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Search Results for: regions business radio

Phil Bonelli – SVP Regions Bank | Owner Hopewell Farms GA

August 7, 2022 by Rose

Local Business and Opportunities, Farming, Banking, Insurance, Finance, Responsibility, Accountability, and Life’s Challenges — all on North GA Business RadioX!

Casey Ryals — Ryals Brothers and Farm Bureau Insurance — an exceptional leader, author, and entrepreneur, is joining us as co-host! He’s also a member of the Greater Hall Chamber of Commerce’s Executive Board and Co-Vice Chair of Membership — he has some important updates for us!

Our special guest is none other than the amazing freestyle rapper, SVP of Regions Bank, and owner of Hopewell Farms GA — Phil Bonelli! (He’s promised to wrap things up for us with an impromptu rap session. It’s going to be a good one, too!)

Since we’re all entrepreneurs, local business owners, and deeply committed to our families and community, we’re chatting about what it means to take 100% responsibility for everything in our lives and the “golden key” to success in life and business.

======================

Connect with Phil Bonelli:

hopewellfarmsga.com

https://www.facebook.com/Hopewell-Farms-GA-105614501707618/

https://www.instagram.com/hopewellfarmsga/

Connect with Casey Ryals:

https://www.facebook.com/ryalsbrothers1/

Connect with Beau Henderson:

https://RichLifeAdvisors.com

https://www.facebook.com/RichLifeAdvisors

https://www.facebook.com/NorthGARadioX

Highlights from the Greater Hall Chamber of Commerce you don’t want to miss!!

Fall Job Fair – Thursday, September 8, from 10 am to 2 pm at the Gainesville Civic Center. This is the perfect forum for companies that are hiring to recruit new employees. Meet Hundreds of job candidates face-to-face. This event is a partnership of the Greater Hall Chamber of Commerce, Lanier Technical College, Gainesville Area Employer Committee, and the Georgia Department of Labor.

 

Discussing Mergers and Acquisitions with Brett Bond of Regions Bank

July 1, 2022 by Mike

Scott Wall and Brett Bond

A new podcast series, “Regions Business Radio Orlando”, covers financial topics such as banking and lending, mortgages, wealth management, and more, while also introducing you to many of the top executives with Regions Bank in the Orlando market.

Hosted by Scott Wall, Commercial Banking Leader with Regions, all episodes of “Regions Business Radio Orlando” are available for download on Apple iTunes, iHeartRadio, Spotify, Google Podcasts, or wherever you enjoy your favorite podcasts.

Brett Bond/Regions Bank

Mergers and acquisitions (M&A) is a general term that describes the consolidation of companies or assets through various types of financial transactions, including mergers, acquisitions, consolidations, tender offers, purchase of assets, and management acquisitions. This process combines two companies into one. The goal of combining two or more businesses is to try and achieve synergy – where the whole (new company) is greater than the sum of its parts (the former two separate entities).

Mergers occur when two companies join forces. Such transactions typically happen between two businesses that are about the same size and which recognize advantages the other offers in terms of increasing sales, efficiencies, and capabilities. The terms of the merger are often fairly friendly and mutually agreed to and the two companies become equal partners in the new venture. Acquisitions occur when one company buys another company and folds it into its operations. The end result of both processes is the same, but the relationship between the two companies differs based on whether a merger or acquisition occurred.

About Regions:

Regions Financial Corporation (NYSE:RF), with $145 billion in assets, is a member of the S&P 500 Index and is one of the nation’s largest full-service providers of consumer and commercial banking, wealth management, and mortgage products and services. Regions serves customers across the South, Midwest, and Texas, and through its subsidiary, Regions Bank, operates approximately 1,400 banking offices and 2,000 ATMs. Regions Bank is an Equal Housing Lender and Member FDIC. Additional information about Regions and its full line of products and services can be found at www.regions.com.

Regions-Business-Radio

Local Regions Initiative with the Small Business Administration

June 5, 2022 by Mike

David Velez, John Stacy, Jeremy Foreman, Chad Cargile

A new podcast series, “Regions Business Radio Houston”, covers financial topics such as banking and lending, mortgages, wealth management, and more, while also introducing you to many of the top executives with Regions Bank in the Houston market.

Hosted by John Stacy, Houston Market President with Regions, all episodes of “Regions Business Radio Houston” are available for download on Apple iTunes, iHeartRadio, Spotify, Google Podcasts, or wherever you enjoy your favorite podcasts.

Jeremy Foreman/U.S. Small Business Administration

Created in 1953, the U.S. Small Business Administration (SBA) continues to help small business owners and entrepreneurs pursue the American dream. SBA is the only cabinet-level federal agency fully dedicated to small business and provides counseling, capital, and contracting expertise as the nation’s only go-to resource and voice for small businesses.


About Regions:

Regions Financial Corporation (NYSE:RF), with $145 billion in assets, is a member of the S&P 500 Index and is one of the nation’s largest full-service providers of consumer and commercial banking, wealth management, and mortgage products and services. Regions serves customers across the South, Midwest, and Texas, and through its subsidiary, Regions Bank, operates approximately 1,400 banking offices and 2,000 ATMs. Regions Bank is an Equal Housing Lender and Member FDIC. Additional information about Regions and its full line of products and services can be found at www.regions.com.

Regions-Business-Radio

Decision Vision Episode 170: Should I Integrate Cryptocurrency into My Business? – An Interview with Daren Hebold, LUX Companies

May 26, 2022 by John Ray

cryptocurrency

Decision Vision Episode 170: Should I Integrate Cryptocurrency into My Business? – An Interview with Daren Hebold, LUX Companies

Daren Hebold, CEO of LUX Companies, was Mike Blake’s guest on this episode of Decision Vision. He explained the basics of cryptocurrency and how it works, its history, apps for businesses to use cryptocurrency, use cases for crypto, the risks, and much more.

Decision Vision is presented by Brady Ware & Company and produced by the North Fulton studio of Business RadioX®.

LUXOLO Financial, a division of LUX Companies

LUXOLO is your best-in-class concierge cryptocurrency service, located on the beautiful coastline of Portland, Maine. Their team believes in “own your keys, own your coins”. At LUXOLO they advocate self-custody of your digital assets. They will guide you through the process of securely storing your private keys, granting you direct and sovereign control over your wealth.

Company website | LinkedIn

Daren Hebold, Founder and CEO, LUX Companies

Daren Hebold, Founder and CEO, LUX Companies

Mr. Hebold is the Founder and CEO of the LUX Companies, a regional commercial real estate asset management company as well as LUXOLO Financial, the innovative in-person cryptocurrency exchange and digital asset wealth management firm.

He has cultivated a broad reputation of trust within the industry and community given his command of confidentiality, fiduciary duty and financial skills in the handling of high value commercial real estate and digital assets. After getting financially thrashed by the Great Recession in 2008-09 and closely studying the US central bank and government responses, he began seriously questioning the composition, integrity and sustainability of our financial system which at its core includes a central bank that is privately owned, centralized and granted the outrageous right to unlimited emission of new currency at their sole discretion.

Needless to say, after critical analysis, research and discussions with friends, he stumbled upon bitcoin, blockchain and cryptocurrency. Seeing and participating in the extraordinary, freedom enabling benefits of this new parallel financial system together with its technological superiority, he founded LUXOLO Financial to broadly deliver cryptocurrencies and blockchain technology benefits to individuals and small businesses alike for everyday use in commerce.

LinkedIn

Mike Blake, Brady Ware & Company

Mike Blake, Host of the “Decision Vision” podcast series

Michael Blake is the host of the Decision Vision podcast series and a Director of Brady Ware & Company. Mike specializes in the valuation of intellectual property-driven firms, such as software firms, aerospace firms, and professional services firms, most frequently in the capacity as a transaction advisor, helping clients obtain great outcomes from complex transaction opportunities. He is also a specialist in the appraisal of intellectual properties as stand-alone assets, such as software, trade secrets, and patents.

Mike has been a full-time business appraiser for 13 years with public accounting firms, boutique business appraisal firms, and an owner of his own firm. Prior to that, he spent 8 years in venture capital and investment banking, including transactions in the U.S., Israel, Russia, Ukraine, and Belarus.

LinkedIn | Facebook | Twitter | Instagram

Brady Ware & Company

Brady Ware & Company is a regional full-service accounting and advisory firm which helps businesses and entrepreneurs make visions a reality. Brady Ware services clients nationally from its offices in Alpharetta, GA; Columbus and Dayton, OH; and Richmond, IN. The firm is growth-minded, committed to the regions in which they operate, and most importantly, they make significant investments in their people and service offerings to meet the changing financial needs of those they are privileged to serve. The firm is dedicated to providing results that make a difference for its clients.

Decision Vision Podcast Series

Decision Vision is a podcast covering topics and issues facing small business owners and connecting them with solutions from leading experts. This series is presented by Brady Ware & Company. If you are a decision-maker for a small business, we’d love to hear from you. Contact us at decisionvision@bradyware.com and make sure to listen to every Thursday to the Decision Vision podcast.

Past episodes of Decision Vision can be found at decisionvisionpodcast.com. Decision Vision is produced by John Ray and the North Fulton studio of Business RadioX®.

Connect with Brady Ware & Company:

Website | LinkedIn | Facebook | Twitter | Instagram

 

TRANSCRIPT

Intro: [00:00:02] Welcome to Decision Vision, a podcast series focusing on critical business decisions. Brought to you by Brady Ware & Company. Brady Ware is a regional, full-service accounting and advisory firm that helps businesses and entrepreneurs make visions a reality.

Mike Blake: [00:00:21] Welcome to Decision Vision, a podcast giving you, the listener, a clear vision to make great decisions. In each episode, we discuss the process of decision making on a different topic from the business owners or executives perspective. We aren’t necessarily telling you what to do, but we can put you in a position to make an informed decision on your own and understand when you might need help along the way.

Mike Blake: [00:00:43] My name is Mike Blake, and I’m your host for today’s program. I’m the Managing Partner of Brady Ware Arpeggio, a data-driven management consultancy which brings clarity to owners and managers of unique businesses facing unique strategic decisions. Our parent, Brady Ware & Company, is sponsoring this podcast. Brady Ware is a public accounting firm with offices in Dayton, Ohio; Alpharetta, Georgia; Columbus, Ohio; and Richmond, Indiana.

Mike Blake: [00:01:07] If you would like to engage with me on my social media with my Chart of the Day and other content, I’m on LinkedIn as myself and @unblakeable on Facebook, Twitter, Clubhouse, and Instagram. I also host a LinkedIn group called Unblakeable’s Group That Doesn’t Suck, so please join that as well if you would like to engage. Today’s topic is, should I integrate cryptocurrency into my business? And this is a topic I’ve wanted to do for a while.

Mike Blake: [00:01:35] Haven’t really been able to sync up with the right guest who, I just thought, would give us a great and in-depth perspective on it, and we can sort of make schedules sync up. And I feel almost apologetic about that, because this is a topic that’s long overdue, but that having been said, I think the timing is actually propitious. Cryptocurrency has always, of course, been a little bit of a roller coaster ride, and right now, as of late, cryptocurrencies, I think in a way that’s surprising to me anyway, have been retrenching quite a bit over the last several weeks, which frankly I find surprising, which probably reflects my own ignorance of the dynamics of cryptocurrency.

Mike Blake: [00:02:24] I would have bet a couple of months’ mortgage that cryptocurrencies would have become stronger after the Russian attack on Ukraine and suing financial sanctions that I think would have motivated a lot more activity to circumvent conventional and national banking systems. And maybe that is happening, but not enough to overcome other forces that are at play here. So, because of what’s going on in the crypto markets, I think this really, really as well timed a topic as any to talk about this, and I hope that you’ll agree.

Mike Blake: [00:03:00] I think it’s also important because I think everybody by now has heard the word or term, cryptocurrency, they have heard of Bitcoin, but it really is remarkable how few people actually know what it is. As it happens, I happen to do a lot of work in the cryptocurrency e-wallet exchange space, some work with crypto miners and valuing or appraising their businesses.

Mike Blake: [00:03:27] But many of my peers really still don’t have any idea how cryptocurrency works, what the value proposition is, et cetera. And I think that—I don’t think they’re an outlier. I think there are a lot of people that still need to be educated. And if you’re one of those people, I think you’re going to find this a very good use of your next 45 minutes or so.

Mike Blake: [00:03:49] And so, joining us today to help us out with this topic, who is an expert, because I’m not, is Daren Hebold, who is Founder and CEO of the LUX companies, which offer specialized asset management services for commercial real estate, together with financial asset management of cryptocurrency. He has cultivated a broad reputation of trust within the industry and community given his command of confidentiality, fiduciary duty and financial skills, and the handling of high value commercial real estate and digital assets.

Mike Blake: [00:04:20] After getting financially thrashed, his words, by the Great Recession of 2008 and ’09, and closely studying the US Central Bank and government responses, he began seriously questioning the composition, integrity, and sustainability of our financial system, which, at its core, includes a Central Bank that is privately owned, centralized and granted the right to unlimited admission of new currency at their sole discretion.

Mike Blake: [00:04:43] After critical analysis, research, and discussions with friends, he stumbled upon Bitcoin, blockchain, and cryptocurrency, seeing and participating in the extraordinary freedom-enabling benefits of this new parallel financial system together with its technological superiority. He founded LUXOLO Financial to broadly deliver cryptocurrencies and blockchain technology benefits to individuals and small businesses alike for everyday use in commerce. Daren, welcome to the Decision Vision podcast.

Daren Hebold: [00:05:12] Thank you, Mike, and great intro. I appreciate that.

Mike Blake: [00:05:16] So, as I said in my opening, a lot of people listening to this, I think, at this point ,don’t want to admit it, so what we’re going to do is we’re not going to crypto shame people and we’re going to let people address their lack of knowledge in a safe space, the privacy of their own headphones, their own car, whatever it is they’re listening to. What is cryptocurrency, and how does cryptocurrency come about?

Daren Hebold: [00:05:45] Great. Yeah, and we’ll keep it real simple to begin with, and then we’ll branch out. So, a Bitcoin, what is a Bitcoin? It’s electronic money. It is a peer-to-peer payment system. It’s a store of value. It’s a new financial system. It’s many things and it ticks many boxes. And this is something that we saw come out of the ashes of the last financial collapse after ’08. I think it was January 2009, the group, Satoshi Nakamoto, officially released Bitcoin and it’s just been branching out since then. I just wonder where we start, maybe, Mike, to keep it simple. I think-

Mike Blake: [00:06:45] Well, I think what people—I mean, the question I’m asked a lot, and I probably give a barely adequate answer, is how is cryptocurrency created? Right? We know about crypto miners. Most people have never seen a crypto mining rig. They don’t understand why people are buying PC gamer hardware to create this virtual or cyber currency. So, maybe talk a little about that. How does cryptocurrency get created, and why does that translate into a fungible value?

Daren Hebold: [00:07:15] Yes. Yeah. And yes, how is that valuable, and why do people recognize that great place? Okay. So, not all cryptocurrencies are created equal. So, Bitcoin was the very first one. And since then, I think, literally, there are over 17,000 cryptos out there.

Mike Blake: [00:07:34] Wow. I didn’t know that.

Daren Hebold: [00:07:34] Yeah, it’s just insane. And frankly, it’s a little bit of a junkyard out there. And I think we, in the industry, would probably agree that you could probably count literally on maybe one hand how many of those 17,000 cryptos could be reasonably considered money. The balance of them have other uses and utilities for smart contracts, and for programming, and for other functions, but probably aren’t considered money.

Daren Hebold: [00:08:06] Bitcoin is clearly the winner as far as recognition and global adoption, where people say, Yeah, that’s money and I’m going to use it as such and treat it as such. So, it’s unique because it requires a great expenditure of electricity to print or mint or mine, I guess we would call it, a Bitcoin. So, if you or I wanted to do it, we could do it tomorrow. You pop online, and for several thousand dollars, there’s an entry-level mining machine, and you don’t need any real skills, it’s a plug-and-play device.

Daren Hebold: [00:08:45] You plug it into your electricity and it juices it. Your bill goes through the roof and you start printing or mining Bitcoin rewards right away. So, anybody can do it. It just costs a lot of money. And we can talk about it later. We’ll unpack it. But the cost to mine one Bitcoin sort of sets the floor for the price, because it’s many thousands of dollars to mine one Bitcoin. Whereas, some of these other cryptocurrencies involve what’s called pre-mining or really just pressing a button and 10 billion units of some certain token appear.

Daren Hebold: [00:09:30] And so, there’s not a lot of intrinsic value in those projects, and the market determines that. No one person points and decrees which cryptos have value. The market decides, which I love. I love Mr. Market. And the market says [making sounds] that coin was pre-mined and it’s proof of stake, and I could create another one of those tomorrow morning, and that doesn’t have much value to me. That’s why that’s trading for a penny. Whereas, a Bitcoin is trading for $30,000 these days.

Mike Blake: [00:10:05] And what is the guts of how mining happens? Is it solving equations? Is it random number generator? Is it something else? I mean, how does that—and I understand we’re limited to Bitcoin, but I think Ethereum kind of works the same way. You can still mine Ethereum, and maybe Dogecoin, and others. How does that work that it proves that there’s an algorithm that effectively proves that you have produced somehow a piece of cryptocurrency?

Daren Hebold: [00:10:39] Sure, sure. I’ll keep it simple. So, Bitcoin was the first birth of a blockchain. And a blockchain simply means that there is a public ledger that everybody can pop online and view, and it just shows that I gave today here on May 18th, I gave Mike one Bitcoin from this wallet to that wallet, and that gets codified into a ledger. And what the mining does is it proves that. The mining network of all the global miners performs calculations and proves cryptographically that, yeah, Daren’s wallet gave Mike’s wallet one bitcoin on said date and time. It’s indisputable, it’s immutable, meaning nobody can go back in time and change it. It’s auditable. And everybody agrees that it happened.

Daren Hebold: [00:11:38] So, it’s a very crucial—it sounds trivial just to prove that I gave you money, but how else does a financial system work without a ledger that everybody can agree on? And mining is the way to secure that. And so, the people that have these rigs and spend not just thousands, but I mean, there are industrial scale mining facilities where people have invested $300 million, as you probably know, and they get paid to run those machines in the form of Bitcoin rewards. So, they run these machines. And then periodically over time, every 10 minutes, actually, the Bitcoin network kicks out some Bitcoin rewards to the miner who successfully hashed that particular transaction. And there’s an even distribution. So everybody gets their fair share of the Bitcoin rewards, everybody who is mining.

Mike Blake: [00:12:34] Okay. Now, I have to admit, and I’m supposed to know this, but I didn’t. 17,000 different cryptocurrencies, right? And most people do well if they can name one or more than one. How do they differ? We think of currencies, of course, national currency, the euro, the dollar, the yen, et cetera, but how do 17,000 different cryptocurrencies differentiate and how do you decide which one or ones is a business you want to trade in or deal in?

Daren Hebold: [00:13:05] Yeah, it’s a great question. Okay. I would say just broadly, I would call them coins and tokens, is kind of what the industry has settled upon. Coins generally refer to if something can be identified as money. And again, I think there’s probably five, maybe 10 tops that people would agree are coins/money. All the other ones are considered tokens and they each have their own separate blockchain.

Daren Hebold: [00:13:36] Again, they’re usually all free to use. Nobody owns them. Anybody can use them for the most part, and they just have different utilities, Mike. So, for example, Ethereum is a smart contract platform. It kind of straddles the fence. It’s the one unique one where Ethereum is kind of considered money right now and it’s trading for $2,000 per coin. But then, simultaneously, it’s a smart contract platform where you can program your Ethereum or your other tokens to do things that you want them to do.

Daren Hebold: [00:14:11] So, you can mirror legal contracts with a smart contract on a blockchain. So, that’s a huge, huge use case out there for crypto, is programmable money. And so, imagine every legal contract where a tenant has to pay a landlord, a supplier gets paid by a corporation, an employee gets paid by an employer, all these can get codified into a smart contract, and really, greatly simplify accounting, bookkeeping, auditing, payroll. Any number of industries are going to be certainly disintermediated by this.

Mike Blake: [00:14:57] So. We talked a little bit about this in your intro, but I’d really like to get your in-depth take on this, because I think it’s really important. And that is, why has cryptocurrency a currency that was invented, now, less than 15 years ago? Why has cryptocurrency found the market and the traction that it has? We’ve never seen anything like this in our lifetimes, have we?

Daren Hebold: [00:15:22] It’s a great point. Yeah. We have not seen new money, God, in centuries, right? I mean, way back there were several forms of money, coffee beans, large stones, wampum, parcels of real estate. You could probably name more. But no, we have not seen new money in a while. We’ve just been kind of going along with gold and silver up until it was made illegal by governments of the world, who, that did not fit their narrative, and they wanted to introduce central bank fiat debt currencies, and they have successfully run with that for quite some time now.

Daren Hebold: [00:16:09] But look what’s happening. Maybe they didn’t do such a great job. We had a great run with fiat currencies, but if you pop on the imf.org right now, it’s nothing short of a death procession of every single fiat currency out there that are experiencing hyperinflation as we speak. So, Central Banks invented these currencies, and then they got themselves into a pickle when they started printing more, and more, and more, almost without discretion. And in the last two years alone, the US dollar has printed—40% of the dollars in circulation were printed, meaning the Central Bank in the US pressed the button, and dollars, electronic dollars came out, and that comes with consequences.

Daren Hebold: [00:17:00] So, even our beloved dollar is now eight-and-a-half-plus percent inflation. And so, circling back to your question, the reason that we need to consider new forms of money is people are getting eaten alive with the fiat currencies that are tanking in value. Turkey, 54% inflation. If you have $1,000 in your bank account, by Christmas, it’ll be half of that. I mean, that’s catastrophic. I mean, can you imagine that? So, we, citizens in different countries in the world, that have been forced to use fiat currencies are being forced to come up with alternatives, and I think Bitcoin ticks a lot of boxes there.

Mike Blake: [00:17:47] Earlier in my life, I actually did live in a hyperinflationary environment. I lived in Belarus and Ukraine shortly after the fall of the Berlin Wall, and they were struggling to launch their own currencies as their currency just died, right? The Soviet ruble was just gone overnight. And the last time that I was over there for any length of time, the exchange rate was 200,000 Belarusian rubles to the dollar. And about 80,000—the currency that was existing, where it’s used to be called the karbovanets, 80,000 of them to the dollar.

Mike Blake: [00:18:21] And I remember paying for lunch with bags of money and the server would have to come over with one of those banknote counters to make sure that I paid the correct amount. And it was just so chaotic, because the prices couldn’t even keep up. You see a Snickers bar that would be for sale in the morning for 3,000 rubles, you come down at the end of the day, be 7,000. It was crazy, and I wonder if cryptocurrency could have helped those economies achieve some stability back then.

Daren Hebold: [00:18:56] Interesting. Well, I’ll tell you, another thing that’s important is just governance. So, I think part of the reason Bitcoin has floated to the top is just that. There’s only ever going to be 21 million Bitcoins. That is huge. So, we’re controlling. We, collectively, all the miners, have signaled that we want a cap on Bitcoin, and that tends to preserve its value, whereas governments have unlimited emission. So, we’ve got to have governance in place to govern emission, use, just kind of equity and the fact that it cannot be censored, or revised, or reversed.

Daren Hebold: [00:19:42] All these are important things. And and if we can keep those favorable attributes in place, which they are, for Bitcoin specifically, then absolutely. It’s a great use case. You touched on Belarus and Russia. Let me just read you something here. Granted, this statement’s a couple of weeks old, but with the advent of Russia being internationally sanctioned, where people cannot bank with any Russian. Not just the prime minister of Russia or the 2,000 oligarchs who have been tagged as being criminals, but everybody in Russia is being equally penalized. Here’s a statement here from CryptoSlate magazine.

Daren Hebold: [00:20:25] “Russian citizens are justifiably fearing the seizure of their retail deposits and naturally want to protect their capital. Purchasing digital assets is an effective means by which ordinary citizens can move savings out of the financial system in order to preserve capital.” What a powerful statement. I mean, that is quite a use case if I’ve ever heard one. Another one was the Canadian truckers who did not break any law, were never convicted of a crime, but their banks froze their accounts, just politically. They just didn’t appreciate truckers driving around talking about freedom. That’s a threat.

Daren Hebold: [00:21:09] So, they froze bank accounts left and right, and citizens were left without legal recourse other than accepting donations via cryptocurrency, so another use case. I guess more and more, we’re seeing that it’s become cool for governments to become tyrannical and sort of take matters into their own hands, including their Central Bank money policies. And it’s really not funny to the average person who has worked their whole life to establish some savings and is starting to see it just melt away via inflation and such.

Mike Blake: [00:21:47] So, a key feature of cryptocurrency, I think, and correct me if I’m wrong, please, is that there is no king or queen of Bitcoin. There is no Bitcoin chairperson, There is no czar. It’s just out there, right? And it’s self-regulating, self-trading, and that’s it.

Daren Hebold: [00:22:08] That’s it. No one owns it. Everyone can use it. Exactly. And it is literally free. You can be a dirt farmer in a foreign country, and you can download a wallet, and begin using it immediately. And no one can stop you, or ask you what you’re doing or why, and that’s just fantastic. There’s no intermediaries, too, or it’s direct peer-to-peer payments.

Mike Blake: [00:22:37] Are you familiar with FATCA, the relatively new regulation about disclosing international payments? It’s an acronym for something. I forget what it’s called, but you probably would know it.

Daren Hebold: [00:22:48] Yeah.

Mike Blake: [00:22:50] Is that driving cryptocurrency, too? Because, man, what a pain. What a pain that regulation is not. Not that it costs that much, but the burden of complying with that paperwork, I’ve ridden shotgun with people that are doing it when they’re buying or selling businesses, transferring assets. It is a monster.

Daren Hebold: [00:23:10] The notion of borders literally becomes foolish when you start working in cryptocurrency. You say, why? Why do I have to stop, get frisked, hassled, taxed, chipped, and tracked, just because I want to give Mike some money, because he’s over that border over there, be it a federal state or international border? It’s silly. And there are very few instances when I think it’s a legitimate hassle, to be honest with you. So, there are people that are going to violate laws, and no matter what type of money is in use at the contemporary time, yeah, certain number of people are going to violate laws. But just the fact that I’m sending money over a border, I’m not sure how that entitles all manner of authorities to hassle me, and possibly censor and resist my transaction.

Mike Blake: [00:24:12] Yeah. And for those of you scoring at home, FATCA, F-A-T-C-A, stands for Foreign Account Tax Compliance Act. Sorry, I didn’t have that prepared. That was an off-the-cuff question I thought of. But take a look at it. It is burdensome. Whether you agree with it or not, I don’t think anybody disagrees that it’s burdensome. So, Daren, this is a business podcast, what is the killer app for a business person to start using or expand the use of cryptocurrency in their business?

Daren Hebold: [00:24:49] Great. Awesome question. Let’s get right to it. So, okay, so here we are, we’re 12 years into Bitcoin. There are two killer apps right now for business, and I’m using them both. First one is hold bitcoin specifically on your balance sheet of your business. Okay. That serves several purposes. First of all, it’s balanced on your balance sheet. It’s owner’s equity that you can carry short, medium, or long term as just additional equity within your company that tends to grow over time.

Daren Hebold: [00:25:30] I mean, if you look at the long haul, it generally is going to appreciate over time passively, without doing anything. The second thing you can do with that Bitcoin on your balance sheet is it’s lending collateral. So, we and your listeners out there can become your own bank. So, you can post—for every bitcoin you post—well, let me back up. Okay. So, you’re holding a tranche of Bitcoins on your corporate balance sheet.

Daren Hebold: [00:26:03] Those are Bitcoins. You say, okay, great, but I need USD to operate my business, I need some working capital, I need a revolving line of credit. You usually go to the bank to get that. Now, crypto banks have emerged, where they say, Hey, Mike, post your bitcoins with us as collateral and we’ll give you up to a 50% loan in US dollars that you can use for whatever purpose you want, you don’t need underwriting, it’s just simply a balance sheet loan, and we can offer you a very competitive interest rate of about 4.95%.

Daren Hebold: [00:26:41] How’s that sound to you? Well, it sounds fantastic to me, and I use it all the time. So, we’ve taken a portion of our corporate treasury and post it as collateral in some of these trusted crypto banks who have lent us US dollars that we can use for working capital. It’s a fantastic instrument. And what happens is as time goes on, the value of my collateral goes up, and we say to ourselves, I look at my partner, and we say, alright, you know what, let’s retire that loan and go get a new 50% loan based on an increased value of our Bitcoins that we own.

Daren Hebold: [00:27:19] So, that’s the first killer use for businesses, Mike. The second one, we haven’t mentioned this phrase yet, but one cryptocurrency that we believe in is USDC. USDC is issued by Circle Financial in Boston. It is a digital version of a dollar. It’s pegged 1 to 1 with the dollar with audited reserves. And what you can do with that digital dollar is go to the same crypto banks that I was describing and earn a meaningful interest rate. So, the savings account is back. I mean, when’s the last time we were getting 4, 5, 6, 7% interest rate in a bank account, perhaps the early ’90s.

Mike Blake: [00:28:09] Ages ago.

Daren Hebold: [00:28:10] Ages ago. And now, it’s gone. Now, it’s a fraction of 1%, and with inflation, you lose. So, now, you can take your US dollars, convert them to USDC which we believe is the forerunner of stable coins, and post them on deposit with these crypto banks, and earn something in that range that I just said, 4 to 7% is kind of the prevailing rate, and you say, wow, how can they afford to pay depositors that much? That’s fantastic.

Daren Hebold: [00:28:46] I mean, how can they do that? They’re a lender. So, they turn around and lend that money out with about a 2% spread. And then, you say, well, how does that interest rate compute? Because a minute ago, you said you’re a borrower at about 5%, and then on the other hand, you’re a lender at about 6 or 7%. Well, the way they work it is small LTVs, so internal to their banks.

Daren Hebold: [00:29:15] They’re only lending out a very small percentage of their assets that they’re holding as collateral. And additionally, when you post collateral, you’re no longer earning interest. So, they’re only paying interest on a very small percentage of the assets they’re holding in custody. That’s how the math works out for them. But those are the two killer apps that I can bring to you guys today. There are going to be many more, and we can unpack those if you’d like.

Mike Blake: [00:29:49] One I’ve thought about, you tell me if I’m wrong, but I wonder if international payment settlement would also be a killer app, because moving money in between countries is still, amazingly enough, a 7 to 10-day exercise, and that’s just too long.

Daren Hebold: [00:30:08] Agreed. And I’m almost out of school in saying this, but I think this probably addresses your question. I believe BRICS, the BRICS consortium of Brazil, Russia, India, China, I believe when they conduct their international trade, they’re settling in gold, I believe, right? I don’t know if it’s physical or if it’s promissory notes of gold, but yeah, think about that. If they could settle in Bitcoin, you can send $20 billion and it cost you a mining fee of just over a dollar right now. So, it’s just a fantastic medium of exchange in that regard. And again, yes, borderless, to your point, and you don’t have to gain permission.

Daren Hebold: [00:31:02] It’s entirely up to the sender and the recipient to conduct their business as they will. So, I think that’s a great use case. You’re also going to see Bitcoin—perhaps, before you see it as an international settlement device, you’re going to see it—right now, it’s an individual settlement. You gave me a car, I gave you a Bitcoin. Then, you’re going to see it as an intercorporate settlement. I owe you $5 million, I’m going to settle in Bitcoin. Then, you’re going to see it governmental, and then international. So, it’s scaling up. It’s no longer a tool for geeks to trade on the web with and nobody else cares about it.

Mike Blake: [00:31:49] Now, I know you have a background in real estate as well, so I’m curious about your view on this question, is that, I wonder if cryptocurrency, in general, and Bitcoin, in particular, has a role to play for real estate, especially given the velocity of transactions, right? And my own personal story, we’re considering property in Portugal for retirement, but properties are going as fast, they’re just as fast as they are here, right? Telling somebody, hey, I want to buy the house, but you’ve got to wait 7 to 10 days before the money shows up, you’re going to lose real estate opportunities if you have to wait that long for the money to show up.

Daren Hebold: [00:32:27] Yeah, you got it. So, boy, there’s a lot of boxes that crypto ticks as far as real estate transactions. So, where do we start? Let’s see. I guess I would start by saying, yeah, it’s very fluid and liquid. If you find a property you like, you can escrow your deposit with a title company in 30 seconds. It’s done. Boom. And in the future I think you’re going to see, associated with that deposit, Mike, you’re going to see a smart contract replace title agencies.

Daren Hebold: [00:33:08] Like here’s a transaction, you log into a web-based console, and there are 14 steps required. And step one is sign a purchase agreement. Step two is here’s the Bitcoin address for your deposit. Step three is attorneys conduct title work and upload their results, et cetera, et cetera. So, there will be essentially an algorithmic title closing agency of the future. I’d love to do it. It’s another startup I don’t have time for right now. Maybe somebody else can do that.

Mike Blake: [00:33:40] Yeah, that’s plenty of room. So, we’ve talked about all the positives about cryptocurrency. What are the pitfalls or the risks? What is somebody somebody thinking about deepening their relationship with crypto in their business? What do they need to be aware of? What are the potential gotchas if you’re not careful?

Daren Hebold: [00:34:00] Sure, sure. Yeah. Okay. First of all, I would start with just like selection of coin. There’s just all too few cryptocurrencies that will be around five or 10 years from now. So, at our exchange, when we’re advising desk clients, we say, listen, just stick with this short list of five potential coins to put into your portfolio. So, number 1 would be selection and longevity. Number 2, everybody’s very focused on the price, and right now, it’s kind of a buzz saw.

Daren Hebold: [00:34:42] The prices of all cryptos, and frankly, even Wall Street and commodity assets are just all over the map, and there’s been a big drawdown in the last six months. It’s like a 35% drawdown across like all commodities, and securities, and cryptos in the last six months. And there’s a lot of forces at play and not everybody wants to see Bitcoin succeed. There’s just a lot of vested interests who would much rather that it be uninvented and go back where it came from, because they like earning 3% transaction fees.

Daren Hebold: [00:35:15] They like having unlimited Central Bank fiat emissions. They like having total control over everybody’s movements. And there are instruments to bring cryptos down, like derivatives and shorting. And so, there’s that. And then, thirdly, I would say storage. So, the beauty of cryptocurrency, one piece we haven’t touched on, is just custody. You no longer have to place your money in custody with someone else. You can engage in 100% self-custody, meaning you hold your wallet, or you can do what we have chosen after four years of careful planning, which is collaborative custody, which is Mike holds a key, and our firm, LUXOLO Financial holds the other key, and then we send you home with a backup key.

Daren Hebold: [00:36:07] So, you hold two of three keys to your crypto wallet and we hold one. And unless there’s unanimous consent across the key holders, no money can leave the wallet. So, it’s a fantastic method of enjoying the beauty of self-custody, but also having someone holding your hand, so you don’t lose your shirt when you forget your passcode or your private key. So, not having a custodian is a very, very large advantage, particularly, today, when we’re seeing banks and governments, again, go tyrannical and just decide that we’re going to seize your assets.

Daren Hebold: [00:36:47] If I’ve got time, I’ll read you one other thing. There’s a very large online exchange that I’m sure we’ve all heard of, and they just released in their latest 10-Q SEC filing the following statement. “Because custodially held crypto assets may be considered to be the property of a bankruptcy estate, in the event of bankruptcy, the crypto assets we hold in custody on behalf of you, our customer, could be subject to bankruptcy proceedings, and such customers could be treated as general unsecured creditors.” Wow. Think about that.

Daren Hebold: [00:37:26] That is called a bail-in, if you guys aren’t familiar with it. That’s when a bank or company becomes insolvent due to a run on withdrawals, and they say, well, we got to take 40% of your Bitcoins and you can probably have the rest. So, unbelievable, that that’s a statement made by a publicly traded cryptocurrency exchange. We might take your Bitcoins if we run into trouble. So, that’s why you don’t want custody. That is exactly why. So, consider holding your crypto in your own wallets or in a collaborative custody environment. You can set up your attorney, or your accountant, or your trustee with a key. There are many ways to mirror legal frameworks with the signatories on a wallet.

Mike Blake: [00:38:15] That custody question brings an idea that’s half-baked and maybe it’s totally stupid, so you can feel free to tell me that, it’s just the internet, and that is this, that for good or ill, I do a lot of work with partnerships that are not working out, and one partner’s going to buy the other out, and they just couldn’t agree on stuff. And one of the issues that comes up often is simple governance, right? Who has the right to sign that check? Who has the right to make a distribution? Who has the right to take out that loan or repay a loan? That sort of thing.

Mike Blake: [00:38:57] And historically, companies, just for expediency, have had to give one shareholder kind of the keys to the kingdom, and hope that obey the rules and do the right thing, because trying to put two or three signatures in the same check, and get everybody in the same room, and the technology is not there to do that in a very real way. But it occurs to me, of cryptocurrency, where, literally, all you have to do is everybody just kind of put their thumbprints on the phone to authorize a transaction or not authorize a transaction, could actually be a fantastic governance tool.

Daren Hebold: [00:39:34] Absolutely. You nailed it. So, you’re able to take what was an informal governance plan, like the two dudes have to both sign all checks over five grand, well, that’s not enforceable and it’s impossible to-

Mike Blake: [00:39:49] Hard to implement in practice, for sure.

Daren Hebold: [00:39:50] Yeah. Whereas, with cryptocurrency, you can strictly enforce all this with software. And that’s how I run my company. My partner and I require unanimous consent for all withdrawals, both fiat and crypto, and it’s just a fantastic advent. And yeah, and it applies not just to businesses, Mike, but I mean, I’m just thinking of, yeah, real estate transactions, with these lawyers, title agents, trustees, various adverse parties, just things where you need an absolutely objective and bulletproof governance, you can implement that without trouble. It’s built right in to the Bitcoin blockchain functionality. You don’t need to be a software programmer. That functionality is built in.

Mike Blake: [00:40:40] Can you think of a kind of business that shouldn’t be fooling with cryptocurrency? Is there somebody that, yeah, this isn’t for you?

Daren Hebold: [00:40:48] Yeah, it’s interesting. I mean, both individually and corporately, you probably have to have some risk tolerance. You probably have to have a longer view on your treasury assets. And you probably—yeah, I’d say those are the two major factors. And so, for a very, very conservative person or company, it might not tick the boxes. It might not work. I’d say that, and as I’m saying that, though, like mass mutual insurance, one of the most conservative companies I can think of, bought $100 million of Bitcoin to put on their balance sheet.

Daren Hebold: [00:41:31] And that news came out maybe a year-and-a-half ago, and you can see the transaction on bitcointreasuries.org. And so, I said, why would a hyper conservative insurance company do something like that? And it turns out they did it to buttress some of their negative yielding bonds, actually, so they saw it as a partial solution to bolster their profitability over time.

Mike Blake: [00:41:59] So, I’m going to ask you to put on your fortune teller costume for a minute, because I think the future of cryptocurrency is really interesting, and I would argue it’s sort of an inflection point. And one of the things I’d like you to opine on is, do you see cryptocurrency ultimately replacing conventional national currencies, or do they find a way to co-exist?

Daren Hebold: [00:42:26] Wow. That’s a fantastic question. Look no further than Central America, which is becoming the cradle of governments adopting Bitcoin as national legal tender, and look at the reasons for that. They are forced to either use the dollar, which is experiencing significant inflation, but they’re not experiencing any of the benefits of like the Joe Biden airdrop monies, the cheap debt, the COVID rent relief checks, the PPP, they don’t get any of those benefits, but they have to suffer the indignity of the high inflation of the dollar, and they say, no more.

Daren Hebold: [00:43:12] We’re adopting Bitcoin in El Salvador, and Panama, in Mexico. This is the roster of countries moving forward for that reason, and that train didn’t stop at any time soon. And I think absolutely, you’re going to see them coexist, much to the chagrin of the IMF, who comes out with heavy-handed penalizing statements each time a country decides to do this. And so, that tells you it’s good. It tells you that the country did the right thing by increasing their options for their citizens, which, that makes the IMF mad when citizens have options.

Mike Blake: [00:43:52] Well, Reggie Jackson is famous for saying, they don’t boo nobodies.

Daren Hebold: [00:43:57] Yeah, you got it. Yeah. So, crystal ball, yeah, you’re going to see it being a permissible legal tender in increasingly more countries. In so doing that, it’s no longer subject to capital gains tax in whatever country does that. You’re going to see retailers accepting cryptos. You’re going to see hybrid neobanks and financial service firms, such as mine, appearing. Legacy banks are just, in no way, going to adapt and build infrastructure for this.

Daren Hebold: [00:44:37] It’s just not happening and I don’t think it is going to happen. They will make desperate attempts to pay consultants to bolt things on, but I think you’re going to see a whole new industry of neobanks, cryptobanks, and crypto financial service providers, such as us, providing all financial services in the future, including allowing you to become your own bank, your own lender. You’ll be able to deposit your paycheck, invest in cryptos, take out a loan against those cryptos, convert back, all seamlessly within one app.

Mike Blake: [00:45:15] Some countries have said that they’re exploring launching digital currencies. The US has talked about it. I think Sweden, to my recollection, is probably the most advanced in their thinking on this. I think they’re beta-testing an e-krona at this point. I don’t know if you’re familiar with them, but if you are, are those in the cryptocurrency family, or are they kind of something different?

Daren Hebold: [00:45:44] Stay away from Central Bank digital currencies, yeah. They’re a tool of control and manipulation. They’re most popular among communist governments, namely People’s Republic of China has started the digital one program. And I can get into all of the very unfortunate attributes that the users of that currency suffer, but I will say this, it’s not a cryptocurrency. It’s a centralized database, and it is not a public ledger. It is not a consensus-based protocol, where people can democratically vote and get involved. Absolutely not. It’s an enhanced layer of control for central banks to administer their debt-based fiat currencies. So, that’s my stern warning against these, yeah.

Mike Blake: [00:46:47] Okay. I’m talking with Daren Hebold, and the topic is, should I integrate cryptocurrency into my business? Keeping you in your fortuneteller’s costume, what is it—and you may or may not agree with the premise, I don’t think cryptocurrency is quite mainstream yet. I think it’s close, but I’m not sure I would characterize it as mainstream yet, simply because I can’t go to Kroger yet and pay for groceries with cryptocurrency. So, that would be kind of cool. So, what do you think it’s going to take? Is it just gradual adoption? Is there a day of reckoning or an inflection point? What is it going to take when we’re going to recognize cryptocurrency as a mainstream medium of exchange and storage of wealth?

Daren Hebold: [00:47:34] Yeah, you got it. We’re not far. Money requires adoption, use, portability over time and space, durability, yeah, store of value, medium of exchange. And we are moving up that adoption curve rapidly as almost a one—I think it’s just over a $1 trillion market cap of all cryptos, the vast majority of that value being Bitcoin, specifically. More to the heart of your question, we, in the industry, believe that there could be a seminal moment coming, where as traditional assets classes continue to burn down in value, we strongly believe there’s a likelihood Bitcoin can serve as an ultimate hedge.

Daren Hebold: [00:48:30] Now, that’s yet to be proven, because everybody’s saying that’s correlated with the stock market, et cetera, but we see a seminal moment when there is the next Lehman Brothers moment of this era. We think Bitcoin is going to play a crucial role in preserving, enhancing value during said crisis, and that might not be that far away. We’ve got a lot of people out there talking about Lehman Brother-type analogies with modern day companies these days.

Mike Blake: [00:49:02] So, if someone listening to this podcast is on board, they believe the thesis that like, yeah, cryptocurrency got to start doing it, how does someone get started? How do you dip your toe? How do you open the door?

Daren Hebold: [00:49:16] You got it. Alright. Good question. So, we recommend starting small. So, anybody considering investing in Bitcoin, I would start with that coin. It’s probably the most reliable over time. Buy small amounts weekly, monthly, over time, recurring basis, you’ll be able to dollar cost average in that way. You can come to an exchange either online, but you’ll have to help yourself and figure it all out yourself in that regard, or you can come to an in-person, over-the-counter concierge exchange like my firm, for example.

Daren Hebold: [00:49:50] I’m one of just a handful in the country that does this, where you can walk or phone in LUXOLO Financial here in Portland, Maine, right on Marginal Way, or phone in, and we will walk you through the process of setting up a wallet, and funding your exchange transaction, either on a one-time or a recurring basis. And one of the wealthiest persons I know, you’re going to like this, in 2016, he started buying $21 a day of Bitcoin, and he hasn’t let up, and he’s a millionaire right now.

Daren Hebold: [00:50:28] So, I think that’s a pretty reasonable investment, and there are people who can afford to sink a lot more than that into it. So, give it a try. I think you’ll be thrilled with how it functions and how it can be used as collateral for lending, and money, for purchases. And there’s quite a lot of good people working in the industry. It’s a lot of fun.

Mike Blake: [00:50:54] Daren, it’s been a great conversation, but unfortunately, we’re running out of time. There are probably topics that our listeners would have wanted me to cover, but we didn’t or wish we would have spent more time on. If somebody wants to contact you for more information about how to integrate cryptocurrency into their business, can they contact you to follow up with questions, and if so, what’s the best way to do that?

Daren Hebold: [00:51:15] Thank you. Yes. Whether it’s me or one of my skillful team members, yeah, please do reach out to us with no obligation here at LUXOLO Financial. The website’s luxolo, L-U-X-O-L-O, .io, and you can either telephone us, email us, or chat with us on a little chat on our screen website there, and we’ll be happy to lay out some options, and see if it’s a match for you.

Mike Blake: [00:51:47] And that’s going to wrap it up for today’s program. I’d like to thank Daren Hebold so much for sharing his expertise with us. We’ll be exploring a new topic each week, so please tune in, so that when you’re faced with your next business decision, you have clear vision when making it.

Mike Blake: [00:52:00] If you enjoy these podcasts, please consider leaving a review with your favorite podcast aggregator. It helps people find us so that we can help them. If you would like to engage with me on social media with my Chart of the Day and other content, I’m on LinkedIn as myself and @unblakeable on Facebook, Twitter, Clubhouse, and Instagram. Also, check out my LinkedIn group called Unblakeable’s Group That Doesn’t Suck. Once again, this is Mike Blake, our sponsor is Brady Ware & Company, and this has been the Decision Vision podcast.

 

Decision Vision Episode 169: Should I Have My Business Valued Every Year? – An Interview with Doug Marshall, Marshall+Viliesis, LLC

May 19, 2022 by John Ray

Doug Marshall

Decision Vision Episode 169: Should I Have My Business Valued Every Year? – An Interview with Doug Marshall, Marshall+Viliesis, LLC

Doug Marshall, Partner at Marshall+Viliesis, LLC, joined host Mike Blake to cover the process of having a business valuation done, and whether doing a valuation every year is advisable. They discussed the factors which impact a business’s value, ways it can be valued, reasons to do it annually, whether it should be done in-house or independently, and much more.

Decision Vision is presented by Brady Ware & Company and produced by the North Fulton studio of Business RadioX®.

Marshall+Viliesis, LLC

Marshall+Viliesis, LLC is a firm dedicated to helping owners Value & Protect their largest and most important asset.

Business Value Protection Planning™ is a proprietary system developed by Marshall+Viliesis to help owners through the planning process with speed and accuracy. It guides them through the four critical areas of Succession, Retirement, Estate and Key Stakeholder. Planning.

Starting with a valuation Business Value Protection Planning™ has the ultimate goal of planning which is Current, Complete and Coordinated. Business owners think differently than the wealthy affluent and deserve a better planning experience designed for them.

Company website | LinkedIn

Doug Marshall, Founding Partner, Marshall+Viliesis, LLC

Doug Marshall, Founding Partner, Marshall+Viliesis, LLC

Doug Marshall is a founding partner at Marshall+Viliesis, LLC. He is focused on helping owners get the planning they deserve to protect the wealth, income, and legacy of their business.

Along with his partner Peter Viliesis he created Business Value Protection Planning™, a system designed to deliver planning that starts with a valuation of the business. Knowing the current value of a business helps an owner make better decisions for the business. It helps the owner make better decisions for growth, decisions for protecting the business value, and decisions to help unlock business value.

Previously Doug has worked with Nationwide, Manulife/John Hancock in the Corporate Products division where he developed and marketed Corporate-Owned and Bank-Owned Life Products. He has been associated with Penn Mutual on the brokerage side as well.

He is located in Seattle Washington where the state is home to over 400 Craft Breweries. Much of his focus is working with Brewery Owners, a fascinating manufacturing industry. If you are ever in Seattle he will be more than happy to take you on a tour!

LinkedIn

Mike Blake, Brady Ware & Company

Mike Blake, Host of the “Decision Vision” podcast series

Michael Blake is the host of the Decision Vision podcast series and a Director of Brady Ware & Company. Mike specializes in the valuation of intellectual property-driven firms, such as software firms, aerospace firms, and professional services firms, most frequently in the capacity as a transaction advisor, helping clients obtain great outcomes from complex transaction opportunities. He is also a specialist in the appraisal of intellectual properties as stand-alone assets, such as software, trade secrets, and patents.

Mike has been a full-time business appraiser for 13 years with public accounting firms, boutique business appraisal firms, and an owner of his own firm. Prior to that, he spent 8 years in venture capital and investment banking, including transactions in the U.S., Israel, Russia, Ukraine, and Belarus.

LinkedIn | Facebook | Twitter | Instagram

Brady Ware & Company

Brady Ware & Company is a regional full-service accounting and advisory firm which helps businesses and entrepreneurs make visions a reality. Brady Ware services clients nationally from its offices in Alpharetta, GA; Columbus and Dayton, OH; and Richmond, IN. The firm is growth-minded, committed to the regions in which they operate, and most importantly, they make significant investments in their people and service offerings to meet the changing financial needs of those they are privileged to serve. The firm is dedicated to providing results that make a difference for its clients.

Decision Vision Podcast Series

Decision Vision is a podcast covering topics and issues facing small business owners and connecting them with solutions from leading experts. This series is presented by Brady Ware & Company. If you are a decision-maker for a small business, we’d love to hear from you. Contact us at decisionvision@bradyware.com and make sure to listen to every Thursday to the Decision Vision podcast.

Past episodes of Decision Vision can be found at decisionvisionpodcast.com. Decision Vision is produced by John Ray and the North Fulton studio of Business RadioX®.

Connect with Brady Ware & Company:

Website | LinkedIn | Facebook | Twitter | Instagram

TRANSCRIPT

Intro: [00:00:02] Welcome to Decision Vision, a podcast series focusing on critical business decisions. Brought to you by Brady Ware & Company. Brady Ware is a regional, full-service accounting and advisory firm that helps businesses and entrepreneurs make visions a reality.

Mike Blake: [00:00:21] Welcome to Decision Vision, a podcast giving you, the listener, clear vision to make great decisions. In each episode, we discuss the process of decision making on a different topic from the business owners or executives’ perspective. We aren’t necessarily telling you what to do, but we can put you in a position to make an informed decision on your own and understand when you might need help along the way.

Mike Blake: [00:00:42] My name is Mike Blake, and I’m your host for today’s program. I’m the Managing Partner of Brady Ware Arpeggio, a data-driven management consultancy, which brings clarity to owners and managers of unique businesses facing unique strategic decisions. Our parent, Brady Ware & Company is sponsoring this podcast. Brady Ware is a public accounting firm with offices in Dayton, Ohio; Alpharetta, Georgia; Columbus, Ohio; and Richmond, Indiana.

Mike Blake: [00:01:07] If you’d like to engage with me on social media with my Chart of the Day and other content, I’m on LinkedIn as myself and @unblakeable on Facebook, Twitter, Clubhouse, and Instagram. I also recently launched a new LinkedIn group called Unblakeable’s Group That Doesn’t Suck, so please join that as well if you would like to engage.

Mike Blake: [00:01:25] Today’s topic is should I have my business valued every year? And this is a topic that I have avoided. It has been suggested to me that I really should be doing more valuation stuff, because at least nominally, that’s the field that I’m in. But to be perfectly candid, I’ve been reluctant to do it, because I didn’t know how to do it in a way that just wasn’t completely self-serving. And those of you who know this podcast, who have hung around and listened to a few of these, you know that I have no interest in turning this thing into an infomercial.

Mike Blake: [00:02:04] We put information out there that we hope and believe is useful to our audience. We bring experts on that can talk about the topic and just sort of let it go at that. But the fact of the matter is that valuation of a business is important, and it’s important for a lot of reasons, whether you’re thinking of selling your business, you’re positioning it to be transferred to a family member or somebody else, there are tax planning implications, all kinds of reasons why you ought to know or at least have some idea as to the value of your business should you decide to sell it or another business should you decide to buy it.

Mike Blake: [00:02:49] But I didn’t want to get on here and basically just do a monologue, and again, be sort of Ron Popeil selling the Ronco Rotisserie Showtime grill, which, by the way, as an aside, is fantastic. I’ve had one for like 15 years. I got one as a Christmas present for my mother, and I thought, for sure, this is going to be one of these things that goes into the attic with like 25 years of fruitcake, but I’ll tell you, the damn thing works. It actually does make the best tasting chicken and turkey we’ve ever had. So, they’re not a sponsor of the show, and as far as I know, Mr. Popeil, I actually think, passed away about 10 years ago. But anyway, that’s a sort of an aside there. If you’re thinking of getting one, go ahead and get one, because I think they’re pretty neat.

Mike Blake: [00:03:34] So, helping me out here to make sure that this isn’t an infomercial, and frankly, just to sort of keep me in line is my friend joining us from Washington State, Doug Marshall, who is a founding partner in Marshall|Viliesis, LLC. He’s focused on helping owners get the planning they deserve to protect the wealth, income, and legacy of their business. Along with his partner, Peter Viliesis, he created Business Value Protection Planning, a system designed to deliver planning that starts the valuation of a business.

Mike Blake: [00:04:03] Knowing the current value of a business helps an owner make better decisions for the business and helps the owner make better decisions for growth, for protecting the business value and decisions to help unlock business value. And I think that second part is very important and is very overlooked, especially when times are good, but protecting value is so important, and I think that it’s not as sexy as growth or profit, but, boy, building resilience into your business, or as Nicholas Taleb would say, antifragility into your business, I think that it is an incredibly important concept that maybe we’ll dive more deeply in another show.

Mike Blake: [00:04:48] Previously, Doug has worked with Nationwide Manulife John Hancock in the Corporate Products Division, where he developed and marketed corporate-owned and bank-owned life products. He has been associated with Penn Mutual on the brokerage side as well. He’s located in Seattle, Washington, with a status home to over 400 craft breweries. Much of his focus is working with brewery owners, a fascinating manufacturing industry. That’s something that we have a guy in our practice who owns Sizemore, does a bunch of as well. If you’re ever in Seattle, he’ll be more than happy to take you on a tour. So, with that, I’d like to welcome Doug Marshall to the Decision Vision podcast.

Doug Marshall: [00:05:25] Thank you, Michael. It’s a pleasure to be here. Really appreciate the opportunity.

Mike Blake: [00:05:30] So, explain to our list, and of course, I know the answer to this question, but most of our listeners don’t, what is a business valuation?

Doug Marshall: [00:05:41] Well, it doesn’t come with a set of steak knives, so we definitely are not doing an infomercial here. But I think that most business owners have a notional value of what their business is worth, because they talk to other business owners, right? Yet, at the same time, very few go through the formal process of getting a valuation, of having somebody take all of their financial data, look at what the business is expected to do over the next few years, and come up with a number that says, this is what your business is worth, and having that knowledge is rather important.

Doug Marshall: [00:06:23] So, in your practice, in my practice, what we will do when we’re working with the business owner is we’ll collect three, maybe five years of historical financial data. We’ll do an interview and we’ll find out what the business owner is about and what’s going on with the business, and we’ll do a projection of what the expected cash flows are to be, and we’ll come up with a number.

Doug Marshall: [00:06:46] And there are a number of different valuation numbers. There’s equity value, and I don’t expect that we’ll go into all of this detail now, but there’s equity value, asset sale value, enterprise value, liquidation value, book value. So, there are a number of different measures and a number of different ways to look at the value of a business, but it’s important for an owner to know. Did I answer the question alright for what we wanted to do?

Mike Blake: [00:07:10] Well, I think so. So, at the end of the day, evaluation, it sounds like, is a third-party, and I think importantly, an independent view as to what the business is, at least, ostensibly worth. Let me ask this. I’m very curious to get your view on this. In your experience, do you think that more business owners are likely to think their business is more than it’s actually worth, what it would likely sell for, or less than what it would likely sell for? In other words, are business owners too optimistic or too pessimistic?

Doug Marshall: [00:07:50] I think it’s 50-50, and I think it also depends on their mood. They could have come off a crappy week, and they could say, well, I’m not that optimistic that anybody’s interested in my business, I don’t know how to transfer it, my kids aren’t interested in it. So, they don’t really know. And then, they’ll be with their buddies. I mean, business owners tend to hang with business owners, and I know this is true in the brewery business, but they’ll say, my business is worth a certain multiple of earnings or EBITDA and there will be this rule of thumb in there, but it’s not necessarily what their business is worth, and I also want to make sure that everybody understands that I can value a business for $10 million and it sells for $13 million, but that was kind of a strategic purchase, possibly.

Doug Marshall: [00:08:42] So, just because I come up with a range of value, you come up with a range of value doesn’t mean that that’s what the business is going to sell for. So, ultimately, if somebody’s looking to sell a business, which is usually why people think that they should get a valuation, they’re in a position where they may or may not get that number, but I think it’s all over the map.

Mike Blake: [00:09:05] Yeah. And I think that that point is very important, in that defining value is actually deceptively hard. And Warren Buffett would say where price is what you pay, value is what you get, we know the technical definitions of value in terms of buying and willing informed seller and buyer, and the fact of the matter is that most of the time, an asset, particularly if it’s not on a liquid public market, an asset trades for, it’s something that can be quite far from what you and I might say is fair value, and that’s because the markets aren’t all that efficient.

Doug Marshall: [00:09:51] Right. Because it’s very limited and people don’t really pay attention to that, but you also might be a minority shareholder, so your value is less. You might not have marketability of your stock, so your value is less. You might have controlling interest, so your value is more. Yeah, but lack of marketability really creates a problem to get a true value for an owner. That’s why I think it’s so important to know the value well in advance of any event that takes place so that you’re not caught off guard.

Mike Blake: [00:10:23] Now, in your practice, what is involved in a business valuation? You talked about reviewing and analyzing historical financial data up to five years, but I imagine it’s much more than that. Can you share with our audience kind of what other processes and procedures enter into a business valuation process?

Doug Marshall: [00:10:45] Well, I know that we’re going to get to this question later, but predominantly, I’m using an online algorithmic system called BizEquity. And the reason for that is that I’m trying to not have the valuation process get in the way of the answer that the business owner really, really needs. And that is approximately, how much is my business worth? And this is well in advance of when they’re looking to sell it, so that the business owner can put in three years of financial data, we can do some projections out, and we come up with a report that will give them insight into the different valuation numbers for them.

Doug Marshall: [00:11:22] And it’s important to know, because if you’re going to do a buy-sell agreement with a partner, you want to know that that business is approximately worth seven-and-a-half million dollars, and you want to know that if I need to buy out my partner, it’s going to cost me three-and-a-half, if that’s what we agreed to. So, our process is relatively simple, because we want fast, inexpensive, and non-intrusive.

Doug Marshall: [00:11:51] Typically, and a lot of the work that you do, Mike, entails a lot of time and a lot of expense, and you’re worth it, but that’s because you’re trying to grind down the numbers so that you can support it legally from a tax standpoint, or you might have a litigation matter, or you’re doing something that’s highly subjective, saying, I don’t know what the future holds, so here’s this range, if anybody knows about your practice and the things that you do.

Doug Marshall: [00:12:20] I think one of the primary reasons, that I think there are two primary reasons why business owners don’t typically get a valuation. And the first reason is time and expense. It’s just like, it’s too much time, and owners, they have drive and discipline to grow their business, they’re not looking to spend time doing this other stuff that’s not directly growing their business. And to be quite honest, since more than 90% don’t keep valuations current, 90% of business owners don’t keep valuations current, business has gotten along fine without having formal valuations done on a regular basis, right? I mean, it’s not like we’re seeing businesses collapse, because they haven’t done these valuations.

Doug Marshall: [00:13:02] You know what I mean? If they need valuations to succeed, the business would be thriving and we’d have more than 10,000 professionals doing valuations throughout the country, but that’s not the case. So, normally, and I think owners also think that the only time that I really need a valuation is when I’m contemplating doing something like a gifting program, which that’s required. Like if I’m going to sue somebody, that might be required. If I’m going to transfer ownership, that’s going to be required. So, they’re only doing it when they’re required to do it, and I think having that knowledge well in advance makes a lot of sense for them, though.

Mike Blake: [00:13:39] And you mentioned the reasons why business owners don’t do valuations, I actually think there’s a third, and I’d love to get your view on it, and that is that I think that our profession has a little bit of a credibility problem. I think that, and for some reason, our profession largely is kind of okay with this. I think we have too much of a sense of humor about it, but I think we’re too willing to cave in to the argument that value is what somebody is willing to pay for it, which I’m not going to off-ramp onto that.

Mike Blake: [00:14:13] There’s a Freudian slip there, because I could easily rant on that for an hour, but I do think that a lot of people don’t know that there are people who do what we do, and I think our profession, frankly, has done a poor job of explaining to people, to the public what goes into a business valuation or appraisal, and I think there’s a distinction there that you’re kind of illustrating very nicely, actually. And I think that our profession hasn’t done enough to say, look, actually, there is some method to the madness here, really isn’t just shaking a magic eight ball, but there is some rigor that can lead you to make better decisions if you allow it.

Doug Marshall: [00:15:03] Oh, by all means. I always talked to owners about if an unexpected opportunity comes along, how are you going to measure that opportunity if you don’t really know the value of your business, for your business? Is that going to positively or negatively impact the value of my business? And should I be keeping—sometimes, what we’ll do with owners is we’ll do what ifs.

Doug Marshall: [00:15:28] We’ll say if you change this cash flow, if you reduce this expense, if you add this payroll, how much additional revenue is that going to create? How much risk is that creating for you, the owner? How much opportunity is that creating for you with growing your wealth? And you have to be really careful with the business, because you mentioned this before, it’s an illiquid and concentrated asset, it’s unlike anything else that somebody owns on the personal side, and that creates a lot more risk. So, knowing the value does make a lot of sense.

Mike Blake: [00:16:05] So, we touched on it, but I want to make sure we hit this clearly, because I think it’s central to the conversation, and that is, what exactly are the reasons why a company would want to have a valuation of their business done on a regular basis, whether it’s annually, semi-annually, biannually? What are the reasons for that?

Doug Marshall: [00:16:27] Yeah. Even if the business is not growing, it’s just pretty steady in sales, it’s doing $10 million of sales a year, its expenses remain relatively the same, I think just the very discipline of going through the process and establishing the value for the business, which might have a little bit of variation because of external factors, the economic climate and interest rates, of course, but just being able to show that this is something you were paying attention to, I mean, it’s not too different from showing that you’ve got good books and you can account for the money over the past 5 to 10 years.

Doug Marshall: [00:17:06] That shows that you are a disciplined business person and that your business has some value based on that. You want to show that you are a well-run business. So, knowing the value also puts you in that position of just being able to make better decisions on a regular basis, and then you also understand what drives the value. Very often, we will talk about, okay, what’s your equity value and what’s your liquidation value?

Doug Marshall: [00:17:33] I think those are two important numbers for a business owner to understand when it comes to protecting the value of your business, and this is a practical matter. So, your business value might be worth $10 million as a going concern, but only 2 or $3 million if you just have to shut the doors, because you haven’t done any proper planning or you become illiquid. So, that’s the amount that’s at risk, and I think facing that risk every year motivates someone to do some planning to make sure that that’s protected.

Doug Marshall: [00:18:05] Our buddy, Chris Mercer, he talks about the 1% solution, and he talks about, you should take 1%, or thereabouts, 1% of the value of your business and carve that off as a budgeted item to pay for your attorneys, and your CPAs, and your wealth advisors, your insurance people to make sure that you are doing the planning that is protecting the wealth, helping to unlock that wealth, ultimately, of that business, and not pay more taxes. There are all sorts of ways in which you can lose money in the ultimate transaction of transferring the value, because you’re paying too much in taxes, you’re not getting as much as you should for the business, because you were disorganized in the process and you haven’t positioned the business correctly to be sold.

Mike Blake: [00:18:58] And I think one of the things you said is really smart, which is I think that in a valuation process, the why is much more important, or at least as important, but I would argue more important than the what. We’re giving you numbers in round figures—giving a client a number, I should say, your business is worth $1,000,000, the end. I mean, yeah, that’s nice, but on the other hand, your business is worth $1,000,000, but it could be worth more, because of these five—if you do these five things, which, by the way, some of them may not be very hard to do at all. That’s easily worth a multiple of the fees that were invested in the valuation in the first place.

Doug Marshall: [00:19:40] Exactly.

Mike Blake: [00:19:42] So, let me get to some of the mechanics here. I think for many people, especially if they’re approaching business valuation for the first time and they may or may not have heard of people like us that do this for a living, they probably will turn to their CPA first. And there’s a rationale to it, right? They’re financially oriented. Some CPAs are, in fact, professional business appraisers or valuation analysts. Some do it a lot, some dabble. And of course, there’s an institutional knowledge of the company, most likely, at least for some period of time. Should the first place or should a company just sort of default to turning to their CPA to do the valuation of the company for them?

Doug Marshall: [00:20:34] Well, one, if the CPA does have experience in doing valuations and has really taken the time to learn how to do it, I would say, sure, that’s not a bad place to turn, yet at the same time, I think getting a secondary objective opinion on the value of the business, the range of value on the business does make sense. Another difficult thing, and this is nothing against the CPA profession, but they’re very seasonal. And so, they go through seasons where they are 100% unavailable because of the workload. And then, there are other times when they’re available. So, it’s not really in their business model to be doing valuations. And in your firm, I mean, you’re not doing tax work anymore, right?

Mike Blake: [00:21:25] No, I never was.

Doug Marshall: [00:21:29] And Owen, so I mean, you have a different side. So, I wouldn’t object to a CPA firm that had a valuation arm in it, I don’t think that’s a problem, but here has to be that relationship and there has to be experience in doing valuations for the particular type of industries, right? So, if you’ve never done a brewery before, you’ve got a learning curve as a valuator.

Mike Blake: [00:21:56] Now, what if the company is large enough that they have a CFO or a controller, is it a good idea maybe to say, hey, you’re a CFO, I’m paying you to do finance stuff, you tell me what the business is worth?

Doug Marshall: [00:22:10] Mm-hmm. I mean, once again, they can give you a general version, the idea of what the business is worth, but then you have to look at, what is the level of objectivity here? I don’t want, as the CPA, to be the person who should be telling the owner, that you think it’s worth 20, but it’s really worth 15. I’m not sure I really want to be put in that position. And then, with people in value, people that do valuations full time, even they’re going to come with their certain set of—they’re going to have bias in how valuation should be done. They’re going to have bias toward industry.

Doug Marshall: [00:22:52] And there are the human factors that you want to get as much out of the human factor as possible. If I wake up on Monday morning and start evaluation and I did not have a very good weekend, that might color my world a little bit to where my process is going to be different. And I think the same thing can happen to a CFO, so it’s better to have somebody to come in and do something objective. I don’t think having your CFO give an estimate is a bad idea, but I also wouldn’t take the CFO off of CFO type of stuff to go through a full-blown valuation, because that is going to take time.

Mike Blake: [00:23:39] And you mentioned something that I think is really important, and that is the independence. In the CPA example, can you really trust your CPA to tell you that your baby is ugly, or are they going to be a little concerned that in doing that, that the fees for their other services might be in jeopardy, or the CFO might be concerned that his or her job might be imperiled if you come back and say, your baby is ugly, this company isn’t really worth very much?

Mike Blake: [00:24:16] And candidly, that’s something that I address here at Brady Ware. When we receive an internal referral from an existing client, one of the first questions I—the first question I ask is, is there any scenario under which the answer that we come up with would make the client mad at us? And if the answer is yes or even if it’s supposedly infinitesimally small, and it probably isn’t, it’s probably bigger than we think it is, then even I’ll refer it out, because it’s just not worth it.

Doug Marshall: [00:24:52] I hear you on that. And I’m not trying to be self-serving for the two of us saying, you shouldn’t use your CPA, you shouldn’t use your CFO, I’m saying, as is good practice, there’s a lot of reasons to look outside to get that information.

Mike Blake: [00:25:08] So, I think the most common or maybe most accessible thesis for this is to have a valuation done annually, because you’re in a mode now where this might be the year that you’re going to sell, either you just decide that you want to throw it in, or this is the year that somebody calls you on the phone and makes an offer that you don’t hang up on them on. Are there other reasons to do it annually other than just be ready for a proposal to sell?

Doug Marshall: [00:25:40] I think it’s going to be easier if you do it on an annual basis. It might not be as costly, because a lot of the information is already there, and you just have to check and see what has changed. I think the habit of it is going to make it easier if you do it every five years. It’s like, you might say, ah, we can wait another year. But doing it every year probably makes the most sense, because then, I can quickly look at a company’s financials, and say, not much has changed here, so we’re probably not going to come up with too far of a different result, but it’s good to know.

Doug Marshall: [00:26:16] And I also might want to ask, why haven’t you grown, or why did your sales fall off, or why did your expenses go higher? What’s really fascinating about a valuation is that when you look at your accounting statements, your cash flow, your net cash flow statement, your gross revenue, your balance sheet, you can kind of pick and choose what numbers you focus in on to make yourself feel better as a business owner, and we’re just human, right? But the valuation puts together all of that stuff and comes out with one number. So, it throws it all in the mix, does all the calculations, looks at the future cash flow, and it acts as a barometer. So, it doesn’t allow the owner to kind of cheat themselves by telling them a story that’s not necessarily true.

Mike Blake: [00:27:12] And you touched on something that I think is worth pausing on for a minute, which is, again, the why, and even if your business likely has remained static in value over a year or two years, whatever, in the financial markets, they have a concept called performance attribution, and I think that applies here as well, in that why the business value has changed or not changed I think is important. Is it because you did something great or not as great, or some function of your company did something great or not as great, or were you bailed out by or were you hurt by simple market movements? And that’s just something that’s environmental and it doesn’t necessarily mean that you did anything right or wrong.

Doug Marshall: [00:28:08] Mm-hmm. And I’ve had owners that have said, “How much cash should I leave in my business?” And I don’t have a specific answer for them, but they say, “If I leave this million, how does that impact the value, as opposed to taking out 750,000?” We can do a quick calculation, so they can see what happens there, and then we can kind of talk about, does it make sense to leave it in the company or take it out of the company and redeploy it in other ways? So, there are forensic things that you can do and pro forma things that you can do in valuation to do what ifs, which helps in planning for future events.

Mike Blake: [00:28:51] Now, as you’ve touched upon, sometimes, companies will need to engage a valuation or an appraisal for something that is compliance-related. It could be for a gifting event, could be for, I don’t know, stock options, 83(b) elections, something having to do with gap, take your pick. Can a client simply take a document like that or a valuation, and then rely on that as the same document for strategic positioning?

Doug Marshall: [00:29:23] Yes and no, and I don’t want to be elusive on that because every valuation has a purpose and a goal. So, if you are doing something for a state planning purposes and gifting purposes, you might want to have to be able to justify a certain value for that gifting program. That might not be the same value that you would want if you were going to go sell the company or you are going to make a strategic decision. So, I mean, the number shouldn’t be that far off, but you have to keep in mind that if you had a different purpose for the valuation, the numbers might be a little bit different.

Mike Blake: [00:30:05] Now, our term of art that we use is something you and I, meaning, and others like us is we apply what’s called a standard of value, which really just means. It’s a definition of value or a context of value. And of course, for most tax things, it’s fair market value. For most accounting things and some litigation, it’s fair value. For transactional work, it might be something called investment value or synergistic value. But when we’re talking about having a valuation done as a strategic planning document, what standard or definition of value do you typically recommend, and why?

Doug Marshall: [00:30:46] I am more going toward the neutral fair market value, because there’s a lot less baked in. Now, I mean, now, what you can do from there is you can say from the fair market value, if the valuation is 10 million, maybe there is a strategic play out there that’s 15 million, but it’s only that 15 million because there’s somebody on the other side that has a different motivation than you do possibly for keeping it.

Doug Marshall: [00:30:46] So, I just kind of stick with the fair market value, because that’s the basic. I also think that one important point that we need to keep in mind is that since there are these different standards of value in a buy-sell agreement, now, this is going a little bit off the beaten path, it is important in your legal documents to establish which standard of value you’re going to use, because those numbers can be widely varied. And if you have not defined those things, then we start to get into the litigation process between business partners, and that’s one thing that we want to avoid by doing the valuations every year.

Doug Marshall: [00:32:06] Chris Mercer talks about having a single appraiser do a—select the appraiser at the beginning of the year, value the business at the beginning of the year, and all of the partners, if there are multiple owners, agree what the price would be for a buy-sell, what the price would be if somebody wanted to get out, rather than waiting for the event, going through the process of hiring an appraiser at that point in time, and then having them come up with a number that’s a complete surprise. So, being proactive on the valuation side definitely makes a lot of sense.

Mike Blake: [00:32:43] Yeah. Let’s pause on that, and for the record, I’m a big fan of Chris Mercer’s work on that. I’ve had his book in my library for years. I’ve expanded a little bit upon what he’s written, at least in that edition, but it really is an outstanding book. And I agree, if you can agree on a single appraiser and get rid of these sort of dueling appraiser things, processes, I think that’s really a fantastic way to go. But interestingly, you bring up a scenario that I have not encountered as much, I haven’t thought of as much, frankly, and that is the business partner scenario.

Mike Blake: [00:33:23] And I want to pause on that because I’ve done my share, I’m working on my share of resolving buy-sell agreements, and as I think through a lot of those assignments, boy, a lot of them could have been resolved much more easily had there simply been a trusted party by both or more, by all stakeholders involved to perform an independent appraisal, and then that number is just sort of there, as opposed to waiting. And then, like you said, the surprise that when you get a surprise valuation that you don’t like, that’s when the next call is to the lawyers, then you’re off to the races.

Doug Marshall: [00:34:01] And now, you’re talking significant money. So, I mean, you and I own a business for $5 million. We agree that the price is 5 million. If something happens to you, I agree to buy out your spouse for two-and-a-half, and if something happens to me, you agree to buy my portion out for two-and-one-half million dollars. And so, we each have to ask ourselves the question, am I satisfied with getting two-and-a-half or having my estate get two-and-a-half million, and am I satisfied with having to pay out two-and-a-half million? But I’m dealing with that ahead of time, rather than at the time that the event occurs.

Doug Marshall: [00:34:37] So, we can—and you and I might decide, well, that’s going to be a little too rich for our blood. I constantly run into owners that do have that situation to say, “Man, our business grew fast, but I don’t think that I have the liquidity to buy out my partner.” And now, they have to plan for, what can we do? And they might structure their buyout over a period of time, because it’s going to take them a period of time. And you can go back and look at the controlling documents and save people a lot of pain if they know what the dollar number is going to be.

Mike Blake: [00:35:18] Yeah. And I also think that perhaps having an independent appraisal done or valuation done regularly on a partnership like that eliminates or greatly reduces partner arbitrage. And what I mean by that is I think, in particular, when you have buy-sell agreements that call for either a formula or a specific price at which a buyout would occur, eventually, it becomes clear to one party or the other that they would benefit very much from being on one side or the other of a buyout. And there’s at least a financial incentive, ethics aside, there’s a financial incentive to manipulate that buyout, because there’s a substantial financial benefit to you. With an independent valuation or appraisal, I think a lot of that goes away and provides for a more kind of transparent and ultimately harmonious partnership.

Doug Marshall: [00:36:24] 100% agree on that.

Mike Blake: [00:36:27] So, when you get the valuation done, who should have access to it? Right? There’s a document, a work product, usually, of some kind produced, who should have access to that?

Doug Marshall: [00:36:45] Well, I think all key stakeholders that are responsible for driving the company. And I mean, maybe that doesn’t go all the way down to the bottom, but anybody that should know and should understand that this is now being used as a strategic document to guide us forward into the future, they need to understand what that is, whether they are an owner or not. So, you could have several key people where the owner says, “I just did a valuation of my company and it’s $9 million, and my goal is to get it up to $15 million in a certain period of time, and we need to work toward that goal.” So, anybody who’s a key stakeholder in that fashion needs to understand, I think the attorney needs to understand, the accountant should have that information, family members should also have that information as well.

Mike Blake: [00:37:44] And probably, the owner’s wealth advisors as well, I would imagine.

Doug Marshall: [00:37:48] Yeah, I meant to say that. Yes, of course.

Mike Blake: [00:37:54] And that work product, is that something that the business owner should be walking these people through? Should the provider be walking people through it to make sure everybody understands? Because despite our best of intentions, some of these documents can be quite hard to read, especially if you don’t have a lot of economics and finance training. Should the owners sort of set aside time to make sure that they understand and all the other stakeholders understand them?

Doug Marshall: [00:38:30] I think it’s worth taking the time. I don’t necessarily think it is the owner’s responsibility to put that together. I don’t think it’s that hard to put together a two-page summary of the valuation, what was done, the conclusions that were drawn, and some of the major factors that influenced the valuation of that, and what it means. So, it shouldn’t be in Greek, in a difficult to explain language, but I don’t necessarily think it’s the owner’s responsibility to do that, maybe it would be the CFO’s responsibility if the company is large enough to have one.

Mike Blake: [00:39:08] Now, I don’t know if you’ve encountered this, but I encounter a number of people who already “know” at least the multiples for being paid for companies in their market. They may get that from industry associations. They may get it from bankers. They may get it from competitors who may or may not be lying to them. They may get on the golf course. With people like that. What do you say to people like that that think that they kind of know their market multiples? What’s the argument that they may want to have a valuation done anyway?

Doug Marshall: [00:39:47] Well, before I answer that question, I would say, if you’re a franchise, you probably have a pretty good idea based on how the franchise works, especially if it’s a large one. So, I think the rules of thumb multiples in those particular situations are fairly accurate. The problem that I have with general rule of thumb multiples is that they end up becoming a self-fulfilling prophecy, and that’s not good, because the valuation is still the economics of the company, how much cash flow is expected to generate, how much discretionary cash flow is available to the owner, and what’s the projected increase in the growth in that cash flow, and what’s the risk that that is not going to happen? Right?

Doug Marshall: [00:40:34] Those are the basics, right, Mike? And so, you could have a rule of thumb multiple that doesn’t make sense as it relates to the cash flow, because over time, that multiple has eroded into a self-fulfilling prophecy. And it may be to the detriment of the owner. It might say—the multiple might be telling the owner that your business is worth less, that your business is worth more. So, I think that the rule of thumb can be used after you understand the value of your company and you have something professionally done.

Mike Blake: [00:41:17] I’m talking with Doug Marshall on the topic, as should I have my business valued every year? One question I want to ask, I want to make explicit, we kind of danced around it, but I want to kind of nail it, and that is once you have a valuation in your hand, as a business owner or executive, what do you do with it? What are the next steps after you have that document?

Doug Marshall: [00:41:47] One, I would say, is, are you happy with the number? I might go to a business broker, and say, this is the valuation that I have, just in general terms, you think I could sell my company for that? That you could go to your attorney, your tax attorney, and say, hey, my business is worth this, is my estate plan in order based on the value of this business?

Doug Marshall: [00:42:19] You could go to your accountant, and say, hey, this is the value of my company, but I think that I could be a little bit more tax efficient, what could we be doing with that? So, I mean, anybody that’s going to help you make decisions about what to do for your personal planning and your business planning, you can use that document as something to stimulate some conversation and also give some insight into the conversation.

Mike Blake: [00:42:48] So, when we talk about an annual valuation, should it be treated as an update of an existing valuation or should it be considered almost a brand new blank sheet of paper kind of valuation every year? And I can see the arguments for both. The argument for one is obviously cost and efficiency, and institutional knowledge. On the other hand, the argument for sort of a de novo valuation would be to reduce the risk of bias materially impacting or influencing the valuation. Where do you fall on that?

Doug Marshall: [00:43:31] I don’t think that you have to do a brand new, clean slate every year, but maybe every five years, I would. Just say, let’s tear it all up and see what we’ve got. Let’s look at this whole thing all over again.

Mike Blake: [00:43:51] Does an annual valuation make sense for everybody? For example, are there cases where you’ve spoken to somebody and maybe they think they want an annual valuation or they’ve been told they should get one, and you sort of say, you know what, no, I don’t really think this is right for you? Has that ever happened, or what is the case—who shouldn’t necessarily have a valuation done every year?

Doug Marshall: [00:44:17] Well, if the business too much depends on one person, I don’t think that you can really get a clean, accurate valuation. And so, you’re talking about a smaller company. But I think once you get into a larger company size, where it is beyond one particular owner, I think having that knowledge is important. And I mean, I’m not trying to do the infomercial here, but I think that there is a legitimate place for the online algorithmic valuations that are kept up to date.

Doug Marshall: [00:44:47] And as long as the operator understands how these things are working and what can possibly go wrong by getting bad data into it, you can have a relatively good piece of information. I mean, you even have large accounting firms that now use independent valuation tools that are online just to confirm the stuff that they do and also to bring the cost of the valuation down for some of their clients that might not want to spend a five figure number to get a valuation on an annual basis.

Mike Blake: [00:45:21] So, here’s part of the hardest question I’m going to ask in the interview, and it’s pretty much coming at the end, if you or I do provide a valuation for a company, and then it sells for a price that’s materially different from what our conclusion was, does that mean that we are wrong?

Doug Marshall: [00:45:45] No, not in the slightest, unless you hired me to evaluate what you could sell your company for in the market conditions that exists today, but I think that’s more the role of a business broker or somebody in the M&A field, because they have connections with those people who might want to buy, who might want to pay a premium or might want to find a value in the marketplace. So, once again, our valuations are going to have a range of valuations that might differ by 20%.

Doug Marshall: [00:46:26] You might say your business is worth between 10 and $12 million. And so, if it doesn’t sell—we had one recently where the company sold for almost a third more, but a lot of that was because it had fully depreciated equipment that with the supply chain problems, they would not be able to replace that equipment. So, the equipment had significant value in addition to the company itself, the company’s ability to generate revenue. Does that make sense?

Mike Blake: [00:47:00] Yeah, it does. And it’s important, I think, and sometimes, I think it’s overlooked that nowhere in the professional standards does it say that the object of what we do is to get the right number, because as a recognition, I think one of the things our profession does well, there’s a humble recognition that there isn’t necessarily a right number to get, but one that’s credible and reliable.

Mike Blake: [00:47:29] But market conditions are idiosyncratic, and you may be selling a company under duress, for example, if it’s under a buy-sell, or there are so many things that can go wrong that aren’t—or right, frankly, that aren’t considered under the laboratory conditions of a conventional appraisal that even under the best of circumstances, I think what we do should be considered a starting point, not necessarily an ending point.

Doug Marshall: [00:47:58] And business owners deal with uncertainty all the time, so delivering them a number that is not necessarily going to be black and white, the same way that you expect their accounting to be black and white, right? I expect accounting to account for every dollar down to the penny, but we can’t do that, because there’s so much uncertainty out there in the world, but there is also a way to kind of predict what is the range of the value that is likely to be there for you at some point in time in the future or right now.

Mike Blake: [00:48:31] Doug, we’re running out of time, this has been a great conversation, but I’m sure there are questions that either some of our listeners wished that I would have asked or wish we spent more time on, if somebody wants to follow up with you about any of the topics we’ve covered today, can they do so? And if so, what’s the best way to do that?

Doug Marshall: [00:48:49] I am always happy to either have a conversation about this, answer any questions, they can email me at dougm, Doug Marshall, M is my last initial, @marshallviliesis.com, or feel free to call me on my cell, talk, text, it’s 206-605-4695.

Mike Blake: [00:49:16] That’s going to wrap it up for today’s program. I’d like to thank Doug Marshall so much for sharing his expertise with us. We will be exploring a new topic each week, so please tune in so that when you’re faced with your next business decision, you have clear vision when making it. If you enjoy these podcasts, please consider leaving a review with your favorite podcast aggregator. It helps people find us so that we can help them.

Mike Blake: [00:49:37] If you would like to engage with me on social media with my Chart of the Day and other content, I’m on LinkedIn is myself and @unblakeable on Facebook, Twitter, Clubhouse, and Instagram. Also, check out my LinkedIn group called Unblakeable’s Group That Doesn’t Suck. Once again, this is Mike Blake, our sponsor is Brady Ware & Company, and this has been the Decision Vision podcast.

 

Decision Vision Episode 166: Should I Use Artificial Intelligence in my Business? – An Interview with Charles Wardell, Digital Cortex, Inc.

April 28, 2022 by John Ray

Digital Cortex

Decision Vision Episode 166: Should I Use Artificial Intelligence in my Business? – An Interview with Charles Wardell, Digital Cortex, Inc.

Exploring the evolution of artificial intelligence (AI) in general and specifically for business use, Charles Wardell, CEO of Digital Cortex, and host Mike Blake discussed how to define AI, machine learning, and its applications both commercial and otherwise. They also covered its impact on the pandemic, the social implications of AI, the need for a commitment to trustworthy data, and much more.

Decision Vision is presented by Brady Ware & Company and produced by the North Fulton studio of Business RadioX®.

Digital Cortex, Inc.

As technology rapidly evolves, so does the need for faster, more efficient data processing methods.

The Central Processing Unit (CPU) has been the workhorse behind digital endeavors, but today’s computation and data volumes challenge even the fastest CPUs. The modern world is increasingly becoming one where data reigns supreme. Data processing has evolved from serial computation and sequential storage to parallel computing with large pipelines and vast amounts of memory.

Today, there are options for accelerating computation, graphics processing units, FPGAs, ASICs, and DPUs designed specifically for data processing. Digital Cortex aims to converge these advanced technologies into a single unified platform, creating an ecosystem that simplifies the hyperscaling of complex data processing.

The Digital Cortex platform is a data appliance with built-in acceleration. It handles the undifferentiated heavy lifting so that you can focus on logic, analysis, and results. Our company is designed to bring the power of the Cloud to those use cases that cannot tolerate outage, latency, or uncapped expense.

Company website | LinkedIn 

Charles Wardell, CEO, Digital Cortex, Inc.

Charles Wardell, CEO, Digital Cortex, Inc.

Charles Wardell, CTO, Tech Visionary, Maker of Things That Work Fast with decades of experience working with leading MPP databases to implement world-class BI platforms, and then designing and developing one of the world’s most powerful cloud and edge-based analytics engines using MPP (massively parallel processing), grid computing, ML (machine learning), and AI (artificial intelligence), Charlie routinely tackles some of the world’s messiest and most intractable problems. The fact is, Charlie is one of the best big data platform architects in the world.

His superpower is weaving hardware, software, and database technologies into cutting-edge, high-performance solutions that provide insights at the scale and speed modern businesses require. The breadth and depth of Charlie’s experience also enable him to see around the corners well in advance, and the combination of his and David’s vision targeted on the biggest and most valuable solutions is what makes this duo such an amazing team.

If intellectual curiosity was a degree, Charlie would have a PhD. His curriculum has been intensive, and it continues today, his library is extensive, not in one discipline, but several: hardware, software, and database technology. But beyond reading, Charlie’s best work comes out of his lab, whether it’s a customized FPGA, the fastest database in the world (measured by inserts), or it’s a new application that integrates symbolic and connectedness AI, there is nothing he can’t do. However, his best problem-solving characteristics are that he is a natural systems thinker and he never brings bias to a problem, every problem gets his full attention, so he can always focus on identifying the best tool for the job, not necessarily the tool he knows. This is what makes him one of the best architects on the planet, maybe the solar system.

LinkedIn

Mike Blake, Brady Ware & Company

Mike Blake, Host of the “Decision Vision” podcast series

Michael Blake is the host of the Decision Vision podcast series and a Director of Brady Ware & Company. Mike specializes in the valuation of intellectual property-driven firms, such as software firms, aerospace firms, and professional services firms, most frequently in the capacity as a transaction advisor, helping clients obtain great outcomes from complex transaction opportunities. He is also a specialist in the appraisal of intellectual properties as stand-alone assets, such as software, trade secrets, and patents.

Mike has been a full-time business appraiser for 13 years with public accounting firms, boutique business appraisal firms, and an owner of his own firm. Prior to that, he spent 8 years in venture capital and investment banking, including transactions in the U.S., Israel, Russia, Ukraine, and Belarus.

LinkedIn | Facebook | Twitter | Instagram

Brady Ware & Company

Brady Ware & Company is a regional full-service accounting and advisory firm which helps businesses and entrepreneurs make visions a reality. Brady Ware services clients nationally from its offices in Alpharetta, GA; Columbus and Dayton, OH; and Richmond, IN. The firm is growth-minded, committed to the regions in which they operate, and most importantly, they make significant investments in their people and service offerings to meet the changing financial needs of those they are privileged to serve. The firm is dedicated to providing results that make a difference for its clients.

Decision Vision Podcast Series

Decision Vision is a podcast covering topics and issues facing small business owners and connecting them with solutions from leading experts. This series is presented by Brady Ware & Company. If you are a decision-maker for a small business, we’d love to hear from you. Contact us at decisionvision@bradyware.com and make sure to listen to every Thursday to the Decision Vision podcast.

Past episodes of Decision Vision can be found at decisionvisionpodcast.com. Decision Vision is produced by John Ray and the North Fulton studio of Business RadioX®.

Connect with Brady Ware & Company:

Website | LinkedIn | Facebook | Twitter | Instagram

TRANSCRIPT

Intro: [00:00:02] Welcome to Decision Vision, a podcast series focusing on critical business decisions. Brought to you by Brady Ware & Company. Brady Ware is a regional, full-service accounting and advisory firm that helps businesses and entrepreneurs make visions a reality.

Mike Blake: [00:00:22] Welcome to Decision Vision, a podcast giving you, the listener, clear vision to make great decisions. In each episode, we discuss the process of decision-making on a different topic from the business owners’ or executives’ perspective. We aren’t necessarily telling you what to do, but we can put you in a position to make an informed decision on your own and understand when you might need help along the way.

Mike Blake: [00:00:44] My name is Mike Blake, and I’m your host for today’s program. I’m a director at Brady Ware & Company, a full-service accounting firm based in Dayton, Ohio, with offices in Dayton; Columbus, Ohio; Richmond, Indiana; and Alpharetta, Georgia. I am managing partner of the Strategic Valuation and Advisory Services Practice, which brings clarity to the most important strategic decisions that business owners and executives face by presenting them with factual evidence for such decisions. Brady Ware is sponsoring this podcast.

Mike Blake: [00:01:12] If you would like to engage with me on social media with my Chart of the Day and other content, I am on LinkedIn as myself and @unblakeable on Facebook, Twitter, Clubhouse, and Instagram. I also recently launched a new LinkedIn group called Unblakeable’s Group That Doesn’t Suck. So, please join that as well if you would like to engage.

Mike Blake: [00:01:31] Today’s topic is, should I use artificial intelligence in my business? According to PEGA, 77% of people already use a device or service that is AI powered. Eighty-five percent of customer relationships with business enterprises will be managed without human involvement, according to Gartner. And, according to Forbes, the number of AI startups since 2000 has increased four times.

Mike Blake: [00:01:57] And, you know, I’m actually a little surprised we haven’t gotten to this topic until now. It’s such an important topic. And, AI and the things that go with it or talk about it today are so pervasive that to be candid, spoiler alert, I think we’re going to come away from this conversation not so much debating how one, whether one should incorporate AI into your business, but what is the best way to do it or what’s the feasible way to do it because, you know, it’s in everything.

Mike Blake: [00:02:30] So, if you’ve been sort of living with a fear or a notion of robots sort of taking over or taking over things in our society, I got bad news for you. It’s already been happening for about 15 years or so, if not longer. But, knowledge is power, and the power of AI, and I think our guest is going to agree, is something where we have only scratched the surface. And it’s probably limited as much as anything by hardware at this point as it is by human ingenuity and the ability to write code.

Mike Blake: [00:03:10] And so, my suspicion is that for a lot of us who are small business executives and owners, we may have written off or not paid attention to artificial intelligence because, you know, candidly and I’m guilty of this too, it sounds like something that only the big largest companies can afford. Right? AI is so expansive. And, we’re going to talk a little bit about the alphabet soup that goes into AI and how to make a little bit of sense from it. But it’s been around a long time now. It’s beyond, well beyond that early adopter phase or the cutting edge phase. Maybe it’s still in early adoption, but that means there’s plenty of room for AI to grow, to be creatively addressed, to be approached, and probably no two businesses are going to use AI exactly alike.

Mike Blake: [00:04:01] And, as usual, since I know almost nothing about the topic that we’re going to discuss, we’ve brought in an expert. And, joining us today is Charlie Wardell of Digital Cortex. Charlie is a technology entrepreneur, inventor, and consultant with over 20 years of experience in the field. He has a passion for innovation, which is showcased by patents related to big data and distributed computing, text analytics, and emotion detection in texts. He is also the owner of a provisional patent for a very unique FPGA that’s freely programmable gate array, for those of you scoring at home, hardware accelerator that brought the demand of financial institution back testing from 130 servers down to five. And, he also has a patent on a big data business approach.

Mike Blake: [00:04:46] Digital Cortex is the ultimate data processing and machine learning accelerator. They read anything, apply solutions, specific models and analysis, and put the results for you where you need them. With its combination of proprietary hardware and software, Digital Cortex delivers hyperscale data processing and inferencing performance. Multiple CPUs, FPGA, GPUs, and DPUs work together to enable you to achieve blazing fast speeds for your most demanding tasks that are focused on solving, once and for all, the scalability issues that keep meaningful insights hidden in large data sets. With Digital Cortex, you get line speed and hyperscalable access to those insights when you need them. Charlie Wardell, welcome to the program.

Charlie Wardell: [00:05:30] Thank you. Thank you for having me.

Mike Blake: [00:05:33] So, what is AI? Some people who think about artificial intelligence out there know a lot more about it and they actually know what it is. Others think back to the time they last watched a Terminator movie and they think artificial is used to go back and kill John Connor. I don’t think we’re there yet, but if we did, we wouldn’t know about it. How do you describe artificial intelligence to somebody who doesn’t have a Ph.D. in the field?

Charlie Wardell: [00:05:57] Yeah. So, you know, AI has been around for ages, right, since the ’60s. They’ve been trying to crack the AI code and make essentially have computers make decisions. Not to be confused with machine learning, which is a subset of AI that helps drive those decisions, but AI is essentially a technique by which decisions are being made whether a human is in the loop or not is irrelevant. And then, there are various forms of AI. You have symbolic AI. You have expert systems. You have neural networks and things like that that help you drive these decision-making processes. So it’s a complex topic with many facets. But what I hope to do on this call is boil it down to some of the practical as to what it means for small and mid-sized businesses.

Mike Blake: [00:06:51] So, in around artificial intelligence, you see or hear a lot the terms neural networks and machine learning. In fact, you just spoke of them, right? How do those three things interact with one another?

Charlie Wardell: [00:07:09] Okay. So, machine learning is the analysis of data in one of two forms. It is analyzing data where you’re either analyzing it in a supervised fashion, like there’s a human in the middle, right? We are providing data to a machine. That is what we call labeled. Here are examples of smiles or happiness, okay, and we provide as many different variations of that smile as possible, maybe in an image. Okay. So, that’s human-annotated labeled data. And then, the machine learns that these are smiles, these are frowns. That’s essentially one type of machine learning.

Charlie Wardell: [00:07:54] Another type is unsupervised. And you say, given all of this data, maybe cluster together the ones that look alike and do it on your own. And, that’s a clustering algorithm and that’s another form of machine learning. Both of which are used or can bubble up into an AI solution, but by themselves are not necessarily AI. You might think the fact that a machine can pick out a smile versus a frown is artificial intelligence. And, you know, I guess at a rudimentary level, it is. But it is not the AI that we’re talking about today where you have some smart drones being able to pick out the proper target, you know, in Ukraine, which is crazy AI. It’s pretty wild. So, that’s machine learning. AI is layers and layers of the machine learning that actually create a human-like decision. Right?

Mike Blake: [00:08:57] So, I might be completely off base, but I’ve often thought of artificial intelligence, like you said, going back, I would argue that artificial intelligence on some level has been around almost as long as computer programming has. Right? The second that they started letting you make if-then statements, that is a rudimentary form of artificial intelligence. Right? But where the machine learning comes in – and I love your smile analogy, so I’m going to take it, steal it and run with it – and that is that under a sort of a pure or plain vanilla AI framework. The programmer would have to tell in exacting detail the computer what a – what the characteristics of a smile or group of smiles or an epistemology of smiles looks like. Whereas under machine learning, you can show a bunch of facial expressions and over time it becomes good at understanding on its own what a smile looks like and it doesn’t have to be a separate algorithm that is fixed, that defines that smile rigidly. Is that a fair distinction?

Charlie Wardell: [00:10:05] Yeah. I guess, so really interesting. So, your analogy about the if-then statement is spot on. Back then, we called those expert systems. They were based on Prolog and lists some – I’m dating myself, but those expert systems were essentially if-then statements to the extreme, so many of them that it’s not humanly possible to code them all and maintain them all. And some of the best expert systems are used in the medical field where you interview a doctor and he may be a specialist in cardiology and you just interview him every single weekend over a cup of coffee until you pick his entire brain and you document these things as rules. Right? And then, you have a patient that comes to you and you type in his symptoms and it traverses all of this logic and all of these if-then statements and it says you have this. And the doctor looks and he thinks about it and goes, “Oh, it’s right. Holy smokes.” So, that’s a form of AI, right? That is an expert system AI.

Charlie Wardell: [00:11:07] Today, you have the smile analogy where the machine is actually picking up what a smile looks like. You’re not telling it any rules. It’s actually figuring it out and it’s like, “Wow, this – you told me these were smiles. So, I’m going to figure out why they’re smiles. Okay. Teeth are showing. Maybe, the mouth is wider or maybe the eyes are squintier, or maybe all of that stuff. I’m going to figure out why.” And that’s a different kind of AI.

Charlie Wardell: [00:11:34] What’s happening today and what should be happening today is the convergence of the two, right? Because together they’re better. And I can give you an example of a chatbot that I did. So, you have a chatbot. Let’s say it’s a mortgage application chatbot and people are saying, hey, I want a mortgage. And then, you have this thing traversing through the rules and parsing out that text and say, “Mortgage wants to know about a mortgage. Here’s my response.” It’s a canned response. And he says, “Well, do I need – how much is my down payment?” Looks up, answers. That appears to be AI, but that’s all this symbolic expert system-driven stuff. Then, they throw you a curveball and they say, “Hey, did you see the game last night?” Because they think they’re talking to a real person. That’s not in my decision tree. So, what do I do? I go to a neural network that was trained with the latest news. And I see game, scores and I’m able to pull that out and reply, right? So, now I’m doing the best of both worlds and I’m now making a real AI experience that is very different than the old school symbolic if-then statements. People are like, “Wow, how did it know that.”

Mike Blake: [00:12:53] You know, as I listen to you and even as I was doing research for this conversation, I think I’ve probably made a moron of myself. I mean, it’s more in an okay way, but I’ve probably been very polite and I’ve probably been very complimentary to basically robots that have given me customer service. Right? Because I try to – I do try to be empathetic with customer service. They have a tough job. They probably have people that call up and swear at them and threaten to blow up their houses and God knows what else. They’re not happy with the outcome. And so, I get good service. I try to be positive about it, just like I do in life. I try to be acknowledging of when good things happen. I’ve probably told at least one robot how much I think they did a great job and I love them. I think they’re just awesome, quote-unquote, people, right, if we’re honest about it.

Charlie Wardell: [00:13:46] Right.

Mike Blake: [00:13:46] Right.

Charlie Wardell: [00:13:47] Yeah.

Mike Blake: [00:13:48] Which shows us doing its job, right? Because it had, the chatbot in this case had such a human quality. The artificial intelligence was so well developed that indeed I had no conception that there wasn’t actually somebody busily typing on a window somewhere actually helping me.

Charlie Wardell: [00:14:06] Yeah. You know, and AI, it’s getting to the point where it is so unbelievable that you are getting to a point where you’re not really able to tell a difference. My entire resume – my entire resume, I wrote, and then I put it into this AI machine. There’s a few of them out there. And it rewrote it for me and it was amazing. I was like, “Yep. we’re going to clip that. They didn’t get that quite right.” And people would say, “Oh, my gosh, your resume is amazing.” And, it’s all factually true. Everything in there is factually true. But the embellishments that it made and the connected words that it used, it’s just absolutely mind-blowing. So, that’s just one aspect of AI that anybody can use in their business, this narrative generator. And it’s scary how awesome it is. It really is. It’s very awesome. It is.

Mike Blake: [00:15:07] So, let’s talk about the awesome because I’m not sure there’s a full appreciation of the awesome. I think a lot of the awesome is sort of hidden from view by design. In your mind, what are some of the most exciting recent developments in AI? What’s kind of new and neat that’s come out? And if you want to talk about the stuff you’re doing, that’s fine too. I’m familiar with it to some extent. Chris has briefed me. Or, other things too. But what’s really neat and new with AI right now?

Charlie Wardell: [00:15:34] Well, you know, let’s go with Ukraine right now, you know, which is, maybe people didn’t realize what AI could do from a military aspect. Right? So, you have these things called slaughter bots, right? They’re called killbots. And they’re this £6-drone that launches and it can travel like 6 miles and hover the air and it looks for targets. Now, you have a line, a caravan of, you know, heavy equipment, you know, enemy personnel. Well, out of all of those, which one should a dive bomb? Well, it’s going to look for the gas tanker, got to kill that supply chain. And it knows. It knows. I’m going to go for those first. Right? And, after I get rid of all of those, then I’m going to start getting these, and I’m going to do the missile battery next, and I’m going to do this next. That’s where AI gets – that’s where people can relate to say, because it’s in the news right now and say, “Oh, I get it. I understand what AI is doing now. I can discern and I can make decisions in flight, in real time, and do my job.”

Charlie Wardell: [00:16:00] From a business standpoint, on marketing – my wife has a business. It’s an e-commerce site. And, in that business, it’s made up of moms. Right? And, these moms have certain characteristics of the things they like, the things they don’t like, the things they buy, the things they don’t buy. You can upload your customer list to Facebook. And you can say, “Hey, Facebook, you have a billion people in your audience. What I want you to do is I want you to give me a new audience that is not my customer base but that looks exactly like my customer base,” from mathematical point of view, exactly, age, demographic, region, interests, and all this other stuff. And, now that becomes my target list for sending ads or messaging or email or whatnot. It’s called lookalike audiences, and it uses clustering technologies.

Charlie Wardell: [00:17:44] So, you have the one extreme where you can see that, wow, this is real AI. It’s autonomous and it is just doing its job. And those things cost, you know, $6,000 apiece as opposed to $6 million apiece. And then, you have lookalike audiences that help small and midsize businesses become a little bit more effective and who they’re targeting. Right?

Charlie Wardell: [00:18:05] Back in the day, you had to buy a list, got to buy a list. You had to tell them, “Hey, you know, give me you know, people in this age, this demographic.” You buy a list, you put a stamp on an envelope and you sent it out. Those days are gone. Right? And it’s so far more accurate that this is the day and age of AI.

Mike Blake: [00:18:26] You know, one of the – the Ukraine thing that you bring up, that’s for personal reasons, that’s a conflict I’m following very closely. And the AI that you describe brings up another very interesting point, which I’ve kind of wondered about, and that is that in that war, friend or foe detection has got to be extremely difficult because they’re basically using the same stuff.

Charlie Wardell: [00:18:54] Yeah.

Mike Blake: [00:18:54] Right? It all looks the same. It’s not supposed to be that way, right? Everything was built so that our stuff would look like our stuff. And their stuff looks like their stuff. But now there’s stuff and our stuff or the Ukrainian stuff all looks the same. Right? And I got to imagine there’s also an AI – there has to be an AI component to helping assist, to make sure there’s not a lot of friendly fire. And, it’s interesting that I’ve not heard of a single incident of friendly fire, of a significant incident of friendly fire yet in this war.

Charlie Wardell: [00:19:22] Yeah. And that’s where expert systems start coming in play, right, where you have a rule-based on top of it. Okay, I’ve done my job. I’ve analyzed visually. Here’s my target. Now a series of rules start happening, right? There was another project that we were working on where, you know, there are experts in theater that they’re in the military and they just know when something’s up. There’s a van parked on that corner. There’s a dead dog over on this corner. There’s a group of people over on this corner. And there’s an IED under the dog who’s whimpering or dead, and you go over there to help the dog, and boom. Right.

Charlie Wardell: [00:20:03] So, this scenario, right, this scenario, that’s all rule-based. You know, what they’re doing is they’re typing in all these rules. The intelligence gathering is trying to type in environmental rules and then the expert system type AI will take over in cases like that. Others are visual. Others are audio. Others are streaming data where it’s such high velocity that you’re kind of stuck in having the machine make the decision for you in real time. And, that’s where things like the Digital Cortex comes in because the amount of data is so enormous that you’ve got a hyperscale and hyperspeed the processing of this data, and you can’t do it in the cloud, right? I cannot have this thing. It’s got to be in my backpack. It’s got to be on this machine. Can’t do that from the cloud.

Mike Blake: [00:20:53] So, what are the most common applications of AI right now? Is it all big data analytics or are there other applications that maybe are more visible that our audience would be familiar with?

Charlie Wardell: [00:21:10] Well, you’re going to see more and more of this writing style, help-me-write books and blog posts, and automatically you just seed your thoughts in it and it’ll ghostwrite an entire book for you. You’re going to see. That’s happening now. You can Google it. I’m not touting any one technology over another, but you can go find them and trial for 30 days. They are unbelievable.

Mike Blake: [00:21:37] I’ve seen the ads for that. Do they actually work?

Charlie Wardell: [00:21:39] They work.

Mike Blake: [00:21:40] They work.

Charlie Wardell: [00:21:41] They work. They are incredible. Then, you know, other aspects of AI, you know, obviously, in a practical sense, it’s – think of a camera hanging out in a WalMart parking lot and a guy taking out a gun out of the back of his truck. Is he returning it, or is he going to open fire on somebody? Is this an actual threat or is this just a customer that’s returning his gun, right?

Charlie Wardell: [00:22:14] And, given enough scenarios, right, given enough scenarios where we can actually train AI and all of the, what we call labeled data, it can make guesses and the guesses return percentage of probability. And that percentage of probability, once it crosses a threshold, then requires action to be taken. So, you’re going to see it in all aspects of life. And I know people are afraid of it, but there are good there are good aspects of AI that can help humanity, obviously.

Mike Blake: [00:22:49] Yeah. No, I think you’re right. I mean, you know – the thing about AI is that it never gets distracted, never gets bored, never gets arrogant and thinks it knows everything, right? And so, for things like things that require checklists, whether it’s prepping for surgery or landing an A350, AI’s not doing that. Yeah. Although I think AI probably could land a plane. We just never got on a plane that didn’t have a pilot in it.

Charlie Wardell: [00:23:22] Well, there’s AI – there’s AI Assist. Yeah, there’s AI Assist. And, this is where it’s human in the middle. Right? Trust your instruments. Trust your instruments. How many flights have gone down because they didn’t trust their instruments?

Mike Blake: [00:23:37] Oh, yeah. Yeah. Literally, pilots are fighting planes into the ground.

Charlie Wardell: [00:23:42] Yeah, exactly. Now, with AI – AI – see, AI is getting data that you can’t see, comprehend or process because it’s looking further down the road. It sees that there’s – it knows there’s turbulence ahead. Why? Because someone else reported it. It knows the wind speed. It knows, so it’s figuring stuff out, right? So, it’s going to have to take a lot of surrender to surrender to these machines and to totally trust it. And, machines have failed us miserably in the past. So, it’s going to be a while, but it’s definitely.

Mike Blake: [00:24:21] So, this is an impossibly broad question, but I have to ask because we have to start somewhere. Somebody is listening to this podcast or will be listening in when it gets published and they’re saying, “Okay. Hey, I can do all these things. I’m probably not knowingly using it a great deal in my company.” How do you get started? Where do you go from there, from saying, I’m kind of interested in getting AI into my company to have it actually do something useful for it?

Charlie Wardell: [00:24:52] Yeah. So, every company has their different aspects of AI, right? If you’re marketing product and services and things like that, and you’re an e-commerce site, there’s just tons of AI available to you in the form of lookalike audiences and market basket analysis to figure out if you buy this and most people buy this along with it and make recommendations. And Amazon’s been famous for that. You know, if you’re a bank, maybe you’re using AI to do some risk mitigation, you know, maybe you have all the people that defaulted and all their properties at default and you’re looking at this person’s characteristics and you have a default probability.

Charlie Wardell: [00:25:39] You know, most of it is related to the data that you’re collecting. A lot of it is is about lookalike audience. It’s about churn probability. These customers have the, hey, I know historically that a customer that visits my support site three times in a single month has called up and asked specifically about his contract price and has basically stop doing X, Y, or Z is likely to churn, right?

Charlie Wardell: [00:26:15] So, those are the types of things that businesses are doing now. Now, what’s typically required in order to get to that level of analysis is that you have a data scientist who has a hypothesis or you have a mandate from a company that says, “Hey, I want to identify my high churn risk customers.” Then, you get a data scientist to say, “Okay, give me a list of all the customers that churn and let me find out what’s in common with them,” and then runs it through these steps of trying to identify the actual machine models that would predict it with great precision and great recall. So, it usually starts there.

Mike Blake: [00:26:53] So, that suggests to me, correct me if I’m wrong, but that suggests to me that a prerequisite step for adopting an AI centric or AI adjacent strategy is you’ve got to have good data collection in place.

Charlie Wardell: [00:27:08] Absolutely.

Mike Blake: [00:27:10] Right? If you don’t have the data asking any – computers are no better at making decisions based on no data than we are.

Charlie Wardell: [00:27:17] That’s right. And, you remember the phrase, GIGO, right, garbage in, garbage out.

Mike Blake: [00:27:21] Sure.

Charlie Wardell: [00:27:22] Yeah. So, you know, it’s – we’re – I’m on a project right now where we have all of these customers calling in and these are accounts. And, I’m able to cluster the accounts together and say, these accounts look like this and this account looks like this. But what we’re trying to do is we’re trying to find out, okay, they’re service calls that they’re calling in about each product or platform that they’re calling in about. What is the tie between their overall happiness and the calling in that they’re doing on these products and actually seeing if there is upsell potential into new products? Is there expansion opportunity? Is there – are they about to churn or are they – so, the more data that I can feed this machine about that customer and about their interactions across my organization, the better. Now, the challenge is in these organizations. All this data is disparate. They’re in silos and they don’t connect. There’s no one single ID that connects this and this and this and this. They’re legacy systems. And that’s typically what the big challenge is.

Charlie Wardell: [00:28:27] And then, the next big challenge is, I have all this data and I can’t process it fast enough to make any difference because this is a wash,rinse, repeat cycle over and over and over again until you get to the model that does the prediction accurately. So, it’s an expensive proposition in some cases. But these off the shelf things, like lookalike audiences, that most of these social platforms and ad platforms have, they’re set it and forget it. You upload your list. It handles everything for you. So, you don’t have to really get involved in doing anything.

Mike Blake: [00:29:02] So, that leads me to a couple of questions. I hope I remember to ask them both, because I think they’re both important. The first question is, it seems to me, based on what you’re saying, that in some cases a move to heavy reliance on AI, whatever that may be may also require an accompanying culture change. Right? Because if you’re not used to collecting data, if you’re not used to, you don’t have a culture that’s willing to share data, you have little fiefdoms, you may even have a culture that resists accountability. And we know there are cultures out there that do that. And data is kryptonite for lack of accountability. There may be a culture change that needs to accompany this [inauidible] to work, right?

Charlie Wardell: [00:29:53] Well, so I think back to the example where I think it was Microsoft that put out this amazing chatbot. And the internet went crazy teaching the chatbot how to become a fascist. Right? The chatbot actually became rogue. They had to take them down. So, yeah, there’s a big cultural aspect of AI as well, because –

Mike Blake: [00:30:18] A fascist chatbot. I hadn’t heard of that. I can’t wait to Google that after this interview and hopefully Homeland Security will not be paying me a visit, but –

Charlie Wardell: [00:30:27] It’s crazy, you know, because the Internet is a thing of its own, right? And, AI learns what you teach it. And if you teach it, if enough people get together and start telling it truths that are not necessarily truths, it’s wrong.

Mike Blake: [00:30:47] Sure. And, was that an act of sabotage from within Microsoft?

Charlie Wardell: [00:30:52] No. It’s just the Internet having fun. Internet trolls having fun with it.

Mike Blake: [00:30:56] Okay. But what about within a company again? It seems to me that the move to AI, if you’re not already a data-centric company, if you’re already a company, that’s not – that struggles with internal transparency, sharing and teamwork, AI probably is not going to work all that well for such a company unless you kind of address those underlying cultural features.

Charlie Wardell: [00:31:25] That’s true. So, most of the data that’s curated is internal and well guarded, and they understand that there needs to be a big effort in protecting your biggest and most important asset, which is your data. Right? And, it’s only up until recently that people understand that their data is everything. Every company that I’ve been talking to, every single one, no matter how large or small, they want to be a data-driven business. Right? And, getting access to that data and treating it like gold is really, really important. And, they’re starting to get that part. People are just starting to embark on their AI efforts now because they’re only starting to grapple with the fact that we have to make an investment in curating our data in a way that is clean and trustworthy and accessible.

Mike Blake: [00:32:19] And so, I want to go back and ask the other question about that, which is, is AI in some fashion, is that in the realm of affordability for a small business? Are there models, other pieces of AI where a small business is doing, let’s say 1 to $10 million of revenue a year could reasonably take advantage of this technology? [Inaudible]

Charlie Wardell: [00:32:45] Yeah. Yeah. AI is white hot right now. The market for students coming out of the university, wanting to be developing machine learning algorithms and AI and things like that. They’re available, you know, for a reasonable salary. You can get reasonable AI work that will definitely help you drive good decisions in your business. And then, there are applications that you can download for $30 a month and have it write your your daily blog. You know, seriously, it’s that crazy.

Charlie Wardell: [00:33:19] And then, things like look alike audiences, if you’re doing ad spend and stuff like that that’s free. They just want your ad spend, right? So, for a once – for a milllion dollar company to get into the game, it’s not hard. And, those things will make you a $2 million company and the $3 million and then eventually you’ll have a team of data scientists doing amazing things. But, yeah, the barrier to entry has definitely reduced, over the last few years has definitely reduced.

Mike Blake: [00:33:52] Now, you’ve touched on this a little bit, and I want to make this explicit because I do think it’s important. If you’re going to undertake AI in a serious way, do you need to think about having a captive AI specialist or big data specialist on your team? And is that even possible? I mean, those people are very hard to hire anyway, even if you wanted to. But is that a prerequisite for success using AI tools?

Charlie Wardell: [00:34:20] It depends on the AI. Yeah. Yeah. So, I mean, if I’m, you know, just wanting something to write my blogs and my responses and my creative, no, right? There are applications out there that do that. But if I have a hypothesis and I have all this data and you definitely do need some sort of architect, some sort of data scientist that knows how to get there from here. There is a part of machine learning that is a black hole that we all fear. It’s called feature engineering. And, you have all of these attributes of data and only a handful of them make a difference. Right?

Charlie Wardell: [00:35:02] I’ll give you an example of – so, I’m big in text analytics and I would analyze text and try to pull out all the topics out of text and I curated a list of texts that were very pro a product, very pro, this product. And, I identified the language that made it pro the product. Now, think about the iPhone when it first came out. “Oh, my gosh, this is amazing. This is a game changer. You know, I’ve never seen anything like it.” or the iPad. “Hey, now I don’t have to carry my laptop with me wherever I go.”

Charlie Wardell: [00:35:40] So, there is a language of this wow. Right? There’s this language. So, I’m able to tease out this language and identify all of the features so that when a new tweak comes in, I can compare it to that model and say, is that wow factor in there or not? No. But here’s the interesting thing. Out of all the features that I found, and I added them all in, the sentiment of the text, the length of the words, the number of periods, commas, exclamation points, the number of curse words, the date, the length of the author’s email, there was one feature that made it really interesting, and that was the number of sentences, was an indicator to how prolific this product experience was for this person. It was the number one feature in machine learning, and nobody would have ever thought that unless the machine figured it out. The machine figured it out. It wouldn’t be something. I just threw it in as a happenstance. Right? Number of sentences.

Mike Blake: [00:36:51] Where in your mind is AI not being utilized to its fullest potential? Where you see as a sector or an application, you say, “You know what? I’m surprised more people are doing this.”

Charlie Wardell: [00:37:03] You know, schools, how we teach our children, we don’t all understand. Right? I think the schools should be looking at clusters of students and figuring out how best to hone curriculum for those types of students. We learn differently. I think that – you know, everything from your spending patterns and how you optimize your budget and where you should be investing, I think those types of things are very ripe for consumer programs where you feed in the characteristics of your family, your spending, your goals, and it comes out with a plan and says, follow this plan and you’ll get to where you’re going. And, I think there’s a lot of consumer activity that can happen in these just turnkey applications.

Mike Blake: [00:38:01] So, how do you evaluate AI platforms? Let’s take the lookalike audience platform. You brought that up a number of times. I presume that’s important and fairly widespread and I’m assuming there’s more than one source you can go to. How do you evaluate among competing or I guess what will be presented to the market as comparable platforms? How do you evaluate that? Is there a checklist? Are there certain things that sort of top three or top five things that you need to be looking at? You need to hire an external specialist or consultant that really understand this stuff. How do you go about doing that?

Charlie Wardell: [00:38:52] Lookalike audience. You know, they’ve really dumbed it down so that anybody can use it. But the success of the lookalike audience really determines – it’s really how much of the features do have you collected so that it can match up against. So if the only thing I have is gender and age, and I say give me a lookalike audience for gender and age, it’s a coin toss as to whether or not I’m going to hit the right demographic. But if I have gender, age, the car you drive, you know, the number of friends in your social sphere, the part of the world you’re in, the hobbies you do, and all of this other stuff, I’m going to radically change my marketing return on investment. Right?

Charlie Wardell: [00:39:44] So, what they’ve done is, they made it so easy. You upload a CSV spreadsheet to our platform and we’re going to carve out your lookalike audience, but give us as many of the features as you possibly have, because we have them all. They have them all and more. Right? You’d be surprised as to what they have. Right? So, what you’re doing is you’re uploading what you have and they’re matching it with what they have and are carving it out. So, very simple, very easy. And, most platforms to this day, specifically Facebook, all have this type of lookalike audience.

Mike Blake: [00:40:13] So, as we all know, looking back on the last two years, the world has just changed dramatically. Our relationship, among other things, with technology has changed dramatically because we had to. We had this sort of shock therapy in terms of digital transformation. Now, that we’re in this what I call a trans-pandemic period, I don’t think we’re out of it, but we’re not, and I’m not sure where we are so I’m calling it trans. Looking back, where did AI contribute to making that less terrible than it otherwise would have been? And then, if I can also ask this, I know this is a complicated question, but you can handle it, and that is, what opportunities for AI have been revealed or exposed by the COVID experience in your view?

Charlie Wardell: [00:41:15] Wow. Well, it may go hand-in-hand. I’ll answer your second question first. But we all know, and we spent so much time listening to what fake news was, right? And, you know, curating data and actual correct data is paramount to having good AI. So, I think that when you have such a divisive country in what they’re sharing in this sentiment and it becomes very nebulous and this is where AI failed you. This is like what is it about, you know?

Charlie Wardell: [00:42:11] But, you know, where AI succeeds is looking at the cellular level of maybe this disease state and looking at the characteristics and matching it up with others to to say there’s a similarity between these two and we’ve already figured out how to solve this one and it’s very similar and how we can apply some similar therapies to this and try it out and see if it works. That’s where it really could help us. So, on one hand, in the pandemic, you could see how it hurt. On the other hand, you could see very clearly how it helped. So, I think I got both your questions. Did I miss one?

Mike Blake: [00:42:59] No, no. I think you did. You answered it in a way I did not expect, but that didn’t make it bad. I think it’s a very – that’s a very thought-provoking answer, because in my view, I’ve got to be careful because I don’t want to be partisan the way that I express this. In one fashion or another, we have been flooded and continue to be flooded with – call it- anti-data. Right? Now, we’re in a a society now where gaslighting is a contact sport now and just like your analogy or your example of Microsoft chatbot being trained to be a fascist basically because of a big cyber prank, right?

Mike Blake: [00:44:01] Yeah. I do think that the drawback of AI, and this isn’t unique to AI, it’s really technology in general. Right? Technology is an amplifier first and foremost. Technology is basically a lever when you really boil down to it, or a power tool. So, something that’s good and productive be amplified tremendously by technology, and something that is destructive can also be and is amplified by technology. Right?

Charlie Wardell: [00:44:38] And, whether you’re a bot or whether you’re a person, you cannot possibly make – I shouldn’t say you can’t possibly – you can’t reliably and sustainably make good decisions. You can lock into a good decision even with bad data. That does happen. But you can’t be a sustainable and reliable decision-maker if the data on the front end is bad. But now what happens, I’ve posted about this before, particularly the way that the news and the social media business models are, it’s no longer about informing people. It’s about getting people riled up because riled up people tend to be better customers. They tend to watch through your commercials. Right? And they tend to spend more. They tend to pay more. They’re a much more valuable audience.

Charlie Wardell: [00:45:31] You’re absolutely right. You could see this in technologies like TikTok, where it’s bringing things up to you that are somewhat controversial and it may not be what you’re interested in, but it gets a lot of the stickiness. And then, when you start looking at all of the reactions, you start seeing that you’re in a bubble. If this is your only platform, you’re in a bubble. You think the world is exactly like what was just presented to you. And it is not. It is really not.

Charlie Wardell: [00:46:04] So, there’s got to be a gatekeeper of truth in AI. There’s got to be. And you call them fact checkers now, right? There’s got to be a move – with AI, the responsibility is truth. There’s got to be truth. And I don’t think we’re there. I think we’re far from there.

Charlie Wardell: [00:46:25] Now, into your internal organization, you can guarantee the truth, right? You could say this is the facts. These are customers that left me. These are customers who love me. This is where we screwed it up. This is where you have facts, you have truth. And then, you could trust that AI. But when you start coming into this social sphere, it’s going to represent what humanity looks like today. It’s just going to become whatever it’s being fed.

Mike Blake: [00:46:53] Well, I mean, definitionally, it’s a feedback loop, right? That’s what it’s designed to do. And, maybe that’s a flaw. Not a flaw, but that’s just a – it’s a point where we need to just be aware. And, we’re getting a fascinating social discussion here. Right? But perhaps an area of evolution for AI, and maybe this is already happening. And you tell me this, we’ve already got this. But one area of AI that has to, I think has to evolve is there has to be some sort of emergency brake that just sort of cuts off the feedback loop or it doesn’t go off an artificially intellectual deep end and go into a feedback loop that just sort of drives the AI off the rails and becomes and perpetuates more extreme decision-making.

Charlie Wardell: [00:47:46] You’re absolutely right. And, this is probably one of the scariest factors of AI in use is what happens because there are some malicious people out there. They’re just trolls and they don’t understand the impact of what they’re doing. Now, from a social perspective, I don’t think it’s going to make a difference as to whether an AI assists a doctor in atrial fibrillation ablation. It’s not going to make a big difference because completely different kind of AI. But from a social perspective, yeah, it’s a whole new can of worms that we haven’t even begun to navigate through yet.

Mike Blake: [00:48:34] So, let’s bring it back to business for a second even though I could talk about this for three hours, and maybe you could too but our listeners don’t want to listen to it for three hours. What are the risks of of bringing AI into a business? What could be unintended consequences? What could go wrong?

Charlie Wardell: [00:48:51] All right. So, I’ve been doing data warehousing for many years, close to 30 years. And, there are some key indicators as to why data warehouses fail. Lack of executive sponsorship, not understanding the technology or choosing the wrong technology, not understanding what you’re getting into and the commitment required to get into it. Lack of adoption, dirty data. These types of things all apply to AI initiatives today. Thirty years later, they still apply. Seventy percent of data warehouses failed because of the things I just mentioned.

Charlie Wardell: [00:49:33] Well, if you’re going to embark in an AI initiative, you have to have executive sponsors that say we are going to be a data-driven organization. Right? And if they say that, that means we are going to make an effort to make sure our data is trustworthy and properly cleansed and integrated. And, we’re going to have one source of the truth so that when we do develop our AI models, that we can trust our AI models and we are going to reasonably expect realistic expectations of AI. Is it 86% where we make a decision or does it have to be 95% in order for us to trust our AI models?

Charlie Wardell: [00:50:18] And it is a continuous, nonstop endeavor of constantly moving forward. So once you start, you’re always continuing to better it, right? So, if you’re taking it from a perspective of this is how I am going to be transformational in my business, it comes with a certain understanding that you have a – this is a marathon, it’s not a sprint. You want to sprint, go download that app to write your blog. You’re an AI. You want to be transformational, you have to be willing to run the marathon.

Mike Blake: [00:50:55] I’m talking with Charlie Wardell. The topic is, should I use artificial intelligence in my business? I want to be respectful of your time, so I only have time for a couple more questions. But one thing I want to get out of you, because I think your answer is just going to be awesome, that is, what’s coming ahead? What are some future applications of AI that you see that aren’t in use yet but we may see as viable in the next 5 to 10 years?

Charlie Wardell: [00:51:28] I think the obvious one is driverless cars. Logistics and supply chain, you know. I don’t understand the levers that are moving our supply chain problems right now. I just don’t understand. It makes no rhyme or reason to me that we have this supply chain problem.

Charlie Wardell: [00:51:52] Because we’re given a different reason. Every time something goes bad, there’s a different reason.

Charlie Wardell: [00:51:56] That’s right. But being able to predict manufacturing and supply chain and things like that, to be fully optimized in the supply chain, I think that’s another aspect that we’re going to see a lot of AI. Obviously, fintech. And, fintech has its problems, right? You have to be able to explain your AI. And, AI does not necessarily lend itself to explainability all the time. You got this black box of this machine doing something and figuring it out and comes out with an answer. And you don’t know how it came out with that answer. But it did and it’s right. I think there’s going to be some changes that you’re going to start seeing more AI used in the financial markets that is more widely accepted.

Mike Blake: [00:52:51] That’s a really interesting observation. So, I’m the world’s lousiest accountant, which is even though I work for an accounting firm, I don’t do any accounting. And, they’re smart not to let me do that. But that brings up a very interesting point, which I’ll bet you some smart accountants are thinking of and probably some of our people at Brady Ware are thinking of, which is, how do you audit data that is AI generated? Right? There’s a recognition in the accounting literature and the literature of what I do in business valuation and informed professional judgment is a recognized piece of the overall analytical story. But what if the informed professional judgment is my tablet or it’s in the cloud or it’s an app? How do we reconcile ourselves to that? I don’t expect you to have an answer for that, so it’s a rhetorical question generally, but it gets to the heart, I think, of that next level is, how do you make judgment? How do you make artificial judgment transparent?

Charlie Wardell: [00:54:01] Yeah. Well, I’m not sure that I’ve seen that aspect of it right now. I think people are more trying to figure out what the answers are, and we’ll deal with that a little bit later. But think about for a moment like all the CEOs that are doing earnings calls at the end of the year or every quarter, and you have 20 years worth of earnings calls from a CEO or an executive. And I train my model as to the cadence of his narrative. And then, I see a deviation, or the machine sees a deviation into what he’s saying is forward looking statements, so to speak. And, I start suspecting there may be deception. And maybe the first time, I was right, and maybe the second time is called reinforcement learning. The more the machine is right, the more right it becomes. Right? So, there are aspects of that that are pretty interesting right now, and that is auditing. Right? Auditing records of what people are saying. How do you transparently audit? I’m not 100% sure. How do you know that the data that is generated is artificial, if it’s speaking the truth?

Mike Blake: [00:55:36] Well, whether the data is generated is artificial, I think is beside the point. It’s really just understanding. You know, it’s either – it’s a combination of understanding how the AI reacts to and interprets that data. And then, asking the bigger philosophical question, again, this gets into the three-hour seminar on the quad kind of thing, but it gets into the question of, what an AI or does AI have the capacity to synthesize and interpret that data the same way that a human being would if it had the computing capacity to actually process it? And is that even the appropriate standard? At what point do we just say, you know what, not only can a computer process more data more quickly and more comprehensively without error, but also the computer just has better judgment. Right? And, that question – I’m sure that question’s been positive. Somebody has written a dissertation on that at some point. But it’s going to move out of a dusty old dissertation in someplace and some of these three-and-a-half inch floppy disks and into a really important practical question that has to be solved, or otherwise AI is just going to be permanently handcuffed.

Charlie Wardell: [00:57:02] Yeah. And it’s going to go back to the quality of the data and is the data non-biased? Is the data trustworthy? And it – here’s the thing about AI, you know, as a human, you can run through a few scenarios. Right? And AI can run through a few hundred models simultaneously. It’s like the hurricane models, right? You see the hurricane models and they all converged. And then, you have confidence that, yep, it’s going to hit Tampa. Right? They all converge. And it’s not just one model. So, what’s going to happen is you’re going to have many, many models and they’re all going to converge and they’re all going to say, yep, morning, you know, this is what we think. And, sooner or later, like, we – sometimes we’re just shocked at how the weather is predicted. And other times we’re just like, what were they thinking? Right?

Mike Blake: [00:58:00] Right.

Charlie Wardell: [00:58:01] It’s all about the data, right? It’s all about the data. So, it’s a little – I think a little easier than predicting the weather. When you have 100 models and you have your data and you can run it through all these scenarios simultaneously and they all come up with the same answer, you need to listen.

Mike Blake: [00:58:19] Charlie, this has been a great conversation. We didn’t even get to all the questions and I anticipated that would be the case. That’s okay. But there are questions I’m sure that people, our listeners, would have wished that we had discussed or would have or wished that we would have spent more time on. If somebody wants to follow up with you about discussing using AI in their business, how to formulate a business strategy around it, can they contact you for more information? And if so, what’s the best way to do that?

Charlie Wardell: [00:58:47] Yeah. They can reach out to me on email. I’m charlie@digital-cortex.io, or my partner in crime, chris@digital-cortex.io. And, yeah, we love talking about this stuff. I didn’t get to speak about the Digital Cortex product and its revolutionary aspects of how it’s going to change the game. But that’s yet to come. We’ll have another podcast specifically on that one because that’s exciting. That’s what I’m – that’s my passion project.

Mike Blake: [00:59:20] Sounds good. Well, I think people will be visiting your website once they listen to this conversation to learn more at any rate. So, that’s going to wrap it up for today’s program. And I’d like to thank Charlie Wardell so much for sharing his expertise with us.

Mike Blake: [00:59:34] We’ll be exploring a new topic each week, so please tune in so that when you’re faced with your next business decision, you have clear vision when making it. If you enjoy these podcasts, please consider leaving a review with your favorite podcast aggregator. It helps people find us that we can help them.

Mike Blake: [00:59:51] If you would like to engage with me on social media with my Chart of the Day and other content, I’m on LinkedIn as myself and @unblakeable on Facebook, Twitter, Clubhouse, and Instagram. Also, check out my new LinkedIn group called Unblakeable’s Group That Doesn’t Suck. Once again, this is Mike Blake. Our sponsor is Brady Ware & Company. And this has been the Decision Vision podcast.

 

 

Decision Vision Episode 164: Should I Do Business in Ukraine? – An Interview with Dr. Leonid Kistersky and Dr. Tetyana Lypova

April 14, 2022 by John Ray

Ukraine

Decision Vision Episode 164: Should I Do Business in Ukraine? – An Interview with Dr. Leonid Kistersky and Dr. Tetyana Lypova, IPR Group

Dr. Leonid Kistersky and Dr. Tetyana Lypova, co-founders of Kyiv-based IPR Group and long-term friends of host Mike Blake, joined the show from Poland after safely escaping their home country Ukraine. They discussed their work, the evolution of their work as they cope with the realities of war, the way the war has reshaped the economy in Ukraine, the resiliency of the Ukrainian people, future opportunities in the country, and much more.

Decision Vision is presented by Brady Ware & Company and produced by the North Fulton studio of Business RadioX®.

During the show, Leonid and Tetyana offered several causes to which you can contribute to help the Ukrainian cause. Follow this link for more information.

Dr. Leonid Kistersky

Dr. Leonid Kistersky

Doctor of Economics, Professor, Founding Director of the Institute for International Business Development (Kyiv), Professor of Vasyl Stus Donetsk National University (Vinnytsia).

He worked as an economic adviser at the Secretariat of the United Nations Conference on Trade and Development (UNCTAD) in Geneva (Switzerland), was the founding chairman of the National Center for Implementation of the International Technical Assistance to Ukraine in the rank of a Minister. 

Leonid Kistersky has taught and conducted research at the world’s leading research centers and universities – Institute of Economics of the National Academy of Sciences of Ukraine, Konstance University (Germany), Brown and Stanford Universities (USA), Kyiv Institute of International Relations at Taras Shevchenko National University, Higher School of Business (Poland). 

Dr. Kisterski is the author and co-author of almost 150 scientific works, including 15 books and textbooks on international economic relations and business development, published in Ukraine, Switzerland, Russia, USA, Great Britain, Poland, Germany, Czech Republic and in other countries; international organizations such as the UN, the World Bank and the European Union also published his books and articles. 

Leonid Kistersky is a member of prestigious international and national scientific institutions and organizations – specialized scientific councils at the Kyiv Institute of International Relations and Vasyl Stus Donetsk National University, Ukrainian Association of International Economists, Ukrainian Academy of Economics, the Academy of Higher Education of Ukraine; for many years he was a member of the UN Scientific Council, editorial boards of foreign and Ukrainian scientific journals and publications.

In 2019, President of Ukraine Volodymyr Zelenskyy awarded Professor Kistersky the title of “Honored Worker of Science and Technology of Ukraine”.

LinkedIn

Dr. Tetyana Lypova (Tatiana Lipovaya)

Dr. Tetyana Lypova

Dr. Tetyana Lypova received a Ph.D. in economics from the Institute of International Relations of Taras Shevchenko National University of Kyiv. She is Associate Professor and Deputy Director of the Institute for International Business Development, which promotes business development and financing of business projects.

Graduated from the Faculty of Economics and Management of Vadym Hetman National Economic University of Kyiv. She underwent internships in the programs of Brown University (USA), the London Center for International Economics, and the Consortium for the Improvement of Education Management in Ukraine. 

Tetyana Lypova has worked as a trainer, consultant, expert analyst on numerous projects and programs of such international organizations as the EU, UNDP, World Bank, USAID, Know-How Found, and other leading international institutions.

Since 2015, she has also been working as the head of the licensing department at the international company IPR Group, where she provides advice to Ukrainian and foreign entrepreneurs on prosecution and registration of trademarks, enforcement of rights, licensing and franchising, protection of geographical indications, copyrights, dispute resolutions, etc. She works with national and international clients and companies on intellectual property protection in Ukraine and in post-soviet independent countries like Georgia, Armenia, Azerbaijan, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, Uzbekistan, and Moldova.

She was a member of the Geographical Indications Committee of the International Trademark Association (INTA).

Tetyana Lypova is the author of about 60 scientific publications, including 5 monographs and textbooks on international economic relations, international technical assistance, and small and medium business development.

LinkedIn

Mike Blake, Brady Ware & Company

Mike Blake, Host of the “Decision Vision” podcast series

Michael Blake is the host of the Decision Vision podcast series and a Director of Brady Ware & Company. Mike specializes in the valuation of intellectual property-driven firms, such as software firms, aerospace firms, and professional services firms, most frequently in the capacity as a transaction advisor, helping clients obtain great outcomes from complex transaction opportunities. He is also a specialist in the appraisal of intellectual properties as stand-alone assets, such as software, trade secrets, and patents.

Mike has been a full-time business appraiser for 13 years with public accounting firms, boutique business appraisal firms, and an owner of his own firm. Prior to that, he spent 8 years in venture capital and investment banking, including transactions in the U.S., Israel, Russia, Ukraine, and Belarus.

LinkedIn | Facebook | Twitter | Instagram

Brady Ware & Company

Brady Ware & Company is a regional full-service accounting and advisory firm which helps businesses and entrepreneurs make visions a reality. Brady Ware services clients nationally from its offices in Alpharetta, GA; Columbus and Dayton, OH; and Richmond, IN. The firm is growth-minded, committed to the regions in which they operate, and most importantly, they make significant investments in their people and service offerings to meet the changing financial needs of those they are privileged to serve. The firm is dedicated to providing results that make a difference for its clients.

Decision Vision Podcast Series

Decision Vision is a podcast covering topics and issues facing small business owners and connecting them with solutions from leading experts. This series is presented by Brady Ware & Company. If you are a decision-maker for a small business, we’d love to hear from you. Contact us at decisionvision@bradyware.com and make sure to listen to every Thursday to the Decision Vision podcast.

Past episodes of Decision Vision can be found at decisionvisionpodcast.com. Decision Vision is produced by John Ray and the North Fulton studio of Business RadioX®.

Connect with Brady Ware & Company:

Website | LinkedIn | Facebook | Twitter | Instagram

TRANSCRIPT

Intro: [00:00:01] Welcome to Decision Vision, a podcast series focusing on critical business decisions. Brought to you by Brady Ware & Company. Brady Ware is a regional, full-service accounting and advisory firm that helps businesses and entrepreneurs make visions a reality.

Mike Blake: [00:00:22] Welcome to Decision Vision, a podcast giving you, the listener, clear vision to make great decisions. In each episode, we discuss the process of decision making on a different topic from the business owners’ or executives’ perspective. We aren’t necessarily telling you what to do, but we can put you in a position to make an informed decision on your own and understand when you might need help along the way.

Mike Blake: [00:00:45] My name is Mike Blake, and I’m your host for today’s program. I am a director at Brady Ware & Company, a full-service accounting firm based in Dayton, Ohio, with offices in Dayton; Columbus, Ohio; Richmond, Indiana; and Alpharetta, Georgia. I am Managing Partner of the Strategic Valuation and Advisory Services Practice, which brings clarity to the most important strategic decisions that business owners and executives face by presenting them with factual evidence for such decisions. Brady Ware is sponsoring this podcast.

Mike Blake: [00:01:16] If you would like to engage with me on social media with my Chart of the Day and other content, I’m on LinkedIn as myself and @unblakeable on Facebook, Twitter, Clubhouse, and Instagram. I also recently launched a new LinkedIn Group called Unblakeable’s Group That Doesn’t Suck, so please join that as well if you would like to engage.

Mike Blake: [00:01:39] Today’s topic is a topic that I hoped that I would address at some point over the course of this program in a very different context. But there’s a saying in Yiddish that roughly translates into, Man plans and God laughs. And there’s nothing particularly funny about this topic, but life does have a way of of bringing the unexpected.

Mike Blake: [00:02:06] So, as I record this on the 8th of April 2022, we are something on the order of about six weeks into the Russia-Ukraine war. And I recorded a podcast on this about five or six weeks ago with the topic Should I continue to do business in Russia and Belarus? And I explained my qualifications to address that topic in that episode. And I would encourage you to listen to that episode for that information as well as more.

Mike Blake: [00:02:39] And the only thing that I’ll rehash here – I dislike strongly that I have to address this topic in the way that it is being addressed – the early part of my career was formed by living and working in Russia, and in Belarus, and in Ukraine. And if there’s anything good that I’ve brought to the table professionally today in large part, it is due to the learning experiences of which I had the benefit those many years ago, long before I had any grey hair, that’s for sure, and I was a lot thinner then as well. But here we have it.

Mike Blake: [00:03:28] And so, the topic we’re going to discuss is sort of the flip side of the topic, instead of Should I do business with Russia and Belarus, I laid forth a case that I don’t think you should. And, frankly, I’m not sure it’s realistically feasible. I think it’s very difficult to do business there. I think that although no set of economic sanctions work perfectly, we have certainly made life very difficult for the Russians and for those who may seek to do business with them.

Mike Blake: [00:04:00] And if they choose to become a client state of China, as appears to be their choice at this point, there’s really nothing that we can do about that. But one thing we can do, and I guess I’m pleased to say that I’m pleased that we’re doing is we are supporting Ukraine, a fascinating country with a fascinating history that for most of its history has been a people much longer than it has been an organized country, if you will. It’s very paradoxical, and there are people who can discuss it much better than I can. We have professors that do that. But it’s a very interesting place with a very complicated history.

Mike Blake: [00:04:51] And as we’re now six weeks into the Russian invasion and we’ve witnessed extraordinary events, things that I think my generation -I’m going to be 52 next month – we never thought that we would see in my generation. We thought this is something that my grandfather would have dealt with, but certainly not today. But, again, here it is. History does have a tendency to be cyclical in nature.

Mike Blake: [00:05:27] And the discussion of whether or not to do business in Ukraine may seem bizarre. And I grant you, if you’re not all that familiar with Ukraine, its history, its geography, I can understand that. And that’s why this topic is so necessary, because Ukraine is a very big place. And although a large portion of the country – really, any portion of the country in those conditions be considered large – but something on the order of about 10 percent is an active war zone. And most of the country is under threat of some attack in some fashion by the Russian armed forces.

Mike Blake: [00:06:13] The fact of the matter is that (A) there has been a war going on since 2014, since the annexation of Crimea and the bizarre quasi independence of the Donetsk and Luhansk regions. That’s been going on anyway. It was simply sort of self-contained. But, of course, now it’s been expanded, and most of you have seen the pictures, you’ve read the news, in many ways it’s probably worse than is being reported on the ground, there before the grace of God go I.

Mike Blake: [00:06:50] But the reality is that there’s a lot of Ukraine that amazingly is still functioning. It is still a functioning state. Volodymyr Zelenskyy, their President, who, frankly, if I’m honest about it, I had a lot of doubts when he was elected. That a comedic actor would rise to the level of being able to govern such a complex country with a very complex political structure as Ukraine. And, now, he’s being mentioned in the same words as Winston Churchill. So, it really goes to show you what I know, which is probably absolutely nothing.

Mike Blake: [00:07:28] But all of a sudden now we all know who he is. We all know his famous quote that he says he wants weapons, not a ride. And, you know, this is a country that’s not going away silently by any stretch of the imagination.

Mike Blake: [00:07:46] And I think I owe it to you as the listeners to help you understand what the opportunities are to do business in Ukraine, not just from a humanitarian perspective, not just from a moral and ethical imperative, although those do still exist. But the country is amazingly, with all the things that are happening to it, that they are still open for business.

Mike Blake: [00:08:17] And joining us today are two longtime dear friends of mine, who I was very relieved to speak to only a few days ago. I realized that they had managed to escape the country after their home came under attack. And joining us from Poland are Dr. Leonid Kistersky and Dr. Tatiana Lipovaya. Who, again, I’ve known for a very long time.

Mike Blake: [00:08:44] And they are co-founders of a company called IPR. That, among other things, is a law firm that provides counsel for companies seeking to do business from the West into the former Soviet Union. I’m not even sure what that region of the world is going to be called anymore. I think it’s going to be different. I just can’t predict what that’s going to be. And their specialization has long been about protecting Western intellectual property rights in those countries, anti-counterfeiting in particular.

Mike Blake: [00:09:25] As well as working with a sister company, where I guess I was sort of an entrepreneur or teacher in residence, for lack of a better term, for about two-and-a-half years, The Institute for International Business Development, whose focus has been to serve as a bridge between Western companies seeking to learn about how to do business in that region, how to take advantage of the opportunities that that region has held and, I think, will hold at some point in the future – God knows only when – as well as how to navigate the many risks that region holds.

Mike Blake: [00:10:07] And they’ve just been fantastic people. And I’m delighted – but really proud – to call them my friends. By way of a little bit of a professional introduction in no particular order, Dr. Leonid Kistersky got a lot of things to his claim to fame. I could read a very lengthy bio, but I don’t want to do that because I want to get to questions.

Mike Blake: [00:10:35] But suffice to say that he was the First Minister of Foreign Economic Relations in the First Post-Independent Ukrainian Government of the early 1990s. He has been a visiting instructor at places such as Brown University, Stanford University, and Columbia, there are others that I’m probably forgetting. And he’s been doing this for about 50 years.

Mike Blake: [00:11:01] I couldn’t believe it when I looked up his bio, he does not look like he’s as old as his calendar would say. Hedoesn’t sound like he’s that old either. I look and sound older than the guy does. So, Leonid, whatever you’re doing, keep doing it because God knows it’s helping you.

Mike Blake: [00:11:19] And he was also recently the recipient of Ukraine’s Highest National Honor in Support of Science and Technology for the Republic of Ukraine.

Mike Blake: [00:11:31] Dr. Tatiana Lipovaya is the Head of Licensing and Trademark at IPR, where she’s been advising national and international clients on trademark filing, prosecution and enforcement, domain name infringements, unfair competition assignments, licensing, and all the work that goes with that. Has done a tremendous amount of work, in particular with some places that are very hard to do business in, Kazakhstan, Georgia, Armenia, Azerbaijan, Kyrgyzstan, et cetera.

Mike Blake: [00:12:05] And she, herself – I can’t believe it’s been this long. We knew each other when we were much younger – accumulated over two decades of experience in not just the legal aspect, but also becoming a top notch business advisor and holds a PhD in International Economics. She’s a member of INTA as well as the Ukrainian Association of International Economics. Has graduated with economics and management degrees of the Kiev National Economic University.

Mike Blake: [00:12:42] The firm itself has been in operation since 1999, and the sister group, IIBD, since before that, since at least the early 1990s. And I guess fittingly, it’s always seemed to me to be a very awkward translation, but the title of Ukrainian’s National Anthem is Ukraine is not yet perished, and neither has their firm. And I think when you think about what they’re doing, how they continue to do business in spite of all that’s going on, it gives you an appreciation as to why the Russians have, frankly, failed to achieve their military objectives by and large, and have redefined kind of what a Pyrrhic victory is, if you can even call it that.

Mike Blake: [00:13:34] I’m going to stop talking. I think I’ve established these are really good guests. You’re really going to enjoy talking to them. The more I talk, the less you hear from them. So, Leonid and Tatiana, welcome to the program. It is so good to see you and it’s so good to hear from you, more or less safe and sound. And I guess you’re joining us from Poland.

Leonid Kistersky: [00:13:57] Yes. Mike, thank you very much for such a very kind introduction. And sometimes I think that you know more about us than we do. Anyway, we can see that you to be, not only our long term friend, but we consider you also to be a founding father of our businesses and all endeavors since, as you rightly mentioned, we came together in the middle of previous millennium a long time ago.

Leonid Kistersky: [00:14:42] And in order to train Ukrainian entrepreneurs who set up Institute for International Business Development, which you helped to establish, and through which we started developing private business training people in Ukraine more than a quarter of a century ago already. And, in fact, IPR Group, it’s probably sort of a business which has been set up by the Institute for International Business Development and helped to develop even to a much more important private business now than the Institute for International Business Development is.

Leonid Kistersky: [00:15:42] So, both of us try to combine private business since I keep on provide consultancy before the war, of course, for governmental institutions, for international companies, for Ukrainian private businesses, just helping them to establish and to use high ethical norms in business, and was helping to develop high moral values of them, like personalities and like entrepreneurs. And still combining my activities with consultancy and private business.

Leonid Kistersky: [00:16:33] I still until now keep on training it to Ukrainian universities, Kiev National, Taras Shevchenko University, and Donetsk National University named after Vasyl’ Stus, which, eight years ago, moved from Donetsk to Vinnytsia in order to continue its activity. And they needed specialists in international economic relations. And that’s why I willingly joined them. And still I keep on doing this online until today and will continue to do so.

Leonid Kistersky: [00:17:25] Well, Tatiana is more a private businessman now.

Tatiana Lipovaya: [00:17:30] Businesswoman.

Leonid Kistersky: [00:17:33] Businesswoman, yeah. And probably she will tell herself about what is she doing in the IPR Group.

Tatiana Lipovaya: [00:17:45] I actually deal with the trademarks protection, prosecution. So, our IPR Group company, it’s a Ukrainian established and based in Ukraine business, but we deal with a lot of other countries. We provide our services in former Soviet Union countries, like Mike already mentioned, Georgia, Tajikistan, Turkmenistan, and other countries which are not accessible for foreigners because they have special laws, they have special rules which you need to know to deal with these countries, especially for business and for also intellectual property rights protection, there are a lot of specific in these countries.

Tatiana Lipovaya: [00:18:39] And I’m really happy that I’m involved in such kind of business. I received a lot of new skills. And all the time develop myself, not only as a business consultant, which I used to be for the last 20 years, but now I developed myself as a lawyer and as a specialist in intellectual property rights protection.

Tatiana Lipovaya: [00:19:11] So, it’s also important for developing business, because intellectual property rights is the very important part of the business development, especially for new companies, for companies who involve the new technologies, would like to protect their property rights, patents licensing. So, they need a lot of advice and a lot of support for doing business in our countries.

Leonid Kistersky: [00:19:48] So, we continue our businesses.

Mike Blake: [00:19:52] And I think that’s remarkable and I think that’s one thing I want to make sure our audience hears, is, how are you continuing your business?

Leonid Kistersky: [00:20:07] Well, as you know, we had to move from Ukraine further to west, west, west, and so we appeared in Poland. And, currently, we are in the City of Nowy Sącz in Poland.

Leonid Kistersky: [00:20:28] Of course, we used to live some 30 kilometers from Kiev, in the City of Vasylkiv. Probably does ring a bell for you since press wrote a lot of the city there was the [inaudible] and airport and the tank farm which was bombed every day, and we were living nearby. In a couple of weeks, the situation at that time became dangerous to my mind. And we read that Russian, you know, monsters rush into houses, kill people, rape women and girls. So, that’s why we drove to the west in a couple of weeks after the start of the Russian invasion.

Leonid Kistersky: [00:21:30] So, we were going west and west, and so Tatiana’s colleague wrote us when we were in Lviv, and we were invited to live three weeks in their house while her kids were away. And so, during this time, we somehow managed to do now business, establish again contacts to start doing business online. And so, moving in, we rented a small apartment in Nowy Sącz. There is a famous school of business here where I taught 25 years ago, again for some time, and my colleagues helped us to rent an apartment here.

Leonid Kistersky: [00:22:26] So, there are, of course, difficulties in doing business outside of Ukraine, but in Ukraine. But still it is quite possible as far as teaching is concerned, it’s almost no difference. You have good internet, you have good connections, and you keep on doing it online.

Leonid Kistersky: [00:22:52] With Tatiana’s business, it is more complicated. Tatiana probably will tell about it herself. Not only our businessmen, but also our government on a daily basis introduces new opportunities first to revive businesses in Ukraine and to further develop there.

Tatiana Lipovaya: [00:23:26] As for my business, we understood that in such situations which all of us need to move from Kiev to other places, some of us still stay in Ukraine. For example, in the western part of Ukraine, some of our staff – and some of our staff means women – who can leave Ukraine, they are moved to Poland and to other countries in the Western Europe. We understand there’s a weak possibility to keep our business awake. It’s only the distance, the remote work on a distance. It’s online work. Hopefully, our kind of business, because we provide the services for international companies, our business allowed us to work remotely.

Tatiana Lipovaya: [00:24:30] So, our technical specialists did as much as possible to secure our business, our services, emails, our database, to put them to the safe servers to support our everyday activities. We’re happy that the Government of Ukraine, especially the national body, which is responsible for intellectual property rights protection in Ukraine, allowed us to work and link to them also online. So, they provided the system which allowed us to apply and file trademarks, patents, other intellectual property requests to the office online without providing papers.

Leonid Kistersky: [00:25:37] You mean Ukrainian Patent Office?

Tatiana Lipovaya: [00:25:40] Yes. I mean the Ukrainian Patent Office, which still works, still keep their activities, and still provide full range of services to the clients and allowed us, as the patent attorneys, to conduct our activities on a very good level.

Leonid Kistersky: [00:26:03] In fact, Tatiana already mentioned a very good example of the Ukrainian State Patent Office, which provides all opportunities for this business to be on the surface, so to say. And private entrepreneurs, as you taught us, still used to take care of themselves. Moreover, I would like to say that we have a lot of big and middle sized businesses in Ukraine.

Leonid Kistersky: [00:26:38] And, now, our government helps them materially to move from those parts of our country, which is still bombed by Russian monsters, to move to the center of Ukraine, to the more safe areas. And until today, several hundreds of such businesses were moved to central part of our country and they keep on functioning. Also, government introduced several important privileges for businesses to function.

Leonid Kistersky: [00:27:20] Now, this is decreased taxation. For example, when I saw the consultant, I owned some small money and there is so-called simplified system of taxation. I was paying just 5 percent from turnover. Now, during the war time, it was brought down to 2 percent only. And we keep on paying taxes. We keep on paying now for our communal services for the apartments.

Leonid Kistersky: [00:28:02] Also, businesses were given an opportunity to have access to cheap credits, sometimes interest free credits. Tatiana, what is the amount of such? Several million hryvnia. Effective cost of hryvnia to U.S. dollar is approximately, roughly, 29 hryvnias per U.S. dollar. And you can get several million hryvnias of interest-free credit. So, there are simplified now procedures for registering your business, for reporting about your financial and other situations.

Leonid Kistersky: [00:28:53] So, I would like to say that it’s very sad that really this awful war triggered such support of private business in Ukraine. But, still, I am absolutely sure that after our victory, the war is over, business in Ukraine will be developing at a very high speed, especially internationally.

Mike Blake: [00:29:24] So, you said something I had not even thought of, and it reminds me of history. Because in World War II, the Soviet Union had to move entire industries east, out of the way of Hitler. And it hadn’t even occurred to me, but I suppose in a way that’s actually a skill and, in fact, if factories were built during Soviet times, they may have been designed to be moved again in case of an invasion. It’s history repeating itself.

Leonid Kistersky: [00:29:57] Yes, the history repeating. But to tell you very openly, we did not expect that this history repeats in Ukraine. We didn’t expect it.

Mike Blake: [00:30:12] Of course. And you didn’t think you’d be moving out west.

Leonid Kistersky: [00:30:18] I think [inaudible] how we cope with it.l

Mike Blake: [00:30:18] But I hadn’t even thought of that, but you’re right. I mean, there’s historical precedent that entire industries, factories can be picked up and simply moved to a part of the country that is not as close to the combat area.

Leonid Kistersky: [00:30:36] Look, now combat area, it’s all over Ukraine now. Of course, Russian bombed the country or fired missiles on a random basis. That is done deliberately to create panic, to create atmosphere of fright. But, still, people in Ukraine somehow coped with it, and business continues functioning despite. This is one of the purposes of Russia now, to destroy Ukraine.

Leonid Kistersky: [00:31:24] Again, also like you, Michael, I like history. And very recent history after the dissolution of the Soviet Union. And when Putin came to power, on many occasions, including internationally, he was saying that dissolution of the Soviet Union is the greatest, probably, awful event of the 19th Century. He did not mention First World War. He did not mention starvation. He didn’t mention Second World War. A lot of original wars. But dissolution of the Soviet Union. And this is his maniacal idea to restore it in some form. And, of course, without Ukraine, that is not attainable. And that’s why he is trying to do away with our country. But as you rightly said, he failed and continues to fail.

Mike Blake: [00:32:36] So, a thought that occurred is one of the things that already is resulting from the war, and I think will result for a generation, is that, economic ties between Russia and Ukraine will be effectively cut off. Forgive and forget is one thing. But I think there’s decades of healing that’s going to have to take place, I think, for that to occur. Belarus the same.

Mike Blake: [00:33:13] And as you know, oddly enough, you guys are as pro-Russia as any Ukrainians I’d ever met. You always took a very pragmatic view. Why do we want to make a big enemy? There’s no reason to do that. Not that it matters. I’m an American citizen, but I always thought it was smart. But now this has happened.

Mike Blake: [00:33:36] And there are certain things that Ukraine is not going to be able to get from Russia or Belarus anymore. Are there opportunities now for other countries to supply those things? What are those things that you can’t get from Russia anymore? Is it steel? Or is it fuel? Or is it something else? And are there opportunities for another country now to come in and and fill the void that is left because the Russia trade link has been cut off?

Leonid Kistersky: [00:34:09] Yeah. That’s true. Because sentiments in Ukraine against Russia now are self-understandable, because our country to no extent was anti-Russian. We treated Russia in a very friendly way. And we did not expect such a cruelty from their side and such behavior to do away with our country. And, now, I am, and all of us, are so anti-Russian and we cannot forgive what they did. And during my lifetime, I will never forgive them. And probably that will take several generations, somehow, to cool down with our sentiments towards Russia.

Leonid Kistersky: [00:35:11] Because a recent statistical polls indicated that now about 85 percent of Ukrainians see no way of improving the relations with Russia. And the other 12 percent just are still hesitant and they think that maybe it may take a generation or 10, 15 years. And only two or three percent believe that it could be repaired very soon. So, unfortunately, Russia should blame itself only for such a cut off of all kind of relations with Ukraine and with other countries.

Leonid Kistersky: [00:36:05] And so, I would like to separately single out one sphere that we have lost Russia and they have lost us for generations. But we gained a lot of friends, other friends. We are so grateful to Poland, which hosted 2.5 million Ukrainians now. And we feel such friendly relations and they take care of Ukraine and they support us. Also, the United Kingdom.

Leonid Kistersky: [00:36:47] Separately, I would like to mention the United States, which is the country with which we have long term friendly relations, including a lot of individuals. I would like to mention Al and Cher who introduced us to each other, and we continue this cooperation and friendly. Of course, the United States is the world leader, which provides moral, economic, military, all types of support. And other countries, I cannot just mention every country, a lot of them.

Leonid Kistersky: [00:37:29] That is why we are very optimistic about the outcome of this war and the prospects of business development in Ukraine. Michael and John, you have our invitation to meet in Kiev after the victory in this war and you will enjoy our hospitality.

Mike Blake: [00:37:56] I’ll be on the first plane.

Leonid Kistersky: [00:37:59] Yeah.

Mike Blake: [00:38:00] I’ll be on the first plane. So, now that trade has been cut off, what did Ukraine used to import from Russia that it can’t get anymore and now has to go to a different source?

Leonid Kistersky: [00:38:14] First of all, oil and gas. Anything else is of meager importance. It could not be even mentioned. And so, moreover, they are deliberately bombing and destroying our tank farms. They bombed one of them, I mentioned near Vasylkiv, where we used to live before the war for several years, for almost ten years already. And so, they wanted to cut off, not only supplies of oil, but also to destroy available oil tanks in our country.

Leonid Kistersky: [00:39:06] And we started to receive gas on a reverse basis from Europe. And, again, I would like to mention the very important initiative of the United States is to discontinue buying oil, gas, and coal from Russia, which is extremely important. But more so, United States announced, to put it correctly, the availability of their strategic oil reserves for the international market. And, you know, it’s like a positive signal for the market and other countries join this initiative. And, now, about 30 countries, including the United States, made their strategic oil reserves available for the international market.

Leonid Kistersky: [00:40:11] So, due to this, our military drivers and other sectors of economy started receiving gas – I mean, petrol. Meaning petrol, you call it gas in the United States. But for us, gas is gas, petrol is petrol. So, we started receiving it by railways, through automobile supplies in the country. Of course, we felt sometimes, you know, deficit of petrol in Ukraine, but still it is in the quantity sufficient for the country to survive now. So, energy resources, of course.

Leonid Kistersky: [00:41:07] Same thing with Belarus. But we were supplying services of electricity for Belarus, which we do not do anymore. And we discontinued our electricity system from Russia a couple of months ago. And it took Europe, European Union, only about three days to include Ukraine into the European system of electricity. And so, it functions properly. So, step by step, we are discontinuing our ties and our business links with Russia, Belarus, and other countries from former Soviet Union, and switched it to Europe and to the United States. Among the countries, of course, I would like to mention Canada and North America.

Mike Blake: [00:42:09] Of course, there’s a very large Ukrainian diaspora in Canada, especially in the western part of the country.

Leonid Kistersky: [00:42:15] Which raised their voice and provide support.

Mike Blake: [00:42:20] So, another challenge to the economy must be labor, right? Four million people have left. Ten million people have been displaced. We don’t know how many people have been killed. I’m guessing 100,000 people have probably been killed. We just can’t count them yet. And pretty much almost every able bodied man, whatever they were doing six weeks ago, they’re now holding a gun. And many women as well, by the way. There’s a lot of reports that women are also in active military service as well. And is that impacting simply the supply of labor to actually do economic things?

Leonid Kistersky: [00:43:11] Of course, this is an issue which is widely discussed, but there are speculations how many people were killed in Ukraine. I would like to say that especially we have heavy casualties among the civil population, of course. Probably today you’ve heard that they bombed the railway station killing several thousands of people and wounding more than 100.

Leonid Kistersky: [00:43:52] But our economy now is being restructured. And, again, it’s an irony that war forces us to reform at a quicker pace, introducing higher technologies which are not so labor intensive. And that is the way out of the situation. More so, as I see from internet, IPR Group, from Tatiana’s business, that ladies now do all this business. Even sometimes Tatiana invites our 18 year old daughter, Olga, to join. So, even kids, even grown up already with kids, but, still, they do what they can to make the country not to feel the deficit of a labor force. That is, high technologies, less labor important technologies. And, of course, our female population started to do a lot of work, which they were not even thinking about before the war.

Mike Blake: [00:45:13] So, you mentioned something that surprised me positively. I think you said the hryvnia is something around 29 to the dollar, is that correct?

Leonid Kistersky: [00:45:26] Yes. That is correct.

Mike Blake: [00:45:29] So, it’s fairly –

Leonid Kistersky: [00:45:31] 29.3 it seems to be.

Tatiana Lipovaya: [00:45:33] [Inaudible].

Leonid Kistersky: [00:45:34] Yeah.

Mike Blake: [00:45:35] 29.3.

Tatiana Lipovaya: [00:45:37] It’s by the National Bank.

Mike Blake: [00:45:40] So, is the banking system able to still function? It sounds like it is.

Leonid Kistersky: [00:45:51] Yes. Look, again, I like very much comparison and historic examples like you. And before the war, the exchange rate of hryvnia-dollar was something 27.9, about 28. Now, it’s 29.3. It says that our government understands the basics of the economy. If we recollect historically, Adam Smith, who wrote his famous book some 250 years ago, he said, “Stable exchange rate is a fundamental principles of successful functioning of any economy.” And he explained why.

Leonid Kistersky: [00:46:51] So, our National Bank maintains stable, despite there is higher inflation – of course as compared before the war period – but still the exchange rate is very stable.

Leonid Kistersky: [00:47:10] Examples, we keep on working. We receive hryvnias on our business cards, and we can pay by those cards in Poland. Our National Bank agreed with the Polish banking system about the exchange rate, which is fair enough, and so we can pay by hryvnias from our business cards in Poland. Tatiana, maybe you will tell the rest.

Leonid Kistersky: [00:47:46] For businesses, there are still some problems since the beginning of the war [inaudible] because budgetary deficit and, again, a lot of countries support us on a grand basis supporting our budget. But, still, our Ministry of Finance and National Bank are doing a lot of useful things on their own. At the beginning of war, they stopped currency operations, which was not very useful for business but, still, it helped our economy to survive and our banking system to function. And today, it was announced that they are easing those regulations in order to allow our businesses to function internationally to make payments and to receive payments.

Mike Blake: [00:48:43] So, that means that they’re loosening capital controls.

Tatiana Lipovaya: [00:48:46] Yes.

Leonid Kistersky: [00:48:47] Yes. Exactly, Michael. Exactly. Yeah. Despite there are still some limitations, but they are also because –

Tatiana Lipovaya: [00:48:59] Emergency goods, medical goods, and for humanitarian purposes. They just drove down this –

Leonid Kistersky: [00:49:06] Easing, easing regulation.

Tatiana Lipovaya: [00:49:08] And they allowed for payments in the foreign currencies as well.

Leonid Kistersky: [00:49:15] That is true, especially for critical sectors of our economy, like agriculture, chemistry, and others.

Tatiana Lipovaya: [00:49:27] It’s a first step for the future.

Leonid Kistersky: [00:49:33] For future business development internationally.

Mike Blake: [00:49:40] So, as a matter of history, any time that there’s a great disruption, such as a war, that also sometimes creates opportunities in its aftermath. And I’m curious, what do you see will be the opportunities of a post-war or post-victory Ukraine?

Leonid Kistersky: [00:50:09] I am very optimistic about those opportunities. Of course, for those weeks, maybe weeks or month ahead of us, in this state of war, I hope people understand the importance of real values. You cannot imagine how people in Ukraine became friendly to each other. I was always surprised in the United States or in Western Europe, people were smiling to each other, helping each other. When driving, they’re making friendly gestures. They are just letting all the cars to go.

Leonid Kistersky: [00:50:55] It was not the case in Ukraine before the war, as you probably know. But, now, it took us several weeks to cover this huge distance. So, before war period, I see a period of very quick reconstruction of our country. Of course, our government and our administration are ready to take steps to achieve agreements with countries, with companies for reconstructing Ukraine.

Leonid Kistersky: [00:51:35] And remember that some 22 years ago, I published an article – it is available in English – Marshall Plan for Ukraine. At that time, I was thinking of reforming the economy of Ukraine. But, now, it will be a real Marshall Plan for Ukraine to reconstruct the country, and ways of reconstruction, and ways of further development will be unprecedented, believe me. And Ukraine may become, in some near future, a member of the European Union. And we have support of key players in Europe and in North America. So, I’m very optimistic about this period. Of course, war changed people in my country in a very positive way.

Mike Blake: [00:52:33] I’m talking with Dr. Leonid Kistersky and Dr. Tatiana Lipovaya. And the topic is, Should I do business in Ukraine? So, I’m going to ask you a very unfair question, but I want to know the answer. I know our listeners want to know the answer. And that is, how do you think this ends? What does it look like? Is there a total Ukrainian victory? Is there a return to the 2014 situation? Is it something else? How does this end?

Leonid Kistersky: [00:53:10] Michael, it’s one of the most probably difficult questions for me to address. And I could just mention that there are possible scenarios. If we receive more weapons, more support, then maybe rather quickly with our victory. Of course, Russia behaving in such a monstrous way because before recently, nobody dared to protect itself and to give them heavy blows, which they received from Ukraine.

Leonid Kistersky: [00:54:06] If we come back to a more remote history, I always remember an article so-called Long Telegram of the prominent American Historian Diplomat George Kennan. In his Long Telegram, who explained the essence of Russian empire and of the Soviet Union. And Russia inherited the Soviet Union efficiently, all of them. So, it will be attacking and attacking its neighbors because of its traditions. They are not capable of creating something on their own. They are capable of destroying other people.

Leonid Kistersky: [00:54:58] Let’s take now very recent history, for example, 1993, occupation of part of Moldova, Pridnestrovian so-called, non-recognised artificial republic. Then, ’08 the War in Georgia, they unleashed and occupied Abkhazia and South Ossetia. Then, Syria, other countries, some other continents, and 14 that is occupation of Crimea and part of Donbas. And at that time, there was their market. They’re in charge of Ukraine, which, in fact, allowed infiltrating our country by Russian agents.

Leonid Kistersky: [00:55:58] So, now, it’s different. And February 24, Russia attacked Ukraine, it received severe blows and keep on receiving it. So, end of the war depends decisively, probably not on negotiations, but on the performance of our military, and our territorial defense, and on patriotic support of all Ukrainian population, which is practically unanimous now. So, it may take more time. It may take several weeks or several months.

Leonid Kistersky: [00:56:51] I don’t like to see freezing this conflict because our military are in a position, not only to defend, but also to attack. And, now, I see that Western democracies at least started supplying heavy weapons to Ukraine, which may be a decisive factor in achieving a victory in the quite predictable future. Anyway, I will inform you. I’ll be the first to inform you that this is end of war. But end of war could be only a victory for Ukraine.

Tatiana Lipovaya: [00:57:39] Yeah.

Leonid Kistersky: [00:57:41] As our president told this.

Mike Blake: [00:57:44] I think not many people would doubt you at this point. Underestimate Ukraine at your peril, I think, is probably a good way to put this and maybe a good way to wrap this up. I know it’s late there. You have a lot of other things that you need to take care of.

Mike Blake: [00:58:08] But I would like to ask you this, and that is, many people are asking me – and I’m helping them as best I can, but you probably have better information – people, individual citizens, in the United States do want to donate money or other things to support Ukrainian refugees, to support Ukraine’s struggle against Russia, are there organizations that you recommend that you think are the most helpful that provide the most direct assistance on the ground?

Leonid Kistersky: [00:58:44] Yeah. First of all, Michael, when we will prepare the information which we promised to do after the show, we will probably give you official addresses how to do it. But may I tell you what Tatiana and I are doing in this respect. We are not rich people, as you know, but at least we are well to do, I would like to say some middle Ukrainian class.

Leonid Kistersky: [00:59:19] First of all, we donate money to official sides of Ukraine for our military. Then, we know a lot of individual families whose husbands or fathers now in the military of Ukraine and they require some equipment, some arms. And the people who know those family, we put our money together in order to buy what they require. They have all these devices which make it possible to see during night time, for example, the necessity of such.

Leonid Kistersky: [01:00:16] Then, we like animals very much, and we have a cat here in Poland. We took it together. We said that all of us or nobody. So, all of us. And we donate money to special organizations which support animals. Plus, we buy tickets for zoos in various parts of Ukraine. They appeal, “Please buy tickets for our zoos online. Transfer money for buying tickets.” And they feed their animals.

Leonid Kistersky: [01:00:55] So, there are a lot of opportunities how to support Ukraine, and probably people in the United States they would prefer to support it in some official way, which supports directly Ukrainian military or humanitarian support. And we will send those addresses to you, so you could provide your fellow citizens with those reliable addresses.

Mike Blake: [01:01:33] Very good. Well, we’ll make sure that those get published when we publish this show next Thursday.

Leonid Kistersky: [01:01:40] Yeah.

Mike Blake: [01:01:44] Leonid, Tatiana, I can’t tell you how this is a confusing time. It’s a very difficult time, obviously. But I truly thank God that you and Olga are safe. I know many others are not. And I wish I could help them, but I can’t. But I can at least speak to you. And I cannot imagine what you’re going through physically, emotionally. But, again, if there’s any way that I or my family can help or our community here – and we do even have a Ukrainian church here in Atlanta – please let us know. I would like to know.

Mike Blake: [01:02:33] But you’ve shared, I think, a lot of information that I don’t think gets reported here. And I’m extremely grateful. [Foreign Language] that you agreed to come on our show. Yeah, I still remember a little Ukrainian. In fact I find it very hard to speak Russian right now. It’s emotionally very difficult. But thank you very much for, again, being on the program and for being patriots.

Mike Blake: [01:03:06] And I think you guys realize and we realize in America that the war for, in many cases, humanity’s soul is being fought in Ukraine. We always thought that it would be in Iraq over oil for something like that. But it turns out it’s in Ukraine. And, you know, we all are pulling for you. And we just thank you for your courage. We admire you for your courage and the sacrifice you’re making. And, hopefully, you’ll achieve a swift victory and get this thing over with and send a message that this just was a bad idea from the outset.

Leonid Kistersky: [01:03:49] Yeah. Michael, may I say that we are very grateful to our American friends, Michael Blake and John Ray, and to all of the American people who are interested in Ukraine, who support Ukraine. And so, this is minimum what we can do now for American-Ukrainian development sharing our information with you. And we will be more than happy to do it in the future. We are so grateful to you. Thank you, guys.

Tatiana Lipovaya: [01:04:28] Thank you very much.

Mike Blake: [01:04:30] Well, all right. Thank you very much. And have a pleasant evening. And we will tell you when the podcast is ready so that you can see it and listen to it and, hopefully, share with other people that you think will be interested and have an impact.

Leonid Kistersky: [01:04:44] Thank you very much, Michael.

Tatiana Lipovaya: [01:04:45] Thank you, Michael.

Leonid Kistersky: [01:04:45] And we will try to share this show with our Ukrainian contacts back in Ukraine to demonstrate to everybody that America fully supports us on all levels. Thank you.

Mike Blake: [01:05:01] [Foreign Language]. Thank you very much and all the very best.

Leonid Kistersky: [01:05:08] [Foreign Language].

Tatiana Lipovaya: [01:05:10] [Foreign Language].

Mike Blake: [01:05:11] Okay. That’s going to wrap it up for today’s program. And I’d like to thank Dr. Leonid Kistersky and Dr. Tatiana Lipovaya so much for sharing their expertise with us.

Mike Blake: [01:05:21] We will be exploring a new topic each week, so please tune in so that when you’re faced with your next business decision, you have clear vision when making it. If you enjoy these podcasts, please consider leaving a review with your favorite podcast aggregator. It helps people find us so that we can help them.

Mike Blake: [01:05:38] If you would like to engage with us on social media with my Chart of the Day and other content, I’m on LinkedIn as myself and @unblakeable on Facebook, Twitter, Clubhouse, and Instagram. Also, check out my new LinkedIn Group called Unblakeable’s Group That Doesn’t Suck. Once again, this is Mike Blake. Our sponsor is Brady Ware & Company. And this has been the Decision Vision podcast.

 

 

Decision Vision Episode 161: Should I Turn My Side Hustle into a Full-time Business? – An Interview with Natasha Tucker, Happy Hippie Gardening

March 24, 2022 by John Ray

Happy Hippie Gardening

Decision Vision Episode 161: Should I Turn My Side Hustle into a Full-time Business? – An Interview with Natasha Tucker, Happy Hippie Gardening

Side hustles can add essential part-time income, but how and when should you transition that side gig into a full-time business? Natasha Tucker, President and CEO of Happy Hippie Gardening, found herself doing just that, as a few jobs on the side became a thriving landscape services business on word of mouth alone. She and Mike Blake discussed how it evolved for her, the decision to make it a business, the hurdles she faced, and much more. Decision Vision is presented by Brady Ware & Company and produced by the North Fulton studio of Business RadioX®.

Happy Hippie Gardening

Happy Hippie Gardening is a trusted landscape company operating in the Huntsville, AL metro market.

They offer residential and commercial landscape and maintenance services. Their hippies love weeds, but they do more than get dirty weeding flower beds.  They also add seasonal color, apply mulch, do shrub pruning, create stacked stone borders, and a lot more.

What they really do – “We Get Dirty So You Don’t Have To.”

Company website | Facebook | Instagram

Natasha Tucker, President and CEO, Happy Hippie Gardening

Natasha Tucker, President and CEO, Happy Hippie Gardening

Natasha is a relentless entrepreneur, daring businesswoman, loving mother, devoted wife, adoring daughter, caring granddaughter and a sometimes serious sister. In her many business adventures, she has successfully launched, acquired and/or owned multiple businesses including a coffee shop, children’s boutique and landscape company to name a few.

The daughter of an original 1960’s hippie and master gardener, Natasha has been working in flower beds, and getting dirty, since she was a girl. After years of maintaining her own flower beds, drawing from her childhood landscaping experiences, Natasha decided to help her hippie friends keep their flower beds looking beautiful too. After many months and much encouragement, she decided to turn her gardening side hustle into a legit business. So… on Valentine’s Day 2020 she launched Happy Hippie Gardening!

Her genuine desire and mission in business is to help others enjoy their landscapes, love their flower beds, and perhaps find a little peace and happiness. Natasha is your lovable suburban hippie who absolutely, positively loves to create, renew and maintain beauty, peace, and harmony in flower beds and landscapes. Peace & Love.

LinkedIn

Mike Blake, Brady Ware & Company

Mike Blake, Host of the “Decision Vision” podcast series

Michael Blake is the host of the Decision Vision podcast series and a Director of Brady Ware & Company. Mike specializes in the valuation of intellectual property-driven firms, such as software firms, aerospace firms, and professional services firms, most frequently in the capacity as a transaction advisor, helping clients obtain great outcomes from complex transaction opportunities. He is also a specialist in the appraisal of intellectual properties as stand-alone assets, such as software, trade secrets, and patents.

Mike has been a full-time business appraiser for 13 years with public accounting firms, boutique business appraisal firms, and an owner of his own firm. Prior to that, he spent 8 years in venture capital and investment banking, including transactions in the U.S., Israel, Russia, Ukraine, and Belarus.

LinkedIn | Facebook | Twitter | Instagram

Brady Ware & Company

Brady Ware & Company is a regional full-service accounting and advisory firm which helps businesses and entrepreneurs make visions a reality. Brady Ware services clients nationally from its offices in Alpharetta, GA; Columbus and Dayton, OH; and Richmond, IN. The firm is growth-minded, committed to the regions in which they operate, and most importantly, they make significant investments in their people and service offerings to meet the changing financial needs of those they are privileged to serve. The firm is dedicated to providing results that make a difference for its clients.

Decision Vision Podcast Series

Decision Vision is a podcast covering topics and issues facing small business owners and connecting them with solutions from leading experts. This series is presented by Brady Ware & Company. If you are a decision-maker for a small business, we’d love to hear from you. Contact us at decisionvision@bradyware.com and make sure to listen to every Thursday to the Decision Vision podcast.

Past episodes of Decision Vision can be found at decisionvisionpodcast.com. Decision Vision is produced by John Ray and the North Fulton studio of Business RadioX®.

Connect with Brady Ware & Company:

Website | LinkedIn | Facebook | Twitter | Instagram

TRANSCRIPT

Intro: [00:00:01] Welcome to Decision Vision, a podcast series focusing on critical business decisions. Brought to you by Brady Ware & Company. Brady Ware is a regional, full-service accounting and advisory firm that helps businesses and entrepreneurs make visions a reality.

Mike Blake: [00:00:21] Welcome to Decision Vision, a podcast giving you, the listener, clear vision to make great decisions. In each episode, we discuss the process of decision making on a different topic from the business owners’ or executives’ perspective. We aren’t necessarily telling you what to do, but we can put you in a position to make an informed decision on your own and understand when you might need help along the way.

Mike Blake: [00:00:44] My name is Mike Blake, and I’m your host for today’s program. I’m a director at Brady Ware & Company, a full-service accounting firm based in Dayton, Ohio, with offices in Dayton; Columbus, Ohio; Richmond, Indiana; and Alpharetta, Georgia. I am managing partner of the Strategic Valuation and Advisory Services Practice, which brings clarity to the most important strategic decisions that business owners and executives face by presenting them with factual evidence for such decisions. Brady Ware is sponsoring this podcast, which is being recorded in Atlanta per social distancing protocols.

Mike Blake: [00:01:16] If you would like to engage with me on social media with my Chart of the Day and other content, I’m on LinkedIn as myself and @unblakeable on Facebook, Twitter, Clubhouse, and Instagram. I also recently launched a new LinkedIn Group called Unblakeable’s Group That Doesn’t Suck, so please join that as well if you would like to engage. If you like this podcast, please subscribe on your favorite podcast aggregator and please consider leaving a review of the podcast as well.

Mike Blake: [00:01:42] So, today’s topic is, Should I turn my side hustle into a fulltime business? And I’ve been trying to find a guest for this topic for a while because I just run into so many people with side hustles. And, in fact, I would be willing to bet you if I actually looked at the data – I didn’t. I looked a little bit. I did a sneak peek.

Mike Blake: [00:02:04] When I first moved to Atlanta about 19 years ago, it seemed like every other person that I met had a side hustle of some kind. Now, back then, I was primarily in real estate. Because back then real estate was pretty much shooting fish in a barrel. It might be now, too, but don’t take my advice. I’m not a real estate guy. I’m not even very good at Monopoly. So, this is not the real estate investment show.

Mike Blake: [00:02:30] But it is interesting in how many people do seem to have a side hustle, and the statistics are supportive of that. According to Side Hustle Nation, 45 percent of working Americans have a side hustle and 20 percent of those bring in over $1,000 a month with those side hustles. Which is, for many households, $1,000 a month is a significant addition of income to a household.

Mike Blake: [00:03:01] And so, I’d be willing to bet many of you who are listening either have a side hustle, or are thinking of a side hustle, or have actually a business today that started off as a side hustle. So, I anticipate that this is going to be a topic of significant interest.

Mike Blake: [00:03:20] Now, I don’t have a side hustle. I can barely keep track of the one job that I have. But, fortunately, joining us today is somebody who’s done this successfully, and that is Natasha Tucker, from one of my favorite cities in the planet, Huntsville, Alabama. It is just one of the coolest places. It has really two of my favorite things. It has rockets and has German food. And those two things are actually related if you go back and sort of learn the history. But it is just a terrific place.

Mike Blake: [00:03:49] And Natasha is Founder and CEO of Happy Hippie Gardening. Happy Hippie Gardening is a trusted landscape company operating in the Huntsville, Alabama metro market. They offer residential and commercial landscape and maintenance services. Their hippies love weeds, but they do more than get dirty weeding flowerbeds. They also add seasonal color, apply mulch to shrub pruning, create stacked stone borders, and a lot more. Basically, anything that I don’t do. They get dirty so that you don’t have to.

Mike Blake: [00:04:20] Natasha is a relentless entrepreneur, daring businesswoman, loving mother, devoted wife, adoring daughter, caring granddaughter, and sometimes serious sister. In her many business adventures, she has successfully launched, acquired, and/or own multiple businesses, including a coffee shop, a children’s boutique, and landscape company to name a few. The daughter of an original 1960s hippie and master gardener, Natasha has been working in flower beds and getting dirty since she was a girl. Natasha Tucker, thank you for getting dirty with the Decision Vision podcast.

Natasha Tucker: [00:04:52] Yeah. Absolutely. Thank you so much for having me.

Mike Blake: [00:04:53] Sorry, it’s not that kind of podcast, but you get what I mean.

Natasha Tucker: [00:04:56] Hey, you know, we’ll try to keep it clean.

Mike Blake: [00:04:58] We will keep it clean. It has to be safe for work.

Natasha Tucker: [00:05:01] Exactly.

Mike Blake: [00:05:01] But thanks so much for coming on the program. And as I think I always am, but I say this in all sincerity, it’s a topic I’ve been wanting to do for a while, but haven’t felt the right person to do it. And then, your husband and I had just a conversation about entirely different topic and he had mentioned what you are into. I’m like, “Oh, I’ve got to get her on the podcast.” So, thanks so much for coming on.

Natasha Tucker: [00:05:27] Well, thank you. I’m so excited to be here.

Mike Blake: [00:05:29] So, I introed your business and kind of how you got into it, which is fascinating. So, what I’d like to do is I’d like to share with our listeners your origin story. Like, Spider-Man got bit by the radioactive spider and Superman was thrown off of his exploding planet. What’s the origin story of your business?

Natasha Tucker: [00:05:56] Well, it kind of started off with me trying to figure out what I wanted to do next. I’m kind of in a place at that time where we needed to get some extra income coming in. And I knew what I did not want to do. I did not want to go back into the service industry as far as like waitressing and things like that. I did not want to go back into the classroom. I don’t do well behind a desk.

Natasha Tucker: [00:06:30] So, it was it a big thought process. I felt stuck. And then, all of a sudden, it was the fall of 2019 and I had some friends ask, “Hey, you’re good at this. Can you please come and shred my shrubs and do some mulch? Because my lawn guys don’t want to do it.” And that was my initial little ping there that there might be a need. So, I did theirs, and then word got around, and I started doing more people’s flowerbeds.

Natasha Tucker: [00:07:05] And as that month, month-and-a-half, or fall went on, I realized this is a need that lawn guys are missing. I mean, they don’t want to have to stop and do the tedious. They want to be able to cut and go. And there’s a lot of people that don’t have the time to take care of their flowerbeds. So, that fall went by and I just kind of sat on it, because then, of course, through winter there wasn’t much then to do. So, I kind of sat on it for a little while. And as soon as the sun popped out in January and it felt warmer than normal, I started getting phone calls. And I was like, “Whoa. Okay.” So, it kind of went from there.

Mike Blake: [00:08:01] So, I have to ask and I’m just curious, you said you’re getting calls because the lawn guys wouldn’t do the shrubs and flowers and stuff. Is that a hierarchy? Do the lawn people feel like they’re too good to do that stuff? Is that the issue? Or is there something else at work?

Natasha Tucker: [00:08:20] I think that it’s more of the tedious part of it. They don’t want to get on their hands and knees and pull weeds. If you do get them to trim your shrubs, most of the time, they don’t even know what kind of shrubs they’re trimming. And when they leave, it looks like they’ve packed it to death with a chainsaw. And I’ve had quite a few people who have that happened to and it’s sad and mortifying.

Mike Blake: [00:08:51] I’ve had that happen too. I had my lawn guy do one of our shrubs exactly once, and it looked like my shrub was about to join the Marine Corps.

Natasha Tucker: [00:08:59] Exactly. Exactly. So, the attention to detail and the not minding taking the time to do it. And also one guy, you know, they charge – I don’t know what they charge there – anywhere from $50 to 75 a cut here. Well, they got to get in and out within 30, 45 minutes. You can’t be tedious and pay attention to detail with that amount of time that you’re being booked for. So, I think that’s basically why.

Mike Blake: [00:09:38] So, when you started this side hustle, did you work outside the home? And if so, what was that role?

Natasha Tucker: [00:09:47] I have done many. Especially 2018, 2019, I have had a couple of other little smaller jobs. Because I do have three children, and at the time, let me say, Isabela, my youngest, she was still, like, preschool age. So, I did not want fulltime then just because of schedule and kids. And at the time I did not have drivers yet. So, there was a lot of mommy taking around, and busing, and all that fun stuff.

Natasha Tucker: [00:10:28] So, right before I started with Hippie, I did have a fulltime desk job for a while. I realized that that was just not going to work with our schedules and with Rob’s schedule, so I did some retail work. I worked for one of my favorite stores. What else did I do? And then, I did try the waitressing thing again. I did it for many years and I realized, no, I’m just not doing that again.

Mike Blake: [00:11:03] So, at some point when this became a side hustle, not just sort of doing a person a favor, how many hours a week do you think you were doing that at first?

Natasha Tucker: [00:11:15] At first, maybe about ten. As I started getting more jobs, my dad would come and help me. So, that way I wasn’t spending five hours at one house necessarily. But it started off probably about ten hours a week to start with.

Mike Blake: [00:11:36] And is that something that you’re really embracing or did you have to kind of get dragged into it a little bit?

Natasha Tucker: [00:11:42] No. I actually fully embraced it. I love being outside and just having that freedom of I’m outside, I’m getting fresh air, I’m getting my exercise, and I’m getting paid to do it. And I could work with it when I needed to. I still had the flexibility at that point to still be the mommy bus. And so, all in all, it worked great.

Mike Blake: [00:12:18] So, when you started it, did you have any plans at that point to make this kind of a fulltime gig?

Natasha Tucker: [00:12:25] I really didn’t. I knew I loved it and I knew that it was working well for me. At the time, I did not expect for it to hit the fan, so to speak. And so, when it did that next spring in 2020, I was kind of blown away. And that’s when I was like, and even Rob being the business guy that he is, he was like, “We need to probably get your licensing and all that done and tax purposes,” so I can be legit.

Mike Blake: [00:13:08] Rob is your husband. For our listeners who haven’t met you guys, Rob is your husband.

Natasha Tucker: [00:13:11] Yes. So, he wanted me to be a legal hippie and make sure that I did things by the book as far as the business side goes. And it just kind of just happened, which worked for me because I loved it.

Mike Blake: [00:13:33] I think that’s one of the best ways to grow a business is have it organic – no pun intended. I tell people all the time that a business is like a Great Dane. And if you have to just sort of push and pull and it’s really hard to get the dog to move, then you probably don’t have the right dog. You probably don’t have the right business.

Mike Blake: [00:13:59] But on the other hand, if the Great Dane takes off down the sidewalk and nearly yanks your shoulder out of your socket and you’re running behind trying desperately to keep up with it, that’s the right business for you. That’s the market telling you that you’re really on to something.

Natasha Tucker: [00:14:15] Yes. Absolutely. And to see that the need was still there and it was greater and it grows. We’ve done very little as far as marketing. I started off with my Facebook Page. My husband, Rob, did the website. So, it was all done in-house and very manageable. And it’s all word of mouth as well. I love my people. That’s the other side of this business that I love. I love connecting with people and hearing them and saying, “Okay. This is what we want.” Even down to the colors that we pick, the style that they want. It’s individuality at its finest is your curb appeal. And so, it’s been a lot of fun. And I think that’s why I have grown so much, too, is if you enjoy what you’re doing, it shows.

Mike Blake: [00:15:22] Yeah. Yeah. I think that’s right. So, as you’re building this business or as you are trying to kind of lasso it, wrestle it to the ground – maybe that’s a better way to put it – did you have any doubts? Did you have any doubts about your ability to grow the business, run the business, be successful with it? Or did you kind of know just from day one, “Yeah. I got this”?

Natasha Tucker: [00:15:49] No. It’s a very scary ride. I think any time you’re doing something new and you are in a totally different ballgame than you’ve ever played, it can be super scary. We, all, as humans have that fear of failure kind of thing going, especially when you have your family depending, you have your customers, and your ego – let’s just be real. And so, it can be super terrifying, especially when you can’t control the weather. You can’t control supply and demand right now. There’s a lot of things that you can’t control as it is. So, being able to just keep pushing and try your best to stay levelheaded and keep the faith that, “Hey, it will work out”. Sometimes you just got to be a little patient. So, yeah, it can be terrifying.

Mike Blake: [00:16:54] So, how long did it take you from neighbors saying, “Hey, would you come help with our garden and, by the way, we’ll pay you” to getting to where you are now, where you’ve got it as an intentional, thriving business.

Natasha Tucker: [00:17:11] Well, I would say probably about four to five months. It was that fall of 2019 and then starting spring of 2020, it just kind of ran. It just took off and almost wanted to leave me behind. And, of course, spring of 2020 was when everything else hit the fan. And so, that was scary, I just started this in February and now the whole world is shutting down, which actually helped me a lot. Because I don’t work indoors. I work outdoors. People were working from home.

Natasha Tucker: [00:17:55] Especially here in Huntsville and Madison, most people were working from home. And they were forced to look at their flower beds. They were no longer doing the rat race in life and leaving and coming home at dark and not looking. Now, they’re sitting at their kitchen table with their computers looking out and going, “Oh, my God. What have I done to my yard? Or what have I not done?” And so, that actually spurred a huge push in my business. All of a sudden, like, it was a huge spike, which is great.

Natasha Tucker: [00:18:36] And then, the next year, 2021, it was stimulus checks. These little projects they’ve been wanting to do for forever, here you go. Now, they have the money for it. So, everything comes and goes and it ebbs and flows. But it always, always ends up evening out.

Mike Blake: [00:19:02] So, I’m curious, you’ve probably heard of this before. I often hear stories about somebody who cooks really well and then somebody will say, “You know what? You ought to open up your own restaurant.” And as often as not that person will say, “You know what? If I had to do it for a living, I wouldn’t like doing it anymore.” And I get that. I have hobbies. I’m into computers. I’m perfectly happy to spend a weekend fixing my own mistakes. But I would just blow my brains out if I had to make a living of fixing other people’s mistakes. So, I get that.

Natasha Tucker: [00:19:38] Yes.

Mike Blake: [00:19:39] And I’m curious, has now making what was a passionate hobby, one you had, really, from just being a little girl, how has turning that into a business impacted your passion for it, if at all?

Natasha Tucker: [00:19:53] If anything, it’s helped grow it because of the fact it is a constant learning thing. You know, there’s always something new to learn. There’s always different plants to learn. Every yard is different. Every customer is different. So, I think the difference is that, if it did become super repeat, like if I was just cutting grass and weeding and blowing and going, I would probably get bored to death. But the fact that every day is a different day, every plan that I draw up is different, I think the fact that it’s engaging me in that way, I still totally love it.

Mike Blake: [00:20:49] Now, if you’re willing, I’d like to talk about the impact on your family. Because your role economically has changed. Has that limited or changed the way that you fulfill your other roles as mother, wife, house manager, that sort of thing? And if so, has the family been supportive? How they had to adjust? How have you guys all had to adjust to now accommodate this thing that you’ve unleashed on the world with the gardening business?

Natasha Tucker: [00:21:19] Well, yes. As a wife and as a mother, let’s just say, don’t ever judge my house when you come in it. I try. I try. You know, me being gone now that the kids are even older – our eldest has graduated, my son drives, and we have a second grader – they’ve grown a little bit as well so that’s helped as far as they’re being self-reliant. Which is kind of sad, they don’t need mommy as much. But as far as I still do cook at least five nights out of the week. I do still try to make it to all the games and sports and things like that. That just means that mommy’s up until 1:00 a.m. every night.

Natasha Tucker: [00:22:20] And the balance is hard. I think that is probably the toughest part on me, is, finding the grace as a parent and as a small business owner with myself. Not beating myself up too hard for the little things. And so, my family has been great. This week is spring break, so my parents have our youngest. So, I’m all over the road and booked out this week. So, everyone has been very supportive. They’ve been my best cheerleaders.

Natasha Tucker: [00:22:59] And there’s just certain things that I had to let go of as far as my standards. No, my house isn’t perfectly clean. And, yes, there’s laundry. But I do make it a point to do my best as far as still being present. And I guess that means less sleep.

Mike Blake: [00:23:23] If you don’t mind my asking, how much sleep do you typically get a night?

Natasha Tucker: [00:23:27] Whew. Probably about five hours, maybe.

Mike Blake: [00:23:31] Okay. Okay. Okay. So, you’re really at it then. That’s a tough number. And I’m curious here, and we’ll get a little sociological, but that’s okay. We can do that here on the Decision Vision podcast. And that is that, I do think that that’s harder on women because of social media. And social media leads you to present the polished sort of market ready version of yourself. And that tends to impact women, I think, more than it impacts men in terms of making them feel badly about themselves or focusing on what they’re not doing as opposed to what they’re accomplishing. How do you react to that? Does that ring true for you?

Natasha Tucker: [00:24:19] It absolutely does. And, honestly, it’s a daily reminder that you have to give yourself. Stop allowing yourself to focus on that. Stop allowing yourself to be Negative Nancy on yourself. Look at what I did do today. You know, I brought in this much money today. I got my kids fed and out the door, at school, did jobs, did three estimates, went to a soccer game, and cooked dinner. In reality, that’s life.

Mike Blake: [00:25:03] That’s a full to-do list. You don’t have to apologize to anybody for that.

Natasha Tucker: [00:25:07] But, like you said, as women, we’re just kind of taught and expected by others, like you said, with social media and the way things are, that you’re supposed to get everything done in one day. And you’re supposed to keep things rolling, and the house clean, the dishes done. You’re supposed to still do the the feminine roles. And I am a woman working in a man’s world as well as business stuff. That’s been very interesting. At first, especially, I got a lot of looks. So, finding grace with yourself and always daily reminders of you are enough and own it. You can do this.

Mike Blake: [00:26:06] Yeah. Men have been slacking off for centuries, you know. So, let’s move over to more of the positive, and that is, you have this side hustle that’s now become a business. How has that impacted your household finances?

Natasha Tucker: [00:26:27] Oh, it’s dramatically impacted. It’s definitely carried us through quite a lot, especially the past two years. So, it’s been a huge blessing and it’s one of those things where it came at the absolute perfect time. Thank, God, for putting us in trouble.

Mike Blake: [00:26:59] So, did you have to invest any money in the business yourself when you started or could you just sort of bootstrap it?

Natasha Tucker: [00:27:08] I absolutely bootstrapped. When I first started up until – oh, wow – for a year, my poor Tahoe was loaded with all kinds of things from trimmers, and mulch, and bugs, to plants and dirt. Like, my poor Tahoe, it was embarrassingly bad. But it had to be. My work truck was all I had. I used tools out of my garage that I just had. If I needed something else, hopefully, I had a job that I would make profit on and go get it.

Natasha Tucker: [00:27:53] I know that my husband, Rob, thought I was crazy when I woke up one morning, it was April of 2020, and I got so tired of having to wait on people to make deliveries for me because I just had the Tahoe. So, there are things I couldn’t get, and I was like, “This is crazy.” I woke up and I said, “I’m going to go buy a trailer today.” He goes, “What?” I said, “I’m going to buy a trailer.” The fall of 2020, I woke up one day and I said, “That’s it. I’m getting a truck. Let’s go.”

Natasha Tucker: [00:28:26] But I had grown enough to that point where I could do that. I never borrowed money. I did not take on investments. It was all as I grew, everything else grew kind of thing.

Mike Blake: [00:28:44] It’s funny you say that. And I’m going to commiserate with you a little bit. You and I are in different fields, but I have my tools just as you have yours. And, you know, it’s funny, you do just sort of wake up one day and you say, “You know what? This just is not acceptable anymore. I’m going to go out and buy the right tool for the right job.” For me, I need a new computer because I was doing stuff that it would just take my old computer too long to do. Some of the models I do take ten hours to run through, so speed makes a big difference.

Mike Blake: [00:29:16] I woke up one day – because one was taking, like, 18 hours – I said, “You know what? There’s no numbers to run here. I’m just done doing this. I’m just going out and I’m buying a computer.” That’s all there is to it. And it’s refreshing to talk to somebody else that kind of had the same thing. It’s like I’m tired of being held back by my tools.

Natasha Tucker: [00:29:36] Yes. Yes. And the benefits that those new tools outweigh 1,000 percent what you’ve been dealing with. As long as you can do it. As long as you have the means to do it. And that’s part of being thirsty, I guess, and work smart and knowing that there’s going to come a time when you know that you’re going to have to just do it. And, thankfully, you’ll have the means to do it, if you’re thrifty.

Mike Blake: [00:30:09] It also shows that there’s a switch that flips, I think, that says I value my time now.

Natasha Tucker: [00:30:18] Yes.

Mike Blake: [00:30:19] It’s not like, “I’m buying this trailer or this truck, and then somebody is paying me right away thousands of dollars for me to go buy it.” You just know my time is too valuable to be waiting around on this stuff anymore. You know on the backend, it’s costing me money and my sanity not to do this.

Natasha Tucker: [00:30:39] Exactly. Absolutely. You know, when you do have your customers waiting on you, and you have a schedule that you’re trying to stay on, and you cannot count on other people to step up for you, especially when they have their own things going on in business or whatever. You can’t just expect people just to do it when you say do it. People, you give them always the benefit of the doubt. But when it just gets to where it is, taking up your time and money, let’s build up here.

Mike Blake: [00:31:25] What were some of the biggest challenges of converting from side hustle to full on business? If you can remember, what were some of the big hurdles for you that you had to overcome?

Natasha Tucker: [00:31:37] I think one of the biggest ones at first was the time management and the mental capacity. Because going back to everybody’s house is different, everybody’s needs or wants are different, the amount of brainpower that you have with thinking and thinking about these people. And if you have ten estimates lined up, each one the focus factor. The numbers factor of coming up with numbers for them. Then, you have to turn around and go be a mom and a wife.

Natasha Tucker: [00:32:20] So, it’s the compartmentalizing what needs to happen when. So, the time management and focus factor was probably the biggest hurdle, for me, getting thrown into a whirlwind that you knew was coming, but you just didn’t know how to fly in it.

Mike Blake: [00:32:48] So, that’s interesting, focus and time management. Were there any specific actions you took to develop those skills? Did you take courses, read books, podcasts? Or did you just learn it through the school of hard knocks and you learned what didn’t work and then tried something else?

Natasha Tucker: [00:33:09] That’s pretty much it.

Mike Blake: [00:33:10] Okay. That’s fine.

Natasha Tucker: [00:33:12] Okay. “So, that didn’t work out too well, so let’s shift here and let’s maneuver this a little bit. Because, you know, along with business, life changes as well. So, everything is constantly shifting and constantly moving. And so, half the time I just feel like I’m flying by the seat of my pants. But you have to be okay with that sometimes.

Mike Blake: [00:33:39] I get it. I need to take a picture of this. But on a table that you can’t see off camera here, there’s a bunch of stuff peeking out the bottom, a bunch of stuff I’ve thrown on the table is the workbook for David Allen’s Getting Things Done. And I can’t wait to take a picture of that because, obviously, I haven’t touched it. It’s literally on my to-do list to do the Getting Things Done Workbook.

Natasha Tucker: [00:34:07] Oh, my goodness. That’s great.

Mike Blake: [00:34:10] It’s just so meta. It’s going to make a fantastic photo when I put it out there. But there does come a point where you don’t have time to slow down and learn. You just sort of have to take the fruit as it’s thrown at you and try to juggle it as best you can. And, eventually, just learn to juggle.

Natasha Tucker: [00:34:28] Yes. Yes. And the more balls that get thrown in there, the quicker you get.

Mike Blake: [00:34:34] Yeah. That’s right.

Natasha Tucker: [00:34:35] I will say, too, I’ve never been a list person. And I can’t tell you how many calendars that I’ve thrown away in my life because I’m like, “I’m going to be one of those moms that writes everything down and I have my little schedule,” and that never worked up until now. I realized real quick that my schedule book is now my bible, because that was what kept me. If it’s written down, I can find it and I can remember. So, I did learn that part, too.

Mike Blake: [00:35:19] All right. So, as you’re making this transition, did you seek any outside advice?

Natasha Tucker: [00:35:29] Not really. I mean, Rob, my husband, is a huge business guy. So, anything that has to do with finances, money, the legal side of things, up to writing my little clauses at the bottom of my estimates, he was able to handle that. And there’s not really anybody else that I know or have heard of around here that does what I do. So, learning as far as different plants, different ways of doing things that, yes. Making good friends with nursery people and learning that way. But business side, thankfully Rob knows how to handle this stuff because that’s not my thing.

Mike Blake: [00:36:27] So, I’m curious, and feel free to not answer this almost unfair question. But I have to ask because I’m immensely curious. My wife and I have separate businesses. And they’re separate because if we tried to work in the same business together, it would either be the business than marriage, they would not both survive. I love her to death, 23 years married coming up on June, two children, all the works. She hasn’t changed the key on me yet when I left the house. But working together continues to be very hard for us. How do you guys work together? Does it work well or did you have to kind of break each other in? Or, frankly, did you have to break Rob in a little bit to get that going well?

Natasha Tucker: [00:37:12] I hadn’t break. It may have been kick him back out sometimes. What’s the word? He’s very driven and very hard focused on certain things. And I am very light spirited. I’m a total opposite. We’re complete opposite people. For a while, he did work with me daily, and it was great. And on some days, I do miss it. I do miss having him with me all the time. And then, other days I’m like, “Oh, thank goodness he’s back in an office because he does so much better there. That’s where he thrives.”

Mike Blake: [00:38:01] Okay. That’s fair.

Natasha Tucker: [00:38:02] Yeah. There were days. There were days.

Mike Blake: [00:38:08] Yeah. Well, look, my wife and I really struggle. We do a little bit, but not a lot. We’re better off sort of being in our corners and doing our thing. It doesn’t mean you have a bad marriage, but it just means that the compatibility required for a successful marriage is not the same as the compatibility required for a successful business partnership.

Natasha Tucker: [00:38:30] Exactly. Exactly.

Mike Blake: [00:38:36] What surprised you about this experience? What do you look back on? Or maybe think about now saying, “You know what? I didn’t expect this.”

Natasha Tucker: [00:38:46] Oh, gosh. I guess my biggest surprise when I look back, I’m like, “Oh, my goodness. I did that. Oh, my goodness. That happens. How in the world did we make it through? How did I even handle that?” Surprising myself, but then almost on a daily basis after a job, you turn around and you have that surprise of, “Wow.” Like, that’s one of the main reasons I continue to love this is you show up to a mess and, all of a sudden, you turn around and it’s gorgeous, and it’s beautiful, and people are happy, and you can be proud of yourself.

Natasha Tucker: [00:39:35] I did not realize when I first started because I wasn’t doing as much as I am now. I didn’t realize the sense of pride that I get. And the happiness of making other people happy, especially after you get to know them after bouncing back plans and getting to know people. That’s been my biggest surprise, is, I had no idea how happy it actually can make somebody when they do love what they do.

Mike Blake: [00:40:10] I’m talking with Natasha Tucker. And the topic is, Should I turn my side hustle into a fulltime business? We just have time for a few more questions. We got to, maybe, get you to bed at 12:45 rather than 1:00 a.m.. I certainly don’t want to be the reason you’re at that late. But what’s next for the business? What plans do you have for the business going forward?

Natasha Tucker: [00:40:37] Again, it’s the slow growth method now, because I haven’t taken on any capital per se. So, growing organically, right now I do have an assistant, which has helped keep my head a lot clearer. And I do have people that have been onboarded, so that helps a lot.

Natasha Tucker: [00:41:06] So, my ultimate goal is to be to where I can get another career going. I’m not going to say that I don’t want to be in the field working because I love it. But to where I can grow enough to where I can bounce between places a little bit more, because that makes it. And not be on the job site the whole time. But, again, I do love working outside and doing what I do and I love the people that I’ve brought on, so it’s just a lot of fun. So, get to where I can spread out and grow that way. Get a few more trucks out and go, I think that’s what’s next anyway.

Mike Blake: [00:41:56] Natasha, this has been a great conversation and I think our listeners will have learned a lot. I think they’ll just enjoy listening to the conversation, which is fine, too. It’s infotainment here on the Decision Vision podcast. But I’m sure there are questions we haven’t covered, and maybe they wish we would have done more in depth. If somebody wants to contact you about this question about turning their side hustle into a business and learn more from your expertise, can they contact you? And if so, what’s the best way to do that?

Natasha Tucker: [00:42:25] Absolutely. They can email me at natasha@happyhippiegardening.com. You can also message me through my Facebook page, Happy Hippie Gardening. And that’s probably the two direct routes that they’re absolutely welcome to email or message me.

Mike Blake: [00:42:49] That’s going to wrap it up for today’s program. I’d like to thank Natasha Tucker so much for sharing her expertise with us.

Mike Blake: [00:42:56] We’ll be exploring a new topic each week, so please tune in so that when you’re faced with your next business decision, you have clear vision when making it. If you enjoy these podcasts, please consider leaving a review with your favorite podcast aggregator. It helps people find us so that we can help them.

Mike Blake: [00:43:13] If you would like to engage with me on social media with my Chart of the Day and other content, I’m on LinkedIn as