Summary

Carl J Cox, founder of 40 Strategy, shares his journey from being a CFO to starting his own strategic planning company. He emphasizes the importance of strategy in guiding a company's direction and increasing its value. Cox introduces the Captain Strategy Methodology, which focuses on de-risking a company and maximizing its potential. He also discusses the challenges CEOs face and the need for external support and guidance. Cox highlights the value of transparency and consistency in leadership and shares real-life stories of CEOs overcoming struggles. The conversation explores the concept of de-risking a business and the importance of strategy in startups. It introduces a risk matrix tool that helps identify and prioritize risks in a company. The conversation also discusses the value of storytelling in business books and the role of grit in overcoming challenges. The hosts share personal stories and experiences related to risk-taking and perseverance.

Takeaways

• Strategy is essential for guiding a company's direction and increasing its value.
• CEOs often face challenges and feel isolated, making external support and guidance crucial.
• Transparency and consistency in leadership are key to building trust and achieving success.
• De-risking a company is important for increasing its value and creating long-term wealth.
• The Captain Strategy Methodology helps companies develop strategic plans and execute them effectively. De-risking a business is crucial for success, and a risk matrix tool can help identify and prioritize risks.
• Strategy is essential in startups, especially when transitioning from product-market fit to go-to-market.
• Storytelling is a powerful tool in business books, as it engages readers and drives change.
• Grit and perseverance are necessary qualities for entrepreneurs, as they face numerous challenges and setbacks.

Sound Bites

"Most CEOs I know are wonderful, amazing human beings."

"CEOs often feel isolated, like they're on an island."

"Strategy is like the rudder of a ship, guiding the company's direction."

"Now I know what's wrong for my company. And now I want to fix this."

"If you focus on the top three, you can get 25% of your value back. If you focus on the top eight, you typically get 50% of your value back."

Links

Carl's 40 Strategy: https://40strategy.com

"Lost at CEO" book: https://www.amazon.com/Lost-At-CEO-Entrepreneurs-Strategy/dp/B0C5BD5DNM/

Please leave us a review: https://podchaser.com/DesigningSuccessfulStartups

Tech Startup Toolkit (book): https://www.manning.com/books/tech-startup-toolkit

Jothy’s website: https://jothyrosenberg.com

Who Says I Can’t Foundation: https://whosaysicant.org

Jothy’s TEDx talk: https://www.youtube.com/watch?v=PNtOawXAx5A

Chapters

00:00 Introduction and Background

08:12 The Struggles of CEOs and the Need for Support

13:23 Transparency and Consistency in Leadership

18:22 The Importance of Strategy in Guiding a Company's Direction

23:05 De-risking a Company: Increasing Value and Creating Wealth

25:37 The Captain Strategy Methodology: Developing Effective Strategic Plans

27:27 Product-Market Fit and Go-to-Market Strategy

29:18 The Power of Storytelling in Business Books

32:20 Conveying Lessons Learned Through Fables

38:21 The Role of Grit in Overcoming Challenges

And here's Carl. How are you, Carl?

I'm doing absolutely great. Good to see you again. And I really enjoyed when we were able to get together and have dinner in Boston together.

Yeah, it was great to see you back in some of your old haunts. But in fact, my first question is related to that. I think when I'm talking to somebody on Zoom, I'm so curious. Where are you calling from and all that? So tell us where you originally came from and where you live now.

Okay. So for those who live or are familiar with the Boston area, first of all, you never say you're from Boston. You say you're from your local hometown, but if you're from where I'm from, you typically don't say it. But where I'm from is Lin. So Lin Lin, the city of sin, you never come out the same way you came in. It was a tough town, still a tough town now. The best thing my mom ever did, she got us out of there. We kind of escaped, so to speak, in the tough time back a long time ago in 1980.

And she took us out to a little suburb out in this quiet little town outside of Portland, Oregon. And been there really honestly ever since. It's been a wonderful place to grow up, to raise my, get married, my high school sweetheart. And I've been able to do my businesses. But what's been great is I serve, I've been able to serve and work in clients in four different continents. My clients are national today.

I love traveling around and being there, but I feel like I have two homes just to let you know. I'm still a Red Sox fan, a Bruins fan, Celtics fan, technically no Blazers fan, but they don't even have a team these days, and of course, Patriots fans. Those are my love. My heart is still back in Boston, but I've lived in Oregon a long

So I looked on a map where your town is. And so it's like, it's actually, you know, a little further out than Beaverton. So you're over the hill from Portland. But Portland is still not so congested that, you know, for you to get to the airport is not that bad. Unfortunately, it's over the hill and on the other side of Portland.

Yes.

yeah, it's pretty easy. It's typically, I mean, there's no traffic. Like if it's a really, really flight, you know, it's a 35 minute drive. But I'm in North Plains, it's a little town, what it's called. it's just, you know, almost 3000 people. It's right near Hillsborough, Oregon, for those who are familiar with that area. Beaverton, of course, is where Nike is based at. And big Intel. So we have actually massive semiconductor factories. They're just right nearby where we are. But I just live out in the country, just off the grid.

And we have deer in our background regularly. So I get this wonderful place of backdrop, once again, where we live. no, yeah, it's easy to get to an airport and travel around the country. go to the East coast often. We have direct flights to Boston, DC, wherever we need to go to go to places. So I love traveling around and seeing places.

I don't know if I told you this, but I did two of my nine startups were in Portland. Actually, they were one was in Portland itself and one was in Beaverton. And I still lived here. I just commuted there and they did not have a direct flight. They did not have a direct flight from Boston.

Yeah, it's, now that's tough what you just described there because that really, you know, that hammers your day. you know, you have a full travel day when, when at least you get in, you know, you get to have that nine. Basically it's a six hour flight. If it's direct, you know, and it's not so bad five and a half six. And so, but yeah, if you go two flights, it's, it's eight, nine, 10 hours, right.

No, I didn't do it back and forth in the same day. would go out on a Monday and then I would stay for two weeks and then I would fly home on a Friday and then stay in Boston for that next week. I did that for two years and it was tough. but it's what you do. Right. mean, so speaking of, of what you do, you've got this, you built this company called 40 strategy based on your books and your podcast and

Got it.

Wow. Yeah.

So talk about the need you saw and sort of what you are doing to fill that need.

Jathi, like you, I'm an entrepreneur. I've been really fortunate to be a part of multiple different companies throughout my career. I started out as a bean counter many years ago in a CPA and was with several private companies, with a publicly traded company. But in my career, I've been with seven different companies. I've at least gone from 2X to 7X in size. And so I've had this really amazing experience. Now, what surprised me, this is the surprise, what I didn't know, is I ended up going, so I was fortunate.

I a CFO by the age of 30. actually I thought, by the way, I'm not sure if I told you this story, but I actually thought I was going to coach high school football and teach history. And just like, literally, no kidding, I was just asked to coach high school football again, like just yesterday. And so this is like my heart and my passion because football saved me. I remember I talked about that hard upbringing. Well, it was still hard when I was growing up. We grew up very poor. Football was the one thing that kind of kept me sane. And so I had this passion to give back. I've coached many years in youth sports.

But all that being said, I raised, went up, became a CFO. Jothi, I didn't know what strategy was. Even though was a CFO at the age of 30, I'd spent all my time just understanding numbers, right? A language of business. But I didn't understand how to make business better necessarily. And so I started getting taught how to do strategy. was fortunate 500 executives were teaching me in these smaller companies, meaning under 100, 100 million. And so I had this great experience and they said, hey, Carl,

We know you want to become this teacher in high school, know, teach, but if you do that, we're going to have to, we're not going to invest in you. So I had this really cool opportunity where I said I had to give up my dream of coaching at a time full time, but I ended up going forward and I started, they Hey Carl, can you solve it for us? I said, sure. And so, we saw this IT problem. And by the way, I'm not an IT guy. And the next thing they said, you know, can you help out with technical support?

We fixed technical support. You give me a hammer, I'm to break that nail. I am not the type of person who's going to fix the pipe, plumbing, you know, things in my home. I have to call someone to give a fix, but we fixed the departmental issues that were going on. Next thing they say, Carl, can you help set up distribution centers in Europe? I was like, sure, let's give it a shot. So I set up several different distribution centers in Western Europe. After that, just kept on getting opportunity after opportunity and we were doing strategic planning through this. The next company I was with,

grew from 70 employees to 450 employees in three years. Same thing, really good at strategic planning and execution. My next company was, we founded the US office for a company called Cascade Strategy. And this was my big surprise moment. I thought everybody knew strategy and execution. Well, I found out that 90 % of strategic plans fail. And we could actually see the data. We could see how bad people were at it. And so out of survival, of trying to keep our clients on our software,

I started giving free consulting advice. And after giving this free consulting advice, I started traveling around the US, traveling a little bit in the Caribbean, helping our clients. eventually said, hey, Carl, the CEO at our show said, hey, Carl, why don't you open up our US global consulting business? Well, I haven't mentioned I've got four kids. Three of the four have been in college sports. And I was like, I don't want to miss high school and college sports. I don't want to miss all that. So I politely declined, opened up 40 Strategy. 40 Strategy is called that because most organizations spend about 2 % of their time.

on strategy, i .e. about 40 hours per year. So the concept is hire 40 strategy to help you design your strategic plan of where you wanna go. And we also help keep people accountable to actually get it done. So instead of being only having 90 % failure rate, our clients have a 90 % success rate.

So you've got a lot of passion about the struggles that CEOs have. I could tell from just the short amount of time that we've known each other. So I bet you have some stories about some CEOs and the struggles. So maybe you'd tell us one that you think would be illustrative of your point.

Great. Yeah. Wow. That's it. know, one of my favorite things when I so lost to see our book, it's a written in a way where it's a story, right? It's a story about this entrepreneur in getting through his challenges and struggles. But I'll give you a real life story. It was really interesting. Somebody had actually read my book, Jathi, they, because it talks about the struggles of being a husband, of being a parent, of

managing a company growth of managing investors, right? Managing employees. It talks about all these challenges. And the CEO, he reads the book and he gets back to me and said, Carl, we only met for like four hours, but how did you write this book about me? Right? He felt like it was about him. But I'll give you an example of what I call a classic CEO struggle. A classic CEO struggle is they think

You

that most CEOs I know are wonderful, are amazing human beings. what I mean by that is they care about creating a great product or service for what they're trying to do. And they want to provide a great place of employment. Like most my experience are typically they actually care about their team and their staff and the management that they have. But the part that they learn at some part of their career is

they aren't told the truth.

Let me explain that. You know, if you think about it, right, every employee who's employed by a if they feel like they tell them the whole truth, they might feel like their job is at risk. Right? And as a result of that, they might not give you full transparency. When I experienced this for the first time is when I remember I elevated to CEO position. And I used to say this dumb joke.

as an accounting manager and as a controller and as a CFO and in my, and then finally I became a CEO and all of sudden I remember saying the same joke that nobody laughed at and all of sudden everybody laughed out loud. Same joke, right? What that means is that those who were listening were changed the way they thought and talked to me because of the position of Roy's at. And at the end of the day, my employment for them was giving them

you know, the ability to pay for their rent, their mortgage, et through their hard work and services. This is the hard part of being a CEO is that you're alone. You're on an island. That's why the book is called Lost at CEO, an entrepreneur's guide to strategies. The concept around this is that you need somebody else from the outside to help you can bounce off the ideas and be more transparent with, right? Because even though you're trying to do everything right,

you're not going to get fully the information back. And also we get caught up and are in the business. We don't focus on being on the business, right? And so I'll give you an example. One client I had, he came in and this is a story of a company. came in CEO. He came into a company because it was struggling. Five years, hadn't grown, Jothi. Five years. first time, actually this was a first time CEO position for him. And he was concerned and there was investors.

And I told him, said, Don, and you can read about, he'd be happy to tell you about it. said, Don, you need to do one thing is be yourself. Don't try to be anybody else. Be who you are. And then be consistent with that regularly. And I tell you what was so cool is he's doubled the size of the company. They now have significant EBITDA, like 18 % EBITDA. And now they have people who want to buy that company. It's because he had.

I helped plant that seed and I helped make sure he was consistent with being who himself or he can help get delivery. The challenge is when we sometimes get into this position, we try to be who we aren't and we fail. Right? And we got to be consistent with that, drive towards that. And I think the value once again of having a strategic coach, so to speak, you know, I'm just about coaching, just clarify, I more care about getting things done, but I care about that person, that CEO that is

Stock feels isolated, feel like they're on island, right? They feel like they're all alone on a boat, steering that ship and helping to find a way that they can get to their destination faster and with more value. And that's what I find enjoyable and that's what my clients get excited about.

Your story resonates incredibly with me, especially that one time, of course, when you are first time CEO. for me, was I had been CTO and I was with the engineering team all the time and interacted with everybody else in the company. And then actually the board fired the CEO because he had overspent.

He had set up a budget to do 21 million in revenues and he spent to that budget, but he actually only did 11 million in revenues. And I was supposed to be sort of in training, you know, learning. And they said, Tag, you're it. And I said, well, wait, I'm not ready. What are you talking about? And they said, listen, you either take over as CEO tomorrow,

Oof.

or we're letting go all 75 people. And now I will admit to you that I believe I made a mistake and I should have said, no, I'm not doing it because it's not the way to start your first CEO job. But I experienced this change instantly where people weren't talking to me and they were only telling me positive things.

And what I finally did in defense was I had a few people that were very close and good friends, and they would act as sort of moles that would just, all I wanted to know was what's the buzz? What are people saying? What are they worried about? What do I need to make sure I cover in my weekly communications to everybody? Definitely, and of course this is.

that this is going to be true of anybody that's elevated into that position.

Yeah, it's hard. I appreciate you sharing that too, Jeff, because it's an awesome, it's such a wonderful opportunity when you get up to run a company, whether you founded it or you came in as a management CEO. But it's a challenge, And it's sort of like being a parent or being married. You don't know it until you get there. Right? It's just like really silly thing.

I always kind of crack up of like people like anti, you leaders like, well, you put yourself in that role of management and responsibility and making sure that you understand at its core that you're like in that case of 75 employees, it's your responsibility to make sure the company's running. So you're providing for all of those families. That's a big deal. You know,

Exactly. And I've been dog -earing the pages in this book. One of the things about the benefit of somebody from the outside, or maybe it's other friendly CEOs that you can confide in, the reason that's so essential is that

Yes, you have to communicate to your whole company when it's small, but you can't tell them absolutely everything. And you also can't tell your board absolutely everything. And so I tend to then default to telling my golden retriever. But he never talks back. He never gives me any advice.

you

So I started having a CEO cone of silence, you know, once a month meeting over, there's this wonderful museum of science over the river in Boston, and we would get up there and it's an awe -inspiring place. And it's also great to just sit around with other CEOs who have committed to keep your secrets secret.

Yeah. Right.

And that was great. I want to get back to what the subtitle you have here is, An Entrepreneur's Guide to Strategy. And the title of the name of your company is 40 Strategy. And you've talked about how most CEOs spend 40 hours a year on strategy.

But tell us why you think strategy, what is strategy? What is so important about it? Why is this the basis of your current existence?

Well, it's let's go to the ship metaphor, if you may. Right. You have a big ship and let's let's say that ship is your company and that ship has a little rudder at the back. That's literally if you turn it one direction or another, that little tiny rudder, which weighs just a tiny fraction of the whole boat size moves that boat in one direction or another. And

If you don't turn that or put it in the right direction, you're going to go around in circles. You're just going to, the problem with we have is when you are a CEO of business, you're caught in the business with your day to day serving your clients, managing your suppliers, dealing with employees. That's your, that's your reality. It's hard to pull up and to make sure your rudder is going to the destination of where you intend. And, and that's my premise is I want to make sure that every

companies, not just every CEO, every company is not just floundering, but they're going somewhere with a purpose. And that doesn't have to be an exit, by the way. You know, your expertise is turning and turning around companies and help help exiting them. But it's a pretty cool thing to have an oil well, meaning to have something that's generating consistent cash flow for your family and for your employees. Like, that's a pretty cool thing, too.

But the only way you get there is you have to de -risk your company. You have to de -risk it. So first of all, so let's pull back to its core. Strategy, really simply, is coming up with a plan on how to go from A to B. Let's demystify it. That's it. A strategic plan is a collection of strategies to get to your objective, to get to where you want to go. And I use the term destination because most people fail at goals.

You know, the concept is, you know, what is it, what, four or 5 % success rate on New Year's resolutions. So it's lower and in some cases higher, but it's really low, right? You know, your chances are really low. Most people think of goals and like, it's a goal, meaning it's not necessarily where you intend to go. It's your goal. But if you say I'm going to a destination, if you got an airplane, like we talked about going from Portland to Boston, you expect to arrive on that plane, right? You expect to arrive on that plane and land in Boston.

That's the mindset you should have of your destination of your company. And what our process does, we call it Captain Strategy Methodology, it's an acronym, seven different key areas. If you do all seven of those, you're highly likely to be successful. The problem is, Jonathan, why I got into this is I've been involved with so many strategic facilitations in my career. And I have two whiteboards next to me, and I love whiteboards, I love them. I love coming up with ideas and talking through things. But the problem is,

But they're clean.

Yes, well, the back one is not the side one here. like to the back one clean too, but the one on the side is not. what the problem is this is the whiteboard is an idea, but it's not a plan to get there. It's not what everybody in the organization has to do to execute to get it done.

Now, what I'm really excited about is something just this year that we've uncovered. And man, I wish I knew about this 20 years ago. You'll get all this stuff I'm about to say here. One of the biggest challenges with companies, right? 90 % of a business owner's wealth is tied up in their company, a typical business owner. 90%. Okay. That's a lot. So the value of company matters, right? So there's two ways to increase the value of your company.

Increase your EBITDA earnings before interest taxes depreciation amortization, .e. profits. And the second thing is to increase your multiple. So EBITDA times multiple is equal to your value or company. The problem is most people look at the internet and they think it's a fixed number, right? They go, I have a 3x multiple, I have a 4x multiple, I have a 7x multiple. The problem is that's not true. The reason why the multiple changes

is because of risk. See, most people when they do strategic planning, they do this old process has been around since the sixties called the SWOT, strengths, weaknesses, opportunities and threats. The problem with SWOT is it's typically not data driven. It's usually opinions, open opinions about what they feel they're good at and what they feel they're not good at, meaning the strengths and weaknesses. Like for example, we have great people.

How helpful is that? It's like not, you can't do anything with, we've got great people. But what can you say and say is your executive team, is your leadership team, here let me just get, let me get to the point of this. As you as a CEO, can you leave the company for two weeks and not touch an email? And is the company still running without you? Right?

This is what I'm talking about. That's what I'm talking about when you have risk or don't have risk. People want to buy a company that can run effectively without you. What these $4 million strategies, this whole concept is we can most companies are have a 57 % decrease in value compared to what they could be worth. Like a typical million dollar EBITDA will get a 3x multi -million being worth $3 million. But what if you get to be worth $7 million? Think of that difference in retirement, right?

$3 million and let's assume 50 % after tax, a million and a half is all you get. That's not bad, but that's not great. But if you have a $7 million company and you get three and a half million, that's a big difference in your retirement. That's part of what we're trying to do is we care about the success of a company and everything around it and what they're trying to do. But we also want to make sure that that business owner's wealth is maximized.

And so we use this $4 million strategies method within our captain strategy execution plan process to help make sure that these ideas are monetized. Cause we actually now can monetize the return on investment on working on risk. I've never been able to do that in 20, you know, my entire career. And we now have software that can assess this and do this. It's the biggest game changer. It's so exciting. And,

You know, we've been talking about this with so many people recently sharing the good news and it's it's amazing. And we guarantee returns on this. I mean, I hope you could tell people who are listening this. I'm like so excited about what we're doing today because I'm a data driven guy. And I go back to our traditional SWOT process analysis is all opinion. Now we have metrics and data to compare to the market.

versus what an assessment should be for risk in your business. And now we can monetize what the worth of that is and decide what to do. It's been an absolute game changer to make strategic plans actually so much more worthwhile.

have you been trying this out on real startups, real small startups?

Yeah, we've been, yes, and the short answer is yes. We are using it with companies from startup all the way up to...

200 million, guess in size, I think is the size of companies that we've been evaluating this. And obviously, each company is at a different stage, you know, that we talk with this assessment with. But they all have the same reaction, which is, my gosh, now I know what's wrong for my company. And now I want to fix this. It's once again, it's so different than the traditional SWOT, which is just like you come with an idea, it's already your own opinion.

This is like based on data and in the market and companies in your industry where we're comparing it against. It's so such a game changer. And yes, it does apply for startups. applies for any organization, honestly. Obviously the key is here. And I'm saying this, I'm saying this, you can't fix all the risk, right? That's almost impossible.

But if you focus on the top three, you can get 25 % of your value back. If you focus on the top eight, you typically get 50 % of your value back.

That's a powerful value.

Now, amazing and I think I want to try it. So one of the biggest hurdles as you think about a startup, founder, idea, builds a prototype, gets a lighthouse customer, figures out minimum viable product. And the next big thing is product market fit.

And then right after that is, OK, I believe I have product market fit. And now I need a go to market. The next word is strategy. And that is a strategy that fits your definition of strategy. Does what you're talking about apply to that sort of specific

really important first step, you know, going from, yes, I think I have a product to, okay, I'm actually going to start selling it and I'm going to watch my company begin to grow.

Yeah, the reason why it's so valuable is because it gives guidance as to what you really should be doing. So let me explain that. One of the areas it talks about is concentration risk as an example, right? Meaning, you only have a few customers that represent too much percentage of your revenue. So if you come in with the right concept, you can go in from a market plan

to have some diversification with your client base. That's like one big thing. Another key thing that it has, which is...

Do you have a marketing process? Okay. So meaning is it not just a people driven person, you know, one person that's driving all your sales that you're at risk at they leave, but it's something that you can actually have multiple people do or people can make, cause it's consistent process. We get so caught up today in what I call tactics of sales.

There's so many different ways to go to market these days because of technology and social channels and depending on what market that you're serving. But sometimes we forget what the real core. The core isn't number of likes and number of subscribers, which those are fine goals. The goal is to ultimately get somebody to trust your product or service that they're going to buy.

What this risk matrix does gets to the core of what you're trying to accomplish rather than just focus on vanity metrics, right? Vanity metrics are not measured in this risk matrix. We don't care about how many users have, but we do care about is have you created a moat in your business, right? Do you have IP? That's like another one of the things that talks about Jathi is, Hey, do you have IP? Can somebody else copy your product? Do you have patents behind it? You know, do you have legal documentation? Right? Goes through 40 different

Mm

40 different key steps. when you have it done, and this is something that's important I wanna share. Some people will say, well, I'm just gonna have my investment banker work on that. It's too late. Let me just explain this. When you have a date with someone, that first date matters. That first impression matters. And they're gonna view you in the eyes of that first moment.

They're going to make a decision about who you are, what you're like, et cetera. The investment banker, despite their wisdom and their intelligence, are going to make a determination of who you are based on the original meeting and original questions that they ask. You can't fix it after that fact. They've already made a decision and everything they talk with potential suitors is going to be based on that frame of reference. So the key is to fix things before you hire the investment banker. Do the things now.

And so when they come in and that date, they know that dates legit. They know that you have your stuff put together. You have your story. You have your plan. You have your marketable processes. That once again, the value is, you know, this, this strategy thing comes into it. What you'll appreciate, you'll appreciate this. met, we put this with one, four time operator, like you're amazing that you've done nine, by the way. That's like so uncommon.

I recently was with a guy who was a four -time P .E. operator. We put the tool through him. And he said, Carl, this is so amazing because I always known intuitively what it takes to de -risk a business, but I never had a dollar amount to focus on. So now I could tell my management team by working on this, we're going to get Y return as opposed to just get it done. Right. We need to get it done before we sell. Now we can say by doing this, we're going to increase the value by Y more.

such a more powerful right discussion, especially when you have people on your team that have equity opportunity when you're getting to sell it because like, this matters isn't just a want to do this is like we need to do it.

Right. All right. want to talk a little bit about how to convey what you and me too have learned and how we've chosen to convey it to the world. Because right in your introduction, you call this book a fable.

or a set of fables. And I just happened to use the word anecdotes. And I said to, know, when I first pitched it to the publisher, this is 31 anecdotes. And we both said almost in the same words that a business book that says, okay, do A, B, and C. And, you know, they're very didactic.

and prescriptive. And first of all, those are hard to read. You fall asleep. And second of all, it's hard to turn that into something that you learn. People who read business books tend to be pretty intelligent people. And so they don't need the one, two, three. They need, here's a situation. Here's what you want to happen.

But here's what happened to me. And you and I ended up with, we didn't know each other, and we wrote the same kind of thing, and we believe that the business book world needs a different approach. Can you say some more about that?

That's right.

Yeah, I'd be happy to, and I'll share with you what I didn't share earlier. You know, when I first wrote my book, I was going to write it like the traditional book. It was called originally the seven cells of success. And I was going to say, Hey, here's the seven principles and you need to do it. That was going to be basically my book. And, boy, I was so excited. I saw it going right directed, but then I stopped and I was just like, would I want to read this? And secondly, just like you said, we have smart readers. have, we, you know,

People who are reading, you know, by the way, if you're not a big reader, become a reader or become an auto book listener. You know, it's, it's such an important part of what you can do to help grow. being, being a great, as Zig Ziglar said, you know, be a great leader. should be a, become a great reader. Right. And, but Zig Ziglar did. And yeah, it's just, just, I love the common they made there, but why, so I changed it to this fable and.

Wait, who said that?

One of the books that had the biggest impact in my life was a book called The Goal by Elijah Goldratt. And he shared this fable of the story. by the way, I read this when I was at the University of Washington, advanced cost accounting course. And this consultant adjunct professor, after I was all excited about advanced cost accounting, he gave me the book and he said, I need you to unlearn everything that I've taught you. Read this book. Okay.

It's weird.

And so, and really it changed who I was as a CFO. And to this day, I think differently because of that one book. But what that one book did is this fable, the story. I helped come up with the ideas and apply it to myself as a being just told what to do. It was so much more powerful because this is the key. This is the key here. Facts are interesting. Facts are our friends, but emotion drives change. Stories.

drive change. That's what gets us to move. And so that's why I did I changed the book into a story because I want them to feel the pain. I loved it when that CEO told me, Carl, how did you write this book about me? Because it creates change.

And the other thing is that all of human evolution from the very beginning, once we could communicate, was about stories. And before we could write, everything was handed down in terms of stories. so when you go to listen to somebody give a presentation, if they do it in terms of telling stories, you get it. You're there.

pay attention, if they put up a whole bunch of charts and graphs, sorry, if CFO, you know, but I have a feeling that you don't give presentations like the traditional CFO anymore. But it's, and.

I try not to. I try not to.

And, and, you know, I came up originally being an academic because I, I was a professor at Duke for five years and, and, and they're not that good at telling, stories. And then I had to, I had to kind of do a complete, you know, shift. And, and by the way, one of the things that's helped me is that if I'm doing a serious, you know, if I'm giving a presentation that I consider really important.

I don't use PowerPoint, I use Prezi because it's all about making it into a story and it helps make sure you don't put 50 lines of text for people to gag on. So everybody I know who's involved with startups, this is just a truism, has grit.

And I'd like to know where you think your grit has come from.

That's such a great question. it's, you know, it's, it's funny. And I, I don't know if this full legend or true by the way. And I literally, I'm half Greek and somebody had told me that our roots come from Spartan, know, Sparta, you know, and so there's actually Spartan in us. And so maybe, maybe it is. but I could tell you this, I, you know, we, have some really cool things in our family. You know, my, grew up with, you know, despite a lot of challenges.

You

We had the ability to get through some really interesting hardships. My mom was one of the first pile drivers in the state of Oregon in the early eighties. Like, so she was working on bridges. and that was very uncommon, you know, to have something like that. And, and so that was really interesting. I mean, to have the courage to go across the country when you didn't know anywhere, anyone with four kids, right? That, that's something, you know, that was, that was courageous. watching my sister battle.

Your story is, by the way, incredible, very inspirational. My sister battled cancer for five years, small cell carcinoma. It's courageous. If they can do it, it's like, can do it. I remember being a young kid, I told you football was such a big part of my life. got me out of trouble. I was getting into trouble at a really young age. Literally, I was drinking in seventh grade.

You know, we're getting into the liquor cabinet of like, our parents stuff, not good. These are not good habits at a young age. And so was doing that and, and fortunately football and the act literally next door neighbor ended up winning the state high school championship for the Stain school was with, ended up going on to win the university of Washington national championship and went to play in the professional football. And he was my neighbor. And so I had this person to follow. And I remember I like, and I'm, I'm, I'm a small guy. I'm only five, eight.

I'm pretty, especially back then it was really skinny and it's like, how am going to play football? And so I remember riding my bike. This was a long way back then two miles to go into his garage to lift weights. Like, like who does he stop by the way, he stopped working out with me and I would still go and work out in his garage when he wouldn't wake up in the morning. I can't explain that, you know, very much of why, but I do know this is when I get

When I believe I'm supposed to be somewhere, I'm to do whatever it takes to get there. And so that's like with my business today, but you're right. you don't have grit, if you don't have the willingness to go through challenges, you won't get to the destination that you have the ability to get to. you know, once again, and I wanted to say this out of absolute, you

Humility, mean, your story is, know, pales in comparison. got, you know, I could throw in a bunch of different things. Like one of the most remarkable things happened to me is when I started this company, my appendix burst and I was halfway between Portland and Seattle and I went to a hotel at two in the afternoon. You never, you never go into a hotel between Portland and Seattle. It's a three hour drive. And I went into it, checked in at 2pm.

And then finally 2 AM after being sick every hour, was like, I should probably go to the hospital, which is where I ended up finding out my appendix burst had an G tube down my throat for a You know, it was, was for me, it was a very traumatic event. And then, through that, said, I'm going to, that's literally how we've helped get connected. I through that, I said, well, I'm to do three things because life is short. I've got to write a book. I'm going to write a, a podcast and run a marathon. It's interesting how that hardship helped me to do some

three things that I never thought I was going to do. And I don't know how to, it's kind of weird to say why I did that and went through to it, but I know when you have a goal, it gives you purpose or as destination say, it gives you a purpose. And you have to be willing to go through all of the hard crap that you're going to do. One of my favorite books is The Hard Thing About Hard Things. That's over here. Ben Horowitz is the author and it's just this

awesome story of just all the crap we go through as owners and people in startups and the challenges and it sometimes feels like every turn you take is a wrong turn.

but it's so rewarding when you get through and win. You know, isn't it? I mean, if it was easy, it wouldn't be fun. Don't you think that? And that's my belief. If it was easy, it wouldn't be fun.

I

I do agree. And something you said just a minute ago too is I want to repeat. You keep referring to my story. And what you said was, or inferred, is that when human beings have a major

challenge in front of them. You're at the peak of a roof and you can go this way because you maybe feel sorry for yourself or you can't see a way through it or you can go this way. And I chose to go this way and it was, okay, I don't have any idea how I'm ever going to ski again, but I really, really have to. And so

I started to set a series of little tiny goals. And, and when I would achieve one, it was like amazing. And they were so little that other people would probably say, well, that's, that's not that big a deal, but it was. And by the end, you know, and it took three years, but by the end I'd gone from everybody saying, you know,

You're not going, you can't ski to, I'm sorry, but I'm going to fly by you on the mountain and I'll see you at the bottom. And that can translate, this is why I think almost everybody who I ask about grit has some story about difficulty, hardship, family situation, something that

they had to deal with. And it is really hard to anybody who's an adult who hasn't had that. I don't care if it's something physical or emotional or, but something. And the fact, and I think we're just wired this way that if you have to deal with that, you are going to build up, you know, that necessary scar tissue that's gonna help you be strong in

all of the situations in your life. And that includes if you're going to be doing a startup.

Yeah, yeah, it you have to, you know, do what it takes. But at the same time, you don't want to lose your soul in the process. Right. You know, it's it's, you know, that's that's I just want to add with it's it's like, you know, we've been we've been, you know, fortunate to have families and, you know, connections or relationships and it's tough stuff. I mean, it's tough stuff when you go through.

you know, these things and it's every day you come home, it's not a happy day, right? Because you have these challenges and sometimes we bring that home and vice versa, right? A hard day at home, you know, bring it to work. But once again, you got to look up and go, hey, there's a bigger purpose. And I loved when you talk about those little things, those little wins. It is, it's amazing. Those little wins along the way is what can give us the fuel, right? To being willing to tackle and the confidence to go to the next thing because

It's amazing of how many times, you know, it's, we'll go to baseball analogy, right? You know, and our love, you know, the baseball, right? A 300 hitter is, an all star. That's three out of 10 times that they're hitting the ball and getting in play. Right. And that's not very good, right? But in baseball, it's extraordinary. And that's the, that's more the close to the reality in business, right? You don't win every single time, but you never hit the ball if you don't swing.

Hey, one last question. Speaking of sports and you playing football at 5 '8", what position did you play?

I was cornerback and wide receiver.

So you're fast.

You know, it's funny, I had decent speed. But what I in football, I did, I love to hit. I enjoyed that. I enjoyed hitting. And what I found was there was sometimes there was often people had necessarily better foot speed. But I wanted to go through people. And and when you have that mentality in football, you don't you don't hesitate.

And that's, that's, that's what's different about that game. Actually, I would say it's true for so many sports is you have to be willing to go and, and, and not think, but you not thinking because you've gone through it technically and had a habit. You've done it 50 times in practice, right? You know, when something happens, you're going to react in that way. And, and yeah, that's so that's, that's what I played. it's been, it was really cool. Cause both of my boys, both

defense of backs in college football. And now I have my youngest and she's even shorter. She's five two and she's now playing soccer at TCU. And it's been really fortunate. My oldest actually was a volleyball player. anyways, we're very fortunate that we've had it, had the grit. once again, maybe it's that Spartan blood. I don't know if it is or isn't, but I'm very grateful that we've had opportunities to play and compete.

There's something about sport that I'm such a believer in having our kids play it. And it's not necessarily to win, but it's the process of becoming a winner. And we can apply that process to anything.

Well, that's a great note to end on. This has been a real pleasure to have you on, Carl. I am so glad that we met and that I got a chance to be on your podcast and now you've returned the favor. And we'll keep writing books and you're out here once in a while and I'm out there.

This will be a long friendship.

No, absolutely. I really so grateful we've got connected. As said, you're a special person. What you've done in your personal life and in business is extraordinary. Once again, everyone is listening. I hope you realize what an amazing human being you're listening to who's hosting this podcast. And so I'm so grateful that we do have a relationship and I do look forward to connecting with you again when I'm in Boston. And likewise, you definitely reach out if you're in the Portland area.

You bet.