0:00

Follow The profit is a production of ging

0:02

Rich three sixty and I Heart Radio.

0:06

It's been more than a year since the

0:08

COVID shutdowns, and it looks like the US

0:10

is finally reopening. I didn't have to wear a

0:12

mask in Starbucks today. You know, it sounds

0:15

easy, but virtually every aspect

0:17

of life is dealing with problems.

0:20

And one of those big problems is finding people

0:22

to hire for work, as well as you

0:24

know, returning to normalcy like school,

0:27

vacations, just pretty much anything.

0:29

And while we're doing that, you know, businesses

0:32

are having their own challenges getting up and

0:34

going. And there's one thing they need,

0:36

which they have lots of sometimes

0:38

and they don't at others. And of course I'm talking

0:40

about money. So what do you do when you need

0:42

money? We're going to talk to a guest who kind

0:45

of figured that out. He's actually an expert

0:47

at, you know, figuring out how to

0:49

get money, how to make money. And

0:51

the funny thing is, as he tells us in the

0:53

interview, it isn't about money at all. So

0:56

he's gonna explain how to do that. I'm David

0:58

Grosso and this is followed the profit.

1:13

The shutdown is loosening up vaccines,

1:16

like we hear about this all of the time. You

1:18

know, we're done, I guess

1:20

hopefully, cross your fingers. So

1:23

we're done. Now, let's move on. It's

1:25

like flipping a switch. Well, that's

1:27

not really how things work.

1:30

In fact, it's really hard to

1:32

reopen things, and it's causing all sorts

1:35

of issues that we could have never

1:37

envisioned, like labor

1:39

shortages, like empty offices

1:42

that are suddenly being populated again,

1:44

Like the New York subway that went

1:47

from hyper busy, too empty,

1:49

two barely busy, to now it's

1:51

going to open up again. Summer New York

1:53

might be busy. And it's the same thing with food,

1:56

right, Chicken is getting expensive, gas

1:58

is getting expensive. There's labor shortages.

2:01

We went from no demand to

2:03

too much demand far too

2:05

fast, and it's hard to unwring

2:08

all of those proverbial economic bells.

2:10

And one of those places where we see this the

2:12

most as restaurants. They can't

2:15

find workers. The right blames,

2:17

of course, unemployment, the left blames

2:19

wages. Well, it's kind of all

2:21

that. And especially the

2:23

industries that were hit really hard during

2:26

the pandemic, they've lost a lot of their

2:28

workers. They've moved on. Maybe

2:30

they're sitting idle, Maybe they're still afraid

2:32

to leave their house. Maybe they're getting unemployment.

2:35

Maybe you know, the wages that they're

2:37

offering aren't enough to tempt them to leave

2:39

home. Whatever the story

2:42

is, bottom line is when you go to a restaurant,

2:44

the service is pretty bad and they're actually

2:46

pretty crowded. And in the same way,

2:49

in another sphere right down the street,

2:51

schools face a very unique set of

2:54

problems. Do you wear masks, do not wear

2:56

masks? How do you deal with student deficits

2:58

that were incurred during the pandemic.

3:01

How do you deal with, you know, transitioning

3:04

from virtual learning back to in presence

3:06

learning back to virtual learning. In some cases,

3:09

these are really complicated problems

3:11

to solve. And there's another

3:14

industry that's really emblematic of just the

3:16

chaos that is reopening, and that's

3:18

flying. Airlines are one of those

3:20

industries that make you pay for

3:22

anything that happens to them. After nine

3:24

eleven, airlines went to hell,

3:27

and they're doing the same right now. And it's

3:29

all like the other day, I got up on a plane

3:31

to stretch and the lady came and

3:33

yelled at me. I was having a leg cramp. And

3:35

this is one of the most friendly airlines in the sky,

3:37

folks. This is one of these awful legacy airlines,

3:40

you know. And it's just like airlines

3:43

have gone to hell, and it's because they're broke and

3:45

they have no money, and now they're too busy,

3:47

and now their employees went from not working

3:49

to working too much. And this is all a

3:52

psychological roller coaster, and it's also a

3:54

financial roller coaster. But you

3:56

know, this is a life in

3:58

fact. Our next guest is going to tell us all

4:00

about how COVID just kind of accelerated

4:02

a lot of the same problems that we're kind of hanging around

4:05

anyway, So why don't we just go ahead and confront

4:07

them? And a lot of that has to do with

4:10

money. What do you do with setting influxes

4:12

of money or the absence of money, and how

4:14

do you navigate those situations

4:17

on a personal and on a business level.

4:19

My guess is going to break that all down

4:21

for you so that you can make your money work

4:23

for you. We're

4:28

gonna take a quick break here, be right

4:30

back. When

4:33

it comes to business, the creation,

4:35

the operation, the management,

4:38

the development thereof, they all have one

4:40

thing in common. You need a lot of cold,

4:42

hard cash. So how do you raise money

4:45

for a business? Well, there's lots of

4:47

ways to do that. You can ask a bank, usually

4:49

it doesn't work. You can sell stuff that's

4:51

a little easier if you have stuff. You can sell

4:53

stock, for instance, or you can ask your

4:55

parents and friends. And each one

4:58

of those things has its ups and downs

5:00

given the scenario you

5:02

find yourself in. So here

5:04

to explain it all these different worlds

5:07

is Steve Sailors. He's a friend of Bold

5:09

TV. He had a hit Creating and Pizza,

5:11

which was actually right across from my office

5:14

in Manhattan, and it was a fast, casual

5:16

pizza shop of the future. Who opens a pizza

5:18

shop in New York, Well, this guy does.

5:20

And he's also turns his uh, the same

5:23

entrepreneurial sites toward a lot of

5:25

other things, like a barbecue restaurant, a bakery

5:28

shop, and an iconic bookstore

5:30

which I love in DuPont Circle in

5:32

Washington, d C. And also

5:34

real estate that uses robots

5:37

to build houses. Like, how do you have time

5:39

to do all this? Steve? Tell me all about

5:41

it? Well, here's what I will

5:43

tell you. I get. I mean, I'm almost seven

5:45

hours of sleep every single night.

5:48

That's really important to me. A lot of things don't

5:50

keep me up, but a lot of things do wake me up

5:52

in the morning. So it's really important

5:54

to make sure you know, you get your rest and you

5:56

know you're ready to go the next day. So

5:58

the last time I interview you, you kind

6:01

of skipped to the and then I opened a

6:03

very successful pizza Joy. So

6:05

how did that happen? I was living

6:08

in Manhattan back in two thousand and

6:10

nine, and it's not a really big

6:12

opportunity to disrupt the pizza business.

6:14

You know, here you are a forty billion dollar industry.

6:17

Really, you think that every single pizza exists.

6:19

Everyone has an opinion about pizza, which is

6:21

also one hand, fascinating. On the other

6:23

hand, could be a little tough because we have

6:25

a lot of critics. But you know, I saw

6:27

really an opportunity to bring speed,

6:29

efficiency and convenience of Body Slice, which,

6:31

as you know, there's many Body Slice pizza shops

6:34

and in Manhattan, really everywhere

6:36

in New York. Bring quality and sophistication.

6:38

You get a casual of fine dining product

6:41

offering. And back in that time, we started

6:43

to really see this foodie emergence

6:45

taking place in that finer dining or

6:47

elevated casual dining in New York

6:50

and where they were taking pizzas

6:52

and coming up with all these global inspirations

6:54

for how to refaint pizza. So the days

6:57

of the pepperoni and the song Sage

6:59

and Onions, which clearly is always an all time favorite

7:01

for many and a classic. They were now coming up with

7:04

mushrooms with goat cheese and

7:06

both sonic you know, or they would come up. So I

7:09

wanted to bring some semblance of that quality and sophistication

7:12

and bridge this proverbial al and

7:15

you know, do it where we could around

7:18

the brand that had that struck a corn with a lot

7:20

of people. My co founder and I, you know, we started

7:22

the business really with this notion that not

7:24

only do we think that business opportunity existed,

7:26

as I just mentioned, but really building a brand

7:29

that resonated. And one of the things we

7:31

thought we could do is recreate this modern

7:34

mom and pop pizza shop. Ye, you know, mom

7:36

and pop pizza shop for us, both of us growing

7:38

up was a very sacred and important

7:41

place that we have many wonderful

7:43

fund memories. And you know, the funny thing

7:45

about it was we were getting into sort

7:47

of the dynamics around It wasn't really about

7:49

how great the pizza was, and the pizza is pretty decent.

7:52

It's really more about the engagement, the

7:55

energy, the ability to sort of share

7:57

these wonderful memories through the lens of

7:59

pizza, and

8:01

that's how it happened. I want to tell

8:03

you something, Steve, though, what's really interesting

8:06

about the show. You're my second pizza magnate,

8:08

and I'll let you in on a little secret. I don't like

8:10

pizza. I'm like the one person in the

8:12

universe and I've had not the founder

8:14

of Blaze Pizza and now you, which is

8:16

actually I've tried both of those pizzas.

8:19

They're not bad, but I don't really like

8:21

pizza. But I want to know about how

8:23

you raise the money and how you did the hard

8:25

work to get that out there. That's the story I'm interested

8:28

in. Yeah, I say you're probably more in

8:30

the anomaly than than the norm pizza.

8:33

So I would challenge you to say that if you do

8:35

like other various things, you can't add

8:37

it to a pizza and expand your verizon. So

8:40

going back, I mean, we we started the business

8:43

thankfully we were able to self

8:45

finance. And it's

8:47

interesting because we built the test kitchen in New York

8:49

and we tried to raise money and no one gave

8:51

us a send. You know, we decided when we were going to

8:53

move to d C. It's far to rush to raise money

8:56

in Manhattan, and so when you're trying to raise

8:58

money in the market and then building another aren't was

9:00

challenging. And so we ended up self financing

9:02

it got the first one open, and then from

9:05

there we used various other

9:07

forms of capital. We leveraged the SBA

9:09

to do a an s B A

9:11

a loan that helped us for you know, a couple

9:14

more units than We raised some local

9:16

money from some highly enthusiastic

9:19

guests of ours who really loved the business,

9:21

the brand, and what we were doing. And then

9:23

we started to what I would call institutionalize

9:26

the business, which means that we started raising

9:28

more. You know, institutional capital started

9:31

off more an angel like capital, and then really

9:33

moved its way into that traditional institutional capital.

9:36

I have to tell you that, you know, I ended up selling

9:38

a business in two thousand nineteen, so

9:40

you know, we raised about seventy

9:43

million dollars through various forms of

9:45

equity and debt and had a really

9:47

interesting opportunity to exit the business in two thousand

9:49

nineteen, and I run the company up until fifteen,

9:52

and it really just started to you

9:54

know, have sort of a different vision of where I saw the world

9:56

going. And frankly a lot of them from my learnings of

9:59

what not to do because of what happened

10:01

with Pizza and like,

10:03

you know, who not to work with, what not

10:05

to do as a result of you know, listening to

10:08

others, gaining my stripes

10:10

and my bumps and my bruises, and you know, thankfully

10:12

made a few more of the right decisions in the law. But

10:15

you know, I started to see sort of a really size

10:17

and shift taking place in the consumer industry,

10:20

and so that's what led me into

10:22

starting to buy and build an

10:24

array of other other companies. And

10:27

yeah, so that's kind of just so

10:30

tell me about some of those bumps and bruises, like the

10:32

one if you could go back in the past and

10:34

like tell old Steve, like, don't

10:36

do this. What do you think the most important one is? Well,

10:38

I think alignments not an event. It's an ongoing

10:41

process. You know, like you and I might

10:43

be aligned today about whatever it is we're aligned

10:45

on. But I think that constant check,

10:47

in that constant dialogue,

10:50

I think it's really important. I also think it's really

10:52

important, you know, to balance the fragility of being

10:54

a founder versus what it takes to be an executive.

10:56

I think that there's a fragile balance there. There

10:59

are a lot of founder is that are ill equipped run companies.

11:01

They're great vision areas, that they have great ideas,

11:04

and don't get me wrong, they're they're they're

11:06

highly qualified in many areas to play a

11:08

significant role in the business, especially earlier on,

11:10

when a lot of the heartbeat of the company is the

11:13

founder, right, and the founders intrinsically

11:15

intertwined into the business, and frankly,

11:17

a lot of the outputs of the company are are a byproduct

11:20

of the founders and look because the founders have their

11:22

prints on it. But I think when you get

11:24

to a certain place, especially when companies

11:26

are growing really fast, like we were growing, like

11:28

I've continued to sort of grow, you know, the maturation

11:31

processes as such to where you hit a lot of the flection

11:33

points, David, far faster than you

11:35

would if you went slower. I'll leave you an example,

11:38

so you might hire somebody first

11:40

startup that are great startups

11:42

because they're scrappy, but where fifteen

11:44

hats they'll run through rolls, you

11:47

know, for where they may not bring some of the technical

11:49

what professionalization side they'll make up

11:51

for in there can do, will do, get

11:54

stuff done at all costs type

11:57

of mentality. But really quickly,

11:59

if you go from zero to like say, you

12:01

know, million, real

12:04

quickly, that person can unfortunately

12:07

maybe not fit in the plans

12:09

from million to a million. And

12:12

so when you hit these bumps fast

12:14

and these reflection points really quickly, the

12:17

constant iteration, the constant reassessing

12:20

of what you need to be successful

12:23

constantly is evolving, and so

12:25

having the ability to empathize

12:28

but also have to make tough decisions

12:31

because of these various factors

12:34

I think are all really important.

12:36

And I think, you know, I learned it in my twenties,

12:39

you know, my early twenties, and I started the pizza business

12:41

when I was twenty five, you know, a thirty

12:44

four. You just learned

12:46

a lot. I think you also learned a lot about interpersonal

12:49

dynamics, governance dynamics,

12:51

and you bring an institutional capital, day

12:54

to day dynamics and then lastly,

12:56

it is you know, recognizing what you really need to be

12:58

successful and being honest about

13:00

it and not being shy about

13:02

asking your investors or asking those

13:04

who around you to assist. You know, you don't have

13:07

all the answers. I don't have all the answers.

13:09

You don't have all the answers, none of us. If we have all the answers,

13:11

what are we living for? Right? So the reality is

13:14

not only do you not only do not have all the

13:16

answers, but let's also be honest. You know, we

13:19

all have strengths, and we all have weaknesses.

13:21

We have things that either we're not good at

13:24

or don't want to do, And I think it's just being

13:26

honest about those things and focusing

13:28

on bringing the best people you can around

13:30

you. You want to be not the smartest

13:33

person the table. You want to be the least smartest, because the

13:35

thought is is that chances are you're probably pretty

13:37

smart. So if you have people

13:39

around you that bring that wisdom and that experience

13:41

and that intel and all those various

13:44

and by the way, love what they do because

13:46

you may not, that's showingly a good

13:48

recipe for for for success. You

13:51

bought this iconic bookstore Cramer

13:53

Books on in DuPont Circle. Well,

13:56

I'm a I'm a bookstore person, Like I lament

13:58

the fact that you know, like there's barely any

14:01

left. So you you have this track

14:03

record of taking businesses where people

14:05

are kind of like, oh, that's done right, pizza

14:08

and books. What makes you see

14:11

value in businesses that maybe

14:13

people find traditional and antiquated.

14:17

I think what I gravitate towards David

14:19

is going into industries that are large,

14:22

where there's already market adoption on

14:24

so many different levels, and then

14:26

finding exactly where

14:29

we think we can fit into disruptive enough

14:31

to where we don't have to get into this business

14:34

of overly educating to the extent

14:36

by which we have to think tens

14:38

of millions of dollars into doing because

14:40

it's a new thing. And

14:43

so I like bringing things that that are

14:45

familiar to people, but just recognize

14:48

that they need to be shaken

14:50

up a little bit to where then

14:53

we can sort of get them back out in front

14:55

of people so that we can get another shot at getting

14:57

them to be excited about what we do. Because look,

14:59

reality he is is you want to be an industry like

15:02

that has no business and then you're all your money

15:04

is going in to try to train you how to

15:06

think about what we do or would

15:08

you rather go on? The industry is really big at stale,

15:10

and no one's really shaking it up and say, well,

15:12

now everyone already likes this stuff already.

15:15

If I can just do it better and do it differently

15:18

than I already have adoption, it's

15:20

just a function of getting more adoption, and

15:22

that takes the business from being good to being great.

15:24

If I get more adoption, because you already

15:26

like breakfast burrito, you like

15:29

uh chicken parmesan, and I'm already doing

15:31

it good. But I can do it better, then

15:33

why not do it better? Because then I'm giving

15:35

ourselves the highest chance to be successful, and chances

15:38

are we do a better you as the guests, they're gonna

15:40

want it. In the case of the book business, slunk,

15:42

I mean, the business is gonna

15:44

be hung to dry. The founders are all in their

15:46

seventies, so they miraculously

15:49

were able to leave this company through four decades.

15:52

You know, they started the business. Ironically, when I bought

15:54

the business, which was in my early thirties, that's

15:56

when they found the business and

15:58

they wanted to sound a business to their their key employees.

16:02

They couldn't make the deal work, as

16:04

I understand it couldn't. It couldn't get the financing

16:06

in place. I happen to know one

16:08

of the founders through a mutual lawyer

16:10

relationship, and so he

16:13

reached out to say the interest in this, and well, I don't

16:15

know if I'm gonna be the best guy to run the book business

16:17

to go. I saw, you know

16:19

what I saw, but this thing is doing with big business

16:21

that had a big food and beverage component. And what I found

16:24

fascinatingated was as

16:26

old and as the legacy of a business as

16:28

it is, it had very progressive

16:30

components to it that made

16:33

it super unique. It was like this highly immersive

16:35

situation that just wasn't fully

16:38

brought the bright because of the in

16:40

fighting that was going on between the founders

16:42

of being working with each other for so long.

16:45

And so I ended up onying the business. And

16:47

unfortunately it's been a good business until COVID. I mean

16:49

that that business has really gotten pro bart

16:51

because of COVID. But the business

16:54

components are great, has great bread

16:56

viability, It's internationally recognized.

16:59

When we have to isn't come back. I hope

17:01

it's not too long. You know, we'll

17:03

continue to see an influx of people,

17:05

you know, frequenting the store, and then the hope

17:08

is that the community continues to support

17:10

it. Unfortunately, that community has continued to

17:12

change since I taking control of the business.

17:14

But I've always do it as a great sense of stewardship.

17:17

Really, you know, it's definitely a for profit business,

17:20

so this isn't like a charity. But

17:22

but I've also you know, I've tried my damn

17:24

this to make sure we protect and preserve many

17:26

of the wonderful attributes that make credits you need

17:29

also while keeping an eye towards the

17:31

future, which is are just certain things that

17:33

the business needs to do in order for it to continue

17:36

to withstand the test of time. And ideally

17:38

that's what we want to do, and that's what we sought out to do, and

17:40

that's we hope to get accomplished. We're

17:45

gonna take a quick break here, be right

17:48

back. So

17:51

you're like a larger than life personality,

17:53

Steve, you and your twenties running

17:55

around wanting to change the world. And you're also

17:57

Greek. You know, it's a big like I'm here,

18:00

I'm going to speak my mind. You're also

18:02

tried out to be on the real world in a model,

18:04

so you're also good looking. Did anyone

18:06

take you seriously at first? Or is everyone

18:09

like, who's this young man? Get out of my office.

18:12

I'm actually a reclusive guy. I don't do

18:14

a lot of interviews, very selected

18:16

about where I speak because I'm very focused on my

18:18

craft in my business, and we have

18:20

a lot of wonderful things that we're gonna be doing coming out

18:22

of COVID. But we all have a

18:25

path. It's hard to kind of put a finger

18:27

on exactly when I

18:30

had this bug to sort of break the mold.

18:33

Perhaps what I was accustomed to witnessing

18:35

with my own family in which you get no disrespect

18:38

to my own parents, are those and

18:40

my family who have led different paths. There's

18:42

one story that I think is pretty

18:44

profound. I was also a

18:46

basketball player, an athlete

18:48

colleague who put it the Visual One school,

18:51

which I did end up dropping out of, And the reason

18:53

I did was my freshting years

18:55

in the summer, I was playing pickup

18:58

basketball in our gym. And because

19:00

everyone kind of comes back from the very schools, or

19:02

we have players playing from Europe that are back in

19:05

the area and we were playing, and I'll

19:07

never forget I was on the sidelines after

19:09

a game and I was talking to two guys, very talented

19:11

guys. Okay, these are guys that played at top flight

19:13

the visual in schools and play in Europe. And they're

19:16

bribing for me about Europe. And

19:18

so my mom listening to them, and I said,

19:20

so, what do you like about is like, well, you know, it's

19:22

unbelievable. We make seventy five thousand

19:24

dollars a year, one guy says. The other guy says, he

19:26

makes eighty five thousand a year and he has a free

19:29

apartment in a free car. One was playing I Believe

19:31

In in Switzerland and the only guy who's playing

19:33

an Iroland and I looked at them and I and

19:35

it was strange to me because I said to myself,

19:38

why does that stock? I want to build

19:40

a big business. I want to make all the money in the world.

19:42

I don't want to travel exactly where I want to travel.

19:45

I don't want to do this. And it was it was

19:47

a bigger flection point for me data because I

19:49

was good enough to play in Europe. Then at

19:51

that point, it was that that situation

19:53

that made me say Wow, I'm staring at this impending

19:55

cliff that's right in front of me. Okay,

19:58

and I had three years left the school. I went

20:00

through my sophomore year and I said, you know

20:02

what, I'm not doing this anymore.

20:04

And before I decided to

20:07

actually not go to school, I went

20:09

to a bunch of colleges that were recruiting me out of high

20:11

school, just to make sure that I was gut

20:13

checking, you know, my whole because

20:15

this is kind of crazy. I was about to make a radical

20:17

move and I ended up doing it. So I ended up moving

20:20

to Manhattan. I dropped out of college at twenty

20:22

and Yes the Queen. My sophomore year, I

20:24

was a finalist for the Real World and happy

20:27

I didn't make the real World, I must add, but

20:29

that was when they were still doing out rules too, so I

20:31

think it was the last rule with uh

20:34

and we're but

20:38

it's definitely definitely definitely dates

20:40

ourselves. And then I got opportunities

20:42

to work in the fashion business, and so I really

20:44

used that as an opportunity to get to New York because

20:47

it was really hard for me to go to my parents and be like

20:49

or my family be like, hey, I'm dropping out of college

20:51

but on the first you know, person in my

20:54

family and get a scholarship to go to school and

20:56

all this stuff, and like so you can only imagine, you

20:58

know, being twenty years old, and I had

21:00

this vision of what I wanted. There was a reason why I

21:02

stayed in the state. It was like that in State story I wanted

21:04

to have and it was nothing like it. And

21:06

I just really just said, this isn't for me. And

21:08

so I just asked them to respect me

21:10

and love me, and I just

21:13

know that I'm gonna go and do what I need to do. And

21:15

I didn't want to have any regrets. And I moved to New York

21:17

and and then I did some odd jobs and I started

21:19

working in the catering business. Then

21:22

I started learning the ins and outs of the food and beverage business

21:24

and worked at clubs. I learned about the bar lounge

21:26

business, horrible business and my dad, and

21:29

then it got into restaurants and hotels and

21:31

start really just picked it up. And I

21:33

think when people started taking me really seriously, it's

21:35

probably want to started working doors at clubs because

21:37

if you know, being in Manhattanite, you know,

21:39

if you work at the right spots in your doorman. People

21:41

don't really want to be your friend. But you know how pretentious

21:44

New York is. People just don't want to look like sukes.

21:47

They don't want to like shots are like my bar. I'm I'm

21:49

twenty one, two years old, and I'm saying, wait

21:52

a minute, I'm actually catering to people

21:54

where billions, millions, nothing, all walks

21:56

of life right, every industry, people going

21:58

out at nighttime. I actually have something

22:00

here where I could build a roll of debts. And I think that was the

22:02

part where I started taking really seriously.

22:05

But I didn't up use it though. You know, I've never done drugs

22:07

in my life, David. I I just take my

22:09

job seriously. I try to do a good job at what

22:11

I do, and and that that actually helped me

22:13

learn a lot about the business. I got a lot of opportunities

22:16

and the result of it, I ended upening up my own places.

22:18

As a result, I sold my first business five

22:21

and then that led me to start in my pizza business. I

22:23

would say probably those couple of points,

22:25

the college thing and then the door pay, but

22:27

probably where I started to and I have to learn

22:29

really quickly what it was like to be in Manhattan, you know, coming

22:32

from New Hampshire. I mean, come on, I mean

22:34

we're talking like, you know, apples in Paris,

22:36

and we're not talking the same thing. You know, the

22:38

way people do business and how people

22:40

hustle, and but just the energy of New York

22:42

was just, you know, undescribable. And it's

22:45

one of those things where it's like you either

22:47

get into it and you find your your niche

22:50

and you're saying, okay, you know, I gotta I gotta find

22:52

my way to make sure I'm not getting punk.

22:55

I'm a street guy. And then graduately from

22:57

college. It's funny because, you know, fifteen

22:59

years ago, you would think that not graduating

23:01

from college was a by product of

23:03

engaging in illicit behaviors or you

23:06

know, stuff like that. It's funny because because

23:09

like years ago, a lot of people didn't

23:11

graduate from college. You know, something happened

23:13

predating probably you, and I what says,

23:16

no, you got to go to college. That's the path. I

23:18

just decided it loves in my path. And that's okay,

23:20

you know, and I think that everybody reserves the right

23:22

to pursue their path. Tell me more

23:25

about that, Steve, because there's a lot of this

23:27

is a big societal shift that

23:29

you just blazed over, right like suddenly.

23:32

Mark Zuckerberg's a dropout. Bill Gates

23:34

is a dropout. Steve Sailors is a dropout.

23:36

And in fact, a lot of successful people are dropouts

23:39

or never even try to begin with. And you

23:41

know people like Peter Too give away money to

23:43

avoid college. So you are questioning

23:46

the value of college, aren't you. I

23:48

want to answer that question because it's it's actually a very

23:50

complicated question you're asking, and I want to I want

23:52

to try to get at the right answer.

23:55

Look, I think the college, notwithstanding

23:58

what it costs, notwithstanding it's one of the right

24:00

hustles in this country. We all know it

24:02

is because a lot of them are gonna go

24:04

broke. A lot of people have gone into college can't

24:06

even get sustainable jobs anymore. The way

24:08

college used to behave, or is portrayed,

24:11

is vastly different than it's portrayed today.

24:14

And I think that. Look, college is wonderful

24:16

for a lot of reasons. I think number one, you go out

24:18

on your own, you're finally a pseudo

24:21

adult, and you learn a lot about

24:23

yourself. You're engaging in things, you're trying things

24:25

out, you know, you're partaking in all

24:27

kinds of new experiences, and I think for

24:30

that reason, I think it is valuable.

24:32

I also think that for a lot of people, you

24:35

know, getting the curriculum that they need is

24:37

also valuable. But I think that for

24:39

other people it's not so valuable either.

24:42

Or I'll say another way, maybe it's

24:44

only as valuable as the time by which you

24:46

think it's valuable. You may not need four years,

24:48

like for me, I was two years. I just

24:50

said, okay, you know what, I've learned a lot here,

24:52

both academically as well as, you know, experientially.

24:55

I don't think that this is for me anymore. Now.

24:58

Look, if you're gonna become a lawyer or out there and you

25:00

need standard certification, you need to obviously

25:02

go through your coursework to get to a certain

25:04

place to get the accreditations. But for other

25:07

people, I don't know what college

25:09

taught me about being an entrepreneur. I mean, frankly,

25:11

I didn't pay attention to her. I probably achieved

25:13

most of the time. But going on in

25:15

the real world and learning about, you know,

25:18

these really difficult situations, whether it's

25:20

you know, dealing in a business transaction, someone

25:23

ripping you off, or you know, when you have no money

25:25

a couple of thousand dollars and banging down their door

25:27

and making sure you get your damn money, or

25:30

all these other various things, which again we

25:32

could go into all that. You know, I think it shapes

25:34

you, you know, I mean that what it tells you is your experience

25:36

has shaped the way you see the world. It's not right

25:38

and it's not long. It's just simply what it

25:41

is. You got to know or

25:43

have a feeling about it that you got to just pursue

25:45

your path. Like I'm about to have a kid. My wife is

25:48

nineteen weeks pregnant. It's our first job. And

25:50

you know, like she might work in the family business,

25:53

she may not. She might want to go to college,

25:55

she may not. I think that the modern parent

25:57

needs to have their eyes wide

26:00

open, not be so myopic about

26:02

what it is that the children should do,

26:04

and our job as parents have to give

26:06

them the best experiences we can

26:08

possibly give them, still themmle morals,

26:10

and still them with values, and still them with things.

26:13

And then at some point you're gonna have to

26:15

say, now you're going off to the world, and you hope

26:17

that they're great Sumaritans, just like my parents helped

26:19

that for me. And I like to think I've been

26:21

a little bit more than a good Sumaritan. I think a lot of people

26:23

are. So let's

26:25

talk about that the culture around money, because this

26:28

podcast is of course called Follow the Profits.

26:30

So what was it like having

26:32

to raise money and you know,

26:35

even if it was just going to collect that two thousand

26:37

dollars from someone who stiffed you to raising

26:39

millions of dollars from institutional people, from

26:41

angel investors, what did you learn about

26:44

the culture around money. One of the

26:46

things is is you got to show off preparedness

26:48

for you to receive the money. Depending

26:51

on what the situation is. You need

26:53

to be thorough, you need to be ready, You

26:55

need to know yourself and you gotta

26:57

know what you're asking for and you to

27:00

demonstrate based on what you're asking for,

27:02

why you and your team or

27:04

whatever the dynamics are can

27:07

indeed execute on this plant.

27:09

I always tell people to always be more modest

27:12

when it comes to planning. You know, we borrow

27:15

debt. There's not a better way to have discipline

27:17

than when borrowing debt, especially debt to u f

27:19

the back because you want to be super

27:22

conservative for them, and they're lending your money because

27:24

you want to give yourself all the room in the world. So those

27:26

are some of the things that I would just say to you is you've

27:29

got to be ready to accept the money. You better know

27:31

your stuff to better be thorough. If

27:34

you don't know something, it's okay

27:36

to say I don't know, let me come back to you.

27:39

Don't feed people b s.

27:42

Tell it straight how it is. If you don't have the answer

27:44

to let them know, you're gonna get back to them, and then you

27:46

go and you source the answer, you come back

27:49

the right capital. People are not gonna

27:51

go and say, oh, he doesn't know something about something. It's

27:53

okay if you know a lot about a lot

27:56

and not know everything about everything, because you're not gonna

27:58

know that, and don't try to, you know, massage

28:00

things that don't that don't that aren't real,

28:02

or or you don't have an

28:04

answer for. I just think it's a really important

28:07

discipline for people raising

28:09

money. You know, there's there's obviously

28:11

vary various forms of raising money. You

28:13

have equity, you have debt. I will tell you

28:15

that and this is my personal belief, and I'm making

28:18

a lot of Hay. As far as where I'm

28:20

investing not only my core business, but I have a

28:22

venture business. I have stuff that people don't know.

28:24

I'm putting money on a lot of places. But I

28:26

think there's two big things that are gonna come out of COVID

28:28

that I want to tell you, because one of them is around regarding

28:31

money. I think the alternative finance

28:34

industry is gonna blow up

28:37

like a good one coming out of COVID

28:39

because I think that

28:41

there's gonna be so many more ways

28:45

that entrepreneur owners, people

28:47

who have ideas are going to have

28:49

various forms of accents to

28:52

try to best fit what that

28:54

is to what their needs are, to try to accomplish

28:57

or effectually what it is they want to do. An

29:00

example that would be, is you know, looking like the

29:02

Reggae Plus program regg A Plus.

29:04

So you either falls an accredited

29:06

investor or you don't follows an accredit This

29:09

is for equity investments, right, And the threshold

29:11

matter for that is is you

29:14

have to have a net worth of one million dollars

29:16

or more, not including your house. Well,

29:18

you have to make two hundred thousand dollars of

29:21

household income or more a year Okay,

29:23

that's the accreditation preshold. Matter.

29:25

Anything below at you are not

29:28

an accredited investor. What they

29:30

ended up doing, okay, what the REGs and of doing

29:32

is they set up a Reggae Plus program where now

29:35

um, people who make you know, less

29:37

money or don't have that net worth can

29:39

actually invest far smaller amounts

29:42

of money. But they're allowing those

29:44

kinds of things to happen. This is great for

29:46

people who have guests or customers

29:48

or consumers who consume product. Great way

29:50

for them to invest, great way for them to support

29:52

the business. That's one example as

29:55

an example of stuff you're seeing a public

29:57

markets. The spacts I have a spack with

30:00

is a special purpose acquisition company.

30:02

It's effectively a new way for

30:04

private companies to go public. What

30:06

we do is we set up what's called a blank check company.

30:09

It's a publicly traded company. It just has

30:11

money and you're effectively a merchant

30:13

bank, and you go fire a company to buy emerging

30:15

with to take it public, versus the traditional

30:17

way where a company says, okay,

30:20

i'm i'm a certain size, I have the operating metrics.

30:22

Strategically it makes sense for us to

30:24

go public. We hire bankers, we do

30:26

a road show and then we go public. Right, this

30:29

is a new form of doing it. And I think that this

30:31

product is a by product

30:33

of COVID. The product didn't

30:36

start because of COVID. The product has been around

30:38

for ten fifteen years, but it wasn't

30:40

a product that was taken very seriously. But

30:42

because the capital markets on the product sector

30:45

really tighten their wallets when COVID started

30:47

happening, it started to open up other forms

30:49

for people to transact. And now the stack

30:51

is an example. Is a is a product

30:53

that I particularly believe. So,

30:56

you know, alternative finance is something that's all on

30:59

our minds. Right. We take cryptocurrency, we see

31:01

you know, SPACs as you're as you're talking

31:03

about like and I think that's generally good

31:05

for society, and I think most people agree.

31:08

But we still have a major problem, which

31:10

is the lack of landownership in this country

31:12

and that where the inequality that comes

31:14

from that. And you are someone

31:17

who's looking at modernizing

31:19

real estate, which is perhaps your most

31:21

important move from a societal perspective,

31:24

because lack of homeownership, especially among

31:26

young people like us, is a massive

31:28

problem. So what's your entrepreneurial

31:30

solution to that. The

31:32

bottom line is, you know, homeownership

31:35

is becoming more and more difficult really because

31:37

of two reasons. A number one, because

31:39

you don't have the adequate financing in

31:41

the bank in order for you to put a reasonable bouncing

31:44

to buy out. And that's become in the form

31:46

of because you don't have the right job in order for

31:48

that to happen. And you have the second

31:50

part of it, which is the banking system because

31:52

the boxer financing you know, mortgages

31:55

as you did, and you know, even

31:57

I have trouble sometimes getting mortgages,

32:00

believe it or not, because I don't fit in the box. Is a

32:02

complicated entrepreneurial businessman

32:05

with a lot of various things. I'm not your W two

32:07

straight down the arrow, so I

32:09

must say in full candor I even have challenges

32:11

with the two, but for a different reasons. So

32:14

I think there's a couple of things that have to happen, and you're

32:16

starting to see a Greek form. I think number one is

32:19

um You know, when you look at the sort of the value

32:21

chain and you start to say to yourself, Okay,

32:23

what are some of the issues that are going on here? I just

32:25

lay two of them. How you affectuate a deal?

32:28

An individual of a couple doesn't have enough cash

32:30

to put down a down payment. There's not enough assistance

32:32

for that to happen. There are some programs there

32:34

are there's not zero, but not enough, and then

32:36

the bank is a hard time, you know, getting there

32:39

because they can't underwrite them. Okay, that's

32:41

one part of it. The second part of it is you've

32:43

got rising costs. Cost of living standards

32:46

have gone up. And it's not only as as far

32:48

as how we buy consumables, which clearly

32:50

or another problem that we have because you know, minimum

32:52

wage is an issue and the cost of

32:54

living is an issue. There is an incongruence there.

32:56

There will be, by the way, when we get the fifteen dollars,

32:59

because you know it's gonna happen. Dated is the same

33:01

things you have a hard time pay for now at eleven fifty.

33:03

If you're at fifteen, they're just gonna increase the price.

33:06

And so there's gonna be this this issue. Okay.

33:09

The next issue is the cost of doing business

33:11

for a developer. The land costs are

33:13

going up, building costs are going

33:15

up. Look at like lumber right now, Okay,

33:17

visual capitalists just came out with something. They

33:19

had this whole thing where they said the lumber

33:22

prior to this insane supply

33:24

chain issue, which by the way, is a bi product of COVID

33:27

used to build ten homes now could only built two.

33:29

So you have cost escalations everywhere.

33:32

And then the last thing is you have labor issues.

33:35

So saying all that, one of the things that we've

33:37

tried to do is to think, take

33:39

a new tact of how you're building. But what

33:42

I do think is the module industry predating

33:44

us didn't do itself any figures. They

33:46

build things very in a very linear and

33:49

overly rigid, didn't give you a lot of latitude

33:51

to do a lot. They were fine if you're building

33:54

in the suburban or rural environments, you have a lot

33:56

of land. But what happens when you're doing like these really

33:58

small urban in a projects,

34:00

a five thousand square feel you've got power lines

34:03

and you can't get away with some of the stuff

34:05

they were doing. And so Carter and I decided

34:07

that you know what the hell, let's let's if we're gonna

34:09

do this, let's try

34:11

to do it a little differently. And so we

34:14

engaged with the company and started developing

34:16

this process called the Aerospace Robotics

34:19

to panalize modulate process. In

34:21

Landon's terms, all it is is everything's

34:23

built in a factory pace and

34:26

they come on a flatbed truck. You've

34:28

got a crane on the property. You've got

34:30

people there and we call them the setting place crew. You

34:33

literally look at the plan. Each panel

34:35

has an description to it, like a one,

34:37

A to a three. The

34:40

crane plucks it off, puts it down,

34:42

the people collect it, they put a two

34:44

next to it, and then they just get

34:47

done. Windows are in, doors

34:50

are in, installations in and

34:52

all the ruffian work is in the plumbing, the

34:54

electrical and stuff. So and then so what happens

34:56

is you can erect these homes very quickly. And

34:58

so one of the things that I'm trying the dues I'm

35:00

trying to demonstrate, even here locally in DC

35:03

in other places when you get into workforce housing

35:05

or other various forms of housing, low

35:07

income housing as well, that there are

35:09

ways of building much more officially than

35:11

just swinging hammers. And I know some people will

35:14

go and say, you know, well, you're cutting the workforce,

35:16

and I hear that, but I'm not really cutting

35:18

the workforce because we have workforce and works in the factory

35:21

as well, and so we might not have as many people in

35:23

the field that are erecting products, but

35:25

we still keep people working, and we can build

35:28

products quicker than anybody else, and we

35:30

can replicate product very quickly as well. And so

35:32

I'm gonna be a believer in this. And there are various projects

35:34

we're looking at and uh, you know,

35:37

trying to you know, try to use this process

35:39

as a way to you know, create great products.

35:41

I don't know why workforce housing shouldn't

35:44

have great products. I don't know why low income

35:46

housing shouldn't have great products. Why

35:48

does just be a fluent have

35:51

great products. Why can't others have great

35:53

products? And this is a way I think for that to happen,

35:55

where you can bring your costs down,

35:57

you can build better structures and

35:59

let six cents and therefore relocated

36:01

to designing better experiences for

36:04

those patrons and users of the hall. I

36:07

want to end with something that I've noticed about you is

36:09

that like you're like the opposite of a politician.

36:12

Most of the time when you talk about politics, are

36:14

just like, oh, there's a housing

36:16

crisis, like, oh, well, like

36:19

whatever, Like you take these sectors that are

36:21

sticky, complicated, just

36:24

a mess, and you're like, how

36:26

can I change this? How can I innovate

36:28

it? That sounds like the opposite of what

36:31

we hear, you know, not just in politics,

36:33

not to just pick on my politician friends,

36:35

like across the board. It seems like that's a problem

36:37

we have with society, is that no one's willing

36:39

to stand up and say, hey, you know what, this can

36:41

be better. Why do we do it this way?

36:43

Why don't we change it? Did you just kind

36:45

of become like this or was this always the plan

36:48

all along? I think when I was younger,

36:50

I made a decision that my

36:52

my personal brand, what I want

36:54

to be down for is to be a dishop

36:56

there and I want to be unapologetic about it. At

36:59

the end of the day, words are

37:01

only words. Actions are everything.

37:03

I'm focused on building my business, I'm

37:05

focused on executing. I'm focused on doing

37:08

great things. I want to build great things. I want

37:10

to buy great things. It takes

37:12

a lot of time, on effort, on a

37:14

perseverance, a lot of will. Let

37:16

me be clear, Okay, yes you do it because

37:18

you want to make money, and yeah, okay, but

37:21

the money is a by product they're doing great

37:23

stuff. If you do great stuff, the money

37:25

will follow. You know. For those who

37:28

make the leap and want to do great things

37:30

that they just do their best to surround themselves

37:32

and great people. To stay true to yourself.

37:35

You know, it's super hard. You're gonna question yourself

37:37

all the time. There's always gonna be fear, fear

37:40

of of now working out, especially

37:42

again when you're doing things that others aren't doing, Fear

37:44

of being viewed not in

37:47

the right way, or and all

37:49

says, you know, we're all we always put it on the

37:51

earth to do something. And I think it's

37:53

just about figuring out what it is

37:55

that you think you're supposed to be doing and then just trying

37:57

to do the best job in can and a

38:00

lot of space. I'm also

38:02

a landlord, and the

38:05

dynamics of

38:07

how I had to engage with our landlords

38:09

and try to work, and then

38:12

an hour later and engage

38:14

with another tenant where

38:17

on the landlord And I said

38:19

to myself, you know, I could never feel

38:22

good about doing or

38:25

trying to remove a tenant who's

38:27

a good tenant, who's struggling because

38:30

of something they could they didn't end nothing to do and

38:33

having to then deal with it on the opposite

38:35

side and how to how to manage that situation

38:37

was super eye opening to me because it's

38:40

it just shows if you can provide a little bit of

38:43

empathy, it goes a long way. And

38:45

I, you know, I think a lot of our tenants are gonna be great

38:47

coming out. They were doing fun com pre

38:49

COVID. It's just these kinds of situations

38:51

where it's like wow, you know, it's it's

38:54

just the dynamics are just so unique.

38:56

And I've learned a lot, and I definitely thought I'd become

38:58

a better leader, a better entrepreneur, better husband,

39:01

better person. Probably should have started with the last

39:03

two first um, but as

39:07

often everything happening. So you

39:09

know, congrats on your your your pending

39:11

addition to the family. That's a really big deal. That

39:13

might be your best achievement yet. Steve, Where

39:16

can we learn more about you? So you

39:18

know, since you're private, do we go eat your food

39:21

when we're in d C. Or what's the best

39:23

way to interact with the Steve Sailors brand.

39:25

You know, you'll see me from time to time hopping

39:27

to come back on and top with you anytime, David, and uh,

39:30

you know, once in a while you'll see me popping in and honest

39:32

places. But we're gonna keep

39:34

doing a good job. We're gonna keep our head down. We'll be hearing

39:36

more from us very soon. We got some really fun

39:39

things going on. We just introduced a virtual digital

39:42

kitchen called Ensemble super

39:44

cool. If you looked that up. Ensemble dot com

39:47

gonna be a big, big distructor to the

39:50

the digital business and the food. It's almost like a digital

39:52

food hall, the simplest way I would

39:54

describe it. We got some new businesses coming

39:56

up. We're active in the buying market. We're looking at

39:58

a lot of things. We really we're gonna

40:00

be really active, thinking great uh you know,

40:03

great challenges, some great opportunities, and

40:05

again on the personal front and then of course

40:07

in the professional front. So you'll

40:09

be seeing things that we're doing. But that's

40:12

probably how you'll you'll you'll be able to engage with

40:14

me. I'm not being on social leader. You'll see

40:16

I don't do a lot on social But a guy

40:18

said, I'll come back on time to be money well

40:20

bucking the trend. Steve, Thanks for your time. We

40:23

know it's really valuable. Same, thank

40:25

you, Thank you so much for your time, thanks for thinking to me, and

40:28

that's the luck with everything. We'll talk soon. Thanks

40:34

to all of you for joining me as we Follow the Profit.

40:36

And a big thanks to Steve Sailors. He's

40:38

a friend, he's a lovely guy, and

40:40

he's someone we basically need,

40:43

right We need disruptors. We need people

40:45

to stand up and say this isn't the way

40:47

things are supposed to be. We need change

40:49

and change is hard, but it's necessary.

40:52

And of course i'd like to thank my team and Mileano

40:54

lemon Cheyenne Read and of course Scott

40:57

Handler, the and our executive

40:59

producers. That'd be a not to mention them. Former

41:01

Speaker of the House New ging Rich and his right

41:03

hand lady, Debbie Myers. If you haven't

41:05

noticed by now, I'm David Grosso. If you're

41:07

enjoying the show, please give us five stars and

41:09

a review. We read those and

41:12

we want others to know what the show was all about.

41:14

Follow the Profit as a production of Gingrich and

41:16

I Heart Radio. For more podcasts for my

41:19

heart Radio, visit the heart Radio app, Apple

41:21

podcast, or wherever you get your podcasts.

41:30

All opinions expressed by David Grasso

41:33

and his guests on the show are solely their

41:35

opinions and do not reflect the opinions of

41:37

gen Rich three sixty or affiliates,

41:39

and may have been previously disseminated by

41:41

David Grasso on this podcast,

41:43

television, radio, Internet, or another

41:46

medium. You should not treat any opinion expressed

41:48

by David grass So as a specific inducement

41:51

to make a particular investment or follow in

41:53

particular strategy, but only as an expression

41:55

of his opinion. David Grass's opinions are based

41:57

upon information he considers reliable,

42:00

but neither ging Rich Productions nor its

42:02

affiliates and or subsidiaries

42:04

warrant its completeness or accuracy,

42:07

and it should not be relied upon as such.

42:09

David Grasso, ging Ridge Productions, its affiliates,

42:11

and or subsidiaries are not under any

42:13

obligation to update or correct any information

42:16

provided on this website. David Grasslo's

42:18

statements and opinions are subject to change without

42:20

notice. No part of David Grasso's compensation

42:23

from ging Ridge Productions is related to the specific

42:25

opinions he expresses. Past

42:28

performance is not indicative of future results.

42:30

Neither David Grasso nor ging Ridge three sixty

42:33

guarantees any specific outcome or profit.

42:35

You should be aware of the real risk of

42:37

loss in following any strategy or investment

42:39

discussed on this website or on the show.

42:42

Strategies or investments discussed may fluctuate

42:44

in price or value. Investors may

42:46

get back less than invested. Investments

42:49

or strategies mentioned on this website or on

42:51

the show may not be suitable for you. This material

42:53

does not take into account your particular

42:55

investment objectives, financial situation,

42:57

or needs, and is not intended as recommendedation

43:00

is appropriate for you. You must take an independent

43:02

decision regarding investments or strategies

43:05

mentioned on this website or on the show. Before

43:07

acting on information on this website or on the

43:10

show, you should consider whether it is

43:12

suitable for your particular circumstances

43:14

and strongly consider seeking advice from your

43:16

own financial or investment advisor.