BiggerPockets Business Podcast 100: You Can’t Fear Failure: Scott Trench on the Evolution of BiggerPockets

BiggerPockets Business Podcast 100: You Can’t Fear Failure: Scott Trench on the Evolution of BiggerPockets

54 min read
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How does a 27 year old become the CEO of a major online brand? Not only that, how does a 27 year old take an online brand, build upon it, and create something better? Well, if your name is Scott Trench, the answer is: a lot of hard work, some tough decisions, and looking out for the customer whenever possible.

Before he was head honcho at BiggerPockets, Scott was a financial analyst in the corporate world. He wasn’t too happy, and spent all his free time finding the best (and quickest) ways to reach financial freedom so he didn’t have to go to a 9-5 for the next 40 years of his life. Without many investments or rental properties, Scott was introduced to the founder of BiggerPockets, Josh Dorkin.

Josh saw something in Scott, and hired him as the third employee of BiggerPockets. Scott was given the title “Director of Operations” which really meant taking care of the finances for the business and making sure everyone had their coffee. Scott started acquiring more properties as he worked with Josh and later became such a crucial part of the BiggerPockets family, he was promoted to president. When Josh decided to step away to be with his family, Scott became CEO.

In the 2 years he’s been CEO, he’s had to make some tough decisions such as changing the overall management structure of the company. This has helped BiggerPockets grow into a website and business that over 2,000,000 people use and love. When Scott isn’t running BiggerPockets, he’s playing rugby, gaming on his PC, or having a beer with a fellow investor!

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Listen to the Podcast Here

Read the Transcript Here

J:
Welcome to the BiggerPockets Business Podcast show number 100.

Scott:
That was my biggest fear going into this process when Josh asked me to lead that process was this company has a soul and is helping so many people in so many ways and it’s something I love, would somebody come in and demolish that soul or whatever in the name of sucking profits out of folks?

J:
Welcome to a real world MBA from the School of Hard Knocks where entrepreneurs reveal what it really takes to make it, whether you’re already in business or you’re on your way there, this show is for you. This is BiggerPockets Business.
How’s it going, everybody? I am Jay Scott, and we are here on this big milestone show number 100, which means 100 times, almost, I have introduced my lovely co-host Carol Scott for the nearly 100th time. I think there’s one episode that you weren’t here with us, but for the nearly 100th time, welcome to the show, Carol.

Carol:
Did you just say 100? Oh, my goodness. It’s been 100 episodes. Community, thank you, thank you, thank you so much. We could not have come this far without all your amazing feedback, without all your support, without you sharing it with your friends, liking, subscribing, spreading the word, encouraging more awesome guests to come aboard, so thank you to each and every one of you for following us along in this very exciting business opportunity.

J:
Wow. That was nice. Well, okay, so that’s it. You’re not even going to talk about our amazing guest, you’re just going to let me do it?

Carol:
That’s your job.

J:
Okay. Well, I thought you could at least give them like a good introduction and-

Carol:
That’s all you. Okay. Fine. You want me to go there, here’s the deal. You know me. I would make this introduction 25 minutes just going on and on and on and on about this guest.

J:
Okay. I’ll do it. I will do it. You’re right. We’ll be here all day if we wait for you. We have an amazing guest. So show 100 is a big, big milestone for us. The last big milestone to this degree was show number one, where we had if you recall, if you don’t, you have to go back and listen to this. We had Josh Dorkin and he’s the founder of BiggerPockets. He told us his story and the BiggerPocket story.
Well, we thought for show 100, we wanted to have another milestone type guest, so we brought on the CEO of BiggerPockets. His name is Scott Trench. A lot of you are probably familiar with him, but if you’re not familiar with Scott, Scott is an absolutely amazing guy. Like I said he is the CEO of BiggerPockets, but he’s also a whole lot more. He is a leader in the FI, the FI Community, Financial Independence Community. He co-hosts with Mindy Jensen the BiggerPockets Money Podcast. He has written two books including Set for Life, and his most recent book which we will talk about on this episode a little bit with Mindy called First-Time Home Buyer.
He is a real estate investor. He is just an all-around amazing guy, and on this episode he talks to us about his journey, and that includes his journey as a FI guy, a FI guy. That’s his journey as a real estate investor, and most importantly, he talks to us a whole lot about BiggerPockets, because BiggerPockets, again, is a business. This is a business podcast, and so many of the things that he is doing having taken over BiggerPockets from Josh a couple years ago, and now being responsible for building and growing and scaling the company.
He’s doing what a whole bunch of us are doing as business owners and entrepreneurs. He’s figuring out how to take his company or BiggerPockets to the next level, and so we talk all about the actionable advice and tips and lessons that he’s learned as CEO of BiggerPockets and how we can translate that into being better entrepreneurs and business owners ourselves. It’s an absolutely amazing episode, just filled with so much great information. I’m sure you will enjoy it, and as Carol said we so thank you for tuning in for the last hundred episodes or however many of the hundred that you’ve tuned in for, and really, we are so appreciative and honored that you’ve helped make this show such a success.
So, if you want to learn more about this 100th episode, about Scott Trench, about the stuff we talk about in this episode, please check out our show notes at biggerpockets.com/bizshow100. That’s biggerpockets.com/bizshow100. Okay. Without any further ado, let’s welcome Mr. Scott Trench to the show. How you doing today, Scott?

Scott:
I’m doing great. How are you guys doing? Thank you so much for having me.

Carol:
We are so incredibly excited you are here with us today. Scott, this is episode number 100. Give it up for 100. Woohooo.

Scott:
All right.

Carol:
The very first episode of this show, number one, episode of BP Business Podcast was with Josh Dorkin, the founder of BiggerPockets. So we thought it was incredibly fitting for show number 100 to celebrate such a great milestone to dig into your story, your expertise, your pro tips as CEO of BiggerPockets and learn all about your journey. So, thank you so much for being here with us today.

Scott:
Yeah. Thank you I am extraordinarily grateful and humbled to be able to lead this company that Josh founded today, and you’re going to hear all the inside dirty secrets I guess about how things work behind the scenes and all the challenges we face with that.

Carol:
Ooh, that sounds very juicy. I love it. I love it. So, before we get going into really what has happened since you’ve been CEO, I think, Scott, that you share so many common traits with a lot of our community members, right? I believe that if I remember correctly, before your CEO of BiggerPockets, you worked other 9:00 to 5:00 jobs. You were maybe an investor, you had some side hustles going on, so can you tell us a little bit about your journey pre-BiggerPockets?

Scott:
Absolutely. Yeah, and I think that’s just something to address off the bat is this has been a wild ride. I joined this company seven years ago as the third employee. I was making 50 a year when I joined with this, and I was director of operations at BiggerPockets, which means you get the coffee and you do the finances and that kind of stuff at a three-person shop. So, I just don’t view myself as this CEO figure or anything like that. I think I’m just like this normal guy who happens to have got attached to a wonderful company, and then trying to keep everything going as we’re moving along with all this.
So, absolutely right when I first joined BiggerPockets, I started my career in 2013 as a financial analyst at a Fortune 500 company, very quickly wanted to become financially independent, so that’s all I’ll speak about that job, and decided to follow BiggerPockets and a blog called Mr. Money Mustache so that I could retire as early as humanly possible by saving as much as I possibly could and house hacking and real estate investing my way to financial freedom.
I was a huge personal fan, still am of Josh Dorkin and Brandon Turner. They had the real estate podcast and the BiggerPockets platform at the time and followed their advice. Started networking with local investors and learning about real estate, and through some of those networking events, I happened to be in the same co-working space as Josh, the founder. I really fangirled real hard over him, and I was like, “Hey, Josh. Oh, my God. You’ve changed my life. I’m going to be an investor now.”
He’s like, “Go away, kid. What are you doing? I’m [inaudible 00:07:31] of my work day.” So I followed up six more times and he eventually allowed me to come in and meet him, which turned into an interview for this director of operations job as his third employee. So I got to join a company I was already a huge fan of, and then, yeah, that was in 2014 and the year started rolling by, the business… He has constructed this incredible brand and flywheel effect, which we can talk about as part of the operation of BiggerPockets, and over the years I took on more and more operations and management responsibility.
Then, one day, Josh, decided that he wanted to step back and spend more time with his family, and I found myself president of the company in 2018, and all this while to answer your overall question, I had been investing in real estate, buying duplexes. I was doing sales for BiggerPockets and I got a commission. So my income scaled as the company began to grow, and then in 2018, I became president of the company, and we went through a transaction where we brought on capital partners, a private equity firm, and that was kind of a big defining event in my career, and where I became the CEO following that event, and went through kind of that next stage of development, so how’s that for a synopsis?

J:
It’s great, and I thought this interview, and it’s going to go in a certain place, but I now have like a million more questions I want to ask based on the answer that you just gave. I think there’s a great learning lesson potentially there, and I’d love to pick your brain on this a little bit more. So, I hear your story of how you met Josh and got your job at BiggerPockets. You were a fan, you met him, you became a bigger fan, and that led to a job, and that led to a great synergy between both you, an amazing CEO and employee of the company and a great company, and I remember hearing Brandon Turner’s story of joining BiggerPockets as well and it was very similar.
He was a fan of the company. He met Josh. He did the fangirl thing, and they became close, and he ended up being employee number one. So, talk to us a little bit about these synergies, and for other people who are looking to build a culture in their company where they’re hiring people who are fans of the company or for people that are maybe looking for a job, and they want a job with a company they love like BiggerPockets, can you talk a little bit about those synergies? Should you be hiring people who are just huge fans of your company, maybe if they don’t have the perfect skill set, where does being a fan of the company fall into that list of important traits in potential employees, either as an employee or from the hiring side?

Scott:
So as an employee, I think the biggest thing is keeping your expenses very low, and I mean that literally. I spent way less than I earned so I could take a chance on going to the startup that offered seven days’ vacation, and to me, I didn’t have any picture of the financials so it’s just, okay, there’s one dude, and Brandon out in Washington State, are they really going to be able to pay me the way that the Fortune 500 companies?
So, that obviously turned out not to be an issue, but being comfortable with that risk, I think was just due to the fact that I spent so little and had a year-long emergency reserve saved up and was in the process of house hacking. So I think at a high level, how can you roll the dice on an opportunity like that if you don’t have some sort of safety net that you’re building up and spend very little in those types of things. So, I think it’s get control your finances, your personal financial position, and then begin networking and exploring and looking for those opportunities if you are, for example, looking for something that has a little bit more potential than maybe your current gig.
On the employer’s side, I think it’s a trickier question, because I have not founded or started multiple companies. I don’t know how to answer it particularly well, but my guess is that, that was really important for me as an early employee and Brandon as an early employee because I would argue that Brandon and I are very generalists in our skill set. We try to learn quickly and take out a lot of hats and do those kinds of things, but when you get bigger, you can kind of think about very specific skill sets, and so I would say that in current roles today, whether or not folks are familiar with real estate investing is irrelevant as that can be learned, but the skill sets specific to engineering work or certain product work or finance, that 20 years’ experience there is worth more than two years and 10 years of devotion to real estate in some cases.
So I think it’s going to evolve with the company’s life cycle would be my best guess, but I’m probably not the expert there with associations with lots of companies. That’s just what I see in my experience here at BiggerPockets.

Carol:
Very cool, and I love how you’re able to really recognize it from all different sides, right? From all different aspects, as an employee, as somebody working for somebody else, you need to create these systems and processes in your own life to be able to go down this road. I love how you’re able to recognize as a leader in a company how important that is and how it weaves its way throughout the organization. So, in that vein, I’d like to know more about when you made that transition into the CEO of BiggerPockets. You had already, as you said, been an employee there working alongside Josh and Brandon. You are doing operations. You’re operations director of sales and so on.
Then, here you are fast forward a few years, and you became the bigger pocket CEO and a lot of our community members are buying other people’s businesses, right? We talk a lot about the opportunities that lie within buying businesses to create passive income, financial freedom, and so on, and one of the big challenges I think that comes along with that is in an existing business, there is already existing leadership, a structure, maybe a hierarchy that that organization is working within, and our business leaders are challenged when buying a new business with coming in and gaining the trust, gaining the respect, rallying the troops around the new owners or the new CEOs, the new leaders vision.
So I would absolutely love to hear anything that you did in those early days around that process, right? So, that we can make this relatable to people who are buying other businesses. What have you done that people can do in their businesses as they are getting people on board behind their initiatives?

Scott:
Yeah. I’m happy to give you the truthful answer to that, and I think that it will be, may not be the answer if you’re listening you’d like to hear with that frankly. So how that transpired I think for me was I just worked a tremendous number of hours, because out of two things. One, pure loyalty to this company and to Josh Dorkin’s personal interests as the owner of the company. Those two reasons, right? I just love the company and I loved it working for Josh’s interests and with my fiduciary responsibility with that to the best of my ability.
I just tried really, really hard every single day for years in a row, and so in late 2017 when Josh started stepping away from the business, many of the team members, because I was also trying to work for their interests and just trying to do it right by all of the stakeholders that are involved in a business, right? With the customers, which I think are very important, and who I am broadly speaking [inaudible 00:14:17] are employee-based who I love our shareholders, who I love, right?
And so that’s how I did. I was trying to work for their best interests in each one of those phases and so when I think Josh began to step away to a certain extent, the team voted me acting CEO which is a very weird position to be in, because you don’t actually have the authority to rewrite someone’s job description or whatever or change those things up, but they have voted you that responsibility. It was kind of a strange situation to be in, but I think it was a good vote of confidence at that point in time. I was very humbled by that.
Then, when I formally became president that next year in my title, I had… What was that? De facto and de jour power, and those types of things. When that became a formalized thing that’s when I began making very, very quick changes, because I knew we were going to bring on some equity partners and my thought at the time was, “Hey, some people here I’ve been working here for a while, I’m not 100% sure that if someone comes in and replaces me if these people are going to continue to retain their jobs,” and that’s a tough position to be in, right?
So I was like I have two choices here. I can let that happen and maybe lose my job, which I really love or I can figure out a way to make sure every single person is clearly contributing in a really meaningful and effective way, and we use this term with traction right now called GWC, gets it, wants it, has capacity to do it with those types of things. Making that happen right now, and so in February of 2018 within a few weeks of formally being president, I kind of went and was like, “You’re now doing this. You’re now doing this. You’re now doing this. You’re now doing this.”
Some people didn’t like that, and I think I made significant role changes for about 15 people at the company and 7 of them or 8 of them left. We called it the big apocalypse at the time with the turnover that we were seeing at that moment in time, and then we went through it. But after making those changes, we were able to get a lot more clear on a lot of the kind of key KPIs of the business, which I’m sure you guys have talked about on many shows and began to really see substantial growth, in particular, in 2018 that I think really led to a successful outcome for Josh, our shareholders, our employees, everybody, and I think was a reason why I was able to move into the CEO role formally at the end of 2018.

J:
So this is I think a good time to talk about the fact that there are a lot of people out there that are listening to this that are fans of BiggerPockets that are familiar with BiggerPockets that have known and loved BiggerPockets for a long time, but they probably don’t have a really good idea of what the internal organization of BiggerPockets looks like. I’ve talked to people who think BiggerPockets is still two or three employees.
I’ve talked to other people who think BiggerPockets is 5000 employees. In reality, I imagine there’s somewhere in between. Can you talk to us a little bit about what does BiggerPockets look like today? How many employees are there? What’s the hierarchy look like? You mentioned that there was a private equity firm that came in, and let’s hold this question for next, because I want to, for anybody out there that’s thinking about like how that works with private equity coming in, I want to talk about that as well, but let’s start with what does the structure of BiggerPockets look like today?

Scott:
Sure. So we have four businesses that we are in, right? We have a media business, and you are engaging with our media business right now if you’re listening to this podcast. That media business produces podcasts, YouTube content, social media content, those types of things, and the way our media business makes money is via advertising that you hear on these podcasts. So the more people that listen the more advertising revenue that we come in and the bigger the shows get the more profitable they get, right?
The second business that we’re engaged in is our publishing business. So that’s books, conferences, we have our blog included in that, those types of things, and that’s content that we effectively sell. When you buy a book that is part of our publishing business, when you attend our conference that is going into our publishing and events business right there. We have a subscription business where we have plus and premium and pro membership subscriptions that many members purchase that helps give folks access to tools and specific content like landlord forms, discounts like pro perks, those types of things, and this is not an ad for our business, it’s just a statement of what our businesses do, right?
And so the pro memberships is a third business. That’s a subscription business, and then our fourth business is a newer one where we are looking to connect our listeners and folks that are members of our community with agents, lenders, those types of things, solving those types of problems, investor friendly agents, investor friendly lenders, that type of stuff. We call that the marketplace business. And so the business is set up with those four businesses in mind.
There’s a general manager who oversees each one of those business lines, and then there are supporting executive functions. So I would consider myself the CEO as a supporting executive function. There’s the CFO, the finance function, the CTO, the technology function, and then HR and marketing, and so our leadership team has eight individuals plus me that kind of discuss how we’re going to work together to serve you guys, our listeners and users with those four businesses and the supporting functions that are needed to drive those.
Why do I have that set up? Well, because I want folks to think about how to maximize the growth in their particular business areas and not every general manager is good at hiring engineers or financial analysts or marketers, and so those core functions can be supported by the marketing, finance, and technology groups. The publishing team needs a bookstore, for example, we don’t have to have somebody in charge who really has a lot of technology experience, they can go to our CTO and request that he build a team that can support that.

Carol:
Excellent. So if I’m understanding correctly, Scott. It sounds like you have the four businesses, you have the executive functions, and then you have resources that are shared throughout those four businesses to help grow the business as needed. So I’m curious, did this structure exist when you took over in 2018? Did it look like this or was it substantially different?

Scott:
Absolutely not. The structure is relatively new. It’s something we placed towards the end of 2020. I’ve begun building a leadership team around, and that was a big inflection point for us. So another big change in thinking, and this all works together and we’re getting really real with this. But, again, I had this mentality of, “Hey, employees, this is our team, this is our family, and I want everyone to come up together through this organization.”
What happened there, frankly, this is a mistake I made, was we had some folks running parts of the business that were not serving our customers well or who are leading other employees. You promote somebody who’s maybe not doing the best job in some cases, and they’re leading other people, and now your attempt to be a great leader, your vision of a great leader, it can backfire, because you’re now putting folks who can’t do the job into places where they can’t be successful with that.
And so we made a decision in late 2020 that we wanted to build a company where everybody who is in the right seat with the get it, want it, and capacity to do it component, and that resulted in another big wave of changes here at BiggerPockets. A number of employees have left the company over the last eight to nine months, and it’s been tough and emotional, and those types of things, but this new structure has emerged with zero-base in the organizational structure with that, and so we have a lot of new members of the leadership team, and it’s very exciting and wonderful now with a lot of great wonderful talent that we’ve been able to bring in, but it’s also been difficult with folks that we’ve worked with for a long time who have rejected the new structure or the new asks with those types of things or who we’ve had to move on from in some cases.
So that weighs on you every day as the CEO and is difficult, at least, just for me, but it’s the difference between a really scalable position for the next phase and service to our users where every part of our brand I think is now presenting at the best that ever has, which I think is really, really exciting and benefits all of our customers.

J:
Yes, and certainly, we talk a lot in the business world about how founders and CEOs tend to be good at certain things and not good at other things. So for example, some founders and CEOs are really good at taking an idea and incubating that idea and building it up into the first 1 or 2 or 5 or 10 employees. Other CEOs or founders are really good at taking a company from a thousand employees to 10,000 employees. Other CEOs are good at that stuff in between, and it’s the same way with employees, having worked at small companies and big companies everything in between, I’ve seen that there are certain organizations and organizational structures where I tend to thrive and others where I don’t.
So that kind of leads me to my question about you mentioned in 2018, you had a private equity company come in and for those that aren’t familiar, private equity companies basically we sometimes use the term hedge fund, but they’re companies with lots of money that come in, they buy part of a company in the hopes that they can get the company to grow substantially, and then either profit from that or sell it off again and make more money.
I imagine and a lot of people don’t know much about this process of BiggerPockets, Josh talked about a little bit, but we haven’t talked about it since episode one, but can you talk to us a little bit about what that process looked like when a private equity company came in and said, “Okay. We’re buying you.” What are their goals? What is their day-to-day involvement in the business? What are they pushing BiggerPockets to do or to become so they can achieve their goals and how do you reconcile that as a CEO who is trying to kind of stay the course for your users, your customers, your fans, and where that might conflict a little bit with what the new owners have to say or want?

Scott:
Yeah. Absolutely. So I think that’s the initial impression you have, and that was my biggest fear going into this process when Josh asked me to lead that process was this company has a soul and is helping so many people in so many ways, and it’s something I love. Would somebody come in and demolish that soul or whatever in the name of sucking profits out of folks? That was a very important factor in the process for Josh and I is making sure that whoever we brought on as partners, and again, this is a partnership, right? With our investors bought into that mission, and those types of things.
And so our private equity partners are a firm called McCarthy Capital. They’re a long-standing private equity business. They, for some reason, decided to take a bet and chance on then 27-year-old kid who had no idea what he was doing, which is me, if you’re not following that, and Josh’s company with that, and so they bought into our values and understood what we’re trying to achieve here, where we’re trying to go in the future.
We presented to them exactly what has been the case for the last couple of years, and where we think we’re going. They believed those projections. We have to the best of our ability, I think lived up to or exceeded some of those projections that we put in front of those investors, and yeah, the goal at the end of the day for an investor is everyone understands this is cash flow and appreciation, right? And so that’s what we’re trying to do here.
We call cash flow EBITDA, earnings before interest, taxes, depreciation, and amortization, and so our goal is to, one, generate EBITDA, yes, and growth in that, but really to tell a story about the future growth potential of the business over time, and I think that is where all interests align, because if the story is, all right, we’re going to raise prices and make sure that we’re maximizing all revenue at all costs, that degrades your brand, that degrades this, and I think this is an enduring potential brand here with BiggerPockets something that could be around for 20, 30, 50, 100 years, and that drives value when you have a brand that can be around like that, that has those types of things.
So I think that’s the story that I think everybody is aligned around, and there’s lots of ways to do that in a way that helps our users. For example, here’s a great way for us to drive value for shareholders, cash flow, while at the same time serving our users. Where can you go online right now to find an investor friendly real estate agent or an investor friendly lender or someone who actually serves small real estate investors, people with 1 to 10 properties?
There is no marketplace for that. There is no matchmaking service for that. We can build that out and our customers, in that case, will be the agents and lenders, and that’s a great way to add value to our business while also serving users. “Hey, great. You’re not paying us. Our agents are paying us, because they want to get to know you.” Those are some good ways that we can go about doing that.
So interest have to align, this is a for-profit business, and we have to drive value for shareholders. We have to enable growth opportunities and successful outcomes for our employees, and we have to, at the end of the day, make you, our listeners, successful, in your real estate endeavors, otherwise, we go out of business long term. And so if you capitalize on it incorrectly in the short run, you ruin your long term potential, and that destroys value for shareholders. So I think at the end of the day, the more I learn about this and the farther I dive in, capitalism works.

J:
I love that. I love that. You characterized BiggerPockets as a brand that could potentially live on for decades, century. It is already probably one of the most enduring real estate investor brands in existence. Does that ever terrify you that you are responsible for not just maintaining the brand that’s been built, but also you’ve been charged with growing that brand and making it potentially one of the largest brands on the planet?

Scott:
Absolutely, yeah. Like, “Hey, you’re the guy who screwed up BiggerPockets.” That’s not a legacy you want with that, so 100% that weighs on me with that kind of stuff like, again, I think it’s a brand with a good soul. We emphasis on moderation of our forums in Facebook groups, consistently, we’re weeding out the spam, all those different types of things over years and years and years and years and years finding great people to come in and be our guests and hosts, and those types of things on the show.
Shout out to you guys. Those are things that are carefully curated over years and years and years, and those are things that we try to hold sacred with this stuff, and I think are really important to that, and absolutely, fear of just generally screwing it up for people who love this brand is another huge motivator that has nothing to do with those types of things and something that keeps me on my toes each day.

J:
So talk to all the other business owners out there that feel that, maybe on a smaller scale, they’re not running necessarily BiggerPockets, but their brand is just as important to them, and their family being able to eat, and their lifestyle as BiggerPockets is to a lot of us, how do you reconcile this fear of doing the wrong thing with the idea that you need to continue to grow, you need to continue to scale, you need to continue to build the brand?
There’s a great book out there called the Innovators Dilemma, and it’s really all about how a lot of times super big companies, companies like Xerox, companies like IBM fell to some degree by the wayside because they got so big that they were terrified to innovate, they were terrified to take too many chances, because when you take chances as a big company, you tend to risk the company, but by the same token if you don’t take these big risks and these big chances, other companies will come in that don’t have that fear, and they’ll eat your lunch. So how do we as business owners and CEOs, how do we reconcile that we want to take the big risk because it’s right for the company, but we don’t want to mess up? How do you personally do that?

Scott:
I think a great mental model here is poker, and one of my favorite books is Thinking in Bets by Annie Duke, who we had the opportunity to interview awhile back on the BiggerPockets Real Estate Podcast, and that’s the answer is you can’t fear failure, of course, everyone fears failure, but what I fear more than failure is making the wrong bet, and so that’s where it comes down to and so we’re making some big bets if you’ve kind of been watching with this, right?
One of the fundamental problems I have right now is BiggerPockets is big, it’s got a lot of people. Two million users have joined BiggerPockets community over the last, I guess 17 years now. I can’t serve 2 million people and their niche interest. I can do it on a website, I can build a website experience that serves those folks, but our podcast cannot speak every week to the needs of a certain cohort of users. And so what we’re doing is we’re building out sub brands like Real Estate Rookie, BiggerPockets Business, BiggerPockets Money, those types of things that allow our users to get a more tailored experience in those areas and the idea is to build brands around that, not just podcasts but Facebook groups, and website experiences, and YouTube channels and books, and those types of things.
So that, for example, in the rookie versus real estate, which I think is the one that everyone can wrap their minds around. So that our rookies can go there and get a good experience. Obviously, everyone can go and feel free to join all the communities and get engaged as much as they want, but the rookies can really focus on the new terms, and that’s where we can explain cash flow 10, 15, 20 times over and over and over again until that sinks in, which is what everybody needs, which is what I needed when I was first getting started, and now Brandon and David can go a little bit more advanced on the real estate show, and we don’t have to explain that quite as much in those types of things.
So it better serves those two large audiences, and so fundamentally, that’s a scary proposition what you’re going to, the way that someone outside will look at this, you’re going to cannibalize half your audience right away. Well, yes, because if we don’t do that maybe somebody else would do that. We would begin to see our brand erode naturally with that, and so those types of big decisions are scary, but I think that is the best way to serve our community and something that we can do right away that I think is the right bet at the end of the day.
For something that I haven’t foreseen happens, I can rest easy thinking that at least at the time I made the bet that I thought was correct for the business even if the outcome doesn’t transpire, but I think everyone loves the rookie brand so far [inaudible 00:31:31] so I think we’re in good shape there, but that’s an example I think of answering your question.

Carol:
I think that’s an awesome example and the example around creating these sub-brands to truly provide the customer experience that you’re looking for is just one of I’m sure many ways that you’re focusing on helping people to really maintain the soul of the company in order to grow the right way. I would love for you to give some of our business owners some more examples of things that BiggerPockets is doing to really rely on and take into account customer and user feedback. You’ve talked about, for example, again, creating these sub brands is one of the action items that you’re doing to make sure you can create a custom tailored experience. What are some of the mechanisms that BP has in place to gather this feedback, to infuse it throughout the organization accordingly, to make decisions around it, and how can we incorporate those types of things into our businesses?

Scott:
Yeah. So NPS score I think is a really, really powerful tool on this, and NPS scores are collected in a variety of ways. So an NPS score is a net promoter score and basically it says on a scale of 1 to 10, how likely are you to recommend BiggerPockets to a friend or colleague? And so people who answer 9 or 10 are called your promoters, people who answer 7 or 8 are kind of neutral, and people who answer 6 or below are detractors from your brand.
That’s a 1 to 10 scale, but Amazon, when you look at Amazon and look at products, you have the exact same thing with five stars. Five stars is net promoter, four stars is neutral, and three and below is a detractor from your brand. So it’s a really powerful tool, and it can be applied across every one of your products, and for your entire company as a whole. So for example, we can ask that question generally speaking about BiggerPockets to our users and track that over time.
You’re always going to have some detractors, so there’s ranges that are good or bad. So everything is relative, so we’re always starting with wherever we’re at and trying to get to better with that, but we like to think that we have very excellent NPS scores across the brand as a whole, and that’s something that we try to maintain.
One of our challenges is because some folks really like BiggerPockets as a whole brand. They might be a net promoter for us, but they might not like our mobile app, for example, and so it can be sometimes difficult to distinguish, okay, which parts of the brand did you like or not like? So in another business it might be, “Hey, I really liked the work you did in rehabbing the house, but I didn’t like your billing or your customer support situation.” And so it’s important then I think to do deeper dives at that next level and say, “Okay, how do you like our podcast?”
And so you can see on iTunes the star ratings for the podcast, and that gives you an idea of what your net promoter score is or the books, each one of our books, Amazon is very nice and just makes that very easy for us to compile with how much people like our books. So same thing with YouTube, you can do a similar thing with, you can extrapolate an idea of what your NPS score is based on thumbs up, thumbs down, and those types of things, and so we’ve done really a lot of work in the last year, in particular, in isolating each one of our products and business lines and understanding NPS scores across each one of those things, so that we’re able to understand satisfaction, and that I think is one of the most important things that you can do to understand that and get a baseline, and then begin improving it relentlessly.

J:
I love that. We had a guest on a couple weeks ago who had a quote. I can’t remember who the guest was. I would love to give him or her credit, but the quote was something along the lines of “If 50% of your customers want hot tea and 50% of your customers want cold tea, you’re screwing your business if you serve warm tea, and it’s better to figure out which of those customers that you’re going to serve, even if it pisses off the other 50% than to try and please everybody.”
You’ve kind of touched on this a little bit with BiggerPockets that we’re trying to appeal to those that have a lot of experience with the Rookie show. We try and appeal to those that don’t have much experience. The Money show is appealing to those interested in FI. The Business show, and this is a hard fine line to walk for any company, but especially a company like BiggerPockets that like you said has a really high net promoter score, everybody loves BiggerPockets.
I mean I rarely talk to anybody that knows BiggerPockets that-

Scott:
We’re able to find people who don’t like BiggerPockets, don’t worry.

J:
There are a few out there.

Scott:
Some of those people are the most hopeful for what we’re trying to do with this stuff actually, so.

J:
Absolutely, but I’d love to get your take just in the vein of that quote and just this idea that you can’t please everybody all the time. How do you make the decisions on the direction of BiggerPockets? How do you decide what 2021 is going to look like, and then 2022? Who kind of figures out what that roadmap looks like when you know that there are so many things you could be doing, there are so many things? All business owners kind of fall into this idea of there’s a million things I want to do, how do you figure out the right one or two or five to be doing this year, next year and the next five years?

Scott:
Well, first of all, I think I want to just go back to a second to what you said about you can’t please everybody. Look, we have an obvious market, right? This is these are folks who are interested in building wealth, buying businesses, buying real estate, those types of things. If you’re somebody who thinks that property rights as a general concept is not something that society should have, you’re not going to like BiggerPockets and we’re not really interested in your opinion, right? That’s not something that we’re going after with that.
Your example is correct and applies. You have to weed that out in your customer segment, because if you’re going for high-end remodeling in your contractor business, you don’t want to get feedback about your price, how you’re more expensive than the lower price service provider that’s going to do a different quality level of work, right? You’re interested in your customer base of people who are looking for the high quality contractors who are going to have a bigger budget for those types of things. So it just depends on your market 100%.
In terms of how we’re going to think about this going forward strategically, it’s all of that. It’s what do large portions of our users want or if there are small subsections of our users, can we serve that small subsection profitably? For example, maybe there’s a lot of people out there who like personal finance and want to get out of debt. That’s a big market, but your lifetime value of a customer in that market may be much lower, for example, than that of a apartment syndicator, right?
There may only be a few thousand big time apartments indicators in the country, but those people may be worth a tremendous amount of money, right? And so there’s an LTV and audience size component that we have to balance in those types of things, and there’s other subjective factors. For example, most of the people who write for our BiggerPockets blog or come on a lot of our shows, really love real estate. They love it, right? They talk about it all day long. They’re doing lots of deals. They’re becoming very prominent and very wealthy through real estate investing, but most people who invest in real estate are not like that. That you’re hearing a skewed perception of that top 1% of most active and engaged enthusiastic folks, whereas the 99% are really like, “Yeah. I’m going to buy a home and rent it out and I’m going to do another one in two years, and then maybe another one in two years after that.”
And so I think you have to think about, “Hey, great.” Like I’m answering this in a very vague way, but how about this. In online communities, there’s a rule of thumb called the 991 rule, where 90% of your audience are going to be lurkers, who will passively absorb, this might be a person who listens to the podcast, but doesn’t really participate in any of the forums or Facebook groups or any of that type of stuff, but reads the content, likes what we’re doing, just isn’t a commenter or engaged, engaging person, that’s totally fine.
Then, there’s the 9% who will post a few times and be involved, but not really doing that much involvement, and then there’s the 1% who do all of the posting and people who post thousands and thousands of times over years and years and years, and so your framework about where you want to go I think has to address those types of things. So where do we see the business in three to five years? I think we’re going to have multiple more of these sub brands that we’re building out, and we’re going to have to think through like, “What is the best way to serve all of our customers reflecting those rules?” Maybe there’s a large audience of Canada needs a BiggerPockets presence at some point, right?
And so and the rules are different there, and that needs to be a community. Maybe multi-family syndication needs a community, and maybe that’s the syndicators and some of the folks who are interested in passively investing in real estate. They want to meet these syndicators, and so there’s an opportunity there to create value, and obviously, you can imagine that there’s ways to make money in serving that community, and you have to be profitable in order to scale stuff, right? That’s a basic thing, if you’re losing money, you have to shut down your program.
So LTV, market size, and the engagement levels or the power users, the folks that are really prominent and our moderators I think are all considerations you have to take into place as we think about where we’re going to expand and go in the future.

Carol:
Very, very cool. So as you’re expanding and growing into the future serving all of these different communities, creating sub brands, doing all these new initiatives to really scale and grow that, it sounds like you have to have some really solid operations systems and processes within your business, and back in the beginning of the show you were talking about how before you took on your current role, I think you’re a director of operations, right? So for business owners out there, what are some of maybe the tools, the resources, the systems, the strategies that are working really, really well within BiggerPockets that we can start using in our businesses too?

Scott:
Absolutely. I like to think of everything as factories. People don’t like to use the word factory because the image of shift work and grinding it out, but that’s what things are. This podcast is a part of our podcast factory. We’re going to record this, and then magic happens downstream. Thank you, Dave, and our podcast team for all you do with that, where the show gets edited.
We look and sound way smarter than we actually are at the end of that process. The title for the show is chosen, the transcript is written, all those different types of things, and that costs money, and so how do we do that as efficiently and at low cost as possible while making sure that the overall quality is as high as possible and our ratings, how many folks like to listen to the show each week are as high as possible? Those ratings tied to advertising dollars.
And so that’s your operation of one BiggerPockets factory here. It’s what are the ratings of each show, how do we get guests on the show? How do we title them? How does each component of what needs to happen to produce a great podcast gets written down, documented and operated on each and every week? And if you guys have noticed, we’ve been able to expand production over the last six months I think in a really healthy way where instead of producing four podcasts a week, we’re actually producing 17 podcasts a week with BiggerPockets nowadays with the daily show, two on the real estate show, two on the money show, two on the rookie show, and I think we’re still one a week here, is that right on the business show?

J:
Yeah. Just one right now.

Scott:
But that kind of expansion production really allows strategic optionality for the business in a lot of ways. Same thing with our book publishing business, we’re able to produce I think four really good books a year. If they weren’t really good books, nobody would buy them, and we would scale down production. So the first thing is you’re going to produce excellent quality content, but then you’re going to make sure every part of that. Okay, we have a timeline for the production. We know exactly how long it’s going to take to write. We know how much it’s going to cost to edit. We know how many books we’d need to sell to break even or better on that book launch and everything boils down from there.
Then, it’s like, okay, if people like these books, let’s write more. I like reading the books, and so, again, capitalism at work with these types of things, right? And so you have the same thing for YouTube channel, you have the same thing for social media, you have the same thing for our marketplaces where we match make our users with agents and lenders, and those types of things. And so when you get more operationally excellent, it gives you strategic optionality, because if you can do something cheaper or more efficiently or at bigger scale than other companies, it gives you the option to acquire, bring in, partner in ways that would not give you optionality if you’re doing it less efficiently than your peers.
So I think strategy and operations go hand in hand, and yeah, absolutely, that’s why everything is around driving operational excellence, the output of which is really good content, really good subscription products, really good agents and lenders, and those types of things for our users, and whenever that fails, we need to move out of those businesses, and wherever that’s working we need to do more and continue to get better and better at those operations.

Carol:
That’s a great take on that, and I especially love how those types of lessons, those types of insights can absolutely be incorporated into any type of business, any size of business, any industry. They’re common themes that work across the board, so thank you for laying out that outline.

J:
I like the way he called this podcast a factory. That makes us factory workers.

Scott:
That’s right.

Carol:
That’s right.

J:
It’s going on my resume.

Scott:
Every part of this podcast is mapped out and documented and this is like part four, right?

Carol:
There you go.

Scott:
There’s the scheduling, the outlining, all that kind of stuff, and then parts 5 through 50 will happen following our recording, and your listener will hear the final product.

Carol:
That’s right. Super fun.

J:
I’m going to start telling people I’m a factory worker.

Scott:
That’s right.

Carol:
Good for you. Good for you.

Scott:
We can change your title if you’d like. That would be… Yeah. I know a guy. Yeah.

J:
Carol’s like shut up and let me speak.

Carol:
Seriously, I’ve tried like four times, but that’s okay. We’re used to that. No big deal. I want to circle back just to touch, Scott, a few times during this discussion you’ve talked about your book publishing business, and you yourself are the master of doing many, many things, many side hustles in addition to your CEO-ship. You, I believe wrote your first book Set for Life a few years ago with BiggerPockets, and you just released a new one in conjunction with Mindy Jensen about first-time home buyers. So I would love to hear more about that book, and additionally, I just want to hear more about all these other things you have going on in addition to being a CEO. Your FI journey, your investing, just all of these things that you are somehow managing to do effectively.

Scott:
So my obsession in my career and perhaps I’ll admit this a little bit ashamedly was financial freedom. There wasn’t anything beyond that at the time, and honestly, I don’t think there’s anything wrong with that at the beginning stages. It was just how do I not have to work a job for somebody else all day long every day for the rest of my career, and then retire at old age? That was all encompassing at the first point.
And so I wrote Set for Life from that state of mind where, hey, I had kind of gotten over when I think there’s this hump where I had a few hundred thousand dollars in net worth, my assets were producing passive income, and it was a clear line of sights at the finish line at that point. I thought that was the challenge that I thought hadn’t been mapped out step by step in a book, in an aggressive, really aggressive format, which I think my book really is. It’s an aggressive step-by-step guide to FI. It’s not going to be for everybody, because you could, “Hey, spend $2000 a month.”
How do you do that? Well, you ruthlessly cut out everything. You start biking to work, you house hack, you buy a duplex or a house with extra bedrooms and get your housing expense down to zero. If you can get your housing and transportation to zero, and you start making almost all of your meals, besides the special dinners out with friends and those types of things, you can really save a lot of money and build wealth, and so for me, that was really important, and where I’ve evolved I think since beginning my journey and in the process of writing that book is like, “Okay. This is a worthwhile goal.”
And what happens here is that while it might be a selfish interest of just trying to become independent, at first, there’s nothing wrong with that and you’re freeing up human potential to go on and impact the society in ways you can’t possibly predict once people achieve financial freedom or get very close. The person who no longer needs to work a job is the person who may go on and change society for the better, start a non-profit, become involved in politics, start a business or just do something cool.
These are not people who go and play video games all day long for the rest of their careers, so that is now my kind of like all-encompassing mission and the purpose I think of BiggerPockets that we’re evolving towards is how to make that work, and I think our brand, moving into those different brands that I described is perfectly aligned with that mission, and so I’ve completely gotten off on my rant here and lost track of your original question, but how close am I to answering that?

J:
We were asking about you. Stop talking about BiggerPockets for a second and tell us about Scott Trench, outside of your CEO job, tell us about your FI journey, tell us about the new book. I want to hear about the new book. I want to hear about your investing. What are you doing?

Scott:
Oh, sorry. You can tell I like BiggerPockets. So, about me personally. So I have a beautiful and wonderful wife named, Virginia. We got married in November of 2020. So very excited about that. We’ve been dating for five years prior to that. Outside of work, I love to, I play rugby. I love to play video games. I’m a reader. I like fitness, outdoors, to travel, all that kind of good stuff.
I love just getting beers with people and then talking about business and personal finance, because I’m a nerd about that kind of stuff, so I even do that for a hobby sometimes just because I love it. My FI journey kind of probably wrapped up from a lean FI or ability to sustain myself without work probably in early 2018, as I was assuming the president role, and so ironically, this obsession with becoming FI and retiring early transformed into an obsession about having this job that I couldn’t be happier about having and running this very cool company which now encompasses my whole life, and is now not really a financial commitment, although, yes, I get a great salary and lots of upside with the job, but it’s more about like the commitment to shareholders, to our users, to our employees, and those types of things.
So my personal wealth is in real estate. I own a portfolio here in Denver, and I’ve begun to invest in syndications. I am a heavy stock investor, index fund guy. I probably put most of my free cash flow into index funds, although my real estate portfolio is very close in size, because I’ve gotten much better returns in real estate than I have in index funds over the years.
I also have an equity stake in BiggerPockets as part of my role, and so really that’s a big part of my net worth at this point as well, although I don’t really count that when thinking about things, because it’s not as liquid for example as real estate or stocks and those types of things. Then, yeah, I write books and write about this stuff all the time with those types of things. So I have the two books, Set for Life, and then now First-Time Home Buyer, which released on March 8th, which you can guess what that’s about from the title. If you can’t, maybe it’s not for you.
And so that’s really about the story of your first time home purchase is a huge financial event in your life. If you lay all your liquidity down on the maximum home you can purchase and assume the maximum mortgage payment, it’s really going to limit your life options and ability to invest in other things. So if you can make a smarter decision there, you can get yourself flexibility, still have a great lifestyle and perhaps keep your home as a rental, sell it for a gain at a little higher likelihood if you have to move on and just generally have optionality to build wealth otherwise. Really synopsizing a book that we spent a year on, Mindy and I writing, but that’s the high level overview of it.

J:
Love it. This is the reason why I was forcing you to talk about yourself there for a second, even though I know it seems like you don’t like to talk about yourself, you’d rather talk about BiggerPockets, but this is important, because we have a lot of people who are probably listening to this right now. You’re on the younger side. I think you’re around 30, and we listened to this story, and you have achieved FI or you’re on your way to achieving FI. You are CEO of a world-renowned brand. You are a real estate investor. You’re a best-selling author. You invest in stocks and other things.
You’ve really figured out how to do a whole lot of different things successfully, but you also talked about how you are newly married and how you enjoy video games, and you have a personal life, and you’re not a savant. I mean you’re a really smart guy, but we’re friends. I don’t mean this as an insult, but you have proven that if somebody works really hard and has half a brain, they can be successful with whatever they do, and again, I don’t mean that as insulting, you’re obviously a super smart guy, but you’re relatable, and if you’ve done it, if I’ve done it, if Carol’s done it, anybody can do it, which leads me to my question.
If you had to give some advice to people out there who are thinking I want to be Scott Trench, I want to write books, I want to invest in stocks, I want to be successful with FI, I want to either start a company or grow a company or run a company, somebody that wants to do and have multiple streams of income, what are some of the techniques and things that you do in your life that allow you to be successful doing all of these diverse things successfully?

Scott:
Yeah. I do want to chime in about the impact of luck here, because suppose I had never come to BiggerPockets and had become an agent or something like that instead, I like to believe that I would be able to command an income of between 100 and 150, perhaps more in income, and I believe my net worth would be about half of what it is today under a track like that, for example, right? Perhaps less, perhaps more, I don’t know, but I do want to like indicate that the fact that I joined a startup at that point as a third employee with what Josh had built and had this opportunity is serendipity.
It’s right place right time. I believe I’m a reasonably competent person who is playing the hand I’ve been dealt to the best of my ability with those types of things, but I think luck is a huge component in that. That said I think that while acknowledging the components of luck, you’ve heard probably hundreds of times from different people about techniques to potentially boost your odds of success, like waking up early in the morning, doing lots of reading, doing lots of goal setting, doing lots of visioning, doing lots of networking, those types of things.
I bet you could put an array of 10 things or 20 things on the board that successful people disproportionately do, where unsuccessful people disproportionately don’t do those things. Some of the things I do that would probably perhaps be included on that board or that list are I set goals every single day. So I have a little sheet and I say here are my top three priorities for the year, the quarter, those types of things, and here are the five things I’m going to do, usually just a few minutes each, nothing simple, like make this phone call to advance this higher forward or whatever.
And so every single day I’m doing at least three to five things that move me a little closer to the goals. I also read relentlessly. I used to go through 50 books a year. I probably go through 20 to 25 books a year in the last 2 or 3 years. I track my spending and my wealth on a regular basis. I try to stay fit and eat healthy, and those types of things.
What I don’t do is I don’t wake up early. I’m sure that if I woke up early that would give me better odds of being successful. I just can’t do it. I used to spend a good amount of time networking every day or at least getting a coffee with a user or a connection in the industry or whatever in Denver on a two to three times a week basis. I don’t do that since COVID has started. I do that much less, but I’ll restart that again, but those are I think some of the things that I’m doing to try to, that are habits I think that I’ve done that have increased the odds of success.

J:
I absolutely love that, and it’s fine. You talk about luck, and I absolutely do not discount luck. I mean we need to have gratitude for all the good things we have in our lives because a lot of it we can’t control, but one of the best things I’ve ever heard, you’ll probably like this. Sometimes it’s referred to as luck razor. We’ve heard of Occam’s razor and all these other quips and razors.
There’s this thing called luck razor that I really like, and it’s something like if you’re stuck with two seemingly equal options, pick the one that feels like it has the most opportunity to produce luck down the road. So for example, if you have two choices, I can stay in tonight and I can watch Netflix or I can go out and have drinks with a colleague of mine. Well, both of them seem like equally good choices.
The Netflix one isn’t going to result in you serendipitously finding a great new opportunity, but the going out with a friend or a colleague having drinks could result in you finding the next new business idea or the next new investment. So if you have two things to choose from, put yourself in the position of doing the thing that’s most likely to result in “getting lucky later down the road.”

Scott:
Let me give you an example of that, because I think that’s great of the chain reaction that started this whole set of things in a little bit more detail. So I was obsessed with stocks and real estate investing while working my 9:00 to 5:00 prior to BiggerPockets. I met this guy on a park bench while taking a break walking a friend’s dog and started talking about stocks, because I annoyed everybody about talking about stocks at the time.
I still get into real estate, but we had a conversation about stocks, and so he invited me to a mastermind group with seven local entrepreneurs. I had no business being in this mastermind group. I had no money and I was working a 9:00 to 5:00, and these are all cool real estate entrepreneurs, but I’m like, “All right. Well, I’m here I’m going to take every single one of these people out to lunch.” I took every single one out to lunch, bought them lunch, even though I was trying to save money, and one of them happened to bring me back into his co-working space, and that is how I met Josh Dorkin.
So a 100% luck, but 100% aligned with what you just said there, and that’s a weird chain reaction. A park bench led me to Josh Dorkin with that, but I would never have gotten that if I hadn’t been willing to walk my friend’s dog who needed to walk that particular friend, who’ll remain unnamed should not have gotten a Border Collie in that particular situation. But it was like, “Hey, I’m going to do that.” That’s what led me into this serendipitous wave of moving into this job.

Carol:
I see a movie in there somewhere like the opening scene is you walking a dog and sitting on a park bench, and then it does the flash forwards and flashback, and here we are. Good stuff.

J:
Awesome. I love it. Okay. Well, we are about an hour into this episode which means we are getting ready to jump into our final segment called the four more, and for the first time in a hundred episodes, I’m not going to explain what four more is. I’m going to assume what it is. I’m going to assume our listeners know what it is, and let’s just jump in. I’m going to ask the first question, you ready?

Scott:
Let’s do it.

J:
Okay. Scott, what was your very first or very worst, be careful here, job, and what did you take from it that you’re still using today?

Scott:
My first job was at Pier 1 Imports. It was 2008 or 2009, I was in high school, and I had to go around to 20 different stores in a local shopping center and just submit my resume at each one, and they were the only one who called me back. I was unpacking boxes in the back room, sweeping the floors, those types of things. I never ended up, unfortunately, and perhaps surprisingly too, everybody using the employee discount at Pier 1. That wasn’t of interest to me at the time, but I don’t know.
I just learned like, hey, that’s hard work. It’s discipline work, but like, man, by just showing up and trying my best for each one of those days, I was among the best employees, and I had no skills or whatever. So I think that was a lesson I learned from my first job at Pier 1. It was a good job. I was grateful for it.

Carol:
Pier 1’s a good spot. I missed Pier 1. I’ve worked at about every retail establishment I think that’s been in existence at some point, and Pier 1 is a really, really, really good spot. I love it.

Scott:
They just sold things I couldn’t understand why people bought.

Carol:
Right? You walk into that store and that scent just hits you in the face, right? You can still smell Pier 1.

Scott:
I remember it very well.

Carol:
You can still smell it 100%. Okay. So question number two, Scott. What is the very best piece of advice that you have for small business owners, for entrepreneurs that you have not yet shared here today?

Scott:
I’m going to advertise somebody else’s business here, but I would say read Traction or read the Four Disciplines of Execution, which is another, a totally different brand, but find an operating system that you don’t have to invent to run your business, because I had been running BiggerPockets without an operating system for a very long period of time. Just things I had invented and cobbled together, and once I just used something that somebody else had built, right? We use EOS now.
Oh, my gosh. It’s life-changing, because you’re now not like inventing. People have already figured out ways to make sure that all voices are heard. Here’s a little one, when you go to a crowd of 10 people, the most dominant person, you ask a question about what do you think we should do next? The most dominant person is going to raise their hand and speak up. That’s not necessarily the most intelligent person, and your system needs to be able to float that to the top.
So, in our EOS meetings at BiggerPockets, we have a system where anybody can put an issue in a piece of paper, and we vote on the issues independently and silently and see which ones rise to the top, and little things like that, how are you going to figure that out without hearing that and spending a lifetime? If you can just use an operating system like an EOS, like a Four Disciplines of Execution, like any one of those. There’s others alternatives if you don’t like either of those.
You can really I think make life a lot easier for yourself rather than trying to invent those things, and let me tell you this and they may not like this, but these things are cheesy, there’s acronyms, there’s like fluff and videos and all this kind of stuff, level 10, that you have to use, embrace the cheesiness, whichever program you use, embrace the cheesiness because it makes things a lot better over time.

J:
Yeah. It’s funny I was telling Carol. I do some work with you, Scott, in BiggerPockets, and I remember hearing about Traction the first time. It was when I was called into a “level 10 meeting.” I laughed about it because, yeah, it’s one of those weird, cheesy names, but we get into the meeting, and it was probably one of the best run meetings I’ve been in a decade, because everybody knew what to expect, everybody knew their role, and everybody knew what the format of the meeting was going to be. So, yeah, I’m 100% on board.

Carol:
Yes. Totally embrace that cheese.

Scott:
Get an operating system and embrace the cheese within that operating system.

Carol:
You got it.

J:
Absolutely. Okay. Question number three, you’re a reader, you own a publishing company or at least you run a publishing company, one of the best publishing companies on the planet. Recommend a book out there that a lot of us may not have read. You can’t say Traction, because you were just talking about Traction. Recommend a book that we may not have read that you think we should all read.

Scott:
A book that… Okay. I’m going to give you three books here. One is the Psychology of Money by Morgan Housel, and these are not BiggerPockets books. I feel like I always recommend the BiggerPockets books, but I can’t.

J:
Thank you.

Scott:
These are off brand books, but Morgan Housel’s Psychology of Money I think was one of the best finance books I’ve read in a long time, really, really, really enjoyed that, easy read, good concepts, and it kind of has the gray in personal finance where everyone tries to get a right or wrong or puritanical approach. The second book that I would say is one called the Outsiders, and no, not that outsiders. The Outsiders Eight Unconventional CEOs who beat the market over a very long period of time.
I’m butchering the subtitle, but that has, again, a story of eight different CEOs who produced 20%, 25% compound annual growth rate returns over 20 plus year periods each, which I think is really phenomenal. Spoiler alert, it’s not Jack Welch. He’s not among them. There’s other folks in there, and I really enjoy learning from their approach. I said I was going to give you three. I’m going to stick, stop there with two. I think those are two good books.

J:
I’m going to give a third book because I need to give a shout out for your book Set for Life. A lot of people know about this book, a lot of people have relied on this book to become financially independent, but for anybody that hasn’t, definitely our kids are young, they’re still 10 and 11, this will be absolutely one of the first books our kids read when they’re old enough to really grasp it. So anybody that hasn’t read Set for Life, check out Scott’s book Set for Life.

Scott:
Well, thank you for the plug. I appreciate it.

Carol:
There’s Scott changing the world. Okay. Tears in my eyes. Stop it, Carol, regroup. You can do it. Okay. The fourth and my one favorite question. Scott, can’t help myself. This is amazing. Scott, what is something along the way either for your work life, for your personal life, your professional life, I know you’re a FI guy, I know you’re not all about splurges, but there has to have been a splurge along the way, whether it’s a material thing, some type of experience. What is something along the way you have splurged on that was totally and entirely worth it?

Scott:
Okay. I, in the last year, we rented out a really nice apartment, and I have splurged on a very overkill gaming pc and enormous 77-inch fantastic TV as well, and so we have a really nice theater and little man cave for me down in the basement right now, and so that’s been my splurge. Probably 7500 cumulative going into that, the fancy [inaudible 01:03:16] electronics and that kind of stuff.

Carol:
That is a super fun splurge. Seriously, that’s amazing.

Scott:
Great sound system.

J:
Awesome. Scott, this has been absolutely fantastic. That was the four part of the four more. I’m going to give you an opportunity to do the more part of the four more. Tell our listeners where they can connect with you, where they can find out more about you, find out more about that company. What was the name of that company that that you run? Wider Pockets.

Scott:
Wider Pockets. We’re rebranding starting on April 1st, 2021.

J:
I love it. Tell people where they can connect with you, where they can find out more about BiggerPockets, and your books and anything else you want to tell us.

Scott:
You can find me on BiggerPockets. You can just search my name in there. I’m also on Instagram @Scott_Trench. You can find my books easily through a Google search or on Amazon or we always like it if you buy it through BiggerPockets. So you can find out at the BiggerPockets bookstore, and yeah. I think those are the best places to find me. I’m reasonably responsive over email to [email protected], that’s probably the best place to reach me if you have anything that you really want to directly. I’m not always as good about responding to Instagram or even the BiggerPockets inbox as well on the site, but, yeah, so email or find me on BiggerPockets or Instagram.

J:
Scott, thank you so, so much. This was our pleasure. Thank you for being here for episode number 100. This is a big milestone for us and we’re honored to have you with us.

Scott:
Yeah. It was an honor to be here. Thank you guys so much and this is a fun interview.

Carol:
You’re amazing always. Thank you, Scott. We’ll see you soon.

J:
Talk soon.

 

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In This Episode We Cover

  • How Scott used the principles outlined in Set for Life to reach financial freedom
  • Taking a chance and joining a very early stage startup 
  • The importance of having very low expenses when making hard decisions
  • How to work with a private equity firm when they acquire part of your business
  • NPS (net promoter scores) and why they’re crucial for continual business improvement 
  • Driving value for shareholders, without tarnishing your brand for customers
  • Scott’s new book First Time Home Buyer
  • And So Much More!

Links from the Show

Books Mentioned in this Show:

Connect with Scott:

How does a 27 year old become the CEO of a major online brand? Not only that, how does a 27 year old take an online brand, build upon it, […]