Latest / Money And Wealth With John Hope Bryant / The Hidden Businesses That Keep Cities Running

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The Hidden Businesses That Keep Cities Running · Money And Wealth With John Hope Bryant

• 0:00
  Speaker 1: Welcome to Money and Wealth with John Hobryant, a production
• 0:03
  Speaker 1: of the Black Effect Podcast Network and iHeartRadio. Hey, Hey,
• 0:15
  Speaker 1: this is John Hope Bryant, and this is the Black
• 0:17
  Speaker 1: Effect Network. iHeartRadio presented Money and Wealth podcast series. This
• 0:23
  Speaker 1: is going into season three and I promised to unpack
• 0:29
  Speaker 1: this thing called capitalism for.
• 0:31
  Speaker 2: You and to repack it with you in mind.
• 0:34
  Speaker 1: I promised you that from the first season, when you
• 0:38
  Speaker 1: finish with season three, you should be able to send
• 0:42
  Speaker 1: your kids to college. You should be able to raise
• 0:47
  Speaker 1: a family from scratch with this like as your home
• 0:50
  Speaker 1: economous class. You should be able to reset your life
• 0:53
  Speaker 1: midway through career and have something in those three seasons
• 0:59
  Speaker 1: that speak to you in detail, not theory, not conceptual,
• 1:05
  Speaker 1: not hype, but the substance of the matter.
• 1:10
  Speaker 2: PhDs are good. pH d's are even better.
• 1:14
  Speaker 1: So I promised you that I would get down to
• 1:19
  Speaker 1: the real with you, and I'm keeping that promise. I
• 1:23
  Speaker 1: think today the last time I touched this series of
• 1:28
  Speaker 1: Capitalism for All, my new book is coming up. I'll
• 1:31
  Speaker 1: be doing this as a run up to that book
• 1:33
  Speaker 1: release and how capitalism actually works, why you should have
• 1:37
  Speaker 1: any faith in it whatsoever?
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  Speaker 2: Because it has, for good reason, disappointed you.
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  Speaker 1: The last time I dealt with this topic, I dealt
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  Speaker 1: with cities and the millionaire next door. So this one
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  Speaker 1: is entitled building on that, the fifty businesses that every
• 1:56
  Speaker 1: city can't live without and why the recession proof maybe
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  Speaker 1: even AI proof.
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  Speaker 2: Some of them.
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  Speaker 1: So let's get into this because I think that this
• 2:12
  Speaker 1: forty five minute, fifty minute episode just might be the
• 2:16
  Speaker 1: new leash on life, lease on life that you're looking for.
• 2:20
  Speaker 1: Not you, someone in your family, a loved one, a friend,
• 2:24
  Speaker 1: a coworker, the future version of you, your child, somebody
• 2:30
  Speaker 1: who is looking to live their best version of their
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  Speaker 1: dreams in real time, in real life. I like what
• 2:40
  Speaker 1: doctor Dorothy Hyde told me, and I want to apply
• 2:43
  Speaker 1: to you. She said, John, I like you because you're
• 2:46
  Speaker 1: a dreamer with a shovel in your hands. So in
• 2:49
  Speaker 1: the last episode we talked about how cities really work,
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  Speaker 1: not as places, but as economic machines. Today, we're going
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  Speaker 1: to get very specific. Every city in America, no matter
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  Speaker 1: the size, must buy certain things, not because it wants to,
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  Speaker 1: but because it has no choice. Trash must be collected, okay,
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  Speaker 1: water must flow, lights must turn on, buildings must be
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  Speaker 1: cleaned systems must be maintained. These needs don't disappear in recessions.
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  Speaker 1: They don't go away during elections. They don't stop because
• 3:34
  Speaker 1: of technology, including a eye, which I'm a big believer in.
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  Speaker 1: By the way, and here's the quiet truth spoken out loud.
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  Speaker 1: Most of the safest, most durable businesses in America live
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  Speaker 1: right here inside the everyday needs of cities.
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  Speaker 2: That's right.
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  Speaker 1: Millionaires are more often than not the person, the family
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  Speaker 1: right next door. It's nothing sexy, it's nothing fancy. It's
• 4:08
  Speaker 1: not a new tech startup, right, it didn't invent anything today.
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  Speaker 1: I want to walk you through the businesses every city
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  Speaker 1: can live without, which means you can provide these services,
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  Speaker 1: and why these are some of the most recession proof
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  Speaker 1: past the ownership and wealth creation in the country.
• 4:31
  Speaker 2: Let's get into it.
• 4:34
  Speaker 1: Why non optional demand matters in capitalism. The fastest demand
• 4:43
  Speaker 1: is non optional demand. What I mean by that optional
• 4:46
  Speaker 1: demand is, you know, are things that people buy when
• 4:50
  Speaker 1: times are good. Non optional demand is what must happen
• 4:56
  Speaker 1: no matter what. So you think about which business you
• 5:00
  Speaker 1: want to be in. Cities operate almost entirely on non
• 5:05
  Speaker 1: optional demand. That's why these businesses tend to survive downturns
• 5:12
  Speaker 1: better than trend driven industries. This is why I say
• 5:19
  Speaker 1: I love boring businesses. So called boring businesses not boring
• 5:23
  Speaker 1: to me, but that's what some people say when people
• 5:27
  Speaker 1: get tight. When money gets tight, cities may delay projects, yes,
• 5:34
  Speaker 1: but they don't cancel necessities. No. If you want stability,
• 5:40
  Speaker 1: study what cannot be postponed. That's one of the reasons
• 5:44
  Speaker 1: that I love things like you know, real estate, affordable housing,
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  Speaker 1: you know, the businesses that I'm involved with personally, finance
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  Speaker 1: and things like that are things that are core to
• 5:58
  Speaker 1: the life, bread, lifeblood, and the heartbeat of society itself.
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  Speaker 1: It's also good capitalism. It's doing well by doing good,
• 6:08
  Speaker 1: doing well and doing good doing well by doing good
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  Speaker 1: where I benefit and you benefit more, that's good capitalism.
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  Speaker 1: Bad capitalism is where I benefit and you pay a
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  Speaker 1: price for it.
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  Speaker 2: Right. That's a different podcast for another day.
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  Speaker 1: So here are the five categories of businesses every city
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  Speaker 1: must buy. Please take note, come back to this if
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  Speaker 1: you have to your driving, don't you know, don't drive
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  Speaker 1: and text. Don't drive, And note I'll either have somebody
• 6:39
  Speaker 1: in the car take this down for you or do
• 6:41
  Speaker 1: this on replay and take notes down later in your phone,
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  Speaker 1: your iPad or long form if you still write things
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  Speaker 1: out in a pad, But for the moment, just commit
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  Speaker 1: this to memory. So slow down here. This is the
• 6:59
  Speaker 1: heart of the episode. Right here. I want you to
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  Speaker 1: really dig into this. Right, core infrastructure, that's category one.
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  Speaker 1: Cities cannot function without core infrastructure. These are the backbone businesses.
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  Speaker 1: Write these down later. Trash collection and recycling. Don't hate
• 7:22
  Speaker 1: on this. It's a very profitable business. Trash collection and recycling,
• 7:29
  Speaker 1: landfills and waste transfer stations, street sweeping, snow and ice removal. Yes,
• 7:39
  Speaker 1: private companies more times than not are the contractors doing
• 7:44
  Speaker 1: this for cities.
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  Speaker 2: You may see a snowmoll bill.
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  Speaker 1: In your town if you have snow and it looks
• 7:53
  Speaker 1: like even a city vehicle, it could be a contractor
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  Speaker 1: doing the function on behalf of the city under contract,
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  Speaker 1: with a city logo on their on their truck, on
• 8:05
  Speaker 1: their bus, on their machinery. You go, you got to
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  Speaker 1: actually go and ask that personal question, do you work
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  Speaker 1: for the city or do you work for a private company? Right,
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  Speaker 1: Snow and ice removal, road paving and stripping, striping they
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  Speaker 1: call it. Right, So all this is the same thing.
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  Speaker 1: These could look like it's the city or the county,
• 8:25
  Speaker 1: but in reality this could entirely be a private business.
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  Speaker 1: Many cases it is a private business, and certainly in
• 8:31
  Speaker 1: small cities. Sidewalk in concrete repair. This is what my
• 8:35
  Speaker 1: daddy did the business. He was in the concrete business.
• 8:39
  Speaker 1: Johnny will Smith, Johnny's contract, Johnny's cement work is what
• 8:42
  Speaker 1: it was called. I know he drugged me out to.
• 8:45
  Speaker 2: Do it with him.
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  Speaker 1: Plumbing and sewer maintenance. I love plumbing. We need fifty
• 8:51
  Speaker 1: thousand new plumbers a year. You'll never ai plumbing right.
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  Speaker 1: And most plumbers make more money than boats. Drup walking
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  Speaker 1: around in suits and dies, you know, bragging them by
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  Speaker 1: their six figure income. Water treatment services okay, storm water drainage,
• 9:06
  Speaker 1: electrical grid maintenance, traffic signal installation and repair. Street lightning
• 9:15
  Speaker 1: not lightning, but you know street lighting. You might get
• 9:17
  Speaker 1: light might get lightning too, but street lighting. These businesses
• 9:21
  Speaker 1: don't get applause. Okay, they get paid repeatedly. This is
• 9:27
  Speaker 1: making smart sexy. We've been making dumb sexy for way
• 9:30
  Speaker 1: too long. We've dumb down and celebrated. It was time
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  Speaker 1: to make smart sexy again. If my friend Bishop Tdjkes
• 9:36
  Speaker 1: Chairman TDJS would say, it's time to make boring sexy.
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  Speaker 1: Category two Property and Facilities maintenance. Pick your lane, people,
• 9:46
  Speaker 1: pick your lane. I don't care which lane is.
• 9:47
  Speaker 2: Pick one. Okay.
• 9:49
  Speaker 1: Every city owns buildings and every building ages janitorial. I mean,
• 9:54
  Speaker 1: what is entrepreneurship really? It's or what is business? It's
• 9:57
  Speaker 1: solving problems. What is entrepreneurship? It is creating a new
• 10:02
  Speaker 1: uh solution to maybe an old problem, or creating a
• 10:05
  Speaker 1: new solution to a new a new interest, a new
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  Speaker 1: defined interest. Right, And you think about every everything that
• 10:12
  Speaker 1: I've created is pretty much that that model, right. All
• 10:16
  Speaker 1: the businesses I've created are essentially that same model. People
• 10:20
  Speaker 1: didn't even know that they needed financial literacy until we
• 10:24
  Speaker 1: pioneered pioneered AI literacy and hope inside the workplace and
• 10:30
  Speaker 1: hope and one me in black business and the need
• 10:32
  Speaker 1: the program, Uh. The way we developed the Promise Homes
• 10:37
  Speaker 1: company and the first iteration out of the folks who
• 10:39
  Speaker 1: own the company now I don't, I don't having the
• 10:43
  Speaker 1: control of it now, but when I owned it, it's
• 10:45
  Speaker 1: a very very interesting UH business model. A twist on
• 10:52
  Speaker 1: on on on single family rentals folks gave folks a
• 10:56
  Speaker 1: path to rent to own as an example, who I'm
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  Speaker 1: doing with CIM anyway. Okay, So the point is that
• 11:02
  Speaker 1: entrepreneurship and business is solving problems and creating new value
• 11:12
  Speaker 1: added resolutions. So the property and facilities maintenance, Okay, that
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  Speaker 1: category includes janitorial and sanitation services, HVAC, installation and maintenance
• 11:24
  Speaker 1: so you know, air conditioning essentially and heating. Again, that's
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  Speaker 1: another fifty sixty thousand jobs needed a year. Never go
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  Speaker 1: out of business and in the hotter the place is
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  Speaker 1: the more bulletproof that business is Texas. You're gonna need
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  Speaker 1: it forever, right, Elevator maintenance, by the way, air.
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  Speaker 2: Conditioning, HVAC.
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  Speaker 1: Think about all the southern states, think about Mississippi, Alabama,
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  Speaker 1: I think about you know, Florida even I mean a
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  Speaker 1: locked in the fire suppression services, roofing and waterproofing, pest control,
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  Speaker 1: landscaping and grounds keeping, tree trimming, right, graffiti removal, parking
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  Speaker 1: lot repair.
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  Speaker 2: And you know this is maintenance on reboot. Right. Maintenance
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  Speaker 2: is really forever revenue right, They're always need it right.
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  Speaker 1: Category for safety compliance and regulation, Now, this category is
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  Speaker 1: scares people, which is exactly why it's profitable. And why
• 12:33
  Speaker 1: you can why you can easily create almost a lock
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  Speaker 1: on the market if you will, if if this becomes
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  Speaker 1: your expertise. Private security services, okay, alarm monitoring, fire inspection,
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  Speaker 1: environmental compliance. This is a very strong niche. That's and
• 12:52
  Speaker 1: this is a big, great example of good capitalism. OSHA
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  Speaker 1: and workplace safety services, Hazardous material disposal. This is a
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  Speaker 1: huge business that only a few companies really have dug into.
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  Speaker 1: But it's just something that every city is going to need.
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  Speaker 2: Right.
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  Speaker 1: You don't need it all the time, but when you
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  Speaker 1: needed who are you going to call? That person's under
• 13:15
  Speaker 1: contract of that company.
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  Speaker 2: Right.
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  Speaker 1: So regulation doesn't kill opportunity. It protects incumbents. You want
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  Speaker 1: to be one of the incumbents. Once you're in, it's
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  Speaker 1: hard to push you out. Category four Professional and technical services.
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  Speaker 1: As cities grow, complexity grows and thinking becomes the product.
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  Speaker 1: But most folks are too busy on the urgent to
• 13:42
  Speaker 1: focus on the importance. Why don't you focus the important
• 13:44
  Speaker 1: while focusing folks are running around?
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  Speaker 2: I was in the.
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  Speaker 1: City, I was in the state capitol named gave me
• 13:50
  Speaker 1: John O'Brien day, February seventeenth, Here in the State of Georgia,
• 13:56
  Speaker 1: and I was there for entrepreneurship. Also use Entrepreneurship Day,
• 14:01
  Speaker 1: saluting these young entrepreneurs and thanks the US, the state
• 14:05
  Speaker 1: senator and the Lieutenant governor for hosting me and making
• 14:07
  Speaker 1: this possible. Anyway, he would just running around like chickens
• 14:10
  Speaker 1: with their hair cut off, and everybody's like, I mean,
• 14:12
  Speaker 1: no one. There was no calm as any place. Everybody's
• 14:15
  Speaker 1: just running around, And I realized this is their normal
• 14:18
  Speaker 1: state of affairs. They're running around all the time in
• 14:21
  Speaker 1: a state of urgency. So anybody who can bring calm
• 14:25
  Speaker 1: to that situation and handle the importance underneath it, the details,
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  Speaker 1: you got a job for life. This is These are
• 14:30
  Speaker 1: contracts for life that I'm explaining. So Category four now
• 14:34
  Speaker 1: professional and technical services. As cities grow, complexity grows, and
• 14:38
  Speaker 1: thinking becomes the product. So it support and managed services works,
• 14:44
  Speaker 1: cybersecurity works, all right? Are you starting to get this?
• 14:49
  Speaker 1: Records digitization and archiving. Okay, you know that this generation
• 14:54
  Speaker 1: of young people can do this with their eyes closed.
• 14:58
  Speaker 1: Payroll services, grant writing, engineering firms, urban planning consultants, Transportation
• 15:07
  Speaker 1: and traffic studies, yes, studies, not just the transportations, the studies.
• 15:12
  Speaker 1: That's a business. H gis mapping and data analysis, compliance reporting. Okay,
• 15:19
  Speaker 1: these businesses scale with knowledge, not trucks. What's in your head,
• 15:25
  Speaker 1: not what's in your hands. Category five. Human and community services.
• 15:31
  Speaker 1: Cities don't just manage assets, they manage people. You know,
• 15:37
  Speaker 1: I buy a company, I don't buy the furniture and
• 15:41
  Speaker 1: the chairs and even the buildings. Right, I'm buying the
• 15:45
  Speaker 1: management team. I'm buying a culture. Right, how they do
• 15:49
  Speaker 1: what they do, that's what differentiates. Most important thing in
• 15:52
  Speaker 1: business is culture. Most important thing in life is culture.
• 15:55
  Speaker 1: What goes on in your house has a culture, What
• 15:58
  Speaker 1: goes on in your block has a culture. What comes
• 15:59
  Speaker 1: on goes on your city has a culture. What goes
• 16:02
  Speaker 1: on in your county as a culture. What goes on
• 16:03
  Speaker 1: in your state has a culture. If it was not
• 16:05
  Speaker 1: the case, you would not travel any place because you
• 16:08
  Speaker 1: stay right at home because everything is the same. So
• 16:12
  Speaker 1: things have culture, things are different, and that gives them
• 16:15
  Speaker 1: a unique twist. What's your culture?
• 16:17
  Speaker 2: All? Right?
• 16:19
  Speaker 1: So here's some examples of human and community services, right,
• 16:24
  Speaker 1: and your twists can be how you deliver these services.
• 16:28
  Speaker 1: Elder care services, childcare and after school programs, public health outreach,
• 16:35
  Speaker 1: mental health services. My god, that's a big one. Homelessness services,
• 16:42
  Speaker 1: food services, and meal programs. Now, you know this is
• 16:45
  Speaker 1: something that black folks and folks if we don't do anything,
• 16:48
  Speaker 1: we can cook some food now, and why just sell
• 16:52
  Speaker 1: that as a one off meal here and a one
• 16:54
  Speaker 1: off meal there. Why would you sell one hundred miles,
• 16:56
  Speaker 1: two hundred mills, five undred meals at a time under
• 16:59
  Speaker 1: contract to the city, to the jail services, to the
• 17:03
  Speaker 1: juvenile you know, justice services, to the court services. It's
• 17:07
  Speaker 1: not just a city government. It's all these sub to
• 17:10
  Speaker 1: the school district. Right, These are scept different parts of
• 17:14
  Speaker 1: government that all need these same services. Workforce training providers,
• 17:23
  Speaker 1: transit support services, event logistics and permitting. Now you know
• 17:28
  Speaker 1: all these event planners out here doing these parties whatever
• 17:30
  Speaker 1: you can be doing this. You can do parties on
• 17:32
  Speaker 1: the weekend and doing your contracts with the city during
• 17:35
  Speaker 1: the day and let the city let your nine to
• 17:37
  Speaker 1: five financial five to nine. You should write that down.
• 17:40
  Speaker 1: Let your nine to five whatever it is, financial five
• 17:42
  Speaker 1: to nine nonprofit operators under city contract. Right, that's that's
• 17:49
  Speaker 1: also a business. So this is where purpose and profit
• 17:52
  Speaker 1: often meet. So these business are recession proof because there's
• 18:05
  Speaker 1: a constant, uninterrupted need.
• 18:10
  Speaker 2: Let's talk plainly about risk.
• 18:14
  Speaker 1: These businesses share four protective characteristics right. One recurring demand cities,
• 18:22
  Speaker 1: don't negotiate necessity. Two long term contracts multi year agreements
• 18:30
  Speaker 1: stabilize revenue. Can I get an amen? You make money
• 18:34
  Speaker 1: during the day, you build wealth in your sleep. If
• 18:36
  Speaker 1: you have a contract for five years, it's not just
• 18:38
  Speaker 1: some cash flow or weekly or monthly revenue. You can capitalize.
• 18:44
  Speaker 1: You can take the value of that five year contract
• 18:47
  Speaker 1: and sell it. Take the value that contract, take it
• 18:49
  Speaker 1: to the bank. Right, you have that five year contract
• 18:52
  Speaker 1: becomes more than cashod to that point, it becomes an asset.
• 18:56
  Speaker 1: I hope you caught that. That was like a drop
• 18:58
  Speaker 1: the mic moment. Three Local advantage, Okay, Proximity and trust matter.
• 19:07
  Speaker 2: If you are.
• 19:09
  Speaker 1: One of the most trusted, most well respected people in
• 19:13
  Speaker 1: your city a second tier city, a third tier city
• 19:15
  Speaker 1: mean a smaller city, not in New York, not in
• 19:17
  Speaker 1: la not in Atlanta, right, not a household name city,
• 19:21
  Speaker 1: and you're well known and well respected, you are prime
• 19:25
  Speaker 1: targets positively discussed, positively described to get and maintain the
• 19:32
  Speaker 1: contracts that I'm talking about. Once you have also proven
• 19:36
  Speaker 1: you as a capacity and expertise to pull it off.
• 19:40
  Speaker 1: Four switching costs. Once a city trusts you, they hesitate
• 19:45
  Speaker 1: to switch. Now this is gangst because this is guaranteed cash.
• 19:50
  Speaker 1: Where people are lazy, they don't want to change. So
• 19:53
  Speaker 1: that's not love that structure.
• 19:55
  Speaker 2: Right.
• 19:56
  Speaker 1: So I've learned when approaching businesses, approaching anybody, if you
• 20:03
  Speaker 1: want to get a no to something, go to middle management, right,
• 20:07
  Speaker 1: because they don't get fired for saying no, get fired
• 20:11
  Speaker 1: for saying yes to the wrong things or the answers no,
• 20:13
  Speaker 1: which means, if you already have a contract, you're part
• 20:16
  Speaker 1: of the predefined yes.
• 20:19
  Speaker 2: Somebody else come in to trying to get.
• 20:20
  Speaker 1: Your contract, then they require a new yes that and
• 20:26
  Speaker 1: the manager, hiring manager whatever is oftentimes more inclined to
• 20:29
  Speaker 1: tell that person no because they don't get fired for
• 20:32
  Speaker 1: saying no. The boss, whoever the boss is in that
• 20:36
  Speaker 1: department or city, they're in the yes business. So if
• 20:38
  Speaker 1: you're trying to get that contract, go to the boss
• 20:41
  Speaker 1: and the boss's boss and mayor whoever the county official
• 20:44
  Speaker 1: and try to get inspire them to hire you. Now,
• 20:47
  Speaker 1: if you already have if you get a contract that
• 20:49
  Speaker 1: didn't exist before you've got that contract. If you do
• 20:51
  Speaker 1: a good job, nurse your loan is you know likelihood
• 20:56
  Speaker 1: that you're going to get renewed year after year provide
• 20:59
  Speaker 1: provided your perform then dot luck structure. So who are
• 21:07
  Speaker 1: these businesses perfect for? Let me be clear, these pasts
• 21:12
  Speaker 1: are not equal opportunity hype situations, right, they are practical
• 21:18
  Speaker 1: opportunity systems. I consider myself the economic plumber, Right, I
• 21:21
  Speaker 1: got to know what I'm talking about. They work especially
• 21:24
  Speaker 1: well for skilled tradespeople, veterans, immigrants, first generation wealth builders.
• 21:32
  Speaker 1: That was me, black and brown entrepreneurs. We've been doing
• 21:36
  Speaker 1: so much but so little for so long. We can
• 21:38
  Speaker 1: almost do anything with nothing. Our middle name is hustle.
• 21:42
  Speaker 1: Families looking for legacy businesses. These are businesses you can
• 21:46
  Speaker 1: hand to your children, not just your resume. If you've
• 21:54
  Speaker 1: been listening carefully, something by now should be clicking in
• 22:00
  Speaker 1: your head. Opportunity isn't hidden, people, It is not hidden,
• 22:05
  Speaker 1: It's just overlooked. Every city is surrounded by businesses that
• 22:12
  Speaker 1: quietly keep life running and quietly build wealth for the
• 22:17
  Speaker 1: people who own them. Own. Let's deal with own for
• 22:26
  Speaker 1: just a moment. I want you to own something, right,
• 22:33
  Speaker 1: because nobody washes rental cars. Right, I want you to
• 22:35
  Speaker 1: own a home. Well, first of all, I want you
• 22:38
  Speaker 1: to own you. I want your own your narrative, your knowledge,
• 22:40
  Speaker 1: your your value proposition. As soon as possible, I want
• 22:44
  Speaker 1: you to buy a house near jobs, near economic activity,
• 22:49
  Speaker 1: which you become a stakeholder, because that changed your entire mindset,
• 22:52
  Speaker 1: all the endorphins on the right side of your brain
• 22:54
  Speaker 1: or creativity and hope and opportunity and belief, all that
• 22:58
  Speaker 1: changes once you become an owner. No one washes rental cars.
• 23:02
  Speaker 1: No one meaning mostly no ones. You may be the
• 23:04
  Speaker 1: saint out there that drives a rental car and takes
• 23:07
  Speaker 1: it to the car wash and washes it, but you
• 23:08
  Speaker 1: are the exception, not the rule. Most people take the car,
• 23:11
  Speaker 1: let it get dirty. You can so dirty you can
• 23:14
  Speaker 1: write your name on the side of it, and they
• 23:15
  Speaker 1: take it back to the person who owns it. So
• 23:17
  Speaker 1: the minute you become part of the ownership mindset, the
• 23:20
  Speaker 1: ownership mentality, the better your whole life will change.
• 23:24
  Speaker 2: Right.
• 23:25
  Speaker 1: So, no different than getting marriage're committed to something larger
• 23:28
  Speaker 1: and more than important to yourself. Having a child, typically
• 23:30
  Speaker 1: for a mature person, it helps you grow up quickly. Right,
• 23:33
  Speaker 1: you realize life is not about you. You know, it's
• 23:36
  Speaker 1: not like I'm tired of talking about me. Now you
• 23:38
  Speaker 1: talk to me about me. It's about we now, not
• 23:40
  Speaker 1: just me. So owning your own narrative, owning your own life,
• 23:44
  Speaker 1: owning your education, owning a business, owning a home, owning
• 23:47
  Speaker 1: a business, owning, owning.
• 23:49
  Speaker 2: Stop.
• 23:49
  Speaker 1: I want you to have an ownership mentality and then
• 23:53
  Speaker 1: you'll you'll you'll begin to elevate your thinking to the
• 23:56
  Speaker 1: next level once you do that. So you don't need
• 24:02
  Speaker 1: to do assuming that you want to do on these businesses. Okay,
• 24:05
  Speaker 1: you're interested. You don't need to do all fifty, right,
• 24:09
  Speaker 1: you just need to choose one. Right, I just gave
• 24:12
  Speaker 1: you fifty alternatives so that no one had an excuse
• 24:16
  Speaker 1: here of no, I can't do this, Just pick one.
• 24:24
  Speaker 2: Do you know that.
• 24:28
  Speaker 1: Success has a thousand mothers and failure as a bastard
• 24:32
  Speaker 1: child like nobody wants to claim the failure. Everybody wants
• 24:37
  Speaker 1: to claim the success. So I take no for vitamins. Right,
• 24:44
  Speaker 1: I may get.
• 24:45
  Speaker 2: No no, no, no, no no no.
• 24:46
  Speaker 1: I ignore that. I'm focusing on the yes. So you
• 24:49
  Speaker 1: tend to give me twenty or fifty or ninety nine.
• 24:53
  Speaker 1: No's fine. Just deliver to me one yes, and I'm happy.
• 24:59
  Speaker 1: And then I lock in that one yes, and then
• 25:01
  Speaker 1: I want these businesses. And once I achieve and I succeed,
• 25:05
  Speaker 1: and I kill it, and I read the book that
• 25:07
  Speaker 1: book outlier Malcolm Gladwell ten thousand hours. Committed to anything,
• 25:12
  Speaker 1: and you'll become the expert, the NBA player, if you
• 25:16
  Speaker 1: will professional athlete in that category, you'll always have a job.
• 25:20
  Speaker 1: You'll always have an opportunity, right, because you're the flight
• 25:22
  Speaker 1: to quality. Just become excellent at one thing and obsess
• 25:26
  Speaker 1: on it like nobody's business, and you'll always have opportunity.
• 25:31
  Speaker 1: Just pick one thing and focus on it like no tomorrow,
• 25:35
  Speaker 1: and become.
• 25:36
  Speaker 2: Good at it.
• 25:37
  Speaker 1: So learn it that thing deeply, serve it and the
• 25:43
  Speaker 1: people well, and give all the credit to the mayor
• 25:47
  Speaker 1: or the county officials or whatever.
• 25:48
  Speaker 2: You're not running for office.
• 25:49
  Speaker 1: You're trying to get your you're trying to get your
• 25:50
  Speaker 1: cash flow of your contract renew you're trying to get
• 25:52
  Speaker 1: your your business.
• 25:53
  Speaker 2: Take care to get your.
• 25:54
  Speaker 1: Ego out of it. Give them the credit. The elected
• 25:57
  Speaker 1: officials are elected officials, right. You're you're trying to be
• 26:01
  Speaker 1: a contracted citizen, right, so serve them well.
• 26:05
  Speaker 2: Build trust.
• 26:08
  Speaker 1: Is better to underestimate and overperform than to underestimate and overperform.
• 26:14
  Speaker 1: Let me phrase that it's better to underestimate and overperform
• 26:17
  Speaker 1: than to overestimate and underperform. And let's say that one
• 26:20
  Speaker 1: more time. It's better to underestimate and overperform than to overestimate.
• 26:26
  Speaker 1: Hype hype, hype, pipe pipe, and to underperform. Build trust
• 26:31
  Speaker 1: by delivering more than you're asked for. Every now and then,
• 26:35
  Speaker 1: I'll give you something extra, something else to chew on.
• 26:37
  Speaker 1: Between weekly episodes, new episodes every Thursday. Drop they alto
• 26:44
  Speaker 1: drop into your feeds. If you subscribe to this podcast,
• 26:47
  Speaker 1: tell your friends to subscribe to the Money and Wealth podcast.
• 26:51
  Speaker 1: And thank you for causing it to be one of
• 26:54
  Speaker 1: the top podcasts for entrepreneurship in the biggest economy in
• 26:58
  Speaker 1: the world, the United States of America, Top fifty sometimes
• 27:02
  Speaker 1: Top twenty five, Top business podcast. Also, thank you, thank you,
• 27:06
  Speaker 1: Thank you, NAACP Image Award nominee, etc.
• 27:11
  Speaker 2: Etc.
• 27:11
  Speaker 1: And we've only gotten started. So here is the bonus
• 27:14
  Speaker 1: track for this week. It's unpacking capitalism and the negotiating Table.
• 27:22
  Speaker 1: I'm going to explain in different ways what capitalism is
• 27:26
  Speaker 1: as I lead up to the publishing of my new
• 27:28
  Speaker 1: book Capitalism for All, which is subtitled Inclusive Economics in
• 27:33
  Speaker 1: the Future Proofing of America and just to prove that
• 27:36
  Speaker 1: it's in everybody's subject.
• 27:38
  Speaker 2: The forwards for this new book are.
• 27:43
  Speaker 1: Ambassador Andrew Young with regard to social justice and dignity.
• 27:48
  Speaker 1: That's doctor King's last living lieutenant in the civil rights movement.
• 27:53
  Speaker 1: Michael Milkin, a vaulted legendary Wall Street financier at Bastion,
• 28:00
  Speaker 1: the CEO of Delta Airlines, the most profitable airline in
• 28:04
  Speaker 1: the world. Coming at it from all angles. So now
• 28:07
  Speaker 1: let me call come at this issue of capitalism from
• 28:11
  Speaker 1: the basic common sense angle. Because common sense is not
• 28:15
  Speaker 1: so common. Let's just not assume anything. Let's break this down. Okay,
• 28:20
  Speaker 1: So I'm gonna do this real quick. Take your notes.
• 28:25
  Speaker 1: Capitalism is really easy to actually explain.
• 28:27
  Speaker 2: Okay.
• 28:28
  Speaker 1: So I'm gonna have in this example a producer of
• 28:32
  Speaker 1: a product, and I'm gonna have a consumer of a product.
• 28:34
  Speaker 1: And in this example, you're gonna be the consumer. Okay,
• 28:39
  Speaker 1: So I'm the capitalist. I'm the bad guy.
• 28:41
  Speaker 2: If you want to call it that. Okay.
• 28:43
  Speaker 1: So my job, okay, my job is to sit across
• 28:50
  Speaker 1: from that negotiating table with you. We're sitting across from
• 28:52
  Speaker 1: a table. Look, get that in your mind. My job
• 28:55
  Speaker 1: is to extract as much money from you as I
• 29:00
  Speaker 1: possibly can, as much value from you as I possibly can,
• 29:05
  Speaker 1: while giving you the least amount of value in return.
• 29:10
  Speaker 1: That's my job. The difference between what I give you
• 29:17
  Speaker 1: and what I keep is margin profit.
• 29:22
  Speaker 2: Your job.
• 29:23
  Speaker 1: Before you start thinking that I'm the bad guy in
• 29:26
  Speaker 1: this example and you're the saint, let me tell you
• 29:28
  Speaker 1: what your job is. Your job, seeing on the other
• 29:30
  Speaker 1: side of that table, is to negotiate with me in
• 29:35
  Speaker 1: a in a market environment where you know prices in
• 29:38
  Speaker 1: the place like the United States of America and the
• 29:40
  Speaker 1: United Kingdom, eta, et cetera, developed economy, prices are pre negotiating.
• 29:44
  Speaker 1: You go to the store, it says the price on
• 29:46
  Speaker 1: the package. But in developing countries, third world countries, in
• 29:52
  Speaker 1: flexible economies, you negotiate your price in real time. Okay,
• 29:56
  Speaker 1: So in this example, you're a negotiator. So on the
• 29:58
  Speaker 1: other side of this tab, and if you're, by the way,
• 30:01
  Speaker 1: sign a personal professional services contract, you're doing this you're negotiating.
• 30:05
  Speaker 1: You're signing an NFL or NBA contract, professional athletic performance contract.
• 30:10
  Speaker 2: This is your situation. Okay.
• 30:11
  Speaker 1: So you're on the consumer side of this table, okay,
• 30:14
  Speaker 1: and your job is to to uh to pay the
• 30:18
  Speaker 1: least amount of money to me the capitalists, while extracting
• 30:23
  Speaker 1: the greatest amount of value. Did you get that. I'm
• 30:28
  Speaker 1: gonna repeat this now slowly and bring it together. The
• 30:30
  Speaker 1: capitalist job is to extract the most amount uh well,
• 30:36
  Speaker 1: to offer the least amount of value while paying well
• 30:42
  Speaker 1: while well requesting the most amount of money from you.
• 30:48
  Speaker 1: Your job, as a consumer is to extract the most
• 30:54
  Speaker 1: amount of value from that capitalist while paying the least
• 31:02
  Speaker 1: amount of money.
• 31:04
  Speaker 2: That exchange, that negotiation, that dynamic tension.
• 31:07
  Speaker 1: The Bible says, every you know good, I mean we
• 31:12
  Speaker 1: all we grow through constructive friction essentially. And I've said
• 31:14
  Speaker 1: that rainbow's only follow storms. Gonna have a rainbow without
• 31:18
  Speaker 1: a storm. First, every good negotiation, everybody leaves the table
• 31:21
  Speaker 1: slightly annoyed. Every good negotiation in life, everybody leaves the
• 31:26
  Speaker 1: table slightly annoyed because no one got everything they wanted.
• 31:31
  Speaker 1: If if you left the table and you're ecstatic, then
• 31:36
  Speaker 1: there was probably an unbalanced negotiation. If you left that
• 31:41
  Speaker 1: table and you were absolutely annoyed it was a slightly
• 31:44
  Speaker 1: it was probably an unbalanced negotiation. But if everybody leaves
• 31:48
  Speaker 1: that table slightly irritated but basically okay, then that's a
• 31:52
  Speaker 1: successful negotiation. That's that dynamic tension again, that could the
• 31:56
  Speaker 1: capitalist job is to extract as much money while giving
• 32:00
  Speaker 1: the least value. Your job as a consumer in this
• 32:02
  Speaker 1: example is to pay the least money while extracting the
• 32:06
  Speaker 1: most value.
• 32:07
  Speaker 2: Fair exchange and the robbery.
• 32:08
  Speaker 1: As my friend Robert Grew would say, there is no
• 32:12
  Speaker 1: perfect here, there is no villain here. It's an exchange
• 32:14
  Speaker 1: of good and services. This is what the system, the
• 32:18
  Speaker 1: free enterprise system provides with capitalism as the trigger, as
• 32:23
  Speaker 1: the execution execution mechanisms. So you'll hear sometimes, you know,
• 32:32
  Speaker 1: traditionally you're recording artists, music entrepreneurs who just love performing,
• 32:40
  Speaker 1: they love singing, and don't want to deal with the business.
• 32:43
  Speaker 1: And you'll hear later on, after they got the Rose
• 32:46
  Speaker 1: Royce and they got the you know, excuse me, they
• 32:49
  Speaker 1: get the Rose Royce, they get the mansion, and they
• 32:52
  Speaker 1: were happy when the bank gave them all of that.
• 32:56
  Speaker 1: But within if they didn't pay, if things didn't turn
• 32:58
  Speaker 1: out right, and they in the bank comes after the
• 33:01
  Speaker 1: car and the mansion all of a sudden, now the
• 33:04
  Speaker 1: bank is you know, they're bad people. I mean, look, look,
• 33:08
  Speaker 1: if I've loan you money and you don't pay me back,
• 33:10
  Speaker 1: I'm coming after my stuff. You know, call me Races
• 33:12
  Speaker 1: if you want to. I'm black just like you. I
• 33:15
  Speaker 1: want my money, though it's not The color is not
• 33:17
  Speaker 1: black or white, or red or blue, the colors green.
• 33:19
  Speaker 1: Give me my money. So sometimes you'll hear so that
• 33:28
  Speaker 1: that's just built milk. That's just like, you know, financial illiteracy.
• 33:32
  Speaker 1: You didn't pay attention to the contract when you signed it,
• 33:35
  Speaker 1: or your business turned sour, and now you want to
• 33:39
  Speaker 1: blame the provide. The person who you signed a contract with.
• 33:41
  Speaker 1: They've set up they they've they've lived up to their
• 33:44
  Speaker 1: obligations that gave you the asset to use whatever, but
• 33:47
  Speaker 1: you're not living up to yours.
• 33:48
  Speaker 2: Now.
• 33:48
  Speaker 1: This is different from if you buy something and it's defective.
• 33:51
  Speaker 1: That's not what I'm talking about. I'm gonna give you
• 33:54
  Speaker 1: a more pointed example. You have an again, an entertainer.
• 33:56
  Speaker 1: Typically in this example, it's a creative artist, and they
• 34:00
  Speaker 1: they signed a contract without paying much attention to it,
• 34:02
  Speaker 1: didn't get a lawyer or review it. Later on, they
• 34:06
  Speaker 1: get upset with the music mogu, the music company, whoever,
• 34:11
  Speaker 1: the lawyer, whoever it is, call them crooks, say that
• 34:14
  Speaker 1: they're you know, discriminated against them and racist. You know,
• 34:17
  Speaker 1: racism exists. That's not what I'm talking about. It's entirely
• 34:22
  Speaker 1: likely in this situation. You just got you just got beat.
• 34:26
  Speaker 1: They they knew that contract.
• 34:28
  Speaker 2: You didn't.
• 34:30
  Speaker 1: They prepared a contract or they had a lawyer look
• 34:32
  Speaker 1: at their contract. You said, oh, I'm good. You were
• 34:35
  Speaker 1: a focused on the girls. You were focused on the plane.
• 34:38
  Speaker 1: You were focusing on the sing and the song, not
• 34:41
  Speaker 1: the thing that could go wrong. Quincy Jones once told
• 34:47
  Speaker 1: me god rest is so. If you think you're in
• 34:50
  Speaker 1: the music business and you don't own music rights, licensing
• 34:53
  Speaker 1: rights and publishing rights, some kind of rights, intellectual property rights.
• 34:57
  Speaker 1: If you don't have those things, you're not in the
• 34:58
  Speaker 1: music business. You're a temporary performer. Drop the mic, right
• 35:05
  Speaker 1: and you're gonna have to drop the mic one day
• 35:06
  Speaker 1: because you're gonna be replaced by somebody because you are
• 35:08
  Speaker 1: just a performer. Right, So we got to go from
• 35:12
  Speaker 1: just rocking the mic to owning it. Owning it means
• 35:14
  Speaker 1: reading your contract. Owning it means getting a lawyer and
• 35:17
  Speaker 1: paying a proper fee to a lawyer to protect your
• 35:21
  Speaker 1: I mean, it's just risk management, it's just legal. It's
• 35:24
  Speaker 1: a certain point. I have a legal fund now. I
• 35:26
  Speaker 1: didn't have a legal fund five years ago. But I
• 35:29
  Speaker 1: just you know, as you as your business grows, your
• 35:33
  Speaker 1: your needs expanded. So risk management becomes part of growing
• 35:37
  Speaker 1: a brand. So if you did not have an attorney
• 35:39
  Speaker 1: look at a contract and the other person had an
• 35:43
  Speaker 1: attorney draft the contract, how in God's name or even
• 35:46
  Speaker 1: in common sense world, do you believe you're gonna be okay?
• 35:50
  Speaker 1: If something goes sideways, you're unprotected and there's maybe some
• 35:55
  Speaker 1: clause or something in that contract that has you disadvantaged.
• 36:02
  Speaker 1: There's a friend of mine who helped someone. I can't
• 36:06
  Speaker 1: give too much detail here, you'll figure it out, but
• 36:08
  Speaker 1: I want to give this an example of a friend
• 36:10
  Speaker 1: of mine who helped another friend to get a business
• 36:14
  Speaker 1: contract that he couldn't get on their own. And friend
• 36:19
  Speaker 1: number one, the celebrity, helped friend number two, the business person,
• 36:22
  Speaker 1: to get this contract. This is about a decade or
• 36:26
  Speaker 1: maybe even two decades ago. It's a long time ago,
• 36:29
  Speaker 1: very prominent business here in Atlanta. And to make a
• 36:33
  Speaker 1: long story short, they got a little bit of cash
• 36:35
  Speaker 1: flow and some benefits from this business, but they weren't
• 36:37
  Speaker 1: really focused on the details. But their arrangement was, you know,
• 36:42
  Speaker 1: I want ten percent of the business. The business is yours,
• 36:44
  Speaker 1: I want ten percent of the business. Unfortunately, they signed
• 36:48
  Speaker 1: a normal contract, so there's not a you know, when
• 36:50
  Speaker 1: you assume, you make an ass out of you and me, right,
• 36:53
  Speaker 1: So a lot of misinformation when you don't tie it
• 36:55
  Speaker 1: down with paper.
• 36:56
  Speaker 2: If it's real, write it down. So they my sense
• 36:59
  Speaker 2: is they did.
• 37:00
  Speaker 1: I'd have a written contract that a verbal agreement, okay,
• 37:04
  Speaker 1: And the celebrity person gets just kept saying, don't worry
• 37:07
  Speaker 1: about it. I'm good, it's not my priority. So the
• 37:10
  Speaker 1: other person, being the business person, assumed that was literally true.
• 37:14
  Speaker 1: So they ten But they kept their promise ten percent
• 37:17
  Speaker 1: of cash flow and all that stuff and benefits the business.
• 37:20
  Speaker 1: They sell the business and the celebrity gets nothing from
• 37:25
  Speaker 1: the cell of the business. That was a big cash flow.
• 37:26
  Speaker 1: That was a big like liquidity moment we call it
• 37:28
  Speaker 1: in business. What happened misalignment of perceptions, assumptions and presumptions.
• 37:37
  Speaker 1: The presumption of the celebrity was well, ten percent is
• 37:40
  Speaker 1: ten percent cash flow and profitability. Of course, when you
• 37:44
  Speaker 1: sell the business, the owner of the business, the business
• 37:46
  Speaker 1: person was like, no, no, no cash flow of the
• 37:49
  Speaker 1: business when he was operating. But when I sell it,
• 37:51
  Speaker 1: that's a whole different situation. That's equity in that's mind
• 37:55
  Speaker 1: as in his, and he did not pay the celebrity,
• 37:59
  Speaker 1: and the celebrity and example had no grounds to go
• 38:02
  Speaker 1: back and whether it's called clawback some of those profits
• 38:06
  Speaker 1: and can't complain about it because they did not get
• 38:09
  Speaker 1: an eternity review at et cetera, et cetera, et cetera.
• 38:11
  Speaker 1: So businesses not personal people, businesses, just business. Stop making
• 38:14
  Speaker 1: it personal. So I'll call on people's nick names when
• 38:16
  Speaker 1: you end up on the wrong side of negotiating terms
• 38:19
  Speaker 1: and conditions when you didn't pay attention, and just learn
• 38:24
  Speaker 1: the lesson and do it right the next time. I
• 38:26
  Speaker 1: have I've learned lessons. I mean, if I make a
• 38:29
  Speaker 1: mistake once, shame on me. I mean, shame on if
• 38:32
  Speaker 1: someone best me in a situation, shame on you. Right,
• 38:36
  Speaker 1: But if I make that mistake twice or three times.
• 38:38
  Speaker 1: Shame on me that I should have learned the first time.
• 38:41
  Speaker 1: So this is John O'Brien. This is some bonus content
• 38:44
  Speaker 1: on unpacking capitalism through negotiation and again in where I started,
• 38:48
  Speaker 1: want to go back and say this again that the
• 38:51
  Speaker 1: capitalist job in that negotiation is to get as much
• 38:55
  Speaker 1: as they can from you and paying you the lease.
• 38:57
  Speaker 1: Your job is to pay the lease and get as
• 38:59
  Speaker 1: much as you can from the other person fair exchange,
• 39:00
  Speaker 1: no robbery. And when you do this intelligently, thoughtfully, non emotionally,
• 39:05
  Speaker 1: and with good legal counsel and an understanding of risk
• 39:09
  Speaker 1: and reward, you leave the table slightly annoyed. But please
• 39:13
  Speaker 1: And that's just like you know, I don't know marriage, partnerships,
• 39:16
  Speaker 1: friendships and life. There is no perfect. It's just don't
• 39:19
  Speaker 1: let the perfect and the death of the death of
• 39:21
  Speaker 1: the good. Show up and show out and do the
• 39:23
  Speaker 1: very best you can and negotiate greatness up front. This
• 39:28
  Speaker 1: is John O'Brien Money and Wealth bonus content, Season three.
• 39:34
  Speaker 2: See you in the next.
• 39:37
  Speaker 1: Money and Wealth with John O'Brien is a production of
• 39:39
  Speaker 1: the Black Effect Podcast Network. For more podcasts from the
• 39:43
  Speaker 1: Black Effect Podcast Network, visit the iHeartRadio app, Apple podcasts,
• 39:47
  Speaker 1: or wherever you listen to your favorite shows.