Awesome. What's up, my friends? Welcome in to
another episode of Vision Pros Live. I've got
Walt Postleway in the house, and we're going
to be talking about what most businesses get
wrong about banks and capital. This is important
for us as visionaries, because if you don't know
how to establish your relationships with banks
and with capital, and you've got an unhealthy
relationship with finances, it's going to bleed
out into every corner of your brand. And it is
so important that we have guidance regarding
the financial opportunities. My friends, finances.
is a vehicle for being able to create more abundance
for those that we serve. Walt, thank you so much
for being here today. This is going to be fun.
Jackson, thanks for having me. I'm looking forward
to the conversation. Absolutely. So, you know,
access to capital, it's not just about numbers.
It's about understanding how the system really
works. And I'm not going to pretend to understand
fully how that system works. I know certain tricks
up from my sleeves from years of startups, from
having a a Y Combinator funded company. We received
$10 million from Paul Buchheit, the inventor
of Gmail, Matt Kuss, the search director of Google.
At Restaurant Connect, where we bootstrapped
for years and built a recurring monthly revenue
and then eventually raised funding with the Baylor
Angel Network. Or being involved in John Lee
Dumas' Kickstarter launch of his Freedom Journal
and him raising $500 ,000 within three weeks
through Kickstarters. There's a lot of different
funding opportunities that I've had the experience
of being involved in. being involved in. And
I'm one of the rare entrepreneurs who's gotten
to experience funding from almost every major
type of funding source. But it doesn't mean that
I'm going to rest on my laurels and allow my
ego to block me from seeing what else is out
there. Walt, from your perspective, and let's
get a little bit of background from you as well,
because I don't want to misdefine your background
with finances. What is it about the systems that
really work? Let's dive right into that. Certainly.
You touched upon its relationship. I preach a
lot that small business owners really need to
have a relationship with the banker of some sort.
And we'll talk more about the different kinds
of banks. And unfortunately, relationship, you
know, that's an overused word these days. But
a small business owner, an entrepreneur. You
can't expect to know everything. And that's why
I have found that the most successful entrepreneurs
put the right people around them. And so, you
know, we'll talk more about it here in this conversation.
But putting somebody. around you who understands
capital who understands the pressures you are
experiencing as a small business owner and is
there to not just you know lend you money but
to be a sounding board to actually kind of walk
with you on growth plans and have somebody to
bounce ideas off that really is key and and frankly
i've built a 30 plus year banking career um on
that principle I'm going to push back a little
bit for those entrepreneurs who have startups
or tech companies, SaaS companies that are often
outside of the wheelhouse of a banker. And because
ultimately I need more guidance on it. So when
I'm going into a bank and maybe I do misunderstand
the relationship building process with the bank
and how the funding, how the capital is actually
allocated. But I often found that when I go in,
they don't understand the freemium business model.
at all. They have a major resistance to it. And
they're like, well, wait, what's your degree?
I'm like, I don't have a degree. I had a 0 .37
GPA, you know, at BYU, if you'd like to know.
And then, you know, you're somebody who's got
a digital company back before COVID, especially
it was like, what do you mean? You only meet
people via Zoom. And how do you have real relationships?
It's like my relationships with people through
Zoom are stronger than the relationships that
they build in person. But that doesn't necessarily
lead to a warm and fuzzy feeling. um right there's
some diplomacy that's probably lacking on my
end for it um but How do we build relationships
with banks? And is it for specific traditional
businesses? And they want a pro forma, which
you can easily create with AI and pull the wool
over their eyes with it. They want a business
plan, which everybody puts in their desk the
moment they create it. They want an executive
summary, and that makes sense. But the rest of
that stuff is stuff that businesses don't use.
and implement on a daily basis in their brands.
And the banks know it. They know they're not
going to use it. And so talk to us a little bit
further about this. Let's dive into the weeds.
Sure. Yeah, no, no, no. Great place to start.
So with the broadening digital age, and frankly,
we can talk a little bit more about AI -assisted
coding, because to me, that's opening up this
marketplace for people. who have identified challenges
and they have ideas and solutions. And with this
vibe coding, and I've lived it, it's brought
the cost of development down to a place where
average blokes like me can come up with solutions.
So I think bankers are gonna have to play a catch
up game when it comes to tech businesses, but
traditionally startup companies have been a challenge
for traditional banks to lend to and so i'm going
to break this this little piece up into two two
little segments one is the relationship and then
we can kind of talk about that that first capital
conversation debt capital for a young business
so when i say relationship If you're a business,
you should have a check in or a savings account
somewhere. Because the idea that you are in business,
you're trying to make money through this business,
through this passion, through this idea you have.
So you have to deposit these funds somewhere.
It's been interesting because as especially,
you know, post -COVID, there are more and more,
you know, kind of digital banks out there. that
can be your relationship. And I know tech companies
are kind of drawn to this because they do kind
of speak the same language. I'm not a big fan
of that. I'm still, I guess, a little bit old
school, and I like that face -to -face kind of
relationship. So for this young company, even
if it's just an idea, but you've registered your
business, you have an EIN number, go open up
a business account. It should be a free account.
There's plenty of free business accounts out
there. And I would start with a community bank.
And so the way I look at the banking kind of
spectrum is you've got your large global national
banks, super regional banks that put into that
same category. There's a place. for all of these
types of banks but for a small business this
first segment i don't think is for you and i
don't recommend that where i really recommend
is the community bank these are the smaller types
of community banks um you know they're they're
in your community hence community bank and it's
and they're made up of a different group of lenders
of people these are people who are actually in
the community looking to benefit and grow their
community both of these segments are going to
most likely be public companies you're bigger
the bank the more likely it's going to be a for
-profit obviously public company All public companies,
by definition and just the way they're structured,
have to make more money year after year after
year. And so, you know, that's not a community
bank. They still may be public companies. They're
still trying to build value, but they really
are of the community. And so that's where I would
start. And you open up a business account, checking
your savings account, get to know the people
in that office, get to know. the branch manager,
the people in your community who are making decisions.
And that's where it starts. And I always, you
know, if you have your business and you don't
have that relationship yet, that should be your
priority for tomorrow. Because at some point
you are going to need that resource. Where I
think these digital... banks fall down is they're
much more deposit centric and when it comes to
the lending side i think they default too much
to you know a scripted program like like the
the big banks for capital then this is the third
category of what i would call a bank and unfortunately
it's it's a too well kept a secret uh here they're
called community Development Financial Institutions,
CDFI for short. They look like a bank. They kind
of smell like a bank, but they are not a depository.
And that is a significant difference because
these other two, you know, these national banks,
global banks, one bucket, community banks, and
a second bucket. they're all regulated so they
have oversight from the feds who tell them what
they can and can't do they have examiners that
come out they look at what they're doing and
that's because they are taking other people's
money and lending it out to unrelated folks and
so they have a fiduciary responsibility of taking
care of your money your depositors mine So that's
why they're regulated. CDFIs, it's their own
money that they're lending. And if you want,
we can talk more about where their capital comes
from. But they are independent. They can do things
that. banks can't do and if you are a startup
business and let's just define that as a business
that that you're still within your first two
years of operation and in cash flow cdfi's are
where you would want to have that conversation
for for capital if you're needing capital for
new equipment to expand to hire cdfi's are probably
going to be your best bet because that's what
they're designed to do they are there to have
you as as their client really for three to five
years and then the idea is your business has
the track record where they can then hand you
off to the traditional banking environment hopefully
to a community bank because that's that's really
where my passion lies is with the community banks
but that's how i'd answer that Relationship,
community bank. If you're a young business or
a digital business looking for capital, I would
start with the CDFI. Very good. This is definitely
helpful direction. I will speak to the virtual
banks and the communal bank experiences a little
bit. On the virtual bank side, my friends, I
used to use RelayFi. And one of the things I
loved about RelayFi was that I could have up
to 20 plus 25 bank accounts, I think. And those
25 bank accounts allowed me to also create basically
sub accounts for certain team members to have
access to different types of funding. And so
I could give a brand new team member. Well, maybe
not brand new, but somebody's been with us for
six to 12 weeks and access to a very low budget.
And if they ran with the budget. but I knew I
couldn't trust them. Right. But if they use that
budget responsibly and they checked in, it empowered
them to learn new things about how to act as
a business owner on my behalf and how to use
those funds for different, different projects
that we had. So that was one of my favorite pieces
about it was being able to have all those different
accounts where I could separate the money and
not have to worry about having a fee for each
account that I had. the also to your point well
the general ux and ui um like the user experience
user interface of dealing with it was just so
easy and the service was so good um the uh challenge
though was in uh december of this past year i
got a notice on christmas eve of all days we're
shutting your bank account down um and uh we're
not gonna tell you why and we can't tell you
why because of of uh regulations and so here
i am like oh man like i can't tell my team about
this i've got to fix this before payroll comes
up um like Thanks for the Christmas card relay
file. Like, wow. And so I dove in with AI. I
was like, what I do about like you can hire an
attorney, but it's just going to cause yourself
more pain. Like, just move on, find the next
one. But these banks apparently clean sweep and
wipe out digital marketing companies and companies
that are in the digital space kind of routinely
as part of their processes, because they have
parent banks that have to. they have to comply
with and stuff. And so I have no idea why it
happened, but it happened. And it was three years
into my relationship with RelayFi. And so I 100
% loved it. But I'm grateful for the three years
that I had. And so I'll say that. And now I'm
with Mercury Bank. Maybe the same thing happens
in the future with Mercury. But so far, so good.
Freaking love Mercury. Same exact type of experience.
And then as far as the communal banks goes, one
of the things that scared me um was so in san
antonio texas there's this uh pyramid looking
building and they light it up with different
colors and stuff and it had a bank on it called
the spirit of texas bank and i figured they owned
the building and everything and so one day i
decided to go in i was like i'm texan i'm gonna
work with the spirit of texas bank plus you're
supposed to go local and small and i i go into
this bank and i mean they have like a corner
dungeon office um out of the entire thing And
it's in the middle of the day. It says their
office hours are open. Nobody was inside. And,
like, there's boxes everywhere. And this thing's
been open for years. It's like, okay, yeah, no.
This looks like a horrible restaurant, you know,
where, like, I'm going to get food poisoning,
bank poisoning in this case. And so that was
a real disconnect. And sure enough, within a
couple months, they shut down. And I was like,
dang, had I gotten an account with this bank
account or with this bank. what would have happened
had they shut down and that would have been a
bind. And so I don't mean to preach against the
small local business side. I also went into a
Truist and I built a little relationship with
a VP of Truist locally. And they wanted to connect
me to certain things, but that's kind of where
my experience went well, where it was like, wait,
they know small local businesses and they understand
that and they feel comfortable with that. But
with what I was doing, they didn't feel comfortable
and they felt like, I was building something
that was kind of, I don't want to say crazy,
but they tried and they meant well, but I could
tell that I wasn't building a relationship that
was leading towards them helping me. It was,
they wanted me to network locally and do certain
things, but they really. didn't want to touch
the business model with a 10 -foot pole. And
there was something awkward about that. So perhaps
there's changes in the times right now. We're
going to come back. We're going to take a little
break, my friends. But I want to dive in specifically
about the financial landscape and how it is evolving
right now. That was years ago. Now there's a
rise of AI and banking. They're more positioned
to understand different business models. if they
understand how the AI stuff works. And I love
that Walt used the words vibe coding. Walt, way
to get with the times, man. You're a banker who
gets money. It gives me hope that, wow, okay,
maybe more of them are starting to pay attention.
But we need to understand how those tools can
also amplify our relationships with the banks
who are starting to inform themselves. And if
your bank is not, but you have a relationship,
you also have the opportunity to plant the seed
and help them see what you know. I could see
how that could put you in a... very good position
with your banker in today's society. So we'll
be right back and we'll dive right in. All right.
Welcome in to Vision Pros Live with Jackson Callum.
I'm your show host. We'll be doing interviews
for visionary entrepreneurs and guest leaders
who are building fantastic visions out there.
Hey, what's up, everybody? Again, I'm super happy
to have Walt here today talking about banks and
capital because this is such an important reality.
My friends, I used to say I don't care about
the money because I got into business to help
people, but I didn't realize that that doesn't
have to be mutually inclusive, those two statements.
I was basically telling my God, hey, if you send
me money to help people, I'm not going to care
about it. that's not a good recipe that's not
being a wise steward i was i had an immaturity
when it came to finances and that was holding
me back when i switched to start looking at money
and saying you know what i am grateful for the
sacred resource that is right in front of me
i need to be a wise steward and learn how to
work with this in order to serve more people
my life started to become more abundant immediately
And as I've continued to lean into that, I've
continued to unlock superpowers when it comes
to funding my vision, moving this podcast forward,
moving my other businesses forward. And I wish
the same thing for you as a visionary. It is
super important that we lean into learning how
do we access and utilize the funding that is
necessary to bring our visions to life. So we've
got Walt here to help us with that today. He
has mentioned that there is an AI revolution
taking place in banking as well. And I think
all of us know it because it's in every sector
of our life. lives and news. And so I want to
talk about two of the greatest resources for
me when it comes to AI and implementing AI in
my business, AI Mavericks. with Austin Armstrong
and Scott Simpson. These are two guys that dive
into the depths of AI and the advanced stuff.
And they're talking about agents and building
out these agents. And so I have a membership
for their program every single month so that
I can go in and learn what are they doing? What
is the AI hack of the month that they're working
on and bringing to fruition so that I can bring
those into my business world as well. And I can
stay ahead of the AI curves. They're very good
at staying again in touch with what the latest
and greatest. new things are. They're great leaders.
That's also a big factor as to why I joined forces
with them on this, even though I have my own
AI program, right? It's like, wait, you're going
to work with somebody who's ultimately your competitor
and be in their environment while building. Yes,
of course. And I talked to them about it. And
I was like, guys, I have my own as well. I want
you to know it's like two math professors, you
know, they're teaching geometry. I'm teaching,
teaching algebra for this. And we're all getting
more out of it because when the rising tide.
lifts all ships that are well -prepared. If you're
not a well -prepared ship, by the way, you're
sinking when the tide rises, get your ship and
order my friends. Then there's the AI marketplace.
The AI marketplace is our world. for AI. And
this is positioned to help anybody who's been
a little bit scared of AI or who doesn't know
how to use it from the get -go. You already have
the skills within you as a professional. And
I want you to be able to see and recognize that.
Professionals, you can use this free tool on
the front end to define what your skills are
by just checking boxes of what do you know how
to do in the real world. It will translate for
you what you should have on your resume and on
your LinkedIn. And you can revamp both of those
within 15 minutes. In addition, it guides you
through how to interview for conversations so
that you can position yourself as an AI executive
for the future. I believe that most of you who
are working in average American companies have
far more AI skills than you even realize. On
the business side, we have a bottleneck audit
and the bottleneck audit helps you see what are
some things that may be going on in your business
right now that you can check the box for. And
it will show you what type of system you can
build with AI in order to surpass those bottlenecks.
Right now we're in the founding member stage.
We're going to have 50 founding members at $50
a month or $500 for lifetime access, not one
-year access, lifetime. We'll be bumping up to
$100 after that. The 50 founding cohort is a
special signature level, if you will. And you'll
notice underneath the button for it on the enrollment
page. It says you can apply for a grant if you
can't afford this. My friends, I don't want to
leave anybody behind. If you want to explore
it, just go to the grant program and see what
that looks like. You can dive in and see the
dashboard, see how we design our materials every
single month. And if you want to upgrade, fantastic.
But again, if you're not in a financial position
to be able to afford this, just come and join
us for free. We also have the AI exchange on
Tuesdays at 2 p .m. Central. We would love to
see you there. Lastly, we've got the Water Project.
While we're here to serve each and every single
one of you, we also don't want to forget the
less fortunate people who don't even have the
ability to lock into AI. We're talking about
people in Africa who don't have access to clean
drinking water. This project was something that
I couldn't relate to because I've never been
thirsty in my life, but I'm glad a team member
insisted that I take a look. Once I did, I saw
kids celebrating water like my kids celebrate
Christmas Day, and I was like, we should definitely
help out with this. And so we do give to this
project every single month. I hope that if you're
in a position to give, you certainly can choose
a community where you want to give. I love that
the water project transparently shows you the
completion of the project. They actually update
you on the one that you donate to, which is awesome.
But if you don't have the finances to give back
to this, my hope is you will at least share it
with friends and family. Maybe you can talk about
it over lunch with somebody and show somebody
what they're up to. I think it's really cool
and fun to learn about. And we've got 8 billion
people to help in this world, my friends. So
if there's another cause that's drawing your
attention, just like this cause was drawing one
of my team members' attentions, do us a favor.
Drop it as a comment in the show. I will personally
take a look at whatever that cause is, and I
will do my best to either create and spread the
word for it or to... to also contribute to it
myself. So without further ado, let's get back
to helping all of you with your visions. Walt,
thanks for being here on Vision Pros Life. Absolutely.
It's a good conversation. Yes, sir. So diving
right into that rise of AI and banking and how
the rules are changing and many business owners
are falling behind without even realizing it.
Where do you want to start for that segment?
Well, ai is here to stay you know you i think
we're all beginning to understand that the thing
to remember with with bankers generally speaking
is um you know they're slow to respond uh generally
speaking and when you speak in generalities you
always get yourself in trouble but um you know
bankers are risk managers and part of being comfortable
managing risk is understanding the risks associated
with you know the technology the product the
times you know the macro economics and so Because
of that, bankers tend not to be a leading edge
on anything. They tend to learn and adapt. And
so I think that's where we are today. I can tell
you from a regulatory standpoint, there's a lot
of discussion over the last three or four years,
both here and in Europe, on how commercial banks
need to implement AI to better manage risk. um
most of that is going into the front end side
of lending which i've spoken um before on on
some other podcasts that i don't think ai will
replace your your commercial lender Personal
debt, personal lending, that's already been replaced.
That got replaced by algorithms years ago, long
before AI. But with commercial lending, there's
so much different nuances from business to business,
even in the same industry. Granted, I'm a banker.
That's my fabric. So I may be that slow to change.
but there's too much humanity that needs to go
into assessing that business owner's acumen to
be successful and to be at the table when the
headwinds come i have not dealt with any business
that hasn't had some headwinds at some point
it's inevitable it's life things happen and so
really Commercial lending is about understanding
the acumen of the business owner and assessing
their staying power. And I think there's just
too much humanity for that piece. Interesting.
Maybe it's a different category. I don't know
why it's perhaps overlooked a little bit, but
to validate what you said too, yes, bankers,
when you're in a successful position, visionaries,
you don't have to react to the markets. And so
you are going to be slow because why would you
risk everything that you have? They're not great
gamblers. And that's a good thing. Imagine if
our banks were constantly gambling with our money.
I mean, we would be in a very, very difficult
position, even further difficult position as
an economy. But as far as commercial. 2008 all
over again. all right yes and with the commercial
lending side so there's a couple of of routes
that i recommend having your eyes open for uh
my friends and again i wouldn't i want to be
careful with this i'm not a financial advisor
you're making your own decisions in relation
to this i'm definitely not a banker but to open
your eyes to what is out there that you may not
have seen stripe provides lending to businesses.
As you continue to build up a good relationship
with Stripe by processing transactions, not having
chargebacks, they open capital to you. PayPal
also opens lending to individuals and QuickBooks
as well. If you've used QuickBooks for two years
or so, QuickBooks Capital becomes a resource
that is open to you. So there are opportunities,
but I want to dive in more aggressively on, this
is again, why it's so helpful and so valuable.
to build relationships with people like Walt.
Ultimately, the more choices that you have, the
better position you'll likely be in to get the
best bang for your buck in these opportunities
and not just the best bang for your buck, but
also the relationships that are likely to have
more depth and can help you in different ways.
And so that's really what it's about. It's about
making sure that we don't end up with. one solution
for water bottles on the planet um you know that's
where corruption ultimately comes in and so you
want to put yourself in a position if you want
to read the book never split the difference by
chris voss as well this goes back to basic negotiations
the person who is in the strongest position is
almost always going or has the least to lose
is almost always going to win the negotiations
and so if you put yourself in a position to where
you have collateral, you have versatility, you
have different relationship options, you have
supply and demand in your favor when it comes
to how am I going to raise funding, then the
banks are going to be more likely to want to
win your business because they don't want you
to go with another bank if they see that you
have all those strengths. They're like, well,
what can we do to win this account over? So those
are some other fundamentals behind the scenes
on this. Hidden rules, Walt, of getting business
from funding that we haven't talked about that
you'd like to highlight. Yes. And I would say
information, because what was interesting was
with those lenders that you listed, I think it
was three or four. All of those are our service
providers that have data. and the reason why
they're able to then provide credit is because
the guesswork has kind of been removed they know
what your cash flow is they see every time you
know you get paid you know so so that it's data
driven right right so it does take some of the
guesswork out when it comes to dealing with a
community bank or a cdfi it really is about the
communication tools understand that the person
you're talking to you want them to be your advocate
they're your champion at that bank or at that
CDFI you need to empower them to be able to then
talk about you and your business to the larger
group within their institution their organization
and you know sell you to them because in lending
there's a lot of times where the person you're
talking to may have signing authority um at one
time you know depending where i uh what lender
i was working for i had signing authority so
i i could you know approve things myself often
it does need to go up at least one layer and
so the person you're dealing with needs to be
given the information so they're excited about
you your business so they can then take that
excitement to the next level and so that's where
it comes to you know keep your books right um
with all of the technology out there today it's
really inexcusable if you can't produce financial
statements a balance sheet in a profit and loss
you know an income statement um on a regular
basis and have it be you know good information
good data um you know that shows that you're
paying attention to your business and you're
managing your business um you also need to be
able to talk about your business from not just
a passion standpoint because if you're a business
owner and you don't have passion about what you're
doing get out now yes right because um you have
to have that passion um you know things are cyclical
you know you may you know there's the old saying
even blind squirrels can find a nut from time
to time so you know you you may have an opportunity
you may not be really passionate about it but
you see oh i can make a buck or two get in make
your buck or two and get out because if you're
not passionate about what you're doing you know
life is short If you're not passionate and those
headwinds come, that's where I think people then
can get really tripped up and make bad decisions
that not just impact themselves, but others.
So you have to have passion. And so you need
to be able to talk about the business outside
of your passion. you need to talk about your
competitors what makes you special how are you
differentiated from your competition now we talked
about a little bit earlier about that you know
the humanity aspect and you talking to your banker
about why you're going to stay when those headwinds
come and you're going to equip your whoever you're
dealing with with those pieces um jackson to
have that successful conversation about capital
absolutely my friends i want you to also dive
in with ai and ask ai about promissory notes
and how promissory notes you know, are they legal
and ask it, are there ways to set healthy boundaries
with individuals to talk through how to set up
promissory notes? My friends have been teaching
this for years and I want you to dive in and
figure that out for yourself and see what's there
because I see so many people skipping that stage
and going straight to banks, capital or worse,
going to credit cards, you know, and not seeing
what else is out there. And I'm not saying that
you can't win by taking out a credit card and
running your business on that. There's people
who do it. But there are so many other options
that we often overlook and we don't we don't
educate ourselves. So we don't really know what
our options are. So I'm going to leave that where
it's at. We're going to continue on this thought
process of passion a little bit because you were
going in two different directions. Well, and
both are super important. One, you talked about
the people who don't have passion. Now I want
to talk about the dangers of having passion.
You know, we have the passion. There's a saying
when we start selling hammers, everything looks
like a nail. And I see a lot of business owners.
think that their stuff's way cooler than it actually
is, or think that they're way more prepared than
they actually are, guilty as charged as a business
owner. We have to be able to look past our blind
spots. We have to have team members who can help
us see that, wait, we need to get these elements
in place before we launch. You can passionately
run yourself way too close to the cliff or off
the cliff if you're not careful with making sure
that what you're doing is also pragmatic. And
so that's another side. But as we get ready to,
so now let's say that you're in the middle zone.
You have the passion, but you're also pragmatic.
You've got the story. You've got the data -driven
processes to help showcase that you're on the
right track. My friends, one of the greatest
challenges, and this is something that I think
we have an opportunity to teach our banks about,
is that we are often misguided 90 % of the time,
maybe plus, maybe even 99 % of the time in some
cases, on how much money you need for operations.
marketing and advertising and i'm going to show
an article that we created walter look forward
to your opinion on this as well i'm going to
plant this seed my friends are the first banker
i've talked to yet about this but there's this
there's this myth that exists and it comes from
the sba and we hear friends and family regurgitate
this over and over that you need to put seven
to 8 % towards marketing and advertising and
Gartner backs it up and says the same thing.
And the CMO survey that evaluates like 6 ,000,
I think CMOs says it's around 9 .4 % around the
same exact reality. And here's the odd thing
about this, the 6 ,000 CMOs they asked, there's
no proof that any of them are any good at what
they do. And in fact, there's a track record
of 66 % of businesses losing within 10 years.
So if you follow the advice that all of these
entities are pushing, you are likely to have
the exact same track record that every other
company that they've ever revised has also followed.
But I took this article, and I worked with Claude
on this, by the way, and it talks about how that
is a descriptive reality, the 7 % to 9%. It is
not a prescriptive reality. And the actual behavior
is closer to 1%. I mean, they did studies and
the average American business owner only spends
1 .08 % of revenue advertising. But that led
me to ask, well, wait a second. Do we know out
of the brands that actually listened to SBA,
how many actually have winning track records
that spent 7, 8 %? There is literally no study
done in the world that exists on this. And whether
this is actually an accurate map. or whether
the map is just some some fable that was invented
by authorities and institutions and has just
been pushed over and over and over so we're going
to go down here to looking past tesla past other
frameworks to this reality and this is based
on vc backed information if you're pre -revenue
or you have no budget you don't get to invest
a percentage and if you invest the bare minimum
in your industry you're like it's like a gardener
saying what's the least amount of water I can
give my plants and them not die. That's not how
you build a healthy garden. You need to put yourself
in a position where you have the capital to advance
your projects. Let's go down to new businesses,
zero to two years. VCs recommend that you put
20 to 50 % of revenue towards your brands. Hey,
if you're Dropbox, Dropbox put 100 % of revenue
towards their advertising and their marketing.
They made it to a $10 billion IPO. What about
existing but stalled businesses? Well, if you've
stalled out, because you have a bad reputation,
because you didn't hit it off in the beginning.
Guess what? People are going to be that much
less likely to be excited about finding out your
brand. You've got to invest more in those cases.
And there's industry stats on if you're going
to do a rebrand, $100 ,000 to $350 ,000. I know
that's not comfortable. But business isn't about
being comfortable. It's about providing for your
loved ones. It's about making sure you put yourself
in a position where you are as bulletproof as
possible. Establish and growing, then maybe you
go down to 10 to 20 % and you work on maintaining.
And in the dominant cycles, most brands that
are dominant in their market, they are peddled
to the metal crushing it. But if you want to
gamble and put yourself in a position to where
you are maintaining status quo, 7 to 15 % might
be possible. But recently Tesla learned that
other companies come after you. And they take
your lunch money. That's what's happening with
DYB over in China. And that's why Tesla is now
advertising, even though they had a no advertising
policy previously. But that was where the founder
had 150 million social media followers. He had
a billion dollar strategy in place that didn't
cost him anything because he had already built
equity into that for so long. So while those
are my thoughts and some of the studies, I'll
drop the link for everybody is that we've got
to help entrepreneurs realize that. They need
to invest far more in their awareness campaigns,
in their branding, in their exposure. I don't
see anybody in the market talking about this
because there's no study to challenge the authorities.
What are your thoughts on that? No, I think you're
spot on. I've worked with a lot of companies
that have developed great mousetraps. But if
you can't tell the world about your mousetrap,
you're not going to sell any. It's one thing
to come up with an idea and a product. It's a
whole different thing to actually turn that into
money because you have to sell it. And no, I
agree with you, Jackson. I think when it comes
to the soft side of working capital and where
that gets spent, um all too often entrepreneurs
visionaries um uh get concerned of and they hold
on to cash a little bit too tight right um and
it's it's a defensive move um and i think you
know it's kind of part of our nature when it
comes to is it seven percent is it eight percent
is it nine percent um i would kind of throw all
of those out um i agree with you i think it's
more than that What happens a lot in finance
is you get people often, you know, it starts
at universities and goes out from there. And,
you know, they come up with these formulas and
they pontificate from above. These are ratios
you should have. And and nobody's following up.
Right. Nobody's looking at, you know, the the
25 most successful companies in industry. Right.
What are they spending? exactly underwriting
that banks do there's some data collectors out
there um rma they were purchased by um i think
prosite might be the name but they basically
aggregate all of this cpa tax return data so
as a lender i can subscribe to this service you
know if i'm dealing with a a sas company and
i can then look at all right other companies
within these size ranges this is how much they're
spending you know But that's not out there for
everybody to look at. And it can vary by industry.
But yeah, I kind of ignore a lot of these reports.
SBA is good. What I would say is SBDCs, the small
business development centers that are in every
state. They're county kind of based. They can
be extremely useful. But but reports that come
from SBA, you know, I give them maybe a C or
a C plus when it comes. Well, it's it's again,
it's not the report itself. That report is accurate,
but they've never measured the reality of the
outcomes. And so it's it's important data, but
it's an incomplete data set. It would be like
me telling you telling you guys, hey, if you
want to get to from Houston to San Antonio, then.
A thousand people have tried to do it and are
on their way. And as far as we know, they've
all spent they all needed three gallons of gas,
you know, and then nobody's checking if the thousand
people actually made it or not. They're just
telling them. that as a general answer. And obviously
the data connects a little bit better. And I
break it down in the article for you guys to
see why do they recommend what they recommend
and what's there. But if you don't measure against
the outcome, there's no accountability for the
advice given. And like I said, it's about businesses.
that are maintaining, that are already successful.
That's where that knowledge is coming from. It's
not from your variable where your stage is and
where you're at as a business owner. And so we
have to be more careful with that reality for
ourselves. And as far as the SBDCs go, the local,
I have another article on that. They do have
free, legally required to help you advice. And
almost nobody uses it very well. And so I've
wrote an article. about what to watch out for
in relation to working with the SBDCs and how
it's extremely beneficial. We wouldn't have raised
the $100 ,000 to the Baylor Angel Network if
it wasn't for our guy at Georgetown University
who was helping us on that during our days where
I was full -time at Restaurant Connect. So by
all means, guys, lean into these types of resources.
Walt, we don't have too much time left. I'm going
to throw three different topics at you at once.
And we'll do our best to efficiently go through
them. One is why access to capital is about to
change. with AI and the banking explained on
that side. But more importantly, how is it changing?
And how different types of banks serve different
types of businesses as well. Maybe we'll dive
into that a little bit. We can also create materials
after the fact, Walt, if we want to give it back
to the audience in a different way. And how banks
really decide who gets capital. Let's start with
two, go to three, go back to one. you told about
your experience with with the bank in the pyramid
i can't remember the name of that bank um when
selecting banks it's it's an interview process
not all banks and all community banks are a fit
for every business Just like if you're getting
a CPA or if you're getting an attorney, you want
to talk to them. You need to make sure that there's
a fit. And often people just go, oh, this is
the bank that's closest or, oh, I like this is
the better advertisement or this is the best
one with their online mobile banking. You got
to talk to the people and do your research. All
banks, because they're regulated, you can look
up information on them at FDIC. um on that um
third how to get the capital or what that looks
like the decision -making process it goes back
to what we were talking about with having that
champion within that organization and really
what they are doing especially for young companies
or companies that don't fit in a box well if
you fit in a box you know skip pasco go to a
community bank you know get dialed in after you
you have that relationship if you're a young
business if you're in these industries that are
kind of new and unknown you know it's the cdfi's
it's the community banks but it boils down to
debt is not a grant the lender needs to have
a reasonable expectation that you're going to
pay them back so that's your job is to outline
how with taking this money from them putting
it into your business you're going to generate
more money which then can be used to pay them
back It sounds simple. It's more complicated
than that. But if you put that as your guidepost,
you need to convince them that you can pay them
back. That's 50 % of the path that gets you this
huge head start. When it comes to AI, I think
AI is going to play a couple of roles with banks.
um both community banks and and we can see the
big banks as well fraud detection uh let's face
it um you know i i often kind of amuse that these
people who prey upon others and pull off fraud
if they would just put that much energy and resources
and intellect into doing good in this world how
much better would this world be but fraud exists
AI is excellent at pattern recognition. So we
already know and we've seen AI used in fraud
detection. Other areas with banks is new services
and better interfaces. What we had for mobile
banking five years ago is completely different
than what we have today. I think it's going to
continue to develop. AI is really bringing down
the cost of creating these platforms and these
programs and banks will capitalize on it. And
then lastly, and I disagree with a lot of people
out there, you know, the talking heads talking
about AI replacing people in the banking world.
I do not, and I already touched on it, but I
don't see AI taking over. credit decisioning
on the commercial side i think it will augment
it i'm hoping it makes it faster because i'll
tell you and the worst thing a banker can do
is deliver a slow no if you're dealing with the
lender and they're dragging their feet and every
three or four days they come back to you and
they need one more piece of paper and this goes
on for a week cut and run um slow Bankers have
given themselves bad reputations because of bad
practices. And the slow no is to me inexcusable.
So I think AI is helping on the workflow, making
the process easier for businesses to go. But
I don't see it necessarily replacing the decision
making process. And then the selfish plug, I
think AI can. reduce the risk involved with commercial
lending. That's what we built our company on.
And the goal and the reason why we built this,
and I mentioned this before. bankers tend to
be, well, not tend to, they are risk managers.
But to manage risk, you have to understand the
parameters that you're working in. And we all
know the world's very crazy right now. So if
we can develop an AI tool that does a better
job and a lower impact on the borrower to collect
financial statements so we have the data, so
we can have early warning systems, it ultimately
reduces the risk to the commercial lender and
if the risk goes down i believe they will say
yes to more loans or more questionable loans
increasing access to capital for these you know
less known industries or younger businesses because
they have that data feedback loop that is so
essential absolutely guys today we received a
master class on all things banking and ai and
we can combine those two for our advantage i
want to be able to help you do just that if you
have a vision and a brand that you are trying
to build you can take the script from this exact
video and you can plug it into ai and i want
you to do it because one i don't like to have
conversations where i'm caught with my pants
down meaning i don't like to go to a lender or
to a lawyer or to anybody who's got a whole lot
of knowledge over me on a subject and i'm not
prepared to talk about it i don't really understand
them i'm kind of wasting their time now i'm not
i haven't done my due diligence well now ai can
help you understand those things so much better
so you can go in with the right types of questions
so give ai the script tell it to do do research
on you and your situation Ask it, what questions
should I be asking when I go into these environments?
What results might I be looking for? It's not
going to give you a perfect answer, but I guarantee
you it's going to give you more knowledge than
you have right now if you just try to go in and
do it by yourself. It can, as Walt talked about,
augment that reality. For those of us looking
to use AI to replace assets or people in our
life, you're going to suffer the consequences
of that period. That's the wrong attitude. It's
how can you amplify your life and your situations
and look no further than RingCentral's piss poor
customer service. Look no further than Bank of
America and how bad their customer service has
become. They've spent millions of dollars implementing
AI the wrong way. So yes, there are companies
that are going to regret the way that they move
towards AI. The neat thing about that is I think
a lot of them will realize the cost and they
will course correct. And be looking for people
to come in and help salvage those relationships
and build those businesses out too. So there's
going to be some disruption that takes place.
But my hope for you as a visionary, learn to
use. AI the right way. Learn to use capital the
right way. Build the relationships and understand
how to use it in a way that is ethical, in a
way that is healthy, in a way that creates sustainability
for what you're up to. Walt, I really appreciate
all that you've done. My friends, I'm going to
be asking Walt if he will meet with me after
this because I would like to be able to unpack
more for him. It is really that simple in life,
my friends. Just reach out to people like Walt.
It doesn't matter if it's through LinkedIn or
if it's through Facebook. Wherever you find him,
just go to Google or AI and ask for Walt's information.
I'm sure he'd be happy. to talk to you about
how your visions can be impacted or can benefit
from the services that he may have. Walt, I'll
give you the final word, cookie cutter, or not
cookie cutter, sorry, fortune cookie style. What
advice or final wisdom do you have for visionaries
out there? Build relationships, put the right
people around you, and then listen to them. Unfortunately,
through my career, I have had businesses, I've
had friends grow businesses, not listen to advice
from me or others, and then find themselves growing
out of business. And that's a real threat out
there. So put the right people around you, but
then listen to them. You heard it from Walt Postlewaite
on Vision Pros Live. Let's build relationships.
We'll see you in the next episode. Thank you
for being here today. I'm really happy that you
tuned in to Vision Pros Live. I'm looking forward
to seeing your reactions as these episodes continue
to move forward. This is going to get more and
more fun. We'll have more and more engagement
as well. We'll invite people to participate in
the show. And thank you for giving us your time
and attention. Have an excellent time building
out your vision and becoming a vision pro yourself.