OTSS Podcast

CarBahn’s Steve Dinan on “Only The Strong Survive”

On this episode of the “Only The Strong Survive” podcast, Steve Dinan discusses his remarkable entrepreneurial journey with Dinan and CarBahn. Like Apple, Dinan started the company that bears his name in a small garage in Cupertino, California. Instead of personal computers, Dinan’s focus was on improving the performance of BMWs. Eventually, Dinan would go on to become one of the most respected and successful names in the BMW tuning industry.

The climb to the top of the BMW and German automobile tuning world wasn’t easy. After working at a car repair shop to help pay for college, Dinan decided to quit both and forge his own path. Starting with just $5,000, he rented a couple of bays from a local garage and installed turbo kits on BMWs. From those humble beginnings in 1979, Dinan transformed the business into a high-performance engineering powerhouse that could reliably extract every ounce of performance from a BMW.

After selling the company in 2013, Dinan eventually left it to start his latest venture, CarBahn. Click on the icon above to listen to Dinan’s in-depth conversation with host Dan Kahn about how he built his two innovative and well-regarded companies from the ground up. Here are our top five takeaways:

* Wanting bigger results requires bold steps.

* Building a better product is the best way to drive demand.

* Hard decisions can lead to big rewards. 

* Investing in innovation is critical to success.

* Budgets should be carefully constructed.

Take Bold Steps

Building excellent high-performance vehicles is great, but it doesn’t really matter if nobody hears about it. Dinan knew early on that marketing and the recognition that comes with it would be vital to his success. However, getting the major car magazines of the era to pay attention to the then-upstart company was a challenge. After making no progress in attempting to contact them, Dinan took the bold step of driving one of his cars straight to their office.

“Nobody answered the phone when I called because no one knew who I was. I took my race trailer at the end of race season, put my M6 in the back, drove to the Car and Driver office and knocked on the door,” says Dinan. “It was kind of a bold move, as I literally knocked on their door. They drove it around the block, thought the car was incredible and one of the best aftermarket cars they have seen and said to leave it. I flew home, and that was the start of my media.”

Make Good Stuff

There are builders and tuners that can extract lots of horsepower from cars. While those big power numbers might grab attention, Dinan takes a different approach. His focus has always been on building well-balanced vehicles that are properly engineered to improve all aspects of performance. Yes, Dinan’s cars make more power, but they are also extremely reliable and comfortable enough to be used as daily drivers. Paying attention to all aspects of performance and reliability takes a lot more effort but results in a better-finished product that people want.

“The easy thing to do is to make a car as fast as possible, and then it is miserable to drive and breaks all the time. When you are a young man and have a lot of testosterone, that is a natural place to gravitate to. But I like to drive my cars every day, and I like them to be reliable. I like them to not be overpowered so the handling matches or exceeds the power the car has,” says Dinan. “This is also one of the reasons I got so much press with Car and Driver and Road & Track. They were so used to tuner cars that would break during their road tests.”

Make Hard Decisions

There comes a time in almost every business when a difficult decision must be made. Dinan faced one of those when Chip Ganassi wanted to use Dinan’s engines for his legendary Chip Ganassi Racing team. While the move would open many doors for Dinan and his business, Ganassi wanted the engines for free. Agreeing to that arrangement would cost Dinan a significant sum of money but could also positively impact sales. Ultimately, Dinan decided the risk was worth the reward.

“It was a struggle for us financially, but it was one of the best decisions I ever made,” says Dinan. “We wound up winning nine out of 12 races. We came back the following year and won the 24 Hours of Daytona overall. We won the championship in the second year and then returned in 2013 and won the 24 Hours of Daytona and the championship again for a third year.”

Always Keep Innovating

Proper engineering and development of high-performance parts for BMWs are expensive endeavors. Creating a steady stream of those parts is even more cost-intensive. However, for Dinan, investing in innovation is an absolutely necessary expense that is vital to his business's success. If you are not innovating, chances are your competitors are, and they will quickly surpass you.

“When I sold the company, we had 52 employees, and 14 of those were in the engineering department between fabricators, engine development people, CAD people and software engineers,” says Dinan. “Fourteen out of 52 people is almost 30% of the staff in development. But that is why our products were so good and why we always had the best products. We led the marketplace because we were outspending everyone three to one (on product development).”

Make a Budget for Everything

Just as important as spending money on innovation is knowing how much you can actually spend. Blowing through most of your revenue in pursuit of the best products is a surefire way to sink a company. The trials and tribulations of multiple recessions taught Dinan the importance of carefully creating budgets for every department and sticking to them. That budgeting process also taught him how to run a leaner company.

“I wound up becoming a budget freak. My wife says I probably have thousands of Excel sheets on my computer now,” says Dinan. “If I am going to do anything, I am going to make a budget. I am going to calculate every cost, every person and every amount of time. I think it is fun to budget, but most people probably don’t think it is fun. I get up every morning at 5 a.m. and look at my budgets for an hour while having breakfast.”

Tim Kennedy on “Only The Strong Survive”For many, Tim Kennedy needs little introduction. However, for those unfamiliar with the name, Kennedy is a former UFC fighter, New York Times best-selling author, decorated Green Beret sniper and founder of multiple successful businesses. He also created Save Our Allies, an organization that works to rescue American allies in war-torn environments and aid Americans in need. Starting with the goal of rescuing one Afghan interpreter, Save Our Allies has expanded operations to places such as Sudan, Ukraine, and, more recently, Florida and North Carolina.Beyond Save Our Allies and continuing to serve in the military, Tim is a self-described serial entrepreneur. He has launched or helped to create an almost endless stream of businesses, including well-known ventures like Ranger Up, Sheepdog Response, Apogee Cedar Park, Relentless, Noble Defender, 4 Pillars Fitness and a host of others. On this episode of the “Only The Strong Survive” podcast, Tim discusses with host Dan Kahn the hard-fought lessons he has learned about what it means to be a leader and what it takes to run a business (or, in Tim’s case, multiple ones).

Click on the play icon above to listen to the entire discussion and subscribe for new episode updates. Here are our top five takeaways:

* Leaders should constantly be evolving and learning.

* Humility is an asset for a leader and not a negative

* Doing what you love makes both life and business easier.

* Failure and the pain that comes with it should be a catalyst for change.

* Nothing worthwhile is easy.

Leadership Requires Constant WorkAccording to Tim, a fallacy about leadership is that it is something that you ultimately master. However, that is not the case, as leadership requires constant work and evolution. Being a leader is an ongoing process of learning and admitting that you don’t know everything. There isn’t a single moment when you suddenly become a competent leader.“I do not have it all figured out, and I don’t know everything,” says Tim. “I will put everything I can into this (being a leader) and make the best decision I can with the information I have. We can all succeed together or fail together, but I will do the best that I can. There definitely wasn’t a moment. It has been an ongoing thing that I am still in the refiner's fire of learning how to do it better.”

Don’t Let Your Ego Get in the WayIt takes a lot of humility to recognize that you don’t know everything about leadership. However, that level of humbleness can be hard to achieve for anyone with a big ego. If you let your ego constantly get in the way, you will miss opportunities to learn anything. Evolving in leadership and life requires letting your ego get bruised and bashed. For Tim, it was a lesson he learned early in his MMA career, taking a beating of both body and ego in the octagon.“My ego has taken a licking since the beginning. I have never been as smart as I thought I was. I have never been as strong as I thought I was, and I have never been as good as I thought I was,” says Tim. “It is a hard thing for the ego when the thing you can never call me is the former world champion because I was a two-time title contender who lost both times. That ego gets put in check often.”

Doing What You Love Makes Life (and Business) EasierThere is busy and then there is Tim Kennedy busy. With his hand in 10 brands and counting, along with his work with Save Our Allies and being in the National Guard, it is safe to say that Tim’s life can be complicated. However, he sees all his NGO work, military service and multiple ventures as reflections of his core values and passions. Doing what he loves makes juggling his multiple endeavors seem less complicated and labor-intensive.“If you look at it like a wagon wheel, every one of these businesses represents a spoke in the ecosystem that is Tim Kennedy Operations, which is the parent company. Each of those spokes in that wheel that keeps turning, at the very center of it is the nucleus, which is like who I am as a person,” says Tim. “This identity of mine is that I want to preserve freedom, protect human life, enable people to provide for their families and expand freedom. That is what I believe in.”

Be Prepared to FailSocial media can skew reality by showing us the “shiny” moments of everyone’s lives. That warped view can make success seem easy to attain without much effort. However, that is not reality, as there are also lots of failures and hardships. If you want to succeed in business or life, you must put in the work and be ready for things to go wrong.“Everybody looks at what somebody has, but nobody looks at what they did to get there. Everything that I have comes from failure, suffering, struggle and mostly pain,” says Tim. I have failed, I have lost businesses, I have been in debt, I have been up against the ropes, I have lost title fights and I have gotten in trouble in my military career. The work is the thing you’re going to have to subscribe to, the discipline is the thing you are going to have to subscribe to and the failure is the thing you are going to have to subscribe to. I’m not saying you have to rush to failure, but there is a purpose to pain. Pain is the catalyst of change.”

There is No Easy ButtonOne lesson Tim has repeatedly learned is that few worthwhile things come easy in life. You can choose to do something hard or take the easy route and decide not to. However, achieving your goals takes lots of effort, pain and suffering. There is no “easy button” when it comes to life or business.“You’re going to raise your kids with value and integrity, or you are not. This applies to literally everything you do. Sure, you can hand your kids off to somebody and see how that turns out. Sure, you could hand your company to someone else and see how that turns out. You can drop ship and think that you are going to get rich, but you’re not,” says Tim. “You are either going to do it, or you’re not. There is no easy button. The purpose of pain is real. Believe in the process of struggling through the refiner’s fire to ultimately have something beautiful on the back side of that.”

BluePrint Engines CEO Norris Marshall on “Only The Strong Survive”

BluePrint Engines CEO Norris Marshall is an amazing example of a true American entrepreneurial success story. Born in rural Nebraska, Marshall spent much of his youth working on the farm. However, he began working in a small-town repair shop in his teenage years. It was there that he discovered his love of working on engines. Eventually, Marshall moved from fixing small lawnmower engines to larger ones when he began working at a local machine shop.

Marshall quickly left that machine shop to start his own, showing his entrepreneurial spirit. From those humble beginnings as a small machine shop, he guided his business to become one of America's premier builders of high-performance crate engines. With over 400,000 engines now produced, BluePrint Engines employs a vast array of engineers, engine builders, salespeople, support staff and other employees at its Kearney, Nebraska, headquarters.

The journey from a small machine shop to a leader in high-performance crate engines wasn’t easy or a straight path. In this episode of the “Only The Strong Survive” podcast, Marshall discusses what he learned from that experience with host Dan Kahn. Click on the play icon to watch this fascinating discussion that is a must for anyone running their own business. Here are our top five takeaways:

* Always keep pivoting.

* Company culture is more important than many people think.

* Fantastic employees are the result of training and development.

* Mentoring is a great way to develop your employees further.

* Employee ownership is a way to ensure your team is vested in long-term success.

Don’t Be Afraid to Pivot

Key to BluePrint’s success is Marshall’s willingness to shift business models. Initially, he started the business as a small machine shop, but it was limited to supplying local engine builders. Wanting to grow the business further, Marshall shifted to building remanufactured replacement engines. That change led to massive growth, with BluePrint producing over 100 engines a day. However, as factory OEM engines improved, the need to replace them dwindled. Once again, Marshall shifted to building complete and brand-new high-performance engines to continue the company’s success.

“The amount of remanufactured engines that the world needed shrank in a very short period of time. It was kind of like Kodak film. Kodak had all the imaging going on, but in a 10-year period of time, it disappeared, and nobody needed film. So, we were back to needing to change what we do and being more viable,” says Marshall. “The good part is that was the beginning of BluePrint Engines. We had the equipment, knew about engines and knew how to make the engines.”

Company Culture is Just as Important as Your Products

Company culture is often overlooked in the drive to produce more products and create new ones. However, it is essential and should never be ignored. Recognizing this fact long before company culture became a more recent focus, Marshall carefully built the right one. The move proved wise, as Marshall built a brand that employees want to be a part of and move forward.

“I guess the culture comes from me, how I want to treat our employees and how I expect our managers to treat our employees. I start with the idea that everybody wants to do a good job, and you just have to find a way to let them,” says Marshall. “I also do believe that people are capable of a lot more than we realize if we challenge and encourage them. So, I am big on challenging and encouraging. I’ve got a lot of push, and I am not easy to work for. At the same time, I am on their side, and I want to help them. I think you need to make it personal, too. People need to know that you care about them, and when the moment arises to show that, you really need to show up.”

Grow Your Employees

In the daily grind of running a business, individual employees can be just as overlooked as company culture. However, if you want your company to succeed, you need to pay attention to both its culture and employee growth. Properly training employees and taking a vested interest in their development makes them better at their jobs and more impactful to a company as a whole.

“Great companies are made up of awesome people who are really just regular people who were given a chance to be great. Everybody’s got some of that greatness in them,” says Marshall. “I realized that when you are looking at your competitor and admiring their people if you can’t admire your people, you probably need to do more to try to develop and train them because it is in most of them to be really great at something.”

Mentoring Matters

Mentors are equally as crucial to employee development as proper training. The right mentors can guide employees, pass along knowledge and help teach valuable skills. A mentor from outside a company can also bring fresh perspectives and new ways of tackling issues or problems. With a mentor making a big difference in his early career, Marshall happily makes them available to his employees.

“We have a lot of people here on the leadership team who have been here for a long time. For the most part, they haven’t worked anywhere else. We need that outside influence (of a mentor), so they know more than what we collectively know at BluePrint,” says Marshall. “So let’s get them with somebody who can teach them those other things. For the most part, I see really, really fantastic growth and change in the individuals who get mentored.”

Boosting Buy In

Getting employees to buy in and believe in your organization's mission is critical. One way Marshall boosts buy-in at BluePrint is by having employees literally buy into the company. By offering employees the chance to purchase stock in the company that yields returns based on its performance, they become more vested in the long-term success of BluePrint. The stock isn’t free or cheap, ensuring a deeper level of commitment among the employees who purchase it. It also gives a path to BluePrint’s longevity beyond Marshall and keeps ownership within the company.

“I did enough research five years ago on who you can sell a business to and learned about strategic buyers and private equity, and I also learned about employee ownership. So, to create a path, and there is no guarantee this is how it is going to end, my wife and I decided to sell about 10 percent of the stock in the company. We ended up with a group of about a dozen employees who purchased stock. It is not phantom stock or an ESOP,” says Marshall. “One of the attributes about it that I really like is that the employees ultimately get wealthy. I think it is important to really have that carrot out there that if you come in here and buy stock and sweat it out, make those payments and continue to buy more stock when you can, by the time you’re 50 or 60 and if you have a high-level job, you’re going to own enough stock that you are going to be rich.”

The Roadster Shop’s Josh Henning, Jeremy Gerber and Phil Gerber on “Only The Strong Survive”

Josh Henning, Jeremy Gerber and Phil Gerber are the team behind Roadster Shop and the “Oil & Whiskey” podcast. Now known as one of the premier manufacturers of high-end chassis for hot rods, muscle cars, trucks and customs, the road to the top wasn’t an easy one. Both Jeremy and Phil started working in their father’s autobody shop at a young age, learning the ins and outs of the trade. That formative experience was vital in determining that there wasn’t enough passion in the body shop business. The brothers left to pursue separate interests, and eventually, their father came to the same conclusion. Looking for something new, the eldest Gerber purchased the Roadster Shop in 2004.

The family reunited again to run Roadster Shop but had their work cut out for them. Roadster Shop didn’t have the best reputation for quality at the time of the purchase, and a lot had to be done to overcome that. Eventually, Josh Henning was brought on board to assist with propelling the brand forward. In this episode of the “Only The Strong Survive” podcast, the trio sit down with host Dan Kahn to discuss what they have learned from transforming Roadster Shop from its humble origins into a premier brand. The episode is worth listening to for anyone looking to build their own brand or transform an existing one. Click on the play icon to listen to the entire episode, and here are our top five takeaways:

* Passion is great, but you also have to pay the bills.

* You can learn more from your mistakes than your wins.

* Always maintain focus on your customers.

* Rebuilding a brand can be as challenging as starting a new one.

* Drive demand with your products instead of waiting for it to build.

Start From Scratch or Rebuild?

When the Gerbers bought the Roadster Shop, it was much smaller and very old-school. Chassis blueprints were often drawn by hand and built in a low-tech manner. This antiquated approach led to many quality problems and customer complaints. All those issues had to be addressed, and the brand’s reputation would have to be rebuilt before pushing it forward. Naturally, this raised the question of whether it would have been better to start from scratch with a new brand. The answer is nuanced.

“It’s tough to say. Realistically, yes, it would have been so much easier to start from scratch. The missing element there would have been the chassis business, though. For us, that wouldn’t have been something that we would have opened up,” says Jeremy. “The fact that it existed in some capacity drove us to improve it and make it better and better.”

Passion Vs. Profit

Building cool cars is a passion for everyone at the Roadster Shop. However, the team figured out early on that producing a few cars a year wouldn’t pay the bills. They would also have to compete against well-established shops already building cars. Focusing on creating high-quality chassis in a larger volume was a better business model, and it still allowed them to pursue their passion for building cars to showcase their latest products.

“Where it started to where it ended is probably a complete 180-degree flip. We started off just wanting to build the coolest cars out there,” says Phil. “At some point, it just kind of hit us that we could build these amazing cars, but we couldn’t sell another one. It is impossible to duplicate that car; if you did, it wouldn’t be the same. People always wanted some crazy one-off taillight or door handle that we made that you couldn’t really sell. What we could sell is really what set the stage for the whole build, and that was the chassis.”

Proactively Driving Demand

Many businesses respond to customer demand with their products. While doing so is always a good idea, it is also a reactive business model. You have to wait for that demand to develop. However, if you understand your customers and can skillfully create enough interest, you can drive demand through the right new products.

“Now, we have gotten to the point where we are creating market demand. Historically, we would see where it went and what our customers wanted,” says Phil. “It would take someone to build that first ‘oh s**t’ car for everyone to get inspired by, and then the market starts going after that. We’ve taken a good amount of that into our business plan, and we always try to come out with something that’s over the top and really in your face to kick off a new product.” 

Focus on Your Customers

It can be easy to lose focus in the day-to-day grind of running a business. However, getting sidetracked by details and items that don’t really matter in the bigger picture can be absolutely detrimental. One of the biggest keys to success with any brand is maintaining a laser-like focus on your customers and their satisfaction.

“Don’t chase the stupid s**t that doesn’t mean anything,” says Henning. “Always make your customer happy. There’s always the extra mile that you can go with your labor even when the customer’s pocketbook runs out.”

Learn From Your Mistakes

In a perfect world, none of us would ever make a mistake. However, we are all human, and mistakes will happen until AI-powered robots replace us. According to Phil, the key is to learn anything you can from those mistakes to improve your business. You can then put guardrails and corrections in place to prevent those mistakes from happening again.

“I think the biggest mistake is not learning from your mistakes. We screw stuff up, and I have always learned from every mistake,” says Phil. “You get bitten once, you get bitten hard and you are never going to do that again. If you don’t pay attention or if you are stupid enough to do it again, it is going to hurt way worse the second or third time. So, learn from what you did and use it as a teaching moment. You can always grow significantly better and learn much more from your mistakes than your victories.”

Todd Taylor is one of the lucky people who have turned their passion into a successful business. After growing up in the Midwest, he eventually moved to Colorado for a new job. To explore the beauty of his new locale and the Rocky Mountains, Taylor wisely bought a Jeep. However, like many newbies, he quickly found himself in over his head and driving in terrain beyond his skillset on a local trail. A lack of easy-to-find information on current trail conditions and locations compounded that harrowing experience.

To avoid repeating that scenario and to help others access trails, Taylor developed Trails Offroad as a side business in 2015. The website and its corresponding app serve as a detailed nationwide trail guide with trail difficulty descriptions, GPS coordinates and condition updates. Trails Offroad is now a full-time job for Taylor and has grown exponentially since its launch. Taylor learned a lot about entrepreneurship, innovation, leadership and business savvy while he built his company from the ground up. On this episode of “Only The Strong Survive,” he shares the knowledge he gained from almost a decade of brand building with host Dan Kahn. Hit the play icon above to listen to the complete episode of their in-depth conversation. Here are our top five takeaways:

* The darkest times can bring the biggest opportunities.

* Competitors with large marketing budgets can actually help your business.

* Growing and scaling a brand beyond its initial launch phase is critical.

* Launch your business before someone else does.

* Indecision can be just as harmful as the wrong decision.

There is Always Opportunity in Chaos

While Taylor soft-launched Trails Offroad in 2015, it wasn’t until four years later that it became his full-time job and only source of income. Moving the website and app behind a paywall right before the world shut down for the pandemic initially seemed like a wrong move. However, his timing was perfect as people sought new ways to connect with nature and get outside. The chaos of the pandemic turned out to be an opportunity and a huge boon.

“When 2020 and the pandemic happened, it was really an explosion,” said Taylor. “It definitely exploded, and it really went through the roof. You could watch all the other businesses that were loosely related gather steam as well. The stock price of Polaris went through the roof. It was great until the extreme inflation and especially high gasoline costs set in.”

Competitors Can Actually Help You

Multiple well-funded competitors are now playing in roughly the same space as Trails Offroad. Surprisingly, Taylor doesn’t see that as a negative but rather a positive. While their marketing budgets are much larger than Taylor’s, they help bring awareness to the space. With enough product differentiation and a quality experience, Taylor can capture some of those consumers.

“They (the competition) really help the industry out by pouring an ungodly amount of money into advertising,” said Taylor. “They are really doing the missionary work for people to show them there are tools and things you can get in the marketplace. At Trails Offroad, we have never marketed ever and grown to a sizeable base of customers just by having a good internet presence and being authentic. So, I can never knock them for all the things that they do.”

What Got You Here Won’t Get You There

Most entrepreneurs focus solely on growth at the beginning of their business ventures. However, anyone who has pushed past that point knows that there comes a time when that growth eventually slows down to a trickle. The tactics that got your business where it is might not work to keep it growing. How to effectively and efficiently scale beyond that point is critical.

“Have you ever heard the saying ‘What got you here won’t get you there?’” said Taylor. “I think that is what we are figuring out now. What do we have to do to get over there? Those are constantly debated in conversations about what we would like to do next to scale further. Those pages haven’t been written yet.”

Just Do It

No, this hasn’t become a Nike ad. The footwear and athletic apparel giant's famous slogan is the same advice Taylor gives anyone considering starting a niche business. It is impossible to realize your dreams if you never try, and someone will beat you to it if you wait too long.

“It is funny with Trails Offroad. All the people I talk to who are writers for us say that they had a similar idea but never did anything with it,” said Taylor. “So, I would always say get into it and just start doing it. Try to fail or succeed quickly, but just do it.”

Indecision Kills (Your Business Too)

History has proven time and time again that taking a long time to make a decision can be just as fatal as making the wrong decision. However, indecision doesn’t solely doom pilots, artic expeditions or generals. The inability to quickly make a decision and be confident in it can be just as detrimental to your business.

“There is a saying that indecision has killed more people,” said Taylor. “So, I would say just be confident, make a decision and do it quickly. If I look at the areas where I have failed, it really comes down to I just didn’t make a quick enough decision. Or when I did make a decision, I was just too wrapped up in it versus knowing the results weren’t worth it, and let’s cut it and move on.”

Melanie Hellwig White is the CEO of Hellwig Suspension Products. Founded in 1946 by her great-grandfather and grandfather, the duo went door to door selling helper springs to improve the ride and handling of heavily loaded cars. After making a sale, the father-and-son team installed the new springs in the customer’s driveway. From those humble origins, Hellwig Suspension Products has become one of the most recognized names and a leader in developing sway bars and load control products for OEM and aftermarket applications.Leading the innovative company since 2019, Melanie is the fourth generation of her family to run the business. Adding to the uniqueness of that legacy is that Hellwig Suspension Products manufactures all of its products in the United States and it is still privately held. However, Melanie wasn’t just handed the family business. She had to work her way through the ranks and prove her mettle. In this episode of “Only The Strong Survive,” Melanie talks with host Dan Kahn about what she learned from her climb to the top of the family business and from guiding it through challenging times.

Click on the icon above to listen to the entire episode. Here are our top five takeaways from their discussion:

* The modern business landscape requires more than just technical skills.

* How pressure works to build better brands and people.

* Coaches aren’t just for professional athletes.

* The right feedback is critical to growing as a leader and a business.

* Tribal knowledge needs to be passed on to others and not contained.

Running a Modern Business is DifferentMelanie wasn’t always sure that she wanted to run the family business. In college, she pursued a degree in psychology instead of the “usual suspects” of business, finance or marketing.  However, that choice proved to be a positive one, as running a business today is different. Now, understanding how to motivate and interact with a wide range of employees is just as important as technical business know-how.“I feel like it (the psychology degree) has helped me quite a bit,” says Melanie. “Now, it is a very different time when businesses are lucky to have team members. So, it is a shift that we have to make that is subtle but really important. As a business, we have to look at how to motivate our team members, attract them and be a really good place to work.”Get UncomfortableSome strive to get their businesses and themselves to a “comfortable” place and then hit cruise control. For Melanie, not getting outside one’s comfort zone is a surefire way to let your competition eat your lunch. Just like a pressure cooker can speed the cooking process, operating under pressure helps constantly push your brand forward. Striving to do the uncomfortable can also mold you into a better person.“It is saying yes to the uncomfortable things, and that is hard. If I am comfortable, I am not doing it right. Honestly, as a business owner, if you are fat and happy, you are not doing it right,” says Melanie. “I step into positions that put me under pressure but force my growth.  If I am uncomfortable, I know I am moving forward.”Get a CoachBehind every great athlete, there is almost always a great coach. Many business leaders think they must know everything and forge their own path. Some even see reaching out for help as a sign of weakness or showing a lack of knowledge. However, it is hard to grow as an individual and a leader if someone isn’t helping you along the way.“I think there were a lot of times when I thought I should know this or have it figured out, but it is not like that,” says Melanie. “The best athletes have coaches. Whether you have the natural talent or not, you are going to have blind spots.”Always Look for the Right FeedbackBusiness leaders can get themselves into a position where the only feedback they receive is positive. Sometimes, that is by design, hiring only “yes men” who agree with a leader's every move. Other times, it happens when employees don’t want to “rock the boat” for fear of losing their jobs. Either way, it is a trap that should be avoided. While getting only positive feedback might be great for one’s ego, it is not great for one’s business.“What I have seen as I have risen through the company is that you get to a certain position, and people don’t give you feedback anymore. That is why I work with a coach because you need that honest feedback,” says Melanie. “I want the real feedback and I want someone to feel safe enough to give that feedback. It is not always fun when you get the feedback from the team, but it is important.”Tribal Knowledge Shouldn’t Be Kept TribalA business like Hellwig, which has been in business for almost eight decades, naturally develops a lot of tribal knowledge. Having that knowledge is great, but it needs to spread to new employees beyond the core members of the “tribe.” Otherwise, it is only contained within a small group and doesn’t help new members of your organization. Recognizing the employees who have that knowledge and helping them to share it is just as important.“In our company, because we have been around for so long, we have really leaned on tribal knowledge. For myself, even I have leaned on that,” says Melanie. “A big part of the mission I am on is to be more process-driven because we have leaned on that too hard. Not understanding some of the talent that is inside my organization has been one of my biggest mistakes and a hard lesson.”

Terry L. Karges of the Petersen Automotive Museum on “Only The Strong Survive”

On this episode of “Only The Strong Survive,” host Dan Kahn talks with Terry L. Karges. As the executive director of the famed Petersen Automotive Museum, Karges has played a central role in its transformation. Since joining the museum 13 years ago, he has helped quadruple ticket sales and tripled staff size. Going beyond just the numbers, Karges changed the very nature of the museum from a somewhat random collection of cars to a world-class museum with cutting-edge exhibits that reach every corner of car culture. Even the building where the museum is housed went through its own radical transformation in 2015.

Leading any company through transformational changes is always hard. Creating impactful changes in organizations previously entrenched in their operations and mindset can be even more difficult. Throughout his leadership role at the Petersen Automotive Museum, Karges has learned plenty. Click on the play icon above to listen to the entire “Only The Strong Survive” episode as Terry shares with Dan what he has learned over his long career and during his time at the museum. Here are our top five takeaways:

* Every single aspect of a customer’s experience matters.

* Initiating a sense of shared responsibility builds better teams.

* Finding the right employees is only one part of the equation.

* Recognizing trends and capitalizing on them can lead to increased revenue.

* Loving what you do is extremely important.

Your Bathrooms Matter

The Petersen Automotive Museum has immaculate bathrooms. That fact might seem random or inconsequential, but for Karges, it shows how details absolutely matter. A substandard restroom might seem minor, but it can easily detract from an otherwise great experience at the museum. Every part of the customer experience needs to be considered and optimized.

“The guest experience is everything, and that is why we are here…looking at what a facility can be and what is the guest experience. One of the things that disgusted me about the museum when I first got there was the horrible bathrooms,” says Karges. “There was so much that had to be fixed, but these are human things that can be done.”

Going Beyond Giving Employees a Voice

Giving employees a voice in an organization is always a good idea. However, a say in how a company operates or crafts its mission is not enough. For Karges, building a strong sense of shared responsibility is also essential. Doing so helps create effective teamwork and people who take collective pride in a team’s achievements.

“One of the things that we talk to the whole team about regularly is not only do you have a voice and vote in what we are going to do, but you also have a shared responsibility,” says Karges. “If you walk by a piece of paper (on the ground) or see something that needs to be fixed or corrected and you just keep going, that is not what I would call a team effort. Why do you expect someone else to do that when you can? It is not going out of your way, but think of the guest experience.”

It is More Than Just Finding the Right People

Karges is quick to credit his success at the Petersen Automotive Museum to his employees. Finding and hiring the right people is a skill that is absolutely vital to the success of any organization. For Karges, creating that success goes beyond just onboarding the right people. You also need to listen to them, respect them and empower them.

“It is a matter of finding the right people. That is another part of the lessons of when I was at Disney,” says Karges. “You have to find the right people and let them do it; let them go. I was asking a fellow one day how he became successful and how he did it. He said that if you really want to be successful, you are going to have to allow people to do things differently from the way you might do them. That doesn’t mean it is going to be bad, but you need to be willing to listen.”

Capitalize on Trends

The shift towards smaller and more interactive events has accelerated across multiple industries, including automotive. To capitalize on this trend, Karges pitched the Petersen Automotive Museum to OEMs as the perfect location for more intimate and exclusive vehicle introductions. The right clientele could enjoy the museum and also get an up-close and detailed look at the latest car models. That effort worked and now helps add revenue for the museum’s many educational programs and other initiatives.  

“The industry has begun to shift away from spending fortunes at auto shows, where you are there for 14 days, your people are tied up and the space is phenomenally expensive. There are a couple of million people (at the shows), but how many of them are really your designated targets? What the manufacturers have found is that the museum is a really beautiful location to showcase or do a reveal,” says Karges. “We do it on different floors, but in the past 24 months, we have probably done 21 new car reveals with the manufacturers.”

Passion is Everything

Karges is past the age when many would retire, and most in his position would seek a less demanding job they could “coast” in. However, Karges is still going strong and has no intention of letting off the gas. His hard work ethic is a direct result of his love for what he does. That passion is the fuel that keeps him pushing himself and the Petersen Automotive Museum forward.

“Doing what you love isn’t work,” says Karges. “I talked to my grandsons about that and told them to find what they wanted to do. You won’t hit on it immediately. You are going to have to experiment and keep trying, but eventually, you will figure it out.”

Brendan Ballou Discusses Private Equity on “Only The Strong Survive”

In the second part of our two-part series on private equity, “Only The Strong Survive” host Dan Kahn talks to Brendan Ballou. The author of “Plunder: Private Equity’s Plan to Pillage America,” Ballou is a federal prosecutor who served as Special Counsel for Private Equity in the Justice Department’s Antitrust Division. Before that, he worked in private practice along with the National Security Division of the Justice Department, advising multiple administrations on counterterrorism. Ballou’s unique background gives him deep insight into the often-murky world of private equity (PE).

While our previous episode dealt with the upsides of private equity, of which there can be many, Brendan discusses the darker side of PE with Dan. As the title of his book suggests, private equity can have many negative aspects associated with it. So, do these negatives outweigh the positives? Or does private equity sit somewhere between good and bad? Examining both sides of an issue is always important, and that is exactly what Dan and Brendan do in this episode of “Only The Strong Survive.” Click on the icon above to hear the complete in-depth discussion. Here are our top five takeaways:

* Private equity and its effects are widespread.

* Financial decisions are not always the best business decisions.

* Short-term thinking can be rampant in private equity.

* There are lots of challenges in changing the private equity sector.

* While it might seem like all doom and gloom, there is hope.  

Private Equity Impacts Everyone

Many people think of private equity as a distant business “thing” that doesn’t really affect their lives. However, that isn’t true. Private equity's vast scale means it impacts almost every consumer, whether they realize it or not. Operating behind the scenes, private equity’s influence can be difficult for many to perceive, but it is almost always there.

“In terms of the impact that private equity has had, it is just enormous,” says Ballou. “Private equity firms spent over $1 trillion buying up businesses last year. So, just about every aspect of society and the economy is affected by it. Whether you are talking about healthcare, retail, finance, prisons, housing or leisure activities, just about everywhere private equity is active. It is really transforming how these businesses work.”

Private Equity Firms are Financially Focused

The vast majority of people working in private equity are not business leaders or entrepreneurs. Instead, they are from the financial sector. While this might seem benign at first, it means few people in PE have business, marketing or sales backgrounds. Having people run a company who aren’t necessarily business savvy can be a recipe for disaster.

“I think one thing that is really important to convey is that the folks that run private equity firms and the folks that they typically install to run the businesses they buy very often do not have traditional business backgrounds in marketing, sales, logistics and so forth,” says Ballou. “Their backgrounds are primarily in finance and, to a lesser extent, the law. What that means is that the changes they try to make in companies are very often financial ones rather than operational ones. In fact, when they try to make operational changes, often times it ends very badly.”

Short-Term Thinking is Prevalent

House flippers and private equity have a lot in common: neither intends to hold onto their purchases for a long time. This leads to many house flippers cutting as many corners as possible to save money because they don’t have to live in a house for long (if at all). That same short-term thinking and “business model” is also prevalent in PE, as most firms only keep a company for 3-5 years. Short-term gains are often made at the cost of long-term pain.

“One of the problems that I argue that the private equity industry has is they want to sell the companies they buy just a few years later. That changes your perspective on the business,” says Ballou. “I always say that if I were trying to maximize the value of my apartment over 20 years, I would redo the kitchen. If I were trying to maximize the value of my apartment over two weeks, I would burn it down and try to collect the insurance money. How long you hold an asset changes how you treat it.”

Private Equity Has Powerful Political Influence

In our current “charged” political environment, it can be hard to believe that Republicans and Democrats agree on anything. However, both the Obama and Trump administrations tried to apply more scrutiny to what is an often-opaque sector. Neither succeeded, leading many to wonder why private equity can’t be controlled more.  The answer is that private equity has some powerful political friends.

“Another challenge we have is that private equity firms are enormously successful at getting their way with government. They and investment firms have spent something like $900 million on federal candidates and elected officials over the last 30 years or so,” says Ballou. “They have hired former cabinet members, generals, CIA directors and at least two Speakers of the House. They are all working for private equity firms and are their advocates, so there are a lot of structural challenges to change.”

There is Hope

While private equity has some upsides, it also has some serious negatives. Is it all doom and gloom, though? Will private equity take over most of America and create a death spiral of business demise? Will short-term business thinking become the new normal? While focusing on the dark side of PE, Ballou does have hope for the future.

“I actually do think there are reasons to be optimistic here. I have seen enormous progress happen on, for instance, advocacy around private equity in the prison and nursing home industries,” says Ballou. “There has been legislation and rule-making at both the state and federal level on many of these issues because people are committed and passionate about them. It is not just that change is possible, but change is actually happening in specific areas, which is great.

Alex Rawlings on Only The Strong Survive

In this first episode of a two-part “Only The Strong Survive” series, host Dan Kahn talks with Alex Rawlings about private equity. As the host of “The Private Equity Podcast,” Rawlings is an expert voice deeply entrenched in the subject. He is also the founder and managing partner of Raw Selection, a U.K.-based executive recruitment firm that finds C-suite executives for private equity companies. Over his career, Rawlings has developed an in-depth understanding of how private equity functions and its many intricacies.

Private equity is an often misunderstood and murky topic. While private equity has strong benefits, it also doesn’t enjoy the best reputation. So, what exactly is private equity, and is it good or bad? Is it something your brand should be looking at? The answers are complex, but Dan and Alex break it all down in this episode of “Only The Strong Survive.” Click on the icon above to listen to the whole discussion, and make sure to stay tuned for the next episode as we dive deeper into private equity. Here are our top takeaways:

* Private equity is a highly regulated and complex industry.

* There is a lot of money generated by private equity.

* Most private equity backed companies are sold multiple times to other private equity firms.

* The focus of private equity is usually on short-term growth.

How Does Private Equity Work?

In simplistic terms, private equity follows a similar business model to house flippers. A PE group purchases a company with a loan, but the company pays off the loan. The PE group then improves the company’s profits, usually by merging it with other companies. After doing this over a few years (typically 3-7 years), the group then “flips” the company to another buyer, hopefully for a significant profit.

“Once they (a private equity firm) have raised capital, they will go to market to deploy capital. And when we say deploy capital, they want to buy X, Y or Z business,” says Alex. “Let’s say that business is doing $10 million, their goal will be to take it to $100 million. How the hell are they going to get it to $100 million in 3, 5 or 7 years? Private equity firms are not very good at doing organic growth. They are very good at doing “roll-ups” or basically acquiring competitors or similar companies and rolling up the back office systems into it, increasing the EBITDA and scaling that business on the front end.”

Private Equity is Highly Regulated

Finding someone to talk about private equity is a challenge. That difficulty stems from private equity being highly regulated, and laws govern what can be said about existing and upcoming deals. The lack of people willing to discuss PE isn’t nefarious, but most companies prefer to operate behind the scenes and avoid opening themselves up to any potential liability.

“It is heavily regulated. Same as in Europe as it is in the U.S., and it is just very stringent,” says Alex. “Therefore, people fear going out and having those conversations. Plus, it is just financial services. Law firms are a bit of the same, where they don’t want to break any eggs. But we are starting to see more personal brands coming out in private equity and more companies disrupting things.”

It is Extremely Profitable

The financial industry creates the most millionaires of any job segment. Within that industry, private equity produces the vast majority of those earning seven figures or significantly more. Private equity generates an extraordinary amount of wealth, which is why it continues to be so popular.

“There have been some bad moves, but for the most part, they (private equity firms) have done phenomenal growth of organizations,” says Alex. “Some of these businesses have created huge returns. The biggest one I know of is a 300-times return on a portfolio acquisition. For a simplistic basis, if they acquired that business for $10 million, they have produced a 300 times return on that 10. And that would be small. They wouldn’t have done just $10 million.”

Private Equity “Feeds” Upon Itself

One unique aspect of private equity is that a PE-bought business is often sold multiple times. Almost every time a PE-backed business is sold, it is to another private equity firm. Different levels of private equity companies look to purchase businesses of various sizes. A lack of buyers is rare, as there is almost always someone willing to take a stab at it.

“There are loads of different private equity firms,” says Alex. “It is a bit like banking levels. There are certain banks we haven’t heard of that we wouldn’t be able to put our money in because they want $100 million. Then there are bank accounts that don’t expect anything and ones that want $25,000 or $100,000. That goes on in private equity with some of these firms doing $1 billion acquisitions. It is not just $5 million or here is X amount of money. There are lots of rounds.”

Is Private Equity Just Trying to Make a Quick Buck?

For every backer of private equity, there is a detractor, and most have a mixed opinion of it. One ding to PE’s reputation is that it is only interested in making fast money and could care less about a company's long-term well-being. We asked Alex if private equity is solely focused on making a quick buck. His answer was an interesting one.

“As someone who supplies into the industry, my answer to that question should be that I think they (private equity firms) are really focused on long-term growth,” says Alex. My actual answer is that I don’t think enough of them are. I think a lot of them are just focused on the exit. That might be harsh but also fair to a certain extent. It really depends upon the private equity firm.”

Listen to the full podcast to get more of Alex and Dan’s insight into private equity.

Brian Gilman of Warriors & Quiet Waters on “Only The Strong Survive”

A former Marine Colonel, Brian Gilman has a 27-year history in the U.S. military, including two tours in Iraq and Afghanistan. Gilman originally joined the Marines out of college with the intent of only being in the military for four years but quickly found purpose in serving his country. Eventually, Gilman became the Chief of Staff for the Marines Special Operations Command, leading training efforts for the Marines’ elite warriors.

As a fifth-generation native of Montana, Gilman always found solace in fly fishing and spending time outdoors. That connection to nature helped lead him to his current position as Warriors & Quiet Waters CEO. The non-profit uses the vast healing powers of nature to help U.S. veterans recover from both seen and unseen injuries. Gilman joined the organization to maximize its impact and expand its mission beyond assisting veterans to survive their injuries to thriving in life.

In this episode of “Only The Strong Survive,” Gilman talks with host Dan Kahn about his thoughts on leadership in both the military and civilian worlds.

Click on the link above to listen to the in-depth discussion. Here are our top takeaways:

* Leadership isn’t simply telling people what to do.

* Leadership is about serving and sacrificing for your team.

* Leaders can’t get lost in self-doubt or the fear of others.

* Letting your emotions take over as a leader is a mistake.

Leadership Goes Beyond Giving Orders

Gilman learned a lot about effective (and ineffective) leadership during his almost three decades in the Marines. The military has its own leadership style; obeying and immediately enacting orders is 100% necessary in combat situations. However, for Gilman, there is so much more to being a truly effective leader than simply telling people what to do.

“It all starts with an understanding of what leaders do. In my view, leaders empower others to do those things that need to be done that they would otherwise be unwilling or unable to do. That is what leaders do,” says Gilman.  “They empower others to do hard things. It is not about giving commands or forcing people as a result of your power to do things. It is about inspiring and empowering them to do those hard things that need to be done.”

The Only Privilege of Leadership is Leadership

A modification of a quote from General James Mattis, who was Gilman’s division commander during his tours in Iraq, the new quote speaks directly to one of Gilman’s core takes on leadership. For Gilman, being a leader is not about enjoying the accouterments and luxuries that can sometimes come with a leadership position. Instead, the only privilege of leadership is being a leader.

“A leader, in order to be effective, has to sacrifice for the team. They have to serve the team,” says Gilman. “They are not there to collect the privileges that come with a position of leadership. The only privilege of command is the command. The only privilege of leadership is leadership. In my view, it is really easy to get trapped with all the things that can come with a position of authority.”

Be Wary of Taking Counsel of Your or Your Team’s Fears or Naysayers

Anyone can try to be a leader, but being an effective one is extremely difficult. It takes courage and the ability to make hard decisions that others often cannot. There will always be doubters of you and fears along the way. However, letting your or others' fears and doubts overwhelm you is a surefire way to become an ineffective leader.

“Ultimately, I think that a leader has to be bold. They need the courage and confidence to make the hard decisions that they are there to make,” says Gilman. “At the end of the day, I believe you have to follow your instincts. You should listen to all of the guidance and advice that you can receive from people, but ultimately, you have to make tough calls.”

Don’t Let Your Emotions Take Over

Leaders can have big egos, but being humble enough to learn from your mistakes is vital. According to Gilman, his biggest mistake in the past was to let his emotions take over. Leaders are people too and have bad days like everyone, but letting those emotions cloud decisions often leads to poor ones being made.

“I think the biggest mistake I have made from a leadership perspective is when I lost sight of my framework. I am very Type A, and I like getting things done quickly and solving hard problems and challenges,” says Gilman. “When I don’t show up as my best self, what that looks like is I become overbearing, I don’t listen to others and I take over. All those things that my framework says I shouldn’t do. When I think of the biggest mistakes I have made as a leader, it is because of some outside pressures I had or because I was having a bad day or something like that.”