7 Shocking Business Trends (Behind the Scenes) | Ep. 2599

All right, so we want to take a second to share some behind-the-scenes things that we're seeing with businesses. So Neil and I, we have conversations with our CEO friends or other CEOs that we work with, like clients, for example. And just the other day in Puerto Rico, I met up with actually 3 friends for dinner before I dropped in for a conference. And so I'll kick it off first. Neil, you can share some things. And we're not going to name any names here unless they're comfortable sharing this stuff. But what I've noticed, and we talked about this, is actually I'll start off with this. We have a mutual friend. I'm not going to name names here, but he's like, oh yeah, for our company, we do not hire people from California. We do not hire people from New York. We don't hire people from Colorado. I was like, why is that? He's like, because those states cause problems. Like, you know, they're very litigious and, um, you know, people are, people are nuts. And we've had like a lot of, um, you know, we've had to deal with things there where like it's, it's not our fault, but like people are, are suing no matter what. They'll find a reason. And It just ends up being a pain. And so what we started doing is we started to hire from LATAM, Uruguay, for example, or hire developers from Ukraine, for example, right? Because what he said was, and the whole table agreed when we were having this dinner, he's like, when you have people from other countries for whatever reason, and there's a lot of reasons here, but like, it's, they, appreciate the fact that they have a job and they don't have the perceived, like what they perceive as entitlement in the United States, right? And so like, yeah, we're just going to hire from other places. Like they seem to work better. They seem to align with the culture. They don't cause problems. And we just focus on doing good work and that's what it is. And I was like, that's interesting. So I don't know what you've seen as it relates to that, Neil.

I haven't seen much to people not hiring from specific states. We hire from wherever. We don't really care. If a state is— people in the state are more litigious or not. We just look for the best talent, whatever they are, you know, we want to go and get them. One thing that we've been doing, uh, that's been working really well, you know, in this world there's a lot of competition, so speed is everything. So we've been hiring people for 8-hour shifts. And here's what I mean by that. Let's say you hire full-time people. Well, a person on average may make, may work 8 hours in a day. Some may be less and maybe a little bit more.

Maybe like 6, you know?

Yes. But if you hire 'em from different time zones and they're all working together on collaboration on a similar project, we're finding that it's not perfect, but you know, we can get people to work on a project for 24 hours. You're just shifting 3 people in a day. And we're not doing that 7 days a week. We're doing that for 5 days a week and we're doing that for specific development projects or server projects. And it's causing us to move way faster and it's saving us a lot more money in the long run because when you're hiring people from different regions, the cost on some of these people in some of these other time zones and regions is drastically cheaper than the United States.

You know, one other thing that we've talked about a couple months ago is that the CEOs are back, right? So we had someone at dinner, he had someone from his board become the CEO and it was a complete disaster, right? And when you look at Flexport, for example, Ryan Petersen, I mean, Flexport, it's been tough. Like their revenues dropped 70%, their You know, they're valued at eight billion dollars one time.

Ouch! Seventy percent? Why seventy percent?

Go look it up. I don't. I don't know. You tell me.

That's a lot. I know a lot of people are struggling in this market, but seventy percent is a big drop.

Yeah. I mean, what shipping containers used to cost a lot more money, right? So, like you know, early twenty twenty twenty one. Yeah. Um. So look, I think um the trend here that we're seeing is CEOs are coming back. Like for example, Bob Iger. Is back, right? Um, Ryan from Flexport had to let go of the CEO. This guy over here, he's like, yeah, this complete disaster. Like, everyone's back. Like, our other mutual friend, he's back, um, in his company, right? They have like, you know, had over 1,000 people or so. They've had to make some cuts. Um, you know, I'm largely like back in the day-to-day, right? And so, um, but you can see, I think for everyone, I'll speak for myself, like being back in the company, it feels good, it feels right, and it feels like it's hard to beat founder energy. For example, you know, when You're able to drive things a lot faster and you're able to bring that— you carry the culture with you, right? And here's another trend that I've noticed, not really a trend, but a phrase that stuck out to me recently. So, the people that wrote— they did Basecamp, right? 37signals. I listened to one of their podcasts and it's like, yeah, so what do you define culture as? And so, culture is just like, it's not a thing. It just is what it is, right? but it's a 50-day moving average. And I was like, that's really good. Like, because if you do an acquisition, it can completely change your culture, right? Or if you hire some amazing people, it can like bring that moving average up. Or if you like hire a bunch of like bad people, it can tank the culture, that moving average, right? And so I thought that was a really interesting thing and I'm probably going to use that moving forward.

Another business trend that Eric and I are seeing is people are spending money on acquisitions. See, when the economy is really good and rates are low, It's hard to deploy money because everything is expensive. It's like why Berkshire Hathaway had such a massive war chest. They thought so many things were overpriced. But when things get bad, people start deploying the money. Yes, businesses struggle, but it's the best time to deploy your money because you can start gobbling up things at more reasonable prices. Sometimes cheap, sometimes reasonable. Sometimes you still have to overpay a little bit, but there's a ton of growth potential. When things are really good, a lot of times it's hard to deploy the money. in a way that's economically advantageous to you. But when times are bad, even though your revenue may be hit or your profit may be hit, funny enough, those are typically the best times to deploy money. The question is, is do you save up enough money? Or you can always get loans from banks or places like Capchase where they can help you get some capital where you can deploy it pretty quickly.

Yeah. I mean, the other thing too is we're talking about burning cash. We've trended towards efficiency, right? So now that we're in— we're no longer in this zero interest rate environment where cash is basically free, right?

It's—

people are like, okay, how can I be more efficient? Do we need to make cuts over here? And it's also getting everyone focused in on, hey, doing good work and no extra stuff, right? Let's forget about the extracurricular stuff. Let's just do good work. Like, that is why this company exists. And The phrase here that I remember is like a business exists to create customers, and that is it, right? Like you create to do create you create customers, you do a good job for your customers, and hopefully that cycle repeats, and that's how your business grows. The last thing I'll leave you off with is this is more of an outlier. It's not really a trend, but I have this book in front of me over here. If you're just looking on YouTube, it's called Startup Factory, and this book is about Hire, which is the world's largest. appliances company and they're based in China, right? And they have this decentralized model. As you can see, they've X'd out this hierarchy over here in the picture and it's all about creating this decentralized model where everyone in the company can be an entrepreneur, right? And if you create a business, you manage the P&L, you're responsible for it. And if the business goes public, you know, they'll put more resources to it obviously. And if your business doesn't work out, they'll just demote you into like a pool of other employees and you have to work your way back up again, right? And so I think we're going to see more and more of this. Maybe not in the next year or two, but I think we're going to see more and more decentralized models because technology is becoming more— it's enabling more and more people to become entrepreneurs or intrapreneurs in business. So that is it for today. Please don't forget to rate, review, subscribe, and we will see you tomorrow.