273: Publishing to EdTech: The Unlikely Road to Evolution Labs with Founder Peter Kraft

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Speaker B: This program contains strong language and so we had expenses that were now part of our life that we couldn't easily get out of. We were burning through cash.

Speaker C: You couldn't sell your kids.

Speaker B: We tried, believe me. And it was awful. And how we kept going while that dark cloud was over our lives for years is a sheer miracle. And I think probably the biggest key to our success is people have always thought I was weird or stupid or silly, but fuck em. Here's how crazy we were. We would go to sleep at 6pm and we would set our alarms for midnight and we would wake up and we would drive through the night, arrive at a school at 8am In a meeting in Ohio or wherever it was and we would pull into a McDonald's parking lot, wash up, put our suits on and walk into that meeting like we own them. My name is Peter Kraft, believe it or not. In fact I don't think I can believe it. I'm 53 years old, although I really act like a 19 year old and I'm based in New Jersey. I live in Frenchtown, New Jersey. Our office is in Morristown, New Jersey. But I'm a New Yorker through and through and our current business is called Evolution Labs and super excited to take you on our journey and how we got to this point.

Speaker C: Why don't you tell us a little bit about Evolution Lab first?

Speaker B: Sure. Evolution Labs is a education technology company. We work in K12 with schools and districts around the country and also in higher ed. And our core products in K12 are web and mobile programs around what's called social and Emotional learning. I think the best way to describe social and emotional learning or SEL is it's really all the non academic stuff that factors into student success and a lot of it is centered around mental health and well being. Research demonstrates that Kids that are better equipped socially and emotionally perform better academically. And then the other program in K12 we have is for students in suspension and detention. What's amazing is that over the years, really not much has changed in the world of detention and suspension. Students are actually just sitting there doing busy work, getting further and further behind in class. So today, when a student commits an infraction, they now have to sit and go through a lesson or a module, all web and mobile based, related to their infraction. And that's really helping drive what's called restorative justice for students. And then in higher ed, we also have social and emotional learning programs for college students to help them be more successful. Again, that's tied to their academic performance. And what's really interesting is that in the world of higher ed, most college students that leave or drop out, they're not doing it for academic reasons, they're doing it for social and emotional reasons. We're really focusing on that to help students be more successful. And then on the recruiting side, in higher ed, we help colleges recruit students create basically these web and mobile marketing programs that allow prospective students to better connect with the school. We use a feature called Virtual Ambassadors, which let prospective students shadow and follow real students at the school, which drives connection and ultimately drives enrollment.

Speaker C: And uh, that makes sense to me, what you're talking about. Let's just even say college with the social emotional reasons for going. I know for me, like I had a difficulty switching from high school to college because during that point in college, it's kind of funny, I thought I'd end up, uh, like making more friends, but I definitely made way less because that was right at the same time that online education started. Going to. All of our classes were online. People wouldn't even go to class anymore. And I'm like, I didn't realize at the point in time, but I realized kind of looking back, I'm like, man, I didn't get to meet nearly as many people as I thought I would, which is high school. It seems like I had tons of friends because I was forced to go to class and be next to these people that maybe I wouldn't normally have known.

Speaker B: Yeah, it's seriously a totally different dynamic than when you were in school. And um, certainly when I was in school, there's a lot of online learning, as you said, kids are not socializing in the same way that we used to, which really, I think speaks to Generation Z, this audience that has grown up in this digital world. Let's remember many of Them are engaging in dialogues and really full blown relationships purely behind the device. So the dynamics of social engagement have really changed. It's a different world.

Speaker C: Yeah. So what do you mean when you're saying social and emotional learning that you help with this, for instance, for the K through 12? Because I'm looking at your website and basically you have two parts. You said the higher education part and the K through 12 part. But uh, the first thing that I noticed, I don't think I even heard the term before, was the social and emotional learning that you're talking about.

Speaker B: Yeah. So social and emotional learning really is. Think of it as character development. It's all the issues around things like respect, mental health and well being, test taking anxiety, study skills, racial tolerance, absenteeism and tardiness. All of these factors really affect a student's ability to be a good learner and for schools and teachers to teach students. When students are disruptive or distracted, it's hard to teach them. And students that are better equipped socially and emotionally are easier to teach are more likely to consume content and information that they're being taught. And that's not really just the case in K12. Frankly, our programs were born in higher ed. That's where we really started. And the reason we brought our programs into the K12 world is because our higher ed clients would tell us that really by the time students are arriving on campus, they're often not prepared for success. And they're not, uh, just referring to academic preparedness when they say that, they're frankly more so referring to social and emotional preparedness. Colleges encouraged us to take this SEL programming social and emotional learning earlier into the educational life cycle so that students are better prepared for success when they arrive on college campuses.

Speaker C: Who are your actual clients? Like who's paying you and how do you make money? Today?

Speaker B: In our current business, schools, school districts and colleges and universities are our clients. We work with only public and private schools and school districts, colleges and universities. We don't work for, for profit. They're all not for profit. And frankly, there aren't many for profits left. But the school or the school district or the college are our clients and they're really hiring us to deliver content in the higher ed world to prospective students and current students. And then in K12, our programs are built for students, parents and school staff. Parents is a whole other issue and discussion that we can get into about their influence and frankly, better equipping them, simply speaking, to have smart conversations with their kids about these issues. Oftentimes parents don't know what to say. They don't know how to handle issues around mental health and well being. When a school, whether it's a K12 school or a college or university, can provide service based content to parents, they can be better equipped to be the school's ally and to have smart conversations with their kids. We've got about 500 clients today. It's growing rapidly. We probably sign five to 10 new schools or districts every week and we've got about 15 people on payroll right now. So.

Speaker C: Yeah, so that gives us an idea, at least a payroll size of your company. Because even though it sounds like 500 clients might sound not like a lot, but if you're dealing with universities and colleges and actually dealing with these students and their parents, do you even know how much of a reach you have there total?

Speaker B: Well, what's interesting is, and I think this is one of the things we're so excited about with our business from a revenue standpoint and from a scalability standpoint and from a value standpoint, because ultimately the business will be acquired. We've sold two prior businesses, similar models. But what's really exciting about our business is that our programs are typically built into things that the school is doing. They're built into in K12, they're built into a health and wellness curriculum. It's required for students to go through our programs because again, schools are starting to understand that relationship between social and emotional wellness and academic performance. And then in higher ed, there's really two parts of our higher ed business. On the recruiting side, colleges and universities are uploading lists, lists of names. You probably know that when you apply to colleges, you would get mail and email from prospective schools interested in you. Well, they're purchasing names of students that have taken the SAT or the act. Our clients are uploading those lists of, uh, purchase names. Oftentimes it's 100,000 names or more into our programs. And then our programs get basically white labeled or skinned to look and feel like it's coming from that school, whether it's UCF or Lynn or Florida Poly. I'm just naming some in Florida since you're based down there. And then the program is delivering outreach. It's really a campaign that looks and feels like it's coming from the school to encourage prospective students to check them out. And the leverage we use to do that is these virtual ambassadors, as I mentioned, oftentimes today for prospective students, they're really more interested in hearing what real students have to say about a school than they are in hearing what the school has to say about the school said a different way. They want more authenticity. They hear over and over again from the school, from the admissions counselors, how great the school is and why the school is probably a great fit for them. But the reality is that they want to hear that from a student's perspective, a real student's perspective. That's where they're getting this authenticity. And we do that through a process called Virtual Ambassadors. It's basically a video series of student ambassadors at the school. Students that have been vetted by the school to represent the school well, and they're shooting a series of videos on their phones. Another kind of shift in the way prospective students are engaging with schools these days is that they're not into professional video quality anymore. They want to see a typical day in the life of a student at the school as shot on their phones. They shoot these videos on their phones, they upload them to our program, we standardize them, and then we use those videos as leverage to communicate prospective students.

Speaker C: You said you're a non for profit?

Speaker B: No, we are a for profit. We work with non for profit schools.

Speaker C: Okay. That's why I was confused by, because, uh, I knew you said that. I wanted to come back to that because you said you sold two of these other companies that were similar, Right?

Speaker B: Correct. Our last business was only in higher ed. That business was called Gold Quest. G O A L, Q U E, S D. And there we worked with thousands of colleges and universities around the country, and we sold that business. That was our big win, if you will.

Speaker C: And how much did you sell for?

Speaker B: We sold that for about 14 million.

Speaker C: Okay, well, yeah, so you said you sold one for 14 million. How long ago was it?

Speaker B: That one we sold in 2008.

Speaker C: Okay. And there's one before that you also sold that was similar.

Speaker B: Correct. The one before that was called Link, and that was a national college magazine. We had over 3 million readers. We sold that one to a, uh, company called College Television Network. This was many years ago, in the early 2000s. And college television Network, it was basically music videos and a partnership with CNN News. It was actually news delivered to college students. We would put satellite dishes on, um, college campuses and beam music videos and news to them. And that ultimately, after they acquired us, our whole company was acquired by Viacom and our program became MTVU on college campuses.

Speaker C: Okay, and how much did you end up selling that one for?

Speaker B: Well, that was our first business. We sold that for about 2 million.

Speaker C: So you've had some exits, and it seems like You've always kind of been in this education space.

Speaker B: We have, yeah. What's interesting is at Goal Quest, the business in higher ed actually didn't start out in higher ed. It started out in a different business. The name GoalQuest, we chose that name because the original concept for the business was personal goal achievement. Believe it or not, we ended up in the world of higher ed.

Speaker C: Well, I believe you. So now, uh, I think we got an overhead picture of kind of where you are today. Maybe we can dive in more to your company today to understand it. But now we kind of understood what you sold those other two companies for. Do you want to kind of take it back to when you first started off as an entrepreneur? I don't know if we should start off that first company and maybe we'll dive in more detail about what we can learn or what you can teach the people who are listening about your entrepreneurial journey.

Speaker B: Absolutely, I'm excited to do that. What's interesting is that I grew up with an entrepreneurial dad. My father was a second generation business owner. My grandfather started a business and, uh, it's called Metal Finishing. Basically they put protective coatings on metal parts, mainly for military and aerospace. My dad ran that business for 50 years. My grandfather ran it for 20 or 30 years. Before him, I always was exposed to this kind of entrepreneurial ethos and energy, the ups and the downs, and it was really exciting for me as a kid when I went away to college, I went to Ithaca College in upstate New York. I always went away with this mindset that eventually I'm going into the family business because I loved what my dad did. I always admired him. So I didn't pay attention in school. I just thought, I already know what I'm doing. Whereas most of my friends didn't know what the heck they were going to do after college. But I knew I was going into the family business. College was more of a time for fun for me. But I did get to kind of experience some of my entrepreneurial ethos, if you will. The most exciting things we did. My roommates and I ran a casino in our college apartment, which was fun and scary at times. And, uh, we did that.

Speaker C: Was that legal?

Speaker B: No, of course not. But it was super exciting. This was before cell phones, of course, before social media as well. So we had walkie talkies, and one of my cousins was this huge bodybuilder, so he was the bouncer and he would radio up to us as people were coming up. It was so exciting. We had the best time. We Made thousands and thousands of dollars. Not a huge amount of money, but for a college student, it was a lot of money. And then ultimately we had to shut the place down because we got wiped out by a big winner. And I'll never forget his name, it was Vito Federucci. And he wiped us out in blackjack. And we thought, you know what? We better shut this place down before the death of us. After college, as predicted, I worked for my dad right out of college and he was really the world's biggest ball buster. I mean, he was a bastard to work for. However, I did learn entrepreneurship and I learned how to manage cash flow and how to run a business. And I worked there for a few years. And he, as I said, was a ball buster. I was an obnoxious, I, uh, don't know, 20 something who figured I knew it all because I had already run a casino in my apartment in college. And we butted heads too many times. And after he said, fuck you, you're fired. And I said, fuck you, I quit. Depending on how you look at it, we parted ways and we actually didn't speak for almost a year. It was a really difficult time for us and for my mom and for our family. And I didn't know what the hell I was going to do because as I told you, I went into college thinking, I'm going into the family business. My life is set for me. I struggled for some time to try and find out what I was going to do. And I actually just got a job. I worked at a lighting manufacturer in a factory. I was like middle management, like a supervisor, but I hated. It was just sort of a holding pattern for me until I can figure out what life was meant for me to do and for me to accomplish. And I can remember starting our first business, Link magazine. I was working for this manufacturing company and I had a magazine that I picked up in a Barnes and Noble and it was like a home business magazine. And I read an article about a couple that started a subscription newsletter and had like 12,000 subscribers. And I thought, what the heck? How are they getting 12,000 subscribers on a newsletter around pets or whatever the hell it was, I don't remember right now. And I thought about what could I create where I could get thousands of subscribers? And I thought back on my college years and the fun that I had at college. And I thought, wow, it would be amazing if there was this magazine where college students could see what was happening at other schools around the country, not just socially speaking, but news wise. And I built A business plan. I built a prototype and Link magazine was born. I fortunately, had a college buddy who had an inheritance, and he put money into the business. With that money came the experience of working with him. He was a serious stoner. We ran the business out of his apartment. It was on 79th street in Manhattan. And I'm trying to build this business because, again, I had this entrepreneurial spirit. And especially after parting ways with my dad, I probably had this kind of this energy and commitment to prove to him that I was capable of making it on my own. And in some ways being more successful than he was. I started building this magazine with my business partner. I would come into his apartment in the morning and he'd be sleeping and he'd wake up and do bong hits. And bong water was spilling on our media kits that I was trying to get out to advertisers. He was napping, also known as wasted, on the couch during the day as I was trying to make things happen. But ultimately, we built this magazine and we had major advertisers. We had, ah, AT&T, we had United Airlines, we had GM, major, major advertisers that were spending like $30,000 an issue with us, and we ran that business.

Speaker C: It's good that you kind of understood his role though, right?

Speaker B: Totally.

Speaker C: He had the money, and it's important that in a partnership, maybe you didn't talk about it right then, but you figured it out. Without that guy, you can't even start doing it right.

Speaker B: Totally. But let me tell you something else. Even though his role was money, he was also extremely charismatic because he lived carefree and, frankly, didn't have a care in the world. Everyone loved him. He was funny, he was exciting to be around. He was always optimistic. So that kind of energy also became infectious, not just for me, but when we would go out and visit potential advertisers, despite my initial inclination, which is, there's no way I'm taking you to that fucking meeting. Clients loved him, and because he was so exciting and funny. And that really helped us as well. It wasn't just the money. He really had this great charisma about him as well.

Speaker C: Hey, everyone. I'm, um, here with John Austensen. And actually I interviewed John on episode 270, which is a recent one, and further back on episode 250. So if you want to hear more about his story. But I'm here today to talk about franchise opportunities in 2025 with John. So, John, why don't you just give us a review of Kind of what you do and maybe some exciting opportunities for someone who might want to invest in franchises.

Speaker D: Absolutely, Austin. So yeah, Fran, Bridge Consulting is our company and we guide clients of ours through the exploration process where they're checking out franchises. We focus on what I call non food franchising. So it's all the industries outside of food that their clients are getting into. And it's entirely free to work with us. We simply get a referral fee from the brands on the back end. So none of that's passed on to our clients. So if anyone's interested in identifying the top 10 or 12 opportunities that are open in their market, uh, that could be a good match we'd be happy to take them to through the process. So yeah, to give you a little bit of color of what we're seeing out there first, we're seeing more interest than ever before. I really think entrepreneurship's alive and well in the US and we're seeing that across a range of different industries and different types of businesses at different price points. All sorts of backgrounds getting involved in franchising in new industries. You know, maybe they're bringing a transferable skill set. Some of the types of opportunities that we're seeing interest in would be things like home and property services, you know, very scalable business businesses. Everything from pull out shelving companies for kitchens and pantries to dumpsters to restoration and ah, water mitigation, mold remediation, you know, kind of that non sexy space. Ah, certainly you know they're remodeling companies and others that might be a little sexier if you will, but things like pressure washing, it's asphalt paving and ah, line striping. Again no expectation that you have a background in these. We step into them, you lean into the franchisor and they really support you and teach you and guide you and your team. Other industries would include things like health and wellness. So everything from recovery modalities like sauna, red light, cold plunge, cryo, all under one roof potentially to things like fitness and even sunless tanning. There's a great opportunity in that space that uh, is a nice recurring revenue. Just a great business model that has uh, great earnings industries like kids or pets or seniors. Few examples there in the kids space. Everything from youth soccer to tutoring and stem to trampoline parks, you know, we're always going to spend on our kids, right? We'll also always spend on our pets. Industries like pet grooming or boarding or training, you know, continue to just thrive out there. Even pet more, um, crematoriums which takes a special individual, but there's a business to be had there. All these different types of niches. We see clients of ours getting involved in industries around the senior space. 10,000 people turning 65 every day for many years now. And people want to age in place. And so that can be everything from in home health, which a uh, lot of our clients have gone into, to other solutions like helping people age in place by providing wheelchair ramps and stairlifts and mobility solutions throughout the home. And so again all these different niches and I'd say even though there's a diversity of opportunity, some of the general themes that we're seeing out there are understandable cash flowing businesses, you know, things that aren't trying to be the new trend or the new sexiest thing on the block. Instead it's businesses that should stand the test of time. That's really where our clients are getting in and becoming business owners oftentimes for the first time. And some of these opportunities you can be all in invested at 150,000 and then certainly goes up from there. But I'd say 80% of our clients are getting into things at between 150,000 and 300,000. They're able to step into oftentimes utilizing an SBA loan. Banks love lending to franchises. We see the lending uh, as well as the robs program where they can roll over an old retirement account self directed and purchase the business that way as well. So lots of ways to get involved, all different price points and definitely a variety of industries. And like I said, we're seeing so much interest these days.

Speaker C: Yeah, uh, and just reviewing it sounds like. So you're saying home and property services, kind of health and wellness and then we have kids. Pets and seniors are kind of those hot trends that you're seeing in 2025.

Speaker D: I wouldn't call them trends, I would call them themes that we're seeing out there. Because really the theme is what are people going to spend on regardless of the economy. It's the things they care about. Their kids, their pets, their aging parents, their homes, their health. That's really where we see most of the interest today.

Speaker C: Well, thank you for kind of giving us uh, that rundown. Someone wanted to book a call with you and if they would be a good investor for a type of franchise that uh, you can help them find what's the best way for them to go ahead and reach you.

Speaker D: Yeah, we'd love to engage with them. Come out to our website, franbridge consulting.com, f r-a n bridge consulting.com share your email address. We will send you a free downloadable copy of our best selling book, Non Food Franchising. That could be a great primer. And then if you'd like to take the next step and get on a call, we'd be happy to help.

Speaker C: And again, if you want to listen to more about the details of what John's been up to recently, check out episode 270. Yeah, those are important things that maybe people don't think about either. The extra stuff that maybe financially, obviously it helped them. But it's like if you have someone who is a boring business partner that you almost didn't really like in the beginning, but they had money, it probably wouldn't have worked.

Speaker B: Totally.

Speaker C: You kind of jumped to, hey, you started this magazine, went over to his place in the morning. Can you talk to us in more detail how long it took you to actually get this thing started and then get these advertisers, you're saying 30,000 bucks a issue. But it sounded like that kind of just happened overnight.

Speaker B: No, it didn't.

Speaker C: Let's hear about it.

Speaker B: Yeah, it was deep. We struggled for a long time. I didn't know anything about publishing. I had never been a publisher before, but here I was the publisher of a magazine. Granted, it was a magazine we created out of thin air, but we just started networking. We found people who knew people who knew people that were either in the publishing business and believe me, as I'm sure you know, Austin, so many people said, don't do it. Magazines have a higher failure rate than restaurants. It'll never work. Everyone was fire hosing the idea. And one of the benefits of being young and stupid is that you're just focused on your dream and on your vision. Despite everyone's urging to not do it, we did it and we pushed through. The way we really did it with the magazine is we created a media kit. We created a mock issue of the magazine and we went out to advertisers and we got them excited about what it meant to market to college students and that they were influencers and that they were purchasers and that, uh, you may think that they can't afford a car now, but guess what? They're going to afford a car in the next few years when they graduate. And planting that seed now was a great way to build that brand affinity. And so we sign an account and then we sign another account. We sign another account and then when we built our first issue, a lot of the ads in the first issue were unpaid. We Put them in there to try and create the image of a magazine that was real. Sure, we had a couple of paid advertisers in there, but we had a lot of advertisers in there that we just ran their ads for free. And that actually created, as new advertisers saw that, the impression that this was a thriving magazine and we had readership and the magazine, ultimately the readership got audited. It was super, super exciting. We ran that business for, like, six years. We had 30 employees. We had offices in Manhattan. Then again, as I mentioned, we sold that business to college television network.

Speaker C: Okay, so you did that from basically 93 to 98 is what I'm seeing here.

Speaker B: Correct. You weren't even fucking born yet, Austin.

Speaker C: I was born in 85, so. But I'm really curious. It's like, how long did it take you to get this thing started? Because this is super interesting to me. If anyone who is younger and has a similar thing, how did you get these advertisers? Did you start doing the magazine first, or did you have to get writers? And I think that was smart. What you also said with the advertisers, uh, at first putting in free ones to make it look like at least you were legit.

Speaker B: Here's the thing. We had to produce issues because we did have some paid advertisers. Our thinking was, well, if we have to produce a real magazine because we have paid advertisers, we might as well make that issue look as great as we could. So we went to the other advertisers that we were trying to get into the publication and offered them ads for free. And that created this image that this was a really exciting new magazine. And from that point forward, other advertisers started signing, um, on. Even advertisers that we gave ads away to for free in that early issue, or maybe we did it twice. They would start paying ultimately because even they felt the energy and excitement of the magazine.

Speaker C: What made yours different? That's what I'm curious as well.

Speaker B: What made the magazine different?

Speaker C: Yeah. Than your competitors? Because I didn't know that you said magazines have a higher failure rate than restaurants. I would have no clue what that.

Speaker B: Uh, I didn't know that either until somebody told me to try and talk me out of it.

Speaker C: Right.

Speaker B: And they were probably right.

Speaker C: Yeah.

Speaker B: But what made ours different? Well, you have to remember at the time, there weren't national college magazines. There were Time and Newsweek and Life magazine or whatever the hell it was. There were newspapers, certainly college newspapers, but there really wasn't anything to tie college students together across the country. Where a, uh, kid going to the University of Alabama could see what was happening at University of Miami or ucla, or where a kid like me going to Ithaca College could read about exciting things that kids were doing at other schools. And that was the model again. The spark was me reading about this couple that started that subscription newsletter about pets. And that's what triggered this. That's what got me thinking, there's gotta be a bigger audience out there or an audience as big as pet owners that want to connect with each other, that want to learn from each other. And my fondest memory at that point was college. But I always, I went to Ithaca College. That was a small school. I always can remember thinking, I wonder if I made the right choice. I wonder if I should have gone to University of Alabama or if I should have gone to, uh, University of Miami or whatever the hell it was. And I thought at the very least would love to know what it would be like there. That was really the motivation for building this. And so we hired freelance writers to start writing articles for us. We would interview students. They were primarily the editors of the school newspapers at schools because they want to talk a lot, they want to write, they want to get their name in a national publication. Amazingly, we had a million circulation and 3 million readers. The magazine was, uh, at thousands of campuses around the country. That got us to the point where we were attractive to other businesses. And College Television Network reached out to us and said, we've got the tv, we're trying to build a media company here. We want the magazine. And our, uh, audience is college students, hence the name College Television Network.

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Speaker B: so they acquired us. That was a super exciting time. We were able to take Some money out. We certainly had to pay my partner back and his family. And then I worked there for a few years. And let me tell you, I don't know if you've got this experience as well, but when you're running your own business and then ultimately you're working for somebody else, it's a whole different world. And there are some people that are comfortable with that. There are some people who frankly prefer that. And I found out that I was not one of those people. I needed to call my own shots. I needed to control my own destiny. It was a very difficult time for me working for them. And ultimately I sort of navigated my way out of that business on to the next one.

Speaker C: So how long did you work for them?

Speaker B: Oh, uh, about two years. I had a non compete. When you're selling a business, typically the owners have a non compete. Just as that was ending, I negotiated my way out. I met Tracy, my Tracy Howe, my wife and current business partner. Actually, I met her while running my magazine. She worked for our rep firm in Detroit in the Midwest. She handled all the automotive business for us. I, uh, met her on sales calls and after I left College Television Network, she and I got together and we started our next business, Goal Quest.

Speaker C: When you joined the College Television Network, did you get any equity then or you just paid straight salary from what you had been doing before and when you sold your business to them?

Speaker B: We got cash, we got equity, and we had big salaries. College Television Network, I was probably making $250,000 a year in salary. We had already gotten cash from the acquisition and we had equity in the business.

Speaker C: That sounds like a very big win at, uh, your late 20s at this point.

Speaker B: Yep, I was in my late 20s. It was, you're right, it was a very big win. It was super exciting for us. But nothing, I think could suppress the entrepreneur inside me, which again, I think trickled down from my dad. What was really fascinating and you know, as I get to talking about my own kids, it's amazing when you see a parent go through the highs and lows of building and running a business and somehow as a kid you're equally intrigued by the lows as you are the highs. And that's kind of an amazing thing to think about. And yet I still wanted to be an entrepreneur. And yet many of my kids, I have four, many of them still want to be entrepreneurs, but they're seeing it not just from my perspective, but from my wife's perspective as well.

Speaker C: Did you felt like you had made it as far as you said, you kind of were driven to prove your dad wrong or show him that, hey, you can make your own company. Did you have that feeling once you sold?

Speaker B: I did. And granted, I was in my late 20s. In a sense, I was still a kid. It certainly wasn't enough money for us to retire on, or for me to retire on. I was single.

Speaker C: And you lived in New York, right?

Speaker B: Exactly, and I lived in New York. But I thought to myself, this can't possibly be the end. This is just the beginning of my journey, for better or worse. Fortunately, it ended up being for better, although there were a lot of bad experiences along the way, many of which I'll share with you. But Tracy and I, when we started working together at the magazine, she was at the rep firm. She didn't really work for the magazine, but we spent a lot of time together. And I found her to be as entrepreneurial as I was. Her dad was an entrepreneur as well. We really clicked in more ways than one. Not just romantically, because we're married now, but also as business partners. After I left College Television Network, she and I developed ideas for different businesses that we wanted to start. And the next business was Goalquest. And that was super, super exciting. That's the one that really put us on the map.

Speaker C: Did you have an idea for Goalquest, like, totally figured out before you left? Because I think that's something people can learn from is, did you just quit and let's brainstorm? Or you had something ready to go and you're just ready to do it right after you got out of college?

Speaker B: Television network Let me just make a point here of clarifying. We didn't have the idea for GoalQuest. We had an idea for Goalquest, and it turned out to not be what GoalQuest ultimately became. Tracy and, uh, I had this cockamamie idea of, um, a website for personal goal achievement, hence the name Goalquest. And the idea was that there would be all of these goal coaches, all of these virtual goal coaches with different Personas. I can remember this because we created it. We had Sergeant Miles Stone, AKA Sergeant Milestone, who was like this drill sergeant that would, like, pound your goals into your head, if that's the kind of motivation that you needed in order to be successful. We had Mistress Achieva, who was like, this dominatrix, who would motivate you, if that was your method of motivation. We had Ida Rosenquist, the old Jewish grandmother, who would motivate you and tell you you'll be successful. We had Questy Brink, AKA Christie Brinkley. Who was this hot supermodel that would motivate you to be successful? And, uh, we thought it was the most brilliant idea in the world. We tried to get funding. This was a B2C business. We couldn't go out and sell the service, the product that we had built to companies. This was selling it to consumers. And ultimately the only way to build that business really was with, ah, capital, was bringing in investment. And we tried for a year or more to bring in VCs to bring in investors into the business. We could never get the business funded. And ultimately, after I left College Television Network, sure we had some money and Tracy and I were living in the city together again, living in the city. It was expensive and we were trying to build GoldQuest. We were basically living on our savings, trying to get that business off the ground. And we spent, as I said, a year plus trying to get it funded, couldn't get it funded and burnt through whatever savings we had. And I can remember we were sitting in this tiny Italian Cafe on 55th street in Manhattan, and Tracy and I are looking at each other like, what the fuck are we going to do? We're virtually broke. We live in New York City. It was bad. And Tracy said, let's go back to our roots. Let's go back to this concept of college marketing. Because Link magazine was so successful and we knew that space intimately, we knew college marketing. And so we did. We basically pivoted, if you will, the idea of GoalQuest into a completely different business. It had nothing to do with goal achievement. We built a business around helping colleges recruit, enroll and retain students. And GoalQuest was born in the world of higher ed. It all came back to connections. I can remember one of the guest writers we had in LingQ magazine was a guy by the name of John Gardner, and he was the guru on student success and wellness. It's amazing, frankly, how, uh, 20 years later, it's all coming back to you. Student success and wellness. But he wrote articles for us in LingQ magazine and he was the national guru and he would write about what it takes to be successful in college. Tracy suggested, as we were sitting in that little cafe, down to our last probably hundred bucks in the bank or whatever it was. Reach out to John Gardner, see if he has any ideas on how this concept of goal achievement can be used in higher ed to help students be successful. And after explaining the idea to him of goalQuest, which of course he had no interest in, he taught us about what's called enrollment yield, and we had no idea what Enrollment yield was. And ultimately that was really that the crux of what goalQuest was the business and services that we provided. So enrollment yield, in case you don't know, is the percentage of accepted students that ultimately enroll at the school. A school might have 1000 accepted students, but if only 200 of them enroll as their freshman class, they have a yield of 20%. We knew nothing about the world of enrollment yield. We didn't know who we were supposed to market the program to. GoldQuest in its new iteration. And John Gardner said, yep, you want to go to the DPS of enrollment? So we started cold calling DPs of enrollment. We started repositioning what GoldQuest was. It's a tool that is going to help drive enrollment yield. If your Yield is only 20%, we're going to get it to 23% or 24% by engaging admitted students and getting them excited to go to your school. And you have to remember, this was maybe 15 or so years ago, and the world of enrollment yield was very, very unscientific. Um, it was not digital. Getting back to the discussion you and I had earlier about call centers, it was students in call centers calling admitted students and saying, hey, Austin, what do you think? You've been accepted to ucf. Uh, are you planning on going? And at the time, you could get people on the phones, but now you can't. That model was antiquated. And we brought that whole model of enrollment yield into the digital world. And then we found that enrollment yield is only one piece of the enrollment process. First, there's Search, where they're buying names of prospective students to generate inquiries. Then there's the inquiry to application conversion stage, where they're trying to get inquiries to actually apply. And then after students are accepted, then there's this world of enrollment yield. And then after enrollment yield, when students enroll at a school, there is the world of retention after you get students, keeping them. So instead of selling that product to VPs of enrollment, we started selling that product to VPs of student affairs. We would sell accounts over and over and over again. I can remember our first client was Dickinson College in Carlisle, Pennsylvania, and they spent $15,000 with us. And then maybe two months later, we signed Kent State University for $150,000 a year. And we were like, holy shit, we are really onto something here. And we just started signing account after account after account. And I'm simplifying because there was a lot involved in selling those accounts. The subtleties behind the scenes are just, frankly, they're fascinating. For me to think back on some of the shit that we did, it's like, wow, I can't even believe we did some of these things. I'll share some of them with you since as I told you, we were virtually broke because we had a pivot goal quest into a new business. And sure, we were starting to sign accounts, but we also were. We had to hire programmers, we had to hire developers, we had to hire content developers because the business goal quest in higher ed, we had to develop original content for colleges and universities. We had hired designers. And so we were burning through much of the cash that we were bringing in from signing clients. We were still struggling and we had no money.

Speaker C: Do you mind if I pause you there? Because I know you're trying to get their conversion higher. Right. To have the more people come in. But what exactly was Gold? Was this like a website or something to help them?

Speaker B: Yep. Think of them as like GoldQuest was these white labeled micro sites. Sure, UCF, I'll use them again as an example, has a website. But this became a micro site where our team was custom writing content for the school to get prospective students excited about them. We were creating a community. It was a social community. We called it Upeers, which still exists today in our new programs. Upeers was a closed social community where students can meet their prospective future classmates. And what we found was that those connections were actually driving yield for schools because prospective students wanted to feel like they knew other kids that were going there. That became infectious. And it all sort of drives excitement and enthusiasm about the school to help drive enrollment.

Speaker C: And what's kind of interesting to me is that, uh, you went back to. You're trying to do the B2C thing. And I know I cut you off on your story. We can get back on it in a minute, but it's like how much harder must have been trying to go B2C versus before you're almost B2B when you're doing working with these colleges. Right. When you're selling the magazines on there. And then you went back to that sort of model to actually find out where the money is versus, like having to gain, I don't know, tens of thousands of consumers on your original idea for Gold Quest.

Speaker B: Exactly. It was the epitome M of a pivot. We went from one business idea that was, as you said, B2C back to this concept of B2B where we were, instead of trying to sell to individuals personal goal achievement, we were selling to colleges and universities products that would help drive their enrollment and retention.

Speaker C: Their goal achievement, if you will.

Speaker B: Exactly. Yeah. Well said, man. Hey, I didn't think of that. Some of the crazy things that we did, we would travel the country, mostly by car, hundreds of thousands of miles. We had computer servers in our kitchen, in our apartment, under the kitchen table until we move them to COLO facilities. Since we had so little money, we couldn't really fly. And I remember I told you we signed Kent State University. We were based in New Jersey and New York at the time. Anywhere that was in, let's call it a 12 hour driving radius of, um, New York, New Jersey. We wouldn't fly because it was too expensive. Here's how crazy we were. We would go to sleep at 6pm and we would set our alarms for midnight and we would wake up and we would drive through the night, arrive at a school at 8am In a meeting in Ohio or wherever it was. And we did this over and over and over again. And we would pull into a McDonald's parking lot, wash up, put our suits on, and walk into that meeting like we owned them. And that was, I think, an example of the things that we would do that really helped build our business. I mean, said another way, we basically faked it until we made it. And when we walked into those meetings, they thought we were a real business. We had business suits on and we spoke eloquently, we had an incredible presentation. And we would go from meeting to meeting to meeting. We'd go from Kent State to Akron and then Dayton or uh, wherever it was. And the amazing thing was that we spent so much time in the car that the car became our think tank. We weren't in an office, we were out in the field. And so as we drove from meeting to meeting to meeting, we would fine tune our presentation. We'd sit in the car with our laptop and we'd say, did you see the way they raised their eyebrows when they saw that slide? Or did you see the way they shrugged their shoulders when they saw that slide? And we would get feedback from prospective schools or clients along the way about how to make our presentation better and how to hone it. And that's what we did. Meeting after meeting after meeting. We probably visited thousands of schools around the country, again mostly by car.

Speaker C: And at least in the early years, you said you did multiple things, whether it's getting these students together to meet each other and all this other stuff. But in the very beginning was the only thing you were making these websites to put more engagement because you said you had like servers at Home and stuff like that. I didn't even know you would need all that to drive these websites. Was that for, like, security reasons or something?

Speaker B: No, we were building microsites for colleges and universities.

Speaker C: But why did you need your own servers? You couldn't just go online like you can today?

Speaker B: No, uh, no, uh, back in the day, there was no cloud. Everything was hosted on our servers. And remember, colleges were hiring us to communicate with prospective students. And in many cases, they had hundreds of thousands of them. We had schools that would upload a half a million prospective students or purchased names. And our job was to try and get a pulse from those prospective students or suspects, convert them into inquiries, and then get those inquiries to apply, and then get those accepted students to yield. Clients would pay us in different phases or stages of, uh, the enrollment cycle. I think the smartest thing we did is we recognize that colleges have this enrollment cycle and that there are different phases in the cycle and that they don't necessarily need help in all of those stages. So, uh, a college might say, we get enough inquiries and we get enough applications. Our enrollment yield is too low. We need to increase that. Instead of forcing them to buy the whole shooting match, they could only if they chose to buy our yield program. And These programs were 30 to $40,000 a year apiece. Kent State bought four of our programs, and it was like 115 or $120,000 account for us.

Speaker C: How did you know what the price he's at?

Speaker B: Uh, simply put, we guessed as we were feeling out the market, we tried to get a sense of what the market would bear. We did some sort of reverse analytics, what a product like this would be worth. For example, we looked at a college and we said, okay, if their annual tuition is $25,000 a year, remember this is 10 or 15 years ago, and we can get them 10 more students. That's going to generate X amount in revenue. What would it be worth for them to get 10 more students? Well, 10% of that cost 25, $30,000. We would price the programs based on kind of reverse engineering the math, based on the impact in enrollment we felt our programs could generate.

Speaker C: That's super smart, because I don't think a lot of people would necessarily think like that. But, yeah, keep going.

Speaker B: And frankly, we do the same thing in our current business. That's how we figured out how to price our programs. But then at Goal Quest, we did something even more amazing. And again, all of the ideas in GoalQuest came from feedback from clients and schools that we were meeting with and clients in schools said, what you're doing for prospective students, could you do it for parents? Because they are real influencers. And so our parent programs were born because of course we said, sure, we could do that. Instead of writing content for perspective students to get them excited about a school, we would write content for parents of prospective students. And the key there was, as I said, equipping parents to have smart conversations with kids. And oftentimes parents, especially parents of first generation college students, they don't know what to say, they don't know how to guide their son or to the right college. We were building these programs and no other schools other than our clients were doing this. So it had a tremendous impact on driving enrollment for the school because the parents would get excited. The parents would feel like, you're not just trying to sell me, but you're providing me service. And it drove affinity for their school.

Speaker C: And the reason I asked about the pricing. Yeah, you kind of guessed, but yeah, you back ended it. So it was an, uh, educated guess. But you didn't have any competition at the time, did you?

Speaker B: I don't think we really did, to tell you the truth.

Speaker C: Yeah, because pricing wise, sometimes that's how you figure it out. But if you don't have any, the smart way of you looking at it is just back ending. Like how much do you think would be worth to them? Some people might not even do that simple math that you're talking about and say 5,000 bucks per year. You knew how much it costs to have these developers and everything for you. So I mean, what was your profit margin like on these?

Speaker B: Huge. We made so much money on those programs. It's a different world today because we're back in that business. It's a, uh, completely different world, partly because there's so many competitors. But you're right. Back in the day, there was hardly anyone doing what we were doing. And listen, man, it was not all fun. Sure, we had a ton of fun, fun on the road. We lived on the road visiting schools. We worked out. We always made sure we were physically fit. We would work out in college rec centers. After the meeting, we would ask the VP of enrollment if, uh, he could give us a pass to go into the college rec center and we would work out there. But we also had many tears, many fights, many struggles, but we never quit. We always felt that our fastest route to success was to keep pushing forward, not turning around and getting day jobs. I could remember we had to borrow $600. We were stuck in Michigan visiting colleges because we had driven there from New York. And I could remember Tracy's dad, who lived in Michigan, we had to borrow money from him. We needed gas money. And he was like, what are you guys doing? This is the end. And she said to him, dad, we are closer to making it than turning back and getting jobs. And he lent us that money and we paid him back. And we signed an account on our way home. Another maybe 50 or $60,000 account. I can remember being poor even as the business was growing. Remember, everything that we were spending money on was to keep the business moving forward. It was hiring people, it was buying equipment. Back in the day, there was no cloud. You had to buy $20,000 Dell servers in order to do this sort of thing. The economics of a business like this have completely changed. But Tracy and I had a carton of eggs in our refrigerator. I can remember Tracy wanting to go out for pizza and a movie and me telling her, we can't do both, we can only do one. I could remember technical problems. I could remember servers going down. I could remember editorial errors, human errors that almost cost us our business. In one case, our program sent acceptance letters to thousands of students from one of our clients, and they were not accepted students. And I thought, holy shit, we're fucking dead. We are dead. The business is done and somehow we got through it.

Speaker C: How'd you get through that? Because I would think so, too.

Speaker B: Fuck if I know, man. I honestly don't remember how we got through that one.

Speaker C: I mean, especially the kid who's so excited that's their dream school. And then you're like, oops, never mind.

Speaker B: Yeah. Ah. And you occasionally, occasionally, when you're reading the news, you'll hear about these horror stories that do that sort of thing. We were one of the first to do it, but we never did it since, which is great. And we've had millions and millions of students in our program.

Speaker C: Important to learn from your mistakes. I think that, uh, we can all, uh, learn something from that. Can I go back to this carton Eggs. And when you barely had any money, was this still in the early years of goalQuest?

Speaker B: It was. It was in maybe the first or second year of the business where, sure, we were signing accounts, but we also had to hire again programmers and content developers and designers and buy equipment. And Tracy and I put ourselves last in every case. We had to pay people. We had to pay the colocation facility to keep our servers up. And sure, they had been shut down on occasion. And we would tell our clients, we shut down for maintenance. I mean, it was this forced maintenance. It wasn't forced maintenance exactly, exactly. But all of these situations, we somehow found a way to navigate ourselves through and came out on the other side.

Speaker C: It seems like to me, the first year of GoQuest might have been the hardest thing because you're trying to do the business to consumer. That's not working. Then you finally pivot, and then you're like, you're seeing the potential of all this. You're saying you're making good profit margin, but it sounds like the problem is. And you actually said this in one of our. We have a questionnaire for everyone to fill out. The problem is like the cashflow because you have to go buy these $20,000 servers or hire someone. So even though you might be making a good profit, it sounds like on a first couple of deals, you're still having to keep invest for the future. Is that what's happening?

Speaker B: It is, but there's another issue related to cash flow. Our business was in the education space. And unfortunately in the education space, they're on July 1st fiscals, they don't typically pay until the summer when they get their new fiscal dollars. In many cases, if we were signing accounts, we would have to basically bankroll them. We would say, yeah, sure, you could pay us in July, but we would have to incur the costs of building those programs. So come July, we would have millions and millions of dollars in receivables that we were collecting. But up, uh, to that point, we were struggling. We were starving. We were trying to figure out how we were going to make payroll year after year after year. And you know what, Austin? The problem got worse as the company grew, because as we got bigger, as we signed more accounts, as our revenue grew, we would be bankrolling these higher education clients until the summer. Sure, we had a windfall of cash in the summer, and that's when everyone was happy. But in the rest of the year, we basically hibernated and we, we lived on a very, very tight budget.

Speaker C: So even if you sign someone like August, would you have to wait a whole, like 11 months to get paid?

Speaker B: Not usually in August. I would say that come December through the summer. So it's six or seven months. As we were signing accounts during those periods, in most cases, clients could not pay us until the summer. We had to say it's fine because we needed to sign that business. And we knew that those receivables were going to be good. And it was like forced savings for us. We knew we would ultimately see that Money. So we hunkered down and we hibernated, and we starved through the winter, and then come the summer, we had a windfall of cash, and then we go through it again the next year.

Speaker C: I could see from your perspective, too, this is from the college education system. So that money is locked up, you have a contract and you're good to go, versus if you were doing these for random clients. I don't think people would do that. Because you're like, what happens if they're going to go out of business or something like that? Versus having a government guarantee that you're going to get it back.

Speaker B: Exactly. That's exactly right. There was virtually no bad debt. These were all public or private institutions that had a ton of money. It was just to your point, it was an issue of when we were signing them and when they were able to pay us that cash flow management. And I'll tell you, a lot of it goes back to what I learned from my dad. Learning how to husband dollars, learning how to find a way to make payroll so that you're not spooking your employees. And if it meant you're not taking payroll yourself as founders, then that's what you're doing. And frankly, we did that a, uh, ton. And I, uh, can remember thinking to myself and Tracy was thinking, we can't go on this way. We've got to shut the business down. We can't live without getting paid. And then we'd sign another $200,000 account and another $100,000 account, and it would just keep going. And we keep seeing these signs. We'd look down the road and all we would see are green lights. It was just an issue of getting there, of having enough gas in the engine to get there and to get, to go through all those green lights. And we did. But there were a lot of pep talks. Tracy, who didn't. She wasn't the founder of Link magazine. She worked for a rep firm. As I mentioned, GoalQuest was her first entrepreneurial endeavor. I had already been through it. I went through the highs and the lows. But for her, she would be crying hysterically, looking for a glimmer of hope to hang on and to persevere. And we did, and we ultimately, we were acquired. We sold GoldQuest, with over 1,000 clients to a private equity firm. And then the next chapter was written. We worked for that acquirer for almost

Speaker C: two years before you actually ended up selling it. Because, uh, again, you're saying year after year, it seemed like you might have to close or you're just getting worried about the cash flow. At least having the revenue come in, you're seeing that come. But personally, did you feel like you had taken a step back as far as if you compared yourself to when you sold the magazine, it sounded like you had a good amount of money and you're making a good salary and you had equity in a new business. Did you ever think like, wow, maybe I made it back then and I'm not as smart as I thought I was business wise?

Speaker B: No, in a weird way, even though we weren't taking salaries, even though we were starving, even though we didn't have food, even though oftentimes we didn't have gas money, we knew we were building something of, uh, value. We knew that eventually this company is going to be acquired. We knew because of the revenue that we were bringing in. Even though there were cash flow challenges. Revenue is revenue to a bigger company, to a private equity firm. They don't care so much when the client is paying. They just want to see the revenue. And we knew that this company ultimately was going to be of value to someone, or even if it was never acquired, that the revenue and the cash flow would normalize to a point where we weren't in these cash flow troughs year after year after year. Even though we burned through all of our savings and even though we had no money to live on, we banked on the facts that there was going to be an exit.

Speaker C: So when you did exit, how did your father in law feel?

Speaker B: My dad has always been proud of us. My dad has always wanted me, and in this case Tracy, to be successful. And he was, and he still is. He's super, super proud of us and he's always been there for us. Like I told you, that year or so that we didn't talk was super, super tough year for us. So we sold Goldquest. We sold it for about $14 million.

Speaker C: Real quick. Yeah. How about you're saying the father in law too, was he ever worried about y' all because he was the one who had to loan you like 600 bucks? One.

Speaker B: Yeah, he was more of a worrier than my dad was.

Speaker C: Yeah, because your dad understood how this thing goes.

Speaker B: Maybe because it was his daughter, right?

Speaker C: Yeah. That's why I thought it would be funny to actually hear what he thought once you.

Speaker B: Exactly. Oh, man. We would get it talking to from him. We, uh, would probably drive to Michigan 10 times a year because we had a lot of clients in Michigan and Ohio. And it was also a way for Tracy to see her dad, because he lived in Michigan. And he would give us a talking to over and over and over again. What are you guys doing? If you have to borrow gas money from me, obviously this is not working. I mean. And he meant well. He really did. He just didn't want to see us struggle the way we were struggling. We were like, fuck it, we're in so deep. Can't turn back.

Speaker C: Right. And he had a free place to stay if you went to his place.

Speaker B: Right, exactly. We stayed at her grandmother's apartment. We stayed at her cousins. I mean, there were plenty of family members in Michigan.

Speaker C: So you sold and you started working for this company. How old were you when you started working for the new company?

Speaker B: I don't know, man.

Speaker C: I'm looking probably about 40, 42 somewhere in there.

Speaker B: We sold Gold Quest in 2008.

Speaker C: I don't know, 20, uh, plus.

Speaker B: Yeah, whatever. You know what was amazing? We worked for them, but this was a different situation. Tracy and I, after pouring blood, sweat and tears into building GoalQuest for seven or eight years, we sold that business and we had a lot of money in our pockets now. It was equally painful working for other people. Even with money in the bank. We just couldn't. Like, at, uh, that point, she had become an entrepreneur. She didn't know anything different. GoalQuest was her baby. It was the only way she knew how to think was to think like an entrepreneur. And we couldn't work for a big company that was owned by banks and watch all the shit that they did to not build businesses the way that we felt that they should be built.

Speaker C: What did they do that you wouldn't have done? Just curious, because this is probably the hardest part. It would sound like seeing something, why are you doing it this way? But you don't have to get.

Speaker B: I'll give you a couple of easy examples. They felt it was unreasonable for us to drive outside of a four hour radius. So anything outside of a four hour radius, we had a fly. That drastically increased our expenses. They also felt that it wasn't appropriate for Tracy and I to be sharing a room. Hey, we were romantically involved at that point. We were married, or maybe we weren't married yet, I can't remember. And they felt that we needed to be in separate rooms when we would travel with other people. If we had a guy in the car with us, traveling with us, that guy would share a room with me and Tracy would get another room. But they were not about sharing rooms. They had more expensive office space where I'm like, do we really need this. We were in this loft on 38th street or 39th Street. And then ultimately we moved down to Soho, which was exciting for us, but we got a great deal on a space and then they moved into this super expensive space, like quadrupled our rent. They felt like hiring all of these kind of industry bigwigs would drive the business forward and it was the right way to go. But it ultimately didn't work out. They actually, that bank, that private equity firm, acquired four education companies at the same time and they wrapped us all up into one. And ultimately all of the four CEOs left the company or were fired. I was fired.

Speaker C: Uh, so tell us about the firing.

Speaker B: I just butted heads. I kept fighting with them that, uh, that's not the way to do it, that you're going about it wrong, that we tried that model and it didn't work. And they just didn't listen to us. And even though they had paid us for Gold Quest and we were millionaires, I couldn't let go. I couldn't watch them destroy what we had built. And yet ultimately that's what they did. And they did that with the other companies as well. And it was a sad, sad thing to go through.

Speaker C: Especially when you have to think back about all the time you were driving everywhere, going to McDonald's and changing. Not even about the money. Like you said, uh, you got to think about all the time that you put in to build it to that. And then they just keep running up the expenses. And that would get to me too.

Speaker B: Exactly. But in terms of becoming a millionaire, after we sold GoldQuest, we lived our life because we had spent eight years working our asses off and traveling and driving hundreds of thousand miles. We bought a big house on a farm. We put on a multi million dollar addition, we put in a pool. We built a barn and a riding ring. We're all into horses, like an 11,000 square foot house. We spent $250,000 on horses. We bought another farm in Palm Beach, Florida. We lived in Florida every year for three months. We bought a, um, Maserati. We had Range Rovers. I'm telling you, man, it was out of control because I guess we felt like we had starved for so long that we were entitled to live life after having put in everything that we did. We had Rolex watches and jewelry and we would travel to the south of France and our kids were in private schools. And we were charitable also. We helped friends, we helped family, we made many donations. But you know what, man? Much of what I just mentioned we burned through to start our last business and our current business, Evolution Labs. It didn't just go to Evolution Labs. We still. Even though I thought we'd be so much smarter this time around, we went through two other business ideas and burned through millions of dollars trying to get these business off the ground. And they both failed until we got to Evolution Labs, which is a winner. That's the one that we'll plan on selling that one in three to five years. And we learned a shitload of stuff throughout these experiences. I've got kind of a whole list of these things, and frankly, I'm writing a book on all this stuff, which I'm really excited about.

Speaker C: It's a book coming out soon. I mean, I don't know if it's a good time to plug it now or.

Speaker B: No, hold on. Let me just share some of these things with you. I think it's super interesting. So the first thing we learned is perseverance. It's like the secret ingredient. We pushed when most others would have quit. And that really made the difference in everything we did. We also did things that others wouldn't even consider doing, like driving through the night, no vacations, working 24 7. Tracy. Like, uh, she closed business deals from the hospital bed after delivering our first child. And she would go to an investor meeting four days after she had a C section. Perseverance is the first thing. The second thing we did and that we learned was that volume is key. We did more meetings and made more calls than normal. Normal. And that also converted to more business for us and grew our business faster and bigger. We learned about the pros and cons of hiring friends. Mostly cons. We made that mistake many times over. We were torn between hiring people that we could trust versus those with experience. And I'll just tell you from our experience, never hire friends, even if you love them to death, even if they need a job. Let me tell you, it is a lot easier firing strangers than firing friends who are unfortunately now our ex friends. Because of that experience.

Speaker C: Yeah. Uh, because I know you're going off kind of a list of which I appreciate. You might be one of the most prepared people that I've had on which I definitely appreciate you writing down all these topics you want to hit on. But do you mind giving us one of these experiences, firing the friend? Because I think it's important that people remember, like, how much this must have hurt you. So when they think about hiring a friend, they'll come back to the story and remember it.

Speaker B: It did in Goal Quest. We hired a friend who ultimately ended up suing us. And we were wrapped up in a lawsuit for years while we were trying to build our business. That motherfucker. That motherfucker ultimately got a check for millions of dollars after we ended up selling the business. And we ultimately made amends. You know, he's not someone who's in our life right now, but he. Did you ever hear of, um. It's like some seminar that you go to to reflect on your life? Well, he had apparently gone through that and so called me and Tracy to make amends. And we don't hold grudges, but he put us through fucking hell. And frankly, even in our current business, we hired a great friend and we had to fire him. And we lost that friendship. Him, his wife, the kids. This guy is like, he's the godfather to two of my children. And we destroyed that relationship because we had to fire him.

Speaker C: Even with the lawsuit. You were saying before, even if it's, again, not about the money, but it's the draining of the energy, I would imagine. Imagine why you're trying to build a thing. Like having to think about that.

Speaker B: You're so right. And it was awful. And how we kept going while that dark cloud was over our lives for years is a sheer miracle. And he's lucky that we kept going because he ultimately became a millionaire from that. Another point, putting the company and employees first. As I told you before, everyone got paid before we did. We skip payroll over and over again just so we can pay everyone else. And so that we had money to travel, usually gas money for driving. I talked to you about the importance of pivoting. Remember with GoalQuest and each of our businesses, we pivoted multiple times. We learned not to be afraid or even ashamed of veering from our original ideas, but to embrace what we call the racetrack. When we view the business as a racetrack with lots of curves and S's. We learned to enjoy the ride and lean in, which of course is now a popular phrase. We also learned that the fastest and easiest way to bring money into a business is by generating revenue. It's not by capital raising. And, uh, because generating revenue also has other critical benefits, like product market validation, everyone thinks they need new investors to start and run a business. We think that's bullshit. We think that revenue is the fastest way to bring money into your business because revenue solves problems. And ultimately it got our company sold. I told you, faking it till you make it. I mentioned us driving through the night to get to Morning meetings, there was this sense that we were a completely buttoned up business, when in fact we weren't. Our servers were in our kitchen under a table, and we had just changed a half an hour earlier at the McDonald's up the street from your school.

Speaker C: Hi, I'm here with John Austin again. And if you didn't know by now, he's our first repeat guest on the podcast. So, you know, he's a special guy. Uh, John, why don't you tell us a little bit about what you do and how you might be able to help our listeners.

Speaker D: Yeah. At Fran bridge Consulting, it's Inc. 5000 business we built up. And that's because we've been able to help so many clients step into business ownership, oftentimes for the first time or in some cases the second or third time. And we focus in an area that I've dubbed non food franchising. You know, with that, again, we help people with all different types of backgrounds step into business ownership all around North America. And, uh, you know, they get the support of the franchise system. We help educate them along the way. And the beauty of this model is, Austin, it's entirely free to work with us. We simply get a referral fee from the brand on the back end. None of that's passed on to our clients. You know, we've been able to help quite a few of your listeners in the past and would love to help even more.

Speaker C: Can you give us like, a timeline of how this process might work when working with you to find a franchise?

Speaker D: Yeah, we try to keep it as efficient as possible. And just like everything in franchising, there's a defined process of how we go about it and how the franchisors would engage with you. And our goal is to identify the top 10 or 12 opportunities for you in your market, uh, that are available. And so it would start out with an introductory call with us, again entirely free. Uh, we'd get to know you, have you fill out just some very simple paperwork to get a little bit more of a profile. And then we'd go to work on our end to identify, uh, based on our relationships, based on what we're seeing out there in our past experience. Experience. What are those top, let's call it a dozen opportunities in your market would come back then and present those to you. Uh, you would try to narrow those down to maybe three or four to then have a conversation with that. We would tee up and from there the franchisor will take you through a series of calls and presentations, really Exposing you to the business. And um, you'll get to talk to other owners in the system and hear about their experience. You'll get to read through their fdd, their franchise disclosure document where they share all their historical results and information. Again, trying to get you as much data and info as possible leading up to what's called a discovery day. I'd say typically that's around 45 to 60 days out from when you have that first call. We do have some people that'll move faster or slower, but usually it's around that two month mark and that's where they would fly you into their home office, spend a day or two with the franchisor and their team and you know, make sure you get your questions answered but also make sure it's a good culture fit. You know, franchising is a partnership and again we want you to go in eyes wide open and really feel confident uh, when you go to sign that franchise agreement and it's not that you're launching the business right after that, you know, typically there's site selection. If it's a physical retail customer facing build out that takes a little bit of time or in a lot of cases our clients are getting into service based businesses that don't require a physical location. But still there's going to be some degree of training and prep work that the franchisor would help you with to launch that business, you know, shortly thereafter. As far as how do you find the right franchise? Again you can do a lot of googling. The problem is there's, there's so much noise out there. Even the top 100 franchise lists or top 50 lists from different publications, usually companies are paying to be on that list. And so it's just a PR move for them. So again, so much noise. It's important to understand what's going on, you know, behind the scenes. What is that leadership team, what is their background, what do they bring to the table, how do they support uh, their owners? And again that's based on our rich history and what I call non food franchising, all these other industries. We can help our clients really understand, you know, what are those opportunities that if we were in their shoes, we would want to be considering there in their market.

Speaker C: And you said 45 to 60 days is kind of. Most people take to make a decision and they might go out to a franchise wherever they're located. But after that what would you say? What would be a typical timeline finally put up money to close on a franchise? Are we talking about like six months from now after that, or like give us a timeframe so everyone can listen and kind of understand that.

Speaker D: Uh, yeah, to level set, I'd say most of the opportunities our clients are getting into are between $150,000 and $300,000 from an all in investment range, including working capital, certainly some on either side of that. But a lot of our clients are using SBA loans and so it does take a little bit of time, uh, for that money to hit. Some will use an old retirement plan and roll that over through what's called the Robs program, which is kind of a neat way to purchase as well. So, uh, we work with our clients on that funding strategy. What I see most often is at that, let's call it 60 day mark, where you're ready to move forward and you're signing the agreement. You're usually paying a deposit while you're, let's say while your loan or your retirement funds roll over. You've already had confirmation that that's going to happen, but it may take a few more weeks or even a month after that. But no, it's, it's again process driven. Banks love lending to franchises, as you might imagine. And uh, we've got great partners to help our clients with every piece of that.

Speaker C: You said you kind of help identify what market. Say if I'm in Jacksonville, Florida or you're in Atlanta or someone's in New York. If it's oversaturated, you can help us figure that out.

Speaker D: Yeah, so I'd say we fly at 30,000ft where we're saying, hey, here in comparable markets, here's how the franchisor is done. I'd say the franchisor flies, you know, much closer to the ground where they would take you through, uh, using their technology to identify the demographic information at the zip code level. So average household income, you know, number of addressable businesses with these characteristics. So that gets really detailed. But then I encourage our clients to actually take another step, you know, once they're serious about a business. How about you do a little bit of secret shopping? How about you call around, how about you get some quotes, how about you go out and visit the competition? You know, I'd say if there's a competition, that could be an indicator that it's a good thing. There's a need for that service in the market. However, again, yeah, you want to make sure you're not saturated. You also want to make sure what is your competitive advantage against that competition. So there is some science and some art to this and we come alongside to try to hold their hand through the process. Come out to our website, franbridge consulting.com, f r a n bridge consulting.com and uh, share your email address. We'll send you a free downloadable copy of our book, both audio as well as PDF. Non, uh, Food Franchising is the title, it's bestselling book. We'd love to share a free copy of that with you. And then if you'd like to take a next step, let us know, uh, in the email that we reach out to you with and, uh, would be happy to get on a call. Again, it's entirely free to work with us. We're essentially a real estate broker, but for franchises.

Speaker C: Well, thank you for sponsoring the podcast and thank you for giving us some insights here on franchising. I was going to jump back to what you're talking about. Revenue and maybe raising money. Well, I guess maybe the first one, you had a, uh, little bit of money from the guy that you worked with. But the other two, it didn't sound like you really had any money necessarily. At least tons of money to go ahead and start the businesses. So you proved that right there, I'd say. At least in the last two businesses too. Yeah.

Speaker B: Without that revenue, without us generating revenue, none of the businesses would be here.

Speaker C: You did that and you pivoted with Goalquest because there was no revenue or else you would have kept doing it. So it forced you to find something that would find revenue.

Speaker B: Yep.

Speaker C: Yeah, that's an important point.

Speaker B: Exactly. And speaking of revenue, said a different way. Sales is key and passion is infectious. And even though we gave the same presentation thousands of times, we did it each time like it was the first. And we also had this benefit of having two sales angles, myself and Tracy. I was the, uh, quote unquote showman. She was the sensible negotiator. Whoever that client wanted to gravitate towards, we didn't care. Some of them said, I never want that guy coming to our school again. And others said, he's the guy we want to work with. We didn't care whoever they want to work with. We also put ourselves out there as founders. We sold most of the business. I think it always meant a lot that prospective clients got to meet with us. And not just a salesperson. We ran a lean staff. Even though in Goldquest we probably had 60 employees at some point. Payroll sucks, especially when cash flow is tight. We tried to run as lean as possible.

Speaker C: Speaking of which, can I say, uh, how about for Evolution Labs? Because you said you ran through all this money. Your company that you're working on now today, did you have at least some money saved up before you actually started Evolution Labs? Because it seemed like you were kind of falling into the same trap that uh, you might have before where you ran out of money before starting Evolution Labs.

Speaker B: We did. Because after I got fired from Goldquest, we experimented with other businesses that didn't work. We spent a lot of money not only on um, trying to make those businesses work, but on living. Remember at this point we're living in an 11,000 square foot house. We have kids in private school. We had horses, we had 19 horses we had to take care of and feed fucking horses, eat a lot. And so we had expenses that were now part of our life that we couldn't easily get out of. We were burning through cash.

Speaker C: You couldn't sell your kids.

Speaker B: We tried, believe me. But you know what, uh, dude, there were no failures, no regrets. We had wins, we had losses and we experienced every single one. There were poor decisions we made, like hiring friends, and great decisions like deciding to make that 10 hour drive for that one meeting, which ended up being a uh, $200,000 account for us. But for us there was no magic bullet. Every success came from blood, sweat and tears. It really did. And today Evolution Labs is ah, a thriving and growing triple digit percentages each year. We have hundreds of clients already. And yeah, we made some of the same mistakes like hiring friends. But the only thing I could tell you about that is that that's a unique issue, hiring friends, because it's got this strong emotional pull that's hard to veer away from and do the right thing, which is to not hire friends. We have investors in our company. Tracy and I, again we poured everything we have into our business. But our reward is going to be the sale of the business. We get called by VCs and private equity firms, but uh, we're not ready to take institutional investment and we're certainly not ready to sell the business yet. And we still work 24 7, but we don't know any other way. But today with a laptop and a phone and web, we could be anywhere. I could be watching my kids tennis lesson or dance lesson while I'm on my laptop or on a call.

Speaker C: And I would say it really doesn't matter how much you work. If you're enjoying it, it's coming through. It seems like you're enjoying it again versus maybe when you're working for those other companies. Did you feel your energy was probably Lower. Even though I guess you had made those companies, I don't know if you had the same work ethic or excitement that maybe you had when, for instance, you're starting Evolution Labs over.

Speaker B: Totally. Let me just tell you something. I know you're from Florida, so you might not appreciate the visual I'm m about to give you, but when we sold Gold Quest, we were in this kick ass loft in soho, uh, and it was the greatest place in the world to work. When they acquired us, they moved us to Hoboken, New Jersey. It was the death of us, Tracy and I. It was the death of all our staff. And the worst part was that this office. And look, it was a spectacular office, as I told you, because the rent was like quadrupled. But the office, it had these huge windows that overlooked it. Manhattan. And Tracy and I would just stare out the window and we'd be like, why? Why did we do this? Why did we sell? Why did we move to fucking Hoboken, New Jersey? Uh, so our goal for evolution labs was 100 million in revenue. And we hope to sell this business for 500 million or more. And personally, I meditate every morning because for me it sets the stage and the pace for the day. I do hot yoga three to four times a week. I play golf, I play tennis. I've got motivational quotes on my bathroom mirror and in my office. One of them I'm looking up right now on my wall. One of my favorite quotes is, it always seems impossible until it's done. I'll also just mention that the horses, even though they're expensive, the horse world has really been instrumental for us. We met some amazing people. Our investors we met through the horses. It's helped us be successful along the way because it's an expensive sport, which means there are many successful people floating around horse shows. We met a lot of people that made connections for us, both in terms of driving revenue and in terms of driving financing for our business.

Speaker C: So it's a good business expense to buy a horse once we're able.

Speaker B: Well, I don't know if it's ever a good business expense, but I would recommend you just go hang around horseshoes that you don't actually buy a horse, right?

Speaker C: Yeah. Okay. Just act like you're going to buy one. You're just looking around.

Speaker B: Exactly, exactly.

Speaker C: I, uh, like what you said about having the quotes on the mirrors or whatever. I mean, have you always done that? Do people look at you weird if you had that in your office and stuff? Because I do similar Things where I'll cut out pictures of people that are successful and stuff. And I have them right here when I'm looking at. If I at least see those people that I'm, um. Like, if they got to where they are, then I'm going to at least get there. Is it something you've always done?

Speaker B: Yeah, I think it is. People have always thought it was weird or stupid or silly, but fuck them, right?

Speaker C: Look where you are versus where they are.

Speaker B: It's my mirror. And if I want to put up, um, inspirational quotes that are going to motivate me and remind me that perseverance is what it takes and that when others are quitting, I'm still going, then that's what I want to do in my life. If they have other things that motivate them, let them.

Speaker C: Right? But I think it's important because even that little thing that you're saying, the power behind that something that's free, anyone can do right now. Who's listening. Exactly. Something very, very simple. I've realized I'm like, I need to have that. Especially where we are today. I mean, I just feel everything's on the computer. You get so distracted easily. If I just have something that's always there and that I'm able to see, whether it's cut out quotes or pictures of people or whatever, I think that's important that any listener can do for free. And then also go to some horse racing.

Speaker B: And it's not racing, it's jumping.

Speaker C: Horse jumping. I'm glad you clarified. I guess your future is you plan on selling evolution labs for 100 million plus.

Speaker B: We plan on selling evolution labs for 500 million plus. We're going to get to 100 million in revenue. And this is a spectacular business. It's not only a spectacular business from a revenue standpoint, but I'll tell you something, man, it's amazing when you do something and you feel like you're making a difference. Like, I really feel like we're helping kids navigate the challenges of being a kid these days, like bullying, cyberbullying, digital citizenship. I mean, think about the stresses and pressures that kids are going through today, which are, frankly, many will say, are more severe and more significant to them than the pressures that their parents are going through. I feel like we're making a difference and it's super exciting for me and for Tracy. We're all so passionate about what we're doing.

Speaker C: Yeah. It's funny that you said that, because I was going to ask what still drives you, and it sounds like, you found it. And especially what you're saying is at least the bullying before. Maybe when you're younger, if you went to school, you could go home and then not deal with it anymore. But with social media, et cetera, all around you, much harder to escape.

Speaker B: Yeah, totally. So I mentioned I'm working on a book. I'm actually working. I'm writing two books right now. One's a science fiction novel. The other is a book about our journey of building and selling businesses. I'm calling it Build, Sell, the Life of a Serial Entrepreneur. And those hopefully will both be out 2019. I love mentoring and coaching young entrepreneurs. In fact, my son, McAllen, yes, he's named after the scotch. In fact, it was the scotch his mother and I were drinking the night, uh, he was conceived. He's quite the entrepreneur already, so that's really exciting. And I think probably the biggest key to our success is that Tracy and I were and are an amazing team. Like, somehow we learned to work with each other and to be married. And we have an amazing marriage. She's my soulmate. She's my business partner. She's the mother of my four children. And, yeah, it took a lot of Zoloft to regulate our. Okay, mostly my mood swings. But those meds played an instrumental role in our success.

Speaker C: Well, how about. Yeah, you're saying that, but, I mean, was there anything else that you would do when you came home? Would you turn off working or. It sounds like you were just always. I don't know if y' all were always necessarily talking about work or thinking work, or. Do you have any suggestions on anyone else who's trying to work with loved one or a partner?

Speaker B: It's tough. It really is. I mean, and maybe we're present. We do a lot with our kids. I was just told by someone that I'm a great dad, and I feel like I am. But this business is. This is our life. And I think for any entrepreneur, the business is your life. It's not a job. It is not only your livelihood, but it is your retirement. It is ultimately, if you end up reading Build, Sell, Build, it is this idea that you're building something of value that not only clients find value in, but that a potential acquirer will find value in. And we burn through our savings, we burn through our retirement to build our businesses, and that's the way we operate. And it's not for everyone. And it's particularly risky, you know, when both spouses are tied to the same business. That's a tough one, man. It really is.

Speaker C: Well, we appreciate you coming on and sharing your story, especially. We're having all the points at the end. I think after listening helps wrap everyone's head around what we've learned today. I mean, is there anything else, last words of wisdom that you want to leave us with?

Speaker B: I want to tell you that the most impactful books that I've ever read. I think I filled this out on, um, my kind of little pre questionnaire that you sent me. But if you've never read Henry Miller, the Rosie Crucifixion trilogy, it is fucking amazing. Uh, and it's got nothing to do with business, but it's like I described it as like literary porn. The words and the way that he wrote and he spoke in his books is so eloquent. It made me appreciate language and how you can convey with conviction your excitement and your enthusiasm about anything. So that book, like, really feel like it changed my life. I don't know, man. I would say the final advice I could give for anyone that wants my advice is to just push. It's this perseverance. It's this idea of pushing through whatever those obstacles or barriers are when all those other motherfuckers are just going to quit and they're going to give up.

Speaker C: And we'll put in the episode show notes a link to these books that you're talking about.

Speaker B: And you have to bleep out all my profanity. Right.

Speaker C: I, uh, know we'll keep that there for you.

Speaker B: Another great book is Principles by Ray Dalio. I thought that was awesome. And right now I'm reading a book called Traction by Gino Wickman.

Speaker C: We've definitely had, uh, one of our guests. Come on. I think he actually worked with him personally. He knows him.

Speaker B: Who, Gino or Ray?

Speaker C: Yeah, Gino.

Speaker B: Oh, that's so cool.

Speaker C: We appreciate you coming on. And you said you mentor entrepreneurs or. I mean, is there a good way for anyone to get in touch with you if they want to say thank you for doing the interview or maybe want to learn more about you?

Speaker B: Yeah, I use LinkedIn a lot. Anyone that wants to reach out to me can get in touch via LinkedIn on Twitter @Craft Peter. K R A F T P E T E R. Put my contact information in there. I love talking to people.

Speaker C: Yeah, we'll have that.

Speaker B: As you can tell, Austin, and yeah,

Speaker C: people look on LinkedIn, you have the same kind of username on Craft Peter on the LinkedIn as well. Again, we appreciate you coming on and thanks again for sharing your story. Peter.

Speaker B: My pleasure. That was really fun. Thanks for the opportunity, Austin.

Speaker C: If you're looking for other tech based interviews, then consider episode 60 with Cam Doody, episode 55 with Thorin M. Rodriguez, or episode 50 with Max and Pedro from Winding Tree.

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