Episode Transcript
[00:00:00] Speaker A: Foreign.
[00:00:12] Speaker B: Welcome to the Victory Podcast.
[00:00:18] Speaker A: Hey Victors. Welcome to this episode of the Victory Show. If this is the first time you're joining us, I'm Rachel League with Bestseller by Design. Our our founder, Travis Cody is the best selling author of 16 books and we've had the privilege of helping hundreds of business consultants, founders and entrepreneurs write and publish their own best selling books as well. Through that journey, we've discovered a fascinating pattern. Those businesses really struggle to break past the seven figure revenue mark. On this show, I sit down with some of the world's most successful CEOs, leaders and business owners to uncover the strategies they used to scale way past that mark so you can do the same. So get ready for some deep insights and actionable takeaways that you can implement in your life and business. Starting now.
Today's guest is Chuck Arnold, a prolific entrepreneur, investor and advisor with decades of experience in new venture development. Chuck has played a hands on role in launching more than 150 businesses working across industries as diverse as renewable energy, medical technology, aviation, food distribution, media and more. He's been involved in funding over a billion dollars of capital, co founded the Professional Business Brokers of America and was behind RAM Electronics, one of the first global VCR and video distribution companies. He later founded and operated a national food, manufacturing and distribution business, published two influential investor newsletters, and hosted national conferences on politics and economics. Chuck also acquired and ran the Business Radio Network and has been featured in outlets like the Wall Street Journal and Bloomberg Today. His focus remains on identifying game changing innovation, strengthening management teams and building companies through strategic partnership.
Chuck, welcome to the show.
[00:01:54] Speaker B: Pleasure to be here. Thank you, Rachel.
[00:01:56] Speaker A: So you've been involved in the business world for many years now. Tell us what first pulled you into venture development.
[00:02:02] Speaker B: You know, I came from a family where my father was a physician and as much as I tried to be like him and handle the medical processes, I was always drawn to business.
So through my career I've been involved with financing and applying a lot of medical projects. But I've steered more to the business side and I find it fascinating. Business fascinates me.
[00:02:27] Speaker A: What is it about business that fascinates you?
[00:02:29] Speaker B: Business creates energy and energy creates excitement. And when you look at business, especially the developmental of business, it's like going on a tour. It's like going on some magical tour to find and seek things out. And to me, creating businesses has always been an exciting journey journey for me.
[00:02:53] Speaker A: And tell me a little bit about the process of discovering a problem that you were excited about solving.
[00:02:58] Speaker B: Well, in the beginning, when I was much younger, I had found a particular market that was brand new. This is the early 70s and at the time, video games had just started a new company started by a gentleman that formed two companies. He failed at both, but both companies went on to be billion dollar companies. One of them was called Atari, started by Nolan Bushnell.
[00:03:23] Speaker A: Ever heard of it? A little company?
[00:03:24] Speaker B: Well, when he started it, he had developed a game named Pong. We came in with a group of investors and put a coin mechanism on that. And that was probably one of my first business opportunities on a national scale. We would put people in business, owning this equipment and putting them in high traffic locations like the Hyatt Regency to other locations. And I found it fascinating. But I also found early on in life that businesses are never successes or failures. People are. And you can put the same two people in the same opportunity. One will make it and the other one will have excuses. So it was an exciting time back.
[00:04:04] Speaker A: That's incredible. Tell me a little bit more about this people piece. And what do you think has led to your success and what have you seen others in the ventures that you've worked with do that really? I know you mentioned it's the doers, not the dreamers, it sounds like are the ones who make it. But how did. What makes them different? How do they actually do that?
[00:04:24] Speaker B: You know, a lot of people will tell you the problems. This is wrong and this is wrong and this is. But it's. And it's really not an intelligent quotient. It's just a factor of someone that's determined to find the solutions than to identify the problems. And that really is what separates successful people from people that can identify the problems, maybe even identify them better than the successful people. But they're not going to be as successful because they're identifying the problems instead of working on the solutions. I guess one good definition of a successful business person, man or woman, is a person with a plan B. A lot of times plan A doesn't work out.
[00:05:08] Speaker A: When have you had to move on to plan B and when did you know that plan A wasn't working? When do you cut your losses?
[00:05:15] Speaker B: You know you need to look at a plan B because everything changes. It's a transition. And it's like looking at a business plan. I've never seen a business plan that I didn't like, but maybe 1 out of 10, 1 out of 20 actually work. And it's the application of starting the business, seeing what's working more efficiently than others and being Able to change and transition without feeling a hurt to your ego. Something that your original plan was changed and it's. And it's something that's disappointing you. So you have to, you have to be a little bit open to ideas, you have to be a little bit open to change and you have to be open that we're all wrong. Every time you look at something and you don't think that you can be wrong, that's one of the first mistakes.
[00:06:04] Speaker A: Yes, it makes me think of this concept of coachability and how important it is to be able to take advice from others and that you don't have to apply all of it, but it's important to be able to keep an open mind. When is a time that either you have been coached and you've seen a tangible positive impact or that you've helped coach others that have been open minded and it's really helped.
[00:06:28] Speaker B: Well, that's a good point. You know, we always hear the stories of the person that started out and they struggled and they made it work. But for every one of those that took that one determined idea in the beginning and saw it through, there are thousands of entrepreneurs that modified their plan. And for myself, I've never been in a plan where modification wasn't necessary, whether it was a product or a service or even a group of individuals. So I think that every opportunity requires constant redevelopment until you have an efficient machine that is making money and being successful in the products or services that they provide.
[00:07:13] Speaker A: And what does the process look like for identifying when a change is needed and how to go about making that change in an effective way?
[00:07:22] Speaker B: If you see something in a business or a service that is a weak area, instead of trying to continue on that weak area and work on that, look at alternatives. A good example is for me to look at any kind of project or service. I look at four fundamental items and pricing, quality and image. Is there a demand for your product or service or do you have to create that demand? And there's a big chasm between the two. If I have to create a demand versus taking advantage of demand, it's a big, big difference. And you have to be prepared for those two exciting opportunities. Pricing is something that you have to identify. Is your product or service priced competitively? Is it too high, is it too low? You have to price it. Then the quality of your product or service has got to be where you can sustain it in the marketplace. Because once someone tries your product or service, if it's not that good, they're not going to come Back you get that one shot, and then of course, the last thing is image. What kind of image is around your product or service? Is it something that people will identify when you're looking at that? And there are so many examples of image or branding out there, because branded or image businesses usually do up to four times a non branded or non image product. Few examples. Do you copy something or do you Xerox something? Xerox a brand name. But when we think about it, we. We think of Xeroxing as an application, and it's not. Do you blow your nose with the tissue or a Kleenex? Kleenex is a brand name. It's really a tissue. So these are some of the things that you have to look at. Those four things I look at as fundamentals when I review a new business venture.
[00:09:19] Speaker A: And you've worked on both the investing side and the operating side. Which do you like more?
[00:09:25] Speaker B: Well, the easiest side is the investing side. The operating side is. Is filled with so many difficulties that you're dealing with personalities. You know, without people, businesses run easier. You're dealing with personalities. You're dealing with market issues. You're dealing with capital restraints in many times. So investing, frankly, is a much easier process than operating.
[00:09:49] Speaker A: And do you prefer investing than over operating because it's more streamlined?
[00:09:54] Speaker B: You know, I'm. I'm getting on in age now. I've done both for many years, but I'm. I'm now about 74. I'm operating a couple of operations right now, but I'm getting to the stage where investing sure seems a lot easier. I can criticize from the side instead of having to implement it, because when you're operating, you have to take everyone's advice. And when you're investing, all you have to do is give advice and make decisions.
[00:10:21] Speaker A: That is a great call out. Tell us a little bit about some of the ventures that you're currently working on.
[00:10:27] Speaker B: One of them is in the health and wellness business. The older you get, the more concerns you get about life and how long we have on this planet, the quality of life that we're here. About five years ago, we were looking at the stem cell business and we had been introduced to a doctor and Palm Beach, Florida, named Dr. Burton Feinerman. He had 11 patents in STEM cell therapy. And we got very excited. I didn't really understand what stem cells were before that, but when I found out that these were the worker bees that actually reconstructed and repaired the body, we had agreed to finance Dr. Feinerman in opening up a clinic. We Signed an agreement in the third quarter of 2017.
And unfortunately, by the end of the year 2017, Dr. Feinerman had passed away. Our group of investors had now spent a lot of time looking at the stem cell business. And someone directed us to a company that was in the bankruptcy court in Fort Lauderdale, Florida. There was a company in there called Stemtech, S T E M T E C H and stemtech was in the stem cell business. I didn't understand it at the time, but I do now.
So I was the one that had been suggested to go out and review and do the due diligence. And what I found out is unlike Dr. Feinerman's, which were a therapy, a medical process where you took an injection either of stem cells from another corpus or an umbilical cord, which there's, you know, some controversy on those issues, Stem tech was completely different. It was a all natural plant based product. And what stem tech did was it released your own stem cells, bone marrow and circulate them through your body. And a master cell became a liver cell or a kidney cell, or a heart cell, or a muscle cell and repaired your own body.
In looking into this, I found out the company had been in business since 2005, been written up in INK magazine four separate times as one of the fastest growing companies in America. And then I wanted to know why I had this opportunity. Because the company had already done about $600 million in revenue and here they were in bankruptcy court. So I reviewed it and understood that there was a partnership breakup. I looked at the partners, I found out that one was a young scientist that got all the accolades. The other was an older gentleman that put up the capital and it just became a personality thing. And at the height of their business growing, they ended up with a lawsuit. And the lawsuit was not for a product problem, it wasn't even for a business problem. It was the unforesight of the management to understand them. When they negotiated the original agreement with the photographer, they had paid for a one time use of $800 for a one time use of a picture for the front of the brochure. And instead of working something out with a photographer, every one of their distributors, they had about 200,000 at the time, used the same picture. Well, during the fight of the management, the photographer took the company to court, received a judgment of $1.6 million and the company was in bankruptcy. Not a problem with the product, never had a recall on the product and not really a problem on the business itself. It was the management and you know, As I said earlier, businesses are never successes or failures. People are. So I got my investors together, we tried to negotiate with the courts. We couldn't get any further because of the fight going on with the management.
So I ended up going out and buying the senior secured note from the bank that had the senior position. We then bought the company through chapter seven about a year later. As an investor giving advice and telling them what they were doing wrong, we realized a very hard lesson. You can't expect somebody to fix something that broke it in the first place. So I've stepped in, I've reorganized the company. I originally was just an investor and now we're ready to take that company onto prime time. And it's a great product. Everyone should take it. When you hit about 40 years of age, your body stops releasing your own stem cells. And that's why we age and that's why we have our, our organs and body breakdown. This product is an all natural patented product that can go out and solve those things and instead of for the classes, the products for the masses, so the average person can afford to have these products take it like a multivitamin every day and have a better quality of life. Today, the largest growing area of growth in the world is India. The largest area of development from an industry is health and wellness. I hope that gives you a good example.
[00:15:22] Speaker A: Absolutely. And so interesting to see how you got pulled in from the investing side to the operating side. They must have really trusted that the advice that you were providing was in the right direction. And as you spent your first hundred days on the job as CEO, what did that look like? What were your priorities in turning around the company and helping it scale?
[00:15:43] Speaker B: Well, one of the first things that you have to look at is this company was in Vietnam fighting bankruptcy, dealing with people. The culture. You really have to look at the culture of the management and the employees of a company. If you don't have the right culture, it never works. So the first thing that I try to do is develop a much more positive culture. A can do culture. What you're doing is right culture and that's important. The second thing that you have to do is, is align the cost factors. How are you going to run the company? What's the sga? What's your expenses? How do you make that fit with the cost of goods or the cost of your services and what the marketplace is going to pay? Because if you're looking at a simple price of the raw ingredients of the service and you're not taking into consideration any of the other expenses or requirements to run that business. Sometimes you're going to get cost short.
[00:16:39] Speaker A: So culture and costs, two very different but very important pieces of the business. Tell me how you tackled each of those and what does it mean, particularly on the culture side. I think people will understand this idea of cost reduction, cost alignment. But the culture piece, I think because it can sometimes feel more intangible, tends to be tricky and particularly for cross border, there are cultural differences. So how did you think about creating that positive environment that you spoke about?
[00:17:08] Speaker B: The psychology of the key management is important and the reaction of what you do is very important. If you as a principal are not willing to do some of the menial things, from sweeping the floor, washing a window, to actually reviewing a document that is below your pay grade, this is something that people look at. It's like children watching their parents and parents saying as I do or do as I say, not as I do. So it really is. You have to lead by example and you have to come in with the positive can do attitude to work with the key people in your business to understand that they're important, but they have to come up with solutions that work and that's the opportunity. There isn't any room for a negative point of staying in that negative point because if you're there, it's going to affect the way you work, it's going to affect the way that you deal with people. And communication happens more than just verbally. Communication is everything from your body language to the attitude that you've got to the things that you do.
[00:18:20] Speaker A: Tell me how many people are in the business and I think I heard you say they are all based in Vietnam. So I assume you're managing remotely. How do you, how have you tangibly implemented that culture and shown people that you're willing to do work at all levels from more of a remote position?
[00:18:38] Speaker B: Growing up, the Vietnam War was going on. I use that as an example. So it's not that the company based in Vietnam, but his mental state was in war. They were defensive and everything. The particular company had a variety of offices all over the world. We've closed several to reorganize it.
Tech has offices in Taiwan, Canada, Ecuador, Mexico and the United States. But it's a global product and eventually this will be globally. We establish meetings, communications, important.
You delegate authority so that certain people take on responsibilities, whether it be in production or operations or fulfillment. And once you give these people that responsibility and, and also the confidence in them and you review that, you can build an exciting company once you try to do everything yourself or rely on someone to do it without your direction. These are areas where problems can come in.
[00:19:41] Speaker A: And how would you describe your management style? And is there a particular example of how something that makes you more unique, you've seen work really well?
[00:19:51] Speaker B: Well, you know, duplicity is the most successful form of operation. So what I try to do is review what other successful companies and other successful entrepreneurs are doing and implant that into the operation of what we've got. And that's everything from software to the tools that you use, to the support companies that you work with, to the technology and operations. Everything in life that is working today can be assessed and utilized in other areas.
So I really take advantage not only of my own strengths, but my own weaknesses. I realize that there's somebody always better than you at whatever you do. And if you can seek out those alternatives, it makes you better.
[00:20:39] Speaker A: And where are you finding those examples of alternatives?
[00:20:42] Speaker B: In every aspect of what you do. Packaging a product, servicing a product, marketing a product, operating a product, selling a product, all of them all around, you have examples of people that are doing it right and people that are doing it less than right.
[00:21:01] Speaker A: And are the examples coming from books that you're reading, from having conversations with people in your network? How are you getting those nuggets of wisdom that then you can apply to your business?
[00:21:11] Speaker B: You know, originally a lot of it came from books, and then with the experience of dealing with people, it helps you. And today there is so much content out there, it's. It's really difficult for an individual to identify the market information that they want, whether it's on a product that you're buying or the production of a product, whether it's on the selling of a product or the packaging of a product. So it really. It's an individual process that everyone has to go through. Because I might decide on packaging something and you might disagree with me, and yet I go out and do this, and it works well. But maybe your system would have worked better. So these applications take on an individual process where someone has to feel comfortable with the decisions they're making. Everything from financing a business, the management that are there, the type of business that you set up, the modeling that you do. Everything requires detailed analysis. And if you're not ready, like I said in the beginning, to change those ideas as you go forward, they can be serious disasters. So you really have to take this inch by inch. It's like crawling up a hill a little by a little at a time, so that you make sure that every Step that you make is predetermined, analyzed, and if there's a default in it that you're ready to change.
[00:22:39] Speaker A: The importance of adaptability and flexibility seems to be a theme in some of the more successful businesses that you've seen. How can someone cultivate a sense of flexibility or have more of a mindset when things go wrong to pick themselves back up?
[00:22:56] Speaker B: Well, one of the things that people have to realize is, Rachel, your greatest strengths are your greatest weaknesses. So you have to understand that it's, it's a give and take. And if you look at people in the same space or scope of what you're trying to do, you have to identify not only the successful ones, but, but the ones that were unsuccessful as well and studied them just as much as the successful ones. And a lot of people don't look at it that way. It's. Maybe it's ego, maybe it's just a thought process. But I have found that I learn more from people's mistakes than I do for their successes. Because when someone's successful at something, you overlook a lot of the details that you could have done better. Whereas if you look at the, the tragedies in that product or service and you understand what happened there, it makes your journey to success a little bit easier and a little bit more cautious.
[00:23:55] Speaker A: What was the last mistake that you observed someone else make that you were able to learn from and implement change in your own business?
[00:24:03] Speaker B: That's a good question. But I would, I would say one of the biggest mistakes is always ego. You know, the two rules follow what I say. The second one is followed number one rule. And a lot of people, when they're given a little bit of control or success, ego cooks in. And ego can be your biggest disaster. So when someone makes a decision, says it's going to be this way or the highway, a lot of times those decisions are made out of ego and stubbornness and should be really readdressed.
[00:24:38] Speaker A: Well, as a funny contrast to that, I'd love to know, given your deep and varied career, and this is a safe space to speak not humbly, what do you feel most proud of?
[00:24:49] Speaker B: If you can marry a business, that you feel good in achieving it and you go home every night, you're happy about looking in the mirror and the impact to other people is positive. And I'm not trying to be Pollyanna, but if you can set up a win, win, win situation, that's ideal, that's something that, you know, it's in the fairy tale books. But if you look at something where the end user of your product or service is very happy. If the people that make it happen are happy in what they're doing and succeeding and you're happy, that's the ultimate goal. If you've got a win, win, win situation, it's hard to achieve. Pretty hard.
[00:25:34] Speaker A: What advice would you give to your younger self?
[00:25:36] Speaker B: Listen more, understand more. Respect people that have done things before, both from their successes and their failures. That would what I would tell myself if I was 18.
[00:25:51] Speaker A: Again, Chuck, thank you so much for this thoughtful conversation. I really appreciated the insights around the importance of lifelong learning, staying humble and picking yourself back up even when things get tough. So thank you so much, Chuck, for joining us on the Victory show and Victors. We look forward to sharing more insights in the future.
[00:26:11] Speaker B: My pleasure. Thank you for your time.
