ScreamingBox Technology & Business Rundown | How YOU Can Successfully Bootstrap Your Own Startup To Success

In this podcast, Dave Erickson and his great co-host Botond Seres, are going to strap in for a learning session on Bootstrapping with Zach Oehlman, Founder of Learn And Grow Rich

LearnAndGrowRich.net is a comprehensive platform empowering individuals to achieve holistic wealth and prosperity.

Their mission extends far beyond financial success; they foster personal development, enhance relationships, broaden horizons, and inspire positive contributions to the world.

Prior to LearnAndGrowRich, Zach was Founder and President of No Limit Investing for more than a decade. Using his experience and passion in Business and finance, he used his skills in the investment industry to invest in small businesses and start-ups.

Based on the fact that most small businesses fail because of lack of marketing, proper planning, and process implementation; Zach worked with businesses that had good products or services then incorporated winning processes and marketing strategies into them - to scale up those businesses.

TIMELINE SUMMARY:

0:00 Bootstrapping businesses without funding, challenges and limitations.
4:41 Bootstrapping and cash flow management for business success.
9:17 Accounting, cash flow, and risk management for small businesses.
13:53 Private equity investing and business scaling.
18:25 Bootstrapping a T-shirt business with community engagement.
23:40 Ethics in business and leadership development.
28:45 Personal development and leadership skills.
32:51 AI, business, and critical thinking.
39:16 AI's impact on business, including automation, trust, and sales.
44:24 AI's limitations in creating valuable content and the importance of human interaction.
50:12 Entrepreneurship, business challenges, and human behavior.
55:16 Bootstrapping, AI, and community building in business.
58:14 The future of bootstrapping.
59:48 Outro

If you have questions for our Podcast Hosts or Guest, you can reach them here:

Dave Erickson = https://www.linkedin.com/in/daveerickson1/

Botond Seres = https://www.linkedin.com/in/botondseres/

GUEST: Zach Oehlman = https://www.linkedin.com/in/zachoehlman/

Website = https://learnandgrowrich.net/

Creators & Guests

Host

Botond Seres

ScreamingBox developer extraordinaire.

Host

Dave Erickson

Dave Erickson has 30 years of very diverse business experience covering marketing, sales, branding, licensing, publishing, software development, contract electronics manufacturing, PR, social media, advertising, SEO, SEM, and international business. A serial entrepreneur, he has started and owned businesses in the USA and Europe, as well as doing extensive business in Asia, and even finding time to serve on the board of directors for the Association of Internet Professionals. Prior to ScreamingBox, he was a primary partner in building the Fatal1ty gaming brand and licensing program; and ran an internet marketing company he founded in 2002, whose clients include Gunthy-Ranker, Qualcomm, Goldline, and Tigertext.

What is ScreamingBox Technology & Business Rundown ?

Join us for interesting conversations about technology and the business of IT.

Dave Erickson 0:00
Want to start a business? Want to try it without funding and bootstrap it yourself? Are you really this crazy? On this ScreamingBox podcast, we're going to show how to successfully bootstrap your own startup business. Please like our podcast and subscribe to our channel to get notified when the next podcast is released.

Dave Erickson 0:44
Bootstrapping means to start your own self funded business, but this can be one of the most difficult things to do in life. Welcome to the screenbox technology and business rundown podcast. In this podcast I, Dave Erickson and my great co host Botond Seres, are going to strap in for a learning session on bootstrapping with Zach Oman, founder of learn and grow rich. Learn and grow rich.net. Is a comprehensive platform for empowering individuals to achieve holistic wealth and prosperity. Their mission extends far beyond financial success. They foster personal development, enhance relationships, broaden horizons, and they inspire positive contributions to the world prior to learn and grow rich, Zach was the founder and president of no limit investing for more than a decade, using his experience and passion in business and finance, he used his skills in the investment industry to invest in small businesses and startups based on the fact that Most small businesses fail because of lack of marketing, proper planning and process implementation, Zach worked with businesses that had good products or services and then incorporated winning processes and marketing strategies into them to scale up those businesses. Well, Zach, it looks like you have some great experience with startups. Maybe you can start with your definition of bootstrapping.

Zach Oehlman 2:01
Yeah. So thanks for having me, gentlemen. And so how I would define bootstrapping is essentially having the company pay for its own growth through the cash generated by the company. And so that's, I think, the simplest form of definition I can get to.

Botond Seres 2:18
So Zach, I think that's the dream to not be sure how the saying goes, is it to pull up our bootstraps or get pulled up by your bootstraps?

Zach Oehlman 2:29
Yep, pull up your bootstraps, you know, it's like help, help ourselves, help ourselves. And so, you know, the, the challenge I always faced is A- I didn't know how to raise money, and so, and then I found out how to raise money, and then no one would give me money after I figured it out. And then it was like, I figured out how to get money, and I had people giving it to me. And then it was like, do I trust myself with it? Right? My, my skill set, my confidence and all of that. And so what I did is I just outside of real estate. I've never taken outside capital. And so I've just, you know, through the math of finance, you know, I've just worked in, in with companies that I can generate cash to deliver the product and then just plow it right back into the company for the for the growth. And so I don't have to, you know, be dependent on anyone else outside of me and their their direction, you know, sometimes it's, it's, I love it, but at the same time, being a founder, it's like I have my own vision of the where this is going to go and if I can't operate on my instincts, you know, it's like, it's, hard because I've been in situations like that where, you know, I've been confined by other people's limitations, and their limitations kill the business, but they they don't care, or they don't, they don't see it that way. And so that's, that's why I like doing the bootstrap method. So I get the freedom to do what I want and how I want it.

Dave Erickson 3:59
Well, bootstrapping is never easy. On the other hand, getting investment is even more difficult, right? And I've bootstrapped several businesses. ScreamingBox was bootstrapped and, but that's more of a service company, which is usually easier to bootstrap.

Zach Oehlman 4:20
Those are all the ones I Bootstrap, right? I've service based, industry, education, consulting, stuff like that that require no functional buildings, you know, no no big machinery in even though, if it didn't, there's a way to bootstrap those companies. You just got to get more creative.

Dave Erickson 4:43
You know, a lot of bootstrapping is, you know, one of the definitions is kind of self funded. So it doesn't necessarily mean you start with zero. You may have your own money. You may have a little bit of money that you want to invest in a business. You know. If you have $5,000 and you want to start printing T-shirts, yeah, you probably have enough capital to start that. And then there's obviously Personal Capital, or the capital of other partners, people who join in the business. That seems to be pretty common for like, software products, where a couple of developers get together and they develop the product on their own time, and then they basically try to launch it. And you could probably get fairly far with bootstrapping, until you actually need funding, although some businesses can go a long way. Is that correct? .

Zach Oehlman 5:36
Yeah and so the biggest question you have to answer is, what's the math? What's the math of making money? And most people, I see, they have zero understanding of finance. They, they have they don't understand their income, their assets, their expenses, their liabilities, their variable costs versus fixed costs, and all these financial metrics that you need in order to bootstrap and make sure cash flow timing and all of these things work correctly to grow. And so what they do is they just sort of wing it. And winging it gets you so far until you start bringing on people, then you start bringing on people, and then they're winging it. And so, you know, you got three, two or three, four people winging it. And so if there's a clearly defined plan, and everyone's playing the same game, beating the same drum, going to the same end zone, and you have a financial plan, it's it's way it takes care of the anxiety, the stress, all that stuff that comes with being a founder, and most people don't know how to do that, and then most people can't afford somebody that knows how to do that. And so one of my secret weapons is I know how to do that. I used to do that in corporate America. That's what I was trained in, financial modeling. And so I can literally model out a scenario where I make 600 calls a day. What does that do for my business? How many? What's the conversion I took from calls to sales, from sales to, you know, expenses, from expenses to net profit. And then, so I know what activities to focus on. And then what we do is we just tighten up that, that process, and try to maximize the, the income out of it, and most people don't know how to do that. And so I think learning, understanding business is, is to understand finance. Because finance is the, how would I say it? Finance is the dashboard of all of your decisions, right? And so if you know how to interpret that dashboard, you can make better decisions.

Botond Seres 7:41
So I can't help but wonder what you think about this, like, like my personal opinion, which is not based on facts or studies, I think cash flow is, like, one of the most important aspects of being able to bootstrap any business. What I see time and time again is someone goes to the bank, gets a massive loan, and then starts winging it, as you said. And what I feel like it's much, maybe safer, or just much more measured approach, is to have a constant set, constant set cash flow, and just dedicate some percentage of that to bootstrapping a new business entirely, or perhaps just the new segments of the existing business.

Zach Oehlman 8:35
Yeah, and so I would agree, cash flow is, I mean, you know, if you got something like Uber, you're, you're burning cash, right? And, but that's, that's totally, I would say that's not the norm. And so, you know, I talked to a lot of people, and they're like, that's who they think they're going to be. And I'm like, That's not you. I started to break, you know, break. But like most people, they just need to make the money, and they need to understand it's all cash flow. A business is valued by cash flow. Cash flow is what pays the bills, and so you can have income, but if it's all receivables, I work with a lot of people that have heavy receivables, and if they don't get paid, they're going to go on a business. And so understanding the time.

Botond Seres 9:18
I hate to interrupt, but can you elaborate a bit on the difference between cash flow and risk?

Zach Oehlman 9:23
Yeah, and so there's in accounting, there's what's called cash basis and accrual basis. And so cash is you register it when you actually that, the, the money exchanges, hands right, accrual basis record accounting says, Hey, I made, let's say, a million I had an order for $100,000. I extended them 30 days to pay me. So I deliver the product, and then they have 30 days to pay me. So I put the time into the product, the time into the cost, the time into the shipping, the time into the delivery. I now get $100,000 on my income statement, but I have zero in the bank until they pay me.

Botond Seres 10:07
But does that not make receivable a liability?

Zach Oehlman 10:11
Well, it's an asset on the balance sheet, and so on the balance sheet, it's an asset and it's a liability if you didn't do your homework, right, and you extended credit to someone gonna pay you, right? And so, so you know the age of your receivables, the quality of your receivables, because essentially, what you're doing is you're extending credit to your person. And so from an accounting perspective, it's an asset, but it could very quickly turn into a liability and write it off,

Botond Seres 10:41
Right and I see that more often, and then I would like to see that for small businesses, especially.

Zach Oehlman 10:48
And so that's why like the service based businesses. There's no extension of credit. It's like, you pay me, and then we work. And so in the service based business, it's so easy to bootstrap, because you go and sell the vision, you get a contract, and then you hire the team to build it, or you're the team that built it, and then you, you, you can bring on people. And so that's how I did my financial services firm. I'm very great at finance. I I went, I found a team of bookkeeping accountants. I said, Hey, will you work for me if I get business? They're like, absolutely, went and started driving business, and they do the fulfillment of it. So I'm the front end white labeled aspect of, you know, the marketing and sales and communication, because in the in the tax world, you know, CPAs and bookkeepers, they don't have the best skill set in communications, and so we bridge that gap with our side, and then, you know, we pay them a fee, and we increase that fee for our customers. So it's a very simple little model.

Dave Erickson 11:52
It's very similar to what we do. We're providing services for developers, although they tend to be two different types. One could be team extension, where it's a monthly extended contract and it's almost more like a position. Or it could be more of a project, where we're assembling a bunch of different people to make a project. And yes, your liabilities are less, you know, you do extend some kind of credit at some point in that because, you know, usually payment is upon delivery, but yet you owe the developers money at that point, you hope that the client pays you, so you can pay the developers. And yes, I think you're right, it's actually easier now to start a service business. There's a lot of tools out there to help entrepreneurs start a service business, but that's kind of part of the problem is. Seems like everybody's starting a service business, especially the people who don't really have any experience in running a service business. And on the surface it may look easy, but once you get into it, it's not so easy, keeping everyone happy.

Zach Oehlman 13:02
Yeah, it's, I see so many people specifically in us, you know, the, the marketing aspect of, of business, because you don't, you just need the skill set of it. The challenge is, I see these, these people, they have zero experience, and they're selling themselves as if they do and and so if you just become a professional at whatever it is that you you do and you can deliver on the promise, it's easy to make money, because most people out there over promise and under deliver all day long. That, the reason I started my financial services business is because I could not find a CPA or a bookkeeper that could keep up and get accurate books in a timely manner. And I haven't met one person that is happy with their CPA or their, their bookkeeper. And I'm like, Okay, that's a superpower of mine. I'm great at finance. I understand operations, I understand sales, I understand marketing. I've been spending 20 years doing it. You know, I had to learn each one of those myself. And so I understand how to run, run a team. I understand how to put all those things together. And so what I can do is I can come in and I can find a great business, a great product, or just somebody that I truly believe in, and then I can put my wrapper of finance, operation, sales and marketing around them, and that's what I do in my private equity firm. I find great people that have great products or services, and then I come in and I say, okay, hey, let's get your finances in order first. And then once we have your finances in order, if I like them, I'll invest in you to scale this thing out, and I'll pay for everything, and I get a piece of the company, though, and people, they they they're waiting in line for it because they're exhausted running a business, because they don't have the skill set, they don't have the bandwidth. They don't know how to hire people. They don't know how to systematize stuff, they don't know how to document stuff. They don't know how to fire people. They don't know how to manage all that. And I've spent, you know, my 20 years learning all that stuff. And so I come, come in, and it's like, I can do it in my sleep now and and so I've, I love the business model that we do is, you know, where we, we bootstrap the private equity aspect of it.

Botond Seres 15:18
What do you mean exactly by bootstrapping the private equity part?

Zach Oehlman 15:21
So I don't actually invest money into them when I like I because when I take on a

Botond Seres 15:27
so you just help people to find it in their budget.

Zach Oehlman 15:31
No, I bring in my team. So I have, I have a team of ads people. I have a team of operations people. I have a I'm in a whole AI team. I have a team of sales people, and I have a team of so I have a team. I break up a business into four quadrants, finance, operation, sales and marketing, and so we get your finances in order first I have a team that does that. And what I do is I have them pay me to do their books. So I have them to pay me to do their fractional CFO, to do their bookkeeping, to do their taxes. And now that I'm in their books, I can determine is this a business I want to invest in, and I'm actually getting paid to do my own due diligence, right? And so if I like it, we have a conversation. What we do is, then we bring in operations, we document the operations process, we then we move the sales, document that process, bring in whoever we need to bring in. And then the last one is we turn the marketing up and make sure that the, the everything that comes in is, you know, it the sales is running on point operation and on point. And then we get the feedback loop through our financial dashboards. And so I get paid to scale companies that I have ownership in because of the, how I've set it up. And so I don't have to, I'm not going to write somebody a check that has no idea what they're doing, and they would just, what are they going to do with it? They don't know what to do with it. And so what I do is I just pay my internal team to come in and build the systems, process and structures. We use the same software stack. So we're using go high level, we're using click up, we're using Slack depend and then we're using QuickBooks. And so everyone's trained on those things. Obviously, there's, there's specific softwares for different businesses, but the main software stack,

Botond Seres 17:14
I'm not sure everyone understands what's how, how great some of the software you just mentioned. Yes, like Slack is, is S Tier, and so is QuickBooks as well. It's an amazing quality.

Zach Oehlman 17:27
Yeah, totally. And so, you know, once you understand that stuff,

Botond Seres 17:33
There are still people out there using Skype.

Zach Oehlman 17:35
There's people out there using this it, I mean, oh my gosh, there's people out there using all different types of stuff. And, you know, the key is, I think you have to ask yourself, what's the intention of the software, and does it deliver on it, and then stick to it and go because it's so easy. I mean, the CRM world, you could get lost in it. So we use go high level. I transitioned over from Infusionsoft, and we, all of our teams, gets trained in it. And so that way, what I'm doing is I can have one person working for three of my portfolio companies, right? I got, I got the ads person running ads for all the portfolio companies. I got the operations person right. So we just, we, we sell our excess capacity. And so that way, when it, when I bring on a new portfolio company, it I'm actually getting paid to scale them because of the business model, and it works out for them. I'm saving them money, like one of my clients today, we're probably going to end up saving them close to $30,000 a month by just asking the right questions. Do you need that person? Do you need that? Do you need that? Do you need that? Do you need that? And they're like, no, no, no, no. Can we change that for this, like, cost savings? But if you, if you don't have somebody on the outside looking in, you know, I pay for coaches, just like people pay me. So, you know, questioning, why do you do that that way? Well, we do it that way, because we do it that way. Well, that's not a good answer, right? It's like, Could you do it this way and make more money, or could you do it this way and save more money? Could you do it this way and save time and until, until you have somebody asking those questions you don't know.

Dave Erickson 19:12
With bootstrapping, if you were to start a business, say you're going to do a T-shirt Company, and you were going to, you know, do on demand T-shirts. And you don't really have a budget, you don't have any capital, but you have a bunch of design ideas, and you know how to use design software so you can make some designs. You say, I'm going to join, I'm going to start a business. I'm going to bootstrap this myself. I have a little bit of cash, I can pay for a few things in your process, or in what you're talking about, as far as bootstrapping. What advice would you give such a person in starting their business, what is kind of the sequence of starting such a business? What do they need to look at and what do they need to kind of set up and prepare?

Zach Oehlman 20:00
Yeah. So if I was due to do a T-shirt Company, this is how I would do it. I would pick a specific type of T shirt, maybe, maybe something that, you know, people like animals or Star Wars, or something that the fans are fanatics about Disney, right? So it's like, okay, find something that the, the buyers, the potential buyers, right? They're, they're excited about it, and they're, they're followers. And then I would do as I would go start like, a free social media account for that, and I would start a community. So let's just use Facebook, because that's an easy one. I would start a Facebook group, let's say on Star Wars. And so if you're a fan of Star Wars, join my Facebook group. Yada yada yada. And so what I'm doing is I'm building the community that I'm going to sell into zero money, right? And so I'm, I'm, I'm just going out there. I'm promoting my Facebook group. Maybe we have Movie Night, and, you know, I would find ways to get people engaged and keep them engaged, and have them know me. And then I would, I would kick off the idea and say, hey, you know, thinking about running this T-shirt. So I'm soft selling right now. Think about, you know, starting this T-shirt for everyone in our group, you know. So, because people like to be part of something, right? And so understanding human emotion. So, a ,you know? And so we have these T-shirts that are coming out. Which ones do you guys like best? So now they're being part of the decision making process. So I'm including them, and, you know, and so we're including, would you buy this? Would you buy that? And so we're already, already getting buy in before we even spent a dime. And so then whatever the feedback is from the market, and this is where people mess up. They think they know what the market wants, but they don't, because they haven't asked. And so I was just doing, watching a training or a video on a company that did this with mattresses, and they sold like they had 3000 mattresses sold before they even, before they even started manufacturing the mattress, because they took the time to talk to their clients. What do you want? What would you pay for this? What you know? What are the things that you don't like? And then they went and they took that feedback. And so it's no different here. You have to figure out who is yours, who's buying your stuff, in this case, a T- shirt. Well, there's enough T shirts out there. There has to be a brand. Or, you know, maybe another T-shirt idea would be like, Hey, we give 5% to all. If it's an animal, you know, pets, or pet lovers out there, they spend money. And so maybe you say, Okay, I'm starting this pet Facebook group and, and, you know, it's like, what's your favorite dog, what's your favorite cat, what's whatever it is pet people talk about. And then you go, Hey, I'm starting my T-shirt. Every T-shirt I sell, 5% is going to go towards a cause to help spay and neuter dogs or give back to the cause. And so now A- the people are being part of it. You're creating community. They already have buy in, and they're making a difference in the world, in something or right? Then you make the sell, and then you drop it in your Facebook. Hey, you know, my first 20 people get 50% off, right? And, you know, take a picture of it now. Okay, they bought it, take a picture of it with your dog, and post it here. Oh, my God, look. Look at that. Cool. Who else wants a T-shirt? That's how I would do it with and you have zero ad spend right there. And so what you do is you could set like it's so you collect the order before you even buy the stuff. And you would that would be a zero money out of pocket bootstrap for a T-shirt business.

Botond Seres 23:37
So in summary, just crowdsource everything. Is that about?

Zach Oehlman 23:42
Yeah, I mean, if that's the word, you want to use it, right? Because the crowd is, who's the market, the buyer, the crowd is the buyer. And so if let them tell you what they want.

Botond Seres 23:52
Well, I would say Market Source it, but what's that? It's I would say market sources. But the crowd source is more if

Zach Oehlman 24:00
you look at it, that's capitalism, the definition of you let the market decide what they want, right? You don't tell them what they want. You let them decide, and then you go make it for them and sell it to

Botond Seres 24:14
them. I mean, to be fair, in some cases, some companies do tell people what they want, because, let's face it, in some cases, we have no idea what you want.

Zach Oehlman 24:24
And so in other instances, you pay somebody like me, a consultant, to say, this is what you need, because they, they're absolutely and so, and that's why I think ethics plays such an important role inside of business. Because, you know, capitalism without this is what my saying, capitalism without ethics is chaos, and, you know, and so if, if that's why I think capitalism has gotten such a bad rap, because the capitalism works when you have ethics, when you don't have ethics, you end up some of the stuff we're seeing to. Okay,

Botond Seres 25:00
Having the only Prince, only guiding principle of a company is to give shareholders value that company is lost, Right?

Zach Oehlman 25:07
Yeah, I mean, if they're, if they're willing to do whatever, lie, cheat, chill, steal, manipulate, you know, they, you could be following all the rules and all the laws and still have a bad company, because the ethics are, are not there. You treat people badly, you know? And so I've come for, I mean, that's why I'm an entrepreneur, I think, is I was in a, my first real corporate job. I hated it. Hated it. There's people crying on a weekend basis.

Botond Seres 25:36
Anyone love their corporate job? Exactly? Do you think anyone loves that corporate job?

Dave Erickson 25:42
I mean, people all the time. My wife loves her job, and she's, I would say, Yeah, 20 years but yeah, and she believes in their mission. They're a biotech company providing medicine. So she,, she loves working for them. They treat their people really well. But I've also worked in corporate and yes, it's very easy for large companies to basically treat people like machines and you know, all it takes is one bad boss who is abusive and to ruin the experience for many people under him. So you know, those are the dangers of those things, but they're also an experience that you can bring into your own business, right?

Zach Oehlman 26:23
But if, if you think about it like this, this side thing about both hand is, I have employees, I'm corporate America now, right? I mean, as soon as you hire somebody, you're now corporate America.

Botond Seres 26:38
To be fair. Zach, when I think of corporations, I think, like, a million plus employees.

Zach Oehlman 26:42
you can change your definition of it, what whatever it is, but the fact is, you're, you're working for somebody, or you're working right. And even me, I work for my clients. I'm a business owner, but I still work for my clients. And so it's, it's call it business. Call it W-2 Call it whatever you want. It's making the art of making money. And so what I think pollutes that is people aren't trained how to be a leader. People aren't trained on how to manage conflict. People aren't trained in how to have uncomfortable conversations. And so that's what creates the weirdness and the uncomfortable aspect in these businesses. And so what I do to, to get into the forefront of that is I hire coaches. So we have coaches that you know, 40 plus people on a call twice a week or every other two weeks that says, Okay, what's not working in your life? What's not working at home? Because if it's not working at home, it ain't going to work here. And so we teach people how to understand their emotions, how to verbalize their emotions, how to understand themselves and understand what they're dealing with. And that has created such an environment where people feel like they can be heard. They can, they can speak up. They can be heard. They can be themselves. And you know, at the end of the day, we have to produce. We don't, we just get to sit around. And so what it does for me as a leader is it helps me have those difficult conversations that most people would consider difficult, because my team is prepped on how to receive difficult information. I'm trained on how to give that information and, and so I think that's the challenge is, is a lot of these, these leaders that get managerial positions, they don't know how to lead, they don't know how to inspire, they don't know how to manage people. And so they're doing their best. It just so happens that their best is crap.

Botond Seres 28:45
Yeah, I don't know when it became normalized to just have zero to no managerial skill, experience or education and just become managers. Like, if you want to be an engineer, you’ve got to have an engineering degree, right? Why is there not a managerial degree? I mean, of course, there is. Why is it not a requirement?

Zach Oehlman 29:07
Because I think is the cost to develop a human into a leader. I've spent way over a million dollars on myself, on coaching, education, trial and error, you know, and and I've also spent money on team members, like my own money or and,

Botond Seres 29:26
You know, even if we don't go as extreme as you even, I have spent, like, tons of money on it, just buying audio books, 100s, 1000s of hours going through them, trying to implement all these things is just an astonishing it cost to develop leadership and just interpersonal skills in general, or even just self development, I guess, is the catch word that's very expensive self development. This

Zach Oehlman 30:00
Totally, self development, yeah, like, I have a coach I meet with twice a week. And so I'm, I'm, it is a lot. Oh, it is a luxury, and because it cost me. I mean, I've paid $1,000 an hour for coaching before, and so, like, I put stuff on credit cards that's crazy. Went for coaching and development and helping me become better. And so I know, I know the path that people are in, and that's why, when I hire people, I ask them, I say, What? What program are you in? What do you do to manage yourself? Right? Because if they're already in that conversation, I can teach them the two plus two skills. I can teach them finance. I can teach them sales. I can teach them marketing. I can teach whatever, but if they don't have the personal emotional skill set on how to manage themselves and how to, let's say, manage other people, the skill sets I don't care like because you're going to end up pissing people off, right? People aren't going to want to work for you, and you could be the smartest person in the world. And I've dealt with some very, very smart people that they're so they're interpersonal communication, their interpersonal skills are suck, and nobody wants to be around them. And so if you can't deal with people, you're, it's, it's hard to make a lot of money because,

Botond Seres 31:19
I mean, I do think it's a very well established fact in the field of psychology that intelligence and just being, having terrible interpersonal skills goes hand in hand, like the majority of the time.

Zach Oehlman 31:34
That used to be so I used to be very so I was a financial modeler, financial consultant, very high end financial theoretical billions dollars like stuff. I valued software, humans like, just some really abstract stuff. And I was socially awkward. I was the most probably socially awkward person I know of this day I would break out in anxiety. I wouldn't talk to people. I would sweat. My mind would go blank, and I just wanted to be alone because I was afraid of other people, and so being a financial consultant that sits in the office all day, building financial spreadsheets and projections and 300 page reports that fit my comfort zone, and I had to, I had to force myself to talk to other people. I had to force myself to go to do this stuff that was going to better my life. It was scary as heck, and it's still there, like, it's still it doesn't ever go away. It's just I know how to manage it, and it doesn't run me today.

Botond Seres 32:34
Yeah, a big misconception is that stuff like this gets easier. We just get used to it. Well, that's,

Zach Oehlman 32:41
You know, people ask me. They're like, Zach, does it get easier? And I'm like, No, it gets incredibly harder. You just get better. Yeah. That's, I mean, that's it. There's, yeah.

Dave Erickson 32:50
I mean, I look at it, you know, when we started ScreamingBox 11 years ago, even though I had other businesses and managed people, I wasn't used to managing large teams of software developers, and software developers have their own personality quirks. (Oh, totally, right), and that's one of the reasons why we do personality testing. It took us several years to develop good personality testing, and then we learned, okay, it's great to test the developers and know who they are and understand them. And I learned a lot from that feedback and under, you know, doing that, then we started realizing, okay, let's start testing our clients and matching up the personalities of the clients and the developers to get teams that flow better together. So understanding those personalities, matching them up and getting the right people really helped the business and helped eliminate a lot of problems, but it, you know, it was a learning process. And after, you know, 11 years now, I can say I'm, I'm good at leading teams that I've, you know, looked at, and I know their personalities, and I know what personalities don't work with me, right, right? And so I can avoid your teams with those people in them, right?

Zach Oehlman 34:06
Yeah, you know yourself. And I think understanding people, you know, I've had some very skilled mentors that have, you know, billionaire status, and they're always like, your, your problem is going to be people guaranteed, right? I mean, because, if you think about it, people are really everything. I mean, we can automate stuff, we can systemize stuff, but at the end of the day, the person is the end buyer, you know? And this was even something I was thinking about with AI the other day, and I said, Well, the reason, you know, the reason we have economy is because people, because people, right the, you know, I forget the economist term of it, but like skilled labor, like, where you focus on one thing to make, so that I don't have to be, so we don't all have to be a sustainable farmer. It's like, well, I'm going to be a farmer, you be a tax accountant and you be a haircutter, right? And so we all have specialization of labor as a word, and so, but we do that because we as humans need food, shelter, you know the necessities? When you bring in this conversation of AI, it's like, well, what's the intention of AI at the end of the day is to serve right now, at this time, it's to solve a human problem at the very end of this the solution, right? And so it's just a, it's a fun thing to think about, right? It's like, because there's a lot of great technology coming out, but it also gets, you know, if you, if you go down the wrong hole, it's like, what that could be scary, right? And so it's..

Dave Erickson 35:45
I mean, as far as the bootstrapping world is concerned, some of the AI tools that are being developed and are already developed, I'm sure, are really great for somebody bootstrapping a business that allows them to do a lot more with just one person, right?

Botond Seres 36:01
Yeah, they're fantastic, yeah.

Zach Oehlman 36:02
I mean, we, we have a whole, I'm building out a whole team. I want an AI finance department like, I want AI and everything. And now does that gonna, but we still have to remember at the end of the day, we're here to serve a human right, because A, I mean, we're gonna have to get far out there for AI to be my customer, right? I mean, they would, they would have to have emotional needs that need to be met, right? I'm not saying it's not going to ever happen, but, you know, it's, it's, it's, if you understand business, you understand we get paid when we solve a problem. What's the problem? Right?

Dave Erickson 36:39
Yeah, yeah, we have, we have aI developers, and a lot of the, the problem that I'm seeing in AI is that clients are misunderstanding AI to be something that actually thinks, right? They think that the AI actually thinks, and they don't understand that the AI is just a productivity tool, right? We had a guest on, we were talking about it. I think he came up with a great kind of understanding, think of AI as just a great intern, right? But you wouldn't hand an intern, hey, let's make a financial spreadsheet using this data set and give me a summary of it, and then you just hand that to your board of directors. No, you, you would want to look at it if an intern did it, and make sure they did it correctly and that they were actually using real stuff and and people forget that step. They just think, oh, whatever AI gives me is real, you know

Zach Oehlman 37:40
I see that as a real problem right now, and people are losing the power to critically think. And you know, I was just on another podcast the other day where they were, Abraham Lincoln says one of the hardest things to do is think, which is why very few people do it, like some something like that. And I love thinking I saw, I love going on walks, and I love, you know, but I was forced to think in my financial modeling career, like it was, I just like, what happens if this? What happens if that? What's happened with this? That, like, I had to play through 10 years of financial projections and make sure everything balanced out. And so there was a lot of critical thinking that. And then I just, I loved, you know, once I understood how to learn, I took this beautiful, classical genius in 21 days, which is now one of my portfolio companies, it taught me how to learn. And so then I was then, then, the, the skill set of thinking became fun because I knew how to think better. I knew how to think clear. I knew how to organize my thoughts. I knew how to do these mind maps. I learned how to retain stuff. And so it's, it's much funner when you have the, the process of how to think and how to, how to learn. But most people have lost that because they, they put it all back onto this. This AI piece of it, and they don't know it's like, this is another thing I see in business, is people understand the puzzle pieces called sales, marketing, click through rates, you know, all these vanity metrics. They understand the components as a puzzle piece, but they don't know how to put the puzzle, the puzzle together. And the only way you can do that is through experience. Like AI is not going to need to be able to give you their experience to make that judgment call.

Dave Erickson 39:25
Yeah, it can make you slightly more productive, is how I look at it.

Botond Seres 39:31
To circle back a bit to AI being an amazing pool for bootstrapping, I just realized this, like yesterday, I managed to get the domain of my company name.com now, a huge step in bootstrapping in every company's life, and I just realized I no longer have to create my own logo. I don't have to hand write the entirety of my introduction text, and I don't even have to create my webpage. I can just go, like, go to some AI company, pay them a trivial fee of, like, 20 bucks for a month and get all of this done. I mean, of course, at the end, I'm gonna need to touch it up, but we'll need to match the text to the logo, match the logos the company. That’s a huge help.

Zach Oehlman 40:21
that that could cost the 1000s of dollars, huge help, and weeks, yeah, previously, and so it's

Botond Seres 40:26
…months even, like, and the craziest thing is, like, I know, especially logo design, like I used to love to do graphic design. It's always a huge, massive pain. It, It took days to just get a single revision. Like, Hey, can you just do this line slightly to the left or anything like that, Days?

Zach Oehlman 40:50
My wife’s an artist, so I give I hand all that stuff off to her.

Botond Seres 40:55
Oh, that's nice. Yeah, I

Zach Oehlman 40:56
get that. You get it? I had

Dave Erickson 40:57
My young daughter. She wanted to have a kind of a design on a T-shirt, and I set her up with Dolly and let her play with Dolly for a while. She got really good at engineering some prompts that got her exactly what she wanted, from a design to the 10 year old girl. And when she got a design that she wanted and that she was happy with. After I don't know, two hours of playing, she made a bunch of different designs. She got the one she wanted. This is what I want for a T-shirt. So I just set it up, and we ordered these iron on transfers, and printed it out on the printer, and she ironed our shirt. Looks like a professional T-shirt job. And she wears that shirt all the time, because it's her design, right? Even though AI did it, she gave it the guidance, and she got whatever she wanted. If a 10 year old can do that, that's pretty amazing technology, right?

Zach Oehlman 41:53
And then, and so I see the, you know, in the world of economics, right? The easier it is, the cheaper it's going to be type stuff. And so I see this stuff being incredibly inexpensive going forward, but high value, right? High Value, inexpensive. And so then it's like, well, where, where should I develop my skill set in? And so I'm just, you know, it's like, and I see this happen a lot with bootstrappers, you know, Botand they, you know, you were like, Hey, I go down to the bank and I got 150 grand, right loan, but I don't know how to sell. I don't know how to make money. And if, and I was that person, I was like, I was in finance. And I was like, well, I should be rich. I understand finance. And then, you know, it's like, it wasn't working. Like, why isn't this working? It's like, oh, because sales and marketing. And so then I had to go. I had to go. I went and became an expert at sales and marketing, and I love it. And so I see a lot of people, they create a brilliant product, a brilliant something. They're just brilliant people, but they, they suck at sales and marketing, and it dies, right? And it dies. And so, you know, can you use AI for sales and marketing? Absolutely, as an as as a tool to help you do it. But more and more, what I'm seeing is, and this is what I really specialize, is building communities, right, like having that trust relationship. And so there's this great book called The Power, or the Speed of Trust. And I think the market, you know, the quote, unquote market has lost a lot of trust in certain industries, in certain in certain regards. And so if you can build a place that is trusting, and you know, we really stand on our values in our business, it's intention, personal, responsibility, integrity, dream big, and do do the work. And so when someone, when Zach, says he's going to do something or be somewhere, I'm there and I do it, and that builds trust, right? And so it's way easier to sell in an environment of trust, right? And at the same time, like I'm making sure my client needs what I'm selling, which, again, builds trust. And so I think as we move into this next era, the, the ability to make something, the ability to craft up a service or a product, is going to be incredibly easy with AI. The question is, is, can you sell it on a, on a consistent basis, to create a brand, to create a following, and that's when this thing really takes off.

Dave Erickson 44:23
Yeah, I see that with a lot of the AI spamming that's going on right now. It's a popular marketing thing where basically your email fills up with all these, Hey, Bob, I just wanted to connect with you. And, you know, I mean, I can see it, and I studied how to do all this, and I've looked at all the different things, and we've actually been asked to implement it for clients, but I can see the pendulum swinging, meaning it was effective a year ago, but now it's not effective, because anyone can recognize, oh, this is just some AI spamming me. I don't. To talk. It's not a real person.

Botond Seres 45:01
Do you guys also get those weird messages that are in English, but not really in English?

Dave Erickson 45:08
They've gotten a couple of those. Yeah, yeah,

Botond Seres 45:11
Right? Is that AI?

Dave Erickson 45:12
I think it is. You know. Again, it comes back to this. AI is a good intern, but if you don't review it and you don't look at it. And I mean, we do a bunch of marketing, and we use AI to do the marketing, because instead of spending four hours to write, you know, 1000 word article, we can spend an hour and a half, but we still got to spend the hour and a half to write a bunch of stuff in it, to correct whatever was done, to get the voice and the context into the article, because AI is really bad at that, right? No matter how good you are at engineering the prompt, you know, it'll put out some stuff that's good for, you know, a keyword SEO type of thing. But if you're trying to write something that actually has value and meaning to the person reading it, you have to do some work. So AI can do a bunch of it, but you still have to go in there and do the legwork of making it real.

Zach Oehlman 46:05
So if, and I love this conversation, right? Because it's like AI is getting so inexpensive, everybody can do it, what happens when everyone can do it? Everybody does it, and then it decreases the value of doing it. And then what happens in my experience is it just becomes so much data that the consumers can't bring in all that data, and they get overwhelmed. And what I've seen, because I've ran communities, so I have a real estate investing community, over 1000 people have been doing it for, like, 10 years, and so I get I've literally laid stuff out step by step by step for people, and they don't get it because they they want that, they desire human interaction. They desire like, the human connection. And that's one of the reasons I started doing these podcasts. I've been traveling the world for four years, 23 countries, full time, and I don't get a lot of interaction with people outside of the people I'm on Zooms with. And so I was like, I desire some intellectual, stimulating conversations about business and philosophy and people. And so I started, let's reach out to the people, right? That's how I ended up here. And so I think, you know, in this world that we're, we're progressing into. I think, like you said, Dave, the pendulum is swinging so far to the other side. And then the other thing you gotta think about, most of these people are going to quit. I've been doing this for 20 years, most people are going to quit. They're not going to create something. They're not going to perfect themselves in a skill set, in a craft. And so if you're just saying that, long enough and you and you build a brand around who you are and what you want to be in the world. Everything I do in the world is to make a difference with other people, and it's, it's and so people feel that, and they want to be around me, and they want, they want to do business with me, and they want to come on. I mean, we're doing getaways to come down here and ride motorcycles in Columbia, and I'm charging people to do it because they want that experience. And so that's, you know, it's just something to consider as you're bootstrapping a business. It's like, you know, don't if you're doing it for money, oh my gosh, my experience like the money, you know, you hit, you hit your first $10,000 a month, and it's like, oh, this is awesome, but then you might lose your momentum or your fire. But it's, I tell you today, the fire I have, it just keeps getting brighter every day for what I do

Botond Seres 48:29
I feel there's this saying that you need to go for 10,000 hours to be proficient. As you said, most people quit. And I feel like most people quit before that watershed moment when they do become great at times, (absolutely agree). And this just that's perfect, that's totally normal.

Zach Oehlman 48:47
And so if you have the grit and, like, I was over in Bali, and I was talking to some very successful people that own the resort I was at, and they're like, What do you look for in when I hire people? And my answer was, like, grit, like, I just want someone that can handle hard things. And so like the people I have on my team, they're all, almost all of them are out of the United States, and they've had to endure some what one might think, incredibly hard times. But for them, it was just a way of life. And so I look for people that have had to endure hard things. I don't care what their degree is in. I don't care what like my head of operations right now she got sent she's in Columbia. She actually lives right down the road from me. She got sent to America with two months worth of income that her mom saved up for her, not knowing English. Had to get a job, had to learn English, had to do all this other stuff, and she stayed there for six years. There's not like, if I was stuck somewhere, I would like, whenever I have a problem, I call this person. She figures it out, because she has the, the critical thinking capacity to go. Where are we going? What's the, what are. My pieces here, and then she just figures it out. And so because, and she has no, like, formal education in any of this, she just has life skills, and that's who I look to hire, is like someone that can endure hard stuff.

Dave Erickson 50:12
I mean, for me, I've had several businesses. Some have been very successful in the last decades. Others have, you know, failed quickly, right? The ones I always remember, and the lessons I always remember are the failures and the ones that were difficult, right? Like, you know, you're in a business and your partner just screws you and steals a bunch of…

Zach Oehlman 50:35
I've been there, man, I've been locked down. Of all my software. I've all my money, so all the money in the bank account stolen. I've had people, oh my gosh, you name it, I've had it done to me, yeah, or the word,

Dave Erickson 50:45
You know, you got funding. The investor pulls the money. You have to fire all your employees and shut the business down, one of the most miserable things I've ever had to do, but it's one of the most valuable. I learned so much from going through that hell, right? That it made it so that all the businesses afterwards, I've been able to avoid that situation and avoid similar situations. It, it's those failures that are good. But part of that is that, that concept, and that's especially important if you're going to start a business or bootstrap a business, you gotta be able to suffer. You got to be able to suffer and enjoy it. And what I mean by that is, is that you still got a life. You're running a business, and if the business is sucking and things are just not working and it's a struggle, you still got to be happy enough to be able to go to your wife and kids and still have a be positive person and live your life in a way, even though horrible things are happening to you at work, right? And it's hard for business people and entrepreneurs to separate those things, but that's one of the skills I learned by going through suffering. And if you don't, you create a way of, of still being happy.

Zach Oehlman 51:57
What do they say when you're going through hell? Keep on going, totally man.

Botond Seres 52:02
Or alternatively, you can just become completely psychotic and enjoy this well.

Zach Oehlman 52:08
And so I have the training that I have, it teaches you context, like suffering is a context, right? And you can just change, you can change context in a moment. And so instead of, oh, the world's, I mean, you know, it's like, you get what you look for. And so if you're like, Why is everything always going wrong? That's so true. That's what you're going to see.

Botond Seres 52:32
But it's called the confirmation bias, okay, okay.

Zach Oehlman 52:36
And so, like my coaches, she, you know, just change the context, right? And so when I like, I have morning calls, I get on the call with and some days, I like, I don't want to get on the calls because I got, you know, 40 people, and they won't ask a question, so I have to entertain them for an hour. And I, you know, I complain about it some days, and she's like, or consider it's just a step in the direction of where you want to go, and this is practice. And I'm like, oh, yeah, same thing. If I just change the way I think about it, I'm different. And now I go into the call saying, Okay, now I can, I can impact somebody's life on this call instead of the context of it's a waste of my time. And so that that's really helped me get through a lot of this stuff.

Botond Seres 53:17
And it's also extremely helpful to just remember that other people have lives that are just as complex and many faceted as ours.

Zach Oehlman 53:28
Absolutely. So that's why I love the study of humans, because that's all even finance. So I was in finance, and, you know, everyone makes it about the numbers. I'm like, Well, who creates the numbers, humans. And so if we can understand humans, we can understand finance better.

Dave Erickson 53:46
I mean, a lot of the work that we do, the clients that we have, they're coming to us. They think this because they need a new website or a new mobile app, but those are never really the reasons they're actually coming to us; there's always a business challenge behind that, right? And, you know, with the amount of experience that we've had in different projects and running businesses and stuff, I'm usually able to figure out and work with them to get to what is the real business challenge, right? And that's kind of how we approach it, let's find the business challenge and then solve the business challenge. And yes, a new website might be part of that solution, or a new app might be part but that's not really what we're focusing on. And in business. I've done it in many different industries. We don't care what industry the client's in, and the reason for that is the business mechanics, the mechanics of how people buy things and get things, no matter what industry it is, those human mechanics are very much the same. The details are different, but people buy things for trust, for price, for, you know, emotional content, fulfillment, these mechanics are the same, whether you're buying a container of beans or whether you're buying a car, right, right? A lot of these mechanics play in and the way people do it are the same. And I think, as an entrepreneur and someone who started businesses, if you focus on the business mechanics, right, that's a good guide to kind of okay. What am I doing? How am I helping a person? How am I providing what they need? And I have found, personally, and maybe you are similar, one of the things I like to do is provide some benefit, either to the community or to society or to our clients, right? And I always try to focus on how can we help somebody, right? And that's kind of my mindset. But, you know, example in the T-shirt business, if I were to start a T-shirt business, you know, say, for animals, then I would obviously have some kind of, Hey, we're going to save a tiger, right? We're going to right like him. Part of, you know, we're going to give something back. Or, Yeah, I'll manage a community. I'm never going to make any money off of it. It's going to suck up a bunch of my time. But that's my way of giving back to people in a community.

Zach Oehlman 56:21
Well, I think, you know, one of our core values is intention. Like, why are you in business? Like, why are you making a T-shirt? Because if it's just to make money, I was like, I'm not inspired by that. I don't want to buy your T-shirt. But if you're, you know, if you're digging wells or saving animals or educating inner city youth, I'll buy your T-shirt. So it's like, what's, what's the intention of the business? And I think people, they don't understand that, and they go into business to make money. Pure, like purely to make money, and they lack the intention of, what's the, what's the cause, what's the, what's the problem you're actually solving? Because if there's not a problem, you're not a problem, you're not going to make money because people, people pay, I mean, that's, I mean, that's the origin of money, is I got a problem? What do you have? Oh, I'll exchange this for that. And, you know, I think if people really, and I did this myself, studied money like they there's this book called The history of money, and there's this other one book called thou shalt prosper, the ten commandments of making money. Those are two of the best books I've ever read on money. And it was like money used to be a commodity like corn and beans and cacao, and then it trans, moved into shells, and, you know, rocks, and then then the metals that we know it today, and then eventually Genghis Khan leather bills and paper bills and but I talk to people and they don't understand what money is and so if you don't understand what it is, it's really hard to make it. This is my experience.

Dave Erickson 57:58
Well, the whole purpose of bootstrapping a business is, yes, you want to make some money, but you want to make money because you did something well and you help people, and that usually is what leads to money, versus I'm just going to do this because I can make money.

Zach Oehlman 58:12
right, right?

Botond Seres 58:14
So, Zach, what do you think the future of bootstrapping is?

Zach Oehlman 58:21
I think it'll always be here, like, it's like a law, you know, like, like, the law of gravity isn't going to go away, you know, bootstrapping isn't going to go away. It's a phenomenon. It's a natural, occurring phenomenon. The question is, is, how far can you take it right. And so specifically with the aspect of AI, it's like, what, what's going to differentiate you from the other people that understand bootstrapping? And I would say that is understanding community. And as more and more technology comes into the world. People have a, a bigger desire to be with humans, right? Other humans that interact with humans. And so I would say it's never going to go away and understand how to build communities inside of this thing called bootstrapping. And then you'll have people that will buy, I mean, we see it in influencers, right? They have a following that trusts them, and so then they can buy, they can monetize that following. Building a community is no different, but, you know, the stronger that relationship, many people call it a brand. I mean, there's different ways to look at it, but I would say that's what we're using. We're using AI, we're using bootstrapping to build communities, to garner trust, to garner that relationship, to give people what they need. So that's how we're using it.

Dave Erickson 59:48
Zach, thank you so much for getting in the weeds and bootstrapping on startups.

Botond Seres 59:53
Oh, good listeners. That's about all the time for this episode today. But before we go, we want you to think about this important question, are you ready to bootstrap your first business, or are you going through the funding route?

Dave Erickson 1:00:07
For our listeners, please subscribe and click the notifications to join us for our next GreenBox technology and business rundown podcast. Until then, put on your boots and strap them up for business.

Dave Erickson 1:00:35
Thank you very much for taking this journey with us. Join us for our next exciting exploration of technology and business in the first week of every month. Please help us by subscribing, liking and following us on whichever platform you're listening to or watching us on. We hope you enjoyed this podcast, and please let us know any subjects or topics you would like us to discuss in our next podcast by leaving a message for us in the comment sections or sending us a Twitter DM till next month. Please stay happy and healthy. You