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Hey there, freedom fighters. My name is Andrew Warner. I’m the founder of Mixergy.com, home of the ambitious upstart, and home of over 800 proven entrepreneurs who talk in-depth about how they built their businesses so that you can learn from their experiences, often go out there, have your own success story, and do what 800 others have done, which is come back here and teach. And we have had more and more entrepreneurs who’ve been in the audience, who’ve come back years later and say, “Hey, I used to watch you, and now I get to do the interview.”
And in this interview, what I want to find out is how a founder who lost his investors’ money ended up being a successful executive coach. Bryan Franklin is the executive coach who runs California Leadership. He has worked with top-level executives at companies including Apple, Logitech, Google, Cisco, and LinkedIn. I invited him here to talk about his story. Hi, and welcome.
Bryan: Thank you very much. I’m super excited to be here.
Andrew: How much money do you make as a coach? In 2012, how much money did you generate as a coach?
Bryan: So let’s call it $2.2.
Andrew: $2.2 million.
Andrew: How do you make $2.2 million as a coach? Let’s break it down, starting with where the big . . . and later on I’m going to find out about what happened with this failure. And you’re going to talk about this, I heard from your conversation with Jeremy, about cheating on your wife, which is tough, about rising from the ashes of a big setback. But for now, I’ve got to understand. How do you make $2.2 as a coach? The biggest slice of your pie is what?
Bryan: Well, so, there are one-on-one coaching engagements, and those are often monthly retainers, right? And for a, you know, a company, let’s say, we recently worked with a company that had 4,000 employees, and the monthly retainer was $28,000, right? And that was a day or two per month working with their management team. And then there’s often, you know, additional one-day meetings, which are, like, $15,000. And then often we’ll have clients that have an equity component, and we worked with a company called Clairmail that had a liquidity event, so it’ll be $200,000, $300,000, $400,000 or something, from a liquidity event. Which doesn’t happen every year, but, you know, you do enough of them, then they turn out.
I think in the last 12 years, California Leadership has earned, I don’t know, $8 or $9 million in revenue from stock. And then we do group programs for entrepreneurs, and those group programs are, for example, a year-long program for 40 people, that’s $20,000 for each person. And then, we have a distance program for many more people than that. No upper limit, which is 5,000 for the year. So, we do all that and, you know, I don’t actually sit, I don’t do my numbers with a sharpened pencil. So, it’s probably about half from the coaching and the rest distributed maybe 60, 30 from the group programs.
Andrew: And, coaching that you do for a company that has 4,000 employees, you’ve charged them $28,000 to work just with the management?
Bryan: Yes, correct.
Andrew: I see. So, if they have more employees underneath them then you can charge them more money?
Bryan: Well, not exactly. The reason why I said 4,000 employees is because that would tell you about how many of the management, how often we’d have to meet with them, how many of them we’d be meeting with.
Bryan: So, we generally do a per manager per month retainer, like $5,000. And then, we’ll discount from there depending on, you know, how much they’re doing and for how long they’re committing to. And so, 28 was probably a $30,000 contract that we just counted a couple of thousand, something like that.
Andrew: You originally got into coaching when you were 27 years old because of something your mom said, right?
Bryan: Yeah, exactly. I had just sold my company. I did a service business in the entertainment industry doing sound and picture editing for Hollywood. And, I had this dream of being a huge mogul. It was kind of take over the world and be the next dream works. And, that was my idea anyway. And then, sold the company. And, my mom said, “Well, why not you come work for me and be a coach?”. I thought that was a horrible idea you go work for your mommy when you were 27 and coaching just seems so soft. And, you know, kumbaya. And, I want to do something real. And then, she said, “Well, why won’t you take a client? Because there’s a client who needs help that I think you could help. Only take one client. And then, while you’re figuring out what next multimedia mogul opportunity that you’re going to pursue, why don’t you just help this client in the meantime?”
And so, I agreed and fell in love with it. It was so easy, first of all, to deliver value. And, I love the sort of raw value exchange. The idea that you can sit down in front of another human being with basically no preparation and no deliverables. And, change the direction of that person’s life in that meeting and that you have to do that every time. You know, there’s no hanging out at the water cooler or coasting. If you’re an executive coach, particularly you’re building a lot because if you have one or two meetings that are kind of soft then that’s the end of the contract. Right? So, I fell in love with that. It felt like a dojo for value exchange, human to human value exchange. And, I love that. So, that was in early 2000 and I’ve been doing it ever since.
Andrew: What I’ve noticed with coaches is that they have some framework that they just keep snapping back to that I used to think if there was a problem, they have a solution for it that they just whipped up out of nowhere. It’s kind of like improv in the sense that improv comics make up the jokes on the fly. But, they also have some work that they’ve done ahead of time so that they could squeeze in proven jokes. And not have to constantly rely on making stuff up that’s brilliant on the fly.
Andrew: What were, what was your framework or what was the thing that allowed you to do well even when you didn’t know what to do?
Bryan: Right. So, first of all, I think in the category of secrets of my success, one of my secrets is that my framework is always evolving and I’m always operating right on the edge of my own discovery which has it have a kind of a magical quality instead of a stale joke that you told a bunch of times. Right? But my first framework actually was from the human development, the human potential movement, and my involvement in an organization called Life Spring which is analogous to landmark in the S training. And, when I was 19, 20, 20, 21 years old for three years, I ran the leadership program as a volunteer for those three years. And, I was responsible for all the registrations into the trainings in L. A. So, I ran the Los Angeles Center Leadership Program for three years in college. And, that kind of the Werner Erhards [SP] syntax and understanding of powerful language and language that creates possibility. That was really my framework.
Andrew: I see. And that’s what I’ve noticed a lot with coaches, too, that when they start out they piggy-back off of an experience or someone else’s program and then they make it their own, and then they come up with something that’s completely unique. Like I think Tony Robbins did neuro- linguistic programming, NLP, for a long time, and then he came out with NAC, neuro-associative conditioning, which was his twist on that so that he can teach his own thing. And then he came up with all the things he has done since then that are different. It seems like that’s what you’re saying you did, and still…
Bryan: I was just going to add that that created one pull, and NLP, or neuro-linguistic programming, which came for me three or four years into coaching, created my second. I had two models, and I would go, “This one? No, that doesn’t work. OK, this one? OK, that doesn’t work, and this one?” I did that for years, like you were saying, and still…
Andrew: I see. Actually that’s pretty good advice too, I think, for me as a leader. I feel like I’m always trying to make stuff up from scratch when I talk to people, when my own people have trouble, when my audience and customers have trouble. I should just be really clear about what my framework is or steal someone else’s framework, with credits, I shouldn’t say “steal,” just use it, and then adjust based on whether it’s working for people or not. Or take what I already learned and make it into a framework and if it doesn’t work sit back and say, “Well, why didn’t it work in that conversation” and then tweak it. Kind of like what we do internally, just systemize things like how to edit an interview, how to pre-interview you. That wasn’t just winged. Jeremy used the framework that we have that keeps evolving. So you were on the right track and still something happened. What happened to that client?
Bryan: It was a couple of years into coaching and, as I was saying earlier, it happened to be my first client, so I’d worked with him for a long time. They were one of those good clients, where they actually do everything you say. One of the big frustrations of coaches is “I gave you the advice but you didn’t follow it,” or “I tried to help you but you didn’t help yourself.” I had no such excuse in this case because they really implemented my vision for what leadership should be, and then the company hit the dirt. They closed down. When that company failed, it really rocked me. It rocked me because it challenged all my beliefs about what creates it best. I kind of bought into what I still think is a really common notion that good leadership boils down to creating comfortable, pleasant relationships with people who are working for you, keeping everyone motivated.
There’s this idea that happy employees are more productive, so if you keep everyone on the team, a nice open dialogue, decisions are talked about openly and then they’re made, and then everybody knows what they’re working on and how that relates to the new strategy, then it all will just kind of work out. When it didn’t work out it made me realize that… I just felt like a fraud. I felt like everything I’d been teaching people to do was sort of window dressing, or it was the icing and I was missing the cake, because you shouldn’t fail if you do things well, I thought. I was devastated. I was totally.. It was hard for me.
I had really believed that if you followed my coaching, or if you followed Werner Erhard’s method, or if you released the limiting beliefs you had and so that you could believe you were successful and you have all the right stuff going on and released the past that you could actually create the future you wanted. And when that didn’t happen I was like, “OK. There’s an element of bullshit to this, and I have to find out what’s true,” and that was scary. I wasn’t prepared for that.
Interviewer: You know what? We’ve all gone through this period where we get a success coach or we buy a book or we buy a big program and it doesn’t work for us and we say, “Maybe that guy’s a fraud. Maybe this whole thing is a fraud.” And sometimes we’re right, we have to call him a fraud and it’s time to really get out of this multi-level marketing scam and go the right direction. Other times it’s us, that we’re just seeing the world differently. Were you being a fraud?
Bryan: I think yes, in a way. I mean, I wasn’t aware of it, right? When I think “fraud” I think someone who’s telling you something they themselves don’t believe. So no, I was not doing that. I believed it, but I wasn’t competent. Actually I wasn’t competent to help people be successful. I was competent to help people be more comfortable. And I think that a shockingly high percentage of current executive coaching relationships are basically comfort relationships. And the client claims they’re successful, the coach claims they’re successful but when you look at the actual outcomes, there’s no change. It’s like an anesthesia that can make you more comfortable or more happy about your current situation and the idea that I had been charging high fees for anesthesia that I and the client both thought were actually effective medicine, it was, my friend Andy Wallace, he went to [??]. My identity couldn’t survive that realization.
I don’t know if your listeners have had this kind of situation where just nothing makes sense and I just went home and wept for days. But now I’m very thankful for that because it started a different frame of reference for me, which is one where so there I was and I still had coaching clients who were paying me and now I was sure that I didn’t know anything about making a person successful and I was unwilling to pretend anymore. So I went to them and I said, “Well, we are going to do this a little bit differently. You’ve been reasonably successful. You are in this position, you achieved these results. Why don’t you tell me what worked? Tell me what you think is actually underlining what makes this thing work. And if you failed, why did you fail? And teach me.” And I was sure they were all going to fire me, like “OK. I’ll have this last meeting with you and I’ll help you understand. But after that I’m done.”
But I suppose you can predict it now but at the time I couldn’t. The relationships even just grew stronger and it got more out of them because we were on the path of discovery together.
Andrew: So they were paying you and you’re saying You tell me what’s working for you.
Andrew: I had a similar experience at Mixergy where someone was paying me but I went from saying “Hey, you know what. I know how to do everything because I have a big hit behind me and I never had a big failure and life is good and I know more than anyone else in the planet.” But things didn’t work out for me with the first version of Mixergy. And I had to do what you did which is say, “I’m not going to pretend I know anything. I’m going to start doing interviews and asking questions and I’m going to learn.”
And the audience grew, my knowledge grew. I felt with more substance here. And I told that story to someone who said, “I don’t want to lose my customers. I don’t want to not get a job from people who are coming to me because they’re unsure of their lives.” It’s really hard to step away when I was just telling my story, it felt like, “Easy, why doesn’t everyone do it?” When I heard someone’s real life situation, I suddenly got hit with the reality of, “Hey, you can just do what Bryan is talking about, what I’m talking about, which is just tell the world I don’t know anything. You teaching me, you paying me anyway.”
Bryan: Well, I say something which is direction is more important than position. In terms of getting someone’s respect and whether or not a dialog is actually going to be helpful or useful to someone. Then direction is more important than position, that you’re becoming more honest with yourself is more important than how honest you are at the moment. And integrity isn’t a location or a position you arrive at, then you have integrity. Integrity is the continuous ongoing process of discovering what’s not true in yourself and correcting that.
And so the fact that you are in a mode of learning to me is what makes the audience grow. Not that you’ve learned it and now it’s behind you.
Andrew: Someone else is a coach or a CEO or in any kind of leadership position and they realize ‘Oh, my God. I just don’t know what the hell I’ve been doing’. Maybe they sit on it for a while and say, “Is this momentary insecurity because of something bad that happened to me or because I’m in awe of someone great or is this real?” And if they spent some time and they realize yes, it’s real. I just don’t have any substance. I was talking for so long that I didn’t even realize that there was no substance behind the talk. Now it’s time for them to go to work and you say tell the world ‘Hey, I don’t know what I’m doing’ and still expect to get paid.
Bryan: Yes. That’s exactly what I’m saying. I would actually flip it around.
Andrew: To get like mercy money. Why would I pay someone who just says, “Hey, I’m going to be your coach but, Andrew, I don’t know what the hell I’ve been doing. You tell me what’s going on.”
Bryan: Because I don’t think the value that we give each other, as coaches or as leaders . . . I mean, a CEO is a leader, a coach is a leader, in a way. We’re leading someone from Point A to Point B. I think your credibility as a leader has nothing to do with what you know. It has everything to do with your ability to be in a state of learning from your environment. And, you know, the CEO or the coach who says that they already know, to me, is far more dangerous than the one who says they don’t know and they’re willing to learn.
Now, it doesn’t mean you can say, “I don’t know anything.” I mean, that’s not realistic. Of course we do. But you’re looking for, you’re attention’s on, “What’s the piece here that I don’t know yet? What’s the aspect of my environment that I don’t yet fully understand?” And, to me, really effective CEOs have all of their attention on the stuff they don’t know yet, which means they’re constantly in a state of learning, which means they’re very rarely sort of telling you what they know, or taking action based on what they know. But you’re actually taking action based on what you are perceiving right now, in real-time, as you learn, which is a more accurate perception. You’re actually dealing with the actual world as it is, versus dealing with your characterization of the world as modeled as modeled by your knowledge of it, which is always imperfect. That make sense?
Andrew: It does. But I’m wondering, Bryan, if we can merge the two worlds. Because what I’m hearing is two different worlds. One world is, “Hey, I know everything, and I’m going to speak with such confidence that people will just follow me, and I will believe my own BS.”
Andrew: The other one is to say, “I don’t know anything, and I’m just going to ask you questions and try to figure it out with you.” And that, to me, seems a little weak. Because I’m not coming to someone who needs to be babied. I wonder if there’s a middle ground. Something that says, “Hey, you know what? I heard this framework that basically says,” whatever the framework is.
Andrew: “I’m not sure if it’ll work in my situation. But it seems to apply, and it seems to work for others. Do you want to try it together with me, and we will learn to see if this works or not?”
So maybe it’s, “Hey, you need help starting a company? I don’t know how to start a successful company. But I read Eric Reese’s book,” or, “I talked to Eric Reese,” or, “I studied it. I see the process of coming up with a minimum buyable product. Of testing and pivoting and testing and so on. Do you want to try it with me, and then we’ll ask ourselves, after each step, did we do it right and fail? Or did we do it wrong, and that’s why we failed? And then we’ll keep course correcting.”
Andrew: Does that middle ground . . . does that merging of the two worlds work?
Bryan: It totally works. You know, I think you can even say, “I’ve created three successful start-ups, but two failures. So, you know, I don’t know whether this one will be one of the successes or one of the failures. If I knew exactly how to do it, I would be successful every time. So I don’t know. But let’s use the framework that has worked for the successes, and let’s, you know, course correct as we move along.” I think that’s a very, very powerful hybrid.
Yeah. I think you only have to get to the place of saying, “Sheez, I don’t really know anything,” if you’ve gone asleep for too long. If you’re always in a state of learning, you’ll never have to be that far off course. The reason I’d gotten that far off course is that I’d spent three years basically proselytizing a model without really investigating for myself whether it worked. It just sounded right. I’d observed other people have breakthroughs. They seemed to correlate. I believed it. And I went on belief, instead of on direct observation. And both internally, for my own truth, and what was working in the world.
And I think . . . there’s a Nietzsche quote that’s something like, “Beliefs are for people who don’t want to know the truth.” And so, you know, I’ve since then adopted this kind of, the fewer beliefs, the better, approach. Where, sure, we have an understanding of what’s worked before, but rather than having it like it’s true, like a belief, where you have a mental concept which you treat with the same respect as you treat the physical world, I think that’s very dangerous.
And your hybrid approach, I think, is wonderful. Because it’s, “Here’s the mental construct. Let’s use it to save time and get started. Some smart people spent a lot of time proving this out. Let’s see if we can be a proof of why it’s successful, or if it’s not, we’ll figure out how we need to adjust it to make it work for ourselves.”
Andrew: OK. I don’t know why . . . for some reason I needed your permission in order to think that. I don’t know why. Maybe it’s just the position of being an interviewer puts you in that place.
Andrew: So I see now how you were getting better. And in a moment, we’ll find out you had still another setback.
Andrew: But at this point in the story, you were growing by opening yourself up to learning from your customers, from your clients. What’s one thing that you learned?
Bryan: Sure. Well, one thing I learned. We were talking about leadership a minute ago. And if you think of leadership as the sort of ability to create a different future that wouldn’t have happened anyway. There are the other people so that other people are actually doing the enactment of that future. That skill is really not necessary in the early stages of a company. That a founder with very poor leadership but with a very clear idea that just tells people what to do and basically fires them if they disagree works better in the early stage than a great leader who is using leadership as a skill to mobilize people.
Andrew: So in the early stages, it’s OK for me to say, “Hey, we’ve got this one of doing things. Let’s all do it exactly this way together. I know you have other opinions but come on, I need you to do this. If it’s not right, go somewhere else.”
Bryan: Exactly. I mean, a team of five people, a team of 12 people, how large the team can get, well, that still works, it depends on how often the founder is right, like, how good are they at predicting . . .
Andrew: Give me an example because what you’re saying here actually doesn’t sound right. It sounds a little bossy. It goes against what we all believe. It goes against what we’re supposed to believe, I should say.
Andrew: So give me an example of a leader who says to his people, well, says what?
Bryan: So I worked with a company and they got into about 18 employees at the time.
Bryan: Yeah, 18 employees. I was coaching the founder and there were two other VPs, so three of them. This company now has 750 employees, by the way. So they’ve been a success. And at that point there was one of the lead technology folks was saying that they needed to do their data modeling in a very different way because they needed to account for this possible future which would be detrimental. And the leader said, “No, we’re not doing it that way, and you’re kind of dumb for thinking that that was going to happen.”
Now calling this genius dumb, I think he said, stupid idiot, something like this. Maybe, even with an expletive. It’s bad leadership. The guy, he walked away, he was totally frustrated. He’s like, “I don’t know if I can work here.” They had this big falling out, and the leader said, “Look, we’re doing it this way. Either you’re going to do it this way now or you’re leaving.” The guy left, they hired someone way less credible in the role, way less capable in the role who followed directions for the next nine months and executed extremely fast. The eventual future that the guy was worried about seemed less and less possible, more and more less likely as time went on. The leader’s decision, his insight about what was going to happen proved out to be correct, and then they were able later on to hire again, more capable people who leaved the division because there was more physicalness to it. It had been happening more.
I think a better leader would try to investigate that issue further and get them on board. Buy-in is extremely important to a leader because buy-in determines the speed of execution after you leave the room. I think in those early stages, if you spend a lot of time on buy-in, you’ve lost really, really valuable execution time.
Andrew: In other word, don’t try to get people to buy-in in the early days because it takes too much time or don’t allow people to come up with different ideas for what you should be doing because it loses your focus. At first, you’re a small team with few resources. Everyone has to do exactly with the leader says.
Bryan: Yeah. Exactly. It’s a total despotism. Exactly. First of all, the buy-in is still important, but the buy-in works like this. “Hey, are you bought in? This is where we’re going. If you’re not, you can go somewhere else.”
Andrew: I see. We’re going to do interviews with just people in the tech world and only interviews if they have video. I know you have other ideas for how we should do it live and in person. Do you want me to create the studio? No. If you buy-in to do video Skype with this kind of entrepreneur. Great. If not, go find someone else who’s going to be open to a studio. I’m not ready for it at this point. That’s what I should be saying to my team.
Andrew: All right.
Bryan: Imagine how much time that saves. I don’t know if you actually have these same kinds of conversations come up again and again and again. You get, like, four PhDs in the room who are all experienced in the startup world, and they all have different successful startups behind them who achieved their success through different methodology. It’s going to be really hard to agree on one methodology because everyone has made $100 million on a different, conflicting methodology. So it’s time to be like, “No, this is what we’re doing or not.”
Andrew: You don’t hear too many unique ideas in these interviews, because frankly there aren’t too many unique ideas. I was actually talking to one of the founders as Pixar about how he did it, and as he told the story I said, “Well, all these ideas are basically the same as I’ve heard everywhere else.” Maybe all that’s different in the world is the stories that we tell to communicate those ideas, and the stories that we communicate to get buy in when we have a new method.
Anyway, this seems to me unique. It seems to actually be true to what I’ve experienced in the world. I’m just going to ask my audience, if you’ve heard this somewhere else before and I’m missing out, awake me. Tell me in the comments or tell me privately. Also, if you think that I’m buying in to this and I shouldn’t be, I want to hear about your opposing point of view. I usually don’t open this up for conversation, what we hear in the interview, because I want to hear your truth, not start some kind of argument in the world. I am curious. I resonate with what you’re saying, and I want to hear from the audience.
Let’s continue, because now you’re doing well. Then you say, “All right, I’m going to parlay this into a business, what I know.” Right? The business was started out with …
Bryan: What happened next actually was trying to figure out what to do on the investment front. You know, I’m starting to make money. Once you make money the question is, how do you grow it? I spent all night on the internet looking at buying apartment buildings, and what cash and cash return is for various real estate projects. The stock market seemed crazy. This was 2002, or 2003, or something like this. [??] I had too many bruised, and bloodied, and battered friends for the stock market to seem like a wise investment.
I had been reading the “Rich Dad Poor Dad” Kiyosaki book, and I knew that passive income seemed to be a thing, which I now believe is somewhat of a myth. Then I identified that you can actually buy a website that’s cash flowing for, in some cases, less than one year’s cash flow. These websites are often available for $100,000 or $200,000, and they’re cash flowing $100,000 to $200,000. At the same time you could get a credit card, and you could actually write a check off a credit card for $100,000 or $200,000 at that time. It’s a little more difficult now. As long as you make your payments on time you pay 1-1/2% interest.
So, I’m thinking I could get an unsecured business loan for 1-1/2% and buy the business that cash flows 1 or 1.2 times the price. This is a [??]. So, I did that. I bought a company called [??] and I grew it to be two or three times its size in the first year. It was a huge success as an investment. It was awesome.
I did this also. I can’t remember, but I think I spent a little more time on it in the first year. It got to the point where I was spending an hour a month on it. I had someone managing the business and I would just check in with them for about an hour a month.
I was like, if this works at $100,000, it would work really well at $1 million, or $10 million, or $100 million. As my friend, R.C. Pack [SP] who is a financial educator says, “once you get a good idea, you back the truck up and you dump all your cash into it, and hope that it works better.” So that’s what I did. I said, “I’m going to do 100 of these, but we’ll start with 15, [??] something crazy.” So, I started a private equity fund, raised about a million and a half dollars. I think 1.35 is what we ended up taking in, in cash from friends and family around, although thankfully no family. It was just friends and friends. Then we bought a bunch of these businesses.
Andrew: Before you continue, this is filmstaff.com that you bought?
Bryan: Yes, which doesn’t exist anymore.
Andrew: I’m in archive.org and I see current job list, update your profile, post your resume, and revenue is coming in from where, people?
Bryan: It aggregated jobs for the film industry, meaning jobs on set, not office jobs.
Bryan; Then you pay $19 a month to get a current list of current set jobs that you can apply for with very little experience.
Andrew: Got you, you were aggregating it, so you didn’t even need to find the jobs. They were already on Craig’s List and other places, backstage, and you were giving it to people who were giving you a monthly fee to find jobs like this.
Andrew: Got you, OK. You moved on from coaching …
Andrew: … because there wasn’t money in it, right?
Bryan: No, I was still coaching. There was no moving on. This was supplemental. This is basically what I did instead of buying real estate or apartment buildings or buying gold.
Andrew: I see. You’re saying to my money somewhere. I need some passive income because coaching is all about my time my work.
Andrew: Okay. You bring in that much money. That’s a lot of money from friends not family.
Andrew: And then you start buying up a bunch of companies?
Bryan: Right, okay.
Andrew: Then, at what point did you realize it’s not working?
Bryan: Well, it started not working immediately and then it got worse and worse. I think our largest purchase was a company for about $360,000. I think it was a company that did selling refurbished Cisco networking equipment. The idea was bids come in through the site, then you get the bid, and then you go and shop for the same products at a lower price from aggregators. And then you package it and sell it to the bidder. We did a month of due diligence. We looked at their tax returns, we went through the site, and we went through all the orders on the site went through the merchant account. It looked legit and then when we bought the site. This is again supposed to be doing $360,000 revenue, in the first week there was like $400 in orders and $400 a week doesn’t add up to 360,000 year. We were like what’s going on? We called the seller, “Oh you just have to do a better job of sourcing.” What are you talking about? A month went by $800 in orders.
Come to find out later the sellers had a separate business which with a consulting business doing system design. What they would do they do a system design, and then they would ask their clients to order the equipment through the website, which they would do. They would offer them a discount to do that. The website captured all the orders but none of the traffic that associated with the orders, was actually creating the revenue. Then they bought a bunch of junk traffic to make the Google funnel look right.
Andrew: I see, and this was from your belief, intentional fraud?
Bryan: Yeah, totally 100%.That was like, “oh, crap,” you’re dealing with a pretty large percentage of your fund, and that thing was worth nothing within a month. Then about two more companies within two more fraud situations where the companies were not what we thought they were. Until we finally kind of finally caught on that, the only due diligence is actually have to run the company for a month. We become the business. Anyone who wants to buy property like this, the only protection is that you run the company for a month, as sort of a free employee of them. Then you do the transaction after having literally run it. And 99% of the time when you put that term in, the deal falls apart, that should tell you why. That was a really, really expensive lesson.
Andrew: I wonder by the way how people who buy sites on Flippa.com and look at revenue and traffic. How they can piece traffic to revenue, understand, and believe that the funnel it’s really what the seller says it is. You start up a great point.
Bryan: It’s extremely difficult. There are, I mean tracking and WebEx have come a long way since then. This was 10 years ago or eight years ago. So it was even harder then. But still now, you know, especially all it takes is a little bit of your own dopamine and your serotonin your excitement about, “Oh, this is going to make me a lot of money. It’s going to be great. It’s going to be passive.” You start having visions, and how your life in a change, and then all that and that’s all it takes for you to look past you know, wait a minute, there’s the traffic and here’s the traffic on the cart and here’s the revenue, but how do we know that came from these sources and with your Google AdWords campaign is going to continue to generate the revenue. The answer is, don’t.
Andrew: Don’t take this the wrong way, but how didn’t you want to kill yourself at this point?
Bryan: I was very sad. I remember when I’d gotten down to the point where I could liquidated the fund, I could return 0.16 on the dollar to my friends. I remember we did a monthly call with investors where I told them exactly what was going on. We had also a document where everything was really well communicated. I remember that last call where I was going to tell them things were over, and that I was sure that if I didn’t give them back the money now with burn the rest of it in operational funds. I remember thinking, “I would have given up the right to ever be wealthy, ever, in order to not make that phone call.” At no…
Andrew: You’ve given up money for the rest of your life–you know wealth for the rest of your life–to just not have to tell these people that you lost their money.
Bryan: Yeah. Well, to not have had lost it.
Andrew: To not have lost it, I see. If you could make them whole and then never start another business again, you would have done it?
Bryan: Yep. I would have gone into indentured servitude for life if I could have made them whole on that phone call.
Andrew: So, one of the first interviewees here was Mark Jeffries, a friend of mind, who came on and talked openly about how he had to tell his investor that he lost his money. How, after having big success, he was sleeping all day, he said. The only time he was happy was when he was sleeping. I totally get how he was feeling at that point. Did you feel that way? Did you feel so depressed that you didn’t want to get up anymore?
Bryan: Yeah, I did. I handled it a little bit differently. I ended up really gambling a lot and spending a lot of time in Central America. You mentioned cheating on my wife at the time and that increased. And I created a sort of separate life where I got to be happy.
Andrew: After the failure, I understand gambling, because you want to make big money so that you can feel as good as you deserve to feel–like, be as successful as you deserve to feel. I understand going to South America because it gets you physically away from your problems and maybe things are cheaper so you can live better. Cheating on your wife, how does that fit in?
Bryan: Well, I think it’s a hard thing. I was not whole and I was very deeply, deeply unhappy. And I was unwilling to bring that unhappiness to her. I was unwilling to be intimate. I was unwilling to have a real relationship with her.
Andrew: With your wife?
Andrew: Saying, “I can’t full be present with you and admit my failure to you, so I’m going to go somewhere else?”
Bryan: Yeah. And it’s…
Andrew: How do you sleep with someone else when you’re feeling like a failure?
Bryan: I think, at that point, it’s like when you’re depressed and you eat. Or people do drugs…
Andrew: How do you even get these women to go out with you? Is it that, through their eyes–through the story you told them in that moment, the confidence you projected in that moment–they feel that you’re a success and you’re great; and, you want to live that experience that they’re having with you? You want to be as great as you’ve convinced them you are?
Bryan: I don’t think that’s the story, no. I think it’s more likely that we both meet at a place of self-hatred and despair.
Andrew: I see…drugs, too?
Bryan: No, not so much.
Bryan: Alcohol, but alcohol was never a problem for me. Gambling became a problem.
Andrew: How big?
Bryan: I think I lost about $200,000.
Andrew: Wow. And what snapped you out of all of this?
Bryan: My ex-wife demanded a divorce.
Andrew: And that’s when you said, “I have to do, what?”
Bryan: So, this was the second big ego dystopia moment for me. It’s still tender. This was maybe six years ago; it’s quite tender. I realized that I was living a life where I had, sort of, figured it out. I had figured out way of making myself happy, I had figured out ways of seeming successful, and when she demanded the divorce, which anyone would do–I don’t blame her for that at all–I realized that , again, that I haven’t figured it out at all and that I was a horrible husband. I didn’t want to be a horrible husband. I had a four-year old son with her at the time; I just realized I really wasn’t the man I wanted to be; and, If I wanted to be a man I was actually proud of, I had to start with stopping gambling. It scared be, because I would gamble sometimes when I promised I wouldn’t. In my life, I sometimes have done extremes things but often they’ve been under my control, like I’m selecting to do this thing. Gambling was the first time I had made myself a promise and I had broken it. And so that scared me, and I knew it started with that, so I stopped that. And then I felt completely without a moral compass. I felt completely directionless and in that state I met a woman, and I had never met someone so amazing, so passionate, so capable. She was a president of an environmental chemical company, and when she spoke about her work, and she spoke about the work she was doing, I could feel the passion for saving the world, passion for her direct customers, passion for the people she worked with. It was just imbued in every word. I remember wanting to bottle that and give it to my clients, it was so amazing. I was just taken with her worldview and I fell in love with her. I said that I’m really confused about things like right and wrong, so I’m just going to adopt your values, because you seem to have good ones, and I don’t know what mine are. So on our second date, I told her everything I had done, and all of the reasons I was not a good catch. But that I wanted to love and do good in the world, and that I didn’t know how to do that. I was also very, very afraid that I would lie to her and destroy the relationship and hurt her.
So I made a promise that any time I would think something three times, I would say it out loud to her. So any thought that occurred to me three times, I would say it to her. That was my own fail-safe against manipulating myself into thinking that it was OK not to disclose something. That started an era of radical honesty, and that radical honesty literally set me free. Pretty soon into our relationship, Jennifer (which is her name), said, “Well, one of the things that I value is that you have your own values, and that they be yours. So you have to find yourself”. My only lifeline to finding myself at that point was that someone in here chose her. I selected her values instead of someone else’s. I knew there was some alignment there, and I traced that back to my own feelings about things, and basically reconnected with the worldview I had when I was four or five years old, that kind of idealism. I could actually live that ideal life, and be that person. And that is who I’ve become.
Andrew: And you became the coach you are today, the one who is bringing in $2.2 million, the one who is working with LinkedIn and so on. What I’m wondering is: you just had your big setback. Why go and be a coach? What is this need to tell people how to live their lives better? Why not say “I’m going to build a good software company” or “I’m going to just go get a job somewhere, and do my thing day to day, and come home and love my wife, and not have to tell everyone else how to live their lives, but live my own life”?
Bryan: It’s funny, because I don’t feel like coaching is telling other people how to live their lives. I think there are two kinds of teachers. There’s a teacher who is in the white suit, and they are pristine, and on the pedestal, and they’re basically a model of perfection, and your job as a student is to be as close to that model of perfection as you can. That’s one kind. The other kind is the one who, however far you have fallen, has fallen farther. However low you have been, has been lower. However bad the mistakes you have made, they’ve made bigger mistakes, and therefore have a road-map back to self-esteem, integrity, spirituality, success.
Andrew: But up and down you’ve wanted to teach. Not just when you thought you were guy who’d fallen who now had something to offer, but even when you thought you were a guy who was pristine, in the white jacket, you wanted to teach. I know there was a point where I wanted to be a coach. I wanted to be like a Tony Robbins, and I realized later on the reason I wanted to be like a Tony Robbins is that I was a big loser who couldn’t talk to people, and the people who I admired, who were going to save from this loser den were guys who were up on stage, recording CDs, teaching people how to be successful and they were projecting confidence and I didn’t just want to be helped by them because that put me in a position of inferiority to them. I wanted to be helped and then be like them or better.
And so that’s why I wanted to be a coach. And then once I recognized that that’s where it came from, I said ‘I can find better ways to get that’. And so I discovered my own path.
But at the bottom of it, at the heart of it, the reason why I wanted to be a coach and the reason I even wanted to do interviews via video where people could see me is because I wanted to be the guy who helped me, to not just be helped and be in some levels inferior to them but feel like That’s who I idolized. Now it’s my turn to be that, to be my own hero.
What was it for you? You don’t strike me as a guy who grew up being a loser.
Andrew: That’s my reason. What’s your heart of heart reason/
Bryan: I think that we all have a genius and that we can identify genius by the things that we find easiest and most natural. And helping people and making a difference to them is easy and natural for me. It feels like falling, like gliding, not like effort.
So to say that I wanted to be a coach is not really true. It’s more like if I sit down with someone and they have an issue and it involves the intersection of business strategy and interpersonal dynamics, then they’re going to have a massive breakthrough in that conversation with me. It’s just going to happen. And so it’s easy for me to do that, provide that and get paid for it. It’s what Deepak Chopra would call Darma. It’s just what I’m here to do, it’s to make a difference for people.
And I think that I will be involved in many projects and I won’t necessarily always identify as a coach.
Andrew: Do you on some level want to be a cult leader? And I’ll tell you why I’m asking this.
We were at dinner and I looked around and most people were in nice dress jackets, most people were coming to look professional. I unfortunately was just wearing a shirt similar to this. But I looked at you and where I might have button my shirt a little bit because I saw Hey, they’re all wearing jackets and sport jackets and jeans, but jeans that were really custom tailored, it feels like. These people were spending good money on their clothes. Your shirt was as unbuttoned as it is right now. There was a necklace like it is right now, like a rock star necklace. I believe that there was a rock star type ring.
There was something about you that says I’m presence here. I don’t need to conform to them, I don’t feel different. I’m a presence here. And I feel like, tell me what is that about.
Bryan: Well, for me it’s more my identity as an artist. I’m a piano player. I’ve been a musician since I’ve been 5. I write [??] music and performed at [??] and in other places. Self-expression is extremely valuable to me and one of the benefits that people get from the coaching with me is that they themselves feel more permission to be self-expressed.
So I don’t dress the way I think they would think of good. I don’t make the calculation of are they going to find me more acceptable, I mean, within reason. I wouldn’t go to a black tie dinner without a tuxedo but I would probably wear one that had a design on it, to express myself.
Andrew: I see that. OK, I see what you mean. All right. We didn’t even get into the music industry business that you ran. Why don’t we just get into why you left it and then I want to understand your coaching style? But why did you leave it? This is early on. This is before your mom said, “Hey, come be a coach.” It’s the business that you sold I think, is that right?
Bryan: Yes. Exactly.
Andrew: What was that?
Bryan: So we did sound design and picture editing for movies. And, in short I sold it because I met a guy who was in the business 20 years longer than I had been. And he was sort of my future path, you know. It was predictable that if I did this for 20 more years, I would be exactly in his position. And he had just won an Academy Award for sound design for ‘The Matrix’. It was awesome. His name is [??] Davis. Incredible. Incredible sound designer. I figured okay, I’ll do this 20 more years. I’m going to be like Daniel Davis and kind of be like, you know, matrix, 42, or something. Except for the quality of his life is exactly like the quality of my life. He worked 16 to 18 hours a day. He worked one or two days every weekend. He worked all day in his sweats. He was completely exhausted, would sometimes three weeks without seeing daylight because all of the sound studios have no windows. He had difficulty maintaining relationships outside of work, just like we all did. So just didn’t feel worth it. Add to that that there’s no financial payday to it. The service businesses you’re looking at an 8% margin, 12% margin, 16% margin. If you doing really well.
Bryan: It’s just like, “Wow”; I get to give up 20 years of my life so that I can have my name on a movie credit. It just didn’t seem right. I had this fantasy before meeting him that when he made it “The Big Time,” that everything changed, and suddenly it was all champagne and caviar, and the hours got more reasonable and everything was wonderful. He told me the story of his life and I just realized that when you add more money to the same value system, where people are lying and cheating, breaking into your studio to steal their masters. Because they don’t want to make the last payment, giving you funny credit cards trying to trick you into all that stuff, but when you add more money to the same value system. You just get more of the same crap and that’s what he basically described. I said, “I’m done.” I put my company on the market and two weeks later, I had an offer for asking and then a month later I was out.
Andrew: What did you sell it for?
Bryan: The sale price was 480 or 490, something like that.
Andrew: And you were in your mid-20s.
Bryan: Yeah. Well, that’s what made me happy.
Andrew: No wonder you were ready to teach other people and feel so confident. Yeah.
Bryan: Well, not only that it was 2000. The year 2000, so suddenly it was in vogue in Silicon Valley to have a business plan where you make more money than you spent. This whole magic new economy had just crashed in 1999, beginning of 2000. I was talking to the start of about my basically entrepreneurial service mentality of where we’ve got it taken more money than you spend; you have to manage you cash. That became very popular as (?).
Andrew: All right. That brings me back now and I want to ask about tech companies, because that’s the kind of person that is in my audience. But there’s one story that you told Jeremy that I’ve got ask first before we get into what you do in the tech companies. It’s like you taught people to make, well here, let me see. Sometimes I can feed the question, right to get to the story and other times I just have to acknowledge that I don’t have the perfect question for this. You taught people how to be coaches and basically you asked them to make a list of the seven religions and pick the one that they felt most out of rapport with.
Andrew: Tell us about what this exercise was and why you did this.
Andrew: From the beginning because I ruined even the intro, but I just wanted you to understand what story was so promising.
Bryan: In a second I just have to ground, but my power cable, somebody told me it was…
Andrew: Why don’t you do it now? Go for it.
Andrew: We’ll all wait on hold, there’s no editing here anyway.
Bryan: It’s just hearing it, so were good.
Andrew: What are you on, MacBook Air?
Bryan: Yeah. Exactly. No not Air, sorry, Pro.
Andrew: Yeah, good. I was wondering why it was so crystal clear. Great, that’s all it took?
Bryan: Yep, we’re done.
Andrew: Okay, great. Take it from the top, then. Pick the religion you most had a rapport with.
Bryan: So this was the leadership course where we were teaching people how to be successful coaches. A huge part of that is selling and there’s this belief that you can’t sell something that you don’t believe In, which on one level is true, it makes sense to me. You certainly shouldn’t sell something that you don’t believe in because that will end in misery for you and for the customer. But when you have the frame that you’re selling yourself is not likely that you’re going to believe in yourself when you wake up. Some days you believe in yourself and some days you don’t. I wanted to give people the experience that they can actually a human connection that was in integrity, even if they were talking about something that they didn’t believe in. So, the exercise was: get as many people as you can to sign their name saying that they are going to attend a specific, local, religious event for a religion that you feel most out of rapport with. We have Islam and Christianity and Scientology so, people picked their religion. The people that won, it’s always a contest: how many can you get?
People that won the game always had the same approach, which was to a) say it was a game and b) talk authentically with people about the problems that they have with their religion and ask them what their thoughts were. Then ask them if they were willing to go discover whether their assumptions about this religion were true or not.
Andrew: So, it was asking people what their beliefs are and then saying would you let me challenge your beliefs at this event?
Bryan: More like would you go to this event to find out whether what you think about this religion is true or not.
Andrew: Oh, I see. So, if I’m trying to persuade somebody that Scientology is the right way, I’m not saying: “Hey, you should sign up for Scientology and learn about Scientology.” Instead you’re saying: “What do you believe and would you be willing to come to an event to see if your beliefs are as real as you believe they are?”
Bryan: Yeah. Like what do you think about Scientology? Here’s what I think about it? And you are honest (?). Now, what do you think about it and are you willing to attend an event to see if those beliefs are accurate?
Those people who got the most said that, they would win. You’d ask them the take away that people got was a) you can sell something, you can sell anything, you can sell something you don’t believe in and that if you don’t believe in yourself all it takes is to start to get into authentic conversation with someone about what they really want, what they really believe, what you really believe, and to start that dialogue. The issue whether you believe in yourself disappears and you are actually just with a human being on a path to discovery which is what matters. So, that’s what kind of take away you want.
Andrew: So, if I’m trying to sell Mixergy Premium on the phone with someone, instead of saying: “Hey, you should sign up because it’s got 80 courses taught by proven entrepreneurs and over 800 interviews with proven entrepreneurs who tell their story,” I should say: “What do you believe about learning about entrepreneurship? Do you believe it can be taught? Do you believe that there are ideas that people can pass on that are useful for you?” Get into a discussion about it and say: “Would you be willing to try Mixergy Premium for a month to see if your beliefs hold up or if maybe the reality is different from what you taught?”
Andrew: That’s it, that’s the key to selling. The reason you want to sell something that you don’t believe in is so, you don’t wake up in the morning one day and say: “I’ve been selling this think that I believe in but, today, I’m doubtful about myself because of the conversation I had or I’m doubtful about my business and then stink because of that doubt.
Andrew: But still be able to perform.
Bryan: Yeah, totally, exactly.
Andrew: I’m so glad that I asked you to tell that because that’s even better than I imagined it was, better even than in the notes.
So, what about a tech company? Do you want to talk about LinkedIn or any of the other companies? What work have you done for them that we can share here? I hope people get a sense of what you do.
Bryan: To tell that story about a technology company is not with them. They were a startup and they were acquired I guess, in the third year of the company, maybe four. But, this was in EDA space, Electronic Design Automation, which is software that helps people make microchips.
EDA companies in general, have a longer lifespan because it takes a long time to build the product, it’s very math intensive. So, it was a pretty early acquisition and they were acquired based on the promise of a technology that they were able to create software that could design microchips through diagonal wiring. Diagonal wiring was going to take less copper and have the electrons move more quickly, it’s more efficient, for the same design.
When I came and started working with them, that project which was known as X for diagonal wiring was in severe danger of being canceled. It had been already acquired by the wiring company and they were doing so poorly with the milestones that they were going to abandon, which for me, felt like the entire reason that they had acquired this company. I was brought in to see what I could do about that.
And I realized many things, one was that the project was so secret that all of the people who were working on it weren’t aware of each other and weren’t aware of what aspects. So there was a little paranoia about people dealing corporate secrets so there was this need to know basis, and as a result there was no coordination and there was no production. And I first met with the team and it was, I want to say, 75 people give or take, who were working on this project. And I polled them, and I said on a scale of 1 to 10, what’s your level of confidence that this product will ever come to market? And the average on a scale of 1 to 10 was a 3 in the room, for all the people working on it, which is pretty miserable. And then I spoke to them for about 2 hours, and I polled them again, and the average was a 6. So we did a 3 point bump in a couple of hours. Just by speaking plainly about what had happened, why we were in the problem, why do we have the problem we were having, what are we going to do about it?
And then I coached the leaders of the different aspects of that product and the general manager whose product it was for 18 months. They were 2 years behind schedule when we started and we got them back on to their original schedule in 18 months. So we did 40, 50 months’ worth of work in 18 months, and that project that year ended up winning the design award in that industry and was the first software product in that industry ever to be sold on a royalty basis. So they actually got the company a percentage of every microchip sale that was produced using that software to design it. So it was a huge success and it was a lot of blocking, tackling, coordinating highly, highly technical people. The technical stuff I didn’t understand, but listening to what the roadblocks are and then creating communication channels to alleviate those roadblocks. And I’d say that’s a typical story of my work. It’s creating those collaborate effort results that seem impossible. Shortening sale cycles, shortening delivery time, and then conceiving of what’s the strategy that’s going to elevate us to the next level.
Andrew: You also told me about a story of a smaller company, basically a 2 man operation that you’re working with, and I won’t give the company’s name, but basically they have a successful product, they’re doing well with it, and you help them think about how to grow their revenue. Instead of finding more big clients that they have, you were telling them look for smaller clients who can bring in more money so that you can really reach the masses. And you helped them understand why that was the way to go, and now you’re going to help them implement.
Bryan: Yeah they had a product which was applicable to a market of, let’s say, half a million people, 750,000 people, something like that, where big winners in the marketplace, are people who sell let’s say 50,000 units, and I got them to see that they could actually use a core technology that they had, apply it to the mass market and connected them with a marketing channel that had, instead of a mailing list of half a million people, a mailing list of 90 million people, and show them how they can use that technology, repackage it, and apply it to the mass market, and immediately have a channel of 90 million customers which is a game changer obviously.
Andrew: So, you listen to [??], what do you think I should be doing?
Bryan: That’s a great question. I would have to know what your heart’s deepest desire is first, because it definitely should be in line with that. If I were you, I think I would probably do something different then I should think you should do, because you and I have different desires, different wishes. I would say that I would look at what the biggest change that you want to make culturally in the world, and based on all of the interviews you’ve done, based on all of the relationships that you’ve produced, based on all of the bonds that you’ve formed, if you treat those as assets, how can you most creatively and powerfully apply those assets to making that cultural change.
Andrew: You came up with that, what’s the biggest change you want to see in the world and what assets do you have that will help you get there.
Bryan: Yeah. That’s how we do our strategic planning, that’s how we recommend strategic planning. People too often identify with what they do and companies that identify with what they do, like Kodak, end up with very problematic, strategic decisions when what they do is no longer relevant in the marketplace. If you identify instead with what you do, with what you want and what you have, and be creative about what you’re trying to draw connections to those two things, then you can do anything.
One of my favorite stories about that is the Southern Pacific Railroad, that if they identify with what they do, then they’d be a railroad company. Instead, they identified with what they had and they realized as railroads were dying that they had these huge, very long, very narrow strips of land they owned. And they were creative about, what could you do with very long, very narrow strips of land? And so, they built a telephone long distance network, and that’s where Sprint came from, Southern Pacific Railroad.
In fact, every Southern Pacific company had to have SP as the first two letters of their name, which is why Sprint is named Sprint.
Andrew: Oh, I didn’t know that. Wow.
Bryan: So that is an example of strategic planning based on assets and vision versus what you do.
Andrew: All right. Let me just quickly acknowledge the mug I’m holding here, and then I’m just going to do something that I told you before the interview I was not going to do. The mug actually comes from a listener. Her name is Shirley, and she runs a blog with her high school sweetheart of 15 years. Oh here, this is the mug I’m talking about. They sent this mug over to me and they said, “Thank you for what you do at Mixergy” because it made them realize that you can generate revenue, you can make a real business out of a podcast, out of a blog. Most people think, what I used to think, just do it out there for fun.
I actually found at Mixergy that it adds credibility to start adding ads and to start generating revenue. I talked a little bit about it with them. They’ve been generating revenue with their business. They sent me a mug and a thank you, and I want to say thank you and explain to people why I’m holding a mug with the name (?) on it.
Here’s the thing that I said I wasn’t going to do because frankly Mixergy is not good at selling from behind the mic, but if someone’s moved by what they heard here and want to work with California Leadership, I can direct them to California-Leadership.com and find out about you, but that doesn’t seem like the way to work with you, is it?
Bryan: Well, probably the best way is to reach out, either to that site or to BryanFranklin.com. There is a Contact Me form which goes to our assistant, and we see all the mails that comes in from there. It depends on what your situation is. If you’re an entrepreneur, we have programs that are just amazing at creating a contribution culture, a community of people who are committed to each other’s success. And we could introduce you to those programs.
If you’ve got a startup and your really rapid scale is more your concern, you’re either trying to cause that inflection point or deal with it once you caused it, like (?) did and so many other of our clients and just reach out, and we’ll have a conversation and see if one or the other makes sense.
Andrew: BryanFranklin.com. Thank you so much for doing this interview.
Bryan: All right. Thank you so much, Andrew. It was good to meet you, and I’ll see you soon.
Andrew: You bet! Thank you all for being a part of it.