The Life of a Serial Entrepreneur

Visit Dan at: AltusCampus.com

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drawincustomers.com.

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Today we are welcoming/preparing to learn
from Dan Guerra, the CEO of SDM Central.

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So, Dan, how are things going today?

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Hey, every day is a great day.

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Every day is a great day.

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That’s the mindset I hear of a lot

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of entrepreneurs are just like, it’s
awesome, everything’s great.

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You always get that when you talk
to somebody who’s a real estate agent.

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You ask them, how’s the market?
Best market ever.

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You couldn’t ask for a better market.

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I’m like, did we wake
up in the same space?

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No.

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2008.
Everything’s on fire.

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It’s great.

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Like networking events and happy hours.

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How’s real estate?

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Best market ever.

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Good guy, man, flying off the shelf.

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Can’t keep up with the underwriting.

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I just heard about a financial crisis, man

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Isn’t the world on fire?

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Yeah.

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So to your point yes.

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I think entrepreneurs are
default optimistic people.

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If you weren’t, it’d be really hard to get
out of bed after getting

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life pummeled out of you the day before
because you had a series of failures.

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Yeah.
Or you’d have murdered employees.

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Yeah.
I mean, I would never say that, but

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I think that you bring up a really
important thing, which is resilience.

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And
I think that’s something that you and I

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share as entrepreneurs,
as being generally resilient people where

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we get a lot of no’s and we
get more no’s than we do

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yes’s.

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Except our yes when we get there are

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really big and it allows us
to move the agenda forward.

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And not just for us, but to your point,
the people that work with us,

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our employers, our contractors,
our customers.

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And so those yes’s are huge
yes’s.

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One of the things that super inspires me

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is they were just like this Michael Jordan
like,

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quote on numbers, and I’m going to screw
it up, so I’m going to try the numbers.

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But they say for all his awesome shots,
he had 9000 misses.

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And so if he hadn’t had all those misses,
he wouldn’t have had all the successes.

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And I think that just kind
of inspires us as entrepreneurs.

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Like, we got to get in the game
and we can’t be afraid of the no.

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And the yeses that we have are going to be

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hugely beneficial, not just for us,
but the people then around us.

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Yeah.

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Babe Ruth, I think, had the most
strikeouts of any player for a long time.

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Babe Ruth.
The baseball game.

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But we don’t talk about that.

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Right.

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Talk about home runs and hot dogs.

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It’s all good.

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So, interesting thing.

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I guess I should let the crowd know
that I’ve known you for a long time.

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Years.
Right?

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Yes.

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So I’m trying to think when I knew you had
an office downtown Madison,

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and I remember visiting you
at that office across the street.

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People were protesting something.

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I remember I asked you,
what are the protesting?

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And you’re like, oh, every Thursday,
they protest about something.

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And it was funny because
I’m like, seriously?

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And you’re totally serious.

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Every week, something’s wrong.

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We love it when people exercise democracy.

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Yeah, it’s weird.

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I mean, I get it.

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Fantastic going protest.

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That was a long time ago.

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I remember that.

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It was just a weird yeah,
we were having a meeting.

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It was on the corner right there, and I’m
just like, this crowd is kind of noisy.

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Yeah, it was one of those, every week,

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really?

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At one point, couldn’t you
just be like, you know what?

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We’re good?
Well, after they had the riots in 2011,

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they protest on Thursday
and they’d sing on Fridays.

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Yeah.
And it was great to come together.

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It’s hard to get work done, but nice.

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I imagine one of those just like,
do any of you need a job?

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We could hire a couple of you.

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But on the flip side,
if they’re protesting something that I

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want to be protested,
then have at her, man.

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Hey, you know

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I think is like, put your time
into everywhere you find it.

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If you find some happiness, do it.
Do it.

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Sure.

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Keep in mind, I’m trying to make happiness
and other stuff for other people.

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Yeah.
Within the legal and ethical confines of

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choices. It turns out
cannabis is almost legal now.

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You know what?
Didn’t we have something that we voted

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for a little while ago that we’re
just like, yeah, make this happen?

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I think that was an advisory referendum.

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All right.

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That was the one that I think I
always thought was kind of fun.

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Like, everybody comes out
for cannabis legalization.

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All right, it’s all good.

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So let’s go back,

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way back in the protesting people outside
your window for something. Not you.

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They were not protesting us.

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No,

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I think it was like, puppies should have
more fur or something along those lines.

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Puppies should shed less.

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Maybe I might attend that one.

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Anyways.

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You had Argus Ventures,
if I recall correctly.

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Yeah.

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So let’s go down the road.

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When did you first start your first
what you would consider to be your first

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real small business or real
business, maybe, as big?

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I started my first business,
actually, before August in 2001.

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All right.
Before I graduated high school.

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Wow.
Real one.

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We’re not talking
to paper out or anything.

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It’s a real one.
All right.

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I did it with two other friends of mine
in high school because we were going to be

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big computer service and repair
moguls at the time, and.

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In 2001, that was a big deal.
Yeah.

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Wow.
You know what?

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You just make me really I’m approaching 22

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years of doing this until you’re here,
and I’m still here.

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Thank you.

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And actually, on a serious note,

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thanks to all the people that I’ve had
to work with over the last 20 years.

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But I did consulting before
I graduated high school.

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I never really had a real job.

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Never flipped burgers or whatever,
served a beer, I don’t know, whatever.

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Not qualified to serve
burgers or flip beer.

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All right, well, that’s okay.

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I didn’t get a job at RB when I applied

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for it a way long time ago, and that kind
of broke my heart a little bit.

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That’s where I’m at in my life.

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I’m sad that I didn’t get hired at RB.

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Ironically, at some point, I must
have worked for the school district.

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I think I might have been doing
some technology consulting.

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So my brother now works
for the school district, all right?

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He goes, when did you work
for the school district?

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And I’m like, I have no idea.

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He goes, you know, you’re in here, right?

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I’m like, You’ve got money in the ETF.

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I’m like, I have no godly idea
what you’re talking about.

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He’s like, yeah, you were employed.

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I’m like,
Maybe that was the summer after I

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graduated or before I
graduated or something.

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You got pension checks headed your way.

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And you didn’t even know?

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And he goes, I know it was a long time ago

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because your number is
really low in the system.

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I have been graduated for 20 years.

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Anyways, you got these partners and are

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you fixing computers, or is it more
server stuff or what are you doing?

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We’re fixing computers.

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So this is what happens.

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So it comes down to graduation.

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Dan decides that he’s going
to go to the technical school.

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His mom and dad are really pissed at him
because he’s not going to the University

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of Wisconsin Madison, and he turned
out in a really nice ride to go there.

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Might be one of my lesser than great
moments in life and bad decision making.

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Who knows?
Life is all about choices.

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Life is all about choices.

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And so I decided to go
to Madison Area Technical College.

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At the time, Decided
we’re going to do this.

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We have a lot of fun that summer.

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We don’t do a whole lot of business.

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We were too busy having fun post
graduation, big envelopes of money,

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and you’ve got money and bad
decisions, so we did that.

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We got to the end of the summer, though,
and I was starting to get itchy like I

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wanted to really get back into doing
something,

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have a conversation with my two amigos,
and said, hey, if you guys aren’t ready

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to move forward and make this
business work, I want to buy out.

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So at that time,

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let me just ask you a few questions
here to get some foundation here.

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Yes.
Your two partners, are they just buddies

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of yours, or do they actually know
how to turn the screw on a computer?

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One of them knows how to turn
the screw and be a programmer.

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Okay.

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The other one, we just,
like, hanging out together.

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He’s the guy that orders pizza.

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He’s the guy that orders pizza.
That’s your skill set.

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All right.
And the computers that you’re fixing or

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trying to fix, are they residential,
or is this more commercial stuff?

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Predominantly more residential,

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so I didn’t have any idea
of commercial business.

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And doing all this stuff,

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I get to the end of the summer,
and you got to get serious about life.

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And so I have this conversation.

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Miami goes, it sounded good before we
graduated, and by the time we had to get

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practical and we all wanted money,
it’s like, this might not work out.

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And so I ended up buying them out,
like, in August of 2001.

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And what are you buying?
A tool bag?

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Like, what is the value of the business?

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We all came to the table with $600.
All right.

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Me returning the money
that we spent got you.

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All right?
So we did that.

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We took them out, and then I ended up so

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my dad was my dad was very,
very upset with me.

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That you bought them out or that you
headed to the tech college?

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I mean, the list is pretty long.

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It was mad that you’re going to the tech

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college, mad that you turned down this
experience to go to the university.

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It was mad that, okay,
so we were not on great speaking terms.

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All right?

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I was like, hey, dad, I need two
grand to get my business started.

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Will you float me two grand?

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And so my dad, you know,
being the stand up guy that he is,

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borrows me $2,000 or
really gave me $2,000.

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If it wasn’t for my dad to get started,
I wouldn’t have had it.

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All right.

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I had a couple of contacts,
people that knew that I was starting

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a business, and so I sublet
part of a law office downtown Madison

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across from Wandos the bar, and started,
like, a new install based customers.

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And I ordered my first sign,

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and so my first sign was ready to get
picked up on September 11, 2001.

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Well, that’s just bad
planning on your part.

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So this was so amazing about this.

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I didn’t have an appreciation of where we
were as a country or what was going on.

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Nobody did.

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I remember just walking out of school
MATC, week three, my classes get canceled

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because my teachers like,
nobody can concentrate today.

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Everybody go home.
We all go home.

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And I’m like, great,
I can go pick up my assignment.

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That was the first thought
that occurred to me.

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Great, I can go pick up my assignment.

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Yeah, the show has got to go on, right?

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And that’s been moving.

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That’s kind of where I was
starting off in a recession might not have

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been the best thing,
but it was a learning lesson.

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Being in that environment changed it going

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to work every day changed it getting all
the parking tickets in downtown Madison

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changed it, and it was just a different
way to start thinking about the world.

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And so that’s really my introduction
to not doing residential computer service

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and repair, but doing more commercial
pieces and then learning how.

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That one of the ideas I never
had this thought about.

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Right.
So the mindset the world’s changing.

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We’re becoming more defensive.

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People don’t want to spend money.

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We decided that we’re going to change our

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customer base from residential
to doing more commercial service work.

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We’re starting to get more projects here.

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And then I didn’t have any appreciation
for, like, hey, people like to buy stuff

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on terms they don’t pay
you right away for it.

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Oh, sure.

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So this idea of, like, working capital
was, like, totally foreign to me.

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I found myself in some more working
capital crunches, and my dad was a super

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solid guy at the time again, and I got,
I think, my first line of credit

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for Park Bank for ten grand or
something like that, or five grand.

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That kind of bailed us out the first
time of dealing with this.

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And, like, I had all these school
of hard lessons, and it was a Boy Scout.

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And so all the people that I was scouting

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with, I told that I was doing this new
computer service and repair business.

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A couple of them own businesses,
and they did business with us.

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That’s kind of really how I built.

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My first company was through word of mouth

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and a lot of the stuff that I had done,
a lot of stuff in Latino community

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at the time, and the Latino community was
incredibly supportive of my business.

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And so we did a lot of computer service

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and repair, and we did a lot of stuff
for the YWCA here in Madison.

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In fact, we did so much work for them,

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is that we were awarded the Volunteer
of the Year Award in 2004.

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Oh, wow.
Congrats.

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The success that I have today
and the initial success that we had

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in the computer service and repair
business is because so many stakeholders

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in town here took an interest in helping
me become the person I am today.

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And I am eternally thankful for that.

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There’s no one self made right.

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You always have an army behind you.
Yes.

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Or in front of you.

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You cannot do it yourself.

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And I did not do it myself,
and I would never say that I did.

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There’s so many stakeholders that helped

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me get launched that you can’t
say thank you to enough people.

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Now I will tell you,

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we did the computer service and repair
thing, and I got candidly after doing

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that for probably three or four years,
I’m like, you know what?

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I’m done with computer service and repair,

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because everybody wants to call
you on the weekend for free.

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How do I install something?

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Can you change my modem for free?

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I have a new appreciation for mechanics.

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Let me put it that way.

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So it’s so funny because I met you when I

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had Dock Jams printer repair,
and I remember we started adding

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drop off printer repair for whatever
machines people had, printer wise,

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COPYWISE, all that stuff from their home,
which a lot of that was inkjet stuff.

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And we started to have to charge people

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a nut when they would first drop it off
because we look at it and tell them, hey,

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you need this $50 part or whatever,
and they’re like, Just keep it, right?

[00:15:08]
Like they’re doing us a favor.

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Keep my trash, and I won’t charge
anything for this broken printer.

[00:15:15]
And so then we had
to start charging people.

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And I remember we had, I don’t know,

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it was $29 or something like that
as the fee for us to look at it.

[00:15:24]
And then if they chose to repair it,

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beyond that, it was quoted
and all this kind of stuff.

[00:15:28]
And I remember this person complaining
about $29, and I just kept thinking, like,

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how much would it have to be
for you not to complain?

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And I couldn’t come up with a number
that was anything other than zero, right?

[00:15:44]
Because apparently we
work for free, right.

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People don’t.
Well, I think there’s a reality, right?

[00:15:50]
And if you’re a general consumer,

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you don’t really think about
the guy on the other side of it.

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Sometimes you do,

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and that’s where you choose to take
your dollars and do business.

[00:15:59]
But I think most people think that small
business owners, we make so much.

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Money, yeah, got seven yards,
yachts parked out back, right?

[00:16:09]
Helicopters on everyone.

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The reality is that most small business
owners will never have a liquidity event.

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They will never have an opportunity

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to cash out or have their
life’s work appreciated.

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They’re going to work for less than what

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they could have likely made
in the private sector.

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They are going to take more risk

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and responsibility over the course
of their career for capital and play.

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They’re going to mortgage their
house for their business.

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They’re going to hire employees.

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Those employees are going to come in and
ask for more, which is totally fine.

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You’re going to take home the stress
on the day to day,

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and yet we’re going to continue to show
up, and we’re going to do it tomorrow.

[00:16:48]
Because you know what?
Gosh, we like it and we love it.

[00:16:52]
There’s not one small business owner

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that does not spend more time supporting
their community through nonprofit

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association and board chambers
of commerce employing people.

[00:17:01]
And you know what?
This is where you hear the stories

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of small businesses is that people get
sick or they have some kind of chronic

[00:17:07]
illness, and they don’t
throw them off the payroll.

[00:17:09]
They continue to pay them.

[00:17:11]
They do the right thing.

[00:17:13]
And those are the stories
that are sold and heard.

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And so we forget how tough it is
to be a small business owner.

[00:17:21]
I have this conversation
with my dad all the time.

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He goes, I don’t understand
why that’s so expensive.

[00:17:26]
I’m like, well, clearly you
don’t have to pay anybody.

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My time has value in it.

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And so am I generous with my time?
Yes.

[00:17:36]
To the folks in my circle,
will I always give time to them?

[00:17:40]
I want to try to be
the best guy that I am.

[00:17:42]
But the reality is there’s 25,

[00:17:46]
30 people that depend on what’s
going on here, plus my customers.

[00:17:49]
Customers.

[00:17:49]
For some of the mission critical pieces
that we do,

[00:17:53]
you got to stay focused
and you got to prioritize.

[00:17:56]
You got to deliver.

[00:17:56]
And sometimes that means I don’t get to go
have the fund that you get to go have.

[00:18:01]
We don’t think about that stuff.

[00:18:02]
You can’t put dollars on what makes
all this stuff work for everybody.

[00:18:06]
It’d be difficult.
Very difficult.

[00:18:09]
Yeah.

[00:18:10]
Well, no, I mean, just think about it.

[00:18:11]
The reason that you put that $29
on there is you don’t want to get stiff.

[00:18:14]
But number two, you’re trying to screen

[00:18:16]
out the people who aren’t serious
about dealing with the problem.

[00:18:18]
Yeah, we’re putting a very
low barrier to entry.

[00:18:22]
So you’re not interested
in spending $29 on your machine?

[00:18:25]
We’re not interested in looking at it.

[00:18:27]
Yeah, I was really uncomfortable

[00:18:30]
with that early on,
and today I’m significantly more

[00:18:32]
comfortable putting barriers of entry
in because I’m willing to give you a lot.

[00:18:36]
And I believe in the give get.

[00:18:38]
I don’t believe in one
sided relationships.

[00:18:41]
Agree.

[00:18:42]
You know, it’s interesting you say that,
because I have the call answering service.

[00:18:47]
Right.
Communication business.

[00:18:49]
Just like every business, I mean, deep
down inside is communication business.

[00:18:52]
And there are some clients where you’re

[00:18:54]
just like, all we need you to do is
respond to this email and tell us yes or

[00:18:58]
no on this one thing that we
had a caller ask about.

[00:19:01]
It’ll take you 5 seconds and we
can’t get that response.

[00:19:04]
And we’re like,
we feel if you just

[00:19:09]
would treat us with a little bit more
respect, everyone would be happier.

[00:19:13]
Your clients would be happier.

[00:19:15]
You would be happier.

[00:19:16]
We would certainly be happier.
Yeah.

[00:19:19]
And it would be win win win
win all the way around.

[00:19:21]
But instead, you ignore the email or it
gets lost in your thousands or whatever.

[00:19:27]
It’s tough.
It’s tough.

[00:19:30]
You know what?

[00:19:31]
There are not perfect answers
to any of this stuff.

[00:19:34]
No, not necessarily.

[00:19:36]
Not all of it, anyways.

[00:19:38]
Obviously, in my world,
there’s perfect answer.

[00:19:39]
Just do it.

[00:19:40]
I have them all right.

[00:19:46]
But no, like I said,
I love building organizations.

[00:19:50]
I love doing this.

[00:19:51]
I love hitting my head against
the wall and frustration.

[00:19:55]
It feels so good when you stop.
Right?

[00:19:57]
Well, this is what was fun.
I’ll give you an example.

[00:20:00]
This is a little bit of tangent because
I know we’re going chronologically.

[00:20:04]
After I did the service repair business,

[00:20:07]
I launched a website
development company all.

[00:20:09]
Right, now what year ballpark?

[00:20:10]
Just roughly this is probably five six.

[00:20:14]
Yeah, probably five six, yeah.
Okay.

[00:20:17]
So you’re talking essentially roughly

[00:20:19]
a decade after the Internet
really got going.

[00:20:24]
Yeah.

[00:20:25]
So still relatively useful.

[00:20:29]
AOL was probably still a household name.

[00:20:32]
Oh, yeah.

[00:20:34]
Yahoo was still the place to go
to find what you’re looking for.

[00:20:37]
I think I still have a hotmail.

[00:20:39]
Address someplace, and I do as well.

[00:20:41]
And that’s how you know
someone’s a certain age.

[00:20:44]
Right, exactly.

[00:20:47]
It’s funny because I see an AOL and I’m
like, oh, you’re older than me,

[00:20:51]
but then I see Gmail and I’m like, oh,
little tight, what’s you got going on?

[00:20:56]
Yeah, no, it’s 100% it right there.

[00:20:58]
But it’s funny,
it’s just put in context for the people

[00:21:02]
that don’t necessarily
know or want to remember.

[00:21:05]
Think where were smartphones back in 506?
Right.

[00:21:08]
Not exist.
Nonexistent.

[00:21:10]
So you didn’t have to worry
about responsive websites?

[00:21:12]
No.

[00:21:14]
It might have had the BlackBerry
starting at that time.

[00:21:17]
All right.

[00:21:19]
And you were using things like
Dreamweaver and Photoshop.

[00:21:22]
WordPress wasn’t a thing.

[00:21:25]
Actually, WordPress was just
starting to become a thing.

[00:21:27]
Just starting.
Okay.

[00:21:29]
As a blog foundation.

[00:21:31]
Blogging software.

[00:21:32]
Not a website software, but blog.

[00:21:36]
Just give some foundation for

[00:21:38]
how old you are and how long ago that was
how things were a little bit different.

[00:21:44]
I didn’t mean that to be mean,

[00:21:45]
I just mean to say it’s a different game
back then, right, than what it is now.

[00:21:52]
Oh, it’s 100% different game.

[00:21:54]
So you know what got me started in this is

[00:21:56]
when I was in high school,
I did C Plus Plus in computer science.

[00:22:00]
Oh, wow.
All right.

[00:22:02]
So I had a coding background,
and I knew PHP,

[00:22:07]
and so I could do databases,
which actually got us into WordPress

[00:22:11]
sub 1.0 WordPress deployments and doing
theme customizations and so on.

[00:22:17]
To your point, we would link in Weaver so
we could update the PHP files in there.

[00:22:24]
And this is when we would create

[00:22:25]
the templates, like in Photoshop,
and we’d send a version over

[00:22:28]
to the customer
for a long time, for probably five or six

[00:22:33]
years, we had to split portfolio of people
who had these HTML only templated sites

[00:22:39]
that had to be updated
solely in Dreamweaver.

[00:22:42]
Oh, wow.

[00:22:43]
And we had people who had pushed
into the WordPress framework.

[00:22:48]
All right, even back then.

[00:22:50]
Even back then, yes.

[00:22:52]
We were pretty early into WordPress,

[00:22:54]
and actually when we had Argus Ventures,
we were doing our own custom plugins.

[00:23:01]
So we were kind of ahead
of the time doing that.

[00:23:05]
We did transaction software.

[00:23:06]
We’ve had kids people on the university
campus, and then we linked, I think,

[00:23:11]
seven or ten different vendors
on State Street together using swipes and

[00:23:16]
mobile devices and card readers, and so we
were monitoring the transactions there.

[00:23:20]
So we deployed that, and that was like
some really innovative software we did.

[00:23:23]
We did some rental software.

[00:23:24]
So being able to rent out apartments
and doing apartment management.

[00:23:28]
We did some ecommerce software.

[00:23:30]
These are all custom themes that we built.

[00:23:34]
So you built these for individual clients?

[00:23:36]
Or is this like the rental software?

[00:23:37]
You just like, hey, we built them.

[00:23:39]
Landlords are going to need
this kind of thing.

[00:23:41]
We built them for individual customers.

[00:23:43]
And what we do is we license them.

[00:23:44]
So our real estate software was called

[00:23:46]
Treehouse, and we actually
did some real estate stuff.

[00:23:51]
We called it what was it called?

[00:23:55]
There’s a real estate particular
piece of real estate software.

[00:23:59]
IDX real estate.

[00:24:00]
It was the Argus IDX product where you
could tie into the South Central,

[00:24:04]
Wisconsin, MLS, and we’d be able
to put it on your WordPress site.

[00:24:07]
So we had all this bundled into a custom
WordPress plug in is what we did.

[00:24:12]
And so, yeah, we went plugging crazy

[00:24:14]
because everything was
a customizable plug in.

[00:24:16]
All right.
Are you making money?

[00:24:18]
We were making money, yes.

[00:24:21]
This is what happened in 2008.

[00:24:23]
We were used to sell websites,
$1,300, maybe two grand.

[00:24:29]
And so in 2008,

[00:24:32]
we raised our price to like five grand,
seven grand, something like that.

[00:24:35]
Baseline price to get in.

[00:24:37]
Instead of what we did was instead
of trying to collect it all up front,

[00:24:42]
we said, give us twelve
to 24 monthly payments.

[00:24:46]
Oh, wow.
Okay.

[00:24:47]
All right.

[00:24:47]
So they’re essentially financing
the bank of Argus Ventures.

[00:24:52]
That’s exactly what we did.

[00:24:55]
That’s what wrote us through
the recession of eight.

[00:24:58]
All right.

[00:24:59]
Actually we came out on top in that
recession and we had more customers.

[00:25:03]
We had increased our price point
and we had stabilized our cash flow.

[00:25:09]
Adamable yeah, I mean, that was a really
big time for me, especially if.

[00:25:14]
You’Re in the real estate world.

[00:25:19]
We did some real estate, we did more on
the commerce and general marketing side.

[00:25:23]
Got you.
Okay, so it wasn’t exclusive to ideas.

[00:25:25]
We weren’t exclusive in that.
No.

[00:25:27]
Insane.

[00:25:28]
If I was exclusively one where
I’m crazy but not insane.

[00:25:36]
Totally fair.

[00:25:37]
So when you would license, let’s just say,

[00:25:39]
for example, that real estate product just
keep going down that road,

[00:25:42]
some client would come to you and they
say, hey, I want a product that does this.

[00:25:47]
And you say, great,
we’ll build it for you.

[00:25:50]
But once we get this built and we figure

[00:25:53]
out that it’s cool,
we’re going to also offer it to other real

[00:25:56]
estate people or other
insert industry here.

[00:25:59]
Yeah.
So one of the positions that we always

[00:26:01]
took is that we will grant you a royalty
free license to the code that we use

[00:26:05]
for your site, but we will
always retain ownership over it.

[00:26:09]
And we in no way, shape or form entered

[00:26:11]
into non compete agreements
with our customers.

[00:26:13]
All right,
so essentially they would get a deal ish,

[00:26:20]
I imagine by coming to you with the idea,
if they.

[00:26:23]
Came with an idea.

[00:26:24]
Otherwise, if we had it in our inventory,
we could just pull it together.

[00:26:27]
It’s like, great, this is what it costs

[00:26:28]
on a TNM basis to put it
together and maintain it.

[00:26:31]
All right, got it.

[00:26:33]
So how long did you run
with that business?

[00:26:35]
I did that until 2013.

[00:26:39]
It was a little while.

[00:26:44]
We had a lot of fun.

[00:26:45]
And so I think toward the end

[00:26:46]
of that business,
one of the pieces that we came out

[00:26:48]
with was something we call
the Argus Client Center.

[00:26:52]
And so along the journey of creating all

[00:26:54]
these small plugins,
I kind of said, you know what?

[00:26:57]
For what you look in Ecommerce or

[00:27:00]
reoccurring product sales and what you
look at for paying your bill and tracking

[00:27:03]
this, and if you look at what you’re doing
in education or whatnot,

[00:27:08]
there’s a bunch of commonality in how
these businesses are conducting.

[00:27:11]
You call the functions
different by industry.

[00:27:13]
And so I said, Why can’t we build a common
tree or a common data structure to kind

[00:27:17]
of store everything and then have
basically different flavors?

[00:27:23]
And so one of the areas that we found some

[00:27:25]
real growth opportunity was
the education space, all right?

[00:27:31]
And so we built out
a package of education.

[00:27:35]
We sold it, and I was like, Great, maybe
I can make this a subscription product.

[00:27:39]
So this is GSS subscription
for becoming, like, the sex.

[00:27:44]
I’m like, Great, I’ve got an online suite

[00:27:46]
of education of a platform
that I can sell.

[00:27:49]
So we tried to sell for $199
a month, all right?

[00:27:53]
Nobody buys it.

[00:27:55]
People like, hey, this is what we do.

[00:27:57]
They’re, like, looking at me like, kid,

[00:27:58]
you have no clue what
you’re talking about.

[00:28:01]
Let me just back up a step
so I understand this, right?

[00:28:04]
So this is a platform for the education,
for the courses, so to speak.

[00:28:11]
But you aren’t creating
the courses, is that right?

[00:28:14]
No, we don’t create the courses.

[00:28:15]
We just do the technology.

[00:28:16]
So this is for people that create their

[00:28:18]
courses, videos,
PDFs, whatever forms, tests they use.

[00:28:23]
Your platform, people can pay.

[00:28:24]
I imagine there’s a pay wall of some kind.

[00:28:27]
I would say that we came up with, like,
a one click registration because this is

[00:28:31]
when we learned that people use
education as a source of lead.

[00:28:34]
Gen.
All right, sure.

[00:28:36]
I never thought about that.

[00:28:38]
But we had a customer that we sold our

[00:28:40]
first instance to, which is what
drove us to build the software.

[00:28:44]
My second instance was trying
to sell this for $199 a month.

[00:28:47]
Nobody buys the damn software.

[00:28:52]
By second instance of selling
the software, I sold for $100,000.

[00:28:58]
Wow.

[00:29:00]
Tell us about that.

[00:29:01]
Now we’re talking money with commas.

[00:29:04]
As it turns out,
I separated myself from the deal.

[00:29:07]
I was working with an associate who was

[00:29:09]
helping, and he is significantly
more aggressive than I was.

[00:29:15]
But what I learned out of this experience
was the perception of value.

[00:29:22]
Here we go.

[00:29:23]
What you do.

[00:29:25]
Nobody will value it.

[00:29:26]
And so what I learned in this space is

[00:29:28]
that in the online Ed
space, you’re a joke.

[00:29:31]
If you’re like sub ten K.

[00:29:33]
Oh, interesting.

[00:29:35]
Because you were priced lower,
people didn’t even consider you.

[00:29:39]
That’s right.
All right.

[00:29:41]
And so once I realized this so once I had
this first experience and I started

[00:29:46]
to learn and understand it,
the website stuff became really

[00:29:51]
increasingly less interesting,
and it just seemed boring because.

[00:29:55]
It’S low dollar amount, and you got.

[00:29:58]
To deal with people.

[00:30:00]
One of the things that you understand

[00:30:01]
that as you become a business owner is
that creating a repeatable process

[00:30:06]
and everything you do is really
is the opportunity for growth.

[00:30:11]
So that’s how you scale.

[00:30:12]
It’s how you grow, whatever.

[00:30:14]
Systems, main systems,
systematize, everything.

[00:30:17]
Yeah, exactly right.

[00:30:20]
And you got to have the passion.

[00:30:22]
And if you don’t have a passion for doing

[00:30:24]
a new project or taking on some of this
stuff, it’s hard to get out of bed.

[00:30:30]
Right.
You’re looking forward to new headaches?

[00:30:33]
Yeah.
But you know what?

[00:30:34]
I had my big sale here.

[00:30:37]
Like, wow, this is cool.

[00:30:38]
Let’s go boil the ocean.

[00:30:44]
I never heard that phrase before.
That’s awesome.

[00:30:46]
I love the ocean.

[00:30:49]
Go run, man.

[00:30:50]
Yeah.

[00:30:51]
So we go back to our met Ed customer.

[00:30:54]
They’re getting ready to launch
at a show in Chicago.

[00:30:57]
We were talking about
the victories that we had.

[00:30:59]
We have a good amount of cash in the bank.

[00:31:04]
My attention is clearly drifting,

[00:31:06]
and so our portfolio is being managed
by predominantly, somebody else.

[00:31:09]
I’m dealing with the stuff that really
makes Dan happy and interesting and shiny.

[00:31:14]
So I go to Chicago.

[00:31:15]
I go to this trade show,

[00:31:17]
and
I kid you not, 53,000 people at this trade

[00:31:23]
show is a healthcare trade
show in the imaging space.

[00:31:27]
It’s just after Thanksgiving.

[00:31:29]
If you’ve ever been to McCormick Center,

[00:31:31]
it’s the North Hall,
the South Hall and the Lake hall.

[00:31:34]
That’s big.
McCormick hall is huge.

[00:31:36]
Small town.

[00:31:38]
I have never seen medium sized town.

[00:31:39]
I have never seen a trade show booth the
size of a city block that I grew up on.

[00:31:45]
All right, there it was, the GE booth,

[00:31:47]
and the next to the GE
booth was a Siemens booth.

[00:31:50]
And I’m like, okay,
I’m clearly in the wrong business.

[00:31:54]
They got a couple of bucks
thrown around there.

[00:31:58]
Their booths were more than I had
probably made in my entire life.

[00:32:01]
Sure.

[00:32:04]
But I volunteered to work with this
Meta customer who was there.

[00:32:09]
They were debuting their site and our
software, and I said, you know what?

[00:32:13]
I will happily work the booth.

[00:32:14]
I will show them how our software works.
I am your guy.

[00:32:17]
So they made the content,
we made the software.

[00:32:20]
And so when I wasn’t working the booth,
I just decided to walk the show floor.

[00:32:25]
And so one of the things that you can do

[00:32:27]
when you have nothing at stake because
you can ask a lot of dumb questions.

[00:32:32]
There’s no risk.
Who cares?

[00:32:34]
These guys will never meet me again.

[00:32:36]
Let me just ask any basic
dumb question I possibly can.

[00:32:39]
And who do they have worked in the booths?

[00:32:41]
Right?

[00:32:42]
It’s probably not the CEO
of GE hanging out there.

[00:32:45]
Definitely not.

[00:32:46]
Definitely not.

[00:32:48]
But it wasn’t just the booth books.

[00:32:49]
It’s just like people
walking up and down aisles.

[00:32:52]
What I was doing, like, get some feedback.

[00:32:54]
And so what I had discovered at the end
of so this is a very long trade show.

[00:32:58]
It’s a full week trade show.
Yeah.

[00:33:01]
So you’re up at like six,
you’re going to bed at like, midnight,

[00:33:04]
you’re drinking until all
hours of the night.

[00:33:08]
That sounds more exciting on the front
end than it is on the back end.

[00:33:11]
Now, it depends on your age
and typical trade show, right?

[00:33:14]
No, it’s probably like 25,
26, 27 at this time.

[00:33:17]
You’re having a good time?

[00:33:18]
I was having a great time,
but what I discovered after reading

[00:33:23]
a bunch of notes for a week is
that the product that my customer built

[00:33:27]
was not the product
that the market wanted.

[00:33:30]
Well, that’s a light bulb moment
or a record scratch moment.

[00:33:34]
Maybe they had built a product

[00:33:37]
for yesterday’s imaging technologists,
not tomorrow’s healthcare professional.

[00:33:41]
All right.

[00:33:43]
I spent a lot of time on the ground

[00:33:44]
talking to people,
and so I came back with this whole list

[00:33:49]
of recommendations on features and things
that we should put in the platform.

[00:33:52]
And I said, I’m still pretty arrogant, but
I was really more arrogant at the time.

[00:33:58]
And I said, Folks,

[00:34:00]
I have a bank account full of cash and I
have a list of ideas here and I think I

[00:34:06]
might be able to sell
this better than you.

[00:34:09]
You should bring me in for a third.

[00:34:11]
I’ll throw some cash in and let’s go
implement these changes and let’s go sell.

[00:34:15]
They’re like, Whoa, whoa, whoa, hang on.

[00:34:19]
We asked you to work our booth,
not take over the world, right?

[00:34:22]
You don’t know what you’re talking about,
okay?

[00:34:27]
And so we hung out with another 1218

[00:34:29]
months and they ended
up going upside down.

[00:34:31]
Oh, no.
All right.

[00:34:33]
Ended up buying that company for a dollar.

[00:34:36]
You bought that company?

[00:34:37]
I bought that company for a dollar, yes,

[00:34:38]
because they had a bunch of content
that they had developed.

[00:34:41]
All right, I was just going to ask,
what does that dollar get you?

[00:34:43]
Because even though a dollar is cheap,

[00:34:45]
if you’re buying gum on the street,
it’s still not worth it, right?

[00:34:48]
Yeah.
So that dollar got me.

[00:34:49]
I bought the company,

[00:34:50]
I got rid of his partner,
so I wrote his partner literally a check

[00:34:54]
for like $0.40. Then I gave him
a job and I said, Come work for me.

[00:35:01]
All right, you know what?

[00:35:03]
When we offered them both jobs
and at the end of the day,

[00:35:05]
we could not come to terms with his
minority partner and which is fine.

[00:35:09]
That happens in business sometimes.
Sure.

[00:35:12]
Not everybody gets along.

[00:35:13]
It’s all good.

[00:35:15]
We went back to that same trade show
the following year,

[00:35:17]
and I walked away with our contract
from GE Healthcare for $100,000.

[00:35:23]
They signed at the trade show?

[00:35:25]
No, they signed just after the trade show,

[00:35:27]
but we got a good part of the deal
negotiated at the trade show.

[00:35:30]
Got you.

[00:35:30]
Okay, so you met the right
people there, right?

[00:35:32]
Hands got shook, all that jazz.

[00:35:34]
Yes.

[00:35:37]
And I’m like, huh?

[00:35:40]
We got some action going into this.

[00:35:44]
And so we happen to be in the same space,

[00:35:47]
the same office building that
startup accelerator was in.

[00:35:52]
We had hired a chief marketing officer
just before we went to the trade show.

[00:35:56]
And he goes, have you
raised capital before?

[00:35:59]
And I said, no idea what
you’re talking about.

[00:36:03]
This is all funded out of Dan’s
pocket and everything else.

[00:36:05]
He goes about raising capital.

[00:36:09]
And so at that point,

[00:36:11]
I decided, test some water,
talk to some docs who want to build

[00:36:16]
a system to do online education
and integrate some EHR components.

[00:36:22]
This is all happening at the same time.

[00:36:23]
Talk to them because it’s
super interesting to Dan.

[00:36:27]
This is interesting for Dan, all right?

[00:36:30]
And they’re like, yeah,
how much would that cost?

[00:36:33]
And I throw out some astronomical figure

[00:36:36]
and they’re like, okay,
we’ll write you a check.

[00:36:39]
So I finished this coffee with the CMO,

[00:36:41]
that guy who’s telling me
I should raise capital.

[00:36:44]
So I go back to these docs and I’m like,

[00:36:45]
hey, how would you guys like
to be part owners in the company?

[00:36:48]
We’re going to raise some capital.

[00:36:50]
Why don’t you guys be my seed investors?

[00:36:53]
I ended up negotiating terms.

[00:36:56]
I mean, I forget what it was like,

[00:36:57]
probably three, three and a half
million dollar pre money.

[00:36:59]
I’m like, Why don’t we do that?

[00:37:00]
Why don’t you guys throw this in?

[00:37:02]
We’ll call it good.

[00:37:03]
And so we ended up going in and
raising 200 grand off the bat.

[00:37:10]
Call my attorney.

[00:37:11]
Like, hey, I need a referral
to somebody who does venture capital.

[00:37:14]
Do you have any idea who does it?

[00:37:15]
He goes, yeah, we got
somebody in our firm.

[00:37:17]
Talk to their attorney,
talk to his referral and his firm.

[00:37:19]
He goes, you negotiated all that?
I’m like yes.

[00:37:22]
I’m like, do you know
what you’re negotiating?

[00:37:24]
Like, not a clue.

[00:37:26]
He goes, well,
you negotiated decent terms.

[00:37:28]
I’m like, cool.
So we got that signed paper,

[00:37:31]
did a convertible note,
and we apply for this start up accelerator

[00:37:36]
now, but for this CMO that
I had forgotten about.

[00:37:40]
I hadn’t thought about this forever

[00:37:42]
until you maybe tell this story, I would
never thought about raising capital.

[00:37:46]
And so we apply to this accelerator.

[00:37:48]
Program and we get in, all right?

[00:37:54]
And they ended up writing another
$100,000 check or $70,000.

[00:37:57]
And I think we had another

[00:37:59]
following check for like,
50 or 70 or something like that.

[00:38:03]
And so we did a twelve
week accelerator program.

[00:38:06]
We got to meet with some mentors whom I
talked to today and help shape my world.

[00:38:12]
And we walked out of there
raising 1.2 million.

[00:38:15]
Wow.

[00:38:16]
And then we utterly failed.

[00:38:18]
But that’s a whole different chapter.

[00:38:23]
We were really successful.

[00:38:27]
Again, this is where arrogance
really hurts you as an entrepreneur.

[00:38:30]
I was so arrogant and people
told me that I was so special.

[00:38:35]
I.

[00:38:36]
Was going to part
the Red Sea at some point.

[00:38:38]
All right.

[00:38:39]
As a business owner,
you got at least a little chunk of ego

[00:38:42]
because you have to believe that you
can do it better than it has been done.

[00:38:47]
And if you didn’t have an ego,
you wouldn’t have that belief.

[00:38:52]
I think that’s true.

[00:38:55]
I try to have relatively few regrets

[00:38:58]
in life,
but about a year and a half after raising

[00:39:01]
that, we ended up having
to lay off like 20 people.

[00:39:05]
How many people did you have?

[00:39:07]
We probably had 25,
30 people at one point.

[00:39:11]
Programmers or what were they?

[00:39:13]
Developers, sales,
what we had in implementation or customer

[00:39:17]
support, yeah,
we deployed the capital very poorly.

[00:39:23]
So, James, let me tell you,
as an entrepreneur who has learned,

[00:39:27]
we raised so much capital and deployed it
so poorly, and this is what we failed

[00:39:31]
to recognize as business owners,
we get so high on our own supply,

[00:39:35]
sometimes we forget to go
back to the basics.

[00:39:38]
You know what, Candidly?
I surrounded myself.

[00:39:40]
This is my fault,
my responsibility right at the top.

[00:39:44]
That’s who you blame.

[00:39:45]
But I did not surround myself with people
that would challenge assumption or people

[00:39:52]
who had the thinking about how
we conquered business tomorrow.

[00:39:55]
But we’re always looking at how
business was done yesterday.

[00:39:58]
And so what I mean by that is like,

[00:40:00]
the world had changed and has changed
for us in the business community.

[00:40:04]
We’re so much of good quality sales,
regardless if their business to consumer

[00:40:09]
or business to business is built
around an inbound marketing apparatus.

[00:40:13]
So we don’t think about it today.

[00:40:14]
But when you look at a TikTok influencer

[00:40:17]
or an Instagram influencer,
and you’re looking at clothes that they

[00:40:20]
wear or how they dress or products they
use, that is all really soft marketing.

[00:40:24]
What that’s doing is that’s getting you

[00:40:26]
warmed up to receive
another marketing message.

[00:40:30]
And the second piece there is like,
you know what, we piled a half million

[00:40:33]
dollars into developing
software that was never used.

[00:40:41]
We didn’t finish it.

[00:40:44]
The two takeaways there are when you think
about making investments to grow your

[00:40:48]
business, number one,
you don’t need to build out software

[00:40:52]
that you haven’t tested or there
hasn’t been a demonstrated demand for.

[00:40:56]
And number two,
you don’t need to hire salespeople.

[00:41:00]
What you need to do is build a marketing

[00:41:01]
apparatus to bring a higher
qualified lead to your email box.

[00:41:05]
And once you have so many high
qualified leads in your inbox.

[00:41:08]
That’s when you bring on your next.

[00:41:10]
Sales guy, because then they have someone
to chase versus just knocking on doors.

[00:41:15]
Hire a good inside sales guys,
the next piece there.

[00:41:18]
And if you’ve done a good job building

[00:41:19]
an inbound apparatus, you’ve made
your life significantly easier.

[00:41:23]
All right, so the three regrets.

[00:41:26]
Number one, I had to lay off 20 people

[00:41:29]
and hurt them and negatively
impacted their family.

[00:41:32]
And that’s something
that bothers me to this day.

[00:41:35]
You know?

[00:41:36]
Number two, I should have deployed
the capital

[00:41:39]
building an inbound infrastructure because
that would have created a more solid

[00:41:43]
infrastructure for growth
in the long term.

[00:41:45]
And number three,
I would not have overbuilt technical

[00:41:48]
infrastructure that we didn’t
actually know that we needed.

[00:41:51]
All right, so it’s interesting,

[00:41:54]
I’m hearing somewhat of an irony
from the first time.

[00:41:56]
You go to McCormick and you’re like, hey,
you guys are building this thing

[00:41:59]
for the past, and you ended up making
a similar mistake, it sounds like.

[00:42:04]
Yeah.
Everybody gets blind.

[00:42:06]
Sure.
Oh, yeah.

[00:42:08]
I would love to say that I never wasted

[00:42:10]
a dime in business, but what is
the definition of entrepreneurship?

[00:42:14]
It’s making enough money
to afford your mistakes.

[00:42:16]
I even heard that one, but I do like it.
Something like that.

[00:42:19]
Yeah.

[00:42:21]
But, you know, today we
hit our low point in 1617.

[00:42:27]
And so I really struggled from owing
everybody money to having to pull myself

[00:42:32]
back together, to figuring out how
I’m going to make it all work.

[00:42:35]
And thankfully, today we’re back around.

[00:42:39]
We’ve got, between contractors and people

[00:42:43]
on our payroll, somewhere between 25,
30 people in our universe.

[00:42:45]
Today we started our second.

[00:42:48]
So

[00:42:51]
we’ve seen Altis kind of grow and become
still in the healthcare space,

[00:42:54]
and we’re doing some expansion work
into the general learning space.

[00:42:59]
Now we spin out of Altus,

[00:43:02]
which is SDM central, and so that does
share decision making tools.

[00:43:06]
So it helps patients and providers

[00:43:08]
understand preferences
for decision making.

[00:43:11]
We spun that out 18 months ago.

[00:43:13]
We did a half a million dollars last year.

[00:43:15]
We’ll likely do 1.2 million this year.
Oh, wow.

[00:43:18]
That’s growth.
Wow.

[00:43:19]
Yeah.

[00:43:21]
We hired a chief revenue officer this year

[00:43:24]
who is overseeing a lot of that growth,
which is helping me.

[00:43:27]
And
part of what makes the comeback possible,

[00:43:30]
James, is like,
I grounded out for a while

[00:43:36]
and you stopped spending money,
and I hit under rocks,

[00:43:41]
and I decided that at some point
you got to show your face again.

[00:43:46]
And then I hit a point in being

[00:43:49]
in business where I decided I was going
to move from being manager to leader.

[00:43:54]
All right.

[00:43:56]
And that in itself is a pretty
significant milestone for people.

[00:44:00]
Just to acknowledge it is a great step.

[00:44:03]
Some people make moves to accomplish it.

[00:44:07]
Huge step necessary.

[00:44:09]
I think what allows me to do what I do

[00:44:11]
today is because I was intentional about
making the step from manager to leader.

[00:44:18]
A lot of what I do now is
empower the people around me.

[00:44:24]
I don’t make every decision great or
I don’t make every best decision.

[00:44:27]
But what I try to do is kind of have some

[00:44:28]
value or some theory around
what we’re trying to do.

[00:44:32]
And I ask is it going to help
us in the short term?

[00:44:34]
Is this going to benefit the companies
and people in the long term?

[00:44:38]
Nice.

[00:44:40]
And the folks that we have around us I
think are doing a really good job

[00:44:44]
of stepping up and learning
how to make decisions.

[00:44:47]
Both decisions that I would support
and a framework that I would support,

[00:44:52]
but they don’t always make the decision
I would want them to make.

[00:44:56]
What’s super privileged is we’re going

[00:44:58]
to hire probably 1015 people in the next
couple of months and we’re very blessed.

[00:45:04]
We have maybe 75 applications that have

[00:45:06]
come in over the last week and a half,
two weeks in house people.

[00:45:09]
Or we’re talking remote somewhere.

[00:45:13]
Some people here in Madison
we will likely hire nationally.

[00:45:18]
So we are deploying a new program
this year called Altis level up.

[00:45:23]
A couple of things that we’re
doing a little differently.

[00:45:25]
So we found a success of SDM Central.

[00:45:29]
Just amazing.

[00:45:30]
We have decided to be really intentional
about kind of grooming the talent pool

[00:45:34]
that we want, taking them through
the process that we want.

[00:45:37]
And the way that we start to look
at success in the long term is we would

[00:45:41]
like to make investments
into other startups.

[00:45:43]
I know I would like to make investments.

[00:45:45]
I think where people come short and it’s

[00:45:47]
not necessarily ideas but finding
the resources and not necessarily money,

[00:45:51]
but like the people resources
and the culture and the mentality.

[00:45:54]
And so what where all this is going

[00:45:57]
in the long term is being really
intentional and teaching people how to

[00:46:03]
what’s expected in a start up and fast
paced environment,

[00:46:07]
establishing a basic level of knowledge
and saying hey, work in our departments.

[00:46:10]
If you come up with an idea that we think
we can launch into a business or do kind

[00:46:15]
of an MVP for, we’d love
to look at doing it with you.

[00:46:17]
And if we can spin it out
into a business, we will.

[00:46:21]
Okay, next year we are doing our first
kind of like MVP of this model right now.

[00:46:27]
We had an intern that worked
with us for two years.

[00:46:30]
We used to go on to the table and do

[00:46:33]
stock, comparing stock picks and
we were all pros, right?

[00:46:38]
Yeah, we all are.

[00:46:40]
So as his last project working for us,

[00:46:43]
we decided to do a special project and so
he built some software enabled trading

[00:46:48]
software or some software to do
software enabled trading.

[00:46:51]
And we decided that we were going
to build it out and do a company.

[00:46:57]
So that was kind of the framework.
And then we said, well,

[00:46:59]
we should be really intentional
and let’s make this a process,

[00:47:03]
and if that’s a path for growth for people
that are in our universe,

[00:47:07]
let’s support that because we want
that talent to stay in our universe.

[00:47:10]
If we can keep that,
that will help the portfolio at large

[00:47:15]
and we want people to know
that there’s a future with all this.

[00:47:19]
Got you.
So you have some work essentially to keep

[00:47:22]
them going while you figure
out what the next step is.

[00:47:25]
That’s right there’s.
Work with us.

[00:47:27]
And because we’re doing so much
on the training up front that as you build

[00:47:32]
a company, feel free to go into the altus
pool of talent and pick from that company.

[00:47:38]
Oh, interesting.

[00:47:39]
So not only are you investing cash
in them, you also have resources,

[00:47:43]
people and stuff like
that that you can help as well.

[00:47:46]
Absolutely, because people will just have
good ideas and we’d rather keep really

[00:47:50]
smart, bright people in our ecosystem,
and we’d like to figure out how to keep

[00:47:54]
them entertained versus
lose them to somebody else.

[00:47:58]
And I think to that end,

[00:48:01]
we recently did a joint partnership
with two other guys,

[00:48:04]
but we’re launching our first
accelerator and incubator programs too.

[00:48:08]
And so the long term ability here is to be

[00:48:10]
able to support the portfolio companies
that go through those programs and be able

[00:48:15]
to help staff them
and put talent in there.

[00:48:21]
I’m going to talk about
your feelings, Dan.

[00:48:26]
Let’s go back to when you had to
let 20 people know.

[00:48:31]
Funny story, you don’t have a job anymore.

[00:48:34]
Times aren’t going so well here.

[00:48:36]
Is that you that had to have those
conversations, or was that some other

[00:48:40]
employee that you had that had
to have those conversations?

[00:48:43]
I put everybody in one room.
Okay.

[00:48:46]
All 25?

[00:48:48]
Yeah, we had a big room.

[00:48:49]
All right.

[00:48:51]
You got to pay for your own lunch today.
Yeah.

[00:48:54]
Or however you did.
Okay.

[00:48:56]
Well, it started off where I thought we’d
be getting an investment, so I said, guys,

[00:49:01]
it’s going to be likely that we
are going to be stopped work.

[00:49:09]
We are likely not going to close

[00:49:10]
on an investment here, and we’re
going to have to take a pause.

[00:49:14]
Now, most of these people that were hired,

[00:49:17]
did they know that you were riding on
investment cash rather than profit?

[00:49:24]
No, I don’t think so.

[00:49:26]
I think people thought we were.

[00:49:28]
I think they knew that we
take an investment cash.

[00:49:30]
And I think this is actually a failure
in my leadership at the time,

[00:49:34]
is really being accurate and portraying
I did not do a good job of communicating

[00:49:40]
with the people that worked
for us where we were.

[00:49:42]
All right.

[00:49:43]
And a little bit about what I call like
heroism or saviorism is that I wanted

[00:49:51]
to protect people from the bad
news and only share the good news.

[00:49:57]
Only the rainbows, never the storm clouds.
Right, right.

[00:50:00]
So I internalized a lot of the bad news

[00:50:02]
and never shared and always
share the good stuff.

[00:50:04]
All right.

[00:50:05]
I think if I had to do it again,
I think it would be more on me to be more

[00:50:13]
transparent about our
successes and failures.

[00:50:17]
And I think that I could have benefited,

[00:50:19]
and we collectively would have benefited
greatly had if I had been more candid

[00:50:23]
about the failure and asked people for
their thoughts on how we could solve it.

[00:50:28]
All right.

[00:50:30]
Do you feel like your crew at that time
would have been able to help you?

[00:50:37]
I would say one thing,

[00:50:40]
and I value this about the teams
that I have today, too, sometimes.

[00:50:43]
Do they always have the business savvy or

[00:50:45]
sophistication to make a statement,
maybe, or to solve the problem?

[00:50:49]
No.

[00:50:50]
But what is always of value is that
they will put an idea to challenge

[00:50:55]
an assumption that says,
I wouldn’t have approached it that way,

[00:50:59]
but maybe if we change this around,
have this conversation, this can help us.

[00:51:03]
Does that make sense?

[00:51:04]
Yeah, solving a problem makes sense, sure.

[00:51:08]
Yes.

[00:51:10]
And the other things that we make,
the situation is really complicated,

[00:51:14]
but the other day, the situations are
not as complicated as we make them.

[00:51:18]
They’re about as complicated as being out
on the schoolyard and being

[00:51:21]
on the playground and wondering if you’re
going to get into a fight or not or

[00:51:24]
figuring out if somebody’s
going to break up.

[00:51:27]
It’s interesting you say that, right.
Because it’s just like perception

[00:51:30]
of value, the perception of problems
and how deep they go is very similar.

[00:51:36]
Right.
They’re rarely based on logic.

[00:51:40]
Usually when I apply logic, I fail.

[00:51:44]
Emotional decisions all the way.

[00:51:47]
People are very emotional,
people universally, yeah.

[00:51:52]
Extremely fault.

[00:51:54]
Yeah, I’m guilty of that, too.

[00:51:55]
It’s like, Dude, I’m not doing business

[00:51:56]
with such and such because
he brought me ten years ago.

[00:52:00]
All right?
I have been that guy.

[00:52:02]
I’m sure people are
that person to me today.

[00:52:06]
I guess I don’t walk into a Best Buy
very often because of a 56K modem issue.

[00:52:15]
Well, see, there you go.

[00:52:19]
Horse and buggy days or whatever that was.

[00:52:23]
But that’s where a lot of this stuff comes

[00:52:25]
down to, is, like, such and such
that this is, like, good, get over.

[00:52:28]
Go buy them a drink,
go pat stuff up, everything.

[00:52:33]
I’ve tried to be significantly more

[00:52:35]
intentional about that and try to take
a higher road and stuff during this time.

[00:52:40]
Again, I was so arrogant on some of this

[00:52:42]
stuff, probably because I was going
to my Steve Jobs phase or whatever.

[00:52:47]
Customers are idiots.

[00:52:48]
And you did this at the end of the day,
your customers aren’t idiots.

[00:52:51]
Your customers,
if you open your ear and you listen

[00:52:54]
to them and you ask them some questions,
we’ll tell you where we’re going.

[00:52:58]
Yeah.

[00:52:59]
I mean, in the end,
either they have business or they have

[00:53:02]
something in their life where they
need your product or service.

[00:53:04]
So they’re not dumb.

[00:53:06]
I think the tough thing,
and I was listening to this on a podcast,

[00:53:09]
but it makes a lot of sense,
is for us as businesses to recognize what

[00:53:12]
customers are saying and to be able
to kill the golden goose that got us here,

[00:53:17]
because it isn’t going to get
us to the next tranche.

[00:53:20]
Right.
Next thing.

[00:53:22]
Next thing.
Next thing.

[00:53:23]
Yeah, it makes sense.

[00:53:25]
I’ve developed, I think,
an ability to change and adapt.

[00:53:29]
Well, you have to, right?

[00:53:30]
It’s adapt or die.

[00:53:32]
I mean, ask the guy who is still working
in the same hardware store for 40 years.

[00:53:40]
80% of the profit he’s selling today are

[00:53:43]
the same product he was
selling 40 years ago.

[00:53:46]
The technology and Hammers
probably hasn’t advanced too much.

[00:53:49]
Right.
Tape measure.

[00:53:50]
Still a tape measure.
Yeah.

[00:53:53]
So I want to keep going down
the emotional road here, though.

[00:53:56]
Okay.

[00:53:57]
If you make me cry at the end
of this, I’m going to be.

[00:53:59]
Very it’s not that kind of podcast.
Very cool.

[00:54:02]
I just want to help people understand.

[00:54:04]
Right.

[00:54:05]
I’ve had to let people go.

[00:54:07]
I haven’t had to let people go
because business is doing bad.

[00:54:10]
I had to let people go because they were

[00:54:12]
causing business to be bad,
not doing their job.

[00:54:15]
I’ve never had to do any mass
layoffs or anything like that.

[00:54:18]
So lucky for me.

[00:54:20]
Right.

[00:54:22]
What I want to ask is the point when you
had to get rid of 20 people and then

[00:54:28]
to the point you are now,
what’s the timeline there?

[00:54:30]
Are we talking a few years?

[00:54:32]
About eight years.

[00:54:33]
Okay, well, that’s more than a few.

[00:54:35]
Okay.
2016.

[00:54:37]
2017.
So it’s 2023 now.

[00:54:39]
So seven years.

[00:54:40]
So the moment that everybody walks out

[00:54:43]
of that room after you just let go 80%
of your population there,

[00:54:49]
you take a deep breath,
sip of coffee or whatever like that.

[00:54:52]
What do you do when you go home?

[00:54:54]
I drink.

[00:54:59]
Don’t take advice from this guy.

[00:55:02]
So the next day, what was your
path that you saw for yourself?

[00:55:07]
Where did you see yourself going there?

[00:55:09]
You’re like, okay, I have to rebuild this
thing, or, hey, how are we going to close

[00:55:13]
up gradually, or what
was the thought process?

[00:55:16]
It was very diluted that we were going

[00:55:17]
to close on a $1.1 million transaction,
and I was being stalled by time.

[00:55:23]
Oh, you’re banking on the sale.

[00:55:26]
Yes, we were raising capital and closing
on a transaction simultaneously.

[00:55:32]
All right.
And when you’re talking transactions

[00:55:34]
that big, they typically
don’t happen overnight.

[00:55:37]
Not like buying a Big Gulp
or something like that.

[00:55:40]
No, they’re not.

[00:55:41]
I had just flown to

[00:55:44]
we were supposed to do a transaction
with this company in Alabama.

[00:55:48]
All right.

[00:55:48]
I just gotten back from Alabama, talked
to the investors, did the whole thing.

[00:55:53]
Everything should be set to close.

[00:55:56]
This is one thing that I
do not appreciate about some folks

[00:56:00]
in their negotiating styles,
is like, it’s always one more thing.

[00:56:04]
Oh, my gosh.

[00:56:05]
Wait till after Christmas.

[00:56:06]
Wait until after New Year’s.

[00:56:07]
Wait till after the third Tuesday.

[00:56:09]
It’s got a full moon.

[00:56:11]
It’s oftentimes something that has
no relevance to the actual decision.

[00:56:17]
It was always these small things.

[00:56:19]
And I’m like, man,
so we’re dying by 1000 cuts.

[00:56:22]
It’s literally like the end of June going
into, like, the holiday fourth year

[00:56:26]
or holiday fourth vacation where
I had to give this speech.

[00:56:31]
And I’m like,
yeah, this is, like, the worst thing.

[00:56:36]
Like, guys, I will get this problem
solved in a couple of weeks.

[00:56:39]
Bear with me.

[00:56:48]
It’s just one of the most horrible things.

[00:56:50]
I remember being so cash
poor at the time too.

[00:56:53]
I had made an investment in Exact
Sciences, which is a local company here.

[00:56:57]
They had just gone public before

[00:57:00]
their cancer diagnostic
drug was coming to market.

[00:57:04]
Trading at $5.0.60. That’s
what I bought it at.

[00:57:08]
Well, that’s a while ago.
Okay.

[00:57:09]
Oh, yeah.

[00:57:11]
And their stock shot up to $17.

[00:57:14]
I’m like, God, I got to liquidate this

[00:57:16]
because I need cash
to try to make a payroll.

[00:57:22]
That’s kind of like, how desperate
the situation was at the time.

[00:57:27]
So these deals didn’t close
this drug on for two or three weeks,

[00:57:32]
and then it was like,
great, everybody’s done.

[00:57:35]
Because there’s just no more money.
There’s no more money.

[00:57:38]
There’s no more money.

[00:57:39]
But we sell the phones on, and
slowly but surely, we ended up landing.

[00:57:46]
We had a couple of our products renew
at the time, which gave us some cash.

[00:57:50]
So we had a subscription business.
All right.

[00:57:52]
Annual.

[00:57:54]
Yeah, so they pay annually for us.

[00:57:55]
And so we had some September,
October subscriptions that paid.

[00:57:58]
So we got started to get
recapitalized there.

[00:58:01]
I talked to another one of my investors
who went through in, like, 50 or 70.

[00:58:04]
I had two investors actually had two
of them throw me another $100,000.

[00:58:08]
They did?
Yes.

[00:58:10]
After running through running,
we had no money on the ground.

[00:58:14]
We had no money for three months.

[00:58:16]
And then in November of, like,

[00:58:18]
16 this is all coming back
to me now on the timeline.

[00:58:21]
In November of 16, I had two
investors write me $100,000.

[00:58:25]
Wow.
Lifeline.

[00:58:27]
Yeah.
Between that $100,000 and, like,

[00:58:29]
getting the renewal business back, moving,
we went out, got an office,

[00:58:33]
brought another person on,
got everything moving again.

[00:58:36]
All right, so the original investors will

[00:58:39]
get that million,
half I forget what it was.

[00:58:41]
Is this still the same company?

[00:58:43]
So it’s coming back up and around and
surviving into thriving?

[00:58:50]
Yes.
All right.

[00:58:52]
Very cool.

[00:58:53]
And did you get to hire any of those 20?

[00:58:57]
No, majority did not settle on good terms.
All right.

[00:59:02]
They were really upset with me.

[00:59:06]
Ironically, one of them is
in the office here that we work in.

[00:59:09]
Oh, interesting.
Yeah.

[00:59:12]
Just no eye contact.
No.

[00:59:14]
You know what?
I don’t run.

[00:59:16]
There’s a problem.
I look at it and try to deal with it.

[00:59:20]
Right on.

[00:59:23]
Yeah, it’s tough.

[00:59:24]
It is very difficult to have a business
for any realistic length of time,

[00:59:29]
let’s say over ten years, where you don’t
piss off at least one or two people.

[00:59:34]
Yeah.
I mean, intentional or not, my Christmas.

[00:59:38]
Card list has gotten

[00:59:40]
I guess my Christmas card list is
getting longer over the years.

[00:59:43]
The people who send me Christmas cards.

[00:59:49]
It happens a thing.

[00:59:50]
We’re all there from the people I went to
high school with, so they still like me.

[00:59:56]
That’s funny.

[00:59:57]
Also, I had the privilege
of not working with me.

[00:59:59]
So then over the course of the next
eight years, you get this cash infusion.

[01:00:05]
Do you ever close that deal
that you were banking on?

[01:00:08]
Actually, ironically enough,

[01:00:10]
so one of the things that I do now,
too, is I will evaluate business deals.

[01:00:15]
And so I just flew to California,
and I went to go look at a deal.

[01:00:20]
So I’m in California,
I’m looking at this deal,

[01:00:24]
sitting down with these guys,
and I get a text message.

[01:00:27]
He goes, Alabama, are you all
available for a conversation tomorrow?

[01:00:34]
We all are.

[01:00:35]
He goes I go, yeah, let’s do it.
He goes great.

[01:00:40]
You all be safe out there.

[01:00:42]
Oh, my God, I’m in California, man.

[01:00:43]
He’s like, no problem.

[01:00:45]
He has a call, do it.

[01:00:46]
He goes, hey, we want to spend
more time with the grandkids.

[01:00:49]
You ready to buy the business?

[01:00:53]
So he calls me to be in the one
to close this business.

[01:00:58]
Now, the guy who’s buying this
business in California is my mentor.

[01:01:03]
When we did a startup accelerator wow.

[01:01:06]
He’s been one of my mentors for,
like, seven to eight years.

[01:01:09]
And I go, Adrian, you’ll never
guess the call I just got.

[01:01:17]
The guy asked me if I want
to buy this business.

[01:01:20]
He goes, didn’t you already say
that you weren’t going to do that?

[01:01:22]
I’m like, well, you keep telling me that,

[01:01:24]
but every time he calls,
I feel like I just want to go buy it.

[01:01:27]
What kind of business?

[01:01:29]
Medical education business.

[01:01:31]
All right, so something that you’re
already in the realm of.

[01:01:33]
Very similar to what
we’re in the realm of.

[01:01:39]
Slightly different sorry,

[01:01:40]
I might have to sneeze slightly different
market, but yeah, you know what?

[01:01:47]
Adrian is right.

[01:01:48]
I’m over buying these businesses.

[01:01:51]
What we’re looking at doing
today is significantly larger.

[01:01:59]
I never really thought about
the segmentation, the challenges.

[01:02:01]
When you think about the market you’re

[01:02:02]
getting into and what that’s going to look
like and how you’re going to do debt

[01:02:07]
service and what are
the longer term economics.

[01:02:09]
Now that I appreciate that a little
bit more in hindsight.

[01:02:14]
Had the transaction closed seven years

[01:02:17]
ago, had we done that acquisition,
had we raised a million dollars,

[01:02:23]
the reality is it likely would have
only pushed off the inevitable.

[01:02:27]
Oh, just delay the inevitable.
Yeah.

[01:02:29]
All right.
That’s kind of the irony in the mix.

[01:02:35]
Again, the core lesson there is like
don’t overbuild understand your customer.

[01:02:40]
Build for it.

[01:02:41]
Figure out how to serve them when
their need changes, change with them.

[01:02:45]
And then from the individual as
an entrepreneur, shake your arrogance.

[01:02:50]
Have a little bit,
but shake it and check it.

[01:02:52]
Figure out how to be a growth mind.

[01:02:55]
And the biggest resource that you have is

[01:02:57]
not the cash in your bank account,
but the people you work with.

[01:03:01]
Oh, fair people make the business,
that’s for sure.

[01:03:05]
Yes.

[01:03:06]
It doesn’t hurt to have a couple of bucks
in the bank just in case people mess up.

[01:03:10]
That makes life easier.

[01:03:11]
Yeah, it’s nice to have money
in your technical people.

[01:03:17]
I will tell you this.

[01:03:19]
The one of the guys that stuck
around with me, his name is Sam.

[01:03:22]
I would not be here today
if it was not for Sam.

[01:03:26]
Oh, interesting.
All right.

[01:03:28]
He goes, starts working like Sam,
everybody is gone.

[01:03:32]
Why are you showing up for work?

[01:03:36]
He goes, I don’t know how you’re going

[01:03:37]
to do it, Dan, but you are going
to figure out how to do this.

[01:03:39]
You always figure out a solution.

[01:03:41]
Oh, that’s so funny.

[01:03:43]
That is so funny.

[01:03:44]
Because he knows from an
entrepreneurial mindset, right.

[01:03:48]
They just solve a problem.

[01:03:49]
Solve the problem.

[01:03:50]
We’re like vanilla ice, right?

[01:03:52]
You got a problem, you all solve it.

[01:03:54]
If it was not for Sam,
I would not be here talking to you today.

[01:03:58]
All right, well, way to go, Sam.

[01:04:02]
You are a product of the people,
your environment.

[01:04:04]
And I’m eternally thankful for people

[01:04:06]
having faith in what we do and
very humble.

[01:04:11]
Yeah, that’s cool.

[01:04:13]
And Sam is still with you?
Sam is still with us.

[01:04:15]
Sam is our chief technical officer.

[01:04:16]
Technical.

[01:04:18]
All right.
Very cool.

[01:04:20]
So in that eight years, what were you
doing to build up to where you are now?

[01:04:27]
Well, we did a fair amount of hustling.

[01:04:31]
For selling and looking
for more investors.

[01:04:34]
We didn’t really take on more investors.

[01:04:36]
No.

[01:04:39]
One of the things that I also learned is

[01:04:41]
that there’s a really big allure
of wanting to go and raise capital

[01:04:45]
and at some point you actually have
to make money selling a product.

[01:04:48]
You can’t just raise capital infinitely.

[01:04:50]
It is crazy to me on that point.

[01:04:53]
How many businesses can raise capital

[01:04:58]
without actually showing a profit
or a means to achieve a profit?

[01:05:03]
It blows my mind because from my point

[01:05:05]
of view, the majority of people that are
investing, throwing money,

[01:05:08]
hundreds of millions of dollars at these
places are people that did all right.

[01:05:13]
However, they got their money.

[01:05:15]
So you’d think they’d be
pretty good at decisions.

[01:05:17]
And if I was to be told, like, hey,

[01:05:20]
I got the super awesome business idea
and I said, great, are you making money?

[01:05:24]
And they say, no, but I need investors.

[01:05:27]
I’m not going to be
an investor in that company.

[01:05:30]
But I said, every day I hear about

[01:05:32]
a company they landed whatever investment
and they don’t have a revenue model.

[01:05:38]
Why?
It blows my mind.

[01:05:40]
It blows my mind.
I’m out of touch.

[01:05:41]
Maybe they need a tax write off somewhere.
I don’t know.

[01:05:43]
You can put a lot of stuff on paper,
and on paper it sounds really great.

[01:05:48]
The tough part is when
the rubber hits the road.

[01:05:52]
To me, that seems like a very logical,

[01:05:54]
like, hey, in order for me to get
a return, you need to make a profit.

[01:05:58]
What are the steps
for you to make a profit?

[01:06:00]
I remember I was at a 1 million cups event
four years ago.

[01:06:07]
Something like there you go.
There you go.

[01:06:09]
It’s great.

[01:06:10]
It was a lot of fun because you have
presenter present in their little spiel

[01:06:15]
about whatever, their new Widget software,
whatever it is, new business.

[01:06:19]
And I remember it was a group of five,

[01:06:22]
six, seven guys, and they had some it was
going to be the next big thing, right?

[01:06:27]
And I don’t remember if I asked
or if somebody else asked.

[01:06:31]
I know I was definitely thinking it,
how are you making money?

[01:06:34]
What’s your revenue model?

[01:06:35]
And they said, we don’t have that yet.

[01:06:38]
But then they also said they’re on their
second or third round of funding.

[01:06:44]
Like, who is investing in you if you
don’t even have a way to pay them back?

[01:06:50]
This is the answer I would give.

[01:06:52]
If I was going to go raise capital and you
were an investor,

[01:06:55]
I would tell you that we’ve got a SaaS
based model, so software as a service,

[01:06:58]
and we do either a monthly
or annual subscription.

[01:07:01]
And we did not invest in building
an on the ground sales infrastructure.

[01:07:06]
What we did is we built an inbound

[01:07:07]
infrastructure that started finding out
where our prospective customer was.

[01:07:11]
So typically that means that if you were

[01:07:13]
looking through a Google search,
we brought you to a landing page.

[01:07:16]
We tried to get you into a video.

[01:07:17]
We wanted to educate you and provide you

[01:07:19]
a white paper and understand some
conversion activity to really qualify you.

[01:07:24]
Once we did the give get,

[01:07:26]
we’d have one of our inbound sales guys
call you and kind of run through

[01:07:30]
the discovery process and see if we can
really sell you that’s kind of number one.

[01:07:34]
Number two okay, sorry, go ahead.
No, you’re good.

[01:07:37]
You’re good.
Go ahead.

[01:07:38]
Number two there is like maybe we’re going
to advertise to you on Facebook or

[01:07:41]
Instagram, Snap, tick tock,
but roughly the same process.

[01:07:45]
We’re going to collect your information.
You’re going to have some kind

[01:07:48]
of conversion action going
to come into my system.

[01:07:51]
We’re going to have my sales guy call you.

[01:07:54]
So you’re going to do
the work on this mass level.

[01:07:56]
We’re going to build an inside

[01:07:59]
sales infrastructure, and it’s going
to call and discover you all day long.

[01:08:04]
I got to tell you that
run through the discovery process,

[01:08:08]
just to be clear, but that is roughly what
the formula is if you’re a SAS company.

[01:08:13]
Great.
Yeah, that is the greatest answer.

[01:08:17]
What’s my monetization mechanism?
It’s a SAS.

[01:08:19]
I’m going to charge you monthly,

[01:08:20]
and then if I got real clever and cute,
I’m going to charge you per contact or per

[01:08:24]
user, and I’m going to discount
you for a contract term.

[01:08:27]
Boom.
Done.

[01:08:29]
It’s like a default answer, right?

[01:08:32]
In this case, for this particular example

[01:08:35]
that actually happened,
this was a social media platform.

[01:08:40]
They had users.

[01:08:41]
They were looking to get more users,

[01:08:43]
but they had no way or means for those
users to actually send money to them.

[01:08:47]
So, like, you’re your business.

[01:08:49]
Somebody could call you up and say,
hey, I got a bag of money.

[01:08:51]
I want whatever it is you’re selling.

[01:08:53]
And you could say, great, drop your bag
of money off at this address, this place.

[01:08:57]
Somebody would call up and say,
hey, I got a bag of money.

[01:09:00]
I’ll buy whatever it is you’re selling.

[01:09:02]
And they would say,
we’re actually not selling anything.

[01:09:05]
I would say, Just give me
your credit card number.

[01:09:09]
But they had nothing.
There was nothing.

[01:09:10]
I find that crazy.

[01:09:13]
Yeah, it eventually folded,
so we’re not crazy.

[01:09:17]
But that means that investors, I assume,
lost some cash on that, right?

[01:09:23]
So maybe somebody got a new car.
I don’t know.

[01:09:26]
I don’t know.
Well, yeah, exactly.

[01:09:28]
But you’re not wrong if you
don’t have a Monetization model.

[01:09:31]
No, I will tell you.

[01:09:32]
We’re doing a project now,
so we’re expanding our products.

[01:09:34]
That’s for one of our businesses.

[01:09:37]
And they’re going to ask us how
we’re going to monetize it.

[01:09:40]
I’m like, I have no ungodly.

[01:09:44]
Nothing nervous to hear.

[01:09:48]
Well, hold on a second.

[01:09:49]
I didn’t say I didn’t come up with one.

[01:09:51]
But wait, there’s more.

[01:09:52]
Wait, there’s more.

[01:09:54]
And so there’s a solution
to every problem.

[01:09:58]
And I’m thinking through and I’m like,
if we knew their licensing model,

[01:10:03]
we’d be able to figure out
how to price us better.

[01:10:06]
But they haven’t told us yet.

[01:10:08]
And so I’m pacing the halls trying

[01:10:11]
to figure this out,
and I’m like, you know what?

[01:10:13]
We’re such idiots.

[01:10:15]
And so we use HubSpot, okay?

[01:10:19]
HubSpot is a fairly successful marketing

[01:10:21]
automation and customer
relationship management software.

[01:10:24]
Their Monetization model
is remarkably similar.

[01:10:27]
They give you a flat rate service,
a flat rate subscription fee,

[01:10:31]
and plus they ding you on the number
of users and the number of contacts.

[01:10:35]
That’s how they expand, right,
to create more revenue.

[01:10:39]
Why do we make this more complicated?

[01:10:42]
Let’s just do the exact same thing.

[01:10:46]
We’ll just charge a flat rate fee
and we’ll expand based on usage.

[01:10:54]
That’s how we solve that problem.

[01:10:56]
I got my price point when I talk
to the license guy and he goes, hey,

[01:10:59]
your price point is 450 per
year or something like that.

[01:11:03]
Great.

[01:11:04]
Now I can charge X times that and get
to where I want to go over with

[01:11:12]
really if you kind of hear what I just
share with you is I went through

[01:11:15]
a discovery process,
so I thought about it critically.

[01:11:19]
I looked at relevant
examples in the market.

[01:11:21]
I said, this one gets us to where we go.

[01:11:23]
This is obviously the prevailing model

[01:11:25]
because this is now a publicly traded
company that allows for scalability.

[01:11:28]
And then to get the exact fixed price
point, I did some homework and talk

[01:11:32]
to the providers that were
already selling into the space.

[01:11:34]
So I knew where the price points.

[01:11:35]
Were,

[01:11:37]
knowing what’s your competition where they
were at, what’s that essentially knowing

[01:11:42]
where your competition
was that we would be.

[01:11:44]
Technically a partner in this mix.

[01:11:46]
But yeah,
my point is it didn’t sound like it,

[01:11:51]
but I was actually looking at all
the models and trying to do the homework

[01:11:55]
to figure out where to be
in the market and to be competitive.

[01:11:57]
Because to like the problem that I had

[01:11:59]
earlier, I did not want to throw a number
out and have a perception of value prices.

[01:12:07]
All right?

[01:12:08]
Because if I start that way, it’s going
to be really hard for me to recover.

[01:12:12]
Sure.

[01:12:14]
Interesting thing about the whole software

[01:12:16]
thing, from my point of view as a consumer
of software,

[01:12:20]
is that it’s very tough to shop for,
because what you see

[01:12:26]
when you’re shopping for something is
either way too broad, way too vague.

[01:12:30]
It doesn’t say whether
it solves your problem.

[01:12:32]
You think it does,
or you’re not really sure.

[01:12:34]
Or if it does say that it does.

[01:12:36]
So it doesn’t necessarily say how.

[01:12:39]
So you don’t know.

[01:12:41]
Comparing software A to software B,
if A does a better job,

[01:12:46]
more efficient job, faster job,
smoother job, whatever, versus B,

[01:12:50]
you don’t know them until you
actually test drive them.

[01:12:53]
You’re actually identifying one

[01:12:55]
of the challenges that we think
a lot of small businesses have.

[01:12:58]
We’re just trying to figure out software.

[01:12:59]
And so I think I shared with you,
we’re doing an accelerator program.

[01:13:02]
One of the very particular modules that we
put into our accelerator program was

[01:13:07]
teaching our businesses how
to shop for SaaS based software.

[01:13:14]
This is basically based off like,
the experience that we’ve had at all.

[01:13:19]
So we’ve used HubSpot.

[01:13:20]
We use Active Campaign,
we’ve used MailChimp.

[01:13:23]
We’ve used Constant Contact.

[01:13:25]
We’ve used QuickBooks.

[01:13:27]
We’ve got a whole arsenal of software.

[01:13:31]
And the dirty little secret is you can
accomplish a lot with most of them.

[01:13:35]
So you can usually accomplish
about 80% of what you want.

[01:13:38]
With a couple of pieces of software,
you’ll never get to 100%.

[01:13:41]
No, because as soon as you’re happy,
then you want something else.

[01:13:45]
You never find happiness.

[01:13:50]
But to your point,
incitely was a great CRM.

[01:13:53]
I think it still is slightly.
I haven’t heard that a long time.

[01:13:57]
All right, it was I loved Incitely.

[01:14:00]
I loved how fluid it was.
But you know what?

[01:14:03]
How do you buy one of these things?

[01:14:05]
You think about cost grow, scalability,

[01:14:07]
etc resources community to support it
and it’s really tough.

[01:14:13]
But to your point,

[01:14:15]
we said people buy software based
off your testimonial and experience.

[01:14:20]
So you go in at a zero to low price point.

[01:14:23]
You get trapped in there because you spend
so much time configuring and setting up

[01:14:27]
the way that you want it
is that it’s too costly for you to leave.

[01:14:32]
Oh, sure, yeah.

[01:14:34]
This is your cell phone, right?

[01:14:36]
Well, your cell phone actually you are
more likely to defect on your cell phone

[01:14:41]
and so you’re not going to defect,
I’m sorry, you won’t leave the Apple

[01:14:45]
iPhone but what you will leave is
at and T for Verizon or vice versa.

[01:14:49]
Sure, but it’s still a pain.

[01:14:51]
I mean, all you got to do is redownload
your image in the cloud and reset it up.

[01:14:56]
It’s pretty easy, right.

[01:14:58]
But I’m not going to say all you have

[01:15:00]
to do because if my mom were to do that,
fair enough.

[01:15:06]
So it’s not for a lot of people,
that’s no big thing.

[01:15:10]
For other people, they’re just like,

[01:15:12]
you know what, I have a certain pain
threshold for any given my internet

[01:15:17]
provider, my cell phone provider,
whatever software I’m using.

[01:15:21]
Right.
I mean, you could make a very strong point

[01:15:24]
that QuickBooks is around because it’s
just good enough for people not to leave

[01:15:29]
them because QuickBooks
is not great software.

[01:15:32]
They dominate the market.

[01:15:34]
I think QuickBooks did something
that Peachtree wasn’t.

[01:15:37]
So people like what is Peachtree?

[01:15:41]
You remember Peach Tree?

[01:15:42]
Oh yeah.

[01:15:44]
QuickBooks competitor 20 years ago.

[01:15:48]
And this is when you are a small business.

[01:15:50]
You got pitched by half the accounts

[01:15:51]
that use Peachtree and the other
half that use QuickBooks.

[01:15:55]
Ultimately where QuickBooks made
the biggest impact was going online.

[01:16:00]
And so in the second piece,
what QuickBooks essentially did and really

[01:16:03]
into it did is it exported its innovation
by opening up its API,

[01:16:08]
allowing people to build different
features for and then once the feature

[01:16:12]
found enough traction, they bought the
feature and incorporated into QuickBooks.

[01:16:16]
Yeah, that’s true.

[01:16:17]
I was looking for software for my printer

[01:16:19]
company, CRM stuff, and I remember
them saying it connects to QuickBooks.

[01:16:25]
I’m like, can’t you have that portion,

[01:16:27]
that accounting portion in the software so
I don’t need to bridge it to QuickBooks?

[01:16:31]
No.

[01:16:34]
That was genius on that was genius.

[01:16:36]
Very smart move on QuickBooks then.

[01:16:37]
Yeah, you know what they did effectively,
they

[01:16:42]
exported their research and development,
got other people to put up capital for it

[01:16:48]
and got them to validate and create
minimal viable products.

[01:16:53]
Forced loyalty.

[01:16:54]
Yeah, it is.

[01:16:56]
HubSpot does the same thing with anybody
who’s got a marketplace is basically

[01:17:00]
saying we don’t want to risk doing
the software ourselves,

[01:17:02]
we’re going to let other people do it
and we’re going to derisk the situation.

[01:17:09]
Yeah.

[01:17:11]
Until you have to use the software
and you hate it, you tolerate it.

[01:17:14]
Right.
I didn’t say the world is perfect, right?

[01:17:17]
It certainly is not.
That’s true.

[01:17:18]
Fair.
Totally fair.

[01:17:20]
Yeah.

[01:17:21]
But yeah, no, buying
SAS software is tough.

[01:17:24]
I think that I think so definitively.

[01:17:27]
I buy SAS software based off my need

[01:17:29]
and people have talked
to for recommendations.

[01:17:32]
All right.

[01:17:32]
I like to think I’m a first mover on it,
but candidly, as I get older on some

[01:17:36]
pieces of some things,
I become less of a first mover on things

[01:17:39]
that are going to be mission critical,
and I take the safer route.

[01:17:43]
All right.
Fair.

[01:17:44]
Because the software goes away or gets

[01:17:46]
sold or bought or whatever,
and you get that little email that says

[01:17:49]
that we’re discontinuing
service or whatever.

[01:17:54]
No, I’ll make it a different case.

[01:17:56]
It’s like the cost
of training 25 or 30 people.

[01:18:00]
Oh, fair expensive.
Yeah.

[01:18:05]
It’s interesting because I was looking at
items head member software.

[01:18:11]
This is back probably 2006,
2007, something like that.

[01:18:15]
And I almost bid on it, but I did not,

[01:18:18]
and I’m glad I did not,
because three years later,

[01:18:21]
I get an email because I was still
on the email list saying, hey,

[01:18:24]
funny story,
we sold this person to another company.

[01:18:28]
Good luck, we’re no
longer offering support.

[01:18:32]
And I was thinking that would have been

[01:18:34]
the whole back end of my whole course
to the business coaching thing.

[01:18:38]
I can’t imagine people that had
that as their foundation, right?

[01:18:43]
They stuck hundreds,
thousands of hours building courses

[01:18:47]
in this platform just to get
an email saying, oops.

[01:18:53]
You don’t think about that stuff.

[01:18:54]
But man, that’s what we’re talking
about though, with this stuff.

[01:18:59]
By the way, you’re an investor.

[01:19:01]
What we just talked about is the cost

[01:19:04]
of change is so high that you’ll never
leave, which means that we value trapped

[01:19:07]
you in there and we can raise
the price whenever we want.

[01:19:10]
All right, I suppose
that’s the model for Epic.

[01:19:14]
I’m not an Epic customer,
but it wouldn’t surprise me.

[01:19:17]
Yeah.

[01:19:18]
The cost of change is so high,

[01:19:23]
when Netflix raises their prices,
it’s easy to change.

[01:19:30]
So you and I use CRM
software for our businesses.

[01:19:34]
They’re going to give me
a 10% raise next year.

[01:19:37]
My costs are going to go up 10%.
All right.

[01:19:39]
I’m not going to change.

[01:19:41]
I’m just going to suck it up.

[01:19:43]
Because the train 20 odd people
on the CRM system would be then it’ll.

[01:19:47]
Be closer to 40.
Okay.

[01:19:49]
Are they all in the CRM system?

[01:19:51]
Most of them are.

[01:19:52]
Okay, so we use it
for customer support sales.

[01:19:57]
Most.

[01:19:57]
You talk a whole ticketing
system and all that.

[01:19:59]
Everything is sitting there.

[01:20:00]
All right.

[01:20:03]
We got maybe 120,000 records that’s up

[01:20:05]
there that we probably 20,000 are
actively maintained per year.

[01:20:10]
Well, hopefully your CRM software person

[01:20:13]
isn’t listening to this
going like, did we say ten?

[01:20:15]
We meant 40.

[01:20:17]
Yeah, actually we decided that we’re going

[01:20:19]
to go all in with HubSpot and
we have become a HubSpot partner with it.

[01:20:25]
Interesting.

[01:20:25]
All right, we decided
that we’re going to hitch.

[01:20:31]
We’re going to get
into an Ltr with HubSpot.

[01:20:34]
Got you.
Interesting.

[01:20:36]
That’s a big move.

[01:20:37]
Yeah, it is.

[01:20:38]
So we’ve been really intentional about
figuring out how to make things work.

[01:20:42]
So bringing it to today, how many

[01:20:46]
branches, businesses,
I don’t know what you’d call them.

[01:20:49]
Maybe there’s different what
all do you have going on?

[01:20:53]
We’ve got Altus, which got two business
units, one in the healthcare education

[01:20:58]
and compliance space, one in the non
education compliance space.

[01:21:03]
All right.
I’m sorry.

[01:21:05]
Non healthcare compliance based,
one in the general training space.

[01:21:09]
Got it.
Okay. That sounded more confusing.

[01:21:11]
Course creation software, essentially.
Course

[01:21:13]
creation LMS.

[01:21:14]
All right.

[01:21:17]
And then we’re introducing a mentoring
platform within it later this year.

[01:21:22]
Business number two is

[01:21:26]
called SDM Central,
and that’s a patient provider platform

[01:21:30]
to understand treatment
preferences for chronic illness.

[01:21:34]
So as an example, if you have asthma,

[01:21:36]
we try to understand
your preferences for treatment of asthma

[01:21:43]
and then help position you to ask
the right questions to a provider

[01:21:46]
to understand what therapy
might work for you.

[01:21:50]
Business number three is our newest
business, which is our software enabled

[01:21:53]
second to newest business, which is
our software enabled trading business.

[01:21:59]
And that’s pretty exciting.

[01:22:02]
So that’s one of our new kind of MVPs that
we did with our intern now COO for it.

[01:22:08]
And then business number four is our new

[01:22:11]
little capital management business that is
doing the incubator accelerated programs.

[01:22:17]
All right.
Wow.

[01:22:19]
Team people.

[01:22:22]
That’s a lot of spinning
plates for you then, right?

[01:22:24]
Or do you have people running at all
and you just camp on the beach all day?

[01:22:28]
Yes.

[01:22:31]
Camp on the beach.
Spinning plates, James?

[01:22:34]
No, I don’t do the beach.

[01:22:35]
I don’t look good in the speedo in
February, January, but. Can’t unsee that.

[01:22:40]
Got it.
All right.

[01:22:42]
But no, I mean, it’s about team.

[01:22:43]
And so whether it’s Ted who runs the Altus

[01:22:46]
business or CEO for Altus, or
TC who’s doing our SDM business,

[01:22:54]
or Callan who’s doing the Argus X
business, and Justin who’s doing our

[01:23:00]
GHW Capital Management business,
ultimately we could not do this if we did

[01:23:05]
not have
operating officers in each of the business

[01:23:09]
units and a team that could
really execute on this.

[01:23:12]
Got it.
All right.

[01:23:14]
Am I a really important part?
Yes.

[01:23:15]
Am I the whole ball of wax?

[01:23:17]
Absolutely not.
Got it.

[01:23:18]
Fair.
Super fair.

[01:23:20]
Dan, how can people find you,
get a hold of you,

[01:23:23]
get in touch and ask you questions,
give you a bag money, whatever?

[01:23:28]
Altusinc.co. Altusinc.co, easy enough.
Super, well

[01:23:33]
I appreciate you being on the show, Dan.

[01:23:35]
Thank you very much for the opportunity.

[01:23:38]
It’s funny because I’ve known you

[01:23:39]
for years and I had no idea
all that you have going on.

[01:23:43]
It’s kind of funny.

[01:23:46]
It’s interesting because,

[01:23:50]
I don’t know, past few years,
pandemic wise and all that jazz,

[01:23:53]
it removed people from being in touch
and just bumping into each other, right?

[01:23:57]
Yes.

[01:23:58]
Well, don’t bump, stay 6 feet,
all that kind of stuff.

[01:24:01]
I’m always up for a
cocktail and I shake hands.

[01:24:03]
Fair.
I love it.

[01:24:06]
I love it.
Likewise.

[01:24:07]
Cool.
I appreciate you being on the show, Dan.

[01:24:09]
Thank you.
This has been

[01:24:11]
Authentic Business Adventures, the business
program that brings you

[01:24:15]
the struggle stories and triumphant successes of business owners across the land

[01:24:18]
we’re locally underwritten
by the Bank of Sun Prairie.

[01:24:20]
If you’re listening or watching this
on the web, if you could do us a huge favor.

[01:24:23]
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The thumbs up thing.

[01:24:25]
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[01:24:27]
Better thing.
Subscribe.

[01:24:29]
Heavenly, heavenly, man. My name is James Kademan
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[01:24:33]
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[01:24:37]
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[01:24:41]
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[01:24:45]
for the entrepreneur in all of us,
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[01:24:48]
We’d like to thank you,

[01:24:49]
our wonderful listeners, as well as
our guest, Dan Guerra, the owner.

[01:24:53]
It’s so funny because you just went

[01:24:55]
through the list, but I’ll just say,
CEO of SDM Central.

[01:24:59]
We also had Argus Ventures.
What else you got in there?

[01:25:02]
There’s a whole list.
Argus X, Altus, and GHW Capital Management.

[01:25:09]
All right.
I love how you had to pause too.

[01:25:12]
Lots of stuff.
Tell us that website one more time.

[01:25:15]
Altusinc.co. Altusinc.co.

[01:25:19]
Perfect.

[01:25:21]
Say that one more time.

[01:25:23]
A-L-T-U-S-I-N-C.co.
Got it.

[01:25:27]
Perfect.
Thank you so much.

[01:25:29]
Past episodes can be found
morning, noon, and night.

[01:25:31]
Podcast link found at drawincustomers.com.
Thank you for listening.

[01:25:34]
We will see you next week.

[01:25:35]
I want you to stay awesome.

[01:25:36]
And if you do nothing else,
enjoy your business.