WEBVTT 1 00:00:00.000 --> 00:00:04.560 Unless the goal is to exit the company, if you enjoy doing the thing, then it's like, 2 00:00:04.560 --> 00:00:07.080 okay, well, then how can we get the most of you doing the thing? 3 00:00:07.080 --> 00:00:09.040 Because that is the highest leverage time for you. 4 00:00:09.040 --> 00:00:13.280 And then it's like, how do we declare everything else off of your calendar so that you can do the most of that? 5 00:00:16.720 --> 00:00:19.600 Welcome to the game where we talk about how to get more customers, how to make more 6 00:00:19.600 --> 00:00:21.000 per customer and how to keep them longer. 7 00:00:21.000 --> 00:00:23.440 And the many failures and lessons we have learned along the way. 8 00:00:23.440 --> 00:00:24.720 I hope you enjoy and subscribe. 9 00:00:25.720 --> 00:00:29.200 Alex and Leila, welcome to the Bigger Pockets Podcast. 10 00:00:29.200 --> 00:00:30.000 Thanks for being here. 11 00:00:30.000 --> 00:00:31.200 Thanks for having us on. 12 00:00:31.200 --> 00:00:32.400 Honour to be here. 13 00:00:32.400 --> 00:00:33.760 So welcome back, Alex. 14 00:00:33.760 --> 00:00:39.520 You know, funny, quick little anecdote I think when we interviewed you about eight months ago, 15 00:00:39.520 --> 00:00:43.600 I said I had hired one of my sales guys to become my COO and then you're like, 16 00:00:43.600 --> 00:00:44.800 well, I don't know if I would have done that. 17 00:00:44.800 --> 00:00:47.280 And then he listened to it. 18 00:00:47.280 --> 00:00:52.000 He's like, man, what do you think about that? 19 00:00:52.000 --> 00:00:53.040 And I was like, you're doing great. 20 00:00:53.040 --> 00:00:53.920 He's doing great. 21 00:00:54.720 --> 00:00:56.720 It's a small update, just a small update. 22 00:00:56.720 --> 00:00:58.000 And Leila, I'm really happy to have you here. 23 00:00:58.000 --> 00:00:59.200 Happy birthday. 24 00:00:59.200 --> 00:01:00.320 Thank you so much for being here. 25 00:01:00.320 --> 00:01:04.960 And I wanted to say, you know, I actually, I subscribed to your YouTube channel first. 26 00:01:05.840 --> 00:01:10.400 It was a video you did about a year ago called How to Go From Zero to a million dollars. 27 00:01:11.040 --> 00:01:14.160 And it was a longer piece of content. 28 00:01:14.160 --> 00:01:16.240 And I was like, okay, well, you know, like I do. 29 00:01:16.240 --> 00:01:17.360 I'll watch a minute or two. 30 00:01:17.360 --> 00:01:18.160 And I watched the whole thing. 31 00:01:18.160 --> 00:01:20.160 And I was like, wow, this is really good. 32 00:01:20.160 --> 00:01:21.120 And you had like a PowerPoint. 33 00:01:21.120 --> 00:01:21.840 It was the whole thing. 34 00:01:21.840 --> 00:01:23.040 And I was like, this is great. 35 00:01:23.120 --> 00:01:27.280 And then a couple days later, I get served up one of your videos, Alex. 36 00:01:27.280 --> 00:01:29.360 And I'm like, I'm pretty sure her name is Hormosi. 37 00:01:29.360 --> 00:01:30.800 But like, where are the chances? 38 00:01:30.800 --> 00:01:33.360 There's another YouTuber named Hormosi. 39 00:01:33.360 --> 00:01:34.320 This is all crazy. 40 00:01:34.320 --> 00:01:40.000 So YouTube are the only YouTubers that I will watch an hour-long video from. 41 00:01:40.000 --> 00:01:42.480 I just watched your hour-long video last week. 42 00:01:42.480 --> 00:01:43.920 And I was like, wow, every minute. 43 00:01:43.920 --> 00:01:44.400 Thank you. 44 00:01:44.400 --> 00:01:47.760 So good content from start to finish. 45 00:01:47.760 --> 00:01:49.440 Excited to talk about some of those principles. 46 00:01:49.440 --> 00:01:50.720 He's not lying, man. 47 00:01:50.720 --> 00:01:54.400 I'm glad you guys are here because this is all Rob has talked about for the last three 48 00:01:54.400 --> 00:01:55.400 days. 49 00:01:55.400 --> 00:01:56.400 Okay. 50 00:01:56.400 --> 00:01:57.600 That's part of the way to Alex. 51 00:01:57.600 --> 00:01:59.040 Hopefully the Linus coming on her birthday. 52 00:01:59.040 --> 00:02:00.240 We can't mess this up. 53 00:02:00.240 --> 00:02:01.440 It's got to be perfect. 54 00:02:01.440 --> 00:02:02.880 Really can't mess it up. 55 00:02:02.880 --> 00:02:06.000 So I've been rehearsing in the mirror, but it's all good. 56 00:02:06.000 --> 00:02:07.840 Well, I'm glad you guys are here. 57 00:02:07.840 --> 00:02:08.880 Thank you especially on your birthday. 58 00:02:08.880 --> 00:02:10.080 That's very, very sweet of you. 59 00:02:10.080 --> 00:02:10.880 So we appreciate it. 60 00:02:10.880 --> 00:02:12.240 Our audience does as well. 61 00:02:12.240 --> 00:02:12.880 Absolutely. 62 00:02:12.880 --> 00:02:14.160 Tell us about acquisition.com. 63 00:02:14.160 --> 00:02:16.080 Why are you guys passionate about this project? 64 00:02:17.600 --> 00:02:18.240 Oh, fine. 65 00:02:18.240 --> 00:02:19.040 Okay. 66 00:02:19.040 --> 00:02:20.080 Is that the signal? 67 00:02:20.240 --> 00:02:20.960 Sneak attack. 68 00:02:20.960 --> 00:02:21.760 Sneak attack. 69 00:02:21.760 --> 00:02:23.360 It's like you need a still second base. 70 00:02:23.360 --> 00:02:24.160 Is that what she's saying? 71 00:02:24.160 --> 00:02:26.400 Well, no, we, yes, because if we ever go together, 72 00:02:26.400 --> 00:02:28.800 she always jokes that I will be like, you should go. 73 00:02:28.800 --> 00:02:30.320 And then I like have time to think about what. 74 00:02:30.320 --> 00:02:31.760 This perhaps a better answer. 75 00:02:31.760 --> 00:02:35.360 So the person that's what we're doing, the trick is you're supposed to say, 76 00:02:35.360 --> 00:02:37.760 that's a good question by yourself some time. 77 00:02:37.760 --> 00:02:39.440 And then you get, oh, I do that all the time too. 78 00:02:39.440 --> 00:02:39.920 I do it with you. 79 00:02:39.920 --> 00:02:41.520 You don't realize it all the time. 80 00:02:41.520 --> 00:02:44.480 I make you talk first and then I sum up what you said better than you said it. 81 00:02:44.480 --> 00:02:45.840 And add maybe one piece that you said. 82 00:02:45.840 --> 00:02:47.120 A little piece on the end, right? 83 00:02:47.600 --> 00:02:50.960 No, I mean, the reason for acquisition.com, you know, interestingly, 84 00:02:50.960 --> 00:02:52.960 most of our businesses have come out of personal need. 85 00:02:52.960 --> 00:02:58.720 And so like I got into, you know, I got in shape and then people started asking me how I got in 86 00:02:58.720 --> 00:02:59.200 shape. 87 00:02:59.200 --> 00:03:00.800 And then I started helping people get into shape. 88 00:03:00.800 --> 00:03:04.000 And then I started growing a business of helping people get in shape. 89 00:03:04.000 --> 00:03:05.680 And then people who, how people get in shape, 90 00:03:05.680 --> 00:03:08.400 asked me how I got the business of people getting in shape. 91 00:03:08.400 --> 00:03:13.840 And then people who had businesses that helped other, you know, small businesses started 92 00:03:13.840 --> 00:03:15.280 asking me how my businesses go. 93 00:03:15.280 --> 00:03:16.280 You know what I mean? 94 00:03:16.280 --> 00:03:18.800 It's just continued to work out that way. 95 00:03:18.800 --> 00:03:25.440 And so, Laylin and I still had, at the time, when we started, what would then become acquisition.com, 96 00:03:25.440 --> 00:03:28.800 we owned Jim Launch Procedure Labs in Allen, a software company, Procedure Labs, our 97 00:03:28.800 --> 00:03:32.280 supplement company, and Jim Launch was our gym licensing business. 98 00:03:32.280 --> 00:03:37.280 And so we had, I think at the time, just about 4,000 people would go through our licensing 99 00:03:37.280 --> 00:03:38.280 program. 100 00:03:38.280 --> 00:03:42.640 And we had the same amount of people who were selling our supplements to that same distribution 101 00:03:42.640 --> 00:03:43.640 base. 102 00:03:43.640 --> 00:03:45.240 And COVID happened. 103 00:03:45.240 --> 00:03:49.320 And so, that obviously impact, and the software was actually how to get, is a MarTech solution, 104 00:03:49.320 --> 00:03:53.240 so how to get leads in the door for brick and mortar businesses, of any kind. 105 00:03:53.240 --> 00:03:56.640 It was supposed to be for Jim's originally, and then other people who were like, hey man, 106 00:03:56.640 --> 00:03:59.960 I have a bunch of plumbers, I have a bunch of whatever's, does it work for them, and it 107 00:03:59.960 --> 00:04:00.960 turned out it did. 108 00:04:00.960 --> 00:04:03.520 So it actually had a much bigger market than we thought it did originally. 109 00:04:03.520 --> 00:04:06.440 And so, middle of COVID, things are tough for Jim's. 110 00:04:06.440 --> 00:04:10.320 I'm almost like, I gotta take my, take my mind off this stuff. 111 00:04:10.320 --> 00:04:13.760 And I get a sales call, because we're rolling out software, I'd read all the books, it's 112 00:04:13.760 --> 00:04:16.600 like founders should take the first sales call, so you can get the know of the customers. 113 00:04:16.600 --> 00:04:20.920 And so, I still had a tiny-ish brand, you know what I mean? 114 00:04:20.920 --> 00:04:22.520 Like I had a tiny fan base. 115 00:04:22.520 --> 00:04:23.520 It was tough. 116 00:04:23.520 --> 00:04:29.000 Yeah, and so, I was right on the cusp where it was still okay for me to take those calls, 117 00:04:29.000 --> 00:04:32.040 where it wouldn't be where people just like hop on to have no interest in actually the 118 00:04:32.040 --> 00:04:33.040 product. 119 00:04:33.040 --> 00:04:37.680 And so, this particular call guy got on and was like, I don't want anything to do with 120 00:04:37.680 --> 00:04:38.680 your software. 121 00:04:38.680 --> 00:04:41.360 He's like, but I've read everything that you've ever put out. 122 00:04:41.360 --> 00:04:45.280 I've applied all of it, and I like tripled my business, and I want you to partner with 123 00:04:45.280 --> 00:04:46.280 me to scale it. 124 00:04:46.280 --> 00:04:51.800 And I was like, this isn't really the right time, whatever, anyways, he still, he sold 125 00:04:51.800 --> 00:04:52.800 me on it. 126 00:04:52.800 --> 00:04:55.000 And I really liked him, and he owned a photography business. 127 00:04:55.000 --> 00:04:56.160 That's called Enchanted Ferrys. 128 00:04:56.160 --> 00:05:00.240 And at the time he had one studio, and he's doing really well, and he had an agency business 129 00:05:00.240 --> 00:05:05.400 on the side that helped like he marketed photographers the same way he had it for his own studio. 130 00:05:05.400 --> 00:05:09.680 And after finding out about that, I was like, you know, what if we just stop this agency 131 00:05:09.680 --> 00:05:12.480 thing and just like scale the hell out of this chain? 132 00:05:12.480 --> 00:05:18.360 And so, we invested in the business, and that was three years ago, and that business now 133 00:05:18.360 --> 00:05:22.920 went from one single location to doing, you know, two and a half million a month over 134 00:05:22.920 --> 00:05:25.680 with their over 30 locations, so we just owned all of them. 135 00:05:25.680 --> 00:05:26.920 And we just continue to scale that. 136 00:05:26.920 --> 00:05:29.080 And so, that was like the first deal we did, and then... 137 00:05:29.080 --> 00:05:32.720 And you own all of us as in like, they're not franchise about anything. 138 00:05:32.720 --> 00:05:33.720 Right. 139 00:05:33.720 --> 00:05:34.720 We own more. 140 00:05:35.160 --> 00:05:36.160 We did a... 141 00:05:36.160 --> 00:05:37.160 I was like, oh, that one. 142 00:05:37.160 --> 00:05:38.160 Well, maybe we should do this again. 143 00:05:38.160 --> 00:05:42.840 So, we did another deal, and then that business went from like 16 and a half million in 144 00:05:42.840 --> 00:05:47.640 top line to 50 million in top line the next year, and I was like, okay, that worked well. 145 00:05:47.640 --> 00:05:48.800 And then we did another deal, another deal. 146 00:05:48.800 --> 00:05:51.600 And so, by the end of that year, we had done I think three or four... 147 00:05:51.600 --> 00:05:54.560 I can't remember where it was, three or four deals, three deals. 148 00:05:54.560 --> 00:05:57.200 And I was like, you know, I think... 149 00:05:57.200 --> 00:05:59.600 And we were going back and forth on selling gem watch, because it was COVID. 150 00:05:59.600 --> 00:06:02.520 It wasn't like the ideal time to sell a gem company. 151 00:06:02.520 --> 00:06:05.600 But the flip side was like, interest rates were zero. 152 00:06:05.600 --> 00:06:07.120 And so, there was tons of money in the market. 153 00:06:07.120 --> 00:06:10.400 So, it's like, okay, this is a great macro time to sell, but a really bad micro time for 154 00:06:10.400 --> 00:06:11.960 the business to sell. 155 00:06:11.960 --> 00:06:12.960 And... 156 00:06:12.960 --> 00:06:16.080 But Laila and I committed a few years earlier that we would sell the business if we felt 157 00:06:16.080 --> 00:06:21.680 like we no longer loved the business anymore, and we'd both been in fitness for 10 years. 158 00:06:21.680 --> 00:06:23.080 And we were ready to just... 159 00:06:23.080 --> 00:06:24.880 I didn't want to be the gem guy anymore. 160 00:06:24.880 --> 00:06:28.280 And so, and the fact that these other deals had gone well, like I wonder how different 161 00:06:28.280 --> 00:06:31.880 life would be if like those first deal or two didn't work out. 162 00:06:31.880 --> 00:06:34.800 We probably wouldn't have sold, but they did work out. 163 00:06:34.800 --> 00:06:42.640 And so, the day after we sold, which was December 24th of 2021, we started acquisition.com 164 00:06:42.640 --> 00:06:43.640 the next day. 165 00:06:43.640 --> 00:06:48.080 And so, then we had, because we had, you know, we're probably taking 40 million distributions 166 00:06:48.080 --> 00:06:49.080 up to that point. 167 00:06:49.080 --> 00:06:52.640 And then we also had our sale money, which was 46. 168 00:06:52.640 --> 00:06:55.720 And we started our family office, which is acquisition.com. 169 00:06:55.720 --> 00:06:58.200 And so, we buy and scale businesses. 170 00:06:58.200 --> 00:06:59.200 That's really cool. 171 00:06:59.200 --> 00:07:01.600 So, Laila, I know you're the CEO of acquisition.com. 172 00:07:01.640 --> 00:07:05.200 What exactly is the type of workplace that you're trying to build there? 173 00:07:05.200 --> 00:07:10.520 I'm trying to, and it's really we, you know, because we're a small business, I think. 174 00:07:10.520 --> 00:07:15.320 But, you know, technically the team reports to me, but I mean, we work on everything together. 175 00:07:15.320 --> 00:07:18.680 Really what we want to build is, in terms of the type of place, you know, like you look 176 00:07:18.680 --> 00:07:22.520 at like traditional private equity, it's a very punishing environment. 177 00:07:22.520 --> 00:07:25.080 I think, like it's run by fear. 178 00:07:25.080 --> 00:07:28.120 They're pretty much like, it's the golden handcuffs, which is like, all right, I'm going 179 00:07:28.120 --> 00:07:31.840 to get my two years that, I won't say their names, but like these top firms, and then 180 00:07:31.840 --> 00:07:32.840 I'm out, right? 181 00:07:32.840 --> 00:07:34.840 Because it's so unsustainable. 182 00:07:34.840 --> 00:07:38.240 And so, you know, when we looked at doing what we're going to do, I was like, you know, 183 00:07:38.240 --> 00:07:41.880 the only thing is like, I just don't want to build a place that actually treats people 184 00:07:41.880 --> 00:07:42.880 like that. 185 00:07:42.880 --> 00:07:46.920 You know, I want to build a place where we don't just build companies, we also build people. 186 00:07:46.920 --> 00:07:52.080 Because, you know, really behind the philosophy of acquisition.com, there's really, there's 187 00:07:52.080 --> 00:07:56.280 strategy, and there's all the strategy that we deploy into the businesses in terms of 188 00:07:56.360 --> 00:07:57.920 how we're going to grow these things. 189 00:07:57.920 --> 00:08:03.160 But who grows those is the people that are in their businesses, and who directs the 190 00:08:03.160 --> 00:08:07.720 people on how to grow those functions and the businesses overall is our team. 191 00:08:07.720 --> 00:08:13.600 And so, you know, really the philosophy behind it is if we can build a place where we don't 192 00:08:13.600 --> 00:08:19.840 just achieve success of becoming, you know, a firm that does 10 billion by, you know, 193 00:08:19.840 --> 00:08:23.880 turning people out, by paying them so much money that they feel like they can't leave. 194 00:08:23.880 --> 00:08:29.520 So by actually fostering an environment where people are constantly learning and developing, 195 00:08:29.520 --> 00:08:31.120 and we're encouraging them. 196 00:08:31.120 --> 00:08:36.240 And I think that there's a lot of talk against this and any time that it's like kind of 197 00:08:36.240 --> 00:08:42.160 risen in the management philosophies, it's so hard to apply and to understand that people 198 00:08:42.160 --> 00:08:43.160 just reject it. 199 00:08:43.160 --> 00:08:48.240 And so my goal is to just build acquisition to 10 billion and then have people ask how 200 00:08:48.240 --> 00:08:50.880 we did it and then tell them that we did it this way. 201 00:08:50.880 --> 00:08:55.000 And you don't have to be mean to people and pay people exorbitant amounts of money because 202 00:08:55.000 --> 00:08:56.640 it's such a terrible job. 203 00:08:56.640 --> 00:09:01.120 You can engineer an environment where people like the business wins, the people win, and 204 00:09:01.120 --> 00:09:02.120 our partners win. 205 00:09:02.120 --> 00:09:03.120 And that's really what it is. 206 00:09:03.120 --> 00:09:06.960 I think that the founder of Whole Foods, he talks about that all the time. 207 00:09:06.960 --> 00:09:11.000 John Mackie, I think I'll say his last time, I always say it wrong. 208 00:09:11.000 --> 00:09:16.120 He talks about creating a win-win-win and not even a win-win-win, but like a win-win-win-win-win-win. 209 00:09:16.120 --> 00:09:19.120 It's like a win for the community, a win for the environment, a win for the employees, 210 00:09:19.120 --> 00:09:23.560 a win for the business, a win for the business financials, a win for the customers. 211 00:09:23.560 --> 00:09:25.800 And we just take that approach at acquisition.com. 212 00:09:25.800 --> 00:09:30.240 It's like if it's not going to make a win for every single person that it touches, then 213 00:09:30.240 --> 00:09:31.240 we can't do it. 214 00:09:31.240 --> 00:09:36.240 And so the business itself exists to be an example of a win-win-win-win. 215 00:09:36.240 --> 00:09:40.400 Win for our portfolio companies, a win for acquisition.com, a win for our employees. 216 00:09:40.400 --> 00:09:46.760 And it just makes it more enjoyable, too, because I think I can't imagine going and being 217 00:09:46.760 --> 00:09:49.600 the CEO of a company where I felt like people didn't want to be there. 218 00:09:49.600 --> 00:09:51.000 Like that just sounds awful to me. 219 00:09:51.000 --> 00:09:52.440 I wouldn't want to be there. 220 00:09:52.440 --> 00:09:59.600 So I think what we want to create is a place where people actually like working and I think 221 00:09:59.600 --> 00:10:00.600 we're doing it. 222 00:10:00.600 --> 00:10:01.600 Yeah. 223 00:10:01.600 --> 00:10:05.400 So it seems like acquisition.com when you're working with these companies, you're effectively 224 00:10:05.400 --> 00:10:09.300 helping them scale, you're helping them build out their systems, their teams. 225 00:10:09.300 --> 00:10:12.400 Is your company set up from an operational standpoint? 226 00:10:12.400 --> 00:10:17.320 The same way you set up the companies, do you have operators or is every employee at 227 00:10:17.320 --> 00:10:22.880 acquisition.com meant to be like a super sniper operator that can be inserted into any business? 228 00:10:22.880 --> 00:10:23.880 It's a good question. 229 00:10:23.880 --> 00:10:29.960 So we essentially have a setup where there's the executive team at acquisition.com, which 230 00:10:29.960 --> 00:10:34.720 services the internal things that we need to have done at acquisition.com. 231 00:10:34.720 --> 00:10:37.280 And then we have what we call pods. 232 00:10:37.280 --> 00:10:42.240 And so there's one portfolio operator with a team of what we call subject matter experts, 233 00:10:42.240 --> 00:10:47.040 say, you know, managing director of people, managing director of customer success, managing 234 00:10:47.040 --> 00:10:49.320 director of sales, managing director of marketing. 235 00:10:49.320 --> 00:10:53.640 And they as a pod can service a certain amount of businesses. 236 00:10:53.640 --> 00:10:57.120 They can do the value creation for those businesses in our portfolio. 237 00:10:57.120 --> 00:10:58.840 And then you duplicate that. 238 00:10:58.840 --> 00:11:02.360 And you know, as of right now, we're focused on like a more like professional services 239 00:11:02.360 --> 00:11:08.360 and a brick and mortar chains, that's probably like the two niches that were focused on. 240 00:11:08.360 --> 00:11:11.440 If we decide to branch out and desass, then we would build that same structure, but with 241 00:11:11.440 --> 00:11:13.000 people who have background and sass. 242 00:11:13.000 --> 00:11:15.680 So that's how acquisition.com is structured. 243 00:11:15.680 --> 00:11:20.200 And then we bring in outside expertise and consultants as needed for like special projects. 244 00:11:20.200 --> 00:11:26.320 And the way that we've built this is that a company comes in and you know, let's say 245 00:11:26.320 --> 00:11:28.760 a company is doing 10 million top line and three million bottom line. 246 00:11:28.760 --> 00:11:32.000 So probably like 30 or so employees somewhere in there. 247 00:11:32.000 --> 00:11:36.400 What we would then do is we will identify what department usually needs to go from zero 248 00:11:36.400 --> 00:11:37.400 to one. 249 00:11:37.400 --> 00:11:39.120 It's usually just non-existent. 250 00:11:39.120 --> 00:11:42.480 And then we will go and actively headhunt and recruit some of the best people from businesses 251 00:11:42.480 --> 00:11:45.560 that are maybe, you know, two or three times the size of that business and put them into 252 00:11:45.560 --> 00:11:46.560 the business. 253 00:11:46.560 --> 00:11:50.200 And then our subject matter expert will deploy our playbooks with that person. 254 00:11:50.200 --> 00:11:54.920 So that way we can create the most enterprise value at the port co at the portfolio company 255 00:11:54.920 --> 00:11:56.960 level, not at the hold co level. 256 00:11:56.960 --> 00:12:01.880 And for us, it's like each of these, you know, SMEs that we call subject matter experts, 257 00:12:01.880 --> 00:12:04.800 you know, if they were sitting on the balance sheet of any of the, before the company's, 258 00:12:04.800 --> 00:12:08.640 it would definitely, you know, hurt the, the P&L, but because we can fractionalize that 259 00:12:08.640 --> 00:12:11.960 and a lot of high skilled labor doesn't require tons of time. 260 00:12:11.960 --> 00:12:15.080 It just requires deep, it takes 10 years to learn, you know, where to hit the machine 261 00:12:15.080 --> 00:12:16.400 through that whole thing. 262 00:12:16.400 --> 00:12:19.280 And so it's like, we can, we can consolidate that cost at hold co. 263 00:12:19.280 --> 00:12:25.320 So the actual profit is, you know, I'm not saying flated, but just way better at the portfolio 264 00:12:25.320 --> 00:12:26.320 level. 265 00:12:26.320 --> 00:12:28.920 Yeah, exactly because we can, we can consolidate all this brain power and then copy and 266 00:12:28.920 --> 00:12:32.320 paste things the way we already know it's working and we can take learnings across 267 00:12:32.320 --> 00:12:33.320 the portfolio. 268 00:12:33.320 --> 00:12:37.200 And so we're like, Hey, you know, this, this sale set up is working really well in these 269 00:12:37.200 --> 00:12:38.400 three companies. 270 00:12:38.400 --> 00:12:41.680 We just got a new portfolio company and let's, let's deploy that here, right? 271 00:12:41.680 --> 00:12:44.320 Or like, Hey, this new media platform isn't really really well. 272 00:12:44.320 --> 00:12:45.720 Let's deploy that playbook and the rest of them. 273 00:12:45.720 --> 00:12:48.880 So we just, we can learn way faster and deploy it with faster. 274 00:12:48.880 --> 00:12:51.960 A lot of companies, a lot of personalities mixing, right? 275 00:12:51.960 --> 00:12:56.080 So when you're looking at some of the companies that you're acquiring, if companies coming 276 00:12:56.080 --> 00:13:00.600 in with like a sour work culture, can that be fixed or is that something that might cause 277 00:13:00.600 --> 00:13:02.800 you to like walk away from a deal? 278 00:13:02.800 --> 00:13:06.640 I think that the, given the size companies that we're investing in, you know, these companies 279 00:13:06.640 --> 00:13:10.440 are typically like right, just a little too small for private equity. 280 00:13:10.440 --> 00:13:18.000 And so, you know, when they're coming in, they have a sour work culture, not because 281 00:13:18.000 --> 00:13:24.600 of bad practices, but because of no practices, they just truly don't have any standards in 282 00:13:24.600 --> 00:13:28.320 place, any systems in place to ensure that they can have a good culture. 283 00:13:28.320 --> 00:13:30.320 So it's like, we're starting from ground zero. 284 00:13:30.320 --> 00:13:34.000 Now I think what's harder is when businesses get bigger and they have systems in place 285 00:13:34.000 --> 00:13:35.880 that promote a bad culture, right? 286 00:13:35.880 --> 00:13:39.240 I think that when they're small, it's just kind of like, you're just accidentally creating 287 00:13:39.240 --> 00:13:41.360 a culture because you have nothing in place. 288 00:13:41.360 --> 00:13:44.640 When you get bigger, you have put things in place and still have a bad culture because 289 00:13:44.640 --> 00:13:45.880 they're the wrong things. 290 00:13:45.880 --> 00:13:46.880 That's harder to turn around. 291 00:13:46.880 --> 00:13:47.920 That's called a turnaround. 292 00:13:47.920 --> 00:13:49.440 We don't, we don't necessarily do that. 293 00:13:49.440 --> 00:13:52.760 I think we've done it with one business and it's, it's honestly a lot harder and it requires 294 00:13:52.760 --> 00:13:57.160 a different kind of skill to put the systems in place to promote a good culture because 295 00:13:57.160 --> 00:14:01.000 they kind of just have like, whatever naturally it turns, right? 296 00:14:01.000 --> 00:14:02.000 Yeah. 297 00:14:02.000 --> 00:14:03.000 That's like a hodgepodge. 298 00:14:03.000 --> 00:14:06.800 You know, that's, that's something that we're good at doing, but it does take time. 299 00:14:06.800 --> 00:14:08.000 It does not happen overnight. 300 00:14:08.000 --> 00:14:11.640 The culture is the piece that takes the longest and honestly, it's like still what I'm trying 301 00:14:11.640 --> 00:14:17.720 to crack because you can change all the people around the founder, but the founder themselves 302 00:14:17.720 --> 00:14:21.440 if they do not change, like, it's just really hard to change that. 303 00:14:21.440 --> 00:14:22.440 Yeah. 304 00:14:22.440 --> 00:14:27.000 I mean, you, you have a big team of like the, the David Green team. 305 00:14:27.000 --> 00:14:32.120 Is there a lot that you have to do to insert like what you see the, the culture being or 306 00:14:32.120 --> 00:14:36.080 is that really something that you put more like on the operator level at your company? 307 00:14:36.080 --> 00:14:39.000 No, I haven't been able to get an operator to do that very well. 308 00:14:39.000 --> 00:14:40.040 That's like why I'm stuck. 309 00:14:40.040 --> 00:14:41.040 Yeah. 310 00:14:41.040 --> 00:14:45.040 That's really where I failed over the last four years over and over and over was taking 311 00:14:45.040 --> 00:14:49.080 myself out, putting a person in, they understand the organizational chart, they understand the 312 00:14:49.080 --> 00:14:51.600 processes, they understand what's happening. 313 00:14:51.600 --> 00:14:56.680 As long as the money, the revenue, the deals flow in, they can keep the whole thing going. 314 00:14:56.680 --> 00:15:01.360 There's a change in the economy, interest rates go up, something changes the flow that 315 00:15:01.360 --> 00:15:08.880 was nice and they, they don't know how to go and like lead the people into a new realm. 316 00:15:08.880 --> 00:15:12.640 And then I will have to step back in, but now it's like, I'm out of shape because I've 317 00:15:12.640 --> 00:15:17.120 been in the gym six months, so it takes me a long time to like, reactimate myself to 318 00:15:17.120 --> 00:15:20.280 what's happening, figure out who are the pieces that are working, who are the pieces 319 00:15:20.280 --> 00:15:23.480 that I've been slacking when no one was looking, you get the whole thing running again 320 00:15:23.480 --> 00:15:26.600 and then that business over there is having the same problem. 321 00:15:26.600 --> 00:15:30.320 And like I've just been bouncing around for the last several years because of exactly 322 00:15:30.320 --> 00:15:31.560 what you guys are describing. 323 00:15:31.560 --> 00:15:34.960 It's that leader, the one they can inspire the culture. 324 00:15:34.960 --> 00:15:37.880 And that's really what makes the business work is what people come to the one brokerage 325 00:15:37.880 --> 00:15:40.880 of the David Green team because they hear me talk on the podcast and they're like, I want 326 00:15:40.880 --> 00:15:41.880 his standards. 327 00:15:41.880 --> 00:15:46.360 I want that guy's work ethic, I want that guy's eyes on my deal. 328 00:15:46.360 --> 00:15:49.080 I want to feel the way he makes me feel when he talks about real estate. 329 00:15:49.080 --> 00:15:52.880 And then when you put a person in your org chart to do a job, but they don't inspire 330 00:15:52.880 --> 00:15:57.600 that same level of confidence in the customer, the conversions become a whole lot harder. 331 00:15:57.600 --> 00:16:02.080 So it's what they're describing is building the culture of leaders that all kind of adhere 332 00:16:02.080 --> 00:16:05.400 to the same standard, the subject matter experts are really the ones holding that line. 333 00:16:05.400 --> 00:16:09.360 It sounds like you're saying that are keeping everyone operating, or is that not the role 334 00:16:09.360 --> 00:16:11.480 that they're playing? 335 00:16:11.480 --> 00:16:15.160 They hold the standard of what good looks like in each function. 336 00:16:15.160 --> 00:16:16.160 Yes. 337 00:16:16.440 --> 00:16:20.520 The portfolio operators, who's like the leader of those subject matter experts is the one 338 00:16:20.520 --> 00:16:24.240 that more so is distilling that cultural piece. 339 00:16:24.240 --> 00:16:28.960 And so I think we're very, I've definitely developed a philosophy around that, which 340 00:16:28.960 --> 00:16:35.800 is, you know, hiring people who are either have our values or are so open-minded that 341 00:16:35.800 --> 00:16:38.520 they can, you know, flux into our values. 342 00:16:38.520 --> 00:16:43.080 That's what's been missing to your question, exactly what you're saying. 343 00:16:43.080 --> 00:16:45.080 You just did it. 344 00:16:45.080 --> 00:16:48.160 I just personal opinion. 345 00:16:48.160 --> 00:16:50.920 There's always, like, I always look at it like either we're going to be really good at 346 00:16:50.920 --> 00:16:55.720 hiring this person, or like what we did at Jim launch was like really good at building 347 00:16:55.720 --> 00:16:59.200 because like if you are used to investing in people, then it's like maybe you just bring 348 00:16:59.200 --> 00:17:03.560 someone into your successor and over a span of two years, they watch you, they're there 349 00:17:03.560 --> 00:17:07.160 with you at everything and you just keep them by your side and then two years in, somebody 350 00:17:07.160 --> 00:17:09.160 with like very little experience could do it. 351 00:17:09.160 --> 00:17:10.160 That is what I've tried. 352 00:17:10.160 --> 00:17:11.800 I just picked the wrong person. 353 00:17:11.800 --> 00:17:15.920 So they got a little taste of what it's like to be David Green's guy and their ego be 354 00:17:15.920 --> 00:17:17.240 insane, right? 355 00:17:17.240 --> 00:17:20.000 Or they got a little taste of all this money and they're like, oh great, I don't have 356 00:17:20.000 --> 00:17:22.080 to work 70 hours a week to make it work anymore. 357 00:17:22.080 --> 00:17:26.360 Now I can cut back to 30 and enjoy my life and they're taking their foot off the accelerator 358 00:17:26.360 --> 00:17:29.520 before you hit like escape velocity would be the way to look at it. 359 00:17:29.520 --> 00:17:32.440 And I can admit that's, I think when we actually do the first interview with you, I, this 360 00:17:32.440 --> 00:17:37.600 is the hardest part for me is to be the guy who is like, I was a police officer before 361 00:17:37.600 --> 00:17:38.600 this. 362 00:17:38.600 --> 00:17:41.360 I'm very familiar with enforcing a standard or a law. 363 00:17:41.360 --> 00:17:44.800 When you step into the podcast basin, you're not, you're like a magnet of like, hey, 364 00:17:44.800 --> 00:17:49.200 you guys can do this and I have not done well bouncing between those two roles. 365 00:17:49.200 --> 00:17:52.480 A lot of the people that will find come to me from the podcast and now I'm like crushing 366 00:17:52.480 --> 00:17:58.080 their soul when I'm like, you have to step it up or if I, if they're not from the podcast, 367 00:17:58.080 --> 00:18:02.000 they don't understand the ethos that people have from the bigger pockets from you guys 368 00:18:02.000 --> 00:18:05.520 are not in like you understand the struggle I'm having here, but I can admit I'm not good 369 00:18:05.520 --> 00:18:06.520 at it. 370 00:18:06.520 --> 00:18:08.520 It's a skill in itself. 371 00:18:08.600 --> 00:18:35.120 So between the both of you, is there a difference between the way you all wake up? 372 00:18:35.640 --> 00:18:41.760 Is one of you really focusing on the internal operation of the company versus the external 373 00:18:41.760 --> 00:18:42.760 side of it? 374 00:18:42.760 --> 00:18:43.760 Yeah. 375 00:18:43.760 --> 00:18:48.000 I mean, everything that Layla talked about earlier in terms of like getting a win for 376 00:18:48.000 --> 00:18:51.600 acquisition.com, getting win for our internal team and getting win for the portfolio 377 00:18:51.600 --> 00:18:55.480 companies is what I would consider kind of like the internal mission of acquisition.com. 378 00:18:55.480 --> 00:18:58.920 The external mission is very much the stuff that we put out there, which is like to make 379 00:18:58.920 --> 00:19:01.080 real business knowledge accessible to everyone. 380 00:19:01.080 --> 00:19:06.600 So if we can make the entire marketplace better, then we are net positive to the marketplace. 381 00:19:06.600 --> 00:19:11.520 We can hopefully teach skills that then allow people to work at companies and quit the jobs 382 00:19:11.520 --> 00:19:16.080 they don't like to take jobs they do like and maybe even take jobs at acquisition.com 383 00:19:16.080 --> 00:19:18.800 or our portfolio companies. 384 00:19:18.800 --> 00:19:21.000 But yes, Layla is absolutely internal facing. 385 00:19:21.000 --> 00:19:27.400 I am external facing our days are almost polar opposites in terms of how we work, what 386 00:19:27.400 --> 00:19:29.920 we work on, how they're structured. 387 00:19:29.920 --> 00:19:32.600 The whole code is not because it's a holding company. 388 00:19:32.600 --> 00:19:37.800 It's not like we have a gazillion people there, probably 20 something, it's not big. 389 00:19:37.800 --> 00:19:42.320 And so it still functions like a small business in that way and that Layla and I will talk about 390 00:19:42.320 --> 00:19:43.320 big strategic decisions. 391 00:19:43.320 --> 00:19:47.080 But for the most part, we try not to change the strategy that much, which you gotta give 392 00:19:47.080 --> 00:19:48.080 time time. 393 00:19:48.080 --> 00:19:49.080 Sure. 394 00:19:49.080 --> 00:19:55.160 Well, in episode 649, we spoke with you about scaling from zero to $100,000, $100,000 to 395 00:19:55.160 --> 00:19:57.160 $3 million and $3 million to $30 million. 396 00:19:57.160 --> 00:20:00.720 And so I want to sort of talk about setting up some of the operational frameworks when you're 397 00:20:00.720 --> 00:20:02.520 in those phases. 398 00:20:02.520 --> 00:20:07.840 I started a company recently called STR Coseg and I feel like the partners and I, we are 399 00:20:07.840 --> 00:20:09.400 all visionaries. 400 00:20:09.400 --> 00:20:13.040 And so we're at this point now where, you know, from a funnel marketing standpoint, we've 401 00:20:13.040 --> 00:20:17.800 got the leads, we've got a very warm set of emails, we've had a lot of good conversions, 402 00:20:17.800 --> 00:20:21.400 we've actually done really, really great for the two months that we've been operating. 403 00:20:21.400 --> 00:20:24.400 But for me, I'm trying to understand, who do I hire next? 404 00:20:24.400 --> 00:20:26.080 What is the ROI of that person? 405 00:20:26.080 --> 00:20:30.280 Because it seems like I need someone that is somewhat of an operator, but I also feel 406 00:20:30.280 --> 00:20:34.400 like I need someone to actually run the marketing and the follow-up to actually convert some 407 00:20:34.400 --> 00:20:36.880 of those leads. 408 00:20:36.880 --> 00:20:42.040 You know, I think we probably have similar ways of looking at this, which is in the beginning, 409 00:20:42.040 --> 00:20:46.120 the first thing is that when you're business is small, is that the reality is you need 410 00:20:46.120 --> 00:20:47.120 everything. 411 00:20:47.120 --> 00:20:48.120 Right? 412 00:20:48.120 --> 00:20:51.000 You don't have a head of marketing, you don't have a head of sales, you don't have a head 413 00:20:51.000 --> 00:20:52.000 of sales. 414 00:20:52.000 --> 00:20:57.480 Yes, it's like, it's all just like open wound, but the question is, like, which artery, 415 00:20:57.480 --> 00:21:01.320 if clogged, prevents the most blood loss, that's the way I look at it, right? 416 00:21:01.320 --> 00:21:06.800 And so it's like, okay, where do we get the highest ROI if we put a person there? 417 00:21:06.800 --> 00:21:11.040 And I think that often what a lot of people want to do is they want to get out of pain 418 00:21:11.040 --> 00:21:12.040 themselves. 419 00:21:12.040 --> 00:21:15.880 And so in the beginning, you do see a lot of people who have a skill in terms of say 420 00:21:15.880 --> 00:21:18.160 it's sales or say it's client acquisition. 421 00:21:18.160 --> 00:21:20.080 And then they think, well, gosh, this is taking up all my time. 422 00:21:20.080 --> 00:21:21.400 I need to hire somebody. 423 00:21:21.400 --> 00:21:26.000 However, the question is, can the business bear you stepping back, bring someone in who's 424 00:21:26.000 --> 00:21:28.800 going to be 30% less effective at first, right? 425 00:21:28.800 --> 00:21:32.200 Say that sales person, you're closing at 80%, they come in and they close at 50%. 426 00:21:32.200 --> 00:21:34.720 It's like, well, can the business actually even support that? 427 00:21:34.720 --> 00:21:36.600 And then the beginning, the answer is usually no. 428 00:21:36.600 --> 00:21:41.200 So the question is, where are we going to get the highest ROI if we bring somebody in, 429 00:21:41.200 --> 00:21:44.600 which is like, what is the biggest constraint right now? 430 00:21:44.600 --> 00:21:48.040 Not saying it feels bad to me, because I think like, often we're so often, we're 431 00:21:48.040 --> 00:21:50.920 often in pain that we're like, I want someone to come in and take the stand by play. 432 00:21:50.920 --> 00:21:53.080 But like, what's the biggest constraint on the business? 433 00:21:53.080 --> 00:21:58.640 And so I would look at it from that perspective in terms of like, what is not happening that 434 00:21:58.640 --> 00:22:04.800 if it were happening, the business would be 10x better or what is happening that needs 435 00:22:04.800 --> 00:22:07.520 to stop happening to make the business 10 times better. 436 00:22:07.520 --> 00:22:08.520 That makes sense. 437 00:22:08.520 --> 00:22:11.960 Yeah, because the company is very profitable for where we are. 438 00:22:11.960 --> 00:22:15.040 We can certainly sustain hiring somebody. 439 00:22:15.040 --> 00:22:18.320 And from a marketing standpoint, I think the stubborn thing for me that I always feel 440 00:22:18.320 --> 00:22:22.280 like is, I'm good at marketing my stuff, and it's very hard for me to relinquish that 441 00:22:22.280 --> 00:22:23.280 control. 442 00:22:23.280 --> 00:22:27.160 So it almost feels like, perhaps I can't walk away from that business quite yet, but maybe 443 00:22:27.160 --> 00:22:33.880 if I put more of a project manager, someone that's kind of pushing the daily agenda in line, 444 00:22:33.880 --> 00:22:35.880 that would sort of complement my skill set a little bit. 445 00:22:35.880 --> 00:22:38.080 Can I throw this out there? 446 00:22:38.080 --> 00:22:42.320 Is there a reason that you want to step away from the marketing? 447 00:22:42.320 --> 00:22:47.320 Not particularly, just time, and I have other businesses that I'm also, I'm marketing a 448 00:22:47.320 --> 00:22:48.320 lot, right? 449 00:22:48.320 --> 00:22:51.600 You know, I have four or five different companies that I market, so that's the tough part 450 00:22:51.600 --> 00:22:52.600 for me. 451 00:22:52.600 --> 00:22:55.720 Because you probably don't think you're not going to stop marketing, right? 452 00:22:55.720 --> 00:23:00.400 So it's like, I feel like a lot of times, just as business owners, entrepreneurs in general, 453 00:23:00.400 --> 00:23:03.320 we do a lot of things based on, like, sheds that someone else has told us at some point 454 00:23:03.320 --> 00:23:04.320 in our career. 455 00:23:04.320 --> 00:23:06.480 There's like, could have been a whisper, could have been at lunch at five years ago, 456 00:23:06.480 --> 00:23:09.880 and you're just like, oh, this is fact, and you operate the rest of the time until someone's 457 00:23:09.880 --> 00:23:11.480 like, hey, I don't know if that's true. 458 00:23:11.960 --> 00:23:16.120 But like, you look at Dave Ramsey, they're going 300 million a year. 459 00:23:16.120 --> 00:23:18.160 He still does his podcast every day. 460 00:23:18.160 --> 00:23:22.560 And so I think it's just like, unless the goal is to exit the company, if you enjoy 461 00:23:22.560 --> 00:23:25.840 doing the thing, then it's like, okay, well, then how can we get the most of you doing 462 00:23:25.840 --> 00:23:26.840 the thing? 463 00:23:26.840 --> 00:23:29.800 Because that is the highest leverage time for you, and then it's like, how do we clear 464 00:23:29.800 --> 00:23:33.000 everything else off of your calendar, so that you can do the most of that? 465 00:23:33.000 --> 00:23:36.680 And it was just like, if we're looking at, okay, we're a big leverage point, you know, 466 00:23:36.680 --> 00:23:40.200 in the business, and it's just kind of funny, because a lot of times, we're like, man, 467 00:23:40.360 --> 00:23:41.320 I got to get out of sales. 468 00:23:41.320 --> 00:23:44.040 And you're like, well, you're an amazing sales manager. 469 00:23:44.040 --> 00:23:47.760 And right now, you're doing, I don't know, 600,000 a month. 470 00:23:48.520 --> 00:23:50.640 Maybe that's not, that might not be the time right now. 471 00:23:50.640 --> 00:23:54.040 Like, we might need to think about what are the other things on your time and take 472 00:23:54.040 --> 00:23:55.640 everything else off and then keep that. 473 00:23:55.640 --> 00:23:59.400 And then we'll have even more resources, because we'll be twice as big to then go get 474 00:23:59.400 --> 00:24:03.400 a killer who we can hire, who has an amazing track record out of company, that's 475 00:24:03.400 --> 00:24:07.520 twice as big, you know, who knows this type of sale, et cetera, et cetera. 476 00:24:08.160 --> 00:24:08.800 That makes sense for me. 477 00:24:08.800 --> 00:24:13.360 I mean, I feel like, because, yeah, I just, I would like to just show up in market. 478 00:24:13.360 --> 00:24:16.880 And so because I'm doing a little bit of the operational side back and forth, 479 00:24:16.880 --> 00:24:19.360 I feel like I can't really ever do the marketing side good. 480 00:24:19.360 --> 00:24:20.960 I can't do the operational side good. 481 00:24:20.960 --> 00:24:23.680 And so, yeah, it's just always very painful to hire. 482 00:24:23.680 --> 00:24:25.760 Is it always painful to hire? 483 00:24:25.760 --> 00:24:30.480 Well, one thing I would say is also, I just, I think that at different levels in the business, 484 00:24:30.480 --> 00:24:33.600 I think like a project manager is like, that's everyone's go to when they're not really sure what 485 00:24:34.240 --> 00:24:38.160 so that's actually one that I think like vague roles like a project manager is actually where 486 00:24:38.160 --> 00:24:42.560 I see like, usually what it means is that we're missing a role over here, a role over here, 487 00:24:42.560 --> 00:24:45.520 and then somebody right here is weak, and we fill it in with like a project manager. 488 00:24:45.520 --> 00:24:47.760 The drunk drawer, yeah, the drunk drawer. 489 00:24:48.720 --> 00:24:51.120 So I would just be, be, be weary. 490 00:24:52.480 --> 00:24:54.080 In terms of hiring is a skill in itself. 491 00:24:54.080 --> 00:24:56.480 So it's just like, like, dude, I'm awful at real estate. 492 00:24:56.480 --> 00:24:56.960 Sorry. 493 00:24:57.760 --> 00:24:58.640 Like for now. 494 00:24:58.640 --> 00:25:00.400 Yeah, for now is, 495 00:25:01.040 --> 00:25:03.200 yeah, terrible, awful. 496 00:25:03.200 --> 00:25:06.640 Like as good as business, that's how bad I am at real estate, the opposite. 497 00:25:08.400 --> 00:25:10.640 But it's because I've never, I've never applied my skill set. 498 00:25:10.640 --> 00:25:12.320 It's not like I think I'm dumb and can't learn it. 499 00:25:12.320 --> 00:25:14.000 It's that I've never taken the time. 500 00:25:14.000 --> 00:25:19.040 And I think that, you know, I was forced to learn how to hire well because in gym launch, 501 00:25:19.040 --> 00:25:20.480 we grew so quickly. 502 00:25:20.480 --> 00:25:22.320 And I had to hire so many people so quickly. 503 00:25:22.320 --> 00:25:26.880 I learned all these lessons that I think take, honestly, a lot of people decades to learn. 504 00:25:26.880 --> 00:25:27.360 Yeah. 505 00:25:27.360 --> 00:25:29.680 Yeah. You know, I've hired thousands of people at this point. 506 00:25:29.680 --> 00:25:32.000 And that's just not something most people of my age have done. 507 00:25:32.000 --> 00:25:34.640 And I think that it was in a compressed period of time, 508 00:25:34.640 --> 00:25:37.600 which then I think even cemented the learning even more. 509 00:25:37.600 --> 00:25:39.040 And so it is a skill. 510 00:25:39.040 --> 00:25:41.360 I, you know, I think that if somebody's not good at hiring, 511 00:25:41.360 --> 00:25:45.840 sometimes it is best that you defer to a recruiting firm and watch what they do, 512 00:25:45.840 --> 00:25:46.880 learn from them. 513 00:25:46.880 --> 00:25:50.080 Because I think a lot of times we, we, we think we know what good looks like. 514 00:25:50.080 --> 00:25:52.320 And we think that hiring is just like a thing you do to get people. 515 00:25:52.320 --> 00:25:55.520 But it is a complete, we have, there are complete hiring departments. 516 00:25:55.600 --> 00:25:57.760 There are multiple different roles that help people hire. 517 00:25:57.760 --> 00:25:59.440 I mean, it's an entire process of its own. 518 00:25:59.440 --> 00:26:03.280 So just like there is client acquisition, there is talent acquisition. 519 00:26:03.280 --> 00:26:06.480 And I think that Alex is very good at client acquisition. 520 00:26:07.360 --> 00:26:09.200 And I am very good at talent acquisition. 521 00:26:09.200 --> 00:26:12.400 And they're, honestly, it's just flipping client acquisition. 522 00:26:12.400 --> 00:26:14.480 All the things you do for that, you do do a choir talent. 523 00:26:15.120 --> 00:26:20.640 It's just that most businesses, in fact, 80% of businesses do not match their external 524 00:26:21.600 --> 00:26:23.200 strategy with an internal strategy. 525 00:26:23.200 --> 00:26:25.840 And so that's why talent acquisition doesn't exist in most businesses. 526 00:26:25.840 --> 00:26:27.760 And in most people say, well, my business is too small for that. 527 00:26:27.760 --> 00:26:31.760 I'm like, well, how do you think your business gets big like by having that? 528 00:26:31.760 --> 00:26:38.800 And so I think that if it's treated as a skill of its own and one that is imperative 529 00:26:38.800 --> 00:26:44.240 to the growth of the business, then I think people would see, and I guess that's what I strive 530 00:26:44.240 --> 00:26:46.160 to do is like to show people the importance of it. 531 00:26:46.880 --> 00:26:50.480 There's a lot of stats to back the importance of the people that we bring on, 532 00:26:50.560 --> 00:26:52.960 how we bring them on, the culture that we have as a team. 533 00:26:54.480 --> 00:26:57.840 But it's still, I think it's starting to become more relevant. 534 00:26:57.840 --> 00:27:01.200 When I even when I started making content, I think two and a half years ago, 535 00:27:01.200 --> 00:27:04.320 I felt like I was like speaking something that nobody talked about. 536 00:27:04.320 --> 00:27:04.880 You know what I mean? 537 00:27:04.880 --> 00:27:09.280 Yeah, it's discussed as it's almost like, oh yeah, you have to build a higher people. 538 00:27:09.280 --> 00:27:10.240 It's an afterthought. 539 00:27:10.240 --> 00:27:10.800 Yes. 540 00:27:10.800 --> 00:27:16.720 Something super interesting is that for every strategy, for every three strategies that a company 541 00:27:16.720 --> 00:27:20.560 commits to saying like, this is our strategy that we're going to do for this year one. 542 00:27:20.560 --> 00:27:21.120 Here's your two. 543 00:27:21.120 --> 00:27:21.680 Here's your three. 544 00:27:22.720 --> 00:27:28.400 Two thirds of strategies fail, not because the strategy is wrong, but due to execution. 545 00:27:28.400 --> 00:27:32.240 And when they say, well, what makes the difference in companies that are able to actually execute 546 00:27:32.240 --> 00:27:37.440 these? Because that means that only 33% of strategies that we say we're going to do actually happen. 547 00:27:38.000 --> 00:27:42.080 Well, there are some companies that are able to execute 78% of strategies. 548 00:27:42.080 --> 00:27:47.280 What makes up the delta is what people, and I guess McKinsey defines this as the soft stuff, 549 00:27:47.280 --> 00:27:49.760 which is talent acquisition, culture, and people. 550 00:27:50.240 --> 00:27:53.760 And so it's like, you know, I feel like I'm like, I'm saying all stuff to people like O'Layla 551 00:27:53.760 --> 00:27:54.320 is about the fluff. 552 00:27:54.320 --> 00:27:55.920 I'm like, oh my gosh, this is not the fluff. 553 00:27:55.920 --> 00:27:57.360 This will make you so much more money. 554 00:27:57.360 --> 00:27:58.800 You will grow your business so much bigger. 555 00:27:59.600 --> 00:27:59.920 Yeah. 556 00:27:59.920 --> 00:28:03.200 There's people that analyze the economy, what the government's doing, 557 00:28:03.200 --> 00:28:05.520 and they figure out what the overall environment looks like. 558 00:28:05.520 --> 00:28:09.600 There's people that analyze an individual real estate investment and look at what's the income 559 00:28:09.600 --> 00:28:12.400 stream? What are the expenses? There's people that analyze businesses. 560 00:28:13.120 --> 00:28:15.120 There's people that analyze stock opportunities. 561 00:28:15.120 --> 00:28:17.360 There's also some form of risk allocation. 562 00:28:17.360 --> 00:28:19.120 Like, how do we know where this is going to work? 563 00:28:20.080 --> 00:28:24.800 We've talked to so many people today, and the biggest hurdle in all of their growth was hiring. 564 00:28:25.520 --> 00:28:29.520 And yet, you don't put that same effort into the analysis of humans, 565 00:28:29.520 --> 00:28:34.320 which are the one thing you can't scale without once you get to that limit where I kind of am. 566 00:28:34.320 --> 00:28:35.840 If you were to think about it, like, 567 00:28:36.720 --> 00:28:39.440 you're really good at marketing, and you probably have sales teams. 568 00:28:39.440 --> 00:28:42.480 You've probably taken a lot of sales calls in your life, and you take 1,000 sales calls, 569 00:28:42.480 --> 00:28:43.920 or 2,000 sales calls. 570 00:28:43.920 --> 00:28:45.920 And then you think about that from the context of hiring. 571 00:28:45.920 --> 00:28:48.960 It's like a lot of entrepreneurs have had like 30 interviews 572 00:28:49.840 --> 00:28:51.760 that they've actually tried to make a judgment. 573 00:28:51.760 --> 00:28:52.880 But like, man, I suck at this. 574 00:28:52.880 --> 00:28:53.760 It's like, well, it's reasonable. 575 00:28:53.760 --> 00:28:55.040 You suck at it. You've only done it 30 times. 576 00:28:55.040 --> 00:28:55.280 See? 577 00:28:55.280 --> 00:28:56.240 Yeah. 578 00:28:56.240 --> 00:28:57.040 You know what I mean? 579 00:28:57.040 --> 00:28:59.200 I tell people all the time, they're like, you know, 580 00:28:59.200 --> 00:29:00.880 I don't think I need a sales manager. 581 00:29:00.880 --> 00:29:02.400 And I'm like, do me a favor. 582 00:29:02.400 --> 00:29:03.920 I just want you to interview 10. 583 00:29:04.720 --> 00:29:06.160 And then tell me if you need one. 584 00:29:06.160 --> 00:29:08.320 Because they don't even know what a sales manager 585 00:29:08.320 --> 00:29:09.280 or their business should be doing. 586 00:29:09.920 --> 00:29:12.320 Yeah, one of the other issues in the beginning is, 587 00:29:12.320 --> 00:29:14.240 it's just ignorance, not stupidity. 588 00:29:14.240 --> 00:29:16.560 It's just that a lot of entrepreneurs really on 589 00:29:16.560 --> 00:29:18.000 don't know what good looks like. 590 00:29:18.560 --> 00:29:20.000 And so, like, kind of like with the operator, 591 00:29:20.000 --> 00:29:23.040 it's like, I just don't, like, you probably know what a good salesperson looks like. 592 00:29:23.040 --> 00:29:25.040 Like, like, you've probably hired enough of them. 593 00:29:25.040 --> 00:29:27.680 It's, I mean, just from what it sounds like in your business, 594 00:29:27.680 --> 00:29:30.160 it's like, well, how many good operators have you ever hired? 595 00:29:31.040 --> 00:29:33.280 And so it's just, it's kind of like a good point. 596 00:29:33.360 --> 00:29:36.080 Right. So there's no, there's no ideal scene to like look at. 597 00:29:36.080 --> 00:29:37.760 You're like, I'm going to roll the dice again. 598 00:29:37.760 --> 00:29:38.560 Right. Like that. 599 00:29:38.560 --> 00:29:41.280 I remember when I was trying to hire agents that could close my clients. 600 00:29:41.280 --> 00:29:42.720 I would just try it. I failed. 601 00:29:42.720 --> 00:29:43.520 I tried. I failed. 602 00:29:43.520 --> 00:29:44.640 They couldn't close it. 603 00:29:44.640 --> 00:29:46.160 I hired one, Johnny. 604 00:29:46.160 --> 00:29:46.800 And he could do it. 605 00:29:46.800 --> 00:29:48.480 And I was like, that's what I was going to look for. 606 00:29:48.480 --> 00:29:49.920 And then they all came after, right? 607 00:29:49.920 --> 00:29:52.000 Like, there's something about mentorship. 608 00:29:52.000 --> 00:29:54.560 Maybe where you're following someone else and you see what they're doing. 609 00:29:54.560 --> 00:29:56.240 That you get this pattern in your mind of what, 610 00:29:56.240 --> 00:29:57.680 that's a great point that you just made. 611 00:29:57.680 --> 00:29:58.720 And I haven't hired. 612 00:29:58.720 --> 00:30:00.160 I call it a leader, but it's an operator. 613 00:30:00.160 --> 00:30:01.840 Like what you're saying, the person that can run. 614 00:30:02.800 --> 00:30:07.040 And we've placed operators in what two thirds of the portfolio. 615 00:30:07.040 --> 00:30:08.800 More almost all of them. 616 00:30:08.800 --> 00:30:09.120 Yeah. 617 00:30:09.120 --> 00:30:09.440 For like, 618 00:30:11.440 --> 00:30:13.040 so you have a pattern in your mind of what that looks like. 619 00:30:13.040 --> 00:30:14.160 You can lay all of them. 620 00:30:14.160 --> 00:30:14.640 Yeah. 621 00:30:14.640 --> 00:30:17.040 So yeah, I get basically, I guess it is all of them. 622 00:30:17.040 --> 00:30:19.360 We've taken an operator and put them in. 623 00:30:19.360 --> 00:30:20.960 Because usually the entrepreneur is the one who starts, 624 00:30:20.960 --> 00:30:23.280 who gets the fire going and gets to a certain point. 625 00:30:23.280 --> 00:30:26.000 And they don't, they don't like a lot of these things. 626 00:30:26.000 --> 00:30:27.760 And what I'd say probably one of the bigger mistakes. 627 00:30:27.760 --> 00:30:31.760 And this is one that we have made earlier on was hiring, 628 00:30:31.760 --> 00:30:34.640 hiring the project manager and calling them COO 629 00:30:34.640 --> 00:30:36.880 or calling them director of operations, right? 630 00:30:36.880 --> 00:30:38.880 And what it really is is somebody who, 631 00:30:38.880 --> 00:30:40.200 you're like, oh, they're really deterrented. 632 00:30:40.200 --> 00:30:42.680 They love Asana and they love like checking boxes. 633 00:30:42.680 --> 00:30:45.600 And it's like, that's actually not what an operator looks like. 634 00:30:45.600 --> 00:30:47.480 Well, I think that's why I said project manager. 635 00:30:47.480 --> 00:30:49.640 Because it feels like going straight to operator 636 00:30:49.640 --> 00:30:53.880 or COO is too big of a role for where we're at. 637 00:30:53.880 --> 00:30:56.840 I'm probably not, but you know, funny story. 638 00:30:56.840 --> 00:30:58.800 My COO that I was telling you about. 639 00:30:58.800 --> 00:31:01.280 We're thinking about hiring as a wife as a project manager. 640 00:31:01.280 --> 00:31:02.960 So if you listen to this, it's going to be hard again. 641 00:31:02.960 --> 00:31:06.840 But different, a different way of describing it maybe 642 00:31:06.840 --> 00:31:09.040 would just be, and this is, I guess I'm, 643 00:31:09.040 --> 00:31:11.680 I'm describing this as me watching what Leila has done 644 00:31:11.680 --> 00:31:12.760 and all the, all the companies. 645 00:31:12.760 --> 00:31:14.760 Because like, I'm pretty good at acquisition. 646 00:31:14.760 --> 00:31:17.160 And that's kind of been my hat for a long time. 647 00:31:17.160 --> 00:31:19.960 But when I met Leila, I think I was doing two 648 00:31:19.960 --> 00:31:22.240 ish million bucks a year in total revenue, 649 00:31:22.240 --> 00:31:24.160 not making really any profit. 650 00:31:24.160 --> 00:31:26.720 But when she came in my life, she had a totally different 651 00:31:26.720 --> 00:31:29.440 perspective on how to just treat people 652 00:31:29.440 --> 00:31:31.080 and how to actually run a business. 653 00:31:31.080 --> 00:31:33.760 And it was not all the detail stuff in the Excel sheets 654 00:31:33.760 --> 00:31:35.800 and things like that that I thought it was going to be. 655 00:31:35.800 --> 00:31:36.800 It was just leadership. 656 00:31:36.800 --> 00:31:37.600 It was like your catalyst. 657 00:31:37.600 --> 00:31:38.480 It was leadership. 658 00:31:38.480 --> 00:31:39.560 And that was the thing is just like, 659 00:31:39.560 --> 00:31:42.160 when we're looking at operators, we're like, 660 00:31:42.160 --> 00:31:43.320 is this a leader? 661 00:31:43.320 --> 00:31:45.400 Like, does this person inspire me? 662 00:31:45.400 --> 00:31:46.720 Do I, do I admire them? 663 00:31:46.720 --> 00:31:48.920 Well, other people in the team admire them. 664 00:31:48.920 --> 00:31:51.120 Well, like, will they be, you talk about setting standards? 665 00:31:51.120 --> 00:31:52.960 It's like, well, if everyone in the team 666 00:31:52.960 --> 00:31:54.760 doesn't admire the character of this person, 667 00:31:54.760 --> 00:31:55.760 then I can emulate it. 668 00:31:55.760 --> 00:31:56.560 Exactly. 669 00:31:56.560 --> 00:31:59.280 And so that's where you get like more and more nuance on, 670 00:31:59.400 --> 00:32:01.240 oh, we can, we can pick this. 671 00:32:01.240 --> 00:32:04.120 And it's been really cool because our director of people, 672 00:32:04.120 --> 00:32:06.280 like, it's funny. 673 00:32:06.280 --> 00:32:07.880 We probably have all these marketing stats 674 00:32:07.880 --> 00:32:08.720 and acquisition stats. 675 00:32:08.720 --> 00:32:09.840 You're like, you know, you're CPL, 676 00:32:09.840 --> 00:32:11.200 you're CPL, you're CPL, like all these different stats, 677 00:32:11.200 --> 00:32:14.240 but the same level of rigor can be applied to talent. 678 00:32:14.240 --> 00:32:16.400 So it's like, if I said, hey, what's your time to fill? 679 00:32:16.400 --> 00:32:19.320 A lot of people are like, what's your average time to fill? 680 00:32:19.320 --> 00:32:20.280 They're like, I have no idea. 681 00:32:20.280 --> 00:32:21.520 It's like, okay, what's your employee's turn? 682 00:32:21.520 --> 00:32:23.720 They're like, I have no idea. 683 00:32:23.720 --> 00:32:25.000 What's the two-sided fit? 684 00:32:25.000 --> 00:32:26.840 And they're like, what is that, right? 685 00:32:26.840 --> 00:32:28.360 Like, two-sided fit is 90 days later. 686 00:32:28.360 --> 00:32:30.680 The manager and the employee rate themselves 687 00:32:30.680 --> 00:32:33.720 on a scale from one to 10 and say how much of, 688 00:32:33.720 --> 00:32:35.920 how much of a perfect fit is this, right? 689 00:32:35.920 --> 00:32:38.120 And if one person says zero and one person says 10, 690 00:32:38.120 --> 00:32:39.680 then you're a zero, right? 691 00:32:39.680 --> 00:32:42.760 And if both people say zero, then it's a negative 10. 692 00:32:42.760 --> 00:32:44.720 And if both people say 10, then it's a 10. 693 00:32:44.720 --> 00:32:47.320 And so like right now, our two-sided fit is 8.7. 694 00:32:47.320 --> 00:32:50.680 So that means that on average, both people are saying 8.7 695 00:32:52.080 --> 00:32:54.200 on both sides of that equation 90 days later. 696 00:32:54.200 --> 00:32:56.280 Not just like, you probably hired something to be like, 697 00:32:56.280 --> 00:32:58.200 it's the first week, they're killing it, they're awesome. 698 00:32:58.200 --> 00:33:00.440 And then you know, I have this conversation over and over again, 699 00:33:00.440 --> 00:33:01.920 I'm like, hey, how's that marketing person? 700 00:33:01.920 --> 00:33:03.960 They're like, oh, they saw a kind of lawyer. 701 00:33:03.960 --> 00:33:05.800 It's like, I thought like two weeks ago you said, right? 702 00:33:05.800 --> 00:33:07.280 It's just like, you gotta give it time to breathe. 703 00:33:07.280 --> 00:33:08.280 Yes. 704 00:33:08.280 --> 00:33:11.320 But having the archetype and then understanding the process 705 00:33:11.320 --> 00:33:12.880 and truly looking at it as acquisition, 706 00:33:12.880 --> 00:33:14.640 like talent acquisition, where it's like, 707 00:33:14.640 --> 00:33:15.600 I'm gonna draw a parallel. 708 00:33:15.600 --> 00:33:17.880 So you've got lead gen on the customer side 709 00:33:17.880 --> 00:33:19.600 and then you've got application generation. 710 00:33:19.600 --> 00:33:21.960 And then you've got lead nurture on the customer side 711 00:33:21.960 --> 00:33:23.800 and then you've got application nurture, right? 712 00:33:23.800 --> 00:33:25.240 And then you've got sales on the customer side 713 00:33:25.240 --> 00:33:26.920 and then you've got interviewing, right? 714 00:33:26.920 --> 00:33:28.640 And then you've got whatever the offer is 715 00:33:28.640 --> 00:33:30.400 and you also have the offer that you're gonna give them. 716 00:33:30.400 --> 00:33:33.080 And then on the, then you have onboarding for a customer, 717 00:33:33.080 --> 00:33:34.640 you have onboarding for employees. 718 00:33:34.640 --> 00:33:36.600 And then you have retention and ascension for customers 719 00:33:36.600 --> 00:33:38.880 and you have retention and ascension for employees. 720 00:33:38.880 --> 00:33:40.560 And so the entire customer lifecycle 721 00:33:40.560 --> 00:33:41.680 is actually mirror images. 722 00:33:41.680 --> 00:33:42.880 We use different words for it. 723 00:33:42.880 --> 00:33:43.720 Yes. 724 00:33:43.720 --> 00:33:45.440 But if we don't have patterns the same, 725 00:33:45.440 --> 00:33:46.280 because it's people. 726 00:33:46.280 --> 00:33:47.280 Yeah. 727 00:33:47.280 --> 00:33:48.120 Right. 728 00:33:48.120 --> 00:33:50.360 But you got me thinking very few people learn sales 729 00:33:50.360 --> 00:33:52.440 because they start off as a W2 worker, 730 00:33:52.440 --> 00:33:54.560 someone brings a house cat, it's tuna. 731 00:33:54.560 --> 00:33:55.560 It doesn't learn how to hunt. 732 00:33:55.560 --> 00:33:56.400 Right. 733 00:33:56.400 --> 00:33:57.400 A handful of people can figure out how to hunt 734 00:33:57.400 --> 00:33:58.720 if they're hungry enough, right? 735 00:33:58.720 --> 00:34:00.000 But then of the sales people, 736 00:34:00.000 --> 00:34:01.680 how many of them actually make it to the tier? 737 00:34:01.680 --> 00:34:03.320 Like you're saying of being able to fill 738 00:34:03.320 --> 00:34:04.720 who could actually replace me? 739 00:34:04.720 --> 00:34:05.800 Like that's kind of, 740 00:34:05.800 --> 00:34:07.440 that's usually where I try to take off 741 00:34:07.440 --> 00:34:08.640 and then I fail and I come back down 742 00:34:08.640 --> 00:34:10.120 and I'm into bouncing up and down. 743 00:34:10.120 --> 00:34:11.720 It's just rare to have a human 744 00:34:11.720 --> 00:34:12.960 that can get that skill set 745 00:34:12.960 --> 00:34:14.760 because they don't stick with it like you guys did. 746 00:34:14.760 --> 00:34:16.840 So if you could just clone yourself 747 00:34:16.840 --> 00:34:18.120 and make a whole bunch more laylis 748 00:34:18.120 --> 00:34:19.280 like the business world would be. 749 00:34:19.280 --> 00:34:20.120 That'd be nice. 750 00:34:20.120 --> 00:34:20.960 Yes. 751 00:34:20.960 --> 00:34:22.480 And a whole lot of guys call finder layla 752 00:34:22.480 --> 00:34:23.480 to entrepreneurs. 753 00:34:23.480 --> 00:34:24.320 Yes. 754 00:34:24.320 --> 00:34:25.160 That's it.