“I’m a huge fan of having good role models in your life. That’s why I encourage people to choose the people they spend time with very carefully – we rub off on each other.”
“I’m a huge fan of having good role models in your life. That’s why I encourage people to choose the people they spend time with very carefully – we rub off on each other.”
Like many people, I grew up thinking I knew what I wanted to do. I was always interested in government service and politics. I studied political science and communications at college but, when I graduated, I could not find employment in any of those fields.
This was also pre-internet – it was harder to find opportunities. Now, whatever job you want to do, you can just pull up indeed.com and see every listing for it globally.
So, I called up a mentor of mine who I had previously interned for, and he offered me a job at his car dealership. I was there for four years before I got itchy along with my brother and decided I’d like to do this on my own. After a lot of dead ends and false starts, we found a bankrupt dealership in Massachusetts and we bought that. That was really hard to get going – it was out of business for a reason.
But once you get going in business, it gets easier to buy more businesses – you have plenty of cash flow; you have plenty of expertise; plenty of connections; if you need a loan, banks are more willing to lend to you. So we also ended up with a real estate business and some cellular tower infrastructure.
Around 2014 I retired. Now I’m trying to make up for all that lost time where all I did was work, so I have fun.
Lots of reasons – and they’re very idiosyncratic to each individual. Some people have the aptitude, but they can’t get the capital. I think that holds a lot of people back.
Another reason is some people are just at the wrong time in their lives. You can end up in a situation where you’re in a comfortable job. You’d like to work for yourself and start your own company, but you’re already making pretty good money; you’ve got a mortgage; you’ve got a couple of car payments; you’ve got two kids.
So for a lot of people it becomes too risky. I think there’s a window in your life, it’s not a specific age, but there’s a window that closes at different ages for different people based on their circumstances and, if you let it close, it becomes impractical or impossible to open a business.
It’s definitely more exciting, but I think it depends on your personality. You have to be good at a lot of things to open your own business, particularly early on.
Most businesses get started with one or two or three people. You don’t have any revenue yet, and once you do, it will be a while before you have the revenue for a dedicated human resources manager, a dedicated marketing person, a dedicated operations person, there’s just a million roles that you have to do early on.
But for the right person, who has the temperament and the intellectual firepower and the organisational skills and the ability to wear many hats, I encourage them to do their own thing. Because ultimately it’s going to be more fulfilling than just living out someone else’s vision for what you should do in a job.
There were things I did well and there were things I didn’t do well. One of the things I did well was almost never taking work home. I worked long hours, but I didn’t bring a briefcase home, so I had a very clearly defined home life and a very clearly defined business life. I tried not to let the two of them overlap too much.
What also helped – at least for a time – was that the work was really interesting. When you’re working for someone else, you show up at an office and you do what you’re told to do; you have to satisfy a higher authority. That can be quite encumbering and frustrating.
In contrast, when you own a business, you can try all sorts of different things. The business was small enough that we could experiment – you don’t need to get permission from anybody, you just start doing. I found making my own decisions very energising, and that helped with the burnout.
But I have a definition of burnout: you just get tired of solving the same old problems again, and again and again. Like snowflakes in a blizzard, eventually they accumulate.
I think that eventually happens to just about everybody, but it hits different people at different times in their professional lives. I was good for about fifteen years, but during those years, I’d interviewed probably thousands of people, hired a few hundred, and it just got old.
The conversations where you have to sit down with people and say, “Your behaviour is not acceptable, and if you continue this behaviour, we’re going to have to ask you to work somewhere else.”
I think there’s only so many times you can do that before you’ve had enough and want to do something else.
Definitely. Living life is necessarily going to entail making a lot of mistakes. The more ambitious you are, in terms of the number of things you want to try and the difficulty of achieving those things, the more errors and mistakes you’ll likely make. So if you want to live a full life anywhere near your potential, it’s going to involve a lot of failures and a lot of mistakes. You have to get used to that. I think it was Robert Browning who said “A man’s reach should exceed his grasp”.
“If you want to live a full life anywhere near your potential, it’s going to involve a lot of failures and a lot of mistakes.”
For me, the only way I could redeem all the pain of the failure was knowing that, at each turn, I learned something. I’d gained a piece of knowledge that could bring me closer to my objective and would help me avoid stepping on similar landmines in the future.
For example, maybe the mistake I like the most was when we first opened. I was very inexperienced with hiring people. I hired someone on the spot. I interviewed him alone, and after a forty-minute interview talking about details irrelevant to his job performance, I offered him a job. We set up a start date, and the two weeks came and went, and he never showed up. It was embarrassing and humiliating, and we really needed someone to start.
We started building our hiring system after that interview. We decided every applicant would need to meet a minimum of two people, and we started doing a second interview. Now we do three, we give our applicants a much broader set of moments to show us who they are.
We wouldn’t have arrived at doing that by not suffering the pain of our initial mistakes, and then committing to make sure we didn’t repeat them again.
That’s basically the book – but if I could only send myself a letter, I’d send the notification from the future that everything turned out okay. I sweated and suffered and stressed too much – and that was a choice; a bad choice, but a choice on my part. I think it ended up darkening those days for me.
You snap your fingers a couple of times and there’s two decades gone like that – you don’t have enough days to walk the earth to have too many of them darkened. So I think I would encourage myself to think about the experience differently.
Instead of thinking about it as a chore, or feeling like I was imprisoned in the responsibilities that I created for myself, I would encourage myself to think about it in terms of this fantastic opportunity that I’ve got that most other people never do. The chance to own your own business, to make your own decisions, to be responsible for your own destiny in a way that that many people would like to, but never get the chance to.
There’s the cliché, “It’s not the destination, it’s the journey”. I was treating it in reverse. I mentioned this in the book – the arrival fallacy, the belief that somehow you’ll be happy when your company goes public or you’ll be happy when you make your first million or you’ll be happy when you sell the company and get the value obtained from all that business building. You have to be careful of that kind of thinking.
I would have said ‘Who’s this old guy who thinks he’s got it all figured out?’ I was so fond of my own perspectives and ideas at that time. But over the years – and repeated failures in so many areas of my life have accelerated the effect of this – you just look at your life and you say, ‘Well, I’m wrong a lot.’ But I didn’t used to feel like that.
That partnership has been really successful. We got along pretty well before we opened the business together. We were in one physical location from 1998 to 2004 – we had adjacent offices in the Subaru dealership. In 2004, we bought a Jeep dealership and he went to that store which was almost an hour away, and things got a lot easier. So I think one of the reasons we get along really well is that we had separate spheres of influence.
When you’re in the same building, supervising the same team, you have to be very disciplined about who’s responsible for what. We were, but even with that discipline, there are times when he would have an idea about how he wanted to do something, and I’d have a different one.
We had to reconcile that. We usually did that by deferring to the person who felt more strongly one way. Generally, it was unusual for us to have an issue where the two of us felt very passionately about it.
I’d say the main thesis in the book is that if you do business thoughtfully and intentionally, you can make more money by treating people better. That might not sound radical, but when you look at how most businesses are run, they’re run pretty ruthlessly. They’re dog-eat-dog institutions. You look at many of the major employers, global employers like Walmart, Amazon – their shareholders make huge fortunes but they pay their people peanuts.
But some businesses, like Costco, have a very different model. It’s a very competitive retail company, but they actually pay their people very well which means they keep them and reap the rewards of the long term relationship they’ve developed with their people. And you feel it when you’re there – the staff are so much more friendly and competent. So guess where I shop?
They still have to be competitive on price, that’s just the nature of capitalism, but you can be competitive on price without stepping on people or squeezing the people that you shouldn’t be squeezing. We’ve done it – I’m not imagining some utopia.
The author Sam Harris talks about how you can solve most mysteries in life by looking at the incentive structures in place. And I think what happens is for publicly held companies, there’s tremendous pressure on CEOs to endlessly generate short term profits and keep the stock price growing. And if that’s the pressure on the CEO, what do you think’s gonna happen? They know that if they don’t deliver results as soon as this quarter, they’ll get replaced.
In a private company like ours we can decide, as we did during the pandemic, to pay people a bit more to keep things running. That cost us a lot of money, but I don’t have to answer to anybody. It’s our money, we can spend it that way.
Going back to the main thesis of the book, I think I’m going to end up with more money in the long run, because I’ve got great people and they never want to leave. Great people deliver great results – financial or otherwise.
We always understood that it was important to consider the long term impacts of our business decisions because our intention was always to be around for the long-term.
There’s some combination of innate personality variables and acquired skills that comprise leadership in a person.
I’ll give you an example. There are some people who are just interested in resolving their own immediate needs right now, they’re more selfish. That’s more of a personality variable and it usually means they’re going to have a difficult time earning the trust and respect of the people they need to lead. But if you’re more other-directed, if you think about how other people get their needs satisfied and how your behaviour affects them, you’ll likely be a better leader.
An example of skills that must be acquired is learning to make sure you identify the relevant stakeholders in any decision, then having the discipline to take the time to go and ask their opinion and incorporate their ideas into the final decision.
As a young man I thought I was being decisive when I just made up my mind on the spot and did something. And in rare cases you have to do that. We had a car on fire outside once, so I just ran and grabbed a fire extinguisher, I didn’t convene a meeting to talk about it. But car fires are very rare.
Most decisions aren’t so urgent that you don’t have time to convene the affected people and have a conversation.
The gathering and retention of the team that we have. We have nice buildings that you can point to as manifestations of the success of the business, but those don’t get me that excited. Seeing the effect I’ve had on others is how I most directly connect all of the effort I’ve invested in the business to really paying off for actual people.
I can give you statistics about our annual revenue, but it’s just not that interesting or compelling. Even in my own life with respect to income, once you have a successful business, you’re just fine. You don’t need any more than what you’ve got. What are you going to do with it, how many houses do you want?
“I think that a healthy entrepreneur is someone who understands what money can and can’t do.”
I don’t mean to say that the money is irrelevant, because it serves a purpose. But I think that a healthy entrepreneur is someone who understands what money can and can’t do. If it didn’t have any value or utility you wouldn’t bother, but don’t make it some kind of weird religion in your life.
I feel bad for people who use it to keep score. It’s overrated. I can tell you that from having crossed over the other side and seeing what it’s like.
I’ve kind of given up on convincing anybody of anything, because I’ve found how rare it is that I’ve successfully convinced anyone of anything.
One thing I put a lot of energy into is inviting people to look at something differently, by asking questions.
Take someone who’s decided to get a graduate degree in mechanical engineering because that’s the way they’re going to make the most money, even though they don’t really want to be an engineer.
I might ask something like, “You seem like an intelligent, thoughtful, analytical, disciplined person. I would expect that someone like you would do some research into the social psychology on this. Have you done that? And if so, what have you learned?”
Another question I might ask would be, “How would money change your circumstances now? If you had double the amount of money you had, how would your life be different?”
I also try to lead by example. I try to do a lot more of this now because I don’t think advising people on what to do is as effective as them discovering it on their own. So to the extent that you can model the kind of behaviour you want others to follow, that can be much more effective.
I think president John F. Kennedy, in 1963, was asked a very similar question. He answered with:
“The ancient Greek definition of happiness was the full use of your powers along lines of excellence.”
I really like the idea that there’s some really deep satisfaction you get when you’re good at something and you do it, whatever it is.
I imagine, for example, J.K. Rowling as she’s writing a sequel to Harry Potter – she knows she’s good at it, even if it’s frustrating at times. The pleasure of actually getting to write it, knowing that it’s going to be published and people are going to benefit from her labour and appreciate it, I imagine that feels very fulfilling.
For me, writing my book was very satisfying – challenging, but very satisfying – because I felt like I had learned all these lessons that had economic and social value, and I was getting a chance to share them.
I think it’s hardwired into the human condition to want more. I don’t mean to phrase that in a way to make all of humanity sound greedy, but the social science researchers talk about the tendency for humans to get on the hedonic treadmill. They describe this as the condition where however much you have, you end up in this pattern of behaviour of continuously trying to improve that situation to try and make yourself feel better.
“For 18 years now, I’ve written a daily gratitude journal… It’s not a record of my life, the value of it is purely in the discipline and the practice of having at least one moment a day where you consider all the abundance in your life.”
This is an age-old question, and I’m also caught up in that same Buddhist conundrum that everybody is: just trying to be happy with what I’ve got, instead of always pining for what I don’t.
But there are some things you can do. For 18 years now, I’ve written a daily gratitude journal. It’s not a diary – I just write down some things at the end of the day that made it special.
It’s not a record of my life, the value of it is purely in the discipline and the practice of having at least one moment a day where you consider all the abundance in your life. I’ll probably be doing it until the day I die.
I meet so many entrepreneurs, and what I’ve noticed is that almost all of them are trying to use their professional ambitions and business life to fill holes from earlier in their life. Psychologists talk about this thing called the ‘psychic wound’ – unmet needs from earlier in life.
For example, I was once having a very candid discussion with a friend one evening – another car dealership owner. He’s older than me and continues to be incredibly driven. And he told me that he didn’t have a good relationship with his dad – nothing he ever did as a child was good enough for him. As a result, the need to prove that he was a man and successful by society’s definitions had animated so much of the effort that he put into his businesses over the years.
For people that are working really, really hard at something, I think a pretty reasonable question to ask is, “Where’s this drive coming from? And where will it lead you?” I think it can be healthy or unhealthy, or even both at the same time.
I’m a huge fan of having good role models in your life. That’s why I encourage people to choose the people they spend time with very carefully – we rub off on each other.
We typically think of role models as senior in age, wealth, power or authority; we think of teachers or parents – but I think we’re all role models to each other. I had so many teachers growing up that showed me what it meant to be smart, compassionate, disciplined and hardworking. That isn’t to say that these guys do everything right, they make mistakes. But what they do is give me a variety of ideas that I can learn from and be inspired by. I continue to learn from other people today.
Take Dale, my business partner, he’s so good at understanding the unique set of motivators for each person on the team. Some people need money; other people are all about recognition, affirmation, appreciation; other people just want status. That’s such a great skill to have.
“I think a lot of people get into business with some fantasy of what it’s going to be like, instead of clarity about what it’s actually like.”
Whatever it is that you want to do, go find the people that are already doing it and talk to them first. If you want to be a lawyer, go find a lawyer that’s willing to take you out to lunch or to spend a couple hours at a coffee shop with you. Bring in a thoughtfully prepared list of questions – “What’s your day like? What regrets Do you have? Would you do this again? Are you burning out? If so, why?”
I think a lot of people get into business with some fantasy of what it’s going to be like, instead of clarity about what it’s actually like. They could gain that clarity if they did a minimum of due diligence by finding the people who are actually doing it right now.
If there’s a fork in the road, and the choice is between the more or less adventurous option, take the more adventurous option. The philosophical underpinning for that advice is just my observation that you’re more likely to regret the missed opportunities than the things that you tried that didn’t work out.