Dan Lok Talks With Chris Guerriero About How To Be An Entrepreneur…

Dan Lok is an entrepreneur with a portfolio of businesses under the Dan Lok brand. Today Dan Lok talks with Chris Guerriero about how to be an entrepreneur.

Dan Lok
Hey Chris! so excited to have you on the Dan Lok show, I always want to learn more about the entrepreneur, before we talk about all the businesses that you started. Share with us a little bit of your entrepreneurial story. How did you get into business in the first place?

Chris Guerriero
Yeah, you know, I think I have to attribute the great majority of my entrepreneurialism to my father, and which is weird. I guess, as you hear this story, you’re not going to think there’s a correlation because he was never an entrepreneur. But you’re my father was a VP of a building company. He was a civil engineer. And he was the son of immigrants, who both my grandparents were entrepreneurs. And then they had him and he was put through college and became a VP of a building company, like I was saying before. And something really unfortunate happened. I mean, he was always a mentor of mine. And I loved watching him and he was brilliant, and he taught me so much about being a good man. But a large became bought the company that he was working for, immediately laid off all the top level people on the console, my father was unemployed. And it was heartbreaking because I didn’t grow up understanding what that meant. And it was scary. But what happened very shortly is that he and a buddy of his decided they were going to go into business together, and they bought a marina. And part of that Marina, there was a bunch of properties. So because they were both in the building industry, they put up townhomes. And I thought, Wow, this is amazing. So when I went home for a quick for school, I think was the Thanksgiving break or whatever. They he offered me a job. And I started working at the Marina and I started helping with the boats and everything over there. And it was, it was impactful for me to watch how a business worked. But one of the things that I learned the most was that my father and his partner knew nothing about business. They were two employees, trying to be entrepreneurs. And I watched the decisions they’re making, and I watched how things were, were struggling and then growing and then struggling and growing. And it was, it was very counterproductive in my brain, how they were handling things. And I would jump in and I would always get shot down. I was a kid, I was in my 20s. And then very shortly after that, less than two years after that, as they were building these townhomes, the building industry dropped out. And so they lost everything and the company went bankrupt.

Dan Lok
So basically, your father was kind of like the reverse role model of what not to do in business. Were you thinking at a time, it’s like I want to make sure if I do become a business person, I don’t do that. I need to educate myself and inform myself of what it actually takes to make that entrepreneurial.

Chris Guerriero
I don’t know that I was that far ahead. Okay. Like to take credit for that I don’t know, far ahead of the time. But I do remember when I went back to college, and again, I it was after summer break, I went back to college, and I didn’t know if I was going to be able to stay there. Because now you know, the family business was bankrupt. But I went there and I and I remember this intimately like it was yesterday, I was sitting inside of a class. And as I was in that class, I was completely bored. And I decided to I was going to sketch out a business card because I decided I’m going to start a business so that I could make some money. I didn’t know what the heck I could do. But I want to be able to contribute to my family. Yeah, so I, as soon as I went back home, for my next break, I started it. And that company grew into almost 150 personal trainers up and down New York, New Jersey and Pennsylvania. And my goal when I sat there, and I was writing this sketch out for what I wanted to teach people was I said, hey, my goal for everything is going to be to help the greatest number of people possible no matter what. And that has followed me to every single company that I’ve built ever since then. But I built that as a personal trainer, I was only able to help a few people. And then as a personal training company, as it grew and grew and grew, I was able to help hundreds of people. And I learned a very important lesson, which I’m sure you know, in pretty much every This is like one on one. And that’s when you are building a company with independent contractors. It’s very easy for you to lose your IP, your intellectual property, your clients and everything else. They start pulling them away from you. So I happen to be training one of my clients one night, and he said, Hey, listen, I have this building. And I’m partners in this building. And it has four big internal ice skating rinks and an arcade and there’s an area for a gym. Did you ever think about opening up your own gym? And I said, Sure, I would kill for that. So we ended up becoming partners in this my very first health club. And, and it worked out very well for me over the next almost 15 years. I built that into a chain of health clubs. The first 10 years, I was pretty much dead broke and consistently living on credit cards during that time because I didn’t know anything about growing a business. I didn’t know people I didn’t know processes. I didn’t know systems. I didn’t know culture. I didn’t know how to build teams. I didn’t know how to fund things. I didn’t know anything. This stuff that we really need to know. So I would grow revenue. And then I, my expenses would grow. And then I revenue grow again, I’d hire smart people to help me like consultants and experts in the field, but they would cost me money and my expenses would grow. And so I literally lived on earth. And I, yeah, one of my tax statements on end of the year, and, and then my father helped me do and I had $4,000 come in after you know, that whole year, and which was shocking to me to know that I mean, I can’t even live on that. But you can, I guess if you’re living with your folks, and you’re not spending money on things, and gas. What was great is that I was able to go from helping a few people as a personal trainer to helping hundreds of people in the training company, helping 10s of thousands of people in the health club industry. And I became very good towards the end of growing companies, and that that was just a big learning experience for me. And in 2004, when I sold that chain, even though I literally scraped your funds together during the majority of that time, after all was said and done, I learned how to focus on the few things that actually grow companies. And those last few years were our best few years combined all the years combined our best few years towards the end. And that company sold for more money than I had ever seen a chain of health upsell for at the time. And I took the knowledge that I had there. And I started writing books right before I sold that company.

Dan Lok
Umm, there’s so there’s so many like golden nuggets with what you share one a deep dive into different segments. It’s very interesting, because my story is I don’t think is that different from yours. My father went bankrupt when I was 17 years old. Oh, and living with my mom in a one bedroom apartment. That’s how I turned into entrepreneur, entrepreneur, because I wanted to make a living to support my family, right. And my first business was mowing lawns for people in my neighborhood. And I print out all these flyers, and I was running around the neighborhood and distributing flyers, so I could totally relate. But your story is interesting, because I think for my, my fans, my audience listening to this, there are a few key lessons. So Chris, you started off basically as a self employed, right? as a service provider, which a lot of people start off that way I start off that way as well. Right, which we’re trading our time for dollars, essentially. And then you figure you know what, I could now be a business owner. And what I love to talk about is the first 10 years dead broke. Because I think a lot of people they have this fantasy about entrepreneurs, maybe because of social media, they see someone or right like so and so entrepreneur and driving a fancy car, they live in a nice house, they take those vacations. Now you and I both know, like we were just before the interview, we’re talking about being in EO (Entrepreneurs Organization) being in YPO (Young Presidents Organization). See a lot entrepreneurs, what’s the reality? Like? What’s the truth? Not what they see on social media. But what’s the truth?

Chris Guerriero
The truth is a lot of hard work, a lot of persistence, right? persistence, and consistency are probably the two biggest words that somebody has to staple into their brain studying, but studying what the few actions are that actually drive your growth. And then learning the things that you are super good at you core competencies. And learning how to stay inside that box. My biggest challenge I believe in a lot of my businesses in the beginning, was not coming out of that box and telling everybody else exactly how to do their job. But even within independent contractors and vendors and everybody else, me saying no, no, no, this is how you buy paid media. And this is how you do when I’m talking to experts. So staying inside that box. I think the truth hurts. But sometimes what you don’t do is far more important than what you do sometimes.

Dan Lok
I love that. I love that. So what you’re saying is focusing on their critical feels right? They feel like success. I call that success factors, right? They’re the two or three things in your business that actually moves on the Ito’s. So talk to us a little bit about doing that journey. So let’s say before going to the good years, I want to talk about what doesn’t work, or the first 10 years, what didn’t work. What are some of the lessons you’ve learned? I mean, some of the mistakes that you’ve made, that you could share with my audience, like, don’t do these things, no matter what they’ll do these things.

Chris Guerriero
Don’t do it yourself. Yeah, I know many, many people who, who build businesses and then go tell everybody Well, I’m the only person in the business like it like, It’s me, but they’re surrounded by vendors and they’re surrounded by smart people. Nobody, nobody who scales any respectable sized company has ever done it themselves. They have learned to become a leader of leaders, they’ve learned to find people who are smart, associate with them and then make them feel like rock stars give them what they need in order to do what they’re good at. Get out of their way. You know, manage them. Definitely. Because you as the owner, you’re the visionary.
Dan Lok
Yes

Chris Guerriero
And you need to know where your ship is being steered and have a very clear path, be able to concisely detail that path for everybody else that’s working for you so that everybody stays on the same path. But be flexible and willing to listen to them so that they could show you the fastest way to get from A to B.

Dan Lok
I also I find that doing even my own journey in the beginning, the motive, maybe you want to at a time, I just want to make some money so that I could support my family, right. And as the organization grows, I found that my own personal motive would change. Because now you’re they say you’re paying the bills, right? You’re taking care of your family. But then then you what you focus on changes, like you say focus now on impact, you focus on your team you focus on, you know, growing something bigger, you focus on your mission. It’s a very different thing. I think I said like, what’s been your experience seeing entrepreneurs go through this journey, even yourself? Do you see in the beginning, what you focus on, and then later on what you focus on, on even now, if possible today, what you focus on, like, What drives you is different?

Chris Guerriero
Yeah, I, I believe that is a balancing act, at least in my life has always been a balancing act. In the beginning, I think I made a big mistake, because I was more focused on impact, then I should have been, because I needed to focus on revenue, in order to have the greatest impact. Yes, now that we have so much revenue from each one of the entities that we built, we could focus far more on impact, because the revenue part is at least partially taken care of.

Dan Lok
Ok

Chris Guerriero
I think there’s always got to be that balance. So when we go into, so if I go into a new another company, then I need to throttle back my impact and marry it to great systems that are going to generate revenue to bring in great people are going to help generate revenue, that are all focused on in the same way honest, ethical, moral, legal focus in the same way so that we can have a great impact with that revenue.

Dan Lok
Love it. So let’s say this company, they are doing us a million dollars a year. What do you think? What are some of the things that you see then that could be done to tick them, they say to 10 2030 and beyond?

Chris Guerriero
Hey, I think I could speak for a year on that. But let me narrow it down to one thing, when companies stop focusing just on revenue, and they begin focusing on market share, not growing just revenue, but growing market share. We could go into a company and scale at significantly faster by taking some market share, then by constantly focused on promotion after promotion after promotion. I told you, you know, earlier I was in the healthcare industry, one of my clubs, I remember, I had to open up another club, because my current club was just the membership was growing so fast. We were getting visits from the fire marshal saying you can’t fit this many people in here.

Dan Lok
So hit capacity, you should have got.

Chris Guerriero
We had to grow. So I found another building, but the other building was three miles away. And that one building was surrounded by five other health clubs within a mile. And all of them had been there for more than a decade. So I we had a meeting with our team while a big believer in meetings, and we got all hands on board all hands on deck. And we brainstormed on this challenge. The challenge was, all these people have been all these clubs have been here for much longer than we have. There’s only a certain number of people in a 10 mile radius of us, which is our target market. They all already know where to go for health clubs, probably they’ve already joined the health club, how do we make this work. And what we ended up coming up with was two promotions. The first promotion was, hey, if you are a member of a health club, and you’re not getting the results you like or they’re not, they don’t, they’re not treating you nicely. They’re not greeting you by name, they don’t have free towel service, they don’t have free coffee, whatever it is, it’s not a clean club, then bring your contract in and we will buy it from you, we will add it to anything that you buy from us any membership you buy from us. Wow. The second promotion was, hey, if you have ever been a member of a health club before, and you’re not a member anymore, because you weren’t getting the results that you wanted, they weren’t treating you nice at every time. All the things that we were really good at, then bring your old contract and we’ll give you 50% off of anything you purchase from us. We want to win your loyalty. And within two years, three of those other health clubs went out of business, because and by the way, this was not a competition. I was not trying to put anybody out of business. But we were going in there and we were saying I know what we’re good at. We are great at relationships, we are great at helping people. I would rather people come here because I know that my team, my systems, my everything is designed specifically to get people results. Like I want to help people now I’m not here just to make money, I want to really have a big impact on this community. So we do that by gaining market share.

Dan Lok
That’s an aha moment. There, I think for my audience for myself as well market share versus just revenue because everybody’s talking about revenue and never heard of that before. What if Chris someone is they say competing in a not local market, but in a more like a global market on national kind of competition. How would you measure that? How would you define that?

Chris Guerriero
Oh, it’s the exact same way I would find out who am I top competitors are I find out how much of the market share that they own, I find out exactly why they own that market share. What are they so good at? Are they great at driving cold traffic? Are they great at affiliate traffic? Are they great at whatever their stuff is. And then my team, I get my entire team in a room, like that’s important to me, I need bodies in a room. And then we would stay there as long as we needed to whiteboarding everything. I’m a big believer that the bigger the whiteboard, the bigger the thinking, the bigger the thinking, the bigger the results. So we haven’t more I love it. I love it. And we do a whiteboard thinking. So we get everybody in the room. And we would say, here’s our target, when we have a unified target as a team, I know that I’ve put enough smart people in that room, we will come up with a way to define the amount of market share, they have figured out how much of that market share we need to own in order to grow. And then we would just infiltrate that.

Dan Lok
So let’s see if I understand you correctly. So the reason we focus on market share, not just revenue, I’m just trying to understand is that when you focus on revenue, we may do things that implement strategies that are more short term, a quick fix, right? We do a promotion, or we do something that we get a bunch of customers, the revenue goes up. But when you think about market share, it’s less tactical, but more strategic than Okay, what are we trying to do long term wise. So from a revenue point of view, you might feel like, while we’re doing these promotions, we buy back the contract, that’s not very smart, we’re losing money man, or, or the second way where you’ve been to a health club, you were disappointed. Come join us, we’re going to get 50%. That’s also from a profit perspective. Maybe like that’s doesn’t make sense. But from a market share perspective, it makes sense, because by the time your competition’s three competitions are gone, then you’re kind of being the you’re the lead doc in the industry, right?

Chris Guerriero
Well, let’s take that to the next level and say, we knew that there was only a certain number of people on that 10 mile radius. And out of those people, there was only a certain number of them who wanted to lose weight or wanted to get in shape. And out of all of them, we knew that there was a small percentage of those people who wanted to get in shape or lose weight in a health club. And then we knew exactly, so we sent out postcards railing, we knew exactly where to find them. They’re already in health clubs. And I knew the five locations that they were going to show up in now I got myself in trouble, I’m going to be completely honest with you, because I was very, you know, strategic at the time. And I said, Hey, I know where they are. And I also know that Monday night is the busiest night between 8pm and 10pm, the busiest times. So I hired kids to go put fliers on their windshields inside of the parking lot. Totally bad, I get it. Not a big deal. I got a slap on my hand, and we paid the fine and got rid of the death threats that we had, because some of them. And then we utilize the money that we made from that. And we went out to local radio. And we did the exact same thing with local radio. And then we went to local TV, small TV as, and we brought in more people from that exact same things, because we knew where people were our target audience, it’s like a surgeon cutting away that market share and bringing it over here. It was far less costly for us. When all said and done. No testing had to be done. No ad split testing, no nothing. We went out there. And we said, here’s our offer, and just bring us your contract. And we put the offer right in front of them. And we were done. And by the way, as soon as they came in, I didn’t care if they didn’t pay us anything for six months. Because these people bought drinks and they bought supplements, and they weren’t raining and they,

Dan Lok
Make money in other ways the back end the upsells and other ways,

Chris Guerriero
Which is where all the money is in any business. He knows what business the back end is where the majority of the money is.

Dan Lok
Yes. So I love that. Is there one more Golden Nugget I could share with us from that one to 10 million. So market share, not just revenue. I love that.

Chris Guerriero
Yeah, so one of the most common mistakes that I made, and also that I see a lot of other companies make is that they get comfortable. They look at their competitors, they look at their industry, and they say okay, this is what industry standard is and they get comfortable right over there. Now this is the amount of members that we should have. This is the amount of our lifetime value. This is the retention that we should have whatever it is, and they are very comfortable there. Have a very good friend who says uncomfortable methods bring comfortable results and comfortable methods bring uncomfortable results.

Dan Lok
I love that.

Chris Guerriero
Our goal and every company is to get good at doing the uncomfortable tasks that grow the company and then rewarding the people who do the uncomfortable tasks to help us to grow. And what we found is that people will go to the they will climb the highest mountain they’ll swim the deepest sea to be recognized. So we recognize and celebrate people who do the hard stuff. And when we find somebody is not helping us whether it’s a vendor and even contractor, an employee, whatever. If they’re not meeting or exceeding their goals, we celebrate them a little Less, we don’t say anything bad, celebrate them just a little bit less. And that just propels them so much faster forward.

Dan Lok
Chris. So given maybe a little bit context, give us give us some examples of the uncomfortable task within a business. Are you talking about like, like sales or you like, like talking about, like marketing, like, give me some examples of that.

Chris Guerriero
Being held accountable for pretty much anything but love human sales, the number one, I definitely believe that to be like the things that you teach about sales, I cut through all the BS, and help people who actually feel like they could be self salesperson to be amazing salespeople. Thank you. Um, but it’s not ingrained for a lot of people.

Dan Lok
That’s so true.

Chris Guerriero
A lot of people who come in and they say, Yes, I want to be a salesperson, but they don’t have the persistence or the consistency to actually push through and to, and to do the learning that’s necessary in order to know what to say and, and how to communicate well, women, and those are hard tasks for them when somebody is not prepared. Any task is a super hard task.

Dan Lok
I love that. So then being held accountable, being just even doing what you say you’re going to do, right, and then being held accountable by the team. And all of that is very, very true, because I noticed when you’re saying it to be players, so like that. Right to be players, it’s counter. Yeah, it makes them feel very uncomfortable. Right, right, right there. That’s the issue. I love that. What about in terms of we talked about talons, and team being what’s been your experience, the best way to attract like good people. That’s a lot of people, a lot of people talk about Okay, unifying good people, you have good people in a company, but what works in terms of tracking them, and also retaining,

Chris Guerriero
Its culture hundred percent, no hesitation for saying its culture. However, I’ll take a step back. And I’ll say I don’t believe you can have a good culture without having great values. So any company that we have, we put together a core set of values, and those values must come from me, they’ve got to drip out of my heart, like, they got to be things that I want to eat, breathe, sleep and dream about. And then from there, I can be passionate about it, because my passion will be infectious. And people will buy into that. And then we will retain people who are completely bought into these values, and we will lose people who are not. And that’s totally okay. Because the values that we have in every company that we build, are very strategically designed, so that anybody who sees them, whether they are a prospect, a customer and employee, a vendor, a partner, an investor, anybody, anybody who sees any one of our values will see value in it for them. So I think that’s super important.

Dan Lok
And for each company, are the values different, or they have some similarity?

Chris Guerriero
So in my entities, there’s a marriage between some of them, but they’re not identical for every company. Because I have companies in multiple industries and something like a, like in the legal industry, it’s not going to be the same as the health industry or Yes, branding industry.

Dan Lok
Yes. Can you share with us maybe a couple examples of the values that are important and dear to your heart?

Chris Guerriero
I happen to have somebody in here who has handed this to me, we give before we take, no matter what number one value. And this was something that follows us through most, every one of our companies, we get before we take anybody who comes to a website, let’s just say, we’re not going to ask them for a sale, immediately, we’re going to give them some and if they love what they get, then we will win them over right? customers, we always over give like they buy something from us, but they always get an unexpected gift employee, we’re going to give a lot of education to before we ask them to be held accountable to certain numbers or certain metrics, right, there’s always a give before we take, we value integrity over sales, we will never be never, in any of my companies. This is something that I’m passionate about, look to make a sale, if it is not based on integrity, we value integrity, I want our brand to grow. I want people to know that they could come to us for whatever that company is responsible for in our consulting firm. I want people to know if they get in that their company is going to grow in our legal firm, I want them to know that when they come into that firm, they’re going to be taken care of right. So it’s important. We create long term relationships and learn long term relationships with our customers and vendors and ourselves. Like I don’t want people to plant roots with us. And I will go to the ends of the earth to make sure that a good person on our team feels like they are part of that team and that they are valued. And I believe that that’s infectious. Our team members also want other team members to feel that as well. True. It’s fun. We consistently grow our reach. That’s a big difference.

Dan Lok
Yeah, that’s market share, too. Right?

Chris Guerriero
Exactly. Yeah. It’s between that and saying, we grow our revenue every single year. We grow our sales every single year. Your customers don’t want to hear that. But our goal is to reach out and touch and help the greatest number of people possible. So we grew up when we grow our reach, we’re growing and helping more people right so

Dan Lok
And revenue is a byproduct of that anyway,

Chris Guerriero
Every single time Absolutely. We seek track records of success over one time wins. I want, I want people on my team who have a track record of showing up on time doing the daily tasks necessary to meet or exceed their goals. I want when I’m looking for a vendor, I don’t want to see one thing that you did show me a track record of things that you did that when possible.

Dan Lok
I love that that gives me goosebumps, I love that.

Chris Guerriero
And then two more at this company, we work as a team, we support each other no matter what somebody’s sick, I want them to go home and take care of themselves. If their dog is sick, or their husband is sick, or their wife is sick, I want you to go home and take care of them. We are a team, you are a better member of my team, when everything in your life is making you happy. True, and we judge ourselves by our daily actions. So I think that’s very important.

Dan Lok
Is it’s very interesting, because as I’m listening to that the seven core values, right?

Chris Guerriero
Yes, great counting, 7 core business values.

Dan Lok
Yeah, so seven core values, but I could see how just a health club experience you did, just from the experience that you took some of the lessons and apply it to this for all these entities, even though they’re two different businesses. But I could see how that impacted you to values.

Chris Guerriero
I believe that every business that I’ve ever been in is a people business. It’s not a health club, it’s people that are helping me to meet a goal, my team members. So in the health club industry, they were helping me to help people to be healthier. But in every single month, one of my companies are helping us increase our reach our revenue and our relationships. Those are the three things that we try to expand and every company that we have.

Dan Lok
Umm I love it. And I’m also curious, Chris, your perspective, because I think there are different types of entrepreneurs, right. There are certain entrepreneurs where they, they are more focused on building one thing, that they are the CEO of running this big company, and they grow this massive company, and then they’re come they’re entrepreneurs, they’re more like us, that we have different businesses, that we can just do one thing, well, more than a serial entrepreneur. What do you think is the difference? And not that one is better than the other? Because both are fine. But what what’s your take on it.

Chris Guerriero
I think that there’s a belief that you put all your eggs in one basket and you watch that basket and you grow the heck out of that thing.

Dan Lok
And I want to industry one business for 30 years, right? Yeah. And

Chris Guerriero
I don’t believe that I probably not you either. I’m just going to guess. Although we have a portfolio of entities, I don’t believe that we are not putting our eggs in one basket. I think that like I was saying before, we know what our core focuses, what are what we are really good at, we stay inside of that box. And then every industry we go into, we surround ourselves with people who we could add our value to and explode a company.

Dan Lok
Um, yes

Chris Guerriero
I’d rather be able to do that in multiple industries, because that’s what juices and Jazz’s me, I am good at growing companies. I know what I’m not good at what I’m good at growing companies.

Dan Lok
Is very true. So when I did it, even when I talked to YPO, ores and other CEOs, and sometimes they asked me the question. So Dan, you have like all these entities in different firms and companies, but I say I tell them, I don’t build companies, I do ecosystem. When I show them every single thing that I every single entity that I have they actually all the related within the ecosystem, then they’re like, oh, like that, because they could see like, oh, let’s say I have closest.com, which is on the sales part, but also have copywriters.com That’s the writing part. It feels like a two different thing. But actually, it’s they’re synergistic. They’re synergistic, right? Because more coffee, better coffee, more leads, more opportunities. It’s all people who have like, they need both, which is more like a vertical integration. Right? What and then plus, it ties into my education company, that’s a training comes into play. So it’s not like that separate is actually very much closely related.

Chris Guerriero
Yeah, it’s very easy. Well, so I’m sorry, it’s very easy for me to see we’re building the same kinds of things. From outsider standpoint, I got called a jack of all trades one time, and I thought about it. And I thought, gosh, that sucks. of all trades, because I’m in multiple industries. Yeah. But hey, they just didn’t understand I think,

Dan Lok
I don’t think they quite and most entrepreneurs that I think I think to me, that’s actually a real entrepreneurs, versus just a president of a company that’s more like a manager or executive. But a true entrepreneur. I think we like to stop things and create things and solve big problems and put a team together and then make things happen. And that’s like, kind of like, it’s I think it’s in our DNA. Right for both of us. I do want to ask you a different question. Yeah. And that’s more a not a business question, but more a personal life question. You know, how important do you think in terms of like for entrepreneurs, the family does support you the sacrifice you have to make, not just the tactics strategy is all that it’s good. But personally, what’s one big lesson that you have learned as an entrepreneur? what it takes? Who do you need to be in order to be a successful entrepreneur?

Chris Guerriero
We’re talking about as it relates to family, correct?

Dan Lok
Yes.

Chris Guerriero
I think you need to be a leader, not just in your organization, but in life in general, knowing that the biggest components of being a leader is to lead by example, to be the man or the woman or the person that other people want to follow. Other people want to emulate. And when we talk about family, I was born to be a dad, like, I love every aspect of it from the day my children were born to, to now and every moment in between, and I try to be a quality person that I’m always there for my kids yet. Also leading by example, and showing them daddy works.

Dan Lok
Yes! work ethics.

Chris Guerriero
Yeah I’m at the office. So during this time, and this time, if you need me, you text me, I will stop. But don’t text me just text me during these times. Right? Because that is working right. I’m in meetings or whatever the case is. But I will break up break a board meeting if I need to. And we have a no phone policy in our courtrooms. But meaning that every everybody’s got has to be muted. However, everybody also understands that if my kids call for whatever reason, I’m going to choose myself, and I’m going to be there for him. So I don’t know if that answered your question.

Dan Lok
Love it. Love it, I think I think it does. And speaking of the team, do you find that there are certain sizes, the approach that you have to take differ in terms of maybe when you have 30 people? 50 people 100 people, like when you’re leading a bigger team, like us, like you know, case? YPO we talked about, you know, very well known the scale up method, right, Rockefeller habits. You, of course, you have the US, right, actually, Gina Whitman, which is on my show a couple weeks ago, right? I talked to Gino. So what what’s been your experience in terms of system, what works for you?

Chris Guerriero
So my leadership teams are usually kept quite small. So we’ll have four to eight people inside our leadership team, and they will have teams underneath them. Like I could talk about how I structure my day later on.

Dan Lok
That would be, that’d be great. Awesome. Yeah, I would love to see.

Chris Guerriero
Right now. Okay. So and by the way, it’s in direct correlation to what we’re talking about. So that’ll I think that’ll help to explain this. My week is kind of like this Monday, Tuesday, Thursday, Friday, I have my mornings very strategically booked from nine to 930. I do something I call numbers of notes. So when I get into the office, Emily has been my system for over 17 years, she delivers To me, the key metrics for each one of the companies that I’m integrating involved in, well, that’s a owner, a partner, and investor and advisor, I look at all the metrics, I take notes on everything. And that takes me about a half hour and then from 930 to 1230. I’m in meetings with each one of my leadership teams. And they last anywhere from 10 minutes to 30 minutes. The amount of time really depends on how big the company is. Or if we’re going through a growth spurt or if we had a new competitor come in or something like that, but 10 to 30 minutes, and then from 12-30 to three o’clock. And from don’t those meetings, I’m an employee of each one of my company. So I push things forward, I do what I’m good at. And I push things forward during that time. And then three o’clock on, I’m done. And I’m with my kids. The only day that’s different is Wednesdays, and that’s the day that I work with the companies that I advise and I’m starting from 6am I go to nine o’clock back to back and I one on one work with 20 brands and that day juices and Jazz’s me so much that at the end of the day, I literally I literally have to do something to calm down and relax to stop my brain so I could actually sleep that night.

Dan Lok
That’s fantastic. Okay, I have a deep that I love this is this is this also very, very practical or useful for myself as well. So let me just circle back. So now 510 to 930. The numbers in notes. So what are some of the key numbers to look at? First of all that one pager?

Chris Guerriero
Yeah, so it depends on the company. And I hesitate to say, Hey, here’s the exact numbers that I look at for each one of the companies. Because I think it screws up some audiences because they start to look at my numbers. And they forget,

Dan Lok
Maybe Chris give us let’s say as a startup versus stop us.

Chris Guerriero
I’ll give you some specific examples, but I just wanted to preface it by saying thank you please personalize this shit. Yes, almost every company we look at revenue and net right and revenue and net is broken down not just in Hey, what’s revenue but you know, what’s today’s revenue, but I want to know revenue to date. I want to know last year this time as well. I also want to know what our projections were to date to see if we’re on mark or not on mark. In a supplement industry. We may look at bottom number of bottles sold in a internet industry. We’re going to look at list size we’re going to look at List revenue, we’re going to look at, like any company will look at lifetime value of a customer, we will look at the retention of our customers, right? Because in almost every single one of our companies, we have some kind of residual built in no matter what if it’s an online or offline company, even if it’s repeat customers, how often are they coming? So those are some examples.

Dan Lok
What software do you use to pull all that data together? Or do you have someone who does that for you?

Chris Guerriero
You’re going to laugh, the software is called Emily, And

Dan Lok
Ha ha ha, Emily is awesome. Yes

Chris Guerriero
Yeah so I am a paper and pen person.

Dan Lok
Yes

Chris Guerriero
I do a lot of things online. But my teams do a lot more online than I do with dashboards and things like that. I like to have my numbers delivered to me every single day on paper, I want to be able to see them, I want to be about scribbled notes down so that when I have my meetings, I am right on target. And I know exactly what I was thinking when I was looking at those numbers. So Emily delivers, compiles all of that stuff, got it, all the right people. And here’s what I found, I believe one of the biggest wastes of money, and I apologize to anybody who’s listening to this, who builds dashboards for a living, in my experience, building custom dashboards has been the biggest waste of money in any one of our companies, because there’s so many small things that go wrong. They’re very, very costly. And they very rarely give us exactly what we’re looking for with no bumps and bruises. But Emily, calling each person on leadership team, getting all their numbers, compiling it exactly the way I want it, and then delivering it to me. There’s never any problem.

Dan Lok
I love it. I love it. And then from the 930 to two, so two new and basically, Dan, you have I guess, like I said, could be 10 to 30 minutes, just with leadership for four different companies. That’s kind of level 10. Big Picture. problems, right?

Chris Guerriero
So we asked three questions. I go in every single meeting, there’s three questions. And I don’t have to always ask them, because everybody knows, unless they’re new to the team, what they are. But number one, I always want to know what you have. What have you accomplished so far? So today’s Thursday, if that today’s question was what have you accomplished so far this week? And then the second question is, what are you focused on today, and we have an annual meeting every single year, which breaks down the our, our big target. So if we have a target of let’s just say 100 million dollars, in this one company, we will break down every single product or service that is associated with that, they will break down every single action that needs to take place. And by the way, that meeting has every single person in our team in there. And if there are vendors from a different country, and they can’t fly in that meeting, we have a wall behind me that’s full of monitors, so that everybody can be there. They’re either Skyping in or zooming in, or they’re on at our boardroom table. So every single task that has to be completed for us to meet or exceed our targets is on that whiteboard. And then everybody takes ownership of those tasks, we have a whole specific process on how to do this, which we’re more than happy to share offline once. But once that’s done, then all those everybody owns those tasks. So every day when I’m having my meetings, and I’m going over that second question is what is your most important uses of the use of your time today, what they’re doing is they’re telling me their top five list, the top five most important things that they need to do today, to keep their department moving in the right direction. So the company could be moving in the right direction.

Dan Lok
So it’s almost like a morning huddle with your leadership team for each company.

Chris Guerriero
Very much like that. And the third question is always who has an obstacle, and we train people to look for obstacles, because what I found in growing companies, is that the biggest challenge with scaling a company fast enough, is that one or two people will have an obstacle that if the entire team just talked about it for five or 10 minutes,

Dan Lok
It will be solved, Yeah.

Chris Guerriero
Blow it off their desk and they would not be a cork in the bottle. Like they would not be the anchor holding us back

Dan Lok
Umm I love it. And I also it’s very, it’s, your schedule is also pretty fascinating. So then you focus on then the like I said after, after noon, to three o’cLok, right. So yeah, so in some way. It’s like, you’re hyper, like you’re a high performance athlete, you’re not thinking about I’m going to work 9am to 9pm I’m sure we’ve all been through that already. Right. You know, in an earlier time of our career, maybe the first 10 years. Right, Chris? It’s nine, nine to 10. Yeah, right. But now it’s more Okay, we’ve got the team now. It’s what’s the highest and best use of our time into so that we could do the innovative and creative work, right? The only we could do that nobody else is a visionary. So I love that. And then Wednesday you talk about you. So you’re advising from 6am in the morning, right to.

Chris Guerriero
Yeah, my first calls at 6am. I basically do four things and the owner of companies, I’m a partner, or I’m an investor through our venture capital firm, or I’m an advisor, and I get the opportunity to grow honest, ethical, moral legal companies that are helping a lot of people and all four of those and I think very blessed for that advisory program is called club 28. It’s 20 brands that I work with every single year. And I personally helped them to grow. And we’ve got companies that are doing a few million dollars a year, but they are aggressive growing companies, and they’re doing wonderfully. And we’ve got companies that are doing a few billion dollars a month. It’s just staggering the amount of knowledge that I get from working with these people, and the amounts that I’m able to then share with them from what I am good at, like I would never take a client on into the advisory firm, unless I bought for sure, I’m going to be able to bring some immense value and you’ll move the needle quite substantially.

Dan Lok
And those are the ones who talk to basically on every Wednesday on a weekly basis then.

Chris Guerriero
So almost all, not everybody is every single week like we have some larger brands that they fly their entire team down just once a month we will spend some time that we have a couple of hours together once a month instead of every single.

Dan Lok
I love the 4k so as an owner of course I think when you just share about the kind of the morning huddle The, the morning the numbers, so that’s good that’s the owner role or the hat right as an advisor, which is the Wednesday that you block out as advisors and consultants to help companies grow the company. Right. Yeah, that you said you feel that that they have the potential to impact a lot of people to grow as well, right. What about in terms of the partner, if there’s a partner or as an investor it is there any different you spend time with them or do you just invest in you know spend time

Chris Guerriero
With my to spend time with me Astro for the partnership that’s very easy I spent a lot more time with my partners, but as an investor inside of the venture capital firm my, you know, when I sold the clubs, I did two things which I think were very integral to my life and I’m so grateful. Thinking back that I made these decisions were first one was I started the board of directors and that board of directors has been with me that that was back in 2004 and we close that deal I actually started that in 2003 and a half a year before that so I need help getting through that deal, and they’re still with me and we meet every single month. The second thing that I did was, I was good at growing a team that was good at growing systems, I was always good at making money, but also very good at spending it so I was not going to what to do with money or what I knew the amount of money that was going to be coming in. I knew I needed a place to put it. So, the venture capital firm was very, very integral for me, so I was able to invest in that. And, and my quote unquote job in that firm is, I go into after a company goes through all the rigmarole of getting funded by us. I go in and I look at their culture, their systems their teams, their processes and I restructure them for growth, because we want to be able to get our initial investment back in three to five years so for example if we invest $2 million into a company. I want to be able to improve your five years, get them to be $4 million more profitable, so that we can take our initial investment back, and still leave them with enough buffer to continue to grow. And that’s real important to understand because we don’t make money by investing money and getting a little bit of interest back we make money because that company is now, throwing assets, out of our portfolio. So, that’s my skill set that’s what I bring to the table I can go in and I can restructure a company relatively easy to grow, and I use that, not just in the venture capital firm, but for the companies like cut 28 basically started because we had so many perspectives coming into the venture capital firm that we were shredding, great, amazing companies, but they couldn’t handle the growth if we funded them we would have been hurting them.

Dan Lok
Yeah, they’re gone. Faster.

Chris Guerriero
Exactly right. So it’s like throwing gas on a already burning fire it’s not always helpful to throw money at it, company. So I had a meeting with the other partners and I said hey listen, I would like to contact some of these companies and say, listen, right, I think I can help you as an advisor to get to the point where one of two things will happen either, you’ll actually be able to handle this money, and you’ll be a better candidate for us to invest in, or you won’t need the money. They were fine with it. Thank goodness because otherwise there would have been a problem with my fiduciary responsibility not to compete with this company. So, I started that I started making a couple phone calls and everybody was like yeah yeah yeah I want you in here. And that’s how it started.

Dan Lok
I love the question I’ve asked you about the in terms of like the compensation like if you were someone to you’re there by someone in your mind to share like how do you charge him a retainer that charge a percentage, on the advisory side. I’m also interested in the investment side, if you could share.

Chris Guerriero
Right, yeah, happy to share anything. So as an advisor aside we have different levels can ten thousand to twenty five thousand dollars per month. Okay. Any amount, it really the amount of my time that is necessary for that. So, the smaller businesses would come in and they would get a percentage of my time, every single week. You know I would speak to them, I’d make sure that I was helping them pull the right levers like figuring out what levers needs to be pulled, figuring out where the holes are you know as well as I do. After speaking to so many different businesses, you could look at a company and just say, Oh my God, you are so good at this, this and this, but you got a big hole in your bucket, let’s just fix these few things. Yeah, by the way, I already have all the systems for that because we build systems that somebody

Dan Lok
just gave it to impose upon your idea,

Chris Guerriero
or I’ll help you personalize it with our time together, or maybe you need a person, and I just got people that we pull in for the venture capital firm all the time, like I could introduce

Dan Lok
This book boom right there.

Chris Guerriero
And so it’s becomes relatively easy where people can get in and scale very, very quickly, inside of there so that’s the compensation.

Dan Lok
Got it, okay, yeah. And then on the investment side?

Chris Guerriero
So on the investment side, it depends on the amount of capital they need and the amount of brains we bring to the table, like so the great majority of companies, we will require 51% ownership when we initially go in and then we’ll get our initial investment back that could drop down to, as little as 30% ownership in the company depending on how much of our time is going to be required to continue that growth through.

Dan Lok
Umm can you maybe walk us through not give any names but like a deal that you’ve done like walk us through what that is like companies coming in and doing. I don’t mean like a million a year and invest X amount of dollars and then they grow and then what happens then?

Chris Guerriero
As the venture capital not immediate

Dan Lok
Yes venture capital.

Chris Guerriero
Okay this is going to be fake (an example)

Dan Lok
Yes no name

Chris Guerriero
As you say they need a million dollars. Yes, and, however what they’ve got is a tremendous amount of talent, they have a tremendous amount of relationships that they could leverage, but they cannot handle their inventory they don’t have the warehouse space, and they don’t have the right guidance to be able to run their ads on the right platforms. This particular company was doing a lot of online advertising, when in reality, since they are a physical product. They really could if they had the experience, go on television, but they didn’t have the budget for it, or going on. One of the things that we do a lot of. If we know somebody is really primed and can blow up with their on television, what we would do is we would help them to optimize their online advertisements. And then, once we figure out the best subject lines that we I mean that’s such a bizarre sorry the best, the band line. They’re getting people over to your website. Then we may use that those headlines as subject lines and try to create compelling copy in emails and create some copy in there that’s going to get people not just to open up, but to click and buy something, and then we’ll take that, what we learned from there. And we’ll try it in direct mail postcards or something like that, or bring it directly to local radio and try to get people to convert on that, but utilizing all the data that we have built up from there, and the knowledge that we have from past radio experience, which means we don’t buy 30 60 90s, we buy Banter spots because Banter spots will convert 40 plus percent better every single time than a 30 60 90s spot. And then we take that and once we have that proven which now we really were, you know, we’re spending a couple of hundred dollars here, we’re spending another few thousand dollars here, and then maybe you know five plus thousand dollars on local radio spots to test things out. Now, we have something that we could really go well with TV and not have as much risk as somebody who just says, I want to try TV.

Dan Lok
Right there’s also then comes from all the experience you had back in the same thing with the health club, when you were doing radio and you were doing TV right, so that’s the unique advantage that you have. So you were saying that so they say this company, would there be some cases where they say a company comes in they need a billion dollars, and you look at look at the structure look at a TJ you guys don’t need a million dollars you just the $2 million. Like what do you need a million dollars for you need actually 2 million but we can do these things, and then we can use that money why Steve how at scale. What would that be the case sometimes.

Chris Guerriero
Well so most people don’t understand exactly what they need. So everybody’s got to prove why you need it and what you’re going to use it for right and it has to pass a lot of tests with us. And then we have to do a lot of backwards our legal team will do a lot of background and everything on the accounting team will go through everything we even see it because I don’t want the investors should not even be looking at these prospectuses unless they’ve been vetted once they’ve been vetted and they’re on our desks that we assume all the T’s have been crossed and i’s are dotted. And then if we do agree to invest, there are roles in place that say, we will release the first $2 million. Now, and before we release this, the next round. You need to be able to do blank and blank so we need to be able to grow team,

Dan Lok
This big what systems are having performance

Chris Guerriero
You know everything, right? so that we could see that what we know is going to scale that company is actually moving in the right direction.

Dan Lok
And then from that you hit the second set of milestone when they hit certain milestones and you say okay now we can reduce more to 40% guest and you no doubt, the team, they are capable. Now you take a more like a passive, no not hundred percent but like more passive role they can grow it now. Right now he’s just like a more like a shareholder 30% but still get advice as well.

Chris Guerriero
So yeah, but again it depends on the amount of our mental bandwidth, we’re going to have to keep putting from that point forward because there’s a strong possibility they’re going to need guidance and most, most people are very defensive. When you say, I can help you let me just come in and help you just want to check. There are so many companies that want funding, that it’s okay that we are not right for everybody. Like,

Dan Lok
We join an active venture capital firm, not just do the money, but you give the other guidance systems, your, I call the intellectual capital.

Chris Guerriero
Yeah, it will cost more money. We want to be able to share what we have. So there are certain things that they have to take our advice on, and then there’s certain things that we’ll just say, Hey, you guys are experts at this stuff. I will bring in an expert that I know to give some guidance or I’ll give some experience that I have. But in the end, you guys will make the decision on these things. It’s like a partnership agreements if you ever drafted a partnership agreements. You’ll see. My name is Dan Loke and I own 50% of this company and here’s my core competencies that if there’s ever a decision to be made here, and both partners are butting heads and we can’t come up with decision, since these are in my Court nominees. I have the final say. And here’s your bullet points also Chris that if it falls in here, you have the final set right because this is what you spend your life doing and this is where I spend my life doing.

Dan Lok
Yes do some sci fi sometimes Christopher maybe the youth advising them, and then later on, would you advise up to a certain point, day by day by the funding, or maybe the funding are they going to, like, kind of like the data ecosystem or talking about right.

Chris Guerriero
Once they get to a certain point in the advisory program that they really want to scale faster they may need funding. It’s out of my hands at that point it has to go to the venture capital firm, it is not like Chris can funds that we have, but it’s very rare in the back in the opposite way once they’re in the VC firm once we funded them, I have an active interest in that company. I will advise the hell out of that.

Dan Lok
Introduction. Whatever it takes, what are you your partner right?

Chris Guerriero
Now you need me to help you name your first child, and they’re

Dan Lok
Awesome, Chris, it’s been delightful it’s like I haven’t been taking a lot of notes in a lot learning so much so, I really appreciate it. For my audience if they want to find out more about you, they want to have all your social media or what’s the best way to do that?

Chris Guerriero
I’ll spell it I guess because Chris Herrera was probably not the easiest name to spot,

Dan Lok
That makes your name unique I also make sure I put a link in the in the show notes as well.

Chris Guerriero
Thank you so much. ChrisGuerriero.com. That’s where they could get access to me personally, on the website they could ask questions they could download anything they want to over there we have something called a built to grow review there, which helps companies to figure out what, as they’re growing might be breaking, and they need to fix in order to keep themselves scaling it’s a quick quiz. We’ve got lots of great companies who take that every six months or so it’s like a business 360 review, that’s free by the way. Chris Guerriero on YouTube or Instagram or, I don’t know, pretty much everything else.

Dan Lok
But thank you Chris I really appreciate it. I appreciate your knowledge sharing your story with my audience so thanks again.

Chris Guerriero
Thank you very much. They’re very grateful.

Dan Lok
Yeah, it’s amazing. I learned so much. And Chris make sure this gets to set the Susan my CEO this is so good. We’re going to take some Loks on this. It’s awesome.