Subscribe
Share
Share
Embed
Exit-Ed: Stories from Grind to Sale
Join us on Exit-Ed, the podcast where successful founders share the untold stories behind building, scaling, and selling their companies. In each dynamic episode, we go beyond the headlines to explore the challenges, strategies, and pivotal moments that shaped the journeys of entrepreneurs from each corner of the globe.
From the long nights spent grinding to the high-stakes negotiations that led to rewarding exits, our guests provide practical insights, hard-won lessons, and inspiration for anyone on the path to success. Whether you're an entrepreneur preparing for a sale, an investor looking to understand founder dynamics, or a business leader seeking new growth strategies, this podcast is for you.
Learn from those who've been there. Get Exit-Ed.
Gabriela Smith (00:02.892)
Welcome to Exit-Ed, stories from grind to sale. This is the podcast where we dive into the journeys of founders who have navigated the path from building their companies to successful exits. We interview entrepreneurs from around the US and around the globe, exploring their experiences, scaling processes, and the lessons they've learned. We'll talk about the good, the bad, and the ugly. We're excited to have you with us. Let's get started and let's get excited.
Hey guys, thank you for being here today. Well, I have a very, very special and dear friend of mine, Johnson. Skip is in the Twin Cities area in Minnesota and Skip and I actually go back a few years. We met at an organization that we both support and is very dear to our heart. But I Skip to tell you who he is, what he does, and obviously he's an amazing entrepreneur. So Skip, how are you doing today?
I'm doing really well and I'm so glad to get to visit with you. It is fun because we've known each other probably for eight years or something.
It's been a while and you know, the beautiful thing is that we actually didn't meet in like a business environment. It was more on the faith driven side that I think we both have, right?
Yeah, we met through ministry with support and get to know people that way. And actually some of the best business connections came out of those kind of things, which, I think is a principle, right? Support what you live the life you live, be real and authentic and get to meet people like Gabby. So I'm here in the Twin Cities of Minneapolis, St. Paul, married to my wife, Amy, for 16 years who you've met.
Skip Johnson (01:41.902)
We've got three beautiful daughters. got a 14 year old almost 12 and nine and it's more than a busy but fun season that way. yeah, I get to actually help entrepreneurs now navigate some of the growth journey. I do some real estate investing. I'm a member in a partner in a private equity real estate fund. we invest in multifamily and apartment buildings. But a lot of my passion is growing businesses and
Maybe there's a few things we can share that's what not to do because I've got a few of the scars to prove it from when we grew up pretty fast growing company and exited a few years back.
Right. And so, you know, before we jumped on the call, I was looking a little bit at your LinkedIn and I wanted to get a little bit of like your story and your timeline. And I know you had a big exit. I think it was within the last five years or so, but then before that, I feel like you had an entrepreneurship, maybe one or two ventures before. So tell us how the entrepreneurship story started with you.
Yeah, I mean, I didn't know that I wanted to be a business owner. But as a pretty young kid, I'm actually, my parents were teachers. So I grew up in a small town in northern Minnesota. We didn't have tremendous resources. But as a good student, I like to do things like I put money in the stock market when I was like, seventh grade, my grandpa was an entrepreneur, a few aunts and uncles. And I just I love to sit around and hear their stories like the deal they did or the property they bought or the business they were investing in. And so I was naturally drawn to that.
didn't have the word entrepreneur as like, mean you can just be a person who's going to own a business. That's, that's a thing. So I went more of the white collar route, went to school for architecture. And I think at some point realized I imagined pitching my idea in a boardroom more than I imagined the day to day of architecture. Right. And so I, you know, how I got started is at some point I got a sales opportunity in college and
Skip Johnson (03:39.534)
I realized when you can sell, it can open other doors and suddenly that's a transferable skill. I don't know, we started a small business where I recruited some reps for a telecom company and I had a little team. I had a window cleaning and home services business for a handle of years, which I sold to some friends and it was actually, it was fun. mean, we just picked a niche and it kind of was like...
a side hobby that ended up having some team members. I got recruited into the financial services world around 2009. And some of those same maybe skills that a good architect would do, ask good questions, understand the client's dreams, know, problem solve. Like I just started doing that with finances. And we really we called ourselves retirement planning architects, like we were helping people design their ideal financial future and retirement. And that was our primary company.
that's super cool. So you go from like window cleaning and you the sales to financial to completely different different areas right and you know I've actually heard people I've heard different opinions as to you know should you be passionate about the business or the subject matter or should we be passionate about growing because you know they're two different areas I mean obviously but obviously you were successful at both.
So what's the magic? it that you should be passionate about the industry you're in, or you should be passionate about maybe the growth aspect, the client acquisition, the scaling? What's the trick?
Yeah, that's a great question. And I could probably defend both ways. Although I was in financial services, although I work kind of in investing and with a lot of financial services companies now, like, it's not necessarily the center of my passion. Like I'm passionate about growing businesses and teams and systems. So I like that. But you probably have to find a why. So I think of like Jim Collins, his hedgehog principle is
Skip Johnson (05:39.97)
What are you passionate about? What can you be the best in the world at and what can get you paid? Or the Japanese call it ikigai. It's concept where you find the overlap. And so, you know, when I look back now with the benefit of hindsight, I also was naturally gifted in finances and financial services. I do enjoy it and it was intellectually stimulating, but I feel like I could just as easily and am an entrepreneur in other spaces as well. But find out what your, where your interest is drawn to.
Don't just go, I don't mean, you're going to be bored if you don't have some passion, at least for, right.
in the process. mean, we see, you know, entrepreneurs pair up and, know, one person is the one that is the subject matter expert, the other person may be like the operator, the architect. So that's really cool because people feel like I hear so many people say, well, you should love the subject matter. But I think that you, as long as you find some passion and some interest in
The processes that are involved, think, you know, I think that's a good formula, but of course you need to know something about the subject matter. So when you went into the financial company, how did, how did that happen? Tell us the details. Like did you choose like, this is an idea. said you got invited by friends. Was it a business that already existed and you bought into or the way you found her? Tell us more about that one.
Yeah. I mean, this is far enough out there now that and the old owner isn't there, but I got recruited into a financial services business. Somebody thought I'd be good at a role. So it was established compared to, know, Gabriella, let's go have coffee and let's see if I can, you know, ask for five referrals for you about wealth management. We did more public facing seminars, educational events and seminars. There was a time this was in December of 2011.
Skip Johnson (07:29.454)
I did well in that role. did great in that role. I was a young guy making six figures and having a lot of fun, thriving, learning. Got invited on a top producer trip, you know, in the industry. And I found out that the owner of the company was lying to me. Oh my gosh. I found out that the comp grid or the commissions, like what he put and what was the truth were two different things. Oh my gosh. And I was emotionally done. Oh my God. And frankly, I was 26, 27. I mean, fairly young, whatever the age was.
And it was like, why I, maybe we can do this on our own. I hope we don't have the big name behind us. and my, my wife had the, met some other people in the business who were just kind of willing to open up and mentor me and share how they built it. and I was a sponge and maybe young enough to not know what I didn't know and had a few other smart people that we made that leap together. so we December, 2012, mean,
two people and an assistant to 60, 70 people not that many years later on our team with multiple offices. So that was the leap was not a grandiose plan. I think at first I just hoped I could make and pay my bills with the young family and it went pretty well. How's that? Great grand vision. No, hoped I could pay my bills.
You are awesome.
Gabriela Smith (08:45.13)
Yeah, you know, I feel like so many people would be, you know, from the hurt of being cheated on or the hurt of somebody saying one thing and doing something else. So many people will say, well, this isn't for me. You know, maybe maybe it's not meant, but, know, you said, you know, this is not going to stop me. And this is a pattern we see, right? Like entrepreneurs, people with that drive. It doesn't matter.
how you get hit, you get back up. And I've said these almost literal same words in a previous podcast that we recorded. You just have to get back up and reinvent, right?
Yeah. Yeah. I think, I mean, posted this once on LinkedIn, but I said, don't tell me that it can't be done. Like entrepreneurs don't say, like, they don't take that for no, for an answer. They're like, how can we do it? How can I make this happen? That kind of position, cause you're going to run into a million roadblocks. Like we run into them all the time. Launch a fund, do this. Don't tell me, no, tell me what must happen or how could I like,
That's the problem solving that that helps grow and create businesses.
Awesome. Okay, so let's walk through, you said, you let's do this. You're talking to your wife and you're like, okay, we're gonna do this. And you said earlier, you know, I hope we can pay the bills. And I think so many of us are like, I hope I can pay the bills, survive, feed my kids. What were the first few months like? Like, what was like a day today when you're like, crossing your fingers, God help me get through this week and this month?
Skip Johnson (10:16.11)
Yeah, I mean, looking back, I'm kind of like we were crazy, but God did help us. And I remember even right when I was about to exit, we made a decision to be generous actually to that organization, Pulse, that we talked about something to our church. And I'm kind of like, what was I thinking? Like we gave a bunch of money away and started a business, but well, God was in it. Yeah, planted a seed. in that, what was it like right away is we did
You know?
Skip Johnson (10:45.934)
instead of one-to-one marketing, we were more one-to-many and educational. So I had a very fortunate background. I'd been speaking at events for the previous company. The hope was, can I follow a business model and template? So I we put lots of money and we sent mailers to invite people to educational events. I mean, our website was like, we're a brand new company. You're like, will anybody listen to these 26, 28 year olds? To be completely honest, we...
brought on a bunch of business right away and right from the start, it went incredibly well. Didn't mean things didn't get harder later, but financially that leap paid itself off quite quickly. And I can't have explained that other than my first month in our new business, I brought on a client and a family that had more money than any client I'd ever sat down with in my previous role in years. Now, can you explain that in your first month and they decided to trust us? Like, my goodness.
Sometimes you get lucky and sometimes you are God's favor or you just put yourself in a position. But what I was willing, I was young but I knew they got me and I would work my butt off on behalf of that person. And I believe if anything I could convey like, I will work hard for you, for your family.
Right. And you know, it's, love, because really you're talking about the customer, I will do this. And you're really, you know, so loyal to understanding what is their need. Right. And that's something we hear. That's another pattern is the people that have been successful, obviously with many other elements. And I know there's a big element of faith. There's a big element of hard work and different parts of the formula.
But I think a key part of the formula is knowing your customer, knowing the need, right? I feel like you found a need and obviously, you know, the doors are open. People are flowing in because you're feeling, you're feeling that need. There's, there's a void that you're basically feeling. So in the case of like the financial industry where you were, tell us more about like what, like what.
Gabriela Smith (12:50.936)
product or what service you guys were offering and how that met a need to the point that I almost feel like you were probably looking back and looking at your previous company saying, but you know, we kind of, we kind of found these, this new way to do it even better and faster. Probably, you know, who knows what other parts you offered.
I didn't have this language. guy named Donald Miller and his book, Story Brand, or building a story brand does a great job, which is just saying, the hero is not me. The hero is not you. The hero is the customer, right? So what's the customer? They, in every great story, the hero needs a problem. The problem is security. So our position in a business is to be a guide and a guide who gives them a simple plan. So in financial services, this is actually the first generation in history.
that's been retiring without pensions, right? Literally, K's IRAs were not a thing until about 40 years ago. So they're trying to take a pile of money and turn it into a paycheck. And people fear running out of money more than if you're deaf. And so...
you know, volatile markets. In fact, while this is being recorded, the markets are kind of a little haywire, you know, right now. So we did as we said, hey, we get it, we understand the fear, but we have a plan. And the plan was ultimately it was building a retirement income plan with tax efficiency. We had a trademarked approach, something called foundational income. And we believed, if you remember Maslow's hierarchy of needs, pyramid, food and shelter, at the top is self-actualization or purpose. We were like,
Let's make sure that people's basic needs are taken care of with safe for boring, consistent sources of income. My belief is that will make people a better investor on the rest so that they're more likely to stick through the ups and downs because they're like, honey, I know we're good. We're going to be OK. We're not going to run out. So we just really niched in on helping people retire and do what we call live greatly. Like, how do they live a great retirement? If their needs are taken care of, now they start thinking future, giving, legacy.
Skip Johnson (14:52.866)
fun, family, travel, generosity. That's so much more fun than being scared. And nobody's ever retired and said, I want to watch more daytime television. Like, they retire and they have dreams. We just were about helping them navigate and build a plan to reach the dreams.
That's beautiful. And you know what? I have to imagine, you know, obviously there are some topics in life that are difficult to talk about politics, difficult to talk about, you know, want to upset anybody. And money is an extremely personal topic. mean, money is, I would say almost an intimate topic, at least in our culture, right? We're not walk around asking how much money do you have? We know what do you do? How much you make? But I, you know, in your business, you basically got
enriched into the core of people's livelihoods. And so, you know, for people that might be in industries that are touching on intimate parts of our lives, emotional, physical, whatever, how, mean, you know, obviously your narrative is beautiful, which is your legacy, but did you know how to approach the topic or did you learn it as you were kind of growing and refining the narrative of what you do?
Because it's not easy for people to open their bank accounts and their paychecks and show that, right? How did that work?
Yeah, intimate was the right word. Like I knew more about people's finances usually than anybody else on the planet. Right. And it can be like, do you want to see me naked? You like I'm opening this all up. Exactly. So being safe and approachable. like, I think the sense was people knew we deeply cared for them, that it was going to be a judgment pre zone. And we would compare it as an example to like
Skip Johnson (16:39.604)
I will not diagnose like as a doctor, I will not diagnose you unless I've done some testing and understanding. So one more like, we're going to just understand where you're at. We're going to show you where you're at. We're going to open the hood and you'll know better than you ever have before. How was your financial plan? And are you on track? And then from that, you can do something with it. But the kind of care, compassion, presence, listening, note taking.
But was a process. mean, we never just came in, smug products. We were often four steps of meetings to help them build their retirement plan. And it was a natural process. So if you can maybe, you know, build trust, I mean, at the end of the day, people will understand, are you doing this to make a paycheck? Or are you doing this to help me? And you have to keep your heart posture toward the client or they'll smell it.
Yeah. And you know, that's something obviously that we see, you know, in the illegal industry, reputation and trust is a hundred percent, even to the point that sometimes you need to be able to pass and say, this isn't where you're at. You know, you are three steps behind to where you need me or, know, you already passed, know, you're beyond, you know, maybe the transactional, now you have to go to the litigator and really know, you know, when, when you stop yourself as a professional, you know, dealing with
people's most intimate parts of their lives, like money. So it's an art.
It's an art. yeah, I mean, you asked like, did you learn that? Did you know that? think we didn't know much of anything, but we were willing to be students. We got good advice and we stayed humble, pitchable, teachable and focused on the client. There's a great book, this guy Eugene Peterson, wrote a, he wrote the message version of the Bible. It was like the Bible in modern language, but his autobiography is called A Long Obedience in the Same Direction. And I think in business, like,
Skip Johnson (18:33.806)
long consistency in the same direction with the same heart is going to overcome a multiple of, you know, sins. It's not about talent. It's not, know, like, stay the course the same direction with the right mission for a long enough period of time. And it's probably mostly going to work out pretty good.
Right. And perseverance is another big common thread, not giving up because, and again, just to go back, we just see so many people, well, I don't know how to do this. I don't know how to do that. You know, I have this problem, litigation, whatever conflicts and just not knowing how to resolve conflicts. So I want to ask you, you know, in these areas, maybe we're again, going back to the intimate aspect of the business, difficult.
Clients, difficult customers, do you come across them? How do you manage a difficult conversation, disagreement with an intimate area where so often it seems like, it could seem like you're being self-serving. No, you need this, you need that, no, I don't need it. How do you manage that?
Yeah, I mean, on the self-serving side, we had a fiduciary lens that we had to work through. So I needed to build a plan for everyone so I could justify why I recommended. And I used to say I'm not going to wrong, but like I was wrong with evidence that showed, you know, why I was going to do it. So when you get difficult situations, when somebody gets upset, which happens, I want to look back one, did I make a that I need to own? If I did.
I need to own it. Don't make excuses. Number two, sometimes people are just jerks. And like at that point, like I was probably going to stand up on behalf of my team. And I was willing to fire a client versus let them treat our team poorly. But it conveyed that we were not like, yes, the customer is already always right. There's some times that I needed to assert, I'm a professional doing my job. My team does a great job. We might've missed the ball, but like, you're not going to talk to us that way. Right. But we can, you know,
Skip Johnson (20:28.942)
So there was like a posture as a leader that says, I'm not going to shrink back. And then one other part maybe that was good is over time we would use, we got to understand our clients personalities because we actually believed if we understood their wiring, we could invest better on their behalf. Some people like in a disc profile system are just way more direct. You think they're yelling at you and it's like, no, they're just passionate or they're Italian.
Yeah, I may be one of them, by the way. just talk.
Yeah, you know, like so the more direct versus in the Midwest, it's Minnesota nice, which means we don't say what we're thinking half the time. But if I kept my focus on them and trying to hear sometimes the words behind the words or it's high emotion, like if I can stay settled and grounded, as a side, know, but what I believe the top two things that makes somebody an effective leader is being inwardly sound and others focused. All the other stuff, Charisma and vision and communicator and strat, yeah.
If I'm sound because I'm healthy or I don't need anything from you, Gabby, to like be okay, I can stay focused outside on touring into other people and I'm just going to show up different. So, I need some counseling over the years to like get healthier so that I could respond better.
Right, and that is important, right? And then being right in that in your own head, right? Because you will eventually portray if you have issues here, you know, then you're eventually gonna portray that. But I wanna take a step back because you said something that, you know, especially for us in the services industry, leading with people, clients, you you said the customer is always right. Maybe, maybe not.
Gabriela Smith (22:08.002)
You know, I'm in, I'm on this side that I think they're not necessarily always all the time, right? I think we need to love them and cheer for them, but there's also boundaries. And I think customers just like anybody can try to step into a boundary that doesn't belong, but it is right. It is so.
It is, again, it's another piece of this artistic, I think being in business is almost like art. And it's another piece of this art that we all create in our lives as business owners, entrepreneurs, creators, which is the mind, our mindset, but also our customer's mindset. Did you ever come across customers or clients that you felt like...
maybe on the emotional side, you were more mature emotionally, reactively, you're like, maybe, you know what I mean? Like, you know, they're being too raw and not in the most positive way. And maybe we're not the best match, you know, and sometimes we're not the best match. what have you had experiences with that?
I'm a big fan of Henry Cloud and Jon Townsend. They wrote the book Boundaries. so having boundaries, super important, right? As an entrepreneur, the tendency could be to take work home with you. Like there are times I need to like protect my family, myself, those kinds of things. I also need to make sure that I realize that there's times that like what they're saying is on their side of the boundary. It isn't necessarily about me. So yeah, in finance, many people are very fearful when it comes to their money.
particularly, you know, stock market gyrations, fluctuations. And so I think the more maybe sound I could get, the more I can realize like what, yeah, what they're saying. It doesn't phase me because I realized they're reacting out of fear or emotion. So my job a lot of times is like, can I meet them where they're at? Can I go, Hey, I totally can I attune to them? hear you. Often the first advice wasn't for me to give them perspective or argue or tell them my point is go, wow, I
Skip Johnson (24:10.082)
totally hear how you felt that way. Like, you know, wow, I can really hear how we didn't get back to you at that time. Like, I'm really sorry. And I can diffuse things. And then it might be like, and hey, you sent the email at like, 11pm on a Friday, and I'm talking to you on Monday morning. Like we don't, we don't respond on weekends. I want my family to have a weekend, or my team have the weekend up. But I need to be settled first. So I'm gonna work on me first. And then
But yeah, have we had to not have to your clients? I have to tell investors who would write us a big check they weren't the right fit. like, you're an ass. Sorry, can't say that, but it happens, right? Like it happens. It's like, we also, that was in onboarding, we would offer a two step process with our clients or prospective clients, discovery and analysis meeting. They didn't engage, we didn't engage. We said, is no cost or obligation for you. We need to find out if, you know,
You need to decide, we the right fit for you? And we need to decide, we think we're the right fit? Both. The more I could also value myself as an entrepreneur and not diminish, yeah, it's a service-based business, but my service is valuable. And I want to work with people that I want to work with. Exactly. I hope when I look at the phone, go, Steve, how are you doing? How are you? Yes. Other than they're calling.
You need to enjoy life. First of all, I mean, obviously all of us have our bills and our things to do, but at end of the day, we're here to live a good life. think firmly believing that we can, because I feel like in corporate America and all, know, big corporate, small corporate, there's this friction in the mentality of please everybody.
do right by the customer all the time. And I think that's true, do right by them. But again, those boundaries need to be clearly set and the synergy needs to be there.
Skip Johnson (26:01.486)
And I'm saying some of it now, like with strength, like set the boundary, block it up. Right. That's because I've got the star tissue to prove it. Right. Exactly. If we go into my story, I've got the accolades, right? We made Minnesota fast 50, four years in a row. You know, I've been at, I owned a business that was as fast as the eighth fastest growing company in the States and Inc 500 and best places to work. Wow. All that. Right. And Amy and the girls were getting the leftovers and
There were times that I was like pretty late at night going, babe, I got to take this call. Hey, I got to take it. I have to fly here. And and her going, what do you mean you have to like we own the business. And so my lack of boundaries cost me dearly within my marriage for years. And and I'm now in this like defiantly.
I would say you don't, you you can grow a great business without blowing up your marriage. You can grow a great business without burnout. You can grow a great business and be at your kids' events, but you must decide what you're going to prioritize and the rest you're going to build around that. Don't let your core values slip. And that's some of the pain that I now live from is how do I do it the right way?
Exactly. Which again, it brings the end. mean, for me, right from the female perspective too, it's the same. mean, I love the business and how many times I'm telling you like, guys, not now. And my kids are literally at this time, or not now I'm busy, but you know, there's a, think there's a balance between loving what you do, but at the same time, not neglecting.
who you're doing it for because at the end of the day is our spouses, our kids, even I would say our dogs. know, you know, honestly, I have to say it's going to sound funny, but part of my, entrepreneurship is I wanted to create my own universe because I didn't want to even, I mentioned earlier, this is funny, even put my dog in daycare, right? Before we have kids and we didn't have somebody in the house all day. I just didn't want my dogs there and I wanted to have dogs, you know? So let's, you know, the, the temptation of
Gabriela Smith (28:05.588)
neglecting family, neglecting, especially, you know, those of us in our 40s and during our 40s, our parents, right? And so we're building our parts, our aging, you know, once we get into the 70s or 80s, all of that matters, right? Because why are we doing this if the people that we love don't have us and we don't even have time to enjoy for even our own vacations? did you even, did you have those times where
You're like, I'm doing great. I've got all this money, whatever, but I can't even like take time off.
Yeah. mean, and as a hard driving entrepreneur, my thermometer was kind of broken, meaning like I have a high threshold for pain and like charging after a thing. And some of that, I would say through counseling and things like that, like I've just gotten a little healthier and I see it. Right. But Amy, my bride would go, like, I thought we started the business so that we had time and money. Like we have money, but we have no time. I would do then
what I've now called it entrepreneurial life. Say, honey, I'm doing it all for you. we're doing it. Love it. Yeah. And they're like, we just want you like, so that, that tension work life balance versus integrating. And so yeah, been there, man. Been there, done that. the t-shirt. Yeah.
I mean, I think all of us have that story and it's just, works for the good from the perspective that we learn, right? And especially, feel like, you mentioned your parents were teachers. You learn it on your, you're the first generation, right? That is learning this. I'm a huge studier. I don't want to say believer because, but I'm a studier of the generational impact of what you learn, what you inherited because
Gabriela Smith (29:54.134)
I mean, you know, I want to believe that, and I would love to meet people that, maybe their mom or dad were entrepreneurs and I actually met some and then they already had some lessons learned and wired into their system. So they didn't have to go through that. You kind of, you're like, you're breaking through in your generation. You broke through, you built it, you learn, and I'm sure your kids, your girls are going to know that, you know, dad, these kids with mom and
they learned and I think that that generation, I think is the one that is going to take it forward even more. mean, that's what I believe, you know, you know, in our case, we're planting so many seeds, but I firmly believe my kids, both my boy and my girl are going to be the ones really pushing it forward. And it gives it so much more meaning that, you know,
And they're going to go so much further than us, right? Like, it's almost like a bow that, you know,
further because they have our lessons. saw us, they saw our mistakes and how we fixed it, they're learning from us, you know? And so I think that there's so much beauty in that, you know, even though we have the scars, the whatever, all of us got therapy. I did my own time doing that. And I think it's an ongoing, right? Ongoing, working in your mindset. That's beautiful. Okay. So I mean, I'm loving all the things that we're talking about.
So let's go to the scale, right? Like you guys clearly, we talked of the floods of clients, one client that had bigger net worth than all the other clients together. What's the scaling process? Like hiring your first employee, then moving up the ladder in terms of, you you mentioned the Inc 5000. Those are huge, huge milestones for any founder that is starting literally from scratch. So let's talk about scale, hiring some of that.
Skip Johnson (31:42.678)
Yeah, scaling ended up being an intentional decision, but it was a reaction to a painful time. So when we started and a couple other people from our old firm joined, was kind of like, Skip was the financial advisor and we had a team and a brand, but really it was like Skip Show and so and so and so and so. And we had a key employee, really liked the guy, very talented, very sharp, but we made a classic mistake.
instead of delegating, he would dump. Basically, I dumped everything I didn't want to do on him. Yeah. And he was fabulous at the job. But the reality was we weren't building a company. was more just like he quit actually after shortly after he got a nice raise. We thought he's happy and quit in the exit interview. Like, what gives? You have this great opportunity. He's like, this is not, this is not a real business. Skip, you're successful in so and so you're successful, but like this isn't a
company. And I was so angry. But he was right. And what I realized is, we weren't growing a company, I was growing a little advisory practice. It was basically like a little and so we realized what would it take? And you know, scary as heck to lose the key person who knew how to do all the things right. So you make the decisions to I need to start systemizing stuff.
who can we specialize and can we find people. Turns out I was dumping or delegating stuff to a guy who also didn't want to do that. What I've come to acknowledge now is like, have a strength and there are other people that have weaknesses and strengths that fit. Like, I hate doing this. There are other people that love doing this. So can we build right people, right seat? We started doing quarterly off sites, kind of a traction-esque EOS type. So getting out of the business work,
on the business. And then another thing I recommend a lot now is can you find a coach or a facilitator who can let you and your leadership team be on the same side of the table? Ask the hard questions because otherwise it's arguing. You almost can't understate the value of somebody going, so this, this, this, those kinds of things helped us come together to, to move together instead of all independent. So that was the impetus.
Gabriela Smith (33:59.342)
love that. And especially in our culture, like you mentioned also in Texas, where I'm at, not my personal background being from Argentina, we're very direct, but in the culture where I live now, which I absolutely love, which is we don't tend to say things the way they are. And I think part of what I love about when I do lots of deals and actually go to the point like, guys, we're talking about these, let's just say what color, what shape it is, and that's the issue.
That's my specialty, just calling things. But in our culture, businesses need facilitators because we are a culture that needs help bringing up the contentions, the issues, the friction. It's not easy to talk about those, but those things are important aspects of any business. need to have friction and ideas pulling from different directions and then pick the best of everything.
and not only solve any potential issues, dispute, but also continue to guide us. So talk a little bit more. So you brought facilitators. What do they do for people that maybe don't have a facilitator, never work with a coach? Why do these people do?
Yeah, I would say at the front end, get clear about what you want to build. Okay, so we're talking most likely on this podcast to people that are thinking about exiting some day, they're about building something saleable. there's a decision you need to make. Do I want to build a fun business, kind of a lifestyle business? Or do I want to get it like to kind of this predictable success, scalable business? And those are... It's a decision. One's a decision to stay small lifestyle. And one is...
The only way that you're going to grow to a fully scalable type business is systems and teams. And it's got to be bigger than you. Right. So getting clear on where are we at? Where are we starting on the map? OK, what are the places? Where do we want to head? Are you all in agreement that you want to head that way? What are the core values we want to live out? And values are not just something I'm going to stick up on a wall.
Skip Johnson (35:58.612)
I practice properly core values are confrontational. They're my number one thing for hiring, firing, managing, holding accountable. Basically for telling somebody, I interviewed somebody earlier today and shared the core values and it's kind of like, do you want to opt into this or not? That filtering process. So facilitator often is going to get you clear on where you at, where do want to go? And then just regularly having the help somebody, I love what you said like.
Let's just talk about the thing. Like this is an issue. I say in the way, in the way. Like if it's going to get in the way, let's get it in the way. Like, can we address it?
Yeah, in the video game, you know, they go around, know, the cars racing go up up. No, you got to go head on and you need to open it and address it and look at it and talk about it. Call it its name. All of that. I love that. And, know, we do a lot of deals and I think that's what people like is that we talk about the issues. We don't like walk around and we need to call them out.
you can with your experience, I mean, you can look and be like, hey, if you want to sell in four years, this is going to be an issue. Like you need to figure this out on your cap table or you need to think about this or you need be like some of it from an outside perspective. It's so obvious. You can do look at it and see it when you're in it. Yeah, man, you can't see the forest for the trees. So that's the outside that that helped us a lot for sure.
Exactly. awesome. So, you you guys are obviously building these amazing business learning. Obviously talking to you, I'm like, you've mastered the art of the empathy to decline, understanding, and especially dealing with the sensitive areas of finances and all of that. But and so at what point, so were you guys building to sell or were you guys building just because you wanted to build something?
Skip Johnson (37:42.424)
I never expected to sell. I thought we were building to scale and I imagined 30 more years in that world, but we were intentionally building something. We knew that scalable also was saleable. a business that was bigger than me evaluation probably did a lot for my ego because I was pretty unhealthy in that. But it also meant that we were building something like building something that valued me and we were probably doing something right.
So we did think that way. There's around COVID time, we were doing public events, marketing events. We grew aggressively. We were spending a million plus dollars a year marketing to you. it all shut down. Can't get together. We're pivoting or whatever. And I think for me, it exposed, I was not leading the most healthy in some ways. I was burned out and it ended up leading to a spot where the right decision
And there was a bit of a fracture on the kind of company that a few of my partners wanted to grow versus what I saw. And that's okay. It just sort of meant at some point that there was going to be a decision, you know, them or me or whatever. And we felt in our journey that the Lord was inviting us to a new chapter. So I didn't sell to a big, you know, outside PE firm, myself and one other person, we sold internally to the other partners and founders and
you they're still running a great business. It's just not exactly the business that that I wanted to grow.
Right. you know, so, mean, exiting, it means a lot of things. It could mean you sold to your partners. Sometimes it happens in great terms, sometimes in not so great terms. And that's just part of fact in life. can't predict that sometimes there's a venture capital, a strategic, the P.E. But an exit is an exit, is an exit, right? And so what was exiting like for you? Were you like, I mean, they are, I mean, one thing I tell,
Gabriela Smith (39:44.288)
our founders is it's especially if it's your, your first exit, the second, third, fourth, you know, you already know, but your first exit is almost like your wedding day or as important as some big event in your life. Because obviously you've spent all these years mastering this business, pouring your life potentially, you know, not spending the time with it.
the family, know, not doing the things that you maybe thought you wanted to do. And now you're about to negotiate this document that's drafted by people who, by the way, in most scenarios, never knew anything about you until you approached them and you said, Hey, I'm selling this. Now you got lawyers, financial people, CFOs, CEOs, mean, CPAs.
All these people talking about your business and then you're standing kind of in the background hearing the jargon, the lingo. And so what was the exit event?
Yeah. And nobody wants to hear their baby is ugly, right? Like they're talking about this thing. exit is highly emotional. And so I get to talk to a number of people now. We're thinking about taking on debt or partners or selling. You might see with married couples, like a lot of married couples get divorced once the kids are out of the home, because they look at each other and they're like, we don't even know who we are, Sam's kids. So I'd be like, who am I outside of?
this firm, who am I outside of the billion of AUM that we work with? Who am I? What is my identity? And that was deeply disruptive. One, because, you if you think about it, often with things like non-competes, non-solicits, like I was exchanging something I was uniquely gifted in for a check or for, you know, a deal structure, but I also was giving up.
Skip Johnson (41:31.95)
for an extended period of time, even the ability to work in or operate in that space. like this thing that was 60, 40, 60 plus hours a week, like not only am I not in it, I can't even do it if I wanted based on a deal structure. So who am I now? I got some money. And so that was a big thing. I would say it's wildly disruptive. It's emotional. I care deeply for the people I sold to, but we're not.
as close as we once were, right? When we're working, you know, arm in arm, like, and maybe even in that, like, one thing that if I look back would have been helpful. hired an outside firm to do evaluation. The number to me, frankly, I thought the number was low. The number of them was shockingly large. Right. Had we been along the way, just doing a regular process of like, we know how we value the company, it would have eliminated this giant question mark. I think that that would have
an interesting thing that could have helped a little bit, just like, can we have a disciplined approach to this so that the only thing we're talking about is deal structure and timing.
Even and I would say even because you said you weren't really thinking about, know, you thought you were going to be here for 30 years, but even then you should be doing those regular checkups. Like we're huge on check, check on the polls, check on the health of your business, understand where it's at, because you honestly never know. Because the other thing I think I tell, I tell people is, okay, let's say, know, you may an exit could also mean that something happens to you. Like who keeps
And you know.
Gabriela Smith (43:07.028)
all the things with technically your spouse, your kids, like, you know, not not, you know, exiting could happen really kind of like any day because we know we don't have anything. Right.
guaranteed tomorrow, right? So absolutely in that. Another thing, you know, we all thought we had reasonable documents done by sell agreement, whatnot. Oh, you mean the buy sell agreement and only talks about if I was terminated for cause if I left to compete, if I retired, or if I were divorced, those were our triggers. So the one where and I will say like,
not quite audibly, but it was very clear that it was an invitation from God to say he had something next. it's been, it's been challenging and it's been so fun and life giving in ways to follow him. But like that transaction wasn't covered. We didn't know until nearly we're like getting to the end of the deal that like, this deal structure isn't it. And then things renege and it's an interesting
you know, process, but like, know what you have, have somebody like, you know, your firm's help to be prepared. It would have been a much simpler, better process and probably some relationships would be more intact today with that clarity. And I'm sad about that. If I were to be like a vulnerable here on screen and go, I miss some of those relationships that just are different when two people get on opposite sides of the transaction. And that's kind of a bummer.
Right. And you know, yeah, what an important point. And it really comes down to having those pulse checks throughout. But I want to say again, it's not just the finance and the legal, the relationship, you know, especially these days with, having that vulnerability, you know, having that conversations with our partners and saying, this is where I'm at, where are you at? And, and, know, having ultimately it comes down to the trust in my view, the trust level and, know,
Gabriela Smith (44:58.454)
There's always the aspect of not being too greedy because greed will drive us apart. A whole theory about that, we can talk about it offline, but the aspect of greediness in business is so big and so important to keep that your heart really in check. okay. So it sounds, skip that you, really had, you know, an exit, like, you know, we, see them, we see them all the time, you know, and they're all emotional from, for different ways, for, for these different reasons.
But the new chapter, right? So one day you're signing the paper, the next day you probably have some money in your account. You may have some personal crisis. And I think that's normal to be like, who am I? Where's that thing I was building? What are they going to do to it? And what's going to happen? How, what, what was like the next day, the next few weeks, what was that like for you? And where are you at now?
Yeah, I feel actually some of the emotion rising and whatever. just going to go for it. I'll tell you exactly what it was like. Yeah, I was actually in Italy with my wife on her 40th birthday trip when the transaction closed. And that day I drank way too much wine and my wife and I got in an argument because we didn't realize that it was actually there was a I looked at my bank account. I pulled it up.
and we were having a glass of wine on a porch on the Amalfi Coast. And it was like, there's the amount. Later we're at dinner and we got in probably one of the worst arguments of our life. we're great, know what mean? Celebrating 16 years, life's good. And this is a while back, but like what it did is somehow there was so much emotion in that. Even the question mark of like, who am I now that I'm not?
this.
Gabriela Smith (46:48.298)
And you were young. mean, this is a few years already ago. So you were in your mid-
Probably 36 or something. The one, don't find your identity in your work. And then the question is like, I was like, okay, I have the world in front of me. I literally, I remember coming back, getting into therapy, but I called my mom and I was like, mom, do you have any pictures of me when I was a little kid? And I was just trying to be like, who was I before I became this hyper, you know, hyper driven. You said it well, and maybe you already pegged me, Gabby, but you know, I didn't grow up with money, but I did grow up with.
where academics, athletics, performance was praised. So I grew up kind of poor, but performance was praised. Those were probably my two drivers that I thought if I do these two things, I will then be accepted, not rejected. And what I didn't know all the time is that some of my success, unbelievable success in business, probably came out of a motivation that was driven by pain or by scarcity. So when some of those things are solved,
I reeled a little bit and got to work through it. I mean, the beauty of an exit, the beauty of a runway was having some time to just focus on becoming the kind of man that I want to be, the dad that I want to be, the husband that I want to be, you know, and who am I? I mean, we had some indefinites we did and I got to lead some retreats. And out of that has grown this passion for like on helping people navigate some of these things like with jail wins and like, do we lead a lot of these?
you know, retreats that are not like a moneymaker. It's just like helping people get clear and become. Here's the question I ask. And I know it's not all Christian audience, but who did God intend when he intended me? Like, right. If I believe that I was created specifically and amazingly and perfectly for something, I'm on a discovery to be like one. How do I become who that is? What is the thing? Yeah, it's anyway, there was the
Skip Johnson (48:45.256)
I got drunk and got in an argument, you know?
You know, but we're humans. That's the thing. It's we're humans. We are builders. We are creators. We're driven. We're passionate. We're all these things that I do believe God made us and wired us. And we're also among all that makes a beautiful things were imperfect and we're here to learn. And I do believe we're here to discover that one thing that God created us for. One of those things I think is, and I talk about this a lot and I'm going to say we said it in one of the other podcasts stewardship.
I feel like part of is passing the test of being a steward with what you have. Everybody need, whether you believe in God or not, you are still a steward of what has been given to you and it is up to you. And that is not only the money, the business, the customers, the bank accounts, the cars, whatever your kids, like I even mentioned your in-laws, your cousins, your aunts. If you begin in a position that in a position of
of impact within your family, within your business, your city. You obviously you've made such a great impact, Skip. And I will say, you know, even the people that will hear a real human speak because business, like I say, drives us to show your perfect side, vulnerability. We don't see that often and we need to see it more, which is why we want to talk to real founders like you, you know, and you with your background. It's just beautiful. And I really appreciate, know, and thank you for.
sharing that side. Everybody who's been on the podcast has shared very personal and intimate stories. So I think it's beautiful to even be able to speak them out because that is what makes us human. And that's what I love about all of this stuff that we do. So thank you for sharing that stuff.
Skip Johnson (50:30.267)
Thank you for having me on and getting me, you know, it's fun to, it wasn't all perfect, but you can get to share from that and hopefully, you know, someone.
Of course, of course. And before we close, I know you are with tailwinds right now. You guys are giving, you're doing retreats, advising who would be an ideal person to participate in what you're doing right now.
Yeah. On the business side, I would say it's those business owners that have reached some lid of complexity. I call it light water. Like you're going along, things are good, they're fun. And then BAM, key employee quits or feels existential crisis. Like we help navigate some of that. How do you build the kind of business that can scale and be bigger than you? So love getting to do that. People can find me. You'll probably tag it. But find me on LinkedIn. I'll just be a resource either way. And then we lead a small
ministry called the River Bend Refuge and host a series of retreats. They're three or four day events. Come to Minnesota, come to our farm. We'll have 30 people we go deep with an awesome time. That's really, not professional. It's about getting the human healthy. And very frankly, I just, I'm a good host. We host and that shows up and does some cool work.
That's awesome. Well, hey, Skip, thank you so much for sharing. I am excited to see where you will continue to grow. Happy birthday. I your birthday is coming up and thank you for being here. Thank you.
Skip Johnson (51:52.974)
All right, thanks for having me.
Thank you for tuning into this episode of Exit-Ed. We are passionate about supporting founders at every stage of their journey, from scaling up to planning an exit. If you enjoyed this episode, it would mean a lot to me if you would leave us a five-star rating on your preferred platform. If you know a founder who would benefit from our insights or wants to learn more about exiting a business, let them know about our podcast, Exit-Ed. To stay in touch with us, you can follow us on LinkedIn, TikTok, and many other platforms.
We are building a vibrant community of founders. See you next time. Thanks, guys.