[00:02:15] Patrick Donley: I am happy to have you on here today. Thanks for your time. I just wanted to dig in and dive in and hear you’ve had a lot of different entrepreneurial adventures, but I wanted to talk about your early days.

[00:02:26] Patrick Donley: You sounded like a young Alex P. Keaton from Family Ties. Tell us a little bit about what you were like growing up and just if you had any side hustles as a kid, that kind of thing. 

[00:02:36] Tim Calise: Yeah, so I was absolutely a rock star socially from a very early age, meaning I was the kid who brought a briefcase to school in like fourth and fifth grade.

[00:02:47] Tim Calise: So definitely that was foreshadowing to be killer with the ladies. But I mimicked what I saw around me. My father was in the professional services, he was in banking, and I just started to pick up some of those mannerisms and. Most sons want to be like their dad.

[00:03:02] Tim Calise: And that was the model that I had, which served me in so many great ways, which was I was embedded from an early age, or indoctrinated for probably no a better word, that I could pretty much do whatever I could do, that the sky was effectively the limit. Now the interesting part for me was I skewed much more towards the entrepreneurial side early on, rather than what I’ll say, the gladiator.

[00:03:25] Tim Calise: I want to go into the big arena investment banker let’s go, do deals. I like the idea of it, but I was very much kind of the softer personality. And so entrepreneurialism was more of an attraction. And again, this is the eighties and nineties where it wasn’t entrepreneurialism as 20, 24 as as has come to be.

[00:03:45] Tim Calise: It was always a problem solver, always a tinkerer. And so my first kind of entree to that world was in middle school, I pitched the head of my school on why we should have a boys lacrosse team, which we didn’t have. But I spec’d out all the equipment, I did all the costing. I said here’s the business plan.

[00:04:03] Tim Calise: Effectively, let’s go do it. And of course he said, no which was fine. But just to give you a sense of that drive was always see a problem, solve a problem, direct line to, to make that happen. And then it snowballed from there through college and into my professional career.

[00:04:19] Patrick Donley: So growing up was like money investing, entrepreneurship. Was all that discussed at the dinner table? 

[00:04:26] Tim Calise: It was in high level, yes. And then I remember very clearly it was, I was 18, the first stock I bought, actually maybe I was 16, was Yahoo in the late nineties. I’m paraphrasing, but it was something like at $300 a share, which was probably the peak, right before everything fell apart.

[00:04:47] Tim Calise: So I was encouraged to take small risks like that. Like I think I bought one share, but at least I understood the game and I understood what it meant to be, to have money on the line and taking risk and watching it go from $250 a share down to 50. That was a real pain that I felt and so I think I probably got drawn into that world through micro experiences like that investing club, that kind of thought those types of things.

[00:05:12] Patrick Donley: That’s awesome. So that first experience in the stock market and having a loss, I wanted to know how that affected you. My first experience was doubling my money, and I don’t know that it was a positive thing, honestly, like in retrospect, I’m curious like having a loss and having that sting, how did that affect, like how you’ve invested going forward?

[00:05:32] Tim Calise: I think it informed. It removes some of my naivete very early on. ’cause I think before you start the process or start to put things at risk, put risk on the table. You think the stock market is just this thing you put money in and it goes up. And my experience, you’re gonna be, you’ll be the next Warren Buffett, right?

[00:05:49] Tim Calise: Yeah. Spot on. E. E, exactly. And so I think it was a great experience because it put a little bit of that. Friction in my thinking to say, all right is this the right thing? What does an entry point look like? Why am I doing what I’m doing? Not just put money at risk and there’s a pot of gold at the end of that rainbow.

[00:06:08] Patrick Donley: So you go off to college. Talk to me a little bit about some of these, the ventures that you did in college. ’cause I know that you had a couple.

[00:06:15] Tim Calise: I did. So my sophomore year in college, I went to school in Washington, DC and for anybody who’s familiar with kind of the downtown area in DC, what they call K Street, most people commute in from Virginia and Maryland.

[00:06:27] Tim Calise: And then by nine, 10 o’clock at night, everybody leaves after dinner. And as a college student, that’s when things just start to get interesting. Seven 11 was probably the only option for us in school if we wanted something to drink or anything like that. So our two of my roommates and I on a Tuesday said there’s gotta be a better way.

[00:06:49] Tim Calise: Maybe we can we are our core customer, what can we do? And in twenty-four hours, we created a website, we called it Campus Snacks.com. We went to BJ’s the next day and got cookies and ice cream and a few other things. And we started a late night snack delivery business within about two days. And so the founding was interesting ’cause it solved a problem we knew acutely ’cause it was our problem.

[00:07:14] Tim Calise: But what I learned thereafter, which was the most important list of this whole thing, and it took off like a rocket ship, was how do you market? I’m a finance guy and I can come up with ideas, but marketing and promotion was really a blind spot for me. Serendipitously, one of my two partners and I happened to be taking human sexuality at the time in college and after one of our classes, we went up to the professor and he had said they’re trying to do these government programs for doing community programs and things like that.

[00:07:44] Tim Calise: And he happened to highlight the focus of the time was Safe sex practices. So we went up to him at the end of the class one day and said that we have this thing, a late night stack delivery business, and we have your core customer when it matters most. He ended up donating 10,000 free condoms to our company.

[00:08:03] Tim Calise: And so we gave one with every order. And so we went from hearing frickets in the beginning a little bit of growth here and there just by word of mouth to we became the company where you get a condom with every order. And we took that business from, what, two nights a week, opened three hours a night to when I sold it to my partner, it was a seven day a week and it moved into a 15,000 square foot distribution center.

[00:08:26] Tim Calise: With over 200 SKUs delivering all around downtown DC. 

[00:08:31] Patrick Donley: That’s awesome. So you had a successful exit for yourself, right? 

[00:08:35] Tim Calise: I got out too early, probably in retrospect, but I was a college student and my partner really wanted to run with it, and so I sold my third of the business at some point along the way.

[00:08:44] Tim Calise: But it showed me the practical side of speed to money. Have an idea, how can we test it? How can we get it into the marketplace as quickly as possible? And number two, knowing your core audience, we knew exactly who we were catering to. We knew what their pains were, we know what their aspirations were. And so we had the core avatar dialed in really quickly.

[00:09:05] Patrick Donley: And you didn’t spend time writing a business plan. It was just like, here’s the idea, let’s launch it. 

[00:09:10] Tim Calise: We did not. We just go to market. Little money in. If it failed. But we had a pretty good idea that people were gonna want what we had. The marketing side was the real linchpin issue though.

[00:09:21] Tim Calise: It was, we figured out a way to not just hand out free samples. It really did take off like wildfire pretty quickly. 

[00:09:27] Patrick Donley: I had a similar experience. I was in the entrepreneurial club in college and did the same kind of thing. We made subs, delivered ’em late at night. It was door to door though. It was like knocking on doors.

[00:09:37] Patrick Donley: And it was just like a semester project though. It was just almost like a contest to see how it went. And, yeah, it went well. It obviously went really well for you, it sounds and really turned into a viable business, so that’s really cool. I wanted to step ahead and talk about after getting outta college, you’re entering into the work world.

[00:09:57] Patrick Donley: That transition can be difficult for a lot of people. It’s hard to find the right fit, I think like right outta school. I think it’s very rare to find the right fit right out of the gate. So talk to me a little bit about your experience, like what you did after graduation. 

[00:10:12] Tim Calise: Yeah, so my experience outta college, actually, right?

[00:10:15] Tim Calise: Even right before I graduated was I worked at a large bank. I worked at a division of Citigroup, partially because I had this nagging feeling inside of me that there was supposed to be a way that I was supposed to progress professionally in the world. And now I had all these entrepreneurial endeavors, but it felt kinda that’s fun.

[00:10:36] Tim Calise: That’s kind of child’s play, but when are you gonna grow up and do the thing for real? And so I think I. Didn’t realize it at the time, but that had a really big influence a quite an impact on me at that time. 

[00:10:50] Patrick Donley: So in your mind, like what did that look like? What did real work, what did you think your career was supposed to look like?

[00:10:56] Tim Calise: It looked like and I think trappings of the, you join a company, you’re there for 30 years ascend through the ranks. That was, I think the paradigm that I had in my head was start as a low man outta the totem pole, getting coffee and answering the phones. And one day U2 could be a VP kind of idea.

[00:11:14] Tim Calise: And that very well worn path was one that I, for whatever reason, was nagging at me at that time. That’s what I was supposed to do. And after about six months, and I at this organization and were within this team, the options were you can effectively become a stockbroker. Or you can leave. And I remember very vividly, I was walking home to my apartment and I did the mental exercise of let me run out this path of becoming a stockbroker.

[00:11:43] Tim Calise: Do I like the destination effectively? If everything goes as planned, would I be pleased with where I ended up? And it felt like nails on a chalkboard to me. And so I was like, okay, this is, I am not long for this world. And I was so fortunate, Patrick to have a mentor at that time who I went to when I said, I’m not sure if this is for me.

[00:12:04] Tim Calise: And he said, okay, what would you like to be doing? And just for context, this was right around, this was like the 2003, 2004 timeframe. And at that time, the smartest of the smart though look kinda like what entrepreneurship is today. Hedge funds were the financial equivalent of that at this time. That’s where everybody, all the kind of cowboys were going.

[00:12:24] Tim Calise: And I said, I want to be playing in that world. It’s entrepreneurial. Smartest people are going there. It’s where everybody, you know where all the action is. I was introduced to a guy who was starting a hedge fund, had no money to speak of, I mean like a rounding error. 

[00:12:40] Tim Calise: Collectively. It just I think we had a hundred thousand dollars of investable assets, which is literally nothing to start a company like that. But I said, he said, I wanna be a portfolio manager. I don’t wanna talk to clients. I don’t wanna build a business, I just wanna do my thing.

[00:12:53] Tim Calise: If you wanna build a business around me, have at it, we’ll share the economics. And I said, I need you in New York twice a year, and I need you to write an investor letter once a quarter. Other than that, I’ll just leave me on my own devices. And he said. Fair. So I moved to Birmingham, Alabama of all places, a kid from New York who went to DC to move to the south.

[00:13:12] Tim Calise: And you’re how old at this point? 21, 22. I was like right outta college. I was literally graduated and then moved down a couple months six months later. So graduated in May. Moved the following January. January 1st is I think when I started and we subletted a single office in the back of a CPA’s building in Birmingham, not two pennies to rub together.

[00:13:33] Tim Calise: Basically wasn’t getting paid and said, you know what? This is all upside. We’ll see let’s give it six months and see if we can make it work. And the first six months went decently well. We had enough momentum to keep it going and over the next three years I raised 300 twenty-five million dollars for that fund.

[00:13:50] Tim Calise: Crisscrossed the country, met the biggest investors, the ones that you read on the list of guys that make a billion dollars a year. We had some of those guys as investors to us. So entrepreneurship meets finance, meets. Now I have a real job that could pay me real money, and that was the rocket ship that I was strapped to and right outta the college effectively.

[00:14:08] Patrick Donley: There’s a lot I want to unpack there. So what was the thesis behind the fund? What was the guy that you teamed up with? What was his strategy? 

[00:14:16] Tim Calise: So as a naive investor, I thought going in that our objective was to maximize returns. The who can drive the most returns will win this game. Our strategy was actually.

[00:14:30] Tim Calise: To hit a lot of singles. So our thesis was, it was a long short equity hedge fund, which basically is like a mutual fund, but you can bet against stops as well, stock prices could go down. And so we said we are never gonna be up 50% a year, but we’ll never be down 50%. Our goal is to create 1% returns every month, like clockwork.

[00:14:51] Tim Calise: So we were a consistency thesis. You’re the Pete rose of hedge 

[00:14:54] Tim Calise: funds. A hundred percent. And at the time I was like, that’s boring. I understand it conceptually, but like, when are we gonna go do something cool that I can go and say we had a great month, or what have you. And we stumbled into the ideal situation for two reasons.

[00:15:10] Tim Calise: One is when we were small, as with anyone who’s ever raised money before or done anything, you have to get the ball rolling. So you take $25,000 of capital, 50,000, a hundred thousand until you start to build it to be something bigger. Those funds typically came from investment retirement assets of high net worth individuals.

[00:15:29] Tim Calise: So we manage your IRA or what have you, people who really didn’t wanna lose their money and only wanted kind of small, consistent appreciation. So that worked out perfectly. And so we were able to get a lot of retirement assets very quickly, which helped us to continue to build a base that we could get larger and larger capital allocations from larger investors.

[00:15:49] Tim Calise: Those institutional investors we ultimately got in front of. The biggest allocations we got were from insurance companies. And at the time, I didn’t realize how that the financial model worked. But you pay your premium, you don’t need all that money that has to be invested somewhere. And there’s smarter people than I to figure out how much money they need and when.

[00:16:08] Tim Calise: They would give us the capital and if they were like, you can grow at 1% a month, that’s phenomenal. Our actual table say, if we can make 6% a year like clockwork, we’re happy. You can give us 12, I’ll give you as much money as we can put together. And so we were able to get 25 million, $50 million allocations from a couple of insurance companies.

[00:16:25] Tim Calise: And that is what juiced our capital towards the end. 

[00:16:28] Patrick Donley: So $325 million being raised by a pretty young guy. I want to hear about that. Like how did you gain the trust of people that are managing millions and millions of dollars of assets. That’s, I had the same experience and I look young I really looked young like when I was in my early twenties.

[00:16:47] Patrick Donley: So it was a lot of hurdles, a lot of so I’m curious what your experience was like. You obviously did very well at it. 

[00:16:56] Tim Calise: Yeah, and getting back to where we started the conversation when I was younger, I was the kid who was always more comfortable in front of adults than I was talking to my peers.

[00:17:07] Tim Calise: And that was a little bit of foreshadowing to when I started this process. There was just something about the way that I spoke to prospects and I basically made two promises. I said, we’re never gonna lose your money so you don’t have to worry about at night making sure your money is safe. And number two, you have my number.

[00:17:22] Tim Calise: I will always answer your call. And that sounds simple, and it was. But for context, as I mentioned a moment ago, this is where the hedge fund industry was where all the cowboys were living. And the tone at that time that a lot of these managers had was, Hey investors, you should be lucky to put your money with me.

[00:17:41] Tim Calise: I’m doing you the favor. And that was because these guys had big egos. And I just said, I’m new to this game. I think they’re doing me the favor by giving their trail. It just seemed backwards to me. And so I just said, listen here’s how it’s gonna work. I’m gonna write you a letter every week.

[00:17:55] Tim Calise: You’re gonna make sure you know exactly what’s happening. And I. We built a lot of the initial capital in the early days, starting with twenty-five thousand dollars, and then we earned the trust. We actually get second, third, and fourth allocations from a lot of those folks and that is actually how we in, I do a lot of work in the software business.

[00:18:13] Tim Calise: We call it land and expand. You make that initial sale and then it just continues to grow over time. 

[00:18:18] Patrick Donley: So was both retail and institutional investors that you were raising capital from? 

[00:18:23] Tim Calise: Yeah, in the beginning it was all retail because we’re not big enough to get to meet the mandates and things like that.

[00:18:28] Tim Calise: Once we got to twenty-five million, then most institutions can’t be more than 10% of your fund, which allowed us to get 2 million, two and a half million from some small institutions that got us to 50. And you, yeah, it’s quadratic as most growth. In the beginning it’s really hard to get the ball rolling and then once you do, the momentum really did take us, and then we got 50 and a hundred billion dollars allocations at the end.

[00:18:49] Patrick Donley: That’s fascinating. So that was around 2000. 

[00:18:51] Tim Calise: That was 2004 to 2007. 

[00:18:54] Patrick Donley: So talk to me about that. So we know what happened in 2008. How did you deal with that time period? 

[00:19:02] Tim Calise: October of 2007, we made a decision to call all of our investors together because over the prior six months we saw that the market was behaving, what I’m gonna use the word irrationally.

[00:19:16] Tim Calise: It was not a normal market climate, and there’s lots of reasons why that was. So we as managers either had to change our stripes and adapt, which sounds positive, like adaptation is a good thing, but it really was, we needed to go and do something that we didn’t fully believe in. So we did it. So we started to underperform what the market was doing.

[00:19:35] Tim Calise: Had you moved to cash at that point? We were effectively dollar neutral, so we just didn’t find a lot of opportunities at that time. Just to be really clear, this was when Ben Bernanke, the Fed share, was starting to say the early indications of mortgage defaults in all day mortgages were gonna be contained.

[00:19:52] Tim Calise: This is not a big deal. It was gonna be a huge deal. Everybody when you dug into it, really understood you could watch the big short to see a little bit of the behind the scenes there. But what we saw, the reason, what our version of that was, and I remember the Wall Street Journal in the summer of 2007, ran a story that said, effectively Apple was gonna be a target of a leverage buyout by a private equity firm for something like $500 billion.

[00:20:18] Tim Calise: It was the largest deal ever in the history of, and it had no chance of actually happening. The reason why that’s relevant is because when we were looking at companies that we thought their stock prices would go down, these companies started to get interest from P.E under rumors. And so if we bet against it, stock prices would pop.

[00:20:36] Tim Calise: We didn’t find a lot of opportunities to offset that part of our portfolio, and so we effectively just went to cash by the end of, in the third quarter was when that ultimately came to be. In October of 2007, we said, I gathered all of our investors together, said The world is crazy right now from our perspective, we’ve gone to cash.

[00:20:55] Tim Calise: We are going to waive our fees effective immediately, but you have to leave your money with us and we can use it. We can go and deploy it. Whenever we feel like the market, the environment is now more conducive to what we’re doing. That was option A, where option B is, you can take your money and 97% of the people said, you guys have lost your touch.

[00:21:14] Tim Calise: You don’t know what you’re talking about. All these other people say that everything’s gonna be fine. We’ll take our money. And so 1231 of oh seven I. Wired gave back, released all 300 twenty-five million dollars voluntarily, and we returned all of our capital. Wow. So that was the end of the fund. That was, it wounded up by the end of June of 2008.

[00:21:34] Tim Calise: The fund was closed down. We went through tax and audit and all of those types of things and I was a free agent again. 

[00:21:40] Patrick Donley: So I’m curious, your partner, what, is he still managing money? Like how did he, you 

[00:21:45] Patrick Donley: guys made the right call. 

[00:21:47] Patrick Donley: You know you were, but it’s not what your investors wanted to hear. They wanted the consistent singles.

[00:21:52] Patrick Donley: Yeah. That’s fascinating. They, the majority of them sounds like all of them wanted the get their cash back. 

[00:21:58] Tim Calise: Yeah, it was, they all did. Effectively. And it was interesting because. The hedge fund world and investing investment management in general is A, What have you done for me lately? Kind of business.

[00:22:10] Patrick Donley: That’s the same bernie Madoff time 

[00:22:11] Patrick Donley: period too, right? 

[00:22:13] Tim Calise: Yeah. Was that a little right around that same time he that all fell apart shortly after. But yes, that was when he was on his great extent and was a big player in the industry. But yeah, so although we had done very well over the course of the couple of years, it didn’t really buy us a lot of confidence to be quite frank.

[00:22:30] Tim Calise: At that time people said other folks think that they can play well in this industry in this market and if you can’t, I appreciate everything you’ve done, but we’ll take our ball and go home. And luckily in the moment, it was one of the most painful things that had happened to me at that time.

[00:22:43] Tim Calise: ’cause I put my blood, sweat and tears into raising this money and right when we were gonna monetize it and all of that kind of stuff we get paid very handsomely. It all stopped. But long term I kept an asset, which was probably ended up being more important, which was the role of Dexadult investors that came back at the end of 2008 and said, I should have listened to you.

[00:23:03] Tim Calise: You were a good steward for years and I regret not heeding your advice. And so I still keep some of those relationships. To this day,

[00:23:12] Patrick Donley: I remember it was probably the summer of 2007, I had a friend who was a mortgage broker and I remember him saying that he felt like he could literally print money and he was doing all these, whatever the liar loans and sub prime loans.

[00:23:27] Patrick Donley: And I just remember thinking at that time, this is not going to end well. The writing the clues were all there. I think it’s just hard to see it. I think the aspect of greed and whatever is just a big part of human psychology and we just want more and more. 

[00:23:42] Tim Calise: Yeah, absolutely. It was fine on a personal that I had bought a lot to build a house in Birmingham, and again, I’m 22, 23 at that time, and I remember going to the bank and I didn’t have all of our money was basically made on bonuses effectively at the end of the year, depending on how we did.

[00:24:00] Tim Calise: I remember submitting the paperwork, and again, I’d never, this was about the first house I ever bought and I think I made my base salary. It was like forty-five thousand dollars a year. It wasn’t anything crazy. And they came back and said, you’re pre-approved for two and a half million dollars.

[00:24:13] Tim Calise: And I went, holy mackerel, this is so easy. And then I called my parents and I was like, I know I got a two and a half million dollars loan. And they’re like, this is not normal. So just so you know, but it got me thinking of it when all of this was starting to coalesce around the market, going off the rails, these, all of these like little experiences all lined up to say this is, this doesn’t smell right.

[00:24:34] Tim Calise: And luckily we heated our gut and stick to our morals. 

[00:24:37] Patrick Donley: So you’re ready for a new chapter at this point. I know that you got into the franchise world a little bit after that. So talk to me about how you decided to get into the franchise world and the specific industry that you ended up in.

[00:24:52] Tim Calise: Yeah, so we were in Birmingham, my now wife. I had convinced somehow to move down and we lived in Birmingham with no family around or anything like that. The work was really the only reason I was there. And so when we shut the company down, we moved back to the Northeast, which is where my wife and I are both from.

[00:25:08] Tim Calise: We moved to Cape Cod, Massachusetts and there were no hedge funds in that area. There were not a lot of opportunities and we said, one of the piece of advice my dad gave me very early on, and I remembered it was, choose where you wanna live first and then figure it out from there. And so we said, all right my in-laws were there, which, and they’re fantastic people.

[00:25:26] Tim Calise: Let’s move there and then I’ll figure it out. My wife and I were division one athletes. That’s how we met in college. And so fitness was always important to us. And I’ve, being a self-proclaimed kind of nerd. I always love computers, I love technology, all that kind of stuff. And my wife, when we moved Googled personal training in the town where we were thinking of moving and there was a banner ad for this company that said, automated personal training twenty-four seven three sixty-five.

[00:25:52] Tim Calise: And so she clicked on it and said, and it was this new concept that basically took the person out of personal training and replaced it with technology. It was prescriptive strength training. And so she showed this to me and she’s super interesting. I’m gonna go take a tour. So she did and she said, this is unlike anything I’ve ever seen.

[00:26:07] Tim Calise: It’s pretty neat. And I called the founders, I found their information and I said, are you taking investors? This is a neat concept. And they said, thanks, but no thanks. We’re fully funded. We just closed our, I think it was Series A at that time, but we’re starting a franchise.

[00:26:21] Tim Calise: Do you wanna become a developer? So we became members and checked it out, was really loved it. And so we became franchise developers under this kind of new franchise, mostly because it was a technology company mixed with kind of this idea of we liked fitness and giving back to the market where we wanted to live.

[00:26:37] Tim Calise: We wanted people to be healthier and the moral thing that, that was related to that. And so we got into the franchise business and built from, built a seven-figure gym business over the next couple of years. 

[00:26:47] Patrick Donley: So was it, were there physical locations? You said it was technology-based.

[00:26:51] Patrick Donley: So tell me like how, as a gym member, what did it look like? 

[00:26:56] Tim Calise: So the concept was, if you remember the old universal machine, the single machine with all the arms and legs on it, the initial prototype was that wired up with sensors and put a screen on the front. So think about the experience when most people walk into a gym, 90% of people either do cardio only because weights are a scary thing and I don’t know what to do.

[00:27:17] Tim Calise: And that’s for other people. The 10% that do it, most of the 10%, 9% of them do it wrong and they get injured, they go out too fast, all those types of things. And so we solve for all of that. So the experience was a physical location in usually a strip mall or somewhere nearby in a neighborhood center.

[00:27:34] Tim Calise: You would walk in twenty-four hours a day, seven days a week, and it would say good afternoon, Patrick. Today we’re gonna do these seven different exercises. We’re gonna do it at this weight and we’re gonna do it at this pace. So it took all the thinking out. You didn’t have to do exercise selection, you didn’t have to worry about form and pacing and all of those types of things.

[00:27:54] Tim Calise: And it was all optimized. Understanding where you are today. Where you want to go in over the next year. And we took that into account. So it was a software and a hardware business and it physical locations. And we ended up, the franchise ended up having about 150 locations in 29 states over the next kind of three or four years.

[00:28:11] Patrick Donley: And like it was Cocoa fit? 

[00:28:14] Tim Calise: Yeah. K-O-K-O Fit Club, K-O-K-O, that’s right. Yeah. It means one-to-One or individual in Japanese. 

[00:28:20] Patrick Donley: Okay. Interesting. So you started with one, you ended up with a total of 

[00:28:24] Tim Calise: We, we ended up with eight at one point. 

[00:28:26] Patrick Donley: Okay. And do you still, are they still around or you still operate them or how did that unfold over the years?

[00:28:32] Tim Calise: Yeah, so we grew to eight and then we can circle back to this now a very famous YouTube influencer in the business community. And it gave me the advice to go and sell my gyms and go do something else. So that was when I met Alex and Leila Hermosy for the first time in 2018. He told me to go sell my gyms.

[00:28:49] Tim Calise: So we exited in 2018, the AR owning our own units. At that point. 

[00:28:54] Patrick Donley: So let’s get into that. How did you guys connect? What was, I know a little bit about Alex. It’s hard to not he’s pretty ubiquitous everywhere and he is done very well. So how did you guys meet and connect and why did you listen to him?

[00:29:09] Patrick Donley: What was it about him that like you decided to take his advice? 

[00:29:13] Tim Calise: The strength of our, of the franchise developer, the franchisor of Coco, was they were phenomenal visionaries on the equipment and the software side. They were technologists. The business model, in my opinion, could have been better.

[00:29:26] Tim Calise: And so as we were developing these kind of five and then eight locations, we ended up acquiring a another three unit chain. So we got to eight locations and I said, I understand the dynamics of this business. We need to do some other things above and beyond kind of what other clubs had been doing. And so I was really tinkering with the business model and I did it from a boots on the ground.

[00:29:47] Tim Calise: This is what I’m seeing and I’m, we’re talking about basic things like we wanted to have multiple tiers of membership. We wanted to have different packages to suit different people. We got into small group training. This was the rise of CrossFit was around the same time. Luton wasn’t on the scene yet, but some of the like digital fitness brands were starting to come up at that time.

[00:30:09] Tim Calise: And so we introduced some technology into like heart rate monitors and things like that. And I was playing with all of this. And then one of the other franchisees said, I saw an ad for this guy, Alex Seals, this company called Gym Launch. And I had a call with him and he said, it’s interesting, you should have a call with him too.

[00:30:27] Tim Calise: So I called him and I said I have no idea what this is all about. I’m in a franchise, but what do we wanna do? And he gave some advice to us and we went and implemented it and it worked out really well for us. And so this was 2018, 

[00:30:41] Patrick Donley: Alex’s whole at that time his thing was advising gym owners how to become more business minded, profitable market things better.

[00:30:48] Patrick Donley: Is that correct? 

[00:30:50] Tim Calise: Yeah. So the very quick background on Alex was, he was a gym owner. He is, he went to Vanderbilt, was actually in the intelligence space. He worked for basically an NSA level company organization. Didn’t wanna do that. Was not his cup of tea. Moved to Southern California. He’d always been a gym guy.

[00:31:06] Tim Calise: You can see just his stature. He was a, he’s been a powerlifter for a long time. He said I wanted to own a gym. If I’m gonna own a gym, I’m gonna go to the most competitive market in the country. ’cause if I can make it there, I can make it anywhere. Packed up his car, drove cross country, went to Southern California, opened a gym.

[00:31:21] Tim Calise: If you see, for those that have seen some of his stuff, there’s a picture of him like sleeping on the floor of his gym. That was the early parts of when this was. And he figured out that he was really good at sales. So we built a bunch of gyms and then his mom got sick and a few other things.

[00:31:36] Tim Calise: He exited owning gyms and he started to fly out to other people’s gyms. And this is where gym launch comes from. Under the model of if you’re gonna open a gym, you can hire me to come out to your facility, I will sell the first round of members of yours. And the deal is I keep all the upfront cash and I hand you a member.

[00:31:58] Tim Calise: Is agreed to pay you for the next 12 months. Those, that was the basic economics. And he would run the ads, he would set the sales appointments, he would take the sales appointments, he would sell, the people, collect the money, the whole nine yards. And so he did it for one and it worked. Then he did it for two and then three.

[00:32:14] Tim Calise: And then demand came. So he started to build a team of people who were flying cross country, staying in the extended stays and all of that. And then it got to a breaking point where all of the people on his team went, I’m gonna be on the road, fifty-two weeks a year. My wife’s gonna divorce me. I hate that.

[00:32:29] Tim Calise: Life actually happened. And so he shut it all down. And that is when somebody came to him and said he canceled one of his upcoming trips. And the person said, I really need you. Can you just tell me what you would’ve done if you were here? Just gimme the instruction manual effectively.

[00:32:44] Tim Calise: That is how Alex went from physically selling to creating an IP business, a licensing business. He said, yeah, here’s what I would do. Take my playbook and see if it works. And it did. This is awesome. Like I can go and sell information instead of selling me getting on a plane. And that was the beginning part of how do you take a gym and implement a business system that allowed you to make more money than you otherwise, but would before?

[00:33:09] Tim Calise: And it had every playbook. How to write the ads to run, the systems to work, all of those types of things. And it worked very well and went from zero to basically $40 million a year in revenue in two and a half years. 

[00:33:20] Patrick Donley: And they have since sold Gym Launch. 

[00:33:23] Tim Calise: Yeah, we sold two a little over two years ago.

[00:33:25] Tim Calise: Yeah. We sold two thirds to a private equity fund. 

[00:33:28] Patrick Donley: So he’s got, his book is a hundred million dollars offers, I believe. What is it about him his belief systems or his skill sets that has made him this phenomenal entrepreneur? 

[00:33:39] Tim Calise: Yeah. So the basics of why gym launch was so effective. Was, if you think about the gym industry and go back 10 years or even five most gyms to acquire a customer did some kind of free offering.

[00:33:55] Tim Calise: Try a free class, a free day, a free week. Even Planet Fitness today is a dollar down $10 a month. It was all low ticket. And Alex had the vision to create a business that had a high ticket front end offer because it allowed you, it gave you the cash, the fuel to do a lot of things that were obviously that virtuous cycle of high ticket.

[00:34:18] Tim Calise: So he launched a six week transformation challenge, was the effectively the offer and it was $600. So part of the gym launch concept was not just, he was really good at sales and advertising. It was, we now had a vehicle to drive cash flow into, drive cash into a gym, which are chronically undercapitalized.

[00:34:39] Tim Calise: That was the first domino to fall. What was so unique about him, number one was he was a visionary in the space. He also do the gym industry inside and out because he’s been doing it since he was in high school. But he understood the industry. He understood the pain points, and he understood what needed to happen, and he had the vision to buck the trend and do something that everyone else thought he was crazy do.

[00:35:00] Tim Calise: That’s from the business perspective. The reality is, in this market, he is one of the smartest people I’ve ever met. He is singularly focused and driven, like no one I’ve ever met. From a kind of cognitive dissonance, like your brain doesn’t understand what’s happening. He’s as smart as an NSA level guy, and he looks like a lumberjack.

[00:35:19] Tim Calise: You wouldn’t expect a kind of PE level nine-staker guy to wear Crocs and a flannel shirt on stage. Everywhere he goes, he’s a walking, talking pattern interrupt. That’s the reality. But he is so sharp and my experience with him, I worked basically shoulder to shoulder with him for a couple years.

[00:35:40] Tim Calise: He has an ability to distill the things that are we talk about kind of Pareto’s law, the eighty-twenty rule. He focus on the 20% that yields the 80% of value he has, like the 99%, 1%. He is wired to understand like, if I just hit this one thing, it’s gonna move mountains. He, we use this phrase, and he uses it quite a bit, which is the small hinges move big doors.

[00:36:03] Tim Calise: He was myopically focused. On the things that he understood to be the only things that matter. He talks about it today. It’s like the season of, no, I worked alongside of him during his season of no, and he did nothing but worked through making sure that Gym Launch became as big as it could be and as impactful as it could be.

[00:36:22] Patrick Donley: Say more about that. The season of, no, I’m not familiar with that. 

[00:36:26] Tim Calise: So he talks about this idea of effectively shutting out the outside world to create an extreme level of focus. Do you want to come hang out? Do you wanna have dinner? No. Do you want to come and watch the game? No. Do you mind giving me five minutes for coffee?

[00:36:45] Tim Calise: No. It was probably close to 18 months that he did nothing else other than he didn’t really see anyone outside of work. It was like, I am, this is my time striking while the iron is hot and unlike anyone I’ve ever seen, he understood exactly what needed to happen and he built walls around his attention and no one could get to him.

[00:37:04] Tim Calise: It was unbelievable and it was, it broke so many beliefs for me. ’cause I thought I knew what productivity looked like. It was a child’s play before that. It fundamentally rewired what speed was, what focus was. It’s probably one of the best experiences I’ve ever had as far as a professional development experience.

[00:37:23] Patrick Donley: So you sold the eight gyms and then what happened next? You then teamed up with him to help him with gym launch. 

[00:37:31] Tim Calise: So the transition there was after I spoke to him about our business model in January of 2018. Alongside the consulting business that we just talked through. GymLaunch also started a company called Prestige Labs.

[00:37:44] Tim Calise: It was a supplement brand underneath the GymLaunch umbrella, and in January of 2018, they launched a, like a sales competition. I think it was 2018, and the top 10 sellers of Prestige Labs won a trip, a pay trip down to meet Alex and Leila and have a consulting day. That was the payoff, and I was in one of those 10.

[00:38:04] Tim Calise: So fast forward six weeks, we all fly down, we go work out at his home gym, and we’re having the day and we’re sitting at his dining table at his house. He had Leila and I think there were eight or 10 of us and everybody going around, it was like, all right, what’s your biggest problem that you can, I like click Solve It right now was basically an ad hoc consulting arrangement with that he was doing, and it was, how do I hire people?

[00:38:24] Tim Calise: How do I train my people? All these kind of very tactical things. And it came to me and I’m like, I don’t have any of these questions ’cause I really I’m not passionate about the fitness business. And he goes, you should sell your gyms. You’re far too smart for doing what you’re doing. And to use his phrasing, he goes, you’re in the wrong opportunity vehicle.

[00:38:40] Tim Calise: And I said, okay. I needed the permission to get out. And so I basically sold my gyms and this was like February or March of, I believe it was 2018. And then June, my phone rings and it’s a number I don’t recognize. And for whatever reason I picked it up and he goes, Hey, this is Alex or Rosie, hi.

[00:38:59] Tim Calise: Is there something I can help you with? And he goes I remember our conversation and I am thinking about doing the, I have a, an opportunity and here’s all the information, here’s how I’m gonna structure it, what do you think? And I said, do you want me to tell you’re right, or do you want me to tell you what I think you should do?

[00:39:14] Tim Calise: And I guess that was I, this wasn’t Alex like on the pedestal, Alex, that everybody knows now. It was like just some guy. And I said, I think you’re completely off base. He goes, interesting, tell me. And I said, I think you should do this, and this. And he goes, that’s so much better. Thanks. Hang up the phone.

[00:39:28] Tim Calise: And I think it was like a month later, he called was like, we’re building out the executive team here. This thing is going well. Do you have any interest in? And I think I actually applied, I think I was following him or something and he said we’re hiring a CFO or a finance person or something.

[00:39:41] Tim Calise: And I said, Hey we’d love to do something with you. I’ve enjoyed our conversations. And he goes, I can, there’s this like business development role that I have and I have a CFO role. And I said, I’m not an accountant by trade. I know enough to be dangerous. And then he goes, fair enough, I’m gonna hire a CFO.

[00:39:56] Tim Calise: Do you want to come over and basically help lead the company on a business development perspective? And I’m like, great. Perfect. So June I started and the rest was history. I basically, it was. Strapped to a Rocket ship Gym Launch was going from zero to, I think when they were on pace to do a million a month or a million and a half a month at that point.

[00:40:14] Tim Calise: And then we launched perceived labs to 25 million a year in revenue. And then the following year I built a software product underneath the gym launch umbrella, which was my pet project. 

[00:40:23] Patrick Donley: Has he since gone on to do the same model but in different industries, like outside of the gym world? 

[00:40:32] Tim Calise: Yeah, so he short transition on how things came to be, that software product that I mentioned, and I can explain why it was relevant, but the it was an automated lead gen software.

[00:40:43] Tim Calise: So imagine. Somebody goes to your website or they fill out a form and first name, last name, email address, phone number. In the fitness business specifically, that is a very weak point in the fitness business process to get that lead to show up in the facility for sales consultation, working leads is one of those things that is like oil and water.

[00:41:03] Tim Calise: For most gym owners, they just wanna be training. They don’t wanna do the business. And so the numbers were one out of eight leads would ever show up in a facility. Seven out of eight just disappeared into the ether. When we started with GymLaunch, and even when I was running my gyms, we used to be able to get leads for twenty-five cents in 2012, 13, 14, 15 by twenty-eighteen, twenty-nineteen.

[00:41:26] Tim Calise: It was twenty-five dollars. Just to give you a sense of scale. So when you’re paying twenty-five cents and one out of seven seven out of eight disappear, you can still, and you’re selling the one into a $600 program. The numbers work. You’re paying twenty-five dollars. You care a lot. We said we tried to teach gym owners how to work leads.

[00:41:43] Tim Calise: We told them the business model, we gave them the staffing model to give ’em the scripts. They just didn’t do it. So we said we’re gonna solve the problem for them. So we built a automated lead gen product that took the lead, nurtured it, got them scheduled and got them to show up for sales appointment.

[00:41:58] Tim Calise: Is this via email or is it how? How was that structured? 

[00:42:02] Tim Calise: sms, but I had a two person data science team and a 30 person software development team that built this product, and we launched it in January of 2020. Officially January happened. Started to take off February, march, you could see where this is going.

[00:42:19] Tim Calise: Then we ran headlong into Covid and we were, we trained the model to get people to walk into a gym. Of course everybody went online almost overnight, effectively, overnight. And so we retrained the model to get a prospect to show up for a Zoom consultation. ’cause that’s where all the coaches were.

[00:42:36] Tim Calise: That took us about a week to get that right and trained. And after the numbers started to look good okay we’re getting leads to show up to Zoom calls with coaches and with gym owners and stuff like that to do virtual coaching. It took us about another three seconds after that to look at each other and went, we just got a web lead to show up to a virtual consultation via Zoom.

[00:42:55] Tim Calise: We can do this for any industry as long as it’s high ticket. So that was one of, so then we started to work with we ended up in 30 different industries over the course of 2019. Anything that’s high ticket from med spas to float tanks, to acupuncture, to Invisalign, as long as it’s high ticket and recurring, you were in our market and we grew that business.

[00:43:16] Tim Calise: We were doing 1.7 billion a month inside of six months with that product MRR. So 20 million a year, ARR. So through that experience, what that also allowed us to do was consult with all these different industries, 30 different industries. And Alice was phenomenal at wa. Just watching him almost break the businesses apart and rebuild them in a similar fashion as he did with gyms.

[00:43:39] Tim Calise: And it was like, okay, this is really interesting. And then they started to, we basically redid how a lot of these companies worked. And so he then moved after the gym industry, then moved into what is now Acquisition.com, which is a. Basically coaching and partnering with service businesses, primarily service and info businesses, and that’s the early stages of acquisition.com.

[00:44:00] Patrick Donley: Fascinating. And so you’ve since gone on to advise startups, correct? 

[00:44:05] Tim Calise: Yeah. Alex is phenomenal. So Alex is one of the best visionaries I’ve ever seen. Great business models, et cetera. And Layla is one of, if not the best operators. She’s a talent, love both of them. They’re both independently amazing at what they do, their talent.

[00:44:22] Tim Calise: Would be wasted with someone who’s doing a million dollars a year in revenue, they are like 10, twenty-five hundred million, let’s go where the big levers are. I know myself and I get excited about, and maybe this is probably something early in my childhood that you could trace back to, but this like David and Goliath idea of, I care deeply about helping the small guy shift the balance of power in their favor.

[00:44:48] Tim Calise: And so I actually have a podcast called Leveling the Field, and that is to speak to this idea of how do I. Stack the deck and have a lot of the new entrepreneurs that I can work with not face the same level of failure that that typically is out there in the marketplace. And so I specialize in the sub $3 million, three to $5 million a year revenue businesses.

[00:45:08] Tim Calise: Alex does the bigger stuff. And so we are still close, but I focus on the smaller end of the market. 

[00:45:14] Patrick Donley: I love that kind of the underdog. I love the smaller market that I think it’s like the backbone of America small businesses. So 

[00:45:22] Tim Calise: Yeah. In, in school obviously, I mean I have a teenager now and you think about the grades you get and it’s I got an A in this, an A in this and I got a B in this.

[00:45:31] Tim Calise: And the first inclination is how do we get the B two an A translated to how do I take a weakness and somehow turn it into a strength? And this is everybody believes something different. But I went from trying to learn all sorts of new skills and become something that I wasn’t to just stick into my knitting and people systems and if I woke up every day to run big teams, I would hate my, I just wouldn’t be excited about it. Layla, you cannot it is an inquisitive thirst to get in front of people and manage teams, and it’s just not in my forte. I love product. I love pricing. I love the kind of the use of my, I have a ten-year-old son who loves Legos.

[00:46:13] Tim Calise: I like taking the Legos apart and rebuilding them into something hopefully more optimized, and that’s where I get the great fortune to live each and every day. Yeah. 

[00:46:22] Patrick Donley: That’s awesome. I love that. So when you’re going in and working with some of these businesses, they’re recurring, is it still like subscription recurring revenue type businesses?

[00:46:32] Tim Calise: Yeah. My belief is, and I think we’ve all seen this in some way, shape or form, you can sell something to someone one ton that’s marketing, acquisition, etc. Getting someone to stay long-term is both a trickier prospect proposition. But driving LTV is just where I like, I’m just wired to do it. Understanding that the hardest part of the whole thing is to acquire the customer.

[00:46:56] Tim Calise: If you can acquire the relationship and then monetize the relationship over time, you have a great chance of actually creating incredible economic wealth for yourself and a lot of value for the customers that you wanna serve. And so that’s where I live. Memberships, subscriptions, anything with a recurring revenue or businesses that want to install recurring revenue in their business.

[00:47:15] Patrick Donley: So gimme some examples of some of the types of companies you’re working with. 

[00:47:20] Tim Calise: So I have a non-medical home care business in the Northeast. I’m helping them both on that business, but what I came to realize very quickly and why I partnered with them, with the founder was he had created all of the playbooks and SOPs to actually launch a very high performing, high margin non-medical home care business.

[00:47:41] Tim Calise: So we took all the IT and put it in its own wrapper, and now we sell that as a course and a. Consulting arrangement, things like that. We think that business will go from zero to, will hopefully cross a million in revenue with 90% margins in twenty-twenty-four that didn’t exist a year ago. So I have that.

[00:47:58] Tim Calise: I have a technology business in the real estate space, pure software, so I work with them pretty closely. I have someone in the podcast space who’s in the. Production acquisition space. So probably a little bit of I get bored easily, probably if you trace it all the way back. But I like the challenge of working with all these various types of companies.

[00:48:18] Tim Calise: I have a company actually in Australia that I’m talking to right now, who’s, they do golf simulators and experiences and they’re trying to figure out how do I build a membership business there. I have someone who’s in the is starting actually relaunching a company that helps pair large companies with event spaces.

[00:48:37] Tim Calise: It’s actually a big issue, I guess right now. Think almost try to do like a restaurant, like Rezzy, but how do you actually do that for large events? So we’re looking at that as a business model across the board, but it, they all have some basic fundamental building blocks that we instill in each of those businesses.

[00:48:55] Tim Calise: So you’re not getting bored for sure. No, I love the challenge. Quite frankly, what it allows me to do is to understand and continue to drive my thinking. And then I can look at like, how does it apply to these different industries? Because there’s actually a lot of similarities in the process, even if the product is a little bit different.

[00:49:13] Patrick Donley: I’m just curious, have you done Strength Finders 2.0? Have you ever done that? 

[00:49:18] Tim Calise: I’ve done most of them. I haven’t done Strength finders in a number of years. In a number of years. 

[00:49:22] Patrick Donley: You’ve gotta be a learner, I would think. It seems like you love to learn and assimilate information pretty quickly and easily, 

[00:49:29] Tim Calise: and I think for me, I was a builder for a long time.

[00:49:32] Tim Calise: It was that kind of avatar and now I’ve shifted the balance to be, I’m equal parts builder, but also mentor coach. I think I’m now finding a little bit more balance in those two things, so I can both learn. Package and implement gets me very excited every day. 

[00:49:49] Patrick Donley: Yeah. So when you’re coming in and working with a company initially, what are some of the biggest mistakes you’re seeing them make?

[00:49:56] Tim Calise: So I use some of the same principles that we built gym launch on, so one of them being profitable acquisition. So many companies right now don’t think about how they acquire, how they can acquire a customer at a profit. So let me break that down for you. What that means is, in very simple terms, most people look at advertising and promotion as an expense, and you might call it an investment, but usually a long-dated investment.

[00:50:23] Tim Calise: I spend a hundred dollars today and my LTV is a thousand dollars. I’ll get my money back over time. What we install immediately is we understand what our customer acquisition cost is and we understand how we’re going to scalably acquire the customer. And then we have a product that first. Buying decision pays us back for that acquisition.

[00:50:45] Tim Calise: And ideally the first one is one-to-one. And then our primary metric is a two-to-one ratio. So they pay for that customer. And the next one, the real estate software business that I mentioned earlier, their LTV, their lifetime value of a customer will ultimately be somewhere in the 10 to $25,000 range.

[00:51:04] Tim Calise: But being a startup, it’s great, we’ll take $25,000 over the next five years. Fantastic. But what about cash today? So we have put in place we believe our customer acquisition costs will level out at about a hundred dollars per paid user customer. So we now have a $299 front end offer that we are converting at a very high rate.

[00:51:25] Tim Calise: Is it the end of the world? No. Is it gonna pay us back and more? Yes. So what we’re doing is we’re basically siphoning circling those same dollars over and over again. And now we effectively have an unlimited marketing budget. That’s interesting. So are you doing all aspects of a company?

[00:51:42] Patrick Donley: Are you looking at their cash flow, their marketing, their lead generation operations? Are you breaking everything down or do you focus on things like lead generation and marketing? 

[00:51:52] Tim Calise: So we do a diagnostic I run a diagnostic program basically across the organization. Understand where the biggest opportunities are.

[00:51:59] Tim Calise: I am not, I can’t be the best in the world at everything. And that was something I realized very early on. What I am very good at is to use that Lego analogy, is breaking the company apart and putting the bricks back together again. And I have people both on my team as well as people that I work with in, in concert who are, if you wanna run a funnel, for example, I’m not the best funnel builder, I’m not the best headline writer, all those types of copywriter, et cetera.

[00:52:24] Tim Calise: But I have people who are probably the best in their field at each of those. And so we’ll go and work with them kind of in a collaborative format. So yeah, I’m smart enough to know what I’m good at. And it really is the structural pieces. I build the skeleton, the tactical execution. I usually will go to the expert in each of those areas, like affiliates.

[00:52:43] Tim Calise: I have one of the best affiliate marketers in the marketplace today to build all of our affiliate programs. I have, like I said funnel builders, I have copywriters, I have video folks, etc. Etc. So I I have built a bench, if you’ll, 

[00:52:57] Patrick Donley: Small businesses are desperately in need of something like this because they’re wearing all the hats when they’re often I talked to a guy yesterday who’s running a.

[00:53:05] Patrick Donley: It’s a service blue collar kind of business, but he was doing everything. And when an employee calls off he then steps in. So you don’t have time to do some of these things that you’re talking about. 

[00:53:18] Tim Calise: It’s so interesting you use that example because that is how I, that’s how the conversation will start, which is what’s broken?

[00:53:24] Tim Calise: Just tell me, gives you all, let’s lift up the rock and tell me what’s what’s under there. And they’ll say something like that. I don’t have enough money to hire the team. I’m doing everything. That’s the symptom. What’s the root cause? It’s like your margins aren’t there. You don’t have the right kind of pricing model.

[00:53:39] Tim Calise: You don’t have the right product stack. So we actually take the feeling they have and then get it down to how can we trace that back to the source? And the source usually is, I don’t have enough cashflow. I can’t hire a team. Okay, what are you paying them? I’m paying them peanuts.

[00:53:54] Tim Calise: Okay, so you’re getting you pay peanuts, you get monkeys. Like you follow all these things through. It’s so if you had the type of budget to hire an A player, would your business be different? Yes. Okay. So what business do we need to have? And I, people that work with me are probably sick of hearing this, but I use the phrase all the time, what needs to be true for you to have the thing that you need?

[00:54:15] Tim Calise: I need to hire the team. I need to not be doing everything. What in the business today needs to be true for you to not be doing everything. I need to have more cashflow. What needs to be true for you to have higher cashflow? I need better product, I need better, blah, blah, blah. And we just keep going. It’s like asking the why question.

[00:54:31] Tim Calise: At some point you’ll get to the end of that threat. And so in most of these cases where you’re working with these companies, are you ultimately working to have some kind of exit strategy in most cases? Or is it how do you think about that? 

[00:54:47] Tim Calise: So I take an equity stake in every one of the companies I work with right now as a core client.

[00:54:51] Tim Calise: And the reason for that is, again, going back to like when I came into the hedge fund industry, I was like, I’m naive. I don’t know what I don’t know. I am not a consultant. I also don’t call myself a consultant. I am a strategic partner. And what I mean by that is I don’t wanna do a, you pay for advice and I am not tied to the outcome.

[00:55:10] Tim Calise: Yeah. Your incentives are now aligned a hundred percent. And it never sat well with me to say. Pay me X dollars and I’ll tell you what I know. It just, the alignment wasn’t there. And so that’s why I do it that way. So in some cases there’s three levers that we pull. So one is equity, the second is a percentage of cashflow, and the third is any kind of base cash compensation, depending on the company.

[00:55:31] Tim Calise: We deploy one or most multiple of those just to align interest. And some people don’t want to give up equity. So we’ll play with those ratios. But effectively that’s how I have structured my own business because I want to be able to wake up and you want me waking up in the morning thinking, how do I make Patrick as much money as I possibly can today?

[00:55:48] Tim Calise: And that was the best way I could figure how to do it. 

[00:55:51] Patrick Donley: It makes so much sense. So you’re running or working with multiple businesses, so I’m curious how you’re balancing your life, like you’ve got a family, we talked about that you’ve got three kids. How do you maintain equilibrium through all of this work that you’re doing?

[00:56:05] Tim Calise: Yeah, so in the beginning I did a horrible job doing it, but I took messy action and figured out what I didn’t to find out what I didn’t know. In the beginning of this process, over the last, you go back 18 to 24 months, I was too deep in the execution part of what I was doing. So I was both kind of guidance strategy as well as execution, and I was running myself ragged, number one and number two, I, It was like this carte blanche of.

[00:56:28] Tim Calise: You’re paying me a little bit, but I’m also spending a million hours doing things that I shouldn’t be doing, and I realize the error of my ways. And so now I really spend on average 30 minutes every week or two with these companies, 30 to 60 minutes. But it’s not a huge, and by my total universe, I wanna have about 20 companies that I work with over the next couple of years in this format.

[00:56:50] Tim Calise: So it’s not hugely taxing in that respect. And then of course, I’m always giving them advice and they have access to me in other ways. So it’s not a time issue. It’s not like I’m burning the candle at both end. I coach my kids lacrosse team. I put my kids to like on the bus in the morning. I pick them up in the afternoon.

[00:57:06] Tim Calise: I have done the work 18 to 20 hours a day, eight days a week. I, Whether right or wrong, I’ve chosen to, to prioritize what I do and my metric is what’s my dollars per hour and that’s how I’m accountable to my wife, which is like if I’m spending time, it’s highly leveraged time. I’ve just learned that I am and a great book that I’m reading right now.

[00:57:28] Tim Calise: If you have not read it, Dan Martell’s, buy back your time. For anyone who doesn’t know Dan Martell is a phenomenal guy. He’s on YouTube and others. He runs a company called SaaS Academy, and he is the number one coach to software company founders and CEOs. He’s built and sold multiple businesses of his own.

[00:57:48] Tim Calise: He just had Richard Branson, I think on his podcast not that long ago. He wrote a book called Buy Back Your Time, and it is the playbook if you feel like you’re spending too much time and burning the candle at both ends and all of us. You have to read it. It is the best book that I have read recently in this space.

[00:58:07] Patrick Donley: I’m gonna put it at the top of my audible list here to listen to because it’s something I desperately need. I think it sounds really good. I wanted to ask this one last question before we wrap up. Beyond professional advice that you’re giving, is there like a piece of philosophy or worldly wisdom that you frequently are sharing with people that you’re interacting with and working with and partnering with?

[00:58:29] Tim Calise: Yeah, really good question. One of the things that I didn’t realize explicitly, I knew it intuitively, but somebody articulated it in a way that was really valuable for you. And I said, we were just talking. I was like, what? How do you, when you tell someone that you’re working with me, what do you say?

[00:58:44] Tim Calise: And they said, the thing I appreciate the most is that you lend your confidence in me when I need it the most. And that has stuck with me and that, so the things I think about are. Phrases like you can’t read the label from inside the bottle. And I am a big believer in mentors in being surrounded by other people because it’s both.

[00:59:09] Tim Calise: They give you insights that you can’t see. How often is you’ve, have you gotten a piece of advice if you’ve ever, and it’s oh, it was right in front of me. Like it was so simple. It was right there, but I didn’t see it. The more opportunities you have for someone else to give you those insights, the faster you can move.

[00:59:26] Tim Calise: And of course, the network effect of having mentors and a mastermind group or however you build that is what I think about a lot because everything that I’ve ever done, the through line has been. Not luck, but actively pursuing people who can give me sound insights and then going and actually following those insight.

[00:59:48] Tim Calise: Yeah. And 

[00:59:48] Patrick Donley: That whole idea leads to, you’ve got this idea about compressing time so having those people in your life allows you to do that, right? 

[00:59:57] Tim Calise: Absolutely. It’s one of those, we actually talk about paying the ignorance tax I wanna make a million dollars this year, but I, right now I’m making $300,000.

[01:00:06] Tim Calise: It’s so you are paying a $700,000 ignorance tax for not knowing or not having the belief systems or the tactics to make a million dollars fill in your numbers. However and I think a lot about that ’cause it’s okay, would I pay $20,000 to know how to make a million dollars In that case, would I pay a hundred thousand dollars?

[01:00:23] Tim Calise: I pay 500,000. Yeah. ’cause I’m gonna do it for the rest of my life. And this is where you get into this kind of chicken and egg thing of oh, our mastermind’s worthwhile. And things like that. We Alex works with Grant Cardone. I was around at that time. He paid Grant a quarter of a million dollars for an hour.

[01:00:39] Tim Calise: You’re like, that’s crazy. Except what he learned allowed him to be worth $200 million or whatever it is on, on paper investment. I am now very much rooted in, I don’t try to learn anything fresh. I go and find the person who can gimme the insights. ’cause someone else has tried to figure this out before me.

[01:00:57] Tim Calise: It’s allowed me to move along faster. 

[01:00:59] Patrick Donley: Yeah. I love it. It’s a great place to stop here. Is there anything that we didn’t touch on that you wanted to talk about? 

[01:01:07] Tim Calise: No I think this is for anyone who’s earlier in their life, number one, cash flow is king. I define financial freedom as having.

[01:01:16] Tim Calise: Passive income, meaning not your active income, greater than your monthly expenses. And I share that simply, I think in the context of this hopefully the audience that’s listening. I remember when I was making money early on, it was all about accumulation. What’s my net worth? What do I have sitting in the bank?

[01:01:31] Tim Calise: Think about it as an income statement item. How can I find things that pay me in my sleep? Do that, and you will buy yourself financial freedom for the rest of your life. And number two, anytime you’re doing anything, if you’re an entrepreneur, starting off, the only metric that matters until you get to about a million dollars in revenue a year is the number of offers that you make.

[01:01:51] Tim Calise: Try to accelerate the number of no’s you get, and you will get yes as faster than you otherwise would believe. Don’t care about any other KPI, just go out and offer something to someone and learn the process. ’cause the faster you can do that, the faster you’ll get to success. 

[01:02:05] Patrick Donley: So good. I love it. For our listeners that wanna learn more about you, get in touch with you what’s a good way for them to do that?

[01:02:12] Tim Calise: If as a thank you for listening to the show today, go to Instagram, find tim.calise on Instagram and DM me tip and I will give you a special gift for listening to the show today to hopefully help you along your way. 

[01:02:29] Patrick Donley: Awesome. I will definitely include this in the show notes so they can reach out to you.

[01:02:32] Patrick Donley: So that’s, I appreciate that offer and I hope people do reach out to you and get the tip. 

[01:02:38] Tim Calise: Yeah. And website is Tim.calise.com, so also information at tim.calise.com. 

[01:02:43] Patrick Donley: Cool. I’ll have all of that in the show notes. This has been a lot of fun. I really appreciate you sharing everything you did today.

[01:02:48] Tim Calise: I appreciate it, Patrick.

[01:02:49] Patrick Donley: Okay, folks, that’s all I had for today’s episode, I hope you enjoyed the show and I’ll see you back here real soon.

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