The Secret To Avoiding Costly Mistakes with Spencer Gideon

That's a universal stupid tax mitigator. Finding somebody who's paid the stupid tax so that you can bring them in and then they can point out how to evade that stupid tax.

If only there was a podcast that asked this in every interview so that you can learn that here, right?

Only there is a podcast that pointed people to the light.

Welcome back to another episode of Multifamily Strategy. I am Christian, joined today by Gideon Spencer. Gideon is amazing. He's had me on his podcast. He does have the best mustache in the industry. That is a fact. If you're listening to this on audio, you need to find the video on YouTube. I'm not kidding. This guy is a gorgeous, gorgeous man. Gideon, now that I made you feel uncomfortable, welcome to the channel.

Well, I'm soaking in it. I love it. Thank you so much for having me.

So, Gideon, you have— I had a chance to do this the other way around where I was on your pod talking about my business. And then I learned through that course of that, it's like you're working on this big hospitality project. You're in real estate. You know all of the people I know. And I'm like, how have I not run into this guy earlier. Share with us a little bit about what your business looks like today, who Gideon is, and give us a brief intro. We'll get into it later, but give us a brief intro on the project you're working on.

Yeah. Yeah. So brief background and intro. My background is actually in tech, so software development, moving quickly. And so I've taken a lot of those skills and methodologies and applied them to real estate over the last few years. So what that looked like was diving into real estate where I first bought a fourplex, converted all of the units into short-term rentals with a plan A, B, and C of short-term rental, then midterm, then long-term rental. Fell in love with the model and wanted to scale up the business and portfolio. So then decided to scale up into boutique hotels. And we recently closed about 6 weeks ago on a hotel, a 24-unit, and we also bought a duplex adjacent to it at the same time within the same deal and are in the process of stabilizing that right now. So it's in Central California wine country in Solvang, California. Beautiful property. It's absolutely ripping right now. And yeah, excited to dive into the details of it.

I am so excited because I talk a lot on this channel and on my YouTube channel. I talk a lot about why I don't enjoy hospitality. It is not how I do business. And everyone I know who gets into boutique hotels absolutely loves it. So I'm excited to hear from someone on this channel, someone who's actually enjoying the adventure that I hated going on. This is going to be a fun episode. Before you got into tech and before you started making it in real estate, you got this really cool project that sounds like it's off to a phenomenal start. Before you got there, uh, what was your starting point? Like, what was ground zero for, for Gideon?

So ground zero for real estate or just overall career?

Overall career. Like, what was, what was your starting point? I have a lot of people who, you know, come from another country. Some people started with money, some people didn't. What was, what was the starting point for you before you launched your tech career?

My starting point was I was a wandering soul. So I was, I was interested in a lot of things, but didn't know what I wanted to do. My mom told me that I should be an engineer since I was good at math. And in my mind, I didn't even know what that meant. I thought like, I don't want to be like an engine mechanic, but I did it because that it seemed like something that had a lot of opportunities. So I went down the mechanical engineering route. As I got further into it, I realized I don't want to sit behind a screen just building CAD models and running math problems all day. Even though I love math, absolutely love math, it just wasn't for me. So I pretty quickly got into the operations side of things and I loved working with people and systems and building teams that execute on a vision quickly. And, and then from there, I love the quick pace of things. So I became the head of a research and development department for this engineering firm that I was working at and started running the team like a software development team because the methodologies in software development tend to be one of the quickest paced and most adaptive to its environments. And then from there, it was at this giant enterprise, we were in 80 countries around the world, multi-billion dollar industry, or in a multi-billion dollar company. I ended up getting noticed by the, the CTO. And so they pulled me into their like software and tech division to travel the world coaching teams on how to operate more effectively. And that kind of is my, was my transition into software development. So then I ended up starting a tech company, which grew to returning a quarter million dollars within its first year of just releasing the prototype, essentially wasn't even scalable, which we'll touch on that later on, 'cause that's also like the biggest stupid tax that you pay. There's a big stupid tax.

Oh, good, good, good. Okay, I'm excited to hear that. I love everything business.

Yeah, yeah. And then, From there, yeah, I spent a lot of time in tech, but then my wife and I, we were both from San Antonio, Texas, and so we visit there for the holidays and things like that. We wanted a place to stay when we were in town, so we decided to get a short-term rental, went ahead and bought a fourplex just to get as many doors under one roof as we could and converted everything to short-term rentals and then loved the business model. So we decided to scale from there, like I mentioned before. And I love business. Like, I view myself as an artist where business is my canvas. Like, I love the process of creating and creating order from chaos. And so I always try to remain flexible in terms of the types of work that I do while at the same time translating my skills and expertise into new industries so that I don't have to pay as many stupid taxes as possible. And so, yeah, the rest is history. Got into the hospitality space, fell in love with it due to the fast pace of things. And yeah, the rest is history.

Dude, I, I love having people on the channel who love business. I have had a couple of people on the pod who literally hate business. They're just, they're like, I'm making money. It's like, oh, favorite real estate project? Don't have one. Don't like real estate. I'm like, well, this is going to be a lame podcast. And some of them have actually been really fun because the whole podcast was about how they're like, I don't care about my business. It's not something I'm passionate about. I do it because it works. I'm like, that's one way to do it. I am a board game player. I freaking— the whole thing, real estate plays like a board game to me. I love it. And there are a lot of pieces and a lot of rules. And it is phenomenal. The art side, this makes sense why you like hospitality. Real estate is a game for me. It's very competitive. And I stay super engaged. When you're thinking of it as an art, I think that's really true of hospitality. Hospitality is a super unique asset. I was just talking about, I just brought someone onto my team recently actually, who's going to be helping with the resort because I need help. But the art side, if you overpaid for a resort like I did for the resort we bought, Robin Hood Village Resort, we won on terms. It makes a lot of money, but we did pay a lot for it. You can overperform. Like, how do you fix an overpay in hospitality? You outperform. In multifamily, you can't really outperform. You can get to market maybe a little higher. And then people will just move somewhere else. You can create a truly unique experience and actually outcompete based on your artistic skill and ability to create a moment for someone and get them coming back again and again and again. So actually, this is already making sense to me why one would like hospitality. If business is art versus business is game, that is a different mindset. And that, that does lend itself to everything I know about hospitality. Talk to me about the art of hospitality. What, what things about that specifically speak to you as a, as a business artist?

Yeah. So we actually, my partners and I approach it much more like private equity would. So finding the asset that we can add value to and then raising the capital and bringing the team in that can execute on that vision. And so we actually like— what really fascinates me from the artistic side is having the creative freedom to communicate the vision and to communicate something great that we're trying to build while at the same time leveraging somebody else's skills that can deliver on that. Like, I'm not an interior or exterior or landscape designer. I— but I know a great landscape designer and interior designer. Like, I am not a numbers whiz guru, like spreadsheets. But I know someone who is a spreadsheet finance guru, right? And like going for a pie that's big enough that we can chop it up and then actually bring in A-caliber people to deliver on that vision is kind of that— it's as much of an art as it is a science, right? Because you can't measure people quantifiably in every aspect and fit them in. So it's getting creative with, okay, how do we actually want to leverage our soft skills and understanding of people and humans to actually create something that we inevitably deliver to humans in a way where they don't have to come stay with us. Right? Like, and travel hospitality is not a necessity. Like, like housing, that is a, that is a necessity for humans, but hospitality is not a necessity. So the competitive landscape is much more creative in terms of how do you deliver subjective value to people to yield the biggest return possible?

Oh, I love that. So that is approaching the art of business like an engineer. That's what I'm hearing.

Yeah.

I can see the pieces and we can put them together and we can— I'm like, this is all very consistent to a cohesive story of who is Gideon, the engineer business artist. I like the way that you move the pieces. And that's, in my opinion, the best way to think about business is like, you know, the things that you are strong at. And you find the things that you're like, oh, I understand the business and what pieces need to happen. I'm gonna do the things that I'm best at. I'm gonna build a team that can do all the other pieces. This question comes up a lot in my, uh, actually in my YouTube lives. Funny enough, I got this question like 5 times from the same person. Uh, so apparently I didn't answer it well enough. So let's see if you can do it when you are building a team. So you're, you're putting in the architecture for your business. When you're building a team, how do you select the right players? How do you build the right level of trust with people as you delegate tasks? That's a huge part of scaling beyond being a solopreneur to entrepreneur, is you have to, you have to put people in a position and you have to relinquish power to some of these people. When you're building teams or on a new project, what are some principles that guide you and how you build that team?

Yeah, so I would say looking at an individual's past and future. And then making sure that their past, their experience supports what they can deliver in the direction that they're going on into their future. And then making sure that those, that future direction has aligned incentives. So for example, and of course you have to be mindful of when you're looking at somebody's past and their experience, understanding the risk reward of each element. So what I mean by that is, We— this hotel that we just closed on, there's a massive landscape design element. So what's unique about our property that's a total differentiator from other hotels in the area is we have two massive gardens. We have two of the largest gardens in the town of Solvang. And so we're going to lean hard into that because it's such a beautiful outdoor environment. Being in the wine country, we're going to leverage that outdoor area really hard. And so as we were picking our landscape designer, it's critical to us that they have a track record that can deliver on our vision. So to us, it's, it's very high risk. And so we need somebody with a very strong record. Conversely, if we were doing interior design and we wanted the hotel to feel different, which we do, this is a question that came up a lot with our team. Is how do we want the hotel to feel on the inside? So an area where somebody's history, you might be able to be a little flexible is maybe you say, I don't want our hotel to feel like a hotel. I want it to feel much more like a lounge restaurant where people can get together and drink wine and laugh. So maybe you end up going for somebody where their track record isn't even in, isn't even in hotels. Maybe it's in designing a vineyard or a restaurant or something. And so you're taking that risk there. By saying, okay, I think that they can deliver on something that a hotel would need, right? So like understanding under what conditions I need them to execute exactly like they have in the past versus I think we can be a little bit flexible here and take a leap to create an experience that's different. And then in terms of what is their future, what are they going towards, is making sure that those incentives are aligned. Because if you're able to align incentives such that delivering value to you ultimately delivers value to them, then they will work harder to deliver value to you because they are, as a byproduct, delivering value to them. So another example here might be— I'll just continue with that design example. Yeah, if there's somebody that really wants to get into designing hotels, but they have only designed restaurants before, then there's really great harmony in terms of like, okay, their history delivers on what we're looking for and they're personally incentivized to deliver value for us because they want to get into this space. And so this is like a, a personal project for them that they'll prioritize above all the others. Like our futures are aligned. And I know that's kind of an abstract answer, but these are soft skills. Like you need soft skills in order to create partnerships. You can't just have somebody fill out an eHarmony survey that tells you how great they're gonna be for you in the project. It doesn't work like that. So it does require those soft skills and you almost have to communicate or think about those things in an abstract way.

And if you want to succeed on a business level, that is one of the main rules of any business is objectives have to align with incentives. I even, even going as boring as pay structures, if you pay someone a salary, they will act like a salaried employee. For leadership in our hotels, we tie the incentives to like, okay, based on certain performance metrics, if we can bring expenses down and income up, there's going to be a bonus structure based on this, right? Or— and there's a multiplier based on how the QCs are doing, the quality controls for the cabins, the head cleaner. If we're getting bad reviews, that's going to negatively affect them financially at the end of the year. If we're getting fantastic reviews, they're going to be rewarded for that. When we win, our staff wins. And putting together programs like that with, with pay, with vision, with goals, when you stack those correctly, you get a cohesive team.

Yeah. Yeah. You have to love those. Yeah. You have to align those incentives all the way to the top. And you as a business owner, you are rewarded when the property does well. You're not rewarded when it does poorly. And so as a result, it makes sense if your leadership structure, even all the way down to the cleaners if possible. Like, that structure needs to reflect the overall reward profile of the asset and of the business in general.

But I love what you said because I focus so much on the deal architecture and the business structure. When you talk about the actual personal aspect, that's one of the places I definitely lack. I am, I am someone who cares about people, but I'm very low in empathy. Can't get fixed. Don't have the muscle. So you need to put people in your organization like Gideon. Who can actually also process like, okay, what is this person's goals and how are they going to feel with this project? The, the soft skill, skill of how are people, the psychology of the people around you is really important. And if you are a psychological idiot, like, like your host here, you have to, you have to come in and you put people on your team that make up for where you lack with your skills. You mentioned that you have some partners. What primary roles do you play in the partnership and where do your partners fill out weaknesses for Gideon?

Yeah, that's a good question. So I have 3 other partners. One of them has been in the hotel space for 30 years, and so he just has an incredible amount of domain expertise. He has an insane network. He has a killer portfolio. So he owns 11 properties, and 8 of the 11 properties he doubled the value of in 2 to 3 years. And the only ones that he hasn't doubled the value of, and he bought like within the last couple years. So he's still working on those and we're still like, his track record is just insane. And so our lending was great. The team that we were able to bring in. So that pie example I'm talking about where you slice up the pie, it's a big enough pie and then we bring people in to feed and those people are all rock stars because that partner is a rock star. My second partner, he is a financial whiz. So he went to Canada's version of Harvard and his like financial acumen and the spreadsheets that he runs and the models that he does greatly de-risks the situation. So as you know, Chris, the hotel space, it is significantly higher risk than long-term housing for a handful of reasons. And one of those is there tends to be a lot more volatility in the space. So if the market softens, then hotels, depending on the market and the asset type, will feel it more. And so we de-risked our, our investment in multiple ways. We de-risked it by making sure that we had the right asset in the right market for the right price. We can dive into strategically what that looked like, but essentially we picked a market that through 2008 showed a lot of strength. And so we de-risked it with the numbers there. And so that's what my second partner owned. My third partner is phenomenal and has about 15 years worth of experience in renovations. So adding value to the asset on a tactical level and making sure that things are being delivered and on time and that things are running smoothly is really important because very often people will buy a great asset at a great price and then they'll totally botch the thing on the renovations. Maybe they'll pick the wrong renovations or something will go wrong or they won't communicate with the GC properly. And so they'll have to undo work and everything else. And so you can really shoot yourself in the foot. You can lose a good thing by not executing on that properly. So that's what that third partner owns. And then me and myself, I am running a lot of the content. I'm also engaging on the legal side of things. So with my history in research and development, I've spent a lot of time on legal. So I poured over the contracts, making sure that everything was good and buttoned up. I engaged with the broker to do the negotiations to make sure that things were going smoothly and applying the pressure when we needed to and pulling off when we needed to. As well as running the webinar. So when we did our capital raise, we did it on a webinar with a large group of people. I think we had 80 people show up on the webinar. So I pulled together like the pitch deck, structured the presentation, and led that presentation. So my partners came in, but I led the presentation because of my experience with presenting and talking on open forums and things like that. So we each have skills that complement each other very well. And then on top of that, we have excellent communication. Like, communication is everything. Like, I would rather be on a team with mediocre people who communicate effectively than a team of all-stars that have a hard time communicating. That's like when the Heat— I don't follow basketball, but when the Heat had, you know, those 3 all-star players, I don't even remember who they were, and everybody was saying, oh, they're gonna win the NBA, whatever, every year and all this jazz. And then they ended up flopping because they were all A players who expected to be the star of the team and they had a hard time communicating, working together, and they would get roasted by teams with less good players who knew how to communicate. So yeah, that's the extra cherry on top that I'll comment on is it doesn't matter how well your skills complement each other in a partnership. If you don't have high communication and high efficacy in terms of how you deliver as a unit, then it'll all fall apart.

You know what's hilarious? I don't follow basketball either. And I used that same analogy earlier today in a class. And I also didn't know who the players were and I wasn't sure what team it was. I'm like, there's a team and it was basketball and they put all the guys in and it didn't work the way they thought. This is a thing that is known. That's funny. I can't agree with you more. And it's something that takes, I don't think there's anything more important in a partnership than communication. Between your core partners, how often would you say you guys communicate?

Every day. So we have different forms. So we have a chat thread. We are talking every day. When we were going through due diligence and escrow, that thread was on fire every day. Now that we're stabilizing the property, I'd say we're still chatting like 6 days a week. It's just a little bit softer. And then we also have 3 touchpoints a week where we actually sit, we we hop on a Zoom call and we chat for anywhere from 15 to 45 minutes depending on the topic at hand. And then via email with various vendors, we'll, we'll loop each other in on email threads. So we'll have one person that owns the relationship and owns the conversation and fill the others in so that everybody stays aware of what's going on to keep that communication high.

There we go. Well, dude, that, that's probably the best piece of advice I think anyone can hear. Or for partnerships, you can have a decent team that does excellently if you have great communication, if everyone knows where the other person is, if you delegated tasks where, where stuff starts to fall apart. So one person thinks the other person's doing one thing, uh, something's done incorrectly where someone else had the knowledge. When you guys communicate as a system, you benefit from everyone's strengths and you back up everyone's weaknesses. That's, that is a fantastic way to do that. Is there a— did you guys intentionally come in and add structure to that when you started, or is that just how it came together? As we call every day, this is working. We have 3 structured meetings. What intentionality did you put behind communication?

Yeah, so we put a lot of attention behind communication. So given all of our backgrounds, we've all worked very closely on teams. And so even coming together when we were just experimenting with the partnership, We— and that was the first thing that we established really is how often do we want to talk? What types of things do we want to talk about? And how do we want to manage the different outcomes? So not just what tasks do people do, but what outcomes do people own? And then that's what we would touch base on. And we started off when we were just— when we were looking for deals, we touched base about once a week. And then once we found the deal and really got into it, and started going through due diligence and everything else, we probably spoke about 5 times a week on meetings. And, and then, yeah, we're pretty adaptive. So as the workload increases, we communicate that we should have more frequent touchpoints. And then as the work decreases, we pull back on that.

Everyone write that down. That is, that is, that is the secret to partnerships right there. Good communications, clear goals. Everyone needs to be headed the same direction. You guys mapped it out in the beginning. This is how we're going to run this partnership and this business. That is the way to do it. The partnerships that fail, unclear goals, someone's going this way, the other person's going this way. Those listening, I'm pointing two different directions. Uh, imagine it in your head. Uh, if people are pulling, even if everyone's pulling really hard, but there's no alignment in where you're pulling, you can go exactly nowhere with everyone working really, really hard and trying really hard. It's a mess. Communication's everything. Coordination's everything. In your group, is there a designated leader or are you guys all more or less in your own silos?

So we are what's called tightly aligned and loosely coupled, which is effectively we're all going the same direction. But, and so that's part of like frequently touching base is making sure we go that same direction.

Mm-hmm.

But we each own a separate area. So for example, right now I'm owning the design portion of it where I'm setting up calls with designers and having the meetings and So I will effectively like present to the team and say, hey, look, this is the person that I think is the best candidate and why. And then we'll effectively all vote on it. And so in terms of like who's a clear leader, we do have— his name is Neil, who owns— who's been in the space for 30 years. Of course, like we respect his opinion so highly that whenever he does make a suggestion, that naturally does carry more weight. But then, like I mentioned, like we each own a different area. So Alex, my partner, who is like the financial whiz, when he would present something and say, hey, look, this is, this is how the numbers shake out the best, then his opinion has more weight in there because he spent most, the most time in the numbers and has the best awareness of those numbers. So at the end of the day, we all will pitch in and vote and share our opinion, but there is an individual who their opinion tends to hold more weight and the others respect that opinion because we are aware of how their strength is being leveraged in that moment. The other thing that I'll add, which is I think vitally important to partnerships, is fully committing to a decision that's made. I've been in other partnerships and teams where there'll be two individuals who have different opinions on the direction that things should go, and they're both willing to die on that hill. And so even though the team goes one direction, there still is that other person that is trying to pull away because there's not full commitment. Yes, we don't do that. At all. Like, we'll have a meeting. If two people disagree, then they'll both make their proposal or their argument as to the direction they think things should go. And then by the end of the conversation, everybody will vote on it, we'll pick a direction, and then everybody's fully committed 100%. And I think that's a testament to, A, how well we work together just naturally, and B, how much we respect each other. Like, I know at the end of the day, if there are two differing opinions, we're probably safe with either of those opinions. In that moment, we're just trying to pick the best one because my partners are absolutely brilliant, and in a lot of areas, much more brilliant than I am, right? Because we each have our own strengths. So it's really just like we commit fully to whichever decision we agree to and move forward.

Ray Dalio calls this an idea meritocracy, where everyone has ideas, everyone has different strengths. So communally, everyone has a voice. But there are people who have more experience in certain fields. So your best numbers guy, there's just going to be a higher weighting when he's like, this, I believe this is the correct math. And this is how I've analyzed this, right? We all get to weigh in. But we're probably going to go with him. The hotel guy who has 30 years of experience, he's done a million projects. It's like, yeah, when he says this is what I think we're gonna do in hospitality, that a lot more merit and weight on what he says, but every voice is heard. Idea meritocracy, I think it's a genius idea. I try to apply that everywhere I can in my businesses. And I think you're, you're a better communicator on your team than a lot of my businesses. The groups that I have where we communicate daily like that, everyone has clearly defined roles. The only companies I knocked it out of the park on, like PM, that is a company I call all of my core team. We talk every single day. Multiple times a day. It's helpful that I'm married to one of them, but for the, for the team members who I'm not married to, we still talk usually 2 or 3 times a day. There is something to touch base on or a direction we want to go.

Yeah.

And we, we hear everyone's opinions. I, I may own the company, but I am allowed to be overridden by my director of property management because often she has better ideas than I do on how to run the properties or how we need to treat an individual situation. It is a fantastic business model. Also a fantastic book. Ray Dalio, Principles. If you guys haven't— if you haven't checked that thing out, it's like as thick as a Bible.

And it is.

It is the Bible for business. He's a smart guy.

Yeah, that's a solid one. And not only that, to your credit, like good leaders bring people in who are smarter than they are in those specialties, like environments where it's very top-down command and control, where there's a singular leader and everyone's scared to share those ideas. Those are toxic environments that if anyone listening is in should absolutely jump ship as soon as possible.

Absolutely agree. Absolutely agree. Tyrants are not fun to work for, generally speaking. You want, you want a connector. And oftentimes I have found the best leaders are not the smartest person in the room. This is definitely not me, um, which is fun in business. There's like If you're not the smartest person, but you are a good connector, you end up not taking control. You have to rely on others. You don't dominate everyone. You just recognize— I think, I think the word that I'm looking for is humility. If you have the humility to go, I'm not the smartest, and if I am the smartest, we're screwed. If you have that mentality going into business, you're going to build better teams. You got to be able to rely on the people you're working with and again, surround yourself with people with more experience. I hated running a hotel. And I think the reason I hated it is because, one, I had partners who had no interest in hospitality. And we, we broke our one rule. When you want to learn something new, learn from someone who's done the thing you want to do. We added no one on the team who had done hospitality, and we didn't really talk to anyone who owned hospitality. We're like, our other businesses did well. Of course this will work, right? That ruined the whole industry for me where I'm like, I hate running this. This isn't fun. What's your favorite part of hospitality overall? What is the thing with that particular project? Let's talk about your 24-unit. What is your favorite part of that project?

My favorite part of the project. So I'll say, I'll say two things. One is seeing things get transformed. Like, I just think it's, it's, it's a beautiful thing. So I'm, I'm a Christian. And so to me, like the idea of creating order from chaos is a beautiful thing that I think is fundamental to the human experience. Like, I think it's fundamental for humans to create beautiful things that are meaningful and to create them from chaos. So that's the first thing is like hopping on my— on the calls with my property management team and having them share the numbers compared to last year and seeing that things are getting better, seeing photos of the property and seeing it transformed before my eyes by people who are world-class is so exciting. It's so exciting. I mean, it's why HGTV was, was such a big deal for so long and still is, right? It's like humans love seeing order created from chaos. So that's the first thing. The second thing is I love the quick turnaround time of hospitality. So I love how quickly guests are staying and then leaving and writing reviews. Like the feedback loop is so tight that we're able to make adjustments and within a month we have a good data set of people who can provide feedback on that thing that we implemented. And a lot of that comes from, A, me being a data junkie, and B, coming from tech where we do have such tight feedback loops where we can release a new version of the app and immediately see how people are engaging with it. And hospitality has that tight feedback loop where you immediately see the results of the decisions that you're making, which makes it fun to move fast.

You can always tell on a podcast when, when, when you're, when you're interviewing someone and you start from the beginning of their story and you see all the first things weave through all the final things, you have someone who works with intentionality. I love that. Where some people just kind of wander through their business and occasionally they actually do pretty well, but usually the people who build the best, strongest businesses, it's like that. I'm like, I hear the engineer background and how you architect things. This is exactly what you were talking about with the tech background. You're like, I just, I liked the velocity of tech. And then we get into hospitality and you're like, what do you love? You love the data feedback. You love the tightness of the schedules. I was like, spoken like a software, a software and tech guy. This makes sense. This makes sense. Applying your skills. What things do you think that you, if there's one thing, what are you personally the best in the world at? What is your superpower? You're like, you put me on a team. And I'm going to add this, and this makes my business 100 times better.

I would say I'm the best in the world at the combination of soft skills that I possess. Right? So it's like, for example, if somebody is a software, an excellent software engineer and an excellent lawyer, then like building, like building law software apps is like what they're the best in the world at, that combination of skills. I would say my combination is my background in tech and so like my operational acumen around tech, my ability to talk to anybody. So like I love conversations with people. I love talking to people. I don't mind being the stupidest person in the room. Like that is my favorite place to be because I can ask as many dumb questions as I want and I have no problem asking those dumb questions. Um, and then also my, my desire for beauty in art, where like typically people who are very left-brained, mathematically inclined tend to be less right-brained. I think my balance between the two of like, I love structure and order and data and systems, but I also love beauty and art and design. And so being able to communicate with people to create teams that can execute well on both of those ends is what I believe I'm world-class at.

Oh, I love that. And in learning this, and you've alluded to this, there was a stupid tax paid early on in the career. But in building business and in your time in engineering and real estate and tech and the whole thing, there's a time when you don't know what you don't know and you have to pay to learn it. Sometimes it's monetary, sometimes it's just you lose a bunch of time, sometimes you burn a relationship. For you, What has been the highest stupid tax and how can we avoid making the same mistake?

So the highest stupid tax I have paid is lacking foresight for a core requirement at the end of the road. So the story to explain that is, uh, when I was first getting into tech, I ended up building a tech company, like I mentioned before, that returned a quarter million dollars within the first year of releasing the prototype. So it wasn't even a scalable offering. The thing broke all the time. It was literally just to test that the idea worked. And it caught fire. And what it was, was it was— in Texas, you get your vehicle registered and you have to get your vehicle inspected. And so those are two separate steps, but you have to get them back to back. And so I went and got my vehicle inspected, it passed, and then I forgot to register it and I got it. I thought, it's so dumb that these are two steps. Why isn't it just one step? Because you have to get them back to back each time. After doing the due diligence, I discovered that it's two separate departments. The DMV, Department of Motorized Vehicles, and the DPS, the Department of Public Safety, I think, or something like that. So it's two different departments. They don't talk to each other because it's the government and they struggle with things. Not going to get into that. They have a hard time.

And that was communication. Not good at it.

Communication. Not great at it. And so my product idea was merging those two steps so that basically when you get your vehicle inspected, we will automatically register it. I went and partnered with the, like, the, the Jiffy Lubes and the Quick Cars, all the oil change places that offer inspections. And I actually partnered with the largest state association for this group. So I became friends with the treasurer. We built a— he's one of my mentors today, absolute phenomenal human being. And, and basically he brought me into the circle. I was the only vendor there. It was like it was like a total feast offering this product where basically my offering to them was I will give you all the data you want on the people that are coming and getting their oil changed because those locations always wanted the data. So like they wanted to know where people live so they could send out coupons and get people back into their shop for oil changes and whatever. And so I was like, I'll give you all the data and then I'll just make the spread because I'm upcharging on processing the registration. I had people kicking down my door. We were literally scaling so quickly that I was turning people away because I was like, our system was literally just built to prove out the idea, right? It was like the minimum viable product in its purest form. And we built it in alignment with what the state's 5-year plan was. So they had built out a 5-year plan and 5 years down the road, they were going to start looking into these like remote kiosks that we were actually building for people to to do it. And so I was like, dude, all right, we're building what the state is going to begin looking at in 5 years. This is a no-brainer. Like, incentives align. I have what they're looking for. These shops love it. I was getting tons of reviews from people who had used our products saying this is the best thing since sliced bread because all these other people shared the same pain point that I did when I got my citation. And, uh, and so it blew up. And then when I engaged the state, they ended up turning it down saying, oh, we're not, we're not looking into this just yet. Um, but thank you for like coming up with the idea, I guess. And in my mind, in order to, in order to scale the product, we would have to be integrated with the state system because the way that our system was operating, it was basically we built a bot that would go onto the state's website and fill everything out and for those who are not familiar with tech, it's not a very stable way to scale a business. It's much more stable to integrate directly with their, like, systems and databases. And so, uh, so it wasn't a scalable product without the state's buy-in. And in my ignorance, my stupid tax was assuming that the state would follow the same business logic that the broader, like, the, the free market follows. And so We ran into issues there and after talking to people who got government contracts, they basically said, yeah, like it doesn't matter what you're offering, you need those close connections with the state. And so we had somebody who was interested in acquiring the company and we were having those conversations and it all fell apart because we didn't have that piece figured out that would be further down the road. So Now, the second part of your question is how would I capitalize on that stupid tax and make sure that it doesn't happen again is I would find somebody who has done the thing that I'm trying to do or somebody that's done the closest thing that I'm trying to do. So in that case, I should have been looking for conversations with people who had built tech products that worked with the state and that had integrated with the state. And I should have gotten their buy-in early on. And that was something that not paying that stupid tax. I did with hospitality, which was finding somebody with 30 years of hotel experience, bringing them a deal with my partners to get them involved. And then now we've executed on this property incredibly well. Right now we're above what our original projections were. We're hitting numbers above our projections and everything is going really well because we got somebody who'd done the thing that we're trying to do. And that's a skill that can be translated across the board. Like that's a universal stupid tax mitigator, is finding somebody who's paid the stupid tax so that you can bring them in and then they can point out how to evade that stupid tax.

If only there was a podcast that asked this in every interview so that you can learn that here, right?

Only there was a podcast that pointed people to—

Oh, that's funny. Oh, I could have, I could have listened to this episode prior to me buying my resort and I would have done the exact same thing. Find someone who is not the same. We thought we were doing that by asking the owner. I was like, oh, we got really close with the prior owner who has a vested interest in not owning this. Uh, I'm like, they're selling it to us. Of course they're going to tell us what we want to hear. We should have found another operator who does a lot of hospitality, had them look over the deal with us, and there's a couple things that we would have caught with experience that would have made this project a lot easier. I ended up with a very hard project that we didn't execute that well. It still makes money. We structured it financially really well, but it's a project that's like, well, there's not really a buyer for it yet and we have a lot of project left to do and no one had fun on the adventure. That's the biggest bummer in real estate. Yeah, don't have fun doing the project. I'm going to ask you one bonus question and then we'll call it— we'll call this podcast. You mentioned being a Christian and in business, and I love this. You guys may notice my name is Christian. I'm very biased here. If you, if you have not yet found God, uh, do so immediately. Gideon, being a business person and being a Christian at the same time, I, I see a lot online about, okay, well, how, how do you focus so hard on your business as opposed to like, how do you balance that with faith? I always appreciate other business owners' opinion on this. How does faith play a role in the way that you do business?

Well, I see it a lot. I see life like a canvas, right? Because this is the same— this, to me, ties into the same question of like, how can God exist and my grandmother die of cancer painfully, or somebody get in a car accident? Like, how can those things exist in the world simultaneously? And, and my response is, it's like a canvas that as it's painted, you see there's dark and there's light, and it's that contrast that actually creates something beautiful. And you don't appreciate the highs without the lows. And of course, like, there's all sorts of complexities with that. But in terms of like an abstract visualization, that's how I think of it. And I view business the same way, where business is a tool that we use in life to create order from chaos and to deliver value. So the real question is, How is that tool used? Right? It's like, it's like money or food. Money or food are neither bad. The question is how you use it. Are you so in love with money that it takes over your life? Are you so in love with food that you're a gluttonous and it's unhealthy and it's causing problems in your life? Right? So it's at the end of the day, business is neither good or bad. What makes it good or bad is how you conduct your business and how you engage the world around you and how you leverage the outcome of that business to do whatever you feel called to do.

Good stuff. Good stuff. I love it. I love it. And I couldn't agree more. There is nothing inherently good or bad about business. There's nothing inherently good or like religious or not religious about business. There's not like a Christian business. I make the same argument about music.

It's—

there is music and it is a reflection of what the artist wants to write. There is nothing that is inherently Christian about music other than, you know, what you decide to put in it.

100%.

Business, business can be absolutely beautiful and business can be awful and it can be a mix of the two. Gideon, I appreciate your time a bunch. You have a podcast, you share your story online, you're the, you're the sales and marketing guy in your group. You're the, you're the storyteller. Where do, where do people go to hear the story? On, on your podcast, on social media? Where do people find Gideon?

Yeah, so my podcast is The Hunt for Incredible. With Keith and Spencer. And it's effectively— I had you on the podcast. That episode was a ton of fun. And in the show, we basically pull people in who have done incredible things to understand how they did it and how they would do it all over again with no money and no connections. The idea is to show people that it's normal people who do incredible things and then give them the blueprint so they can do it too. You can also find me on social at Gideon Spencer underscore. I'm mostly on Instagram. I do have some some TikTok stuff and some Facebook stuff, but it's really, it's really mostly Instagram. I'm gonna start pushing a lot more on LinkedIn, so find me on LinkedIn as well, Gideon Spencer. And then you can— I don't actually know what my thing is on LinkedIn, but it's— I'll go ahead and change it right after this so that it's the same thing: Gideon Spencer underscore.

There we go. Gideon Spencer, the best mustache on the internet. It's a fact. You can look that up. And if you don't believe me, check out his Instagram and his podcast, The Hunt for Incredible and Gideon Spencer. Gideon, thank you for joining us. Everyone else, we will see you on the next episode.