Episode 44: Communication and Credibility with Scott Spiro and Tony Lillios

Oh, I have to record here.

It's the red button.

Oh, yeah, baby.

The funny thing is. It is a red button. That's the funny thing.

You want to mute me now? Probably.

I love it.

You are listening to the Profit first.

Podcast, and you made it to episode 44. Yeah. Gosh. Ooh, dude, I think I blasted the system. I yelled that way.

Did you hurt yourself?

Yeah, my vocal cords are a little strained right now.

Save it, my brother. We're gonna need it.

No. Here. I'm a little verklempt. Lima beans. Neither a lima nor a bean.

Discuss, discuss. Welcome, everyone, to the Profit first podcast. I'm Chris Curran. I'm the founder of Fractal Recording.

And I'm Mike Michalowicz, the author of Profit First. And you're listening to a show where we talk about every single stinking angle that we can think of around profitability and corncob pipes. Last episode.

Oh, yes. And you can find us as a podcast on itunes and Stitcher and Tunein Radio.

Tunein Radio.

And there's another app called. Wait, brah.

Brah.

There's another app called Jabbercast, by the way. We're on there, I think. Anyway, and our website is profitfirstpodcast.com. you can find all our episodes and also funny pictures of Mike.

Yeah, there's some. There's some funny stuff that's up there for real.

There's funny pictures of Mike. I'm not kidding.

He's not lying.

Okay, then I gotta look.

You didn't.

Oh, yeah, I know. I know. You're talking about. I know. Yes. There are funny pictures of me. Oh, my computer's cut out. So. Dude, you know what we're talking about in today's episode?

Dude, Profit. Hashtag.

Yep. We're talking about profitability. We're investigating two business entrepreneurs, which maybe sounds a little bit redundant. Business and entrepreneurs. We're talking about two entrepreneurs, one from the tech service space, another one from the tech tech product space. And you're gonna see how these guys grew their businesses and have some good tips for us around profitability. But before we do that, we always thank. And, Christina, you're gonna tell me who these are. We always thank our sponsors. They are nextiva Bang T Sheets. Boom Cha Ching. So we'll dig into that in a little bit. So, Chris, what have you been up to, bro?

You know, I went to the podcast movement a few weeks ago. It's this. It was the second annual. It's like a big conference for podcasting. And it was cool because Marc Maron was there, and he's the guy who. On his podcast, it's called wtf, he interviewed President Obama.

Oh. In his garage.

In his garage. He gave the keynote. It was so cool. Yeah. And the woman, Sarah Canning, who did the serial podcast, she was there. Did a keynote. Pretty cool, man. Podcasting is, like. It's just awesome.

It's mainstream. That'll put you on the map, too. You bring in a guest like that. Like, if we had. I mean, I'm not dissing Scott or Tony amazing guests, but I will tell you, our ratings would skyrocket if we had Obama in here. Or maybe Trump. We can get Donald Trump in, dude. Yeah.

When Obama's out of office, we should. We should make a run at him.

We should make a run. Hey, Don, why don't you come on our show? I wouldn't do that. You're a loser.

Oh, Saying Obama.

Oh, but I told you. I confused. So, dude, you know, I've been up to what I started. I started a new trend Here at Profit First Studios, we now have Profit First Friday. So on Profit First Friday, you have to wear one of our glamorous Profit First T shirts all over social media. Yep. We're recording this on a Friday, and it's all over social media today. I mean, going insane. There's easily three, four views. Easily, Easily. All mine. Checking. Is it still up? Is that picture still up?

It's so easy for you guys to be motivated in that office because of Ron. I mean, Ron just rules.

Yeah, he's here right now. He's sitting behind us doing stuff.

Just call Ron. Just talk to Ron. Don't worry.

And we just. He just brought a new member. One of our traditions is when a new member joins our organization, we play thunderstruck. So between recording episodes, we had thunderstruck struck by acdc, cranking. Ron is landing so many members. We're bringing on so many people on board that we're getting tired of listening to the same version. So now we listen to a. Like a.

Like a redneck.

Yeah, redneck. A bluegrass band playing it. We found one that's.

Violinists are doing live from Hungary or something.

Exactly. Exactly. All right, dude, let's get. Let's get down to our guest. All right. Okay. Scott. Spiro. Now, I know Chris. You recognize that name because he is the president and founder of Computer Solutions Group. And. And this is where you recognize him from. He is the author of Hassle Free Computer Support. He founded and started his business in California, and he's grown it significantly we're going to learn some tips and tricks right now. With no further ado, my boy Scott. Spiro Scott, welcome to the show.

Mike, how's it going?

Good, good. How you doing?

I'm doing great, great. Hashtag, I've missed you. Hashtag Obama. Hashtag Trump. Hashtag, where's my profit for a shirt? Hashtag, where's the beast? Profit first.

Love it.

Oh, my God, I've never been hashed up so much. Hashtag, I owe you a shirt. Hashtag, I don't know if I really voted for Obama because he came president I felt guilty about, so I said I did when I really didn't. Hashtag, Hashtag, I gotta see at some EO event. Tony Lillos, who's joining us later is an EOer. Hashtag, Holy E O. I don't know.

Hashtag, I'm gonna punch you in the face.

He's just talking in sentences and saying hashtag before it.

You know, hashtags replace. Remember used to when you sent a telegram, you have to say period or stop at the end of each sentence, right? Hashtags replace that, Scott.

Oh, that's classic.

Wasn't it Jimmy Kimmel and Justin Timberlake, right? They did the spoof on Saturday. That's the one you gotta watch.

Yes.

Oh, I haven't seen that.

Oh, that was the best.

Hysterical. YouTube it. It's hysterical.

Yeah.

Okay, I gotta see that. Scott, tell us a little bit about your business. The early days when you got started, what was it like? Who was there? Tell us about the starting up days.

Sure. So I kind of got into this back in 1996. I was actually a theater major at UCLA and I was really sucky at waiting on tables. So that kind of put me in an interesting spot because all my friends were waiting on tables and I was getting, you know, I couldn't do that. So I kind of fell back on what I also could do, which is a little tech stuff. And I remember being at my agent when I was doing commercials and they said, oh, sorry for keeping you waiting for so long. We thought you were an actor. You're here for the it. Come on back.

Oh.

And that was kind of a mind bending moment when I realized that it was more important than the actors at the agency. So I took that as a sign and just really started helping people that I knew, helping them with their computers at home.

When's the realization you had that you don't want to be in theater or in acting and that you want to go to start your own business?

Probably When I got married and I realized that, you know, that was, it's hard to say, it just kind of worked out and I started to enjoy business. And I have a buddy of mine that kind of pointed that out to me and he said, you know, you really get turned on by growing businesses. And I hadn't really thought about it, but I would say that during the early years it was tough. It was really tough. We all know how tough it is to start a company and since I wasn't fully engaged in it, it probably took a little bit longer. And with everything that happened in 2000 with the, the bubble bursting, which set me back and then we had nine, 11 and then 2008, 2009 got tough. So it's almost like the third iteration of the business. But, but we've grown 250% which put us on the Inc. 5000 list that just got announced two days ago.

Oh, nice.

Yeah, it's so it's, it's, it's been a.

Give me the comparative meaning where compared to 96 when it's just you and a. And a waiter's plate. Give me the comparison to today, 2015. What's the business look like today?

So I think by probably around by 1999 it was maybe myself and maybe four or five full time employees and some contractors and we were probably doing a quarter million dollars a year back in 1999. A little bit different than or now I should say. Whereas now we've got about 25 full time employees and we're doing about 3 million top line revenue and growing steadily.

That's nice.

Wow, cool.

And let me ask you the big question. Is the business profitable? Are you taking home money to support your lifestyle plus some now?

Well, I've definitely improved over the past three years. I've definitely gotten to the point where I'm paying myself a salary that's actually useful, whereas a few years back I really wasn't. And I hired a guy, an outsourced cfo and he said, look, if you're going to be doing this, you might as well go get a job in Microsoft or Apple. You'll probably make double the money and work a lot less. That really started me thinking about what it was I was trying to do here. That was about three years ago.

Let me ask you this because so many entrepreneurs are waiting to make money for themselves one day. They think the business has to keep growing and keep growing. Was it simply the words of hearing from an outside expert or was there something bigger going on in your personal life? Like, what really triggered that?

Well, I think it's important for any business to have a really good team around you and people that you really trust. And this was a. This is. My name's Mark Wald, and I really trust him, and he's just a great guy. And he told me straight out, you know, sometimes you need your. You need friends that you trust to give you the harsh reality. And I've had to give that harsh reality more than once. You know, I'm constantly learning and evolving, and I try to surround myself with people that know more about what's going on generally than I do, and that can advise me on how I can get to that next level. And I'm in those peer groups to help me do that.

How did you make the transition? So you weren't taking much money home. This outside advisor says, you know, Scott, you guys are taking some. Some money off the table. But I'm thinking that means maybe you can't. Maybe you got to get back and be doing the work and not managing other people. Maybe you got to lay off someone. Where did you get that money from? How did you go to making a salary for yourself?

Well, I was making a salary. It just wasn't a. It just wasn't a big one. It was like 70k a year, probably, which isn't bad, I mean, depending on where you are in the country. But here in Los Angeles, it's not. Doesn't go very far.

You can't buy a hamburger for that.

No. In n out keeps raising their prices.

Killer hamburgers.

How much? Going to double. Double cost. So I just, you know, I just looked at where I want it to be and trying to figure out what is my life plan? Where is it that I want to. What is it that I want to do? Because this isn't easy, this running your own business thing, this entrepreneurial thing. So really how I did it was I started focusing on where can I cut costs, pay off my credit cards that I'm paying for interest on, and really start figuring out how can I bring on new business. And that's where I started. How can I bring on new business? Now? Once I was successful at that, now I had some new issues to deal with, a lot of them. But that was where I was kind of focused back then, getting.

Well, tell me, tell me about bringing on new business, because I think that's what we're all trying to do. Everyone wants more clients. How did you find. What was the method you found to bring on new business that was supporting your profit?

Well, it wasn't, it wasn't as one thing. It was multiple things. So. And by the way, everybody has different things that work for them. And I'm a firm believer that we should focus on what comes naturally and what we're probably good at because it's easier, we'll do it more. So for me, that's actually going out in the community, that's networking, that's joining different chambers. That was how I started. I then got involved with direct marketing, did a little bit of that. Do online pay per click with Google and Bing. That really has done well for us. And also going out into the media. I was on CBS Evening News earlier this year. I just did. I've done four or five articles for CBS Local here in Los Angeles and done KTLA Channel 5 news and started speaking. Which bike? Thank you. You inspired me to focus on that. And so for me, that builds credibility. And so if I'm out meeting with clients and I've got competitors that they're looking at too, just like they're going to say, oh, you made the Inc. 5000 great. You must know what you're doing. Or you've been on television, so it's in our culture, as you know, it's kind of natural.

Do you find that your prospects, as you're soliciting a new client, that they're making a determination to hire you or not hire you based upon a very few factors like what you just shared. Maybe they hear that you've been on television, they hear that you're an Inc 500. Then they say, well, clearly he's superior and they proceed with your firm.

I think that's part of it, but I don't think that's the only thing. I don't think that they make a buying decision based on it. I think that you've got to have a lot of other ducks in order before they're going to, that's going to, that's going to help in that buying decision. So, you know, it's, it's, it's what, what you're pricing. What are you, what's your, what's your value proposition? What are you promising to do for them? Can you, do you have the testimonials to back that up from existing clients? You know, they want to know what you want, that you know what you're talking about. And in technology, when we're going in and we're, we're taking over the infrastructure of someone's livelihood, it's, it's all that more important that we really do know what we're doing, right?

Because they're putting a huge amount of trust in you, even bigger than a bank. You don't only have control over all the computer systems, you have control over all the data on the computer systems, which includes the bank information and all their intellectual property. How do you transfer that trust so that a new customer will come on board with you?

The only way that I know that that can really happen is by having plenty of testimonials. Credibility is everything. If you're up, if there's three options, there's three choices, and they all look good, they're going to start calling your references, and you don't want references that are just tepid. That's happened to me, and that's not good. You want raving fan testimonials.

That's a great tip.

Use the Net promoter to try to measure that. But go ahead. Sorry.

Oh, so tell us about the Net promoter. How do you find those raving fans? I will talk you up.

Well, obviously, calling them and talking to the ones that we know are happy, that's the best thing. We're now we're getting more advanced. We're running parallel surveys that we can measure client happiness both on the tickets that we service, individual tickets and support tickets, but also with using Net promoter tools. We're trying to figure out what our Net Promoter scores. We just started that a few months ago, where we're just tapping people every three months just to see how they're feeling. And asking that question, would you recommend our company to your friends and colleagues? And how would you support us?

As my final question for you, you started out, you were doing the work. At least that's what I heard from you. Now, in 2015, what is the biggest role that you have that supports the profitability of your business?

Well, the biggest role that I have right now, in my opinion, is developing and maintaining relationships with the decision makers and the C levels of the clients that we work with. Because the landscape changes over time. And if we're not, and this has happened to me, you can have a great relationship with a company and they're growing and doing great, and Maybe they've got 200 employees, which is the size of companies we work with. And over time, some of the folks leave. Well, if some of the folks leave and they don't remember what you had accomplished and you've got some new people that come in that you don't have that relationship with, you could find yourself in a tricky situation. Because in my business, when Companies hire new CFOs or new COOs or those sorts of folks, they immediately want to show value. And how do they show value? Well, making changes that they hope will improve profitability for themselves.

Right.

A lot of times us as vendors can be on the chopping block, to be honest with you, even if we're doing a great job.

Yeah. Manages relationships, particularly during transitions. Scott, this has been some very insightful stuff. Thank you so much for coming on today's show. If folks want to use Computer Solutions group, how can they find you?

They can just go to our website, which is www.csgsupport.net. and one last thing I just want to say is growing a business quickly does not always equal profitability. You have to go in understanding that you may not experience profitability if you're growing quickly. And I had to learn that, believe me. So.

Yeah. But sounds like you're doing okay now. Oh, yeah, yeah, yeah. I love it. I love it. Scott, thanks for these tips and thanks for joining us today.

Thank you.

Thanks, Scott.

We'll catch you later.

Thank you.

Yeah, I got. And by the way, the link to his website and all the other links from the show will be show notes.

Yeah, show notes. Yeah. Chris. So, you know, Christina sits here. You got to see her notebook. She's tracking down all this stuff. So we got. We're packed with show notes already.

Oh, wow.

All right, dude.

So listen, now that's efficiency.

By the way, Scott is a wonderful guy. So we went out, he was talking about his speaking career. He's got a significant speaking career now. We met up, I think it was in Nashville through another organization. I spent two or three hours with him. Such a nice guy. I love to see someone that just loves his family, loves his career, just loves life out there building businesses because I think it just spawns on more people. And that's who Scott was and why I couldn't wait to have him on the show. That was another guy like this.

By the way, was Scott hanging out with you and Dawn Brolin drinking mad dog 2020? Was that her?

No, no, no. I don't. He doesn't know who Don Brolin is. Maybe he does, but not. Not through me. And I don't think he could handle that. Listen, dude, I can't handle her. Mad Dog 2020, right?

Geez.

Yeah. But talking about party animals, we got one coming on board right now, actually, I take it back. I've known Tony for 15 years. Tony Lillios, Really?

Yeah.

I've never seen him party, like, get out hand and party I've seen myself get out hand partying and Tony having to talk me off the ledge, but never the reverse. Now, Chris, right now, here's what I want you to do. Look at your. Around your desk, look at your cell phone. Anything that has a casing around it. Cell phone's a good example. There is a good percentage chance that could be one right there, Chris. Hans, that Spec is the designer of your case. Well, guess what? Tony Lillios is the founder of Spec Design. Grew this company from $0 to start up in 2001 to 140 million before he exited in 2013. With no further ado, my personal friend, Tony Lillios. Tony, welcome to our show. There he is.

Yeah, baby.

I'm not as funny as you guys.

You're funnier. And you mocked us. No, Tony, you are funny. Would you mind recounting the. When you tried to persuade the group of Goters to do the Iron man with you and you wore your skivvies.

Are there photos that are going to end up on your site with this? I hope so, yeah.

Do we have photos of that?

If you give them to me, I'll put them up.

Would you mind?

We can throw one up. Yeah, yeah.

We can skip the story.

First question, please.

All they say is 100 people in the room. Tony walks in in a bathrobe, and everyone else is, you know, wearing their business attire. Tony walks in the bathrobe, like, what? And that bathrobe drops to the ground. And he's like, you gotta join me. And he's in his skivvies.

You want a piece of this? I have so much respect for you now, Tony. I really do.

Really? Respect.

So, Tony, tell us about Speck and how you got started back in 2001. How did you come up with the idea of doing cases for phones and other products?

Yeah, so we started a consulting firm in 96, and we were running that out pretty successfully. It was growing. But when we started it, we knew. We even called our own business the Dark side. We tried to make sure we didn't spend all our resources just on consulting. For us, it was just, you know, it was like the oldest occupation in the world. It's just you charge for an hour of work and you get so many dollars for it. And it wasn't very. Didn't take a lot of smarts to do that for us. And so we wanted to develop products and companies around that. And we had a lot of misfires in those first five years. And in 2001, we were starting to make cases for the Compaq IPAC. What are these things called? PDA' so we were making PDA cases, and then we kind of latched onto this iPhone thing and the ipod that was out there. And all the cases we saw out there were these black leather cases, pretty cheaply made. And we thought, where can we bring our design skills, our molding skills, and bring it to this market and charge a premium for that? So where can we take a commoditized. Commoditized market, charge 25, 30% more for something that's a bit more. Wow. A bit more functionality attached to the product? And the market could support that because the products now are becoming more expensive. So someone's willing to spend more money on an accessory at that point.

Right. You buy a $500 phone, a $30 accessory. Seems like nothing in comparison.

Exactly.

You know, Tony, I remember you sharing a story with me about you visiting a store that only sold Motorola. Remember, the RAZR was real popular, and that sounded like an aha moment for you. Do you mind sharing that story with us?

Yeah. What was going on is they were only selling Motorola cases at this point. And for us it was that. That classic black leather case. And for us, we knew how to make molded cases that snapped on to products. We were making them for other consulting clients. And, you know, it sounds strange, but back then there was no such thing. We invented the snap on case market. And so that's where the real aha moment for us said, hey, we can bring our skills and our. We know how to do this, you know, and let's bring it on for the razor market. Because the price point was really there. Now with a RAZR that could support that.

I have a question, Tony. Was it risky kind of inventing that snap on case and putting your investment and your resources toward that, or was the market just ready? Was it tricky being profitable in the beginning with that?

It was a bit tricky for us because we were self funded all along. We in the beginning could only go after markets where we could afford the inventory, essentially. And so here we are designing network routers for Cisco, and then we're designing plastic parts for these guys. But it wasn't so risky for us. I felt like once we were in the market because it was a blue ocean for us, when we went into a retailer trying to sell on these snap on cases, they seemed to get it pretty quickly. We weren't a me too product. We were just a whole other category. And they were really, really excited to have us on the shelf. Right from the beginning.

Nice.

You know, I think history has a propensity to repeat. And I think back the stories of Ford motor car. They only made black cars. And I think it was GM who said, well, why don't we add, like, different colors, like red and green and blue? And then GM exploded, and then Ford was actually forced to introduce new colors. Tony, I remember the time going into those Verizon stores or whatever, and everything was black.

Yeah.

Was it that obvious that the world wanted it, or did you have to test it out to prove that design and color would get some traction?

I think it was just plain laziness on that part. And so for us, it was really easy to bring in. I mean, that was our personality, and that was our background in design. So we brought color in pretty quickly, and. And it was very much responded to positively in the market. We even went so far. One thing that was really successful for us in the beginning is we were selling these cases for 20 bucks, and you'd have to pick the color you wanted. And what we figured out is if we sold a three pack for 30 bucks, our profit margins were even a little bit higher. But the value to the customer felt like they were getting so much more. Then they got to choose which color. The retailers only had to stock one three pack with three different colors. They didn't have to have three different SKUs. And that was a real big success for us in the early days.

Really. So let me just recap what I just heard. One case would sell for 20, a three pack for 30. And for you, that was actually more profitable.

Yeah. Because of the way the cost of goods kind of work out and the shipping and.

Yeah.

Oh, my God, What a genius idea.

Right?

Yeah. I remember you when you did that, because we were at. So Tony and I, Chris, we go to an annual event up in Boston with roughly 100 other entrepreneurs. And I remember you sharing that with the group. What kind of effect did that have on your revenue? What did the numbers go from once you introduced this three pack concept?

That was our first hockey stick, without a doubt. We're kind of chugging along and then trying this, that, and the other thing, and then every once in a while you do something and it connects. And that was definitely a hockey stick moment for us. Radio Shack was a big retailer for us at that point, and that the sales just really drove pretty solidly through that channel for us.

Anyone that doesn't know what a hockey stick moment is means, if you look at a line curve, like growth curve usually goes flat and what they call linear growth, where you're moving very slowly and all of a sudden it gets this skyrockets up, kind of like the curve in a hockey stick. That's what he experienced. So once you find this is working, Tony, what do you do? Do you. Is this the time you seek out investors? How do you take advantage of something that's now working so well?

Yeah, I mean, it really feels like you're at a fire hydrant and someone just popped the lid and there's just water going everywhere and you're moving. It's a bit chaotic at first because it's just. You didn't plan for that moment. It just happened suddenly. So staffing up was real critical for us. And then a few years after that, into that hockey stick moment, we realized we needed some horsepower on the team. That's when we started looking for a real solid general manager, now a CEO of the company. Monster Cable was local to us in the Bay Area, which is also similar to us. They're in a commoditized market, selling cables, but at a premium. They're adding a value. They have a brand associated with them, which is very much the kind of space we were in, the CE market, consumer electronics market, trying to sell a premium product in a commoditized world. The former COO there, Irene Baron, we got her on board to run the company and just really helped us operationally handle this. It very quickly became an operational nightmare challenge, something we definitely weren't prepared for because all of us had come from a consulting, smaller business background. And very quickly, we're doubling, almost tripling year over year. And so it grew quickly, and we needed the right people on board to handle that.

How do you know when you're not the right person? Meaning how do you know that you can't just force your way or push your way through? And it's a growth opportunity for you versus it's so outside your capabilities that you need to bring in the outside expert.

Yeah, that was a great moment for us. I think me and my partners have never had a real big ego about it being ours. At first, we were detached from our own ego, and we were always focused on what's best for the company. So that was required to be able to bring in someone that early to do it. And I think for us, it was not necessarily just. We could have probably grown into those skills, but it was a desire of that doesn't really feel like what we want to do. It felt very number, detail oriented, that it wasn't really in Our natural skill set and strength. And it was very easy for us to hire somebody else to take over those roles within the company.

That's actually an interesting measure. Do you want to do it or not? If you don't want to do it, that's usually an indicator. You said you had some other hockey stick moments. What were the other moments that come to mind?

Yeah, so for us, I feel like when we came out, what we call the candy shell. So this is a case where and originally the code name was called Plubber. Thank God that never went to market. Wow.

Is it a fat case?

Internal rubber elastomer. And then outside, a hard outside coating. And so what that allowed is so when people put it in their pocket, the rubber cases for people were just sticking on their pockets and they couldn't kind of slide it in. But the hard plastic cases alone weren't giving enough protection, enough drop protection. So we came up with this two layer co molded design that we called candy shell. And it had a real distinctive visual feature. The case you saw this morning is probably a candy shell. And that just became our next hockey stick moment. And we just kept building off of that. More colors, more color combinations. So now we have two colors to work with. So you have a little bit more interest there. And then we started adding more functionality. Candy shell card, where you can carry three credit cards stand. There was different kind of things we could do with that platform. But that for us was really because at that point cases started becoming commoditized. So everyone had you go to the mall in the center aisle and buy a cheap case for your phone. So then when we came up with this co molded design, that was a new blue ocean for us, that we were the only ones, we created that market.

So every time you moved into a new category, it sounds like spec founded the category. How quickly did the competition set in and were they stealing your ip, your intellectual property? I want to know about the competition when it comes to a new invention that you guys would come up with.

Yeah, their competition moves in pretty quickly. The problem for them is that we have the peg hooks. So you can come in with a me too product pretty quickly. But if you don't have retail relationships, you're not going to win until there's a new cycle. And so when a new phone comes out and the retailers are reconsidering their map of what they want on shelves, that's the chance, that's the time you have to start kind of playing hardball. But once you've got enough momentum out the gate and you've got the peg hook, you're pretty solid for a little while.

Of course, you were very intimate with the cycles when retailers would up the next order because the new phones were coming out. Was there something you could do to protect these impostors or competitors from setting in and taking your space?

Yeah, we do have IP around it. What's changed in our space is that Design patents maybe 15 years ago were considered kind of frivolous and not really enforceable. And what we're finding now is design patent really focuses on the look of a product, the kind of the aesthetic of it, not the function. A utility patent would focus more on the function of a product and how it's assembled. And what we're finding is that design patents are a lot more important these days. They are enforceable. And unfortunately, there's a ton of litigation around in this space. You'd be shocked for a space that you is just a bunch of cases. There's a lot of legal battling going on that's appeared in the last six, seven years, and that's part of doing business now in this space.

Let me wrap with this. Is there one strategy or recommendation, maybe the first that comes to mind that as other people listening in are trying to emulate some of the success you've had, is there anything specific you've done to assure profitability for your business?

Yeah, I think in terms of not just focusing on top line. So for us, we picked our partners, our retailers, early on. So if they weren't a good fit, if we couldn't make enough money from them, we would say no. Even though you're like, how can you not say yes to a sale? We were very clear what margins we needed maintained to have a healthy business. And we turned a lot of business down, and we continue to turn down business because of that.

Be selective of your clients, Tony. This has been fantastic. If folks want to check out the spec products, the company you brought to being, where should they go?

Specproducts.coms P E C K products dot com.

Tony, absolute joy having you. I'll see you up in Boston, man.

Awesome. Great.

Thanks, Tony.

Thanks, Tony.

We'll see you.

Great story. Thanks.

Isn't that amazing, dude? I mean, in retrospect, it's so obvious. Oh, here's what you do. Make a hard case, put a little gel inside. It's like so obvious. But up to that point, no one did it. And same with the black cases. Like, I can see like, oh, let's do a new color black or black.

Like, lack of imagination.

Yeah. You get trapped in success.

Yeah.

I use that cheesy flip phone, the black leatherette case in the plastic window. It's all they ever sold. Isn't that funny? Oh, gosh, Christina, what'd you learn today?

I just want to say, Chris, can I get my cue of my therapy music, please?

Therapy music.

Thank you. We have such amazing guests, such a track record on this show. Each and every person that I listen to that I. If I haven't been in studio, they're just so inspiring. They really are. Like, I'm getting choked up a little bit. Like, to have such an challenging yet attainable goal and to hear that, how these people have reached it, it's just.

It's amazing. She is tearing up.

But no. Shout out to Scott for being a theater major, by the way. But he kind of. He went into the industry, he realized, okay, maybe this isn't for me. He took his knowledge and what he's naturally good at and put that into his business and promoting it in the media and, like, just sticking with what you know and expanding on it is key.

Yep. And so it's so funny. My comments exactly the same. There's certain inherent talents we have, and they don't go out the window. A theater major doesn't mean if you don't go into the theater industry, that's done. I've seen this guy. He leveraged that. He's extremely charismatic. He can engage you in his story of his business, and you sit there and your jaw drops as you listen to him. Scott's an amazing salesperson for his business, I would argue, because of his theater experience. I think everyone has that opportunity. Exploit your past. What about you, Chris? With Scott.

With Scott, I. I like, again, the continued learning. Right. He said he had a peer group and other things, too. I mean, continued learning is. I'm a big fan of that. And it just. It helps in so many way. It helps in ways that you can't even quantify or even talk about on a podcast. I just love it. Oh, great. Odin's raven. It's almost like you almost have to be a little humble to keep learning and take feedback from other people. You know what I mean? Like, it shows a little bit of vulnerability, I think.

Yeah. And that's actually the second lesson I got from Tony Lillios. Right. $140 million company, that is a big.

Small business, yet he doesn't have a big ego about it.

No ego at all. And you can hear in his voice, this guy's Joking around at. At this event I was at, wearing the swimming trunks and stuff. It was so funny. But he even said, he goes, you gotta check your ego at the door. He's like, we just knew it was time to bring someone in from the outside because I didn't want to do it, but my ego wasn't so big that I felt like I had to do it. And the company continues to explode in growth. Anything else that you want to add to that, Christina?

No. Just like we've said before, just stick to your talents, and that's what makes it shine. So it makes you succeed.

I feel safer already.

Yeah. Chris, anything you want to add?

Well, I like the fact that he got the right people doing the right job at the right time. During those hockey stick moments, he. He knew when he needed someone, he went out and got the right person. And boom, dude.

Success is getting the right people and putting them in the right seats. Bo Duke's always driving and Luke Duke is navigating on the side. Right people in the right seats.

So Tony, by the way, Tony's still here. But, Tony, what did you learn from Mike Michalowicz today?

He's a damn funny guy.

Yes.

Oh, Tony.

All right, we're going to talk about our corporate partners now.

Yes.

Thanks again.

So first, I want to thank nextiva. And nextiva is a voiceover IP phone system. Listen, listen, you got to have a phone system, so why not get a good one that's flexible and competes with the best companies out there? I bet you Spec Products has an X TV phone system. You should, too. And the pricing is a good deal. Number two, Fundera. You need funding to grow your company like Scott did, like Tony did. Go to Fundera. I'm not saying they went to Fundera. This is not an endorsement by Tony. But you can get funding out there. And here's the one great thing the old school was way was go to 100 different banks to find funding and see who's take all the no's until someone says yes. Fundera does that for you. They got a guy, he does all he does all day. He's running around the streets going, hey, what bank wants to do a deal? What bank wants to do a deal? He does it for you all day. And then he comes back and says, I got two banks that want to do a deal with you, and here's your money. And then of course, T sheets. T sheets is a time tracking system. If you grow a company. Listen, if you got a company of two employees or you got a company of 2,000 employees. You need to track and control time T sheets the way to do it automatically. And all these products by way, all of them we use ourselves.

Yes.

There you go. That's when you start bringing the music. Yeah, buddy. Chris, where can people find out more about you?

That's called producing a show, my brother.

That's right. That's right.

Fractal.

Sweet mother of God.

What is the hold up? Fractalrecording.com that's my website. I produce podcast shows for business authors and. And also some others who are. I'm not able to speak about in public yet, but. Fractalrecording.com I didn't know you stepped into.

The porn industry, but congratulations, there it is. And so Profit First Professionals. Listen, if you want to grow a profitable business, your accountant or bookkeeper should be the person guiding you to do that. They're looking at numbers all the day. So if your accountant or bookkeeper at the end of the year says, I don't know, here's a report, here's your taxes, well then, then, then they are not directing you on profitability. Find someone that drives profit in your business and I'll tell you the shortcut to do it. Go toProfit First Professionals.com right now. Click on the find button and we'll hook you up with an accountant or bookkeeper that will not just take care of your books and your taxes, but drive profitability in your business. Bam.

That's right. Thanks everybody for listening to the Profit first podcast. We have all our episodes@profitfirstpodcast.com find us in iTunes and Stitcher and tunein radio and subscribe to us. And we love hearing from you too. On the post posts at profit first podcast.com you can comment on the post. You can call Mike Michalowicz funny names and do all that. Go ahead, please.

Yeah, and you can send in your Chewbacca invitations. We got a lot came in. We already had our winner. They asked that we don't disclose their name. Perhaps because they're. They were so good at being Chewbacca. Like, that's right. But yeah, that's it, bro. Let's get out of here.

Great job. See you guys next time.

Bye, guys.

It's like parking your car and surfing.

Neighborhoods in the Bronx. You just don't do it.