COVID-19 put the world on a halt and we continue to struggle with it today. Despite the challenges, it also opened up a lot of opportunities, and an entrepreneur’s key to success in this pandemic is taking advantage of these wins. Chris Webb sits down with Louis David Spagnuolo, CEO of Illuminati Trust, LLC, to talk about leveraging the convenience of remote setup in business scaling, building resilience in these challenging times, and the right way to live with negativity all around you. He also shares his secrets on managing his team and finding that straight path towards success. From keeping business processes simple, focusing even on your smallest dreams, to appreciating even your greatest failures, Louis unravels the most important pointers every modern business owner must take to heart.
Louis David Spagnuolo: How To Build Your Team And Achieve Success During COVID-19
Welcome to the MF Podcast where we’ve taken a step back in a world full of sugar-coated conversations, idealistic narratives, and specific agendas. We instead take real people and talk with real topics, honest opinions, and advice. Sit back as we get through the bureaucracy and get down to the real shit.
I’m doing great. Nice to meet you. Thanks for having me.
How is life in the Southeast?
Life in the Southeast is great if we could get rid of this COVID. It’s what it comes down to. Besides that, it’s been pretty good.
This COVID thing is hitting us hard.
Where are you based out of?
Northwestern Washington. We’ve stretched out quite a bit on the US on this one.
The world has changed so much. I think everything has become a Zoom meeting.
You can be anywhere.
It’s crazy. There’s no more person-to-person meeting. I don’t get on planes anymore to go meet with people. We don’t do business dinners anymore. Everything was Zoom.
The work of ambitious entrepreneurs does not stop and is always rolling 24/7.
I was talking to Chris too. He mentioned the lanyards. I was like, “The ACG events, CFA events, and everything that I used to do was my work.” Everything is Zoom meetings. It’s crazy.
There are no conferences, seminars, and symposiums. It’s an isolated world that’s become.
You can live anywhere and you’d be like, “I’m based in New York but I’m doing business somewhere in the Midwest.”
In my building where I am now, on Fridays, a lot of people don’t come in for whatever reason, especially during COVID. I’ll talk to the girl at the reception. I’ll be like, “How many people are here now?” She’ll say five. I’m in a twenty-storey office building. Five people have come to work.
You probably heard there was a massive campus built by REI just East of Seattle. They ended up selling it to Facebook. They finished it. It was a billion-dollar project. It’s a beautiful campus. They were like, “We’re going to let them work remotely.” Facebook was like, “Yes, we’ll take it pennies on the dollar.”
I walk around my building and I go days without seeing people. I was like, “This has got to be unhealthy.” This building used to have 500, 600 people working in it. This is crazy.
I think it’s helped us all be stronger. We had to dive into what works and create fluidity in our business. It gets down to the nuts and bolts.
We got to make a lot of changes. That’s for sure. A lot of these changes are going to stay. I don’t envision things are going back to pre-COVID levels. It’s going to stay like this because people have gotten used to working from home. They have changed their whole lifestyle so much. It’s going to be hard for them to change back.
I feel like companies that were stubborn in the past don’t let employees work remotely. They keep that culture. PitchBook Data where I come from but then we got bought by Morningstar, they were like that. They were like, “You have to work in the office.” They’re in Seattle, New York, London and San Francisco and they are 100% remote for the foreseeable future because they realized, “Not only can we do business this way but some people are more productive.” People have been talking to them. They were saying, “It’s less overhead.” It sucks about shutting down offices and it’s doing a lot to real estate.
It’s about stress as well because you don’t have to commute to work at home every day. You’re not fighting traffic. You’re not wasting gas. You’re not polluting the environment. All those things are now eliminated, which is incredible when you think about it. I used to work in Boca Raton. It used to take me about 45 minutes each way to go to work in the morning and the time that I leave. A lot of times, I’d be sitting in traffic after a hard day and be exhausted. Now, I don’t have to do that. That’s an hour and a half time that I saved in my life that I could be doing something else.
If you think about opportunity costs, that’s drastic when you look at that scale.
I think of that every day. You’re saving an hour and a half. That makes a big impact.
Not to mention the anxiety it does on your body, sitting in a car or on a train for hours, whatever it is.
It’s still fun to drive. Trust me. I like the cars and the whole thing but after you had a hard day and you’re sitting in bumper-to-bumper traffic, I don’t think it’s hard to think happy if that’s going on.
That’s what causes road rage where guys get out of their car and break other guys’ windows.
I lived in New York City and commuted on the subway from the Upper West Side down to Flatiron District every day. It was about an hour sometimes during rush hour, it’s packed like sardines. You always have this image of people on their phones doing business. They’re reading the newspaper. That was not the case. You’re shoulder to shoulder.
People do that for 30 years. I know guys who do that every day in the winter with their jackets in the snow taking the subway.
In the summer with the humidity, you know what I’m talking about. It’s so muggy. That subway platform is 150 degrees.
That guy now who’s allowed to work from home, do you think he’s going to want to go back on the train and commute back into the city?
No way. It’s the quality of life.
I’m starting to sweat thinking about the humidity crap you are talking about. I haven’t been on the East Side.
Once you open that box and everything comes out, it’s hard to put everything back in. That’s the thing with COVID. We open this gigantic box not just in the United States but the entire world. Now, the entire world is like, “Wait a second.” We’re going to see dramatic paradigm shifts when it comes to conducting business.
I think there’s going to be a lot of potential for growth too. Companies like Johnny and myself are looking at this consulting platform. Instead of being in this smaller box as more of an accepted platform, now it’s widely accepted. We’re reaching out to guys like you to have conversations that you probably would have jumped on. That’s not what I’m saying. At the end of the day, it’s harder to get ahold of people and connect with them on this type of platform.
It’s going to give more people opportunities. A lot of times what happens is people do business with companies that are huge companies because they feel that it’s a safe decision. They know when something goes wrong, their boss isn’t going to fire them because they’re going to be able to justify it. Whereas you go with a new company, startup or someone who’s getting going, if it doesn’t go good, the boss is going to say, “Why did you go with them? They don’t have a track record.” You could lose your job. Now, I feel like there are so many opportunities where it’s an accepted thing. You could be in your house, in your basement, or wherever. It’s just a question of, “What type of expertise and knowledge do you have? How much value could you add?” Those are the things that are going to start to matter.
You look at companies like Netflix and Reed Hastings saying, “We’re going to measure our employees on their output, not their input. It doesn’t matter how many hours a week you’re in the office, as long as you get your things done and you do well.”
I have a lot of computer programmer guys like in Accenture. They’re geniuses when it comes to programming languages and things like that but their social skills maybe aren’t as good as some of my other employees. I tell those guys, “I don’t care if you come to work in your pajamas. I don’t care if you come to work at 5:00 or 6:00 at night. I don’t care how you want to do it because I know you’re a different type of person. You live a different lifestyle and I accept that. All I care about is when the production needs to be there and the assignments need to get done, you need to get it done.” I think they liked that because not everybody is built to work from 9:00 to 5:00. Genetically, people have different needs, pleasures, and things like that. Some people are more effective working late at night for whatever reason. Other people are morning people. This whole COVID thing opened the door to that as well.
COVID-19: Remote working during the pandemic taught everyone to consider expertise and knowledge more than actual location.
Do you feel that’s been a critical means of a business to survive and thrive in these times for owners to shift to that mindset you’re talking about?
Definitely. I tell everybody all the time like everyone was always asking, “How much do you pay? How much money?” I was like, “You give me an unlimited amount of money. How much do you want to make?” Everybody wants to make $1 million a year. That’s the same answer for everybody. I said, “No problem. You can make $1 million a year.” They were like, “Really?” I was like, “Yes, you got to do this and this. If you’re able to accomplish that, you’re going to make $1 million.” They were like, “But that’s a lot of work.”
It’s like with success, everybody wants to see the top. Nobody wants to see the bottom.
I tell them all the opportunities. All I could do is give you the opportunity but it’s up to you to see how dedicated you are. Are you willing to work until 2:00, 3:00 in the morning? Are you willing not to go to that football game on a Sunday that everybody is going to? Are you willing not to watch your favorite TV show because you have to get something done? I usually make those sacrifices. That’s what it comes down to.
It’s exactly what it is. It’s a sacrifice. Constantly, people talk about this life-work balance. No matter how you want to look at it, that pendulum is going to swing. There isn’t a middle like, “I have a perfect work-life.” You got to give and take.
That’s make-believe that the whole balanced life. People have always said that to me. I’ve talked to a lot of friends and a lot of people I know and I think there are two categories. If you work at the post office or you’re working at Walmart or something, you can have a very balanced life. You have your four-week vacations and set schedule. You’re home every day at 5:00 no matter what and you can have a balanced life. If you’re an entrepreneur, ambitious, and trying to build something, there is no work-life balance. It’s 24 hours a day. It never stops.
We haven’t started on a structured system here but that brings me to where my vision is. We talk about that constant entrepreneurial attitude where you’re constantly grabbing at each piece that you’re working at and you funnel them all into this one schedule in a sense, per se. I’ve got things like property management. Johnny, I know you have properties. We’ve got different restaurants, development companies, and this consultant business. We’re trying to look at these other few businesses to get our hands into to help them grow but at the same time, taking minority shares in the company. One of the questions Johnny had, which was a great question. Johnny, I’ll let you ask it since we’re on this natural, personal conversation.
It’s essentially multiple roles. We’re wearing these different hats. How do you prioritize? You talk about the million-dollar thing. I’m like, “If I focus 100% of my time getting clients to this investment bank, I’m going to get great commissions. I’m going to do well but I’m trying to build this consulting practice and other things. I don’t have any people around to help make decisions for me.” In terms of that prioritization and delegating, what’s your thought process? How do you balance? You’ve got your hand in a lot of different things and a lot of different lines in the water. What’s your structure for reconciling?
It’s very simple. I asked myself one question and it solved the whole problem every time. I asked myself, “Is what I’m about to do going to move the needle in the direction I needed to get the result that I want?” If what I’m about to do is not going to move the needle, then it’s not going to be effective. A lot of people do work very hard but I tell them, “That’s nice that you work hard but I don’t care that you work hard. I need you to work effectively. If you’re working effectively, that means we’re getting results. I want you to work on things that make a difference that move the needle. You could get caught up working on all this minutia that doesn’t do anything and doesn’t get us closer to our goals. What did you accomplish?” I always ask myself, “What we’re about to embark on, is this going to move the needle or not? If it’s not going to move the needle enough in our direction to get that million dollars or whatever it may be, we got to pivot to something else.”
It reminds me of a quote. I helped this guy found a startup once. He always said, “Do not mistake being busy with being productive.” I love that. It still brings memories.
I have so many busy people in my life and I’m like, “In one hour, I could do this the entire week.” Half of his day was doing Rotisserie sports, trying to pick what players they want for the teams and the gambling. I was like, “That’s not what you do at work. Where do you come up with these things?” It’s crazy.
You talked about Rocky Balboa was saying something that impacted and changed your whole life. What was that?
This is one of my famous ones. I say it all the time because everybody wants to be a tough guy and they want to throw the punch but, “It’s not about how hard you get hit. It’s about how hard you could get hit and keep moving forward.” That’s how a winner is built. The winner’s built is when he gets hit, he gets back up and keeps moving forward. The guy who gets hits is usually the guy who quits. He’s great when he’s punching. When he’s knocking people out, he thinks he’s a star. All of a sudden, once he gets hit, like Mike Tyson always said, “Everybody is a tough guy until they get punched in the face.” Once they get punched in the face, they are not so tough anymore. That’s why I like the Rocky one, “It’s not how hard you get hit. It’s how hard you could get hit and keep moving forward.” That’s important.
Going to the gym, that’s exactly what you got to think about when you get into the cage. I call it the cage where you do the squats. I still struggle with that. I found with dumbbells and everything that I can focus but there’s a whole new set of focus when you get into the cage, the ring, or these placements in life. When you’re looking at all the diverse companies and you’re in this company now, you have to apply your focus 100% in that. The moment you start spiraling or squirreling, you’re ruined. You can’t apply the focus needed. Therefore, the efforts applied or getting back up in that fight are mute.
It’s funny that you said the gym because I go to the gym all the time. I see people who go to the gym every day who’s the same as me, same time and the same thing. They’re doing the exercises and giving 30% effort. They’re doing it but then once it gets heavy, they stop. They break maybe a tiny sweat or whatever. I was like, “Why are you going to the gym wasting all this time? If you’re going through this monotonous thing that’s not fun, there’s nothing exciting about going to the gym and you’re not giving it 100%, why even go?”
My wife is a bodybuilder. She says that stuff all the time. When I first started going, she was always telling me, “You’ve got more energy. Your brain saying is no. Your body has got so much more.” She was like, “Get your head right. Get in there.”
When you take that same concept and apply it to business, you become unstoppable.
When a winner is hit and falls to the ground, he gets back up and keeps moving forward.
The analogies and euphemisms between the whole boxing thing like how hard you get hit, that’s what shows you, “It’s not how hard you hit but how hard you can get hit.” It ties to if you look at businesses, not just hospitality, retail, and the obvious ones. You probably know a lot of small or medium-sized business owners who had gotten hit pretty hard. I’d love to hear from you about that with all the business owners you’ve talked to.
I’ll tell you another thing about that. When I talk to people, it’s funny. Even in our business because we’re so diversified and people ask me how business is, I tell them the truth. I could easily be like, “Business is great. It’s unbelievable or whatever.” You’re lying and the person will believe me but I say, “It’s been horrific. COVID has been horrific. We’ve never in the history of the world had four months where the entire world has shut down. That’s never happened.” You can’t tell me you’re having a good year if four months are completely erased. I don’t care what business you’re in. I don’t care if you’re in the hospitality or restaurant. Don’t give me that bullshit. I said, “Now is the time to pull back. Get as many chips as you can. Get as strong as you can and not look at going forward, building and trying to do this and trying to do that. Now is the time to huddle up and get your team together, so then when there’s a bloodbath when this whole thing eventually blows up, that’s when you could deploy your capital and steal all these assets. That’s what’s going to make a difference for you.”
COVID-19: If you go to the mirror every day saying how great you are, you will start to believe it after a while.
I was talking with my accountant and I was like, “Who can say something like, ‘Business has been great this year?” He was like, “There’s one person and it’s Jeff Bezos.”
We got eight billion other people.
Who the hell cares about Jeff? What about all these other people?
That’s what I’m saying. It’s like, “Come on.”
If Jeff got a divorce, he’s still more than everybody.
Look at everybody else. I don’t care what profession you’re in, even cars. I like exotic cars. I went to the dealership and they told me they’ve sold three cars since COVID. I was like, “You’ve sold three cars?” I won’t say the brand. It’s a nice brand but three cars. I was like, “How are you guys surviving?” They were like, “The only way we’re surviving is because our parent company has a lot of money and they’re continuing to fund it.” It has affected everything from A to Z. I don’t care what people try to tell me or try to put a spin on it. Besides Bezos and the people who make the Purell hand sanitizers, those are probably the only people that have done well on this thing.
It’s interesting you said you tell people the truth. One of our consulting business models is we cut through the bureaucracy. That’s one of the influences that made me want to contact you. I know in a lot of your podcasts and interviews, you’ve always beenstraight. You’ve 100% driven to the truth. A lot of times, these business owners get this sugar-coated consultant view or, “I’m going to tell you what you want to hear,” but yet guide on the backend. It creates this entire struggle. It’s counterproductive. Whereas if you come to the table like we had a conversation with a CEO and told him, “You’re not a CEO. You have too much inspiration, drive and motivation. You can’t tell people no. This is not your position. This placement and direction would help your company if we structure it this way.” Having those constructive, hard-tensioned conversations with people is what helps us all get to this next step. It makes us self-reflect, which brings me to one of my questions. What is your mirror talk?
People ask me that all the time. I grew up poor. I had to work hard, made a lot of mistakes and things like that. When I wake up in the morning, I say, “You’re like a loser. You got to get your stuff together. You got to get focused. You got to get dialed in.” I beat myself up for five minutes, convincing myself that I’m the worst on the planet. I then take out my iPhone. I’d put on Eye of the Tiger from Rocky and I say, “You’re the best. You’re the greatest.” I get so pumped up that I’m ready to go. The truth is if you go in the mirror every day saying how great you are, you start to believe it after a while. If you ever achieved some level of success, your ego could go crazy. One of the things I’ve always done is to keep myself grounded. I’ve always been my worst critic. I’ve always criticized myself so much. I do that to beat myself up and then I say, “Now, lift the person back up.”
You have those successes that yield other successes. You get those big wins and it’s like, “Yeah. You have your scotch and cigars.” A lot of people get complacent after they have a few big wins.
Their ego gets big. They start getting sloppy. They take their eye off the ball and start making poor decisions. I was afraid of that. When I first got my big influx of money, I was scared because I was like, “I’m going to go crazy. I don’t have the personality to be able to deal with this because I’ll spend all of it in one weekend. I’ll buy everything.” I have to put some checks and balances and some systems in place so that I’m protected. When I want to make a decision, I have three trustees that I have to run the decision by. They each have a vote. I have three votes. It’s like a system that we’re always safeguarded. If I want to do something crazy, they all vote no, I can’t do it. If they want me to do something, if I don’t like it, I don’t have to do it. It’s a nice balance to keep things in check.
It reminds me of when Shaq got his first $1 million. He was like, “I didn’t realize after-tax it was only $600,000 but I went out and spent it all and then got $80,000 in the hole.” A banker called and he was a family friend. He was like, “You got to read the bank statements.”
I tell people that all the time. Everybody asked me how to make $1 million a year. I remember the first time I made $1 million a year, I thought I was going to be rich. I was like, “I made $1 million a year. I got to be rich.” I was like, “I’m not rich. I don’t feel rich. This was like a scam or something like that.” I was supposed to be this millionaire and I could do whatever I want like out of a movie or something. As you said, I realized that the government is taking $400,000 of that money and then you have your lifestyle. To be at that level, you’re entertaining and doing things. At the end of the day, maybe you have $200,000 left so $400,000 doesn’t make you a millionaire.
One of the things I learned was I tried to keep cheating the system saying, “Let’s get to $2 million. Maybe $2 million work. Let’s get to $3 million. Maybe $3 million work.” I realized it doesn’t matter what your salary is. The salary is meaningless. The only thing that matters is building things and having liquidity events. When you have the liquidity event, you get that influx of cash all at once. That’s what moves the needle and changes your life. No amount of income is going to change your life. It’ll help you live comfortably. You can pay your bills. You can go out to dinner. Your wife will be happy. You’ll have low stress but you’re never going to get rich or wealthy by just working getting a paycheck. It’s impossible.
You’re speaking of those successful moments, that influx of cash and what’s going to make you feel comfortable and grow as an individual, what have been some of your big successes in life? Not only what has been then, but what have you felt? You talked about that when you hit that level, all of a sudden, your ego blows up. None of it gets you to lose. I’m sure your ego went a little up and then you corrected it.
I’m not going to lie. This is well-known because it’s been on different reviews with cars, jets and the things like that. I remember on a Thursday, I got a big influx of money hit my bank account. I went to the Ferrari dealership that weekend and bought five Ferraris all at once. What I realized was, “How do you get the cars home now?” We kept going back to the dealership to get another car and drive back. I had someone to drive it back. I didn’t realize it because I never had an experience like that. Once I realized my extreme personality was like that, that’s when I realized I had to put some checks and balances in. I made mistakes. At one time, I had 28 exotic cars. Every brand-new exotic car, I had it all. I was obsessed with that stuff.
People convinced me, “You should buy a private jet because you can put it on charter. You’ll break even and you still get the key a bit.” That was a complete lie. Don’t ever listen to anyone telling you that. Nobody breaks even on a private jet. I don’t care how efficient the engines are and how they have it set up. They had me brainwashed that I was like, “This is so awesome. It’s not going to cost me anything. I’m going to fly everywhere or whatever.” At the end of the day, I lost $800,000. Be careful who you listen to.
Isn’t it if it flies, floats or drives, you rent or lease it?
Exactly, 100%. The funny part now where we have a whole on-demand economy. If I want to go on a boat, I just do it on my iPhone, pick the boat I want and the boat is there. It’s the same thing with jet planes. Why would you invest capital and get committed to something when everything is on-demand?
You have that private jet company, the charter. How is that working out for you in this economy?
It took a gigantic hit during COVID. Everything took a hit during COVID. Now, it’s slowly coming back and we’re seeing new clients enter the market that typically wouldn’t because they’re looking at it from a safety standpoint. What people don’t realize is there are only about 14,000 people in the world who could afford to fly private. No one understands that. When they see celebrities on private jets, the celebrities aren’t paying for those jets. The movie studio or the record label is paying for it. There’s always someone else paying for it but it looks like it’s their jet when in reality, it’s not. There is only a small fraction of people who can fly private. What we’re finding now is the guy who’s maybe the successful entrepreneur who’s right at the cusp of flying private but wouldn’t, now he’s pushing it forward and saying, “Let me do it. I’ve gotten older in life. Let’s forget about this airport thing, my family, my kids, my wife, and this COVID.” We’re seeing more people enter the market. In 2021, we’ll be back at the same levels if not better.
That’s interesting that the influx increased. As you said, the older guys are getting to the point where they’re like, “Life is too short. Let’s live it while we still can.”
Especially when it comes to safety, they were like, “When I was 50, I take more chances but now I’m 70 and I have enough money to live on, let me get that private jet. Let me charter instead of taking American Airlines or whatever.” People are starting to realize life is temporary. Especially with all these people getting sick and dying in COVID, they were like, “I can wake up one day, get COVID and now I’m dead and my life is over.” It changed people’s focus and their mentality on things, realizing that everything is temporary and maybe we should start doing more for ourselves than we did in the past.
We’re reflecting, reorganizing, and restructuring our lives and making sure we’re going in the right direction or at least applying ourselves in areas where we want to apply them the most, which in certain situations are family and livelihood. What would you say to somebody like young entrepreneurs like Johnny and myself or even to other businesses out there that are trying to thrive and grow? They’re maybe making that $5 million to $10 million stretch where their company is going to make it over that hump under the next propelling unit. What would your conversation be?
As far as what? How will they take their company to the next level? How it relates to their family?
How it relates to their life in general. They stop focusing so much on acts and focused more on the drive or something.
It comes back to keeping things simple. I’ve always found it’s the most important. Everybody tries to complicate things. All you have to do in any situation that comes up in your life, you ask yourself, “Is what I’m about to do going to move the needle?” That’s important. Even in your personal life, if you’re going to do something with your wife and kids and go on vacation, “Is this going to move the needle enough to bring them enough joy and happiness to make it worthwhile?” That’s how I look at things. It’s telling my wife, “I got to go away for three weeks and bunker down because we have this client in Texas. I got to dedicate 24 hours a day to him. I need you to understand this is why I’m doing it. This is going to help me and the company. It’s going to move the needle. It’s going to put us in a better position.”
People get in trouble when they started doing things, nothing is materializing and they’re not getting closer to the finish line. That’s what I see a lot of people are doing. They’re working hard and they’re like, “I’m working hard.” I was like, “When you worked hard now, what five goals did you accomplish?” They can’t answer me. Another thing we use that I’ve talked about in the past too is we have this thing called The Top Five. I tell all my employees, I said, “Every day you get in the office, you get a yellow notepad. You write down in the notepad 1, 2, 3, 4, 5.” For number one, your list, “What’s the most important thing that I need to get done now that’s going to move the needle?” Not what’s the most important because I need to call this guy back because he’s mad or I need to book reservations for it tonight. What’s the most important thing that’s going to move the needle? That’s number one.
You go to number 2 then 3 then 4 then 5. If you could get those five things done by the end of the day, I tell them, “You could go home.” They looked at me like I’m crazy like, “We can really go home?” I was like, “If you get the five most important things that all move the needle, you could go home.” What they don’t realize is because they’re so focused on that and they’re getting so much more accomplished to like, “The simple little thing makes such a difference.” Instead of having to go home at 5:00, 6:00, they get to go home at 4:00 but they’ve accomplished so much more.
That boosts their confidence in general and then creates more productivity for them.
They get excited. They were like, “Let me get these five things done.” Every day when you build up five accomplishments and you get five victories, you’re getting closer to your personal finish line and the company’s finish line. You’re moving the needle.
I was in the insurance industry for quite some time. Before that, I was in the automotive industry. In the insurance industry and the automotive industry, I came to work and did that specific job, whether it was 5, 10, or 12 hours a day, whatever the time frame was. It was so scattered. I was constantly trying to put out those fires, you don’t feel that productive side. You go home and you’re like, “Yes, I got all that done.”
COVID-19: People get in trouble when they start doing things and nothing’s materializing, making it hard for them to reach the finish line.
You worked like a slave but you have nothing to show for it. It’s 90% of the people. That’s what I’m trying to say. Before you start your day, no matter what’s going on, who’s blowing you up, leaving you voicemails or text messages, you got to write down the five things that are important to you, not to anybody else but to you to get accomplished. Once you get those five things done, if you want to fool around and answer someone’s phone call or their text message or they want to talk to you in the coffee room, then you could do it. Get your five things done because then when you drive home, you’ll say, “I’m five steps closer to my goal.”
I love keeping it simple. Less is more.
It’s so true. People try to make it complicated. I always say, “Keep it very simple. If it’s simple, you can do it consistently.” Consistency is the key. Anybody could do something good once in a while but to do things great all the time, you need greatness to be consistent. That’s what’s important.
I will have to say though that making the transition from that hourly-based job or a commission-based job to jumping into doing your own business, that took me years to come up with the guts to do it. I diversified and created these side incomes. That was stressful in itself. As you can attest to it, making that initial jump is scary. Some people look at it and say, “They just ran into that or fell into that.” No, that’s bullshit. I didn’t fall into this. This is scary.
I’m going to give you some more bad news. With these things going, you’re going to get even more scared. Every day I come to work, I’m scared. People are asking me and I’m like, “I’m petrified the taxes are going to go to 49%. I’m worried that the stock market is going to crash.” I’m scared of these things because I know we’re going to have a dynamic change in the way governments run. That’s going to start affecting a lot of people so I need to start preparing for it. I’m stressed out. No matter how much money I’m bringing in, how good things are going or however it is, there’s always a threat that can wipe you out. I’m always stressed about that.
The stress that you had to go through and experience, you’re going to go through it ten times more. You’re going to remember it. I remember this guy who told me it was going to be even worse. He was like, “Someday maybe you’ll be selling your company and they’ll be offering you $50 million.” You’ll be like, “It’s worth $60 million. What should we do?” You’re trying to make a decision because $50 million is life-changing money but you know it’s worth $60 million. If you tell them, “No, we’re not going to take the $50 million and you never do,” that stress is unimaginable. You’re going do that someday and then you’re going to be transitioning from hourly to my own company. That wasn’t so bad when I look back on that.
This is the moment that you see the chair spin on the picture and I’m gone.
It doesn’t matter what your salary is. It all boils down to building things and having liquidity events.
That wasn’t that bad. Trust me. The bad news is it’s going to get more stressful.
Get comfortable being uncomfortable.
That’s the reality. I try to tell people the truth because they don’t want to hear that. They think once you have your business, you’re doing good. It’s like you’re in Disney World all day or something. You drive around your little car and you say hi to everybody. That’s make-believe. I’ve never met a real business person like legit who’s not been under a ton of stress and has had to work extremely hard. I know guys who are exceptional lawyers who do criminal defense and they represent narco drug dealers from Mexico. They’re under crazy amounts of pressure. Maybe they make $10 million a year but they’re under life-and-death situations. It doesn’t go away. You have to take your situation. You take your lemons and make them into lemonade regardless of what the situation is.
That comes to the next point. It’s not just yourself and your surrounding family. It’s the families that you’re employing that brings on that load of stress where you’re going, “If this doesn’t happen, this 49% taxes, how do I decide who gets laid off? How do we restructure our company to bring out the liquid or the nets and put them back into the employees?”
Imagine I’m sitting home, COVID comes and the president comes on saying, “We’re going to shut down all year,” which never happened in history. “We’re already shutting down all of Asia. No one is from the United States anymore. We’re going to close up everything. No one is going to leave your house now. We’re going to do this for four months.” If you’ve got 3,000 employees calling you saying, “Are we going back to work on Monday? What are we going to do? I got to pay my mortgage.” I spent four months like a glorified babysitter listening and saying, “It’s going to be okay.” The truth is I didn’t know if it was going to be okay but I had to tell them that because I didn’t know if it was going to last 4, 6, 10, 50 weeks. Nobody knew at the time but. I did know that you had to stay positive and we had to stay focused. I knew if we stay calm and focused, we’d find a way to get out of this. That’s what’s happened.
It’s keeping that Eye of the Tiger plan.
You got to move forward. It’s the Rocky thing, “It’s not how hard you get hit. It’s how hard you could get hit and keep moving forward.” COVID hit me pretty hard. I’ve never been hit so hard as would COVID. Nothing is even close. Nothing has ever been a situation where for four months, every business has zero revenue. I never thought that would even be possible in the whole world and the shutdown. How could anybody prepare for that? How can anybody say, “I was prepared for this?” It’s impossible.
You’re a positive kind of guy. You’d like to keep things positive. That’s the way I think. My thinking is like, “We know when their thinking is right, the facts don’t count. Keep that motivated, positive train of thought.” People are going to tell you no all day long. In this situation, you kept getting hit with email after email or constant people saying, “COVID this. COVID that.” Did you ever get sick and tired of it and say, “Guys, stop thinking about the now and move forward?”
I was sick and tired of it from March until now. I’m like, “What are we going to do? It’s taken over the whole world. It’s a challenge that we have.” What happens is I wake up every day super positive. You’re right. I am a super positive person. The problem is if everybody around you is negative, no matter how positive you are, that energy impacts you. That’s what creates a lot of the issues. People don’t realize how many people are suffering, how many hardworking people who want their waitress job back or want to wash dishes and have that back or want to be a movie theater chaperone to chaperone to your seats to go to the movies. Those are simple things that we shouldn’t take for granted. Those people aren’t working, they have no income but they still have all their bills. How are they supposed to be happy? It’s impossible. Those exterior factors influence everybody. I don’t know how you could say it hasn’t impacted you in one way or another.
Everybody has been impacted. Even as much as we said, Jeff Bezos. He’s had that impact, bottom line. No matter what his net growth, it doesn’t matter. He’s had those stressful meetings, sitting there sweating and going crap, “What do I do?”
I can tell you something for a fact. They’re not hearsay. He’s the richest man in the world. There’s no question about it. Believe me, the past year or two for that guy has been a nightmare. Don’t think that he doesn’t have problems, he doesn’t throw chairs against the wall or he doesn’t get mad. Trust me when I tell you. When you’re getting blackmailed by the National Enquirer that they’re going to show nude pictures of you, you’re stressing out. He has this Walt Disney World life because he’s rich. That’s nice that he’s rich but that guy’s got a million problems too.
A lot of CEOs told me, “Do you want to be successful?” They go, “It gets windier the higher you climb. At the top, it’s the windiest.”
That goes without saying that you guys made the transition from employees to your own companies. I go, “Wait, it’s going to get worse.” You’re then going to feel it and you’d be like, “Wow, this is tough.” The funny thing is as time goes on, you start to realize, “A disaster happens. I’m going to fix it.” You stay calmer. I know every day when I wake up and my foot hits the floor when I got out of bed, I know I’m going to have 40 problems. I know this. Every day, no matter what, I’m going to have 40 problems no matter how you slice it. I’m prepared for that and I take them systematically one at a time. We address them. I know by the end of the day, they’re all going to get solved.
Initially, when I was younger, I would get overwhelmed. I’d be like, “This is too many problems. It’s too much to deal with. How could we have problems every day? How could this be happening every day? How does it happen?” That would get me off my focus. Eventually, I learned there are always going to be challenged. There’s always going to be stress. More money, more problems. It’s the truth of it. The more money you get and the more success, the problem is expanding because the responsibility expands. It’s a question of adapting and learning how to go to different levels.
COVID-19: The more money and success you get, the bigger problems you have to encounter.
I came to a point of a big transitional period in my life. Someday we’ll do an episode on my different transitions. As much as our mental influence on our body is so impactful, I took out the word problems out of my vocabulary. I started replacing it with challenges, situations, or opportunities. I’m a guy who loves challenges. I grasp onto situations and constantly look for opportunities. What I’ve found is you were talking about that center of influence and all the negative energy around us. It puts so much pressure on us like a vice.
When I placed myself in the situation where I’m going, “I don’t have any problems. I have these challenges, situations, opportunities,” maybe it’s chipping at an iceberg but I started slowly finding myself getting excited about the day and things that were thrown at me. I no longer looked at it as what the world perceives a problem is a negative thing. I look at it as a challenge and I’m going, “I’m on. Let’s do this. Let’s figure this out.” At the end of the day, no matter whose fault it is per se, we’re going to make it through it. We’re going to live tomorrow. We’re going to grow. We’re going to keep being positive and motivated. Sometimes it’s not so positive, but you know what I mean.
I get made fun of with this a lot because I never say problems. I always say challenges, whether it’s my family who gives me a hard time or my employees. One time that comes to mind was one summer we went on a vacation. We decided to go to Croatia. We had a vacation and we were leaving. We were at the airport, ready to fly back to the United States. They told us that one of the people who were with my stepson wasn’t going to be allowed to fly back and he was going to get detained. They came to me and my family freaked out saying, “We have a massive problem.” I was like, “Relax, we have a little challenge. We’ll take care of this.” They were like, “Challenge? How do you call this a challenge? We can’t get on the plane. We’re stuck. We’re in another country.” I was like, “It’s a challenge. We’ll find a solution and get past it.” They thought I was completely crazy. If you look at it like you were saying that way, you can look at everything in life as a problem or you could look at it as a challenge that you’re going to overcome. That’s going to help you be more successful.
When you’re thinking is right, the facts don’t count. You drive that forward motion and get through it. I agree 100%. Louis, I appreciate all your time that you’ve given us. Honestly, the conversation has been super fluid. There’s no structure at all as I said in our show.
That’s the blast because it’s real. I had no prepared answers. I had no bullshit to tell you. I had nothing to sell. I don’t have any page or seminars. I just want to make a contribution and help people. That’s it. That’s all my focus is. Normally, you don’t see that often. That’s why when people see it, they get a little startled.
Genuine curiosity is always going to yield the most exciting dialogue. Chris and I had a lot of questions for you but we didn’t have a script. We were like, “I just want to meet this guy, see what he’s like and see where the conversation goes.”
That’s the best way to do it because it’s the most natural. Everything becomes so robotic. It’s almost like these answers don’t even make sense. It’s like someone read this out of a book. One of the things before we go, everyone tells me in business, “You got to think big in business. You got to do everything big.” I was like, “That’s the stupidest thing I’ve ever heard in my life. Whoever came up with think big should go straight to hell or something.” When you’re in business and you think big, you’re setting yourself up for disaster. What you should do is you should think small, build up victories and then dream big. Have a big dream of where you want to go. When you want to think about things, think about things you can accomplish. You could get to the finish line and start building momentum. You get one victory after another victory.
I see people all the time, maybe they’re making $75,000 a year and they’re like, “I got to think big so next year, I got to make $1 million.” I’m like, “Let me explain to you how this works.” Nobody on the planet goes from $75,000 a year to $1 million. You’re setting yourself up for a disaster. You’re going to disappoint yourself. Instead, you say, “What do I have to do to get to $150,000?” You’ve got to accomplish that goal. When you’re at $150,000, you say, “How do I get to $300,000?” You’ve got to accomplish that goal. Now, you start building momentum. You’re starting to get confident and happy. Once you get to $600,000, you’re like, “$1 million is right there. I could see it.” I’m like, “I could grab $1 million at this point.” Now, you’ve reached it but you can’t mentally in your brain believe that you could go from one level to such a high extreme. That’s where people get themselves in trouble.
It stretches out to a whole different platform when you think of it that way.
Think small and think about getting small victories and building them up. You’ll see those small victories turn into big wins.
It’s interesting we’re talking about the small victories. That goes back to your original story, the battery story. How in the world did you work that out?
I was trying so hard. I couldn’t pay my electricity bill. We had no food. I had a cell phone and I got so mad. I threw it against the wall as hard as I could and it shattered into 1,000 pieces. I picked it up realizing, “I can’t believe I broke my cellphone, and now I can’t even buy a new one.” I couldn’t believe I did this. I found on the floor these little black AAA batteries. I was like, “I wonder where these batteries go.” I realized that the little plastic battery holder had five AAA batteries in it and then you would slide it into the phone. I was like, “How could this cost $175? This doesn’t add up to me.” One thing led to another and I sent some samples over to China. We ended up making them for $3.80.
What happened was I was naive because I was a young kid. I was like, “I’m going to sell them to all the stores in the United States.” What I didn’t realize was Motorola and all the big companies were like, “There’s no way we’re going to let you sell the same product for half the price we’re charging.” What they told the stores was, “You can’t buy it from this person or we’re going to shut your contract off.” I said, “What do we do?” I said, “What if we go to a market that is into the flashiness and maybe isn’t as structured?” That was South America. That’s how the whole thing grew. It was a small little victory starting with that and then we went to the card adapters and chargers. We started small. We started with one phone with five batteries that we’d sell for $75 versus $175. That was it. We weren’t planning on taking over the world. We weren’t trying to be Motorola. We wanted to get a small victory. That small victory led to many more.
I remember when I first heard you explained that over an interview, I was like, “He threw his phone, so he’s the guy that throws the chairs. I like this guy.”
I’m not afraid to admit it. I’ve thrown the chairs. I punched the walls. I’m a regular person. I’m not a robot that says everything perfect. I have bad days. Not every day is sunshine and rainbows. Some days we struggled through but then that makes you appreciate the good days more.
Sometimes you work until 2:00, 3:00 in the morning, and get back up at 4:00.
The higher you climb, the windier it will be at the top.
That’s what it’s all about. You look at Tesla. Everybody is in love with Tesla. Elon Musk came out saying they were 30 days away from bankruptcy. What people don’t realize is he was in an office, on a couch sleeping there for three months, not going home, working 24 hours a day on the assembly lines. People thought he was going to die because he started getting psychotic. He couldn’t even think straight but he did whatever he had to do to make sure that thing stayed alive. That’s where people sometimes forget that you’re not the only one who’s up until 2:00 in the morning and then has to wake up at 4:00. You’re not the only person who’s ever done that. A lot of people have had to do that and it’s a painful success. Success isn’t easy. If it was easy, everybody would be successful. The pain that you’re going through should give you more confidence to know that you’re going in the right direction.
I was talking to my wife and we were talking about, “The more people you have coming at you from every direction, the more you know you’re on the right path.” People want to see you successful. They just don’t want to see you that successful.
Even with haters and when people talk about the hater thing, to me, I’m about love. I want everyone to. I want you to do unbelievable. Everyone I come in contact with, I want them to do unbelievable because it makes me happy and it lifts me up, but then you have people who are haters, who want to hate on people. I say it all the time, “A person who’s successful is never a hater because they don’t have time for hate. They’re focused on their goals. The person who’s a hater is always the person who’s unsuccessful.” The more people who hate me, you or whoever, it doesn’t matter. I laugh about it. Those people don’t pay my bills. They don’t impact my life. All they do is take the time out of their day to think about me. I’m not thinking about them.
I love that they’re thinking about me.
That’s why you got to turn it around and use it as a blessing because some haters have a negative impact on them. I tell them, I’m like, “No, you should be grateful.”
Johnny, you said you had one more question about pivoting. Did you want to ask that?
We covered it already. You were talking about in terms of business owners who you’ve talked to, what have been some unique pivots that you’ve seen that not only helped them survive the economy we’ve been in but thrive?
I like studying pivots but it’s funny because I had a whole little term for that too. I call it recalibrations. What I say is, “A lot of times in business, if things aren’t going right, you have to first retreat.” You have to pull back. People don’t want to do that. That’s not a comfortable thing. They don’t want to admit they’re wrong. They don’t want to pull back. You got to pull back then you got to recalibrate. You’re missing the target because you’re not winning. You’ve got to recalibrate, re-aim, and then re-engage. That’s what I think is important because sometimes people get so obsessed with the original idea they have and it’s not working. I’m like, “You got to retreat then you got to recalibrate to figure out what’s not working and then re-engage. If it doesn’t work then you try it again. At least, you’re getting closer to that target every time.”
There have been so many companies that have had to do that. We’ve talked about Netflix. People don’t realize Netflix used to be a company that sold DVDs. What they would do is they try to compete against Blockbuster video and they would mail you the DVD. You would watch it and then you’d have to mail it back to them. That was their business model. They were losing more money than they could have made. People couldn’t mail it back and keep the DVD. The DVD would be gone for a month. They’d have to buy another one. It was a complete fiasco. All of a sudden, they started seeing, “We have this 3G and this internet and this 4G. Now, we have 5G. What if the movies are able to go through the internet?” That’s when everything changed when they realized they could do that. They had a great concept. The problem was the distribution of selling that product was flawed, but once they were able to distribute it digitally, it became super successful. They had a great idea but the distribution wasn’t there.
I tell people the two most important things in a business are sales and distribution. That’s it. Those are the only two things that matter. If you have a ton of sales and you have great distribution, you’ll never go out of business. No one’s ever gone out of a business because they’re selling too many products. No one’s ever been able to do that but people get so focused on HR or, “Let’s talk about meetings. Let’s talk about this or that.” It’s focusing everything on sales and it’ll all work out, but people don’t do that because they don’t want to move the needle. They want to fool around with all this other stuff, “Let’s do a 5K run for charity.” That’s not going to help you. You got to focus on things that are going to get you to that goal.
You move on and keep going. Keep that focus. Get your head right, just like the gym or boxing. In recalibration, I use an analogy all the time in archery. When you put your arrow in the bow, that’s typically your challenge. It’s trying to get it lined up appropriately. When you play the drawback, people often think of the drawback as, “Shit, I’m taking six steps back. What am I going to do?” The drawback is launching farther forward and hit your target. You got to be in this position on the bow appropriately in order to draw back, throw it, and get to your targets.
That’s exactly what it is. You pull it back, make sure you get the aim, and then you’re launching it. Some people want to get the bow and they just pull it and shoot it. They’re like, “No, I didn’t hit the target.”
Although sometimes when I try to hit the target, it’s not there. I don’t know what happened. It must be the wind. It’s not my fault.
You recalibrate. That’s the thing. If you’re off a little to the right then you know, “Next time, I got to aim a little more to the left.” That’s the concept. Once you have the concept then you can make the adjustments.
I’ve always said, “It’s not about making the right decisions. It’s about making the decisions right once you’ve made them.” Don’t just make that, “This is the idea I’m going to stick to.” You got to pull back, retool that idea and then execute again.
The only thing you should marry to in life is your wife. That’s it. I don’t think you’d be married to decisions. I see so many people who are married to decisions and they ended up getting divorced in their business world. It blows up because they can’t get their mind off that maybe they were incorrect in what they were thinking. It could be you’re selling wine and you think it should sell for $39 for the bottle. People aren’t buying it at $39. Maybe if you sold it at $19, you would get more sales but they’re so married to that price because they think their product is so good. They end up going out of business because their ego is so big, they won’t change it to the $19.
COVID-19: If you have a ton of sales and have great distribution, you’ll never go out of business.
I see that all the time. That’s why I tell people, “Always go into things that you’re the dumbest person. If you’re the dumbest person, you’re going to have a big advantage. The only persons who are smart are your customers. They’re the only smart people in your organization.” Everybody else has to think they’re dumb and say, “Let’s see what the customer thinks this product is worth. What they tell us, that’s what we’re going to sell it for.” You recalibrate in your own head, they’ll pick out the number. I can never understand that.
That’s why anytime we launch a new product, I pay people. I’ll give them $100. I’ll give them a Starbucks gift card. I’ll get twenty people and say, “Taste this wine. Tell me what you think. How much would you pay for it? How much would you buy it? Would you buy it now?” They tell me. If they’re all saying it’s worth $19 and my marketing guy is saying, “We should sell it for $70,” I’m like, “You’re not right.” The customers are the only ones who know the answers. People get married to decisions and they shouldn’t.
Reverse engineering is the most important aspect. A lot of businesses, all they do is think about their internal workings, “We’re going to create a sales process. We’re going to create this product based on what we feel.” That has nothing to do with your relevancy. It’s completely out the window.
The best way to do it is to call your number one target customer and say, “We’re thinking about building X. How would it be ideal for you for us to build it?” They would say, “Make sure it has this option, this component, this thing.” You go back and build it. You sell a ton of them. Why are you trying to read someone’s mind? That doesn’t make sense to me.
That’s what keeps Johnny and myself in business is people think that way. They don’t think about reverse engineering, how it impacts the end-user and what the end-user wants.
You could apply it to any business. You can have a restaurant or a bar. You give someone a free entrée and say, “What do you think of it? Did you like it? Did you not like it? What did you not like? How much do you think would you sell it for?” They’re going to give you all the answers for free. You just have to make the effort to do it.
Louis, I’m not kidding you. I could sit here for hours talking to you. You got great information.
Maybe we’ll do a part two eventually after this COVID is over.
You got a lot of diversity. Your knowledge is extensive. We’re very much appreciative of your time.
Have a great day. I’m grateful. I wish all of you the best.
Thank you so much for your time, Louis. It’s great to meet you.