Ed’s Questions: Segment One

Welcome to The Soul of Enterprise: Business in the Knowledge Economy, sponsored by Sage, transforming the way people think and work so their organizations can thrive. I'm Ed Kless, with my friend and co-host, Ron Baker, and folks on today's show, we are pleased to have with us for the first time, Gene Marks. Hey, Ron, how are you doing?

Ron Baker

I'm doing good, Ed. I had an eye doctor appointment this morning, so my eyes are dilated and full of stuff, so I can barely see you. But I can listen, so that's good.

Let's get Gene on and welcome him to the show. Gene is the CEO of the The Marks Group, and also the host of the weekly podcast called Small Biz Ahead [presented by The Hartford]. And also Gene marks.com, to read his blog and other fun stuff, welcome to The Soul of Enterprise, Gene Marks.

That’s great. We've recently had Peter Robinson on from Uncommon Knowledge [Episode #320], who was a speechwriter for Reagan and wrote the “Mr. Gorbachev, tear down this wall” speech. And he told us the backstory to that, which was absolutely fascinating. The other thing is that speech that we play as an introduction is from his speech to Moscow State University. And it was delivered with the bust of Lenin is behind him. And he's talking about this economy and mind, no bounds on human freedom to create being the most precious natural resource, and we just think about that. And we think it's perhaps Reagan's best ever speech and the author of that speech, Joshua Gilder, is coming on in a couple of weeks [March 12, 2021].

I personally think that he was right about the Cold War, the Soviets just couldn't keep up with us from an innovation standpoint. And that's one of the reasons that this show is The Soul of Enterprise, because we believe that business has not only a material but also a spiritual component to it. And that was one of the things that was missing in the Soviet Union, not the religious, but spiritual component of business and the creativity.

He was great at that, Let’s hire good people and get the hell out of their way,” that was his motto. So Jean, there's so much we could talk to you about, but the thing that jumped out at me today in news: Bitcoin is over a trillion dollars in market cap. I'm fortunate enough to have some that I bought a long, long time ago, and I'm already out, and have gotten out what I put in. So now it's all house money. So now I'm like, it's either going to change my life in the future, or it's not. That's where I am with it. But I think this is a significant moment, or at least maybe through the next couple of months. I looked at this as a Crossing the Chasm kind of thing. Today, we are about 10% of the market cap of gold. And you know, that Crossing the Chasm, Mark, is that, you know, 10 to 14 to 18%, when you cross the chasm, and then boom, you get all of the early adopters who just completely come online. And, we're at a point now I think, an inflection point, a serious inflection point, whether this is going to make it or we're going to break it in the next couple months. Thoughts on that?

One of the things that Elon Musk talked about, and Greg [Tirico] who runs our social media, and I were talking about this earlier today is, first of all, he always clarifies that it wasn't himself who made the investment, it was Tesla who made the investment. And the rationale for it is really so that they would be less beholden to the volatility of it when they start taking payments in it. That was the thought process. Now, if this starts to happen with other companies, if Walmart, Amazon, starts to hold large amounts of Bitcoin, that's where you see…

I completely agree. So we've got about two minutes left on this segment, so I'm hesitant to bring up a completely different subject. I wanted to get your thoughts. Have you looked at all at the Australian link tax that's come out recently? I tried to post something today on Facebook and was told, nope, you can't do it because there's a link to Australia in there somewhere, And Australia has now put a thing where if you want to put a link up, there's a tax that has to be paid to do this. This is a really bad idea.

That might well be, but posting a link and a tax on a link seems to me that's not content, you're not publishing content when you're publishing a link. It seems to be a silly argument.

All right, we are up against our first break.

Ron’s Questions: Segment Two

Welcome back, everybody. We're here with Gene Marks. And Gene, I feel like we could go a million different places because I know you're a KPMG alma mater, but let me ask you this. This caught my eye looking at your bio, tell me about your book, In God We Trust: Everyone Else Pays Cash.

Fantastic. Let me ask you this, because I know you're a CPA, as am I? Do you think our profession is serving small businesses in this area of cash flow? Cash is king, right? It seems like we play historian with bad memories with the financial statements, but we don't help them model cash.

It seems like we pay lip service to the relationship we have with the customers that we're privileged to serve.

Tell me about your book, The Small Business Book of Lists.

That's phenomenal. It reminds me of the book, The Checklist Manifesto, but on steroids.

Ed and I work in the pricing space, and there's been this pricing revolution going on since at least the mid 1980s, in big business. And my question for you is, do you think that's filtered down into smaller business? In other words, have smaller business gotten more sophisticated with respect to pricing, moving away from the idea of cost-plus pricing and more to value pricing?

And it's good enough, right? It's what one economist called “satisficing,” we just do good enough, we don't set out to optimize or to maximize, we just do good enough?

I couldn't agree more. It is a totally amazing opportunity. And we've been trying to get CPAs to do it for their customers. And Gene, we've had more luck with bookkeepers; they can advise their customers because they seem to have a better relationship with them.

I was thrilled to hear you say that you've got an opinion on everything. So I'm going to switch gears really hard on you here. Grade president Trump's economic policies.

It's a great point. It creates a climate of uncertainty. I think you can equate it back to FDR during the Great Depression, all the programs he tried created enormous uncertainty in the markets. It probably stalled the recovery for more years. Gene, this is great. This is flying by.

Ed’s Questions: Segment Three

And we are back with the CEO of The Marks Group, Gene Marks, and also host of the weekly podcast Small Biz Ahead with The Hartford. Gene, you were talking pricing with my partner, Ron, and we have been doing a lot of shows in the last 18 months or so, including an interview with Tien Tzuo [Episode #230], who wrote the book Subscribed, about the move to the subscription economy. I’d love to get your thoughts on subscription based pricing, especially in the professions.

Let me recommend that you listen to our show from last week with John Warrillow [Episode #327], author of The Automatic Customer, who told a story very similar to yours, how he was working with one client of his that was ready to walk away. John’s big thing is built to sell, that's the name of his system. And he said the one customer in professional services industry, they were getting offers of 70 to 75 cents on the dollar of revenue. Another company, in the same industry, it was media. So search optimization, that kind of stuff, but it had a subscription model, they were getting offers of 13 times revenue.

Let's turn our attention to your latest article and talk a little bit about this, because I think that there might be something here. Your latest article in Forbes, published this morning, says that 48% of sales leaders say their CRM system doesn't meet their needs? Alright, so the good news is that's fixable. All right, why is it and how is it fixable? And let me pose this to you: Why can't you as a business owner make a subscription model around fixing it?

And that's the problem. I did implementations for a long time, both of CRM systems and accounting. And I always felt that the project is this summit, we always use this climbing the mountain metaphor. I was like a Sherpa, and I was helping my client get to the top of the mountain. And then I was taking a helicopter off and saying, “Good luck getting down.” And I think that's really the problem. So I think that by applying the subscription model, look, not every customer is going to want it, and it's going to be significantly less customers that do this. But I think that's really the issue. Let me tell you a quick story before the break. But here's an example of a great CRM system. USAA insurance, I had a little fender bender about two years ago, this was before COVID. So I call up USAA and they say, first of all, “Are you safe?” That's their first thing, customer service. Are you feeling safe? Yes, I'm feeling safe. That's great. Thanks, Mr. Kless, that's wonderful. Oh, and by the way, thank your father-in-law for his service.

Bang.

Remember Martha Rodgers and Don Peppers wrote all those marketing one-to-one books. I saw Martha Rodgers speak at a conference and she called it the “Dory effect.” Remember Dory from Finding Nemo? She had no memory. What paper would you like? The Wall Street Journal like I said yesterday.

Alright Gene. Well, thank you so much. I'm going to let Ron finish up with you for the last 15 minutes so let me say thanks for appearing today. We'll have to have you on again sometime, love talking to you.

Ron’s Questions: Segment Four

Welcome back, everybody. We're here with Gene Marks. Gene, you are an author, you've written some books. So let me ask you, we love to ask our author guests this question. What are some of the business books that have had a major impact on your worldview, your thinking, your behavior?

One of the books we highlighted on our show, Best Books of 2020 [Episode #326], and the one for me was Humanocracy by Gary Hamel [Episode #313]. I don't know if you've had a chance to read it. It is phenomenal. It’s a screed against bureaucracy in business. And it's, as usual, he's just way ahead of his time with that book.

I agree with you reading history, reading biographies, autobiographies, that's where it's at. I learn more from that. You mentioned the FDR book. I wanted to tell you about one of Richard Nixon's books. He wrote many books. He's got one called Leaders that I thoroughly enjoyed. It's one of the best, because I can't stand books on leadership. There's too many of them, they all sound the same. His is completely different, it profiles some of the greatest figures in history. And it's a really interesting perspective on leadership. Really, really good.

And I noticed just looking through your blog scroll that you tackle economic issues. So who are some of the economists that have influenced you over the years?

That's awesome, we're economist junkies. We've had a lot of guests that are economists. Are you familiar with Russ Roberts’ podcast, EconTalk?

In the spirit, since you like James Pethokoukis, you might also check out John Tamny, over at Freedom Works. He's written many books on economics just for the layperson, and he's got a different perspective—he bashes both sides. It's just really interesting [John Tamny will be on the show March 19, 2021].

And if there's inflation, we'll just raise taxes and suck the money back out.

Thanks so much, Gene. This has been wonderful having you on. Will definitely want to do this again.

And stay with us as we do our live close. Ed, what do we have on store for next week?

Ed Kless

Ron, next week, we are talking to Donald Hoffman about his book, ready for this folks, The Case Against Reality.

Bonus Content is Available As Well

Did you know that each week after our live show, Ron and Ed take to the microphone for a bonus show? Typically, this bonus show is an extension of the live show topic (sometimes even with the same guest) and a few other pieces of news, current events, or things that have caught our attention.

This week was bonus episode 328: “Ed Is Off His Meds”
Here are a few links discussed:

Click the “FANATIC” image to learn more about pricing and member benefits.