Season 3 Episode 20
Marcus Lemonis, Relationship-driven entrepreneur

Success and setbacks are part of the journey

Chris Allen: All right, well, I would like to welcome and is it Marcus Lemonis, Lemonis? I’m going to do that again once I get that.

Marcus Lemonis: It’s funny that you brought up my last name, and I know we’re going to go off the rails here for about 10 seconds, but it’s the one thing that I think businesses struggle with more than they realize. When they come up with names for their business that people can’t pronounce or type or spell, it’s a problem. And so I think I’m just going to change my last name to, I don’t know.

Marcus: Something easy to say.

Chris: I love that.

Marcus: Marcus Marcus.

Chris: Marcus Marcus.

Marcus: That’s it.

Chris: Well, that is a great segue to all of the business conversation that we’re going to have, because you’ve had tremendous success really revitalizing businesses. You’ve worked as a CEO of a variety of companies, helped develop and grow other businesses as well. I’d love to know what was the spark, that first spark that caused you to leverage your entrepreneurial experience to really help others be successful?

Marcus: Well, I want to clean one thing up. You said I’ve had successes, and there is truth that there’s been successes, but there’s been the opposite of that, too. And I think it’s really important, as people think about their own journey in business, to understand that there’s going to be wins and there’s going to be losses. And when I was a kid and when you were a kid and we’d go play little league, soccer, baseball, whatever, we’d get the participation trophy, most improved, which means you started and then you suck less in the end. That through any entrepreneur’s journey, especially when you’re reading books or going to events or listening to podcasts, that the best ones to go to to read, to listen to are the ones where you’re getting both sides. Because in that spectrum, somewhere in the middle really is what reality is.

Marcus: And there’ve been successes, but the successes have been outnumbered by failures. And that surprises people. They’ve been outnumbered, maybe not in dollars or in scale of loss or win, but the frequency. And think about it like a baseball player. We get up to bat, nobody’s batting more than 500. If they are, they’re Hank Aaron or whatever else. I don’t even think Hank Aaron batted 500. So I think that’s maybe a good starting point for anybody that’s thinking about, “How do I find something in my life that’s going to give me what I need? And what I need is business, and what I need out of business is success. What’s that journey look like?”

Chris: Well, where did it all start for you?

Marcus: It started actually when I was a young kid, and an awkward young kid. I was, really quickly, born in Beirut, Lebanon, lived in an orphanage, adopted by an American family in south Florida — Miami. And only child, so you’ll see little ripples of only child syndrome seek in, when I say that my name is Marcus and I don’t need my last name, I think that I’m Madonna, but I’m not. And really trying to find my footing in life. And I was always an awkward child who turned into an awkward adult, and the only time that I don’t feel awkward is when I find myself in business because it’s a safe place. And as an early kid trying to stand out in a crowd, you see other kids in your neighborhood or other kids in school, and we think about it even as adults, who were excelling at things that we’re not able to excel at.

Marcus: And business was the one thing that was rooted in math, and it was rooted in communication, it was rooted in the ability to make an argument or explain something and articulate an idea. And that was a very early skill that I noticed, largely because I would talk to myself a lot, and I would stand in front of the mirror and I would present ideas to myself that I thought were crazy. And I would learn how to do that in a way that would gain acceptance from other kids, gain acceptance from my parents, gain acceptance from other families. And the first thing that I ever did is I was a drug dealer.

Chris: Tell us about this.

Chasing success comes from a desire to be understood

Marcus: What I learned in that process is that in the general marketplace, there’s always an opportunity for capitalism, and it’s really taking a minute to understand what the need is and what your need is. Most people think there’s a need and I’m going to fulfill it. To me, there’s two needs: my need to solve a problem for myself, and everybody else’s need to want a product or a service. And to try to figure out how to bridge those as a sixth grader, fifth grader. My parents would say to me, “You need some friends. You need some sports.” And I would say, “No, I just need to figure out how to make more money.” And my parents would ask me why, and this is something that I’ve never told anybody ever, that the reason that I was striving for that making money is that I wanted independence from everybody, including them.

Marcus: And so oftentimes when I meet people who want to get into a business or have an idea, there’s usually a root, not a cause, but a root prompt that makes you want something. You were rejected, you have an aspiration, you want something, you need something, you want to solve something. And that, for me, was I wanted financial independence. And I didn’t need to be rich and I didn’t need to be on a plaque, I just needed to be able to do my own thing and come as I wanted to and leave as I wanted to. And my mother used to laugh at me all the time, she’d be like, “You’re in sixth grade, you’re not going to have financial independence.” And it went from me being a candy dealer, which I’m very proud of, to me opening up a lawn business. And the reason I went into the lawn business, I can’t even believe I’m telling you guys this, is because I wanted to understand.

Marcus: I understood now how to sell a product, and thought about... The internet didn’t exist, so you couldn’t go to the distributor and pick up extra points of margin. Then I thought, “I’m going to get into a business where I can’t sell something that you can eat or put in your hand.” So I got into the lawn business because I wanted to learn how to sell a service. And I would knock on doors and these homeowners would answer, they’d be in my neighborhood, and I think I was maybe 11 at the time, and I would have a pitch. I would say, “First of all, here’s a written assessment of all the things that your current lawn company is doing wrong.” Okay? I would tell them, “Your edging’s bad, I don’t think your weeding’s good, your fertilizer in the backyard isn’t good.” And in some cases I would vamp.

Chris: Yeah.

Marcus: Because I was 11. And I would make a little bit up about “Your grass isn’t the right tone of green and it doesn’t look healthy.” And I asked them, “How much does your lawn company charge you for this terrible job?” And they would look at me and say, “Well, you’re 11 and you have no equipment.” And I would say, “I have equipment. In fact, it’s coming directly from the factory.”

Chris: This is a sales conversation. “I don’t have to have equipment.”

Marcus: It was coming from Sears, my mother was helping me figure out how to finance it, but I made it sound legit. And what I learned in that moment is how to find a problem, how to make a pitch, how to be told no most of the time, and how to overcome objection, and how to solve for that. I ended up having a really lucrative lawn business.

Chris: Yeah. You had one very compelling thing, which is your age. I have to say there are probably people in my neighborhood that would be like, “Yeah, you can mow. You can do it.”

Marcus: No, but I would go dressed in a sport coat and a shirt, and I would be dressed like I was the local banker. And I didn’t really understand that my look and the job I was pitching needed to match, didn’t match.

Chris: Yeah. This is a business, therefore I needed to look like I was in business.

Marcus: I thought people would take me more seriously at 11 if I had a sports coat on.

Chris: Okay. Well, seems that some collection of that worked.

Marcus: I made $52,000 clear as a 12-year-old.

Chris: In a year or total?

Marcus: In one year.

Chris: Wow, that’s amazing.

Marcus: In the lawn business. So you were scoffing at me just a little.

Chris: Oh, I’m just saying. So here’s the other thing is the amount of connected experience. So I have four boys, two of them have tried very similar things, and it’s fun to hear you say the level of success that you’ve achieved. And the kidpreneur experience of my boys and myself is, I’m going to say, further south of the success that you’re expressing. And it’s just fun to listen to somebody who did something, made $52,000 as a 12-year-old. It’s awesome.

Marcus: Yeah. I didn’t tell you about all the stuff that didn’t work. In between, I was trying to sell worms because there was a creek near my house and I thought that people needed to fish and needed to have bait. That didn’t go well. I didn’t tell you about the time that I went and bought sodas and waters thinking that I could resell them. That didn’t go well. I can tell you about all the things that didn’t go well, and people are probably laughing wondering why they’re listening to all these little things. But the truth is that who we are as people, there’s the DNA and there’s our brains, and then there’s the fabric and the knitting that makes you who you are today. Those little teeny things are part of the fabric, and those successes and those failures and people scoffing, and me using rejection as a motivator is part of that.

What’s in a name?

Chris: Absolutely. Well, you have done a lot of things, but you have a — I’m going to say — nickname. Right?

Marcus: Okay.

Chris: And I have to know if this nickname was given to you or if you were just like, “Man, this is just how I describe myself.”

Marcus: Okay.

Chris: I have an opinion of what I think it would be, but I’d love to hear [from] you. Where did the name Business Turnaround King come from?

Marcus: Somebody made that shit up to try to create some sort of marketing buzz. I don’t like names like that. In fact, when The Profit was first established as a name, I hated it because I don’t really love the self-proclamation of it all. And I do worry in those cases, when people put labels on things like that, that you’re setting yourself up for an expose, because everything doesn’t work. Be like, “Oh, see? Everything doesn’t-”

Chris: He’s not that.

Marcus: “He’s not the king, he’s not even a prince. The guy’s a pauper.” And I think too often business owners get very hyper focused on being the XYZ or the YDQ, and I’d rather you just be you.

Chris: Yeah, yeah. Well, the—

Marcus: Marcus Lemonis, isn’t that how you said it?

Chris: Marcus Lemonis, yep.

Marcus: Isn’t that how you said it? Yeah.

Chris: The thing is that there’s really two parts to that, that nickname. You got the business turnaround part, and then you got the king part. So if the king part goes to the side, what are some of the things that as you went from the spark that we just talked about into turnarounds, how did that emerge as your thing?

Marcus: Well, I needed to turn my own life around and I needed... Usually you start from something that you understand, and you recognize the difference between what’s going well and what’s not going well and how things need to evolve. And turnaround is really a fancy word for reinvention, restart, start over, a variety of things. And I am much better at taking something that isn’t working and dissecting it than I am at starting something from scratch. I have never, ever, ever been successful, and have a ton of humility and admiration for people who take something in their brain from a white wall with nothing there and make it grow. That is not me. I don’t have that in me. I want it in me, I’ve tried to study how to do it. I haven’t been able to crack it.

Marcus: So the turnaround piece is really about taking somebody else’s good idea and helping them get out of their own way. Because oftentimes a good idea is always a good idea, but the execution of it, the implementation of it, the thesis behind it, the plan around it, the capitalization of it, the go-to-market on it, the distribution of it, the making the sausage, it’s hard. It’s hard for creators to take it that far. And so for me, what’s always worked well is I could take a really creative person with ideas that are infinitely better than mine and then take the way that I think about things and put those two things together, and that’s usually what a good business needs.

Marcus: It needs that balance, I need that balance. And when you go in and you see a founder get the business to a certain point and then need to bring in a true president or whatever they want to call them, that to me is the sign of success, the acknowledgement that it does take more than one person. Nobody in our economy, nobody in our society can do all of those things. If they are, they’re a unicorn. But the truth is they’re kidding themselves and lying to others.

Chris: Well, you were talking about your ability to deconstruct the machinery of business, because it’s a lot of things working together to have the imagination, the idea, to have an outcome that actually does things for people, and all of those pieces in between. So you have had so much success on the show being able to do that exact work. What led you into the moment of being able to do the show? What was happening in between, prior to the show, that gave you the chops to be able to do that as entertainment?

How self-awareness can build connection

Marcus: Well, I had always, in the previous 10 years prior to the show, done all those things, so it was in the zeitgeist for me to just do those things. The television show part was actually easier than I thought it was going to be.

Chris: Really?

Marcus: Yeah. Because if you have a high level of self-awareness but not a high level of vanity, you are aware of what’s happening around you, but not so much that you’re worried about what people are seeing or thinking. And what had worked for me for years is this need to have interpersonal relationships with people. And I think maybe as an only child, when I would meet somebody, I was yearning so deeply for a connection with them that I would become hyper-focused on their background and where they were from and who they were, but with a true, absolute authentic appetite to just learn from other people. And if you see other people as fountains of information, fountains of wisdom, fountains of experience that are going to make you better, then... They always say a young child can learn more because they’re like a sponge.

Marcus: I love being a sponge, so when I meet people for the first time, I become enraptured by them. And I hate to make it sound like I romanticize it, but I do. And maybe because I’m an orphan again, my parents are both gone, I’m an only child, I don’t have kids, I gravitate towards people and their story and what they have to offer. And I spend so much time listening and watching and exposing my own frailties to them that I give myself permission, even when they don’t, to dissect them and try to help them fix what I think could be holding them back. And I’m not always right, but the reason that the television works is because I truly-

Marcus: But the reason that the television works is because I truly do become really one with that person. It sounds corny, but it really has been the thing. I don’t think about the entertainment value. Even as you and I sit here, I forget that the cameras are here. But I’ve seen other people try to do it, and they become so fixated on, “Does my hair look right? Did I say that the right way?”, which is why in the beginning I’m going to keep referencing the mistake that you made and your need to want to edit it, is that we all are in this world where we feel like everything needs to be edited and it needs to be polished. And I would say to you, no more edits. Let it be.

Chris: Yeah, you hear that?

Marcus: Let it be. You may have to edit for time, sure, but let it be, because I think people that listen and watch are more captivated by the rawness and the silliness and the mistakes-

Chris: Totally.

Marcus: …Because it does one thing. It gives them permission to be the same.

Chris: Well, I think I call that authenticity, right?

Marcus: Okay. It’s probably the appropriate word. I put a bunch of shit on it [inaudible 00:25:15].

Chris: It’s super good. No, it’s super good. I mean, I think holding space for people to be themselves is really valuable. And the thing that I really like about what you-

Marcus: Do we do that as business owners?

Chris: Not often.

Marcus: Why?

Chris: Probably there’s a lot of distraction along the way. There’s a lot in the way. And that’s why one of the things I liked you said, trying to get people out of their own way, but in business, I don’t think the pursuit of connection is very common.

Marcus: Why? Why?

Chris: I would say... Let’s put it this way, and this is something I’d love to chat with you about, is businesses that value things. A lot of what you value is at the center, right? It’s kind of like where your treasure is, there your heart will be also, right? So businesses that operate from true core values tend to make space for things that create connection and people that are valuing the profit margin, how the spreadsheets look, how the business is orchestrated, the successes, what they’ll get if it’s successful. There’s a lot of things that can be at the center. And my quick explanation, I would say it’s probably not necessarily at the center of what every business values.

Marcus: Well, those things that you mentioned are necessities in business and anybody that tries to make it just about one thing or just about another, just about feelings and relationships, we’re watching the Hallmark Channel, and I’m not into that.

Chris: A hundred percent, but it’s the ripples, right? If you got something at the center, there are other things that happen.

Marcus: What if you just made one thing the center?

Staying constant in relationships is key

Chris: Yeah. Tell me about that. I don’t know.

Marcus: Just make your relationship with people the only thing, and then the ripples around it are the necessities that the business has to have for it to be a business and not a nonprofit. And if it’s not a business or not a nonprofit, then it’s just a friendship and those things are fine. But once you start to go from a friendly relationship to a nonprofit relationship to a profit relationship, the complexity of that has to change by definition, because the North Star in all of those things are different. And the North Star in business, without suppressing the need for good interpersonal relationships, the North Star in business is success.

Marcus: And success in business is defined as buy something, sell something, buy something, sell something, period. And it could be a service, but there is a transaction involved, and that transaction has to be efficient, profitable, authentic, good for both sides, et cetera. In the absence of those things, it’s not a business. That doesn’t really change the necessity for the relationship to be constant.

Chris: So why do you think that doesn’t happen? The relationship or the authenticity thing that we were talking about, why does that not often happen in business?

Marcus: It rarely happens in business primarily because the transactors have a predisposition of what that relationship is supposed to look like and a predisposition that you don’t need to get to know people that well and it’s just a transaction, and why do I need to care about the guy’s kids and why do I need to know that the business is struggling from COVID or whatever it may be, or that the supply chain issues have messed them up. A lot of people are just transactional in nature because that’s how we’ve been trained to be.

Marcus: But even the biggest businesses in the world, the largest JP Morgan, Amazon-type businesses in the world, fundamentally still distill down to a relationship between the man or woman that runs that business, his cohorts that truly run the business on a day-to-day basis, and their relationship with suppliers and customers and vendors and employees. It really all just distills down to that relationship.

The art of pushing back

Chris: Yeah, yeah, yeah. Well, you’ve got, say in the category of how you’ve been advising small businesses, there’s a principle, right, of the people, process and products that has really emerged. Talk to us a little bit why the people thing is first and maybe a little bit about your core philosophy.

Marcus: I’ve always had that philosophy, but I was never really able to articulate it as well until the show came about. And I felt this necessity in 42 minutes to deliver a clear message to a third-grader. And that’s how I built the whole show, which is why I had cartoon-like graphics, because as kids, we learned on flashcards. And so my infographics are a form of flashcard.

Marcus: And I remember a network executive saying to me, “This seems too elementary. You’re insulting the viewer.” And I said, “No, quite the opposite. We’re bringing more viewers in who want to feel smart,” and even the smartest of people, including myself and yourself, we don’t know everything.

Chris: For sure.

Marcus: And we don’t want to admit it. And so when I looked at how do I take those three things, the people, process and product, it was really the simplest way for me to say to them, “Okay, we have to figure out what it is that you’re bringing to market. Are you bringing a lawn service? Are you bringing Jolly Ranchers?” So it’s a service or product. And is that service or product even relevant today? And so if you’re selling eight track cassette players and you have a great process to do that and you’re an amazing person, you treat everybody great, I’m just telling you now, it’s not going to work out because people don’t even know what that is anymore. So you [have] to have the right product that has market relatability. It has to be priced properly inside of the markets because everybody’s a capitalist when they’re consumers, and it has to be relevant. So check that box. Fine.

Marcus: The process isn’t just about how do you make the sausage. It’s what’s the supply chain look like? How do you bring it to market? What are all the inputs that go along with that? And the process of understanding financial forecasting. And you get into some technical things around business planning and inventory management and cash flow management that are necessities. And while they’re boring and they’re not entertaining, they’re necessary. They’re just absolutely necessary.

Finding inspiration in unexpected places

Marcus: So what I try to do is I try to make the process fun. So if I go into your pizza shop that’s a total wreck, we’re going to make pizza together and I’m going to try to do the ABCs and the 123s, and what I used to do, crazy that I’m even telling you this, my favorite show in the whole world, in the whole world is what? Just take a guess.

Chris: Sesame Street?

Marcus: Yes.

Chris: Okay.

Marcus: It is Sesame Street. And I used to watch an episode of Sesame Street before I started every episode.

Chris: No way.

Marcus: I did. And the reason that I did that is to-

Chris: Wait a minute. At what point? Before you first film-

Marcus: The day that I’m starting a new episode, every single... I did 120 something episodes. The day before I started the first day of that new business, I would watch an episode of Sesame Street because it was a constant reminder that I learned on Sesame Street. We all did, but it was the simplistic nature in which they delivered things and they used characters, graphics, pictures, songs, numbers, things that all of us could process.

Marcus: And that’s really where people, process and product came from. I had it all in my head, but Sesame Street was my inspiration because I thought that’s how people learn. So when I got to the process part, I realized that I had to make it fun because they always made learning fun like, “Let’s walk out and sit on the curb. Let’s go to the park. Let’s watch the different characters.” And that’s really why the infographics came to be. I’ve never told anybody that. They were born out of Sesame Street.

Chris: That’s amazing.

Marcus: That worked for a hundred years. And then I started to think about what is at the center of making sure that the product is relevant and that the business owner thinks about it the right way and asks the right questions and does the right research, has the right process. It all really came down to, is that business owner’s brain, heart, soul, are they interconnected in a way that’s healthy or is there something fractured about the way they look at the world, their motivations, their approach with people, the hierarchy of how they see owner, boss, customer? Is all of that right?

Marcus: The truth is, in every single business that I ever went to, there [were] a few that I was truly a subject matter expert. There were a few of them where I would just be like... I could close my eyes and just one, two, three. But in many cases, and you and I have talked about your musical background, when I went into a drum business, I’m not a musician. I have no idea how instruments work. And so I have to apply these really basic principles to what’s wrong, what can be improved, and how are these people barriers to those things? How are you a barrier to your own success?

Marcus: And what I think people love about the show is that it really is about the human psychology of business. They got to watch some fun stuff and they got to watch some crazy people do some crazy shit and the entertainment was there. I had to go along with that ride of crazy. But if we just distill it all down to one basic thing is how did that business owner approach life, approach his family, approach his people, approach his motivations, him or her, and how did that business come to life or fail?

Chris: Well, I mean, the amount of distractions that get in front of any of those business owners, it can be absolutely themselves. And then you have things like COVID, right, where you’ve got a moment where you’re like, “ In order to continue, I have to do something different.” And there were businesses that had things that they could leverage, and there was other that had to figure out what levers they had to pull or how to reinvent or what to do in the situation.

The difference in those who understand how to pivot — and those who don’t

Chris: So help me understand how you, in your business and life, how did you handle the COVID thing and then how did some of your work really translate to helping businesses get through that and actually win through that?

Marcus: Well, COVID was an amplified version of everyday challenges. It was pretty simple in terms of the challenge that was in front of people. Go home, stay home, don’t do this, don’t do that. So that was simple, but it was exaggerated. And when I talk to business owners about COVID, ones that did very well in learning how to pivot and understanding that the go-to market strategy had to change and understanding where their deficiencies were on technology, how they were going to think about bringing their product or service to market in the face of obstacles that they had never seen before, it really wasn’t any different than what you deal with every day. It just was amplified and it was across everybody.

Marcus: So there was this unification of solving problems, but it was riddled with the economic challenges that are behind it. Nobody was ever prepared with enough working capital and enough lines of credit and enough answers to questions that nobody had ever thought about in a matter of... I think it was March 17th, 2020. Literally I think it was that day where everybody’s like, “Okay, that’s it. We’re locking it all down.” And people were like, “But wait a minute. What happens now? What do we do?” And you really saw this separation between people that understood how to be resourceful, understood how to pivot in a bad situation, understood how to change their whole business model.

Marcus: I mean, it’s the razors to razor blade or that whole analogy. You have to really think about how to change your whole world. What I learned through that process is overcorrection, overreaction. I also learned that it was okay to rely on other people to help solve the problem. It was also okay to realize that everything wasn’t going to be okay for a minute, and that there [were] going to be sacrifices made. A lot of people got laid off. A lot of people lost their business. But for a lot of people, actually most people, it was the greatest business problem that ever happened because you now had banks and the government giving people do over money, clean up your balance sheet, get the right inventory, do over money. Never in the history of business had we ever seen do over money.

Chris: Yeah, or at scale like that for sure.

Marcus: No. So for my primary business, which was the RV business, it was a real windfall. For other businesses that I had where consumer human interaction, physical interaction were required, some of those businesses they just closed. And what I didn’t like that happened in that process is that people would take a failing business and blame it on COVID. And I was like, “Well, it wasn’t COVID. It was you. You didn’t have your stuff together.”

Marcus: COVID is I think a good wake up call for all of us as we think about our everyday challenges, tariffs changing, supply chain changing, political things changing, interest rates going up. Those are all things that are bullets that businesses have to deal with. When you go from a working capital line that’s $100,000 in your business at 2% interest, which is not a lot of money in the scheme of $100,000, to 9% interest, and you multiply that 100,000 to a million to five million and your cash flow is already tight, it could be game over. So we learned a lot about that too.

Chris: Yeah, yeah, and I think one of the things that was awesome is to see people really lean in and also people come together during that time. And I think it would be good to hear you talk about... I just want to talk to you about betting on yourself because I think that there’s something to that with pretty much everybody who chooses to start and/or run a business, is there’s some betting on themselves that has to happen.

Chris: And one of the reasons that I wanted to do this podcast is because I have a huge amount of empathy, and I’ve been a business owner three times. I have a lot of empathy for what it feels like to be close to missing payroll and to be responsible for those things and the weight of that responsibility and to have dreams and want to have an outcome and figure out, “Man, how do I get all of these steps in between to try and get to this outcome?” So maybe tell us a little bit about how you think about betting on yourself, how maybe you’ve done it, and how maybe you also help other entrepreneurs that are making that decision think about the weight of that responsibility.

Bet on yourself — but take chances on people

Marcus: In most cases, betting on yourself is a byproduct of necessity because other people aren’t willing to bet on you. I’ve met with a lot of people who have a plan, and the plan’s not good. It’s not articulated well. They don’t have things together. So you have to bet on yourself if you really do believe that you have your right plan together, but necessity, for me, it provided it. It was also octane for me, a bit of motivation. And in most cases, people have to bet on themselves because their life situation requires them to where the income that they’re making isn’t enough and they can’t work a nine to five job, their income isn’t enough, and they have to work their nine to five job and bet on themselves. The income isn’t enough, and they have to work two jobs, a morning shift and a night shift, and start their own business.

Marcus: So your family situation, your personal situation usually is the start of it. There is a lot of other people who want to bet on themselves because they want to drive a Lamborghini. And if that’s your thing, I mean, that’s your deal. That’s fine. I would ask you to reframe that a little bit, but betting-

Chris: Sounds like my 15-year-old.

Marcus: Yeah, your 15-year-old wants a Lamborghini because he doesn’t know that the electric bill’s $187 and that they’re going to shut the refrigerator off. But betting on yourself for me was really, truth be told, because I didn’t think anybody else would, and I didn’t have the confidence. And the lack of confidence in yourself can be a spark, and we have to work on that. I have to work on that even today to convince yourself that we got to stop setting these standards of what we think we’re supposed to do and we have to be happy with what we have.

Marcus: Betting on yourself though is kind of what business is. And if you’re going to be a business owner, I think it’s a privilege, not a right. I think it’s a privilege to own a business and not a right. I think it requires you to acknowledge that it’s not a glamorous job. And most people say, “I’m going to quit my job and I’m going to open up a business because I want to have my own parking space. I want to come and go as I want. I want to be rich. I want to go to Cancun when I want to go. I want to fly my own jet. I want to have two cars. I want to wear this watch and have those clothes.” And their motivation isn’t always pure. So it’s either the impure motivation or that you decided that nobody else would, so you had no choice.

Marcus: It’s riddled with a lot of pitfalls because betting on yourself doesn’t mean that you call yourself an entrepreneur and you spend time coming up with your logo in the name of your business. It means that you really have to understand, “I’m going to identify a problem. I’m going to put the time [into researching] what that problem is. I’m going to try to provide a solution. That solution’s going to come in the form of a product or a service. I’m then going to understand what the addressable market is for that by asking. And I’m willing to understand that along the way, something may change that plan.”

Marcus: And a lot of times people fail because they become so rooted in their pride of authorship that, “I’m already eight steps in. I can’t stop now. Even though everybody has told me that there’s no market and it’s not going to happen, I just keep going.” But assuming that I keep going, once I understand it’s a product or a service, then I have to understand the size of the market. Then I have to understand what the plan is, then I have to understand how I’m going to bring it to market, where I’m going to get the money from, how I’m going to put my people together, and then there’s one problem. And that one problem is that not one person in this world can do all of those things by themselves. And so when you say you’re betting on yourself, are you or are you ultimately in the end for that business to be successful, do you really have to not bet on yourself? Do you have to bet on other people?

Chris: There you go.

Marcus: And that’s what I think’s missing because there’s a lot of I in business, and really, businesses have lots of Ss and lots of letters because there’s lots of people. That’s the one thing that probably angers me more than anything. People say, “I created the business. It was my idea. I’m the one that made it. I’m the one that should get the credit.” Okay, but that’s really not how it actually happened.

Chris: That’s not accurate.

Marcus: No.

Chris: Yeah. They’re not going to say, “It was the supplier that gave me the line of credit to be able to do this, or let me go 60 days late so that I”... because you could have lost it all at some point, right?

Marcus: Or the person that took the meeting-

Chris: A hundred percent.

Marcus: …That said, “Your idea sucks,” and thank them because maybe it did suck.

Chris: Yeah. I’ve had plenty of those, plenty of those sucky meetings from sucky ideas. Well, one of the things that I think is a transition from betting on yourself to I do think you’re betting on other people, running your own business is one thing, right, and taking that, and whether it’s you’re starting one, you’re in a turnaround, whatever, ownership interest, whether you’re an operator, whatever it is, there’s betting on others that happens when you become an investor, right? And that’s the whole different type of an entrepreneurial journey. And I think one of the things that I would be remiss if I didn’t talk to you about that, right, which is the moving into a different position, right, where there’s the advising part, but then you’re actually betting on other people that are betting on other people, you know what I mean?

Marcus: Well, that’s business.

Chris:… Betting on other people. You know what I mean?

Marcus: Well, that’s business.

Chris: Yeah.

Marcus: Business in its simplest form is an investment in somebody. That’s it. And if I invested in you, let’s say today I gave you $5,000 and said, okay, what I’m really saying is I believe that you possess the skills cerebrally, emotionally, intellectually, spiritually, that are going to give me a better chance of success than somebody else. And this idea that you have today may not work, but that doesn’t make my investment in you a bad thing, that every idea isn’t going to work. It’s when I give people money that I know have the aptitude and I know have the skill, and I know know they have the know-how, but they have a disconnection in their brain about something.

Marcus: I would much prefer to invest in somebody that’s going to show up at seven in the morning and stay till eight at night, who’s going to work more than they should, who’s going to put the business and their employees in front of themselves, who’s always going to make sure that the customer and the employee are more important than them, who’s going to reinvest the success back in their business, but doesn’t have all of the skills. They’re good enough technically, but they’re superior practically versus somebody who is superior technically, but they crap all over everybody.

Marcus: Because that money leaving your hand, 5,000, 10,000, 100,000, one million, 100 million is truly an investment on people. Because what happens is every good idea requires people to make decisions in the decision tree and the way they live their life, the way they treat their family, the way they treat others is an early indication of how they go through the decision tree. How they keep their health, kind of sleep that they get, do they exercise, do they groom themselves properly, do they treat their mother properly, do they have a faith of any kind.

The human psychology of how decisions are made

Marcus: I don’t care what it is, even if it’s just in themselves. Those things are an early indication flag of how they’re going to make decisions in the tree. When things are good, how do they make a decision? When things are not good, how do they make a decision? And I don’t think we put enough stock into the human psychology of how they make decisions about themselves and how that transfers over to how they’re going to make decisions with your money. And the show was an expose of how people make decisions when they’re given an opportunity.

Marcus: It really, in the simplest form, and I told this to the Wall Street Journal years ago, the show was essentially one giant $50 million social experiment on how people handle opportunity and what they’ll do. What choices they’ll make, what the Adam and Eve apple situation when there’s money there and they could take it. And I have a tendency to set people up without them really knowing it to test their character and to test their integrity because I can get somebody that’s an expert to teach them how to do QuickBooks.

Marcus: I can get somebody to be like, if you sand it this way or I buy you this machine, it’ll make it better. That’s the easy part. But what do you do to make decisions? That is what your investment should be going into is are you investing in somebody that makes good life decisions overall?

Chris: Yeah. Well, you mentioned something earlier, which is you said it was like, hey, I’m already eight steps in on a bad idea and I’m going to keep going. I want to chat with you about the sunk cost, sunk cost fallacy, that idea that some people call it throwing good money after bad or things like that. And there is a choice for a business owner, a choice for an investor. There are these choices where you’re like, am I going to continue to incur the cost or should I go ahead and cut ties and move on? I’d say those decisions are some of the most challenging. It’s am I going to keep going because it requires more or am I going to stop? How do you think about, what are some gates, tolls, signals, signs that are like, you know what, it’s time to stop investing in this person or investing in this business or redirect something?

Marcus: Well, let’s take a step back for a second and understand that the recognition of the problem is maybe the most important and the admission — so the recognition of the problem and the admission of the mistake is the second and the third is the resolution. So the recognition of this maybe wasn’t a good idea. The public admission to your employees, to your investors, to your family that you made a mistake. And then the speed and diligence that you use to clean it up is really, I think, the difference maker between a successful business owner and not.

Marcus: Because when I see a business owner not take chances on things, every solid business has lots of good ideas, tons of them. And if we looked at a business that’s been around for 30 or 40 years that’s been successful and you were able to track every idea and every transaction and every investment and every product launch and everything they did, the hit rate is not as high as people would know. But it’s the recognition, the admission, and the resolution of those things that I think defines the successful business owner, the successful entrepreneur.

Marcus: It is hard because our egos are so rooted in this idea that everybody’s looking for us to have success. And I’ll liken it to my own life. So I’ve had a successful, an RV business for years, 20 something years now. And along the way, I would look for ways to try to catapult the business in a different way. I would look to try to find new customer sets, try to grow the business, and I bought a business out of bankruptcy inside of that business. And it was a giant miscalculation. It was a giant miscalculation on my part and no one else’s part.

Every experience can be a learning one

Marcus: And it came with a lot of criticism. And early in the process, let’s say in the first few months, there were a lot of skeptics, but in my mind I was like, I got this. I know this. This is right. And I didn’t listen to the skeptics and I didn’t take the time to put the effort into challenging it, debating it, and being willing to accept that they were right. I went forward with it and then I started to recognize that it wasn’t great. And then I had to publicly admit that it wasn’t great. And that came with a drop in the stock price, people telling me that I had lost my touch, articles being written that things weren’t like, I wasn’t as crisp as I thought.

Marcus: And it was hard for me. It was hard from an ego standpoint because as business people, we want everything to be successful. That’s why when I see Business Turnaround King, I’m like, no, no, no, no, please don’t say that. And then the last part was how quickly was I going to recognize it, admit it, and resolve it? And in that moment, in a matter of 14 months, I went through all three of those steps. And in the end, people said to me, yeah, you kind of fucked that up. You kind of messed that up.

Marcus: But the fact that you identified it, publicly took that bullet for it and then cleaned it up quick shows me that you have evolved and matured as a business person because you from 10 years ago would have this pride of authorship that you would’ve taken it to your death. You would’ve burned hundreds of millions of dollars to your death. And I think that that was a good learning experience for me. And for every person that listens to this and watches things like this, it’s okay to acknowledge that you are going to evolve as a leader.

Marcus: By the way, I had already experienced eight years of success on TV, and people thought that I had all the answers. So I’m going through making a television show of helping people fix their business, and I’m jacking something up at the exact same time. And I was conflicted because I was like, oh my God, am I going to admit this and now people are going to think I can’t do it. And the reality of it is that if you want to ultimately reach some level of success, the recognition, admission, and resolution of your ideas that don’t work are going to be what will catapult that success more than you think.

Marcus: It’ll suck for a minute and you’ll feel crappy for a minute and you’ll look stupid for a minute and you’re going to feel bad for a minute, but that minute passes, This too shall pass. People will remember how you handled it, not what happened.

Chris: Well, where did that sort of come from to be able to identify what the problem was? And what I mean by that is if someone, an investor or business owner is being asked to do more or has to continue to invest in something or continue to give their time to something, there’s this moment of choice that happens and the sunk cost fallacy is like, I got to keep going. What do you think sort of gave you the wherewithal, you know what I mean, to say there’s a problem and I’m the problem, or there’s a problem and I need to fix it, I need to arrest the problem and do something about it?

Growth is admitting and accepting failure

Marcus: My wife would disagree with this, but the growth in my own maturity of being willing to publicly be wrong and the acceptance that other humans will love me more when I do it as opposed to want to run away from me when I fail. And that was really hard. And it’s easier said than done. My wife’s like, yeah, sometimes you sort of keep going. The problem for me in this particular issue, because you’re asking me really two questions. One is the receiver of somebody’s investment.

Chris: Yeah.

Marcus: And the other is the giver of that investment.

Chris: Yeah.

Marcus: And I have one big problem as an investor myself that I say is a problem because I think that’s what people want to hear, but I’m not sure that it is, which is the refresh mindset that if one situation goes bad, I don’t cast the stone on the next person. And if one particular venture into one particular segment doesn’t go well, that I don’t cast a stone at that industry. So if I have a bad experience investing in home goods products, it doesn’t mean that if I do a bad job or it doesn’t work out, that I should cross that off my list forever.

Marcus: If somebody steals from me that’s a partner, that doesn’t mean that I should never have a partner again. I think me coming to the conclusion that in order for me to dish out that sort of tough love that I have to be able to apply that same thing to myself. In the end, I’d rather be wrong than be a hypocrite. And maybe being on TV and knowing that everybody’s watching everything that I do and feeling responsible to own my junk, to never be called a hypocrite was part of it. But most people would think it would be the opposite. You’d want to front as long as you can.

Marcus: And I was like, you know what, that didn’t work out. Did everything work out for you? They’re like, no. I’m like, all right, well, we’re the same then. By the way, we’re in the same club. [We’re] in the suck club today. We’re in the club suck today. I think that’s part of it. And as I got older, I’m 50 today, and when I started out as an entrepreneur, as I said to you, I was like eight or 11, I don’t know. And when I’m 55, I’ll think differently, but it’s being comfortable in your own skin that you can do it.

Business gives people purpose

Chris: Yeah. Well, the conversation about small business, one of the reasons I’m passionate about small business is it’s kind of the backbone of the American economy, has been for a long time. Why do you think small business is so important to communities?

Marcus: Well, when you say that, and I don’t want you to take this the wrong way, you make a small business and a community both sound small. And business in general is important to society because it gives humans purpose during the day. Because if you think about our lifespan, we’re either infants, elementary school attendees, high school attendees, college attendees, and then our life starts to suck from there because we don’t get to hang out in school. We now have to be part of a contributor to society. Business gives people purpose.

Marcus: It gives people a form of passion and expression. It allows people to display their God-given talents or their parent-taught talents or their school-taught talents. It allows people to gain confidence in themselves as humans. It allows them to build up their own community. As an example, the only reason that I’m in business is because I find that to be the only place where I can be with people. It’s my connectivity to humanity. They’re important to communities, to society in general because that purpose, it gives people a portion of the definition of who they are.

Marcus: And I don’t ever think that I’m just a business person, but for me, I’m not a parent, which is a terrible, terrible thing that I regret, but it is what it is. I’m not a parent. And so it allows for people to belong to something. When we were in grade school, we wanted to be on the soccer team, and then when you go to college, you want to be in the fraternity or the sorority. Everybody wants to be part of something and business is that thing. For me, it’s that thing. But what I don’t think is that...

Marcus: As opposed to even the biggest businesses, the biggest ones, the ones that I love, Walmart, Bucky’s, Bass Pro, they all started with some guy with a tackle shop or some guy with a resale shop in Arkansas. If you really study every single big business, it started as a small business.

Chris: Totally.

Marcus: So [it] isn’t really a small business, [it’s] just an incubator for really cool ideas that go worldwide. That’s it.

Chris: Oh, it’s just so legit. I mean, that was a great comment for sure. I think small business, though, I totally agree. This is a big reason why we were doing this — there’s a meaningful — it is a lifeblood. I do think you’re right. I love that it’s what you just said about small business. I do think that it is an underdog in a lot of ways.

Marcus: Why?

Chris: Because one of the things that I think is tough is let’s just look at Main Street for just a second. If we would just wanted to think about small businesses as Main Street, you’ve got all these businesses on Main Street. And it’s a part of the community, and people are walking by that business, they might buy things from the business, things like that. And then one of them goes vacant. I’m like, oh, that’s a shame. And then another one goes vacant. Oh man, that’s a shame. And the thing that I think that happens is the failure is so visible for a lot of people, especially in Main Street, especially something that’s so part of a community.

Commitment is just the beginning

Marcus: I think that’s one factor is just seeing friends, family, others sort of get it handed to them or struggle or close their doors and things like that, and they view it as a common failure. And I think that that’s why it’s kind of viewed as an underdog, like, well, these aren’t professional business owners. They’re just people trying to figure it out. And that’s why I think it’s an underdog is because I do think that it is probably the most sold out. And what I mean by that is somebody that’s committed, not like being a sellout, but somebody who’s really committed.

Marcus: They are really committed to their why very often. Most of the small business owners that I know and love are super committed and super committed to not just the outcome of their financial freedom or what many would call success. They want to be a part of the community. They want to drive value and things like that.

Marcus: I’m grateful for the commitment, but that’s not enough. And I have the same feeling when you said, I see a storefront empty, oh, that’s too bad. I also see that when I see people get divorced, relationships break up, a team lose a game. As a human, you want everybody to win, but that’s not how life works. And I bifurcate those failures into two buckets, three buckets, actually. Bucket number one is the business didn’t succeed because you were a knucklehead. You didn’t show up. You didn’t do the research. You didn’t surround yourself with good people.

Marcus: You didn’t pick the right location because you didn’t do the research. You didn’t sell a relevant product. You treated your customers [badly]. You treated your employees [badly]. And you don’t deserve to fail, but I’m less sympathetic to it. There’s the other ones that macro and micro economic forces cause that through the evolution of new technology, some new printing, importing, China can make it cheaper, Mexico can make it cheaper, supply chain breaks, things that are outside of your control, but the evolution of the world causes that to happen.

Marcus: And I think those things are tough. And then the last piece is that people get priced out where they just can’t compete because their growth plan just wasn’t fast enough and they got swallowed. And they got swallowed by somebody who does the exact same thing, who just out works them or out smarts them or out resources them or gets a break that they didn’t get. And you could have two good businesses with the exact same people skills, process skills and product skills, but one got the government contract and one did not.

Marcus: One knew somebody that knew how to sell on Amazon and one did not. One, their father was the president of blah, blah, blah, and they got a foot in the door and they did not. And that’s kind of just like shit happens. So it is important because my empathy and sympathy spectrum range differently. We have to start feeling less bad for people and rewarding those people who do the things right and understanding that in sports, in marriage, in relationships, in business, there are going to be winners and losers and that’s just kind of how it is.

Marcus: What my obligation and your obligation is, literally the two of us, what knowledge have we gained? What skills have we gained? What experiences have we gained and what is our mandate to share that with people?

Chris: Absolutely.

Marcus: And then what is their mandate to choose whether to absorb that or not? So that’s probably why I spend as much time, energy, and money putting it out into the universe because I’m just trying to take those three people who failed in those three different ways and give them whatever I have that can help them. That’s the reason we’re sitting here today. But we can’t make people take that information. We can give it to them. It’s like me saying to a friend of mine, I can help get your child into the school, but I can’t take the test. I can’t show up for class.

Marcus: I can’t put the effort in, go to study hall, do all those things. It’s really no different than business. And there’s always going to be winners and losers, and I think we need to strip away this idea that we feel bad, and rather than feeling bad, let’s put our energy into giving them resources and what they do with those resources, that’s on them.

Chris: It’s on them.

Marcus: Google today, the internet today, libraries today, AI today, I mean it’s not even a fair fight for a business owner that starts today and a business owner that was there 20 years ago. It’s not a fair fight. So how did the business owner 20 years ago make it with no resources? What was the difference?

Chris: I don’t know. Adaptability, resilience.

Marcus: And I don’t want to seem corny. They have the right product at the right time, at the right price with the understanding of the addressable market and how pricing works and costing works. They have a process to bring that to market, how to market it itself, how to package it, how to display it, how to find new people using whatever technology is in front of them-

Marcus: …Play it, how to find new people using whatever technology is in front of them in that moment, and they understand the value of people.

Chris: Mm-hmm.

Marcus: Those are the three things that in 1966 and in 2066, those three things will remain constant. And the variables that were dealt with in between are just circumstantial. Some of these young kids that are opening up businesses and becoming resellers on Amazon and making more than both of you and I, all they’re doing is using the resources that are put in front of them and they’re playing the game better.

Chris: Yeah.

Marcus: 30 years from now, that game will be dead and there’ll be some new game. 30 years ago, there was a different game, but those three fundamentals of that reseller, knows, “I got to find the right product. I got to know the addressable market. I got to know how to bring it to market and how to market it on Amazon. And I have to either surround myself with myself and other good people that can help me do it.” That stays constant. I think people undervalue the simplicity of it.

Chris: Yeah, I love the constants there. I think one of the things that came from, just a thought that I had while you were talking, is you were talking about the responsibility. I’m going to translate it as a responsibility. It was like, “Hey, we’ve got information and it’s our responsibility with that information to share as much as we can. And it’s the other receivers to not only... It’s their responsibility to receive it and do something with it. And I think one of the things that is really interesting about something that you did during COVID, right? I mean, you’re like, “Hey, let’s build a course with those constants in there.” And I think that was a big... What I want to say is, that’s evidence of what you just said, is that you’re like, “I’m going to build something so that I can share what I’ve learned and it’s up to other people to use it.”

Marcus: For me, the money and time that I spent building all those courses, I woke up in the middle of the night during COVID crying my eyes out, scared to death. That it was one of the first times in my life that I felt like I didn’t have control of things. I couldn’t control what was going on around me. I couldn’t control what was happening to other people. I couldn’t control the fact that people were dying and their businesses were closing. It was such a weird, dark thing. I can’t even remember it at this point. I blocked it out and I felt this terrible burden to solve things that quite frankly, they’re not going to solve much. They’re not going to solve much, but they may solve it for one person. And I don’t think that enough of us put a duty and responsibility on ourselves of the gifts that we’ve been granted and our necessity to share those with people.

Marcus: It was my very, very, very small way. Because I couldn’t make the show at the time. I think we were filming in part of COVID and it was hard. I’ve always felt this need to give. To give, give, give, give, give, give. And it probably stems from some holes in my own psyche and holes in my own heart where I think I can fill them up as a human by doing it. The show gave me the ability to do all of that, and the courses were just a way to do it the same way in a different medium.

Chris: Mm-hmm.

Marcus: Being here with you is another way to do it in a different medium. I’m getting ready to start filming again to make the same kind of show again, which nobody in my inner circle is happy about. But I’m doing it because I feel a terrible necessity to share and to do it with the hopes that it’ll solve something. I wonder why people don’t share more. It bothers me. It really does bother me. And I don’t mean to get dark about it, but I think about yourself or people like you who have a gift and a platform. It may be a business for you and you may feed your family this way, but it also is a responsibility that you have.

Chris: Mm-hmm.

Utilize your superpowers for good

Marcus: Because you’ve been given the gift to know how to do this, how to extract value from people and information from people. How to communicate it to them, how to disseminate it. And everybody that’s listening to this has a superpower. You have a superpower, I have a superpower. And it is time for people to display that superpower, to utilize that superpower. For good, by the way, not for bad.

Chris: Mm-hmm.

Marcus: I think too often we’re not tapping into people’s superpowers. People have a superpower, but they want to be something else. Like, if I was a really good basketball player, I shouldn’t play the cello because I’m not good at it. We’re not giving people the platform to display their superpower enough. And business is that one common platform that people can display their superpower.

Chris: That’s awesome. Well, I think you’ve clearly helped us, I’d say, appreciate and value the relationships in business with this conversation. And it just means a lot that you came and had the conversation with us.

Marcus: Thanks for having me. Until next time.