Episode Transcript
[00:00:02] Speaker A: Welcome to Intentional growth, a show that teaches you as a business owner and entrepreneur, to view and run your company like a financial asset, which will allow you to enjoy work, create wealth and make an impact. This mindset will help you focus on building a more valuable business and give you the choices to grow, acquire, reinvest or exit. Live the life you plan for all with intention.
And now, here's your host, Ryan Tansom.
[00:00:32] Speaker B: How's it going, everybody?
[00:00:33] Speaker C: Welcome back.
[00:00:34] Speaker B: Thanks for tuning in. I hope you're enjoying the holidays and are taking a little bit of time off. I have a very fun conversation in store for everybody. I have a successful entrepreneur, Rob Green, on the podcast. He's also the host of the podcast I'm the one. Rob has successfully launched 17 brands online as well as sold multiple ecommerce companies. And Rob is going to be on the show explaining and sharing his journey of leaving corporate America in corporate sales, getting into e commerce back when it was fresh. And his journey, what I find fascinating is his journey, I think does a very good job of reflecting the evolution of e commerce as well, where a lot of times people started in product arbitrage, built out, then white label brands, and then got into manufacturing. And Rob's going to explain how focusing on operational efficiencies, logistics and building a real business is the name of the game. And I think this is more applicable than ever now that the free money is gone, the pandemic era is gone, and people need to build real companies. So I'm watching manufacturing companies obviously get into the online space as well as online companies like Rob is talking about getting into the manufacturing and brand building. And Rob is going to dive deep into the nuances of how he's done that. But what I also find fascinating is Rob and I get onto a whole conversation, but what's the goal? Why are we doing this as entrepreneurs? And how do we build the business and build the value and the cash from the lifestyle that satisfies the needs for us as an individual. So there's a lot of meat on this bone for this conversation. I know you're going to enjoy it. If there's one thing that you can do to prep yourself for next year for 2024, is go check out the intentional growth starter kit where you can dive into a few videos about what intentional growth is, a video on each of the five principles, as well as a case study where I project out the valuation of a company. So you can start to see in your numbers what should your forecast look like and how can you get where you want to go to get the income and the equity growth that satisfies your needs. So go check out the starter kit. The link is in the show notes below. Thanks everybody for tuning in and I hope you enjoyed this conversation with Rob Green.
[00:02:37] Speaker A: This episode is brought to you by Arcona's fractional CFO services. Arcona's fractional cfos integrate into your management team and assume the responsibility of the CFO. They become your strategic financial partner to help you run the business, create your value growth plan, and build the financial roadmap to the valuation you want to achieve.
[00:02:59] Speaker B: Rob, how are you, man?
[00:03:01] Speaker C: I'm doing great. Pleasure to be on here. I'm excited to talk about. I think we have a lot of stuff in common to talk about.
[00:03:05] Speaker B: I know the one thing we don't have in common is you're the smarter person that got the hell out of Minnesota a lot sooner than I'm sitting here at single digit temperature, and you're in Phoenix, so the listeners can judge on who's the smarter one of the two. But yeah, you grew up here in Minnesota. So let's take us you. How did you get into the online space? You said you went to college in Arizona and you stayed. So was it kind of a winding road to entrepreneurship, or did you kind of always think that you were going to somehow do something on your own? How'd you get into it?
[00:03:38] Speaker C: Yeah, I'm a little older than you. I'm 48. So back when I first online wasn't an option, really. When I was getting out of high school, it was just getting started. Right. I wasn't smart enough, like Bezos, to go do, sell books online and go to Seattle, but I didn't know what I want to do, but I knew I didn't really like working for other people. But I still went the traditional route, went to college, undergrad, grad school, worked for a bunch of big companies. And each one, I hoped it was going to get better, but I found, like most people do, there was just more bureaucratic, right. It never really changed. It's just more bureaucracy. And then I found an opportunity where I started doing sales for a big medical company. And I had a customer that was just doing online drop shipping. And I said, wait a minute, wait a minute. Where's your warehouse? We don't have one. And I said, well, walk me through this. And he's like, well, we just drop ship from here and here we buy your products. You guys manufacture through here, and we drop ship it. And I was like, awesome. I'm your new rep. I'll help you out. Walk to the parking lot. Call my budy. I said, I'm starting a business today. You want to start this together with me? And we went to grad school together. He didn't really believe it. We started. So it started back in 2010, just kind of learning.
[00:04:44] Speaker B: Go ahead. Why was the fact that they didn't have it a warehouse? What led you to knowing that that was a big deal, and that was an opportunity?
[00:04:54] Speaker C: I knew enough about logistics that I didn't want to do logistics, or at least at that time, I didn't want to do it. And so what they were effectively doing was just sales and marketing. I'm a sales guy. I love sales and marketing. And it was numbers, it was finance. I don't have a tech background, but I'm like, you know what? I'll figure this out. It can't be that hard, right? So I'd read four hour work week with Tim Ferriss. Most of us have, and I can outsource this stuff. So that was the trigger for me. I'm like, all right, this is a sales and marketing opportunity. I can solve this problem, right? Let's figure this out. So, dove in, tried to learn as much as I could, bought online courses, went through all that stuff, and just started doing drop shipping. Built out a site, had a guy in, uh, I don't know if it was Pakistan at the time. I think build out a WordPress before.
[00:05:39] Speaker B: Shopify and everything like that came out, right.
[00:05:42] Speaker C: It was actually called volusion was the platform back then, before Shopify, and it was just, I had a guy build a site, and I self taught adwords, learned how to do the marketing side of things, how to build out a site in the back end. By no means was it. It'd be embarrassing for what it was. Today's out there. You can make a website in about three, four minutes. Nowadays, especially with, I told you I.
[00:06:03] Speaker B: Sold copiers, dude, everything's relative.
When you were doing, how did you got your college budy that you said you started with? What was the setup? Because I always find it as we continue to go down this timeline, Rob, because I've had multiple partners throughout my entrepreneur journey. And what was the idea? What was the goal when you guys sat down? Was it like, income? Was it like, products sold, and how were you guys dividing and conquering duties and responsibilities or capital? How'd you see the whole thing?
[00:06:40] Speaker C: Yeah, I didn't know much back then, to be honest with you. I always feel like every six months, I look back and go, man, I didn't know anything six months ago, so it's really hard to remember how little I knew 13 years ago. But the reality was he's a smart guy. We went to grad school, got our mbas together, too. Similar, to be honest with you. We had a lot of the similar, but that's why we got along so well. So we weren't complementary business partners, which is not what I would recommend to people. It's better to have two people with different skill sets. But we got along really well, and so it was easy for us to do it. And the goal at that time was, how do we make additional money outside of this side hustle now called.
[00:07:14] Speaker B: Right, okay, there was side hustle. Got it.
[00:07:17] Speaker C: Our day job. But make enough then so I can quit my day job. I had two kids at the time, wife. How do I make enough to get rid of my day job and then pursue entrepreneurism full speed ahead? That was the whole goal of what it was. That's how it all started. And it was burning the midnight candle and giving up sleep a little bit and doing the side hustle stuff to try to figure it out because especially back then, the amount of information available wasn't as readily available as it is today. But just figuring it out, I believe if somebody else has done it, I'm a smart guy. I'm capable. If I figure out the right people and the right know how to do it, I'm going to figure it out. It just feels inevitable to me.
[00:07:58] Speaker B: What did you guys start drop shipping medical supplies. Okay, so you guys stuck in the industry that you guys were in, didn't your employers know it at all?
[00:08:08] Speaker C: We don't talk about that a whole lot, Ryan, so we don't really mention that much. But he was in the space.
He. That was the advantage also is that he knew that a different part of the space. So it was a really good combination to be able to do. Then, you know, we did that for a little while. Big realization. Easy realization was, they're not our products. We can't change the product. We're just selling somebody else's product. Similar to copiers. You weren't the manufacturer. I don't think of the copier. Right. So I can't make it. I can't change it or make it better. And eventually you're going to get a race to the bottom or you're going to get compressed because I'm selling against the other guy who's selling the same widget. It's just a marketing game at that point. So how do I create my own products? Bought an online course, 2014, learned about private labeling.
I went through the course, I booked a trip to China and I'm like, I've never been to China. I'm going to this Canton fair everybody talks about. It's eleven 12 million sqft. I'm going to go. I'm going to figure it out. I told a few friends, I ended up, three friends came with and I was like, wait a minute, I'm not running a tour, guys. I barely know anything here. I'm going to Guangzhou. And they came with, we did it. They all started brands and one of them became my business partner later on. But that's really how I got into creating my own brands and creating my own products, which was immediately way better. So I got up drop shipping, started creating brands, coming up with concepts, finding penetrability online of what has demand. But maybe we can make a better product. And that's really been the journey the last eight years, is creating products and brands and then selling those online. Amazon, Walmart, Shopify. Now TikTok Shops has got a big focus of us. For us the last few weeks, whatever the platform might be, we haven't done retail yet. We might do retail in the future. I've got a lot of friends that have done retail and been burned from a cash flow perspective and or not getting paid on the AR side. So that's something I think we'll learn as we go down this path a little bit further.
[00:10:11] Speaker B: I'd love to impact a lot of this because let's give the listeners a little bit a deeper understanding. So you've gone through 17 brands. I believe it is.
Let's unpack, because on the show, Rob, I've had multiple facets of online ecommerce. So some people are doing the stores, some people then get into, actually the manufacturing and the white labeling. And I've watched over the years where people start with, they understand how to sell stuff on Amazon or Walmart or Shopify, and then they're like, okay, I then need to build out a white labeled brand and then I need to maybe manufacture and then maybe I'm now in three PL. And so there's kind of this natural breadcrumb trail. So how did your journey unfold as far as your realization of where you've ended up?
[00:10:59] Speaker C: The big advantage coming from drop shipping was I knew I didn't want to be just a reseller. I didn't want to play the arbitrage game. I didn't want to drop ship or wholesale anybody else's products. I knew day one I wanted to create my own brands. I call it white labeling, private labeling. I would say a little bit more Oem, where we tried to make a better product. So whether that's a mold for a glass product, I had a few designs that I had come up with that I should have patented at the time, but I didn't know enough to do that. But just how do I functionally make a better product? Right? How do I make a better product functionally? But knowing that the demand is there, that's the big advantage. In the last 15 years, I think most businesses fail, is because someone comes with an idea, but they don't know if there's enough demand. Then they spend all this time and energy making a product, and they go, oh, crap. No one else wanted to buy this product except me. Oh, and by the way, I realized it's going to be $50 to make it, but I got to sell it for 40 because that's where the market dynamic is. I can't make any money on this. I've talked to so many people over the years.
[00:12:03] Speaker B: Amen.
[00:12:04] Speaker C: I'm working on this jelly for the last three years, and we source it here and this whole story, and I'm like, but you can't make money on it, ever. The economics don't work. Yeah, but some. I was like, I can't help you.
[00:12:19] Speaker B: Almost silent. Sound like an artist sometimes where it's like, yeah, it's like, look at this beautiful painting. No one wants it, even though it's beautiful.
I love how you started. It makes a ton of sense, the context of starting in medical sales, where you're understanding sales and marketing.
So how did you start figuring out which products or services you want to go into?
[00:12:43] Speaker C: Yeah, so there were some chrome extensions. I think jungle scout was the first one back then, way back when, that allowed you to kind of look at. And I love the details. Right. I love that we're going to get into this, because, just to warn you, I could talk about this stuff for, like, two days straight, probably.
[00:12:59] Speaker B: I want to pause you, Rob, too, because that's why I think a lot of people listen to this show, is because the details matter. And it's none of the get rich quick crap, essentially, I always say, I like to joke around. I like to teach hard work, and then, therefore, after you get to learn it, then you have to do hard work, and the reward is huge.
And I know we're going to get into this after you unpack some of the details, but I think the last four years have just blinded people with how freaking easy it is. Free money and all this shit that was going on of the online space, I think distorted what the practical viability of this stuff is. And which is why I think your story is so fascinating, because you came from it, from the dropship side, not from the arbitrage side. Arbitrage is just taking advantage of SEO and different optimization on a website. But I like to say it like this, Rob, because when I got exposed to this space, like seven years ago, I got hired to do a keynote in the online space. And I came home and I was talking to my budies, because, again, I sold copiers. Right? It's real stuff. I had millions of dollars inventory. I'm like, these aren't even businesses. It's people in basements with freelancers.
You started from what I'm gathering, started from the business side. Like, there was something there that cash flowed and you were building a business. Yeah. Walk us through. How did you determine what products and services had a viable market opportunity?
[00:14:22] Speaker C: Well, I'll go back. I want to double click into what you said about these people. And then the business side of I had bought this online course, and with it came an event, a live event. So I went to the event in Las Vegas.
My head, I'm thinking, it's going to be a bunch of people like you and I. Before I go, I'm like, okay. It was like a $3,500 course. It's still around. They just reiterate it every year. And I'm like, okay, it's going to be guys like you and I. And I'm like, okay, I got an MBA. I've got an online business that's successful. It's doing a couple of million dollars a year in revenue.
I'm successful. I know what I'm doing. This is going to be awesome. Meet a bunch of great people, and I show up and there's people who have never sold me online. They don't know how to create an email account. I go to a dinner with like 15 people. One guy goes, hey, listen, I shouldn't share my idea with you guys, but I'm going to do it. I'm going to sell clothing, hangers. And I was like, what am I doing here? What are you talking about? He's like, yeah, but I don't want to go big. I'm going to order a 50 pack from China. And I was like, dude, what are you talking about? This is crazy. And so I was just blown away at how it got. This is again 2014, 2015. How many people got sucked into the easy button they wanted to push to make money. Right. I want to live on the beach and have an online business. That was the beginning of it back then.
[00:15:36] Speaker B: Kind of reminds me of when the flipping of the houses and all that stuff in 2005 and six and stuff. Yeah.
[00:15:41] Speaker C: And not that you can't do it, and not that it won't be successful. I have a ton of friends that have been successful, but that group of people came from a huge number of people who didn't either take action or didn't have any success after they took action, and then they gave.
It's like it starts with this massive funnel. And I think this is something most people should be, especially first time entrepreneurs should be aware of. Is that what you see is survivorship bias? You see the people that have already won. Right. I say all the time. I'm like, listen, some people are like, oh, I could have started Facebook. I'm like, no, you're not. You're not Mark Zuckerberg. He's way smarter than you are. You don't see the other thousand guys who try to social network who didn't work. Right. And I think that's the same thing.
People misperceive it to be easier, I think, than the reality is it's always an overnight success ten years in the making. But back to your question about how to assess it. I use a chrome extension to understand demand, which is where most people fail. Don't make a product that doesn't have demand. If you don't have demand, you now have to educate people, or you have to build the demand, which is far harder than already finding demand. So I was able to assess demand. I didn't have a dog at the time. I created a dog product. So the first product I created was a dog booster seat for small dogs.
I love it.
[00:17:01] Speaker B: Tell me to pull the thread. I want to pull the thread. How did you land on that?
[00:17:05] Speaker C: I was like, all right, I want to go with something that there's an inferior product in the market, has good margin, and we can make an improvement. And I ordered the dog booster seats on Amazon, and most of them were, like, made out of cardboard, and so it would have a nylon and then have cardboard in the side and a dog booster seat for everybody that's never bought one. It has a strap around the headrest of the front seat. It boosts your dog up so your little dog, under 20 pounds, can look out the window, and you could put a harness and strap them in again. Ryan, I didn't own a dog, but I love dogs. I had a dog as a kid and I'm like, all right, I got the products from China and I'm like, this thing's crap. You put like a ten pound weight in it and it bends. So found one that was nice, reverse engineered. It had a metal frame that folded down, and we improved the fleece on the inside, improved the nylon on the outside so it was waterproof. Found a supplier in Guangzhou, went and visited them. When I went to my first trip and I was like, all right, we're going to do this. I think we sold 40 dog booster seats a day for five years before I sold the brand. I mean, it's every day, 40 a day.
[00:18:18] Speaker B: What was the price?
[00:18:19] Speaker C: 40 a day on those $40.
[00:18:22] Speaker B: I want to go back. So what was the market demand? So how did you find, was it that chrome extension where you found like, okay, because were there other products that you were choosing between, because you're placing bet is what you're doing, you're saying, okay, well, there's this much demand, and then you were able to pick out which one.
[00:18:40] Speaker C: Exactly. So there's a lot of factors in determining where the demand is. I call it, for lack of a better word, penetrability. Can I penetrate this market and can I display somebody else? Because there's a pie. And that pie is either growing from a demand perspective or shrinking depending on the product and the category. But I still need to display somebody to take a piece of that pie because it's still digital real estate. There's only so many places, like you.
[00:19:04] Speaker B: Said, you don't want to create the demand. So again, that goes, create the demand.
[00:19:08] Speaker C: And so the idea was, where can we position ourselves? We're going to be a premium product, and we could have gone the $15 route, made a crappy product, but we want to make a premium product with enough margin to support the environment and the advertising environment at the time. And so that was the thought process of going in and doing that. The other thing that I was fortunate enough to have enough money to just order a container. Like, I didn't order 100, I ordered, I think it was 2000 units in a 20 foot container. So I ordered first order a full container. So that's about $20,000. I had no idea how freight forwarding worked or how to ship. I just ordered it.
I didn't know what fbo or any terms, I didn't know what inco terms were. I didn't know any of that stuff. And I was like, listen, placed my order, I sent the PI, sent the money, and I was like, now I have to figure this stuff out, right? And so then I just started figuring it out. I met a guy at the show, the event I went to, he'd been to China 50 times. He didn't understand sales and marketing. He and I went to China together, and he kind of helped me introduce that. I helped him do his listings, help him understand how PPC worked. And then I ended up buying his brand actually, like eight months later from him because he just wasn't his thing. So that's kind of how I got started in the space. And by the way, I'd love to talk about some of the failures, because I think that's where most people learn.
The ones that win are great, but the lessons from the failures or the ones that weren't great are really the lessons I keep.
[00:20:40] Speaker B: Well, we can go right into that. But a couple of comments, though, rob, which, again, I think it's so fascinating, and I don't know if it's, again, therapeutic for me, because I'm watching the convergence of reality, of actual businesses and the business models of e commerce and all that stuff start to finally converge a little bit of context. Rob is my wife was a product manager for medical device. Then she went into, that's what she did right out of college, and then she went into safety products. So she was the head product manager of a pillar doing, I think, 20 million or something like that. But it was like high visibility stuff, dude, like the vests and the knee pads and all this stuff. But that business started in making shit first. And I watched. So she was working with these brokers over in Taiwan and China and South America. So she was doing everything from designing the stuff. Like, you're talking about working with them, ordering. I don't know if it was her. One of her team members ordered one of those rolls of shit that's like the size of a car. And she didn't mean to. And so you're talking about your business, right. But what happened was why I'm telling the story is because they had a business, then they flipped on the Amazon switch, dude. And I have no idea the revenue of this company, but I know it tripled. And then they sold. And, like, because they had a business, then they went online. Like you're talking about with good products. So I'm saying that for the listeners benefit, it's so important what you're talking about. It's a business. And let's talk about the failures. But before we do, you said you wanted to be a sales and marketing company, and now you're buying crates of stuff, containers full. How did you reconcile that in your head of, like, did you reconcile that? Say, okay, this is worth it now? Or how were you thinking about it?
[00:22:26] Speaker C: I think I was naive, to be honest with you. I had some supply chain classes in college and in grad school, and I really had zero respect for supply chain. And two of my dear friends both work for large companies, huge Fortune 50 companies doing supply chain. My high school girlfriend and another friend of mine out in Seattle, and I would call them, and I'd be like, hey, listen, this shit's hard.
And they're like, listen, all the things you're talking about, how do I demand forecast? How do I make sure it goes through customs? Like, all those things are like, listen, we have all the same problems you do, just at a million times the scale. Like, yeah, welcome to supply chain. So it was a newfound respect for supply chain that probably my navity, let me lead down that path of doing stuff in a box, to be honest with you. But it was like, all right, listen. It was pure finance at the time for me. I'm like, all right, I can buy it for x. I can sell it for Y. I can market here. Here's the Amazon fees. I can make this much per product. Okay? Math. It's simple math at the end of day. I can make that work now, and I know we'll get into this. Those economics are not the same anymore. They are very different. So I don't think as nearly as many people are getting in now as that boom 56789 years ago. And everybody's always like, oh, I wish I got in then. Or I'd say that I wish I got in five years before. Everybody always says that.
[00:23:56] Speaker B: It's the same. You and I literally started a conversation with building websites, right?
It's the same thing with any of these products and services. And then it always ends up, you have to build a good company.
[00:24:07] Speaker C: Is it sustainable? And there's nothing wrong with cash flow businesses. There's nothing wrong with arbitrage or drop shipping. As long as you understand what you're doing and that this is a short term, who knows how long cash flow businesses business before you're going to be disrupted or taken out by somebody.
[00:24:27] Speaker B: I want to unpack because I think you and I might have how you're using cash flow.
One of the mantras I say is sustainable, predictable, transferable future cash flow. So if you want to go from a million dollars in EBITDA to $2 million in normalized EBITDA, create sustainable, predictable, transferable cash flow to increase your multiple. So that's what I think about cash flow. Are you thinking more in terms of, like, a couple of people in a basement making a bunch of annual income that might not last and then you should turn it into something else? Or what is your definition of cash flow, how you're using?
[00:25:00] Speaker C: So I'm a finance guy. I'm playing a little loose and fast with the phrase cash flow here, to be honest with you, because I think traditionally it's actual cash flow in and out of the business. Right. That's traditionally what cash flow is. But what I'm actually referring to is a business that's not tremendously adding value. Right. It's not a definable value add, that you're a rent seeker as economic term that people would call a rent seeker, and you're a middleman. Typically, you're grabbing some piece of that funnel and you're extracting the value out, whether that's a distributor, whether that is a broker, whether that is a metoo product creator, technically trying to make the.
[00:25:44] Speaker B: Market more efficient until the market optimizes itself and you may not be needed. Right.
[00:25:49] Speaker C: Yeah. And that's what happens, and that's exactly what happens in all of those situations, is the market will consistently optimize and people will go where there's opportunity, and then they will compete, and then that will squeeze out the opportunity. It just happens over and over again. It's very obvious once it's happened. And then I do think it's harder to fight that nowadays, especially with the influx of overseas sellers. And the rate at which these businesses are being disrupted is unlike anything I've ever seen. It's so fast now.
[00:26:21] Speaker B: Right. Well, let's pull that thread. And I don't know if that's tied to then your failure, because you said you want to talk about the failures, too, because I don't know if those are kind of combined together. So when you say that is the disruption part of the failure, what are some of the lessons learned as you're talking about building these brands, building them in a way that we're talking about, what are some of the, the hard lessons that you, like you said you're calling your supply chain friends from school. Obviously that was one of them.
[00:26:46] Speaker C: Yeah, I think that was another one lesson. So here's my current take on this. And this is like, as of the last couple of months. I'll give you a live example. We sell a sushi making kit. So you want to make sushi at home with your wife in the kitchen. We launched it two years ago, two christmases ago. And I said, all right, we'll make a better kit, a better product, a better knife. We'll put in better quality chopsticks. It's a sushi bazooka. It's like this long. You make a roll with it, we'll make a better product. Right? Nice packaging.
It'll look great. Right? That product, two Christmas ago when we launched on Amazon, we were selling it for $40 on Amazon, doing well. All right. Yesterday, cyber Monday, $17.
[00:27:31] Speaker B: Whoa.
[00:27:32] Speaker C: This is not an aberration. This is what's happened over the last couple of years where you've got difference of needs or wants from a margin perspective, especially when you have overseas sellers who, maybe they're the manufacturer, they're vertically integrated. They're not a rent seeker, in that case. And they're actually producing the product, and they're used to making 10% margin.
[00:27:53] Speaker B: Well, now, business model is based on some margin like that, or they might be making margin somewhere else. That's where I think. Also, I'm curious how much you find this as part of the game that's being played. I'm always trying to help people think through, like, you got to figure out where people's optimal margin is. For example, Rob, when I built out the managed it service, we're making 50% margin on copier maintenance. So I tried to focus on profit per customer, not profit per product line. So my point is, everybody might be playing different games.
[00:28:24] Speaker C: Yes.
[00:28:25] Speaker B: Someone at $17 can totally make it, because I think a lot of people go, well, how does he do that? And it's like, well, they might be playing a different game.
[00:28:32] Speaker C: Completely agree with you. A lot of people don't know this part about it, but chinese factories get reimbursed by the federal government in China based upon their export volume. So there's actually a table depending on the product and the material that's made, and then they're playing a volume game, and they're saying, the more I export, the more money I get back from the chinese government at the end of the year.
Last time I checked, I just pay tariffs. I don't get a rebate from the government at all. I just pay out money to bring product in. Right. I pay taxes in the overseas. They don't pay taxes in the US. Right. So the game that you're playing, you need to understand the rules, which I think you're completely correct about. You need to understand the rules. Are we even playing the same game? Is the first question. If we are playing the same game, then what advantages do you have? What advantages do I have? And then are my advantages enough to sustain my competitive advantage? Or is it a game where the overseas sellers are getting better, they're better at branding now, they're better at communication now. So they've closed some of that gap. Definitely not all of it, but they've committed. So what is defensible now is really my question. How do I think about what is defensible? Right. And so traditionally, your paths for defensibility have been brand and intellectual property. Right. IP. You're utilizing the legal framework to protect your intellectual property brand. Great example. I'm wearing it right now. Apple Watch. I bought the Apple Watch Ultra two the other day, right?
[00:30:05] Speaker B: Lifestyle brand. I like kayaks. I'm not going to buy the plastic kayak from China, because it's just that versus someone that I didn't get the boot, the cool, or whatever it might be.
[00:30:14] Speaker C: Apple is the best example of brand. We overpay. I'm an Apple guy. One of my iPhones broke down one time and I went in and they're like, well, we'll have to send it in and get it to you. I said, no, let me explain this to you. I'm not an iPhone customer. I'm an Apple customer. What does that mean? Is I own ten MacBooks, Apple TV, iPhones, iPads. I've got the entire ecosystem. So I need you to go get me another phone and just swap it out for this right now, because I'm walking out of here with a brand new phone. And the guy was like, yeah, fair enough. That's good.
[00:30:42] Speaker B: When I sent him my Mac for the Mac, because I broke it, they're like, well, it'll take ten days. I'm like, that's worse than taking my car away.
[00:30:51] Speaker C: But they're a brand. I'm part of that ecosystem. I overpay for a product that I could buy for cheaper somewhere else because of the brand. And I know that it works. And the interoperability that they've built from an ecosystem perspective. Right? They're the pinnacle, right?
99.99. No one's starting another Apple right now. It's very difficult. Sonos is another brand that I love. I have a Sonos ecosystem at my house. All my speakers are sonos. Once you're into the ecosystem, I just buy Sonos speakers. I add it on for a room or get the new they've sold. They've built brands and ecosystems which are really difficult to get out. Now, most of us are not going to do that. Most of us are going to try to create a brand.
And let me be clear on this. You were great about cash flow. What is a brand? And a brand to me is a concept or an idea or an emotion that lives in somebody's head. And so what I mean by that is, I say Apple. You have an emotional, visceral feeling or a thought about Apple. Right. It is extremely difficult. It's probably more art than science. I definitely don't have the key to that or the blueprint to that. I mean, I'm trying to revise and do a better job with that. Right. But those are the two things, in my opinion, that are the most defensible in today's world of products, of selling products either in person or online, which.
[00:32:19] Speaker B: Goes right into the intentional growth philosophy of building sustainable, predictable, transferable cash flow, because you're just trying to build that moat around your future cash flows. And if you're a rent seeker like you're talking about, or it's a flash in the frying pan really is what it is, then the multiples go up. You can keep it. I mean, you can keep the cash flow and the equity growth, or you can sell it whenever you want. You have choices. Instead of this panic of like, it could go away tomorrow.
I don't want to sideline us too much. And we can come back to the technical operational stuff too in some of your lessons learned. But I think about, that's what I've been watching, is the flash in the frying pan of the ecommerce demand exacerbated by Covid free money from home? All of this stuff just went and it was like, okay, well, how much of this is sustainable over time? I never once told people, of course it makes sense, capitalize on the opportunity. But what is your expectations from that opportunity before maybe talking about the current state, which you think you and I've got some comments that we want to talk about. But what have you seen from your brands that you've bought and sold and where you're at right now? Kind of give the listeners and us a little bit of understanding.
You've sold some. How were they valued? Because at the end of the day, we reverse engineer what is valued in the marketplace from a cash flow or a brand perspective. So what did you learn through exiting for some of these? And maybe that can kind of put the container of what you learned and then we can talk about how the landscape has potentially changed a little bit.
[00:33:56] Speaker C: Yeah. So I'm a sale again sales guy. I love negotiating. I love selling stuff. I've helped a ton of friends sell their brands. I've sold three. One of them was just a dog booster seat back in 2019, 2020 ish. It was just that one product for that little brand, we'll call it. Right? Sold a small fitness brand and then I sold another one. So an idea to give some range there. You're talking a couple of hundred thousand, mid six figures, mid seven figures. And so I've sold a couple of different small vector there.
And so it sold to different buyers.
[00:34:34] Speaker B: Different. What were the different times? Was it like acquisition entrepreneur, like Walker Dibel kind of something? Or was it like another company strategic buyer. Who were the different buyers?
[00:34:43] Speaker C: Two of them were former corporate guys who had made some money and wanted to do their own thing and they didn't want to start from scratch and thought they could buy something that was sustainable and they could just run it without paying attention.
[00:34:55] Speaker B: Or their cash.
[00:34:58] Speaker C: I think they were all cash. But then I sold an aggregator, also in 21, which we've already talked about a little bit on the pre call, the whole different model there. But the idea was how do you balance? Like you always want to sell before it's too late? Everybody does. Right. And so how do you know it's going to continue? Because as entrepreneurs, we're always optimistic, but we know the line doesn't always go up and to the right. So can you decide on when is the right time to sell? It's a personal decision and what's the goal of you want to do. But at the end of the day, if you have a cash flowing asset, a profitable cash flowing asset, you have an asset that's saleable. Right. To somebody. Somebody will buy it from you at what? Multiple? And then we could dive into that. How do I get the maximum multiple out of a business? What's most important to the buyer of that business? And that does depend on the buyer, obviously.
[00:35:51] Speaker B: Pardon the interruption. I hope you're enjoying the conversation with Rob. And one thing that resonated with me as Rob was walking me through his journey is all of the decisions that he had to make between getting into manufacturing, what kind of products to lean into, how to scale certain products or buy a certain company, or whether he should sell, whether he should take distributions out or reinvest for growth. All of those are decisions that I'm having to constantly deal with at Arcona, and a lot of our clients are dealing with, and it takes data and it takes a plan. And if you're wondering what your information could look like if you had that plan, that roadmap, all you have to do is schedule a short discovery call with me and my team. The show notes have a link in it below. And what my team at Arcona does is offer a complimentary financial assessment where we plug in our financial dashboard to your accounting package, and then we come back after my team analyzes it with their thoughts and observations to see whether you can actually build out that financial roadmap to your target equity valuation so you can get the data, so you can actually answer the questions that you probably have of should I take that distribution? How does that impact the growth of the company? What product lines should I invest more in to get where I want to go faster? That all takes information and data, but that information and data has to be reconciled against a plan to your target equity valuation. Point B. So check out the show notes where you got a discovery call with me. All in the spirit of trying to figure out if there's an opportunity for the financial assessment and an opportunity to work together. Thanks everybody for tuning in, and I hope you enjoy the rest of the interview with Rob. I'd love to hear your thoughts on this. I'll put a container for what I teach in the intentional growth academy, where there's a difference between the intrinsic financial value of the future cash flows, essentially, to get really geeky, the net present value of your future cash flows based on the risk, the company specific risk specifically, but call it the future cash flow as an asset, just like you would like a piece of real estate.
I compare that to the strategic transaction value, Rob, which in my definition of that, is where the buyer and the seller come together and it's wrapped in the purpose of the deal. The strategic buyer is buying talent, or supply chain or ip, which could decouple it from the cash flow valuation, but potentially could come with ramifications of how the company is integrated. Redundancies. Like when I sold, we had to get the company because of that. So my philosophy is build the cash flow valuation to hit your financial targets and then create as many options. So when you negotiate to terms, you can get exactly what you want. So when you think about your multiples, kind of within that container of like, there's the financial multiple and then there's the someone needs my company or wants it for a specific reason. Does that make sense?
[00:38:34] Speaker C: Yeah, 100%. And that goes back to way before you want to sell. You should understand who you're going to sell to because you need to build it out from the intangible piece of what you want that to be like. So that makes it easier for. It's positioning. Right. To me, it's positioning for everybody that hasn't done it. I'm thinking about that now, earlier and earlier and earlier. How do I position it? And maybe if you're really smart, I have a friend who sold one for a lot. I mean, hundreds of millions of dollars last year sold to a publicly traded company. He knew who he wanted to sell to and so he did a full process through an ibanker and went through the process, but he had some strategic options in mind of who he wanted to sell to.
[00:39:16] Speaker B: Right.
[00:39:16] Speaker C: And I think that is really the key is knowing who you want to sell to and then making it so it's an easy yes for them and how do you position it so it's as easy as possible for them because that's really the key because that's going to give you the best multiple you can, is how do you make it easy for them? Because again, if you're selling. What's your definition?
[00:39:33] Speaker B: Easy.
[00:39:34] Speaker C: Well, if you're selling to a big company, it's not their money. It's the guy who works the big company who's making the decision to buy the business. Right. So how do I make it easy for that guy or girl or woman to go ahead and sell that internally on why they need it? Are they buying it to save their job? Are they buying it to add on because their strategic advantage to get a bonus? I don't know. Right. But the more information you can get around what their motive is, you can understand a little bit more on how to position it and how to then package it. I guess I'd call it packaging the deal in the business. And the earlier you know that, I think the better chance you have of selling the business.
[00:40:12] Speaker B: Do you know Ted Schluter from the Grist?
[00:40:14] Speaker C: No.
[00:40:15] Speaker B: Oh, God. I got to introduce you to him because I think he's got a marketing agency where he wrote a book called Branding for Buyout. Rob, you got to have him on your branding for buyout.
[00:40:26] Speaker C: Yeah.
[00:40:27] Speaker B: And he's like, for any marketers in there, I apologize. But he's one of the only marketers I know that he understands finance evaluations where he wrote a book, branding for buyout. And we did a podcast series, Rob, and for the listeners, I'll put the links in the show notes, but the branding for buyout is we got a cash flow valuation, but let's wrap it together with everything you just said. And they actually will send direct targeted ads to the potential buyers and then build up all this noise. So with your different buyers, what were some of the reasons they wanted to buy the companies and the brands from you?
[00:41:02] Speaker C: We had a couple of guys that just wanted to. I think they were sold on the easy button and wanted to buy something and just operate it. I do think there's the Walker Dibel approach of I do think it's really hard to go from zero to one. I think if you know what you're doing in a space, you understand one to two is easier than zero to one. Now, a lot of people that have bought businesses in e commerce space in the last few years don't really know the business. And I've been advising a startup in Seattle last couple of years and the primary founder, two founders. The primary founder has had massive billion dollar exits in fintech and he did that with knowledge and context. And one thing I've really learned of this advising the last couple of years is a lot of the people that they brought in are really smart people, like know data scientists, MIT, Harvard, you know, bring all those guys. In no context, I would be the only one being like, hey, has anyone else ever sold a product at Amazon or launched a product at Amazon? Does anyone in this room know anything about what we're talking about? And no. The answer was no. And I think that it's kind of like the supply chain conversation we had earlier. I didn't really understand the value of context until I've had this experience of seeing really wicked smart people who sometimes draw the wrong conclusion because they don't understand all the pieces behind it that would lead to a different outcome and a different decision.
[00:42:30] Speaker B: Well said, man.
I'm not big on social media at all and I'm trying to fix that with promoting the podcast and everything we're doing. But I was scrolling on x and my feed tends to be full of a lot of acquisition entrepreneurs, people raising money, all this kind of stuff. And from coming and turning around a business, from losing a million bucks and doing all that hard shit like I was talking to you about in the pre call. It's like I'm watching these people buy these companies with debt and everything like that. This is different than buying a piece of real this he said, being fully transparent. And I just read his props to this guy that wrote out what he did over the last four years. Rob and he's now going through personal bankruptcy because he bought two companies, bought a third company, and then he was scaling a digital agency along with a couple of ecommerce brands and then supply chain issues, demand issues, margin compression, and now he's literally sitting there trying to figure out how you have personal guarantees all over the place and he owes $2 million. And I'm sitting there going I wanted to throw up in my mouth for him. But it's the context and experience like you're talking about.
[00:43:36] Speaker C: Ryan, we have a policy against personal guarantees by the have a, no, we have a policy against it. As soon as you tell somebody you have a policy against anything, they just go oh, ok. It means you can't do it, especially the corporate people. So we still, we have a policy against it. That's it. That's the end of the conversation. We don't do them. I'm not doing a personal guarantee ever. I could never see any world where I'm doing a personal guarantee. But I think that a lot of the guys, the aggregator space, they came in, right, and they bought a lot of their finance guys and they bought a lot of these businesses, these.com businesses and tried to roll them up with, this is not a new strategy. The roll up strategy has been around forever and typically you get economies of scale. You're like, oh, each of these companies has an accounting department. Each of these accounts they have an HR department. Well, we're going to have one. It's going to be shared services and that's how it always works. Well, the problem or the challenge with this in ecommerce is these businesses don't have size to have an accounting department or an HR department. It's one guy with maybe contract workers, maybe a small team max, that is doing all this. So they're already running unbelievably lean. And so now you're not gathering those economies of scale. And especially I'll talk about Amazon. Selling a supplement on Amazon is vastly different than selling a sushi making kit.
[00:45:03] Speaker B: I can imagine some of the differences. But what are you thinking when you.
[00:45:06] Speaker C: Say that the way that you merchandise the product online on Amazon, the way that the certifications that you have to get for the product category, right. How do you participate and stay clear of Amazon and any of the unwritten rules? They don't. You also don't get unless you stay in the same category or subcategory. You also don't get the economies of scale, of lessons learned because they don't directly apply to other we I sell in multiple categories today and there's always new things that kind of pop up.
[00:45:37] Speaker B: I'm sorry, I'm laughing Rob, because it's just so damn refreshing talking to you about this stuff because I don't know if it was my journey of like I just kept looking over the last decade. I'm like because you're talking about different industries and different businesses, like you're either a manufacturer of sushi product kicks or you're actually in the health supplement business and it just so happens to be you're selling through ecommerce, you know what I mean? And I kept going like what am I missing here?
I say that from my past years ago, but to your point, how many times over the last eight years I've been doing this podcast? People are like I'm going to do a roll up in insert industry vet clinics, cremation or pets. And I'm like, I know from turning around my own business where we controlled everything, that firing and replacing 60% of the employees is a son of a bitch man because it's people and they got to insert into the culture. And I remember when I hired our director of it and she was a toxic cancerous and she destroyed so much in 90 days. And I'm like you can't just bolt all these things on. Back to your point, it's not this straight 40 to five degree angle up of normalized EBITDA and multiple accretion.
It's so refreshing hearing it all, man.
[00:47:01] Speaker C: Well, and I don't recommend, I think if I were to go back and do it over again, which I try not to think about too often because we can't do it, I can't push the reset button. I think I would have narrowed my focus. I mean that's what we talk about here all the time. I would have been better off creating one great brand or maybe two great brands in the same exact subcategory or category.
[00:47:21] Speaker B: If I were to redo something different.
[00:47:24] Speaker C: Pick a category that hopefully you care about or are passionate about, but that you're going to go all in on and build in that category. I mean I think some of the aggregators that have done that have done better from what I've heard than other aggregators that didn't do that right. Because it just makes sense. You've got accretive knowledge that is growing and you take it to retail. Same conversation you join on Amazon, same conversation. Whatever it is, there's a creative knowledge that you're gaining in that specific vertical. Trade shows whatever it might be you're in one vertical. It's just too hard to be everywhere all the time. So I don't think what I did is the optimal path by any means. That's just the flaw. Being an overly optimistic entrepreneur, I think of wanting to do journey. Like do everything.
[00:48:11] Speaker B: Yeah, it's part of the journey. And like you said, it's part of the context and experience of understanding how you got to where you are, you wouldn't have done if you weren't naive. And same thing with man. Like, I read Walker's book and he's a friend of mine, and I started Arcona, and this is the second try. And I'm like, okay, well, in this first page has never started business. It's dead. I'm like, well, too late for know. It's part of the journey. But I think I like how you said it's the survivor bias.
I just want the listeners to be aware.
I'm not saying that this is not possible, but when people succeed, I just want people to know that it's hard freaking work to get there.
What's the set up right now? And the couple of questions I had, because you had said in the pre call, or it was your cut sheet of three things that you care about is building wealth, relationships, and well being, I'm assuming it was not easy to come to that conclusion, that those are three things that are super important.
What is it, and how are you optimizing your life and your business to solve for those things?
[00:49:17] Speaker C: Great question. A couple of thoughts on this. So I'm not a woo woo guy. I'm a logical, rational, analytical guy, but talked to a coach a couple of years ago. A friend recommended my wife, talked to her. We did a vision board. It sounds crazy even saying this, because we did. A couple of years ago, we're in Phoenix, so we leave for the summer. And that summer we were in Hawaii for the summer. And so we're in Hawaii. The coach, Lana, who I love to death, she does a vision board exercise over Zoom with my wife and I. And for those of you that don't have never done, I have something called.
[00:49:49] Speaker B: The intentional growth vision board by the all.
Maybe some more mechanical stuff. It's not all. I like the woo woo with numbers.
[00:49:59] Speaker C: Yeah, this is a little more like she had mailed us pictures and cut out some magazines. We walked around the room.
[00:50:04] Speaker B: Okay, that's not what I'm talking. But I love it. I love it, I love it.
[00:50:07] Speaker C: But we came up with a vision board, which is basically like what do you want your life to look like and design it? Right? Probably had too many attractive women on there for my wife's taste. I was like, and it's funny because I actually had a few attractive women. And Lana said, is there anything you didn't put on here that you wanted to like you hesitated or caught? I said, yeah, actually there are more attractive women. But in my head, it clicked. Like, oh, I've already got a couple. I probably shouldn't have any more on there, right? But I didn't have. I licked one car, one boat.
[00:50:36] Speaker B: I'm sorry, I can't get going. What was the attractive women doing on there when you're doing this with your wife?
[00:50:42] Speaker C: Funny enough, the two that I put on there were both having fun, and they were like, playful.
[00:50:48] Speaker B: Okay.
[00:50:48] Speaker C: So we came away with the vision board experience of a statement of intention. And so I came up with mine right away. Bam. During the meeting. And my statement of intention is, I choose a life of growth and learning through playfulness that is successful. So that is my driver at all times. If it's not growth and learning and not fun and doesn't lead to success, I don't do it.
[00:51:14] Speaker B: What does that matter? Say success.
[00:51:17] Speaker C: That's the hardest one. And that's why successful last, right? And so when I think about success, I say, then as of the last couple of years, you talk about the journey. I use a framework I got from a friend of mine. It's health, wealth, relationships. Can I be an a in all three categories all the time? Because you and I have met a lot of people that sacrifice in one or two of the categories to be wealthy, right? And at some point of monetary wealth, the marginal return goes down. And I'm not interested in chasing every last dollar to forego my relationships with my daughters or to forego my health to make a couple of extra dollars. So how do I balance? And I hate that word, but how do I balance so that I'm an a in each of those three categories? That's how my guiding principles are. Like, I wouldn't do the podcast if it wasn't fun. I wouldn't run the business if it was not fun. I'm not going to go do some terrible business or buy a terrible business that I hate every day just to make more money. That's not my purpose now. It might have been when I was 22 and I had $0 and nothing in the bank and I had nothing to do. I did. I grinded a lot more back then than I would now, but I think those are the two things that drive me to making decisions on whether I want to do something or not do something.
[00:52:38] Speaker B: So you're going right where I wanted to go next, which is this framework of how is it impacting your decisions?
How would you decide? So opportunity presents to you and how do you assess that opportunity and what it means to you.
[00:52:59] Speaker C: Once you've had some level of success? I think you get too many opportunities. Right? I believe. I don't know who said this, but you say yes until you can afford to say no, right? Say yes to everything until you can afford to say no. And then you get to a level and you're like, oh, my God, I got new ideas every day that's not going to help us lead us forward. So I have to kind of rein myself in or have somebody on a team try to in come back from the weekend. They're like, oh, God, how many new ideas did you have over the weekend? Right? So we try to say no to those, and I use that guide, am I going to get growth and learning? Is this going to be a value of a skill that's going to stack for me over time and compound if it's not, I'm not going to do it.
[00:53:40] Speaker B: Keep going.
[00:53:41] Speaker C: Yeah, go ahead. No. Go ahead, please.
[00:53:42] Speaker B: No. So how do you balance the time money equation? Because I'm tracking everything you're saying. And one of the things in principle number two of the intentional growth principles is I talk about the three financial targets, Rob, of what's your target annual income? How does your outside net worth impact everything? And then the target equity valuation of the company? Because then it's like the whole pie chart of. And I believe it's like plus or minus a handful of percent of $5 million, 250 grand in cash flow. And if your business intrinsic value is plugging the hole and you've got this, then what the hell are you trying to strive for, right? Because at some point I agree, you're going to be disappearing your money and your relationship. So how are you balancing that time money of over committing your time for money?
Does the question make sense?
[00:54:31] Speaker C: It does. So I am in strategic coach with Dan Sullivan. I've been in it for like four years. And so how I think about is unique ability, which is a concept of what are you world class at? So I think about unique abilities a lot. And the goal is to not spend any. The goal, which is always something I'm striving for. I don't know if it's not probably an endpoint. We'll ever get to. But if it's not in my unique abilities, I don't want to be doing it. If it's not something that I'm really great at and I'm passionate about, I don't want to be doing that. Doesn't mean there aren't things that I still do that don't meet those criteria. But I try to constantly eliminate those things.
[00:55:06] Speaker B: So you're doing like three days, buffer days and performance days then, too.
[00:55:10] Speaker C: Boy, I'm trying. I've been in this.
[00:55:12] Speaker B: Amen, brother.
[00:55:15] Speaker C: The struggle is real, right. And for me, the challenges is partly because I love what, like, I want to do more work. I like it. So for me, it's like, okay, I want to go dig. Want. Oh, I can solve a problem. I really love solving problems. So a real live example is TikTok shops just started in the US in September. I just started looking to it three weeks ago. I've gone off the deep end into TikTok shops in the last three weeks, man. I'm having phone calls with guys in China who used to work at byte dance and they got a software. I mean, I'm in. I just dive in and how do I learn how this works? How do I learn how everything works here? And how do I get a little mastermind to put together my friends who are learning also, so we can all learn together? I'm going to go into this because it's the best opportunity I've seen in a decade. So it's like, how do we dig into this and learn more of it? But for me, that's fun. That's not like work.
[00:56:08] Speaker B: It's almost like the performance day, as Dan puts it. Right. You enjoy it so much, so you do it even if you weren't getting paid kind of thing.
[00:56:15] Speaker C: Yep, exactly. And it's fun. It's fun to do, right. But I try to balance it with, when my kids are in school is the primary focus. When my kids are in school, they're not available. My wife also works in the business part time, but how do I balance that? And then the number one thing for me is I want to make sure that the time with the kids, they're going to be 18 soon. That goes by really fast. I know you've got two young daughters. I mean, it goes by fast.
It goes by really quick. So how do you optimize those times? So, like, we're gone for the summer together, two months as a family. We travel on fall break. We travel on spring break. I say we should travel on Christmas every year. But somehow we don't always travel on Christmas. Kids want to be home for Christmas, but those times are really valuable. So two and a half months out of the year, we're with our family, we're traveling. Work is minimal. I use forcing functions to keep it very little like we were in the summer. Last summer, we're in Hawaii for two months. I took calls and meetings between 07:00 a.m. And 10:00 a.m. That's it. That's the only time I was available. Then we go to the gym together as a family. We all work out together as a family, have a healthy lunch, and then we go do fun stuff. Right? So it comes back to like, you've already touched on this a little bit, but what do you want your life to look like? And then how do I design it? Business supports my life, not I support my business. And so that's what I'm constantly thinking about trying to improve. How do we get better at that? Is there somebody we need to add to the team? Is there some tweak in the business the way that we're doing it? Is there a different opportunity we need to focus on? I think it's an evolving. I mean, journey is the right word. I think it's never a straight line, and it's always evolving over time.
[00:57:50] Speaker B: Yeah, because I've read all of Dan Sullivan's books and Ben Hardy's books this last summer, too. And ten x using the two x gap in the gain, who, not how.
Again, they complement a lot of the frameworks that I've been working on. And it's just thinking through all this stuff, you have to think about it, otherwise you're going to be spread and ripped apart. What's the current set up of your business right now, and what do you want with them?
You still got the sushi business.
You got a couple of brands.
[00:58:22] Speaker C: One structural change that I made a few years ago, I was doing a lot of this by myself back in the day. I was wearing a lot of hats. I'd have a partner here, partner there, and I was like, I got to build a team. It's the only way I can get leverage. Right? So one thing I learned from a friend, Steve, is that everything is at the center. So all the employees work for one company, and then any of the brands pay that one company to manage it. Almost like an agency. The difference is I own all the brands, so we're not an agency for any outside businesses.
[00:58:54] Speaker B: You have the back office, shared function, almost like a PE firm would. Just to your different brands.
[00:58:58] Speaker C: Exactly.
[00:59:01] Speaker B: You have like a shared services agreement with the different companies. Love it.
[00:59:06] Speaker C: So that allows me to peel off if I want to. So I love the book, built a cell, read that a few years ago. And so we have the ability to, if I say to a brand, this is something I don't want anymore, I could peel it off if I want to buy a brand and bring it in, I could bring it in and try to figure out the shared services of that. So that's the model that we've built out. I will say that I currently believe that the private labeling and white labeling model is very difficult. And if somebody doesn't have significant expertise, I wouldn't recommend somebody go into it today. It's too difficult. Unless you have some type of IP or brand or sourcing opportunity maybe that everybody else doesn't already have. If you're going to go to China and get a widget and do a garlic press, I mean, good luck.
[00:59:53] Speaker B: Yeah.
So Gina Wickman's book, the entrepreneur Leap. My dear friend Rob Duvet is his business partner on the ten disciplines. And so the entrepreneur leap, and I think Rob's not doing that podcast, actually. But they're talking about like, if someone's going to jump a leap into entrepreneurship, what are you good at? And then how are your skill sets and all? It's all what you've been talking about, Rob, of the context, the experience, because it's going to be hard, so you might as well love it.
And if you do the hard work, then you can build a cash flowing business that's sustainable over the. And I think you can then design it around you. Because I think about, man, right before we jumped on, I interviewed ITR economics. I don't know if you're familiar with those guys, they're big vistas, but they talk about the Great Depression, 2030. It's just this whole demographic wave and it's like, the reality is boring. Businesses are great, man. I'll tell you what, we have a bunch of home services clients and they print money and commercial cleaning or landscaping or exterior, it's like it doesn't need to be ecommerce or code and software if it designs the life around you and the financial life equation like you were talking about. I think what I'm trying to help promote is it can be different for every person. We don't have to go and beat our chest for revenue.
[01:01:15] Speaker C: And that's how we think about acquisitions, too. Just to be clear, we've been doing outreach for the past four or five months to businesses, online businesses that we feel have a gap that we can solve. Right. So that could be paid advertising, that could be organically ranking on Amazon.
Maybe it's a supply chain gap, but it's an obvious gap that we can find and we can improve in the next 30 days. Not that we wouldn't rebrand or do something else that takes longer. Right. But what can we do in the first 30 days to get an impact? So that's what we're doing outreach on and trying to find. And that's difficult. That's a numbers game. That's sending out outreach, getting on calls, talking to people.
It's hard work.
[01:02:00] Speaker B: It's not easy.
[01:02:02] Speaker C: We're going to talk to 200 people before you buy the first one or 100 people before you buy the first one. It's going to happen. But that's the model I think about is what are we great at? Can we find somebody that's not great at something and then by acquiring this, we have an accretive increase in the value immediately?
I love boring businesses, but I'm not the guy to go run necessarily a boring business. I don't think. I don't see myself running a machine shop. Somebody else who has that expertise, operational or hands on for sure don't go do ecommerce. That's silly.
[01:02:36] Speaker B: Well, that's why I didn't get into it. I mean, like, literally in 2017, I was the keynote for rhodium weekend with Chris Yates. And that's where I met Mark doubts and Joe Valley. And I'm like, watching all these people make money, and honestly, rob, I was like, I sold a shitload of copiers, but I have no idea how to do this.
Like, and that's why I was like, I at least know, like, obviously that was a long time ago, but my point is knowing yourself what business it is. And I think then everybody, the point is, the business can suit your needs to your point. And so a couple of questions as we're wrapping up is like, what are you hoping out of the podcast? So I'm the one podcast. You just started it, and I'm assuming that you saw a bunch of people with podcasts. And I think a podcast is the best outlet for anybody, honestly, that's in entrepreneurship. But what are you hoping to get out of it and what led you to jump in?
[01:03:25] Speaker C: Yeah, well, first of all, hoping to get out of it. I don't really know. I'm kind of a move fast, quick start problem. But to be honest with you, it wasn't my idea. It was a team's idea. I came back in May on a Friday, and I was like, where is everybody? And they were in the conference room like, hey, you're starting a podcast. Here's some names we've come up with. Here's some themes we like. Basically, we want you to do more of the stuff you do in here, but just put it on the podcast. So that's kind of how it started. That was the initial genesis, and we talked about it once before or twice before, but I'm like, this will be fun. It'll be a good practice. I want to do things that I enjoy. This isn't work to me. Like, talking to you about this stuff is super fun for me, right? Talking to people about health, wealth. It's funny. I go to strategic coach in June. At the June meeting, I talked about how I'd been doing all the research, and I started cold plunging and I started doing the sauna at the September meeting, I'm the cold plunge guy. Everybody's coming up to me like, hey, what's your protocol? I bought a cold plunge since I saw you last. How long do you sit in the cold plunge? What do you do after that? I became that.
[01:04:24] Speaker B: Do you do the wim hof breathing in the cold plunge, too?
[01:04:28] Speaker C: I got this actual thing now that makes it harder to breathe through while I'm in there. I love this stuff. I love the hacking and trying to find different things that work. And so I became that guy in that small group of like, oh, this guy's really pushing forward on this stuff, right? So trying to figure it out. So I love talking about that. I love just trying to learn. And this goes back to the growth and learning. If I'm growing and learning, I'm having fun. And for me, it's going to take different directions. So love talking about my daughters, lessons I've had and things I've come up with in games for the kids, the bank of dad, things like that, because I'm a finance guy and then really focus on that and I think it'll allow me, which already has, like meeting people like you. You're a great person to meet that I wouldn't have met had I not started the podcast. And so I interviewed another guy earlier, had a great conversation. So for me, it's putting more interesting people into my life and spending time doing what I really love to do. So for me, it's not work. It's just a lot of fun.
We'll see where it leads.
[01:05:25] Speaker B: Cool, man. Is there anything I didn't ask that I should have?
[01:05:32] Speaker C: No. I think this is great, man. I love talking about this stuff. Love to have more conversations. If I can ever help with anything, please let me know. I love helping.
The one is the easiest way to do it.
Unfortunately, DJ Khaled came up with a song called I'm the one. So that does hurt search engine optimization a little bit a few years ago, but I'm the one with Rob Green. It's two b's.
[01:05:56] Speaker B: It's okay.
Arcona is actually a russian death metal female singer.
IO was just available at the time, so it's all good, man. Rob, this has been a blast, man. Thank you so much for coming on the show.
[01:06:12] Speaker C: Thanks for having me. Pleasure talking to you.
[01:06:17] Speaker B: I hope you had some good takeaways from that conversation with Rob. I'd say the name of the game is building a good business and understanding why. Which is why I think there's a couple things you can do right now, is one is fill out the intentional growth starter kit. If you've not created an account, all you have to do is use the link in the show notes below where you jump in. I walk through what intentional growth is and why the target equity valuation of the company is really important. There's a video on each of the five principles, introducing all five of them. And then there's a case study on how to project out the value of the company. And I show, using the financials, how you can actually see the tradeoffs between your distributions, your reinvestment, and your value gap. Or if you're interested in a complimentary financial assessment by my team at Arcona, where we will plug in your numbers into our financial dashboard, my team will analyze them, and we'll come back and you'll see a base case of your numbers in the dashboard with my team's thoughts and observations. All you have to do is just schedule a quick discovery call with me and my team using the link in the show notes below. And then I know you're going to be excited for next week where I have the co founder of MapQuest on the show to talk about his journey as an entrepreneur and what he's been doing since MapQuest and his founding of the business.
