RHS 186 - James Webb on Relationships and Resilience

In a crude laboratory in the basement of his home.

Hello everyone! Hello, everyone, and welcome back to the show. Today, we have a tremendous episode for you, a conversation with James Webb, the author of Redneck Resilience, a tremendous book.
James has a storied career from being in the radiological industry to running hospitals to owning one of the largest Orange Theory franchises in the entire country. And what I loved about James's story is his resilience, is where he came from to where he got to, and all the trials and tribulations in between that he explains to us.
Because as we know, working through this pain, experiencing this pain, and being able to not only push through it, to not give into it, but to thrive in moments that are challenging, in moments that we don't see coming. It's a story that I feel like we all need to hear.
I was inspired by the story. It was tremendous to meet and talk to James and I think you're absolutely going to love this episode.
Before we get there, I want to talk real quickly about Finding Peak. Guys, more than 10,000 of you listen to this podcast every month, and we have just about 2,000 people subscribed to Finding Peak.
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And for all my insurance friends who listen to this podcast, which is most of you, but more and more people are listening to this podcast who are not in the insurance industry, so I feel like I need to say that. If you are in the insurance industry and you want to maximize the income that you are getting from your agency, check out SIA.
I know that to different people, networks, aggregators, however you classify an organization like SIA may scare you or you may have a negative perception or you may just not know what SIA is altogether. But SIA is a tremendous organization.
Matt Masiello and the entire team and what they're doing is changing the game on what it means to be part of a network, the value you get from a network, and it is a pleasure to be associated and to be part of the executive leadership team of that organization. So I ask that you check them out only because I have said such a positive experience.
Honestly, I don't care if you go to SIA or not. It's independent insurance industry and the beauty of our industry is you get to choose your own adventure.
All I want to do is put in front of you the idea that I have had a tremendous experience and you may too. And so you know, they do not pay me or even ask me to do this.
And frankly, they have no way of making me say this. I say this because I've had a positive experience.
I enjoy being part of the organization. I enjoy the benefits, the thoughts, the ideas that they're trying to put out, the resources, and ultimately the carrier contracts that they're able to deliver to members.
And if that's something you want, I encourage you to check it out.

So with that, guys, thank you for listening to this show as always.

I absolutely love you.

Let's get on to James Webb. I'm going to shop booze.

I was very intrigued when your team reached out because particularly about some of the ideas around, you know, granting high performers equity and how you how you do some of that stuff. because in the industry that this podcast is primarily focused on,

the independent insurance industry, we have anywhere between 10, 10 and 15,000 people listen to the show. And all throughout the independent channels, you're thinking people in the carriers like Travelers, Hartford, Liberty, all those, all the way down to brand new single person, independent insurance agencies on the corner of, you know, everywhere America.
And a conversation that happens quite often and has been going on since I got in the industry 17 years ago has been compensating high performers. It is a, it is a, and I know we're not, we are, it's not, that's not relegated just to the independent insurance industry, but it is a major topic.
A lot of really difficult conversations because, you know, kind of there's an old school methodology. Hey, you get a, you get a commission check from me.
That's, that's my, you know, that's, that's my value to you. And that's what you get.
And you should be happy with that. And you have renewal commissions and those are essentially, you know, that's essentially equity and et cetera.
And there's, there's all these wild, but what, what's happened recently. And, and I want you to get into your story and stuff.
I'm just kind of prefacing what, you know, everything, why I was so excited about this and why I'm so interested is that they're just, there is not, and there, if you were to do research, there's best practices, but I don't, I don't think that those best practices are filed widespread. I think there is really no good, consistent, agreed-upon solution in our industry for how to compensate, how to handle, how to give longevity and in a sense of ownership, if not real ownership, to high performers who don't, say, have the same last name as the owner of the agency.
So so that's why I was so excited. But before we get there, let's let's get into your let's get into your story, man.
I mean, I'm excited to chat with you and and do all the things. I'll share one fact with you about your previous comment.
That's one of the highlights. And one of the things I'm most proud of is I had 14 key employees in my life work for me.
13 wrote it out to the end. The one that didn't wrote it out wrote it out long enough that she got her buyouts.
I bought her out. Of the 13, seven became millionaires and four of those became multimillionaires.
And these are people that just took a paycheck with me when they started when they were young, most of them out of college. And stuck with me the longest, close to 20 years.
Yeah. That's amazing.
It's a good little strategy I have. Yeah.
We can tell the James Webb story. It's kind of cute and kind of fun and kind of interesting yeah let's do it takes a few minutes so James Webb country boy from South Mississippi born to two teenage parents uh they were 17 years old and got a little too friendly in the front seat of a forward or as my 80 year old mother reminded me that the day it was the backseat which I thought was funny um grew up fairly poor dad was electrical apprentice

straight out of high school we lived in a little shack behind the electrical shop the owner let us

rent i recognized real early in life that if i wanted anything extra besides uh peanut butter and jelly i had to do it myself so i started working at five and building potholders and selling them at the local bazaar church bazaars that led to uh bicycles which led to paper routes which led to lawnmowers and rakes and when I was 14 I bought my first car and yes in Mississippi you could pull that off and not get in too much trouble and then I got involved in the printing industry and worked full-time through high school. By the time I was a senior, senior pressman for the company, I thought that might be what I would do and then I enrolled in the local junior college on a music scholarship of all things because at some point I could sing before other things corrupted my voice.
Walking through the school one day, saw a sign that said I want to be an x-ray tech call this number and I thought what that could become an x-ray tech and so did a two-year slave labor program was an x-ray tech uh one of the local colleges gave you credits for x-ray tech hours so I actually went back to college at night or in the daytime worked at night

and got my bachelor's degree and the day after I got my bachelor's degree they named me president of the x-ray tech school I'd graduated from 18 months earlier so I'm 21 years old got 15 students six are my age three I went to high school with. So quite a management learning lesson.

Did that for a few years, really enjoyed teaching, but wanted more.

So I flipped a coin, literally flipped a coin and said Dallas or Atlanta.

And as I say, packed up a pick-em-up truck and a bass boat and went to the Redbird Mall

parking lot in Dallas, Texas.

Slept in the parking lot trying to figure out what the hell I'd just done. Got involved in the hospital up in Louisville, Texas.
Three months after I was there, they promoted me to director of radiology. So I was the youngest director of radiology in the United States at 24 years of age.
Had about 50 employees. Went to night school.
This was way before the internet. Got my master's degree.
Thought I was going to be a hospital administrator. Then this thing called MRI came out and changed my life.
And I left the clinical side of medicine and went into the MRI business. And was one of the first people in that industry.
Learned a very valuable lesson, worked my butt off, built the second largest mobile company. And sitting in my big office in Dallas, Texas at 30 years of age, 300 employees thinking I'm hot.

You know what? And the phone rings and they go, Mr. Webb, we just sold the company.

Therefore, since you have no equity, you are fired.

And I learned a really valuable lesson about being my own boss and sort of starting my entrepreneur journey.

And it took a little while to get there. But eventually in 1995, I started my first company internationally, went Trinidad-Tobago, started and traveled all over Latin America and the Caribbean.
Got crazy stories we can talk about or not talk about. Probably the only guy you know that's been held at gunpoint by the Sandinistas.
Probably the only guy you know that was kidnapped by the Guatemala rebels and released. So just a lot of fun stories.
Sold that company in 2000. I was living in Boca Raton, Florida.
Moved back to Dallas, Texas to start another company with some buddies of mine. 2003, I was dead broke.
Couldn't pay my house note, started all over, and made a couple of business decisions people said wouldn't work, and they did. And so the next month, there was $9,000 there to distribute to my partners, and the next month, there was $10,000 to distribute to the partners.
And as we kept growing, we got to a point around 2010 that if I wasn't personally pulling in $600,000 to $700,000 to $800,000 a month in distributions, I'd kind of want to know why. And we branched out into other areas outside of radiology.
So we were building medical imaging centers then. Then we went into surgery centers and then we went into toxicology labs.

Exited the medical imaging company in 2017.

Public knowledge for right at $100 million, so a nice payday.

Exited all the surgery centers one at a time because we sold them to healthcare systems in the various markets.

Exited toxicology. About that time, got involved in Orange Theory Fitness,

which I had no idea what that was and just accidentally stumbled upon it in 2014.

And we ended up building 33 gyms across North Texas, became their largest franchisee.

And we sold that in December of 2019, about two months before COVID hit for almost as much as imaging center company. So it was, it was a nice couple of paydays.
I still have four or five companies now I work with, and it's a little different now. You're not worried about whether Ryan punches a clock.
You're more worried about the bigger picture stuff. So that's sort of my business story.
And I can't stop being an entrepreneur. Really love it.
Really love it. Bob and my employees in the business.
And, you know, I have a crazier personal story, but that's a different conversation. So I'm interested in the, so obviously when you were a kid, you had a very entrepreneurial spirit.
You described that all the different jobs you had and you know, selling at the, I think you said the church bazaar. And then, you know, you go and you become an x-ray tech, which is not an, I'm assuming, you know, not an entrepreneurial endeavor.
And then, you know, you have this period of time, sounds like close to a decade between, you know, when you become an x-ray tech to where you're sitting at 30, company gets sold and you're fired. Talk to me a little bit about that time.
Were you constantly chomping at the bit? Were you trying to be an entrepreneur? Were you finding other things that were entrepreneurial oriented outside of your nine to five while you were kind of like in the punch the clock phase? I hear that a lot from people who seemingly have entrepreneurial traits. They all seem to go through this, we'll call it bureaucratic winter, right? Where there's a period of time in their lives where they aren't an entrepreneur.
And what you see is, I think the people who truly are entrepreneurs, they tend to, there's cracks, right? They find little ways of getting involved or they become big time entrepreneurs or whatever. Were you finding that in your life? And were you kind of always aware of that underlying sense that you wanted to get back and do your own thing? Or were you content for that period of time while you were not an entrepreneur? I don't, I don't know if content is the word, but I definitely didn't have that entrepreneurial thought process.
I'm working eight to five, punching the clock. and again this this is pre-internet.
So I'm going to night school at North Texas to get my master's degree because I thought I was going to be a hospital administrator. I was trying to go up the corporate chain.
And I thought I was going to be a hospital administrator. And it wasn't until Barry O'Brien knocked on my door and said, hey, we're starting this mobile MRI company.
You want to join us? And I went, heck no, man, I'm going to be a hospital administrator and make a hundred and $50,000 a year. And he convinced me in a, in a funny little side story doing 130 miles an hour and his Dodson 240 ZX in Connecticut that to leave the hospital space and, you know, jump out here and work for him.

So you really got it tuned to the business side of it.

So I worked with hospitals and I worked, you know, we were building mobile routes. So we get, you know, 10 hospitals together, run a mobile between them.

Got to learn a lot about the sales side and all that.

But no, I really didn't have that entrepreneurial spirit.

It was just climbing the corporate ladder.

Yeah, yeah, yeah. And then you get fired where you, was your next thought time to start my own business? Did you go through a period where you were feeling down? You know, what, what did that look like? You know, I, um, so I own my own or, uh, or I founded Rogue Risk, uh, a national independent commercial insurance agency, which is I'm the CEO of today.
I founded it in March 9th of 2020. So seven days before the zombie apocalypse at upstate New York.
And in two years, was able to build it to the point where I was acquired in full. So I basically traded equity in my company for equity in the parent company owned by a PE company and became an executive director in that company as well.
But to get to that point, that entrepreneurial point, I was fired from the previous three executive positions that I had had. I was a CMO, a CMO, and then a CEO of three

consecutive companies and was fired from all three positions. And it was like, I kept, even though I

felt like something was wrong, and I guess this is where I'm trying to get to and just to get your

experience on it. I felt like something was wrong, but I kept going back to that corporate job.
I

kept going, well, you know,

this is 200,000 and, you know, this is $200,000 a year with a bonus. That's not bad.
You know,

let me try this again. And then I would just keep butting heads.
And it wasn't until I went

off and became my own boss that I realized kind of, this is much more of who I am. So I'm interested

in how that worked for you. And, you know, there were obviously dips, dips in between.
Now, the

third time I was fired, the dip wasn't exaggerated. The first time it was like, oh my God, I'm a loser.
You know, I'm never going to have another good job again. I worked so hard to get, you know, and then I got another job and then I got fired for the next one.
You're like, oh, I'm sure I can find a job. And then the last time I was fired, I was like, fuck it.
I'm just going to, I'm just going to start my own company. Like it didn't even really phase me as much.
It's interesting how that works. Yeah.
Yeah. Mine was a little bit different.
Mine had a little personal impact on it. I had a young daughter, uh, had been separated from my wife.
We literally got back together the day before I got fired. So it was, it was really hectic and I had bills to pay and had to have a paycheck.
And since I was a little bit known in the industry, I was fired one day, had a job the next day, but in Atlanta.

So I had to move to Atlanta, Atlanta, the city is wonderful,

but the lifestyle I had there was not very good. So that, you know,

that's 1991, 92, I would call those are the tough years.

I literally got a chance to move to Florida to take over this company. And it's in my book, I'll tell you.
But anyway, that's the only time I ever told a boss to F off. He tried to keep me hired because he said, he said, I'll fire your boss if you'll stay.
And I said, no, I'm going to go down to Florida and fix this company. And so I went through a divorce, had to worry about my daughter, had to have a job, had to have a paycheck, moving to Florida, sleeping in hotels, sleeping in rental places, finally got my first apartment about six months later.
and so it was a very tumultuous time for me, but it was about a paycheck at that point. I really had to worry about the paycheck.
Do you think, and in fairness to my own story as well, very similar, I also had two, I had two young boys at the time as I was bouncing through and felt like it wasn't, it wasn't until that third time that I was fired. I just felt like I was fighting the universe.
You know what I mean? Like it wasn't even that I really wanted to all the pressure and to go back to zero. I just, you know, I was also sick of it not working.
Do you think, do you believe that those hardships are necessary? Like those, those moments where you are, you're on a couch or you're in a motel or, you know, I, you know, unfortunately was recently divorced from my wife. I'm living in a hotel for three months and you're miserable and you feel like, you know, I'm not being, you're not a good father, you know, all these things, you're having all these emotions.
Do you feel like those times are necessary to navigate to success in business? Or do you, you know, cause I think there's a lot of people in the insurance industry, a lot of individuals who I know struggle with the fact that especially second generation leaders who were born into families that had agencies that were successful. They lived with success, whether it was their father, uncle, aunt, mother, whoever, they lived in success and were brought up in success and then went to college and walk out of college and walk right into a successful business that is, you know, at least steady, if not growing.
And, you know, and I think, you know, a lot of these people come to me and or I or I, you know, they ask me questions about different things. And I can tell.
They never really got punched in the mouth before. You know, they never really had that moment where they had to pick themselves up off the ground and they're struggling with direction.
Do you think you have to feel that? Like you almost need to have those types of experiences or, you know, where do you fall on that? Because the story is so similar. You hear so many of these.
Everyone's is different, but the same. They had these moments that were just terrible, and they had no idea what they were, how to get through, and they did.
Do you think that's a mandatory part of kind of reaching the elite levels of success that you have? I don't know if it's a mandatory part, but I will tell you this. I look back on it, and I'm glad.
I'm glad I had those lessons. I'm glad that I had that chance.
Yes, I would have loved to be more second and third generation. Well, that might have been cool.
I don't know what kind of person I would have turned out to be. I've met so many nice people that are second, third generational wealth.
And I've also met some real, you know, pecker heads that are third generation. Well, what I have found is that most of the guys that go through what you and I went through tend to be the nicer people on the planet, tend to give back more.
And that's a big thing for me is giving back more. So did I like the hard lessons? Heck no.
Am I kind of glad now that I'm 63 years old, looking back it you know when I'm sitting in the couch in

Rockwall Georgia crying on the couch because I'm getting a divorce and I'm worried about my daughter yeah I think about that and it helped shape me and helped me make me and I think more than anything it gave me that resilience that determination to just drive forward harder but um yeah I mean It's a mixed answer, but I'm glad I had them.

Why do you think it is that some people have these moments, these hard moments, and maybe not perfectly, certainly not perfectly, but they bear down, they push through them, they get better, they continue to find their ambition. They continue to find, I don't want to say motivation because we know that's bullshit, right? They continue to, to, to maintain a discipline of some sort that keeps them moving forward in a positive direction while others just wallow.
They just, they kind of sit in it. They never get out of it.
It becomes quicksand to them. And then they wake up six months, a year, five years later, and haven't taken a single step forward.

Is it family?

Is it built in?

Is it who you surround yourself with?

Why is it that some people push forward through dark times and others kind of sit in it?

So I'm a huge, huge, huge fan of relationships. I think relationships will define your life.
And for me, it was developing relationships during these hard times. Mentors, people that help me see, help me guide.
One of the reasons I love being a mentor now and spend a lot of time doing that is helping people get out of that thing. I also think there's part of it's just a personality nature.
There's just some people aren't meant to be an entrepreneur. That might sound terrible and I apologize if it does, but there's just people out there that need a career.
They need the nine to five job. Nothing wrong with that.
I'm happy for them. I'm happy they're making their $75,000 a year salary and paying for their house note.
But that was never for me. Mine was about, I'll tell you another quick side story.
It's Second Avenue Baptist Church. I'm 17 years old, graduating from high school.
And they go around the room. And if I hadn't personally heard this on a cassette recording, I wouldn't believe it.
But they come to me and they go, James, what are you going to do after high school? And in a very tiny voice, I said, I'm going to change the destiny of a family. And I said that at 17 years of age.
And again, if my mom didn't have the cassette tape, I wouldn't believe it. But yeah, that's amazing.

I think for me, it was always about. I want more, not just for me, I want more for my children, for my family, for my aunts, for my uncles.
The amount of people I'm able to help now is crazy. Yeah.
The amount of family that we're able to help now is just just something I always dreamed of. So I am not going to be able to reference who the person is.
For some reason, I want to say it's Simon Sinek, but it doesn't matter because I have no idea, to be honest with you. But I was listening to a podcast interview about successful individuals.
This person was breaking down X number of successful individuals they had talked to or whatever. And one of the topics that they brought up that I had never really considered before that I thought was incredibly insightful, a defining characteristic or a through line characteristic of the individuals that this person had talked to was this concept of thinking generationally.
They think they're not building, no matter how successful they are, no matter how much personal income they take in, their day-to-day thought is not about their own success. It's about the success of their bloodline, their children, their children's children.

They're what you just said, changing the destiny of a family. My father used to say to me all the time, once you have children, your only goal is to make your kids better than you.
That's it. So you get to be, you get to be as selfish as you want to be till the day you have kids.
And then you don't get to be selfish. And everything from that point on is about making your kids a better version of you.
And, you know, that kind of mentality, to me, that makes a lot of sense. There's a lot of nonsense in success literature.
But that idea of thinking generationally, one, it gives you a longer timeline. Two, it forces you to prioritize activities and decisions that have a greater impact than just the next, you know, couple thousand bucks you're going to put in your pocket.
And I think there's something to that. I mean, obviously you just said it and I hadn't I hadn't had that thought until you just said it and it kind of triggered that.
But, you know, does that make sense to you? Have you seen that and other people that you surround yourself and the mentors you've had? Yeah, I mean, I think that is one of the most critical factors in my life and in the life of a lot of people I know. I use this fun example.
I have a friend who's successful, got a vasectomy at 18 because he never wanted children. He's got 18 excited cars in his driveway.
He's got his plane in his hangar, and he might have enough money in the bank to pay his grocery bills. So he has zero interest in worrying about all that.
And I am just the complete opposite of that. I mean, I have a company out of Baltimore that I hire that does family governance.
I've spent hundreds of thousands of dollars on my estate, making sure that it's estate tax-free, making sure that my children are protected, making sure my grandchildren are protected. If I drew it out on a board, it would blow you away.
Just how many, you know, 678 trusts are involved in all sorts of crazy stuff. But it was always, always, always my single driving factor.
Did I want to drive a Lamborghini Urus someday? Yes, I did i want to live in mexico someday yes i did but you know my wealth manager now he knows that that i'll make the money his job is to protect it period end of story he protects it for my kids i don't touch anything out there and make my own money now for what i want to do what i want to buy where I want to live and you know we're continuing to do projects we've got a couple more we got one potential grand slam we'll see if it happens and then you then you sort of get to a stage in your life also when you're 63 which is not that old but old enough and then you start beginning to think a little bit more about yourself okay wait a minute I've got 15 years on this planet 20 years on this planet you know and you got balance that with the fact that i got a new granddaughter coming in three weeks so i got to be back in texas but i want to do the round the world trip one day and you know so it's it it gets bound to but wealth allows you to do that and when you think about your family it allows you to do that and so yes you think about your family, it allows you to do that. And so, yes, to answer your question, I 100% believe that majority of successful people think long-term, long-term.
Yeah. What's up, guys? Sorry to take you away from the episode.
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All right, I'm out of here. Let's get back to the episode.
So I'm pivoting to your book and some of the ideas. And, and particularly, I want to spend some time thinking about what I've kind of prefaced our conversation on, which is one of the things that we as an industry, talking about insurance, struggle with the most, which is cultivating our high performers, keeping them happy, keeping them invested, keeping them growing.
I don't know how familiar you are with the property casualty insurance industry, but there's a lot of issues around employees will hit a number and then they'll just stop growing. Whatever their number is, everyone's got a different number.
It could be 100,000. It could be two.
It could be five. It could be a million a year.
They hit a number and they just stop. And there's just no more growth.
They just manage the book and that's what you're going to get. not that having an employee who consistently brings in a million dollars is a bad thing.

That's not a bad thing.

But you can't grow a business that way because they just sit on it.

And so there's all these different compensation models, all these different philosophies.

And as I said, it's a mess.

You know what I mean?

There's not a tried and true methodology that has circulated our space that people kind of sit back on and go, yeah, we take care of our people by using the whatever system, you know what I mean? They just, it just doesn't exist. So, and not that you have to speak to the insurance industry, if you're unfamiliar, but just in general, would love to know because of the success that you've had, how do you start to cultivate that? What is it, where does it begin? You know, does it begin, you know, does it begin at hiring? Does it begin in culture building? You know, where does this begin and then and how do you how do you start to cultivate that? What is it? Where does it begin? You know, does it begin at hiring? Does it begin in culture building? You know, where does this begin? And then, and how do you, how do you start to think about this when you're building a company? Yeah.
So when we started Preferred Imaging in 2000, we had three employees and it was really, you know, starting from the bound up. And initially you focus on growth and culture.
you know, we were, we were a little bit of a party company. We had some fun, probably did things you probably shouldn't do nowadays with the current environment, but we had a lot of fun and happy hours and played poker tournaments and, you know, kept people busy and motivated that away.
But as we got bigger, you know, the financial situation becomes involved in it. Yeah.
We did the commission

structures and then we did the bonus programs. In the case of my sales reps, uh, in one day I took

them from salary to commission only period. Yep.
And I said, okay, here's your base. You get three

months to live off of this base. After that you go $23 a scan, get as many as you can.
And I saw

guys go from $60,000 a year to six figures a year, just working because it was commission only. So I really liked that.
And I just reinitiated that into another company, just literally the last few weeks, bringing them back from salary commission to just commission only. And you give them that little cushion of three months.
Here's your cushion. And I sort back into it you're doing 60 000 you're doing 500 scans you get 30 a scan you make the same amount of money you do another scan you make extra 30 another scan you make an extra 30 so so that was that model but then i started looking at really the bigger picture model and that's that's the one and i'll describe it through an LLC model yep it can be done through an LP and it can be done through an ink too so what I did is I took my LLC and the beautiful thing about an LLC is you can write anything you want in the operating agreement I can tell you you got to wear a hat that says como on on it every day at work, or you don't even have a job.

I can put that in a company agreement.

So I went to the company agreement and I went, okay, class A shareholders.

That's me.

And again, class A, B, C doesn't mean anything.

It could be class red, green, blue, whatever.

Class A is me.

I have all the voting power.

No one else can vote but me.

I control the company. I went to Ryan.
I went, Ryan, you're one of my key people. I'd like you to have 2% ownership in the company.
You will get profits and losses just like me. There'll be no difference.
All you don't need is to vote. And two, there's a five-year vesting period.
So stick around. And as we make'll make money and at that end that five-year period you can come to me and you can say you want to become a class c shareholder which gives you two more years of vesting so now you've got seven years profits losses and then after that seventh year if you leave good terms, I have to buy you out under agreed upon multiple.
And in my deal, I put a three times X, made it a 36 month payment if I wanted to. So I could just pay out distributions for 36 more months.
And what was really amazing about it was it got such a good point with four or five of my employees that they only drew a $30,000 salary to cover their health insurance benefits. The rest of it, I remember my president, one of my companies made $700,000 a year in distributions, but she had a $30,000 salary.
And so she was highly motivated. Now, if you think about this in a bigger sense, it's really just a profit-sharing plan.
But they get to say they have equity. So they get past that seventh year.
It's not really equity, but it really is, but it really isn't. So I found for people to say I own part of this company was highly, highly motivating for them.
For me to control it, for me to make sure everything happened

the way I wanted it to happen

was important to me.

But when they hit that seven-year mark,

they owned it.

And as I mentioned,

14 were owners in the different companies.

13 wrote it out to the exits.

And the one that left,

left under good terms.

I paid her a three multiple.

And I think I just wrote her a check because it wasn't a big one, and still friends with her today, and so that was my model, was ABC shares, get to a certain point, you're vested, there's things I might have done different, you know, if you want to be selfish, I might've done different. I might've said, okay, if we exit,

you only get a four multiple, even if I exit at a seven,

but I chose not to do that. I didn't exit.
However I exited.

So there's different little things you can do inside the model. Yeah.

But that was my model right there. And it was highly successful.
I'm about to do it again with an employee.

I'm in a new company in the pet pet pet industry i've gotten out of health care never want to go back into health care um and so you know we're in the pet space we're in the female weight loss space we're in a charter space and so i'm starting to bring those people in under the same model and so i know for seven years they're gonna stick around because they want that exit and they want those distributions and distributions are a hell of a lot more than commissions let me tell you yeah yeah yeah i would agree with that i know um one of the things that when I founded my agency, I wrote down this term, you know, I was kind of mapping out what I wanted to do. And I wrote down this term, a no ceiling insurance career, because at multiple times in my career, I've been told I have no shot at equity or profit or really any kind of ownership structure because my last name was different than the last name on the building.
And that to me, I'm 42 today. When I was in my 30s, those were unacceptable.
I was too young and too ambitious to accept the fact that there was never going to be anything more than where I was. So I wrote down this idea, no ceiling insurance career.
And essentially what I wanted to do and we are doing is building out a plan which allows people to kind of trial by fire, work their way through a set of escalating positions to the point where when they've proven themselves, which will be around the five-year mark, they vest into a profit sharing plan on their book of business and stuff like that. So it's, it'll be interesting.
We're still young. So we haven't seen all the, probably all the pitfalls that come with these different things as we go.
But I will say that, you know, the producers that we get here, the salespeople that we get here tend to come in and fire pretty hard because they see that, you know, that there's a future for them, you know, and some of them don't have the ability, you know what I mean? We've had people come in, they don't have the ability or culturally they're not good fit. But the idea that I could come in, work my ass off, make money and ultimately have this future where I'm sharing and the upside of what I create, it's incredibly motivating.
I couldn't agree with you more. I like your structure a lot.
And you have me thinking because we don't we aren't yet using different share types. We're using more like phantom equity structure.
But I'd like the term equity. I really, really think that's a motivating factor over profit sharing.
I just do. Yeah.
And it's the same thing from a dollar perspective. Yeah.
But when I tell people they have ownership, I hand them a stock certificate.

You know, they know all the rules. They sign the operating agreement.

I mean, it's a it's a little ceremony almost. Yeah.
I mean, a huge, huge deal.

I agree with you. For some reason, profit sharing doesn't feel real.
You're kind of like,

they're going to hose me somehow. You know what I mean? They're going to they're going to do so

they'll spend a bunch of money before the end of the year. You know, I mean, there's all these like

Thank you. doesn't feel real.
You're kind of like, eh, they're going to hose me somehow. You know what I mean? They're going to, they're going to do so they'll spend a bunch of money before the end of the year.
You know what I mean? There's all these like negative thoughts are to creep into your head, but just like you said, even though, even if it's distributed exactly the same way, you know, feeling like, you know, having ownership in something, it's a sense of pride and it feels very important. So what, you know, so, so, so Redneck Resilience, what, what made you write this book? What was the impetus of it? What, what, like, why, why did you decide to write this? Why did you, of all the things that seemingly you still have an incredible amount going on and didn't need to take on another project? What, what was the reason for putting it together? You know, I'll backtrack a little bit and share a little bit of my personal story because I've had a crazy, crazy life.
Again, I mentioned I'm the only guy you know that's probably been held at gunpoint. Yeah.
I've been played by the Sandinista soldiers. When I was young, I bit off my tongue.
I fell off a swing set, bit bit my tongue completely off, had to have it sewed back on three different times with no, no deadening medicine, no pain medicine. I learned a lot about that.
That led me to disregard blood on my pillow when I was 17, only to find out I had some brain tumors. Oh, wow.
Had to go get those out. Um, you know lost lost my hearing this other year because of it uh you know had a tough year in 1990 going through divorce and child and losing jobs and all those sort of things um side story to the side story um country baptist southern boy marries big city jewish girl from chicago marcia in 1993 or 1995 very supportive spouse another thing i talk to people a lot about is having that support system around you that you need that dramatically that support and i had it with her she knew i had to work 17 hours a day she knew that i had to do things now we set up certain things we had date night we date night was religion we had dad coached kids sports i coached 17 seasons of some kind of sports so i'd have that relationship with my kids grew grew grew grew grew um the sad part of the story is and we were really doing well in life making a lot of money uh building our big you know 12 000 foot dream home and marcia was unexpectedly without any symptoms diagnosed with stage four pancreatic cancer yeah taught us completely by surprise i took off from the company took care of her may 20th of, the day she was dismissed from MD Anderson.
I was diagnosed with stage three renal cancer and made a decision to forego radiation and chemo. And I said, just cut me open, cut me, take the tumor, take the kidney, take the bowel.
Walked out of the hospital 19 hours and she lasted six more days so I'm raising two little boys and when I was ready to get back into the real world of dating I went on match.com and which was kind of fun and I lied and said I was an x-ray tech which was cute and you know sort of went that route and met Kathy she my first, first date in 20 years and the last first date for the rest of my life. So we got together.
We dated three years. She helped me raise my boys.
We got married now eight years ago and have this wonderful, wonderful life we get to live. And all of that's really due to this resilience is coming back and getting knocked down and i use the term resilience it's not just getting knocked down and getting back up why the hell do you want to get punched in the face again it's getting knocked down getting back up and finding another path yeah you know i think that's one of the keys to resilience i don't know if i answered your question but that was sort of my personal part of my story.
Yeah, no, I mean, it makes a lot of sense. And I think that, you know, you, you, there is an art to knowing when to keep doing the same thing, you know, and not getting results.
I think some people take a concept like resilience or perseverance or dedication, and they just continue to get up and try to do the same thing and get the same results and then wonder why they're not moving forward. And I think that the insight that resilience isn't just getting back up, it's giving back up and having the self-awareness, the situational awareness to be able to make a decision if the reason you got knocked down isn't because you're just not on the right path maybe.
And there's a lot to that. So what do you think, obviously your personal life has played a major role in the success of your professional life.
What was it about being raised or was there anything about being raised in the South, being raised Southern Baptist? Was there anything in your upbringing in particular that you think helped you develop resilience or was this an inequality in you that you've cultivated over the years? Yeah, I think when you watch two 17-year-old parents that have three children by the time they're 24, and you watch them go through what they went through, I learned so much from my parents. My mom went back to nursing school when I was in high school, became a nurse practitioner.
We were in college at the same time. That's funny.
She would get up every morning as a child and make biscuits and we lived near a farm so we lived off of milk straight from the cow wasn't you know we lived off of eggs straight from the chicken we lived off of squirrels and fish and things like that but my mom would get up every morning at five o'clock and cook his breakfast for school and get my daddy ready to go to work. One of my biggest resilience was my dad decided to start his own company when I was in high school.
And two things came out of that. One, I said, dad, I want to go to work for you after high school.
And he said, no, I want you to go to school so you don't have to work for a living. And I didn't really know what that meant until about 2006.
I was stuck in an ice storm and I saw a lineman on a power pole in the middle of the ice storm. And I went, that's what my daddy meant.
Get an education where you're not climbing the pole. There's nothing wrong with climbing the pole, but he was telling me get this education.
The other thing that happened to him was his accountant was stealing his money and the IRS came in and shut him down. I was probably 17 and I watched my dad go back to work, pay back every penny to the IRS, pay back every penny to every vendor he ever had money to and rebuild his career in the sales side of the electrical world.
So a lot of resilience there from him and learning that from him that, okay, he got his ass whipped and he got back up and he went back to work. Same thing I did in Florida when I couldn't pay my house note.
I kissed my wife on the cheek and said, I got to go back to work. I'll see you in four to five years and went back to work and so I think that was really relevant Southern Baptist not so relevant I mean it was interesting we went to church you know four or five days a week I'm a little burned out on the church thing right now personally and then when you marry a Jewish girl you learn a lot about the Jewish faith so it's kind of in the middle I did agree to to raise my boys jewish so southern baptist kid from mississippi raised two jewish boys so so interesting learning experience kathy embraced it i'm extremely extremely close to marcia's family still uh her dad is my best friend so and then he calls kathy his daughter-in-law.
So we've got this really crazy blended family that's kind of cool with grandbabies popping up everywhere. So my parents were probably the biggest influence in my life in terms of driving me and teaching me and showing me.
It seems like despite all that hardship, you were able to keep love to a certain extent in your heart. I mean, it sounds like the relationships you've had, the depth, the depth that you've had with your employees, particularly your key employees and throughout your companies has been a big part of your success.
Does that seem right? Yeah, I said it earlier and I'll say it again. Relationships will define your life, period, end of story.
They will define your business. that will define the direction you go that will define your life period in the store they will define your business

they will define the direction you go they will define your success and I always make a joke about the fact I probably fired 498 people and 496 still send me Christmas cards because I have a relationship with them I set expectations they didn't meet them they either weren't the right fit, need to go somewhere else, was compassionate in my terminations, two not so compassionate, the rest of them I was, and again, about relationships. I'm a big believer in that.
Yeah. I mean, at the end, you know, not to get too cliche, but, you know, I think this is something you definitely don't realize when you're young and it takes time.

And as your life gets more busy and you realize what real relationships are and you go through real hardships with people, you start to understand what what relationships mean to you. But do you have any, I don't want to make it trite, but any advice for people who maybe struggle to, one of the things that I talk about with, so I normally on Fridays, we didn't, it wasn't this week, every other Friday, I have this little man meeting that I go to, and it's a bunch of guys around my age, like 30s to mid 40s.
And we just sit and we have coffee or eggs at the diner or whatever, and, and chat. And, you know, one of the things that comes up every once in a while is just the, the, the hecticness and urgency of 2023, you know, kind of modern society makes kind of cultivating relationships difficult.
And, you know, we always, is it, you know, we kind of come back to sometimes like, is it just, is it just a lack of prioritization? Is it that the world really is incredibly busy right now? Is it that secularism has kind of taken over and we'd rather buy something than spend time with people? Like, you know, do you have any advice, guidance for people who maybe are sitting here going, geez, I, I, I believe James that, that a hundred percent, but man, I struggle. I struggle to maintain, build or grow relationships with people.
Yeah. It gets harder and harder.
The older you get, it's really hard at 2023 and 2022 and maybe harder in 2024. I think one of the most positive things and negative things that came out of COVID is what you and I are doing right now, Zoom.
You know, positively, we can communicate. Negatively, we're not in the same room.
Yep. You know, I'm not meeting you afterwards for a happy hour drink.
I'm not going to lunch with you. And I miss that a lot.
Yeah. Miss that a lot.
And I think that that that's a huge component. And I wonder about the next generations, how they'll overcome that and how they'll develop these relationships.
Will it always be on a computer? Yeah. I don't know.
I like you already, but you're on a computer. Yeah.
It's, you know, so one of the things, so we're big into baseball, my family, I played baseball in college. I played baseball a little while after college.
I have two sons, nine and seven, and they both play baseball and travel baseball and, you know, just what we do. And one of the things that I find very interesting, just watching young kids today, because I tend to enjoy kids.
I'm not one of those guys who finds them annoying. I, you know, that they're, they're, I don't know, they're funny and fun and I enjoy them.
And yeah. And I talked to my kids a lot about it.
And just, I tell them all the time, like this experience that you're having, where you're, you're struggling, you're winning, you're losing, you're having personal successes, personal failures, team successes, team failures. You're watching your friends where you're bleeding and sweating and you're having all these experiences together and traveling together.
I was like, you don't know it today, but you will look back on these times and all these kids that sit at home and they play video games and they never come out of their house and their parents have to watch every move they make. And, and they're just, you are going to be so far ahead of them in life because you've, you're learning how to have friends and how to interact with kids.
And one of the kids is kind of a jerk and how do you, how do you deal with them? And, you know, I mean, all these kinds of things that just these interpersonal, interrelational skills associated with a common goal, you know, winning baseball games. It's just so valuable.
And, and so many kids, you can just tell they spend 90% of their day indoors in front of a computer, in front of a TV, in front of video games. And they really struggle.
They don't look at you in the eye. You talk to them.
They don't talk back. And I worry about I worry for those kids.
It's not really my concern necessarily. They're not my children.
But I do I do think there is going to be a major divide in our society in these generations where you have the kids that were given experiences like what I hope I'm doing for my children. And then you're going to have this other group that just absolutely does not know how to relate to each other outside of a text message or a video game chat screen.
Or, you know, I don't even know what I'm talking about. I don't play video games.
So, you know, like, you know, so that that does. I just see it as a competitive advantage.
If you can put your kids in that space, I don't know. I agree a hundred percent with you on that one.
And really trying to focus my grandkids on sports a little bit. They're not athletes, but you know, they're participating.
And you know, my one grandson spends half the day on the computer doing a program. He's learned how to programming at 11 years of age wow but he's also going to the basketball game that night practicing with his friends and he's also going to the swimming thing and so we're trying to really push in that direction yeah and then we have the other grandson who's pretty content to play a saxophone and do his video games and never leave the house so we're really trying to get him more involved in friends yeah i have a buddy of mine this is he's known out there uh during covid his son was stuck in the house for so long was playing video games and he broke his video controller and he hung himself in his in his closet he was seven years old my god it completely wrecked his family's life and uh they've started non-profits now to kind of remind people that get them off the freaking video games get them out there into the real world you know and it's i struggle with it with my own grandchildren a lot yeah i i do too i mean there's part of me there's part of me one i completely part of me, one, I completely understand that the hectic

nature of life and in small doses, these, this is how these kids relax to a certain extent, you know,

and, and how they, you know, whatever, but uncontrolled, unfettered access to YouTube or to,

you know, to, to video games, um, it's not healthy. It's just absolutely positively not healthy.
And it's a struggle. You know, I, I struggle with it a lot.
Like they, you know, you, you have that thing inside you as a parent where you want your kids to be happy and it's something that makes them happy. But at the same time, you know, and I think my, my ex-wife and I have done a good job at this is like, you get so much time and that's it.
Then it's done. You know what I mean? It can't, you know, this is, this is play.
This is not real life. And I tell that to him all the time, guys, this is not real life.
Like being, being good at football on the video game is meaningless. Now it's fun.
If, you know, it's cool. We all have hobbies, you know, we all have things we like to do, but like, it's meaningless to your life.
It's just a fun thing that you do as an escape for a little while, which we all need to have those things. That's okay.
But like, it's not real. Like that is not really what's going on in the YouTube stuff.
I'm like, you're watching something. That's a, that's a fantasy.
That's like watching drag, a dragon movie. Like it doesn't exist.
Like you're not watching real life. And that is such a hard concept for these young kids to wrap their head around.
They don't realize that they're watching something that just, it's completely make-believe they, they, they get lost and maybe there's some real to that. And that's very scary.
It's very scary, particularly with some of the things that are happening out there in the world.

You know, I remember back when I was a child and, you know, my parents said, OK, you watch Popeye and Three Stooges for two hours. After that, get your butt out of the yard.
Yeah. And then we literally had the Second Avenue Raiders, our little club.
and we would meet and play baseball and softball

and run up and down the streets and skateboard

and, you know, build our own little go-karts, and we just don't do that now, and I don't know how much that falls on us as parents, how much that falls on us as society, as the norm, but I push my children to limit their kids' time on the devices. You know, I completely agree with you.
You know, I talked to my mom about this all the time. Cause you know, just try to compare my mom was young too.
Not, not as young as yours, but she was 20 when she had me. And, um, and you know, so we, we talk a lot and, you know, at eight years old, she was handing me milk money and sending me out into town to go get milk and eggs or whatever we needed from the store.
And I'm crossing streets and walking through neighborhoods and at eight. And I'd come back with bags of groceries and she'd be making dinner and whatever.
Now, you know, my older son is nine and we're at the batting cages the other day and I send him out to get more money. I left my wallet in the car and he's like, Hey dad, can I get a Gatorade or whatever? So I send him out to the car to get my wallet.
And like, I'm like having nervous energy that he's going to, and I, I, I trust that he's smart. I trust that he's capable.
I trust that he's very cognizant of what's going on, but like, I'm having some anxiety. And I know that that same situation with my mom, you know, 30 years ago, she wouldn't even thought twice.
She's just like, Hey, I need milk. There's my milk getter.
Here's, you know, here's five, here's $3. Go get us milk and eggs or whatever, you know? And it's just, I don't know.
Is it, is it that we just know every bad thing that happens in the world every day through the news and media? Is it that the world is actually more unsafe? I don't know what it is exactly, but it's definitely there. It is absolutely definitely there.
Yeah, I don't think there's any question that the world is more unsafe, period end of story. I think access to news and social media has enhanced that problem further um you brought up you know get milk my parents had a horn yeah eight o'clock at night they would toot the horn and we knew we had to come home but i might have been gone for 11 or 12 hours yeah yeah yeah so i it's a hard question to answer and it's even a harder question to solve.
Yeah. I agree with you.
I'm not sure what to do. I'm doing the best I can with my kids.
I'm going to make sure they're protected. I'm going to make sure that they'd limit their time on social media, but you know, so far they're doing great.
All my kids are doing great. So I'm very happy and very proud of them.
Yeah. James, I want to be respectful of your time, respectful of our audience's time.
It's been absolutely tremendous speaking with you. The book is Redneck Resilience, A Country Boy's Journey to Prosperity.
We'll have it all linked up in the show notes for everyone that's listening. If anybody wants to connect with you in any way, other than just coming to your website, which I'll have linked up and everything.
It's jamesheraldweb.com slash book if you want to go to the book, but you'll see the links are on there and everything. Is there anywhere else they can connect? Do you do anything in any other venue where they can follow along with anything that you're doing? I don't really.
I mean, Facebook is big. LinkedIn is probably my biggest.
Gotcha. We'll have all that.
Just Google James Herb with LinkedIn. We try to post daily messages and we're trying to motivate people.
Yeah, awesome. Well, it's tremendous.
I love your viewpoint. I love your experience.
I completely think the way that you've used the word resilience and the fact that you did use it makes so much sense. And in the way that I think a lot of people need today, because it does, you know, just, it does feel like people are getting, and maybe this is the way the world has always been, but I know a lot of people right now that feel like they're getting knocked down or getting held back or, or quite often, or more often than they're used to, um, whether it's COVID or it's something else, the economy.
And, um, I think it's positive, reassuring messages that also come with a bit of a kick in the

butt are what people need.

And I appreciate you and I appreciate your time.

Thank you for your time, Ron.

It was a pleasure, buddy.

Yeah.

Thank you.

Have a good one.

Thank you.

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