The Secret to Building Wealth and Avoiding Costly Mistakes | Keith Cunningham's Top Lessons

So what is the road less stupid? How would you describe it?

If I gave you the opportunity to unwind any three financial decisions you've ever made in your whole life, how much money would you have? And there's not a person in this room that if I gave them the ability to unwind, any one of three financial decisions wouldn't have more money. It turns out that the key to making more money is to doing fewer stupid things. That's true. I don't need more good ideas. I need fewer ideas that I think are good, that I've executed on. And so I've had the experience over the last 47, 48 years of being in business of having done some smart things where actually it wasn't that smart. But in reality, I was lucky. I happened to catch a big wave. And I mistook catching a big wave with being a good swimmer. And it's what Warren Buffett is very famous for saying. Most of you have heard it. You never know who's swimming naked until the tide goes out. And so the key is not can I make it? The key is can I make it and keep it? Those are two entirely different skill sets, and in fact, they are almost diametrically opposed. What it takes to make money is very different than what it takes to keep it. And most people are so obsessed with making it that, that as they become more successful, they do stupid things, which winds up sabotaging their overall success. And I know this story firsthand because this is one of the reasons I appreciated you so much, Paul, and your presentation is because I've had the experience of losing a lot of money, $100 million of my money that I made. I didn't inherit it, I made it. You were better off than me because you cut the bleeding at plus 600,000. I didn't cut the bleeding until I was minus 50 million. So I went from plus 100 million to minus 50 million in a matter of 24 months. And when you do that, it takes your breath away. Major, major event. Not only because of the size of the money, but also because it's. The loss is so devastating. And I had so much of my net worth. I have my self worth entwined with my net worth, which is a deadly combination.

How old were you during that time?

40.

40. And that was during the. In real estate.

Real estate, yeah, a lot of. And what led to the loss? Look at your losses. It's not necessarily pleasant to think back on, but everybody's had some kind of loss that they've sustained as a Result of a bad decision or excessive optimism. Unexamined assumptions, unexamined assumptions, faulty expectations, excessive optimism are killers. Arrogance is killers. Hubris is a killer for creating and sustaining wealth. So the goal to me is not to get it. The goal is to get it and keep it. You can get lucky and make it. And I know lots of people who got lucky, but the problem is they weren't able to keep it because they didn't have skills that would allow them to sustain. So the truth is, to me, sustainability of wealth is the holy grail. Making it, I can catch a big wave. I can get lucky. I can happen to hit a crease in the market at exactly the right point, and, you know, we can wind up being, you know, affiliate associated with you or Tony Robbins or any number of other people. And there's a degree of luck in all that, and there's a skill set in all of that. And so I'm very much about, let's make sure that if we're going to all this effort in order to create the success, and people do stupid things in the creation mode as well. People oftentimes think that if I just improve my product, that that would somehow allow me to create business or financial success. And yet the truth is, it doesn't require a great product in order to make a lot of money. If I ask you to think about your favorite restaurant, the place you would go to have a huge celebration, you're thinking about it, you know where it would be. There's not one person in this room that's thinking about McDonald's. Not one. And yet nobody has made more money in the history of mankind in the restaurant business than McDonald's. How did it happen? Is it because their cheeseburgers are so good? No, their cheeseburgers are horrible. Right? They are. Their French fries, on the other hand, are really good, but the cheeseburgers are horrible. What allowed McDonald's to make a lot of money was not an obsession with the product. It's never, write this down. This will be a takeaway. It's never what you do. It's how you do it. It's never what you do. It's how you do it. Southwest Airlines, their whole business model is put butts in seats and fly those butts from point A to point B safely. No mention of your luggage, Right. Your luggage is immaterial to the airlines. Whether it makes it or not, we don't care. Let's just make sure the person gets from point A to point B doesn't even have to be on time. Southwest Airlines has made more money in the last 10 years in the airline business than the rest of the airline industry cumulatively since Orville and Wilbur Wright. Now you think about that. One airline has made more money than everybody else since Orville and Wilbur. How'd that happen? Is it because their planes are so good? Is it because their first class section is so roomy? Is it because the food is so outstanding? Is it because the hostesses and stewards and stewardesses. Is it because they're so good looking? No. I can't tell which is older, the stewardesses or the airplanes. Right. It's never what you. Southwest Airlines success is not based on what they did, it's how they did it. You name me any product or service. I don't care what it is. Give me one week. You could say chewing gum, shoelaces, seminars, pins, socks. Name me any product or service. Give me one week, and in one week I'll come back and name you one person who's made millions and 100 people that have gone broke with the exact same idea. The problem is, as entrepreneurs, we become obsessed with the product. We become obsessed with either the quality. And I'm not opposed to great products. That's not the message. The message is, what is it? As a business person, what is it that we're focused on? The artist side of me wants to focus on the product and making it better and longer lasting and prettier and more robust. And I'm good with that. We need artists. The operator side of me wants to get busy and get a bunch of stuff done. I just, I got so much to do and holy cow, if it's going to get done, I'm going to have to do it myself because I. I don't know how to hire a team or keep a team or have a players or create a culture. I don't know any of that. I just got a lot to do. That's the operator side. The business person side says, wait a minute. The job is not to react to the problem du jour. What I need to do is leverage and structure. Write those two words down. That's the difference between a solopreneur and one person army. A solopreneur and a business owner. A business owner has mastered two things, structure and leverage. And without structure and leverage, there is not a way to create a sustainably successful business. I'm going to say the structure part a different way before I talk about leverage.

Yeah.

Opportunity without structure is chaos. The Achilles tendon of most entrepreneurs is structure. They Hate it. That's why they started their own business, is because they hate the idea of having structure. And yet structure is critical to for scaling. I hear a lot of people in here talking about scaling or scaling is just a Silicon Valley word for growth. That's all it is. How do I grow this thing? Okay, well, if I'm going to grow this thing, I need structure in order to be able to do it. Otherwise I got kind of a fire drill working with a bunch of people doing a bunch of stuff, and it's not necessarily the most productive thing that needs to happen. Leverage, one of the highest forms. When I talk about leverage, most people think, oh, he's talking about debt. In reality, I'm not. I mean, debt is a financial instrument, it's leverage. But the more powerful form of leverage is who's on your team. So I'm going to ask you a question. If I gave you an opportunity to build a world class team of A players, and the only people on your team were A players, I mean, seven footers, these are the Kevin Durants, they can do it all. If you only had a team of A players, how many of your existing problems that you have right now would go away, disappear? It turns out the problems that most of us are dealing with are not even really the problem. Eunice, is where I need a little whiteboard, if I can get one.

Hey, I hope you're enjoying this video and I want to let you know that I have a new book that's come out and I and if you'd like to get it absolutely free, there's a link below in the description or you can wait until the end of this video or you can Simply go to joe'sfreebook.com and you can get a copy there.

Joe just handed you a piece of paper a second ago and said thank you and said write down one of your biggest problems. So I'm going to ask you right now to write down on your piece of paper one of your three biggest problems. Maybe you just did that. Maybe you can refer back to that piece of paper. Maybe what? You're not going to have to share this. We're not going to talk about it. It's not going to be anything. So you may want to write really, really small so that nobody else can see. Write it really small and just write down or revisit one of your three biggest problems that you think you have with your business. Let me give you a thought. The exercise is over. You don't have to complete writing it down. The exercise Is over. Every person here has an is line. This is reality. This is the way it looks. This is point A. Point A. And the problem that most people have, in my experience, I know I have this problem, is that I'm not particularly honest with myself about the reality of my situation. I sugarcoat it. When I was at the University of Texas, every day I'd walk past a. A little message etched in granite over the doors of a building. And the message was, you shall know the truth, and the truth will set you. See, you know this, right? And every day for four or five years, I walked past this saying. And I went, I don't know what this means. What does that mean? You should know the truth. The truth will set you free. Well, the reality is, it dawned on me later, is that as long as I'm lying to myself or not telling the truth, I have no opportunity to make a change. So it's why addicts don't stop using is because they say, well, I don't really have a problem. I can stop anytime I want. Yeah, I know it's a little bit. But, you know, the reality is I'm functioning right. It's why alcoholics or poor people pick a topic. People don't tend to tell themselves the truth. This is point A. We also have point B. Point B is ought. This is the way I'd like for it to look. This is point B. And it turns out that most of us are experts on point B. We have massive clarity on the way we would like for it to look. Because we've done all this visualization. We've done all this goal setting where you make a goal and then you make it vibrant, and then you turn it into black and white, and then you bring it closer and farther away, and then you put music around it. And so we're really good at visualizing what ought to. We tend to suck at what is. And when asked what our problem is, we describe the gap. The gap between where you are and what you want is what you typically describe as the problem, when in reality. This gap is not the problem. This gap is the symptom. I just asked you. Joe just asked you the last exercise you did write down one of your three biggest problems. And everybody got busy real quick. We knew what the problem was because we were visualizing the gap between where we are and what we want, when in reality. That's not the problem. That's the symptom. The gap sits right here. This is. Sorry. The problem sits right here. This is the problem. This is the obstacle that I need to overcome in order to move the needle on my is line. In order to move the needle on my is line, I need to get clarity on what it is that's truly blocking my forward progress. What's blocking my forward progress has nothing to do with where I am versus what I want. What's blocking my forward progress is the obstacle that sits right here. And it turns out, Joe, that the hardest part of thinking time is getting clarity on the problem. That is, if you don't have clarity on the problem, that is, you'll be tactical instead of strategic. So I say I'm 10 pounds overweight. What do I want to do about it? Well, as long as I view the problem as being 10 pounds overweight, which is not the problem, that's the symptom. Hello. Hello. Are you with me that? Being 10 pounds overweight is not the problem, that's the symptom. But as long as I identify being 10 pounds overweight as being the problem, then what I will lurch to is, okay, should I buy a jump rope or should I join a gym? Should I buy Oprah's latest diet book, or should I get a personal trainer? Oh, I know what I'll do. I'll get a piece of home exercise equipment. That's what I'll do. If I just had a peloton bike in my house, then I would get in shape, which is why most home exercise equipment and most diet books don't work. Because it's a tactical response to a tactical question. As long as I'm dealing with the symptom, I'm going to be dealing in tactical. And once I say it's not a tactical issue, I need to be strategic and think strategic and identify the problem that is. So here it is. And then I'll stop, Joe. If I don't have clarity on the problem that is, I'll build a machine for the problem that isn't, which is what we do 99% of the time. We identify the gap, call it the problem, when in reality it's a symptom. And we're highly tactical in our response because we have a tactical question that we've asked which winds up sabotaging our results. If you tell me your sales aren't high enough, I'm going to say that's a symptom, not a problem. If you tell me you don't have enough profits, if you tell me you have a crummy culture, if you tell me you have weak employees, if you tell me your balance sheet is screwed up. I'm going to look at you and say, all those are symptoms. What's the problem? So if I gave you an opportunity to rethink the problem that you identified a minute ago, is that really the problem? Really? Is that the problem? Is that the core root underlying problem that's blocking your forward progress? Or is there something below that, something buried where you got to get busy and figure out what in the world is going on? So business to me is an intellectual sport. It's chess. Money and business does not respond well to emotions. Warren Buffet said it. Optimism is the enemy of the rational investor. It turns out in business, optimism is your enemy, which is why one of the pieces of advice that you gave is so good, Paul, which was, we all need a board, we need advisors, we need people that we will listen to. The higher you go or the higher you want to go, the greater the requirement to have somebody around you who will tell you the truth. Because I can't smell my own breath. I can smell your breath, but I can't smell mine. I can't see my own swing. I can see the shot, I can't see the swing. I need people around me, watching me swing, who will give me advice. And then I got to be willing to hear that advice. As long as I'm arrogant, right? Unwilling to listen, it does no good to ask. So business is an intellectual sport. And the people that win the game sustainably have got skills and tools, which is why I wrote the book Let the Road Less Stupid.

So you've made literally hundreds of millions of dollars and you've lost the tune of that. I mean, so there is.

I mean, you've. I would rather not talk about the loss.

Okay. I will though dig into with you though, is in the pain of it all. That's where it seems that you've got getting yourself on, say, the road less stupid. You've. You've made, admittedly some very stupid, arrogant mistakes early on, and you like what it did to you mentally and psychologically. Nearly crazy. And you told the story how you overcame that and it became one of the greatest things ever. I'd love to have you like, how did you learn all of this? What did you need to do in order to get the business knowledge and wisdom that you have done an incredible job of condensing in this really amazing book.

Thank you. I think. Right in the middle of this disaster, Dan and I were talking backstage when he was coming off and I was getting ready to come on, and I said, I have also had A divorce and a bankruptcy. I feel very fortunate on the sequencing of mine because my bankruptcy came about a year before my divorce. So that sequencing was really important. I would have hated to gotten divorced five years before I went bankrupt. Look, I was giving an interview. I don't know if I talked about this when we were together a few months ago or not. I was giving an interview in Ireland for a radio station that was trying to promote an event that was going to happen the next day in which I was going to be the speaker and. And the radio interview host. Right before I went live during a commercial break, looked at me and said, look, I've read about you. I know who you are. I know your background. Is there anything you don't want me to talk about? And I said, yes. I said, don't ask me how it feels to lose $100 million. I can tell you it feels horrible. Right? I mean, so don't ask me about that. He said, no problem. We go live on the interview, and the first thing this guy says is, I'm sitting here with Keith Cunningham, the man that lost $100 million. He said, Keith, how does it feel to lose $100 million? And so I'm now stuck because I'm live. And I said, let me tell you how I view this. I view life like a university. And in university there are courses, and courses have tuition. I just took a course in the university of life, and the tuition was $100 million. First of all, there's very few people who get to take this course. I mean, it's kind of expensive. And. And so that's part one. Part two is, the key is not how much it cost. The key is, did I get my money's worth? Did. Did I take this course? Pass, fail, where I went in to do the least I possibly could, or did I take this course and. And what? I want to make an A plus plus. Because I never again want to have to take this course. It's far too expensive. I think a key is for me, Joe, and I see this over and over again in my own life and other people's lives. Is the mistakes or the failures are not nouns. They're verbs. They don't define who I am. The question is not, did I make a mistake? The question is, can I admit it and did I learn something? I love what Buckminster Fuller said, who's one of my heroes? Bucky said, a mistake is not a sin unless it's not admitted. The only way it can be a problem is if I don't admit it and then learn from it. And so in the book the Road Less Stupid, I have a chapter on the log of lessons learned. And those are lessons that I had to learn the hard way. And part of what I do, part of what you do, part of what Dan does, what all the teachers, what all the mentors in this room are doing, is they're allowing other people to stand on their shoulders. I'm standing on someone's shoulders you're standing on. That's, that's the exercise you just did. And it's, it's very powerful. Who is the first domino? Whose shoulders are you seeing standing on? And the idea is, is there a way for other people to learn from my mistakes? If I can do that, I will have had a successful life.

Hey, I hope you're enjoying this video. And I want to let you know that I have a new book that's come out, and if you'd like to get it absolutely free, there's a link below in the description. Or you can wait till the end of this video, or you can simply go to Joe's free and you can get a copy there. So you, you're the highest rated, I think now the only speaker of Business Mastery. Tony Robbins, Big Business Mastery event, Correct? Or does he have other.

We've been told, we've been told that people like us.

Yeah, I mean, yeah, you're definitely the highest rated speaker of Business Mastery. And you have you read a lot. You're a voracious reader and you see a lot of people dispensing advice out in the world through books that people, business owners, entrepreneurs follow, that you disagree with. And so I'm going to ask you, which will sound kind of like a silly question, especially since you said, you know, I don't believe in bathrobes. When people ask you, you know, what's the secret to business success? What would you say to that? Because people always want to know, what's the secret? And from a marketing term, I know it works. If I said, here's three rules I want everyone to write down, or if I said, here's three secrets I want everyone to write down, everyone would literally get out their pen when you say the word secrets. So people are pursuing it. And I think what you do such a great job in the real less stupid of is dismantling so many myths and so much bullshit that exists that people are being taught about business. And you're a guy that actually has made a lot of money and is very good with it and has gone through so what, you know, when someone says, oh, what's the secret? What is the thing they're always looking for the easy way to do it, how would you respond to that?

So I think the first thing I would say is there are no secrets. There's just stuff you haven't learned yet. There's not a secret. There's no magic pill. There's no little formula that's locked away in a vault someplace that says, oh, God, if you can just learn this one little thing, this is. And nobody else can learn it because it is a secret. I think that promotes the wrong kind of work ethic. I think it promotes the wrong kind of execution. I think that's the magic pill, tooth fair fairy, financial tooth fairy kind of mentality. And I, I strongly disagree with that mentality. I do think there are some, some things that successful business people do. I think successful business people, some of them make a little list. And it's not intended to be all inclusive. It's intended to maybe spark a conversation or a thought. I think successful people have extreme clarity about where they are, the reality of their current situation, which is point A, and they have clarity about point B. They have clarity about what they want, where they're going. And my experience is that most, most business people and most business advisors orient towards the second one. It's all about getting clarity on what you want, which I'm in favor of. But I think the only reason Google Maps works is because you tell Google Maps where you want to go and it knows where you are. And if you don't, if Google Maps didn't know where you were and you told it where you wanted to go, the likelihood of you getting from where you are to where you want to go rounds to zero. So the idea is, what, where are you, what do you want? And what's the obstacle or the problem that's in the way? I think the hardest work I do in my thinking time is what's the problem? Not the symptom, what's the core root obstacle? Because if I'm going to get from where I am to what I want, there's something that's blocking and I need to know what that is. I need some clarity around that. Because if I don't have clarity on the obstacle, I have zero probability of building a machine that will help me solve the problem. And building the machine requires allocation of resources. So there's a bunch of things in this little sequence. I just said there's clarity about where I am, clarity about what I want, clarity about the obstacle that's in the way, some thinking about what's the machine, which is priorities. So priorities think. Successful people are really good at identifying the correct priorities and then. And then allocating the resources to execute on those priorities. I'll say it this way. I'm going to put it on a bumper sticker. A shift in priorities without a simultaneous shift in allocation of resources is wishful thinking. And wishful thinking is at the root of every failed business. They thought the idea was if they could just get clear on what they want, that somehow what they want would manifest. And I'm going to quickly say I totally agree with Dan and what he just talked about. I think getting clarity about what it is you want is important, but I think. Because that allows you to filter. But I also think somebody's got to pick up the business end of the shovel and consistently execute. I'm not a believer in the magic pill. So.

Can I say something? Because this is an interesting point because, you know, Dan says as entrepreneurs, just their creativity make it up and make it real. Now, the making it up part and making it real, all kinds of shit goes squirrely right along the way. And what you're saying with the execution and even the impact filter, which is a thinking process, in order to get clear on the importance selling yourself on it, what's the success criteria and piecing it together. I mean, think of the amount of suffering of these idealistic, aspirational desires that are missing all of the roles, the key elements and the priorities done in a certain way, they actually achieve something, which is why there's so much business success. And I think what you're doing here is getting people to slow down enough with thinking time. So they're not so reckless as they're trying to drive. Because so many entrepreneurs are just. They're driven, but their drivenness is driving them in the walls. It's driving them into poor health. It's driving them into insanity. And a tremendous amount of driving off cliffs all the time.

I think that's it. I think this need for speed, I think this need for significance, I think this need for. My friend Alex Mandozian, who is someplace in here, has said it very eloquently. Few things are worse than running the wrong direction enthusiastically. And I think there's a lot of truth to that. I think we tend to substitute passion and what we're excited about. I will tell you, whatever your passion is, it's either something you think you can be successful at or you are successful at. Now, the instant it becomes unsuccessful, your passion goes to zero and you start looking for the next cool thing. So the passion is not, it's just excitement about what I think I could be successful at or what I am successful at. But if you sucked at it, I promise it would no longer be your passion. So I tend to gravitate. I'm probably, and there's a great example right now in the press, this guy, son, I don't know how to say his first name, Marushi Son, who is the guy who put together the hundred billion dollar fund that invested in Uber and we work and a dog walking service and has blown through $100 billion in two years. In two years. And it's probably gone. The bulk of it is. And I contrast him with somebody like a Warren Buffet who's been, he's been at it 60, 70 years and his built something that, that has withstood the test of time. And I compare that to what other people are doing and it seems like there's a lot of people that are optimizing for a one hit and it may turn out good, but I'm not sure if it's sustainable because there's a lack of business skills and tools. I'll say it this way, business success requires business skills and tools. Much like ping pong success requires ping pong skills and tools. And if you want to win a gold medal at ping pong, somebody better have ping pong skills and tools. And the same thing is true with business. If you want a gold medal in business, somebody better have some business skills and tools and bring more to the table than simply an excitement about the idea. Somebody's got to execute something. And most failures have to do with either. We haven't identified the problem. We're excited about something but don't know what to go do. We've built a crappy team or a team of munchkins, a team of people that, that you know are C players and that can sabotage. There's so many ingredients and it just being thoughtful about what's really required and what's really the problem I think is the key to saying how do I keep this thing going? Yeah, the environment's always changing. The environment is the only thing that's the only thing that's always changing. So a good idea today could be a bad idea tomorrow and vice versa. So I think one of our jobs as business owners is to be thoughtful about good. How are things changing? Either the competition, the economy, the White House, Brexit, North Korea, interest rates, price of oil, the competition, consumers I'm changing. And so what I can do today is vastly different than what I could do 25 years ago.

How have you built this organization called Zappos? It's everywhere. I mean, even when I went to the airport today and I was flying out to Vegas, it's there at the bottom of the bin.

It says zappos.com.

What does Zappos mean? I just want to kind of get this out of the way. Where'd you come up with the name?

So I actually joined Zappos about two months after it started. And the original name that the founder had come up with was shoesight.com because the original idea was let's just sell a lot of shoes online. And he was looking for an investment and basically realized that calling shoesight.com was kind of like calling a store store. Yeah. So wanted to come up with something that didn't really mean anything. And so the Spanish word for shoes is zapatos. And so he took out a couple letters and added a P and Zappos was born.

There you go. Okay, so how long has the company.

Been in business now? We actually just celebrated our 10 year anniversary June 1st.

Wonderful. Now people will typically maybe think of Zappos as a shoe company because from the very beginning. But what would you prefer people actually think of Zappos as? I mean, what's your vision?

Yeah, so our vision internally, we really think of ourselves as a service company. That's really what we want the Zappos brand to be about. Just the very best customer service and customer experience. And yeah, hopefully 10 years from now people won't even realize we started out selling shoes online. And in fact, today we actually sell clothing bags, kitchenware, housewares and cosmetics and so on. So, yeah, we really just want the brand to be. Actually, it doesn't even have to be limited to online. We've had customers ask if we would start an airline, for example. And I wouldn't rule that out 20 or 30 years later down the line.

Actually, I hope you do start an airline because the airline industry is terrible. And so we need like customer service in the airline business. One thing you know, I've done trips to Necker island with Richard Branson. And one of the things I said to him is that the motto in the airline industry is we're not happy until you're not happy. And that's basically sort of the theme with, I think a lot of businesses. And I actually have to give Dan Sullivan credit. He's the one that originally said that statement. But nonetheless you're so focused on customer service. What's your definition of customer service?

I think it's everything. It's really more, I guess, just about an attitude and then the ability to actually help a customer and go above and beyond. So for us, it's kind of evolved over the years. Originally, it was just, let's make sure we just wow the customer and go above and beyond, and that's all we care about. And then just over time, we realized that part of our culture and therefore part of our brand is really about being really human and personal. And so there are some places that maybe from a process point of view, it's a decent customer experience, but we really want to connect with our customers and our employees on a really personal level. Internally, we use a term called pec, which stands for personal emotional connection.

Got you. What I'm gonna do right now. While I was in the airport, I was thinking, what could I buy for you? And so I purchased this item. It's a scorpion banana flavor lollipop. So I just wanted you to have that.

Wow.

I didn't know these existed. I'd been looking all over for one.

Right, right. And I was thinking you were looking for one. This is the Arizona rattlesnake eggs bubble gum.

So that's for you also.

So just please, on behalf of myself.

And all of our viewers.

Those are good.

Anyway, now I'm going to get the bio out of the way. I'm going to read something here. This is other than maybe some stuff out of the Zappos culture book, which I may read. Something just for our viewers. Tony Hsieh. Spelled Hsieh. Do people always mess up your name?

Yes.

What do they usually say?

I've heard 100 different things.

Okay, well, we'll stick with you.

Just call me Tony.

Okay. Tony originally got involved with Zappos as an advisor and investor in 1999, about two months after the company was founded. Over time, Tony ended up spending more and more time with the company because it was both the most fun and the most promising out of all the companies that he was involved with. He eventually joined Zappos full time in 2000. Under his leadership, Zappos has grown gross revenue sales from 1.6 million in 2000 to over 1 billion this year. By focusing relentlessly on customer service, Tony focuses on continuing to grow the business at a rapid pace while maintaining the culture and feel of a small company. Prior to joining Zappos, Tony co founded Venture Frogs with Alfred Lynn. Venture Frogs is an incubator and investment firm. That invested in Internet startups including AskJeeves, Tell Me Networks, and of course Zappos.com prior to venture Frogs, Tony co founded Link Exchange, an advertising network that was successfully sold to Microsoft for 265 million in 1998. So that means you actually have some.

Money laying around for the investments. Yeah.

Good.

Alright, so you met Alfred Lynn, who's your CEO CFO in college when you were running a pizza business. And is it true that he was your number one customer? Is that really true? Did you just make that up?

No, he was, he even had the frequent pizza diner's card.

Really?

You had a frequent pizza diner's card.

At your pizza place just for Alfred?

Really?

Yeah.

That's fascinating. All right, well, does he still eat a lot of pizza?

Yeah. Although probably not. I mean he used to eat it every night. I don't think he does anymore.

Okay, so here I am with the lovely Liz and Liz is known as Tony Shay and Alfred's time ninja. Basically some people would refer to, you know, people that assist him as assistants, but she's a time ninja. So what do you actually do here at Zappos?

I helped Tony with the, you know, the day to day scheduling, setting up, helping with meetings, doing some correspondence and a lot of times I'll help out.

If you know, people like Joe come in and you know, want a chance.

To talk to him, I'll help set.

Sort of that thing up.

I just do a little bit of everything all day long.

And I work very closely with Jerry.

He's my go to guy and I'm his go to girl.

So we work together very closely.

Yeah. And she actually set this interview up with Tony. So. You're awesome. Now Jerry is known as the mayor here at Zappos. And what Jerry's going to do is just literally take you through a tour of this and show you and point out what everything is and how it works. Because he takes people through Zappos all the time and explains how this billion dollar company works. Our founder, Nick Swinburne was looking for these pair of shoes in a Mall in 1988. 98. And if you can remember back that far, the Internet was like the space program, it was, was just kind of out there. So he decided he was going to sell his shoes on the Internet and everybody laughed at him. So he called over to Nordstrom's and got a guy that I worked with, Fred Mosler, and pitched him the idea. And actually Fred left us and went with Nick and the rest is history. We did a billion dollars in gross sales last year. We're number 23 in the Fortune 100 Best Companies to work for. We're actually the fastest new company to get onto the list. How many employees does Zappos currently have?

We have about 1300 employees and about half are here in Las Vegas and the other half in California.

1300.

Okay.

And do you pay them more, less, the same as or how do you actually, what sort of the structure of how you run this billion dollar business?

Yeah, for entry level, it's roughly at or maybe slightly above market. And then for the very senior level people, it's actually below market. And our whole philosophy is we really want to make sure that people are fairly compensated, but we're not trying to lure people in by paying them exorbitant salaries. We really focus on the company culture here.

Okay, so. Well, you were recently on the COVID of Inc. Magazine, and in that article you talk about how you pay people a couple thousand bucks to leave after you've hired them for after a couple weeks, I believe. Talk about that.

Yeah. So everyone that's hired here in our Las Vegas offices, it doesn't matter what position you can be an accountant, lawyer, software developer, goes through the exact same training as our call center reps. We call it our customer loyalty team. And part of that is going over company history, our philosophy about customer service, and then actually spending two weeks taking calls from customers. And our whole philosophy is if our brand is going to be about customer service, then customer service should be the entire company, not just a department. So in terms of the offer we make at the end of the first week of training, we basically tell everyone we're going to make you an offer. And here's the offer. We're going to pay you for the time that you've already worked, plus an extra $2,000 bonus to quit and leave the company right now. And that's actually a standing offer until I think six or seven weeks down the line. And the reason for that is because we don't want people that are here for a paycheck. There's plenty of other call centers here. So if you're a call center rep that's making $11 an hour, $2,000 is pretty good incentive if this isn't the right culture or environment for you.

So, I mean, would you recommend other companies do that sort of thing for a screening process or.

Yeah, definitely. I mean, the original thought was these people that aren't really, you know, don't really believe in the company anyways, they're gonna probably leave the company anyways, three or six months later down the line. And by then you've already paid them much more than $2,000. And actually, our problem has been. So in 2007, I think it was less than 3% of people took the offer. In 2008, less than 1% of people took the offer. So we actually keep upping the offer because not enough people are taking it.

What's it at right now?

Well, no one this year has taken the offer yet.

Really? Okay, so you are really trying to encourage. Just to weed people out, just to absolutely make sure they're going to be here for the long term or just totally be into it.

Yeah. And so really, it's part of our philosophy. Employees can view their work as either a job or career or calling. And really we want to move employees up through that path.

Yeah. Well, okay, so the founder originally started it, but you obviously got involved because you're clearly a sharp business guy. But at the same time, I mean, you have, you know, thousands of business opportunities presented to you. Why did you pick this one? And what's the secret sauce behind it?

I think it was just the people. The people that were around were fun. They were people that I would actually hang out with, you know, even if we weren't in business together.

Well, let me talk about that, because I think that's sort of an interesting statement. What are your thoughts about. I've heard a lot of CEOs don't become friends with your employees, don't hang out with them socially. Keep a separation between personal and business. What are your thoughts on that?

I guess we take the exact opposite approach. It's actually one of our questions when we interview people. How do you feel about socializing with co workers? And if someone says, oh, I think there should be a separation, I'm not okay with that. We won't hire them, really. Okay.

So you hang out with your employees and everything all the time.

And actually, when we do new manager orientations, we actually encourage the managers to spend 10 to 20% of their time outside the office with their co workers.

10 to 20%?

Yep.

That's cool. Doing what? Whatever they want.

Yeah. So for different. I mean, it kind of just depends on who's in the group and what they're interested in. But for some people, it might be they go hiking together for others, might be happy hour for others. I think there's something going on with one of the departments where they're going bowling together, and then a lot of departments will mix it up as well.

Well, do you go, do you go out drinking with your employees and stuff?

Yeah, we have many parties and celebrations here.

You know, I have a confession to make. Really. The videos and everything here, Tony, this was. There were some people that were concerned. This is really an intervention. And we wanted to just make sure that you're aware that we're going to kind of ship you off. And we've got a van waving downstairs.

All right.

So just kind of stay tuned.

Well, what.

What are some of the biggest mistakes that people. I mean, you say because of the people, but the culture here is developed. It doesn't just happen. There are certain elements that are taking place here. How instrumental are you, the CEO, Tony Shea? I mean, are you the one that has built this up to a billion dollar year business with your leadership? Or. I mean, how. Because people want to know, how did this happen? How does he do this sort of stuff? So, I mean, if there is any process to it that you can explain, how responsible are you versus other elements?

Yeah, I mean, I think most. The vast, vast, vast majority of it comes from the employees. And I guess if you want to make an analogy, if you think of employees and their ideas and so on as being plants that you want to grow and so on, my role is not to be the biggest plant that they all aspire to or anything like that. I guess I view my role as architecting the greenhouse where they grow. So it's really more about. I spend my time thinking about, okay, how can we create an environment? And how do we. What processes can we have where really employees feel like they not only have permission, but are encouraged to just be themselves and let their true individuality and creativity shine. And that's true whether it's talking to customers over the phone, because we don't have any scripts. We just want them to do what's appropriate for their personality. As you walk around into our offices, you'll see the cubes are decorated differently by different teams. I can't predict all the stuff that happens. A lot of times I'll walk by and be like, oh, what's that? That's kind of interesting. And what ends up happening is. So we didn't always have all these cubicles or aisles decorated. It was more just one team decided to do it, and then the team next to them was like, well, we can outdo you. And then it just is very organic and just takes a life of its own. That's interesting. Yeah. Or if you look at the conference rooms during the tour, we have a conference room that's a Log cabin themed one. And that was the budget for that was just a few hundred dollars. And so it ended up being a great thing where employees, because they knew it was a small budget and it's actually cost us less to do that than the normal TI improvement budget. They basically got together and it was our outdoor team that did this, got together and they spent the weekend putting the flooring in and running around looking at Craigslist or going to swap meets to find all the parts to fit within the budget. And then that also ended up being a great team building thing.

Well, you know, what I'd like to do is to actually show some of the different rooms to all the people that are watching us right now and they can see some of the different elements.

There's the log cabin themed room built by our outdoor team, and there's this room built by the skateboard and surf team. And as you can see, it's literally a boardroom with all the surfboards and skateboards in it. And there's a. Our development team built a bowling alley here and our help desk decided to build, I think, is it Rosie the Robot in the Jetsons?

Honestly, I don't even know.

Did you not watch the Jetsons?

No, unfortunately. I'm sorry, I did not.

Well, everyone else says yes.

So.

And we have a room that's kind of a Zen like feel and it's built by our comfort team. And this, we have another room that's built by our China team, so has kind of China theme to it. So we have a room with, you'll see Polaroids all over the wall and a giant throne there. And actually that's the office of, of Dr. Vic. And his job title is actually just coach. He's a life coach. And basically he's kind of like our own internal version of Anthony Robbins. He gives motivational seminars and does one on one counseling for our employees for anything from career advice, financial goals, exercise, weight loss goals, whatever goals they want to set for themselves personally. He'll help them set them and then check in on them on a regular basis to make sure they're progressing.

This is actually Dr. Vick's office. He's not here right now, but we'll give you a little history of what it is. So in the beginning, Dr. Vick's a chiropractor from Northern California. Nick, our founder, was going to him for an adjustment and he said, I've got this great idea. Give me $20. So Dr. Vick gave him $20.

Then he gave him another $20 and.

He gave him another $20. So he's actually one of our first investors. Joe, we're going to have you go ahead and have a seat the throne here and we're actually going to take your picture. We have some crowns and we have tiaras, both whichever way you want. Joe, I think I will pick this one.

Alright.

And there's a big ruby on the front there. Excellent. You're looking good. All right, so everybody gets one of the pictures here. Now if Dr. Vick got in a physical fight with Tony Robbins, do you think he could take him?

I don't think anyone could overtake Tony. Tony Robbins, he's a big dude. Yes.

Yeah, he's a big guy. Anyway, I think if you went at the knees, I think you could get him down at least maybe wrestle him to the ground. What is your favorite room in the. Do you have one?

My favorite one is probably the log cabin themed one at our outdoor Teamville.

What's your home like? I mean, do you carry the same sort of shenanigans to your house?

A little bit. So I, I basically have each of my guest rooms decorated and themed after a different Vegas casino. So when visitors come, I can just say, oh, you're staying in Mirage or you're staying at the Hard Rock. So it's very easy.

I mean, what's it like being in Vegas, doing business in Vegas, such a crazy town?

Well, it's crazy on the Strip and so most people don't really realize that it's completely different. As soon as you get off the Strip and off the Strip it's like any other suburb. But it's nice that the Strip is always there if you need it. And so I personally don't normally go to the Strip unless there are friends in town or vendors in town.

Well, you know, like for instance, here is the Ink magazine that you were on the COVID and this is a fantastic article and it's why everybody loves Zappos. How do you feel about being on the COVID of a magazine?

It's a little weird. I was actually at an airport a couple weeks ago and buying a water and the cashier had it next to her and then she looked at the magazine and looked at me and she's.

Like, oh, you know what?

You look just like that person. That's so funny.

What'd you say?

I just nodded.

You don't strike me as a guy that's like bragging a lot and wanting to be real famous and out there, you know, swinging from the rafters or whatever the term.

Yeah, so, well, that's. Yeah, I don't actually personally want to be famous, but I want. I want Zappos to be famous. I really enjoy being part of building consumer brands because it's kind of like the best parts of fame without the worst parts of fame.

Gotcha.

Okay.

What I'd like to ask you about is building a brand. What does a brand mean? I mean, I'm in the marketing business. My company, Piranha Marketing, I'm very much against image advertising just for the sake of getting your name out there. I very much like getting your name out there, getting a response back. And one of my favorite definitions of branding came from David Ogilvy, which fantastic advertising guy who wrote Ogilvy on advertising. He said, it's the personality of your product or service, what it is you do. What would be the Tony Hsieh definition of a brand?

I guess there's a few different ways you could define it. One is it's basically just a shortcut to an emotion or a set of emotions. And, you know, I think it used to be that brands, big companies, could go around and say, okay, how do we. What do we want our brand to be? And then they could just broadcast it on tv, and then that was their brand. Whereas today, brand is really no longer completely in the control of the company or the corporation. Really, just what your consumers or customers think of you, that's your brand. So they're really in control of your brand. So we talked about the airline industry earlier in this interview, and the brand of the airline industry is bad customer service. Not any specific airline, but the industry as a whole. And yet no airline set out to say our brand should be about bad customer service. So how did that happen? And it's because consumers talk to each other, and then they form their own opinions, and then they have an emotional response whenever they hear airline industry.

Well, I mean, so you're clearly doing something here that is continually building this culture. And I mean, you even talked about in your culture book and in the article and stuff about the importance of culture. What does that actually mean?

Mean?

I mean, for an entrepreneur out there that's watching this right now, I want to create a great culture in my organization, my business. What does that actually mean?

Well, for us, we've kind of formalized the definition of our culture into 10 core values. And so, really, our belief is that a company's culture and a company's brand are really just two sides of the same coin, and the brand is really just a lagging indicator of the culture and so, you know, you can get away with your culture going downhill today or this year even, but eventually it's going to catch up in terms of how your brand is perceived.

Well, let me actually I have this marked here. It's page 12 of your culture book. Let's see the cultures of Zappos. Okay. Our culture is based on 10 core values. I'm going to read them here. I'd like to actually then go and ask you about a couple of them. One, deliver wow through service. Wow. Two, Embrace and drive change. Three, create fun and a little weirdness. Number four, be adventurous, creative and open minded. Five, pursue growth and learning. Six, build open and honest relationships with communication. Seven, build a positive team and family spirit. Eight, do more with less. Nine, be passionate and determined. And ten, be humble. Let's first talk about wow. What do you mean by wow? Customer service. I wrote a manual for professional cleaners, which is one of the niches that I train. We're actually the largest training organization in the professional cleaning and restoration industry. Got thousands of small companies that are in that industry. One of the chapters I wrote 15 years ago was, you know, wow your clients. So you just, you know, leave them with a smile on their face. What, what does wow mean to you?

Yeah, it's essentially that it's, you know, are you eliciting a positive emotional response from the customer? And there's different ways of doing that. For example, a customer might call our call center and one rep might be really chatty and love to tell jokes and is making the customer laugh. And after the customer hangs up, that's not normal for when you call customer service at most other companies. But then if that customer calls again later and gets a different rep, maybe they don't, you know, that rep is not a joke teller. But they're from the same hometown and then they can bond over that or they hear a baby crying in the background and the other one's also a mom and they can talk about and bond over that. And that's also very unusual. And so I guess at the end of the day the criteria would be, is it story worthy? Is it something that the customer is going to not only remember, but tell their friends and family about and have a lot of positive emotion associated with it.

Well, I want to break this down a little bit because in order for someone to do something like that, have a baby or dog barking in the background, to have that ongoing conversation and bond with people, they need to feel that they're not going to get in trouble. So do you Have a company without boundaries or is it like a self imposed sort of, no one really crosses the line or how often does it get over the top?

I don't know if it's ever gotten over top. I mean, we basically, that's part of our training. We're like, here are ways you can connect on a personal, emotional level with customers and you don't have to do these ways. And really we want you to figure out your own personal way that works for you and your personality, and then they'll practice that and get better over time.

Okay, so. And you say you don't use scripts. So have you ever tried to use scripts and just said, we're done with this or.

No, it's just always been part of our, I guess, just general philosophy that it's pretty hard to give great customer service if you're scripted.

Who do you get advice from? I mean, when you're trying to figure out, you know, what could I do here? I want to try something. I mean, how do you take advice and how do you implement things that you think would be worth trying to.

I guess I really enjoy reading business books about all different topics. So some are about marketing, some are about just culture or organizational structure and so on. And personally, I guess I take a little bit away from each book. And then also just like meeting lots of different people from all different backgrounds, not just the business world. And there's something you can learn from everyone. So those are probably the main ways.

Well, there's one here which is, okay, create fun and a little weirdness. I very much like the way this sounds. So what does that mean to you?

Well, our belief is that everyone's a little weird somehow. And so it's really more just a fun way of saying that we recognize and celebrate each person's personality and individuality and we want their true personality to shine in the workplace. And whether that's over the phone or with co workers, we just want people to feel comfortable being themselves. And then when people actually are comfortable being themselves, it's amazing how many creative ideas come out of that. Right, right.

Do you think most people in the workplace are very uncomfortable being themselves? If you had to look at most.

Businesses, that would be my guess.

Well, I mean, it's sort of like a loaded question. I think it's obvious.

Yes, Joe, I do think that.

But, you know, again, I don't know. But you'd think with as many people that are spending a third of their life working, how has it become. You'd think that more companies would Be like Zappos. Why do you think they're not?

I think it's because it's the way it's always been. If you look at the history of corporations, it used to be really manufacturing and factory base and where there isn't room for a lot of creativity. You don't want someone that's manufacturing certain things where the number one priority is lowering costs and having the least amount of defects possible. You don't want the guy there to just say, oh, I'm going to assemble this thing randomly. And so that made sense in that environment. But we live in a completely different world now. But the management practices, old habits are hard to break I think.

So this is Monkey Row. This is where Tony, Alfred, Fred, Steve sit. They're right out in the open. The best way we feel to have an open door policy is not to have any doors. And so they're readily accessible. Whenever they're here, come on in and ask them a question, get some feedback on whatever you need. Actually this is Tony's fun box. So we kind of add to it every day. Our friends from Blue Star jets came in and there's actually some different movies.

And stuff like that.

You can actually eat peanuts here and throw the shells on the floor. We always think that it's a good idea to come out here of your shelf. This is actually where Liz sits. She's one of the, she's Tony's time ninja and she's also one of the Zap ads. So it's very cool. But open door policy, just come on.

In and have at it.

Do you consider yourself a good businessman? I mean, how do you, what do you think of yourself as?

I guess I consider myself to be open, more open minded than most people in business. And I think that open mindedness and flexibility kind of go hand in hand. And there's actually a quote by Charles Darwin about evolution where he. I don't remember the exact wording, but it's something like the species that survives is not going to be the smartest species or the fastest ones. It's the one that's the most adaptable to change. And I think the same is true for business.

Okay, so, you know, it's funny, I went to Galapagos recently and I went to the Darwin Research center and that was. It's amazing to actually see that because it's true. There are some very strong creatures that never quite made it because they simply didn't adapt. And so forcing your way through something is not always the solution. In the article in the Ink magazine article. You know, they talk about your very low key, quiet, reserved sort of guy. I mean, are you like an introvert? Are you shy? How do you consider your personality? Because we've gone out to dinner before, we've hung out a little bit and you're a guy that always strikes me as hearing a lot. You really listen to a lot of things, but a lot of times you don't always respond. So I think you just take a lot of stuff in. But it's always curious what the heck is going on in your head. Head. How do you consider yourself personality wise?

Oh, definitely introverted, shy. And you know Evan Hagen and so I think it was he that told.

Me.

I think he had read somewhere about, you know, what, what's the difference between an introvert and an extrovert? And he said extroverts talk as their way of thinking, whereas introverts think and then talk afterwards. And so for introverts to talk, it's actually like after talking a lot or interacting with a lot of people, I think introverts need to just take a break, be by themselves and decompress and so on. Whereas extroverts afterwards are actually more energized than they were before they started talking.

Actually, that's a great way of looking at it too. So if you had to go out and really do a big team meeting or do a public presentation, then your natural reaction is, I'm going to go kind of decompress for a while.

Yeah. So definitely after, like when I go speak at your thing, I'll definitely want like a half hour just to chill.

Well, no, the reason I ask about, you know, being introverted or extroverted is you're a guy that puts yourself out there a lot publicly. I mean, you've been on some major media channels, news interviews and whatnot, and you're a public figure. Is that something that you want to do because you're challenging yourself or do you look at it as doing it for the sake of Zappos or is it something that allows you to grow? I mean, what are the reasons?

I would say it's for the sake of Zappos. A lot of organizations only want to talk to the CEO. And so we're trying to figure out internally how do you scale. And we're actually getting more people from different departments to do public speaking and so on. But it's definitely a challenge and definitely one of the parts of the business that I think is not scalable. I really like the Blue Man Group because they can replicate themselves in. So that's something we're considering. We'll just paint ourselves some color.

Honestly, you should do that like the.

Asian Blue man or the other. Well, so, and then the other solution, this has been a challenge I've been thinking about actually for the last couple years and haven't come up with a great solution. But the other idea was. Did you see Total Recall?

Yes.

And you know, the leader of the resistance or whatever was like, is this guy named Quado or Quadro or something? But no one has ever seen him. And it turns out he's actually like this fetus that comes out of someone's stomach and says, but no one has ever seen him. So I was thinking that we could say our equivalent Quadro is Zato is someone that. And that's the true CEO, but he's camera shy. And then everyone can become a spokesperson.

Wow. You know, I am so glad I mentioned the part about create funding a little weirdness, because that is one of the strangest things.

Watch the movie and it'll make much sense.

No, no, but I totally hear what you're saying. I mean, yeah, because the challenge is okay. But this is good though. So you've built a billion dollar a year company here. I mean, you're growing. This is a large organization. You're reaching. I mean, how many, how many thousands of people are you servicing a day that are buying stuff off of Zeppelin?

We have close to 11 million paying customers.

Okay, so for people that are watching this, that are single person entrepreneurs or they've got a handful of employees and they want to get bigger, I mean, you're a pretty big organization that's growing bigger and bigger. What are some tips and suggestions that you would have? Because one thing that absolutely separates you from a lot of people, in spite of saying, hey, I'm an introverted guy, you know, always feel comfortable going out and talking. And when I publicly speak, I feel like decompressing. You're still a huge risk taker and you're still driving. So you're a big thinker. I mean, you think bigger than most people. I mean, is part of success in growing a business, reaching lots of people, creating tons of value in the world, Just a combination of thinking bigger versus thinking smaller. Is it something else?

I would say probably the biggest thing is just patience. And I don't mean patience as in terms of just sitting around and hoping something miraculous will happen. But really when you're making decisions for your business, thinking long term and thinking about what is actually going to make a difference ten years from now. And what's actually going to make a difference two or three years from now? But I think most people get stuck in what's going to make a difference this week or this quarter or even this year. And when you think longer term, the decisions you make end up being very different. And so things like culture, for example, if your culture suddenly goes downhill tomorrow or something improves tomorrow, you're not going to see the effect this quarter or this year, even in terms of your bottom line. But two or three years down the road, you will. And same thing with customer service. If we hypothetically stopped answering our phones and fired everyone in our call center, that would actually have a huge gain in our profits for 2009. I don't think it would hurt our top line revenue. We'd still do over a billion in gross sales. But two or three years from now, then we'd start feeling the effect. So I think the biggest thing is just how, how long term are you thinking?

Gotcha. So for a new business owner out there starting out, what suggestions would you give them to give them the highest possibility of success? What are some tips, advice that you would say?

I'd say the number one thing is figure out what you would be so passionate about doing that you'd be willing to do it for 10 years and not make a dime. Chase that vision and that passion instead of the money. Because I think a lot of entrepreneurs fall in love with the idea of money is the end goal. And when that is the end goal, that kind of mentality actually prevents you from becoming a great company.

Lee, how would you define marketing and why do you love marketing?

Well, marketing connects people. And for my companies, I'm always looking for a way to allow people to see what do we do, how do we do it and how we can serve them. So like in veterinary industry, in the veterinary industry, we have a holistic hospital. So we're looking for that top 5% of people who love their pets so much they will do anything and they come to us and we teach them proactive care and we teach them how to have a longer, healthier life with their pet and people who want to do better in the world. I just absolutely love supporting them on their journey.

Yeah.

So, Dean, we're going to talk about mindset. So I wanted to ask Lee, what is your perspective on the entrepreneurial mindset? I mean, what does that actually mean to you and how do you think about mindset? Because, you know, we can give people all the different strategies and ideas all day long. But their ability to do something with it, I think has a lot to do with their mindset.

100% starts in mindset. And we actually just did a five day auction online, a five day challenge online. And one of the things that we learned is the very first day we brought in a mindset expert to help the entire community have the same frame of reference around how to approach things. And the first thing is, you know, I start every single day in a gratitude circle, sometimes with my team, sometimes with my family. But every single day, I'm looking for the good. I'm looking for the things to celebrate. And I realized that in anything, you could look at a perspective one way or another. You could look at it that it's empowering you and helping you have a better life, or you can look at it that it's hard and a struggle and everyone's going to have things that are difficult and struggles. But how do you convert it to something that's more empowering in your life? Right. A friend of mine, Brandy Gilmore, taught me years ago to look at my stories, whether it's in work or personal, look at my stories. And as I'm telling a story, looking for the piece that's most powerful and most amount of love for myself, and stop the straight air. Don't continue the story to when something went wrong or something didn't show up or somebody disappointed me. She says, wire stories in your brain so that it's the most empowering, filled with the most love, so that you're carrying those stories forward with you.

Yeah.

Great. All right.

So with that, let's talk about something that me and Dean have spent hundreds of hours discussing on I love marketing, which is how to get more customers. So what are some of the best ways that you've discovered in your careers, your businesses, to get more clients?

20 years ago, I bought a veterinary hospital that had already been around for 40 years. Right? So it was 2001, it started in 1961. When I bought the hospital, it had 3,500 current clients. In the following 10 years, I took that 3,500 and turned it into 25,000 clients who literally came and saw us in person, one at a time. And what I learned is it really is consistent action every day, every single day, we had different ways that we reached out. And in the center of my mind map, it says attracting new clients. And then we had 13 different ways they could find us. Right? We had a mind map, 13 days, 13 ways. And the reason it's 13 ways is because there's 13 weeks and a quarter. And every we deep dive on one of them. One might be networking, one might be JVs, one might be social media. Doesn't mean we ignore the other ones. But each week we deep dive on one and get really crystal clear on our plan for that quarter. And then we repeated the next quarter. But it started with the mind map I wrote maybe 20, 25 years ago, and I still use that foundation. But in 2008, when the market crashed and veterinary hospitals were empty, they had hallowed halls. They were taking clients and making them part time employees. We were bursting at the seams and the group was wondering, like, how did we always have more clients coming in, even in a down market? And it was because consistently, every single day, we were doing marketing things. Every day, no matter what, something I would test might be Facebook ads in another city and then count how many new clients we got from that city. But I made it fun for the team too. I will give them ways that they can participate, kind of gamify it at the front desk. How many calls did they close and turn into appointments for the team? How many people came to us from Yelp? And counting it and seeing how they converted it. And the more we gamify it, make it fun for the team and they get to work win as well, the more fun it is for me.

Love it. Well, you know, you're quite familiar with elf. Go ahead, Dean, what are you gonna say? I was gonna say that's a lot like ipower.

Like what?

Getting your team members involved in. In the process.

Because everybody's got great ideas. You just need good direction by, you.

Know, framing the question that's going to elicit the great response. I remember reading there's a great book about Albert Lasker, who was one of the old original advertising men and when they were selling refrigerators, you know, back when refrigeration was brand new, one of.

The things that people were afraid of.

Is that they didn't want to have something that was plugged in all the time and sucking electricity because they were new to the whole. You had this meter outside your house that you could see it moving, and when that's moving, it's costing you money. So people were weighing the benefits of having refrigeration versus their fear of this bottomless pit of electricity spent. And they said, he tasked the entire company. He said, we need some phrase that makes people comfortable with the. With Frigidaire as the brand that they can trust for refrigeration and somebody who.

Was like the equivalent of in the.

Mail room came up with the idea.

Of that every Frigidaire is equipped with meter miser technology. And just those words, meter miser said exactly what you need words to say. To say it's watching your back, it's.

Not going to take any more electricity.

Than it absolutely needs to. And that was really the thing that made people comfortable choosing Frigidaire over all the others, because all the others are just money pits.

But you better get that meter miser.

Because that one will save us the most money.

There's a really big key you said in there, Dean too. And it's Genius, which is coming up with the right phrase that allows your customer to feel comfortable with their decision. They made it. They want evidence. They made a great decision. Right. And one of the things I taught my front desk, Joe, which was really important in the shift in closing clients at the front desk is no matter what the client asks them, the first thing to say is, yes, I can help you with that.

Absolutely.

Because then it puts their mind at ease that they have the right person and the right person who really cares about helping them. And just by using that one phrase, even if they have to say, you know what, I have to check on the answer and call you back, it's okay. Because they set up the relationship of I do want to help you. And I think that that's just been really key in my business, is that my clients feel like the team sees them and listens and cares.

Hey, Joe, I just saw Evan Carmichael's here too.

Yes. We need to do a shout out for Evan and we. Evan is just a master at YouTube videos. If you don't follow him, follow him on YouTube. He's got 2.6 million subscribers, over 385 million views. I know that because he was just a guest on the Genius Network meeting we just had. And we're going to be doing a jam session with him at the Genius Network annual event November 6th, 7th and 8th because it was such a big hit. But interview on his on his channel right now with Kevin o' Leary from Shark Tank. He brilliantly did a two parter with him where it's one half of the.

Interview on his channel, 1/2 on Kevin O' Leary's channel.

So what is a great model for collaboration there? Well, Evan, why don't you pop on and explain what that is and then post it in in the link so people can watch those interviews. And if there's anything that you want to say to either make fun of Dean or to ask Lee or mention anything, feel free wherever you're at out there, bouncing on his trampoline, I'm sure. Where are you at right now?

I am on my trampoline and, you know, I just discovered Dean is a fellow Torontonian, so we can't make fun of him. We gotta only show love. Shout out to Lee and her website too, because I was on and she's got this. If you haven't seen Lee's website, I popped it in the chat and it's this epic video across the top of her coaching and speaking and with Oprah and high fiving and it's like, wow, how did she do that? I wanna. I gotta get Lee's website people on board. But I think that's a great. Hey, Joe's on there too. Joe, you made your appearance. You're like right after Oprah on there. The link, I don't know where the link is. I'm sure it's somewhere off my YouTube channel. But Kevin O' Leary is trying to grow on his YouTube channel and he.

Wanted to do something.

He wanted to do more collabs. And he happens to be in Toronto as well. He wanted to do something in person.

Because all of his stuff has now been, you know, remote and, you know, Covid era. And so we connected and we did a two part series.

We had two hours or so of time to talk. And what we did was we took questions from both of our audiences. What do you want us to answer? And then we went through about 11 or 12 questions and we put half on my channel and half on his channel. And since I edited it or my.

Team was editing and filming it, we took our favorite questions and then gave him the rest. But they're still good on both channels.

And one of the great things you.

Can do on YouTube is there's a thing called an end card, which in.

The last 20 seconds of every video, you can call things out and it's clickable. So that could be your PDF download, that could be your lead magnet, that could be sign up for your email, that could be your website, that could be your offer that you want to send people to.

And so what we did was we did a thing at the end where.

We said, hey, if you want to see part two of this interview, go check it out on Kevin's channel or on Evan's channel. And we called the Kevin and Evan show for that day. It's just great way to do collaboration. So anybody who's doing YouTube, I always love Genius network events. They're great, amazing People, huge warm hearts here. And so I'm looking forward to the.

Annual event and jamming out with all you guys.

Awesome. Yeah. And there's a bunch of genius network members that are here too. So Evan's going to do a whole session on just how to really build and grow a sustainable YouTube channel, which is awesome. So, Lee, you know a lot about elf. Easy, lucrative and fun. Running an ELF business versus a half business, which I refer to as hard, annoying, lame and frustrating. What does an ELF business mean to you? Because you tend to have a lot of fun in what you do.

It's true. And that is the actual criteria when I'm taking on a project. Is it easy? Is it lucrative? Is it fun? MIT knows it as well. They run it through the same filter. I actually spoke to 8,500 event planners last month and I drilled this home so much that one of them sent me a gift with Lee Richter. Easy, lucrative and fun. I'm like, well, it's actually Joe Polish, but I give. But they just have heard it so much because I think, why make it anything else than easy, lucrative and fun? Especially at this time in my life when I have so many choices. And that is literally the filter I go through first for every project, it has to meet those three criteria. Seems so simple. But there are things that don't meet that criteria. And I cut it out.

Yeah, I love it. And that actually that term was given to me by my friend Mark Schneider, who recently passed away. And it has been a great criteria on not just marketing, because I've actually trademarked ELF marketing. Right. And so if you do use it, you have to give me credit because else we're gonna just sue you. Really? No, I'm kidding. Well, depends. We may sue you. It depends if you totally plagiarize my shit. But I love the term elf and I recommend using it as a criteria. Use it as a process, and it's helped me. I used to think of it just as marketing, doing automated robotic types of marketing methodologies. But I now apply ELF to people, projects, anything. Because if it's not money, is it easy, liberating and fun? I even applied into my personal life. So I'm going to take next year as a sabbatical. And so there's going to be a lot of things that need to be just ELF for me that aren't money related. But there, you know, has to be liberating. So I highly encourage it as a filter because the genius network members that we have a tool called ELF versus Half, where they list what are the people and the projects and things in their life that are elf, and what are the things that are hard, annoying, lame, and frustrating. And really take a look at how do you eliminate the half and how do you get to the elf? So, one thing I want to I have this question I wrote down here, and then I'm going to ask Jeff Madoff to ask you a question about pr. How can people utilize tough times? As many people in the world have been going through incredibly difficult times with the pandemic, how can people utilize tough times as a springboard for greater success? And what does that word that gets thrown around a lot success mean to you?

Well, success is that I have freedom of time and I can make choices on how to spend that time. That's what money buys me, is freedom of choice, period. That's how I see it the way right now. You know what, looking at tough times, the first thing I did, I remember on March 16, I sat down with my manager and I'm like, what has changed in our world right now? We wrote a list of 25 things that had changed based on Covid and the pandemic, but immediately turned it into what can we do About It? And then a week later on Slack, they were celebrating how things were actually getting better. But it was because we were identifying the challenge and overcoming it together that they were excited about it. Right? They weren't afraid anymore. And they also knew if any changes happen, they'd find it on Slack, so they didn't have to worry about us making different changes and doing things in the company unless they were included. But I tell you, we have had so many more opportunities come out of this pandemic. Our company's up 31% this year. The team feels essential. They feel excited. They feel like people really need them and want them. And so what I do is I highlight that every Friday I write, here's 10 things we're celebrating right now. And one of the things I've learned is to share that list with our clients coming in too, so that they could see the value of the team. And by sharing it not only with the team, but with the clients, they could see we're celebrating the team, but also what we have to overcome as well, because the clients are coming with their perspective of what they have to overcome, but they're not thinking about all the things we have to do to be there, ready for them. And so I think by highlighting that it's now elevated on both sides, the appreciation, the clients appreciate the team more and the team appreciates their position more. They have seen so many people lose jobs, lose opportunities. And even last Friday was boss's day, and they came in and they wrote me this beautiful card. And each one of them is like, thank you for being a leader and helping us be happy rather than scared. And I think a lot of that is just being consistent, sharing what is the challenge, and then overcoming it together.

Okay.

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