My conversation with Todd Graves

Todd Graves is one of my favorite living founders. He owns over 90% of Raising Canes — a business that is worth at least $20 billion. Todd's maxim is "Do one thing and do it better than anyone else." It is impossible not to be inspired by his terminator levels of determination. I hope you enjoy our conversation as much as I did. Episode show notes: ⁠https://www.davidsenra.com/episode/to... Made possible by Ramp: ⁠⁠https://ramp.com⁠⁠ HubSpot: ⁠⁠https://hubspot.com⁠⁠ Function: ⁠https://functionhealth.com/senra⁠ Chapters (00:00) The Entrepreneurial Mindset: Sleep and Business Obsession (02:13) The Birth of Raising Cane's: Overcoming Skepticism (03:29) Inspiration from In-N-Out Burger (07:17) The Importance of Quality and Focus (14:49) The Journey to Success: Hard Work and Sacrifice (19:21) The Early Days: Building Raising Cane's from Scratch (21:23) Financing the Dream: Unconventional Paths (32:28) The Relentless Pursuit of Success (33:02) Commitment and Oaths: The Camping Trip (34:02) Fanaticism and Relentless Focus (34:53) Learning from Others and Continuous Improvement (35:06) The Never-Satisfied Mindset (36:04) The Importance of Founders in Business (39:55) The Purpose Beyond Profit (51:52) Financing the Dream: Credit Cards and SBA Loans (55:47) Building the First Restaurant (57:56) Expanding the Vision (58:59) Positive Motivational Management (01:00:51) Creating a Coaching Culture (01:01:42) Intrinsic Motivation vs. Titles (01:02:41) The Importance of Being Present (01:06:35) Respect, Recognition, and Rewards (01:09:12) The Power of Encouragement (01:18:10) The Myth of Delegation (01:22:57) Focus on What You Do Best (01:30:07) Dining at Jiro in Tokyo (01:30:59) The Franchise Model Debate (01:32:50) Challenges of Franchising (01:35:21) Building a Business Authentic to You (01:37:07) Financing and Expansion Strategies (01:49:13) Surviving Hurricane Katrina (01:55:48) Lessons from Estée Lauder (01:58:06) Final Thoughts and Reflections

• 0:00Speaker 00

  I've started a new show where I have conversations with some of the greatest living founders. That show is called David Senra. It will be on a separate podcast feed from Founders. So it's very important that you follow David Senra on Spotify, Apple Podcasts, YouTube, or really wherever you're listening to this right now. So you don't miss future episodes. This conversation is with one of my favorite living founders, Todd Graves. Todd owns over 90% of Raising Canes, a business that is worth over $20 billion, and he's been working on this business for almost 30 years. Todd has an extreme level of focus and a love of radical simplicity that I love and I try to apply to my own craft. I am posting our entire conversation on this feed. So you know what the new show is like? I hope you enjoy our conversation and please don't forget to follow the new show,

• 0:44Speaker 00

  David Senra, now so you don't miss future episodes. And by the way, nothing is changing with Founders. I am still doing episodes every week and I will work on Founders until I die.

• 0:57Speaker 00

  I was not expecting to start here, Todd. We were just talking before recording. I didn't expect to start on sleep, but what you just said is exactly how most of history's greatest entrepreneurs are. They just can't stop thinking about their business. Because I was asking you, like, how much caffeine do you take? How much sleep do you need? And then your answer was what?

• 1:13Speaker 01

  I just have a really erratic sleep. So I'll go, you know, some nights I'll go maybe three hours of sleep. The next night I'd be three to four hours. The next night I'd be five hours. And usually about that point is the next night I have to crash. So I'll sleep 10 or 11 hours to catch up. And then I'll actually wake up feeling great, feeling like I don't have to muscle through a day keeping myself awake. And then I'll be caught up. I'll go another three hours that night, four hours and five hours. But what really dictates it is what I have going on in business and what I have to be thinking about, what might give me a little bit of anxiety about things I gotta decide on, the teams, what I have to work through. So my brain will be working as I'm sleeping. I think it's trying to figure out solutions. So then I'll just wake up. And I'll actually wake up pretty refreshed thinking about, you know,

• 1:55Speaker 01

  that problem I had and then go jump on the computer in my underwear. And then I wake up and go first that and then start sending out emails to actually solve that problem, you know? But if I get caught up at work and there's nothing like really pressing, then I can sleep like a baby. You know, I don't have a problem sleeping. I just have a problem sleeping when I got real business on my mind.

• 2:14Speaker 00

  This keeps reoccurring in all these biographies of history's greatest entrepreneurs that I read. And so I just did this episode on Jiro, the best sushi chef in Japan, right? The documentary I have is Jiro Dreams of Sushi. Why? Because in his sleep, he is thinking about his work, right? Then I did this episode on this guy named Michael Ferrero. It's another family-held business. It's the Ferrero Chocolate Company, right? He would say that he dreamed up what he called comforts, which was new products, new chocolates to make in his sleep. The Michelin Brothers, same thing. They would dream up marketing ideas on how to market tires in their sleep. Leonardo DiCaprio, Luxottico, one of the biggest businesses in the world. He just passed very recently. He said he would literally wake up dreaming. He would dream about ideas for his business. And he'd have to either keep a tape recorder next to his bed

• 2:57Speaker 00

  or in your case, you're in your underwear and you're in a computer. Or you'd have like a notebook.

• 3:01Speaker 01

  Notepad, just to write it down.

• 3:03Speaker 00

  It's very fascinating how you see the same personality type appear throughout, over and over again throughout history. So we are in the very first Raising Canes. You were very kind enough to let us record in here.

• 3:13Speaker 01

  The mothership.

• 3:14Speaker 00

  You're almost at your 30-year anniversary for running Raising Canes and starting this. I want to ask you a question. I love, I've heard you say this before. What is the advice that the so-called, the bad advice, these so-called experts gave you when you were trying to start the very first Raising Canes?

• 3:30Speaker 01

  I think, you know, so having a dream to start a chicken finger-only concept was just, back then was in Louisiana, was kind of unheard of. It was just a totally new idea. You know, we're known for our Cajun and Creole food here. Like at lunch, people could get a plate lunch, some Cajun dish. And that's what people are used to. Also in the industry at that time, you know, McDonald's and these other big quick-service restaurant chains, they were adding menu items because they didn't want the veto votes, what they called it. One person in the car that might not have the choice at that restaurant that they could get, they said they would veto the whole car and go somewhere else that had that menu item for their deal. They're also adding healthy items back then. So starting a, you know, a restaurant and having an idea to do one,

• 4:13Speaker 01

  to focus just on one thing, one singular product-focused menu, was just really unheard of at that time. We didn't have In-N-Out Burger. In Louisiana, right? Now, a lot of people.

• 4:24Speaker 00

  But you knew about Harry Snyder.

• 4:25Speaker 01

  Not until I went to LA to work in the refineries. That's when I went out there and to work in the refineries. When I went to In-N-Out Burger, that's reaffirmed my belief that, hey, you can do one thing and do it better than anybody else. And then I did a research and I started studying the In-N-Out model like since 1948. So 1948, they had the exact same menu, right? And people know what to go in. It took me one time to go there and someone to recommend, get a double double and get it animal style, get the fries, get whatever beverage you like, and then get a chocolate shake. And it's my same order every time. So when I first went, I kind of held up the order line for a second and, you know, went inside and done. Next time I went there, I went through the drive-thru, double double, animal style, fries and a Coke, and then I also want to get that chocolate shake.

• 5:07Speaker 01

  And so seeing that really reaffirmed that belief for me because since 1948, you think about how many different burger chains opened up and then went all around In-N-Out Burger. And they added all different menu items. They added unbelievable marketing. And In-N-Out Burger's marketing is not much. Generally, they put big billboards on the interstate and say, here's where it is. Here's where we're at. And they continue to do well, raise their sales because they stuck to what they're good at. And for that, that really reaffirmed my belief. And when I was able to come back from going to LA to work in refineries, then going to Alaska when I came back, I think that was a big selling point, being able to add In-N-Out Burger as a successful chain since 1948 with the banks at that time.

• 5:50Speaker 01

  That's when I got that SBA loan after I raised that cap.

• 5:53Speaker 00

  So when I did the episode on you, this is where, because I read Harry Snyder's biography. He's one of my favorite founders. I mean, the guy was completely obsessed. There's a great line in one of his biographies where he would live across the street from the first In-N-Out, and he'd work all day, right? And then he'd sit in his living room and watch TV, but he'd look out the window. And as soon as the drive-thru would back up, he'd get out of his chair and run across the street. He was completely obsessed. And he, just like you, he bucked the trend in his industry. They went to like, when everybody, I think McDonald's was like, no, we're going to like freeze our beef or whatever the case is. He's like, I'm gonna have my own butchers. He's like, I'm gonna get the fresh tomatoes. Like, no, no, I'm not going. I'm all about quality. There's a line, he just gave me a tour of the kitchen.

• 6:35Speaker 00

  It says, never, you guys have a mantra that says, never sacrifice quality for speed.

• 6:40Speaker 01

  That's right.

• 6:41Speaker 00

  And he was like completely quality, completely like quality obsessed. And then if you just sit there and you think about your business over and over again, like he's the one, a lot of people don't know this, he invented the drive-thru speaker. Like, how can we do this better?

• 6:54Speaker 01

  That's right.

• 6:55Speaker 00

  Because remember, the prehistory to that was like, you had drive up restaurants. You didn't have drive through restaurants. So, in that episode, I was induced into a state of rage because all these people are telling you, "Oh, this, you can't have a simple menu." I was like, "No, just go to the west coast, they're thriving, they have a cult-like following." Went to visit my brother and sister in Orlando, and you guys had just opened up. You weren't in Orlando before. And I was like, "Have you guys ever had Raising Canes?" This is after I did your episode. And they're like, "No, what's that go?" First of all, you should have listened to the goddamn episode. Second of all, I'm gonna take you to Raising Canes. And so, I saw exactly what you said, where you're like, "I don't hide..." You know, we put Raising Canes right next to McDonald's, or Chipotle, or whatever the case is. It's like, "I'm just gonna do one thing and do better than anyone else." So, we pull up, my brother and sister are like, "What the hell is going on here?"

• 7:40Speaker 00

  It looked exactly like when... I was just in California two days ago. Looks exactly like when you pull into an In-N-Out. They're like, "Why is there a line out the drive-thru? Why can't we find anywhere to sit? We have to wait for, we look at it, wait for people to get up." I was like, "Just taste it, and you will understand." And then I thought of you that day, because we're eating outside. And I look across the street, and I see poor old little Wendy's, and there's a sinker car in the drive-thru.

• 8:04Speaker 01

  Yeah.

• 8:04Speaker 00

  I go, "It's because Todd is obsessed. He wants to do one thing and do it better than anybody else."

• 8:09Speaker 01

  Yeah, you have to focus on doing one thing and do it better than anybody else. And so, since I have that singular product focus, right? And so, some people call it like a simple menu. I say, "Well, it's not simple, it's focused." And here's why it's not simple. Because our chicken has to be exactly right. Look, it comes from the weight of the bird that we want to get the size tender we want. It comes from the species of bird that gives the most tender and flavorful chicken. It comes up with a lot of technical stuff. Rigging motors on the bone after the chicken's sautered, then it stays on the bone a certain amount of time. Then you get it fresh, then you brine it for 24 hours. Like, all those things are that, are fries, right? So, we have crinkle-cut fries, but like a thinner crinkle-cut fry. You get fries from different times of the year, right? They do the crop harvest, and it sits in the warehouses.

• 8:54Speaker 01

  At certain times of the year, you get more sugar tips in the fries. Those sugar tips have to come out, so we have to remind our crew, "Hey, when you see those black sugar tip ends, take those out, it's not visually pleasing our bread." So, we get bread made by bakeries all over the country, but that recipe has to be exactly right. And it's little dough balls put together. Baked together, so it's pull apart bread. It's not sliced loaves. Sliced loaves end up being more stale. This is dense, moist, flavorful bread. Our coleslaw, we secure all over the country. We have to make sure all those vendors have the right type of slaw that we want for the right type of growers, grow in a certain amount of time. In that slaw, you have cabbage, but you also have purple cabbage, you have carrots, all those things. And so you go down to your tea. Our tea gets brought from three different countries, the tea leaves, where we have

• 9:39Speaker 01

  to get it the right time of the year. We might pay more for that, but it's that focus on that. So my team can focus on those menu items and deliver it every time, or it tastes exactly the same around every canes across the country. So since we're focused, it's not a simple thing, we can focus on those things. We have a large culinary department. It's not R and D, it's culinary, right? So it's culinary, making sure that all those products, those raw products we get, are all perfect and to make sense there. Same thing we opened in the Middle East. It took two years, two years to get the supply chain just right, to make sure it tastes just the same. Two years to do that. Took two years to procure the chicken, two years to get all the ingredients right, because a lot of stuff you can't import in, plus it's very expensive to do that, for them to import it in from the United States where we get it currently.

• 10:24Speaker 01

  You have to spend the time to do that. So two years, people would look at that and say, man, you know, you should be open in a year. That extra year is going to cost you X amount of dollars. And I'm like, no, those X amount of dollars are going to make us more money because our sales are going to be higher, because our food is... And quality ingredients create, and a proper cook system creates craveable product. So like, in the food business, like, and I say this to all entrepreneurs that are in the food business, like, whether they're wanting to open up or they have restaurants open, it's like your food has to be craveable, like, meaning like, oh my God, I love that chicken parm from Craig's. So when I go there, I'm like, I want to go back and get that chicken parm. Other stuff on the menu is pretty good, or whatever, I'll sample this to try different things, because I like food, but I want to go back to that chicken parm.

• 11:06Speaker 01

  If they didn't have that craveable chicken parm at Craig's, I wouldn't make it a point to go there. There's so many good restaurants, there's so many great places you can choose from in LA. There's so many great places that you have good vibe and good atmosphere and good people, but that craveable product is what brings it back. And if you cut that quality... And I've had CFOs over time, not current CFOs, but over time, that have been like, hey, you know what? We just cut this just a little bit. You know much money, because it's a pennies business, right? We're doing well if we make 10 cents on a dollar. But like, if you start cutting a little bit here to save a penny, and you start cutting a little bit here and a little bit here, it's death by 1,000 cuts. Then your food one day is not craveable. That's what's happened to so many quick service chains over the years. They mess with their quality so much. Then they lost the craveability.

• 11:50Speaker 01

  So then it comes down to is a cheap calorie option versus a craveable meal that I'm dying to go get.

• 11:56Speaker 00

  Yeah, the way Steve Jobs would describe that is like, you want to make products that people lust over.

• 12:00Speaker 01

  Lust over.

• 12:01Speaker 00

  And so you nailed the craveable, because I told you I brought my 13-year-old daughter with me today. And she's obsessed with Raisin Canes. And she doordashes it to her house constantly. She's definitely craving the quality chicken finger meals.

• 12:14Speaker 00

  Todd Graves is obsessed about staying in the details of his business. He says the most successful people he knows stay in the details of their business. He mentioned learning from a friend who runs a multi-billion-dollar shipping company, and how that friend would pay attention to even how much his company was spending on bottled water. When I heard that, I thought it'd be a lot easier to do this if that shipping company was running on Ramp, something a lot of history's greatest founders have in common. They know their business from A to Z and their costs down to the penny. Ramp makes doing this effortless. Ramp gives you easy-to-use corporate cards for your entire team, automated expense reporting, and cost control. These corporate cards are fully programmable. You can set limits so the spending of your team never gets out of hand. Most companies only find out about excessive spending after the fact,

• 12:57Speaker 00

  like that shipping company with the rampant spending on water. With Ramp, you stop it before it happens. Matt Paulson is the founder of MarketBeat, and he recently switched to Ramp. And this is what he said about it. Ramp is the best. The amount of money you will save from unwanted renewals and employees who think company credit card equals buy whatever you want will far exceed the best credit card rewards program. Matt is talking about the importance of cost control. There is a line in Andrew Carnegie's biography that says, "Cost control became nearly an obsession." If Carnegie was alive today, he'd run his business on Ramp. Take the time and set up a demo of the product, and you will see why many of the world's top founders are running their company on Ramp. Go to ramp.com to learn how they can help your business today. That is ramp.com. So go back to these people are giving you this advice. Like, you don't know what you're doing.

• 13:42Speaker 00

  I know the answer to this, but I want to get it on record. It's just like, your kind of personality type, these like, history's great, entrepreneurship's all the same. If you tell them that you can't do something, you get the opposite reaction that you think you're gonna get, which is like, it's just going to make you want to do it more.

• 14:00Speaker 01

  Absolutely. You know, the best thing for an aspiring entrepreneur to be told is, "I don't think that's a good idea. I don't think you can do that." People haven't done that before. Why do you think you can do that? Because entrepreneurs have something to prove. They have a vision. They have an idea. They have a passion. If you're an entrepreneur, you're passionate about what you want to start. You're like, "I know this is gonna work." And you're so passionate about it when someone tells you, you know, do that facial expression, "I just, I don't think that's a good idea." Your first thought immediately is, "You know what? I'm gonna prove it to you that it's a great idea." And all those no's that you get, you just use that as fuel. It's like entrepreneurial fuel. It's putting gasoline on a fire because you have something to prove, you know?

• 14:42Speaker 01

  Later in life now is, you know, I can take, you know, now that we're established and good, I can take, I can take those things and not, don't let it fire me up. We still get it at times, you know, like, going into, you know, going into different countries. They're like, "You know, you know, like, this mayonnaise-type sauce, it's much more popular as a dipping sauce. You're not gonna be used for sauce. You need to add that." If I would've heard that in the early days, I would've said, "You wait till cane sauce all that day." You know, now I can say, "Hey, you know, actually, we've had the same thing over the United States." You know, ranch was popular out west and different things like that. You know, and we went into Texas. They said, "You had to have cream gravy. You gotta have barbecue sauce." You know, things like that. And like, but through tried and true, over time, customers love the cane sauce. And so, we want people to have cane sauce with our meal, not with ranch,

• 15:27Speaker 01

  because it's not nearly as good with ranch. And so, they can understand that. So, you kind of call them later after you've proven yourself. But like, but when you're getting started out, man, it is.

• 15:34Speaker 00

  You don't seem calm. You don't seem calm to me.

• 15:37Speaker 01

  Yeah, there's nothing to prove people wrong anymore.

• 15:39Speaker 00

  But I can feel your intensity over the table. So I'm very curious about this, like the hours that you're working now, 30 years in, compared to the beginning. So I just flew to Austin. I got to spend five hours with Michael Dell. And Michael Dell is hilarious. He's been running his business for 41 years. He's one of the most impressive people I've ever met. Very calm and measured, but underneath, just a super relentless person, as you can imagine. And I was talking to him, I was like, hey, I heard you on a podcast one time. You said one of the funniest things. Because somebody asked him, like, you know, when you were starting Dell, in the University of Texas dorm room with a thousand dollars, and you're going to take on the biggest company in the world at the time, which was IBM. Like, that's so crazy. And they're like, how many hours did you work when you started your company? And Dell's face was like, all of them.

• 16:24Speaker 01

  Literally all of them.

• 16:25Speaker 00

  I slept at the office. And so we had a long conversation, because he's also, you know, he's married, he's got kids. And so he was just like, you know, at the beginning, it's intensity. But, you know, the value is the consistency and the compounding over decade after decade after decade. He's like, listen, I love my business. Because I asked him, I was like, Austin in July is not...

• 16:45Speaker 01

  A little bit hot.

• 16:46Speaker 00

  If I had your place in Hawaii, I know where I'm going to be in July. I was like, why are you here? He's like, I just love my business.

• 16:51Speaker 01

  Right.

• 16:52Speaker 00

  So one of the things he gave me advice, he's like, listen, the advice for young entrepreneurs, he's like, I've seen so much over 41 years. He's like, you think you're going to be knocked out by a competitor. You're not going to be knocked... You're going to sabotage yourself. That is much more likely that you sabotage yourself than somebody else sabotages you.

• 17:06Speaker 01

  Absolutely.

• 17:06Speaker 00

  He's just like, so what you want to do is just like, you want to make sure that you're surviving to the next day? He's like, I work all the time. Do I work? I'm not sleeping under my desk. And then he's like, he was like, you know, I have a team around me. When they say, hey, we have an important customer in Japan. He's like, do I, am I, do I actually have to be there? Are you sure that I have to be the one to be there? So this whole point is just like, over time, you're still working a lot, but you're not... It's not even fanatic, because you're definitely fanatic, fanatical. And I want to ask you about your great quote about that. But you're just, you're more measured. You're going to live to survive the next day. So what are you like? How do you compare like the hours you're working now compared to when you started this thing?

• 17:43Speaker 01

  So when I started up, and I give young entrepreneurs this advice. I'm like, imagine how hard it is to start your business. Then multiply that by infinity. And if you're still committed to do it and you have the stamina to stick with that, then you'll be successful. Obviously, you have to have a good product and, and concept and you have to have something that's gonna work to make something go, which is often hard for people to see. The vision of chicken fingers down here in Baton Rouge was like, just chicken fingers, you know, just chicken fingers. Like, we like our plate lunches. We, we want variety, things like that. Like, wait till you have this product.

• 18:15Speaker 00

  Yeah.

• 18:15Speaker 01

  And then when I was able to start cooking for them, oh, man, that is good. Then when they start talking about the next day, hey, man, you can cook some more of that? Yeah, yeah, come on by and have it. When you have to start up, there's so many amazing ideas by just promising entrepreneurs, but they stop and the world never sees that product or service because it's so hard to open a business and it's so hard to make that business successful, then it's so hard to scale that business and grow. And if they just didn't stop and they knew how hard it's gonna be, because I'm like, they're like, how do you have a, you know, how do you have quality of life and, and work-life balance when you're starting a business? I'm like, you don't. Flat out, you don't. You're gonna live the business every day, you're gonna think about the business every day, you're gonna be tired, you're gonna be fighting through a bad mood because you're not getting enough sleep and things like that. It's like, you don't have it.

• 19:00Speaker 01

  So you have to be committed that you're not gonna have it. Now, once you get your business open and you get it established and it's, it's working, then if you wanna grow, then you're not gonna have quality of life then. Because going from one to two is, is your hardest step you'll ever have. Then two to six and six to 12 and all those growth phases are there. And so, but I just wish people wouldn't stop when they go. Because like my hours in the beginning, you know, when we started this restaurant, we were open every day of the week. We were open until 3:30 a.m. And except for Sundays, we closed at 3:00 a.m. And, and look, when, when we were closing up, it took us two hours to close down. When we opened up in the morning at 10:30, we had to be here at 8:00 in the morning. And so, you're getting about three hours of sleep a night.

• 19:43Speaker 01

  I have my apartment right back here, uh, that would go up. And then during the day, we'd be like, hey, go take a nap, you know, go get a nap. I'll go get a nap for like two hours and then wake up and come back to work. The hours were just all the time. It was just non-stop. And I was young enough to have that stamina, just to roll. And plus this environment, I love. This environment, cooking in this restaurant. Well, it was very important for me to be in this restaurant. So you could feel the vibe here. You could feel the soul.

• 20:06Speaker 00

  It's right there.

• 20:07Speaker 01

  It's just here, man.

• 20:08Speaker 00

  You're not separated from your customers.

• 20:09Speaker 01

  You're not separated from your customers. You're right here in the middle of this place that I constructed with my own hands. And it's like you just work constantly.

• 20:15Speaker 00

  You constructed what with your own hands?

• 20:16Speaker 01

  This, this, this restaurant. I literally reconstructed all this with my own hands. Everything except the electrical, because I literally don't know electric. But plumbing, I did plumbing. I learned how to do plumbing. I learned how to do minor construction. All this place is resurfaced. So when you came in this place, it was a lot of different concepts, college concepts. It just didn't work. But they layered on paneling, even like Arcade was here, paneling after paneling. So rip off one layer of paneling. And there's like, there's a rainbow stripe paneling going down this way. Cause it was an arcade at one time. And they had ripped up through this old paneling here on the wall, which was actually an Italian restaurant, where it started. This was the outside of the building and they built this onto here. So when I pulled all these things off, I noticed this stucco all down the wall. But there was one little place I saw brick. I was like, oh, man, we have a brick wall.

• 21:01Speaker 01

  So I started ripping it out with a crowbar, left stucco down the side. And I got here and uncovered this old mural. And I look, I took it as a sign, man. This was, this was an outside advertising for this bread mural, for this bread bakery downtown Baton Rouge, where we actually started with our first bread at Cane's. I came up with the recipe with, with the, with the bread preparers there. And this was an outside advertising. Highland Road going from downtown Baton Rouge through Ellis Shu was the main core thoroughfare here. And we like took this as a sign. This is what we came up with our logo for Cane's. We took this design, like I literally took it as a sign to say, this is going to be the Raising Cane's logo. And then that's what we ended up with. And like, but I learned this stuff because I didn't have enough money. I got a small SBA loan for 90,000, for $90,000.

• 21:45Speaker 01

  I'd raised equity in a sense of like $60,000 with original shareholders. And I carried them over a little, they're a little bit of the business today. It's been fun being with them.

• 21:55Speaker 00

  I pray, one of the things, I don't even want you to tell me if it's true or not. I want to talk about how you financed the business because it's one of the craziest stories I've ever heard. But I just pray that today there is a boil maker named Wild Bill that owns a couple hundred million dollars of equity. And raise a case, because he bet on your chicken finger dream when you were like in your twenties.

• 22:14Speaker 01

  He did, he did. But let me take you back a little bit on the start of it. So, you know, I worked in restaurants in, you know, high school and college. I love the restaurant business. Food symbolized love to me. So what that means is like when I could spend time with my mother, cooking in the kitchen. She's the one that taught me how to cook. We cooked Cajun meals. So we would make a gumbo, right? You make a gumbo, you start with a roux and you add your onions. And you really, you take all day making a gumbo. Now, does it take that long to do it? I don't know if it does. It's more about spending time with somebody that you love. And we're cooking for the family and our friends that we love. So that time together and then you make a good gumbo, then you sit out and all your friends and family are like, "Oh, man, that's a good gumbo. That's good." And they start talking about, "Well, I do mine a little different. I do this and those conversations with..." My grandmother would make me a pie, you know, chocolate pie.

• 22:58Speaker 01

  She'd come visit, "I made your pie you love." And I'm like, "That, you know, you know, I love you." And so for me, restaurant and food and delivering food, it's an expression of love. And then the camaraderie, when you're working in a kitchen and it's rolling and drive-throughs going. And I can work any position, but it's that teamwork and it's immediate gratification when you're like, someone spent their hard work money or hard earned money, and they give you their money and they look at that chicken finger box and they're like, "Oh, yeah." Like, that's a good feeling. It's immediate gratification. So much stuff with corporate work and administration work and things like that. It's not immediate gratification. It comes over time. My favorite job is if I can literally come in the restaurant and just crank out a shift. Like, that to me is fun, man. That vibe, that energy. And you still do that? Right, did you? Yeah, when I can go, when I go to restaurants, I go go visit at like a market.

• 23:43Speaker 01

  And I'll go to one restaurant and I'll get all the crew to come there and we have like a town meeting. Hey, you know, my main job when I do that is saying thank you. "Y'all are doing great. Thank you so much." And then, "What can we do better?" And I can get that out of crew and management, you know? It'd be like, you know, first they're a little bit like, "Oh, no, the support's great." I'm like, "Yeah, it's great, but we're never gonna be perfect, so what can we do better?" "Well, you know, the uniform program. Be better if we could do this, that. Great. Let's get some input." Because you can get, you can get system-wide, really good, like, things from focus groups, you know, with crew or management, and you get good stuff from surveys. But like, when you actually talk, you can pull it out of them a little bit more and do it me. They feel comfortable and they and they and then they'll tell me, but then I'll work I'll work with them. And they shift and it's fun because you can just, everything goes away.

• 24:27Speaker 01

  You're like focused on delivering good product and good service to customers right there. It's great. So I was in the restaurant business and so like when I went to college, you know, I I actually studied uh uh writing for script writing for television and film. I thought I might want to be in movies, but I always went back to business and when I was working because I was that original kid in the neighborhood that had the lemonade stand. I was a kid that was gonna cut your grass for 10 bucks. It was just always I do like I'd set up like uh uh Halloween uh haunted houses in my house. And like, you know, go around, put flyers out and five bucks for kids to go through. So I knew I wanted to be an entrepreneur and that's when I got serious about it my senior year. And I actually gradually went to University of Georgia, but I was from Baton Rouge originally. I knew I wanted to come home and I had a partner when I started the business.

• 25:08Speaker 01

  Since we wrote the business plan for Raising Cane's, um it started off, they're calling it Folly's Chicken Fingers. That was the original business plan, terrible name. But um we had, we had a friend that was nickname was Folly, called each other Folly. But anyway, we wrote that business plan and literally I wrote the, I wrote the Bible of Chicken Fingers, man. It was like, I knew what our aprons would cost. I knew what, what would the cost. I knew what would, I was just a college student. I knew what college students need to make, I knew the environment they need to work in. I knew what college students wanted to eat. I knew what price points they would pay for that. All these things, but but but that professor gave you the worst grade in class, which is classic. Uh but it was only a B minus. The rumor went out that it was a failing grade and all this stuff is, but he was, he actually said a greater.

• 25:50Speaker 01

  But he said, no, the plan was great. Like, like literally, you get the most detailed plan in the whole bit, in the whole class, but the concept won't work. And I said, well, why would the concept work? Well, because you didn't study the industry. Well, don't you study your industry, you know, McDonald's is adding. Um, you know, they've been at it a long time and they're the best in the business. They're adding these menu items. There's this thing called veto vote and people won't come to your restaurant. If, if, if mom didn't want this, you know, they're also adding uh healthy items, you know, someone's gonna want a salad and that and do it. And it's like, you tell that entrepreneur, no, you're like, oh, yeah, wait, I will prove it to you. Literally, I took that. And uh people would have thought that'd be discouraging. Actually, it was that fuel. I will show you that this will work, right?

• 26:29Speaker 01

  So took that business plan, bought a cheap suit, went to Office Depot, bought, I thought the businessman need to wear a suit and I thought businessman. Bought the briefcase.

• 26:38Speaker 00

  I had the same one.

• 26:41Speaker 01

  Did you, but didn't you feel like a businessman? You're like.

• 26:44Speaker 00

  I went to school for business, you don't know anything.

• 26:45Speaker 01

  You don't know, man. You're going into bank, which is pretty intimidating, right? You're like bankers and you think they know everything and, and literally brought it in and be like, you know, unlock the, the little safe, you know, the little combo.

• 26:58Speaker 00

  Was the combo all zero?

• 26:58Speaker 01

  I don't even remember what it was. Yeah, something like, you know, ch ch, open it up and it'd be like, here's business plan for you. Here's mine. Put the business plan down and proceed to talk about this, this, this chicken finger, uh, concept. I want to start at LSU and everybody was nice enough, right? They're nice enough, but it was the, the banker's response was, you know, ah, just chicken fingers, South Louisiana, you know, that's not how we eat lunch and never heard of that. And I'm like, whoa, whoa, hold on a second. Like, like, you know, you order pizza, you know, pizza's real, real, real popular, right? Yeah, yeah, yeah. You probably order the same pizza every time, don't you? What do you, what do you get? Well, I like pepperoni or like whatever. Like you get that every time and like this meal's that flavorful and craveable. You're going to want to get this meal over and over. Yeah, but you don't have years of management experience, you know? You probably should go work for, you know, great companies.

• 27:43Speaker 01

  I mean, good things, you go work for a banker for like 10 years, then you'll really own the business and then you'll have some money and, and then da, da, da, and then you'll be, you'll be bankable at that point, you know, like, cause you have no money, right? I'm like, no, don't have any money. And they're like, you know, you can't get a loan. You can't just get a hundred percent loan, which I thought you could do. But with every no I got, and they were nice enough, I, I will give them credit for that. And they were nice enough to take the meeting. Maybe there's some kind of law that you have to actually see somebody in their business plan. But then that, like, I was like, man, I need to go make money myself. And so through a friend of mine, I got a job as a buller maker working in refineries. Louisiana has a lot of refinery work. And so what it is, is turnaround shift work.

• 28:17Speaker 00

  But this is super intense work. This is like 95 hour.

• 28:22Speaker 01

  It is 95 hour work weeks. Man, so what happens is they'll, they'll shut down a certain, um, sector of a, of a, of an oil refinery and they're, they're missing out on production, man, which is just big, big money they're losing. So they'll pay for you to work nonstop. They'll pay whatever it needs to get that thing back up and running. So you go in and you fix things, you add, you put new equipment in and things like that. So you worked 95 hour weeks. And you just work straight through. There's no days off, there's no nothing, you just work straight through. So there's overtime, there's double time, there's some kind of crazy thing that goes into another level. So you can make a lot of money in a short period of time. And that was the first group that was encouraging to me on my chicken finger dream, because they could see me working hard on something. I don't know what I'm doing, but I'm willing to do whatever, earn my money when I'm out there, willing to take on any job out there. And they're like, Todd, you're gonna, well, they called me Hollywood.

• 29:06Speaker 01

  We all had nicknames. Interesting story on the Hollywood deal, but we'll leave that out. But so they were encouraging. And Wild Bill, Tolar, we all had nicknames. So Wild Bill was like, hey Graves, man, Hollywood, I see you got what it takes. If you really want to make some money, and you're not afraid of hard work, but this is a really dangerous trade. I fish in the summers, commercial fishing, sockeye salmon in Natchez, Alaska. And he goes, you can go up there, get a job, you can make a lot more money doing that. Then you can't bore making. So I was like, well, what do I do? He's like, basically get up to Natchez, Alaska. I'm like, where is that? He says, above the Lucian Chain, looking up on a map. Back then, you couldn't look on a computer. You had to pull out a map,

• 29:48Speaker 01

  buy an Alaska map. And so I called a plane to Anchorage, I called a float plane to King Salmon, Alaska, hitchhiked to Natchez, Alaska. There was no Uber back then. Literally hitchhiked in, set up in tent city, where people go to get, before they have a job, you get set up in tent city, put your tent out, on the tundra, by the way, and you go around to the boats, and you ask them for a job. You're basically a greenhorn. It means you're a rookie out there.

• 30:10Speaker 00

  You have to convince them to get on the crew.

• 30:13Speaker 01

  That you can get on the crew, right? They're looking for some help. Just a few of the boats, most people were all staffed out, but a few of them needed just a greenhorn that they could pay a lot less, right? You get a less cut of the take for the boat. But I ended up getting a job on a boat that summer and had the wildest experience, commercial fishing for sockeye salmon in Alaska. Man, we were on 32-foot boats as regulated. You couldn't keep going out to get the salmon. So the salmon born in a stream, they swim out the ocean, sockeye salmon live out in the ocean, beautiful silverfish for like five years. And somehow in five years, they know it's time to swim back, the original river, go up and spawn, and then they die. It's a crazy cycle. So they come, during the peak of the season, they're just rushing into these same rivers. You catch them, but you can't continue to go out. There's a loran line back then and you couldn't cross that line.

• 30:55Speaker 01

  So if you set your nets, gill net, if you set it up in front of another boat's net, you're gonna catch three times as much because you're catching the first fish coming in. So these captains make their entire income just during the summer. So they're heavily motivated to catch that perfect set in front of that other boat. So you play chicken and literally somebody veers off in the end, someone chickens out, and sometimes you don't. And we rammed boats. We got rammed. It was crazy. We catch so much fish around like six foot seas in a 32 foot boat. And the back of the boat gets weighed so much down with salmon before you get unloaded to a tender boat out there in the ocean that literally you'd be like getting waves over the side. Some boats sunk when it was gone. It was, it was just unbelievable work. We worked 20 hour days during the peak of the season, which is about two to three weeks.

• 31:38Speaker 01

  And when you work 20 hour days, you only get like a nap here and there. Like you get, hey, go take a nap real quick. You can get an hour, get this. Or we get a break to eat real quick. You're so exhausted that then you stop being careful. So people were thrown out with nets. They would not hold on the boat when you're getting a bad wave and they crack their head open or skull open. So imagine this, you're out there fishing. You're getting rammed by boats. You're picking fish. You hear on the radio, somebody, somebody just got scalped. I heard that stinkily scalped. I don't know how they got scalped from the boat. Some metal helicopters are going in. National Geographic's coming over filming the boat action. And I'm out there for this chicken finger dream. Nothing was gonna stop me from doing it. And sure enough, made good money doing both boil making and doing the Alaskan fishing trade. Came back. I lived off credit cards because I had another income.

• 32:23Speaker 00

  Before we get there, so there's this reoccurring theme in all these biographies. There's a story just like this. Now, your story's pretty extreme and you tell it in a wonderful way. And the way I summarize this is like, how bad do you actually want it? And like you have to actually ask yourself, like, if you're gonna compete against Todd Graves, are you willing to work 95 hours a week for a boil maker after the, if you buy your suit and your briefcase? And they're like, get out of here, kid. We're not getting you any money. It's like, that's fine. I'll find another way. 95 hours doing shift work in a boil maker. You're gonna take a flight to Alaska. You're gonna hitchhike. You're gonna live in a fucking tent.

• 32:56Speaker 01

  Right.

• 32:58Speaker 00

  Trying to convince.

• 33:01Speaker 00

  Captains of boats that you could die on to hire you. And then to do that and then to work 20 hours and the entire time. What I love about your story is it's like, I'm not thinking about sockeye salmon. I'm thinking about my chicken finger dream.

• 33:16Speaker 01

  Exactly. I would have worked construction in Nebraska if that's what paid. I love the fact that I went to Alaska and did that and did something as cool as sounding like a bowler maker, right? But I would have worked, I would have gone and knitted blankets if that's where the money was at. Anything I could do to make the money because I was determined, man. It was like, I was like a nerd in the entrepreneurial club in college. Like we had, then people would start up, hey, I got this, you know, like I steam clean floors. I do these different things. And I saw these, some of these entrepreneurs have these really cool ideas. And that's when technology is really rolling. But they would just stop, you know, a couple of years in college, you'd be like, ah, I just, I don't think I can do that and do it. And I'm like, that's the key, man, is when you set a goal, you do it to success or failure, but you don't stop. You don't stop. Actually with my original partner, we went out to a camping trip in North Carolina.

• 34:01Speaker 01

  I'm like, we need to make this like, we're going to go in and we're going to camp and we're going to literally commit to this. Because like you set an oath that you're not going to ever, ever stop, then you don't stop. Because during the time, man, those two years took me to raise money for this, two years.

• 34:14Speaker 00

  Tell me, wait, I love this idea. Run that back to me. I just did this episode on Elon Musk and he has a great mantra. He's like, retreat is not an option.

• 34:22Speaker 01

  Retreat is not an option. Burn the ships, man.

• 34:24Speaker 00

  We are going to succeed or I'm going to, he's like, you will know when I give up because I will be dead.

• 34:29Speaker 01

  That's the spirit.

• 34:30Speaker 00

  That's the way he went on this camping trip and to do an oath.

• 34:34Speaker 01

  Yeah, he was literally.

• 34:35Speaker 00

  But he gave up.

• 34:35Speaker 01

  Literally, it was, it was literally to say like, round a campfire. I mean, we, we did everything but just like become blood brothers, you know, to do the deal. It was like, we're going to do this, right? We're committing this. We're going to make this happen. We're going to see it through and somehow it doesn't work, we're going to die trying. And literally put that on the line, going out and fishing Alaska. People died in that, in that fishery. God bless them, you know? And but yeah, it's just that, anyway, I think another thing too is I think when you have that relentless, so for me is during that time, I was like, I came up with a quote, man. I was like, nothing ever happens unless someone pursues a vision fanatically. Like you have to be so fanatic. when you have a dream and others don't believe in and you see it you have to be fanatical so fanaticism what's carries you through you know and so I see this fanaticism and I study people

• 35:20Speaker 01

  right and so like like your podcast I hear things and I'll get reaffirmed with things then I'll learn new things new ways I can look at things and do it yeah man but it's great you know and I like it too because it's like you can learn from it and you can get inspired by it being established because you need that you need that fuel to keep rolling and it's good to hear other people are doing what you do and then you learn from other people I'm constantly stood in the business so it's like you learn other things from businessmen and business women but for me too is I love to be around celebrities like the people that are successful at whether they're an entertainer whether they're they're actor actors athletes whether they're athletes they all have this common core and you know what I see the most common core of all the people that are

• 36:04Speaker 01

  successful for me is they're never satisfied never satisfied and so we care that in our business about never being satisfied but it's a bad way to say it so that you say never satisfied it's like well y'all aren't happy what we did you know with this opening no no no since we changed the word for never satisfied it's just like we're always gonna raise the bar so we'll raise the bar so we did great at that opening that was awesome these were all the good things we did but you know what too is these are some of the things we can get better at we can actually get two seconds faster you know and this is how we're gonna do this look we needed the staff more we messed up here we didn't give enough support because we wore out a crew we should have had more crew members on staff you can always learn so I see that with people I see it with the best athletes I see it with the best actors it's like that film was good but man I could have done this

• 36:47Speaker 01

  better I could have done that better and then like if you don't wrestle the rules then you're always gonna keep striving to get better and better and better it's like competition I love competitors because they make you get up even earlier in the morning because it's like we got other people that are gunning after us

• 36:59Speaker 00

  you said the funniest thing so one I think one of your most important messages is like we need more founders that refuse to sell their businesses like this there's this huge entrepreneurial industry that didn't exist especially when you were starting your company it's like and the entrepreneurial industry is influenced by investors not entrepreneurs and it's like start scale sell then what then what are we gonna do you have a great line where you're like if you create and do you never want to stop creating and doing and now you just sold the vehicle that you created and do and and create into right and so then what then you're working on your second best idea or your third best idea and I think like one of the most important ideas that you have is just like Everybody in your business, the reason I said this on the episode I did about you,

• 37:41Speaker 00

  Todd's smoking them because he's competing against corporations. All the, who are the founders in your business anymore?

• 37:48Speaker 01

  That's right.

• 37:48Speaker 00

  Like, they're either dead or they sold out.

• 37:51Speaker 01

  Right.

• 37:51Speaker 00

  And then I love, somebody asked you the question where like, out of like, the competitors, like, who gets you fired up or maybe will keep you up at night? And you're like, and they may not even exist, but they will exist in the future. Cause you know that same personality types of you.

• 38:04Speaker 01

  They're coming.

• 38:04Speaker 00

  They're coming. It's like the young Todd Graves, that has that fire in his soul and he wants to do exactly what I'm doing. And you're like, that's fine, but you don't understand, this is what I do. This is in my DNA. This is, this is like, this is how I feed my family. So if you want to come, just understand I'm on this 24/7 all the time.

• 38:23Speaker 01

  You better be ready.

• 38:24Speaker 00

  Yeah.

• 38:25Speaker 01

  You better ready because I'm coming after you.

• 38:26Speaker 00

  I just saw you at the UFC. Are you a UFC fan?

• 38:29Speaker 01

  Yeah, I like all sports, you know? And so Dana invited me to come and get to see Poirier do his last fight, Louisiana legend, man, you know?

• 38:36Speaker 00

  But seeing those guys, like, it's the same personality type. So the reason I bring that up is because you were earlier in the conversation, you were breaking down on like, the species of bird and like, when it's, and like, the amount of detail you just explained to us. The thought I had in my mind was not about chicken fingers. This is an important point you're making. It's like the same personality type, just pointing at a different endeavor. John Jones, you know, probably the greatest UFC fighter. UFC is the only sport like I'm obsessed with and I watch all the time. Cause I don't have time to watch anything else, but I can watch one people per year a month and have an understanding of what's going on. And I heard him, he said the same thing that you said in that interview. It was like, oh, you want to come compete with me? And this is how I feed my family. And he was fighting surreal gain and he's just like, you know, and he was studying him, just like you, and understanding the detail. And he's like, I know what he does when he wants to go left and when he goes right and everything else.

• 39:20Speaker 00

  He goes, I assume that this guy's trying to destroy my legacy and trying to take the food off my family's table.

• 39:26Speaker 01

  Yeah.

• 39:27Speaker 00

  And I will not allow that to happen.

• 39:28Speaker 01

  That's right.

• 39:28Speaker 00

  The same level of intensity that you're applying to your business.

• 39:31Speaker 01

  Absolutely, man. If I got somebody to come in and compete, like, you're competing with me. My livelihood and my managers and my crew members depend on this restaurant, right? You can come in, you're coming, you're going to open up across the street here. These people feed their families off this. We're going to go out and you better be strong because we're not going to give up. And, and look, I've done this, I've done this for 30 years. And I'm just as fired up as I was the first day. It never leaves you, you know? It's, it's a blessing that entrepreneurs have because when it's so hard to start your business. You gain this great sense of appreciation. Appreciation for your crew that are working so hard beside you. Great appreciation of customers coming in, paying their hard-earned money to do this. Appreciation for communities that embrace you. So that sense of appreciation, which is what our culture is all built off of,

• 40:16Speaker 01

  100% off appreciation is, it never leaves you. You always feel appreciative, so you always want to take care of people. It's like, comes in, people are like, "Oh, man, you just sell the business worth all these billions. You can just not worry, da-da-da." I'm like, "Yeah, well, then what happens? What happens to my management, who support their families? What happens to the crew members that come up? Because if I sold the business, you think they might have the same values? I mean, really hard to find a buyer that would have the same values that I do and that I believe and have that deep sense of appreciation. They bought it for this, they want it to be worth this, because they're probably going to sell it themselves. They're looking at it as an investment, not a vehicle to help people. So I think when entrepreneurs go and then you get successful and then you grow the business and then you're successful at growth and you create something,

• 40:59Speaker 01

  it goes to a level, it goes from fanaticism and passion and a dream, then you get purpose. And so my purpose of Raising Canes is, well, God made me good at chicken fingers to help people. And what I mean by that is I have 75,000 crew members. We have so many part-time people that work. I love part-time, quick-service, uh, crew members that come in. We have an opportunity, it's most people's first job is a restaurant retailer. They have to come in, learn values, man. What are those values? "Hey, look, we're going to work hard, we're going to have fun, we're going to deliver great customer service, we're going to deliver that craveable chicken finger box." Why? Because people are spending their hard-earned money here. That's why we're going to do that. And what we're going to do with the money that we make, we're going to help out our communities. We're going to give that to people and as we scale this business and it grows, this thing's getting into its values of billions of dollars.

• 41:44Speaker 01

  And someday when I clear debt, I'm like, "Three billion dollars in debt now." Eventually with our growth, you know, as we go, God willing, we'll go and then we'll be able to pay down debt and we'll have, "Oh, when I have this free cash flow coming out and doing, we're going to be able to help people in a big way." I can't wait for that phase of our business, but that's purpose, man. So you start realizing, it's not what you make, it's what you give. That's a better way to keep score. So when you have that purpose, and what people to do is to keep that purpose because Too many great restaurant entrepreneurs and founders of the business, especially in the restaurant business, they sell, they sell. And look, they're so passionate about it and they talk about it like, man, I have the passion and I love what I do, dah dah dah dah dah. And then all of a sudden, they sell a majority stake of their business because private equity is so good at putting that package together. Generally, the numbers are five or 10 million because entrepreneurs

• 42:29Speaker 01

  put everything back to the business growing it. They prove in a successful model, either regional, or they prove it out in different regions of the country, which then make it a national. Multiples go up and they're like, hey, we'll come in, we'll give you a, we'll give you five million, or we'll, we'll give you 10 million. But they take controlling of the business. And then these entrepreneurs are like, oh my God, we've struggled so long, we're still living by means, I got debt, I got all this stuff. They, they will sell and then they lose control of the business. And if you're private equity, and private equity serves a lot of good purposes, they also serve some bad purposes. They take founders out of the deal. And so decisions get made differently. So a founder is powerful because a founder is their baby. It's personal to them. It's personal. So for me, to today,

• 43:13Speaker 01

  I read customer comments and look, we don't deliver every time. We will screw up. We'll have somebody that was rude. We'll have something that messed up their order or something like that. I take it personal. My family, I take it personal. I'm like, you spent your money here and we didn't deliver on that promise. I don't know private equity really cares because it doesn't affect our overall sales. It's a small percentage of what we're doing is, but you're personal on that. Your crew is personal because they're working their ass off to fulfill your dream. And you're sitting there and you're in a good financial position, but they're busting their butt. Management's busting their butt. Crew members are busting their butt. I know when I'm working at 3 a.m. and I'm like, oh man, I'm tired, I'm going to bed. I know there's crew members still closing up somewhere around the country, right? Somewhere around the world. Somebody's closing up that, that way and it's that appreciation.

• 43:55Speaker 01

  So when you lose that founder personal, that this is their baby, you start making the wrong decisions right now. You, you really do. And so, so private equity, they have their shareholders and they have to make a certain amount of money. They're not getting the returns on their dollar. They'll make other decisions that will go. Maybe they price. Maybe they, they raise their prices and maybe it's not the right time to raise their prices. Maybe they cut their quality. Maybe they cut wages for crew. Maybe they do, maybe. They don't do the bonus plug, their programs aren't as good as the year before. All those things start to make the business not, not special. You know, and so I just, I just encourage people, don't, don't let money be one of your, your major goals. Because if you, if it is, if it is, you end up living a shallow life, you know? You, you end up, you end up, you end up saying, I need that $10 million.

• 44:40Speaker 01

  But you lost control of your baby and then it's not special anymore. It's not worth the dollars. Stay with it, grow, learn, bring in other people to help you business the things you need help with. Learn it and do it. Probably they can come in and say, "Hey, look at the staffs we have in finance, accounting, IT, and all these things that you think are too hard for you to figure out." It's not too hard for you to figure out. They had to figure it out too at one point. And you can figure that out. Bring in some great people. Stretch yourself, hire those people, bring them in. Learn the details yourself. I'm not good at IT, but I know enough to work with the great people to still add value. If that makes sense. I just wish founders would hold on. Hold on, don't get rid of it, man. Like, and why would you? If it's something you're so passionate about, find that purpose. Find that purpose.

• 45:23Speaker 00

  The best leaders in business are able to spot patterns, but you can't spot patterns if you can't see your data. And most businesses are only using 20% of their data because 80% of your customer intelligence is invisible, hidden in emails, transcripts, and conversations. Unless you have HubSpot. HubSpot is where all of your data comes together so you can see the patterns that matter. Because when you know more, you grow more. And that is a pattern that never fails. Visit hubspot.com today. That is hubspot.com. I think that's one of the most important messages that we could possibly get out there. There's two things. I have this idea, this maxim of anti-business billionaire, which I'll get to in one second. But what I'm trying to do is exactly, try to like, bring attention to exactly what you're talking about.

• 46:08Speaker 00

  It's like, we celebrate the sale, but we don't, it's like, what happened to the guy for the rest of his life? Is he still happy about this? And so, you know, Trader Joe's, right? The founder of Trader Joe's, his name's like Joe Colombo or something like that. I can't even pronounce his last name. He did such a wonderful service to the future generations of entrepreneurs. Because he writes this autobiography that's excellent. And he tells the story of Trader Joe's. 90% of the book, okay, he, he wound up selling Trader Joe's in like the seventies. Okay. And he lives for like another like 40 years. 90% of the book is this guy is so fired up. He loves Trader Joe's. He came up with a new concept. 90% of the book is just talking about how amazing Trader Joe's was. All the different ideas. He's the same personality type that you had, right? But he made the mistake that you didn't. He got scared.

• 46:53Speaker 00

  There, there was a bad economic climate. He, he, he wound up selling, I think it was to Aldi, which still owns the business today. If I'm not mistaken. What's fascinating is just look at the time and effort he dedicated to Trader Joe's in the book. And then the last 10% is, yeah, I invested in some real estate. I did some consulting. And he's like, it goes from like, this guy's fired up every day. I'm in love to, I sold my baby. And then it ends, the last page. He's like, I have to tell you something. Uh, I was not true to my own self. I regret selling. Thank you for listening, Joe Colombo. Okay, that's the last page. The book is published, he dies the same week.

• 47:32Speaker 01

  Gives me chills.

• 47:33Speaker 00

  Think about that.

• 47:34Speaker 01

  Yeah.

• 47:34Speaker 00

  He's like, don't do this. I should, I wish I had the courage. I wish I wasn't so scared. I wish like, I just stayed.

• 47:42Speaker 01

  What a good man to just, just, just be honest, right? To everybody and I wish I didn't do it. Cause he wants to inspire people not to make the same mistake.

• 47:48Speaker 00

  Paul Orfalea, the founder of Kinko's. I did an episode on him too. He thought, oh, I'm, I sell for billions of dollars. I'm a success. He's like, I can't even go in the store. I can't look at it. Like I got the money, but like, I don't have exactly the purpose. I love the word, the word they use, purpose. So this is something I'm trying to draw attention to on Founders Podcast. It's like these anti-business billionaires, right? They're not in it for the money. Somebody like James Dyson, like the Steve Jobs, like an Yvon Chouard from Patagonia. It's like, these people are just like you. So obsessed with the quality of the product that they are making. Right? That is the main goal. I'm going to make a, the best in the world, right? Then they retain control. And the point I make on this is one of my favorite maxims in the history of entrepreneurship comes from Henry Ford, who also owned 100% of his business.

• 48:32Speaker 00

  1919, he owned 100, he bought out all his old investors, owned 100% of Ford Motor Company, right? It's it's very equivalent. It'd be like owning a 20 billion dollar company today. He says money comes naturally as a result of service. Exactly what you said. Stop fucking worrying about the money. If you just serve, can you make somebody else's life better? That you're by their act of service, then keep doing that and then figure out a way to scale up to serve more people. And guess what? The money will come automatically to you. So the anti-business billionaires is they put the quality, they're obsessed with the quality of the product they're making. They retain control and guess what? If you're obsessed with the quality of the product you're making and you retain control, you wind up with the money anyways.

• 49:08Speaker 01

  Absolutely. If you do things for the right reasons in business, money will come.

• 49:12Speaker 00

  Yes.

• 49:12Speaker 01

  A hundred percent money will come. You know, it's just like sales driven. You're gonna be, do you want to be profit driven or do you want to be sales driven? Sales cures all woes. You can raise your sales. We're we're uh number two on average unit volumes in uh quick service restaurants, Chick-fil-A than us. And I think McDonald's might be a million behind us or per unit, per restaurant, all the way down to a lot of our competitors are like a third of what we do, sales wise. But you, if you're sales driven, you're gonna do exceptional customer service. You're gonna have more people on shift, right? And then cutting it shorter to try to save labor. You're gonna uh you need highest quality products to do craveable. All those things that you do that do that, then you end up making more profit because you have more sales, you have more happy customers, you have more repeat business

• 49:55Speaker 01

  volumes and you get the volumes and you get flow through dollars and you make more money.

• 49:58Speaker 00

  This is where the finance industry gets it wrong. And I think Bezos said this perfectly. He's just like, no, no, over the long term, if you put the interest of customers first, it is the interest of the shareholders. It just takes longer, but that that's where you actually create the value. It's like serve the customers and then your shareholders will make plenty of money.

• 50:15Speaker 01

  The dollars, the dollars are coming. It's proven time and time again, and I'm an example of that. You talk about entrepreneurs going to a certain point and they get they get scared at certain times. Great example is Tony Tan's Chicago who had Jolly Bee, right? So Jolly Bee's um is a Filipino concept. And he was a uh like engineering student. And he explained to me, he said, look, if you were a smart Filipino kid, your parents were like, you're gonna be an engineer. He's like, I hate an engineer. He goes like, but we don't tell him, we went and looked at a dairy to see the engineering behind doing a dairy or whatnot, but they had a little ice cream shop up front. He goes, that's what I was interested in. I was watching them do the ice cream and run the register. So he started an ice cream shop. Then he added a burger, then he added spaghetti, crazy, crazy menu. And became this, this like success. He opened that one little ice cream shop, turns it into a restaurant.

• 50:58Speaker 01

  Then he starts growing it. So he's like, my goal, I want to be the largest restaurateur in the Philippines. So he's set on this goal. He has this fanaticism. All of a sudden McDonald's announces, we're going, we're going to the Philippines. They saw success that he was selling all these burgers and his accountant and his like financial people were like, you gotta sell, you gotta sell. This, this concept's amazing. McDonald's started in the US. They're just gonna go and blow us away. Sell now. You're gonna make all kind of money. You can live the rest of your life and, and be happy. He's like, no, I won't be happy. I like what I do. And he's like, what do I do? He said, made me nervous as hell, right? And, and, and bean counters will do that. They're like, and they were showing him what, what could happen. McDonald's put him out of business. Could be a millionaire or, you know, or he could be worth nothing. They put him out of business completely. He said, you know what?

• 51:40Speaker 01

  I'm gonna put the goal. I'm gonna beat McDonald's. I will be, still be the largest restaurateur in all the Philippines. Well, he did that. McDonald's came in, he blew them away. He grew all out through the Philippines, became the largest restaurateur in all the, all the Philippines. Set his next goal, right? Fanaticism, right? Am I stopping there? I want to be the largest restaurateur in all of Asia. Think of all of Asia. He did that. He did acquisitions of other restaurants and did his largest restaurateur in Asia. Tell me what's the next goal? I want to be top five largest restaurateur in the world. This is what I want to do. And this is the big boys. This is McDonald's. This is all the big ones. That's his next goal. But that fanaticism keeps him going versus getting scared. It's okay to be scared. It's actually a good thing, but then say, I'm fanatical. I'm gonna beat it. I'm gonna see it. And so I wish just more entrepreneurs would do that because so many things could be out there that could scare you.

• 52:23Speaker 01

  So many people are gonna tell you, believe in yourself like you always did and don't give up. Don't give up. You're, if you, if, if you didn't give up when you started, that's the hardest part. You didn't give up when you're growing that deal, that's the hardest part. Don't give up now. Go, go. And you don't need those other things because if you lose your money, you lose purpose, then you lose purpose in life. There's other things to do, but it's not your passion.

• 52:41Speaker 00

  Let's go back to how you're financing this one. And then I want to go to how you financed the, the next 28 and that insane story. So you got the wild bill, you got the refinery money, you got the sockeye salmon money. Now you're playing credit card roulette.

• 52:55Speaker 01

  Yeah, yeah, yeah. I had to do it the whole time when I graduated, right? I mean, I bartended at night when I was, we were working with a business plan and then, you know, then, then trying to start the business. I'm literally, I don't have any, any income. So I'm just, I'm living off. Bartender money from tips at night and then literally back then too, you could get credit cards, they were 18 to 22% interest rates and you can get as many as you wanted with $5,000 limit. So that's just what I did. I just said, yeah, I have a job bartending and okay, well sure, here's $5,000 credit line on this deal, but you're gonna pay 20 to 22% on that. And so I just lived off of that. And you know, so what I did was I had enough money of my own to come back and to live off of and put into the project. At that point, I was able to raise some preferred shareholders and I raised maybe $60,000. These were people.

• 53:36Speaker 00

  So these were called like angel investors today?

• 53:38Speaker 01

  Yeah, yeah. I mean, you know, these were like my bookie. Guys, well, guys I worked Buller Making.

• 53:43Speaker 00

  Hey, Bookie's got cash.

• 53:45Speaker 01

  Yeah, yeah. It was, can you take this $10,000 investment in cash? I'm like, sure. And I gave it to the bank. I'm like, came from my investor. But I was able to raise that and I was able to get, I was able to get a $90,000 SBA loan. And it was enough money to, for me to come in. I had this place, North Gates in L.A. shoe. I had a wonderful real estate broker, one of my mentors, Mr. Red Reynolds. This place had flipped over so many different times. And he was like, I wanted, I want for the landlord, laying in Tula Arbor, she was 94 at that time, to have something solid. I believe in you. I believe in your fanaticism. You will make this work. So I'm telling her to hold, basically held the location for a year for me.

• 54:23Speaker 00

  How impactful were those words of encouragement? Cause you're, you're young.

• 54:27Speaker 01

  Like somebody you respect, that was just a good man and a really good, good real estate broker. I really respected that. Cause he saw that. It was affirmation that why I was being so fanatical and trying to talk everybody into it. You know what I mean? Except for the Buller Makers, he believed in me. I'm like, okay, okay. That's, that's his little win in my sales to do this. And basically told her, hey, it's gonna take him a year to put all this together, but I believe he'll do it. And now I believe you have a long-term tenant. Look, sure enough, we've been here for almost 30 years and we got like a hundred, 100 year lease going forward and, and the family, she passed away, but the family's like, no, you know, I'm trying to buy it. They're like, we just have pride in this, you know? So we'll just keep doing, keep doing a lease. I said, but we'll give you a hundred years, you know, and options to, to stay in this original location.

• 55:10Speaker 00

  Do you, do you buy the real estate now for the new store?

• 55:12Speaker 01

  Wherever I can. Absolutely. Wherever I can, I do. Just, just good real estate. A quality real estate is just there's so many people that own it. It's part of larger shopping centers, larger developments. A lot of it is in trust, you know, family trust and things like that. But everyone I can buy, I buy absolutely.

• 55:27Speaker 00

  They won't sell you this one though.

• 55:28Speaker 01

  No, no, they did. They like being a part of it, right? You know, but they give me good. I got a good lease term on here. And plus, you know, what I put into this place, like I had to learn things, you know? Like I said, I had to learn plumbing, I had to learn construction, I had to learn this stuff. I didn't have, I really didn't have a lot of money too, to come in and, and, and, and spend much money on this. But this place is sacred, man. I can tell you every square inch. And later on after I do get on our discussion, I'll show you all these little points in this. This is original furniture that I went, I got at U-Haul, went around to all these equipment supply stores.

• 55:56Speaker 00

  I hope you have bed sheets that look like this somewhere.

• 56:00Speaker 01

  That's a damn good idea. There's some pajamas too, right? But, uh, but it, but it means something, right? And keeping this like this, like, like this, I can bring in management to here and show them this place. We have big, big, pretty buildings, all functional, everything. And they come here and go, this is our soul. Just remember, this is, this is where we started and we gotta keep that spirit going here.

• 56:19Speaker 00

  Dude, the one in Miami Beach by my house looks like a nightclub.

• 56:21Speaker 01

  Yeah, yeah, yeah. Just like literally the deal. I love that location.

• 56:24Speaker 00

  It's huge. So credit cards, SBA loan. You said it took a year for the development of, so you had the lease before you opened it?

• 56:31Speaker 01

  Yeah, yeah. No, so they didn't sign the lease, said it's gonna hold it for you, right? So, but, but this location was available and I knew it was gonna be awesome. It took two years, two years from the business plan to where I actually opened up the restaurant. It took me two years. And so literally from writing the business plan from class, going to the banks, getting turned down, working in refineries, then working in, um, in Alaska for the summer, then coming back that fall. And we opened in 96, so it'd be the fall of 95 when I got back. Then, so I had, had some money, I had a deal, I went, got that SBA loan and got, got the investors. And from there, then we started the construction process. We started getting the used equipment and looking at the equipment I went, I got from, from, I went into Houston and Dallas, restaurant supply houses, cause you know, restaurant businesses go out, nine out of 10 go out of business.

• 57:16Speaker 01

  I could go buy stuff and I'm like, I need a fryer that'll work 60 days. Like, give me your cheapest fryers. They had to be 85 pound fryers. And they're like, well, this one's good. I'm like, yeah, it's 10 times as much. I need someone to last because I know as soon as I prove this will work, I know I can get another loan. You know, thank goodness we made money and so we we we opened up like I was I was so excited. We reconstructed, we're ready to open up, we got registers back to Office Depot, there's little registers. And once they figured out how to program them, I went and started waiting people in the restaurant. And people came and people liked it and then we made thirty dollars the first month, that's what we made. People like, that's all you made? I'm like, no dude, that means I could pay my crew, I could pay rent, I could pay, you know, literally payroll's taken care of. I can pay the vendors, we're working and steadily off of that, we started making more and more money.

• 58:00Speaker 01

  I could replace equipment as we went, just basically dumped everything back into the restaurant. And sure enough, and I was like, like, this is working great, we can go to the other side of campus. And we can go in and do that, I brought the business plan to the SBA lenders that did us. And I got to that one literally eighteen months later, I was able to buy the piece of property, construct a new building. And open up eighteen months after the first one, it took two years to start this first one on a shoestring budget. The second one, I have a piece of property and I got a brand new building that we opened up. And it showed efficiencies there, what was really amazing with that location. Is that it was on the other side of campus, it also had traffic flow from neighborhoods, office buildings, things like that. So we had not just students coming in, all of a sudden we had, you know, businessmen and women coming in for lunch.

• 58:45Speaker 01

  We had moms and dads picking up food on the way home, we had T-ball teams on Saturday, we had church groups on Sunday. And that's when I got the vision, I was like, this isn't just a college concept, it's what I thought it was. If I just work for college kids, I'm like, this works for everybody. And that's when I got that fire, man, to grow at that point, that's when I got the vision, man. And the vision at that point was, and it wasn't, it wasn't articulated this way, but what I wanted was locations all over the world. And I'm like, I want to be known as the brand for craveable chicken finger meals, great crew, cool culture and active community involvement. Like, those are the things that turned me on with that deal, right?

• 59:17Speaker 00

  What do you mean it wasn't articulated that way?

• 59:19Speaker 01

  Well, so I just, I thought, the vision was there, I just didn't put it down. And so I'm like, I asked myself, you know, it's like, I was like, you know, why do you want locations all over the world? I'm like, because I want to go in every community because I love hiring people to come in and build teams. Creating opportunities, job growth, teaching them values, and I'm like. Man, he's like, I get turned on by customers coming in and loving the food. And I'm like, and I'm gonna keep giving them quality chicken finger meals, that craveable product. And I was like, now I'm able to give money back to the community. I'm like, and I want to be able to give money back to the community, that active involvement. I'm like, but we have this cool culture, man. I want to emulate that other places. I want to be the place that, look, I worked in the restaurant business, high school, college, man. It was like, it was not positive motivational management, man. It was like, do this, do that, you know, like you screwed up.

• 1:00:03Speaker 01

  Yeah, it was, there was no music in the kitchen. Can you imagine working back there? It was just negative environment because the manager was negative. Because the owner didn't appreciate everybody, you know what I mean? So it was just this negative feeling. I can get people from other restaurants without treating right. And they're not like giving the customer service. They come here, they're treated right, they have a good environment, we've got music cranking in the kitchen. We're having fun, we're a team, and it's positive motivational management. It is like, good job. Hey, thanks for taking the stuff out to the trash, out to the dumpster. Wow, that's good toast. Hey, good job on the shift, man. And that's how you motivate people. Praise costs nothing and means everything. Means everything, absolutely, man. And this team working is good. And also too is why I like, why I love operators is, it's like when I was on the football team. It's constant coaching.

• 1:00:47Speaker 01

  Oh yeah, it's good pass. Oh man, you screwed that up, man. Like, make sure your arm goes back. And, you know, hey, block harder, do this, you know, like, you're getting constantly coached. And nobody takes it bad. No one takes criticism bad because it's all about doing better, winning the game. And it's the same thing in the kitchen. You're like, hey, man, toast, toast needs to hurry up, dah dah dah. Hey, great, that's great toast. Like, you can mix those things in, the corporate environment. And this is how you get weeded out of Kane's corporate is, the people that can't take constant coaching. And it's coaching, right? You know, it's like, well, no, we should, we should meet every six months on a eval and how we're doing and blah, blah, blah, and all that stuff. It's like, no, every day's an eval. Like, every day we want to get better and a lot of corporate people, one, if you make mistakes, like, I encourage, make mistakes.

• 1:01:30Speaker 01

  We're not making mistakes, we're not pushing ourselves, we're not trying new things, we're not doing things. But let's learn from them, but let's admit our mistakes. I see corporate people come in and it's like, like you don't, don't address an issue. You just say, oh, we're doing dah dah dah dah. It's just like, hey, man, we screwed up on this, we learned this, we're gonna do this differently, let's move on. Like, it takes all of 30 seconds. When you create that kind of environment, like in a coaching situation or in operations, that's, that's, that's, that's a challenge for me. On growing the business because we're bringing in some really experienced people from other organizations.

• 1:01:58Speaker 00

  Right now.

• 1:01:58Speaker 01

  Yeah, right now, as we do that, a lot of the culture is you don't admit mistakes. You don't, you don't want to, you don't, one, you don't want to admit mistakes and two, you don't want to, you don't want to be, you don't want to be coached. It's this academia type of, of things like that. I'm like, look, man, I'm learning every day and I'm the first one always to say, man, I screwed up on that and that was a bad decision. Then the team knows, hey, well, once it's validation too, he doesn't think he knows everything and two, it's okay for me to make mistakes, you know, we, but we do need to learn from them. Like Todd's not going to make that same mistake over and over. Like we know that and I won't either, right? And so that's some of the, the challenge in growth and in, in, in restaurant growth, we get the operators and, and if you're an operator, man, you just have that culture and we have to get as people that are intrinsically motivated, right?

• 1:02:41Speaker 01

  And so we can pay people really well because we do, we do good, but the, but pay doesn't matter, man. It's like to the people, they want to make a good living, of course. Title doesn't matter, right? You know, it's like this VP executive, all these like titles and stuff like that. People are like title crunching up. I can literally interview somebody and, and I can see the things that's like, it's like they're going after title, they're going after pay, they're going after these things versus intrinsic motivation. Like I like to lead people. I like to be part of good teams. I like to be part of high performing teams who gets the most out of me. I like to be excited by what I'm doing at work. Those are the things that when you hear that, you're like, you're intrinsically motivated. I like what y'all do back in the community. Hey, have you ever thought about supporting this? I think this is a great organization. When you hear that kind of stuff, because there's plenty of brilliant people, there,

• 1:03:26Speaker 01

  there's so many brilliant people who do the same job or that have, have the experience that will learn that, right? They have the intelligence to do it, but it's heart. It's a hundred percent heart, man. If you're intrinsically motivated to do really well, okay.

• 1:03:37Speaker 00

  I love the idea that you said that they have this almost like theoretical, like academic understanding of business and that usually only survives in an environment where you're separated from the customer. It's like if you're working here, there is no theory. It's like we made it, we can see the customer eating it. Look at their face, like what is actually happening.

• 1:03:53Speaker 01

  Separated from the customer and separated from the crew. Corporate environments, like when I started up, I was the first guy to wear a Kane's T-shirt to like conferences.

• 1:04:02Speaker 00

  Yeah.

• 1:04:02Speaker 01

  Everybody else is in a suit and tie. But there are crew members in the restaurant wearing like, you know, jeans and T-shirts. It's like, you know, it was this business mentality from here. You're separated from the customer because you're not in your restaurant seeing who's being served and you're also not with your crew to see what gets it. You're in the suit. So immediately when you go in with your suit into a restaurant, they're immediately like there's a separation, there's a divide. When I walk in a restaurant, I'm dressed exactly like them and I speak their language and I talk to customers. They're like, there's no separation, like, oh, that's the boss. They're like, oh, that's the founder, right? That's a different title.

• 1:04:35Speaker 00

  You know Les Schwab Tire Company on the West Coast? Okay, I'm gonna, I'm gonna send you his book. It's very hard to find. I found this because Charlie Munger is like one of my heroes and he, you know, he had like the complete history of American business in his head. And if this, he's like, you need to read about this guy. I just read the book. You would love Les because he sounds exactly what you're saying where he competed in a very difficult business. You come into fast food, QSRs, it's like that was an established thing. You're coming in and like compete, there's competition everywhere. And he goes into selling tires and he just smokes every single other person. And the book starts because he's like in his 60s and the business is named after him. Okay? So and he goes, I need to put this in a book. Just so you know, I didn't have a ghostwriter.

• 1:05:18Speaker 00

  I wrote this all myself on a 50-year-old typewriter. He goes, this is how I want the business to run. If the business is not going to be run this way, take my name off the business.

• 1:05:27Speaker 01

  Take my name off the business.

• 1:05:27Speaker 00

  And he's like, you know, old school guy, he's cursing all the other boys, like, god damn it. And he's just like, I'd always tell the goddamn people in the office, like, the only reason they have a job is because the people in the store selling tires.

• 1:05:38Speaker 01

  Exactly.

• 1:05:39Speaker 00

  And then he would talk about this, he's like, if you're, if you're out, you're gonna love this guy. I already know this for a fact, I'll send it to you. He's like, if you spend 30 days outside of a store, you forgot half of what you know. He's like, you have to be, he's like, every single thing, he's like, we exist to serve the people that are serving our customers.

• 1:05:55Speaker 01

  100%. It's why we call it a restaurant support office. We're not a corporate office, we are a restaurant support office. We're here to support the people that are serving our customers, 100%. We have these monitors set up in our offices and it has restaurants and you can pull up any restaurant, our whole system. I want people, when they're leaving our office, our restaurant support office, to see there's people still working, right? When they get there in the morning, there's people opening up, doing the restaurant, doing it. There's constantly working. So you see it every day. You're walking by that every day, you're like,

• 1:06:28Speaker 01

  ladies and gentlemen, that's where we do our business. And our job is to support them. Because when you go to bed at night, they're gonna be working. When you get up in the morning, they're gonna be opening the restaurants. We got 75,000 crew members across this system. We're here to support them. We're here to make their job better, easier, more efficient, more fulfilling, the whole bit. And keep that going. Like, and so you have to like, you also have to do is entrepreneurs are very erratic, unscheduled, that, you know what I mean? Like, so, you know, most of us, as a general deal, it's like, people are like, what's your schedule like? I'm like, my schedule's all the time, everywhere, however, whatever. It could be 3 o'clock in the morning.

• 1:07:02Speaker 00

  Are my eyes open?

• 1:07:02Speaker 01

  Yeah, literally, it is. And it's like, if it means no sleep that week, it is what it is. It means I can take off a day and go climb a mountain, I'm gonna do that. You know, whatever, whatever call for the business, then you answer that. So there is no schedule, there is no that. And so the discipline comes from the focus and the fanaticism. You're always gonna be there, you're gonna do it. But there are the things you have to structure and do it. And so like, for me, is to scale. I created the Kane's Love Department in our business. Respect, recognition, and rewards, man. Like, so, you know, when you have crew members that are working hard, right? One, things of respect are things that you should just do. You shouldn't get credit for them. So like, we're closed on every major holiday. That's not a reward, that's not recognition, it's just, it's just respect, man.

• 1:07:47Speaker 01

  It's like, do I wanna work on July 4th? No, I don't. I wanna be with my family and friends, I wanna enjoy the holiday. I wanna take off Christmas Eve, I wanna not work on Christmas Day. I wanna be, you know, holidays and things like that, I wanna be there. So if I respect for my crew members, if I'm not gonna work, you're not gonna work. I work nights, I work weekends, I work all that. But we don't wanna work on those days. I mean, the first July 4th I was open at this restaurant. I saw the crew was dragging. I was here working with them, right? But they're like, oh, because all their friends were doing something fun, their family did something fun. I was like, you know what? That's not worth it. So that's respect. Recognition is something you should recognize achievement. You should recognize tenure. You should recognize all these things. There are things to recognize all the time. It starts from the simple things like, hey, that's great toast. Thanks for being so friendly in the drive-through. Man, they loved you today.

• 1:08:31Speaker 01

  It's things like that. They're like, you work a year at Raising Cane's, you get a hard hat. It symbolized the first year I was there. All the crew members signs it. It's fun, right? Five years, you're getting the salmon. Those are the recognizing things, recognizing that deal and rewarding. So it's like, whether it's a, you know, a $5 gift card to go get a coffee at the local coffee shop, onto other bigger and better things that you get, there's rewards that you get. And I want to build that better and better. But like, if I just think of these ideas and they come and go, it's like, no, create a department around that. Like, like literally the apartment that thinks of nothing but will respect, recognizing and rewarding crew members every day and put a bunch of brilliant people, most of them came from from operations in the restaurant and they know this stuff, but build systems. So our next thing with that is versus saying, here's the gift card or here's a new Cane's hat

• 1:09:16Speaker 01

  or things like that. It's like build a point system, right? It's kind of fun, right? You'd be like, you know, you come in, you get it for every year you work, every month you work. You field shifts, right? Like, hey, so-and-so is sick. Do you mind coming in and working? They come in, you get points and I want to build it up a really exclusive type merchant stuff you could build up to and do, but like constantly getting better at that, raising the bar. But have people around that, not just the field. You have to put programs and things around these great thoughts. You have to get structured to do that. Sometimes that's tough for an entrepreneur.

• 1:09:44Speaker 00

  One of the best pieces of advice that I've ever read in a book is came from Mary Kay, who built that massive, remember the Mary Kay cosmetics? And they would, they would work people with like the pink catalogs and everything. And I feel Mary Kay was a master at understanding sales and human psychology. So she had, you know, one of the biggest and most successful sales departments. And the piece of advice that she gave, the organizing principle for her salespeople, sounds like a lot like what you're doing with Crew Love. And she goes, remember that every single person goes through life with an invisible sign around their neck that says, "Make me feel special." And I am a hard-driving person like you. I can be a bit of a dick. Just being clear. It's like, I'm, you know, kind of obsessed and... That, just knowing that, is like, actually helped me interact with other people better.

• 1:10:29Speaker 00

  And to kind of like modulate my behavior, it's just like, they just want, that person wants to feel special just like you do. Just like the person that helps you secure this.

• 1:10:36Speaker 01

  Absolutely.

• 1:10:37Speaker 00

  Like, man, Grace, I believe in you. Like, and it makes a difference even to hard-driving, you know, psychotically obsessed, fanatical people like you.

• 1:10:46Speaker 01

  Absolutely.

• 1:10:46Speaker 00

  It does work. Words of encouragement matter. And so I remember reading a biography of Henry Ford, who I already mentioned. And at the time, he was like a, he was, he was not successful. He was, he had this idea, he was like, hey, all the cars that were on the road at that time were either electric or steam. That's what people don't understand, is like, electric cars are not new, they were the default at the very beginning. He had this idea to make one with an internal combustion engine. Because he's like, then the fuel source, you carry the fuel source with you, right? And so he winds up meeting Thomas Edison. At the time, Henry Ford meets him. Henry Ford, no one knows who he is, he's not successful, I think he's already failed, he had two or three, two failed car companies before he finally succeeded, it was his third too.

• 1:11:30Speaker 00

  Again, just, I'm coming no matter what. Thomas Edison is the most famous person, one of the most famous people in the country. He has a hard time hearing, they're at dinner, like a huge dinner, and Henry, but Henry Ford's an engineer. And so he gets a minute with his hero, Thomas Edison. And he's having to like yell in his good ear about this. And I think it's like seven words or something like that. But Edison, obviously brilliant, he just gets it right away. And he go, he hits the table, and he goes, that's it, young man, you have it, keep at it. And then Henry Ford says in his autobiography, which he's writing 40 years later, he's like, those seven or eight words of encouragement, there was a hell of a lot of pain between him telling me that and me succeeding at this idea.

• 1:12:11Speaker 00

  But I heard that in my mind, and it kept me, I was gonna keep going, but a little boost was very freaking helpful. And I heard Edison, my hero, saying, you're good at this, you have a good idea, don't give up. I think it's really important.

• 1:12:25Speaker 01

  Fantastic, yeah, absolutely. But it's earned encouragement. Edison knew he had it, right? You know, and so, sometimes tough love, I had to learn that on Shark Tank. Tough love is also, when you get different entrepreneurs and things like that, and sometimes the ideas aren't good. And I wasn't good at it, like, it was always encouraging, and you'll find a way and do. But like on Shark Tank, they're like, hey man, you're gonna have to learn tough love. Like Cuban newbie, right? And then being around Mr. Wonderful, then they're like, I know it's heartbreaking, but sometimes the ideas aren't good. And are they doing it the wrong way? And you're not doing them a service doing it that way. So the tough love is to say, say, ah, this, but then help them to focus on what's really important.

• 1:13:06Speaker 00

  No disrespect to Shark Tank, but fuck that. Like, I cannot stand. I said this in the episode I did about you. It's just like, the future is unpredictable. Like, if you read history as much as any, like, I think I read history more than almost anybody else. It's like, all it is, is humans failing to predict the future accurately. Why would you sit there and think, you sit on a stage with a suit and a bunch of makeup on? And say, this kid's not gonna succeed. Fuck you. How about that? Like, let's see how it got you, you're gonna go. I hate people that do that.

• 1:13:31Speaker 01

  Yeah.

• 1:13:32Speaker 00

  And so my idea is like, I, obviously, there's a huge, millions of founders, listen to founders. And I get emails and all this kind of stuff, and we have conversations, it's like, what do you think? What I think doesn't matter. I was like, I don't know. I have no way to predict the future. All I know is like, when I started my podcast, people were like, there's too many podcasts out there. It's like, 2000, it was 10 years ago, there's no podcasts out there.

• 1:13:51Speaker 01

  Yeah.

• 1:13:51Speaker 00

  They're like, no one's gonna listen to a solo podcast. No one's gonna listen to a podcast where you can't make a living reading books for a li, like, that's ridiculous. It's like, it doesn't matter. I just, I actually hate that show, no offense to them. But it's just like, the idea of, I'm, I'm all-knowing, I'm an expert. There is no such thing as an expert in entrepreneurship. You know what you're gonna be an expert in? Raising canes. You're an expert in raising canes. And I'm sure you have a ton of ideas, which are obviously transferable to other businesses. But there's, you don't, we don't have predictive ability. I just did this episode on Elon Musk. I mean, you can say, well, there's a guy named Michael Moritz, who might be the most successful venture capitalist of all time. He's at Sequoia. He invested in PayPal, which is a successful exit. Okay, they sold it to eBay for, I don't know, 1.8 billion dollars, something like that. If you want exits.

• 1:14:36Speaker 00

  So, they sell that. Then, he, he already knew who Elon was. He invested in PayPal, which was Elon's company. Then Elon goes to start Tesla. And he pitches Michael. And Michael's like, uh, he's like, invest in my new company, you just made money with me. Michael's like, you're trying to compete with Toyota, that's impossible. I'm passing. Okay? That's a multi-billion dollar mistake on Michael's part. Okay? The funny part is, and, and I'm not doing this to shame Michael, because in the book, later on, he goes, that was, he's saying years later, he goes, that was a mistake, because I severely underestimated the level of Elon's determination. That's why I don't like shows like that. You don't know what's inside that person's heart, inside that soul. It might take him five years, might take him 10 years. There's a book next to me, that I just showed you.

• 1:15:21Speaker 00

  Before we start, okay? The reason that I've read 400 biographies of history's greatest entrepreneurs. Yeah, so I've read that book like four times. I'm about to do another episode on it. But the reason I bring that up and the reason that out of the 400 books that I've read, that this is my number one recommendation is because this is not a celebration of success. 90% of this book is James Dyson failing. He goes through 5,127 prototypes. He gets screwed over by, uh, he gets screwed over by, uh, partners, joint ventures. He was just like you. Please, I want to sell you a piece of my company. I need to raise investment. Please take it. Everybody's like, no, your company's not worth anything. So that's why he owns 100% of his companies to this day.

• 1:16:04Speaker 00

  But the reason that's so fascinating about this, right? Is because he has the idea, I think he's 44. By the time he finally has a product up to his standards that he owns completely, that he is now selling. And the book ends where he's just like, listen, it's easy for me to say to not give up, right? But there was times where my kids grew up seeing their dad as a failure. He would go in the back, do prototypes, be covered in dust because he's doing vacuum cleaners, carry himself inside and cry himself to sleep, covered in dust. That's what his kids see. But he's like, so it's easy for me to say like not to give up, but because I'm on the other side of that. And at the, where the book ends, he goes, they have one product, which is the vacuum cleaner. They're in one market and they're doing 300 million a year in sales. And then what happens?

• 1:16:49Speaker 00

  Now his company's doing billions of dollars a year and he's got, he's all over. He's got a bunch of different products. He's in all markets all across the world. The compounding between 44 and 75 was so important and it wouldn't have happened if he couldn't endure the pain. I have one of my favorite quotes. Endure the pain. Excellence is the capacity to take pain. It is. And you see that over and over again. It is, 100% is, it really is. And founders lead and they work with their heart and soul. Yeah, absolutely.

• 1:17:17Speaker 00

  In my conversation with Daniel Ek on this podcast, he said one of the most important ideas I've ever heard. He said, "I'm not obsessed about time. I'm obsessed about energy management. If you have time, but you have no energy, you're not going to accomplish anything anyways." I signed up for Function long before they were a sponsor of this podcast. And when you sign up, they ask you what your health goals are. And my response, in all caps, was "maximum energy." All of the founders, CEOs, and extreme winners I have studied have excessively high energy levels. If you're going to be the best at what you do, you need to maximize your energy and output. And that is why I've partnered with Function. Function provides access to comprehensive blood tests and other lab testing to help you improve your health so you can perform at your highest level. Function has made it easy for me to monitor and improve my internal health markers so that I feel at my absolute strongest.

• 1:18:02Speaker 00

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• 1:18:46Speaker 00

  and then get the data you need to maximize your energy. Again, that's functionhealth.com/cenra.

• 1:18:53Speaker 01

  For me, when I was growing and seeking advice, and I got a lot of really good advice, I also got a lot of bad advice that I was able to see through it, you know what I mean? And learn from. You learn from good and bad. Good examples, bad examples. People started saying stuff like, "Hey, Todd, you're so much in the details. You just need to delegate." Delegating. I hated hearing that word, "delegate." I mean, explain to me...

• 1:19:18Speaker 01

  Explain delegating to me. What do you mean by that? Well, delegate means you give other... I'm like, "No, I know what the word means, but how do I delegate this off?" "Well, you just hire good people, and you delegate them to do the work." I'm like, "I hire good people." And let's say out of a hundred point scale, if I can, if I can do it at ninety-five, pretty good, no, but no, that's perfect, but let's say operations, I'm at a ninety-five. But if I hire somebody good, but they end up being an eighty-five, but we need to be at that ninety-five to have success, I can't just delegate that, I have to supplement to get us back up to ninety-five, working with that person to do it, and over time, they might get to the ninety-five. So at that point, if they're at the ninety-five,

• 1:20:01Speaker 01

  then I'm like, hey, you can run this good, then they get to ninety-six, hey, you can run this better than me. So now I'm gonna, now I'm gonna ease off on some of those things that I was supplementing on the deal is, but I'll still, still check and make that, but I still know enough too, to where I can still add value on improving and doing things like that. And so like, you say it can't be in the details, what do you mean on the details? Oh, man, look, you always, you're down to the minutia and all this stuff, you're wasting your time doing that stuff, you should be big picture, you should be that. I'm like, well, yeah, it gotta be big picture too, but the, but the devil's in the details on this thing is, is I got reaffirmed by this, and this is Edison's West, a large shipping company here in Louisiana, and actually, it was, it was, it was one of his partners in another shipyard business, had told me, oh, when I, when I was explaining

• 1:20:44Speaker 01

  this to my, my, it was a YPO forum business group, and saying, people are saying I'm just too much in the details, they're like, hey, Gary Schwes knows exactly what the bottled water costs at his, at his place, and he's like, look, and there's, there's, there's formulas to give it to him, he doesn't go and count water bottles, right, he looks at the program, because he's like, if we're paying twenty-five percent too much on bottled water, and, and people aren't going up to the thing and getting out the big thing, and they're, they're using, which is wasteful too, little bottled waters, it means they're doing that in every phase of the business. So knowing those details, but that reaffirmation me going, yes, me into the details matters. So I say you don't delegate, you hire great people, you help them and do it, and if they do it better than you, then you can back off, and you make sure all those components of the business, look, I'm not great at IT, I have exceptional IT team, they do it better than me. But I'm still into the details to

• 1:21:27Speaker 01

  make sure we're doing what we need to do, we're supporting our operators, we're doing, and we're being innovative, and we're getting faster in drive-throughs and doing it. Our co-CEO in the business is a much better operator than me. I'm still in the details with him in the business, and I know enough about it, I'm good at it, to add value in the deal is. So the word delegation is used way too much, like, trust your instincts, learn and grow and let people grow themselves, but be into what they do and absolutely stay into the details of your business. If that's what made you successful, don't lose those things. Get better at it, get more efficient, get the reports and things like that. Y'all have products and you also refer people to products that can help consolidate the information and write quicker, efficient, more decisions like that. You get better at that, but stay into things that stick to what you know.

• 1:22:08Speaker 01

  Second on a concept, man, I'm fully believe be good at one thing and do it better than anybody else. Be relentless, I do it better than anybody else.

• 1:22:15Speaker 00

  Can you expand on, but that I told, if it's said on this episode, it's like, sometimes you can just hear a person say a sentence. Like what you just said about delegation, it's just like, if that's the first thing I ever heard, I was like, I know him. I'm like, I feel that way too. Walt Disney has a great line about this, right? If we lose the details, we lose everything. These are not after, this is not something you think about after, it's like this is what makes the magic. You call it craveable, like the magical experience, like why there's, people have an emotional reaction to your company.

• 1:22:46Speaker 01

  Right.

• 1:22:46Speaker 00

  Like you've, your product evokes emotion, just like his evoked emotion. But the reason, the very first, I didn't, I was unaware of racing canes, I was in Florida where I live. I, um, and I actually saw a clip when you were on Theo Von's podcast, it was a TikTok. And you said something and I was like, I know him, like I have to find out who this is, yeah. And then my brother-in-law lives in Austin and that's when I had my first racing canes. So I'll tell you what I heard about you and then the first time I had it, I was like, of course his food is like this. And then I had it for lunch and dinner, lunch and dinner, lunch and dinner, lunch and dinner, the whole week I was there.

• 1:23:21Speaker 01

  His kindred spirits.

• 1:23:22Speaker 00

  Yeah, but this is what I'm obsessed with. It's exactly what Harry Snyder thought, the way he thought as well. It's not just the principle of doing one thing, doing better than everything else. This is like how it applies to every single thing. And you would talk about in that podcast where it's just like, well, a simple menu has all these other positive effects that, you know, you can really focus. Again, all the detail is good, you can make it better, but also you even had the concept that it's going to allow you in the future to serve more people. Because it's a, it's a shorter order time.

• 1:23:48Speaker 01

  Right.

• 1:23:48Speaker 00

  When did you figure that out? Did you know that at the beginning?

• 1:23:51Speaker 01

  Yeah, no, no, no, I didn't. No, what I wanted was, what I wanted was. Cravable product. And you know, and I knew from restaurants, you had that, the one cravable product on their menu. And then they have all these other menu items, all these other distractions. You're like, but everybody goes to Gino's to get that delicious carbonaro, right? Like, it's like, focus on that, that, and do it extremely well. Don't try to be all things to all people, or you're gonna be nothing to anybody, right? You have to be what people will be fanatical about. What they, in a restaurant, because it's cravable. So, but what I, what I wanted to do is create that cravable product everybody do. Then I saw the value of how quick I could do the drive-through, right? And so, it starts from when customer pulls up to the, to the order deal. The first time at Raising Canes, they look, they have to decide what they want, they do it. After that, they know what they want. Box combo, sweet tea, extra sauce.

• 1:24:35Speaker 01

  You know, whatever, whatever, whatever their, whatever their order is. So, the order's quick. Coming to the drive-through, we have a singular product focus, right? For that one menu item, we have one line, I'll take you back in the kitchen later. You can see down the line, toast is grilled on the end. You got chicken fryers, you got fry fryers, and you got the board. You can watch that cook-to-order process happen, like, you're cooking. And so, you can cook, and you have that product, and you, you're making one, basically, one meal, just with three, four, six chicken fingers. So, you can make and assemble it quicker. You have your, your, your drinks that are popular, comes up, In-N-Out, it gets out there. Thank you very much for your, for your order, and you go through. And so, then I saw the speed on that deal.

• 1:25:15Speaker 01

  So, it's like, our concepts, cravable food, served with fast food, speed, and convenience. That's what it is, right? Fast food, speed, and convenience, cravable product. So, the both of those together. So, if I added menu items, right? Then it would slow me down, right? And then I'd say, well, getting speeded up is, then I'll put heat lamps, and keep all this other food assembled done. So, then quality goes down. So, your speed goes down, then your quality goes down. Then your quality is now worse if you've been adding heat lamps. And we don't have heat lamps, we don't hold times, we don't have any of that stuff. Riding that cook-to-order process. So, like, you go up to In-N-Out Burger, you know what you want, and you're cooking ahead. So, it's literally like, you're cooking ahead. Now, if you, if you show up, you're the first customer at Raising Canes, it could take you four minutes to get your order.

• 1:25:59Speaker 01

  Four to five minutes, because we're dropping the chicken, we're doing that. But when the, when the, when the line picks up, then you're cooking a little bit ahead, then, you know, during your rushes, you're cooking way ahead. You're just, meaning, it's coming out, it's getting served immediately, right? We're two minutes, 35 seconds, drive-through and counter service, right?

• 1:26:16Speaker 01

  If we added different products and we lost two seconds, every two seconds that I can get faster is a point on sales. So just say just roughly 1%. If we do 6 billion in sales this year, what's 1% 6 billion? That's 60 million dollars in sales you can do if you can tweak that, tweak that, that, that order time. Two seconds. Now it flips on the other side, right? If you add two seconds, you add two seconds, you add two seconds, then those sales go down and then the flow through dollars, once you get to the flow through point, then you, then you lose that money. So not having all those different things keeps the concept. So knowing what your concept is and sticking to that concept, then you know what, what, here's the engine, here's what drives, here's what drives sales, what

• 1:27:00Speaker 01

  eventually drives profitability it does. There's other benefits too. In the restaurant business, you look at a lot of the quick service competitors, they're adding all these LTOs, limited time offerings. Management and crew have to learn a new product that's going in and how that works in the service model and do it. And then they learn that and they do that. It's a distraction of what you do. Then the next 60 days, there's another one, then there's another one, then there's another one. There's all these things going on. Management has to spend so much time on learning those new products, delivering those new products, hitting the sales, the back taste, all that. Where's the time to encourage the crew and do positive motivational management, point out, that's good toast. You know, you're great in the drive. Where's the time to walk out and talk to the customers and actually see their food? How clean is our, is our restaurant right now? What's

• 1:27:44Speaker 01

  the general vibe here? Oh wait, the music's a little lower, someone knocked it down. Where's those things? So our management can focus on that, the crew member and customer experience and make sure that goes because they're not these LTOs they have to learn, go through training modules and do that. You focus on what you do good. And so like you go back to that business plan. They talked about not having all these different menu items. No veto vote doesn't happen. They're like, you're not going to get the frequency because you need frequency gets driven by different menu items because you get that, all that stuff. Our frequency is just as high as any other quick service restaurant, meaning how many times somebody comes back in a month, period of time? I see the DoorDash bills. I know how frequent. But then you come back, right? Then you come back. So it's, it's anti what they say is what drives this stuff. It's like there's no veto vote. There's no... There's no variety drives more sales. It's actually frequency.

• 1:28:29Speaker 01

  Our frequency is as high as anybody else is serving the exact same thing people have day in, day out because it's good, because it's good. Our competitors can run chicken finger, chicken strip, whatever type of sales. It doesn't affect our sales. It doesn't affect it because people say, they might try it, but two days later, they're, they're coming back getting their chicken finger meal from us because it's the best. You know, it's actually, actually I love it when they run all these specials. They do all this stuff because it adds more, it adds more advertising out there for chicken fingers and we're known for the chicken fingers, man. It's like, when I, when I want people to talk about chicken fingers, chicken strips, whatever they're talking about, boneless chicken being dipped, I want them to say raisin canes in their mind, like Xerox, you know, it's not a cop anymore. Go get me a Xerox of that. That's what you want to be known for. Do what you're good at. Do what you're good at when you can execute on a consistent basis, consistently, and you

• 1:29:12Speaker 01

  can teach other people how to do it and they can execute and operate the same way. And you stay focused on that and delivering that high quality craveable product with fast food speed and convenience and being friendly and doing that. When you focus on that day in, day out, the whole organization is around that, then you can look at stuff like canes love. You have time to do those other things that enhance that crew member experience. And when crews happy, they're going to be, they're going to be friendly to your customers. That, that's why people come back. They don't just come back to canes because the food's so craveable. They come back because they know it's going to be food safe. They know people are going to be friendly. They know people appreciate, right? Customers want to be appreciated. They want to say, thank you for your food. And people, our people mean that. It's like, we appreciate you spending your hard earned dollar share. In fact, they want to go to the restroom, it's going to be clean. Those things get you that repeat business.

• 1:29:55Speaker 00

  Yeah, we went to, we landed and went, went directly to one last night and just greeting every single person that went to the door. Like I, it was like obvious how obsessed. I love this idea because again, focusing on one thing and being the best in the world at it, right? To me, that's, should be completely obvious. I think humans crave simplicity, but our default status, we tend to over complicate things. So your competitors, like, okay. Todd's just gonna have chicken fingers. I'm gonna have chicken fingers and nine other things.

• 1:30:22Speaker 01

  Right.

• 1:30:23Speaker 00

  The problem with that is the distracted do not beat the focus.

• 1:30:25Speaker 01

  That's exactly right.

• 1:30:26Speaker 00

  The distracted don't beat the focus.

• 1:30:27Speaker 01

  They're gonna say, "We're gonna do chicken fingers, but we're gonna have 100 different sauces." People go back at their same sauce. They might come try it one time, and then it's also slowing down their order process. It's slowing down turnover time and all that stuff. And then they go back to the same sauce. So how much time did you spend on all those different sauces that, when it comes down to, you might have narrowed down to three sauces? What are the most popular? Narrow down your menu items. You're seeing more and more fineting restaurants narrowing their menu. It's happening now. I'm not saying I was a part of that, but maybe they looked at Canes and said, "Wait a minute, I bring my kids here. We come here all the time. Maybe I don't need 50 different menu items on this thing."

• 1:30:59Speaker 00

  And people don't actually want to make choices. They want you to make...

• 1:31:02Speaker 01

  No, they wanna know it.

• 1:31:03Speaker 00

  What do you do best? I went to Jiro in Tokyo, and you know, it's a three-star Michelin restaurant. It's 10 seats.

• 1:31:10Speaker 01

  Maybe you can get me in.

• 1:31:11Speaker 00

  I can't, actually. I have a friend that knows how to do it. So Jiro's fairly old, so he only comes in frequently, but his son was the one that served this. But like, you don't even get to choose. You sit down, and he's like, "I'm the best in the world. I want to do, and I'm gonna serve it."

• 1:31:24Speaker 01

  Brilliant.

• 1:31:24Speaker 00

  It's actually nice. I don't have to think of, as long as you can get in, then I don't have to think about anything else.

• 1:31:29Speaker 01

  I'll flip through the menu.

• 1:31:29Speaker 00

  Like the, what's the, the restaurant that has like a book this size? Something, um, Califor- not Califor- Kitchen.

• 1:31:38Speaker 01

  Cheesecake Factory.

• 1:31:38Speaker 00

  Yeah, Cheesecake Factory. I don't go there. It's like, I don't want homework. Like, I got other shit in my head. I don't wanna think about this.

• 1:31:44Speaker 01

  It causes anxiety. What am I gonna go there?

• 1:31:46Speaker 00

  This is what we love. It's like, last night, we were like, "Okay, what do you want? You want three chicken fingers, four chicken fingers, or six?" Like, that's all you have to, you already know. Like, that's all you think. So another way that you buck, so you have this limited menu, right? And then, most people in your industry will, they're the franchise model. Why did you not choose to go down that path?

• 1:32:07Speaker 01

  You know, when I saw it out, you know, when I had that vision, you know, grow Canes, you know, so franchising was like one of the obvious ways to do it. And so everybody was franchising.

• 1:32:15Speaker 00

  Why do they do that?

• 1:32:16Speaker 01

  Well, I mean, there's a lot of advantages. One is less capital cost. If you can grow off franchisees' money. So let's say you have a good concept, you have a few locations, and then from that... For you to grow company restaurants, then you have to keep putting in, injecting a lot of capital. And on top of that, you have to take in a lot of debt to do that. Restaurants are very expensive. You can't, you know, literally, and that's not a manufacturing plan. If I could do all chicken fingers, one location, send it out, right? The cost wouldn't be there, the capital cost. But every one is a new restaurant, a lot of money. So people are like, you can grow in different areas and use other people's money to grow. There's also the thought of that other restaurateurs will bring other things to the table, other knowledge. They're good in their regions, they know the local knowledge better, and it's better to grow that way. And do it.

• 1:33:01Speaker 01

  But I think mainly it's the money play. It's literally, we want to keep growing with our capital, we'll take a royalty off the deal. So I had the model of like, I'm gonna grow 50%. I knew I wanted to go company, but I'm like, I'm not gonna grow fast enough. And I'm not gonna have the capital to be able to grow in all the areas. So I got really graded people from the industry. People that were CEOs at other great, big billion dollar businesses, and they're good people. They're people that I trusted, trusted and good people. And so I'm like, that will fuel my company growth, right? Getting franchise royalties in, and I'll be able to grow, we'll grow quicker. And so I did open up in different parts of the country. I opened up in Ohio, opened up in Minnesota, opened up in Nevada, opened these different areas. And they were good franchisees. And because I had the real friendship with them, like, we could talk through any problems or anything like that.

• 1:33:46Speaker 01

  The thing is, they operated, we were saying, we'll say we're at 95 out of 100. They were about 85 out of 100, which I think other franchisees were like 65 out of 100, honestly, what they're doing. So there, other people have been thrilled with them as franchisees. But that 85 to 95 gap drove me crazy. And I was just like, I know we could operate these better, I know I could do it better. It was just saying we're gonna change the operational procedure. We had tested in our company restaurants, we knew it made us faster, or it was better for management and crew, it was a better system. To talk them into changing that system took so much time, that was just totally inefficient. Because it's their business. That you had the respect to show them, like, ah, this doesn't work for us. Because it's different, it's like, well, what's different? The crew and customer, your customers are exact same in both these areas.

• 1:34:31Speaker 01

  No, we just like it better this way, we think da-da-da. Or even crazy things, like, well, we don't wanna get that much faster. Because we like the longer interactions. It's like, well, the longer interaction, well, you can still be just as friendly but quick as they want to get out the door anyway. But talking them into things took too long. And I was spending, I mean, the team were spending too much time on something that should have been implemented overnight. And I'm like, our company restaurants, once we tested it out in like five restaurants and we felt good about it, our operator said, man, great system, boom, let's roll it. And so that time was less efficiency on us building the business and making our existing restaurants better and getting higher same restaurant sales. And so I ended up buying all them back. And they did really well and they were great and they're all happy. And actually too is they looked at like a more of a merger because we kept their teams

• 1:35:16Speaker 01

  and they had more opportunities for growth. And it worked out really well. But for me is like, you know, franchisee is never going to run it like you do because it's your baby, it's your thing, and they're not going to do it quite as personally. And they're not quite as fanatical as you are, right? I'm a fry cooking cashier, man. That's what I live to do, right? And they were 85, I was at 95. And so I could hire the people that had those same types of values as I did. And so like franchising for me, it's just you're going to lose quality service, you're going to lose those things, and you're also going to lose a tremendous amount of efficiency because you're talking them into things versus just adopting something system wide really quick. So we got way more efficient, we bought them out.

• 1:35:59Speaker 01

  We actually operated 95, sales went up in all the franchise markets. Literally, sales went up, wages went up, everything went up, and it actually improved out better. So, look, I think it works for some organizations. I, for me personally, especially in the restaurant business, I think the company model just rules.

• 1:36:16Speaker 00

  Well, I think the important part that, you know, a lot of people, like, hey, like, should I work on this or what's the idea I should pursue? And I actually got this idea from Michael Dell, where I used to say, well, like, you just have to build a business authentic to you. It doesn't even matter if you could make more money from franchise. You just, it's not suited for your personality.

• 1:36:35Speaker 01

  Right.

• 1:36:35Speaker 00

  So it doesn't matter. It has to be, and I used to use the word authentic all the time, you should build a business authentic to you. And then I was reading Michael Dell's autobiography and he, you know, he was in his early twenties, so he's like, shit, man, this is really hard to compete with IBM. So he actually gets a guy to come in and be, I think, the vice president or president and help him. And the guy's like 20 years older than him. And I found an interview with that guy who's now in his eighties, talking about what it was like working with Michael Dell in his twenties. And he's like, you know, I loved it, but it can only last four years. Because we're playing for high stakes. There's a thousand other computer companies. We're taking on some of the biggest companies in the world. He's like, so after four years, like, I'm losing my hair. My back hurts. Like, I got digestive.

• 1:37:16Speaker 01

  Been there.

• 1:37:17Speaker 00

  I got digestive issues.

• 1:37:18Speaker 01

  I'm drinking too much.

• 1:37:19Speaker 00

  And he goes, and Michael is thrilled. He's like energized because, and then he's headed this great line. He goes, because Michael built a business that was natural to him. It was unnatural to me where my body is shutting down. And Michael's like, yes, let's do this. It's like, natural is a better description than authentic. It has to be natural to the creator. It has to be natural to the founder.

• 1:37:40Speaker 01

  Absolutely.

• 1:37:40Speaker 00

  It's just like, I'm the same way. I'm obsessed with control. I spent eight hours yesterday hand editing the transcript that no one gives a shit about. Because I care about it. This is like, I don't, and it was like, everybody tells me, outsource, delegate. They use that word all the time. No, I don't want to delegate. Like, I want to feel it. I have a feeling for it.

• 1:37:57Speaker 01

  But that's the key. That's the key to success. That's common in everybody that's successful, I believe.

• 1:38:02Speaker 00

  The time period you're describing, where in Kane's history was this happening?

• 1:38:06Speaker 01

  For the franchising?

• 1:38:07Speaker 00

  Yeah.

• 1:38:07Speaker 01

  Yeah, so I mean, I went.

• 1:38:08Speaker 00

  Was that five years in?

• 1:38:09Speaker 01

  Uh, yeah. Probably three years I started talking about it. Because, no, no, no. So, so second restaurant was, was, second restaurant was 18 months after the first restaurant. Then from there, I had an opportunity when I really knew I wanted to grow. And that's when my partner got out, which was really interesting. He said, it has to be natural to you. My partner Craig, who was great, he loved the finance part of it. He loved the IT. He loved the business administration stuff. He wanted a fry cook like me. And he's like, Todd, when I get a night off, if I get a night off, I go read the Wall Street Journal. He goes, you know what you do? You get a night off? You're writing new schedules that are like better on the dealers. He's like, I just, this doesn't make me happy. And so, but he ended up getting a, we ended up getting a much money to buy out then. But he ended up getting a scholarship to Wake Forest, did business. He did all the things he did.

• 1:38:52Speaker 01

  He actually came back to Kane's for several years doing the things he likes to do. Has his own business now. He does, he does really well. Still one of my dear friends. But he wasn't happy. And he had the courage to say, I don't, I don't like this. Like this is all we're doing is, is, is, is, is being fry cooks. Doesn't turn me on, you know, it doesn't do it. And so like I encourage people like do something you love and you'll never work a day in your life. Right. It's just a part of your DNA. Like there's no work, there's no, I'm, I'm working, I'm not working now. I mean, like I'll, I'll be at the beach and it's like, you know, checking in and we got calls and I'll be well, roll heads on the beach, you know, you're talking, doing, and then you get back to, hey, what's happening margarita? You know, it's like, it's a part of what you do. So you have to do what you love, right? You have to, and if you do, you'll nev-, you'll never work. There will work, where it's like career.

• 1:39:35Speaker 01

  It's not a career, it's a passion, it's just what you do. It's the same thing as I get up and I go take a walk and I love my dogs, I love my business, love my kids. Things like that are what makes, makes the difference in being whole, I believe. So one of the disadvantages of having other partners in your business is that they might have different goals in mind that you have in your business, right? So an entrepreneur and a founder brings on an equity partner, whether it's an individual or whether it's a professional group, private equity. I mean, very careful on what their motives are. And if their motives is about a financial return, you're generally going to end up bad. Because you have a, you have a fiduciary responsibility to the other owners of your business to meet their, their goals, right?

• 1:40:17Speaker 01

  And if those goals are financial on that deal is, it can change your thinking. It can change your thinking on quality, in my, in my business. It could change vision on quality food. You could try to lower food to make more profitability, which is a short-term game. You could, you could cut wages, right? And so your crew members aren't as happy, they're not as appreciated on, on the deal. You could try to do different avenues of sales just to raise sales that's going to lose your focus. There's all kinds of bad things that go with that. The only way I do a partner is they believe a hundred percent in what you believe in. And then you also believe that they're not going to sell that stock to somebody else that doesn't in the future. And rarely does that work out. If it's special to you, hold on to your equity.

• 1:40:59Speaker 01

  Take the risk, get more financing, but keep it yours because you'll always be able to protect your baby. You know what makes it work better than anybody else.

• 1:41:08Speaker 00

  I have one thing to add to that. I think it's super important that you said that. There is this, something that I've come across in a lot of the biography is like, many times the best financial decisions are not financial at all. And so there's this investor named Nick Slipp who wrote these legendary letters to his partners. And he made a great line. He's like, "The best investors aren't investors at all. They're entrepreneurs who never sold." And what he was talking about is the fact that like, if you took, obviously Sam Walton, right? He gave away the equity in Walmart to his kids before it was valuable and that's how they wound up being very tax efficient. But if you look at his combined wealth that came from Walmart, right? That's still concentrated in the family today. The last time I looked it up was like a month ago. It's like $432 billion, okay? So one of the greatest fortunes

• 1:41:52Speaker 00

  that have ever been created. Do you think Sam Walton woke up every day like, "Oh, I need to maximize shareholder value. What's my stock price?" No, he woke up serving his customers. And then they're like, "Why didn't you ever sell?" It's like, "Why would I?" It's like, "I'm not doing this for money. I'm doing this because I wake up with a burning", he said something like, "I wake up with a burning desire every day to improve something."

• 1:42:09Speaker 01

  And he was the most wealthy man in the world. He drove the old pickup truck and went to work every day. It's not about the money.

• 1:42:14Speaker 00

  I've heard this for 200 years of entrepreneurial history. It's like, people think it's like some willy-fu-fu stuff. "Oh yeah, you should do what you love." There's an underlying reason to that because work is going to be a grind. You are going to run in times where you are crying when you're in pain, or you want to give up. And if you don't love it, you will give up because you're sane. And so you have to love it. It has to be, you have to be irrationally obsessed with it. And then what happens? It goes back to the anti-business billionaires. The people that are irrational obsessed with it, they make better products. And then customers, you know how many people I've told about raising canes? Like, I didn't, even before I knew I was gonna meet you. It's just like, because I, it's in human nature. When we find anything that we love, it could be a chicken, quality chicken finger meal. It could be a movie. It could be a podcast. It could be a piece of art. It could

• 1:42:59Speaker 00

  be a city, nonprofit. No one keeps it to themselves. That's just, humans don't do that. They're just like, "You gotta have this chicken. This is, it's incredible." So that is all this stuff, the love, the staying in, being hyper focused, staying in something for a long time.

• 1:43:15Speaker 01

  Mildly obsessive compulsive.

• 1:43:17Speaker 00

  Say again?

• 1:43:17Speaker 01

  Mildly obsessive compulsive.

• 1:43:19Speaker 00

  Yeah, 100%. Oh, it's funny you say that because there's this line in this Elon biography. So Larry Ellison, founder of Oracle, he only ever joined two boards. And he was best friends with Steve Jobs, he was on Apple's board, he's good friends with Elon, Elon consistent mentor, he's on Tesla's board. And he's like, oh, and he was asked one time, what do they both have in common? He goes, OCD.

• 1:43:36Speaker 01

  OCD, 100%, 100%.

• 1:43:38Speaker 00

  What do you mean with that comment? Like, it's obvious, like, what they have in common to him.

• 1:43:42Speaker 01

  Yeah, being mildly obsessive compulsive is actually a good thing.

• 1:43:45Speaker 00

  I'm only interested in fanatics. My entire podcast is just about, think about, like, to get on the podcast, right? It's like you had to live a life, you had to be so good at your job that somebody wrote a book about your life. It's like, that's the time, and in cases of people I'm super fascinated with, like you, it's like, oh, no, no book? Fine, I'm gonna make my own. I literally printed out the transcripts for every single one of your interviews and I went through it just like I did for this book. It looks the exact same way. It's the same personalities, like, whether you're playing basketball or you're building raisin canes. So wait, so how many years of doing a franchise are you like, shit, this is not the right move?

• 1:44:18Speaker 01

  Yeah, I mean, so it was exciting getting in, it was exciting to open up a new restaurant, exciting to teach what we do and do well, exciting to learn. A couple of years into it is when I started seeing the lack of efficiencies and a little bit less. You know, like I said, they still did a good job, and so I want to give them credit, they did a good job, but not as good as we could do it. So if we couldn't do it as well, you know, we might be like, oh, wow, look, they took us another level. They just didn't operate as good as we did. They cared about the crew, they cared about the customers, they just didn't operate as well as we did. And so that started, a couple of years into it, I started seeing it. We bought them out probably about the 10-year mark, which was good, because they were able to grow, they were able to make good money. Another advantage of having company-owned restaurants is the business is valued way higher. Like, for franchises, you'll get, you get a valuation of the 6% you're getting off that restaurant.

• 1:45:03Speaker 01

  That's part of their deal, but it's, but it's based off the valuation of what franchises markets go. So let's say franchise multiples off of the EBITDA minus debt. Franchise multiple would be like 4 to 7% is what they could sell in their market, right? We're trading on, not trading, we don't trade, but we're valued on over 20 times EBITDA. Those company restaurants. Go into that. So the profitability that comes into all of it gets on that that higher multiple. That's why we have a 20 billion plus valuation for the business. So it's a it's a better better valuation model too, if you do company.

• 1:45:37Speaker 00

  Okay, so let's go from two. How did you finance when you got up to 28?

• 1:45:43Speaker 01

  Oh, man. So this is this is interesting, man. I said, look, after the second restaurant, I had an opportunity to go into some of these failing double dry through burger places. And so Greg, Dr. Hill, another great mentor of mine, he's like, look, we're just not operators, man. We we they had like 30 something, you know, they're called fast track and then burger joints. We're down to like four of just our best units and our best, we consolidated the best crew. We just, we want to be landlords, like, we're not operators. And you can use equipment, you can have all this. Look, whatever you need and look, just we'll give you cheaper rent. And so I didn't want to go into it. It was like, it was these like double drive throughs. I thought like, you know, this place had a lot of soul, big diners and all that. But I said, you know what? It's an opportunity to get in cheap and prove what I want to prove that we can work on. We can, we can not just on campus that we're, we

• 1:46:28Speaker 01

  can do well, we can do well all over town. And we went into those places, we just painted them, used the equipment they had in there, and we started just doing sales, man. I mean, like, people loved it everywhere. And they loved it. And so eventually turned all those into big, you know, dining, dry through locations. So I was able to do that into a mall food court. So I was able to get all these places. So we went from, what is that? Two to eight restaurants. We opened five restaurants in five months, man. We started rolling, made a lot of mistakes, learned a lot, burned myself out, like, like, I couldn't be at all the locations. So then I really learned how to set up leaders at different restaurants and give them the support they need versus me bopping around to restaurants and then like putting out fires, basically, is all I was doing. I did that. And then from there, so I was able to get into those. There, I was like, okay, I'm gonna come up

• 1:47:10Speaker 01

  with a prototype. Like, what is Raising Cane's ultimate location, the prototype I want to do? And I want to do it out of town. And so out of Baton Rouge.

• 1:47:19Speaker 00

  Why?

• 1:47:19Speaker 01

  Because, because I wanted to prove the prototype, starting off where no one really has the brand recognition that we have, and show what this thing can really do. So literally, one year, I'm like, no more growth. We're gonna, we're gonna set up what the prototype is. And by prototype, I didn't mean just just architectural design, kitchen design, and where our look and feel was, everything, marketing systems, human resource systems, training systems. Everything globally. And I had a, I used to go to restaurant conferences to learn from people that were experienced. But I was able there to get, I know the, I know the marketing guy, I know the human resources, training and operations person, I know the, you know, the, the crew relations. So I was able to assemble a team together with architects and with interior designers and branding people and was able to assemble a team coming in.

• 1:48:03Speaker 01

  We call them partners, not consultants, who's like, they were partnered into the success of the business. And we came with that first prototype, Raising Cane's opened up in Lafayette and we just went game busters, dude. We killed it. It was just like, we had operational efficiencies, our drive-throughs got faster, we could stack more people around the restaurant. I had all these really good people that came in and, and gave us great, we came up with an original black and white logo, we changed it to this logo because we got it, so we came up with Raising Cane's One Love. All those things went into it, comboing meals, I didn't combo, I had, you know, it was a box and a drink, you know, we said let's combo it because people, it makes it easier, you don't have to decide to, it's like, just get, get those menu items. And we created that. And so, but I got that on another committal loan. Now I'm like, you know, with the money coming in and doing this thing is, I'm bankable,

• 1:48:46Speaker 01

  but I'm not bankable to where I want to grow, which ended up being the 28. And so back then, banking regulations were a lot more lenient, man. So what I said was, why don't we go in to all these, to go to these community banks? So say we want to open up in Homa, Homa, Louisiana, go to the community bank in Homa. And let me go to Angel Investor, and this was Dr. Hill who had those fast tracks. He wanted to be landlord, he also liked the new deals, and he said, hey, let me buy equity in the company. I don't want to have equity partners, but I'll give you a sub debt, a sub debt deal. So Dr. Hill, let's say I borrow $200,000 from you. I'll give you a 15% interest rate, subordinated debt, I mean, it's a one-page deal. Subordinated debt means subordinated to the banks.

• 1:49:27Speaker 01

  I know I can take that, that, that subordinated debt at $200,000 and the bank will look at that as equity, right? So it's $200,000 and a million dollar deal, so I could go into the, to, to, to the location, get that finance, boom. And I was creating cash when I did that because basically I could open up, I didn't have to pay my, my rent for 30 days, I had to pay my vendors for 30 days, you know, all those things came, so I opened up, got this cash flow in and do it. Boom, do the next one, subordinated debt. No equity and it was really stupid way to finance a business, man. But I was, I was young. I was 10 foot tall on bulletproof. We're gonna work. I mean, I had zero fear of any kind of risk on debt, right? And so I was going in, crating cash, doing this stuff.

• 1:50:09Speaker 01

  I get up to 28 restaurants and all of a sudden we have a, we have a storm coming in named Katrina. It's coming into Louisiana. We're used to, used to hurricanes. We knew what to do. We put crew to safety, shut down the restaurants, buckled everything down. Hurricanes would come through, we'd open up the next day, we'd have some power outage, whatever. But Katrina was different because it came up, went over New Orleans and it hovered. And then the levees broke, right? And we're watching on TV from our second location across here where you all go. We got this, whatever cracks up this power to where we could actually watch television. And when the levees broke, we're like, we've never seen this before. What is this? Flooding, terrible, awful, whole bit. And I thought, I said, man, you just screwed up bad.

• 1:50:49Speaker 01

  You screwed up bad. You just put this company in such bad financial condition because now there ain't no sales coming in. And we knew it was gonna take a while to open up. And every single Kane's location is... 21 out of the 28 were down from either power to damage to flooding to whatever it was. And so no cash is coming in. I got the company levered to the hilt, right? I owe everybody. And in times like that, you think that, you know, you think that the banks still want their money. Landlords still want their money. And I gathered, I gathered people together. We had teams that helped people that actually had damaged houses and do all these things. We had to keep up through like SMS texting to make sure everybody. We actually set that up pretty good before. And I'm like, look, we need to rally.

• 1:51:33Speaker 01

  And when I tell you we need to rally, they said, we need to rally to save this business. And I explained to them how we had financed everything and they understood. And I said, we need to open up because one, we need to save the business. Two, we need a place for our crew to come back to work because they have bills too. You got managers and things like that displaced. They're coming back and they don't have a job. And we don't have money now, like we have vendors and things like that to, to pay for their livelihood. And then three, people are gonna start coming back to New Orleans and they, they need a place to eat. And we symbolized as a team and we had that same fanatical view of we're gonna do it. We figured out, I figured out how to get into New Orleans right away. Talking to the governor's office, they got us passes to go in, they weren't letting anybody in.

• 1:52:17Speaker 01

  We, we worked with the state on doing boil water acts because we didn't have formalized boil water acts. You had to boil the water because I mean like some of the, the rivers and all these things that hit everything.

• 1:52:27Speaker 00

  Oh boil.

• 1:52:27Speaker 01

  You had to boil the water. But we came up with, we're working with them on like, how do you boil the water? How do you test it to where it's safe, those sort of things? And we reopened, man, we reopened like, we started off on the North Shore. You know, fly now those areas on the West Bank, like some areas we opened up like, like in Metairie, which is just a mass population of people where the only restaurant, we opened up 30 days after the storm. Other restaurants didn't open like 90 days. We opened up in the West Bank.

• 1:52:52Speaker 00

  So you had the whole market to yourself?

• 1:52:54Speaker 01

  The whole market opened up in, in, in like the West Bank. We opened up in Harvey and like, it was in like 120 days or whatever for the next restaurant open. We fed first responders first and when people came back, they just came in and we were the only place to eat. They come in and eat, like more come in and eat, right? Because it was like, you can come in, we got power, it's all generated power, we got generators in all the country. Got them to set it up and we galvanized at that point, like the team and the community and like us being open. And then sales were nuts, like it was nuts. So now we had cash flow coming in. We could do these massive crew bonuses, we could give back to the community organizations. And I mean, I was just really, really proud of the team. At the same time, proud I was, I was disappointed in myself and I was just disappointed in myself because I put all that jeopardy.

• 1:53:38Speaker 01

  You know what I mean? I put all that in jeopardy for financing. From that day when I watched the levees break, I said, I'll never, ever, ever put the position, the company in a position that we're financially strapped, like I'll never do that again. And from that day, we got our metrics and we worked towards, it took us a couple of years to get there. But we worked towards those right, you know, it's like three times debt equity, you know, sales, all that stuff is, we'll never cross that. Like I have a capacity to get all kind of, you know, lending, but, but we won't, but we won't go past the, our metrics, right? We won't go past that. So we learned that one the hard way. A lot of same things with COVID, you know, when COVID happened, we're like. Oh my God, like, like you can't get, you can't serve, can't do food. We were, uh, we were a necessary business.

• 1:54:20Speaker 01

  They said essential business to be open is we need to feed the public because they felt, they felt okay with going through drive-through through COVID because there's limited contact. But we had to learn everything. It was like literally, hey, guys, we can, we talked to the restaurant industries, all the, the authorities were like, we're going to tape off every six feet for people to be. We're going to put shields between people. It's like symbolizing the team like that. And then we took parking lots and we had three drive-through lanes. Well, I'll tell you, when like, we were the, like, the first that figured that out. Can you imagine people now have a place to go get some food and not just eat at their house with what they get from the grocery store? Man, it's like, our sales went crazy. We were able to do huge crew bonuses, uh, customer bonuses. But it's that fanaticism to figure it out right now.

• 1:55:02Speaker 01

  And it's like me leading with the people and I have so many people are better at it than me, but like in the weeds with them, the restaurants. I flew to all of our markets and saw everybody. But that point too, I couldn't even go in the restaurant because it'd be cross contamination. Like if I had it and went in, so I would just wave to everybody outside. Go to the next restaurant, wave, fly to the next market, wave, you know, do that sort of thing. But like, that's how you get galvanized. But that same entrepreneurial fanaticism, like, I'm sorry, you're not going to get that from some private economic group with, with that, that's a bunch of corporate people. I mean, are they going to fly all over the country to do that and say, well, let's go tape this in the restaurants and do this stuff? It's the one that's personal to founders. You know, these are my people. These are my customers, these are my communities. You figure out a way, you know, you figure out a way.

• 1:55:44Speaker 01

  And that's why, that's why I just wish more founders would hold on and, and, and, and stay with the business.

• 1:55:51Speaker 00

  I love what you said. It's like, I watched the levees break and there's no way I'm ever going to jeopardize. Like this is my life's work. This is a part of me. I cannot let this die. One of my great, favorite quotes about this is Steve Jobs says, victory in our industry is failed survival. You see this over and over again in biography. It's like, just stay in the game long enough to get lucky. You took two, one of two gigantic, you know, tragedies that were outside of your control, which of course you're going to run into things that are outside of your control.

• 1:56:19Speaker 01

  Excellent.

• 1:56:19Speaker 00

  And you turn them into not a liability, you flipped it from a liability to an asset. And it goes back to, what have we been talking about? The fact that you're a fanatic, the fact that you're trying to create the world's best product in the category that you're in. The fact that you limit, you know, the amount of details, you perfect every single detail. So now these people. They've maybe never would have tried racing canes if that didn't happen because you're now but you're the only game in town. And then you're like, oh, this is pretty good. And then think about how many customers that one person has got has given you. The one thing that comes to mind about this, like, this sounds crazy, but one of my favorite entrepreneurs I've ever come across. I found this biography, autobiography of Estee Lauder, published in 1980s. Okay, she at the time, Estee Lauder was not the public company. It was so very successful, it was a family owned business.

• 1:57:04Speaker 00

  And she would get a lot of shit from people because they're like, her main distribution channel was like, she wants your like Bloomingdale's or Neiman Marcus to take care to as a distribution center. So she goes, okay, if you're willing to sell my products that I love, that I gave my life to, I'm going to show up when you do that. And so she would go, she, oh, a big Neiman Marcus open in Houston, that makes a lot of sense. You're going to have a thousand customers. Why Estee, why are you going down to Corpus Christi? There's going to be 20 people there. And she's like, every single customer matters. And so what she would do is on these trips, she wasn't, she didn't have any money to fly. So she'd have to take trains and buses. And let's say you're sitting across from Estee, just like me and you're sitting across from her. And she sees a woman, she said, hi, I'm Estee Lauder. Would you mind 20, give me 20 minutes of your time? I'll give you a free makeup.

• 1:57:48Speaker 00

  I make beauty products or makeover, rather. She's like, oh, I guess we're just in her suits. And then she does it one on one attention. People like, oh, that doesn't scale. You can't do that bullshit. It's going to scale because you're going to do this for the rest of your life. And so she says 30 years later, she, she would get letters from people that she gave a free makeup on a train, talking about how much they love their products. Think about how many people that one woman that you spent 20 minutes with has told if she's a customer of your store.

• 1:58:13Speaker 01

  Absolutely. Fanatical fans telling everybody they know, right? Listen to this story.

• 1:58:16Speaker 00

  Exactly. I've been a customer of yours for, I don't know, four years. And then I make a podcast that's been listened to by like half a million people. Like you couldn't have, you couldn't have predicted that. There's probably going to be millions of people that watch what we're doing. The fact is, it all stems from the fact that you're a fanatic.

• 1:58:29Speaker 01

  In purpose, right? And so what excites me about talking to you today is is that the people that listen, if they get a little nugget from this, a little nugget that changed their life, that helps people, like that fires me up. The reason why you're doing this and you're so fanatical about having, and then like the little questions you sent me before, right? I had those questions, I was able to wrap my mind around it because you want it to be good for the listeners. But that's the purpose, man. If he was just slapping something out to say this is success and do it, it's what people learn and what people will benefit out of this conversation is what matters.

• 1:59:01Speaker 00

  You have an insane amount of information and knowledge. How many people work on the same thing for 30 years? It's like so few people because everybody wants to, what we talked about earlier, they want to start a scale cell.

• 1:59:12Speaker 01

  Yeah.

• 1:59:12Speaker 00

  It's just like my favorite entrepreneurs, like sometimes I've got to speak to entrepreneurs. I just had dinner with one of the wealthiest people in the world. He's 76 years old. He's been working the family business since he was six. Do you understand what's in that guy's head?

• 1:59:23Speaker 01

  Absolutely.

• 1:59:24Speaker 00

  It's so much more impressive than the No Disrespect Anywhere Else with like the startup founder that ran the business for two years. It's like they're like nothing. They're like a baby. They're still in diapers. And even you, I love that you keep hitting, you haven't met, I'm just implying here, but like you're like, yeah, we can get to 95. Yeah, because you know there's no such thing as ever getting to 100. You're always looking for different ways to improve. Todd, you're going to do this for the rest of your life. I'm going to have conversations with founders for the rest of your life. I really appreciate you taking a risk and being one of my first guests.

• 1:59:50Speaker 01

  Absolutely. I'm a big fan of what you do, man. It fired me up that I made one of the first, man. It's like, because everybody's going to want to watch it and see it and it's like,

• 1:59:57Speaker 00

  So I'm going to keep having these conversations forever. I think we'll hopefully talk, you know, come back on the show every year, two years. You have so much to give and to like share. I really appreciate you taking the time and I really admire you.

• 2:00:09Speaker 01

  Oh, I appreciate what you do. I appreciate you having me on. I love the conversation and we could actually talk for another five hours.

• 2:00:14Speaker 00

  All right, let's go check out the apartment.

• 2:00:16Speaker 01

  Yeah, yeah. I want to show you the kitchen here and then I want to go back and let's go check out the apartment.

• 2:00:20Speaker 00

  All right, let's do it. I hope you enjoyed this episode. Please remember to subscribe wherever you're listening and leave a review. And make sure you listen to my other podcast, Founders. For almost a decade, I have obsessively read over 400 biographies of history's greatest entrepreneurs, searching for ideas that you can use in your work. Most of the guests you hear on this show first found me through Founders.