Lessons - From $40B Fund to Child Rescue Missions | Paul Hutchinson - Sound of Freedom Producer

In this lessons episode, explore how integrity and abundance shade business strategies that create lasting success. Discover how aligning incentives builds true win-win outcomes across stakeholders, understand how customer empathy leads to smarter decisions and stronger products, and uncover why creativity over competition becomes the foundation for long-term growth. When you were building up your firm, how does that translate into the strategy that you deployed? When I want to know the secret sauce, you said you were giving exceptional returns while living in integrity, living in alignment, understanding that's win-win-win across the board for a lot of people that's ideal circumstance that they can only hope to achieve. So how does that actually translate into business strategy for you? So I'll take it on each piece. So first of all, John and I, in the beginning owning 50% of the company each, realizing we don't have the background, the education, et cetera, to really run a company like this. So finding people who have really done something amazing in their life who are super qualified in the right areas that we needed, bringing them on board. Perfect example is a guy by the name of Kelly. Kelly came into our office, we were pretty small, we had three or four employees, and he said, hey guys, I really want to be a part of what you guys are creating, what you're doing. And we said, hey, we're not hiring right now. He goes, no, no, I don't even need to get a pay me anything. I will take a place in that court. He says over there in that corner right there, I'll bring my own desk and I'll eat what I kill, right? I'll come, I'll bring you guys deals and stuff. And if you fund them, then you can make me, well, Kelly is now building a 14, 15,000 square foot home, right? Kelly is a multi-multimillionaire today because we weren't so selfish with, okay, this is only a, the game is locked, nobody else can have any equity. No, we made a lot of people millionaires as in the process of building the fund and bringing on lots of new partners, right? So that's number one. And, and seeing the value that he was bringing and not being in a position where we're like, okay, we're going to take his stuff and try to keep it. No, we see his value and give him value and return for his value in a beautiful way, right? So there's number one, number two, we already touched on this a little bit with the, with the tenants, we would say, okay, we're going to put ourselves in their shoes. We're not going to be a scum lord and come in and try to, you know, rape the money, the, no, we're going to say, how can we create value? Yes, we're going to make sure that the pricing is ratcheted up to the point where it's really competitive, but more important than that, before we ratchet up the pricing on everything, we're going to make sure that people really see the value in living there. And then from the bank standpoint, we become one of the, before the 2008 crisis, we saw that crisis coming because of one of the partners that I had that saw that come on early. And we were able to get into a position where we were one of the first 20 funds in the country to be qualified on the top level purchasing platform with all the GSEs with Freddie, Fanny, HUD, FDIC. So when a bank had 30 days to live, we would get a phone call. We would go in the bank president by then is willing to negotiate. He's like, okay, 30 days from now, he's out of a job and his shareholders have a big fat zero if he doesn't get some massive liquidity. So we go in, look at their portfolio, say, okay, we're going to take that that 1000 unit apartment complex off your hands. I know you're into it $100 million. We're going to pay you $35 million cash today. Give you the liquidity you need to stay in business. It's a win for the bank. The bank stays in business. They have that liquidity. It's a win for us because now we have the team to be able to create the value and manage it the way that it could. It's a win for my investors because we have smart leverage on it and we can create that return. And I can go through that with a lot of other companies as well. The attacking anxiety and depression company, a perfect one that I did in my early 20s, right? We had a program, an audio and a workbook program that helped people change their negative habit patterns of thought that we're creating anxiety and depression in the first place. And it was a $250 program. It cost us $30 to make. But it costs us like $200 and advertising just to get a client with our infomercials was kind of breaking even there. But we had a valuable product for them. And then we created a personal coaching program. Now here's the thing. On the outside, this looks like this isn't going to work. These are people who can't even work a job because of their anxiety or depression disorders. They can't even leave their house. And I'm getting them to max out their credit card for $2,000 personal coaching program. And I can do that sleeping well at night. Why? Because I had a 100% money back guarantee. We have 97% success rate. If 12 weeks later, after lining them up with a personal coach and having them get the help that they needed, if they weren't living a normal life, if they weren't working a normal job, I would give them their $2,000 back. And that was less than 3%. The other 97% now they're earning $2,000 or $3,000 a month. Now they can pay back that credit card. It's a true win for them. And it's a win for my employees. They're making good income. And the people who went through our program, we gave them a job as personal coaches in helping others. So I could create a true win, win, win. And that company I sold for $20 million when I was 29 years old. Right. And now it was a public company with restricted stock. That's a whole different story. But it was, it was something where we created a true win, win, win for everybody across the board without anybody having to lose because the customers were paying $2,000 for something that was worth $20,000 in terms of their actual value in their life. I love this. And one thing that I've noticed that you heavily focus on this allowed you to adopt this mindset is the trust in the product, the absolute trust in the product. If it's an investment opportunity, if it's if it's if it's self-help course or or teaching session, as a as a as a as a founder, what is your framework for okaying the product that you can take to market? Here's what I'm going to say. It depends on your customer and what they're looking for them. And and a true win, win, win has to come from that standpoint. I'll give you this example. Okay. You're you're up in northern Alaska and you meet a guy who has a whole bunch of firsts and you want to buy a bunch of firsts, right? And you don't have cash. He only wants to trade and you give him a a Picasso painting, right? He's got he's got a bunch of firsts. There may be retail. They're worth $5,000, right? You give him a $20,000 or Picasso painting. You've actually done him a disservice. Why? He can't do crap with that. It's going to end up in his woodshed, right? But you give him a $200 gun that he can go and shoot some more or some traps or whatever else. Now you've created a true win, win, win. You've got $5,000 worth of firsts that you can go fur or you can go sell whatever else. He's got even done that he can actually use. And so you don't have to necessarily say, okay, I'm in it. I'm doing a good deal because I'm giving him a $20,000 painting. No, you're not, right? So find out and this goes back to really putting yourself in your customer shoes, right? With the with the apartment complexes, who are our tenants? Are the people that play tennis? You know, do they need gold tile rods? No, they don't, right? They want the English as a second language. They want the bookmobile. They want Taco Tuesday. They want they want a safe place that can have their kids. That's that's a true win for them. And I can do that and spend a lot less money than putting gold tile rods in. See what I mean? And it's a true win for them. And so, so that's really the the litmus test is saying, okay, if I can truly put myself in your shoes as my investor, as my employee, as my tenant, as my customer, put myself in your shoes and feel it from a heart standpoint. What is it that you really need? And how can I create value for you in your life in this transaction? That's a true win. Last last question on on on on this part of your life. Because I think it's again, fascinating how you look at all these different commercial problems that entrepreneurs are trying to solve for. What in this win-win-win abundance mindset environment? What's your view on competition? I think competition is healthy. I really do. Now, I don't play in a competitive world. I play on a creative plane because so many people are like, okay, I've got to crush my competition to get ahead. And understand that as long as that competition is healthy and it's encouraging you to play on a competitive on a creative plane, then that's good. If it's if it's tied to fear, if it's tied to hatred, tied to crushing others and whatever else, then then that's not that's not healthy. However, these are the kind of things that motivate us to be the best that we can be to create something of value. And and and it doesn't have to be in a place where we're crushing others. I like to use this example in playing on a creative plane instead of a competitive plane. So there's an island. There's 10 families on this island. And there's 10 men and they go they go fish in every day to get enough fish for their family. And they're competing. Oh, I caught three fish today. I caught two. I only got one there. That's great. You know, that's motivating them. But then two of the guys start thinking on a creative plane outside of this whole competition thing. They're like, okay, well, can we do to make this easier and better for everybody? And those two guys come up with this idea of a net. And so at night, when everybody else is watching the fire and everything else, they're out there with their wives are so in this net. And sure enough, this thing works. They go and they catch enough fish for the entire island. Now the problem we have at this point is 80% unemployment, right? Because now you got eight guys that can't fish. Now what do they do? Right? A dysfunctional system would either have these guys try to compete and make a better net or a dysfunctional system would tax those two men 80% of their fish. A well-functioning system would encourage those other eight men to do things like one would get better at building boats and one would get better at building huts and one would get better at educating the children. And lifestyle as a whole for the entire island increases because of the creativity of those two guys that put together the net. Today, we live in a world just like that. And yes, if you consider that competition of saying, hey, how can we create a better maustrap? How can we create a better net away to fish? Then that's super healthy because we're in this world of expansion and creation. But understand that if you, if somebody moves your cheese, if you ever read that book, who moved my cheese, right? If something happens in your industry where somebody creates a net and your job is no longer needed, understand that that's the world that we live. And you can think on a creative plane and say, how can I continue to add value to the world in a way where I can have financial security for my family coming back to me because of the value that I'm adding. Thanks for tuning in. If you found this valuable, don't forget to hit that subscribe button so you never miss an episode. And if you want to dive deeper into this conversation, check out the links in the description to watch the full episode. See you in the next one.