Building, Scaling, and Selling: 35 Years of Lessons from Three Exits With Joe Polish Featuring Mark Rukavina

AI is just going to be so transformational for those that jump on board, learn how to use it. Anyone kind of, you know, not paying close attention has the probability of being displaced at some level. We spent quite a bit of energy, time, and money hiring folks that came out of big enterprises like Apple Computer, and all of them failed. We always start out knowing fully well that we are going to sell this business. What are we going to build that has enough value for a billion-dollar company to buy us whenever we feel like we've gotten to a level where it's time to sell? Grit is what separates successful people. I don't consider myself extremely gifted. I just bring to the table grit. But grit is, you know, drive over many, many years.

How can you be a domino for someone else? The Joe Polish Show. Any problem in the world can be solved with the right genius network. So first off, like, I'm gonna ask you about building a business because after I visited your operation, my initial thing was, what do I do with all my photos, all my videos, cassette tapes, all this stuff because a mutual friend introduced us and said, I have a, you know, I have a friend that I've known for a long time that he has a company that does this. So I'm expecting some small operation. I didn't realize you have racks of, like, explain what you do and then we'll kind of describe it. Then I'll ask you about building and growing a business.

You just saw his collection. I don't normally do house calls. You're the first one I've done in 20 years.

Wow, thank you.

Like when we were tiny, I would go visit someone's house just because I could take any business we had.

Right.

It was fun to redo that kind of thing. So iMemories is the industry leader in digitizing old home movies and photos. We all have them. You know, I literally commissioned a study from a company called L.E.K., which is paid huge dollars to go figure out how much analog media is out there. Almost every household— there's 115 million households— almost everybody has a box of something that's really truly priceless to them, a box of home movies, photos, slides, negatives, that'd be the first thing you'd grab if your house was burning down. We looked at that business and said— and we had already built two major technology firms and sold them— and said, this is just a cottage industry, the folks that are actually doing this. And almost no one's going to them because they don't have a big brand, they don't have real technology, they're usually local, they didn't have any web presence when we started this business 20 years ago, and then we set out to do it. So we have now evolved into the largest in the United States, maybe the world. We don't do anything international, but we're coast to coast. We have an operation with about 250 employees that runs 24/7. And it is almost 100% automated, meaning at this point we have reduced the human labor element of it as best you can, right? There still has to be someone there that opens boxes when they come in. That's that priceless entry point to our business. We barcode everything. It's under almost Las Vegas-level security so that we monitor everything coming out of the box in case someone says, hey, I sent you 10 videotapes, and we're like, no, you really sent us 9. We'll send them the video so that it proves to them we only pulled 9 out of the box. We literally don't even throw anything away for weeks, just in case there's one little slide that creeped in. And we break down every box. I mean, we've gone through endless degrees to secure these assets, because these memories are priceless, and they're irreplaceable, right? But now we have— this firm that's right here in Scottsdale, which is a lot of fun for anyone living locally, even though 99% of our business is FedEx bringing us boxes from all over the US. What makes us special is that we do this in 1 week. Not your order, because you've got literally 5,000-plus assets are going through the arteries of iMemories right now. We do it within 1 week. No one could do that in 1 week without having pure automation. What makes us really special is we're like the Netflix of home movies and family vid— and family memories, meaning when we get done with your order, it goes right to the cloud and it streams from any of our apps. Our apps are on iPhone, iPad, Android phone, Android tablet, PC and Mac, and then every TV platform. That means Apple TV, Google TV, Roku, Amazon Fire TV, Samsung Smart TVs, LG Smart TVs, and then Sony, Philips, TCL, and there's one more, Hisense. So there's not a TV out there. So what you get to do when this stuff is, by the way, almost never been watched before. Most of these home movies were shot at a birthday party, a vacation back in the day on a camcorder. We all remember them. They used to be big, then they got real small. And they got thrown into a box because even then it was kind of hard to wire it up to the TV and watch it. Well, now, You send it to iMemories, and then within a week, you literally log into an account, and then we've— it's all there on display like watching any Netflix series, any Paramount+ series. We're just like those entertainment companies at that point because you can choose to watch a show you want, or you can watch your family anytime you want. It's really amazing to have that in your pocket at all times.

Yeah, and so you— I mean, what do you call them? You call them previews? On the app?

Yeah, the app sees— well, what we've also done is analog media was shot and it's like 2 hours of a home movie and almost no one wants to sit there and watch 2 hours of a home movie because they can be long. We actually go through the process of scene editing them, almost like you would turn on your iPhone today and take a video clip and then turn it off again. So everyone that he's looking at is a videotape with an album, but if you click into that, if you tap into one of those, We've then, all those are the scenes that we've outlined for you. So it makes it fun because then you see the thumbnails and you go, "Oh, I want to see that." And it reminds you, you're the one that took those, you're the ones in those, those are the people that you love. So it's easy to kind of find the things you want, jump around, but it's also great to share. So you can see a really cute 5-minute clip that happened on a VHS tape in the '80s, and you can send that to your mom, your dad, your brother, your sister, your kids. Kids that are in their 20s now were the ones being shot back in the day. My daughter's 29, and her whole life is recorded on, you know, VHS or 8mm or MiniDV, and I'll see something cute and then send it to her, and they just absolutely love it. You get group texts going where there's this nostalgic video that everyone loves, so it's a ton of fun. The thing that we sell is joy. This is all just joy that we give, because that's what you feel when you get into our product, and that's why It's the easiest thing and why I've been so energized for this business for literally 20 years.

I mean, I don't know if Scotty got the two pictures that I just found. You know what we're going to do though for this? I'm going to put some B-roll footage of some of the stuff. I don't want to just do it here in real time because I will literally go on tangents continuously. But I've got so many videos of me with old— This whole video is with long hair and everything. Did you guys get what I sent? Look at that. Yeah, yeah. And then can you show the next one with the piranha? I found a piranha, and so we— because this is what happens when you keep all this— that was the next photo. No, the second one I sent you. Right there, yeah. Go for it. Look at that.

So what's the story?

Okay, the story behind that is I was chosen, and this is 1997, I was the Cleanfax Person of the Year. And so I wanted them to put me as the, uh, I was a very controversial figure, so I wanted them to put me on the COVID as an angel and a devil. And so here, I'll send them the devil picture. And so I was on the COVID with two images of me It was something like saint or sinner or what was it, Eunice? It was something like that. I'll actually have to put the B-roll in that shows, 'cause people are like, I'm promising I'm gonna help them build their business and so this is an idea from Dan Kennedy. So Dan Kennedy at the time was writing a lot of my sales copy and I was like, boy, they want to do a whole food thing. Photo shoot, and this was not paid for PR. I was literally selected as, I was selected as Person of the Year by the magazine, which is the top magazine in the industry, and so they imposed these two images together, one of me wearing this little angel suit and the other one is the devil, and it was just a super controversial cover, and I was like, this is perfect, but I was chosen as Person of the Year, and so people either loved me or hated me. It was that sort of thing. And the people that really hated me were all the bait-and-switch carpet cleaners because I was a big advocate against don't rip off consumers. And so I brought more— I went on ABC's 20/20 in 1999 with Barbara Walters and the investigative reporter Arnold Diaz at the time. But that all came out of the PR I would do. And I literally was getting death threats from bait-and-switch companies because they're like, you know, I was exposing all these people that would advertise— so what did it say? Wait, what is it? What's the caption though?

Person of the Year. I don't know, I can't read it.

Oh, okay, you know what? It's actually on the article then. It was the title of the article was something like Saint or Sinner, Con Artist or Saint or something like that. But that was inside the magazine. So yeah, that's what they did with those. But I had no idea whatever happened to those pictures. So I just brought a whole bunch, a big box of negatives and everything to you and I've got so, it's like, So he's right.

You'll discover things you haven't seen before. It'll be such a fun journey to go through it all. Yeah.

Yeah. I've got old videos of Gary Halbert and all kinds of marketers and people that is not on— it doesn't exist anywhere. And I'm like, wow. I found all the old Joe Sugarman stuff. So those of you that made a donation to Genius Recovery for the Joe Sugarman package, all of that's getting digitized. And once we have that, so it's like great. It's like great.

The newest innovation we just came out with is AI enhancement. So I know we've talked a lot about yesterday and even some today about AI. It's such a powerful technology. Usually it's LLMs we're talking about and agents we're talking about, but we've actually taken another form of AI to do image enhancement and video enhancement. So right now we're taking an old VHS tape from from the 1980s, it's shot in standard definition. That means it's only got 480 lines of resolution. And normally we're watching things on TVs like this that have 4,000 lines of resolution. So we're upgrading them now. We're cleaning up the imagery, making visual clarity happen. But we're also upscaling them to a pure HD. We haven't figured out how to get it to 4K yet. And I think we'll be limited on, like a VHS tape will probably never get to 4K, just because there's not enough information for the AI to paint someone's face face perfectly on a video. We all know each other's faces so well in our families, right? And that's really what matters. But we're working on it. But right now we got up to HD and it really does make a big difference in your home movies, especially when you're watching it on a 4K TV.

So that's the company and it's really cool. So what fascinated me though is after I started getting a tour through the company and then I've gotten to know Mark, it's like, well, you don't just build something like this, sell it for, you know, I don't know if you publicly disclosed what you did, but you built, so you've been building tech companies for 35 years. So I have a list of questions for you. So the first one is, you spent 35 years building and running tech companies. What are the biggest lessons you've learned about actually systemizing a business so it doesn't depend on one person doing everything? And the reason I wanted to, I think you're highly qualified to speak to this is not only have you successfully done this, but you're also in a business where every single thing that's being dropped off is unique. So it's not like a cookie cutter, let's fry a hamburger, you know what I mean? And it's gonna— people are gonna come up. I mean, you're dealing with just every day thousands and thousands of unique images and videos and things, but you've built this whole system around it, right?

Yeah. So, so I've been doing this 35 years. I've had 3 tech companies. I've sold them all. And we just recently sold this one to Ancestry, which has been a terrific acquisition and it's a great company to be a part of. About the business, when it first started, it was me in a spare bedroom literally tinkering with digitizing VHS tapes, what does that take? Me digitizing old home movie films like Super 8, what does that take? Doing audio tapes, doing photos, scanning, basically doing deep research to figure out how do you do this. The one tricky thing about iMemories is that imagine our technology is like a big Swiss Army knife. It has to handle over 100 years worth of legacy media. And now we do new media too. Like people will send in an SD card because they can't figure out how to get things off of it when they shoot a digital camera. Or they're sending us DVDs, which are technically digital, but that's what their camcorder shot kind of right before iPhones came out and stuff like that. So we have to have the ability to pull all this in. So it had to start with figuring that out as one component after another. But then, of course, we would be like no different than the mom-and-pop shops, the cottage industry. And that's where our experience came in on how to build automated technology. This is way before AI is now starting to automate things. Easily. I had to have big tech teams, 25 of them at a time, writing workflow technology, grid-based processing, encoding and decoding of video. And keep in mind, 20 years ago, a video file— we'd do a VHS tape, it would be 75 gigabytes when it came out the back. And networks were struggling with that 20 years ago. You couldn't stream that 20 years ago. So we had to kind of battle, and we were kind of first to market with all these ideas, but we ran into very difficult times and lots and lots of technology setbacks, but we had to kind of fight through it. We knew the vision was on target. We knew that if we built it, they would come, but it was a decade worth of technology investment, over $20 million in just pure R&D to go from kind of start to a workable product. Even though we were selling along the way, it didn't really get satisfying for about 10 years years. But the whole— back to the systematizing everything, the vision of the company was always that the only way to deliver a consistent product at the highest quality level, but keeping the price affordable for consumers, because consumers have a lot of content. People come in with 100 videotapes and literally 10,000 photos if they have a big family. And it goes all the way down to one wedding video that I just want to save, right? So we had to get to the point where, you know, we use grid-based technologies. We use automation with barcodes to where an operator that's doing a videotape is literally wanding a videotape with a barcode, wanding the video deck that it's going into, and then wanding the grid, which is really the brain, to pull all that out frame by frame and then route it to something else like a whole other grid farm that's in charge of doing something completely different and eventually getting it up to the cloud so I can stream it right here on a video. Now that took a lot of vision. It took a lot of execution and kind of knowing what was possible and then literally doing it week to week, month to month, year to year. And every year we got a little better. Like we fixed a bottleneck or sped things up. I used to joke that it's like a pit crew. A pit crew shaves like 2 seconds off of the pit hit, right? And that's a big deal to get that driver in and out. If we shaved off 10 minutes of every operator, what would that mean? And things like that. And we're still working on those to this day. 20 years later, we've identified 2 or 3 new things that we're putting technology against it so that we shave off even a little more time. I'll give you a great example. When we scene edit home movies, it's a very labor-intensive process. We have had what's called a scene detection tool that tries to figure out where a scene should be cut, but it's horrible. It gets it wrong 50% of the time. So I still have to have human beings get in there and then scrub around and figure it out, because I want every customer to know that, you know, their videotape was edited perfectly, and we get rid of all the garbage. Like, sometimes you'll have a videotape with 20 minutes of home movies and the rest of it's just blank. Well, our competitors will ship 2 hours of video with 20 minutes of watchable and another, you know, over an hour and a half of just pure black, you know, nothing to watch, right? That's because they're that lazy, right? So we clip that off digitally and then we chop that up in a way that's very watchable. Well, that's a million-dollar-a-year investment in labor to do that. So I've just been spending time with AI technologies to have it— now it has intelligence to look through on a frame-by-frame basis and make a really intelligent choice to tell an operator, you know, a scene editor, this is really a good cut. Now, I still have a human in there that's like verifying it, but I anticipate it will speed them up by at least 50% when that technology's done. That's $500,000 in savings that will go on, you know, year after year. It's right to the bottom line.

You know, like, to have, to play the long game, which is The more and more that I've thought about success is like just the ability to play the long game on something that actually does have vision. Because I'm also not a big fan of never give up, never give up, never give up. Because some things, one of the best ways to become successful is to give up on the crap that's not working, right? So the best way to get out of a hole is to quit digging it. So if you're gonna dig a hole, you want it to be, there's going to be treasure there at some point, right? So to take 10 years, I would imagine like everyone probably thought you were crazy, like, oh, you're going to build a company where consumers are going to send in individual videos and stuff and they're going to— like, how did you— because you said, I knew that if I built it, they would come. How did you know that?

Well, I am one of them, right? I am the father who had the camcorder in my child's face like her whole childhood and My dad was that guy that had a Super 8 camera in my face, and then watching those home movies in that t-t-t-t room— I remember back in the '60s and the '70s you watched a home movie on a Super 8 with a projector that burned the film and put a little image on a wall about that big, one foot by one foot, and you'd lean over and watch these memories. They were silent but it was magical to rewatch these things because you were the star of the show. It was your family, it was your memories, it was your vacation, it was your birthday party. So I knew the magic was there. I also knew everyone I knew had a box full of these things and weren't doing anything with it because they didn't know where to go. They didn't know who to trust. Trust is a huge part of our business because no one is gonna give that box to someone they do not trust. And there were, and I, you know, you do some competitive intel when you launch a new business. What's out there? How good are they? Are they big? By the way, most venture capitalists would look at the cottage industry and say, this isn't worth getting into. There's nobody big in here. Well, there's a why aren't people big. They haven't put it all together. Yeah, right. Yeah, they have not put it all together. They haven't put the brand with the technology, with the, you know, the experience that goes along with it, with the speed, with the quality, and the price point's got to be right there. Well, it all has to come together And then you have something that people want, and boom, it took off at that point.

So you put together a joint venture with Walgreens, as an example.

Yeah, so Walgreens came in about at the 10-year point. And it took 4 years to land Walgreens. They had a competitor in there that really that's all they did was do the back end for Walgreens and Walmart and CVS and Best Buy and all these other ones, right? So we won Best Buy. We won Kodak, and then there were— oh, and Costco. Costco was a big one at that point too. Walgreens had 8,000 stores. We put them in our sights, and I mean, I just said, I'm gonna— we knew we were better than the company they had. But working with a big company like Walgreens, it's hard to swap that out, to get that big 8,000-store swap out. Every employee's got to be retrained. You have to update their kiosk because it's all self-serve now in these photo areas of these drugstore chains and stuff. But it took about 4 years, but we finally did it. And in year 1, it was really exciting. Now it's not so much because now our direct-to-consumer business, which is all e-com, is really— Walgreens is literally maybe 5% of our business now. It's all direct-to-consumer.

But it's crazy. So every time someone goes into Walgreens and drops something off, it goes through your system.

It goes right to us, yeah. And they fiddle around with the kiosk. Say how many they've got, they go to the counter, they drop it off, it comes to us, a couple weeks later goes back to that same Walgreens, and it's sort of dual-labeled, you know, it's got Walgreens on the front, it's got our logo on the back kind of a thing. Yeah, yeah, well, the partnership, it just isn't as big as it once was. After COVID, it just sort of changed, you know, that, that the photo labs just sort of changed, all of them, right?

Yeah. So, well, so how did you learn to delegate in a way that kept the quality high without having to be the bottleneck on Yeah.

So we, and I say we because I do have a business partner, he's absolutely brilliant. And what's great about my partnership with Steve, his name is Steve Crowell, is that I have my domain expertise in product and technology and then sales and marketing. And his domain of expertise is finance and operations. And I've yet to meet his equal. And then he's also brilliant at legal and HR. All of his stuff I don't have any interest in, and no one could top him anyhow. And then I can hold my own in mine. So I have always been a fan of a partnership model. When you kind of start talking about delegation, you can kind of go in and do something by yourself, or if you have an astute partner that you enjoy working with that's smart as a whip and a go-getter and a hard worker, well then, by all means, split the pie. Because you're gonna grow it 2, 3, 4 times than what you would have on your own. So I have the luxury of having a partner that I've been partners with for 30 years. Multiple businesses, multiple acquisitions and everything like that. But—

So find the right who.

But the thing is about us now is that we only go into businesses that we feel are large scale. Meaning we only want to build something big. So immediately when we decide to go into a business, We know we have to have big capital. Either we're putting it in or we're going to go raise capital. I've probably raised $125 million in my last two businesses alone. So we know how to raise capital. We now have a reputation to where capital isn't as hard as the first go-round where you're unproven. So it's not hard to find capital. So we can dream big if we want to dream big. But when we build a business— and we also have the luxury now of having folks that are right there ready to go, that are proven folks. But then we have to recruit new as well. But we always immediately go into— Steve's got his domain. He's going to go hire his leadership team. I'm going to do the same. Sometimes there's folks kind of ready for that. But then we begin recruiting. And listen, doing any kind of startup— all of my businesses have been organic startups, meaning I have never acquired a business. We start them from scratch on a whiteboard and go, what are we gonna do here? So we tend to hire people that are startup people, people that are go-getters, scrappy, tenacious, know how to execute. And I'll tell you the difference is because in my second business, early on, we had funded that business about $70 million. It was an e-learning company called KnowledgeNet and we spent quite a bit of energy, time and money hiring folks that came out of big enterprises like Apple Computer and Hewlett-Packard and stuff and all of them failed. The reason is, is because— no disrespect to any of those folks but when you have an organization— when you have a startup, it requires a different type of a person than what parachutes out of an Apple even if they did really great at Apple. Why? Because Apple has already done the heavy lift on the great products and they already have the engineering and they already have a reputation. Well, if you're just a— you're playing a role in there, but then you go to a startup where you're VP of marketing and it's like, okay, go create a market, go create a brand, go create customer acquisition, and they're like, uh, well, I need a team of 30 around me. No, no, no, it's you. It's you. Prove to me that you— you want one more extra person because at that early stage you want really intelligent, scrappy folks that know how to go out and get it. Well, I'd rather work with someone slightly less experienced but that's ready for that startup mode.

Dan Sullivan was even saying to me, he's like, if you got a startup and you're trying to bring anyone in from some corporation that's been established, he's like, he even said this to me, he goes, I never see it work.

I've never seen it work either.

Yeah. Yeah, so interesting. Alright, so when you're dealing with thousands of personalized photos and memories, which is pretty much a very human business, not just a tech business, how do you build the team that can handle the kind of work at scale and still keep it feeling personal? And I say this from my own experience, you know, Rita, who is the person you have at the front, who seems to be Like, you know, she's great and very personal. And I've been in there probably more than the average person because I've got so much stuff that I have brought there and had brought there. And so one day I was just wanting to see if Rita would answer the phone because I was calling just to let her know, hey, I'm showing up with a Sprinter van full of photos and stuff. And someone answered the phone. It wasn't her. You have a whole phone system, but the person was so professional, and I was like, wow, they answer their phones. This is a giant company, and really, you know, I mean, the person was great. And so you have instilled this throughout your whole team. And even when you gave me the tour, I mean, everyone there is, you know, just very chummy and stuff. So you have built a really cool culture.

Yeah, the culture is important. Every one of our businesses have had a terrific culture. It starts from the top. Of course. We really care about our staff and our team. We go to a movie every year. We have barbecues in the back. Anytime there's a real relevant thing to talk about, we gather everyone. We now can't gather at the office. We have to rent a hotel, you know, kind of ballroom and stuff. But it starts there by making the work environment amazing. You know, good recruiting. You just can't say enough about doing your diligence up front, making sure you're hiring quality folks coming in. They know what is expected of them. They know it's going to be— the bar is going to be set very high in terms of work ethic at our place. There's no one looking over you. You just have to perform. But what's interesting about iMemories is we spent the money, if you will, on some skilled positions. Our leadership team, we spent the money. Our tech team, we really spent the money. Why? Because we knew that that investment would pay dividends by building not only IP that someone like Ancestry would want, that's important, but also that it was fundamental to the strategy, that we needed to automate everything, and therefore, the bulk of our staff are folks that are operating our technology, so they can be trained very quickly because we've taken a lot of the skill out of it, again, no disrespect to them, but we wanted to get to the point where it's an assembly line. So when a box comes in, there's an operator opening it under surveillance and then sending it out, you know, making sure the count's there, making sure it's organized, but then they send it to a separate department. That department enters it in and then puts a barcode on it very accurately. Then it gets split up. Videotapes go into one department, Photos go into another, audio goes in another, and movie films go into another. And those folks are specialized at doing that. But in some cases, it's a matter of literally, again, barcoding, boink, boink, boink, and dink, dink, dink, and then it goes in. And there's one operator managing 1,000 video decks. 1,000. Right? So that's an incredible ratio of technology to staff. Okay, that's why we put the money where we did versus having, you know, 100 operators to 100 decks. And that's how the cottage industry works. They might have one operator in a little audiovisual shop and they might have 3 or 4 computers and that's about all they can handle.

Yeah. Right? Yeah. Well, the sea of computers and DVD players and VHS players is—

Just stacked up, you know.

It's great. So you sold the company to ancestry.com and you kept going building new things. So what did that sale teach you about what to do differently the next time around?

Yeah, I mean, here's the thing. We've now done this 3 times. You know, my first business was called Mastering Computers. We were a Windows seminar company and it turned into a CBT company, which is a CD-ROM business. That business was sold to Thomson, now Thomson Reuters. That sold in 1998. Then we started KnowledgeNet, which was an e-learning company. That started in 1998. We sold that in 2004. Actually, that first one was Platinum Technology. The second one was Thomson. And then we started iMemories. What I'll tell you about what you learn after an acquisition is you have to start with the end in mind. So we always— start out knowing fully well that we are going to sell this business. And so we work backwards and say, what are we gonna build that has enough value for a billion-dollar company to buy us whenever we feel like we've gotten to a level where it's time to sell? And we always feel like we'll know when it's time to sell. There's no magic to that. Sometimes it comes from experience, but almost, you know, the first business sold after about 6 years, the second one after 7, and this one 20. But I sold this business twice. So at one point it was purchased by Lifetouch, which was the biggest photography company in the United States. It was a billion-dollar photography outfit. Lifetouch is like what most of us remember taking school pictures. Do you guys remember Lifetouch? So Lifetouch did school pictures, they did church pictures, they were in JCPenney. They found themselves as an 80-year-old company with not any real innovative technology at one point, so they bought us to bring them that, and they wanted to go compete with Shutterfly and be more in e-commerce. Then 2 years later, Shutterfly bought them, so we bought that business back. We bought iMemories back, my partner and I. Then we just kept growing it and then eventually sold it to Ancestry.com. Ancestry, yeah.

When I asked you if you're still running it, you're like, "Yeah." But the first thing he says, because I love this.

Yeah, I do.

So that was talked about earlier. And do you ever stop loving the companies or?

Here's the thing about my first two businesses were learning companies and I really liked them a lot and I was really into them. But I actually love iMemories as a founder. I just, this business is so rewarding. I watch every review that comes in. I literally have every Trustpilot review. Every Sitejabber review, every Google review, every Facebook review I read in my inbox. And if I see anything that I should be attacking in my team, I just route it right to the right people and say, go fix this. But 99% of everything that comes in is just, you've changed my family. We have been watching these. We can't quit watching these. The first time we opened up the app, we watched it for 3 hours. We have never seen these. And it's just this joy coming out of folks. And that is so energizing to have a product a product like that that is just, everyone loves. I mean, I've never been like that. My e-learning product was great. It was the best in the industry because it was the highest quality, but like people could take it or leave it because it was a corporate product and they were forced to like, hey, go learn this and here's a great product for you, blah, blah, blah, but no one ever said, oh, you changed my life, right?

Yeah, so that's, I mean, I think that's a really important criteria is like do something where you can see the happiness of your clients because who doesn't want to wake up and deliver more happiness? Right. Yeah.

It gets my whole staff energized.

That's hot. And by the way, we'll do some Q&A with everyone, so if you have questions, just give me a few more minutes and I'll ask Mark a few more and then I'll open it up for everyone. What was the moment you realized, okay, this thing is too big for me to run myself, I need the right people around me? So if you can go back in time when you're like, Did you ever run into that?

No, no, because I knew immediately that I was— as soon as I figured everything out, we were just gonna get— go out and raise capital. I mean, I always keep it going to the point where it's big enough and there's enough intellectual property to actually go out to venture capital and get a good pre-money valuation. So you're not just going, hey, I have this idea. Well, you're not gonna get a pre-money valuation worth a whole lot, but if you build something and get enough going, then you can approach a venture capital and then go to the next level, or angel investors, you know, whatever it is that you're doing.

Where did you learn that?

You know, we— look, we got started in our 20s and, you know, sold our first business without any kind of outside funding. It was very much old-school, scrappy, you know, build it, only hire what you need, make money, grow it, and then eventually we sold that company. And we kind of had to grow up right then. Well, the next one was when the dot-com was going like intergalactic, right? This was 1999. You name it was going public at that point. We had just sold a company, and so we literally went to Silicon Valley where everyone was getting money at that time and raised money from 3 venture capital firms. But again, you know, we had never done that before, but we also had a track record at that point, so we got the meetings that we needed. I think if we wouldn't have had a sale at that point, we would have been brushed off at that moment. But we had not only the founding senior staff, but we had also built up enough technology before we approached them to where we had enough of a pre-money valuation where They took over half the company, but they didn't take over like 90% of it.

So now in this new world of AI, new now at the time, it ain't gonna be 6 months from now, a year, 5 years, whatever, what do you think's gonna happen?

Well, I just can't get enough of AI right now. There's not a car drive or a minute that I'm not right doing something for iMemories that I'm not learning about AI in every way. I just am a sponge and want to know everything. You know, I already have lots of ideas of how it's going to make iMemories better, more efficient, and then to grow our customer base. I think, you know, AI is just going to be so transformational for those that jump on board, learn how to use it, either to create efficiency in their life or to productize it at some level, right? There's all kinds of ways to productize it too. Anyone kind of not paying close attention has the probability of being displaced at some level. We've all kind of talked about some occupations will be in the lower part of the list and some on the higher part of the list. But I'm just— I'm happy we're all professionals when this is hitting, that we actually can do something with it. I've got two kids, one in high school and one in college. And by the time they get out of college, both of them, what's the world going to look like at that point? I wouldn't want to be in high school right now where all this is going on. I think I'd probably be doing this as a side business. I'd probably be trying to do something with it. I'd certainly be learning, not to cheat on tests, but to like to— make money doing it.

I mean, do you, at what point do you think you'll have automation of humans that currently require humans right now, robots and stuff?

Yeah, it's funny because 20 years ago someone said, hey, is someone going to do robots, like putting video, you're talking about the videotape stuff?

Oh yeah, well, you have a lot of stuff there that are—

Yeah, you know, it's funny. I don't think that's where we'll focus. Yeah, not anytime soon.

I actually think you have a pretty good business in the world of AI because you got all these consumers and you got all these people that have— I wonder how many decades before you run out of digital media that you can—

Well, I forgot to finish that statement. We hired L.E.K. to do this and we figured out that there's 8 billion home movie tapes out there in the United States. 8 billion. There's a trillion photos. So to be digitized. So that's why when we sat down with Ancestry, we're like, we're never going to run out. Not in your lifetime, not my lifetime, not my kids' lifetime. Media is out there. And so it's a matter of just continuing to be the leader, continuing to create differentiation. I do expect my competitors will eventually tap out because we are going to have streaming and they don't. We're going to have AI enhancement and they don't. And pretty soon You know how it goes, consumers look for what's, I only have to do this once, why not do it with the best?

Right.

And the one that I can trust, right?

Yeah, you know, I've had, so Dan Sullivan wrote a book in 2004 and he interviewed me, there's a chapter on me in the book and it was called Industry Transformers. And it was, I think it was 2003, 2004, whenever that book was written. And I love the term because an industry transformer who's, someone that has transformed an industry. And to go back to those pictures of me with— in the carpet cleaning world, I became the most well-known person in the world in the carpet cleaning industry. And I would always say it never got me dates in bars or anything, but it certainly helped with me building this training and publishing business in teaching carpet cleaners. And so I started thinking, well, I want to surround myself I want to be around people that are the best in the world or one of the best in the world at what they do in their category, and that's what Genius Network has become. It is a group of people that are the best in the world at what it is they do. And so you're the top guy in the world, this company that you founded, and what's instructional about what he said is just hearing him talk about the vision. Oh, we've already figured out, there's 8 billion videos and over a trillion photos. I mean, I don't think most people in mom-and-pop shops that are doing video conversion, that conversation ever enters their head. And so, I mean, there's a certain level. So how do you identify a visionary leader when you meet them? I mean, is there something you ask for, look for, see? You know, 'cause I think it has to be baked into how you've built this company when you're talking about the, What'd you call it? I took a note. The go-getter, the scrappy, know how to execute. I mean, I run into problems all the time where I like people and I'll listen to them say things, but then I'll hire them and they can't execute. Or they can't take the baton, even though I'll be off in conversations, yeah, I want to run the race. I want to be part of the pit crew. The engine's overheating and they're sitting there in the corner like scratching their head, they don't know what the hell to do or say something. So how do you see—

The one thing I've learned is that first of all, the vision should come from the founder and CEO. So I don't really look for a ton of vision from other folks even though I love contribution, but I don't like rely on it like, hey, I'm sitting around and I need to find someone with vision, otherwise I'm stuck. So that's not a problem that I've experienced. But when it comes to talent, that's always difficult. What I've learned is that, you know, you've got to really do your homework on someone, and especially at the top, and vet them as best you can. If you make a mistake and you find out they are not, you need to just be amicable, severance package, and move on, and then go at it again. And then you will, you will absolutely slowly build that team. What I've also learned is that two other big things. One is if you get a good leadership team, they will hire well underneath them if they're cut from that same pedigree. But also even folks outside the leadership team will bring other people that are top talent to the organization if you have a great culture, if you have a great vision, if the business is growing. And we have always shared stock options and some kind of equity with our team, especially at the strategic skill position level. We used to give it to everyone in the organization in my first two businesses, and then I found that when you have a large organization, it's just too much for someone that's an entry level to deal with a stock option, exercising them, what they're worth, and all those kinds of questions just bombard an HR team. So over the years, we've decided that that's probably not worth it, but we do anyone that's a skilled position, we create an equity opportunity for them. And so I had a lot of happy people when we sold to Ancestry.

Yeah, very cool.

And they worked very hard for that.

Right.

Very hard. I had some retire, and they just literally left the building within a couple of weeks afterwards. But they knew, you know, they knew it was coming, and they said, This is it for me. This is a jumping off point. And we're like, no problem, just cross-train someone, help us find someone. And they were, you know, they're like family now because these two people, one of them was with me for three different brands and one was with me for two. So, you know, and I'm happy for them.

I think it's good. I mean, my company is set up as an ESOP so that people will have ownership in my company. Yeah. So let me ask you this one then. When you think about building a company that can actually last, what matters more to you, the idea, the team, the team or the systems?

Yeah, for, well, listen, for me, if you have a good team, you know, the systems will come, you know, because you're working together to figure it out. So it's always team. Listen, my whole thing on ideas, I've got folks that come to me with ideas all the time. They just want my opinion and stuff. Ideas are great and we all have them and they kind of come, they go, but nothing matters until you start executing and you start going after it. And you do it consistently. And then my favorite word in the whole wide world is grit. Grit is what separates successful people usually. Some people get lucky, some people are extremely gifted, but I don't consider myself extremely gifted. I just bring to the table grit, which means I will, you know, I've got drive, I've got discipline, I have consistency, but grit is, you know, drive over many, many years. So the fact that I am still here After 20 years of ups and downs and hurricanes over at iMemories, and I'm still doing it, is the grit part. Like, I've had near bankruptcy experiences at iMemories. I've had some successes, some failures, but we just kept driving forward consistently year after year, and then you arrive in a good place. Like, when I started iMemories, I thought it was going to be just like the first two. We're going to sell this thing in 7 years. And we sold it, yes, in like '10, '11, but then we bought it back, which was unexpected, and then we kept going, right? Grit is a big deal.

Have you read the book Grit by Angela Duckworth?

I've seen her TED Talk.

Okay.

She's the one that coined it.

Well, Cherie, who I think is downstairs, is friends with her.

I wanna meet her.

Yeah, I'm hoping that I can get her out to Genius. I would love to meet her.

She inspired me. 'Cause I couldn't put my finger on it until I saw that TED Talk and I'm like, there it is. It's the word grit that really defines what I've experienced.

Yeah, well, we were having dinner with Robert Cialdini and his wife Babette last week, and Robert's actually, I think this week, meeting with Angela, and that's one of the things I was like, I'd love to interview both of them together on influence and grit, 'cause that's, yeah. That'd be pretty cool. No, you're— this is awesome. So here's one that I struggle with and that I believe a lot of people in the room struggle with. How do you keep a company from becoming too founder-dependent? Yeah.

Well, we all, when we start out— and when I was younger, I always felt like no one can do it as good as I can. You kind of have to get over that. And the truth is, is once you let go of that, you realize that you know, you needed to divide up the work, otherwise you won't scale. You will become your own bottleneck. And that's when I, you know, and this is again learned through experience. I don't think I read this or had anyone, you know, tell me this. I just had to kind of go through it myself. But, and I still on the marketing side still have that to a degree. I feel like no one could do marketing creatives quite like me just because I kind of feel it at a different level. And when I try to delegate it, a lot of cases it comes back substandard and I just can't accept that. So I almost haven't let go of that. I mean, at iMemories, almost my entire time during the week is spent on marketing. Because technology, we have such mature technology. I've got an incredible team there. But customer acquisition is still hard. It's the hardest thing. When entrepreneurs come up to me and they, what's the hardest thing? What's the hardest thing about growing a business? Customer acquisition is the hardest thing. Even if you have the best product, a great product, a product in demand, it is still hard to acquire new customers, always for me. And maybe it's me, but I'm telling you, it is work every single day. And what you do this year, last year, now it has to be top this year.

Right? I think, no, no, okay, once in a while someone just happens to hit something where they get more business or leads than they know what to do with, but for the most part, I think that's one of the reasons people under— when it comes to having taught marketing for many, many years to many thousands of people, the number one obstacle I think for someone learning marketing or just putting attention on it is they underestimate the importance of it.

Oh yeah.

Yeah, it's not even a technique.

It's the lifeblood of the business. It solves all problems. Sales solves almost every problem.

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