Podcast appearances and mentions of steve absolutely

Arguments for Sand Filters**1. Ease of Maintenance:Wayne: One of the biggest advantages of sand filters is how easy they are to maintain. Unlike DE filters, which require frequent backwashing and the messy task of handling DE powder, sand filters only need backwashing every few weeks. It's a straightforward process that doesn't involve dealing with fine powders.Steve: And when it comes to cartridge filters, you need to remove and clean the cartridges regularly. This can be a time-consuming task, especially if you have a large pool. With sand filters, you just backwash and you're done.2. Cost-Effectiveness:Wayne: Sand filters are also more cost-effective in the long run. While DE and cartridge filters might provide finer filtration, they come with higher costs for replacement media and cartridges. Sand media lasts several years before needing replacement, making it a more economical choice.Steve: Plus, DE filters require you to keep buying DE powder, and cartridge filters need new cartridges every season or two. With sand filters, the initial cost might be higher, but you'll save money over time on maintenance and replacement parts.3. Durability and Longevity:Wayne: Sand filters are built to last. They have fewer moving parts compared to DE and cartridge filters, which means there's less that can go wrong. This makes them a reliable choice for pool owners who want a filter that will stand the test of time.Steve: Absolutely. The sand media itself is incredibly durable, lasting anywhere from 5 to 7 years before needing replacement. In contrast, DE grids can wear out quickly, and cartridges can become clogged or damaged, requiring more frequent replacements.4. Simplicity in Design:Wayne: The simplicity of sand filters is another major plus. Their design is straightforward, making them easy to troubleshoot and repair. If something does go wrong, it's usually a simple fix.Steve: This simplicity also means fewer opportunities for things to break down. DE and cartridge filters have more complex designs, which can lead to more issues over time. With sand filters, you get a robust and reliable system that's easy to manage.5. Environmental Considerations:Wayne: Another point in favor of sand filters is their environmental impact. DE filters require the disposal of used DE powder, which can be harmful to the environment if not handled properly. Cartridge filters also generate waste with discarded cartridges.Steve: Sand filters, on the other hand, have minimal environmental impact. The sand can be replaced and disposed of easily, and there's no need for harmful chemicals or materials. It's a more eco-friendly option for pool owners who are conscious of their environmental footprint.Wayne: And as always, happy swimming! Support the Show.Thank you so much for listening! You can find us on social media: Facebook Instagram Tik Tok Email us: talkingpools@gmail.com

We are running an end of year survey for our listeners. Let us know any feedback you have for us, what episodes resonated with you the most, and guest requests for 2024! RAG has emerged as one of the key pieces of the AI Engineer stack. Jerry from LlamaIndex called it a “hack”, Bryan from Hex compared it to “a recommendation system from LLMs”, and even LangChain started with it. RAG is crucial in any AI coding workflow. We talked about context quality for code in our Phind episode. Today's guests, Beyang Liu and Steve Yegge from SourceGraph, have been focused on code indexing and retrieval for over 15 years. We locked them in our new studio to record a 1.5 hours masterclass on the history of code search, retrieval interfaces for code, and how they get SOTA 30% completion acceptance rate in their Cody product by being better at the “bin packing problem” of LLM context generation. Google Grok → SourceGraph → CodyWhile at Google in 2008, Steve built Grok, which lives on today as Google Kythe. It allowed engineers to do code parsing and searching across different codebases and programming languages. (You might remember this blog post from Steve's time at Google) Beyang was an intern at Google at the same time, and Grok became the inspiration to start SourceGraph in 2013. The two didn't know eachother personally until Beyang brought Steve out of retirement 9 years later to join him as VP Engineering. Fast forward 10 years, SourceGraph has become to best code search tool out there and raised $223M along the way. Nine months ago, they open sourced SourceGraph Cody, their AI coding assistant. All their code indexing and search infrastructure allows them to get SOTA results by having better RAG than competitors:* Code completions as you type that achieve an industry-best Completion Acceptance Rate (CAR) as high as 30% using a context-enhanced open-source LLM (StarCoder)* Context-aware chat that provides the option of using GPT-4 Turbo, Claude 2, GPT-3.5 Turbo, Mistral 7x8B, or Claude Instant, with more model integrations planned* Doc and unit test generation, along with AI quick fixes for common coding errors* AI-enhanced natural language code search, powered by a hybrid dense/sparse vector search engine There are a few pieces of infrastructure that helped Cody achieve these results:Dense-sparse vector retrieval system For many people, RAG = vector similarity search, but there's a lot more that you can do to get the best possible results. From their release:"Sparse vector search" is a fancy name for keyword search that potentially incorporates LLMs for things like ranking and term expansion (e.g., "k8s" expands to "Kubernetes container orchestration", possibly weighted as in SPLADE): * Dense vector retrieval makes use of embeddings, the internal representation that LLMs use to represent text. Dense vector retrieval provides recall over a broader set of results that may have no exact keyword matches but are still semantically similar. * Sparse vector retrieval is very fast, human-understandable, and yields high recall of results that closely match the user query. * We've found the approaches to be complementary.There's a very good blog post by Pinecone on SPLADE for sparse vector search if you're interested in diving in. If you're building RAG applications in areas that have a lot of industry-specific nomenclature, acronyms, etc, this is a good approach to getting better results.SCIPIn 2016, Microsoft announced the Language Server Protocol (LSP) and the Language Server Index Format (LSIF). This protocol makes it easy for IDEs to get all the context they need from a codebase to get things like file search, references, “go to definition”, etc. SourceGraph developed SCIP, “a better code indexing format than LSIF”:* Simpler and More Efficient Format: SCIP utilizes Protobuf instead of JSON, which is used by LSIF. Protobuf is more space-efficient, simpler, and more suitable for systems programming. * Better Performance and Smaller Index Sizes: SCIP indexers, such as scip-clang, show enhanced performance and reduced index file sizes compared to LSIF indexers (10%-20% smaller)* Easier to Develop and Debug: SCIP's design, centered around human-readable string IDs for symbols, makes it faster and more straightforward to develop new language indexers. Having more efficient indexing is key to more performant RAG on code. Show Notes* Sourcegraph* Cody* Copilot vs Cody* Steve's Stanford seminar on Grok* Steve's blog* Grab* Fireworks* Peter Norvig* Noam Chomsky* Code search* Kelly Norton* Zoekt* v0.devSee also our past episodes on Cursor, Phind, Codeium and Codium as well as the GitHub Copilot keynote at AI Engineer Summit.Timestamps* [00:00:00] Intros & Backgrounds* [00:05:20] How Steve's work on Grok inspired SourceGraph for Beyang* [00:08:10] What's Cody?* [00:11:22] Comparison of coding assistants and the capabilities of Cody* [00:16:00] The importance of context (RAG) in AI coding tools* [00:21:33] The debate between Chomsky and Norvig approaches in AI* [00:30:06] Normsky: the Norvig + Chomsky models collision* [00:36:00] The death of the DSL?* [00:40:00] LSP, Skip, Kythe, BFG, and all that fun stuff* [00:53:00] The SourceGraph internal stack* [00:58:46] Building on open source models* [01:02:00] SourceGraph for engineering managers?* [01:12:00] Lightning RoundTranscriptAlessio: Hey everyone, welcome to the Latent Space podcast. This is Alessio, partner and CTO-in-Residence at Decibel Partners, and I'm joined by my co-host Swyx, founder of Smol AI. [00:00:16]Swyx: Hey, and today we're christening our new podcast studio in the Newton, and we have Beyang and Steve from Sourcegraph. Welcome. [00:00:25]Beyang: Hey, thanks for having us. [00:00:26]Swyx: So this has been a long time coming. I'm very excited to have you. We also are just celebrating the one year anniversary of ChatGPT yesterday, but also we'll be talking about the GA of Cody later on today. We'll just do a quick intros of both of you. Obviously, people can research you and check the show notes for more. Beyang, you worked in computer vision at Stanford and then you worked at Palantir. I did, yeah. You also interned at Google. [00:00:48]Beyang: I did back in the day where I get to use Steve's system, DevTool. [00:00:53]Swyx: Right. What was it called? [00:00:55]Beyang: It was called Grok. Well, the end user thing was Google Code Search. That's what everyone called it, or just like CS. But the brains of it were really the kind of like Trigram index and then Grok, which provided the reference graph. [00:01:07]Steve: Today it's called Kythe, the open source Google one. It's sort of like Grok v3. [00:01:11]Swyx: On your podcast, which you've had me on, you've interviewed a bunch of other code search developers, including the current developer of Kythe, right? [00:01:19]Beyang: No, we didn't have any Kythe people on, although we would love to if they're up for it. We had Kelly Norton, who built a similar system at Etsy, it's an open source project called Hound. We also had Han-Wen Nienhuys, who created Zoekt, which is, I think, heavily inspired by the Trigram index that powered Google's original code search and that we also now use at Sourcegraph. Yeah. [00:01:45]Swyx: So you teamed up with Quinn over 10 years ago to start Sourcegraph and you were indexing all code on the internet. And now you're in a perfect spot to create a code intelligence startup. Yeah, yeah. [00:01:56]Beyang: I guess the backstory was, I used Google Code Search while I was an intern. And then after I left that internship and worked elsewhere, it was the single dev tool that I missed the most. I felt like my job was just a lot more tedious and much more of a hassle without it. And so when Quinn and I started working together at Palantir, he had also used various code search engines in open source over the years. And it was just a pain point that we both felt, both working on code at Palantir and also working within Palantir's clients, which were a lot of Fortune 500 companies, large financial institutions, folks like that. And if anything, the pains they felt in dealing with large complex code bases made our pain points feel small by comparison. So that was really the impetus for starting Sourcegraph. [00:02:42]Swyx: Yeah, excellent. Steve, you famously worked at Amazon. And you've told many, many stories. I want every single listener of Latent Space to check out Steve's YouTube because he effectively had a podcast that you didn't tell anyone about or something. You just hit record and just went on a few rants. I'm always here for your Stevie rants. And then you moved to Google, where you also had some interesting thoughts on just the overall Google culture versus Amazon. You joined Grab as head of eng for a couple of years. I'm from Singapore, so I have actually personally used a lot of Grab's features. And it was very interesting to see you talk so highly of Grab's engineering and sort of overall prospects. [00:03:21]Steve: Because as a customer, it sucked? [00:03:22]Swyx: Yeah, no, it's just like, being from a smaller country, you never see anyone from our home country being on a global stage or talked about as a startup that people admire or look up to, like on the league that you, with all your legendary experience, would consider equivalent. Yeah. [00:03:41]Steve: Yeah, no, absolutely. They actually, they didn't even know that they were as good as they were, in a sense. They started hiring a bunch of people from Silicon Valley to come in and sort of like fix it. And we came in and we were like, Oh, we could have been a little better operational excellence and stuff. But by and large, they're really sharp. The only thing about Grab is that they get criticized a lot for being too westernized. Oh, by who? By Singaporeans who don't want to work there. [00:04:06]Swyx: Okay. I guess I'm biased because I'm here, but I don't see that as a problem. If anything, they've had their success because they were more westernized than the Sanders Singaporean tech company. [00:04:15]Steve: I mean, they had their success because they are laser focused. They copy to Amazon. I mean, they're executing really, really, really well for a giant. I was on a slack with 2,500 engineers. It was like this giant waterfall that you could dip your toe into. You'd never catch up. Actually, the AI summarizers would have been really helpful there. But yeah, no, I think Grab is successful because they're just out there with their sleeves rolled up, just making it happen. [00:04:43]Swyx: And for those who don't know, it's not just like Uber of Southeast Asia, it's also a super app. PayPal Plus. [00:04:48]Steve: Yeah. [00:04:49]Swyx: In the way that super apps don't exist in the West. It's one of the enduring mysteries of B2C that super apps work in the East and don't work in the West. We just don't understand it. [00:04:57]Beyang: Yeah. [00:04:58]Steve: It's just kind of curious. They didn't work in India either. And it was primarily because of bandwidth reasons and smaller phones. [00:05:03]Swyx: That should change now. It should. [00:05:05]Steve: And maybe we'll see a super app here. [00:05:08]Swyx: You retired-ish? I did. You retired-ish on your own video game? Mm-hmm. Any fun stories about that? And that's also where you discovered some need for code search, right? Mm-hmm. [00:05:16]Steve: Sure. A need for a lot of stuff. Better programming languages, better databases. Better everything. I mean, I started in like 95, right? Where there was kind of nothing. Yeah. Yeah. [00:05:24]Beyang: I just want to say, I remember when you first went to Grab because you wrote that blog post talking about why you were excited about it, about like the expanding Asian market. And our reaction was like, oh, man, how did we miss stealing it with you? [00:05:36]Swyx: Hiring you. [00:05:37]Beyang: Yeah. [00:05:38]Steve: I was like, miss that. [00:05:39]Swyx: Tell that story. So how did this happen? Right? So you were inspired by Grok. [00:05:44]Beyang: I guess the backstory from my point of view is I had used code search and Grok while at Google, but I didn't actually know that it was connected to you, Steve. I knew you from your blog posts, which were always excellent, kind of like inside, very thoughtful takes from an engineer's perspective on some of the challenges facing tech companies and tech culture and that sort of thing. But my first introduction to you within the context of code intelligence, code understanding was I watched a talk that you gave, I think at Stanford, about Grok when you're first building it. And that was very eye opening. I was like, oh, like that guy, like the guy who, you know, writes the extremely thoughtful ranty like blog posts also built that system. And so that's how I knew, you know, you were involved in that. And then, you know, we always wanted to hire you, but never knew quite how to approach you or, you know, get that conversation started. [00:06:34]Steve: Well, we got introduced by Max, right? Yeah. It was temporal. Yeah. Yeah. I mean, it was a no brainer. They called me up and I had noticed when Sourcegraph had come out. Of course, when they first came out, I had this dagger of jealousy stabbed through me piercingly, which I remember because I am not a jealous person by any means, ever. But boy, I was like, but I was kind of busy, right? And just one thing led to another. I got sucked back into the ads vortex and whatever. So thank God Sourcegraph actually kind of rescued me. [00:07:05]Swyx: Here's a chance to build DevTools. Yeah. [00:07:08]Steve: That's the best. DevTools are the best. [00:07:10]Swyx: Cool. Well, so that's the overall intro. I guess we can get into Cody. Is there anything else that like people should know about you before we get started? [00:07:18]Steve: I mean, everybody knows I'm a musician. I can juggle five balls. [00:07:24]Swyx: Five is good. Five is good. I've only ever managed three. [00:07:27]Steve: Five is hard. Yeah. And six, a little bit. [00:07:30]Swyx: Wow. [00:07:31]Beyang: That's impressive. [00:07:32]Alessio: So yeah, to jump into Sourcegraph, this has been a company 10 years in the making. And as Sean said, now you're at the right place. Phase two. Now, exactly. You spent 10 years collecting all this code, indexing, making it easy to surface it. Yeah. [00:07:47]Swyx: And also learning how to work with enterprises and having them trust you with their code bases. Yeah. [00:07:52]Alessio: Because initially you were only doing on-prem, right? Like a lot of like VPC deployments. [00:07:55]Beyang: So in the very early days, we're cloud only. But the first major customers we landed were all on-prem, self-hosted. And that was, I think, related to the nature of the problem that we're solving, which becomes just like a critical, unignorable pain point once you're above like 100 devs or so. [00:08:11]Alessio: Yeah. And now Cody is going to be GA by the time this releases. So congrats to your future self for launching this in two weeks. Can you give a quick overview of just what Cody is? I think everybody understands that it's a AI coding agent, but a lot of companies say they have a AI coding agent. So yeah, what does Cody do? How do people interface with it? [00:08:32]Beyang: Yeah. So how is it different from the like several dozen other AI coding agents that exist in the market now? When we thought about building a coding assistant that would do things like code generation and question answering about your code base, I think we came at it from the perspective of, you know, we've spent the past decade building the world's best code understanding engine for human developers, right? So like it's kind of your guide as a human dev if you want to go and dive into a large complex code base. And so our intuition was that a lot of the context that we're providing to human developers would also be useful context for AI developers to consume. And so in terms of the feature set, Cody is very similar to a lot of other assistants. It does inline autocompletion. It does code base aware chat. It does specific commands that automate, you know, tasks that you might rather not want to do like generating unit tests or adding detailed documentation. But we think the core differentiator is really the quality of the context, which is hard to kind of describe succinctly. It's a bit like saying, you know, what's the difference between Google and Alta Vista? There's not like a quick checkbox list of features that you can rattle off, but it really just comes down to all the attention and detail that we've paid to making that context work well and be high quality and fast for human devs. We're now kind of plugging into the AI coding assistant as well. Yeah. [00:09:53]Steve: I mean, just to add my own perspective on to what Beyang just described, RAG is kind of like a consultant that the LLM has available, right, that knows about your code. RAG provides basically a bridge to a lookup system for the LLM, right? Whereas fine tuning would be more like on the job training for somebody. If the LLM is a person, you know, and you send them to a new job and you do on the job training, that's what fine tuning is like, right? So tuned to our specific task. You're always going to need that expert, even if you get the on the job training, because the expert knows your particular code base, your task, right? That expert has to know your code. And there's a chicken and egg problem because, right, you know, we're like, well, I'm going to ask the LLM about my code, but first I have to explain it, right? It's this chicken and egg problem. That's where RAG comes in. And we have the best consultants, right? The best assistant who knows your code. And so when you sit down with Cody, right, what Beyang said earlier about going to Google and using code search and then starting to feel like without it, his job was super tedious. Once you start using these, do you guys use coding assistants? [00:10:53]Swyx: Yeah, right. [00:10:54]Steve: I mean, like we're getting to the point very quickly, right? Where you feel like almost like you're programming without the internet, right? Or something, you know, it's like you're programming back in the nineties without the coding assistant. Yeah. Hopefully that helps for people who have like no idea about coding systems, what they are. [00:11:09]Swyx: Yeah. [00:11:10]Alessio: I mean, going back to using them, we had a lot of them on the podcast already. We had Cursor, we have Codium and Codium, very similar names. [00:11:18]Swyx: Yeah. Find, and then of course there's Copilot. [00:11:22]Alessio: You had a Copilot versus Cody blog post, and I think it really shows the context improvement. So you had two examples that stuck with me. One was, what does this application do? And the Copilot answer was like, oh, it uses JavaScript and NPM and this. And it's like, but that's not what it does. You know, that's what it's built with. Versus Cody was like, oh, these are like the major functions. And like, these are the functionalities and things like that. And then the other one was, how do I start this up? And Copilot just said NPM start, even though there was like no start command in the package JSON, but you know, most collapse, right? Most projects use NPM start. So maybe this does too. How do you think about open source models? Because Copilot has their own private thing. And I think you guys use Starcoder, if I remember right. Yeah, that's correct. [00:12:09]Beyang: I think Copilot uses some variant of Codex. They're kind of cagey about it. I don't think they've like officially announced what model they use. [00:12:16]Swyx: And I think they use a range of models based on what you're doing. Yeah. [00:12:19]Beyang: So everyone uses a range of model. Like no one uses the same model for like inline completion versus like chat because the latency requirements for. Oh, okay. Well, there's fill in the middle. There's also like what the model's trained on. So like we actually had completions powered by Claude Instant for a while. And but you had to kind of like prompt hack your way to get it to output just the code and not like, hey, you know, here's the code you asked for, like that sort of text. So like everyone uses a range of models. We've kind of designed Cody to be like especially model, not agnostic, but like pluggable. So one of our kind of design considerations was like as the ecosystem evolves, we want to be able to integrate the best in class models, whether they're proprietary or open source into Cody because the pace of innovation in the space is just so quick. And I think that's been to our advantage. Like today, Cody uses Starcoder for inline completions. And with the benefit of the context that we provide, we actually show comparable completion acceptance rate metrics. It's kind of like the standard metric that folks use to evaluate inline completion quality. It's like if I show you a completion, what's the chance that you actually accept the completion versus you reject it? And so we're at par with Copilot, which is at the head of that industry right now. And we've been able to do that with the Starcoder model, which is open source and the benefit of the context fetching stuff that we provide. And of course, a lot of like prompt engineering and other stuff along the way. [00:13:40]Alessio: And Steve, you wrote a post called cheating is all you need about what you're building. And one of the points you made is that everybody's fighting on the same axis, which is better UI and the IDE, maybe like a better chat response. But data modes are kind of the most important thing. And you guys have like a 10 year old mode with all the data you've been collecting. How do you kind of think about what other companies are doing wrong, right? Like, why is nobody doing this in terms of like really focusing on RAG? I feel like you see so many people. Oh, we just got a new model. It's like a bit human eval. And it's like, well, but maybe like that's not what we should really be doing, you know? Like, do you think most people underestimate the importance of like the actual RAG in code? [00:14:21]Steve: I think that people weren't doing it much. It wasn't. It's kind of at the edges of AI. It's not in the center. I know that when ChatGPT launched, so within the last year, I've heard a lot of rumblings from inside of Google, right? Because they're undergoing a huge transformation to try to, you know, of course, get into the new world. And I heard that they told, you know, a bunch of teams to go and train their own models or fine tune their own models, right? [00:14:43]Swyx: Both. [00:14:43]Steve: And, you know, it was a s**t show. Nobody knew how to do it. They launched two coding assistants. One was called Code D with an EY. And then there was, I don't know what happened in that one. And then there's Duet, right? Google loves to compete with themselves, right? They do this all the time. And they had a paper on Duet like from a year ago. And they were doing exactly what Copilot was doing, which was just pulling in the local context, right? But fundamentally, I thought of this because we were talking about the splitting of the [00:15:10]Swyx: models. [00:15:10]Steve: In the early days, it was the LLM did everything. And then we realized that for certain use cases, like completions, that a different, smaller, faster model would be better. And that fragmentation of models, actually, we expected to continue and proliferate, right? Because we are fundamentally, we're a recommender engine right now. Yeah, we're recommending code to the LLM. We're saying, may I interest you in this code right here so that you can answer my question? [00:15:34]Swyx: Yeah? [00:15:34]Steve: And being good at recommender engine, I mean, who are the best recommenders, right? There's YouTube and Spotify and, you know, Amazon or whatever, right? Yeah. [00:15:41]Swyx: Yeah. [00:15:41]Steve: And they all have many, many, many, many, many models, right? For all fine-tuned for very specific, you know. And that's where we're heading in code, too. Absolutely. [00:15:50]Swyx: Yeah. [00:15:50]Alessio: We just did an episode we released on Wednesday, which we said RAG is like Rexis or like LLMs. You're basically just suggesting good content. [00:15:58]Swyx: It's like what? Recommendations. [00:15:59]Beyang: Recommendations. [00:16:00]Alessio: Oh, got it. [00:16:01]Steve: Yeah, yeah, yeah. [00:16:02]Swyx: So like the naive implementation of RAG is you embed everything, throw it in a vector database, you embed your query, and then you find the nearest neighbors, and that's your RAG. But actually, you need to rank it. And actually, you need to make sure there's sample diversity and that kind of stuff. And then you're like slowly gradient dissenting yourself towards rediscovering proper Rexis, which has been traditional ML for a long time. But like approaching it from an LLM perspective. Yeah. [00:16:24]Beyang: I almost think of it as like a generalized search problem because it's a lot of the same things. Like you want your layer one to have high recall and get all the potential things that could be relevant. And then there's typically like a layer two re-ranking mechanism that bumps up the precision and tries to get the relevant stuff to the top of the results list. [00:16:43]Swyx: Have you discovered that ranking matters a lot? Oh, yeah. So the context is that I think a lot of research shows that like one, context utilization matters based on model. Like GPT uses the top of the context window, and then apparently Claude uses the bottom better. And it's lossy in the middle. Yeah. So ranking matters. No, it really does. [00:17:01]Beyang: The skill with which models are able to take advantage of context is always going to be dependent on how that factors into the impact on the training loss. [00:17:10]Swyx: Right? [00:17:10]Beyang: So like if you want long context window models to work well, then you have to have a ton of data where it's like, here's like a billion lines of text. And I'm going to ask a question about like something that's like, you know, embedded deeply into it and like, give me the right answer. And unless you have that training set, then of course, you're going to have variability in terms of like where it attends to. And in most kind of like naturally occurring data, the thing that you're talking about right now, the thing I'm asking you about is going to be something that we talked about recently. [00:17:36]Swyx: Yeah. [00:17:36]Steve: Did you really just say gradient dissenting yourself? Actually, I love that it's entered the casual lexicon. Yeah, yeah, yeah. [00:17:44]Swyx: My favorite version of that is, you know, how we have to p-hack papers. So, you know, when you throw humans at the problem, that's called graduate student dissent. That's great. It's really awesome. [00:17:54]Alessio: I think the other interesting thing that you have is this inline assist UX that I wouldn't say async, but like it works while you can also do work. So you can ask Cody to make changes on a code block and you can still edit the same file at the same time. [00:18:07]Swyx: Yeah. [00:18:07]Alessio: How do you see that in the future? Like, do you see a lot of Cody's running together at the same time? Like, how do you validate also that they're not messing each other up as they make changes in the code? And maybe what are the limitations today? And what do you think about where the attack is going? [00:18:21]Steve: I want to start with a little history and then I'm going to turn it over to Bian, all right? So we actually had this feature in the very first launch back in June. Dominic wrote it. It was called nonstop Cody. And you could have multiple, basically, LLM requests in parallel modifying your source [00:18:37]Swyx: file. [00:18:37]Steve: And he wrote a bunch of code to handle all of the diffing logic. And you could see the regions of code that the LLM was going to change, right? And he was showing me demos of it. And it just felt like it was just a little before its time, you know? But a bunch of that stuff, that scaffolding was able to be reused for where we're inline [00:18:56]Swyx: sitting today. [00:18:56]Steve: How would you characterize it today? [00:18:58]Beyang: Yeah, so that interface has really evolved from a, like, hey, general purpose, like, request anything inline in the code and have the code update to really, like, targeted features, like, you know, fix the bug that exists at this line or request a very specific [00:19:13]Swyx: change. [00:19:13]Beyang: And the reason for that is, I think, the challenge that we ran into with inline fixes, and we do want to get to the point where you could just fire and forget and have, you know, half a dozen of these running in parallel. But I think we ran into the challenge early on that a lot of people are running into now when they're trying to construct agents, which is the reliability of, you know, working code generation is just not quite there yet in today's language models. And so that kind of constrains you to an interaction where the human is always, like, in the inner loop, like, checking the output of each response. And if you want that to work in a way where you can be asynchronous, you kind of have to constrain it to a domain where today's language models can generate reliable code well enough. So, you know, generating unit tests, that's, like, a well-constrained problem. Or fixing a bug that shows up as, like, a compiler error or a test error, that's a well-constrained problem. But the more general, like, hey, write me this class that does X, Y, and Z using the libraries that I have, that is not quite there yet, even with the benefit of really good context. Like, it definitely moves the needle a lot, but we're not quite there yet to the point where you can just fire and forget. And I actually think that this is something that people don't broadly appreciate yet, because I think that, like, everyone's chasing this dream of agentic execution. And if we're to really define that down, I think it implies a couple things. You have, like, a multi-step process where each step is fully automated. We don't have to have a human in the loop every time. And there's also kind of like an LM call at each stage or nearly every stage in that [00:20:45]Swyx: chain. [00:20:45]Beyang: Based on all the work that we've done, you know, with the inline interactions, with kind of like general Codyfeatures for implementing longer chains of thought, we're actually a little bit more bearish than the average, you know, AI hypefluencer out there on the feasibility of agents with purely kind of like transformer-based models. To your original question, like, the inline interactions with CODI, we actually constrained it to be more targeted, like, you know, fix the current error or make this quick fix. I think that that does differentiate us from a lot of the other tools on the market, because a lot of people are going after this, like, shnazzy, like, inline edit interaction, whereas I think where we've moved, and this is based on the user feedback that we've gotten, it's like that sort of thing, it demos well, but when you're actually coding day to day, you don't want to have, like, a long chat conversation inline with the code base. That's a waste of time. You'd rather just have it write the right thing and then move on with your life or not have to think about it. And that's what we're trying to work towards. [00:21:37]Steve: I mean, yeah, we're not going in the agent direction, right? I mean, I'll believe in agents when somebody shows me one that works. Yeah. Instead, we're working on, you know, sort of solidifying our strength, which is bringing the right context in. So new context sources, ways for you to plug in your own context, ways for you to control or influence the context, you know, the mixing that happens before the request goes out, etc. And there's just so much low-hanging fruit left in that space that, you know, agents seems like a little bit of a boondoggle. [00:22:03]Beyang: Just to dive into that a little bit further, like, I think, you know, at a very high level, what do people mean when they say agents? They really mean, like, greater automation, fully automated, like, the dream is, like, here's an issue, go implement that. And I don't have to think about it as a human. And I think we are working towards that. Like, that is the eventual goal. I think it's specifically the approach of, like, hey, can we have a transformer-based LM alone be the kind of, like, backbone or the orchestrator of these agentic flows? Where we're a little bit more bearish today. [00:22:31]Swyx: You want the human in the loop. [00:22:32]Beyang: I mean, you kind of have to. It's just a reality of the behavior of language models that are purely, like, transformer-based. And I think that's just like a reflection of reality. And I don't think people realize that yet. Because if you look at the way that a lot of other AI tools have implemented context fetching, for instance, like, you see this in the Copilot approach, where if you use, like, the at-workspace thing that supposedly provides, like, code-based level context, it has, like, an agentic approach where you kind of look at how it's behaving. And it feels like they're making multiple requests to the LM being like, what would you do in this case? Would you search for stuff? What sort of files would you gather? Go and read those files. And it's like a multi-hop step, so it takes a long while. It's also non-deterministic. Because any sort of, like, LM invocation, it's like a dice roll. And then at the end of the day, the context it fetches is not that good. Whereas our approach is just like, OK, let's do some code searches that make sense. And then maybe, like, crawl through the reference graph a little bit. That is fast. That doesn't require any sort of LM invocation at all. And we can pull in much better context, you know, very quickly. So it's faster. [00:23:37]Swyx: It's more reliable. [00:23:37]Beyang: It's deterministic. And it yields better context quality. And so that's what we think. We just don't think you should cargo cult or naively go like, you know, agents are the [00:23:46]Swyx: future. [00:23:46]Beyang: Let's just try to, like, implement agents on top of the LM that exists today. I think there are a couple of other technologies or approaches that need to be refined first before we can get into these kind of, like, multi-stage, fully automated workflows. [00:24:00]Swyx: It makes sense. You know, we're very much focused on developer inner loop right now. But you do see things eventually moving towards developer outer loop. Yeah. So would you basically say that they're tackling the agent's problem that you don't want to tackle? [00:24:11]Beyang: No, I would say at a high level, we are after maybe, like, the same high level problem, which is like, hey, I want some code written. I want to develop some software and can automate a system. Go build that software for me. I think the approaches might be different. So I think the analogy in my mind is, I think about, like, the AI chess players. Coding, in some senses, I mean, it's similar and dissimilar to chess. I think one question I ask is, like, do you think producing code is more difficult than playing chess or less difficult than playing chess? More. [00:24:41]Swyx: I think more. [00:24:41]Beyang: Right. And if you look at the best AI chess players, like, yes, you can use an LLM to play chess. Like, people have showed demos where it's like, oh, like, yeah, GPT-4 is actually a pretty decent, like, chess move suggester. Right. But you would never build, like, a best in class chess player off of GPT-4 alone. [00:24:57]Swyx: Right. [00:24:57]Beyang: Like, the way that people design chess players is that you have kind of like a search space and then you have a way to explore that search space efficiently. There's a bunch of search algorithms, essentially. We were doing tree search in various ways. And you can have heuristic functions, which might be powered by an LLM. [00:25:12]Swyx: Right. [00:25:12]Beyang: Like, you might use an LLM to generate proposals in that space that you can efficiently explore. But the backbone is still this kind of more formalized tree search based approach rather than the LLM itself. And so I think my high level intuition is that, like, the way that we get to more reliable multi-step workflows that do things beyond, you know, generate unit test, it's really going to be like a search based approach where you use an LLM as kind of like an advisor or a proposal function, sort of your heuristic function, like the ASTAR search algorithm. But it's probably not going to be the thing that is the backbone, because I guess it's not the right tool for that. Yeah. [00:25:50]Swyx: I can see yourself kind of thinking through this, but not saying the words, the sort of philosophical Peter Norvig type discussion. Maybe you want to sort of introduce that in software. Yeah, definitely. [00:25:59]Beyang: So your listeners are savvy. They're probably familiar with the classic like Chomsky versus Norvig debate. [00:26:04]Swyx: No, actually, I wanted, I was prompting you to introduce that. Oh, got it. [00:26:08]Beyang: So, I mean, if you look at the history of artificial intelligence, right, you know, it goes way back to, I don't know, it's probably as old as modern computers, like 50s, 60s, 70s. People are debating on like, what is the path to producing a sort of like general human level of intelligence? And kind of two schools of thought that emerged. One is the Norvig school of thought, which roughly speaking includes large language models, you know, regression, SVN, basically any model that you kind of like learn from data. And it's like data driven. Most of machine learning would fall under this umbrella. And that school of thought says like, you know, just learn from the data. That's the approach to reaching intelligence. And then the Chomsky approach is more things like compilers and parsers and formal systems. So basically like, let's think very carefully about how to construct a formal, precise system. And that will be the approach to how we build a truly intelligent system. I think Lisp was invented so that you could create like rules-based systems that you would call AI. As a language. Yeah. And for a long time, there was like this debate, like there's certain like AI research labs that were more like, you know, in the Chomsky camp and others that were more in the Norvig camp. It's a debate that rages on today. And I feel like the consensus right now is that, you know, Norvig definitely has the upper hand right now with the advent of LMs and diffusion models and all the other recent progress in machine learning. But the Chomsky-based stuff is still really useful in my view. I mean, it's like parsers, compilers, basically a lot of the stuff that provides really good context. It provides kind of like the knowledge graph backbone that you want to explore with your AI dev tool. Like that will come from kind of like Chomsky-based tools like compilers and parsers. It's a lot of what we've invested in in the past decade at Sourcegraph and what you build with Grok. Basically like these formal systems that construct these very precise knowledge graphs that are great context providers and great kind of guard rails enforcers and kind of like safety checkers for the output of a more kind of like data-driven, fuzzier system that uses like the Norvig-based models. [00:28:03]Steve: Jang was talking about this stuff like it happened in the middle ages. Like, okay, so when I was in college, I was in college learning Lisp and prologue and planning and all the deterministic Chomsky approaches to AI. And I was there when Norvig basically declared it dead. I was there 3,000 years ago when Norvig and Chomsky fought on the volcano. When did he declare it dead? [00:28:26]Swyx: What do you mean he declared it dead? [00:28:27]Steve: It was like late 90s. [00:28:29]Swyx: Yeah. [00:28:29]Steve: When I went to Google, Peter Norvig was already there. He had basically like, I forget exactly where. It was some, he's got so many famous short posts, you know, amazing. [00:28:38]Swyx: He had a famous talk, the unreasonable effectiveness of data. Yeah. [00:28:41]Steve: Maybe that was it. But at some point, basically, he basically convinced everybody that deterministic approaches had failed and that heuristic-based, you know, data-driven statistical approaches, stochastic were better. [00:28:52]Swyx: Yeah. [00:28:52]Steve: The primary reason I can tell you this, because I was there, was that, was that, well, the steam-powered engine, no. The reason was that the deterministic stuff didn't scale. [00:29:06]Swyx: Yeah. Right. [00:29:06]Steve: They're using prologue, man, constraint systems and stuff like that. Well, that was a long time ago, right? Today, actually, these Chomsky-style systems do scale. And that's, in fact, exactly what Sourcegraph has built. Yeah. And so we have a very unique, I love the framing that Bjong's made, that the marriage of the Chomsky and the Norvig, you know, sort of models, you know, conceptual models, because we, you know, we have both of them and they're both really important. And in fact, there, there's this really interesting, like, kind of overlap between them, right? Where like the AI or our graph or our search engine could potentially provide the right context for any given query, which is, of course, why ranking is important. But what we've really signed ourselves up for is an extraordinary amount of testing. [00:29:45]Swyx: Yeah. [00:29:45]Steve: Because in SWIGs, you were saying that, you know, GPT-4 tends to the front of the context window and maybe other LLMs to the back and maybe, maybe the LLM in the middle. [00:29:53]Swyx: Yeah. [00:29:53]Steve: And so that means that, you know, if we're actually like, you know, verifying whether we, you know, some change we've made has improved things, we're going to have to test putting it at the beginning of the window and at the end of the window, you know, and maybe make the right decision based on the LLM that you've chosen. Which some of our competitors, that's a problem that they don't have, but we meet you, you know, where you are. Yeah. And we're, just to finish, we're writing tens of thousands. We're generating tests, you know, fill in the middle type tests and things. And then using our graph to basically sort of fine tune Cody's behavior there. [00:30:20]Swyx: Yeah. [00:30:21]Beyang: I also want to add, like, I have like an internal pet name for this, like kind of hybrid architecture that I'm trying to make catch on. Maybe I'll just say it here. Just saying it publicly kind of makes it more real. But like, I call the architecture that we've developed the Normsky architecture. [00:30:36]Swyx: Yeah. [00:30:36]Beyang: I mean, it's obviously a portmanteau of Norvig and Chomsky, but the acronym, it stands for non-agentic, rapid, multi-source code intelligence. So non-agentic because... Rolls right off the tongue. And Normsky. But it's non-agentic in the sense that like, we're not trying to like pitch you on kind of like agent hype, right? Like it's the things it does are really just developer tools developers have been using for decades now, like parsers and really good search indexes and things like that. Rapid because we place an emphasis on speed. We don't want to sit there waiting for kind of like multiple LLM requests to return to complete a simple user request. Multi-source because we're thinking broadly about what pieces of information and knowledge are useful context. So obviously starting with things that you can search in your code base, and then you add in the reference graph, which kind of like allows you to crawl outward from those initial results. But then even beyond that, you know, sources of information, like there's a lot of knowledge that's embedded in docs, in PRDs or product specs, in your production logging system, in your chat, in your Slack channel, right? Like there's so much context is embedded there. And when you're a human developer, and you're trying to like be productive in your code base, you're going to go to all these different systems to collect the context that you need to figure out what code you need to write. And I don't think the AI developer will be any different. It will need to pull context from all these different sources. So we're thinking broadly about how to integrate these into Codi. We hope through kind of like an open protocol that like others can extend and implement. And this is something else that should be accessible by December 14th in kind of like a preview stage. But that's really about like broadening this notion of the code graph beyond your Git repository to all the other sources where technical knowledge and valuable context can live. [00:32:21]Steve: Yeah, it becomes an artifact graph, right? It can link into your logs and your wikis and any data source, right? [00:32:27]Alessio: How do you guys think about the importance of, it's almost like data pre-processing in a way, which is bring it all together, tie it together, make it ready. Any thoughts on how to actually make that good? Some of the innovation you guys have made. [00:32:40]Steve: We talk a lot about the context fetching, right? I mean, there's a lot of ways you could answer this question. But, you know, we've spent a lot of time just in this podcast here talking about context fetching. But stuffing the context into the window is, you know, the bin packing problem, right? Because the window is not big enough, and you've got more context than you can fit. You've got a ranker maybe. But what is that context? Is it a function that was returned by an embedding or a graph call or something? Do you need the whole function? Or do you just need, you know, the top part of the function, this expression here, right? You know, so that art, the golf game of trying to, you know, get each piece of context down into its smallest state, possibly even summarized by another model, right, before it even goes to the LLM, becomes this is the game that we're in, yeah? And so, you know, recursive summarization and all the other techniques that you got to use to like stuff stuff into that context window become, you know, critically important. And you have to test them across every configuration of models that you could possibly need. [00:33:32]Beyang: I think data preprocessing is probably the like unsexy, way underappreciated secret to a lot of the cool stuff that people are shipping today. Whether you're doing like RAG or fine tuning or pre-training, like the preprocessing step matters so much because it's basically garbage in, garbage out, right? Like if you're feeding in garbage to the model, then it's going to output garbage. Concretely, you know, for code RAG, if you're not doing some sort of like preprocessing that takes advantage of a parser and is able to like extract the key components of a particular file of code, you know, separate the function signature from the body, from the doc string, what are you even doing? Like that's like table stakes. It opens up so much more possibilities with which you can kind of like tune your system to take advantage of the signals that come from those different parts of the code. Like we've had a tool, you know, since computers were invented that understands the structure of source code to a hundred percent precision. The compiler knows everything there is to know about the code in terms of like structure. Like why would you not want to use that in a system that's trying to generate code, answer questions about code? You shouldn't throw that out the window just because now we have really good, you know, data-driven models that can do other things. [00:34:44]Steve: Yeah. When I called it a data moat, you know, in my cheating post, a lot of people were confused, you know, because data moat sort of sounds like data lake because there's data and water and stuff. I don't know. And so they thought that we were sitting on this giant mountain of data that we had collected, but that's not what our data moat is. It's really a data pre-processing engine that can very quickly and scalably, like basically dissect your entire code base in a very small, fine-grained, you know, semantic unit and then serve it up. Yeah. And so it's really, it's not a data moat. It's a data pre-processing moat, I guess. [00:35:15]Beyang: Yeah. If anything, we're like hypersensitive to customer data privacy requirements. So it's not like we've taken a bunch of private data and like, you know, trained a generally available model. In fact, exactly the opposite. A lot of our customers are choosing Cody over Copilot and other competitors because we have an explicit guarantee that we don't do any of that. And that we've done that from day one. Yeah. I think that's a very real concern in today's day and age, because like if your proprietary IP finds its way into the training set of any model, it's very easy both to like extract that knowledge from the model and also use it to, you know, build systems that kind of work on top of the institutional knowledge that you've built up. [00:35:52]Alessio: About a year ago, I wrote a post on LLMs for developers. And one of the points I had was maybe the depth of like the DSL. I spent most of my career writing Ruby and I love Ruby. It's so nice to use, but you know, it's not as performant, but it's really easy to read, right? And then you look at other languages, maybe they're faster, but like they're more verbose, you know? And when you think about efficiency of the context window, that actually matters. [00:36:15]Swyx: Yeah. [00:36:15]Alessio: But I haven't really seen a DSL for models, you know? I haven't seen like code being optimized to like be easier to put in a model context. And it seems like your pre-processing is kind of doing that. Do you see in the future, like the way we think about the DSL and APIs and kind of like service interfaces be more focused on being context friendly, where it's like maybe it's harder to read for the human, but like the human is never going to write it anyway. We were talking on the Hacks podcast. There are like some data science things like spin up the spandex, like humans are never going to write again because the models can just do very easily. Yeah, curious to hear your thoughts. [00:36:51]Steve: Well, so DSLs, they involve, you know, writing a grammar and a parser and they're like little languages, right? We do them that way because, you know, we need them to compile and humans need to be able to read them and so on. The LLMs don't need that level of structure. You can throw any pile of crap at them, you know, more or less unstructured and they'll deal with it. So I think that's why a DSL hasn't emerged for sort of like communicating with the LLM or packaging up the context or anything. Maybe it will at some point, right? We've got, you know, tagging of context and things like that that are sort of peeking into DSL territory, right? But your point on do users, you know, do people have to learn DSLs like regular expressions or, you know, pick your favorite, right? XPath. I think you're absolutely right that the LLMs are really, really good at that. And I think you're going to see a lot less of people having to slave away learning these things. They just have to know the broad capabilities and the LLM will take care of the rest. [00:37:42]Swyx: Yeah, I'd agree with that. [00:37:43]Beyang: I think basically like the value profit of DSL is that it makes it easier to work with a lower level language, but at the expense of introducing an abstraction layer. And in many cases today, you know, without the benefit of AI cogeneration, like that totally worth it, right? With the benefit of AI cogeneration, I mean, I don't think all DSLs will go away. I think there's still, you know, places where that trade-off is going to be worthwhile. But it's kind of like how much of source code do you think is going to be generated through natural language prompting in the future? Because in a way, like any programming language is just a DSL on top of assembly, right? And so if people can do that, then yeah, like maybe for a large portion of the code [00:38:21]Swyx: that's written, [00:38:21]Beyang: people don't actually have to understand the DSL that is Ruby or Python or basically any other programming language that exists. [00:38:28]Steve: I mean, seriously, do you guys ever write SQL queries now without using a model of some sort? At least a draft. [00:38:34]Swyx: Yeah, right. [00:38:36]Steve: And so we have kind of like, you know, past that bridge, right? [00:38:39]Alessio: Yeah, I think like to me, the long-term thing is like, is there ever going to be, you don't actually see the code, you know? It's like, hey, the basic thing is like, hey, I need a function to some two numbers and that's it. I don't need you to generate the code. [00:38:53]Steve: And the following question, do you need the engineer or the paycheck? [00:38:56]Swyx: I mean, right? [00:38:58]Alessio: That's kind of the agent's discussion in a way where like you cannot automate the agents, but like slowly you're getting more of the atomic units of the work kind of like done. I kind of think of it as like, you know, [00:39:09]Beyang: do you need a punch card operator to answer that for you? And so like, I think we're still going to have people in the role of a software engineer, but the portion of time they spend on these kinds of like low-level, tedious tasks versus the higher level, more creative tasks is going to shift. [00:39:23]Steve: No, I haven't used punch cards. [00:39:25]Swyx: Yeah, I've been talking about like, so we kind of made this podcast about the sort of rise of the AI engineer. And like the first step is the AI enhanced engineer. That is that software developer that is no longer doing these routine, boilerplate-y type tasks, because they're just enhanced by tools like yours. So you mentioned OpenCodeGraph. I mean, that is a kind of DSL maybe, and because we're releasing this as you go GA, you hope for other people to take advantage of that? [00:39:52]Beyang: Oh yeah, I would say so OpenCodeGraph is not a DSL. It's more of a protocol. It's basically like, hey, if you want to make your system, whether it's, you know, chat or logging or whatever accessible to an AI developer tool like Cody, here's kind of like the schema by which you can provide that context and offer hints. So I would, you know, comparisons like LSP obviously did this for kind of like standard code intelligence. It's kind of like a lingua franca for providing fine references and codefinition. There's kind of like analogs to that. There might be also analogs to kind of the original OpenAI, kind of like plugins, API. There's all this like context out there that might be useful for an LM-based system to consume. And so at a high level, what we're trying to do is define a common language for context providers to provide context to other tools in the software development lifecycle. Yeah. Do you have any critiques of LSP, by the way, [00:40:42]Swyx: since like this is very much, very close to home? [00:40:45]Steve: One of the authors wrote a really good critique recently. Yeah. I don't think I saw that. Yeah, yeah. LSP could have been better. It just came out a couple of weeks ago. It was a good article. [00:40:54]Beyang: Yeah. I think LSP is great. Like for what it did for the developer ecosystem, it was absolutely fantastic. Like nowadays, like it's much easier now to get code navigation up and running in a bunch of editors by speaking this protocol. I think maybe the interesting question is like looking at the different design decisions comparing LSP basically with Kythe. Because Kythe has more of a... How would you describe it? [00:41:18]Steve: A storage format. [00:41:20]Beyang: I think the critique of LSP from a Kythe point of view would be like with LSP, you don't actually have an actual symbolic model of the code. It's not like LSP models like, hey, this function calls this other function. LSP is all like range-based. Like, hey, your cursor's at line 32, column 1. [00:41:35]Swyx: Yeah. [00:41:35]Beyang: And that's the thing you feed into the language server. And then it's like, okay, here's the range that you should jump to if you click on that range. So it kind of is intentionally ignorant of the fact that there's a thing called a reference underneath your cursor, and that's linked to a symbol definition. [00:41:49]Steve: Well, actually, that's the worst example you could have used. You're right. But that's the one thing that it actually did bake in is following references. [00:41:56]Swyx: Sure. [00:41:56]Steve: But it's sort of hardwired. [00:41:58]Swyx: Yeah. [00:41:58]Steve: Whereas Kythe attempts to model [00:42:00]Beyang: like all these things explicitly. [00:42:02]Swyx: And so... [00:42:02]Steve: Well, so LSP is a protocol, right? And so Google's internal protocol is gRPC-based. And it's a different approach than LSP. It's basically you make a heavy query to the back end, and you get a lot of data back, and then you render the whole page, you know? So we've looked at LSP, and we think that it's a little long in the tooth, right? I mean, it's a great protocol, lots and lots of support for it. But we need to push into the domain of exposing the intelligence through the protocol. Yeah. [00:42:29]Beyang: And so I would say we've developed a protocol of our own called Skip, which is at a very high level trying to take some of the good ideas from LSP and from Kythe and merge that into a system that in the near term is useful for Sourcegraph, but I think in the long term, we hope will be useful for the ecosystem. Okay, so here's what LSP did well. LSP, by virtue of being like intentionally dumb, dumb in air quotes, because I'm not like ragging on it, allowed language servers developers to kind of like bypass the hard problem of like modeling language semantics precisely. So like if all you want to do is jump to definition, you don't have to come up with like a universally unique naming scheme for each symbol, which is actually quite challenging because you have to think about like, okay, what's the top scope of this name? Is it the source code repository? Is it the package? Does it depend on like what package server you're fetching this from? Like whether it's the public one or the one inside your... Anyways, like naming is hard, right? And by just going from kind of like a location to location based approach, you basically just like throw that out the window. All I care about is jumping definition, just make that work. And you can make that work without having to deal with like all the complex global naming things. The limitation of that approach is that it's harder to build on top of that to build like a true knowledge graph. Like if you actually want a system that says like, okay, here's the web of functions and here's how they reference each other. And I want to incorporate that like semantic model of how the code operates or how the code relates to each other at like a static level. You can't do that with LSP because you have to deal with line ranges. And like concretely the pain point that we found in using LSP for source graph is like in order to do like a find references [00:44:04]Swyx: and then jump definitions, [00:44:04]Beyang: it's like a multi-hop process because like you have to jump to the range and then you have to find the symbol at that range. And it just adds a lot of latency and complexity of these operations where as a human, you're like, well, this thing clearly references this other thing. Why can't you just jump me to that? And I think that's the thing that Kaith does well. But then I think the issue that Kaith has had with adoption is because it is more sophisticated schema, I think. And so there's basically more things that you have to implement to get like a Kaith implementation up and running. I hope I'm not like, correct me if I'm wrong about any of this. [00:44:35]Steve: 100%, 100%. Kaith also has a problem, all these systems have the problem, even skip, or at least the way that we implemented the indexers, that they have to integrate with your build system in order to build that knowledge graph, right? Because you have to basically compile the code in a special mode to generate artifacts instead of binaries. And I would say, by the way, earlier I was saying that XREFs were in LSP, but it's actually, I was thinking of LSP plus LSIF. [00:44:58]Swyx: Yeah. That's another. [00:45:01]Steve: Which is actually bad. We can say that it's bad, right? [00:45:04]Steve: It's like skip or Kaith, it's supposed to be sort of a model serialization, you know, for the code graph, but it basically just does what LSP needs, the bare minimum. LSIF is basically if you took LSP [00:45:16]Beyang: and turned that into a serialization format. So like you build an index for language servers to kind of like quickly bootstrap from cold start. But it's a graph model [00:45:23]Steve: with all of the inconvenience of the API without an actual graph. And so, yeah. [00:45:29]Beyang: So like one of the things that we try to do with skip is try to capture the best of both worlds. So like make it easy to write an indexer, make the schema simple, but also model some of the more symbolic characteristics of the code that would allow us to essentially construct this knowledge graph that we can then make useful for both the human developer through SourceGraph and through the AI developer through Cody. [00:45:49]Steve: So anyway, just to finish off the graph comment, we've got a new graph, yeah, that's skip based. We call it BFG internally, right? It's a beautiful something graph. A big friendly graph. [00:46:00]Swyx: A big friendly graph. [00:46:01]Beyang: It's a blazing fast. [00:46:02]Steve: Blazing fast. [00:46:03]Swyx: Blazing fast graph. [00:46:04]Steve: And it is blazing fast, actually. It's really, really interesting. I should probably have to do a blog post about it to walk you through exactly how they're doing it. Oh, please. But it's a very AI-like iterative, you know, experimentation sort of approach. We're building a code graph based on all of our 10 years of knowledge about building code graphs, yeah? But we're building it quickly with zero configuration, and it doesn't have to integrate with your build. And through some magic tricks that we have. And so what just happens when you install the plugin, that it'll be there and indexing your code and providing that knowledge graph in the background without all that build system integration. This is a bit of secret sauce that we haven't really like advertised it very much lately. But I am super excited about it because what they do is they say, all right, you know, let's tackle function parameters today. Cody's not doing a very good job of completing function call arguments or function parameters in the definition, right? Yeah, we generate those thousands of tests, and then we can actually reuse those tests for the AI context as well. So fortunately, things are kind of converging on, we have, you know, half a dozen really, really good context sources, and we mix them all together. So anyway, BFG, you're going to hear more about it probably in the holidays? [00:47:12]Beyang: I think it'll be online for December 14th. We'll probably mention it. BFG is probably not the public name we're going to go with. I think we might call it like Graph Context or something like that. [00:47:20]Steve: We're officially calling it BFG. [00:47:22]Swyx: You heard it here first. [00:47:24]Beyang: BFG is just kind of like the working name. And so the impetus for BFG was like, if you look at like current AI inline code completion tools and the errors that they make, a lot of the errors that they make, even in kind of like the easy, like single line case, are essentially like type errors, right? Like you're trying to complete a function call and it suggests a variable that you defined earlier, but that variable is the wrong type. [00:47:47]Swyx: And that's the sort of thing [00:47:47]Beyang: where it's like a first year, like freshman CS student would not make that error, right? So like, why does the AI make that error? And the reason is, I mean, the AI is just suggesting things that are plausible without the context of the types or any other like broader files in the code. And so the kind of intuition here is like, why don't we just do the basic thing that like any baseline intelligent human developer would do, which is like click jump to definition, click some fine references and pull in that like Graph Context into the context window and then have it generate the completion. So like that's sort of like the MVP of what BFG was. And turns out that works really well. Like you can eliminate a lot of type errors that AI coding tools make just by pulling in that context. Yeah, but the graph is definitely [00:48:32]Steve: our Chomsky side. [00:48:33]Swyx: Yeah, exactly. [00:48:34]Beyang: So like this like Chomsky-Norvig thing, I think pops up in a bunch of differ

About Steve:Steve Rice is Principal Product Manager for AWS AppConfig. He is surprisingly passionate about feature flags and continuous configuration. He lives in the Washington DC area with his wife, 3 kids, and 2 incontinent dogs.Links Referenced:AWS AppConfig: https://go.aws/awsappconfig TranscriptAnnouncer: Hello, and welcome to Screaming in the Cloud with your host, Chief Cloud Economist at The Duckbill Group, Corey Quinn. This weekly show features conversations with people doing interesting work in the world of cloud, thoughtful commentary on the state of the technical world, and ridiculous titles for which Corey refuses to apologize. This is Screaming in the Cloud.Corey: This episode is sponsored in part by our friends at AWS AppConfig. Engineers love to solve, and occasionally create, problems. But not when it's an on-call fire-drill at 4 in the morning. Software problems should drive innovation and collaboration, NOT stress, and sleeplessness, and threats of violence. That's why so many developers are realizing the value of AWS AppConfig Feature Flags. Feature Flags let developers push code to production, but hide that that feature from customers so that the developers can release their feature when it's ready. This practice allows for safe, fast, and convenient software development. You can seamlessly incorporate AppConfig Feature Flags into your AWS or cloud environment and ship your Features with excitement, not trepidation and fear. To get started, go to snark.cloud/appconfig. That's snark.cloud/appconfig.Corey: Forget everything you know about SSH and try Tailscale. Imagine if you didn't need to manage PKI or rotate SSH keys every time someone leaves. That'd be pretty sweet, wouldn't it? With tail scale, ssh, you can do exactly that. Tail scale gives each server and user device a node key to connect to its VPN, and it uses the same node key to authorize and authenticate.S. Basically you're SSHing the same way you manage access to your app. What's the benefit here? Built in key rotation permissions is code connectivity between any two devices, reduce latency and there's a lot more, but there's a time limit here. You can also ask users to reauthenticate for that extra bit of security. Sounds expensive?Nope, I wish it were. tail scales. Completely free for personal use on up to 20 devices. To learn more, visit snark.cloud/tailscale. Again, that's snark.cloud/tailscaleCorey: Welcome to Screaming in the Cloud. I'm Corey Quinn. This is a promoted guest episode. What does that mean? Well, it means that some people don't just want me to sit here and throw slings and arrows their way, they would prefer to send me a guest specifically, and they do pay for that privilege, which I appreciate. Paying me is absolutely a behavior I wish to endorse.Today's victim who has decided to contribute to slash sponsor my ongoing ridiculous nonsense is, of all companies, AWS. And today I'm talking to Steve Rice, who's the principal product manager on AWS AppConfig. Steve, thank you for joining me.Steve: Hey, Corey, great to see you. Thanks for having me. Looking forward to a conversation.Corey: As am I. Now, AppConfig does something super interesting, which I'm not aware of any other service or sub-service doing. You are under the umbrella of AWS Systems Manager, but you're not going to market with Systems Manager AppConfig. You're just AWS AppConfig. Why?Steve: So, AppConfig is part of AWS Systems Manager. Systems Manager has, I think, 17 different features associated with it. Some of them have an individual name that is associated with Systems Manager, some of them don't. We just happen to be one that doesn't. AppConfig is a service that's been around for a while internally before it was launched externally a couple years ago, so I'd say that's probably the origin of the name and the service. I can tell you more about the origin of the service if you're curious.Corey: Oh, I absolutely am. But I just want to take a bit of a detour here and point out that I make fun of the sub-service names in Systems Manager an awful lot, like Systems Manager Session Manager and Systems Manager Change Manager. And part of the reason I do that is not just because it's funny, but because almost everything I found so far within the Systems Manager umbrella is pretty awesome. It aligns with how I tend to think about the world in a bunch of different ways. I have yet to see anything lurking within the Systems Manager umbrella that has led to a tee-hee-hee bill surprise level that rivals, you know, the GDP of Guam. So, I'm a big fan of the entire suite of services. But yes, how did AppConfig get its name?Steve: [laugh]. So, AppConfig started about six years ago, now, internally. So, we actually were part of the region services department inside of Amazon, which is in charge of launching new services around the world. We found that a centralized tool for configuration associated with each service launching was really helpful. So, a service might be launching in a new region and have to enable and disable things as it moved along.And so, the tool was sort of built for that, turning on and off things as the region developed and was ready to launch publicly; then the regions launch publicly. It turned out that our internal customers, which are a lot of AWS services and then some Amazon services as well, started to use us beyond launching new regions, and started to use us for feature flagging. Again, turning on and off capabilities, launching things safely. And so, it became massively popular; we were actually a top 30 service internally in terms of usage. And two years ago, we thought we really should launch this externally and let our customers benefit from some of the goodness that we put in there, and some of—those all come from the mistakes we've made internally. And so, it became AppConfig. In terms of the name itself, we specialize in application configuration, so that's kind of a mouthful, so we just changed it to AppConfig.Corey: Earlier this year, there was a vulnerability reported around I believe it was AWS Glue, but please don't quote me on that. And as part of its excellent response that AWS put out, they said that from the time that it was disclosed to them, they had patched the service and rolled it out to every AWS region in which Glue existed in a little under 29 hours, which at scale is absolutely magic fast. That is superhero speed and then some because you generally don't just throw something over the wall, regardless of how small it is when we're talking about something at the scale of AWS. I mean, look at who your customers are; mistakes will show. This also got me thinking that when you have Adam, or previously Andy, on stage giving a keynote announcement and then they mention something on stage, like, “Congratulations. It's now a very complicated service with 14 adjectives in his name because someone's paid by the syllable. Great.”Suddenly, the marketing pages are up, the APIs are working, it's showing up in the console, and it occurs to me only somewhat recently to think about all of the moving parts that go on behind this. That is far faster than even the improved speed of CloudFront distribution updates. There's very clearly something going on there. So, I've got to ask, is that you?Steve: Yes, a lot of that is us. I can't take credit for a hundred percent of what you're talking about, but that's how we are used. We're essentially used as a feature-flagging service. And I can talk generically about feature flagging. Feature flagging allows you to push code out to production, but it's hidden behind a configuration switch: a feature toggle or a feature flag. And that code can be sitting out there, nobody can access it until somebody flips that toggle. Now, the smart way to do it is to flip that toggle on for a small set of users. Maybe it's just internal users, maybe it's 1% of your users. And so, the features available, you can—Corey: It's your best slash worst customers [laugh] in that 1%, in some cases.Steve: Yeah, you want to stress test the system with them and you want to be able to look and see what's going to break before it breaks for everybody. So, you release us to a small cohort, you measure your operations, you measure your application health, you measure your reputational concerns, and then if everything goes well, then you maybe bump it up to 2%, and then 10%, and then 20%. So, feature flags allow you to slowly release features, and you know what you're releasing by the time it's at a hundred percent. It's tempting for teams to want to, like, have everybody access it at the same time; you've been working hard on this feature for a long time. But again, that's kind of an anti-pattern. You want to make sure that on production, it behaves the way you expect it to behave.Corey: I have to ask what is the fundamental difference between feature flags and/or dynamic configuration. Because to my mind, one of them is a means of achieving the other, but I could also see very easily using the terms interchangeably. Given that in some of our conversations, you have corrected me which, first, how dare you? Secondly, okay, there's probably a reason here. What is that point of distinction?Steve: Yeah. Typically for those that are not eat, sleep, and breathing dynamic configuration—which I do—and most people are not obsessed with this kind of thing, feature flags is kind of a shorthand for dynamic configuration. It allows you to turn on and off things without pushing out any new code. So, your application code's running, it's pulling its configuration data, say every five seconds, every ten seconds, something like that, and when that configuration data changes, then that app changes its behavior, again, without a code push or without restarting the app.So, dynamic configuration is maybe a superset of feature flags. Typically, when people think feature flags, they're thinking of, “Oh, I'm going to release a new feature, so it's almost like an on-off switch.” But we see customers using feature flags—and we use this internally—for things like throttling limits. Let's say you want to be able to throttle TPS transactions per second. Or let's say you want to throttle the number of simultaneous background tasks, and say, you know, I just really don't want this creeping above 50; bad things can start to happen.But in a period of stress, you might want to actually bring that number down. Well, you can push out these changes with dynamic configuration—which is, again, any type of configuration, not just an on-off switch—you can push this out and adjust the behavior and see what happens. Again, I'd recommend pushing it out to 1% of your users, and then 10%. But it allows you to have these dials and switches to do that. And, again, generically, that's dynamic configuration. It's not as fun to term as feature flags; feature flags is sort of a good mental picture, so I do use them interchangeably, but if you're really into the whole world of this dynamic configuration, then you probably will care about the difference.Corey: Which makes a fair bit of sense. It's the question of what are you talking about high level versus what are you talking about implementation detail-wise.Steve: Yep. Yep.Corey: And on some level, I used to get… well, we'll call it angsty—because I can't think of a better adjective right now—about how AWS was reluctant to disclose implementation details behind what it did. And in the fullness of time, it's made a lot more sense to me, specifically through a lens of, you want to be able to have the freedom to change how something works under the hood. And if you've made no particular guarantee about the implementation detail, you can do that without potentially worrying about breaking a whole bunch of customer expectations that you've inadvertently set. And that makes an awful lot of sense.The idea of rolling out changes to your infrastructure has evolved over the last decade. Once upon a time you'd have EC2 instances, and great, you want to go ahead and make a change there—or this actually predates EC2 instances. Virtual machines in a data center or heaven forbid, bare metal servers, you're not going to deploy a whole new server because there's a new version of the code out, so you separate out your infrastructure from the code that it runs. And that worked out well. And increasingly, we started to see ways of okay, if we want to change the behavior of the application, we'll just push out new environment variables to that thing and restart the service so it winds up consuming those.And that's great. You've rolled it out throughout your fleet. With containers, which is sort of the next logical step, well, okay, this stuff gets baked in, we'll just restart containers with a new version of code because that takes less than a second each and you're fine. And then Lambda functions, it's okay, we'll just change the deployment option and the next invocation will wind up taking the brand new environment variables passed out to it. How do feature flags feature into those, I guess, three evolving methods of running applications in anger, by which I mean, of course, production?Steve: [laugh]. Good question. And I think you really articulated that well.Corey: Well, thank you. I should hope so. I'm a storyteller. At least I fancy myself one.Steve: [laugh]. Yes, you are. Really what you talked about is the evolution of you know, at the beginning, people were—well, first of all, people probably were embedding their variables deep in their code and then they realized, “Oh, I want to change this,” and now you have to find where in my code that is. And so, it became a pattern. Why don't we separate everything that's a configuration data into its own file? But it'll get compiled at build time and sent out all at once.There was kind of this breakthrough that was, why don't we actually separate out the deployment of this? We can separate the deployment from code from the deployment of configuration data, and have the code be reading that configuration data on a regular interval, as I already said. So now, as the environments have changed—like you said, containers and Lambda—that ability to make tweaks at microsecond intervals is more important and more powerful. So, there certainly is still value in having things like environment variables that get read at startup. We call that static configuration as opposed to dynamic configuration.And that's a very important element in the world of containers that you talked about. Containers are a bit ephemeral, and so they kind of come and go, and you can restart things, or you might spin up new containers that are slightly different config and have them operate in a certain way. And again, Lambda takes that to the next level. I'm really excited where people are going to take feature flags to the next level because already today we have people just fine-tuning to very targeted small subsets, different configuration data, different feature flag data, and allows them to do this like at we've never seen before scale of turning this on, seeing how it reacts, seeing how the application behaves, and then being able to roll that out to all of your audience.Now, you got to be careful, you really don't want to have completely different configurations out there and have 10 different, or you know, 100 different configurations out there. That makes it really tough to debug. So, you want to think of this as I want to roll this out gradually over time, but eventually, you want to have this sort of state where everything is somewhat consistent.Corey: That, on some level, speaks to a level of operational maturity that my current deployment adventures generally don't have. A common reference I make is to my lasttweetinaws.com Twitter threading app. And anyone can visit it, use it however they want.And it uses a Route 53 latency record to figure out, ah, which is the closest region to you because I've deployed it to 20 different regions. Now, if this were a paid service, or I had people using this in large volume and I had to worry about that sort of thing, I would probably approach something that is very close to what you describe. In practice, I pick a devoted region that I deploy something to, and cool, that's sort of my canary where I get things working the way I would expect. And when that works the way I want it to I then just push it to everything else automatically. Given that I've put significant effort into getting deployments down to approximately two minutes to deploy to everything, it feels like that's a reasonable amount of time to push something out.Whereas if I were, I don't know, running a bank, for example, I would probably have an incredibly heavy process around things that make changes to things like payment or whatnot. Because despite the lies, we all like to tell both to ourselves and in public, anything that touches payments does go through waterfall, not agile iterative development because that mistake tends to show up on your customer's credit card bills, and then they're also angry. I think that there's a certain point of maturity you need to be at as either an organization or possibly as a software technology stack before something like feature flags even becomes available to you. Would you agree with that, or is this something everyone should use?Steve: I would agree with that. Definitely, a small team that has communication flowing between the two probably won't get as much value out of a gradual release process because everybody kind of knows what's going on inside of the team. Once your team scales, or maybe your audience scales, that's when it matters more. You really don't want to have something blow up with your users. You really don't want to have people getting paged in the middle of the night because of a change that was made. And so, feature flags do help with that.So typically, the journey we see is people start off in a maybe very small startup. They're releasing features at a very fast pace. They grow and they start to build their own feature flagging solution—again, at companies I've been at previously have done that—and you start using feature flags and you see the power of it. Oh, my gosh, this is great. I can release something when I want without doing a big code push. I can just do a small little change, and if something goes wrong, I can roll it back instantly. That's really handy.And so, the basics of feature flagging might be a homegrown solution that you all have built. If you really lean into that and start to use it more, then you probably want to look at a third-party solution because there's so many features out there that you might want. A lot of them are around safeguards that makes sure that releasing a new feature is safe. You know, again, pushing out a new feature to everybody could be similar to pushing out untested code to production. You don't want to do that, so you need to have, you know, some checks and balances in your release process of your feature flags, and that's what a lot of third parties do.It really depends—to get back to your question about who needs feature flags—it depends on your audience size. You know, if you have enough audience out there to want to do a small rollout to a small set first and then have everybody hit it, that's great. Also, if you just have, you know, one or two developers, then feature flags are probably something that you're just kind of, you're doing yourself, you're pushing out this thing anyway on your own, but you don't need it coordinated across your team.Corey: I think that there's also a bit of—how to frame this—misunderstanding on someone's part about where AppConfig starts and where it stops. When it was first announced, feature flags were one of the things that it did. And that was talked about on stage, I believe in re:Invent, but please don't quote me on that, when it wound up getting announced. And then in the fullness of time, there was another announcement of AppConfig now supports feature flags, which I'm sitting there and I had to go back to my old notes. Like, did I hallucinate this? Which again, would not be the first time I'd imagine such a thing. But no, it was originally how the service was described, but now it's extra feature flags, almost like someone would, I don't know, flip on a feature-flag toggle for the service and now it does a different thing. What changed? What was it that was misunderstood about the service initially versus what it became?Steve: Yeah, I wouldn't say it was a misunderstanding. I think what happened was we launched it, guessing what our customers were going to use it as. We had done plenty of research on that, and as I mentioned before we had—Corey: Please tell me someone used it as a database. Or am I the only nutter that does stuff like that?Steve: We have seen that before. We have seen something like that before.Corey: Excellent. Excellent, excellent. I approve.Steve: And so, we had done our due diligence ahead of time about how we thought people were going to use it. We were right about a lot of it. I mentioned before that we have a lot of usage internally, so you know, that was kind of maybe cheating even for us to be able to sort of see how this is going to evolve. What we did announce, I guess it was last November, was an opinionated version of feature flags. So, we had people using us for feature flags, but they were building their own structure, their own JSON, and there was not a dedicated console experience for feature flags.What we announced last November was an opinionated version that structured the JSON in a way that we think is the right way, and that afforded us the ability to have a smooth console experience. So, if we know what the structure of the JSON is, we can have things like toggles and validations in there that really specifically look at some of the data points. So, that's really what happened. We're just making it easier for our customers to use us for feature flags. We still have some customers that are kind of building their own solution, but we're seeing a lot of them move over to our opinionated version.Corey: This episode is brought to us in part by our friends at Datadog. Datadog's SaaS monitoring and security platform that enables full stack observability for developers, IT operations, security, and business teams in the cloud age. Datadog's platform, along with 500 plus vendor integrations, allows you to correlate metrics, traces, logs, and security signals across your applications, infrastructure, and third party services in a single pane of glass.Combine these with drag and drop dashboards and machine learning based alerts to help teams troubleshoot and collaborate more effectively, prevent downtime, and enhance performance and reliability. Try Datadog in your environment today with a free 14 day trial and get a complimentary T-shirt when you install the agent.To learn more, visit datadoghq/screaminginthecloud to get. That's www.datadoghq/screaminginthecloudCorey: Part of the problem I have when I look at what it is you folks do, and your use cases, and how you structure it is, it's similar in some respects to how folks perceive things like FIS, the fault injection service, or chaos engineering, as is commonly known, which is, “We can't even get the service to stay up on its own for any [unintelligible 00:18:35] period of time. What do you mean, now let's intentionally degrade it and make it work?” There needs to be a certain level of operational stability or operational maturity. When you're still building a service before it's up and running, feature flags seem awfully premature because there's no one depending on it. You can change configuration however your little heart desires. In most cases. I'm sure at certain points of scale of development teams, you have a communications problem internally, but it's not aimed at me trying to get something working at 2 a.m. in the middle of the night.Whereas by the time folks are ready for what you're doing, they clearly have that level of operational maturity established. So, I have to guess on some level, that your typical adopter of AppConfig feature flags isn't in fact, someone who is, “Well, we're ready for feature flags; let's go,” but rather someone who's come up with something else as a stopgap as they've been iterating forward. Usually something homebuilt. And it might very well be you have the exact same biggest competitor that I do in my consulting work, which is of course, Microsoft Excel as people try to build their own thing that works in their own way.Steve: Yeah, so definitely a very common customer of ours is somebody that is using a homegrown solution for turning on and off things. And they really feel like I'm using the heck out of these feature flags. I'm using them on a daily or weekly basis. I would like to have some enhancements to how my feature flags work, but I have limited resources and I'm not sure that my resources should be building enhancements to a feature-flagging service, but instead, I'd rather have them focusing on something, you know, directly for our customers, some of the core features of whatever your company does. And so, that's when people sort of look around externally and say, “Oh, let me see if there's some other third-party service or something built into AWS like AWS AppConfig that can meet those needs.”And so absolutely, the workflows get more sophisticated, the ability to move forward faster becomes more important, and do so in a safe way. I used to work at a cybersecurity company and we would kind of joke that the security budget of the company is relatively low until something bad happens, and then it's, you know, whatever you need to spend on it. It's not quite the same with feature flags, but you do see when somebody has a problem on production, and they want to be able to turn something off right away or make an adjustment right away, then the ability to do that in a measured way becomes incredibly important. And so, that's when, again, you'll see customers starting to feel like they're outgrowing their homegrown solution and moving to something that's a third-party solution.Corey: Honestly, I feel like so many tools exist in this space, where, “Oh, yeah, you should definitely use this tool.” And most people will use that tool. The second time. Because the first time, it's one of those, “How hard could that be out? I can build something like that in a weekend.” Which is sort of the rallying cry of doomed engineers who are bad at scoping.And by the time that they figure out why, they have to backtrack significantly. There's a whole bunch of stuff that I have built that people look at and say, “Wow, that's a really great design. What inspired you to do that?” And the absolute honest answer to all of it is simply, “Yeah, I worked in roles for the first time I did it the way you would think I would do it and it didn't go well.” Experience is what you get when you didn't get what you wanted, and this is one of those areas where it tends to manifest in reasonable ways.Steve: Absolutely, absolutely.Corey: So, give me an example here, if you don't mind, about how feature flags can improve the day-to-day experience of an engineering team or an engineer themselves. Because we've been down this path enough, in some cases, to know the failure modes, but for folks who haven't been there that's trying to shave a little bit off of their journey of, “I'm going to learn from my own mistakes.” Eh, learn from someone else's. What are the benefits that accrue and are felt immediately?Steve: Yeah. So, we kind of have a policy that the very first commit of any new feature ought to be the feature flag. That's that sort of on-off switch that you want to put there so that you can start to deploy your code and not have a long-lived branch in your source code. But you can have your code there, it reads whether that configuration is on or off. You start with it off.And so, it really helps just while developing these things about keeping your branches short. And you can push the mainline, as long as the feature flag is off and the feature is hidden to production, which is great. So, that helps with the mess of doing big code merges. The other part is around the launch of a feature.So, you talked about Andy Jassy being on stage to launch a new feature. Sort of the old way of doing this, Corey, was that you would need to look at your pipelines and see how long it might take for you to push out your code with any sort of code change in it. And let's say that was an hour-and-a-half process and let's say your CEO is on stage at eight o'clock on a Friday. And as much as you like to say it, “Oh, I'm never pushing out code on a Friday,” sometimes you have to. The old way—Corey: Yeah, that week, yes you are, whether you want to or not.Steve: [laugh]. Exactly, exactly. The old way was this idea that I'm going to time my release, and it takes an hour-and-a-half; I'm going to push it out, and I'll do my best, but hopefully, when the CEO raises her arm or his arm up and points to a screen that everything's lit up. Well, let's say you're doing that and something goes wrong and you have to start over again. Well, oh, my goodness, we're 15 minutes behind, can you accelerate things? And then you start to pull away some of these blockers to accelerate your pipeline or you start editing it right in the console of your application, which is generally not a good idea right before a really big launch.So, the new way is, I'm going to have that code already out there on a Wednesday [laugh] before this big thing on a Friday, but it's hidden behind this feature flag, I've already turned it on and off for internals, and it's just waiting there. And so, then when the CEO points to the big screen, you can just flip that one small little configuration change—and that can be almost instantaneous—and people can access it. So, that just reduces the amount of stress, reduces the amount of risk in pushing out your code.Another thing is—we've heard this from customers—customers are increasing the number of deploys that they can do per week by a very large percentage because they're deploying with confidence. They know that I can push out this code and it's off by default, then I can turn it on whenever I feel like it, and then I can turn it off if something goes wrong. So, if you're into CI/CD, you can actually just move a lot faster with a number of pushes to production each week, which again, I think really helps engineers on their day-to-day lives. The final thing I'm going to talk about is that let's say you did push out something, and for whatever reason, that following weekend, something's going wrong. The old way was oop, you're going to get a page, I'm going to have to get on my computer and go and debug things and fix things, and then push out a new code change.And this could be late on a Saturday evening when you're out with friends. If there's a feature flag there that can turn it off and if this feature is not critical to the operation of your product, you can actually just go in and flip that feature flag off until the next morning or maybe even Monday morning. So, in theory, you kind of get your free time back when you are implementing feature flags. So, I think those are the big benefits for engineers in using feature flags.Corey: And the best way to figure out whether someone is speaking from a position of experience or is simply a raving zealot when they're in a position where they are incentivized to advocate for a particular way of doing things or a particular product, as—let's be clear—you are in that position, is to ask a form of the following question. Let's turn it around for a second. In what scenarios would you absolutely not want to use feature flags? What problems arise? When do you take a look at a situation and say, “Oh, yeah, feature flags will make things worse, instead of better. Don't do it.”Steve: I'm not sure I wouldn't necessarily don't do it—maybe I am that zealot—but you got to do it carefully.Corey: [laugh].Steve: You really got to do things carefully because as I said before, flipping on a feature flag for everybody is similar to pushing out untested code to production. So, you want to do that in a measured way. So, you need to make sure that you do a couple of things. One, there should be some way to measure what the system behavior is for a small set of users with that feature flag flipped to on first. And it could be some canaries that you're using for that.You can also—there's other mechanisms you can do that to: set up cohorts and beta testers and those kinds of things. But I would say the gradual rollout and the targeted rollout of a feature flag is critical. You know, again, it sounds easy, “I'll just turn it on later,” but you ideally don't want to do that. The second thing you want to do is, if you can, is there some sort of validation that the feature flag is what you expect? So, I was talking about on-off feature flags; there are things, as when I was talking about dynamic configuration, that are things like throttling limits, that you actually want to make sure that you put in some other safeguards that say, “I never want my TPS to go above 1200 and never want to set it below 800,” for whatever reason, for example. Well, you want to have some sort of validation of that data before the feature flag gets pushed out. Inside Amazon, we actually have the policy that every single flag needs to have some sort of validation around it so that we don't accidentally fat-finger something out before it goes out there. And we have fat-fingered things.Corey: Typing the wrong thing into a command structure into a tool? “Who would ever do something like that?” He says, remembering times he's taken production down himself, exactly that way.Steve: Exactly, exactly, yeah. And we've done it at Amazon and AWS, for sure. And so yeah, if you have some sort of structure or process to validate that—because oftentimes, what you're doing is you're trying to remediate something in production. Stress levels are high, it is especially easy to fat-finger there. So, that check-and-balance of a validation is important.And then ideally, you have something to automatically roll back whatever change that you made, very quickly. So AppConfig, for example, hooks up to CloudWatch alarms. If an alarm goes off, we're actually going to roll back instantly whatever that feature flag was to its previous state so that you don't even need to really worry about validating against your CloudWatch. It'll just automatically do that against whatever alarms you have.Corey: One of the interesting parts about working at Amazon and seeing things in Amazonian scale is that one in a million events happen thousands of times every second for you folks. What lessons have you learned by deploying feature flags at that kind of scale? Because one of my problems and challenges with deploying feature flags myself is that in some cases, we're talking about three to five users a day for some of these things. That's not really enough usage to get insights into various cohort analyses or A/B tests.Steve: Yeah. As I mentioned before, we build these things as features into our product. So, I just talked about the CloudWatch alarms. That wasn't there originally. Originally, you know, if something went wrong, you would observe a CloudWatch alarm and then you decide what to do, and one of those things might be that I'm going to roll back my configuration.So, a lot of the mistakes that we made that caused alarms to go off necessitated us building some automatic mechanisms. And you know, a human being can only react so fast, but an automated system there is going to be able to roll things back very, very quickly. So, that came from some specific mistakes that we had made inside of AWS. The validation that I was talking about as well. We have a couple of ways of validating things.You might want to do a syntactic validation, which really you're validating—as I was saying—the range between 100 and 1000, but you also might want to have sort of a functional validation, or we call it a semantic validation so that you can make sure that, for example, if you're switching to a new database, that you're going to flip over to your new database, you can have a validation there that says, “This database is ready, I can write to this table, it's truly ready for me to switch.” Instead of just updating some config data, you're actually going to be validating that the new target is ready for you. So, those are a couple of things that we've learned from some of the mistakes we made. And again, not saying we aren't making mistakes still, but we always look at these things inside of AWS and figure out how we can benefit from them and how our customers, more importantly, can benefit from these mistakes.Corey: I would say that I agree. I think that you have threaded the needle of not talking smack about your own product, while also presenting it as not the global panacea that everyone should roll out, willy-nilly. That's a good balance to strike. And frankly, I'd also say it's probably a good point to park the episode. If people want to learn more about AppConfig, how you view these challenges, or even potentially want to get started using it themselves, what should they do?Steve: We have an informational page at go.aws/awsappconfig. That will tell you the high-level overview. You can search for our documentation and we have a lot of blog posts to help you get started there.Corey: And links to that will, of course, go into the [show notes 00:31:21]. Thank you so much for suffering my slings, arrows, and other assorted nonsense on this. I really appreciate your taking the time.Steve: Corey thank you for the time. It's always a pleasure to talk to you. Really appreciate your insights.Corey: You're too kind. Steve Rice, principal product manager for AWS AppConfig. 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. But before you do, just try clearing your cookies and downloading the episode again. You might be in the 3% cohort for an A/B test, and you [want to 00:32:01] listen to the good one instead.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.

Steve Denker, most recently Vice President of Marketing and Digital for Turner Classic Movies, chats with Rob at the virtual 2021 South by Southwest. In this interview, he gives his perspective on what he looks for when “working with agencies.”  In the mid-90s, Steve worked for Aramark at Fulton County Stadium/Turner Field, managing relationships with the brands and products that were part of that stadium experience. He observed how fans interacted with Coca-Cola and highlighted opportunities for Coke to increase sales and strengthen the link between the experience and the product. Coca-Cola liked his approach and brought him onboard to develop the experiential look and feel of Coca-Cola in a wide variety of venues.  After a while, Steve understood that Coca-Cola was large enough that it would be a long time before he would have the opportunity to manage people, explore the emerging field of digital marketing, and gain product sales experience.  He took a position with RentPath, leading the marketing and advertising outreach for apartment guide publications at Apartment.com. From 2001 to 2008, Steve worked directly with companies that “touched” the rental process . . . selling digital advertising to utilities, renters' insurance companies, and movers and helping people find the right place to live. “Moving is an incredibly stressful time,” Steve says. In 2011, Steve joined Relocation.com, doing lead generation and business development out of New York. He connected with an individual who owned the Beach.com domain. Together, they planned to build the world's largest and most comprehensive database of beach and beach destination information. When heavy competition from Travelocity and Expedia prevented Beach.com from getting the desired level of traffic and sales, Steve decided it was time to move again. He values his involvement in this “failed venture.” “I can't tell you the lessons learned from that experience I have taken through everything else I've done, both personally and professionally.” All that “good stuff” found its place when Steve joined a consulting firm in Atlanta. (Steve's Beach.com partner still manages the reimagined site.) In 2016, an old buddy from his Coca-Cola days invited him to build a marketing department at Turner Classic Movies. Steve was at TCM for 4-1/2 years. Outsiders may think large organizations have such a wealth of internal resources that they don't need help from agencies. Far from the truth, Steve says. Agencies are important for their unique talents, expertise, efficiencies, and ability to help “execute the vision.” Steve describes what he looks for in agencies. Once agencies get past the first cut of “Do they have the ability to do what we need them to do?”, he needs to know that they “either already understand our business and who our customers are or have the capacity to understand that in a very short period of time.” He thinks organizational leaders need to have a laser focus on what they are trying to accomplish and understand both functional and emotional business priorities. Steve recently started thefasttimes.net, a weekly culture e-zine for Gen-Xers and wannabes, and reaching out on Instagram and Facebook and Twitter. Transcript Follows: ROB: Welcome to the Marketing Agency Leadership Podcast. I'm your host, Rob Kischuk, and continuing in our South by Southwest series, I am speaking today with a friend, a friend of the podcast, and not an agency owner but a marketer with a tremendous history that I think we will all benefit greatly from. My guest is Steve Denker. Steve was most recently Vice President of Marketing and Digital for Turner Classic Movies. He's based in Atlanta like me, but we are still in COVID quarantine, talking online. Welcome to the podcast, Steve. STEVE: Thank you, Rob. Thanks for having me. It's been great running into you at local marketing and industry events over the past probably 8+ years, and at South by. Hopefully I'll have a chance to work with Converge and/or Bellwood Labs in the future. ROB: I appreciate that. I think I met you one fine day when you wandered into the Flashpoint Startup Accelerator here in Atlanta in the season of Beach.com. At least, that's a memorable moment in your career. But you've done a great deal of things. Why don't you start off by running through your journey and path in marketing, to give us an idea of the context you come to us from? STEVE: Sure, thank you. And I do remember that day when we met downtown. I started out – I'll back the train up a couple of stops. I grew up in Philadelphia and went to school in New York and came down to Atlanta in the mid-90s for a company called Aramark that was responsible for the concessions, the merchandise, and general operations at stadiums and arenas around the country, among some other businesses that they're in. I started working at Fulton County Stadium and eventually what became the new Turner Field. My position really was more in an operations role, but I was responsible for the relationships with all of the brands and products that were part of that stadium experience. I was working with the Budweisers and Starbucks and Bluebell Ice Cream, Coca-Colas of the world. Any product that was looking to get in front of those fans. It's interesting how I eventually used that relationship to transition to a role at Coca-Cola because I was watching the fans and seeing what they were doing at every game. I had the opportunity to watch their behaviors and see their traffic paths and their buying habits and so forth. So when Coca-Cola brought a team down once or twice a season to take a look at their assets, I had the opportunity not just to nod my head and say, “Yeah, the umbrellas are faded” or “We need new menu boards,” but really share with them what was going on and how the fans were interacting with Coca-Cola and how it was part of the experience to watch a Braves game. By putting together some plans and sharing with them where I thought they could not only accelerate sales, but also make the brand more part of the experience, I caught the attention of a few folks within that sports and marketing group, at the time called Presence Marketing. Not long after the Olympics, I transitioned over to that group at Coca-Cola and was then part of that experiential look and feel of Coca-Cola at stadiums and arenas, Disney, Universal, and so forth, in a creative capacity. It was a terrific move. The group was run by Steve Koonin, who is just Atlanta royalty and the CEO of the Hawks and State Farm Arena. He really was bringing so many innovations to this group and to the way that Coke was marketed. I was really fortunate to be part of that team and that group. From there, a couple of years later, I had an opportunity to go to a company most recently called RentPath. At the time it was called PriMedia. Also here in Buckhead. What was missing at Coke at that time when I left – I think there were three things I was really looking for that were going to take a while. I was looking to manage people and learn how to do that. I felt that was a good next step for my career. That would've taken a while within that multinational structure. Digital was something that, in the early 2000s, was really the forefront of what the next part of marketing was. Coke wasn't paying as much attention to it as other companies were. Then finally, I was looking for something that would give me real sales experience, not just internally and working with other groups, but actually selling products. Again, I thought that would be something at the early stage of my career that I would learn and use for the rest of my days in terms of working in any capacity. So RentPath offered those and more, and I went over and led the marketing and advertising for the apartment guide publications at Apartment.com. This was early on lead gen and getting folks into and around their apartments, their living situations. It was really interesting, because it was working directly with any company that has to do with that process, whether it's your utilities and your phone, renter's insurance, physically moving – anything like that were opportunities for myself and my team to sell advertising to. These were the early days of digital advertising, if you can imagine: banner ads with CPMs of $60-75 and relatively no accountability. Not even serving accountability. Forget about click-through rates; did you actually serve the ads I just paid for? That was even, at the time, a little murky. Companies just wanted to be part of it. As long as they went onto the website and saw their ad, they said, “Keep serving it.” It was really interesting to see the growth of the industry from, again, banner ads and text ads to what it is today – particularly at that time of 2001 through 2008, when it really exploded into the framework of what we see today with data and analytics and accountability. It was exciting to see that grow. I left for a company called Relocation.com, which was lead generation and business development out of New York. I'd spend a week a month in New York and then back to Atlanta again. I connected with someone in New York who owned the Beach.com domain, and we had plans to build the world's largest database of beach information. Not just every beach in the world, but hotels, vacation rentals, restaurants, activities, local information, local concierge services – really anything that would have to do with a beach destination or vacation, and build out this massive portal. At the time in 2011, this is when people really were using Travelocity and Expedia. There was heavy competition from these other sites. We went ahead and raised some money, built a plan, and it just didn't take off. It didn't get to the level in terms of traffic and converting users into revenue and sales that we had hoped for. All shook hands a few years later, back in 2013, and the site is still live right now. My partner at the time is still running it with a couple of different objectives. But I can't tell you the amount lessons learned from that experience I have taken through everything else I've done, both personally and professionally. I look back at that and have no regrets on taking that business risk. I think if we had done a couple of things differently – many things differently – we would've had a different outcome. But again, we pivoted. A lot of key learnings from that that I've been fortunate enough to share with other folks. That's what I did after that at a consulting firm here in Atlanta and had some great client relationships with companies like PDS and a company called AGRO Merchants Group, a healthcare company, we did some work with Blackstone. Eventually, one of my earliest relationships from Coca-Cola, a woman named Jennifer Dorian, who is a mentor and a friend and could not be a bigger rock star – she's now the CEO over at Atlanta Public Broadcasting & Radio. She was on Steve Koonin's team as well. I worked with her in the Coca-Cola days and had stayed in touch with her really for 20 years. We were having coffee or lunch once or twice a year just to catch up and so forth. She at the time was general manager of Turner Classic Movies and gave me a call and said, “Hey, we're looking to build a marketing department and expand what we've been doing.” This was in late 2016. She said, “Would you like to come over and interview with a bunch of people?” I did that, and a couple of months later I had moved over to Turner and had an amazing four and a half years there. ROB: It's quite a journey. I think it's interesting to point out that all the way through Beach.com, and probably a little bit after that as well, you were in early on the customer journey. Moving, to an extent, is kind of the ultimate customer journey. You combined that in the digital space. You mentioned the high CPM, but the customer lifetime value is also quite high if you can get somebody into an apartment for a couple of years. STEVE: Absolutely. That's a great point. Not only is it part of that initial customer journey – wherever that came from and whatever company claimed to own that verbiage and so forth, it was the beginning of that – but it was also, I think, a very critical time when working with customers. I was working in industries where you really can't screw it up. In other words, moving is an incredibly stressful time. If someone doesn't find the right apartment, if you haven't given them all the information – and again, we were the connector. We weren't the apartment complex, but we were certainly helping them find that right place. But if they didn't move into the right place, if they found out it was an hour commute from where they worked and they didn't realize that, or if they moved into a place in Alpharetta and their friends were all in Buckhead and they didn't realize it was a 45-minute drive, not 10 – all of these different things, they looked back and they were upset with us and the recommendations we made. And on the moving side, same thing. Again, it's very stressful. If that moving truck doesn't show up on time – think about all the things physically connected to moving your stuff. You're trying to time everything out on a particular moving day. It could be hooking up utilities or having to be out of one place and into another. If something isn't right and you realize that all of your possessions are now on an 18-foot U-Haul and that is broken down on the side of a road, it's not good. So I think it's understanding how important it is to take care of the customer and really understand what it is emotionally they're going through when they're finding a place to live, when they're physically moving. At Beach.com, it was your vacation. Most people have two weeks a year, and that vacation is very important for them to recharge and connect with family or friends. It's an important part of your life. If somehow I was part of an organization that screwed that up, it was on me, and it was something that I took very seriously. ROB: Definitely a lot at stake there. Steve, one thing I think you can shed particularly interesting light on is maybe your time at TCM. You have a unique perspective for a guest on this podcast. You're kind of on the other side of the table from the marketing agency, so I think it would be interesting to explore TCM through the lens of what that brand–agency relationship can look like. STEVE: Sure. Absolutely, I'd love to do that. At TCM, we really looked at ourselves as part of the larger Warner Media portfolio. I think every brand looks at themselves as their own business, and we were certainly no different in that we had a very clear set of objectives and goals in terms of growing our brand to the audience, making sure that people not only tuned in and watched, but also couple participate in other ways if they didn't have TCM on cable. Now there's HBO Max and ways to watch, but also, there are a lot of other events and other enterprise businesses that TCM was a part of. Running all these events, I think some people from the outside may look at a company like Warner Media, AT&T being the parent, and say, “Oh, there's got to be so many resources within the company that there wouldn't be a need to tap into agencies.” That couldn't be further from the reality. I've worked with agencies for a very long time; they bring unique talent to a company like Warner Media and particularly TCM. We would work with agencies for their expertise, for their efficiencies, and for them to help us execute the vision. They were a very important part of what we did. We had a couple of different ways we could structure relationships. Certainly, there were some contractors or freelancers that could come in for some very small projects or very specific projects that maybe had to do with production or one part of a creative execution. But for the most part, working with agencies was something that we did, and we worked with a couple of Atlanta agencies that really knocked it out of the park for us. On the TCM side, early on when I started, we had a product called FilmStruck, which was this amazing streaming service of independent, foreign, and arthouse films. It was the first streaming service that Turner had launched, and eventually it was shut down to make way for HBO Max. But as we launched it, we worked with Nebo here in Atlanta. This team really dove into that customer journey and what the needs were, really end-to-end, of generating subscriptions and long-term value from those users, and ways to distribute and share what we were offering and get it out there. Again, these were not things that internally we had access to. I think a lot of us had pieces of the puzzle in our backgrounds and we had some very good folks internally that had acquisition experience, subscription acquisition experience even. But tying it all together – if you think about every customer touchpoint from copy for the website, both the frontend and the backend, things like thank you emails, things like the weekly newsletters and drip campaigns to get people excited about new content and new programming coming, ways to reengage folks, knowing how much time they're spending on the service and ways to get them excited about spending more time, sharing with friends, seasonal deals like “Hey, get this for someone for Mother's or Father's Day or a holiday subscription” – all of these different occasions to buy and reasons to stay are things that they helped us with in terms of those campaigns. ROB: How did you think about the agency selection process? Did you have a bake-off of some sort? Did you know what direction you were leaning? Because knowing the Turner/Warner Media ecosystem – I know local shops who have built web games for Falling Skies; I know global agencies on the PR side who've done analytics work for TBS and TNT. So you could really run the spectrum. How did you approach that selection process? STEVE: Right now – and this wasn't available for a couple of years while I was there, but has come on – there's now a database within Warner Media. Folks that work with agencies all around the country or international ones put in – it's not a scoring process and you look for the 90s or above, but it's more or less, “Hey, I had an experiential agency work on a large outdoor event with us. They did an amazing job. Here's the contact information, here's what they did, here are some pictures.” That exists now. So that's certainly a tool that I think some folks at Warner Media are using. When we selected Nebo – and more recently 9Rooftops, which has a great office here in Atlanta, that did some great work for us as well – so much of it is word of mouth and being in the Atlanta community, being part of AMA. That's exactly what I did. I reached out to a good friend of mine, Joe Koufman, at a company called Setup, and said to Joe, “Listen, I'm looking for an agency. This is what we need them to do. This is an outline of the project. What do you recommend?” He came back with three or four really strong recommendations, and that's where I started. Then from that, we sat down with the agencies – and I'm not a fan of having agencies do work for free. I don't think that's right. I don't think that's a way to start the relationship. So we didn't ask any agency to produce work; we really just had conversations with them to share ideas. We said, “Here's what we're looking to do. Come with some ideas.” Each of them got a time slot, and we, again, just had a conversation with them. For Turner Classic Movies – and I imagine this is the case with a lot of either networks or other brands – the number one thing that I look for in an agency is that they either already understand our business and who our customers are or have the capacity to understand that in a very short period of time. Certainly the agencies that I spoke with all got it. They came to the table with ideas around that. Now, they don't know all of our business, and that's completely to be expected. We didn't expect anyone to understand some of the internal ways that we connect with our audience. Those are things that as soon as we awarded the business, very early on we sat down and shared that. It may have even been at a late stage pitch that we shared it. But we're looking for an understanding of what we do and why we do it. If an agency gets that – because every agency we're talking to already has the technical capabilities. There's no doubt. There's a ton of talent. But it's a matter of, do you understand what we're trying to do? And then really understanding the logistics of who's going to be working on this and your process, the best way to establish how we communicate together, how we discuss the deliverables together, and who leads that on each side. ROB: That's a great client-side perspective. The empathy required, the value of reputation, the value of community engagement. It's so interesting. I'm in this mode now where people we're talking about working with – people still want to get together for lunch. In spite of, and maybe especially because we've all been in our houses for the most part for the past year, people are like “Let's catch lunch outdoors.” That's in bounds for me right now; some people are holed up. But geography, it seems, is still going to matter quite a lot. At least people will say, “I want a company with a local presence.” Nobody really even knows what that means sometimes, but it's what we want. STEVE: Again, there's so much talent in Atlanta. I think looking outside of Atlanta in most cases is really not necessary. The talent is here. It is really nice to have face-to-face meetings. We all know they'll be coming back. Even now, I've had several meetings outside at large picnic tables at a park or a restaurant with folks. That's really how you get to connect with people you're working with, especially on these types of relationships where it's really important that everyone understands what the objectives are together. I'm just a believer in face-to-face when it comes to things like that. I know certainly working remote right now has worked for many people, and even if agencies are local, they may have folks on your account that are in other cities. We worked with a company and that was the case; someone happened to be very talented on the digital team that worked out of South Carolina. And that worked out fine as well, but it was still nice to be able to have some reviews together in person. Again, I'm such a believer in Atlanta being this epicenter of culture and talent and tech, and that's who I want to work with. ROB: That's something for us all to think about as we start to emerge. Steve, you had some thoughts on some key lessons you've learned along your journey as a leader, as a marketer, as an executive. What would you reflect on if you could talk to your younger self about what to think about as you develop? STEVE: [laughs] I don't know where I'd start. That's funny. I think looking back, Rob – and it's such a great thing to do every once in a while, even if you're not talking about it to other people, but just to reflect on things you've learned. I can think of several in particular, and a lot of them are coming out of the Beach.com experience I had, but I think some of these apply throughout my career. Certainly engaging with customers to understand what it is they want, how they want to receive your information, when they want to receive it – you remember the beginning of that whole integrated marketing push? That's what people said integrated was. I think there's a through-line to everything we do now. There are so many different ways to receive information, so many platforms. But at the end of the day, if you don't understand what your customer wants and how they're going to react to what you're sharing with them, what that call to action is, then I think there's always going to be a miss. That's something I've learned that I took with me from those days on throughout the consulting and throughout my time understanding our audience at Turner Classic Movies and HBO Max. Next, I would say having someone that has either domain or IP expertise on your team or advising your team is so critical because again, that's the type of experience – when I was at Beach, we really would've benefited from having someone in the travel and hospitality business being a close advisor to us. I think we all thought because we were customers, we knew what other customers wanted, but we weren't seeing the big picture. I was just seeing it at the time for myself, married and two young kids, “This is how I vacation so everyone probably vacations like this. This is how we plan,” not knowing that that's a very small segment of how it's done. So I think having that advisor or having someone baked into the company that really understands – that domain expertise is critical. I would say probably the most important thing I've learned over time is just having a laser focus on what it is you're working on and really understanding both the functional and the emotional priorities of the business. And that focus isn't just for entrepreneurs; I think it's just as important in mid-size and large multinational companies. It's a challenge when you manage high-achieving and creative people. They always want to bring new ideas and new innovations to the table, and that's a great thing. That's what you look for as a leader. But I can't tell you how many times I said to my manager at Turner, “Look, this is only going to take 5 minutes” when nothing takes 5 minutes. What a lot of people don't realize, and it took a while for me to learn, is that it doesn't just take time away from what you're currently working on; there's an opportunity cost as well when you try to veer off the course – even to do something that wasn't necessarily in your plans, but eleventh hour, something popped up and you thought to yourself, “We should add this in.” Sometimes you need to make concessions and figure out a way to make it work, but I would say most of the time, all it's going to do is create a distraction. It's easy for that to happen. You could have marketing plans and then something like Clubhouse pops up and you're like, “We need to be on Clubhouse. We should create a room and get some experts to join us and talk about our product or service.” That might be a great part of the strategy, but if that's not what you were initially planning to do, then 9 times out of 10, it's better to continue to focus on what it is you were doing and then work that in as your next objective. I think that focus – I had on a whiteboard in my office at Turner the word “focus” for all 4 years before we got shut down and everyone worked from home. The word “focus” was in my office, and I saw that word every single day. Of everything that was written and erased and written and erased on the whiteboard, that was the one consistent thing. Never erased it. That was my constant reminder that nothing takes 5 minutes and that you've got to really keep driving those clear objectives and deliverables and not create unnecessary distractions. ROB: Right. It's such a good practice to, number one, not do something that's going to blow up in your face, and number two, not discard the thing you've already been very intentional about putting together. Steve, we normally wrap these conversations with a couple of different questions. I think they tie together for you. Number one is typically “Where should people connect with you?”; number two is “What are you excited about that's coming up marketing-wise?” I think you have those things linked together where we can get a much bigger dive into your mind and connect with you as well. STEVE: Sure. Again, this has been such a fun conversation. I would say in terms of the future and what I see, I don't think marketers should be thinking about things ever going back to normal. I think how we play and consume media, entertainment, food, healthcare, all of this, this whole sense of community is being redefined in front of our eyes. It's a generational opportunity that's going to impact customer behaviors from now on. It's not a trend; it's really a seismic shift that's going to resonate across the culture and economy and all of our personal and professional relationships. It opens up an opportunity to be more creative and more innovative than ever before, and I think there's going to be some things we've done in the past that we're going to have to decide to let go. Other things we're going to hold on to. Those are some of the things that excite me right now. I do think as a society, we need to get a little bit higher up right now. I think we need to work on making people feel less isolated and part of a community. I don't think that's going to go away when people can start gathering in small groups. The pandemic has exposed a real ripple in people feeling alone, and that's something that I think marketing can play a big role in: really helping people find their community or communities. Personally, I've had a lot of meaningful conversations since I left TCM and Warner Media, exploring high growth in entrepreneurial opportunities, looking to where I can create long-term value at scale and really do good. So that's what's on the horizon for me in terms of what I'm looking for. And then on the side, I started something really fun with my wife and some good friends of ours. We started an e-zine called The Fast Times. We always talk about how Generation X, which I'm a part of, sometimes gets the short end of the stick. We weren't born with a cellphone in our hands, and we certainly didn't save the world like the Greatest Generation. We just listened to really cool music and watched really fun movies and were latchkeys and came home to an empty house and made the microwave dinners and so forth. So we thought, what could we do to really have some fun with Gen X and the fringe on each side of younger Boomers or older Millennials? So we created this e-zine. We're sending it out once a week, and then a special edition on Mondays. It's taking a look at culture and how it intersects with both nostalgia from the '80s and early '90s and having this modern lens on things that are happening today. It's kind of with this smart snark, I would call it. It's the fun voice of the '80s, voice of that Gen X. Lots of sections in it like “We Got the Beat” and “Channel Z” and “Parents Just Don't Understand,” all very brand-driven throughout it. Ultimately, this may be a vehicle for sponsors and advertisers as our subscription base grows. But right now, we're doing it – I love reading. I read probably at least an hour a day and love writing, and it's a fun way to stay sharp and create something. Again, we'll see where it goes. ROB: Congratulations on that launch. Where do we go to find that? STEVE: You can sign up for that at thefasttimes.net. Even the address is nostalgic, the .net. Go ahead and sign up and give it a shot. We also are having a little bit of fun on social platforms, on Instagram and Facebook and Twitter. We hope you like it. ROB: That's excellent. Steve, thank you for coming on the podcast. Thank you for sharing. I certainly look forward to connecting back in person. I look forward to seeing what else you take on next. It seems like it'll be a natural continuation of a really good story, so thank you for sharing with us. STEVE: Thanks again, Rob, for having me. As I said, I really believe you're the epitome of this. Everything that people are reading about in terms of the surge in Atlanta, in the tech space, in the companies interested in coming to Atlanta, you're the epitome of this. You started Converge bringing in outside investment and then growing it here in Atlanta and being part of the innovative labs and teams here. This is exactly what it's all about and what everyone is hoping this unwritten story of Atlanta is, and you are a very early author of it. Thanks for having me. ROB: I appreciate that. You're very kind. There is a lot of good stuff going on here in Atlanta, and we'll keep on sharing it. Thanks so much for coming on, Steve. STEVE: Thank you. ROB: Take care. Bye. STEVE: Bye. ROB: Thank you for listening. The Marketing Agency Leadership Podcast is presented by Converge. Converge helps digital marketing agencies and brands automate their reporting so they can be more profitable, accurate, and responsive. To learn more about how Converge can automate your marketing reporting, email info@convergehq.com, or visit us on the web at convergehq.com.

I have a very special guest for you today! Frankly, I'm very shocked that we are able to get someone with such incredible stature in this show. SHE’S AMAZING! She's an incredible individual and we're all very lucky to have her here. I'm not gonna say the name of her MLM. I wanna keep it very company neutral so this remains a PURE marketing knowledge place. She… Has helped open 40 countries for the network marketing company she's a part of. Has a downline of over FOUR AND A HALF MILLION people! Is an INCREDIBLE person and she has a podcast called MLM Game Changer. We're VERY privileged to have her on here today. Teresa, welcome to the show. THE QUEEN OF OFFLINE RECRUITING Teresa Harding: Thank you! I am REALLY excited to be here and I honestly feel really honored because you’ve been a mentor for a lot of the things that I've learned. Thank you for having me! Steve: That's awesome, thanks so much. People may not know you yet or have listened to your podcast yet… How did you get started in this game? Teresa: Oh, my goodness, I HATED network marketing. I thought it was almost EVIL. There were experiences where people tricked you into coming to a meeting at their house… They invite you to dinner, that whole thing, and I couldn't stand it! I was not interested AT ALL. https://youtu.be/aqn-PxmrYGE My sister invited me to a class, and I love my sister. We're very close. I knew I was going to go support her but I told my husband, "Look, would you please come with me? I have to go to this thing because I have to support her." So I went and I was SURPRISED by the product. As you guys all know… Network marketing companies often have pretty amazing products. Steve: Amazing products! Teresa: I didn't know that at the time… Ours is a health product. My niece at the time was two years old… She started having some pretty serious neurological problems that were pretty scary, and someone told my sister, "Oh, you should try this product"... And I thought, "Oh, brother, are you kidding me?" The support and what I saw was actually UNBELIEVABLE… So I started researching and looking into it and ended up WANTING the product but NOT gonna the business. I started using the product and helping people with the product and I started getting a little paycheck but I WASN’T trying to build. BUILDING AN OFFLINE RECRUITING BUSINESS So, I thought, "Fine. I'll do this for three months. I am not talking to my friend and I am not talking to my family." Steve: Right! Teresa: In that, I think we're kindred spirits. I have heard SO MANY of your trainings! That's how I got involved, fell in love with it and now, LOVE… Helping people Network marketing Steve: When did it start becoming a REAL thing for you? You're like, "Man, this is actually something that I wanna go full-time into and get four and a half million people"? Obviously, it didn't happen all at once… But what did that look like? Teresa: And of course, it doesn't happen by yourself. It really takes A LOT of people working hard together and I have a lot of amazing leaders on my team, as you can imagine. Once I decided I'm gonna do this for three months… I'm kind of a go-getter and I always reach my goals. My goals are always crazy high where I constantly have naysayers telling me it can't be done, and I just go ahead and do it anyway… I don't always reach them as soon as I want. I decided to try it for 3 months and then I went after it… It was working and it was UNBELIEVABLE! NETWORK MARKETING IS HELPING PEOPLE I quickly discovered that it really IS about helping people. I built mine offline at first and it's just been amazing. And I absolutely that you don't pressure people. It's not about chasing, hunting people down. We are not the hunter and they are not the target. Steve: Yeah, absolutely. One of the biggest questions I get, and I'm sure you get it all the time, is… “How long have you been at it?” And I feel like the thing that they're asking is, “Is it really worth it for me to go after that?” And they're trying to find some logical reason to release themselves from the pressure of moving forward. With that backdrop, and everyone now knowing how I feel about that… How long have you been at it? Teresa: I've been doing this for 11 years. At first, I was doing it part-time because I was a stay-at-home mom. I'd never really been involved in business before. Of course, I had skills and I had been to college… But I wanted to raise my own kids. So, I did that and this came about right as my kids were getting a little bit older. I would only do it part-time while they were at school or at their sports practices and things like that. NETWORK MARKETING PART TIME For the first several years, it was very part-time… But I'm an overachiever, which is fun for me. I would get A LOT done in the time that I had but then… As it got to a point where I could spend more time on it and I was able to do it full-time, I remember the day thinking, "Okay. Now, let's see what we can do." At that point, I was a pretty high rank (third from the highest rank that you could achieve in the company). I'd achieved A LOT… Steve: That's so awesome. Teresa is 100% the queen of offline building. You have this down to a SCIENCE. You're so good at it, you're known for it. You have your own programs on that as well! Did you learn those things? I'm sure some of it was discovered along the way… Better tactics and methods on recruiting... How do you start getting really good at that? Because MOST don't. Teresa: First of all, you have to know… I am EXTREMELY opinionated about how it should be done. The way that people pressure and try to approach all their friends and family… I did not agree with that AT ALL! We DO have people make their list… But the way they approach is absolutely about WHAT they know that person actually NEEDS. The thing I fell in love with when I found your online stuff was that we had been trying to figure out online for the last four years and we HAD figured it out… But not to the extent that you had. NETWORK MARKETING ONLINE When I found your stuff I freaked out because I was like, "Oh, my goodness." We HAD figured it out, but that was the icing on the cake! We've geeked out over you… Over ClickFunnels… All of that. The way that you teach online, that's exactly how you should be doing it offline. All the things that you do… Attract the people who are interested Don't go after the people who are not interested Not trying to get every single person on your team If you're worrying more about the other person than yourself… You're meeting their needs and solving their problems. If you can solve their problems, you'll continue that journey together. But if you CAN’T, you can still be friends. You don't need to bring up that stuff all the time. The best compliment I ever got was when a neighbor of mine came to me needing something for a health situation. She didn't use our product, but she knew of our product. She needed to find something for her daughter and asked if we had anything. I told her “Yes”, I was HELPING her. She said, "There are a lot of people in our neighborhood who do your business… My husband said, I don't want you talking to anyone else, I want you talking to Teresa because she won't hound us, and she won't bug us." Steve: WOW! Teresa: That's probably the most powerful compliment because that is EXACTLY how you build offline… NETWORK MARKETING ONLINE VS OFFLINE You do the same things that we do ONLINE… There are just some tricks to figuring out how to do it online, in the same way there are some tricks to figuring out how to do it offline… It's just it's faster online, which is so exciting as we've gotten into that! Steve: It's funny because the way I think about the Internet… There are a few very easy plays (like little football plays) that I think about. "I'm gonna run that play, I'm gonna run that play." And I just know it just works because it adds value before you go follow up with asking them to actually join. What's one of your favorite methods for offline growth? Teresa: We actually have some scripts that we give people for different types of situations… So many people say too much, or say it wrong… The nice thing about online is you write it in the funnel, then it's there and you don't mess up. The hard part about offline is you need to LEARN how to say things… Ultimately it’s about: Asking them questions Finding out what it is that they need In the online space, we try to touch those emotions that make them feel like we are talking to them… That's the exact same thing we're doing OFFLINE where we're finding out WHAT their needs are. That's ONE thing that we do… OFFLINE RECRUITING TECHNIQUES The second thing we do is, any time I meet someone… I am not trying to bring up my MLM. I am trying to get to know them, making new friends… It's fun for me! I make new friends! I travel a lot internationally and I make new friends. When we're talking, two things ALWAYS come up… Your business or what you do for work Health If I saw a movie that I wanted to tell you about… I'm not gonna make any money off that movie. But if it was so awesome, I'm going to want to tell you about it. "Steve, oh, my God, have you seen that movie? It's awesome, you have to go and see that movie." I would do it the same way whether or not I'm gonna make money off of that. If it's really something that I feel that way about and I could help people with, then that's how we approach it. Steve: That makes total sense, it is very natural with that approach. That's very cool. One of the reasons why I started doing MLM on the Internet is because I was so afraid to talk face-to-face with people. In that four and a half million you must have someone who's fearful of talking face-to-face? So I was like, "Well, I'm kind of a nerd. I'll go create a system, but that's really nerdy and most don't go do that." For all the people who are like, "Alright, Teresa, how do I go do it? I've got Steven's stuff but I still wanna talk face-to-face." What do you say to those people who are just super scared of talking face-to-face, how do you get over that fear? OFFLINE RECRUITING = FACE-TO-FACE Teresa: There's at least ONE person in four million… Probably every single one has been there… Even when I was super confident and had been presenting in front of tens of thousands of people… I would still get in front of someone on the airplane and all of a sudden something would happen and I would wanna be careful not to make it awkward. Steve: Yeah, just clam up in the air… Teresa: That's ALWAYS a thing… We: Teach people Do role Have a script that is super simple and not awkward, that anybody can use … You could totally use it for your company. It says HOW to offer the sample (or whatever you're gonna do) and it's so powerful. IT WORKS. Our numbers increase significantly when we use this script. It tells you what to say to them if they had a: BAD experience GOOD experience We have spent so many marketing dollars on figuring out HOW soon should you respond to someone. For example, with your email sequence, you know EXACTLY what days you're sending those out. Steve: Boom, BOOM, BOOM! Teresa: It's the EXACT same thing! You give them the sample, and three days is waaay too long. If you do it the next day, they feel like you're hounding them. They're like, "Why won't you leave me alone now?" FOLLOWING UP WITH PEOPLE IN NETWORK MARKETING TWO DAYS is perfect, and you warn them ahead of time. For example, I always tell them I’m going to contact them, tell them why, and tell them how. That sounds like it can be so dramatic, but listen to this, it's super simple… So if I said, "Hey, Steve, you've got this thing, okay? Try it like this and I'll give you a call in a couple of days to see how it's going." Steve: So it's seeded… I don't feel pressure. Teresa: Now when I do call you, you're not going. "Why is she calling me again?" You're going, "She is taking such awesome care of me. I can't believe she's taking the time to do this with me." Just little things like that. I've seen your trainings on sales pages and the wording that you do. It's exactly the same thing, it really is. Steve: That's so cool! Yeah, many people have asked how do they do offline. It's the same... I'm not going to build a funnel, I'm just gonna do it my way. That IS a funnel. It doesn't matter whether it's online or offline. Funnels existed when the first caveman traded a rock for a piece of whatever. Teresa: That's why I was so excited when I found your stuff. You took the real way to do network marketing that is truly helpful, not pressure… And you put it online. You didn't change it and mess up the system. THE BEAUTY OF ONLINE RECRUITING The beauty of online is you can do it faster and reach more people. If you can spend ad dollars, that's even better. I have made more stupid mistakes than anybody network marketing… I am quite sure. So I know my stuff inside and out. I was learning the online stuff and digging even deeper, and going, “How fun to connect the two, how fun to put it together and go, wow, this is honestly moving into the 21st century!” Steve: It's taken FOREVER! We’VE got a lot of up-lines that are AFRAID of it… When did you start reaching out for assistance and help and growth? Were you consuming books and CDs and courses? What kind of training did you consume at the beginning? Teresa: When we first started, I'd never done this before… I didn't have any connections in the industry and I had not had any success myself because I was BRAND NEW… So I went to the owners of our company (who are pretty renowned) they're amazing in the industry. But they're not used to doing what we do... But they were EXTREMELY helpful. I learned as much as I could and I basically went to them and said, "Okay, you tell me who's making the most in network marketing and you tell me what they're doing, and then I will try to mimic that." NETWORK MARKETING BOOKS Then started reading tons of business books, tons of network marketing books… I can't even share my gratitude enough for the people who come before who spent their lifetime learning all these things so that I can learn in a book what it took them years and years to learn. There's always great information… But I'm pretty opinionated about that whole pushy network marketing attitude. And there are some books out there that are very much that way. You will NEVER hear me advocating that. I absolutely don't think it's necessary. Obviously, it's not. I believe that that's ONE of the reasons our team is so massive… Because it doesn't feel that way. I devour books and I read like crazy. I was on Goodreads, and they had this reading challenge last year where they said, "How many books do you wanna read?" We were living in China and I thought, “This is a busy year, so I probably better just say one book a month, even though I know I read a lot.” By the end of the year, I had read 40 books. Steve: What happened to your team growth when you started consuming all that training? Teresa: Oh, my goodness! What happens is, your team grows exponentially! OFFLINE RECRUITING TO ONLINE RECRUITING Not just in relation to how much you're learning, because you know what it's like… The more you grow your business, the more you have to face things about yourself that you didn't necessarily wanna face. Steve: And it sucks. Teresa: It's weird… It's like you hit these lids that you don't realize you're hitting until you up-level your skill in that area… You become a better leader, you learn something more that allows you to lead better, grow bigger, and progress more. Steve: I think of it like those rock tumblers that we used to have growing up… Did you ever have those? You put all those rocks in and it’s super loud, really annoying… Then you pull it out and you're like, “Oh, that was awesome.” The nastier the rock, the more beautiful at the end. Teresa: Smooth and gorgeous and a color that you didn't even know. Steve: So you started building and building and building offline (obviously) and then… And then did you start taking that offline-to-online growth? Teresa: It's never perfect… You always have things to learn but we knew how to do that offline building, no problem. I started trying to do live seminars about six or seven years ago because I thought, “We know how to do this, we are good at this.” If we can get MORE people in the room, we go BIGGER, we can go FASTER. It worked and we were starting to figure it out… I actually partnered with some people who had run massive events for people like Zig Ziglar… But it takes A LOT of capital and you're flying the whole team out to the area, going to Colorado and all of a sudden, it hit me… FIGURING OUT ONLINE NETWORK MARKETING You think I'd have figured this out sooner, but I was like, “Duh, if we're gonna do this, why do it live? Why not do it online?" That's when I started going, "Dude, we figured this out online and then, of course, we can go do live events and people will come," It has been so fun and so expensive until I found you guys. We had gotten the cost per acquisition down pretty low… Lower than anyone I know aside from the people that you train. AND THEN, I found your stuff and it was so exciting. And in fact, we brought a little gift for you. Steve: Oh, yeah? Teresa: Can I share this little surprise? Steve: Absolutely. Teresa: We made this for you. Steve: Oh, yeah? Teresa: I just have to tell you that my office team, my employees have been really excited about this and they've been sharing this all over the office over and over again. We have a segment… I won't share the whole thing here because it's too long. The one that we're going to give you is four minutes long, but this one is just 15 seconds… Steve: I'm so excited! NETWORK MARKETING MAGNET Teresa: That's part of what draws people to you and to what makes you a magnet. We have a four-minute segment that is just super-fun and I'll just tell you… We didn't have time. We're gonna give you this and you can use it for however you see fit. It might just be fun to have as a sound on your phone. I'm gonna turn that into my ringtone for you. Steve: Oh, it sounds good. That's awesome! I was speaking at an event once and there's a Q&A section at the end… This lady stood up and she said, "I know you're thinking about apps. Will you ever make an app for all the sound effects you make?" And I was like, "I think I'm flattered." Teresa: That was awesome! Steve: It's so funny 'cause I never realized I was doing it! Teresa: It's what makes it engaging because you're so fun. You're so YOU and you just draw people in! Steve: That means a lot. I'm very excited about it. Teresa: It's really fun. I hope you like and I hope you take it as a compliment. Steve: It's a huge compliment, totally. I will take that and blast it EVERYWHERE! Thank you SO MUCH for being on the show and thanks for walking through this. OFFLINE RECRUITING ADVICE Could you just give ONE MORE piece of advice for somebody who is just starting out and they're seeing this road and they're like, "Oh, man, she's been doing this for 11 years." Teresa: I would absolutely look to the masters WHO knows what they're doing and do what they do. Steve's trainings are phenomenal, that MLM Hacks… Oh my goodness! The thing I love about your training is people can do this very low level. You DON’T have to be techy and you DON’T have to be a coder. You have trainings that allow you to go slow, but then, you take people up the ladder to go into something that is bigger. The people who wanna go deeper, like me… It allows us to geek out over that stuff and you guide us through the process to make sure that we do it right. NETWORK MARKETING FRONT LINE I've done this for 11 years, and I have people who wanna be on my front line… I say, "Okay. So, if you're serious about this, I gotta know," and we go through the requirements. The requirements are basically... You do it the way that I teach until you hit *THIS* rank Once you're that rank, you do whatever you want because I've seen it, I've done it, I know what works I love the Secret MLM Hacks because you take people through the process without them having to go figure it all out for 10 years by themselves. You've been doing this for a long time, you truly are the guru. You deserve kudos for that, because you are helping people all across the industry and I know that this is starting a wave that is changing the MLM industry. In answer to your question, I would say If you only wanna build online, build online. If you only wanna build offline, build offline. But if you wanna do both, I would recommend that you build the way you want, but make sure you incorporate the best pieces of BOTH of those sides so that you can reach ANYBODY. NETWORK MARKETING GAME CHANGER You're gonna come across people who simply say, "I wanna be on your team." Steve: Yeah, a lot. Teresa: You don't build offline because you build online… But you end up having to handle it offline and you're just good at it. This might sound weird but… One of my tricks is to belittle the goal so that it's not so massive in my mind that I'm like, "There's no way I can go pull that off." If I try to consume and understand and plan for all of it at the same time, there's no way! You get stressed out. At the beginning, when I first started this, there were no podcasts. No one was talking about this angle of it and it's cool to see how 180 degrees that is now. I have bought your packages, I know your stuff and I'll just tell you… It changes the game. Steve: That's awesome, thank you so much. Thanks for being on here! Where can people find you? Besides MLM Game Changers ←- Everyone go look at the podcast. Teresa: The podcast, MLM Game Changers and we also have teresahardingmasterclass.com. We have pre-registration there for a FREE Master Class that we do, teaching people how to combine the online with the offline. I give shout-outs to Steve all the time. There are certain people online that are THE BEST OF THE BEST. Steve is one of them. Steve: Thanks so much! Teresa: Thank you for having me on. Steve: Thanks for being on the show! Everyone go check out and follow Teresa Harding. She's amazing! She's the Queen of the offline bill. TO RECRUIT ONLINE OR TO RECRUIT OFFLINE… To recruit online or to recruit offline… That is the question. By now if you listen to the show at all, you know I focus heavily on methods to recruit online in largely automated ways. But what if you don't know what to do with speaking to somebody face-to-face who's actually interested? What do you do? What do you say? How do you keep the conversation moving? When should you follow-up and how often? Who should you pursue and who should you move on from? Frankly, and totally honest, I'm good at all that online stuff. But if you're like me, you might be a little bit of an introvert in the real world. Whilst sales and marketing online is still sales and marketing offline, the mechanics are a little bit different. I'll be an expert in what I am loudly, but I can't pretend to know all of these offline methods because I don't. Who better to introduce you to, than the Queen of offline recruiting herself, Teresa Harding. Teresa literally has MILLIONS of people in her downline as you listened to this. She's an offline recruiting EXPERT. However, several months ago, she ran into my programs online and said exactly what you heard in my interview with her. "Steve, you did what we've been trying to do for 10 years." If you wanna check out the same programs Teresa Harding has, go to listentoteresa.com and watch the free web class now. Kind of like salt and pepper, Teresa and I are excited to finally collaborate a little to show you your individual strengths. She'll teach you OFFLINE recruiting, I'll teach you ONLINE recruiting. If you're ready to learn more of what Teresa did from my programs just type in, listentoteresa.com.

I have the incredible honor of speaking at Carnegie Hall in September with MARTHA STEWART, MICHAEL E GERBER, DAN KENNEDY, HAL ELROD, and other beasts. I'm beyond humbled by this. Here's the full scoop...   Frankly, I just love being on stage speaking and teaching.   Some of the early stages I got to talk on were Russell's - I did a lot of fulfillment for the original Two Comma Club program.   Back in the day, we did something called the FHAT Event which lasted for 3 awesome, intense days.   We’d go from:   Day #1:  9:00am to 6:00pm   Day #2: 9:00am - 1:00am(ish) - it was a long day.   Day #3 :9:00am - 6:00pm   By the end of the event, everyone was just exhausted.   Russell did the first event because he was testing materials and seeing where we needed to change things…   Then after that, he largely handed it over to me, and he just came in for a few one or two-hour guest speeches.   WHAT I LOVE ABOUT ENTREPRENEUR EVENTS   I remember there was this one particular FHAT event…   On the second day, I took a break to grab some food and went to Russell's office to sit down. Russell was like, "How are you doing?"   I was like, "Wheeew….”  I was just bringing it down... and trying to relax for a second…   ... THAT was a  very aggressive fast-paced stage for me - I loved it.   Russell goes, "How's everyone doing out there?"   We’d always talk about how the audience was responding:   Were they getting it?   Did they understand?   Which principles had tripped them up?   Had we managed to bridge the gap for them?   We’d chat back and forth exploring all the scenarios, but this time, when Russell asked, "So how are you doing?"   I kinda paused for a second…   https://media.giphy.com/media/1qXJDYI8lTG8SVhUZW/giphy.gif   Russell noticed and asked, "What is it?"   He may not remember this, but I said, "Dude, I can see those who are getting it and those who aren't. They're not telling me. I can see it."   And he goes, "You're getting that already, huh?"   I was like, "That's a thing?"   Russell said, "Yeah, yeah, I can stand up at any moment and, I've been doing it so long, I can see those who are with me and who it's clicking for and those who it’s not -  so I'll stop and I'll cater to those people who aren’t getting it."   https://media.giphy.com/media/7YCVWDMbIWTBNuTD9c/giphy.gif   I was like, "Okay, that's what that is. I'm starting to see that.”   MY FAVORITE MOMENT…   My favorite moment on stage, (and this may sound a little cheesy), is the moment when I see in somebody's eyes that they suddenly realize, "Oh my gosh, my capacity is greater than I thought it was and it's actually always been there."   It's funny to watch as people…   Have personal breakthrough moments   Suddenly see the road map and things start to click.   They're like, "Oh, that dream I've been going for all along is actually possible now."   I don't know. I don't know how else to describe it besides that…   But it's a thrill for me because you can see it happen in peoples' eyes as they listen to you.   Those of you guys who educate, teach or get on stage, you know what I'm talking about.   There's that moment where you can look at them, be like, "Bam, right there... I just caused the epiphany." About 6 months ago, during the Two Comma Club Cruise, I’d just finished a big session,  when a guy walked up to me and goes, "You're a really dynamic speaker."   People have told me that before,  and I still don't know what that means... So I said,  “Cool! Thank you,"  but what he said next made my jaw hit the ground…   He looked me straight in the eyes and asked "Do you want to come  speak at Carnegie Hall?"    I was like, "Are you completely serious right now?"   He said, "100%. We're going to see if we can get all these huge names," and I was like, "All right. Cool. Just keep me in the loop."   Six months later,  it's happening - it's in the bag -  it's an event called Living Legends, which is extremely honoring.   So I'm going to share an interview that explains EVERYTHING to you…   BECOMING A CELEBRITY ENTREPRENEUR I have a very special guest…   His name is Clint Arthur.   Clint and I, have frankly only known each other personally for probably six months, but I am blown away and just completely floored with what he does, his skill set, and who he helps.   What he does, when you're in a certain place, is completely magical and I'm very, very honored to have him on here.   So Clint, thank you so much -  welcome to the show.   Clint:       BOOM!   Steve:       In the middle of Carnegie Hall. What?   Clint:       Yeah.   Steve:       It's a proxy BOOM! Oh man.   Clint:       That's a Carnegie Hall ‘BOOM!’ for you - that's what that is.   Steve:       You're warming it up for us - thank you so much.   Clint:       Yeah, baby. Yeah, baby. Well, it's a pleasure to be with you... I met you on the cruise, I think.   Steve:       Yeah.   Clint:       The 2CCX Cruise - that was an amazing experience…   Really, the best part of the whole 2CCX program was the cruise.   I really believe that's because it was a special event.   When you participate in special events, it's not only great for the sales funnel… it's great for sales funnels for a reason...   It really does deepen the experience of the customer/client/ the person you're trying to transform their life... it opens up possibilities for people to have MORE community.   So as a result of that, here we are -  so great to be with you.   Steve:       That's so awesome. We're really honored, honestly.   Now just because some of my audience may not know who you are, which is baffling... but could you tell everybody what is it that you do?   Clint:       I am a celebrity entrepreneur -  which means:   I'm the MOST famous guy that nobody's ever heard of.   I’ve created systems, formulas and scientific methodology for creating celebrity positioning in the eyes of your customers and prospects.   So part of that is,  I have done 107 television appearances.   You might have seen me on FOX Business Channel, CNN, Headline News, or The Today Show with Brooke Shields… When Brooke Shields said, "Clint, you can have all of these plans and want to scale Mount Everest, but how do you keep from falling off the track?”   I said, "You've got to invest in mentors."   I said it then, and I meant it… and I mean it even more now.   Investing in mentors has been part of the reason why I have gotten to where I am.   Part of what I've done to become a celebrity entrepreneur is to become  Dan Kennedy's Info Marketer Of The Year - that's a great honor for me.   It’s something that really opened things up for me in my career and deepened my relationship with Dan Kennedy as my mentor.   So those are some of the things I've done.   I've also written a bunch of best-selling books...   My new book is called Celebrity Entrepreneurship.   Some of my other best sellers include:   What They Teach You At The Wharton Business School - I’m a graduate of the Wharton Business Schools entrepreneurship program.   The Greatest Book Of All Time...   I wrote this other book called The Last Year Of Your Life  - where you live as if you're going to die at the end of the year…   I told one of my friends, I'm going to add in videos and audios, it's going to be the greatest book of all time with those attached as links in the Kindle book, and he goes, "Why don't you just call it The Greatest Book of All Time?"   So I did, and that became my first real big selling book…   I sold 26,000 copies of that book.   Steve:       Wow. That's awesome. That's incredible.   Clint:       And it has contributed to …( I don't even think you know this…) Starting June 8th, I will be the host of a NEW talk radio show on WABC Radio in New York City called The Greatest Show of All Time.   Steve:       Oh my gosh. That's amazing. Just pushing straight on in there. That's incredible.   Now, actually, it was Peng Joon I started talking to about what it is that you do, and everything…   He was talking about just how incredible your stuff is and how amazing it is.   Why is it important to eventually become a celebrity entrepreneur for your audience?   Clint:       Well, I say on the back of my book that entrepreneurs struggle because they think that people are buying their products and services, but really people are buying you.   Who you are is more important than what you actually do.   ...especially if you're selling a product or service that's similar or equivalent to others that are in the marketplace...   The only difference is you.   If you're a financial advisor/  a realtor/ a doctor, or selling any kind of widget, there's a similar widget to what you sell - the main difference is who you are.   HOW TO BE A SUCCESSFUL ENTREPRENEUR…   What I do as a celebrity entrepreneur is help my clients position themselves as celebrities in the eyes of their customers and prospects.. and that's really using marketing on your personal brand.   That's what *this* is all about.   … and that makes all the difference in the world because people are NOT buying your widgets; they're buying you.   Steve:       Absolutely. I just so appreciate you taking that angle on it too.   There are a few places I've spoken at... where it's only been about getting authority for authority's sake, but you're saying let's get it so it pushes the message and the product more…   … because that's what they're gonna be buying anyway.   I love that. I'm very, very thankful for that. It's awesome.   How did you get started doing this?   There are gonna be a lot of questions revolving around ...   This is not something that my audience is gonna be very familiar with.   Clint:       Hey, I started out as an entrepreneur selling butter.   Steve:       Really?   Clint:       Yeah, really. That's really where this all began.   I was selling portion controlled butter in Las Vegas to hotels and casinos.   So if you've ever eaten bread and butter at Bellagio in Las Vegas, thank you for helping to put my daughter through the University of Southern California…   For a long time, pretty much every piece of bread at Bellagio was buttered with Five Star Butter, which is my company.   What happened was a lot of these celebrity chefs starting coming in: Bobby Flay, Gordon Ramsay, Emeril... and I wanted to get the celebrity chefs, so I came up with this idea…   What if I could be a judge on Iron Chef America and make myself a celebrity butter expert, not just the guy selling butter?   I talked the producers of Iron Chef America into making me the judge of Battle Butter... (you can watch that episode on my website, fivestarbutter.com and see me judging Battle Butter).   That was the beginning of my celebrity positioning as an expert.   Now, I tell you what, it changes things when you become a celebrity expert in what you do, it really does.   THIS WILL BLOW YOUR MIND   I heard a statistic that:   The number one top celebrity in the marketplace gets 50% of all the revenues.   The number two celebrity in the marketplace gets the next 25% of the revenues.   Number three, through infinity, split the remaining 25%.   That's why, if you're not the number one top celebrity, you are surviving on crumbs while everybody who you admire is feasting on giant pieces of pie.   For example, Tony Robbins, Date With Destiny…   Date With Destiny alone represents 10% of the entire live event seminar industry in its revenue.   Steve:       Oh my gosh.   Clint:       If you do the math, which I have, you will see that just that one event is 10% of all live seminar tickets.   Steve:       Geeze. I had no idea.   Clint:       Because he's the number one guy ... And here's the funny part…   Go into any bank in America and ask the teller, "Do you know who Tony Robbins is?"   … they're going to say ``No,” because he's NOT a real celebrity - He's a celebrity entrepreneur.   The same thing goes for Grant Cardone, who everybody worships…   I will show you videos where I'm doing seminars with financial advisors and I'd say, "Anybody recognize this guy?"   Not one hand goes up.   Nobody knows who he is because they're NOT his customers or prospects... and yet two months ago, he filled up Marlin Stadium...   And most of the people watching this video know exactly what I'm talking about.   Steve:       OH, YEAH.   Clint:       When you're a celebrity entrepreneur, (which is something that I pioneered, systematized and scientifically analyzed how do you do it), you're a god to your customers and prospects…   ... but the rest of the world doesn't know who you are.   And that's what I help my clients to do.   Steve:       It seems extremely magical sitting on this side of the screen listening to that. That's impressive. That’s so, so amazing.   Now, what should somebody do if they're trying to get started as celebrity entrepreneur?   Clint:       Okay. Well, the important thing to understand is that there's no time that’s too soon.   The sooner you start building your positioning as a celebrity in the eyes of your customers and prospects, the better off you are... because the product you're selling is irrelevant.   A lot of people come to me and say, "I don't have a product yet. I don't have a book yet. I don't have this data or anything yet, " and I just say;   “But you have you. You're already you. And you're always going to be you so you might as well start building your personal brand."   Really, there are five ways to do it.   Television is the most powerful way.   I'm not saying you have to go on Good Morning America first - that's a mistake. Don't go on Good Morning America first, go on little tiny local TV shows first.   Then the second great way to do it is by becoming a speaker.   I wanted to meet you, Steve, because you're such a great speaker…   I don't know if you've always been, but I doubt you've always been…   I’ve personally found that speaking is an acquired skill.   You have to learn how to be a great speaker - so there's no time that's too soon to start learning that, is there?   So go out there and start learning how to speak and start speaking in important places - the second part of my formula is to become a VIP speaker speaking in very important places.   The third part is one of my favorite things, celebrity attachment.   That's taking photos with famous people, and anybody who goes to my website will see I'm in photos with all kinds of famous people from Brooke Shields to Caitlin Jenner  - Ringo Star to Mike Tyson - Hilary and Donald Trump. I don't care.   I'm an equal opportunity celebrity selfie slut.   The more famous they are, the more I like it. That's it.   Part four my formula for celebrity entrepreneurship is to be a best selling author.   I've already dropped some of my best selling book titles on you guys. The fifth part is to be an award winner -  Win Awards!   I told you right in the beginning, I was Dan Kennedy's ‘Info Marketer of The Year,’ and you, as an entrepreneur, need to figure out how you can win awards too.   Steve:       That's amazing...   TV   Speaker   Celebrity Attachment   Best Selling Author   Award Winner   Clint:       Ideally you want to win an Academy Award, but if you don't have an Academy Award, then you've got to win something else.   You won a Two Comma Club X award, you won a Two Comma Club award -  whatever you can get!   The better it is, the better it's going to be…   You put all those steps together and you’ve radically transformed your positioning in the eyes of your customers and prospects.   Ultimately you want to accomplish each of those things.   Steve:       That is insanely valuable. I hope everyone's enjoying that. I can't put it off anymore… Where are you standing... and why are we talking about it right now?   I can't even hold it back…   CARNEGIE HALLClint:       Right now I'm in the lobby at Carnegie Hall in New York City.   Steve:       Oh!   Clint:       Yeah! And the reason why I'm in the lobby of Carnegie Hall in New York City is that I just finished my meeting with the production manager, the stage manager, the person who did all the contracts for my first of its kind entrepreneurial conference at Carnegie Hall.   They've never had an event like this before…   “It's so unique, Clint. We've never had anything like this, Clint. We're so excited. We can't wait to sit in on and see some of the people that are going to be ... You're really going to have Martha Stewart at your conference?"   Yes. I'm really having Martha Stewart at this conference.   "You're really going to have Coco and Ice-T?"   Yes. Ice-T and Coco are really going to be there.   "You're really going to have Scorpion -  the guy who produced five seasons of the TV show Scorpion for CBS? My dad loves Scorpion."   Steve:       That's a good show.   Clint:       That's what the lady said.   I'm like, “Yeah, Scorpion himself. You're going to be able to pick the brain of the smartest man on earth. Imagine what you're going to find in there.”   Albert Einstein previously spoke at Carnegie Hall. His IQ was 160. Scorpion's IQ is 197.   Steve:       Holy Cow!   Clint:       ...and who else is going to be speaking there?   Dan Kennedy will be speaking at this conference.   Michael Gerber, the author of The E-Myth, number one New York Times best-selling book for years and years and years   ….he’s changed so many entrepreneurs' lives.   Michael will be doing multiple days of speaking at this event, including the hot seats on the stage.   Amazing. Who else?   Jerry from Ben and Jerry's ice cream, the founder.   So look at this…   You've got Martha Stewart who turned herself into a household name...   Then you've got a guy who turned cream and sugar into a household product. Right?   Steve:       Yeah.   Clint:       Who else is going to be here?   Oh, Hal Elrod, ‘Miracle Morning’. Are you familiar with that book?   Steve:       Very. Yep. Got that and the journal right here.   Clint:       Right? Self-publishing phenomenon. By the way, he's one of my students.   Steve:       Oh, cool.   Clint:       He couldn't afford to come to my Celebrity Launch Pad TV Publicity Transformation Event.   He registered, and then he calls me the next day and goes, "Clint, I'm really sorry. I talked it over with Ursula and we really just can't afford it."   I'm like, "Wrong. I'm going to make it possible for you to do it. We're going to come up with a payment plan and you are coming on Celebrity Launch Pad."   He booked himself on 13 shows   I have the video of him, and he's like, "Any time I'm being considered for a speaking gig, I send them my TV appearances for them to evaluate me because it separates me so much from everybody else who's trying to get those same speaking gigs."   Anyway, he's one of my students and he will be speaking there.   Who else is going to be speaking there?   Princess Marianne Parker, another one of my students.   She transformed herself from a Bulgarian peasant to the princess of etiquette.   She's going to tell you how etiquette saved her life and made her wealthy.   And who else is going to be speaking there?   This guy named Steve.    Steve:          I heard he had big eyes and he’s probably gonna yell a lot. He's gonna drop a few ‘BOOMS!’ in the Carnegie Hall.   Oh!   Clint:       This event is called The Living Legends of Entrepreneurial Marketing.   This man, Steve, built 500+ funnels for Russell Brunson and ClickFunnels. How freaking legendary is that? Unbelievable.   I'm really excited to have you join us on the main stage for two sessions of dropping booms all over Carnegie Hall.   I'm really excited to share you with my audience because you're such an amazing speaker man.   Dude, you are an amazing speaker. I love you and I'm excited to share you with all of my friends who are going to be coming to this event.   HERE COMES THE SCARCITY & URGENCY   There are only 600 tickets total for this event.   Steve:       Holy smokes.   Clint:      Super special. Super special event. Tickets are available and people should be getting their tickets as soon as they can.   Steve:       That's awesome. Hey, so what are the dates so people know?   Clint:       September 26th/ 27th/ 28th in New York City at Carnegie Hall. Yeah, the one, the only Carnegie Hall. That's right.   Steve:       The actual Carnegie Hall.   Clint:       Yeah, the actual one!   You know who's spoken in here besides Albert Einstein? This is the coolest.   In 1906, Mark Twain gave his last lecture at Carnegie Hall.   I've asked Dan Kennedy to come and give his last lecture.   I said, "Dan, if you were going to die and you knew you were going to die and your kid came to you and said, ‘Dad, what should I do to thrive as an entrepreneur?’ that's what I want you to share with the audience."   That's what Michael Gerber is going to share.   That's what Martha Stewart's going to share, Ice-T, Coco, Scorpion, everybody. You too.   What is the magic sauce to thrive as an entrepreneur?   I'm so excited to hear what everybody has to say.   Steve:       Yeah. I just, I can't even tell you how stoked I am.   When you asked ... I was trying to ... “Oh, yeah, no, I'll be there, Clint. Yeah. Let me check. Yeah, no, I can be there.”   Then I hung up and I just started yelling.   I'm so excited, man.   Thank you so much. Very excited for it.   And you guys, you can go to seestevelive.com and it will take you over to the tickets - so you guys can go get booked up. Only 600 tickets, guys. That is NOT many. Go get one - especially for all those names.   Clint:       There's not 600 left... I've already been selling tickets.   Steve:       Oh, really?   Clint:       A lot of the VIP and Elite Tickets are already taken.   There are different levels…   There's general admission -  if you just want to come and you're scraping it together to make it.   Step up and show up for this thing - it will change your life. Going to events really does change you.   Steve:       Yeah, it does.   Clint:       You told the story of going to your first Russell Brunson's ClickFunnels Live and how that changed your whole freaking life.   Steve:       Yeah, everything.   Clint:       Well, that's what's going to happen here. Where was that ClickFunnels live? Somewhere in Orlando?   Steve:       Yeah. San Diego, actually. Yeah. Yeah. It's far.   Clint:       San Diego. Dude...   This event is at Carnegie Hall with Martha Stewart, Dan Kennedy, Michael Gerber, you and Scorpion, the smartest man in the world.   You see, what people don't understand is that the venue changes the event.   You can have the same performers, one of them performing, one time performing here and the next time performing at some arena someplace.   You're going to get a much more intense performance at Carnegie Hall because the venue brings out the power from the performer.   The performers rise up to the venue.   You know who else has spoken in Carnegie Hall? Aside from Albert Einstein and Mark Twain, we had…   Franklin Delano Roosevelt   Elenor Roosevelt   Teddy Roosevelt   Martin Luther King   Ernest Hemingway   Groucho Marx   Andy Kaufman   Jerry Seinfeld   The Beatles   Frank Sinatra   Liza Minnelli   If you have been a living legend, you've performed at this venue.   ...and that's why I selected it. That's why I'm paying the big money to get it.   That's why I'm paying the big money to have all these incredible names come and share their last lectures with my audience to change entrepreneurs' lives and their vision of what's possible in the future.   Steve:       Man. I'm not going to stop press and record. This is so awesome. Holy smokes!   I'm so psyched about it.   So September 26th through 28th. Literally Carnegie Hall! Obviously, New York City. 600 people.   Go to seestevelive.com.  and it’ll take you right over there.   Anyways, Clint, thank you so much for being on here. I really appreciate you being on. I can't even explain what kind of an honor this is.   Clint:       I'm so excited to be doing this. I have a testimony on my website from Peng Joon, because he came and spoke at one of my events at NASDAQ, and he said:   "Clint specializes in creating experiences."   That's really what I do... and that's what I've created here:   The experience of this unique first time ever entrepreneurial conference in this venue is going to be historical, life-changing, and career changing, and you don't want to miss it   I'm looking forward to sharing it with you, all of your friends and your audience; September 26th, 27th, and 28th. Thanks, Steve.   Steve:       Oh, sir, thank you so much. Appreciate it. We will see you there.   BOOM!   SEE STEVE LIVE   So several years ago, I walked by a stage in a basketball stadium.   It was my college campus and I was deeply concerned with what I wanted to do in my life.   For some reason, I looked at the stage and thought, "Huh, one day I wanna be on stage. I wanna be an entrepreneur and I wanna buy and sell companies."    Well, while the last one hasn't happened ... yet, Muahaha... stage and entrepreneurship have.   And as my business has grown and my message has spread, a frequent question I'm asked is, "Steve, what stage will you be on next?"   Now I totally get that this feels, maybe, a little conceited here...   But considering my childhood fear of speaking up, being heard, extreme lack of self-confidence, and getting in front of people, back in my growing up days, I feel satisfied.   I thought I'd tell you where I'll be in the world coming up.   And funny enough, just literally go over to seestevelive.com, and it'll forward you to the next place.   I love stage and it's one of my biggest things to look forward to in my current role in my business.   From little 10 person masterminds all the way to gigantic 5000 person events - from free seats to paid events - events have always been one of the ways I can deliver the MOST value and get the greatest “AHA’s” in the shortest amount of time.   Just come say hi, and go over to seestevelive.com.

I'm very excited today and I have a very special guest.   This is somebody who had been an extremely active participant in the community and, honestly, I get excited every time I see you comment.   I'm very, very pumped to have you on today. Please welcome to the show, Tricia Robino. Very excited to have you.   GUEST FROM THE SECRET MLM HACKS COMMUNITY   Tricia: Very excited to be here Steve. Thank you so much for having me.   Steve: This is going to be awesome.   A few weeks ago we were looking through and thinking “Now who would be really fun with a cool story to just bring on the show?” And immediately, Coulton was like, “Oh my gosh, you got to get Tricia on”.   That's exactly when I reached out and I’m so glad you that you could make it. Thanks for jumping on.   Tricia: Yeah, no problem.   Steve: Just so everyone gets to know you a little bit. How did you get started in MLM?   Tricia: Well that's a great story, because I'm in the wellness space just like you.   Steve: Nice.   Tricia: Just after my son was born, which was 40 years ago, I got out of shape. So I was trying to get back into shape.   I got really super hooked on the wellness industry. I was an aerobic instructor and then owned a health club.   What it came down to was, I really wanted to make money doing what I loved and so I thought it was going to be the health club.   I really wanted success and I really wanted to feel good and have people think I was doing something really, really cool. Because all my brothers and sisters, they're like CFOs, they're lawyers, they're dentists.   Steve: You have an unofficial bar, right?   Tricia: Exactly. I had this bar and so believe it or not, owning a health club was cool. And I actually was able to make money. At one point I made $10,000 a month.   Steve: Cool.   HOW DO YOU KNOW YOU’RE MAKING IT AS AN ENTREPRENEUR? Tricia: That's kind of how I was making it. But what happened was ... Have you ever heard of this big company called 24 Hour Fitness?   Steve: No.   Tricia: Yeah, right. They opened in San Leandro. I'm in Oakland, CA.   They opened 20 minutes away from me. It exploded and this space was very difficult to make money in. I mean it was super, super hard.   And so, I went bankrupt.   Steve: Sure.   Tricia: So like all good entrepreneurs, I filed my bankruptcy.   I had to do it, but it was pretty devastating.   It was embarrassing to be quite honest with you.   My son looked up to me, I was embarrassed. It pretty much devastated my life at that point. I got a divorce. I mean it was just like that whole story of everything just fell apart.   I had $267 in the bank. My dad had to bail me out. I had to write that letter to my sisters to see who could help me.   I mean it was just really, really, rally hard.   Steve: Oh man.   Tricia: But I didn't want to get a job. I quickly realized I loved working for myself and I did not want to get a job.   I would've rather lived underneath the bridge than have to work for somebody else.   But I needed to make money... And what did I know how to do? I knew how to grow a business. I had been growing business for 13 years.   So I worked as a business consultant. Which is another way of saying, “You know I don't have a job, I don't have anything, so I'm just going to help other people make money.”   I remember the day when I picked up this book called “Rich Dad, Poor Dad.”   DO YOU LOVE WORKING FOR YOURSELF?   Steve: It's the gateway drug for every entrepreneur.   Tricia: So I read this book called "Rich Dad, Poor Dad" in about three trips to the bathroom. It was like I was glued to this.   I realized that I wasn't a gym owner. I wasn't an aerobic instructor, I was this thing called an entrepreneur.   And that's when it really sunk in that I was an entrepreneur and he talked about network marketing.   I'm one of those guys that literally started looking for a network marketing company. I've been in network marketing of 16 years.   I was looking for a network marketing company. I literally recruited my upline to get me into the business, and I was 53.   So side note, I did not quit my job, which is what I always recommend to everybody. Get excited, but don't quit your job yet.   So I didn't quit my job, I kept working, but I was just in love with the whole industry. I jumped in, hook line and sinker, worked part-time with a full-time attitude.   Back then we had this incredible system, which was about lead generation, and I really loved that system because we called it scrubbing the leads.   We would have a lead come in, but we had a system where they would get more and more interest. They had to jump through hoops to get to the next level, so I knew that they weren't just sort of kind of interested.   Steve: This person's actually serious versus kind of dabbling.   Tricia: Because of the system, I was able to move up our marketing plan really fast. Everybody has different levels in their marketing plan. In 4 years, I got to the 1%.   BUILDING A SUCCESSFUL COMMUNITY   Steve: Oh wow.   Tricia: Yeah, through a system.   Steve: Wow.   Tricia: Which was great. It was fast, but really slow at the beginning.   Steve: Sure, it felt slow I'm sure.   Tricia: It felt like I couldn't get to making even $3,000 a month.   I couldn't get to that point where I really felt like I could quit my job and literally I didn't quit my job at the very beginning because I knew that I wanted to advertise.   I've always believed in advertising, I've been an entrepreneur for a very long time. So I wanted to make sure I had some wiggle room right there.   I was finally able to quit my job. We do a lot of personal development. I hear you, I was at Funnel Hacking Live 2 times, I've been to Offer Mind, I've been to Boise to see you, so I know that you're in to that too.   Jim Rome worked with our company for years and years. So I had a chance to meet him, get to know him, spend some weekends with him.   Personal development was another reason that I moved up the marketing plan. Then things changed, right?   I've been in this industry for 16 years. Here's the thing, if you don't expect it to change, you're not going to do very well.   I change all the time, right? And to be honest, that's what makes it fun for me.   Steve: Yeah, me too.   AN ENTREPRENEUR LOVES CHANGE   Tricia: If you're an entrepreneur and you like change, then just keep your eyes open. So that's what I've always done.   Our model kind of changed to the point where it was more face to face. People were starting to do lots of fit camps and opening up nutrition clubs and things like that. You know I did it, but I didn't love it.   Steve: Yeah, it bothered you a little.   Tricia: I do networking marketing because I like the time freedom, I want to work from home. I travel, that's one of my passions.   You know, I really want to be able to travel and do the things that I love. It's a great model, it really works, I love face to face.   I was hearing people from the stage, all these different network marketing companies and doing so much with social media and I'm like “This really sounds like fun.”   About a year and a half ago, I got my first ClickFunnels account and that's where I heard about you. When we had the round tables and I was trying to squeeze my way into your table.   Steve: That's right as I was standing on the chair screaming?   START WORKING ON YOUR BUSINESS!   Tricia: Yeah. But I still liked you anyway. I was like "He's my kind of guy."   I started to become acquainted with you and then as soon as I got home, I think pretty much after I got home is when you launched Secret MLM Hacks. And I was like, "Well, of course I've got to sign up for that”.   We completed the whole thing. I mean we were just like "Okay, let's do this, and we've got to do this, and he's closing it down." I can't remember what it was but-   I just have notes, upon notes, upon notes. I did it ALL.   Steve: So what's happened in your business as a result of it?   Tricia: As a result of it, I have been able to really focus on completely working online.   Steve: That's awesome.   Tricia: And I've been able to duplicate it too. I published a book and right now, I'm just finishing up. I hacked your funnel.   Steve: Good.   Tricia: So I'm just finishing up. The FREE plus shipping.   Steve: Nice.   Tricia: It's actually done. I have to just do the final touches.   Steve: Sure.   Tricia: I hooked up with Anchor and started a podcast.   Steve: Nice.   Tricia: I've done a 5 day workshop with a quiz and there’s a funnel for that.   Steve: Wow.   Tricia: I have almost finished a membership funnel. I'm working on my application funnel. I haven't completed that yet, but I have started on it. I'm doing monthly events.   WORKING ON YOUR SALES FUNNELS   Steve: For your team and such or is it for bringing in new people?   Tricia: It's to bring in new people.   Steve: That's awesome.   Tricia: I'm doing 5 day wellness workshops.   Steve: Oh cool.   Tricia: In fact this one workshop, this one group, I have over 1,100 people in it right  now.   Steve: Wow! Holy cow.   Tricia: Yeah, so that's good. I've been creating a community of brand new people. I have a community of product users. I've got a community of people who are moving up the marketing plan. I have a community of my builders. I’ve really focused and really heard you when you say it's not the WHAT, it's the WHO.   Steve: Yeah.   Tricia: So I've really been working on my WHO.   Steve: That's so cool. You've got more audiences that this has let you bring in. You can train them more. Has it helped you sell more product so far?   Tricia: Yeah, absolutely. But within the framework of how we can sell the product I have, that's going to be part of my free plus shipping for my book.   Steve: Nice. Yeah, okay. I love that. Put something in the front, you sell it all on the back anyway. Totally love that.   Tricia: Exactly. Yeah, so that's worked out really, really good.   ARE YOU NERVOUS ABOUT BECOMING AN ENTREPRENEUR?   Steve: What would you say to somebody then who's getting nervous about trying this?   This whole concept of the internet plus MLM is so foreign to so many people. What would you say to somebody who's nervous about that?   Tricia: About the internet?   Steve: Yeah, just about using it. All the tools we have, so many people are so scared of it.   Tricia: Here's my note. It works for me, and I've been able to validate those numbers and that is one of the things that I'm keeping close track of.   How much money do I spend, how many leads do I get, how many people go through my funnel, what's the end result, how much money am I making? We have people moving like they've never moved before, using social media tools.   Steve: Right, they're on fire.   Tricia: They're on fire and it's the next... I'm not even going to say it's the next new thing, it IS the new thing.   I would do it because you get everybody prepped for it. It's like you have to create the attractive character. People don't know that they're cool, you know? I didn't know I was cool until I put on my green glasses, was just myself, no apologies for anything, just have fun.   Steve: What does your upline think about all of this?   Tricia: I've got real supportive people in my organization. In fact, the person that first mentioned ClickFunnels to me, was my upline.   Steve: Oh that's awesome.   Tricia: That's never been an issue at all.   THERE ARE DIFFERENT KINDS OF ENTREPRENEUR   Steve: That's so awesome.   One of the big things that I hear from people when I'm talking to them about this or they're starting to see what it is that I'm proposing and they're like “What, this is so foreign.”   One of the biggest things that I hear from people, and you just kind of touched on it a little bit but they say things like “Steven, I'm nothing like you. I don't want to have to be like you in order to have success in this.”   I'm like “Whoa, that's not at all how this works, you know. You get to be you, LOUDLY"   Tricia: Not only do my clients need different personality types, and they are going to be different personality types, we all enhance each other.   In network marketing we work together and so therefore, if you have members of your team in there with new people, then the new people have everybody's story.   THE MOST VALUABLE PART OF THE SECRET MLM HACKS COMMUNITY   Steve: What would you say has been the most valuable thing so far that you've gotten from the program?   That you've actually been able to use and apply, and you're like, "Wow, that was good."   Tricia: I hear you in my head all the time. But this is something that you said at Funnel Hackers, because I was just in Nashville.   You said at Funnel Hackers and that is, “Just do the next thing.”   Just take the next step, and that is how you have set up the whole training. Especially after I have completed the program, it's like “Okay, just build one funnel. Make it good.”   Right? Then the next step is whatever that is. And when I think about “Oh Steve just says just take the next step,” I don't have to get this whole thing figured out. I just have to go to the next step, I have to get this funnel finished and launched.   I have to do the marketing for it. That's the next step and I think for me, especially as an entrepreneur, I just want to gobble up the whole horse, I think that's the thing that I hear you saying in my head the most.   Steve: Absolutely, well thank you so much and we really appreciate it. Any parting words?   Tricia: I do have one parting word, because we can make up stories about being too old or we can make up stories about not understanding technology and I just want people to understand that's just a story.   It's just a learning curve and there's so many people that are out there to help you, just dive in. Just dive in and have fun. That's the big thing, you know? Make it a fun experience.   JOIN THE SECRET MLM HACKS COMMUNITY   I know it's tough to find people to pitch after your warm market dries up, right?   That moment when you finally run out of family and friends to pitch. I don't see many up lines teaching legitimate lead strategies today.   After years of being a lead funnel builder online I got sick of the garbage strategies most MLMs have been teaching their recruits for decades.   Whether you simply want more leads to pitch or an automated MLM funnel, head over to secretmlmhacks.com and join the next FREE training.   There you're gonna learn the hidden revenue model that only the top MLMers have been using to get paid regardless if you join them.   Learn the 3-step system I use to auto recruit my downline of big producers WITHOUT friends or family even knowing that I'm in MLM.   If you want to do the same for yourself, head over to secretmlmhacks.com.   Again that’s secretmlmhacks.com.  

Boom, what's going on, everyone?   Steve Larsen from Sales Funnel Radio, today I'm gonna teach you guys my event teaching template.   I've spent the last four years learning from the most brilliant marketers today and now I've left my nine to five to take the plunge and build my million dollar business.   The real question is how will I do it without VC funding or debt completely from scratch? This podcast is here to give you the answer.   Join me and follow along as I learn, apply and share marketing strategies to grow my online business, using only today's best internet sales funnels.   My name is Steve Larsen and welcome to Sales Funnel Radio.   What's up, guys? Hey, I'm excited for today. I wanna share with you guys kind of a cool little thing here.   I’ve been teaching at events for a number of years now. I’ve taught everyone, from people who are brand new to people who are extremely experienced and very wealthy, and there is a format that I teach in.   One of the things that I get asked, actually more and more frequently this has been happening, is, “Stephen, how can you get up and riff for two hours?”   The answer is, I'm not just like talking, I'm actually following a format in my head.   There's been a few people have reached out and said, “Stephen, I wish you'd just get straight to the principle.” But there's reasons why I'm doing what I'm doing with this.   Right after my OfferMind event in 20218, I had the opportunity to go in and teach Russell Brunson's new speaker team for about half a day. He's got a new traveling team and they travel around on small stages that he can't get to, 'cause of who he is - which totally makes sense.   This team pitches ClickFunnels and content around the world, which is awesome. It's super cool.   So I was asked to come in and teach some of my methods and how I do what I do. I walked up and there wasn't really much of a framework, I had an idea…   I was watching and observing like crazy before it was my turn to go up, 'cause I wanted to see where they were. So I had an idea of what to actually talk about… But guys, I'll be honest with you, sometimes as I'm talking, especially on stage, (I'm always extremely prepared, especially when I get on stage), but there's always a little bit of playroom.   One of my favorite things to do when I'm talking and going through a principle or whatever is to watch, I don't know how else to describe it, other than watching the eyes of the people to see:   #: Do I have them?   If I'm losing them, I've got to tell a story.  I've got to just do something that's high drama or drop some more gold, something a little more valuable. I've got to do something to get 'em back; whether that's an engagement, or  sometimes I'll do a random Q&A.   Half of a being speaker is being able to deliver cool stuff; the other half is being able to read the audience.   I’ve done a lot of three-day events, tons of them and I have slides, but not every group that comes into the room is the exact same, so I've got to be able to adjust based on what they're doing.   So what I've done, especially over the last two years, I've been developing kind of my own pattern for how I do stage stuff.  Those of you guys who are coming to Funnel Hacking Live, you’ll see me do this.   I'll be extremely prepared, however I'm also gonna leave a little bit of room. I'm gonna watch how people are reacting.   There's been some stages that I've spoken on and like every audience is different, there's nothing to really prepare you for it, other than just doing it.   There’ve been some audiences that I've spoken to that were just the driest, dry, most unfun group to talk to ever, I'm not gonna say who it was, but it was a few events in Vegas and Texas and these other areas. I just talked to them and like, “Man, are you guys dead?”   Anyway, before I say anything offensive, I'm gonna move on, but like, “MAN!”   Then some of the most fun stages are not necessarily always the most educated in what I do, so I've got to start at a different level. You've got to be really fluid as a stage talker.   Now there's a difference between stage teaching and stage pitching - huge difference, monumental difference.   Every time I'm doing a stage pitch, I will follow a webinar script.   Teaching from stage, it's kind of that, but not really, there's a lot more that goes into it.   So my wife and I, we're both geeks now and she and I were talking late about stage and we were talking about the different formats of being able to present on stage, and so I thought it'd be kind of cool to share with you guys some of what I do, and how I'm actually able to pull that off…   I'm not just riffing, although it may look like that.   Let me just pull this whiteboard in here. If you guys are on ITunes, no sweat, I'm gonna walk through, you guys won't miss anything out. Drawing just helps me explain, so that's half the reason I draw so much.   Okay, so the first thing that I do is I go in and I draw a big old framework picture. It's a massive framework picture right here up at the top and it's a picture that represents the all the content.   One of the major reasons that I do this is because it helps me stay focused on what I need to produce, but also it helps me stay focused on what I should NOT get distracted by. There are squirrels!   As a speaker, you're like, “Oh man, you, one person in the audience, you think that's cool? Why don't I go on a massive tangent and teach you some other cool things, 'cause you think that's cool?”  No! I'm sticking to a framework.   There was an event I was speaking at early on, one of the first stages I ever spoke on, and it was really valuable, but I stopped teaching and started Q&A-ing.   Stage pitching, totally different than stage teaching, which is totally different than Q&A, which is totally different than workshop. They're not all the same thing. They're the little tools that I pull out of my pocket when I need to to keep:   Things interesting   The learning up and high   The energy high   People engaged   ... 'cause some of the principles I go through... man, they're freaking boring. I know they're boring! I hate listening to boring speakers. Hate it, hate it, hate it.   I don't really watch so much football. I like the Denver Broncos, they're my team, but I don't really watch that much of it, but when I do…   I'm not really an armchair quarterback, but I am TOTALLY an armchair quarterback when I am watching other people on stage. I’m nitpicking the crap out of 'em, I can't help it. I'm like:   Oh, I would have done that different   I would have pointed differently there   What's with the stature of that person?   Why is every one of their sentences going down? They should be going up.   ...you know, it's like I can't help it. This is my craft, this is what I do, I can't help but watch what people are doing on stage.   So anyway, there's different mechanisms and frameworks and patterns that I'm using throughout. Specifically for this episode, I'm gonna walk through how I handle teaching on stage in a way that’s:   Interesting   Interactive   Captivating and brings the minds of the audience with you   If I just pop right out and say, “Here's the framework!”   The audience will: Look at it   Finds something on there that they have seen before   Thinks that they understand the rest of it immediately - when they don't.   I can't just walk up and be like, “Here's the framework.” So what I do first of all is I go in and I draw a framework picture, then what I do is I break up the picture into chunks, three, four, five, six, seven chunks.   This is exactly what I did for OfferMind   This is exactly what I did for all of the FHAT events that I used to run   It's exactly what I do for OfferLab, which is coming up for those of you guys that are coming to it.   ...Does that make sense? There's a lot of what I do that comes from just this piece alone.   I got to hang out with Russell when he was drafting a lot of the Traffic Secrets book which he's been working on. He's writing it right now, but the actual ideation of the principles, he does the exact same thing... Where do you think I learned it? ;-)   When I first got to ClickFunnels and he started drafting the Expert Secrets Book, this is exactly what we did.   There was a picture that represented all of it and then the picture was broken up into four or five different pieces, and those are the major sections of the book.   So I do this the exact same way when I'm doing a teaching-based event. When I go into pitching, that's a different activity and a different pattern. But specifically this is how to teach at events. Okay, just making that clear, so that no one thinks that's how you pitch!   The first thing I do is I draw a picture…   If I can explain a complex principle with a doodle, it means it’s simple enough for the masses to understand. Most people are on a third grade reading level,and I can't stand up and use complex vocabulary.   The point is to not make me look smart, the point is to educate the audience.   It drives me nuts when you can tell someone wrote a speech to make 'em look smart, rather than to connect with the audience.   I'm not gonna name any names, but man, there was an event that I went to, (this happened like three times last year), where I got to speak at an event or I went to one that I just kind of wanted to go to… and there would be one or two speeches specifically you could just tell that were created to just remind everyone how cool the speaker was.   ...That's awesome, but I believe that if you want credit, don't seek it. If you want stature, don't seek it. You're gonna look like you are and you distance yourself from the listeners, 'cause you're like:   “Will you remind me again of how awesome I am, please? Remind me how much of a pedestal I'm on. Raise me up, please, audience, following.”   ...You distance yourself from the audience in that one move. Stupid, don't do it! okay.   So anyways,I draw a picture (for a lot of reasons), but it's so that I understand it in a simple way to teach it and so it's a simple to deliver the principle at the same time.   So I draw a smaller picture of a chunk of the major framework picture and I do it again, and then I do it again.   Let's say that there are four major principles, that are distinct from each other inside of this major picture. So then I draw another picture. Then there's a pattern inside each one of these that I'm pulling off.   When I'm doing a lot of Facebook Lives, or even sometimes in these episodes, I don't always do this in these episodes, but a lot of times I'll follow kind of a version of this a little bit.   There's really two phases to this:   #1: Is Preparing: so, first,  I'm gonna walk through the preparing phase, which is what we're doing right now.   This is how I prepare all the content ahead of time to make sure that I am ready to over deliver on stage. Is it a brain jog? Yes, it’s mentally exhausting. It’s so challenging.   I'm going through the exact same process for my book right now. Ha, right! It's not easy, guys. It's NOT easy at all.   Realistically, if you're doing something that's gonna be a little more permanent like a book…   I don't write the book to make money, it's gonna make some, but I'm making the book to make sure it’s easily transferable information to the masses. It's a low ticket thing = low cost + high circulation product.   So these are the stages I’m gonna go through with you:   1. Preparation 2. Delivery   So the first thing I do is I come up a big picture represents all of it and then there's four major principles - they're like little breakouts of the major framework. So now let's get down to each one of these levels. I draw the major, overarching principle pictures and I will usually use blue.   The next color I use for the actual content itself is typically green.I hope it shows up well on the camera here. Then I draw a smaller picture, yeah, that shows up alright, I draw a smaller picture and inside of that, I'm coming up with:   A quote, A story The actual concept itself A ‘So What?’   You’ll see Russell do this in several places as well, I do this in a lot of spots: “Oh, cool quote about this. By the way, here's a really cool story that's gonna set you up to understand the concept when I drop it.” Which is why I always tell a lot of stories on this show and anywhere.   Then, the “So what?” Meaning; “Who freaking cares?”   If I teach you something cool and you can't use it,  then who cares? I'm not here to say, “Oh, look how cool I am. So what? Who cares?   I hate my time being wasted. I do my best NOT to waste you guy's time, so I do what's called a “So What?”   I this at OfferMind; meaning: I teach you the principle Here's what you should be able to do with it now that you've learned it.   It's like the deliverables, the thing that they should be able to go do afterwards.   And frankly, this is a small picture... and then I do it again. We do a smaller picture, a quote.. and these are all little, tiny micro stories that teach the bigger concept. There'll be a bunch of 'em, boom, boom, small, small pictures. However many I need, in order to actually accurately show the BIG concept.   Does that make sense so far?   Then what I do is I typically, not always, it depends on how much time I have...   So then I grab a red pen and red to me is the “So whats?”  If you don't have red, you're dead... meaning this is the applicable area of what I'm teaching here.   So then, I usually do somewhat of a workshop/Q&A, not always. One or the other, sometimes both, it’s very time dependent. These usually end out the principle that I’ve taught.   For those of you guys who have got tickets to the next OfferMind, you got the replays from last year, watch me doing this.   Each session is is usually about an hour and a half to two hours,and then we usually need a break, and that's fine, but I usually end with a workshop/Q&A section or session.   I do the exact same thing for every single one of those major pictures and frameworks moving forward. Does that kind of make sense?   That's how I prepare, but that's NOT actually how I teach it. That’s NOT how I teach it at all.   Now I'm gonna erase the bottom of this right here, just so that I can draw how I actually toss it out, okay.   So that's why I lace it all out on my floor. I just got another 12 legal pads from Amazon Basics, because I'm running out. I use a lot of legal pads because I'm literally drawing pictures and writing the quotes on all these sheets on my floor and stuff - because then I can visually see:   “Crap, I'm missing a story on picture number two, section one, right, oh, dang, I'm need to find a quote, that backs up what I've been saying, I know this is a true principle, who else talks about that?”   That's why I buy so many books, I don't necessarily read that many books from cover to cover, I don't. What I do is I hunt answers. If I know I'm missing a quote from section one, picture number three, I'm like, “Crap, who talked about that again?”   Then what I do is I walk through my bookshelves and I grab out all the books,that look like they're about that topic and I will rifle through and speed read like crazy.   In fact, on the other side of this camera is where I usually put all that stuff. I had stacks of books next to each principle: “Oh man, this stack of books is really about that one principle. This stack of books is really about that principle.” And I rifle through them to make sure.   That's why OfferMind was so good, guys, I did my freaking homework.   Let me grab another color here. Yeah, let's grab black…   So that's how I prepare, but the way I actually deliver is, I always start with a story. A story at a place of high drama. Sometimes I will start also with a quote; sometimes those are interchangeable. It's not always in that order, but these are always at the beginning at least.   So it's a story at a  place of high drama, and a quote. I never just present the picture. This is one of the reasons why so many of us use whiteboards on stage is we are drawing the picture in front of the audience. If you have to go fast, that's fine, but it actually creates a deeper understanding for the audience if you draw and explain at the same time ...and then show them the finalized picture that you prepared ahead of time.   Russell does this at Traffic Secrets. I do this all the time like at the FHAT Events.I did this several times at OfferMind, time depending, based on where I was.   What I do is I draw a story to place high drama, then I go through a quote and then I'm drawing the picture in front of them on a clean whiteboard or a clean piece of paper.   I'm saying the steps that they need to take in order to to do that principle, but I'm also visually writing down those steps. That's why in my slides, a lot of times, you'll see I'm drawing the picture even though it's already done on the next slide.   This works so freaking good.   I've used this many times on a lot of stages, a lot of stages, okay. I've an abnormal amount of stage time for someone my age and I know that, and I'm just saying, okay.   So then I'm gonna number the steps out, audibly and written and then finally I press the slide button, 'cause I go make all these pictures. I have an artist go in and they will actually make a rendering of each one of these pictures. But if I just show it, it's not nearly as effective. Then I go through my “So Whats?” and then leave off with the Q&A/workshop. Does that make sense?   Sorry for the reflection there, guys, I'm trying to get that off there. Anyways, cool, that's how I do it.   First, I prepare it in the order I’ve shown you, but then I deliver it in this order.   I DON’T just:   Show the picture Use a quote Tell a story Reveal a concept Add the “So Whats?”   BECAUSE… it's better if the audience discovers the picture with you as you're drawing it. Man, that's so much more effective. The learning's a lot deeper.   Anyways, I just wanna share that with you guys. Some of you have been asking about this and I'm stoked to be able to share it with you.   So if you guys are doing events - which are amazing. I believe everybody should do an event. Events are incredible whether it’s virtual or in person.   Marketers are event creators.   When you go in, especially in a teaching event. I'm speaking in a lot of places already in 2019, I'm really stoked about it.   I got a lot of offers, I'm going a lot of places and I'm excited about that. I'm saying no to most of 'em, 'cause I'm really focused on my goal for this year. Thank you, I don’t want to offend anyone.   If I’m  gonna do any kind of stage speech at all, if I have an hour, if I have 30 minutes, if I have three days, this is how I do it.   You'll see a lot of times, when I'm trying to over deliver content, in my head, I'm following this format.   What's the story format I'm using? Epiphany Bridge Script.   What's the quote I'm using? Someone who's influential, that  the audience all know about.   I'm drawing the picture in front of 'em. I suck at drawing, whatever!   Next I walk through and number the steps out: it's the same exact thing I would do in a webinar script, but in this format, it's a little different.   Then I go in and write the “So Whats?” Finally; Q&A/workshop at the end, time dependent. I love that one, it helps 'em really feel like they've gotten a lot.   Anyway, that's the format that I use both in creating and in delivering.   What I want to do real fast is cut over to one other video real fast…   When I was at OfferMind, I ended the event. I was done, I was excited, I was like man, I knew that it had been awesome. A lot of money has been made from that event already; meaning the people in the audience applied everything and made a lot of cash, which is awesome and very validating…   But I was getting down and guys, I was tired, okay, I was about to go get in the car and continue to teach the speaker team. I was exhausted, man. I had really not slept in a while, and if you've ever been on stage, like you should be freaking tired.   The photographer came up to me afterwards and she goes, "You move more on stage than anybody I've ever seen ever," and I said “Yeah, well, number one, I hate bad speakers who are boring and number two, if I don't keep things interesting it's gonna suck.”   I don't know if you guys have heard the saying or the stat. I don’t know if it’s a stat or a saying, whatever... but I believe it's true, 'cause it seems true every time I do it…   90 minutes on stage is the equivalent in energy to a full eight-hour workday   ...And so to go for two straight days, man, you're wrecked, you are so freaking tired.   Whenever I'm doing a webinar, it's an hour and a half, I'm acting like I'm on stage. I’m exhausted after I do a webinar. I’m putting out energy, I’m working hard. They will NOT exceed my energy level.   I set the pace, so I've got to come in high and hard, so that I can bring everybody up because that brings them in a better place to be engaged and learn,   I pre-bought caffeine for the tables.   Anyway, so I did all this stuff, and then the event ended, and as I was about to walk off, Colton runs up and he goes, "Hey, wait everyone, don't move, don't move, don't move."   I didn't know he had a mic in his hand and he invited John Ferguson up and they gave me the Statue of Responsibility Award which had a hard time not breaking down and kind of crying over, guys.   The only reason I'm showing you guys this, it's not to pat my back, it's to pat my wife's for what she does to support everything that I'm doing. It's pretty intense.   So I just wanna give a little shout out to my wife here.   We're gonna cut over here, so you guys can watch US get that award and the amazing compliment that he gave her at the end of this video.   So anyways, let's cut over real quick here:   Coulton: We have something pretty special planned for Steve right now.   He has no idea.   So you guys are gonna be part of this, but in order to, like, explain it a little bit more, we're gonna roll a video, so if you guys wanna kinda sit back and watch a quick video with us, that would be awesome.   VIDEO: Viktor Frankl, the author of Man's Search for Meaning and a Holocaust survivor, he firmly believed that if we don't act responsibly with our freedoms, we will lose those, and now we're able to create his vision. His vision was to create a Statue of Responsibility. Bookend the Statue of Liberty on the East Coast with a Statue of Responsibility on the West Coast.   "Freedom threatens to degenerate into mere arbitrariness unless it is lived in terms of responsiveness. And that is why now it's for ten years that I've been teaching my American audiences they should see to it that the Statue of Liberty on the Atlantic Coast be supplemented by a Statue of Responsibility be supplemented by a Statue of Responsibility on the Pacific Coast." -Viktor Frankl   SCULPTOR OF THE STATUE: "Everyday we make decisions. We can think about what defines us. Is it our past, or is it where we're going? Is it what we want to do, or what's happened to us? We have the ability. We decide what we're going to create each and every day."   Coulton: I'm now gonna invite Mr. John Ferguson up to the stage real quick.   John Ferguson: So Stephen knows what this is, but a lot of you didn't, so we wanted to share the video.   On my way out here, I had an opportunity to talk to the sculptor of The Statue of Responsibility.   Two years ago, we were on a mission to find entrepreneurs, influencers, people who are looking to change other people's lives.   Viktor Frankl had in his study in Vienna, a sculpture with a man called The Suffering Man who reaches up to the sky looking for help. He always used to say, before he passed away, is "Where is the hand reaching down?"   Being a Holocaust survivor, he talked about responsibility on the West Coast to bookend liberty and freedom on the East Coast, and so we said:   "Look, we have to find individuals who are the hand reaching down to others in our world."   Don't you think Stephen is one of those people? Yeah, totally!   I think I've known Stephen about three years, first Funnel Hacking live event. We talked about that, and he is a different dude. He is awesome, right? I mean, phenomenal.   And so I talked to the sculptor, and I had him sign one of the statues, and it’s numbered, and we're only giving away a few of these to individuals in the country.   These individuals will have their names in a special place at the statue that will be built in Southern California, 305 feet tall, just like The Statue of Liberty. You'll be able to go inside and visit it.   Because of what he's done, not only for this community, but for all of your communities, do you understand that? Now you can get your message put in a way, you guys are all a part of this.   To Steve:  so would you accept the Statue of Responsibility as a gift for what you've given all of us?   Steve: Absolutely, man. Thank you very much. I really appreciate that a lot. That's huge. Thanks, man, thank you.   John Ferguson: And one last thing here with Alyssa, the reason why I wanted her on the stage was she's the hand reaching down at home while Stephen's here with us.   So thank you for giving us Stephen while you're having to take care of the home. Appreciate it.   Steve: Thanks. It means a lot. Thank you. Yeah, yeah. Well, you guys are, you guys are gonna see my tears flex in a second.   Hey, guys thank you so much for being here. We love you, we appreciate you a lot. This is totally a family endeavor. Hope you guys know that and feel that from us, and go change the world. We'll see you guys. Thank you, thank you very much. Thanks for watching this episode, please rate and subscribe at ITunes, I would really appreciate it if you guys rated it. That means a lot.   Guys, thanks so much. Let's cut over to the video and see us getting that award. Bye.   Boom, just try to tell me you didn't like that!   Hey, whoever controls content controls the game. Wanna interview me or get interviewed yourself, grab a time now at stevejlarsen.com.

EP21: Marc Miles Discusses 7 Things Every Painting Contractor Must Know To Protect Their Business SUMMARY: In this episode of DYB Podcast, Steve interviews Marc Miles, his business attorney based out of Venice, Florida specializing in defendign against IRS and state collections. Marc shares a plethora of useful knowledge about finding real solutions to the unknowns that could potentially hurt your business. From employee timesheets to written agreements, Marc talks in-depth about how to navigate the different undesirable situations you and your business may face. _______________ WHAT YOU'LL LEARN: -How to protect yourself and your business from unknown factors -The legal standing of your business and your money -Understanding the goals of your business in advance _______________   QUOTES: "If you do have something in writing, you’re bound by it, so you need to make sure you’re comfortable with it." "If you’re going to form a business entity, 95% of the time, LLC is the way to go." "A written agreement isn’t ‘I don’t trust you,’ it’s clarifying expectations and giving yourself a chance to void if something unfortunate happens." "If you want just your books done right, and you have no worries, your EA is irrelevant." "When you form the business, think about what your succession plan is going forward." _______________ HIGHLIGHTS: [03:25] The big unknowns that can hurt your business and how to prepare for those unknowns [09:33] Proper ways to protect yourself from false claims from employees [15:14] What to stay on top of regarding the IRS and what to do when dealing with tax issues [26:16] The difference between sole-proprietors and corporations [34:15] Partnerships, establishing trust, and understanding what your expectations are from the beginning _______________ LINKS & RESOURCES MENTIONED IN THIS EPISODE: [APPS] TSheets DYB App [GROUPS] BNI The Florida Bar DYB Coach Special Offer Contact Miles Join DYB ADDITIONAL FREE RESOURCES: DYB System PDF EP01 9 Steps to Doubling Your Business Part 1 52 Blog Post Ideas PDF YouCanBookMe VIDEO Pre-qualifying Questions PDF Video Testimonial Checklist PDF 3 Steps To Get Leads From FB PDF 11 Interview Questions PDF 9 Ways To Get HOA Work PDF  -------------- Connect with Marc Miles on Facebook here Connect with Steve on Facebook here  -------------- Press and hold to visit the page Show Page Notes -------------- Thank you very much for joining us today! If you received value, would you take a quick few seconds and leave us a review on iTunes, please? _________ STEVE: What happened? MARC: So, I had this client, he was behind on his IRS payments, he had an ex-wife and had some issues, things didn’t work out well, she left him high and dry, he was in another relationship, he was trying to make that relationship work, but the IRS kept following him, he had a car, he had a business he was trying to start and his soon-to-be wife was like, "I am not marrying you till you get this fixed, if you don’t get this fixed, I am leaving you," so he is like, you’ve got to help me, I said I can do that, so he comes to me, he said, where are you at, we took a look at this whole situation, we said no problem, we can do this, this and this, we set everything up, I talked to the revenue officer, she was fine, we submitted the paper work and he ended up paying about, maybe $8,000 on what had been a $110,000 liability… And his girlfriend at the time married him afterward, saying we got together and if it hadn’t been for you, while I was doing this, she would not have stopped there… STEVE: Woah, okay… Hello and welcome Marc Miles of the law offices of Marc J. Miles P.A, welcome to the show. MARC: Thank you, Steve. STEVE: Marc, what does P.A mean? MARC: P.A stands for Professional Association, and it’s a designation that is able to be used by individuals who are licensed by the county moral of the States, when they formed a business entity that says, they can only practice with the entity that which they are licensed for. So, if you see a lawyer with P.A or PLC, you know that is their business, all they do is the practice of law, they don’t serve Mc Donald’s fries on the side… STEVE: Ah… okay, glad to have you on the show. For everybody listening, Marc Miles is our business attorney, and he has been, for years, he helped us when we were at Burnett Painting, he wrote the agreement when we sold Burnett Painting and he has worked with us ever since, for everything we’ve done, without going in details… and Marc is outstanding keep him close cause he’s a great guy to know and I was kidding around with him before we get into this. Marc, you are too big to be an attorney… it’s not hard and I kind of wonder how you got into this industry… But, fortunately, he is really good at what he does and so I thought, Marc, we’ve got to get you on the show and let’s share somethings that some business owners, painting contractors out there need to know, to protect themselves, protect their businesses and the unknowns right, so we know, what we know and we don’t know what we don’t know, that’s really the dangerous part huh… MARC: And that’s what I try to help people to say, here’s what you are not aware of, let me ask these questions, you decide, but I hope you can get there so you can think about these things that you might not otherwise think of. STEVE: Hmm… Absolutely, so for example, what are some of the big unknowns? MARC: Okay, so the big unknown… the biggest thing especially with trade contractors and painters is, whether your clients are going to pay you or not, a lot of times whether or not you are having an agreement or non-agreement to sign, that states the payment terms and other terms of agreement, you have no idea what the client is going to go, are they going to try to want to stiff you, do they want to change? Do they say no? I am not paying until you repaint the whole thing? So, one of the biggest unknowns is try to eliminate the ways the client has not to pay you. STEVE: Uh… Okay, now this is really good, this is especially used for high contract or long contract work like commercial, industrial or even residential for your construction, absolutely… So, what are some ways? How can you…? MARC: The first is, you put the total price in the writing in the contract, not just a quote, the quote says, here’s my estimate, here’s your price, but when you have them in a contract say, this is the price and what’s paid, you are also saying what you do it for, and you haven’t signed, people don’t think an estimate is binding, people sees a paper says, estimate, sign, yeah, I agree to that amount, but they don’t see it as, this is a contract I am… subject to, there are legal remedies to it and that’s one of the easiest ways to sort of… that’s how you do it, so you have a little, it doesn’t have to be a 10-page contract, it can be a 1-page contract, but it looks like a contract, so it impresses upon them, the seriousness as opposed to, here is my quick book invoice, sign here, that says I agree… STEVE: Uh, woah. Okay, so this is a really good point is and I know opinions to this is very common practice, quick books, invoice, estimates, whether it’s an estimating program, they all say estimate stuff. If I heard you correctly, you were saying it should say, to set the it should say contract, what about agreement? Can it say agreement? MARC: Absolutely, you could say agreement, no problem. And then it should contain a couple other things that… you people have seen in contracts before, you’ve seen references to if the contract is breached or if not paid in x days or you know, choice of law, if we disagree, we go to court here, you know… throw some of those things in there, you know… Now, don’t be smart about it, don’t put something that is going to hurt you because you don’t really know what it is, but throw some other things in there, so it looks like an agreement or contract, more than just an estimate. STEVE: So, silly question here, I put this together when I was in L.A, is if we should have a lawyer take a look at it? MARC: Have someone take a look at it, over, just see it and ask some questions, yeah. Because every state is going to be different and some things you maybe find difficult to put in one state versus another, so… STEVE: Okay. Thank you. What are some ways that business owners… because you know, I mean you run your own practice, it’s a ton of work and you take all the risk? Now if something happens to you, you can sue them for free, and if something happens to us, the owner… how can business owners protect themselves against faulty claims. Like here is an example, I was talking to a friend of mine and he had paid on of his guys an extra day, it was a holiday or something and it ended up being 48 hours and he isn’t paying five and a half and there was a day he didn’t even work, he was just being generous and paying the next 8 hours, well he came back and sued him, ended up causing him $30,000, because he didn’t pay him five and a half for that extra 8 hours that he paid him… MARC: And he brought the state in as well, I am sure, because the state came in and probably said, let’s take a look at your records as well… Absolutely, so yes, so one of the things you want to do is, some people use independent contractors, while some people use employees, and there’s two different ways you have to handle it, you have an independent contractor, you need to clearly meet… First of all, if you are using an independent contractor, you need to have an agreement, end of story, why? Because if you have good insurance, your insurance might have clause for not having an agreement. I’ve got a situation right now, a client of mine that is relatively large painting company has got major insurance, that’s $100,000 job, $300,000 jobs, had a job where the sub he used, ended up screwing up, causing maybe $1,500 or $1,900 worth of damage, but if he wants to go through his insurance, they are like you didn’t use sub-contractor agreement, even though I drafted one for him. And now they are saying, if you are going to use the insurance, it’s going to cost you $15,000… So, now he is going to pay it out of the pocket or pay the $15,000. So, if you are going to use a contractor, make sure the insurance always have an agreement, even for that reason, but the agreement contains a schedule, the schedule says, here is how I pay you, and you will be specific in that schedule, this is how I get paid and then you only pay by that schedule… that’s for contractors STEVE: For sub-contractors, so if you are working with subs, you have subs, make sure you have a written agreement? MARC: Yes, absolutely… STEVE: Okay, what should be in that agreement? The schedule? The payment schedule? MARC: The schedule, their insurance and their compliance with the law basically says, you agree you have x amount insurance and your license etcetera, whatever you have with the state, failure to do so is a breach. As well as the fact that if you don’t get paid, they don’t get paid, so you want to make sure that if you are doing the job and your sub and you get stiffed by the owner, you are not going to have to pay your sub out of pocket or not. Now, some people, they say that’s a little hard to get, maybe fair, but if you take a look at almost every big GC contracts that’s out there, from the big players, I would guarantee you that is in there. STEVE: Hmm… I wouldn’t be surprised actually… So, what about employees, what are some proper things, what are some, things we need to be doing to protect ourselves, faulty claims against employees, just making sure all our basis are covered? MARC: The biggest thing to do is, the time-tracking of hours, you have to have a system where their hours are tracked and you can see that, relatively easily… STEVE: Okay… MARC: Then the best thing to do is, if you are doing payroll, maybe you have someone else doing payroll, maybe you are doing it yourself. If you have someone else doing payroll, they will automatically know the hours when you calculate to get to know, are we yet over-time? Is it a holiday? Do we pay 5 and a half? Now, if you use QuickBooks payroll, it will usually do the calculation for you, but if not, they will know, it will let you keep track, because once you get that 40 hours, the rules change, once you hit the holidays, the rules change, and they are different in every state, but wherever the state, you need to know that. So, you need to be able to keep track of hours because what happens if they put, we’ve worked this time and you are like, hey you’ve worked 42 hours already, based on this job in here, you only really worked 32 hours, you know, something… I don’t know, I mean God forbid… few hours here and there a day. Track hours to be able to track the hours consistently, that’s number one… STEVE: There is an app we like to… that we used with Burnette Painting and that many DYB use, we call it T-sheets, I don’t know if you are familiar with it, but… MARC: Not a lot but okay… as long as it is hours that are recorded and you can see those hours on a regular basis so that you can catch anything, you have to still review and catch everything at a time, because what a lot of people do is, they think overtime is time and a half, that’s the only thing they think of, they don’t think about, sick or vacation, whether it’s state mandate, certain things, and that should be talking to… even talking to a payroll person they know, you know good idea of that, if a not local attorney is what makes that. And that’s just actually a brief conversation just to get some conversations to help make sure that you don’t blow that. The other thing is don’t do a written agreement, depends on what state you are in, lots of state are at will, which means as long as you don’t have it written, you can sort of do what you like with their employment and how they are employed and how long they are employed. So, very few rules such as over-time, wages, etcetera, but if you do put something into writing, you are bound by it, so you need to make sure you are really comfortable with what you have, if you have something in writing. STEVE: Interesting, so you have more liability with the employee… MARC: Potentially it is because you can be held to everything that you held them to, you can be held if you don’t do it, so you have 6 employees, and the rule states that employees do not get vacation until they have worked at least 3 months and ask for two weeks in advance and you let one guy have his one week in advance, now everybody gets to have one week in advance because you let them do it, despite the fact that the agreement, Emmanuel or whatever says two weeks STEVE: Hmmm, now you mentioned at will, can you impact that for us please? MARC: Sure, absolutely I will… STEVE: Okay MARC: So, a lot of states… actually I am not sure, I think it’s less states… at will, which means, whenever you go to work for somebody, there are no set terms, there are no set agreements, you can work whatever you agree to, if it’s in written then it’s a great upon, if not, it’s really tough and you can let them go at any time for any reason, subject to of the course federal discrimination, you can’t let the person go because they are black, you can’t let them go because they are female, you know, those kind of stuff you can’t do, no matter what, that’s a federal law that overrides. But if you don’t like the way the person drives his car, you don’t like the way he looks on the job, done… goodbye… STEVE: About tattoos… MARC: Absolutely… Sorry, I don’t like tattoo, done… You don’t have to give him a chance to rectify, you are done, goodbye… STEVE: Okay… MARC: So, everybody needs to find if they are in at will state or not, so if you are, great, if not, then you need to check with the local attorney there, because I can’t tell you what some of the restrictions on firing somebody can be, sometimes you have to give them notice, you have to give them opportunity and it just depends on that state. STEVE: Okay, makes sense, interesting. So, how about IRS? What are some?… I don’t know if I can ask you this… MARC: You can ask whatever and I have to answer it… STEVE: How do you feel, like where does the IRS ranks and your Christmas card list? MARC: Actually, believe it or not, the IRS ranks decently, the problem is congress, they are the ones, that are so low, I am like don’t ever pay them in front of me when I have a baseball bat… Because all of these since about say 1999, most of the issues we really have with IRS, is really congress issues, it says, you know what, we have come up with this plan, we are not going to spend a lot of time specifics here, you, IRS, figure it out, if we don’t like it, we will tell you, you are wrong and then go implement it without any real guidance from us and then when people complain, deal with it until they complain too much then we will try to address it, and that brings the IRS into doing things that they really shouldn’t be involved in, and having to make decisions that really shouldn’t be made by them, but congress doesn’t do it, so… STEVE: So, IRS has been taking the wrap the whole time MARC: They take the wrap a lot of time. Now, back in the early 1990s and late 80s, IRS deserved the wrap, they were doing stuff, it was like, we don’t care about you, you aren’t human, done, done, done… Now, it’s a little better, I mean most of the people I work with at the IRS are very reasonable, they are not push-overs unfortunately, but they are reasonable, at least, so… STEVE: So, what are some things that we need to stay on top of, to protect ourselves with IRS? MARC: The biggest, most important is if you have employees, you need to make sure you are paying those payroll taxes on time. So quickly, when you have an employee, you pay them their wage, you withhold a certain amount based on their W4, plus you pay 7.65% of the social security at one point, something percent, whatever… 7.65% total between the two and social security, Medicare, that federal withholding plus the Medicare and social security withhold from the employee’s pay, is not your money, that’s their money that goes to the government, failure to pay that, and the government can come after you, personally for that amount, regardless of what you think you set up, business protection-wise. STEVE: So, are these the 941s that we file? MARC: Yes, everything you file, the 941, the payments you are making, the 941, you need to make sure you pay those employee taxes first and foremost, end of story, pay those, it’s not your money, people try to say, I won’t pay this week and I will try to do next week and catch up, they can still be very, very dangerous game, it’s sort of like gambling, like oops, I didn’t hit black this time, I will get black again, alright Mr. black, I will bet it one more time, maybe eventually I’ll get to black and try to win. You know… do you really want to take that risk? You probably don’t. Number two is, for those in some states… if you have sales tax, file and pay that sales tax as quickly as possible. In Florida, I tell people, if you are a Florida resident and you don’t pay your federal taxes, IRS can come after you and take 90-120 days, and they will start coming after you, Florida department revenue… 90 minutes if they get serious… the state can move like that, and most states can move like that, most states have far more strong to grab and attach to people, for non-payment of state taxes than the IRS does. So, whatever your state tax is, if you have sales tax and… or similar collection taxes, pay those, because they are the people that can go after you ASAP. IRS, you can buy time, you can do stuff, a lot more than you can with the state. STEVE: Okay, that is really good to know. Now, what’s the first thing somebody should do if they received one of those dreaded letters from the IRS? MARC: The one that says, we think you owe something? STEVE: Yes, that one… MARC: Okay, there is a lot of letters from the IRS that people dread… So, there’s two types of letters, there is the one that says that, excuse me, we want to look at your return, because we don’t like this $200,000 in supplies that you put and then we know you owe us money, now if you don’t do something within 30 days, we are going to take action. So, there’s two different letters, one is on one side and one is on the other, if you get that first letter that says, we don’t like this on your return, go back and make sure you check you have your receipt and your documents, in that statement. Once you have those, then decide, do I want to talk to my CPA if my CPA can help or if it is something simple. Sometimes it’s as simple as, we just need to see what your travel is, and your travel was, for example, that year was just twice as large, because you went to two more conferences and you’ve got plane tickets and the thing, you probably have to go and say, here, sure, no problem, plane ticket… here and as long as all your receipts match up to what’s on the return, you know, you are probably fine. Now if they go and say, we want to see your bank statement, everything on the return, now you probably need to talk to that CPA, because they need to know what limits there are, when they are doing this, not you. STEVE: So, that’s a great point, CPAs…  about Florida, that’s fantastic. What does somebody look for in a CPA? How would somebody know a great CPA from a forum floor? MARC: The first thing usually is to check whether they have the CPA designation, those that have CPA, which means they’ve got the license, have undergone a higher level, 99 times out of a 100, a higher level of training education to know what has to be done. Now, does that means they are going to form that they have education? No, obviously not, so the best thing to do is have an interview with them, phone or face, it doesn’t matter, and then ask them questions about your stuff. Say, what can I do about this? What can I do about that? And see how they answer, and if they are one of the people that goes, oh you can do A or B, and that’s it… and they are probably one of these people that is following up on the forum or it depends, like what are we looking for, or they can give you a little more and say, well, what are you trying to achieve? They will ask you, what are you trying to obtain? What are you trying to achieve? What’s the ultimate goal to fit it in, that’s one part, instead of saying, just oh, well, keep your receipts or make sure the mileage checks, those one line answers to three or four questions indicate the person is probably not, either is engaged and they are going to give you the time, or they are probably more about, here it is. STEVE: Okay, so this is really good, we are going to pause here for a moment, because… this is really good, if I heard you correctly, what you are saying is if they have a simple A or B answer, that’s no good? MARC: Usually, yes… STEVE: Okay, usually… these situations are dynamic… MARC: Yes, and they depend on the overall… So, obviously once have a CPA in your account say, hey, Marc, can I deduct this? And he goes, no, that’s okay, that happens, this time you are not asking stuff, the answer is simple, no you can’t, okay do this, yes you can. But when you are interviewing a CPA and in this interview, don’t just say, oh, I know somebody, okay, here you go, stuff… talk to them, interview them, so, I say interview attorneys too, don’t just… whenever you have a professional, especially a professional, interview them and talk to them, make sure you think that they can do it, they are engaged and you can work with them. STEVE: Fantastic. What about these small shops who… maybe just a couple of employees, but the and for one thing I know about myself and I know about most entrepreneurs is, we hate the books… MARC: Yes, so that is why you have a good CPA or a book keeper and ask them to do a monthly or quarterly book keeping and here is the thing, they are going to give you a quote, they are going to ask to see some stuff that can give you a valid quote of how much it is going to cost per month to do everything. And what you do when you get that quote and you shop around, you go to a couple of different accounts of CPAs and get quotes, then you ask yourself and you do an exam that I am sure you tell everybody to do, how much time does it take you, as the business owner to do this, this and this and you add up all these hours to do all these stuff that they are doing in this proposal. Now, ask yourself, how much money you could have earned with those hours in your business, which is what you are good at, as opposed to doing this and work it out. STEVE: Absolutely, we have a video, we have a link to it in the show notes called “Ownership Responsibility Value” and work through that exact formula. So, that’s great, how would… how does somebody know, so okay, find a couple of 2, 3 book keepers, how do you interview them and what do you do to open up your books... do you say what do you think? MARC: No, when you go to them, you talk to them, you ask them a little bit… hey Marc, how have you been down here, how long have you been doing this? You know if they are a CPA, you know how long they have been a CPA… and then they say, so, here is my situation, give a brief overview of my situation, I have this, I do that, and see what they say, some people may go straight to, hey, can I see the tax return? Some people may ask questions, there is really not a right or wrong there, because especially if you start getting a little long-winded, they are going to say, just give me the tax return, at this point you are explaining all that stuff and it’s like you are probably going to a little more extraneous details than they actually need… STEVE: Okay… MARC: But, bring the tax returns, bring the bank statements and you ask them questions about… do you feel comfortable with them? Ask them some basics, hey dude, do you… how many other painting companies do you deal with? How many of your clients are under 3 employees? How many of your practice is business versus personal? Because all CPAs do 10, 40 individual tax returns. So, how much individual do you do? If the person does 95% individual and has 3 businesses, maybe you say, okay, may we look at someone else, maybe you are like, hey I am going to be the forth, I don’t need a lot of handholding, okay, or you can go to someone who’s got 85% of the businesses and most of the individuals in the business. And then, the thing is more of a judgement at that point, how much does that matter to you? What’s the feeling you got from that? Because there is no right or wrong answer at that point, now you sort of feel, what are they doing in there, in their field and then how many employees they have, because if they’ve got several employees, the chances of you actually getting to them or them actually really looking at your stuff are probably slim than none and they may be awesome, the junior who they’ve hired, may not be at the same level that they are, and if you are going to get junior doing your tax return, do you have the same confidence that… you know… STEVE: And would you say it’s just as important to check and refer us as we would prior an employee? MARC: Absolutely… who we know, if you go find a CPA, have 2 or 3 people, that’s why I like BNIs, it’s a great resource, because most probably if someone isn’t BNI, they’ve got testimonials, hope… if nobody is giving testimonials then there should be a problem, they should begin there, that’s the start, so if you can get testimonials from people, ask people, if you know somebody says here, go and ask on… or do the whole Facebook recommendation thing, go and ask Facebook, what is recommended for CPA and see who comes up with it, if you got somebody come up with 6 names, then name 17 times out of 40, that’s probably a good one to start with… STEVE: Yeah, absolutely. Now, what is an EA? And how important is that a CPA is an EA? And I believe you are an EA MARC: No, I am not… An EA is an Enrolled Agent, and that is an individual who has taken the exam that the IRS puts out, to be able to practice before the Internal Revenue Service. Me, being an attorney and CPAs being the CPA are automatically granted that by right, nature of our license to do so as long as we are in good standing in A state. STEVE: Interesting, that’s why I though you are an EA MARC: Yeah, because I can do it. So, if you want just your books done right and you have no worries, your EA is irrelevant, because the EA is when you have tax issues and need them resolved. Hopefully you are not getting to that point… STEVE: Okay, absolutely… let’s circle back a little bit… we talked about corporations, what is the difference between sole proprietor, LLC, S-corp, C-corp and impact this slowly for us, for those who want to know if they are in the right one or they should make a shift MARC: Well, and that’s going to be after some consultation, that’s really hard to make, a sole proprietor is somebody who has nothing, but use their name… Steve Burnette painting, not Burnett 1800 painting, Steve Burnette painting, Donald Robert CPA, those are sole proprietors, they don’t have any requirements to deal with bank accounts or whatever, they do have to get an EIN, if they have employees, and everything they earned on their profit is subject to self-employment tax, which is an extra tax above income tax… On the net profit, corporations and LLCs are business entities, why do people say C-corps, S-corps… at the state level, it is a corporation, you form a corporation or you form a limited liability company, and people form these for two reasons, tax or protection, 99 times out of a 100, there are some exceptions to the rule and each day it is a little different, but a corporation is the vehicle designed for large companies, they are going to have public shareholders, make large amount of money, have a lot of certain deductions and have to pay out to the members and there was a way to keep the protection inside the company, so that members that were buying in weren’t at risk. The cost of that was paying an extra inside tax on the money, before the money got out to people, who received it and had to pay their tax, so S-corporation decided to say, we are going to make a difference, we are going to give you the corporation and give you the protection but the income will just flow out so you only pay tax once. But there are some restrictions on that, for example, you can’t have two different classes of stock when people invest, like you had a preferred shares, but you can’t have preferred shares in this corporation, you can’t have more than a hundred people, you can’t have a non-US resident, alien or citizen be a shareholder and the most important in an S corporation, if one partner takes money out, the other partner has to take their share out as well… STEVE: Interesting… MARC: Whether you like it or not… STEVE: What’s the difference in protection between S and an LLC? MARC: Okay, whether it is S or C, protection on the inside level doesn’t matter… so, corporation and LLCs, doesn’t… corporation… when you hear S or C, that’s a federal, sometimes state tax issue only, it has no effect on the protection of a corporation or not, whether it is C or S, the protection from the corporation, from a legal stand point is the same, no matter what… So, there’s two types of protection; inside and outside. Inside protection is simply that you are doing something on the job, within the job… something goes wrong and you get sued and that keeps your personal assets from being attached, you close down the business if you have to, but walk away, that’s within the business, no matter what, you are covered, you are protected, that’s what we call inside protection, there is no difference if you do it right between a corporation or an LLC, you get the same either or…. It’s the outside protection that there’s a huge difference, so outside protection is, something happens to you outside of the business, such as you many have back alimony you haven’t paid or child support that you haven’t paid, your behind done or you have a judgement from when you were trying to get your life together, say you have your house closed, they are not going to forgive the loan and they are still going to come after you for the money, it is outside your business, but they are going to come after you. A corporation does to protect you from that, your corporate shares are assets and they can attach those. STEVE: Okay, but how relevant are corporate shares to a painting company? MARC: Really, because most states require shares to be issued if you have a corporation and your share is your evidence of ownership, so if you are the 100% owner, you are supposed to have shares and if you have shares and they get attached, guess who owns the company, the corporation now, not you, your creditor… (After the Break) STEVE: How much protection does a sole proprietor have? MARC: None… Zilch in any which way he performs, no inside, no outside, end of story. STEVE: Okay, so if somebody started a painting company and maybe they are a sole proprietor, they are just getting going, should they go? What should they do? Should they… I heard you say it was dynamic… MARC: Yeah STEVE: So, any guidance what they should do? MARC: Yes, so basically, look about… first and foremost, if you are just starting, are you going to have employees and contractors or not? If you are going to have employees and contractors, most especially employees, form an entity, end of story. No matter what, form the entity, it’s not a question of anything else, because if that employee or that contractor does something wrong and you get sued, no entity, no protection… STEVE: Okay MARC: End of story, if you are not going to hire or use anybody else, it’s just you and your truck and your paint brush, your ladder, it’s probably cheaper to just get some insurance for what you are doing and make sure you have some decent insurance, and go forward… STEVE: So, just some liability or… MARC: Yeah, liability insurance, or if they don’t have an umbrella policy, if they are on the house, once they get an umbrella policy, because if you are just one person doing everything yourself, you don’t really get much protection from the company and what are you really going to do to cause the damage as obviously as the painter, I mean at what point are you going to cause more than two million dollars for the damage, it’s pretty hard, as a sole proprietor, just going around. Now, once you have contractors, a lot of the people, they are driving around or they are doing different things, and their effect is going to affect a whole lot more people rather than you, now you are going to get more risk. STEVE: Okay, you’ve mentioned partnerships a couple of times, so partnerships can be sticky for example… there is a common statistic that marriages will have 50% chance of ending up in divorce, what is it for partnership, do you know? MARC: No, I don’t have a number, sorry… STEVE: That’s okay, I was just curious, I didn’t think there might be one, but what are some things… I think it was just the last episode, we had four brothers on and they are partners, unfortunately they are brothers and they are just awesome Christian, so they’ve got a strong understanding and character and values, but that’s not the case for most partnerships, right? They all started off great, hey 50-50, it’s going to be awesome, we are going to make a ton of money, it’s will be great… MARC: Correct, so there’s two part to it, one, there is a part that is themselves and there is a part after… So, let’s take a part that is themselves, you are going to go into business with somebody, could be your wife, significant other, it could be your brother or somebody you have just known for 5 years that says, hey, let’s walk together, the biggest thing in the world is expectations. Before you can get started, what are your expectations for the company? And what are your expectations within this company, what are mine? What’s the work load split? How much work are we putting in? how much are we expecting? Can I afford to live on what we have as a budget while we are putting this together, before it grows to be the next billion-dollar company? Set those expectations down and talk about them, you don’t even need to get the attorney involved yet, because if you don’t agree that, hey, I thought you were going to put in 50% of the money and I am going to put in 50% of the money and you are now like, no you are going to put in 90% and I am going to put in 10% and I was going to work this amount. Well, that’s a direct split you can’t reconcile, end of story, you don’t even need the attorney, so expectations starting off, what are the expectations to find them? And then what’s the work load going to be? As an example, I had somebody call me, he was like, hey, my friend wants me to go and work for him, he wants me to be a partner in his business, and I would handle the finance and the contract etcetera and he would do the marketing and customer and actual web production, he was like, but I don’t trust him, he was like, because I don’t know if he is going to be straight with the money and I tell him to stop, my first response was, don’t go into business with him, he was like, no I want to do this and I said okay, fine, I will draft a disagreement, he is like, okay, no, change it, I want to do a new LLC and I am like, really? I am like, I can do this, but I am telling you, from your friend and as a client, it’s not a good idea, so I went and did it, he’s like, okay, let’s work on this, he comes back to me and says, no, I changed my mind, I am not going to, after realizing. You have to be able to trust this partner, I tell people all the time, you are going to business with this person, okay, do you trust them with the key to your house and with your wife and child? If the answer is no, you need to rethink this, or at least think it over seriously before you move forward… if you don’t trust this person, it’s ultimately a matter of trust in the beginning, do you really trust this person? Now, people change and you don’t know, but you ask that question, you could think you trust this person, but again, we don’t know what happens until the going gets rough sometimes, when people show what they are made of, that kind of stuff… STEVE: Absolutely, that’s really good… So, expectations, and do you trust them enough to keep them with your wife and children… MARC: Yes, once you’ve got to that point and you are sure, that’s when you go to the attorney and you say, we want this and we want this, in writing as to what we are going to do, well, is this a corporation which has a shareholder agreement or an LLC which has an operating agreement? You can put this stuff in there, now what people don’t realize is corporations, generally, people hear corporations, they hear bye-laws, bye-laws don’t address all these issues that I talked about and in an LLC, you have to do an operating agreement, that has addressed everything, you address those if you do it right. Of course if you don’t, if you put a trained monkey don’t do one, you basically got nothing, but if you put a you can do a shareholder agreement to address all these, an LLC will not need to address everything and if you don’t address it, I tell people, if you don’t address it with your business partner now, you are going to end up paying ten times what it would have cost you to have done this right in the first place, to have the courts tell you what you are going to be doing. And most people don’t usually like that, that’s not a win-win situation… STEVE: Speaking of win-wins, most partnerships start as 50-50, why might that be a really bad idea? MARC: One of the reasons is because a lot of partnerships are like 50-50, but at the end, we are going to go vote, and are going to try to make decisions, at 50-50, you are deadlocked, so how do you break that deadlock? And if you can’t break that deadlock you can’t move forward. So your company can stall without proper mechanism; 50-50. Second, a lot of people want to do something where they can get minority preferential treatment in bids and contracts, if it’s female or other minority owned, so all you can do is make a 51-49 or 60-40 split, but if you create an LLC, you can put all these protections in, just because you are the 40% person, you are not getting screwed by the person that has the majority votes, that’s one of the things that I love… I am doing that for a company right now, he’s got this product that he’s selling out, you know he wants to get the minority preference, he wants to put his wife as the majority owner, he wants to preferred himself in case of anything happens with him and his wife, that she runs the company and makes all the decisions, and she doesn’t really get the company. So, I as a good attorney can fix that, you can play with that, in an LLC, it’s a lot harder in a corporation. STEVE: So, somebody should have insured a majority, but just because you get the majority doesn’t mean you can’t protect yourself. MARC: Correct. And sometimes you can say, you know what? There’s a majority for voting, there’s a majority for money, so in a corporation, you are sort of stuck, but in someone, especially if passed to an S-corporation, but in LLC, you could say, listen, you are going to put in more money in, fair enough, we will give you more money back out, ahead of me, but I want 50% control, so we have to agree, or 51-49 and I want the control, you can do that split. Now, a lot of times, what I do, I tell people, if you have the deadlock, I put in the agreement, you find the third party that knows that area and ask him, because people go, oh, let’s come to the attorney and I am like, well that’s all fine and good, but if you guys are discussing a painting issue or growing your painting company, why are you coming to me to ask for expert opinion? I don’t know, I don’t know about painting, like I am not going to help you out on that, go to somebody else that knows that and ask them. Now, legal stuff, yeah, come to me and ask, and say hey, we need financial advice? Come ask me, but… so, I say, find an expert and talk to them… but if you don’t put anything in, then you are going to be screwed, because then you can’t make a decision, and essentially if you don’t agree, you have no recourse but to go to court… STEVE: That’s awesome, that very helpful. Now, selling a company, what does somebody need to know, how do they prepare, what… so Marc I come to you, say Marc, we’ve got this… April and I had this weird idea, we are going to sell our company… MARC: Okay, so first thing I ask is, how much are you going to sell it for? Then I say, where did you come up with that number? Because, what’s going to happen is you need someone objective who knows what they are doing, to look at your books and say, this would merit a price increase of x or a price of y, to sell the business, all things been equal. Now there’s always certain things that are out of the box, that you have this unique packing system, that there is a big craze for? That hey, that has the value that you are buying the business for, for that, as opposed to the business, as a business-operating-bringing-cash. So, actually the first thing I do is, I tell people, when you formed the business, think about what your succession plan is, going forward, what’s your ultimate goal with this business, do you want to be a 100? Do you want to sell it out to somebody else? Do you want to give it to your kid? Because based on that you need to prep, I usually prefer, when people want to go sell their business, start prepping, a year to two years in advance, because as we know with a lot of the trades and restaurants, cash flows through, cash doesn’t always get recorded on the tax, right or wrong, we all know it happens, cash is king. Well if a lot of your cash is king, then you can be very hard to ask for a price on your business, because people look at your numbers and say, why do you want this? Well, I take $40,000 of cash in a year, well, okay, do you want me to believe that, I tell you one horrible story, one restaurant here in Venice, the individual who sold the restaurant was putting money in for fake sales, paying the sales tax on it, so the number looked higher for the buyers. And the buyers bought it and paid more because they thought the sales were higher than they actually were… STEVE: Oh no. That’s bad MARC: Yeah… So, that’s why you do your prep, you do your work, so you can be prepared to show, this is why I deserve what I am asking for… STEVE: Okay, NDA; how important is NDA, what is an NDA? MARC: So, an NDA is a Non-Disclosure Agreement, it’s different from a Non-Compete, which is different from a Non-Solicit, people use these terms interchangeably and they are not. One, Non-Compete, the person who works for you cannot work in the same field at a certain period of time, doing what you do, Non-Compete. Non-Solicit, whoever leaves you cannot come back and go after your clients. STEVE: Interesting, so that one is not very popular or common? MARC: No, not common and then Non-Disclosure means you cannot disclose any information you obtain for any reason, except for the purpose you’ve received it, this is used often when people are looking into buying or selling a business, you sign a Non-Disclosure, hey, let’s see the financial so we don’t use it, etcetera. But you can also use it, if you don’t have the proprietorial system, such as a DYB coaching for example and someone is interested in the coaching program, you want them to sign this Non-Disclosure because if they decide not to buy in, and they have gotten some information, you don’t want them going and taking it elsewhere. So that’s a Non-Disclosure, and so you can do an agreement that has all three, but sometimes you don’t need all three, I have had somebody say listen, if somebody comes work for me, I don’t care if he works in a set of shops next door, I just don’t want him to go after my clients, Non-Solicit, fine, Non-Compete, I don’t care if he works for another company, I don’t care if he dissolves the company up, I don’t care, I just don’t want him to go after my clients, that’s a Non-Solicit, so it depends on what you want, what are you concerned about? then you know, get that. STEVE: Awesome. Very good, so as we wrap this up, Marc, this has been awesome, is there a question I should have asked or another point or comment that you would like to share with me? MARC: Yes, two of them actually. One is that, if you are going to form a business entity, 95% of the time, an LLC is the way to go, so picture your state change and talk to somebody, but it’s going to give you more flexibility if you need it for what you want to do, because you can always choose to be treated like a corporation with an LLC, but you can use its flexibility for elsewhere. Two, if you do want to use an attorney, every attorney who is licensed to practice in the state you are in, has to have passed the bar and your local bar has a list of every attorney, so if someone says they are an attorney, or you are looking at an attorney, you can go to your local bar, in this case it is floridabar.gov, you can look up the person, it will tell you how long they have been practicing, if they are licensed to practice in that jurisdiction and it will show disciplinary history, if any. So, anytime somebody says, I am an attorney… look them up on Florida bar or the bar or maybe they were dis-barred and maybe they are retired, I can’t tell you when we looked through sometimes, and I hate to say this but… look through the disciplinary hearings for fun sometime, seeing what people are doing… and a lot of times, what it is, is people are practicing without license because they have been dis-barred and they still continue to take people’s money to quote and do work, they are not licensed anymore, so always go to your local bar, check out say, is this guy licensed? Is there a disciplinary history? What is his story? How long have they been working? And CPA is by the way the same thing, if they have a CPA designation, go check with the state, state has information for CPAs. STEVE: Okay, fantastic, very good. Anything else we should have asked or you like to share? MARC: Yes, last thing, sorry… STEVE: No, it’s good… MARC: License is an insurance, a lot of times, when you use a sub, they are going to ask… you are going to want to make sure they have an insurance, a certain type. Always understand that the first step is asking for a certificate of insurance and don’t let them give it to you, make sure it comes from the insurance agency who has their policy. People take it and modify it and play around with it, and you can’t trust it if it doesn’t come from the insurance agency. STEVE: So, the certificate must come from the insurance agency? MARC: Should come from the insurance agency and you have them send you the certs… STEVE: Become listed… MARC: Yeah, so list the person… so the agency says, here it is, here is the person, it’s valid. Now, again, could they have cancelled that insurance? Yes, they could have, afterwards, but at least it’s not fraudulent, it’s legitimate and a lot of time people don’t realize what it is, so they don’t even know how to give it, but that’s why this part two is have that written agreement, because if you get that insurance and you have agreement say they will keep your insurance and they violate it, now, A, potentially your insurance may say, screw you, but B, you now have them on hook of being in the wrong. STEVE: Okay, fantastic, if there could be one more things that you would have shared, what would it have been? MARC: The last thing I am going to say is, in general rule we all want to believe the good in people, so, we give people chances, we do things sometimes without as much structure, because we don’t think of the negatives and I want people to understand that the reason you go to an attorney or somebody is if something goes wrong, yes it may go bad, go well, nothing ever needs to be done, and that’s great, I hope so, but if it does and things happen, this is what you are trying to protect. So, as much as I like kelvin, the person I am sharing my office with and it might be compartments, our agreements in writing, as much as I like people or certain things, the agreement is in writing, it clarifies the expectations and just in case something happens… what happens if someone gets Alzheimer’s… this person will never betray me, no, now they got sick, now they have Alzheimer or something, now they are doing something that they wouldn’t have done, but they are, so now what? Didn’t expect that? Too bad. STEVE: So, written agreement is not, I don’t trust you, written agreement is clarifying expectations… MARC: And giving yourself a chance to avoid, when something unfortunate happens. STEVE: Okay, very good, that is awesome. So, Marc, I am going to share your contact information here in just a moment for those who would like to reach out to you… MARC: Okay STEVE: But first, how about some fun questions, because… MARC: Sure… STEVE: Alright, you are a dangerous, not just legally but physically and have a black belt in… MARC: …Taekwondo STEVE: How many countries have you lived in? MARC: Lived in? 1, 2, 3, 4, 5… STEVE: Five, how many languages do you speak? MARC: How well do I speak them… I have studied six different languages… STEVE: Six different languages, which is the most difficult? MARC: German was the most difficult for me… STEVE: German, interesting… okay, and food. You are a food kind of… I have been trying to encourage you to start like a food blog… MARC: I know and I have been starting and I have… STEVE: You will be the ultimate ABA for Venice, Florida as far as food blogs, I mean like, anytime we have a question about food, I just call Marc, food this, food that… what are some of your favorite dishes or types or styles of food? MARC: Sushi… STEVE: Okay MARC: Duck… STEVE: What’s the strangest thing you have ever tried with all the different countries you have lived in? MARC: The strangest thing was probably eating a fish that’s still living and breathing as you pull the flesh off the bone. STEVE: Okay, that good… that’s awesome. So, what countries? Germany, Japan? MARC: No, Demark, Switzerland, Japan, South Korea, United States. STEVE: Awesome, fantastic… Marc, it has been great to have you on... MARC: Thank you Steve… STEVE: For those who have been listening, more to value, we have tons of take away here and looking forward to hearing feedback from this episode, it has been very, very helpful, for those who like to follow up with you, how can they best reach you? MARC: Email is the best way to go, my email should be… I think marcmileslaw.com, that’s the best way, because I am running around, I am not always in the office and stuff… STEVE: So, I have that here, and that’s mmiles@marcmileslaw.com MARC: Yes, awesome STEVE: Fantastic. Marc, thank you so much my friend. MARC: No problem, my pleasure Steve, anytime, take care…

Welcome to all of our Becoming Your Best podcast listeners wherever you might be in the world today. This is your host Steve Shallenberger. And we have a tremendously interesting guest today. Our guest is a successful business leader and has influenced many many people for good. Welcome to our show today, Tim Sanders. Tim: Hey great to be with you Steve. Steve: I've been looking forward to this. Tim: Me too. Steve: Well, good. All right. Now, before we get started, I'd like to tell you a little about Tim's background. He spent his early career on the cutting edge of innovation and change. He was an early stage member of Mark Cuban's Broadcast.com, which had the largest opening day IPO in history. After Yahoo acquired the company, Tim was tapped to lead their Value Lab, and by 2001 he rose to a Chief Solutions Officer. And today he's one of the top-rated speakers on the lecture circuit. Tim is also the author of four books including The New York Times best seller "Love is the Killer App," which is an awesome book, "How to Win Business and Influence Friends," I really enjoyed reading that. Tim's book has been featured in Fast Company, USA Today, The New York Times, Boston Globe, and so on. He is a master storyteller who offers his listeners actionable takeaways that produce results right away. So I have been looking forward to having Tim here in our interview today. And to get going, Tim, can you tell our listeners maybe a little about your background, your story? What was it like growing up? And maybe some experiences that helped you see that you could be successful? Tim: Thank you. I grew up in Clovis, New Mexico. It's a farming community just east of the West Texas border. I'm sorry, just west of the...West Texas border. And I was raised by my grandmother. I was a special education student from second to fifth grade, which really, you know, taught me a lot of things. It taught me how to bounce back. That's for sure. Taught me how to fit in when people didn't understand who I was. But most importantly, my childhood taught me that anything is possible if I'm willing to put the preparation work in and seize the opportunity. In my adult life I had a period of time, say 15 years or so, where I was gainfully employed and successful to some degree but just not laser-focused on what mattered. You might say I was in a mediocrity trap. In 1997, I went to work for Mark Cuban about a year after I had gotten out of that trap and had a real paradigm shift about what it was gonna take for me to be successful for my family. When I worked for Mark Cuban you can imagine 1997, the dawn of the internet explosion. It was such a breathtaking opportunity Steve. But I remember those times mostly as being a student of the game. Something I learned from him. And I was a voracious book reader. I was a mentor to anybody I did business with. And by 2001 after he'd sold the company to Yahoo, I became Yahoo's Chief Solutions Officer right after the dot-com crash of 2000. So my team and I went out to rebuild hundreds of millions of dollars of lost business because all of those companies, like eToys, our big advertisers, had gone caput. And through those experiences, I built up a perspective that if we commit ourselves to lifelong learning, and we lead with love in our hearts for other people and expect nothing in return other than that they improve and pay it forward, you can accomplish anything in this world we live in. Steve: Wow, what a rich background and then to be able to take that background and, like, Clovis, New Mexico? You mean you can be successful if you were born in Clovis, New Mexico? Tim: I'll tell you something. Let me tell you something about Clovis, New Mexico. Little town, 30,000 people. I was on the debate team in high school, Steve. And we wanted to be nationally ranked. Now, it was a real kind of a pork chop circuit, right. There was the Las Cruces tournament, the El Paso tournament, the Odessa tournament. We had to get in our cars and drive over two hours to Lubbock, Texas, to go to a decent library to research for our debate. And we had to compete with, you know, Houston's Bellaire and Dallas' St. Marks and all these great folks in New Mexico, and all the big schools from Albuquerque and Santa Fe. But I'll tell you something, my senior year, we won state championship, and we went to the national tournament, and we didn't have nearly the resources of anybody we competed with. But man, I gotta tell you, and I thank my coach for this, we had heart. Steve: Wow! Well, I'll tell you I can attest that people from the salt of the earth communities like this can have a big difference in the world. Tim: Yeah. And I think too Steve, is that there's something in our values raised in that environment that makes us really good connectors. And I also think it makes us hungrier to find some way to get back that edge. And to look for those invisible resources that are out there, like knowledge that can really give us a leg up. And it makes us wanna give back too when we become successful, you know, there's a natural, very deep set generosity. And I gotta tell you, I come from it very honestly. I mean, the patriarch of our family is my great-grandfather the late great Tommy King. And he was one of the founders of Clovis when it organized into a city back around it, you know, after the Great Depression. And he was a successful farmer. And one of the things he did before the Dust Bowl era, right before it, was he engaged with some agricultural technologist and became the first farmer in that part of the country to use a circular farming techniques, which when the Dust Bowl hit, helped his farms survive if not thrive while others withered away. And in our family, one of the most poignant stories about Tommy was how much he gave back to other farmers who were in crisis. The ones that bullheaded, they wouldn't try circular farming knowing that the science said there was something coming in a drought. He was happy to give them microloans. He never collected on them. He would just tell people, "When this happens in the future, you pay it forward." And I believe that his philosophy really represented, you know, small town America. Steve: Oh, that's a great story. And then to actually go from being a special ed student to being successful, that's got to give hope to special ed students anywhere because, you know, they're behind a gun. And so, is there hope? I mean, like, can we make it? Tim: It's tough. I mean, you know, more background here. So my grandmother raised me because my mother abandoned me when I was in four. And it manifest into tremendous depression when I was a little kid. And it exhibited itself in discipline issues. And during those days, Steve, they really didn't have much to do with a kid, you know, when you're seven. So, all they really can do is put you in special education. And that experience was really challenging because it's not just that you're taken out of school, that you're ostracized. And when you go to church you're treated differently because, you know, you go to the other school. And I picked up the nickname Shortbus, and I really didn't shake that nickname till junior high. But I think the thing that I got out of the whole situation is when they put me back into the general population in the sixth grade. I had to deal with bullies for the first time. You know, when you're different you're gonna deal with bullies. For parents, this is a great challenge when a child is singled out into a program like special ed or frankly like gifted for that matter. And I'll tell you, I think my point of view about how I dealt with that traumatic sixth and seventh-grade year had to do with how I felt about love. I'll give you a classic story. So, in the seventh grade, the day that you wear your nice clothes and your nice white shirt for the picture, you know, for the yearbook? Steve: Yup. Tim: I went in and this bully who went to church with us demanded my lunch money and I hesitated. So he punched me right in the nose and I bled all over my shirt. Not gory but I bled on my shirt. It ruined me for the picture that day. When Billy, my grandmother, came to pick me up, I thought she was gonna just, you know, have it out with that boy's mom, or at least give him a good talking to. So when Billy and I are sitting in the vice principal's office and we're alone for a second, she turns to me and she looks at me and she says, "You know the problem here is that you don't love those boys enough." I remember looking at her and I point at my shirt and I said, "What do you mean? He's mean. He's a mean boy." And she said, "In our family, you don't love people because of who they are. You love people because of who we are." And she goes, "That's gonna go a long way with you fitting in at the school." And so she said I should invite him over after church. Because she believed that people were inherently good and when they were mean, or when they were bad, there was something about the story that you don't know. And so he came over after church and stole some of my stuff and still kind of picked on me but he didn't punch me in the nose. And then I guess he felt the duty to invite me over to his house a few weeks later on the other side of the tracks where he lived. And when I visited his home that Sunday afternoon, I realized why he was a bully. His father, a drunk, swore at him coming in through the front door. His older brother whipped him with what, like a horse bridle, in front of me. Later, and I realized that this guy had been going through a lot more than I was. And that he was manifesting it. He was a big guy. He was manifesting it by picking on the only thing that he could get away with picking on, that's a little guy called Shortbus. And once I had that breakthrough, Steve, it really changed the way I thought about people. I truly began to understand that if we give someone our love and we care about them, whether it's on a personal level like this or on a professional level like say someone that I manage, you'd be surprised how many of their problems go away. And how you can convert a bully into a blocker. And I gotta say, that guy and I became good friends. And a little bit more than four years later, he put up posters for me when I successfully ran for senior class president and won. And I realized that for the rest of my life, I'm gonna go out into the market and love people because of who I am, and it's very easy to find things about them that are incredibly easy to love. And that I'm assuming when people don't give back, when they don't do the right thing, when they're mean spirited. I'm assuming that there's something about their story or struggle that I have no knowledge of. And it's made me a much deeper listener and a much more curious person in a good way. Steve: Well, that's a fantastic experience and thank you for sharing it. How grateful are we for the people in our backgrounds that help us grow and develop and overcome maybe some of the deficiencies that we might have that we may or even may not be aware of, that help us start becoming what we're capable of becoming. So that's really an inspirational story. And then love is so powerful and we may talk about it more after our interview but after...well, I was going through my college career I sold books back East. And one of the great books that I read was "The Greatest Salesman in the World", "About the Scrolls," and "I Will Greet This Day With Love In My Heart," and "How Will I Greet Those That Treat Me Poorly Love." And, oh, my goodness, you just fill this tremendous power that comes from it. So I'm so glad you shared that. Tim: Well, thank you. And I will tell you, there's real science or at least there is real psychological research behind this. And if you think about it, this is a manifestation of Maslow's hierarchy, right? Abraham Maslow studied something he called B-love, that is being love. That is a detached form of caring about another person, like I care about another person whether or not you care about me. I care about that person solely because I wanna help that person grow. I don't care about that person because I need a new friend. D-love, Maslow brought about this, a deficiency based love, says, "I need to be loved." So everything I do from being friendly to making, you know, advances, whatever you do to try to go out and help people, you're doing it to solve one of your problems. So, next we'll talk about the idea that when we feel fulfilled in terms of how much we think we're cared about, and that the way we think about love and other people, again, whether it's personal or professional, when we do that, we are making the leap to becoming like self-actualized, if you will. And that it's the most powerful way to think about loving other people because there's no anxiety in those relationships because you're not expecting anything in return. And that's what makes them so beautiful. And I found in my business life, that as a leader, as a manager, as a colleague, this works even more. Because, you know, we need people to encourage us at work. We need people to care about us as customers. And I believe too many people are just traders, transactionalists, and don't bring that Maslovian, you know, B-love to work every day. Steve: Okay. All right. Well, that's a powerful point of view and force in our work lives. Now talking about how to be successful in what we do in business, in our work, and in life generally, it does take work and effort and doing certain things that make a difference. So you shared earlier, that as we visited, that you had made a discovery in your mid-30s that led to ten promotions and helped you achieve a strong financial position and financial security. Can you talk a little about that? What was that? Tim: So this is like 1996, 1997. I had been coming back into my studentship, and I had gone from just need to know in terms of learning to being a voracious reader of books. And not just on stuff that mattered to my current job but anything that was adjacent to it. Anything that I thought was interesting to know in the future. I was at a point Steve, where I would read a book a week. I would burn through these books. I'm not talking novels either I'm talking about complex books in some situations. And what happened was I began to talk about different things with clients. So when I go to work for Cuban, I had this mentality kind of fed by Leo Buscaglia as love on one hand and Steven Covey on the other. I had this mentality that I'm gonna go out and I'm gonna promote other people's success during a time of great change. Because you know the internet was disrupting everything. So I worked a lot with the retailers. So I would go out and work with Neiman Marcus or Victoria's Secret or whomever. And I took it upon myself to learn everything I could about their business future and their business challenges, and then share that with them. And that's where I had the big aha. That if my business practice was to aggregate my intangibles, my knowledge, my network of relationships, my ability to care about people. If I build those up so I can give them away, and systematically help other people make the leap without expecting anything in return, that faith would repay me with endless referrals, a powerful brand, and a magnetic value proposition inside my company. Because I make decisions with Mark, I start to adopt the style. I was a sales person of service out in the community. We accomplished a lot of great things. He sells the company two years later to Yahoo if you remember back in those days. When I transfer out to the West Coast at Yahoo, I've really refined the system of building relationships by sharing my knowledge, and my network, and my compassion in every interaction. And it was like the doors swung wide open. Because now it's 2000, now it's right after the dot-com crash. This idea about helping people finds success during times of great change and expecting nothing in return. Boy, it worked crazy good in Silicon Valley and that's when I begin to train the young Yahoos on this philosophy and this set of values. And that's where I begin to write down the steps I was taking to really document you know how I read books and how I chose books, and why I read books instead of articles, and what I talked about when I was networking. And that's where "Love is The Killer App" came from a few years later. And since then, you know 15 years, I've been traveling around the world meeting people, comparing notes and really building upon that philosophy. Steve: Oh, that's great. And as we've talked about with our listeners the twelve principles of highly successful leaders, these are the things that are present across the board for high achievers. Also they were able to sustain, really, success over a long period of time, both personally and professionally. And one of those was applying the power of knowledge. In other words, gaining knowledge in the first place, and one of the primary ways is being a reader. And so this is a great reminder to every one of us listening here today of the power of reading good books on a regular basis because they're just totally stimulating, aren't they? They just fire... Tim: They are. Steve: ...your mind. Tim: And what I like about books is that books require you to take a deep dive into usually a narrow subject. And you don't just learn a couple of data points and one story, you learn a construct. It's got a thesis, and it's got supporting anecdotes, and it usually has research and it's really meaty. And you can deeply understand the topic so you can give it away, right? So the twist here Steve, is read good books but have a mix. And what I say about this is every third book you read, read for someone else's benefit. I call it prescriptive reading. Think about what... Steve: What's an example of that? Tim: Yeah. Think about information challenges that the people have and go study on their behalf because talk about expanding your resume. Steve: Right. It gives you a whole different perspective to maybe a different discipline. Tim: Absolutely. That's made a big difference for me. And that was another part of my turnaround in the late 1990s that really shifted me away from the idea that, you know, I read books to help myself. No, I read books to help the world, and sometimes it helped me too. And that philosophy will keep you from being too laser-focused on what's in front of you and not focused enough on what's coming in the future. Steve: Okay, great. That's a powerful influence on our success. And you told this wonderful experience that you had personally, this story about the bully and your grandmother saying, "Listen, we need to love him." Tim: That's right. Steve: See things from a different perspective. So you must have learned, Tim, somewhere along the line that love can be applied across the board, in business and as an entrepreneur. What have you found? Have you been able to make the jump of using that in your personal life to a professional life, and what's the experience? Tim: Yeah. I've made it my professional strategy, you know, for the last 20 years or so. I mean, when I say love in a professional sense, Steve, I mean, that I have a set of emotions about you. I care and I am now committed to promote your success by sharing my intangibles with you, my knowledge, my network, my compassion. I want you to think about, for those of you listening, I want you to think about the mentor in your life who's made the most difference to you. There's maybe one. There's maybe two. Maybe some of you might have three, but there's maybe one, right? And I want you to really think about how that person felt about you. And I want you to think about how open that person was to loving someone like you, not as a family but just as a person maybe at work or just a person maybe they did business with. I'm talking about unleashing the capacity to do this every day. I developed strong emotional aspect for almost every single person I do business with, and I don't make them earn it, Steve. It happens quick. Maybe I start out by liking him and I look for things that other people don't look for. I wanna hear their story so I can admire their values and understand their point of view. I find things that are familiar about them. I experience their passion so I can really understand what makes them a unique person. I think our capacity to care about people that work quickly and then maintain that over time. I think that is oxygen for leadership. Steve: Absolutely. That's so powerful. I mentioned the research that we've done for 40 years and these principles that are present, you're doing them? Tim: Well, you know, we're thinking alike buddy. Steve: We are thinking alike. I mean, one of those was living the golden rule, really exceptional leaders. I mean, you can have leaders that are good in different contexts but when you put these together, and exceptional leaders also one that really cares about people. And this is manifest in how they treat others, how they learn about others so that they can bring the best out within others. And this is what starts creating excellence, so great going on this. Tim: Thank you. Thank you so much, man. Steve: And by the way, Tim's book "Love is The Killer App." He talks about these three things, knowledge, networking, and compassion. Would you mind touching on the compassion part a little bit? And I'd like to go back to the networking because you said one thing that is important, and that is how a mentor maybe ought to perceive others with this love, learning what their story is? How do you bring out the best? And you'll find mentors that have done this the same way for you. So, how can you be a good mentor? That's one question. And then we'll hit this other one before we're done. Tim: Absolutely. So, the best way to be a mentor is to remember that the mentor is usually a benefactor, a teacher of sorts. And their job is to give the hero a gift that will enable the hero to make it to the next stage of her journey. When you think about Homer's Odyssey, with the character mentor, when you think about the archetype of mentorship stories in very modern culture, like, say, Star Wars, with, you know, Yoda, or with Karate Kid in Miyagi, that's what it's all about. It's about finding that person that has heroic qualities. That's going somewhere a little too fast. You've got a gift for them, maybe it's your personal experience. You've been where they've been. You have knowledge that they need and you give it to them. You expect nothing in return but that they apply that knowledge and learn and improve. All the mentors, they gain enthusiasm from the student learning. And when they need to, they go beyond just sharing information and perhaps make vital connections to create alliances, to help that hero deal with upcoming adversity. As a mentor I just want you to think a little bit like Yoda. And I want you to not really think so much like a person who's like a fire hose of information, a person who's gonna "Take somebody under their wing." I think you need to think about your role very transitionally. But most importantly, you need to expect nothing in return other than that they hero seizes the opportunity, right? I think that is what changes the game. And by the way, you know, I know you talk a lot about how to be successful over a long period of time. My philosophy that we give without expectation, this is not lip service, Steve. I literally expect them to pay it forward but I don't expect them to pay it back. And I'm telling you that is liberating, because when I meet leaders who were generous for years and years and years and then they "Burned out." This is why they got burned out. Because just enough people didn't pay them back or give them credit or whatever their reciprocity was supposed to be and they were disappointed. And I call it ego economics. And it sets in on a lot of people in their career. Super generous in their 30s, a little bit jaded in their 40s, super protected in their 50s. I'm 55 years old, I've never been more generous because I'm not disappointed in people. And I think that's what comes with being detached about what you get back. Steve: Oh, great. You know that's great. I think even the savior of mankind, Jesus Christ, if you...regardless of what you believe, as it was described when he healed the lepers, and he had one return and thanked him. Nine did not. And if your expectation is that people are gonna thank you, you're probably gonna be somewhat disappointed. Tim: Absolutely. You will. Steve: If that's your expectation. Tim: And it's interesting. So, you know, I love that story and I appreciate that example. I think that, for us, the secret to a long-term career is a very flexible perspective. And I think that if we're willing to go against the grain that there's a quid pro quo. I think we really open up our opportunities in life. You just continue to be great until the day we die. Steve: Wonderful. What a refreshing wonderful perspective. I had a friend, Tim, that I had lunch with last week. He is a facilitator for a very successful training company. He has been, really most of his career 30 years, he's gone all over the world. And one of the things he talked about was precisely this, is that his observation is one of the keys for companies to get ahead today to be able to be a best in class, be the best in their industry, is to have active healthy coaching program within the company where people are able to coach each other. And I think it's really these type of qualities you're talking that would help that be successful. Tim: Absolutely. And for leaders, whether it's a small business or an enterprise, you can create a culture of coaching. So even if there's not a funded program per se, it can be the habit inside that organization. So Tom Ward was brought into Barton protective in Atlanta to turn that company around several years ago and he created that culture. He had something called Vision Quest. These values cards everybody carried with them. It was a huge part of the cadence that he had in that company. And the third value was love. "Do you care about me as a person?" He hired based on it. He rewarded based on it. He promoted or did not promote based on it. It made a big deal to how people behaved, because culture at work, culture at work is a conversation that's led by leaders about how we do things here. And that's like software that runs a company, right? So, when you as a leader go to work and say, "We coach other people because of who we are as a company," then the habit sets in. And it's very attractive, Steve, to today's millennial, to have a reputation for a company where we bring each other up as opposed to where we internally compete. So I just want everybody listening to know this is within your power. And you don't need a big checkbook, but you do need to have consistent cadence because you need to manage that conversation about how we do things here successfully. Steve: Yeah, absolutely. Well, I am, like, speechless that we are out of time. I can't believe it. Tim: It goes that quick, man. It goes that quick. Steve: It has been fast today. Now, any...what's one last bit of advice, or any tips you would like to give our listeners before we wrap it up today. It's been fun Tim. Tim: Hey, it's been fun buddy. So I'll tell you a place where you can get some stuff about me, but before that, I'll just give you one of my...it's kind of my new little piece of advice I like to give people. And I can't say that I came up with it but I can tell you I'm championing this idea. If you want to be a happier person in, life in traffic and in work, the next time somebody irritates you, does something that is seemingly rude to you, I want you to assume that that person is operating under the best intentions. I want you to assume that you don't know the whole story. Because more often than not, Steve, people are operating under the best intentions. It's just that their needs clash with our needs. And we spend a lot of our time judging those people instead of inquiring about the rest of the story. So like I said, next time somebody cuts you off in traffic, you might wanna consider that she's trying to get somebody to the hospital before you honk your horn and shake your fist. And this goes double for you as business owners and leaders. Steve: Oh, that's great advice. I hope I can get this right. This comes from an article I read yesterday and it really left a deep impression on me. It was given by the leader of a worldwide organization, a humanitarian service organization. And the fellow talked about 50 years ago, he had a mentor. And the mentor said, "Every time you meet somebody, if you'll say to yourself this person is dealing with a serious challenge," he said, "You're gonna be right 50% of the time." Tim: And guess what? Before, when you just reacted and judged that person, you were wrong 50% of the time. Steve: Exactly. Well, he said, "Man I thought my teacher, my professor was a pessimist," he said, "But I have come to learn what wise advice that was." Because indeed as we look around what's going on in the world, it is often true. And I love your comment that half the time we're wrong. So let's give everybody a lot of slack here, right? Tim: On that, you know, again, yeah, let's put our self in another person's shoes. And let's find out more. You can learn and grow so much more. You can expand your thrive so much more. And, again, you can just avoid those regrettable mistakes we all make. Steve: Yup. Well, these are some great things that we can do to make a difference, to lift others, to build others. Tim has done a great job in sharing these. What a tremendous background. And, Tim, if you'll share how our listeners can learn more about what you're doing, and which is tremendous? We'd love to hear about it. Tim: Absolutely. We've set up a special page for your listeners, Steve. It is timsanders.com/byb. That's timsanders.com/byb. I'll have a huge download excerpt of Love is The Killer App for you to read. I'll also have a way you can connect with me on LinkedIn, and find other resources like videos and other such content on my site. Steve: Well, that's terrific. Thank you Tim Sanders for being part of this show today. This has been enlightening. It's been wonderful. Tim: Oh, absolutely. It's been a pleasure Steve. I really enjoyed it. Steve: Well, you bet. We wish you all the best as you're making a difference in the world as well Tim. Tim: Thank you. Steve: And to all of our listeners, never forget, you are creating a ripple that can never be counted for good as we do the right things, good things. And they do make a difference. They lift our own lives and they lift others. And they help us be more successful, happier and have fuller lives. I'm Steve Shellenberger with Becoming Your Best Global Leadership wishing you a great day. See acast.com/privacy for privacy and opt-out information.