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57% of revenue went to wages after the owner was paid.
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The number one offender on a P&L across almost every single company is labor.
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And if you drive down labor, that's the biggest lever that you can pull on to move the needle in the business.
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I would far prefer you spend every extra dollar you have just dialing in the operations.
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You can find agencies that can...
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get you moving in the right direction.
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It is a great product.
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Like when we swapped, everyone likes it.
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It solves about 81% of all incoming tickets.
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They are happy.
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Like they say, yes, that was a good experience.
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As an entrepreneur, if you want to play this game, you have to accept that all kinds of stuff is going to get thrown at you and you're going to have to bob and weave and pivot.
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It's getting compressed and you've got to be willing to bob, weave, change, learn faster than you've ever done it.
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They'll be the ones that in 10 years, like they're the biggest companies.
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Yeah.
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It's all opportunity.
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I think people in home services have almost nothing to worry about right now.
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Well, the all in podcast, when we listen, they have, you know, I had to channel my Jason Calacanis because he has names for everyone.
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You know, you have the Sultan of Science.
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You have, what is it?
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The Rain Man, David Sachs.
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Freeberg is the Sultan of Science.
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So I had to figure out what was JP's name going to be.
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The best I came up with was the Sultan of Service.
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Of Service, okay.
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That's my world.
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So we're going to have to come up with names.
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I think for everyone listening, you're going to have to help us out down below.
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I asked ChattoBT.
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We got the Turf Titan.
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We got the Baron of Bugs, but I didn't know if Bugs.
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No, I don't think that's it.
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The King of Chemicals.
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No, I'll pass on that one.
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The Cashflow Cowboy.
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So, you know, we have the Sass Sodfather.
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You know, kind of mixing software and lawn care.
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But it's still workshopping it.
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All right.
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That's cool.
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I like the first one the best so far.
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I was listening to last week's episode while I was working out this morning.
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Of you and I?
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Of you and I.
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It launched this morning.
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So I went ahead and listened to it while I was working out.
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And it was funny because I was like, you know, I need an icebreaker.
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I need to like jab him with something.
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Get him off of his guard a little bit, you know.
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too many safe questions.
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And then it came to the part where you're talking about loom and you slide, you slide this one little part in there about how you use loom.
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When you commissioned an artist to do a painting for you, I had a commission, a painting commissioned one time.
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I, well, I've done that many times, but a painting commission, I literally to the artist, like, Hey, I don't like this.
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I don't like this.
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Can you change?
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I do it with loom.
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Like,
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And so my first thought, I'll be honest, was like, you know, we all need to be instructed how we commission an artist.
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That's where my head went.
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Right.
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Okay.
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So I started going down this rabbit hole while I'm working out.
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And lo and behold, I look on the latest subscribers to the Mike Andes channel and I see John Potoshnik.
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My dad.
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Yeah.
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Never had seen that in my life before.
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And so I ended up watching, well, listening to a four years old, four years ago, your dad, Riley's grandfather, interviewing him four years ago about web design and art, etc.
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And then I went down the rabbit hole.
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I had to watch some of your dad's videos.
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It was fantastic.
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And I have to ask the commissioning of the artist because his whole channel is about painting.
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Yeah.
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Is that actually your dad or no, give us the world of what it looks like to commission an artist.
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Okay.
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You know, that was a crazy example to use.
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And I just say what pops into my head sometimes.
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And I guess that popped into my head.
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So my whole life, I grew up in the art world and my dad's been an artist.
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My mom stayed home and my dad's been an artist.
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He made his living painting paintings.
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Mm-hmm.
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putting them in galleries and selling them.
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So while he wasn't a business owner like you and I are, he was a business owner in a sense.
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He was an artist.
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And I've always thought that was maybe one of the most influential, important things in my life.
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I didn't see him go to an office.
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We had a studio, but I saw him do his own thing.
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So I never thought I had to get a job.
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So I grew up in this art world.
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And so I appreciate art.
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Like when I was little, my dad would say, he'd bring a painting into the house from the studio.
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I was like, what do you see first?
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Like he'd ask me all these questions.
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And that stuff has bled through to how I think about marketing and such.
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And so I was like,
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As I've gotten older and ended up with money, I like art.
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If you were at my house the other day, but you didn't come in, next time you'll have to come in.
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My house is full of art.
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I have tons of art.
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I'm sure our friends are not quite into art like me.
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Like, why do you have these kind of paintings?
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I just grew up in that world.
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And so I have art everywhere.
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So...
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We have two really great couple friends.
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This particular painting that came to mind, we have two really great couple friends that we've known since our boys were essentially born.
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And we've traveled in different countries together.
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We do stuff together all the time.
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And we have a picture from New York of us all at a dinner toasting with like wine glasses.
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Yeah.
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And so we were in Telluride one time, Tiffany and I and the boys, and there's this restaurant, All Reds in Telluride.
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And when you walk in, there's an artist with a painting of glasses posting.
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I basically, you know, the way you commission a painting is you track down an artist and say, hey, I want to commission you to paint me a painting.
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Most of them will do it.
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This is what I have in mind.
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And so that was the idea.
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I told him what I had in mind.
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I sent him some pictures of this moment we all had in New York.
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And then I used Loom to go back and forth because I grew up in the art world.
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Like he might paint something and I don't like the hand.
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Stuff you would never notice normally, but I notice it.
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And so that's why I had to go back and forth.
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But my dad's recently did a painting of Sylvania, a really neat place that Tiffany and I like.
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I've got a big commission of, I've got four commission paintings.
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Wow.
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I think.
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Yeah.
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Cause this account had 5,000 subscribers.
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I'm like, you know, maybe Jonathan has the, the, the five for 50.
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And then this other account that he uses to sleuth around on YouTube, but sure enough, it was your dad.
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And it was, it was, uh, quite enjoyable.
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I sent one of the videos to Brianna.
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I was like, you got to check this out.
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This is like, this is awesome.
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Yeah, my dad got into the whole doing, he's got several books.
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He's got art books.
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He's got DVDs that teach people.
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A lot of people call him the artist's artist.
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He teaches a lot of people to paint at a high level.
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And so he's made a really incredible career out of what he's done.
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He's very successful.
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And so-
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My brother and I kind of got him into this idea of doing YouTube stuff.
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And I just wish he could have done it, you know, 30 years.
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Well, not YouTube, but you know, started this way back when, because I think he would have done phenomenal.
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Like if he had been doing this kind of stuff back in the early days of YouTube.
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It felt like he enjoyed it.
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Like that's why he does.
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Yeah.
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He just like, he enjoyed the process of educating.
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And that's the part that I kind of felt like was the through line to you when it came to business, which is like the enjoyment of not just creating, but then sharing and educating.
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I'm sure I got it from dad.
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Like growing up, he was, he would teach Bible studies and at church, he was teaching classes and then he would teach people will fly him in to teach art, uh,
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They'll bring in lots of people and he'll teach art from the front of a room and teach people how to paint like other artists.
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And so he's always done that in addition to being an artist as his real career.
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So I'm sure that largely impacted who I became.
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That's very cool.
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Well, I want to start the podcast off with that, but I thought what would be fun each week when we come together is kind of starting off, instead of just jumping right into the docket, is talk about something we're currently working on, whether it be something this week we're working on or that we have learned, like very, as narrow as possible.
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And even if it's something that we're not currently, we have not fixed or solved yet.
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So I'll start it off if you want to, if you don't mind right after.
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Yeah, please.
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But mine's somewhat embarrassing.
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So a few months ago, we switched the chat support for HomeWorks to Intercom.
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And so Intercom is very smart.
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They have changed the way they do billing to per resolution instead of per seat basis, like some sort of subscription, as they've seen AI go the way it has.
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And so basically, they're incentivized to ensure that they solve as many chats as possible for you.
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Well, the problem is I kept having members being like, hey, I've been reporting this bug for months.
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And I'd go in the back and I'm like, I don't see this anywhere.
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Like, no, there's no report.
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There's I don't see them reporting this anywhere.
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Why?
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Like, I don't call you a liar, but I don't see it.
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And sure enough, this week I go in there like, you know, I'm going to try submitting a bug.
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And the AI was basically caught in this loop of telling me to report the bug in the chat, but never actually taking it, creating a report for the human to see.
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Oh, it was so annoying.
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I was so frustrated.
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So we fixed it.
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But for probably the past three months, there have been times people thought they reported something.
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The AI is like, oh, yeah, definitely, this is how you report a bug.
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Right here.
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Copy that.
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Right here.
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And you would do it.
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And like, thank you.
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Did you submit a ticket?
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And it was not going through to the humans.
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All that being said, I think the takeaway was you have to keep testing
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the core loops of the product just to make sure as a sanity check, that's actually working like your estimate forms on your website.
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Are they still actually calling your office?
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It's funny.
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Cause I was like, immediately he acted like, I will call the office occasionally just to see how things are going.
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I'm like, okay, this is the exact same thing.
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I cannot trust this AI to do its thing without, uh,
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Anyways, that was my learning of the week.
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So interesting.
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I got to ask you a couple of questions.
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So intercom.
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So I had originally been considering intercom or podium for CityTurf.
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And then when Riley started working on every chat, because I'm so close to it, I knew where it was going.
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I was like...
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man, I'd get faster results if I went straight to Podium or Intercom.
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But if I go this route, I'll ultimately get exactly what I want.
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And the reason I tell you that is, so I've paid a lot of attention to Intercom.
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And I was listening to a podcast the other day.
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And he said, since they've introduced, and I think I'm repeating this right, since they've introduced AI functionality and their billing per case, their revenue has got up $100 million.
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Yeah, was that was the Stripe founder?
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I don't remember who I was listening to.
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Yeah.
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I don't think it was the Stripe founder because I know who he is.
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Okay.
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It might've been, but I thought it was like fascinating.
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They had a great podcast, founder of Stripe or co-founder of Stripe and then the founder of Intercom.
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And yeah, similar vein of thought, but it is a great product.
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Like when we swapped, everyone likes it.
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It's just the fact, and it solves about 81% of all incoming tickets.
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Okay.
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And we consider solved as they are happy.
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Like they say, yes, that was a good experience.
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And then they end the chat.
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But yeah, all that to say, nonetheless, still got to inspect what you expect.
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That was a very good story.
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The thing that came to mind as soon as you said it, so I guess I'll just go with it, is I'm working on...
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marketing for CityTurf.
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That's where I'm spending the majority of my time, like most all of my time.
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However, I've been for a long time now really obsessed with what's happening in AI
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and especially what's happening in code.
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And since my background is in software, and I love software at the end of the day.
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I want to not love it, but I still love it.
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And then because Riley, for those that don't know, I have my oldest son, his name's Riley.
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He's done lots of things and he decided he wanted to build a software business at one point.
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And so we talk about it all the time, his software business.
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And I love software.
233
00:11:40.701 --> 00:11:42.203
He probably gets annoyed by all my advice.
234
00:11:42.223 --> 00:11:42.323
Like,
235
00:11:42.523 --> 00:11:45.744
Back when I did this, or this is what I learned, or don't do it this way.
236
00:11:45.764 --> 00:11:46.464
This is how we did it.
237
00:11:46.484 --> 00:11:47.344
Like he hears all that stuff.
238
00:11:47.364 --> 00:11:48.184
I'm sure he gets tired of it.
239
00:11:48.605 --> 00:12:00.307
But anyway, I'm so obsessed with where software is going that I decided to try my hand at building my own entire estimating system.
240
00:12:00.347 --> 00:12:04.869
Not like a little estimating system, like more than even what SA did.
241
00:12:05.029 --> 00:12:07.289
And SA's estimating system was a lot of work.
242
00:12:07.449 --> 00:12:08.630
It's very, very flexible.
243
00:12:09.630 --> 00:12:10.070
And yeah.
244
00:12:11.837 --> 00:12:13.639
I am amazed.
245
00:12:13.919 --> 00:12:14.439
Yeah.
246
00:12:14.620 --> 00:12:15.400
Oh my gosh.
247
00:12:16.181 --> 00:12:19.904
I mean, I don't know how to write code anymore.
248
00:12:20.585 --> 00:12:24.288
I still argue people should not be writing their own software.
249
00:12:24.808 --> 00:12:30.253
I'll bet just in the design of this, I have at least 60 hours trying to think through it.
250
00:12:30.333 --> 00:12:31.694
And I have this massive advantage.
251
00:12:31.734 --> 00:12:32.615
I did serve a subtle pilot.
252
00:12:32.935 --> 00:12:36.419
I can hear in my sleep everything everybody hated about us.
253
00:12:37.319 --> 00:12:38.460
everything everybody wanted.
254
00:12:38.480 --> 00:12:40.823
You're like, so I have a lot and I know how we built some of this stuff.
255
00:12:40.843 --> 00:12:42.324
I know what to do, not what to do.
256
00:12:42.504 --> 00:12:44.106
I'm not trying to build a service autopilot.
257
00:12:44.346 --> 00:12:47.789
I just wanted to see if I could build a estimating system.
258
00:12:47.809 --> 00:12:53.454
And I haven't actually even got to the code phase yet, but I've built all of the front end.
259
00:12:53.955 --> 00:12:55.316
Why, you know, all the designs.
260
00:12:55.356 --> 00:13:00.741
I've got a 56 page document of everything that has to get built, like all the rules and everything.
261
00:13:00.761 --> 00:13:01.122
Yeah.
262
00:13:01.828 --> 00:13:06.532
It just, I guess my summary is I've been distracted from the things I should be working on, which is city turf.
263
00:13:08.113 --> 00:13:12.497
And I've been staying up super late working through the weekend, but it is so unbelievable.
264
00:13:12.637 --> 00:13:12.897
Oh, yeah.
265
00:13:13.077 --> 00:13:14.919
That, I mean, and I already knew it going into it.
266
00:13:15.199 --> 00:13:17.861
I just continue to be more and more and more amazed.
267
00:13:17.901 --> 00:13:21.864
The thing that I'm super fascinated and excited about is the fact that,
268
00:13:23.283 --> 00:13:28.108
even once you develop, let's just take off account for the fact that it's going to take 200 hours to build the thing.
269
00:13:28.508 --> 00:13:32.372
Once it's done, though, that it would be very useful for you.
270
00:13:32.392 --> 00:13:38.258
I think the part that I get worried about, like we talked about last week, is like when people are like, oh, I should allow other people inside of this.
271
00:13:38.458 --> 00:13:41.241
That's when it starts becoming a bag of...
272
00:13:42.122 --> 00:13:43.043
of problems potentially.
273
00:13:43.323 --> 00:13:49.007
But like, yeah, for if you're like, Hey, I'm going to use this tool in my business, because I do estimating this very specific way.
274
00:13:49.328 --> 00:13:51.589
That's where I feel like this is just so much opportunity.
275
00:13:51.990 --> 00:13:59.095
And yes, the the the amount of sleep I have required, the more excited I get with AI just continues to amaze me.
276
00:14:00.476 --> 00:14:01.317
Exactly.
277
00:14:01.357 --> 00:14:01.597
Yeah.
278
00:14:01.617 --> 00:14:03.158
So I mean, I just it's so amazing.
279
00:14:03.258 --> 00:14:03.819
But I
280
00:14:06.433 --> 00:14:10.834
Like, for example, I'm building this estimating thing just to see if I can do it, improve it out.
281
00:14:11.254 --> 00:14:14.375
But we would never actually use a self-contained estimating system at CityTurf.
282
00:14:14.495 --> 00:14:15.675
It makes, like, no sense.
283
00:14:16.275 --> 00:14:19.056
And so it's got to be wired into everything else for it to be great.
284
00:14:19.116 --> 00:14:21.497
So it's more of a project where I'm trying to see what's possible.
285
00:14:21.937 --> 00:14:26.018
The last thing I'll say on this is I just continue to see what I've already believed.
286
00:14:26.518 --> 00:14:29.839
If you're building from the ground up and it's very contained...
287
00:14:30.912 --> 00:14:32.253
It's really, really amazing.
288
00:14:32.293 --> 00:14:44.040
But as soon as you have to start re-architecting the underlying structure or fixing problems, or now you've got all this different functionality, you're trying to put more functionality into something to exist, that's when it can get off the rails.
289
00:14:44.180 --> 00:14:46.562
It can work, but it is not a cakewalk.
290
00:14:46.702 --> 00:14:50.464
If you're building something from scratch and you never have to touch it again, probably going to work out pretty good.
291
00:14:50.744 --> 00:14:55.167
It's the next phase that may make you hate having built your own AI software.
292
00:14:55.287 --> 00:14:57.549
The fun part is the front end and like stack.
293
00:14:57.569 --> 00:14:58.250
Everything else sucks.
294
00:14:58.310 --> 00:15:05.077
As soon as you put full stack, put it back in user management and secure, like they just, oh man, now you're getting ugly.
295
00:15:05.097 --> 00:15:09.361
And then it takes way longer for the props to go through because it's gotta do so much more engineering.
296
00:15:10.114 --> 00:15:11.696
Oh, it gets expensive when you get to that part.
297
00:15:11.716 --> 00:15:12.716
Yeah, exactly.
298
00:15:12.736 --> 00:15:14.218
So anyway, that's what I'm doing.
299
00:15:14.238 --> 00:15:15.199
And it's like, it's fun.
300
00:15:15.379 --> 00:15:16.279
I mean, it's a fun time.
301
00:15:16.440 --> 00:15:18.561
Let's go ahead and jump into fuel surcharges.
302
00:15:18.622 --> 00:15:20.503
I had sent an email about this a couple weeks ago.
303
00:15:20.523 --> 00:15:21.284
You did, and I, yeah.
304
00:15:21.304 --> 00:15:21.804
You made a note of it.
305
00:15:21.824 --> 00:15:22.965
So go ahead and tee this one up.
306
00:15:23.125 --> 00:15:25.147
I saw your email about fuel surcharges.
307
00:15:25.567 --> 00:15:29.971
And I just remember battling this all the time back in the days with Service AllPilot.
308
00:15:30.512 --> 00:15:32.674
People would like, you got to build surcharges into software.
309
00:15:32.694 --> 00:15:34.455
And we have 90 other things on the roadmap.
310
00:15:34.535 --> 00:15:37.198
And it always kind of conflicted with my general belief
311
00:15:37.878 --> 00:15:49.630
It's not that I can argue on one hand that you should pay really close attention to your P&L, and you should, and so you should constantly be fixing these holes and these leaks because that preserves profit margin.
312
00:15:50.111 --> 00:15:50.531
But I...
313
00:15:51.628 --> 00:16:00.831
have a different opinion than many on how much you worry about fuel prices and therefore implement a fuel surcharge.
314
00:16:00.851 --> 00:16:02.011
So let me kick it over to you.
315
00:16:02.051 --> 00:16:03.691
Like, what have you thought about over time?
316
00:16:03.751 --> 00:16:07.693
And maybe you could talk a little bit of that email and give a little more color around it.
317
00:16:07.953 --> 00:16:08.393
Obviously...
318
00:16:09.313 --> 00:16:14.978
the price is up about 50% on average from just a couple months ago before the whole war in Iran.
319
00:16:15.458 --> 00:16:18.801
And so when it goes up that fast, I think is what everyone freaks out about.
320
00:16:19.001 --> 00:16:24.745
But actually, it was higher in 2022 in terms of the average cost per gallon.
321
00:16:24.985 --> 00:16:28.568
It's just that it kind of trickled up after COVID for about 12 months.
322
00:16:28.828 --> 00:16:32.231
So it's this really fast ramp that everyone all of a sudden gets their attention.
323
00:16:32.751 --> 00:16:32.952
But...
324
00:16:33.703 --> 00:16:35.706
what, cause I, I have the same inclination to you.
325
00:16:35.726 --> 00:16:39.532
And it's funny because I put our, uh, our last, uh, transcript into AI.
326
00:16:39.572 --> 00:16:41.054
I'm like, Hey, how can we make this more entertaining?
327
00:16:41.075 --> 00:16:43.558
It's like, you always need to disagree about more things.
328
00:16:43.879 --> 00:16:45.121
I'm like, but it's so hard.
329
00:16:45.662 --> 00:16:46.002
I know.
330
00:16:47.444 --> 00:16:48.746
But, uh, when it comes, when it comes,
331
00:16:49.307 --> 00:16:55.391
To what happened, and I saw all of it blowing up on social media and people talking about how do I increase prices by 3%, 4%.
332
00:16:55.951 --> 00:16:58.813
I'm like, instead of getting mad about it and just saying my opinion, let's go to the data.
333
00:16:58.833 --> 00:17:05.298
So that's when I went back through and I keep all financials I've ever looked at from all different industries across the turnaround show.
334
00:17:05.598 --> 00:17:06.899
And I have thousands of them.
335
00:17:06.919 --> 00:17:09.861
So I took everything from 2025 and there's about just over 600.
336
00:17:09.881 --> 00:17:09.981
Yeah.
337
00:17:10.861 --> 00:17:15.203
And it was everything ranging from about 300,000 in revenue to 14 million.
338
00:17:15.743 --> 00:17:18.344
And I looked across the whole board, ran it through the LLM.
339
00:17:18.364 --> 00:17:20.405
I always whitewash like the business information.
340
00:17:20.485 --> 00:17:22.526
But I have all the P&Ls.
341
00:17:23.307 --> 00:17:27.949
And so when it came through, what was really interesting was 57% of revenue.
342
00:17:30.710 --> 00:17:33.272
went to wages after the owner was paid.
343
00:17:33.692 --> 00:17:37.175
Now, that's a huge blended average of size of business.
344
00:17:37.736 --> 00:17:42.740
Whereas the, I think exactly, I think it was about four to 5% was fuel on average.
345
00:17:42.760 --> 00:17:44.281
It was like four point something, I think.
346
00:17:44.781 --> 00:17:45.121
And so-
347
00:17:45.962 --> 00:17:49.263
When I saw that, I'm like, are we really attacking the wrong problem?
348
00:17:49.323 --> 00:17:55.725
Because if we went from, you know, last year, 4% and this year becomes 6% because it goes up 50%, is that the problem?
349
00:17:55.825 --> 00:18:07.730
Or is it the fact that it's 57% of our revenue is going out to labor and we should figure out like route density or making this more efficient or figure out an incentive program or something to get that 57% down to 50%.
350
00:18:09.510 --> 00:18:10.891
So yeah, that's where my mindset goes.
351
00:18:11.452 --> 00:18:17.697
And I think it's, we also all look at the news and the headlines and it's much more fun to get anxious about those things.
352
00:18:17.857 --> 00:18:18.177
Yeah.
353
00:18:18.638 --> 00:18:19.939
So I've got two points on this one.
354
00:18:19.959 --> 00:18:23.481
And my first one is just unfortunately complete agreement with your position.
355
00:18:23.962 --> 00:18:28.565
And what I would say, and I just say it a different way than you're saying it, which I agree with is,
356
00:18:29.466 --> 00:18:38.392
what you're doing in business or what the ideal to do in business is to constantly be thinking about what are the issues in our business that then create the opportunities.
357
00:18:38.452 --> 00:18:40.774
And you're sort of doing the stack ranking exercise.
358
00:18:41.394 --> 00:18:43.295
There will never be a moment we can do it all.
359
00:18:43.455 --> 00:18:47.098
You know, as you know, it's like just a few things can fit into our quarter or a month.
360
00:18:47.718 --> 00:18:49.879
And every team member can do only so many things.
361
00:18:49.899 --> 00:18:51.420
So what are the biggest offenders?
362
00:18:51.460 --> 00:18:53.161
I think that's the gist of your arguments.
363
00:18:53.181 --> 00:19:04.566
Like, it's not a disagreement that, yeah, if there's now a two point difference on the P&L, that means if this were to persist an entire year, it would hit your net by 2% or by two points.
364
00:19:05.106 --> 00:19:07.147
That's meaningful, like, especially as you get bigger.
365
00:19:07.167 --> 00:19:08.048
But yeah,
366
00:19:09.163 --> 00:19:16.745
Your argument is the reason I agree with it is because the number one offender on a P&L across almost every single company is labor.
367
00:19:16.845 --> 00:19:22.746
And if you drive down labor, that's the biggest lever that you can pull on to move the needle in the business.
368
00:19:22.786 --> 00:19:29.148
And so every time you look at your P&L and say, I've got an offender, oh, fuel's an offender, I can show you four other bigger offenders.
369
00:19:29.228 --> 00:19:32.208
So why would you work on that one before you work on the other ones?
370
00:19:32.228 --> 00:19:34.489
And I think that's a gist of what you're saying.
371
00:19:34.810 --> 00:19:39.494
Yeah, like labor is so expensive, but so easy to discount because we just get to know each other's people.
372
00:19:39.514 --> 00:19:46.240
But when you actually look at the P&L, it's like, for example, when we got this head, the headquarter building, the office, it was like, OK, this is really expensive.
373
00:19:46.260 --> 00:19:47.581
This is like double our rent.
374
00:19:47.862 --> 00:19:50.064
And I was like, wait a second, this is cheaper than one engineer.
375
00:19:50.604 --> 00:19:55.709
And I would hire another engineer like in a flash tomorrow if I saw the need for them.
376
00:19:56.629 --> 00:19:59.250
But for for rent, it seems like this huge expense.
377
00:19:59.610 --> 00:20:03.531
But from a when you actually compare it to labor, it's somewhat inconsequential.
378
00:20:03.891 --> 00:20:06.892
And so I've even seen people where they're like, well, I've got this shop space.
379
00:20:06.912 --> 00:20:11.993
I can rent it for two thousand dollars and it's outside town about 15, 20 minutes from all my customers.
380
00:20:12.453 --> 00:20:15.814
Or there's one very central for three or four grand.
381
00:20:15.854 --> 00:20:17.974
But we don't want to spend the extra thousand or two thousand dollars a month.
382
00:20:18.254 --> 00:20:25.096
But I'm like, look, if you just extrapolate across 20 employees, you're paying probably six or seven thousand dollars in additional labor.
383
00:20:25.256 --> 00:20:26.477
Initial labor, wind chill time.
384
00:20:26.517 --> 00:20:33.599
And so, yeah, I think it's just it's so easy to get focused on the loudest problem instead of the biggest problem.
385
00:20:34.280 --> 00:20:36.541
And I'll add one more idea to this.
386
00:20:37.321 --> 00:20:41.543
And that is I don't know how many listening will remember these days again.
387
00:20:42.263 --> 00:20:43.223
I feel like I'm getting old.
388
00:20:43.484 --> 00:20:49.106
But I remember when I was young, sitting at the kitchen table at night, having dinner with my parents and the phone would ring.
389
00:20:50.006 --> 00:20:51.187
It's the telemarketer world.
390
00:20:51.607 --> 00:20:55.469
So if you've had, you could think about on your cell phones, you can just ignore them.
391
00:20:55.489 --> 00:20:57.410
But back in the day, the house phone would ring or whatever.
392
00:20:57.430 --> 00:20:58.650
There'd be like this interruption.
393
00:20:58.990 --> 00:21:04.513
Or you could think about for many people, unless you're, if you're door knocking and you make money door knocking, you like door knocking.
394
00:21:04.533 --> 00:21:08.214
But if you're on the other side of that, you hate door knockers, like everybody.
395
00:21:08.514 --> 00:21:10.615
So door knocking is like telemarketing to me.
396
00:21:10.655 --> 00:21:11.416
They're the same thing.
397
00:21:12.316 --> 00:21:20.147
And so where I'm going with this is I believe that like True Green used to just telemarket all the time.
398
00:21:21.049 --> 00:21:27.398
And I remember even before I was ever in the law, well, I guess I mowed lawns through high school, but I remember thinking True Green sucks.
399
00:21:27.838 --> 00:21:36.322
They always call you at your house, you know, and I kind of think about that with the door knockers, except I like the door knockers Activa or whoever was just came to my house yesterday, I engaged with all of them.
400
00:21:36.682 --> 00:21:49.928
But if I was if it wasn't me being interested in talking to these guys, like they're you I was doing something work wise, and you just broke my concentration like, and so where the point here is this, over time, do certain activities in a business?
401
00:21:50.688 --> 00:21:52.129
This is a big buildup to make a point.
402
00:21:52.309 --> 00:21:58.314
Do they create this like a little bit of annoyance, like subtle annoyance with the company?
403
00:21:58.575 --> 00:22:01.817
I'll use the True Green Telemarketing or Scott's Telemarketing.
404
00:22:01.837 --> 00:22:07.202
And then when you get their door hangers, like the first thing you think of, these are the guys that call me every night when we're eating dinner.
405
00:22:07.762 --> 00:22:09.363
versus somebody else that doesn't do that.
406
00:22:09.383 --> 00:22:13.726
So do these little annoyances build that you can't as an owner put your finger on?
407
00:22:13.746 --> 00:22:16.027
You don't quite know they're happening, but they slowly build.
408
00:22:16.408 --> 00:22:24.293
If you want to own your company for a very, very long time, they're a drag on the success of your marketing, your ability to slow, close, your sales rate, all that.
409
00:22:24.833 --> 00:22:28.315
This is a little bit of my argument with fuel surcharges.
410
00:22:29.376 --> 00:22:32.578
There are these little penalties where the client...
411
00:22:34.122 --> 00:22:38.185
they can rationalize, oh, I get it because I'm feeling it at the pump, but it still feels like nickel and diming.
412
00:22:39.206 --> 00:22:45.651
I mean, I can think of the number of times in service autopilot years where people would forget to include sales tax, for example, on an estimate.
413
00:22:45.831 --> 00:22:46.872
It wasn't a service autopilot problem.
414
00:22:46.892 --> 00:22:50.155
They just forgot to add it, and their customer would make them eat it.
415
00:22:51.255 --> 00:22:55.760
And so, and they ate it because if they made the customer eat it, they're afraid they'd never do business with them again.
416
00:22:55.780 --> 00:22:57.282
There's all these little things.
417
00:22:57.682 --> 00:23:03.128
Another example would be over time, there's companies like traditional private equity comes in and what do they do?
418
00:23:03.189 --> 00:23:06.432
Not all of them, there's good private equity, but a lot of private equity is trying to optimize price.
419
00:23:06.632 --> 00:23:09.335
They start cutting customer service in the phone call.
420
00:23:10.176 --> 00:23:11.197
the who's answering the phone.
421
00:23:11.217 --> 00:23:24.765
So then a company that's competing that always answers their phone live and has great people and can always, they start to slowly get the better reputation where the companies who are, yeah, maybe you're making more profits and whoever owns the company is looking at the P&L is like, this company's killing it.
422
00:23:24.785 --> 00:23:25.385
This is so good.
423
00:23:25.405 --> 00:23:26.265
This was a good decision.
424
00:23:26.526 --> 00:23:29.868
But you degrade the reputation of the company over years and years.
425
00:23:30.588 --> 00:23:35.331
That's a little bit of my argument, not specific to fuel charges, but a lot of these little decisions we can make
426
00:23:36.071 --> 00:23:38.013
I don't know the tax that I just incurred.
427
00:23:38.053 --> 00:23:39.934
Like, great, I recovered 2% this year.
428
00:23:40.174 --> 00:23:41.075
And it wasn't even going to be all year.
429
00:23:41.095 --> 00:23:42.616
It's probably going to be a four-month hit.
430
00:23:43.036 --> 00:23:46.159
I recovered it, but I did a little bit of damage to my reputation.
431
00:23:46.699 --> 00:23:50.882
And now my market, and I do this a couple times, now my marketing costs me just a little bit more.
432
00:23:51.282 --> 00:23:53.104
My conversion is a little bit lower.
433
00:23:53.224 --> 00:23:54.985
And so do I really save that money?
434
00:23:55.345 --> 00:23:57.387
Maybe in the short term, but in the long term, do I pay a price?
435
00:23:57.407 --> 00:23:57.727
I don't.
436
00:23:57.907 --> 00:24:02.270
I don't know for sure that that happens, but I'm kind of conservative and I play a long game in life.
437
00:24:02.791 --> 00:24:04.652
And I always worry about that kind of stuff.
438
00:24:04.672 --> 00:24:09.196
So it's a big buildup, but I think there's value in that psychology.
439
00:24:09.496 --> 00:24:20.584
If you're not just flipping this business, then what are you doing or not doing that will make sure your business is always perceived in the absolute best way possible in the market?
440
00:24:20.604 --> 00:24:21.625
And I worry about those things.
441
00:24:21.665 --> 00:24:25.448
And that's always been actually my single biggest argument against a fuel surcharge.
442
00:24:25.769 --> 00:24:37.651
It's super interesting because I have not actually thought about in that way, about like the little nicks, the little tiny things that eventually over the long run causes someone to churn, cause someone to decline an estimate.
443
00:24:37.951 --> 00:24:41.812
It's kind of like having a lot of terms and conditions inside the estimate, for example.
444
00:24:41.832 --> 00:24:44.933
It's just another, it's friction in that sales process.
445
00:24:45.433 --> 00:24:49.934
The other thing that comes to my mind just on that same note is passing along credit card fees.
446
00:24:50.594 --> 00:24:53.237
And so I'm- This is exactly the same thing.
447
00:24:53.297 --> 00:24:53.757
Here's the thing.
448
00:24:53.837 --> 00:24:55.659
Here's what's so hard though for me, Jonathan.
449
00:24:55.879 --> 00:24:56.620
This is what's hard for me.
450
00:24:57.340 --> 00:25:02.585
So we built it where they can just check a box and it passes the fee along automatically.
451
00:25:02.886 --> 00:25:06.829
Whatever Stripe is charging us, it gets charged to the customer and it flows through.
452
00:25:07.730 --> 00:25:08.511
And here's what's crazy.
453
00:25:09.736 --> 00:25:13.440
because I agree with you and I've always been like very much on this same side.
454
00:25:14.140 --> 00:25:14.921
No one leaves.
455
00:25:15.402 --> 00:25:17.043
It's almost as if they just eat it.
456
00:25:17.444 --> 00:25:26.973
But to your point, it's hard to measure what it's doing in the long term, the brand reputation and that relationship with the customer, especially because some of them are doing this.
457
00:25:27.273 --> 00:25:28.374
They're just toggling it on.
458
00:25:29.215 --> 00:25:38.668
And they're waiting for maybe 1% or 2% of people to even notice and contact them because most people realistically don't read the email that says, hey, by the way, in the future, we're charging your fees.
459
00:25:39.028 --> 00:25:40.831
So I think that's a great point.
460
00:25:40.851 --> 00:25:45.477
I had never actually been able to verbalize in that way, which is it's just another little thing.
461
00:25:46.178 --> 00:25:47.159
But it's hard to measure that.
462
00:25:47.219 --> 00:25:54.446
It's very hard to measure the impact of that 2% or 3% in a year, six months down the road when they might not give the referral.
463
00:25:54.846 --> 00:25:56.968
They might not take the upsell.
464
00:25:57.609 --> 00:25:59.651
They might not mention it to their friends and family.
465
00:25:59.711 --> 00:26:00.552
It's super interesting.
466
00:26:00.892 --> 00:26:06.317
Yeah, it's so hard to know because I too have companies I've worked with where I pay that credit card fee.
467
00:26:07.370 --> 00:26:10.411
And I guess they're good enough in all the other ways it overcomes it.
468
00:26:10.431 --> 00:26:15.191
But I always like, because I'm on the different side of the table, I was like, this is not a good idea.
469
00:26:15.551 --> 00:26:16.512
Just raise the price.
470
00:26:16.592 --> 00:26:17.692
But I still work with them.
471
00:26:18.252 --> 00:26:23.293
And so maybe the way to articulate it, and again, I'm a conservative guy.
472
00:26:23.333 --> 00:26:24.393
I think long term.
473
00:26:24.693 --> 00:26:26.273
I really value reputation.
474
00:26:26.293 --> 00:26:29.114
I believe the long game is customer service and quality.
475
00:26:29.274 --> 00:26:30.854
And that is how you create a brand.
476
00:26:31.254 --> 00:26:34.475
It's a byproduct of doing the right things over and over every single day.
477
00:26:35.135 --> 00:26:37.077
And so to me, this is a little bit of branding.
478
00:26:37.157 --> 00:26:39.258
It's doing the right and best thing for the client.
479
00:26:39.579 --> 00:26:44.903
And the little things, like I don't really believe if I charge a fuel surcharge, everybody's gonna leave me in the business, go fall apart.
480
00:26:45.043 --> 00:26:45.924
There's no drama here.
481
00:26:46.404 --> 00:26:56.692
It's just that it's like over time, all the compounding of this little thing and that little thing and this little thing just gives a person this little feeling where they're not as excited about the company.
482
00:26:56.712 --> 00:26:58.734
It's just so hard to measure that.
483
00:26:58.754 --> 00:27:00.275
I have no idea how to measure it.
484
00:27:00.295 --> 00:27:00.956
So it's just a bet.
485
00:27:01.056 --> 00:27:01.797
Yeah, yeah.
486
00:27:02.828 --> 00:27:05.469
But that's probably what we as business owners do, right?
487
00:27:05.889 --> 00:27:09.350
We just make a lot of bets of, I think this is probably the best thing to do.
488
00:27:09.390 --> 00:27:10.791
This is probably not a wise thing to do.
489
00:27:11.151 --> 00:27:13.532
And some decisions you can't back them with data.
490
00:27:13.952 --> 00:27:19.754
I don't want to go too far off in the weeds, but again, I'm not a negative guy in private equity, but I also see a lot of negatives in private equity.
491
00:27:20.475 --> 00:27:25.376
I'm picking on them and I don't really want to, but they come in and optimize everything based on data.
492
00:27:26.617 --> 00:27:29.438
And it's funny how a lot of companies will just be killing it.
493
00:27:30.331 --> 00:27:39.435
And they use data, but they also make a lot of gut decisions, like based on what they feel is best for the customer, how I would want to be treated, how I would think about this.
494
00:27:39.515 --> 00:27:42.436
And so some of those decisions aren't made by with data.
495
00:27:42.456 --> 00:27:44.717
They're made by just being very human.
496
00:27:45.378 --> 00:27:49.800
And sometimes when you become too clinical and every single decision is made by data...
497
00:27:50.640 --> 00:27:55.602
It looks really good in the short term, but accidentally in the long term, it creates harm because you're being less human.
498
00:27:56.042 --> 00:27:57.363
Maybe that's another way to say it.
499
00:27:58.003 --> 00:27:59.083
I don't know how to articulate it.
500
00:27:59.343 --> 00:28:01.204
But it's just a belief I have.
501
00:28:01.384 --> 00:28:06.726
Jim Collins wrote the book, How the Mighty Fall is the opposite of good to great.
502
00:28:06.766 --> 00:28:08.287
It was the companies that end up going bad.
503
00:28:08.347 --> 00:28:09.267
I forget the exact name.
504
00:28:09.287 --> 00:28:09.527
Oh, okay.
505
00:28:09.647 --> 00:28:10.068
I haven't heard.
506
00:28:10.088 --> 00:28:10.808
Fantastic book.
507
00:28:10.828 --> 00:28:15.610
And inside of it, he has this demonstration or this story about a candy company.
508
00:28:16.270 --> 00:28:22.435
And they got bought out and the company comes in, this young guy, and he looked at all the ingredient lists of the candy.
509
00:28:23.036 --> 00:28:24.317
And there's like 19 ingredients.
510
00:28:24.437 --> 00:28:25.558
And he said, this one's so expensive.
511
00:28:25.578 --> 00:28:26.238
I've heard this story.
512
00:28:26.278 --> 00:28:26.518
Yeah.
513
00:28:26.739 --> 00:28:27.159
Keep going.
514
00:28:27.199 --> 00:28:27.639
Great story.
515
00:28:27.659 --> 00:28:28.160
Fantastic story.
516
00:28:28.180 --> 00:28:32.543
Took out the one ingredient, immediately boost profits that quarter by like 25, 30%.
517
00:28:32.643 --> 00:28:33.985
And he's like, oh, fantastic.
518
00:28:34.005 --> 00:28:36.026
Well, let's look at the 18th most.
519
00:28:36.206 --> 00:28:38.888
And over time, he was able to like double or triple the profits.
520
00:28:38.969 --> 00:28:44.133
Eventually though, several years later, all of a sudden the demand for this product that was soaring started falling off.
521
00:28:44.633 --> 00:28:47.554
And then it started decaying to the point where now they're unprofitable.
522
00:28:47.615 --> 00:28:48.935
No one wants this product.
523
00:28:49.255 --> 00:28:52.837
And they go back to the fact that now that 19 ingredients was something like six or seven.
524
00:28:53.417 --> 00:29:04.683
And even though on paper, every single cut made sense financially, he then put the piece of candy, kind of like what I did the other day looking on Intercom, puts a piece of candy in his mouth and is like, that's not even good.
525
00:29:04.883 --> 00:29:07.284
It's not even recognizable to the original thing.
526
00:29:07.724 --> 00:29:10.366
But each of those decisions made sense economically.
527
00:29:10.386 --> 00:29:11.066
Yeah.
528
00:29:11.486 --> 00:29:17.889
Potentially didn't show it in the immediate effect, but in that long term brand of what people expected, it was doing damage.
529
00:29:18.249 --> 00:29:20.910
That was such a perfect analogy right there.
530
00:29:20.991 --> 00:29:29.435
It's like there's this I believe in data to my core, but there's also this art artistry or creativity that's involved in a business.
531
00:29:29.475 --> 00:29:29.955
It's both.
532
00:29:30.535 --> 00:29:34.958
And that's maybe why public companies tend to do best who are still ran by founders.
533
00:29:35.018 --> 00:29:36.219
Like it takes both.
534
00:29:36.319 --> 00:29:37.400
It's a balance of the two.
535
00:29:37.660 --> 00:29:43.944
And when you shift all the way to just winging it and everything and putting your finger in the air and guessing on everything, that doesn't tend to work really well.
536
00:29:44.144 --> 00:29:47.506
When you just live pure data, that doesn't, it's the two together.
537
00:29:48.127 --> 00:29:50.008
And so, man, that's a perfect analogy.
538
00:29:50.377 --> 00:29:56.161
Okay, let's switch gears because we know that the thing that you've been trying to focus on is getting marketing manager at CityTurf and all the marketing side.
539
00:29:56.521 --> 00:29:56.741
Yeah.
540
00:29:56.881 --> 00:29:59.343
You've been distracted with the AI stuff.
541
00:29:59.463 --> 00:30:00.344
AI, this AI thing.
542
00:30:00.384 --> 00:30:01.044
Yeah.
543
00:30:01.184 --> 00:30:19.637
But let's go back to the fact like CityTurf is hiring, you know, you're trying to get a marketing manager, but let's look at like for whether it be smaller or larger, when you're, when to hire a marketing manager versus an agency, when to outsource it, what's sort of your opinion on the size of the business and when it kind of makes sense to do one or the other?
544
00:30:20.779 --> 00:30:21.039
Yeah.
545
00:30:21.860 --> 00:30:23.742
I don't think there's an obvious answer.
546
00:30:23.822 --> 00:30:33.210
I mean, my gut feeling is that it's just an impossibility and it doesn't make sense for companies for sure.
547
00:30:33.751 --> 00:30:37.795
For sure, it's too strong of a word, but let me just go with, it doesn't make sense under $10 million.
548
00:30:38.175 --> 00:30:40.297
I'm just going to make up this arbitrary number.
549
00:30:40.317 --> 00:30:45.201
And the reason for that is I would far prefer you spend your
550
00:30:45.922 --> 00:30:53.987
every extra dollar you have, just dialing in the operations as much as you can and just being incredibly good there and doing the marketing.
551
00:30:54.007 --> 00:31:01.492
But you can get, as long as you don't get stuck with an agency, you can find agencies that can get you moving in the right direction.
552
00:31:01.512 --> 00:31:05.155
You've just got to be willing to move on from agencies when they're no longer delivering.
553
00:31:05.455 --> 00:31:08.558
And again, this is kind of a making up the answer.
554
00:31:08.578 --> 00:31:09.819
There's no rule here.
555
00:31:10.459 --> 00:31:18.947
I just feel that as you start to get to this $10 million and greater number, and possibly sooner if you have the money and if you're a fast-moving organization.
556
00:31:19.867 --> 00:31:21.189
I tend to like to quantify that way.
557
00:31:21.449 --> 00:31:25.792
There's things you do way earlier in a business when you are just going and you have money.
558
00:31:26.553 --> 00:31:27.515
you make different decisions.
559
00:31:27.575 --> 00:31:38.554
But for most companies, they finally start to have the kind of money it takes to hire this kind of a role in that $10 million plus range, because you could get a marketing manager that's
560
00:31:39.871 --> 00:31:42.713
65,000 a year, I'm talking about a six-figure person.
561
00:31:42.793 --> 00:31:44.214
I'm talking about another level.
562
00:31:44.814 --> 00:31:50.997
Another way to say it is there's the person that's learning on your dime and there's the person that's already done it, and they just bring all the answers.
563
00:31:51.378 --> 00:31:56.180
I'm more talking bring all the answers and run that part of the business because I got to stay focused over here.
564
00:31:56.541 --> 00:31:59.182
And that's why I tend to think this $10 million number.
565
00:32:00.023 --> 00:32:01.463
There are good agencies.
566
00:32:02.584 --> 00:32:08.868
My experience with agencies has been that most of them fall apart as they start to get bigger.
567
00:32:09.548 --> 00:32:13.189
Like when they're really small, they're really focused on you, they do a great job.
568
00:32:13.589 --> 00:32:20.131
And then as they get big, maybe they're good at their agency work, but they're not so great at running their organization or whatever the scenario is.
569
00:32:20.551 --> 00:32:28.754
Or you can get ignored by the agency for longer periods of time without you realizing they're not actually working on your stuff.
570
00:32:28.794 --> 00:32:29.574
And so that's where...
571
00:32:30.692 --> 00:32:33.535
I tend to think you might have to make changes from time to time.
572
00:32:33.555 --> 00:32:34.696
That's been my experience.
573
00:32:35.456 --> 00:32:38.119
And so 10 million is sort of my number here.
574
00:32:38.279 --> 00:32:45.185
My thought actually went to even before you go agency, like when do you go from I should do it myself to –
575
00:32:45.906 --> 00:32:46.887
handing off to an agency.
576
00:32:47.467 --> 00:32:53.230
And one of the things that we've seen a bunch this year, cause we started doing it for the owners and it's just a flat monthly fee.
577
00:32:53.470 --> 00:33:02.575
But like what we found when we started opening up their accounts was amazing that when they run it themselves, a lot of these AI features that some of them are really good.
578
00:33:02.595 --> 00:33:12.300
Like with the Andromeda update, it can find and target much better, but for home services or for local businesses, your best targeting is like market inside of this circle.
579
00:33:13.241 --> 00:33:13.401
And,
580
00:33:14.300 --> 00:33:24.150
the level of granularity required is so much less than if I'm going after the whole country and I need to based on interest or psychographics or where they've been on the internet, et cetera.
581
00:33:24.751 --> 00:33:29.275
Versus just being like, hey, if they're between 40 and 65, I want you to market them in this area.
582
00:33:29.896 --> 00:33:32.899
And what we found though is people were toggling on AI
583
00:33:34.420 --> 00:33:59.855
features inside meta specifically but even inside google and reaching audiences they should never be reaching but it's in the effort of making it as simple as possible and like leaving the defaults on they were spending way more than they should because of now ai optimizing but now you're showing up on the audience network in areas like what like we we scrubbed 9 000 sites and basically import for every location to where we don't want to show up on google because
584
00:34:00.355 --> 00:34:02.075
gaming sites, children's sites.
585
00:34:02.095 --> 00:34:03.036
You don't want to be showing up there.
586
00:34:03.056 --> 00:34:05.056
Like, you know, you're not going to have any buyers there.
587
00:34:05.536 --> 00:34:21.399
And so there were little, little optimizations like that, that we have seen people moving from themselves to, okay, when do I actually go get someone, an agency outside of the organization, pay them $500,000, whatever is a month, just to do this for me versus being like, I've got to scrimp every single dollar.
588
00:34:21.579 --> 00:34:22.799
I think you do that very early.
589
00:34:23.879 --> 00:34:26.200
I think your argument holds up, but there's a different argument.
590
00:34:26.220 --> 00:34:26.720
And that is,
591
00:34:28.001 --> 00:34:29.662
what's the first thing you stop doing when you get busy?
592
00:34:30.582 --> 00:34:31.603
Anything marketing related.
593
00:34:32.344 --> 00:34:42.131
So if you want that function to continue and you don't want your business to just be this constant rollercoaster of, we got leads, we have no leads, we got leads, we have no leads, then you need to get somebody else that thinks about that all the time.
594
00:34:42.171 --> 00:34:52.959
And so my argument is, in fact, I have a video next week coming out on Five for 50 that talks about what you do to get to 10,000 in revenue and then what you do to get to a million dollars in revenue from a marketing standpoint.
595
00:34:53.559 --> 00:34:56.562
And my argument is that you...
596
00:34:57.922 --> 00:35:03.065
as fast as you can, you get somebody to take SEO and things like that off your plate.
597
00:35:03.085 --> 00:35:04.326
You gave the example of Facebook.
598
00:35:04.346 --> 00:35:06.187
I'd give that example of Google ads as well.
599
00:35:06.527 --> 00:35:08.788
Like the amount of money that's wasted on that stuff.
600
00:35:08.828 --> 00:35:11.649
If you have somebody just watch it and dial it in, you'll pay for that person.
601
00:35:11.669 --> 00:35:12.090
They're free.
602
00:35:12.190 --> 00:35:14.651
I mean, I think you get that role as quick as you can.
603
00:35:14.931 --> 00:35:18.273
I'm a little different than other people too, because I like marketing.
604
00:35:18.413 --> 00:35:24.256
If I could just work on software stuff and do marketing and never have to do anything else ever, I'd be totally happy with that.
605
00:35:24.656 --> 00:35:25.277
I like marketing.
606
00:35:25.317 --> 00:35:26.398
Not everybody feels that way.
607
00:35:26.798 --> 00:35:30.201
So you have to know that about me when you listen to my advice.
608
00:35:31.062 --> 00:35:32.844
I've read and studied a lot.
609
00:35:33.044 --> 00:35:34.245
I've thought about this a lot.
610
00:35:34.305 --> 00:35:36.127
I've spent a lot of money experimenting.
611
00:35:36.227 --> 00:35:40.350
So I can say this is how I would do it, but that's unique to me.
612
00:35:40.751 --> 00:35:43.613
And so for most people, I think you use an agency.
613
00:35:43.633 --> 00:35:43.733
Yeah.
614
00:35:44.514 --> 00:35:49.377
And then someday as the org gets big enough, then you go bring that stuff in house.
615
00:35:49.858 --> 00:35:52.259
But it doesn't mean you bring everything in house.
616
00:35:52.540 --> 00:35:54.301
That's a whole, maybe we should talk about that.
617
00:35:54.321 --> 00:35:56.042
That's a whole nother part of the conversation here.
618
00:35:56.382 --> 00:36:00.205
Even if you have a marketing person, that doesn't mean they do all this stuff.
619
00:36:00.225 --> 00:36:04.308
Because I also think there are domains of expertise, SEO, SEO.
620
00:36:04.948 --> 00:36:10.750
paid ads, organic, social, there's all these different areas of expertise.
621
00:36:10.790 --> 00:36:16.011
So if you're going to, if you're thinking you're going to hire one person to do it all, it's going to be back to the same problem.
622
00:36:16.031 --> 00:36:27.794
You just articulated, Mike, like, if a person isn't good at Facebook ads, where are they wasting you money, where even though they're the manager of the business, you could just go hire an expert to focus on that thing.
623
00:36:28.715 --> 00:36:30.235
And so that's how I tend to think about it.
624
00:36:30.435 --> 00:36:34.943
So when you hired your marketing manager, for example, I don't know if you have or are going to.
625
00:36:34.963 --> 00:36:35.685
I did.
626
00:36:35.885 --> 00:36:36.105
You did.
627
00:36:36.125 --> 00:36:36.446
I fired him.
628
00:36:36.586 --> 00:36:36.787
Okay.
629
00:36:36.947 --> 00:36:37.528
Okay.
630
00:36:37.708 --> 00:36:38.189
Oh, you did?
631
00:36:38.710 --> 00:36:39.451
In the last few weeks?
632
00:36:39.572 --> 00:36:39.772
Yeah.
633
00:36:40.189 --> 00:36:42.750
No, I fired him last year.
634
00:36:43.050 --> 00:36:44.371
I'm the marketing manager right now.
635
00:36:44.391 --> 00:36:44.931
Okay, okay.
636
00:36:45.252 --> 00:36:55.537
But like when you're looking for this person, and to your point, this is the hardest part when I was hiring the department lead for Augusta Leads was Facebook is its own thing.
637
00:36:56.097 --> 00:36:57.037
Google is its own thing.
638
00:36:57.237 --> 00:36:58.778
SEO, its own thing.
639
00:36:59.138 --> 00:37:06.582
Organic is like, did you just have to determine what's most important to the business currently and kind of optimize around that first?
640
00:37:06.602 --> 00:37:06.762
Yeah.
641
00:37:07.433 --> 00:37:08.634
To hire the marketing manager?
642
00:37:08.734 --> 00:37:08.994
Correct.
643
00:37:09.394 --> 00:37:10.634
And I struggled with this one.
644
00:37:10.794 --> 00:37:12.395
I'll kind of tell you my criteria.
645
00:37:12.995 --> 00:37:17.437
But I struggled with it because, you know, City Turfs, we're at a good size.
646
00:37:17.617 --> 00:37:23.620
But even at this size, I'm not sure exactly who we need as a marketing manager.
647
00:37:23.820 --> 00:37:26.361
My next goal is double it, where we're at, so 40.
648
00:37:26.441 --> 00:37:27.702
Yeah.
649
00:37:28.582 --> 00:37:29.522
What's that look like?
650
00:37:29.583 --> 00:37:30.643
Like, what do we need?
651
00:37:31.143 --> 00:37:33.964
I, even at this moment, struggle with exactly who I need.
652
00:37:33.984 --> 00:37:36.105
And I've had CMOs and marketing people.
653
00:37:36.626 --> 00:37:37.246
I've done this.
654
00:37:38.006 --> 00:37:40.087
And I'm still struggling looking out into the future.
655
00:37:40.147 --> 00:37:45.990
So trying to understand, am I hiring somebody that has done a $20, $30 million business?
656
00:37:46.010 --> 00:37:47.270
Am I hiring somebody that's done 50?
657
00:37:47.290 --> 00:37:50.792
Like, am I hiring somebody that can do the copywriting process?
658
00:37:51.192 --> 00:38:13.906
and maybe manage this and then they can manage people and outsource all this other stuff like what's their core skill need to be what happens is now that you're starting to get into these numbers if I were to say I'm going to go hire somebody that's ran 50 million marketing budget not budget but a bet at a 50 million dollar company running marketing there's a high probability they haven't done any of the actual work in a very long time and all they do is manage people
659
00:38:14.386 --> 00:38:16.748
Like, well, I don't need a manager of people.
660
00:38:17.128 --> 00:38:18.189
I don't need a strategist.
661
00:38:18.349 --> 00:38:19.490
I want to be the strategist.
662
00:38:19.971 --> 00:38:29.598
Or I can hire a marketing person and then I can pay the equivalent of strategy groups or agencies to make, we'll make the plan and then we go execute for six months.
663
00:38:30.219 --> 00:38:32.520
So, and then we make a new plan and we go execute.
664
00:38:32.540 --> 00:38:34.562
So do I need a CMO that can even do strategy?
665
00:38:34.582 --> 00:38:34.982
I don't know.
666
00:38:35.002 --> 00:38:37.124
Like I could talk myself in circles here.
667
00:38:37.764 --> 00:38:43.028
So what I landed on was copy is insanely important to me.
668
00:38:43.969 --> 00:38:47.610
And so if I could find a marketing manager who's really strong with copy, that'd be cool.
669
00:38:47.790 --> 00:38:51.751
If not, I can put together a group of outsourced copywriters.
670
00:38:51.891 --> 00:38:54.371
I had four criteria that were like non-negotiables.
671
00:38:54.852 --> 00:38:57.072
They had to be all in on AI.
672
00:38:57.712 --> 00:39:02.773
I have no desire to pay somebody to say I wrote my own copy or I did my own thing.
673
00:39:03.074 --> 00:39:04.954
Like, cool, you're slow.
674
00:39:06.394 --> 00:39:07.455
Like, we could do this faster.
675
00:39:07.535 --> 00:39:11.495
I don't want you to just like ask AI, prompt AI, and then take exactly what it gives you.
676
00:39:11.696 --> 00:39:13.356
I want you to be smart enough to work with it.
677
00:39:14.196 --> 00:39:17.618
And I'm not looking for you to use AI to solve the problem in five minutes.
678
00:39:17.638 --> 00:39:21.821
I'm using you to use AI to solve the problem in two hours with the most incredible solution.
679
00:39:22.141 --> 00:39:27.344
So number one, are you going to use AI and in a meaningful way and you're going to learn it in a big way?
680
00:39:27.504 --> 00:39:28.445
That was criteria number one.
681
00:39:28.765 --> 00:39:29.746
Number two, data.
682
00:39:30.366 --> 00:39:31.607
I believe in data.
683
00:39:31.947 --> 00:39:34.169
So do you understand data attribution?
684
00:39:34.189 --> 00:39:36.510
Can you help us set up data attribution systems?
685
00:39:36.730 --> 00:39:38.091
Will you actually look at the data?
686
00:39:38.371 --> 00:39:39.832
Will we make decisions on the data?
687
00:39:39.852 --> 00:39:41.553
So those were two really critical ones.
688
00:39:42.154 --> 00:39:48.678
And then the understanding of marketing itself, like writing copy, hooks.
689
00:39:49.238 --> 00:39:50.479
I don't need you to be the best copywriters.
690
00:39:50.559 --> 00:39:51.340
I can find them.
691
00:39:51.780 --> 00:39:57.344
But do you understand marketing, headlines, persuasion, all that stuff?
692
00:39:57.404 --> 00:39:58.665
I needed you to be good at that.
693
00:39:59.425 --> 00:40:04.536
And then the other one that was kind of negotiable was, this is kind of where I was going a minute ago, I could trade off.
694
00:40:04.576 --> 00:40:06.360
If I had a great copywriter, that's cool.
695
00:40:07.041 --> 00:40:08.124
A little bit harder to find.
696
00:40:08.144 --> 00:40:08.785
Yeah.
697
00:40:09.222 --> 00:40:15.965
Um, if I found somebody that was really good at managing paid ads, cause you can spend a ton of money there, be kind of cool, but I'm also okay outsourcing that.
698
00:40:16.745 --> 00:40:19.827
So I guess actually those were my big criteria.
699
00:40:19.907 --> 00:40:25.449
I, there is one other, and it is slipping my mind right now what that was, but I didn't need you to be a designer.
700
00:40:25.609 --> 00:40:26.309
Oh, project manager.
701
00:40:26.449 --> 00:40:26.950
That's what it was.
702
00:40:27.050 --> 00:40:28.810
I need you to be able to manage projects.
703
00:40:29.451 --> 00:40:29.771
That's it.
704
00:40:29.971 --> 00:40:32.632
So, um, that's what I hired for.
705
00:40:32.892 --> 00:40:41.675
Yeah, that last one, the project management part was the one I was really trying to optimize for because the challenge for us is like, it's you're not working with one owner, you're working with 100.
706
00:40:42.215 --> 00:40:49.017
And so mine, I actually found most success in going and getting someone that would work to the very top of an agency.
707
00:40:49.777 --> 00:40:52.058
that was used to working with a whole bunch of clients.
708
00:40:52.158 --> 00:40:55.759
And then they were thrilled with the fact it's like, oh, I only have one brand guide.
709
00:40:56.060 --> 00:40:58.461
I'm working with one brand and I can duplicate this.
710
00:40:58.481 --> 00:40:59.541
I can work way faster.
711
00:41:00.141 --> 00:41:03.102
And instead of having like 10 different companies I'm working for.
712
00:41:03.543 --> 00:41:09.765
And so that was, we lucked out so hard with like the marketing, who's over Augusta leads.
713
00:41:10.205 --> 00:41:10.665
That's great.
714
00:41:10.785 --> 00:41:14.027
But it was one of those things that I was really concerned about.
715
00:41:14.627 --> 00:41:21.872
going into just knowing that like, okay, I know I'm like a solid six out of 10 when it comes to paid ads and paid traffic.
716
00:41:22.212 --> 00:41:26.575
And I know enough to interview, but it was a gamble.
717
00:41:26.655 --> 00:41:31.498
And I'm just like super thankful that we lucked out with that because it's just such a hard position to fulfill.
718
00:41:31.518 --> 00:41:34.480
And especially when you know you can do the work pretty good.
719
00:41:35.101 --> 00:41:40.164
It goes back to what we tell people to do when it comes to operations, stepping out of a million, $2 million business.
720
00:41:40.885 --> 00:41:43.847
It's so hard when you know how to do it better than they do.
721
00:41:44.567 --> 00:41:49.172
And so it's either, A, you're going to go hire the person that's done there, done it, been there before.
722
00:41:49.773 --> 00:41:52.737
But that's sometimes very difficult to do when you open up your pocketbook.
723
00:41:52.757 --> 00:41:54.298
I'm like, okay, this is going to cost me something.
724
00:41:55.880 --> 00:42:00.425
But one thing I want to go back to, you mentioned, is copy and that being so important.
725
00:42:00.926 --> 00:42:11.311
There's one throughput I've always seen when it comes to people I look up to when it comes to advertising marketing, like Dan Kennedy, for example, even Alex, Alex Ramose, yourself, you've always gone back to copy.
726
00:42:11.331 --> 00:42:18.114
And even I remember way back in the day when you talked on YouTube about like the copy of the flyer, of the postcard, of the door hanger.
727
00:42:18.515 --> 00:42:26.959
What is it that distinguishes between someone that can just throw it into AI versus what you just said, the two hours spent with AI to make it world-class?
728
00:42:27.379 --> 00:42:29.360
What is the difference that you're looking for in
729
00:42:29.640 --> 00:42:31.342
in the output from those people?
730
00:42:34.645 --> 00:42:41.152
There's a lot of things, but the simplest, we'll call it top level thing that comes to mind is persuasion.
731
00:42:42.974 --> 00:42:51.082
And the way that you persuade somebody is by really understanding them and understanding what matters to them.
732
00:42:52.094 --> 00:42:56.176
what they would get them excited, what makes...
733
00:42:56.216 --> 00:43:04.379
I love the visual of what is the thing that keeps the person up at night that they're angry about, they're pissed about, they're frustrated about, they're stressed about.
734
00:43:04.419 --> 00:43:06.740
What's the thing they first think about in the morning when they wake up?
735
00:43:07.061 --> 00:43:09.682
What's the thing that they worry about?
736
00:43:10.142 --> 00:43:16.425
And so when you understand those triggers, and I don't mean in a manipulative way, but when you understand them,
737
00:43:17.454 --> 00:43:23.637
then you can talk to them in a way that means something to them where they have an emotional reaction to what you're saying.
738
00:43:24.598 --> 00:43:38.705
So for anybody that's a parent, if you have kids, you immediately know the hooks to use when you're talking to another parent if it has anything to do with risks to their kids, anything happening to their kid.
739
00:43:39.005 --> 00:43:41.447
And so if you're a parent, you could kind of relate with...
740
00:43:42.527 --> 00:43:51.795
Anybody could relate with something happening, my kid getting sick, something happening, my kid being in an accident, or my 16-year-old riding with a friend in the car.
741
00:43:51.915 --> 00:43:53.336
And is that kid a good driver?
742
00:43:53.376 --> 00:43:55.037
What kind of dumb decisions are they making?
743
00:43:55.057 --> 00:44:02.002
You can relate with that little fear, that little thing that nags in the back of your mind where you worry about your children.
744
00:44:02.903 --> 00:44:04.124
And it never goes away.
745
00:44:04.625 --> 00:44:06.046
And that's an example.
746
00:44:06.407 --> 00:44:12.112
Or if you're a business owner, that nagging thing that never goes away where you're worrying about your business and the economy and the market.
747
00:44:12.132 --> 00:44:13.153
Like, there are these little things.
748
00:44:13.173 --> 00:44:21.801
Well, when you really understand your prospect and what life looks like for them and what they think about, what they worry about, what gets them excited, then you know how to write to them.
749
00:44:22.182 --> 00:44:23.983
That's the top level.
750
00:44:25.005 --> 00:44:34.547
And then whatever the problem is that you're trying to sell to the person, like on this specific thing, what would get them to feel pain around this?
751
00:44:34.567 --> 00:44:38.607
And unfortunately, we're all driven by fear and pain.
752
00:44:39.047 --> 00:44:41.468
Curiosity works, but think about you.
753
00:44:41.608 --> 00:44:43.248
Fear works the best, unfortunately.
754
00:44:44.008 --> 00:44:52.110
And it's what we, because we're all probably wired to, you know, watch out for bad things happening to us and our families and friends.
755
00:44:52.190 --> 00:44:52.810
And so, yeah.
756
00:44:54.283 --> 00:44:59.127
whenever you're selling something, you're trying to get into the mind of the buyer and understand the problem.
757
00:44:59.367 --> 00:45:03.330
And then you're poking on that problem and you're agitating that problem.
758
00:45:03.350 --> 00:45:05.512
You're making them feel that thing at an emotional level.
759
00:45:05.772 --> 00:45:08.754
And then you're relieving the pain by giving them a solution.
760
00:45:08.794 --> 00:45:10.756
But all of that requires you understand them.
761
00:45:11.216 --> 00:45:12.997
So you asked about copy.
762
00:45:13.598 --> 00:45:15.779
Copy is about really understanding your buyer.
763
00:45:16.260 --> 00:45:20.022
It's about having avatars to understand your different buyers because none of us have one buyer.
764
00:45:20.925 --> 00:45:29.372
Like I can say generally my buyer 65% of the time is a female 30s to mid 50s.
765
00:45:29.452 --> 00:45:36.658
She has two kids and I can kind of get, I know my market about what the home costs and such.
766
00:45:36.918 --> 00:45:38.039
I can kind of get there.
767
00:45:38.579 --> 00:45:45.425
But even within that group, I've got different buyers, depending on whether if you're in my neighborhood, it's doctors and entrepreneurs.
768
00:45:46.045 --> 00:45:47.467
Everybody in my neighborhood owns a company.
769
00:45:48.473 --> 00:45:56.120
And but so that's a different buyer that's willing to spend a different amount of money and has different concerns and isn't price sensitive.
770
00:45:56.220 --> 00:46:03.166
Like they just want it solved because they're making $3,000 an hour running or more running their companies.
771
00:46:03.186 --> 00:46:08.030
Like they don't give a flip about a $15 variance in a bill, but you go to other neighborhoods and...
772
00:46:08.550 --> 00:46:09.871
That's a different buyer persona.
773
00:46:09.971 --> 00:46:14.772
And that, a long answer here, Mike, but that's the crux of it all.
774
00:46:15.093 --> 00:46:18.614
And then after that, you just learn the techniques of writing the copy.
775
00:46:18.914 --> 00:46:33.940
But if you could just master that one thing of really understanding your buyer and then speaking to the one thing instead of 90 things that they might be feeling and zeroing in on that, creating the pain and then relieving the pain, then everything will perform so much better.
776
00:46:34.361 --> 00:46:47.938
when I was looking at hiring for this, the marketing manager role is like, can they go one level deeper and not just speak about the feature, but the benefit, but then also like the 2.0 version is, can they speak to the benefit of the benefit?
777
00:46:48.318 --> 00:46:50.741
And that's where I feel like it gets to the core of,
778
00:46:51.817 --> 00:46:56.039
problem that's actually being solved to speak to and show empathy through the copy.
779
00:46:56.659 --> 00:46:56.899
Yes.
780
00:46:57.100 --> 00:47:07.224
And so I reminded like when we did a turnaround for a pool fence company and they're doing 14 million and they did the fencing around pools to keep kids from falling in.
781
00:47:07.404 --> 00:47:08.105
Yep.
782
00:47:08.125 --> 00:47:13.667
And the immediate benefit is, hey, you don't have to do like the kid does not fall into the pool.
783
00:47:13.687 --> 00:47:14.228
They don't drown.
784
00:47:14.948 --> 00:47:16.489
huge opportunity, it's fear.
785
00:47:17.029 --> 00:47:28.716
And I said, can we go one level deeper, which is the benefit to that benefit is now as the very busy, stressed out mom of four kids, they can go play in the backyard and you don't have to worry.
786
00:47:29.316 --> 00:47:36.060
And you can take that time inside, apart from them, and know that they're not going to fall in the pool.
787
00:47:36.420 --> 00:47:38.502
It helps a lot, you know, at the end of the day to know...
788
00:47:39.262 --> 00:47:41.943
why you're doing it and that people are getting a good benefit out of it.
789
00:47:41.963 --> 00:47:51.488
And that's like the benefit of the benefit is the time alone to be able to take 20 minutes and decompress and not be looking out the window every three minutes to make sure no one's, you know, fall inside the pool.
790
00:47:51.788 --> 00:47:53.009
And that's where I've always looked at.
791
00:47:53.029 --> 00:48:00.613
It's like the levels of, you know, go past the feature to the benefit, but then the benefit of the benefit and really the psychology of the problem.
792
00:48:01.308 --> 00:48:01.968
Yeah, that's smart.
793
00:48:02.048 --> 00:48:03.729
And you made me think of this.
794
00:48:03.969 --> 00:48:13.652
So when you sit down to think through this, you're literally doing a brain dump and you're putting all that, those benefits, the benefits of the benefits, the fears, you're putting all that down on paper.
795
00:48:14.012 --> 00:48:16.133
And then you're trying to figure out where you're going to zero in.
796
00:48:16.860 --> 00:48:20.345
It's back to, I won't spend much on this, but the idea of segmentation.
797
00:48:20.365 --> 00:48:30.580
This is why segmentation is so important because when you really understand different buyer groups or different avatars, then you're writing your message, your copy, your offer, everything just to that group.
798
00:48:30.700 --> 00:48:31.861
And it just works so much better.
799
00:48:32.382 --> 00:48:32.742
Yeah.
800
00:48:32.762 --> 00:48:38.247
And that's even when we change the site from Copilot Homeworks recently, it was like, who are we actually going after?
801
00:48:38.347 --> 00:48:41.670
And like, how do we call them out very explicitly?
802
00:48:41.690 --> 00:48:44.392
But also, everything needs to be written for them.
803
00:48:45.113 --> 00:48:50.738
I can't write and solve the benefit of the benefit for every single buyer type.
804
00:48:51.458 --> 00:49:04.161
And unless you're going to have literally sophisticated of like we split, for example, ads now with AI is really nice with landing pages to be able to segment people based upon things like, okay, if they're between 35 and 50, I want them to go this direction.
805
00:49:04.181 --> 00:49:05.982
If they're 50 plus, I want to go in this direction.
806
00:49:06.422 --> 00:49:19.325
It's now possible, but still it's a function of how I speak and communicate and the problems I identify for them and the solutions I offer to them very much is indicative of what problems do they have and do I even understand them?
807
00:49:19.925 --> 00:49:26.847
And that was the big thing like when we went to the brand change, like we have to identify who are we serving here and who are we not serving?
808
00:49:27.007 --> 00:49:32.268
And that's actually the harder part because it's just so easy to say yes to everyone, whether it be home services or software, it doesn't matter.
809
00:49:32.288 --> 00:49:34.649
It's like it's so easy to say yes to everyone's money.
810
00:49:34.709 --> 00:49:39.490
But saying no to people is actually gives me the clarity of who my buyer is.
811
00:49:39.770 --> 00:49:45.931
And I'm able to reach the benefit of the benefit because I've more narrowly defined who that person is.
812
00:49:46.251 --> 00:49:48.432
Out of curiosity in your business.
813
00:49:49.204 --> 00:49:52.866
When you tell people no, do you have a problem with them just going and signing up anyway?
814
00:49:52.886 --> 00:49:54.847
So we used to have this problem at Service Alpine.
815
00:49:54.867 --> 00:49:55.968
We're like, we're not for you.
816
00:49:56.168 --> 00:49:57.369
You're going to be disappointed here.
817
00:49:57.389 --> 00:49:58.750
You're going to feel like we let you down here.
818
00:49:58.770 --> 00:49:59.670
We didn't build this for you.
819
00:49:59.930 --> 00:50:02.092
And it's almost like nobody's ever told me no.
820
00:50:02.152 --> 00:50:02.932
I don't trust anybody.
821
00:50:02.952 --> 00:50:04.713
But now you guys told me no.
822
00:50:04.733 --> 00:50:05.494
There's this level of trust.
823
00:50:05.514 --> 00:50:07.015
And then they go sign up and we're like,
824
00:50:07.715 --> 00:50:08.836
Now they're just going to be unhappy.
825
00:50:08.856 --> 00:50:10.517
Do you ever, have you had that experience yet?
826
00:50:10.657 --> 00:50:12.839
It was a meaningful enough thing that I was aware of it.
827
00:50:12.959 --> 00:50:25.528
Yeah, I think, I think in part, the reason it happens is because we built trust, both you and I on our social media and like the brand side to where they trust you so much that when you say that it just is immediately like, I will buy this just almost as a port.
828
00:50:25.888 --> 00:50:31.672
So what I ended up doing, cause it was happening too much and it really actually hurt us because the wrong people got inside.
829
00:50:31.692 --> 00:50:31.792
Yeah.
830
00:50:31.992 --> 00:50:32.893
And they get to onboarding.
831
00:50:32.913 --> 00:50:33.953
It's just, it creates a difference.
832
00:50:34.093 --> 00:50:35.994
And like, I told you, but like, no, there's still it.
833
00:50:36.014 --> 00:50:39.836
So, so now it's a function of, I will actually tell them to go use such and such product.
834
00:50:40.237 --> 00:50:44.239
And so I got pretty prescriptive, like, hey, use this product until we're ready.
835
00:50:44.339 --> 00:50:46.800
And like in two years, maybe we'll be ready.
836
00:50:46.860 --> 00:50:51.643
Like I had to get more prescriptive with not just saying, don't use this, but like, don't use us and use this instead.
837
00:50:52.903 --> 00:50:54.864
That seemed to be a little bit more beneficial.
838
00:50:55.505 --> 00:50:55.705
Yeah.
839
00:50:56.105 --> 00:51:01.909
Long-term, to your point, by allowing people in, it's kind of like the credit card processing fees and the fuel charge.
840
00:51:02.149 --> 00:51:03.510
It's another nick on the brand.
841
00:51:03.911 --> 00:51:04.211
It is.
842
00:51:04.631 --> 00:51:05.552
And it's hard on the team.
843
00:51:05.932 --> 00:51:06.953
Yeah.
844
00:51:07.093 --> 00:51:07.513
Yeah.
845
00:51:08.274 --> 00:51:08.354
No.
846
00:51:08.414 --> 00:51:09.114
Really hard on the team.
847
00:51:09.154 --> 00:51:10.135
Totally.
848
00:51:10.155 --> 00:51:10.415
100%.
849
00:51:10.836 --> 00:51:11.136
Okay.
850
00:51:11.216 --> 00:51:11.716
I want to pivot.
851
00:51:11.736 --> 00:51:12.777
A couple topics.
852
00:51:12.857 --> 00:51:17.741
A little more, as I like to call it, like a higher elevation or a higher altitude.
853
00:51:17.761 --> 00:51:18.081
Yeah.
854
00:51:18.501 --> 00:51:24.222
Um, these ones I don't have as much experience in, so I'm much more looking for how you have addressed it.
855
00:51:24.702 --> 00:51:26.803
And then there's some of these elements that I'm planning for.
856
00:51:26.883 --> 00:51:40.125
So for example, when you sell a business, how to plan for the taxes and you've done a couple of acquisitions and, and, and sales, I am thinking down the road when our venture goals do IPO.
857
00:51:40.165 --> 00:51:46.707
And so I've done some stuff like QSBS, which is qualified small business stock and, you know, switching to a C corp and some other elements.
858
00:51:46.727 --> 00:51:47.487
That's going to be on the list.
859
00:51:47.507 --> 00:51:47.607
Yeah.
860
00:51:47.647 --> 00:51:47.867
Yeah.
861
00:51:47.887 --> 00:51:48.087
Okay.
862
00:51:48.107 --> 00:51:48.267
Okay.
863
00:51:48.447 --> 00:51:55.949
So let me pass it over to you and then I'll, and I'll probably get some ideas and also think about some of the things that I'm doing right now to kind of plan for what's to come.
864
00:51:56.629 --> 00:51:56.829
Okay.
865
00:51:57.289 --> 00:52:00.370
So on this one, I made myself a little bit of a list.
866
00:52:00.630 --> 00:52:06.131
I didn't want to leave any, well, I mean, there's, there's lots of things you could do, but I wanted to make sure I didn't get off target here and kind of focus.
867
00:52:06.151 --> 00:52:08.851
So I've got my, I made myself a sheet of paper here.
868
00:52:08.871 --> 00:52:13.412
I'm looking at, and the reason I tell you that is if it spawns any ideas, Mike, chime in.
869
00:52:13.572 --> 00:52:15.093
Like if you, if it gives you any thoughts.
870
00:52:15.153 --> 00:52:15.513
So yeah,
871
00:52:17.514 --> 00:52:18.314
The QSBS.
872
00:52:18.915 --> 00:52:20.856
Oh, how I wish I had known about this one.
873
00:52:22.437 --> 00:52:32.885
So Service Autopilot was when we sold that business, which was the most is the most meaningful thing I've done, just from a pure economic standpoint.
874
00:52:33.545 --> 00:52:36.227
That was a S Corp, basically.
875
00:52:36.507 --> 00:52:36.727
Yeah.
876
00:52:37.188 --> 00:52:39.629
And I didn't even know about this QSBS thing.
877
00:52:39.790 --> 00:52:42.331
And so I don't think we need to spend a lot of time going into it.
878
00:52:42.351 --> 00:52:42.552
But it's
879
00:52:44.954 --> 00:52:47.877
Qualified small business stock maybe?
880
00:52:48.057 --> 00:52:48.497
Okay, stock.
881
00:52:48.557 --> 00:52:48.818
Okay.
882
00:52:49.378 --> 00:52:57.466
And this brief summary, and maybe you can chime in a little bit on this one since you probably know more about it than I, since I didn't do it.
883
00:52:57.886 --> 00:52:59.227
You could basically...
884
00:53:00.343 --> 00:53:01.463
not too difficult.
885
00:53:01.663 --> 00:53:06.644
It's pretty easy to save yourself 10 million, not $10 million, but not pay tax on your first $10 million.
886
00:53:07.125 --> 00:53:15.507
There's also this other concept around basis where depending on what your basis is, I think you get like 10 times your basis or something like that.
887
00:53:15.547 --> 00:53:23.889
So there's these unique strategies where you can already have a business, you can roll it in to a C corp, and that becomes your basis.
888
00:53:24.369 --> 00:53:26.189
I'm not educated enough to talk on this one.
889
00:53:26.269 --> 00:53:27.089
I will just tell you
890
00:53:30.650 --> 00:53:34.373
Do you want to do a better job than me at explaining that?
891
00:53:34.533 --> 00:53:34.814
Yeah.
892
00:53:34.834 --> 00:53:39.197
So the cleanest way is to make sure you've held the stock in the C Corp for five years.
893
00:53:39.257 --> 00:53:39.457
Yeah.
894
00:53:39.838 --> 00:53:40.038
Right?
895
00:53:40.518 --> 00:53:47.724
There's some other loopholes, but the last thing you want to do is get on the IRS's bad list right after a huge acquisition.
896
00:53:48.184 --> 00:53:55.971
And so we actually, when we went to a C Corp and then 5% of the company we allowed owners of Augusta to participate in.
897
00:53:56.431 --> 00:54:00.012
When we did that, they got what's called SAFE, so standard agreement for future equity.
898
00:54:00.233 --> 00:54:06.315
But what I'm really happy about is it forced me to get really diligent about like, where's the equity?
899
00:54:07.015 --> 00:54:08.256
How am I planning for this?
900
00:54:08.776 --> 00:54:10.617
Making sure is QSBS eligible?
901
00:54:10.797 --> 00:54:21.201
So you actually have to document for those five years that you are eligible every stage because if the amount of assets that you have is over 50 million, it's no longer qualified.
902
00:54:22.041 --> 00:54:30.651
And so you can't be like a $300 million company with $60 million worth of assets and be like, oh, I want to be QSBS eligible and in five years sell the company.
903
00:54:30.811 --> 00:54:38.060
You have to declare it and it has to be eligible before $50 million in assets, which is not revenue, which is not valuation, it's assets.
904
00:54:38.340 --> 00:54:40.442
So you could still have $100 million in revenue.
905
00:54:40.743 --> 00:54:42.845
You could still have a $200 million valuation.
906
00:54:42.865 --> 00:54:47.309
But if your assets are under $50 million, then you're QSBS eligible.
907
00:54:47.329 --> 00:54:56.739
And the cleanest way is to, first off, BSC Corp, have five years where it's proven in writing has been documented that you are QSBS eligible.
908
00:54:57.139 --> 00:54:57.480
And then...
909
00:54:58.761 --> 00:55:04.427
What's really crazy, so this most recent big, beautiful bill, the thing they slid in here is moving this from $5 million to $10 million.
910
00:55:04.747 --> 00:55:09.392
But also, you can give the equity to different people in your family.
911
00:55:10.072 --> 00:55:15.217
And so the ability to get 1% here, 2% here, 1% here across your family.
912
00:55:15.478 --> 00:55:19.662
Because obviously, if you have a liquidation, there's an element of, hey, I want to buy my family.
913
00:55:19.782 --> 00:55:23.445
parents a house or I want to be able to upgrade my lifestyle to some degree.
914
00:55:23.966 --> 00:55:32.594
And the ability to be able to do that tax free is a great advantage, but it takes a lot of planning to know five years before an acquisition that you're going to do it.
915
00:55:32.754 --> 00:55:36.478
Because I would imagine for you with Service Hub, like five years before you weren't thinking about selling the thing.
916
00:55:36.938 --> 00:55:38.600
We weren't thinking about a year and a half before.
917
00:55:38.960 --> 00:55:40.542
We weren't planning to sell the business.
918
00:55:40.562 --> 00:55:42.323
Like someday we thought we might, but...
919
00:55:43.062 --> 00:55:43.763
We weren't planning to.
920
00:55:43.823 --> 00:55:49.368
So yes, this went, what we didn't go through any planning ahead of time because this wasn't on our radar.
921
00:55:49.448 --> 00:55:57.475
So had we, we would have probably encountered this and I probably had heard it before, but it didn't stick because I was like, I'm not, this isn't something I'm worried about.
922
00:55:57.535 --> 00:55:57.695
Yeah.
923
00:55:58.136 --> 00:56:01.038
So when you converted to a C-Corp, what were you before?
924
00:56:01.459 --> 00:56:05.863
S-Corp, three S-Corp actually, because the three entities and now that's wrapped up in the C-Corp.
925
00:56:06.198 --> 00:56:11.179
All right, so let's say you convert to a C-Corp and you never sell the business or it's way out in the future.
926
00:56:11.399 --> 00:56:13.860
What are the negatives in your mind of being a C-Corp?
927
00:56:14.100 --> 00:56:15.100
Double taxation.
928
00:56:15.160 --> 00:56:22.442
Like you only go C-Corp if you're raising money, you have a bunch of investors, or if you plan to go public.
929
00:56:22.462 --> 00:56:27.123
But like there's not a lot of advantage of a C-Corp in the United States at least.
930
00:56:27.963 --> 00:56:29.384
Like the S Corp is so awesome.
931
00:56:29.544 --> 00:56:31.925
The fact that like profit can just flow directly to you.
932
00:56:31.945 --> 00:56:33.226
There's no money coming between.
933
00:56:33.246 --> 00:56:37.268
Like I had to start taking a salary from the C Corp for the first time ever this year.
934
00:56:37.608 --> 00:56:41.430
Cause like it was foreign to me, like distributions in the past from an S Corp, just move it over.
935
00:56:41.490 --> 00:56:43.651
And like, however much I want to take this year, we're good to go.
936
00:56:43.691 --> 00:56:53.016
But like, um, by having investors, obviously where money's not flowing to me, but more importantly, like having a W2 and all these other aspects was a very, very interesting.
937
00:56:53.657 --> 00:56:55.758
Uh, but there's not a lot of advantages to,
938
00:56:56.478 --> 00:56:59.060
to a C Corp if you're not doing those few things.
939
00:56:59.620 --> 00:56:59.840
Yeah.
940
00:57:00.161 --> 00:57:04.083
And I think that would have probably been where my mindset was because we didn't think we'd sell the business.
941
00:57:04.123 --> 00:57:05.064
It's kind of the same with CityTurf.
942
00:57:05.104 --> 00:57:08.326
CityTurf's an S Corp. We're not really thinking about selling the business.
943
00:57:08.927 --> 00:57:10.988
I'm sure gonna kick myself if we change our mind.
944
00:57:11.729 --> 00:57:14.190
You know, and you gotta decide five years in advance.
945
00:57:14.331 --> 00:57:16.772
And so that's a pretty long time in advance.
946
00:57:16.832 --> 00:57:20.635
But if you're building to sell, then I think this is, it made my list.
947
00:57:20.675 --> 00:57:24.237
And so I felt that if you're building to sell,
948
00:57:25.274 --> 00:57:27.376
then this has to be on the list.
949
00:57:27.537 --> 00:57:28.438
There are some loopholes.
950
00:57:28.918 --> 00:57:29.719
There are some loopholes.
951
00:57:29.739 --> 00:57:39.470
Like, for example, maybe I should say this off-break, but you could potentially have IP held in a C-corp, for example, and then pay fees across.
952
00:57:39.510 --> 00:57:41.132
There are some loopholes that people have played.
953
00:57:41.152 --> 00:57:41.352
Oh, yeah.
954
00:57:42.073 --> 00:57:51.276
But like I much more was like we have to do this really clean because I do not want it to be like I've told because like you have to have stock certificates to the family members.
955
00:57:51.456 --> 00:57:53.157
And so I'm like, hey, here's what's going to happen.
956
00:57:53.337 --> 00:57:54.617
You're not getting all the money, by the way.
957
00:57:54.637 --> 00:57:56.878
A big chunk of this is going to other people.
958
00:57:58.098 --> 00:58:04.700
But to be able to get like, say, 30 or 40 million stock free or tax free would be a huge advantage.
959
00:58:05.261 --> 00:58:09.362
But I think for 95 percent of people staying in S-Corp is the right move.
960
00:58:09.762 --> 00:58:11.403
Is it tax-free at the state level as well?
961
00:58:11.784 --> 00:58:12.524
Just federal, right?
962
00:58:12.744 --> 00:58:13.365
It is state.
963
00:58:13.465 --> 00:58:14.166
It is state as well.
964
00:58:14.386 --> 00:58:15.126
Yeah.
965
00:58:15.146 --> 00:58:18.549
It doesn't affect me as much, just depending on where everyone lives.
966
00:58:18.909 --> 00:58:20.651
But it is free of state as well.
967
00:58:21.091 --> 00:58:22.672
Which gets me to my point number two.
968
00:58:23.313 --> 00:58:23.493
Okay.
969
00:58:23.513 --> 00:58:26.135
If you want to save a lot of taxes, you need to be in the right state.
970
00:58:26.155 --> 00:58:26.895
Dude, okay.
971
00:58:26.936 --> 00:58:27.336
All right.
972
00:58:27.376 --> 00:58:29.618
So I just had this conversation with Brad.
973
00:58:29.638 --> 00:58:30.698
He's our in-house tax guy.
974
00:58:30.799 --> 00:58:31.239
Okay.
975
00:58:31.379 --> 00:58:33.621
And then I had the conversation last week with Brianna.
976
00:58:33.661 --> 00:58:34.842
And I said, Brianna, listen.
977
00:58:36.183 --> 00:58:44.049
Texas is looking really good from a C-Corp perspective, especially because like in Washington, we don't have income tax all up to a million dollars.
978
00:58:44.249 --> 00:58:46.530
So I just made sure like, hey, I'm not going to make a million dollars on paper.
979
00:58:46.570 --> 00:58:46.891
We're good.
980
00:58:47.351 --> 00:58:48.912
But you will if you had an event.
981
00:58:49.032 --> 00:58:49.332
True.
982
00:58:49.813 --> 00:58:50.753
And capital gains.
983
00:58:51.314 --> 00:58:55.797
But the thing is, we have excise tax and that's on top line revenue, about one, one and a half percent.
984
00:58:56.458 --> 00:59:01.882
And so we started running the math like, hey, how big does the business have to be for us to spend six months and one day in Texas?
985
00:59:02.752 --> 00:59:02.912
Yeah.
986
00:59:03.012 --> 00:59:04.012
You know, we like Dallas.
987
00:59:04.032 --> 00:59:04.872
I'm not going to lie.
988
00:59:05.212 --> 00:59:06.093
Texas is a great market.
989
00:59:06.113 --> 00:59:08.733
I thought I was going to leave this place and I'm here all these years later.
990
00:59:08.833 --> 00:59:10.053
Man, the food is good.
991
00:59:10.133 --> 00:59:11.193
You got good venues.
992
00:59:11.453 --> 00:59:12.274
Airports insane.
993
00:59:12.654 --> 00:59:13.914
Oh, you got two of them.
994
00:59:14.234 --> 00:59:15.214
Anyways.
995
00:59:15.674 --> 00:59:16.954
But yes, moving to the right place.
996
00:59:16.974 --> 00:59:25.516
So assuming that you can't pick up and leave your lawn care business from state to state, something like software, definitely moving would be certainly an opportunity.
997
00:59:25.676 --> 00:59:27.996
I'll add one thing, Jonathan, because I've been researching this a bunch.
998
00:59:28.076 --> 00:59:31.997
It's like for those people that could potentially move, they're maybe not in home services or a local business.
999
00:59:32.757 --> 00:59:38.265
What's interesting is the IRS is pretty lenient on where you incorporate.
1000
00:59:39.788 --> 00:59:44.433
And basically what they look at is strategy and decision-making coming from that place.
1001
00:59:45.153 --> 00:59:51.599
And so my biggest concern is, okay, if I'm building a headquarter building here and having 100 employees inside this office, is that going to be a problem for me?
1002
00:59:52.060 --> 00:59:57.325
And it's like, no, if you move there and you have your leadership team or you're there, you're making decisions from that place.
1003
00:59:58.486 --> 01:00:02.770
From what I can tell in terms of case records and looking through where people have gotten in trouble...
1004
01:00:03.899 --> 01:00:14.942
I'm in the clear, which is kind of crazy to me that you could literally move, have most of your operations being, but because strategically and decision-making in one place, you could still incorporate in that state.
1005
01:00:16.002 --> 01:00:16.203
Yep.
1006
01:00:16.883 --> 01:00:17.103
Crazy.
1007
01:00:17.123 --> 01:00:17.243
Yep.
1008
01:00:19.624 --> 01:00:23.225
So you might see us one day in Dallas for six months.
1009
01:00:23.245 --> 01:00:23.785
There you go.
1010
01:00:23.805 --> 01:00:24.205
I don't know.
1011
01:00:25.040 --> 01:00:27.021
I've got so many friends because of Service Autopilot.
1012
01:00:27.041 --> 01:00:29.903
We used to throw events here in Service Autopilot in Dallas.
1013
01:00:29.943 --> 01:00:34.185
And so I've had so many friends that have told me they might end up in Dallas someday.
1014
01:00:34.725 --> 01:00:36.366
I've heard really good things.
1015
01:00:36.386 --> 01:00:37.727
Not the summer though.
1016
01:00:37.807 --> 01:00:38.427
Not the summer.
1017
01:00:38.467 --> 01:00:39.108
Can't handle that.
1018
01:00:39.208 --> 01:00:40.108
Yeah, it is.
1019
01:00:40.428 --> 01:00:40.709
I agree.
1020
01:00:40.769 --> 01:00:41.609
I guess I'm used to it.
1021
01:00:41.629 --> 01:00:47.192
But yeah, in my perfect world, we would spend three months of the year, the three summer months elsewhere.
1022
01:00:47.472 --> 01:00:49.914
July, August, and September are the three months.
1023
01:00:49.934 --> 01:00:50.634
Too much, too much.
1024
01:00:50.654 --> 01:00:52.075
They're the ones you don't want to be here, but...
1025
01:00:52.555 --> 01:00:53.939
Okay, let's go back.
1026
01:00:54.059 --> 01:00:54.660
We've moved.
1027
01:00:54.720 --> 01:00:55.963
We moved to Texas and Dallas.
1028
01:00:55.983 --> 01:00:57.046
That's the second option.
1029
01:00:57.066 --> 01:00:57.346
What else?
1030
01:00:57.968 --> 01:00:58.429
Yeah, so...
1031
01:00:59.424 --> 01:01:04.006
This isn't really about saving tax, but I felt since we were talking about selling, I had to interject this.
1032
01:01:04.246 --> 01:01:12.831
If you were to sell your business, and I won't go into much detail, Mike, unless you want to ask me, I would tell you you have to run what's called a process.
1033
01:01:13.571 --> 01:01:22.636
So what's going to happen is you're going to get a lot of people that might call you and express interest in your business, and they're going to want to talk to you about maybe buying it.
1034
01:01:23.556 --> 01:01:25.678
And the offers are going to sound great.
1035
01:01:25.698 --> 01:01:27.740
Maybe you talk to a couple people and the offers sound great.
1036
01:01:28.160 --> 01:01:31.523
But there's still 100 more buyers out there, potential buyers.
1037
01:01:31.643 --> 01:01:42.071
And what happens is when you create competition or you even tell everybody that you're even up for sale, you then create a bunch of competition, which creates a bidding process.
1038
01:01:42.792 --> 01:01:45.935
And that bidding process will raise the value of your organization.
1039
01:01:45.955 --> 01:01:46.355
Right.
1040
01:01:47.332 --> 01:01:54.937
You cannot convince me that this is not the, I will, there is literally a less than zero chance I would sell a company without running a process.
1041
01:01:55.798 --> 01:02:03.123
And so you might say, well, like when I sold the service auto pilot business, we paid millions and millions of dollars to the investment bank.
1042
01:02:04.022 --> 01:02:05.183
I made more than that.
1043
01:02:05.403 --> 01:02:20.972
I mean, so my argument is, worst case, if you run a process and you use a bank or a broker to sell your company, you will at least get back all the money for the advisor, the broker, the whatever you want to call them.
1044
01:02:21.672 --> 01:02:23.714
And they will have done a lot of the work for you.
1045
01:02:23.794 --> 01:02:25.736
They will have de-stressed the process.
1046
01:02:26.176 --> 01:02:31.060
They will, if you pick the right one, they will be able to introduce you to the right tax attorneys.
1047
01:02:31.100 --> 01:02:33.002
They will be able to help you with so many things.
1048
01:02:33.022 --> 01:02:38.406
They might even, if the good ones will even be able to say, don't do a deal with them, do a deal with them.
1049
01:02:38.446 --> 01:02:41.909
Like they'll be able to give you a lot more than just helping you facilitate the transaction.
1050
01:02:42.190 --> 01:02:43.971
There's a tremendous amount of advice that comes with this.
1051
01:02:43.991 --> 01:02:48.115
So this doesn't necessarily say you, it actually, it does save you tax.
1052
01:02:48.135 --> 01:02:48.235
Yeah.
1053
01:02:48.595 --> 01:02:50.056
I'll say how in a moment.
1054
01:02:50.316 --> 01:02:54.358
But this is more about just getting the maximum value for your company.
1055
01:02:54.778 --> 01:02:58.560
Just remember when the day comes, you want to run a process and research that.
1056
01:02:59.440 --> 01:03:03.222
I hinted at this idea of they can also save you money.
1057
01:03:03.742 --> 01:03:06.604
So when you go to sell your business, like how are, how's your business?
1058
01:03:07.044 --> 01:03:11.227
Like assets are taxed in one way, intellectual property stock.
1059
01:03:11.247 --> 01:03:13.088
They're all taxed in the different ways.
1060
01:03:13.468 --> 01:03:18.492
And so how you position the sell is really critical to your long-term tax bill.
1061
01:03:18.572 --> 01:03:19.833
I'm not going to do a deep dive on that.
1062
01:03:19.853 --> 01:03:23.035
In fact, I don't even think I could possibly recite all the details to you.
1063
01:03:23.315 --> 01:03:24.716
I put most of that out of my brain.
1064
01:03:24.736 --> 01:03:25.116
It was painful.
1065
01:03:25.176 --> 01:03:29.199
I think the basic is like on that one is like usually the buyer wants it in assets, right?
1066
01:03:29.659 --> 01:03:29.859
Yeah.
1067
01:03:30.079 --> 01:03:30.680
You want it in stock.
1068
01:03:30.700 --> 01:03:31.680
And you don't want it in assets.
1069
01:03:31.701 --> 01:03:34.342
Because they want to be able to amortize or depreciate it.
1070
01:03:34.502 --> 01:03:36.644
You don't have to pay taxes on.
1071
01:03:37.084 --> 01:03:37.545
Cool.
1072
01:03:37.585 --> 01:03:38.225
That's exactly right.
1073
01:03:38.245 --> 01:03:40.487
I think assets become ordinary income, if I remember.
1074
01:03:40.787 --> 01:03:48.913
And so that's why, again, if you don't create a competitive process, you have less negotiating power here.
1075
01:03:49.493 --> 01:03:55.915
And so one, it might drive a lower valuation for your company, but it could also drive lesser terms.
1076
01:03:56.055 --> 01:03:59.916
And terms are things like the classification we just talked about.
1077
01:04:00.076 --> 01:04:01.436
Terms could be your earn out.
1078
01:04:01.756 --> 01:04:06.417
Like, do you get paid all the money now or do you get paid in tranches over time for hitting goals?
1079
01:04:07.878 --> 01:04:09.918
How long is your non-compete?
1080
01:04:10.438 --> 01:04:14.779
There are so many details that have to get negotiated in these transactions.
1081
01:04:15.360 --> 01:04:16.760
Creating a competitive process
1082
01:04:18.095 --> 01:04:21.400
puts you in a little bit more of the driver's seat.
1083
01:04:21.640 --> 01:04:29.673
And so I would tell you, it both benefits you in the total valuation and also benefits you in terms of what the tax bill might be after the fact.
1084
01:04:29.992 --> 01:04:39.435
And I think to just come into the negotiation table, especially if you're dealing with a sophisticated buyer that buys a lot of businesses, private equity, et cetera, they have done this dozens, if not hundreds of times.
1085
01:04:39.835 --> 01:04:48.998
And if this is your one shot, the fact that you would think that you could do it on your own without like an investment banker or at least some advising is crazy.
1086
01:04:49.038 --> 01:04:57.461
And this one thing that I've always, whether it be yourself or other people that I look up to, is they always rely on, and they're never afraid to pay money for advice.
1087
01:04:58.081 --> 01:05:17.983
and this is probably getting ahead of ourselves, but like even, I know you mentioned recently in one of your videos, how like you use, I think Goldman Sachs is like, that's hundreds of thousands of dollars, but what it unlocks, and I think what so many people, including myself that we're, you know, we raise with not a lot, we have this mentality, like I'm not gonna pay a couple hundred thousand dollars for someone to push a couple buttons for me.
1088
01:05:18.583 --> 01:05:26.787
But it's the relationships and the things that they, because they have done it a thousand times before, the doors they can open up for you that are worth far more than their fee.
1089
01:05:27.187 --> 01:05:42.954
And I think to your point, like around creating competition also is somewhat linked to getting investment bankers, people that have been at this kind of transaction before that will prevent you from walking into a trap where, oh, you know, 50% of it doesn't earn out and you got to be around for four years and you got to hit these targets.
1090
01:05:43.294 --> 01:05:45.935
And all of a sudden you've got these very, very golden handcuffs.
1091
01:05:46.360 --> 01:05:46.600
Yeah.
1092
01:05:47.261 --> 01:05:51.063
And I think it's important to know, like you, Mike, I didn't grow up believing these things.
1093
01:05:51.903 --> 01:05:55.005
This is a process where I've come to believe these things.
1094
01:05:55.085 --> 01:05:59.168
And I look back and say, man, I wish I had believed this earlier.
1095
01:05:59.188 --> 01:06:02.770
I was a little more in the earlier days of business.
1096
01:06:02.850 --> 01:06:06.032
And as a younger entrepreneur, younger person, I was very careful.
1097
01:06:06.052 --> 01:06:07.613
I was like nickel and diming things.
1098
01:06:07.873 --> 01:06:12.176
I mean, I was saving every penny kind of guy being really careful.
1099
01:06:12.956 --> 01:06:14.357
And that slowed me down.
1100
01:06:14.838 --> 01:06:15.058
But...
1101
01:06:15.638 --> 01:06:17.039
you know, there's pros and cons.
1102
01:06:17.059 --> 01:06:22.943
Like you can go too far the other stream, but I totally believe in paying experts to just buy speed and give you the answer.
1103
01:06:22.963 --> 01:06:24.124
It doesn't always work out.
1104
01:06:24.164 --> 01:06:25.044
You get bad advice.
1105
01:06:25.565 --> 01:06:30.248
Not everybody's legit, but on the whole, you win in a massive way going that route.
1106
01:06:30.788 --> 01:06:31.508
How do you navigate that?
1107
01:06:31.528 --> 01:06:31.869
Because like...
1108
01:06:32.716 --> 01:06:36.838
I've always thought in one regard, it's like, oh, people are trying to be cheap or they're trying to save money.
1109
01:06:37.258 --> 01:06:45.462
But then sometimes I think it's like, it's more of a matter of pride because if I use anyone else, I will not be able to say I did it myself.
1110
01:06:45.902 --> 01:06:55.967
Like if I take someone else's advice, if I get someone else's course, if I use an agency even, for example, or if I get an advisor to help me sell my business, I'm not able to say I did this, I'm not self-made.
1111
01:06:56.507 --> 01:06:57.447
And it's almost like this pride.
1112
01:06:57.467 --> 01:06:57.967
I just wanna win.
1113
01:06:58.047 --> 01:06:58.828
Yeah, exactly.
1114
01:06:59.388 --> 01:07:02.989
I've got, there's like nothing in my life I can say it was just me.
1115
01:07:03.009 --> 01:07:07.411
Like, yeah, I got to grow up in what became Dallas, Texas.
1116
01:07:07.491 --> 01:07:11.592
Like we grew up in, in, on, in the country, like full on country.
1117
01:07:12.172 --> 01:07:16.254
I could have to ride 10 miles on my bicycle to see my friends like full on country.
1118
01:07:16.574 --> 01:07:21.935
And now my parents have a Tom thumb across the street, church around them, a car apartment complex.
1119
01:07:21.955 --> 01:07:26.977
Like my dad just, like, they had, he, when my dad used to race bikes for the U S racing team, bicycles, right.
1120
01:07:27.117 --> 01:07:31.559
When he was leaving California, he was either going to go to Wichita, Kansas, or he's going to go to Dallas.
1121
01:07:31.599 --> 01:07:33.260
And I thank my dad.
1122
01:07:33.320 --> 01:07:35.201
Thank you, dad, so much.
1123
01:07:36.481 --> 01:07:40.363
And so had dad gone to Wichita, I don't think any of us would be talking to each other.
1124
01:07:40.663 --> 01:07:42.424
And so none of us are self-made.
1125
01:07:42.484 --> 01:07:44.945
My dad taught me so many things.
1126
01:07:44.965 --> 01:07:47.586
He helped me make my first flyer for my lawn care business.
1127
01:07:47.626 --> 01:07:51.088
My mom drove me in the minivan and dropped me off in town.
1128
01:07:51.728 --> 01:07:53.309
Like none of us are self-made.
1129
01:07:53.449 --> 01:08:01.593
And so I just, we all, like we all should take every advantage we could possibly get because millions of people have advantages and do nothing with them.
1130
01:08:02.254 --> 01:08:02.634
Millions.
1131
01:08:03.034 --> 01:08:03.915
They have so many advantages.
1132
01:08:04.055 --> 01:08:06.416
It's not about did I get an advantage or not?
1133
01:08:06.476 --> 01:08:09.437
It's about did I take the advantage and did I do more?
1134
01:08:09.578 --> 01:08:12.659
And so like none of us are purely self-made.
1135
01:08:12.679 --> 01:08:13.400
That's nonsense.
1136
01:08:13.420 --> 01:08:13.800
Yeah.
1137
01:08:14.440 --> 01:08:16.302
And so I, I'm sorry, got me going there.
1138
01:08:16.342 --> 01:08:17.323
I just, it doesn't matter.
1139
01:08:17.463 --> 01:08:23.868
So creating competition, using, using advisors, investment bankers to be able to go faster.
1140
01:08:24.409 --> 01:08:25.630
Is there another one you want to talk?
1141
01:08:25.650 --> 01:08:26.811
Oh, I got, I got several.
1142
01:08:26.831 --> 01:08:26.991
Okay.
1143
01:08:27.011 --> 01:08:27.171
Okay.
1144
01:08:27.311 --> 01:08:28.032
Okay.
1145
01:08:28.572 --> 01:08:33.417
So another one would be, and this is again, not quite tax savings, but this is a little bit of a learning.
1146
01:08:34.718 --> 01:08:38.661
I would suggest for most people you go ahead and hire a wealth advisor.
1147
01:08:38.681 --> 01:08:38.881
So if,
1148
01:08:39.948 --> 01:08:42.529
And let me tell you where this knowledge is, where this is coming from.
1149
01:08:42.909 --> 01:08:45.750
So I started investing in the stock market when I was 20.
1150
01:08:46.351 --> 01:08:48.051
My parents didn't invest at all.
1151
01:08:48.191 --> 01:08:49.152
Like they didn't do this.
1152
01:08:49.752 --> 01:08:53.894
My first, I got my first job, my only job at a software company was 19.
1153
01:08:54.014 --> 01:08:55.494
This is an interesting story.
1154
01:08:56.095 --> 01:08:56.835
My boss...
1155
01:08:57.965 --> 01:09:03.147
what eventually became the COO of Service Autopilot when we started the business.
1156
01:09:03.688 --> 01:09:05.308
He retired two years.
1157
01:09:05.448 --> 01:09:06.629
He was like retired at 40.
1158
01:09:06.689 --> 01:09:07.910
He was very successful.
1159
01:09:08.650 --> 01:09:11.111
And they lived in Vail and didn't work for 13 years.
1160
01:09:11.151 --> 01:09:12.211
We started Service Autopilot.
1161
01:09:12.292 --> 01:09:14.072
He came and worked with us.
1162
01:09:15.053 --> 01:09:18.414
And why I tell you this is he got me when I was a 20-year-old kid.
1163
01:09:18.434 --> 01:09:20.255
He said, hey, you should use Vanguard.
1164
01:09:20.835 --> 01:09:21.556
He was an investor.
1165
01:09:22.448 --> 01:09:24.230
And I started using Vanguard.
1166
01:09:24.730 --> 01:09:26.812
I liked finance already, but I didn't know how to do it.
1167
01:09:26.852 --> 01:09:28.053
Nobody had ever shown me how to do it.
1168
01:09:28.073 --> 01:09:28.894
So I started using Vanguard.
1169
01:09:28.914 --> 01:09:31.596
Then I started trading stocks on E-Trade and I started doing that whole deal.
1170
01:09:31.896 --> 01:09:34.118
So I tell you all this to say, I love finance.
1171
01:09:34.279 --> 01:09:35.640
I've been doing it since I was 20.
1172
01:09:35.920 --> 01:09:39.924
There were absolute times in my career where I had to cash out the money for my businesses and build.
1173
01:09:40.284 --> 01:09:43.206
Things happen along the way, but then I'd get back to investing as soon as I could.
1174
01:09:44.107 --> 01:09:46.069
And that's always been my wiring.
1175
01:09:46.109 --> 01:09:50.952
I used Vanguard, had a lot of money at Vanguard, I use Wealthfront, I've done all these different things.
1176
01:09:51.733 --> 01:09:56.657
And I actually didn't start using Goldman Sachs till I sold the business, the service autopilot business.
1177
01:09:56.757 --> 01:09:59.359
And I've been negative on financial advisors, actually.
1178
01:10:00.474 --> 01:10:02.195
I'm a big, big fan of Vanguard.
1179
01:10:02.635 --> 01:10:05.877
And I had a lot of money there where I qualified for the private client group at Vanguard.
1180
01:10:05.917 --> 01:10:08.419
And I still feel...
1181
01:10:09.119 --> 01:10:11.721
So I wanted to say that and that's my belief.
1182
01:10:11.901 --> 01:10:17.624
Yeah, I still believe it's generally worth the money to use a financial advisor if you can get a high-level one.
1183
01:10:18.065 --> 01:10:19.766
High-level is very important.
1184
01:10:20.026 --> 01:10:21.547
Like there's a million financial advisors.
1185
01:10:21.907 --> 01:10:23.288
I am negative on the most of them.
1186
01:10:23.588 --> 01:10:24.528
You got to get the right ones.
1187
01:10:24.889 --> 01:10:25.709
Now, here's the reason.
1188
01:10:26.530 --> 01:10:26.950
Because...
1189
01:10:28.167 --> 01:10:42.351
building a business and being an operator and protecting your asset financially by having reserves and just all the decisions you make are very, very different than having a wealth creation event and now having a pile of money you've got to invest.
1190
01:10:42.791 --> 01:10:44.092
The psychology is very different.
1191
01:10:44.132 --> 01:10:49.714
Fortunately, I already was comfortable with this, but I've learned a lot even since then.
1192
01:10:50.794 --> 01:10:54.195
And so I would tell you that whenever you have a deal, you know,
1193
01:10:54.455 --> 01:10:58.578
I have seen so many people lose money, like so many people.
1194
01:10:59.219 --> 01:11:02.501
So you pay your tax bill and then you invest in other people's companies.
1195
01:11:02.541 --> 01:11:03.802
You do angel investing.
1196
01:11:04.083 --> 01:11:05.704
You buy a bunch of real estate deals.
1197
01:11:05.744 --> 01:11:07.245
You put leverage on those deals.
1198
01:11:07.385 --> 01:11:08.306
I mean, you know,
1199
01:11:08.595 --> 01:11:15.037
The stories are never ending of very wealthy, very successful people who have just set money on fire.
1200
01:11:15.877 --> 01:11:21.358
And I think a wealth advisor for most people is really smart because you are being challenged.
1201
01:11:21.798 --> 01:11:24.799
At least let yourself be challenged where you have to defend your idea.
1202
01:11:25.379 --> 01:11:27.320
Just that will probably save you a ton of money.
1203
01:11:27.700 --> 01:11:31.121
So for most people, I would tell you, use a wealth advisor, okay?
1204
01:11:31.541 --> 01:11:34.822
And then the other one, and then I'll give you the rest will be tax savings.
1205
01:11:34.842 --> 01:11:35.642
The other one would be,
1206
01:11:36.462 --> 01:11:40.445
Really think about what you might, if you have the luxury of doing this, what will you do next?
1207
01:11:41.906 --> 01:11:43.387
I see a couple things happen here.
1208
01:11:44.488 --> 01:11:46.690
A lot of people have a transaction.
1209
01:11:47.792 --> 01:11:50.473
And they just go right back to doing what they did before.
1210
01:11:50.993 --> 01:11:58.074
And you have this moment in time to do any, maybe if it goes well enough financially, to do anything you want, to shift gears, to try something new, to stretch yourself.
1211
01:11:58.814 --> 01:12:00.615
Most people are just like, it's just robotic.
1212
01:12:00.675 --> 01:12:03.335
And you wake up again in five years and you're living the same life again.
1213
01:12:03.355 --> 01:12:04.095
What did you accomplish?
1214
01:12:04.115 --> 01:12:08.536
You just put a bunch of money in the bank account, but nothing else got better or changed in your life.
1215
01:12:08.916 --> 01:12:10.717
I'm not saying it needs to, it might not need to.
1216
01:12:10.737 --> 01:12:12.677
You might've loved, loved, loved what you were doing.
1217
01:12:13.277 --> 01:12:23.226
It's just that if you have a little bit of a plan going into this about what might be my next chapter, what I'm going to try, I think it will be a more wonderful experience for you.
1218
01:12:23.266 --> 01:12:31.713
Having been one of the very fewest people in the world that gets to sell something and then have maybe a moment of freedom to figure out what's next and create the ideal life.
1219
01:12:32.053 --> 01:12:33.234
It's not about tax savings.
1220
01:12:33.254 --> 01:12:34.735
That's just about pure quality of life.
1221
01:12:34.755 --> 01:12:38.318
So try to think about that and go on a journey of exploring, talking to other entrepreneurs.
1222
01:12:38.338 --> 01:12:38.859
What did you do?
1223
01:12:38.879 --> 01:12:39.439
What did you try?
1224
01:12:39.459 --> 01:12:39.559
Yeah.
1225
01:12:40.640 --> 01:12:42.082
And that was a really good one.
1226
01:12:42.162 --> 01:12:44.484
So, okay, now the rest are all be money things.
1227
01:12:46.466 --> 01:12:48.348
I put a bunch of money into what's called a DAF.
1228
01:12:49.209 --> 01:12:52.932
So what that is, it's called a donor advised fund.
1229
01:12:53.152 --> 01:12:55.154
I was using Vanguard, so I used Vanguard.
1230
01:12:55.735 --> 01:13:00.039
So as an example, it's not something we talk about, but Tiffany, I give money.
1231
01:13:00.359 --> 01:13:01.901
So if you know you're going to give away money,
1232
01:13:02.933 --> 01:13:08.118
now or in the future, you could just give all that money away today, essentially.
1233
01:13:08.478 --> 01:13:11.481
So what happens is, I'll just put a number to it.
1234
01:13:11.521 --> 01:13:17.606
Let's say you sold your business for $10 million and you give 10% of your income, hypothetically.
1235
01:13:17.866 --> 01:13:22.651
So you could right now give away $1 million today at the time you sell the business.
1236
01:13:22.671 --> 01:13:24.092
So you pay no tax on that $1 million.
1237
01:13:25.313 --> 01:13:28.362
That million dollars goes into what's called a donor advised fund.
1238
01:13:28.984 --> 01:13:32.715
So I have mine and I've refreshed it many several times.
1239
01:13:33.769 --> 01:13:37.632
And that, so that million dollars would be put into the donor advice fund.
1240
01:13:37.692 --> 01:13:38.693
You still control it.
1241
01:13:38.753 --> 01:13:40.294
You can't, you can't spend it.
1242
01:13:40.334 --> 01:13:41.295
You can never get it back.
1243
01:13:41.475 --> 01:13:43.176
It's gone, but you control it.
1244
01:13:43.196 --> 01:13:48.940
So you can invest in the stock market, REITs, fixed income, whatever you want to invest in, you can let that money grow.
1245
01:13:49.020 --> 01:13:53.664
And then you can give money away from that charity until the money's gone.
1246
01:13:53.684 --> 01:13:55.905
Is that through charity, a trust, or is that flowing?
1247
01:13:55.945 --> 01:13:56.926
How's it going into your tax return?
1248
01:13:56.946 --> 01:13:59.588
Like if there's interest or appreciation?
1249
01:14:00.140 --> 01:14:00.500
It doesn't.
1250
01:14:00.540 --> 01:14:01.941
It's like its own separate thing.
1251
01:14:02.361 --> 01:14:03.962
You literally don't own the money anymore.
1252
01:14:04.662 --> 01:14:05.102
Interesting.
1253
01:14:05.403 --> 01:14:06.123
Yeah.
1254
01:14:06.443 --> 01:14:08.984
You just Google DAF, D-A-F.
1255
01:14:09.204 --> 01:14:14.087
So if you sell the stock, though, and it's appreciated, that gain, is that taxed?
1256
01:14:14.447 --> 01:14:14.587
No.
1257
01:14:16.168 --> 01:14:16.588
Tax-free.
1258
01:14:17.329 --> 01:14:17.869
Oh, wow.
1259
01:14:17.889 --> 01:14:19.151
You can never go get it back.
1260
01:14:19.171 --> 01:14:19.271
True.
1261
01:14:19.291 --> 01:14:20.011
You can't spend it.
1262
01:14:20.291 --> 01:14:23.554
But if I put a million bucks in there, and I have a lot of money in mind.
1263
01:14:23.794 --> 01:14:23.974
Yeah.
1264
01:14:24.295 --> 01:14:27.217
And so it just keeps growing and growing.
1265
01:14:27.838 --> 01:14:29.079
And I give money out of it.
1266
01:14:29.519 --> 01:14:30.480
And it's easy to give money.
1267
01:14:30.660 --> 01:14:31.701
Everybody accepts these.
1268
01:14:31.921 --> 01:14:36.125
And you just have Vanguard wire the money from your thing to the charity.
1269
01:14:36.925 --> 01:14:38.806
And there, this is a huge thing.
1270
01:14:38.906 --> 01:14:42.988
And so if you put a million in, it could go to hypothetically 2 million.
1271
01:14:43.208 --> 01:14:44.368
That's all tax-free.
1272
01:14:44.388 --> 01:14:45.909
I mean, it doesn't come back to you in any way.
1273
01:14:46.249 --> 01:14:49.770
It's, it's like, it, there's no taxes, period.
1274
01:14:49.910 --> 01:14:51.571
The growth, it wasn't tax going in.
1275
01:14:51.731 --> 01:14:54.272
You didn't pay tax on a million bucks and all the growth is non-taxable.
1276
01:14:54.552 --> 01:14:58.894
And then you can give it like, it's almost, I've never had, is there a limit on it?
1277
01:14:59.534 --> 01:15:11.961
There's something in my, where I'm thinking like when it gets under like 20,000 bucks or 10,000 bucks, you have to pay maybe a small management fee to Vanguard or something, but it's like nothing.
1278
01:15:12.021 --> 01:15:13.582
It's like a couple hundred bucks a year or something.
1279
01:15:13.622 --> 01:15:14.242
I can't remember.
1280
01:15:14.262 --> 01:15:19.085
I haven't, I keep refreshing it, but that way you could take your tax advantage right now.
1281
01:15:19.245 --> 01:15:22.827
So if you have, if you're a person that gives money away, I can't recommend this enough.
1282
01:15:23.837 --> 01:15:28.299
Yeah, one of the things we talked about, like, owners at Augusta, last year we started what we called the Seven Figure Club.
1283
01:15:28.659 --> 01:15:37.322
And one of the first things we talked about was, like, setting up trusts for even just when you pass away, making sure that tax event is clear.
1284
01:15:37.342 --> 01:15:39.002
Like, who owns the business?
1285
01:15:39.383 --> 01:15:40.363
Where are your assets?
1286
01:15:40.983 --> 01:15:45.845
Whether it be, you know, 401k, IRA, your house.
1287
01:15:46.745 --> 01:15:55.795
From an insurance perspective, from a asset protection perspective, and then also just from a, you know, when you pass away, like making sure your family is taken care of.
1288
01:15:56.295 --> 01:16:04.844
It was like, I think for a lot of them, eye-opening is the idea of like, oh, my assets go into probate if this doesn't, you know, there's a big process.
1289
01:16:04.864 --> 01:16:08.628
If I got hit by a bus tomorrow, my kids and family could potentially be impacted a lot.
1290
01:16:09.568 --> 01:16:10.769
I was going to talk about this one.
1291
01:16:10.809 --> 01:16:13.932
So I'll mention a little more on that because that is really, really critical.
1292
01:16:14.332 --> 01:16:27.405
I think even in a smaller size business, like I know for a moment, like, you know, we're talking about, you know, tens of millions, hundreds of millions, but like even for someone doing a million dollar business, especially if you have kids, if you have a family, like, I think this is something that we can really, you know, it's really important.
1293
01:16:27.863 --> 01:16:28.103
Yeah.
1294
01:16:28.363 --> 01:16:28.543
Yeah.
1295
01:16:28.563 --> 01:16:30.124
So I would like to add a little more to that.
1296
01:16:30.144 --> 01:16:36.246
But you said a lot that like, if you just, if we just stopped right there, and somebody went and looked into this, I can't recommend enough.
1297
01:16:36.286 --> 01:16:39.487
It's more important than a will is at least do a will.
1298
01:16:39.707 --> 01:16:40.467
If you don't have a will.
1299
01:16:40.808 --> 01:16:42.928
And if you if you don't have a will, at least just go do.
1300
01:16:43.889 --> 01:16:45.129
What's the really popular sites?
1301
01:16:45.149 --> 01:16:46.450
Power of Attorney?
1302
01:16:47.210 --> 01:16:47.890
No, a will.
1303
01:16:47.910 --> 01:16:50.211
There's like online sites, you could at least go do it today.
1304
01:16:50.766 --> 01:16:51.907
Oh, like anything.
1305
01:16:51.927 --> 01:16:52.267
Legal Zoom.
1306
01:16:52.347 --> 01:16:53.227
Yeah, legal Zoom.
1307
01:16:53.407 --> 01:16:58.709
At least do that and then make it better later, but at least get that done because it's a mess otherwise.
1308
01:16:59.390 --> 01:17:01.090
Let me give you a couple others.
1309
01:17:01.110 --> 01:17:02.791
Have you heard of Opportunity Zones?
1310
01:17:03.091 --> 01:17:03.611
Yeah, yeah.
1311
01:17:03.852 --> 01:17:05.332
Okay, so Opportunity Zones.
1312
01:17:05.532 --> 01:17:06.693
I chose not to do them.
1313
01:17:07.653 --> 01:17:16.137
I'm a pretty conservative investor, and I don't like to let the potential tax savings drive investment decisions for me.
1314
01:17:16.557 --> 01:17:20.258
So I chose not to do opportunity zones, but that doesn't mean you shouldn't.
1315
01:17:20.698 --> 01:17:25.841
But there are these areas where opportunity zones have been defined.
1316
01:17:25.861 --> 01:17:31.663
I can't remember all the details now, but back in, I didn't know about them actually before I was selling service autopilot.
1317
01:17:32.163 --> 01:17:33.164
It was presented to us.
1318
01:17:33.725 --> 01:17:38.169
So as an example, maybe there were opportunity zones back in the day in Detroit.
1319
01:17:38.229 --> 01:17:39.850
I don't know if they still exist today.
1320
01:17:40.571 --> 01:17:45.396
But there are opportunity zones all over the country where they've been defined as areas that are trying to be revitalized.
1321
01:17:45.436 --> 01:17:54.805
And so if you invest money in those areas, you get lots of tax benefits and you get lots of tax savings on the growth of the investment as it appreciates in that market.
1322
01:17:55.285 --> 01:18:04.577
I won't say a lot more about it than that, but opportunity zones is a word to keep in mind, especially if you like investing in real estate, but you can invest in businesses and opportunity zones.
1323
01:18:04.597 --> 01:18:06.340
So there's a lot you can do with them.
1324
01:18:06.720 --> 01:18:08.563
I just chose not to go that route.
1325
01:18:09.193 --> 01:18:20.962
How much of this, when you look at other friends of yours that might have had an exit, is all the time, energy, and effort put towards trying to get around taxes versus just pay the tax bill and live your life?
1326
01:18:21.222 --> 01:18:25.686
I think people think about it, but I think they're just going.
1327
01:18:26.246 --> 01:18:31.410
And they want their accountant to try to find stuff, or they're like, oh, my accountant doesn't try very hard.
1328
01:18:31.630 --> 01:18:33.772
You hear those kind of, they're not pushing very hard.
1329
01:18:34.252 --> 01:18:36.234
But I don't feel like...
1330
01:18:37.865 --> 01:18:40.566
It's not a mass, it's a conversation, but it's not a massive conversation.
1331
01:18:40.886 --> 01:18:43.807
In the world I live in, the bigger conversation is actually the trust.
1332
01:18:45.088 --> 01:18:51.970
It's more around thinking about what happens to all the wealth if something happens to me, more than it is about saving tax money.
1333
01:18:52.010 --> 01:18:58.853
Of course, you don't want to waste tax money, but I would say it's more on the trust side where I hear the bigger conversations, which I'm going to mention here in just a moment.
1334
01:18:59.093 --> 01:18:59.973
Yeah, go for it.
1335
01:19:00.413 --> 01:19:04.215
Just again, try not to go too deep with these things, but to expose you with some things.
1336
01:19:04.335 --> 01:19:04.855
I think...
1337
01:19:05.892 --> 01:19:12.139
There's another tax strategy where the broad descriptor of it would be called like tax.
1338
01:19:12.299 --> 01:19:14.722
I think they're called tax aware strategies or this.
1339
01:19:15.142 --> 01:19:16.504
I don't want to go too far down this.
1340
01:19:16.524 --> 01:19:17.465
I'm going to lose most everybody.
1341
01:19:17.485 --> 01:19:24.232
But it's like this where you can buy long on stocks and also short the stocks and you're generating all these losses.
1342
01:19:24.252 --> 01:19:24.412
Yeah.
1343
01:19:25.433 --> 01:19:28.816
And I think one of the big strategies out there is called AQR.
1344
01:19:28.916 --> 01:19:30.337
I may be getting my acronym wrong.
1345
01:19:31.038 --> 01:19:33.560
I've got a good friend that does this.
1346
01:19:33.700 --> 01:19:35.621
He actually works in the trades.
1347
01:19:35.661 --> 01:19:36.842
His name's Nick Bartolo.
1348
01:19:37.343 --> 01:19:38.924
And he has a company called Essential Partners.
1349
01:19:38.964 --> 01:19:46.210
So if anybody's listening to this, I'm not trying to plug him, but there are very few people that can help you with this strategy.
1350
01:19:47.010 --> 01:19:47.970
And I trust Nick.
1351
01:19:47.990 --> 01:19:54.392
And again, not a plug here, but if you are somebody that's about to sell, this is a strategy you want to do before you sell.
1352
01:19:54.773 --> 01:20:00.795
Because what can happen is you can generate all these losses and then you can use them to offset your capital gains.
1353
01:20:01.215 --> 01:20:06.056
I don't even think it existed in this form when we were doing our transaction.
1354
01:20:06.576 --> 01:20:08.197
It is a fascinating thing.
1355
01:20:08.437 --> 01:20:09.338
Fascinating concept.
1356
01:20:09.358 --> 01:20:11.120
You probably need a year or two probably, right?
1357
01:20:11.140 --> 01:20:14.704
It just depends on how much losses you're trying to do.
1358
01:20:14.744 --> 01:20:18.208
Yeah, how much money you can put into the strategy, how big your exit's going to be.
1359
01:20:18.789 --> 01:20:21.131
But it's crazy.
1360
01:20:21.151 --> 01:20:22.313
And I know a bunch of people that do it.
1361
01:20:22.777 --> 01:20:23.497
He's at a high level.
1362
01:20:24.358 --> 01:20:27.519
His business model is, I will get you losses, and you will like it.
1363
01:20:28.319 --> 01:20:31.160
Yeah, but he also generated – this is the crazy thing.
1364
01:20:31.560 --> 01:20:34.101
It's actually generating gains the whole time and losses.
1365
01:20:34.121 --> 01:20:35.022
Wow, that's cool.
1366
01:20:35.162 --> 01:20:35.842
It's insane.
1367
01:20:36.002 --> 01:20:36.182
Yeah.
1368
01:20:36.622 --> 01:20:39.323
And there's billions and billions and billions of dollars.
1369
01:20:39.583 --> 01:20:43.885
This is the kind of stuff where I do think – I think it's a little overblown.
1370
01:20:44.605 --> 01:20:48.810
how all the really wealthy people find all these loopholes to save money.
1371
01:20:49.191 --> 01:20:52.775
It exists, but I think it's largely an overblown concept.
1372
01:20:52.795 --> 01:20:53.436
Good for TikTok.
1373
01:20:53.996 --> 01:20:54.217
Yeah.
1374
01:20:54.437 --> 01:20:55.678
This is amazing.
1375
01:20:55.778 --> 01:21:00.003
It's just like, but if you have assets, you can participate in something.
1376
01:21:00.043 --> 01:21:01.705
This isn't limited to billionaires.
1377
01:21:01.905 --> 01:21:04.008
It's not limited to people with nine-figure net worth.
1378
01:21:04.028 --> 01:21:04.348
This is...
1379
01:21:05.149 --> 01:21:05.929
People can do this.
1380
01:21:06.069 --> 01:21:08.990
It's a fund, like a hedge fund type concept you invest in.
1381
01:21:09.010 --> 01:21:09.590
It's incredible.
1382
01:21:09.951 --> 01:21:11.831
I know a number of people that do it and I trust Nick.
1383
01:21:12.171 --> 01:21:17.733
And so I just want to let, I want to more let people know like what's out there.
1384
01:21:17.753 --> 01:21:21.934
So if this event ever comes, maybe you'll remember this like, oh, I should look into these things.
1385
01:21:22.494 --> 01:21:24.035
Let's talk about the trust stuff.
1386
01:21:25.057 --> 01:21:28.219
Okay, I'm only going to go so deep here because a lot of this too will not apply.
1387
01:21:28.239 --> 01:21:34.222
So I'm going to give you some words that if you have any interest, you could go put these in chat GBT and you can Google.
1388
01:21:34.863 --> 01:21:36.543
Top level, you need to get a trust.
1389
01:21:37.144 --> 01:21:38.985
You just need to do the work to set the trust.
1390
01:21:39.005 --> 01:21:40.406
What's going to happen to your assets?
1391
01:21:41.026 --> 01:21:42.787
What happens to your business?
1392
01:21:43.447 --> 01:21:45.348
What happens to your different kinds of assets?
1393
01:21:45.949 --> 01:21:49.871
Putting these things into a trust can protect them from creditors and losses.
1394
01:21:49.951 --> 01:21:52.693
There's lots of advantages depending on how it's set up.
1395
01:21:53.433 --> 01:21:58.078
Like, I'll give you an example that's, you know, not something you normally have to think about.
1396
01:21:58.118 --> 01:22:04.745
What I'm about to say I would hope never happens, but the wealth that we've created will pass on to my boys.
1397
01:22:04.885 --> 01:22:12.193
And I even have my trust set up, and I don't know how this will come across, that if for whatever reason my kids ever got married and divorced, right?
1398
01:22:12.620 --> 01:22:14.483
the other party can never take that money.
1399
01:22:14.884 --> 01:22:16.606
It will always stay with the kids.
1400
01:22:17.147 --> 01:22:19.571
They wouldn't even have to sign prenups and the money's protected.
1401
01:22:20.252 --> 01:22:27.023
And so again, I hope that never happens, but there's so many little things you can do or you can set up whenever something happens to me
1402
01:22:27.824 --> 01:22:32.487
that my kids don't get the money until they're 40, or they don't get the money until they're whatever age you deem.
1403
01:22:32.787 --> 01:22:35.629
But if there's a medical event or education, they can get the money.
1404
01:22:35.649 --> 01:22:46.176
There's so many things you can do inside these trusts that if you have any amount of assets, or maybe you don't have a lot of money, but if something happened to you in the business were sold, it would create assets.
1405
01:22:46.496 --> 01:22:48.077
You want to be thoughtful about what happens.
1406
01:22:48.177 --> 01:22:49.918
And yes, it's going to cost thousands of dollars.
1407
01:22:50.399 --> 01:22:52.360
But in my mind, it's money really well spent.
1408
01:22:52.796 --> 01:22:59.781
Yeah, the biggest thing that kind of hit home from the owners when we did this with them was a lot of them have kids 5, 10, 15 years old.
1409
01:22:59.921 --> 01:23:04.845
They don't want them getting a few hundred thousand dollars when they're 12 years old.
1410
01:23:05.125 --> 01:23:14.352
But with the trust, being that it's like a separate entity, it's like you can determine all sorts of requirements in terms of how they get the money, when they get the money, things they have to do.
1411
01:23:14.372 --> 01:23:16.113
Like, hey, they have to graduate before they get it.
1412
01:23:16.333 --> 01:23:17.954
They have to get a degree, they have to do.
1413
01:23:18.234 --> 01:23:29.518
And so it's a lot more customizable, I feel like, compared to even a will, where it's like, hey, so-and-so gets the money, but there's not as much granularity you can do with a lot of the assets.
1414
01:23:29.578 --> 01:23:33.519
Even things like your 401k or IRA, where's that money gonna go if I get hit by a bus?
1415
01:23:33.919 --> 01:23:43.249
And I think a lot of this is just being a good steward of the business for your employees perspective, but then also a good steward for the family if you have dependents to make sure this stuff is set up.
1416
01:23:43.429 --> 01:23:47.853
And I think for people listening, it's like we're talking about like QSBS and tens of millions of dollars, et cetera.
1417
01:23:47.873 --> 01:23:53.659
But like if you have a million-dollar business and you've got five or ten employees and you have a couple kids, like this is something to think about.
1418
01:23:53.739 --> 01:23:54.360
It still matters to me.
1419
01:23:54.440 --> 01:23:56.322
It doesn't require $20,000 to $30,000.
1420
01:23:56.662 --> 01:24:09.153
$4,000, $5,000, $6,000 from a good attorney can walk you through setting up the trust and set up protections so that you can almost take more risk in a way, I feel like, because you're not always this cloud over your head.
1421
01:24:09.173 --> 01:24:10.834
Like, if I get hit by a bus, everything's gone.
1422
01:24:10.874 --> 01:24:12.015
My kids aren't going to be taken care of.
1423
01:24:12.295 --> 01:24:13.296
What's going to happen to them?
1424
01:24:13.576 --> 01:24:17.780
Obviously, having things like life insurance is helpful because the money can move pretty quick.
1425
01:24:18.180 --> 01:24:21.083
But you don't want your business locked up in probate.
1426
01:24:21.503 --> 01:24:24.784
And I don't think it's talked about enough of how often that happens.
1427
01:24:25.504 --> 01:24:25.885
I agree.
1428
01:24:26.085 --> 01:24:28.225
And I think this is a really, really important one.
1429
01:24:28.245 --> 01:24:30.486
I did this a long time ago.
1430
01:24:30.866 --> 01:24:34.328
Way back, Will, and then I got more advanced and did the trust thing.
1431
01:24:34.848 --> 01:24:36.528
And I've believed in this for a long time.
1432
01:24:36.568 --> 01:24:40.330
And I highly encourage almost everybody to frankly do it.
1433
01:24:40.570 --> 01:24:42.991
If you're a business owner and you think you're going to have any level of success,
1434
01:24:43.891 --> 01:24:46.414
The last two things I'll say are related to trust.
1435
01:24:47.034 --> 01:24:54.862
And I'm just going to kind of give you the acronym and I'll just say a couple words and it will apply to very few people unless you're going to have a sizable event.
1436
01:24:55.242 --> 01:24:59.447
But it's worth hearing it so you know it exists in case that might ever be you.
1437
01:25:00.107 --> 01:25:02.229
And there's a lot more than what I'm about to say.
1438
01:25:02.249 --> 01:25:04.732
But there's the trust like we just talked about it.
1439
01:25:05.092 --> 01:25:07.575
But then there's also ways that you can...
1440
01:25:08.842 --> 01:25:15.485
basically protect a massive amount of money from ever being taxed when you die.
1441
01:25:16.546 --> 01:25:24.169
And so one acronym is SLAT, S-L-A-T. Another acronym is F-L-P.
1442
01:25:26.370 --> 01:25:30.492
So SLAT is Spousal Lifetime...
1443
01:25:34.319 --> 01:25:35.299
Access Trust, maybe?
1444
01:25:35.719 --> 01:25:36.260
I can't remember.
1445
01:25:36.280 --> 01:25:38.560
I think it's like Spousal Lifetime Access Trust.
1446
01:25:38.740 --> 01:25:43.942
FLP is, I believe that one is like Family Limited Partnership or something like that.
1447
01:25:44.182 --> 01:25:46.923
And then there's another one called ILET, which is for insurance.
1448
01:25:46.983 --> 01:25:47.523
And there's more.
1449
01:25:48.103 --> 01:25:55.286
But the idea here is that you can move assets into these trusts, still control them, still live off the assets.
1450
01:25:55.686 --> 01:26:01.708
But that money is locked away that when you die, it'll pass to your kids tax-free and all the appreciation will pass tax-free.
1451
01:26:01.728 --> 01:26:02.068
Okay.
1452
01:26:02.328 --> 01:26:13.716
And where this might become important to you, and I won't say much more than this, is we, right now, my data is going to be wrong, but you'll get the idea.
1453
01:26:13.936 --> 01:26:17.719
Maybe when Obama was president, you could pass like 5 million bucks to your kids tax-free.
1454
01:26:18.499 --> 01:26:19.360
Can't remember the exact number.
1455
01:26:19.400 --> 01:26:20.580
Maybe it was 5 million per spouse.
1456
01:26:20.641 --> 01:26:21.321
Don't remember now.
1457
01:26:22.081 --> 01:26:26.665
And then Trump came into office and he upped it to, I think it was 12 million per spouse.
1458
01:26:26.905 --> 01:26:28.546
So you could pass them, call it 24 million.
1459
01:26:28.786 --> 01:26:29.807
Numbers are slightly off.
1460
01:26:30.760 --> 01:26:39.304
And so you can actually move assets you own into these, we'll use SLAT as an example.
1461
01:26:39.844 --> 01:26:41.485
You can still control those assets.
1462
01:26:42.185 --> 01:26:43.826
You can still live on those assets.
1463
01:26:44.827 --> 01:26:48.068
But when you die, those assets are protected from tax.
1464
01:26:48.448 --> 01:26:55.592
And if you moved $5 million into it and it grew into $40 million, the $40 million would go tax-free to your kids.
1465
01:26:56.795 --> 01:27:05.059
And these are things that I legitimately think are kind of the, when somebody says like, this is stuff rich people can do that just feels like not fair.
1466
01:27:05.079 --> 01:27:05.919
I agree.
1467
01:27:05.979 --> 01:27:11.522
These are the things that feel not, there are a lot of games played in this way, but some of it also comes with some risk.
1468
01:27:11.602 --> 01:27:12.863
You can lose control of things.
1469
01:27:13.303 --> 01:27:20.747
The reason I gave the Obama to Trump example is my general operating belief is the future is more taxes than,
1470
01:27:21.867 --> 01:27:28.273
And more taxes comes in the form of higher rates and then more wealth tax in terms of what we pass on to our kids.
1471
01:27:28.534 --> 01:27:30.435
They'll bring those numbers down further.
1472
01:27:31.617 --> 01:27:37.942
Like that whole SLAT concept, like the setting aside money, that expires at some point in the future and it goes back down to the old limits.
1473
01:27:38.867 --> 01:27:41.269
And so I just want to make you aware of these things.
1474
01:27:41.309 --> 01:27:55.643
If you ever have an event, there's ways that you can push money out of your estate into these other entities that you don't lose control of it, but it will massively impact the amount of money your heirs will inherit.
1475
01:27:56.397 --> 01:28:10.288
Yeah, and I think just to kind of wrap this part up, I think the vast majority of people listening, one thing that I was – as I was thinking about this topic today while I was working out, it was like the biggest tax strategy is building a business that's worth selling in the first place.
1476
01:28:11.329 --> 01:28:17.675
And that's the number one focus because when you look at the number – just the pure data of what percentage of businesses get sold –
1477
01:28:18.415 --> 01:28:30.265
let alone sell for a good multiple and where there is this type of money where trusts are important and slats and FLPs and DAFs and actually all these acronyms, it is because the business was built first.
1478
01:28:30.945 --> 01:28:34.308
And so I think sometimes when people hear this stuff, it's like, I've got to go do a DAF.
1479
01:28:34.448 --> 01:28:35.669
It's like, whoa, whoa, whoa.
1480
01:28:35.949 --> 01:28:39.832
We have 20 grand in the bank and you're growing the business year over year by double.
1481
01:28:40.013 --> 01:28:41.234
Let's just focus on that thing.
1482
01:28:42.194 --> 01:28:46.296
And so I think building the business that's worth selling should be the goal.
1483
01:28:46.536 --> 01:28:50.678
And whether or not you sell it or it becomes more of a passive dividend, you hand it off and let someone else run it.
1484
01:28:51.319 --> 01:28:55.641
Either way, that's the goal for 99.9% of us.
1485
01:28:55.701 --> 01:28:55.941
100%.
1486
01:28:55.961 --> 01:29:02.244
Now, these conversations are dangerous because on one hand, we're introducing new ideas that might get people distracted.
1487
01:29:02.364 --> 01:29:05.466
I'm all about go sell more work, find the people to do the work.
1488
01:29:05.686 --> 01:29:05.846
Yeah.
1489
01:29:07.055 --> 01:29:08.296
Just keep doing that all the time.
1490
01:29:08.736 --> 01:29:10.957
And so these kind of conversations are dangerous.
1491
01:29:11.017 --> 01:29:20.700
But what I do love about these kinds of conversations is if they just kind of get into the back of your mind and one day, if you're so fortunate to find yourself in this position...
1492
01:29:21.636 --> 01:29:27.681
And you just remember any of this, you'll now go no to look, and it could save you a crazy amount of money.
1493
01:29:28.121 --> 01:29:34.406
And it just expands your knowledge base, and it just makes you look at things differently or ask more questions.
1494
01:29:34.646 --> 01:29:36.527
That's why I like this type of a conversation.
1495
01:29:36.887 --> 01:29:37.108
But...
1496
01:29:37.768 --> 01:29:40.270
To your point, Mike, just try not to get too distracted here.
1497
01:29:40.450 --> 01:29:43.832
And look, you can always send us that 1% commission when that happens down the road.
1498
01:29:43.852 --> 01:29:44.352
That's right.
1499
01:29:44.372 --> 01:29:45.093
We'll take the cut.
1500
01:29:45.433 --> 01:29:46.054
That'd be wonderful.
1501
01:29:46.134 --> 01:29:46.594
I'll take it.
1502
01:29:46.994 --> 01:29:56.381
Speaking of distractions, I want to wrap today up talking about something, and that is robotics, AI, the timelines that have been put on these in the past, and even now.
1503
01:29:57.221 --> 01:30:01.484
And really just kind of deciphering between what is legitimate, what should we be thinking about?
1504
01:30:01.785 --> 01:30:05.087
And I think the theme of today is really like, where's your focus?
1505
01:30:05.608 --> 01:30:08.870
What are we actually, are we solving the biggest constraint in the business?
1506
01:30:09.911 --> 01:30:12.653
But really, are we getting distracted with what's going on in social media?
1507
01:30:13.094 --> 01:30:18.038
A lot of times the fear, like we talked about copywriting, is very evident when it comes to the news or social media.
1508
01:30:18.258 --> 01:30:19.559
And that is the thing that gets the clicks.
1509
01:30:19.639 --> 01:30:23.402
It's the thing that we all are seeing in our newsfeed, whether it be about AI or robotics.
1510
01:30:23.842 --> 01:30:25.604
And so I wanted to talk about
1511
01:30:26.844 --> 01:30:29.146
this notion of it being inflated.
1512
01:30:29.346 --> 01:30:30.047
Is it inflated?
1513
01:30:30.287 --> 01:30:35.871
Should it be, what percentage of our mind space should be focused on something that's going to quote, disrupt our business or put us out of business.
1514
01:30:36.331 --> 01:30:43.557
And I think my, my thought from, from wanting to provide audience, my audience value is you've been around for a long time.
1515
01:30:44.017 --> 01:30:45.458
You've seen these things come and go.
1516
01:30:45.859 --> 01:30:49.742
And I think living through a recession or two gives someone a lot more perspective on,
1517
01:30:50.362 --> 01:30:54.225
as well as living through boom and busts and news and hype cycles.
1518
01:30:54.826 --> 01:31:03.373
And so from your perspective, when it comes to AI, I know we talked a little bit about last week in terms of vibe coding, et cetera, but what are you seeing?
1519
01:31:04.194 --> 01:31:09.798
You're also a practitioner of it in the software side of things and also been on boards around things like robotic mowers.
1520
01:31:10.078 --> 01:31:12.560
So give us your perspective in terms of what that looks like.
1521
01:31:13.221 --> 01:31:13.421
Yeah.
1522
01:31:15.563 --> 01:31:16.103
I...
1523
01:31:17.156 --> 01:31:18.776
The short answer is I still don't know.
1524
01:31:19.597 --> 01:31:23.198
I just don't know, but I can give you the way I think about this.
1525
01:31:24.158 --> 01:31:31.040
What I struggle with, like if we were talking about robotic mowers, it's easier for me to just say, this is my belief at this point.
1526
01:31:31.080 --> 01:31:32.020
And I've been so wrong.
1527
01:31:32.360 --> 01:31:33.940
I think you've felt that way maybe too.
1528
01:31:33.960 --> 01:31:40.282
Have you felt like, do you feel, have you been tricked by the speed of robotic mowers or do you feel like you've been pretty correct so far?
1529
01:31:40.322 --> 01:31:44.904
I remember your keynote, SA4.
1530
01:31:45.525 --> 01:31:45.765
Okay.
1531
01:31:45.785 --> 01:31:48.987
That's when I think you were just getting involved with Robin at the time.
1532
01:31:49.367 --> 01:31:50.688
Or maybe they just came out.
1533
01:31:50.708 --> 01:31:51.848
I forget exactly the timeline.
1534
01:31:52.348 --> 01:31:55.050
But I think I left that conference a little freaked out.
1535
01:31:55.270 --> 01:31:57.371
I was like, you know, I'm not going to need to be mowing.
1536
01:31:58.172 --> 01:32:02.494
You know, I only have a five-year window of getting off the mower and focusing just on projects.
1537
01:32:02.794 --> 01:32:07.597
And I think I actually left there thinking I needed to get more into projects because that was going to be harder for the robots to do.
1538
01:32:08.437 --> 01:32:10.138
And so I was wrong there.
1539
01:32:10.558 --> 01:32:15.259
I think going forward, it's very easy to pontificate, you know, where the future is going.
1540
01:32:15.279 --> 01:32:17.040
Now we have self-driving, which is very exciting.
1541
01:32:17.280 --> 01:32:18.460
But I always go back to this.
1542
01:32:18.981 --> 01:32:22.682
And that is, we were told self-driving was right around the corner in 2015.
1543
01:32:22.702 --> 01:32:23.722
This is a great example.
1544
01:32:24.262 --> 01:32:27.483
And it is, if anyone's driven a Tesla, it's good.
1545
01:32:27.903 --> 01:32:33.625
But I also want to ask, like, what percentage of people watching this today are using self-driving?
1546
01:32:33.665 --> 01:32:35.226
We all still have a steering wheel.
1547
01:32:36.116 --> 01:32:40.300
And the vast majority, probably 98% of us are still driving our vehicles.
1548
01:32:41.120 --> 01:32:45.664
And so I have to ask myself, okay, the robotics thing, technically possible, perhaps.
1549
01:32:46.304 --> 01:32:47.525
But then there's legislation.
1550
01:32:47.826 --> 01:32:55.432
And that was a big thing that I think you've really brought up to my perspective like four or five years ago is like, hey, this whole line of sight thing is a problem.
1551
01:32:55.852 --> 01:33:01.537
When you get a big piece of equipment in the backyard, if I have to have an operator standing right next to it, I'm not actually saving any money.
1552
01:33:01.557 --> 01:33:02.678
I'm just reducing risk.
1553
01:33:03.552 --> 01:33:05.674
And for a more expensive piece of equipment.
1554
01:33:05.694 --> 01:33:06.635
Yeah, exactly.
1555
01:33:06.795 --> 01:33:07.656
That breaks more often.
1556
01:33:07.856 --> 01:33:07.957
Yeah.
1557
01:33:07.977 --> 01:33:09.578
And the customer doesn't pay anything more for it.
1558
01:33:09.598 --> 01:33:18.707
If anything, like the whole, you know, electronic, you know, electric revolution when it comes to the green industry proved to all of us, no one's willing to pay anything more for this.
1559
01:33:19.468 --> 01:33:20.549
They just want the service done.
1560
01:33:21.069 --> 01:33:23.830
And so if you're not going to provide extra value, they're not going to pay any more money.
1561
01:33:24.551 --> 01:33:29.654
And so if the customer is not willing to pay more, I'm just going to spend five times more for a mower.
1562
01:33:30.074 --> 01:33:31.074
It's hard to reconcile.
1563
01:33:31.695 --> 01:33:35.277
And so I have kind of back to what we talked about last week around AI is just like,
1564
01:33:35.737 --> 01:33:38.598
It's just like, I will serve the customer and I'll provide value.
1565
01:33:38.938 --> 01:33:40.718
And I'll just keep getting better and better at that.
1566
01:33:41.118 --> 01:33:44.719
And then there'll come a day where maybe the robot makes sense financially.
1567
01:33:44.939 --> 01:33:45.799
It does a better job.
1568
01:33:46.019 --> 01:33:46.979
It produces more value.
1569
01:33:47.059 --> 01:34:00.822
And I will then use the technology instead of being the one out front, blazing the trail, spending gobs of money, like we did with the stinking AI voice thing, where I almost had like this revolt inside of Augusta because I spent, and internally I'm like, this is the future.
1570
01:34:01.102 --> 01:34:01.902
We've got to do this.
1571
01:34:02.022 --> 01:34:04.383
And it probably is, but not in 2023.
1572
01:34:04.403 --> 01:34:04.723
It's just like,
1573
01:34:05.983 --> 01:34:15.451
And so I'm I've almost got that like I'm not going to be the one spending all the money going through all the hurdles, figuring all this out versus if it works.
1574
01:34:15.932 --> 01:34:17.673
I'll just use AI phones, for example.
1575
01:34:18.034 --> 01:34:24.239
If it works and it's going to be revolutionary and save you a bunch of money and your customers are going to love it, you can go buy it next week.
1576
01:34:25.703 --> 01:34:29.765
And if robot mowers are going to come along and they're going to put us on, you can go buy them next week.
1577
01:34:30.505 --> 01:34:38.148
And so that's where it's like, what's the point of getting afraid or buying into this logic that I'm going to revolutionize my business or change everything?
1578
01:34:38.368 --> 01:34:40.989
When I just have to do what's always worked to serve the customer better.
1579
01:34:42.290 --> 01:34:47.072
But you have a much better perspective because you've been inside some of these rooms around robotics.
1580
01:34:47.773 --> 01:34:53.358
Yeah, but I do think that that's a really good perspective and some pretty important information there.
1581
01:34:53.879 --> 01:34:59.624
So let's use robotic mowers to argue for and against how fast AI in general robotics is going to go.
1582
01:35:00.365 --> 01:35:07.051
So my big, and you touched on this, so back whenever, whatever year it was that I gave that talk,
1583
01:35:08.362 --> 01:35:17.509
I had thought, based on what I was seeing, we're probably, you're just guessing, we're probably about five years away before robotic mowers are going to be good enough that they're not going to dominate, but they're going to be a lot of robots.
1584
01:35:17.549 --> 01:35:18.610
We're going to want to be using them.
1585
01:35:19.191 --> 01:35:20.552
It's going to be a competitive advantage.
1586
01:35:21.453 --> 01:35:27.017
And a little bit of that belief was coming from the progress we were seeing in self-driving.
1587
01:35:27.197 --> 01:35:31.521
Not that it was dialed in or perfect, but you were just really seeing these improvements.
1588
01:35:31.621 --> 01:35:36.244
And then I also knew at that time that the robot mowers were going to be moving from...
1589
01:35:37.465 --> 01:35:49.971
just GPS, but they're going to start getting different forms of technology, camera technology, and they were going to, they're going to eventually we're going to have to have the equivalent of the invisible dog fence and such the wire.
1590
01:35:50.251 --> 01:35:53.052
And so I was pretty optimistic on what I was seeing.
1591
01:35:53.072 --> 01:35:56.554
It's like five years from now seems like a very reasonable timeframe.
1592
01:35:56.574 --> 01:35:58.835
And so my general argument was that, um,
1593
01:35:59.829 --> 01:36:06.417
I don't think I would have been arguing you needed to be first, but I do know I was making the argument that you need to start exploring.
1594
01:36:07.058 --> 01:36:14.867
Because what happens is if you deny, deny, and somebody else is doing it, then eventually they've been doing it for like a couple years.
1595
01:36:14.947 --> 01:36:18.371
Then you accept, then you have several years of the testing phase to figure it out.
1596
01:36:19.762 --> 01:36:22.284
And why in robotics, I say, figure it out.
1597
01:36:22.624 --> 01:36:32.991
It's a little different than say the phone scenario is because you've got to really change your business model and your pricing on all these things, like your people model, every, everything changes.
1598
01:36:33.011 --> 01:36:34.231
Your marketing sells.
1599
01:36:34.892 --> 01:36:37.453
Whereas in the phone example, which I think is such a good one.
1600
01:36:37.474 --> 01:36:41.136
So when it comes to so much of this technology, if you just wait, we're going to be able to buy it.
1601
01:36:41.456 --> 01:36:43.978
Somebody else is going to say, I can make a hundred million dollars doing this.
1602
01:36:44.218 --> 01:36:45.919
So they're going to create the most amazing products.
1603
01:36:46.099 --> 01:36:46.439
solution.
1604
01:36:46.459 --> 01:36:48.520
We just buy their solution versus us building it.
1605
01:36:49.060 --> 01:36:51.660
And they'll test it, prove it, and then we can implement it.
1606
01:36:51.940 --> 01:36:55.061
The robotic mower isn't actually just about buying the mower.
1607
01:36:55.721 --> 01:36:58.962
It's about everything that changes around the buying of the mower.
1608
01:36:59.462 --> 01:37:01.583
And so that's where I was arguing.
1609
01:37:01.603 --> 01:37:05.323
It's like, hey, I think this is going to be a thing in five years.
1610
01:37:05.403 --> 01:37:06.164
It's going to be ready.
1611
01:37:06.464 --> 01:37:08.444
So at some point, you need to start testing it.
1612
01:37:09.064 --> 01:37:11.565
So at CityTurf, I feel like
1613
01:37:12.465 --> 01:37:30.213
the chagrin of my business partner, we tested them and fairly quickly realized, oh my gosh, like there's so many, like, yeah, they work in a perfect environment, but as soon as there's a slope or they're by a pond, like a million different factors, it all falls apart.
1614
01:37:31.233 --> 01:37:32.474
Not completely, but it falls apart.
1615
01:37:32.714 --> 01:37:33.414
Okay.
1616
01:37:33.854 --> 01:37:37.175
So that was the idea of why, of kind of what happened.
1617
01:37:37.616 --> 01:37:42.958
Then when I sold Service Autopilot and I was trying to figure out what am I going to do next, I got really interested in robotics.
1618
01:37:43.038 --> 01:37:48.199
I thought I want to do something and I didn't want to do the stuff I was like attracted to.
1619
01:37:48.219 --> 01:37:49.920
Could I do something totally different in life?
1620
01:37:50.540 --> 01:37:52.581
And so I thought it'd be cool to do the robotics thing.
1621
01:37:52.601 --> 01:37:57.103
So I got more involved at that time in the robotics mower thing.
1622
01:37:57.143 --> 01:37:59.804
And so I'm interacting with Husqvarna and other groups and,
1623
01:38:01.160 --> 01:38:07.028
That's when I came to conclude that the adoption, I concluded a couple of things.
1624
01:38:08.089 --> 01:38:13.557
One, on the robotic side, even if the technology is really good,
1625
01:38:15.828 --> 01:38:18.551
how much money will operators really be able to spend?
1626
01:38:18.831 --> 01:38:20.613
Because how are they going to finance these?
1627
01:38:21.274 --> 01:38:25.619
Like, who's going to give an operator $7 million loan on robot mowers?
1628
01:38:25.639 --> 01:38:28.001
Like, almost nobody's going to get that loan.
1629
01:38:29.163 --> 01:38:30.744
So if you are able to get it...
1630
01:38:31.790 --> 01:38:33.872
$100,000 of robot mowers on loan?
1631
01:38:34.132 --> 01:38:34.692
Who cares?
1632
01:38:34.753 --> 01:38:37.855
Like that's like a nothing in your business model.
1633
01:38:37.935 --> 01:38:39.296
And so it's just a distraction.
1634
01:38:40.117 --> 01:38:42.559
So how are people even going to finance this?
1635
01:38:42.739 --> 01:38:45.701
And nobody can predict how long these mowers are going to last.
1636
01:38:45.741 --> 01:38:50.465
They're worried about safety, or not safety, well, safety, but also security.
1637
01:38:50.485 --> 01:38:51.306
Are they going to get stolen?
1638
01:38:51.346 --> 01:38:53.047
So that financing is a mess.
1639
01:38:53.448 --> 01:38:56.070
So until financing gets resolved, this industry can't go.
1640
01:38:57.178 --> 01:39:05.145
And then operators are just not gung-ho about this idea of figuring out entirely new business models and reinventing everything.
1641
01:39:05.185 --> 01:39:07.647
And so there's that up headwind.
1642
01:39:07.967 --> 01:39:16.814
And then there's the headwind of just the technology being really, really good on the right property and a full-on disaster on the wrong property.
1643
01:39:17.195 --> 01:39:19.437
And so again, if it's only going to fit...
1644
01:39:20.077 --> 01:39:25.081
and work at 10 or 15% of your properties, is it then just a big giant distraction in the business?
1645
01:39:25.402 --> 01:39:27.223
So there were all these problems of that sort.
1646
01:39:27.323 --> 01:39:29.105
And the biggest of all is what you said.
1647
01:39:29.945 --> 01:39:32.648
It's the freaking government regulation.
1648
01:39:33.088 --> 01:39:34.529
It's like, it's the craziness.
1649
01:39:34.669 --> 01:39:35.911
Maybe it's crazy or not crazy.
1650
01:39:36.231 --> 01:39:38.233
It's just that it will be too slow.
1651
01:39:38.253 --> 01:39:38.773
Okay.
1652
01:39:38.893 --> 01:39:44.696
So if you got to stand there holding a button, like with a button all the time to hit your button to stop the mower, like I can just put that guy on a mower.
1653
01:39:44.976 --> 01:39:46.597
Like I don't need to do this, play this game.
1654
01:39:46.637 --> 01:39:47.897
And so there's that.
1655
01:39:47.917 --> 01:39:50.278
And that's where I really realized this stuff's going to go slow.
1656
01:39:50.378 --> 01:39:53.700
So those are the things that made me think robotics will go slow.
1657
01:39:54.220 --> 01:40:03.425
Now, the counter argument to that is we had a very small amount of money and the smartest people in the world were all working on other things.
1658
01:40:04.245 --> 01:40:08.371
And that's the difference, I think, in robotics today and in AI today.
1659
01:40:08.431 --> 01:40:13.978
You have all the money going to these two places and the most intelligent people in the world.
1660
01:40:14.379 --> 01:40:17.423
The brightest guys in the world, we're not working on robot motors.
1661
01:40:17.543 --> 01:40:18.844
I'm not putting down anybody in robot motors.
1662
01:40:18.865 --> 01:40:19.145
It's like,
1663
01:40:20.025 --> 01:40:22.927
But all the smartest people are in robot mowers.
1664
01:40:23.467 --> 01:40:28.990
And so, I'm sorry, we're in regular robots like Figma and all these other companies.
1665
01:40:29.050 --> 01:40:31.391
And so, or Tesla or whatever.
1666
01:40:32.051 --> 01:40:32.811
And that's the thing.
1667
01:40:32.831 --> 01:40:37.254
I think you do have to be a little bit careful saying, here's what happened in robot mowers.
1668
01:40:37.274 --> 01:40:38.554
So here's what's going to happen everywhere else.
1669
01:40:38.654 --> 01:40:39.695
I do think it's different.
1670
01:40:40.355 --> 01:40:49.380
It's kind of like when all the money and all the brainpower and all the focus goes in hardcore and something, we've proven in society how fast things can move forward.
1671
01:40:50.200 --> 01:41:00.766
But when we make the argument, when I hear people say, we're going to have humanoid robots in five years, mowing, like...
1672
01:41:02.013 --> 01:41:03.194
I don't even feel like I need to comment.
1673
01:41:03.234 --> 01:41:07.175
Literally, it was quite a big conversation in Augusta.
1674
01:41:07.195 --> 01:41:09.596
So we have like the daily mastermind and we do live Q&A.
1675
01:41:09.616 --> 01:41:11.937
And one of them was like, hey, I'm really concerned.
1676
01:41:12.037 --> 01:41:14.638
I saw Elon's presentation of this humanoid robot.
1677
01:41:15.098 --> 01:41:17.519
And like, I always just have to go back to, it's kind of like QR codes.
1678
01:41:17.700 --> 01:41:19.780
In theory, QR codes sound fantastic.
1679
01:41:19.820 --> 01:41:21.841
Put it in your truck, people are gonna scan it.
1680
01:41:22.201 --> 01:41:23.582
We did that and we tracked it.
1681
01:41:23.622 --> 01:41:30.385
And it was like such a, like I literally think it was less than 10 across Augusta that we saw people scanning QR codes on trucks.
1682
01:41:30.865 --> 01:41:33.406
Makes great in theory, but like no one does it.
1683
01:41:33.466 --> 01:41:47.833
And so like, it's like, look, if you can't get a human or a robot right now to do something like pick up your laundry, like we're not outside yet where there's rain, let alone being transported, let alone being charged, dealing with wind, dealing with people pushing the thing.
1684
01:41:48.253 --> 01:41:51.935
Like none of us even have it pulling our laundry away yet.
1685
01:41:52.692 --> 01:41:55.094
So I truly don't even know what we're talking about.
1686
01:41:55.134 --> 01:42:05.062
I mean, one time on the All In podcast, I heard him say in three years, like what, like, what if you have a kid or a dog or the joke I've heard?
1687
01:42:05.122 --> 01:42:05.482
I did.
1688
01:42:05.642 --> 01:42:09.645
Like, what if people are like, people already think everything's everywhere.
1689
01:42:09.705 --> 01:42:10.586
And we're being spied on.
1690
01:42:10.626 --> 01:42:12.808
I'm sure we are being spied on all the time in every way.
1691
01:42:12.828 --> 01:42:14.389
Now you're going to put the thing in your house.
1692
01:42:14.609 --> 01:42:14.990
Oh, man.
1693
01:42:15.490 --> 01:42:17.051
With sound and vision.
1694
01:42:17.332 --> 01:42:21.435
It was like Gary Vee, like 12 months ago, he going on, I forget whose podcast.
1695
01:42:21.695 --> 01:42:27.880
He's like, I predict in 12 months, we're going to be having 10% of marriages are going to be to robots.
1696
01:42:28.160 --> 01:42:30.102
Your grandkids will marry an AI human.
1697
01:42:31.874 --> 01:42:33.075
What's your conviction level on that?
1698
01:42:33.295 --> 01:42:33.936
A hundred percent.
1699
01:42:34.196 --> 01:42:35.457
What are we saying?
1700
01:42:35.497 --> 01:42:37.499
This makes for such great social media.
1701
01:42:37.519 --> 01:42:38.159
Totally, totally.
1702
01:42:38.179 --> 01:42:38.419
I know.
1703
01:42:38.659 --> 01:42:39.880
That's what we need to do, Jonathan.
1704
01:42:39.920 --> 01:42:40.561
Come on.
1705
01:42:40.601 --> 01:42:41.602
We need to go up with better headlines.
1706
01:42:41.622 --> 01:42:41.802
I know.
1707
01:42:41.842 --> 01:42:43.143
I'd be so much better.
1708
01:42:43.163 --> 01:42:46.105
Yeah, 5 for 50 would be so much better if I just start making up stupid stuff.
1709
01:42:46.185 --> 01:42:46.506
Totally.
1710
01:42:46.526 --> 01:42:48.867
And those people never get criticized, right?
1711
01:42:48.887 --> 01:42:49.468
Like that...
1712
01:42:49.988 --> 01:42:54.329
What you get criticized for is saying the boomer thing, which is like, oh, this isn't going to take over.
1713
01:42:54.629 --> 01:43:00.691
And then having to clip 10 years later of being like the yellow pages or Yahoo and being like, oh, this isn't going away.
1714
01:43:01.031 --> 01:43:02.092
Everyone's so afraid of that.
1715
01:43:02.172 --> 01:43:08.474
So it's just like, let's just err on the side of being completely way too optimistic and completely missing deadlines.
1716
01:43:08.754 --> 01:43:12.955
But it's OK because we're making progress and we're all know directionally that's where it's going.
1717
01:43:13.475 --> 01:43:19.561
And so I can't be wrong if we're headed in that direction, but I can give these random timelines and make stuff up.
1718
01:43:19.641 --> 01:43:21.402
And somehow it's OK.
1719
01:43:21.803 --> 01:43:28.549
But what the reason I have a problem with it is just distract us from what I go back to solve the customer's problem and do it better than anyone else.
1720
01:43:28.869 --> 01:43:30.911
And that always is the fix.
1721
01:43:31.071 --> 01:43:37.497
And the distraction from that core element is the part where I see it as a potential detriment.
1722
01:43:37.952 --> 01:43:41.195
Yeah, I'll sum up my position in this way.
1723
01:43:42.236 --> 01:43:44.038
I am invested in AI.
1724
01:43:44.138 --> 01:43:46.080
I've got investments in open AI and Anthropic.
1725
01:43:46.240 --> 01:43:46.781
I'm invested.
1726
01:43:46.901 --> 01:43:47.482
I believe in it.
1727
01:43:48.643 --> 01:43:50.645
I invested in strong valuations.
1728
01:43:50.705 --> 01:43:54.709
And I believe that was a while back, but they've gotten stronger and I think they're going to keep getting stronger.
1729
01:43:54.749 --> 01:43:57.271
So I'm not of the belief it's all about to end.
1730
01:43:57.291 --> 01:43:57.391
Yeah.
1731
01:43:57.992 --> 01:44:00.113
I believe the robotics thing is going to happen.
1732
01:44:00.153 --> 01:44:01.634
I've had opportunities to invest in robotics.
1733
01:44:02.014 --> 01:44:03.335
I've been a little more leery there.
1734
01:44:03.355 --> 01:44:06.816
I feel like it's going to be a hype cycle here for a while.
1735
01:44:07.297 --> 01:44:11.239
The valuations are really expensive, and I think we're going to just go through some ups and downs.
1736
01:44:11.539 --> 01:44:13.580
That one scares me because I don't know what those timelines are.
1737
01:44:14.400 --> 01:44:15.120
And I don't need to know.
1738
01:44:15.161 --> 01:44:17.562
I don't think it's going to impact me in any...
1739
01:44:17.722 --> 01:44:20.864
It changes absolutely nothing about what I'm doing, how I'm...
1740
01:44:21.104 --> 01:44:22.465
It has no impact on anything.
1741
01:44:22.805 --> 01:44:24.586
One day they're going to show up and we're going to figure it out.
1742
01:44:24.766 --> 01:44:26.307
But I'm not even slightly worried about robots.
1743
01:44:26.567 --> 01:44:27.407
Do I believe they're coming?
1744
01:44:27.628 --> 01:44:29.268
Do I believe they will be everywhere someday?
1745
01:44:29.869 --> 01:44:30.609
Without question.
1746
01:44:30.789 --> 01:44:31.530
I just don't know when.
1747
01:44:32.450 --> 01:44:33.891
And so in the meantime, it's what you said.
1748
01:44:33.911 --> 01:44:34.631
I'm not going to worry about it.
1749
01:44:34.671 --> 01:44:35.652
It has no impact on anything.
1750
01:44:36.292 --> 01:44:39.213
AI does legitimately have a major impact on things.
1751
01:44:39.794 --> 01:44:41.214
But even then, I don't know.
1752
01:44:41.995 --> 01:44:46.457
Back to the E-Lon thing, everything is so overhyped.
1753
01:44:46.477 --> 01:44:49.058
And people are overhyping stuff to raise money.
1754
01:44:49.438 --> 01:44:51.259
People are overhyping things because they're excited.
1755
01:44:51.659 --> 01:44:55.421
But I even think about just simple, benign things.
1756
01:44:55.461 --> 01:44:57.462
Like back to my service autopilot days,
1757
01:44:58.448 --> 01:45:03.669
We would design something, we'd get it, we'd go to code, everything looked great.
1758
01:45:04.450 --> 01:45:06.590
Like this is going to be out in two months.
1759
01:45:07.110 --> 01:45:08.891
Tell everybody, everybody's excited.
1760
01:45:09.411 --> 01:45:11.792
And then the system's running slow.
1761
01:45:11.852 --> 01:45:12.532
Yeah.
1762
01:45:12.612 --> 01:45:14.432
So all the engineers get pulled off.
1763
01:45:14.492 --> 01:45:17.293
I was like, dude, these guys for next 90 days are working on that.
1764
01:45:17.553 --> 01:45:18.914
We're not writing that code anymore.
1765
01:45:19.354 --> 01:45:22.677
And so you just never know what distraction is going to happen.
1766
01:45:22.977 --> 01:45:24.178
That's a bigger fire.
1767
01:45:24.658 --> 01:45:28.621
Or you don't know when you're going to run into problems in the code you were writing or I didn't think of this.
1768
01:45:29.101 --> 01:45:30.562
And so that happens in tech.
1769
01:45:30.582 --> 01:45:35.685
So even guys that are being completely legit and honest, they never know what they're going to bump into.
1770
01:45:35.966 --> 01:45:37.767
This stuff's insanely complicated.
1771
01:45:38.167 --> 01:45:41.990
And so on the AI thing, I'm a firm believer it's going to probably get crazy.
1772
01:45:42.630 --> 01:45:45.952
But is it going to get crazier than it is now in two years, 10 years?
1773
01:45:46.112 --> 01:45:46.432
I don't know.
1774
01:45:46.452 --> 01:45:46.752
Five years?
1775
01:45:46.912 --> 01:45:47.373
I don't know.
1776
01:45:48.193 --> 01:45:56.017
So I don't know if I said it last week or I was talking to somebody, but as an entrepreneur, I'll kind of say what I said before.
1777
01:45:56.237 --> 01:46:03.821
As an entrepreneur, if you want to play this game, then you have to accept that all kinds of stuff is going to get thrown at you.
1778
01:46:03.861 --> 01:46:10.085
And you're going to have to bob and weave and pivot, change directions, try new things, learn new things, grow yourself.
1779
01:46:10.105 --> 01:46:10.725
Yeah.
1780
01:46:10.885 --> 01:46:15.949
It just used to be that you could do a lot less of that over a long period of time, and it's getting compressed.
1781
01:46:16.269 --> 01:46:19.972
And you've got to be willing to, Bob, we've changed, learn faster than you've ever done it.
1782
01:46:20.473 --> 01:46:25.036
And if you can accept that, then all the opportunity is there for you, just like it's always been.
1783
01:46:25.417 --> 01:46:30.020
And it will filter out a whole ton of people that are not willing to play that game, that are going to be scared.
1784
01:46:30.040 --> 01:46:31.361
They're going to say, it's too hard.
1785
01:46:31.621 --> 01:46:32.902
The world's rigged against me.
1786
01:46:33.643 --> 01:46:36.147
billionaires or like whatever the nonsense is.
1787
01:46:37.148 --> 01:46:48.544
But for the people that are willing to learn, pivot, try new things and live in a little bit of a world of uncertainty, I tend to believe if you just keep building and your head down, you're going to be good.
1788
01:46:49.285 --> 01:46:51.847
And so it's just going to be a different world.
1789
01:46:52.247 --> 01:46:54.649
And we were never promised easy ever anyway.
1790
01:46:54.729 --> 01:46:56.851
So I don't worry about the robotics thing.
1791
01:46:57.271 --> 01:46:58.953
I don't really even worry about the AI thing.
1792
01:46:58.973 --> 01:47:04.677
I actually think the AI thing, I worry about AI more in software, but in terms of home services, I see it as opportunity.
1793
01:47:05.337 --> 01:47:08.280
I see it as, we might've talked about this here.
1794
01:47:08.300 --> 01:47:12.243
I know I've said it's like, the future is your labor budget is this big.
1795
01:47:12.363 --> 01:47:17.046
It's not that robots are going to shrink it down to this, but it's like on your P&L, your labor budget's this big.
1796
01:47:18.227 --> 01:47:22.268
and your technology budget's tiny, and the technology budget's going to get bigger and bigger and bigger.
1797
01:47:22.488 --> 01:47:24.668
And labor budget's going to get a little bit smaller.
1798
01:47:24.688 --> 01:47:26.249
Someday when robots come, it'll get way smaller.
1799
01:47:26.609 --> 01:47:27.349
Who knows when that is?
1800
01:47:27.729 --> 01:47:36.151
I almost look at it as like in 2010 to 2015, the companies that now are the biggest were the ones that adopted just getting a website, getting online.
1801
01:47:36.791 --> 01:47:44.512
And I think the same thing with AI is going to happen, which is like the companies that get on board, adopt it, don't think it's something crazy that their nephew's working with.
1802
01:47:44.792 --> 01:47:47.333
They'll be the ones that in 10 years, like they're the biggest companies.
1803
01:47:47.973 --> 01:47:48.914
It's all opportunity.
1804
01:47:49.614 --> 01:47:49.894
Yeah.
1805
01:47:49.954 --> 01:47:50.214
Yeah.
1806
01:47:50.234 --> 01:47:52.796
So I'm very optimistic about this stuff.
1807
01:47:52.996 --> 01:47:58.620
I just, I don't think any, I think people in home services have almost nothing to worry about right now.
1808
01:47:58.780 --> 01:48:01.221
Just everything you said, ditto to that.
1809
01:48:01.241 --> 01:48:02.262
Just do what Mike said.
1810
01:48:02.402 --> 01:48:05.484
And I think you will find yourself in a really good place.
1811
01:48:05.853 --> 01:48:08.114
All right, I have two things to end up the pod.
1812
01:48:08.594 --> 01:48:08.834
Okay.
1813
01:48:09.094 --> 01:48:10.755
One is not necessarily a question.
1814
01:48:11.015 --> 01:48:12.035
The second one is a question.
1815
01:48:12.356 --> 01:48:14.576
So the first one is more commiserating.
1816
01:48:14.797 --> 01:48:17.498
It is me sharing my biggest problem right now.
1817
01:48:17.978 --> 01:48:18.278
Okay.
1818
01:48:18.718 --> 01:48:25.321
And it's, so in HomeWorks, we're switching everything from PHP code over to React.
1819
01:48:25.961 --> 01:48:30.663
And it has been the bane of my existence because we're trying to...
1820
01:48:31.263 --> 01:48:31.783
Refactoring.
1821
01:48:31.803 --> 01:48:31.983
Yeah.
1822
01:48:32.003 --> 01:48:32.164
Yeah.
1823
01:48:32.204 --> 01:48:36.645
We've done it in piece by piece, but the core part that's still left is events.
1824
01:48:37.506 --> 01:48:38.446
Everything to do with.
1825
01:48:38.466 --> 01:48:41.367
Are you calling automations events like triggers and events or what is it?
1826
01:48:41.407 --> 01:48:46.310
Not the triggers, not the triggers, but the actual like recurring schedules is the biggest one.
1827
01:48:46.430 --> 01:48:47.590
Oh yeah.
1828
01:48:47.830 --> 01:48:48.050
Okay.
1829
01:48:48.090 --> 01:48:48.270
Okay.
1830
01:48:48.290 --> 01:48:48.490
Yeah.
1831
01:48:48.611 --> 01:48:51.112
It's so stuff that you can break everything.
1832
01:48:51.452 --> 01:48:52.452
It's so painful.
1833
01:48:52.472 --> 01:48:55.974
Cause it's so frustrating to explain.
1834
01:48:56.394 --> 01:48:58.415
Like this is the part where I feel so much more.
1835
01:48:59.335 --> 01:49:04.638
I feel everything I saw you go through and you just like, I'm just not going to explain this tech, the back end.
1836
01:49:04.738 --> 01:49:06.739
I'm just trying to try to make this as surface as possible.
1837
01:49:07.039 --> 01:49:11.861
It's so hard to explain to people when it's like I we've done a bunch of stuff like the customer report we broke off.
1838
01:49:11.901 --> 01:49:13.922
Then like the billing, we made sure that was solid.
1839
01:49:13.942 --> 01:49:15.703
We made sure just like all these parts.
1840
01:49:16.004 --> 01:49:18.165
But events is kind of kind of fundamental.
1841
01:49:18.445 --> 01:49:22.307
Like if you change a recurring visit and it's something disappears, that's a big problem.
1842
01:49:23.067 --> 01:49:24.049
And so you can't unwind.
1843
01:49:24.329 --> 01:49:25.851
It's such a rat's nest.
1844
01:49:25.971 --> 01:49:28.195
And then in one way, it's like, hey, we should go guns a blazing.
1845
01:49:28.435 --> 01:49:32.401
Guns a blazing still is going to take six weeks and it's going to be an absolute mess.
1846
01:49:32.781 --> 01:49:35.044
And I can't do that in the middle of the year or any time of the year.
1847
01:49:35.605 --> 01:49:36.727
And so that's my current.
1848
01:49:37.977 --> 01:49:40.961
Biggest problem is how do we slowly pull this thing apart?
1849
01:49:40.981 --> 01:49:46.547
The last part of the rat's nest, which is events, which is fundamentally why you have a CRM.
1850
01:49:46.968 --> 01:49:47.789
You can't mess it up.
1851
01:49:48.129 --> 01:49:51.894
But it's basically the downstream part of 80% to 90% of the, quote, issues.
1852
01:49:52.415 --> 01:49:54.217
And so, yeah, that's me commiserating.
1853
01:49:54.868 --> 01:49:55.889
Boy, do I understand.
1854
01:49:56.009 --> 01:49:59.973
Billing was that for us as well, because our billing was so, it was quite advanced.
1855
01:49:59.993 --> 01:50:03.757
Like you could bill weekly versus biweekly versus daily charge.
1856
01:50:03.937 --> 01:50:05.659
There was a lot going, prepayments.
1857
01:50:05.679 --> 01:50:09.923
I don't even know if you have to or need to deal with this stuff because we started so early.
1858
01:50:10.283 --> 01:50:16.349
You had the whole prepayment thing, you had deposits, you had like invoices where work was being worked down against the prepayment.
1859
01:50:16.409 --> 01:50:17.370
Have you had to do any of that?
1860
01:50:17.410 --> 01:50:18.591
Is there a demand for that these days?
1861
01:50:18.672 --> 01:50:18.972
Yeah.
1862
01:50:18.992 --> 01:50:19.132
So we,
1863
01:50:19.212 --> 01:50:22.653
We have like deposit thresholds, for example, but Stripe was able to bake that all in.
1864
01:50:22.673 --> 01:50:33.758
So the first thing we touched was billing because we could go to their new API and they basically have really allowed us to like pay in full deposit thresholds, a lot of stuff that they now baked in.
1865
01:50:34.210 --> 01:50:34.871
I forgot about that.
1866
01:50:34.891 --> 01:50:35.991
There was no Stripe when we built.
1867
01:50:36.012 --> 01:50:39.614
We literally wrote every line of code for all the billing and stuff.
1868
01:50:39.955 --> 01:50:41.236
So there was no Stripe back then.
1869
01:50:41.856 --> 01:50:43.157
And so...
1870
01:50:43.217 --> 01:50:46.900
When we went through BlogCal, it was like, what's the worst part that we have to address?
1871
01:50:46.960 --> 01:50:50.543
And we were like, billing is one of those things you can't mess up because it affects the customer.
1872
01:50:50.863 --> 01:50:54.246
And it also becomes a huge liability to the business, right?
1873
01:50:54.266 --> 01:50:54.426
Yeah.
1874
01:50:55.307 --> 01:50:55.507
Yeah.
1875
01:50:56.207 --> 01:50:58.669
Boy, I feel your pain.
1876
01:50:59.609 --> 01:51:00.530
All right.
1877
01:51:00.650 --> 01:51:01.570
Last question then.
1878
01:51:02.050 --> 01:51:03.691
Everyone wants to know that.
1879
01:51:04.111 --> 01:51:04.392
Okay.
1880
01:51:04.592 --> 01:51:07.713
So you mentioned, Elon, you mentioned hype.
1881
01:51:08.434 --> 01:51:11.595
The question is, are you going to be buying into the SpaceX IPO?
1882
01:51:11.715 --> 01:51:12.456
All right.
1883
01:51:12.856 --> 01:51:13.676
That's all we needed to know.
1884
01:51:13.956 --> 01:51:15.357
I'm on the same page.
1885
01:51:15.397 --> 01:51:16.518
I just feel like it's too hyped.
1886
01:51:16.878 --> 01:51:22.300
The way that the structure is with the, the way that the equity structure is just a little off to me.
1887
01:51:22.821 --> 01:51:23.061
So,
1888
01:51:23.581 --> 01:51:25.583
And the valuation is already going to be so rich.
1889
01:51:25.843 --> 01:51:26.483
There's so many...
1890
01:51:26.583 --> 01:51:28.185
I mean, it's not easy to double your money.
1891
01:51:28.765 --> 01:51:30.606
But there's so many ways to double money.
1892
01:51:31.207 --> 01:51:32.528
But to double your money there...
1893
01:51:32.588 --> 01:51:35.230
I mean, there's... Was it going to come out at a half a trillion?
1894
01:51:35.270 --> 01:51:36.291
One and a half trillion?
1895
01:51:36.371 --> 01:51:37.552
What's it going to IPO at?
1896
01:51:37.732 --> 01:51:38.292
Yeah, yeah.
1897
01:51:38.392 --> 01:51:39.673
And so then to go from there...
1898
01:51:39.913 --> 01:51:44.817
It's not that the company can't become more $10 trillion, but that's really hard for me to get my head around.
1899
01:51:45.197 --> 01:51:49.000
But even if it just goes to $4 trillion, it's only going to be a double.
1900
01:51:49.200 --> 01:51:52.543
There's a lot of places that I'm more...
1901
01:51:54.327 --> 01:51:58.450
But anytime I say crap, like stuff like this, like I'm always wrong.
1902
01:51:58.750 --> 01:52:00.251
I can't even believe what happened with Tesla.
1903
01:52:00.271 --> 01:52:02.633
When it hits 4 trillion, we'll be able to clip this.
1904
01:52:03.033 --> 01:52:04.034
It'll be awesome.
1905
01:52:04.574 --> 01:52:08.137
But now it feels, we, we, we talked about this.
1906
01:52:08.177 --> 01:52:09.738
I think it's unfortunate.
1907
01:52:09.758 --> 01:52:12.279
The markets, I think Google went at like 80 billion.
1908
01:52:12.460 --> 01:52:13.941
I think we talked about this.
1909
01:52:13.981 --> 01:52:16.022
Like when an IPO and I can't remember what the number was.
1910
01:52:16.382 --> 01:52:17.223
Maybe it was a lot more than that.
1911
01:52:17.263 --> 01:52:18.464
Maybe it was Microsoft that did that.
1912
01:52:18.984 --> 01:52:26.650
But it used to be that these companies IPO'd so early, you could get in and then still just become insanely wealthy off these stocks.
1913
01:52:27.371 --> 01:52:37.099
And so a lot of people think when they hear, oh, it's going to IPO, and they don't really understand valuations and market caps and all this, they just think about all the stories they've heard of.
1914
01:52:37.119 --> 01:52:38.180
Had I bought Amazon early?
1915
01:52:38.200 --> 01:52:39.321
Had I bought Microsoft early?
1916
01:52:39.621 --> 01:52:40.962
We don't live in that world anymore.
1917
01:52:41.102 --> 01:52:47.388
All the private equity guys and all the insiders, they got the bulk of all the growth and they made bulk of all the money
1918
01:52:48.434 --> 01:52:55.238
And so from the moment it goes public until whatever matures into, it's not like an old Microsoft or Amazon story.
1919
01:52:55.278 --> 01:52:56.519
And people don't understand that.
1920
01:52:56.539 --> 01:53:00.762
And so they don't understand that they're investing at a very, very different point.
1921
01:53:00.982 --> 01:53:13.589
Well, even like recently on Google's earnings, they came out with their earnings, but like almost, there's actually more than half of it was just paper gains from SpaceX, Anthropic, Stripe, and all their private investments.
1922
01:53:14.150 --> 01:53:16.751
And so when those companies IPO, it'll be Google.
1923
01:53:16.771 --> 01:53:17.092
Yeah.
1924
01:53:18.032 --> 01:53:20.473
Yeah, because they're a massive investor, aren't they, in SpaceX?
1925
01:53:20.493 --> 01:53:21.033
Yeah, huge.
1926
01:53:21.193 --> 01:53:21.393
Yeah.
1927
01:53:21.733 --> 01:53:21.933
Yeah.
1928
01:53:22.453 --> 01:53:23.873
So, no, I'm staying away from it.
1929
01:53:24.654 --> 01:53:30.195
I am a pretty – I mean, I make some bets, but I'm a pretty simple investor today.
1930
01:53:30.495 --> 01:53:31.775
I really believe in this idea.
1931
01:53:31.835 --> 01:53:33.156
You make your money in business.
1932
01:53:33.316 --> 01:53:36.957
You've been given this ability and gift in life to go build things.
1933
01:53:37.237 --> 01:53:38.377
You make your money in business.
1934
01:53:38.677 --> 01:53:41.418
You grow it through your investments, but you do it –
1935
01:53:42.038 --> 01:53:42.759
in a careful way.
1936
01:53:42.779 --> 01:53:45.201
You don't swing for the fences in your investments.
1937
01:53:45.561 --> 01:53:48.583
You more swing for the fences in your business is how I think about it.
1938
01:53:49.404 --> 01:53:50.525
That's my operating philosophy.
1939
01:53:50.545 --> 01:53:52.646
So I'm heavy equities.
1940
01:53:52.847 --> 01:53:56.289
So some people might still see that as a lot of risk.
1941
01:53:56.790 --> 01:53:59.392
But I am kind of careful about how I do a
1942
01:54:02.494 --> 01:54:04.295
Yeah, no, that's fantastic.
1943
01:54:04.315 --> 01:54:10.259
Well, we'll go ahead and wrap it up until we hear from a better comment of a better name for Jonathan.
1944
01:54:10.319 --> 01:54:11.760
It's going to be Sultan of Service.
1945
01:54:12.380 --> 01:54:13.801
But we're open to ideas.
1946
01:54:13.941 --> 01:54:14.581
We're open to ideas.
1947
01:54:14.601 --> 01:54:15.362
So comment below.
1948
01:54:15.882 --> 01:54:17.783
And I'm open to ideas too for myself.
1949
01:54:17.863 --> 01:54:18.744
I don't know what it would be.
1950
01:54:18.764 --> 01:54:20.805
Yeah, you've started something here.
1951
01:54:20.825 --> 01:54:21.906
I'm gonna have to think about this now.
1952
01:54:21.926 --> 01:54:22.926
I didn't know you were gonna do this.
1953
01:54:23.547 --> 01:54:24.167
Down in the comments.
1954
01:54:24.187 --> 01:54:25.007
I'm sure they'll let us know.
1955
01:54:25.027 --> 01:54:26.308
Appreciate you coming on, Jonathan.
1956
01:54:26.989 --> 01:54:27.389
Likewise.
1957
01:54:27.809 --> 01:54:28.029
Cool.
1958
01:54:28.249 --> 01:54:28.670
See you later.
1959
01:54:28.910 --> 01:54:29.250
See you later.
1
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57% of revenue went to wages after the owner was paid.
2
00:00:06.315 --> 00:00:10.098
The number one offender on a P&L across almost every single company is labor.
3
00:00:10.178 --> 00:00:16.082
And if you drive down labor, that's the biggest lever that you can pull on to move the needle in the business.
4
00:00:16.182 --> 00:00:23.426
I would far prefer you spend every extra dollar you have just dialing in the operations.
5
00:00:23.466 --> 00:00:25.468
You can find agencies that can...
6
00:00:26.088 --> 00:00:27.529
get you moving in the right direction.
7
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It is a great product.
8
00:00:28.569 --> 00:00:30.811
Like when we swapped, everyone likes it.
9
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It solves about 81% of all incoming tickets.
10
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They are happy.
11
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Like they say, yes, that was a good experience.
12
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As an entrepreneur, if you want to play this game, you have to accept that all kinds of stuff is going to get thrown at you and you're going to have to bob and weave and pivot.
13
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It's getting compressed and you've got to be willing to bob, weave, change, learn faster than you've ever done it.
14
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They'll be the ones that in 10 years, like they're the biggest companies.
15
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Yeah.
16
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It's all opportunity.
17
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I think people in home services have almost nothing to worry about right now.
18
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Well, the all in podcast, when we listen, they have, you know, I had to channel my Jason Calacanis because he has names for everyone.
19
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You know, you have the Sultan of Science.
20
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You have, what is it?
21
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The Rain Man, David Sachs.
22
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Freeberg is the Sultan of Science.
23
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So I had to figure out what was JP's name going to be.
24
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The best I came up with was the Sultan of Service.
25
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Of Service, okay.
26
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That's my world.
27
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So we're going to have to come up with names.
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I think for everyone listening, you're going to have to help us out down below.
29
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I asked ChattoBT.
30
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We got the Turf Titan.
31
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We got the Baron of Bugs, but I didn't know if Bugs.
32
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No, I don't think that's it.
33
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The King of Chemicals.
34
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No, I'll pass on that one.
35
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The Cashflow Cowboy.
36
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So, you know, we have the Sass Sodfather.
37
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You know, kind of mixing software and lawn care.
38
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But it's still workshopping it.
39
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All right.
40
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That's cool.
41
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I like the first one the best so far.
42
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I was listening to last week's episode while I was working out this morning.
43
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Of you and I?
44
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Of you and I.
45
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It launched this morning.
46
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So I went ahead and listened to it while I was working out.
47
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And it was funny because I was like, you know, I need an icebreaker.
48
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I need to like jab him with something.
49
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Get him off of his guard a little bit, you know.
50
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too many safe questions.
51
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And then it came to the part where you're talking about loom and you slide, you slide this one little part in there about how you use loom.
52
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When you commissioned an artist to do a painting for you, I had a commission, a painting commissioned one time.
53
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I, well, I've done that many times, but a painting commission, I literally to the artist, like, Hey, I don't like this.
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I don't like this.
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Can you change?
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I do it with loom.
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Like,
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And so my first thought, I'll be honest, was like, you know, we all need to be instructed how we commission an artist.
59
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That's where my head went.
60
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Right.
61
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Okay.
62
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So I started going down this rabbit hole while I'm working out.
63
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And lo and behold, I look on the latest subscribers to the Mike Andes channel and I see John Potoshnik.
64
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My dad.
65
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Yeah.
66
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Never had seen that in my life before.
67
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And so I ended up watching, well, listening to a four years old, four years ago, your dad, Riley's grandfather, interviewing him four years ago about web design and art, etc.
68
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And then I went down the rabbit hole.
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I had to watch some of your dad's videos.
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It was fantastic.
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And I have to ask the commissioning of the artist because his whole channel is about painting.
72
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Yeah.
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Is that actually your dad or no, give us the world of what it looks like to commission an artist.
74
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Okay.
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You know, that was a crazy example to use.
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And I just say what pops into my head sometimes.
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And I guess that popped into my head.
78
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So my whole life, I grew up in the art world and my dad's been an artist.
79
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My mom stayed home and my dad's been an artist.
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He made his living painting paintings.
81
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Mm-hmm.
82
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putting them in galleries and selling them.
83
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So while he wasn't a business owner like you and I are, he was a business owner in a sense.
84
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He was an artist.
85
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And I've always thought that was maybe one of the most influential, important things in my life.
86
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I didn't see him go to an office.
87
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We had a studio, but I saw him do his own thing.
88
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So I never thought I had to get a job.
89
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So I grew up in this art world.
90
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And so I appreciate art.
91
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Like when I was little, my dad would say, he'd bring a painting into the house from the studio.
92
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I was like, what do you see first?
93
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Like he'd ask me all these questions.
94
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And that stuff has bled through to how I think about marketing and such.
95
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And so I was like,
96
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As I've gotten older and ended up with money, I like art.
97
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If you were at my house the other day, but you didn't come in, next time you'll have to come in.
98
00:04:32.810 --> 00:04:34.071
My house is full of art.
99
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I have tons of art.
100
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I'm sure our friends are not quite into art like me.
101
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Like, why do you have these kind of paintings?
102
00:04:40.635 --> 00:04:41.695
I just grew up in that world.
103
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And so I have art everywhere.
104
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So...
105
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We have two really great couple friends.
106
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This particular painting that came to mind, we have two really great couple friends that we've known since our boys were essentially born.
107
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And we've traveled in different countries together.
108
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We do stuff together all the time.
109
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And we have a picture from New York of us all at a dinner toasting with like wine glasses.
110
00:05:03.597 --> 00:05:03.918
Yeah.
111
00:05:04.258 --> 00:05:10.224
And so we were in Telluride one time, Tiffany and I and the boys, and there's this restaurant, All Reds in Telluride.
112
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And when you walk in, there's an artist with a painting of glasses posting.
113
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I basically, you know, the way you commission a painting is you track down an artist and say, hey, I want to commission you to paint me a painting.
114
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Most of them will do it.
115
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This is what I have in mind.
116
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And so that was the idea.
117
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I told him what I had in mind.
118
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I sent him some pictures of this moment we all had in New York.
119
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And then I used Loom to go back and forth because I grew up in the art world.
120
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Like he might paint something and I don't like the hand.
121
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Stuff you would never notice normally, but I notice it.
122
00:05:42.600 --> 00:05:44.220
And so that's why I had to go back and forth.
123
00:05:44.240 --> 00:05:50.521
But my dad's recently did a painting of Sylvania, a really neat place that Tiffany and I like.
124
00:05:52.902 --> 00:05:56.045
I've got a big commission of, I've got four commission paintings.
125
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Wow.
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I think.
127
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Yeah.
128
00:05:58.026 --> 00:05:59.848
Cause this account had 5,000 subscribers.
129
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I'm like, you know, maybe Jonathan has the, the, the five for 50.
130
00:06:03.871 --> 00:06:09.035
And then this other account that he uses to sleuth around on YouTube, but sure enough, it was your dad.
131
00:06:09.055 --> 00:06:10.636
And it was, it was, uh, quite enjoyable.
132
00:06:10.656 --> 00:06:12.077
I sent one of the videos to Brianna.
133
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I was like, you got to check this out.
134
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This is like, this is awesome.
135
00:06:15.179 --> 00:06:18.980
Yeah, my dad got into the whole doing, he's got several books.
136
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He's got art books.
137
00:06:19.921 --> 00:06:21.401
He's got DVDs that teach people.
138
00:06:21.781 --> 00:06:23.402
A lot of people call him the artist's artist.
139
00:06:23.442 --> 00:06:25.943
He teaches a lot of people to paint at a high level.
140
00:06:26.403 --> 00:06:29.664
And so he's made a really incredible career out of what he's done.
141
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He's very successful.
142
00:06:30.944 --> 00:06:31.445
And so-
143
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My brother and I kind of got him into this idea of doing YouTube stuff.
144
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And I just wish he could have done it, you know, 30 years.
145
00:06:41.077 --> 00:06:45.280
Well, not YouTube, but you know, started this way back when, because I think he would have done phenomenal.
146
00:06:45.741 --> 00:06:49.163
Like if he had been doing this kind of stuff back in the early days of YouTube.
147
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It felt like he enjoyed it.
148
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Like that's why he does.
149
00:06:51.403 --> 00:06:51.543
Yeah.
150
00:06:51.563 --> 00:06:54.324
He just like, he enjoyed the process of educating.
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And that's the part that I kind of felt like was the through line to you when it came to business, which is like the enjoyment of not just creating, but then sharing and educating.
152
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I'm sure I got it from dad.
153
00:07:04.986 --> 00:07:13.448
Like growing up, he was, he would teach Bible studies and at church, he was teaching classes and then he would teach people will fly him in to teach art, uh,
154
00:07:14.278 --> 00:07:19.544
They'll bring in lots of people and he'll teach art from the front of a room and teach people how to paint like other artists.
155
00:07:19.985 --> 00:07:24.270
And so he's always done that in addition to being an artist as his real career.
156
00:07:24.330 --> 00:07:28.295
So I'm sure that largely impacted who I became.
157
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That's very cool.
158
00:07:29.393 --> 00:07:47.862
Well, I want to start the podcast off with that, but I thought what would be fun each week when we come together is kind of starting off, instead of just jumping right into the docket, is talk about something we're currently working on, whether it be something this week we're working on or that we have learned, like very, as narrow as possible.
159
00:07:48.542 --> 00:07:52.704
And even if it's something that we're not currently, we have not fixed or solved yet.
160
00:07:52.744 --> 00:07:55.626
So I'll start it off if you want to, if you don't mind right after.
161
00:07:55.946 --> 00:07:56.426
Yeah, please.
162
00:07:56.626 --> 00:07:58.267
But mine's somewhat embarrassing.
163
00:07:58.607 --> 00:08:05.989
So a few months ago, we switched the chat support for HomeWorks to Intercom.
164
00:08:06.529 --> 00:08:07.710
And so Intercom is very smart.
165
00:08:07.730 --> 00:08:15.652
They have changed the way they do billing to per resolution instead of per seat basis, like some sort of subscription, as they've seen AI go the way it has.
166
00:08:15.752 --> 00:08:20.474
And so basically, they're incentivized to ensure that they solve as many chats as possible for you.
167
00:08:21.334 --> 00:08:28.022
Well, the problem is I kept having members being like, hey, I've been reporting this bug for months.
168
00:08:28.783 --> 00:08:31.426
And I'd go in the back and I'm like, I don't see this anywhere.
169
00:08:31.446 --> 00:08:32.448
Like, no, there's no report.
170
00:08:32.468 --> 00:08:34.270
There's I don't see them reporting this anywhere.
171
00:08:34.310 --> 00:08:34.490
Why?
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00:08:34.510 --> 00:08:36.492
Like, I don't call you a liar, but I don't see it.
173
00:08:37.333 --> 00:08:40.575
And sure enough, this week I go in there like, you know, I'm going to try submitting a bug.
174
00:08:41.315 --> 00:08:50.719
And the AI was basically caught in this loop of telling me to report the bug in the chat, but never actually taking it, creating a report for the human to see.
175
00:08:51.559 --> 00:08:52.680
Oh, it was so annoying.
176
00:08:52.740 --> 00:08:53.720
I was so frustrated.
177
00:08:53.821 --> 00:08:54.801
So we fixed it.
178
00:08:55.221 --> 00:08:58.903
But for probably the past three months, there have been times people thought they reported something.
179
00:08:59.503 --> 00:09:02.185
The AI is like, oh, yeah, definitely, this is how you report a bug.
180
00:09:02.305 --> 00:09:02.705
Right here.
181
00:09:02.925 --> 00:09:03.426
Copy that.
182
00:09:03.566 --> 00:09:03.906
Right here.
183
00:09:04.346 --> 00:09:04.927
And you would do it.
184
00:09:04.947 --> 00:09:05.767
And like, thank you.
185
00:09:05.787 --> 00:09:07.748
Did you submit a ticket?
186
00:09:08.309 --> 00:09:09.930
And it was not going through to the humans.
187
00:09:10.270 --> 00:09:15.514
All that being said, I think the takeaway was you have to keep testing
188
00:09:16.294 --> 00:09:23.401
the core loops of the product just to make sure as a sanity check, that's actually working like your estimate forms on your website.
189
00:09:23.421 --> 00:09:25.744
Are they still actually calling your office?
190
00:09:25.944 --> 00:09:26.224
It's funny.
191
00:09:26.244 --> 00:09:30.688
Cause I was like, immediately he acted like, I will call the office occasionally just to see how things are going.
192
00:09:30.709 --> 00:09:32.951
I'm like, okay, this is the exact same thing.
193
00:09:33.331 --> 00:09:35.714
I cannot trust this AI to do its thing without, uh,
194
00:09:36.394 --> 00:09:38.936
Anyways, that was my learning of the week.
195
00:09:39.296 --> 00:09:40.036
So interesting.
196
00:09:40.056 --> 00:09:41.177
I got to ask you a couple of questions.
197
00:09:41.197 --> 00:09:42.458
So intercom.
198
00:09:42.498 --> 00:09:46.460
So I had originally been considering intercom or podium for CityTurf.
199
00:09:46.540 --> 00:09:50.743
And then when Riley started working on every chat, because I'm so close to it, I knew where it was going.
200
00:09:50.763 --> 00:09:51.023
I was like...
201
00:09:51.863 --> 00:09:55.444
man, I'd get faster results if I went straight to Podium or Intercom.
202
00:09:55.464 --> 00:09:59.445
But if I go this route, I'll ultimately get exactly what I want.
203
00:10:00.565 --> 00:10:04.127
And the reason I tell you that is, so I've paid a lot of attention to Intercom.
204
00:10:04.647 --> 00:10:06.527
And I was listening to a podcast the other day.
205
00:10:06.587 --> 00:10:14.029
And he said, since they've introduced, and I think I'm repeating this right, since they've introduced AI functionality and their billing per case, their revenue has got up $100 million.
206
00:10:14.049 --> 00:10:16.150
Yeah, was that was the Stripe founder?
207
00:10:17.406 --> 00:10:18.746
I don't remember who I was listening to.
208
00:10:18.807 --> 00:10:19.907
Yeah.
209
00:10:20.407 --> 00:10:22.348
I don't think it was the Stripe founder because I know who he is.
210
00:10:22.488 --> 00:10:22.908
Okay.
211
00:10:22.968 --> 00:10:25.709
It might've been, but I thought it was like fascinating.
212
00:10:25.749 --> 00:10:30.411
They had a great podcast, founder of Stripe or co-founder of Stripe and then the founder of Intercom.
213
00:10:30.691 --> 00:10:34.432
And yeah, similar vein of thought, but it is a great product.
214
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Like when we swapped, everyone likes it.
215
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It's just the fact, and it solves about 81% of all incoming tickets.
216
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Okay.
217
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And we consider solved as they are happy.
218
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Like they say, yes, that was a good experience.
219
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And then they end the chat.
220
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But yeah, all that to say, nonetheless, still got to inspect what you expect.
221
00:10:55.527 --> 00:10:57.389
That was a very good story.
222
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The thing that came to mind as soon as you said it, so I guess I'll just go with it, is I'm working on...
223
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marketing for CityTurf.
224
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That's where I'm spending the majority of my time, like most all of my time.
225
00:11:11.925 --> 00:11:18.154
However, I've been for a long time now really obsessed with what's happening in AI
226
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and especially what's happening in code.
227
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And since my background is in software, and I love software at the end of the day.
228
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I want to not love it, but I still love it.
229
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And then because Riley, for those that don't know, I have my oldest son, his name's Riley.
230
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He's done lots of things and he decided he wanted to build a software business at one point.
231
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And so we talk about it all the time, his software business.
232
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And I love software.
233
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He probably gets annoyed by all my advice.
234
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Like,
235
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Back when I did this, or this is what I learned, or don't do it this way.
236
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This is how we did it.
237
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Like he hears all that stuff.
238
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I'm sure he gets tired of it.
239
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But anyway, I'm so obsessed with where software is going that I decided to try my hand at building my own entire estimating system.
240
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Not like a little estimating system, like more than even what SA did.
241
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And SA's estimating system was a lot of work.
242
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It's very, very flexible.
243
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And yeah.
244
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I am amazed.
245
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Yeah.
246
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Oh my gosh.
247
00:12:16.181 --> 00:12:19.904
I mean, I don't know how to write code anymore.
248
00:12:20.585 --> 00:12:24.288
I still argue people should not be writing their own software.
249
00:12:24.808 --> 00:12:30.253
I'll bet just in the design of this, I have at least 60 hours trying to think through it.
250
00:12:30.333 --> 00:12:31.694
And I have this massive advantage.
251
00:12:31.734 --> 00:12:32.615
I did serve a subtle pilot.
252
00:12:32.935 --> 00:12:36.419
I can hear in my sleep everything everybody hated about us.
253
00:12:37.319 --> 00:12:38.460
everything everybody wanted.
254
00:12:38.480 --> 00:12:40.823
You're like, so I have a lot and I know how we built some of this stuff.
255
00:12:40.843 --> 00:12:42.324
I know what to do, not what to do.
256
00:12:42.504 --> 00:12:44.106
I'm not trying to build a service autopilot.
257
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I just wanted to see if I could build a estimating system.
258
00:12:47.809 --> 00:12:53.454
And I haven't actually even got to the code phase yet, but I've built all of the front end.
259
00:12:53.955 --> 00:12:55.316
Why, you know, all the designs.
260
00:12:55.356 --> 00:13:00.741
I've got a 56 page document of everything that has to get built, like all the rules and everything.
261
00:13:00.761 --> 00:13:01.122
Yeah.
262
00:13:01.828 --> 00:13:06.532
It just, I guess my summary is I've been distracted from the things I should be working on, which is city turf.
263
00:13:08.113 --> 00:13:12.497
And I've been staying up super late working through the weekend, but it is so unbelievable.
264
00:13:12.637 --> 00:13:12.897
Oh, yeah.
265
00:13:13.077 --> 00:13:14.919
That, I mean, and I already knew it going into it.
266
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I just continue to be more and more and more amazed.
267
00:13:17.901 --> 00:13:21.864
The thing that I'm super fascinated and excited about is the fact that,
268
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even once you develop, let's just take off account for the fact that it's going to take 200 hours to build the thing.
269
00:13:28.508 --> 00:13:32.372
Once it's done, though, that it would be very useful for you.
270
00:13:32.392 --> 00:13:38.258
I think the part that I get worried about, like we talked about last week, is like when people are like, oh, I should allow other people inside of this.
271
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That's when it starts becoming a bag of...
272
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of problems potentially.
273
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But like, yeah, for if you're like, Hey, I'm going to use this tool in my business, because I do estimating this very specific way.
274
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That's where I feel like this is just so much opportunity.
275
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And yes, the the the amount of sleep I have required, the more excited I get with AI just continues to amaze me.
276
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Exactly.
277
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Yeah.
278
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So I mean, I just it's so amazing.
279
00:14:03.258 --> 00:14:03.819
But I
280
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Like, for example, I'm building this estimating thing just to see if I can do it, improve it out.
281
00:14:11.254 --> 00:14:14.375
But we would never actually use a self-contained estimating system at CityTurf.
282
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It makes, like, no sense.
283
00:14:16.275 --> 00:14:19.056
And so it's got to be wired into everything else for it to be great.
284
00:14:19.116 --> 00:14:21.497
So it's more of a project where I'm trying to see what's possible.
285
00:14:21.937 --> 00:14:26.018
The last thing I'll say on this is I just continue to see what I've already believed.
286
00:14:26.518 --> 00:14:29.839
If you're building from the ground up and it's very contained...
287
00:14:30.912 --> 00:14:32.253
It's really, really amazing.
288
00:14:32.293 --> 00:14:44.040
But as soon as you have to start re-architecting the underlying structure or fixing problems, or now you've got all this different functionality, you're trying to put more functionality into something to exist, that's when it can get off the rails.
289
00:14:44.180 --> 00:14:46.562
It can work, but it is not a cakewalk.
290
00:14:46.702 --> 00:14:50.464
If you're building something from scratch and you never have to touch it again, probably going to work out pretty good.
291
00:14:50.744 --> 00:14:55.167
It's the next phase that may make you hate having built your own AI software.
292
00:14:55.287 --> 00:14:57.549
The fun part is the front end and like stack.
293
00:14:57.569 --> 00:14:58.250
Everything else sucks.
294
00:14:58.310 --> 00:15:05.077
As soon as you put full stack, put it back in user management and secure, like they just, oh man, now you're getting ugly.
295
00:15:05.097 --> 00:15:09.361
And then it takes way longer for the props to go through because it's gotta do so much more engineering.
296
00:15:10.114 --> 00:15:11.696
Oh, it gets expensive when you get to that part.
297
00:15:11.716 --> 00:15:12.716
Yeah, exactly.
298
00:15:12.736 --> 00:15:14.218
So anyway, that's what I'm doing.
299
00:15:14.238 --> 00:15:15.199
And it's like, it's fun.
300
00:15:15.379 --> 00:15:16.279
I mean, it's a fun time.
301
00:15:16.440 --> 00:15:18.561
Let's go ahead and jump into fuel surcharges.
302
00:15:18.622 --> 00:15:20.503
I had sent an email about this a couple weeks ago.
303
00:15:20.523 --> 00:15:21.284
You did, and I, yeah.
304
00:15:21.304 --> 00:15:21.804
You made a note of it.
305
00:15:21.824 --> 00:15:22.965
So go ahead and tee this one up.
306
00:15:23.125 --> 00:15:25.147
I saw your email about fuel surcharges.
307
00:15:25.567 --> 00:15:29.971
And I just remember battling this all the time back in the days with Service AllPilot.
308
00:15:30.512 --> 00:15:32.674
People would like, you got to build surcharges into software.
309
00:15:32.694 --> 00:15:34.455
And we have 90 other things on the roadmap.
310
00:15:34.535 --> 00:15:37.198
And it always kind of conflicted with my general belief
311
00:15:37.878 --> 00:15:49.630
It's not that I can argue on one hand that you should pay really close attention to your P&L, and you should, and so you should constantly be fixing these holes and these leaks because that preserves profit margin.
312
00:15:50.111 --> 00:15:50.531
But I...
313
00:15:51.628 --> 00:16:00.831
have a different opinion than many on how much you worry about fuel prices and therefore implement a fuel surcharge.
314
00:16:00.851 --> 00:16:02.011
So let me kick it over to you.
315
00:16:02.051 --> 00:16:03.691
Like, what have you thought about over time?
316
00:16:03.751 --> 00:16:07.693
And maybe you could talk a little bit of that email and give a little more color around it.
317
00:16:07.953 --> 00:16:08.393
Obviously...
318
00:16:09.313 --> 00:16:14.978
the price is up about 50% on average from just a couple months ago before the whole war in Iran.
319
00:16:15.458 --> 00:16:18.801
And so when it goes up that fast, I think is what everyone freaks out about.
320
00:16:19.001 --> 00:16:24.745
But actually, it was higher in 2022 in terms of the average cost per gallon.
321
00:16:24.985 --> 00:16:28.568
It's just that it kind of trickled up after COVID for about 12 months.
322
00:16:28.828 --> 00:16:32.231
So it's this really fast ramp that everyone all of a sudden gets their attention.
323
00:16:32.751 --> 00:16:32.952
But...
324
00:16:33.703 --> 00:16:35.706
what, cause I, I have the same inclination to you.
325
00:16:35.726 --> 00:16:39.532
And it's funny because I put our, uh, our last, uh, transcript into AI.
326
00:16:39.572 --> 00:16:41.054
I'm like, Hey, how can we make this more entertaining?
327
00:16:41.075 --> 00:16:43.558
It's like, you always need to disagree about more things.
328
00:16:43.879 --> 00:16:45.121
I'm like, but it's so hard.
329
00:16:45.662 --> 00:16:46.002
I know.
330
00:16:47.444 --> 00:16:48.746
But, uh, when it comes, when it comes,
331
00:16:49.307 --> 00:16:55.391
To what happened, and I saw all of it blowing up on social media and people talking about how do I increase prices by 3%, 4%.
332
00:16:55.951 --> 00:16:58.813
I'm like, instead of getting mad about it and just saying my opinion, let's go to the data.
333
00:16:58.833 --> 00:17:05.298
So that's when I went back through and I keep all financials I've ever looked at from all different industries across the turnaround show.
334
00:17:05.598 --> 00:17:06.899
And I have thousands of them.
335
00:17:06.919 --> 00:17:09.861
So I took everything from 2025 and there's about just over 600.
336
00:17:09.881 --> 00:17:09.981
Yeah.
337
00:17:10.861 --> 00:17:15.203
And it was everything ranging from about 300,000 in revenue to 14 million.
338
00:17:15.743 --> 00:17:18.344
And I looked across the whole board, ran it through the LLM.
339
00:17:18.364 --> 00:17:20.405
I always whitewash like the business information.
340
00:17:20.485 --> 00:17:22.526
But I have all the P&Ls.
341
00:17:23.307 --> 00:17:27.949
And so when it came through, what was really interesting was 57% of revenue.
342
00:17:30.710 --> 00:17:33.272
went to wages after the owner was paid.
343
00:17:33.692 --> 00:17:37.175
Now, that's a huge blended average of size of business.
344
00:17:37.736 --> 00:17:42.740
Whereas the, I think exactly, I think it was about four to 5% was fuel on average.
345
00:17:42.760 --> 00:17:44.281
It was like four point something, I think.
346
00:17:44.781 --> 00:17:45.121
And so-
347
00:17:45.962 --> 00:17:49.263
When I saw that, I'm like, are we really attacking the wrong problem?
348
00:17:49.323 --> 00:17:55.725
Because if we went from, you know, last year, 4% and this year becomes 6% because it goes up 50%, is that the problem?
349
00:17:55.825 --> 00:18:07.730
Or is it the fact that it's 57% of our revenue is going out to labor and we should figure out like route density or making this more efficient or figure out an incentive program or something to get that 57% down to 50%.
350
00:18:09.510 --> 00:18:10.891
So yeah, that's where my mindset goes.
351
00:18:11.452 --> 00:18:17.697
And I think it's, we also all look at the news and the headlines and it's much more fun to get anxious about those things.
352
00:18:17.857 --> 00:18:18.177
Yeah.
353
00:18:18.638 --> 00:18:19.939
So I've got two points on this one.
354
00:18:19.959 --> 00:18:23.481
And my first one is just unfortunately complete agreement with your position.
355
00:18:23.962 --> 00:18:28.565
And what I would say, and I just say it a different way than you're saying it, which I agree with is,
356
00:18:29.466 --> 00:18:38.392
what you're doing in business or what the ideal to do in business is to constantly be thinking about what are the issues in our business that then create the opportunities.
357
00:18:38.452 --> 00:18:40.774
And you're sort of doing the stack ranking exercise.
358
00:18:41.394 --> 00:18:43.295
There will never be a moment we can do it all.
359
00:18:43.455 --> 00:18:47.098
You know, as you know, it's like just a few things can fit into our quarter or a month.
360
00:18:47.718 --> 00:18:49.879
And every team member can do only so many things.
361
00:18:49.899 --> 00:18:51.420
So what are the biggest offenders?
362
00:18:51.460 --> 00:18:53.161
I think that's the gist of your arguments.
363
00:18:53.181 --> 00:19:04.566
Like, it's not a disagreement that, yeah, if there's now a two point difference on the P&L, that means if this were to persist an entire year, it would hit your net by 2% or by two points.
364
00:19:05.106 --> 00:19:07.147
That's meaningful, like, especially as you get bigger.
365
00:19:07.167 --> 00:19:08.048
But yeah,
366
00:19:09.163 --> 00:19:16.745
Your argument is the reason I agree with it is because the number one offender on a P&L across almost every single company is labor.
367
00:19:16.845 --> 00:19:22.746
And if you drive down labor, that's the biggest lever that you can pull on to move the needle in the business.
368
00:19:22.786 --> 00:19:29.148
And so every time you look at your P&L and say, I've got an offender, oh, fuel's an offender, I can show you four other bigger offenders.
369
00:19:29.228 --> 00:19:32.208
So why would you work on that one before you work on the other ones?
370
00:19:32.228 --> 00:19:34.489
And I think that's a gist of what you're saying.
371
00:19:34.810 --> 00:19:39.494
Yeah, like labor is so expensive, but so easy to discount because we just get to know each other's people.
372
00:19:39.514 --> 00:19:46.240
But when you actually look at the P&L, it's like, for example, when we got this head, the headquarter building, the office, it was like, OK, this is really expensive.
373
00:19:46.260 --> 00:19:47.581
This is like double our rent.
374
00:19:47.862 --> 00:19:50.064
And I was like, wait a second, this is cheaper than one engineer.
375
00:19:50.604 --> 00:19:55.709
And I would hire another engineer like in a flash tomorrow if I saw the need for them.
376
00:19:56.629 --> 00:19:59.250
But for for rent, it seems like this huge expense.
377
00:19:59.610 --> 00:20:03.531
But from a when you actually compare it to labor, it's somewhat inconsequential.
378
00:20:03.891 --> 00:20:06.892
And so I've even seen people where they're like, well, I've got this shop space.
379
00:20:06.912 --> 00:20:11.993
I can rent it for two thousand dollars and it's outside town about 15, 20 minutes from all my customers.
380
00:20:12.453 --> 00:20:15.814
Or there's one very central for three or four grand.
381
00:20:15.854 --> 00:20:17.974
But we don't want to spend the extra thousand or two thousand dollars a month.
382
00:20:18.254 --> 00:20:25.096
But I'm like, look, if you just extrapolate across 20 employees, you're paying probably six or seven thousand dollars in additional labor.
383
00:20:25.256 --> 00:20:26.477
Initial labor, wind chill time.
384
00:20:26.517 --> 00:20:33.599
And so, yeah, I think it's just it's so easy to get focused on the loudest problem instead of the biggest problem.
385
00:20:34.280 --> 00:20:36.541
And I'll add one more idea to this.
386
00:20:37.321 --> 00:20:41.543
And that is I don't know how many listening will remember these days again.
387
00:20:42.263 --> 00:20:43.223
I feel like I'm getting old.
388
00:20:43.484 --> 00:20:49.106
But I remember when I was young, sitting at the kitchen table at night, having dinner with my parents and the phone would ring.
389
00:20:50.006 --> 00:20:51.187
It's the telemarketer world.
390
00:20:51.607 --> 00:20:55.469
So if you've had, you could think about on your cell phones, you can just ignore them.
391
00:20:55.489 --> 00:20:57.410
But back in the day, the house phone would ring or whatever.
392
00:20:57.430 --> 00:20:58.650
There'd be like this interruption.
393
00:20:58.990 --> 00:21:04.513
Or you could think about for many people, unless you're, if you're door knocking and you make money door knocking, you like door knocking.
394
00:21:04.533 --> 00:21:08.214
But if you're on the other side of that, you hate door knockers, like everybody.
395
00:21:08.514 --> 00:21:10.615
So door knocking is like telemarketing to me.
396
00:21:10.655 --> 00:21:11.416
They're the same thing.
397
00:21:12.316 --> 00:21:20.147
And so where I'm going with this is I believe that like True Green used to just telemarket all the time.
398
00:21:21.049 --> 00:21:27.398
And I remember even before I was ever in the law, well, I guess I mowed lawns through high school, but I remember thinking True Green sucks.
399
00:21:27.838 --> 00:21:36.322
They always call you at your house, you know, and I kind of think about that with the door knockers, except I like the door knockers Activa or whoever was just came to my house yesterday, I engaged with all of them.
400
00:21:36.682 --> 00:21:49.928
But if I was if it wasn't me being interested in talking to these guys, like they're you I was doing something work wise, and you just broke my concentration like, and so where the point here is this, over time, do certain activities in a business?
401
00:21:50.688 --> 00:21:52.129
This is a big buildup to make a point.
402
00:21:52.309 --> 00:21:58.314
Do they create this like a little bit of annoyance, like subtle annoyance with the company?
403
00:21:58.575 --> 00:22:01.817
I'll use the True Green Telemarketing or Scott's Telemarketing.
404
00:22:01.837 --> 00:22:07.202
And then when you get their door hangers, like the first thing you think of, these are the guys that call me every night when we're eating dinner.
405
00:22:07.762 --> 00:22:09.363
versus somebody else that doesn't do that.
406
00:22:09.383 --> 00:22:13.726
So do these little annoyances build that you can't as an owner put your finger on?
407
00:22:13.746 --> 00:22:16.027
You don't quite know they're happening, but they slowly build.
408
00:22:16.408 --> 00:22:24.293
If you want to own your company for a very, very long time, they're a drag on the success of your marketing, your ability to slow, close, your sales rate, all that.
409
00:22:24.833 --> 00:22:28.315
This is a little bit of my argument with fuel surcharges.
410
00:22:29.376 --> 00:22:32.578
There are these little penalties where the client...
411
00:22:34.122 --> 00:22:38.185
they can rationalize, oh, I get it because I'm feeling it at the pump, but it still feels like nickel and diming.
412
00:22:39.206 --> 00:22:45.651
I mean, I can think of the number of times in service autopilot years where people would forget to include sales tax, for example, on an estimate.
413
00:22:45.831 --> 00:22:46.872
It wasn't a service autopilot problem.
414
00:22:46.892 --> 00:22:50.155
They just forgot to add it, and their customer would make them eat it.
415
00:22:51.255 --> 00:22:55.760
And so, and they ate it because if they made the customer eat it, they're afraid they'd never do business with them again.
416
00:22:55.780 --> 00:22:57.282
There's all these little things.
417
00:22:57.682 --> 00:23:03.128
Another example would be over time, there's companies like traditional private equity comes in and what do they do?
418
00:23:03.189 --> 00:23:06.432
Not all of them, there's good private equity, but a lot of private equity is trying to optimize price.
419
00:23:06.632 --> 00:23:09.335
They start cutting customer service in the phone call.
420
00:23:10.176 --> 00:23:11.197
the who's answering the phone.
421
00:23:11.217 --> 00:23:24.765
So then a company that's competing that always answers their phone live and has great people and can always, they start to slowly get the better reputation where the companies who are, yeah, maybe you're making more profits and whoever owns the company is looking at the P&L is like, this company's killing it.
422
00:23:24.785 --> 00:23:25.385
This is so good.
423
00:23:25.405 --> 00:23:26.265
This was a good decision.
424
00:23:26.526 --> 00:23:29.868
But you degrade the reputation of the company over years and years.
425
00:23:30.588 --> 00:23:35.331
That's a little bit of my argument, not specific to fuel charges, but a lot of these little decisions we can make
426
00:23:36.071 --> 00:23:38.013
I don't know the tax that I just incurred.
427
00:23:38.053 --> 00:23:39.934
Like, great, I recovered 2% this year.
428
00:23:40.174 --> 00:23:41.075
And it wasn't even going to be all year.
429
00:23:41.095 --> 00:23:42.616
It's probably going to be a four-month hit.
430
00:23:43.036 --> 00:23:46.159
I recovered it, but I did a little bit of damage to my reputation.
431
00:23:46.699 --> 00:23:50.882
And now my market, and I do this a couple times, now my marketing costs me just a little bit more.
432
00:23:51.282 --> 00:23:53.104
My conversion is a little bit lower.
433
00:23:53.224 --> 00:23:54.985
And so do I really save that money?
434
00:23:55.345 --> 00:23:57.387
Maybe in the short term, but in the long term, do I pay a price?
435
00:23:57.407 --> 00:23:57.727
I don't.
436
00:23:57.907 --> 00:24:02.270
I don't know for sure that that happens, but I'm kind of conservative and I play a long game in life.
437
00:24:02.791 --> 00:24:04.652
And I always worry about that kind of stuff.
438
00:24:04.672 --> 00:24:09.196
So it's a big buildup, but I think there's value in that psychology.
439
00:24:09.496 --> 00:24:20.584
If you're not just flipping this business, then what are you doing or not doing that will make sure your business is always perceived in the absolute best way possible in the market?
440
00:24:20.604 --> 00:24:21.625
And I worry about those things.
441
00:24:21.665 --> 00:24:25.448
And that's always been actually my single biggest argument against a fuel surcharge.
442
00:24:25.769 --> 00:24:37.651
It's super interesting because I have not actually thought about in that way, about like the little nicks, the little tiny things that eventually over the long run causes someone to churn, cause someone to decline an estimate.
443
00:24:37.951 --> 00:24:41.812
It's kind of like having a lot of terms and conditions inside the estimate, for example.
444
00:24:41.832 --> 00:24:44.933
It's just another, it's friction in that sales process.
445
00:24:45.433 --> 00:24:49.934
The other thing that comes to my mind just on that same note is passing along credit card fees.
446
00:24:50.594 --> 00:24:53.237
And so I'm- This is exactly the same thing.
447
00:24:53.297 --> 00:24:53.757
Here's the thing.
448
00:24:53.837 --> 00:24:55.659
Here's what's so hard though for me, Jonathan.
449
00:24:55.879 --> 00:24:56.620
This is what's hard for me.
450
00:24:57.340 --> 00:25:02.585
So we built it where they can just check a box and it passes the fee along automatically.
451
00:25:02.886 --> 00:25:06.829
Whatever Stripe is charging us, it gets charged to the customer and it flows through.
452
00:25:07.730 --> 00:25:08.511
And here's what's crazy.
453
00:25:09.736 --> 00:25:13.440
because I agree with you and I've always been like very much on this same side.
454
00:25:14.140 --> 00:25:14.921
No one leaves.
455
00:25:15.402 --> 00:25:17.043
It's almost as if they just eat it.
456
00:25:17.444 --> 00:25:26.973
But to your point, it's hard to measure what it's doing in the long term, the brand reputation and that relationship with the customer, especially because some of them are doing this.
457
00:25:27.273 --> 00:25:28.374
They're just toggling it on.
458
00:25:29.215 --> 00:25:38.668
And they're waiting for maybe 1% or 2% of people to even notice and contact them because most people realistically don't read the email that says, hey, by the way, in the future, we're charging your fees.
459
00:25:39.028 --> 00:25:40.831
So I think that's a great point.
460
00:25:40.851 --> 00:25:45.477
I had never actually been able to verbalize in that way, which is it's just another little thing.
461
00:25:46.178 --> 00:25:47.159
But it's hard to measure that.
462
00:25:47.219 --> 00:25:54.446
It's very hard to measure the impact of that 2% or 3% in a year, six months down the road when they might not give the referral.
463
00:25:54.846 --> 00:25:56.968
They might not take the upsell.
464
00:25:57.609 --> 00:25:59.651
They might not mention it to their friends and family.
465
00:25:59.711 --> 00:26:00.552
It's super interesting.
466
00:26:00.892 --> 00:26:06.317
Yeah, it's so hard to know because I too have companies I've worked with where I pay that credit card fee.
467
00:26:07.370 --> 00:26:10.411
And I guess they're good enough in all the other ways it overcomes it.
468
00:26:10.431 --> 00:26:15.191
But I always like, because I'm on the different side of the table, I was like, this is not a good idea.
469
00:26:15.551 --> 00:26:16.512
Just raise the price.
470
00:26:16.592 --> 00:26:17.692
But I still work with them.
471
00:26:18.252 --> 00:26:23.293
And so maybe the way to articulate it, and again, I'm a conservative guy.
472
00:26:23.333 --> 00:26:24.393
I think long term.
473
00:26:24.693 --> 00:26:26.273
I really value reputation.
474
00:26:26.293 --> 00:26:29.114
I believe the long game is customer service and quality.
475
00:26:29.274 --> 00:26:30.854
And that is how you create a brand.
476
00:26:31.254 --> 00:26:34.475
It's a byproduct of doing the right things over and over every single day.
477
00:26:35.135 --> 00:26:37.077
And so to me, this is a little bit of branding.
478
00:26:37.157 --> 00:26:39.258
It's doing the right and best thing for the client.
479
00:26:39.579 --> 00:26:44.903
And the little things, like I don't really believe if I charge a fuel surcharge, everybody's gonna leave me in the business, go fall apart.
480
00:26:45.043 --> 00:26:45.924
There's no drama here.
481
00:26:46.404 --> 00:26:56.692
It's just that it's like over time, all the compounding of this little thing and that little thing and this little thing just gives a person this little feeling where they're not as excited about the company.
482
00:26:56.712 --> 00:26:58.734
It's just so hard to measure that.
483
00:26:58.754 --> 00:27:00.275
I have no idea how to measure it.
484
00:27:00.295 --> 00:27:00.956
So it's just a bet.
485
00:27:01.056 --> 00:27:01.797
Yeah, yeah.
486
00:27:02.828 --> 00:27:05.469
But that's probably what we as business owners do, right?
487
00:27:05.889 --> 00:27:09.350
We just make a lot of bets of, I think this is probably the best thing to do.
488
00:27:09.390 --> 00:27:10.791
This is probably not a wise thing to do.
489
00:27:11.151 --> 00:27:13.532
And some decisions you can't back them with data.
490
00:27:13.952 --> 00:27:19.754
I don't want to go too far off in the weeds, but again, I'm not a negative guy in private equity, but I also see a lot of negatives in private equity.
491
00:27:20.475 --> 00:27:25.376
I'm picking on them and I don't really want to, but they come in and optimize everything based on data.
492
00:27:26.617 --> 00:27:29.438
And it's funny how a lot of companies will just be killing it.
493
00:27:30.331 --> 00:27:39.435
And they use data, but they also make a lot of gut decisions, like based on what they feel is best for the customer, how I would want to be treated, how I would think about this.
494
00:27:39.515 --> 00:27:42.436
And so some of those decisions aren't made by with data.
495
00:27:42.456 --> 00:27:44.717
They're made by just being very human.
496
00:27:45.378 --> 00:27:49.800
And sometimes when you become too clinical and every single decision is made by data...
497
00:27:50.640 --> 00:27:55.602
It looks really good in the short term, but accidentally in the long term, it creates harm because you're being less human.
498
00:27:56.042 --> 00:27:57.363
Maybe that's another way to say it.
499
00:27:58.003 --> 00:27:59.083
I don't know how to articulate it.
500
00:27:59.343 --> 00:28:01.204
But it's just a belief I have.
501
00:28:01.384 --> 00:28:06.726
Jim Collins wrote the book, How the Mighty Fall is the opposite of good to great.
502
00:28:06.766 --> 00:28:08.287
It was the companies that end up going bad.
503
00:28:08.347 --> 00:28:09.267
I forget the exact name.
504
00:28:09.287 --> 00:28:09.527
Oh, okay.
505
00:28:09.647 --> 00:28:10.068
I haven't heard.
506
00:28:10.088 --> 00:28:10.808
Fantastic book.
507
00:28:10.828 --> 00:28:15.610
And inside of it, he has this demonstration or this story about a candy company.
508
00:28:16.270 --> 00:28:22.435
And they got bought out and the company comes in, this young guy, and he looked at all the ingredient lists of the candy.
509
00:28:23.036 --> 00:28:24.317
And there's like 19 ingredients.
510
00:28:24.437 --> 00:28:25.558
And he said, this one's so expensive.
511
00:28:25.578 --> 00:28:26.238
I've heard this story.
512
00:28:26.278 --> 00:28:26.518
Yeah.
513
00:28:26.739 --> 00:28:27.159
Keep going.
514
00:28:27.199 --> 00:28:27.639
Great story.
515
00:28:27.659 --> 00:28:28.160
Fantastic story.
516
00:28:28.180 --> 00:28:32.543
Took out the one ingredient, immediately boost profits that quarter by like 25, 30%.
517
00:28:32.643 --> 00:28:33.985
And he's like, oh, fantastic.
518
00:28:34.005 --> 00:28:36.026
Well, let's look at the 18th most.
519
00:28:36.206 --> 00:28:38.888
And over time, he was able to like double or triple the profits.
520
00:28:38.969 --> 00:28:44.133
Eventually though, several years later, all of a sudden the demand for this product that was soaring started falling off.
521
00:28:44.633 --> 00:28:47.554
And then it started decaying to the point where now they're unprofitable.
522
00:28:47.615 --> 00:28:48.935
No one wants this product.
523
00:28:49.255 --> 00:28:52.837
And they go back to the fact that now that 19 ingredients was something like six or seven.
524
00:28:53.417 --> 00:29:04.683
And even though on paper, every single cut made sense financially, he then put the piece of candy, kind of like what I did the other day looking on Intercom, puts a piece of candy in his mouth and is like, that's not even good.
525
00:29:04.883 --> 00:29:07.284
It's not even recognizable to the original thing.
526
00:29:07.724 --> 00:29:10.366
But each of those decisions made sense economically.
527
00:29:10.386 --> 00:29:11.066
Yeah.
528
00:29:11.486 --> 00:29:17.889
Potentially didn't show it in the immediate effect, but in that long term brand of what people expected, it was doing damage.
529
00:29:18.249 --> 00:29:20.910
That was such a perfect analogy right there.
530
00:29:20.991 --> 00:29:29.435
It's like there's this I believe in data to my core, but there's also this art artistry or creativity that's involved in a business.
531
00:29:29.475 --> 00:29:29.955
It's both.
532
00:29:30.535 --> 00:29:34.958
And that's maybe why public companies tend to do best who are still ran by founders.
533
00:29:35.018 --> 00:29:36.219
Like it takes both.
534
00:29:36.319 --> 00:29:37.400
It's a balance of the two.
535
00:29:37.660 --> 00:29:43.944
And when you shift all the way to just winging it and everything and putting your finger in the air and guessing on everything, that doesn't tend to work really well.
536
00:29:44.144 --> 00:29:47.506
When you just live pure data, that doesn't, it's the two together.
537
00:29:48.127 --> 00:29:50.008
And so, man, that's a perfect analogy.
538
00:29:50.377 --> 00:29:56.161
Okay, let's switch gears because we know that the thing that you've been trying to focus on is getting marketing manager at CityTurf and all the marketing side.
539
00:29:56.521 --> 00:29:56.741
Yeah.
540
00:29:56.881 --> 00:29:59.343
You've been distracted with the AI stuff.
541
00:29:59.463 --> 00:30:00.344
AI, this AI thing.
542
00:30:00.384 --> 00:30:01.044
Yeah.
543
00:30:01.184 --> 00:30:19.637
But let's go back to the fact like CityTurf is hiring, you know, you're trying to get a marketing manager, but let's look at like for whether it be smaller or larger, when you're, when to hire a marketing manager versus an agency, when to outsource it, what's sort of your opinion on the size of the business and when it kind of makes sense to do one or the other?
544
00:30:20.779 --> 00:30:21.039
Yeah.
545
00:30:21.860 --> 00:30:23.742
I don't think there's an obvious answer.
546
00:30:23.822 --> 00:30:33.210
I mean, my gut feeling is that it's just an impossibility and it doesn't make sense for companies for sure.
547
00:30:33.751 --> 00:30:37.795
For sure, it's too strong of a word, but let me just go with, it doesn't make sense under $10 million.
548
00:30:38.175 --> 00:30:40.297
I'm just going to make up this arbitrary number.
549
00:30:40.317 --> 00:30:45.201
And the reason for that is I would far prefer you spend your
550
00:30:45.922 --> 00:30:53.987
every extra dollar you have, just dialing in the operations as much as you can and just being incredibly good there and doing the marketing.
551
00:30:54.007 --> 00:31:01.492
But you can get, as long as you don't get stuck with an agency, you can find agencies that can get you moving in the right direction.
552
00:31:01.512 --> 00:31:05.155
You've just got to be willing to move on from agencies when they're no longer delivering.
553
00:31:05.455 --> 00:31:08.558
And again, this is kind of a making up the answer.
554
00:31:08.578 --> 00:31:09.819
There's no rule here.
555
00:31:10.459 --> 00:31:18.947
I just feel that as you start to get to this $10 million and greater number, and possibly sooner if you have the money and if you're a fast-moving organization.
556
00:31:19.867 --> 00:31:21.189
I tend to like to quantify that way.
557
00:31:21.449 --> 00:31:25.792
There's things you do way earlier in a business when you are just going and you have money.
558
00:31:26.553 --> 00:31:27.515
you make different decisions.
559
00:31:27.575 --> 00:31:38.554
But for most companies, they finally start to have the kind of money it takes to hire this kind of a role in that $10 million plus range, because you could get a marketing manager that's
560
00:31:39.871 --> 00:31:42.713
65,000 a year, I'm talking about a six-figure person.
561
00:31:42.793 --> 00:31:44.214
I'm talking about another level.
562
00:31:44.814 --> 00:31:50.997
Another way to say it is there's the person that's learning on your dime and there's the person that's already done it, and they just bring all the answers.
563
00:31:51.378 --> 00:31:56.180
I'm more talking bring all the answers and run that part of the business because I got to stay focused over here.
564
00:31:56.541 --> 00:31:59.182
And that's why I tend to think this $10 million number.
565
00:32:00.023 --> 00:32:01.463
There are good agencies.
566
00:32:02.584 --> 00:32:08.868
My experience with agencies has been that most of them fall apart as they start to get bigger.
567
00:32:09.548 --> 00:32:13.189
Like when they're really small, they're really focused on you, they do a great job.
568
00:32:13.589 --> 00:32:20.131
And then as they get big, maybe they're good at their agency work, but they're not so great at running their organization or whatever the scenario is.
569
00:32:20.551 --> 00:32:28.754
Or you can get ignored by the agency for longer periods of time without you realizing they're not actually working on your stuff.
570
00:32:28.794 --> 00:32:29.574
And so that's where...
571
00:32:30.692 --> 00:32:33.535
I tend to think you might have to make changes from time to time.
572
00:32:33.555 --> 00:32:34.696
That's been my experience.
573
00:32:35.456 --> 00:32:38.119
And so 10 million is sort of my number here.
574
00:32:38.279 --> 00:32:45.185
My thought actually went to even before you go agency, like when do you go from I should do it myself to –
575
00:32:45.906 --> 00:32:46.887
handing off to an agency.
576
00:32:47.467 --> 00:32:53.230
And one of the things that we've seen a bunch this year, cause we started doing it for the owners and it's just a flat monthly fee.
577
00:32:53.470 --> 00:33:02.575
But like what we found when we started opening up their accounts was amazing that when they run it themselves, a lot of these AI features that some of them are really good.
578
00:33:02.595 --> 00:33:12.300
Like with the Andromeda update, it can find and target much better, but for home services or for local businesses, your best targeting is like market inside of this circle.
579
00:33:13.241 --> 00:33:13.401
And,
580
00:33:14.300 --> 00:33:24.150
the level of granularity required is so much less than if I'm going after the whole country and I need to based on interest or psychographics or where they've been on the internet, et cetera.
581
00:33:24.751 --> 00:33:29.275
Versus just being like, hey, if they're between 40 and 65, I want you to market them in this area.
582
00:33:29.896 --> 00:33:32.899
And what we found though is people were toggling on AI
583
00:33:34.420 --> 00:33:59.855
features inside meta specifically but even inside google and reaching audiences they should never be reaching but it's in the effort of making it as simple as possible and like leaving the defaults on they were spending way more than they should because of now ai optimizing but now you're showing up on the audience network in areas like what like we we scrubbed 9 000 sites and basically import for every location to where we don't want to show up on google because
584
00:34:00.355 --> 00:34:02.075
gaming sites, children's sites.
585
00:34:02.095 --> 00:34:03.036
You don't want to be showing up there.
586
00:34:03.056 --> 00:34:05.056
Like, you know, you're not going to have any buyers there.
587
00:34:05.536 --> 00:34:21.399
And so there were little, little optimizations like that, that we have seen people moving from themselves to, okay, when do I actually go get someone, an agency outside of the organization, pay them $500,000, whatever is a month, just to do this for me versus being like, I've got to scrimp every single dollar.
588
00:34:21.579 --> 00:34:22.799
I think you do that very early.
589
00:34:23.879 --> 00:34:26.200
I think your argument holds up, but there's a different argument.
590
00:34:26.220 --> 00:34:26.720
And that is,
591
00:34:28.001 --> 00:34:29.662
what's the first thing you stop doing when you get busy?
592
00:34:30.582 --> 00:34:31.603
Anything marketing related.
593
00:34:32.344 --> 00:34:42.131
So if you want that function to continue and you don't want your business to just be this constant rollercoaster of, we got leads, we have no leads, we got leads, we have no leads, then you need to get somebody else that thinks about that all the time.
594
00:34:42.171 --> 00:34:52.959
And so my argument is, in fact, I have a video next week coming out on Five for 50 that talks about what you do to get to 10,000 in revenue and then what you do to get to a million dollars in revenue from a marketing standpoint.
595
00:34:53.559 --> 00:34:56.562
And my argument is that you...
596
00:34:57.922 --> 00:35:03.065
as fast as you can, you get somebody to take SEO and things like that off your plate.
597
00:35:03.085 --> 00:35:04.326
You gave the example of Facebook.
598
00:35:04.346 --> 00:35:06.187
I'd give that example of Google ads as well.
599
00:35:06.527 --> 00:35:08.788
Like the amount of money that's wasted on that stuff.
600
00:35:08.828 --> 00:35:11.649
If you have somebody just watch it and dial it in, you'll pay for that person.
601
00:35:11.669 --> 00:35:12.090
They're free.
602
00:35:12.190 --> 00:35:14.651
I mean, I think you get that role as quick as you can.
603
00:35:14.931 --> 00:35:18.273
I'm a little different than other people too, because I like marketing.
604
00:35:18.413 --> 00:35:24.256
If I could just work on software stuff and do marketing and never have to do anything else ever, I'd be totally happy with that.
605
00:35:24.656 --> 00:35:25.277
I like marketing.
606
00:35:25.317 --> 00:35:26.398
Not everybody feels that way.
607
00:35:26.798 --> 00:35:30.201
So you have to know that about me when you listen to my advice.
608
00:35:31.062 --> 00:35:32.844
I've read and studied a lot.
609
00:35:33.044 --> 00:35:34.245
I've thought about this a lot.
610
00:35:34.305 --> 00:35:36.127
I've spent a lot of money experimenting.
611
00:35:36.227 --> 00:35:40.350
So I can say this is how I would do it, but that's unique to me.
612
00:35:40.751 --> 00:35:43.613
And so for most people, I think you use an agency.
613
00:35:43.633 --> 00:35:43.733
Yeah.
614
00:35:44.514 --> 00:35:49.377
And then someday as the org gets big enough, then you go bring that stuff in house.
615
00:35:49.858 --> 00:35:52.259
But it doesn't mean you bring everything in house.
616
00:35:52.540 --> 00:35:54.301
That's a whole, maybe we should talk about that.
617
00:35:54.321 --> 00:35:56.042
That's a whole nother part of the conversation here.
618
00:35:56.382 --> 00:36:00.205
Even if you have a marketing person, that doesn't mean they do all this stuff.
619
00:36:00.225 --> 00:36:04.308
Because I also think there are domains of expertise, SEO, SEO.
620
00:36:04.948 --> 00:36:10.750
paid ads, organic, social, there's all these different areas of expertise.
621
00:36:10.790 --> 00:36:16.011
So if you're going to, if you're thinking you're going to hire one person to do it all, it's going to be back to the same problem.
622
00:36:16.031 --> 00:36:27.794
You just articulated, Mike, like, if a person isn't good at Facebook ads, where are they wasting you money, where even though they're the manager of the business, you could just go hire an expert to focus on that thing.
623
00:36:28.715 --> 00:36:30.235
And so that's how I tend to think about it.
624
00:36:30.435 --> 00:36:34.943
So when you hired your marketing manager, for example, I don't know if you have or are going to.
625
00:36:34.963 --> 00:36:35.685
I did.
626
00:36:35.885 --> 00:36:36.105
You did.
627
00:36:36.125 --> 00:36:36.446
I fired him.
628
00:36:36.586 --> 00:36:36.787
Okay.
629
00:36:36.947 --> 00:36:37.528
Okay.
630
00:36:37.708 --> 00:36:38.189
Oh, you did?
631
00:36:38.710 --> 00:36:39.451
In the last few weeks?
632
00:36:39.572 --> 00:36:39.772
Yeah.
633
00:36:40.189 --> 00:36:42.750
No, I fired him last year.
634
00:36:43.050 --> 00:36:44.371
I'm the marketing manager right now.
635
00:36:44.391 --> 00:36:44.931
Okay, okay.
636
00:36:45.252 --> 00:36:55.537
But like when you're looking for this person, and to your point, this is the hardest part when I was hiring the department lead for Augusta Leads was Facebook is its own thing.
637
00:36:56.097 --> 00:36:57.037
Google is its own thing.
638
00:36:57.237 --> 00:36:58.778
SEO, its own thing.
639
00:36:59.138 --> 00:37:06.582
Organic is like, did you just have to determine what's most important to the business currently and kind of optimize around that first?
640
00:37:06.602 --> 00:37:06.762
Yeah.
641
00:37:07.433 --> 00:37:08.634
To hire the marketing manager?
642
00:37:08.734 --> 00:37:08.994
Correct.
643
00:37:09.394 --> 00:37:10.634
And I struggled with this one.
644
00:37:10.794 --> 00:37:12.395
I'll kind of tell you my criteria.
645
00:37:12.995 --> 00:37:17.437
But I struggled with it because, you know, City Turfs, we're at a good size.
646
00:37:17.617 --> 00:37:23.620
But even at this size, I'm not sure exactly who we need as a marketing manager.
647
00:37:23.820 --> 00:37:26.361
My next goal is double it, where we're at, so 40.
648
00:37:26.441 --> 00:37:27.702
Yeah.
649
00:37:28.582 --> 00:37:29.522
What's that look like?
650
00:37:29.583 --> 00:37:30.643
Like, what do we need?
651
00:37:31.143 --> 00:37:33.964
I, even at this moment, struggle with exactly who I need.
652
00:37:33.984 --> 00:37:36.105
And I've had CMOs and marketing people.
653
00:37:36.626 --> 00:37:37.246
I've done this.
654
00:37:38.006 --> 00:37:40.087
And I'm still struggling looking out into the future.
655
00:37:40.147 --> 00:37:45.990
So trying to understand, am I hiring somebody that has done a $20, $30 million business?
656
00:37:46.010 --> 00:37:47.270
Am I hiring somebody that's done 50?
657
00:37:47.290 --> 00:37:50.792
Like, am I hiring somebody that can do the copywriting process?
658
00:37:51.192 --> 00:38:13.906
and maybe manage this and then they can manage people and outsource all this other stuff like what's their core skill need to be what happens is now that you're starting to get into these numbers if I were to say I'm going to go hire somebody that's ran 50 million marketing budget not budget but a bet at a 50 million dollar company running marketing there's a high probability they haven't done any of the actual work in a very long time and all they do is manage people
659
00:38:14.386 --> 00:38:16.748
Like, well, I don't need a manager of people.
660
00:38:17.128 --> 00:38:18.189
I don't need a strategist.
661
00:38:18.349 --> 00:38:19.490
I want to be the strategist.
662
00:38:19.971 --> 00:38:29.598
Or I can hire a marketing person and then I can pay the equivalent of strategy groups or agencies to make, we'll make the plan and then we go execute for six months.
663
00:38:30.219 --> 00:38:32.520
So, and then we make a new plan and we go execute.
664
00:38:32.540 --> 00:38:34.562
So do I need a CMO that can even do strategy?
665
00:38:34.582 --> 00:38:34.982
I don't know.
666
00:38:35.002 --> 00:38:37.124
Like I could talk myself in circles here.
667
00:38:37.764 --> 00:38:43.028
So what I landed on was copy is insanely important to me.
668
00:38:43.969 --> 00:38:47.610
And so if I could find a marketing manager who's really strong with copy, that'd be cool.
669
00:38:47.790 --> 00:38:51.751
If not, I can put together a group of outsourced copywriters.
670
00:38:51.891 --> 00:38:54.371
I had four criteria that were like non-negotiables.
671
00:38:54.852 --> 00:38:57.072
They had to be all in on AI.
672
00:38:57.712 --> 00:39:02.773
I have no desire to pay somebody to say I wrote my own copy or I did my own thing.
673
00:39:03.074 --> 00:39:04.954
Like, cool, you're slow.
674
00:39:06.394 --> 00:39:07.455
Like, we could do this faster.
675
00:39:07.535 --> 00:39:11.495
I don't want you to just like ask AI, prompt AI, and then take exactly what it gives you.
676
00:39:11.696 --> 00:39:13.356
I want you to be smart enough to work with it.
677
00:39:14.196 --> 00:39:17.618
And I'm not looking for you to use AI to solve the problem in five minutes.
678
00:39:17.638 --> 00:39:21.821
I'm using you to use AI to solve the problem in two hours with the most incredible solution.
679
00:39:22.141 --> 00:39:27.344
So number one, are you going to use AI and in a meaningful way and you're going to learn it in a big way?
680
00:39:27.504 --> 00:39:28.445
That was criteria number one.
681
00:39:28.765 --> 00:39:29.746
Number two, data.
682
00:39:30.366 --> 00:39:31.607
I believe in data.
683
00:39:31.947 --> 00:39:34.169
So do you understand data attribution?
684
00:39:34.189 --> 00:39:36.510
Can you help us set up data attribution systems?
685
00:39:36.730 --> 00:39:38.091
Will you actually look at the data?
686
00:39:38.371 --> 00:39:39.832
Will we make decisions on the data?
687
00:39:39.852 --> 00:39:41.553
So those were two really critical ones.
688
00:39:42.154 --> 00:39:48.678
And then the understanding of marketing itself, like writing copy, hooks.
689
00:39:49.238 --> 00:39:50.479
I don't need you to be the best copywriters.
690
00:39:50.559 --> 00:39:51.340
I can find them.
691
00:39:51.780 --> 00:39:57.344
But do you understand marketing, headlines, persuasion, all that stuff?
692
00:39:57.404 --> 00:39:58.665
I needed you to be good at that.
693
00:39:59.425 --> 00:40:04.536
And then the other one that was kind of negotiable was, this is kind of where I was going a minute ago, I could trade off.
694
00:40:04.576 --> 00:40:06.360
If I had a great copywriter, that's cool.
695
00:40:07.041 --> 00:40:08.124
A little bit harder to find.
696
00:40:08.144 --> 00:40:08.785
Yeah.
697
00:40:09.222 --> 00:40:15.965
Um, if I found somebody that was really good at managing paid ads, cause you can spend a ton of money there, be kind of cool, but I'm also okay outsourcing that.
698
00:40:16.745 --> 00:40:19.827
So I guess actually those were my big criteria.
699
00:40:19.907 --> 00:40:25.449
I, there is one other, and it is slipping my mind right now what that was, but I didn't need you to be a designer.
700
00:40:25.609 --> 00:40:26.309
Oh, project manager.
701
00:40:26.449 --> 00:40:26.950
That's what it was.
702
00:40:27.050 --> 00:40:28.810
I need you to be able to manage projects.
703
00:40:29.451 --> 00:40:29.771
That's it.
704
00:40:29.971 --> 00:40:32.632
So, um, that's what I hired for.
705
00:40:32.892 --> 00:40:41.675
Yeah, that last one, the project management part was the one I was really trying to optimize for because the challenge for us is like, it's you're not working with one owner, you're working with 100.
706
00:40:42.215 --> 00:40:49.017
And so mine, I actually found most success in going and getting someone that would work to the very top of an agency.
707
00:40:49.777 --> 00:40:52.058
that was used to working with a whole bunch of clients.
708
00:40:52.158 --> 00:40:55.759
And then they were thrilled with the fact it's like, oh, I only have one brand guide.
709
00:40:56.060 --> 00:40:58.461
I'm working with one brand and I can duplicate this.
710
00:40:58.481 --> 00:40:59.541
I can work way faster.
711
00:41:00.141 --> 00:41:03.102
And instead of having like 10 different companies I'm working for.
712
00:41:03.543 --> 00:41:09.765
And so that was, we lucked out so hard with like the marketing, who's over Augusta leads.
713
00:41:10.205 --> 00:41:10.665
That's great.
714
00:41:10.785 --> 00:41:14.027
But it was one of those things that I was really concerned about.
715
00:41:14.627 --> 00:41:21.872
going into just knowing that like, okay, I know I'm like a solid six out of 10 when it comes to paid ads and paid traffic.
716
00:41:22.212 --> 00:41:26.575
And I know enough to interview, but it was a gamble.
717
00:41:26.655 --> 00:41:31.498
And I'm just like super thankful that we lucked out with that because it's just such a hard position to fulfill.
718
00:41:31.518 --> 00:41:34.480
And especially when you know you can do the work pretty good.
719
00:41:35.101 --> 00:41:40.164
It goes back to what we tell people to do when it comes to operations, stepping out of a million, $2 million business.
720
00:41:40.885 --> 00:41:43.847
It's so hard when you know how to do it better than they do.
721
00:41:44.567 --> 00:41:49.172
And so it's either, A, you're going to go hire the person that's done there, done it, been there before.
722
00:41:49.773 --> 00:41:52.737
But that's sometimes very difficult to do when you open up your pocketbook.
723
00:41:52.757 --> 00:41:54.298
I'm like, okay, this is going to cost me something.
724
00:41:55.880 --> 00:42:00.425
But one thing I want to go back to, you mentioned, is copy and that being so important.
725
00:42:00.926 --> 00:42:11.311
There's one throughput I've always seen when it comes to people I look up to when it comes to advertising marketing, like Dan Kennedy, for example, even Alex, Alex Ramose, yourself, you've always gone back to copy.
726
00:42:11.331 --> 00:42:18.114
And even I remember way back in the day when you talked on YouTube about like the copy of the flyer, of the postcard, of the door hanger.
727
00:42:18.515 --> 00:42:26.959
What is it that distinguishes between someone that can just throw it into AI versus what you just said, the two hours spent with AI to make it world-class?
728
00:42:27.379 --> 00:42:29.360
What is the difference that you're looking for in
729
00:42:29.640 --> 00:42:31.342
in the output from those people?
730
00:42:34.645 --> 00:42:41.152
There's a lot of things, but the simplest, we'll call it top level thing that comes to mind is persuasion.
731
00:42:42.974 --> 00:42:51.082
And the way that you persuade somebody is by really understanding them and understanding what matters to them.
732
00:42:52.094 --> 00:42:56.176
what they would get them excited, what makes...
733
00:42:56.216 --> 00:43:04.379
I love the visual of what is the thing that keeps the person up at night that they're angry about, they're pissed about, they're frustrated about, they're stressed about.
734
00:43:04.419 --> 00:43:06.740
What's the thing they first think about in the morning when they wake up?
735
00:43:07.061 --> 00:43:09.682
What's the thing that they worry about?
736
00:43:10.142 --> 00:43:16.425
And so when you understand those triggers, and I don't mean in a manipulative way, but when you understand them,
737
00:43:17.454 --> 00:43:23.637
then you can talk to them in a way that means something to them where they have an emotional reaction to what you're saying.
738
00:43:24.598 --> 00:43:38.705
So for anybody that's a parent, if you have kids, you immediately know the hooks to use when you're talking to another parent if it has anything to do with risks to their kids, anything happening to their kid.
739
00:43:39.005 --> 00:43:41.447
And so if you're a parent, you could kind of relate with...
740
00:43:42.527 --> 00:43:51.795
Anybody could relate with something happening, my kid getting sick, something happening, my kid being in an accident, or my 16-year-old riding with a friend in the car.
741
00:43:51.915 --> 00:43:53.336
And is that kid a good driver?
742
00:43:53.376 --> 00:43:55.037
What kind of dumb decisions are they making?
743
00:43:55.057 --> 00:44:02.002
You can relate with that little fear, that little thing that nags in the back of your mind where you worry about your children.
744
00:44:02.903 --> 00:44:04.124
And it never goes away.
745
00:44:04.625 --> 00:44:06.046
And that's an example.
746
00:44:06.407 --> 00:44:12.112
Or if you're a business owner, that nagging thing that never goes away where you're worrying about your business and the economy and the market.
747
00:44:12.132 --> 00:44:13.153
Like, there are these little things.
748
00:44:13.173 --> 00:44:21.801
Well, when you really understand your prospect and what life looks like for them and what they think about, what they worry about, what gets them excited, then you know how to write to them.
749
00:44:22.182 --> 00:44:23.983
That's the top level.
750
00:44:25.005 --> 00:44:34.547
And then whatever the problem is that you're trying to sell to the person, like on this specific thing, what would get them to feel pain around this?
751
00:44:34.567 --> 00:44:38.607
And unfortunately, we're all driven by fear and pain.
752
00:44:39.047 --> 00:44:41.468
Curiosity works, but think about you.
753
00:44:41.608 --> 00:44:43.248
Fear works the best, unfortunately.
754
00:44:44.008 --> 00:44:52.110
And it's what we, because we're all probably wired to, you know, watch out for bad things happening to us and our families and friends.
755
00:44:52.190 --> 00:44:52.810
And so, yeah.
756
00:44:54.283 --> 00:44:59.127
whenever you're selling something, you're trying to get into the mind of the buyer and understand the problem.
757
00:44:59.367 --> 00:45:03.330
And then you're poking on that problem and you're agitating that problem.
758
00:45:03.350 --> 00:45:05.512
You're making them feel that thing at an emotional level.
759
00:45:05.772 --> 00:45:08.754
And then you're relieving the pain by giving them a solution.
760
00:45:08.794 --> 00:45:10.756
But all of that requires you understand them.
761
00:45:11.216 --> 00:45:12.997
So you asked about copy.
762
00:45:13.598 --> 00:45:15.779
Copy is about really understanding your buyer.
763
00:45:16.260 --> 00:45:20.022
It's about having avatars to understand your different buyers because none of us have one buyer.
764
00:45:20.925 --> 00:45:29.372
Like I can say generally my buyer 65% of the time is a female 30s to mid 50s.
765
00:45:29.452 --> 00:45:36.658
She has two kids and I can kind of get, I know my market about what the home costs and such.
766
00:45:36.918 --> 00:45:38.039
I can kind of get there.
767
00:45:38.579 --> 00:45:45.425
But even within that group, I've got different buyers, depending on whether if you're in my neighborhood, it's doctors and entrepreneurs.
768
00:45:46.045 --> 00:45:47.467
Everybody in my neighborhood owns a company.
769
00:45:48.473 --> 00:45:56.120
And but so that's a different buyer that's willing to spend a different amount of money and has different concerns and isn't price sensitive.
770
00:45:56.220 --> 00:46:03.166
Like they just want it solved because they're making $3,000 an hour running or more running their companies.
771
00:46:03.186 --> 00:46:08.030
Like they don't give a flip about a $15 variance in a bill, but you go to other neighborhoods and...
772
00:46:08.550 --> 00:46:09.871
That's a different buyer persona.
773
00:46:09.971 --> 00:46:14.772
And that, a long answer here, Mike, but that's the crux of it all.
774
00:46:15.093 --> 00:46:18.614
And then after that, you just learn the techniques of writing the copy.
775
00:46:18.914 --> 00:46:33.940
But if you could just master that one thing of really understanding your buyer and then speaking to the one thing instead of 90 things that they might be feeling and zeroing in on that, creating the pain and then relieving the pain, then everything will perform so much better.
776
00:46:34.361 --> 00:46:47.938
when I was looking at hiring for this, the marketing manager role is like, can they go one level deeper and not just speak about the feature, but the benefit, but then also like the 2.0 version is, can they speak to the benefit of the benefit?
777
00:46:48.318 --> 00:46:50.741
And that's where I feel like it gets to the core of,
778
00:46:51.817 --> 00:46:56.039
problem that's actually being solved to speak to and show empathy through the copy.
779
00:46:56.659 --> 00:46:56.899
Yes.
780
00:46:57.100 --> 00:47:07.224
And so I reminded like when we did a turnaround for a pool fence company and they're doing 14 million and they did the fencing around pools to keep kids from falling in.
781
00:47:07.404 --> 00:47:08.105
Yep.
782
00:47:08.125 --> 00:47:13.667
And the immediate benefit is, hey, you don't have to do like the kid does not fall into the pool.
783
00:47:13.687 --> 00:47:14.228
They don't drown.
784
00:47:14.948 --> 00:47:16.489
huge opportunity, it's fear.
785
00:47:17.029 --> 00:47:28.716
And I said, can we go one level deeper, which is the benefit to that benefit is now as the very busy, stressed out mom of four kids, they can go play in the backyard and you don't have to worry.
786
00:47:29.316 --> 00:47:36.060
And you can take that time inside, apart from them, and know that they're not going to fall in the pool.
787
00:47:36.420 --> 00:47:38.502
It helps a lot, you know, at the end of the day to know...
788
00:47:39.262 --> 00:47:41.943
why you're doing it and that people are getting a good benefit out of it.
789
00:47:41.963 --> 00:47:51.488
And that's like the benefit of the benefit is the time alone to be able to take 20 minutes and decompress and not be looking out the window every three minutes to make sure no one's, you know, fall inside the pool.
790
00:47:51.788 --> 00:47:53.009
And that's where I've always looked at.
791
00:47:53.029 --> 00:48:00.613
It's like the levels of, you know, go past the feature to the benefit, but then the benefit of the benefit and really the psychology of the problem.
792
00:48:01.308 --> 00:48:01.968
Yeah, that's smart.
793
00:48:02.048 --> 00:48:03.729
And you made me think of this.
794
00:48:03.969 --> 00:48:13.652
So when you sit down to think through this, you're literally doing a brain dump and you're putting all that, those benefits, the benefits of the benefits, the fears, you're putting all that down on paper.
795
00:48:14.012 --> 00:48:16.133
And then you're trying to figure out where you're going to zero in.
796
00:48:16.860 --> 00:48:20.345
It's back to, I won't spend much on this, but the idea of segmentation.
797
00:48:20.365 --> 00:48:30.580
This is why segmentation is so important because when you really understand different buyer groups or different avatars, then you're writing your message, your copy, your offer, everything just to that group.
798
00:48:30.700 --> 00:48:31.861
And it just works so much better.
799
00:48:32.382 --> 00:48:32.742
Yeah.
800
00:48:32.762 --> 00:48:38.247
And that's even when we change the site from Copilot Homeworks recently, it was like, who are we actually going after?
801
00:48:38.347 --> 00:48:41.670
And like, how do we call them out very explicitly?
802
00:48:41.690 --> 00:48:44.392
But also, everything needs to be written for them.
803
00:48:45.113 --> 00:48:50.738
I can't write and solve the benefit of the benefit for every single buyer type.
804
00:48:51.458 --> 00:49:04.161
And unless you're going to have literally sophisticated of like we split, for example, ads now with AI is really nice with landing pages to be able to segment people based upon things like, okay, if they're between 35 and 50, I want them to go this direction.
805
00:49:04.181 --> 00:49:05.982
If they're 50 plus, I want to go in this direction.
806
00:49:06.422 --> 00:49:19.325
It's now possible, but still it's a function of how I speak and communicate and the problems I identify for them and the solutions I offer to them very much is indicative of what problems do they have and do I even understand them?
807
00:49:19.925 --> 00:49:26.847
And that was the big thing like when we went to the brand change, like we have to identify who are we serving here and who are we not serving?
808
00:49:27.007 --> 00:49:32.268
And that's actually the harder part because it's just so easy to say yes to everyone, whether it be home services or software, it doesn't matter.
809
00:49:32.288 --> 00:49:34.649
It's like it's so easy to say yes to everyone's money.
810
00:49:34.709 --> 00:49:39.490
But saying no to people is actually gives me the clarity of who my buyer is.
811
00:49:39.770 --> 00:49:45.931
And I'm able to reach the benefit of the benefit because I've more narrowly defined who that person is.
812
00:49:46.251 --> 00:49:48.432
Out of curiosity in your business.
813
00:49:49.204 --> 00:49:52.866
When you tell people no, do you have a problem with them just going and signing up anyway?
814
00:49:52.886 --> 00:49:54.847
So we used to have this problem at Service Alpine.
815
00:49:54.867 --> 00:49:55.968
We're like, we're not for you.
816
00:49:56.168 --> 00:49:57.369
You're going to be disappointed here.
817
00:49:57.389 --> 00:49:58.750
You're going to feel like we let you down here.
818
00:49:58.770 --> 00:49:59.670
We didn't build this for you.
819
00:49:59.930 --> 00:50:02.092
And it's almost like nobody's ever told me no.
820
00:50:02.152 --> 00:50:02.932
I don't trust anybody.
821
00:50:02.952 --> 00:50:04.713
But now you guys told me no.
822
00:50:04.733 --> 00:50:05.494
There's this level of trust.
823
00:50:05.514 --> 00:50:07.015
And then they go sign up and we're like,
824
00:50:07.715 --> 00:50:08.836
Now they're just going to be unhappy.
825
00:50:08.856 --> 00:50:10.517
Do you ever, have you had that experience yet?
826
00:50:10.657 --> 00:50:12.839
It was a meaningful enough thing that I was aware of it.
827
00:50:12.959 --> 00:50:25.528
Yeah, I think, I think in part, the reason it happens is because we built trust, both you and I on our social media and like the brand side to where they trust you so much that when you say that it just is immediately like, I will buy this just almost as a port.
828
00:50:25.888 --> 00:50:31.672
So what I ended up doing, cause it was happening too much and it really actually hurt us because the wrong people got inside.
829
00:50:31.692 --> 00:50:31.792
Yeah.
830
00:50:31.992 --> 00:50:32.893
And they get to onboarding.
831
00:50:32.913 --> 00:50:33.953
It's just, it creates a difference.
832
00:50:34.093 --> 00:50:35.994
And like, I told you, but like, no, there's still it.
833
00:50:36.014 --> 00:50:39.836
So, so now it's a function of, I will actually tell them to go use such and such product.
834
00:50:40.237 --> 00:50:44.239
And so I got pretty prescriptive, like, hey, use this product until we're ready.
835
00:50:44.339 --> 00:50:46.800
And like in two years, maybe we'll be ready.
836
00:50:46.860 --> 00:50:51.643
Like I had to get more prescriptive with not just saying, don't use this, but like, don't use us and use this instead.
837
00:50:52.903 --> 00:50:54.864
That seemed to be a little bit more beneficial.
838
00:50:55.505 --> 00:50:55.705
Yeah.
839
00:50:56.105 --> 00:51:01.909
Long-term, to your point, by allowing people in, it's kind of like the credit card processing fees and the fuel charge.
840
00:51:02.149 --> 00:51:03.510
It's another nick on the brand.
841
00:51:03.911 --> 00:51:04.211
It is.
842
00:51:04.631 --> 00:51:05.552
And it's hard on the team.
843
00:51:05.932 --> 00:51:06.953
Yeah.
844
00:51:07.093 --> 00:51:07.513
Yeah.
845
00:51:08.274 --> 00:51:08.354
No.
846
00:51:08.414 --> 00:51:09.114
Really hard on the team.
847
00:51:09.154 --> 00:51:10.135
Totally.
848
00:51:10.155 --> 00:51:10.415
100%.
849
00:51:10.836 --> 00:51:11.136
Okay.
850
00:51:11.216 --> 00:51:11.716
I want to pivot.
851
00:51:11.736 --> 00:51:12.777
A couple topics.
852
00:51:12.857 --> 00:51:17.741
A little more, as I like to call it, like a higher elevation or a higher altitude.
853
00:51:17.761 --> 00:51:18.081
Yeah.
854
00:51:18.501 --> 00:51:24.222
Um, these ones I don't have as much experience in, so I'm much more looking for how you have addressed it.
855
00:51:24.702 --> 00:51:26.803
And then there's some of these elements that I'm planning for.
856
00:51:26.883 --> 00:51:40.125
So for example, when you sell a business, how to plan for the taxes and you've done a couple of acquisitions and, and, and sales, I am thinking down the road when our venture goals do IPO.
857
00:51:40.165 --> 00:51:46.707
And so I've done some stuff like QSBS, which is qualified small business stock and, you know, switching to a C corp and some other elements.
858
00:51:46.727 --> 00:51:47.487
That's going to be on the list.
859
00:51:47.507 --> 00:51:47.607
Yeah.
860
00:51:47.647 --> 00:51:47.867
Yeah.
861
00:51:47.887 --> 00:51:48.087
Okay.
862
00:51:48.107 --> 00:51:48.267
Okay.
863
00:51:48.447 --> 00:51:55.949
So let me pass it over to you and then I'll, and I'll probably get some ideas and also think about some of the things that I'm doing right now to kind of plan for what's to come.
864
00:51:56.629 --> 00:51:56.829
Okay.
865
00:51:57.289 --> 00:52:00.370
So on this one, I made myself a little bit of a list.
866
00:52:00.630 --> 00:52:06.131
I didn't want to leave any, well, I mean, there's, there's lots of things you could do, but I wanted to make sure I didn't get off target here and kind of focus.
867
00:52:06.151 --> 00:52:08.851
So I've got my, I made myself a sheet of paper here.
868
00:52:08.871 --> 00:52:13.412
I'm looking at, and the reason I tell you that is if it spawns any ideas, Mike, chime in.
869
00:52:13.572 --> 00:52:15.093
Like if you, if it gives you any thoughts.
870
00:52:15.153 --> 00:52:15.513
So yeah,
871
00:52:17.514 --> 00:52:18.314
The QSBS.
872
00:52:18.915 --> 00:52:20.856
Oh, how I wish I had known about this one.
873
00:52:22.437 --> 00:52:32.885
So Service Autopilot was when we sold that business, which was the most is the most meaningful thing I've done, just from a pure economic standpoint.
874
00:52:33.545 --> 00:52:36.227
That was a S Corp, basically.
875
00:52:36.507 --> 00:52:36.727
Yeah.
876
00:52:37.188 --> 00:52:39.629
And I didn't even know about this QSBS thing.
877
00:52:39.790 --> 00:52:42.331
And so I don't think we need to spend a lot of time going into it.
878
00:52:42.351 --> 00:52:42.552
But it's
879
00:52:44.954 --> 00:52:47.877
Qualified small business stock maybe?
880
00:52:48.057 --> 00:52:48.497
Okay, stock.
881
00:52:48.557 --> 00:52:48.818
Okay.
882
00:52:49.378 --> 00:52:57.466
And this brief summary, and maybe you can chime in a little bit on this one since you probably know more about it than I, since I didn't do it.
883
00:52:57.886 --> 00:52:59.227
You could basically...
884
00:53:00.343 --> 00:53:01.463
not too difficult.
885
00:53:01.663 --> 00:53:06.644
It's pretty easy to save yourself 10 million, not $10 million, but not pay tax on your first $10 million.
886
00:53:07.125 --> 00:53:15.507
There's also this other concept around basis where depending on what your basis is, I think you get like 10 times your basis or something like that.
887
00:53:15.547 --> 00:53:23.889
So there's these unique strategies where you can already have a business, you can roll it in to a C corp, and that becomes your basis.
888
00:53:24.369 --> 00:53:26.189
I'm not educated enough to talk on this one.
889
00:53:26.269 --> 00:53:27.089
I will just tell you
890
00:53:30.650 --> 00:53:34.373
Do you want to do a better job than me at explaining that?
891
00:53:34.533 --> 00:53:34.814
Yeah.
892
00:53:34.834 --> 00:53:39.197
So the cleanest way is to make sure you've held the stock in the C Corp for five years.
893
00:53:39.257 --> 00:53:39.457
Yeah.
894
00:53:39.838 --> 00:53:40.038
Right?
895
00:53:40.518 --> 00:53:47.724
There's some other loopholes, but the last thing you want to do is get on the IRS's bad list right after a huge acquisition.
896
00:53:48.184 --> 00:53:55.971
And so we actually, when we went to a C Corp and then 5% of the company we allowed owners of Augusta to participate in.
897
00:53:56.431 --> 00:54:00.012
When we did that, they got what's called SAFE, so standard agreement for future equity.
898
00:54:00.233 --> 00:54:06.315
But what I'm really happy about is it forced me to get really diligent about like, where's the equity?
899
00:54:07.015 --> 00:54:08.256
How am I planning for this?
900
00:54:08.776 --> 00:54:10.617
Making sure is QSBS eligible?
901
00:54:10.797 --> 00:54:21.201
So you actually have to document for those five years that you are eligible every stage because if the amount of assets that you have is over 50 million, it's no longer qualified.
902
00:54:22.041 --> 00:54:30.651
And so you can't be like a $300 million company with $60 million worth of assets and be like, oh, I want to be QSBS eligible and in five years sell the company.
903
00:54:30.811 --> 00:54:38.060
You have to declare it and it has to be eligible before $50 million in assets, which is not revenue, which is not valuation, it's assets.
904
00:54:38.340 --> 00:54:40.442
So you could still have $100 million in revenue.
905
00:54:40.743 --> 00:54:42.845
You could still have a $200 million valuation.
906
00:54:42.865 --> 00:54:47.309
But if your assets are under $50 million, then you're QSBS eligible.
907
00:54:47.329 --> 00:54:56.739
And the cleanest way is to, first off, BSC Corp, have five years where it's proven in writing has been documented that you are QSBS eligible.
908
00:54:57.139 --> 00:54:57.480
And then...
909
00:54:58.761 --> 00:55:04.427
What's really crazy, so this most recent big, beautiful bill, the thing they slid in here is moving this from $5 million to $10 million.
910
00:55:04.747 --> 00:55:09.392
But also, you can give the equity to different people in your family.
911
00:55:10.072 --> 00:55:15.217
And so the ability to get 1% here, 2% here, 1% here across your family.
912
00:55:15.478 --> 00:55:19.662
Because obviously, if you have a liquidation, there's an element of, hey, I want to buy my family.
913
00:55:19.782 --> 00:55:23.445
parents a house or I want to be able to upgrade my lifestyle to some degree.
914
00:55:23.966 --> 00:55:32.594
And the ability to be able to do that tax free is a great advantage, but it takes a lot of planning to know five years before an acquisition that you're going to do it.
915
00:55:32.754 --> 00:55:36.478
Because I would imagine for you with Service Hub, like five years before you weren't thinking about selling the thing.
916
00:55:36.938 --> 00:55:38.600
We weren't thinking about a year and a half before.
917
00:55:38.960 --> 00:55:40.542
We weren't planning to sell the business.
918
00:55:40.562 --> 00:55:42.323
Like someday we thought we might, but...
919
00:55:43.062 --> 00:55:43.763
We weren't planning to.
920
00:55:43.823 --> 00:55:49.368
So yes, this went, what we didn't go through any planning ahead of time because this wasn't on our radar.
921
00:55:49.448 --> 00:55:57.475
So had we, we would have probably encountered this and I probably had heard it before, but it didn't stick because I was like, I'm not, this isn't something I'm worried about.
922
00:55:57.535 --> 00:55:57.695
Yeah.
923
00:55:58.136 --> 00:56:01.038
So when you converted to a C-Corp, what were you before?
924
00:56:01.459 --> 00:56:05.863
S-Corp, three S-Corp actually, because the three entities and now that's wrapped up in the C-Corp.
925
00:56:06.198 --> 00:56:11.179
All right, so let's say you convert to a C-Corp and you never sell the business or it's way out in the future.
926
00:56:11.399 --> 00:56:13.860
What are the negatives in your mind of being a C-Corp?
927
00:56:14.100 --> 00:56:15.100
Double taxation.
928
00:56:15.160 --> 00:56:22.442
Like you only go C-Corp if you're raising money, you have a bunch of investors, or if you plan to go public.
929
00:56:22.462 --> 00:56:27.123
But like there's not a lot of advantage of a C-Corp in the United States at least.
930
00:56:27.963 --> 00:56:29.384
Like the S Corp is so awesome.
931
00:56:29.544 --> 00:56:31.925
The fact that like profit can just flow directly to you.
932
00:56:31.945 --> 00:56:33.226
There's no money coming between.
933
00:56:33.246 --> 00:56:37.268
Like I had to start taking a salary from the C Corp for the first time ever this year.
934
00:56:37.608 --> 00:56:41.430
Cause like it was foreign to me, like distributions in the past from an S Corp, just move it over.
935
00:56:41.490 --> 00:56:43.651
And like, however much I want to take this year, we're good to go.
936
00:56:43.691 --> 00:56:53.016
But like, um, by having investors, obviously where money's not flowing to me, but more importantly, like having a W2 and all these other aspects was a very, very interesting.
937
00:56:53.657 --> 00:56:55.758
Uh, but there's not a lot of advantages to,
938
00:56:56.478 --> 00:56:59.060
to a C Corp if you're not doing those few things.
939
00:56:59.620 --> 00:56:59.840
Yeah.
940
00:57:00.161 --> 00:57:04.083
And I think that would have probably been where my mindset was because we didn't think we'd sell the business.
941
00:57:04.123 --> 00:57:05.064
It's kind of the same with CityTurf.
942
00:57:05.104 --> 00:57:08.326
CityTurf's an S Corp. We're not really thinking about selling the business.
943
00:57:08.927 --> 00:57:10.988
I'm sure gonna kick myself if we change our mind.
944
00:57:11.729 --> 00:57:14.190
You know, and you gotta decide five years in advance.
945
00:57:14.331 --> 00:57:16.772
And so that's a pretty long time in advance.
946
00:57:16.832 --> 00:57:20.635
But if you're building to sell, then I think this is, it made my list.
947
00:57:20.675 --> 00:57:24.237
And so I felt that if you're building to sell,
948
00:57:25.274 --> 00:57:27.376
then this has to be on the list.
949
00:57:27.537 --> 00:57:28.438
There are some loopholes.
950
00:57:28.918 --> 00:57:29.719
There are some loopholes.
951
00:57:29.739 --> 00:57:39.470
Like, for example, maybe I should say this off-break, but you could potentially have IP held in a C-corp, for example, and then pay fees across.
952
00:57:39.510 --> 00:57:41.132
There are some loopholes that people have played.
953
00:57:41.152 --> 00:57:41.352
Oh, yeah.
954
00:57:42.073 --> 00:57:51.276
But like I much more was like we have to do this really clean because I do not want it to be like I've told because like you have to have stock certificates to the family members.
955
00:57:51.456 --> 00:57:53.157
And so I'm like, hey, here's what's going to happen.
956
00:57:53.337 --> 00:57:54.617
You're not getting all the money, by the way.
957
00:57:54.637 --> 00:57:56.878
A big chunk of this is going to other people.
958
00:57:58.098 --> 00:58:04.700
But to be able to get like, say, 30 or 40 million stock free or tax free would be a huge advantage.
959
00:58:05.261 --> 00:58:09.362
But I think for 95 percent of people staying in S-Corp is the right move.
960
00:58:09.762 --> 00:58:11.403
Is it tax-free at the state level as well?
961
00:58:11.784 --> 00:58:12.524
Just federal, right?
962
00:58:12.744 --> 00:58:13.365
It is state.
963
00:58:13.465 --> 00:58:14.166
It is state as well.
964
00:58:14.386 --> 00:58:15.126
Yeah.
965
00:58:15.146 --> 00:58:18.549
It doesn't affect me as much, just depending on where everyone lives.
966
00:58:18.909 --> 00:58:20.651
But it is free of state as well.
967
00:58:21.091 --> 00:58:22.672
Which gets me to my point number two.
968
00:58:23.313 --> 00:58:23.493
Okay.
969
00:58:23.513 --> 00:58:26.135
If you want to save a lot of taxes, you need to be in the right state.
970
00:58:26.155 --> 00:58:26.895
Dude, okay.
971
00:58:26.936 --> 00:58:27.336
All right.
972
00:58:27.376 --> 00:58:29.618
So I just had this conversation with Brad.
973
00:58:29.638 --> 00:58:30.698
He's our in-house tax guy.
974
00:58:30.799 --> 00:58:31.239
Okay.
975
00:58:31.379 --> 00:58:33.621
And then I had the conversation last week with Brianna.
976
00:58:33.661 --> 00:58:34.842
And I said, Brianna, listen.
977
00:58:36.183 --> 00:58:44.049
Texas is looking really good from a C-Corp perspective, especially because like in Washington, we don't have income tax all up to a million dollars.
978
00:58:44.249 --> 00:58:46.530
So I just made sure like, hey, I'm not going to make a million dollars on paper.
979
00:58:46.570 --> 00:58:46.891
We're good.
980
00:58:47.351 --> 00:58:48.912
But you will if you had an event.
981
00:58:49.032 --> 00:58:49.332
True.
982
00:58:49.813 --> 00:58:50.753
And capital gains.
983
00:58:51.314 --> 00:58:55.797
But the thing is, we have excise tax and that's on top line revenue, about one, one and a half percent.
984
00:58:56.458 --> 00:59:01.882
And so we started running the math like, hey, how big does the business have to be for us to spend six months and one day in Texas?
985
00:59:02.752 --> 00:59:02.912
Yeah.
986
00:59:03.012 --> 00:59:04.012
You know, we like Dallas.
987
00:59:04.032 --> 00:59:04.872
I'm not going to lie.
988
00:59:05.212 --> 00:59:06.093
Texas is a great market.
989
00:59:06.113 --> 00:59:08.733
I thought I was going to leave this place and I'm here all these years later.
990
00:59:08.833 --> 00:59:10.053
Man, the food is good.
991
00:59:10.133 --> 00:59:11.193
You got good venues.
992
00:59:11.453 --> 00:59:12.274
Airports insane.
993
00:59:12.654 --> 00:59:13.914
Oh, you got two of them.
994
00:59:14.234 --> 00:59:15.214
Anyways.
995
00:59:15.674 --> 00:59:16.954
But yes, moving to the right place.
996
00:59:16.974 --> 00:59:25.516
So assuming that you can't pick up and leave your lawn care business from state to state, something like software, definitely moving would be certainly an opportunity.
997
00:59:25.676 --> 00:59:27.996
I'll add one thing, Jonathan, because I've been researching this a bunch.
998
00:59:28.076 --> 00:59:31.997
It's like for those people that could potentially move, they're maybe not in home services or a local business.
999
00:59:32.757 --> 00:59:38.265
What's interesting is the IRS is pretty lenient on where you incorporate.
1000
00:59:39.788 --> 00:59:44.433
And basically what they look at is strategy and decision-making coming from that place.
1001
00:59:45.153 --> 00:59:51.599
And so my biggest concern is, okay, if I'm building a headquarter building here and having 100 employees inside this office, is that going to be a problem for me?
1002
00:59:52.060 --> 00:59:57.325
And it's like, no, if you move there and you have your leadership team or you're there, you're making decisions from that place.
1003
00:59:58.486 --> 01:00:02.770
From what I can tell in terms of case records and looking through where people have gotten in trouble...
1004
01:00:03.899 --> 01:00:14.942
I'm in the clear, which is kind of crazy to me that you could literally move, have most of your operations being, but because strategically and decision-making in one place, you could still incorporate in that state.
1005
01:00:16.002 --> 01:00:16.203
Yep.
1006
01:00:16.883 --> 01:00:17.103
Crazy.
1007
01:00:17.123 --> 01:00:17.243
Yep.
1008
01:00:19.624 --> 01:00:23.225
So you might see us one day in Dallas for six months.
1009
01:00:23.245 --> 01:00:23.785
There you go.
1010
01:00:23.805 --> 01:00:24.205
I don't know.
1011
01:00:25.040 --> 01:00:27.021
I've got so many friends because of Service Autopilot.
1012
01:00:27.041 --> 01:00:29.903
We used to throw events here in Service Autopilot in Dallas.
1013
01:00:29.943 --> 01:00:34.185
And so I've had so many friends that have told me they might end up in Dallas someday.
1014
01:00:34.725 --> 01:00:36.366
I've heard really good things.
1015
01:00:36.386 --> 01:00:37.727
Not the summer though.
1016
01:00:37.807 --> 01:00:38.427
Not the summer.
1017
01:00:38.467 --> 01:00:39.108
Can't handle that.
1018
01:00:39.208 --> 01:00:40.108
Yeah, it is.
1019
01:00:40.428 --> 01:00:40.709
I agree.
1020
01:00:40.769 --> 01:00:41.609
I guess I'm used to it.
1021
01:00:41.629 --> 01:00:47.192
But yeah, in my perfect world, we would spend three months of the year, the three summer months elsewhere.
1022
01:00:47.472 --> 01:00:49.914
July, August, and September are the three months.
1023
01:00:49.934 --> 01:00:50.634
Too much, too much.
1024
01:00:50.654 --> 01:00:52.075
They're the ones you don't want to be here, but...
1025
01:00:52.555 --> 01:00:53.939
Okay, let's go back.
1026
01:00:54.059 --> 01:00:54.660
We've moved.
1027
01:00:54.720 --> 01:00:55.963
We moved to Texas and Dallas.
1028
01:00:55.983 --> 01:00:57.046
That's the second option.
1029
01:00:57.066 --> 01:00:57.346
What else?
1030
01:00:57.968 --> 01:00:58.429
Yeah, so...
1031
01:00:59.424 --> 01:01:04.006
This isn't really about saving tax, but I felt since we were talking about selling, I had to interject this.
1032
01:01:04.246 --> 01:01:12.831
If you were to sell your business, and I won't go into much detail, Mike, unless you want to ask me, I would tell you you have to run what's called a process.
1033
01:01:13.571 --> 01:01:22.636
So what's going to happen is you're going to get a lot of people that might call you and express interest in your business, and they're going to want to talk to you about maybe buying it.
1034
01:01:23.556 --> 01:01:25.678
And the offers are going to sound great.
1035
01:01:25.698 --> 01:01:27.740
Maybe you talk to a couple people and the offers sound great.
1036
01:01:28.160 --> 01:01:31.523
But there's still 100 more buyers out there, potential buyers.
1037
01:01:31.643 --> 01:01:42.071
And what happens is when you create competition or you even tell everybody that you're even up for sale, you then create a bunch of competition, which creates a bidding process.
1038
01:01:42.792 --> 01:01:45.935
And that bidding process will raise the value of your organization.
1039
01:01:45.955 --> 01:01:46.355
Right.
1040
01:01:47.332 --> 01:01:54.937
You cannot convince me that this is not the, I will, there is literally a less than zero chance I would sell a company without running a process.
1041
01:01:55.798 --> 01:02:03.123
And so you might say, well, like when I sold the service auto pilot business, we paid millions and millions of dollars to the investment bank.
1042
01:02:04.022 --> 01:02:05.183
I made more than that.
1043
01:02:05.403 --> 01:02:20.972
I mean, so my argument is, worst case, if you run a process and you use a bank or a broker to sell your company, you will at least get back all the money for the advisor, the broker, the whatever you want to call them.
1044
01:02:21.672 --> 01:02:23.714
And they will have done a lot of the work for you.
1045
01:02:23.794 --> 01:02:25.736
They will have de-stressed the process.
1046
01:02:26.176 --> 01:02:31.060
They will, if you pick the right one, they will be able to introduce you to the right tax attorneys.
1047
01:02:31.100 --> 01:02:33.002
They will be able to help you with so many things.
1048
01:02:33.022 --> 01:02:38.406
They might even, if the good ones will even be able to say, don't do a deal with them, do a deal with them.
1049
01:02:38.446 --> 01:02:41.909
Like they'll be able to give you a lot more than just helping you facilitate the transaction.
1050
01:02:42.190 --> 01:02:43.971
There's a tremendous amount of advice that comes with this.
1051
01:02:43.991 --> 01:02:48.115
So this doesn't necessarily say you, it actually, it does save you tax.
1052
01:02:48.135 --> 01:02:48.235
Yeah.
1053
01:02:48.595 --> 01:02:50.056
I'll say how in a moment.
1054
01:02:50.316 --> 01:02:54.358
But this is more about just getting the maximum value for your company.
1055
01:02:54.778 --> 01:02:58.560
Just remember when the day comes, you want to run a process and research that.
1056
01:02:59.440 --> 01:03:03.222
I hinted at this idea of they can also save you money.
1057
01:03:03.742 --> 01:03:06.604
So when you go to sell your business, like how are, how's your business?
1058
01:03:07.044 --> 01:03:11.227
Like assets are taxed in one way, intellectual property stock.
1059
01:03:11.247 --> 01:03:13.088
They're all taxed in the different ways.
1060
01:03:13.468 --> 01:03:18.492
And so how you position the sell is really critical to your long-term tax bill.
1061
01:03:18.572 --> 01:03:19.833
I'm not going to do a deep dive on that.
1062
01:03:19.853 --> 01:03:23.035
In fact, I don't even think I could possibly recite all the details to you.
1063
01:03:23.315 --> 01:03:24.716
I put most of that out of my brain.
1064
01:03:24.736 --> 01:03:25.116
It was painful.
1065
01:03:25.176 --> 01:03:29.199
I think the basic is like on that one is like usually the buyer wants it in assets, right?
1066
01:03:29.659 --> 01:03:29.859
Yeah.
1067
01:03:30.079 --> 01:03:30.680
You want it in stock.
1068
01:03:30.700 --> 01:03:31.680
And you don't want it in assets.
1069
01:03:31.701 --> 01:03:34.342
Because they want to be able to amortize or depreciate it.
1070
01:03:34.502 --> 01:03:36.644
You don't have to pay taxes on.
1071
01:03:37.084 --> 01:03:37.545
Cool.
1072
01:03:37.585 --> 01:03:38.225
That's exactly right.
1073
01:03:38.245 --> 01:03:40.487
I think assets become ordinary income, if I remember.
1074
01:03:40.787 --> 01:03:48.913
And so that's why, again, if you don't create a competitive process, you have less negotiating power here.
1075
01:03:49.493 --> 01:03:55.915
And so one, it might drive a lower valuation for your company, but it could also drive lesser terms.
1076
01:03:56.055 --> 01:03:59.916
And terms are things like the classification we just talked about.
1077
01:04:00.076 --> 01:04:01.436
Terms could be your earn out.
1078
01:04:01.756 --> 01:04:06.417
Like, do you get paid all the money now or do you get paid in tranches over time for hitting goals?
1079
01:04:07.878 --> 01:04:09.918
How long is your non-compete?
1080
01:04:10.438 --> 01:04:14.779
There are so many details that have to get negotiated in these transactions.
1081
01:04:15.360 --> 01:04:16.760
Creating a competitive process
1082
01:04:18.095 --> 01:04:21.400
puts you in a little bit more of the driver's seat.
1083
01:04:21.640 --> 01:04:29.673
And so I would tell you, it both benefits you in the total valuation and also benefits you in terms of what the tax bill might be after the fact.
1084
01:04:29.992 --> 01:04:39.435
And I think to just come into the negotiation table, especially if you're dealing with a sophisticated buyer that buys a lot of businesses, private equity, et cetera, they have done this dozens, if not hundreds of times.
1085
01:04:39.835 --> 01:04:48.998
And if this is your one shot, the fact that you would think that you could do it on your own without like an investment banker or at least some advising is crazy.
1086
01:04:49.038 --> 01:04:57.461
And this one thing that I've always, whether it be yourself or other people that I look up to, is they always rely on, and they're never afraid to pay money for advice.
1087
01:04:58.081 --> 01:05:17.983
and this is probably getting ahead of ourselves, but like even, I know you mentioned recently in one of your videos, how like you use, I think Goldman Sachs is like, that's hundreds of thousands of dollars, but what it unlocks, and I think what so many people, including myself that we're, you know, we raise with not a lot, we have this mentality, like I'm not gonna pay a couple hundred thousand dollars for someone to push a couple buttons for me.
1088
01:05:18.583 --> 01:05:26.787
But it's the relationships and the things that they, because they have done it a thousand times before, the doors they can open up for you that are worth far more than their fee.
1089
01:05:27.187 --> 01:05:42.954
And I think to your point, like around creating competition also is somewhat linked to getting investment bankers, people that have been at this kind of transaction before that will prevent you from walking into a trap where, oh, you know, 50% of it doesn't earn out and you got to be around for four years and you got to hit these targets.
1090
01:05:43.294 --> 01:05:45.935
And all of a sudden you've got these very, very golden handcuffs.
1091
01:05:46.360 --> 01:05:46.600
Yeah.
1092
01:05:47.261 --> 01:05:51.063
And I think it's important to know, like you, Mike, I didn't grow up believing these things.
1093
01:05:51.903 --> 01:05:55.005
This is a process where I've come to believe these things.
1094
01:05:55.085 --> 01:05:59.168
And I look back and say, man, I wish I had believed this earlier.
1095
01:05:59.188 --> 01:06:02.770
I was a little more in the earlier days of business.
1096
01:06:02.850 --> 01:06:06.032
And as a younger entrepreneur, younger person, I was very careful.
1097
01:06:06.052 --> 01:06:07.613
I was like nickel and diming things.
1098
01:06:07.873 --> 01:06:12.176
I mean, I was saving every penny kind of guy being really careful.
1099
01:06:12.956 --> 01:06:14.357
And that slowed me down.
1100
01:06:14.838 --> 01:06:15.058
But...
1101
01:06:15.638 --> 01:06:17.039
you know, there's pros and cons.
1102
01:06:17.059 --> 01:06:22.943
Like you can go too far the other stream, but I totally believe in paying experts to just buy speed and give you the answer.
1103
01:06:22.963 --> 01:06:24.124
It doesn't always work out.
1104
01:06:24.164 --> 01:06:25.044
You get bad advice.
1105
01:06:25.565 --> 01:06:30.248
Not everybody's legit, but on the whole, you win in a massive way going that route.
1106
01:06:30.788 --> 01:06:31.508
How do you navigate that?
1107
01:06:31.528 --> 01:06:31.869
Because like...
1108
01:06:32.716 --> 01:06:36.838
I've always thought in one regard, it's like, oh, people are trying to be cheap or they're trying to save money.
1109
01:06:37.258 --> 01:06:45.462
But then sometimes I think it's like, it's more of a matter of pride because if I use anyone else, I will not be able to say I did it myself.
1110
01:06:45.902 --> 01:06:55.967
Like if I take someone else's advice, if I get someone else's course, if I use an agency even, for example, or if I get an advisor to help me sell my business, I'm not able to say I did this, I'm not self-made.
1111
01:06:56.507 --> 01:06:57.447
And it's almost like this pride.
1112
01:06:57.467 --> 01:06:57.967
I just wanna win.
1113
01:06:58.047 --> 01:06:58.828
Yeah, exactly.
1114
01:06:59.388 --> 01:07:02.989
I've got, there's like nothing in my life I can say it was just me.
1115
01:07:03.009 --> 01:07:07.411
Like, yeah, I got to grow up in what became Dallas, Texas.
1116
01:07:07.491 --> 01:07:11.592
Like we grew up in, in, on, in the country, like full on country.
1117
01:07:12.172 --> 01:07:16.254
I could have to ride 10 miles on my bicycle to see my friends like full on country.
1118
01:07:16.574 --> 01:07:21.935
And now my parents have a Tom thumb across the street, church around them, a car apartment complex.
1119
01:07:21.955 --> 01:07:26.977
Like my dad just, like, they had, he, when my dad used to race bikes for the U S racing team, bicycles, right.
1120
01:07:27.117 --> 01:07:31.559
When he was leaving California, he was either going to go to Wichita, Kansas, or he's going to go to Dallas.
1121
01:07:31.599 --> 01:07:33.260
And I thank my dad.
1122
01:07:33.320 --> 01:07:35.201
Thank you, dad, so much.
1123
01:07:36.481 --> 01:07:40.363
And so had dad gone to Wichita, I don't think any of us would be talking to each other.
1124
01:07:40.663 --> 01:07:42.424
And so none of us are self-made.
1125
01:07:42.484 --> 01:07:44.945
My dad taught me so many things.
1126
01:07:44.965 --> 01:07:47.586
He helped me make my first flyer for my lawn care business.
1127
01:07:47.626 --> 01:07:51.088
My mom drove me in the minivan and dropped me off in town.
1128
01:07:51.728 --> 01:07:53.309
Like none of us are self-made.
1129
01:07:53.449 --> 01:08:01.593
And so I just, we all, like we all should take every advantage we could possibly get because millions of people have advantages and do nothing with them.
1130
01:08:02.254 --> 01:08:02.634
Millions.
1131
01:08:03.034 --> 01:08:03.915
They have so many advantages.
1132
01:08:04.055 --> 01:08:06.416
It's not about did I get an advantage or not?
1133
01:08:06.476 --> 01:08:09.437
It's about did I take the advantage and did I do more?
1134
01:08:09.578 --> 01:08:12.659
And so like none of us are purely self-made.
1135
01:08:12.679 --> 01:08:13.400
That's nonsense.
1136
01:08:13.420 --> 01:08:13.800
Yeah.
1137
01:08:14.440 --> 01:08:16.302
And so I, I'm sorry, got me going there.
1138
01:08:16.342 --> 01:08:17.323
I just, it doesn't matter.
1139
01:08:17.463 --> 01:08:23.868
So creating competition, using, using advisors, investment bankers to be able to go faster.
1140
01:08:24.409 --> 01:08:25.630
Is there another one you want to talk?
1141
01:08:25.650 --> 01:08:26.811
Oh, I got, I got several.
1142
01:08:26.831 --> 01:08:26.991
Okay.
1143
01:08:27.011 --> 01:08:27.171
Okay.
1144
01:08:27.311 --> 01:08:28.032
Okay.
1145
01:08:28.572 --> 01:08:33.417
So another one would be, and this is again, not quite tax savings, but this is a little bit of a learning.
1146
01:08:34.718 --> 01:08:38.661
I would suggest for most people you go ahead and hire a wealth advisor.
1147
01:08:38.681 --> 01:08:38.881
So if,
1148
01:08:39.948 --> 01:08:42.529
And let me tell you where this knowledge is, where this is coming from.
1149
01:08:42.909 --> 01:08:45.750
So I started investing in the stock market when I was 20.
1150
01:08:46.351 --> 01:08:48.051
My parents didn't invest at all.
1151
01:08:48.191 --> 01:08:49.152
Like they didn't do this.
1152
01:08:49.752 --> 01:08:53.894
My first, I got my first job, my only job at a software company was 19.
1153
01:08:54.014 --> 01:08:55.494
This is an interesting story.
1154
01:08:56.095 --> 01:08:56.835
My boss...
1155
01:08:57.965 --> 01:09:03.147
what eventually became the COO of Service Autopilot when we started the business.
1156
01:09:03.688 --> 01:09:05.308
He retired two years.
1157
01:09:05.448 --> 01:09:06.629
He was like retired at 40.
1158
01:09:06.689 --> 01:09:07.910
He was very successful.
1159
01:09:08.650 --> 01:09:11.111
And they lived in Vail and didn't work for 13 years.
1160
01:09:11.151 --> 01:09:12.211
We started Service Autopilot.
1161
01:09:12.292 --> 01:09:14.072
He came and worked with us.
1162
01:09:15.053 --> 01:09:18.414
And why I tell you this is he got me when I was a 20-year-old kid.
1163
01:09:18.434 --> 01:09:20.255
He said, hey, you should use Vanguard.
1164
01:09:20.835 --> 01:09:21.556
He was an investor.
1165
01:09:22.448 --> 01:09:24.230
And I started using Vanguard.
1166
01:09:24.730 --> 01:09:26.812
I liked finance already, but I didn't know how to do it.
1167
01:09:26.852 --> 01:09:28.053
Nobody had ever shown me how to do it.
1168
01:09:28.073 --> 01:09:28.894
So I started using Vanguard.
1169
01:09:28.914 --> 01:09:31.596
Then I started trading stocks on E-Trade and I started doing that whole deal.
1170
01:09:31.896 --> 01:09:34.118
So I tell you all this to say, I love finance.
1171
01:09:34.279 --> 01:09:35.640
I've been doing it since I was 20.
1172
01:09:35.920 --> 01:09:39.924
There were absolute times in my career where I had to cash out the money for my businesses and build.
1173
01:09:40.284 --> 01:09:43.206
Things happen along the way, but then I'd get back to investing as soon as I could.
1174
01:09:44.107 --> 01:09:46.069
And that's always been my wiring.
1175
01:09:46.109 --> 01:09:50.952
I used Vanguard, had a lot of money at Vanguard, I use Wealthfront, I've done all these different things.
1176
01:09:51.733 --> 01:09:56.657
And I actually didn't start using Goldman Sachs till I sold the business, the service autopilot business.
1177
01:09:56.757 --> 01:09:59.359
And I've been negative on financial advisors, actually.
1178
01:10:00.474 --> 01:10:02.195
I'm a big, big fan of Vanguard.
1179
01:10:02.635 --> 01:10:05.877
And I had a lot of money there where I qualified for the private client group at Vanguard.
1180
01:10:05.917 --> 01:10:08.419
And I still feel...
1181
01:10:09.119 --> 01:10:11.721
So I wanted to say that and that's my belief.
1182
01:10:11.901 --> 01:10:17.624
Yeah, I still believe it's generally worth the money to use a financial advisor if you can get a high-level one.
1183
01:10:18.065 --> 01:10:19.766
High-level is very important.
1184
01:10:20.026 --> 01:10:21.547
Like there's a million financial advisors.
1185
01:10:21.907 --> 01:10:23.288
I am negative on the most of them.
1186
01:10:23.588 --> 01:10:24.528
You got to get the right ones.
1187
01:10:24.889 --> 01:10:25.709
Now, here's the reason.
1188
01:10:26.530 --> 01:10:26.950
Because...
1189
01:10:28.167 --> 01:10:42.351
building a business and being an operator and protecting your asset financially by having reserves and just all the decisions you make are very, very different than having a wealth creation event and now having a pile of money you've got to invest.
1190
01:10:42.791 --> 01:10:44.092
The psychology is very different.
1191
01:10:44.132 --> 01:10:49.714
Fortunately, I already was comfortable with this, but I've learned a lot even since then.
1192
01:10:50.794 --> 01:10:54.195
And so I would tell you that whenever you have a deal, you know,
1193
01:10:54.455 --> 01:10:58.578
I have seen so many people lose money, like so many people.
1194
01:10:59.219 --> 01:11:02.501
So you pay your tax bill and then you invest in other people's companies.
1195
01:11:02.541 --> 01:11:03.802
You do angel investing.
1196
01:11:04.083 --> 01:11:05.704
You buy a bunch of real estate deals.
1197
01:11:05.744 --> 01:11:07.245
You put leverage on those deals.
1198
01:11:07.385 --> 01:11:08.306
I mean, you know,
1199
01:11:08.595 --> 01:11:15.037
The stories are never ending of very wealthy, very successful people who have just set money on fire.
1200
01:11:15.877 --> 01:11:21.358
And I think a wealth advisor for most people is really smart because you are being challenged.
1201
01:11:21.798 --> 01:11:24.799
At least let yourself be challenged where you have to defend your idea.
1202
01:11:25.379 --> 01:11:27.320
Just that will probably save you a ton of money.
1203
01:11:27.700 --> 01:11:31.121
So for most people, I would tell you, use a wealth advisor, okay?
1204
01:11:31.541 --> 01:11:34.822
And then the other one, and then I'll give you the rest will be tax savings.
1205
01:11:34.842 --> 01:11:35.642
The other one would be,
1206
01:11:36.462 --> 01:11:40.445
Really think about what you might, if you have the luxury of doing this, what will you do next?
1207
01:11:41.906 --> 01:11:43.387
I see a couple things happen here.
1208
01:11:44.488 --> 01:11:46.690
A lot of people have a transaction.
1209
01:11:47.792 --> 01:11:50.473
And they just go right back to doing what they did before.
1210
01:11:50.993 --> 01:11:58.074
And you have this moment in time to do any, maybe if it goes well enough financially, to do anything you want, to shift gears, to try something new, to stretch yourself.
1211
01:11:58.814 --> 01:12:00.615
Most people are just like, it's just robotic.
1212
01:12:00.675 --> 01:12:03.335
And you wake up again in five years and you're living the same life again.
1213
01:12:03.355 --> 01:12:04.095
What did you accomplish?
1214
01:12:04.115 --> 01:12:08.536
You just put a bunch of money in the bank account, but nothing else got better or changed in your life.
1215
01:12:08.916 --> 01:12:10.717
I'm not saying it needs to, it might not need to.
1216
01:12:10.737 --> 01:12:12.677
You might've loved, loved, loved what you were doing.
1217
01:12:13.277 --> 01:12:23.226
It's just that if you have a little bit of a plan going into this about what might be my next chapter, what I'm going to try, I think it will be a more wonderful experience for you.
1218
01:12:23.266 --> 01:12:31.713
Having been one of the very fewest people in the world that gets to sell something and then have maybe a moment of freedom to figure out what's next and create the ideal life.
1219
01:12:32.053 --> 01:12:33.234
It's not about tax savings.
1220
01:12:33.254 --> 01:12:34.735
That's just about pure quality of life.
1221
01:12:34.755 --> 01:12:38.318
So try to think about that and go on a journey of exploring, talking to other entrepreneurs.
1222
01:12:38.338 --> 01:12:38.859
What did you do?
1223
01:12:38.879 --> 01:12:39.439
What did you try?
1224
01:12:39.459 --> 01:12:39.559
Yeah.
1225
01:12:40.640 --> 01:12:42.082
And that was a really good one.
1226
01:12:42.162 --> 01:12:44.484
So, okay, now the rest are all be money things.
1227
01:12:46.466 --> 01:12:48.348
I put a bunch of money into what's called a DAF.
1228
01:12:49.209 --> 01:12:52.932
So what that is, it's called a donor advised fund.
1229
01:12:53.152 --> 01:12:55.154
I was using Vanguard, so I used Vanguard.
1230
01:12:55.735 --> 01:13:00.039
So as an example, it's not something we talk about, but Tiffany, I give money.
1231
01:13:00.359 --> 01:13:01.901
So if you know you're going to give away money,
1232
01:13:02.933 --> 01:13:08.118
now or in the future, you could just give all that money away today, essentially.
1233
01:13:08.478 --> 01:13:11.481
So what happens is, I'll just put a number to it.
1234
01:13:11.521 --> 01:13:17.606
Let's say you sold your business for $10 million and you give 10% of your income, hypothetically.
1235
01:13:17.866 --> 01:13:22.651
So you could right now give away $1 million today at the time you sell the business.
1236
01:13:22.671 --> 01:13:24.092
So you pay no tax on that $1 million.
1237
01:13:25.313 --> 01:13:28.362
That million dollars goes into what's called a donor advised fund.
1238
01:13:28.984 --> 01:13:32.715
So I have mine and I've refreshed it many several times.
1239
01:13:33.769 --> 01:13:37.632
And that, so that million dollars would be put into the donor advice fund.
1240
01:13:37.692 --> 01:13:38.693
You still control it.
1241
01:13:38.753 --> 01:13:40.294
You can't, you can't spend it.
1242
01:13:40.334 --> 01:13:41.295
You can never get it back.
1243
01:13:41.475 --> 01:13:43.176
It's gone, but you control it.
1244
01:13:43.196 --> 01:13:48.940
So you can invest in the stock market, REITs, fixed income, whatever you want to invest in, you can let that money grow.
1245
01:13:49.020 --> 01:13:53.664
And then you can give money away from that charity until the money's gone.
1246
01:13:53.684 --> 01:13:55.905
Is that through charity, a trust, or is that flowing?
1247
01:13:55.945 --> 01:13:56.926
How's it going into your tax return?
1248
01:13:56.946 --> 01:13:59.588
Like if there's interest or appreciation?
1249
01:14:00.140 --> 01:14:00.500
It doesn't.
1250
01:14:00.540 --> 01:14:01.941
It's like its own separate thing.
1251
01:14:02.361 --> 01:14:03.962
You literally don't own the money anymore.
1252
01:14:04.662 --> 01:14:05.102
Interesting.
1253
01:14:05.403 --> 01:14:06.123
Yeah.
1254
01:14:06.443 --> 01:14:08.984
You just Google DAF, D-A-F.
1255
01:14:09.204 --> 01:14:14.087
So if you sell the stock, though, and it's appreciated, that gain, is that taxed?
1256
01:14:14.447 --> 01:14:14.587
No.
1257
01:14:16.168 --> 01:14:16.588
Tax-free.
1258
01:14:17.329 --> 01:14:17.869
Oh, wow.
1259
01:14:17.889 --> 01:14:19.151
You can never go get it back.
1260
01:14:19.171 --> 01:14:19.271
True.
1261
01:14:19.291 --> 01:14:20.011
You can't spend it.
1262
01:14:20.291 --> 01:14:23.554
But if I put a million bucks in there, and I have a lot of money in mind.
1263
01:14:23.794 --> 01:14:23.974
Yeah.
1264
01:14:24.295 --> 01:14:27.217
And so it just keeps growing and growing.
1265
01:14:27.838 --> 01:14:29.079
And I give money out of it.
1266
01:14:29.519 --> 01:14:30.480
And it's easy to give money.
1267
01:14:30.660 --> 01:14:31.701
Everybody accepts these.
1268
01:14:31.921 --> 01:14:36.125
And you just have Vanguard wire the money from your thing to the charity.
1269
01:14:36.925 --> 01:14:38.806
And there, this is a huge thing.
1270
01:14:38.906 --> 01:14:42.988
And so if you put a million in, it could go to hypothetically 2 million.
1271
01:14:43.208 --> 01:14:44.368
That's all tax-free.
1272
01:14:44.388 --> 01:14:45.909
I mean, it doesn't come back to you in any way.
1273
01:14:46.249 --> 01:14:49.770
It's, it's like, it, there's no taxes, period.
1274
01:14:49.910 --> 01:14:51.571
The growth, it wasn't tax going in.
1275
01:14:51.731 --> 01:14:54.272
You didn't pay tax on a million bucks and all the growth is non-taxable.
1276
01:14:54.552 --> 01:14:58.894
And then you can give it like, it's almost, I've never had, is there a limit on it?
1277
01:14:59.534 --> 01:15:11.961
There's something in my, where I'm thinking like when it gets under like 20,000 bucks or 10,000 bucks, you have to pay maybe a small management fee to Vanguard or something, but it's like nothing.
1278
01:15:12.021 --> 01:15:13.582
It's like a couple hundred bucks a year or something.
1279
01:15:13.622 --> 01:15:14.242
I can't remember.
1280
01:15:14.262 --> 01:15:19.085
I haven't, I keep refreshing it, but that way you could take your tax advantage right now.
1281
01:15:19.245 --> 01:15:22.827
So if you have, if you're a person that gives money away, I can't recommend this enough.
1282
01:15:23.837 --> 01:15:28.299
Yeah, one of the things we talked about, like, owners at Augusta, last year we started what we called the Seven Figure Club.
1283
01:15:28.659 --> 01:15:37.322
And one of the first things we talked about was, like, setting up trusts for even just when you pass away, making sure that tax event is clear.
1284
01:15:37.342 --> 01:15:39.002
Like, who owns the business?
1285
01:15:39.383 --> 01:15:40.363
Where are your assets?
1286
01:15:40.983 --> 01:15:45.845
Whether it be, you know, 401k, IRA, your house.
1287
01:15:46.745 --> 01:15:55.795
From an insurance perspective, from a asset protection perspective, and then also just from a, you know, when you pass away, like making sure your family is taken care of.
1288
01:15:56.295 --> 01:16:04.844
It was like, I think for a lot of them, eye-opening is the idea of like, oh, my assets go into probate if this doesn't, you know, there's a big process.
1289
01:16:04.864 --> 01:16:08.628
If I got hit by a bus tomorrow, my kids and family could potentially be impacted a lot.
1290
01:16:09.568 --> 01:16:10.769
I was going to talk about this one.
1291
01:16:10.809 --> 01:16:13.932
So I'll mention a little more on that because that is really, really critical.
1292
01:16:14.332 --> 01:16:27.405
I think even in a smaller size business, like I know for a moment, like, you know, we're talking about, you know, tens of millions, hundreds of millions, but like even for someone doing a million dollar business, especially if you have kids, if you have a family, like, I think this is something that we can really, you know, it's really important.
1293
01:16:27.863 --> 01:16:28.103
Yeah.
1294
01:16:28.363 --> 01:16:28.543
Yeah.
1295
01:16:28.563 --> 01:16:30.124
So I would like to add a little more to that.
1296
01:16:30.144 --> 01:16:36.246
But you said a lot that like, if you just, if we just stopped right there, and somebody went and looked into this, I can't recommend enough.
1297
01:16:36.286 --> 01:16:39.487
It's more important than a will is at least do a will.
1298
01:16:39.707 --> 01:16:40.467
If you don't have a will.
1299
01:16:40.808 --> 01:16:42.928
And if you if you don't have a will, at least just go do.
1300
01:16:43.889 --> 01:16:45.129
What's the really popular sites?
1301
01:16:45.149 --> 01:16:46.450
Power of Attorney?
1302
01:16:47.210 --> 01:16:47.890
No, a will.
1303
01:16:47.910 --> 01:16:50.211
There's like online sites, you could at least go do it today.
1304
01:16:50.766 --> 01:16:51.907
Oh, like anything.
1305
01:16:51.927 --> 01:16:52.267
Legal Zoom.
1306
01:16:52.347 --> 01:16:53.227
Yeah, legal Zoom.
1307
01:16:53.407 --> 01:16:58.709
At least do that and then make it better later, but at least get that done because it's a mess otherwise.
1308
01:16:59.390 --> 01:17:01.090
Let me give you a couple others.
1309
01:17:01.110 --> 01:17:02.791
Have you heard of Opportunity Zones?
1310
01:17:03.091 --> 01:17:03.611
Yeah, yeah.
1311
01:17:03.852 --> 01:17:05.332
Okay, so Opportunity Zones.
1312
01:17:05.532 --> 01:17:06.693
I chose not to do them.
1313
01:17:07.653 --> 01:17:16.137
I'm a pretty conservative investor, and I don't like to let the potential tax savings drive investment decisions for me.
1314
01:17:16.557 --> 01:17:20.258
So I chose not to do opportunity zones, but that doesn't mean you shouldn't.
1315
01:17:20.698 --> 01:17:25.841
But there are these areas where opportunity zones have been defined.
1316
01:17:25.861 --> 01:17:31.663
I can't remember all the details now, but back in, I didn't know about them actually before I was selling service autopilot.
1317
01:17:32.163 --> 01:17:33.164
It was presented to us.
1318
01:17:33.725 --> 01:17:38.169
So as an example, maybe there were opportunity zones back in the day in Detroit.
1319
01:17:38.229 --> 01:17:39.850
I don't know if they still exist today.
1320
01:17:40.571 --> 01:17:45.396
But there are opportunity zones all over the country where they've been defined as areas that are trying to be revitalized.
1321
01:17:45.436 --> 01:17:54.805
And so if you invest money in those areas, you get lots of tax benefits and you get lots of tax savings on the growth of the investment as it appreciates in that market.
1322
01:17:55.285 --> 01:18:04.577
I won't say a lot more about it than that, but opportunity zones is a word to keep in mind, especially if you like investing in real estate, but you can invest in businesses and opportunity zones.
1323
01:18:04.597 --> 01:18:06.340
So there's a lot you can do with them.
1324
01:18:06.720 --> 01:18:08.563
I just chose not to go that route.
1325
01:18:09.193 --> 01:18:20.962
How much of this, when you look at other friends of yours that might have had an exit, is all the time, energy, and effort put towards trying to get around taxes versus just pay the tax bill and live your life?
1326
01:18:21.222 --> 01:18:25.686
I think people think about it, but I think they're just going.
1327
01:18:26.246 --> 01:18:31.410
And they want their accountant to try to find stuff, or they're like, oh, my accountant doesn't try very hard.
1328
01:18:31.630 --> 01:18:33.772
You hear those kind of, they're not pushing very hard.
1329
01:18:34.252 --> 01:18:36.234
But I don't feel like...
1330
01:18:37.865 --> 01:18:40.566
It's not a mass, it's a conversation, but it's not a massive conversation.
1331
01:18:40.886 --> 01:18:43.807
In the world I live in, the bigger conversation is actually the trust.
1332
01:18:45.088 --> 01:18:51.970
It's more around thinking about what happens to all the wealth if something happens to me, more than it is about saving tax money.
1333
01:18:52.010 --> 01:18:58.853
Of course, you don't want to waste tax money, but I would say it's more on the trust side where I hear the bigger conversations, which I'm going to mention here in just a moment.
1334
01:18:59.093 --> 01:18:59.973
Yeah, go for it.
1335
01:19:00.413 --> 01:19:04.215
Just again, try not to go too deep with these things, but to expose you with some things.
1336
01:19:04.335 --> 01:19:04.855
I think...
1337
01:19:05.892 --> 01:19:12.139
There's another tax strategy where the broad descriptor of it would be called like tax.
1338
01:19:12.299 --> 01:19:14.722
I think they're called tax aware strategies or this.
1339
01:19:15.142 --> 01:19:16.504
I don't want to go too far down this.
1340
01:19:16.524 --> 01:19:17.465
I'm going to lose most everybody.
1341
01:19:17.485 --> 01:19:24.232
But it's like this where you can buy long on stocks and also short the stocks and you're generating all these losses.
1342
01:19:24.252 --> 01:19:24.412
Yeah.
1343
01:19:25.433 --> 01:19:28.816
And I think one of the big strategies out there is called AQR.
1344
01:19:28.916 --> 01:19:30.337
I may be getting my acronym wrong.
1345
01:19:31.038 --> 01:19:33.560
I've got a good friend that does this.
1346
01:19:33.700 --> 01:19:35.621
He actually works in the trades.
1347
01:19:35.661 --> 01:19:36.842
His name's Nick Bartolo.
1348
01:19:37.343 --> 01:19:38.924
And he has a company called Essential Partners.
1349
01:19:38.964 --> 01:19:46.210
So if anybody's listening to this, I'm not trying to plug him, but there are very few people that can help you with this strategy.
1350
01:19:47.010 --> 01:19:47.970
And I trust Nick.
1351
01:19:47.990 --> 01:19:54.392
And again, not a plug here, but if you are somebody that's about to sell, this is a strategy you want to do before you sell.
1352
01:19:54.773 --> 01:20:00.795
Because what can happen is you can generate all these losses and then you can use them to offset your capital gains.
1353
01:20:01.215 --> 01:20:06.056
I don't even think it existed in this form when we were doing our transaction.
1354
01:20:06.576 --> 01:20:08.197
It is a fascinating thing.
1355
01:20:08.437 --> 01:20:09.338
Fascinating concept.
1356
01:20:09.358 --> 01:20:11.120
You probably need a year or two probably, right?
1357
01:20:11.140 --> 01:20:14.704
It just depends on how much losses you're trying to do.
1358
01:20:14.744 --> 01:20:18.208
Yeah, how much money you can put into the strategy, how big your exit's going to be.
1359
01:20:18.789 --> 01:20:21.131
But it's crazy.
1360
01:20:21.151 --> 01:20:22.313
And I know a bunch of people that do it.
1361
01:20:22.777 --> 01:20:23.497
He's at a high level.
1362
01:20:24.358 --> 01:20:27.519
His business model is, I will get you losses, and you will like it.
1363
01:20:28.319 --> 01:20:31.160
Yeah, but he also generated – this is the crazy thing.
1364
01:20:31.560 --> 01:20:34.101
It's actually generating gains the whole time and losses.
1365
01:20:34.121 --> 01:20:35.022
Wow, that's cool.
1366
01:20:35.162 --> 01:20:35.842
It's insane.
1367
01:20:36.002 --> 01:20:36.182
Yeah.
1368
01:20:36.622 --> 01:20:39.323
And there's billions and billions and billions of dollars.
1369
01:20:39.583 --> 01:20:43.885
This is the kind of stuff where I do think – I think it's a little overblown.
1370
01:20:44.605 --> 01:20:48.810
how all the really wealthy people find all these loopholes to save money.
1371
01:20:49.191 --> 01:20:52.775
It exists, but I think it's largely an overblown concept.
1372
01:20:52.795 --> 01:20:53.436
Good for TikTok.
1373
01:20:53.996 --> 01:20:54.217
Yeah.
1374
01:20:54.437 --> 01:20:55.678
This is amazing.
1375
01:20:55.778 --> 01:21:00.003
It's just like, but if you have assets, you can participate in something.
1376
01:21:00.043 --> 01:21:01.705
This isn't limited to billionaires.
1377
01:21:01.905 --> 01:21:04.008
It's not limited to people with nine-figure net worth.
1378
01:21:04.028 --> 01:21:04.348
This is...
1379
01:21:05.149 --> 01:21:05.929
People can do this.
1380
01:21:06.069 --> 01:21:08.990
It's a fund, like a hedge fund type concept you invest in.
1381
01:21:09.010 --> 01:21:09.590
It's incredible.
1382
01:21:09.951 --> 01:21:11.831
I know a number of people that do it and I trust Nick.
1383
01:21:12.171 --> 01:21:17.733
And so I just want to let, I want to more let people know like what's out there.
1384
01:21:17.753 --> 01:21:21.934
So if this event ever comes, maybe you'll remember this like, oh, I should look into these things.
1385
01:21:22.494 --> 01:21:24.035
Let's talk about the trust stuff.
1386
01:21:25.057 --> 01:21:28.219
Okay, I'm only going to go so deep here because a lot of this too will not apply.
1387
01:21:28.239 --> 01:21:34.222
So I'm going to give you some words that if you have any interest, you could go put these in chat GBT and you can Google.
1388
01:21:34.863 --> 01:21:36.543
Top level, you need to get a trust.
1389
01:21:37.144 --> 01:21:38.985
You just need to do the work to set the trust.
1390
01:21:39.005 --> 01:21:40.406
What's going to happen to your assets?
1391
01:21:41.026 --> 01:21:42.787
What happens to your business?
1392
01:21:43.447 --> 01:21:45.348
What happens to your different kinds of assets?
1393
01:21:45.949 --> 01:21:49.871
Putting these things into a trust can protect them from creditors and losses.
1394
01:21:49.951 --> 01:21:52.693
There's lots of advantages depending on how it's set up.
1395
01:21:53.433 --> 01:21:58.078
Like, I'll give you an example that's, you know, not something you normally have to think about.
1396
01:21:58.118 --> 01:22:04.745
What I'm about to say I would hope never happens, but the wealth that we've created will pass on to my boys.
1397
01:22:04.885 --> 01:22:12.193
And I even have my trust set up, and I don't know how this will come across, that if for whatever reason my kids ever got married and divorced, right?
1398
01:22:12.620 --> 01:22:14.483
the other party can never take that money.
1399
01:22:14.884 --> 01:22:16.606
It will always stay with the kids.
1400
01:22:17.147 --> 01:22:19.571
They wouldn't even have to sign prenups and the money's protected.
1401
01:22:20.252 --> 01:22:27.023
And so again, I hope that never happens, but there's so many little things you can do or you can set up whenever something happens to me
1402
01:22:27.824 --> 01:22:32.487
that my kids don't get the money until they're 40, or they don't get the money until they're whatever age you deem.
1403
01:22:32.787 --> 01:22:35.629
But if there's a medical event or education, they can get the money.
1404
01:22:35.649 --> 01:22:46.176
There's so many things you can do inside these trusts that if you have any amount of assets, or maybe you don't have a lot of money, but if something happened to you in the business were sold, it would create assets.
1405
01:22:46.496 --> 01:22:48.077
You want to be thoughtful about what happens.
1406
01:22:48.177 --> 01:22:49.918
And yes, it's going to cost thousands of dollars.
1407
01:22:50.399 --> 01:22:52.360
But in my mind, it's money really well spent.
1408
01:22:52.796 --> 01:22:59.781
Yeah, the biggest thing that kind of hit home from the owners when we did this with them was a lot of them have kids 5, 10, 15 years old.
1409
01:22:59.921 --> 01:23:04.845
They don't want them getting a few hundred thousand dollars when they're 12 years old.
1410
01:23:05.125 --> 01:23:14.352
But with the trust, being that it's like a separate entity, it's like you can determine all sorts of requirements in terms of how they get the money, when they get the money, things they have to do.
1411
01:23:14.372 --> 01:23:16.113
Like, hey, they have to graduate before they get it.
1412
01:23:16.333 --> 01:23:17.954
They have to get a degree, they have to do.
1413
01:23:18.234 --> 01:23:29.518
And so it's a lot more customizable, I feel like, compared to even a will, where it's like, hey, so-and-so gets the money, but there's not as much granularity you can do with a lot of the assets.
1414
01:23:29.578 --> 01:23:33.519
Even things like your 401k or IRA, where's that money gonna go if I get hit by a bus?
1415
01:23:33.919 --> 01:23:43.249
And I think a lot of this is just being a good steward of the business for your employees perspective, but then also a good steward for the family if you have dependents to make sure this stuff is set up.
1416
01:23:43.429 --> 01:23:47.853
And I think for people listening, it's like we're talking about like QSBS and tens of millions of dollars, et cetera.
1417
01:23:47.873 --> 01:23:53.659
But like if you have a million-dollar business and you've got five or ten employees and you have a couple kids, like this is something to think about.
1418
01:23:53.739 --> 01:23:54.360
It still matters to me.
1419
01:23:54.440 --> 01:23:56.322
It doesn't require $20,000 to $30,000.
1420
01:23:56.662 --> 01:24:09.153
$4,000, $5,000, $6,000 from a good attorney can walk you through setting up the trust and set up protections so that you can almost take more risk in a way, I feel like, because you're not always this cloud over your head.
1421
01:24:09.173 --> 01:24:10.834
Like, if I get hit by a bus, everything's gone.
1422
01:24:10.874 --> 01:24:12.015
My kids aren't going to be taken care of.
1423
01:24:12.295 --> 01:24:13.296
What's going to happen to them?
1424
01:24:13.576 --> 01:24:17.780
Obviously, having things like life insurance is helpful because the money can move pretty quick.
1425
01:24:18.180 --> 01:24:21.083
But you don't want your business locked up in probate.
1426
01:24:21.503 --> 01:24:24.784
And I don't think it's talked about enough of how often that happens.
1427
01:24:25.504 --> 01:24:25.885
I agree.
1428
01:24:26.085 --> 01:24:28.225
And I think this is a really, really important one.
1429
01:24:28.245 --> 01:24:30.486
I did this a long time ago.
1430
01:24:30.866 --> 01:24:34.328
Way back, Will, and then I got more advanced and did the trust thing.
1431
01:24:34.848 --> 01:24:36.528
And I've believed in this for a long time.
1432
01:24:36.568 --> 01:24:40.330
And I highly encourage almost everybody to frankly do it.
1433
01:24:40.570 --> 01:24:42.991
If you're a business owner and you think you're going to have any level of success,
1434
01:24:43.891 --> 01:24:46.414
The last two things I'll say are related to trust.
1435
01:24:47.034 --> 01:24:54.862
And I'm just going to kind of give you the acronym and I'll just say a couple words and it will apply to very few people unless you're going to have a sizable event.
1436
01:24:55.242 --> 01:24:59.447
But it's worth hearing it so you know it exists in case that might ever be you.
1437
01:25:00.107 --> 01:25:02.229
And there's a lot more than what I'm about to say.
1438
01:25:02.249 --> 01:25:04.732
But there's the trust like we just talked about it.
1439
01:25:05.092 --> 01:25:07.575
But then there's also ways that you can...
1440
01:25:08.842 --> 01:25:15.485
basically protect a massive amount of money from ever being taxed when you die.
1441
01:25:16.546 --> 01:25:24.169
And so one acronym is SLAT, S-L-A-T. Another acronym is F-L-P.
1442
01:25:26.370 --> 01:25:30.492
So SLAT is Spousal Lifetime...
1443
01:25:34.319 --> 01:25:35.299
Access Trust, maybe?
1444
01:25:35.719 --> 01:25:36.260
I can't remember.
1445
01:25:36.280 --> 01:25:38.560
I think it's like Spousal Lifetime Access Trust.
1446
01:25:38.740 --> 01:25:43.942
FLP is, I believe that one is like Family Limited Partnership or something like that.
1447
01:25:44.182 --> 01:25:46.923
And then there's another one called ILET, which is for insurance.
1448
01:25:46.983 --> 01:25:47.523
And there's more.
1449
01:25:48.103 --> 01:25:55.286
But the idea here is that you can move assets into these trusts, still control them, still live off the assets.
1450
01:25:55.686 --> 01:26:01.708
But that money is locked away that when you die, it'll pass to your kids tax-free and all the appreciation will pass tax-free.
1451
01:26:01.728 --> 01:26:02.068
Okay.
1452
01:26:02.328 --> 01:26:13.716
And where this might become important to you, and I won't say much more than this, is we, right now, my data is going to be wrong, but you'll get the idea.
1453
01:26:13.936 --> 01:26:17.719
Maybe when Obama was president, you could pass like 5 million bucks to your kids tax-free.
1454
01:26:18.499 --> 01:26:19.360
Can't remember the exact number.
1455
01:26:19.400 --> 01:26:20.580
Maybe it was 5 million per spouse.
1456
01:26:20.641 --> 01:26:21.321
Don't remember now.
1457
01:26:22.081 --> 01:26:26.665
And then Trump came into office and he upped it to, I think it was 12 million per spouse.
1458
01:26:26.905 --> 01:26:28.546
So you could pass them, call it 24 million.
1459
01:26:28.786 --> 01:26:29.807
Numbers are slightly off.
1460
01:26:30.760 --> 01:26:39.304
And so you can actually move assets you own into these, we'll use SLAT as an example.
1461
01:26:39.844 --> 01:26:41.485
You can still control those assets.
1462
01:26:42.185 --> 01:26:43.826
You can still live on those assets.
1463
01:26:44.827 --> 01:26:48.068
But when you die, those assets are protected from tax.
1464
01:26:48.448 --> 01:26:55.592
And if you moved $5 million into it and it grew into $40 million, the $40 million would go tax-free to your kids.
1465
01:26:56.795 --> 01:27:05.059
And these are things that I legitimately think are kind of the, when somebody says like, this is stuff rich people can do that just feels like not fair.
1466
01:27:05.079 --> 01:27:05.919
I agree.
1467
01:27:05.979 --> 01:27:11.522
These are the things that feel not, there are a lot of games played in this way, but some of it also comes with some risk.
1468
01:27:11.602 --> 01:27:12.863
You can lose control of things.
1469
01:27:13.303 --> 01:27:20.747
The reason I gave the Obama to Trump example is my general operating belief is the future is more taxes than,
1470
01:27:21.867 --> 01:27:28.273
And more taxes comes in the form of higher rates and then more wealth tax in terms of what we pass on to our kids.
1471
01:27:28.534 --> 01:27:30.435
They'll bring those numbers down further.
1472
01:27:31.617 --> 01:27:37.942
Like that whole SLAT concept, like the setting aside money, that expires at some point in the future and it goes back down to the old limits.
1473
01:27:38.867 --> 01:27:41.269
And so I just want to make you aware of these things.
1474
01:27:41.309 --> 01:27:55.643
If you ever have an event, there's ways that you can push money out of your estate into these other entities that you don't lose control of it, but it will massively impact the amount of money your heirs will inherit.
1475
01:27:56.397 --> 01:28:10.288
Yeah, and I think just to kind of wrap this part up, I think the vast majority of people listening, one thing that I was – as I was thinking about this topic today while I was working out, it was like the biggest tax strategy is building a business that's worth selling in the first place.
1476
01:28:11.329 --> 01:28:17.675
And that's the number one focus because when you look at the number – just the pure data of what percentage of businesses get sold –
1477
01:28:18.415 --> 01:28:30.265
let alone sell for a good multiple and where there is this type of money where trusts are important and slats and FLPs and DAFs and actually all these acronyms, it is because the business was built first.
1478
01:28:30.945 --> 01:28:34.308
And so I think sometimes when people hear this stuff, it's like, I've got to go do a DAF.
1479
01:28:34.448 --> 01:28:35.669
It's like, whoa, whoa, whoa.
1480
01:28:35.949 --> 01:28:39.832
We have 20 grand in the bank and you're growing the business year over year by double.
1481
01:28:40.013 --> 01:28:41.234
Let's just focus on that thing.
1482
01:28:42.194 --> 01:28:46.296
And so I think building the business that's worth selling should be the goal.
1483
01:28:46.536 --> 01:28:50.678
And whether or not you sell it or it becomes more of a passive dividend, you hand it off and let someone else run it.
1484
01:28:51.319 --> 01:28:55.641
Either way, that's the goal for 99.9% of us.
1485
01:28:55.701 --> 01:28:55.941
100%.
1486
01:28:55.961 --> 01:29:02.244
Now, these conversations are dangerous because on one hand, we're introducing new ideas that might get people distracted.
1487
01:29:02.364 --> 01:29:05.466
I'm all about go sell more work, find the people to do the work.
1488
01:29:05.686 --> 01:29:05.846
Yeah.
1489
01:29:07.055 --> 01:29:08.296
Just keep doing that all the time.
1490
01:29:08.736 --> 01:29:10.957
And so these kind of conversations are dangerous.
1491
01:29:11.017 --> 01:29:20.700
But what I do love about these kinds of conversations is if they just kind of get into the back of your mind and one day, if you're so fortunate to find yourself in this position...
1492
01:29:21.636 --> 01:29:27.681
And you just remember any of this, you'll now go no to look, and it could save you a crazy amount of money.
1493
01:29:28.121 --> 01:29:34.406
And it just expands your knowledge base, and it just makes you look at things differently or ask more questions.
1494
01:29:34.646 --> 01:29:36.527
That's why I like this type of a conversation.
1495
01:29:36.887 --> 01:29:37.108
But...
1496
01:29:37.768 --> 01:29:40.270
To your point, Mike, just try not to get too distracted here.
1497
01:29:40.450 --> 01:29:43.832
And look, you can always send us that 1% commission when that happens down the road.
1498
01:29:43.852 --> 01:29:44.352
That's right.
1499
01:29:44.372 --> 01:29:45.093
We'll take the cut.
1500
01:29:45.433 --> 01:29:46.054
That'd be wonderful.
1501
01:29:46.134 --> 01:29:46.594
I'll take it.
1502
01:29:46.994 --> 01:29:56.381
Speaking of distractions, I want to wrap today up talking about something, and that is robotics, AI, the timelines that have been put on these in the past, and even now.
1503
01:29:57.221 --> 01:30:01.484
And really just kind of deciphering between what is legitimate, what should we be thinking about?
1504
01:30:01.785 --> 01:30:05.087
And I think the theme of today is really like, where's your focus?
1505
01:30:05.608 --> 01:30:08.870
What are we actually, are we solving the biggest constraint in the business?
1506
01:30:09.911 --> 01:30:12.653
But really, are we getting distracted with what's going on in social media?
1507
01:30:13.094 --> 01:30:18.038
A lot of times the fear, like we talked about copywriting, is very evident when it comes to the news or social media.
1508
01:30:18.258 --> 01:30:19.559
And that is the thing that gets the clicks.
1509
01:30:19.639 --> 01:30:23.402
It's the thing that we all are seeing in our newsfeed, whether it be about AI or robotics.
1510
01:30:23.842 --> 01:30:25.604
And so I wanted to talk about
1511
01:30:26.844 --> 01:30:29.146
this notion of it being inflated.
1512
01:30:29.346 --> 01:30:30.047
Is it inflated?
1513
01:30:30.287 --> 01:30:35.871
Should it be, what percentage of our mind space should be focused on something that's going to quote, disrupt our business or put us out of business.
1514
01:30:36.331 --> 01:30:43.557
And I think my, my thought from, from wanting to provide audience, my audience value is you've been around for a long time.
1515
01:30:44.017 --> 01:30:45.458
You've seen these things come and go.
1516
01:30:45.859 --> 01:30:49.742
And I think living through a recession or two gives someone a lot more perspective on,
1517
01:30:50.362 --> 01:30:54.225
as well as living through boom and busts and news and hype cycles.
1518
01:30:54.826 --> 01:31:03.373
And so from your perspective, when it comes to AI, I know we talked a little bit about last week in terms of vibe coding, et cetera, but what are you seeing?
1519
01:31:04.194 --> 01:31:09.798
You're also a practitioner of it in the software side of things and also been on boards around things like robotic mowers.
1520
01:31:10.078 --> 01:31:12.560
So give us your perspective in terms of what that looks like.
1521
01:31:13.221 --> 01:31:13.421
Yeah.
1522
01:31:15.563 --> 01:31:16.103
I...
1523
01:31:17.156 --> 01:31:18.776
The short answer is I still don't know.
1524
01:31:19.597 --> 01:31:23.198
I just don't know, but I can give you the way I think about this.
1525
01:31:24.158 --> 01:31:31.040
What I struggle with, like if we were talking about robotic mowers, it's easier for me to just say, this is my belief at this point.
1526
01:31:31.080 --> 01:31:32.020
And I've been so wrong.
1527
01:31:32.360 --> 01:31:33.940
I think you've felt that way maybe too.
1528
01:31:33.960 --> 01:31:40.282
Have you felt like, do you feel, have you been tricked by the speed of robotic mowers or do you feel like you've been pretty correct so far?
1529
01:31:40.322 --> 01:31:44.904
I remember your keynote, SA4.
1530
01:31:45.525 --> 01:31:45.765
Okay.
1531
01:31:45.785 --> 01:31:48.987
That's when I think you were just getting involved with Robin at the time.
1532
01:31:49.367 --> 01:31:50.688
Or maybe they just came out.
1533
01:31:50.708 --> 01:31:51.848
I forget exactly the timeline.
1534
01:31:52.348 --> 01:31:55.050
But I think I left that conference a little freaked out.
1535
01:31:55.270 --> 01:31:57.371
I was like, you know, I'm not going to need to be mowing.
1536
01:31:58.172 --> 01:32:02.494
You know, I only have a five-year window of getting off the mower and focusing just on projects.
1537
01:32:02.794 --> 01:32:07.597
And I think I actually left there thinking I needed to get more into projects because that was going to be harder for the robots to do.
1538
01:32:08.437 --> 01:32:10.138
And so I was wrong there.
1539
01:32:10.558 --> 01:32:15.259
I think going forward, it's very easy to pontificate, you know, where the future is going.
1540
01:32:15.279 --> 01:32:17.040
Now we have self-driving, which is very exciting.
1541
01:32:17.280 --> 01:32:18.460
But I always go back to this.
1542
01:32:18.981 --> 01:32:22.682
And that is, we were told self-driving was right around the corner in 2015.
1543
01:32:22.702 --> 01:32:23.722
This is a great example.
1544
01:32:24.262 --> 01:32:27.483
And it is, if anyone's driven a Tesla, it's good.
1545
01:32:27.903 --> 01:32:33.625
But I also want to ask, like, what percentage of people watching this today are using self-driving?
1546
01:32:33.665 --> 01:32:35.226
We all still have a steering wheel.
1547
01:32:36.116 --> 01:32:40.300
And the vast majority, probably 98% of us are still driving our vehicles.
1548
01:32:41.120 --> 01:32:45.664
And so I have to ask myself, okay, the robotics thing, technically possible, perhaps.
1549
01:32:46.304 --> 01:32:47.525
But then there's legislation.
1550
01:32:47.826 --> 01:32:55.432
And that was a big thing that I think you've really brought up to my perspective like four or five years ago is like, hey, this whole line of sight thing is a problem.
1551
01:32:55.852 --> 01:33:01.537
When you get a big piece of equipment in the backyard, if I have to have an operator standing right next to it, I'm not actually saving any money.
1552
01:33:01.557 --> 01:33:02.678
I'm just reducing risk.
1553
01:33:03.552 --> 01:33:05.674
And for a more expensive piece of equipment.
1554
01:33:05.694 --> 01:33:06.635
Yeah, exactly.
1555
01:33:06.795 --> 01:33:07.656
That breaks more often.
1556
01:33:07.856 --> 01:33:07.957
Yeah.
1557
01:33:07.977 --> 01:33:09.578
And the customer doesn't pay anything more for it.
1558
01:33:09.598 --> 01:33:18.707
If anything, like the whole, you know, electronic, you know, electric revolution when it comes to the green industry proved to all of us, no one's willing to pay anything more for this.
1559
01:33:19.468 --> 01:33:20.549
They just want the service done.
1560
01:33:21.069 --> 01:33:23.830
And so if you're not going to provide extra value, they're not going to pay any more money.
1561
01:33:24.551 --> 01:33:29.654
And so if the customer is not willing to pay more, I'm just going to spend five times more for a mower.
1562
01:33:30.074 --> 01:33:31.074
It's hard to reconcile.
1563
01:33:31.695 --> 01:33:35.277
And so I have kind of back to what we talked about last week around AI is just like,
1564
01:33:35.737 --> 01:33:38.598
It's just like, I will serve the customer and I'll provide value.
1565
01:33:38.938 --> 01:33:40.718
And I'll just keep getting better and better at that.
1566
01:33:41.118 --> 01:33:44.719
And then there'll come a day where maybe the robot makes sense financially.
1567
01:33:44.939 --> 01:33:45.799
It does a better job.
1568
01:33:46.019 --> 01:33:46.979
It produces more value.
1569
01:33:47.059 --> 01:34:00.822
And I will then use the technology instead of being the one out front, blazing the trail, spending gobs of money, like we did with the stinking AI voice thing, where I almost had like this revolt inside of Augusta because I spent, and internally I'm like, this is the future.
1570
01:34:01.102 --> 01:34:01.902
We've got to do this.
1571
01:34:02.022 --> 01:34:04.383
And it probably is, but not in 2023.
1572
01:34:04.403 --> 01:34:04.723
It's just like,
1573
01:34:05.983 --> 01:34:15.451
And so I'm I've almost got that like I'm not going to be the one spending all the money going through all the hurdles, figuring all this out versus if it works.
1574
01:34:15.932 --> 01:34:17.673
I'll just use AI phones, for example.
1575
01:34:18.034 --> 01:34:24.239
If it works and it's going to be revolutionary and save you a bunch of money and your customers are going to love it, you can go buy it next week.
1576
01:34:25.703 --> 01:34:29.765
And if robot mowers are going to come along and they're going to put us on, you can go buy them next week.
1577
01:34:30.505 --> 01:34:38.148
And so that's where it's like, what's the point of getting afraid or buying into this logic that I'm going to revolutionize my business or change everything?
1578
01:34:38.368 --> 01:34:40.989
When I just have to do what's always worked to serve the customer better.
1579
01:34:42.290 --> 01:34:47.072
But you have a much better perspective because you've been inside some of these rooms around robotics.
1580
01:34:47.773 --> 01:34:53.358
Yeah, but I do think that that's a really good perspective and some pretty important information there.
1581
01:34:53.879 --> 01:34:59.624
So let's use robotic mowers to argue for and against how fast AI in general robotics is going to go.
1582
01:35:00.365 --> 01:35:07.051
So my big, and you touched on this, so back whenever, whatever year it was that I gave that talk,
1583
01:35:08.362 --> 01:35:17.509
I had thought, based on what I was seeing, we're probably, you're just guessing, we're probably about five years away before robotic mowers are going to be good enough that they're not going to dominate, but they're going to be a lot of robots.
1584
01:35:17.549 --> 01:35:18.610
We're going to want to be using them.
1585
01:35:19.191 --> 01:35:20.552
It's going to be a competitive advantage.
1586
01:35:21.453 --> 01:35:27.017
And a little bit of that belief was coming from the progress we were seeing in self-driving.
1587
01:35:27.197 --> 01:35:31.521
Not that it was dialed in or perfect, but you were just really seeing these improvements.
1588
01:35:31.621 --> 01:35:36.244
And then I also knew at that time that the robot mowers were going to be moving from...
1589
01:35:37.465 --> 01:35:49.971
just GPS, but they're going to start getting different forms of technology, camera technology, and they were going to, they're going to eventually we're going to have to have the equivalent of the invisible dog fence and such the wire.
1590
01:35:50.251 --> 01:35:53.052
And so I was pretty optimistic on what I was seeing.
1591
01:35:53.072 --> 01:35:56.554
It's like five years from now seems like a very reasonable timeframe.
1592
01:35:56.574 --> 01:35:58.835
And so my general argument was that, um,
1593
01:35:59.829 --> 01:36:06.417
I don't think I would have been arguing you needed to be first, but I do know I was making the argument that you need to start exploring.
1594
01:36:07.058 --> 01:36:14.867
Because what happens is if you deny, deny, and somebody else is doing it, then eventually they've been doing it for like a couple years.
1595
01:36:14.947 --> 01:36:18.371
Then you accept, then you have several years of the testing phase to figure it out.
1596
01:36:19.762 --> 01:36:22.284
And why in robotics, I say, figure it out.
1597
01:36:22.624 --> 01:36:32.991
It's a little different than say the phone scenario is because you've got to really change your business model and your pricing on all these things, like your people model, every, everything changes.
1598
01:36:33.011 --> 01:36:34.231
Your marketing sells.
1599
01:36:34.892 --> 01:36:37.453
Whereas in the phone example, which I think is such a good one.
1600
01:36:37.474 --> 01:36:41.136
So when it comes to so much of this technology, if you just wait, we're going to be able to buy it.
1601
01:36:41.456 --> 01:36:43.978
Somebody else is going to say, I can make a hundred million dollars doing this.
1602
01:36:44.218 --> 01:36:45.919
So they're going to create the most amazing products.
1603
01:36:46.099 --> 01:36:46.439
solution.
1604
01:36:46.459 --> 01:36:48.520
We just buy their solution versus us building it.
1605
01:36:49.060 --> 01:36:51.660
And they'll test it, prove it, and then we can implement it.
1606
01:36:51.940 --> 01:36:55.061
The robotic mower isn't actually just about buying the mower.
1607
01:36:55.721 --> 01:36:58.962
It's about everything that changes around the buying of the mower.
1608
01:36:59.462 --> 01:37:01.583
And so that's where I was arguing.
1609
01:37:01.603 --> 01:37:05.323
It's like, hey, I think this is going to be a thing in five years.
1610
01:37:05.403 --> 01:37:06.164
It's going to be ready.
1611
01:37:06.464 --> 01:37:08.444
So at some point, you need to start testing it.
1612
01:37:09.064 --> 01:37:11.565
So at CityTurf, I feel like
1613
01:37:12.465 --> 01:37:30.213
the chagrin of my business partner, we tested them and fairly quickly realized, oh my gosh, like there's so many, like, yeah, they work in a perfect environment, but as soon as there's a slope or they're by a pond, like a million different factors, it all falls apart.
1614
01:37:31.233 --> 01:37:32.474
Not completely, but it falls apart.
1615
01:37:32.714 --> 01:37:33.414
Okay.
1616
01:37:33.854 --> 01:37:37.175
So that was the idea of why, of kind of what happened.
1617
01:37:37.616 --> 01:37:42.958
Then when I sold Service Autopilot and I was trying to figure out what am I going to do next, I got really interested in robotics.
1618
01:37:43.038 --> 01:37:48.199
I thought I want to do something and I didn't want to do the stuff I was like attracted to.
1619
01:37:48.219 --> 01:37:49.920
Could I do something totally different in life?
1620
01:37:50.540 --> 01:37:52.581
And so I thought it'd be cool to do the robotics thing.
1621
01:37:52.601 --> 01:37:57.103
So I got more involved at that time in the robotics mower thing.
1622
01:37:57.143 --> 01:37:59.804
And so I'm interacting with Husqvarna and other groups and,
1623
01:38:01.160 --> 01:38:07.028
That's when I came to conclude that the adoption, I concluded a couple of things.
1624
01:38:08.089 --> 01:38:13.557
One, on the robotic side, even if the technology is really good,
1625
01:38:15.828 --> 01:38:18.551
how much money will operators really be able to spend?
1626
01:38:18.831 --> 01:38:20.613
Because how are they going to finance these?
1627
01:38:21.274 --> 01:38:25.619
Like, who's going to give an operator $7 million loan on robot mowers?
1628
01:38:25.639 --> 01:38:28.001
Like, almost nobody's going to get that loan.
1629
01:38:29.163 --> 01:38:30.744
So if you are able to get it...
1630
01:38:31.790 --> 01:38:33.872
$100,000 of robot mowers on loan?
1631
01:38:34.132 --> 01:38:34.692
Who cares?
1632
01:38:34.753 --> 01:38:37.855
Like that's like a nothing in your business model.
1633
01:38:37.935 --> 01:38:39.296
And so it's just a distraction.
1634
01:38:40.117 --> 01:38:42.559
So how are people even going to finance this?
1635
01:38:42.739 --> 01:38:45.701
And nobody can predict how long these mowers are going to last.
1636
01:38:45.741 --> 01:38:50.465
They're worried about safety, or not safety, well, safety, but also security.
1637
01:38:50.485 --> 01:38:51.306
Are they going to get stolen?
1638
01:38:51.346 --> 01:38:53.047
So that financing is a mess.
1639
01:38:53.448 --> 01:38:56.070
So until financing gets resolved, this industry can't go.
1640
01:38:57.178 --> 01:39:05.145
And then operators are just not gung-ho about this idea of figuring out entirely new business models and reinventing everything.
1641
01:39:05.185 --> 01:39:07.647
And so there's that up headwind.
1642
01:39:07.967 --> 01:39:16.814
And then there's the headwind of just the technology being really, really good on the right property and a full-on disaster on the wrong property.
1643
01:39:17.195 --> 01:39:19.437
And so again, if it's only going to fit...
1644
01:39:20.077 --> 01:39:25.081
and work at 10 or 15% of your properties, is it then just a big giant distraction in the business?
1645
01:39:25.402 --> 01:39:27.223
So there were all these problems of that sort.
1646
01:39:27.323 --> 01:39:29.105
And the biggest of all is what you said.
1647
01:39:29.945 --> 01:39:32.648
It's the freaking government regulation.
1648
01:39:33.088 --> 01:39:34.529
It's like, it's the craziness.
1649
01:39:34.669 --> 01:39:35.911
Maybe it's crazy or not crazy.
1650
01:39:36.231 --> 01:39:38.233
It's just that it will be too slow.
1651
01:39:38.253 --> 01:39:38.773
Okay.
1652
01:39:38.893 --> 01:39:44.696
So if you got to stand there holding a button, like with a button all the time to hit your button to stop the mower, like I can just put that guy on a mower.
1653
01:39:44.976 --> 01:39:46.597
Like I don't need to do this, play this game.
1654
01:39:46.637 --> 01:39:47.897
And so there's that.
1655
01:39:47.917 --> 01:39:50.278
And that's where I really realized this stuff's going to go slow.
1656
01:39:50.378 --> 01:39:53.700
So those are the things that made me think robotics will go slow.
1657
01:39:54.220 --> 01:40:03.425
Now, the counter argument to that is we had a very small amount of money and the smartest people in the world were all working on other things.
1658
01:40:04.245 --> 01:40:08.371
And that's the difference, I think, in robotics today and in AI today.
1659
01:40:08.431 --> 01:40:13.978
You have all the money going to these two places and the most intelligent people in the world.
1660
01:40:14.379 --> 01:40:17.423
The brightest guys in the world, we're not working on robot motors.
1661
01:40:17.543 --> 01:40:18.844
I'm not putting down anybody in robot motors.
1662
01:40:18.865 --> 01:40:19.145
It's like,
1663
01:40:20.025 --> 01:40:22.927
But all the smartest people are in robot mowers.
1664
01:40:23.467 --> 01:40:28.990
And so, I'm sorry, we're in regular robots like Figma and all these other companies.
1665
01:40:29.050 --> 01:40:31.391
And so, or Tesla or whatever.
1666
01:40:32.051 --> 01:40:32.811
And that's the thing.
1667
01:40:32.831 --> 01:40:37.254
I think you do have to be a little bit careful saying, here's what happened in robot mowers.
1668
01:40:37.274 --> 01:40:38.554
So here's what's going to happen everywhere else.
1669
01:40:38.654 --> 01:40:39.695
I do think it's different.
1670
01:40:40.355 --> 01:40:49.380
It's kind of like when all the money and all the brainpower and all the focus goes in hardcore and something, we've proven in society how fast things can move forward.
1671
01:40:50.200 --> 01:41:00.766
But when we make the argument, when I hear people say, we're going to have humanoid robots in five years, mowing, like...
1672
01:41:02.013 --> 01:41:03.194
I don't even feel like I need to comment.
1673
01:41:03.234 --> 01:41:07.175
Literally, it was quite a big conversation in Augusta.
1674
01:41:07.195 --> 01:41:09.596
So we have like the daily mastermind and we do live Q&A.
1675
01:41:09.616 --> 01:41:11.937
And one of them was like, hey, I'm really concerned.
1676
01:41:12.037 --> 01:41:14.638
I saw Elon's presentation of this humanoid robot.
1677
01:41:15.098 --> 01:41:17.519
And like, I always just have to go back to, it's kind of like QR codes.
1678
01:41:17.700 --> 01:41:19.780
In theory, QR codes sound fantastic.
1679
01:41:19.820 --> 01:41:21.841
Put it in your truck, people are gonna scan it.
1680
01:41:22.201 --> 01:41:23.582
We did that and we tracked it.
1681
01:41:23.622 --> 01:41:30.385
And it was like such a, like I literally think it was less than 10 across Augusta that we saw people scanning QR codes on trucks.
1682
01:41:30.865 --> 01:41:33.406
Makes great in theory, but like no one does it.
1683
01:41:33.466 --> 01:41:47.833
And so like, it's like, look, if you can't get a human or a robot right now to do something like pick up your laundry, like we're not outside yet where there's rain, let alone being transported, let alone being charged, dealing with wind, dealing with people pushing the thing.
1684
01:41:48.253 --> 01:41:51.935
Like none of us even have it pulling our laundry away yet.
1685
01:41:52.692 --> 01:41:55.094
So I truly don't even know what we're talking about.
1686
01:41:55.134 --> 01:42:05.062
I mean, one time on the All In podcast, I heard him say in three years, like what, like, what if you have a kid or a dog or the joke I've heard?
1687
01:42:05.122 --> 01:42:05.482
I did.
1688
01:42:05.642 --> 01:42:09.645
Like, what if people are like, people already think everything's everywhere.
1689
01:42:09.705 --> 01:42:10.586
And we're being spied on.
1690
01:42:10.626 --> 01:42:12.808
I'm sure we are being spied on all the time in every way.
1691
01:42:12.828 --> 01:42:14.389
Now you're going to put the thing in your house.
1692
01:42:14.609 --> 01:42:14.990
Oh, man.
1693
01:42:15.490 --> 01:42:17.051
With sound and vision.
1694
01:42:17.332 --> 01:42:21.435
It was like Gary Vee, like 12 months ago, he going on, I forget whose podcast.
1695
01:42:21.695 --> 01:42:27.880
He's like, I predict in 12 months, we're going to be having 10% of marriages are going to be to robots.
1696
01:42:28.160 --> 01:42:30.102
Your grandkids will marry an AI human.
1697
01:42:31.874 --> 01:42:33.075
What's your conviction level on that?
1698
01:42:33.295 --> 01:42:33.936
A hundred percent.
1699
01:42:34.196 --> 01:42:35.457
What are we saying?
1700
01:42:35.497 --> 01:42:37.499
This makes for such great social media.
1701
01:42:37.519 --> 01:42:38.159
Totally, totally.
1702
01:42:38.179 --> 01:42:38.419
I know.
1703
01:42:38.659 --> 01:42:39.880
That's what we need to do, Jonathan.
1704
01:42:39.920 --> 01:42:40.561
Come on.
1705
01:42:40.601 --> 01:42:41.602
We need to go up with better headlines.
1706
01:42:41.622 --> 01:42:41.802
I know.
1707
01:42:41.842 --> 01:42:43.143
I'd be so much better.
1708
01:42:43.163 --> 01:42:46.105
Yeah, 5 for 50 would be so much better if I just start making up stupid stuff.
1709
01:42:46.185 --> 01:42:46.506
Totally.
1710
01:42:46.526 --> 01:42:48.867
And those people never get criticized, right?
1711
01:42:48.887 --> 01:42:49.468
Like that...
1712
01:42:49.988 --> 01:42:54.329
What you get criticized for is saying the boomer thing, which is like, oh, this isn't going to take over.
1713
01:42:54.629 --> 01:43:00.691
And then having to clip 10 years later of being like the yellow pages or Yahoo and being like, oh, this isn't going away.
1714
01:43:01.031 --> 01:43:02.092
Everyone's so afraid of that.
1715
01:43:02.172 --> 01:43:08.474
So it's just like, let's just err on the side of being completely way too optimistic and completely missing deadlines.
1716
01:43:08.754 --> 01:43:12.955
But it's OK because we're making progress and we're all know directionally that's where it's going.
1717
01:43:13.475 --> 01:43:19.561
And so I can't be wrong if we're headed in that direction, but I can give these random timelines and make stuff up.
1718
01:43:19.641 --> 01:43:21.402
And somehow it's OK.
1719
01:43:21.803 --> 01:43:28.549
But what the reason I have a problem with it is just distract us from what I go back to solve the customer's problem and do it better than anyone else.
1720
01:43:28.869 --> 01:43:30.911
And that always is the fix.
1721
01:43:31.071 --> 01:43:37.497
And the distraction from that core element is the part where I see it as a potential detriment.
1722
01:43:37.952 --> 01:43:41.195
Yeah, I'll sum up my position in this way.
1723
01:43:42.236 --> 01:43:44.038
I am invested in AI.
1724
01:43:44.138 --> 01:43:46.080
I've got investments in open AI and Anthropic.
1725
01:43:46.240 --> 01:43:46.781
I'm invested.
1726
01:43:46.901 --> 01:43:47.482
I believe in it.
1727
01:43:48.643 --> 01:43:50.645
I invested in strong valuations.
1728
01:43:50.705 --> 01:43:54.709
And I believe that was a while back, but they've gotten stronger and I think they're going to keep getting stronger.
1729
01:43:54.749 --> 01:43:57.271
So I'm not of the belief it's all about to end.
1730
01:43:57.291 --> 01:43:57.391
Yeah.
1731
01:43:57.992 --> 01:44:00.113
I believe the robotics thing is going to happen.
1732
01:44:00.153 --> 01:44:01.634
I've had opportunities to invest in robotics.
1733
01:44:02.014 --> 01:44:03.335
I've been a little more leery there.
1734
01:44:03.355 --> 01:44:06.816
I feel like it's going to be a hype cycle here for a while.
1735
01:44:07.297 --> 01:44:11.239
The valuations are really expensive, and I think we're going to just go through some ups and downs.
1736
01:44:11.539 --> 01:44:13.580
That one scares me because I don't know what those timelines are.
1737
01:44:14.400 --> 01:44:15.120
And I don't need to know.
1738
01:44:15.161 --> 01:44:17.562
I don't think it's going to impact me in any...
1739
01:44:17.722 --> 01:44:20.864
It changes absolutely nothing about what I'm doing, how I'm...
1740
01:44:21.104 --> 01:44:22.465
It has no impact on anything.
1741
01:44:22.805 --> 01:44:24.586
One day they're going to show up and we're going to figure it out.
1742
01:44:24.766 --> 01:44:26.307
But I'm not even slightly worried about robots.
1743
01:44:26.567 --> 01:44:27.407
Do I believe they're coming?
1744
01:44:27.628 --> 01:44:29.268
Do I believe they will be everywhere someday?
1745
01:44:29.869 --> 01:44:30.609
Without question.
1746
01:44:30.789 --> 01:44:31.530
I just don't know when.
1747
01:44:32.450 --> 01:44:33.891
And so in the meantime, it's what you said.
1748
01:44:33.911 --> 01:44:34.631
I'm not going to worry about it.
1749
01:44:34.671 --> 01:44:35.652
It has no impact on anything.
1750
01:44:36.292 --> 01:44:39.213
AI does legitimately have a major impact on things.
1751
01:44:39.794 --> 01:44:41.214
But even then, I don't know.
1752
01:44:41.995 --> 01:44:46.457
Back to the E-Lon thing, everything is so overhyped.
1753
01:44:46.477 --> 01:44:49.058
And people are overhyping stuff to raise money.
1754
01:44:49.438 --> 01:44:51.259
People are overhyping things because they're excited.
1755
01:44:51.659 --> 01:44:55.421
But I even think about just simple, benign things.
1756
01:44:55.461 --> 01:44:57.462
Like back to my service autopilot days,
1757
01:44:58.448 --> 01:45:03.669
We would design something, we'd get it, we'd go to code, everything looked great.
1758
01:45:04.450 --> 01:45:06.590
Like this is going to be out in two months.
1759
01:45:07.110 --> 01:45:08.891
Tell everybody, everybody's excited.
1760
01:45:09.411 --> 01:45:11.792
And then the system's running slow.
1761
01:45:11.852 --> 01:45:12.532
Yeah.
1762
01:45:12.612 --> 01:45:14.432
So all the engineers get pulled off.
1763
01:45:14.492 --> 01:45:17.293
I was like, dude, these guys for next 90 days are working on that.
1764
01:45:17.553 --> 01:45:18.914
We're not writing that code anymore.
1765
01:45:19.354 --> 01:45:22.677
And so you just never know what distraction is going to happen.
1766
01:45:22.977 --> 01:45:24.178
That's a bigger fire.
1767
01:45:24.658 --> 01:45:28.621
Or you don't know when you're going to run into problems in the code you were writing or I didn't think of this.
1768
01:45:29.101 --> 01:45:30.562
And so that happens in tech.
1769
01:45:30.582 --> 01:45:35.685
So even guys that are being completely legit and honest, they never know what they're going to bump into.
1770
01:45:35.966 --> 01:45:37.767
This stuff's insanely complicated.
1771
01:45:38.167 --> 01:45:41.990
And so on the AI thing, I'm a firm believer it's going to probably get crazy.
1772
01:45:42.630 --> 01:45:45.952
But is it going to get crazier than it is now in two years, 10 years?
1773
01:45:46.112 --> 01:45:46.432
I don't know.
1774
01:45:46.452 --> 01:45:46.752
Five years?
1775
01:45:46.912 --> 01:45:47.373
I don't know.
1776
01:45:48.193 --> 01:45:56.017
So I don't know if I said it last week or I was talking to somebody, but as an entrepreneur, I'll kind of say what I said before.
1777
01:45:56.237 --> 01:46:03.821
As an entrepreneur, if you want to play this game, then you have to accept that all kinds of stuff is going to get thrown at you.
1778
01:46:03.861 --> 01:46:10.085
And you're going to have to bob and weave and pivot, change directions, try new things, learn new things, grow yourself.
1779
01:46:10.105 --> 01:46:10.725
Yeah.
1780
01:46:10.885 --> 01:46:15.949
It just used to be that you could do a lot less of that over a long period of time, and it's getting compressed.
1781
01:46:16.269 --> 01:46:19.972
And you've got to be willing to, Bob, we've changed, learn faster than you've ever done it.
1782
01:46:20.473 --> 01:46:25.036
And if you can accept that, then all the opportunity is there for you, just like it's always been.
1783
01:46:25.417 --> 01:46:30.020
And it will filter out a whole ton of people that are not willing to play that game, that are going to be scared.
1784
01:46:30.040 --> 01:46:31.361
They're going to say, it's too hard.
1785
01:46:31.621 --> 01:46:32.902
The world's rigged against me.
1786
01:46:33.643 --> 01:46:36.147
billionaires or like whatever the nonsense is.
1787
01:46:37.148 --> 01:46:48.544
But for the people that are willing to learn, pivot, try new things and live in a little bit of a world of uncertainty, I tend to believe if you just keep building and your head down, you're going to be good.
1788
01:46:49.285 --> 01:46:51.847
And so it's just going to be a different world.
1789
01:46:52.247 --> 01:46:54.649
And we were never promised easy ever anyway.
1790
01:46:54.729 --> 01:46:56.851
So I don't worry about the robotics thing.
1791
01:46:57.271 --> 01:46:58.953
I don't really even worry about the AI thing.
1792
01:46:58.973 --> 01:47:04.677
I actually think the AI thing, I worry about AI more in software, but in terms of home services, I see it as opportunity.
1793
01:47:05.337 --> 01:47:08.280
I see it as, we might've talked about this here.
1794
01:47:08.300 --> 01:47:12.243
I know I've said it's like, the future is your labor budget is this big.
1795
01:47:12.363 --> 01:47:17.046
It's not that robots are going to shrink it down to this, but it's like on your P&L, your labor budget's this big.
1796
01:47:18.227 --> 01:47:22.268
and your technology budget's tiny, and the technology budget's going to get bigger and bigger and bigger.
1797
01:47:22.488 --> 01:47:24.668
And labor budget's going to get a little bit smaller.
1798
01:47:24.688 --> 01:47:26.249
Someday when robots come, it'll get way smaller.
1799
01:47:26.609 --> 01:47:27.349
Who knows when that is?
1800
01:47:27.729 --> 01:47:36.151
I almost look at it as like in 2010 to 2015, the companies that now are the biggest were the ones that adopted just getting a website, getting online.
1801
01:47:36.791 --> 01:47:44.512
And I think the same thing with AI is going to happen, which is like the companies that get on board, adopt it, don't think it's something crazy that their nephew's working with.
1802
01:47:44.792 --> 01:47:47.333
They'll be the ones that in 10 years, like they're the biggest companies.
1803
01:47:47.973 --> 01:47:48.914
It's all opportunity.
1804
01:47:49.614 --> 01:47:49.894
Yeah.
1805
01:47:49.954 --> 01:47:50.214
Yeah.
1806
01:47:50.234 --> 01:47:52.796
So I'm very optimistic about this stuff.
1807
01:47:52.996 --> 01:47:58.620
I just, I don't think any, I think people in home services have almost nothing to worry about right now.
1808
01:47:58.780 --> 01:48:01.221
Just everything you said, ditto to that.
1809
01:48:01.241 --> 01:48:02.262
Just do what Mike said.
1810
01:48:02.402 --> 01:48:05.484
And I think you will find yourself in a really good place.
1811
01:48:05.853 --> 01:48:08.114
All right, I have two things to end up the pod.
1812
01:48:08.594 --> 01:48:08.834
Okay.
1813
01:48:09.094 --> 01:48:10.755
One is not necessarily a question.
1814
01:48:11.015 --> 01:48:12.035
The second one is a question.
1815
01:48:12.356 --> 01:48:14.576
So the first one is more commiserating.
1816
01:48:14.797 --> 01:48:17.498
It is me sharing my biggest problem right now.
1817
01:48:17.978 --> 01:48:18.278
Okay.
1818
01:48:18.718 --> 01:48:25.321
And it's, so in HomeWorks, we're switching everything from PHP code over to React.
1819
01:48:25.961 --> 01:48:30.663
And it has been the bane of my existence because we're trying to...
1820
01:48:31.263 --> 01:48:31.783
Refactoring.
1821
01:48:31.803 --> 01:48:31.983
Yeah.
1822
01:48:32.003 --> 01:48:32.164
Yeah.
1823
01:48:32.204 --> 01:48:36.645
We've done it in piece by piece, but the core part that's still left is events.
1824
01:48:37.506 --> 01:48:38.446
Everything to do with.
1825
01:48:38.466 --> 01:48:41.367
Are you calling automations events like triggers and events or what is it?
1826
01:48:41.407 --> 01:48:46.310
Not the triggers, not the triggers, but the actual like recurring schedules is the biggest one.
1827
01:48:46.430 --> 01:48:47.590
Oh yeah.
1828
01:48:47.830 --> 01:48:48.050
Okay.
1829
01:48:48.090 --> 01:48:48.270
Okay.
1830
01:48:48.290 --> 01:48:48.490
Yeah.
1831
01:48:48.611 --> 01:48:51.112
It's so stuff that you can break everything.
1832
01:48:51.452 --> 01:48:52.452
It's so painful.
1833
01:48:52.472 --> 01:48:55.974
Cause it's so frustrating to explain.
1834
01:48:56.394 --> 01:48:58.415
Like this is the part where I feel so much more.
1835
01:48:59.335 --> 01:49:04.638
I feel everything I saw you go through and you just like, I'm just not going to explain this tech, the back end.
1836
01:49:04.738 --> 01:49:06.739
I'm just trying to try to make this as surface as possible.
1837
01:49:07.039 --> 01:49:11.861
It's so hard to explain to people when it's like I we've done a bunch of stuff like the customer report we broke off.
1838
01:49:11.901 --> 01:49:13.922
Then like the billing, we made sure that was solid.
1839
01:49:13.942 --> 01:49:15.703
We made sure just like all these parts.
1840
01:49:16.004 --> 01:49:18.165
But events is kind of kind of fundamental.
1841
01:49:18.445 --> 01:49:22.307
Like if you change a recurring visit and it's something disappears, that's a big problem.
1842
01:49:23.067 --> 01:49:24.049
And so you can't unwind.
1843
01:49:24.329 --> 01:49:25.851
It's such a rat's nest.
1844
01:49:25.971 --> 01:49:28.195
And then in one way, it's like, hey, we should go guns a blazing.
1845
01:49:28.435 --> 01:49:32.401
Guns a blazing still is going to take six weeks and it's going to be an absolute mess.
1846
01:49:32.781 --> 01:49:35.044
And I can't do that in the middle of the year or any time of the year.
1847
01:49:35.605 --> 01:49:36.727
And so that's my current.
1848
01:49:37.977 --> 01:49:40.961
Biggest problem is how do we slowly pull this thing apart?
1849
01:49:40.981 --> 01:49:46.547
The last part of the rat's nest, which is events, which is fundamentally why you have a CRM.
1850
01:49:46.968 --> 01:49:47.789
You can't mess it up.
1851
01:49:48.129 --> 01:49:51.894
But it's basically the downstream part of 80% to 90% of the, quote, issues.
1852
01:49:52.415 --> 01:49:54.217
And so, yeah, that's me commiserating.
1853
01:49:54.868 --> 01:49:55.889
Boy, do I understand.
1854
01:49:56.009 --> 01:49:59.973
Billing was that for us as well, because our billing was so, it was quite advanced.
1855
01:49:59.993 --> 01:50:03.757
Like you could bill weekly versus biweekly versus daily charge.
1856
01:50:03.937 --> 01:50:05.659
There was a lot going, prepayments.
1857
01:50:05.679 --> 01:50:09.923
I don't even know if you have to or need to deal with this stuff because we started so early.
1858
01:50:10.283 --> 01:50:16.349
You had the whole prepayment thing, you had deposits, you had like invoices where work was being worked down against the prepayment.
1859
01:50:16.409 --> 01:50:17.370
Have you had to do any of that?
1860
01:50:17.410 --> 01:50:18.591
Is there a demand for that these days?
1861
01:50:18.672 --> 01:50:18.972
Yeah.
1862
01:50:18.992 --> 01:50:19.132
So we,
1863
01:50:19.212 --> 01:50:22.653
We have like deposit thresholds, for example, but Stripe was able to bake that all in.
1864
01:50:22.673 --> 01:50:33.758
So the first thing we touched was billing because we could go to their new API and they basically have really allowed us to like pay in full deposit thresholds, a lot of stuff that they now baked in.
1865
01:50:34.210 --> 01:50:34.871
I forgot about that.
1866
01:50:34.891 --> 01:50:35.991
There was no Stripe when we built.
1867
01:50:36.012 --> 01:50:39.614
We literally wrote every line of code for all the billing and stuff.
1868
01:50:39.955 --> 01:50:41.236
So there was no Stripe back then.
1869
01:50:41.856 --> 01:50:43.157
And so...
1870
01:50:43.217 --> 01:50:46.900
When we went through BlogCal, it was like, what's the worst part that we have to address?
1871
01:50:46.960 --> 01:50:50.543
And we were like, billing is one of those things you can't mess up because it affects the customer.
1872
01:50:50.863 --> 01:50:54.246
And it also becomes a huge liability to the business, right?
1873
01:50:54.266 --> 01:50:54.426
Yeah.
1874
01:50:55.307 --> 01:50:55.507
Yeah.
1875
01:50:56.207 --> 01:50:58.669
Boy, I feel your pain.
1876
01:50:59.609 --> 01:51:00.530
All right.
1877
01:51:00.650 --> 01:51:01.570
Last question then.
1878
01:51:02.050 --> 01:51:03.691
Everyone wants to know that.
1879
01:51:04.111 --> 01:51:04.392
Okay.
1880
01:51:04.592 --> 01:51:07.713
So you mentioned, Elon, you mentioned hype.
1881
01:51:08.434 --> 01:51:11.595
The question is, are you going to be buying into the SpaceX IPO?
1882
01:51:11.715 --> 01:51:12.456
All right.
1883
01:51:12.856 --> 01:51:13.676
That's all we needed to know.
1884
01:51:13.956 --> 01:51:15.357
I'm on the same page.
1885
01:51:15.397 --> 01:51:16.518
I just feel like it's too hyped.
1886
01:51:16.878 --> 01:51:22.300
The way that the structure is with the, the way that the equity structure is just a little off to me.
1887
01:51:22.821 --> 01:51:23.061
So,
1888
01:51:23.581 --> 01:51:25.583
And the valuation is already going to be so rich.
1889
01:51:25.843 --> 01:51:26.483
There's so many...
1890
01:51:26.583 --> 01:51:28.185
I mean, it's not easy to double your money.
1891
01:51:28.765 --> 01:51:30.606
But there's so many ways to double money.
1892
01:51:31.207 --> 01:51:32.528
But to double your money there...
1893
01:51:32.588 --> 01:51:35.230
I mean, there's... Was it going to come out at a half a trillion?
1894
01:51:35.270 --> 01:51:36.291
One and a half trillion?
1895
01:51:36.371 --> 01:51:37.552
What's it going to IPO at?
1896
01:51:37.732 --> 01:51:38.292
Yeah, yeah.
1897
01:51:38.392 --> 01:51:39.673
And so then to go from there...
1898
01:51:39.913 --> 01:51:44.817
It's not that the company can't become more $10 trillion, but that's really hard for me to get my head around.
1899
01:51:45.197 --> 01:51:49.000
But even if it just goes to $4 trillion, it's only going to be a double.
1900
01:51:49.200 --> 01:51:52.543
There's a lot of places that I'm more...
1901
01:51:54.327 --> 01:51:58.450
But anytime I say crap, like stuff like this, like I'm always wrong.
1902
01:51:58.750 --> 01:52:00.251
I can't even believe what happened with Tesla.
1903
01:52:00.271 --> 01:52:02.633
When it hits 4 trillion, we'll be able to clip this.
1904
01:52:03.033 --> 01:52:04.034
It'll be awesome.
1905
01:52:04.574 --> 01:52:08.137
But now it feels, we, we, we talked about this.
1906
01:52:08.177 --> 01:52:09.738
I think it's unfortunate.
1907
01:52:09.758 --> 01:52:12.279
The markets, I think Google went at like 80 billion.
1908
01:52:12.460 --> 01:52:13.941
I think we talked about this.
1909
01:52:13.981 --> 01:52:16.022
Like when an IPO and I can't remember what the number was.
1910
01:52:16.382 --> 01:52:17.223
Maybe it was a lot more than that.
1911
01:52:17.263 --> 01:52:18.464
Maybe it was Microsoft that did that.
1912
01:52:18.984 --> 01:52:26.650
But it used to be that these companies IPO'd so early, you could get in and then still just become insanely wealthy off these stocks.
1913
01:52:27.371 --> 01:52:37.099
And so a lot of people think when they hear, oh, it's going to IPO, and they don't really understand valuations and market caps and all this, they just think about all the stories they've heard of.
1914
01:52:37.119 --> 01:52:38.180
Had I bought Amazon early?
1915
01:52:38.200 --> 01:52:39.321
Had I bought Microsoft early?
1916
01:52:39.621 --> 01:52:40.962
We don't live in that world anymore.
1917
01:52:41.102 --> 01:52:47.388
All the private equity guys and all the insiders, they got the bulk of all the growth and they made bulk of all the money
1918
01:52:48.434 --> 01:52:55.238
And so from the moment it goes public until whatever matures into, it's not like an old Microsoft or Amazon story.
1919
01:52:55.278 --> 01:52:56.519
And people don't understand that.
1920
01:52:56.539 --> 01:53:00.762
And so they don't understand that they're investing at a very, very different point.
1921
01:53:00.982 --> 01:53:13.589
Well, even like recently on Google's earnings, they came out with their earnings, but like almost, there's actually more than half of it was just paper gains from SpaceX, Anthropic, Stripe, and all their private investments.
1922
01:53:14.150 --> 01:53:16.751
And so when those companies IPO, it'll be Google.
1923
01:53:16.771 --> 01:53:17.092
Yeah.
1924
01:53:18.032 --> 01:53:20.473
Yeah, because they're a massive investor, aren't they, in SpaceX?
1925
01:53:20.493 --> 01:53:21.033
Yeah, huge.
1926
01:53:21.193 --> 01:53:21.393
Yeah.
1927
01:53:21.733 --> 01:53:21.933
Yeah.
1928
01:53:22.453 --> 01:53:23.873
So, no, I'm staying away from it.
1929
01:53:24.654 --> 01:53:30.195
I am a pretty – I mean, I make some bets, but I'm a pretty simple investor today.
1930
01:53:30.495 --> 01:53:31.775
I really believe in this idea.
1931
01:53:31.835 --> 01:53:33.156
You make your money in business.
1932
01:53:33.316 --> 01:53:36.957
You've been given this ability and gift in life to go build things.
1933
01:53:37.237 --> 01:53:38.377
You make your money in business.
1934
01:53:38.677 --> 01:53:41.418
You grow it through your investments, but you do it –
1935
01:53:42.038 --> 01:53:42.759
in a careful way.
1936
01:53:42.779 --> 01:53:45.201
You don't swing for the fences in your investments.
1937
01:53:45.561 --> 01:53:48.583
You more swing for the fences in your business is how I think about it.
1938
01:53:49.404 --> 01:53:50.525
That's my operating philosophy.
1939
01:53:50.545 --> 01:53:52.646
So I'm heavy equities.
1940
01:53:52.847 --> 01:53:56.289
So some people might still see that as a lot of risk.
1941
01:53:56.790 --> 01:53:59.392
But I am kind of careful about how I do a
1942
01:54:02.494 --> 01:54:04.295
Yeah, no, that's fantastic.
1943
01:54:04.315 --> 01:54:10.259
Well, we'll go ahead and wrap it up until we hear from a better comment of a better name for Jonathan.
1944
01:54:10.319 --> 01:54:11.760
It's going to be Sultan of Service.
1945
01:54:12.380 --> 01:54:13.801
But we're open to ideas.
1946
01:54:13.941 --> 01:54:14.581
We're open to ideas.
1947
01:54:14.601 --> 01:54:15.362
So comment below.
1948
01:54:15.882 --> 01:54:17.783
And I'm open to ideas too for myself.
1949
01:54:17.863 --> 01:54:18.744
I don't know what it would be.
1950
01:54:18.764 --> 01:54:20.805
Yeah, you've started something here.
1951
01:54:20.825 --> 01:54:21.906
I'm gonna have to think about this now.
1952
01:54:21.926 --> 01:54:22.926
I didn't know you were gonna do this.
1953
01:54:23.547 --> 01:54:24.167
Down in the comments.
1954
01:54:24.187 --> 01:54:25.007
I'm sure they'll let us know.
1955
01:54:25.027 --> 01:54:26.308
Appreciate you coming on, Jonathan.
1956
01:54:26.989 --> 01:54:27.389
Likewise.
1957
01:54:27.809 --> 01:54:28.029
Cool.
1958
01:54:28.249 --> 01:54:28.670
See you later.
1959
01:54:28.910 --> 01:54:29.250
See you later.
