00:00

Economic Empowerment is about creating $1 where one didn’t exist before everyone wants to hire talent that is innovative, entrepreneurial, and

00:11

welcome to a brand new season of titans of industry. I’m your host, Nate Disarro. And I for 1am. So excited to be back for season two to bring you more awesome business advice, leadership principles, life hacks and interesting stories from Titans that are leading the charge in their communities. If you listen to season one, and are back for more, I want to give you a special thank you for the support so far. Thank you so much. And if you’re new to the podcast, welcome. Be sure to check out season one to get all caught up. If you’re not already, please follow us on social media at content Titan to get more content from our podcast guests and to learn more about everything that our digital production team is up to. We’ve had a crazy year like I’m sure most of you have. And we’ve had to innovate and change the ways we’re doing things as well. Also, we would love for you to share this with your friends, family, co workers, neighbors, the mailman, Uber, driver, cashier, and anyone else you think would love the podcast so that we can continue to grow this audience and inspire all types of people through these episodes. In today’s episode, I sit down with Jeff standridge, and Jeff amrhein, serial entrepreneurs, business consultants, authors and founders of startup junkie and the conductor. They tell us about the pillars of successful startups, talent, capital, entrepreneurial culture, community and enterprise engagement, the importance of having cash on hand and their focus on economic empowerment. They also talk about their best selling book creating startup junkies. Now let’s get to the episode. But before we do, our team at content Titan wants you to know that we understand the challenges business leaders and marketers are facing right now, with moving to a more virtual world. We are experts in taking human connections and turning them digital, from virtual Events and Video presentations to promotional content and advertising. We are here to help guide you through the process of staying in front of your audience and making your life a little bit easier. People tell us all the time that they are lost and don’t know what to say or do and we exist to help your business continue to move forward,

02:23

virtually.

02:24

So if you’re ready to take your business and content strategy, virtual, we’re ready to help. Let’s get your business back to business. Now, here’s my conversation with Jeff standridge and Jeff amarin. All right, well, Jeff and Jeff will refer to you as Jeff a and Jeff s. But thank you guys so much for jumping on the podcast here with us looking forward to this conversation surrounding startups. I myself, am operating a small startup here in Little Rock, Arkansas. And so to have this opportunity for me feels a bit like a free Master’s in in business education when it comes to startups. But just for sake of formality, go ahead and give us just your kind of quick 30 seconds, who you are what you do.

03:10

I’ll start the timer. Jeff sandwich. I’ll go first Jeff merace. So so I’ll see if I can keep this to just the numbers and quick. I’m a serial startup junkie by affliction not nine startups over a long career, spent time in three fortune five hundreds spent the last 13 years helping build an entrepreneurial support organization to create a venture community here in the state and I’m also an active early stage investor.

03:36

Yeah, Jeff Dandridge spent 20 years with axiom Corporation. So I come to the entrepreneurship world as an intrapreneur. Someone doing entrepreneurial things, but within the safety net of a corporate salary, started companies and managed companies on five different continents for axiom over the years, heavy into the m&a space as well, when I was there. I left axiom about four and a half years ago to join forces with Jeff amaran in the startup techie team to create the conductor in Conway, so an entrepreneurial support organization, also an early stage investor and an innovation consultant.

04:12

So no question you guys have been at this a while, you know, kind of the your way around the startup community. But I want to talk a little bit because you guys aren’t just necessarily, quote unquote, small business or startup coaches, you guys are really working towards the ecosystem of how startups in a community can really change that community for the better change the business and really change the entire country because the products that are being launched the services that are being launched, everything about starting new ideas, and bringing those to market works better when you have a great community, obviously Silicon Valley, known for its startup and tech launches, tons of venture capital but give me a an overview of kind of where the state of the industry is when it refers to startups. Here in Arkansas. Obviously, Jeff a you’re in Northwest Arkansas, Jeff Asher in Conway in Central Arkansas. But what is what is this startup community look like? What’s the state of the industry?

05:15

This Jeff amrhein. I’ll start a little bit and I’ll hand it over to Jeff Stan rich, it’s so we look at it as, as a most cost effective form of economic development and economic empowerment. It is. Sometimes I’ll say it’s the Moneyball play in economic development in that, in that creating small businesses and startups that are going to add economic vitality to your region, when you use it with local organic resources, rather than trying to attract in a new plan, or new manufacturer or a new large business, the chance of it sticking in that area, and having long term consequential positive impact is greater. And so we focused on that and all the stats bear that out, I mean, the Kauffman Foundation would tell you that something like 85% of all net new job creation comes from startup and small business. They’d also SBA would say that 99% of all employers are small business, and about half of all jobs are contained in small bit. So it matters, it matters a lot. It really is the economic backbone. And so our job is to figure out how to set the conditions provide the the sort of programming and infrastructure and support so that the communities that maybe have struggled economically in the past or that aren’t thought of as startup or small business seem can have a chance to do so.

06:39

Yeah, I would, I would agree with that, you know, I also am involved in the traditional Economic Development Center with the Conway Development Corporation. So I’m involved in the recruitment of industry to look at relocating to Arkansas, certainly Central Arkansas, and even Conway. But those are big bang hits that occur, you know, once in a while. And so this constant cadence of working to try to create a culture and a community that is conducive to entrepreneurship, not just conducive, but but encourages, stimulates and supports entrepreneurs, is absolutely critical. And so that’s where we spend the majority of our time, you know, make no mistake about it. Frontline support to entrepreneurs is the is the first priority of what we do in making sure that we don’t lose sight of actually supporting entrepreneurs, but also trying to bring the community around that as well as also part of our our mission. I love it. Yeah,

07:35

I mean, a lot of times I think we hear about so and so company. And I think right now the big company in Central Arkansas that we’re talking about is Amazon’s moving in bringing lots of jobs, lots of infrastructure. And that’s great for the economy. But what you guys are saying is you guys, forget the big businesses that are moving in or don’t forgive him. But how do we support that with

07:59

startup businesses and bring those jobs create those new jobs? In a place where those jobs didn’t exist before we’re not moving them from one place to another, we’re creating them where they didn’t exist before? That’s right. That’s that’s where in Jeff used the term economic empowerment, you know, I tend to differentiate economic development tends to be about moving jobs and in the traditional sense, and economic empowerment is about creating $1 where one didn’t exist before, right, or creating a job where one didn’t exist. And and we certainly don’t want to forget, and I know, you know, we want to do it in conjunction with with the large businesses because quite frankly, it’s, it’s beneficial to them as well. Many of the folks who start out in the entrepreneurial community, or participate in the entrepreneur community, develop skills that are coveted by some of the larger companies, everyone wants to hire, hire talent that is innovative, entrepreneurial, and what have you. And so we want to do it arm and arm with with the larger businesses as well.

08:56

The large enterprises are critical as well. And what a lot of them have realized over the course of the last 10 to 15 years is the startups and small business are not competition for talent, that’s where their competitive advantage of the future may actually reside. And so they need to build those strong bonds to the tech startup community to the small business community, because it’s going to be additive to what they’re trying to do and it will be supportive of their own competitive advantage in the future.

09:23

It can also be a less expensive or more efficient way of doing research and development depending on the company. You don’t know you had Wayne Miller on on your podcast not too long ago and, and Wayne’s very involved in the FinTech sector with his accelerator at the venture center. And and, you know, FiOS has seen value in working with these fin tech startups, because they add value back to their company. So it’s an important factor.

09:54

So are you guys are y’all seeing big businesses utilize r&d dollars to go out and fun things like the venture center, fun things like startup competitions, things like that.

10:07

Absolutely, yeah, we see it in multiple different ways. So the one, the one you identified was the FinTech accelerator, that FiOS is involved with that we’ve had the same sort of participation from the large flagship enterprises up here in Northwest Arkansas through their participation in the Korea testbed program that we’re running in the fuel AI accelerator that we’ve run where they’re very engaged as mentors. They take meetings with these companies, they advise them on how to get enterprise ready. They see I think they see the advantage of that. And it’s, it’s pretty much it’s in vogue today where all the large enterprises know they have to think like a startup and they have to be more innovative. The ones that get beyond innovation theater, you know, checking the box to say, yeah, we’re innovative and actually engage in a real way. They’re really seeing significant impact. I mean, they’re seeing new products and services piloted. They’re seeing things teed up for future acquisition. So yeah, we’re seeing that all across the country. It’s not just unique to here. That’s a, I would say a general trend.

11:14

And it’s in every sector. You know, our colleague, Jeff Stinson, yet another Jeff in the entrepreneurial ecosystem runs health tech, Arkansas. And they’ve got seven and eight or nine health care systems around the state that are that are supporting his health tech accelerator by providing opportunities for pilot programs and what have you. And we’re also seeing a rise in venture studios, right? So the combination of a startup incubator and a venture fund coming together to actually spawn new companies, and a number of household brands being involved in the actual creation of interest videos, two to two small and startup companies that solve specific problems that they have within their industry, but that also shared across across the industry.

12:00

So I want to jump into you guys. I mean, literally wrote the book on startups and startup culture, you’ve got the book creating startup junkies. Talk to me a little bit about some of the biggest things you’ve seen come out of that book. I know it launched recently. And I just wanted to kind of see what have you guys gotten his feedback, as far as what are the big takeaways people are really loving from that book,

12:21

I Well, I’m gonna I’m gonna start at this at a high level. And then Jeff will standard for getting into some of the specifics on the toolkit that that has come along with the book. But it’s intended to be as much inspiration as education. Because one of the key themes there is not just what we’ve experienced over the last 13 years in Arkansas, and creating a pretty vibrant startup and venture scene in a place where it was pretty much absent. I mean, there have been great companies built here, but there wasn’t really a vibrant, New START scene. So that part of the message is we could do it, other flyover locations can do it as well. So that’s kind of a big part of it. And then the second part of it, and there were some key themes in there about the pillars, you have to look at talent, capital, entrepreneurial culture, community and enterprise engagement. Those are kind of the four things we talked about. But I’m gonna hand it off to Jeff standards to talk a little bit about the toolkit that we put in there as well.

13:18

Yeah, we provided two, I think, very effective. tools to be able to use to produce we always talk about start where you are, you know, what we’ve seen across a number of unexpected places is when they’re trying to replicate something that someone else’s done, they fall into the trap of thinking they have to have a building. And so they literally start with a building, and they either buy one, they leased one, or in some other fashion, acquire a building, and then they have to spend 80% of their time raising funds to keep the lights on and only 20% of their time fulfilling the programmatic needs of the community. When we started the conductor in Conway in partnership with startup junkie consulting in the University of Central Arkansas, we started with an assessment to assess where exactly are we and so we say start where you are, where you need to know where you are. So we’ve created the venture ecosystem building canvas that provides community builders and ecosystem builders with a tool to actually assess the state of where they are, across those four pillars, talent, culture, community engagement, access to capital, but then also to begin formulating those into what are our top assets? What are our top supporting strengths? Where do we think we can get quick wins, and where are some of the lasting impact things we need to work on down the road? And so that’s our venture ecosystem building Canvas, and it really provides the opportunity just like startup junkie did when they came to Conway in partnership with UCA was they started with an assessment of our community and so we took that model and built it into the canvas and a tool kit that can actually be downloaded A copy of it’s in the book, but can also be downloaded as well. The second tool that we provided is okay, how do you take that information? And how do you build it into an actual 345 year plan? What’s the vision you’re trying to accomplish in your community? Start where you are, but where are you trying to go? What are the things you have to accomplish over that next? Let’s call it a five years? And then what must you accomplish in the next 12 months to get 20% of the way there? Because if you’re not 20%, of the way, there in 12 months of a five year plan, you’re off track? And then what are those key performance indicators that you that you need to be looking at on an interim basis to determine the outputs the outcomes and what have you that that keep you on track to keep it between the ditches, so to speak. So those are two very specific tools that we provide, you know, that that we have used ourselves that we have helped other people use? And we get, we get quite a lot of good feedback about that.

15:52

So basically, you created the textbook and the self help book all in one.

15:57

Yeah, I mean, that’s it. There’s academic rigor in there. It’s well researched. It’s it’s not just all sort of anecdotal. There’s, there’s a good amount of detail that talks about the state of the venture ecosystems all across the country. And it draws from some of the really insightful stuff that Brad Feld did in startup communities and startup community way. And our own experience, because we kind of grew up in this thing, in parallel with what was happening in Boulder and in other locations. So yeah, it’s very much you can read it and get inspired. And there’s specific stories in there about, about startups and startup founders, the follies of all that. And then there’s also this kind of overlay that talks about here’s a template for how to actually go do this. And and I think that, you know, we mentioned don’t build the building first part of the reason why we knew that was a bad idea is we did that, right? In the early days of the Northwest Arkansas venture scene, some folks that were really eager, enthusiastic, put together a location called the iceberg. And it was way too early to have a colocation facility here, we hadn’t really developed this is more than 10 years ago, all the programming and the workshops, the event cadence to drive people to a location. And so it didn’t last. And we should have taken, I think, more wisdom from some of the stuff that we saw in Indianapolis from Christian Anderson, who’s a guy that’s got ties to both places. He told the story of the speakeasy there and he said, Listen, we didn’t even open the doors on this place until we had 1500 commitments from people that wanted to be members. So they built the community through events and activity and that regular drumbeat, and then said, here’s the place, that’s precisely the right way to do it. And we and frankly, 1015 years ago, we learned from doing it the wrong way, at the front end.

17:46

You know, that’s, that’s a great point, I’ll tell you, I don’t know if I’ve ever told you this. Jeff, when we started our initiatives here in Conway thinking about what we wanted to do before we’d ever actually even visited with you, I believe, I made a trip to Fayetteville and actually went to the iceberg. And the lights were off, nobody was there. And the door was locked. And I walked down the hall a few steps. And there was another door and I walked in, I thought, Man, this looks really great. Nobody was there. You know. I mean, it was it was abandoned, so to speak, but it had all the stuff, right? You know, taking that one more step, we still don’t have a building in Conway, you know, at least the offices here that we use. And it’s worked great for us because we really focused on being a movement, not a building. But as a result, a benefactor emerged in Conway Corporation, which is our municipal utility. And they acquired the city hall, the former city hall, when the the mayor’s office moved over to the Federal Building. They acquired City Hall, and are in the process right now of doing a two plus million dollar renovation to City Hall. And it will become the home of the conductor named the Arnold Innovation Center. And we will be working with Conway corporation to provide all the programming so. So we didn’t start with a building we started with with an assessment that assessment turned into a movement, that movement turned into some people, those people grew. And benefactor emerged. It says, we love what you’re doing, we want to provide you a place.

19:16

And I’m assuming you guys were a step ahead anyways, because you you’ve been such a part of this stuff for so long. But 2020 gave us a whole new reason to start without a billing. You know, I mean, I think so many people just don’t even go back to their offices anymore. And and we realized through, you know, they say that wartime is the mother of innovation, and there was a war against businesses, especially small businesses over this past year, trying to figure out how do we still operate without being able to operate in a physical place. And so how have you seen the shift happened over the last 10 months to a year of especially in the startup culture, new businesses, not even Thinking about a building or a physical space?

20:02

Yeah, it was. It was scary. Obviously, it was very Darwinian, in terms of in terms of those people that were able to improvise, adapt and overcome the circumstances, and maybe jump through a digital transformation, maybe take what would have been an event oriented business and taken online. They’ve done well, they’ve done well. And I’ll tell you as as unfurl support organization, leaders, we had to go through that same transition ourselves, we had to take what was on an annual basis 250 live events and turn that into digital programming in about three weeks, when this thing first hit back in March. And so the companies that we’ve seen that have kind of rallied around that and realize this is a new set of circumstances, it’s not temporary, it may last a year or years, they’ve succeeded, they figured out how to be really innovative, how to do things, if you’re a consumer facing business, like at running a brewery, like beer delivery, as an example, curbside pickup, all that sort of omni channel stuff with direct to consumer became more and more important. So in many ways, it’s accelerated what would have happened maybe over a five or 10 year period to happen in a year for a lot of businesses. Some couldn’t make it right. I mean, they won’t make it they couldn’t kind of get their way around it. The cares Act and the PPP. funding has buoyed some businesses that hopefully will be able to make the transition, but some won’t. And so it’s been a scary time. And for us, we went from being a very high touch, face to face mentoring meetings to everything completely digital, all of our mentoring meetings are through zoom, we now have this kind of ridiculously large startup junkie, YouTube channel and conductor, online content that is available for everybody. And it’s for us, it’s expanded our reach, we get people following the startup junkies podcast and following the YouTube channel from all over the place now. So it did some good things, even though it was an awful and has been an awful situation. And I think those companies that we see that we’re able to be nimble and quick to react to the circumstances are going to be stronger coming out that the you know, the back end of the pandemic, Jeff?

22:15

Yeah, and I think Yeah, I agree. And I think those, you know, there’s a lot of these Mainstreet businesses that say, Well, you know, what I’ve tried, I’ve tried e commerce, and I’ve tried online sales, and it didn’t really work in you know, and so it’s been this kind of either or, and, and I think it’s more of a both and, you know, we have a client that we worked with, it’s in the, that’s in a pasture raised farm business and selling cuts of meat and what have you, and, and, you know, they had three or four lines of business, they had an event center, where they brought people in for actual meals that that introduced them to the farm, they had a walk in store, they sold wholesale sell to restaurants. And then a couple of years ago, they started trying to build their online presence, because most of the shipping that they were doing, they were taking analog via the telephone orders, and so they built out an e commerce business, well, COVID hits, their wholesale to restaurants is off 70%, their walking traffic is off 50% their events, business is off 100% because they had to shut it down. And their online ordering and shipping is up 11 100%. And oh, by the way, it happens to be the most profitable part of their business. So the work that they did pre pandemic to say, you know, we just want this to be a good healthy argument to our brick and mortar business, ended up being their saving grace.

23:31

And we felt a little bit like emergency room doctors ourselves, because it was triage. Every day in those, particularly in those early days trying to figure out, you know, we’re gonna have a 50% failure rate of small business and startups because the revenue just got shut off through, you know, through action of their own. And to their credit, the businesses have hung in there. I mean, the good businesses are going to be better are great. The businesses that were just kind of riding the tide of a good economy may not make it because they they might not have the management where with all to kind of get around the bend on some of these things. But anyway, yeah.

24:10

Yeah, well, and I completely feel and understand exactly what you’re talking about. I, you know, own a digital content creation company, and we’ve operated in the digital space for years. And it’s funny to just kind of watch people who all of a sudden realize how much digital presence they need to have. And we’ve been telling people that for a long time, but of course, now you see the absolute need and necessity for it. So we saw year over year increased fourth quarter of last year of 300%, from 2019 to 2020, which, you know, for us is a great increase. But, but I felt that triage mentality, like all we’re trying to do is get people into this online digital space, create digital events, virtual events, more content to get in front of their audience, because now you can’t have the in person And, you know, situations that you used to you can’t do in person sales as easily nobody’s traveling. And and that triage is a good word for it. Because, you know, would we like to have done some things better? Of course, but were we trying to literally just get people to a place where they can manage what’s happening, what’s going on and moving forward? Absolutely. And, and that forces us to get better create better systems, better operations, to handle, you know, this growth in a more sustainable way. So that’s one of the reasons that I’m really excited about this conversation. And I think so many other people in the small business community need and want to know, what do I do now? Where do I go from here? So one of the themes of this season of the podcast we’re moving into is, how do we do business better? So when you guys think about from a startup, you know, consulting and, you know, coaching side of things? What can businesses be doing right now? What can they be thinking about in order to move ahead and in a better way? How can they do business better?

26:03

The only thing required for innovation to occur is constraints. I mean, if we don’t have constraints, we don’t innovate. We don’t need to innovate. If there’s no constraint, we’re just fat and happy doing what we’ve always done the way we’ve always done it. And so, you know, what I what I like to suggest is that companies impose some degree if they don’t have constraints immediately, and everyone does. But if they don’t immediately recognize constraints start, start thinking about what if scenarios start doing some risk planning in that regard, and thinking about what if, what if the another variation of the Coronavirus comes out in it, and it shuts us down for an extended period? What are we going to do? You know, I’m involved, as Jeff said, We’re both involved in a variety of companies through investments and and I have watched the the companies that are in my own personal portfolio, and there is honest money to be made. And there’s honest business to be secured. Even in the midst of a pandemic, for for companies that want to innovate, that want to hustle that want to challenge the status quo, and want to look at better ways of adding value. You know, I had one business owner who came to me and said, You know, I really don’t want to sound like an ambulance chaser. But the services we have that we had pre COVID are just as applicable, if not more applicable than, than they were before that they are, you know, they are just as applicable now. And she said, but I don’t want to sound like an ambulance chaser or an opportunist. And I said, if you’re if the value you provide is as applicable now, in the midst of a pandemic, as it was before, you have a moral ethical obligation to tell people about it. And so I think that we can’t use the pandemic as an excuse. We don’t want to be opportunistic, we certainly don’t want to take take advantage of people, we don’t want to price gouge. That’s not what I’m suggesting. But we need to look at the value that we deliver. And if we focus on that value, we need to think about ways to tell people about their value.

28:03

Yeah, I agree. And I would say in general, most people now have a heightened sense of the importance of antifragility and resilience in your business model. And so none of us really probably aside from Jeff Stanford, she’s actually in this business, think of ourselves as being in the insurance or the risk management business. But we are I mean, you have to think about it as a business leader, you’re a problem solver and you’re trying to figure out how to mitigate risk. And so if everybody thinks about their business as if they were going to be an investor from the outside, they think about what’s this? Do we have all the right management slots filled? Is the strength of our team. How are we financially? Do we have cash reserves? Are we well enough capitalized? We have a good banking relationship? Are we over leveraged? Where it Where do our products and technology set are we are we good there? Do we need to make changes? Are we falling into obsolescence? And in finally what are what are things that are happening with the market or with the customers, and then there’s those sort of external things like environmental, legal and other kind of Black Swan event, things that you might take into consideration but constantly viewing the outside environment and your business through the lens of a risk manager looking to mitigate those things that could cause you to fail is a really healthy exercise to go through and some of the best businesses that pivoted the quickest that we saw in Northwest Arkansas were places like REITs barbecue, Jordan, right great operator he very quickly moved from a an in facility in dining focus model to one that was extremely efficient for pickup and delivery. Those companies those restaurants that made that pivot early have done extremely well now helps it has a fantastic product probably the best barbecue place in the northern half of the state by a longshot. But But having said that, he was he was very quick in in making those changes.

29:58

Yeah, and one of the things Jeff brought up And that I would say is probably the single most important key performance indicator that that affected businesses both positively and negatively positively, if they were on top of it and negatively they weren’t with days cash on hand. You know, soon into the pandemic, we saw that the average small business around the country had 27 days of cash on hand 27 days. And, you know, we talked about in our personal expenses in our personal finances, we should have four to six months. Why should we be any different in our in our business? And, you know, so understanding what your breakeven point is, and understanding how many days of cash does it take to operate your business? If you didn’t sell anything? If you stopped selling today? How long could you maintain your business before you had to shut the doors. And so companies that and entrepreneurs that understand those, what may seem to be complex dynamics are the ones who tend to succeed because they’ve got the reserves to be able to weather a storm.

31:00

So I’m going to throw this this topic out, because I know both of you guys have a very credentialed academic background, you educate all the time you teach daily, still, but you come from that environment. But, Jeff, as you just mentioned, that a lot of businesses don’t even have a month’s worth of cash on hand, I am lucky enough to have gotten a business degree in college and learned pretty early on that cash is king, of course, and without it, you can’t do anything. How do we educate? How do we continue to impart the wisdom on business owners that these basic principles are really non negotiable, to succeed to exist.

31:45

So we actually just talked about digital content, we have some digital content out there on the conductor website called managing by the numbers, where I take business owners through the five key drivers of business growth, there are two resources that I would also point people to and one is a book called seeing the big picture by Kevin cope. And it’s a it’s a fantastic book that talks about those five key drivers, and the other one is profit first, you know, we tend to think about revenue minus expenses equals profit. And, and the the profit first phenomena says, you know, profit minus revenue, or revenue minus profit equals your expenses, right? So you, you decide upfront how much money you want to you want to rat hole, so to speak, or put in the bank or you want to pull this out into a cash reserve. And then you adapt your expenses, we all know if it’s sitting in the operational checking account, we’re going to spend it. So one of the things that I do in virtually every business that I’m involved in is direct our, our business manager, the person who’s managing the banking relationships, to every week, pull out a set amount of money and put it in a cash reserve, we may have to draw back on it, you know, in three weeks, or five weeks, or seven weeks, or 12, we may have to draw some of it back out. But when we started doing that, the amount of cash reserves that we built number one, and the amount of profit distributions, the partners were able to take drastically increased because we installed the discipline of pulling cash out of the operating account and sticking it in a cash reserve for a rainy day. It’s a very, very simple process. But it is one that has been transformational. And so profit first seeing the big picture, two resources that are out there today at Amazon 10 or $12. Each, that can be transformational.

33:27

No doubt. And and I would say in addition to good cash management, having a really great relationship, most probably with a community or regional banker, because a lot of the national banks don’t really have good local support is a critically important understanding that you’re going to need an operating line of credit so that when you do get these unexpected things, you’ve got cash, maybe beyond your cash reserves that can be drawn down upon. And then again, another part of the discipline there is don’t use that for long term finance, use it for that short term operating cycle, the difference between your accounts receivable and your accounts payable to make things work or when you’ve had some unexpected circumstance that’s not going to last for an extended period of time. So those things I think that again, the good operators get better. The average operators if they if they can take some wisdom from what they see can become good. And we try to push entrepreneurs and small businesses up that knowledge chain so that they understand you can survive this, but you have to prepare you going into it with two weeks of cash is not a good strategy.

34:38

That’s exactly right. And, you know, we in all of the work that we did in the early days of the of the pandemic, we we directed people go see your banker, go sit down with your banker, your banker ought to be your quarterback because banks during the early days of the pandemic were given some some authority to be able to push payments out to take interest only To make some alterations to the loan terms in order to support those bankers, and just like when you know, in back in your personal finance when you were young and perhaps a bit irresponsible, and you got behind on a car payment, you know, you pick up the phone and you call the creditor and you say, hey, look, I’m having some issues and you work out a plan. We really saw a number of community bankers step up to being, you know, Hall of Fame, quarterbacks, so to speak for their businesses during this pandemic. And so that’s a great recommendation.

35:30

Absolutely, I mean, I know personally, I have operated since day one of opening this company that I’m always going to have plenty of cash on hand, even if I’ve never hired anybody, just so that in the event that I get into a situation that I can’t navigate, I don’t have to shut the doors of the company because I don’t have any money. But but also I set up with with my bank, I talked to my banker, before I even thought about opening the company and said, What are our options? What can we do here, knowing that I didn’t need a ton of capital to get going, didn’t want to invest every dollar, I had to buy equipment and everything to launch the business. So what we did, and this is just my personal journey on this, but we did an SBA loan to acquire the equipment needed. And then we did a second SBA, it’s technically a loan, but it’s a line of credit that operates as an interest only credit line for five years. And then the following five years, it essentially turns into a loan. So anything I don’t pay off in that first five years, it just turns into a five year loan. And for me, that’s a safety net that I will always be happy I did because even if I carry a $2,000 balance on your own paying right now is the interest on that $2,000 every month, and in the event that a second wave of a pandemic comes along at my company can’t operate. I know, I’ve got plenty of opportunity, even for the next three years, because this company is about two years old. But for the next three years, I don’t have to you know, it’s basically the SBA has been thinking about this since before the pandemic, it’s this is how you allow businesses to survive is create opportunities for, you know, cash as needed.

37:16

That’s a great point in a lot of people, a lot of small business owners, the only relationship they have with their bank is an operational checking account. They don’t have a relationship with a banker who can help them craft and architect banking solutions for them. And so I you know, to your point, you know, you sat down with your banker and said, What are my options, many small business owners don’t have that level of relationship. So I would implore them to, to find out their commercial banker at the bank, where they bank form a relationship with that person, and sit down with him and talk about their their the the operating accounts that they have the amount of cash that they move through their business on an annual basis, if you have an operating history of any kind. With a bank, there are banking solutions that they can bring to the table that can create that safety net and can help you mitigate those risks that my partner Jeff amaran spoke about a couple of moments ago.

38:14

not to go too far in the weeds on the banking side. But you know, I operate with three separate accounts, I have my operational account, a tax account, so I can hold that tax money and know exactly where it is, and that I’ve got it put away. And then I just have what I call a net account or profit account. So essentially, everything that I will need to look at every day and figure out how am operating moving into a separate account. And like you said, move it back as needed. But I’ve heard of people having up to seven accounts for a small business and just keep kind of separating that that revenue. What do you guys recommend on that front? I mean, is there a right or wrong way? To do this? And obviously depends on the business you’re in?

38:53

I think you’re right. I think it depends. I don’t I don’t have anything that I recommend, other than, you know, certainly you have your operating account, I do think a tax account for for small businesses, particularly solo entrepreneurs is a good strategy. And then that cash reserve if you’ve got those two or three accounts, that’s kind of the base basic minimum. You know, you can also have an investment account as you can, you know, if you want to, if you want to take that cash reserve, and you want to put it in something other than just a savings account, so that it’s earning a little more income, you can certainly look at at something like that. But But those three are a great starting point. And I would I would venture to say that many small businesses don’t have those three.

39:36

Well, this is certainly the less sexy part of startups and you know, getting businesses off the ground and succeeding but it’s vitally important, right. And I was also advised early on. There’s there’s two things that will make or break your success as a startup and it’s a good accountant and a good lawyer. So if you don’t pay attention to the things that can get you in trouble, real quick Then then chances are you’re gonna find yourself in muddy water pretty soon. I’m a big proponent of metaphors and how you know, especially in the business community how things work. So, sure you guys familiar with Reed Hoffman, but He always talks about entrepreneurship is a lot like jumping off a cliff in assembling the plane on the way down. And, you know, so Jeff, so as you mentioned earlier, kind of knowing your constraints, and that’s how you innovate. What do you guys use as far as sort of explaining or creating a metaphor for what you do and how you work with companies?

40:37

Well, you know, it depends. And a lot of it, a lot of it, there is storytelling about it. I mean, there’s a few things that are kind of fundamental businesses never gotten in trouble if they figured out a way to keep revenues out in front of expenses. Right? I mean, if you build and you don’t see that there’s a lot of mythology that comes from Silicon Valley, that’s all about, raise it and spend it as quick as you can and gain market. And that works 1% of the time, and the rest of the time, the companies fail, and they completely pancake. So telling the stories of you’re not going to get in trouble if you have revenues out in front of expenses. In other words, if you got contracts, or you get customer commitments, before you incur the expense, you’re gonna, you’re going to be better off. I mean, it’s things like that, that we say. And I would also say, if you want to be successful in a business, you got to realize that your talent and your team is your number one asset. So don’t overlook that build a winning culture, have the people on board that are better and smarter than you the A plus talent, you’re gonna have to pay them, you’re gonna have to reward them. But your job as an entrepreneur or small business leader, is to build that team that’s going to do amazing things. And then you got to take the greatest gratification from watching them do those amazing things. So there’s a lot of time that we spend on talking about team and culture, and the importance of that number one asset and why it matters so much its product, and great ideas can be a commodity, a fantastic team is a real asset. So we do a lot of storytelling around that kind of stuff. And contrast, this is what a great team was able to do because they had a really strong lasting culture. How did you know there were a great team, the churn rate was low, and everybody wanted to work there. This is what another team that maybe had an authoritarian leader that was maybe concerned or threatened by having really great talent dead, there was a churn rate was very high, and they never quite got down the road. So I mean, we tell a lot of stories like that. And we tend to sanitize, if you will, to protect the innocent, because we’ve seen 1000 entrepreneurial stories a year now and what we do, and given that base of knowledge, it’s a lot about storytelling, and drawing from the good examples and setting in telling people what to avoid based on the bad examples.

42:52

Yeah, we do, we get to tell a lot of anecdotes, as opposed to just relying on metaphors, right. But one of the metaphors that I do like to use, you know, I grew up, taking family vacations by automobile, never traveled on a plane until I went to basic training as a young adult. And so, you know, we would get in the car, and we would go places, and we would have that roadmap in front of us, you know, and if, if we were and we never drove to New York, but the metaphor I use is, if I were planning a trip to New York, I wouldn’t just get in my car, and drive east until I saw big water and then turn last right that I wouldn’t do that, right, that’s what I would do is I would, I would map out meticulously when I get to this intersection, I’m going to turn this direction. When I get to this intersection, I’m going to turn here, and we know the general heading that we’re going but we also know the turn by turn instructions, because if we get to a detour, and the detour has us go the opposite direction for a period of time, we know that we’re off heading, and we’ve got to get back to where it is that we’re ultimately going to go and trying to get trying to arrive. So we use that metaphor a lot for talking about how to build out your strategic growth plan. What is the vision of the company? Well, the vision is New York, we want to be in New York, what are the long term targets? Well, it’s the it’s the heading that we’re on and the milestones along the way, we’re going to drive this many miles by this day and this many miles by that day, we’re going to stay at this hotel, we’re going to stop off and have lunch at this park or this roadside look out or what have you. And then the and then the 12 month or the short term goals are those turn by turn instructions, or turn by turn directions. And so I use that metaphor a lot and talking about how to build your, your strategic growth plan and then your key performance indicators, you know, tire pressure, how much gas we got in the car, what were the gauges, the temperature gauge on the car or pressure, you know, etc.

44:33

The metaphors are really important and kind of getting back to the creating startup junkies the book and some of the story there. One thing that Brad Feld Feld said, and I’ll weave this into a metaphor that I’ve used repeatedly is that you have to realize that entrepreneurs are the keystone species. And if you know biology, you may understand what that is that the entrepreneurs have to exist. The rest of us who have been entrepreneurs or investors were kind of the supporting Cast, you can’t sort of in an authoritarian way, dictate that there shall be innovation and entrepreneurship, it has to be led by the entrepreneurs. And so the metaphor that I often use is, if you wanted to be an astronaut, you would want to have your instructor not be somebody that had spent his entire career in the simulator. But somebody who had actually flown the shuttle or or landed on the moon or whatever, somebody who had actually done it. So these ecosystems in order to be effective, have to be led by the people who have done it, it’s got to be by people that have that have gone on the moonshot that have actually experienced the ups and downs of and the risk associated with it. So that’s another one that we use frequently. And a lot of times, we’ll get pushback from that, and particularly in academic settings, because this is you need the PhDs to do the core research and whatnot, you also have to have entrepreneurs in residence like Jeff standridge, and myself who have actually built businesses have had success, have seen failure, all that kind of stuff. And so that’s another part of this that I think is really kind of central and key to building an effective startup ecosystem got to have the entrepreneurs out front.

46:13

That’s the absolutely, I’ve been a big fan lately of Donald Miller and what he’s doing in Nashville, I don’t know if you’re familiar with with his business story brand. And then he just launched a new book called business made simple, but, you know, he essentially is taking what he did from zero to 10 million, and he’s giving you the play by play. He’s essentially educating his audience because his whole mission is to grow the middle class. And how do you do that by growing small business. So he’s giving you this playbook to a keep things simple, because business can be complicated, but like you said, Jeff s, you know, you really just mapping it out, we can all drive from point A to point C, we just have to map it out and take the time to get there. But but but I love his analogy about the airplane and how he’s kind of talking about the different parts of the plane. So I think there’s a lot of value in that. But another guy, Jeff, a, that you were talking about culture. There’s a guy in Nashville, as well as a client of mine, that’s a kind of niche advertising agency. He wrote a book called worth doing wrong, and he’s talking about culture. And he said, it’s so important that it’s worth doing wrong. And, you know, he lists out probably three or four pages of single spaced bullet point items of different culture, building things that he’s tried, some have stuck, some haven’t. But he kind of, again, is talking about the importance of, if you don’t create that culture, you’re gonna have that tumultuous internal turnover and you just can never get everything firing on all cylinders. But as we kind of wrap things up, guys, I like to do a little rapid fire kind of get behind the personal side of who you guys are what you what you like to do. So let’s start just real quick answers. But what’s the best or latest book that you’ve

47:52

read? I’m reading business make simple.

47:54

Yeah. And so, and this has been out for a while. But the third wave, written by Steve Case is one that that I’ve enjoyed. appreciate his journey.

48:04

What about daily routines? What’s something you have to do every single day?

48:09

Make the coffee and let the dogs out?

48:13

More morning coffee. That’s what I was gonna say.

48:15

Are you guys more news or Netflix? Huh?

48:19

Netflix these days? Total bender on? Yeah.

48:24

Yeah, I’ve become way more of a Netflix person in the last six months or so than I ever was.

48:31

Yeah, best piece of advice you’ve ever given or received?

48:36

pass along all the credit and take all the blame as a leader.

48:41

You know, I have to share one that I hear frequently from my partner here on the on the podcast is assume positive intent until proven otherwise.

48:52

Hmm. I like that a lot. The pandemic has created a lot of new habits in people do you guys have any newly formed habits that you’re either proud of or can’t wait to get rid of?

49:07

I’ve actually driven my cycling miles up considerably over the course of the pandemic. So last year, I I had a decent year cycling but 2019 that is but in 2020 you know, I was able to almost double that and so and on track to double again in 2021. So yeah, that’s that’s a new routine that I’ve I’m pretty pretty excited about

49:33

gave me the opportunity to be a semi professional lumberjack around our place. Because I spent so much time working from home so I became one with the chainsaw on an axe for sure. There you go.

49:45

I love it. What’s something that nobody knows about you?

49:52

Wow, I hate crab Rangoon. Sorry.

49:59

I don’t know if I can I don’t know if I can use the nobody but but a few people know that my high school career dream was to be a rodeo clown. My wife will tell you that I cheat. My wife will tell you I cheat half of it.

50:13

I’m just gonna say you’ve got quite the opposite direction. Well, the last one would be and this is going to be your final plug for the book here. But if you wrote a book, what would the title be? So how about what what book did you write? And where can people get it?

50:28

Create creating startup junkies? Yeah, that’s it. It gives the pathway for people to build sustainable venture ecosystems in unexpected places. So that’s it. And it wouldn’t happen without the mentorship and leadership of my business partner, Jeff standards, no doubt about it. He’s accomplished author, and I’m a newbie, so it’s been a fun journey to get to get it done.

50:50

And it’s available wherever you buy books.

50:53

I love it, guys. Thank you so much. Y’all have been a real pleasure to talk to and I know personally, I have some some massive takeaways from this. And I know the work you guys are doing is benefiting so many people. So really appreciate the time and look forward to catching up again soon.

51:09

Thanks. Thanks.

51:09

Thank you very much. Our pleasure. We appreciate you.

51:14

If you like this episode of titans of industry, head to content Titan dot CEO slash podcast for more episodes or subscribe on your favorite podcasting app. And if you know of an industry Titan that’s doing amazing things. Let us know on social media or through our website so we can tell their story. Thanks for listening