Ray Hoffman introduces the guest for this episode. How did Amazon do it? And how is Amazon going to continue to do it? John Rossman has the answer to both questions. He joined Amazon in 2002, after 23 interviews, and he led the creation of the Amazon Marketplace, with all the third-party sellers that came in, which is what lifted Amazon from being just an online seller of books and videos to a seller of everything. In fact, the operation he created between 2002 and 2005 accounts for over half of all the merchandise units sold on Amazon today. He then went on to lead the Enterprise Services Business at Amazon, and there he helped build brands such as Target.com and NBA.com. So, having had a front-row seat to the ways and strategies of Amazon’s creator, Jeff Bezos, John Rossman has gone on to advise a lot of young startup companies on how to think like Amazon, which just happens to be the title of a very readable new book by John Rossman.

Listen in to hear more of John Rossman’s story of innovation in capitalism.

Key Takeaways:

[:22] Ray Hoffman introduces the guest for this episode of This Is Capitalism.
[1:23] John was always interested in efficiency, integration, and how processes and data worked in making commerce more effective. In the early 2000s in Seattle, a former colleague of John’s was in the Finance Group at Amazon, and called John as a candidate for “an interesting idea” they had. John interviewed over a few months.

[2:05] John thought it was a great fit because the Marketplace business at Amazon, which was the division John was hired to run, with third parties selling merchandise on Amazon.com, really is about integration at a maximum scale. It required a lot of metrics and procedures that had to be put in place to scale that business.

[2:36] John launched 14 categories. When John started at Amazon, 90% of the business was books, music, and video. The first holiday season John was there, in 2002, was the first $1 billion quarter for Amazon. Today, Amazon is a $260 billion organization.

[2:55] Categories John launched included Apparel, Sporting Goods, and Home. They did it by leveraging partners. They expanded categories and geographies.

[3:19] John had 23 hiring interviews with people from departments all over Amazon. He learned that the Marketplace was the third iteration of a third-party selling program. The first two, Auctions and zShops, had failed. By the time John started, he knew where they were going, what the vision was, and the people who were involved.

[4:09] The slow hiring process led back to Jeff Bezos’s desire not to be in too big of a hurry to hire. This is also covered in John’s books. The biggest business mistakes John has made have revolved around hiring in a hurry. When you have an urgent need, you are prone to hiring the first person who has the qualifications and is available.

[4:44] At Amazon, they look to hire for the role at hand, plus what the future might hold.

[4:52] Amazon uses a bar-raiser, a person independent from the team who evaluates the candidate on their potential to do other profitable things for Amazon. The bar-raiser has veto power that is not subject to appeal. It really helps Amazon not to hire in a hurry. Hiring in a hurry can lead to very hard situations.

[5:46] John’s book is about the tools you can take from Amazon for your own business. One of those tools is a ‘flywheel,’ which tends to maintain momentum. In business, the concept of a flywheel is systems modeling: understanding the system you are operating in and your various levers for creating change in your business.

[6:32] A flywheel is a really simplified version of your systems model and it’s a great way to summarize your strategy.

[6:42] Amazon continues to refer to their flywheel, which is about improving the customer experience by having more selection and more sellers, which lowers cost, all on a fixed-base platform. That flywheel has been a key way to simplify and keep the whole organization on the same vision and mission page.

[7:13] Everyone at Amazon has to demonstrate how their programs, proposals, and investments feed into the flywheel.

[7:34] As Director of Merchant Integration, John brought in third-party sellers with millions of new items to make the flywheel generate more sales in more areas from more customers. The concept was that by bringing in more selection, the customer experience, over time, is that they can search, discover, and buy anything on Amazon.

[8:07] The key design principle for Marketplace was to get the customer to trust a third-party seller as much as they trusted buying from Amazon the retailer. That was a very different model from eBay. From day one, Amazon took full accountability for customer trust. That mandated a special relationship with their sellers.

[9:14] Amazon was constrained by their circumstances in the early 2000s. They wanted to build relationships with sellers who were much more stable than Amazon was at that time.

[9:40] Headcount was flat at Amazon. John had to ask for headcount from other areas of the business to get a team together to help launch the Marketplace business. That constraint forced John to innovate in ways that they wouldn’t have done with more employees and a bigger budget.

[10:00] A lot of third-party sellers said “No,” to Amazon, but a lot of great brands did sign on to have better e-commerce access to the Amazon customer.

[10:32] The flywheel started to gain momentum. Four or five years after Amazon launched the Marketplace, Prime membership and the Fulfilled By Amazon (FBA) program were created. The triangulation between Marketplace, Prime, and FBA accelerated the growth of the Marketplace business.

[11:04] Amazon’s growth and Amazon’s stock price growth mirrors the growth of the Marketplace. Jeff Bezos released a shareholder letter this year graphing how the Marketplace has grown by year. Today, the Marketplace accounts for 58% of all units shipped and sold.

[11:32] John believes the opportunity today is bigger than it has ever been. Develop your perspective of how change happens and what your digital e-commerce strategy looks like. The key ingredient is patience. None of this happened overnight.

[12:07] The part of Amazon and Jeff Bezos’s story that doesn’t get told enough is how he bet everything on himself by walking away from a great job. He stuck with it when everybody was a naysayer about Amazon. He was always optimizing for long-term enterprise growth based on great customer trust.

[12:51] For nine years, the Amazon stock was flat. That includes the four years John was there. As a senior executive, his compensation was tied to the stock growth and he wanted to see better performance. He lost patience and left. He didn’t see the future growth coming.

[13:50] Everybody wants good outcomes. What you have control of are the inputs. Think Like Amazon is about the controllable inputs, how to create innovation and how to grow your business. Patience is a required input.

[14:02] Idea 1 is “Your Journey Will Not Be Short by Taking the Long Strategic View.” Amazon evaluates many of its programs and investments over an eight-to-ten-year period. They are able to rationalize things that other companies can’t.

[14:48] Some of Amazon’s current big initiatives include healthcare and logistics. Those are eight-to-fifteen-year investments. Most companies are not willing to be that patient.

[15:14] Jeff Bezos always had it in mind that Books was going to be the first of many categories that Amazon opened. Amazon was always going to be a multi-category retailer. Jeff Bezos was open to finding opportunities.

[16:04] PillPack was a nice acquisition for Amazon. It creates custom packets of your medication. It has 50 state pharmaceutical licenses. PillPack thinks things through from the customer’s perspective. That makes it a great alignment with Amazon. Amazon has always been willing to rethink traditions because of the customer perspective.

[16:59] Amazon’s innovation approach is called “Start With the Customer and Work Backward.” They have a daisy chain of things they do to help build ideas before they go forward with them.

[17:27] You need a big vision for your idea but you ne

Ray Hoffman introduces the guests for this episode. “Is there such a thing as entrepreneurial love? After visiting Thibault and Lola Manekin, I’m inclined to think there is because in talking to Thibault, Co-Founder of a remarkable property development firm called Seawall, and his wife, Lola, who created a wildly popular space known as Movement Lab, I learned about an entrepreneur’s love for the city of Baltimore, an entrepreneur’s love for teachers and abandoned buildings from the 19th century, and for clients and residents of all shapes, colors, and sizes. I first met Thibault and Lola outside of R. House, which used to be a car dealership in the North Baltimore neighborhood called Remington. Upstairs is Lola’s creation, Movement Lab. Downstairs, on the ground floor, is a kind of food court, Thibault’s creation. But, really, it’s a concept kitchen for 11 up-and-coming local chefs. It’s all quite an entrepreneurial love story.”

Listen in to hear more of Thibault’s and Lola’s social entrepreneurism.

Key Takeaways:

[:22] Ray Hoffman introduces the guests for this episode of This Is Capitalism.
[1:21] Thibault describes the strong entrepreneurial spirit of his wife, Lola.

[1:50] Lola immigrated to the United States and started working in restaurants, cleaning houses, and babysitting. Following her vision of success was a slow process.

[2:25] Lola’s first memory, growing up in Florianopolis, Brazil, was making bracelets with her cousins and selling them door-to-door. Lola was the middle child in her family.

[3:14] Lola came to the U.S. through a program in Florida that brought in immigrant students from around the world for four-month jobs. After her four-month program was over, Lola had finished her college degree in natural therapies, so she decided to stay. She went to massage school in Florida and got licensed to do massages.

[3:50] Lola tells how she met Thibault in Brazil when she was visiting her family. Then, they began a long-distance relationship between Baltimore and Florida. Thibault eventually convinced Lola to move to Baltimore.

[4:36] Thibault’s first renovation project was Miller’s Court; it is Lola’s favorite. Lola describes how it came to be developed from an old building in a dangerous area into a specialized teachers’ apartment building. It set the pattern for future renovation projects.

[5:56] Thibault explains how he got involved in teachers’ housing and how Miller’s Court was created from an abandoned tin-can factory with broken roofs and large rats.

[8:55] After Seawall bought the property, they moved quickly to finance it, design it and build it, all in about two years.

[9:05] Thibault co-founded Seawall Development with his father in 2006. Thibault says he has a vision of uniting the world and bringing people together. Real estate touches everyone. Thibault wants to fight against the division of communities by real estate and reimagine the power of the built environment to unite cities and launch powerful ideas.

[10:56] Thibault’s grandfather and his brother started a real estate company in Baltimore at the end of the Second World War. For them, it was never about the transaction; it was 100% about the relationship. People started to really trust them and ask them to do things way outside their comfort zone.

[11:32] Thibault’s grandfather and his brother were two of seven children growing up in a two-bedroom apartment above the grocery store their father ran on the first floor. They believed that if they treated people fairly, at the end of the day it would work out.

[11:55] Thibault’s father graduated from college with the intention of going into public education. He first took an internship with his dad in the real estate firm and saw that the business was not about earning money at all costs, but about creating deep relationships and helping companies grow.

[12:36] Thibault tells how his father had just retired in 2000 when he was invited to be COO of the Baltimore City School System. After his time in real estate, he realized it was time to pursue his lifelong dream. He committed to working long hours, seven days a week to help kids and education.

[14:00] He brought together a competent team of people from different sectors with different experiences that touched the school system in some fashion. They went to work and turned the budget from red to being in the black. His position was a two-year interim position so he hired his own replacement.

[15:06] Inspired by his father’s work with teachers, Thibault went into business with him to create centrally-located, affordable housing set aside for teachers new to the area who didn’t know the neighborhoods. They also wanted to find a centralized space for education nonprofits.

[16:44] The goal was a 5,000 square-foot building. They renovated a 100,000 square-foot building that was more than they expected. It provided a great space for both teachers and nonprofits.

[17:03] Teachers were able to design their own apartments and amenities, and choose their own rent. Based on the rent the teachers said they could afford, Thibault and his father reverse-engineered the project to come up with a budget. The budget turned out to be $6 million, which was $14 million short of costs!

[17:48] They figured out how to get the $14 million to be able to provide affordable housing for teachers and nonprofits.

[18:19] They created a movement by building from the inside-out - from the teachers and nonprofits to community associations, to a team of guardian angels made of attorneys, accountants, banks, and lenders. They found creative financing solutions that fit the needs with historic building tax credits and city, state, and Federal assistance.

[19:55] People were helping this project because it wasn’t a “real estate deal.” Thibault and his father led with their purpose. It wasn’t their idea; it was the idea of the teachers and nonprofits. It was such an easy story to tell. Lenders wanted to get involved.

[20:26] Not only did their lenders and team want to bring the first project to life, but they also wanted to be part of so many more of these projects and replicate the model across the country.

[20:56] Thibault shares some background to his story. Thibault had graduated college and was in touch with a friend of his in Northern Ireland, Sean Tuohey, who was working in a program to bring Protestant and Catholic children together through basketball. Sean was invited to bring the program to post-apartheid South Africa.

[21:24] Sean came home to D.C., and he and his brother helped start a nonprofit, at the time called Playing for Peace, and later called PeacePlayers International. Sean went to Africa and Thibault reached out to him by email. Sean replied he was on his way back to D.C., and they had a three-hour lunch discussing the success of the program.

[22:20] Thibault helped raise $3,000 from friends and family and went with Sean to South Africa to help. Thibault worked behind the scenes with Sean to help the idea come to life. Nelson Mandela and his organization were their largest supporters and the floodgates were opened.

[23:14] PeacePlayers International replicated the model in the Middle East with Israeli and Palestinian children and in Cyprus with Greek Cypriot children and Turkish Cypriot children. Thibault and Sean were living out of their suitcases all this time.

[23:34] At 21 years old, Thibault didn’t have any confidence in himself as a leader. He worked with PeacePlayers for six years and learned a lot about himself, about life, about inspiring people, and leading. This translated into Thibault’s professional life, marriage, and family.

[24:20] Thibault and his father started their development business in 2000. They knew there would be risks. They closed financing on their first project, Miller’s Court, three months before Lehman Brothers collapsed. Thibault is confident those three months were the key to succeeding instead of failing to launch their first project.

[25:08] Seawall wasn’t interested in leasing space to national credit tenants. They wanted to support small nonprofits and teachers. Thibault compares Seawall’s passion for this first project to the passion of a teenager in love for the first time. They were committed to this idea to help the teachers, and so, the children, of the city.

Ray Hoffman introduces his guest Veronica Dagher in the form of a note: “I like your work, Veronica Dagher. I like your Wall Street Journal columns on successful women, your Secrets of Wealthy Women podcasts, as well as your new ebook based on the columns and podcasts. It’s called Resilience, and it offers a lot of lessons in life. And, take it from me, not just lessons for other women. And you and I would both agree, the timing is perfect for the column, the podcast, and the book.”

Listen in for fascinating stories of women overcoming challenges.

Key Takeaways:

[:20] Ray Hoffman introduces Veronica Dagher.

[:53] Veronica says there is a current wealth transfer of about $33 trillion from one generation to the next in America. Women will inherit a lot of that money. Veronica shares stories about wealth, success, and entrepreneurship, featuring some very well-known women in her Wall Street Journal columns and podcasts.

[1:10] Maria Sharapova, Josie Natori, and Rebecca Minkoff are a few of the subjects of these stories about how they built their successes and the obstacles they overcame. The book Resilience came after the columns and podcasts.

[1:33] All the women in the book Resilience have overcome obstacles such as bankruptcies, difficult divorces, loss of a child, or business difficulties. Some faced people telling them they would never be successful. They didn’t listen to those voices. When they were knocked down, they just got up faster than other folks.

[2:31] Veronica’s optimism and faith come from her family background and personal experiences of overcoming the devastating loss of her father and still pushing on. Her mother instilled in her from a young age the desire to be a financially independent woman while relying on people she trusts among family, faith community, and friends.

[3:37] Veronica took leave for four months when her mother grew suddenly very sick. Veronica watched her mother face illness and unanswered medical questions, and come back to good health. This experience helped Veronica to grow tougher and more assertive.

[4:20] When Veronica’s father passed, they were able to keep the house and lifestyle, with very careful management of their resources. The constant conflict between how her mother managed the budget and how her father had regarded money more casually informs Veronica’s work today in her attention to family dynamics.

[5:41] Veronica studied finance in school, with no thought of journalism as a career. It seemed to be a solid choice, given her family background.

[6:53] The subjects of Resilience range in age from Ayesha Curry, 29 when interviewed, to Mary Higgins Clark, “90-something.” Veronica shares her ideas on how their age demographic affected the choices of the women interviewed.

[7:44] The “entrepreneurial gene” is not found just in America. Josie Natori came to America from the Philippines and is very proud to be an American. The Natori Company is known around the world. She has the attitude that as a woman it is okay to be successful. It’s okay to believe that anything is possible. Don’t limit yourself.

[10:03] The Philippines has a huge matriarchal, entrepreneurial culture. Josie Natori was a working mom from the beginning. Josie and her husband worked together and had an agreement that their marriage and family would take precedence over the company. They’ve been married for over 50 years. Their son is taking a big role, now.

[11:37] At age 91, Mary Higgins Clark, the Queen of Suspense, is amazing. Veronica taped the podcast with her in the Clark home in New Jersey, and Mary told Veronica she had enjoyed the process immensely.

[12:01] Mary Higgins Clark did not have an easy life. Her father had died when she was young. Her first husband died suddenly when she was in her thirties with five children to raise. Her short stories, a popular form of the day, were rejected “something like 50 times.” Editors told her she would never be successful. She didn’t give up.

[12:37] Mary Higgins Clark eventually became a best-selling novelist — one of the highest-paid women and highest-paid novelists in U.S. history. She stays very humble.

[12:57] Mary Higgins Clark and Veronica Dagher are both Fordham graduates. They had met at a Fordham event several years ago and Veronica had asked Mary for writing advice. Mary shared that at one point the family was almost on food stamps. She needed to write for money. Obviously, that worked out.

[13:46] When Mary Higgins Clark had first submitted a short story to Cosmopolitan Magazine, an editor called it light and trite. Years later, a Cosmopolitan editor called asking for her to write something for them and Mary told her agent, “Tell them yes but make them pay.”

[14:14] When Veronica started the podcast, she wrote names of women to interview. Oprah topped the list, but that one hasn’t happened yet. Maria Bartiromo was taped “today.” Maria Sharapova was on in the fall. Bobbi Brown was another name on the list.

[14:58] Using a Google Docs spreadsheet, Veronica had put together her list of dream people for the podcast and the people she knew who could connect her to them. She did a lot of pitching people trying to make connections and attended a lot of events to introduce herself to people.

[15:36] Veronica is still going to events, tracking people down and trying to meet them but now she is getting a lot of high-quality incoming pitches from big names.

[16:00] The common thread between the millennial entrepreneurs and the older entrepreneurs is the resilience. The younger entrepreneurs see opportunity everywhere. They are not limiting themselves to one sector or area of business. For example, Ayesha Curry is into cookware, media, and other ventures. She leveraged her network.

[17:49] Ayesha Curry faced the criticism of having opportunities through her husband. Other women Veronica interviewed also faced criticism because of the advantages of their family circumstances. Yes, certain doors were opened, but they had to walk through the doors, to follow up, and to build the companies and brands they have.

[18:41] Loreen Arbus is the daughter of the founder of ABC. She is a philanthropist, a programming executive, and she has her own production company. She does so much, and she didn’t have to do any of it for the money. She works for the sake of work.

[19:13] The first daughter of Loreen’s father, Leonard Goldenson was born with cerebral palsy. In those days, the family was turned away from hotels and restaurants because of her disability. This was an important influence in Loreen’s advocacy for people with disabilities. Loreen helps people with disabilities to become successful in media.

[20:09] Loreen deliberately changed her last name as a young teenager to avoid riding on her father’s coattails. Veronica was at a party at Loreen’s NYC apartment recently and it is incredible in its decoration and style. Loreen is not afraid to take risks.

[20:55] Barbara Bradley Baekgaard of Vera Bradley told Veronica she wasn’t very good at math and didn’t have an MBA, but she and her friend had an idea for cute luggage. They borrowed $500 from their husbands, bought some fabric, and hired some people to sew the bags. They knew nothing of marketing or finance.

[21:50] They learned everything they needed from SCORE (Service Corps of Retired Executives), which is a huge resource for entrepreneurs who want to learn.

[22:14] An unexpected lesson for Veronica in her interviewing came from Bonnie St. John, an Olympic athlete with a disability, who had suffered childhood abuse. Bonnie said that, as a child, you have a lot of people around you who push you. Her success, as an adult, has been from seeking out people who helped push her to the next level.

Tom Stewart is Executive Director for the National Center for the Middle Market, which is part of the Fisher College of Business at The Ohio State University. It’s the leading source of information and research on the companies whose output accounts for one-third of the private sector in the U.S., the middle third of the U.S. Gross Domestic Product. These are firms that have grown out of being small businesses but with their revenues running between $10 million and $1 billion a year, they’re still a long way from being in the Fortune 500. And no one shines a brighter light on the middle market companies than the National Center’s Tom Stewart, “Mr. In-Between.”

Key Takeaways:

[:20] Ray Hoffman introduces Tom Stewart.

[1:15] Tom Stewart defines the middle market as companies with annual sales between $10 million and $1 billion. These range from the largest of small businesses to companies that start to resemble the Fortune 500. There are some interesting transitions along the way as companies grow.

[2:21] The National Center for the Middle Market considers these companies in three different revenue groups: Between $10 and $50 million, between $50 and $100 million, and between $100 million and $1 billion.

[2:41] Somewhere around $50 million in revenue, companies begin to need to create functions. They can no longer make do with the accountant at the accounting firm that they use; they need a Chief Financial Officer. They need a person to be in charge of HR.

[3:16] At a little over $100 million in revenue, the functions get deeper with more expertise in HR beyond a couple of generalists doing payroll and job descriptions. The same goes for finance and other functions. Along the way, you are likely to get more P&Ls. You get functionalization and divisionalization.

[4:06] They may begin to think about international expansion and what that means in terms of the skills and capabilities they will need to enter those markets.

[4:20] Since the center started in 2011, they started with these three logical revenue differentiations. Over time, it has become evident that the differentiations roughly correspond to major inflection points in a business.

[5:04] Within the group of roughly 200,000 middle market companies, only about 15% are public. 85% of middle-market companies are private. About a third of the 85% are family businesses; about a third have private equity investment; about a third are “other,” which may be sole proprietorships, partnerships, or closely-held corporations.

[5:55] 65% of family business owners expect to pass the business to their children; only about 30% pass the business to their children. The next generation is down to about 12%. Family businesses often cease to be family businesses. They may get sold.

[6:34] The median age of middle market companies is 31 years. There are transitions that occur as they grow and age.

[7:03] During the financial crisis, middle market companies were much more likely to survive than small businesses. The vast majority of middle market businesses that survived actually added jobs while big companies were cutting.

[7:30] 60% of net new job growth in the U.S. is in middle market companies. They are the forgotten middle child of job creation. It’s a mostly untold story of capitalist success because they are not found making moves in the stock market.

[9:01] Most businesses die within six years of their founding.

[9:30] Every three months, the center sends out a survey to middle-market companies in all industries, in all parts of the country. They get 1,000 responses. The questions are about top-line and bottom line, revenue growth, employment growth, investment plans, investment results, and biggest challenges. The center has eight years of data.

[10:11] The center recently took data from five years (20,000 company surveys) and did a factor analysis and a Bayesian statistical analysis. They were able to identify the key factors that drive growth for these companies. They created a cluster analysis for types of growth coming from various factors.

[10:54] The center created ‘portraits’ of the styles of growth of these successful middle market companies, based on the decisions the companies make or the paths they follow.

[11:20] The beginning of the National Center for the Middle Market came from GE Capital coming out of the financial crisis with a lot of interest in the middle market. As there are only 500 Fortune 500 customers, many financial services companies wish to work with the potentially lucrative middle market.

[11:44] GE Capital approached a number of business schools, including Fisher College of Business at The Ohio State University to do a study of the middle market. Fisher replied, “We see you, and raise you. Anybody can do a study, but why don’t we actually create a research center so that there’s an ongoing stream of studies?”

[12:08] GE sold off most of its Capital division, starting about four years ago. Now the center is sponsored by Cisco Systems, GrantThornton, and Chubb Insurance. The center works with outside organizations like Brookings.

[12:27] Middle market companies have ‘big-company’ problems and ‘small-company’ resources. Finding the ‘stuff’ that really helps them address their challenges is one of the most important contributions the center makes.

[12:48] Tom Stewart talks of his background working with large companies. When he moved to the National Center for the Middle Market, he discovered an extraordinary universe with some of the most interesting companies with interesting challenges. Middle market companies generally outperform S&P 500 companies by up to 2%.

[15:00] Some companies move up in the middle market. Tom calls them the ‘graduating classes.’

[15:14] Tom Stewart and Ralph Greco reported on a study about if companies are keeping up with digitalization or falling behind. Getting up-to-speed is time-consuming. Tom shares the percentages of digital spending, past and predicted. There are four types of companies: strategic, advanced, defensive, and deniers. Strategic is best.

[17:51] In the 4th Quarter of 2018, 71% of middle market companies were planning to invest, with a large percentage of investments going toward IT. Cybersecurity is the biggest technology priority for many of them. Companies that prioritize cybersecurity for customer data grow faster than those that do not.

[20:08] People are now distinguishing between three things: digitization from legacy data on paper, digitalization of the whole business process, and digital transformation in which you think of the whole business as being digital, first. More companies are moving from one level to the next, connecting the dots to arrive at digital transformation.

[21:48] As executive teams age, they sometimes may also be more interested in harvesting than in planting. That’s when private equity investors start coming in to grow them.

[22:46] Middle market companies that are using technology as a cornerstone grew at an average 10% rate in 2018. The ‘laggards’ who haven’t connected the dots grew only at a 6% rate. As the years pass, growth rates and the advantages of the technology will compound for the forward companies. Tom gives examples of high-tech companies.

[24:14] Tom reflects that before he started with the center he was unaware of the landscape of middle market companies that opened before him. He says policymakers don’t understand and are not being told the stories of middle market companies.

[25:15] 47% of mid-size companies report that the lack of talent is restraining their growth. Google doesn’t have a shortage of job applicants. Everybody knows about Google. There are some extraordinary opportunities in mid-market companies and that story needs to be told so the talent can find the opportunities in these companies.

[25:38] Varidesk furniture, every sports team, craft brewers, and more are all found in the middle market sector.

[26:29] Tom looks forward to more interactions between companies to use tools, create knowledge, and share knowledge. The center can provide academic rigor but also an opportunity for people to share and talk. Tom wants to see more talking about the data while continuing to create a body of knowledge about middle m

Darrah Brustein asks a lot of good, pointed questions of herself as well as others. In part because of the questions she has asked herself since graduation from Emory University in 2006, she has gone from the fashion world to building a payment processing system for merchants, to event planner and networking guru, children’s book author and advocate for teaching young people about personal finance, and now, co-host of a video series with Deepak Chopra, Diving Deep with Deepak and Darrah.

Key Takeaways:

[:23] Ray Hoffman introduces the guest, Darrah Brustein.

[1:00] Darrah began at about eight years old on her path to become an entrepreneur. It started with crafting jewelry, then selling candy bars, and then partnering with her brother to sell wrapping paper for a school fundraiser. She is in business with her brother still; they work great as partners but they are not great friends!

[3:25] Darrah double-majored in Religion and Italian at Emory University. Darrah believes you can understand people and what makes them tick by learning what they believe. She tells how her own early conversion experience led her to want to learn more. A holistic view of the world’s religions has helped her to “get” people.

[4:36] Darrah decided to major in Italian, being one of the three fashion languages after French and English, which she already knew, to launch a career in fashion. She did start in fashion but never needed Italian. In her liberal arts education, she learned to expand her mindset. She studied abroad for one summer in Italy.

[6:12] Now Darrah spends about 60% of her time traveling for pleasure, and she works wherever she is. Her first job out of college was as a sales rep for a Los Angeles-based wholesale jean company while she was in Atlanta. She covered seven Southeast states working with boutiques and department stores in her territory. She beat her sales goals.

[7:23] The company went under about a week before Christmas in 2007 and Darrah lost her job. She had bought a home three months earlier. Darrah next tried different things for work, and got laid off or downsized several more times, in the thick of the economic recession. Her inner voice kept guiding her to owning her own business.

[9:03] Darrah started a credit card processing company with her twin brother, Garrett. Garrett had been researching the merchant services industry and found an unrepresented contingent of brokerage models he could apply to the credit card processing industry. Darrah’s first reaction was, “You’ve got to be kidding me!”

[10:14] Darrah didn’t have any other ideas what to do, so she flew to San Diego to work with Garrett. Garrett had already gotten started with a small team. Darrah shadowed them and looked for problems in the business plan. After a week, she flew back to Atlanta and connected with as many of her former clients as she could.

[10:43] Darrah asked her former clients about their current payment systems and what it would take for them to switch. She kept hearing the same story. The merchants had been sold a “bill of goods” with costs that were different from what they had expected. They would switch to a provider with honesty and transparency.

[11:12] Darrah had not been initially enthusiastic about this service of credit card processing but she could get really excited about the way in which she could interact with and help these small business owners. So, she became really excited about the service. Now, Darrah calls herself the Chief Curiosity Officer of her company.

[11:47] Building the business was a lot harder in practice than in theory. Small companies are tied into their merchant services provider by contract. Many of them believe the pitch they were sold by those providers. Darrah almost felt like the Robin Hood of financial services. It took longer than she expected, but over time, it worked.

[13:08] Darrah tells how she started Network Under 40 and then Network Over 40. She just wanted to meet the need of a friend and she was already a success at networking. It snowballed to an event a month, and she expanded it to other cities. In eight years they have served over 30,000 people. It’s about building real relationships, not selling.

[16:29] Darrah explains how she established “Friends first and then networking.” From the first event, Darrah stacked the room with people she knew would embody that idea. She told them it was not going to be a place where it’s just a business card exchange or the first question is “What do you do?” They were prepared to work the room as friends.

[17:03] As it grew, Darrah used ambassadors in a shirt with the event logo and colors and the slogan, “Let’s talk.” They act as event concierges. They set the tone and help keep the culture alive. People engage on a human level before involving their professional life.

[18:08] About two years ago, Darrah had an enduring, intuitive feeling that there was a new incarnation of her career on the horizon; she had no idea what it was. It was her job to figure it out. For six months she dug deep and reflected on what it could be that was coming next. She realized that people kept asking her how she lives the life she does.

[19:01] Due to the path she had followed, Darrah had the freedom to travel when she liked and work beside high-profile people. Had she followed a traditional “success” path, she would be asking the same questions her friends asked her. She knew her best skill was connecting people to people and to resources. She felt the need to create a blueprint for others.

[20:06] She decided to do a virtual summit so anyone with an internet connection would have access to all her peers and mentors who have helped her along this journey. She broke the summit into three categories: 1) What do I want out of my life? 2) How do I build a career or business to include that? 3) How do I develop a support community?

[21:18] Darrah organized 45 speakers with 20 hours of content. The summit ran live online over three days and now is available online for purchase. Each category took one day. The speakers were assigned according to their unique talents, ideas, and skill sets. Darrah interviewed half of the presenters; the rest went solo with resources for action.

[22:21] Darrah sees her essential self as the exact person she was ten years ago, but some of her characteristics have changed a lot. She went from being reactive and stressed about “résumé virtues” to being more secure and understanding of her intrinsic human value apart from her career and accolades.

[23:22] Darrah explains why she is proudest of her emotional journey and how she can use her vulnerability to help others learn they are not alone, wherever they are in their journey. Close to 10,000 attended the virtual summit.

[24:18] Darrah releases a weekly conversation with Deepak Chopra. Darrah says that Deepak Chopra was not chasing a fortune. It came as a secondary component to utilizing his gifts in service to the world while having fun and feeling joyful. In the same way, Network Under 40 was Darrah doing what she loved. Money was a by-product.

[25:34] Darrah suggests that when you can understand your unique gifts and skills, and with whom you empathize enough to help them on their way from A to B, that is a melding of who you are as a spiritual being with how you can grow something in a capitalistic way.

[26:00] Darrah talks about the shared insights between entrepreneurism and team sports that she observes from her many celebrity interviews. Founders are not lone wolves. The people around you make you a success.

[26:57] Darrah wrote Money-Making Sunny after watching the market collapse and seeing how much debt her high-earning friends had accrued. She saw a global epidemic of financial ignorance. Darrah’s parents had taught her very early about money, investing, compound interest, and giving back. She wanted to help others.

[28:33] Darrah saw very little children’s literature on financial responsibility. Parents weren’t successfully teaching financial literacy to their children on their own. So Darrah used her writing talent to create a story that includes an appendix of resources for parents to use for teaching.

[29:51] There is a downloadable picture to color on the website FinanceWhizKids.com. Parents send her videos and images that show how their children are finding excitement around financial responsibility. They are learning it doesn’t just pop out of an ATM. There are consequences with money. Demonstrate them for your children.

Charles Morgan is a lot of fun to be around and to learn from. He learned about business first from working with his father, starting when he was a little boy. As IBM’s top systems engineer for the entire state of Arkansas, Charles sold Sam Walton his first IBM System 360 Mainframe, which allowed Walmart to take off. He’s a pioneer of big data, having built one of the first companies in the industry, Acxiom Corp. And now, at a time when most of his contemporaries are retired, he’s having fun being a very hands-on CEO at First Orion, whose Privacy Star app is blocking literally billions of scam calls. But then, he has also driven the 24-hours at Daytona, and at most of the other major tracks around the U.S., too. He has the X-rays to show for it.

Key Takeaways:

[:25] Ray Hoffman introduces the guest, Charles Morgan, First Orion CEO.

[1:30] What shaped Charles and gave him the confidence to take on the risk that allows the reward in capitalism? Charles credits the DNA he inherited from his father and grandfather. He says a family history of starting businesses helps. He wasn’t afraid of entrepreneurism and worked in the family business.

[2:32] Charles doesn’t think it was courage that drove him but just the understanding that entrepreneurism is what he ought to do.

[2:39] Charles sees capitalism as the freedom to pursue your own talent and interests in a business sense that allows you to be all you can be for yourself, for your creative side, and for your family. That is also, for Charles, the essence of the joy of life.

[3:09] Charles would not do well in a controlled environment with little or no self-direction.

[3:30] Why is Charles, at age 76, still heavily involved as a CEO? He says his wife is pleased that she is free to do lunch with whomever she wants, as Charles is at work!

[4:18] Charles is a geek at heart and loves problem-solving. His enjoyment in racing comes from the technical problem-solving of getting a car setup right. Charles has designed some race cars.

[4:39] Charles likes people problem-solving and business problem-solving; coming up with a really good organizational strategy can be an exciting thing. Innovation, producing results for the customer, and putting the right person in charge of each area, are important for small companies like First Orion or large companies like Acxiom.

[5:09] Business is and always has been a ‘people game.’

[5:12] Charles still loves technical problems. He is still programming prototype software for the solutions First Orion offers. Charles wakes up at 5:00 a.m. and goes to his computer to work on the current problem for an uninterrupted couple of hours. Then he goes to work at 9:00 a.m.

[5:57] Charles says we all decide what to do with our lives. He believes retirement is the freedom to be able to get up every day and do what you love to do. Everybody’s job ought to be retirement every day, from the age of 21 on.

[6:32] In Charles’s first book, Matters of Life and Data, he said his businessman father understood reward but not risk. His father had the vision for opportunities but did not understand how to make them happen —  how to get the right people doing the right things, and where to take the right risks. He didn’t achieve the level of focus he needed.

[7:23] In his father’s hardware business, he diverged from hardware to wood doors and frames, aluminum windows, and plywood. He tried to be all things to all people. He didn’t have the discipline to decide how his business would grow and where he would get the resources to grow it. It was helter-skelter.

[7:59] His father knew the reward he wanted was a successful business but he couldn’t organize it very well.

[8:16] At age 17, at the direction of his father, Charles took a truck and drove his 15-year-old brother from Fort Smith to the Andersen Window factory in Philadelphia for Charles to pick up a load of windows and pitch to the Andersen brothers an improvement on their window design. His father had sent a letter to Andersen about it.
[9:44] The Andersen brothers had a conference room prepared for them, with the company engineers ready to hear his presentation. Charles explained it to them and they were very interested to see if they could incorporate the idea into their windows.

[10:12] That night, Charles and his brother headed on a train to New York City for two plays their father had bought tickets for them to see. They picked up the tickets at will-call. After two nights in New York, they took the train back to Philadelphia and drove back to Fort Smith with their window order.

[10:52] In 1966, Charles started his first career job at IBM. He was made the top systems engineer for IBM for Arkansas.

[10:59] In Charles’s book, What Now?, he recalls a lesson he learned early on from a senior IBM executive. He was told never to burn bridges with someone at work, whether it’s a poor employee or a bad boss. Respect them as human beings. Circumstances change and you may work together again. Decades later, that advice still serves.

[12:05] Charles made his first investment in First Orion/ PrivacyStar when a representative presented it to him as a concept of putting software into the switching systems of telecoms’ networks to allow individual customers of the telecom to block numbers that they didn’t want to call them.

[12:43] The obstacle ahead of them was that the telecoms weren’t interested in granting network access to outside software engineers. So that idea didn’t work.

[12:56] The idea came at a time when Charles expected he would be leaving Acxiom and he was looking for something “to dabble with.” Charles moved to Dallas and invested in First Orion with $1 million with Jeff Stalnaker, the COO. At first, Charles was not expecting to become extremely involved with the investment.

[13:44] Charles talks about how he left Acxiom, as the face of the company. He had been getting tired of the process of running a company of that size and new regulations, such as the Sarbanes-Oxley Act of 2002, added to the burden. A large investor, Jeff Ubben, brought a proxy battle, then joined the board and started trying to oust Charles.

[15:58] Charles was tired of the conflict. He invested in First Orion to get his mind off the struggle on the board at Acxiom.

[16:24] Going into First Orion/ PrivacyStar, Charles didn’t keep in his mind how long it took and how difficult it was to build up Acxiom. But he did remember some of the things that didn’t work, so he was able to avoid some of the early mistakes.

[17:27] As the most dominant company in the direct marketing industry, Acxiom got a little cocky at the influence they had. As CEO, Charles could call on executives at any level and knew all the senior guys at major corporations. His son tells him, “You were kind of a big deal!”

[17:50] Charles wrote in his first book, “A good entrepreneur knows what he doesn’t know.” At the beginning of his involvement with First Orion, Charles didn’t know the telecom industry, nor did he know how little the man dragging him into it knew about the telecom industry; most of his claimed knowledge was actually stuff he’d made up.

[18:28] Charles asked his friend, Bill Connor, to meet with the man from First Orion. The meeting didn’t happen until after Charles had put in the $1 million. Bill told him “Well, I hope you’re successful,” but didn’t say what he thought — that the man was a fraud — until Charles cut off the relationship with the man.

[19:31] Charles wrote in his book that “We had no idea of the vastness, the complicatedness, the downright convolutedness of the systems that we were stepping into.” Charles says the networks pre-date IT. There is layer upon layer of technology that all has to work together. Somehow, phone calls get through.

[20:25] First Orion has had to integrate their technology into those networks, thanks only to a bunch of amazing people. The systems, to this day, are very complicated. First Orion interrogates every single phone call to every user of T-Mobile today, to see all its characteristics, to try to figure out if it’s a scam call. It’s a complicated process.

[21:19] Today, PrivacyStar is able to block or identify about 90% of scam calls. If you used to get 30 scam calls a week, that cuts it down

There aren’t many 32-year-olds in any profession who have assumed the kind of leadership role that Stacy Lewis has in the world of professional golf. Not only by her 12 LPGA tournament wins so far, including two majors, or the fact that she was the first American woman in more than 20 years to win the LPGA Triple Crown — no, there’s more to it. Because a girl who grew up in a back brace, as she did, would not be a prime candidate to turn pro, let alone become number one in the world. She has stepped into controversy — less as a disruptor and more as a leader. She has inspired change and driven change. The companies she represents as a brand ambassador, such as KPMG, Marathon Petroleum, and now, Stephens, Inc., know to turn to her for much more than just club selection and putting tips.

Key Takeaways:

[:19] Ray Hoffman introduces the guest, Stacy Lewis.

[1:15] Stacy has a degree in Finance and Accounting from the University of Arkansas. This is a good qualification for talking about the business of being a professional golfer.

[1:28] Stacy had planned to get a regular job after school and not play professional golf.

[1:40] Ray lists some of Stacy’s many college golf awards that pointed her toward success as a professional golfer.

[1:54] Before college, academics was her focus. In the last couple of years of college, she started considering a professional golf path.

[2:13] How does Stacy apply her finance and accounting knowledge? It feels like her own little business. She talks about hiring, firing, and payroll, and accounting. Her classes prepared her for it. She pays another person to do her taxes.

[2:55] Stacy is CEO of Stacy Lewis. She runs her business on an Excel spreadsheet.

[3:19] Professional golfers are independent contractors. Stacy explains what that means. No one else is making decisions for you. A lot of people are not prepared for that. There’s a lot of pressure to play well because you have a lot of people to pay before you get the money, especially if you have no sponsorships.

[4:28] In college, Stacy did not know how much of a team she would need to employ as a professional golfer. She keeps her team really small. She wants people she trusts to tell her if she needs to change anything. She has a caddy, a swing coach, a trainer, an agent, a financial adviser, and an accountant. Plus her husband and her parents.

[5:50] Stacy contrasts the PGA and LPGA purse payouts. Stacy does not ever see the purses being equal in the twenty or thirty years she has left in her career. She expects the gap to get smaller. For now, women are making about a third of what men make. Today, women can make a living out of playing professional golf, more than before.

[7:23] Women tennis players have reached parity with men players. Venus Williams was a driver of that. It helped that men and women play at the same courts at the same time. It would take bringing the PGA and LPGA together to the same course to create change like that. The European Tour and the LPGA met at the Vic Open in Australia. It’s progress.

[9:15] What would it take to make a joint PGA/LPGA tour? A lot of money is needed to make the two purses equal.

[9:56] A smaller number of golfers from each organization would probably play, for a smaller purse. PGA players and audiences are sometimes surprised by the level of play in the LPGA.

[10:38] LPGA play is more relatable for the average male amateur player who does not drive as far as a PGA player. There is more finesse to the women’s game and more feel in the wedges and putter.

[11:10] Stacy would like to see a joint tournament at a Links course in Scotland, but it could be done anywhere. The biggest issue would be the course setup with tees. Links Golf is Stacy’s favorite style of golf.

[12:11] Stacy had a drought from 2014 to 2017 where she didn’t win a single tournament. In 2017, when she won a $195K purse, she donated the check to Hurricane victims in Houston. The Tuesday before the tournament the thought came to her, and she called her husband to discuss it. He said, “Let’s go win the thing!” It gave her a focus.

[13:04] Stacy is a fiery player, but that week she felt calm. She knew the outcome had already been decided and all she had to do was be there for it and enjoy it. It was a surreal week and a surreal experience. It’s been so cool for her to see the impact of that money, helping rebuild houses in Houston for eight families.

[13:53] Stacy tells how the donation was made to the St. Bernard Project to distribute the money in Houston for Hurricane Harvey relief.

[14:19] Last year, Stacy worked more on motherhood than on golfing. It has completely changed her world. It forces her to be more focused when she practices, and then get home to be with her daughter. Stay played a tournament in January, and her baby came with her, going to daycare while Stacy played. The LPGA Tour has daycare.

[15:14] There were four or five babies born to LPGA golfers last year. One of them also will come to a summer tournament. After success on the golf course, Stacy was ready for the challenge of motherhood. She still feels she can play some pretty great golf, coming back from this, as well.

[15:43] Stacy Lewis and Phil Mickelson are the principal faces of golf for KPMG. Stacy wears a blue hat, as for every blue hat KPMG sells, they donate five books to children in need as part of their campaign for literacy.

[16:17] Written into each KPMG sponsorship contract are things like wearing the logo, which everyone sees, and service days. Stacy and her instructors spend a full day with about 25 women clients invited by KPMG for instruction, playing nine holes, a scramble for fun, and a time to network. Other sponsors may ask for different services.

[17:04] There are five to six days a year that Stacy spends in service to KPMG and their clients for their sponsorship. There are also other meet-and-greets, social media posts, videos, and other things behind the scenes. Every sponsorship Stacy has requires at least a couple of service days, so they add up to quite a bit.

[17:28] Stacy’s agent is concerned about her time. She cannot take on any more sponsors and have time to play 25 tournaments in a year.

[17:50] Logo placement on shirts and hats determines how much they are seen on TV. The front of the hat is the number one location, then right chest, side of the hat, collar, and sleeve. The golf bag is low on the list. Camera angles are important.

[18:29] Stacy’s clothing sponsor is Antigua. To start the year, they send her a big box of shirts and update them if needed in the summer. In the fall, they have a new line of colors and designs, so Stacy gets another big box. Antigua does a tremendous amount of work in women’s golf. Stacy has worn Antigua for eight years.

[19:16] Stacy recently added Stephens, Inc. as a sponsor! Stephens has a soft spot for Razorback golfers like David Lingmerth and Stacy Lewis. Stacy was excited when Stephens Inc. reached out to her after she had seen the logo on the guys.

[19:41] Over the years, Stacy learned that she represents her sponsors wherever she goes. She chooses sponsors that share her values and make sense for her.

[20:19] Stacy has invited some of her sponsors to sponsor LPGA tournaments. She likes to push the envelope and increase the purses. Stacy pushed the idea both with KPMG and Marathon.

[21:37] Stacy received a phone call from KPMG, her lead sponsor, that her contract would be paid in full during her maternity leave, without playing the full year. Stacy remembers the phone call which she received sitting in the parking lot of Wilshire Country Club in LA. At first, she thought something was wrong. The call left her in tears.

[23:02] Most of Stacy’s other sponsors did the same thing, starting a trend. Stacy hopes the trend continues to support women having babies in the future. Lynne Doughtie, CEO of KPMG is passionate about women in the workplace speaking up for causes. She is amazing as one of the first women CEOs in her industry.

[23:42] Stacy’s high profile as number one in the world helped create a major precedent in sponsorships. She says she likes to change things! We can always make things better. She even got the maternity policy on the LPGA Tour changed. She wants girls to see that they can have families and play professional golf.

[24:24] The travel for the LPGA is harder tha

For Rosina Samadani, New Year’s Eve — the fireworks, the ball drop, the champagne — came on December 28, 2018. That’s when her company, Oculogica, received FDA approval to market a major tool — a breakthrough algorithmic neurodiagnostic tool for determining whether a person has had a concussion. Oculogica’s EyeBOX® does that by a modern variation on what doctors used to do as a matter of course in head injury cases. The EyeBOX® looks into the patient’s eyes to see how they move. Only, the EyeBOX® can do that and analyze over 100,000 data points in the space of less than four minutes. That’s a breakthrough. And that’s what Rosina Samadani’s company, Oculogica, has done.

Key Takeaways:

[:18] Ray Hoffman introduces the guest, Rosina Samadani, CEO of Oculogica.

[1:06] There is a dire need for an objective diagnostic. Rosina hopes we are entering a new era in concussion diagnosis. Oculogica sees itself as part of a multi-modal assessment of a concussion. There should be multiple objective assessments that are performed simultaneously to understand your concussion.

[1:45] Rosina tells how the FDA informed Oculogica of authorization to market the EyeBOX®. Oculogica’s 950-page submission needed one punctuation change, and then it was officially approved and authorized.

[2:27] Oculogica’s EyeBOX® is the only non-invasive, baseline-free aid in diagnosis of concussion. One other test, the ImPACT® Test, is authorized as an aid in diagnosis of concussion but it requires a baseline and is mostly used on sports teams.

[2:59] The EyeBOX® can be used in the clinic and emergency room, and it’s a lot faster than the ImPACT® test.

[3:06] Rosina discusses what Oculogica has learned about concussion and physicians. Concussions manifest in many different ways. Not every person’s concussion is the same. The symptoms are subjective. Rosina lists symptoms that can mimic other conditions under stressful environments.

[4:26] There has not been an objective diagnostic for concussion until now.

[4:33] The speed of the test is great. Oculogica wants to get to an even faster test. A test where you don’t need a baseline means that you can’t game the test. Rosina describes how athletes and military personnel have been able to game previous tests to get back into action. EyeBOX®, with no baseline, removes the ability to game the test.

[5:22] The idea was developed by Rosina’s sister, Uzma Samadani, M.D., Ph.D., a professor of neurosurgery at the University of Minnesota. Dr. Samadani was looking at cranial nerve palsies, and she correlated eye movements to the cranial nerve palsies of cranial nerve three and cranial nerve six.

[6:01] Dr. Samadani knew that these nerves are implicated in a concussion. She had a hypothesis that eye movements correlate to a concussion diagnosis. She did a study to test the hypothesis and it was shown to be correct by the data.

[6:18] Before an objective test, the main test was to observe eye movements following a finger.

[6:37] Dr. Samadani discovered this connection in 2011 and wrote up patents, did a couple of publications, and licensed the patents into a company that she founded in 2013, Oculogica. Rosina joined the company as CEO in 2015.

[7:04] Rosina had always thought she would like to run something and take something to the FDA through the authorization process. She has been a management consultant for a very long time and wanted to get into the work of it. She did not think she would be doing it for a company based on technology that her sister had developed.

[7:58] Rosina studied mechanical engineering and earned a doctorate in biomedical engineering. Then, she went to McKinsey & Company for six-and-a-half years, where she worked on engagements for a number of larger companies.

[9:42] Rosina talks about the learning experience of spending every single day and weekends working extremely hard for two-and-a-half years on getting the FDA authorization to market EyeBOX®.

[10:34] The execution requires you to go to the FDA with a discussion of what you are going to do, and then, go out and do that by a study, finding four to six medical centers that are willing to do this study. You have to design the study. You have to get IRB approval. You have to get your patients enrolled.

[11:03] You have to make sure the data is collected in a fully FDA-compliant manner. When you are a small company, everybody is engaged in the process. They had just a handful of people and they all had to make sure it was happening.

[11:19] The strategic element came on top of the execution. There is not a definitive diagnosis of concussion, so when you’re setting up a clinical trial, what do you compare it to? That is a separate discussion with the FDA. The clinical reference standard is a full-on set of multiple discussions with the FDA.

[11:44] There is an FDA review team for these discussions. Ideally, the team is steady, but people come and go with job changes. Rosina found the FDA to be very reasonable and logical in their requests. Everything they asked for made sense to her. Oculogica was very transparent with the FDA and they saw that and appreciated it.

[12:26] How did Rosina come to be CEO of Oculogica? She explains the history. Rosina was helping them look for a CEO. When Uzma offered the position to her, at first, Rosina resisted because of the family relationship. That made Uzma even more sure Rosina was right for the position. They talked seriously for three days before she accepted.

[13:43] The full company team is six people, working as a virtual company scattered around the country. There is a Minnesota office that serves three of them. There is a New York office for one. Rosina works from home, and another person works from San Francisco.

[14:07] Oculogica found the people where they already were. Three engineers were in Minneapolis and they found other engineers. None of them wanted to move to New York, so they found a clinical operations manager there and an analyst in San Francisco.

[14:36] The tools that are available today to help people work virtually are phenomenal. Zoom and Slack are maybe even more efficient than being in the next room.

[14:49] Every single day, the company has a Zoom video call. Rosina has asked the team to get on Zoom rather than a phone call whenever they can. Everyone has their own Zoom room. They use Zoom with all of their physicians and partners. Looking at somebody is so different than just being on the phone with them.

[15:13] In 2018, Oculogica received the Luis Villalobos Award from the Angel Capital Association for outstanding ingenuity, creativity, and innovation. One of the members of the selection committee said “This is a company that has done everything right. … It is hard not to get excited about Oculogica.”

[15:38] Rosina talks about receiving the award, which seems like a lifetime ago. Uzma and Rosina have talked about mistakes they have made. You can make mistakes; they just can’t be fatal mistakes. The mistakes were tiny enough that Oculogica could overcome them.

[16:11] Rosina talks about her father, a physician, who told her, when they got the FDA authorization, “The biggest accomplishment is that you have made a difference for patients - that will always be there. This change will not go away.” Oculogica can build from here, making a difference to people.

[16:31] Everywhere Rosina goes talking to investors, they know someone who has had a concussion, and this will make a difference.

[16:37] Traumatic brain injury is the leading cause of disability and the leading cause of death for young adults. Undiagnos

They’ve only been business partners since January 2017. When they’re not on the road, usually in two different cities, their homes are about 1,200 miles apart. Yet, Joe Gilliland and Larry Lemons have a knack for finishing each other’s sentences. They share a vision of a somewhat disruptive, more comprehensive approach to sports management. They call their company Anth3m because they and their affiliated firms give voice and management to the longer term of-the-field and off-the-course interests of rising stars such as golfer Austin Cook, and Oakland Raiders tight end, Jared Cook. Too many Cooks? Not in the case of Joe Gilliland, Larry Lemmons, and Anth3m, which is based in Miami Beach.

Key Takeaways:

[:18] Ray Hoffman describes Anth3m sports management company and introduces Joe Gilliland and Larry Lemons.

[1:15] Joe and Larry explain why Anth3m is based in Miami Beach. Athletes love the beach. It’s easy to get an athlete to come to visit Miami Beach for a meeting or an event.

[1:25] Joe and Larry are basically on the road all the time, visiting athletes. They have partners spread out across the country to meet any athlete’s needs at any given time. Larry is in Miami Beach every other month, while Joe is there as little as he can be.

[1:56] There are two full-time employees in Anth3m headquarters in Miami Beach. Larry and Joe are primarily on the road meeting people.

[2:09] Joe lives in Dallas, Texas. Larry lives in Cleveland, Ohio.

[2:20] Joe and Larry always have something new and exciting happening daily. They think outside the box and they want their company to find new and innovative ways to strategically align with their clients and partners.

[3:08] Larry explains how he was doing business development for about six years with a couple of athletes. His business partner was his first client. As Larry was developing the model of Anth3m, he knew it was important to find someone who had actual management experience.

[3:40] Larry was looking for someone who could bring traditional aspects of management to his athletes in a non-traditional situation. His partners introduced him to Joe. Larry laid out the vision for him and he just got it. They’ve been going ever since.

[4:08] Larry has an economics background with JP Morgan Private before branching off on his own. Joe started at UBS and moved to UBS Private Wealth. At the same time, he founded a digital media company in the golf space, with two friends from college. It grew into something far bigger than they had anticipated.

[4:43] Joe gives the shortened version of his career. He and his friends created a YouTube video that got 30K views. That led to a second video that got 100K views and it continued. They started getting contracts in the mail to monetize the video and build the platform.

[5:09] Joe looked over the contracts and they filed an LLC, looking to make a little bit of money. Golf Digest wanted to do a full series. Callaway Golf called. That led Joe to full-time management representation as well as business development for athletes and consulting on behalf of digital content marketing strategies.

[5:49] Larry and Joe were both willing to take on mitigated risk. You have to have an entrepreneurial spirit to launch a business. That was what drew Larry to Joe. They had both built a business from the ground up.

[6:08] Larry says you need to understand what it means to go into the trenches and build something that certain people may see as taboo or different. They were taking on an industry that had set ways. You need people who will understand the vision and the struggles you have to go through to get where you want to be.

[6:41] Joe illustrates the biggest difference between sports management today and the past by contrasting Michael Jordan, who was untouchable, with Lebron James, who is fully accessible. You feel like you have a personal relationship with him, day in and day out, from everything he’s been putting together.

[7:29] The industry has been focused on sponsoring an athlete and getting them as much money as they can in return for as little value as possible. At the end of the day, the sponsorship doesn’t provide value to the company that you work with.

[8:07] There is limited space available during the athlete’s performance. You have to find a way to create engagement opportunities for the brand. Today, you need to have a story about the brand’s association with the player and you need to tell the story by way of digital content, social media strategy, and public relations for audience engagement.

[8:50] Athletes are not experts on marketing. They don’t understand that on Instagram and Twitter, they are shaping how people see them. Anth3m helps athletes make that communication intentional by matching an athlete’s message with a brand that aligns with their values and products they legitimately use.

[10:05] Anth3m is telling authentic stories — the athletes don’t mind doing it and the brands get more out of it. They’re creating lasting, organic partnerships.

[10:29] Joe points out that Anth3m is not an agency. They don’t handle player sports contracts or team-related businesses. A lot of times, they align strategically with agencies to help support the players in these other areas. Anth3m is unique in the style of relationship they have within the business development sector.

[10:58] Anth3m is partnered with an actual public relations company, with a digital media and social media company, and a strong content creation company called Ideas United. They are partnered with a franchise and business development company, Apex. That is not common in the sports management industry.

[11:44] Anth3m’s goal is to help their clients, the athletes, develop their own personal anthem. A lot of athletes have unknown talents they want to use and passions to pursue. The average NFL career is three years. It’s a job, not a career. Anth3m wants athletes, after a long career, to have their sport remembered as a footnote to their lives.

[12:51] Anth3m’s goal is not to get athletes to the top but to guide them down into the next phase of their career, as well. It’s a full journey. The athlete is their own personal business. They hire Anth3m, to be the ‘CEO’ of their company. When they retire from their sport, they’ll be ready to step into a role in their business.

[13:53] Larry says it’s come a little faster than anticipated. The firm was two years old in January. Both Larry and Joe have been working with athletes for a number of years.

[14:25] Joe brings up a client case study, Brice Butler, who has proven himself to be a very capable receiver. What makes him a fit for Anth3m’s model is who he is as a business professional. He is into fashion. Last year at Men’s Fashion Week in Paris, he was voted as one of the top eight best-dressed athletes at the shows.

[16:12] Joe was heavily focused on golf before he met Larry. Larry loved the model Joe had put together of building brands and platforms for the athletes away from their sport. Larry said, “Let’s do it for the NFL.” It took Joe time to become fully aware of how the NFL works. Now they are branching into the NBA.

[17:21] Larry had just taken the dive into golf and wanted to learn from Joe. Both Joe and Larry had some learning to do about the NFL space as a whole. Relationships with individuals have helped them pick it up quicker. Bringing on NBA athletes will be different from either golf or the NFL.

[18:30] It was a surprise to Larry what the learning curve for Joe was in the NFL space. It took Joe some time to catch up to Larry. Larry and Joe talk about when you can call an NFL player vs. a golfer. Golfer Austin Cook will pick up the phone every time Joe calls. If Joe called an NFL player four times a day, they wouldn’t answer for a month.

[19:57] Ray recently saw a 1960s video of Palmer, Niklaus, and Player on the Perry Como Show, playing an edited round of golf. These were agent Mark McCormack’s big three. Joe believes that Arnold Palmer made sports marketing cool. Mark McCormack was revolutionary. He wrote What They Don’t Teach You at Harvard Business School.

[21:09] The lessons Mark McCormack learned in the 1960s are still applicable today. Joe talks about the thousands of dollars Arnold Palmer won playing golf in contrast to the millions of dollars athletes make today. Arnold Palmer became a multi-millionaire through marketing his story and brand.

[22:31] Larry talks about how Anth3m works to understand the important parts of an athlet

The organization known as SIFMA goes back to 1912. It is a trade group which was first known as the Investment Bankers Association of America, then for many years, the Securities Industry Association, and now, the Securities Industry and Financial Markets Association (SIFMA). SIFMA may be best known for a game played by middle school and high school students that represents the only economic education that some of them ever get before going out into the working world — The SIFMA Stock Market Game™. SIFMA’s CEO is Ken Bentsen. He’s a former member of Congress, who, in a relatively short eight years in the House, compiled a rather lengthy resume of bipartisan financial solutions. Meet Ken Bentsen.

Key Takeaways:

[:19] Ray Hoffman describes the Securities Industry and Financial Markets Association (SIFMA) and gives background on its CEO, Ken Bentsen.

[1:09] Ray introduces Ken Bentsen.

[1:11] Ken comments on SIFMA’s mission statement, “SIFMA exists to advocate that America’s capital markets operate effectively and efficiently to the benefit of all market participants.” Ken describes the maturity of the U.S. capital market system and its correlation with the U.S. economy.

[1:51] Ken notes that the capital market system is one of the most highly-regulated industries in the United States. While regulations ensure a level playing field, it is also important that markets are able to operate efficiently and effectively. If not, credit will not be allocated to the best ideas — the great innovations that create jobs.

[2:33] The U.S. capital market has created an upward sloping chart in terms of the growth of the U.S. economy, going back 200 years. Even coming out of the 2008-2009 Great Recession, the U.S. came back more quickly than other jurisdictions around the world. Ken credits the resiliency of the U.S. capital market system.

[3:34] Ken’s covers his career path, from his Master’s degree in public administration to working as a Congressional staffer, to following Congressional finance committees, to working in public finance in New York, to the House of Representatives working on financial services legislation, to consulting, to running a trade association, to SIFMA.

[6:06] Ken served for four terms in Congress from Houston. He lists the committees on which he served, all tied to finance and budget.

[6:18] Ken discusses the public’s general understanding of finance today vs. 20 years ago when he was in Congress. People feel pressure from the financial issues that impact them personally, whether that’s housing, cost of living, healthcare, or the effect of trade on jobs. People can get more for their dollar today, including new technologies.

[8:01] It is most important to grow the economy as much as we can, to be able to solve fiscal issues.

[8:33] Capital markets definitely play a role in growing the economy. Ken says, “We’re not the end — we’re the means to the end.”

[8:42] The Stock Market Game™ is run by the SIFMA Foundation, which has been in place for 40 years. The Stock Market Game™ is the premier program that they do in thousands of schools across the U.S., touching hundreds of thousands of students every year.

[9:27] The SIFMA Foundation built on the game over 40 years with programs like InvestWrite®, and Invest It Forward™. The results are amazing to see. They impact middle school and high school students, their teachers, and parents. Sixth, seventh, and eighth grade students in the programs do research reports.

[10:05] This is important not only from the standpoint of financial literacy, but it also goes toward understanding the structure of the American economy, built in part on our financial system, which makes our economy stronger in contrast to other economies.

[10:26] 12,000 schools in all 50 states participate in the programs every year, involving 600,000 students and 15,000 teachers. In 40 years, 18 million students have gone through the program. The SIFMA Foundation is working harder every year to increase participation.

[10:47] SIFMA works with The SIFMA Foundation every year to do a competition to bring the top 10 schools to Washington D.C. to meet with their Representatives and Senators. This underscores to the students coming from all over how big and diverse this country is.

[11:18] Students from all walks of life come in and talk about portfolios they’ve put together, the things that worked, and mistakes they made. They talk about looking at price reports every day, and research reports. It’s just amazing.

[11:34] The top 10 winners of The Stock Market Game™ 2018 Capitol Hill Challenge came almost equally from areas represented by Democrats and areas represented by Republicans. Ken says it is really refreshing to see what The Stock Market Game™ does with these kids from all walks of life.

[12:11] “To the benefit of all market participants” - Ray quotes the SIFMA mission statement. In the truest sense of the U.S. economy, we are all market participants. This is capitalism.

Mentioned in This Episode:

SIFMA

The Stock Market Game™

Ken Bentsen

Drexel Burnham

The SIFMA Foundation

InvestWrite®

Invest It Forward™

Capitol Hill Challenge

Stephens.com

This Is Capitalism