PAT. Today on Flip the Switch we sit down with George Habib—an entrepreneur, business owner, professor, and more. He has lived in Beirut, Saudi Arabia, Dubai, Madrid, Washington DC, and many more places. We dive into this, and talk with him about the places in the world his career has taken him, his business philosophy, and get specific with him about the creation of some of his ventures let’s get into it.
00:56 AUSTIN. Welcome to Flip the Switch presented by Power Digital Marketing. This is episode number 52.
01:02 PAT. Number 52. That means we’ve been on the air for about one year now.
01:06 AUSTIN. One whole year. There’s fifty-two weeks in a year if my calculations are correct.
01:09 PAT. They’re correct.
01:10 AUSTIN. That would put us at a whole entire year of podcast recording and guests. Crazy, good guests.
01:16 PAT. Speaking of which, we have a super exciting interview for you guys today. We sit down with George Habib.
Really interesting guy. He’s lived all over the world. He started you know businesses in the private sector, in the government sector
01:28 AUSTIN. Yeah, if you enjoy traveling and business this is the ultimate collision of those two worlds. George has lived in some incredible places. I don’t want to spoil it but he’ll talk lots about the crazy stories he has from living in certain places and then kind of how that ventured into his philosophy as an entrepreneur and kind of just how he views businesses, how he acquires businesses, and how he makes them profitable.
So without further ado, let’s go ahead to George.
With us today we have George Habib, a current client here at power digital and a man of many facets. He’s an entrepreneur at heart. And also a professor in Madrid, Spain.
Thank you so much for coming on the show today, George.
02:10 GEORGE. Thanks for having us—or me.
02:12 AUSTIN. I’m happy to have Pat and Joe and John also so…
02:14 PAT. I’m happy to have all of you guys. So George, it’d be really cool if you could give us a quick background on just, kind of, who you are, where you come from, and what you’re all about.
02:23 GEORGE. Sure. I come from like a bit of a multicultural background. My dad’s Lebanese, my mom’s American. And I’ve kind of always been a bit of an expat. Kind of growing up overseas.
But I also went to university in Boston. And that was after being in in high school in Beirut where it was kind of a period of time where it was still kind of finding its feet. The war had ended, so I’d moved there at a weird time, but it taught me a lot about seeing a kind of whole market just reinvent itself again.
And after going to university in Boston, I studied marketing which was a very like nebulous topic. It was just this is one big thing that you study and I think that was the idea at the time. But my regret there was that didn’t go for something a little bit more kind of… Just very skills based. I should have just kicked my own ass and just decided to only study finance. But, you know, competing desires when you’re young.
And then after Boston, I was kind of—I guess I graduated 2004—so again the dot-com bubble was in around 2001, so everyone’s kind of still a little like what is going on here?
03:40 PAT. Little wary, little cautious maybe.
03:41 GEORGE. Exactly. And then I was like, okay. I’ve got a great plan. I’m gonna move to Dubai. I’m gonna work in a tax-free environment where basically as a fresh grad if you move overseas there’s this great tax law if you make anything over 90k you pay taxes on. Everything else is… Alright here’s my plan.
So I moved there with two other friends of mine from high school. I got a job with Showtime which were here in the states. It’s a production company mainly. Over there it was a satellite TV and distribution company. And it was an interesting job. Not very challenging, but it was something that gave me the opportunity to travel around. I was kind of opening up new markets for them and spending and losing their money on my mistakes. Which was a great way to learn, because as one guy told me once “better to make mistakes on somebody else’s dollar” so that’s what I was doing.
04:34 PAT. There you go.
04:35 GEORGE. But as much as I liked Dubai, and it’s a very interesting place and it’s kind of grown and bubbled up—it would be like spending four years in Vegas. Where you’re kind of like “I think I’m ready”
04:47 PAT. Yeah it’s just about time to take off.
04:48 AUSTIN. I can only imagine, but obviously the growth has been rapid there so it was probably pretty wild. When you were in Dubai was it skyscrapers being built within the day? Or what did it look like kind of the time period?
05:00 GEORGE. Well you know the Burj Khalifa?
05:02 AUSTIN. Yeah.
05:03 GEORGE. So I’m driving by it with a friend of mine. And, you know, he’s in advertising. He doesn’t know anything about engineering. He goes “it’s too thin at the top. I don’t know what they’re doing.”
And I was like “should we pull over and talk to the head engineer let him know your big advice? You’re not doing this correctly.
05:20 PAT. Trust me. I’m in advertising.
05:22 GEORGE. Yeah. Trust me, I know what I’m talking about. I’ve got a marketing degree.
05:26 AUSTIN. Yeah, he’s just trying to figure out if someone’s gonna see that at the top of that. It’s in the clouds, and if a sand storm comes, there’s no way.
05:31 PAT. Exactly.
05:32 GEORGE. But it was an interesting place, because, I mean, that’s a funny comment there was a guy in advertising who… Just weird things were happening. He decided he was gonna make the biggest ad in the world that could only be seen from airplanes. And he sold it… This ad space… For who knows how many millions of dollars.
And it’s just this insane, kind of… It was a really insane place. But at the same time it was this huge bubble in the making again. So here I am and I’m kind of watching this recession coming at me, but it’s also weird because you’re sitting there going “I should be buying an apartment.”
06:05 AUSTIN. Maybe if you could name one crazy thing you saw in Dubai. Now I’m just very curious.
06:13 GEORGE. That’s actually a good question. So they were… So my friend who was in advertising… A lot of these construction people would come to their offices. And they have just infinite amount of money. And there’s a lot of nepotism there, so you’ll have like whoever the CEO… Like his son is in the boardroom and he’s like 27. There’s multiple CEOs of companies who were like have no business doing what they’re doing.
06:33 PAT. Right.
06:34 GEORGE. And the way that they used to sell projects, like, tens of million… Hundred million dollar projects… Was they would sit around and they’d brainstorm and they would say “let’s make something called chess city. Where there’s 12 pieces—one sides all white pieces, all buildings. On the other sides all black buildings. They all face each other and it’s this chess city kind of place. And they go “that sounds cool.”
Then they spend a hundred grand on the architectural thing. They take it to a show, and if it sells, great. If not, throw it in the bin.
07:02 PAT. Seriously.
07:03 GEORGE. Yeah. And the craziest—so burning cash—the craziest thing I saw… The two craziest dumbass ideas I ever saw was—one was something called Asia, Asia. And it was the first floor will be the highest floor in the world because the first floor is like the 50th floor. So you just pull up to this massive elevator okay?
And then the other one was falcon towers. They love falcons. So it was just a building that looks like a huge bird.
07:33AUSTIN. What? Now that’s awesome.
07:34 GEORGE. Oh yeah
07:35 PAT. I’m not sure how that one got…
07:37 AUSTIN. I’m imagining they didn’t build that though.
07:38 GEORGE. No, no. And this was the funny thing—is everything went to absolute bonkers level—I mean at one point they were talking about iPod tower. Just this huge, white building.
07:46 AUSTIN. It’s no different than the four of us, five of us sitting here coming up with something crazy right now. What if we just built a giant coffee cup?
07:55 GEORGE. Yeah. Coffee city
07:57 PAT. Coffee city. Exactly.
07:59 GEORGE. But they’d also erect these massive billboards of what this will look like in ten years and what’s interesting now is that, you know, some of these projects make it through. So they’re building the second version of their tallest building in the world now.
08:12 AUSTIN. Yeah.
08:13 GEORGE. So you know… You gotta give them an A for ingenuity?
08:19 AUSTIN: I mean they do get creative with how they use their money. And they clearly have a lot of it.
So yeah. Oh man. That’s unbelievable.
Yeah I think just kind of transitioning out of that… And I guess one thing that just caught my attention is your ability to take a chance. Or just go with kind of your instinct. Is that something that you’ve always had? And obviously that’s a great entrepreneurial trait.
But yeah, can you talk us through a little bit? Like is there any fear associated with kind of the move you make?
08:43 GEORGE. I mean, I think if there’s one thing I’m really good at it’s change. I just recently moved to San Diego and everybody was like “oh my god like you’re just packing everything up and just leaving Beirut? Just like that?
And I’m like “yeah, I’m just putting it into container and I’ll see it on the other side of the world. What’s the big deal?”
But that comes from kind of always moving a lot as a kid. I was born in Saudi Arabia. That’s not like home or any place that anybody should live because it sucks there.
But then when I was six I moved to California. After California, moved to DC. When I was in DC, I think I went to like three or four different schools just cause the nuns at my catholic school were caught embezzling some money. So that got shut down. So public school then it was on junior high.
Then I went to another catholic school for a year. Then my dad’s like “let’s move to Beirut” I was like “are you sure?”
So I got really good at change. And it doesn’t bother me so much.
09:41 AUSTIN. Uh-huh. Clearly that’s a wild story. Nuns embezzling? I mean that’s… Talk about two extremely different worlds colliding there.
09:50 PAT. Yeah. Not a sentence I thought I’d hear on the podcast, for sure.
09:52 GEORGE. It didn’t surprise me. They were pretty mean.
09:54 PAT. Really? Well there you go.
09:56 AUSTIN. You’re like, “I knew the whole time.”
09:57 PAT. He was the one that told them.
So just kind of speaking about that even now, you still split your time between three different places right? You have San Diego, the east coast and, Madrid, Spain. What does that look like? Like, what are you doing in these locations?
10:10 GEORGE. So I mean it is a little bit difficult. I’m always trying to play the time zones, because for a while it was I was living in Beirut. I’d wake up super early in the morning Afghanistan would be two and a half hours ahead so I’d like check in with them and like you know see what’s going on. Probably work for like two, three hours—from like 6:00 to call it ten or whatever… Or 7:00 to 10:00.
And then take this nice little piece of time in the middle of the day to like do whatever I wanted to do. And then kind of come back as DC was waking up and kind of like, you know, see what was going on with them. And then kind of be done by dinner.
So that was the best time zone to be in yeah. Right now I’m on a pretty awful time because DC wakes up… we do these eight o’clock in the morning business development discussions every Monday. So that means I gotta be up at like 5:00 over here. So that’s a bit of a brutal Monday. But I’ve gotten better at like saying, “I’m just not going to be involved in this anymore”
I’m not client-facing. I don’t know how to get new contracts for SayR, which is the government contracting company, so I’m not going to be involved in that.
And it is a little bit of a personal wrestling match with feeling like you should be doing something, but then asking yourself well you know do I really need to be doing this? Am I even the best person to be doing this?
11:37 PAT. Yeah and I definitely have found just in like reading and getting the chance to interview other individuals that are successful on our show, that’s definitely a trait that a lot of them share. Right? The ability to say no. The knowledge of when to remove themselves from a situation that’s not going to benefit them?
I guess could you kind of speak to how you learn to perfect that trait? Because I think for a lot of people—like you kind of said—there’s always that guilt. There’s always knowing like “oh I could be doing this, or I could be doing this.” like, at what point did you disassociate from that just kind of go with it, if that makes sense?
12:10 GEORGE. Well I have a natural ability to not do things. So that was a big help. It doesn’t mean the guilt goes away. It’s those nuns. They’re still in my head.
12:21 PAT. Going back to the nuns.
12:21 AUSTIN. And for them, they’re probably still remembering that they embezzled, so… A lot of guilt there too.
12:30 GEORGE. Yeah, but, you know, the guilt really comes from when I know… Because I’m not good at staying on top of my inbox. I’m not good at really being the super-responsive person. My business partner is extremely responsive. He’s like sleeping with his phone in his hand
12:49 PAT. And which business is this?
12:51 GEORGE. This is the government contracting business, that started in Afghanistan.
12:55 PAT. Okay, if you could give us just a really quick background on that.
12:56 GEORGE. So I’ll just take it even a step back, which was I leave Dubai. I go to, you know… I get to a point where I’m like getting a bit disillusioned with everything.
I’m also kind of cheap so that’s goods I saved a lot of money while I was there. And, you know, I had all these friends that were like at nightclubs every single night and driving the latest car and then when this crash happened it was literally seeing these Ferraris just gather dust in the airport.
So I remember packing up and leaving and just being at the airport all these people who had just lost all kinds of… Who were just in trouble basically. Way overextended. And I was so happy I was leaving at that point, because I wanted to be in a city that had something other than just like money pumping through it.
And Madrid is a city that’s super-vibrant, people love music, they love to drink, they somehow drink way more than us and live way longer because they’re just not very stressed. It’s a nice… It’s a beautiful country, Spain.
And I have a house there I go back a lot. But that year was great, because it separated me from all of this anxiety of the working world, while everybody was wondering… I remember I was trying to sell my car in Dubai, and the guy who bought it was like came in the afternoon and said like “I can’t afford it. I just lost my job.” That’s how quick things were changing.
And so I had this beautiful year in Madrid kind of meeting new friends. Getting time to think about what am I good at?
And then we did this like entrepreneurship class where you have to put together a business plan and our business planted up getting like fourth place or something. But I thought at the time, “oh maybe I should pursue this.”
Because the only people I was getting interviews with were AstraZeneca was one of them—the pharmaceutical company.
14:42 PAT. Okay.
14:43 GEORGE. I just remember thinking “god this would suck getting this job” right? 14:48 AUSTIN. I think you’ve got too much personality for a pharma.
14:50 GEORGE. Also I called a doctor uncle and he was like “people don’t want to talk to you. They want to talk to like a beautiful saleswoman.” I was like, “that makes sense.”
So I had this one professor, and I said you know my business plan was to move to Nigeria and raise private equity money to get better returns during this post financial crisis. And it would be this kind of bridge between what is typically known as the most corrupt—like, don’t invest any money. This Nigerian prince is writing me.”
But I had all these great projects that I knew about that had really good returns. So you could invest in a school. Or invest in a shopping center. And you would get excellent returns, because—as I kind of found—where there’s a lot of risk, there’s a lot of reward. Especially in these emerging markets.
But that didn’t end up transpiring. My kind of group of friends all really needed to like hunker down and say “I’m having a kid. I’m getting married. I need like a job today.”
So I was kind of left by myself and I decided to put together this website called Gecko innovations, which is so embarrassing. And it was basically me trying to find entrepreneurs or business owners and help them kind of put an engine on their business. And what I found that I ended up doing the most of was helping them value their business to bring in more capital. And I kind of did like several business plans for people.
And I was talking at the time—and then it kind of evolved into “I’d like to find a partner to work with” which is super-important to have. And at the time I was interviewing a guy who wanted to start a cookie company, a wedding planning company, somebody who wanted to build like an event hall, and my little sister—who at the time worked for the wall street journal. Was living in Afghanistan. She goes “there’s this guy here who wants to start a telecom company.”
And I thought, out of those four like he’s the least likely like where does this guy yeah he’s gonna get a billion dollars?
16:48 PAT. Right exactly.
16:49 GEORGE. So I call him up, and I find out that through… The wires got crossed and it’s not a telecom company. It’s a communication company. And I speak to this guy named Scott—my business partner—and we kind of have this like funny conversation where he’s off in this country I know nothing about. I’m in Beirut kind of pretending to be this venture capitalist, out of the cafe. And he’s super-critical so I show my website and in his head he was like “god, that’s ugly and terrible.” which he only told me later.
But what I was able to do was connect with him and build his business model in excel. Which is not even my strong suit. But luckily I had picked up some these skills at business school and he felt like “okay, great. Like this is somebody who has a parallel skill—a different skill that I don’t have.”
17:38 PAT. Right almost a complementary skill set.
17:40 GEORGE. Yeah, I know the business side or the finance side, and he knows this world of government contracting. Which at the time I had never even heard of. And he said “hey would you like to come out to Afghanistan?” and I said “sure.”
So I basically booked a flight and by this book called selling to government and I read it on the way to Afghanistan. And I’m like highlighting it, annotating it, and I show up with what on the outside probably looks like this amazing level of preparedness, and knowledge, and depth on how we’re gonna make this thing explode. And really I didn’t… I had a book.
And the book had two things that I remember—one was “where there’s madness there’s margin.” that was a line that always stuck out in my head. And I was like “well. This country’s definitely mad at the time. So there should be some good margin.
And then the second thing he said was “if the us government is your client that’s better and bigger than having Walmart as your client.” and I thought, that makes a lot of sense.
So we meet these three French guys who are trying to sell their business and I thought this is gonna be a slam dunk. We’re gonna basically negotiate this in a matter of weeks. It took nine months to get this whole thing wrapped up.
Luckily during that time… Well during that time they raised the price on me like four times to buy this thing… So I keep going back to investors. I lose an investor here. I lost probably two or three investors during the time of raising capital. And I was able to use some of the savings that I had generated from my time being at Chiba in Dubai. And also I tapped into… My family in Lebanon has some land, but it’s like land is the most non-cash producing asset you can have. And it’s very liquid. So what do you do with it?
so I took it to the bank and I was like so I can mortgage this and I felt—you know my dad probably feels differently about it, cause he’s a more emotionally attached to it—sure if I like lose this piece of land, like, it’s not the biggest deal in the world. But it’ll be okay. And I was hedging my bets, because at the time of the purchase, I knew that with the contracts they had in hand I could cover 78% of the debt.
So I was like, “all right. Like this just means that I’m on the hook for this kind of balance.” but it also put a very weird situation in play which was I couldn’t do this business without Scott and he only had a limited amount of cash and he was mortgaging an apartment that he had purchased so that he could raise his funding. But he also could only raise so much and we’re spending way more than we’d ever imagined to. Cause the price went from basically it was probably under half a million to… It was 1.6 and change. And that’s the explosion that happened.
So in this process of convincing everybody, which is really difficult to say “I’ve got this great investment in Afghanistan” and they’re “like do you have can? This is where you’re going?”
20:37 PAT. You sure about that?
20:39 GEORGE. Yeah. And at the time you got to remember all my friends are going to New York. They’re going to London. They’re taking jobs in like established cities.
20:46 PAT. Metropolitan areas, right?
20:47 GEORGE. Right. So they’re looking at me like “what the hell are you doing?” and at the time I was also kind of thinking that. But nine months go by. I negotiating those contracts over and over and over again with these guys. And finally we close 9 months later.
And this whole new world opens up for me. Which is, I’ve got 40 employees. We’re in a very dangerous conflict zone. We had one French girl working for us at the time, so like just a small number of expats.
And we’re in this weird city where at night you go to the UN and party under their tent with laser lights and stuff. And then during the day you’re basically… And the British ambassador is rolling around on the floor drinking beers, and just like this insane environment where it’s journalists, and politicians, and contractors, and military people.
And we start bidding on programs. And the first big program we won was a counter-narcotics program.
21:41 PAT. Okay, interesting and how has that evolved into any of your current businesses now? So that counter-narcotics program—we talked a little bit about it off the air—but what does that look like today?
21:50 GEORGE. So we do a lot of work for the state department. We do a lot of work for, you know… Some of our clients are the World Bank, the United Nations is a big client of ours and they all have development goals. And this is a really unknown, kind of strange area that people don’t really think about.
22:08 PAT. Yeah. Kind of niche.
22:09 GEORGE. Very niche. And much to my benefit because you have this extremely niche environment, where you have a smaller number of competitors. There’s still a lot of huge competitors. One of you know one of the hugest players in the industry—I think their annual revenue is like eight billion dollars a year.
So you’ve got these people just taking like insane amounts of money to complete these projects. But we had this really great kind of culture of really having a very strong local team. And then a few of us internationals that kind of gave this kind of, let’s say, international polish to our products. Which were reports, or TV products, or radio products. Much like you know, the “just say no” kind of campaigns
23:04 PAT. Dare.
23:05 GEORGE. Dare. Yeah, yeah. And then these people that really understood what was going on the ground. And that helped us evolve, because every other place that we’ve opened since—and we’re now in nine countries—has developed over that same thing. Of finding somebody really good locally. Knowing that they’re much smarter than you. You’re never gonna know the intricacies of that place, but knowing that you’ve got something to bring it to the table. And as a team you really are much more powerful together.
23:34 PAT. Right. That’s kind of interesting. And so you’ve worked in the private sector and you’ve also worked as a government contractor, essentially. What has been the starkest difference between those two industries? Because just in hearing about kind of the dynamic of it, it sounds more that the private sector there could be a lot of different competitors. Whereas in government contracting, there’s maybe two, or three, or four very, very big, very wealthy players. I’d imagine the barrier to entry in that industry is a little bit bigger than it would be in some of your private ventures. Is that right?
24:04 GEORGE. It is and it isn’t. It’s a much more… You start small, and you build yourself over years. You prove yourself.
The problem in that sector is you don’t always have the same client. Because you know embassy officials will change. It’ll be a new administration. Like we’re seeing now.
It’ll be a different view on what works versus what doesn’t work.
And as those changes happen, you have to be nimble enough and structured well enough to say like “if we go through a little bit of a drought now, how are we gonna get to the next contract that we win? If we’re not doing well with the US embassy because the administration has changed, can we go to the EU? Because they might be the ones that are you know suffering the most from the refugee issues at the minute.
So it’s… What I like about it is it’s extremely macro- from the point of view of what’s going on in the world. And then where are there issues and do we know how to address them and do we have the right networks of people in those countries that can help us really deliver programs that actually do make a change?
Because while something like “don’t do drugs” or “just say no” might sound a bit hokey on the outset, we also do a lot of things that are very you know they are very impactful.
25:26 PAT. Yes. Let’s talk about some of those really quickly, because again those are a few things we talked about off the air. What does that dynamic of the company look like?
25:32 GEORGE. So I mean one of the programs that we did in Lebanon, for example, was looking… And on the outside, it’s super-boring, you know. We’re looking at the value chain analysis of farmers in Lebanon and how can we help them make more money per kilo of fruits. But that is a huge benefit to the end-user if you’re showing this thickening margin for them. Because all of a sudden they’re saying like “oh I didn’t realize that I could do better this way.”
And, you know, for me as much as all of this… And to the private sector would see like touchy-feely, women’s access to education, those things do have a huge impact. But they also, when you see what massive benefit it has, you do feel like you’re doing something that is kind of worthwhile.
26:24 AUSTIN. And just kind of breaking that all apart and looking at it high-level… We’ve gone pretty deep into the business. Your entrepreneurial philosophy and kind of just the way you operate is you know you look for opportunity and you seize it. It’s not necessarily like it’s a specific business that maybe you’re in love with. But you just know that opportunity.
Can you talk us through a little bit of just how your mind finds either an opportunity and then knows it’s a good one? Or, kind of, what’s your idea behind making a business function well?
26:52 GEORGE. Yeah. Well there’s a lot of business rhetoric in the world. And I grew up reading a lot of those same books that probably a lot of you guys read as well. And it was always, you know, “what’s your passion? And really find the thing that you’re passionate about.”
And I’m for better or worse somebody who’s not super-passionate about what I do. But this helped me in this respect, because I looked at it more analytically and said “oh, this is a good business” and that’s actually what I’m passionate about. The business side of things.
So my philosophy basically is that I probably am not the best person in the room for any of the businesses that I’m involved in.
What I think I am good at is creating the kind of environment where people feel like it’s their business, not really my business. And part of that philosophy in action has always been that the best way for me to get a return on time—which is much more valuable to me than like a return on investment—especially after I’ve paid down an acquisition. Is to fork over a little bit of that profit sharing back to the people that are treating that business like it’s their own.
And it’s a really small price to pay. Because one, I’ve noticed, is that people see that as… I don’t know… You get your bang for your buck that you give, you get for giving over some of your profit sharing rights to one of the senior managers in a business is you know you get much more back from them on the amount of work that they do. The company’s a lot healthier in terms of its morale. You’ve got somebody who’s looking out for your interests, without you having to be there all the time.
And from that I’ve been able to separate myself a little bit from some of the businesses. Especially that business where personally for me it doesn’t work for me to live in Afghanistan anymore. I don’t want to be there anymore. But I’ve got a guy that I very much trust who lives there and who is afghan and who looks out for my best interests while I’m away.
And right now being in Kenya and in Colombia like… I can’t be everywhere so… That’s been my philosophy really.
29:08 AUSTIN. And then just tying this all back to… you’re also San Diego business owner. And remodel works is a San Diego based company. That was I believe in acquisition you did in the last couple years is that?
29:19 GEORGE. Almost a year to the day.
29:20 AUSTIN. Awesome. Yeah, and they’re a fantastic staple in the community. And what’s kind of the long-term goal of the business or anything maybe on the horizon for them?
29:30 GEORGE. So this is a 35 year-old business. It was started by Joe Christensen—who’s a very on top of it construction guy. Probably a little old school, but you know back then that’s definitely what worked. You know, he started this business in 1984… Or sorry 1986… And he’s basically been… You know, he built up a very robust business that does something that on the outside doesn’t look super-interesting, but it’s a staple good that everyone needs in San Diego and in California it’s extremely needed.
Which is there’s a lack of housing supply. There are very expensive homes. For people our age the idea of moving into a brand-new piece of construction, you’re going to be in the $600 a square foot range. If you want to remodel your home you’re gonna be in the may be 100 and the dry areas to, you know, 300 in the wet areas, if you want to update your bathrooms or kitchens. Or if you want to build a home addition.
So it’s very… It’s got what you know a lot of industry leaders will call product market fit. And that to me was what drove me to buy the business. But also the team that was there. The analytics that they have on everything from cost accounting to the number of job hours that were spent… Like, you would have never gotten me to delve into cost accounting during my MBA. I would have thought “this is so boring. I never want to do this.” and I remembered not even being very good at it, but just really pushing myself.
And now it’s really annoying cause that’s like pretty much all I do nice a lot of cost accounting 31:10 AUSTIN. Yeah. You’re reminding me of—we have another guest Matthew Garrett who comes on in he owns an accounting firm—and he was actually telling a very similar story where when he was younger, that didn’t fascinate him. He’s like “I don’t care about this.”
And then he realized when he wanted to get into acquisitions and selling a business, that he didn’t know anything about the numbers right? And the first time he sold that business he totally screwed it up right? He priced it wrong, and just didn’t have everything under control operationally. So it drove him to learn that, and now of course it’s his entire business.
He helps businesses understand their numbers. And it is really important as a business owner to know that and without diving into it and I can imagine it’s got to look like gibberish at first and then…
From a computational perspective how long did it take you, or kind of how do you feel about, you know, numbers and your competency of reading your books and kind of analyzing?
32:00 GEORGE. So I mean I was terrible at math growing up yeah you know a product of moving around a lot was that I was always changing curriculums. And maybe I can put a bit more blame on that than I should, but I’ll do it anyway.
And so I sucked at math. I was always super nervous about math. I was not a confident person in finance. But the nice thing is that everything that you learn in school… Most of the things you learn in school are going to be for very extreme circumstances that you’re not gonna use all the time. At the end of the day what I really needed to learn was how to put together a cash flow forecast. How to like look at a balance sheet—and the only way I learned that was by rebuilding other ones. And in a very boring way just saying “okay, that number’s here, that numbers here. Wait. How do these two numbers equal that number there?”
And then going through and just redoing it a few times—”this is not that hard, I can do this.” and if it looks… My business partner sees numbers and it’s just he doesn’t even want to keep won’t even open the email. Just give me the summary.
But you know… My sister is very similar, and she’s a real estate agent. And I said “well listen like if you just take this that you want to understand and rebuild it four times, you’ll learn it.”
33:18 PAT. Yeah a little repetition will definitely help with the understanding.
33:20 GEORGE. And, you know, you learned by doing it so…
33:23 PAT. One last question that I have for you. You’re clearly somebody that has experienced a ton in their life. You’ve traveled a bunch of different places around the world. Had a bunch of different ventures. What do you think is the biggest business lesson that you’ve learned, you know, in your time here so far?
33:39 GEORGE. Well, right now… And this has been my mantra for a while… Is that you know every generation has their opportunity. Whatever it’s gonna be. Investment Banking was the huge opportunity of the early 2000s, and everybody made tons of money in that. And it was just kind of hand over fist.
A few years before it was if you’re an oil and gas cause the price of oil was shooting through the roof. Right now for me… And I guess this partially answers the questions… Developing your own philosophy for what is going to be the theme for your career is… It really helps you kind of narrow your focus a little bit.
So right now my focus is that I believe our generational opportunity is that 30% of the US economy is based on small, medium enterprises. A hundred thousand businesses per year come up for sale that make between 300,000 to 5 million in EBITDA—so net income… Or before tax.
And there’s a great opportunity for us to kind of acquire these businesses at between three to five times earnings or profits and basically through a combination of, you know, personal finances, raising equity and taking on some debt, you can get a great turn on investment on a very well proven product. And so that’s my kind of philosophy going forward. So, you know, over the next few years I’ll be kind of stepping back from remodel works as I feel that I’ve gotten the company to where I want it to be in all I’ll be seeking more return on time rather than return on investment.
And I’ll have to fork over some of my ownership to incentivize those people. But what I’ll be looking for in the meantime will be similar businesses or not similar businesses I always say that my dream business is a parking lot with an automated teller at the front. Like that’s it, right? You’re good.
35:49 PAT. That’s awesome.
35:50 AUSTIN: I love that. All right, George Habib, thank you so much for coming on the show. We really enjoyed your time
35:53 GEORGE. Thanks so much for having me. It’s been good to see you guys.
35:58 PAT. Wow. Super-cool interview.
36:01 GEORGE. I have my mind blown with jealousy because of all the places he’s traveled and gets to live. John’s laughing at me right there for that one.
But seriously, really impressive individual and I’m envious of his ability to pick up and start something new. And you know typically there’s a lot of fear involved with that. I know I feel that a lot if there’s any sort of change on the horizon.
And he just goes headfirst into that. And continues to look for that opportunity. So George, if you’re listening to this right now, I am very impressed with you.
36:31 PAT. Yeah, I think the biggest takeaway that I had to—and we didn’t dive into it that much—he glossed over it a little bit, but was like the time management piece. I mean, that guy’s operating in like two or three different time zones at a time. Making sure that he’s getting everything done that he needs to. Saying no where he needs to. Like, those are cognitive skills and process skills that the most successful people have. And I think that speaks volumes to his abilities. That he knows how to balance his time in such a way.
Like, just a genuinely impressive guy. Really, really cool. Just a great interview I’m super happy with it.
37:00 AUSTIN. Definitely embodies the spirit of entrepreneurship.
37:04 PAT. Absolutely.
All right you guys. That just about wraps everything up for us here on Flip the Switch Podcast presented by Power Digital. Thank you again for tuning in.
Join our forum. We have a private forum page on Facebook called fliptheswitchpodcast forum. Austin Mahaffy will add you this second that you add us. We share great content, interview topics and stuff like that. But until next time this has been Pat Kriedler, Austin Mahaffy, John Saunders and Joe Hollerup, signing off.