Episode 36: Man, If I Win…

This has not been an easy year for Dana White, who has had to close one of her two hair salons and who has struggled, amid the pandemic, to keep the other one staffed. But this week she reveals to Karen Clark Cole and Paul Downs that she’s a finalist for a potentially game-changing pitch competition. “A $200,000 investment from Quicken Loans is a huge validator when you're looking to grow,” says Dana. “When you have first money in from Dan Gilbert, it bodes well for your company.” Dana also tells Karen and Paul that she’s just made her most important hire ever, an operations manager who had a compelling reason for wanting to join Dana. Plus: the Morning Report News Quiz.

Episode 36: Man, If I Win...

Guests:

Dana White is founder and CEO of Paralee Boyd hair salons.

Karen Clark Cole is co-founder and CEO of Blink.

Paul Downs is founder of Paul Downs Cabinetmakers.

Producer:

Jess Thoubboron is founder of Blank Word Productions.

Episode Highlights:

Karen Clark Cole: “She wants to show her daughters that she’s working for a Black woman.”

Paul Downs: “I do have a question about this new hire. The basic question with anybody who is good is: Why are they looking for a job?”

Dana White: “Man, if I win… a $200,000 investment from Quicken Loans is a huge validator when you’re looking to grow.”

Full Episode Transcript:

Loren Feldman:
First of all, I have a quick 21 Hats update for you. If you listened to our podcast [episode] two weeks ago, you know that I have taken ownership of 21 Hats, which means I own the 21 Hats Podcast, plus what will soon be the 21 Hats Morning Report, a daily email newsletter. But I have no salary, no employees, and no revenue. That, however, did not stop me this week from giving myself a promotion. [Laughter] I am now officially the founder and editor in chief of 21 Hats Media. Thank you, thank you. Thank you very much.

Dana White:
Congratulations.

Karen Clark Cole:
You don’t want to be the CEO, Loren?

Loren Feldman:
I thought about it. I might add that title at some point.

Karen Clark Cole:
You don’t think that’s an overrated title?

Loren Feldman:
Dana, I believe you have some interesting news as well.

Dana White:
I do. I am proud to share with your listening audience that I am a Detroit Demo Day finalist in the Build category, which is a $200,000 award to the winner, which will be announced Tuesday.

Loren Feldman:
We’re recording on Friday the 16th. We’ll publish this on the following Tuesday, so you mean that you’re gonna find out Tuesday evening.

Dana White:
Absolutely.

Loren Feldman:
And the Detroit Demo Day, tell us whose organization that is.

Dana White:
Detroit Demo Day is sponsored by Quicken Loans, which is owned by Dan Gilbert. It is their way of investing in local businesses that they feel have the ability to build and scale. This year, because of COVID, it’s not a live event. It would normally be live on October 20th or thereabouts. But this year, it had to be done similar to a television show.

What you guys will see when you watch it, it’ll be on YouTube, through the Detroitdemoday.com website. What you’ll see is this Shark Tank-type, beautiful space, long red carpet, and you’ll see me pitching to a panel of judges about Paralee Boyd and what I could do with the money, who we are, what we’ve done, and how the money will help. And then after that, the judges announce who won. And that’s it.

Karen Clark Cole:
Dana, were you there live, and no one else is? Is that right?

Dana White:
We recorded Detroit Demo Day back in September.

Loren Feldman:
You don’t have to tell us, but you already know whether you won or not. Right?

Dana White:
I do, I do, I do. And so what happens is that after the winner is announced, then it goes into People’s Choice. You guys here on the panel and your listeners can go to Detroitdemoday.com. You can go to my social media, Paralee Boyd, on Instagram, and vote for the People’s Choice. If I am able to win, I receive an extra $25,000, so that’ll be great.

Loren Feldman:
Where do we go to watch your pitch on Tuesday?

Dana White:
I believe it’s Detroitdemoday.com or .org.

Paul Downs:
It’s .com. I’m on it right now.

Dana White:
Yep, there it is: .com. Detroitdemoday.com, and you’ll be able to watch the pitch live, find out who the winner is, and vote for People’s Choice.

Loren Feldman:
And what’s this gonna mean for your business?

Dana White:
Man, if I win… a $200,000 investment from Quicken Loans is a huge validator when you’re looking to grow. Even just being a finalist, I’ve been approached by people who are interested in investing in minority-women-led businesses. I was on a panel earlier this week speaking about the lack of VC dollars to minority women businesses and the need for that. Even from that panel through the Milken Institute, people have reached out to me via LinkedIn and said, “You know what, I’ve reviewed your business model. I’ve looked you up online. Let’s talk.”

That validator from Quicken Loans, if I were to win, is his money is first money in, and when you have first money in from Dan Gilbert, it bodes well for your company. If I were to win, I have plans for what I’d like to do with the money and how to scale.

Loren Feldman:
Does he get a percentage of the company?

Dana White:
Really good question. You have two options. Once the winner is announced, I’m assuming they sit you down, and they say, “Hey, it needs to be an interest-free loan or a convertible note.” I have to decide.

Loren Feldman:
A convertible note means it starts as a loan but could become equity?

Dana White:
Yes, it converts over a specific amount of time.

Loren Feldman:
Oh, so automatically, it will become equity.

Dana White:
I believe so. Yes, I believe so.

Karen Clark Cole:
And if it’s a loan, do you know if there’s a term on the loan?

Dana White:
All I know is that it’s interest-free, and I don’t know how long. They discuss all of that with the winner once it’s announced, so I don’t know. I just know that if you win, you have two options: interest-free loan or convertible note. That’s it.

Karen Clark Cole:
Be careful you don’t give too much away.

Dana White:
Say again?

Karen Clark Cole:
Be careful you don’t give too much away if you go that route.

Dana White:
Exactly.

Loren Feldman:
Dan Gilbert, who built Quicken Loans and owns the Cleveland Cavaliers has been, for maybe 10 years now, working on building the entrepreneurial community in Detroit. Does that network mean anything to you? Does that help you?

Dana White:
Absolutely. Again, it’s tied to you winning it. If I win, it’s not just the money. It’s the access to the resources and the network. That’s been made very clear, that the winner will get access to all of that. They said that they want people—the winner’s circle, or the winners—once they are announced, to come to them and talk about their pie-in-the-sky for their business. And they really help you, using their networking and his reach, to help the winner make that happen. So fingers crossed, right? Because that would be amazing.

But even being a finalist, your business grows. It’s thanks to this podcast and the conversations I’ve had and listened to on this podcast that I made the jump and hired my first salaried, make-substantially-more-money-than-I-make employee. And even in the weeks that she’s been there, she has just gone through and turned so much around. And it’s because of Demo Day, being a finalist, and the way they’re setting it up. It’s going to kind of be a commercial, because it’s going to be this huge production. Even the camera crew, Woodward Original, that came and did the interviews with us and did the production on the day of taping—man, it’s a big event!

I’m getting ready for the volume of people who are going to come, and I’m going to be closed actually. I’m going to close my business, probably October 19th, and then stay closed until November 2nd because of staffing and COVID. We are finding that the federal government thought it was a good idea to pay people to stay home, and so stylists who work in close proximity to people—even though my salaries are above what they’re offering—have decided to stay home. Staffing has been a challenge. We’re doing a big hiring drive.

The young lady I hired, her background is recruitment. She used to be the district manager for large hair salon chains. Her largest territory was five states covering over 238 stylists. She is now working at Paralee Boyd because she doesn’t have to travel with two little kids, and she’s putting together a hiring drive so that we can get the staff, get them trained, and be ready to open our doors.

Paul Downs:
I was under the impression that the 600 bucks a week was over, but I haven’t been following it because none of my people are on unemployment.

Loren Feldman:
It is over. It is over.

Dana White:
But it’s not completely over. It’s reduced.

Loren Feldman:
The 600 bucks ended. The president had another initiative, which I don’t think applied to everywhere, but I think it resulted in an extra $300 in many areas.

Dana White:
And Michigan is one of those areas, so in addition to the Michigan state unemployment, they’re getting another $300 a week from the federal government.

Loren Feldman:
Is it a problem, do you think, that you’ll be closed at the time you’re a finalist for this award? Are you missing an opportunity with that?

Dana White:
We are. Ideally, it would be best if we were open, but open with limited staff would turn people away if the service isn’t up to par. If we have one stylist or two or three stylists, and they can only work two days a week because they’re part-time, it doesn’t make sense. My operations manager and I sat down and said, “Okay, what are you willing to do?” And I’d rather you wait a week. I’m not willing to compromise the brand.

Loren Feldman:
What are you going to do differently? Given the problems you’ve had staffing, how are you going to change things so that you find people who are willing to show up?

Dana White:
What led us to this point is that leadership at my business checked out after COVID because they had a lot of things going on in their personal life. That took a front seat, Paralee Boyd took a backseat, and that was not necessarily communicated to me. What was communicated to me was, “Everything’s fine. Everything is gonna be okay.” But no, everything wasn’t fine. I did not have the professional in place, and when we spoke about this on the podcast [episode] before, you guys said to me, “You get what you pay for.” And no truer words were spoken.

What’s going to be different now is that I have brought in an experienced leader of stylists and salons. I’ve brought in someone who is a recruiter, and in that interview process—and I had somebody else with me during that interview process to kind of make sure that I was vetting the right person because this hire was so critical—she just nailed it like Simone Biles with every question. It wasn’t just what I wanted to hear. She actually had experience, examples, and she was able to answer the “how” of how she gets this done. Recruiting for her is a big thing, so right now I just need to give her the time and the space to recruit.

Paul Downs:
I do have a question about this new hire. The basic question with anybody who is good is: Why are they looking for a job? And you said it was because she doesn’t want to travel anymore.

Dana White:
Yeah, she was traveling 21 out of 30 days a month. She has two eight-year-old daughters, aAnd she was starting to see the effects of her traveling on her kids. Her and her partner sat down and said, “Okay, what are we going to do?” And she chose to come off the road.

Paul Downs:
That’s a story that makes sense. There’s a limited number of stories that make sense to me, and dealing with family responsibilities is one of them.

Dana White:
I can tell you the candid reason, what she gave when we asked her. I asked her, “Why Paralee?” I’m looking at her resume. We’re one salon now, we’ll go to two. She did give us what she had seen and what she believes this company can do. But she said, on a personal level, she goes, “I am the mother of two Black girls. I am white, my daughters are Black. They’re eight years old, and they’re starting to believe what the world is telling them, and I’m not there to counter it. I need to be home to counter it.” And she teared up. And she looked at me, and I said, “Okay, I get it.” She’s like, “I need to be home for my girls. They’re starting to believe what the world’s telling them.” And I said, “Okay.” So that’s the real reason.

Paul Downs:
That’s a good reason.

Dana White:
She teared up a little bit and she looked away, but she trusted me with it. And even though that was emotional, I refocused on her experience. Again, a lot of the interview candidates gave me cursory [answers], but she was one of the few who was able to go in the weeds and say how she can do it and give examples of how she’s done it before and how it’s turned a business around and then give references that I could call that can validate what she told me.

Karen Clark Cole:
And hopefully part of her reason is she wants to show her daughters that she’s working for a Black woman.

Dana White:
That’s it too. She said, “I want my daughters to see I work for you.” I said, “Okay.” I didn’t know how I felt about that, though. At first I was like, “Okay,” but you know, she explained it to me. She’s very, very communicative, which I love. So we’re going to turn this around.

Paul Downs:
That sounds great. I think there’s one thing to watch out for when people come from a bigger company, is that they tend to have a list of things that were done for them, because they’re from a bigger company. They could call HR [for] somebody to fix the printer. And you have to be very cognizant that you don’t have that same set of things available and just make sure that you’re clear that, “Okay, if the printer needs to be fixed, you may need to be the one to do it,” or, “I’m the one to call.” But just make sure that she understands she’s in a different world. Set up the roadmap for how to solve those kinds of problems that she’s not used to dealing with.

Dana White:
And that was a question I asked her during the interview. I asked her, “This is a much smaller company than Great Clips. Are you a solutions-based manager? Meaning when marketing needs to go out, marketing is Dana. When you have a filter that needs to be changed, it’s not, ‘Call the maintenance company or this company,’ it’s, ‘Call the landlord.’ Are you able to operate without a network of resources behind you—and leaning on me, and us leaning on each other—and you being solutions-based in order to get some of the smaller to-do items done?” And she talked to me about, when she worked at a small salon, how she did it.

Paul Downs:
That’s great.

Loren Feldman:
Paul, I suspect most people who answer that question know the right answer to give. Have you learned anything about how to figure out whether somebody is sincere in the answer?

Paul Downs:
No.

Loren Feldman:
Fair enough.

Paul Downs:
I tend to not hire from big companies, although I have on occasion. It’s a red flag I’ve more heard about from other business owners, and in particular, my Vistage leader says it’s a huge one if you’re hiring leadership. If someone comes out of a large corporation, they’re just used to a whole different world than in a small company.

In my own company, the problems we run into tend to be of the fix-the-printer or change-the-filter type. And fortunately, woodworkers are really wired to just handle stuff like that. But what my employees are weak at is thinking about systems as a solution to problems. And it’s very easy in a small company to just solve problems with fixes as opposed to systems. If you have the resources to take the next step up beyond a problem fix, and then think about, “How do we implement a system so that this never happens again?” But that requires a lot of communication.

Loren Feldman:
I want to switch directions a little bit here. I want to get to a slightly different topic. As you might imagine, I’ve been giving a lot of thought lately to where entrepreneurs and business owners get their information, what they read, where they go for answers when they have questions. I want to ask you guys about your reading habits and where you go when you have a question. I want to draw one important distinction, which is, there’s news you need to know just to be an informed citizen and know what’s going on in the world. And then there’s information that actually helps you run the business. Both are important, and I’m curious where you get both, but I’m especially interested in where you get information that helps you run your business. Karen, can I start with you?

Karen Clark Cole:
I look at it as it’s my job to identify problems in the various conversations that I have all week long, and the different meetings that I’m in. I’m always looking for ways to improve, or things that aren’t quite working right that a lot of people can’t see, because they’re in the weeds. And so I have the advantage of having a higher view, just sort of floating above it all. I can see where something that we’ve been doing for a while, it’s just not efficient anymore. It’s not the right way to do it anymore. There’s got to be a better way. I don’t know what the answer is necessarily, but I see it as my job to identify the problem.

Then what I’ll do is start talking to individuals, then I may have a conversation with a group of people who I think are the right group of people and start talking about the problem and see what kind of solutions they come up with and start doing the research in that way. I try to avoid having my own solution until I’ve heard lots and lots of input.

Loren Feldman:
I think what I’m hearing from you, Karen, is that you don’t really have a lot of confidence that you would find help for problems that you have running your business in the media at large. There aren’t websites or publications that you would go to for that kind of help.

Karen Clark Cole:
I never have because, you know, somebody else’s advice is best passed on to somebody else, because it’s never of use to yourself—there’s a quote, something like that—because my business is unique, so how could I possibly get that out of a book? There are some big concepts that I use from other places. That’s when I’m trying to solve a specific problem. The answer to that problem is always within our own company, because every company is unique. And so how could anyone else who’s not on the inside possibly tell me how to do it? It’s impossible.

And so where I go to broaden my thinking is the Harvard Business Review. That’s my Bible, and I probably have three publications in my bag at a time, and I’ll just pick it up in the middle and read whatever I open it up to. And it’s always like, “Wow, I never thought about that.” It’s so well written, and it’s so relevant.

Loren Feldman:
Paul, how about you? Is there a place you go to for inspiration or help with running a business?

Paul Downs:
Just the Morning Report, Loren, I don’t read anything else. That’s it.

Loren Feldman:
Your check is in the mail, Paul.

Paul Downs:
Okay. I tend to not look for business books. I just have not had a great experience with—

Loren Feldman:
You wrote one, Paul.

Paul Downs:
I did, because I didn’t like all the other ones. I tend to look for solutions from other business owners, particularly in my business group. I keep an eye open for the general trends just through reading the news. Maybe this has been a huge mistake, but I just don’t read a ton of business books. I think I’ve glanced at the HBR, but it always felt like it was for companies that were just way larger and had more resources than mine.

When I was writing for The Times, I was concentrating on a set of issues that, it seemed by the response to the readers, there is a sweet spot where there’s things that need to be talked about that don’t get aired in the ordinary media. I do agree that it’s tough to look at the problems within your own walls as a business owner and then look around and see that everything out there is too general and doesn’t really address the specifics of my business. But I do think there’s also a set of problems that all businesses share, so that if it was an accounting or bookkeeping issue, it’s not really all that unique to Paul Downs Cabinetmakers. And often, issues of how to deal with different types of employee situations are not all that unique. You may think they’re unique, but as soon as you start asking around, you realize a lot of people share the same issues.

Loren Feldman:
Have you found a place that sheds a light on those issues? I think you might have mentioned on this podcast that you use Reddit.

Paul Downs:
I do use Reddit, but the business parts of Reddit don’t really pertain. We’re a little too big to be in the tiny, scrambling world, but we’re a little too small to be in the Harvard Business Review world. I found the most information from my business group. Now, we do get speakers who have written books, and so we get kind of a digested version of whatever schtick they’re selling, and that’s useful. But Reddit is interesting mostly because it’s such a window into a wider range of people than you would get in ordinary media. It’s a real rabbit hole, though, and can be addictive. I would be careful if you’ve never looked at it to not get caught up in it.

Loren Feldman:
Are you talking about beyond business issues?

Paul Downs:
Yeah, they have various forums, and it’s all over the world. It’s everybody, and that’s always eye-opening.

Loren Feldman:
I find it intimidating. I don’t even know how to get started on it.

Paul Downs:
Well, then just don’t. But the main feature of the business press, or any press, is to figure out what the middle of the road is, and stay there. There’s always a lot left out, and so Reddit is a way to explore every kind of sub-genre of human experience you can imagine. And you just realize, it’s a big world out there. It’s a forum where people can explain their own situation, and people who can do it well, their writing goes to the top, and you get a chance to see it.

I found it to be very useful for just getting a sense of the range of people who work for me. You know, what is it like to grow up in a very, very different background than the one I grew up in? Or what is it like to live in a very different situation than the one I’m in now? Because I grew up relatively privileged, and I still live relatively privileged, but the people who work for me are from a much wider range of places. I just like to hear more about what it’s like to be them, so I can better build a culture using a wide range of people.

Loren Feldman:
And you find it’s easier to learn, to get those answers on Reddit, than talking to the people who actually work with you?

Paul Downs:
In some cases, yes. Because Reddit will explore subjects that I would not bring up to an employee. There’s certain things, you really just can’t put your arm around somebody’s shoulder and say, “Hey, tell me about your personal life and this issue or that aspect.” You just just can’t do that. But you wonder, and I don’t think that it’s a guarantee that reading something on Reddit gives you insight into any particular person, but it does give you a sense of the wider human experience in the same way that much of what I read is just fiction, because I like reading stories about people who are different than me. I think that there’s something to be said for hearing people talk about what they’ve gone through. That gives me a better sense of empathy when I’m trying to deal with the people in my world.

Loren Feldman:
Dana, is there a place that you go for information about running a business?

Dana White:
I do. During COVID, I think the city of Detroit did a really good job of posting up-to-the minute policy changes, up-to-the minute grant and loan applications, PPP information, TPE information. I go to this Facebook group for Detroit small business owners. I also go to my Goldman Sachs network through their app and their Facebook group. The Facebook group for local Detroit isn’t very active. But the larger app that covers everybody is very active, so I go there.

Loren Feldman:
Do you go there to ask questions, or to read what other people have posted or how do you use it?

Dana White:
Both. Especially people who’ve experienced similar things that I have. I go there to ask questions, and then I’ll search while I’m waiting for an answer. I’ll search through previous news feeds and see if anybody’s ever brought it up. I also Google. I Google how to—or not too much how to, but just to check the law, make sure I’m doing it right. The State of Michigan has the cosmetology board standards. I’ll check with them. I’ll read what they have.

There’s a couple books that I like to read and reread, to kind of get an idea of my compass, where to go or how I’m doing or whatever. My main source of information is talking to people. Just having conversations with people who’ve been there, other perspectives from people who haven’t been there. Pretty much just talking to people.

Loren Feldman:
Like on this podcast, for instance.

Dana White:
Yep, the people on this podcast have been great. People I’ve met. I’ll be speaking on a panel somewhere, virtually, and people will reach out to me via LinkedIn, and that will start conversations, especially if they’re in the marketing arena. But pretty much Facebook has been good for local stuff, and my network has been good for looking out, and Forbes has been good for kind of understanding the landscape around business and small business.

Loren Feldman:
Can any of you give me an example: Is there something that has stuck with you? “Here’s an insight I got from somewhere that really made a difference for me in my business.”

Paul Downs:
Well, yeah. The comments I got when I was writing for The Times were game-changing. In terms of an external article, I’m having a hard time thinking of one. But I do remember someone suggesting that I have more meetings with my people, because for the first 26 or 27 years of my boss life, I rarely had a meeting of any kind. And I remember thinking, when I first started using PowerPoints, like, “Oh, I got through 30 years without ever having to do a PowerPoint, how good for me.” And now, I don’t necessarily love PowerPoint, but the concept of going that long without ever regularly sitting down with your people was just such a huge mistake, and I couldn’t see it until someone just said, “You should do this.”

Now, having that venue was not something that’s available to most people. I just like interactive venues. Talking to people is great. Googling isn’t bad, but anything that allows you to ask a question, listen to an answer, follow up, actually have a conversation in one way or another—that could be written or it could be face-to-face—I think those are the best ways to get information.

Karen Clark Cole:
I’ve got one for you, Loren. It’s actually Jim Collins, our age-old business friend. I think about it all the time and I say it all the time, which is the idea of firing bullets, and then shooting your cannon. The concept is, prototype everything. You calibrate, calibrate, calibrate on an idea, and you get feedback, and you refine it, and you get feedback. And you try this, and you try that. This is in response to solving a problem. With your solutions, you think of them as bullets. So you try it on a small scale, try it with a few people, try it with a few more, try with a few customers. And then when you get some feedback, and you refine it, and you get it to a point where you’re really happy with it, then once you’ve got it to the point where it’s working, then you release it to the whole company, you release it to all of your customers, or that’s when you fire your cannon. You put all of your resources behind it, and you really believe it’s gonna work. Then you just go with it.

Loren Feldman:
Did you learn that lesson the hard way? Was there a time when you fired the cannon first?

Karen Clark Cole:
Oh, yeah. All the time. I mean, big cannons everywhere. It’s just the idea, for us, of rolling a kind of new concept out that I’ve worked on with a group of people to a small group of people or a few individuals first, and then it’s working with them, you gather feedback, refine it a little bit, and then you roll it out to a bigger group and a bigger group. And then we make the big company announcement. Everyone’s like, “Well, aren’t we already doing that?” And the answer is, “Yes, you are.” And that’s the beautiful thing, because along the way, you’ve also been doing some change management. People are on board, because they’ve been able to participate. They’ve been able to give feedback. They feel like it’s partly their idea, which is what you want, if you really want this thing to be successful. Same with customers.

Loren Feldman:
All right, well, appropriately enough, I have a Morning Report News Quiz for the three of you, which will test whether you’re actually reading the Morning Report, in part, but also whether you’re paying attention to business news. So if you’re all ready, the first question is: We all know that if you play by the rules, it’s easy to get your PPP loan forgiven. But as we noted this week in the Morning Report, there’s a catch. Do any of you know what the catch is?

Paul Downs:
The expenses you spent may not be tax deductible.

Loren Feldman:
That’s correct, Paul. If the loan is forgiven—as the rules currently are written—you cannot deduct the expense. Now, there’s some speculation that may change, and it’s one reason why some people are saying you should not apply yet for forgiveness. But it means that if you can’t deduct the expense, your income is going to be greater than you expected. Some businesses are going to have a surprise tax bill as a result of that.

Question number two: As we recently noted in the Morning Report, an Oregon based company called Wild—W-Y-L-D—is on track to do $65 million in revenue this year and expects to double that next year by selling a high-end candy made of fruit and something else. Anybody know what that something else is?

Paul Downs:
Cocaine?

Karen Clark Cole:
Cannabis.

Loren Feldman:
Yes, cannabis! Wyld’s director of sales said that the shutdowns earlier this year resulted in real hysteria. People were buying edibles like they were buying toilet paper. I’m curious, when you read something or hear something like that—a business that just explodes in that particular area —what does it make you think?

Paul Downs:
Good for them.

Karen Clark Cole:
Yeah.

Dana White:
Yeah, good for them, but you also wonder, “Well, let me see the business,” and you see, “Oh, it’s cannabis. Well, that’s different. Cannabis is going to sell.” It’s why, yeah, I’m not surprised.

Paul Downs:
I guess the other reaction I have is, look for two years from now some articles about how brilliant the CEO was—no matter what cockamamie theory this person espouses. My observation is, if you stumble on the fountain of cash, it doesn’t matter what you do, you look smart, because the business will grow. And then people put way too much weight on whatever set of procedures led to them not just being destroyed by it and we get the overweighting of the wisdom of the founder.

Loren Feldman:
Question number three: in Silicon Valley, a big debate was recently ignited by the CEO of a company called Coinbase, who wrote a blog post that took a stand for being apolitical, for focusing on profits and not on politics or social activism. He even offered severance packages to employees who decided to leave because of this new policy. My question is, when this started, Coinbase had roughly 1,200 employees. How many chose to take that severance package and leave?

No guesses?

Paul Downs:
Less than 100?

Karen Clark Cole:
Twelve.

Dana White:
I’d say about 100.

Loren Feldman:
You guessed a little high: 60, or 5 percent. My follow-up bonus question is: Can any of you explain what Coinbase does?

Paul Downs:
It’s got something to do with Bitcoin.

Loren Feldman:
It’s a digital currency exchange, and I’m not gonna go any further than that.

Paul Downs:
Yeah, good for them. Speaking of fountain of cash…

Loren Feldman:
Well, maybe.

Paul Downs:
Some guy whose theory may not make any sense, but gets a lot of publicity. There you go. There’s an example.

Loren Feldman:
All right, last question. Netflix recently announced a new policy: it will automatically cancel the subscription of any customer who does something in particular. What is that something?

Paul Downs:
Doesn’t use the service.

Loren Feldman:
That’s right. Any subscriber who fails to watch anything for a year, if you’re not using the service, they don’t want your money. Does that surprise any of you?

Dana White:
That’s good for them.

Karen Clark Cole:
Awesome.

Paul Downs:
That’s great.

Loren Feldman:
Why is it great?

Karen Clark Cole:
It’s being responsible.

Dana White:
Yeah, they don’t want to take your money if you’re not using the service.

Paul Downs:
It probably won’t cost them much, and the value of the PR they got from making that move is pretty high.

Loren Feldman:
And we just contributed.

Paul Downs:
Yup.

Loren Feldman:
Guys, thank you very much.

Dana White:
Loren, I just got an email saying that the voting for People’s Choice starts October 20th, and it ends October 25th at Detroitdemoday.com, and that they can vote one time per device. I just read that: one time per device. So iPhone, iPad and MacBook.

Loren Feldman:
You said the 20th, that’s Tuesday, right? So when people hear this podcast, they will be able to vote—from all of their devices.

Paul Downs:
What’s the mail-in option?

Dana White:
There probably isn’t one.

Loren Feldman:
It’s too susceptible to fraud, Paul.

Paul Downs:
Yeah, that’s right. Well, I happen to own 142,000 devices, so I’ll be busy.

Dana White:
All right. That’s great.

Loren Feldman:
Karen Clark Cole, Paul Downs, and Dana White, once again, thank you very much.