April 10, 2024 • 29 mins
In a thrilling episode of the 'Founders Odyssey' podcast, successful author and entrepreneur, Reid Tileston, shares his phenomenal journey and insights on business ownership and entrepreneurship. Gain from his wisdom as he traces his roots, talks about his entrepreneurship curriculum at the University of Chicago’s Blue School of Business and explains the importance of setting high goals for success.
Dive deep into Reid's innovative thinking about the roles within a business structure, positioning entrepreneurial business owners at the center. Drawing from his forthcoming book, "Grit It Done," he lightens the pathway for those unfamiliar with different levels in a business. Take inspiration from his argument on the fundamental importance of cultivating robust relationships for personal growth in the entrepreneurship journey.
Explore business acquisition strategies with Reid and unravel keys to successful entrepreneurship. Acknowledge the importance of a healthy profit margin and a business that caters to ready demand. Grasp the significance of structured frameworks and quantitative aspects during acquisitions and decision-making processes.
Round off this enlightening podcast episode with insights on how to scout for business opportunities. Learn from Reid's strategy of choosing simple, everyday businesses with a definite demand. Tune in to appreciate his outlook on commitment in entrepreneurship and the merit of persistence in achieving the entrepreneurial dream.
Immerse in this powerful episode that will enlighten and inspire you with invaluable insights, no matter where you are in your entrepreneurial journey.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:01):
Welcome to the Founders Odyssey podcast, where we interview founders who have
bought companies, sold companies, raised funds, and are creating amazing products
and services for the world.
Today, we are joined with entrepreneur Reid Tyleston.
He is an entrepreneur, business owner, speaker,
adjunct professor, investor, board member, successfully exited operator,
(00:22):
a researcher, and an author of Grit It Done, which is launching nationwide on May 13th.
Guys, buckle up because we've got an amazing guest on the show today.
So thank you so much for joining us.
My absolute pleasure. Thank you for the invite. I'm excited for the conversation.
Yeah, you know, I ask every entrepreneur that comes on the show,
(00:43):
what does entrepreneurship mean to you?
It's a great question because if you ask 20 people what an entrepreneur is or
what entrepreneurship means, you're going to get 20 different answers.
There's actually no agreed upon part of it.
In the book, just to set a baseline for it, I can't put my own definition for an entrepreneur.
And it's very simple, really. It's someone who just takes action.
(01:06):
That's what an entrepreneur is to me. And at the core, I believe that being
an entrepreneurial business owner is being a better American.
And that's why I think it's so important for individuals to understand the various
paths that there are out there to become an entrepreneur and to become a business owner.
And that's obviously why I wrote the book, Grit It Done, GritItDone.com, 99 cents, end of May.
(01:31):
Because despite what we hear, the American dream is not dead.
Okay it's alive and well
and I'm just excited to engage with your audience about how
they can achieve their American dream through entrepreneurial business
ownership I was watching Beckham yesterday on
Netflix yeah think about it as someone who
has such a high stature in a sporting event
(01:54):
right you could choose anyone like LeBron James or Michael Jordan or any figure
that we we ever see or any Jeff Bezos Elon Musk and there is behind the scenes
for every single one of those individuals in the dark in the trenches.
That requires the grit that you're talking about in your book. And I believe that,
(02:17):
it's, it is the more that personally I'm in business, the more that you start
to understand that you have just got to fall in love with that process to get
to your next quote unquote goal, challenge,
Superbowl, however you want to look at it.
But you know, that's really important. So that brings us to the next area is,
(02:40):
in essence, how do you set goals personally?
And how do you actually reassess those goals once you've established?
I think it is critical for me personally to set goals very high,
to anchor as high as possible.
Because when I personally anchor high, even if I don't actually get to them,
(03:02):
and usually I get pretty close. Sometimes I get them up, but if I don't get
to them, at least I get closer than if I did, than if I anchored low.
So I set high aspirations every year. I just put what my goals are for the year up on the board.
So I see it every single day and I focus on it and I have that.
Now, what I also do just on a personal level is I put a picture of myself when
(03:25):
I was probably seven or eight years old with this hat on and the hat,
which is red and black says, no fear.
And I look at that every day, and that's my inspiration to go out and get it.
Outside of that, I was blessed with a mother growing up who was good at pushing me.
And one thing which she pushed me to do when I was about 12,
(03:47):
I think I was 12 or 13 years old, we did a mother-son hike up Half Dome. Wow.
I was tired. I was miserable. I did not want to be forced out of the cabin at,
you know, 5 o'clock in the morning to go hiking.
I also had asthma at this point in my life. So as we're humping up to the top, I'm breathing in.
(04:07):
But a crazy thing happened, though, is that she pushed me, and she wouldn't let me quit.
And who would have thought? After a couple hours, the asthma melted away.
I was all in and ended up getting to the top.
And I also have a picture of that trip from when I was 12 years old with my
mother that I look at every single morning to know that with the right encouragement,
(04:30):
surrounding myself with the right people and the right mindset,
I can go and accomplish those goals.
So that's just how I personally do it.
It's interesting. Anyone who achieves anything, they go through a certain amount
of pain, of suffering, any trial that then propels them forward, right?
(04:53):
And when has there been a time in your life that you've gone through that you
can recollect that really was a pivot point in your life that sent you on a different trajectory.
I had the pleasure of being a superhero. So it's a summer of 2008 in Sacramento,
(05:14):
the heart of the Great Recession.
I have taken this $100,000 that I'd saved up after school and working in finance
and with two partners, one of which was my older brother. They worked in private equity.
We'd put our money together and we had planned to open up dozens of anytime
fitness clubs in the California Central Valley.
So through a variety of bad site selection on our part, I think a key with franchising
(05:39):
is it's critical to listen to the franchisor.
They said, don't go to this market. It's too big and competitive.
We thought we knew better. They were correct.
In addition, the Great Recession began, right? So not a great place to be owning
a business. And third, I just was a new operator, so I've learned the trenches.
And I rented this purple superhero suit called Captain Running Man from the franchisor.
(06:00):
It's kind of like in their sales playbook. And I dressed up in it in the 95-degree
Sacramento summertime heat,
pounded the pavement, selling these short three-month for $99 summertime memberships
with auto-renew afterwards to get the club to where it was making a couple thousand bucks a month.
So not a good IRR, not a good return on investment, but enough to break even.
(06:22):
And that's when I had this key identity assessment that I'm not going to be
an equity employee. Because at that point, certainly I had good equity in the business.
We all had a third equity, but I was the one running it. They were still in
San Francisco working in private equity, plus their souls. But I said, you know what?
My DNA is as a business owner. If I'm going to be the one in the purple superhero
(06:43):
suit pounding the pavement, I want to own all the upside of what I'm doing.
And this is when I was 24 years old.
That's when I had my identity that I'm a business owner as opposed to an equity
employee. and I lay out the four avatars in the book, right? One is an employee.
They're great. They're the backbone of the US economy, right?
The good ones get promoted. The bad ones usually find the door.
(07:06):
Second, you have equity employees. CEO is a great example of that.
They work on the business, not in the business, and they own a portion of their
upside, but ultimately, like me in the superhero suit, they don't control their destiny.
Then you have business owners. I've been a business owner for a long time.
You get the autonomy, you own the upside, But oftentimes, the business owns
(07:27):
you more than you own the business.
And it's not a bad life. It's a great life.
The better one, though, is what I'll call an entrepreneurial business owner.
And that is where you truly work on the business, not in the business.
And you can truly have that freedom and autonomy and owning the upside,
which I think a lot of Americans desire.
So I wrote the book, Nine Steps to Knock That Up. I think it's important. Yeah.
(07:51):
To go through the stages, but also know the stages.
Because if you're an entrepreneur and you're just going through it,
not knowing that there are levels of how you can engage in a business, just put it that way.
Because like what you're saying if if i was
not privy to the information of knowing and management
(08:13):
of and the creation of a business
and not allowing myself to step
out right from this or
the from the circle that i've created in essence the job that you were saying
that the business is more running you than you are the business it's it's just
so important to have that objective feedback or the the objective point of view
(08:35):
of the sphere that you've created to be called your business, right?
So, I mean, I'm excited about this book. Shoot. And it hasn't even come out
yet. You're getting me all jacked up. How about you guys out there?
So we're going to dive into kind of a little bit of your past in regards to
what has really sparked your interest in business. Was it a mentor of yours?
(09:01):
Was it a father figure? Was it your father or your mother?
Who was it in your family or outside? Yeah, and you hit such a key point because
it's all about the people, right?
So I talked about how my mother endowed me with that, you know,
grit it done, get through the hard stuff attitude.
But my dad gave me an interesting part of motivation because early in his career,
(09:24):
he ran a company in the Bay Area, but he was not the owner of it.
And seeing the pain that he went through
and the company was successful my dad did well over the years
but seeing the pain that he had of running things
but not owning things endowed me
in this mentality that you know what i want to be the owner and then that was
of course reinforced when i was in the purple superhero suit so i got that another
(09:48):
interesting thing too is that i went to business school university of chicago
booze school of business right and i went to business business school after
I was a multi-unit successful anytime fitness club owner.
But I got to Booth in 2013. This is complete luck. Right when they were launching
these entrepreneurship through acquisition programs for students to go out and
buy a Main Street business.
(10:08):
And during that time, because I'd been a business owner and I had the operational
experience, I got asked where I became a teaching assistant for the first class
that Booth taught on this by two first-time adjuncts.
And this was such a great experience, building curriculum from the ground up
with two guys in their late 30s, one of which was a CEO, one of which a CEO
(10:29):
of this little successful company.
And watching the impact that that class had on the students and the relationship
that I developed with them.
Completely inspired me to go out and build on my success with the fitness centers
and buy another business.
And I told myself that when I have my own great exit, I want to go back and
(10:51):
teach as an adjunct, just like these two individuals did.
So the critical part is that where I found motivation, and this is what I study
in my doctoral PhD work and I teach as well, is that you can see that what really
drives people to change and what really drives people to achieve and to be effective.
So much of it is based on those relationships.
And it's so critical to think about who individuals should surround themselves
(11:15):
with in the journey, because it's going to have such profound impact.
And one thing which we talked about before we started this interview is that
it's just critical to have in-person events where you bring people together
and you go there with an open mindset, with a good facilitator,
because you just never know who who you're going to meet, right?
And for me, if I have like an all-in attitude of what I'm doing and I'm smiling
(11:38):
and I'm engaged, I just seem to attract the right people around me,
whether it's a team member, a potential investor,
just someone who I can join a peer group with, or just someone who I can call
at nine o'clock at night and have a shoulder to cry on.
So I think it's critical to get out there and be very thoughtful about who you
surround yourself with.
You know, it's to that point, it's interesting. We met at a local event here
(11:59):
in the Salt Lake area for those that are outside of the city.
And there was this little cohort of four individuals.
It was rather interesting. It seemed that we had different backgrounds,
but similar interests in business.
And we just started going around the circle asking, where have you been?
Where are you at? And how can we support each other? How can I support you?
(12:21):
And I felt that that was powerful, even the small little time that we had spent,
just because it was like, you know what, but there needs to be more of that.
And yeah, to your point, it's truly about the people that are in your life and really cheering you on.
Because in a world of a lot of individuals, that when they see your quote unquote
(12:43):
success, they're not so happy for you.
Sometimes they outwardly say it, other times they keep it in.
And it's interesting because you're just trying trying to be the best version of yourself, right?
And, you know, my question to you is, what is your vision of the best version of yourself?
My vision of the best version of myself is just taking the experiences that I've had, right?
(13:08):
The things that I've learned in the trenches through pain, through suffering,
through the whole nine yards, and just share my experiences and give them to people.
It is as simple as that. Don't make the same mistakes that I made.
And here's everything that you need for because I think that.
The most important commodity to me in life is time, right?
(13:30):
I want people, my wish for people, my wish for myself is just to optimize your time.
In the context of this book, I see a lot of people that go down this path with doing two things wrong.
One is they don't take the time in the beginning to do the assessment, right?
To understand, do I really want to be a business owner?
Do I really actually want to leave my job? Am I willing to actually sign a personal
(13:53):
guarantee? guarantee, because then they go down the path and they'll spend time,
they'll spend money, whether it be on an MBA, whether it be on a,
you know, 10,000 bucks at a weekend workshop, whatever, without giving the assessment part of it.
And then I just, I don't like seeing that, right?
So I'm like, hey, I'm going to write a book, three hours, 99 cents, right?
(14:13):
So now you know everything that I know about this and then decide if it's the right fit for you.
And if it it is great go for it i believe that optional business ownership if done right is a huge win.
Autonomy right true freedom if
you use sba lending you buy a good business you can make a lot of money i mean
(14:33):
think about the average american who's making 1118 a week in wages now it's
gross that up to 70k a year if you take some benefits and add that in i mean
there's businesses out out there now that are making $400,000 to $500,000 of EBITDA,
where you can lever up with 80% SBA financing,
use friends and family money to fill the equity gap, or if you have your own savings,
(14:55):
you can always come talk to someone like me, I'll happily consider it.
But honestly, if I was you, I wouldn't, I'd just keep all the equity myself.
Doing that process, assuming that you don't even grow the business at all,
just stays flat, someone's going to make more money, right, than they otherwise would have.
And in 10 years, when the SBA loan is paid off, you're going to have a seven-figure exit, right?
And it's like, and during the process, you're going to have more autonomy, more freedom.
(15:20):
You're probably going to meet some really cool people along the way.
I mean, team members are the biggest source of pain, but also the biggest source of pleasure.
And you're going to get a vision for what good government is as well.
Because as you know, as an entrepreneur or business owner, the pile of paperwork is always this high.
And you just see how government could do so much better. So I look at it as
being a huge net win opportunity for people that everyone should consider doing.
(15:46):
But you don't have to spend a lot of time or money, I think,
to know if it's the right fit. Good first step, read the book, go from there.
I want to preface what you just said.
There's a lot of nuggets back there, but it's also, it's prefaced by a lot of
experience from you in buying companies. Okay.
(16:07):
So I want you to tactically take us through that process.
You shared a few things, right? Like, oh, well, you could do this or you could
do this or that. So let's say, for example, I'm an entrepreneur.
I'm out there right now. I'm listening because we've had all sorts of entrepreneurs
on this podcast. So tech founders, real estate investors, family office.
But you are one of the only individuals that we've interviewed that has currently
(16:32):
grown their portfolio through acquiring others in a very strategic manner. center.
So can you share with us, I know you can't say the whole thing and you did say
some things there, but let's go through steps, maybe one through 10.
Is there a 10 step process? Yeah. Five? I don't know. Yeah.
I wrote out, I wrote out nine in the book. The critical one,
(16:52):
which you've talked about a bit as assessment, I created this quick,
you know, couple question assessment tool to understand if you are ready to
be an entrepreneurial business owner, right. And it'll It'll give you a level grade for it.
The other area which I will hit on for it is that it's critical to have a framework
when acquiring, looking at acquisitions.
(17:13):
In the book, I put in what my framework is. I call it the double diamond, right?
And you can get it for free by going to griditdone.com. Just put in your email.
You can access it, and the book walks you through how to use it.
This tool works for me, and I like it because it makes sense.
But there's other countless ones out there to use as well. Well,
critical to have a structured framework to think about acquisitions, right?
(17:35):
Customer concentration, industry growth, fragmented customer base,
management team in place.
Whatever framework you choose, make sure it's thorough and it has a quantitative aspect to it.
And here's the most important part. Do not leave home without this.
Fill it out yourself and then find, for me, at least four other people who are credible in the space.
(17:58):
Maybe they're business owners, CEOs, investors, just people you trust.
And give them the information and have them look at the framework as well and
give you honest feedback about it.
Because the biases that we are all plagued with can have you fill it out to
get whatever end you want out of it. And you can choose to ignore what the other people say.
It's your life, right? but have other people give you feedback on it,
(18:22):
which goes back to the point of having that correct peer group in the process.
I just spoke with an entrepreneur today. They were building a tech play in the
note space, another app, and it was difficult because I wasn't following him.
He wanted to create an ecosystem as opposed to an important use case scenario
(18:46):
for technology As opposed to, because at times, like you're saying,
you'll have a bias because you've convinced yourself that this is the product
that the world needs to see.
Because I'm the only one who thinks that it needs to come to life, right?
It's not the market that's telling me that I need to build this specific product,
(19:08):
right? So I think it's definitely the same thing with buying a business.
You've got to have that validation.
You have to have the framework, like he's saying, in mind.
And then you have to have that unbiased feedback from people that you trust
in credible spaces. Yeah.
And the real kicker is that I'm a big believer, especially if you're a business
(19:29):
owner and you can do whatever you want to, right?
You can completely ignore the advice and the feedback and just go out,
grit it done and prove them wrong.
But the real critical part is that if you do that, they were giving you good
advice about landmines to avoid in the process.
So even if you do end up ignoring them, you're going to be armed with great
information that'll probably help you you be more successful if you do it anyways. Yeah, I love that.
(19:53):
It's the journey. I mean, that's why I call it the odyssey.
I mean, I swear every time I read the title of an odyssey, I think of like Vikings
or something like on a ship, you know, because you know how crazy it is.
You know, the ups and downs, the sun, the rain, the lightning,
the hole in the boat, about this entire journey that we all go through.
(20:17):
But it's currently, it's an amazing thing because you continue to evolve into your best self.
It is the best self-development process you could ever go through.
And to your point, though, that you just said, and you'll make more evident
in your book, but it's really about just knowing that that's what you want to do in life, right?
(20:41):
And you've got to have that all-in mentality.
And that's what we're seeing with a lot of entrepreneurs. They don't become
successful until they go all-in.
So was that when you had saved your money and then when you had graduated and
then you went all in with your brother on a fitness business?
(21:03):
I was going to open a minimum of three clubs or I was going to pass away trying.
It was never a question in my mind of was that outcome going to happen.
It's as simple as that. If I'm not all in, I'm in the way. If I'm halfway in, I'm halfway out.
Listen, I've been to business school. I'm working on a PhD, and I understand
the value of diversification.
I think the best way to de-risk, quite frankly, is to be all in.
(21:27):
And the biggest risk to have is to be halfway in and halfway out, going all in.
And also, going all in is a journey so much more enjoyable as well for me.
So if there's one key takeaway for your listeners, it is to go all in.
Well, think about it like this, too. It's this constant reflection and,
(21:49):
of course, correction based on your previous experiences to make your future
a better horizon, in essence. That's what we want.
But many times, we don't cut the losses to allow for us to grow.
It's like pruning in a garden. If you do not prune your...
(22:10):
We're entering April here. It's beautiful. beautiful, you know, it's blooming, right?
But think about it, right? You don't grow if you don't prune.
And I think that's an area that people think they need to continue to add more
or become better or do all this, which is amazing, right?
Which you should still have that growth mentality, but there's also growth and
(22:31):
understanding that you can get rid of, you know?
So are there any areas in your life where you've had to make changes that pushed
you in an area where you had to get rid of?
Yeah, absolutely. The biggest thing that I've had to learn to adapt to do,
(22:52):
and here's the thing, is that you go through the assessment process, right?
Then ultimately, you learn once you're out there in the trenches doing things
and everything like that.
So one interesting way that I learned a lesson is that I owned a field service
business, and the technicians were all taking lunch breaks, right?
And said, you know what, guys? How about you just work through your lunch because
(23:16):
you're clearly not taking the
lunch breaks anyway. Why don't you work through lunch and go from there?
And what's interesting is that all that ended up happening is that they basically
still took their lunches, but now they thought they were entitled to get paid for it all.
And this ended up having a good basis, you know, ended up costing me a couple
percentage of EBITDA margins there, right?
So the key takeaways from that
(23:37):
are to one, even sometimes with the best intentions, bad outcomes happen.
Secondly, when I look at businesses that I want to acquire, I always put in
extra profit margin because I know that as an inexperienced operator,
even an experienced operator, I'm going to get in there and make mistakes.
And having that profit margin is critical to provide that cushion because then
(24:01):
when you make the mistakes, you learn from you become a better operator because of it.
But if you don't have the right, if you don't have have the enough bandwidth
to make the mistakes, then it can be a little bit problematic.
Yeah. Because taking that setback ended up making me a better leader in that situation.
So you're in a position where you've had some success. And let's talk a little
(24:22):
bit about your next steps here, right?
And then also let's talk about one strategy that you would have for those that
are out there that are listening that are investors or that are looking for that next step.
That next business opportunity, right? So what would your suggestion to them
be for making an investment in maybe that business?
(24:44):
Or what are some maybe metrics that you look at that you could share with others?
Yeah, big thing for me is that I like simple, unsexy, dirty businesses where
demand is essentially guaranteed.
Simple as that. I like going for the off the beaten path past stuff.
And I tend to think around innovation that the most likely things that are going
(25:07):
to exist in the future are those that existed in the past.
I love the fork, for example. It's been around for thousands of years.
I don't think the fork's going to get out-innovated anytime soon.
That's how I fundamentally think about it. So I like businesses.
One example is grease trap pumping, where it's needs-based, right?
Businesses need to have their grease trap pumped, often by the municipalities
(25:28):
require it. Or even if they don't, if you don't pump your grease trap, it overflows.
And if it overflows, then you got a lot of really, yeah, no bueno. Exactly.
So it's a needs-based business, right? I like businesses like that because so
many startups fail as we know, right?
Because there's a lack of customers. There's a lack of demand.
I like to go where the demand is all but guaranteed and then get myself very
(25:52):
involved and how to staff it up right, how to optimize operations,
how to put trucks on the road in the case of the grease trap business,
and look at businesses like that, that they are just so simple and so easy that
I could explain them to a six-year-old.
My grandma had a breakfast in La Jolla, California, once explained it to me so well.
(26:12):
And I go into this in the book. He said, Reed, in economics,
there's supply and there's demand, and they meet at a certain clearing price.
If there's no demand, there is no market.
So you don't need an MBA. You don't need a PhD to understand that.
If there's no demand, there is no market.
So go where demand is durable, robust, and guaranteed.
We should have your grandma on the podcast. She was an amazing woman.
(26:36):
What is she, still alive? Nah. I don't care. It passed away some years ago.
But man, that's a really good nugget for you to hold on to moving in the future.
So speaking of future...
This book, it's coming out soon. And I'm, like I said, I'm going to get it today.
Well, when I can get it, okay. It's launching soon. But tell us a little bit more.
(26:58):
And then really, what was the ultimate motivation to get this out to the world?
The ultimate motivation is
that to be a better American is to be an entrepreneurial business owner.
The autonomy, the relationships, and to see what good government looks like.
Like, is it for everybody? No.
(27:19):
Is it for a lot of people? Yes. And the demographic trends around being able
to buy existing businesses now because of the silver tsunami is unprecedented.
It is a fantastic opportunity that I think everybody should consider doing at
some point in their life.
And I've had the ability to be in this space for 16 years.
And I see a lot of people that don't know what the first step is to take or
(27:43):
that go down a step that doesn't make sense for them.
So I was like, this is great. I'm just going to write a book,
sell it for 99 cents in three hours of your time as a great first step for people
that want to go that are considering going down through this route.
Because at the end of the day, to be an actual business owner is to be a better American. I love this.
Well, I'm excited. So how do we get a hold of you?
(28:06):
And then what is the best way to help support you on the podcast for those out
there that are listening?
Yeah, griditdone.com. that's where you can get the book
99 Suns through the end of May and then I'm active on
LinkedIn and Twitter as well so feel free to feel free
to engage with me there and I always tell my students in class too it's like
believe it or not I'm going to learn as much from you as you're going to learn
(28:28):
from me so just drive that engagement you know engagement's the fun part because
you never know who you're going to meet once again he just said and this is
a challenge for everybody out there is to go meet somebody new but also,
challenge yourself onto what you can provide for them not only what they can
provide for you, always be a giver.
That's what we want to do here with this podcast. And thank you so much for
(28:50):
listening to the Founders Odyssey podcast.
My name is Nathan Bridge, your host, and make sure to like and subscribe if
you have not for future episodes and go back and look at all of the different episodes.
We've had amazing guests, including Reid here today. So thank you so much for joining us.
We can't wait to see you guys again soon.
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Music.
Welcome to the Founders Odyssey podcast, where we interview founders who have
bought companies, sold companies, raised funds, and are creating amazing products
and services for the world.
Today, we are joined with entrepreneur Reid Tyleston.
He is an entrepreneur, business owner, speaker,
adjunct professor, investor, board member, successfully exited operator,
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a researcher, and an author of Grit It Done, which is launching nationwide on May 13th.
Guys, buckle up because we've got an amazing guest on the show today.
So thank you so much for joining us.
My absolute pleasure. Thank you for the invite. I'm excited for the conversation.
Yeah, you know, I ask every entrepreneur that comes on the show,
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what does entrepreneurship mean to you?
It's a great question because if you ask 20 people what an entrepreneur is or
what entrepreneurship means, you're going to get 20 different answers.
There's actually no agreed upon part of it.
In the book, just to set a baseline for it, I can't put my own definition for an entrepreneur.
And it's very simple, really. It's someone who just takes action.
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That's what an entrepreneur is to me. And at the core, I believe that being
an entrepreneurial business owner is being a better American.
And that's why I think it's so important for individuals to understand the various
paths that there are out there to become an entrepreneur and to become a business owner.
And that's obviously why I wrote the book, Grit It Done, GritItDone.com, 99 cents, end of May.
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Because despite what we hear, the American dream is not dead.
Okay it's alive and well
and I'm just excited to engage with your audience about how
they can achieve their American dream through entrepreneurial business
ownership I was watching Beckham yesterday on
Netflix yeah think about it as someone who
has such a high stature in a sporting event
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right you could choose anyone like LeBron James or Michael Jordan or any figure
that we we ever see or any Jeff Bezos Elon Musk and there is behind the scenes
for every single one of those individuals in the dark in the trenches.
That requires the grit that you're talking about in your book. And I believe that,
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it's, it is the more that personally I'm in business, the more that you start
to understand that you have just got to fall in love with that process to get
to your next quote unquote goal, challenge,
Superbowl, however you want to look at it.
But you know, that's really important. So that brings us to the next area is,
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in essence, how do you set goals personally?
And how do you actually reassess those goals once you've established?
I think it is critical for me personally to set goals very high,
to anchor as high as possible.
Because when I personally anchor high, even if I don't actually get to them,
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and usually I get pretty close. Sometimes I get them up, but if I don't get
to them, at least I get closer than if I did, than if I anchored low.
So I set high aspirations every year. I just put what my goals are for the year up on the board.
So I see it every single day and I focus on it and I have that.
Now, what I also do just on a personal level is I put a picture of myself when
(03:25):
I was probably seven or eight years old with this hat on and the hat,
which is red and black says, no fear.
And I look at that every day, and that's my inspiration to go out and get it.
Outside of that, I was blessed with a mother growing up who was good at pushing me.
And one thing which she pushed me to do when I was about 12,
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I think I was 12 or 13 years old, we did a mother-son hike up Half Dome. Wow.
I was tired. I was miserable. I did not want to be forced out of the cabin at,
you know, 5 o'clock in the morning to go hiking.
I also had asthma at this point in my life. So as we're humping up to the top, I'm breathing in.
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But a crazy thing happened, though, is that she pushed me, and she wouldn't let me quit.
And who would have thought? After a couple hours, the asthma melted away.
I was all in and ended up getting to the top.
And I also have a picture of that trip from when I was 12 years old with my
mother that I look at every single morning to know that with the right encouragement,
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surrounding myself with the right people and the right mindset,
I can go and accomplish those goals.
So that's just how I personally do it.
It's interesting. Anyone who achieves anything, they go through a certain amount
of pain, of suffering, any trial that then propels them forward, right?
(04:53):
And when has there been a time in your life that you've gone through that you
can recollect that really was a pivot point in your life that sent you on a different trajectory.
I had the pleasure of being a superhero. So it's a summer of 2008 in Sacramento,
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the heart of the Great Recession.
I have taken this $100,000 that I'd saved up after school and working in finance
and with two partners, one of which was my older brother. They worked in private equity.
We'd put our money together and we had planned to open up dozens of anytime
fitness clubs in the California Central Valley.
So through a variety of bad site selection on our part, I think a key with franchising
(05:39):
is it's critical to listen to the franchisor.
They said, don't go to this market. It's too big and competitive.
We thought we knew better. They were correct.
In addition, the Great Recession began, right? So not a great place to be owning
a business. And third, I just was a new operator, so I've learned the trenches.
And I rented this purple superhero suit called Captain Running Man from the franchisor.
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It's kind of like in their sales playbook. And I dressed up in it in the 95-degree
Sacramento summertime heat,
pounded the pavement, selling these short three-month for $99 summertime memberships
with auto-renew afterwards to get the club to where it was making a couple thousand bucks a month.
So not a good IRR, not a good return on investment, but enough to break even.
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And that's when I had this key identity assessment that I'm not going to be
an equity employee. Because at that point, certainly I had good equity in the business.
We all had a third equity, but I was the one running it. They were still in
San Francisco working in private equity, plus their souls. But I said, you know what?
My DNA is as a business owner. If I'm going to be the one in the purple superhero
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suit pounding the pavement, I want to own all the upside of what I'm doing.
And this is when I was 24 years old.
That's when I had my identity that I'm a business owner as opposed to an equity
employee. and I lay out the four avatars in the book, right? One is an employee.
They're great. They're the backbone of the US economy, right?
The good ones get promoted. The bad ones usually find the door.
(07:06):
Second, you have equity employees. CEO is a great example of that.
They work on the business, not in the business, and they own a portion of their
upside, but ultimately, like me in the superhero suit, they don't control their destiny.
Then you have business owners. I've been a business owner for a long time.
You get the autonomy, you own the upside, But oftentimes, the business owns
(07:27):
you more than you own the business.
And it's not a bad life. It's a great life.
The better one, though, is what I'll call an entrepreneurial business owner.
And that is where you truly work on the business, not in the business.
And you can truly have that freedom and autonomy and owning the upside,
which I think a lot of Americans desire.
So I wrote the book, Nine Steps to Knock That Up. I think it's important. Yeah.
(07:51):
To go through the stages, but also know the stages.
Because if you're an entrepreneur and you're just going through it,
not knowing that there are levels of how you can engage in a business, just put it that way.
Because like what you're saying if if i was
not privy to the information of knowing and management
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of and the creation of a business
and not allowing myself to step
out right from this or
the from the circle that i've created in essence the job that you were saying
that the business is more running you than you are the business it's it's just
so important to have that objective feedback or the the objective point of view
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of the sphere that you've created to be called your business, right?
So, I mean, I'm excited about this book. Shoot. And it hasn't even come out
yet. You're getting me all jacked up. How about you guys out there?
So we're going to dive into kind of a little bit of your past in regards to
what has really sparked your interest in business. Was it a mentor of yours?
(09:01):
Was it a father figure? Was it your father or your mother?
Who was it in your family or outside? Yeah, and you hit such a key point because
it's all about the people, right?
So I talked about how my mother endowed me with that, you know,
grit it done, get through the hard stuff attitude.
But my dad gave me an interesting part of motivation because early in his career,
(09:24):
he ran a company in the Bay Area, but he was not the owner of it.
And seeing the pain that he went through
and the company was successful my dad did well over the years
but seeing the pain that he had of running things
but not owning things endowed me
in this mentality that you know what i want to be the owner and then that was
of course reinforced when i was in the purple superhero suit so i got that another
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interesting thing too is that i went to business school university of chicago
booze school of business right and i went to business business school after
I was a multi-unit successful anytime fitness club owner.
But I got to Booth in 2013. This is complete luck. Right when they were launching
these entrepreneurship through acquisition programs for students to go out and
buy a Main Street business.
(10:08):
And during that time, because I'd been a business owner and I had the operational
experience, I got asked where I became a teaching assistant for the first class
that Booth taught on this by two first-time adjuncts.
And this was such a great experience, building curriculum from the ground up
with two guys in their late 30s, one of which was a CEO, one of which a CEO
(10:29):
of this little successful company.
And watching the impact that that class had on the students and the relationship
that I developed with them.
Completely inspired me to go out and build on my success with the fitness centers
and buy another business.
And I told myself that when I have my own great exit, I want to go back and
(10:51):
teach as an adjunct, just like these two individuals did.
So the critical part is that where I found motivation, and this is what I study
in my doctoral PhD work and I teach as well, is that you can see that what really
drives people to change and what really drives people to achieve and to be effective.
So much of it is based on those relationships.
And it's so critical to think about who individuals should surround themselves
(11:15):
with in the journey, because it's going to have such profound impact.
And one thing which we talked about before we started this interview is that
it's just critical to have in-person events where you bring people together
and you go there with an open mindset, with a good facilitator,
because you just never know who who you're going to meet, right?
And for me, if I have like an all-in attitude of what I'm doing and I'm smiling
(11:38):
and I'm engaged, I just seem to attract the right people around me,
whether it's a team member, a potential investor,
just someone who I can join a peer group with, or just someone who I can call
at nine o'clock at night and have a shoulder to cry on.
So I think it's critical to get out there and be very thoughtful about who you
surround yourself with.
You know, it's to that point, it's interesting. We met at a local event here
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in the Salt Lake area for those that are outside of the city.
And there was this little cohort of four individuals.
It was rather interesting. It seemed that we had different backgrounds,
but similar interests in business.
And we just started going around the circle asking, where have you been?
Where are you at? And how can we support each other? How can I support you?
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And I felt that that was powerful, even the small little time that we had spent,
just because it was like, you know what, but there needs to be more of that.
And yeah, to your point, it's truly about the people that are in your life and really cheering you on.
Because in a world of a lot of individuals, that when they see your quote unquote
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success, they're not so happy for you.
Sometimes they outwardly say it, other times they keep it in.
And it's interesting because you're just trying trying to be the best version of yourself, right?
And, you know, my question to you is, what is your vision of the best version of yourself?
My vision of the best version of myself is just taking the experiences that I've had, right?
(13:08):
The things that I've learned in the trenches through pain, through suffering,
through the whole nine yards, and just share my experiences and give them to people.
It is as simple as that. Don't make the same mistakes that I made.
And here's everything that you need for because I think that.
The most important commodity to me in life is time, right?
(13:30):
I want people, my wish for people, my wish for myself is just to optimize your time.
In the context of this book, I see a lot of people that go down this path with doing two things wrong.
One is they don't take the time in the beginning to do the assessment, right?
To understand, do I really want to be a business owner?
Do I really actually want to leave my job? Am I willing to actually sign a personal
(13:53):
guarantee? guarantee, because then they go down the path and they'll spend time,
they'll spend money, whether it be on an MBA, whether it be on a,
you know, 10,000 bucks at a weekend workshop, whatever, without giving the assessment part of it.
And then I just, I don't like seeing that, right?
So I'm like, hey, I'm going to write a book, three hours, 99 cents, right?
(14:13):
So now you know everything that I know about this and then decide if it's the right fit for you.
And if it it is great go for it i believe that optional business ownership if done right is a huge win.
Autonomy right true freedom if
you use sba lending you buy a good business you can make a lot of money i mean
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think about the average american who's making 1118 a week in wages now it's
gross that up to 70k a year if you take some benefits and add that in i mean
there's businesses out out there now that are making $400,000 to $500,000 of EBITDA,
where you can lever up with 80% SBA financing,
use friends and family money to fill the equity gap, or if you have your own savings,
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you can always come talk to someone like me, I'll happily consider it.
But honestly, if I was you, I wouldn't, I'd just keep all the equity myself.
Doing that process, assuming that you don't even grow the business at all,
just stays flat, someone's going to make more money, right, than they otherwise would have.
And in 10 years, when the SBA loan is paid off, you're going to have a seven-figure exit, right?
And it's like, and during the process, you're going to have more autonomy, more freedom.
(15:20):
You're probably going to meet some really cool people along the way.
I mean, team members are the biggest source of pain, but also the biggest source of pleasure.
And you're going to get a vision for what good government is as well.
Because as you know, as an entrepreneur or business owner, the pile of paperwork is always this high.
And you just see how government could do so much better. So I look at it as
being a huge net win opportunity for people that everyone should consider doing.
(15:46):
But you don't have to spend a lot of time or money, I think,
to know if it's the right fit. Good first step, read the book, go from there.
I want to preface what you just said.
There's a lot of nuggets back there, but it's also, it's prefaced by a lot of
experience from you in buying companies. Okay.
(16:07):
So I want you to tactically take us through that process.
You shared a few things, right? Like, oh, well, you could do this or you could
do this or that. So let's say, for example, I'm an entrepreneur.
I'm out there right now. I'm listening because we've had all sorts of entrepreneurs
on this podcast. So tech founders, real estate investors, family office.
But you are one of the only individuals that we've interviewed that has currently
(16:32):
grown their portfolio through acquiring others in a very strategic manner. center.
So can you share with us, I know you can't say the whole thing and you did say
some things there, but let's go through steps, maybe one through 10.
Is there a 10 step process? Yeah. Five? I don't know. Yeah.
I wrote out, I wrote out nine in the book. The critical one,
(16:52):
which you've talked about a bit as assessment, I created this quick,
you know, couple question assessment tool to understand if you are ready to
be an entrepreneurial business owner, right. And it'll It'll give you a level grade for it.
The other area which I will hit on for it is that it's critical to have a framework
when acquiring, looking at acquisitions.
(17:13):
In the book, I put in what my framework is. I call it the double diamond, right?
And you can get it for free by going to griditdone.com. Just put in your email.
You can access it, and the book walks you through how to use it.
This tool works for me, and I like it because it makes sense.
But there's other countless ones out there to use as well. Well,
critical to have a structured framework to think about acquisitions, right?
(17:35):
Customer concentration, industry growth, fragmented customer base,
management team in place.
Whatever framework you choose, make sure it's thorough and it has a quantitative aspect to it.
And here's the most important part. Do not leave home without this.
Fill it out yourself and then find, for me, at least four other people who are credible in the space.
(17:58):
Maybe they're business owners, CEOs, investors, just people you trust.
And give them the information and have them look at the framework as well and
give you honest feedback about it.
Because the biases that we are all plagued with can have you fill it out to
get whatever end you want out of it. And you can choose to ignore what the other people say.
It's your life, right? but have other people give you feedback on it,
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which goes back to the point of having that correct peer group in the process.
I just spoke with an entrepreneur today. They were building a tech play in the
note space, another app, and it was difficult because I wasn't following him.
He wanted to create an ecosystem as opposed to an important use case scenario
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for technology As opposed to, because at times, like you're saying,
you'll have a bias because you've convinced yourself that this is the product
that the world needs to see.
Because I'm the only one who thinks that it needs to come to life, right?
It's not the market that's telling me that I need to build this specific product,
(19:08):
right? So I think it's definitely the same thing with buying a business.
You've got to have that validation.
You have to have the framework, like he's saying, in mind.
And then you have to have that unbiased feedback from people that you trust
in credible spaces. Yeah.
And the real kicker is that I'm a big believer, especially if you're a business
(19:29):
owner and you can do whatever you want to, right?
You can completely ignore the advice and the feedback and just go out,
grit it done and prove them wrong.
But the real critical part is that if you do that, they were giving you good
advice about landmines to avoid in the process.
So even if you do end up ignoring them, you're going to be armed with great
information that'll probably help you you be more successful if you do it anyways. Yeah, I love that.
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It's the journey. I mean, that's why I call it the odyssey.
I mean, I swear every time I read the title of an odyssey, I think of like Vikings
or something like on a ship, you know, because you know how crazy it is.
You know, the ups and downs, the sun, the rain, the lightning,
the hole in the boat, about this entire journey that we all go through.
(20:17):
But it's currently, it's an amazing thing because you continue to evolve into your best self.
It is the best self-development process you could ever go through.
And to your point, though, that you just said, and you'll make more evident
in your book, but it's really about just knowing that that's what you want to do in life, right?
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And you've got to have that all-in mentality.
And that's what we're seeing with a lot of entrepreneurs. They don't become
successful until they go all-in.
So was that when you had saved your money and then when you had graduated and
then you went all in with your brother on a fitness business?
(21:03):
I was going to open a minimum of three clubs or I was going to pass away trying.
It was never a question in my mind of was that outcome going to happen.
It's as simple as that. If I'm not all in, I'm in the way. If I'm halfway in, I'm halfway out.
Listen, I've been to business school. I'm working on a PhD, and I understand
the value of diversification.
I think the best way to de-risk, quite frankly, is to be all in.
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And the biggest risk to have is to be halfway in and halfway out, going all in.
And also, going all in is a journey so much more enjoyable as well for me.
So if there's one key takeaway for your listeners, it is to go all in.
Well, think about it like this, too. It's this constant reflection and,
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of course, correction based on your previous experiences to make your future
a better horizon, in essence. That's what we want.
But many times, we don't cut the losses to allow for us to grow.
It's like pruning in a garden. If you do not prune your...
(22:10):
We're entering April here. It's beautiful. beautiful, you know, it's blooming, right?
But think about it, right? You don't grow if you don't prune.
And I think that's an area that people think they need to continue to add more
or become better or do all this, which is amazing, right?
Which you should still have that growth mentality, but there's also growth and
(22:31):
understanding that you can get rid of, you know?
So are there any areas in your life where you've had to make changes that pushed
you in an area where you had to get rid of?
Yeah, absolutely. The biggest thing that I've had to learn to adapt to do,
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and here's the thing, is that you go through the assessment process, right?
Then ultimately, you learn once you're out there in the trenches doing things
and everything like that.
So one interesting way that I learned a lesson is that I owned a field service
business, and the technicians were all taking lunch breaks, right?
And said, you know what, guys? How about you just work through your lunch because
(23:16):
you're clearly not taking the
lunch breaks anyway. Why don't you work through lunch and go from there?
And what's interesting is that all that ended up happening is that they basically
still took their lunches, but now they thought they were entitled to get paid for it all.
And this ended up having a good basis, you know, ended up costing me a couple
percentage of EBITDA margins there, right?
So the key takeaways from that
(23:37):
are to one, even sometimes with the best intentions, bad outcomes happen.
Secondly, when I look at businesses that I want to acquire, I always put in
extra profit margin because I know that as an inexperienced operator,
even an experienced operator, I'm going to get in there and make mistakes.
And having that profit margin is critical to provide that cushion because then
(24:01):
when you make the mistakes, you learn from you become a better operator because of it.
But if you don't have the right, if you don't have have the enough bandwidth
to make the mistakes, then it can be a little bit problematic.
Yeah. Because taking that setback ended up making me a better leader in that situation.
So you're in a position where you've had some success. And let's talk a little
(24:22):
bit about your next steps here, right?
And then also let's talk about one strategy that you would have for those that
are out there that are listening that are investors or that are looking for that next step.
That next business opportunity, right? So what would your suggestion to them
be for making an investment in maybe that business?
(24:44):
Or what are some maybe metrics that you look at that you could share with others?
Yeah, big thing for me is that I like simple, unsexy, dirty businesses where
demand is essentially guaranteed.
Simple as that. I like going for the off the beaten path past stuff.
And I tend to think around innovation that the most likely things that are going
(25:07):
to exist in the future are those that existed in the past.
I love the fork, for example. It's been around for thousands of years.
I don't think the fork's going to get out-innovated anytime soon.
That's how I fundamentally think about it. So I like businesses.
One example is grease trap pumping, where it's needs-based, right?
Businesses need to have their grease trap pumped, often by the municipalities
(25:28):
require it. Or even if they don't, if you don't pump your grease trap, it overflows.
And if it overflows, then you got a lot of really, yeah, no bueno. Exactly.
So it's a needs-based business, right? I like businesses like that because so
many startups fail as we know, right?
Because there's a lack of customers. There's a lack of demand.
I like to go where the demand is all but guaranteed and then get myself very
(25:52):
involved and how to staff it up right, how to optimize operations,
how to put trucks on the road in the case of the grease trap business,
and look at businesses like that, that they are just so simple and so easy that
I could explain them to a six-year-old.
My grandma had a breakfast in La Jolla, California, once explained it to me so well.
(26:12):
And I go into this in the book. He said, Reed, in economics,
there's supply and there's demand, and they meet at a certain clearing price.
If there's no demand, there is no market.
So you don't need an MBA. You don't need a PhD to understand that.
If there's no demand, there is no market.
So go where demand is durable, robust, and guaranteed.
We should have your grandma on the podcast. She was an amazing woman.
(26:36):
What is she, still alive? Nah. I don't care. It passed away some years ago.
But man, that's a really good nugget for you to hold on to moving in the future.
So speaking of future...
This book, it's coming out soon. And I'm, like I said, I'm going to get it today.
Well, when I can get it, okay. It's launching soon. But tell us a little bit more.
(26:58):
And then really, what was the ultimate motivation to get this out to the world?
The ultimate motivation is
that to be a better American is to be an entrepreneurial business owner.
The autonomy, the relationships, and to see what good government looks like.
Like, is it for everybody? No.
(27:19):
Is it for a lot of people? Yes. And the demographic trends around being able
to buy existing businesses now because of the silver tsunami is unprecedented.
It is a fantastic opportunity that I think everybody should consider doing at
some point in their life.
And I've had the ability to be in this space for 16 years.
And I see a lot of people that don't know what the first step is to take or
(27:43):
that go down a step that doesn't make sense for them.
So I was like, this is great. I'm just going to write a book,
sell it for 99 cents in three hours of your time as a great first step for people
that want to go that are considering going down through this route.
Because at the end of the day, to be an actual business owner is to be a better American. I love this.
Well, I'm excited. So how do we get a hold of you?
(28:06):
And then what is the best way to help support you on the podcast for those out
there that are listening?
Yeah, griditdone.com. that's where you can get the book
99 Suns through the end of May and then I'm active on
LinkedIn and Twitter as well so feel free to feel free
to engage with me there and I always tell my students in class too it's like
believe it or not I'm going to learn as much from you as you're going to learn
(28:28):
from me so just drive that engagement you know engagement's the fun part because
you never know who you're going to meet once again he just said and this is
a challenge for everybody out there is to go meet somebody new but also,
challenge yourself onto what you can provide for them not only what they can
provide for you, always be a giver.
That's what we want to do here with this podcast. And thank you so much for
(28:50):
listening to the Founders Odyssey podcast.
My name is Nathan Bridge, your host, and make sure to like and subscribe if
you have not for future episodes and go back and look at all of the different episodes.
We've had amazing guests, including Reid here today. So thank you so much for joining us.
We can't wait to see you guys again soon.
(29:11):
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I’m Jay Shetty host of On Purpose the worlds #1 Mental Health podcast and I’m so grateful you found us. I started this podcast 5 years ago to invite you into conversations and workshops that are designed to help make you happier, healthier and more healed. I believe that when you (yes you) feel seen, heard and understood you’re able to deal with relationship struggles, work challenges and life’s ups and downs with more ease and grace. I interview experts, celebrities, thought leaders and athletes so that we can grow our mindset, build better habits and uncover a side of them we’ve never seen before. New episodes every Monday and Friday. Your support means the world to me and I don’t take it for granted — click the follow button and leave a review to help us spread the love with On Purpose. I can’t wait for you to listen to your first or 500th episode!
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com
Cold Case Files: Miami
Joyce Sapp, 76; Bryan Herrera, 16; and Laurance Webb, 32—three Miami residents whose lives were stolen in brutal, unsolved homicides. Cold Case Files: Miami follows award‑winning radio host and City of Miami Police reserve officer Enrique Santos as he partners with the department’s Cold Case Homicide Unit, determined family members, and the advocates who spend their lives fighting for justice for the victims who can no longer fight for themselves.