Atul shares his journey from an accountant with no work prospects to an international entrepreneur.
We have all heard how hard it is to be an entrepreneur. Atul's story isn't that different than many of the stories we know of the legendary immigrants who start with nothing but somehow find a way to realize the American dream. We try to dig a little deeper in this conversation though. We want to know what it feels like at those critical crossroads of life and business. We talk about what makes for those extreme highs and extreme lows. Atul talks about how critical building trust is as success ingredient, and how to do that while at the same time being smart with risk. He shares some of his most important realizations for growing the business past the ceilings and obstacles that threatened to keep his business small, or even destroy his reputation. Be sure to check out his book too; Underdog Thinking.
Get in touch:
MARK: www.linkedin.com/in/markhleary | www.leary.cc
ATUL: AtulVir.com | atul@equatorappliances.com
Production credit:
Engineering / Post-Production: Leo Medley
Art / Design: Immanuel Ahiable
GET IN TOUCH:
MARK LEARY:
www.linkedin.com/in/markhleary
www.leary.cc
ATUL VIR:
https://www.linkedin.com/in/atulvir/
https://www.atulvir.com/
Production credit:
Engineering / Post-Production: Leo Medley
Art / Design: Immanuel Ahiable
March 10, 2020, Wednesday
SUMMARY KEYWORDS
people, entrepreneurs, customer, washing machines, company, product, thinking, business, money, problem, machine, big, process, supplier, hear, build, buy, risk, book, world
SPEAKERS
Mark Leary, Mark
Mark Leary 00:00
So we're rolling, cool. We are live.
Mark 00:03
This is you're doing it wrong with
00:04
Mark Henderson Leary and my name is Mark and I have a passion that you should feel in control of your life. And so I want to help entrepreneurial leaders feel more in control of their business.
Mark 00:14
And so today we are here with a tool via an old friend of mine, a guy I haven't talked to in a long time at super accomplished super experienced entrepreneur with just a ton of life lessons. In fact, just wrote a book that that I'm excited to learn more about. How you doing my
00:33
friend, buddy? Good, Mark. I'm glad to be here. Thank you for the invite.
Mark 00:38
I'm super privileged. And I'm super excited cuz you and I have not talked in several months in the last time we spoke, I think it was before this is coming out. And I want to get I want to get caught up. So you know, how's it been? How's that? How's the book been received? or what have you learned and what what's going on
00:53
with the book has been received? Well, I've got a number of good reviews, and they're printed in the book and also on my website. So some professionals have reviewed it, and they've given it, I'm not a professional writer, author, I'm an entrepreneur. And so that's a different world I inhabit, we where we produce try to produce good products or services. And so I've been doing this almost 30 years. And I thought at one stage, I need to put everything down now all the lessons I learned.
01:20
So I hear that a lot. Right? So you said How long have been an entrepreneur 30 years, almost 30 years started in 1991.
Mark 01:26
So a lot of the people I worked in a lot of people I know, can tell that part of the story. And many of the people I talked to will say man, I should write a book. But you did. Why?
01:38
Well, unless one comes from an entrepreneurial, or a business family where you know things. Most of us become entrepreneurs, because you have a dream or a vision of producing some widget or providing some service better than anybody else. And then you get in there, and then you find out that it's completely different. You have to step into a different zone where you have to create things, and make things happen yourself. You can't rely on anybody else. There's no real book to teach you the mean, the actual things you go through as an individual to weathers to produce or market or, you know, do all the things the multiple facets of the job that an entrepreneur is required to perform. You only learn that on the job. Yeah. And then I started writing these lessons down and I said, Wow, I didn't know that. And then I wrote
Mark 02:30
it down and just realize that you didn't know that when you started.
02:33
That's right. Okay, most of them, you did not know many of them. We know these things, but we don't know how to apply them. But as an entrepreneur, you will, you know, you learn them. And each one of them you can say is a failure, or an acknowledgment, or some kind of light bulb goes goes off and you say, Wow, I didn't know that. And so I started writing these lessons down. And until I was 70 or 80 lessons in I said, Wow, if I have 70 ready lessons that I didn't know, I'm sure if somebody is working in a corporation, as you know, the salaried employee, they wouldn't know these things, they wouldn't need to know them. So entrepreneurs are required to know certain things for their own survival.
Mark 03:13
Yeah, I think that's true. And I'm reminded of contrast that in law, ignorance is not a defense. Like you're not allowed to say, I didn't know that was the speed limit. Like that's, that's not a defense, like it actually is a speed limit, and you actually get the ticket and you're actually going to pay the penalty. That's, that's not my problem. You have to learn that entrepreneurship kinda has the same thing. It's, you know, it's the law of the jungle, like, I'm just, I'm just gonna be a better business person. Ignorance is not a defense, you have to you have to survive.
03:44
Oh, absolutely. You have to know you have to know everything, including the law that you your law example, you mentioned, you got to know the laws. I mean, most of us comes come from different disciplines, whether you're an engineer, or whether medicine or computers or whatever. I came in as a CPA. That was my profession. And I got into making engineering products where I got into things that I relied on other people. And certain people made mistakes. And I was saddled with, with, with, with, let's say, the consequences. So you learn you learn on the job, you learn how to rely, how much to rely on people, you learn management, you learn trust, you learn people trying to deceive you. There's a whole bunch of things happening, and then you have to also comply with the law. That's the least of it.
Mark 04:27
Also, you said that you get your CPA background. Everybody, every entrepreneur I know this, I guess, as I say this is somewhat obvious. They have some background, very nobody's born. will even this is contradictory. I suppose many people do self described as being born entrepreneurs. But the reality in my experience is that there's something that they do a discipline they bring to the table, they either have a sales background and marketing background and an operations background, which typically isn't the manifestation of the skill sets like they were the technician initially. And occasionally, there's a financial background. I think the financial acronyms is not uncommon, but it's probably the least common in my experience. And I mostly it's the technician background, like I was a plumber and I'm at now I own a plumbing company, or I was a salesperson. And now I'm running a business because I knew how to sell really well. But in each of those cases, you come to the table with a feeling of some degree of competency that, as you described, immediately evaporates. IQ. Yeah, I know how to do this, like, No, I don't. But because because if you're an advocate, if you're a salesperson, you've got an accounting and operations. And if your operations person you got to do sell us in selling, so from the accounting and finance perspective, what was the Rude Awakening, from your perspective about running a business?
05:45
Well, that's a great point. And from your question, and your observation, the Rude Awakening? Well, those will generalize. I mean, everybody comes with some background, but either you come with, let's say, a science background where things are more scientific, or the discipline was a science as opposed to a skill, like sales can be a skill. I mean, it's not a science in how do you convince somebody to buy a product? That's that's a skill, as opposed to say engineering or medicine or even accounting is a science and in accounting, it's very precise. Either you balance the the balance sheet, or you don't balance it, you know? I mean, there's Is there a specific specific, specific science and some amount of skill involved in it? To top it off, I went to a military boarding school where we had order and structure, everything was defined what time you woke up, what time you ate lunch, what time you went for sports, what time you went to sleep. And of coming from that background, getting into entrepreneurship, Where, where, sometimes, you're surprised you're you make a decision one day, based on circumstances, the situation is fluid every day, you're required to make on the spot decisions. And sometimes you have to reverse yourself within the same hour, you say, based on the new information, but that is a very big change and a very difficult requirement for people who aren't used to that. So you're
Mark 07:11
a military school? What in high school in high school. Okay. And then from there, okay, so you went into accounting in college? Yes. So so I'm hearing Oh, you're very linear. We get structure. We're given orders. We know how this works. And then accounting, very law scientific, and it couldn't be more opposite.
07:27
That's right. Yeah, that's right. And now we are required to make decisions required to see what was happening and you know, change. And people say, Well, how did you do that? You just said something an hour ago, and I said, Well, new information came in. And that required me to change it. And that's not a natural thing for somebody who's coming from a more scientific background, or let's say, you know, as opposed to somebody from a skill set a skill set, maybe maybe they're not thinking in a linear fashion.
Mark 07:54
Yeah. Well, I see people who come from really, truly scientific background, suffer from another challenge, which is sort of the idea of theory and exploration. Like the, to be a little bit harsh, maybe to count almost anti capitalist like, they're like, you know, we're doing this for truth and justice, I'm, I'm going to learn something or to do something on a follow up curiosity, which is great. If you're in the r&d department, if you're in an educational situation, and you're and you're don't have any capital concerns, profitability concerns, and where from the entrepreneur perspective, it's like, there's always a ticking clock, and there's always a fuse that's lit. And it's like, you knew you need to be productive now, like, I'm glad you are figuring out this thing for the greater good of humanity, but you will not be able to figure it out past the zero line on the bank account we've got, we've got to go. And so I've, I've worked in companies where this technology, and there's entrepreneurial leadership team running and they've got a scientific team, and they're just like, having a ball, like, you guys, like going in any particular direction, and they can burn a lot of money out of the company. So I'm just I just, I'm just curious if you I just, I mean, maybe there's no, maybe I'm not going anywhere with that at all. But I did see that that that was a company I worked with in the past that that had that problem. Did you experience or how did you do? How did you react to the idea of like life and death, like, you know, that's this, we're gonna run out of money?
09:26
Well, there are some entrepreneurs who do the VC route and get Angel funding or whatever it is. And the VCs work on a ratio of you know, 99% failure and 1% success and they invest in a Google or something like that. Most entrepreneurs, including myself, did not have that luxury. We I got into a bricks and mortar business that wasn't sexy enough for people to invest in that give, you know, multiples of their return. Should we had to do it the hard way. You had to we had to bootstrap. I had to take out funds from credit cards get, go on to bank loans, and so on. Where your personal guarantee is on the line and there is no scope for failure. I mean, the consequences, the legal consequences, and to your credit rating and so on are very severe, there is no room for error. And so one has to be a bit cautious. And most entrepreneurs I know are not actually gamblers, they're, they're very cautious and thinking about steps, even though to an outsider, it may seem that entrepreneurs are sort of Gamblers, but actually, most are not most of them. That I know.
Mark 10:27
Well, I actually seen both I've seen, I see that there is a gambling risk tolerance mentality. And I do think that some are better at it than others, that there are successful entrepreneurs understand the risk on successful or struggling entrepreneurs, continue to invest in the possibility and don't don't do a great job at protecting the downside. I do see that a lot. So you add the word successful to it. And I definitely agree, risk aware, entrepreneurs are successful risk over the risk hungry entrepreneurs
10:58
struggle? Well, to that point, I would say, I would just put a sort of corollary to that and say, the higher one dreams. And the higher your goals are, the more the risk is, because it goes up exponentially the the you because the bigger you are, the more you dream, the more requirements are there of whatever skill set is engineering or whatever is needed. The legal requirements and reporting requirements go up exponentially the money required. And one has not really been through that before you're dealing in uncharted waters. Yeah, so the risk of failure gets higher and higher.
Mark 11:35
Well, that's good point. And as I was because I was thinking that through, and I didn't want to oversimplify this sort of formula of like risk aware versus not, because what I see is there are the big dreamers, and a lot of us big dreamers lose the fortunes multiple, multiple times. And we know of many famous risk unaware people who fail, fail, fail, fail, fail, completely knocked out of the park, that does happen, their dreams are big. And so there is kind of a relationship between big dreams and big risk. And I do, I do see that the organizations who are successful with that know how to mitigate that they know as the dream gets bigger, they've got to work harder to do the risk mitigation is if if not include somebody on the leadership team whose job it is to do that, actually, in the system that I work with EOS, the entrepreneurial operating system, we have terms for that with the visionary is sort of the person whose job it is to take the biggest bite of the future possible, and to fuel the organization with all the ideas and inspiration. And that tends to be not that great at thinking the downside, especially when you let them off the hook to do their best work. And then we have this function in the organization we call the integrator, which is sort of more of the disciplined data driven boss who runs the organization from it, like you know, we have a plan and we have money and we can't run out of it. And 19 of the 20 ideas you brought to the table are not useful today. One of them is really powerful. And here's how we're going to integrate it without really upsetting, you know, knocking over all of our all of our cards. And so I'm sort of thinking through this, as you describe that that you do to be successful. To the extent that you have a high appetite for big goals, you're gonna have an have an equal opposite force that channels that into the risk and into the downsides, because I just see too often all of the passion of the visionary, upsetting the progress of the visionary. We have a great idea and it's working. And now I've got a new idea. And now I've taken my eye off the first ball. And then I've disrupted it. And we have to have something that holds that together and make sure we're not losing it. So when your world so it sounds like you're not a gambler, right? Is that fair? You don't like to gamble?
13:56
Well, I go to Vegas very often for trade shows and so on. But no, I don't gamble there. Okay, by definition, I'm an entrepreneur, and I'm gambling.
Mark 14:04
So but you you ended up as an entrepreneur, what was the moment? How did you how did you go from regular human being to?
14:12
Well, I've described that in my book, which is underdog thinking. And so all of us are underdogs. And I was an immigrant in the country about 30 years ago, when I couldn't get a job. It was around the time of the Kuwait iraq war, there was a recession going on at that time. And I had come in at a stage of my life where I'd finished my studies, and I was looking for a job and I couldn't get one. And rather than start again, I decided to become an entrepreneur. And, you know, came to Houston at that time, Houston was going through a recession, they were giving office spaces, as long as you signed the lease, they give you six months free, okay? As long as you want it to stay, you can rent an apartment without any down payment and get six months free was a good place to start and, you know, entrepreneurs when you can do anything in six months. Problem is for another day. That's right. Those leases and started and that's the story starts off right from there. What did I do? I didn't have I didn't even have a social security card. I had 10 bucks. And so that's what I started from and then I built.
Mark 15:11
So I got to stop you there because the 10 bucks thing I've heard many stories say that, what's that? Take me, take me to those days $10 or whatever? $11 a bit if it's $100 I cannot fathom that. I mean, I just, I can't. And I don't know, I don't know what I would do. If that were me. I can't I have a very difficult time imagining my being success myself being successful and persevering in that situation. I just it just, it's just terrifying. even think about that scenario. What was that like?
15:42
Well, it is very scary. To know, that's all you have, you know, you have to, of course, you do have some people around you who can step in and help you. But you know, the clock is ticking. You need to go and do something with it. ticking. I mean, $10. I mean, it's like 10 seconds. Well, yeah, so certainly, you're not having Starbucks those days. That's for sure. But yeah, I had to plan it out. I was already married, my wife got a job. And, you know, so there was at least some income starting to come in that was reliable. Okay. Entrepreneurs don't have a reliable income. And even after 30 years, I cannot say it is reliable, you know? Right. Right. So, so she had some, and then I decided, based based on what I was wanting to do was to get a job, I couldn't get one, I decided to become an entrepreneur. So at least there was some income coming in. And based on her site, one cannot say you live on fresh air, or do you have to enter new. And it actually took me a long time. I mean, it took me a couple of years, by the time, I could turn a profit, you know, so even then, just because you start a company and have an office, you still need to figure out what you're going to do. And you got to hustle and go look for customers and produce your widget and market it and collections and set the whole thing up. And you're going back to 1991, where there were no computers, there was no Google, there was no way to find anything. We didn't even have cell phones. So it was a different world altogether, you know, the way that things got done, but that's when we started. And fortunately, it worked out, I found an idea of a product that I'd used in Europe, that wasn't available in the US and I decided to start doing business, I thought there would be a need for it.
Mark 17:20
Okay, so that's, that's actually the spark that I don't think, is talked about as much as I want. And maybe I'm the only one that cares, but it's my show. We're gonna talk about that. Those moments of like, piecing it together, like I there's no opportunity for me, I've got to create it. And what is it? What did you hear? How did you start to connect that to like, okay, I, I've heard of this product, it's not sold here, it's an opportunity. But what you know, walk me through the thinking of just like, you know, you collect on the journey from like, I'm collecting this, I mean, on the side of the road that might be valuable to somebody else further down the road, you know, those steps to like, this might be a business,
18:01
when they close closest I can describe it is that whenever somebody goes to another country, and we all travel, but even if you live in the US, you travel overseas to Mexico or Europe or wherever, or to Asia, you've and you've the first day, or the first few days, you're somewhere you say, Wow, this place is really different. And see how these, how everything is different, whether it's the lighting, or whether it's the traffic or whether it's the some cleaning system, or whatever it is. Fortunately, I had set up an international international trading company, say, you know, called equator. And the purpose of the company was to trade products or services between one part of the globe to another mainly between the developed world and the developing world. Okay, that is what the goal was. So I was on the lookout for these things. And so in my own personal, and I started doing business with Mexico, that's the time the NAFTA deal was getting signed. And so I started doing some business there import and export, you know, doing various products, but it was not really looking, or not really seeing, seeing what opportunities came my way. At that time. I had a large network in Asia, Africa. And so I told a lot of people, this is what I've started. And so people used to say, Well, can you get this for us? And so I did a number of products, you know. And then one day, I told my wife, why don't we go to Galveston go to the beach, and it's Sunday. And she says, Well, I got to do laundry, and we were living in this apartment. And so she said, What do you mean, you know, because we had moved from Africa. And we there we heard from Africa.
Mark 19:35
That's all we doing in Africa.
19:37
Well, so, I grew up in India did my all my education in India and then I got a job as a financial controller with a company in UK. In England, they had operations in Africa. So they sent me as the finance manager of a branch and then I grew to be the, the country manager and regional manager and so on and then the the company had problem because of overexposed. Have devaluations in some countries. And so the company started tanking. Okay. And so in seven or eight years in the meanwhile, that got married, you know, my wife had lived in New York. She grew up in New York, and then she had moved to Africa and I mean, beautiful life house on the beach, and, you know, wow. 29 and, you know, what do you call the expat life? You know, oh, yeah. Okay, so, so when time came to make a change, see, she decided to come in and, you know, get things organized while I came a little bit later on. And that's when all this happened. Anyway, so when I came, I had the network ready. Yeah. So going back to the Africa story that your to the going to the biasanya going to Galveston, so let's go. And she says, Well, I can't I gotta do laundry. You know, we didn't have any maids over here. So she used to go every Sunday morning from our apartment and walk 50 yards to the coin up the laundromat, and then put coins in and then put clothes in the washer, then come back home, then then 45 minutes, go back and transfer from the washer to the dryer, then come back then go back. I think everybody's been through that. Yeah. And I said, there must be a better way to do this. And in England, we had a our apartment, our flat over there. And we had one of these combination washer dryers. It washed and dried in the same unit. And I said why we goofing around with this whole thing? Let's just buy one of those machines. Add enough money to buy a washing machine buy them? And let's just go $10? Because $100 Yeah, so let's go let's go to the beach. But what do we can spend? We can work all weekend, spend all weekend doing laundry? What kind of a lifestyle is this? And I mean, we were in our early 30s. And you want to do things, you know? Yeah. So we looked around, we've said fine, let's go around. We went to Sears in those days Montgomery Ward and all the Circuit City and all those, those and they said we'd have no idea what you're talking about. And we said so crazy. If we need it, we know it exists. We bought one in the you know, when we lived in London, why isn't it over here? And that's when the spark came? I said if I need it, and it'll be beneficial to my life. I'm sure there'll be other people who need it will. You know? Yeah, so actually, we're solving a problem. And ultimately, that's the that's the key to it that you must solve, identify the problem, solve the problem. And that's the
Mark 22:14
See, that's the thing. I think that a lot of us hear that, Oh, you got to solve a problem. Okay. And you got to be simple and Okay. Well, how do you do that. And what I'm hearing is a couple of things, what not the least of which is contrasting some situations. Like if you if you stay in your hometown all your life, you only know one way and you just you're not going to see the kind of things that are you're going to see if you travel and visit other cultures. And because I remember when I visited Germany and 95 ish will save any for I saw one of those machines that you're talking about, it blew my mind. I thought I How did they make such a device that both puts water in and puts heat in? I couldn't believe it. And, and I had to assume this is funny, actually, I'm thinking of the thought process. I had assumed before such time as I saw that device that because these devices in the United States were always separate that there was a physics reason that you could not put the two together like I get as a child as well, obviously, you would make them one device if you could. But since they're not one device, they must obviously be necessarily separated. And so it couldn't possibly be combined into one. I just assumed that and let it go, no innovation, then I'm in Germany years and years later, Mike, what do you mean, they can actually put those things together? And so for you, you were kind of the opposite side of that, like, Well, why don't we have one?
23:35
That's right, because we needed it. And it just seemed like a sort of hampering our lifestyle, you know, so it didn't make sense to me. And it still actually doesn't Why? Why so many people don't. So a lot of space, a washer and dryer space. And time you think of the time I mean, who in who really enjoys doing laundry, you know, I mean, you want to get it done as fast as possible and get back to whatever you're doing.
Mark 24:00
So, yeah,
24:02
so yeah, so that's, that's what I started. And then of course, I mentioned I was in my early 30s and that's when you're young and foolish. And it's a big project you're taking on the big boys and the big companies out there and you know, and here I was with not much money still I mean it was only a year or two since I'd started and but I was on the lookout so I didn't even have a supplier
Mark 24:27
Okay, oh wow. Okay, so I'm thinking about I talked to a lot of people in fact I talked to a guy today starting a business and these these nominees try this for a year just does that I tried to not be rude and I don't think I was but I was like, you know that year that first year like it's, it's already gone. You don't you don't even know it that first year is gone. And you're gonna get you're gonna think back a year from now. Like, I haven't done anything like nothing. I thought what happened my now what will happen now, it's not universally true. Some people with tech companies that there's a lot of traction very quickly, but most boot strapped companies, just the amount of bandwidth they have to do the creation and any kind of asset, whether it be a relationship or a marketing plan or a process. Like they think they're just gonna knock that out and then like, like they can't even get like their tax ID.
25:17
Yeah, well, that's the thing about entrepreneurs, the entrepreneurs I mean, are optimists by definition, and you're always hoping for a better tomorrow. Yeah. Now, whether that happens or not, that remains to be seen. But that's the first thing you know, that you'll see. All of us are optimists and hoping. And I've been doing this almost 30 years. And I'm still an optimist, even though I've shown in my book, the extreme highs and extreme lows. Yes. Failure to we all we all go through it.
Mark 25:44
Yeah, for sure. So is it getting to your to your one, where's your head? Oh, this is awesome. We're excited are like, Oh, my gosh, my wife is going to tell me I can't do this anymore any day,
25:54
when the first thing was to tell my wife that I want to become an entrepreneur. And then she she thought I was nuts. But anyway, so she said, if that's what you want to do, go ahead, you know. So then I started exploring this project, trying to find a supplier I didn't know. So I went round and found that wasn't made in the US and decided since I'd seen it in Europe, I'd start going to, you know, trade shows over there looking for suppliers. Most of them are very large companies. And they had no interest in talking to me who started a company and you know, didn't have any money. But then I met, met a company from Italy. And they had the technology and this, they were willing to adapt the European technology for Americans specification, there's voltage and safety issues and a whole bunch of things. And I said, Well, I will dedicate my company to marketing this. And so that's what happened. And so they,
Mark 26:41
so that's important, right? So when people have ideas, in fact, I talked to an investor, he does a lot of investing in early stage, he said something to me, that was really interesting. Because we already heard this, if you've ever watched Shark Tank, they always say something defective, we're betting on the investor, we've been on the bench about the person, this guy said the opposite. It's like I don't care about ideas. Because there's, we're not, we're not having a shortage of ideas. That's not the missing ingredient. And I thought that was really insightful, because that is true. Everybody's had 1000 ideas, or at least at least a dozen ideas that could happen. And there's people solving problems by the dozen right now. And most of them never materialize. So you want to do something very simple. On the surface sounding, we want to bring an appliance that's available all over Europe, to an all over the basically the rest of the world and bring it to United States. Like this is something you can solve in the afternoon. But But that's not what you experienced it because you pop the hood on this thing. Well, what do we have to do? Well, other than reengineer the entire thing and get a million or not a million and many certifications and approvals and EPA and all this. It's like, wow, that's that's insurmountable. So now you got to go find somebody who's willing to do that in exchange for you marketing?
27:56
That's right. So yeah, so that was a challenge, because most people wouldn't believe in you, unless you're willing to say I'm going to sell a million of something, you know, and I couldn't do that. So there was this smart, one small company that was willing to take a chance. And then finally, then I had to be able to finance it. Then I had to go and find customers and say, Okay, do you want to buy this product? And they say Who are you? What's the brand? I decided to call it equator? You know, it's a whose equator? Do you have parts? Do you have warranty? What's your service network? That's the other side? Are you going to support it by law, you got to have parts for seven years now My gosh. So you can't even if it's out of warranty, if you can't expect customers to buy your product and fizzle out in two years. And there's no parts even if even though customers may be willing to buy parts in. So there was nothing of that. I was had a international trading company. So I had to change my thinking as to how I wanted to make this work. And finally, you know, we became an appliance company after three or four years so I have ditched everything else you know. So what did you What are you letting go of? Well, there was the other internet the trading part trading with Mexico and with Europe and the Middle East and other things you'd Okay, so you were just pure brokering Europe brokering deals. Yeah, just, you know, like, like a, like a rap, you know, getting commission.
Mark 29:11
So you probably, you'd have vendors and products that would kind of come in and out of Vogue. If somebody would say, Hey, I think you got a network that I can get my product through it. Yeah, we like you guys will probably buy that stuff. Okay. And you're like, Okay, well, that's been fine. But it sounds like it was. What was it? Was it? How hard was it to let go of that? Were you tired of it? Or were you like, no, this is pretty safe. But I'm betting on a bigger outcome or what was the decision process of letting go of the old stuff? Because I see a lot of entrepreneurs who have it's very difficult for them to let go of the past in favor of the future.
29:43
Well, I think this this project became so interesting. I'm talking about the laundry project, they became so interesting and they got sucked in, you know, because their their requirements. I mean, I was happy. In fact, there was a company here. It was a rent to own company. They were close to my office and I call them. And I walked. And I said, you know, so this is the product I'm selling. And you have 500 stores around the country. And you know, why don't you just buy it in the container loads, and this is the price and I just want to have five or 10%. That's what I was doing. Oh, wow.
Mark 30:16
But it's five or 10%? Was your margin gross margin off the product to them?
30:21
Yeah, it was just a commission agent. I didn't have the money to buy containers. So I said, Okay, it's $100,000. I'll make 5%, maximum 10%. You know, that's my commission. And you take it and run with it. And the guy said, Not so fast. You know, what about the service and Parsons, okay, yeah, we're not if you bring it in, we can buy from you. But I said, Well, what do I do? He said, Well, why don't you start a company, this seemed like a good business, we'll be your first customer. And I said, Well, I don't even have a brand is saying the name. Here's your card, equator call it equator.
Mark 30:51
So it was you were just a sole proprietor equator was,
30:54
you know, okay, I had a few people doing helping me in the other part of it. But this was my pet project that I was working on, because I was the only one who had used it when I lived in London. So I knew what the product was.
Mark 31:02
Yeah. So
31:04
as soon as I got through, then I had to set up the service network, I did set up a warehouse at the center of logistics, and I got, it took more and more of my time. So instead of me spending 10% of my time on this project, it became 90% of my time, because to set it up as an appliance company. And finally, I said, What am I doing, you know, this is where I'm going, this is where I got a customer. This is he's willing to work with us. And so so even when it started, we were doing other things. But over the next few years, everything else tapered out, you know, so.
Mark 31:35
So was, was that? I guess, as you started describing, like, setting up the all the things that had to come? Did you feel like I kind of know the answer, because I sort of get getting kind of overwhelmed. Like I said, the warehouse and all this other stuff like that. Oh, my gosh, what did I What did I hitched my wagon to? This is much more than I thought. It sounds like you were like, well, this is this is exciting.
32:00
It's very exciting when you have a chance to I mean, it's every entrepreneurs dream to change. And entire industry, as you say, nobody knows about this product, you have hundreds of millions of people, that's a huge market that can be convinced, of course, it's a small market, we were dealing in a compact size product, apartment size product. Yeah. And anybody, everybody needs to do laundry, just like you need to eat food. So it's universal. And so if I, if I bring in a product, and I can convince somebody that my product is better than the existing widget out there, then that's what it is. I need to have, I need to prove I need to provide. So I looked at all these people as giving me good advice, telling me I need to have service need to have parts need to build the brand need to do marketing. But you know, anyway, it just goes on from there and I got sucked in and I didn't even have the money.
Mark 32:48
Okay, okay, that's important, right? So that's, I think a lot of people get stuck there. I could do this if I just had money. And a lot of entrepreneurs, I mean, well, a good example of this. Donald Trump as an example, always, you know, I, I didn't have any money for anything. Now, the veracity of that is sort of irrelevant. For me, it just seems like you know, even if Donald Trump was able to negotiate purchases, purchasing 100 millions of dollars with a property with no way to buy it, and figured it out and got it done on handshakes and favors. That's still a major obstacle for people like, okay, we don't have we don't have money, like, what did you do to figure out how to make this happen? knowing there's a lot of money to get spent?
33:37
Well, you know, the first thing was to build trust with the, with the supplier with with with the plant in Italy. So once they had done their part it sent me samples and made tweaked it. And once we all agreed that yes, this is the product that's going to go, then they said, Fine, we have the first container ready, which is the 20 foot container with 54 pieces in there or something. And they said, Okay, we're ready. We've done everything that we said, we're going to do
Mark 33:59
now you better sell, but you better send the money. Okay, so they did everything up until this point
34:04
on their dime on there. I had to pay for samples and ship it and so on, you know
Mark 34:07
what order of man, what kind of money was talking about $10,000 $5,000 $500?
34:14
I mean, for the actual container, it was about $25,000. So
Mark 34:17
you had to come up with 25 grams, okay.
34:19
All right. So in the meantime, I'd built up my credit I got, I'd started off with with a small credit card, and I understood the system that you needed to take credit, and you need to pay down the credit and keep having credit. In order to get more credit, you should never have a zero balance, otherwise, you'll never get credit. So those are all the lessons I learned as a new immigrant that yes, you can get credit, but you must be credit worthy and get into the system. And so finally I built it and in couple of years, I had $25,000 worth and I went to the bank and cashed out $25,000 worth of credit cards and I said I cannot allow them to lose confidence in me. Otherwise, that's it. And in 24 hours, I had wired them the money and I didn't have the single didn't have one written purchase order. promises. Okay, so
Mark 35:01
that was that they said, they're ready. I'm gonna ship them to you. And he said, I'm paying you now.
35:05
Okay, that's great. And then they shipped it. And then I went to arrange for a warehouse, it came to Houston. And then I went to the customer, the rent to one customer, he kept his word and bought sound, and then, you know, just kept rolling and kept building it from there.
Mark 35:21
What do you think was the I don't even want to say secret sauce, or I'm hearing as a story in a path of trust, and good faith, and gratitude and trust. Now if I'm if I said that, but that but trust people you trusted and people who trusted you. And that is in contrast to a lot of stories I hear. Not all I hear I hear trust based stories. But I'm immediately contrast it with people who say, yeah, you know, I had to do it this way. Because I got burned. Last time I had a partner, you rip me off, I had this Bender, they rip me off, I had to sue them. And there's a lot of fear in entrepreneurial communities, and a lot of bitterness and scar tissue out there about getting burned. And so there's a lot of very aggressive advice on how to protect yourself as a business owner, and don't trust these people with your money and all that kind of thing. And I think there's a lot of pragmatism to that. And I think I think you have to be smart with controls. But the secrets to your success was people saying, handshake, let's do this. And so how did you how did you come up with that? How did that How did that come about?
36:33
Well, I think the first trust is between you and the customer that you have to be able to deliver. I mean, if you're creating a new brand name, why is the customer who knows Whirlpool, Maytag, Amana? Those were the brand names in those days? Why are they going to buy something called equator that cost $1,000. So you're always trying to build trust. And so that's the first one. Then couple of years later, I had a customer, he loved that he's a distributor out in the Midwest, and he said, I want to buy a couple of containers of these. And here's the purchase order. And it's worth $100,000. And I said, I don't have the money. You know, because we were bootstrapping you're building it up. But you don't have $100,000 to suddenly jump it up, you know? Right, right. So he looked at me square in the eye, and he says, How much do you need? I said, I need $100,000. And he looked at me and he says, Are you good for the money? And I said, Yeah, he took out his checkbook and wrote me a check for $100,000. And give it to me, and he walked off. Who does that? Yeah, seriously, yeah, there is trust, there's nothing is on the trust that I'm going to deliver the product is going to be what he ordered. And it's going to be a good product, it's not going to break down. And you know, I'm not gonna, I'm gonna disappear. There's a lot of things at play over here. So you have to trust, you have to believe that your customers will trust you, you have to believe your suppliers will trust you, and you have to be trustworthy. And so you have, you know, for them to say, okay, we're going to trust this guy. But conversely, is also true that people who want to pardon my language, you want to screw you, they can take advantage of you. And in my book, I outline three cases of that big ones, where I've been screwed by
Mark 38:16
the guy, I'm glad to hear you say that. Cuz that's a good contrast. Like, it's not all roses and rainbows.
38:21
So no, it's absolutely not. No, there is the I mean, there is. I don't know if you know, but businesses, one of the least ethical fields, compared to perhaps lawyers may be at the bottom, because people perceive that we're doing all this for money. Yeah, but there's more than it. But I had suppliers who, who didn't know what they were supposed to do made products that broke down, then you think they're gonna take care of the product they made? They said, No, they bailed on me. And I was stuck. holding the bag is with our name.
38:51
You have
38:52
colleagues who you trusted. In part of my team, they lead me down, committed fraud. Okay, yeah, you have other partners, business partners. One of the reasons why entrepreneurs don't like partners too much is because between partners things can happen. There's a lack of ethics and what you may seem, well, you, there's a lot of gray areas, and what your understanding of what the way things are to be done is somebody else doesn't think is the same way and you don't you're not same with the same level of ethics. Somebody wants to take a shortcut. So I've had three major experiences, again, which are outlined in the book, two out to show these things can happen. I'm not immune to that. Yeah. And you know, and these things particularly happen when you're in the downturn, when things are going up and up. You have money to pay for things. You have money to pay for lawyers, you have money to pay for expert advice. But once you're in a problem, then you're in it. Then if you're in the start of a vortex I had a quality problem. And everybody thinks you're going down. Then the sharks are circling. Right. Everybody wants a piece of it because they Okay, let's get him before we gets done. And once you live through that, it's actually you can become a cynic. At the end, I
Mark 40:05
was gonna say, Did you because it sounds like you built the business on trust, and then took it on the chin a few times. Were you able to keep that trust and be able to nurture that? Did you? Were you at risk of losing it? Or what? How do you feel now?
40:20
Well, at the end of the day, you know, I reached all the way to the bottom. And that's the time you actually search, what is the meaning of what I'm doing? Yeah. Is it? Is it all worth it? Is it all for money? What is it for? And finally, I found the answer. And the answer is that, yes, it is worth it. What is the bigger purpose for what I'm doing all this for? Apart from, let's say, feeding your family and, you know, doing the things you need to do? You got to find the greater purpose of what it is. And I found that and then look back that even though I had these negative experiences, think of all the 1000s and hundreds of 1000s of individual customers who trusted me in buying my brand, and the average customer products is $1,000 each, that's not chicken change. Yeah. So I mean, they and that's trust. So yes, I got screwed by three or four or 10 people, but I have hundreds of 1000s of customers who are grateful to me and appreciate the products have developed and make to make their lives easier. At the end of the day. I think I'm still a beneficiary. Yeah, so the highs are very high. And the lows are very low. Yeah. And in the meanwhile, I found the meaning of what I'm actually searching for.
Mark 41:26
Well, so, you know, two questions come to mind. Now one is, and I'll go with their first what is your purpose,
41:33
the purpose at the end of the day, and so the purpose has changed. So the purpose used to be like all entrepreneurs, I want to big build a big company, a successful company, build $100 million company, maybe issue an IPO one day. And you know, that is the ultimate success. Right? We all dream of that. And you say, this is what we want to do. Yeah. And as I went through these experiences, and I realized that the trust that had built with my dealers and distributors, and when I came back and found out that I wanted to better build a better product, because, you know, and build a better product. And they were willing to come back Despite all these problems I had is because I had the customer relationship, and the trust with them. So my customers were superior. And I decided to build you know, so I found that instead of building a big company and going on numbers, I decided to make making customers happy. So every machine I build, I say, is my customer going to be happy? By the features that I design? Are those what the customer wants? Is it easy to understand, easy to install? Is it properly packed. So when the customer receives it, they open it and they say I spent $1,000. And still I'm full of joy, there's no remorse for buying this product. They say, wow, I made a good decision to my customers feel that, and then they use it and they say, Wow, I'm so happy I found this product. That is my goal is not numbers anymore. Of course, we need numbers to run an organization. But that's not the primary goal.
Mark 43:05
So I love that because it tells a very good start story of uniqueness. And that. It's always say that if you're going to try to compete in the paperclip business, you're probably going to get killed unless you have a passion for paperclips. And then no one can stop you because you're thinking about paperclips all the time. And these are going to be the best paper clips. And, and everything is like that. And and there's a lot of things that I you know, in the system we taught we called the core focus. And the core focus is about understanding why you do something and compare and combining that with what you do. And, you know, you could say, Hey, we just make make washing machines, like, Okay, cool. Like I've seen those. We make washing machines that bring joy to you. It's like, Who does that? Like that's a unique space. And suddenly your path is clear. And suddenly, like, wow, I don't want to if I'm a washing machine person, like I don't want to compete with that guy because he likes these things. Most people don't care that much. So it's a very powerful combination of things that I To me, it just lights up to me. It's a very clear distinction.
44:18
Yeah, and that's the reason the name of my book is called underdog thinking, because I'm the underdog. We still are independently owned. We're still competing with the major companies out there. And I would prefer being in my shoes thinking and how to make my company's my customers happy. Instead of being in their shoes and thinking how do they have a better successful financial quarter that we have a complete disconnect in our goals? Yeah. You know,
Mark 44:47
yeah. So interestingly, I work with a company who is very good at what they do and they have lost their way a little bit. And I know they're gonna listen to this. So I got I got to be blunt and clear. And what we discovered is that they got a little caught up in the pressure to compete, and maybe just win in an unspecified way, a lot of a lot of competing forces in their world that push them to perform more and more. And the owner founder kind of found himself very frustrated, if not just really disappointed, like, why are we not doing what we're doing better than we were meeting like they're doing well, like he can look at the company say the company's doing well, but something's doesn't feel right, like at all. And it'd be in we got to what I think is either the bottom or very close to it. And it was that there was a time when excellence was at such a high level that every single client they ever had loved them. And that time, it's sort of passed, and, and he longed to get that back. And it was, I think that emotive side, I think we get caught up with like, Hey, we're, we're doing washing machines, like, let's get more washing machines, it's like, No, no, no, washing machines that make you joyful. That's not the same thing. You know, it's services that are at the highest level of excellence, you'd miss that ingredient. And it's not the same thing anymore at all. The machine doesn't work on our end, our business doesn't grow, I don't feel happy, I don't feel good about my legacy. It's not worth it. Nothing worked with that, that one word. And I think a lot of people miss out on that.
46:32
Well, I think we all go through that. And our company was also in that same phase that you mentioned, we were looking for numbers and, and so it, you have to go through a certain metamorphosis, or whatever to realize what the bigger purpose is, you know, and we had to go through, almost like a recall and have 1000s of machines go down and all that is described, and how we had to go through that and the painful process in trying to save the brand and take care of customers and so on. And, and finally, you when you land up, and you say, Okay, this is what we did, what's it for, it's all for the customer, you know, the customers have to stand by you. And so if the customer stood by you, and are still willing to buy your product, despite what went wrong, then you must work for the customer. That's ultimately at the end of the day. I mean, there's only one way and how do you achieve that? I mean, the only way to do that with with organic growth. I mean, you push, I mean, every every every business is almost like an orchestra, you need to have perfect balance of purchase and sales and inventory and sales and accounting and collections and r&d, and so on. And if one thing goes out of balance, then something goes up, right. So we're all we're all trying to achieve that balance, but it must be organic. And I think if you push one side, in this example, sales, then something is going to get compromised. Maybe somebody in your customer service is not competent enough and not able to take the load on and that's gonna happen to us. We were not focused on that we thought things would run, we thought the future would be like the past. Okay, yeah, just because things have run the same way for the last five years or 10 years doesn't mean tomorrow will be the same. There are challenges and the whole world is changing. And things can change in an instant. And you have to be able to foresee that and make the changes. And, you know,
Mark 48:24
so in my world, I call it the secret, you know, we the people who do what I do, the system that we use, they call it hitting the ceiling, every business experiences that every individual experiences, every department is growing and doing their thing getting better, getting faster, getting happier, until they're not. And when we get stuck. And we're like confused, because we weren't told that we all all get stuck at some point, we know that we're not invincible, certainly, if so. So what I think is so tricky about that is that we don't always notice, or we're not, we're not aware, we're busy. We're very busy. We're just turning we're trying to grow, like I got to a point where a million and a half we're gonna get to. And so all I can think of is we got to get to to get to be more more more faster, faster, faster, whatever. And, and then we're frustrated because we're getting stuck. But we don't we don't have the presence of mind to say like, oh, maybe I'm at a ceiling. Or maybe I got to reengineer my thinking if this at this time, we're just like, Oh, I guess I just messed up last week. I guess I just got had a bad day, I guess. And so I'm gonna try harder. more of it. What did you feel when you when you hit that? That's that spot where you describe it where we thought the future was gonna look the past and you realize at some point it wasn't before you had the realization that something had to transform. What did it start to feel like? What did you see what symptoms exhibited?
49:42
Well, I mean, in our specific case, we found machines more machines were breaking down, which is, which is a sign of the quality problem. We found our own team wasn't able to take care of the problem. They found the technicians overloaded we found more customers complaining, and all of a sudden it seemed like the goal As a CEO was becoming more difficult, because we're not always keeping in touch with all those parameters that I just described, right? There is more of this and more of that and more static in the background and you say, well deal with it, you're the manager deal with it. Why are you telling me with all these problems? What are you getting paid for? But then it builds up, and all of a sudden, so. So when? I mean, I'm just saying it happens, you know, so that is actually what stops the company, because the CEO is looking at growth. That's the primary I that most CEOs believe that their primary job is to grow the company, but I've changed my mind. Okay,
Mark 50:35
what so what do you say, Now,
50:36
I believe the primary job of ACC CEO now I tell my people, if you have a good deal today, I don't want to know I don't care is great, that's what we're supposed to do. But I don't need to know that. I need to know the problems in the company, the problems that can be catastrophic. So I need to know how many machines broke down? How many in every shipment in every truckload, what's the percentage of machines that broke down, how many pumps how many valves, look at those percentage, because that can be catastrophic. And I've shown in the my book, some of those theories, described it and made a graph, you know, as to how to manage, let's say, foreseeable risk and unforeseeable risk, and is the unforeseeable risk on what you're not calculating, that is the most difficult to manage. And I think the most, the top job of a CEO is to manage risk, because that can be catastrophic to the company.
Mark 51:29
Also, I want to dig into that. But at the same time, I also kind of recognize that, that could sound a lot of people listening to this, like, Oh, my gosh, you're not rewarding people for successes. Because, you know, we were taught, we were not celebrating successes, I mean, many entrepreneurs are kind of criticized. And I observed fairly, I mean, it's, it's a fair criticism, many entrepreneurs get going, and they stop rewarding and recognize their employees for really good hard work. And they get caught up in the negative. And that's a fair concern. And so I want to ask in a second about that. But what I'm hearing is that you had to get bigger ears, you had to you, you had to listen for the things, I get the smaller company, you were able to kind of predict to know what was broken, what was not. And as things grew, you had to turn on a more sensitive hearing system of what's going on what's breaking, so you can make better decisions in a different way?
52:23
Oh, absolutely, we had to change our internal system. So when, when the company was when came back with the new products, and so on, in the comeback period, we had to devise all these new systems, but at the same time, to what you're saying, I realized that this the entrepreneur was also the CEO in this case, has to be decisive. And you must realize that you as the entrepreneur, and the driver, and these CEO has got a different responsibility to every single other employee in the company. When the problem happened with me earlier, the employees left and said, Okay, we're sorry, the company is having these problems. But if you can't pay me, I gotta go, I'm gonna have to feed my family and earn a living. Yeah, and they left and got other jobs. So it changed my thinking that saying, the overriding responsibility of an entrepreneur is to ensure the safety of the company. It's like you're driving a car, the safety of your passengers is the overriding concern. As of and you cannot say speed is the overriding concern, the safety without safety, you're dead. So in the first case, when all the employees left, I said, see what happened. I was looking out for you and work so hard and paid myself last, like all entrepreneurs, you pay. And now you ditched me, you know, at that last moment when I thought you'd be here and help me come out of this and they saying, We love you, you know, we want to be here for you. But you know, we got to feed our families. We have to be have responsibilities. I mean, I'm sure that was reasonable. But entrepreneurs like to believe that everybody is loyal and they'll stay. Oh, no, I've heard that
Mark 54:07
story over and over and over I experience I've definitely experienced like, you know, exactly what you're saying that loyalty like I I'm sure that story you described hit a nerve of lots of people who was into this for sure.
54:18
Yeah. So so that go back to the point that is the safety of the company and you have to be take decisive the decisive decisions for the safety of the company and watch for those danger points. Because what's going to happen? everybody leaves and you'll be left holding the bag
Mark 54:32
right? In sometimes the safety is having is getting rid of and well, not sometimes, very, very often safety is improved. By getting rid of people. It might be the wrong person in the wrong seats, being aware that you get the job that you gave, Joey how many people I know are named joy, but joy is my default person. So give give joy the management responsibilities great for a year and in year two, he's terrible at it. Well, because it's bigger, it's and now I love joy, but joy, we can't do this job. And now it's not Save for this company. If I leave Joey in there, even though I love Joey, and a lot of entrepreneurs have a very hard time with dealing with the bad guy, but I love Joe has been so loyal. But to your point, this company is not safe, the stability, the erosion of this foundation that we could all be at risk if I don't get joy out of that is not a responsible CEO, if I leave that person there.
55:23
Well, this is this is going back to one of the earlier points that is it a skill or a science, there is no science to describe that At what point does a person outgrow his responsibilities, and by then the person has been very loyal to you. And you know, I mean, with time also you build loyalty. I mean, people are willing, they're good at their jobs, but they're not willing to you hope you can train them to bigger responsibilities, just like we are growing as individuals, as an entrepreneur is also growing in our right every day, you expect that your team is also growing, and you help them out and get them more training and so on. But yes, you're right. Some sometimes people don't,
Mark 56:01
don't grow. In the best of circumstances, I can find a seat for Joey is missing, not the seat he was in or I can mentor him up or I can put him in another seat for a while and get him back into it. But but the the ultimate truth is that we cannot sacrifice the health of the business because everybody's at risk. We do that. And even if we don't do it elegantly, and we and we don't make good people decisions that that's that's, that is the most common problem I encounter. What else did you encounter? I heard you or heard that you were developing systems and processes and metrics and things to make it easy for the information to get to you. Was that was that part of? Did I hear that? Right?
56:39
Yes. So in our new system, what we actually said, okay, because of the previous problem, where we found that machines were breaking down reports were not being submitted. And I was focused completely on sales and building that large successful company that which was the definition of success, that maybe the reporting systems weren't there. And if we had been looking at the operation side a little bit closer than things wouldn't have happened that, you know, we would have been alerted to the fact maybe much earlier. So when we came back seven or eight years ago, I said, I'm going to change the system. And we developed our own software, we said, okay, even though we're selling appliances, we must be like doctors, and we must have a similar system. So we want to know, in this case, when any appliance and we've got 20 product lines, we've got washing machines, refrigerators, dryers, freezers, rangelands, cooking, and so on, you know, yeah, I just give washing machine as an example. Because that's our core product, we want to know when the machine is when we place an order. And most of them are produced overseas. So you place an order, it's 90 days lead time, we want to know when the machine is produced, we want to know the serial number, which ship it comes in which container number? We've got different distribution centers around the country. And what where does it go to? At what point does it go to a distributor or a dealer or fill in all the gaps, then you have a customer calls in and we will be tied that into the previous information, which the serial number of the machine. And we keep tracking the customer for every call and every interaction until the death of that machine, which may happen 10 or 15 years down the road?
Mark 58:13
Really? Okay, so the life cycle of the machine, that's the birth to death?
58:18
That's right. Wow. So we want to know, and then we track every single shipment every truckload every every container. So for example, somebody called there was something that happened a couple of weeks ago, some some particular component broke down. And so I put in a call to the service manager, and I said, I want you to track this and see, is this a problem in that container? Because I've been getting two or three have this happen? Is it a Is it a big issue? And he came back? And he said, No, that's all that there was, there was nothing more and there's no more of that? Because Is it an epidemic, you're hearing what epidemic epidemic in epidemic in the machine that you can have a pump supplier or a valve supplier, somewhere in some other part of the world, who's depending on our particular raw material, or rubber or some process in the third part of the world. I mean, everything is tied in. And as a result of some production flaw, a washing machine is breaking down, right, I have to be able to be proactive, as opposed to reactive.
Mark 59:16
Well, and so to that point, how valuable this point is, but I remind I talked to somebody recently who was having all their equipment manufactured in China, and the contract manufacturer they're working with decides to substitute parts, just like you know, we're not using what's close, and doesn't tell them and they've got like hundreds or 1000s or 1000s of products in your situation, like oh my gosh, it's got the company name on it, and they're broke and does the wrong thing. And they have to in every state, it's like, I think it was like a $50 or a $500 piece of equipment that that required like two hours of service per device to replace this this piece of hardware. So you have to be on top of that. And so the fact that you've got the systems in there to do that. So what you're describing to me is what I will lose categorizes process. And when I am advising companies to get their arms around process because they want better quality, more efficiency is there's an order. And so the first order is to get the the core values and the culture locked down. That's important to people believe in quality. Do people believe in joy that you can't, you can't have a joyful laundry, or washing machine if the people you're working with don't understand the importance of that, working that to real clarity of real accountability, and how do they sit does the tool I call the what we call the accountability chart allows them to know exactly what they're accountable to get done to that role, clarity, those two have to be in place. And when you've got the right people in the right seats, which is what that combination of factors does, then you look at building process. And because I don't believe that you can out process the wrong employees, you've got to get in with the wrong responsibilities in the wrong structure in the business, once you get that figured out, you've earned the right to build process. And all this to lead up to when people finally get in position. Alright, we need to increase consistency and quality and intelligence and then measure that we're going to build process when many of the companies I work with now, the very earliest stages of developing their process. And some of them have very sophisticated process, but a lot of them are very early in that. And when I can imagine they're hearing you describe automated metric driven process from birth to death of a machine, they're like, Wow, that's a million light years from where we are right now. How did you go from no process to some process? And how long did that take?
1:01:31
Whether it was actually a realization, and we had to experience failure due ultimately, to ultimately No, this is what we had to do. I mean, most companies manufacturer or market widgets, and news you expect your you we're all buying products, and components and suppliers, there's always some process you're not creating something from nothing always getting. So the point is
Mark 1:01:55
manufacturing is built around process. So I'm so I'm asking the question I, you know, maybe you were forced into process by nature of the business, like you're in manufacturing world, and the very first word out of your suppliers mouth is all right, well, here's the process, or Oh, I guess process is part of our world? Or did you struggle with process at all?
1:02:11
We had no, we had process for distribution, but we had no process to manage our own future. Okay. So when when somebody lets you down on the supply side and says, Okay, this is the product, and then finally, the product is not what it was? And then that affects you say, well, we need to have greater control over that. And how do we do it? So you set up an additional process, which you hadn't considered becomes more complicated? You know, do you have checks and balances and so on to do things which you don't really believe is your responsibility, you say, Hey, this is what we're supposed to do. Now you're making me do this. That is the biggest shift to accept the responsibility to say that I am the entrepreneur, this is my brand. This is the widget and I accept complete responsibility for this, and I cannot pass the buck to anyone.
Mark 1:02:52
Wow. So what was the first process? What was the first unit? Remember that day? Like, okay, apparently, I've got to figure this out. What What was that? And how, how did you create your first process?
1:03:03
Well, the realization was, of course, that we, the manufacturer of our product refused to accept responsibility. And when that happened, it was almost disbelief that how can you do such a thing? You know, how can you accept it, and then if we're going to go forward, we need to be able to control that. And then we started designing it, I talked with my team and said, We need to have, this is what we'll put down. And then we'll talk with a software company who can design something like this for us. And actually, it's about seven or eight years old now. And we still have changes as technology is moving forward.
Mark 1:03:34
So you've got process right into the technology, because a lot of the companies I work with, they're not technology driven and process might be, we're just going to agree to these 10 steps, and I'm going to write them on this whiteboard. And don't skip step three or four, they're really important. Other companies very technologically driven, can't get their mind around the idea that process doesn't necessarily live in technology, like well, I can't have process I don't have a process tool yet or that kind of thing. So it sounds like you really from the get go built your process into technology
1:04:01
we did it actually became almost necessary because the products we're selling are more more technology product, a lot of electronics as opposed to more mechanical controls that used to be there, you have software in washing machines, which wasn't there, they were just mechanical clicker knobs before you know. So we have to be able to track data and know things that are happening out there. I mean, nowadays people are hacking into washing machines also. So we got to be able to you know,
1:04:31
be able to
Mark 1:04:32
manage this. So say that again. You people are hacking into washing machines what is what does somebody do that but you put it on the Hot cycle instead of cold?
1:04:39
Well, it can be anything I mean, it can be shrink your sweater and you're not gonna know why well you
1:04:45
know, but you know, you can have leakage in the machine, you can have clothes getting damaged and you know, any anything can can happen. So, starting it off and you know, dryers particularly there, they can cause fires. So if they run longer time they supposed to add they can, it can affect sensors. So our new machine just to go back on your washing machine, you throw in a lot of clothes, it will sense the right amount of water to come in, depending on the weight of clothes, it automatically goes into the dry cycle, it will dry for the right amount of time, whether you want it damp, dry or extra dry, or you know. And so and then it will it has a refresh cycle and so on. And so the new things being developed are Wi Fi. And so you can have an app over here and start it or stop it. We're gonna have you can load your soap in there once a month, and then the machine will draw the right amount of soap to draw that amount of clothes that you have in there. When the detergent is finishing, then it will call us and tell us that my soap This is my this is the machine in this part of the country, please send me and refill me I'm about to finish the owner has nothing to do with it. We are we are. So we just send it to the customer. And here's the soap to refill. It's finishing customer said Well, I didn't know it's finishing, but here it is. The machine calls us and says my pump is breaking down send me a replacement, maybe even before the customer, we're not waiting for the customer to tell us and all those metrics are being tracked. You know, the time so we know these things before. So the biggest risk we're facing is that somebody can get into that system and do something and then it becomes a fire hazard or something you know, or water hazard.
Mark 1:06:24
Oh, yeah. So I guess it's not necessarily, you know, the Russians, it's it might be somebody just tinkering and causing a problem?
1:06:34
Yep. That can be I mean, there's a lot of people who have nothing else to do seems to me, I don't know why they're doing it. But
Mark 1:06:40
the owners, the owners do that, like, Oh, this would be cool. Let me let me figure this thing out. And yeah,
1:06:45
but it can be dangerous. And you know, you have you have sensors in there for right amount of water, and there's something somebody disabled, that machine's gonna overflow, and then you have all under and then you have a liability issue. Of course, you have a whole apartment building getting flooded with with water.
Mark 1:07:00
That's a huge problem, for sure. kind of think I had reminds me something that I'm not gonna rebuild, remember, but wanted to go back, you said something about the highs and lows. The worst highs are the best highs and the worst lows. And I had this belief that I'm not the only I didn't invent this. I've heard this from other people, but they're two were linked. You can't we can't have one without the other. You can't use your ability to the privilege of having a great high is going to be with the responsibility of a deep low. Like, what was your epiphany moment of that, like, wow, this is this is real. This is This is tough. It's not for everybody?
1:07:37
Well, that's, that's a great point you made, you know, and I think most entrepreneurs are, are driven by a bigger purpose, you know, apart from just money. And so for me, the the high highest point and that is to is to make a sale to a customer for a product that I have conceptualized and produced. And it's here, and I'm presenting it to a customer, let's say to a large company like Home Depot, or Lowe's or whoever and saying, here's my product, you know? And they say, Yes, we think it's a great product. Basically, somebody is believing what was what you've conceptualized and saying, fine, I believe you, I'm going to bring it to life, because that is the ultimate life that a customer takes it and you know, otherwise, you can have a great product and it doesn't sell. So that is the greatest success. That's something you've imagined, and convince somebody that he should believe your way of thinking that it's valid, and is ready to pay you for it.
Mark 1:08:32
Right? That's the ultimate stamp of belief that is the ultimate high. Yeah.
1:08:37
Yes, you get the money, but money passes through a company or I still get a salary like everybody else, you know, right. So it Money, Money flows through money is reinvested in the company, all that goes on, but that is the high what I think entrepreneurs really work for that what you believed in, has come to fruition. And
Mark 1:08:54
somebody believed, and I think it's some form of validation. And I think a lot of entrepreneurs struggle to find out or to figure out, their formula for validate a lot of them are chasing, they're going after something that if you said, Is that your form of validation? Like I don't? I don't know. I don't think so. But I'm chasing something. So it sounds like you can articulate that. And I think everybody can I do believe it some, in most cases, some form of validation, like, absolutely,
1:09:21
yes. I mean, if one, if an entrepreneur wanted to take the safe way out, he'd get a job and get a salary at the end of the month, you go through all these risks, because you believed in something you believed of something you thought about is a better way of doing that process or making a better widget. Ultimately, that's where it is. And if somebody believes you unwilling to pay for it, that's the ultimate validation, right? Conversely, the law is exactly the opposite. The ultimate law is failure for you to face your customer and say I failed, or my product failed, or something you did, the customer says But you told me that and you have to acknowledge that You were wrong,
Mark 1:10:00
you're wrong, or you broke your promise, or
1:10:03
I broke your promise. And you know, and somebody says, Well, you lied. I didn't lie. It just didn't happen. Business circumstances were beyond my control. And all of us face that you have circumstances beyond your control. And nobody wants to believe that. You said it's going to happen. And your word was it, and you let somebody down. That is the ultimate law. Well, I
Mark 1:10:24
think that's probably true, you can extend that. Because I, I've had lunch with a group of entrepreneurs today, and one of the things we talked about was, we were around and around the table and shared experiences of when we were most scared. And several of the stories at that table had to do with the fear of losing everything, or most everything, a very common scenario. And so I think it can boil down the common denominator of letting somebody down and we are in the business of trying to meet or exceed someone's expectations. Pretty much universally, I just thought that as that came out of my mouth, I'm I wonder how true that is. But I think it's probably pretty close. And then therefore the converse is exactly what you said, the lowest lows are the threat of letting somebody down. That matters to us. And if it's your customer, if it's your reputation, if it's yourself, it's your spouse, your kids. That's, that's the ultimate failure of an entrepreneur. And I think as I'm kind of talking to you, I think that's kind of at the root of it, when people say, hey, entrepreneurship is tough, and you don't have an idea what I mean, and you know, the rewards are may be great, but the risks are really greater. And you think this is fun and games on the outside, you should try it, it will, it will raise your hair. And this is really the battlefield where life and death is at risk. And I think it comes down to that, because we put ourselves out there 100% or 100%, to meet or exceed someone's expectations. And we've promised we can do it. And those lows are some manifestation of like, Oh, no, this is when I fail. The people who I promised I wouldn't fail the people matter most to me, my family, my customers, the combination, everybody, everybody we've ever known for the last 30 years, like if you you know, because as entrepreneurs, our communities become synonymous with the combination of our, the whatever time we can carve out for our family and all the time we have. It's our whole world. So it becomes binary, we're either a success or failures.
1:12:38
That's right, there's there's no other way you and actually the goals of success keep getting keep changing, because you don't start off saying okay, in 30 years, this is what I'm going to be you're fighting every day, you know, to inside, and I don't want to say survival. But in some ways, it's like that I look at what Bill Gates said that Microsoft is no more than 90 days away from going out of business. And if Bill Gates says that, well, who are we? I mean, you're fighting every single day, you know, your competition, you know, your limitations. You know, what the threats out there you look at what's happening now and globally with this Coronavirus issue, the global supply chain, there's so many things that are popping up it's like you know, you're playing some kind of game over there where you have all these threats coming your way and you're trying to survive and keep everybody happy.
Mark 1:13:31
Absolutely. And I say this a lot lately that you're paid in proportion to the degree of chaos you're willing to turn into structure and that may not be easy to understand with the way I say it, but it is about people want predictability they want order in their world they want to know that tomorrow is safe in general. So humanity is trying to do and the future is unknown The future is obtained by isn't k all things on structured on ordered are in the future is this is exactly that. So salespeople, their job is to take money not yet earned customers not yet bound and turn them into some form of well understood money. Like we I know I can work with money, it's very structured, very ordered. And so they're paid big money because they're converting chaos and unknown into structure in order and money and that they we can work with entrepreneurship is a same kind of thing. Every big business out there is in some form a an order creating machine taking the future in its unstructured capacity. And the more bumps you throw in the way like, you know, uncertain economy, political turbulence and the chaos gets wider and bigger. And so their value gets gets higher, because if they can continue to convert that into chaos, which is why the stakes are so high because you're by definition, doing something based on an unknown uncertain outcome.
1:14:49
That's right. And I think it's just getting more and more uncertain, you know, and it depends also depending on the field you're in certain certain things are more risky, certain certain fields are less risky. But eventually there is a certain dependence on in the entire supply chain, whether it's for services or products or whatever, there is a great deal of uncertainty.
Mark 1:15:14
Well, so a couple things I probably need to wrap this up, did two things I want to kind of maybe wrap up on is, you know, looking at what would you tell your 30 years ago, self, I mean, there's, there's lots in the book, I know that people will have notes to the book people can can download, there's an audio version of it and all that, so people have access to that. But if there's one thing like, what would you say, like, you know, a tool, you know, which we're about to get into is gonna look like this. What would you What would you tell yourself best advice?
1:15:46
Well, all I would say is that be as flexible as possible, expect the unexpected, do not be rigid. As all related to the same thing, you know, do not ever stand on something and say, This is what I believe in, because you'll be forced to compromise and do things you may not believe in. Because for the greater good of the company, and your customers and everything out there. So all that gets thrown out, you'll be tested, like you've never been tested as an individual before.
Mark 1:16:15
So it comes down to, because you're going to need to be flexible. The dynamic is so high, you will have to know yourself at the core, otherwise you won't be able to make the decisions.
1:16:27
That's right. I mean, it's not about yourself, you can't say this is what I believe in. Because we all start off, we all believe in things. But then you have to say no, this is what I have to do for my company, for my brand for my employees, and ultimately, for my customers. So whatever I believe in, I'm nothing. Actually you work for others, at least the transformation of that.
Mark 1:16:54
Right. Okay. Yeah. So that's, that's important. So I had this conversation again, with another company I work with that the company feels like they work for the guy who started it. And we had, and that's not workable, right, you know, the servant mentality is doesn't work. And that and I know this guy, well, that's not what he wants, he wants to help these people be successful. And it's for an external vision, there is a company, there is a purpose, there are things we were all servant to, in the in the entrepreneur, owner, leadership team, their job is to really take the obstacles out of the way, which is what you definitely implied and spoke to about, like, you know, I've got to have access to the problems and the obstacles, my job is to remove those obstacles, so you can be successful. So we can make this vision real. So we can all contribute together, I'm a paid employee, I get a salary, and I have a job that's really important. And that is to get the obstacles out of your way. So you can make your highest contribution and the purpose external from me, can become real.
1:17:56
Well, to your point is very interesting. And sometimes, I mean, we have defined in our company, that the customer is the most important person, and we have to we do everything for the customer. And sometimes it happens that we have a complaint from a customer or something happens, and then we have a team meeting. And then somebody says, Well, the reason and I say, Well, why did you do something like this? Or what what was your rationale? Because I need to know your thought process. And the person said, Well, if we had done it this way, it would have cost the company too much. Too much money, and we would have lost money. And and I then I go back and I say Listen, if you were a customer, would you have liked that to happen to you? We want to follow the golden rule, which is treat your customer the way you want to be treated. Treat others the way you want to be treated. So would you like such a thing? Yeah, do have you would you if you were a customer, would you want to be treated that way? And the person says no. I said, Well, then why are you treating our customer that way? Yes, it cost us money. And a business owner? Of course, I don't like you telling me that. But so don't tell me that you should have taken care of the customer in the first place. Yeah, so that is you go back to the roots of it that, you know, that's the only way forward. Yeah. especially nowadays. And we deal in consumer products, we have reviews, and blogs, and so on. So there's no secrets out there. Everything is out in the open, people say what they want. And there's a whole different world out there and you cannot afford to alienate any of your customers.
Mark 1:19:22
Agreed. So what would you like to? You know, I think we've covered a lot and I really appreciate all you shared, what's on your mind. Is there anything else on your mind you'd like to share before we wrap up?
1:19:36
Well, I think, you know, when I was writing the book, I wanted to actually talk about the definition of an entrepreneur and see what that is. And I think over over the years, I've come to believe that entrepreneurship is actually a gift. You know, which I didn't think it was, you know, at some times one actually felt It was a burden to be thinking independently and not having a steady paycheck and taking risks of yourself and your family and so on. But actually the way entrepreneurs think and you have to think he, where you have the ability to make things happen to conceptualize and to, anything you can think of is up to you to make it happen to create demand for a product to manufacture a product to call any one and do anything to promote your business and what you believe in. Ultimately, not everybody can do that. And it's a gift. And to realize that is a very powerful. And after 30 years, I can say I finally got wisdom.
Mark 1:20:36
Wow, wow, that's really powerful. As I feel the same way, and I said the same thing, after I sold my business, that's when I came in touch with it, right. So I sold the business got rid of the problems I needed to get rid of I was on to the next chapter of my life. And I did find myself really sad that I didn't have that freedom, we'll call it, I'll call it freedom. And it was an identity thing to some extent, you know, I my identity had changed. I wasn't a business owner anymore. I was a former business owner, that is a very different animal. At least that's how I felt it. And I and I, and I've said that over and over again. I was like I lament the loss of the gift I had in my in my possession, and I would have treated it differently. The entire 10 years I ran the business if I knew I knew then what I know now. Now I was running the wrong business. That was not the business for me. And it was and I and I've learned what I needed to learn. I was on the path I needed to be on for sure. And I wouldn't, I wouldn't trade it. But that was definitely the feeling I had was a gift. And I would like in it. I think entrepreneurship is a brand or manifestation of freedom, which we hear lots about the responsibility. Freedom is not a one way street, like you know, how much freedom Do you want all of it? Oh, I don't think you do. When you get the responsibility that goes with freedom, you have the freedom to break everything, you have the freedom to disappoint people, you have the freedom to fail, all of that goes with the freedom to succeed. And then it goes in with it. So I do think that the downside is exactly the opposite into the upside. And so it is absolutely a gift. And I love that you said it that way. I really appreciate that. I think it's a great place to end. I appreciate you saying that. How to if people want to learn more about the book when I learn more about you. How do people find you?
1:22:20
Thank you, Mark. It's a great, great conversation we've had people want to buy the book. It's available on Amazon. And it's available in three different versions, which is all three, paperback, Kindle and audio. My name is atoll. We're at IU L. Last name is VR VR. So just look up my name, or the name of the book is called underdog thinking. The subtitle is a bold idea, a business adventure. And 101 lessons learned along the way.
Mark 1:22:48
So that's you're doing it wrong with Mark Anderson Lear and we'll see you next time. Thank you so much