Liquidity & Liquor - Jan Bednar | How to Build a Logistics Company

Welcome to success story the most useful podcasts in the world. I'm your host Scott D. Clary. The success story podcast is part of the HubSpot podcast network The HubSpot podcast network has other great podcasts like marketing made simple hosted by Dr. J. J. Peterson Marketing made simple brings you practical tips to make your marketing easy and more importantly make it work now If any of these topics out interesting to you, you're going to love his show had a right and deliver captivating speeches Had to market yourself into a new job how design can help and potentially hurt your revenue and how to create a social media ad strategy That works if these topics hit home in their things that you want to learn about go listen to marketing made simple wherever you get your podcasts Today you're going to hear an episode of my new podcast liquidity and liquor I co-host liquidity and liquor with Joseph Martin a serial entrepreneur who sold his last company boxy charm For over 500 million dollars on liquidity and liquor we have conversations about business Money in life with some of the most interesting people in the world You can download and subscribe to liquidity and liquor on youtube or wherever you get your podcasts All right, John welcome to the show. Thanks Joe excited. I'm super excited. I should cry I actually don't know what I'm excited about So those who don't know that that guy right here is a good friend for seven years, right? We've been friends for seven years Yeah, sorry for you We we know we work together in the EO group which is entrepreneur organization We actually you knew about me before because you don't know how much we were working but no and then You exit your company and I'm jumping right you exit your company called shipman not exit You sold a piece of your company shipman At a very high multiple was a very high multiple nine figure multiples About a month after I did right or so in 2020 we both kind of like cashed out nice and The different between you and I's that you're 29 you motherfucker and all those years when you're running the company All I remember is I am right now in a safari trip. I am right now Snowboarding in japan. I while I was there breaking my back and uh, yeah, so I think it would be awesome to hear how do you leverage lifestyle Doing everything we're gonna talk about a lot of his lifestyle guys Oh my god. Yeah While he was selling his business I thought kind of like the interesting time in our life doing COVID. So welcome. Yeah, thanks Joe Appreciate I'm learning about it for the first time. So I don't know you got Well, what kind of lifestyle what kind of lifestyle kind of adventures have been on so I want to say about my my thing with John right so John Started shipman, which is a fulfillment logistic company right filling up and packaging everything going after the small Small companies that wanted to ship up their goods online right and he had probably the most creative method I've seen 2.0 type of Shipping companies where the rest of them are very old school very Silverhead much silverhead industry where all of them are you come over to the office They don't even give you glass of water because they're very technical. They talk to you about what you're doing When you go to shipman kids kind of like you're going into a little party and event You need to see his location and everything was geared towards experience for the consumer something they didn't do And you're a kid you're going into FIU and yeah FAU international student when okay, so when did you when did you start because I was I was even doing a little bit of research and you built ship monk off like a 30k Yeah, so yeah, so like the whole backstory, you know I moved in 2008 and then went to high school play hockey for two years Kind of scholarship and then moved to FAU And I started the first business which was Similar to what chipmongers but something different where we're buying products in the US and shipping them internationally So, oh, you know got a little bit of my feedback and logistics and e-com And this was back like 2010 and kind of started doing it first for friends eventually for kind of other people And then 2014 I graduated and I want a business plan competition with like 27k of awards and and prices Um and got accepted through an accelerated program also at FAU And so they gave me like a free warehouse space for here and additional I think 25k So like by the time I graduated was going to launch this thing I had maybe like 70k and award prices And this warehouse space for a year which just kind of was like an amazing runway to start a business with because I was deciding like okay Do I want to take the risk and you know do business full-time or do I like try to go to work and like start a business on the side You know, and so the 70k kind of gave me enough confidence that I can try to do this without like going to work and you know trying to do both so the while logistics Like how did you case? Yes, 70k like was it part of a competition? It was like a case study so it was yeah, no, so the competition was a it was a business plan competition So I was basically pitching what I was doing is like you know You lived in Europe and like you wanted to buy um, I don't know some specialized like Clothing that wasn't really selling in Europe right or they weren't shipping it internationally This is 2014 so a lot of companies in a ship but internationally it was too complicated it took too long So we would basically provide the service of we'll buy it for you and then we'll sell it You know, we'll ship it over to check let's say and then like you'll have this product right We would give them an address in the US essentially and then forward it over So that was kind of the original concept and with the business plan competition The pictures will take all that Put kind of an automated platform on it and then make it global so like we don't just service check But we service everybody So that's how you know when I graduated I basically like went on hired like a developer and started building this platform And then you know in the first year Somebody basically called me up and they're like hey you have this warehouse We read about you in the newspapers like can you do fulfillment for us? And so it kind of you know and I started looking at it And I didn't really know what fulfillment was and I was like well There's a big gap in the market for SMB mid-market fulfillment Needs right because everybody still in 2014. This is certainly 14. Yeah, like early 15 and what and explain like what the landscape was like So now it seems so easy Yeah, well now I mean now there's a lot of competition right but but back in 2014 There was maybe one company that was servicing like the SMB market because also remember like one company. It's called shipwire They got acquired shipwire. Yeah, they got acquired by Ingram Micro in 2013 So the landscape like if you think about like Shopify and like all these you know businesses that were starting online That whole era of these entrepreneurs starting an online D to see you brain really started around like 2010-11 with Shopify actually probably creating the best platform for that So all these like old school logistics companies they kept working with like much bigger players and it was a lot easier to manage You know four or five clients in a warehouse than two three hundred So nobody really wanted to get in because it's too complex There was no software. There was no Processes like it was very complicated and so we don't really know what we're getting into but it's like well nobody's doing it Or they're doing it terribly wrong So let me try to get in that space and figure out how we can do it better So we started building that solution to say We can service, you know 300 customers in a building or 500 customers in a building built Our own software to run the warehouse our own software to kind of provide the Order management inventory management system to clients and kind of connect the two tiers and then ultimately You know provide a service that at the time not many companies were providing and the other piece was Like Joe said right like all these companies are old school logistics company So it's like the run by you know like 50 plus-year-old dues that just are not like fun They don't speak the same language as like most of the e-commerce founders that are millennials that very marketing brands Given so we you know build a cool brand around chipmunk got a more millennial You know, we wanted to kind of give this vibe of zen right which is why we picked the monkess kind of our logo is our mantra And wanted to create a whole experience just a lot more modern right from the office space to You know any interactions with our people like anything was just it was trying to be like different It was trying to be more of I you know these are the people that speak the same language not like you know, it's like my grandfather Classmates they're like running this company right and that's gonna the divide a lot of these other companies had Okay, it makes sense so When you when you first launched this you said okay, so you have like whatever $70,000 you have warehousing I guess somebody Basically somebody found out about what you were doing and then sort of prompted you to go down this route and build this out And that was like one customer, but um, how did you find your first customers for the business like what was it? Yeah, so it was um So the first customer was the most random connection like there was an article that came out about I'll call you up and was like hey, yeah, yeah, yeah, so exactly so it was uh It was a company out of four lot of deal actually they raised a couple million bucks to build like smart home products for Apple And so yeah, so like this guy calls me up and he's like hey my wife My CEO's wife written article about you in the newspaper and my CEO wants to support local business Like we should work together and you know I didn't really know what he wanted because we didn't work with us companies at the time So I met with them He basically told me like hey, we've had a terrible experience with our previous company and like we want to support you and work with you So that was like the first customer that even like explain what this space is like and you know When we met with them and I was like man, this is gonna sound great But they were like a year away from launching their products So in the meantime, I started more you know researching the space and I went to Couple of trade shows to really figure out like okay, maybe I can talk to a couple customers to see if they can use us Um, I went to CES in Vegas, which is like an electronic show because they just seem to be like a logical place and I basically just was like telling people like hey you guys need fulfillment You know, this plenty of startups and then like well start up section and so I close maybe like first five customers You know, like most of these guys barely just start this built I didn't have anything no like I didn't even like know how to do this right like I was like Oh, you know, we have a warehouse in Florida and like we're doing this for plenty of brands I mean, it was like fake it till you make it out game for sure We're like we have this amazing song. You didn't do signed the deal at the time with that warehouse I know so I had I already was in the warehouse part of that accelerator program, right? But it was like thousands from the customers so I yeah, so I don't just don't think that that was in school. Yeah. Yeah, I mean, it's like this This exactly And my mindset was like hey, well, I'll get the customers. I'll figure out how we're going to do this later Yeah, um, and that's exactly what we did. I came back from the show. I had probably five customers that he signed up Most of them decided to ship us inventory without ever seeing what the warehouse looks like, right? I even like I remember I had one customer that would come to visit and I would put you know because It was a thousand square foot cage inside of a big building So I put like fake boxes like empty Amazon boxes that just built to take off the tape and just put them on the shelf So it looks like there's some product. I think that's how castor the casco started They they had empty space and they put empty boxes on top just to make it look like you're making it look like that Yeah, yeah, that's really funny, but I mean, it's like well because you want to I mean that's the scariest thing right like you finally get a customer They want to come visit to make sure you're real. Yeah, you're not really real Like how do you tell them like to give you confidence? And yeah, and like we just we did it, you know We kind of sold the guy on the fact that like hey, I'll be the one basically shipping yourself and he ended up signing up Even though we we had really nothing to sell at the time and that's Ultimately how to kind of start is like I sent up the first five customers Then I brought in one of my college buddies to basically do commission only sales And you know, you just call people like a super scrappy. Oh super super scrappy start up very scrappy I mean, it was like yeah, and then this guy was just making commission only here And and we didn't I didn't know any revenue models or anything like that would you even tell me like how much you paid this guy And so we just figured out some numbers and you know We didn't have no target customer like we do know anything So at this guy just I bought a list for like hundred dollars from my one of my friends I was like a list of medical device companies because we just thought maybe medical devices would be like a cool thing to do Which by the way medical devices are even today we don't share medical devices because they're so complex and like you need to all these Like really complex You need like all these certifications like ISOs and you're like wow like we you know We spent like couple hundred grand on compliance like now and that was the first target customer that we went after Like just that's how naive we were But he was just dialing these guys in like calling every single one of them and trying to see like hey, do you guys need fulfillment? Um, and he did end up landing, you know, maybe I don't know two three customers and like it was a very slow progression From that point like we've just signed up one two customers But because e-commerce was in such a inflection point at the time like a lot of these brands, you know You'd sign them up. They were doing Hundred orders a month and then suddenly they would like skyrocket to like 500 right the next month and thousand the next month And so organically as the brands we are onboarding we're growing like we were growing with them So it was kind of a mutual Just there was a huge benefit of their growing we're growing, you know, we're on You feel like there was the Renaissance for the online sales Throughout I don't know from 2013 because social media 2013 all the way to how it's a 2020 and then 2021 Collapse of the I mean some sort of a correction for that Renaissance. Yeah, I mean, I for sure. I mean, I think the It opened up the opportunities for anybody to start an e-commerce company right in 2013 I mean you didn't really need a lot of money to do it like buy any white label product We got an idea for product right build it You know Shopify would allow you to have the the front end of it We would allow you to have the back end of it and like anybody could launch a brand within a couple months, right? And everybody wanted to do it because it's cool and there's all these great success stories of people You know starting out of their garage building million dollar businesses and like basically working from home and like not having to have massive teams Um, and we were definitely writing that way where you know, I mean you like brands like yours, right? Like it was just it's such a great time for it. It was it was a great time to be alive and actually do it because I just saw a billboard where it says Richard the the owner of Fashion Nova send me this billboard that says a hundred million orders just sold Thank you Fashion Nova by Shopify That shows you that a multi-billion dollar brand works with Shopify shows that When you want a lunche business, you don't have to worry about infrastructure anymore You don't have to worry about for logistic infrastructure because you have the shipman You don't have to worry about building your own website You have Shopify and if you're small business all the way to a multi-billion dollar, you can still work with Shopify So the ability to but it was more about supply and demand how many people are going to come fast enough before it's too late Yeah to go through that door and and the challenges like you know, especially with what happened with iOS 14 and like the Challenge in advertising right like during COVID obviously the Cosprac position for all these brands when they're basically doing nothing right because everybody was buying online Nobody was spending on ads like no travel like obviously a lot of these other industries just went to a totally Away and so these brands just got really spoiled with like men We're you know, it's costing us three bucks to acquire customer and then things started normalizing 21 right and it started to Like other people started advertising which that naturally already increased the cost But then you had this this huge You know shift in the in the targeting which just became even more difficult to ultimately get the same return And so like we have examples of brands whose cost per acquisition, you know, went up 10x 20x Okay, so this is what I've heard I've heard that in 2022 that if you have positive row as on your first customer your unicorn. Yeah, because it's so rare So that's what the e-commerce dealing with right now So that means you have to have like your LTV on that customer has to be significant Yeah, you have to have and also the attribution is all screwed up because of iOS too, right? So I mean like never really accurate It's never really accurate now. There's actually There's actually tools that will somewhat replicate the accuracy I can't remember the name of it now, but there are some e-commerce tools that Try and replicate the accuracy of like pre iOS update Facebook, but I mean Google's pretty much all you have right for accuracy Right and it's and it's you know, it's I think what's what's happened right and like we're kind of seeing it Because we have a pretty broad customer base. I mean we got I would say you know 1500 2000 brands that we work with they range from small like one You know one person 10, 20, 50 orders a month shop all the way to our largest you know is a you know 200 million Well now actually we sign up even larger ones, but like half a billion dollar brands that you know We'll do hundreds of thousands of orders, right? So we have a pretty wide range of of companies And I think where you see the biggest impact is the ones that have been solely relying on social media for acquisition Have been getting obviously hit the hardest now the other challenge that you throw into this is Is this whole supply chain delay issue where you know during covid like nobody could get their stuff in so everybody over in the field It gets stabilized now. It's getting better. It's definitely not stable yet. So that's stable container Right, I mean all the transportation pricing is coming down on the ocean and airframe like you know Where used to be what 24k for container now that's coming down like pretty significant 16. I think now it's like out of 16 15 You know used to be before that it was full five yeah two three it's sometimes you have five yeah, but it's It's getting better, but it's still not there, but the problem is like everybody because they got so Kind of they got their ass in it. I mean like 2020 because all their inventory was sitting in the water well They needed it you know for peak then 21 they got all the inventory But they they weren't selling as much right and that's happening in 22 as well. So right now Like everybody is all this inventory, but they're not really selling which is you know inventory is finance It's cost them money. So it's kind of hitting their bottom line So even the brands that we work with that have been super profitable doing really well this year They're just having really like tough time major tough tough time financial challenges, right? And it's you know over inventory. What's the challenge now for you outside of Disapply chain issues. I mean as I said you have to like change your like your your ICP or ideal customer profile Do you have to like audit your customers a little bit better so that Just challenging your business. Yeah, well, I mean, so I think Scaling has always been a challenge right like when you grow, you know, we've been I mean we've grown to We're with 2500 people now. So like in five six years. I've grown 2500 people that in itself just how many locations 19 warehouses 19 warehouses now. Yeah, yeah, wow and like 11 locations What's the average size of a warehouse? Uh, I mean, I don't know in an average we have three and a half million square feet. Okay. Yeah, so I mean it just depends on the market But you know, I would say the biggest challenge is just making sure that as you grow like you continue to stay agile and like be able to make quick Decisions and and and the team scales with the growth. So like we're you know more opening Did this year? I think we opened three four new buildings and Getting the team set up so that they can operate pretty quickly right getting all the equipment order Are getting the training done getting everything kind of up and running that's a really challenging piece because you know You try and a deal with Three of those at the same time and the amount of people that can actually train the people is there's very limited Because we don't have that many people they've been with us for a long time So you need to like replicate them right and then put the processes and the structure in place to allow us to do that over and over again So I think that's generally the biggest challenge is to make sure you've got the right layers and the right people in the right spots to Um, to allow for that scale. So saying growing the business is more Just a traditional scaling Tearing the business finding the right people is more challenging than the actual supply chain issue because it's still a massive Space as it is. Yeah, so so the challenge for us right like we don't get involved as much on the inbound part of that So like if you're our customer like you will typically work with somebody else to get the inventory over to us So It says a big impact on our customers, but we don't there's nothing really we can do I guess my question on this one was supply chain issues plus iOS issues causing a shrinkage in online sales and Is that more of a challenge than just scaling a business so well Yeah, so okay, so that in itself is a challenge of like organic natural growth of our customers If you look at our customer base, you know that like let's just say they've shipped I don't know whatever 20 million orders and last year right that same amount of customers are probably going to ship The same or less amount of orders in 22 because they've had all these challenges So all those years you basically had natural growth of each client and you just got to make sure you retained in value Because now you have to keep chasing more clients So now we have to bring in new business Yes, so now we have to bring in a lot more new but like if we want to hit the same percentage growth rate Like we have to bring in a lot more new business to offset the fact that our clients is not growing as fast Because like in 2020 right without doing literally anything like we even if we didn't onboard our any clients We would just double our business right in 22, you know We need to onboard like this year. We're probably onboarding a hundred million dollars of new business And that's all you know like new business that comes on but then obviously the existing business possibly shrink a little bit because of It's kind of the challenge. So here's here's a here's a question that I guess it's an evolution evolutionary part for a company like yours Or maybe not So at first you started with the lower hanging fruits small mom and pops that nobody wanted to deal with Now with competition everything. Are you trying to double down more on the big size companies more than the little ones? Yeah, it's a great question. I think that's kind of the biggest like answer or question. We're trying to answer internally right now The benefit of working in the mid-market small, you know businesses is that's very complex and not a lot of people can actually do it The downside is there's only so many businesses in that spectrum and a lot of them, you know It's not very stable, right? So in the SMB category overall like you bring them in and then some of them go out of business You know some of them were just you know, it's a little bit harder to manage that piece of business If you sign up a 50 million dollar client You know, you know that you're gonna have they're gonna be most likely to be there in five years You sign a longer term contract So there's a lot more stability, but the margin profile is also very different, right? So yeah I think it's um, so you deal with them different than you deal with the mom and pop for sure Yeah, I mean, you know, you have a little bit of a different operations You know, you put more effort into making sure that they typically build them kind of a more of a dedicated space in the warehouse Also, you then you have EDI and pallets and shit. Yeah, I guess a lot more. Yeah, you're more more on any channel right? I'll do B2B. They'll do B2C. They'll do they'll need more buildings. They'll have you know a lot more kind of manual thing So like I think we've we've operationally it's not really an issue, but it's just naturally if you go to upmarket You're margin string because you you know, you're pricing that more aggressively, right? And you have and you have to and now you're saying there's a lot of competition in your space and yeah I mean, there's been a lot of competition because a lot of venture money have flown to the space and you know We've been bootstrapped like we've been we've always put all the money Kind of we've always wanted to be profitable So like a lot of our competitors that raised hundreds of millions of dollars they throw money at acquiring customers And they'll pay to lose money right to serve them which is challenging for you Which is challenging if like if you try to make money and like you're competing against somebody that is okay to lose money Then like it's like how do you want to deal like you can be better? But Sony's offering 20% cheaper service like you just can't compete with it, right? So now it's changing like even the ones that have raised a lot of money The valuations are coming down nobody wants to give them more money, right? They are right sizing their pricing because they realize they have to make money So it actually actually have to operate a business Good times Good times yeah It's like hey like there's actually businesses to make money at some point And look there's businesses that like in software There's definitely a world where you know, you have to spend money to acquire a customer If you have enough of a lifetime value calculated like you can lose money to acquire that customer And at some point you make money But in logistics it's like or you know in fulfillment it's If you if your gross margin is negative, you know meaning like you You're a ship hundred packages for you and I lose money on every single package I ship There's no way that I'm that's ever gonna scale right yeah And and a lot of these companies that's what they're doing right like they're just burning through cash And like they think that was scaled they're gonna figure it out and actually their cost is gonna come down It's a it's a it's a cyclical thing I've seen in many categories where you start with Don't show me profit you better not Um until the whole market turning to EBITDA driven And no investor wants to touch you unless you're profitable and from one day to another it switches Yeah, and and the problem I've seen with companies and I've had that when I had buyers coming to buy a big private equities And they said it's kind of a cool way that you give a company that was already operating under debt They're used to operate under debt now you tell them now you start need you gonna make profit now They don't know how to ever turn profit. What's a cultural thing it's a cultural thing because if you think about like and this is kind of the funny thing Right that's like the market today obviously is everybody wants to see profit Forever you know forever the last well the last whatever a couple years has been like oh Just want to see growth growth like we don't really care if you're making money you actually shouldn't make money You get you know you should burn as much as possible There's a funny thing that I wanted my um one of the investors that I spoken with Maybe five years ago I asked this this lady that works for private equity So hey, what do you think is our biggest risk? We weren't growing nicely at this time. We're pretty early like maybe 10 million in revenue But we're making money, you know, we had like a million leave at that time right and I ask you like hey, what are we you know What what are we missing like what's our risk? And she said your biggest risk is to be profitable because then People are gonna value on even them multiple and not on revenue multiple You know, and I was like how screwed up is that like so I mean this is this is this is where I think it's interesting When when and I think you should tell the story when we're talking about that you were and she wasn't wrong actually Probably because when you're in January you're all getting an offer Yeah, and then that offer changed by the same buyer. Yeah, yeah, I don't know if you can yeah, I can't I mean I can't say the names But yeah, that is right like this was well. This was in 2020 right? So I've never I've never really operated in the business where you're not trying to be profitable So I've never really experienced this but so explain to me why somebody who's VC private equity looking at a company. It's not profitable. How why do they value it at a multiple on revenue? Well, because I know there's no multiple on EBITDA you can even you can you value by the space If you don't have the measurement of profits it happened with with Jeff Bezos Jeff Bezos was Convincing his people for 20 years that he should not be turning profit. He want to take over the He want to own the fulfillment So no one would be able to be in him and they were furious that he was the most hated person in a boardroom every time He would come in but he was he was standing his ground until he turned profit. He took him 20 years now That kind of like change a lot of perspective for companies That's the only metric that you can even know it is not but for companies in the you see It's different when you're when you're not profitable on the sass Because you have 95% retention or whatever year of a year well gross margin is like but then when you also like nine When you sell a particular product when you sell a particular goods and you actually pushing money out The engine has to make sense and it's like don't worry about the engine It will make sense once a open another 17 locations and the logistic is going to be cheaper and so it's very hard It worked for some and it modified the whole industry mindset for investors to say don't show me your profit Because that's going to be your judgment based on what else because I mean if you think about it right if you're an investor somebody's showing your business And they're like hey, this you know, we're 10 million revenue losing money like whether they're losing a million or 25 million How do you use any of that to value your business? You have to look at the revenue and you have to like a growth And you have to look at you know the industry comparables right but like in our world You know, it's it's in software where you're losing where your gross margin is 90% or 50% or 70 whatever But you're losing money overall because you're investing in acquisition It's like you can make that argument somewhat that in the future when you have enough of a customer base You're gonna turn profit, right? I mean, that's what Uber did a lot of yeah, I mean this well The crazy thing is a lot of examples where this worked But you don't hear about the 90% of the examples were that what you do sometimes I mean that was a joke you don't work you know bolt yeah, so they that didn't work for them I think they were I think I think it's I don't know both bolt is a payment processing uh Software basically and they basically grew with ridiculous valuations. I don't think they were ever talking about fast Fast or in my case bolt was a competitor. Excuse me. Yeah, so fast did this. Yeah, and then the billion dollar valuation Yeah, I was like billion dollar valuations They were 300 million dollars and a billion dollar valuation would bankrupt like a month after they raised that round Something like that, but that was the issue right so they were still software And I think they're I think their revenues were like I'm gonna get this number up It isn't like the hundreds of thousands per year. Yeah, that there was nothing especially like one clique Okay, they're right 10x their revenues like but that's the and like that's you know because there's been so much money thrown to venture Like that's just you know forcing these investors to invest which is artificially driving these valuations up Which is forcing the entrepreneurs to spend money which they don't necessarily need right so it's Accelerating the cycle and there's definitely examples where it's worth great, right? So you know that all be like Amazon Was kind of the pioneer in that and it's worked well, but like I think there's so many other businesses where Or verticals that you just can't do it right or you know like some of our competitors exactly in a gross negative margin environment They're claiming like oh once we get big enough and we'll you know have all these customers That's when we start making money, but I think tree is a great example if you look at tree which is a dog Online pet store Chewie was acquired for 3.5 billion by Ryan Cohen and he sold this to forget the name of the private equity that owns I think petco and or or the other And then to the public you get to a point that there were 30 billion dollar valuation and then they follow for cleave But what once he turned you be that driven because there are no it's still not profitable everything they've ever made They're losing money the actual engine is not profitable when you ship For the 70 pounds you have cogs. You have like you have everything. Yes. Yeah, so I mean, but it's it's like a musical chair. I think that a lot of investors are playing where they said okay They'll be 16 rounds or so. I'm gonna just jump from this one to another round. Yeah, can I go and I still but you know I'm gonna get out before anybody It's a mission of a Ponzi scheme Yeah, it's technically not a lot of underlying value which I mean, it's it's you know, it's funny But like that's what a lot of ventures been like last couple of years, right? It's like hey, I'm investing in a I'm just hoping somebody's gonna invest pedal higher valuation in C And I think that's where we're gonna be up for you know, pretty interesting realization right now in the next couple months where All these people need money, but nobody's gonna give them the same valuation. They've given them six months ago Nobody so we're gonna see a lot of I mean, you know, there's really funny memes now coming like around you know around venture Which is just like you know people begging for money and VCs is just basically like yeah Like we're not giving you the money at the values and you show them all the great business that this time. It's actually working Yeah, yeah, so it's you know, it's a tough tough time What are some of the the biggest fuck-ups that you've made as you scaled? Let's go through some of the things. I love that people love that. There's so many them I'm about tell them about the one where you're on on some on black Friday Tell them the black Friday scenario. Yeah, so I mean, you know This is logistics so there's a lot of fuck-ups all the time like you're working with people and they always make mistakes It's it's a it's a really interesting industry, but the the what happened on black Friday This was maybe 2017 and we just moved into a new warehouse in deer field Just like 30,000 square feet and then we're operating and black Friday is obviously the biggest day of the year for us Right like the sales go through the roof and we hired a lot of people and like we're just good ready and then I was actually in North Carolina somewhere and I just get a call the day before Thanksgiving Which you know, obviously that's the day before black Friday And they're like hey like we've got you know, we've had a little bit of an issue with With power and we lost power and you know, we think it was gonna be up like in two hours Two hours that I could call and like oh the electrician came and the transformer burned out Um, and there's no way we can replace the transformer until the morning I'm sorry until Monday morning, which was this was Wednesday before Thanksgiving right and so like the like None of the stores are open until Monday, so you're gonna be not operating for five days now in any other business I probably would have been okay for us though like we literally we weren't operating for those five days like we would be out of business There's no question because you get so behind that like you just can't hire enough people to get out of it So I flew back, you know, we looked at the situation. We're like man like we're screwed like what are we gonna do? We ended up doing is we ended up like basically cutting through a hole in the warehouse through our neighbors plays And we tapped into their uh, we tapped into their like panel like electrical panel And basically ran extension cords all we I sent my like 20 people that I had like all two different like Walmart's and Home Depot's and like But all the extension cords they have so we bought I'm not joking like 10,000 feet of extension cords brought it all back Ran it from that one freaking panel into other warehouse and just connected every single peripheral into our house like Packstations scanners Wi-Fi internet everything right because the the things burned down we couldn't get into replacement So we're like over that power we can operate So we you know it took us I don't know a whole day to kind of do that And like it looked like Honduras in there like you had just wires everywhere right like it was just like in this tree So just you know I mean it was it was crazy, but it was Great to kind of see the team come together and like really solve this problem that seemed unsolved by the time and really saved the business Like it was you know we were I mean We had a one-day delay, but made in and you know, and nobody could get really the only nobody could know But it could have been pretty detrimental, you know I think that you know like doing stuff like that is what defines like great entrepreneurship right because a lot of people When they when they hit a wall like that they don't think of I mean even when you were closing customers at CES Like there's like attitudes that make a good entrepreneur because you look at where you came from where you're at now And everyone would be like oh, you know you rode the way of a Vcom and dude There's a lot of ways you could focus up along the way. Oh, yeah, that was a big way. Yeah You know, it's another funny one like this is Maybe not as well. Well, it's pretty funny, but it's it's not as like that was a fuck up like we so obviously the biggest issue in our In our businesses like you miss you know you ship Somebody else's inventory to the wrong customer right and so like you have 100 customers in your building they all carry totally different products right and so we would have You know, we would have products that would be like like pet toys We would have products that are like t-shirts and we were like baby, you know clothing or whatever Hey, we would have a customer Uh, that's that's a it's called catalytic box. So actually local company great business right they sell products to like cat ladies And somehow and actually like I almost still think it was like intentional because this lady right like we ship her out She ordered a like a cat lady box with all these products And we accidentally ship her a t-shirt um from like an influencer Which was like this this like young kid that like is like a youtube influencer and it said pussy slayer on it And we're just like Holy shit and we saw the picture, you know, we they she's and she took it so well She was like, you know, like I love my cats like this is no funny and just like It was literally like like Oh my god, sure, right and this this I just imagined this Huge ladies and we're in like middle of Idaho, you know, opening this excited for this catalytic box. The open business is pussy slayer on it And like it was the most funny hilarious mistake we made and they were very like brave about like taking that but we did have you know scenarios Where we accidentally shipped like a strap on to um, you know a kid that ordered like something like like Unfortunately and we bite, you know, we've been obviously processes around it to now not having again But you have some of these like most random things that happen that are just you know about about those those Mistakes or things what when we had our customer service. We had stories and we thought oh, we get some stories with customer service So we brought our CTO that had a dating site and when we thought we know We have some stories he told us his stories on his dating sites Yeah, ridiculous stories on his date. It's like listen and this website of yours. What's up with that? I'm taking this girl on a date and I'm buying her dinner. I'm dropping her off, but she doesn't let me go to her house Or she doesn't want to come to my house. You need to call her and tell her to come to my house Are you serious? It's a good customer service. We got this guy probably watching they show up. Yeah, it's funny Yeah, it's it's fine. We had One time one of these ladies sent us an email and she said That was early on and when we didn't know what to do. I had I had always a solution So she said listen, I've been subscribed for 12 months getting your boxes now I never really use them and keep him my house. It was burnt So what are you gonna do give me the money back for my boxes? So it was all fresh for us and I said you know usually you should tell her look. I'm sorry, but call your insurance, but Call Ipsy tell them the same story see what they're gonna say that was early on So then Ipsy came up with the response and then say it's exactly what we said. It's called your insurance And we would pass it on every time when we had this we also had the girl that was saying listen You guys withdrew my money, but I didn't have enough money in the banks and now I ended up with this guy I got knocked out now I'm pregnant you guys have to take her off the baby now Yeah, we had all kind of crazy stuff. How do I have money in the bank have to do it? It's they're trying They try oh, but you know what like I get I get I get messages you you're surprised I get I mean, I would say probably a couple of week now in check You know just like like people have seen obviously the news articles and everything and like don't They'll just email me random on on Instagram be like hey like you know I have a baby and like I'm a gambler and like I really need to borrow $50,000 to like building your house And I'm like okay cool like great like would love to help you But don't think this is the way to like do it and you know, it's not like Yeah, anyway, it's just not customer service. It's just people hitting you up for money Yeah, I don't know about the random people right like that happens to me too, but it's just weird It's very strange, but I mean, that's probably a whole bunch of scammers too, right? Oh for sure. Yeah. Yeah. No, I'm sure it's true Yeah, I need to connect you with this FX trader guy like you're promising me that he can make me billions of dollars. I have a good binary options for you Yeah, I'm often straighting up I'm sure it's gonna work. I have a question It's interesting because you both just mentioned like these like customer success customer service stories How involved should a CEO be in customer service? Yeah, that's a good question. I think it's very different in a beta c versus B2B environment They're gonna be to see environment where you've got thousands of customers like you have to You know, you can't like I mean, I think you might be able to take calls, but It's very hard to stay unbiased because you have 2,500 Employee 500 employees. Yeah, so I mean you you can be obviously removed But some people still try and I think what's important is the last complaints I think what's well in a beta c world right like not our business But like when you have tens of or hundreds of thousands of customers like I don't think there's a way I mean you can take a call for fun like every once in a while But I think in order for you to truly make a difference like you need to Just measure the right metrics and then ultimately help improve the business according like what people are complaining about In our business we try to do the same thing But our business there's a lot more weight on the bigger customers So like I'll you know have a personal relationship a lot of the bigger clients They'll know personally and then you know, I'll try to spend time with them to try to really understand Not necessarily like individual problems, but more what are whether macro things that are Where we can be better? We can help them better. We can create a better solution Right like what are the things that they're seeing in the industry or what are the things that are bothering them that we may be able to come with the solution for right So I don't I wouldn't necessarily call it a customer service We're like I'm like hey this package like didn't ship like I don't really do that Although I used to a lot to kind of try to understand what You know how the product is actually performing but now it's more What are the patterns and then how do we make about a product based on the feedback? But I do think how do you do that though? How do you keep it you talk to yeah? Yeah, so it's like the right data right so you know categorizing tickets and complaints and like really understanding like what are the different segments that people like the way that I'll give you a specific example right so when people complain we mark a ticket Like we kind of measure the the mood of that ticket right like is it a question? Is it a you know? Is it a bug is it like hey? The customer is really pissed because we screwed something up like if that's the case we kind of caused to provide that way And then we choose additional category like what happened? Is it something we did or is it something misunderstanding whatever and then I'll have a reporting to understand Okay, like 10% of our tickets are all you know people that are mad and and this is the breakdown of like exactly what they're mad about And then I'll typically productize it to say how do we make these better right if it's the wrong product ship to the wrong person You know operations gonna own it. It's typically going to be tied to a silver metric around accuracy And I'm gonna hold them accountable to improve that metric if it's a part of your meetings like I know stand-up meetings or something like that Yeah, so we'll do so I have like executive one-on-ones with everybody once a week And then we'll have like to one executive meeting with everybody These are more typically like well, we'll do this not you know, we'll do this once a quarter where we do our meetings so we'll figure out like what are the things that we can improve our customer experience and how do we You know, how do we just make people happier overall and and that is driving some of these initiatives You know, it could be like we need to hire more people to have us like quicker response time right We need to really focus on accuracy so that we don't have these Pussy Slayer shirts shipping the people right and like it could be could be any of these things And there's always it's a little bit of a guacamole because like there's million things that are always happening So you got to prioritize and it's frustrating because you want to fix them all But it's just not possible right like you got to just pick the ones that you really want to focus on get the team behind it Put a knowner and and then just Run with it and how do you how do you stack rank like the highest lever book like highest opportunities or highest leverageable opportunities When you look at all these different problems we try to quantify it based on impacts or like typically It's going to be dollar amount of of like the people that have issues with it like what is the impact if they were to leave shipbox right so If I have one small customer like complain about something then nobody else does ever complain about it's obviously going to be ranked Lot different than if I have three of my biggest customers complaining about one of the specific things So we try to always put a value quantifiable value to where it's How many dollars are at stake to figure out what we're prioritizing what was one when Skytask you about mistake right now. Let's talk a little bit about more like a strategic big-time mistake or something or a missed opportunity that you have that you said I should have doubled down on something else. There was anything like that that you should have said well Yeah, it's you know, I think about this a lot because I I always I mean my mindset in general tries to be I don't want to regret things because like I want to I feel like We are where we are because of the decisions we made and like could have been in a better place like maybe But I am also pretty happy where we are so I feel like Any decisions as a learning as a learning is like wrong. I think we have obviously pushed us right but I think it's um I think it's more about Highering the right people sooner. Yeah, which is kind of the common thing of I think everybody says that but it's You know like we hire our first CFO when we were I think 70 million dollars of revenue, right? Which is and I was doing a lot of the quick books before that and so getting the visibility getting the quality of data and getting like really Understanding the business from a financial perspective sooner definitely would have been pretty impactful You know, I think Maybe like COO has been a role that I've been just trying to hire forever and it's taking me four people to hire the right person Now we have finally the right person and that's for me So if they listen all the other ones they know they were not the right ones. They yeah, that's I mean I think they would know anyway, but But that's been the hardest role for me to hire for and it's taken three years and you know, I wish I mean I don't think I don't know what I would have done differently, but I wish I would have hired that person to matter of luck And it's it's a matter of well It's also the size of the company because like I could have never attracted the guy that I had today two years before that Right like you would have never been interested and I think that's always a it's always a timing thing, you know, so Strategically, I think like honestly, like I think we're like I'm pretty happy what we are So I don't think that would have been like major dramatic changes that I would have done But you like you okay, so now Like if you look at where your revenue numbers are at now And I don't know if it's public or not. Is it or revenues more or less public? So you said yeah, yeah like over Yeah, like 350 okay, so if you look at 350 million dollars, that's significant I mean if you're talking about CFO at 70 COO figuring that out right now It's taken you a while to bring on the right people, but a point you made before was very interesting How you have this like incredible lifestyle while you're still running this business even though you're still doing In theory all these tasks, right? So how did you build this business so that you can still maintain this lifestyle? Yeah, that's a great question So I think I mean I I love to enjoy life so like everything I do is is always Um, I just want to have a great time and and so I try to design my life so that it's not in a way of like I wouldn't see myself and I did this for the first three years, right? Like I didn't do anything like I just worked my ass out for the first three years What I realized quick enough is that the more I let go the more I can enjoy life the more I can travel the more I can do different things. I've never been able to Not until recently like I've been able to completely disconnect where I would go on a trip and I wouldn't work But what I realized is that like a lot of them And this is the big I think this is the most difficult job for any founder to kind of transition from that founder to CEO We used to talk about this old and I would go where like there's explain that point to me What does that mean founder to CEO? So so like a founder wants to be in every decision, right? They want to control everything they want to like they're very associated like that's the business and them is one thing Where a CEO tries to disassociate themselves with the business has a little bit more of an objective view Delegates more and really empowers people to make decisions and a founder is not scalable, right? Like you can't scale that mindset over a certain size of a company depending on the industry Where a CEO like they understand the value that they can't fix everything, right? And they have to empower the people to fix their own things and hold them accountable to fixing them And that's been really difficult for me. I mean it's taking me really two years In in a lot of departments to kind of let go and empower these people to make these decisions Understanding sometimes they're going to make the wrong choice, right? But sometimes that's okay if I feel like it's too big of a missing then we'll like get more involved I've been like try to ultimately make sure that it's not a detrimental decision for the company But by doing that and and I've done it in most departments You know kind of it's like a progression you have a best person for HR You have to step away in HR, right? Like you have an amazing sales guy you can step away from sales Operations for me has been like one of the latest ones that I you know been finding able to step away So that's been taking a majority of my time but I've been always able to work or do enough to like when I was remote or traveling like I've been able I still when you know I was working and And while I was having an amazing time And it would recharge me to come back and like get to work and just you know put A lot of hours kind of back into you know really back into the And you feel like like when you take that time off it allows you to operate at a higher capacity than it allows me to disconnect from the day to day And gives me a different perspective because if you're in the office every day right for whatever you're straight Like you get so inundated by everybody's asking you questions You're always like in the weeds you're trying to solve problems that Or just like fire so it's just like firefighting everything as a fire you trying to just kill these fires But if you get away and you don't have these meetings right and like you have to like you actually have really a time to think about it You get to get a different perspective on the business. Yeah, I found I found that on the day to day If I would step outside of my office and do stuff some restaurant I would be doing all the stuff that I don't do that or higher level Then Turning off fires because people would walk into your office. It's not the time. Yeah, so you can you yeah because your your mindset is Important and urgent and every time like you know it takes a second. Let me do it It might not be even urgent or important and you get yourself caught up with little little stuff So unless you're in a meeting or something like that people would come in so I I found it absolutely true That you get out even don't have to take a trip Doing snowboarding some but you just walk out of the office you do it in a restaurant Spend couple hours all the emails you needed to do all the new opportunities for tomorrow there And then you go back and you make sure you know what else help me a lot To kind of shy away from this that little interruptions of the day Simple just try the least of what you gotta do Write a list and it took me a while to actually say okay. I'm not as productive. I'm getting to the same point Just try the least. I'm busy now. Let me finish this is it that important right now. Do I have to do it today? Okay, no, okay All once they tackle all those I'm free to do everything else. Yeah, it was it was helpful I mean, I think structuring overall like like I'm a pretty organized person Really try to you know, I'm big in working in and like I use a sauna for everyday life I use like obviously the community of the company but like Everything I do my day when I plan it I'm you know, I've tasks that are like urgent that I need to do that kind of more tactical But I also literally create projects that are more Strategies that are more brainstorming where I like pulling people and I love to balance both right So like I really love getting into product meetings and talking about like hey, this is our problem I bring in stakeholders from different parts of the company we brainstorm we come up with a solution and then From that right I'll go into a meeting like a strategic meeting and we say where do we want to be in five years as a company From a margin growth, you know revenue customer profile and like balancing those two is super important Sometimes like because you're into day-to-day and like especially if you're killing fires all the time like It almost seems like the world is ending right because like everything you're doing is problem solving and even though you love problem solving Which I do it just seems it just makes your brain so focused on these You know little issues that it's very difficult to kind of zoom out. Yeah, where if you leave People that have these little issues that are gonna go to you. They know you've gone right and so like you have to Finally kind of like look from above and look at you get to a point that they already know not to bug you with little things and there other people and unless They come to you. Yeah, that's where the the health of the company starts falling into place where I mean you said you you found the CO and I can I mean we spoke about this before Eric you know Eric It was in instrumental right I get lucky I get them early on when I was in 15 at 50 million But it was pretty much sticky enough a lot of that noise and and it was also helpful because Sometimes you need someone to tell you I don't think you should be messing with this. They're bigger things to do. Let Julie take care of it. They're the director. Oh, yeah, all the time because the thing is with Eric He was going with he was working chewy with Ryan Cohen. He was seeing the transformation and he said look We've seen this. We've seen the the good bad and the ugly where where founders or funders There's like that that CEO disease the funder CEO disease, which is like can let go you have your favorites all that And and it's good to hear it right you hear it one time is like But that's the I think that's the most difficult thing and it just really depends on the personality of CEO, but it's like It becomes you know, this thing that like it's really lonely at the top right and I think that's so true because most people are Never going to give you honest feedback as a CEO And I actually still to this day haven't really found a good way to get honest feedback because I try to ask for it all the time But like if I work for you like it's difficult for me to tell you like hey you suck at this you shouldn't do this Like unless we have a really strong relationship when we work together for a long time So I have few people in the company that will try to tell me because it's actually the opposite Everybody's trying to kiss your ass all the time right they're like they never want to tell you the bad news They want to make themselves look in the best life You know, it's it's so it's difficult to really see yourself who you are Which I think is one of the most difficult thing as a CEO is to actually get honest feedback about yourself and figure out how you can be better But what about your partner is your your investors? They I mean they they hide levels Yeah, but they they don't know how I operate right like they you know We I see them at board meetings and they have pretty good input strategically But like they wouldn't be the ones telling me like hey This is not the stuff you should be involved with or this is not how you should have stated this It's not you know should have yet that this guy like whatever that is right like it's So I think I try to be more reflective to really become and I have a CEO code you kind of helps me with this But you know, it's like it would be super helpful to have somebody on the team That's like and I use my head of HR Which actually used to be head of HR for truly through for a long time to kind of coach me on these situations where it's like Hey, like don't get upset like think about it step take a step back And then let's have that conversation next week and that's important because you're always passionate as a founder Right, and so like you want to have this instinct of solving problems and everything is a nail You know, do you feel sometimes it's time to say no because I mean you said look I know what to strip down. Okay. Now. I don't need to do a jar. Do someone good I don't have to do customer service, but operation I still couldn't find another me or better to go and take over so I'm gonna stay there Right, and then you find yourself going to the granular details and tell you I don't deal with the minutiae Someone comes to tell you that Like well if I don't deal with this type of minutia that minutia is actually important So if you kind of like make those You still find yourself in those Because I think what and this is I think we're a lot of people leaders fail where I know I've seen this in our business where some leaders Just kind of want to be high level to like on the head of sales like I don't need to understand how our like sales guys Take a call and like what's our value prop or whatever right like I have massive issue with that No, no, it's a it's a it's a biggest issue and I've hired the wrong people Sometimes right because they'll think like oh, they're this entitled like VP person or like whatever and it's below them to like get down in the Weathe and do this stuff right and there's so many people like that and I have a huge issue because in my mind like if you are overseeing a certain neighborhood you should know and be able to replace any single person on your team right yeah because you can't answer a basic ticket As a VP of customer success then like how can you coach people or like keep them accountable to answering these types of tickets Right like it doesn't really make a lot of sense and so I think that balance between being able to do a deep dive when you need to Versus staying high level and delegating to your leaders is extremely important and you can do you know You can't just be in the weeds all the time because then like you're not really useful But you have to keep that balance because that's the only way to really like scale a business You know, let me let me say something when you when you grow a company And this is where I want you to tell me how you guys do it I guess the challenge is once you start tearing the organization from being very flat It was just you Johnny and managing a bunch of people now There's just you then there's sea levels and VP of course VP How many by the way how many tears do you have in your In your organization? So it depends on the department like you know most I mean we have VP's directors Is it from the lowest to the CEO how many levels? Yeah, I mean it all five six like On average, I would say five like operations operations is like nine for example Okay, within them they have okay, so they have more okay, so then Do you find yourself being more structured with meetings where some people spend more time in meetings than actually working or you're able to dodge that and and still keep yourself More like back to one of the company problems. Yes, I guess that 2500. It's a yeah I mean, I think we're definitely Yes, I think we do I think we're slowing down in a lot of the decision-making ability that we used to have like agility I think any like innovation is tied through agility and I think agility is so important in success of any business The whole reason why companies big companies get out competed by small guys with no money is because they just You know, they're like they're able to innovate pivot on the spot and I One of those I ask a question by the way. I'm sorry to cut you off Because when you said quarterly review meetings that I have it's like that was different once you hear that it's kind of like a A formula. Okay. There's the annual the semi-dress quarter leaders Just all those meetings that that kind of give me stomachache when I hear It's like, you know, it's funny because like and I think there's a balance right because like I hate the whole concept of oh We're gonna be cooperation things gonna be slow. We're gonna be all these like bullshit meetings that everybody has But at some point though like you realize there's no other way to run a company because if you get a certain size You have to be able to have some sort of structure Otherwise like the company is kind of fall apart. So like even if you're CEO, they're like doesn't want a structure And I don't you know, I hate having me weekly meetings But but if I don't I'm never gonna actually absolutely you need you need to connect everybody you need bridges You need to make sure that everybody's on the same page, but The the challenge of I've seen with meetings is because I've seen both sides and boxy charm. We were small amount of corporate people Then we had lots of I mean our fulfillment wasn't done by us or that cuts off hundreds of employees and if you took you know If you look at customer service here, we had people in customer service But most of them were outsourced or hundreds of them all but the idea was also like about a hundred and fifteen Police right running a five hundred million dollar business and then when we were acquired by ABC Similar story right, but they had about five hundred employees But still similar story almost the same revenue girl about twenty percent more And it was all night and day and when they said, okay, you're gonna manage boxy charm After two weeks. I said, okay, I'm not doing that. That's it. I'm not stealing the meetings all day from every day All day and it was just all my team had to be in meetings all day and none of them did the job So Obviously, it's needed once you have more people right they had sixteen layers from the bottom all the way to the CEO We had four or five or something like that. Yeah, but the the question is When are you start seeing that you're overly doing that so you stop yourself from it? How do you know? Yeah, it's that you feel it's obviously something we're dealing with right now, right? Because how do you know whether you have too many layers or not too many layers like too many meetings? I need to know too many people in the meeting too many layers leads to too many meetings because you have to that is that is yeah And so like great example in our customer support team right like we you know We kind of merged when we acquired one of these companies that we bought we merged the support team So we have about 150 people on our support team and it's a mix of customer support account management Fairly complex stuff, right? But you've got 150 people and originally, you know, we would have like one person that would basically like or a team of like four people And we would have an account manager and then maybe they would report to the VP so like three layers So I then that we kind of did a real work early in the year Somehow, I don't even know how this happened, but we like basically created like six or seven layers And then what we realized it wasn't necessarily the meetings in this particular case it was the time It took to make a decision because If Joe here didn't know what to do he went to his leave you right like that guy didn't feel empowered so he went to his like Manager that manager didn't really know what to do. So I went to the direct the junior director and then a senior director And then by the time this all happened a week went by and the customer like was like where is my answer right and like There's a balance between empowering people and like getting too many approvals and you need to have structure in place where You know, you want to you want to balance between empowering people and when you have a situation like this Okay, when you said okay a box is not being shipped right sometimes the proper way to To structure a meeting makes more sense because it's a similar situation where it's so after we were acquired were There's so many meetings so many people but people didn't get their boxes on time Complains months and months goes by and then the most important part was Every day every week should be a meeting where everyone is synced or there any delays Who's gonna be delayed why are they gonna be delayed can we in advance preemptively go and contact them right It wasn't passed on to the next business. So ideally is that it's not about the and I guess the challenges like not about How many meetings is the substance of the meetings and when you've I I always looked at this as from The morning until say 2 p.m You get to make sure that those people work the actual work and do practical stuff Everything else after pushing the meetings because the you're the most productive before you have your lunchtime Yeah, so you're more creative more passionate meetings is just draining Yeah, I mean, I think depends on the role right like this you got individual contributors We should spend most of their time working I think the higher up you get the more meetings you're spending time with but like if you're VP of support Right like most of your day is not gonna be actually working. It's gonna be Managing your team and so if you're managing your team you have to be meeting with the individual team members Maybe you meet with customers, but there's not a lot of like Busy work that people do in those roles and so I think there's a balance between the my mind Has always been creating a structure so that you don't have repetitive meetings about things that can be solved Separately outside of the meeting right in my mind a meeting is used for I need people's input or I need the brainstorm about a problem We have how do you come up with solution and then let's take it away and actually work on this right and maybe we meet in a week The brainstorm again where I think this breaks down is like Hey, like we need to review the boxes that didn't ship and then you bring 10 people in every single time Like that doesn't make sense to me because it's like that's the same problem that happens every single week Like you don't need 10 people for that right like let's have a report Let's have one person own it and then let them figure out like what they're doing Instead of trying to pull in people from like 20 different places right So I think there's a difference between like repetitive Meetings that I don't really I'm not a big fan of where are trying to like solve a repeatable problem versus We need to come up with a solution to a problem like this that will then Prevent us from having those meetings in the future and that makes sense on the side note, you know, we check Republic This is the country that consume more beer per capita than any other country in the world Anomaly of check people When you have all these layers, I'm curious as to how you came to all these layers And when I think about why you would add on layers because you want to incentivize people to join your organization You want to show them room for growth or whatever and then you want you basically want to help them grow in their career But then you have like the seven layers that you didn't even So it's yeah, so it's it's a great. That's a great point because I've never thought about it that way right like I've never thought about I want to create layers so that people have career growth right like and and this is my Like weakness where I don't really Think that way for people where I'm like oh, I want to hire people so that I think I think I don't think you should actually I don't think you should do that. I do think there's an element to it, right? And I'm learning yeah, and I'm learning like especially from osios work when company with 25,000 people where like you need to do that Otherwise, you start having big retention problems So there's definitely world without any sense But I've always thought about it more like okay like is this person Way too overwhelmed with what they're doing and if they are that means most likely they're managing way too many people Or they don't have good people that are under them so we need to put a layer in between yeah to really help them like Bridge it, right? So like it's never for me at least it's never been like oh, we need you know this person's like Ability to grow like I think that like with us because we've grown so quickly There's always So let me just articulate this so you saying in the way you've seen the growth was okay One manager cannot manage more than six people now we have already 12 okay We need another manager, but someone has to manage once you have three managers Someone has to manage them now as a natural growth of people now you're going to go and have another layer Which is a director otherwise you're going to have a manager managing two people But because you you need to have a bunch of layers and it makes no sense I guess and sometimes we'll be fine ourselves and it's like we have one person managing one person And then they manage a team of three people right now like that doesn't make any sense like why that's that's that's a promotion for career progression Not it's a bullshit promotion Yeah, people wanted a title to put on the resume. Yeah, but the right reasons You know value the company right so your junior director managing the same reports director ports is a senior director I mean no to the director which reports to the senior director Yeah, there's already extra layer that junior no junior and then a senior So this is the thing where like I just get so tired of these corporate bulls It is so like like politics, right? So like politics I've never heard that word in our company ever until I feel you started doing it where you know Now it's like man like we can't do this because there's this and like how you know like we're here to run a business Like we don't and I'm not the most empathetic whole leader I would say like I you know, I try to get should done and sometimes guys I'm about to go on a skee vacation. Please finish it up right? No, but like you know like as My mind says like hey, let's get this Thing resolved yeah, and and I kind of sometimes like Don't really worry about people's feelings as much which Maybe especially in the U.S. It's a little bit of a problem If you if you if you're aware enough of yourself and how you lead then you find somebody that is better managing people Yeah, exactly and it's and it's you know like it's and I'm well aware of that that's totally my weakness I like something can be pretty tough and it's not the best for Organization for culture and all and stuff, but it gets should done right the opposite of that Which is the things that I also hate it's like you know you you suck at your job and I don't want to tell you that So I'll pay you on and back and say hey, you're amazing But like this thing like you know, can you please do it better next time right and that doesn't change anything either So like I think there's a balance between Being you know walking around and panicking. I don't think it's about great. They're doing I think you're doing the right thing because once you actually give a compliment People cherish matters. Yeah matters, right? Yeah, you know, it's not a cheap. It's not a cheap compliment It's a you're being right like we're not used to even as kids like our parents don't praise us for doing Normal things right? Yeah, and you get in this like a war culture that is typically in the U.S We're like every kid wants an award even if they're last. Yeah, so it's like everybody wants an award or they want You know to say how great of a job they're doing even if they suck and so like the the school of thought I come from and this is more Where I grew up is like you get a good job or thank you if you really do a great job If you just do you a job, I don't tell you anything if you suck I'll tell you suck and it's not like again I've been learning to change that a little bit so I'm more You know even people that kind of do their job like I'll tell them they're doing a great job And it's not the most Doesn't make me like doesn't come naturally to me and it but it does produce results It doesn't always create the best re-enforce the status quo does produce results for you I think if you have strong leaders it does if you have people that need that right like it's all about recognizing people's Like like egos because like there's people that are very sensitive and they Want praise all the time and then I mean John listen I've been to your headquarters and I can leave there you have these huge screens When you walk into his headquarters here in deer field what was it for a lot of deal? It's you walk into I think 250,000 square feet But he probably took about 20 or 30,000 square feet just for a space where he met at a loft and in between in that section He has a stage And there is you know those TVs that are all connected I'm talking something like yeah 18 feet like a sports bar or something Yeah, no one big screen has and then he has a whole arcade area and and cables and the any throw parties over there You want to work you do so you're talking about okay, so listen That's what if I you're not in a great job. Yeah, I'm a super nice guy right overall But I do expect a lot from people right and I think that's where the balance is and and you know And that's why like I need people especially my executive team like my executive team knows that I can be tough But they also know I'm fair right like I'm not tough because I you know because I like if I tell you to do something And then it doesn't happen that I can be tough But I also appreciate when you do something right and I that's why honestly like having that layer of really strong Executives under me has been super beneficial to everybody right because sometimes like I get emotional and I get you know I want to get you done and sometimes people's emotions get in my way. They bought from me. Yeah And it's been really good because you know like it's it doesn't my type of leadership doesn't work for everybody and it's and it's Sometimes especially for broader population. It's not always positive right tokens like that too Like you can get pretty riled up. I don't believe I don't believe in cheap or polarity I believe I believe in being who you are and I'm not trying to go I'm a pretty awesome person I think I'm a fun guy ask my ex-wife. I'm sure she's gonna say that but but I definitely agree that That you don't get things done just because you give flowers to everybody you have to go and explain to them Look, that was the mistake you go with substance explain why but you also know how to manage people based on their personality For sure, absolutely. Absolutely. Yeah, because this is not zeroes and ones right you're not managing computer You're gonna have emotions people are not always gonna be the way you want them to speak It is what it is and it's fine as long as they come with substance. I think the the Point I'm taking from what you're saying is the yes people is something that I couldn't stand people tell you You write about everything and I need your fucking feedback. Don't go and tell me I'm right about everything I want you to tell me why I'm wrong and what I used to say is look if you said I'm right And I do it and I fail I'll come back and I say okay, you're no longer giving me leverage Just remember that I'll go to someone else you know I want you to tell me and I the ones that I kept with me across a long In the throughout the journey or the ones that would debate me all the time It was it was it was easy for me to be dead. It's also super important to be able to like be self-aware enough where you can take Negative feedback and yourself aware of if you made a mistake And I think it goes a long way when you admit to the people like let's just say that I think you fuck something up right and I'll come and Tell you fuck something up and I'll go around like hey like you you know We need to this is how we need to be better whatever and if I find out that as wrong like my assumption was that you screw something up I actually didn't it was like something else happened then I have to own that and I have to be very direct about Hey, I'm sorry. I fucked up. I thought it was your fault. It really wasn't your fault like I apologize and then move on I think a lot of people have big and a vego where like they just don't want to do that and then it screws up the culture because then it's like Oh, this guy's always right and that's like I will the first one to admit that I'm wrong You know, I'll question everything that like five in opinion I want everybody else to validate it or have a discussion about like okay. What are we doing next? And I think that's where I've learned like leadership is so important because You want to make a firm decision when you are making it as a leader But I think having everybody else's feedback and like thoughts before you make that decision and make like really thinking through it with them Loops them in the process and then make sure that everybody's bought in right where like if you just You know if ten people tell you like oh, this is the wrong way and then you just go for it anyway Like I think that doesn't create a good culture because then they feel like it's not one team. Yeah, I gotta I gotta ask you now a question that probably everyone asked you that before because I know anyone like I get those questions When you cashed out What was your feeling? Um, why why did you cash out? I guess that's that's also a good question Well, let's start with one question at the time Why would you want to get a couple other why would you get one to get a couple hundred million dollars? I think it's but we can go back to it. But when you cash out when did you actually process that shit my life is different How long did it take you to process? So yeah, I mean, it's a great question, right? And it's funny because when he started my whole Goal of the business was like one time at one point I want to sell my goal was to sell it for more than a hundred million And then I did you know that's kind of funny back in the napkin math that like if I sell it for a hundred million I'll have five thousand dollars every day for the rest of my life through to live my life Um, soon, you know, then I realized I was actually not works, you know You first you pay taxes and then you actually can make money on your money So it was very naive like you know, I was 21 years old Math but that just you were sitting with us in the EO group and he said I need a hundred million then you can back actually I need more than a hundred million actually It's going to be enough because I'm it was it was really funny was like I want this RV to travel over the world I remember some like that. Yes, but I just bought I can grab two weeks ago. Yes, but So yes, anyway, so I just dream of like one day I want to sell the company I knew I didn't want to do the business forever like my whole life, right? We ran the process You know, we didn't really know if we're going to sell the whole business through strategic or private equity And then the process kind of ultimately ended up landing where it did meaning selling, you know, have the company through private equity And it was um, the beauty was like I knew that it gives me options, right? So like at that time like I'm you know, I've cashed out an outfit I would have not had the word for the rest of my life But at the same time I still had a massive upside For the business to do really well and so it was kind of the best of best of both worlds It didn't obviously give me the freedom to kind of like walk away and say okay, like now I'm going to You know travel through Africa in my RV for a year But it gave me enough Financial freedom to be able to know that I will be able to do it in the future And then I really have to worry about you know buying for Laughful and then For Laughful every day For Laughful every day, for Laughful every day, it's always my dream No, but it's it's so the feeling was Honestly very it was it right away when you saw the money was it wasn't really if it was it was Our process was very stressful at the end because you know We started in like the some while we started really in March and then COVID hit 2020 Nobody was doing anything so then over the summer we were kind of prepping everything talking to investors September we started getting offers we got a massive amounts of offers which felt really good, right Then we kind of narrowed it down to like five six went through the process Ultimately ended up you know picking the one that we picked but throughout the last two weeks like There was so many Things that have changed between the offers we had but you know valuations terms So like it wasn't really until the the thing it was signed like four in the morning the day before Thanksgiving that we knew We have a deal done and until that point you're like man like I can literally lose everything You know like it's like well not lose, but you know the deal you can just all the four apart and the last six months are gone So that was super stressful. So getting the deal done was incredible and Eventually when I got the money like nothing's much changed, but you did feel something after I know I felt I Mean I felt relieved. I felt You know I would say I mean I definitely there was a the temporary moment of happiness when you realize I got man like this is really cool You feel a little bit of stress maybe we don't that cash well I started feeling stressed Not immediately, but I would say probably a couple months after when I really started to think about like where I'm going to invest this money Yeah, because you realize like the money man like you know, I've got all this cash. This is great But it's a responsibility right now. This was remember this was 20 like 21 when inflation started to come up to like 89% yeah, and you're like well if you don't invest this money By end of the year it's 10% down in value, right? And so everybody was like oh you got to invest the money You got to invest the money and everything was so expensive right like Like everything like stocks companies private equity like real estate So I was like well, you know what I think something bad's gonna have it. I'm just gonna hold on and I only put a little bit of money to equities And right now I feel like the hero, you know, it's like I like I most of my investments Well, most of my money is in cash. It's just sitting in the bank waiting to be deployed Um, you know, I'm doing some stuff in like renewal energy and then couple like private equity funds But I'm just waiting for the right opportunity because this is this is a journey that a lot of us go through right It's just there is that stress, especially when you see I mean, I still don't think you said a lot of us go through and anybody listening is like No, the stress the people yeah, no, I mean the stress the stress yeah Yeah, that is yeah, the stressful part is because you you go and you see how lag drew goods went up Like two times than what it was. I mean, yeah, we want to do one shitty thing for it. It's just not a good Like everything went up Now you're only about one bag for $5,000. It's not two bags. Yeah, it's like there's nothing available Everything is overpriced nothing so it's like my money doesn't and the inflation is not really accurate. Yeah, yeah, yeah, yeah, yeah, yeah, you're not even 150,000 anymore No, but the idea is that you know that that it's a representation of the inflation and you said well Even if they say it's 8% it's bullshit. It's not really 8% because straight to buy a house in the islands right now It went from 10 to 30 no, but you know what but you know what I think is the biggest thing is the for me at least It was the anxiety of not knowing what I was doing So like you asked me anything about logistics performance like I'm an expert. I'll tell you everything right like you can really surprise me In investment or investing in general. I knew nothing about investing like I've never invested a dollar before that right like I I was managing the company's money in a way right, but it was very familiar environment I think where this threw me off a little bit is like okay, I got all this money and now I have to get into like a whole new industry With totally different rules totally different KPIs only different like everything And trying to make money in that and I think that's what it was given It was that like that you felt like okay, there are other top predators. I'm not one of them. It wasn't yeah exactly It's like I'm like a you know, I'm like a little like barista in Starbucks like I like I have no idea what I'm doing Right like this is kind of the level that I fell in that investment world So like you're a your rockstar operator. You have a great company. You know, you know a lot about operating a business You walk into this new industry of like investing money and you realize you're nobody like you know nothing You don't nobody so you start learning and then you realize every the more you learn the more you realize on what you don't know Yeah, and then more you realize like everybody tells you different things like people run really like you know Everybody has different interests in mind and like it's It's a really exciting, but scary at the same time right and so like I've gone through an interesting journey over the last year and a half I would say I'm like on that journey to 100 maybe at 10% like I feel like you know, it's I feel more comfortable now But I still it's still it's a long road. It's a long road It's hard to like even the good ones don't really know that what you what bothers you is that even the really good ones They don't always win. They don't always know. It's not like logistic that if you know you know when it's all it's gonna be okay Like but yeah, it's it's a challenging business. What's your um actually? I wanted the it's a side note There was a funny story you told me about a guy that gets scammed With the $5,000 how he got a call and there was someone in his company Get this email say hey, this is journals in the matter like three times since but three times really I mean, it's it's I mean, it's it's actually good for companies anymore Yeah, it's good for anyone that has a company to hear this out because it does happen So I'm a security exposure. Yeah, I mean it's so so basically we would have a new employee and like every time we have a new employee somehow People find out their phone number. I guess this may be when they change their own their length and whatever And then they'll get a text from me saying hey, John, you know, you're available And they're like oh, this is jam They're like, yeah, like I'm available. They all want to impress me right and then they're like Well, you know, I kind of need you like we have an issue with a customer and I'm not available right now Like can you run and give me some like target gift cards for this customer? And they're like yeah, yeah, yeah, sure and so this guy this was a new warehouse manager in California Went to target right and then bought whatever $500 gift cards And like scrapes them text them back to me. He's thinking right and then the guys like oh, thank you Like you're so amazing and by the way like can you also go to Apple store To buy more gift cards. So this guy Gets out of target goes to Apple store buys like $2,000 of gift cards and by the way the reason why it's two thousand is because they always Cap it you can't buy more than certain amount for fraud fraud is right. Yeah, he goes there buys these cards Base then he goes to like Walmart and he just sends into all these places right he ends up basically buying 13 and a half thousand dollars of gift cards The only reason he didn't buy more is because he wiped out his entire debit card account right like he had no more money in his account So that's why he stopped buying the cards and then obviously like you know then when he bought all them He was like oh, yeah, thank you. You're so good and then like he submits a request for reimbursement right to the company and we're like what the fuck is this And we just look at it and we're like, yeah, you just totally got scared like it was a total fishing scam You know, they just pretend it for a random number to be me and He didn't really think to question it and it's happened like I mean, it's happened a lot But for other people actually end up buying something like yeah Just be crazy, huh? Yeah, it's insane. It's insane. I mean It's it's something that we used to get all the time people would get in a Emails from the thing with me is that if I wanted to talk to you I would come into your desk Not gonna your door or whatever office. So people knew That wouldn't be Joe. So then I had to change my email address from You guys already want a scam issue, right? Oh, yeah, we had a different type of scam. Yeah, so we had a scam or someone Somehow got through the email through our One of the brands we worked with and they're supposed to send us a wire So I guess they hacked the email and they knew that they have to send us an email So they sent us an email in derby half Saying hey listen, we we change our email our our wiring instruction Can you send it over there now? I'm I'm in the Philippines getting a call from my see my see a four saying oh man We got to get a lawyer. Can you help me? What are you talking about? Anyway, he said yeah that company They They didn't send us the money and they said that we need to We need to go and pay them but we did pay them said wait a minute. Did you check That we actually paid them and then he said yeah, we did they just changed email address I said and did you check that it was actually their email apparently it wasn't their email Okay, so we get scammed Senor you should have did you just send the different wire instructions based on some email without calling Verify Well, anyway, it was and then we got lucky was 17 and a half thousand We called it fast enough. We called the bank the bank actually reversed it and we had insurance But it was only 17 and a half the next one was 750,000 because they already got into our email system And then they found out there was one but they actually got into one girl's email I guess that's that's how we did that we found so then they found out there was another email There was not a wire for 750 and then they said hey can you wire us by then we already knew so we dodged a much bigger bullet Something that's happened in my company Some hacker has found a way without my password because they've checked it to spoof my actual email You know, yeah, no, so that happened my my not nefake email not like a look alike like the exact I got scammed by every being Yeah, it's like the craziest thing so I never been me. Yeah, so I so I booked this was long time while this was like in the beginning right so I bought I rented a house for New Year's from my parents my wife's parents like we're all we're gonna go to this House in the mountains and I booked it through Airbnb right and then I basically get an email from like literally it came from Airbnb.com Madras like it was like info at Airbnb.com and the email had all the listing it looked exactly like in our B&D's email and it said Hey, you know, thank you for like booking with Airbnb Like in order to finish this payment because this house is in Europe Which is like that's what I thought because in Europe like a lot of times you just pay with a wire to pay for a combination Who tells whatever this was 2012 or something so it wasn't as uncommon And they're like just wired this, you know, 4000 euros, whatever this to this yeah Bank account in in the UK by the way, which was like in bark these banks So it wasn't like I was wiring the Kenya. Yeah, so like okay. That's something that weird. So I wired them the money This is the craziest thing and then they send me the confirmation your booking is confirmed You know, here's like training is your confirmation everything like the whole thing right at least there's it But here's the crazy skinny like I was so I was supposed to ride this is like from December 29th and I was arriving in December 30th My parents my wife's parents came on December 29th to that house in Austria The drove for 10 hours right they get to where the house is supposed to be The address and they call me up and they're like hey, there's no house here and I'm like What do you mean there's no house? They're like yep, there's literally like it's an empty lot And I'm just like that doesn't make any sense and so I started like digging into it I call a BME support and they're like yeah, like we don't actually have any kind of confirmation from the seller They didn't ever confirm that it's available and like sorry and they never gave me my money back Like it was but somehow that email their email was spooked Yeah, and it wasn't like I don't know how people do it, but that's just I don't know how they do it But thank God my team knows me well enough because it's always cryptic It's like hey Scott urgent. Please text me back immediately. It's like hey employee. It's Scott It's urgent. Please text me back in the way if you were a scammer Like isn't there better way to do this like don't be that obvious. Yeah, right? Like you know all these yeah, all these yeah, all those issues like you can you can totally make it much more Yeah, believe it. Well, you'll be very good at this job. Oh, you were amazing. We live in Kenya I feel like you would have like a you know like a whole rake of people and just like like those like I would have I would automate this business. Yeah, I would have built an AI I don't need any any wrong with people. I would have had a good AI that can speak better than people Can they have that no? Oh Oh, yeah, it's crazy what you can do with AI now. Yeah, you do AI years ago. I heard I heard AI scamming. It's scary. Yeah, I mean it just combines it. Yeah, it combines AI writing with it's somebody who can send an email. Oh my god Um, yeah, we get scams awesome. Yeah, it's awesome. Getting scams is awesome What an experience That's how you live your life. You just get scams and like there's nothing else out there. Listen, Jan I want to thank you for coming over taking that that 44 minutes drive all the way from the islands in Miami to And now I'm 15. Well, sorry about that traffic, you know, so great saying you good thing you do Yeah, and we're gonna probably have you again our podcast. You're amazing and continue to succeed. Cool Awesome. Thanks. Good stuff. Thanks, man