Greg Tirico

June 29, 2020

Episode #298 - Third interview with Dr. Paul Thomas

Greg Tirico

June 29, 2020

In his previous appearances, Dr. Paul has shared his experiences with subscription based pricing and COVID-19. In this episode, we spend the balance of our time talking about his new book, Startup DPC: How To Start And Grow Your Direct Primary Care Practice.

From the Foreword: We all know that our current healthcare system is broken, especially for primary care doctors and their patients. Primary care physicians have to see more and more patients in less and less time in order to keep up with declining reimbursement from insurance companies. This leads to rushed office visits, missed opportunities for genuine connections between doctors and their patients, frustrated patients, and burned out doctors. But it doesn't have to be this way.

But first…a bit more about Dr. Paul Thomas
Dr. Paul Thomas is a board-certified family medicine physician practicing in Corktown Detroit. His practice is Plum Health DPC, a Direct Primary Care service that is the first of its kind in Detroit and Wayne County. His mission is to deliver affordable, accessible health care services in Detroit and beyond. He has been featured on WDIV-TV Channel 4, WXYZ Channel 7, Crain's Detroit Business and CBS Radio. He has been a speaker at TEDxDetroit. He is a graduate of Wayne State University School of Medicine and now a Clinical Assistant Professor. Finally, he is an author of the book Direct Primary Care: The Cure for Our Broken Healthcare System.

Segment One Questions

We had you back Episode 286 right as the Coronavirus was just starting to break loose. Let's quick talk about that to get that out of the way so we can move on to the more important things which is your book, what's going on in your neck of the woods with Corona?
How about your practice, though? Just your practice is good from that perspective. You haven't had too many people come down?
Your book, released in May is, Startup DPC, how to start and grow your direct primary care practice. How's the book doing?
What is the difference between direct primary care and concierge medicine?
One of the questions that we get on a frequent basis is one that you get, which is, what about the hybrid model where you're taking insurance and trying to do direct primary care you recommend against that, don't you?
One of the things that you talked about at the beginning of the book is that electronic medical records were billing tool, not clinical care tools. And I'd really love for you to explain that.

Segment Two Questions

I wanted to talk with you a little bit about starting from scratch versus converting your practice now you started your practice from scratch?
Talk about if you're mid-career, can you start from scratch? Or can you convert? Which one would you lean towards?
You say that one of the more common criticisms is, “abandoning patients who are not in your practice, and that they'll people will say to you that if every primary care physician became a direct primary care doctor, there would be a shortage.” Do you believe that to be true? And if so, why or why not?
Yeah. Well, you write that one of the greatest lessons that you've learned as a maxim, “It's not the decisions. It's the decisiveness.” I really love that. I'd like to expand on that for me,
So I want to ask you something on a very personal note, but you write this in the book that you had to get over your “personal discomfort with money.” Why talk about that struggle? I'm really interested in that that part of your life.

Segment Three Questions

How did you come up with your pricing model?
Did you consider a family plan?
And you haven't had a price increase as of yet, correct?
And while we're on the subject of pricing, one of the things that you do talk about also is whether or not you should charge an enrollment fee. What are your thoughts on that?
How's your churn rate?
Companies contracting with you for it for a group of people, who does that work?
Talk about Mapper.DPCfrontier.com. Is that your site or is that just a site that you are aware of?

Segment Four Questions

I want to share this great quote with that you said that a marketing specialist once told you, “If your website sucks, you suck.”
And you are, as am I, a big fan of Gary Vee Gary Vaynerchuk of VaynerMedia and I want you to expound on his great quote “Document don't create.”
Do you have you have a newsletter I think that you send out to folks Is that for your practice, but it is and but also for your consulting practice as well?
And you quote, Benjamin Foley, who said, “Building a personal brand is all the rage right now, personal brands have always been around, they just used to be referred to as a different word, character.” Talk a little bit about that.
This direct primary care business is all about developing trusting relationships between doctors and their patients, wrap up on that point.

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.

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

Greg Tirico

June 22, 2020

Episode #297: Blockchain Update: Interview with Ron Quaranta and Sean Stein Smith

Greg Tirico

June 22, 2020

"We will know the blockchain has really made it when we stop talking about blockchain." So said Ron Quaranta, founder of the Wall Street Block Chain Alliance, during his last appearance on The Soul of Enterprise.

This time Ron was joined by Sean Stein Smith, professor at Lehman College, to share their insights into the latest news and use cases of the blockchain. Sadly, Ron Baker is working through a medical situation and was unable to be on the show.

But first…a bit more about Sean Stein Smith
Dr. Stein Smith is an Assistant Professor in the Business and Economics department. Before transitioning to academia full time, beginning with his appointment to a faculty position at Rutgers University, he worked in several corporate financial planning and accounting roles in both the for-profit and non-profit sectors. Dr. Stein Smith is actively engaged in the accounting community, having been awarded the NJCPA 30 under 30 in 2015, the Institute of Management Accountants Young Professional of the Year Award in 2016, and currently serves on the Fairleigh Dickinson University Alumni Association Board of Governors. Sean is also a member of the 2017 Class of the AICPA Leadership Academy.

Also, here is a bit more about Ron Quaranta
Ron possesses almost three decades of experience in the global financial services and technology industries. He currently serves as Chairman and Chief Executive Officer of the Wall Street Blockchain Alliance, the world’s leading non-profit trade association promoting the comprehensive adoption of blockchain technology and cryptoassets across global financial markets. Prior to this, Ron served as CEO of DerivaTrust Technologies, a pioneering software and technology firm for financial market participants. Ron is the editor and contributing author of the book “Blockchain in Financial Markets and Beyond: Challenges and Applications”, published Risk Books, as well as contributor to “Blockchain & Cryptocurrency Regulation 2019”, published by Global Legal Insights.

Segment One Questions

To Ron Q: You were last on our show in October of 2018 which in COVID years is a decade ago, but even in crypto world, that's a long time. Talk a little bit of what what's happened for you specifically at the Wall Street Blockchain Alliance in the last 18 months.
To Sean: You have spent a lot of time thinking about or concerned with blockchain as well as Bitcoin even and the integration into the accounting market space. Talk a little bit about your journey through that process.
To both: But what are some of the newer use cases that we're seeing that you're working on right now?
To both: What I'm hearing from both of you is that the possible small business use case will be that if you want to sell your product to these guys [big box retailers], you're going to be have to be on a system capable of doing that [using their blockchain]. And whether that's appified on their iPhone, or whether that's an accounting system that ties into blockchain, that's going to be the place where that's going to connect. Did I get that about right?

Segment Two Questions

To Sean: You just were completed, I believe last summer, a fellowship with AIER up in Massachusetts and would love to hear the about the connections that you made when you were up there last summer.
To Sean: Did you get a chance to talk with one of our favorite people on the planet here at The Soul of Enterprise George Gilder?
To Sean: I attended the Acton Institute's online on Acton University this week, and George Gilder was one of the speakers there. He thinks people are crazy and nuts about the privacy issues as they exist today. He just dismisses it as a total non issue because he truly believes that the blockchain is going to replace the internet as it is right now with an internet where security and individuality is baked into the system. Do you think that George has that right?
To Ron Q: What are your thoughts on that security and the blockchain being an answer to some of the security holes that we see now?

Segment Three Questions

To Ron Q: What if you connect via blockchain, your 23andme result, the DNA ,the essence of who you are in some kind of a blockchain technology and that goes with your profile, not only to the first doctor, but to all doctors [on your case].
To Sean: The [killer] application from an accounting perspective might be something more along the lines of preventing identity theft or income tax filing, or even perhaps voting. What about thoughts on that?
To Ron Q: When you were on last with Eric Assgeirson [of CPA.com], we talked about the interplay and interchange between private blockchains and public blockchains. And how we saw that that might be something that emerges. Have you started to see that at the at the Wall Street level?
To Ron Q: How about with respect to COVID-19 and or any other future pandemic or disease that comes down the pike and using blockchain for contact tracing?

Segment Four Questions

To both: I want to talk to you a little bit more about the most famous use case and that is Bitcoin. Using the date of Ron's last appearance it was just after the Bitcoin Cash split when Bitcoin Cash split it was about 10% of the price of current of what Bitcoin was at. Bitcoin was at $3,300 and Bitcoin cash was at $330, that's a 10% ratio. Well, I checked today and Bitcoin Cash is now 2.5% of the value with Bitcoin being at $9,333 versus $230 for Bitcoin Cash today. What's up with that?
To both: Bitcoin is not classified by the government as a currency, it’s property, but I think we are headed for a time when there's good where there's going to be a challenge. I don't know if it's going to happen at the Supreme Court level, but, it's going to have to be dealt with and perhaps recognized to a certain extent as a currency.
To both: I believe it was about a month ago, the Chinese government has released a fiat currency based on blockchain. And it's a major state trial of this with transactions flowing through, so is China ahead of us on this?
To Ron Q: What do you think Facebook pulled back on that [Libra]?
To both: What is BitCoin going to be priced at in one year, five years, and ten years from now?

Bonus Content is Available As Well

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

Greg Tirico

June 15, 2020

Episode #296: Subscription Pricing at Summit CPA — Jody Grunden

Greg Tirico

June 15, 2020

We were thrilled to interview Jody Grunden, CEO and Co-Founder of Summit CPA. The firm adopted a subscription pricing model and we are eager to learn how he grew the firm from $600,000 in revenue in 2004 to $7,000,000 today.

But first…a bit more about Jody
Jody Grunden is the managing member of Summit CPA Group. Jody focuses his attentions primarily on Virtual CFO Services. Jody meets with business owners on a weekly basis to assist them with Cash Flow Management, Forecasting, Budgeting, Debt Restructuring, Cost Accounting, and Cutting Edge Tax Planning. He takes great pride in helping business owner strive in all economic conditions. He strongly believes that a well-run company will excel in both a good and bad economy. Jody is also the author of Digital Dollars and Cents. Jody graduated from Indiana University with a bachelor's degree in accounting. Jody has been happily married to his wife, April for over 25 years. April is an estate planning attorney for Grunden Law Offices where she concentrates her practice on estate planning, succession planning, and business formations. They have two children, Tyler and Lexi.

Here are Ed’s questions from the interview

You have a fairly unique pricing model, a weekly subscription. But before we get to that, let’s talk about your background. How did you get to Summit CPA?
For how long did you do timesheets? You started with them when you first started the firm?
Other than timesheets and hourly billing, why did you want to change your business model?
Talk to us about the time of transition from billing by the hour for about two years to fixed pricing? How did you change? Did you start with current customers, new customers, how did it happen?
What was the secret sauce, the magic that helped you turn the corner?
You mentioned you brought the pricing into equilibrium with what is valuable in the minds of the customers. What conversations did you have with your current customers as you were trying to help them make the transition. Was there pushback from them to the new pricing and just wanted to stay on the old method?
I noticed on your website, you talk about offering flat-fee pricing, but it’s unique because it’s done on a weekly basis, as well as you offer them choices. Why weekly?
You have three distinct categories: Transactional, Controller, and Virtual CFO, and priced as of June 12, 2020 at $750/week, $1,000/week, and $1,500/week. Talk to me about how you got to those prices for those three distinct levels?
You also offer some bundled services on top of those levels, such as individual and business tax returns—listed as optional—and also paying bills, cash flow management, payroll that are a la carte. What’s the difference between optional and a la carte?
Do you consider this to be more subscription-based pricing than, say, value pricing?
Do you have a lot of customers who jump on and jump off after they get their mess cleaned up?
You also mentioned that you teach what you call “profit-focused accounting.” Talk to me about that.
Let’s discuss marketing. You have a great website, it’s really well organized. You have a podcast, a blog. Talk to me about how you use that as an integrated marketing approach to get new customers.
One of the things most intriguing on your website is that you’ve created an accountant community, The CFO Community, for CFOs as well as firm owners. Give us a little run down on that?
If you were to give one or two pieces of advice to someone who has an accounting firm right now and is thinking of going to a new model, either going virtual or to a subscription model, what would it be?
If you are talking to a recent graduate who has their degree in accounting, and is interested in doing this, would you recommend they go right into it, or should they spend some time doing pain work with a regular CPA?

Bonus Content is Available As Well

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

Greg Tirico

June 8, 2020

Episode #295: The Perennial Gale of Creative Destruction

Greg Tirico

June 8, 2020

Evolutionary biologists have proven that the more adapted you are in your existing environment, the less able you are to adapt to environmental changes. We blindly cling to “that is the way we have always done it” in defiance of the evidence that this way is no longer relevant to success.

This is the history of business. New ideas, inventions, and business models from the tinkerer in the garage change the world, while rendering obsolete the existing modes of production, infrastructure, and business models. The automobile replaced the horse and buggy, the calculator replaced the slide rule, and the personal computer replaced the typewriter, and so on in a never-ending “perennial gale of creative destruction,” as described by economist Joseph Schumpeter.

“Generally, the leading practitioners of the old order become the victims of disruption, not the initiators of it.”

— Clayton Christensen

Werner Sombart (1863-1941) coined the phrase “Creative Destruction”. Joseph A. Schumpeter [1883-1950] made it famous.
Two books highly recommend on this topic: the first by Schumpeter, and the second a biography of Schumpeter:
- Capitalism, Socialism and Democracy, Joseph A. Schumpeter, 1942
- Prophet of Innovation: Joseph Schumpeter and Creative Destruction, Thomas K. McCraw, 2007

Background on Schumpeter

Schumpeter was to capitalism what Sigmund Freud was to the mind: someone whose ideas have become so ubiquitous and ingrained that we can’t separate his foundational thoughts from our own. There are many mini-narratives in economics: Adam Smith’s “invisible hand,” Thorstein Veblen’s “conspicuous consumption,” Paul Samuelson’s “revealed preference,” Larry Summers, “Nobody ever washed a rental car,” even Ron’s, “surgeons piercing ears.” Schumpeter “Enjoyed saying he aspired to become the greatest economist, horseman, and lover in the world. Things were not going well with the horses.”

Origins of the phrase, creative destruction

He first used the phrase in 1942: “Creative destruction is the essential fact about capitalism. Stabilized capitalism is a contradiction in terms.”

“Every piece of business strategy acquires its true significance only against the background of that process and within the situation created by it. It must be seen it its role in the perennial gale of creative destruction; it cannot be understood irrespective of it.”

— Joseph Schumpeter

Economic progress, in capitalist society, means turmoil. Dynamic Disequilibrium. Every day, businessmen feel themselves in a situation that is sure to change presently. They are standing on ground that is crumbling beneath their feet.

“Generally, the leading practitioners of the old order become the victims of disruption, not the initiators of it.”

— Clayton Christensen

One problem with creative destruction is the destruction is visible and measurable, but the creativity is not. New ideas hurt people earning their income from old ideas. But if we don’t allow anyone to get hurt, we stay at $3/day. If we allow creative destruction we achieve $137/day, and we can provide a safety net.

The acceptance of creative destruction relieved poverty, not wage regulations or other legislation, or even labor unions. Those preserved poverty by preserving old jobs.

“The capitalist achievement does not typically consist in providing more silk stockings for queens. The Achievement consists in bringing silk stockings within the reach of factory girls in return for steadily diminishing amounts of effort.”

— Joseph Schumpeter

Schumpeter said in a speech to businesspeople: “I’m not into remedies: I am not running a drug store. I have no pills to hand out; no clear-cut solutions for any practical problems that may arise.”

In 1911, Schumpeter laid out five types of innovation that define the entrepreneurial act:

Introduction of a new good
New method of production
Opening a new market
New source of supply of raw materials
Carrying out of new organization of any industry (business model)

Michelin producing radial tires in 1940s ended Akron’s reign as rubber capital of the world, killing off five tire companies (except Goodyear). GM’s innovation in financing is how it beat Ford in market share.

Another book on creative destruction is Openness to Creative Destruction: Sustaining Innovative Dynamism, by Arthur M. Diamond Jr. In it, the author explains two epiphanies he had: Innovative dynamism (ID) can give consumers both lower prices and new goods; and, both consumers and workers benefit. Inevitablists, those who believe innovation runs on autopilot, with the entrepreneur a bystander (if Edison hadn’t invented the light bulb many others would have). But we can be open or closed to innovation, as history has proven. There’s nothing inevitable about it. Bad government and bad policies can shut it down. Chinese culture valued credentialed civil service more than entrepreneurship. Kevin Kelly once argued that innovation is so inevitable that no Marxist could slow it. But under Stalin that’s exactly what happened.

Innovative Dynamism is not inevitable. The entrepreneurs swan song is the best way to predict the future is to invent it. Necessity is not the mother of invention. You are.

The difference between the economist’s vision and the management consultants vision: “Is it necessarily tragic for a firm to die? Why not celebrate what it did or tried to do and move on to new projects pursued by new firms?”

Daniel Kahneman posits “theory-induced blindness” that leads us to see what our theories predict, rather than what is actually in front of us.

Warren Buffet popularized the term moat, shield yourself from the competition, thereby creating a sustainable competitive advantage. The following can create a moat around your business:

intellectual property
Specialized skills or business processes
Exclusive access to relationships, data, or cheap materials
Strong, trusted brand
Substantial control of a distribution channel
Team of people uniquely qualified to solve a particular problem
Network effects or other types of flywheels
A higher pace of innovation

Elon Musk, on a May 2, 2018, Tesla earnings call said: “Moats are lame,” and “If your only defense against invading armies is a moat, you will not last long.” His opinion is that the most important sustainable competitive advantage is creating a culture that supports a higher pace of innovation.

Eastman Kodak Company had all of Buffet’s criteria, but still declared bankruptcy in 2012 after a century of market dominance. And Kodak developed the very first digital camera, way back in 1975! Kodak was even initially market leader in digital cameras too, with a 27 percent share as late as 1999. But it didn’t invest heavily enough in the technology relative to its competitors, the way Intel did when pivoting to microprocessors. Kodak simply wasn’t paranoid enough.

Richard Feynman famously wrote in his 1988 book, What Do You Care What Other People Think?, “I learned very early the difference between knowing the name of something and knowing something.”

George Gilder, author, economist—and Ron’s mentor—wrote of the ultimate conflict in Wealth and Poverty:

In every economy there is one crucial and definitive conflict. This is not the split between capitalists and workers, technocrats and humanists, government and business, liberals and conservatives, or rich and poor. All these divisions are partial and distorted reflections of the deeper conflict: the struggle between past and future, between the existing configuration of industries and the industries that will someday replace them. It is a conflict between established factories, technologies, formations of capital, and the ventures that may soon make them worthless—venture that today may not even exist; that today may flicker only as ideas, or tiny companies, or obscure research projects, or fierce but penniless ambitions; that today are unidentifiable and incalculable from above, but which, in time, in a progressing economy, must rise up if growth is to occur.

This YouTube video complements our show notes and provides a broad overview of creative destruction.

Bonus Content is Available As Well

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

Here are a few topics discussed from the most recent bonus episode:

Greg Tirico

June 1, 2020

Episode #294: Evasive Entrepreneurs with Adam Thierer

Greg Tirico

June 1, 2020

Adam Thierer is a senior research fellow at the Mercatus Center at George Mason University. He has spent more than 25 years covering the intersection of emerging technologies and public policy and has authored or edited eight books

Book topics range from media regulation and child safety issues to the role of federalism in high-technology markets, including Permissionless Innovation: The Continuing Case for Comprehensive Technological Freedom.

A bit more about Adam Thierer
Adam Thierer is a senior research fellow at the Mercatus Center at George Mason University. He has spent more than 25 years covering the intersection of emerging technologies and public policy and has authored or edited eight books on topics ranging from media regulation and child safety issues to the role of federalism in high-technology markets, including Permissionless Innovation: The Continuing Case for Comprehensive Technological Freedom. Previously, Thierer was president of the Progress and Freedom Foundation, director of Telecommunications Studies at the Cato Institute, and a senior fellow at the Heritage Foundation. He received his MA in international business management and trade theory at the University of Maryland and his BA in journalism and political science from Indiana University.

Here are Ed’s questions from the interview…

Welcome to TSOE, Adam. We had our mutual friend Professor Deirdre McCloskey on the show last week (Episode #293), and I know you cite her a couple of times in your book [Evasive Entrepreneurs and the Future of Governance: How Innovation Improves Economies and Governments]. You write specifically McCloskey reminds us that “betterment” and “improvement” and especially ‘innovation’ were long seen in Europe as violations of God’s will or as unsettling heresies.” Explain what your relationship is to Deirdre McCloskey and how you have furthered her work in this area.
Having you and her on is the perfect one-two punch around this topic. I’d like to jump into more current events. Yesterday Donald Trump signed an Executive Order reclassifying social platforms as publishers. I wanted to get your thoughts on that?
I’m amazed by some of my conservative friends on Facebook saying what a great idea this is because they are “monopolistic.” Even if you believe that, the way to make sure they become more monopolistic is to impose more government regulations.
I kept pleading with them, “there will be a D[emocrat] in the White House someday, you do realize this, don’t you?
Let’s launch into your book. Because it’s really an input to the evasive entrepreneur, what is permissionless innovation?
I want to pick up on something you were talking about with Ron. Do you think that we in the United States in a way have over-scaled democracy in trying to apply democracy to too many people under the same place. In other words, would we better off seeing more federalism, or maybe even further down to the local level, as Thomas Jefferson envisioned, down to the ward level?
I don’t think drones are going to be necessary because with the advent of everyone homeschooling now, all the public schools will be turned into Amazon distribution centers.
What about permissionless innovation in China. Would you say more of it goes on in China, but less evasive entrepreneurship?
Are you familiar with George Gilder? He’s been a guest on the show, and last time we had him on he had written an article, The Huawei Test. What were your thoughts on that article, in which he posits that yes, the Chinese government is a problem, but Huawei itself is really very much independent?
It is clearly a difficult situation, and we are also monitoring the situation in Hong Kong. There’s just a lot of things that are boiling, let’s hope all of our optimism remains true. You did mention you’re not a crypto-anarchist, what are your thoughts long-term on Bitcoin and blockchain, understanding they are two separate things obviously?
Last question. What about the application of these technologies with regard to voting? The big thing right now is this whole mail-in voting that everyone is up in arms about. But I want to vote on my phone, that’s what I want to do?

…and here are Ron’s questions:

Adam, I love how you say, “Economists, political scientists, and business theorists don’t usually agree on much, but to the extent that they share a consensus about anything, it is that technological innovation is widely considered the main source of economic progress.” What is your definition of innovation versus invention? Do you have the same distinction that Matt Ridley uses in his recent book, How Innovation Works?
You point out the pothole vigilantes as an example of free innovation, I just loved that. You say your most controversial claim is that technological change itself may become the most important check on government power going forward. What do you mean by that?
You go even further. Most of our listeners would be familiar with smartphones, cryptocurrencies, blockchain, drones, 3D printing. You have a specific definition for these things. You call them “technologies of resistance” and how they enable “technological civil disobedience.” Can you explain your thinking there?
You’re not an anarchist, you believe there’s a pragmatic approach to regulation.
You have another great term that I just love, “regulatory entrepreneurialism,” where policy change is part of their business model. And of course everybody instantly thinks of Uber, or Airbnb, and there’s probably a host of other examples as well.
It illustrates two other concepts that you define really well, which are the “pacing problem” and the “compliance paradox.” Can you explain those two?
Another distinction you make is between technologies born free and born captive. In one podcast you did, the interviewer asked you when we’ll drone burritos. I don’t care about that, Adam, but will we get supersonic planes?
Adam, another thing I learned from your book is that Benjamin Franklin had proposed that the Great Seal of the United States include the phrase “Rebellion to tyrants is obedience to God.” You also cite Charles Murray’s 2016 book, By the People: Rebuilding Liberty without Permission, where he advises to avoid or defy regulations. You don’t take that approach, but you also you point out—and this is hard to swallow for libertarians and conservatives—that the last time a federal agency has been abolished was in 1985 with the Civil Aeronautics Board, then the Interstate Commerce Commission in 1995. How would you reform the FDA today?
Another really uncomfortable thought in your book, which comes from Tyler Cowen who has also been a guest on the show, he pointed out that modern technology (especially transportation and communications networks) has greatly facilitated the growth of government in the 20th century. Is that inevitable though?
Adam, we have about a minute, would you reform Intellectual Property law, specifically patents?