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EPISODE 07

Become an Efficiency Expert with Jeremiah Bryant, COO of Thrice Energy Solutions

April 2020  | 49:48

How much do you know about the building you are insulating?

Join Travis Pankake, Aaron Franzen and Ryan Stewart as they discuss the inside and out of the inside of homes with Jeremiah Bryant, COO of Thrice Energy Solutions. Jeremiah comes from 4 generations of drywall experts and he uses that expertise to consult with clients of all kinds on the best solutions to keep their homes energy efficient and safe. If you’ve ever wondered about HERS ratings and raters and how you can educate clients properly on energy efficiency, this is the episode for you. PLUS! Jeremiah explains why he buys through distribution, how it keeps his costs fixed and helps him serve his clients better.

Thrice Energy Solutions is Oklahoma’s premier insulation and builder services contractor. Providing superior solutions for spray foam, fiberglass, and cellulose insulation as well as seamless rain gutters, fireplaces, house wrap, HERS Ratings, blower door testing, and more.

Transcript Details:

2:20 – Jeremiah’s expertise goes back to being a 4th generation drywall guy

6:15 – It is alarming how little companies who are doing insulation know about the building envelope

11:04 – The value of buying through distribution

13:50 – Re-educating the market about how all of the trades work together to build a better house

21:57 – Are you an insulator or an energy advisor?

25:01 – Is being a HERS rater a conflict of interest?

30:07 – Every home warrants an evaluation of what product is best

38:49 – Should I focus on new construction or existing homes?

Season 1, Episode 7 Transcript

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RVAL003.mp3 was automatically transcribed by Sonix with the latest audio-to-text algorithms. This transcript may contain errors. Sonix is the best audio automated transcription service in 2020. Our automated transcription algorithms works with many of the popular audio file formats.

He’s an angry elf.

You had to go there.

Absolutely. Absolutely.

911. I’d like to report shots fired.

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Travis Pankake:
I’m Travis Pankake sales and trading here at IDI alongside my co-host, Aaron Franzine. Guys, what’s happening coming up today on the podcast. We actually have one of our customers, Jeremiah Bryant of Thrice Energy Solutions, all the way up here from Oklahoma City, as well as an IDI legend, Brian Stewart.

Ryan Stewart:
Hello. Howdy. Howdy, partners.

Travis Pankake:
Jeremiah, why don’t you tell us a little bit about your background and why you got to where you’re at today?

Jeremiah Bryant:
I started in drywall actually as a fourth generation drywall contractor. Insulation was that wasn’t in Oklahoma City. This was. That’s correct. So I was I’m a transplant to Oklahoma from Indiana, a little town called Morgantown, Indiana. So drywall was kind of our background. But I you know, I grew up in construction. I was familiar with the insulation trade, moved Oklahoma in 2007, had a few just various jobs in construction in the oilfield, worked back in Indiana. Again, I spent two years there. I kind of took part ownership of the family business in drywall, worked there, kind of growing that business and getting a more hands on with the business side of things. Now, I was right about David when the economy kind of took it took a dump. Right. So, yeah. So, you know, in 2007 through 2009 was was pretty rough. So we we kind of went through that pretty tough period. And I kind of learned a little bit about lean business practices just through some hands on, you know, having to deal with it. Real life experiences. Right. So I moved back to Oklahoma. My wife and I bought a house there and I actually got a job working as a production position, foreign insulation contractor and kind of learn that side of the business. And that was, you know, my intro to spray foam. I I’d never seen it before. And just, you know, we thought it was the coolest thing we’d ever seen. So we started our business in 2016 after some things just didn’t pan out at the company I was working for. And, you know, we kind of started the way everybody does, really didn’t have any business getting into it and just kind of jumped in with both feet.

Travis Pankake:
You had a plan. You had it all laid out. You know exactly what you were doing, I bet, right?

Jeremiah Bryant:
Yeah, we were. We were just absolutely excellent from day one for sure.

Aaron Franzine:
You get your business entities set up and just take home bags of money. Yeah.

Jeremiah Bryant:
Just start shoveling cash in. That’s right.

Aaron Franzine:
When you were in that drywall back in the day, did you actually were you a labor to you? Did you tape and hang? And did you ever get get dirty right in the mud? Yeah, all in the mud.

Jeremiah Bryant:
So we grew up I grew up in a pretty, pretty conservative Christian background. And so we never tell that by meeting you we were home. Wow. We were home schooled. And so we spent I think by the time I was 12 or 13, we were we got up at six or seven o’clock in the morning. We went to work. We did our school work when we got home. So, yeah, I hung sheet rock taped, textured, say that you name it. We did it standing’s probably the best. Oh yeah. That’s that’s definitely a reason to look elsewhere for employment since you’re in town.

Travis Pankake:
I got stuff at the house. You know your expertise. Yeah. Just saying we could possibly knock this out in a day or two. Yeah, for sure. I can get you some numbers, Ryan.

Aaron Franzine:
Through his phone, through the drywall might to patch that up. Well, don’t tell anybody else. Keep it. He’s an angry elf. Had to go there already. Absolutely. Absolutely. Nine one one. I’d like to report shots fired.

Travis Pankake:
So, anyways, Jeremiah, getting back to your story, interrupted time. Not me.

Jeremiah Bryant:
So, you know, two thousand sixteen. Oklahoma’s economy was pretty flat for the most part. And we didn’t really know a lot getting into it. But I spent a lot of time kind of learning the building science. Matter of fact, that the next week after we started our business, I went and joined a class for the Herr’s program for the home energy rating system and took that class and then took BPI and then took Energy Star and was just really trying to get a good grasp of the science behind insulation and how to actually approach things not just simply from an insulation contractor side, but, you know, from actual solutions, as you know, a building assembly as a whole. And really kind of that’s where I really started falling in love with that. You know, prior to that, you know, insulation. It could’ve been anything. You know, as we just we started a business. I had a business. I had two business partners. And that was just I was already working in it. So there was no big reason for us picking insulation. But after getting into the home energy rating program and getting my Herr’s license, getting into BPI and, you know, I just really fell in love with the building science stuff and a lot of the energy conservation stuff, you know, just really it’s it’s a big puzzle when you start digging into a building assembly and trying to, you know, each each situation is significantly different. And so that’s really where I think our business really started to take off in a lot of different directions. Where we opened. We do we have a home energy rating division now. We blower door test a lot of houses. And but that was really where I started to get a passion for it and really felt like a. Running at that point and where I feel like we really set ourselves apart in our market was the building science when you started doing that.

Travis Pankake:
Did you see that already as a value added to your business? Or was this just kind of a way for you to learn it to, you know, help grow your own? You know what I mean?

Jeremiah Bryant:
I mean, it’s so scary to say, but honestly, I just. I did it cause I didn’t know anything. It felt.

Aaron Franzine:
You started an insulation business and you went to classes to learn about insulation.

Jeremiah Bryant:
Yeah. No, I mean, that is a really scary statement. But, you know, to say I didn’t know anything, you know, had worked in the industry. I’d worked for other contractor. But it is it is alarming how little most of the companies doing insulation actually understand about the building on the slope.

Ryan Stewart:
Well, and that gives you the opportunity to prove your work, right? Right.

Jeremiah Bryant:
So we’re you know, we’re in it. I’ve already worked in it. I’d been around other contractors. I was having you know, I was apprehensive to just jump, you know, take off and start growing this business. I wanted to know everything I could. You know, I’m a pretty conservative person. I didn’t want to just, you know, saying you want to jump in here young at the time, too, and just started a family. So. Right. It was I was sensitive, too. I was 26 years old and I needed it to work. We had just had our therapy and my wife and I had just had our third kid. We’d just bought a house. You know, I needed to make sure this wasn’t all going to blow up in my face. And and and now, having been in the industry for a while, I’m looking around and realizing that for the most part, it’s business as usual for guys to not have is as much of an understanding about the industry as they should. All right. Most guys go out there, they buy an insulation truck and they just start put it in the walls, you know? And so that’s where we really I wasn’t willing to accept running a running a business and having that little of knowledge about it.

Aaron Franzine:
When I was a contractor, I thought I can outwork anybody. All my competitors. I’ll just outwork them. You know, I was young and you can’t just outwork everybody. You need to understand the business. You need to be good at sales. You need to be good at making connections. You need to be good at handling situations. You know, that’s I feel like that’s a lot of the industry right now is you. There’s a lot of good workers. We were talking earlier, a lot of good sprayers, lot of people who know how to install it, but maybe lack in that building science portion of it, you know, lack in the business management portion of it. And those things are as important as anything.

Jeremiah Bryant:
Well, I think we’re getting asked harder questions every year. The consumer as a whole is. Oh, yeah. The Internet. Right. You know, there’s this there’s access. And I you know, I make this joke all the time, but access to information in America is, you know, it’s unrivaled. But the problem is, is it’s access to good information and bad information. Wrong information, access to all information. We get asked a lot of tough questions. One of the things that I did just to try to help arm our sales force was I had them take the Herr’s class because it’s like, guys, you know, the consumer is going to ask a lot of difficult questions. Spray foam has got a lot of good publicity and a little bit of bad publicity at times, you know, and so occasionally a customer is going to say, hey, we’ve heard of an issue with a house that was spray foamed and and they’ll lay out a scenario. And and, you know, we have to be ready to understand their concerns and understand the situation that they’re talking about and what led to those things. Because, you know, unfortunately, there’s a lot of states and Oklahoma is one of them that that there’s not building regulation is is is a little bit behind the curve. And we’re trying to we’re trying to you know, we want to keep regulation is that, you know, as effective as possible for, you know, we want builders to make money. We want consumers to be able to afford a home. So we’re trying to be proactive about educating all the trades. You know, HVAD contractors, they do things that affect the home. And everybody, you know, everybody involved in building the house, framers, plumbers.

Travis Pankake:
We talked about that a little earlier before we were on air. Just being a better partner. Right. A partnership.

Jeremiah Bryant:
And that was our goal, as we know. We’re trying to we’re trying to do a better job of being that partner, you know, being able to evaluate a builders project, each individual home and say, you know, this this is exactly what needs to happen and just kind of be a turnkey solution for them so that they can rest easy knowing that we have the expertise to make that project work effectively for their end-user.

Travis Pankake:
Right. Right. So you’re almost four years in business now. You grew pretty, pretty rapidly.

Travis Pankake:
Right. And a lot of that probably stemmed from your understanding that knowledge was power. Right. You needed to understand the basics to get into just the building trades, which you kind of came up with, you know, growing up in the drywall business. Now, growing into the size that you are, you certainly have an opportunity to buy direct. Correct. Where do you see the value in distribution? Because you you’ve made some statements just in the short time I’ve known you, just about some of the things that you like about, you know, distribution and idei and how, how and why that works for you. Can you go a little deeper on that?

Jeremiah Bryant:
Yeah, absolutely. And for us, we did. I mean, you’re correct. We grew extremely fast. We were, I think, 2016. We did a couple hundred thousand dollars in sales. 2017, we did a couple of million. And then you fast forward to today. I mean, we have over 56 employees and we’re as far as I know, we’re the largest insulation contractor in Oklahoma as far as Oklahoma. Stand alone. And you know that that happened, you know, June will be four years. So we’re not even at the four year mark. But one of the things that I really tried to put a big focus on was making sure, you know, scaling up was hard enough. You know, we put we put some things in place for, you know, how OK, operationally, this is how this is going to work. And then that worked great at two hundred thousand dollars in annual sales and at two million, it blew up in our face, you know. And so. So I really early on had a strong focus on, OK, if I’m going to implement something, it needs to be scalable. But anytime that I approach any situation like that, I wanted to make sure that could also scale back down because, you know, fixed costs are fixed costs. And so we’ve been operating out of out of a six thousand square foot warehouse since inception. We got a we bought this old building and had a burnt roof. We put a new roof on it. You know, it was a it was a cheap, easy warehouse to pick up. We put our meat. I mean, me and my business partners ourselves went out there on the first week and then we put a roof on this thing, you know, and it’s it’s cheap. And so we were actually purchasing direct when we started. And as labor or as material became harder to come by and there’d be a pinch on production. You know, one manufacturer had a large fire at their facility and that put a pretty big pinch on it. We really started running into extended lead times where we were ordering, you know, really maximum capacity because we were sometimes 10, 14 day lead time and it really started to put a pinch on our cash flow. And even then, I don’t know that I really understood, you know, the gravity of the situation. It was just, you know, we were in a pinch and we were doing what we had to do. But, you know, you fast forward about a year from that and, you know, allocation continued to be a pretty big burden. And that’s when we met Ryan and started buying our son material through IDI. And and it just kind of snowballed from there as we started to realized that there was an infinite amount of value to us in that usually we could get next day order because the distributor was five miles down the road. And and I’ve, you know, since then were, you know, a million dollars a month in sales. And I still use that same six thousand square foot warehouse. And it’s a fixed cost. If the economy does start to turn down, if our if our production takes, you know, it takes a little bit of a hit due to slower building or, you know, the slower inventory movement in the market, then I’m not stuck with this extra facility that I’ve purchased or signed a lease on anymore. And so that was that was one of the big strong focuses that we had, is let’s make sure we can scale down. And it made more sense to lean on a distributor and and use their facility than it did to continue to spend our cash and our capital and our time trying to build a facility that would help us hold inventory well in excess of what we had.

Travis Pankake:
So basically, I mean, using distribution is healthy to just keep your costs fixed. You understand what you know, what’s coming in, what’s coming out at an easier rate because you’re essentially using right and warehouse through distribution.

Jeremiah Bryant:
And not just that. I mean, it’s it’s it’s helped with cash flow. Yes, absolutely. You know, our days and inventory is much lower than it was whenever we were buying from manufacturer or buying straight direct from the manufacturer.

Aaron Franzine:
If you can’t store it at our warehouse, Ryan, I’ll just put it in his garage for you.

Right. Absolutely. I already do. I think it’s why you’re a legend.

Travis Pankake:
I want to circle back to a conversation we had earlier, again off line. But you just kind of talked about how to help kind of re-educate the market specifically as it pertains to talking to builders and how other trades come into play and how one of the things in insulator can do is they actually have one of the biggest impacts on that house. Can you kind of go a little bit deeper into that?

Jeremiah Bryant:
Yeah. And, you know, just kind of to reiterate what I was talking about, you know, right now there’s a lot of national studies being put out that are talking about, you know, the cost of building. And, you know, I think the study said 75 percent of people buying a home and two in 2020 needed to spend two hundred and fifty thousand dollars or less. And obviously, we’ve been through a lot of different things, tariffs, you know, things of that nature that that have driven some cost of the materials. And, you know, we’ve had a labor pinch. Labor’s labor is costing more than it was, you know, five even thought three years ago. Freight. Freight. Right. That’s a huge one. You know, so. So these these costs obviously these these costs are carried to us, you know, our customer, the builder, as well as us as trade, you know. And so we’re all trying to navigate that. But, you know, you know, ultimately, you know, my conversation, the conversation that I try to have regionally and nationally with anybody that’ll listen is that, you know, ultimately that cost to the consumer is a crucial part of how we can continue to to keep homes affordable. And if you look at a lot of states in the country that are following 2006 or 2009, which is a still prominently used building code, especially on the energy side of things, we’re doing things that that ultimately are affecting the cost of the home very little. But saving the end-user 30 to 40 percent on their energy costs, you know. And so if you know how much more affordable what your first house than you had, you been able to pay two hundred dollars a month less than utility costs. You know, it’s it’s weatherstone, you guys. My wife and I, the first house we bought, we moved in and we didn’t we didn’t know, you know, we just we bought a house. It seemed like a good deal. It was priced well for the for the location. And that summer we got an electric bills. Three hundred and eighty dollars. And I told my wife, well we we can’t afford to live here, we can’t afford an extra three utilities were killing you. And so we, we did some energy efficient upgrades. And, you know, we’ve done quite a bit at this point and that we live in that same house and it’s 100 bucks a month now. Well, you knew a good you knew a good insulator. I knew a decent I knew a decent person to call.

Aaron Franzine:
So. So somewhere I heard that insulation cost is two to four percent of a new home. Is that right? Is that what you’ve heard? I can’t cite it. I can’t remember where I heard it. I’ve heard two percent, two percent, two presents, a number. That’s it. Two percent very near and gave you two to three hundred dollars a month on your first new home or whatever.

Jeremiah Bryant:
I mean, obviously, we’re comparing a worst case scenario here. My house was built in 92 by a track builder. I mean, it had the worst windows. It had the lowest. It’s a cookie cutter home. Yeah, I had the lowest efficient furnace and air conditioner you could get. So, you know, as a worst case scenario. But but even then, I mean, when we look at so we’re doing some some pretty pretty easy insulation upgrades as well as other things that are that are putting houses, scoring 30 to 40 percent better on the Herr’s index. And, you know, I won’t spend a bunch of time explaining the Herr’s index, but, you know, it’s I think most guys in the insulation industry or at least familiar with it. But, you know, in in hers, the lower the score, the better. And we’ve got some production builders that they might spend an extra 30 percent of, you know, on their insulation costs and and cut the score, you know, by 40 points. And that that drastically affects that cost for that end user.

Jeremiah Bryant:
So that’s and that’s what we’re trying to promote, is that, you know, while we can’t really control the cost of building at this point, you know, that the costs are going to have to to rise a little bit because, you know, we obviously do need to make some profit. We already have about construction. It’s a lower margin, you know, industry for sure. So we can’t just continue to eat these costs. But as insulation contractors, we can directly impact the cost to the consumer and keep housing affordable. Well, you know, while the cost of the house may have to rise slightly, you know, that that cost to the consumer can be manageable. Almost offsets. Right. In some regards.

Travis Pankake:
So, you know, with that example you just gave. Is that something that as you’re being a partner of your industry, are the builders open to? These ideas are you know, obviously, we’re we’re thinking about the end user in mind.

Travis Pankake:
But, you know, as you partner with some of your builders, are they in tune with that same kind of line of thought?

Jeremiah Bryant:
I think it’s I think it’s hit and miss, but I do think that. I do think for the most part, a lot of builders are kind of on the defense right now, you know, they’ve seen their profits slashed quite a bit with with a lot of these things that hit, you know, the lumber industry saw significant price increases. And I think they’ve been able to claw some of that back down. But so many different building products, concrete has risen and not just the labor alone. You know, just in labor alone, you know, we’ve we’ve seen these increases. And so I think it’s put builders a lot on the defense where this conversation is. It’s a difficult one to have because it’s difficult for them to get the price up. And that’s kind of what I talk to you guys about earlier than there’s. I think that there’s something fundamentally broken with the way that we value homes today. A lot of the things that we’re valuing are things like granite and and hardware and all these things that people can see stainless steel.

Jeremiah Bryant:
And so it’s hard for a builder to be ready to have that conversation about, hey, I want you to spend twice as much insulating this house on spray foam, because as far as the MLS, as far as the realtors are concerned, as far as inspectors are concerned, those aren’t the things that we’re comparing. Whenever we’re whenever we’re putting up comps for homes, they don’t even look at insulation.

Jeremiah Bryant:
You know, they’ll say if it’s a little bit low, hey, you need to add some. But ultimately, that doesn’t weigh in on the cost of the value right at home. And so whenever we’re doing comps, you know, we need a system in place to more accurately reflect the value of that home. And I think a huge part of the value of the home is what is it going to cost me to own energy bill? Right. Like, that’s that’s the cop. That’s the sticker on the new car. Right? The gas mileage. Right. And I know that, you know, I know that, you know, cars, we’ve got the gas guzzler tax, you know, and, you know, I don’t want to just be outlandish with suggestions. And I know California and a lot of ways, you know, people teams tend to shiver in this industry when you talk about California. But, you know, California has a great program in place where, you know, every home that’s sold, whether it be new or existing home, has to have a blower door test. And for me, as a consumer, that’s a number I want to know, you know, and obviously we cannot as hers raiders, as BPI analysts and, you know, all the guys studying these these houses and doing this testing, we can’t go in there and accurately tell you to the scent what your utility costs are. But it is it is impressive how how close we can get a lot of times to telling a customer this is, you know, marginally what you can expect to pay in gas and electric costs.

Aaron Franzine:
And whenever you ask gas mileage, usually the car sales rep is, well, how do you drive? You’ve got a lead foot, right? It’s like asking that with a house. You know, Travis takes like four to five showers a day, at least a bath at lunch. You know, that’s going to be all right.

Jeremiah Bryant:
And so you can’t predict the flavor. I cannot predict human behavior, but we can get really close, you know, basing it off of average human use. And so for us, you know, that’s something that we’ve tried to we’ve tried to speak with a lot of local realtors and try to get the consumer to understand that if you’re buying a house, you’re already paying for the inspection, you’re paying for a termite inspection. Why not hire, you know, a Herr’s rater, hire somebody to come out and do an energy evaluation, do an energy audit on the home?

Jeremiah Bryant:
You’re you’re going to pay two hundred and fifty thousand dollars for this house. You might want to know how much it’s really going to cost you. It could be a negotiation tactic. It could be something that you could say, hey, I want to buy this house, but the seller is going to need to fix this.

Ryan Stewart:
And this, you know, earlier when you said that that was kind of an aha moment for me, because you do pay for an inspection home inspector to come out and check it out. And I had I’ve never even thought of for an energy inspection of sorts to come out and let’s see how bad the House leaks are.

Jeremiah Bryant:
The wind is just terrible and it’s no different than any other inspection. You can request the seller to pay you and you can pay for it yourself. I can tell you right now for me, if I was buying existing home, I’d be happy to pay for it myself, just for the peace of mind, because it’s a huge unknown.

Travis Pankake:
Well, knowing you’re going to save money monthly, you know, in energy costs aren’t going down. So that’s an exponential gain, right? If you make your house more energy efficient using less. You’re going to save money more and more. Year after year. It’s one thing that can increase as far as a savings when you own a home. Have you had good luck with the real realtors and approaching them?

Jeremiah Bryant:
You know, I did it kind of just thinking. We know a lot of realtors. You know, we’ve worked with several who have called, you know, they’ve got a customer buying a home. And the home inspector said, hey, you know, need to have about six inches of insulation in the attic. So we’ve kind of have a working relationship with some of Marseille’s guys. I’ve talked with some of them quite regularly. And so we have had some luck. We’ve actually had quite a few customers just this year that have had us do an energy audit on a home that they were going to buy because and they paid for it way out of their own pocket, as far as I know.

Aaron Franzine:
So that’s the difference between owning a blow rig and blowing attics and and spray foam. Reagan going out and working hard and doing a good job, to being an expert, to being a steward of the industry, someone who’s knowledgeable, that’s providing solutions to their customers. I mean, that’s the line in the sand that I see that you’re a steward of. You’re a student of the industry in building science and all these different approaches versus I have a blow machine and a foam rag and I insulate houses.

Ryan Stewart:
Well, let’s let’s think about it. How many many times do we. How many people out there look going to an attic? Go look. You only got five and 1/2, six inches of insulation up there. We need to bring it up to an hour 38. Right. We still haven’t got to the root of the problem. Right. We just. It’s a Band-Aid. Yeah. We just put a Band-Aid on there. Brought it up to code. But we haven’t fixed anything yet.

Travis Pankake:
Right now, I know there’s somebody listening right now that says you do the insulation, you do the energy advising and the blower door and the nursery isn’t. Isn’t that a conflict of interest, Jeremiah?

Jeremiah Bryant:
That’s a question that we get asked pretty regularly. And as a matter of fact, no. And I think for maybe for some people that don’t really understand the process that we have to go through. I can see where they would where they would think that. But for the most part, the way the Herr’s program is written, where were data collectors? So we answer to what’s called a QAD quality or a quality assurance provider’s. What they are, they’re called. You know, we refer to them as our provider. So we go out to each site, whether it be an existing home, whether it be a new construction home. We take photos, videos. We record everything from the make and model of the dishwasher to the toy. We take a picture of the inside of the toilet tank to tell you. We tell the provider how many gallons per flush that toilets rated that we count LCD light bulbs. You know, for the most part of Rayder is simply documenting what is in the field. And when we test, you know, we have to provide photos of the blower door setup and everything. And so when we when we send all this off, we can’t provide that document that her certificate. We have to send all this off to a quality assurance provider. And they they record that information and then they give us what we refer to as print permissions for us to send that report in. So there’s a lot of checks and balances within resonates system that allows for us to to be safe in in both insulating a home as well as, you know, providing that data. Ultimately, it’s it’s a software and it’s a third party that’s providing this information.

Ryan Stewart:
On the retro side. You could you could actually test the house first. Right. Blow it or make it find where the leaks are at and then theoretically do it after you’ve made the repairs, improve your work that you’ve proved and fixed what was wrong.

Jeremiah Bryant:
Well, and so that’s actually that’s actually the resonant standard for that. So, you know, we go out and we provide, you know, an upfront evaluation of the home we test and we’d say, you know, it obviously, you know, this house is leaky. This house needs this will make recommendations resonate. That requires us to make those recommendations based off of a cost benefit. So a lot of times, even though we’re an insulation contractor, you know, this is a great tool for us. A lot of times insulation, it’s not what they need. They might need a new furnace. They might need their ducts all sealed. You know, they might need a service that we have to refer them to an H vac contractor or a window contractor or somebody like that. So, you know, it’s a cost benefit analysis is the way we have to provide that information. And, yes, sometimes, you know, we say, hey, we can get some air sealing, we can do in some insulation. And then when we’re done, we retest and then we can quantify to the customer. This is you know, this is the difference between what you had and what you have now.

Aaron Franzine:
This is it’s a solutions provider, right? Right. Just an insulator. Not just doing fiberglass, not just in love with spray foam.

There are solutions provider.

Jeremiah Bryant:
Yeah. And that’s you know, that’s a that’s a tough one. You know, spray foam is kind of a hot commodity in insulation right now. You know, it’s a popular product. It is not one that we recommend for every job. And for that reason, we really try. Our goal has always been to provide the solution that is best for the consumer from a cost benefit analysis, whether it’s something we’re actually providing a her service on or not.

Aaron Franzine:
Right. The most value that you can get out of your dollar.

Jeremiah Bryant:
Exactly. Exactly. You know, I have a lot of people that, hey, we’re building a house and we want to use spray foam. And what do you think about that? And my first question is, how long are you going to live there? Because foam doesn’t have a two year or a Y or a three year or a liar for your or a. You know, if you’re 30 and you’re building a house, that’s awesome. Congratulations. But on average, in the U.S., people, people below the age of 60 buy a new home every three to five years. So if we’re talking about extended our ally for a product like spray foam, that does cost twice as much as fiberglass. It’s not always, you know, if we’re strictly. Talking about yourself, the only solution.

Travis Pankake:
So, Jeremiah, I know there’s lots of guys listening that are thinking to themselves, so I’ll just put it out there. Isn’t being a Herr’s rater kind of a conflict of interest?

Jeremiah Bryant:
We get asked that question quite a bit, actually. And so kind of the way the the resonant standards are sort of resonate being the governing body overseeing hers, raiders. For us, there’s a there’s quite a bit of checks and balances in place. So Herr’s raider is essentially a data collector. And we answer to what are referred to as providers. So there’s a third party entity that we provide the data in the field. Everything, pictures, videos, things as simple as the make and model of a dishwasher. All these different things. We collect data both with photographs, video evidence, as well as recording several forms we have to fill out and provide to them. A Rayder cannot provide a her certificate document to a customer. We have to send this off to a third party. And and then at that point, the provider will evaluate, ensure the accuracy of the data and then provide print permissions to a raider so that they can actually supply those documents.

Travis Pankake:
So essentially, you’re not. There’s no conflict of interest because it’s it’s third party check that’s audited.

Jeremiah Bryant:
Correct. And that’s that’s where people kind of get confused. People are like, well, it’s not really third party, is it? And so, yeah, we’re we’re simply getting the information for them. We’re on site. Our people are there. We’re getting the information. But the entity that actually provides those reports is third party.

Travis Pankake:
And I know you had a few things that you wanted to talk about. Why don’t you go ahead and bring those up now?

Aaron Franzine:
Yeah, well, I wanted to dive more into product mix and being being versatile and not just offering one product and with continuous insulation being not a hot button, but a more popular item and not just offering one thing and offering air sealing and some of those things. I just wanted to dive into that a little bit more and what your approach to that is.

Jeremiah Bryant:
Right. So I think and I think there’s a pretty you know, spray foam has been such a big movement. It’s been growing in popularity. A lot of guys are getting into the industry. They want to get into spray foam. It’s you know, it’s the hot new item. But, you know, I think there’s a lot of misconceptions about foam always being the right answer. And so a lot of the reasons that we add thrice energy solutions are try to focus so much on that product mix. And really understanding the science behind things is that there’s a lot of different ways to achieve energy efficiency. You know, we’ve we’ve seen plenty of net zero and positive energy homes that we’re insulated with fiberglass. Now, I know that there’s a lot of guys that they have their favorites. They’d rather do fiberglass. I’d rather do cellulose. They’d rather do foam. But I think what a lot of guys in the industry need to step back and understand is that every situation warrants an evaluation of the wall assemblies or the roof assembly of the H fact equipment, every component of the home. You know, it’s all working in tandem to provide a comfortable living space for the occupants. And, you know, the statement has been for so long to set the skies to yesterday. You know, the spray foam is the insulation of the future. And I believe strongly it’s the insulation of right now. I think that in the future we’re going to continue to see product innovation and the way that we insulate homes change and I think continuous insulation extra. And so, you know, the the data’s there when we do thermal imaging of of houses with exterior insulation and you see, you know, complete and, you know, thermal bridging is completely done away with at that point.

Travis Pankake:
So I think a combination of all the products to, you know, where they’re used, how they’re used when I use depending on your climate zone. All that makes a difference as well. It’s not one one product here is all right.

Jeremiah Bryant:
And that that’s absolutely you know it. And that’s why I say every every home, every building, it it it warrants an evaluation of what products can be used together. You know, we you go back to the to the resonant standards. If we go to an energy audit on an existing home, we know the first thing we do is we test the house. And then the way that we’re required by the organization to provide that information is from a cost benefit standpoint. And that’s what we’re trying to establish on a new construction home, is what is what is your what is your expectation with this home? Obviously, we want it to be as energy efficient as possible, but everybody shows up with a project, with a budget in mind, and that has to be taken into account. So we know what products can we use, what mix of products can we use?

Jeremiah Bryant:
Could it be a combination of fiberglass spray foam, continuous insulation, air sealing products, duct sealing products? You know, what can we do to get this house as energy efficient as possible and still keep a budget in mind?

Aaron Franzine:
Do you see more of this industry moving towards offsite, penalized type of work? I think assemblies and such. I think that’s penalization movement has it’s it’s definitely got a place in the market.

Jeremiah Bryant:
However, I think that whenever you really start getting into custom, people want to you know, they want a customized home. You know, they don’t want a one off menu. You’d want the same floor plan as every other house and they’re penalized, construction gets really expensive when you start customizing it. And so I think not to say that it will always have its place in the market. I mean, you know, those are it’s a solid it’s solid science. You know, it’s a it is a great way to build a house. But I think it’s pretty cost prohibitive. And that’s gonna be really one of its biggest limitations.

Travis Pankake:
Yeah. Is you say it’s limited just because of the, you know, whatever is prefab.

Jeremiah Bryant:
We’re already seeing so much data out, you know, from an NAHB about, you know, the the housing crisis, you know, housing affordability crisis. And so I think that while there’s some things out there that are great products, they’re great ways to do it. You know, we’re already having a budget crisis when it comes to what people can afford and we have to keep housing affordable. So that’s our big you know, that’s one of the big reasons why we’ve had such a huge focus on the building. Science on energy efficiency is that we are trying to keep that budget in mind.

Aaron Franzine:
Right. And the reason I bring that up is because this works always going to be it’s going to have some onsite element to it. Right. So even if things didn’t move towards paralyzed, there’s always going to be a place for spray foam because you still got to glue everything together you can. It’s versatile of what you can do onsite with a house and changes happen. Absolutely. Homeowners change this. Move this ball. Take this out. So, you know, those products are always going to be around. But I think it’s about finding the right place for the right product.

Jeremiah Bryant:
Yeah. And I think that that would be my, you know, encouragement to all insulation contractors as we we have to be focused on where the industry is going. But even then, you know, we’re not just insulating houses anymore. You know, the insulation trade has moved so far past simply insulating at this point. There’s so many like you said, we’re doing air sealing. We’re doing pressure barriers. We’re doing damage, we’re doing on foam. You know, we’re building demises walls, you know, and there’s a structural aspect to that. You know, there’s a lot of stuff that falls under the insulation contractor. And so I’ve always been a big proponent of, you know, people need to understand why they’re doing something. This is not this is not assembly line work that we’re doing.

Travis Pankake:
Which kind of falls back into place of, you know, your beginnings, you know, whether it happened on accident. But you’re diving into the building science, you know, being Herr’s rater, going through BPI training and all that. That background is, you know, as we talked a little bit earlier, not a lot of guys are jumping into that with that mindset. Right. With the why this is happening and then being an insulator, not only are you able to perform the work, but you’re able to adjust onsite, as Aaron was saying, with spray foam or whatever product choosing to solve the problem as well. Yeah, because you understand what’s happening or what could happen if you don’t insulated a certain way.

Jeremiah Bryant:
Right. Yeah, I don’t I mean, I never want to use scare tactics as a way to get something done, but I do think that a lot of guys need to be pretty conscious of the fact that I think I think that the liability for our trade is going to you’re going to see a pretty big increase in that.

Jeremiah Bryant:
You know, there’s Ken Allison actually was talking about, you know, that the most searched term in regards to how you can alisson the Ken Allison, you know, is that is my home making me sick. That’s been Googled more than is my home energy efficient. Is my home making me sick? You know, so a lot of these things we’re talking about, we’re making the house more energy efficient. There’s two sides to that. You know, we have to deal with indoor air quality. We have to deal with humidity in the home. We have to deal with moisture in the wall assembly. You know, there’s so many different things that we’re affecting whenever we start mixing these products together. And to not understand the effects of those things in the science behind it, there’s going to be an increase in liability to our trade. If guys aren’t careful, they’re going to wind up, you know, a house with mold or with issues where because they didn’t understand the science behind what they were doing, they just said, well, we’re gonna start throwing every energy efficient product in our arsenal at this thing and we’re gonna make it as tight as possible. And they don’t understand what other components of the home they’re affecting with that. It it’s gonna be at risk that I think it’s best to be proactive and for our trade to get out there, to get the knowledge, to get the understanding about it and and mitigate a lot of that risk.

Aaron Franzine:
Jeremiah, when you got into business, did you see yourself more in the retro retro fit space or new construction? What was your approach when you guys jumped into this?

Jeremiah Bryant:
I mean, I think we were focused more on new construction. Now, that being said, I think in the past two years we’ve made it. We’ve made a really big push on trying to understand more about existing homes in that market and being able to help those people. You know, a big part of where our Herr’s department is today is a lot of energy audits on existing homes that people call land. And, you know, unfortunately, because the consumer is limited on what they understand about how a house works 90 percent of the time we get a phone call and that’s all they say is, hey, I need more insulation. And my question is, is what we know. Where did you get kombai that information if you have a high electric bill? You know, most people immediate thought is, oh, I need more insulation and there could be a million different reasons why they actually. We have a high electric bill and it may have very little to do with insulation. You know, we go out there and put, you know, six, eight inches of more insulation in your attic. And, yeah, I’m an insulation contractor, so I just sold some insulation. But if I’m not providing a solution, how long can I hope to stay relevant in my industry? So for us, you know, it’s. Do your. Do you need new weatherstripping on your doors or your windows needing air sealed around? Is your air conditioner 25 years old and extremely inefficient? Is your use your ductwork is leaking into the attic. You know, I like to always go from it with let us do an energy audit first. Let’s let us evaluate your house. I’d love to sell you insulation. That’s what I make money doing. But at the end of the day, once again, if I’m not providing a solution, I don’t know how long I can hope to stay relevant in in our market. Yeah, you’ve got to get to the actual root of the problem. Right. Right. Right. And I think for the most part, everybody thinks that insulation is always the solution. And yeah, a lot of times it is. But a lot of times it’s not true.

Aaron Franzine:
If somebody is in a home and they have cold rooms and they talk about energy bills being too, who do they call like who do they search for? What would the first phone call be for someone who’s looking for help?

Jeremiah Bryant:
Most of the time, it’s somebody searching for an insulation contractor. I mean, that’s. And most of the time, unfortunately, what we see is that they get sold insulation.

Aaron Franzine:
Should that should that be I mean, if you’re talking to homeowners that have cold rooms and high energy bills. Who would you have them call?

Jeremiah Bryant:
I think that they should. I think that they should absolutely call thrice energy solution. I think they should call thrice energy solutions in Oklahoma City for sure, no matter what they’ve got.

Ryan Stewart:
They’ve got to start somewhere. Right. But the key is calling the right person that says, hey, let’s evaluate what the real problem is. Right. Because, again, back to what you were saying. Most people go out. It’s cold. I need more insulation. Only get six inches, whatever it may be. But we’re not fixing the problem with the right person. Wingo. OK, look, maybe the facies ducks leaking, right? We can we can as a as a writer and test in the house, we can actually figure out what that root of the problem is and you can direct them to exactly who they need to go to, what steps need to be done.

Jeremiah Bryant:
Well, it just it helps with you know, we don’t want to continue to create a negative stigma about, you know, insulation contract. You know, we’re not crooks. We’re not. I think for the most part, I don’t think that it’s predatory by any means. When they call an insulation contractor that maybe doesn’t understand, they’re like, well, we’ll put some translation in your attic. That’s going to help. And I really think that there’s several people that get into this trade without the understanding of it. And they they do. They are doing what they know to do. I just think we have to challenge our, you know, our contractors and our suppliers and everybody in the industry to know more than what we know.

Travis Pankake:
Well, it’s part of it’s about being a professional, trained educate. You know, that’s, you know, one of the biggest things we push when we, you know, either have customers that are just getting into the business or want to improve their current business as we train. And we we have classes, we you know, we further educate not only ourselves, but our customers. And, you know, getting back to again, I don’t mean to keep pushing on it, but there’s there’s a way that you were different from the beginning. You educated yourself. Right.

Jeremiah Bryant:
And I think that, you know, for us, you know, we want to get away from the term insulator. You know, somebody somebody said once, we’ve got to start focusing on being what I think that the industry has pushed us to be, which is, you know, building envelope specialist, you know, problem solvers. Right. You know, we need to understand everything from liquid water, drive to the assembly vapor, drive through the assembly, air through the assembly, thermo bypass to the assembly. You know, the bridging or convective heat, conductive heat. You know, there’s so many radio, you know, radiant heat. There’s so many different things that we have to understand to really be able to assess this. And so we really, you know, and I did that, you know, I and I did it mostly because I was scared of what I didn’t know. And I wanted to make sure I did. But it’s it’s something that I think, you know, we’ve got to we’ve got to regulate ourselves. You know, we’ve got to understand that because it’s going to be so much more beneficial to the industry and to enter the guys doing this whenever we can, you know, consistently provide a educated answer whenever a customer has a problem.

Aaron Franzine:
I think most homeowners would probably Google search, you know, lower energy bills and anything any number of people are going to come up from an HVAC guy to an insulator and they’re going to make a phone call and say, you think I have an HVAC problem? Yeah, absolutely. Yeah. Let me come out and evaluate. And it might totally be the wrong direction or same with an insulation contractor.

Jeremiah Bryant:
We see it with window contractors a lot. You know, people like a contractor be like, oh, I need new windows. You know, my electric bills are too high and, you know, and nine, you know. Ninety nine percent of door and window contractors out there are all about selling somebody some new windows.

Jeremiah Bryant:
That’s what they’re in business to do, you know, but. On average, in most houses, windows make up about nine to 10 percent of the entire exterior wall assembly. Nothing on the roof assembly. So even if we make your windows, even if we get you windows that are 80 percent more efficient than the windows that you have now, we’ve only addressed 10 percent of the wall assembly.

Jeremiah Bryant:
And so that’s we know that’s where I think. And that’s not to say that windows aren’t the problem, because sometimes they are. But we get a lot of customers that they just want new windows and they you know, so they’ve decided the windows are the problem. And, you know, we’ve had to have that conversation. Look, if you want new windows by new windows, but I’m not advising you that this is going to drastically affect your energy efficiency. What’s our value of three maybe? Right. Right. So even the best windows out there and like I said, it’s for the most part, unless you get in these really modern homes, for the most part, there’s not that much glass surf sitting the day. Usually air sealing around the windows is actually the big problem. We can air seal around any existing window. You know, barring that, the glass is missing from the window where we can air seal around any old, you know, window.

Aaron Franzine:
So would you have them reach out to a Herr’s rater if someone has problems with their house? Is that would that be the first step? So they don’t get the runaround and go through the HPC contractor, spend thousands of dollars. The problem doesn’t get addressed. OK, well, I guess I’ll move on to the next step. That’s an insulator. Go through that rigamarole. And the issue is never really addressed. I mean, they can make phone calls, phone call. And I’m just curious if that’s who you would have them reach out to or is that what they would the first step?

Jeremiah Bryant:
I think it would be I think it’s always the most advisable step because the Hirsche Ritter doesn’t have a dog in the fight, so to speak. They’re not making any money off of any of these trades. They’re simply providing the service of Yatta, doing the audit and saying, you know, this is what you need. So and there’s hurt writers in almost every market, so.

Aaron Franzine:
Right. And then that gives the homeowner choices. Right. They want to address windows, HHC, insulation, whatever it might be.

Ryan Stewart:
It’s like a third party evaluation is all it is, right? Yeah. Well, Jeremi, I think we’ve we’ve pulled enough information out of your brain for one or two days, just kind of went into a little bit longer podcast. But I think a lot of the information that we’ve talked about today is not only good for the listeners, but just, you know, people that want to maybe have a different approach with their business, you know, and just with what you’ve shared about kind of how you’ve gone about your business and how fast you’ve grown in a short period of time and pretty successful. Right.

Jeremiah Bryant:
And that would be, you know, for other insulation contractors. That would be my biggest takeaway is that I think a lot of guys worry about if I’m going to make this investment, if I’m going to spend my time learning all this, you know, how effective is this really going to make me in the industry? You know, we started our business in 2016 and we did a couple hundred thousand dollars in sales and we do over a million dollars a month in sales. Now, it’s it is the way to grow your business. You know, nobody appreciates working with a contractor more than someone who provides real answers. And that’s that’s what we’ve achieved doing exactly this. So I think it’s the only way to move forward for guys in the industry.

Travis Pankake:
Right. And you use the term yesterday, Off-Air proof of concept. Right. So it’s doing pretty well for you. Yep. Ryan, appreciate you bringing your boy, Jeremiah. Thank you. And being on the podcast. What do you think? I thought it was fun time. Lots information. Yeah, he were super nervous, I could tell before we started this, but he settled in nicely. Good job.

Yeah. Yeah, it’s a little crazy.

Travis Pankake:
So for those of you listening on a desktop or a computer, you can find our podcast at IDI-insulation.com Backslash. Our value. Or if you are on a mobile device, you can stream this on Apple podcasts, Google podcasts, the iHeart radio app, Stitcher and Spotify. Thanks for listening.

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EPISODE 06

Understanding the market impact of COVID 19

April 2020  | 34:45

Most Americans are waiting to go outside again, but what economic realities will be there to meet them when they do?

Join Travis Pankake, Don Clymer and Steve Kosel as they discuss the short term and long term effects of the economic pause caused by the COVID-19 shutdowns with acclaimed economist Brian Beaulieu of ITR Economics. When should we expect economic recovery and how long will growth last? What are the unintended consequences of the shutdown and are the measures taken by the U.S. government working?

Brian has served as CEO and Chief Economist of ITR Economics™ since 1987, where he researches the use of business cycle analysis and economic forecasting as tools for improving profitability. Prior to joining ITR Economics, Brian served as an economist for the US Department of Labor, where he worked on the health-care component of the Consumer Price Index. Brian has co-authored, with Alan Beaulieu, the books “Prosperity in the Age of Decline,” “Make Your Move,” and, for children, “But I Want It!”

Transcript Details:

2:45 – When you’re dealing with the unprecedented you have to think differently

7:23 – The unintended consequences of the economic pause and stimulus solutions

11:44 – When will the economy climb out of the hole caused by COVID-19?

15:00 – “We’ve seen this before.” Consumer behavior post-COVID

20:20 – Back to School could mean Back to Economic Normality

26:41 – Long range impacts of national debt accumulation

Season 1, Episode 6 Transcript

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Brian Beaulieu:
Do you have any hair left Brian and you scratching it all out over this? Yeah I had lots of hair because you know grass doesn’t grow in a busy street. My streets not so busy so I got lots of hair.

Don Clymer:
This is the one and only the original podcast where you can find yours in your business’s true value. You’re listening to R value.

Travis Pankake:
Brought to you by America’s Insulation Source IDI distributors.

You want to hear from the best contractors, suppliers and consultants that dedicate themselves to more than just survival in the business world.

Travis Pankake:
Industry professionals that are dedicated to excellence in every aspect of their business.

Don Clymer:
R Value has them all here to share that same motivation and knowledge with you. Tune in and grow more successful, profitable, educated and recognized business. Listen to the R Value podcast. Become the industry leader in your market. Find your value with R Value.

Travis Pankake:
Hello. Welcome back. This is Travis Pankake alongside my co-host. Well, actually on the video screen, Don Clymer.

Don Clymer:
Getting used to see your face this way, Travis.

Travis Pankake:
Yes. It’s kind of a distant. It’s the new norm, even though I hate that term. But we have a special guest co-host today, Steve Kosel.

Steve Kosel:
I’m happy to be here. Looking forward to it.

Travis Pankake:
Well Donny, What do we what are we doing today? Who are we talking to?

Don Clymer:
Well, today, Travis, we have Beaulieu from ITR Economics. Brian has served as a CEO and chief economist of ITR economics since 1987, where he researches the use of business cycle analysis and economic forecasting as tools for improving profitability as a speaker and consultants and a few times at the IDI National sales meeting. That’s where we met him. Brian has provided valuable and practical advice to companies in need of domestic and global perspectives to increase profits through business cycle, trend analysis, forecasting and effective planning. He’s a co-author of Prosperity in the Age of Decline. Make Your Move. And also ITR’s first book for children. “But I want it.” I need to get that for my kids. Brian has shared his expertise through various media outlets, including USA Today, The Atlanta Journal Constitution, The Wall Street Journal, The Washington Post, first on Fox and numerous other outlets. And now we have him on the R Value podcast. Today with Brian, we are going to touch on the latest information on the virus, the stock market, retail sales and what the leading indicators are telling us about the near and medium term. We’ll take a look, a brief look at the monetary and fiscal policies and the impact there are likely to have on people and businesses in the months and potentially years to come. So is Travis always says sit back, relax and enjoy the show because the timing couldn’t be more perfect to have Brian on. Welcome, Brian.

Brian Beaulieu:
Thank you very much for having me. That was a very nice intro. Very much appreciate it. No problem. It’s a strange time for somebody like me or even ITR in general, because we deal with business cycles, trend analysis, and that’s two black swans and all the unintended consequences. Those two black swans during a lot of that out the window. So we’ve been scrambling and working to redefine what’s going on and come at this with an all new perspective, because we’re dealing with the unprecedented you kind of think differently. We’re running the band in a lot different ways. And the extreme doom and gloom that characterized March and was really understandable. But no place is giving way to some good news. And it’s I think it’s extremely important that people start to think about planning through this and understand that there is another side of this and the economy is going to shift back into a rising trend. I don’t get into discussions about what is this new normal, because I know normal is always a relativistic concept anyways. Depends on the individual. But I can tell you, we’re going back to an old normal and that once the shackles are free, we are going to be growing again in our economy and probably more so in our economy than we’re going to see in some other economies because of who we are, our culture and everything else that’s going on.

Brian Beaulieu:
So there’s lots of good topics out there right now. So I think that we’re for a well-timed here.

Travis Pankake:
With all that said, Brian. You know, there was a there was a conversation and trans talks about this is a while back, I believe was in February, about a twenty, twenty two recession. What does that do to that forecast?

Brian Beaulieu:
Everything that we’re going through today and have been going through has taken a lot of the stress off the economy. Come twenty two,twenty three and let me give you an example of what we mean by that. We’ve been watching for quite some time now how the S&P 500 is grossly elevated compared to profitability, corporate profitability in particular domestic companies and relative to the economy’s growth, relative to retail sales. I mean, it was just a very expensive market. And we were thinking that the S&P would come down in association with that 22 23 downtrend, that all the liquidity that’s out there would keep the market afloat through Twenty two deep into twenty one before the correction would be had. The fact that the market came down so much since middle of February has taken a lot of that pressure off that particular imbalance. And that’s an example of how some of the pressure has been relieved. You’re totally getting into the stock market, though. I mean, if this is the extent of the pain in the stock market and it’s going to have a relatively normal rebound out of this, then we may still be looking at in a situation where at least the stock market is imbalanced relative to economic growth in another bear market could be out there in our future. But for now, assuming that the imbalances are going to be played out here in 2020, we’ve moderated our outlook for the downturn in twenty two twenty three. You may recall gone how we had the very modest one quarter decline here in twenty in our outlook and and multi quarters decline out there in twenty two into twenty three. Although those have switched positions first quarter, second quarter decline in GDP here in 2020. It is taking the place of the twenty two twenty three downturn on steroids and we only have one quarter of decline in GDP out there in twenty two.

Brian Beaulieu:
So.

Brian Beaulieu:
So it’s just something that’s been switched. We brought forward.

Don Clymer:
So how is that good or bad? I mean, that might be a dumb question, but hitting the fast forward button, does that affect anything else down long term down the road?

Brian Beaulieu:
Not even in a fast forward button per say, but all the repercussions, the unintended consequences of everything that we’re going through are clearly going to have an impact down the road. And in particular, I’m thinking about the Cares Act, H.R. 6201, and the federal stimulus, the Federal Reserve’s stimulus programs. Those are large. I mean, we’ve never seen a stimulus package this size and GDP, this percentage of GDP before. This is huge. And it is creating a mountain of debt where we’re already creating another mountain of debt. So this is just adding on to that. So you have to wonder, OK. We ever gonna get around to cleaning, sopping up some of this excess spending or we just couldn’t leave it out there and let the, you know, the interest expense grow out this time and worry about paying it off at some future date. And in terms of the Federal Reserve’s stimulus program, they’re going to sterilize this because we’re talking about trillions and trillions of dollars that they’re creating here. Are they going to sterilize it or are they going to run the risk of inflation in a post twenty three environment? Those are significant questions. And if they sterilize it, then you expect certain course of action in the economy. If they don’t sterilize it, then we’re going to be seeing a lot more inflation in the second half of this decade until it finally becomes more of a burden than we can bear. So this is the we didn’t gain anything by hitting that fast forward button. We created some other issues for down the road. This is a dang interesting time to be an economist I tell you what.

Don Clymer:
I feel for you.

Steve Kosel:
Hey, Brian, this is Steve Cosell. I just had a follow up to that. You had you had mentioned inflation. That was going to be one of my questions, because with all the liquidity coming into the market, you know, one of the effects of that is inflation. And it’s it’s hard to tell that right now. I get that. So you kind of answered that question, but you had done a presentation for Chris Novogratz’s vistage group. And Chris is one of the owners of IDI. And in there you had talked about there had been seven other pertinent events, you know, like like the one we’re in right now where the stock market has come out very, very strong out of that. And you said the first and second quarter would have, you know, would have a downturn. But do you see the third and fourth quarter than do you see that same market trend coming, coming with the stock market coming out of this situation?

Brian Beaulieu:
Yes. And now let me parsel that yes into different aspects of your question. First of all, I want to clarify something you said very strong. No, not very strong. The typical stock market rising trend is a 60 percent gain from trough to be OK. Looking at the seven precedents that you mentioned, we’re getting a range of upside activity between fifty six and eighty five if you allow me to round. So it’s a typical rebound to maybe stronger than typical, but it’s not a very strong rebound. I just want to level set people’s expectations that are listening to this. It’s just typical. OK.

And you know, if you’re down 25 percent negative, 50 percent rebound, all you’re doing is getting back to where you started from. Right. So even at an 85 percent gain, you’re not a whole lot ahead of where you were before all this started. And eighty five is probably the upside expectation on this thing. The other aspect of a stock market before we leave that behind for the moment is those seven precedents suggest that the length of rise when it does happen is going to be between eleven and twenty six months. And this is not going to be another one the six year rising trends as far as we can tell. So you expect the relatively short duration before we’re into some sort of difficulty again. What’s really interesting to me is that risks apathy that was so rampant in 2018 and 19 has seemingly totally dried up. And I’m wondering how fast that risk apathy is going to come back or if it is going to come back, maybe it’s going to be held in abeyance for at least 12, 18 months until people start feeling really good about things again. And then that risk apathy comes back to haunt us. That’s, I’m not even sure how you measure risk apathy except how much money people are investing into triple-A rated bonds or other junk bonds, really? And as they pursue some sort of reasonable yield above and beyond what conventional investments are getting them. So that’s one of the things we’re going to be measuring very carefully over the course of 21 and 22 to try and get a handle on what sort of.

Risk we’re looking at on the downside. The 22 23 business cycle, they’re getting back into your timing question. Yeah, I mentioned first quarter and second quarter GDP decline and it’s it’s a rock in decline, obviously. But yes, we are seeing the economy in our in our model length begins to climb out of this hole in the third quarter of 2020. It climbs out even more in the fourth quarter 2020. And by the end of 21 or early 22. GDP is back up to where we were before we went into the precipice. So it takes us 18 months. It would take a quarter to just recoup everything that we will have lost in two very bad quarters. But I mean, that’s that’s not bad. That’s a whole lot better than a lot of people think we’re going to be. We can do. But we we said based on how we have performed in the past. That is doable. And it is a heck of a lot better than they’re likely to see in Europe coming out of this region. We have a no growth scenario in place for Europe or actually to a complete recovery scenario for Europe, which goes back to what I’ve been saying for over a year now. If you’re going to make some equity investments, stocks, etc., stay US focused. This is the place to be. And that’s certainly been more true now than it was when I was saying a year ago.

Don Clymer:
Both you and Steve mentioned several situations in the past that were similar to this. This is kind of an unprecedented event that we’ve never seen anything like this, you know, being quarantined and businesses shutting down, stay at home orders. What were some of those issues in the past that were similar to this that you guys reference? And, you know, a lot of our listeners, you know, look at the NAHB and the housing starts and how how did those situations affect the housing starts and how do you see housing starts being affected going forward? You know, the rest of this year and 2021, if you want to talk to that at all.

Brian Beaulieu:
The circumstances being forced into quarantine, businesses being closed, that’s unprecedented. And that’s one of those ramifications of the pandemic that we have never seen before. No one has ever seen that before. So that’s the part that’s new. What isn’t new is seeing the stock market crater, although it’s the sheer velocity of the decline in the first week, 10 days, was breathtaking and that was steeper than anything. But the overall decline that we’ve seen, the slope of the decline in particular is what I went back and looked for in the post-World War II history and found seven prior instances. And when you were in each of the seven instances, by the way, when you achieve this slope of decline that we saw going through March in the S&P 500, it told you that you were pretty much near capitulation, pretty much near the bottom of the market. So that’s part of what we’re talking about in terms of we’ve seen this before in terms of not the circumstances but the ramifications of the circumstances. That goes into your second part about how people are going to behave when their client, you know, when they’re allowed to get out of their homes and get released. Oh, my gosh. First, a lot of people like Donny are going to have a party because they get to go to work and be with other adults. So that’ll be hallelujah time. This is where I don’t agree with some of the pundits who think there’s a new norm and that people are going to shoo going in to our brick and mortar stores and that we’ve probably gone over into e commerce. I don’t think that’s true. They’re going to be buying your cars up a car lot. I know this car buying, but I’m saying the bulk of activity is still going to require some sort of human interaction that we’re not capable or enabling right now with these governmental interventions. I expect that unemployment, which we all know has soared upward, is going to be sticky on the way downward. So that’s going to obviously retard the rebound in retail sales also. So we’re not saying that the lights get flipped on as we’re allowed out of our house, but we’re setting the circumstances where we can start to move back toward normal. That’s why we have an 18 month claim out from this hole. It is going to take a fair amount of time to get out of this hole. But let’s not, And I haven’t forgotten your question about housing, but let’s not forget the sheer magnitude of what the Congress and President Trump and the Federal reserve have done. And we can go back to talking about that in a little bit. In terms of housing in particular going into this mess, housing was in a very good position. Housing permit’s, single family homes in particular were up for the country as a whole. Housing starts were up. We’re getting all sorts of positive signals for that market as a leading indicator and made all the sense in the world. So along comes COVID-19. You’re told you have to stay in your house. The best we can do is virtual house tours. That isn’t going to cut it. So we’ve got a big disruption to this trend. But. That’s the thing that’s the key word. It’s a disruption to the trend that was prevailing before all this happened. See one of the things that we’ve noticed, and I know the circumstances change, but circumstances are always changing when you have a an established fundamental trend like a rise going on in housing starts and someone comes along to mess that trend up. Right. She makes it stumble. You’re going to go down and we see that with the new mortgage applications for actually buying a home as opposed to refinancing and being down 33 percent year after year. This is going to take a tumble. We know that. But it ends up looking a lot like a B. Not a perfect B. But if you make a B with your hands, the left side is the way down the right side and that angle a little bit. So there was sort of looks like a either happy L or a lazy B. That’s what’s going to happen on the other side of this. The same thing is true of housing. Sure. Home prices and that debt is now. But that’s probably going to hold up reasonably well then through this period. But we’re going to get back into the rise. It is inevitable that we’re going to get back into the rise. Some markets are going to do much better than others. I would be willing to bet you that heavily concentrated urban areas are not going to fare as well as some of the more rural areas or homes around lakes or on a mountaintop or something is people avoid close contact with us for fear of another pandemic.

Don Clymer:
So, Brian, I have a house on the market in Colorado Springs. Probably not a great time huh?

Brian Beaulieu:
Well, it depends on how much of a hurry you are to sell it, I guess. Right.

Don Clymer:
Right. You mentioned Trump in Congress and the Federal Reserve. You want to go back and hit on that a little bit.

Brian Beaulieu:
You know, the two trillion dollars was a nice jumpstart really before we get into some of those details, I always enjoy the broader view because you don’t want to miss the big scene here, the big deal besides the size of the two trillion dollars in H.R. 6201 is how fast they got that done. In 2008, 2009. It took a lot longer to get any sort of action going in terms of fiscal stimulus. This time it was like, um, well, you know, it’s not enough that we can do here. And then they had the Federal Reserve, which really didn’t get its act together until 2009 last time and now has come out with program after program after program. What we did is we went into back into 2009, and understanding the circumstances were different, but we’re trying to measure the magnitude of the potential for the stimulus. We said, OK, once fiscal stimulus and monetary stimulus were aligned in 2009, how long was it before the economy started getting back on its feet in a discernible way? And the answer to that is it took two to three months before things started to happen, you started seeing more and more green shoots come out of the economy, so to speak. So you take March, add two to three months and you get into the third quarter when we’re likely to start getting more activity. In a causal way, I think that going back to school shopping, I think the kids ready to go back to school in September will provide a lot of the impetus for getting the economy moving in a discernibly positive way again. One of the things that the Congress got right and the president signed the bill obviously, is the disbursement of those checks. The way they set that up, though, and they aimed it correctly. You know, I know a lot of my friends weren’t too happy because they’re not getting checks, but they didn’t need the checks. They really aimed at where you’re going to get the highest marginal propensity to consume for each dollar that you send out. And that was exceptionally well done. Now that the payroll protection plan for small businesses and now for large businesses is a gift on steroids for anybody trying to run a business and who wants to hold on to their people. You know, the HP, HR rather, HB 6201. There was a bad piece of legislation in so many ways because it scared the daylights out of people. It said, you know, all right, you’re not going to hold onto your people, we’re going to give you a tax credit, probably off next year’s taxes. And businesses look at that and they say, I don’t have the cash flow to wait till next year. That’s just stupid. And I’m not a lawyer. I’m not there to figure out all the ramifications of this. I’m laying everybody up. You know, the huge surge we’ve seen in layoffs lay it on that. You know, we were scared out of our wits, but then they came out and said, look, we’re going to cover the payrolls, don’t do that. We’re going to cover the payrolls to where at least for two months we’re going to cover the payrolls and we’ll see what’s going on. I think they should’ve lead with that rather than scaring everybody into furloughing or laying folks off. Although if you shut down your department store, what do you do? You’re not going to carry those people anyway. You shut down the department store. It’s not like and I don’t mean to be unkind, but your typical retail worker isn’t that indispensable in terms of difficulty finding another one to take his or her place as opposed to an engineer or an accountant or an economist or even a really good mechanic. Those high skill positions, you’re going to hold on to your right. And therefore, this is nicely aimed at keeping that part of the work force of labor population right where they are.

Don Clymer:
So Brian with the PPP, there’s a portion in there and I’m not in your shoes and this is just stuff that I’m reading and hearing, There’s a portion in there about loan forgiveness and that being diverted to a non taxable grant later on. Is that going to have a negative effect on us down the road at all? I mean, is there a way to tell that?

Brian Beaulieu:
Well, yeah, I think it will have a negative effect on us down the road. But let me give you my bias. OK. Every analyst has a bias. Right. You need to know mine. My bias is that anytime the government interferes in the marketplace, it’s going to create unintended consequences, some of which will be positive. But more often than not, they’re negative because they don’t they’re thinking about the short term, not the long term. So let’s talk about the unintended consequences that makes me concerned. One, they’re creating a moral hazard. What they’re saying is, look, look, the economy, anytime there’s trouble now, we’re going to bail you out. We got your back. So now we’re going to be willing to trade up trade off more and more economic liberty for a government safety blanket. And that’s a bad deal when you’re trying to grow this economy in a capitalist way. You just you just open the doors towards some activity that is decidedly not free market capitalist oriented, and the other negative consequence of the consequence that concerns me is who’s going to pay for all this money? This is a lot of money. Who’s going to pay for it?

Travis Pankake:
That was my thought.

Don Clymer:
I always wondered.

Brian Beaulieu:
Why they’re hoping you don’t ask that question too often. They don’t want to talk about that.

Steve Kosel:
Well the debt impact, the debt impacts are just, that’s a concern of mine, is how this debt just keeps growing and how we work our way out of that. It’s it’s pretty amazing when you think about it.

Brian Beaulieu:
Yeah. And, you know, I don’t know if you’re familiar with our long range forecasts about how in the 2030s that’s one of the megatrends that comes together to give the economy a real bad go of it for about six years. And people have been asking us, do we think that it’s going to happen sooner because we’re taking on so much more debt now because of all of this activity. And our answer to that after a lot of consideration is no. Taking on more debt at an accelerated pace doesn’t hasten the demise created by that debt because it’s not the size of the debt that is the issue. What is the fundamental issue and what brings about the most pain is when the world’s, quote unquote, loses confidence in the government’s ability or desire to pay off that debt. That’s when you find yourself in the soup in a big way. And the same thing is true with China, right? So maybe it happens first in China and then it spills over into the US, or maybe it starts in the US and it spills over to China. But you don’t know what the world’s number two and number one economy here and we’re number one. It gets really bad really fast and interest rates go up or really bad really fast. Then you find yourself in a world of hurt. But as long as and here’s the canary in the mine, as long as the T-bill is priced essentially a risk free investment asset and you don’t have to worry about that. So what we’re doing is we’re developing some new algorithms to monitor that because we have heightened concern about it happening sooner, but it isn’t yet. I want to establish a model that will start flashing red light when we get too far down that road.

Steve Kosel:
Hey, Brian. Just one question from me. This is Steve again. If you could, we have a lot of our customers that listened to our podcasts, right, and a lot of them are struggling and this PPP lone is definitely something that’s going to benefit them. But if you could give them two or three points that they should be focusing on right now during this this time and then coming out of this time, what would those two or three points be for our customer base?

Brian Beaulieu:
Every business had better have a very good cash flow model. Right now we better have a clearer understanding of the cash that’s coming in and the cash that’s going out. And you need to figure out if you can with overthought, with PPP and without PPP, can you get through August? I think that’s a safe horizon. Can you get through August? If you can not. What are you going to do about it then? At least you’re dealing with the hard reality at that point rather than just wishing and hoping. Right. So it’s all about the cash. What can you be doing to generate some income? That’s different than when you were doing before. My business is doing that. We used to make a lot of money in being out on the roads, speaking all the time, but we’re not out on the roads speaking right now. So you have to adapt. You have to adapt to the circumstances and find a way to reach your market in new and innovative ways. So that’s the second thing I would do is how can I reach my market in new innovative ways? The third thing that I would be doing. Forgive me if I was in a business that’s face to face like a real estate business or real estate business or retail business or investment business where I had to meet people, I would be figuring out how I can craft my message to ensure them that they’re going to be safe. What have I done to create a safe, healthy environment for them? And, you know, I’m just an economist, folks, and I don’t know exactly what that would be, but I know that they’re going to want some sort of emotional blanket to come into your office again, at least at first. So I would find some way to get my emotional blankie.

Don Clymer:
Yeah, I think that’s a good place to wrap it up. I know you’re busy following other news out there, Brian, and trying to get this all figured out for everybody. We appreciate that. We definitely appreciate you being on the show. I’m actually kind of glad that we had to reschedule a few times because I said selfishly, it worked out really well for us for the timing. So thank you very much for taking the time.

Brian Beaulieu:
Before we go, may I interrupted, because I don’t know that we touched on one of the best pieces of information there is, though, as far as I’m concerned.

Don Clymer:
Let’s do it.

Brian Beaulieu:
Every day we follow COVID-19 deaths for the world and by country. Right. Yeah. I never in my wildest nightmares thought I’d be trending deaths but here we are. And daily deaths totals are coming down for Italy, the US, the world, Spain. In other words, it looks like we’re over the hump. And that’s incredibly important in terms of releasing us from our homes in the foreseeable future. If these trends were still climbing, we’d be having a different conversation. But about a week ago, maybe four days ago here in the US, it looks like we were we went through the apex and were into the period now that’s called the bait met in my language. Anyways, the trends are abaiting. The pressure is abaiting based on COVID-19. So the other big worry is oil and these very depressed oil prices and what that could do. But first things first, fewer people dying and we’ll talk about the oil. Maybe next time.

Don Clymer:
For the listeners, as you can find Brian at ITReconomics.com. We’ll have the links down in the subscription or the description. And thanks again, Brian. It was very informative. I’m really thankful that you decided or agreed to come on the show.

Steve Kosel:
Really appreciate your time.

Brian Beaulieu:
Gentlemen, It’s always a pleasure. And I look forward to the next time.

Travis Pankake:
Thank you.

Don Clymer:
You know, the the thing that that just sticks out in my mind from that whole podcast is, you know, I’m sure there’s a level of variance to it. But Brian’s saying that our customers better have a clear understanding of cash in and cash out and be prepared to get through August. Again, you know, could be give or take, but you know, that that’s been the question is when when do we get out of this?

Travis Pankake:
Well, and the message of being innovative, you know, change your business. Don’t go back to how you’re doing it before. What are you going to do to to get to your customers now?

Don Clymer:
Yeah. Look for ways to adapt, reach your market in new and innovative ways. He’s a smart guy.

Steve Kosel:
Well, I think one of the things we have to consider too, is cash as a turnaround period. Right. So when he says August, you can start to have that recovery in the late June, July timeframe, but you’re not going to collect on that cash until 30 days later at that fast rate.

Don Clymer:
Good point.

Steve Kosel:
Forty five to 60 days so the actually recovery should start late June into July and then you’ll start collecting cash. You’ve got to have a vehicle to bridge between when it starts to recover and when you actually are collecting it.

Don Clymer:
You’re going to see it. You’re just not going to feel it right away. That’s why we had you on Steve, the CFO.

Steve Kosel:
No problem.

Don Clymer:
All right. Oh, that’s a wrap. Thanks, guys.

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EPISODE 05

Graco: Vision, Customer Service

April 2020  | 29:44

Every customer, every time. That’s the customer service philosophy of Pat McHale, CEO at Graco. Pat has instituted customer service policies that radically rethink the relationship between business and customer. He’ll explain why these policies work and why 4.5 stars out of 5 just doesn’t cut it anymore.

Pat McHale is the local kid that worked his way up to become the CEO of one of America’s best manufacturing workplaces, according to Forbes magazine. He started working as a machinist when he was a teenager, a job which he used to put himself through college. He earned his accounting degree from the University of Minnesota, although he never became an accountant. Instead, he went to work for the local manufacturer within a mile from his house as a second shift machining supervisor role. Now he’s built a reputation that Graco that extends far beyond his industry and into the minds of customers across the United States.

Transcript Details:

00:38 – Are you taking advantage of the Graco rewards program?
2:29 – Building a tolerance to cold weather
6:04 – Every great leader has a daily routine
7:00 – The customer is not going to be satisfied, if things are mostly good.
9:32 – How to develop an open door policy…in a company of 4000 people.
13:16 – “If you have a good team, you really shouldn’t be afraid of having your contact information out there”
18:37 – Customer service as every customer, every time
21:06 – The customer is not always right
24:34 – “When you take a look at people that are really doing well, growing their business and making money…generally those people aren’t out there looking for the lowest price, the cheapest deal, the lowest bid.”

 

Season 1, Episode 5 Transcript

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Aaron:
Welcome to our value. I’m Aaron Franzine. Each episode we try to identify shortfalls and challenges of an insulation contractor. Then we track down experts to offer their advice and experiences to help you overcome these challenges. Whether you’re looking for business advice or need help to identify the latest trends and products in the industry. Our value is here to help. Welcome to our Value. The Insulators podcast.

Aaron:
You have an amazing guest today.

Aaron:
But before we get to that, I’d like to tell you about the Grainco Rewards Program. Simply sign up for the program at my Graycar Rewards dot com and enter IDBI as your distributor of choice and do your idea. Customer I.D. and start earning points right away. Your points allow you to purchase everything from gift cards and trips to sporting goods and even Grainco product. Sign up today at my Grainco Rewards dot com. Today’s guest has a very unique history. He started working as a machinist when he was a teenager, a job at which he used to put himself through college. He earned his accounting degree from the University of Minnesota, although he never became an accountant. Instead, he went to work for the local manufacturer. Within a mile from his house as a second shift machining supervisor role. This was the beginning of his career at Grainco, in which he currently serves as the president and CEO. The local kid that worked his way up to become the CEO of one of America’s best manufacturing workplaces, according to Forbes magazine, introducing Pat McKale. Pat, welcome. Well, thank you very much. Glad to be here. Thanks for coming.

Aaron:
I know we’re getting some weather this afternoon and through the weekend, so I appreciate you muzzling the storm and making it out here today. It hasn’t started yet, so we’ll see. Yeah. It’s barely flickering. And we’ll try to get you out of here before it gets ugly outside. All right.

Aaron:
So on the note of weather, I wanted to bring up something interesting. You once told me and I haven’t figured out why yet. Because we both live in Minnesota that you don’t wear a coat before January 1st. And I’ve always kind of thrown that around in my head. I’m like, man, that’s crazy. It’s cold up here in Minnesota. So what? Why don’t you wear a coat before January 1st?

Pat:
So as you know, we have five to six months of winter in Minnesota. And I don’t really love the cold weather, but I came up with a theory that’s probably has no scientific background to support it whatsoever. That if you don’t wear a coat for the first couple of months, you’ll build up a tolerance to the cold and then the rest of winter won’t seem so bad. So I started that. And of course, everybody thought that I was crazy. And once everybody thinks you’re crazy, they don’t let you go back to being normal. So 30 years not weren’t a call to work before the first of January. I’m an unbroken string for me.

Aaron:
30 years, 30 years. So does it work? Do you actually does. Is it easier to deal with winters that way? In my mind, absolutely. It’s a stroke of genius. Yeah, I think so, too. I’m not going to start doing it, but it sounds interesting. That’s good.

Pat:
Well, Pat, you have an amazing story and we’re super happy to have you here today. I’d like to start off with just a couple fun softball questions and warm ups, if you don’t mind. I think about, you know, our listeners. We’re here to kind of get to know Pat McKale a little bit. And I’m curious, what do you listen to when you’re driving it, sports radio or any certain type of music besides the the R value podcast?

Pat:
Besides the R value podcast, I like to listen to ESPN. And unfortunately, I don’t get them except during my lunch hour. But Stephen a Smith is my favorite, although I will note that today is Stephen a Smith’s last day with Stephen A-s. Michel really? Yeah, I did not know that. And the second thing I like to listen is country music. Those are my two staples when I’m in my car.

Aaron:
Ok, that’s interesting. I’m a big I’m a I’m a classic country music guy. I like all the old stuff like 80s and older.

Pat:
My grandpa still plays in a country band. I got a couple uncles that play, so I’m a big country music fan.

Pat:
But all the old stuff. I’m not in the poppy stuff so much. So I like the new stuff. And I imagine you’ve got your home collection of all Hee-Haw tapes.

Aaron:
Yeah, yeah, I do. I do. That show was gone well before I was born.

Aaron:
What is your favorite hobby?

Pat:
Generally, my number one hobby in the fall is hunting with my kids. And in the spring and summer, it’s golf in Minnesota and wintertime, it’s avoiding being too cold. Right. Right. What do you like to hunt like birds, fowl. You’re primarily ducks and geese. My daughter shot her first duck when she was 7 with a 4 10, and my two older kids are both boys, a 16 and a 20 year old, they’re both completely addicted to duck hunting. In fact, my older son Jack is going to an DSU and he chose his college because it was the best duck hunting college. That’s a good way to choose your college. I was not too impressed with his decision process. Yeah. You might have to work on that a little bit. It’s too late. Hey, if he’s passionate about it, that’s that’s a good thing, too. And he’s getting good grades. So he must study once in a while. Right. Right. Are you a member of like Ducks Unlimited or any any of those thing? I am. Delta Waterfall Ducks, Unlimited pheasants forever.

Aaron:
Ok, that’s good. Joe and Chris Novogratz are members and they actually we host events here at our corporate office sometimes for Ducks Unlimited and yeah, they’re big. Chris is a duck hunting maniac. So you guys, I’m sure, would get along really well. We probably would. Well, good.

Aaron:
So every great leader that I’ve met or read about seems to have something in common. And that commonality is a consistent morning routine. So I wanted to ask you if you’re interested. Do you have like a strict religious morning routine where you get up? Same thing you have your suit laid out or is it?

Pat:
Tell us about your morning routine a little bit. So I do have absolutely strict morning routine, but it’s really boring. And I wouldn’t necessarily say that anybody should copy it. My alarm goes off at 5:30. I get up. First thing I do is do email because we’re a global company. So all night long when I’m sleep and I’ve got stuff coming in from our foreign operations, I get those cleared out. Then I shower, get dressed for work. And when I leave for work, I grab a Coke Zero and a bag of goldfish crackers. And that is my breakfast in the car on the way to work every day. So it’s not exactly a healthy start to my ride.

Aaron:
It’s not so glamorous, but it’s it’s the same thing every day. I think that’s the takeaway is that a lot of lot of greatly it’s it’s the same thing every day. It’s a routine. It’s common. And it’s you know, it’s just what you do to get your day started.

Pat:
So my dad taught me to work and he said the first thing that you need to do every day is you need to get to work. So I think if you just start there when you’re a kid and you get up and get to work, everything else is gonna work out. Right? Right.

Aaron:
Even for a couple of minutes, checking emails or doing something that makes a lot of sense to me. So. Well, thanks for sharing that. So let’s dive into let’s dive into this a little bit more. You know, you straight I met you, I think four years ago at the tough tech release when we had a meeting for the tough love fireproofing line. And you kind of strike me as a lead by example kind of guy based on your history and kind of the way you came up through the ranks and became the CEO. You know, I don’t see you as a guy asking anyone within the organization to do something that I feel you wouldn’t do yourself. Is that true?

Pat:
Yeah, I would say that’s generally true. I think all work is important. There’s not some work that’s more important to others and than others. And sometimes people ask me, well, jeez, you’re the CEO. You have all the stress in the job. And really every job I’ve ever had at Graycar, which started on actually on the third shift on the production floor, has had its challenges and every job has been hard. And it’s required you to use your brain and do a lot of work. And it’s all been important to the company. So my view is every job’s important and whatever I’m asked to do, I would be happy to do. And I expect the same of our people.

Aaron:
Right. Because essentially when you started, I mean, you were probably sweeping floors and doing some of the things. But you know what? When Greco’s biggest customers come in and and things are in place and it’s tidy and it’s a great workplace and the floors clean, that person that did that job did something that anybody on any level of the company, potentially it’s as important as anything.

Pat:
Yeah. And we’ll probably talk more about customer service later. But you can’t provide a good customer experience unless every single one of your people from top to bottom is doing their job because a customer is not going to be satisfied if things are mostly good. Everything’s got to be done right. And that’s why every job’s important. Right. Right.

Aaron:
Yeah. That’s great. I respect that a whole lot. You know, if you could go back and tell your younger self, young Pat McKale just starting out something that you’ve learned now, now that you’re older and wiser, what would that be?

Pat:
So probably you’d be about eight things about women. But since I probably can’t really say that on a podcast, I would probably say that one of the things that seems to be consistent always is that if you’re doing something for the first time, it’s going to take it twice as long and cost you twice as much as you think.

Aaron:
Yeah. The women thing, everybody could produce plenty, plenty of tips, including including our I.T. guy Jeff here, who I’m just going to poke fun at because he doesn’t have a micro. And he can’t defend himself. Yeah, we aren’t that smart. Yeah. Yeah, we’re still guys. Yeah. Yeah, that’s right.

Aaron:
I know something important to you is employee relations. You hold a monthly ask the CEO forum with your employees. Do you want grego employees to get out of that forum?

Pat:
So there are a few things that are really key for me in that forum. First of all, the company has grown a lot. And I don’t. Everybody doesn’t have the access to me that they had fifteen or twenty years ago. We are a much smaller organization. So it’s one way that everybody has direct access to ask me something or tell me something if it’s on their mind that a lot of people don’t want to use email or they don’t want to come up and tell me because they may want to stay anonymous. So this is just a way to sort of have a 4000 person open door policy. Now, secondly, it’s a really nice platform for me to be able to share grego strategies and culture. So when somebody asked me a question, often it gives me a chance to reiterate what we’re trying to achieve as an organization and reinforce what we’re trying to do. And then lastly, it’s avenue for me to learn about what’s going on in the company because it’s easy to get isolated from the people that are doing the work. When you’re running around doing podcasts and things like that, and this is a way that I’m grounded every month, people that have an issue or they see an opportunity or they see something that we could be doing better, they have that option to get that information directly to me. And it really provides me with some good ideas.

Aaron:
Right. Right. It allows you to see the day to day problems and hear from everybody. I think that’s I think that’s fantastic. And I was also told the questions are not filtered and none of them get skipped. So anyone who wants to be heard can be heard.

Pat:
So when we started the forum, I’m a pretty direct guy. And if somebody asked me a question, I’m gonna tell you what I think. And when we started the forum, our H.R. department and our communications department was having a bit of a heart attack with some of my responses to some of the questions. Don’t say like they were yet to direct or not politically correct. And I said, wait, this is my forum. If I’m going to bother doing it, I’m going to do this thing my own way. And nobody’s going to filter my questions and nobody’s going to whitewash my answers. So I take all the questions. I’d just sit down and hammer out all the answers and they don’t get changed. There are a couple things that I will change. If somebody asks me a question or makes a complaint about a specific person, I’ll rewrite the question to so so that they can’t like use it to throw their bodies under the bus. Right. But other than that, the questions come through. I answer them all. So do you get just ravaged by H.R. after that? They did for probably the first year. And then after that, they just gave up. Eric. Eric Gald. It was snow that his boss, David Ahlers, the top H.R. dog, is the guy that would really have corner.

Pat:
And when he’d see some of the things that I wrote. That’s hilarious.

Pat:
I fired a few people on the forum. I don’t know who they are, but I just told them, if you’re going to think like that, then you should go fire yourself.

Aaron:
Right. You’re not a good fit. Exactly right. No, that’s good. It’s a it’s good to do that. I think it’s good to hear from employees. I respect the fact that you do that for your folks. And who cares what H.R. thinks.

Pat:
Anyways, I’m not going to say that our H.R. department does many great things for the company. Yeah, yeah, they do. Eric is a good guy.

Aaron:
We did. I did a podcast with him and John Fred Kove and. But yeah, he he’s got a really good sense of humor. He’s not your classic H.R. guy. No, he’s not. Yeah. I won’t. That’s all we’re gonna talk about, H.R.. How’s that? That sounds good to me. Do you still have the you used to have an email or something where you can email the CEO? I remember you talking about that at one point where customers or pretty much anybody could email the CEO questions or if there’s a quality, you know, if they maybe weren’t getting the responses. And we’re gonna get into more customer service stuff here in a minute. Do you still have that?

Pat:
I do. I do. And that that was really started probably six or seven years ago. And there’s a little story behind it. I’m a big time do it yourselfer, so I don’t like to have somebody do something for me if I can do it. So I can do plumbing and electrical and heating and insulation complete. I always hire that, right? Yes. Yes, right. Absolutely. Good call. But generally, I like to do things myself at. I’m a hands on guy. And so I end up buying a lot of tools and I spend a lot of time at different home centers buying stuff for my projects. And I got into a bad streak where I was having some problems with products and I was having some cool customer service issues. And every time I have one of those problems, I think who’s running this place? That’s the first thing that goes through my mind when I have a bad experience is who the heck is wrong in this place is the boss. The second thing that goes through my mind is, wow, I wonder if we do that to anybody at Graco.

Pat:
And for a while, I convinced myself that we didn’t because we do customer surveys and end user surveys, distributor surveys. And we’re a four and a half out of. 5. And I said, well, jeez, ah, surveys are good. I get this date every month that I look at it, so we’re not doing these kinds of things. And then I had to stop and think that, look, some of these companies that have been doing wrong by me as an individual when I’m outside of work, they’re good companies. And I bet yet on their surveys, they’re getting four and a half out of five. So I said, I’m going to stop thinking about customer service, says four and a half out of five. And I’m going to start thinking about it as every customer, every time. Which is that infinitesimally harder bar to jump. And so when I started that process, I really wanted a way for me to be able to get deep into the organization and have anybody that’s having any kind of a bad experience get directly to the top. So I went to put this email button out on the Web site that says basically, if you’re frustrated with great go and you haven’t gotten help that you need, click this button, an email, the CEO. And of course, the organization went crazy when I said I want to do it, they said, you can’t do that.

Pat:
We’ve been in business for a hundred, twenty years. We’ve got tens of thousands of distributors and millions of customers all over the world. And your phone is going to blow up. And I said, well, if my phone blows up, that means we got a big problem. Right. And I want to know about it. So I said, put it out there. And so they put it out there in North America first. And then within a year I had it out worldwide. So I have it in our Asia-Pacific Web site, our European Web site, and our North American Web site. And I got some things at first that came through where people were having problems. They were frustrated by the salesperson or a distributor, a product quality problem that wasn’t getting taken care of. But then after I started that, respond to every one of those and get the organization geared up. That button became known as the nuclear button and nuclear of the nuclear option. Right. And so whether it’s distributors or whether it’s customers, if they’re getting it wrong somewhere by somebody at Great Call, they always know that they can go push that button. And generally then people like Reiko don’t want that button pushed. Right. So it’s another way to reinforce to the organization that I expect them to be on the ball and take care of our customers.

Aaron:
Right. If the nuclear button gets pushed, Pat McKale has the codes right. And taken care of. Nobody gets those emails except me. They really they come right to me. They’re not filtered by anybody at all or they’re not screened at all. Wow. Well, I’m happy I haven’t heard from you for many of the nuclear button. You have not customers.

Pat:
So that must mean you’re doing a good job or else your customers didn’t know about the nuclear button. But now they do. It’s on the Web site. W WW Greco dot com under customer service. Yeah. Now you get to hold us accountable. You should have been doing we have to hold each other accountable because we are a team.

Aaron:
Yeah. That’s right. And it can be anybody, an end user, a distributor. Anybody can have access to it. It is a way to keep everybody accountable. I mean, the customer at the end of the day is the number one priority.

Pat:
So absolutely. And I’ve challenge people a you know, that really sends a message that we really care about doing a great job and try to find another major public company where you can go on email the CEO and get a response back within about five minutes. Right. Right.

Aaron:
Yeah, I I love that. That’s awesome. And it’s a great tip for for our customers. You know, if you’re an insulation company out there, maybe take some of those customer service tips and apply it to your customers. You know, if if you’re your contractors are where you’re working for isn’t getting an answer or getting taken care of. Make yourself somewhat accessible to them. Right. I mean, they might want to talk to the boss, just like you were saying, about the tools or the products that were bad. Like who who’s running this place? So don’t hide from those things. I’ve always thought it’s best to have them on. And the sooner you can make that phone call and get it rectified, the better.

Pat:
And if you have a good team, you really shouldn’t be afraid of having your contact information out there, because I really haven’t found even in six or seven years of having an out there on a global basis. I haven’t found very many people abuse that generally. They only use it when they really need to. And we have a good team at great go. So the vast majority of the time they’re handlin and they’re doing their job, right? Yeah, that’s excellent.

Aaron:
So on that note, I mean, how long ago did the A-plus service plan go into play?

Aaron:
Every customer every time you mentioned that was that is that six or seven years? Does that all kind of tie in with the nuclear button? Yes. That all really started at the same time.

Aaron:
Ok.

Aaron:
What improvements do you think that’s resulted in?

Pat:
So there’s a huge list of things that have improved since we started that whole process. And the first thing was really to get people to think differently about customer service, because if you’re four and a half out of five, that means one out of every 10 customers maybe had an issue. You don’t want to you don’t want to be four and a half out of five stars in terms of not drop in babies if you’re a delivery doctor. So. So we get to get the whole organization to think about every customer every time, which means everything from the quality, the sales call the quality, the training programs. It’s not just the customer service people answering the phone, but it’s the product. It’s was the delivery on time. Did you meet your promise date? Were there? Newell’s in videos available for you on the Internet when you needed help. Was the warranty processed quickly where all your questions answered and problems resolved? And so when you start to say that has to happen, every single time you’ve got thousands of interactions every day, you find lots of room to make things better. With new technology that’s out there, we’ve been able to do a lot with handing off communications.

Pat:
So things move fast within the organization. So if somebody fills out a corrective action in Asia-Pacific or in Iowa and needs to get to the engineering department, it gets there. But not only does it get there that we can track it and we know who has it and we know who’s responsible to close it. And then when it gets closed, we can look and see what did they do? Did they really fix the problem and how long did it take and what was a communication back to the customer? And so that process has been put in place over the last few years at Great when it’s been really helpful to make sure that when we have a problem, that we do take it to ground and not just OK, papered over with. You’re the only customer that’s had that problem. We didn’t hear anything about it. We don’t want to operate that way. We want to take each issue issue seriously. We want to make sure that somebody is accountable for figuring out what happened and getting it taken care of.

Aaron:
The best feedback that you can ever get is from your customer because they’re going to be honest. Right. They invested in your products and they’re going to tell you, you know, their honest opinion of it. So listening to the end users and our customers, their feedback is vital. In my it’s paramount in my opinion, because they’re the ones using it every day and whatever. Things that Grainco can do to make their lives easier. Everybody’s happier.

Pat:
And if you don’t listen to your customers, sometimes they just quietly go away. And there’s no way to measure the cost of that. But I can tell you, the cost is substantial. Right. You think the problem solved, but you’re not hearing from them because they left. So I implemented a rule at Graco probably four or five years ago that we’re not allowed to do a survey unless we follow up on every negative response. And it drives me crazy. I can be on an airplane and they’ll send me a survey and they’ll say, how did it go? And I can tell them, well, it went lousy. I’ll never hear from them or I can buy a car. And it has a problem. I can take it to the dealer and get it fixed. But if they send me a survey and I say I got this problem, I never hear from them. So no more surveys at Great Go where we send out a survey and you say you have a problem and you don’t hear from us. Nobody can do a survey unless we’re willing to follow up on every single one with the customer. That’s negative.

Aaron:
Right. Every customer. Every time. Every time someone going to ask you have fun, a fun, hardball. If there is such a thing. All right. Is the customer always right?

Pat:
The customer’s absolutely not always right. And I think in the business that I’m in, the business that you’re in, in their business that our contractors are and they know that there are customers out there that are bad customers. Maybe they don’t pay their bills. Maybe they’re clueless as to what’s going on. And they cause you a complete tornado all the time. There’s a whole variety of reasons why you could have a customer. That’s not right. And I’ve been very careful at the organization to let them know that the customer’s not always right. Ninety nine percent of the time, if the customers have a problem, it’s valid. But the one percent of the time they have a bad customer. Anybody at Grego can say, you know what, hit the bricks. We don’t need you for a customer anymore. So we don’t have to be abused. We don’t have to not be paid. We don’t have to deal with the very bottom 88 in the channel.

Aaron:
Right. Right. Your customers being essentially the distribution channel and their customers. The end users.

Aaron:
So let’s talk about distribution a little bit. Greco’s always offered 100 percent support to distribution channel. What what does the channel do for you besides sell your products and what is a good distributor look like to Pat McKale?

Pat:
So from a Graco perspective, in most of our businesses and we’ve done some acquisitions that are structured a little bit there really, but most of our businesses well, we try to focus on is product development, manufacturing and or fulfillment. And that’s really what we’re good at. And that’s where we spend our money. We spend $300 million in the last five years in new product development. We spend about 280 million dollars in the last five years on brick, mortar, C-in-C machines and robots to make the product quality better and to maintain our costs. That’s what we’re good at, what the distribution channel does then as they do all the things that are customer facing. They take our product to market. They help launch the new products. They keep local inventory, they do local service and repair. So there’s a whole bunch of customer facing things that that’s not what we’re strong at. We want to focus on what we’re good at. We’ll try to deliver a great product to our channel and we’ll try to get our channel to develop deliver that great experience to the end user.

Aaron:
Ok. Yeah. The channel being essentially the sales team. Right. And the service provider for your products. You know, there’s the distributors. I mean, even even some of our competitors, I’ll say that, you know, there’s a lot of good people out there. Pick somebody who’s going to be able to offer you the most support. Not not us, not anybody. Just pick the one that can give you the best support and service and fix your stuff. If something happens, that’s going to go the extra mile to properly process a warranty claim and improve the process and products along that way. So that’s just something that I’ve noticed. And I think it’s very important.

Pat:
Yeah, I’d like to just deleverage off what you just said because I think you really hit on something key. When you take a look at people that are really doing well, they’re growing their business and they’re making money. Generally, those people aren’t out there looking for the lowest price, the cheapest deal, the lowest bid. I think it’s easy to for people to get their mentality there. I have to be always be the lowest bid or offer the cheapest. But people don’t make the most money doing that. People make the most money by partnering with people that deliver quality, that can differentiate themselves, that can provide service and support. You can pay more for some things and you can have a lot more uptime. And uptime is a lot more valuable, valuable to you than the baby. The price is something that you bought that the day you bought it. So really trying to look at that total cost and what really drives profitability in a business is absolutely picking a partner that can support you from A to Z and not just work with somebody who’s going to give you the best price today.

Aaron:
Right. A lot of times it’s hard to bring your value for somebody else’s price. You know, and we we talk about that. It’s hard for us to bring the things that we’re bringing to the table. I mean, we have to pay a guy to turn wrenches. We have to pay people to process a warranty and do the things to keep your business up and running. So we need, you know, to bring our value. You’re going to win in the end and ultimately make some more money as an insulation contractor.

Aaron:
So, you know, knowing our listeners are primarily insulation contractors, what advice would you give them regarding customer service in their own business?

Aaron:
I mean, we’ve hit on a lot of good customer service points. It’s one of my favorite topics to talk about. But thinking from an insulation contractor’s point of view, what things could you give them to offer their customers?

Pat:
So if you’re a contractor, of course, one of the key things is to try to differentiate your business. If you can’t differentiate your business in some way, then it’s always going to be about being the low bidder. And there are other ways to get jobs besides doing that, because people will pay more, but they have to see value in it. And it could be the yet to be an excellent communicator. Pay great attention to detail. Great with the housekeeping. You know, just coming in and doing a great insulation job, that’s a piece of it. But if you don’t communicate well, if you don’t show up on time, if you’re not off the job, when you’re supposed to be out the job, if you leave a mess, if you’re not paying attention to the little things, then you’re not going to be bringing the same brand for your business to your customer as you could.

Pat:
And I believe that that personal branding that you can bring to a business by offering something over and above just the job well done can differentiate you from your competition. And people are willing to pay more because and I can count on that person and they’re going to do a great job.

Aaron:
Yeah, I agree with all that. I mean, I I tell customers all the time. Call me. And answering your phone is one point that I would add to what you just said. Answer the phone. You know, not all of our phone calls are fun and chipper. And but if you can answer your phone, customers get get angry sometimes. And the sooner you can jump on it and fix it, the happier they’re going to be. So even if you’re mad at me, Pat, even if you’re mad at me, you can call me and I’ll still I’ll still answer it. I promise. All right. Well, I got your number. All right. Well, hey, Pat, I sincerely appreciate you coming in. I’m thrilled you can join us. Thanks for the support from Grainco. And we look forward to a long partnership with great go down the road.

Pat:
Well, thanks for having me today. And we really thank you for your support. Also thank all of our loyal customers. Yeah, we’d like to mention that we’d been really committed to our U.S. manufacturing operations. So we make our products here, our customer services here. We have moved that over to India or to Panama. Our I.T. people are here. And without the loyal people that we’ve got in the field supporting us, partners like you, plus loyal contractors that are buying Rakel, we couldn’t have those jobs here. So I really, really do appreciate everything both you and our customers are doing to support us.

Aaron:
Well, I appreciate that. And anybody who ever wants to take a tour of Graco and see that it’s American made, it’s only a few miles from here. Call me and I’ll answer the phone and we’ll go have a peek at Greco’s operations. Yeah, that’s really, really cool. We would always love to have you.

Aaron:
Well, excellent. Thanks again, Pat. Please subscribe to our value podcast wherever you listen to your podcasts. Subscribe like the episodes and you can also email us with any ideas you might have about topics or podcasts you’d like to hear at our value podcast at i-D. I am an income again.

Aaron:
That’s the letter Rvaluepodcast@IDImn.com. Thanks for listening. And set him up Joe.

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EPISODE 04

Tried and True Business Practices and Selling Tips From Dick Enrico

March 2020  | 1:21:36

“Why buy new when slightly used will do, EXCEPT when the deals are this good.” If you’ve heard that slogan you probably live in the Midwest and you probably know our guest today. Dick Enrico is the founder of 2nd Wind Exercise Equipment, the nation’s largest fitness dealer, and a true sales expert. Dick has a whip-smart sense of humor but he’s dead serious about making the sale. He’s been using creative techniques to get in doors across the Midwest since the 1960s. Today’s super-sized episode is packed with sales history, tactics, strategies, ideas and “Dick-isms” you can take into your next sales call.

Transcript Details:

3:17 – Dick isn’t an entrepreneur, he’s an occupational opportunist.
10:15 – To get through 3 inches of oak you have to be a little creative: crazy sales stories of getting past the gatekeeper
18:37 – Earning the right for referral
28:44 – “The award got me the dough.” The value of incentive to sales.
32:04 – The many businesses and slogans of Dick Enrico and the one business he’ll never get back into
40:00 – Becoming memorable, becoming their insulation guy
47:00 – 2nd Wind Fitness begins….at a TGI Fridays?
55:00 – 2nd Wind grows too fast
1:00:02 – How Dick came up with his Midwest-famous commercials

Season 1, Episode 4 Transcript

6 – May 2020 – dickenrico NF.mp3 transcript powered by Sonix—the best automated transcription service in 2020. Easily convert your audio to text with Sonix.

6 – May 2020 – dickenrico NF.mp3 was automatically transcribed by Sonix with the latest audio-to-text algorithms. This transcript may contain errors. Sonix is the best way to convert your audio to text. Our automated transcription algorithms works with many of the popular audio file formats.

Travis:
Hello, friends. Welcome to our value brought to you by idea distributors, America’s insulation source.

Travis:
This is the Insulators podcast. We’ll bring you industry experts in building science, fiberglass spray foam and spray foam equipment, business and marketing leaders and many others. So sit back, relax, take some notes and listen in to our value. I’m Travis Pancake. SALES and training here at IDEO alongside my co-host Don Clymer, National Spray for manager pancake.

Don:
Do a little podcast. This one’s gonna be fun. I’m excited about this one more than any other one we’ve done so far. So today we have a guy that is probably not known to people outside of the Midwest. But why don’t you you get a little something there on him, don’t you, Don?

Travis:
Yeah. So coming up on today’s show, we have a guy who sold more clothes hangers, I mean, exercise equipment than anybody else. This is gonna be one of the most interesting and hopefully entertaining and funny podcasts that we’ve done so far. And if you grew up in Minnesota or the surrounding states in the Midwest, you know this guy I think all I have to say is why buy new when slightly used will do except when the deals are this good. Exactly. That’s right. We have the founder of Second Wind Exercise Equipment on today. Now, I know the listeners out there are probably thinking, why are we having a guy who sold exercise equipment on the show? Well, it’s because he’s gone through a lot of the same things that our listeners will go through or have gone through at some point in their career. He’s experienced phenomenal growth and sales. He’s had a write out the lowest of the lows. And he started multimillion dollar businesses on the back of napkins. He’s a graduate of the college. What’s a matter? You in eastern Ohio? And he has one hell of a head of hair. Head of hair. Dick Enrico.

Dick:
Dick, welcome to the show. Thanks for having me. Absolutely. So, Dick, when we when we sat around the conference table at IDI and we’re talking about doing a podcast. You were one of the first guys who jumped to mind that I’m like, I got to get this guy on the show. You came to our national sales meeting several years ago and you’re engaging and entertaining. It’s a great speaker. You have a great story. You know, you used to try to run me off the road when we are our offices were close to each other. That was my first experience with you. But, you know, like I said, you’re you’re one of the guys out there, because I think even though you’re not in the industry, I think our listeners will be able to to gain some knowledge on how to strike or, you know, survive and thrive in this in this marketplace. Right. So when I asked you to send over your bio, it was perfect. I mean, it was funny. Great. Great information on there. And I kind of just want to jump right into that and have you kind of explain what it was like growing up on the Iron Range and how you how you came with all these great ideas out there.

Dick:
Well, thanks for once again for the opportunity to share my story and one side of the coin. People say, oh, you’re an entrepreneur, you’re starting to start all kinds of businesses. And it’s flattering as they may appear in sound. I have a different explanation of my behavior. I’m not an entrepreneur. I’m an occupational opportunist. What does that mean? I’ve never had a job other than a kid growing up. And I had all kinds of those. But I realized early in life that I didn’t deal well with direction. For what reasons? I don’t really know. But discipline and directions were not one of my strong points. Subsequently, I made a decision early that I was not hirable. So because of that behavior, a selection I decided or elected to have to pursue different opportunities in growing up on the Iron Range was really interesting was what the oldest of three Italian first generation Italian Americans. My dad was one of twelve children. And unfortunately or fortunately, as the case may be, he’s seeing the 8th grade as his three brothers. Did Ted drop out and help out? So work ethic was something I understood really well more by osmosis than by lecture. Sure. Because he wasn’t very communicative. He’s too busy trying to stay alive and physically, economically stay alive and working really, really hard. So anyway, throughout high school, I seen all those things.

Dick:
And speaking of high school, it was academically challenged. I didn’t like school. I wasn’t very good at it. I looked for ways to get out of things subsequently that didn’t help me as life progressed anyway. Going through high school and a whole litany of various jobs, I mean, a lot of crazy little jobs, but they were all very entertaining. They were educational. And the one thing that that I think was instrumental growing up in a small town is work ethic. Work ethic. I didn’t have an option. My parents were. And I jokingly say there’s white collar, blue collar, no color. I think my dad was no collar. I didn’t fully appreciate that. But their. Won’t parents work? No. My dad did. My mother did. She was a stay at home mom. My dad was just the library work in the mines and in a litany of other manual labor positions. So money was never a luxury, but we never were without. But then again, what’s without? I didn’t experience much. I didn’t know any different. That’s it. You grew up with the environment you’re in. But anyway, as a kid, when I got out of high school and I mean barely got out high school, I jokingly say they asked me to leave when I was 20 because I had a chauffeur’s license.

Dick:
That’s not that’s not far from the truth. It was it was touch and go.

Dick:
So by accident, this is kind of interesting. I understand it understood the sales game really early in my life. How’d you learn that? Going back when I was very young, I was very good at raising money for various fund raising activities or there was selling candy with those selling magazines, selling this, selling that. I took it in. And I just gravitated to it by accident. I was pretty good at it and found it fun. I found it interesting and able to engage in people, be persuasive, motivate people to kind of correspond with my way of thought. So only a game to. Right. It was it was I was the hunter rather than. Hunted. So anyway, when I got out of high school by accident, I got into selling pots and pans, cookware, but pots and pans that a single working girl market up on the iron range when the iron crashed upon the heads, a tough sell about very tough. And the guy they recruited me, he lasted about three weeks and I was stuck up on the range by myself. I didn’t have any money. My mother lent me the $21 dollars to get started with one or two conditions. One was that I wouldn’t tell her husband my father, because he wouldn’t understand. And number two, that I repair. So subsequently, that’s how I got started. And I started selling clockwork that a single working girl market. And by accident I became really, really good at it. I would brome wrong that I arrange peddling pots and pans to these young girls that were aspiring to start a hope chest or hopeless chest or despair or whatever you want to call spare barrelhead back in those days.

Travis:
Sure.

Dick:
And anyhow, I got pretty good at it. And in the not too long erred, I think the time I knew what my dad was earning approximately and horsing around. I had a bigger or greater income in the HEDID. He’s still living at home. I was living at home. Haiti. He didn’t know what I was doing. That was another thing. I had a kind of sneak around, really. And I’m out there peddling his cookware and I’m travelling in the small towns on range. And I did that for almost two years up there. When I realised that the territory was pretty limited, I then sat down with him. This is in 1960 now. This is an old it kind of old. I got out of school in 58 in 1960. I had a confession to make and it was brutal. And I shared with him that to my father. I said, I’m moving the Minneapolis, Minnesota. So what are you going to do? What I says, what I’m going to continue, what I’ve been doing for two years. I’m going to sell pots and pans. And his response was, I didn’t know you were working in a hardware store. I said I didn’t want to take the time to explain Sherman because he wouldn’t understood. Yeah. Banging on doors and etc., etc.. And so anyway, I packed up and moved to the cities and it was a whole new ballgame in the cities. The prospects were immeasurable. By 1961, I had my own company. I trained a line of cookware from the westbend company and I started Kitchen Craft of Minnesota and I started recruiting college kids to work for me. And I built a pretty successful organization.

Travis:
So let’s go back to that. So you were you were selling the bottom pants. Cold call on door to door. Door to door. And then you said, hey, I can do something bigger and better. How did you have the knowledge or when was it that you reached out to Westand or whether there was westbend?

Dick:
When I got to be known in the industry just because of my production up and up in the Iron Range, I mean, it’s a small world in the sense that people in the game knew that there was this guy up on the range who didn’t know any better. There was someone a lot of culture.

Don:
They took no.not notes of units moving and so whatever. Where’s all this stuff gone?

Dick:
That’s right. Anyway, so that happened. And I got pursued and I said, why not? So I I started my own distributorship back in 19s 1960. I start poking around sixty-one. I started it and I moved to Minneapolis, rented an apartment in a rented my first.

Dick:
Office space. And I was scared to death. Was in south Minneapolis and the rent was eighty five dollars and eighty five bucks a month.

Travis:
And did you also feel you were scared, but did you also feel like, hey, I’m making it?

Dick:
I knew what I was doing. Yeah. And then ultimately I started adding to my inventory. Where I brought in other products, dishes and sewing machines and cutlery. Because you were getting asked for that stuff.

Dick:
I just wanted more ammunition to go ahead and call on these gals with her. You had the insight to expand, you know, other products. In other words, have another bullet in the chamber rather than one. Yeah.

Dick:
So I started carrying products that I thought they would have been candidates for and developed a fairly successful organization, in fact, a big organization for direct sales. And doing so, I pick a B had a firm grasp on the word rejection because when you’re knocking on the hardwoods in those days, there wasn’t security to get in the building. Sharon lived in apartments. It was very easy to get in. He just had to be a little more creative, have a more clever approach. And these are things that that I did to separate myself out of the pack.

Don:
So how did you. Okay. So we have probably a lot of our listeners, our sales guys out there trying to to get that house, to get that builder to sign up to the program. And you said rejection. You learn to handle that. I mean, what was the biggest takeaway you had with or how to overcome that?

Dick:
Well, I heard the old story, the law of averages, OK? There’s a law of averages. There’s batting averages. You bat 350, you know, Hall of Fame. That means a little over one out of three.

Dick:
You’re successful, right? In the same in the sales game, it just a matter of making sales calls. I just became more proficient on my approach. Now everybody’s got a personality. I’m very creative. And it’s all set. And I’m very creative. And I use that to my advantage. One disadvantage that I had and it was very obvious is I wasn’t a very good trainer, OK? Because you can’t train personality just because you’re a good sales guy, doesn’t his younger good trainer? Yeah. And I recognized early in the game that I wasn’t a good trainer. And I’m going to share a little story with you. Nights like this happened yesterday. And this this is almost 50 years ago. I had a recruit, very excited, good looking guy. Thank you. Hit in a foreign accent. He was from Greece, very attractive guy. And he said to me, he said, there’s no way there’s no reason I can’t sell a lot of cookware. I just know I can. But I don’t know how to get in the door. And he kept saying that to me. And I thought to myself, all right, fine. The guy really wasn’t going to make it. But I said, I’m going to give him a shot.

Dick:
Right. So I took him up with me on a Saturday morning. So I was good to go on Saturday mornings early because I worked all the time in being that there’s no security in these systems. So we went into and I knew the area very well. All the apartments were these young ladies lived. So we go in this little 6 unit building downstairs to the left, been in the building many times. You can always tell when somebody is there on the radio’s playing. So we’re down the basement, lower level in the hall. And he sees I’m going to knock on the door and I’m I want to show you how to get in. I’ll show you. I will show you how to get in real. Because he kept saying, you show me out again and I’ll know how to do it. So he is standing as close as he could to the door across the hall. 6, 8 feet away. Yeah. Sorry. Wrap on the door. Standard answer. Who’s there? Dick and Rico. What do you want? And what? The National Hearing Society. We’re checking on the acoustics of the building. Did you hear me?

Dick:
What? ISIS. Man, you have a problem. Would you please open the door? I have to talk to you.

Dick:
The door opens a sked chain there. She’s peeking out. And I do my spiel again. And then she’s looking at me like I’m crazy. This is very important that I talk to you and your premise. We’re checking the acoustics of the building. She opens. I said, come on. I round him up. He says, we’re in.

Dick:
It didn’t go any further than that at all. I said, thank you for your time. This seems to be no issue. No issue here. We go outside. He looks at me, says, I can’t do this. I say, no, you can’t. I’m fifteen. He was retired. Is that fair? No national acoustics. Well, I was at the national hearing society checking out the acoustics of apartments. Okay.

Dick:
You can’t train anybody on that to get through three inches or two inches of oak. You got to be creative right now. Now, speed the clock up a little bit. In 1960. Hi. This is long before cell either phones long before, and that was another business that was in The Wall Street Journal I bought. I seen an ad for a phone in a suitcase. Now, in case, you know, I was. Twenty five hundred bucks. Twenty five hundred dollars then was a lot. Yeah. I buy the thing and I knew what I was going to do with it. Right. It was going to be my way to get in to see these young ladies. Right. Because they worked out referrals and hours and their phone number. So anyway, when I get this phone and a briefcase in a weight wait pounds. So very inconvenient, very convenient. So I go up to the door and by myself, obviously, and I prop it up against the door. I could hear the music in the background and there was a ship to shore phone. That’s kind of how it works. So you dial a number that takes you to an operator and then the operator dials you the number. Really? OK, so I got it propped up against the wall because it’s so heavy and I’m dialing and I could hear phone ringing in the apartment because the acoustics weren’t very good.

Dick:
Right. You found that a hello. And I said, Mary, this is Dick and Rico. I have you on the phone. But I got something I want to talk to you about once you hang up and let me in. She’s excuse me. I said, I’m outside your apartment. I’ll knock again on the door. That’s me outside. But I got you on the phone, too. But it’s more important I talk to you and the person. Right. There’s some creative at all. My gosh, the skid chain would open in a peak run. Could she see me holding the phone and would. And it was I can’t even describe the look because back in those days, the only one that had a phone and a shoe was get smart. Yeah. So, I mean, I I’m in on her. Once I got in, I got a chance to do the deal. Yeah. I sold more cookware. And you talk about referrals. Right. Because the next day they always say, well I bought parts and he’s got a phone and a cs:s phone and a suitcase. Oh I don’t believe that. Send them over to see. Right. Unbelievable.

Travis:
Best twenty five hundred bucks. You know what happened that way? That’s why I invest, right? Twenty five hundred out their perception.

Dick:
See, I gotta get in somehow. I have to get in in another. I mean there’s so many crazy things, right. I’m not going to adore who is their dick in Rico. What do you guys want. Right.

Dick:
Whereas a RICO guy and I ultimately did a television commercial and I can recall a guy, a friend of mine kind of look like me. We. It is. I remember those, actually. I remember anyway. Those are some of the things.

Dick:
It’s a matter of being innovative. It’s a matter of having a sense of humor. And these are personality traits that are very difficult. So I don’t want to influence the audience to see. You got to be a stand up comic. Yeah, I’m a funny dude, but I’m dead serious when I’m in the game. Sure. In the peddling game and my thought process, I was Benin’s. And the reason one one reason good reason was selling cookware as successful is I approached wood would for four very distinct bullet points.

Dick:
You start with a suspect. Hopefully you turn the suspect into a prospect. You get in front of them to make the pitch. This is applicable to any kind of sales game now. And if you earn the right and do a good job, you might get a referral. And if he can do that same routine misbehavior in sync, you’ll become lethal. I knew how to do that.

Dick:
Suspect prospect closed a deal. Ask for a referral. And when you got the referrals because you earned the right for a referral, we hear that from.

Travis:
From our trainers that we use it. It’s earning it.

Dick:
Earning the right forever or it just is right. And I’m really, really customer sensitive in those days.

Dick:
And I continue it today is any person. And I’ve sold a lot of products to the consumer, always to the consumer, never B2B. I was to the consumer, the end user. I always follow it up immediately the next day with the thank you card, a hand written thank you card today. That’s all still to this day. All right. To this day, my current business that a second wind I used to send out and it was difficult, but I sent I got to a point. I would send out 40 a day. The customers all over the country. In fact, just the other day I got a call from a gal in St. Lewis. I sold second win four years ago. I got a call from her. She had my card. I know that. Right. And she says, I need a service call on my treadmill. I says, you have one of my business cards, don’t you?

Dick:
I said, I sold the business four years ago. But here’s who you call. Yeah, that’s awesome.

Dick:
So the power of that is to never forget the value of your client. I can’t emphasize it enough the value of your client. Most people are hit and miss. If they hit, make a score, they move on, never to call back. I think of it entirely differently.

Dick:
And and it’s just my behavior at second wind. I had hundreds of sales people working in retail stores. I’d like to think it was mandatory that they send out thank you cards. Most of them didn’t. Even though I furnished the card, I finished the book you gave me until I game all the tools.

Travis:
But the ones that did do it. They were the successful ones. Let’s get into that a little bit about how. OK. So we went from pots and pans to second wind. So what was what was a transition there? Did you sell the. What was the name of the company? Hitchen craftier.

Travis:
Kitchen crap.

Dick:
Yeah, I did that till I was 35 years old in selling things to the hottest items that a single working girl market.

Travis:
Now, what do you call it? Just despair. Beral despair. Just that.

Dick:
And I sold them a lot. I mean, a lot. And I I there’s things in time prohibiting here. There’s there’s things that I did that nobody’s ever done with that all the time.

Don:
We can go as long as you want. This is great.

Dick:
I’ll go back to the cookware business. You know, beaten on doors is one thing. And I did a lot of that and I was good at it. And I knew how to do the referrals and what have you. But then I got a little more creative. I said, my story is so good, why not share it to a group?

Dick:
So they elected to do is to go after nursing students, third year nursing students, and I get a hold of the leader of the class president, whatever.

Don:
How did you come up with that? Nursing students, because they were in an educational field when there was when they got out, they would be making a decent income. Sure. There were a little more mature thinking in the future. Sure. Sure. Yeah. There were 20, 21 years old now rather than 18.

Dick:
They had a career in. They were thinking ahead and they just the nursing students. Right. So I zeroed in on them. And what I did is there was a several hotels in this once. It’s long been torn down in Minneapolis. I made an arrangement at hotel that where I rented a meeting room that would hold, say, 20. And I I once a month they put these on and I’d rent the room and I bring my wares in my cookware and set it all up and the dishes and all the little goodies. And and there would be invitation only. And I knew about how many guests I was going to have. It was a sit down dinner. So they’re getting a free dinner. They’d be eligible for a living cedar chest, $150 item. There would be a dry one of 20 would win a cedar chest. So has that attraction. There was no obligation whatsoever. I was going to educate them on the purpose and the mindset of considering a futuristic investment in things that they need. So anyway, futuristic investment, I like it. So the real challenge now is how do you mass close 20 people who only know their names? Now, there were no other names I had.

Dick:
I gave them name Terrence, but their first name. But you don’t know their background necessarily? Nothing. So you got to play the group. You got to be really very astute and how you close and you got to pick the leader, you know? And once you pick the leader, it’s like dominoes in it. They tumble. Well, it took me a couple of dry runs to figure out how to do it. So to close the deal, I have to think Parker brothers for this, the Monopoly game, people. I went and bought a whole pile of sets, a monopoly. And I didn’t want the game, but I wanted the funny money, the monopoly money and predicated on how many guests I had alongside of their place sating was a stack of funny money. Monopoly money. And over in my display area, I had various other premium’s cutlery, dishes, wood, and they had a number assigned to a 50, 75 or 100 didn’t mean nothing. And how I worked the clothes was this and I did it. Generally, if anybody is interested today up to five, the purpose of that monopoly money there is you can take a hundred dollars and go shopping and pick any item you want in five or more up to 10. It could be a $150. So I gave that type of incentive. Right now I’m watching facial expressions. Right. And when I did my finale, right, I said, here’s what I’m going to do. I’m want to excuse myself from the room. I’m going to go settle up on the tab. Right.

Dick:
In the meantime, you guys figure out how much of the monopoly money you want to spend. Right. So it worked that way there, right?

Don:
Sure. How does one go? Oh, this is like where do you come up with these? Are you driving down the road? Right. I had a very vivid imagination.

Dick:
Yeah. So I use this tool and it was so powerful that I got the end. I come back, I see. Okay. What kind of money or where are you going to spend the funny money? Well, there’s nine of us and I’m thinking, okay, I’m short one to get the ten, right? Yeah. I said, what do I gotta do to burp one or more of you to get the 10 because we can throw another. Or I could sweeten it up anywhere I want. Yeah. So anyway it was pretty slick so I would average about 40 to 60 percent closing ratio. Now they didn’t have to get it delivered, I’d store it for them. They could make any kind of monthly payments they wanted because at the time I owned the finest clarity.

Dick:
If I were a year old, I was I was perfect.

Dick:
It was absolutely perfect. So here’s the finale that was really kind of exciting. Okay, so now we’re at the end. And then I had a an easel wood with a contract purchase agreement. Wasn’t a contract a big one? So I’m closing now six, eight, 10 people. And you got to have the momentum, the ether, the me, because they start to wane. It goes the other way or they go. So this is all momentum going right now. So I say, well, here’s what we do know. There’s seven or eight or whatever the numbers are fill in. I got and this is in the days where there was no NCR paper. It was carbon paper. Carbon paper, 3-point carbon paper. Right. So, OK, so they’re all fill in and outside and tell him what to do.

Dick:
Put your name in your dress in this in here. And here’s the price and blah, blah, blah. And here’s what your monthly payments are going to be. I’ll write that down. And then I would always precise these zero Chinese. And over to the right, there’s three carbon. So press hard, OK? All right. I made sign. Now I signed up people who were purchased. Please stand up as some were theatrical. Yep. So they’d stand up. I know what I want you to do is grab on the very bottom, very bottom of the agreement and the top.

Dick:
And when I say jerk, you jerk it. So okay. So you jerk. So what do they got? They got the three agreements copies and they got the carbon paper. Yeah. And I say just like a parade we’re going to throw all the carbon paper in the air and throw it in the air to celebrate. Yeah.

Dick:
And I’d get a couple other ones just on the rebound track as I think just throw the paper to the part of the action.

Dick:
So I got to do those. And at that point I was down 50 to 75 deals a month while doing those kind of deals. Right. And I was doing it. Nobody could ever do that. Yeah. Ever do it. Right. And then I still ran a sales organization. But it just thinking of the different things and how to do this kind of stuff.

Travis:
So how many sales guys were you running at?

Dick:
I had anywhere from I usually had four or five full time guys and 15, 20 at a time. Part time. Yeah. I’m big in recognition, big into awards monthly. Everybody likes it. Oh, yeah. Somewhere at a rank. They wrecked the recognition here. I remember selling cookware for another outfit and the recognition little dinky trophy the size of a watch fob. And I thought to myself, there’s no way in hell I’m not going to win that every month. Yeah. Every month. Right. And it was that incentive interest that propelled me in the financial part of it was secondary. Sure. The word got me the door. Yeah. Not the door. Got me the auto, the award, the recognition, the pride is what I was. But money was a byproduct. Byproduct, ancillary byproduct. Right. Yeah. This is on my mind things.

Dick:
Right. Yeah. I’m a peddler. I’m just a peddler right now. A one on one. And that’s where I took that to a larger groups anyway. So.

Travis:
So you do that for how many years.

Dick:
Till I was 35. And the reason I got out is the prospects stayed the same age and I’m not able to communicate and share language. I just sit here. I got to where it is relatable and I was in the relateable. Right. And and subsequently I went on to do a lot of other things.

Dick:
And, you know, I use the word colorful in my business career and the deals I put together are figments, my imagination. That’s all here. I see things differently. Once again, I said the criteria is, in fact, one of the criteria that I had shared with you, Don. Yeah.

Dick:
Is this three absolute imperative, non-negotiable criteria for me to do something? Number one is I know little or nothing about it’s on that basis. I don’t do hobbies because I don’t have a hobby. I joke and say I belong to two clubs, Costco and Tripoli and I pass fine art.

Don:
So that’s true. So you don’t want to be biased. Let’s look. I’m not biased. You know what it is?

Dick:
It has to be a tangible product where everybody is a suspect. And then you’ve got to be as interested in learning about it as that prospect is. That’s right. I mean, I know little or nothing about it. So you’re learning about it at the same. Sure. Right. And it’s just a product. I guess the product and product knowledge is one of my strengths. More often than not, the prospect might know more about at night. But that’s OK. Yeah, I know how to stimulate interests, motivate them. There was a deal, right? So anyway, number two. Number two is I have a couple other deals in various stages of disarray. Right. Because my attention span is really, really limited and it’s a liability limited in the third.

Dick:
Unfortunately, and I jokingly say I never had the economic resource and I didn’t. You could carry my worth in my pocket and you could hear it. That. Yeah, it’s an inside joke. I never was that despair. But, you know, nevertheless, it’s funny right now, those three things. And if they were prevalent, I’d go after it. Right. And I had all kinds of things, all kinds of various situations. And, you know, the most read, well known as we talked about earlier is when I fired up second wind SEC and wind exercise equipment. Right. Now, prior to that, I can think of. I was in the waterbed business.

Dick:
And another thing that I really, really liked is I’m very creative when it comes to a name and a slogan. Oh, absolutely. Name and a slogan. And I’ll share one with one of you today. I’ll share a story where I knew what I wanted to do, but I couldn’t come up with the name and I couldn’t come up with the slogan in a delayed me about six, eight months before it hit. But anyway, I can think of.

Dick:
I got into the most difficult business that I’ve ever been and never would do it again is the hospitality restaurant. I started an Italian restaurant. My slogan was it was called SCAA Pelley’s. I had to give it an Italian name. I didn’t want to call in Enrico’s because chances are I was going to go Tap City.

Dick:
And the I led the way. So I created this fictitious character called Vito Scarpelli. He became so real that American Express sent him an application for a credit card. Seriously? It’s all quite a few people still talk about it today.

Dick:
Sadies Scarpelli. Right. And it was done in the 1930s. The. I didn’t have any money when I started it. And it became relatively successful joint. I didn’t have keys the place. I just left. I didn’t. And keys that front door. I didn’t order cook. I hired people that knew how to do it. And I promoted it. And. Okay, fine. I started a. Did you do commercials for that? Oh, for sure. I did radio commercials on that and they were kind of funny. And well, what was the the slogan and slogan? It was unique dining experience. OK. Because it was different. Really different. The place was aesthetically. It was different. Another funny one I got in the waterbed business. OK. A waterbed business back when waterbeds were hot thing. And the name of the waterbed store was Aqua. Night Night spelled Kanai GHG. And the slogan was a big white stadium with a guy in armor and adjusting tool in the marketing pitch was a night on water is a night to remember.

Dick:
Had this horse walking across a lake right. With this just. Yeah. All right. Okay, fine then. One of the more successful ones, I got into the cellular phone business in 1986 when Sally there just started.

Travis:
So they weren’t in suitcases and they were in bags, right? No, they weren’t even bags.

Dick:
When when cell wheeler started in 86. Now bear in mind all the meat and then me go back a second year, back to the phones. I had the phone, the briefcase hassle. I mean, they got their point. And you want to use it more? I had to charge it up every night. The damn thing weighed 18 bounds and was a pain in the ass at the novelty wore off. So a 1960s.

Dick:
8 1967. One on the waiting list for a mobile phone, mobile phone. What year? 1967. Back in those days, back in the Twin Cities, it is probably true all over the country. Northwestern Bell, the phone company had mobile phones and they were installed in a car. In a car, right in the waiting list was several years and there was only a hundred.

Dick:
Sisk Sixty subscribers for four lines as part of a party line right up. So I go on the list. Ninety probably is a 66. I went on the list because I remember the phone ringing one day and says Mr. and Rachal. And I says, it’s in recall. What can I do for you? Well, I’m so-and-so with Northwestern Bell and are happy to see if you’d like a mobile phone. You can get one. I thought I won the lottery. Right. Right. I went out. But in 1968, Fleetwood KAG, Cadillac, Fleetwood, big old one. Like a like a hearse. And I had the phone installed. And in those days it was like a payphone and the front had buttons on it for buttons and they had to put the transceiver in the trunk. It was like a piece of luggage and they had a drill, a hole, and I had a choice, my trunk or my rough brand new car. So it ain’t gonna be a neurofocus. Put it on the trunk. Right. They drill the hole. So I have this phone right now burn mine. And it worked really good because it was I was busy. There was four lines, just like farmer lines. Right. And you could see when they were busy, all former red light. And it was green. You had to work.

Don:
Yeah.

Dick:
And if you didn’t hit it fast enough, you could listen to the conversation. Right. Okay, fine. You could listen. I got tired of that. So now what I did is I would pull in front of the apartment and I’d get Mary on the phone and I tell her, this is Dick and Rico. Mary and I got to see her real quickly. I’ll be up there in five seconds. I hang up. Knock on the door. Get here so quickly. Right. Bob. Bob, I did this several times. All right, fine. So I had a phone in my car. Now, there’s one thing that experience that I didn’t anticipate with the phone in the car. Couple of years later, I’m getting gas at a filling station. And the guy seen to get the pump jockey seeing the phone in my car. He saw you got one of those phones in your car? Yeah. Fancy. Yeah. He says, oh, yeah, I I’m a two way ham radio listener. You know, I can we intercept all those kind of phone calls and there’s a guy in south Minneapolis. I don’t know what he does, but he pulls up in front of his apartment.

Don:
He’s talking about you. He’s very smooth. And he says, Mary, I’ll be up in five seconds. I got to talk to you.

Dick:
This guy really good, right? Christ, he’s talking about.

Dick:
Yeah. Okay. I enjoy the privacy of the conversation.

Dick:
Yeah. Yeah. We’re non-existent anyway. I had that in my car till cellular came out. And back in those days there was no cellular and cellular phones came out in nineteen eighty six in the Twin Cities, eighty five Chicago 86 in the Twin Cities there was two carriers, there was no portable phones.

Dick:
It was a phone mounted in the car. It was three thousand bucks for the phone and backpack in half a minute. Wow. And the reception was terrible. Right. And interesting enough I got into the cell phone. Yes. By a fluke. Nineteen eighty six. I’m forty six years old, tired, depressed, had all kinds of crazy deals that didn’t work out. And I said I want to go back to the basics. Selling one on one suspect prospect closed the deal for or earner referral.

Dick:
And this was perfect. Perfect.

Dick:
A more mature. I know the game. I’ve had a phone and a briefcase.

Travis:
I had, boy, you know. Audience was probably right around here. That’s right. Your demographic threat. Right.

Dick:
And so, anyway, in December 1st of 86, I went to the cellular phone business. And I’ll speed the clock up real quickly here. I saw so many cellular phones. Headquarters is based out of Seattle. There’s only two carriers there. At the time, a wireline and a non-white airline, the non-white airline was cellular one. That’s why I was with. They sent people out to talk to my clients because they thought I was running a multilevel deal. Nobody had ever sold as many forms as I did.

Dick:
Really? I sold. A lot of forms. Why? I know how to get the referrals. Did you have anybody working for you, Bill? OK. But I got an organization in the company that time was called Car. Tell C.A.R. Dash TEFL and my slogan was a little kid in a convertible with the phone up to his ear.

Dick:
It is said experience a moving conversation. And that was my ma and campaign. And what I did rather than a thank you card. This is really thinking out of the box. This cost me a couple of bucks, which was nothing. I went and had license plates made custom license plates and they all said the same thing. Dick and recal mobilized. I had their name punched in it real Ashleigh’s and I would doumitt groups of whatever they sold in a month. Yeah. And I’ve have them punched out and I’d send them that license plate.

Dick:
Right. What are they going to do with her. He can’t put it in your billfold. They can’t put it in your drawer. They put it up in their place. Really. Is this. And it was so powerful. Yeah. So powerful that people commends you. So it’s just getting creative with great marketing. Great with some marketing. Yeah. And I still have those license plates today.

Dick:
And then if the guy’s name was too long, I gave him a nickname and I punched on his license plate and had the name of my company on it. Like Scarpelli. Yeah.

Dick:
Anyway, it goes back to recognizing your client, making an impression on your client so that you’re not forgettable. My thought process has always been you have a doctor, do you not know you have an accountant?

Dick:
You hopefully might have a lawyer. You don’t use them very often. And when you make reference to those people, it’s my. You take ownership. My doctor, my mechanic, my accountant, my lawyer, my insolation, my insulation. Hey, when you can clean your hair, your prospects claim your customers prefaced by the my. You’ve done a hell of a job. Absolutely.

Dick:
In my case, whatever I sold, I became my phone guy, my my, my botts guy, my my I became the my top of the awareness, my my exercise guy, my. It’s right.

Travis:
So let’s get into second wind. Okay. Great. Well, I wanted to back it up. Even even further a little bit. So your creativity. I mean, were these like middle of the night? You had a notepad next to the nightstand, right? No doubt.

Dick:
We’re right on. I see. Exactly. Today. That is they really simple as that. Sure. I have a Post-it by my nightstand and I think of things. And if I don’t write it down, I won’t go to sleep because I’ll try to remember. Sure. I jotted down my marketing ideas are middle of the night, really middle of the night. And I took his day in the middle of the night. How do you create some sort of routine to make yourself more creative or just kind of comes to you? Comes to me? What do you take before bed? What’s your flavor? Really radically. I take melatonin and go to sleep. But anyway.

Dick:
So I modestly see I have no talents. I’m not I’m not mechanical and not technical. I’m not musical. I’m not artistic. I have a very, very vivid, accelerated imagination. Were you trouble in school? I was.

Dick:
Yeah, I could I was. But I was very creative with it. So it wasn’t trouble.

Dick:
It was more entertaining. Yeah. So, yeah, there was issues. But anyway, yeah, I’m blessed with that. I relate some things differently. I have the ability to digest things very quickly. I’m very I’m not risk adverse if I’m okay.

Travis:
Are you a practical joker among your friends and family?

Dick:
Yeah, I am. But but I’m dead serious, too, right? I’m dead serious. Right.

Dick:
And I will say to me, the line ahead of me is always very, very short. If you’re not the lead dog, right, you’re looking up the ass of the lead dog. Right. And I don’t do that. Yeah. And I surround myself with people who share some of my spirit. My my attitude. I empower people, make decisions. My management style is really kind of simple. Empower people, make decisions. I hold them accountable for those decisions and I reward them accordingly.

Travis:
Simple, easy. That’s a body knows where they stand. That’s exactly right. Yeah. Yeah. Very transborder is a workout. I know. Yeah, but it’s a good flat. I mean, it works more than the not right now, but it’s the laws of probability again. You’re gonna the average you know, some good guys here. You know, some rotten apples.

Dick:
So hard paschen work ethic or three non-negotiables. When I’m looking at a prospect, I care less about their accomplishments. I care less about their. Achievements because I put myself in that room. Heart, passion, work ethic. Everybody’s got a heart. Yeah. So the passion and work ethic are the negotiators.

Travis:
Yeah. Hey. So that’s what I love. Yeah. So, you know, when when we’re talking about this and kind of going back to the beginning of the episode here, you know, we talked about second wind and kind of the the transition with that.

Travis:
Right. And how you started the one store. And it just it blew up. I mean, what was let’s talk a little bit about that. Sure. I think that’s where a lot of our listeners really get going to recognize. Are interested in that story.

Dick:
Second, wind is an interesting story. It’s by far the most successful deal of of the the opportunities I pursued if I were to keep numerical count than I did or do in the criteria’s. The business had to have an address and a phone number. Okay. And second win was number 21. Second win came after the cellular deal. When I when I was in the shelter, the phone business, I thought I phoned my home forever.

Dick:
When there were three grand in it took somebody with some hits by an imagination to close the deals. As time progressed, they became free with a Big Mac, and when they got to that point, my skill set was needed. I mean, you could buy him anywhere near that way. Right. So I decided to get out. I didn’t know what I was doing going to do.

Dick:
But I knew I had to get out of the phone business. And I did. And I did. I did really well. Well meaning. It brought me back and it inspired me to get back in my my bob and weave in my confidence, reinvigorate big. I really was I was charged and I sold a lot. I mean, they still talk about it. I run the people in the porn business. I remember you back in the early 90s, in the late 80s. How many of those things you sold and sold? A lot of them. Okay. So I’m at a restaurant, T.G.I. Friday’s in Minneapolis. This is in March of or January of 92 with a friend of mine who happened to be at a little dinky fitness store. And we get talking a little bit and he’s telling me about his fitness business and blah, blah, blah. And I had bought a treadmill earlier for a lot of money. Never used it, but I bought this treadmill like everybody else. But this treadmill, it turned into a doorstopper. A court record does collect whatever. Right. And I got to thinking I. So I’m talking to him. I says, do you think there’s any market to rent fitness equipment? Because there’ll be wants to make the investment for the attitude that they’re never going to use it after they come out of ether. Right. Right. Well, no, no, I don’t think so. Okay. So we’re talking more and I see, you know, nordictrack back at that time, late 80s, huge, huge item. And a good product, too, by the way. What a huge item. Right. So he said, you know, those Nordic tracks, that’s an interest in daily costs.

Dick:
Six, seven, eight hundred bucks I think come in to try and rent them his what. Or you’re going to get him for myself. Well I can’t buy him from nordictrack because they’re the only ones that sell them. I got a biometric RATCH sales. There was no internet in those classifieds. So I said, I think I’m going to buy these large tricks out of grad sales and I’m going to rent them jeans. And he says, What are you going to court? And names are so important, right? Oh, yeah. So I flipped the placemat over and I’m scratching and I says I’m going to call it second wind. He did say nothing there. It’s boring. Second wind. That’s exactly how it started. Second wind. Right on a napkin.

Dick:
On a napkin.

Dick:
Five minutes backo in a restaurant and the back of a napkin. Second wind. Okay. So I find a place to rent was abandoned. Print shop its original second winter still there. Where was that? And then Louisiana Avenue and 394 haplessly is still there. Today was fifteen hundred feet. It was an abandoned print shop. I went to the landlord and I told him what I was doing was a guy from swedens spoke with an accent. He’s in Richo. He says the rent’s fifteen hundred dollars a month. You can last three months. So I went three months in advance. Oh, wow. I started with $15000. I saw the car. I had to get the 15 grand to use car to buy these Nordic tracks out of grand sales. So I gave him a third of my working capital and I fired up and reopened March 2nd, March 7th of 1992. And if there was a museum of collectible fitness equipment, it was in there stuff that I scrounged out of garage sales, classified.

Travis:
So would you personally you yourself go to these drives? I go and hustle Hustler and haggle for the price.

Dick:
I bought these Nordic tracks and I spent up to 400 by. Swarm and an I always had cash in my pocket. I’m going back and forth and I know I wanted it. They knew I wanted it. I had a waiting list to Wrentham.

Travis:
And these people who had the garage sales had no idea who they’re up against. No idea. Other than they had some. They weren’t young.

Dick:
And I wanted what they weren’t using. And I had green dollars in my pocket. Right. So I got to a point, a period of time. I had over six hundred on rent. I’m renting them for three months. A hundred nordictrack. 600 nordictrack. Goodness. I’m getting 50 bucks a month. Hundred fifty upfront. Nobody ever renewed it. Nobody ever renewed it. At the end of the three months they brought it back. They thanked me for saving them five or six hundred bucks. Right. So they were happy as happy as hell. 150 bucks. Right. And I’m cranking along and I said, jeez, I better get into the user. Could not run around buying you solo flexes and this in there, whatever I could find. And I’m running ads in the classifieds. Right. And I’m getting people that come in.

Dick:
So the first year, second wind. Nine months did about four hundred thousand dollars in business. No new equipment. By then, I had a second location and now I’m up to about a million five. And I’m hustlin every day to go out and find the inventory. You talk about work rate and your game. People unload the insulation and you holler about what happened to my dealer. The best analogy I can use is I’m like a lion feeding the cubs. I got to go out and find the PREE to bring it back so my people could sell.

Don:
How exciting was that when everybody else.

Dick:
I found something and I’d pull up in front of the store and I’d honk the horn, run out, drag it out of my Audi, and I’d go back out to hunt another one and hunt another one and bring it back and bring it back.

Dick:
Well, this goes on for a couple of years. I thought to myself, there’s no way in hell I continue this because I couldn’t find enough product and my sales were predatory. A problem. Yeah, yeah. But it was a tough problem. I had a couple of stores and another one I’m thinking about and I said, I can’t continue this because every day I gotta go find the product. Yeah. And you can’t get people excited and hold them accountable if they’ve got nothing to sell. So I’m dictating what they can do. Yeah. Too much pressure on me.

Dick:
So I convinced a treadmill manufacturer in Jonesboro, Arkansas, Clinton’s from to sell me new treadmills and I had to work hard to convince them to sell me new treadmills. I rented these critters with a purchase option. I doubled it to 100 bucks a month at that three and end the three months they had an option, they could continue renting them. Nobody did.

Dick:
They could buy it if they bought it. I credit it two of the three months toward the purchase price. It’s a try before you buy. Yeah. So what was the close rate on that? Well, the closer it was really pretty good or not so good, I should say. But that was okay because what I was doing was creating my own used inventory. So I rented it four or five times. I sold it is used.

Dick:
So I became the largest dealer for this treadmill manufacturer in the country in a short period of time. So I said to them, I say, share your story with some your non competitors. The fitness business furloughs.

Travis:
That’s amazing.

Dick:
A whole thing opened up and then they had the vendors come in to me and I was different. The second one was different because we took trades.

Dick:
Nobody took treats. We sold used. Nobody sold you, right? Yeah, we rented. Nobody rented. So it goes back to one of my adages. I make it a habit of doing what the other guy can’t do. A willing to do doesn’t want to do. He could be right. Right. But I don’t know that. Yeah. Until I try it out. And second win. Fast forward. The clock became the largest specialty fitness dealer in United States. Right on its peak. We had over 100 locations. How many states were you? We’re in 13 states in 100 locations.

Dick:
And it was primarily to couple of things. My story was good. The previously owned was an incredible hook. Hiring people who had the hard passion and work ethic I gave him the tools to work with in my recruiting speech was real simple. I have a recipe in don’t pots with the recipe. If you don’t like oregano, leave it in the recipe.

Dick:
It’s there for a reason. It’s there for a reason. I’ll take the suspense side of it.

Dick:
Just follow the recipe. In somebodies guys and I had some gals who was mostly guys did really, really well considering they had no academic background. They liked what they did. I furnished a steady flow of prospects, suspects dorm and was often in the closed. Close the deals.

Travis:
When when did you decide, hey, we’re gonna go out to 13 states. You grow too fast. Was it wet?

Dick:
Way too fast. Yeah, way too fast. My appetite was. I love doing the exploratory. I was. I’d go out and search out the locations. I see things other people wouldn’t see. At one time, I had 18 stores in Minnesota, Cousins and have them mini submarine shops. Right. Yeah. I had 18 fitness stores and a soda. Right, at 11 or 12 in the Twin Cities. Go figure it. My first step out of Minnesota was Clive, Iowa. The more night. It’s still loaded. It is still there. They still have a second wind or it’s called a different name now, but a second wind store in Clive, Iowa. And then we went to Wisconsin. Wisconsin was a very good market. I got a little aggressive and I went to Illinois, Chicago in particular. Yeah, I opened 30 stores, all go, gosh, 30.

Dick:
And that was twenty nine too many. Right. Yeah. Brutal market. So Wendell, what year was the. Were you at your height? What store. 2009. We had one hundred and three stores in the 13 states and that year we did ninety five million in business.

Don:
Wow. I use the equipment are new and you know, and noise. So when did when did all of a sudden you were sitting there saying if this is too many.

Dick:
Well here in two thousand eight and I’m not an economist by any means. And my gut is my compass. And my dad told me things weren’t right. They weren’t right. This was before the issue. So immediately I said, how can I respond? My second most costly expense. Next to personnel people was rent, rent. So I said, well, I don’t want to lay anybody off and I don’t want to change the compensation of my employees, but I’m going to take a crack at the landlords. And this was policy. This was really policy back then. So in 2008, I spent a whole weekend, a whole weekend drafting a letter to a hand-picked, hand-picked. There was 28 of them landlords at that time. I had about maybe 80 or 80 locations, 85 maybe. And I picked the ones that weren’t doing very well. And I crafted this letter and I was asking for a little consideration for rent reduction. And looking back at the letter and I never kept it because I was so embarrassed when I sent it out.

Dick:
It was so soft. It was so apologetic. Note nobody in their right mind would have acquiesced. They say this guy must be smoking some bad dope. He’s asking us to reduce the rent. Give me a break in his asking it so gingerly and so softly. Yeah. You don’t expect us to do anything. So no takers? None. None. Okay. Zero. Other than I tip my hand and I was embarrassed that I was sure sensing showed vulnerability. I was I was wounded.

Dick:
And I’m thinking, okay, now I’m the pre rather than the hunter. I’m the hunted. No. Okay. So three, four months later, I paint and go away. The need became more apparent.

Dick:
So now I’m going to play hardball. And the second letter I sent notes something the same one, and I added a few landlords. There wasn’t an option. I picked about 25 this time. And I said, effective immediately, I’m going to pay you percentage rent. And the rent is 10 percent of sales starting now. And I took last month’s criteria, whatever I saw. They got 10 percent of it is rent shit, hit the fan shit hit the fan in a hurry rate. You talk about getting attention. OK. I succeeded what I wanted, right? So immediately I took control. Now I got evicted. Some cases they did me a favor. Right? Big time favorite.

Dick:
They evicted me in fine. I moved out. I didn’t negate my obligation. So once the ball got rolling. And then things start getting really shit. OK. In 2009, we did the most business ever, but we weren’t profitable. It just was the momentum.

Dick:
In 2000, why weren’t you profitable? That’s your biggest cause. You know, we have we have customers, right. Who are just killing it. And they think, man, it’s all about sales, sales, sales. But if you’re not profitable, I know we broke even.

Dick:
In fact, we lost money in 2009, the year that we did that much business. I just had a high overhead and I opened too many stores. And I mean, rate crudo grew too fast. Right. You weren’t able to keep your eye on that whatsoever. I’m not an operations guy at all. Mean, I got a kick out of going on. An idea guy. Idea guy. Mirasol landlords and they knew how to move. Brown And I knew how to dangle the carrot. I knew how to get extractions and I knew where to put the deals together. And I got a big kick out of it, right. And wants the store opened.

Dick:
I didn’t care. Sure. I went up to the next one. You know, the thrill of the kill move.

Dick:
I love the thrill.

Travis:
Yeah, I think that’s relatable, too, to the listeners out there, because like I said, we get we have guys who are successful. Any market. And they love Bill in that market. They say, well, if I did it here, I can do it here. Well, they can’t be in two places at one time. They can’t be in ninety five stores at one time. Like you said, most of them are bad. You know your analogy. You were a bad trainer. Terrible. So are most terr.

Dick:
And in the most important resource by far is the human resource. The human resource. And the back then it was you could find them today. It’s brutal. Red-Green that is so brutal.

Travis:
It’s one of the number one challenges in our industry right now. Even for us to aim for.

Dick:
And I’m pretty good at finding people right in my recruiting. Today, as I go out and beat on doors just like I did when I was 7 and call her if I want to hire a guy in my delivery repair area or whatever, I go to Jiffy Lube or some gas station and I watch a guy who is working out and I check the personality. All right. Personality is all about personality, right. And if I’m looking for a salesperson, if I want a lady salesperson, I go to a woman’s clothing store.

Travis:
That’s how I hired this guy right here. He was he was selling landscaping. And I went to a seminar has. And if you bought from him, he’d come over, give you a base sign. Yeah. And during the consultation, he finally looked at me and said, Are you interviewing me? Strange questions.

Dick:
Yeah. This last weekend, them over and in the same Paula K-Mart’s closing a location next to Walmart is Sam’s Club set Moondog good re pre-ground right. I went to ask for the manager. She’s 40 years with the company, right? Yeah, that was an interest in her, but I was interested in the other people. Right. Here’s my cards. If so many people looking for a job, do me a favor and call me.

Dick:
All I was one or two. I’m not looking for tender, dry one, two or three right now. And that’s part of the game raked in in second wind. Recruiting was done through referrals from the employees. I incented them to give me recruits for sure. They like what they’re doing. They want to share with their friends. But the human resources by far the most important.

Travis:
Well, let’s let’s talk a little bit about the commercials. We’ve got to talk about those. And I mean, like I said earlier, grown up, I remember those commercials. They were fantastic. I mean, everybody knew Dick and Rico. Second Wind where all those commercial ideas notepad by the nightstand ideas.

Dick:
Yeah, they were. Most of them were. They were all impromptu. I produced my no script, no script, no script. I produced my own commercials. I come up with the meat on the bones of it. One of the one of the funniest ones I come up I come up with the theme and I was going to do a warehouse sale one time was called Broom the ROOM.

Dick:
So I had to go up by the props. So Fleet Farm is a big retailer in this market here and has all kinds of stuff. I go to fleet for the first time in my life, last time in my life like a fleet firm. I’m in the hunt for a broom, a pair of coveralls, a dustpan and a hat. So I go by the props and I’m checking out the girls. May maybe 20 years old. She looks at me. She’s changing careers.

Don:
She knew changing careers. So funny. That’s awesome.

Dick:
Yeah, but coming up with these crazy slogans or things I had one time on. These are all live spots and I shot no rehearsal. I had Brock Lesnar, The Wrestler.

Don:
We just just that water. They just want you to. Yeah. Why hold that up? Yeah. Those two guys never met each other.

Dick:
Oh, really? Listen, I knew for a long time we met in Lessner, Idaho. I stumbled on him and I got him together into the studio and I said, here’s what we’re gonna do. You’re a wannabe Leshner. You’re a Has-Been. Yeah. Leard Szema. This is the theme of the pitch. Right. And we did one shot that they want to take one take one take both number all one takes half in. The more hiccups the are the funny the.

Don:
Oh yeah. For real there. Yeah. The more real here. Kind of like this podcast. That’s what you you ad lib your way through. And it’s no different than my little like I sent you the other day. Those ones, they do the videos. Yeah. Shoot. They wouldn’t pull up one plug. I kept getting an error message for some reason.

Dick:
Anyway, yeah I do. You know, I have one of my people’s pretty handy with a camera. And I’ll go into the my my new deal, the shady deal people and. And did shoot spontaneously these crazy spots. They could be 30 seconds. They could be two minutes. Not much longer net. Yeah. And it just boom. Right. It just the spontaneity is the most important part. Right. A more real and more real live right in this slogan. Which ultimately a copyright is patented the way by new and slightly used will do. It was that for a long time. And then when I added new, I had to have a caveat and the caveat. Except when the deals are this good. So I can’t tell you how many English teachers would get old and we’d see. Well, I don’t quite understand how you say that.

Dick:
They’re contradictory.

Dick:
And I said I was sorry. I was I wasn’t one of my strengths in school. So I use that as a copout. But that’s what it is. Right. Where is the confusion? Yeah. It works. It was a confusion.

Travis:
So you did the commercials. You ran second way in to 2015. Yeah. And and then it was a decision to make.

Dick:
Yeah. The decision was it was it was difficult to say the least. Who at that time. I was 75 years old. I’m seventy nine. Three pushing 80. I got approached by my largest vendor, Taiwan. Taiwanese manufacture, good manufacture and with them for 22 years. And they wanted to expand retail to North America. They seen the handwriting on the wall. What the sports authorities and the sellers. Everybody floundering. They wanted to have a more specific role in their distribution channel. So they approached me and I wasn’t interested. And then I had a little physical challenge, unexpected physical challenge. And I thought, you know what? In Myrtle’s, I think I am. I’m not. I had a couple of three on 250 employees then at the time. I have an obligation to them. Why not? So out of curiosity and courtesy, I decided to listen. And my grasp. But Taiwanese is pretty light. There is of English is much better. So they were in my conference room, in my corporate headquarters, myself by myself. Just me and the president of the company and a couple of his cohorts. And we started the dialogue and I put the white flag up and said, you know what? I could be interested. Yeah. And this is how the story went down. Not many people know what this deal calls. This is exclusive. This is kind of exclusive.

Dick:
It’s kind of funny, but it’s DICKERSON stick his neck two decades a mile away.

Dick:
So once they seen that, they had somebody that was vulnerable or receptive. They see that they all have American names. Right. And the president said, Dick, Dick what? Dick for company. So I think for a minute. I says, give him a number.

Dick:
Who? Deke DeKoe. How DeKoe? Right. The number I say is I do a topless ball.

Dick:
Put what took us bald. Mean H.R. Kotov. Vast number of us. No. There’s no negotiable one porkers Bolton. No. Negotiate out of ass.

Travis:
Are you serious? Three weeks later, the deal closes for the nut vidoe.

Travis:
The original number you pulled out of your ass.

Dick:
The number is closed. Three weeks later. They did no due diligence. Wow, that motivated. And they knew. And I was I was vulnerable. I said, no, no. Three, four weeks later. Unreal.

Don:
And though I knew that number was way higher than well, it was just a number. And what I did is I took the number years I was in business and multiplied it by that number wasn’t very scientific.

Don:
It was out of the window, you know, that kind of stuff right now.

Dick:
But I did it took us Paul took his path. I love that. And most of my friends are Jewish. A lot of my buddies are Jewish. Right. So he took his portrait and that was it. And we laughed about it. And and then.

Travis:
So did you have second shade already in my eyes kind of thinking about it because what am I gonna do?

Dick:
Yeah. What am I gonna do?

Dick:
You know, I knew as well because he always said he had some go on.

Dick:
What I didn’t talk about today is there in my inner room of second. When I had started several other deals in the 2000s, I got into a recycling concept called Woods and Water, once again, hunting fishing campaigner.

Dick:
And I opened up a bunch of those stories. Right. And I don’t own a fishing rod, right, Cherokee. And then I did pools and spas. That was brutal. I guess those house and the Jacuzzi pileups are a brutal. Yes, right. You know, three o’clock in the morning, they call me up and say, hey, my spot, quit working because of the Trojans stuck in the gym.

Dick:
I said, well, why don’t you get whatever.

Travis:
Right. That’s not covered under warranty. That’s right, Sarah. So whatever. Right. So there was those kind of deals, right? Yeah, so I had all kinds of interruptions, sir. And now you think that was part of the doubt? Well, demise of second one’s focused. Well, here it probably didn’t help. Yeah, it probably didn’t help.

Dick:
Right, because I’m very distracted. I have a hard time keeping my squirrels. Whatever. So anyway, so these are these, you know, some of the various things. And so anyway, so the deal did consummate closed. But ironically, you guys were my neighbor. Yeah, I need Perry. Headquarters right down the street from me. And then they enlisted me or asked me to stick around, you know, to help out. And I said I wouldn’t be a very good candidate.

Dick:
No, no. We need to dig deep. You piece of company. I didn’t last very long. In a year? No, no. Not even. No, no, no. And you couldn’t work for somebody? I. They didn’t ask me to do anything. I felt guilty. Taken their dog. Sure. And I just did the same work and. Right. So I said, you know what? What I want to do is try to replicate the same thought process with a different product. Second, the patio furniture business. Well, a couple of things I was aware of, but I underestimated in this market, the seasonality patio. It’s really three months. If there’s a snow in April, it’s Lowe’s. In April, it’s too much. And secondly, the. I don’t like to use the word competition. I’ll just say the options where they can buy it. You can go to a grocery store, buy a watermelon on the way out. You can buy a set of Paddy Archer. They’re everywhere. Okay, fine. But I had some hooks difference. I copy what I did at Second Wind. My new slogan was, Why buy a new one? Gentle no no’s. Because that’s my second cheaty deal thing. I could manage myself. But I did things differently. I took great patio furniture. Nobody takes it, really. I sold previously little. And if I’m taking trades.

Travis:
Yeah. Did you have a criteria for that? It had to be in a certain condition. I just I bring it up, bring it in and bring it in.

Dick:
I was buying stuff sight unseen. Right.

Dick:
I’d buy patio furniture. Right. And people would send me pictures and I’d buy it after pictures. That’s a good idea. Yeah, I I rented it a short term for staging. Right. Or events. Okay, fine. And then in the wintertime, I had the what I call the solution to patio pollution. I started for you in the wintertime right now. We do a little bit of that for commercial clients today. Yeah, but it wasn’t enough to keep it going. So I took trades as sole use. I rented and I stored some of the things I did at second wind, but not to make it work. So fast forward the clock. Today I have lots of patio furniture. I mean, the liquidation process. Get rid of it. I’m not going to get out of it entirely. And I went into the liquidation business and I have a new concept called the shady deal DPL. In a shady deal, DEEPU is I am in the liquidation business. And it’s all household products. And I opened my first location six months ago today, my warehouse in New Hope, Minnesota. I have an eighty thousand foot warehouse. I carved out 20000 feet of it. I made it into a showroom. And I have anything and everything that pertains to the home. My primary sources are our Target E Commerce, Costco, Wayfair, Penney’s, Marshall’s, T.J., Max. Anybody that has surplus Overstock now returns, not Aboriginal business.

Dick:
Been around forever. It just that there’s more and more product available because of e commerce. People don’t know that in Wayfair is the largest one of the largest retailers in the country, furniture and household items. They do almost 8 billion a year. Oh my God, a billion. They don’t own any stores. They don’t own any proud of the Aegis sell stuff. But the returns are 25 to 30 percent. And we buy the returns. Right. And in people, today’s like buying a pair of shoes. They buy three. They’re going to send to buy up. Oh, yeah. They might order two dressers. They’re going to send one back, you know, dress it right or whatever the case may be. So when these semis come in, it’s like storage wars. I don’t have any idea what’s on them. All I know is it’s household. And we sell it for half, at least half what they would sell for the store. Now there’s some risks involved. But every day’s a day, NEW DAY, it’s fun buying the stuff. We’re just getting going. I have two stores open now. Third one is going to come in to convert my second shade patio in Minnetonka, Minnesota, to a retail location your next 60 days. I’m in the process of doing a lease here next week at another location in another suburb of the Twin Cities. I was going to slow down. No, no, no.

Don:
Well, you say in your bio since retiring. Was not an option. Is that just because you just know you need to be doing it?

Dick:
I have to do something. I just do. Right. And it’s unfortunate because I don’t have to do this right. I’ve invested millions of dollars in my newest endeavor. Today, I am cursed with not having the resources. But I got to be careful that I don’t episode all the way. All right. I like the action. I really like the action. Yeah, you can tell. I like I like doing things and I’m just creative. Right. I know I got some ideas with Second Shade that I discussed today because they’re so far fetched and they may or may not become a reality, but marketing, telling a story and doing a different and B and in heaven, a memorable experience. Yeah.

Dick:
If people come to my current location where second sheet is today, it’s like Disneyland. I got mannequins all over the place. I got a. I brought you guys a couple I brought a couple bobbleheads here. Love them of the of the shady deal Bobby with the gangsters there and blah, blah, blah. It’s just part of the deal. Yeah. The whole ex-cops peel is part of the deal. And it’s memorable. People think about it. I give away very nice tchotchke gifts. When people come in, they don’t have the buying. I mean, nice gifts, right? Yeah. And it’s just part of the hype.

Don:
Well, this has been awesome. I. I bet it’s the most silent that I know because I’m just enamored with listening. Sorry. It’s great. So I am proud Joe’s for a hug. No, no. This is this is when we were talking before you came.

Don:
I said I have a feeling that that we’re going to be like listening a lot. And that’s fine. That’s that’s New York. That’s where the knowledge comes from. I mean, we I just thinking about your story. I’m just amazed it. It’s really simple if you think about it.

Dick:
Right. You know, here it’s execution. What I do is not I’m not an innovator, not an inventor. I sell things. And what I do is I look around and see where these products are being sold, how they’re being sold. Is there a niche? Is there daylight? Is there a hook? Yeah. If I think there’s one of those three, I’m on it.

Don:
But you also play to your strengths. You know what you’re good at. You go and you utilize it. You don’t you don’t want to. I mean, you guess. But you don’t because you know that you’re gonna you’re gonna take a swing at it. And if you fail, you move on to the next idea.

Dick:
Yeah. And when I did some the public speaking, I always would conclude by saying it’s okay to fail because today you’ve been listening to a failure. Mostly the deals I’ve done. I was upside down. The Wall Street Journal did a story on me about 10, 12 years, Zuko. And it’s okay to fail. They sought me out, really, because somebody tipped them off. There’s a guy in Minnesota. And they did their homework. They really did their homework. And it was painful because they dug up all the things that were disturbing. Wanted to forget. Forget the rate. And I finally said to me at the end, they kept asking me questions. I said, you know what, this interview’s over with because all you’re doing is reminding me of things that I hopefully would’ve forgot. If you don’t have enough information to do your story, I’m done. Yeah. Two days later, showed up in the journal. Wow. And it was it was it is inspirational in the scheme of things, Rick.

Travis:
Hey, I got one last question for you. Did you pay your mom back the $21?

Dick:
I did, because I saw my neighbor Gail set of pots and pans and I walked to her in Soder and my commission was 24 bucks. And I paid back my mother, the 21 bucks, and I had three dollars left over.

Dick:
And I said, there’s no way in hell I’m going to lose this job ever, ever. Some company paid them back a little bit more than. That’s right. Yeah. Because back in those days, if you made 75 cents an hour, that was big deal.

Dick:
Sure. Sure. I guess this is a hell of a deal. Yeah, that’s a hell of a deal.

Travis:
Well, some of my the thing that stuck out the most, two things actually suspect prospect clothes, earn the referral, earned the right for referral. And then right here, this one I liked. Never forget the value of your client. Ever, ever.

Dick:
The best media, the best promotion thing is a satisfied client. And they’re tough to come by. Yeah, they really are. Now they really are. And that’s why I think great value. Am I not condescending to them at all? I look at them straight and I says, I wonder, I want to have you as a client. What can I do to earn your business? To earn your business? There it is right there. Well, and you separate that. You got it. You got a chance. Yeah. Easier said than done. Yeah.

Don:
And never give up and be creative. I mean they just created anyone you think is something. Write it down and then try it. Try it. So I think with that. You know, I jokingly said maybe 20 minutes right where we’re going on an hour and 20 minutes.

Travis:
I was when I made it. Well, it may shorten that up. Butcher would know where to keep it all. Really? We’ve got to keep that. All the dick isms in there that dick is. Absolutely. I now have a new phrase.

Dick:
It’s here. So me, you know, if I were to self-describe my my personality. One word colorful.

Travis:
Absolutely. Without a hundred percent. Yeah. Yeah. Well, Dick, thank you so much. It’s been entertaining to say the least. All right. Great stories. Appreciate your. Yeah. We lost our technical.

Travis:
Get at it, sir. I was on a union break. He said he had to go to the bathroom in 20 minutes. Yeah. Yeah. See the clock there? Yeah. Holy moly. We’re in overtime. Yeah. Yeah. We’re going to have to pay him or something. I think he owes us lunch. Yeah. Well we got lunch if we want to stay for lunch. Yeah, I see that. What’s going on out here today.

Don:
We’ve got a new hire orientation so we’re just training up some new guys, got some speakers in town. So I’m able to do this.

Travis:
Well, we should get Dick going and say five, 10 minutes to these guys about. Don’t be afraid to fail. Would you mind? I don’t know. Well, maybe you could say something while we’re eating lunch. Hit the hit the big red button over there, Don. Go. Hey, thanks, guys. Want to thank you. If you like this. Make sure to subscribe and we’ll see you next time. You’ve been listening to our value.

Travis:
This has been a presentation of the cellar door network for more podcasts that you can take out into the street and turn into money. Visit Cellar Die network dot com.

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EPISODE 03

Keeping Site Safety as Top Priority: with Bullard’s CEO

February 2020  |  37:39

On this edition of the R-Value Podcast, we’re chatting with Wells Bullard, a fifth-generation CEO of Bullard Manufacturing, a leading manufacturer of high-quality personal protective equipment and systems that are marketed worldwide. Bullard traces it’s history back to 1898 selling mining safety equipment to gold miners in San Francisco. Today they make products essential to workplace safety: thermal imagers, hard hats, firefighter and rescue helmets, supplied-air respirators, powered air-purifying respirators, and air quality equipment.

Workplace safety is not only a regulated mandate, it’s essential to keeping your business stable and profitable. Today’s podcast will give you great tips for keeping your site safe while keeping work efficient.

Transcript Details:

3:04 – Rapid Fire Get To Know Ya’: Wells Bullard edition
7:06 – The family history behind 5 generations of Bullard
11:48 – The patriarch of the Bullard family built the business by understanding how others work
14:55 – Was Wells encouraged or entitled to work at Bullard?
19:52 – How has work safety evolved over the last century?
23:55 – The acute incident of safety
27:59 – Safety in the spray foam market
31:47 – The safety minute!
34:13 – Fun facts about safety: head size is changing the industry

Season 1, Episode 3 Transcript

3 February 2020 – Bullard_revised.mp3 transcript powered by Sonix—the best audio to text transcription service

3 February 2020 – Bullard_revised.mp3 was automatically transcribed by Sonix with the latest audio-to-text algorithms. This transcript may contain errors. Sonix is the best way to convert your audio to text in 2020.

Aaron:
Welcome to R-Value. The Insulators podcast brought to you by IDI Distributors.

Aaron:
I’m Aaron Franzine, your host today. And you may be asking why is I doing a podcast? Well, we’re trying to get some industry information out there. We’re trying to get some extra knowledge. We’re gonna be talking about some building science insulation products with experts. We’re gonna have some amazing guests on here. One of them is today and we’ll get into that in a second. I am joined by my two co-hosts today. Travis Pancake works out of our corporate office as a sales and training extraordinaire, and he’s a 10 year IDI veteran.

Travis:
How are you doing? What’s up, Travis? Busy day. Yeah, busy.

Aaron:
Busy. And then also joined by Chelsea Whitley. She has 10 years in SPF sales as an SPF sales professional and a year and a half with IDBI.

Chelsea:
Yes. Sir, hello. What’s up, Chelsea? Hey, 10 years. That’s right, isn’t it?

Chelsea:
Well, close look, we’re down target. They’re round, round, round up, round up.

Aaron:
So anyways, we have an amazing guest today. But before we get to that, I want to give a quick plug to our IDI service centers. So this is a new service that we’ve recently brought to the market. Think of it as an auto mechanic for your spray foam equipment. So we have three locations currently, Tulsa, Oklahoma, Bozeman, Montana, and Boston, Massachusetts. We have professionals there. And it’s a it’s a service station for foam foam equipment. You can bring your rig, anything. You’re basically willing to ship on a pallet. You can get a repair done on it. We’ll get a quote out and that’ll get approved by the customer and we’ll turn it around and get you back up and running as soon as possible. Where can you find more about those locations?

Aaron:
I would start with IDI dash insulation. Perfect.

Aaron:
We have an amazing guest today. She comes from a leader in the safety industry. She grew up in San Francisco, California and Lexington, Kentucky. She graduated with degrees in international relations and Spanish from Stanford University in 2003, as well as gaining her MBA at a little school called Harvard Business. She’s a fifth generation leader in Bullard’s one hundred and twenty one year history. The CEO of Bullard, Wells Bullard, welcome today.

Wells:
Thank you for having me. Good morning.

Aaron:
Good morning. So what do you think of our facility so far?

Wells:
It’s really awesome. I’m looking forward to the full tour. But what I’ve seen so far, this really cool podcast studio is pretty impressive. And yet a space is really nice and new and open. It’s really it’s awesome. Excited to be here.

Aaron:
Yeah, it’s. It’ll be fun this afternoon. We’re actually in the middle of a three day training adventure.

Aaron:
So we’re gonna have vendors today, this afternoon as kind of our vendor outreach with the new Bullard trailer, which we’ll talk about that. But first, we’re gonna do just a quick rapid fire, just a couple spur of the moment questions.

Aaron:
Whatever it comes your head just to get everybody loose. First thing that comes your head. Yep. So I’ll go first. Wells, what is your favorite movie ever?

Wells:
The usual suspects. Usual suspects?

Aaron:
I don’t think I’ve seen that one. What? That’s a great light for you. Then don’t spoil it for guys. Or so say. Exactly, Kobayashi. Awesome.

Aaron:
Are you a dog or a cat person?

Wells:
Um, so I would prefer dogs to cats, but I’m a I’m a goldfish person. Goldfish had a goldfish as a kid for six and a half years. What was his name? Cleo. Cleo. Yeah, I loved Cleo dearly. Cleo moved from California to Kentucky with me. Made them? Yes. 6 1/2 years for a goldfish that I really. And when I went, I had a fair say.

Aaron:
Yeah. That’s amazing. Yeah. Do you see fish or birds or things? Don’t make movies.

Wells:
I can’t swear they didn’t replace her. It was actually the same fish.

Travis:
Did you have a hard hat for it? Yeah. Yeah. fishbowl of heart attack. So one hundred year anniversary, right.

Wells:
100 year anniversary nineteen. Exactly. My great grandfather invented the first industrial hardhat. A hundred years ago this year.

Aaron:
Wow. That’s amazing. Really? Yeah. That’s unbelievable. We just got these in today and they look awesome. Yeah. We had to showcase them because we’re video recording the first time.

Aaron:
If you were stranded on an island and could have only one thing, Wells, what would it be?

Wells:
One thing. So not one one person. But when people don’t kill, people don’t count. A Kindle probably is that I could have all the books.

Wells:
So I got loaded up before I got there and just read a lot that we get our vendor yesterday said. Beer. Oh, that’s okay.

Aaron:
That’s a good one. You getting anything?

Aaron:
Yeah. You’ll live longer with a Kindle than beer. Yeah. Until the battery runs out. Yeah, I say solar powered. Can you. Yeah. There you go. You newest innovation was four years ago.

Aaron:
Are UFOs real or not? With all that fun Area 51 news lately. There you go. Eve in UFO.

Wells:
I’m not going, but sure. What? I don’t know that they’re not real.

Aaron:
So yeah, my uncles and grandpa saw one at the same time. They swear really they are. UFOs are real and I trust them. They’re their contract.

Chelsea:
Yeah. They’re honestly have no reason to lie to me about anything. You have really good beer in northern Minnesota. Yeah. Might ahead.

Wells:
Ice fishing at the time. Was there some bourbon involved?

Aaron:
There might have been. I can tell you in Kentucky, bourbon and bourbon. He doesn’t say whiskey. Whiskey, bourbon. Yeah.

Aaron:
So if you weren’t the CEO of Bullard and you could pick any occupation in the world, what would it be?

Wells:
So if I weren’t the CEO of Bullard. I always say that I would have found another company just like Bullard, and I’d be working there because I love what we do in terms of protecting people. But if I were a totally different industry, I’d be a diplomat. So probably living abroad and I’d be a diplomat somewhere.

Aaron:
That’s a good one. That area. And that would be a great job. I don’t think I’ve ever heard a kindergartener when asked what I want to be a diplomat.

Travis:
I would like to be a diplomat. OK.

Travis:
Well, we had a guy yesterday as a senator. Oh, I would not want to be in politics now. Absolutely. Yeah. We won’t get into that.

Aaron:
Religion and politics Are off limits for R-Value.

Travis:
So thanks again for for being with us. Wells, we’re excited to have you. We’re gonna get into it a little bit. So you’re a fifth generation Bullard. We want to know a little bit about your family history and lineage.

Wells:
So 1898 as when my great great grandfather founded Bullard and we started as a distributor to the gold and copper mines in California and Nevada. It’s kind of an interesting story. My great great grandfather was an entrepreneur, 1898, starting a company. His father in law had been a distributor following the railroad and it followed the railroad to New Mexico as it was being built and basically as a distributor to the railroad. And so my great great grandfather had seen that entrepreneurship. And then I moved further west to California and started his own distributorship for supplies. So acetylene, carbide, metal lamps, things like that for the miners in California, Nevada. And then I asset’s that’s the founder, my great grandfather. His son had gone off to World War One and was in France in the cavalry and was wearing one of those metal doughboy helmets that you see in all the movies. And he came back to California and to the mining business and said to his father, the miners here are just wearing these soft canvas caps. And yet I was in the trenches experiencing really similar hazards to the miners are facing. But I had this, you know, metal helmet with suspension and and all this sort of protection. And he’s like, I feel like the miners are being underserved and they’re not being protected.

Wells:
Metals too expensive. It’s also protecting against ballistics and things that they don’t need protection from. But I think that I’ve got an idea of how to protect the miners better. And so he physically steamed. He created what was called the boiled hardhat 100 years ago. And it was steamed canvas and leather with a pretty elementary suspension, a leather brim, and it was shellacked with black paint. And that was the first industrial hardhat. And it was adapted to really be cost effective for the miners to be comfortable. Also to protect them from falling debris and and other hazards in the in the mines. And so that’s when we became a manufacturer, was with my great grandfather who led the company for, oh, my gosh, I think only almost 60 years small. So he was he was an inventor and he was a marketer. He was a jack of all trades, a real renaissance man. And he also invented our first abrasive blasting respirator. And that was doing the construction of the Golden Gate Bridge. So 1919 is when he invented the hardhat. And in 1932, the construction of the Golden Gate Bridge was happening. And it was the lead engineer on that project, Joseph B Strauss wanted a really safe work worksite because it was at that point in a bridge construction project for every million dollars.

Wells:
There was a death that was just to stick. And this is a forty million dollar project. And, you know, if Strauss didn’t think that 40 people should die to, you know, get to Marin County from San Francisco. And so he had a safety net underneath the bridge. And then all the workers were wearing Bullard hardhats and he had a no showboat culture. So if people were caught kind of showboating, doing kind of cool things, standing dangerously, trying to be dangerous, and they were exactly hired on the spot and they were off off the site. And so he worked as severances go to a tiny town at the time. And so he worked. My great grandfather who said, hey, Ed, can you adopt the hard hat to protect against falling rivets? That’s my great grandfather did. And so while the workers are wearing these hard hats, but there’s this, you know, safety net, they are sandblasting the steel that come from Pennsylvania that had rusted, that went around South America. And they’re breathing in this santa-santa, the silica. And the lead engineer and my great grandfather like this doesn’t look that great. I got an idea. So put canvas. If he’s a canvas over the hardhat, cut a window, put a piece of glass there. Use the wood.

Wells:
I’ll just assumed to be great deep breathing and break it up.

Wells:
Put that into the into. But essentially first abrasive blasting respirator and that’s how we got into respiratory production was on the Golden Gate Bridge. Let’s fast.

Aaron:
Yeah, that is the Golden Gate Bridge. I mean, that had Bullard products stamped all over it.

Aaron:
I mean, some of their first hard to have the respiratory systems. That’s unbelievable. It’s incredible. There’s still a customer today and we’re really proud of that. Wow. That’s really cool. That’s an awesome story for that’s very so nuts not to not to be a downer, but how many people did die on that project and it’s still alive. Yeah.

Chelsea:
What was the thought? I think it was eleven.

Wells:
I think a lot of people died on the project and 10 of them died when the safety net failed. So the safety net caught them and then fell. So I think 10 died in the safety net failure. But again, it wasn’t anywhere near the 40. No, that would have been expected for the statistics about to be great-grandfather’s shoot a design.

Travis:
The safety net is pretty good at that stuff. Maybe all should work on that new product innovation.

Aaron:
Yeah, well, my next question was gonna be which family member most inspired you? I’m going to guess it’s your great grandfather.

Wells:
Yeah, my great grandfather. He’s he’s just yet. I never got to know him. He passed away before I was born. But he seems like it was a pretty incredible person. And really, I think what’s really. Pretty incredible is the way that he went about the business rates. He made us a manufacturer and the way that he went about the business was really watching workers doing their job right. So he is watching workers wearing his hardhats, doing their job of race of last.

Travis:
And their inspiration for the helmet came from his service, Christmas at work.

Wells:
Great point. So he had been himself a worker, a assaulter wearing this helmet and said experience and then watching the miners and thinking, how do I protect them? And so that kind of approach, I think is still what I know is still how we approach things today.

Wells:
So it’s really about watching the worker, trying to see what problems need to be solved and then solving for those.

Wells:
So I think that’s why I think did he leave any like diaries behind or any paperwork that you’ve gotten to read or just kind of get some inspiration from?

Wells:
I haven’t found any of that stuff. I have to ask my dad if there’s any sort of diary. I’ve got a really cool schematic drawing of a hardhat in my office that he did, you know, so one of the original, you know, pencil and paper drawings of a hard hat, cause he drew it and it’s signed by him. It’s just one of the original schematic drawings, which is pretty cool.

Aaron:
But now I don’t I don’t I’m sure he had, you know, just always had too much of a movie watcher. But that always seems to be, you know, some sort of passed on documentation of things. I kind of knew there was some stuff like that.

Wells:
I think there is. I think he was a great storyteller and his marriage to his wife, mama, for a very long time. And she passed away before I felt before I was born. But there was a lot of storytelling. They were really fun people. I think they played the piano. They sang. They, you know, entertained a lot. I think they were just really vivacious.

Travis:
So you’re telling me, Wells, that they were safety oriented and fun?

Wells:
I wish I can tell you how it could have happened.

Travis:
Wow. That’s unbelievable. I just learned something. So were they were the Golden Gate Bridge hardhats the same kind of like the hardboiled, like the black shellac? Or were you I mean, you were manufacturing at that time? Is that what was being manufactured? Was that same?

Wells:
Yeah. So so it was adapted a little bit. There were some reinforced ribs that were added to the product for the construction, the Goldney Bridge to protect against those heavier. And those rivets are really heavy. And they were falling from high heights, not the three RIM trademark, but we have now a different kind of the way that it was constructed was I was adapted for the bridge. But, um, yes, we are absolutely manufacturing at that time. And we had machines. There’s this really awesome ad that I have from 1925, which was my great grandmother. We have machines, so we decreased the price of the hardhats because we could make them worth the auction. And anyway, I think that’s a really incredible thing that we have. We have machines now that’s more marketable, right? Technology advancements and we’re gonna pass that on to the end user. And yeah.

Travis:
Yeah, that’s awesome. That’s a good story. Did you did you always know that you were going to have a career in the family business or was it like one day you woke up and it was just, in your view, lightened and said, I’m going to the family business?

Wells:
Yes. When I’d say I think my parents did a really good job tonight, my dad was present and see a CEO and I was growing up and they did a really good job of making sure my brother and I felt that we were neither entitled to work at Bulat nor expected to work at Bullard. Think that’s really important, because what they wanted was for me to just pursue whatever I was interested in. And they wanted to enable me to be able to pursue the highest levels of education that I that I could and that I wanted to and to pursue my interests. So what I would say to that answer is that I didn’t always know as a little kid. I think people who worked with my dad would say that they could tell that I was very interested. I mean, I’m I like to ask a lot of questions. And so as a kid, when I’d walk around the factory, I would have a lot of questions. I’d be really engaged. And we have just the most incredible people. And they’ve been incredible to me since I was a little kid. And so just engaging with them was always fun. And seeing the products and I had a couple of favorite places I loved where we customize the hardhats to really fun, to see all the logos gone and and see kind of where they’re going. And so I always loved that area. And then I also left the quality lab where they would destroy, you know, where we try to test and destroy our products, that we know what they go exactly as. I always loved those those parts of the business. And in those parts of the plant tour, basically, you just got to see that Chelsea did.

Chelsea:
It was phenomenal. It is a amazing company. Yeah. Amazing people as well.

Aaron:
Yeah, great people. Great Stovall. All the folks we work with are. They’re fantastic. Yeah, the facility is awesome. I mean, there’s some synergies I feel between IDBI and Bulat being family owned and operated right out of that culture that we we share as well.

Wells:
So is it really I mean, when we talk about the Bullard family, it’s not about the DNA. It’s not about the bloodline. It’s I mean, it’s everybody works for Bullard and retirees from Bullard. I mean, it’s the whole Bullard family ’cause we all have a part of it. So I’m glad to hear that you guys feel idea.

Chelsea:
Yeah. Like when you went there, you could feel it. You could feel the love. You could feel the energy. Could feel the people they just loved what they did. That’s sad. It’s great.

Travis:
Yeah. I mean, just meet you 20 minutes ago. Your personality is pretty cool.

Chelsea:
Yes. Oh, I know. That’s what I thought when I met her, too. Online early. And you’re a mom. How is this happening? Thank you.

Aaron:
So did you kind of come up? Did you have to sweep the floors? Did you have to work back in Couer? Did you have to work in production? How did you sort of.

Wells:
Yeah. I mean, to answer your first question. So when I was in college, I became then really interested in thinking, wait, maybe this is really the career that I do want. Because I love working with people. Absolutely love our mission of protecting people and hazardous work environments. And so I went to work for an industrial distributor after college. And then I went to business school. And while I was between my first and second year of business school, I came to Bulat. I was sure that I was going to go work somewhere else for the summers, that I could get exposed to something else. But then I also realized, what if I want to go to Boulder and I felt test it out and see if it really, really fit for me as an adult. And if I’m the right fit for it. And so I worked as a team leader that summer in head production. So I was like a supervisor essentially, and had protection for the summer. And we were working. We had crazy orders that summer. So over 10 hours a day is at least six days a week. I was exhausted, was taking a nap halfway home. Stuff like that. I was walking eight miles a day and I loved it. It was my favorite is my favorite job until this one as the CEO. It was like I just loved it. I was in the plant all day working with our awesome people, making our products, helping to, you know, allow the production associates to be able to do their work and and in a better way in terms of, you know, allowing them to focus on the task at hand while I removed some obstacles and stuff. And it was just really it was really, really, really fun.

Aaron:
That’s the grind. You know, that’s that’s where you really learn some things about the company you work for and how to be a leader. I think there’s there’s still a lot of those people that you worked with back then say, oh, absolutely.

Wells:
Oh, yes. There’s a lot of them still around. And one of them just died. She’s now a group leader of our fire of our fire production area and just celebrated her 25th anniversary. And I was telling her, you know, you’ve taught me so much about giving me that opportunity that summer to really learn as a team leader. So.

Aaron:
Right. I was I was blown away when I visited there as well last year. For the BDU, you know, some of the tenured people that are there have been there. Longtime. Yes. And that speaks volumes to a company.

Wells:
Know, we have one woman who just celebrated in June, her forty sixth anniversary of valor. So, wow. She’s the longest standing employee, which is pretty awesome.

Aaron:
That’s really cool. Great. So we’ll move into more of the industry and the product a little bit. So how do you see how safety has evolved over the last 100 years? I know that’s a long time. That’s how long you guys have been around. Right. There’s been a lot of evolution, I guess. What were some of the some of those advancements and what are those things that you’ve seen in the last hundred years? Not you personally, but Buller.

Wells:
So I would say that one of the things that we’re most proud of at Bullard is that safety is really in our DNA. We’ve been making safety equipment since before safety was required. So it’s really progressive work places and employers who were buying hardhats and then buying respiratory protection because they weren’t they didn’t have to.

Wells:
And so OSHA, which, you know, was signed into law December 1971, into law in 1971, that was pride, one of the biggest advancements, I guess I would say, in safety in terms of employer, the government recognizing that employers really had a responsibility to its requirement. Yeah, it was a requirement that you really employers had a responsibility to their employees to keep them safe on the job. But that was really important. And so you’ll see, you know, there were a lot of manufacturers that came in to be came into the industry after OSHA because I was that opened up a lot of opportunities.

Wells:
What we’re really proud of is we’ve been around since way before that since 1888 and then manufacturing since 1919. So we’ve been feeling that safety was really important to players from the beginning.

Aaron:
Right. Right. Many times I was in the U.S. Navy and what they always said. Thank you. Thank you, sir. Thank you. Thanks for that, everybody. We have a lot of what we learned was because somebody died. OK, so all of our publications and our procedures and the way that you kind of approach everything. There was an accident. Something bad happened which turned into this new procedure and new process. My question to you that that being said, product wise. Is there a single development over the last hundred years, product related that totally changed it outside of the hardhat? I mean, we know about that one, but would you pinpoint something that was kind of like a revolutionary piece, Bullard or not? I’m just. Safety industry in general.

Wells:
Yeah. So in terms of product. But it what I would say to that as. Material science technology has been one of the biggest advancements. So if you think about the capabilities of products today, they are very much enhanced from the original products.

Chelsea:
I mean, when you think lighter, stronger, later is stronger.

Wells:
When you think about even just plastics like these hard hats, these are in front of these hard hats are very different from the canvas and leather hard-boiled hardhats earlier. The kind of baseline technology of having a suspension and having a shell is still the same, but the material science allows them to be really, really good, really flexible, more affordable tools that more people can have fun can have the safety equipment that they need. And they’re very protective. So you mentioned that the Navy in deaths, I mean, the standards were originally so there were original standards many years ago that weren’t required by law necessarily. And those were about, you know, hammers dropping from six feet, you know, just kind of real life protection kind of examples.

Wells:
And in the 1950s, the military did some studies on cadavers and about what’s the amount of force that it takes to break the neck or break the brain, which is pretty not very pleasant to think about. But that’s right. Right. This could have not harmed by the standards now are really about the forced transfer. When I think about head protection, which does have an effect on respiratory protection, too, that has had protection, but it’s about the transfer of force to the neck column so that, yes, it’ll hurt. You’ll be, you know, sore, but you’ll be OK.

Aaron:
You’ll little be able to survive. Exactly. You won’t be a publication or a new safety standard. Exactly. Exactly. Yep. Well, cool. How do you view today’s safety industry? How do you think of the health of the current, say the industry is today?

Wells:
That’s a concussion. So I think that the mission to improve worker safety and workplace safety is never ending an ever evolving. I think there’s still a lot of opportunity, is there? I’d say that there’s a lot more awareness right now, the importance of safety. And I think corporations and players recognize that you can think about that, the acute incident of safety. You know, when you think about, oh, protecting from an object falling on your head from breathing, something that could really harm you.

Wells:
To kind of a more overarching theme of safety, which is really productivity is really important. You know, if you want to you want workers to be productive and there are safety equipment only to be effective when it’s worn. Right. So if you want to work or to feel confident and productive that be comfortable. And so the price of protective equipment really has to be comfortable as the easy to use. It also has to be designed in a way that makes people feel good about wearing it. So I think the safety industry is really responding to those trends. And I think workers have a lot more influence over what kind of safety equipment they wear. I mean, people are doing research on their own. They’re aware of what’s out there maybe and what they want to look like. And they have a little bit more say. I think the safety industry is responding to that.

Aaron:
All right. Those are great points. I mean, most of the time when we people we see people with a lack of safety equipment or procedures. It’s because it’s not convenient. It’s not comfortable. You know, everybody I don’t know today, maybe they want to always be as comfortable as it is like sitting at home in their bathtub. And it’s not realistic. You know, there is some inconvenience to it at times, but the better we get at it, the safer people are going to be. And to your point, the more productive. Absolutely. They’re not going to be very productive if they fall off a ladder or something falls on their head or they’re overheating or what have you.

Wells:
And we recognize as a personal protective equipment manufacturer, we recognize that people don’t actually want to wear PPE. I think we’d all rather where I flip flops and t shirts and and whatever, not where we’re at all. And I. Chelsea, but easy. But it’s but it’s necessary to keep you protected. And that’s really important. Again, as I was saying, that ease of use, the comfort and then the design, too. People want to look they want to look good in it. And look professional when they’re going to look great.

Travis:
I mean, they’re personalized. I mean. So I think the fact that you can kind of modify things to make it look like something you would want to wear or at least maybe something that’s designed for your company to more personalize it. And then that company having, you know, the best practice that you’re required to wear, A, B, C and D. Absolutely. But they look good. Yeah.

Aaron:
He’s referring to the hardhats on the table here. They know we are videotaping in case you’re not only audio. They look fantastic.

Chelsea:
They’re beautiful. And they’re run by the best colors.

Travis:
They’re part of that. There they are.

Aaron:
So among other safety companies, are some of your competitors, wells. Sets Buller apart.

Wells:
Ok, so Bullard we are really customer focused. But I was talking out of about my great grandfather and how he approached kind of innovation and differentiation was really about. It was really customer driven.

Wells:
And we still very much have that have that focus in mind in terms of really looking at our customers, watching the end users and thinking about what problems do they need solved. So I think that we do that really well. We really engage with users in their specific use cases and applications to really try to understand what problems they’re facing. What met in need of what met an unmet needs do they have and how do we solve for those in a differentiated way? Right. In a way that truly better solve their problems. That allows them to be safer and more productive and go home safely. End of the day. Right.

Chelsea:
Ok. So I was just up at Bullard and it was amazing. So I kind of know some of the things you’ve have coming out.

Chelsea:
But what new products have Bullard brought to the spray foam market? I know we saw the new helmet coming out, the cooling tubes. You know, a lot of this stuff, new mass. What what what are some things that you guys have going on?

Wells:
Yes. Specifically for the space market. One thing that we think is really important in the space market is it can be really, really hot. The work, the spray phone and solar as doing can be really hot. And so we have a couple of solutions. USCIRF response. So we we do supplied air respirators and then also powered air purifying respirators that from space some are get more popular as the supplied air. And we believe in mobility. So we’ve got pumps that allow you to be pretty mobile with the works that you can then hook up to a loose fitting face piece that provides respiratory protection and also doesn’t require fit testing and also allows you to have whatever kind of facial hair you wish to have. Selassie like for you to get analyzing how that facial hearing allows you to be really comfortable and have positive air pressure all around your face, which provides some cooling, provides comfort, doesn’t tax your heart and lungs. So we’ve got what’s known as an ice pump, which is something that allows for a mobile worker. If you’re not by a compressor where you can bring this pump and actually use a vortex cool to cool down and allows you to have really cool air going into that helmet, cooling the air around you, 15, 20 degrees.

Chelsea:
Yeah. Oh, yeah. One of those right now. How many? It is a little warm in here, but on a hot day. Oh, my goodness. Those things are lifesavers when you’re spraying foam.

Chelsea:
And you know, for those guys who are in the attics, intense heat exhaustion and there’s so many safety things, you know, it’s just horrible to be up there.

Chelsea:
So, yeah, I mean, a cooling device is absolutely necessary, in my opinion. And with you guys, Bolar trailor.

Travis:
Here are some of those. Yes, absolutely.

Wells:
Yes. Our 48 foot long trailer here that shows all sorts of pretty impressive. And it it’s really fun to walk through and really helps kind of tell the story and allows you to try on products using compressed air, using a pump and monahan’s on demonstrations.

Aaron:
It is great. It’s a game changer when you can actually don a piece of equipment and feel the difference. You know, a cooling device, you get a 30 degree delta to get out of it. And I always equate that to it’s 100 degrees outside and you’re sitting in your house and it’s 70 degrees and at 70.

Wells:
And, you know, it’s really a lot of people call it an air conditioner. Right. Right. Is it a huge difference that really allows you to be comfortable and effective in your work?

Aaron:
Yeah. I’m curious. You guys have any kind of studies on increased productivity? I know it’s a it’s a broad brush, but I’m just curious. You know, that’s something that is a selling point for sure. Oh, yeah. You know, cooling devices, keep your guys cool and safe and and productive. I’m I’m just curious if you guys have ever I feel like any kind of data or or done any studies or anything.

Chelsea:
And I feel like that if we had that data for the business owners, they’d be more likely to be like, hey, you guys need to wear this. I think this is very important. It’s a necessity.

Wells:
And that’s a great point. I think we’ve got a lot of anecdotal evidence for that. I was just talking to somebody yesterday about, you know, people working up in an attic, spraying foam and having take breaks every five minutes. You know, it’s 102 degrees up in the attic and having to take breaks because they’re just too hot in there. And their cartridge mass. They were just too hot and having to take breaks. I mean, if you could I do some math on that. Interesting that I could study. And that’s a great idea.

Aaron:
Yeah, it might be. So, I mean, a hundred and two could be an understatement.

Chelsea:
Georgia one hundred and forty. Well, not to mentioned the product itself. Your spraying is 100. Oh yeah. Right. You’re adding to it. Yeah. Plant.

Aaron:
So now we’re going to step in to the safety minute. And today it is brought to you by none other than Bullard. So today’s Safety Minute. We’re gonna talk a little bit about spray foam, rig safety. And I wanted to bounce this off you, Chelsea, real quick. What are a couple of just quick safety items that that we feel should be in every spray foam rig pressure system?

Chelsea:
I mean, you know, first aid kids, fire extinguishers, you know, the list goes on and on.

Aaron:
Yeah. Smoke and fire alarms. Oh, yes. Smoke, iron oxide. Yep. I wash first a glove suits.

Chelsea:
I mean, any kind of PPE SDS SDS. Yes.

Aaron:
Yep. Bold face mask. Yeah, absolutely. And all that stuff. So just a note, make sure you have some of these things on your rig. It’s always better to have them and not need them than need them and not have them. So if your spray foam rig is on fire, which they burn up, we’ve identified occasionally and you don’t have a fire extinguisher there. Gown. That’s a bad day.

Chelsea:
Yes, she’s gone. So, so well, as if you could leave our listeners today with one thought or one piece of advice or wisdom. What would it be?

Wells:
Mm hmm. So I would say that I think education and training is really key. I think that’s what you guys you guys do that really well in terms of making sure people understand the full context of what they’re doing. From our perspective, it’s about understanding the full context of hazards and how you can protect workers from those hazards. So I think I would just leave the the audience with I, you know, really think about how do you understand hazards that your workers are being exposed to. And that’s wholistic from the environment to this specific acute situational hazards that might exist. And how do you then educate and make it easy for your fellow workers to be safe? That again, the goal for all of us is till our kids go home safely at the end of the day to their loved ones. And. And so how can you think about the hazards and understand those and then communicate those and educate so that people understand the why of why it’s important to protect themselves from hazards and then make it as easy as possible to do so, right?

Aaron:
Yes. Yeah, that’s great. A couple takeaways, actually. I had another quick question. Correct me if I’m wrong. I remember at Bita you you talked about how people’s heads were smaller back when the hard hat was invented. Is that right?

Aaron:
Is that true? Yeah. So we’re getting smarter, right?

Wells:
It has a lot to do with nutrition. So our heads are actually getting larger and are getting longer. Really aren’t back there any longer from front to back. And it’s a lot about nutrition and diet, nutrition.

Chelsea:
So now is now looks like a man here in 100 years. Look, you know, they they say like kids are getting those little horns in the back of their head, like their skull.

Chelsea:
It’s hard to know that your skull is actually create like a little more piece of bone in these children because they’re like this all the time. Oh. So now I’m like, wow, I wonder if I’m like 100 years or we’re gonna have to change the back of this heart. Interesting. Well, we’ll be we’ll be watching that.

Wells:
We’ll be paying attention for that. It’s on video.

Wells:
It’s documented. It’s documented. Yeah, that’s the words. We’re growing hard. Look it up. Well, maybe edit that part out.

Aaron:
No, that was some great facts. It’s an amazing story. I love the film. I love American family business stories like that. I just read it in Golden Gate Bridge and, you know, inspiration from being in the war.

Chelsea:
It’s a cool story and it’s a phenomenal place if just to go visit it and see it. You got find his diaries and older.

Wells:
Now I get. And, you know, we feel really lucky. I mean, we get to think about this for the long term where hundred twenty one years young, we say a fifth generation. And my Jarvis’s steered this into the future.

Wells:
And we’re really proud to be family owned and intend to be that way for for the long term. That allows us to really think long term. And safety is all about long term has, you know, protecting people for the long terms and fun high line fire safety as finding fun.

Chelsea:
Safety is fun.

Aaron:
So. Well, hey, thanks for being here today, Wells. We’re thrilled you could join us. Thanks for the support. tie-dye. And we look forward to a long partnership with Bullard. I think I think you guys are doing some awesome things for our industry and helping make people more comfortable stay safer so that our industry can grow as well. So thanks again. And please listen to our value and drop us a line.

Aaron:
Let us know what you want to hear about any topics, any products, things like that we can talk about. And we’re happy to do so, but we may not know about it unless you tell us. So that’s it for today. Hey, great job, Travis.

Travis:
I appreciate it. Good to cohosts and a great guest.

Wells:
Thank you. Yes, this is certainly fun. Yes. Thanks. You, Chelsea Evans. My pleasure. My pleasure. Yeah. Time to get out of this boiling hot room.

All Speakers:
You’re awesome. Ventilation music A? Yeah, we could use some spray in here thing. Yeah. HMX says in simple terms that maybe should have done it that way. We should have out a great video.

Aaron:
So again, I’m Aaron Franzine at IDI. Thanks for listening. And set them up, Joe.

Aaron:
This has been a presentation of the cellar door network for more podcasts that you can take out into the street and turn into money. Visit Cellar Die Network.

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