get people to the destination.Martin: Exactly.Michael: They can build it and they will come. Maybe that's going to come true for some. Martin: Well, that's why we're doing the investment attraction work. It's certainly not to when under no idea that we will attract big brands, but it's about putting the city of Warrnambool and other cities in investors' minds. Michael: Yeah, and really building on the natural advantage, the heritage, the proximity to food, beverage, produce. Martin: And a wonderful life.Michael: And a wonderful life. Yeah. Hey Martin, that is, unfortunately, time up for us today. But that was a really great chat. Thank you so much for sharing your experiences and your energy and passion for that reinvigoration and renewal. Keep up the great work and perhaps we will chat another time, but go well.Martin: Thank you, Michael.Michael: Thanks, Martin Ginnane.So that is all for today's episode of Small Business Banter. I continue to be inspired, bringing you small business experts and other small business owners and hearing their stories. Do you want to listen to any past episodes? Jump onto your podcast platform of choice and search Small Business Banter. There, you will find a diverse and fascinating collection of small business owners and experts openly discussing and sharing their experiences. For any of the links, resources, or information we've talked about on the show today or to contact me, please head over to smallbusinessbanter.com, or you can find us on Facebook and Instagram. It would be great to have you tune in the same time next week for another episode of Small Business Banter.[END]

About MichaelMichael Garski is the Director of Platform Engineering at Fender Musical Instruments, where he leads the teams responsible for service development & testing, devops, and data. He's been with Fender for over 5 years and prior to that  worked as a software engineer & architect on back-end systems at Viant, MySpace, Countrywide Home Loans & Fandango. He is passionate about application reliability and observability and their impact on customer satisfaction.Links:LinkedIn: https://www.linkedin.com/in/mgarski/ 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: Your company might be stuck in the middle of a DevOps revolution without even realizing it. Lucky you! Does your company culture discourage risk? Are you willing to admit it? Does your team have clear responsibilities? Depends on who you ask. Are you struggling to get buy in on DevOps practices? Well, download the 2021 State of DevOps report brought to you annually by Puppet since 2011 to explore the trends and blockers keeping evolution firms stuck in the middle of their DevOps evolution. Because they fail to evolve or die like dinosaurs. The significance of organizational buy in, and oh it is significant indeed, and why team identities and interaction models matter. Not to mention weither the use of automation and the cloud translate to DevOps success. All that and more awaits you. Visit: www.puppet.com to download your copy of the report now!Corey: If your familiar with Cloud Custodian, you'll love Stacklet. Which is made by the same people who made Cloud Custodian, but put something useful on top of it so you don't have to be a need to be a YAML expert to work with it. They're hosting a webinar called “Governance as Code: The Guardrails for Cloud at Scale” because its a new paradigm that enables organizations to use code to manage and automate various aspects of governance. If you're interested in exploring this you should absolutely make it a point to sign up, because they're going to have people who know what they're talking about—just kidding they're going to have me talking about this. Its doing to be on Thursday, July 22nd at 1pm Eastern. To sign up visit snark.cloud/stackletwebinar and I'll talk to you on Thursday, July 22nd.Corey: Welcome to Screaming in the Cloud. I'm Corey Quinn. We talk to a lot of people here on this show who are deep in the weeds of SaaS companies, or cloud vendors, or cloud vendors cosplaying as SaaS companies. Today, we're taking a bit of a different direction. My guest is Michael Garski, Director of Platform Engineering at Fender Musical Instruments. They make guitars among many other things. Michael, thank you for joining me.Michael: Oh, thanks for having me on, Corey.Corey: So, one of the things that I really appreciate about what you do as a company is I can, at least presumably, explain it to someone who is not super deep in technical weeds without 45 minutes of explainer first. The easy answer is, “Oh, Fender. You folks make guitars.” These days, no one just does one thing, I have to imagine. How do you describe what the company does?Michael: Oh, well, to quote Leo Fender, his view was that artists are angels and it's our job to give them wings. So, in addition to actually making and developing guitars and amplifiers, we've branched off into consumer-facing products to actually teach people how to play those instruments.Corey: You folks have been relatively outspoken about the various things you're doing at different AWS events. I mean, my approach to that tends to be that if AWS is great at making bricks that you can use to build amazing things with, “Well, great, can you draw a picture of the house that you can build with this?” “No, we're going to have a customer come out and talk about that stuff instead.” You folks have been focusing on a lot of serverless work, and you've been very public about the fact that you are almost entirely serverless-driven in terms of architecture if I'm not mistaken.Michael: That is true.Corey: Tell me about that. How did you get there and what brought it about?Michael: So, I work in the digital division in Fender. We started, let's see, we're coming up on five years I've been there. So, what we did was, initially, we started building services that could run within a container, or on an EC2 instance, but we started looking at Lambda functions. We had need to ingest a product catalog, so the IT team was able to drop us off a product catalog into an S3 bucket, and the easiest thing to do then was just trigger a Lambda function to then process that file. And it just kind of snowballed in from there.Corey: I think the common problem when people hear ‘serverless' is they think, “Oh, great. More discussions about Lambda functions.” And Lambda is almost getting something of a tarred reputation in some circles because when we can build amazing things with it ourselves, we love it, but when we ask AWS how to wind up integrating two services, or about a feature gap, their response is, “Oh, use a Lambda function for it,” It starts to feel like they're using it as spackle and the spackle has become load-bearing. Do you view serverless as being purely function-driven or is it broader than that?Michael: It's much broader than that. Serverless is a mindset where you're looking beyond just Lambda functions to using a lot of third-party services so that you can actually focus on your core business. Like, we use Zuora as a subscription provider for web-based subscriptions; we use Algolia for full-text search; we use a variety of other services so that we can just focus on the core business.Corey: One thing that's been on everyone's mind, somewhat recently, has been the idea of dramatic changes as far as user behavior goes. And in the more traditional environments where you see things like EC2 instances or on-premises data centers, back when the pandemic first hit and companies that were very focused on a model of business that aligned directly with people behaving in certain ways that they suddenly didn't, would the 80% drop-offs or more in their user traffic, but their infrastructure spend just kept hanging out exactly where it was, in a straight line. So, at some level, it feels like yes, the whole point of cloud is that it can be elastic, except no one builds it that way for a variety of reasons. When COVID hit, what changed for your business?Michael: Change for our business is we launched a program called Playthrough, okay we did this about a year ago; we started it, we gave away three months of Fender Play for free. It was a single-use code that a user would redeem and no credit card required, and over a period of five days, we saw our traffic increase by more than ten times. And we had very little changes we needed to make. Everything scaled up, we had no issue with—we used a lot of Lambda functions, DynamoDB, everything just scaled up fine. The only point that became a bottleneck was our Elasticsearch cluster. However, beefing up the nodes and adding a few more nodes that resolved that issue immediately.Corey: So, I'm going to go out on a limb and postulate that you folks increased pickup when the lockdowns hit, if for no other reason then, “Well, I'm trapped at home and I'm tired of staring at the guitar on the wall. I may as well learn to play it.” I would guess. I could be way off base on that.Michael: No, no, that's very true. Even since then, even after that program has expired—of course, not everyone then converts and sticks around—but many, many did, many more than we thought would did stick around, and our usage and our goals were exceeded for this last year, and we're in a healthy place, and looking at continuing to grow and expand in the future.Corey: So, one of the applications that I think gets a fair bit of attention—rightfully so—lately, is something called Fender Play, and as best I can tell, that is a app that works in web, it works on mobile, and it's a video-based instruction tool for guitar at least, but some other instruments as well. How did that come to be? Did that exist before COVID hit? Has that been something that's been in the works for a while? Or was it, “Well, we're going to do a two-week sprint and build this thing from scratch?”Michael: No, we launched that—this June we're coming up on the fourth anniversary since it's been launched, so we launched this in summer of 2017.Corey: One of the problems I've always found is that it's challenging to learn to do something that is as, I guess, physical and intricate, et cetera, as playing an instrument without having someone in the room looking at you and smacking you with a stick whenever you do things that are wrong. “Nope, that's a bad habit. If you keep doing that it's going to hurt you.” How do you approach that as a company from a non-interactive perspective of someone who's going to watch a video and do things and maybe it'll work, maybe it won't? Particularly in light of things like, well, the competition is YouTube, which, you know, I'm going to roll the dice and sometimes I'll see a great tutorial, sometimes I'll see one that I don't realize teaching me terrible things, and then it's going to recommend some baseless conspiracy theory because YouTube. How do you differentiate that? What makes Fender Play different?Michael: So currently, you're right; it's just a video-based instruction app. There's not any way to, like, provide direct feedback to students within the web and mobile applications. However, we do have an online community, and our Fender Play instructors do an office hours feature, is where they'll actually answer questions live and talk to students. We are investigating and doing some earlier research in some, possibly, being able to provide that type of feedback to users, but it's very challenging problem, just due to the nature of you're playing an instrument that has multiple strings, so you're trying to pick out the chord that they're playing in, and the timing. But it's something we definitely need to add.Corey: There's something to be said as well for the kind of care and attention that you folks wind up putting into your media where, “This is how you finger a chord,” and someone on the YouTube video will do it for two-tenths of a second, and they're filming it with a potato that isn't focused properly and pointing at the wrong part of the guitar. You folks have a high bar for quality on this. Is that done in-house? Do you wind up just going through a bunch of random folks that you just wind up offering a bunch of gift cards to, or free guitars to do this? How does the program work on the back end?Michael: So, we have an in-house curriculum team that puts together the lesson plans to really help people learn in small bite-sized lessons so that it's not too overwhelming at once. And that curriculum then is shot and filmed by an in-house video team that put that together; they upload the data into S3 for the final cut, then that gets transcoded via MediaConvert, and we serve it up via CloudFront.Corey: It's rare to wind up talking to a company that is something of a household name about something that they're doing, and hear the AWS services that they're using not trend toward a baseline mean if I can be so bold. Normally, you'll see some of the case studies, like, “Oh, this is an online bank. What services are they using?” “Oh, they're using EC2, and S3, and load balancing because did you miss the part where it's a bank?” They're not going to use these far-future services due to regulatory risk, among other things, in many cases.You're using Elemental MediaConvert, which is one of those relatively high-up-the-stack offerings that isn't broadly known. It's one of those services that is focused on specific use cases and specific industry verticals in a way that a baseline primitive service isn't. What does MediaConvert do?Michael: What it does is it takes the final edit of the video, and we have several different presets so that it will put it into an HLS format with different bitrates so that the user is getting the best quality video depending on their bandwidth.Corey: When I looked into it in the early days when it was first launching, I found that it looked an awful lot like Elastic Transcoder, which is a service that they've had for a while, only they changed up some of the capabilities. It's obviously far more capable as a service, but they also added something that felt like 15 different billing dimensions to it, “So, what is this going to cost me?” “Well, we're going to run it for a month and find out if we're still in business.” And it seemed like it was one of those very difficult to get started with and run experiments with service. Now, obviously, services evolve over time. When you started looking into it was that experience roughly akin to what you felt, or am I completely and unfairly slandering in the product?Michael: We actually started out using Elastic Transcoder and then moved over to MediaConvert, I believe it was last year. We found it to be a little bit easier to use, and the pricing overall in transcoding the videos for us is really a drop in the bucket as compared to actually hosting them and serving them up via CloudFront. And when we switched over to MediaConvert, we adjusted our settings to lower the maximum bitrate for a given video, we found that after a certain point, the quality to the user just doesn't really improve, and yet we're paying to serve the larger video.Corey: One statistic that I found was that in March of 2020—you know which I believe we're still in at this point; just, it's the Endless September model, applied to March—you wound up seeing over an order of magnitude in traffic increase within five days, and looking at that through a lens of traditional architecture, that means that nobody sleeps a whole heck of a lot. Given that you're in on the serverless story, and you have been since before that hit, what was that scaling experience like for you?Michael: Scaling experience was completely seamless. We use a lot of Lambda, DynamoDB, Kinesis, SNS, to glue things together, and no problems whatsoever. Just had to bump up our Elasticsearch cluster a bit, that was really the only thing because we saw some latency starting to rise on some of our APIs.Corey: Let me ask the uncomfortable question then because whenever I tried to scale things up quickly in a cloud environment, what was your experience with smacking into various AWS service limits as the traffic grew?Michael: Initially, we actually requested some service limits increase to make sure we weren't hitting the concurrent Lambda invocation limit, and same thing with Cognito, making sure that we weren't going to hit any limits as far as sign-ins and things like that. So, we were able to just put in requests, and they served us around pretty quick turnaround time on that, as well.Corey: It really does seem like there's a strong benefit on the serverless space, but I had to double-check before we started recording that you do, in fact, work at Fender because you are a staunch advocate for observability. And usually, when someone is that passionate about observability, you can guess that they work at an observability-slash-monitoring company. It's akin to the idea of someone selling mattresses telling you that mattresses are great and you should have four of them. You're on the customer side of that and still very passionate about it. Where'd that come from?Michael: Came from my time years ago, when I worked at MySpace—if anyone can still remember that—working on the search systems there. And as the company started winding down, to laying people off, and being one of the only people left working on those systems, being able to know and understand them, you just have to, so you have to continue to monitor and find ways to monitor, and that really ingrained how important instrumentation is and being able to really understand the health of your application as it's running so that you can see, yes, everything is good, and then when something doesn't look right so that you can know where to start looking, and you can be alerted of a problem.Corey: So, I tend to view the world in olden terms where monitoring was what we did, and we use something like Nagios, which was the second-worst option out there because everything else felt like it was tied for first. I also take a somewhat regressive view that observability is to monitoring as DevOps is to being a systems administrator. It's the same thing, but by using the more modern terminology, you can charge more for it. I'm going to go out on a limb and guess that you take a somewhat contrarian [laugh] view to that.Michael: Yes, yes, I do. It's about really understanding how your applications is running. It's not just looking at, oh, how many HTTP 500s am I serving up per hour, if I hit a threshold for the last hour? It's a lot more than that. It's really being able to really dig in and see what the issue is or what's working really well.And to that end, we rely on two services for this. We use Honeycomb and Epsagon. Honeycomb, kind of, acts as our top layer because it gives us the really good high-cardinality metrics where I can punch in a user ID and I can see all the API traffic that this user has performed. As well as, even just like when we launched the Playthrough when our traffic rose, that the reason we discovered that our latency was dropping was due to a service-level objective being triggered in Honeycomb on latency. And we were able to respond to that using that before customers really noticed anything at all.Corey: As an Epsagon customer myself, I'm always conflicted when I find myself going into their service and using it to figure out what the heck's going on with my giant pile of Lambda functions, and API gateways, and whatnot, wired together because the experience is uniformly excellent, but I'm also frustrated in that it needs a third-party to even begin to allude to what's going on. It feels, on some level, like the vendor that is providing this service to me should be reasonably effective at telling me what it's doing, and when it's breaking. I understand that how I wish the world is and how it actually is are two radically different things but does that ever strike you as well?Michael: Whether or not AWS should be providing that type of level, that seems… that seems like more of a service that you can have competition and other vendors that really specialize and get in the weeds on it. I don't think AWS needs to provide every service you could possibly use for your application. That's not something I'm too concerned about. I don't really even think it's their place, frankly.Corey: No, no, I understand. The problem I keep running into, on some level, whenever I try and diagnose it natively is, I look at CloudWatch and it's difficult to understand that is this—in my case because again, I'm still early days with a lot of these things—is it the API gateway that's having the problem? Is it the CloudFront distribution that is tied to that? Is it the Lambda function? Where's the handoff?Trying to understand where in a complicated application the failure is occurring is a challenge. And let's be clear, most of that is a problem of my own making because I didn't have the good sense to instrument this thing in a reliable repeatable way when I built it. It feels like everything is tied together with duct tape, and baling wire, and spit, and a bit of luck. As a counterpoint, the more companies I talk to, the more I realize that no, no, this is actually how most people feel [laugh] when they look at things that are working. It's, yeah, it's terrible. It's a trash fire, but it makes money so we're going to roll with it.And there's always, on some level, a sense of what we've built is very far from the platonic ideal of what we should have built. Does that resonate with you, or do you take a step back and look at what you've achieved with a perspective of, “This is awesome. More people should do it exactly like this.” And honestly, if it's that one, I'd love to take a look at what you've built.Michael: I think there's always room for us to improve on what we're doing because we're constantly learning and evolving to improve both, even at such a low level of like, “Okay, how do we lay out the files in our service repository to make the best organization to make sense?” All the way up to, “Okay, how are we going to do tracing? And what kind of information do we need to get from that so that we can find problems when they occur?” We're always looking to learn what others are doing, and talking to others in this space. No one will ever be a hundred percent right. There's always room for improvement everywhere.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: One thing that you folks have done that I think was really interesting and didn't get as much play as I think it really deserved, was that, especially in the early days of the pandemic, you wound up seeing that massive increase due to giving out almost a million free three-month subscriptions to Playthrough. Additionally, you also worked closely with LAUSD, the Los Angeles Unified School District, to add Fender Play to their middle school music program's curriculum to help supplement their remote learning programs. First, was that all in the same timeframe? Or—and, two, what has it been like, I guess, working with a organization that is, I guess, on some level, not particularly cloud-first. I would imagine. When I lived in Los Angeles, I never got the sense that LAUSD was full-on serverless, full on-board with cloud, full on-board with remote learning. And then the pandemic of course exacerbates all of that.Michael: Yeah, so those were really two different projects. So, that the Playthrough project that started in March, and we started working with Los Angeles Unified School District last year during their summer school program; started out with 1500 students and we put it together very quickly. Essentially, we use the same three-month codes that we used for that Playthrough promotion so that we could set things up very quickly for students and gave out, through our nonprofit arm of Fender, the Fender Play Foundation, gave out 1500 instruments to these students to use during the summer school program. And that program became so successful, we continued on with them in the fall, and now in the current semester, and we will be again this summer. I believe there's 7000 students in the program now.And working with their IT team has actually been quite nice. And in dealing with partners, you wouldn't think much of, “Oh, it's a school district, what do they have?” But as far as just ease of working with them, we actually hooked into their SAML provider in Cognito so that LAUSD students could authenticate when they come in through the remote learning systems. And they were great to work with and very helpful and cooperative.Corey: One of the arguments that you'll see that comes up against serverless, from time to time, is that you are now indelibly linked to your provider, but you can't take what you've built with all of these services and just move it over to Azure or GCP on a moment's whim. Now, in practice, people who tend to build for that, just build everything on top of EC2 and very little else, and then run it entirely in AWS and never move it to any of those other places. But was there friction with making that, I guess, architectural commitment to a single vendor?Michael: Oh, you're bringing up the vendor lock-in Boogeyman.Corey: Oh, I absolutely am. Most people who bring that—when I bring it up as a straw man so you can attack it, most people who bring up the vendor lock-in Boogeyman, “Oh, you have to go multi-cloud,” are either trying to sell you something that is required if you want to go multi-cloud, or they're a cloud provider themselves who know that if you go all-in on one provider, it will certainly not be theirs.Michael: I think if you properly architect your applications with separations of concerns that you could move to, say—okay, say Lambda wasn't working out for us anymore, and we needed to take our applications and, where, we're going to put them into a container, but we're going to stay in AWS. Our applications are set up in such a way that Lambda is basically a deployment pattern. We could easily convert those individual function handlers into route handlers with a minimal effort because the business logic and then the underlying data storage are separated. So, it would be feasible for us if we wanted to, say, move to Azure and use Azure Functions and whatever comparable service they have to DynamoDB. I'm not too familiar with a lot of their offerings.But that would certainly be possible to do it with, obviously, some effort and really, at the end of the day, the resources you have working on the applications are end up going to costing you much more than any, sort of like, software licensing or specific savings you're going to get from a cloud vendor, so might as well go ahead and just use those service that they're providing. So that you can just focus on the business.Corey: My approach has almost universally been that looking at an awful lot of companies and their AWS bills, it is a challenge to find an environment where the resources in the environment cost more than the people who are operating them. In the context of business, AWS bills seemed giant and enormous, right up until you look at payroll and then it's, “Oh, okay.” That's counterintuitive for folks who are learning this, and I fall prey to it myself is, when I'm playing around as a hobbyist trying to build something I value, my time is free because I'm learning as this goes, and then in that context, especially when I was starting out as a student, it was, “Oh, great. So, this winds up costing me $7 a month. Oh, that's a lot of money. That's my ramen budget, so I'm instead going to wind up spending eight hours avoiding it charging me anything.” It's the exact opposite from the direction you want staff that you're paying to work on these things to go in. How do you approach the idea of increasing the cloud cost if it will save time for your team?Michael: It's a balance between, where do we need to build this ourselves? And then not only build it, you have to operate it and maintain it? Or what is the cost of getting this third-party service? And that's really what it comes down to in all of them. And do we actually want to spend time working on this piece of infrastructure that these other people are specializing in and do so well? I've got better things I can have people doing than that.Corey: Speaking of people, one thing that you talk about, as you self-describe, is that you wind up not writing a whole lot of code anymore, but you're something of a stickler for observability and enforcing consistency between services, so you'll periodically do things like submit a PR to tweak a log message to put your mind at ease, was one example that you gave. Given that you're a director, which is generally manager of managers style approaches, how do you avoid having those PRs come across to your team as either micromanagement or a condemnation of what they've built? Because I get it; when I see something that's easy and small to tweak, I want to go ahead and get it fixed immediately. I don't want to go back and forth and play those games; I just want it done. But I'm also always weighing that against, I don't want to have people think that I'm judging them somehow for something I'm very much not.Michael: That's a very good point. The larger technical decisions on how things are laid out, I generally just try to—I don't insert myself into. I let the team go ahead, and make those decisions, and leave that direction, and let them take the charge on that, and I take the approach of looking at it as more of a guiding, and mentoring and teaching to really hone and instill that discipline in really being able to understand what the applications are doing. And as our team is growing, I have less and less time to even do those things, but I can go through the systems and go, “Hey, how come we're not tracing this call to the reCAPTCHA servers? Let's add that in there.” And I'll just at this point now, I mainly just write Jira tickets to have someone else actually do the work.Corey: The more I do this, the more I realize that as complicated as the technology is, the people are in many ways, far more complicated. And let's be fair here, non-deterministic things that work super well on one person one month could work entirely differently a following month, or even with the same person, or between teams. It's a constant balancing act, on some level. And giving people a sense of psychological safety has always been the biggest challenge. The thing that surprised me about management, back when I was running ops teams was the more, I guess, responsibility you accrue as you rise from individual contributor into the management—or ‘rise' is sort of a wrong term; it's an orthogonal transition—is that you spend a lot more time on the people problems, and your ability to directly control or affect change diminishes because you have to do everything via influence. You get a lot more responsibility with a lot less direct power [laugh] over the outcome in some ways. Does that align with how you see it, or am I just—do I have very strange approaches on management? Which may be true, and why I got out of it as fast as I could.Michael: No, that is a good point because you are having to [unintelligible 00:27:05], like, influence, and guide, and more take a higher-level view, as opposed to really getting into the weeds of like, “Okay, what methods are we going to put on this interface? How are we going to, say, architect the internals of an application?” Those are details I just really don't have time for anymore. But larger things as to making sure that we're okay, it's like, “What's the performance of this?” And, “Overall, is something that can be adapted as the business needs change, and as we change? And as we learn, what can we do to modify it?” And more just things like guiding, and mentoring, and really taking a higher-level view of that.Corey: I'm going to selfishly ask about something that I struggle with myself. That goes a bit more into the technical area, but you talk about enforcing consistency across all of your different services. What does that mean? Similar coding style? Similar instrumentation?Because I look at the things I built and microservices that power my internal nonsense, and each one of those is very different than all the rest. So, whatever your version of consistency is, I know I'm not doing it. But how do you view it?Michael: So, there's really two types of consistency. The one I really refer to the most is in observability. So that, if you've got a thousand Lambda functions out there, and each one is logging things slightly differently, that's just a pain to deal with, and realistically, dealing with a thousand unicorns is a real pain. So, through that observability, at least in Lambda, we use an internally developed middleware to make sure that the logging is consistent, and it's easy enough to use. And then other consistency, like, just within projects of how we lay things out.That's something that's been consistently evolving. What's the folder structure in how we organize the code? And we've kind of been evolving that over the last three years. And within about the last six months, we've come up with a really good pattern and a template for the future. And it's not much different from what we started out with, but it's a little bit easier, really, to comprehend as a new engineer coming in. It makes more sense.Corey: I have to ask—and I understand if you don't want to give a particular endorsement in any direction—but do you go through Serverless Framework, SAM CLI, the CDK, using the console and then lying about it? What is the template that you wind up using for that uniformity? Because even internally, I use three or four of those different things and professional advice: don't do that.Michael: Let's see. So, in our development, QA, production environments, infrastructure is all managed with Terraform. Each engineer has their own personal AWS account so that they can work on things there—Corey: Oh, that makes billing granularity super easy.Michael: Oh, yes. You can tell who's got EC2 instances running up for too long. But for the most part, we'll use Serverless Framework in that regard to say—for the engineer can just deploy into your local environment. Although we are working on ways to reuse the Terraform infrastructure and deploy that. But we have our own build and deployment pipeline that we built using CircleCI, and all of our Lambda functions are in Go.And so having to compile, say, 20 binaries in a service, that gets kind of slow, one of our DevOps engineers actually came up with a way to use Lambda to build the Lambdas, so that we can build them all in a distributed parallel fashion during the build process.Corey: One thing that I do love about the whole serverless approach—and it is a neat part about Lambda—is no two people ever seem to do it quite the same way. You can tie things together in so many different and exciting ways, and it's fun. It's almost like a modern version of playing with Lego. And I know that if Jeff Barr is listening, he just perked up at that. But I love the concept that you can take so many different ways to achieve similar outcomes. And it almost gives a bigger sense of creativity in how you approach problems. Has that been your experience?Michael: Oh, definitely. It's not only the creativity; it's also the flexibility in how you solve it, and the ability to adapt and evolve as services evolve, or change, or there's new ones are added. And to the point of using AWS, kind of, saying, “Oh, using a Lambda function to do this.” Like, using Lambda functions for customizing behavior of Cognito with the Cognito triggers, is to me, I think, a perfect way to customize the service to do exactly what you need to do.Corey: I want to thank you so much for taking the time to speak with me today. It's always appreciated. If people want to hear more about what you have to say and how you view these things or even, possibly, decide to work with you, okay can they find you?Michael: I'm somewhat active on LinkedIn. LinkedIn is the best place to find me. Please go ahead and connect to me; tell me you heard me on the podcast here.And yes, we are hiring. We have, all within our technical organization, from client, to web, and mobile engineers, data engineers, DevOps, API, we're always hiring and if we don't have something right now that fits your experience, let me know that you're interested and I'll put you on the list so that when we do have an opening, we'll reach out right away.Corey: And we will, of course, include links to that in the [show notes 00:32:20]. Thank you so much for being so generous with your time. I appreciate it.Michael: Thanks for having me on, Corey. It was nice talking to you.Corey: Michael Garski, Director of Platform Engineering at Fender Musical Instruments. 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 a comment telling me that I'm almost certainly doing that chord incorrectly.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.

Dr. Michael Zimmer is a father, husband, Chief Data Officer and Head of AI/ML at Zurich Germany. He is the editor of various publications on data, analytics and data science and is a Fellow of TDWI Germany. Before joining Zurich, he worked in consulting for more than 13 years. In his main job, he deals with showing the potential of Data and Analytics (D&A), while spreading the joy for Data and AI and is building bridges between business and IT to create a common spirit of optimism. In addition to supposedly hot topics like AI, however, he is also responsible for defining data strategy, further developing data architecture and data governance. The combination of both areas is the foundation to walk the path with Zurich to become an Insight Driven Insurer. Sponsor Information Visit https://my.captivate.fm/dashboard/www.yourheights.com (www.yourheights.com) and use acuriouslife10 for a 10% discount. Transcript Hadley: [00:00:00] Dr. Michael Zimmer. Welcome to the show, dude. Michael: Thanks for being here.       Hadley: Cool, cool. Listen, I've really been looking forward to this, to this, this conversation, to, to finding out what's behind you. I've always kind of, you know, read your, your, your posts online and, and the papers that you've written. And I just find it. [00:00:22] Yeah. You know, that mix between, um, between deep thinking and humour and just you know, um, yeah, zest for life. And, uh, I see that in you. I w I kind of, I identify with that, you know, and, um, and yeah, I'm, I'm looking forward to finding out what's behind the man.  [00:00:41] Michael: [00:00:41] Yeah. I hope, uh, um, yeah, much, but we'll see. You ask the questions. [00:00:47] Um,  [00:00:48] Hadley: [00:00:48] okay, cool. Yeah. So, so number one, I, look, I always ask my guests right at the start is what does curiosity mean to you? [00:00:54] Michael: [00:00:54] So I think in the beginning, if I think of curiosity, um, I think about my youth and, um, I think it was an Australian TV show called curiosity show, um, where they showed all kind of research things. [00:01:09] So that comes to my mind. If I look to it, literally. Curiosity is for me. Um, so I want to have fun at work. I want to, um, develop new things, get new ideas. So for me, uh, it's important, um, to be curious, because it helps me to redefine myself, got to understand new things, um, and also to become a better me, um, personal business, but also from a family point of view. [00:01:40] So, um, it's important to learn and be curious.  [00:01:44] Hadley: [00:01:44] Yeah, no, I know, I know that, that, you know, you have a young lad and that, you know, uh, again from your posts. I see that you're very involved as an active dad and kind of play out your curiosity through your son as well. Well, how would you say um curious or what, what part do you think curiosity plays in, in the development of a child? [00:02:04] Michael: [00:02:04] So I think in the end, um, uh, growing up and, um, for a kid it's about stimulations that we have to give them. So we have to be there. We have to talk with them. We have to interact, but in the end they want to understand the world. They want to see the things and they want to be curious with their own eyes. [00:02:26] So I think for me, Um, curiosity is something that is driving the kids. Um, they don't know it, but they want to explore. They have to explore. And maybe it's also by evolution that they have to do it because, um, there is a German kids show where they are saying in the theme who isn't asking, um, stays um dumb. [00:02:49] And I think it's like that you have to ask, you have to be curious. And that's what kids are doing. And I think that's something that we can learn from them. And also there is no stupid question. Um, it's only stupid, not knowing and being afraid of asking something, um, because we all have to learn.  [00:03:08]...

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.

02:13 - Michael’s Superpower: Being Able to Creatively Digest and Reconstruct Categories * Integral Theory (https://en.wikipedia.org/wiki/Integral_theory_(Ken_Wilber)) * Creative Deconstruction – Michael Schwartz (https://ideas.repec.org/f/psc306.html) * Creating Truly Novel Categories – Recognizing Novelty as Novelty 09:39 - Recognizing Economic Value of Talents & Abilities * Invisible Labor * Ecosystem Services * Biodiversity; The Diversity Bonus by Scott Page (https://www.amazon.com/Diversity-Bonus-Knowledge-Compelling-Interests/dp/0691176884) 18:49 - The Edge of Chaos; Chaos Theory (https://en.wikipedia.org/wiki/Chaos_theory) * “Life exists at the edge of chaos.” 23:23 - Reproducibility Crisis and Context-Dependent Insight 28:49 - What constitutes a scientific experiment? * Missed Externalities * Scholarly articles for Michelle Girvan "reservoir computing" (https://scholar.google.com/scholar?q=Michelle+Girvan+reservoir+computing&hl=en&as_sdt=0&as_vis=1&oi=scholart) * Non-conformity 38:03 - The Return of Civil Society and Community Relationships; Scale Theory * Legitimation Crisis by Juergen Habermas (https://www.amazon.com/Legitimation-Crisis-Juergen-Habermas/dp/0807015210) * Scale: The Universal Laws of Life and Death in Organisms, Cities and Companies by Geoffrey West (https://www.amazon.com/Scale-Universal-Organisms-Cities-Companies-ebook/dp/B010P7Z8J0) 49:28 - Fractal Geometry More amazing resources from Michael to check out: Michael Garfield: Improvising Out of Algorithmic Isolation (https://blog.usejournal.com/improvising-out-of-algorithmic-isolation-7ef1a5b94697?gi=e731ad1488b2) Michael Garfield: We Will Fight Diseases of Our Networks By Realizing We Are Networks (https://michaelgarfield.medium.com/we-will-fight-diseases-of-our-networks-by-realizing-we-are-networks-7fa1e1c24444) Reflections: Jacob: Some of the best ideas, tv shows, music, etc. are the kinds of things that there’s not going to be an established container. Rein: “Act always so as to increase the number of choices.” ~ Heinz von Foerster Jessica: Externality. Recognize that there’s going to be surprises and find them. Michael: Adaptability is efficiency aggregated over a longer timescale. This episode was brought to you by @therubyrep (https://twitter.com/therubyrep) of DevReps, LLC (http://www.devreps.com/). To pledge your support and to join our awesome Slack community, visit patreon.com/greaterthancode (https://www.patreon.com/greaterthancode) To make a one-time donation so that we can continue to bring you more content and transcripts like this, please do so at paypal.me/devreps (https://www.paypal.me/devreps). You will also get an invitation to our Slack community this way as well. Transcript: JACOB: Hello and welcome to Episode 234 of Greater Than Code. My name is Jacob Stoebel and I’m joined with my co-panelist, Rein Henrichs. REIN: Thanks, Jacob and I’m here with my friend and co-panelist, Jessica Kerr. JESSICA: Thanks, Rein and today, I’m excited to introduce our guest, Michael Garfield. He’s an artist and philosopher and he helps people navigate our age of accelerating weirdness and cultivate the curiosity and play we need to thrive. He hosts and produces two podcasts, The Future Fossils Podcast & The Santa Fe Institute's Complexity Podcast. Yay, complexity! Michael acts as interlocutor for a worldwide community of artists, scientists, and philosophers—a practice that feeds his synthetic and transdisciplinary “mind-jazz” performances in the form of essay, avant-guitar music, and painting! You can find him on Bandcamp, it’s pretty cool. Refusing to be enslaved by a single perspective, creative medium, or intellectual community, Michael walks through the walls between academia and festival culture, theory and practice. Michael, welcome to Greater Than Code! MICHAEL: Thanks! I’m glad to be here and I hope that I provide a refreshingly different guest experience for listeners being not a coder in any kind of traditional sense. JESSICA: Yet you’re definitely involved in technology. MICHAEL: Yeah, and I think the epistemic framing of programming and algorithms is something that can be applied with no understanding of programming languages as they are currently widely understood. It’s just like design is coding, design of the built environment, so. JESSICA: And coding is a design. MICHAEL: Indeed. JESSICA: Okay, before we go anywhere else, I did not prepare you for this, but we have one question that we ask all of our guests. What is your superpower and how did you acquire it? MICHAEL: I would like believe that I have a superpower in being able to creatively digest and reconstruct categories so as to drive new associations between them for people and I feel like I developed that studying integral theory in grad school. I did some work under Sean Esbjörn-Hargens at John F. Kennedy University looking at the work of and work adjacent to Ken Wilber, who was trying to come up with a metatheoretical framework to integrate all different domains of human knowledge. All different types of inquiry into a single framework that doesn't attempt to reduce any one of them to any other and then in that process, I learned what one of my professors, Michael Schwartz, called creative deconstruction. So showing how art can be science and science can be art and that these aren't ontologically fixed categories that exist external to us. Looking at the relationship between science as a practice and spiritual inquiry as a practice and that kind of thing. So it's an irreverent attitude toward the categories that we've constructed that takes in a way a cynical and pragmatic approach to the way that we define things in our world. You know. REIN: Kant was wrong. [laughs] MICHAEL: It's good to get out of the rut. Obviously, you’ve got to be careful because all of these ideas have histories and so you have to decide whether it's worth trying to redefine something for people in order to open up new possibilities in the way that these ideas can be understood and manipulated. It's not, for example, an easy task to try and get people to change their idea about what religion is. [laughs] JESSICA: Yeah. More than redefined. It's almost like undefined. MICHAEL: Hm. Like Paul Tillich, for example. Theologian Paul Tillich said that religion is ultimate concern. So someone can have a religion of money, or a religion of sex, but if you get into these, if you try to interpose that in a debate on intelligent design versus evolutionary theory, you'll get attacked by both sides. JESSICA: [chuckles] That’s cosmology. MICHAEL: Yeah. So it's like – [overtalk] JESSICA: Which is hard to [inaudible] of money, or sex. MICHAEL: Yeah, but people do it anyhow. JESSICA: [laughs] Yeah. So deconstructing categories and seeing in-between things that fits through your walking through walls, what categories are you deconstructing and seeing between lately? MICHAEL: Well, I don't know, lately I've been paying more attention to the not so much tilting after the windmills of this metamorphic attitude towards categories, but looking at the way that when the opportunity comes to create a truly novel category, what are the forces in play that prevent that, that prevent recognizing novelty as novelty that I just – JESSICA: Do you have any examples? MICHAEL: Yeah, well, I just saw a really excellent talk by UC Berkeley Professor Doug Guilbeault, I think is how you say his name. I am happy to link his work to you all in the chat here so that you can share it. JESSICA: Yeah, we’ll link that in the show notes. MICHAEL: He studies category formation and he was explaining how most of the research that's been done on convergent categorization is done on established categories. But what happens when you discover something truly new? What his research shows is that basically the larger the population, the more likely it is that these categories will converge on something that's an existing category and he compared it to island versus mainland population biogeography. So there's a known dynamic in evolutionary science where genetic drift, which is just this random component of the change in allele frequencies in a population, the larger the population, the less likely it is that a genetic mutation that is otherwise neutral is going to actually percolate out into the population. On an island, you might get these otherwise neutral mutations that actually take root and saturate an entire community, but on the mainland, they get lost in the noise. You can look at this in terms of how easy it is for an innovative, artistic, or musical act to actually find any purchase. Like Spotify bought the data analysis company, The Echo Nest, back in 2015 and they ran this study on where emergent musical talent comes from. It comes from places like Australia, the UK, and Iceland, because the networks are small enough. This is a finding that's repeated endlessly through studies of how to create a viral meme that basically, or another way – JESSICA: You mean a small enough pool to take hold? MICHAEL: Yeah. That basically big science and large social networks online and these other attempts, anywhere we look at this economies of scale, growing a given system, what happens is—and we were talking about this a little before we got on the call—as a system scales, it becomes less innovative. There's less energy is allocated to – JESSICA: In America? MICHAEL: Yeah. Bureaucratic overhead, latencies in the network that prevent the large networks from adapting, with the same agility to novel challenges. There's a lot of different ways to think about this and talk about this, but it basically amounts to, if you want to, you can't do it from the conservative core of an organization. You can't do it from the board of directors. JESSICA: Oh. MICHAEL: You have to go out onto – like why did they call it fringe physics? It's like, it is because it's on the fringe and so there's a kind of – JESSICA: So this would be like if you have like one remarkably lowercase agile team inside your enterprise, one team is innovating and development practices. They're going to get mushed out. Whereas, if you have one team innovating like that in a small company, it might spread and it might become dominant. MICHAEL: Yeah. I think it's certainly the case that this speaks to something I've been wondering about it in a broader sense, which is how do we recognize the economic value of talents and abilities that are like, how do we recognize a singular individual for their incompressible knowledge and expertise when they don't go through established systems of accreditation like getting a PhD? Because the academic system is such that basically, if you have an innovative contribution, but you don't have the credentials that are required to participate in the community of peer review, then people can't even – your contribution is just invisible. The same is true for how long it took, if you look at economic models, it took so long for economic models to even begin to start addressing the invisible labor of women in at home like domestic labor, or what we're now calling ecosystem services. So there's this question of – I should add that I'm ambivalent about this question because I'm afraid that answering it in an effective way, how do we make all of these things economically visible would just accelerate the rate at which the capitalist machine is capable of co-opting and exploiting all of these. [chuckles] REIN: Yeah. You also have this Scott Seeing Like a State thing where in order to be able to even perceive that that stuff is going on, it has to become standardized and you can't dissect the bird to observe its song, right? MICHAEL: Totally. So obviously, it took almost no time at all for consumer culture to commodify the psychedelic experience and start using to co-opt this psychedelic aesthetic and start using it in advertising campaigns for Levi's Jeans and Campbell Soup and that kind of thing. So it’s this question of a moving frontier that as soon as you have the language to talk about it, it's not the ineffable anymore. REIN: Yeah. MICHAEL: There's a value to the ineffable and there's a value to – it's related to this question of the exploitation of indigenous peoples by large pharmaceutical companies like, their ethnobotanical knowledge. How do you make the potential value of biodiversity, something that can be manufactured into medicine at scale, without destroying the rainforest and the people who live in it? Everywhere I look, I see this question. So for me, lately, it's been less about how do we creatively deconstruct the categories we have so much as it is, what is the utility of not knowing how to categorize something at all and then how do we fix the skewed incentive structures in society so as to value that which we currently do not know how to value. JESSICA: Because you don’t have a category for it. MICHAEL: Right. Like right now, maybe one of the best examples, even though this is the worst example in another way, is that a large fraction of the human genome has been patented by Monsanto, even though it has no known current biomedical utility. This is what Lewis Hyde in his book, Common as Air, called “the third enclosure” of the common. So you have the enclosure of the land that everyone used to be able to hunt on and then you have the enclosure of intellectual property in terms of patents for known utilities, known applications, and then over the last few decades, you're starting to see large companies buy their way into and defend patents for the things that actually don't – it's speculative. They're just gambling on the idea that eventually we'll have some use for this and that it's worth lawyering up to defend that potential future use. But it's akin to recognizing that we need to fund translational work. We need to fund synthesis. We need to fund blue sky interdisciplinary research for which we don't have an expected return on investment here because there's – JESSICA: It's one of those things that it’s going to help; you're going to get tremendous benefits out of it, but you can't say which ones. MICHAEL: Right. It's a shift perhaps akin to the move that I'm seeing conservation biology make right now from “let's preserve this charismatic species” to “let's do everything we can to restore biodiversity” rather than that biodiversity itself is generative and should be valued in its own regard so diverse research teams, diverse workplace teams. We know that there is what University of Michigan Professor Scott Page calls the diversity bonus and you don't need to know and in fact, you cannot know what the bonus is upfront. JESSICA: Yeah. You can't draw the line of causality forward to the benefit because the point of diversity is that you get benefits you never thought of. MICHAEL: Exactly. Again, this gets into this question of as a science communications staffer in a position where I'm constantly in this weird dissonant enters zone between the elite researchers at the Santa Fe Institute where I work and the community of complex systems enthusiasts that have grown up around this organization. It's a complete mismatch in scale between this org that has basically insulated itself so as to preserve the island of innovation that is required for really groundbreaking research, but then also, they have this reputation that far outstrips their ability to actually respond to people that are one step further out on the fringe from them. So I find myself asking, historically SFI was founded by Los Alamos National Laboratory physicists mostly that were disenchanted with the idea that they were going to have to research science, that their science was limited to that which could be basically argued as a national defense initiative and they just wanted to think about the deepest mysteries of the cosmos. So what is to SFI as SFI as to Los Alamos? Even in really radical organizations, there's a point at which they've matured and there are questions that are beyond the horizon of that which a particular community is willing to indulge. I find, in general, I'm really fascinated by questions about the nonlinearity of time, or about weird ontology. I'm currently talking to about a dozen other academics and para-academics about how to try and – I'm working, or helping to organize a working group of people that can apply rigorous academic approaches to asking questions that are completely taboo inside of academia. Questions that challenge some of the most fundamental assumptions of maternity, such as there being a distinction between self and other, or the idea that there are things that are fundamentally inaccessible to quantitative research. These kinds of things like, how do we make space for that kind of inquiry when there's absolutely no way to argue it in terms of you should fund this? And that's not just for money, that's also for attention because the demands on the time and attention of academics are so intense that even if they have interest in this stuff, they don't have the freedom to pursue it in their careers. That's just one of many areas where I find that this kind of line of inquiry manifesting right now. REIN: Reminds me a lot of this model of the edge of chaos that came from Packard and Langton back in the late 70s. Came out of chaos theory, this idea that there's this liminal transitionary zone between stability and chaos and that this is the boiling zone where self-organization happens and innovation happens. But also, that this zone is itself not static; it gets pushed around by other forces. MICHAEL: Yeah, and that's where life is and that was Langton's point, that life exists at the edge of chaos that it's right there at the phase transition boundary between what is it that separates a stone from a raging bonfire, or there’s the Goldilocks Zone kind of question. Yeah, totally. REIN: And these places that were at the edge of chaos that were innovative can ossify, they can move into the zone of stability. It's not so much that they move it's that, I don't know, maybe it's both. Where the frontier is, is constantly in motion. MICHAEL: Yeah, and to that point again, I tend to think about these things in a topographical, or geographical sense, where the island is growing, we're sitting on a volcano, and there's lots you can do with that metaphor. Obviously, it doesn't make sense. You can't build your house inside the volcano, right? [laughs] But you want to be close enough to be able to watch and describe as new land erupts, but at a safe distance. Where is that sweet spot where you have rigor and you have support, but you're not trapped within a bureaucracy, or an ossified set of institutional conventions? JESSICA: Or if the island is going up, if the earth is moving the island up until the coastline keeps expanding outward, and you built your house right on the beach. As in you’ve got into React when it was the new hotness and you learned all about it and you became the expert and then you had this great house on the beach, and now you have a great house in the middle of town because the frontier, the hotness has moved on as our massive technology has increased and the island raises up. I mean, you can't both identify as being on the edge and identify with any single category of knowledge. MICHAEL: Yeah. It's tricky. I saw Nora Bateson talking about this on Twitter recently. She's someone who I love for her subversiveness. Her father, Gregory Bateson, was a major player in the articulation of cybernetics and she's awesome in that sense of, I don't know, the minister's daughter kind of a way of being extremely well-versed in complex systems thinking and yet also aware that there's a subtle reductionism that comes in that misses – JESSICA: Misses from? MICHAEL: Well, that comes at like we think about systems thinking as it's not reductionist because it's not trying to explain biology in terms of the interactions of atoms. It acknowledges that there's genuine emergence that happens at each of these levels and yet, to articulate that, one of the things that happens is everything has to be squashed into numbers and so it’s like this issue of how do you quantify something. JESSICA: It's not real, if you can't measure it in numbers. MICHAEL: Right and that belies this bias towards thinking that because you can't quantify something now means it can't be quantified. JESSICA: You can’t predict which way the flame is going to go in the fire. That doesn't mean the fire doesn't burn. [chuckles] MICHAEL: Right. So she's interesting because she talks about warm data as this terrain, or this experience where we don't know how to talk about it yet, but that's actually what makes it so juicy and meaningful and instructive and – JESSICA: As opposed to taking it out of context. Leave it in context, even though we don't know how to do some magical analysis on it there. MICHAEL: Right, and I think this starts to generate some meaningful insights into the problem of the reproducibility crisis. Just as an example, I think science is generally moving towards context dependent insight and away from – even at the Santa Fe Institute, nobody's looking for a single unifying theory of everything anymore. It's far more illuminating, useful, and rigorous to look at how different models are practical given different applications. I remember in college there's half a dozen major different ways to define a biological species and I was supposed to get up in front of a class and argue for one over the other five. I was like, “This is preposterous.” Concretely, pun kind of intended, Biosphere 2, which was this project that I know the folks here at Synergia Ranch in Santa Fe at the Institute of Ecotechnics, who were responsible for creating this unbelievable historic effort to miniaturize the entire biosphere inside of a building. They had a coral reef and a rainforest and a Savannah and a cloud desert, like the Atacama, and there was one other, I forget. But it was intended as a kind of open-ended ecological experiment that was supposed to iterate a 100 times, or 50 times over a 100 years. They didn't know what they were looking for; they just wanted to gather data and then continue these 2-year enclosures where a team of people were living inside this building and trying to reproduce the entire earth biosphere in miniature. So that first enclosure is remembered historically as a failure because they miscalculated the rate at which they would be producing carbon dioxide and they ended up having to open the building and let in fresh air and import resource. JESSICA: So they learned something? MICHAEL: Right, they learned something. But that project was funded by Ed Bass, who in 1994, I think called in hostile corporate takeover expert, Steve Bannon to force to go in there with a federal team and basically issue a restraining order on these people and forcibly evict them from the experiment that they had created. Because it was seen as an embarrassment, because they had been spun in this way in international media as being uncredentialed artists, rather than scientists who really should not have the keys to this thing. It was one of these instances where people regard this as a scientific failure and yet when you look at the way so much of science is being practiced now, be it in the domains of complex systems, or in machine learning, what they were doing was easily like 20 or 30 years ahead of its time. JESSICA: Well, no wonder they didn’t appreciate it. MICHAEL: [chuckles] Exactly. So it's like, they went in not knowing what they were going to get out of it, but there was this tragic mismatch between the logic of Ed Bass’ billionaire family about what it means to have a return on an investment and the logic of ecological engineering where you're just poking at a system to see what will happen and you don't even know where to set the controls yet. So anyway. JESSICA: And it got too big. You talked about the media, it got too widely disseminated and became embarrassed because it wasn't on an island. It wasn't in a place where the genetic drift can become normal. MICHAEL: Right. It was suddenly subject to the constraints imposed upon it in terms of the way that people were being taught science in public school in the 1980s that this is what the scientific method is. You start with a hypothesis and it's like what if your – JESSICA: Which are not standards that are relevant to that situation. MICHAEL: Exactly. And honestly, the same thing applies to other computational forms of science. It took a long time for the techniques pioneered at the Santa Fe Institute to be regarded as legitimate. I'm thinking of cellular automata, agent-based modeling, and computer simulation generally. Steven Wolfram did a huge service, in some sense, to the normalization of those things in publishing A New Kind of Science, that massive book in whatever it was, 2004, or something where he said, “Look, we can run algorithmic experiments,” and that's different from the science that you're familiar with, but it's also setting aside for a moment, the attribution failure that that book is and acknowledging who actually pioneered A New Kind of Science. [chuckles] JESSICA: At least it got some information out. MICHAEL: Right. At least it managed to shift the goalpost in terms of what the expectations are; what constitutes a scientific experiment in the first place. JESSICA: So it shifted categories. MICHAEL: Yeah. So I think about, for example, a research that was done on plant growth in a basement. I forget who it was that did this. I think I heard this from, it was either Doug Rushkoff, or Charles Eisenstein that was talking about this, where you got two completely different results and they couldn't figure out what was going on. And then they realized that it was at different moments in the lunar cycle and that it didn't matter if you put your plant experiment in a basement and lit everything with artificial bulbs and all this stuff. Rather than sunlight, rather than clean air, if you could control for everything, but that there's always a context outside of your context. So this notion that no matter how cleverly you try to frame your model, that when it comes time to actually experiment on these things in the real world, that there's always going to be some extra analogy you've missed and that this has real serious and grave implications in terms of our economic models, because there will always be someone that's falling through the cracks. How do we actually account for all of the stakeholders in conversations about the ecological cost of dropping a new factory over here, for example? It's only recently that people, anywhere in the modern world, are starting to think about granting ecosystems legal protections as entities befitting of personhood and this kind of thing. JESSICA: Haven’t we copyrighted those yet? MICHAEL: [laughs] So all of that, there's plenty of places to go from there, I'm sure. REIN: Well, this does remind me of one of the things that Stafford Beer tried was he said, “Ponds are viable systems, they’re ecologies, they're adaptive, they're self-sustaining. Instead of trying to model how a pond works, what if we just hook the inputs of the business process into the pond and then hook the adaptions made by the pond as the output back into the business process and use the pond as the controlling system without trying to understand what makes a pond good at adapting?” That is so outside of the box and it blows my mind that he was doing this, well, I guess it was the 60s, or whatever, but this goes well beyond black boxing, right? MICHAEL: Yeah. So there's kind of a related insight that I saw Michelle Girvan gave at Santa Fe Institute community lecture a few years ago on reservoir computing, which maybe most of your audience is familiar with, but just for the sake of it, this is joining a machine learning system to a source of analog chaos, basically. So putting a computer on a bucket of water and then just kicking the bucket, every once in a while, to generate waves so that you're feeding chaos into the output of the machine learning algorithm to prevent overfitting. Again, and again, and again, you see this value where this is apparently the evolutionary value of play and possibly also, of dreaming. There's a lot of good research on both of these areas right now that learning systems are all basically hill climbing algorithms that need to be periodically disrupted from climbing the wrong local optimum. So in reservoir computing, by adding a source of natural chaos to their weather prediction algorithms, they were able to double the horizon at which they were able to forecast meteorological events past the mathematic limit that had been proven and established for this. That is like, we live in a noisy world. JESSICA: Oh, yeah. Just because it’s provably impossible doesn't mean we can't do something that's effectively the same thing, that's close enough. MICHAEL: Right. Actually, in that example, I think that there's a strong argument for the value of that which we can't understand. [laughs] It's like it's actually important. So much has been written about the value of Slack, of dreaming, of taking a long walk, of daydreaming, letting your mind wander to scientific discovery. So this is where great innovations come from is like, “I'm going to sleep on it,” or “I'm going to go on vacation.” Just getting stuck on an idea, getting fixated on a problem, we actually tend to foreclose on the possibility of answering that problem entirely. Actually, there's a good reason to – I think this is why Silicon Valley has recognized the instrumental value of microdosing, incidentally. [laughs] That this is that you actually want to inject a little noise into your algorithm and knock yourself off the false peak that you've stranded yourself on. JESSICA: Because if you aim for predictability and consistency, if you insist on reasonableness, you'll miss everything interesting. MICHAEL: Or another good way to put it is what is it, reasonable women don't make history. [laughs] There is actually a place for the – JESSICA: You don’t change the system by maximally conforming. MICHAEL: Right. JESSICA: If there is a place for… MICHAEL: It’s just, there is a place for non-conformity and it's a thing where it's like, I really hope and I have some optimism that what we'll see, by the time my daughter is old enough to join the workforce, is that we'll see a move in this direction where non-conformity has been integrated somehow into our understanding of how to run a business that we actively seek out people that are capable of doing this. For the same reason that we saw over the 20th century, we saw a movement from one size fits all manufacturing to design your own Nike shoes. There's this much more bespoke approach. JESSICA: Oh, I love those. MICHAEL: Yeah. So it's like we know that if we can tailor our systems so that they can adapt across multiple different scales, that they're not exploiting economies of scale that ultimately slash the redundancy that allows an organization to adapt to risk. That if we can find a way to actually generate a kind of a fractal structure in the governance of organizations in the way that we have reflexes. The body already does this, you don't have to sit there and think about everything you do and if you did, you’d die right away. JESSICA: [laughs] Yeah. REIN: Yeah. MICHAEL: If you had to pass every single twitch all the way up the chain to your frontal cortex JESSICA: If we had to put breathe on the list. [laughs] MICHAEL: Right. If you had to sit there and approve every single heartbeat, you'd be so dead. [overtalk] JESSICA: Oh my gosh, yeah. That's an energy allocation and it all needs to go through you so that you can have control. REIN: I just wanted to mention, that reminded me of a thing that Klaus Krippendorff, who's a cybernetics guy, said that there is virtue in the act of delegating one's agency to trustworthy systems. We're talking, but I don't need to care about how the packets get from my machine to yours and I don't want to care about that, but there's a trade-off here where people find that when they surrender their agency, that this can be oppressive. So how do we find this trade-off? MICHAEL: So just to anchor it again in something that I find really helpful. Thinking about the way that convenience draws people into these compacts, with the market and with the state. You look over the last several hundred years, or thousand years in the West and you see more and more of what used to be taken for granted as the extent in terms of the functions that are performed by the extended family, or by the neighborhood, life in a city, by your church congregations, or whatever. All of that stuff has been out boarded to commercial interests and to federal level oversight, because it's just more efficient to do it that way at the timescales that matter, that are visible to those systems. Yet, what COVID has shown us is that we actually need neighborhoods that suddenly, it doesn't – my wife and I, it was easy to make the decision to move across country to a place where we didn't know anybody to take a good job. But then suddenly when you're just alone in your house all the time and you've got nobody to help you raise your kids, that seems extremely dumb. So there's that question of just as I feel like modern science is coming back around to acknowledging that a lot of what was captured in old wives’ tales and in traditional indigenous knowledge, ecological knowledge systems that were regarded by the enlightenment as just rumor, or… JESSICA: Superstition. MICHAEL: Superstition, that it turns out that these things actually had, that they had merit, they were evolved. JESSICA: There was [inaudible] enough. MICHAEL: Right. Again, it wasn't rendered in the language that allowed it to be the subject of quantitative research until very recently and then, suddenly it was and suddenly, we had to circle back around. Science is basically in this position where they have to sort of canonize Galileo, they're like, “Ah, crap. We burned all these witches, but it turns out they were right.” There's that piece of it. So I think relatedly, one of the things that we're seeing in economist samples and Wendy Carlin have written about this is the return of the civil society, the return of mutual aid networks, and of gift economies, and of the extended family, and of buildings that are built around in courtyards rather than this Jeffersonian everyone on their own plot of land approach. That we're starting to realize that we had completely emptied out the topsoil basically of all of these community relationships in order to standardize things for a mass big agricultural approach, that on the short scale actually does generate greater yield. It's easier to have conversations with people who agree with you than it is – in a way, it's inexpedient to try and cross the aisle and have a conversation with someone with whom you deeply and profoundly disagree. But the more polarized we become as a civilization, the more unstable we become as a civilization. So over this larger timescale, we actually have to find ways to incentivize talking to people with whom you disagree, or we're screwed. We're kicking legs out from under the table. REIN: At this point, I have to name drop Habermas because he had this idea that there were two fundamental cognitive interests that humans have to direct their attempts to acquire knowledge. One is a technical interest in achieving goals through prediction and control and the other is a practical interest in ensuring mutual understanding. His analysis was that advanced capitalist societies, the technical interest dominates at the expense of the practical interest and that knowledge produced by empirical, scientific, analytic sciences becomes the prototype of all knowledge. I think that's what you're talking about here that we've lost touch with this other form of knowledge. It's not seen as valuable and the scientific method, the analytical approaches have come to dominate. MICHAEL: Yeah, precisely. [laughs] Again, I think in general, we've become impoverished in our imagination because again, the expectations, there's a shifting baseline. So what people expect to pull out of the ocean now is a fish that you might catch off just a commercial, or a recreational fishing expedition. It's a quarter of the size of the same species of fish you might've caught 50, 70 years ago and when people pull up this thing and they're like, “Oh, look at –” and they feel proud of themselves. I feel like that's what's going on with us in terms of our we no longer even recognize, or didn't until very recently recognize that we had been unwittingly colluding in the erosion of some very essential levels of organization and human society and that we had basically sold our souls to market efficiency and efficient state level governance. Now it's a huge mess to try and understand. You look at Occupy Wall Street and stuff like that and it just seems like such an enormous pain in the ass to try and process things in that way. But it's because we're having to relearn how to govern neighborhoods and govern small communities and make business decisions at the scale of a bioregion rather than a nation. JESSICA: Yeah. It's a scale thing. I love the phrase topsoil of community relationships, because when you talk about the purposive knowledge that whatever you call it, Rein, that is goal seeking. It's like the one tall tree that is like, “I am the tallest tree,” and it keeps growing taller and taller and taller, and it doesn't see that it's falling over because there's no trees next to it to protect it from the wind. It's that weaving together between all the trees and the different knowledge and the different people, our soul is there. Our resilience is there. REIN: Michael, you keep talking about scale. Are you talking about scale theory? MICHAEL: Yeah. Scaling laws, like Geoffrey West's stuff, Luis Bettencourt is another researcher at the University of Chicago who does really excellent work in urban scaling. I just saw a talk from him this morning that was really quite interesting about there being a sweet spot where a city can exist between how thinly it's distributed infrastructurally over a given area versus how congested it is. Because population and infrastructure scale differently, they scale at different rates than you get – REIN: If I remember my West correctly, just because I suspect that not all of our listeners are familiar with scale theory, there's this idea that there are certain things that grow super linearly as things scale and certain things that grow sub linearly. So for example, the larger a city gets, you get a 15% more restaurants, but you also get 15% more flu, but you also get 15% less traffic. MICHAEL: Yeah. So anything that depends on infrastructures scales sub linearly. A city of 2 million people has 185% the number of gas stations, but anything that scales anything having to do with the number of interactions between people scales super linearly. You get 115% of the – rather you get, what is it, 230%? Something like that. Anyway, it's 150%, it's 85% up versus 115% up. So patents, but also crime and also, just the general pace of life scale at 115% per capita. So like, disease transmission. So you get into these weird cases—and this links back to what we were talking about earlier—where people move into the city, because it's per unit. In a given day, you have so much more choice, you have so much more opportunity than you would in your agrarian Chinese community and that's why Shenzhen is basically two generations old. 20 million people and none of them have grandparents living in Shenzhen because they're all attracted to this thing. But at scale, what that means is that everyone is converging on the same answer. Everyone's moving into Shenzhen and away from their farming community. So you end up – in a way, it's not that that world is any more innovative. It's just, again, easier to capture that innovation and therefore, measure it. But then back to what we were saying about convergent categories and biogeography, it's like if somebody comes up with a brilliant idea in the farm, you're not necessarily going to see it. But if somebody comes up with the same brilliant idea in the city, you might also not see it for different reasons. So anyway, I'm in kind of a ramble, but. JESSICA: The optimal scale for innovation is not the individual and it's not 22 million, it's in between. MICHAEL: Well, I feel like at the level of a city, you're no longer talking about individuals almost in a way. At that point, you're talking about firms. A city is like a rainforest in which the fauna are companies. Whereas, a neighborhood as an ecosystem in which the fauna, or individual people and so, to equate one with the other is a potential point of confusion. Maybe an easier way to think about this would be multicellular life. My brain is capable of making all kinds of innovations that any cell, or organ in my body could not make on its own. There's a difference there. [overtalk] JESSICA: [inaudible]. MICHAEL: Right. It's easier, however, for a cell to mutate if it doesn't live inside of me. Because if it does, it's the cancer – [overtalk] JESSICA: The immune system will come attack it. MICHAEL: Right. My body will come and regulate that. JESSICA: Like, “You’re different, you are right out.” MICHAEL: Yeah. So it's not about innovation as some sort of whole category, again, it's about different kinds of innovation that are made that are emergent at different levels of organization. It's just the question of what kinds of innovation are made possible when you have something like the large Hadron Collider versus when you've got five people in a room around a pizza. You want to find the appropriate scale for the entity, for the system that's the actual level of granularity at which you're trying to look at the stuff, so. REIN: Can I try to put a few things together here in potentially a new way and see if it's anything? So we talked about the edge of chaos earlier and we're talking about scale theory now, and in both, there's this idea of fractal geometry. This idea that a coastline gets larger, the smaller your ruler is. In scale theory, there's this idea of space filling that you have to fill the space with things like capillaries, or roads and so on. But in the human lung, for example, if you unfurled all of the surface area, you'd fill up like a football field, I think. So maybe there's this idea that there's complexity that's possible, that’s made possible by the fractal shape of this liminal region that the edge of chaos. MICHAEL: Yeah. It's certainly, I think as basically what it is in maximizing surface area, like you do within a lung, then you're maximizing exposure. So if the scientific community were operating on the insights that it has generated in a deliberate way, then you would try to find a way to actually incorporate the fringe physics community. There's got to be a way to use that as the reservoir of chaos, rather than trying to shut that chaos out of your hill climbing algorithm and then at that point, it's just like, where's the threshold? How much can you invite before it becomes a distraction from getting anything done? When it's too noisy to be coherent. Arguably, what the internet has done for humankind has thrown it in completely the opposite direction where we've optimized entirely for surface area instead of for coherence. So now we have like, no two people seem to be able to agree on reality anymore. That's not useful either. REIN: Maybe there's also a connectivity thing here where if I want to get from one side of the city to the other, there are 50 different routes. But if I want to get from one city to another, there's a highway that does it. MICHAEL: Yeah, totally. So it's just a matter of rather than thinking about what allows for the most efficient decisions, in some sense, at one given timescale, it's how can we design hierarchical information, aggregation structures so as to create a wise balance between the demands on efficiency that are held at and maintained at different scales. SFI researcher, Jessica Flack talks about this in her work on collective computation and primate hierarchies where it’s a weird, awkward thing, but basically, there is an evolutionary argument for police, that it turns out that having a police system is preventing violence. This is mathematically demonstrable, but you also have to make sure that there's enough agency at the individual level, in the system that the police aren't in charge of everything going on. It's not just complex, it's complicated. [laughs] We've thrown out a ton of stuff on this call. I don't know, maybe this is just whetting people's appetite for something a little bit more focused and concise. JESSICA: This episode is going to have some extensive show notes. MICHAEL: Yeah. [chuckles] JESSICA: It's definitely time to move into reflections. JACOB: You were talking, at the very beginning, about Spotify. Like how, when unknown ideas are able to find their tribe and germinate. I was reading about how Netflix does business and it's very common for them to make some new content and then see how it goes for 30 days and then just kill it. Because they say, “Well, this isn't taking off. We're not going to make more of it,” and a lot of people can get really upset with that. There's definitely been some really great things out on Netflix that I'm like, for one on the one hand, “Why are you canceling this? I really wanted more,” and it seems like there's a lot of the people that do, too. What that's making me think about as well for one thing, I think it seems like Netflix from my experience, is not actually marketing some of their best stuff. You would never know it’s there, just in the way of people to find more unknown things. But also, I'm thinking about how just generally speaking some of the best ideas, TV shows, music, whatever are the kinds of things that there's not going to be an established container, group of people, that you can say, “We want to find white men ages 25 to 35 and we're going to dump it on their home screen because if anyone's going to like it, it's them and if they do, then we keep it and if they don't move, we don't.” I feel like the best things are we don't actually know who those groups are going to be and it's going to have a weird constellation of people that I couldn't actually classify. So I was just thinking about how that's an interesting challenge. JESSICA: Sweet. Rein, you have a thing? REIN: Yeah. I have another thing. I was just reminded of von Foerster, who was one of the founders of Second-order cybernetics. He has an ethical imperative, which is act always so as to increase the number of choices. I think about this actually a lot in my day-to-day work about maximizing the option value that I carry with me as I'm doing my work, like deferring certain decisions and so on. But I think it also makes sense in our discussion as well. JESSICA: True. Mine is about externalities. We talked about how, whatever you do, whatever your business does, whatever your technology does, there's always going to be effects on the world on the context and the context of the context that you couldn't predict. That doesn't mean don't do anything. It doesn't mean look for those. Recognize that there's going to be surprises and try to find them. It reminds me of sometimes, I think in interviewing, we’re like, “There are cognitive biases so in order to be fair, we must not use human judgment!” [laughter] Which is not helpful. I mean, yes, there are cognitive biases so look for them and try to compensate. Don't try to use only something predictable, like an algorithm. That's not helpful. That's it. MICHAEL: Yeah. Just to speak to a little bit of what each of you have said, I think for me, one of the key takeaways here is that if you're optimizing for future opportunity, if you're trying to—and I think I saw MIT defined intelligence in this way, that AI could be measured in terms of its ability to – AGI rather could be measured in terms of its ability to increase the number of games steps available to it, or options available to it in the next step of an unfolding puzzle, or whatever. Superhuman AGI is going to break out of any kind of jail we try to put it in just because it's doing better at this. But the thing is that that's useless if we take it in terms of one spaciotemporal scale. Evolutionary dynamics have found a way to do this in a rainforest that optimizes biodiversity and the richness of feeding relationships in a food web without this short-sighted quarterly return maximizing type of approach. So the question is are you trying to create more opportunities for yourself right now? Are you trying to create more opportunities for your kids, or are you trying to transcend the rivalrous dynamics? You've set yourself up for intergenerational warfare if you pick only one of those. The tension between feed yourself versus feed your kids is resolved in a number of different ways in different species that have different – yeah. It is exactly, Rein in the chat you said, it reminds you of the trade-off between efficiency and adaptability and it's like, arguably, adaptability is efficiency aggregated when you're looking at it over a longer timescale, because you don't want to have to rebuild civilization from scratch. So [chuckles] I think it's just important to add the dimension of time and to consider that this is something that's going on at multiple different levels of organization at the same time and that's a hugely important to how we actually think about these topics. JESSICA: Thinking of scales of time, you’ve thought about these interesting topics for an hour, or so now and I hope you'll continue thinking about them over weeks and consult the show notes. Michael, how can people find out more about you? MICHAEL: I'm on Twitter and Instagram if people prefer diving in social media first, I don't recommend it. I would prefer you go to patreon.com/michaelgarfield and find future fossils podcasts there. I have a lot of other stuff I do, the music and the art and everything feeds into everything else. So because I'm a parent and because I don't want all of my income coming from my day job, I guess Patreon is where I suggest people go first. [laughs] Thank you. JESSICA: Thank you. And of course, to support the podcast, you can also go to patrion.com/greaterthancode. If you donate even a dollar, you can join our Slack channel and join the conversation. It'll be fun. Special Guest: Michael Garfield.

In this episode we do a deep dive with Matthew Whitaker from GK Houses on what makes Birmingham Alabama a unique investment market.    --- Transcript   Tom: Greetings and welcome to the remote real estate investor. And today we have a special episode where we'll be doing a market spotlight today. We're going to be focusing on Birmingham and we have a special guest today and Matthew Whitaker, and I'll be joined with my cohost Michael album. All right, let's do it.   Tom: Matthew, thank you for joining us today.   Matthew: Well, thanks for having me. I'm super excited about being on this new spotlight and excited about being able to present Birmingham to you.   Tom: So Matt, why don't you tell us a little bit about your, your background and GK housing as well?   Matthew: Yes. So I got into investing when I was 23 years old and bought my first house using a home equity line of credit off of a little house that my wife and I, or a girlfriend, fiancé at the time owned and started buying and selling houses and got really excited about it and quit my job, day job. I was doing it on nights and weekends and started flipping houses for a living thought. I was a big shot real estate investor at 23 and did that for about four or five years and pretty successfully we flipped about a hundred houses. I had some partners, I always joke that they had a lot of money and no time. And I had a lot of time and no money and we got married. So we formed a partnership. I was the operating partner that was out there buying and selling homes. We did about a hundred deals in four years. So for a 25 year old kid, that's out there wheeling and dealing. It was the good old days.   And I thought I had the tiger by the tail. And then as y'all know how the story ends in 2008, 2009 becomes the real estate market crash. And as Warren buffet says, when the tide goes out, you realize who was swimming, found any shorts on? And I looked down and I was one of the ones that didn't have any shorts on. So had I owned about 30 rental houses at the time or 30 homes that we were 15 of, which we were trying to flip 15 of, which were already rentals and we just moved everything into a rental portfolio. And so we started managing, we started out managing as a way to sell more homes though. We were kind of on the front end of turnkey world. And it was very new. The idea of selling homes or packages of homes to investors was very new at the time. And so we did that for three or four years and helped put together a big fund of local investors that bought up a bunch of Birmingham houses. But back in, let's see, 2013, we decided that we enjoyed managing more than the kind of deal of buying and selling.   We were more of a, we call ourselves grinders the more of the plotters. And so we enjoyed management. So we, I still invest on the side about, about 30 or 40 houses a year, still personally, with a partner. And, but my, my day job is I'm the CEO of a company called GK houses. And we started here in Birmingham and started, I always tell the story started with those 15 or 30 houses, depending on how you looked at it. And then started just growing that business. In 2013, we managed about 250 homes. And today we've moved out of Birmingham into eight different markets and manage about 26, 2,700 homes. But Birmingham is still my home. It's where our corporate offices it's where all of our back office accounting and all of our corporate team is. And so, um, Birmingham is the market. I know really well and, and still spend a lot of my time investing in   Tom: Yeah, Matthew and GK houses are great friends of rootstocks and a great partner that we love to advocate for. And we actually are double dipping our podcast. We are having a podcast dedicated specifically to property management that is going to be coming out very soon with Matthew as well. But today, where is the market focus? So great partner.   Matthew: I love anytime I get to get on and sing Birmingham's praises, it has come from having a bad reputation for some certain things that happened in the past, but I'll tell you where Birmingham is a great place. And one of the things that people consistently say when they come here is number one, how green it is. So when you watch a movie about the state of Alabama, it's all red clay. And there are areas of Alabama that are certainly like that. But where I live is very green and very hilly. And they're amazed at how progressive, not just politically I'm, I don't want to get into that, but in terms of how it's moving forward. And we're really known for our food scene, our arts and culture scene. So very excited to get on and get to talk about the city that I live and have no desire to move. I get to travel a lot, obviously with my role as the CEO here at the company, but I have no desire to move because Birmingham is such a great place to live.   Tom: Excellent. So the way that this episode is going to flow is we're going to start with some high level quantitative overview of the market. And then we're going to needle into math to talk about some of the specific qualitative of employer's points of interest and, and all that good stuff. So why don't we go ahead and start in our quantitative breakdown, and we're going to make this consistent for all the markets that we talk about first, the MSA. So the greater area of Birmingham, it has a population of 1.313 million, and this was based off of the last census data and map. What are the major cities that consists of the greater Birmingham area?   Matthew: Great question. So Birmingham proper the city Birmingham is about 350,000 people, I think. And then it is made up of a group of municipalities. So one of the things that an investor would need to understand about Birmingham is it's not a County based government, but it's a very city-based government. So it's very fractured in terms of each little, like I live in Homewood, which is just South of Birmingham. And we have our own city government that manages our own school system, manages our own trash. Whereas somebody like a Nashville or a Kansas city would have a County based government. So that 350,000 people is Metro Birmingham. And then we have a bunch of municipalities in the kind of suburbs, so to speak what we call South of town and over the mountain area, which is all South of town. And then that also includes the Tuscaloosa area, which is where the university of Alabama is, which is about 45 minutes from Birmingham Southwest.   And obviously that area has grown a lot with, uh, with the university of Alabama, as most university towns are starting to grow. So that's where they make up that 1.3 million. There's probably 1.1 ish, a one to 1.1 in what I would consider really proper Birmingham. We don't manage specifically down in Tuscaloosa than Bessemer, which is about halfway between Birmingham and Tuscaloosa is the, is one of the other big towns or cities. And then Hoover, which is due South of Birmingham is another. So generally when you talk about the MSA, you talk about the Hoover Birmingham Metro area. And so Hoover and Birmingham are really the two largest communities in that MSA.   Tom: Got it. I'm looking forward to needle again, a little bit on those specific, uh, as it relates to thinking about those areas as investors. So that area has seen pretty significant population growth. According to the information we have with census plus 2.8% over the last couple of years, it has a median household income of $57,500 as a medium household income. This is coming from the John Burns data, and there's a pretty significant amount of units. So when I say units, single family homes, there is 520,000 homes in this MSA where 26% of them are renters. And this is again, John Burns along with some census data. So continuing looking at some of these metrics that we have on Birmingham. So a major uptick in new permits to build single family residence. The last value in 2019 is 3,280, and that is up 17.2% year over year. A couple of other metrics to throw around the entry home value within Birmingham is about $134,800.   And this is coming from core logic. And the median rent, this is 1030 $2. Again, this is core logic where this is coming with a really steady rent growth. We'll actually have all the metrics, all the markets that I've seen as one of the highest that 6.5% increase in rent. The last couple of metrics I'll hit on before we get in to the quality of stuff that we'll talk with Matthew about is the rent tiers. So we see a rent tier, and this is again at John Burns metrics on the lower end of an $827, the mid $1032. That's that same median level and at the high tier $1,408. So those are the bands at which are identified in the Birmingham market. All right. So let's get back in talking about those specific main cities and other cities within the Birmingham market. So are the majority of the rental market, is it just an at Birmingham proper, or tell us a little bit about that. The distribution of rentals.   Matthew: Let's talk about Birmingham, because I think I need to kind of set the scene. So if you're listening at home and you wanted to bring up a map of Birmingham, what you will see is that Birmingham appears to flow from the North Eastern side of town down through the Southwestern side of town. And so one of the reasons for that is there is the start of the Appalachian mountains, just South of town and runs from the Southeast to the North are excuse me, from the Southwest to the Northeast, and then runs all the way up through South Carolina and in North Carolina. And, and so it starts here. And, and so if you think about when Birmingham was built, it was built in the early 19 hundreds, 1920s, and it was built because this was kind of the Pittsburgh of the South. It was a steel based industry.   So you had a lot of wealth here, and then you had a lot of workers to support that steel industry. There's a lot of mining happen up underneath the mountain. And so when you think about the housing stock, the housing stock started kind of from the Northeast and flows down through the Southwest. And that is the older housing stock that was built on flat land. So if you look at the map and you look at places like Bessemer, which I talked about going up, I 20 through midfield and Fairfield, and then the Western side of town is called West End. And then you get to the Eastern side of town, which is, and starting to head North towards the airport, Woodlawn, Terrant Roebuck. You're talking about, East Lake, you're talking about areas that were built a lot of times in the, uh, some of those areas started in the twenties and then were built through about the forties or fifties.   So when you think about investing in Birmingham, you need to kinda know what the age of the home is. And that's kind of the first thing I think is important is when houses are built and 19 hundreds, they were built with the idea, there was no air conditioning. And if you've never been to the South in the summer, it is really hot here. And we're, we're recording this during the summer. So I'm coming right out of the heat and it's a hundred and something degrees, heat index with almost a hundred percent humidity. And, and so that is really hot. So you can imagine the ceiling, sometimes in those homes were 12 feet tall so that the heat would rise. And so when you're investing, you want to make sure that either those ceilings have been lowered, because now you're going to be required to have air conditioning in them.   And if you buy this older housing stock, you just need to know that it's older housing stock. So your repairs and maintenance are going to be a little bit higher. And what you'll probably want to dig into some of those, but let me, I'll give kind of the 20,000 foot view. And then we can dig into some areas. As move Northeast. And as you move North, and as you move further West, you get into more homes that were built in the fifties and sixties. So there was another kind of housing boom, around that time, those are more of your brick ranchers, more of your wood, three bedroom, one and a half, one to one and a half, two bathroom homes. And these, I call these your tanks. I mean, they're built for modern amenities because we started to use an air conditioning back then, but they're very efficient.   They have closets, but they're not huge closets. They're just a very efficiently built house. So you might find a 1200 to 1400, 1500 square foot home in these areas. And they are great rental houses because again, their tanks, they just hold up really well. They're again, they're very modern people enjoy them. The one bedrooms obviously rent a little bit less than the two bedrooms. Anytime you get multiple, excuse me, not the one bathrooms, uh, rent less than the two bathrooms. Anytime you get multiple bathrooms. Very important. Now, one of the interesting things too, is what I would consider the more A-class housing stock is South of town. So imagine in the sixties and seventies.   Tom: Is that Hoover?   Matthew: Yes, you're talking about Hoover. You're talking about Vestavia, Homewood, mountain Brook, and these areas, these homes are hard to buy and make the rental numbers work, but these are all built up on the mountain. So when we say over the mountain, you had more, as technology came in along and building, you are building these homes on the side of mountains. And so the housing stock is much younger as you get more vertical in Birmingham. And now if you're listening to this in Denver, you might fly into here and wonder where the mountains are. There's all rolling Hills, but we call them mountains. And then as you get further North, just like any city, it grew out, right? You're going to get into areas like Fultondale and Gardendale North. You're going to get into areas like Trussville to the East. You're going to get into areas like Hoover and kind of the Indian Oak mountain Indian Springs area, where my wife grew up, where Oak mountain state park is. And then as you go West, you're going to get into Hueytown and pleasant Grove.   Now these are your B plus neighborhoods that are kind of out a little bit further great areas to buy for high appreciation, but there's suburbs there. People are going to be driving into the city to work. And so, you know, just like any town, you can pretty much dictate what the pricing is of the house based on when it was built and what the housing stock was built for.   Tom: I think one of my favorite adjectives for a rental property is a tank property. That just goes on. You didn't mention what cities you said it was in the West or the Southwest. Is that like pleasant Grove and Fairfield or…   Matthew: Yeah, Hueytown pleasant Grove. Our Fairfield's more of that first area that I was talking about that was built more of a C class neighborhood. But when you get into Hueytown and pleasant Grove, you're talking about B plus B plus properties with high possibility for appreciation, a lot of home ownership in those areas. So really if you talk to some of the local investors, those are some of the areas that they like to hit the hardest.   Michael: Got it. Matthew, I've got a question for you. What I want to know is why are people living in Birmingham and are moving there? You know, there's gotta be job, pull job growth. Can you talk to us a little bit about who some of the major employers are and why folks are headed that way?   Matthew: The biggest employer in Birmingham is university of Alabama at Birmingham, the hospital and the university. So when you combine that it is a teaching hospital, it's one of the, in the Southeast, it's probably one of the biggest teaching hospitals. So it has a huge draw. You can imagine from Mississippi, from all parts of Alabama. And so we have a bunch of doctors and students that are learning at UAB. And then of course the school university of Alabama at Birmingham, the next thing that's a huge employer is Alabama power, AlaGasCo, kind of the utility companies that service the state. And then another thing that's exciting is we have two, no, excuse me, three different car automobile manufacturers within about an hour and a half of Alabama. So to the Southwest, as you go towards Tuscaloosa, which we talked about earlier, there is an area down there called McCalla.   It is where I 459, which has kind of the bypass meets back up with I 20. And if you keep on going down, [inaudible] right there. That is where the Mercedes-Benz produces the M class Mercedes. So the SUV Mercedes, and so McCall is a great area to buy rental homes. You're talking about a lot of new builds going on. That is where a lot of, and they continue to add square footage onto that facility to build more M class Mercedes. And that obviously feeds jobs. People traveling from Tuscaloosa and people traveling from Birmingham. If you go East on I 20, you have the Honda Odyssey van is produced in Leeds. So great area. Trustful sees a lot of their executives that come in from Japan. One of my old partners used to rent to all Honda executives, and they would come in from Japan and live here for two or three years, and then go back to Japan.   So, and obviously the having building the Honda Odyssey van, there's a ton of you don't think of just Honda, but you also need to think of all the suppliers that have to support a big operation, like building that Honda Odyssey van, building that M-Class. And then if you go due South, you breach Montgomery and just South of Montgomery, and that's, this is only about 60 or 70 miles South. You find the Hyundai plant, and I'm not sure exactly what build there. I would imagine most of the Hyundai workers work in Montgomery, but you still have some of the suppliers that are supplying all three of those in and around the Birmingham area, just so they can be very centrally located. So we have a, so that's pretty exciting. I mean, Mercedes has been there probably 20 years, maybe a little bit longer, maybe 25 years building that M class Honda came about about eight, 17 or 18 years ago.   And then the Hyundai plant is newer, probably 10 to 12 years. There's just a lot of exciting things going on. Amazon is building a facility now in Bessemer. So there's a big kind of gold rush in the Bessemer area just because they know there's going to be, have to be a lot of people that are going to support that Amazon distribution facility. Birmingham has been doing a great job of investing in the city has built new hotels in and around the downtown area. And we're also building a brand new football stadium too, for the UAB blazers. And it's going to hold things like concerts. And so there's just a lot of money right now being invested in and around the Birmingham area. So really a lot of exciting things going on.   Tom: That's awesome. You know, we already touched a little bit on education, major colleges, but UAB, as well as university of Alabama,   Matthew: Yeah, University of Alabama is down in Tuscaloosa, which is about 45 minutes to an hour Southwest of Birmingham. You have, let's see, you have Sanford university in Birmingham. You have Birmingham, Southern college is also obviously located in Birmingham. Yeah, you Auburn is about an hour and a half to two hours, South East of Birmingham and a place called Auburn, Alabama, which is pretty obvious Auburn in Auburn, but it is almost a when you get to Georgia. And so there's a lot of kind of university life. You see a lot of university students in and around. And of course the medical school at UAB brings a lot of people in. We have rented a lot, especially when we have homes in and around the South. What we call the South side of Birmingham, which is basically South of the entrepreneurial district. We have a lot of med students, dental students that rent with us.   Tom: And is that in the general Southern part? You said Southern part of Birmingham.   Matthew: Yeah, It is. If you kind of zoom in on Birmingham and you look what I would call in between Homewood, if you look where Volkan is, which is a statue that was dedicated to the iron ore industry in and around their five points South, all of that is where a lot of the young people live that are going to those universities.   Tom: Very cool. How about let's touch on transportation? So in looking at it, it looks like it is almost like an X from 65, 22, 20, 59. So it looks like a major central hub of a freeways in the South that all go through Birmingham.   Matthew: It absolutely is a Nashville about two hours to the North. Atlanta's about two hours to the East Jackson. Mississippi is about two or two and a half hours to the West. And then Montgomery is about an hour to the South. So it's very centrally located. Half the people here are Atlanta Falcons fans. The other half are Tennessee Titans fans. And so it is a very centrally located city and very easy to get to. And then in transportation, within the community, most people drive everywhere here. It is not a, unless you just live downtown and work downtown, which is, it's not an overly big downtown area you're going to drive to work. So kind of the main corridor where a lot of the, where it gets clogged during the week would be that 280 as you go South and East is a very heavily traveled road. I 20, I 65 coming from the South and from the South West. And that kind of tells you where the people are, right. It tells you where the people are and what they're doing. And then I 65 South into Birmingham in the mornings is very busy. So Birmingham is kind of spread out just because it, as you moved across the mountain, it does flatten out a bit and it allowed for the city to kind of expand,   Tom: I'm smiling as I'm hearing this, I'm so excited about this series of market spotlight. I'm learning so much about Birmingham and I'm like, so excited dip my toe into the investing market, continuing down. Well, there's also an airport right in Birmingham.   Matthew : Yeah. We've got what we call an international airport. I'm not sure where that international flight flies. I think it flies at The Bahamas, which is good. I mean, everybody's got to go to The Bahamas, right. But what I tell people is we have major flights in from Denver, obviously, and from Atlanta into Detroit, into New York. So it really is a two flight place. We fly obviously Dallas and Houston direct, but unless you're going to one of those kind of major cities, you're really going to, it's going to be a two flight place, which is fine though. I mean, Birmingham so easy to get around. I always tell people, you know, Atlanta is one flight away from everywhere, but you took two hours to get to the airport. Birmingham takes me literally 10 minutes to get to the airport and then another five minutes to get to my gate. And then I can fly to Atlanta and in 45 minutes. So it really saves me. I get placed as faster than people do in Atlanta.   Michael: And Matthew, speaking of getting places, do you all have traffic and understand you're speaking to a couple of California, so we gotta be careful here.   Matthew: Look, I've been in Atlanta on the bypass, the two 85 bypass. And it is really bad. There's only a couple areas in Birmingham that are probably that bad or, or could even like sniff being that bad. That two 80 corridor is really tough in the morning. It may take you an hour to come 15 miles, 20 miles in, but a lot of people do it. Like it's amazing to me. We keep making it wider and wider and wider. And as you know, it also makes it worse before it gets better. And then by the time they finish it, it feels like it needs to be wider. And that's where I would say a lot of the housing growth is going right now is South and East down to 80. So you can see Chelsea down there in the bottom right hand corner of the map. If you're looking at it, Chelsea is a really growing thriving area.   Again, anywhere around McCalla is really growing. That's where they're building a lot of homes. I've got some great friends that are one of the largest builders in Birmingham, and they consistently build in those areas and build in Trussville, which is just East of town. So they're still building in the suburbs. There's not a lot of infill building going on right now. And they continue to sell homes. Even during this market, when we're recording, this is kind of coronavirus world, and they're still selling homes. They're still building them. They still have people that are interested in buying them. So we really feel like in Birmingham, we've got a little bit of a shortage in the housing.   Tom: Yeah. I mean, it's one of the highest SFR applications for building new houses way up there. And looking at the beginning of some of those metrics, let's touch on investor friendly related matters. So is there any concepts of rent control or, you know, legal concerns around unlawful detainers or three-day notices I'd love just kind of, you're taking, you're probably an expert at this as a property manager, as a CEO of a property management.   Matthew: Yeah. Unfortunately, sometimes, unfortunately, fortunately. Yeah. So Birmingham is a very conservative, well, Alabama let's say, cause because most landlord tenant laws are state specific. Alabama is a very conservative politically state. Birmingham is a very progressive city though. And so, but still most of the laws are driven, are state driven, landlord tenant laws. So evicting a tenant is easy technically to get done, but it does take a while to get done. And in Birmingham that's probably the biggest drawbacks to Birmingham is sometimes it takes as many as 60, sometimes as many as 90 days to get someone set out from the time you fall an unlawful detainer to the time you actually set them out. So that is a really long time, even in a place like California. I think that's a long time. The good thing about Birmingham though is again, it is a very landlord friendly laws. The landlord tenant law is very, is it really written landlord friendly. We have very low property taxes, relatively speaking. So as a percentage, it's way less than a lot of the other communities around the country. And look, there is no rent control. I don't ever expect that we might be one of the last places in Birmingham to have that. So it's again, pretty much landlord friendly, but you want to make sure you get a good resident in your home so that you don't have to evict them.   Tom: Makes sense. My other kind of question on, I guess this is sort of landlord friendly. I know some areas have a lot of HOA ways and some of these hos, you know, they have sneaky little rules and the bylaws about being an owner occupant. And is that common in Birmingham?   Matthew: It's not, we managed in places like Nashville and Atlanta where that's very common. So very familiar with that. Birmingham is not that way right now. It could come that way. As the housing stock that's being been built in the last 10 to 20 years, maybe it becomes more rental stock, but right now it is definitely not that way, especially in the areas where investors are buying.   Michael: So it sounds like Matt, from the descriptions that you've been giving, this is a very seller friendly market. It's really a sellers market at this stage of the game. Is that fair to say,   Matthew: Is it is an investor market. It is absolutely. You can definitely sell a house right now, but there's, I mean, it's just a really healthy, it's like very aggressive sellers and very aggressive buyers right now. But yes, if you're selling a home, you could even do a good job. You could make out really well selling homes right now, too.   Michael: Okay. Great.   Tom: Any other thoughts on points of interests? I saw there's the Birmingham barons, AAA baseball team.   Matthew: They are AA, but yes, they are in downtown. They used to be down in Hoover and we moved them. They built a new facility that won a lot of awards in the downtown area. So that is down there much like many of the other communities, some of the things that draw people or we've, we've got a number of local breweries that are kind of fun places to hang out that a lot of people are enjoying doing. We have the food scene's really good here. So last year we had a Frank sta won the James Beard award for the best chef in the country or the best restaurant, excuse me. So we've got an, and then he's got, I always call it the coaching tree, but he's got all these other chefs that he's trained now that have gone out and started their own restaurants.   Tom: Diaspora. What's the name of his restaurant?   Matthew: His restaurant is called Highlands Highlands bar and grill. Nice. And so it's kind of an upscale, kind of a New York style bar and grill.   Michael: Awesome. Man Tom, we gotta make it out there.   Tom: I know   Matthew: That's the one of my favorite places to go.   Tom: Awesome. Michael, do you have any other questions?   Michael: Yeah. Just curious, Matt. So for all of our listeners who were previously unfamiliar with the Birmingham market, hopefully now they're a bit more acquainted with it. What would be your final thoughts if some of those needs, what, what would you want someone's final takeaway to be from, you know, about the Birmingham market?   Matthew: It'd be a long ending, but I think it's kind of important is our average rent somewhere in the $900 range. So you're talking about when you look at Birmingham, I would think more about investing in forties, fifties, and so homes in the forties, fifties, and sixties. If you're looking at investing in C class properties, maybe 60 seventies or eighties, or even some of the two thousands, we have some homes that are in the two thousands. If you're looking for B class kind of high appreciation, lower cashflow, where you're going to find those C class properties are in areas like East Lake was a, which is three, five, 206, zip code Western, the free five, two one one, Inslee three, five, two Oh eight. Midfield is three, five, Oh man. I own a house in Midfield. And I can't think of it. I'll think of in a second, but you're talking about Roebuck, which is three, five, two one five, Center point 35215.   You're going to talking about Grayson Valley area. Now you're starting to get into more B class neighborhoods that would be Trussville, Calera, a Chelsea, Hueytown, Pleasant Grove. So, and you're talking about rents now that are more in the $900 to $1,200 range. That's what we would consider B class, which kind of lines up with the statistics you were giving earlier in terms of just kind of a price brackets. We manage about six or 700 homes right now. And it is a great time to be in the rental business because we're at about 98% occupancy. We're actually north of 98% occupancy, which we've never been before. What we are seeing as a shift from people wanting to live in multifamily, to live in single family homes. So that's pretty exciting for us, obviously because the pandemic and I just don't see that going away anytime soon.   Like people just don't forget about the pandemic after it's over. They're not going to forget about it immediately. So I do think there's a shift to single family rental and in the South, this things may change, but the pandemic doesn't feel as bad as I, my friends tell me, you're experiencing in California where people are experiencing in New York, we are renting homes like crazy here. I know that our cases are up in terms of virus, but it doesn't feel that different than normal life down here right now. So all that may change, but I will tell you things are really good right now. And it's not like people are gonna stop paying rent. Obviously if they lose their job, that may be a problem. But everybody seems to have adjusted to kind of coronavirus world down here pretty well. So that's what I would say is most of our investments are in the C class and B class neighborhoods.   And look, another area I would want to highlight is Northwest, which is Forestdale and Adamsville another great area. One of my favorite areas to invest. If I could buy everything up there, I, I definitely would. And so, but I also want to be a reference for any of your potential clients. So, you know, if they have any questions, we obviously have people, I always say you, you date your real estate agent, but you marry your property manager. And so I want you to know that before we get married with any one of your clients, we want to make sure that they're buying the right thing too. So we don't, we have a vested interest in it's a longterm relationship. We can't just put somebody in any home, regardless of what that home is. So I know that was a long ending, but I thought it was important just to kind of give some numbers and some feedback on what's going on at the grassroots level.   Michael: That was great.   Tom: I love it. That's one of my favorite pieces of advice to give is, you know, leverage your property manager early and often, even in the acquisition process. I mean, it's a teamwork and you know, the earlier you can kind of start to build that trust, uh, so much value to it.   Matthew: Well, our, all our incentives are right. I don't want you buying a bad house because I've got to manage it. Like you don't have to manage it. I know you've got to pay for it, but I'm the one that has to manage it. So I don't want you buying something that's going to cause me a lot of headaches in the future. Just like any business owner. Obviously we want to work really hard and earn our money, but we don't want to do extra work just because we put you in a bad property.   Tom: Awesome. This is fantastic. Thank you so much for your time. This was super interesting. The Pittsburgh of the South. I love it.   Matthew: We used to be called the magic city because we grew so fast. And so now it's starting to grow again and I'm super excited to be a part of Birmingham.   Michael: Matt, before we let you go, if folks have any questions about the Birmingham market, where can they reach out to you? And a little birdie told me also that you've got a podcast of your own.   Matthew: Yeah, no, I appreciate you mentioning it. We actually started a podcast that helps people just like you're, you're trying to help people with Birmingham's specific information. It's called the Birmingham rental investor and they can get that on Spotify or Apple or wherever somebody listens to their podcast. If they want to reach out to us specifically, we again would love to help somebody. We want to make sure that you're getting into the right house. And the best way to do that is to reach out to our support support@gkhouses.com. And what we have is essentially a support ticketing system that we'll get into our sales department and they can help you understand questions about our management services, but most importantly, make sure that you're getting into the right house so you can send them addresses. We'll give you rental reports of what we think that'll rent for. We just want to be a supplier of good information so that you can make the best decision possible. So thank you.   Tom: All right. Thank you, Matthew.   Michael: Thanks so much, Matt.   Matthew: Thank you.   Tom: Thanks again to Matthew, that was super informative. Learning about the Birmingham market. If you have any other questions, other markets for us to deep dive into, please reach out to us. You can hit me up at tom@roofstock.com and as always, this episode is brought to you by Roofstock Academy. It is your one stop shop to getting to the next level, from on-demand online educational lectures, coaching, the SFR playbook, all of that good stuff. So just check us out at roofstockacademy.com and happy investing.    

In countries like China, the camera on a smartphone isn't just for fun selfies -- it's an everyday practical device, for everything from banking to shopping. Michael Agustin wants to fast track this sort of adoption in the west by giving retailers AR IoT technology with Curie. Alan: Hey there, it's Alan Smithson with the XR for Business Podcast. And today we're speaking with Michael Agustin, co-founder and CEO of Curie. They're an augmented reality shopping platform that enables consumers to make better purchasing decisions quickly and visually. All that coming up on the XR for Business Podcast. Michael, welcome to the show, my friend. Michael: Thanks for having me on. Alan: I'm so excited. We had the opportunity to meet recently at., well, these two things, really. It was the VRARA gathering in San Francisco, and then we went from there to Verizon's head office and we went for a meetup where we learned from Apple and a bunch of other people about what's coming up in virtual reality. So it was really great to meet you in person. I want to unpack what you've been doing, but let's talk about what is Curie? We're Curie-ous. Michael: Yeah. So I see that you're AI-curious. So Curie is an AR shopping assistant that allows people to make decisions very quickly. This sort of ties in to the journey of any customer that is looking to make a purchase about any type of thing. So we're kind of giving people this on-screen HUD, to be able to make decisions on the fly about any different type of product, especially the ones that they would want to save money on. And it also enables retailers to sort of keep other apps from participating in show-rooming in their stores. So we're looking at big box stores by giving them the powers of augmented reality and enabling all of the same tools that shoppers would typically have online, offline. So things like online reviews and movies and people who bought this also buy these things. Alan: That's really interesting. I think it's it's something that's coming really quickly. And, you know, you guys have listed on your website that you're computer vision company. Walk me through the consumer experience of this. So I have my phone. I'm in a store. I point my phone at a pair of shoes. It recognizes the shoes and says, here's some Amazon reviews on it -- or some reviews from that store, I guess -- and then here's some other things that you might like that aren't necessarily in the physical store, correct? Michael: Yeah. So typically, you don't have these tools available to you offline. The reason why we say we're a computer vision company is that computer vision is like G.P.S. for your camera. So think about all the times you use G.P.S. and Waze and Yelp and Google Maps. We're doing that from a first-person perspective and providing the ability to sort of connect to things that are in front of you, via services and information. The reason why you would want to do this is that information is typically still not in front of you when you need it, but it's available online. So we were named after Marie Curie, who sort of dedicated her life to seeing what was invisible. And we would argue that right, now information is invisible, and you can't really see it when you need it on top of things. Alan: Amazing. So are there any companies actively deploying this now, or is this still in early phases, or where were you in the food chain of startups? Michael: So our lead investor is 500 Startups, and we are gaining customers through a program that's backed by Wal-Mart and Sam's Club and Tyson. We're talking to several OEMs and other types of retailers about incorporating our technology into their shopping apps. Alan: Inter

In countries like China, the camera on a smartphone isn't just for fun selfies -- it's an everyday practical device, for everything from banking to shopping. Michael Agustin wants to fast track this sort of adoption in the west by giving retailers AR IoT technology with Curie. Alan: Hey there, it's Alan Smithson with the XR for Business Podcast. And today we're speaking with Michael Agustin, co-founder and CEO of Curie. They're an augmented reality shopping platform that enables consumers to make better purchasing decisions quickly and visually. All that coming up on the XR for Business Podcast. Michael, welcome to the show, my friend. Michael: Thanks for having me on. Alan: I'm so excited. We had the opportunity to meet recently at., well, these two things, really. It was the VRARA gathering in San Francisco, and then we went from there to Verizon's head office and we went for a meetup where we learned from Apple and a bunch of other people about what's coming up in virtual reality. So it was really great to meet you in person. I want to unpack what you've been doing, but let's talk about what is Curie? We're Curie-ous. Michael: Yeah. So I see that you're AI-curious. So Curie is an AR shopping assistant that allows people to make decisions very quickly. This sort of ties in to the journey of any customer that is looking to make a purchase about any type of thing. So we're kind of giving people this on-screen HUD, to be able to make decisions on the fly about any different type of product, especially the ones that they would want to save money on. And it also enables retailers to sort of keep other apps from participating in show-rooming in their stores. So we're looking at big box stores by giving them the powers of augmented reality and enabling all of the same tools that shoppers would typically have online, offline. So things like online reviews and movies and people who bought this also buy these things. Alan: That's really interesting. I think it's it's something that's coming really quickly. And, you know, you guys have listed on your website that you're computer vision company. Walk me through the consumer experience of this. So I have my phone. I'm in a store. I point my phone at a pair of shoes. It recognizes the shoes and says, here's some Amazon reviews on it -- or some reviews from that store, I guess -- and then here's some other things that you might like that aren't necessarily in the physical store, correct? Michael: Yeah. So typically, you don't have these tools available to you offline. The reason why we say we're a computer vision company is that computer vision is like G.P.S. for your camera. So think about all the times you use G.P.S. and Waze and Yelp and Google Maps. We're doing that from a first-person perspective and providing the ability to sort of connect to things that are in front of you, via services and information. The reason why you would want to do this is that information is typically still not in front of you when you need it, but it's available online. So we were named after Marie Curie, who sort of dedicated her life to seeing what was invisible. And we would argue that right, now information is invisible, and you can't really see it when you need it on top of things. Alan: Amazing. So are there any companies actively deploying this now, or is this still in early phases, or where were you in the food chain of startups? Michael: So our lead investor is 500 Startups, and we are gaining customers through a program that's backed by Wal-Mart and Sam's Club and Tyson. We're talking to several OEMs and other types of retailers about incorporating our technology into their shopping apps. Alan: Inter

Zach has the honor of speaking with Great Place to Work CEO Michael C. Bush about GPTW itself and the process of creating a great place to work. Michael generously shares what he believes executives should be thinking about when it comes to building better trust within organizations and talks about where he sees Great Place to Work continuing to grow and expand to capture more marginalized voices and experiences.Connect with Michael on LinkedIn and Twitter.Check out Great Place to Work's website. You can review their most recent lists by clicking here.Follow GPTW on social media. They're on LinkedIn, Twitter, Instagram and Facebook.Interested in Michael's book? Find out more about it on Amazon.Find out how the CDC suggests you wash your hands by clicking here.Help food banks respond to COVID-19. Learn more at FeedingAmerica.org.Visit our website.TRANSCRIPTZach: What's up, y'all? It's Zach with Living Corporate, and man, you know what we do. We center and amplify underrepresented voices in the workplace by having authentic, available, and frankly incredible conversations with some incredible guests, and, you know, today is no different, right? Like, we've had who, we've had Robin DiAngelo on, we've had Ruchika Tulshyan, we've had--we've had professors, we've had executives, we've had activists--we've had DeRay Mckesson--we've had all types of folks on the podcast, on the platform, and today is just incredible because we have Michael C. Bush. Michael C. Bush is the CEO of Great Place to Work, the global research and analytics firm that produces the annual Fortune 100 Best Companies to Work For lists. So you know when y'all, you know, see companies and they have, like, the little badge and it'll say, "Oh, we're, like, #5 great place to work," this person we're speaking to is the CEO of Great Place to Work, y'all. This is a big deal. I'm not trying to overhype it. I don't think I can overhype it. I'm just trying to give proper context to who we have on the show. You know, the 100 Best Workplaces for Women list, the Best Workplaces for Diversity list, and dozens of other distinguished workplace rankings around the world. Since 2015, Michael Bush has expanded Great Place to Work’s global mission to build a better world by helping organizations create Great Places to Work not just for the some, but For All. Under his leadership, the firm has developed a higher standard of excellence that accounts for fair and equitable treatment of employees across demographic groups, as well as executive leader effectiveness, innovation, and financial sustainability. His book, A Great Place to Work For All, outlines the compelling business and social benefits that come from these efforts. Michael, first of all, how are you doing?Michael: I'm doing great. Thank you, and honored to be with you today.Zach: It's a pleasure. Now, I'm asking--you know, we're in the midst of a global pandemic, and I would be remiss if I didn't ask how are you doing with your family. Is everyone safe and well? Friends and family, loved ones?Michael: Thanks for asking. Yeah, the world has really changed in the past 45 days, but I'm doing well. I'm sheltering in place here in Oakland, California, with family nearby, so everything's good, and I hope the same for you.Zach: You know, everything is good. It's interesting. It's an interesting time. My wife and I just welcomed our first child into the world just a handful of weeks ago, and it's just an interesting time to be new parents, right, with so much chaos, you know, seemingly all around us, or uncertainty around us, but life is beautiful nonetheless.Michael: Well, congratulations to you and your wife, and yeah, you couldn't have brought, you know, a baby into the world at a crazier time, you know, but things are always a little bit crazy, and what a story you're gonna be able to share with your baby, you know, and we're just gonna do what we're always gonna do, which is make the world a lot better from here.Zach: I love it, absolutely. So let's get into it, right? We talked about it a little bit in the bio that I read. You've been the CEO of Great Place to Work for over 5 years, going on 5 years. Can we talk about your first 100 days as the CEO and, like, what did that look like, you just kind of stepping into that role. And then, you know, in these past five years--I guess Part B to the question is what have you been most proud of since taking the helm?Michael: Yeah. Well, when I stepped into the role in 2015, I got into the role in a strange way. I was actually hired by the founder of Great Place to Work to sell the company, and I had done a lot of turnaround work in the past, and so I came in and worked to do that, and to make a long story short I ended up getting an investment partner and buying the business. So that's how I got into it, and then one of the things that I knew is that I felt like having the analytics of what really was going on for working people all around the world and knowing that there are a lot of working people who never really get a fair shot at being developed, never get a fair shot at being promoted, never get a fair shot at being recognized and rewarded, that I could use--I hoped--the data and the analytics to use recognition to get organizations to change, and so that's really when we made the change, almost instantly, to Great Place to Work for All. I thought that we'd have a platform, and at that time, you know, you never know how things are gonna work out. The business was technically bankrupt, so the first 100 days were what you have to do when you're turning around a company that's bankrupt, which is you have to stop all the money flowing out of the company. So a lot of tough decisions, a lot of tough days where you're just pruning the rose bush so that you can grow, and those times are very difficult, but that's really what the first 100 days were about. Not too much about the future. A lot of pain in trying to cut costs, but we got through it.Zach: When you talk about, like, Great Place to Work for All, like, clearly that's a point of pride for you and, like, kind of continuing to shift and expand the platform or the position that you stepped into. Can we talk a little bit about what it was about that particular--like, why you took that angle, and, like, why was that your point of determined growth for Great Place to Work?Michael: Yeah. Zach, I think the thing that helped me was having a lot of business experience and having been a CEO before as well as working with CEOs. One of the things I knew is that most CEOs, while they talk articulately and clearly and passionately about diversity and inclusion, it's not something they think about that much, you know? They think about it during Black History Month, you know, or other things like that, but beyond that they really don't think about it that much, so it's kind of a head fake because you can hear these things that are very optimistic and passionate, but in fact they just don't think about them that much, and so--they're CEOs, which means they're thinking about other things like shareholder value, stakeholder value, but this one isn't one of 'em. They delegate it, and so they typically delegate it to a chief of diversity and inclusion or maybe a chief of people or a CHRO, but it's delegated, you know? It's not something that they lose a lot of time thinking about, and so I knew that and knew a lot of people, you know, doing diversity and inclusion work, and the common experience was "If you get to a CEO and you say, "Hey, I'd like to talk to you about diversity and inclusion," and they go, "Oh, talk to my chief of diversity and inclusion and I'll see you later." And so they're gone. So I was trying to find a way of keeping them in the conversation by not bringing up diversity and inclusion, and we did that. So when you talk about Great Place to Work for All, they don't leave the room because they're like, "Hey, I'm into that because, you know, that includes me," and also Great Place to Work for All has superior financial business performance. We've got all the data on that, so now they hang in the room, and now they're there and they're present, and now you have an opportunity to share data and information with them to get them into the conversation and hopefully leading the conversation. So it's really--for me it was a Trojan horse. It was how to get into the castle walls and not have somebody come out the castle walls, you know, that was delegated to talk about diversity and inclusion. I felt that the CEO needed to be in that conversation just like they're in the conversation when they're buying the company. They have a head of M&A, but they're in that conversation, so I thought that we could make that happen, and so far so good.Zach: Well, no, it's a great point, and something that you just said rung true with me. I think another example is, like, HSC, right? Like, you talk about health and safety environments, like, the CEO is going to be involved in that conversation by some degree because they recognize the business value and just, like, the imperative of safety for their workplace. Like, they may not be in every single part of the conversation, but they're going to be engaged. If there are other parts of the organization that executive leaders, that CEOs want to be plugged into, I think it's interesting. As much growth as diversity and inclusion has seen, I think that certain language and buzzwords kind of, like, trigger disengagement from the senior-most people. So I find that really interesting and powerful that you were able to figure out kind of, like, I don't want to say the cheat code, but, like, the way to kind of mitigate that a bit.Michael: Yeah, yeah. Cheat code. I hadn't thought about it like that, but that's kind of what it is, and whatever works, you know? Kind of by any means necessary, and so we found that this works, and it not only works in the U.S. When I first did for the for All and started moving it around the world, the first thing we got was resistance because, first of all you're coming from the U.S., and the racial issues are--in the U.S. they are on display for everyone to see and the rest of the world looks at it, but the rest of the world doesn't look at themselves, and so the very resistance was "Well, you're coming from the U.S. We don't have racial issues," which is crazy, because it doesn't matter which country you go to, there's racial issues. But they're not seen the same way. They don't--people don't really self-reflect in the same way. And then, you know, so I was bumping into that, and then what began to happen was people in Sweden started talking about, "Well, really, you know, women aren't treated family," and so for them for All meant that. And so wherever you were in the world - Japan, you know, women, and so there was always some group of people in every country that was treated differently in terms of opportunity and promotion and getting into the C-Suite for example than others. So then it just took off. Then it just took off and really, outside the U.S., it's been embraced more strongly than inside the U.S., 'cause in the U.S., you know, people do say, "Are you using a cheat code?" You know? They're kind of more suspicious, but around the world the thing has really just taken off, and, you know, the book is now in I think 11 different languages and so on just because of that, and CEOs now want to be linked a message that gets them a lot of brand value, and so Great Place to Work for All gets them a lot of brand value. If they talk too much about diversity and inclusion, you know, they actually get blowback from the dominant group in the workforce, and so this is a way that they can get out in front and be totally, totally inclusive without saying inclusive.Zach: It's interesting too that, like, you know, the amount of work that goes into that, right? How can we be inclusive while at the same time not oversignaling to the point where we actually lose the folks in the room who we need to be engaged to create, you know, systemic change and a sense of belonging for everybody? That really kind of leads me to my next question. You know, you're the first--yes, you're the first black male CEO of, like, a major organization or company that we've had on Living Corporate, right? So we've had, like, different senior leaders and executives and directors, but you're the first CEO that we've had. Can we talk a little bit about the role that your previous experience--'cause you talked about it before, about you were a CEO before this, you had industry experience before coming to Great Place to Work--and how your identity plays a role in some of the things that you do and the relationships that you have to make and maintain in your current position?Michael: Yeah. A lot of times people will ask, you know, "How do you get to a CEO?" And the answer is I started, you know, my own company in 1994, and so it really began by breaking out of corporate America. So it wasn't being within it, it was breaking outside of it. There are other journeys. I'm familiar with them. I have, you know, close friends who have done the corporate journey and been able to get to the CEO role. That's one path. It's a very different path than the one that I know the most about, which is the entrepreneurial path. And being an entrepreneur isn't for everybody, just like being a corporate CEO isn't for everybody. It takes two different personalities and two different skill sets really. But for me, on the entrepreneurial path, it was getting a feeling that I was never gonna really be comfortable in the corporate environment. I was never gonna be comfortable. I was always gonna be doing some shapeshifting in that environment, and so once I broke out, okay, then it was great, because I was able to break out and do the things that I needed to do to be successful, and the thing about, you know, so then how do you grow and how do you get to do more, what you gotta do is make rich people more money. So it's--the key is that, you know? It's you better be delivering that value. And so if you create value for people, you have friends for life, and so then you can start to be able to use that momentum. So all of the things that I've done, just like Great Place to Work, what I talk about is profitability. What I talk about is cash flow. So I talk to CEOs about the things that matter to them most. It's all about that. Now, this is the way you do it, but I always go through that door, and I've always gone through that door so people know it's about profitability, it's about EBITA, it's about cash flow, it's about growing market share, and this is the way you do it. You know, this is a way to do it, but it's a business helping another business do a lot more business. I have the data to prove if you make it a Great Place to Work for All you're gonna crush your competitors, you know? The companies that are on our list that are Great Places to Work for All outperform the S&P 500, the Russell 2000 and 3000 by a factor of 3:1, including today, you know, as the market drops. Our companies don't drop as much and they rebound quicker during recovery. So having the data and the analytics, always leading with those numbers, never going to the morally right thing to do but always being about the business enables the CEO to stay there so I can actually--the CEO doesn't leave the room because there aren't a lot of D&I people talking about EBITA, earnings and cash flow. They're talking about other things. So, you know, I'm not saying that there's anything wrong with that. I'm just saying--Zach: It's just the reality of the environment, right?Michael: It's just the reality of the environment, and if you're talking to a CEO about the things they care about, which are those financial metrics, you can begin to talk to them about a lot of things, because they know they're talking to somebody that everything I say is gonna be about enhancing those metrics.Zach: You know, that leads me--Michael, it's almost like you do this a lot, right? It's almost like you talk to folks and you do meetings, interviews, quite a bit, 'cause you're just--you're helping me out. Without getting too much into the secret sauce, like, we understand that Great Place to Work, like, y'all's list is not something that's, like, qualitative, but it's a variety of quantitative analytics, points of measurement. Can you talk a little bit about how the data analytics behind the Great Place to Work rankings has evolved over time and what influenced, if anything, the way that Great Place to Work determines if a company is indeed a Great Place to Work.Michael: Yeah. So we ask the same 60 questions of every company we do business with in 98 countries around the world, so that's one thing that makes us different. Other companies kind of tailor the question set. We're like, "No. We know people. We've got 30 years of data on people." People, you know, the norms might be different, the willingness of a worker to say what they think and what they want might be--they might be more willing and open to it in one country versus another due to social norms, but at the bottom people want the same thing, and so we measure those things. People want to be respected by the people that they work for, so we ask 11 questions that let us know whether you feel respected or not. People want to work for somebody who they feel is transparent with them, so we ask about 9 questions about that. And people want to be treated fairly more important than anything else, so we ask 14 questions about that. And then people want to enjoy the people that they work with and people want to be proud of their work, which means they feel cared for and they care for the people around them, that's what really drives high-performing work, people caring about one another. It's not stock options. Those things don't have the stamina of people. They have to feel like they're doing something they couldn't do on their own and be connected by some sense of purpose. So we measure those things. We ask these questions. We're an analytics company. It's all about the numbers, and we do this with 10 million employees and 10,000 companies every year, so across every single industry. There's not an industry that we don't survey in. So therefore we've got a huge data set to let people know when your people are feeling that in this part of the world things aren't fair, we tell you what that's gonna do to EBITA and profitability and earnings and revenue in that part of the world. We can go straight to the correlation between the employee experience and revenue and these financial metrics, and in some metrics we can go to some causation. We can actually tell you if people aren't feeling emotionally or psychologically or physically safe, those, what I just said, safety defined with those other three attributes drives earnings, you know? It drives earnings is how safe people feel, so we measure those things and therefore can let you know, "Hey, when we see this set of data, we know these people are updating their LinkedIn profiles. They may still be working for you, but they are looking for the next thing to do. So we call it presenteeism. They're present, but they are looking for a way out. So now the data can be used with artificial intelligence to predict what's gonna happen with people. You can see that a person pulls on their--the economy is going good and a person pulls on their 401K and then doesn't return in time not to pay a penalty on that. This person's undergoing some financial pressure, and the financial pressure they're going through affects through employee experience, so we can alert a company that "Hey, you've got a problem here because we can see in this data." So it's all about the data, it's all about the 60 questions, and we measure the employee experience, how they feel about the people they work with, whether they feel like management involves them in decisions that affect them, whether they trust management, whether they have confidence in management. So we ask a set of questions where we can let a leader know exactly what's going on and then compare that so we can--if you're a tech company and you get the data and you don't really know what to think, well, we have a benchmark against other tech companies, and then you go "Whoa, okay, these companies are actually outperforming me in these areas. I want to do something about it." So benchmarking is very important. You can see how Latin America is doing versus South America versus North America or men versus women or people of color versus majority or members of the LGBTQ community versus the majority. You can do all the demographic cuts. The biggest change we made in our methodology since I got involved were these demographic comparisons to see if it was a great place to work for all versus a great place to work for some. That's the revolutionary breakthrough that we've made, and so our lists today are different from the lists in the past because we reward companies that treat everyone the same, where employees are having the same experience and the same in an equitable way, which we're able to measure.Zach: You know, you talked a bit about--you mentioned, like, predictive analytics there, and I'm curious, how far away--and if we're already here, then let me know, but how far away are we from predicting, like, lawsuits or, like, legal action by employees who feel, like, psychologically, emotionally, physically unsafe, who feel, like, discriminated against and things of that nature and then, like, present that to organizations and say, "Hey, look, you have a serious problem, and here's the likelihood of X happening, and then here's the amount of damages that would cost to your brand over X amount of time." Do you think we're anywhere close to that? Do you think that's anything that would be relevant or pertinent for organizations to have?Michael: Well, for some companies they're able to do it right now, and you're talking about where we're heading, absolutely where we're heading. So if you've got an HR system of record on Oracle or a [?] or an SAP or Ultimate software, if you've got an HR system of record--which is a platform that has the payroll information on the employee, the use of benefits on the employee, something around the performance management of the employee, and you have an employee engagement tool that's doing the measuring, and those two are nested and the data can flow between them, you have what you need. And so there are other companies who have what they need and others are heading there now. This is the movement to be able to ask an employee a set of questions and predict what's going on with them and what you need to create a better experience for that employee, which is usually around development and opportunities and promotions and feedback. That's mainly what most people need. Sometimes tailored benefits around things that are going on in their life, like everybody's kind of living through right now. So this is happening at companies now. I'm very much aware of it. We're involved in it by nesting our tool on top of these other platforms, but I would say big companies, Fortune 500 companies, will be totally in this game in 5 years, you know, 100%, and then products will be developed for medium-sized companies and will be in the marketplace--you know, start to enter in about 3 years.Zach: I just find that so intriguing, right? Like, I think about the fact that there's already tools out there that are being mobilized within the next, like, half--within this decade, right? We're gonna start seeing--Micheal: Easily, yeah. At the end of the decade this will--we won't be talking about this.Zach: It won't even be a point of discussion. It's gonna be "Hey, look, no. Your data says this. There's an X percent chance of this happening, and we need to make some adjustments now."Michael: It's absolutely gonna happen, and so machines are already now--at Amazon machines are recommending people for promotion. Machines are recommending people for termination. Machines are doing that. So they're kind of on the cutting edge. Not saying that they're doing that in a great way, I'm just saying--Zach: The technology is out there and it's happening.Michael: It's out there. They're using machine learning tools to make those decisions. Others are going to move on that, and the key is how do you do those things in a way that employees can trust it? Which is a big difference between machine learning and artificial intelligence when there is no trust and a big difference between machine learning and artificial intelligence when there is trust, and if you think about the 60 questions we answer, what are we really, really measuring? It's trust. That's really what we're measuring. Now, we can define it in all its dimensions, but it's trust. Respect is a part of trust. Credibility, transparency is a part of trust. Fairness is a part of trust. So trust is really what we're measuring. We could just double-click all over it to get you additional information, but it's all about trust.Zach: You know, I think--and for me, I'm always curious about when it comes to these lists--and I say this as somebody, of course I love what y'all are doing. I love Great Place to Work. It's the definitive listing space, right? I think it's also interesting because as a black man who has a network of a ton of black and brown people, right, like, we'll look at some of these lists and like, "Dang, okay." I recognize that the overall maybe brand of a company may be really strong, and it's ranked or whatever, but then I wonder like, "Okay, how do I reconcile that with, like, stories that I'm hearing from marginalized people who have had, like, real challenges at these companies?" And I'm curious to know, like, where do you see Great Place to Work continuing to grow and expand to capture, like, marginalized voices and experiences?Michael: Yeah. So Zachary, that's where I was in 2015, exactly where you were, meaning looking at a company--at that time thinking about buying it, looking at the list of the places that were ranked as Great Places to Work, and I knew people of color having horrible experiences in those companies. That's why I bought it, because I'm like, "I think we can do something about this. We can reorder it." And if you look at, you know, 2014, 2013, the companies at the top of that list, they're not at the top now, okay? They're not at the top now, so that's really what happened, but I was exactly where you were and definitely driven to do that. So what it has enabled is, you know, I'm not satisfied by any means. I'm satisfied by the progress, but not by where we are. You know, the thing I talk about it, the bullseye all the time for me is 2030, that that's when we need to get this right, which means--you know, our analytics are driven by algorithms, and so you've got to continually modify the algorithms, and when you modify the algorithm, you've got to live with that algorithm and its output for a year, then you modify it and you've got to live with it for a year. So it's frustrating because it takes a long time, but, you know, we're at the place now where we can say to a company that "Hey, we've measured the experience of different demographic groups, people of color, and we can double-click on it and so on, and their experience is very different from these other groups, therefore you're falling down or off the list." We can do it on that basis now, which that wasn't happening in 2015. There was no way of doing it. We do it now. So we call it maximizing human potential. That's another cheat code, but what it is is we compare one demographic group to another. We reward companies where the gap is small and we penalize companies where the gap is huge. So you can no longer be "80% of our people are having a great time." We go into the people who have given a one or a two response on the Likert scale, you know, that are saying, "My manager involves me in the decisions that affect me? Never or almost never." Okay, well, we grab that group and compare it and put--we give weight to that, a group that it was never done. Another thing is--you know, in terms of there's other lists out there that are recognizing companies, none of them are surveying employees. So really those are marketing-driven exercises.Zach: Right. Those are smiley faces, right?Michael: They are. You know, they're just doing something very different, and so for us, we can let you know--like our diversity lists. You know, there's a few diversity lists, you know, kind of out in the world that are well-known. There's only one that measures and scores the experience of under-represented people. That's Great Place to Work. Our list is driven by their experience, so it doesn't matter, you know, frankly, what white males think about their work experience. We don't measure it for those lists. You know, we don't measure it for those lists. We look at underrepresented people. That's what drives that list. We look at their experience, because that's what it is. For the 100 Best we look at everybody, but we don't for that. So it took us a while, because if I had done that immediately I'd be out of business. So, you know, you've got to build some brand strength and get people to, you know, understand what you're doing and that you're a rational person who wants to grow their business. So it took some time, but we're almost there. I don't feel like we're there right now. We're almost there where we are just pulling in representation into our final ranking criterion. So I feel like we're just about there, and it's enabling us to have some great CEOs who loved being on our list, but now we're able to say, "Hey, guess what?" Even though, you know, we have some companies that, you know, 60, 70% of their workforce are people of color, and they're having a great experience, which is great, but then we look at the top team and we're like, "That doesn't look like them." But the good news is you can have that disconnect and a group of people having a great experience. So that's wonderful, but just think how much better they could be if they could look up and say, "Hey, if I keep working real hard, it's possible for me to get there." "I feel respected now, but I'd really feel respected if that's true." So we're able to talk to CEOs and say, "I know you're happy now." Nobody in hospitality is happy today, but [?] they were happy, 90 days ago they were happy, and you could say, "I know this is great, and I know you're providing a great experience for these people, all these people. That's incredible. We think, you know, the world of you, but you need to do something about this because you'll really unlock them," and the kind of CEOs we deal with, which are the ones who get how this drives their profitability and earnings--and most of these have some moral connection as well in the way that they want to be seen and the way that they want their families to see them. That's kind of another lens that affects a CEO's mindset. So then they go, "Okay, look, I got it," and they don't have to do it, but they choose to do it. So that's when I know, "Okay, this is working now," that this is enabling them to be who they want to be. And a lot of CEOs, I've done a lot of work on the following where you have a CEO moving through their career and just having a great career, a lot of power, a lot of influence, they're happy and satisfied, and then they have a daughter. It changes 'em forever, because then they're like, "I want my daughter to get paid equal pay," but at the company they're running, it's not happening. All of a sudden they start to look at equal pay differently because they had a daughter. I've seen this time and time again, a CEO with a daughter, a CEO with a kid with autism, a CEO with a kid with mental health issues. It modifies the behavior of that CEO and how they--which is great, but that shape-shifting move blows the door open for being a great place to work for all. Now it becomes their thing. They start saying it because they have this new desire to do something and to change the way that others view them and the way that they view themselves.Zach: So first of all this has been an incredible conversation, and, you know, we're coming up on time, Michael, but what I want to do is I want to go back to a word that you used earlier, trust, and really that a lot of these questions go back to--the rankings and the analytics go back to--quantifying trust, and I'm curious to know if you could give us, like, three points of thought that executives should be thinking about when it comes to building better trust within organizations? What would those three points be?Michael: I think that fairness is the most important. So the way you treat a group of people, whether they be analytics versus non-analytics, accountants versus engineers, you need to treat people the same. People read when you're not doing that. They are paying attention to whether you're doing that or not. So being consistent in the way you talk to people, respond to people, what you tweet and what you don't, it matters. So fairness is what's most important, and then making sure your actions--if you say that, you know, diversity drives innovation, people are gonna look and see if you really think that's true. So if you're saying diversity drives innovation and your executive team is not diverse, then now you lose credibility and you're not being transparent and people think it's not fair. The whole pyramid collapses based on you saying one thing and you're actually doing another, and then you want to take a look at your board of directors. You want to take a look at your executive team. You want to take a look at your pipeline and make sure that in 2023 things are going to be different. You want to make sure companies now are restructuring or laying people off. Well, look at the pool that you're laying off. Look at the pool you're restructuring. If you're not careful you're gonna erase ten years of gains is what you're doing right now. So these are the things that build trust. These are the things, fairness more important than anything else. The reason there's resistance to D&I efforts is somehow white men--some--feel like money's being taken out of their pockets.Zach: Right, this scarcity mindset, right?Michael: Yeah, the zero sum game, so you have to--if you have an ERG for African-American professionals, Asian-American professionals, you need to have one that a white male says, "I identify with this one. I identify with this one." They gotta have one too. You can't ignore anyone. It has to be for all.Zach: Michael, this has been great. I just gotta thank you again. Before we go, I'll give you a chance - any shout-outs or parting words, man?Michael: I think that entrepreneurism is a journey that's not for everybody. If you're thinking about it explore it, you know? Talk to some entrepreneurs and see what it's like, but do an honest check with you as to whether or not it's good for you. And then if you're in the corporate environment, lead with the data. You know, the data is what you're gonna need. And know that even if you have all the data, if there are people who aren't interested in diversity and inclusion, you know, the data's not gonna get it done. So, you know, get the data, use the data, make your case with the data, and if you find things are still slow, that's because the leader you're talking to just doesn't want to make a difference. You know, they don't want to change, and so then I'd update my LinkedIn profile and try to find some place where people are using data in the way that they use it for every other decision, whether it be M&A or anything else. You don't want anything different in the D&I area. You just want the consistent behavior, but don't bang your head too long or you're gonna find yourself with a headache.Zach: Michael, thank you so much, man. Look, we're gonna talk to you soon. We consider you a friend of the show. Honored, pleasure to have you. All right, y'all, so that does it for us. This has been Zach with Living Corporate. You know what we do. We're having these authentic conversations even during the rona. I pray that everyone is staying safe out there. You know where to check us out. You can just Google us. We're all over the place, okay? Living Corporate. You type that in and we're gonna pop up on something. You make sure you check us out on our website, living-corporate--please say the dash--dot com, or livingcorporate.co, livingcorporate.org, livingcorporate.net, livingcorporate.tv, livingcorporate.us, okay? Livingcorporate dot... shoot, all the livingcorporates except for livingcorporate.com. We've already talked about this. So if you type in livingcorporate.com it's gonna take you to some Australian website. [?] Australia, but we don't have that domain, okay? So livingcorporate.co, .us, .tv, or living-corporate.com. 'Til next time, y'all. This has been Zach. You've been listening to Michael C. Bush, CEO of Great Place to Work. Catch y'all next time. Peace.

Teaching a language is a lot easier when you share a room with your pupil, and have the benefit of human interaction and body language to bolster the lesson. With VR, today's guest Michael McDonald is able to do that for students in Norway, all the way from his HQ in Italy. Julie: All right. Welcome, everybody, to the XR for Learning podcast. Today, I have Michael McDonald on the show. Originally from London, Michael now lives in Italy and graduated with a degree in German and business management after two years working in the U.K. public sector in HR and recruitment. He left his job in London to get back to what he loved to do most, and that was all about languages and education. So I would love to introduce Michael to the show, and I would love to have you tell us more about Gold Lotus, what you're working on in the classroom using XR technologies, and talk about all the things that are going so well for you, educating these kids through virtual reality. Michael, welcome to the show. Michael: Thanks for having me, Julie. And hello to any of the listeners out there that will listen to this later on. So really nice to be here. Thanks for giving me the opportunity to share a little bit about what I've been up to. But it's not all about me. It's about certainly the students and the teachers that I'm working with, and also the wider community and there's a whole lot of stuff we can talk about on today's episode regarding those. So yeah. In terms of your first point about Gold Lotus. Yes, it's a kind of consultancy I set up here in Italy a few years ago after a good few years of exploring everything from Google Cardboard to 15-pound Amazon headsets -- sorry, headsets from Amazon like virtual reality -- and up to the latest Oculus Go, Oculus Quest and everything else in between. So I set up the consultancy, Gold Lotus, which basically reflects this kind of idea that, you know, anybody -- and I'm going to get deep here, I'm sorry about that -- but anybody can grow from those muddy waters.You might be a student or teacher kind of in the doldrums, maybe thinking, "well, what can I do to maybe accelerate my learning, or improve the way that I learn languages," because that's kind of my field. And it's just kind of a way for people to be pushed by me, hopefully in the right direction, and shown alternative ways of using this new technology within a learning context. So that's a bit of the background. Julie: Yeah. And that's fantastic. I've been showing up to some of the YouTube classes that you've shown on LinkedIn, and they just fascinate me because I think you've taken teaching to a whole different level. I've had several conversations with people about your lessons, just in different contexts. And it comes back to really testing who the teacher is, now, and the personality, the intonation in your voice, because these students can't see you. And I think you have risen to the top, in my mind, of having that voice that is going to engage the kids and have them respond back. And I think that's one of the best things that you've seen as obviously teaching these languages, that you're encouraging these students to speak more and more and learn the English language. So maybe you can talk to the response of the students with some of the lessons that you've been doing. Michael: Thanks for the compliments, but I really can't take credit for those lessons. In a sense, yes, I provide the platform for them, just as you are doing now with your podcast. The vibe of the experience or the interaction, it does depends on the person with whom you're talking, or the people. And so I guess that from my perspective, I'm just grateful that the tools are out there now for me to meet these people. When I talk about people, I'm talking -- at the moment -- so the students in Norway with the school

In today’s podcast, Rhonda and David are honored to interview Dr. Michael Greenwald, a courageous clinical psychologist who helped make the Atlanta Intensive a truly amazing event. Michael volunteered for the live demonstration to work on his lifelong problem with social anxiety, which seems to be a popular topic these days, and likely a personal problem for many podcast fans. My co-therapist was Thai-An Truong, a highly respected TEAM therapist and TEAM therapy trainer from Oklahoma City. Thai-An also joins today’s podcast via Zoom and dialogues with Michael for the first time since the intensive. The session with Michael was powerful and inspiring, with a good 50% of the audience in tears (of joy) at the end. Michael recorded the session on his cell phone, but the quality was not up to the quality of our podcast recordings, so he agreed to fly up to the “Murietta Studios” from his home in Los Angeles so we could at least describe what happened and share the magic with you. If we can find a way to do some sound enhancement on the cellphone recording of the session, we will likely publish it as a separate mid-week podcast for those who like to hear the incredible therapeutic process unfolding in real time. If you review Michael’s Daily Mood Log at the start of the session, you’ll see that he was feeling depressed, anxious, ashamed, worthless, lonely, self-conscious, discouraged and stuck, and all of these feelings were intense. In addition, he told us that he wasn’t feeling much joy, self-esteem, pleasure or satisfaction in his life. But the strongest feeling was anxiety. He said that coming up on stage to face his fears was an enormous challenge, and that this was the first time he’d ever done something like this. We will do T = Testing again at the end to see what changed, and by how much. We’ll also ask Michael to complete the Empathy and Helpfulness surveys, so we can find out how he experienced Thai-An and David during the session. You may be saddened by the upsetting event Michael recorded at the top of his Daily Mood Log, which was “sitting with my son and trying to make conversation with him.” He said their conversations were always pretty superficial, and that he would typically leave the room after short interactions with his son because he felt so anxious. Here’s an example of a typical exchange. Michael’s son, a graduate student in clinical psychology, was working on his applications to internship programs. Michael: What’s up? Son: I’m working on my applications to internship programs. Michael: That’s good. How’s it going? Are you getting them in on time? Son: Yah, it’s fine. Michael: Are you completing them? Do you want me to look at them? Son: All fine. If you review the negative thoughts on Michael’s Daily Mood Log, you’ll see that he felt like a failure as a father because he did not know how to get close to his son or how to tell him just how much he loved him. He was telling himself things like this: Something is wrong with me because I can’t talk to him. 100% I am failing him as a father. 100% He deserves so much better than me. 100% He must wish he had a different father. 95% And more. I was sad to see that Michael had been beating up on himself pretty badly for years, and I'm pretty sure that the therapists in the audience felt the same way, because it was so clear that he was a tremendously humble, giving and loving father who was totally devoted to his sons. I found myself thinking, "My gosh, I wish I'd been half the father that Michael is!" The E = Empathy phase of the session lasted about 30 minutes. Michael indicated that Thai-An and I had done a good job, and that he felt understood and accepted, so we went on to A = Assessment of Resistance in a step-by-step manner, using these tools: The “Invitation Step” to find out if he was ready to roll up his sleeves and get to work on his social anxiety The “Miracle Cure” question to find out what he hoped would happen in the session The “Magic Button,” to see if he’d want all of his negative thoughts and feelings to disappear suddenly, just by pushing it “Positive Reframing,” asking Michael these two questions about each negative thought or feeling: “What does this negative thought or feeling show about you and your core values that’s positive and awesome?” “What are some benefits, or advantages, of this negative thought or feeling?” At first, these questions didn’t make any sense to Michael, since he was so used to thinking about his negative thoughts and feelings in a negative light, thinking they were “bad” and were the result of some kind of personality defect or mental disorder, like “social anxiety disorder” described in the DSM5. This is also the hardest part of TEAM-CBT for therapists to learn, because it is so anti-intuitive. But as the list of positives grew, Michael began to “get it,” and we could actually see his mood lightening up before our very eyes. It was so cool, and this was the first hint the audience had that something remarkable was afoot. This, for sure, is one of the most powerful and innovative components of TEAM-CBT. The “Pivot Question” and “Magic Dial” Question. Michael decided it wouldn’t be such a great idea to press the Magic Button, since then all of the positives on the Positive Reframing list would go down the drain along with his negative thoughts and feelings. He decided, instead, to dial down his negative feelings to much lower levels that would allow him to feel better without losing any of the positives. You can see this on the “% Goal” column of his DML For example, he decided that it would be desirable to dial his depression down from 85% to 20%, since some sadness was appropriate, given his difficulties getting close to his son. In fact, if his depression disappeared completely, it would be like saying he didn’t really care. Michael decided to dial down the rest of his negative feelings as well in the range of 5% (for discouraged and stuck) to 15% (for anxiety), and 10% for the rest of his negative feelings. This ended the A = Assessment of Resistance phase of the session, and that took about 25 minutes. We then went on to M = Methods, focusing on his negative thoughts, one at a time, and attacking them with a variety of techniques like Identify the Distortions, Externalization of Voices, Acceptance / Self-Defense Paradigms, Examine the Evidence, and the Paradoxical Double Standard Technique. At the end, we went into the audience so Michael could ask participants if they were judging him, and what they thought about him as a father. This is called the Survey Technique, and it is usually pretty threatening to people with social anxiety, or any of us, really! But as you’ll hear in the podcast, the feedback he received was jaw-dropping. Thai-An joined us at the end and dialogued with Michael about the loneliness he’d struggled with, as well as how he could most effectively share his feelings of love and insecurity with his son. His “homework” after the session was to call his son and report back to all of us the next morning! The next morning, Michael reported that he’d had the most phenomenal dialogue ever with his son! He was practically floating on air, and reports that after the intensive, his life has changed dramatically in many ways, including: A terrific relationship with his son. Feelings of true joy, even ecstasy, that he’d never previously experienced or even thought possible. Way better connections with people in general, due to being open and vulnerable for the first time. Greatly improved clinical experiences as a result of using TEAM-CBT in his clinical work. In fact, he is thinking of starting a free weekly TEAM-CBT practice group in the Los Angeles area, and hopefully opening a Feeling Great treatment center somewhere down the line. Make sure you contact Michael if you are interested joining his weekly practice group. (drmichaeldg@gmail.com) You can see his amazing mood scores at the end of the session on his final DML. He also gave us perfect scores on the Empathy and Helpfulness scales, and described his experience as a “transformation.” After the session, he added that he’d seen that people really could improve quickly during other live demonstrations at my workshops, but felt skeptical that a TEAM session could trigger joy, even euphoria, as he’d never actually felt those kinds of feelings. But now, he realized this was actually possible! I would like to thank Michael, as well as my amazing co-therapist, Thai-An Truong. Thai-An is located in Oklahoma City and specializes in treating post-partum depression with TEAM-CBT. She also does one-on-one case consultation as well as awesome online TEAM training for mental health professionals, including free weekly webinars as well as her “TEAM-CBT bootcamp intensives.” If you would like to contact Thai-An, she can be reached at Thai-An Truong thaian@lastingchangetherapy.com. After the show was recorded, I received this amazing email from Michael. I think you'll enjoy it! Dr. Burns, Just some additional thoughts I'd like to mention about the changes I've noticed since the Atlanta therapy demo. The ones you put in the show notes are totally accurate. But the positive changes I've experienced since the demo go way beyond those. I'm not writing this to suggest you include these; I'm great with what you wrote. I only wanted to elaborate a bit on how things have been for me because it's such an incredible change for me. Please feel free to add to the notes, or not, at your discretion. And by the way, we are now two months post-demo and my mood scores remain essentially at zero with high positive feelings. My stress tolerance has increased a great deal. Prior to the demo, when I made a mistake or did something stupid, I would rip into myself with intensely harsh criticism and self-judgment (I think I shared with you about the time I dropped the bottle of Cologne as one example showing the different reactions to myself). Now, when the same sorts of things happen, those harsh voices are absent or merely a whisper, and easily dismissed. So there is no accompanying self-hatred like before. I'm far more outgoing with people in general. I feel closer than ever to my friends and family. I've been more present and available to my friends and family. I'm more open and far less defensive than I've ever been in my life. I feel more positive feelings than ever, and I laugh more than ever. I have more compassion for others as well as for myself. I'm more aware of my emotional world and have more access to my feelings. I'm able to connect more with others in general. The types of situations that would trigger feelings of irritability or anger, no longer do. I'm more able to be available for others, whether in my personal or professional life. I'm closer with my wife, and, honestly, with everyone in my family and social circle. I've been in several social gatherings since the demo, and my levels of anxiety have never been lower, and my level of engagement and participation has never been higher; I'm like a different person. I'm more optimistic and hopeful than before. So I know this is a bit of rambling, but I just wanted to mention these things. As I  had discussed with you during our visit, I've been struck by how far-reaching the benefits of the therapy demo have been for me. We focused on the one moment of one problem on the DML. We blew away those negative thoughts and feelings. That outcome, had it been limited to that specific target, would have been amazing and a total success for me. But as per your model, that was a 'fractal'. And the change in the brain circuits happened with that fractal and the new networks were created, and I feel that they continue to grow. For me, it's truly been the opposite of the drop of ink in the glass of water, discoloring everything, as a distorted thought or belief will do. The therapy demo was the drop of 'clarity' that shined the light on all my distorted thoughts and beliefs at one time. Maybe that's corny, but this is what it feels like to me. So feel free to use or not use any of this as you see fit. I only wanted to mention these things. There's more, but I think this gives the flavor. Thanks again. Love, Michael Thanks for listening today! By the way, if you are looking for CE credits or training in TEAM-CBT, my upcoming workshop on therapeutic resistance on February 9, 2020 will be a good one. You'll learn how to use the techniques described in today's podcast. See below for details and links! David    

My guest today is Michael J. Metts. Michael designs digital products and services, with a focus on the impact of writing on the user's experience. He and co-author Andy Welfle have written a new book on this subject. In this conversation, Michael and I discuss the relationship between writing and design, and how being more aware of how we use language can make us more effective. Listen to the full conversation https://theinformeddotlife.files.wordpress.com/2019/12/the-informed-life-episode-24-michael-j-metts.mp3   Show notes Michael J. Metts on Twitter Michael J. Metts on LinkedIn Michael J. Metts on Instagram Michael's blog Writing is Designing: Words and the User Experience, by Michael J. Metts & Andy Welfle Card sorting Tree testing The Informed Life Episode 11: Lisa Welchman on Governance Microsoft Word GOV.UK highlighter method IA Writer Ulysses Markdown Slack Microsoft Teams Read the full transcript Jorge: So, Michael, welcome to the show. Michael: Thanks, it's great to be here. Jorge: Well, it's great to have you. For folks who don't know you, why don't you tell us about yourself. Michael: Well, I have spent the better part of my career now designing digital experiences of different kinds. I initially began in that field as a writer, in terms of what people called me, my title and that kind of thing. And now I have titles like designer, but there's been a lot of crossover between those two worlds throughout my career. Jorge: So, you and your coauthor Andy Welfle have written a book called Writing is Designing, which addresses this subject. How do design and writing relate to each other? Michael: Yeah, I think It's hard for a lot of people to make that connection because you run into a lot of people who tend to be wired one way or the other or feel like they're more capable in one area than the other. But really, if you think about any sort of experience that you interact with, like a mobile app, that's the one we use as an example right in the beginning of the book. Your mobile app, if you open it up and you start tapping through it, you start looking at it, you start to see words everywhere. You're interacting with language just as much as you're interacting with visual elements like menu items and buttons and all those other things. So, our thesis really is just that you should treat those words as part of the design and that you should apply design techniques and practices to those words and how you get there, and not treat them as something that's inconsequential or after the fact. So, we've done that in our own careers, and we've seen how vital it is to building a good experience, and we just want to share that with others. Jorge: I think that the word design for a lot of folks evokes visual artifacts like drawings and sketches and stuff like that. And when you say that you apply design techniques, can you tell us a bit more about what that looks like? Michael: Yeah. So, design, it took me a while in my own career to make that shift from thinking of design as something that was inherently visual. I think the first type of design people interact with usually is graphic design, if you've come across designs of signs and brochures and handouts and different things like that. And you can kind of tell inherently if one is designed well or if it's designed poorly. But you know, the, the thing about it is that the words that make up those artifacts are typically the same, whether it's designed well or designed poorly. So, I think that's why people tend to think of design is like the polish that comes at the end. But the way I think of design, and I think the way a lot of my field thinks about design, is that you design the experience someone has with a thing. And when you frame it that way, then you begin to think of it more broadly, and you begin to think of all the things that impact it. So, it's not just words, it's not just visuals, it's maybe even the business policies that affect how that thing works, or maybe it's the number of steps involved. All those things are critical pieces of the design that you can't even see as the person using it. So that's why, when I talk about design techniques when I'm talking about is thinking of prototyping the language you use and testing it with people to see how they respond. So, a prototype of language can just be some written sentences on a piece of paper that you go and ask people about, you ask them to read through it and ask how they perceive it. Those are all valid ways to design the language we're using rather than just writing it and going forward with it without really thinking about the impact it has or actually getting information about the impact it has on the people who interact with Jorge: You talked about an example of a mobile app and the words that you see in the screen, and that is one way of encountering language. You also have just talked about a sentence, and that strikes me as a very different way of encountering language. The former is within the realm of what I understand of as information architecture, right? Like this notion that you create these structures of language that allow you to understand and move about an information environment. Are you more of a writer of sentences or a writer of user interfaces?  Michael: Even in interfaces, there's always a tension between what the experience is trying to do and how people feel about the language you're working in, whether it's English or any other language. Maybe you feel like those error messages should be sentences, right? And maybe you're applying all the same thoughts that you would when coming up with a sentence for an essay or something to the way you write that error message. But the important thing is that you unpack it and think about why you're thinking that way. Think about what's appropriate for that particular use case and be intentional. Like that's what I mean by designing with words. So, a sentence could be part of that information architecture you're describing, and there's nothing wrong with that, but the important thing is unpacking why and being clear about it. This is something Andy and I do for a living every day, and then we wrote a book about it, which was a very different way of writing and a very different way of expressing our ideas than the type of writing we'd done for these digital products. And so I think we saw a lot of things creep in to our writing that we didn't see every day in our work. So, in trying to string all these sentences together into a book, that was a really interesting exercise and it was very, very different. So, the writing definitely is different. You know, you're writing in a digital product, you're writing to help someone move through a situation, your writing started to be invisible. You're not trying to draw attention to yourself, to talk about the merit of your ideas. I mean, those things. So that to me is where the line is, you know, it's more about your intention and about what you're trying to do with it. Jorge: When you used the mobile app image, the image that it evoked in my mind had to do with things like heading labels and navigation links. But you talked about the error messages. Error messages to me are more prose-like in that you have to give the user a little bit more context of what's going on. Whereas with things like labels, you're peppering words around the thing. You have a little bit less of that kind of sentence structure to play with. And I'm wondering if there's a difference in writing for the one versus the other. Michael: That's interesting. I think people who have jobs like mine are asked to drift in and out of those spaces without thinking about the boundaries. Because it's interesting that, in your mind, there's a very clear boundary between the two, but one of the challenges as someone who writes for a digital product, you have to figure out how to make it seem like there isn't, you have to make it feel like this is a cohesive experience where all this language works together and fits together. So, obviously there are big differences. Like you may have fewer iterations of that structural stuff, like if you think of the items in a navigation, you may do testing — you know, there are really specific testing techniques in the world of information architecture, like cards sorts or tree testing to help you figure out what those things should be. And you're not really trying to mess with them a whole lot after that or iterate on them a whole lot, unless you have reason to believe that they're not working that well, or unless there are changes in the organization. So those are like really big structural things. The rest of the language though, it really has to fit into everything else the user's experiencing. So, examples of the types of writing, you have the error message, you have the push notification, you have onboarding messages, you have a little tips and helpful hints that pop up throughout the experience. That's very specific to the mobile app experience. So then if you have something like a voice experience or a chat bot, then you have dialogue that has to accomplish all those things just as text, as language. So, there are definitely different ways to think about it, different techniques you use when you're working with those things. But they do all have to work together. And that to me is the exciting thing about seeing it come together and practicing this type of work, is that you can start to build a whole ecosystem of language within whenever you're working on. Jorge: How is that ecosystem of language managed? Michael: I think it's different for everyone, you know, every organization. There's a really encouraging trend in design systems recently. I think design systems originally began as pattern libraries where people would put like their front-end code in a place where it was manageable. And then it became a place where you could talk about design standards and visual specs and things like that. And now the latest trend, which is really cool, is that you're describing patterns that are more structural. So, things like the language we use and how we write for certain situations and how you keep it consistent and how you may have a clear voice for your product that comes across. So to me, that's one of the more common ways I've seen it happen. There's also style guides many companies are using and then adapting style guides to their own means. Those tend to be more at the individual word level, word choice or an abbreviation or things like that. I think this trend of design systems is a really neat one. Jorge: Are there any tools that you've seen or used to help do that? Michael: It's an interesting thing, because in websites you have the sort of foregone conclusion is that you have a CMS, right? You have this content management system. Products usually don't, or if they do, it's nothing like their website CMS, which is designed to run an author experience. Okay. So that is interesting. I think it's a space we'll see a lot more, and I think are a few startups and companies that are experimenting with things like that. But honestly, a lot of times when I'm trying to manage content for our product, I will partner with the engineering team and we'll work directly in the code, so they might do some sort of a markup language that makes it easier for me to write and contributing. But that helps us look at like, okay, here's everything that's in the system, and maybe we could just reuse this over again in this situation, or maybe this necessitates a new variation that we haven't thought of before. So, I think it's really an emerging space, which is kind of surprising to me, but at the same time, I guess you're moving so quickly, you're not really thinking about how to control that language. It's easy enough to just put it, to use the code to manage it.  Jorge: And beyond tools, I'm also wondering what is the role in the organization who has the ultimate responsibility for managing language? Michael: That's a really interesting question. I know you had Lisa Welchman on your show a while back, and she was talking about how organizations manage the content governance and the types of things they go through. And I think it's interesting because I don't know how many organizations are thinking of governance, in terms of what shows up in a product, in terms of what shows up in an interactive experience. I feel like it's usually thought of in terms of the static web content. So, I think there's a need for that. And I think what makes it complex is that there's no clear owner and there's no clear role. You know, everyone is capable of writing. Like if you have a job working on one of these digital products, chances are you're fairly competent as a writer, or at least you think so. So, if someone asks you, ” Hey, can you write this?” You'll do your best and you'll get it out there. And all you need is a word processor. You know, you fire up Microsoft Word and get something down. And that's really different from the way design in the traditional sense is practiced now, where you have a tool that's very difficult to learn and has a lot of quirks to it, and you've invested a lot of time in learning that tool, and you can use that tool as a governance mechanism in itself. You can say, “Well, I'm the one who uses the tool. So, I decided the designs.” And I think that's why designers of words have a harder time. In a sense because they're going to have to rely on building relationships and building trust and making a case for why we should use this particular language because it feels so accessible and malleable by just about anyone. If you're a designer with words, you don't have a tool to fall back on and say, “Yeah, this is my complex thing that only I understand that only I can use.” Jorge: So, I'm wondering how you… Like, I would like to hear an example of how you go about designing with words. Like what are the tools that you're using? What is the process? How do you put it in front of people? How do you test it? Michael: So let's walk through an example. So going back to the example of an error message that I talked to at the beginning, if you were asked to write an error message, you could take the scenario that someone gave to you and say, “Well, here's my best effort at what that error message should be.” There's actually a story about this in the book. Someone named Lauren Lucchese, she's a design manager here in Chicago. She talks about the first time that she was asked to dive into writing some error messages for a login screen. And she was given this spreadsheet of 50 error codes and told to write something general that would work for most of the situations, if not all of them. And she started this project just trying to respond to the need that was given to her and trying to make her best effort to write the right error message. But there were a lot of different things in that spreadsheet. There were things like a code for when the user of the account, when records showed that that person was deceased, for example, or when there was a notice of fraudulent activity on their account. So, there could be all sorts of reasons that this person can't get into their account, and some of those merited some unique handling. So, while she started to just write, she realized that that wouldn't meet the needs of the users. And in fact, when some of those initial flows were tested with users, they saw that it wasn't working that well. So, what she did was she started asking questions about these different scenarios and how it would be resolved on the business side. So, for example, if there's fraudulent activity, they could give a phone number that would go directly to the fraud department, then this person could get the help they needed quickly and they wouldn't have to go through a phone tree because they already had identified the person's problem via that error code. So that's an example of how Lauren was able to identify unique needs by asking questions, by being curious. And that's applying… that's an example of applying the design mindset to this. And then when you think of testing, like the tools that you're using for this, a lot of times it's just a text editor. I use a plain text editor for my first passes when I'm designing an interface like this. We're having a conversation as a team about a new feature we want to build out, I'll offer to share my screen and start writing just in big text what we think that feature would be or what we think it will say. And getting it in front of people tends to get some really good reactions that are helpful for the team to process that. It's sort of akin to what you might get by sketching on a piece of paper what the interface might look like. Doing that same thing for the words you write, treating them not as precious, but as something to just to get out there and try to express, is a really practical way to apply design to writing. So, put three options out there that are wildly different, and see where they take you and see what conversations the team has about them. And then beyond that, I use paper a lot for testing. Testing can be pretty complex when you're dealing with a visual interface, but I find there's a lot of value in abstracting the words from an interface and testing them on the run and seeing how people respond to them. So, you can give enough of a setup that people understand the scenario that they'd be facing and then get their reaction. So, one of the methods we talk about in the book was popularized by GOV.UK, they call it the highlighter method. They print off the content just by itself outside of any sort of screen and then they ask people to highlight in green the things that work especially well, and they highlight in red the things that don't work as well. Then they're able to ask follow-up questions about why. You know, why is that working very well? Why is that? Maybe it's confusing, you know. Maybe people didn't understand the language, maybe there was jargon involved. And so that's how you actually make a case for your design decisions using words, by getting it in front of people and getting data from your users. Otherwise, you're just going to have a lot of discussions back and forth with decision-makers and say, “Well, I think it should be this way.” And they say, “I think it should be this way.” Again, that's kind of the. beauty of what a design practice brings to writing: you can start to think about it more objectively and apply some rigor to it that you wouldn't be able to if you just kept writing the way you normally do. Jorge: I can see how that is a more designerly approach to writing. I want to come back to the text editor. You said that that's a tool that you use to do this, and I'm wondering if you have a favorite text editor, and if so, why? Michael: Yeah. I've tried a lot of them. I guess it's like a hobby when you're a writer, you're just downloading text editors constantly. The one that I use as a scratch pad at work is called IA Writer, and I just like it because it gets out of the way pretty easily. You can get the type nice and big for when you're sharing your screen, and that one, it's just simple. And of course, writing the book, I used a different one: I used Ulysses for just because it was easier to organize things. And that's what I use when I'm writing on my own, just to get things down and in an organized way. So, it does nice things there. But IA writer as my favorite just scratch pad with the team, I'm sharing my screen, kind of a text editor. Jorge: Can you talk a little bit more about how you choose one versus the other? When you say scratch pad, does that imply that it's for shorter-form texts? Michael: Yeah, I mean like there's no organization, right? You're just opening individual documents, so it's easy to just open one and then they're automatically saved to a certain folder on my computer so I can just open it, open a new document, and I know it's there, saved to the cloud as soon as I open it. So that's a nice thing about it. And then there's just the simplicity. I think a big trend in those texts editors is that they're like a distraction-free environment. And that's what I look for as well. I don't want anything but the words on the screen when we're looking at it. In full screen in IA Writer, that's all you can see. It does support Markdown as well, which I'm a big fan of. I use that all the time to give hierarchy to the things that I'm working on. That's a nice thing too you can borrow from the design world because you know, there's this idea of hierarchy. How do we apply that to language as well? And that translates pretty well to Markdown. Jorge: Can you speak more, for folks who may not be familiar with Markdown? Can you tell us the elevator pitch for Markdown? Michael: Sure. Yeah. I mean, I don't know if anyone needs to be burdened with it, but… the reason I like it is because you can really easily apply some formatting without going overboard. You know? So, like, if you think of the Word document that you may have received from a coworker with all sorts of different colors and fun fonts, that's not the type of formatting I looked for. Markdown, you just put for example, a pound sign in front of a line of text, and that is your largest heading. So, if you put two pound signs, then it's one size smaller, and you can use that to break it up. In this section, you can do italics, you can do underlying, you can do bolding. But it's really minimal formatting that you can easily remove. So that's what I like about it. Jorge: When you were talking about creating variations that you would put in front of people, you used the phrase, “abstracting the words from the interface.” And I'm wondering about the relationship between this designerly way of writing and typography; the actual rendering of the letterforms and words when people encounter them. So, a resignation letter reads very differently if it's set in Times New Roman than if it's set in Comic Sans, right? Michael: Yeah. Yeah. I mean, I think that applies to like the importance of… I don't know, sometimes I worry people hear me talking about how writing is designing, and they think like, “Oh, well you don't care about the visual side of things.” That couldn't be further from the truth. I think that the best design happens when someone whose core skill is language teams up with someone who's core skill is visual design and they work together to build an experience. If you could find both those skills in one person, that's incredible as well, but that's really difficult to do. But I think that's a reason why you have to be in partnership with people. Again, like visual design is another part that dramatically affects the experience people are going to have. So, when you're abstracting from the interface, you've gotta be careful with that. You're not saying this is the final ruling on how this should be. What it does give you is, it gives users a chance to interact with the or language without being burdened by the usability issues of a form, for example. So, you can get information that you know is about the language itself. So that's what's really powerful. You don't want to use it in isolation. You don't want to over rely on a technique like that. my question is, how often do teams actually try that, right? Like how often do they actually get the message in front of people by itself so that they can understand how people in processing it?  Jorge: So, I have one final question for you, just to try to make it actionable for folks who might not be designers using writing as their day-to-day work. All of us have to communicate using language. And I was wondering if you have any tools, tips, techniques to help folks be better writers. Michael: Yeah. So, I think you could still think of writing as designing, even if you're never making it an interface. And what I mean by that is when you write something, when you write an email to a friend, take a step back before you send it. This is common and advice that, that seasoned writers will give people all the time. Take a step back, read it out loud to yourself. Think about the effect it will have on that, that person. And try to put yourself in the place of the reader as often as possible. That's, that's such a good exercise. Think about the effect that the words you have written will have on the audience. And, you can even test it too. That's another neat thing you see it happening where people will be like, they'll come up to you with something like, can you read this? Does this doesn't make sense? Apply those types of thinking to your everyday writing. And, and don't be afraid to get those other perspectives involved. I think what's beneficial about design especially, is this idea of being clear about what you want to learn. So, when you show that to someone else, don't come at it trying to answer, “Is this any good?” You know, like come at it with, “I want to see how this person perceives the way I wrote the greeting.” Or, “I want to learn more about what they think I was trying to get across here.” And make sure that you're really clear about that at every step of the way. I think it's very rare that we take a step back in our own lives and try to look at what we're trying to accomplish with the little things we write every day. Even something as simple as like an instant message to someone on Slack. I see frequently people complaining on Twitter about coworkers who just say, “Hi!” on Slack or Teams or whatever, and then wait 10 minutes for the person to respond before saying whatever they needed. So, there's this emerging idea of having some IM etiquette and saying what you want along with your greeting so that you're not wasting people's time and aren't breaking their concentration, all those things. So, you can do that just by being intentional and being thoughtful and not being so reactionary, right? Like the reason people type “Hi” and just hit send and then go away is because it's really easy. But what would happen if you started to think about the people on the other end more whenever you're writing. I think that's the, that's the direction we want to move in. Jorge: Fantastic, that is great advice. Thank you. The book is available now for preorder, right? It's Writing is Designing. Michael: Yeah. Jorge: It's available in the Rosenfeld Media website. Where can folks follow up with you other than by buying the book? Michael: Well, they could follow on Twitter, LinkedIn — I'll accept connections from people in the field. And I also have Instagram, if you're interested in photography. That's how I began this journey. I think that that side of me is a lot more fun than the writing sides. But yeah, any of those venues. I'm also trying to write a little bit more. The book got me interested in writing outside of work. So, you can follow my blog at mjmetts.com. And I write there just a lot about the methods that I use to help teams work together effectively, how I help people understand my work, and those kinds of things. Jorge: Well, great. I will include all of those in the show notes. Michael, thank you so much for being on the show. Michael: Thanks for having me. It's been great.

James: Hi listeners, welcome to Achieve Wealth Podcast. Achieve Wealth Podcast True Value in Real Estate Investing focuses on key players in valuable estate investing specifically on Commercial Real Estate asset class. Today we have Michael Becker who has done more than 7,200 units, primarily, I believe in the Dallas area, I know Michael can help me fix that. But you know, he has done a lot of deals in the past few years that he has been investing. Hey, Michael, welcome to the show.  Michael: Thanks for having me. Appreciate it.  James: Good, good. Can you tell the listeners about things that I missed out about your credentials? Michael: Yeah. So, Michael Becker, I'm based in Dallas, Texas and I'm a banker by profession. That's kind of how I got into the business was loaning money to other people and went out on my own about six years ago now, so about six years of experience. And as we talk right now, we're just closing up our 34th and 35th acquisition. So puts us about 70 to 100 units that we've done in our career. So far we going full cycle on 16 deals. So we refinanced three out, return some Capital still own and we sold 13 of them. So as we talk, we currently own about 5,000 apartment units, the vast majority of those are up here in Dallas Fort Worth, which is where I'm based. We have 400 units in Tyler and then we have 900 units in the Austin markets. So we're Texas-based focused, predominately on Dallas Fort Worth and Austin for where we look to buy. James: Awesome. Awesome. So rarely, I get to interview someone who has come from, you know, brokerage business and also the landing site, right? But I always wonder why Brokers and lenders who lend money and trade deals never really become the buyer or the owner of the assets, right? So what was your triggering Aha moment that you said, hey, I should better just, you know, go on the other side of the table here and start buying deals rather than lend money? Michael:  Yeah to be a banker, you have to have a certain like mindset and generally pretty conservative and if you start becoming successful like I was as a banker making a lot of loans, they try to tie you in the bank by giving you stock options and have more investing period so it's kind of the longer you wait, the harder it is to leave. But for me, I was 35 when I left the bank, I'm 40 now, and we're just like this little fork in the road, I felt that if I stuck around it was going to be that much harder to go. And really what I did was this all day every day was making loans to other people like yourself that would be a buyer, distress deal, renovate and sell it for big profits and I kind of realized I was on the wrong side of all those deals. It's better to be the borrower than a lender.  And you know a lot of great clients, a lot of them are friends, my friends still to this day, and I was looking at a lot of them and I was like thinking myself like if that guy can do it, I definitely could do it. You know, not that they're not smart. But what I like about the business it's a really, really simple business at its core; it's not always easy to execute but it's pretty simple to understand. So I had a lot of connections, had a lot of experience, you know, I underwrote deal after deal after deal, I knew everyone in Dallas Fort Worth, I was in the industry. I just wasn't doing anything about it.  So I met my business partner, Shawn, back when I was at the bank and he was helping people out of California buy properties in Texas. I made a loan to them. And so, he was kind of sick of working for his boss the broker and I was sick of working for my boss at the bank and so we kind of went out on our own. And like I said, we're probably the second or third most active B classifier in Dallas Fort Worth and the current market cycle. So we've been pretty active here in Dallas Forth Worth.  James: Got it. Got it. That's interesting. I always wonder, I mean, what do the Brokers and lenders see in themselves that they want to continue doing that rather than owning an asset? Michael:  You know, when you think about it though, like as a banker, you don't have any money at risk, you got other people's money at risk, you got your clients' money, you got the bank's money and you know for you to go tie up a deal, especially today, I mean, you posted up six figures in earnest money or God forbid, you know, well north of that hard earnest money day one and get all this like Risk and then you got to go out and raise, syndicate the capital. So to take that to do what we do for a living, you got to have a certain amount of guts to go out and do that because you know, you're taking a calculated risk along the way and you don't have a paycheck. So if you don't do business you don't get paid. So that's a certain minority of people in the world I can go on and take that type of risk on and thrive and if you go out setting cases up like I do, you just have to be comfortable taking that kind of risk. And on top of that, you know, most of the stuff is on recourse, where you still sign and carve out. Some bankers get pretty, pretty nervous about signing, you know, I have 4- 500 million in debt right now so I mean that's a lot of money, you know, and to try to take that mentality, it's just a different type of mindset for sure.  James: Yeah, I guess the entrepreneurship mindset and whether you want to do it, I mean, especially if you have gone through the last crash in 2008, you can be very scared.  Michael: That's right, for sure. James:  So let's come back to how did you scale up to this large portfolio, right? Because I used to listen to your podcast when I started in this multifamily investing in 2015. When I was listening, I know you had like, first year in[05:47unintelligible] you had like 1000 units and now you have like 7,000 units, right? I mean maybe now you own like 5,000 units, but what was the system's process if you put back yourself back into that time and I know you made mistakes from then until now but you know, what are the teams or what are the processes and who would you hire first to grow to this scale? Because now it seems like clockwork for you because you guys have been... Michael: Yeah, so we started out, it was pretty lean. So when we first started out, I did the first four deals, first 800 units. I still worked at the bank and then I kind of had enough scale that I felt like I could you know, keep going. I had enough credibility in the market place; you buy one deal, you get a lot of credibility. You buy four like quickly everyone in town knows you're out there buying it because like I mentioned, I had a lot of resources like from the standpoint like all I did, all day, was underwrite apartment loans. I had a lot of connections to a lot of people. What was holding me back was that everyone thought of Michael Becker as a banker, they didn't think of me as a principal so I had to kind of change the perception in the marketplace what I was from a banker to a principal. So once I did that, that changed it pretty quick and then from there, we sort of started to scale. And so it was my partner Sean and I and we had one employee when we started. We kind of did a little bit everything and we all do a little bit everything when you're that kind of small. And so, you know, we were just kind of guys who were doing deals and then all of a sudden we woke up. I think we had seven or eight deals and we had all this work on us and there was still just three guys out there doing deals. So we had to figure out how to systematize so we started out with someone that's got an IT project management background experience actually, so she came in and kind of did operation; we were disorganized with stuff everywhere. So like our Dropbox wasn't orderly, you know, just wasn't everything wasn't save down. We didn't have any documentation of processes and procedures. So she came in the systematically, you know by meeting with me for two hours at a time., she'll talk about whatever, interview me and systematically built out all our policies and procedures and organize everything. You know, our chaos for life got real organized over a six to a 12-month period from there. Then we added an analyst to kind of help on top of it. And then we started layering in an administrative help on top of that and then you know, we start getting Asset Management help, hired a professional asset manager and then you know, we hired transaction people to kind of help run process the escrow and things like that. So those are the types of teams, you know, we have a third-party management company. I think you're vertically integrated when you do management in-house.  So we're able to manage 5,000 units with nine people; basically my partner and I and seven employees. We've got ahead and taken the approach. So I want to hire really high-quality people, pay them a little bit more money, but just be a little bit leaner. So that's kind of the approach we've taken because I really don't like managing people. So the lesser quality people will take a lot more of my resources so I rather pay someone that's a killer really high salaries and trust they can go out and do the job. But you know, admin help is the first thing I think you need. Someone to make sure you get organized. You have a process, make sure you get an investor database. Be really helpful, if you do syndication dropboxes, so we use dropbox all the time.  You'll have internal chat systems. Those are things that kind of we can do quick little messaging, you know, all sorts of stuff like I talk about, about raising money more efficiently if you want to go down that path or if you want to talk about operation, we talked about that too. But just trying to use technology and work smarter not harder. And every time we do a deal, at the end of the deal, we always have a Post-mortem meeting where we go over the good and the bad and we take away lessons that were bad and then we take those and try to improve the process for the next deal.  And when we first started out, they were a lot of bigger issues and now, fortunately, the issues are really small and minor because we got the list of stuff you don't ever want to do again list, got really long pretty quick and try not to make the same mistake willingly twice. James: Yeah, so can you name like top three things that you have realized from that not to do list, can you share it with the listeners?  Michael: I mean around raising capital in particular, you know, we first started out, we had a database and I needed to raise a million. I remember I had to raise a million four for a deal, I think it was a million five something like that. And it took me about 20 25 people somewhere in that range to get a million five in, a hundred thousand minimum. We first started out I'd get a package. I need be able to an investor. I set up a call and have an hour-long call, 45 minutes to an hour long call and I had to do that 25 times. Now, what will do is we'll email the list, we hit schedule webinar and it's at, you know, seven o'clock Central Time on Wednesday. People that can attend Live, great. If not, we'll send them a recording of the webinar. And then they can watch the webinar when they want to and then I have a five-minute call with them if I need to resolve. So I presented all the materials of the deal so maybe a lot more efficient that way. Whereas, you start scaling up doing like webinars a lot more efficient way to present your opportunity than one on one calls. Because, for example, we just finish up with 24.6 million dollar equity raised and if I had to do that one call at a time like that is so huge, you can't do that. It's going to be 200 people basically invested to get 24.6 million. So, you know, you'd have to have 300 calls to get that and that just isn't an efficient way of doing it. So, that'd be one thing.  Another thing that's been official, as I said we got an investor database. So when you invest with us, you go to our database or portal up our website you fill your stuff in electronically and you electronically sign your documents. And that's a much easier way of going about it and getting the old school, paperwork out, that's kind of how we started. And then finally what was another good way to be able to work efficiently. You know, I think we got more efficient the way we've kind of work it and keep people in line and we clearly communicate what's expected of people and we're really consistent with it. So those are things you grow into, those aren't things you necessarily have money to do out the gate because we, you know, spent a couple of thousand bucks a month on our investor database. So if you have zero units to spend $24,000 a year on a database doesn't make sense. But you know, gotowebinar is certainly something you can do and you can use a Google sheet instead of a set of a database until you ultimately get enough revenue where you can afford some of the more technology tools that are available out there.  James: Yeah, yeah. In fact, I just launched my investor database yesterday, which was a lot of my investors love it. They just say it's so nice for them to see their dashboard, in terms of investment because a lot of them have multiple investments with me and it's just nice for them to see. And all the documents are in one place and they can just log in and get the report. They just love it. Michael: And it'll help you when it comes to tax time to track all your distribution in there, I'm sure and then you don't have to go recall your distributions at the end of the year to do your K1s. James: Got it. So coming to I mean you must have a good number size of passive investors. I mean, how do you select certain passive investors for certain deals? I mean is it first come first serve or how is that? Yeah, so we have, let's see, I did 900K1s last year. I think I had about 500 unique investors when we closed the year out. We just raised, I'm not quite sure what the stats are of how many are a repeat, how many are new but I probably have 600 unique investors who've literally invest with me at this point in time. And we're going to do 12-1300K1s  next year easily. So yeah, we generally will so we definitely have like a blacklist, right? So if we take your money and you're a pain, we'll make sure we don't take your money again. That's certainly the thing I think everyone should do that for sure.  On the front end if we think you're going to be a pain we'll generally kind of blacklist you as well, life's too short. Yeah, too many people, we don't have time to have a little distraction. But basically when we have an offering, we'll just go in the database and you'll get together like the MailChimp will send out a little, hey, coming soon email or save the date email, got a future opportunity coming up and then you just email the database and just generally first come, first serve.  Sometimes we have a couple of guys that we know that we have a special situation with that. They're like, hey, I have this money. I want to place it with you. Maybe we'll give them a little bit of a head start to deal from time to time. But generally, send it out first for people to pay attention, fill the paperwork out, get it all done, wire the money in, those are the ones that get into the deal. James: Yeah. I mean, I agree with some investors being a pain. I mean, it's just so hard to win. Especially sponsors like us. I mean, there's so much of moving parts and so much hard money in and on day one, I mean, so much money stuck on escrow and this has so many things going on in closing a deal. And there will be some people we just had to deal with it, right? Michael:  Yeah, so, you know, it wasn't the vast majority, people are great and but you know, one of the things that I was talking with one of my buddies, he's syndicating his first or second deal, yesterday, and he was getting a little frustrated, it wasn't going quicker and I'm like well just because you have a deal in escrow and you have a deadline and it's important to you, doesn't mean that it's not as important to investors, but they have other stuff going on their lives. So you got to be able to make sure you meet your deadlines. So you got to consistently communicate deadlines and be proactively reaching out to people and you know, you gotta push sometimes to get these people. Because if you don't stay in front of them, they're going to get distracted and something else in life is going to come up and they'll just simply forget that, you know read about your deal. They don't mean to and it's kind of like happens.   James: Yeah. Yeah, I always communicate as well to make sure that everybody knows the timeline and when do we expect things and keep on communicating to them because everybody's working on getting things done, the passive investor, the sponsors and all that. So that's important. And so the type of deal nowadays that you're doing because usually I mean, I'm not sure whether you know, I wrote a book called Passive Investing in Commercial Real Estate where I categorize three different types of deal, which one is core, the other ones are light value add the other ones a deep value add. So the type of deal that you're doing, can you describe those characteristics? Michael: Yeah. So when we first started out, we bought a whole lot of[16:37unintelligible] that's kind of generally where we started out that's where most people start out. So the first probably ten deals may be more raw 1960s 1970s vintage stuff and then about two years into the business, we started to transition more in the B-class. So Texas, things like the 1980s vintage. And then really the last two to three years the vast majority of what we have done had been kind of more B plus, A-minus. So things kind of like late 90s all the way to about 2008; that's kind of my most favorite part of the market, as we sit right now.  We have done a couple of brand new deals. We had some exchanged money, we sold a BDO and we just bought a brand-new 17:16unintelligible]  and then we bought a few deals a little bit older than the 90s. But generally speaking, if you ask me, A-minus is my favorite space and a couple of reasons for that. Now one, if you go back when I first I bought my first apartment 2013, I bought a brand new class A Deal in Dallas for about a 5 cap, a BDO was like six and a quarter six and a half cap and a CDO was like eight, eight and a half cap. Fast forward to today an ADO is like a 475, a BDO is like a 5 and the CDO like five and a quarter by five and a half, something like that, right? So what used to be a big gap is now really, really narrow.  So we have the ability to track larger amounts of capital. So it make as much sense to me to be on a risk-adjusted return basis to buy a 1970s piece of crap building if I can buy a 2004 vintage building for a similar cap rate. So that's kind of what we're focusing on. And the stuff that was built that's 15 years old, stuff kind of on the 2000s. Still, most of those have like white appliances and cheap light fixtures and you know, no backsplash and you know cheap cabinet fronts. You still do similar value add things like flooring, appliances, fixtures, backsplash, cabinet fronts and still push the rent lift up a hundred dollars or maybe more per unit by doing the work. So that's kind of my favorite part on the market and then just kind of we've been fortunate enough to have a couple of deals go full cycle and return a bunch of capital. So we have a lot of money in our database and so I can't simply go raise two or three million dollars, that's just too small, you know, we need to be raising, you know, nine ten million time minimum; it's just too small. So we're just trying to do a little bit of a larger deal. And that's kind of what we've been focused on and say light value add, A-minus that's the vast majority of what we do with a couple like more newer stabilized kind of deals then thrown them in if we do an exchange or we just think we're getting a good basis on a deal. James: Got it. Got it. And also the other thing that I mentioned the book is the passive investors will be, they would like to invest based on their preference or based on their investment cycle. So when you look at your passive investor demographic, do you see some differentiation in terms of these are the group of people that like to invest in my deal?  Michael: Yeah, I mean, listen with 700 different people that invested with us you get a little bit of everything, right? You know, but that's one of the things that we always try to make sure we stress is you know, hey, here's what to expect. You know, we're really explicit about what the projections are, the timing and amount and the timing of the cash flow and when you do a syndication, ultimately most of those things need to sell at some point. It's hard to keep a whole bunch of unrelated people to together for perpetuity; forever is not a good hold in a syndication environment. That's cool if it's like you or you and a partner or a really small group of people, but when you have, you know, a hundred unrelated people that's hard. So we want to make sure when we're communicating with them that--and they understand like, you know what to expect and I also let them know if we're going to sell it and it doesn't fit what your objectives are, then this isn't a good thing for you to invest in.  So we try to be really explicit. So we match expectations properly because what I don't want is a year down the road, for you to be upset because you thought you were investing in, you know, one thing and there's really something different so, you know trying to be explicitly and very clear to our investors is what we're trying to do.  James: Yeah, that's good. That's the best way to just make sure that everybody knows what they're getting into right? So with the market at the current cycle right now, I mean in DFW Austin, you know, the whole taxes or places where you're investing it's very hot right now so, where do you think we are right now and how your strategy has changed in terms of acquisition? Michael: Yeah, I mean. You know, this has been a hell of a run where we're nine years into this thing or something like that. I mean, it's been one hell of a run. You know, with that said, the more we focus on a predominately Austin which is where you live in Dallas which is where I live and if you look at the population projections about three weeks ago, I've done this with staff about three weeks ago. The Census Bureau came out and kind of have stats for the growth 2018. So Dallas, Fort Worth from 2010 through 2018 over an 8 year period, there are a million more people in here in 2018 that was in 2010. So, we went from that 6 and a half million people to about 7 and a half million people and their projections in Dallas Fort Worth are to grow from about 7 and a half million people to almost 10 somewhere between the next 12 to 15 years. So to put that in perspective that's about two and a half million more people coming to Dallas, Fort Worth if the projections are right. So that's the equivalent of like the entire metropolitan area of Charlotte or Orlando and then putting it on top of Dallas, Fort Worth today. And everything I just quoted to you about Dallas, if you take the percentages, it's even higher in Austin. So Austin is growing even faster on a percentage basis. If you feel like just driving around, there are just more cars, more people all that. So I don't know a whole lot, James, but I know if the equivalent of the entire metropolitan area, Charlotte is put on top of Dallas Fort Worth[22:50unintelligible] have to go higher right? They just have to go higher. So what we want to do is, you know, make sure that we're focusing on the right locations within the metropolitan area. You know, we're trying to buy away from these Supply the best we can. We're buying like Suburban multifamily deals in better school districts. We're trying to focus on basis. So we're trying not to pay Crazy Prices. One of the strategies we've done here recently is focused on properties that you can come buy and assume someone else's mortgage and you get this avoids having a large yield maintenance or the [23:24unintelligible] prepayment penalty. So you get a pass along a lower cost to you as a buyer. So that's a way to kind of counteract that a little bit.  What you give up as a buyer; you give up five years of interest only on the front end as you're assuming a mortgage that's most likely already amortizing so kind of hurt you up from yield. But if you save a million dollars or two million dollars in basis, you know, one day, that's going to burn down if you need to sell it or refinance it free and clear. So that's one strategy we've been doing. And then here's another thing. I mean you own a bunch of stuff to San Antonio like those we were talking about before we started recording. You know, this is one of the things I would say, it's completely unfair business, you know, a lot of it who you know, what you know, what chips you can trade. And you know, I own a lot of stuff in Dallas but I walk in the San Antonio, you know, you have more clout in San Antonio than I do, just because I don't own. So the Brokers are more apt to sell you something than someone that doesn't know that market. So we're at this point in the cycle doing 35 deals or some like that at this point, we know everybody, everyone knows us that our Brokers are players in town. So we get our unfair share deals. So, you know, we're looking at a lot of stuff and we're trying to be selective with it. It's also as far as strategy goes, you know, the lone assumption route has been something that's been successful for us. And then two, we put up a lot of hard money. That is the other thing that helps.  So you can put up a lot of hard money, get aggressive with your terms, you know, act quickly, you know, we got a deal in escrow that we officially never got to tour, you know, so we had to go shop it and then we never got to tour it and so we just basically got it in escrow went hard [25:10unintelligible]  without ever having an official tour and I can do that because I've done 30 something deals. You don't do that on your first deal. So I know what's up, I know what's going on and we did our due diligence and we didn't find anything that we didn't already expect. So we knew what to expect and that's what experience and repetition gives you a psyche. I got my 10,000 hours and I kind of know what's going on. I kept having to make better decisions, quicker with that level of experience.  James: Yeah and brokers love it too because for them is like you're a very easy buyer because you already know the submarket. You're not going to give a surprise and they have done deals with you. They just love it things to go much smoother. They make money as well. So they love the repeat buyers and the local players, as well. Michael: Yeah, that's right. And then we're all friends like we go and have drinks together we go to the baseball game together. We all become friends and you know people do business with people they know like and Trust so being local in the markets that we own and operate in. I was at lunch before this podcast and ran from the[26:17unintelligible] Brokers because of their office across the street from me. Walking down the street and you ended up having lunch in these just randomly. And as I was walking out, one of my competitors who own like 12,000 units whose office is around the corner for me walked across me in the hallway, you know, and on the sidewalk, I mean so this like being proximity and doing a lot of deals that stuff helps. James: Got it. Got it. So let's say nowadays, what's the process of your firm looking at a deal? So let's say today there's a deal coming. I mean, it's not on the market, the broker tells you, who looks at it first, how does it come to your eyesight before?  Michael: Yeah. The way we are set up, a deal comes in, say I get it, you know comes across my desk. You know, I basically kind of where's it located? You know, what's the basic price? Right? So I'll just kind of go to Google Map. Make sure you kind of know the location I'm in and I know whatever location that they are sending us. Like we know like the markets because we're in the market. So, you know, usually, most of the deals are like, no, it's the wrong location or no, you're prices are extremely insane. I'm not paying that price per unit for this type of product. And so usually a lot of people kind of get kicked out, but if it passes kind of that basic high-level test, then at that point usually we'll do like a real get the financial statements in from the seller. And then what we'll do like a real back of the envelope analysis.  We'll spend 20 to 30 minutes doing a real high-level underwriting just to make sure that it kind of passes the high-level test and usually a lot of those deals die right then. So, you know, the deal was just like, you know the match it doesn't work. It's just way too expensive or we don't think there's not much upside in the rinse. Just whatever it is. We kick a lot of deals out that way. Then if it passes that deal usually at that point, we'll do a full underwriting and that will take this like four hours. You know, we have a CFA that's our analysts. Our analyst will go underwrite the deal for four hours. Since it's my partner and I, then my partner will go through and kind of review the model. And once you review the model, it passes that, then, you know usually, most of the deals kind of die right there then they don't really work. But the deals that kind of pass that screening that's when you know, we'll kind of get down and get serious about it. And I think that point that's usually when I go tour. So that point, they pass all the tests so we set up a tour maybe put [28:34unintelligible]  in early kind of depends on the situation. And so, you know, we're looking at you know, 60 70 deals to get one that actually makes something like that. That's probably somewhere in that kind of General ratio is what we look at. And we just have like little series of check marks along the way that we gotta like, you know, but doesn't pass this one little test and let's just kill a deal and move on. I found on the biggest cost to have in my life anymore, stop tuning cost. So if I spent a lot of time on one thing it's at the expense of something else. So my time is precious. So just trying to make sure I get, you know, use that the most widely and don't chase these deals for you know weeks and weeks. I never had the opportunity of actually making it in a day. So that's hard to do when you're first starting out and that's a lot easier to do when you have some experience.  So when you start out, you got to learn these lessons sometimes the hard way. You got to underwrite this deal that if you would have just at the end of it just kind of be self-reflective like, you know, what could I have seen earlier on this deal that would have stopped me from wasting a week of my life on it? You know, you need to start that. I think that's what separates a better apartment owner, ownership syndication type groups from the less successful ones.  James: Yeah, I agree. I mean, I don't look at more than five parameters in any P&L to decide whether I want to dig deeper. So what's the ratio of deals that you look at verses you looking at and passing it to your analyst for the four hours underwriting? Michael:  I mean, it's probably pretty limited. So if it's called 60 deals to get one, I mean it's probably, at least half just get killed or your pricing is way too high or it's the wrong location or the deal too small or something physically about the deal I don't like. So that's probably half of them and the ones I've been going to like get a back-of-the-envelope, we probably kill, you know, the 30 that make it through on the 60 we're probably killing, you know, so that's 20 right there. Then we'll probably underwrite, you know, ten to get the one type of thing.  James: What do you look for in a location?  Michael: You know, yeah, so we're Suburban multi Family Guy. So good Suburban location that is in the better school districts, you know near major thoroughfares preferably to have access to Lifestyle and Retail amenities like, you know, like they are near a Starbucks, near a good grocery store, you know, retail restaurant, stuff that people want to live in. First and foremost, low-crime area too, I don't want to buy in the hood. So, you know, no low-crime area. Those are the things I look for and we're targeting, you know, preferably 200 plus unit, A-minus family deals, but that's kind of my perfect deals. An A-minus deal with more than 10% or an upside, you know it's well located, low crime, better School District, near employers, near retail and restaurant. That's kind of what I look for.   James: So, can we go a bit more deeper into the back of napkin underwriting? So, let's say there's a $10 million deal you know, 50 unit, maybe a 100-unit deal, how did you underwrite that? Back of the Napkin. Michael: I mean, so what is the first major metric is a, you know, one other [inaudible31:51} ransom what's our basic market survey say . So, pull a [inaudible] and look at the market rent. So then how much upside do we have in rent? So, I say, so, if there's only 5% upside in rents then it's probably not ideal for us, you know, we typically 10 plus percent in upside of rent to make the mass work. So, if I only have 5%, I know when I layer in my sponsorship compensation it's just not going to make sense. All right, so you know, like it's just not going to have no margin for us to be able to go attract capital. So, that's the first thing and then we'll then obviously go down and like other income or other income opportunities, then obviously look at the expenses as well. Michael: So, you know, one of the deals were we just got awarded, the payroll is by 1600 ,1650 a unit and it should be 1200, you know, so we can on day one, boom, take 450 out of payroll that certainly helps quite a bit. So, we're looking for things like that, that's kind of what it is. And you know, basically for maybe if you think about it at its simplest form, James, like, I need to do a deal I need to be able to deliver somewhere between 13 to 15% IRR today that's what takes me to attract capital. So if I can't get a deal layer in my compensation layer in whatever capital you need to do, um, you know, talk to the purchase price and I don't have enough upside of rents because at the end of the day, if I can't produce a 14% or 15% IRR over a five year hold period, my investors don't want to invest. So, I can't spend time on deals on can produce those types of returns. So, we're just trying to find, stuff that has enough upsides would be able to produce that. So, whatever that is, reducing expenses, increasing income, the two most common things, or is there some sort of way we can get a different type of debt quotes that may be kind of juices, some of these returns or whatever the specific situation is to that property. That's kind of what we're trying to get to the heart because, if I can't produce a 14 or 15% return, I need to shoot the deal and move on. James: Got It, got It. So, coming to 13,14% IRR is it to investors, or is it overall returns on ... Michael: Investors right. So, if it’s like 15 investors 17 and a half, 18 to the deal and you put a sponsor comp in there? So, it's got to be, I gross 8 total 18 they get up 15 and our structure or something, something like that. James: Got It, got It. Yeah. It's interesting on the debt code side, no, sorry, before I go there, how do you know that the seller is not taking some of your upside? Because nowadays that's what sellers do, right? They price it slightly higher; they give you upside, but they price it higher, which erases your upside. So how do you determine that? Michael: That's the whole thing why we don’t buy c class anymore because of the same catch, so yeah you know, that's the thing so I mean, all these deals that have a lot of upside have a lot more interest and so they can again, bit up and the cap rates are compressing. So, the trick is you got to overpay a little bit, but you can't overpay too much. Right. James: Right. Michael: And that's kind of like what you're doing. So, at the end of the day I got to, I, it's as simple as I deliver a 15 IRR and if I can't deliver, I can pay up to a certain price and then you start doing past out price and I can produce the returns I need. And that's kind of when we back off. James: Okay. Michael: So that's kind of how I think about it, so, every, most of the deals we'll work out at a price. So, we just kind of get to where this is the Max price what we can do to push to push out a 15 IRR for investors. And so that works up to 20 million and 20 million, 100,000 it doesn't work. So, you got to kind of draw the line in the sand and have a lot of arms in the fire. You get a whole bunch of deals working all at the same time. Usually, they start popping. James: Yes, yes, yes. The basis of my question is because they could be $150 or hundred dollars a rent bump potential, but the seller has priced it so much or we could have outbid-- Michael: Yes. James: --so much that it's not worth it, right. So, to do that because you might be just getting-- Michael: Yes, there's that. And then you get a little nervous for some of the less-- the newer people in the business, with little less experience like you're going to pay a five cap for 19 C class, 1917 deal. Okay, location and suburban St. Tonio or Dallas or whatever and then you're going to perform like a five and a half or five 75 extra cap. Five years down the road for a c class deal, maybe that, maybe that's the right cap rate, maybe it's not, it needs-- as you go and improve the property, you're able to increase rents and by extension, you value you’re in a why. But at the same time, the more upside you take out of these deals because your turnover, 50% units upgrade them, shrinks your buyer pool cause everyone wants value add. So, the more value you take out on the deal, your cap rate actually goes up. So, it's like a weird little dynamic you're in that you got to like, you got to factor in. It's like a 3-D puzzle you're doing because what's great because you're increasing, you're why. Because you're raising your rent, but at the same time you're also expanding your cap rate, as we sit in the same marketplace. So, it's interesting, complex puzzle, the marketplaces are right now. James: Yes, I was talking to a broker and you say hottest deal to sell nowadays it’s like deals where everything is done right, 90% is done. Michael: Yes. James: Nobody really wants it because everybody wants value add right? Michael: That's probably the opportunity to go buy a bunch of that stuff. Cause that's what today is. And then if you can get higher leverage loan, you get a 75% loan and get a good low-interest rate and get a bunch of I Own and go buy a deal that's turnkey. Maybe that's a better way of going, to be honest with you. And just kind of get a little bit more your return from current yield versus a big pop on the backend. That's thought about strategy, to be honest with you, it's a lot more safer than going and doing a bunch of work on a property-- James: Yes. Michael: --and paying a 475 cap for 1970 deal. I'd rather pay a six and a quarter cap for six and a half cap for a deal that's already done. James: Yes, because the backend is not certain. Right. Nobody knows what's going to happen-- Michael: Right. James: --at the [inaudible37:58] cap rate, so. Michael: That's right. James: So that brings to my next-- Michael: And then you do all the work, you might expand your cap rate anyways. And then you're doing all this work to only get half the payment. So, I think if I could go back in time, I would've bought every deal on a bridge loan. I would not have spent a single dollar in renovations and just operate it, wait five years and you sell it in today's environment for like a freaking 475 cap, that would have been a better decision with the benefit of hindsight. James: Yes, correct. Correct. So how would you-- sorry, in terms of cash flow vs. IRR vs. Equity multiply, right? So, what do you see, what is the most important number that-- for you, right, I know you're passive investors need to look at? Michael: Yes. You know, I think everyone, that everyone's different too. Like, all my investors have different things that are most important to them. I think, honestly at the end of the day, a pair of this investment, that investment, IRR is really kind of the driven. I'm not the biggest IRR in our store. We, I think the cash on cash certainly matters because I can't pay my bills on IRR, but I can with a check every month. So, I, that certainly protects it. But at the end of the day, really, we're focused kind of when we're-- comparing this, it's up to you in the next one, really kind of IRR. Because you know, if I'm able to come in this deal, I assume a mortgage and refinance in the third year or something like that and have a partial return of capital that pops my IRR pretty, pretty good. And I keep take some of this capital and return to my investors quickly. Two-year period, you know, 30% of their money back through a refi or something like that. That certainly is attractive. So, we'll, I think I kind of focused on IRR when I'm making the decisions on which deal, I want to buy, which deal I don't. And we've been, we like [inaudible39:54], we've been focused many deals about loan assumptions recently trying to get a lower basis. So, the first and foremost I'm focused on basis, making sure I buy a deal that's a relative value to everything else is trading right now. And I, cause I was only two things. You can't change on a property; you can't change your purchase price and you can't change location of it. Everything else you can kind of modify can always refinance it. I can always improve the property, but I can't change what price I paid or where it's located. So, we'll locate a deal with good prices, and I think everything else will kind of generally work itself out. James: Got It. And got it. How do you make decent between buy and hold for long term vs. buy and buy and refi? How do you decide? Michael: Yes, so if it's a syndicated deal, we've done a couple deals, especially when it first started out doing dentures where it's like what equity partner in us. Those deals we tend to hold longer. We bought a bunch of workforces, we sold them, we exchange, like A-minus or a product. So, we did a bunch of that. And then when it's a syndication people for like forever is not a good whole period if you're in syndication. Because people want, return on their money as well as return of their money and kind of the intermediate term. So, we're typically performing a five-year hold period. I think you'd be going much past seven. Most people kind of like, you know, shoot, I don't want to tie my money up for 10 years or 20 years. Now I kind of want to get my, I kind of want to see a return of my money as well as the return on my money. So, it kind of depends on the thing, but that's a heck of a lot of work buying and selling these things. So, it was just a lot easier just to kind of hold and it's kind of operate, especially the way we're set up with a third-party management company that does all day today. I, managing a bunch of thousands of apartment units. It's kind of like adult daycare. James: Yes, it's adult daycare, it's a good one to see. Michael: It's property management as a business of problems. I mean, there's always a problem, like every day, always, problems everywhere. So, if you have third-party management to kind of oversee that and we're set up and I have an asset manager that layered in between me and them. As a principal, the way we're set up, it's really not that bad on the day today. So, what we've been kind of focusing on is we're just selling the older stuff and buying newer, nicer stuff. Cause there's old stuff, I mean, not only, it was great, and we made a bunch of money, but you have asphalt parking lots and casts on sewers and t one 11 siding, Hardie. You go renovate a deal and two or three years later you've got to renovate the deal because the parking lot needs to be redone and you painted over wood. So, then you've got to have more wood of what, right? You got to go paint over again. And you can't cast, our sewers are collapsed in every time you turn around and get, dig it up and replaced sexting sewer pipe. So, you have all these like nonrecurring items that recurrent all the time. So, doesn't impact in a live per se, but it impacts your actual cash and the bottom line? So, I'm so I think the actual net cash you can pay out, it's not that different on a higher cap rate, older deal versus, or maybe a little bit lower cap rate, better quality deal if you're going to be in these deals for a long period of time. So, we've been just trying to get younger in our portfolio, so stuff I owned a day, I'd be much more likely to want to hold than the stuff I owned in 2014, 2013 cause those were just tougher, older, older deals. And I think that's what I've seen been kind of like the natural progression of most people that do what I do for a living. Just over time. One of the things, one of my mentors told me once when I first got in the business was, you own apartments in dog years, and every year of ownership feels like seven. So, like over time, you know that statement is very, very true. The older the property and the smaller the property, the more true that statement is. The bigger, nicer. It's just easy, just easier. So, I don't know if I answered your question,-- James: [inaudible43:42]. Michael: --but those are the-- between owning or selling a deal. James: Absolutely. Absolutely. And-- so let's go back to a bit more personal stuff, right? So, can you name like three things that you think is your secret sauce in, scaling up to this level? Michael: Yes, so, first and foremost, I mean I'm pretty tenacious and I had a lot of ambition, so, that was, that was a lot of it, right? I was like, I was willing to do what it takes to get to where I got. So, we had a lot of experience, background, and training and that certainly, so first and foremost, I just really, really, really wanted it. And like last weekend I flew to Jacksonville, not check, yes, Jacksonville, Florida, I'm sorry. Losing track of where I was. So, I was in Jacksonville for 21 hours. I spoke in front of 300 potential investors. I flew back home. I did that Saturday morning, came back Sunday morning and three weeks earlier I was in Newark, New Jersey, went to some hotel conference room on a Saturday, came back on Sunday. So, I'm willing to sacrifice a good chunk of my weekend to go out and get in front of investors so I can then do these larger deals. So, if you're not willing to put in the work and do what it takes and you're only, you're going to get a moderate your success for sure. Second thing was, I had a great background being a banker for over a decade and I just did deal after deal after deal. So, I've got a great education on my, on the bank Stein. So, most people don't have that. Cause then they're not bankers. Right. But, go get educated. That's the other thing I would, I would say get educated, higher from a reputable mentor. There's a lot of people out there put the time in. Become a student of your craft, go listen to this podcast, or listen to our podcasts, read books, do stuff like that. That’s a great way of learning. These podcasts are great. Like we host the Dole Capitol podcasts or your podcast. You're going to sit here and talk to me. So, it looks like about at least 45 minutes here- James: Yes. Michael: --at this point. And you get to your conversation from two guys that own almost 10,000 units collectively for 45 minutes for free. And there's a lot of wisdom and nuggets, but I think hopefully you can take out of that. Um, so, my background, my education was certainly it. And then really just a lot of its just relationships. You know what I mean? A lot of this is as simple as just don't be a jerk. That's, that's a lot of it, right? So, the brokers want to do business with people they know, like, and trust. They want you to be honest with them. They want you to be, do what you say you're going to do. And if you could just do that and be in a good guy and be friendly with them, man that goes a long way. It really does. So those are, those are three things I've done pretty well in this business. James: Got it, got it. And why do you do, what you do, I mean, where are you? Michael: I understood back, couple of things, right? To have a better life to be able to, the monetary if you'd have done well, the very rewarding monetarily. I sit back, so I got a couple of things happen, reflecting back on this, cause you know, we've done a lot in a short period of time. When I was 2010, so my mother passed away in 2010. So, I was like 32, I'm 32, 31, something like that at the time. And, so she was like 57 when at the time she passed away and then she-- her and my father sacrificed to save all their life to then be able to retire one day and then go have all those great traveling adventures in the sunlight and do stuff that was great in life and she didn't get to do that. She works to sacrificed and saved and I never got to-- the fruits of it. So, I kind of, that was a thing that kind of burned into my mind that I need to be able to do something young, unable to take a risk young. So, then I can then enjoy a lot of stuff in life. So shortly after, that's when I really first started was in 2011. I bought a bunch of rent houses in 2011. I [inaudible 47:28] my mom passed away and that's kind of really when I started like taking risks and doing stuff because being a banker, you're just naturally conservative. You're not really wanting to go take risks. But I started small and kind of got some confidence and then a transition in the multifamily. So that was one thing. And then, and then when I was about 34, 35, I was sitting at the bank and I worked for a large, large national bank and then, I was really successful, and they're kept trying to promote me. And, when I was looking at the bank and I looked at my boss and my boss's boss and his boss and thinking about what they do all day, it was kind of depressing, to be honest with you. Like I didn't want to do that. And I felt like a, it is a metaphorical thing, but it felt like a little fork in the road. Like I'm 34, 35 and if I don't go out and take a chance like right now, and I wait one more year, every year is, we made a little bit harder to go out and take this risk. But if I like go out right now, I saw the market, the market was right. Capital was blowing and the deals are so good. And I knew that because I was in the industry. So, I was like, if I go out and I fail I can always come back and be a banker because I was a really good banker and I can, y'all are going to need to be a banker. But if I go out and I succeed, then I can have a great life and get to go to Hawaii for three weeks. Like I'm going to this summer, I'm just going to pick up the family in Hawaii for three weeks. I'm just going to work from Hawaii for three weeks to sort of be in a hundred degrees in Dallas. Right. So that's what you, that's what I get to do today. And I get to pay for my sister and her family to go to Hawaii because we've taken the risk and been successful and those are-- that's kind of, I guess some of my whys right there. James: Yes. It's, it's interesting on how you're tenacious. I mean, whether its real estate or anything. And you can do this in anything, right to, you just have to be-- Michael: Yes. James: --persistent in doing it and know your why and just push it. And I can change your life. Right? So. Michael: In every transaction, there's always a problem, right. James: Yes. Michael: So that's the thing too. And that's what I always fall back on. Like there's always a problem. There's always stress, there's always, whatever. And you just got to like push through who's going to put your head down. You just got to push through. Just kind of will it, so do what you needed to do, you know? And not that every time I feel frustrated and you were not getting a deal, right? Like I've gone months and months on a deal, I just do more. Like, you know, I make more calls, I go do this, I'm proactive. I'm just like more always answer. So, we don't get what you want to do. More effort, not, that's usually, usually tends to work out pretty good for me. James: Good. Good. We're coming to the end. One more question. Do you have any like a daily habit or daily ritual that you do that contributes to your success or effectiveness in life? Michael: I'm not the most, I don't really read a lot of books. I don't really meditate on do any of that. So, what-- I, I do find myself from time to time, I'll go down the rabbit hole of doing something and like burn off 30 minutes by all my life around the internet or something like that in the middle of the day. And I always try to catch myself and say, okay, like I just need to prioritize. So, I have a hundred things to do every single day and I need to ensure I know what the most impactful thing is. And I focus my time on that. Cause, sometimes you let the tyranny of the urgent get in the way of the important. So just cause I have 40 emails on red, I need to go clear. It doesn't mean that's the most important thing for me to do right then. Even though that's like dinging on my screen in front of me. Sometimes I'll try to shut that out, focus on what are, what is the most important thing. And then I know when I, I'll schedule time to come back and clear my emails out an hour later down the road when I kind of get done the most important thing. Because, if you're in a Sproul, I'll leave you with, it's kind of, there's this whole thing that I've, I've definitely learned in this business, as a syndicator, as someone that does, find that puts together an apartment operators, apartment investment opportunities or any sort of opportunity like that. The best way you make, the way you make money in this business, you've got to find deals and find money. Going to find deals and find money and everything else is sort of noise. It’s all really important. You got to operate; you've got to do all their things right. But, that doesn't really, that's not driving revenue. So, if you want to focus on revenue, you've got to find deals or find money. So, I'm not talking to brokers, I'm not talking to my investors, you know, everything else is, not driving revenue. So, at the end of the day, I always try to remember that when I'm deciding, what do I spend my time on. Do I spend my time on this or that, that's always in the back of my mind? James: Got it. Got it. Is there anything else that you want to share in this podcast that you have not shared in hundreds of other podcasts that you have been? I should have [inaudible51:57]. Michael: I, I think, we do a pretty good job. So, I would, if you want to know more about me, I think really there's a couple of ways you can, the easiest way to find me, just get my company's website, which is a company spiadvisory, just go to our website www.spiadvisory.com. It's spi like spy advisory dot com. There's a contact us form, fill that out. I always happen to have in 10 or 15 minutes. A telephone call, listeners of the podcast. You guys are interested in maybe working with us or really the best way if you want to know more about me or if you listen to this podcast or [inaudible] or. So, you can listen to a dual capital podcast. So that's on iTunes or Stitcher or YouTube or anywhere you're probably listening to me right now. You can find the old capital real estate investing podcast. So, we have probably 300 episodes in the archive or more at this point. So, we do interviews with other people kind of similar to this format. As well as we do a little short one where my partner Paul interviews me and asked me one question a week and I answered about one specific topic. So, if you want to know anything about and just all-around apartment investing in your or some form or fashion. So you want to learn more about me, that's a good way to kind of-- I talk, I have a lot of stuff recorded that's out there that, but if you like this, you may, you may like that and hopefully can provide some, a little nub. It nuggets on different little talk topics, to listen to those. James: Yes. Yes. I learned a lot from you. I mean, listening to you from different, different podcasts throughout my apartment investing journey. So, I'm thankful for that. And I think that's it. Hopefully, all the audience and listeners got the value that they want to get or getting from Michael and myself. I think that's it. Thank you. Michael: All right. Thank you.  

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.  

In this episode, Jake and Michael discuss logging stacks in Laravel, ProxySQL and Galera Cluster, and state machines (which have started to grow on Michael) Thanks to this episode's sponsor, Andreas Hubenthal!

Michael Coté: @cote | cote.io | Pivotal | Software Defined Talk Show Notes: 00:54 - Pivotal 04:39 - Being a Professional Muller aka Analyst 11:08 - Iterative Development 32:54 - Getting a Job as a Professional Muller aka Analyst Resources: Pivotal Cloud Foundry GemFire Greenplum Pivotal Labs Wardley Maps Software Defined Talk Episode #79: From a vegan, clothing optional co-op to working with banks and oil companies - Coté's professional life, part 1 Software Defined Talk Episode #85: Being an analyst without being an asshole - Coté's professional life, part 2 RedMonk Transcript: CHARLES: Hello everybody and welcome to The Frontside Podcast, Episode #66. I am a developer, Charles Lowell at The Frontside and also host-in-training for 65 episodes. This is my 66th and I'm flying alone this week but we do have on the show with us a very special guest. Actually, the person who taught me how to podcast, I think it was about 10 years ago and he was like, "Charles, we should do this podcasting thing." I started my very first podcast with him and I still haven't figured it out. But his name is Michael Coté and he's a fantastic guy and welcome to the show, Coté. MICHAEL: Thanks for having me, Charles. It's great to be here. CHARLES: Now, what are you up to these days? You're over at Pivotal. MICHAEL: That's right. I work at Pivotal and probably people who are in the developing world know them for Spring. We have most of the Spring people. Then we also have this thing Pivotal Cloud Foundry. We're not supposed to call it a platform as a service but for matters of concision, it's a platform as a service that's the runtime that you run your stuff in. Then we also have a bunch of data products like GemFire and Greenplum and things like that. Then, 'openymously', if that's a word, we have Pivotal Labs. Now -- CHARLES: I think, it's eponymously. MICHAEL: Eponymously, yes. Now, you might remember Pivotal Labs as the people who use Chef Scripts to configure their desktops. Remember that? CHARLES: Yeah, I remember that. I was into that. MICHAEL: Yeah, in coincidental kind of way, the inspiration for the project Sputnik thing, which is coincidentally because now Dell Technologies owns Pivotal so all of that stuff has come for a full circle. I guess also since I'm intro-ing myself, I work on what we call the Advocate Team because we don't call them evangelists. No one likes to be called that I guess. I guess there's 12 of us now. We just hired this person, also in Austin actually McNorma who's big in the Go community and apparently can make images of gophers really well. I'm sure she does many other extraordinary things, not just the illustrator master. Everyone else basically like codes or uses the terminal but I do slides. CHARLES: Well, that's your weapon of choice, right? It's a more elegant weapon for civilized time or something like that. I'm going to look it up on Wikia. MICHAEL: Yeah, basically what we do on our team is we just talk about all the stuff Pivotal does and problems that we solve in the way people in an organizations like would think to care about our stuff. Most of what I do is I guess you call it the management consultant type of stuff. Since I have a background as an analyst and I used to work on corporate strategy and M&A at Dell so I have a vantage point in addition to having programmed a long time ago. If you're changing your organization over to be more agile or trying to devops, we would say cloud-native with a hyphen. How do you change your organization over what works and doesn't work? Most people in large organizations, they sort of pat you on your head. I'm sure you encounter this. That sounds really nice that we would be doing all of the good, correct ways of using computers but we're basically terrible and we could never make that happen here. Thanks for talking with us, we're going to go back and stew in our own juices of awfulness. You've got to pluck them out of that self-imposed cannibal pot there in the jungle and show them that they actually can improve and do things well. CHARLES: Would you say you feel like your job is being that person who shakes them away and can be like, "Good God! Get a grip on yourself!" MICHAEL: Sure. That's a very popular second or third slide in a presentation -- the FUD slide, the Fear of Uncertainty and Doubt slide where you're basically like, "Uber!" and then everyone just like soils their pants because they're afraid that are like Airbnb and Uber and [inaudible] and Google is going to come in and, as they say, disrupt their state industry. I try not to use the slides anymore because they're obnoxious. Also, most people in large organizations nowadays, they know all of that and they've already moved to putting on a new pair of pants stage of their strategizing. CHARLES: You've got the kind of the corporate wakeup call aspect of it but then it's also seems like a huge component of your job which is when you were at RedMonk, when you were at 451 and even to a lesser extent, it was Dell who was paid well to just kind of mull it over, like just kind of sit there and asynchronously process the tech industry, kind of like organizational yeast and let it ferment, kind of trying to see where the connections lie and then once you've made that presented, do you think that's fair? That's what sprung to mind when I heard you say like, "Yeah, we just kind of sit around and think about what is Pivotal and what does it do and what's it going," but like how do you get that job of like, "I'm just kind of a professional muller." MICHAEL: That's right. First of all, I think professional muller is accurate, as long as, I guess mulling is also for -- what's that thing you drink at Christmas that you put the little -- CHARLES: Mulled wine. Like low wine. MICHAEL: I can feel like that sometimes late at night. But having a job as an analyst, I was an industry analyst at two places for a total of about eight years or so. Then as you're saying doing strategy at a company, now what I do here, essentially a lot of what you do is very difficult. I know it sounds to people. You just read a lot of the Internet. You just consume a lot of the commentary and the ideas of things that are going out there and you try to understand it and then synthesize to use that cheesy word. Synthesize it into a new form that explains what it is and then finally, the consultant part comes in where you go and meet with people or you proactively think about what people might be asking and they say something like, "What does this mean for me? And how would I apply it to solve my problems?" I guess as an example of that -- I apologize for being a little commercial but these are just the ideas I have in my head -- Ford is a customer of ours and they also have invested in us which is kind of novel. We have GE and Ford invested in Pivotal and Microsoft and Dell Technologies as an interesting mix but anyways, they have this application called the Ford Pass Application. I drive a Ford Focus -- CHARLES: Like Subaru? But you do drive a Ford. MICHAEL: Yeah, because I don't care about cars. It's a bunch of nonsense. I see this app and basically the app, if you have a more advanced one, it might tell you your mileage and even like remotely start your car. But it doesn't really do that much. You have the app and it will tell you information about your car and where to park and it even has this thing where it links to another site to book a dealership thing, which is annoying. CHARLES: Why would you want to book a dealership? To buy another car? MICHAEL: Well because the Ford Focus I have is notorious for having transmission problems so you're like, "I got to go and take it into the dealer to get all this recall stuff taken care of," so wouldn't it be nice... I don't know if you've ever worked with a car dealer but it's not desirable. CHARLES: Yeah, it would be nice if they didn't charge $6000 for everything. MICHAEL: Right. It's a classic system of having a closed market, therefore that jacks up prices and lowers customer service usually. What's the fancy word if there is a negative correlation, if you were to chart it out? Like price is negatively correlated to your satisfaction with it. Kind of like the airline industry, not to bring up a contemporary topic. You pay a lot of money to fly and you're like, "This is one of the worst experiences I've had in my life," whereas you go to the dentist and get a root canal and you're like $20 co-pay. Loving it. [Laughter] MICHAEL: Anyhow, this Ford Pass application doesn't really do very much so what does that mean for what I was explaining. If you go look up and read about it, starting back in the late-90s, your extreme programming and then your Agile Software Development and your devops nowadays, one of the major principles is what you should do is ship often. Maybe you should even ship every week or every day. Don't worry about this gigantic stack of requirements that you have and whatever you should be shipping all the time and then we've trained ourselves to no longer say failing fast. That was a fun cheeky thing back in the late-2000s. CHARLES: Did we trained ourselves not to say that anymore? MICHAEL: I don't hear it very often. CHARLES: Man, I got to go scrub my brain. MICHAEL: Yeah, well this is why you consult with me every 10 years as I tell you the new things. CHARLES: Okay, here we go. We're going to have you on the podcast again. MICHAEL: That's right. You have this idea of like, "We should be releasing weekly," but then if you go to Ford, you're like, "What does that mean?" To shave the shaggy dog here, essentially the idea that they're shipping this mobile application that doesn't really do very much is an embodiment of the idea that they should be shipping more frequently. This may be a stupid example. It's not that it's not going to do very much like permanently but as I have witnessed, very frequently they add new features so Ford is in this cadence but there's this app that instead of working on an application for two years and having everything in it, they're actually releasing it on, I don't know if it's weekly but they're releasing it on a very frequent basis, which allows them to add features. What that gets you is all the advantages of a fast iteration cycle small batch thing where they can study this actually a good feature. They can do all your Lean Startup nonsense. That's a very like weird, perhaps example of how you explain to someone like a large car manufacturer like Ford, this is what devops means for you. Therefore, why you should spend a lot of money on Pivotal? Now that's the part that lets me pay my mortgage every month, the last bit there. CHARLES: Right so Pivotal builds apps. MICHAEL: Well, the Labs people build apps for you. CHARLES: I'm kidding Coté. MICHAEL: Yeah, they actually do. The Labs people are like a boutique of another boutique like ThoughtWorks is kind of a boutique but they're kind of a boutique-y version of ThoughtWorks. That probably is terrible as someone who markets for Pivotal to do that. Do you ever notice how political candidates never really name their opposition? Like you never really want to name your competition but anyways... CHARLES: Pivotal marketing are going to come crashing through your window. Everybody, if we hear them in the next five seconds -- well, I guess you can't call 911 because this is not live. MICHAEL: Yeah, that's true. The Labs people build stuff for you and then the part that I work, in the Pivotal Cloud Foundry people, they have the actual runtime environment, the cloud platform that you would run all that stuff. Plus all the Spring nonsense for your microservices and your Spring Boot. I understand people like that. CHARLES: So good for Ford, for actually being able to experience, either in the development and the joys and the benefits that come with it. But this is actually something that I actually want to talk about independently was as I kind of advance in my career, I find myself pushing back a little bit against that incredibly tight, iterative schedule. Shipping things is fantastic and it's great but I find so much of my job these days is just trying to think out and chart a course for where those iterations will carry you and there is a huge amount of upfront design and upfront thought that it is speculatory but it's very necessary. You need to speculate about what needs to happen. Then you kind of measure against what's actually happening but I feel that kind of upfront design, upfront thought, we had this moment we're like, "We don't need that anymore. Let's throw it all in the garbage." In favor of doing things in these incredibly tight loops and finding where's the clutch point, that kind of long range thinking and long range planning comes and meets with the iterative development. I have no idea. What's the best way for those to match up those long cycles and those short cycles? Where is the clutch play? MICHAEL: I'll give you two and a half, so to speak trains of thoughts on that. One of them is I think -- CHARLES: Two and half trains of thought, I like that. Can we get straight to the half train of thought? MICHAEL: Yeah, I'm going to start with the half, which is just taking all of your questions and putting periods at the end of them before I round up to answering the question. I think a lot of the lore and the learnings you get from the Agile world is basically from consultants and teams of consultants. Necessarily, they are not domain experts in what they're doing so their notion is that we're going to learn about what it is we're doing and we don't actually know we can't predict ahead of time because we're not domain experts so they almost have this attitude of like, "We'll just figure it out on the job." Let's say The Frontside gets hired to go work on a system that allows the Forest Service to figure out which trees to go chop down or not -- CHARLES: If you're the Forest Service, we are available to do that. MICHAEL: I'm guessing you don't have a lot of arborists who have 10 or 20 years of experience working there. CHARLES: No, we don't. MICHAEL: And so you have no idea about that domain so in doing an iterative thing, you won't be able to sit down and predict like everyone knows that when you send the lumberjacks out, they're going to need these five things so we're going to have to put that that feature on there. They need to be able to call in flapjacks when they run out. That's just what's going to happen so you don't know all of these things they need to do so you just can't sit down and cogitate about it ahead of time. Also this comes in from the Lean Startup where there's a small percentage of software that's actually done globally and the notion of a Lean Startup is that when you're doing a startup, you're never going to be determined what your exit is, how you cash out, whether that's building a successful long term company while you get sold to someone or whether you IPO, you're not going to able to predict what that business model is so you just need to start churning and not think a lot ahead of time. Now, the problem becomes, I think that if you are a domain expert, as you can do the inverse of all the jokes I was just making there, you actually can sit down and start to predict things. You're like, "We know we're going to need a flapjack service," so we can predict that out and start to design around that and you can do some upfront thinking. Now similarly, developers often overlook the huge amount of governance and planning that they do for their own tools, which I know you're more cognizant of being older or more experienced, as they like to say. But basically, there's a bunch of, as we used to call it when I did real work and develop stuff, iteration zero work like we're going to need to build a build system, we're going to need a version control. You actually do know all these things you're going to need so there are all the things you can plan out and that's analogous to whatever domain you're working in. Sometimes, at least for your toolchain, it is worth sitting down and planning out what you want. Now, to hold back the people who are going to crash in my window, one of the things you should consider is using Pivotal Cloud Foundry. That's probably something you should cogitate on ahead of time. CHARLES: I think they're going to crash through your window and give you a Martini, if the marketing ninjas are going to do that and if you mention them in a positive light. MICHAEL: You know, it's 10:52 Central but if we were in London, it would probably be an appropriate time so we'll just think about that. Now, on the other hand, you don't want to go too overboard on this pre-planning. I'll give you an example from a large health insurance company that I was talking with recently. They had this mobile app -- it's always a mobile app -- that had been languishing for 15 months and it really wasn't doing anything very interesting. It was just not working well and they could never release it. This is a classic example of like, "We took a long time to release a mobile app and then we never released it again and then it blows." It's not achieving all of the business goals that we wanted. Mostly, what a health insurance company -- I've talked with a lot of the health insurance companies -- want with their mobile app is at least two things and probably many more but these would be the top of the list. One, they want their customers, their users to look up what their health insurance is, figure out doctors they can go to, the basic functioning that you expect from your health insurance company. And two, they want to encourage their customers to do healthy behaviors because if you think about it as a health insurance company, health insurance in my mind is basically like this weird gamble of like, "I'm gambling on the fact that you are going to be healthy," because then I pay out less to you and you just give me money so the healthier that your users can be, the more profit you're going to make. That's why they're always trying to encourage you to be healthy and stuff like that. The mobile app was not achieving, at least these two, if not other business goals they have. They basically were rebooting the effort. The way they started off is they had -- I don't know how many inches thick it was -- a big, old stack of requirements and the first few iterations, the product team was working on it and talking with the business analyst about this and going over it and what they sort of, as we were calling Pivotal Labs the product owner but the person who runs the team, realize is like -- to cut a long story short -- "This is kind of a waste of time. We shouldn't just prioritize these 300 features and put them in some back road and execute on them because these are the same features that we based the more abundant application on, we should probably just start releasing up the application," kind of like the FordPass app. That said, they did have a bunch of domain experience so they had a notion of basically what this app was going to do and they could start planning it out but they figured out a good balance of not paying attention to, as Martin Fowler used to call it the almighty thud, of all the requirements. What they ended up doing is they basically -- CHARLES: What's the almighty thud? MICHAEL: You know, he's got some bleaky or whatever. It's basically like we started a project and I think it's from 2004 and someone FedExed me about 600 pages of an MRD or whatever and I put it down on my table and it made a loud noise so he calls that the 'almighty thud', when you get this gigantic upfront requirement thing. What happened in this health insurance thing is they stopped listening and talking with those people and they kind of like chaff them out, not like when your rub your legs together but they kind of distracted them to that fact but eventually, they just got them out of the cycle and they started working on the app. Then lo and behold, they shipped it and things are working out better now. CHARLES: Hearing what you're saying and kind of thinking it over, I think if you're going to have an almighty thud, what you really want is you want all that upfront research and all that upfront requirements gathering or whatever, not necessarily to take the form of a set of features or some backlog of 300 things that the app 'needs' to do or 'should' do but just a catalogue of the problems, like a roadmap of the problems. MICHAEL: Exactly. CHARLES: You know, that actually is very valuable. If it's like, "These are things that are true about our users and these are the obstacles that they face. If we do choose that we want to go from Point A to Point B, where we are at Point A, then we actually have a map of what are the things that are sitting in front of that and what are the risks involved." It's like if you got -- you played, you're from my generation, you play the Oregon Trail, right? MICHAEL: Yeah. "You have dysentery." CHARLES: Right. I don't know where I'm going with this analogy but my point is developing that app is like going from Kansas City to Portland. But the thing about software is you don't necessarily have your corn meal. You don't need to say like, "We're going to need six pounds of cornmeal and we're going to need these wagons and we're going to need these mules," because this is software and you can just code a mule if you need it. But you might not need a mule, if the rivers are not in flood... I don't know. Like I said, I don't know where I'm going with this analogy. But do you see what I'm saying? The point I'm trying to make is that having the map of the Rockies and where the passes are is going to help you. MICHAEL: Yeah, this is probably where I'm supposed to expertly rattle off what Wardley maps are and how they help, which is fine. I think that's a great tool. There's this guy Simon Wardley and he's actually a great contemporary philosophizer on IT-led strategy. I think he works for CSC who no longer owns mercenaries but they used to -- Computer Science Corporations. I think they own a little bit of HP Services Division but he works for some think tank associated with CSC and he has got a couple of OSCON talks on it, where it's called a Wardley map and it's a way that you start figuring out what you're saying, which is to say your company's strategy. Using your front metaphor of the era of tall hats, if you remember that other movie, if you're on the Oregon Trail, broadly your strategy is -- and people get all up in your face about the difference between a plan and a strategy and we'll just put mute on them and edit them out of the audio because they're very annoying -- CHARLES: We'll call it an approach. MICHAEL: That's right. Your plan or your strategy -- and pardon me if I use these phrase free and loosely and everything -- is you would like to get to Oregon and you would like to live there and maybe grow apples or start a mustache wax company or some donuts, whatever it is you do out there once you get to Oregon and their strategy is -- what are the assets that I have. I have a family, I have some money and I also know some people who are going there so I'm going to buy a stagecoach and a mule, then I'm going to kind of wangle it out and we're going to go over there. Also, part of our strategy is we're going to go through the northern pass because we're used to winter versus the southern pass, which isn't the Oregon Trail because reasons. Maybe Texas isn't part of The Union yet so I don't want to deal with the transition between whatever that weird Texas thing down there -- CHARLES: The desert, there's the southwest and the desert. MICHAEL: I don't have the capabilities to survive in a desert so I need to go to the north and hopefully I won't be like that movie and have a grizzly bear rip up my backside and everything. You sort of put together this plan. Now going back to what you would do in IT world is to your point, someone does need to define what we would call the business value or the strategy, like what you want to do. Looking at the Ford thing, what Ford wants to do is they do cogitating thing ahead of time and they're like, "We manufacture cars," and you've got electric cars and Uber. That's where the scarce light comes in. In the future, who knows that people will still buy cars? It might be like that I-Robot movie where all the cars are automated and you just go into one. As a company, whose responsibility is to be as immortal as possible, we need to start making plans about how we can survive if individuals no longer buy cars. Let's do that. This is a huge upfront notion that you would have and then that does trickle down into things like my Ford thing -- I'm kind of speaking on their behalf -- if we have a direct connection with people, maybe eventually we introduce an Uber-like service. You can just check-out a Ford car. Then maybe this and maybe that. It's the strategy of how do we set ourselves up to do that. Now, I think the Agile people, what they would go for is it's really good to have that upfront strategy and you'll notice that in a lot of lean manufacturing in Agile talk, no one ever talks about this stuff, much to my extreme annoyance. They don't ever talk about who defines the strategy and who defines that you're working on this project. That's sort of left as an exercise to the reader. The Agile people would say like, "The implementation details of that are best left to the development team in an Agile model." Just like the developers are always arrogantly are like, "Hey, product manager. How about you f-off about how I should implement this? I am the expert here and let me decide how I'm going to implement the feature that you want for me." It's kind of like that rushing dolling down of things. To the development team, you worked on some, what was it? Band frame wire thing, a long time ago? It was basically like, "We don't know it. Maybe this is not the case. Let's pretend like it was." We don't know exactly how you're going to implement this stuff but our goal is that there's bands and they need sides and ways of interacting with their users so let's just figure out what that looks like but they had that upfront idea of ways that they were doing things. CHARLES: Let's start walking. MICHAEL: To add on some more. There's another edge case that you're making me think of, which is a good way of thinking through almighty thuds versus how much planning you have and that's government work. Government work that's done by contractors and especially, military contracting work. What you notice in government work is they have, seemingly way too much paperwork and process. They literally will have project managers for project managers and the project managers have to update how the project is going and they reports. If they don't do the reports correctly, their contract is penalize and you might even get fired for doing it. If anyone stops and says while the software is working, they were like, "No, no, no. don't be naive. It doesn't matter if the software is working or not, if we don't fill up the project report, we're fired." Until someone like yourself or me, it's just like your head explodes and you're like, "But working software, not a concern." In that case, it actually is part of the feature set, part of the deliverable is this nauseating amount of project reporting and upfront requirements, which has this trickle-down effect of annoyance but that's what you're getting paid for so that's what you do and if you want to make yourself feel better about it. I don't know how it is in the rest of the world but in the US, basically we think the only person worse than maybe, Lucifer is the government. I don't know why this comes about. We enjoy the fruits of the government all the time but for some reason, we just think they're awful. Whenever we give money over the government, we want to make sure that they're spending it well and if they're not corrupt and they don't hire their entire family to help them run the government and make sure that they're making extra money globally in their businesses, I wouldn't know anything about that. But essentially, you want to make sure there's no corruption so transparency is almost more important than working software. The way you achieve that transparency is with all this crazy documentation. CHARLES: Here's the thing. I agree the transparency is fantastic but nothing is more transparent than working software. Nothing is more transparent than monitored software. Nothing is more transparent than software whose, by its very nature is radiating information about itself. You can fudge a report but you can't fudge a million happy users. MICHAEL: Don't get me wrong. I'm not saying that the way that things currently operate is the ideal state. I'm saying that that desire for transparency has to be addressed and for example, using your example, let's say you were delivering working software but you were also skimming 20% off the top into some Swiss bank account -- you're basically embezzling -- and then it turns out that you need 500 developers but you only actually had 30 developers. There was corruption. The means even though the ends, even though the outcome was awesome, the means was corrupt so that's the thing in a lot of government work that you want to protect against. I just bring that up as an edge case so a principle to draw from that, when it comes to almighty thudding is like sometimes, that is part of the deliverable. We would aspire in our fail, fast, Agile world to not have a bunch of gratuitous documentation as part of the deliverable because it seems like a waste. It would be like every morning when you battle with your kids to get their shoes on, you had to write a two-page report about how you're getting ready to go to school stuff with your kids was going. As a parent you would be like, "I don't need that." However, maybe if you were like an abusive parent and it was required for you to fill out a daily status report for you to retain the parentship of your kids, maybe it would be worth of your time to fill out your daily status report. That was an awfully depressing example there. CHARLES: Let's go back to the Oregon Trail. What I'm hearing is that -- and we will take it back to the Oregon Trail -- you also need to consider, as were saying, you have some sort of strategy which is we want to go sell apples and moustache wax. But what we're going to do is we're just going to start walking, even though we don't have a map. But obviously, if you send out scouting missions, like you know where you're going, you know the West Coast is out there somewhere, you start walking but the stakes determine how much of your resources you spend on scouting and map drawing -- MICHAEL: Yeah. My way of thinking about strategy and again, people strategy is this overloaded word. But my way of thinking about strategy is you establish a goal: I would like to go to the West Coast. Now, how you figure that out could be a strategy on its own, like how did you figure out you want to go to the West Coast. But somehow, you've got to get to a prime mover. Maybe those tall hat people keep beating me up so I want to go to the West Coast. I want to go the West Coast is the prime mover. There's nothing before that. Then you've got to deal in a series of constraints. What capabilities do I have, which is another way of saying, what do I not have? And what's my current situation and context? On the Oregon Trail thing, you might be like, "I have a family of seven. I can't just get a horse and go buy a pack of cigarettes and never show up again." I guess I could do that. That's probably popular but I, as an individual have to take this family of six other people. Do I have the capabilities to do that? How could I get the cash for it? Because I need to defend against all the madness out there, I'm going to need to find some people to meet with. You're thinking and scenario planning out all of this stuff and this gets to your point of like, "If you're going to Oregon, it probably is a good idea to plan things out." You don't want to just like the next day, just figure it out. [inaudible] tell a joke. It's like, "Why do they sell luggage at the airport? Is anyone is just like, 'Screw it. Pack a clothes and we'll sort it out at the airport.'" It's an odd thing to sell at the airport. But you do some planning and you figure out ahead of time. Now, to continue the sort of pedantry of this metaphor, the other characteristic of going to the Oregon Trail, unless you're the first 10 people to do it is hundreds, if not thousands of people have done it already so you kind of know what it's going to be like. It's the equivalent, in a piece of software, if they were like, "This application is written in COBOL. I want you to now write it in --" I don't know, what are the kids do nowadays? Something.io? I-want-you-to-write-this-in-a-hot-new-language.io and basically just duplicate it. You're going to still have to discover how to do things and solve problems but if the job is just one-to-one duplicate something, then you can do a lot more upfront planning for it. CHARLES: While you're doing it, making the Uber and Airbnb. MICHAEL: Yes. CHARLES: Then you're done. MICHAEL: I think that's the truth and I want to put it another way. We used to be down here in Texas, the way we run government here is just lovely but we used to have this notion of a zero-budget, which is basically like, "Assume I'm going to give you nothing and justify every penny that I'm going to give you." I think that's a good way to think about defaults. I mean, about requirements is default is you don't need any and only get as many requirements as you need. If you're building tanks or going to the Oregon Trail, you might need a lot of requirements upfront that are actually helpful. CHARLES: But like a suit, you're just going to just strike out naked walking with. MICHAEL: That's probably a bad idea unless you -- CHARLES: Yeah, that is a bad idea but that's the bar but what happened if I were to do that? I might make it for 20 miles. MICHAEL: And build up from there and then have all the requirements that you need. I'm sure when Lewis and Clark went they were like, "We're going to need a quill and some paper and maybe a canoe and probably some guns and then let's see what happens." But that was a whole different situation than going to establish Portland. CHARLES: That was an ultimate Agile move. That was a pretty Agile project. They needed boats, they built them but they didn't leave St Louis carrying boats. MICHAEL: Right and they also didn't have a family of six that they needed to support and all this kind of stuff, right? CHARLES: Uhm-mm. MICHAEL: There was a question you asked a long time ago, not to steal the emceeing for you -- CHARLES: I would say, we need to get onto our topic -- MICHAEL: Oh, yeah. Well, maybe this is a good saying, what you're asking is, "How do you get this job?" and I don't think we ever addressed that. CHARLES: Yeah, that's a great question. You said you had to consume a lot of stuff on the internet. MICHAEL: Right. That's definitely how I do the job but I think how I get the job, there's an extended two-part interview with me on my Software Defined Talk Podcast Episode, available at SoftwareDefinedTalk.com, where I talk about my history of becoming an analyst and things like that but the way it happened is I don't have any visible hobbies, as you know Charles except reading the stuff in the Techworld. I would read about what's happening in the Techworld and would blog about it back in 2004, 2005 and I was discovered as it were by the people at RedMonk. I remember for some reason, I wrote some lengthy opinion piece about a release of Lotus Notes. I don't know why but that was a good example. This is back when all of the programming job were going to be off shored and I thought it was imminent that I was going to lose my job. I was looking for a job and I shifted over to being an analyst. That like the way that you get into this kind of business is you establish, there's two ways -- CHARLES: You established expertise, right? MICHAEL: Yeah, which is like always an unhelpful answer because it's sort of like, I was joking about this in another podcast, it's like Seth Godin's advice about doing good marketing, which is the way you do good marketing is you have an excellent product. If you have an excellent product that everyone wants to buy, then your marketing will take care of itself. I think if I'm asking how to market, I'm trying to figure out how to market a bad product. That's really what people want. CHARLES: That's also just not true. That's just like flat ass not true. That's a lie. MICHAEL: I mean, people who want to know how to diet better are not already healthy and dieting successful. You can't start with the base assumption of things are going well. CHARLES: Well, it is true. I like to think that we have an excellent product. We sell an excellent product but the thing is you can just sit on your excellent product all day and you have to tell people about it. If you want them to come sample it and try, maybe eventually buy it like the advice that you just need an excellent product. I'm amazed at anyone who can actually can say that with a straight face. MICHAEL: Well, he only writes like 150-word blogpost. I think his point is that you should aspire to have a unique situation and then marketing is easier. Similar with everyone's favorite example like an Apple or like a Pivotal or a ThoughtWorks. We eat all three of us and yourself as well, once someone gives you the benefit of the doubt of listening, you can explain why what you have is not available anywhere else. CHARLES: What it boils down to is if you want to easily differentiate, allow people to differentiate your products from others, then be different. That's fair. I'll give -- MICHAEL: To summarize it, it begets more of the tactics of how one gets a job like I do. What's the name of the short guy in Game of Thrones? 'Tyrian'? 'Tyran'? 'Tyron'? CHARLES: Tyrion. MICHAEL: At one point, Tyrion is like, "I do two things. I know things and I drink," so that's how you get into this type of business as you establish yourself as an expert and you know things. Now, the third thing which I guess Tyrion was not always required to do is you have to be able to communicate in pretty much all forms. You need to be good at written communication, at verbal communication, at PowerPoint communication, whatever all the mediums are. Just knowing something is not very useful. You also have to tell people these things. CHARLES: I think Tyrion is pretty good at that. MICHAEL: Yeah, that's true but he doesn't ever write anything. There is no Twitter or things like that. CHARLES: I feel like [inaudible] been a pretty big deal in the blogosphere. MICHAEL: Sure, no doubt. The metaphor kind of breaks down because the lattice for the continuing counterarguments do not exist in the Game of Thrones universe but whatever. CHARLES: They've got the ravens. That's like Twitter and it's bird. MICHAEL: That is true. Knowing how to deploy a raven at the right time, with the right message is valuable. CHARLES: We buffer up our ravens so that they fly right at eleven o'clock. MICHAEL: That's true. I could be convinced otherwise. CHARLES: That's why they arrived both at 6PM in the Westeros -- MICHAEL: I guess true to the metaphor of a tweet, most of the communications in Game of Thrones is either, what are they called? Little Birds? That the [inaudible] always has and then the Big Birds. You've got to tweets and the blogs. CHARLES: This is like it's nothing but Twitter. MICHAEL: Exactly. You got to really communicate across mediums. Now that the other thing that's helpful and you don't necessarily have to do this but this is what I think gets you into the larger margin. The more profitable parts of the work that I do is you have to be able to consult with people and give them advice and consulting is largely about, first figuring out the right opportunity to tell them how they can improve, which usually is it's good if they ask you first. I don't know about you but I've found that if you just pro-offer advice, especially with your spouse, you're basically told that you're a jerk. CHARLES: Well, it'd be like a personal trainer and walking around me like, "Hey man. Your muscle tone is kind of flabby. You got to really work on that." MICHAEL: The line between a good consultant and being overly-explain-y is difficult to discern but it's something that you have to master. Now, the other way you consult with people is you study them and understand what their problems are and you're sympathetic to them and I guess you can be like a British nanny and just scold them. That's a certain subset of consulting. CHARLES: Don Rickles of consulting? MICHAEL: That's right. You just help them understand how all of this knowledge that you have applies to them and hope solve their problems like the FordPass thing. When I went from being a developer to an analyst, it was a big risk to take on. I think I probably took like a $30,000 pay cut and I went from a big company health insurance to being on a $10.99 and buying your own health insurance which a whole other conversation. We talked about that every now and then but like it's a risky affair. It's not a promotion or even a lateral move. It's just an entirely different career that you go into. Then you talk with people a lot. As an analyst, you're constantly having to sort out the biases that you have with vendors who want to pay you to save things versus end-users who want to hear the truth. You can't really see a lot of Gartner and Forrester work but the work that you can see publicly from people like RedMonk, it's pretty straightforward. CHARLES: Yeah it is and whatever they did, a piece that was for one of their clients, there was always a big fat disclaimer. MICHAEL: Now, the other thing I would say is what I've noticed -- not to be all navel-gazing -- about myself and other people who are successful at whatever it is I do is there's two things. One, they constantly are putting themselves out there. I remember and this is probably still the case. This is probably all in Medium. There's probably a Medium post every quarter that's like, "If you're a developer, how do you give more talks. What your first conference talk?" Basically, the chief advice in there, other than bring business cards and rehearse is essentially like you just got to get over that idea of self-promotion. You basically have to self-promote yourself incessantly and do all those things that you find nauseous and be like, "Me, me, me," which is true. You've got to get over that thing. If you're like me and you're an introvert who actually doesn't really like that many people, except a handful of people like yourself that I'm friends or family with, you have to put on the mask of an extrovert and go out there and do all this extrovert stuff or you'll fail. I shouldn't say you'll fail, you won't increase your overall comp and margin and everything. You'll basically bottom out at about $120,000 a year or so because that's about as much as anyone will pay for someone who just write stuff but doesn't actually engage in the world and consult. You've got to do that. Then the other consequence of that is you always have to be trying out new types of content and mediums like here we are in a podcast. Long ago, you and I, in 2005 or 2004 -- CHARLES: You got me to sign up for Twitter. MICHAEL: Yeah, like we started off a podcast because I remember hearing the IT conversation stuff and John [inaudible], who is a big inspiration for me, a role model, I remember he was just trying out podcast and I was like, "All right. I'll try that out. That looks like fun," and then here we are. CHARLES: I remember you tried out the podcast and you're like, "Let's go into your backyard or my backyard. Let's talk about software for 15 minutes." I remember that very clearly and that was 12 years ago. Then I remember also like with Twitter, you're like, "Now, you should sign up for this Twitter thing," and I remember I did and that's when it was still coming through SMS on your phone and like "I'm walking around Teatown Lake. I'm going to get tea." And I was like, "Oh, my God. This is so fucking stupid." But little did I know, you were actually signed me up to a service that changed my life. MICHAEL: Yeah, it was the stage direction era of Web 2.0 where you're just supposed to give people your status updates, instead of your searing insights. But yeah, you've tried it all these different mediums because again it goes back to your job is to communicate. You need to tell people things that you know. CHARLES: Coté, what is your strategy on virtual reality? MICHAEL: My strategy in virtual reality. Well, you've caught me, Charles because I'm not into that. You remember when Time Magazine had that Chinese lady who was like a... Not Frontside. What was the name of the big virtual reality thing that was big...? CHARLES: Second Life. MICHAEL: Second Life, who is a Second Life millionaire. CHARLES: Yeah, she had armies of people. She was mining some resource in Second Life and then reselling it and she made a lot of money. MICHAEL: I don't really like visual mediums so as Marshall McLuhan would say 'hot mediums'. I guess I like the cool mediums. That's not my thing. That's where my principle fails. Maybe I'll do that one day. CHARLES: This is pretty hot. This medium is pretty like -- MICHAEL: I think maybe audio broadcast is hot. I'm just pretending like I know. This is another trick that you can deploy that my wife has picked on is most of the time, 78% of the time, I actually have no idea what I'm talking about. I just know words. I don't actually know Marshall McLuhan theory. I read that one book a long time ago and I remember that scene in Annie Hall where he gives a little diatribe to whatever the Woody Allen character is. That's the extent of my Marshall McLuhan knowledge. CHARLES: Was Marshall McLuhan actually in Annie Hall? MICHAEL: He was. CHARLES: Don't sell yourself short, Coté. MICHAEL: Sure. CHARLES: You know things and you drink so let's talk about that second aspect because I know that you like me whole tearing up as a role model. MICHAEL: I should say since we're both happily married, except for the third thing that he does which he -- CHARLES: Oh, right. MICHAEL: Another unmentionable word. He too freely hangs out with the ladies. CHARLES: Right, anyway aside from that, throughout doing all this stuff, you keep a very, very chill perspective on things. I feel like the tech world gets so wound up around itself and it gets so tight and so stressed about its own problems. There's constantly wars in JavaScript and before we were in the JavaScript world, we were warring in Ruby. I remember when Twitter went over to using Scala instead of Ruby. Oh, my goodness, it was terrible times. I feel like there's a lot of stress and yes, you want to take it seriously but I feel like you've always been able to maintain an even-keeled perspective about technology which actually allows you to commentate on it effectively and intelligently because you're able to unwind yourself from the squabbles of the day and see maybe a bigger picture or something like that. MICHAEL: That's nice of you to characterize me to use a -- is that a hanging, dangling participle there, when you're in [inaudible]? CHARLES: Yeah, I don't know. MICHAEL: I think that's also just a function of being old. CHARLES: So are you actually not stressed or is it just part of your persona of being an extrovert or something like that? MICHAEL: About the tech world? No, I'm not stressed about that. As you kind of outlined, especially I was not sent the demographics for the show, which is fine. I'll overlook that but I'm guessing that that was a joke. CHARLES: Who got some designers, developers -- MICHAEL: I'm guessing there's a lot of people who actually are on the frontlines of working on software. I think this happens also in the white collar set. But essentially, it's really easy to slip into over allegiance to something and I don't know what rhetorical fallacy this is but it's the bias of over allegiance to something, you get all wrapped up in defending a tool over something and the virtue of it, whether it's Emacs and vi. I'm sure reactive people, whatever that is, have all sorts of debates. The thing is when you're heads down on this stuff, you don't realize how petty all those discussions are. It's not so much that it's a waste of your time but it's just one battle in an overall war that you have. It's good to have opinions and figure things out but you should just relax about it because the more angry and emotional you get, you're going to make a lot of mistakes and decision and problems. I wish I had an example of this but this is one of those things that intuitively as you ages as developer, it's not like your literal age. It's just the amount of time you've been developing software. You could be a 25-year old who's been developing software for 10 years and you would probably get this notion but you just realize that stuff changes and you just learn the new things. It's kind of not a big deal like one day, you're going on and on about how vi is great and the next day you're using that Atom editor and then whatever and you just use the tool that's appropriate and it's annoying when you're younger and people are applying Hacker News with like, "You should use the tool that is appropriate," which is a stupid reply. That's just kind of how it is. Also the other thing, in the more white collar world, as an analyst, especially doing strategy for a company, you can't be biased by things because then you'll make poor decisions as an analyst. Also when you're doing strategy in M&A that result in bad business outcomes so you actually be very unbiased about things. CHARLES: I think it applies in everything. If you get too emotionally invested in one particular approach in software, literally in anything you do, it does result in bad outcomes. The problem is you may not actually realize the consequences of those bad outcomes far down the road from the poor decision that you made that caused you that outcome so you might not necessarily connect it back. MICHAEL: Yeah, and I keep bringing this up but I think another effect of being calmer in your nerd life is having something that you do outside of your programming life, which is either having a family or having hobbies or something like that but you know -- CHARLES: Or having a wild turkey. MICHAEL: Yeah but you've got to have something, a reason to stop thinking about your tech stuff or it'll consume you. I suspect when you see the older graybeards who go on and on about open source and they're very like... I don't know. What's the word? They're very over the top and fervent about tech stuff. It's probably because like me, that's their only hobby and they haven't figured out how to how to control it. It becomes part of their identity and it defines them and then they're down this twisty, turny path of annoyance to the rest of us. CHARLES: Again, don't sell yourself short, Coté. You've got plenty: you love the cooking and eating and the drinking so close this. Do you have a favorite drink that you've been mixing lately? MICHAEL: No. CHARLES: Or any kind of favorite food because every time I go over to your house, even if we're having pizza, there's always a nice hors d'oeuvre or something to drink, something to tweak that appetite for something special. I kind of wondering if there's anything that you're into. MICHAEL: I have some very basics. One, I don't know if I drink a lot or drink a little. I think the science on this is very confusing, kind of like drinking coffee. I try to drink less. I basically go back to the basics of I want cheap wine that's not terrible. That's what I'm always trying to discover. I think I've also started to rediscover just straight vodka. That's pretty good. I think that fits into the grand scheme. CHARLES: I just can't do it. I can't follow you there. I need some, what do they call them? Gin florals? I can drink gin -- MICHAEL: Oh yeah, that's good too. CHARLES: That's about as close as I can get to straight vodka. MICHAEL: And then food-wise, I just wrapped up finally figuring out how to cook fish and chicken without it tasting terrible. CHARLES: Oh! What's the secret? MICHAEL: No, I want to put a disclaimer out. There's a EULA on this. I'm not responsible for anything bad that happens but what you want to do is cook at about 10 degrees less than you're supposed to. A chicken is supposed to be 165 degrees but you take it out of the pot when it's like 150 or 155 on another part of the pan. Fish is supposed to be 145 degrees but you take it off when it's about 130 or 135. It cooks a little bit more but these guidelines to cook your meat to that thing, it ruins it. Also you can brine a chicken and things like that. Also, what you want to get is an instant meat thermometer. One of those that you can just poke in your meat so you're always checking the temperature. That's what I've been working on. CHARLES: I have a theory about that. I will laid out really quickly, maybe it's just because the juices. It's the juice that so yummy there so you want those to be locked in and boiling but not boiled away. I'm going to give that a try on my -- MICHAEL: And fish is particularly tricky. CHARLES: Because all it takes is five minutes. Sometimes, it's two minutes and 30 seconds too long and you ruin the fish. MICHAEL: Then the next theory I want to try out is that you can actually fry fish in pure butter but you've got to paper towel it off afterwards because too much butter ruins it. But I think if your paper tower it off like you do grease off of bacon, then I think that's how you achieve -- not as good as a restaurant because in a restaurant, they have those butane torches and the crisp it up on the outside or reverse sear or whatever -- CHARLES: Is that what they do? Do they just run their torch right over the fish? MICHAEL: That's all I can figure. They might also be professional cooks who know how to cook things. CHARLES: They might have done it a lot of times. They might have had someone like Gordon Ramsay yelling at them constantly. "I can't believe this fish is so terrible. Waah!" All right. I'm going to give the fish a try. I'm going to give the chicken a try and I'm going to give everything that you just spent the last hour talking about, also a try. MICHAEL: Well, thanks for having me on. It's always fun to have a show with you. I just posted yesterday our second revival of the Drunken Retired Podcast, which is over at Cote.show. It's just '.show'. URLs are crazy nowadays. I guess the only self-promotional thing I have is I'm over in Twitter @Cote. It'd be nice if everyone should just go follow me there because I'm always very sad that I don't have enough followers and they'll never verify me. I don't understand what the problem is. I'm clearly me. Then I mentioned earlier, the main podcast that I do is Software Defined Talk, which is at SoftwareDefinedTalk.com and you should come spend a lot of money on Pivotal stuff. I'm happy to tell you all about that. Just go check out Pivotal at Pivotal.io CHARLES: I guess that is about it. We will talk to everybody later. Thank you for staying tuned and listening to this supersized episode. Come check us out sometime!

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]