Ep608: Craig Handley – Revenue Is Your Shield From Your Mistakes

Andrew Stotz 00:02
Hello, fellow risk takers and welcome to My Worst Investment Ever, stories of loss to keep you winning. In our community, we know that to win in investing, you must take risks but to win big, you've got to reduce it. Ladies and gentlemen, I'm on a mission to help 1 million people reduce risk in their lives and that mission has led me to create the Become a Better Investor Community. In the community, you get access to the tools you need to create, grow and protect your wealth. You can also join our weekly live sessions and most importantly, you get access to the risk reduction lessons I've learned from more than 600 guests just go to MyWorstInvestmentEver.com right now to claim your spot. Fellow risk takers this is your worst podcast host Andrew Stotz from A. Stotz Academy, and I'm here with feature grant guests, Craig Hanley. Craig, are you ready to join the mission?

Craig Handley 00:54
Absolutely, I'm ready to share my worst investments ever.

Andrew Stotz 00:59
It's, it's really the worst we get to the best. All right, I'm going to introduce you to the audience. And ladies and gentlemen, I would like you to sit down and relax for a moment because I want to walk you through this somewhat exceptional life that Craig has lived. And I'm gonna read it out as if I'm telling a story. Greg Hanley is an author of a best-selling book called hired to quit. He is a musician writing music for artists all over the world. He is a bit of a comedian who has done stand-up comedy on Broadway in New York City. Craig also moonlights as CEO of his company, listen trust. Name number one in business products and services on Inc magazine's 505,000 list. That company does $150 million dollars in sales for their clients and answers hundreds of 1000s of customer service lead generation calls. Listen trust employs close to 1000 awesome people and Craig now runs a social media company called Social close. That's gone from zero to 600,000 in revenue in the past 60 days, Craig. Ladies and gentlemen, Craig has caged dive with great white sharks and repelled down Table Mountain in South Africa driven the Baja 500 trail in Mexico and hike through the jungles of Malaysia. In Iceland he snowballed snowmobiles across at live volcano swam in the Blue Lagoon and dove in the fame. Silfra fissure the only dive site in the world where your dive is in the crack between two continental plates. We're glad those didn't squeeze together at that time. He is also the 85th civilian in the world ever to jump out of a plane from over 32,000 feet out of respect. Mosquitoes just do not bite this man. Craig hung out on Necker Island with Richard Branson met Ringo Starr and bumped into Paul McCartney before security escorted him back to his table while trying to get a selfie. And in Calgary, he had his scarf blessed while meeting the Dalai Lama, which he has since unfortunately misplace, but not the good vibes that he gave him. He has partied with a con Snoop Dogg and many other celebrities who asked him for his autograph, because they thought he starred in Vikings or Game of Thrones, or he did not correct. Of course, he did not correct their thinking on that. And for the listeners out there, Craig's got a massive beard that he's supporting. There's a lot of stuff. He served five years in the US Army. He's studied voice and piano in college. He's written hundreds of songs from rap, to pop to balance, all kinds of stuff. I think, Greg, I got to stop there, what an exceptional life. Take a minute and tell us about the unique value that you bring to this wonderful world.

Craig Handley 03:48
You know, as I as I get a little bit older and wiser, you know, I realized there's things I'm good at, but there's things I'm passionate about, and probably in the 1% I think I'm a really gifted songwriter. I think that's my biggest passion. And I think I'm pretty good marketer, you know, I think I'm in the 1% on coming up with creativity and ways to help brands grow and create more revenue. I happen to surround myself with people who are good at, we're experts in a lot of other things. So that way, I can focus on those two things. It doesn't mean I can't do operations or some of these other things, but I try to stick to what I love. It's my life.

Andrew Stotz 04:26
And there's a lesson right there, ladies and gentlemen, what can you do it? Let's let's say that, you know, between the top one and 10% even just being in the top 10% is amazing. And as you get older, you'll move into the top 1% What is the thing that you can do, ladies and gentlemen, that's in that top one to 10% focus in on that. And that's a big lesson right there. You know, one of my favorite songwriters is Bob Dylan. And you know, I also love it because his voice is so terrible that I can sing along and sound like I'm him. But I'm just I'm curious, like, what is it from your perspective that makes you know, the process of writing a song, something, you know, that comes out with a good, good experience at the end for the listener,

Craig Handley 05:11
I'm gonna ruin music for you, everybody listening, I'm gonna win. So I've studied songs going back to hit songs that were nominated for Grammys or song of the year, I've gone back to like the 60s. And I've studied hundreds of records. And I built this, I built a basically a process that I followed right hit songs, so when you listen to songs on the radio, the reason they're on the radio is because they put a lot of psychology into the records. It's not just writing a song, it's probably your emotions, there's a science and the process behind it, there's five things that have to be in a record for it to make any chance of being a record.

05:48
You want to hear the five things I would love to

Craig Handley 05:51
see, you get to gather attention, you're gonna grab attention within eight seconds with either

05:55
a lyric, or a production value, right,

Craig Handley 05:59
you've got to have something in your record that 20,000 People would sing back to you. Max Martin refers to that as every song, you need to put a little stupid in it. And that's why almost every hit song has Whoa, or some sort of back. Now in the writing of the sun, every four to eight bars asked to have contrast, meaning when you're feeling down, you get high. You know, when you're trying to go fast, you go slow. So you've got to have contrast to split the brain psychologically grabbed his attention. You've got to have emotional visuals. What that means is you've got to have snapshots of what your son is about appear in the listeners brain through your wordsmith, right, your pen has to create visuals. And so if you listen to in the Taylor Swift song, you'll never hear that someone's wearing a shirt or pants. They're wearing green portables, and they're wearing a white dress shirt with neon buttons. And those are done on purpose. Now the third piece is you've got to make your song conversational 99.9% of writers write songs. And they think because they've got a cool rhyme scheme, I saw her reflection in the spoon by the light of the moon, they think they've written a hit song. But no, you've got to be able to tell a story in a conversational manner that has rhymes, but also has contrast and emotional visuals. So there aren't as many people on this planet that can write hit songs, because there's a lot of science that goes into them. And you've got to combine the data analytics along with the creativity to come up with a reputable record, something that's going to break through the noise. So those are the components. That's one of the reasons why I still love it. And I'm so fascinated by it, because you're basically telling somebody that you love them, or you hate them, or you're basically telling them all these emotions, and you're putting so much science into it. And it's going to come across as poetry. You know, so you've got to combine both data, and creativity to come up with records. And so I am in love with the process of writing, and coming up with a two and a half minute story written in that type of crash.

Andrew Stotz 08:14
So much in that, you know, the idea of grabbing their attention right off the bat with the lyric or the production. The other one, I just love the one you said, you know, you need to have something in there that 20,000 People are going to sing back to you. And what I talk about when I talk about how to give a great presentation, it's like you've got to bring it down to like three words. You know, something that the audience is going to win when they go home at the end of the day, and their husband or wife says How was all those presentations you listened to today? They're gonna say one stood out. And the other the other thing is the contrast, you know that you talked about every four to eight bars, you've got to provide variety, or else people are gonna get off of it. And then emotional visions. I'm thinking back to my first girlfriend in like third grade Diana Toski. And there was some Chicago's song, you leave me now you take away the very part of me or whatever. And it's just like I connected that with her. never forgotten it. I sing it back every time. The next lyric is Lulu Oh, baby, please

Craig Handley 09:25
go. But you did a little bit of stupid mess song right?

Andrew Stotz 09:29
That's amazing. Well, so much

Craig Handley 09:33
single record as those components and if they're a hit song, you know, you'll hear it that when you sit in your car and listen to music, you'll be like, there's the contrast. There's a little bit stupid. Oh my god, there's you'll hear the emotional visuals. You hear it all. You'll be like, you listen to music differently now that I've explained that to you and I apologize for that. You can't just sit back and enjoy anymore. Yeah. Now

Andrew Stotz 09:54
you're gonna listen to this. And explain you know, music has changed so much but if I think about it By the way, I used to listen to music, you know, I used to like turn on the record player. And I would like, lie down on the ground and listen to these massive speakers around me. And I would just drift off listening to, let's say, Pink Floyd animals. And the song dogs. The guitar solo by David Gilmore was just so slow. And just so that I know, every single, I can sing that guitar solo. And again, I guess that's what you mean by production value versus lyric value. But also, there's just so much different, you know, that's like a 15 minute 20 minutes song. So much has changed too, but maybe not. I don't know what what is your observation of

Craig Handley 10:49
attention spans are low. In songs today, three and a half minutes is kind of the max. Attention students? Look, I've written one and a half minute songs, and it just gets played five times instead of twice. It's, it can seem small attention spans.

Andrew Stotz 11:04
Yeah, well, fantastic, and fascinating discussion. And now it's time to share your worst investment ever. And since no one goes into their worst investment than it will be. Tell us about the circumstances leading up to and then tell us your story.

Craig Handley 11:17
Just one, huh? Just the worst. So one of the businesses I own as a call center. And we were paying a lot for licensing of software to do order entry. And so we thought we can invest and build our own order entry platform. So we hired a team of people to build this software. And they all had five people, I think building it full time, and we were probably paying each of them around 70,000 a year. Well, these programmers told us that we needed to have this certain platform or this certain piece of software to integrate with the stuff they were building. And it was an end the year December, we had a lot of extra cash. And they were like, well, it's normally this much. But if you pay for it today, for 300 and something $1,000.03 and $30,000. A year that we will, you know, will would actually half billion that they're going to discounted for 333 paid it off. So literally on December 27. We put putting, you know, trying to reduce our taxable income things we're thinking it could be good value. And our and our programming team insisted that this was the thing we needed to finish our own platform. And we were gonna save a million a year by not having to pay for outside services and outside platform. So we bit the bullet, and we paid him 30,000 To this day, now that was you know, 14 years ago, or 13 years ago, whatever. To this day, nobody has ever, ever logged in to that $330,000 platform, nobody integrated it. Nobody did anything with that software, we didn't have one person use it, not one person tried to get another person to take it all this is our software team never developed the product that we can actually use. So not only did we invest 300,000 in that product, but we also invested in five salaries equal to another three. So we basically put almost a million dollars into building our own software that never ended up producing anything.

Andrew Stotz 13:18
And was there a particular day that you can remember, like, we just lost all of this, and it's like, I can't listen to these programmers anymore, and I just can't take it anymore.

Craig Handley 13:29
It was probably, you know, it was probably like October of next year, you know, when they had had 10 months to finish everything off. And we weren't just we kept looking at what they were building. And there was nothing that we thought was usable. And we were just like, You know what, we're gonna cut bait on this. It's, I think you're paying for two years. So we're talking, you're talking about the million dollars and right. And we had nothing, we had nothing. And so I was like enough. Maybe we're not in the software business. Right? Maybe that's not what we're supposed to be doing.

Andrew Stotz 14:03
And how would you describe the lessons that you learned from this?

Craig Handley 14:07
I think that, you know, maybe we should hire people who had done it before. Maybe we hired the wrong people to build it out. I think that maybe we should have paid licensing fees for the software as opposed to buying it on an annual basis the way we did because then when people logged in, we would have paid for it. You know, as opposed to just dump in three or $30,000 in one go. By the lessons, you know, you have to learn what business you're into, you know, you got to look as an artist, I've learned that I am a songwriter. No, I can say I'm in the top 10% of singers. I'm a good singer. People like to listen to me sing when I'm in a karaoke bar, I win. But I'm not Justin Bieber. I'm not Beyonce, you know, so I had to learn that I am a better writer than I am a singer. And so I had to focus on the niche of being the writer, as opposed to doing all these other things that I could be doing in music holds true and businesses, if you're a company doing X, don't try to be a company doing everything else. Unless you think you're gonna be successful at it, and you know how you're gonna be successful. Just just take some time and think through those things. So I think that was the big lesson, right? Since then we've never, we've never tried to be a software company since then.

Andrew Stotz 15:19
Maybe I'll share a couple of things I take away from that story. The first thing is, my lesson in the last I don't know, let's say 10 years is software ain't what it appears to be. And I've come to the conclusion that, you know, we are not in a tech revolution. It is not happening. The only way that software gets done, right, is when you throw hundreds of developers like Facebook and Google and others can do, and then see who comes out with something and then break them out into a little group, and then start and then the second thing is, no software should be developed without reading the book, the list this great book, The Lean Startup that talks about iterating the software with the customer and developing a minimum viable product. And because software ain't what it appears to be, you must pay as you go, iterate with a minimum amount of features, and then develop over time and even then, you're going to probably change five different programmers internally, externally, all that stuff. So my lesson from listening to you, but also from my own experiences, when I hear we're going to develop an app, or software, I go back in time to that show. Danger, danger, danger, danger. What was that show? UFO? Yeah, it will Robinson. Yeah, exactly. Anything you would add to that?

Craig Handley 17:07
They read they read it that show on Netflix. It's good.

Andrew Stotz 17:10
Yeah. Anything you would add to that?

Craig Handley 17:13
No, I think there's a lesson. You know, it's just, you know, I mean, look, we've watched a lot of money over the years and other areas, too, you know? Yeah, I mean, another way that we look at another, I have two guys working for me for 14 years in my call center. And they needed we had a client that we had signed a contract with at a certain rate, they went behind our backs and undercut our rates and took the business from US million to in business. And then during the pandemic, when agents weren't punching in, they literally used my employees to staff it. And so I was paying with salaries and payroll, and government taxes and benefits for all these employees that were servicing my account, but they were servicing under their brand. And I didn't know because of the pandemic. So is that a bad investment, it's not really a bad investment. But it's something you can learn from, as far as looking at points of failure during the pandemic, I have kind of not paid as much attention to the finances and things like that there were some components that I wasn't paying attention to like my payroll percentage, yep, which is supposed to be 1%, and we're sitting at 80% Every month, is that we're using employees. And so, you know, there's a lot of things you can learn from that. Regardless of whether I'm retired from my call center or not, is the owner, I still have a responsibility and fiduciary responsibility looked at the business at least once a month, you know, I should have sold it, you know, I'm selling it now. But I had it took me eight months to fix it, you know, as far as turning it back around. So that was profitable again. Yeah. And there's a lot of lessons that you learned in school, hard knocks.

Andrew Stotz 18:56
As a finance guy, I want to I want to highlight a meta lesson here for the listeners and the viewers. And that is I many years ago, when I was a young guy, I remember coming across a study where they were trying to analyze what ratios were the most best predictors of future success for a company. And I thought, well, profitability, net profit margin, you know, whatever, all these different measures return on equity. And the measure that was the best predictor of success was revenue growth. And what that told me is, revenue is your shield to your mistakes. It prevents your mistakes from destroying you, if you don't get big revenue growth. You're going to be suffering significantly from your mistakes. You can recover from mistakes if you get revenue growth.

Craig Handley 19:52
And that was the advantage that we had in the businesses because we had one of our best revenue years, in 16 years. Of course, we did. To focus on the outgoing cash, but it was easy because we maintain the revenue into this year. And then I brought my payroll back in 54%, which literally saved $2 million. So I was able to get my payroll under control with the revenue. And once I was able to save the 2 million extra dollars that were going towards other payroll, we ended up you know, this year, we're already at 1.2 million in profit, you know, but last year, I just wasn't watching that particular metric. And, you know, it hurt me. So, there's so many stories of being in business for 20 years, over the years and the things I wish I knew.

Andrew Stotz 20:39
Well, you did say, here's,

Craig Handley 20:41
here's the downfall. Now, my brain works so well that it doesn't want to stop. You know, like, at night, I'm lying in bed, and I take more notes from 12am to 3am. Yeah, then probably most people take all year, I'm like, Lulu, like my brain has been stopped, stop. Yes, you're gonna curse.

Andrew Stotz 20:57
I know that feeling I was up at 3am thinking about all the things I wanted to get done today that are exciting. One, one last thing, I want to just make a comment of something that you said, and that is to review your financials, you know, once a month. And I always say basically, to anybody in business, whether it's their own business, or startup, that the most important thing is to get on time and accurate financial statements from your accountants, no matter what they say, Oh, you don't need to do to close the books every month, you know, you do it every quarter, do it every year, whatever. That's all crap. Get the financial statements on time, an accurate every single month, that's already a feat that demonstrated you have some structure in your business, and then sit down either alone or with your team and review that every single month. And if you do that you will prevent even if you know nothing about it, when you look at it every single month, you're going to start to know. And when you do that, and they're on time and accurate, you are going to be able to make better decisions about your business. So that's one thing that you hinted to, and I just wanted to reinforce.

22:02
Yeah, very good point. Yep.

Andrew Stotz 22:05
So based upon what you learn from this story, and what you continue to learn, let's go back in time to that moment, when they were like, Oh, we're gonna give you a big discount it's end of the year, what action would you recommend our listeners take to avoid suffering the same fate?

Craig Handley 22:21
Oh, man, I go back to that decision and think to myself, look, I really, I tried to trust my team. And maybe I should have done things differently as far as the way they were compensated. Or maybe I would have compensated them less on salary, and more on a bonus and getting things finished. I mean, the team that was building the software should have really absorbed responsibility of that $300,000 in some way. I mean, I could have invested up front, but it was their responsibility to deliver a finished product. So you know, maybe I would have done things differently, and how I incentivize my team to help us that software, maybe I would have had, I just didn't have the expertise to make that decision. I mean, I, they said they needed it. I trusted them. And I didn't know. So maybe I should have gotten somebody as an advisor. I think a lot of people don't like to ask for help. And I think that one of the things that you should do in your business is ask for help when you're not sure, I shouldn't enter the programmer, I was friends with in my other masterminds do an interview as to why they needed it, and maybe he would have stopped me from buying it.

Andrew Stotz 23:31
That's golden, golden advice, golden advice for everybody out there, you know, you're in the middle of some sort of decision, you know, big decisions in your life. Find a trusted, independent person, a third party that you trust. And that also has some knowledge in the area. I have a friend of ours for one of my businesses, we had a challenge in our factory, and he knew all about enterprise resource planning and all this software. And we asked him, Hey, could you sit down with us for just, you know, a coffee, and let's just get your advice on it. And we went through all these things, and you know, all these problems we were facing, and he just looked at us, like, when what's the problem? And we said, Okay, this is the problem, accounting. Then he said, fix the problem. Stop thinking about solving every problem, stop thinking about enterprise resource planning software and all this stuff. You've identified your problem, fix it, and we're like, thanks. Okay, that got us really straight really fast. So reach out for help. For everybody listening and viewing this, reach out for help. Let me ask you, what's a resource that you'd recommend of your own or any others for our listeners?

Craig Handley 24:39
As far as a book or things like that, I mean, look, I wrote a book called hired to quit. Yeah, I think it's a great book for culture. You know, if you want to build a perfect culture within your organization, I literally started training my employees to quit and go after their own dreams. That was helpful. I lowered my turnover but my employees all want to work for listen trust because I care about what they want. And so that's First, as far as the book goes, I know, I also always like to recommend Matthew Kelly's book, The Dream manager. And I think that's a really powerful book for people as well.

Andrew Stotz 25:09
Right. And the subtitle for hired to quit, is our total title is hired to quit inspired to stay. How focusing on employees dreams, built an exceptional culture and unbreakable company. And I'll have the link to that in the show notes. Last question, what's your number one goal for the next 12 months?

Craig Handley 25:30
You know, it's kind of funny, I'm building my marketing company that I built by accident. And that's growing like crazy. So my goal on that business is to grow it to over two and a half million over the next 12 months. And, and then on the musical side, you know, because I do write a lot of hit songs, I want to win my Grammy in the next 12 months, maybe the next 14, if I don't get it by February, February, is the only one Grammys once a quarter, once every year, but the next one's in February. So maybe I'll get it done by February. But I know I'll get it done on February.

Andrew Stotz 26:06
But we look forward to celebrating that with you. And that's exciting. So listeners, there you have it another story of loss to keep you winning. If you haven't yet joined the Become a Better Investor Community just go to MyWorstInvestmentEver.com right now to claim your spot. As we conclude, Craig, I want to thank you again for joining our mission. And on behalf of AES Dance Academy, I hereby award you alumni status for turning your worst investment ever into your best teaching moment. Do you have any parting words for the audience?

Craig Handley 26:38
I guess the only parting words ahead of the party advice would be to understand the matrix of life is to look at everybody that's working around you and to help them with their goals is to really be unselfish and give before you take. And to be a person of faith who believes that when you help others, the universe will come back around and help you. And so in my life, I've done that all my life. So in my phone, I have about 7000 phone numbers, I would say have close to 1000 millionaires and maybe 12 billionaires, because I believed in them when they were 21 of the kids was a billionaire. We sat down at our first dinner together. And we both ordered the water and the bread. You know, you just don't know who's going to make it. So treat everybody around here. Believing other people believe in your dream, believe in other people. And if you're there for them when they're not a big deal. They'll be there for you and they are so that's my parting advice.

Andrew Stotz 27:37
Fantastic and that's a wrap on another great story to help us create, grow and protect our well fellow risk takers. Let's celebrate that today. We added one more person to our mission to help 1 million people reduce risk in their lives. This is your worst podcast host Andrew Stotz saying, I'll see you on the upside.