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Demetri Kofinas is a media entrepreneur and host of Hidden Forces, a podcast devoted to exploring the underlying forces driving the most powerful changes we see in the world.
His show covers a qide range of topics, including culture, philosophy, economics, technology, social science, and the hard sciences. Demetri has previously co-founded Guerilla Gaming Concepts, an interactive entertainment company focused the middleware of gaming. He has also reported on financial news and told stories to hundreds of thousands of people around the world. In addition to his show, Demetri consults blockchain and distributed ledger technology companies, helping them anticipate security vulnerabilities by building theoretical attack frameworks against token-based systems, and he consults hedge funds and venture capital firms on how to invest in and around these same emerging technologies. In this episode, Aaron and Demetri have a far reaching conversation about truth, technological progress, and geopolitics. Mentioned The Meaning of Human Existence by Edward O. Wilson Peter Zeihan Ian Bremmer Grant Williams Sign up for a Weekly Email that will Expand Your Mind. Demetri Kofinas’s Challenges; 1. Hold yourself to a higher standard. 2. Put space between your thoughts/emotions and actions. 3. Try not to judge people Connect with Demetri Kofinas
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Hidden Forces Website If you liked this interview, check out episode 463 with Jeff Booth where we discuss the deflationary nature of technology. Text Me What You Think of This Episode 412-278-7680
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Black Tech Nation Ventures is launching its first flagship venture fund in Pittsburgh, PA. The firm is founded by three managing partners, Kelauni Jasmyn, Sean Sebastian, and David Motley have come together to form an investment thesis focused on investing in black and other minority founders who have historically missed out on opportunities to raise venture capital.
As David outlines in this podcast, these represent an underutilized asset capable of creating outsized returns, not a charitable donation. David brings experience from three decades in corporate America, sitting on the boards of multiple public companies, investing tens of millions of dollars into real estate, and a track record of venture investments through the Blue Tree Venture Fund. David has also raised a $207 Special Purpose Acquisition Vehicle (SPAC) called Deep Lake Capital. David Motley has also co-founded 3 enterprises: The BlueTree Venture Fund, DLM-WCM (a real estate development company) and, MCAPS, LLC (a professional services company focused on Managed Services, Staff Augmentation, and Consulting). In this episode, David and Aaron also discuss how to craft a fulfilling career, how to raise money from large institutions, and why SPACs are taking off. Sign up for a Weekly Email that will Expand Your Mind. David Motley’s Challenge; Don’t undershoot. Set a goal and go after it. Connect with David Motley
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BTN.vc If you liked this interview, check out episode 265 with Kelauni Jasmyn about Black Tech Nation, episode 290 with Ned Renzi about Birchmree Ventures, or episode 405 with Matt Kesinger about his medical device startup. Text Me What You Think of This Episode 412-278-7680
Paul Martino is a venture capital investor and has raised 5 funds totaling over $350 million in capital. That money has been deployed into FanDuel, Grove, Ipsy, and SpotHero.
Before forming Bullpen, Paul was an active angel investor and personally invested in the first rounds of Zynga, TubeMogul, and uDemy. Prior to his investing career, Paul founded four companies including Ahpah Software (a computer security firm acquired by InterTrust) and Aggregate Knowledge (a big data advertising attribution company acquired in 2014 by Neustar). He is the holder of over a dozen core patents covering social networking and big data. In this episode, Paul and Aaron discuss the FanDuel success, his advice for startups going through tough times, and the different space that venture capital investors make their mark. Sign up for a Weekly Email that will Expand Your Mind. Paul Martino’s Challenge; Start every meeting on time Connect with Paul Martino
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Bullpen Capital Website paul@bullpencap.com If you liked this interview, check out episode 231 with Andy Rachleff where we discuss how to find non-consensus investing ideas that work. Text Me What You Think of This Episode 412-278-7680 
Aubrey Strobel is the Head of Comms for Lolli, a free browser extension that lets users earn free bitcoin when shopping online.
The platform’s mission is to help make cryptocurrency more accessible to the average shopper. Founded in 2018, Lolli has over 1,000 retail partners including Expedia, Nike, and Glossier. In this episode, Aubrey and Aaron discuss stacking sats, bringing women into crypto, and how Aubrey has modeled the Lolli brand and marketing off of Barstool Sports. Sign up for a Weekly Email that will Expand Your Mind. Aubrey Strobel’s Challenge; Call an elderly person in your life. Connect with Aubrey Strobel
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Lolli Website Lolli Youtube Lolli TikTok Lolli Twitter If you liked this interview, check out episode 426 with Flori Marquez where we discuss creating the ‘Chase Bank’ of crypto, BlockFi. Text Me What You Think of This Episode 412-278-7680 
Mike Green is the Chief Strategist at Logica Funds and has spent nearly 30 years studying markets.
These days, he calls on that experience and his proprietary research to educate the public, the Federal Reserve, the BIS, and the IMF about the shift from actively managed portfolios and investment funds to systematic passive investment strategies. Previously, Mike has served as the portfolio manager for Thiel Macro, an investment firm that manages the personal capital of Peter Thiel, founded Ice Farm Capital, a discretionary global macro hedge fund seeded by Soros Family Management, and founded and managed the New York office of Canyon Capital Advisors, a $23B multi-strategy hedge fund. In this conversation, Mike and Aaron discuss the popular narratives around index funds and Bitcoin, what those narratives get wrong, and how to effectively develop non-consensus views when investing. Sign up for a Weekly Email that will Expand Your Mind. Mike Green’s Challenge; Vote better. Connect with Mike Green
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Logica Funds Website If you liked this interview, check out episode 427 with Ben Hunt where we discuss investing and the Coronavirus, or episode 339 with Jim DeCicco where we discuss building his healthy coffee company. Text Me What You Think of This Episode 412-278-7680 More from Mike on Bitcoin and Index Funds Mike debates Anthony Pompliano Index Funds Flaw on Zeroes TV 
Mark Kovscek is a mathematician, inventor, and entrepreneur. His company, Conservation Labs, builds and sells a smart water meter that provides consumption insights, custom conservation recommendations, and leak detection.
At the cutting edge of Internet-of-Things and conservation, Mark uses his experience from a career building products and delivering solutions to address multi-billion dollar challenges. He has spent time using his mathematics skills in marketing analytics, finance, and supply chain management, but says this is the most compelling challenge he’s ever faced. In this episode, Mark and Aaron discuss the sound that pipes make, where the idea came from, and the potential for environmental and bottomline impact. Sign up for a Weekly Email that will Expand Your Mind. Mark Kovscek’s Challenges
Referenced Carlota Perez Connect with Mark Kovscek
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Conservation Labs Website If you liked this interview, check out episode 432 with Charlie Dolan where we discuss waste management, tech, and bootstrapping a software company. Text Me What You Think of This Episode 412-278-7680
Matt Harbaugh is a co-founder and Managing Director at Mountain State Capital. The 20 million dollar fund has invested in over 16 firms in the greater Appalachia region.
Prior to founding MSC, Matt served as CEO of a machine learning-based software company that was acquired by Facebook and was the Chief Investment Officer at Innovation Works, one of the most active seed funds in the United States. Across his career, Matt has invested in, managed, and advised more than 100 private companies over the past twenty years. He realized that he was interested in being involved in venture capital back in 1999 as an investment banker at PNC and has spent more than a decade and a half preparing himself to succeed. In this episode, Matt and Aaron discuss his career arc, the venture capital business model, and how startups in the region are still lacking enough funding options. Sign up for a Weekly Email that will Expand Your Mind. Matt Harbaugh’s Challenge; Build the skills and find an avenue to be an entrepreneur. Connect with Matt Harbaugh
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Mountain State Capital Website If you liked this interview, check out our conversation with Stephen Gurgovits about private equity in Western PA and our conversation with Glen Meakem about the DotCom bubble and his experience venture investing. Text Me What You Think of This Episode 412-278-7680 
Andrew Gazdecki is the solo founder of MicroAcquire, a marketplace for buying and selling small Software-as-a-Service companies.
He has previously started two companies, Bizness Apps and Altcoin.io, which were both acquired. MicroAcquire has reached $250,000 in annual revenue in just one year, by collecting fees from buyers in exchange for connecting with the entrepreneurs selling their business. Andrew is applying lessons that he’s learned from past successful companies to *hopefully* make this his best business yet. In the episode, Aaron and Andrew discuss playing entrepreneurship on “hard mode”, the mistakes Andrew has made in the past, and how MicroAcquire has grown to more than 30,000 subcscribers. Sign up for a Weekly Email that will Expand Your Mind. Andrew Gazdecki’s Challenge; Start journaling. Document your goals, memories, and experiences. Connect with Andrew Gazdecki
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MicroAcquire Website If you liked this interview, check out episode 394 with Ryan Kulp where we discuss buying and selling small businesses. Text Me What You Think of This Episode 412-278-7680
Chris Anderson is the founder and Chief Technical Officer of Innotescus. He leads a multi-functional team of machine learning scientists, software architects, and engineers that are innovating in the world of image annotation software.
Prior to founding Innotescus, Mr. Anderson was the Director of Software Engineering and IT for ChemImage. Here he oversaw the core innovative software products for hyperspectral data acquisition, analysis and visualization. These products range in application potential across forensics, defense, pharmaceutical and medical markets. He joined ChemImage in 1999 as intern developing a data-driven course on “Chemical Imaging”; assuming exponentially increased responsibilities over time as the core imaging technology of ChemImage required ever more dynamic and intuitive software. In this conversation, Aaron and Chris discuss spinning the company out of ChemImage, how Chris has taught himself the technology, and the constant curiosity needed to succeed. Sign up for a Weekly Email that will Expand Your Mind. Chris Anderson’s Challenge; Learn something new every day. Connect with Chris Anderson
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Innotescus.io If you liked this interview, check out episode 399 with Hayden Cardiff where we discuss spinning the company out of Pitt Ohio, challenges in the trucking industry, and raising capital. Text Me What You Think of This Episode 412-278-7680 
Jeff Booth led BuildDirect, a technology company he co-founded in 1999, for nearly two decades through the dot-com meltdown, the 2008 financial crisis, and many waves of technological disruption.
BuildDirect aimed to simplify the building industry and graduated from online catalog to logistics network to artificially intelligent platform. Last year, Jeff released his first book “The Price of Tomorrow – Why Deflation is Key to an Abundant Future” where he outlines the current state of our economy and what must happen to enable a brighter future. Jeff believes it essential for everyone to understand the deflationary nature of technological progress and the implications of this core truth. In this episode, Aaron and Jeff discuss this idea, the story of BuildDirect, and how anyone can use this period of upheaval as an opportunity. Sign up for a Weekly Email that will Expand Your Mind. Jeff Booth’s Challenge; Have empathy. Recognize that economic deflation and its symptoms are causing political polarization. Connect with Jeff Booth
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Website If you liked this interview, check out episode 440 with Brent Johnson where we discuss his Dollar Milkshake Theory and its implications for entrepreneurs. Text Me What You Think of This Episode 412-278-7680 
Stephen Tse, is founder and CEO of Harmony.one. Harmony is a blockchain-based open source development project with its own cryptocurrency.
Stephen has been obsessed with protocols and compilers since high school. He reverse-engineered ICQ and X11 protocols, coded in OCaml for more than 15 years, and graduated with a doctoral degree in security protocols and compiler verification from the University of Pennsylvania. Prior to founding Harmony, he has worked a researcher at Microsoft, a senior infrastructure engineer at Google, and sold his startup, Spotsetter, to Apple. In this conversation, Stephen and Aaron discuss how a blockchain project is like a traditional startup, the technical tradeoffs of blockchains, and how Stephen expects future projects to work together. Sign up for a Weekly Email that will Expand Your Mind. Stephen Tse’s Challenge; Set up a monthly newsletter to your close friends and family to keep them updated on recent events. Connect with Stephen Tse
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Harmony.one Website If you liked this interview, check out our library of past episodes with blockchain innovators, investors, and entreprenuers. Text Me What You Think of This Episode 412-278-7680
Joshua Lisec has been a ghostwriter for a decade. Public figures hire him to write compelling books, newsletters, and tweets in their voice, so that they can build their media platform.
He has helped to write best selling and critically acclaimed books and teaches the best practices publicly online. Joshua coaches his clients to offer higher-ticket services, courses, and products in conjunction with book sales to build a sustainable business. In this podcast, Joshua and Aaron discuss the business model behind most successful books, why traditional publishing deals are hard to get, and how ghostwriters are like actors. Sign up for a Weekly Email that will Expand Your Mind. Joshua Lisec’s Challenge; Use the ‘Jobs to be Done’ framework to evaluate your business offering and improve it. Connect with Joshua Lisec
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Joshua's Ghostwriting Website Youtube If you liked this interview, check out episode 226 with Ed Latimore where we discuss writing online and personal growth. Text Me What You Think of This Episode 412-278-7680 
Patrick Colletti is the founder of Net Health a $100M+ cloud-based provider of specialized software that serves specialized medical facilities like wound centers, senior care, and occupational therapy.
When Patrick began his tenure as company president in 2001, Net Health was experiencing significant financial turmoil resulting in laying off all but 2 employees. By utilizing a Refounder mindset as a framework for success, Patrick was able to spur rapid business growth and cultivate a flourishing corporate culture. He has spent two decades serving in multiple leader positions at Net Health, including the president, chief revenue officer, and chief operating officer. Now he wants to share what he has learned. In this episode, Patrick and Aaron discuss selling to private equity, building a company culture, and scaling the company. Sign up for a Weekly Email that will Expand Your Mind. Patrick Colletti’s Challenge; Regardless of your experience or seniority, recognize that you can be the change that you want to see in your organization. 
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Refounder.com NetHealth.com Book Referenced 4 Disciplines of Execution by Jim Huling Chris McChesney, and Sean Covey If you liked this interview, check out our interview with Dr. Chris Howard where we discuss leadership and the role of universities. Text Me What You Think of This Episode 412-278-7680
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Alex Berman is an actual serial entrepreneur. Before the age of 30, he has built a 7-figure agency, completed multiple movie projects, and built a 50,000 subscriber YouTube channel.
Most folks feel content to throw that title in their bio as a way to summarize some half-finished projects. Alex, on the other hand, builds systems in a focused and brutally efficient way. He has delegated leadership of his agency, Experiment 27, to someone else and has now set about acquiring more companies for his growing empire. Further, he has generated millions of dollars of B2B services revenue with his cold emailing skill. In this conversation, Alex and Aaron jump around discussing how Alex got his start, what makes a good cold email, and lay out the interrelated conglomerate Alex is building. Sign up for a Weekly Email that will Expand Your Mind. Alex Berman’s Challenge; Find someone that you look up to and reach out with a cold email. Connect with Alex Berman
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AlexBerman.com Email10k Website If you liked this interview, check out episode 394 with Ryan Kulp where we discuss avoiding competition, thinking creatively, and how he’s built a business empire through acquisitions. Also, Noah Kagan. Text Me What You Think of This Episode 412-278-7680 458 $100 Million Turnaround in the Oil and Gas Industry w/ Mark Marmo of Deep Well Services12/28/2020 
When Mark Marmo took over as the CEO of Deep Well Services, the company was losing $2 million per year on $9 million in revenue. Six years later, Deep Well Services was making $30 million in net income on $110 million in revenue.
Mark accomplished this by focusing on bringing an innovative & efficient service to the market, building a healthy company culture, and trusting his data analysts to make good decisions. In this conversation, Aaron and Mark discuss the standard he has implemented, the challenges of 2020, and the plans Mark is making for the future. Deep Well Services’ mission is to help make North America energy independent and his team is proud to be working toward that end. Their clients include Ascent Resources, CNX, Chevron, Shell, XTO Energy, Hess Oil, Eclipse Resources, Range Resources, Gastar, Arsenal, HG Energy, Gulfport, Rice Energy, and Southwestern Energy. Sign up for a Weekly Email that will Expand Your Mind. Mark Marmo’s Challenge; Find a mentor. Build your network. Get into a firm with a great culture. Connect with Mark Marmo
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Deep Well Services Website mmarmo@deepwellservices.com. If you liked this interview, check out episode 425 with Matt Wieszczyk where we discuss land rights, gas prices, and the Marcellus Shale formation. Text Me What You Think of This Episode 412-278-7680 
Frank Augustine is the founder of ILLEGAL apparel.
Frank and his brother created the brand, and associated company, in their parent's basement back in 2013. He has spent the last 7 years scaling production, opening a store on the South Side of Pittsburgh, and learning many lessons about entrepreneurship. He’s gotten the business off the ground via a relentless commitment to sales and a willingness to experiment with designs. Not bad for someone still in his early 20s. In this episode, Aaron and Frank discuss the way he has positioned the brand, how Frank sold shirts in the early days, and the hard lessons he’s had to learn along the way. Sign up for a Weekly Email that will Expand Your Mind. Frank Augustine’s Challenge; Be grateful and be positive. Check out Earl Nightingale and Positive Mental Attitude. Connect with Frank Augustine
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Website If you liked this interview, check out episode 451 with Will Dzombak where we discuss managing Wiz, marketing in Hip Hop, and launching a cloud kitchens restaurant. Text Me What You Think of This Episode 412-278-7680
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Pete DeComo is the chairman and CEO of ALung Technologies. ALung is developing an artificial lung for patients suffering from Acute Respiratory Failure and has raised over $100 million to bring their product to market.
ALung’s Hemolung Respiratory Assist System is a dialysis-like alternative or supplement to mechanical ventilation that works by removing carbon dioxide directly from the blood. The medical device, which has been approved for use in 35 countries outside the U.S., has proven relevant during the 2020 Pandemic. Prior to running ALung, Pete was the founder and CEO of Renal Solutions. Renal Solutions developed of similar product focused on kidney dialysis and was sold to Fresenius in 2007 for $200 million. In this conversation, Pete discusses the arduous process of getting a medical device approved by regulators, how he has raised over $140 million for his companies, and his advice for all entrepreneurs. Sign up for a Weekly Email that will Expand Your Mind. Peter DeComo’s Challenge; Don't be afraid to take some risk. Connect with Peter DeComo
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ALung Website pdecomo@alung.com If you liked this interview, check out episode 405 with Matt Kesinger where we discuss the development of his life saving medical device and episode 413 with Dr. Gordon Vanscoy where we discuss his startup which serves as a pharmacy for treating rare diseases. Text Me What You Think of This Episode 412-278-7680
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Piper Creative makes creating podcasts, vlogs, and videos easy. How? Click here and Learn more. We work with Fortune 500s, medium-sized companies, and entrepreneurs. Follow Piper as we grow YouTube Subscribe on iTunes | Stitcher | Overcast | Spotify Watson: Well, Pete, thanks for coming on the podcast. I'm really excited to be talking with you. DeComo: Exciting to be here as well. Aaron, thanks for the invitation before to the discussion. Watson: So I am, self-admittedly not a biotech expert, a healthcare minded character. It is something where it seems like, you know, the whole world is half, has had to become familiar with, you know, phase one phase, two phase three trials and FDA approvals and all this other stuff because of 2020. But to start things off, maybe we can build up from a relatively complex, but hopefully simple explanation. Your company, ALung, it says it focuses on respiratory dialysis through extra corporeal, low flow, CO2 removal. What the heck does that mean? DeComo: Yeah, that's, that's pretty good for not knowing the vocabulary. You did well. Extra corporeal means we take blood out of the body and we treat it in some manner and we put it back in a, of course, respiratory failure means that an individual, in our case, a patient, has something afflicting their lungs and it can be a chronic disease like emphysema, chronic bronchitis, which progressively gets worse as time goes on for that particular patient. And that can lead to what's referred to as chronic respiratory failure. And then there's acute respiratory failure as well, basically meaning that an individual suffer some trauma to the lungs, and prior to that trauma had really nothing wrong with their lungs or a very little long wrong with their lungs. And so that trauma, for example, could come from, injuries due to smoke inhalation, aspiration of gastric contents, you know, patients that frankly overdose and then get sick and then vomit, and then inhale that vomitus into their lungs. It's acidic, as you might imagine, coming from the stomach and that burns the lungs. It could be blunt force trauma to the chest. For example, in a car accident, when the steering wheel hits the chest, it could be due to a war injury or something like that, where you have what's called an acute injury to the lungs and that's called acute respiratory failure. Of course, what we've created at a long is a technology, which is an artificial lung. Actually the name ALung stands for artificial lung and we have this artificial lung that sits outside the body. It's was conceived at the McGowan Institute for regenerative medicine at the University of Pittsburgh. ALung spun out of the university back in 1998 and we created this technology, from that original conception. And, it's now treating patients all over the world. It is the only device that's been conceived, developed, manufactured from the ground up to this particular therapy. It's meant to be minimally invasive, very safe, and very effective in terms of, sort of supplementing the native lung by sitting outside of the native lung, at the bedside, if you will, and doing up to 50% of the work of the native lung to remove carbon dioxide and to provide a little bit of oxygenation. So that's what extra corporeal means. And that's what we do at ALung. Watson: And so I think that people can make a pretty easy jump to the relevance for, you know, some of the symptoms that people have heard about associated with COVID-19 in the present, but you've been at this for 11 years and I'd hate to ever call something like a pandemic, an opportunity. But there is a degree to which what seems like, you know, someone kind of seizing a moment. Is often years in the making. So, specifically within the context of ALung, can you talk about the state where it was back in 2009 when you joined and what the last decade or so has looked like in terms of the different approvals and research and development that's gone into it. DeComo: Yeah, that's a good question. We often joke at ALung that we're the oldest startup in the region being 22 years old now and spinning out of the University of Pittsburgh. You know, I've been an entrepreneur for a while and my prior company was also in the extra corporeal space, but it was in the kidney dialysis space. And we can come back to that later, but that resulted in a successful exit. And, and then I got recruited to come over to ALung by some of my previous investors, because of my extra corporeal experience. And in addition to that, it's just coincidental, I started my early, early career as a young respiratory therapist at the University of Pittsburgh medical center at Presbyterian university hospital, where I worked in critical care medicine. And I was on the school of medicine faculty in critical care, teaching respiratory therapists, nurses, and physicians, how to use respiratory devices to treat respiratory failure. I certainly left that field for most of my career and then circled back to ALung and had to sort of dust off all the cobwebs of my old textbook and revitalize the brain in terms of my respiratory knowledge. But, I love the field it's done well for me. And it's brought me back to ALung, but, it's long history, has been a challenging one. It's been a difficult one and, You know, the story will not sound strange to many entrepreneurs who have gone through the same thing. Medical device is not a popular area for investors to invest in, especially what we call institutional investors like venture capital firms. They've moved so much later stage that they want you to be FDA approved. They want you to be in the market. They want you to demonstrate some recurring growth and an attraction in terms of selling your device. Well, ALung, because we touch blood and because we're the first of our kind, the FDA classifies us as a class three device. What that really means is in the eyes of the FDA it's the most high risk category you can be in for a respiratory or for a medical device. And that throws you into having to do what's referred to as a PMA trial, a pre-market approval trial, which is typically a very large trial. So pre COVID we were involved in this PMA trial, very large trial here in the United States. We had 40 clinical trial sites all over the country, attempting to enroll patients for us into this trial. And, we were doing quite well. And then COVID came along and this was back in the February, March, April timeframe of 2020. And basically hospitals were flooded with COVID 19 patients. And as you know, From the news, these patients were admitted to intensive care units. They were critically ill. They were put on ventilators and their mortality rate was as high as 80, 90% at the beginning of this pandemic. And the ventilator was causing a lot of harm to the lungs of these patients, as you, as you heard in the news as well. Well, two things happened first of all, our clinical trial came to a screeching halt. Because clinical research was deemed non-essential in these hospitals, clinical trial personnel were sent home and we were stuck in the water. We were basically treading water. We couldn't go forward. And that stalled our efforts with the FDA to become FDA approved in the United States and be able to bring our technology to market and actually sell it. It could have been the demise of the company to be very honest. But as you pointed out, sometimes these problems create opportunities, and I've been using a quote most recently as a result of my discussion around this topic. And that's a quote by Alexander Graham bell, who said that, you know, when one door closes, another door opens, but oftentimes we spend so much time focused on the door that's closed and we miss the opportunity by the door that was opened. And so COVID 19 actually opened a couple of doors for us. First of all, I went back to the FDA and said look, our trial is dead in the water, but we can help with COVID-19. Because we had just concluded a trial in the United Kingdom, on a respiratory failure for work refer, what is referred to is acute respiratory distress syndrome. ARDSM as it's called. And COVID-19 manifests itself in ARDS or acute respiratory distress syndrome. That trial was 412 patients and 204 of those patients were enrolled in our technology. So the FDA said, well, why don't you submit an application for emergency use authorization for COVID-19 the same that the vaccines are going through right now. And three weeks later, the FDA had approved, approved us for emergency use authorization in COVID 19. Since that time now keeping in mind, we're a small company and we're only producing enough product to, you know, utilize in our clinical trials. We're not a large organization that can produce thousands of these machines and thousands of the artificial lungs that go on these machines. But we had 40 clinical trial sites that were already rubbed up and running. They knew our technology, they were treating COVID 19 patients. So they were our first priority. And many of those clinical trial sites who had put the clinical trial aside, were now treating COVID 19 patients. In addition to that, we've brought on board about 10 new hospitals that were not our clinical trial side hospitals and were treating patients with COVID-19 in those hospitals, as well. As I said, we're small, but we've treated at now at this point 58, COVID 19 patients worldwide. We've also treated nine in the United Kingdom and in Ireland because we had a clinical trial going there and some of the hospitals there wanted to treat COVID 19 patients. So the door that closed was our clinical trial door. The door that opened was the ability to treat COVID 19. That's brought us a lot of notoriety and visibility in our space, to be honest about it. I also went back to the FDA and said, look, we can't complete our trial. It's impossible under these circumstances, no clinical trial has been completed at this point in time. We needed an alternative pathway to FDA approval and the FDA consented to an accelerated pathway for our device called a Denovo 5 10 K, basically, meaning Denovo, meaning a new device with no predicate device to claim substantial equivalency to a Denovo 5 10 K does not require a clinical trial. And we're in the process of that application right now. And in fact, we could be approved in the United States for commercial sale in mid 2021 if all continues to go well with the FDA and their review of our application. That cut about two years of clinical trial work off of our timeline because having to complete that clinical trial would've meant we wouldn't be in the marketplace until mid 2023. We will continue that trial when the pandemic slows down a bit and our clinical trial sites can continue to screen and enroll patients, but for now we're pursuing the Denovo 5 10 K. And frankly, that is really a huge door that's opened for us relative to getting to market sooner rather than later. Watson: So part of the story that you've just illustrated there is, and you almost said it like the way you would knock on your neighbor's door for like a cup of milk or something, but you're talking about going to one of the largest government agencies, right? That has at least to the outsider's perspective or just in general, regulatory bodies have this reputation for being bureaucratic for being a Byzantine, for being difficult to understand. And even some of the nomenclature that you use there. But it wasn't the tonality in the way that you said it you've made it seem like passe, like it was something that was highly attainable. So can you maybe piece that apart from you a little bit more? I'm sure that to some degree, it's you having been through the ringer before with other products to kind of know the lay of the land, but maybe there's relationships, maybe it's the extenuating circumstances of 2020. Help me make sense of that. DeComo: Yeah well, that's a good question, Aaron, and you're very astute in pointing out some of the things that lead to success with the FDA. In my prior company, I was involved with the FDA, clearly a different team, and then prior to that, I was also involved with the FDA because I was in the pharmaceutical drug distribution business, and that required interaction with the FDA as well. And you can tell by looking at me, I'm not a young man any longer out, although I joke around a bit about, this is what entrepreneurship does to you at the age of 30, you start to look like this, but, the reality of the situation is that, you know, it's like any other relationship, whether you're calling on a customer when you're, whether you're dealing with a another company and you're trying to do a business venture together, it's all about establishing trust and credibility and establishing a relationship that allows you to have open Frank diplomatic dialogue about the issues in front of you. And what I've learned in that process is that you've got to make it a win-win for whatever individual you're talking to or whatever organization you're talking to. The win-win in this particular situation is we have been involved with this FDA review chain for over 10 years now, it's been a very stable team at the FDA. And while they are very bureaucratic, our device is known as, or has been designated as a breakthrough device by the FDA, meaning it's novel in terms of what it does. And there are no alternatives to what it does in the marketplace. And then you get this novel breakthrough nomenclature attached to you, and long with that comes a team from the FDA who gets assigned to you because they want to get this novel technology to market as soon as possible. Now, as soon as possible, in the eyes of the FDA is not a nomenclature in my language. It's not equivalent to getting it to market as soon as possible my eyes, but for the FDA, they've been very collaborative, very compromising, in terms of working with us on getting this technology to market. And the win win is we get the technology to the market sooner. And the win for them is they've recognized a novel technology that can be beneficial to patients when there's nothing else out there that can be, and they want it to get to market as quickly as possible. And in the case of COVID-19, they want anything out there in the market that can have the potential of being beneficial. To these patients. And certainly having worked with the FDA on this particular project for the last 10 years, they recognize the potential benefit of our device in treating not only COVID-19, but any patient with respiratory failure where you've gotta be able to bypass the lungs if you will, that are malfunctioning and have gas exchange take place in the blood vessel itself, versus having to go through the lungs to get to the blood vessel. And so that was a win-win, but yes, to your point, you become comfortable having these discussions with organizations like the FDA, when you go through it over numerous years, number one, and number two, when you really get down to the heart of the matter. It's really my team sitting across the table with the FDA team and we're all human beings and the common good is trying to develop and get technologies to market that can be beneficial to patients. And certainly you've got to demonstrate safety and you've got to demonstrate efficacy to the FDA, but along that pathway of doing that and doing it right, you gain credibility with the FDA. And even though you've got to cross the T's and dot the I's, when you do it in a manner that the FDA understands that you're trying to do it and do it right, you gain credibility with them and you establish a little bit of trust, and you can move this process through the FDA a little faster than you normally would. Watson: So at a, I guess this is a question you can answer on two different levels at the. Pete Tacoma level. And at the ALung level, which is sustaining, you talked about it as being 22 years in the making the technology, but even the 11 years, since you started informed by your past experiences, bringing medical devices to market, how do you manage that process over such a time horizon? What I mean by that is, in terms of your own patients, because at some point, you know, when they were these investors that brought you in were pitching you on the idea, like you did your own snooping around, like, is this legit or is this baloney? And so you've reached the light bulb of like, this thing is real versus I need all these other people to realize that, and then simultaneously, and you can correct me if these numbers are wrong, you raised about $80 million in capital for this entity has, has, has been brought in and, you know, with big investors. And they also have their like, itchiness to get a return because that's the venture capital mindset. Like how do you, you know, satiate them and stay, you know, relatively like low expense as you're proceeding? Just take me through the strategy of that, because that's not a position, many people get to be in. DeComo: Yeah. Well, I'm not sure, you know, certainly there's strategy behind it all. There's strategy related to everything we do. And then we strategize as a team at ALung every day and every week. And you know, one of the unique characteristics of startups, especially life sciences startups, is that when you're in the business of innovation, you don't know what you don't know. And a wise old man told me one time, you know, if you don't know what you don't know, but you don't know that you're in real trouble. And in the process of innovation, we oftentimes don't know what we don't know. You know, it's a process of creativity, and trial and error. And sometimes you're going down a path and you hit a roadblock and you've got to make a determination of that. Make a left, make a right or turn around and go back or whatever the case may be. And one of the things I've learned about entrepreneurship as sometimes a decision is better than no decision. Even if you don't know if that decision is right or not. So quit procrastinating, make a decision, even if it's the wrong decision, at least you've learned something from that and you can move forward and ultimately get to the right decision. The other thing I tell young entrepreneurs when I lecture at, at Pitt or CMU, is that to me, the one trait that is most important for entrepreneurs in order to lead to success is perseverance. And perseverance means that, in my mind, that you never know you give up, you keep trying, but the, the ultimate goal, can't be futile. In other words, you've got to have clear sight to success, and have a recognition that your device, your technology, whatever you're creating, has a place in the world and can do something. You know, people oftentimes use a perseverance and persistence interchangably. And to me there's a clear difference between perseverance and persistence. Persistence sometimes sort of indicates stubbornness when it's futile. In other words, you don't have a clear vision of where your technology fits in the world. You don't know whether it works or can work. You don't know whether there's a market for it, et cetera, et cetera, but you continue to persist when the ultimate goal is oftentimes futile. And entrepreneurs need to recognize, when an endeavor is gonna end in futility. Clearly, ALung is not a futile effort, in terms of the technology and the place it has in treating respiratory failure. It could lead to futility if you can't continue to raise money. You brought up 80 million. It's actually, since I've been with the company, we brought in North of 100 million dollars in this company. And thank God our investors in the region are supportive because they also understand the value of this technology in terms of the treatment of respiratory failure, including COVID 19. And by the way, COVID 19 will not be the last respiratory virus we ever deal with. And I've been telling that story for 10 years as well. And not until COVID 19 comes along, do people realize, Oh my God, Pete knew what the hell he was talking about from the beginning. And so, you know, it stimulated interest in the company, but you've got to persevere. You can never, ever, you know, let the rejection that you receive as an entrepreneur deter you from the mission that you have in front of you. And that's completing whatever the project is you happen to be working on. The other thing is, and it didn't come easily to me and I'm sure it doesn't come easy to most entrepreneurs, but you have to be open and Frank and conversive with your board of directors, your shareholders, those individuals that are taking money out of their pocket to fund you. And you have to have credibility with those investors. So I've sort of practiced being an open book in my 30 year career as an entrepreneur, if you have a question as a shareholder or you have a question and as a potential shareholder, Do not hesitate to call me, do not hesitate to email me. I am always available to you. And there's no dumb question. And look, it's frustrating for an investor, especially our early investors that have been in this company, writing checks for 22 years, to not have an exit at this point in time. And oftentimes certain investors will look at that experience of taking longer and costing more and attribute blame to the management team. And my comeback to all of that, and my sort of response to that is that what you really need to look at in your management team and your CEO who who's formed that management team is what challenges have they been presented with? And have they mitigated risk worked or problem solved and worked around those challenges? Because it will always cost more and take longer than what you originally believe it will be. And if I'm not mitigating risk, and if I'm not problem solving and getting around those challenges with my team, then you have something to pick on. Then you have something to criticize. Then you may need to consider getting rid of your CEO and some of your management team, butALung is a company that historically has been presented with so many regulatory challenges, so many funding challenges, so many technology challenges that if you're not a person who can persevere and work around those things, you'll have a hard time being successful as an entrepreneur. Watson: And I would also imagine, you know, the $100 million raised for this, and the fact that you were recruited to join this company that was already in existence, and these investors knew that, or had the belief that you were someone who could execute speaks to the fact that some people were listening to you when you were talking 10 years ago, but also the track record that you had already built led to this opportunity. So preceeding ALung, you'd helped build renal solutions for eight years, you raised $40 million there, a $200 million exit. So can you talk a little bit about what has been similar versus what's been different between those two experiences and how that kind of laid the groundwork for the position that you're now in? DeComo: Sure. You know, when I started renal solutions, it was year 2000. And then you're probably too young to remember this, but some of your listeners may, but we were just coming out of the tech bubble burst thing at that point in time. And it caused a significant shift in how venture capital looked at investments, investments in technology, be it information technology or medical technology. Very, very difficult time to raise money. There was a great contraction by venture capital in terms of raising money. And so I had to raise angel money at that point in time as well, but much less angel money that I've had the raise at ALung, and venture capital was quite different back in the early 2000s than it is now. Venture capital to me means, it's a firm, an institution that's willing to take risk and invest early venture capital really doesn't mean that any longer. So to give you an example, my series, a round of investing that renal solutions was a syndicate of eight venture capital firms at $21 million in the company in a round based on a business plan without even a prototype of the technology at that point in time. You contrast that with ALung today, you can't raise venture capital money in an A round a B round or a C round. To be Frank about it, venture capital has become more growth, equity investment. In other words, they want to invest in you when your technology is far beyond proof of concept that you have FDA approval and you may have even have a revenue stream at that point in time. And so life has changed when I joined ALung in 2009. You couldn't raise venture capital. Our entire A round was angel investors, high net worth individuals in the Pittsburgh region. And of the $100 million plus that I've helped to raise over the last 10 years, probably 65 to 70% of that is angel money, high net worth individuals, not venture capital. Although we've had some smaller regional venture capital firms from the Western Pennsylvania area, Eastern Ohio area that have invested in us, but for the most part, it's been angel money. And, you know, most recently we've gotten some intention from strategic investors as well. So, you know, technologically, I would tell you both being extra corporeal devices. The renal solutions device was much more complicated than the ALung device. And we got both CE Mark approval in Europe, and we also got FDA approval in the United States. And we were pre-revenue when a large strategic came in and bought us for $200 million. And, that will never happen today. We're much further along in terms of human use and validating safety and efficacy with the ALung device than we were with the renal solutions device, and yet we cannot attract strategic buyers primarily because we're not FDA approved yet, and we're not in the market yet. We'll gain a lot more interest once we are FDA approved and in the market. And that's why we struggle so hard to get there. But, you know, back in the renal solutions days, You could find a strategic buyer on a pre-revenue basis on a, on a pre FDA basis, and in today's world, that's highly unlikely for that to happen. And things happen much quicker in the renal solutions days. From the time I raised my A round, which I'll never forget, entrepreneurs don't forget these things, I raised my round and we closed on November 27th , 2002 and the company was sold and the deal was closed on November 27th, 2007, five years to the day after we raised. And here at ALung we're 22 years old, and we still have not been acquired. And we have a much larger market, a much more developed technology than we did in those days, but it's the way the world works. And we've got to deal with it. And that's again, why perseverance is so important as an entrepreneur, because who would have thought 22 years later, a valuable technology like this would still be struggling to get FDA approval and be acquired by a larger strategic. Watson: That's wild, and it really says a lot about you and your entire team's composition to be able to continue to persevere through all that. You've been so generous with your time. I want to get to our last couple of questions, but before we do that, you seem perfectly positioned to maybe create some more clarity around the larger, I don't know if we want to call it healthcare or biotech startup space, generally, not just because of the past companies that you've helped build and run and sell, but also your role with Pittsburgh life sciences greenhouse, which incubates other similar types of startups. And I'm going to basically pause it. My hypothesis or my understanding from my vantage point. And then you can poke holes in it or tell me where I'm misaligned, but there's a lot of experimentation kind of in small labs or like universities where this stuff gets maybe funded, or kind of first developed in like an academic setting, it gets spun out, and you know, whether this is through university technology transfer or these other startups, or the professor that found it deciding, Hey, I want to try to commercialize this thing myself. But very, very few get through the FDA process and very few get the funding that they need to even see it through that entire arc. But once they go to market, it is very likely that the end result will be something more like an acquisition by one of the large players in the space, perhaps as opposed to an IPO, because there's this real gap between like what even a relatively well capitalized startup can do from actual production distribution relationships, with all the different insurers and every nuance and nook and cranny of all these different markets, but simultaneously those large strategics. Those large kind of players in this space, they can't necessarily take on the risk of trying to start something from its infancy through that process. So they leave those startups to kind of be the, the wild West, the Darwinistic evolution, like whatever comes up from the primordial ooze. And then, you know, they compete with one another to pick off the most promising startups once they've made it through that kind of survival alley, so to speak. DeComo: Yeah, yeah. Again, a very astute observation, Aaron. That gap that you talk about, we call the Valley of death and you know, that Valley of death can be just that for so many startups that, you know, spin out from the bench, whether it be a university or an R and D house somewhere. You know, one of the issues that we deal with here in the Pittsburgh region that has been present for decades, going all the way back to the late nineties and early two thousands is the lack of capital. And that creates that Valley of death. We don't have a strong venture capital community here in the Pittsburgh area. The support infrastructure is extremely positive. I mean, you've got the University of Pittsburgh, Carnegie Mellon, Duquesne, these organizations, are in the creative process, in the innovation process. And they want to get these technologies patented, licensed, and spawn out, they've got executives and residents that support young entrepreneurs. Many of these executives and residents become entrepreneurs, spin these companies out and they take them out. Yeah, the one of the other strong attributes of the Pittsburgh region is there's early stage money. You can find grant money from the state. You can find early investment from organizations like Pittsburgh life sciences greenhouse innovations works and others, but it's beyond that where the Valley of death comes in because you can find this early stage money, but oftentimes that early stage money isn't enough to get you through the evolutionary process, and to a point where that strategic is interested in investing in you or that venture capital firm is interested in investing in you. And that's where a stronger base of venture capital in the region would be helpful, and there are some new venture capital firms that have been formed. They're smaller in nature, but they're there. The Pittsburgh life sciences greenhouse has a venture fund. Innovation works as a venture fund. Blue tree angels has a venture fund, but we need more and we need larger venture firms. Without them what we're reliant on in Pittsburgh is having to attract money from the East coast or the West coast. And that's very challenging to do. Some do it, but most don't. And, you know, venture capital firms like to be close to home, they like to be close to the companies they're involved with. It takes a very differentiated technology with a very large market to attract big venture capital into Pittsburgh and other metropolitan areas. And that's where the Valley of death comes in. So there, there are good technologies to great technologies that are dying on the vine. Because they're stuck in this Valley of death and they can't raise more money. And then the other problem, Aaron, is that because strategics have moved so far later stage in acquiring a company, they may invest sooner, but they've moved so far later stage in a corner or your company. They don't want to take on the burn, the cash burn that the company has, especially if they're involved in large clinical trials. And if they're a publicly traded strategic, they don't want that to affect their earnings per share. So they would rather invest in you, help you develop the technology, build the infrastructure, get you to market, and then acquire you later on when you're revenue producing. And again, that sort of contributes to the Valley of death because you gotta be able to get to the point where that strategic has some interest in you and is willing to invest in you. To bring that product into their portfolio of products, which could be beneficial to them in terms of enhancing their revenue in future years. And you've got to find the right company as well. You've got to find a company where your product is synergistic to the product portfolio that they already have. And that's sometimes not easy to do. The good thing for us, as life sciences companies and medical device companies in general. Is that a lot of these strategics do not have strong R and D pipelines. So they're relying on companies like ALung to be the innovators in the world, and they're willing to help you get to a certain point and then acquire you at the right time. The R and D pipelines, even though these companies are typically strong in terms of the cash they have on the balance sheet, for whatever reasons, not many of these companies are investing in R and D and innovation. And one of the things about entrepreneurial based companies like ALung is we typically can move a lot faster. We have less bureaucracy, the development process happens faster. The regulatory process seems to happen faster. And so a lot of these larger strategics, like to keep the small company separate and distinct and allow them to go through their process, and get to market much faster than they can do it internally. Watson: Makes sense. I'm glad that people like you are doing this type of work, and it does seem like, you know, if it is that COVID breaks the dam that hopefully changes some of the speed or the attention, or the appetite for capital will be allocated these spaces, I guess that's, you know, maybe the silver lining or the opportunity that comes from a problem like this, that gives me some hope. Maybe that's just youthful naivete, and I'll get that beaten out of me in time. But Pete, I do appreciate you coming on the show and I do want to ask our standard last two questions. Anything else though, that you were hoping to share that I didn't give you a chance to? DeComo: Yeah. You know, I like to always point out to entrepreneurs, not only should you persevere, but also always remember that your, your best teacher is your last mistake. Don't be afraid to make mistakes. That's what entrepreneurship is all about. If it were easy, everybody would be doing it. If they were easy to create an artificial lung, there'd be thousands of companies out there doing it. You know, don't be afraid to make a mistake. It will help you move through the process much quicker. Watson: Amen. Well, for folks that want to keep up to date with ALung, with you, Pete, where can we point them in the digital world to do so? DeComo: Well, you can certainly go to our website, which is www.alung.com. And my email is first initial P for Pete. Last name Decoma D E C O M PDeComo@Alung.com. Watson: Awesome. We're going to link that in the show notes. You can find it for this and every episode of the show in the podcast app, you're probably listening to this right now, or at goingdeepwithaaron.com/podcast. In those show notes, we have a bunch of other characters around the Pittsburgh medical scenes, so we've spoken with Matt Kessinger from Forrest devices. We've spoken with Dr. Gordon Vanscoy from Panther Rare pharmaceuticals. Those episodes will pair nicely with the conversation we just had with Pete. But before I let you go, Pete, I want to give you the mic one final time to issue an actionable personal challenge for the audience. DeComo: Don't be afraid to take some risk. I got to be an entrepreneur in the circuitous way. But don't be afraid to take some risk and, and start your entrepreneurial ship career much earlier than I did. And, for me, I worked in a lot of big companies before I decided to be an entrepreneur, and before the term entrepreneurship was popular, but get out there and do it. If you've got an interest in a passion in creating something, go do it. And if I can help you in any way, don't feel hesitant to contact me. Watson: Beautiful. And I think that your career epitomizes that same idea of the stair-step approach, where you kind of build a little bit of a competency, you're able to stomach a little more risk, and then you kind of understand how to hit that next level. Once you've gotten that under your feet, but you'll never get to the third step without hitting the first in the exactly. Awesome. Well, Pete, thank you so much for coming on the podcast. I learned a ton from speaking with you. I really appreciate you sharing some time. DeComo: Well thank you, man. It was a pleasure. Take care and stay safe out there. Watson: We just went deep with Pete DeComo, hope everyone out there has a fantastic day. 
Michael Mayer is the co-founder and CEO of Bottomless, a company that uses wifi connected weight sensors to do automatic home restocking. Their first, and only, offering is fresh roasted coffee.
Every customer pays an annual fee (like an Amazon Prime membership) and receives a coffee scale. The scale measures the amount of coffee remaining in your bag and automatically sends you the next one when you’re running low. Over time, Bottomless learns your coffee preferences and sends you personalized selections. This is not a paid endorsement. Bottomless was founded by Seattle-based by Mayer and his wife Liana Herrera in 2016. In 2018, they were admitted into the Y Combinator accelerator program. In this episode, Aaron and Michael discuss the constraints Bottomless has had to overcome, the future products that Bottomless might sell, and what he learned at Y Combinator. Sign up for a Weekly Email that will Expand Your Mind. Michael Mayer’s Challenge; Curate your inputs. Unfollow anything in your information diet that is not a building block for good thought. Connect with Michael Mayer
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Get a Free Bag from Bottomless If you liked this interview, check out this interview with Dr. Timothy Wong where we discuss reducing the cost of visiting a doctor and fundamentally rethinking medical care. Text Me What You Think of This Episode 412-278-7680 
Teresa Whalen is the CEO of CytoAgents, a startup focused on the development of solutions to combat persistent and potentially deadly strains of Influenza, COVID19, and other viruses.
Teresa’s career spans 20 years in the healthcare industry, including health technology executive, life sciences investor, and clinical pharmacist. She has brought multiple successful life-changing healthcare products to market. She currently leads a team of clinical drug development experts and scientific advisory board members aiming to revolutionize treatment for respiratory illnesses and viral epidemics. In this interview, Teresa and Aaron discuss the long process of FDA approval, how Teresa came to lead the company, and the dangers of a cytokine storm. Sign up for a Weekly Email that will Expand Your Mind. Teresa Whalen’s Challenge; Surround yourself with people who are smarter than you. Connect with Teresa Whalen
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CytoAgents Website If you liked this interview, check out episode 338 with Courtney Williamson where we discuss developing a medical device or episode 413 with Dr. Gordon Vanscoy where we discuss his pharmacy that collects drugs for treating rare diseases. Text Me What You Think of This Episode 412-278-7680 
Brock Blake is the founder and CEO of Lendio, a marketplace for small business loans. Lendio offers borrowers access to loan options from more lenders than any other marketplace in the industry.
Brock has been building his company for nearly a decade and raised more than $100 million in venture capital. 2020 has stretched his team and tech to new heights, as they’ve facilitated over 100,000 PPP loan approvals and the issue of $8 Billion in funds. In this conversation, Aaron and Blake discuss why Brock pivoted away from his first company, the challenges and constraints of scaling, and the values he’s instilled in his company culture. Sign up for a Weekly Email that will Expand Your Mind. Brock Blake’s Challenge; Identify someone important in your life and go have an experience with them. Connect with Brock Blake
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Lendio Website If you liked this interview, check out episode 434 with Henry Schuck where we discuss his recent dollar IPO and becoming a billionaire. Text Me What You Think of This Episode 412-278-7680
Casey Gauss is the VP of Amazon SEO at Thrasio. Thrasio is one of the most interesting companies I’ve come across in years.
Thrasio was founded in 2018. It has gone on to raise $520.5 million and be valued at over $1 billion. The companies has acquired more than 70 businesses that sell products on Amazon. By bundling the companies together, they aim to build the CPG powerhouse (think Unilever or Procter & Gamble) of the digital age. Casey leads the team’s efforts in optimizing Thrasio’s 6,000+ product pages on Amazon to ensure that they rank high. This translates into lots of sales. Thrasio is profitable ??? In this conversation, Casey and Aaron discuss the Thrasio business model, how the acquire companies in less than 45 days, and the philosophy behind selling online. Sign up for a Weekly Email that will Expand Your Mind. Casey Gauss’s Challenge; Listen to audio books and increase the speed that you read them. Incognito: The Secret Lives of the Brain by David Eagleman On Intelligence by Jeff Hawkins Connect with Casey Gauss
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Thrasio Website If you liked this interview, check out episode 413 with Dr. Gordon Vanscoy where we discuss building a Billion Dollar company selling rare pharmaceuticals, and episode 414 with Glen Meakem where we discuss FreeMarkets being a unicorn during the DotCom boom. Text Me What You Think of This Episode 412-278-7680 451 Wiz Khalifa’s Manager Will Dzombak talks Hotbox by Wiz, Artist Management, and Taylor Gang11/2/2020 
Will Dzombak is a Pittsburgh native and one of the entertainment industry’s top music managers. He’s helped guide the career of Grammy-nominated rapper Wiz Khalifa and cofounded Taylor Gang Entertainment.
As a student at Penn State, Will co-founded an events company, where he booked Wiz Khalifa will he was still just a rising Pittsburgh rapper. After the first show’s turnout exceeded expectations, Khalifa sought out Dzombak’s help with booking more shows for him. Within a few years, Dzombak has helped Khalifa create one of the most successful and consistent summer tours for the last 7 years. He’s also been one of the executive producers on Khalifa’s last three full-length releases. Together, Wiz and Will have built Taylor Gang Entertainment, invested in the e-sports team Pittsburgh Knights, and much more. In this conversation, Aaron and Will discuss the early days of Wiz’s career, their new restaurant Hotbox by Wiz, and the marketing strategies that they’ve been early to embrace. Sign up for a Weekly Email that will Expand Your Mind. Will Dzombak’s Challenge; Start a second hustle. 
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WillDzombak.com Taylor Gang Website If you liked this interview, check out episode 358 with Jamilka Borges where we discuss the restaurant business, and episode 450 with Brian Scott where we discuss better planting soil. Text Me What You Think of This Episode 412-278-7680
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Watson: Alright. Well, thanks for coming in here and being on the podcast, man.
Dzombak: Of course. Thanks for having me. Watson: So I reached out to you because I saw the news. I don't know if it was complex or wherever the headline was, that Wiz is launching a ghost kitchen, Hotbox by Wiz. And Hannah and I have been going crazy for like, just the general idea of ghost kitchens for a while now. It's clever, you know, not having the physical area where people actually come in, but it's all delivery. Tell me about the idea, like when the start of this happened and how long it took to Germany before you guys launched at the beginning of October. Dzombak: So this idea came to us through a friend of mine, and it came up in May of this year, when everything was going on, and we worked on it all the way up through the launch. So, it's just a very interesting idea. We always- Wiz loves being in tech. I love being in tech things and being at the forefront of stuff. And when we were pitched the idea, we had heard about it and done a lot of research on it and how it all works financially. And this deal really made sense and was in a great place, better than a lot of the other ones that we had been talking about. So, our partners Ordermark and NextBite really, really knocked it out of the park. Watson: Yeah. And the brilliance of it to me was not only is it very like tech forward and very like where things are going, as opposed to where things are, particularly in a pandemic, when not everyone's necessarily looking to go into a physical location to eat. But it's the kind of brand alignment where, you know, forever there's been the band, they play their songs, you buy the music and you buy the kind of standard merchants, a t-shirt or something. And that's as far as it goes. But the kind of brand that's been built around Wiz's music, is this, you know, In the cut, like w where, where in high, we're having our munchies and all the kind of names of the food on the menu as well. So it seemed like perfectly aligned. Dzombak: That's what we love doing. And that's a huge part. But behind our strategy is, you know, to make him bigger than just the music, to make them a multifaceted whole business. You know, his app is the second most successful celebrity app ever. And it still crushes. You know, we, we had over 10 million downloads and still have over a million active users. So it's all these different silos add into, you know, the excitement behind him and all the various things he does. And Hotbox was just another great thing to add into the character and everything that kind of goes on with it. Watson: And it seems like there's just no stopping, like from the early mixtapes to Black and Yellow breaking out. And maybe, maybe that's not the framework that you have, but I have this memory of being at the first concert back at stage AE after Black and Yellow blew up, and just like this complete shift, it was just staggering. Like the, you know, the people around the corner for the concert and everything. But you know, there's no real relenting in terms of the business empire you guys are building. Dzombak: That's one of the main things I live my life by and Wiz does is just like, if you ever stop learning, you stop growing. So we never want to be like, ah, we know everything. It's learning and evolving and growing because the guys that think they know it all are the ones that get stuck in. Stop crying. Watson: Yeah. How has the model changed from like the early days when it was still very either a concert centric or album sales centric to streaming centric? Like how has the business of being a music artist changed since you kind of started with Wiz back? Was that 2007? Dzombak: Yeah. It's just faster. It's it's because there's so much access to recording. So it's back in when we started, we were selling and pushing physical compact disc where you had to go print it and wait for it to be printed and make sure it wasn't messed up. And if there's a mess up, it's like a huge screw up. And now it's like, 'Oh, that was the wrong mix. Uploaded to the whole world. Ah, we can just switch it out. No, one's going to know.' And it's just a whole different world of speed and technology being in it and reading and researching and figuring out who are the hype piece and who are the real deal. Because, you know, you get pitched a million ideas every day and you got to know the key questions to ask and what to point out to know if someone's being legit or not. And that's like the Hotbox thing, you know. We had heard other similar pitches similar, but it just didn't make sense. And when we really got in with Order Mark and Next Bite, it was like, okay, you guys really get it and understand how to grow this thing. And that's, that's, that's the biggest change I would say. Watson: I think that's such an interesting filter and I think that the art of filtering the hype beast from the real deal, the ability to discern. Those characters and make that filtering decision. That's almost like one of the universal skills. So whether you're in the restaurant business or the music business, or any other business building that capacity, how have you, I mean, it's reps, but like how else have you honed that ability? Because you need it when you're deciding who to sign to your label. You're using that in every instance. Dzombak: It's just, and I know you would agree with this, it's just, there's so much more data available now is really diving into the data and doing something with it. So many people will pound their chest. I have all this data it's like, yeah, but did you read it? Like, do you understand it? Are you just regurgitating what someone has already told you? And it's that, and I'm a huge believer in team and bouncing other ideas off people and being able to cut through the nonsense and what's real and important and the things to prioritize. Watson: Yeah. And I'd imagine what also makes the speed possible. So it's actually like, kind of crazy. If you think about, like you talking about the speed of the music coming out, we're also talking about like the idea for a restaurant to a card was idea in May to restaurant launched in October that's four months. That's someone who's got a lot of time and like no time at all. So that, that speaks to me, not only the partners that you had that were capable of spinning something up that quickly, how many of you guys launch with 50 locations? Dzombak: Yep. And we're going to keep growing. Watson: Yeah. And that's the capacity is, so can you talk a little bit about how that works? Like actually at the technical execution of a agenda, we have that partner, but like, are they finding the commercial kitchens for you and staffing that on your behalf and then like training them up on your guys' specific recipes? Dzombak: Their software company, that's already in a lot of these restaurants. So a lot of these restaurants use their software. So they're partners and they go out and pitch the idea to all their partners and they have thousands of partners across the country and test it out in key areas they think it'll work the best with. You know, great fulfillment partners that they already know, and they already do business with that they know are legit and then grow it. You know, if you, if you go too wide at first, it'll it'll be too much. Watson: Yeah. Dzombak: So grow it, create a demand, and they have great connections and partners through their other businesses to do that. Watson: And how did you guys come up with the menu? So like, like the names were fantastic, but even just like the specific foods would say your guys' favorite foods, was it stuff that was data tested that like people like wings or? Dzombak: It was a combination of both. So they laid out a huge menu of things that they know work, are easy to do, are easy to replicate and all across the country and we narrowed it. And we had a whole conversation about Wiz's favorite foods. What he likes, what he doesn't like. And so we had a very broad menu and then did a taste test, which was insane. It was like a four-hour taste test. Watson: That sounds like a good day. Dzombak: 15 courses with a couple breaks in between to really get our appetite up. We tried so much food and narrowed it down into what fits and what's easy to, you know, keep quality control on. Watson: And I think that that's such an interesting angle for this, because it is kind of personality centric. And if he didn't like Turkey burgers, it wouldn't make like, forget the margins, forget the, like it sells well. It has to be something that he can authentically, or like even the fact that you guys have so much, you there's all this kind of no knowledge in the public domain about Taylor Gang. That if, there was never a Turkey burger to be seen. Then it would be completely out of place for that to be on the menu. Dzombak: That's goes back to what I was saying. That's how we build our brand and make things believable. It's things Wiz actually enjoys. You know, I'm not out here trying to sell cleaning products cause it's like, that would never make sense. And people would see right through this. Oh, these people clearly paid Wiz for an ad, but if we do things and come up with brands that he actually truly enjoys. It sells itself and makes the process way easier. Watson: So how do you think about that persona then in the line of where everyone's like, multihyphenate? There's a musician or an artist or an entrepreneur or these other things, like, do you, how do you think about trying to bucket the persona in that way? Or are you always looking to kind of push it beyond whatever boundaries have been laid? Dzombak: I think, not to either one of those points. It's just about keep growing. Yeah. Right. Because things are going to change. Like we talked about earlier, like when we first started, we were selling CDs, the MP3 download isn't even a thing anymore. That's how much things have changed, you know? So I think it's just about. Constantly growing and coming up with new ideas and constantly evolving, because if you do the same thing over and over, people are gonna move past that because there is so much data, so many new things coming out constantly, you need to just constantly try different things and not be scared to try different things. Because if you stay in the same box, people will be like, I know you do all that. That's dumb. Watson: Yeah. So tell me about your evolution then. Like, let's go back to the start of you as manager back in 2007. You organized a concert at Penn state? Dzombak: Yeah, so I was in a band in high school, and I was a big pop punk kid and I believed in all that touring that way. And when all my friends decided, 'Hey, about the band thing, let's go to college instead.' I was like, ah, I just went to school, but I knew how to promote shows because I'd been in a band and doing shows and I was like 14. I was like, okay, I could get a real job or do this. And at the time, and at Penn state, the Mr. Smalls of Penn state was this bar called the Crowbar that closed when I was a senior. So the only place to see concerts was at the arena. And I was like, Oh, I'm going to kill it. There's 40,000 kids here. Monday, Tuesday, Wednesdays are days no promoters want. At Penn state kids Thursday, Friday, Saturday want to go to a frat and drink. I'll take all the Monday, Tuesday, Wednesdays, pay a lower rate, and I have a built in audience of 40,000 people. If I can get 500 kids in there, I'm making money. Watson: Yeah. That's a relatively easy ratio. Dzombak: So I know that was a long winded explanation, but that's that. And, I had a fraternity brother I had met with the summer after senior year, between senior year of high school and freshman year of college. And, you know, Pittsburgh, small, everyone meets everyone pretty easily. And it was just in passing, whatever. And I had a frat brother who really liked his music and the frat brother passed away and we did a Memorial concert for him with Wiz. And I was like, I'll reach out and see if they'd be interested. And he ended up coming up to Penn state. We had enough money to pay him, but didn't have enough place for him to stay. So I was like, you can stay at my apartment. Then he ended up hanging out for five days. And we, you know, we just started our relationship there. And I went from being his assistant to road manager, to co manager, to manager, to business partner, and just been trying to grow and, and, you know, keep the wheels turning. Watson: So like manager can mean so many different things. It can mean business strategist. It can mean fixer. It can mean consigliere. It can mean, you know, first critic on like a first track that gets produced. So how has that evolved? Like when your assistant, maybe that's more like run this era and get this task completed. How did that evolve as the business of Wiz evolved? Dzombak: I think a manager's role is subjective and anyone can interpret it differently for the situation they're in. And Wiz is and I are not only, you know, business partners, we're best friends. We lived together for six years. You know, when we go on tour, we still have just share a bus and, you know, and so it's, it's all those things and more, you know. It's covering the whole spectrum and, you know, just supporting each other and being able to have the conversations and do all those various things and, and building a team and having him trust me to build the team around them, to execute, you know, his vision, because ultimately that's the goal is to support your friends and help them execute their vision. I never wanted to be like a rapper. So, you know, I was always intrigued by the business of music, and that's that's my role, you know. And it's interesting in hip hop, you see so many people that have these managers that, I won't say the artist's name, but an artist that, you know, had some success, but it was much smaller than Wiz their manager got on the phone. And I don't know from all status on the podcast, but tried to big dick me. I was like, I'm getting my porsche squashed and blah, blah. I'm like great. I'm calling you about a YouTube algorithm deal. Like what? I don't give a fuck. Oop- Excuse me. Watson: It's all good. Dzombak: But, you know? Watson: Yeah. So, the funny thing about that and, not as long, but Hannah and I have been business partners for about two and a half years. And what I've found is it's, it's a bunch of conversations, but it's actually like just this macro ongoing conversation of this thing that we're building together. And how each conversation was like bleeds into the next, until you reach this depth of number one there's insane trust. Like you don't, you don't start with that great trust, but you, you dive deep into that and you reach it. It's like, okay, I know I can trust you. You're going to go in that direction. Our visions align our missions aligned. And we can roll. Dzombak: Yeah. Watson: And I imagine that's a big part of, is like, just knowing, having the autonomy to make those decisions when things get really big and hairy. Dzombak: Yeah. Yeah. And just being able to navigate all that. And, you know, especially being in the limelight, there's a million other little chirper voices and being able to keep our communication clear, you know, with each other is a super special bond and something I love having with, with him. Watson: Yeah. So tell me about like, was there a 'Oh shit' moment or was there a, a moment where you kind of look back as, I don't even know what the right word is like, like to me watching that crowd at that concert, after Black and Yellow, I was like, 'Oh, it's different.' Like, I remember listening to some of the mix tapes, like we would be driving to our ultimate Frisbee tournaments. And my really good friend Pat, like was like, dude, this guy is the truth. And then it was this enormous concept. It felt like the entire city erupted with specific type energy. So that's, that's kind of like the specific moment for me, but were there moments along the way, in terms of just like this is accelerating beyond our wildest visions, or maybe you saw it all from the jump? Dzombak: It was different for me cause I was just so in it, you know. And to me being a Pittsburgh kid, when we first started playing shows outside of Pittsburgh, to me, it was like, we are fucking lit. Screw these losers. Like we were doing a show in Cleveland and there's 200 people here. So for me, that was the moment. And it was like, we got over you know, $500 for a show. Like no one else in Pittsburgh's doing that. Like in the hip hop world, like young, like us. So to me, that was the moment. And there were all, all types of like, you know, when cushion orange juice came out, that it was already zoomin. You know, one of my most exciting moments was right when flight school came out. Do you remember Club Zoo? Watson: Yeah. Dzombak: Wiz played Club Zoo. And it was so crazy packed, like I'm friends with the former owners now. And he was like, that was our biggest show by far ever. We were way over capacity. He was like, but it didn't matter there. And I remember pulling up and we were late and it was down the block, like almost to the Heinz history center. I was like, there's no way this is real. Like some someone got shot or something bad happened and it wasn't. And it was, I was like, Oh, it's, it's lit lit. And that was in like 2008, you know, like two years before Black and Yellow. So I just saw it through a different lens, but it's so interesting to hear when people caught onto the wave, you know? Cause some people are like I knew was a cushion orange juice. It's like, yeah. But did you know him at this that and the city? And like when, when that was be successful and then some people were like, I I've known whiz since black and yellow. It's like, yeah, but he was doing for five years before that. So for me that was the moment just doing shows outside of Pittsburgh was like, this is crazy. Watson: Was there also, I guess, a period where it's shifted from like yes, to everything versus mostly no. We kind of have to be strategic with this because I'd imagine imagined like the first time someone said, Hey, will you travel to this other city for this show? It's like, hell yeah. Like, like we're doing everything we can, it's the ground game for hustling. And then at some point it's like, there's just an overwhelm of being hit up, DMs, inbound that like, we now have to shift into this, like other posture of strategically filtering? Dzombak: I think right after like the excitement of Black and Yellow was like, cause at that time we were just running, running, running. We weren't saying yes to everything at that point, but like being strategic at that time. And because it was, had had a, had gradual success, we were good at going through things, knowing what he's going to do, what he's going to not want to do. And, but I think when, cause we toured for almost two years straight. When we got off that tour, it was like, okay, let's spend a whole summer where we just camped out, like got our bearings again and like, you know, just tightened it all up. And I think that's when we really got good at, you know, figuring things out and setting up base and growing. Watson: Right on. So what about some of the marketing strategies that you guys employed? Because like there's the famous story of soldier boy going and like uploading, it wasn't cassava, what was the other free file upload? Dzombak: Limewire? Watson: Limewire. Like just uploading other files with the names of like, not his song, but it was his song that was like the file that people were downloading. And all of a sudden it was like familiar, he's making these lists. Like were there moves that you guys made or like strategies that you employed to help fuel the growth to get it going? Dzombak: It was, it was just taking advantage of the internet. I think taking advantage of Twitter and YouTube and MySpace at that time was power thing. And, you know, there were so many kids in New York, you know, that they could be around the labels. And as a kid from Pittsburgh, you're like, I don't know anyone in New York. And being able to really use the internet. I think, you know, Wiz was one of the first ones to do it well along with, you know, like soldier boy, Drake, and in that world was what really changed, changed the game for us, for sure. Watson: When we were talking with Chance from Keep Pittsburgh Dope, he was talking about how he watched the vlogs from the very earliest stages when it was just like a little handheld, whatever. And the amount of loyalty that that inspired from, from that perception of like, I knew him when, like I knew him from the earliest ages. But also just getting a more kind of comprehensive view of the artists that you're really into his life. Like what else are they doing in addition to putting out this amazing track. Yeah, I Dzombak: think that that's super helped. And if you look at everyone's blueprint now, it's... Watson: That's it. Dzombak: That it's, exactly what we were doing at the time. And I think everyone's just trying to duplicate that. Like every kid has their own videographer now and like, everything is captured on everything at this point. And that was, I would say we were one of the, not first to do it, but we were one of the pioneers of recording everything on the internet. Watson: Definitely. Do you know where that idea came from? Do you know like how that started? Dzombak: Wiz was just always into YouTube. And then, one of his former publicists, Artie, had told him, you know, Twitter is going to be the next wave. He crushed Twitter and Wiz is really good on the computers. So back in the day, you know, I would shoot the footage if he was performing and then I'd have to go to school during the day, like back to college. And he would spend the weeks chopping up the footage, putting out day-to-days on his Mac book, editing everything himself. So especially now, you know, when our videographers are editing stuff, he can be like, I know how long it takes to buffer. Like don't give me that excuse, you know? Watson: Yeah. Dzombak: You know, and he has all the knowledge and it was his vision. And I think that's why he's had so much success because he's played all the roles. He's been his own camera, man, you know? All those types of things. Watson: Yeah. I mean, that's a consummate start-up story. It's like, I'm not an accountant, but I kind of have to know basic accounting to keep the lights on. And there's like every single vertical you have eventually wear that hat. Dzombak: Totally, totally. Watson: So another thing amongst the hats that you wear is a co-CEO of Taylor Gang Entertainment, which is the label that you guys developed together. And, so maybe just tell me a little bit about what goes into that. And frankly, I don't really know a ton about the music business. Like we've been trying to cover stuff like, you know, Calvin Harris just selling his music library to like private equity and things like that. But at the kind of base level, starting a label like that and operating it, like what goes into that? How does the business model work? Dzombak: It's just like any other business. There's multiple revenue streams from songwriting, performing, merchandise. And, for Taylor gang, where we offer multiple different services, we, you know, we have an investment vehicle. We have a management company, we have a production management company, and we have a record label along with our other business ventures. And just having a team that services it and delegating out, and everyone doing their job is it's just how, how we run our business. Watson: Yeah. And is that an arena where there's like a lot of inmailing, in terms of people hitting you up and being like, I should be the next person on the label? Dzombak: Every day. Yeah. Every day. Yeah. Watson: So can you tell a story like maybe the times when someone's actually broken through, like what part of the differentiation was as opposed to just spamming you that maybe made that happen? Dzombak: You know, for me, and like how I look at things is things have to be real. Like I was saying earlier, there's so much hype. I have to feel that it's real. So I need to have my own connection or Whitney's to have a connection with someone to feel it. Just everyone can make great music at this point, there's computers can make algorithmically good music that people are going to enjoy. So you need to have a, you need to see a movement going on. You need to have a connection with that person. And I think that's how we get through it. Just like anything and seeing through the hype piece. That's why I love, you know, being in Pittsburgh is you can get a real gauge on thing where people in LA are like, 'this is the next thing,' I go to Pittsburgh. And I asked some of my friends, have you ever heard of this? They were like, 'fuck, no.' You know, that's how you're like, okay, this guy that just told me he's a nationwide star, he's not. Because these people read pop culture things, they're in it. But they're, you know, they don't have access to all the hype beast, LA/New York things. And if they don't know, then I would assume there was some America doesn't know and you're just hyping me up. Watson: Makes sense. So how much of your time do you spend between the two? Dzombak: Before COVID it was like 70% LA 30% Pittsburgh. After, like now, I'm just here and we have an office here, the studios here, everything is on the internet. So as long as I have the internet can, can really work from wherever. Watson: Do you feel like that's going to go back to 70, 30? 50, 50? Like, what do you-? Dzombak: Who knows, especially with what's going on in the world. It's changing every day, all the issues going on in the world. I have no idea, but I'm loving being in Pittsburgh. Watson: Yeah. I would imagine like, so I guess this deal got done for the cloud kitchen with- um, I'm blanking on the company names. Dzombak: Order Mark. Watson: Order Mark and Next Bite. That happened via zoom? Yeah, we Dzombak: had to have meetings, a few in-person meetings. I have to travel a little bit, but nothing that I need to be out there for months and months at a time at just go do, do a few meetings, see who I need to see. Watson: And, but that's part of the filtering though. You still need to kind of get in the room with the same person like that. That's just, I don't see that going away any time. Dzombak: No, but I think it'll be much less intense than what it used to be. Like, I just heard, you know schools there's no more snow days. Watson: Yeah. Dzombak: You heard that, like, it's just the changing of times. And I think, especially after COVID, tons of businesses are going to look like, 'Hey, we spend so much money on overhead and we were pretty much just as like efficient with everyone working on zoom.' I am the number one believer in in-person and that's how you really develop a relationship, but who knows how the world's going to shift. Watson: Are there other things that you guys need to cut out though? Because a lot of like, if you're creating content, if you're uploading something to YouTube, if you're putting out like IP basically it has this, it's very light. The reason that a lot of people aspire to that as a business model is when it works it's a very high margin endeavor, right? Dzombak: It depends. It just depends. Everyone's different, you know, everyone's different. Watson: So another question that I had was associated with, what do people not appreciate about the business that you guys have run? Or what you've built? Like what, what is like a misconception? Dzombak: That everyone just gets drunk and high and hangs out all day. And everything's awesome. Yeah. I push very hard to keep it like any other business. Like I get up early, go to work, you know, have employees, have meetings, everyone needs to do reports. It takes a lot to move a train. And I think, just like anything, you can make anything look good on the internet. And that's the whole point is to make it look like everything's sweet. But people believe that that's just how every single day is. It's like we could put two weeks of footage into, you know, eight minutes and people think that's all one day. It's like, that is not how every day is. Watson: Yeah. That was the highlights of the highlights. Dzombak: This is a highlight reel of the last two weeks. This isn't one day. This is everything that happens in eight minutes. Watson: Yeah. You live in a spreadsheet or in some sort of invoicing software, isn't it? Dzombak: Yeah. People have no idea that accounting exists or lawyers or anything negative in the music industry. 'You just get high and like make music and like enjoy each other's company.' Like yeah. Right. Not that we don't do those things, but like, that's not the one I think we do. Watson: Yeah. And that's, that's also the brand that's being built. And what most of the fans are going to interact with and want to understand. Dzombak: Yes. Yeah. And you know, we know that too, and there, there's definitely a fun side and I am beyond blessed, and we all are, to be able to do what we do. But when people think it's, 'Oh, you guys just got lucky, smoked weed on everything. And it was great.' Like, no way. Watson: Yeah. So what about anything for the future? Like what is next outside of obviously more music inevitably, but what other kinds of projects have you really stoked for next steps? Dzombak: We have a couple of different virtual reality things that we're working on that I'm really excited about. And I think that's a really tough space, and, you know, I'm excited to grow the companies that we have. I'm excited to grow Hotbox and watch it become like a household name. Same with our cannabis company. We're partners in Shop GLD. And I think that's a really fun, cool business. And, and we have a liquor McQueen in the violet fog we're partners in as well. And watching that is like watching an artist career. Like, you know, it goes from small and as, as it gets bigger and bigger, it's like a fun puzzle to figure out. Watson: So on the VR front we've talked to Travis Scott concert in fortnight. Marshmallow did one, like, is that, is that kind of adjacent to what you're talking about? Dzombak: Yeah. Yep. Both of their managers are good friends of mine, and everyone did it a little different. We've already done one. We did it within Oculus, with Oculus in their venues app. Watson: Gotcha. Dzombak: We did one, thug did one, gunna did one. There was like, it was like a seven part series, I forget, who did the rest of them, but, you know, it was really cool to see how we could build out the stage and can make things happen around, you know, in this whole world. And it was really interesting to like, be in an audience where you could talk to other people sitting next to each other, but you weren't actually next to them in real life. There was a crowd though. You could hear other people's conversations. It was, it was really neat. Yeah. And it's just a taste of, 'Oh, it's going to get so much better in the next 10 years.' and I think in, you know, in 10 years, it's going to be ridiculous. Watson: Yeah. I went to South by Southwest, I want to say in 2017, and I tried it and I had had like two drinks. And I put them on and I was literally physically nauseous immediately because the, whatever the pixels are, the processing rate, it just didn't, it didn't work out. And then over the last holiday season, my in-laws had gotten the Oculus and we just like played around with it in the living room. And it was staggering, the amount of improvement that's happened in just that short a time. And I would just imagine, so, where that takes me is like the standard model for a tour is we do this show. And there's little tweaks happening, but like the, the equipment and the staging and everything that gets picked up. And it travels to the next city and that gets picked up and travels to the next city. And we kind of have to pick the cities that we know can sell out venues of a certain size. But it's the same show over and over again. It seems like the potential with VR is that whole business model shifts to, we could create one spectacular show, put the whole budget of all those 30 locations into one show one time, and then sell not just to those markets, but to all the markets everywhere. Dzombak: Yes. That is a possibility. I think, like we said earlier, there's always something to be said about those in-person experiences, which is why I will never go away. But I think that will become more of an option. And I think that option will really grow with DJs in the EDM world and stuff like that. Where, you know, people can feel like they're in a concert and, you know, especially those EDM concerts, like they can put their headset on and just live in this crazy world and be on Molly or shrooms or whatever. And just be like, this is crazy. Watson: Yeah. Because they are already relying on the light because it's not the music. Dzombak: It's not like the music is like some in-depth musical, anything, or even the lyrics matter that much in that world. In that world people are just like, 'mm.' Watson: It's experiential. Dzombak: And like, they want to look at the lights and like be with their friends. And if people can just get drunk and put a headset on, in their living room, Game-changing. Watson: Yeah. What about gaming? What about like the, the persona of like, we're into gaming, we're correlating with some of these like gaming bands, like hundred thieves, ones like that? Dzombak: Yeah. We're partners in the Knights. We were early partners in them. We've been partners with them for a few years and their, their backend is really cool. And I think they're just building, you know, we're building out the brand like anything else. And all those companies, the thieves, faze, clan, all, you know, they, everyone has their strengths and weaknesses and yeah. It'll be interesting to see where the space goes. We did a super cool streaming event with them. It was like eight hours. And we raised like over 65 grand for charity with them in April, or May. I forget, but you know, that world is ever evolving and as much as it is gaming and tournaments, it's content just content in general. Watson: And that, to me, that seems like another arena, very similar to hip hop, or like we can kind of be under the same banner of, of the same level or same team. But we're also like very kind of independent in terms of the expression of how people consume us or people, how people consume these different personas. It seems like there's a lot of similarities there. Dzombak: Definitely, definitely. Watson: Cool. Well, we're close in time limit here. Before we ask the last two questions, anything else you were hoping to share about restaurant? Anything else I didn't give you a chance? Dzombak: Just make sure you try Hotbox by Wiz. Khalifa Kush will be in Pennsylvania soon. Try McQueen in the Violet Fog. It's in wine and spirits. Go check out the Pittsburgh Knights page. Check out the Taylor Gang page. Yeah. All those fun things. Watson: Right on. And If people want to connect with you in the digital world, I don't think I have too many aspiring hip hop artists, so I don't think you necessarily get that spam, but, but where can people find you on there? Dzombak: My Instagram is @wgd6788 and my Twitter is just @realTaylorGang. Watson: Well, so is that, the WGD six, seven - I just said it wrong... Dzombak: Birthday and initials. Watson: Birthday and initials, simple enough. Okay. Cause the first time I saw it, I like saw the account, I was like, ah, this is just like some sort of a spam account, but I was wrong. All right, so let's leave folks. We'll link to all of that stuff, all the brands. If you wanna check those out, and Will's links in the show notes for this episode, you can find it at GoingDeepWithAaron.com/podcast or in the app, where you're probably listening to this right now. But before I let you go, I'm gonna have you issue an actionable personal challenge for the audience. Dzombak: Find a second hustle. If you can't find a second hustle, you're not doing enough because there is so many of them out there, and it doesn't need to be massive. No matter how big or how small, you can always find a second source of income. Watson: So tell me about the ranking of the hustles when you were still at school at Penn state. So you're going to classes, you were promoting the concerts in the first half of the week. And you were also going from personal assistant to co manager to manager for Wiz. Dzombak: Yeah. So at school it would be doing the shows during the week and then Thursday, Friday, Saturday Wiz would usually have shows. I'd have to drive back to Pittsburgh from Penn state. Do the shows, fly out, come back, drive back. Watson: Right on. Dzombak: So that was a pain in the ass, but it works out. Watson: But I mean, that's what it takes for, if you want a special result, that's what it takes. Dzombak: Totally. Two hustles. Watson: Amen. Well thanks for coming on the podcast, man. I appreciate you coming out here. Dzombak: Of course, thanks for having me, I really appreciate it. Watson: We just went deep with Will Dzombak. Hope Everyone out there has a fantastic day. 
Planting soil hasn’t changed much in the last 50 years. Brian Scott wants to change that.
Brian is the CEO of PittMoss, a Pittsburgh startup that creates a recycled/upcycled substitute for peat moss. Pittmoss has been proven in greenhouse trials to outgrow all current peat-based potting soil products when mixed with these products or when plants are grown in nutrient-enriched Pittmoss alone. He is currency leading a company pivot to the retail market. Brian originally invested in the company as an angel investor, and took over the company when the founder moved on for family reasons. In this episode, Brian and Aaron discuss leading a company through growth, the negative environmental impact of peat moss, and the company’s funadraising history, including money from Mark Cuban. Sign up for a Weekly Email that will Expand Your Mind. Brian Scott’s Challenge; Let’s make Pittsburgh the first peat-free city. Connect with Brian Scott
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YouTube PittMoss Website Text Me What You Think of This Episode 412-278-7680 449 Setting Safety Standards for Driverless Vehicles w/ Michael Wagner, CEO of Edge Case Research10/19/2020 
Michael is the CEO and co-founder of Edge Case Research, a company focused on making autonomy safer. Edge Case Research’s ECR’s products and services are geared for customers who build autonomous systems.
The company’s offerings include software that tests for gaps in computer vision systems and consulting focused on prioritizing safety into an engineering department’s culture. Michael’s experience with autonomous vehicles started twenty years ago at Carnegie Mellon University where he built lunar rovers for Red Whittaker, autonomous scientific robots that explored Antarctica, and self-driving technology for tackling harsh off-road terrain. In this episode, Michael and Aaron discuss the origins of the company, how to translate ideas across organizations, and the multitude of industries that will be impacted by autonomous vehicles. Sign up for a Weekly Email that will Expand Your Mind. Michael Wagner’s Challenge; Go see the lunar rover seminar. Connect with Michael Wagner
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Edge Case Research Website If you liked this interview, check out our interview with Argo Ai founder Bryan Salesky about autonomous cars and the episode with Locomation CEO Çetin Meriçli where we discuss self-driving semi-trucks. Text Me What You Think of This Episode 412-278-7680
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Piper Creative makes creating podcasts, vlogs, and videos easy. How? Click here and Learn more. We work with Fortune 500s, medium-sized companies, and entrepreneurs. Follow Piper as we grow YouTube Subscribe on iTunes | Stitcher | Overcast | Spotify 
Amanda Dixon is the cofounder of Barney, a mid-market M&A firm that helps entrepreneurs buy and sell digital businesses. They boast a database of more than 15,000 buyers and a dynamic portfolio of past mergers and acquisitions.
Before starting Barney, Amanda had previously started and sold two businesses. After successfully selling both businesses, Amanda became painfully aware of the challenges associated with selling a business worth less than $20 million. Now, Amanda leverages her learnings to helping others exit their business in a way that is simple, focused and financially advantageous. You can see the companies that are currently for sale through Barney on their website. When she's not working, you can find Amanda with her husband and daughter at the beach or watching Frozen for the 1,000th time. In this episode, Amanda and Aaron discuss how digital businesses get valued, why you shouldn’t share your customer list during due diligence, and what she learned selling her own businesses. Sign up for a Weekly Email that will Expand Your Mind. Amanda Dixon’s Challenge; Make a stranger smile this weekend. Connect with Amanda Dixon
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Barney Website If you liked this interview, check out episode 269 with Brent Beshore where we discuss selling family businesses and the unique models of private equity. Text Me What You Think of This Episode 412-278-7680
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Piper Creative makes creating podcasts, vlogs, and videos easy. How? Click here and Learn more. We work with Fortune 500s, medium-sized companies, and entrepreneurs. Follow Piper as we grow YouTube Subscribe on iTunes | Stitcher | Overcast | Spotify Watson: Amanda, welcome to Going Deep with Aaron Watson, I'm excited to be talking with you. Dixon: Thanks Aaron, happy to be here. Watson: So you have a really interesting business that you're running, and it is, I mean, a little inside baseball because I run a digital agency so it would make sense that this would be hyper relevant. But I think that this is representative of a kind of larger theme that I see coming across a bunch of different markets, which is using, you know, creating these marketplaces, bringing digital tools and digital connective tissue to arenas that otherwise wouldn't be there. So I'm excited to have you on the show. And I wanted to basically just kick things off with having you explain Barney. And then maybe we can talk a little bit about how you got to starting this company. Dixon: Yeah. So we're an M&A firm, for lack of a better term. We feel like we fit that perfect void in helping entrepreneurs sell their business, sometimes buy a business, that it feels like they're too big and too sophisticated to go with the local business broker that's maybe selling a refrigeration company down the road. But also, they're just not quite big enough or quite sophisticated enough where they're dealing with that kind of private equity investment banker that's ready to help them. So we're filling that void of selling businesses between 500,000 and 20 million. We typically work just with digital companies. And what we're seeing a lot is, you know, really a unique shift in the people that are buying and selling businesses, you know, in our parents' generation people sold their business when they were ready to retire. And what we're really seeing now is a massive shift in people, you know, working a business for two or three years, growing it up, bootstrapping it from the ground up and then saying, you know, Hey, this has been really fun, but I'm ready to try something else and become an expert in something else. So that's really where we come in and help either buyers take advantage of acquiring what those people have built or sellers who want to exit and have some cash to show for it. Watson: Anf the way that we actually got connected was through a cold email that came from your team to me. And I was just fascinated by the outreach about, Hey, we can either help you sell business, or if you're in the market to buy. And then you, you come to the website here and maybe we can link this for people so they can check it out at the, in the show notes, but there's like the list of these different companies. There's a web design company that, you know, they have the income stated and the revenue and what the asking price is. And they've got another one that is doing UX and UI design. And like you're saying here, so some of these companies, you know, two, three years old and someone looking to flip it, other ones have been in business maybe a little bit longer, but the narrative here is if it's a digital agency, it's unlikely that it was founded by someone at the latest stages of their career. It was probably created by someone, you know, earlier on in their career that understood the digital opportunity. Maybe they had built that skill set in some capacity and then went and built a business on the back of that ability. Dixon: Yeah. And you know what we're seeing, especially in the digital agency space, I think this really rings true with a lot of industries, buyers are really looking for businesses that are hyper niche. Now, as the market has gotten so big and kind of oversaturated that businesses that sell the best, especially on the digital space, are hyper hyper niche. So what that translates to from an entrepreneur side is people were doers. They were maybe coders. They were really good at outbound. They were really good at emails. They were really good at one skill and were able to turn that into a business 10 or 15 years ago that wasn't a full advertising agency. Now I just, I talked to a seller this morning. They only get backlinks for people and they're making a million dollars a year. Their only businesses getting backlinks. So we love that that shift has, has come and with that comes the need to be able to, you know, more easily connect buyers and sellers without having to go through some of the old school, super strenuous ways to buy and sell businesses. Watson: Yeah. And we talked in the past with, you know, companies that are providing liquidity to people with like land rights and these other kind of difficult businesses. Part of the reason the investment banker exists, part of the reason the private equity investor exists, part of the reason that those characters are there is because it is messy and there's complicated terms to every single deal. And there is a degree to which not all of it can be automated away, but by, you know, finding the right targets and collecting the right info off the bat, you can hopefully reduce some of that friction and make it a simpler transaction to complete. Dixon: Exactly. And yeah, I definitely don't mean to say that we have this totally automated because we're still in a very, very high touch business. You know, we, when we're selling a business, we talk to those sellers almost every day until that business is sold and the same thing when we're representing buyers and helping them go acquire other businesses. It's not a hundred percent automated, but because we're, so hyper-focused in the digital space, we know how this business operates kind of inside and out, so where we can utilize automation technology we certainly do so. Watson: And it's safe to assume that most of the listeners out there will have not successfully sold or bought a business before. I'm sure there's a minority that have, but just, you know, in terms of other forms of sales, like when we get new clients for Piper, it's funny how often, like the sales, the best sales, but just the sales in general, they close on a relatively quick turnaround. You have a qualified buyer. They know that they have the budget for it. They know that it, you know, they have a kind of, a couple of filters just decide whether or not it's right. And then they're ready to act. And sometimes like the characters are tire kickers. They're slow moving. So can you create a framework for us? Not universally across the board, but with having facilitated these transactions, how long it might take from someone first, you know, identifying something that they want to buy to that transaction being completed, or to some degree, like, you know, final signed copies and everything and they're now the owner of that business? Dixon: Yeah. So if you're working with an advisor who understands your industry, that process should take four months. If you're working with just kind of a generic business broker or maybe MNA advisor who works all across the board, they might not have a buyer pool or a seller pool that's as specific or hyper niche as maybe you would like, and then I would expect it to take closer to six months. And I can walk you through the process kind of from start to finish, if that would be helpful. Watson: Yeah. That's all super educational. Yeah. We'd love that. Dixon: Okay. So I'll just talk about from the sell side, you know, if we're representing a seller, that process starts with a valuation. So the big question is how much is your business worth? And a lot of times it's really fascinating, especially with people that have never sold a business, they don't know that their business is actually worth something to someone. If you're making a salary or you're paying yourself money out of the business, it's worth something to someone. So generally speaking and of across the board and every industry's a little bit different and we're going to use tech and SAS kind of as an outlier that we won't talk about. I'm talking about more service businesses or, you know, other maybe brick and mortar businesses. You're looking at a multiple of net profit or EBITDA. And that's kind of what you make at the end of the year and the standard multiple for businesses making under a million dollars is going to be somewhere between two and three times your net profit or EBITDA. So if you're making at the end of the year, $250,000, you could expect to sell your business for somewhere between $500,000 and $750,000. Once you get above that million dollars in EBITDA or net income, net profit, your numbers are going to be a little bit, your multiple is going to be a little bit higher. Again, once you, once you hit that million dollars in money that you're bringing home, you become just a heck of a lot riskier for buyers. Watson: If you're under that number, that's what you're saying? Dixon: If you make more than a million dollars a year, you are a lot less risky. So we're going to see your multiple go out from two - three to maybe five - six. So if you're making a million dollars a year, again in profit, not in revenue, not top line number. If you're bringing in a million dollars a year, you could expect to sell for five, six, $7 million. Watson: And on the valuation front, you know, like we just saw an IPO here a couple of weeks ago snowflake, which helps people implement like cloud databases. They're getting like a hundred X multiple on revenue. And they're like not even profitable yet, which is kind of a different game. We're really talking about businesses that are like, actually bound there, not just balance sheet, but their PNL. And it is a basis of that profit and loss, which is 99% of businesses. Dixon: Exactly. Once you, again, we're talking about businesses under $20 million too, so once you get above that point in valuation, multiples are all over the place. and people are paying for a lot of factors other than just the bottom line numbers. And a lot of factors do go into that, you know, the type of revenue stream. Again, I'll just use the digital space because that's what I know really well. If we're talking about a website development company that's 100% project based and 100% recurring revenue based paid media agency, where they have everyone on retainer that peat paid media agency, where everyone's on retainer is going to trade at a higher, multiple than somebody whose revenue comes in at project-based, even if they're making the exact same amount. And those are idiosyncrasies for every industry, but generally speaking under a million, you're going to trade for two to three times your profit over a million, you're going to start to slowly creep back. And again, tech and SAS is just, it's a whole nother, it's a whole other world that we don't have to get into today. Watson: And so we've got the valuation in place. What's the next step? Dixon: Okay. So after the valuation the most important thing from our standpoint as your advisor is to make sure that we're on the same page with that. So, the way that traditionally business brokers or M and a advisors get paid is at close. So you're not paying us until the business closes. So if it doesn't close, nobody wins. So we want to make sure that you're realistic about what it's worth and that we think we can get it sold for that amount. And then we have a really serious discussion about terms, because when I say, Hey, your business is worth $5 million, that doesn't necessarily mean you get a $5 million check at close. So it's really important for people to understand the way that deals are financed when you're talking about a small business transaction like this. So again, businesses under $20 million are either purchased through debt financing, which would be like a bank loan where they have either it's under five and a half million they could use SBA financing, if it's over that maybe they have some private funding or they're cash heavy. Traditionally the way that we see deals structured is 20-30, maybe 40% of the deal is going to be cash at close. So again, in that million dollar business, maybe you get two, three, $400,000 at close, and then that other portion is going to come and payments that are going to be spread out over three, four or five years, depending on the amount of the term. So that's also really important for people to understand, because when they think, okay, I'm ready to sell my business, I'm going to go buy a big house and retire. The reality is most of the time you don't get paid all of that cash upfront like you would, if you were selling home. So we have that discussion. If everyone is on the same page, we take it out to our buyers. We take it out to the market and kind of see what's out there. In any business a broker M&A advisor is going to, you know, take that four to six week period to really test the market and start providing feedback from their buyers are going to start submitting offers. And those offers are just going to normally just be emails and, you know, outline, Hey, this is the amount that we think the business is worth just based on looking at, you know, financials and some basic information. And then from there, you know, if it seems like they're on the same page, they would submit a formal letter of intent. And a letter of intent is kind of like when you're buying a home, it's like that initial contract, it's not legally binding. You can still get out of it. They can still get out of it. But at the end of the day, it's a starting point. It's it at least gets the conversation going and you can, at that point, sell to anyone else, they have kind of the first right of refusal. From there you work into due diligence, which again, using the home analogy is kind of like a home inspection. It's really the buyer's opportunity to look under the hood. Assuming everything checks out, they're good to go with close. Watson: Right on. And it sounds like if, you know, I'm applying the lens that I have from other types of businesses, the real kind of leverage point,the real challenge, is finding buyers. Everyone's looking for consumers, customers, clients, whatever the terminology is. And really it's the same thing. Here. You need people who are willing to open up a pocket book. And start spending some money on these things that you're facilitating the sale of. And so can you talk a little bit about how you thought about building that pool of buyers and how that's- and maybe if I'm right or wrong about that really being kind of like the ratchet of, Hey, if we can say we have all these buyers, you know, on our list or, you know, waiting in the wings, you're going to get some seller volumes and people wanting to sell it out. Dixon: Exactly. You're 100% right. Having 10 really great agencies to sell for us or 10 really great businesses for someone else in a different industry to sell. Yeah. It doesn't do any good if you don't have anyone to buy them. So absolutely for us, again, being hyper niche was the only way that we were able to really effectively advocate on behalf of our sellers and truly build up a buyer database. So for us, it's just been, you know, we've been doing this for about four and a half years. It's really just outreach. We just did outbound outreach. We do it every day. Just building that buyer pool, Hey, if you're ever interested in acquiring, you know, we can either represent you as a buyer and/or you can just join our buyer database and be in the loop. You would be shocked at how many people just are really interested in growth through acquisition. So over the years we've built a massive, you know, a massive buyer database. And it's really interesting because we're hyper niche. There's not that many buyers out there. So, you know, in the grand scheme of things, having a database of 15 or 20,000 really well qualified buyers in this space, we feel like it's a really good, you know, strong hold on the market. Watson: Absolutely. Talk to me about how you came to realize this opportunity. Because there's multiple layers here of, you know, understanding the world of M&A, understanding the world of digital agencies, understanding even just like the kind of metrics of facilitating a marketplace like this since seeing the potential opportunity, like, can you paint a picture for people of how you would come to even realize that this was something? Dixon: Yeah. So I started, after college I started a business, and I honestly want to say, I got a little lucky in that exit. I sold and, you know, I didn't come from any money. I don't have a business background. I have a college degree, but you know, in nothing, I, I don't feel like I learned a lot about anything that I'm doing today for my college degree. And then. I met my husband. We started a business together. We worked really, really hard on that one, but did exit and got a little bit lucky on that one too. And then we started another business. This will be my third one. And we were in, it was more in the digital tech space and we were approached about an acquisition. It was much larger than our other two. And, I looked everywhere, everywhere for an advocate. Someone who could be on my side, who could tell me, you know, how to structure deals. What's right. What's wrong. Am I selling myself short? What should I do? I couldn't find anyone who could help me. Like I said, at the beginning, I found a lot of business brokers who, you know, said they understood the digital or tech space, but then, you know, you asked about their past listings. Maybe they had sold one agency or one technology, but they also sold, you know, the taco restaurant down the street. And then I reached out to the big M and a folks that work predominantly in that space. And they're like, you're under $20 million. We're not even talking to you until you're three times that size. So I went through that acquisition and it, it did end up working out well, but I have learned so much by just going through three of those on my own. Because of that last experience and really being in that, in-between what we call the middle market. It's really still very, you know, these are still small businesses when in the grand scheme of things, but we call it the mid-market. And there's just there wasn't anyone there. So that's really why we founded this business. My husband and I are co founders and he handles really the buy side of things. I really handle the sell side of things. And we fill that void that we so desperately needed that advocate for when we were going through that acquisition of our own business. Watson: What were the previous two businesses? The first one you made out of school and then the one you guys started first? Dixon: Yeah. So the first one was a mechanical contracting company. So I had worked for an air conditioning company after college, just doing like outbound sales and marketing, nothing, you know, an entry level, like $35,000 a year desk job. I got promoted a couple of times. And then I was traveling a lot on the road and my husband who's from a, you know, from Southern California, has seen kind of the power of entrepreneurship, like really, you know, pushing me off the ledge. Like you should start a company, you should start on me. So I did, and I did that one on my own. And at that time, you know, we were living in South Carolina. I think our mortgage was like, 800 bucks a month. We lived in like a 4,000 square foot house. A different, you know, back then a different time. Andhe just kinda pushed me off the edge and, and I ended up selling that company 18 months later. And that really spring-boarded me. Like, I don't think I could ever go back to working for someone else again. And then the second one was a real estate brokerage that actually was pretty tech heavy. And we grew that one to 30 agents and then sold it to the largest brokerage in that, in that market. Watson: Wow. Okay. I mean, I, I love that too, because the listeners are going to almost be like nodding along. They know what's coming, but they're like stair-step approach to these businesses where you kind of learn like the basics. Like the first time you were just like, how do I even not go out of business in any way, shape or form. And then you kind of start to learn how to create more leverage for yourself and these opportunities. And I'm sure you've already alluded to you're partially kind of scratching your own itch that you couldn't find that partner for a sale. But there's also a degree to which you recognize how many of these businesses are getting sold and your model, which is taking a piece of that deal for facilitating it. If you hit scale with that marketplace, and it becomes the de facto place that someone wants to go, if they need to sell. And like someone saying, like, you got to go to Barney, if that sells, that are going to occur, then that becomes this really kind of virtuous flywheel. One sec, it's going. Exactly. Dixon: Totally. You know, something else we really discovered along the way was many people in my position are much older. There are people that sold a business in their fifties, maybe sixties, and then said, okay, I've done this retired, but I want to help. I want to consult other people that have done that. And what we realized is we are people that aren't going to be doing the same thing for the rest of our life. We're going to do things. Our life is not this linear upward path until we're working in towards retirement. And I don't feel like we're alone in that. I feel like there's this whole generation of folks that really acknowledge the fact that you want to learn something and get really good at it. And then maybe you want to do something a little bit, a little bit different. So for right now, yes, we want to become that de facto place where people go and they're looking to sell a business. And if you're an entrepreneur looking to buy or sell a business, that's really where we want to go. But the key word for us is entrepreneur. And that mindset is totally different than someone who started a business 30 or 40 years ago and has run it for 40 years. And, you know, and is looking to exit. Those typically are not the folks that, that we work with. Watson: And so another thing that I wanted to, to help you to discuss too, was a lot of these digital agencies have almost no tangible assets on their balance sheet. So you were talking about that delineation between project based clients and clients that are on a retainer. And that's kind of a more familiar way of analyzing something. But when you're talking about the non-specialized broker, they're used to selling, Hey, well, we've got this building, we've got this machinery, we've got these kind of very tangible valuation elements that will inform our evaluation. And then you've got someone who just has a track record of, you know, putting websites at the top of a Google search. And that's a big deal. Like this is a massive amount of value, but it's not even remotely close to the same type of levers that a standard person doing a valuation might do. Dixon: Exactly the buyers in this particular space are super, super unique. They really, really, you have to understand that digital space before you can come into it. We have seen since COVID just a huge influx of buyers trying to get into the digital space, especially when we list any e-com anything. I listed an e-com development agency last night, and it's under contract last night. People are going crazy about anything. Anything dealing with e-com, buyers are hopping in like crazy. And then we get down the road in due diligence and we do talk about deal structure and they just, they just are not comfortable in the digital space. They just don't understand the way that assets are classified. To your point when we classify assets in the digital space, you look at obviously client base, you look at, you know, the way that your revenues coming in, you look at the way that your team is structured. A lot of these teams are structured with freelancers that are located all over the world. Oh God, anyone traditional, they're running for the Hills when you hear that. So we have to classify everything as Goodwill, and again, it takes, it takes the right type of buyer who's used to operating in this space. Watson: Yeah, that seems like the other big part of it. I see these different threads of people talking about like small businesses and you can use an SBA loan to help with the buying. You can do seller side financing where like you're saying, they get those payouts over different periods of time. And it's like this great way for someone who feels like a high paying corporate gig, but they don't want to be in that role. And when they want to transition to something where they have a little more autonomy, it's kind of pitched as this great avenue for that. And there's a ton of people that do that and they find success and it's the right fit for them. But there also is that kind of skills gap as well. And I guess that'd be kind of another lever of evaluation, which is how much of this business is able to, I don't wanna say run autonomously, but run with like, Minimal management because it has processes and systems in place versus something where it's basically a big hustle where, you know, there's multimillion dollar businesses that are really, you know, held by a string by a single person and then they leave and that valuation or that value can evaporate. Dixon: Yeah. So, you know, listen in the digital agency space, a lot of times it's still held on by a string. The businesses that aren't are SAS and technology. And that's why they're getting those massive valuations, because there is a point where the product is created and then you just sell it. In the digital agency space, even if it's a hundred percent recurring revenue, somebody who just does, you know, SEO on retainer for clients or something like that, there's still such a human element. And anyone listening, who's an entrepreneur, who's started a business, knows that they work their butts off to get to this point. So what happens a lot of times is when buyers want to come into this space, there's this misconception, especially with digital, that it's going to be glamorous and easy and it's tech. And you can work from anywhere. And it's so fun because you can be in Mexico working on your laptop. And anyone who's started a business and who has run a business, and including those in the digital space knows that that's just not how owning a business is. It doesn't ever really run itself. So when we're looking at buyers, we really, for the most part outside of financial buyers, we really look at two types. You've got your solo preneurs, who you just said, those folks leaving corporate America. They maybe want to try and get a massive loan and pay it off over 10 years and take over the role of kind of the founder without having to bootstrap it up, makes them feel more comfortable about leaving something steady. And then you have a strategic buyer who's an agency who wants to just use this new acquisition that's kind of a bolt on to their existing services. When we're looking at success rates one year, two years, three years down the road, those strategic buyers by far are outpacing or more successful than those solo preneurs who are coming in kind of thinking they're going to live this magical dream life of entrepreneurship. Watson: And there's also in this family that we talked about, you know, having the pool of buyers for your own platform there's a similar thing where if it is bolt-on and they're almost able to value the thing differently because they know they already have, you know, client ABC and D all could use whatever bolt on service there is. And now we're able to kind of facilitate that connection in addition to whatever assets were already there in place. Dixon: Yeah, strategic buyers either come in one or the other way with valuations, they're either saying, Hey, we're just basically buying your portfolio, that's not worth that much to me. And it's an undervalue or they're valuing it, you know, with an upcharge and exactly what you said. They can upsell their existing clients. There's a lot of synergies there. Again, let's say you have like a front page SEO company who just does, you know, on page SEO. And then you've got a backlink SEO company. They may be a perfect one, might be perfect to buy the other because there's a lot of synergies there. If they were to buy a video production agency, not sure there's, there's really a whole lot that makes sense there. Watson: Yeah. So tell me, tell me on the other side, the sellers, they come to you and you maybe like you help them understand the valuation. And it's not one of the characters that, you know, it's like, wow, I didn't know it was valued so much, but the opposite. They think it's inflated and you kind of have to bring them back to reality. I would imagine that some folks say, 'for that price I can't make it happen, but I still want to figure out how to, how to unwind this thing, how to get out of it eventually.' What advice or what kind of metrics will you point them towards to help them maybe better prepare the business to be sold? Like, you know, some people they'll put a fresh coat of paint on their house and they'll, you know, find the other kind of superficial things that can be amended, or they'll fix the roof or fix the basement or the thing that's like actually, you know, sending buyers in and then immediately back out. Dixon: Yeah. That is such a good question. To your point, that's most of the time when people say their business is worth more. Watson: Yeah. Everyone has the inflated self, right? Dixon: The same thing with your house. So that's a great question. I'm so happy you asked that. So a couple of things that buyers are always looking for: staff, people in place leadership team. So depending on your size, obviously this is gonna, this is gonna fluctuate dramatically, but having us. Staff in place that can take over the business once you cash out is really, really advantageous to getting top dollar. From a buyer standpoint, they know that once they pay you, even if it's 20%, 30% cash, there's a chance that you may not be as engaged. So having a really good leadership team with processes in place really helps. When you're looking at staffing your business and where to staff. Buyers look most commonly at business development, that process, how is business development running? Are leads coming in consistently? Are you able to capitalize on those leads and are those people in place doers? Again, in our space, that's coders and writers. That's easily outsourced. That's easy to add on. It's not easy to systemize business development processes. And that we think is kind of universal across all businesses. So I would say one is leadership team and two is making sure that you have the business development staff. Three isshoring up your revenue. So in our space project-based versus retainer, obviously retainer's training and a much, much higher, higher rate. What we do when we help branding agencies or web development agencies that are almost all project-based come to us and they're just not quite happy with the valuation, we suggest that they shift their clients to a retainer-based contract. Even if that just means they're getting paid over the course of 12 or 18 months versus all upfront, and showcase that you can implement a retainer based model. And then come back to us in 12 or 18 months. So working on your revenue stream, if you have contracts, making sure that people are, they're actually legal and working, that that's really important to buyers. They're going to dive into that. And then I would say, lastly is making sure that you are happy and you know you're happy with the exit number that you have in mind. So if you've got an exit number in mind, working towards that and then selling. People sometimes say, 'I'm making good money, I don't think I'm ever going to exit.' And then they wait until the business has bottomed out. Unfortunately we're getting a lot of things right now. Not because of their own doing, but because of COVID. So selling when you feel like, 'okay, I I've met my number and I'm going to be happy with that. I think it's time.' I think it's time to do that. Watson: Makes sense. And I would imagine like, I'm just even realizing now, I hadn't thought about it in these terms, but there's so many analogies to the selling of a home and the selling of a business. Like you were saying, like the employment of certain characters or these other kind of like, they're just be like little warts. Like the same way I wouldn't show my house if like the bed wasn't done. And like I had my shoes left out everywhere. Like you want to kind of just tidy up everything, even if that's not necessarily how you've been living in the space, but to create that appearance for the person that is basically getting their first impression. Dixon: Exactly. And you know, the more that you can systemize and document the better. We don't necessarily say to document because buyers are looking for this huge manual like we kind of read about in books, like the E-Myth or things like that. That's not as tried and true, I don't think any more today. But with that being said, systemizing and documenting really helps you dive into your own processes and find the holes in the words, because buyers are gonna find those during due diligence. So it helps to acknowledge them and then fix them pre going to market. Watson: Gotcha. Cool. Can you talk a little bit more about the due diligence process? How that actually works? Like I'm sure there's NDAs signed, but what else goes into that? Dixon: So before we ever bring a buyer to a seller, and really, I think this is pretty standard in the M&A world, NDAs should obviously always be signed. We take it a step further and we have, you know, LinkedIn verification. We verify your business address. If you don't have a business address, we verify your personal address before we give any information, because we are dealing with, you know, confidential, confidential things. So obviously the NDA assigned, the due diligence process typically involves tax returns, bank statements, credit card statements, and all of those things compared to your financial documents that you've already provided them. So they're going to compare your bank statements and your credit card statements to your P and L, balance sheet and cashflow reports. All of those things are pretty standard. From there they typically want to dive into customer lists. It's really important that even doing the due diligence process, it doesn't matter what industry you're in, you never give buyers your customer list. So if they say we want to see your customer list and how much each customer has spent over the last year, two years, three years, five years. That's great. Export it from QuickBooks, but then change the name of your customer to the industry that they work with them. Or, you know, if you're a different type of business, maybe it would be like customer 1, customer 2, customer 3. That's super, super important. We have seen some things go sideways because folks provided a full customer list there. So they're going to want to know customer lists. They're going to dive into other things in our industry, like churn rate. For some buyers, things like geographic location are going to matter. If you have like a lease or any sort of legal documents, contracts that you're in, they're going to want to dive into all of those and make sure that it's nothing that they're going to be binding. Any debt that you have, any personal debt that you run through the business or debt that the business has, they're going to want to look at that. And most of the time they're going to want it paid off out of the money at close. So it depends on the, you know, the transaction, but those are kind of the generics. Watson: I don't know if I have any other questions, it's been incredibly educational. I'm sure that you've kind of clarified it and help people understand the space a lot more. Anything else that you're hoping to share about Barney specifically, or this space of selling these types of firms that you were hoping to share? Dixon: You know, the only thing I do want to share with your listeners is that it's, you know, one of the things we're trying to do is to downplay the stigma of you know, doing multiple things throughout your life. And our generation, you know, really is the first generation to embrace that. But we still see some hesitation with people selling their agencies and, and fighting that kind of internal demon of, 'Oh God, I thought I was going to do this forever. I don't really like it anymore. I don't really want to do it, but I should.' You know what we're trying to tell people is this process isn't that scary, selling is not bad. It's a really fun process. If you have an advocate on your side throughout the process, and it's great to end up with, you know, enough cash to be able to keep learning and doing something else in your life. So big part of our mission is trying to, you know, tell people that, that linear path just, it doesn't have to be for everyone. And that's okay. Watson: Right on. Well, if people want to learn more about Barney, check you guys out, check out some of the businesses that are currently for sale and it's changed. Like even literally, since we booked this interview, I see new ones up there. So I know you guys are making moves. Where can we direct people who want to learn more? Dixon: Yeah. Our website, we are barney.com spelled just like the dinosaur. Watson: Right on. You guys are going to have a tough go of eventually, you know, owning that name of that IP. Dixon: Hey, we've made offers on it. I think it's actually owned by Mattel. Watson: That'll be tough. That won't be an easy one. Dixon: That's not going to happen. That's okay. We're fine with just, "We are Barney." Watson: Well, that's all going to be linked at the show notes. I'm also going to link some of the socials and, and Amanda's LinkedIn profile. It's in the podcast notes where people are by listening to this on their phone, or at goingdeepwithaaron.com/podcast for this and every episode of the show. Amanda, before we let you go I want to give you the mic one final time to issue an actionable personal challenge for the audience. Dixon: Okay. So this is not in any way related to anything that we've talked about, but I think it's important given our world today. So my challenge to your listeners is to make a stranger smile Saturday and Sunday. This weekend go out and make a stranger happier than they were before you interacted with them. Watson: I love that challenge. That is so good. Dixon: Good. Thank you. I thought about it actually last night it woke me up like, 'Oh shit, I don't have that figured out. I got to think through this one.' Watson: I mean, so there's multiple layers to this. Cause if people are wearing masks, you're going to have to like, get the visual comfort confirmation. Maybe they can like smile with their eyes. And there is the degree to which like you can't, you know, they used to be like, I used to be like the high five to like a stranger type of guy. I'm not going for that anymore. But there's other ways to make people smile, you know, basic common courtesies, you know, other things like that. Dixon: Yeah, that's my favorite right now, because of all the things you just said, it's hard. It's just at the grocery store, just like the person in line behind me or in front of me and or the checkout person just being like extra nice. Because you just never know what people are going through right now. And I just think it's important for everybody to just stay as positive as we can. Watson: Totally. And we had like, kind of a weird phase where I would say the first couple of weeks, you know, you're at the grocery store, you're anywhere, every stranger was just kind of like check it in with each other. Like they were giving each other smiles cause everyone was so stressed out. And then we like crossed a threshold, I don't know if it was like late May sometime, I think it was sometime in May. And then everyone just kinda like settled back in and you stopped getting like the thumbs up from like the stranger across the street. So let's bring that back. Dixon: I love it. Let's bring back the thumbs up. I love it. Watson: Awesome. Amanda, this was great. Thank you so much. I learned a ton. I know the audience did well. Dixon: I really appreciate you coming on. Awesome. Thanks, Aaron. Talk to you soon. Watson: We just went deep with Amanda Dixon. Hope everyone out there has a fantastic day. |
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