Mike's LIVE Stock Picks, Electronic Vehicles, and Creativity&Leadership - Episode 008

So welcome, everyone, to the Sea Sweet Unfiltered with our. Our host here. That's sick.

I'm not sick. I'm good. Just a little extra base.

Comment below if you think Lee is sick.

Just a little extra bass.

A little extra bass. It's definitely the microphone.

Yeah.

Yeah.

So. Right on, man. Well, how. This. This is gonna come out a little probably. This is probably gonna come out after New Year's, but how was your Christmas?

It was good, dude. Really focused on conference, honestly.

Yeah.

So, yeah, we had. I had a family thing on what was a day before Christmas Eve.

Yeah.

Went up to Canada at my. My sister's house. The power. Lose the power. Oh, no, it's great. And it was, like, negative, whatever it was outside. It was great. It was fantastic. Great, great holiday. But I was really focused on conference stuff because we had. I was supposed to have my slideshow in by the 22nd, and I was already late, so I was, like, gunning for it. So I finished them all on the weekend.

Well, you had mentioned to me you're like, I don't have my slides. And I was like, yeah, but the company that told you to get them done, like, you're paying them, so can you just tell them we can.

Yes. And that's what we did. But, yeah, I want to be respectful, because I know it's, like, to be the media team and.

Yeah.

Want to have some plans together.

Cool. Well, exciting development for you is we got. We're. We're literally, like, this close to the goal line on your headquarter building.

Yeah, we said that a year ago. Yeah.

So for those that don't know, the headquarters is your plan, Augusta's plan, to basically bring everything in house. You have a media studio. You'll have the command center, and then you'll have your local original location that you built here in Bellingham, Washington. So you're basically on the goal line, which is what we said a year ago, waiting on one permit around the well. Is that correct?

Yeah. Basically within 100. If you're within 100ft of the property line, you have to get a notarized letter from the neighbor saying that you're allowed to do it. The problem is, it's a warehouse, the old, old warehouse. And the owner, we don't know where he's at. We have no contact information. There's no one on the site. So we're just trying to figure out how we can get this guy to come into an office with me and do a notary, get his. My. Well done. It's pretty stupid.

That's brutal. How many. How many permits total to get this headquarters?

I have no idea.

Off top of your head, dude.

Man, I don't know. There's just so much everything, like everything you can think of, like storm water. Then there's like sprinklers, Then there's. Well, then there's retention pond. Then there's like, there's everything you can possibly think of. It's stupid septic, like sewer. Like it just goes down the list.

Yeah. I specifically remember we were subcontracted. I think this was like my second year working in the field at Augusta. We were subcontracted by a general contractor doing a new build. And they had the. The new build had to have a mitigation plan.

Right.

A runoff mitigation plan. And he was like, yeah, basically just any. I need to check these boxes. And then when you guys are done, I'm going to rip it all out.

Yeah.

And I was like, that this feels wrong to do. But like, I'm not the one lying to the government.

Ours wasn't planting, ours isn't planning ours. Like you actually have to build a retention pond. You have to build like, build stuff. Yeah. And then like there's no fire hydrant out front, so you have to have a massive tank of water. So then you have to have like structural engineers to do the found for this water tank because it's going to weigh like tens of thousands of pounds. So it's just stupid.

Yeah. And then another not so exciting news.

What's not exciting is the fact that when we move in, we're basically at full capacity. Yeah. I am not looking forward to that.

Yeah. Because it's a whole extra year.

Well, it's a whole extra year and now another year. We were expecting to move in right now. Right, right. So I was like, okay, like we'll have like a year, year and a half and then we can like think about a second building in the back because there's five acres, there's plenty of room.

Yeah.

And all that good does. Well, we're going to move in and it's going to be tight. Yeah. So I'm not looking forward to that. Yeah. Well.

And before that, we just found out that our landlord for the command center is not renewing your lease.

That's what stinks. Yeah. So. Yeah. So good. God. I know where you're going. Okay, great. So, yeah, we got one one year lease at what is supposed to be a retail. It's like where Bass retail store used to be. And so we're taking that. It's like 4, 900 square feet. We're gonna pack in like 35, 40 people in there. It'll be great. And so that's gonna be a one year lease. We got a really good deal on it. It's not the most ideal because it has one bathroom, but there are public bathrooms, like several suites.

Like one single use bathroom.

Yeah, dude, I know. But we hit a vote. So we put the vote for command center. It was like to the downsides was the break room's not as nice. It doesn't have a natural light. However, we're gonna have a sitting room out front where there's plenty of natural light, but separated. So break room not as great. No sink in the break room. Only one bathroom. However, here's the positives. Number one, almost half the price compared to other office buildings that we could get for one year. Very hard to get leases for one year.

Yeah.

Secondly, it's right next door to Subway, Woods Coffee, Bob's Burger, and then like a deli at the market and then the pizza stores, like, people really like that. And the bus hub for Blaine, like stops there.

Yeah. And it's right off the freeway, right off the street. You exit and you're in the parking lot in 30 seconds.

So for someone coming from like what's called Bellingham, um, it's almost the same as going to Ferndale because we're five, ten minutes off the freeway. We're now. We're now on the freeway. Right. So those are pros.

Closer for me.

What's that?

Selfish pro?

It's closer for me. Take Lindenberg Bay Road.

It literally from from where the new command center will be from my house, 20 minute drive.

Oh, yeah.

But the current command center, 35 minute drive.

Right. And so I'm assuming the new, new, like the. The headquarter building is going to be 30 minutes.

Yeah, 30, 35.

Got it.

Small, small potatoes. So, yeah, that's. That's wild. Your landlord just basically kicked you guys out, not renewing the lease?

Well, like, we just assumed that he was going to let us renew. Yeah, because like we have half the building. We control like half the building. And so. And then what? Our accountant literally moved into the building just to be next to us?

Yeah.

And sign a full next year so they might actually let them out. We'll see.

But yeah, it was just unexpected. Like. Oh, yeah, like next month we're not gonna renew these. Oh, sick. And so we have conference, all the other stuff. And then we have training. We're right now we're hiring a whole bunch of people.

Yeah.

Starting for end of January. So we have 20 new people coming on board into the office. So we got moved before then. So like we have this like one to two week window after conference. So I knew, like, right as soon as I heard that last week, like, we have to go find a place within the next three days.

Yeah.

So just like all out finding places. It was great.

That's fun.

Yeah.

It's exciting.

Despite the snowstorm and Christmas.

Yeah.

Great.

Making it happen. Very cool. And then hopefully, hopefully building gets signed off and then we're in. This time next year, we're moving in.

Yeah. Dude, that's a. We can't. We have to. We have to.

Yeah.

So I basically told credo, like, hey, I'm gonna push off into the year, but we have to be in our construction company. Yeah.

Credo. Yeah.

Because I'm gonna. We're gonna. Yeah. We're getting in trouble somewhere. Yeah. We don't.

Right on. Well, switching gears.

Yeah.

So next year. 2023. 2023. Nice little rhyme here. So what they're saying is the year of the ev, the electronic vehicle.

You think so? I think that was like 2021.

No, dude, 2023. The year of the EV. Yes. Yes, sir.

Everyone was psyched out about EVs in 2023 or 2021. No.

No. Yahoo News. All right.

Okay.

Who knows why 2023 could be the year of the cheap or cheaper EV.

Okay, I agree with that. Because there's gonna be deflation. Yeah.

So you're gonna get some deflation. But the EV market share has nearly doubled in the US in 2022 compared to 2021. So around 5.3% of all vehicles sold this year compared to 2.9% of all vehicles sold in 2001. So that's really interesting. But they said that the average 59% of consumers say that price is the main drawback to buying an ev.

Which will change.

Which will change. Exactly. So this Yahoo News article that I was reading, and it was really interesting was basically the Chevy Bolt base model. Chevy is trying to come in as the budget in the EV market.

I thought they cut that program.

Nope. So they. It's a big. It's their big rollout in 2023. So the Chevy Bolt, there's two different models. The base model is only going to come out at $25,600. It's gonna have a range of 259 miles per charge, which honestly, pretty good when you look at.

Dude, they had so many problems with that car. Yeah. Here's the thing. No other electric car manufacturer besides Tesla is making a car at a profit. That's electric.

Yeah.

That's the killer. And so what's gonna. This is my. This is the only reason why that theory could fall apart. I agree. That the market share is gonna go up simply because they're making more of them. Yeah. Right. Everyone's like, oh, we're gonna take this model and we're just gonna make it ev. Right. Everyone's doing it. It's the popular thing to do. And Wall street likes it. However, I'm wondering if that falls apart during a recession when they have a vehicle like an F150 they make a really good margin on versus a Lightning vehicle where they're losing money on it.

Yeah.

And the question is, which one do we build? With limited resources and a limited consumer demand, I have a feeling they're gonna go for the one that's profitable. But, you know, eventually, you know, technology catches up. But I feel a lot of these people got guilted into making EVs way too soon and that's why they're losing money on them.

Yeah, Yeah. I think the, the obvious choice too, from an outsider is of course they're going to make the F150, because what their tagline is like, it's the, what, America's number one truck since whenever, or it's the most sold truck in America. So, yeah, I, I definitely could see that, like production would slow down during a recession. But Chevy's really, the article is basically saying there are new players that are going to try to make the cheaper model. Whereas if you looked a couple years ago, and this is more like just like a general statement, they're, they're not really making this fact. Basically, they're like, if you look at the last few years, the EV price tag was $50,000 plus. Like, if you wanted to get a nice EV, you're looking at $50,000 plus. And now like the new market is sub 30.

Right.

That's what Chevy's trying to go for.

Yeah. Because like Tesla was. The Model 3 came out, it was like 39. Right. Plus tax incentives were on 35. Yeah. But with inflation and like the cost of all their materials going through now, now it's 50 plus.

Yeah.

But now you look at the demand for Teslas has shrunk massively as we've gone into this recession. And so you can get a Tesla within a couple of weeks now. It used to be months and months if not years. And so that's going to shrink too. Like their price will come back down to 40, 41, 42. Somewhere in there, I think for the Model 3, but supposedly Elon hinted at there's another model coming out that's cheaper. That would really push that theory.

Interesting.

Have you ever been sighted Tesla?

I have, yes. Paul Bolinoff.

Really?

Yes.

I was in his. I've been another ones too though.

Local celebrity.

Yeah.

Yeah. I don't think their interior is that great.

Yeah, it was all right.

The ride quality and like the, the road sound not great.

Yeah, I did. I mean, I love the complete lack of leg. Like you just step on the pedal and it goes. That's so cool.

Yeah. But when you like compare it against other luxury, luxury vehicles in terms of its price, it's like, do you want a Lexus is like leather and like super nice finishes and like detailed, or do you want like you get inside of a Tesla and if you didn't know, you literally feel like you're in the Walmart of interiors.

Yeah.

It's trash.

Yeah.

So people aren't going to pay a hundred thousand dollars for a vehicle and feel like they're sitting on cardboard.

Yeah. It's fair. So, I mean, I have a buddy that has like a BMW M3.

Yeah.

Around the same price tag as a Tesla and it's. I would choose that every day.

Yeah, no, totally.

It was really nice.

Yeah, really nice. It'll catch up. It'll catch up.

Yeah.

Eventually we'll like, in 20, 30 years of like, what was gas, Those internal combustion engines, what are they doing?

Yeah. But I don't know. I'm not. So I. I have decided.

I have.

I have an O2 Dodge Ram. It's 20 years old.

Right.

And I'm never going to sell it.

Right.

I want to be like that guy. Like, if I'm like 60 pulled out of the garage, everyone's driving EVs and I'm just like 10 miles of the gallon, baby.

But we also realized in 2022 though, is that renewable resources are great until you run out of them.

Right.

And so I feel like people suddenly realize, like, oh, there's actually a cap to things like battery storage and trying to get these renewable resources of wind and sun to actually be stored a long enough period of time to keep us over the winter.

Yeah.

And so what we saw in Europe, and then the dependence on fuel, there's two ways you can look at one, the dependence on Russia for oil and even uae, it's going to Push us towards electric or two. It is, it's proven that we are not ready for electric because literally the governor of California is telling you not to plug in your car.

Right.

So I think it's still a ways off in terms of like full. Like we can't, the grid can't take it. If you take the percentage of vehicles in the world and then you look at the number of EVs and then you try to scale the amount of the amount of infrastructure required just to support the charging networks, we can't support it. And it would take decades to build the infrastructure. I think about every single gas station having to be a charging network for electric and the fact that every single gas station you can fuel up in what, four minutes, five minutes? Well, now it's going to be 40 minutes. So you theoretically need like 10x the number of charging stations. So that gets very, very expensive. And the infrastructure is just not there.

Yeah.

And so that's why. Let's tie this full circle. This is sort of my, my theory when it comes to Augusta is like building, building the infrastructure that every service based business has to run on. This is coming out after conference, right?

Yeah.

So like that's the goal, like building the infrastructure for every service based business to run on because no one else will be able to build the whole infrastructure. Same way that Tesla is going to open up their charging networks to all electric vehicles and everyone's like, why would you do that? It's like allowing competition. It's like, no, no, no. Every single time they're pulling up to a Tesla charging station. Yeah, right. And so that's my theory with Augusta. So we can do the same thing.

Gotcha. Interesting you, you had mentioned. I'm going to go back to the article a little bit. I do like that you. Sorry, no, I love that you took a full circle. We could put a bow on it right there and leave it. You had mentioned earlier though that there are those incentives for getting EVs.

So 7501.

So it's. So this, so this is directly from the article from Yahoo News. Consumers can get a cheaper EV thanks to some tweaks by lawmakers in the U.S. while the Inflation Reduction Act Consumers Tax Credit for EVS is currently in effect for cars assembled in North America, some coming changes will benefit two big automakers, Tesla and gm. Tesla and GM are currently phased out of the tax credit based on older rules. But starting January 1, 2023, these two automakers will be allowed to participate again in the program. With buyers getting $7500 off qualified EVs.

So check this out. So I feel like this is an opportunity to buy Tesla stock, and I have for the past two weeks.

Yeah, I do.

Are you getting into this?

I got, I got notes.

Okay. So. So yeah, what happens, Everyone was like, hey, if the January 1st can come up, I can save 70$500. Yep. Which is a flawed concept, by the way, in terms of how your tax credit credit work. However, everyone's waiting for that. So that was that Tesla recently, it's like, oh, sick. They aren't getting any orders. I can guarantee you, like, the fourth quarter is going to come and, like, the stock is going to continue to crash because the quarter report's going to come in for horrible delivery numbers and order numbers based upon the fact that everyone's like, oh, just wait. And that's why they did the 7,500 discount. They're like, oh, snap, we're not making any purchase. No one's buying anything because they're waiting for this tax credit. So they just like, we'll just take the 7500 kit now.

Yeah.

And so in my opinion, great buying opportunity. Just saying. Because the same way, like, when you pull forward demand, if you put a discount off, you push demand off. Yeah. So in my opinion, you're riding the wave of this emotion in the stock market.

Not financial advice.

Not financial advice. I want to get my 7A. Just so I can say I'm a financial advisor. Yeah.

Now, here you go. Cnbc. This is the title of the article I was going to bring up. Tesla stock is headed for its worst month, quarter and year on record.

Yeah, dude, let's pull it up. Yeah, See if we can't buy some more.

So this Livestock picks.

Yeah, dude, it's down 11 today.

Yeah, down. This article is from today. It was updated an hour ago. So Tesla shares dropped 11 in the market on Tuesday, which is December 27th. That's today. We're recording. Investors are bailing on the stock as challenges mount for Tesla broaden at home. Elon Musk continues to spend an outsized amount of time on Twitter. Multiple outlets reported fresh challenges for Tesla's production in mainland China as the automaker struggles to attract buyers in China and north.

Dude, down 13 and after.

So here's. Here's a little fun.

But dude, the price to earnings ratio is 38 on a company that's literally doubling on an annual basis.

So here's. Here's a little. Here's a little Snapchat.

I'm buying more right here.

How, how much?

You want me to tell you how much I bought? 8,000.

Let's go.

I haven't, I haven't done it for like, I started buying it two weeks ago just like trickling in. My basis isn't great because it's been going down ever since I bought it.

So we got. Yeah. So Tesla, basically, December 2022, where we are right now, it's going to be the end of their worst month ever. The end of their worst quarter ever.

Love it.

And the end of their worst year ever since being a publicly traded company.

Fantastic.

They're down 44%.

Yep.

In this year. So they went the.

They were too high.

Yeah.

I sold everything because it was just so bad.

Yeah. So stock, Stock. Stock price at the beginning of this year, it's high was 194 and then it's low. Is 1. Well, as of right now, 106.

Yeah. The price to earnings ratio is 38. The average S&P somewhere around 15 to 16 right now. But the average growth rate of a company in the s and P500 is like 5 to 6% a year, whereas they are like between 50 and 80% annualized.

Yep.

So.

I just believe that they're going to be the only EV manufacturer that will get through a recession and still be creating profitable EV cars. And if that happens. So as adoption of EV cars go up, this is the bull case. Right. Because obviously I'm a fan. So, like, if EV adoption goes up, infrastructure is getting better at the same time that none of the manufacturers can produce them effectively and efficiently and profitably at the same time that they're going to be struggling financially. They will flip back. They will go back to the other cars.

Yeah.

Because they will. This can't. They can't afford to do what they did before and let's go bankrupt.

Yeah.

And so I just believe that if, if I think the recession is gonna be horrible for Tesla, the demand's gonna crash, the stock will crash. But if we re emerge from that with better infrastructure, better adoption, better technology, and they're the only ones that can create a car that's effective and efficient and profitable. Let's go.

Yeah.

Rivian has some good cars, but they can't make them profitably. So do they make it through a recession? I don't know. Because you need money, you need, you need capital. And if capital is costing you five times more than it did a year ago and you don't have any consumer demand and you, like, everything is more expensive. Like, I just don't See them, you know, survive.

Yeah, I just, I was pulling up Rivian stock. Might as well.

Rivian's way down, dude. Yeah, that's just today. Check out the one year, 82% down.

Holy buckets. Yeah, 82% down. Yeah, over the last year.

Geez, it was, it was hyped up way too much. Yeah, but see, 16 billion market cap for what they're producing right now. Not bad. When it was a hundred billion, it's like, seriously, guys, come on. You know, so I'm not buying Rivian stock, by the way, because I don't, I just don't. I like the product, but the financials still don't make any sense. Like if it went down to 3 billion, I'd be like, okay, I'll take a risk on it, but it's still too expensive. Yeah, it doesn't produce any profit. You can't actually look at a PE ratio. There's zero, there's negative. It's losing money. There's nothing any losing money. Any company is losing money in 2020. I would love to have a stat on this. Any company that's losing money in 2022, what the average stock loss was, I bet like 80%. Yeah, like an average, maybe 65 or 70. Be conservative because even money companies were losing 50%, but dude, they got slaughtered and they're going to get wiped out, dude. Not Rivian necessarily, because they have a lot of capital, they have plenty of cash. But yeah, dude, it's interesting.

Yeah, I was going to look at Tesla's five year. So when did they go public?

I think it was like 2015.

Well, I guess it'd be right here.

16, 17.

Beginning of the chart. 18 18. Right at the beginning of the beginning of 18. Yeah, dude, that's an insane five year chart. Yeah, like finally started to climb.

So, yeah, okay, we're looking at stock curtains. Yeah, it got way too high in my opinion. And when you start, when I started seeing numbers like it was a million dollars net of market cap for every one car produced, I'm like, I'm out. Yeah, and things like that. But then now it's like, okay, two years ago, were they a stronger company financially than they are today? No, they've doubled their production. They have more gigafactories open, they have the semi truck just got released. They got the Tesla, the cybertruck, probably coming out next nine months. Is it a better company today than was two years ago? Yes. So is this. The stock is what, a third? It's almost 25% of what it was a year and a half, two years ago. And is the company better day? Yes. Financially is. It has a PE ratio of 38 when just two years ago it was like 600.

Yeah.

So I think it's a buy, bro. I'm just saying. Not financial advice.

No, not financial advice. I've been watching it too. I actually have. Never fun. I've never owned any Tesla stock.

So this is the thing.

Too much of a roller coaster.

Yeah, it is, it is.

But now I like where it's at and I've been watching it long enough like that I, I think I'm going into.

Yeah, but I'm very cautious because I think demand is going to completely collapse. I think it's going to, it's still going to keep going down. Yeah, guarantee it. Because you go into recession, people are not buying 50, $60,000 cars. You're betting also on full size driving being the thing of the future. And again, if they can remain profitable and investing in fsd, when every other company is going to cut their FSD program during a recession, they will emerge like massive market share.

Yeah.

So I'm excited.

Yeah. Telematics. It's interesting.

Yeah.

So, yeah, I don't know, I just. Yeah, the EV. That's what people are saying though. 2023 is the year we see an emergence of EB and then the article kind of wraps up with saying by the end of 2025 probably 10 to 15% of all cars sold to be EV.

Yeah.

So within three years to two and.

A half, you know, I'd be interested in, dude, making a company that has all the technology of an EV or sorry, of a Tesla without it being an ev. Like why not have full self driving and like where they can do software updates to the vehicle. Like the coolest thing about being a Tesla owner is like you get an update to your vehicle and randomly something cool happens. Like randomly. It can do something randomly because it's like a program.

Right.

It's a big piece of software. And so in my opinion the best businesses are software driven because there's no, there's no unit cost of production. Like, like, can you imagine? Just like, oh yeah, you want four wheel drive in your vehicle. Great. We're going to download it. Right. And that's possible. Like if you have certain things in the vehicle ready and the cameras and the sensors already. So like they, for example, they made a mistake on. They put the steer the. What's it called? The buttons. Yeah, button by the horn. They put the horn as a button.

Yeah.

And people like this is not safe because you instinctively in an emergency go to the middle. Okay, great. Next update. They put it in the middle. They put a sensor in the middle and they just made the middle. Now where you have a horn. That is crazy. Yeah. Why not just flip it? Make it easier to build by having a ICE combustion vehicle. Right. And just have all that technology. Yeah, I think that'd be interesting.

Yeah.

I don't know.

I like that.

I like the whole Europe thing with their energy crisis and what we saw even in. In California needs some people seriously put the brakes on this whole idea that we're like in the next couple of years we're going to electric. It's not possible. You cannot. The infrastructure cannot handle it. Our energy grid cannot and the fueling stations can.

But it's a buy just to wrap it all up.

It's a buy. I just wanna. I'm most interested in the technology though of like full self driving. If they can hit that and they, they can beat that. Be what some have said they're five years ahead on if. If that's true, they will kill everyone else on ev.

Yeah.

Because. Yeah, but. But what I've seen so far, it's not. I don't think it's five years ahead. Yeah, I think it's on. I think it's like a couple but it's not five. So it's interesting. It's still very much of a gamble but now at 38pe again we can take it.

Yeah. Yeah. Because full self driving. In order to build full self driving, what do you need to essentially put into the software in order to create full self driving data? And that's really what like I've heard Elon say in certain interviews. He's like, well we're also a data collection company. Oh dude.

Yeah, there's.

And a lot of people think like oh it's just a car company. No, it's. It's data collection. They're mapping every road. They're. They're measuring distances with those sensors and in the mirrors and the windshield and the bumpers. Like they're measuring everything and downloading data.

And on fsd you tap a button and you have. Then the. The Revision team can actually look at what happened. Okay. Why did we miss that pylon? And they can. They're going right to code. Okay. Yeah. So we gotta look for this on the road. Like just when you have a millions of cars that are doing that every single day, you have a massive head start against someone like Rivian. That's producing a couple thousand a month. Like, you just have such a massive starting advantage.

Yeah. So even Apple maps, too. I don't know if you've used it recently. If you get in, like, anytime I go through, like, Seattle, like a major city, the map becomes automatically 3D.

That's cool.

That's super cool. I really like that. It threw me off. I was like, am I in the. Am I in the right place? But it actually was tracking me, me as I was going, like, under, like, like an underpass.

Right.

It looks so weird, so, I don't know, kind of cool.

Under an overpass.

Under and overpass. It is what it is.

But that technology is going to kind of come down eventually to mowers, and that's kind of why I'm interested.

Yeah, I think it'll be good. It'll be exciting. Do you think, like, what's the timeline you think for autonomous mowers?

We're ten years behind the. The automotive space. Like, if they can't figure out Tesla, we're not going to figure it out with them. All right, so again, I'm going to talk about the conference, but, like, we're good. 10, 15 years away from it really being economically feasible. The same way that the Model 3 is economically feasible and also makes sense financially.

Yeah. Changing gears completely from ev. I know we could talk about that for a long time and you're much more well versed than I am, but I love hearing your thoughts on it. To build something like Tesla, to build something like ev, you need to have creativity, brother. And so I recently listened to a podcast, podcast, and I sent it to you. I know you listen to portions of it by Simon Sinek. It's his podcast called A Bit of Optimism and Simon Sinek for.

Wait, that was his podcast?

That's his podcast.

Oh, I thought he was going on someone else's.

No, it's his podcast, but he had two guests on it. Got it and it was more of a free form.

Right.

Hey, come on my podcast and we're just going to talk. There was no structure, which I thought was really cool. But anyway, Simon Sinek, for some of you who don't know, he wrote his kind of Big Moment. Coming to Popularity was a start with why. So he did the TED Talk about finding your why in your business to build a better culture. He also has a couple other books like Infinite Game Leaders Eat Last. So, big fan of his. But I sent you a podcast and it was him and Brene Brown and Adam Grant both have, like, psychology degrees. Both. They all kind of study, I guess, if you will, like humans and like human desire. And they all help businesses. They all work as business consultants. They've all worked with, like, the SEAL team, Spec ops. So they all, like, they know what they're talking about. But one of the things that they were talking about is like, where do ideas come from? And how do you become creative? Be like, are people, you know, naturally creative? Or do they have to be in a creative space to be creative? And one of the things that Adam Grant said on the podcast is really interesting. You probably didn't get to this part yet, but he. He did an interview with Lin Manuel Miranda. Do you know who that is? So he's the guy who wrote Hamilton and, like, in the Heights. He's a big, big musician and composer and just like, phenomenal what he does. And he said, I would have never written Hamilton if I didn't have a daiquiri on a beach. Because he, like, let himself get in a creative space.

That sounds like a good excuse to.

I agree, I agree.

A private jet to be creative.

Yeah.

But it's like giving yourself a space because you can't just say, okay, now I'm going to turn on creativity, right? It's like, it's not like you and I get in here at a podcast, okay, now I turn on my creative part of my brain. So that way I'm like, funnier, right? So I was just thinking, like, do you think entrepreneurs are creatives like you as an entrepreneur? Do you think you're naturally creative? Or do you think that, like, an entrepreneur is just a type of person and an entrepreneur could be creative and, like, build their own thing? Or an entrepreneur could be someone who just follows other someone else's systems, right? Like, say, a franchise model or a business that just works and they tweak it a little bit and they make it their own. Do you think that entrepreneurs are geared towards creativity more than the average person or.

No.

Thing is, like, you might not be creative with your business model, but you have to be creative with a lot of other things as a business owner, right? So whether it be like, handling situation with customers or handling situations with employees, you got to have creative ways of, like, dealing with situations. And, like, you can't just use, like, this is the cookie cutter way to do it.

But I think, unfortunately, we all have thought that in order to be an entrepreneur, you need to have creativity around the model. And I believe that's flawed because that's what most people make their mistake on. Whereas, like, the Vast majority of people can, if they're an entrepreneur, if they have entrepreneurial tendencies, they can figure out the creativity needed to navigate a tough conversation with an employee or fire somebody or hire someone, have some EQ behind that, team meetings and things like that. So I think the success rate is better when people have creativity and they channel it towards internal things inside the business. Making a better marketing campaign, making your website better, really getting analytical about that sort of thing. But creativity is overrated, dude. Yeah, massively overrated. Like, so I listened to the first part of that podcast, right? It hurts my head. I've been around too many consultant people like them, and I guess I haven't.

Got to part two.

So I gotta listen to part two now, I guess. But, like, I don't like when there's no real world application. It's like, okay, like, give me some examples and how can I use this? My everyday life? But, you know, creativity is whatever. Like, I just don't think about. Dude. Yeah, I do not think about that stuff at all.

Yeah, I don't know. I think I'm like. I think I'm an extremely like, type A person. But there's a weird part of, like, my brain that gets tickled, if you will, like, listening to people like that.

Right?

And I don't know why, because I'm so, like, if I took, you know, personality assessment test, a disc test. I heard you and a Corey Ballard talk about that. And I instantly went and took one because I'd never done one before. And it was like, clearly, like. Like, I'm the dominant. I'm the, like, fall, A, B, C, D type. Like, follow the lines. They're there for a reason. So, but, like, for some reason, like, creatives. I'm always intrigued by creatives and I really like it. Like, even Linway Miranda, I am not musically inclined at all. But I, like, love his most recent production he did with Disney, which is in the Heights. And it's like the storytelling of. Gosh, I'm blanking on where it is, but it's in the New York. It's the Heights, but I can't remember. Washington Heights. Thank you, Sarah.

A producer back in the house.

Washington Heights.

What do we do? Because I wasn't coming up with that.

Oh, I know. I know you were. And it's an all, like, Latino community in New York. And it's like this phenomenal, like, story. I'm not musically inclined. I'm not Latino, like, but the story just, like, resonated with me because I think there's A part of me that just, like, loves creativity. So I don't know if maybe I'm so right brain or so type A. I agree that I, like, enjoy, like, seeing people create. I don't know.

But here's the thing. Creativity is subjective.

Agreed.

And numbers and data is not. It just tells the facts the way they are. And I think what's happening right now is like, for so long, we've been putting creativity on a pedestal because that's been what that has. That is what has been rewarded at companies where, like, the people who are the most creative got the biggest paychecks because they came up with ideas. And now it's like, oh, we're going to fire all of them. Why? Because we actually need the numbers.

Right.

Because now we're in a recession and guess who, Guess who gets cut. They could be with the big ideas and the creativity. It's like, who actually drives the business forward and moves the numbers. That's job security. So creativity is great. Okay, here we go. Creativity is subjective, but it is not job security. I had a better rhyme there coming up. But anyways. But job security is going to be in the person that can move the numbers of the business. And unfortunately for most entrepreneurs, they're more creative, they are analytical, and when it comes to the numbers of their business. And they're so good, like marketing campaigns. Like, we're going to do this and we're going to do, like, this new thing on my website and I'm going to do this new business and this new service, and it's like, it doesn't matter. It's just a spreadsheet.

Yeah. Like, I want to. I'm going to push back on you because. Because I feel like you're more creative than you give yourself.

Oh, I'm very.

I understand that you, you're, you're giving yourself. Like you said, I don't think about this stuff. Maybe you don't make the space to think about, like, your creative time.

Right.

Like, you don't put it in your schedule, but you are extremely creative. Because in that discussion Simon and Brene and Adam have is, they talk about. It's a, it's a cheesy analogy, but I really like.

Oh, brother. Simon Sinek is the king of cheesy. Yes.

And I love every second. I just, I eat it up. They talk about making pancakes. And when you make pancakes, I know you don't eat pancakes. Very healthy guy. We make pancakes. The first one never comes out good.

Right.

Because you're still, like, mixing the batter and you're getting the temperature right on this, on the pan. Right. So it doesn't come out good. And you don't serve the first pancake. You serve like the third or the fourth pancake. Like if you're making pancakes for guests.

Yeah. Until you need food and you can't afford to throw the first three away.

Exactly. But, but I think like for you, you that anal, you throw out like the first pancake.

Yeah.

To use that analogy, you're just like, hey, I have this idea. What do you guys think? And another one that Simon said because he's, he's spoken to business leaders, he's spoken to entrepreneurs, he's spoken to elite SEAL teams and all these different people. And he said he hates that when in a business setting someone presents an idea, they finish and they go, isn't this a great idea? And then he says, you take like the military side or like SEAL teams and closed door meetings and they say, here's my action plan. And he said, One of the SEALs I interviewed said, I always finished up presenting my plans with spears. So throw your spears now because otherwise this plan we're just going to roll with and then we'll get thrown spears at when we're in the field. And I feel like you follow that second school of thought, like you throw out the first pancake or you say like, hey, leadership team, here's an idea, throw your spears at it. And like we go very unfiltered on your idea. So. But I think only creative people can do that.

Yeah.

I think if you aren't creative, you, you almost need a perfected product before you can roll it out to people you trust. And I feel like you are creative because you're like, here's an idea, I'm going to just give it to you guys, sit with it, let me know what you think. And you just let us pick it apart to make something better.

Yeah, I don't know if that'd be creativity though. Is that more a form of leadership? Like, I feel like to get real, buy in. That's going to work better.

Yeah, I mean it's like, it's a little bit of both.

Like with P4P, like, hey guys, throw your spears in it. And like in the back of my head, like, I don't care what they throw at this, we're gonna push this through. But I them to think that they came up with this idea.

But I guess, yeah, it's hard to like use a lot of examples that wouldn't like, we wouldn't be Talking about specific people, I just feel like, I feel like you're more creative than you give yourself credit.

I used to paint a lot.

Dude, did you paint this?

No, dude, this would not take a lot of skill. Creativity is very low. No, I used to paint a lot. I used to do pottery. I, My mom always bugs me about like trying to tap back into that more. Yeah. But I really feel like I do that like on a daily basis, like just trying to figure out like the rhythm of, you know, business and like politics now, like between trying to bring teams together that weren't working together before, just trying to like figure little things out like that. I think that's. It does take a level of creativity.

Yeah.

Yeah.

So it was funny when you were talking about like, you could throw your spears, but I'm already deciding on this. I had a, I had a moment like that for you, going all the way back to the first thing we talked about, which is the, the command center moving and you like gave, you let them vote.

Okay. So. No, I, I did, I did. I was indifferent on that.

No, I know. I, I, I knew that you were.

Yeah.

Without talking to you, I was like, no, he's letting them vote. But when I saw it, I was like, why are you like, I didn't vote. I didn't vote. So if anyone commands ever listen to this, you know, throw your spears at me. I just didn't know why you brought to a vote.

Yeah. So.

You know.

Yeah, yeah, so I can edit. I didn't really know. It's fine. So I didn't, I didn't know. Okay. So we should lay some groundwork. So there's two different options. The one that we went with was obviously the one we talked about already. There was another option in a like 30 minute drive away from there, different spot. And there's pros and cons of both.

To where you were going to ask your 20, some staff members to move.

Correct.

In the next couple weeks.

We had to move.

Yeah.

Right. So I was like, hey, here's the two options. Right.

So.

I, from a financial standpoint, did want Birch Bay Square.

Yeah, so did I.

However, I realized that the extra three or four thousand dollars we're going to spend a month by being in the other location, if I'm going to lose half my team or like even from a morale standpoint, just everyone gets crushed, like 90% of people, it's going to lead to bad karma going forward. Secondly, there was some cons at the new location that were going to be pretty, like just like, it's dumb to have one bathroom. It's gonna be annoying. They're gonna have to walk down a few units over occasionally. If they need to go to the bathroom, there's gonna be waiting. Like, it's not gonna be fun.

Right.

So it's like, I was at the point where I was like, look, I. I would rather take the more expensive one if it means retention of the team and the morale is higher, even if that means paying double.

And so that's when I was like. I was completely like, whatever. Whichever way.

Yeah.

Obviously where I. If I. If I would have voted, I probably would have gone Birch Bay, because I don't care about things like the bathroom and the break room. It doesn't affect me, but affects them a lot.

Yeah.

So that one. Not, like, that way. I was definitely like, if 80% would have been like, we want to go to Bellingham. Nicer spot. It costs more, but who cares? I would. I would have gone along with it.

Yeah.

And I had both leases ready to go, so sign as soon as the next day, I was like, all right, great. Let's go. And so this is the thing. In part, yes, it is. The fact that when everyone is hating it, it's like, you guys voted.

You voted for it.

That is somewhat. But let's just say that I would have made the decision based upon the pros and the cons, without their input, the likelihood of them switching. Because there's always pros and cons of every decision you make.

Yeah.

Especially when it comes to a team. But if you force them into it, they're going to focus on the negative if they feel part of the decision and they're informed of the decision. And then regardless if they actually. If I would have told them, like, giving them an option for a poll, it's like, hey, here's the two options. This is why we're going to take the second one. That would. Had some better, like, retention and, like, better buy in. But by allowing the poll, it's like, hey, you guys decided this? And so I would have gone with Bellingham, though. I was very much, like, 50. 50 in terms of, like, if the team wants it, I will do it, because it's not worth three to four grand a month. Yeah.

The illusion of control.

But. But like, that one specifically, I told Liz, I said, if everyone wants Bellingham, we're. It's. We don't want to lose our team over it. From a morale standpoint, it is going to be a pain in the butt. It's gonna be A pain in the butt to have 40 plus people in an office and one bathroom.

Yeah.

But they all really like the fact that they within walking distance, you have all these food options, whereas right now they have to drive five minutes to go get food. Right. So a lot of them like that. There's a bus stop. Like there's, there's pros.

I completely agree. So I just figured I'd ask. I don't know. I respected that you gave your people a vote.

Well, it's like franchise advisory council.

Yeah.

Like if they really vote something, I will push it through. Right. So like I did not think we need to change anything with solo operator model. This is coming out of conference now. I do not think we need to change anything after about the solo operator model. But they did. And so I said, hey, here's the three options. One is basically like completely annihilate it. Number two is slight changes. Three is.

Leave it as is. I personally was a three. I thought it was fine.

But enough of them wanted it to be changed where they, hey, we're number two.

Yeah.

So there's just like, you can't get wrapped up. Like there's certain things that I will pursue. Like if I really would have been like, this is must happen for the, like the future of. I guess I just push it through.

Yeah, totally.

Like I didn't consult anyone about, you know, the acquisition of copilot.

I get it though, because I remember. Well, I say I get it. I don't. I don't run the same size companies you do. I don't run a single company.

No, but you do because like you make calls on stuff without consulting even me. Yeah, right. Or even like the franchisees, like, like their territories and things like that. You don't ask like, hey, which one is here? You just do it. Yeah, right. And you don't need to consult with me. And the same way that you know someone underneath you, like, you don't need to always consult. But there's the balance. Right. Like if you're going to change everything on the franchisees or if you're going to like we just had an issue with two friends close by each other. It's like, okay, we have to bring everyone. We have to really get all on the same page versus Times. This is what's happening.

Yeah.

And so there's just a fine balance, you know, And I make mistakes all the time on this because there's so many decisions to be made and got to determine which ones are political and then which ones are. I need to make a dictatorship kind of call.

Well, we do. We do our. What do we. What do we call them? Our leadership meetings off sites for the whole team. But when you. You get the leadership team together, typically every other month.

Right.

We usually meet five, six times a year at a nice dinner with just your kind of intimate leadership team. And I remember at one of the earlier ones, I was. I just kind of half throw out the question to you. I was like, like, what is this going to look like in like, five, ten years? Like, what are these meetings going to look like? And you're like, about the same. And you're like, because when we're moving as fast as we want to move, like, we have to make decisions quickly. And so it's like, yeah, you have to walk that line of what decisions do I dictatorially just say, this is happening, either stay on board or jump ship? Or what decision should I bring my leadership team and bring to debate for them? Because they all have different eyes in the. Within the company. They all see different things, and then what do I bring to the floor for everyone to see? So that's. That's a tough line to watch.

And there's some things that you should not get involved in. Right. And that, that's like, I had to apologize the leadership team, like a month ago because, like, I stepped into something I shouldn't have when I was like, it really didn't need my input. Yeah. And so knowing when it's like, dictator and like, none of my business and then somewhere in between, which is, like, political.

Yeah.

Right. So, like, it just. You got to realize you're making a bunch of mistakes when you're making, you know, let's say there's 10 of those type of decisions a day.

Yeah.

You've got to decide where to throw those in the bucket. And if you take too long, think, which one should I do that you can't. So for me, it's like, do I want to die on this hill? If I do, we're going for that. But if it's like, something's like, look, I need the buying of a team or the franchisees, it's like, okay, let's put this up for vote here. Let's do all the way. The way the pros and the cons. And then, you know, I'll roll with the team.

So do you prefer someone to, like, quietly observe feedback and then provide feedback to you, or do you prefer that they just jump right in front and just.

It depends. It's so depending. Because some people annoy me if they, if they give their feedback.

Yeah.

And a lot of times because they haven't built up the goodwill to be able to jump up and say, no, that doesn't work. Like if you or Liz are like, we're. I'm like spitballing and like, no, that won't work. I'm like, okay, great, tell me why. If someone else like had been around for six months and like not really proving themselves or like they said stupid stuff before and about the team and I didn't have like full confidence that they were bought in, I'd just be like, shut up. Yeah. Like, get out of my life.

Yeah.

And so I just think it's like there's no right or wrong answer. I think I'd say majority time. I'd rather someone think about it.

Yeah.

Because I told this is the franchise advisor Council. I said, when I say stuff, I usually have a high conviction. And unfortunately what that creates is people think that I'm trying to push something through or like this is going to happen. It's like, no, just because I'm that way, like you can push back. And so sometimes I have to make it clear to the leadership team or like a financial advisory. Just because I have high conviction does not mean it's the right thing to do. So you're gonna have to come back at me. It's like a blunt. Like, like tell me what that you think you're wrong. And if I. If it's a good argument, I'll have a counter. So. But yeah, just this balance.

Yeah. I think that's where I default to the latter. Like I, I think, I don't know. Correct me if I'm wrong, but whenever you roll something out, I usually observe. I just let to. I like to see what other people have to say. And if I have an extremely strong conviction opposed, then I hop in. But I usually just. I observe. I kind of just let it happen. Unless my gut reaction is no way.

Yeah. I bet your. Your opinion on our last or two manager meetings ago about the GMs for the local shop.

Yeah. Yeah.

But then I was wrong. Oh, man. What was it? There was another thing that we did and we talked about it and I was wrong about. I forget. It doesn't matter. Yeah.

I mean, we disagree all the time.

Yeah.

I think that's a cool thing.

I, I would say you jump in more often. Really? Yeah. You would jump in more often? I could break down each of the team, kind of know where they're at. Like, I can read you pretty well, during like a spitballing meeting and if you're all in or not, typically it's like you're very quiet. You do this a lot and then at the end you're like two things. All right. Okay. So he disagrees with something.

Yeah.

Yeah. And so.

You know, and whereas like someone like Liz, she'll wait days sometimes.

Oh, yeah.

Which I try to push her to like say something more in the moment because it saves me time.

Yeah.

So there's just balance and there's other people who have a loud mouth and just like, dude, just why don't you think about what you're about to say before you talk about it?

Yeah.

Right.

So that's why I never want to be.

Yeah, but like you, you have the money in the bank, right? Like you have the, the, the relationship, capital relationship. And you know, I know your intentions are for the company and for the team. If someone says stuff negative about the team, they lose all social capital. With me, like, everything is out the window.

Yeah.

So if someone like has drama in the office, I don't care what they think.

Yeah.

I literally don't care. So. Yeah. If a what in my opinion, if someone's watching there, I can employ. You need to be a little bit more deliberate and thinking about what you're, what you're going to say and have a plan in place. If you're more of a mid level manager, that's when potentially the only way to get through to someone is like hit them right away. Right. But most the time if you're trying to jump up chains of command and give your opinion something, you need to have something planned out and don't come to. Dude, I hate this. When people come to us problems and no solutions.

Yeah.

Oh, dude, all, all credibility sinks to the floor.

Yeah. The worst.

Like why do you talking to me? I hear problems all day long. Why would you not bring a solution with your problem? Because now you're just complaining.

Yeah. Anyways, bring a solution and don't hand you a piece of paper.

You don't like handouts Or a long email.

Yeah, a long email. If you're gonna, if you're gonna summarize this. If you're gonna bring Mike a problem, number one, bring him the solution. Your proposed solution number two, don't put it on physical paper. Don't make it a long email.

Yeah. Like today I had to ask him, so what's the question? After a very long deliberation, I'm like, so what's the question?