The One Trait That Determines If You'll Be Rich, The One Thing Worth Micromanaging On Forever, How Bad Is The Economy Affecting Marketing?

0:02By the way, one thing I think we should talk about too is how to react. Really the most important trait of business? What are the most important traits of business? When you're getting attacked on all sides, let's say it's a bad economy, or like maybe one of your employees is getting sued for something, or like maybe you're getting sued for something, like whatever it is exactly, right? And how you react to it in general. And so we can both speak to it. What do you think is the one word that comes to mind here? For how to react or what do we - Really how to behave if you want long-term success in these situations.

0:34Logical. Okay. In my mind, the keyword is resilience. And so, but I think they kind of go hand in hand because the logical move is resilience because there's no other thing. Like your businesses are problem solving machines. And if you can't solve and you lose your poo-poo right now, when things are hitting you, then you deserve to not get to the next level, right? You should be able to tolerate these things no matter how, like you only need to worry about what you can control. They only worry about controlling the variables and resilience goes a long way. This is why most people can't take it when it comes to business.

1:06So when things come my way, I'm just like, yeah, okay, lawsuit over. Oh, yeah. Okay. Yeah. Great. Oh, you, okay. Got it. Oh, you're getting sued. Okay. Got it. Okay. Doesn't matter, right? Oh, AI is coming. Oh, the economy sucks or whatever. Yep. Just keep going. Just keep taking it because you don't deserve to become very successful if you can't take it. I agree with that. I was on a phone call right before we started recording and I was talking to someone about loans in general. I had a buddy of mine who is their business is doing okay. They got this big call it. They have monthly expenses because they put a lot of money into a home project.

1:52And I don't know what they put in, but let's call it around 5 million bucks. but the home is worth conservatively 15. So they're just like, oh, maybe I can pull a few more million. So I was talking to a buddy who knows a lot of hard money lenders. And after he's like, yeah, I'll make a few introductions to one of my buddies. And we were all talking and we were talking about just how life is. And I'm like, dude, life right now really sucks. And he's like, why? And I'm like, business is going okay. The economy is not great. We're getting kicked from a lot of different sides. just being quite frankly, you know, you and I have nuts.

2:28Yes. Yeah. And you and I have both dealt with silly legal issues that we shouldn't have, but sometimes you just got to deal with them in business and you got to fight them, but then you're paying legal costs, which sucks. And I was telling him, you know, at least in my situation, I'm dealing with construction on a home right now, which is eating up a ton of cash. The fires, I feel really bad for the people who lost their homes. Um, but the fires combined with the tariffs have created a new situation and construction. In the city of Los Angeles, you have a lack of construction people. So now they're charging more money.

3:02So I got to pay more than was budgeted. The second thing that I got to deal with is not only do I got to pay more than what was budgeted, but I'm paying more because of tariffs as well. Tariffs aren't zero. I'm not saying they were always zero, but they're higher than what they were before, whether he's working at least 10 % more. At least 10 % more. And realistically for a lot of other stuff, I'm paying 20 to 30 % more, at least right now. And I can't get the cost out. I'm trying to prepay and not pay any overages. And I'm like, look, I'll just send the money right now. So I'm getting hurt on all end.

3:37And I was telling him, I'm the brokest rich person you know right now. And he laughed and he's just like, you know, I've heard that a lot recently. And I'm like, I have money, but I'm tying up a lot. I'm investing a lot. I'm not taking distributions. So I'm like - Does it feel like you're cash poor? I am cash poor right now. Just being very transparent. Yeah. Because I'm dealing with construction, expanding business and buying companies. And I'm not taking distributions. The company is healthy and we're profitable, but I'm using the money to grow the business even more. So I'm getting hit on all sides.

4:12I'm living off of savings. I'm investing into construction. and I'm also dumping personal money into the business to make it grow faster and buy more companies. So I'm really getting hit on all sides. And then I'm cash flowing things as well. Like we deal with companies and ad spend and very rarely do we flow media, but sometimes we got to flow four or 5 million, 6 million at a time, seven, eight. And then if you start doing it for a handful of clients, it's not four or 5 million at a time. It starts getting to 10, 15, 20. So a lot of my cash, because we can't go to a bank and collect, use bank money and pay interest.

4:58Our interest rate right now is call it 3.25 plus sulfur. So you're looking and call it around 8%, which isn't bad, but getting paid a percentage of ad spend and then paying 8 % to float someone's money means you don't make any money. Yeah. The economics don't work out. This is just a loss. I'm floating it, which means I'm not getting the, call it the 4.6 % or whatever interest rate I get from my own bank account. I'm floating it for the clients just to make sure we have the client. Then that means I have less cash as well. I'm getting hit on all sides, floating money, spending more on a home and construction, buying corporations, and not taking distributions.

5:43is yeah but the thing is the real question is why do we do all these things right it's like okay someone's in trouble like yep gonna pay the legal fees um you know oh do we need to do we need to over hire right now yeah we need to over hire because like it seems like oh the economy's starting to pick up again it's it's we're we're making bets you're you're making a bet on the home long term for your family okay for the businesses why are you buying on the because you're expanding for the long term right um like everything you're doing is is an investment at the end of the day most things you would agree with that, right?

6:12Almost everything's an investment. Yes. And without getting into too many details, it's not just everything is an investment, but some of the things we do and we take is because of ethics. Like when you're talking about, let's say if someone on your team is dealing with a legal battle and they shouldn't have to deal with that, but it's partly related to you, but it has nothing to do with you and it's not your fault. And we had an example of this in which we had a falling out of someone that was working with us and the new person that's managing that division, they're in a country where the laws are murky.

6:48When I say they're in a country where the laws are murky, I'm talking about people bribing and stuff. We won't do that. It hurts us because cops don't necessarily go to someone's house and do what they're supposed to, even if they're maybe hypothetically a court order because there is things like bribery that you had to potentially deal with, right? So then the person's like, oh, they're probably going to go after me. I don't know what I'm going to do. I'm like, what do you mean? The company will take care of it. And she's like, or they're like, are you sure? I'm like, yeah. And all companies are like, no, you would have to get approval.

7:29And most companies wouldn't do it. And they just say, you're on your own. I'm like, oh, that's just unethical. Yeah. If you're getting dragged into something because of me and you're just a bystander, it should be my problem, not your problem. But I also think it's a long-term thing too, because you're building a lot of goodwill with that person, assuming that person's really good as well. Like on ethics side, definitely you should protect them. But on the other side too, you are building a lot of goodwill. I am. Yeah. And I know you've been in similar situations in the past and you always tell your employees you have their back.

8:00Yeah. But even if that person isn't a rock star, you still have their back. Yeah. Goodwill is a great bonus. Just ethically, you have to do what's right. Yeah. And I would say the majority of business people would not, I'm talking like 51 % maybe, are probably not thinking in this way. Because they're thinking about what's the quickest way, the way to the quickest buck. But the way to the quickest buck is actually the slowest way by doing the ethical thing, which takes longer. Yes. And too many people are black and white. Like, we have to do this. If we don't do it this way, then we're, you know, uh, then we're just putting company money at risk or whatever.

8:34And I look at a lot of these situations in business and marketing, it's not black and white. You know, like I was talking to someone the other day about branding. Um, and I know Gary Vaynerchuk's big on branding. He has that book, right? Something about the purple or the, uh, the day trading attention, day trading attention. Yeah. So purple's in the middle. Red is like, I think once, once branding, once performance. Yes. Yeah. And I totally agree with him on that. He's done really well as a marketer. You know, like I've been investing a lot in marketing lately and you have too. And a lot of people, you know, in a bad time will tell me, dude, why should even people on my team and we're marketing agencies like, we've been doing this for three to six months, Neil, there's no ROI.

9:20You sure you want to keep doing this? You haven't just kept doing this. You've actually increased the spend, Neil. You sure you want to do this? And I'm like, yeah, why wouldn't I want to keep doing this? This is how you grow a business five, 10 years from now. But like it's burning a lot of cash. And I just think you can't, you know, with 80 % of your marketing efforts and your money, you have to be long-term. And when you take those bets in a crappy time, like we're both getting kicked and we're feeling it, that's typically when it pays off the most, but you really feel the pain when you do that.

9:55growth is uncomfortable in any way. And so it, it naturally, like if we're investing, yes, that's uncomfortable. If we're getting attacked on all ends, like, yes, it's uncomfortable, but you learn as an entrepreneur that that's the price of admission. And you have to keep paying that price every single day. It's just like going to the gym. You're just getting, when you're going to the gym, yep. When you work out, yeah, that's inflammation, right? You're, you're just going for inflammation every day. You're running into it. Um, and so that's what But I would say, by the way, one thing real quick.

10:23What do you think it is? If there's one thing that's worth micromanaging on forever, what do you think it is?

10:32I don't know. I myself am not a micromanager, but I'm a person who heavily checks in. Maybe someone would consider that micromanaging. And I typically only check in for very specific tasks that I know really moved the needle for the business or potentially could. And I check in every day and sometimes multiple times a day to make sure shit's getting done on time. Excuse the language. Oh, I like that. But my opinion on this one, the one thing that's worth micromanaging on forever, and I listened to this. I am paraphrasing from Steve Jobs. The one thing the founder has full control over is continuing to raise the bar on talent and ruthlessly deciding who to let in.

11:15Because one really good engineer is not 10X. We're talking 50X and 100X, maybe even 1 ,000X now with things like Cursor, right? And I think if there's one thing that we can control, for example, like your executive team, for example, that's the thing that's worth micromanaging on and making sure you have the best of the best, right? Because then you'd have to worry about all these things. You're only checking in on the things that maybe you can drive the most impact on. And I do think that the second thing would be the enforcer mentality, right? Like if you can be like Neil or actually a lot of my Indian friends are very good enforcers.

11:45I don't know why it's like that. It's just like that. They're like, some are really good about checking in a very kind way. It's like, hey, how's this going? Right. And Neil's just like, hey, you just get a phone call from Neil at random times of the day. Yeah. Yes. And then I text when they don't answer the phone. And then I try. You even hit the notify button when they're on sleep. Yes. I do that with you too. Have you noticed that? You've never hit, no, because mine's on, I just, it doesn't hit me. I have no notifications on. Yeah, but yours says sometimes do not disturb and I click notify.

12:14Yeah, but it doesn't hit me. Oh, it still doesn't hit you? No, nothing hits me. Yeah. Phone calls won't even hit me. That's why sometimes I don't pick up your call. I don't get any ring. It doesn't, it doesn't, like, it's always on silent. Yeah. So when I get it, I'm just like staring at my phone. So, yeah. Oh, got it. That's a good way to deal with unwanted calls. Yeah. Yeah. Um, so the way I see it is like, if someone doesn't answer my phone call, I assume that they're on a business call. And I know the business calls usually last every 30 minutes or hour. So I'll call every 30 minutes. I'm like, you free, you free.

12:53Hey, did I catch you at a bad time? If you're busy with a customer, don't answer my phone call. But then I call again in 30 minutes. You know, I think it's important too, because you don't, there's a lot of people, myself included in the past. I've actually gotten better about this, but you don't wait to call. Most people are, Hey, you got time. Hey, are you free? When are you free? Oh, when can we schedule a call? You're just like now in Slack, I just hit huddle. Like I just hit huddle. Like I didn't even pick up my phone. I just hit like, cause you, when you go into Slack, you use teams, right?

13:22So there's a little headphone button. Just hit that. Like, I don't, I don't need to wait anymore. And then they'll call me back. Dude, I do that in everything in life. So for example, I was texting a realtor. all right and i kind of know the realtor and i kind of don't and this is tuesday what does that even mean you kind of know and you kind of don't i've never met them uh-huh but they're known for selling the most expensive homes okay yeah so i text this person 8 26 p.m tuesday night hey i'm thinking of listing my home in beverly hills hi okay let me know where it is and we can discuss okay and then he's like i'm like yeah what's a good time i was ready to call him right then and there but he said too quickly can we have a call in the a.m i was like man this blows yeah and he's like what time's good i'm like 10 a.m he's like great talk then so then i sent him all the design the renderings i'm like for context the house gets done in november that's what it's supposed to look like he's like got it thanks if you've ever built a website you know how tough it can be to keep a strong design while ensuring site performance is fast that's where framer comes in and it totally changes the game.

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16:01Shopify lets you easily create email and social media campaigns to reach customers wherever they are, whether they're scrolling or strolling. If you're ready to sell, you're ready for Shopify. Turn your big business idea into with Shopify on your side. Sign up for your$1 per month trial and start selling today at shopify.com slash marketing school. Go to shopify.com slash marketing school. Shopify.com slash marketing school. Wait, wait, you're selling the new one? If the economy keeps going bad, yeah, I'm going to sell the new one. Right? So I'm doing it as a contingency. I'm not actually planning on listing it or selling it.

16:40But I don't know how bad things are going to get with the economy tariffs. and all of that. And I want a worst case backup option. Keep in mind too, at the same time, just being fully transparent, this is probably too many details. My construction on my home, a remodel, you're talking about, I don't want to give too many deals, but let's just say a good amount of money, right? Not a million or two or not even five, like substantially more. You just gave all the details. I didn't say the real amount though. I paid a decent amount for the home. What I was trying to find out is will the economics make sense?

17:29For him, actually, I'll just tell the numbers and the data live. I don't think it's going to really hurt me. I bought the home for$18. The construction estimate is around 10. I haven't paid 10 yet. So call it, I'll be in 28 million bucks. That's a lot of money. I have debt on the house of 7 million bucks. So will, what I'm trying to find out is if I actually put that much money in, will the home sell for 28, 30, 35, or will it actually only sell for 20 and people won't value it? And the thing I ended up getting back from the realtor was he's just like, he's like, dude, did you end up checking out Selena Gomez's home?

18:06She just ended up spending $35 million for 9 ,000 square foot, really old home, bigger lot than yours. And he's just like, if it's done right, he's like, you can get four to 5 ,000 a square foot. I have 7 ,000 square feet. So 4 ,000 is not break even because then there's realtor fees and taxes to sell a home and all this kind of stuff. But when I started getting into the 5 ,000 or 4 ,500, et cetera, I start inking out profit. The only reason I was considering it and I had a conversation with my significant other is if I look at business right now, this is the shittiest time for us. This is also the shittiest time for anyone in the marketing world or typically business world.

18:45Would you agree with the statement for most businesses minus like the Carvanas where youth cars are actually more valuable because less quote unquote potential tariffs. So I was like, honey, sold the house worst case. We may have to. I want to use the money to buy more businesses. That way I don't have to rely on the bank or anyone else. She's gone through so many times with you. And she's just like, if you think it's best for the family, I support you. A home is a home. It doesn't matter where we live. And we don't live in a bad place right now. I live in a hotel condo in a five-star hotel where you can get room service and stuff like that.

19:22So it's not like I'm not putting them in a terrible situation. Did they open that restaurant here? Is it what? Did they open that restaurant here? Not yet, right? It's almost done. Okay. But they do things where they cook for you and they have chefs that I can cook upstairs. and stuff like that. But the restaurant's almost open two, three more months, I think. But going back to it, she's like, do whatever it takes. And the interesting part about my life at this point, because I'm 40. You're 40 now? Yeah, I turned 40 at the YPO event. Oh, you did? When I was speaking. Yeah, Neil never talks about his birthday.

19:52Yeah, I know. Because I know if I told you at that day, you would have been like, oh, hey, everyone, it's Neil's birthday. That's why I scream for free because it's my birthday. That was my version of a cake. Okay, okay. Well, right. And it was free. 40. Damn. You hit the big four zero. Yeah. So at 40, I'm at a point in life where I can sell my home and I have quite a few homes that I probably have one too many. Some of them are down in value, so I can't sell those. But the latest one I'm doing construction on, probably not. I can sell the homes and buy more businesses. But when you have a kid and kids, you know, my kids are like, daddy, daddy, we can't wait to move into the new home.

20:31We want a yard. yeah like they straight up say like we want a yard we can't wait to like are worth a lot more yeah so no joke dude for once in my life i was telling my wife i'm like i don't know if i actually want to sell the home to go buy more businesses even when we make more she's like why and i was like dude like i've been a chiropractor three times this week because my neck's been hurting my back's been hurting it's been hurting for a few weeks it's finally starting to get better uh i have elbow i think they call it tendonitis now where it hurts when i stretch my elbows or you know walk around we're getting old i have a problem with my foot that came back it's on my heel that hurts every time i step and sometimes i just keep limping god build more muscle uh-huh yeah so it's like there's just things that are getting wrong and i was just like you know what i actually want the memories of living in a home with our children and i'm kind of okay not to buy as many businesses and not grow as fast because i'm not going to remember how much money I made or didn't make, I'm going to remember the moments that I really enjoyed with my kids.

21:35Dude. So yes, I agree. And I think that's worth infinitely more money. And so I took my mom and dad to Terranea over the weekend, which is like a resort place in Palos Verdes, right? And that was good because I don't regret that. Sure, it was tough getting them there and everything. I had to call them a car and had to order all this stuff to just make sure everything was comfortable for them. Um, but I just look at it and it's like, I also did this. I bought this up from Reddit. It's like, what's the one thing you regret not doing with your parents? The thing to do for sure is always to bring the vlog camera and then have them talk about their lives, right?

22:10Cause then you can share it with the kids in the future. Um, so my point of saying all this is that I'm like, man, I don't regret this at all. Cause I get all these core memories and they'll remember it to the, to the last day. Um, and the cool thing is this, this is a customer service thing. This ties in with marketing as well. Terranea screwed up on so many things. They dropped one of my parents on the ground, right? Wait, what's, oh, Terranea is the resort. Yeah, the resort. They dropped like when they're picking them up? Yeah, yeah. And so like basically putting them into like a wheelchair, for example, it dropped them, right?

22:41Okay, that's a lawsuit right there. And then they screwed up like many times on like coming to pick us up. Like, you know, one of my parents needs a golf cart, not an actual cart because it's hard to get into it, right? So just a lot of things that were just gone wrong. and what ended up happening was they basically discounted like 95 % of the whole thing. I'm like, that's good on you guys, right? Because, you know, one of my parents didn't want to press charges or anything because the fall wasn't that bad at the end of the day, but they knew they could have applied pressure, right? My point of saying all this is that, one, core memories are worth paying for.

23:13Second thing is, you know, good on the hotel. Like, as long as you complain, like, what can you do for me? Because they weren't going to do anything initially, but I walked up to them. I was like, what can you do for us? And boom, 95 % off. dude i i love that and i'm sorry uh they dropped uh one of your parents um but did you take the vlog and start recording stuff i did so i asked like a lot of core questions around like what was the happiest moment of your life um what is what is like the one big decision you made in your life to like just a lot of questions like um and like what's just i a lot of it came from chat GPT.

23:50Um, but I just know that I'll come back to these. Like I was like 20 minutes of interviewing. It's like a podcast, right? And then like another five minutes interviewing again. And I know I'll come back to this in the future and ball my eyes out when I watch those videos again. So worth it. Dude. And I know this is a little, uh, creepy, but I'm going to end up doing this. You just gave me an idea. I'm going to start recording my parents and my in-laws. Um, And then what I'm going to do is upload it into AI. That's what I'm going to do too. And then create avatars. And then when they're gone, I want to still be able to have like actual hologram voice conversations with them and interact with them.