Running a Business with a Countercyclical Nature with Jarred Kessler: An EOFire Classic from 2022

0:01John Lee Dumas:Light that spark fire nation, JLD here and welcome to Entrepreneurs on Fire brought to you by High Level, the all-in-one sales and marketing platform. On today's classic episode, we'll be breaking down running a business with a counter-cyclical nature. And to draw these value bombs, I brought to Jarred Kessler and EO Fire Studios. Jarred is the CEO and founder of EasyKnock, a real estate and finance expert with leadership experience at firms like Goldman Sachs. and he pioneered the first residential sale leaseback platform and so much more. And today we talk about how the world is messy, but some companies and people genuinely want to help and how grit is underrated.

0:36John Lee Dumas:And without it, problems hit from every direction and so much more. And we have a big thank you to give our sponsors and Jared for sponsoring today's episode. Stop duct taping your business together. High Level runs your website, your funnels, email, automation, scheduling, payments, and memberships all in one place. And when you sign up at High highlevelfire.com, you get a 30-day free trial, plus my exclusive bonus stack that includes weekly office hours with me and much more. Visit highlevelfire.com, highlevelfire.com. Fire Nation, are you ready to build something special in the next 50 days?

1:12John Lee Dumas:Check out my free YouTube series, 50 Days to Something, short and strategic step-by-step videos by me, JLD. On day 50, you'll have a valuable asset. And the best part is it's completely free. Visit eofire.com slash YouTube and start day one today. Jared, say what's up to Fire Nation and share something that you believe about becoming successful that most people disagree with. Yeah, well, what's up to everyone? I would say the number one thing is, and the misconception is, is people that have made a big mistake in their life. What tends to happen when people are interviewed in job interviews is they're scared to talk about something they did wrong or a mistake they made.

1:56I think there are those that are humble and those that will be humbled. And the best people are people that have been punched in the gut because they usually learn from it and then they have grit.

2:05John Lee Dumas:Fire Nation, we're going to be talking about grit today. We're going to be talking about running a business with a counter-cyclical nature and a lot more. So stick around for this. But before we get into all of this kind of mouthful of words that we have to discuss today, I want to know a little bit more about you, Jared. Break down your background. So I have a pretty unconventional background. When I was in college, I used to write scripts for a lazy producer at MTV. And he had me send up. He had me doing all the work for him because I was getting exploited as a college kid. And I was somewhat creative.

2:43So I used to send up scripts. and after college I actually got hired by MTV and I worked on a bunch of the shows in Times Square. I realized very quickly that I couldn't afford my rent so I sold out and I went to Wall Street and over the course of 18 to 20 years I was more of an entrepreneur. I wasn't a traditional investment banker. I created different types of businesses and new asset classes that didn't exist and really got tired of looking at numbers. I felt every day that I wasn't fulfilled and I wanted to just not see numbers. I wanted to be able to see people. And about almost six years ago in October, I started EasyKnock.

3:25And along with EasyKnock, I also enjoy advising other companies and investing in other companies. I'm from New York. I'm a fourth generation New Yorker, which is very rare. Most people think that a lot of people are from New York, but no one in New York is from New York. and that's really who I am professionally and personally. I like to play the banjo. I love to travel and given my MTV background, I love to play practical jokes because that was a big part of what I was writing in college.

3:54John Lee Dumas:I love that. And Fire Nation, as I mentioned during the intro, we're talking about running a business with a counter-cyclical nature. So counter-cyclical, what does that even mean for a business to be counter-cyclical? A counter-cyclical business is exactly what it sounds like. When things are good, most companies perform well. And there's a segment of the market when you go into a recession, people have different needs and they're driven by those needs and there's demand for other sorts of businesses. Anywhere from things like credit cards, more people have to put money on their credit cards to sometimes people go to dollar thrift stores more because they're saving money.

4:41Those are examples of counter-cyclical businesses. With EasyKnock, we give people the benefit of selling without having to move. So in our business, as an example, more people are going to want that benefit if they're asset rich and choice constrained.

4:57John Lee Dumas:So can you give us an example of what that looks like? Like maybe a business that you've run, or maybe one that you've advised or consulted with, but one that really fits a classic example of this? Let's use the last year as an example. At the beginning of the year, which seems like a lifetime ago, given all the things that have happened in the world, there was another round of stimulus checks. So people had more money in their bank accounts. So people that would go to the dollar thrift store, Right. They now think that they can where they were able to go up the the chain in terms of retail stores to, you know, more luxury stores and whatnot.

5:41And so those stores were not doing as well because things were better. And then when the market started to have inflation involved in the economic cycle, and, you know, for example, the average American right now has a monthly expense of$600 more per month than they did last year, they are now all of a sudden going back to those dollar thrift stores. So that is like a very simplistic example of how a counter-cyclical business would work. And when you're in a recession, those are the type of businesses, if you're an investor, you want to invest in. So in the founding of your specific company, was the counter-cyclical nature an important

6:22John Lee Dumas:aspect when you were identifying, yes, this is what I'm going all in on? I wanted to see people, not numbers. There's an intrinsic value of helping people. I'm a big believer in success is what you give, not what you take. So as part of that, as Wall Street sometimes is villainized, I thought that there was an opportunity to bridge the gap between Wall Street and Main Street. And that did drive me to my decision because I realized that when things are getting a little more challenging, and for six years I've been saying it, and we went through the most euphoric cycle in the nation's history with a 15-year run or 14-year run, I saw a huge opportunity to help people.

7:08So yes, the answer is yes, it did drive my decision.

7:10John Lee Dumas:And let's talk a little bit more specific about that. What do you feel like the results were from that decision? Give us some specific examples of how that decision has helped you in both the good and the bad times. In both good and bad times, people are going to always be looking for solutions in their life. And life gets in the way all the time. It's happened to you. It's happened to me. It's happened to everyone at my company. It's happened to everyone in my family. And in good times, we're able to give people flexibility. And the thing that's one of the most surprising things to me is how many people we're helping on a daily basis and how much it's affected me.

7:51And it drives me to want to help more people. In the bad times, when things are bad, people are scared. And it happens more often than obviously when times are good. And if you can be a contributor to being part of a solution, it's amazing. And the thing that's happening in the economy, which is hard for people to believe, is the majority of the middle class is underserved and they need solutions. And there's a tremendous amount of frustration. And I think we were pretty early on in identifying that, attacking that, and making sure that we eliminate bad choices for people and we provide better choices.

8:30John Lee Dumas:Do you have one example of that, how the middle class is underserved, needs a solution, and you're providing that? Get specific. In 2008, as everyone knows, there was something called the Great Recession. And there were mortgage companies that were lending to folks, which was known as subprime. And those folks, they knew were not able to pay back their loans. So what happened was, is regulators came in, they fined lenders, they fined banks, in many cases, in most cases, rightfully so. And like any other policy change, these folks were penalized, they had to pay big fines. And what happens when that happens is there's always unintended consequences.

9:09And the unintended consequence was you fast forward 14 to 15 years later, half the U.S. housing market is shut out of the mortgage markets. So they're they're stuck. There's a trapped equity crisis in people's homes. You read a lot about home appreciation now. You read a lot about inflation. But people don't really talk about the trapped equity crisis, meaning I have this equity in my home. It can make my life better. And I can't. So what does it do? It drives people to run up their credit cards, student debt, payday loans, and easy knock comes in and we buy people's home and we rent it back to them.

9:48And that decision allows people to have money. Now they pay off all those bad choices. And now their cost of living goes down. In most of our cases on average, their FICO scores go up by 80 points and our customers are now able to become lendable again. One in three of our customers buys back their home. So we're seeing real detailed results of how we're changing people's lives. And the best and most important thing is we're all mammals and we all have homes and we want to protect our homes. And it's humiliating when you can't, and you give people dignity, you empower people and you give them flexibility and control.

10:28You don't uproot and disrupt their families.

10:30John Lee Dumas:I love that whole part about giving the dignity back and giving people the comfort and the knowledge and not uprooting. Because we all know, Fire Nation, we have a lot of stuff going on when we're running our own businesses. We don't need that extra level of stress, mental bandwidth, anxiety of not having a solid shelter for ourselves and our family, et cetera. And we have a lot more to talk about specifics in this whole area when we get back from thinking our sponsors. Fire Nation, ideas are exciting, but systems will allow you to create freedom. That is where High Level comes in. High Level allows you to build and run your entire business from one platform.

11:10John Lee Dumas:Website builder and hosting, funnel and landing pages, email marketing, automation and workflows, calendar booking, payments and subscriptions, even course and membership hosting. Everything works together seamlessly. Plus, award-winning 24-7 support, so you are never stuck. And when you go through my link at highlevelfire.com, you unlock my full bonus stack, a 30-day free trial of High Level with full access, a private 50-minute coaching call with me, weekly live office hours with me, a digital copy of my book, The Common Path to Uncommon Success, my 50 days to something execution roadmap, and more.

11:44John Lee Dumas:Stop piecing tools together. Start building momentum. Visit highlevelfire.com and start building your something today. Fire Nation, are you ready to create something special in just 50 days? If you just thought yes, then check out my free YouTube series, 50 Days to Something. Every video is short, clear, and built to move you forward one intentional step at a time. Clarity, offer, validation systems, momentum. By day 50, you are not working on something. You have built something, something to be proud of. And this is completely free on my YouTube channel right now. If you're done letting weeks just drift on by, visit eofire.com slash YouTube.

12:29John Lee Dumas:That's eofire.com slash YouTube and press play on day one. 50 days will pass in the blink of an eye. The only question is whether you'll still be thinking or finally building something special. Now, Jared, I loved when you talked about how the middle class is underserved, how they need solutions. And that's one thing that I always talk to you about, Fire Nation, is if you are willing and able to become the number one solution to a real problem in this world, you are going to win on some specific level. If you're a number one solution to a real problem, Jared found a real problem in this world and he created the best solution.

13:10John Lee Dumas:Now, Now, residential sale leaseback, it's a mouthful. What the heck is residential sale leaseback? A residential sale leaseback is really a brilliant construct or structure that has existed for decades in the commercial real estate space. So if someone owned an office building and they wanted to get liquidity, but they didn't want to leave the space, They would just become a renter or a leaser of their property. And no one really understood what the application could have been for the residential market. But earlier I discussed how the dynamics of the Great Recession, how it created this unintended consequence.

13:53And by giving people the benefit of selling without having to move, that gives people the benefit of unlocking that trapped equity in their home. And now they can make better decisions in their life. And you often will hear your home is not an ATM machine. Well, at the end of the day, these are Americans and it's their decision. We want them to be successful. We ensure through various different methodologies that they're going to be successful. But we're basically creating a system where people have liquidity and then can make better decisions in their lives with the money they have, which is theirs already.

14:29They're a renter of their own home to make it very simple.

14:32John Lee Dumas:So you said that there's been some great success stories with what you've done where people, you know, even one in three have been able to buy their home back, et cetera. Can you tell us about one specific example? And again, we don't have to use names or actual real specific locations, but just give us like an aerial view of a real scenario that you're really proud of with EasyKnock. Unfortunately, most of the story, I wouldn't say most, a lot of the stories I'm going to tell are going to be what are going to make people cry because they're very touching and moving. And one story that always stands out to me is we had a customer whose son needed heart surgery.

15:12And you could just imagine you have all this money built up in your home. I believe the woman didn't even have a mortgage and her medical bills were running up. She had a solution right in front of her. She was living in it every day, but she had no way to get a mortgage. Her life was on a scale of one to 10. It was about a thousand in terms of her stress level, because for anyone that has ever had a child, you don't see anything else but trying to figure out how you can help that child. So what we did is we bought her home, we gave her the money out of her home, and she was able to then focus on her child.

15:51Fortunately, the child was safe and healthy after the recovery. And I got a letter a few months later from her telling her that I basically saved her life. And to think that you start a company and a sale leads back, you don't think you're a doctor. But in many ways, mental health, giving people, taking that boot off their neck is a very powerful thing. And it's very fulfilling and it drives our company and the mission around our company. And it also has created me to create a nonprofit for the company as well.

16:25John Lee Dumas:Easy knock. How did you come up with that name? Take us through that process. I'm going to be very honest because I don't know how to lie. When we started the company, we looked at hundreds of different names and it was the most economically affordable name that made sense. And at the end of the day, the name kind of, in some ways, it's funny, it became a took of a life its own, because we want to make things easy. And we're, we're, we're, we're focused on people's homes. So we're knocking on their door. So honestly, at the beginning, we didn't really have that intention. But it kind of worked out that way.

16:59And sometimes luck is better than planning.

17:02John Lee Dumas:Sometimes luck, Fire Nation, it is better than planning. That's just how it happens. And I've always just kind of loved reading over what you do. That name, Easy Knock, because it just kind of, to me, goes with exactly what you've created and what you're offering as a solution, again, to problems, Fire Nation, that are out there in this world. Speaking of entrepreneurs, what is your top advice for entrepreneurs who are in the early stages of founding their company? Well, John, you kind of talked about this earlier that we're going to talk about grit today. So one of the reasons I chose a school for my kids was it was one of the lab schools for Angela Duckworth's book about the power, you know, her book about grit.

17:43And I think it's one of the most underrated things that people talk about. And if you don't have grit, you're going to have problems coming at you from every different direction. And starting a business, you're going to have to be prepared to always find a solution. And most of the time, there's always a way to get there. But if you don't have the grit, if you're not walking in the desert for 100 years with no food and water, and you're not prepared to do that, you really should not start a company or be an entrepreneur. But if you're prepared to do that, and you can go through walls, you can do it with integrity, and you could think outside the box, you're going to be successful.

18:27And if you're not, you're not going to be successful. So my advice to everyone is make sure you think a lot about grit, you have tenacity and you have thick skin, and you're prepared to hear no a lot.

18:38John Lee Dumas:Jared, we talked a lot about many different topics today. I mean, we talked about being counter cyclical. We talked about having that grit. We talked about really serving the middle class in a meaningful way by providing the number one solution to real problems that exist in this world today. What's the one key takeaway that you really want to make sure our listeners get from our entire conversation today? So the thing I want everyone to know is the world is a mess today, but people can be rest assured that there's companies like EasyKnock and myself that truly do care. And there are good people out there that want to help people.

19:15And if there are, if there's someone out there, like the story I described earlier, that own their home and they're in trouble. We want to help them. And I honestly and sincerely are saying this not to promote our company. It's because I care and I'm a human being before I'm a business person. And we are here to help anyone that needs help.

19:38John Lee Dumas:Where can Fire Nation connect with you? Where can Fire Nation learn more about your company? And then we'll say goodbye. So anyone that wants to get in touch with myself or the company hello at easy knock.com k and e and knock not any of those uh clever spellings that people have on websites it's easy knock.com and hello at easy knock.com is our email address feel free go to our website reach out to us and john thanks a lot for uh giving us the opportunity today jared it was our pleasure because fire nation knows they're the average of the five people they spend the most time with. And you've been hanging out with JK and JLD today.

20:17John Lee Dumas:So keep up that heat, Fire Nation. Head over to eofire.com, type Jared, J-A-R-R-E-D in the search bar. The show notes page will pop right up. And of course, that direct call to action, easyknock.com. That's like knocking on a door. Easyknock.com. Jared, thank you for sharing your truth, your knowledge, your value with Fire Nation today. For that, we salute you, brother, and we'll catch you on the flip side. Right back at you, brother. Thank you. Hey, Fire Nation. Today's value bomb content was brought to you by Jared. And Fire Nation, over the last decade, I've interviewed more than 3 ,000 of the world's most successful entrepreneurs.

20:56John Lee Dumas:And I've created a revolutionary 17-step roadmap to your financial freedom and your fulfillment. I put it all into my first traditionally published book, The Common Path to Uncommon Success. personally endorsed by Seth Godin and Gary Vaynerchuk. The common path to uncommon success is the step-by-step guidance that you need to achieve the lifestyle of your dreams. Visit UncommonSuccessBook.com and I'll catch you there or on the flip side. Stop duct taping your business together. High Level runs your website, your funnels, email, automation, scheduling, payments, and memberships all in one place.

21:34John Lee Dumas:And when you sign up at highlevelfire.com, you get a 30-day free trial, plus my exclusive bonus stack that includes weekly office hours with me and much more. Visit highlevelfire.com. Highlevelfire.com. Fire Nation, are you ready to build something special in the next 50 days? Check out my free YouTube series, 50 Days to Something. Short and strategic step-by-step videos by me, JLD. On day 50, you'll have a valuable asset. And the best part is it's completely free. Visit eofire.com slash YouTube and start day one today.