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NYC has some real strengths, but Arizona has its advantages too. We’ll find out what those are with Ben Bottner, an AZ native who built a successful company in New York, but is now back in AZ working on his second.
Contact: Mike mike@resoundcreative.com or Chris chris@resoundcreative.com
Discuss at https://www.facebook.com/azbrandcast/
The show is recorded at the enviable MAC6 coworking space in ever-sunny Tempe, Arizona (the 48th – and best state of them all).
Show Transcript
Mike Jones:
This is the AZ Brandcast, where we explore Arizona’s brand and the brands that make Arizona. I’m Mike Jones.
Chris Stadler:
And I’m Chris Stadler.
Mike Jones:
Welcome everybody to AZ Brandcast, where we talk to all sorts of awesome people about the power of brand, and how to build great brands in our remarkable State of Arizona. We’re your co-hosts, Mike Jones and…
Chris Stadler:
Chris Stadler.
Mike Jones:
And Chris, you’re going to intro our amazing guest today.
Chris Stadler:
Yes.
Mike Jones:
So excited about this.
Chris Stadler:
Ben Bottner. Ben’s actually become a friend to both of us separately. Right? We’ve had separate conversations with Ben, so we’re privileged to have him on the podcast. Ben Bottner is currently the CEO founder of Steady Install Inc. which serves as an on-demand virtual platform for the commercial furniture installation industry, to hire supplemental labor for interior installation projects.
Previously, Ben co-founded and served as president of Choice NY, New York, Management, a third party real estate service provider that offered property and asset management, building staffing and owner, rep, internal residential leasing services to the tri-state area. And I looked up tri-state area because I didn’t know what that was. Apparently it’s New York City and then counties from Connecticut, New Jersey and New York that are close to that area, right? Is that right, Ben?
Ben Bottner:
You mean three-state?
Chris Stadler:
The tri-state area.
Ben Bottner:
Yeah.
Chris Stadler:
It’s not all of Connecticut, all of New York, all of New Jersey. It’s actually New York City and then some counties from each of those states that are … Is that right?
Ben Bottner:
I think when you are in the tri-state area, it’s just a word you throw around, but yes, technically that’s correct. First time I’ve ever had this conversation about the tri-state, but yes. You got it.
Chris Stadler:
Well, it’s crucial that we nail that, since we’ve brought it up. I like to define the terms. Thank you, Ben. All right, let me just jump into it, because I want to add, this icebreaker question is super… Having a startup guy on the podcast, what I want to know, and this is a question for all of us, the worst or most overused startup advice that you’ve ever heard. Whether that’s a refrain, just something that you hear said all the time that’s just like, “That’s not quite right,” or maybe it’s just overused.
Ben Bottner:
I think I would have to go with the complete focus on revenue, and about getting to revenue, and get as much revenue as you can. And not that that’s incorrect, but it’s, I think, it was a bit of a sign of the times where everything was just about revenue. And there really wasn’t much focus on profitability or, is this a real business, and it was just, get revenue. That is what everyone said. And I don’t think the industry’s bailing companies out any more just based on revenue.
I think that you have to have a real company, because if you don’t, what happens is what we all just saw. With these companies that were just growing, trying to get going based on revenue and were throwing tons of expenses at it to get that revenue. Had a hard time if they needed to do a fundraise. When the music stopped, then everything that’s been going on started.
Chris Stadler:
Like musical chairs, and there’s no chair left. Then what?
Ben Bottner:
Yeah, and then you sit on the floor. You sit in the corner. A lot of those companies got stuck.
Chris Stadler:
You go eat birthday cake because you’re done, man.
Ben Bottner:
Well, it’s not their fault, but it’s like flipping houses. It’s good until it’s not, and timing is everything. And so always everyone’s like, “Just get your revenue. Get as much revenue as you can.” It can work at times, and if you time it right, it works, and if not, you’ve got big problems. Luckily I ignored that advice.
Chris Stadler:
Is that …
Ben Bottner:
I had no interest in revenue.
Chris Stadler:
None at all. Is that indicative of just like chasing that initial customer? The new acquisition rather than thinking about a more holistic term of, not only do you have to acquire a customer, you’ve got to keep them?
Ben Bottner:
Yeah. It’s just how far down the line you’re thinking, and rate of growth is crucial. If you don’t make sure that you are prepared as you grow, you lose the revenue that you bring in. And you’re constantly starting over, and at some point you will run out of new relationships to learn off of. I mean, that’s the whole thing, is you try not to cut your teeth on your client’s dime or your client’s time.
And so for me, it’s not really been a choice, it’s just how I operate, my risk tolerance. I’ll take a little more time and sleep a little better, and have it be a little less chaotic. And ultimately grow a little slower, from a revenue standpoint, not necessarily for profit building.
Chris Stadler:
Nice. I already know this conversation is going to be awesome. It’s starting out really well. Mike, what is your worst-
Ben Bottner:
Then I’m out. I’m out. I’m done then. Thank you, guys.
Chris Stadler:
Our expectations are super high now, Ben.
Ben Bottner:
Knowing when to exit. [crosstalk 00:06:32]. Timing.
Chris Stadler:
Time is everything.
Mike Jones:
That’s right. You want my … Mike here … worst advice?
Ben Bottner:
Yes.
Mike Jones:
We were talking about this earlier, Chris. The advice that I hear floated around with a lot of startups, it’s usually good advice, even the overused, oversimplified. At some point that was legit advice, and then maybe it just gets applied to too many different companies. And I don’t even know how many people actually use this phrase anymore, but the fake-it-till-you-make-it type of advice drives me personally nuts. That probably has more to do with my bias toward authenticity in building a brand. But I think there’s an aspect of it that I think is true. There’s an aspect to “fake it till you make it” means, hey, have a vision for what you want to build. It doesn’t exist yet, but start working towards it.
And I’m totally cool with that. Have a vision for what it is you want to be. Yeah, you’re not going to be that on day zero. But if you don’t have a plan for it, and that’s where I see a lot of people using that advice to basically mean, “I don’t have to have a plan. I just go say stuff and if I speak it, it’ll happen.” And I’m, “Well, not really.”
Chris Stadler:
You’re not against dressing for the job you want, that sort of thinking-
Mike Jones:
No.
Chris Stadler:
Hey you dream about it, think about it, start acting it out. But you’re saying have some substance, [crosstalk 00:08:21].
Mike Jones:
Yeah, have some substance now. Ultimately, if you’re going to go pitch, those investors, if they’re at all savvy at any level. they’re going to see through any of your BS fake it crap. Now granted, you still have to have a vision. That’s part of what they’re buying into. But if you don’t have a team and you don’t have the rest of it thought out, and of course, the financial side of it, they’re going to be, “Great, you’re an idea but tell me more. Give me something more than just an idea.”
And I think there’s a level of, you can take that to an extreme as well. Even within your marketing communications where, “Hey, we’re going to pretend we’re a 500-person company when we’re three people sitting at a card table,” right? And that doesn’t mean that you need to peel back the curtain and show everybody every last dirty secret about your company and how unprofessional it is to date. Unprofessional in quotes. Because that’s somebody’s assumed definition of that. It’s okay to own where you’re at, and I think that’s where I get a little bit of, “Come on, really? You’re just going to pretend you’re something that you’re not because someone somewhere along the line, some entrepreneurial guru told you, “Fake it?”
Chris Stadler:
Fake it till you make it.
Mike Jones:
My mantra has always been, make it until you make it, which is that you’re constantly building. And you are making the things that you need to get where you want to go to be quote unquote [inaudible 00:10:16].
Chris Stadler:
My favorite is, and one I didn’t quite understand was, hustle harder. I didn’t quite understand why that was profound, but I also felt like that solves the problem of someone not hustling hard enough. But I don’t know that that’s most startups. It might be, but I feel like hustle harder, I feel like people are already putting in a lot of time into their businesses. At some point it’s like, maybe it’s time to hustle smarter, maybe. That was one that personally I’m just … And maybe it’s because of who I am, I’m just like, “Well, I want to find better ways to gain long term operational speed. Maybe to worry so much about, okay, more time away from my family, more time,” that kind of thing. That’s my favorite one.
I’m really interested in talking about Ben’s experience. Ben, you started a real estate business in New York City. First of all, tell us when that was, because I think the timing was really interesting. And then also tell us how much you knew about real estate going into it.
Ben Bottner:
We started planning that in 2009. I had been doing commercial real estate investment sales for three or four years at that point. I was a sales broker for buildings in New York and in the boroughs. How much did I know about real estate? I knew everything outside of property management. I knew spreadsheet real estate. And I knew properties and how to underwrite them on a floppy number per square foot, as an average. And I understood valuations, but I had no experience with the bricks.
Chris Stadler:
So you knew everything but the actual job that you were creating?
Ben Bottner:
Yes.
Chris Stadler:
That’s awesome.
Ben Bottner:
It came about because I had started there, I think end of ’05 or early ’06, and in 2008, things definitely changed. And I was doing BOVs for banks on properties but the transactions were way down. And I had noticed something that I really didn’t know what to do with, which is that everyone complained about their property management companies, and there were no new ones. But it was just thought and that was really it.
I had gone out to lunch with a friend of mine. He was at a private equity, and that shop, that went under. He was trying to figure out what to do next and he threw out, “Hey, I was thinking about property management,” and I was, “That’s so funny, I was thinking about that too. What do you know about it?” He said, “Well, not really anything, but I definitely understand real estate and I know how people, I understand all those investments.” Okay, well. All right, we have that covered between the two of us. And he was, “You know, but it’s learnable.”
And so we said, “Okay, let’s do it.” We felt like we could get hired. That was actually the ultimate stimulus. Sounds like I feel like the kind of quiet relationships I developed, which was a nice slow sell, would lend itself to some of them maybe somebody hiring us to manage the properties. And, so we started planning, and I think between the two of us, we probably put in five or six grand. It bought a couple of computers, some business cards, incorporated, which is expensive to do out there.
And that was it. And we somehow thought someone would hire us, and then we worked very hard and did a great job, because they were our only client. Learned a lot. And then got our second client end of 2010, a big one. And we hired a bookkeeper, went back to making nothing. And that was really our path. It was very organic. Did that answer the question?
Chris Stadler:
Yes. Is that company still going on today?
Ben Bottner:
Yeah, it is. In 2018, I sold my half of the company. We had 135 employees at that time, and I think last year they acquired another smaller company. I think they’re now in the top 20 or top 15 largest management companies in New York City.
Chris Stadler:
You exited?
Ben Bottner:
I did.
Chris Stadler:
That was a pretty cool. It’s a badge of honor, right? In startups?
Ben Bottner:
It is. But this was not, when you talk about startups, I don’t think we fit the mold, that flashy word likes to use. Startup is a, start an insane rat race for a certain rate of growth, and exit. And ours was, we started up a business, and then we grew it. We didn’t have any investors. I often refer to it as sandal-strapped, which [crosstalk 00:16:18].
Chris Stadler:
I like that.
Ben Bottner:
A notch below bootstrapping.
Chris Stadler:
Is it because you couldn’t afford the boot?
Ben Bottner:
We were sock-strapped. Yeah.
Chris Stadler:
When you can’t afford the boot, it’s a sandal strap?
Ben Bottner:
Yeah. [inaudible 00:16:32] strapped. I mean, it was really scrappy. I mean, our first office was a 10 by 10 room with no windows, and we borrowed it from someone because we renegotiated his HVAC contract, which we didn’t know how to do. So we just looked at it and renegotiate. I mean, it was all very, very scrappy. But that’s how we grew. That’s always how we grew.
Mike Jones:
That’s awesome.
Chris Stadler:
You’re from here, right?
Ben Bottner:
Yeah, I grew up here. I went to University of Michigan. And then after that, I went to New York, not for real estate, though. I went to Columbia Dental School for one semester and a day. And then, passed my classes barely and immediately withdrew. Then I fell into real estate.
Chris Stadler:
Awesome.
Ben Bottner:
[crosstalk 00:17:39] after almost 14 years.
Chris Stadler:
What brought you back to Arizona?
Ben Bottner:
The true answer is, lifestyle and family. Not the most exciting answer. But, being in a location like New York or any of these top markets that people in the tech world will push you to, the way of life creates an even steeper hill to climb. I needed to live in a house. I didn’t want to live in an apartment anymore. And so I had a house in New Jersey and I was commuting in and out to the city every day. I caught the 5:00 something AM train. I even left my office at 5:00 PM to be home by 6:00 something. I was always rushing. I was always late. And there was genuinely not enough hours.
And so I think it got to the point where it was just unmanageable. Some people are okay with it. I’m someone that wants to be, being with family and seeing my life, seeing my kids, is important to me, with something left in the tank. And I really got to that point where I hit my ceiling. Arizona was a really obvious choice.
Chris Stadler:
Interesting. I’ve heard people talk about work/life balance before. And since we’re contrasting New York and Arizona, because that’s your experience, I’m curious, and I’m interested in, Mike, you too, does a work/life balance, does that cost your business? Or do you think that a work/life balance can actually improve the business side, as well? Is it just a compromise in order to be a whole person? Or can it sometimes actually benefit your business, as well?
Does that make sense, the contrast that I’m making? Because on one side-
Ben Bottner:
Yeah. I would say that, there’s a personal cost. I wouldn’t say that there’s a cost to the business, because I think they’re different things. I think it’s unrealistic to think that if you weren’t spending that much more time and effort and intention on your business, that you shouldn’t be compensated for that. Or there shouldn’t be rewards for that financially and for the business.
I do think that the way it should be is, if you’re giving less compared to someone else, and they’re making more sacrifices, that maybe they should have a bigger stake. But for the company itself, it just means that … Because someone needs to pick up that slack. Assuming that we’re talking about, there’s a certain amount of output in either I’m putting forth all of that myself or I’m putting forth two-thirds or three-fourths and someone else has to pick that up. It’s just a function of the company itself. I don’t think it’s hindered if you’re trying to strike that work/life balance.
And I think overall, you’ll get happier employees, you’ll get less turnover. I could talk to you for about an hour about turnover and the damage that it can cause and how expensive it is. But I do think it’s a personal tradeoff that most people don’t really consider. For me, it was always a mantra of, I’m going to be accessible to family, and I’m going to prioritize that. And I’m not going to wait until my kids are too old to want anything to do with me, to learn that lesson. But I don’t think early on I understood that there is a cost to that, that I would have to give something up. You can’t have it all, unless you’re really, really smart, which I’m not. I think that was something I had to accept.
Chris Stadler:
That gets us to part of the next question, and Mike, jump in, please. The next question has to do with why a company would start in Arizona versus say in New York. And as you were talking, it occurred to me, how would you sell investors on, “We want to start up in Arizona,” versus the Bay Area or a New York or something like that? Why would it make sense?
And I think you just made a case that there are some company cultures that would really benefit from a better work/life balance for their employees. They would see less turnover. There would be some other advantages like that. Are there other advantages that Arizona offers over New York, from a business perspective? From a startup perspective?
Ben Bottner:
Yeah. I mean, it’s a right-to-work state. And the war stories I have on running a business in a state like New York, where you are at times really not in the power position when it comes to employees. And how to terminate someone often was a gauntlet of trying to make sure you do it absolutely perfectly. And all someone ever had to do was to claim foul play, and the legal system in New York made it so that defending a perfectly correct position often was a bad business decision. And so you found yourself at times with people, and we even saw this with tenants, that would take advantage of that. They knew that the cost of defending it, where even if you win, you are not recouping legal fees, you’re not getting that time back, it just wasn’t worth it.
And so, I feel like in Arizona, it’s a little more business-friendly from that perspective. Not to mention, obviously, the lower cost of living results in lower salaries. But that’s been one of the biggest differences I’ve seen. You’re not afraid of your employees and you can coach them and when they’ve done something wrong, you can tell them. And when they’ve done something right, you can tell them without fear of them taking that positive reinforcement and using it against you if you ever need to terminate them. It’s very different.
Chris Stadler:
Is there a cultural advantage? Does that affect culture positively or negatively, when you’re able to maybe have those more … Being in that power position, it can sound to some people like, “Oh, now I can take advantage of people.” But it more sounds like it allows you to be able to run the business how you want to run the business and be a little more straight with people. What do you think? Is there a cultural advantage to that?
Ben Bottner:
Yeah. When you say power position, it’s no different than hiring … If you’re hiring a painter to come and paint your house, you’d like to be able to have some input. And tell them maybe to do it a certain way or what to paint and what not to paint. I know that might sound like a dictatorship when you talk about power, but it’s really just what the fundamentals of a relationship should be. I mean, people need employees. And so the employee has the power to quit and go work somewhere else if they’re unhappy, but it had created a conflict.
But I think as far as the culture, and how that dynamic impacts your ability to have employees and to adequately manage them, I think it allows for a level of honesty. That is, for me, much more effective. Because if you’re not able to correct someone, then play this out. The mistake continues, it compounds, you become more and more frustrated. And if you can’t really talk to them and fix it, eventually it’s just going to explode. And same way that if you have to write up someone for infractions because you need to create a paper trail, that also creates an adversarial difficult relationship.
I think it just helps for a more open dialogue, and having it at least gives everyone more of a chance. It gives the employee a better opportunity to improve and grow and fit to what you’re looking for. And gives you the opportunity to be able to communicate that freely and help them.
Chris Stadler:
Yeah. Mike, were you going to say something?
Mike Jones:
Yeah. I mean, I think, at the end of the day, speaking to the culture aspect, Ben, I think it’s been really interesting to get that perspective of almost the bureaucratic challenges that can be imposed from outside of the company. And how, when you remove some of those challenges, it actually gets the culture more focused on how do we get back to work. We have an issue, we need to work through it, but how do we do that in a way that gets the company and the employee back to doing what you want to be doing? Which is ultimately, we want to achieve our goals. We want to pursue our vision and our mission as an organization, and as an individual. What are my individual goals? How do we get those aligned with the company?
I’ve seen that, both in our organization and in others that just, when you can be focused, you can be candid about … It’s not about us and you. It’s about how do we get back on the path that we were already on? Maybe we’ve gotten offtrack a little bit, either through misunderstanding a performance issue, wrong skills, wrong seat kind of thing. And if you got to play some dance in order to get back on track, it actually starts to develop a culture of inefficiency. Where the culture is now, it’s more about these bureaucratic processes.
I sometimes wonder too, if that’s a lot of … We talked about really bureaucratic large businesses and how the culture there is so inefficient and slow. A lot of that I think, is not necessarily purposely. I think they have to play by so many different sets of rules. Most of them imposed from external, or there’s some, Well, this department does it this way and this department does it that way, and then over time you develop this really complex hierarchy of rule sets. And now a culture just becomes … It’s not really about getting things done. It’s about navigating the bureaucracy.
Chris Stadler:
I mean, I think I’ve felt that, too. Yeah, I felt that too. It’s like when you’re sending an email to somebody and someone’s, “Well copy me in so I can make sure it gets done.” Well, now I feel like I’m tattling. I’d rather just have a relationship with this person, work it out ourselves and just earn that respect and earn that trust. But now I’m copying someone in, and now there’s a third party who’s watching it. And that person, instead of building a relationship with that person, now I have to tattle on them.
I have to keep this record of their wrongdoing, so that if I need to fire them, I can, because otherwise, I leave myself vulnerable. But I feel like, and this is the reason I think this is so interesting is because, up until now, we’ve more been talking about Arizona as a place that’s, a lot of people are like, “Well, it’s inexpensive.” But, if we didn’t figure out some of these ways to use Arizona’s advantages, they go beyond just it’s inexpensive. It’s, okay, you have less risk as a company because it’s a right-to-work state. But if that becomes something like, well, it impacts your culture. It allows you to have more trusting relationships with people, because it’s more about the relationship and earning that relationship. That’s how you get things done. Because it’s not litigious, you’re not trying to dot all your I’s and cross your T’s.
I wonder how that could be … Well, let’s not get ahead of ourselves. Are there other things that you’ve seen that you really like about Arizona, for business or for startups in particular?
Ben Bottner:
I think, again, it’s all for me a comparison. But I’ve seen that you have much greater access to larger companies or larger clients that you’d like to go after sooner.
Chris Stadler:
Here or in New York?
Ben Bottner:
No, here. Here. I found in New York, I remember our first buildings that we managed were five, six-unit walk-ups. And we had to take those on for a while until we could get larger buildings. There were many options, as far as property management companies out there. And so I think here, partly due to its size and immaturity in a scale of growth, you can talk to the big companies pretty quickly and you can get to them, and they’ll listen.
That, I think is an advantage of being in, let’s call it what it is, a smaller pond. I always go back to it’s a smaller pond, you can still do really well in a smaller pond. And you probably have a greater chance of success. And getting the bigger pond is a little easier if you already have conquered a small pond. And so, again, going to that rate of growth question. Part of it, I think, has to do with risk tolerance.
Mike Jones:
Do you think that’s simply only a matter of competition, scale of competition here? Or is there also … I don’t know, I’m just asking, but is there a culture difference, too, of companies here just more open?
Ben Bottner:
Again, if I’m comparing only one non-New York place to New York, and that’s relevant, so could Vegas or Austin or Dallas, have the same experiences? I can’t say, but I think so. I think often relationships that you might be trying to infiltrate are not as long, they’re not as old, they’re not as established. But would I go so far as to play into the culture and the politeness of one market to another? I don’t think so, to be honest.
I think in New York, it was just more of, “What? What do you got? Okay, just tell me. What are you telling me? Okay, uh-huh (affirmative), how much? And do you do this, do this, do this, do this? Yes, no? Yes, no? Okay.” Is my answer as to whether I’ll look in that as more. I think there was a bit less of a relationship. I think that it was just about what are you offering. And I think here, people seem to have a little more time, and they’ll talk to you. So you can use common ground at times when necessary.
Mike Jones:
Yeah. I’ve definitely seen that here. Yeah, I’m always curious, how much of that is circumstantial to just the market. And if there’s fewer competitors out there hassling them, then maybe they’re more open to a conversation, more open to a relationship style of pitch. Rather than, you’re in New York, you’re getting hit 24/7 by people.
Ben Bottner:
All day. All day.
Mike Jones:
And so they turn into a transactional just out of necessity. Hey, I have to treat this transactionally because there’s 40 other people lined up.
Ben Bottner:
You’re the fifth call, yeah. You’re the fifth call I’ve got today about this.
Mike Jones:
And that’s less so here. Yeah, I don’t know. I’ve also wondered, too, if it’s a little bit of the transplant culture that we have here. Where, like you said, most people don’t have these really deep long established relationships. At most, there’s a generation or maybe two for those that have been here multiple generations with their business. But for a lot of people, they’ve only entered into this particular microcosm of society in the last 10 or 20 years. And so they don’t have these really deep longstanding relationships.
And I hear that from a lot of people, that come here, that build businesses or do startups here, is that they felt, wow, this is a super open community. I was able to establish myself and build relationships a lot quicker than I have in other places. And I’ve always been curious, what’s behind that? Sure, it’s a lot of different things, but …
Chris Stadler:
Or maybe it’s just Frank Sinatra is … I mean, if you can do it in New York, you can do it anywhere. So maybe that’s supposed to be the hardest place to do anything. Hardest place to have relationships, start a business.
I want to do something that’s a little different than what we’ve done before. I want to attempt to take what we’ve discovered, which I think are two really cool insights. And then see if we can turn them into something that can maybe businesses can use now or startups can use now. The two things that I wrote down, tell me if I’m missing one that you guys liked but, there’s less red tape. And we had the right-to-work example. What I heard was that, that could potentially create some better relationships between people, better growth for employees, better accountability. And then also, the ability to talk to bigger companies sooner.
And then Ben, something you mentioned toward the end of what you were saying was, if you are dealing in a smaller pond. I mean, initially you told me what was counterintuitive to me, which is that, oh, you go to New York, and if you can do it in New York, you can do it anywhere. So you start in New York. And then you go from New York, out. But what you said was, you could potentially start company in a smaller pond, like Arizona or Phoenix, and then that could give you the ladder you need to get to that point where you’re professional enough. You’ve had the incubation time that you need to maybe grow, and get into that bigger pond.
How might companies use these insights in Arizona? This is a free-for-all.
Ben Bottner:
When they’re already here? Or is this about their sitting on a map and they’re deciding where to go?
Chris Stadler:
Yeah, I think the map thing is the fun one, but let’s use people who are here as a model, and just say you’re starting up in Arizona. How should these things encourage you? And then maybe how should this affect planning for your company? How might this affect your future?
Ben Bottner:
I think, firstly, to maybe not be insecure about being in Arizona. I’ve definitely felt that that insecure … I don’t feel it, but I see it around me and I sense it that it’s, “Well, how do you overcome being in Arizona?” And I had some guy say to me literally, “I don’t believe in tech startups out of Arizona.” And I feel like we’re a bit past that. And so, same way in the beginning of a company, sometimes you push the concept that you’re small, and you’re hungrier than everyone else and that you’re nimble. At a certain point you change your narrative. And you don’t sell that concept and you don’t sell that idea, and you start talking about that you’re not small. And you [inaudible 00:41:12] about the small companies. It’s really where, first of all, just being comfortable that you’re in, it’s a real place, it’s a real market. People aren’t riding horses up and down the street. It’s a city, and it works. And there’s a whole industry here for the taking. That would be the first thing.
Beyond that, I think that, just taking advantage of the benefits. Whether you know or you’re familiar with the fact that it might be harder to operate a business elsewhere, learn to do it here, because this is where you are. Understand and learn the way of doing business here. I had to retrain myself when I moved here in certain respects, of how to manage people. And I think it is a luxury to be able to start off having a healthier relationship with employees.
And then people should take advantage of the pro-Arizona startup community that exists. That doesn’t exist elsewhere. When I was in New York, there wasn’t a big support community for New York startups. That didn’t really exist, because a lot of people are telling you to run. Arizona, it seems like there are significant resources put towards promoting this. And I think it’s probably going out of that insecurity I was talking about. But it’s there, so people might as well take advantage.
Chris Stadler:
I hear you say that, but it surprised me, because I’ve heard people talk about how, they complain a little bit about the startup community here. But you’re saying that compared to New York, just the fact that there is one is, is more than [crosstalk 00:43:19].
Ben Bottner:
Yeah, I mean, look, I don’t really take part that much in the Phoenix startup community. I’m a little busy starting up.
Chris Stadler:
It’s a good answer.
Ben Bottner:
But it exists. It exists. And so, for those that want it, it’s there. And if it was there in New York, I didn’t know about it. And so, I do think that that’s unique. There are state resources and local and municipal resources being put towards that.
Chris Stadler:
Mike, do you mind if I throw that question to you, as well? Just about how do businesses use that red tape? You’re a small business owner, as well, in Arizona. You’re a leader in the startup community. With Startup Week, I wonder if you’d chime in, as well.
Mike Jones:
Yeah. I mean, I think Ben nailed a lot of the same thinking that I’ve had over the last few years about these advantages that we have here and how to take advantage of them. I think just reiterating, but maybe building on what you said, Ben, around getting past that chip on your shoulder that you’re not somewhere else. You’re not in San Francisco, you’re not in New York. You’re not in this major first tier city, and that somehow your company or your brand is worth less because of that?
I’m seeing that starting to wear off, but it’s still there. There’s still a lot of startups in our community here. We still struggle with that. And that, I think should lead us to instead say, “No. I’m in, not a first tier city, and yet I can make it. And every single person I want to reach out to here, is that much closer.” And that should give us confidence. That should give us an ability to just jump in and say, “Look, whatever I got to do, it’s actually easier to do here.”
With one caveat, and I would still say, and I’d love to hear your experience with this, and I know this may not, if you’re more of the sandal-strapped type, maybe this doesn’t matter as much. I mean, the one big complaint I always hear from founders is, access to capital. Although, I think that’s finally starting to shift in the last few years here in Arizona. Okay, maybe there’s something to be said around, okay, access to capital. That’s my one hangup with being in Arizona, if that’s your issue from a founder’s standpoint.
But even that, I think, we live in a world where people are pretty accessible. And we just watched over the last three months the entire world become pretty flat. Geographic location really doesn’t matter anymore, for a lot of things. There’s definitely still, relationship-building is always easier when you can look somebody in the eyes across the table from you. And that is intrinsically a little bit more difficult visually. And all that much more so if your relationship you’re trying to build is with somebody who really doesn’t want to be that accessible. As most investors appropriately don’t want to be. Otherwise, yeah. I can’t imagine that kind of lifestyle, if you want to be super accessible and say that you have money to give to invest.
But we’re starting to mature. I’m seeing a lot of resources and tools available now for startups. Even five years ago, it didn’t exist. There’s plenty of investor groups, especially around angel investing, really early seed investing. The VC community is still very small here, but I’m seeing some really good traction being built with VCs outside of Arizona. That groups like GPAC and ACA and other private entities are trying to build those relationships and say, “Look, those VCs might not be here but we can still provide relationship building that allows startups to access them more easily. And still be here.”
And even in a not very … Not a super structured data gathering session, there were about 40 startups that I was a part of. A session with 40 different founders back in January. They were each asked to just provide, “Give us your two-second, how did you fundraise? How much money would you say roughly you got from inside Arizona versus outside Arizona?” And I was actually really surprised. The majority of companies actually said that they raised the majority of their funding from inside Arizona, from investors here. And that was very surprising to me.
I think there’s a shift happening in that regard too, where that insecurity, it’s a purely in your head insecurity. And it’s some kind of perception that I think people get, especially I see it with founders who … Ben, I think your experience is really interesting, because you found it outside Arizona. You found it in New York, and you talk about a big pond. There is no bigger, at least in the US.
And then you come back and you get that benefit of seeing, “Oh, here’s all the challenges that I actually had in New York.” Versus founders I know who founded first here in Arizona, have this perception of all the benefits of being in a … “Oh, if only I was in Silicon Valley,” or, “If only I was in New York,” or, “If only I was in LA. Here’s all these benefits that I would have gotten that I’m not seeing here in Arizona, or that I don’t think are here.” Only to find out when they go, “Oh, wow, this is really challenging, because now I am the smallest fish in the biggest pond.” Versus, there’s a more right sized ability to start up here.
It’s been interesting to assess, when we’ve talked through this, thinking through that small pond/big pond idea, that concept, and how you can use that smaller pond to your advantage. I’ve always thought that, essentially you’re reducing risk. That’s essentially what you’re doing. When you start somewhere where there’s less competition, where there’s easier access to resources and relationships. And for a startup it’s, man, why would you not want that? Those are all the things that are going to help you to grow. It’s going to give you a probability of success and much more opportunity.
Chris Stadler:
Ben, that’s one thing we haven’t talked about quite yet. Tell us about what you’re doing now. Tell us about your current startup you’re running right now.
Ben Bottner:
It’s a gig economy platform that is incredibly specialized. In the office furniture installation industry, they B2B products for companies that need supplemental labor. So our clients, they are installation companies, dealers, facility management companies, moving companies. Anyone at any time who needs additional workers to join, to assist with a move, but primarily to assist with installing big brand manufacturing furniture.
We started in April 2019, and have grown month over month. We didn’t grow March, April, May. We didn’t sink. We are actually pretty close to breaking even each month. But, part of the angle for what we’re doing is, figuring out how to establish, really establish culture and loyalty in a gig economy platform. To me, that was one of the things that I looked at from the start and had a hard time coming up with an answer to.
What I finally settled on was to earn it, rather than more what events can be run or what company structure can exist to … How do we get people to care about this? And how it came down to just treating people really, really well, and assuming, hoping, that that would translate into a rational transaction between two. Where they care about the work we send them, and we pay them 20% to 40% more than they generally make anywhere else. We pay them every single night. We do the right thing, which can mean a lot of different things. And we’ll pay the cost to do the right thing. And we also understand and believe that to be a good business decision.
A big part of our culture has been, how do we shake that perspective and misconception that when you’re in the gig economy, everyone’s flaky. And people are all over the place, how can you depend on them? We’ve been pretty successful. We got a 98.5% show-up rate, which is really high, compared to a lot of other companies.
Mike Jones:
That’s fantastic. I love that people first approach, building trust through making sure they’re valued.
Ben Bottner:
It’s good for business. And I don’t want to cheapen how charitable or altruistic it might initially sound, but it’s a luxury to also have the right thing, in my opinion, be the right business decision.
Mike Jones:
Yeah, but I mean in the longterm, from a business standpoint, if you want to just boil it down to pure business sense, you’re going to build loyalty. Both on your supply side and on the customer side.
Ben Bottner:
Yeah.
Mike Jones:
That’s a win for the business. And maybe there’s some risk upfront or there’s some short-term costs, to pay that 20% or 40% more than market rate or what they’re expecting to get. There’s a perceived risk, at least. But if it’s from a longterm perspective, you see the, “Oh, no, we made that pact tenfold,” because we’re not retraining people over and over and over again because they keep dropping out.
Ben Bottner:
It’s partially about perceived risk but partially about perceived feeling. I think when you may look at the protections for a company like ours and compare them to projections of a company that may not make that same approach, I will tell you that their projections might show bigger numbers in three, four, five years. I can also tell you that they are not factoring in an appropriate churn.
Mike Jones:
No.
Ben Bottner:
And so, when you talk about can and just, well, how are we going to grow, what kind of revenue can we hit, it’s really more that when companies take a different approach, it’s on paper. It looks very impressive. It doesn’t play out like that. It really doesn’t. And so, the hard thing, no one wants to put that in on a writing, because in the world of nonsense protections, it’s not really as relevant. And no one likes to pay attention to that, because all they care about is revenue. But it’s real.
Mike Jones:
No, churn is the killer of most businesses. I mean, you look at almost any business.
Ben Bottner:
Yeah, employee churn, client churn, vendor churn even. I mean, everything takes time.
Mike Jones:
And those are the things that kill. If you can work the churn out of the business, now all of a sudden, you’re not having to rely purely on customer acquisition or talent acquisition, or vendor acquisition. And those are extremely expensive endeavors in business. You can look at study after study that shows the gross extreme amount of expense you put into finding and acquiring a new customer versus keeping an existing customer. And yet, where does most of the marketing sales budget go in most businesses? It goes towards new acquisition.
Now, there’s some sense to that, because it is that expensive, so you have to invest a lot if you’re going to acquire any customers. But the same thing goes on the talent side. If you have employees or you have vendors, those are highly expensive relationships to onboard and offboard. And so, if you’re having to do that less often, you can now reallocate. Basically, those margins increase. You build more profit into the business. And then you can decide, “Well, do we want to reinvest that? How do we want to reinvest that?”
Yeah, I’m all with you. I love talking about churn because I feel like it’s one of the unspoken major issues in most businesses that very few people want to talk about. Because it’s not sexy, it’s not fun. Keeping a customer happy isn’t really that exciting. I don’t get to high five over keeping somebody. The sales team doesn’t get up in the morning because, “Oh, I kept that customer from last year.”
Take a wealth advisor. Where does most of the revenue come from? And most of the profit market? It comes from longstanding client relationships that they’ve had for years and years, that costs them very little to facilitate. It’s literally, hey, one phone call a year, “Hey, how are you doing? Just want to let you know you’re renewing.” That’s it. And obviously that’s a very small microcosm when you’re talking business at scale. That’s one person developing their own personal business through relationships.
But I think that scales. That scales up to any kind of size business.
Chris Stadler:
Well, and the things that you did to create those relationships, the company you are, the company you’ve become, to have those relationships, carries out through that. So even when you do have attrition with vendors or clients, there’s … I’m just going by experience that I’ve had, and then experiences at Resound, as well. I mean, we just see a lot of people benefit from those, not just the relationships that are in place right now, but those relationships that, they just broke off but continue to be good relationships, because of that.
And when you have that trust, we talk about the time it takes to rebuild relationships, the time it takes to turn over and the churn time. If you can reduce the churn time, we’re talking about, by just being a company with a great reputation where people already know you by the time they meet you, then that’s a great … This is a cost reduction, if we want to make it … Turn it into the banal terms. Is there-
Ben Bottner:
Wait. I want to say something on that because you have your segue face on. Before you segue, I think that part of it is, is really being fully committed to defining and working on problems. And so, what I see a lot, and when I’ve been in idea meetings about stuff, people often don’t even realize it, but it’s all about solutions. And they’re not going to make any solutions. But unless they’re solutions to real problems-
Chris Stadler:
[crosstalk 01:01:22].
Ben Bottner:
… and they’re missing the mark. The right problem, or, right. It’s a problem but is it a big problem? And so, for us, we had to do this and continue to on both sides. So we have to solve problems for the business and we have to solve problems for the workers, and not just give them solutions or opportunities. We really had to zero in on the problems. And so, from the businesses, it’s about easy ways to request workers, cost savings, customized requests. And from the workers, it’s level of compensation, flexibility, speed of pay.
But I do see a lot of companies, when they are talking about benefits they offer workers, it’s amazing how much money gets spent on benefits for workers, instead of getting that money to the workers. It always surprises me, where, “Oh, we can offer these benefits. We can offer this.” I think there’s a lot of people who would probably just rather get that money themselves. And maybe it shortens your amenities less, as far as what you offer, but you may not be solving everyone’s problem.
Mike Jones:
Or the root problem, right? It’s a perceived problem.
Ben Bottner:
If you give them the money, you ensure that money, for each of them, goes to the right problem. And that’s been something that we’ve been very aware of, to make sure that we are putting forth solutions to actual problems, and not making those assumptions.
Chris Stadler:
Interesting. You’re talking about the difference between, “Oh, our employees want to be compensated more. Okay, what are other companies doing? Let’s throw this at them. See if that works.” Instead, you’re saying, let’s understand exactly why they want these things, so instead of, we can give them something that’s actually going to meet their needs instead of just being from a list of potential benefits that we can just buy off the shelf and throw at them.
Ben Bottner:
Yeah. Literally. And that’s, in all aspects, I mean that’s even, in dealing with clients and deciding where to allocate money. You just have to be very diligent about allocating resources correctly. It’s not incorporating a feature because one client wants it. And it’s also understanding that sometimes pressure pricing is the best allocation of resource.
Mike Jones:
Yeah, or digging deeper with that client to really understand why they want that feature. We’ve seen that with … We’ve got a pretty deep partnership with a software company here, and we work with a lot of their customers. And it’s really interesting that, we get requests that pass along to the software company. And we tried really hard to go, “Okay, well, why exactly do you want that?”, because I can’t sell to a software company one customer’s desire. They got to see where the benefit is across all of their customers, and as I’m sure you guys know. If it’s, hey, this is actually going to address a problem that a lot of people are feeling across our customer base, then yeah, it makes sense for us to roll out a new feature. But if it’s a one-off isolated issue, this doesn’t really make sense.
And what we found is that, when we take the time to actually understand the problem, and not just at face value we’re going to accept whatever the desired feature is. And then we find out, there’s actually a more fundamental problem they’re trying to solve, that would cross multiple customers across this software company’s customer base. Or, there’s been opportunity to say, “Hey, have you thought about, even the way that you facilitate customer relationships from a packaging/pricing standpoint?” Some of your customers are highly sophisticated, and they want this level of customization. You can’t have that at the core level of your software. But you could create a professional services arm to your business, that would allow these higher tiered customers to have a more customized solution or more high touch approach. And they’re willing to pay for it. That’s what we’re finding.
Those are the kinds of things. You got to really identify what’s the real problem. Not just the stated solution, and then infer the problem. I’m sure that’s what you’re … I’m not saying anything new in this conversation.
Ben Bottner:
No, you are.
Chris Stadler:
No, that’s good. And what I’m hearing, too, is I’m trying to bring this together in my head, but what I’m hearing is that, so we reside by Arizona. Some people talk about Arizona being the wild west, “Oh, there’s no laws there. Everybody’s just savages, riding horses through downtown Phoenix.” And they hear other people say, “Well, but there’s low prices, low prices. Things are cheaper here.” But I think this is where it gets really interesting, when we start talking about people using that freedom, using maybe the lack of regulation that makes some people say it’s the wild west. And they’re basically saying, “Well, it’s a right-to-work state. What are the advantages to that? What are the advantages to this perceived or real lack of regulation?”
And maybe some of that is that ability to just say, “Okay, well, guess what? If we have less regulation, that means that the companies that are good are going to have to truly deal with the problems.” And so I go back to this idea that I heard somewhere, that liberal arts education, I think CS Lewis said this, “Liberal arts education is meant to teach free people how to function in a free society.” And that means that you actually have to know right from wrong and have an idea of values. You have to have an idea of right from wrong, because there’s more freedom to do wrong.
I wonder if we’re starting to, and what I’m hearing, is I wonder if we’re starting to get to a spot where, in Arizona, we’re starting to develop some of these leaders who are able just to say, “I want to have relationships with my employees. That’s how we’re going to deal with this. We’re going to take advantage of the lack of red tape. We’re going to lead. We’re going to do what we’re supposed to. But we’re going to lead.” When it comes to solving problems for customers, they’ll say leaders aren’t the same types of people who are going to say, “Let’s understand the problem better.” I don’t know if I’m making all this stuff up, or those are things you guys really said.
I don’t want to leave out this final idea, too, that, just talking to bigger companies sooner, being able to have the space to work in, being able to talk to the bigger companies sooner. Then pushing to the bigger pond from here. But, because of all the things we’ve talked about, now we’re able to build the company we want. Because there’s less pressure, there’s more opportunity, there’s a little more freedom. There’s almost pressure to relate to people, because it’s not about the red tape. There’s almost pressure to lead well.
And if that’s true, then that’s pretty cool. I wanted to also give you a better opportunity. I wanted to know, is there something that you wanted to share? Something that you wanted to just plug, as we’re wrapping it up here?
Ben Bottner:
I would say that the most important thing I’d like to put forth, would just be a mindset of how companies treat workers, employees. And specifically, the skilled labor force. I’m shocked often, when I hear where a lot of the workers are coming from, and what they used to make, their companies used to charge for their time, and how they were treated. As virtual and IT based as our [inaudible 01:10:35] culture is, we are still and will be for a long time, very dependent upon a skilled force to make everything run. And so, if it means that companies have to have smaller margins and get creative, I think that company should take a look at what are fair wages and not just the wages they can get away with paying people, without them quitting. I’m hoping what people view as their social responsibility out there.
Chris Stadler:
That’s great.
Ben Bottner:
More preachy than venture push.
Chris Stadler:
Love it.
Ben Bottner:
But it’s been on my mind.
Chris Stadler:
Well, it’s not like Mike is the marketing person for Conscious Capitalism Arizona or anything like that, so I’m sure you’re [crosstalk 01:11:39]. No, I love it. I think Mike and I are both on the same page. That’s very cool. Thanks, Ben.
Ben Bottner:
But we’re in the minority, and don’t forget that.
Chris Stadler:
Yup.
Ben Bottner:
Other people need to hear it, too.
Chris Stadler:
Yeah.
Mike Jones:
Yup.
Chris Stadler:
I think it’s encouraging for people to hear. I mean, it’s part of what Conscious Capitalism actually is, since they came up, is trying to do, too, is sharing some of those stories. So that other people can see what’s going on and actually say, “Hey, maybe this is possible. Maybe it’s possible to do it the right way. The way I’ve wanted to do it. The way I dreamed of doing it.”
Mike Jones:
I just want to make sure we let people know, if they want to find out more about Steady Install, or about you, Ben, what are some good places to send them?
Ben Bottner:
They can check out our website at steadyinstall.com. And they can pick up the phone and call us. Can I give you my phone number? Our phone number is 602-492-8048.
Mike Jones:
There you go. Just like a good radio ad.
Chris Stadler:
Do you guys remember the Empire Carpet commercials? They’re in Chicago. 588-2300 Empire.
Ben Bottner:
Yeah.
Mike Jones:
I think every local city-
Ben Bottner:
I got to come over the tune to say my phone number.
Mike Jones:
Yeah.
Chris Stadler:
Yeah. Totally.
Mike Jones:
That’s awesome. If people want to find out more about Ben at Steady Install, Steady Install, S-T-E-A-D-Y I-N-S-T-A-LL .com. Definitely check that out. I think what you guys are doing is actually really cool. You talk about a very niche specialized industry be providing that kind of software connection, is really cool. I’m seeing that more and more. It’s been interesting to watch. That’s a growing market here in Arizona. There’s a number of different companies I’ve seen who are trying to take their experience managing and recruiting for a specific kind of industry. Not necessarily that that’s your experience, but taking that and saying, “How do we provide that and make these connections for people easier?”
Taking labor, people who have skills and have service experience and connecting them with people who have projects and have jobs for them. It’s interesting that that’s coming up more and more here in Arizona. Each that I’ve seen have taken very specialized approach. Some are very focused on restaurants. Some are very focused on construction. You guys obviously are very highly focused and niched into office setup, which is really cool. Such a cool idea.
Ben Bottner:
It’s a strategy preference. And I’ve never felt comfortable carrying multiple hats in my bag, and in the middle of a meeting be, “Oh, really? Well, we have that too.” And I think, again, it’s about your product. The idea that every project you send a worker to, prepares them and makes them that much better for the next one they go on. It’s more thorough, and I think you can have deeper, stronger relationships. And I think your product’s better. There’s a lot of platforms, and it’s everything under the sun. You need someone with a pulse, hey, we got lots of guys with a pulse. That’s just what I’m comfortable with and what I believe in.
Mike Jones:
No, I think it’s not only good but also very smart. That’s great.
Ben Bottner:
So far it seems smart. We’ll see.
Mike Jones:
Yup. Well, we’ll be rooting for you. And we’ll keep in touch for sure. Thank you so much, Ben, for coming on the show. Thank you so much for just brain dumping with us and sharing a lot of your experience, some of which is super recent. Some of it not so much. Thanks for pulling back and jumping into the archive. We appreciate that a lot.
Ben Bottner:
Absolutely. I appreciate you guys having me on.
Mike Jones:
Yeah. Just a quick wrap-up here for everybody. We just want to thank Ben for being with us today. Also, this is another episode of AZ Brandcast. If you enjoy what you heard today, definitely check us out on remarkablecast.com. You can find all of our episodes there back in the archive. And we’ve got tons and tons of conversations just like this that we’ve had with Ben, with lots of other founders, CEOs, presidents. People who are leading businesses here in Arizona and trying to get their perspective on our state and what the advantages and values are here. It’s a starting or building a business. It’s been a fantastic experience for Chris and I, as we’ve got to tap into a lot of really smart people. And understand their perspective, and start to put together our own perspective on, what does it mean to build a business here in Arizona. Hopefully, others are getting some advantage and learning through that. Maybe short-cutting some of the process that many people have to spend a lot longer on, here in Arizona.
Yeah, you can find all of our episodes there. You can also find us on iTunes, all the other places. And again, just want to remind everybody, this show is all about finding out about remarkable brands for the purpose of understanding what makes Arizona a great place to build a business. So, thank you, everybody, for hanging out with us today, listening in to this episode. And we’ll catch you next time.
Speaker 4:
The AZ Brandcast is a project of Resound, and is recorded in Tempe, Arizona with hosts Mike Jones and Chris Stadler. It’s produced and edited by Sam Pagel. Music is produced and provided by Pabrid, an Arizona-based music group. You can find us on Twitter, Facebook, LinkedIn, and at AZ Brandcast. Com. If you’d like more episodes, subscribe on iTunes, Stitcher, Google Play, or wherever you prefer to get your podcasts. To contact the show, find out more about AZ Brandcast, or to join our newsletter list to make sure you never miss another episode, check out our website at remarkablecast.com. Copyright Resound Creative Media LLC, 2020.
