Episode 91: Memo Kahan with PromoShop on Culture, Community and Enjoying the Ride

Welcome to Skucast, the podcast for entrepreneurs in the promotional products industry. Skucast shines a light on our industry's best work, features maverick personalities, and discusses what's really involved in running a modern promotional products business. Skucast is the official podcast of Common Skew.

In 2009, we barred the word hope from our buildings. It's not ever about hope. It's about trying to have a vision and the passion. And then, you know, you got to have a plan and you got to write down the plan and you have to figure out when your plan's not working, when you got to make the next turn the other direction because you're about to fall off the cliff.

He was born in Mexico City and immigrated to the US as a teenager. This young immigrant would someday build one of the most successful promotional products businesses in the industry. Today, Memo Cohn leads a team of over 100 employees, over 40 salespeople, over 1,200 clients, and $40+ million in revenue. Promo Shop doesn't do programs, and they're not big believers in acquisitions, but they continue to see tremendous organic growth. I was in New Orleans at a dinner, and it was a typical loud dinner, excellent cuisine, but difficult to connect amid the clamor. Memo moves from the other side of the table, grabs a chair, and pulls it next to me. Heads bent, we talk quietly about the business for a while, and I realize that this is a part of his success and why Promo Shop continues to see tremendous organic growth, a tribute to those early roots where hearts and business were won one by one. Hi friends, my name is Bobby LeHew. I'm the Chief Content Officer at Commonsku, and I'm joined by Mark Graham, Commonsku's co-founder and Chief Platform Officer. And today we chat with Memo about the success, struggles, and future of Promoshop and the industry. This episode is brought to you by Commenscue, the platform that powers your connected workflow, enabling you to process more orders and dramatically grow your sales. 2019 is your year. Start it right. Begin your free trial now at commenscue.com. And now, our conversation with Memo Cohn.

So Memo, take us back, not to 1998 when you founded Promoshop, not even right before then, as I know you've been in the industry far longer. But take us back to Mexico City, Mexico. You were born and raised in Mexico City. How did that affect your worldview? How do you think it impacts your outlook? Has that had something to do with your success?

I think so. I mean, I think any time that you grow up somewhere else and then you start a business or a new life in another country with other different cultures and with different paths, I think there has to be a lot of things that you bring with you, both the good and the not so good. So growing up in Mexico City was pretty amazing. I always think that if I could ever bring my kids back there and have them grow up there, how amazing that would have been. Growing up in Mexico City, I think a little bit of the values and the way you live is a little bit differently. The biggest values that I think we came to the United States with is family, all about family and the care of the family. Families there are a little bit different with regards to, I think, a lot more needy of each other. We would have lunch and dinner with my dad every night, and that was really important. Things there were not always about sports and kids' sports. Things there were about sort of more about the community and what are we going to do together next, which I thought was awesome growing up. And then, of course, having the luxury to move to the United States and seeing how different it was with respect to what people like to do and what people talk about and what the functions are as a family, which I was happiest because I love sports and love competing. Day one of moving here, it was all about what sport are you going to play and what team do you want to play on? And it sort of turned itself upside down a little bit. And the family time became sports time. I still remember vividly one time where my dad was working for a company and the owner of the company went to ask my dad if he was going to see him at the football game, which was going to be my first football game. And my dad looked at this guy, I guess, and said, no, we got to work. And the guy said, absolutely not. When our kids play, we go watch and then we can always work. So it's little things like that, I think, that are just a little bit different and a little bit unique for themselves. But I think there's so many good things about both places. We talk about Mexico City as being sort of a third world country in a lot of the ways that they do things. And then you come here, which we always refer to as the first world, and just the access and the technology and even going to the supermarket, the things that you could buy here that back then you couldn't buy there. It was pretty neat. And definitely I would suggest it to anyone if they could start over, go start a family in Mexico and then bring them here as as teenagers, and I think you can get the best of both worlds.

But not only did you have a diverse upbringing in Mexico City, but your parents, where were they from?

Both my parents were born in Mexico City, but they're first-generation Mexicans. My mom's family is German and my dad's family is Russian. Both families immigrated here right at the beginning of World War II. My German family came actually through Ellis Island, but they decided to continue south as my grandpa did not want to live in a country that was at war, as he was just leaving war. And then my Russian grandparents were dumped in one of the Mexican ports. They had not a lot of means or a lot of guidance and they were just dropped there. And they both come from salespeople families. My Russian grandpa would sell shaving knives at stoplights, eventually started selling socks. And then my German grandpa sold bristles for toothbrushes and for hairbrushes all over the world, actually. Through his connections back in Germany. So pretty well-rounded from a worldly standpoint, especially the German part of the family. But pretty lucky that they both landed— well, actually, that they both survived and then landed in Mexico. And then my parents—

do you think this upbringing you had in Mexico City— because it's a, that's a unique perspective that most of us don't have that are born and raised here— do you think that still informs the work you do. And I guess really my question is, how do you think that still informs the work that you do?

I mean, I think everyone that has worked with me or around me or that has met me, I usually start by a hug and a kiss, maybe, which I think is completely what the Mexican culture brings. You know, we are not big handshakers, we're huggers, and you immediately try to make a deeper connection than just an introduction. Production, a little bit of the spirit that we have. I think, I think we like to celebrate a lot, which I think has a lot to do with the Mexican culture. We try to celebrate as many things as possible because we like to not only have fun, but you like to promote as many times as you can. And it doesn't have to be big birthdays and big anniversaries and big promotions. It just can be, it's a great, beautiful Friday and let's all get together and bring cakes or bring things. So I just think it's more about the family atmosphere that I think I bring with me We don't try very hard to make it a family. It just turns into a family by the little things I think we do. I assume that that would permeate throughout the organization. It's not something I think a lot about. I think it's something that just happens that way because that's what we brought with us.

You know, that's an interesting segue. Mark, you and I talk about this a lot, that, you know, you're passionate about Promoshop's culture, and it's often so clear that a company's culture can actually be mapped back to the founder. And so you can see how the culture is somewhat of a reflection of you as well, even though it may be more subconscious than you realize. Let's talk about this amazing experience you've had with Promo Shop through the years. Can you take us back to your journey? You started Promo Shop in 1998, and so now you've got this 20 years of success. You have So many people in the industry envy you and your business. And I say that in a very positive way because of all kinds of reasons, but you've had this incredible ride of success. When you look back at 20 years that for you has probably just flown by so fast, what do you think of as the high watermarks in your business? Also, what do you think were the low watermarks? Maybe we'll take those one at a time and maybe we should start with the low watermarks first.

Let's start low.

I can start low. I mean, I think that when you start a business and you really don't know where you're headed or what path you're going to take and all the things that encompass having an organization, it's pretty mind-boggling. And I'm really happy that I really had no idea what I was getting into when I did. You know, you don't go to school for this. I think that on the low side, you start with people always, right? They're your asset and they're also your liability. You think that you give to people all the opportunities and all blood, sweat, and tears that you can. And again, that's what you think. It's not necessarily happening. So it's sort of self-inflicting here. And then suddenly you get disappointed because people leave and people do things that you believe are not for the best of your organization. And you sort of got to deal with it. But after you get a few disappointments, it sort of jades you a little bit, unfortunately, for a little while. And I know that—

are you talking about in terms of recruiting people and just getting the right folks on board and then just that disappointment sinking in and change you a little bit to that process.

Yeah, I mean, it's just, you know, it's not all rosy and it's not all wonderful. And I think usually it's people that can make it rosy and wonderful. And it's also people that can make it not as fun and not as successful as you thought it was. And, you know, so you always think that anytime people are going to come work with you, that they'll never leave because you have set them up for success and you've set them up based on everything that they needed and everything that they asked for. But as we know, I mean, I moved 3 companies before starting this. Nothing's forever. And once you get past that shock of nothing's forever, I think you can start feeling better about yourself. But for the beginning, you just take everything too personally. You know, it's really you. And when somebody leaves, they're leaving you, not your company. Also, when somebody succeeds, you know, it's their success, not your company. So it's, I think, you know, it sort of doesn't work both ways.

Yeah.

Until it does, however. And that's where the, well, when we talk about the fun stuff, it really, I think at the end it does, but you gotta sort of get knocked down a few times for you to realize you're not that cool and it's not all about you. It's actually nothing about you. It's all about them. But that's only on the person standpoint or on the people standpoint. I think that on the company standpoint, we always thought, or I was always taught that our industry was sort of immune to recessionary times. And 2000, you know, 2008, 2009 happened where we were all sort of on life support. And I think that really was a turning point for me to sort of grow up and to take this a lot more seriously as a business than as my little playground was because we had to make decisions and sacrifices that I never even imagined that I would have to try to think about.

Do you fear losing the business at that point?

I don't think we were going to lose the business, but I think everyone thought that they were going to lose a lot. I mean, our first thing, of course, that we thought about is how can we survive without getting rid of people? And so you start talking about what are your options and you bring in the experts and you surround yourself with people that have gone through similar things that are going on. And we started with that ugly word called the furlough. And you sit down your whole organization and say, hey guys, we just lost 30% of our business. The world just lost 30% of its net value. And we're going to all have to make sacrifices and changes if you want to be here. And it starts with, you know, if you work 5 days a week, you're going to work 4 to 3 days a week moving forward, but at least you'll have a job. And so on and so forth. So you start with the more personal, which is, you know, cutting people's salaries, which is nothing you ever want to do, to then dealing with banks and dealing with reissuing lines of credit, which we are dependent on, and reissuing of the covenants that you have to live and die by. And then you deal with bankruptcies from clients that left us with a lot of inventory in a warehouse full of their stuff that we could not even get rid of because everything was in a bankruptcy. Adoption court, you really sort of grow up. I don't think I was ever ready to grow up and to make those types of decisions. And so that was, you know, you talk about where you, the main points of your growth were, that was a great point of learning and a horrible time of being just because it was too personal and we always thought we were cooler and more immune than we really were.

Did it change you?

I think it humbled me. I mean, I truly think it humbled my ways of treating people and of acknowledging who was here for the right stuff, which was for the betterment of the community, not for themselves. I think we all became, you know, humbled. And that's such a powerful word in everything we do. And we got humbled from the top to the bottom. You know, no one was immune. And you had to make some really hard choices and you had to go and and again, talk to the lending institutions and sort of go in there and not beg, but really ask for forgiveness for what's about to happen and for a path to allow things to get better as time goes by. Was very fortunate that again, I had some great friends that helped us through and great people that talked me through some of the things and some of the options we had. Fortunately, I think we did the right thing and instead of sort of cocooning tuning ourselves, we went out and we hired people. And that's how we thought that we could combat the 30% loss in revenue by hiring more people to raise that revenue.

Memo, did you find in the pre and post financial recession time that Promoshop's value proposition from a creative standpoint sharpened? The reason I ask you that question is that we often hear at industry conferences about the good old days, about how 10, 15, 20 years ago it was just easy to be in promo. There was tons of demand, there weren't as many competitors, and it was, it was just easy if you were halfway bright as a distributor for you to grow a good business. And then since then, the last, say, 5+ years, people have said it's a lot harder. And as a result, I think that that's ultimately a good thing because it's meaning that distributors are really going to market with a fantastic value proposition to go and win that client business. Is that what you're referring to when you just talk about how Promoshop grew up? Is there, is there a value proposition adjustment?

Oh, absolutely. I think, I think you're right on. I mean, I think before you went and you sold or send your POs every week and there was not as much focus on the expenditures that would happen in the marketing of promotional products as— again, I thought it was recession-proof. That's what I was told, that we were so below the line and in the percentages of marketing that suddenly everything became under the, you know, came under the microscope. And even promotional products became a commodity that people wanted to work through and people wanted better deals and different things. You know, as I'm sure a lot of us did, you know, we sort of sat in a room and said, All right. What's been our value proposition? What's been the things that we've done better? You know, the biggest casualty we had in 2008, 2009 was we had a department of 14 people that ran our programs, beginning of the online stores, and everyone wanted them. And we had technology, we had all these touchpoints, and we decided that that actually became our demise or part of our demise because our two biggest clients went bankrupt. They left us with warehouses full of stuff. And then as we re-engineered and went through the thought process, you know, the question is, so what do we do well and what's going to be the thing that we want to become? And, you know, the word creative continued to resonate and we decided, you know what, if we are not going to be able to write the programs, let's write creative as much as we can and let's see if it's sustainable and let's see if it's, it's not as commoditized as everything else. And let's see if we can continue to drive margin because of what we do and how we go to market. And so we truly grew our team from 2 creative people to 5 creative people during this disaster going on. That was the beginning of our let's focus and let's reinvest on what we think is better. And that, I think, was sort of one of those aha moments that you go back and go, that was pretty good of what we did. It also happened to work. But, that was a highlight that I'd say when things are not so good, you got to sort of figure out a way to re-engineer. And, it's not what I think or what I want, it's what people around us think and then you got to test it and then you got to figure out is this sustainable and how long are we going to give it. And then, you sit down with all of your salespeople and you go, "Hey, guys, we're going to fight fire with fire here." we're going to spend. You guys just need to make sure you go out there and expose to the world what we're doing and how we're doing, and we're going to try to support you as best we can. But go sell stuff. I think it, it sort of got us out of there, out of the, the bad times a little bit faster than we thought we would. But it was definitely a risk, and it's continued to be a reward because now we continue to grow the department and people still think we're creative, which, as long as that happens, The message is clear.

You also decided that who you weren't going to be. That program loss left such a deep cut that you to this day shy away from those programs, right?

Yeah. I mean, it's sort of a darn on us once, if we do it twice, then you can't point fingers at anyone else. And there's people that do it so much better than we do that have been doing it for so much longer in a more desirable place besides West Los Angeles. But yeah, we're going to keep focusing on what we do better here in California and across the country with our offices. But fulfillment today is not part of our— what we would consider to be our capabilities.

You've chosen largely— correct me if I'm wrong, you've chosen largely to grow organically rather than by acquisition.

That is true.

You and I were talking, we had dinner together in New Orleans, and that was a there were so many fascinating parts of that conversation. That was one of them too. And you've been adamant about organic growth. You have 40 salespeople currently.

Yeah, a couple more, but that's good.

Why have you shied away from acquisition?

It's not been part of our strategy or never was it. I think I was fairly fortunate that I worked at a couple of previous companies where I made a lot of friends in the industry and friends that sort of sprouted into other companies, and somehow we were always in touch and always connected. My happy experience is that we've always been lucky that people have called us instead of us calling them regarding job opportunities, which is really a dream. And it's a dream if you're able to choose who you want and why you want them or why they want you. And so little by little, as he started getting calls, and also, you know, we got lucky with a couple disfortunate companies that went bye-bye, we were able to acquire talent by just saying, hey, here's a great opportunity for you to make money, and here's the way we have the company set up, and this is the way we believe you can succeed, and here are the tools we're going to give you. And as long as we kept doing that, people kept calling. And, you know, it's a small industry, yet it's a big footprint. But I think that if you, uh, do that both with your salespeople and also with the suppliers, you know, supply chain. Those are the ones that travel the world and the country. And those are the people that, you know, distributors ask, who should I call or who's doing okay? You know, I think innately, or we didn't even think we were doing it, we were just telling our story and trying to be user-friendly. It happened really nicely. So yes, we've had a couple of opportunities to dive into deeper conversations with other companies. The timing has never been perfect that we had a small acquisition up in Seattle, but that was sort of the thing was so aligned and so perfectly came to us that we helped out and we were helped by doing such a deal. But in general, I think that if we stick to our plan and if we continue to attract, I don't know why we would go buying companies unless of course if we wanted to dilute what we have or if we had a bunch of money that we just and know what to do with it. Fortunately and unfortunately, no, we don't have a ton of money sitting not knowing what to do with it. We grow about double-digit percentage-wise every year the way organically we do it. And it's a nice pace. And I think it sort of keeps the machine going in the right direction without too much turbulence and without too many crazy things that might happen even when you incorporate other cultures and other people to your team.

Hey, Memo, back in 1998 when you started Promoshop, did you see a time at that time in your business that you would be a 60-person company? And if so, how did you put yourself on that track to go from just Memo to a large, diverse, complex organization?

So we're about 110 people strong today, and no, I would have never guessed or dreamed that, uh, that we'd have so many people in our team. No, I think, you know, again, 20 years ago, we're a little naive. We think that we are omnipotent in some ways and we know everything. And I just thought I had an opportunity and I worked for a wonderful couple back then that sort of taught me the ropes and allowed me to run their company for a few years that really sort of showed me under their guidance that I could do this. And as timing happened, you know, it was just sort of time. I had a big book of business that I was writing myself. I could start a company of one. And I really thought that if I set it up a little bit differently than others, and again, it's all in the eye of the beholder, right? Nothing's that different from the other. But I really thought that, you know, if I could bring a little supply chain with a little marketing and a little salesmanship, you could combine 3 things like that. It could become a little bit different than the 3 previous places that I had worked, worked with. And little by little, we were able to accomplish a lot of it, you know. And it started with hiring people with no experience, was part of the initial goal. Again, if I could do it all over again, that was probably very time-consuming and very expensive, although I had the funnest time doing it. And then we thought about, we have an office here, do we want another office in It started with an opportunity with people in the San Fernando Valley. And then we were able to start our second office and went, wow, that is really cool. How can we find other pots of people in different places or other companies that might want to work with us? And we can start the same path. And little by little, you know, as you start growing up, you start surrounding yourself with incredible people, people that just sort of grabbed me by the arm and said, son, I'm going to teach you things. And son, let me tell you what's going to happen.. And I had a couple of those, both the people I used to work for that were incredibly helpful in my life. And then our COO that I hired 10 years into this, actually, no, 5 years into this. So, 5 years later, we started becoming a professionally managed organization and learning how to invest in people and what gaps you have and what kind of people you need. You empower them to make changes, you empower them screw it all up, and hopefully they don't. And we have this conversation that it's been 20 years, but I could tell you exactly where I was 20-some years ago when I called my dad and said, Dad, I need a place to work out of because I'm leaving where I'm working today. It's just so vivid, and it seriously feels like yesterday. I don't know, I assume I've changed a lot, but I think the passion and the vision still remains the same.

You've obviously learned a lot about what it takes to succeed in this business. And this is such a broad question, I kind of hate asking it, but I kind of ask it for the reason that there are young entrepreneurs that are trying to find their way who are in the listening audience. With 40 salespeople, you've learned— 40 plus— you've learned a lot about what it takes to make up the right kind of entrepreneur in this business, the right kind of salesperson. When you're considering what's going to make someone successful in this business? Are there certain character traits, qualities that you look for? Can you sit down with somebody and sort of get the feel that this person is going to succeed?

Oh, absolutely. Yeah. I mean, I think anyone in sales, it starts with you have to be self-driven. You know, anyone that needs motivation to sell things probably will not last here very long. Right.

But when you say self-driven, what do you think is intrinsic in them? Is it the need to win? Is it the need to have more money? What do you think? Shines brighter?

I think there's so many drivers. You know, I, I, we always reference athletes to salespeople, you know, and some even bring it further and, you know, Type A type people. I don't characterize it by people. I really characterize it by drive. And, and the drive has to be to win. And winning means you gotta get clients, you gotta sell stuff, and you got to make money. And so I don't know what's more important in that. At the end of the day, you know, you want to win the client, which is going to win you business, which is going to make you money, which is going to make you wiser, which is going to afford you more things. So, somewhere there, everyone has their starting point. I, for whatever reason, the driver was never the money. But, once you start making money, it becomes a really important part of what we do, right?

What was it for you if it wasn't money?

It really was to go learn and to go figure out what I could for a living. I really had no idea that I could speak as much as I do so comfortably. As my mom would always say, I was a quiet boy. You know, I kept to myself, I did my thing. But being able to open yourself up to strangers to tell them that your pen is better than the other pen, I think requires a little more sensibility and a little bit more being able to read character or the person you're speaking with, the opportunity, the situation, the audience you're with. I think it's got a lot to has to do with what's inside of you. I don't think you can teach salespeople how to sell. You can teach them better ways of selling. But I think entrepreneurs and people that have that drive, it has to come from within. And we're no whippers here. People come and go how they please, as much as they want to work or not work. The only way, unfortunately, that we're able— or fortunately— that we're able to measure their success is by how much money they make or how much money they make us, right? And so they need to be— as much as we try to motivate and you give them the tools and you give them the the thought processes, or you give them the street that they should drive through and, you know, knock on doors. It really has to be a self-motivating endeavor, I think, for it to last, for it to last long, and for it to be successful.

I think that's a great segue in talking about lasting long. And Memo, you've been in the business for some time now. I mean, you're certainly not ready to retire, but when you think about the future of Promoshop and the typical options that are available to entrepreneurs in this industry. Do you see yourself transferring this to the employees, transferring it within your family, or doing what Mitch Munger or Chuck Fandos or the folks at CSE have done in terms of selling out at the size they're at? Because you're in the same league as those folks. Has that thought crossed your mind in terms of what your options what your predictions are over the next 5 to 10 years or maybe sooner?

I'm honored to be referred to the same league, so thank you for that. I look up to all those guys and they're all my friends. I think it's interesting times. And again, all I keep hearing is if you don't adapt to today's environment, then you're going to be left behind. I, you know, with this world of consolidation and what you're saying and reading and we actually, you know, you're part of the world we live in. I think we all got to think really deeply of what we want to do and how we want to do it. If you were to ask me 10 years ago, everything was rosy and I really didn't know what I was talking about, I would've told you that I want to retire one day and leave the company for the employees that made us so wonderful and so amazing. And how beautiful would that be and how rewarding that would be. I don't know if that's sustainable anymore. You know, the old ESOP programs that we all looked into, that sort of doesn't make a lot of sense. Sense. I do not believe that this is something that is for my family. I have two sons and I truly believe that they have other passions and other career paths, so it's not for the family. I'm about to be 50 years old and I think I still can work really hard. I love coming to work. I love waking up in the morning and dealing with the things that— both the challenges and the successes that we do. So if I had that magic wand, I would say I would love I want to keep this company as long as I can, or derivation of this company might be bigger, smaller with different offerings, but I still would love to be at the helm of it. However, the backend looks, I worry a little bit and I'm also excited about this global economy and this global reach that we all supposedly need to have with some of our bigger clients. And so we're looking at opportunities out there. And yeah, I mean, we have big ears, but we also have a lot to do and a lot still to accomplish where I'm not ready to walk away and say farewell. I think it's the opposite. I'm still learning and I'm still passionate and I still love working with the people I work with, both internally and the clients. And, and then the industry, which I think has a lot to do with all of us. I think we're very fortunate to have an industry of professionals that share a lot and that sort of go to battle together, even though we're competing against each other every day. I love these conversations with both of you gentlemen. You know, we're competitors, yet we're friends. And yet, if you ever need something, you can call me and I'll tell you what I think. And it's not because we're competitors, because we all want the companies and the industry to do better every time. So I think you're going to be dealing with me for a little bit longer, if that makes any sense.

So what's on your desk right now? We want to get a glimpse into what the world of Memo is like today and this week.

I became our VP of sales about 3 years ago. I self-appointed myself as the VP of sales.

Why did you do that? Why did you feel the need to do that?

Because I realized that sitting behind or standing— I stand all day long— standing behind my desk was not where I have the passion or where I thought I could add value. I was sort of— I would stand here and people would walk in and tell me what their problems were and I'd solve them for them, or I'd ask them how they do it and I'd help them through it. And then little by little, I started having some opportunities with some pretty neat clients. And I hit the road and I just started going and talking to people and actually people, potential clients. And we started winning a bunch of business and we started sort of spreading our wings yet again. It was a big push of let's go get more. And it worked. It worked really well. I sacrificed a lot of time away from home, but I also would work really hard and take red eyes and do all the crazy flights that I could do. And to go tell the story. And so a few, probably months into that, I came back to our sales team and said, hey guys, I will travel on planes, trains, or automobiles anywhere you want me to, as long as you bring me to meet clients or potential clients. And I think a lot of them took me up on it. And it's awesome. And it's been really good. And it's been very good for me to go out there and listen to, to what's going on and get the pulse of people. And yet again, through 3 years into this experiment, I'm a little bit tired, and I'm not doing everything as well as I used to because I could not be in 5 places at one time. And so I'm relinquishing a little bit of my sales management, and I'm becoming a CEO again with sales on my mind all the time. If you want to know what's on my desk, it always has my notebook, which is sort of like my keepsake that I travel with everywhere I go. It's sort of in my man purse. If I go to lunch, it'll always be with me. There's usually nothing else. I leave my office where there's nothing left on my desk. Every piece of paper, even my pens are put away. And then I have my credenza, which is— I have a few of the projects that I like to work with, with some of our salespeople. I think I get to things very well because of the organization skills, but I also have a ton of magazines. I love to read magazines. I love to read lists. I love to read about where and who's going to be our next target and how we're going to go get them. So, that sort of makes me happy and keeps me busy.

What client would you love to land that you're not currently working with?

Ooh, that one client. And, I guess it has to be in today's environment, not 20 years ago, which would be a lot cooler and a lot funner.

That's a good question.

You could answer it both ways.

You know what? We happen to work with a lot of the new technology clients. And I would say the next best of the technologies, we happen to work for the Googles and for the Netflix. And we actually don't do anything for Apple. That would be extremely fun. We do little things for Facebook, but it would be any company that has that type of mindset, which is really what I reflect to 20 years ago where everyone could buy anything from everyone, right? Where it was not all driven by cost plus margins, by procurement, by people that are telling you what you cannot do. You know, back in the day you'd go to a client and they'd just say, all right, don't just, I'll take $5,000. And it was not about, can I do it for a little bit less? So there was so little information and knowledge about the competitive landscape that now, you know, you Google anything and everything, anything shows up. So I would say the next best technology company where we could work with all of their marketing teams and not with their procurement teams, that would be really, really fun if you can find them. And by the way, back to the Facebooks and the Apples, actually, I think is a little bit more procurement driven. But if you look at the Facebooks and the Googles and the Netflix, which again, we work with 2 out of the 3 already, it's pretty cool. It's pretty cool. And they allow you to make money, but they also make you work hard and be innovative and be different, which is everything that they talk about internally. That type of stuff I really enjoy.

You're a large personality in the industry. You've been in the industry long enough. You're a huge influence in the industry. Everybody loves Memo.

Right.

What do you wish people knew about Memo that they don't know?

I mean, I think we all like recognition, but I think I'd like recognition without the public recognition. I like private recognition. And I think that people that know me know that I just happen to care. And I don't mean it in such a coy manner, but I like people. I like to learn. I like to give as much as I can. I think that people that don't know me should know that what I probably say is the truth or it's what I think, right, wrong, or indifferent. I'll tell you, I'll always start by saying, "Oh, let me tell you what I think. I don't know what it's right." And I think if we ever get to work together in any capacity and I commit to anything, I am both feet in and I'm not going to do something half-ass just to say I did it. And the day that I don't have the time or the resources or the capacity to continue on something, I'll be the first one to give up and say, hey, listen, I cannot do this anymore because I'm going to disappoint. If we were getting even deeper than this, on my tombstone, it'll say that I'm a nice guy, a good guy that tried really hard, that made a lot of friends, and he had a lot of fun doing it. And that's really, I think, the important part of it. If we can do all these things with a little smile and it's not all life and death, and it's— yes, it's work and it's business and it's serious and it's big, I always try to find that little angle that makes it more pleasurable. And that's what I try to do when I travel. I always look for things to do when I'm traveling and who I'm traveling with. And I also love, you know, my family, which is sort of the backbone of everything we do. Just very tight. As we were talking about the cultural, the Hispanic part of it, it's pretty neat how close we are to each other and how much we share and how much we depend on each other. Probably that I don't even know how much I depend and on everyone that, uh, that I've talked to that often.

You mentioned that you moved back into the CEO role from this self-appointed VP sales role that you mentioned you, you assigned yourself a few years ago. Now you're back in the CEO role. What, what part of the business intimidates you the most as CEO?

Human resources. I definitely have a hard time trying follow the rules or trying to make sure that we follow all the rules to the height of their extent of the legalities of the world. I was brought up as a humble beginnings of, hey, just go make things happen. And today the laws with which we have to operate, especially in the most wonderful state of California, really challenge some of the things that we want to do for the right reason. We want to do more for our employees. Always, we want to do more for our community, we want to do more for our industry. And sometimes they just grab you and say you can't because it's the law, or you can't because it's what we were told we can do because the insurance companies are driving and the bureaucrats are driving a lot of the decision-making. It really scares me. It scares me that one apple can ruin a lot of trees kind of thing. It's really that impactful. And so we have an amazing HR department, we have an amazing attorney. I mean, the fact that we have an attorney on retainer to help us with the changing landscape of employment is scary. I never thought that we'd have to get to that point. But, you know, you got to protect the assets, you got to protect the entire organization. You're feeding 110 lives and you never want to jeopardize that. But I really would love to shy away from any of those things. If I could, which we know we can't.

Well, and I think the sign of a good leader is A, recognizing you're not good at everything, and number 2 is being able to surround yourself with people who can fill in the gaps. That's the sign of, I think, a successful CEO/entrepreneur. And going back to 2008, I was actually thinking about this while you were talking. Think of the number of companies, big and small, in 2008 that just went totally belly up because they were not able to deal with the bank covenants or negotiating with suppliers or managing the loss of 30% of your business and then trying to adjust for it on the cost side. Those are some pretty serious things that I think would intimidate most normal CEOs and probably intimidated you, but you've surrounded yourself with great people that are maybe better and maybe more experienced in some of those areas and you leaned on them during those times. I think the people that don't surround themselves with people that have skill sets that are complementary are the ones that ultimately just look at this stuff and say, I can't deal with it anymore. I have no option but to shut this business down. So, that's my read of it whether I'm right or wrong.

I think you're right on. And, I think that if you look at your businesses and the people that you have and why you have them, we're not perfect. No one's perfect. We all have our boundaries of what we like to do and what we do better. And yeah, even though sometimes it's the most expensive thing you ever do, but if it allows you to live a few more years and to live a better lifestyle while you're doing it, I am all for it. And if there's somebody out there that has a skill set that they think they can make our company better, come on over and let's talk because we're always seeking. Even though we think we got most of the answers, there's so many more that we got to figure out and the world's moving quickly and we got to move with it. Memo, you—

anyone that's hung out with you knows that you love to savor life, to squeeze the marrow out of life all that you can. You talk about it, you'll express it. It's probably just so natural to you, you don't even think about it. There's a lot of young entrepreneurs that are wanting to see the kind of success that you have now that listen to this program. Looking back, to a young Memo Cohn, what would you tell that young Memo that would help him navigate to where you're at today in terms of this equilibrium that you have and this success? What would you tell the young entrepreneur or the young Memo Cohn? Would you change?

Probably a little bit, but I mean, I'm always a little conflicted with, uh, my dad was an entrepreneur and he He was my best friend and he really guided me through a lot of things. He was always very cautious and I've always been very optimistic.

Does that also mean brazen, a little more brazen? Did that make you a little more reckless?

I don't think he was reckless because I do think things through before I say them or before I do them, but I would push the envelope a lot more than he would have liked to in some instances. Again, he grew up in a more conservative in a more conservative environment. But I think that if I were to go back and think about what we did and how we did it, it was just the ex— I really think and believe this, and it might sound like bullshit and it's really not. I think it was just the exuberance to try things out and try to make them successful. I was about to say the word hope. In 2009, we barred the word hope from our buildings. And so it's not ever about hope. It's about trying to have a vision and the passion. And then, you know, you gotta have a plan and you gotta write down the plan and you have to figure out when your plan's not working, when you gotta make the next turn the other direction because you're about to fall off the cliff. You know, it's just trial and error. You know, we all went to school and they taught us a lot of things, I think this thing called business and entrepreneurship, I mean, you can do it any, any which way you want. So how is it going to be better represented by what you think or by what other people think? And then you got to try it and then it's got to work. Otherwise you're not going to be around for very long and you got to be open to people telling you that you're wrong and once in a while listening to that because most of the time they are going to be right. And then you just got to be successful because if we were not successful, we would not be having this conversation. I guess I wouldn't be so exuberant and so happy with life the way that I usually am. But it's hard work and it's pretty amazing that I am as exuberant as I am with all the stuff that we do every day. And somehow I love it and I love the energy that it causes me. And, and again, it's all about the people I've surrounded myself with, both in our company, in my friendships, in our competitors, and I our supply chain, it's, uh, it's pretty neat, the sort of the cards we were dealt. And I think we learned how to play the game fairly well.

Yeah, you know, people say it's a relationship business, and you've always put a high value on that. There's something to that that speaks of your success. I can't quite get my mind around it, but it's interesting to me. And I don't think it's just black and white as relationships and mineral values relationships. I think you do to such an intense degree that it has a lot to do with your success through the years. The industry has really changed from when you started in 1998. Actually, when you started Promo Shop, but when you started before, it was a completely different business. It's so much more complex now. It's become a flat world. You're dealing with far more worldwide projects and implications and resources. On one hand, it's been incredible. It's an incredible opportunity. Opportunity. On the other hand, we've never seen greater challenges. What's your outlook on the business and what do you think of the future of the business? And a question sort of buried inside that: what worries you about the future of the business and what excites you about it?

What worries me is consolidation, and what excites me is consolidation on both sides. It really does, because if you— if you— again, if you see what's happened in other industries. And again, we were talking the other day and I mentioned, look at what happened to the marketing industry, to the big ad agencies and things. And if we were to look back at what happened with all of them, I think we're about 10 years behind them. It's really simple, right? Everyone has similar offerings. Everyone has access to the same products. Everyone has access to the same talent pool and technology and things like that. And so when you look in the mirror, why are you any different than the last one or the next one, right? And so then we dig a little deeper and start talking about, well, our creative is better than their creative. No, it's not. Our people are nicer. No, we're not. But at the end of the day, why is somebody talking to us versus somebody else? And so when I sit with our crew, I talk about working harder than the next guy and then working smarter than the next guy and then giving you the tools that might differentiate you, although everyone now has all the And so what's it going to look like? I think there's going to be less companies. I think there's going to be in the US, there's going to be more global companies. I think the Amazons and the Walmarts and the Targets of the world that now have all these online platforms, I love that they're doing that because it gives the industry visibility that there is an industry. I love for imprints, commercials, both on the radio and on TV that validate that we're a serious business and we do serious offerings and people are willing to spend money to teach the world that we exist. And I think that there's going to be, you know, there's going to be 10 really large companies out there. And maybe instead of having 25,000 other companies, there might be 20,000. I believe that the small companies are going to have to change their ways of going to market. Otherwise, they won't be able to survive just with the compliance needs and with compliance requirements from the clients and from the suppliers. I believe that the mid-sized companies have amazing decisions to be made about what they want to do when they grow up. Are they going to grow up or are they going to stay static? And I would say static is not a good thing, but you might want to retreat a little bit and become a little smaller. But at medium size, and when I say medium, probably $10 to $20 million. And then I think companies like ours that are above the $40 million I think we have a real good opportunity to continue to differentiate and to continue to add services that our clients might want by doing it a little bit different and not with hundreds of salespeople, but with a very defined sales force that can continue to be trained and messaged and that they can go and tell the story. That's what I think. Yes, I'm a little bit concerned about tariffs like the rest of the world is, but A wise man once said, if they're doing it to everyone else, then we're all in the same game. And yeah, we got to start looking at other places besides China. And I know a lot of us have mobilized already, started finding other places in Southeast Asia and South America to try to figure out how we can do that better. I would love for the community to continue to share these types of things and for the industry to continue to work as an industry and not as individuals. And I think together we can actually make a difference and we can probably all grow and be successful and show the world that promotional products is a legitimate need in the marketing space and that everyone should promote via a tangible giveaway. And I think we still have to have a lot of fun and continue to, to work really hard. And if we can accomplish all that, I think in 5, 10 years when we're hopefully having the same conversation, we're going to go, wow, we're still here and we're doing it our way still, and that would be pretty cool.

Yeah, it's funny how Promo Shop has a very highly respected brand, and I can hear the struggle in your voice as you talk about the need to differentiate, and yet in the same sentence you also say how much we're all the same. How do you recommend entrepreneurs differentiate themselves in this business, and where is Memocon putting resources to further do that? Is that in the compliance side? Is that technology side? Is that infrastructure backbone of your business? Is it in your salespeople? Where are you finding that point of differentiation?

I mean, I think it's all of the above because at this stage and at our size and the clients we're servicing, you have to have everything, otherwise they won't look at you, right? And so to that entrepreneur, I would say figure out what you want to be like, smell like, look like, and talk like And then figure out what do you need to accomplish all those things. Hopefully you'll realize quickly that you cannot be everything to everyone and you cannot do it all, at which time you start surrounding yourself with people that can make your life better and can give you a little bit of a breather so you can focus on revenue enhancement, as we call it here. And be very patient, be very lucky, and be nice to everyone. You know, you never know who you're gonna need one day. So if you can just be nice and thoughtful and don't make it all about you, make it more about them and be a great listener instead of always wanting to say what you want to say, I think it just sort of works really, really nicely and people will start calling you instead of you calling them. Then you know that you got something different, special, and hopefully you can make it your own.

Memo, this is This has been a great conversation. Thanks for taking the time to visit with us.

I'm honored to be part of this, and, uh, thank you so much.

Thanks so much for tuning into this episode of SKU Cast. Be sure to keep up with our latest content by subscribing to SKU Cast on iTunes or to our blog at community.comonsku.com. Until next time, friends, thanks so much for listening.

Mm-hmm.