“What should you have gotten a second opinion on before you constantly blundered your way into that situation?” - John Berardi
John Berardi is a Canadian-American entrepreneur best known as the co-founder of Precision Nutrition, the world’s largest nutrition coaching, education, and software company.
He's also the founder of Change Maker Academy, devoted to helping would-be changemakers turn their passion for health and fitness into a powerful purpose and a wildly successful career.
And he hosted the popular Dr. John Berardi Show on Apple Podcasts.
Over the last 15 years he's advised Apple, Equinox, Nike, and Titleist, as well as the San Antonio Spurs, Carolina Panthers, US Open Champ Sloane Stephens, and 2-division UFC Champ Georges St. Pierre.
He's also been named one of the 20 smartest coaches in the world and 100 most influential people in health and fitness.
He currently lives in Ontario, Canada with his wife and four children, although they tend to escape the cold Canadian winters by spending January to April in warmer places.
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Your liquidity event is the most important financial transaction of your life. You have one chance to get it right, and you better make it count.
But unfortunately, up to 90% of liquidity events fail. Think about all that time, money and effort wasted. Of the "successful" liquidity events, most business owners leave 50% to over 100% of their deal value in the buyer's pocket and don't even know it.
Our founders said "no" to a 7-figure offer and "yes" to a 9-figure offer less than two years later.
Don't become a statistic and make the fatal mistake of believing that the skills that built your business are the same ones for your liquidity event.
After all, how can you master something you've never done before?
Are you leaving millions on the table?
Learn how the 90-day Deep Wealth Experience and our 9-step roadmap helps you capture the maximum value for your liquidity event.
Enjoy the interview!
[00:00:00] Jeffrey Feldberg: Welcome to the Deep Wealth Podcast where you learn how to extract your business and personal Deep Wealth.
I'm your host Jeffrey Feldberg.
This podcast is brought to you by Deep Wealth and the 90-day Deep Wealth Experience.
When it comes to your business deep wealth, your exit or liquidity event is the most important financial decision of your life.
But unfortunately, up to 90% of liquidity events fail. Think about all that time and your hard earned money wasted.
Of the quote unquote "successful" liquidity events, most business owners leave 50% to over 100% of the deal value in the buyer's pocket and don't even know it.
I should know. I said "no" to a seven-figure offer. And "yes" to mastering the art and the science of a liquidity event. Two years later, I said "yes" to a different buyer with a nine figure deal.
Are you thinking about an exit or liquidity event?
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After all, how can you master something you've never done before?
Let the 90-day Deep Wealth Experience and the 9-step roadmap of preparation help you capture the best deal instead of any deal.
At the end of this episode, take a moment and hear from business owners like you, who went through the Deep Wealth Experience.
John Berardi is a Canadian-American entrepreneur best known as the co-founder of Precision Nutrition. The world's largest nutrition, coaching, education and software company. He's also the founder of Changemaker Academy.
Devoted to helping a would be changemakers, turn their passion for health and fitness into a powerful purpose and a wildly successful career. And he hosted the popular Dr. John Berardi Show on Apple Podcasts. Over the last 15 years, he's advised Apple, Equinox, Nike and title lists as well as the San Antonio Spurs, Carolina Panthers, US Open Champ, Sloane Stephens, and two division UFC champ, George St. Pierre, he's also been named one of the top smartest coaches in the world, and 100 most influential people in health and fitness.
He currently lives in Ontario, Canada with his wife and four children. Although they tend to escape the cold Canadian winter is by spending January to April in warmer places.
Welcome to the Deep Wealth Podcast. And wow. Do I have an episode that you are just going to love and I want you to hang onto your hats because we are going to be doing a deep dive on not just a liquidity event, but an incredibly successful grand slam kind of liquidity event. And we're going to be hearing the ins and outs and lessons learned that you can take away and apply immediately today for your business. But I'm getting ahead of myself. JB, welcome to The Deep Wealth Sell My Business Podcast. And it's been a pleasure to be speaking with you offline and to have you with us today. JB, there's always a story behind the story.
What's your story? What got you to where you are today?
[00:03:19] John Berardi: Yeah to start with a bunch of cliches, it was a lot of luck meets a lot of preparation meets the universe conspiring to help me. I had my professional success in the health and fitness industry. I started a company called Precision Nutrition.
And I should probably caveat the beginning with I didn't know how to start a company or what a company matter. Any of that. I don't come from that background. I have a PhD in exercise and nutritional biochemistry, so I was interested in science primarily. But at the time there was, I don't know the industry, I guess, was ripe for the particular thing that we started doing in the beginning, which was publishing information online about health, fitness, and sports performance.
Now you have to go back in the time machine to place yourself in context. I had originally started writing for an online publication, which was called Testosterone Magazine. So I was a master's student studying exercise physiology. And I was just super fired up about the things I was learning through research journals and in the laboratory.
And I felt like I always had a knack for explaining those things in a way that was accessible to a broader group of people. So that might be athletes out there in the world that might be coaches out there in the world that might be people who are just, recreational exercisers, interested in looking and feeling better.
And I could, you know, I was going to a great university at the time and I could spend, I actually earmarked one day a week. It was Thursdays to go down into the bowels of the library and read the research journals. Nowadays you can find research journals at your fingertips online, but back then they were bound up in these big books and there'd be like 5 to 10 journals that were all collated and stapled together in this big bound tome. So you would go down to the bowels of library and you'd read these things and you decipher them. And then I would just bring that information up to the ground floor, you know, and I would publish it. And I would sometimes , in scientific context and other times in lay publications and the big sort of avenue for me was this, Testosterone Magazine at the time.
Now back then, most people I knew even at university were on dial-up. So to load up my work, you would have to go to the URL, wait for the homepage to load, which could be a good 10 minute process. This is not, and that's not photographs and that's just plain text HTML. There's 4 or 5 articles for the month.
And when you click one. You're just hoping it's going to be good. Cause it's going to be another 20 minutes before the thing loads. So you're reading something on the side or you're watching television while you wait for this article to load. And that's the context we were in. I gave a presentation in Toronto at a big event called Swiss at one point.
And a young undergraduate student approached me his name's Phil Caravaggio. And he said he'd been a fan of mine and he followed me for a long time and he thought we should build me a website. Now he was an undergrad in systems design engineering. He had just finished an internship at IBM.
He's a super smart guy. And I was like, yeah, I don't know. Like everyone's on dial-up like online business. No one really saw examples of that, but he twisted my arm and he convinced me to do it. And he's my co-founder. And so we ended up creating a website where we gave away all this free content that I was going to publish anyway. I was probably going to write this stuff, regardless of whether there was any financial payout to it, I always loved writing and I love science and I love sport and performance and health and fitness. And so I would create these things. I actually even remember in high school the predominant periodical of the time for this topic was called Muscle Media 2000. Bill Phillips had started a company called EAS and as a vehicle to both promote his company and all the ideas around it Muscle Media 2000 came out. So I remember being a high school student, penning hypothetical articles for Muscle Media 2000. Cause that's what I wanted to do one day, I wanted to be a writer on these topics, so I would have done this anyway. And then we started putting it online. We started building up an audience. We're still students, so there's no pressure to monetize this. And before we knew it, we had a mailing list of about 30,000 people. And it was really amazing because at one point a mentor of ours called us aside and said, what are you guys going to do after school?
And we're like, oh, I don't know. Just get some jobs, and he's like with a mailing list of 30,000 people, you have a business like information products and everything that could stem from that. So we started out with information products and one of my favorite stories is how we created our first.
We had no money at the time. So the Precision Nutrition story, which we can get to the full dimensions of it. But we never took a bank loan. We never had any outside investment. We, what people call bootstrapped. And we learned it very early on how to make this work. So we had heard that the Beastie boys once in the beginning of their careers, went to the equivalent of best buy or, you know, consumer electronics store bought a bunch of video cameras and brought them to a concert, gave them out to attendees and had 10 people film the concert.
And they asked for the camera's back at the end, they got the footage, they turned it into a concert video and they brought all the cameras back to best buy. So they basically filmed their first concert video for free. And I was like, Ooh, but we need to do things for free and we could probably do it that way.
So we literally got a whole bunch of equipment from best buy. We snuck into a really beautiful lecture hall on the campus that I was attending and I filled it with 150 students and I gave a lecture and we recorded that. Then we filmed a bunch of footage in the research lab that I worked at as a graduate student.
Then we convinced the local grocery store to let us do a grocery tour and use their teaching kitchen to film segments there. And we put together this project called no-nonsense nutrition and it was really the first, online information product in our field. I mean it was, we had to burn it to DVDs, and send those out.
But it really got us our launch and again, that project cost us almost nothing, but it looked like we were heavy hitters. You know what I mean? I had the resources of this entire University of Western Ontario, where I did my Ph.D. it's kind of like an Ivy League school in Canada.
So we had the resources of this big-time, Ivy league equivalent school. Beautiful. We looked huge. We were tiny, but we found a way to what people call fake it till you make it or whatever. And that was a great lesson that sort of paid forward through everything we did through the growth of PN.
[00:10:05] Jeffrey Feldberg: Wow, jB as you're sharing your story. And I love it. You're just bringing back memories. And for some of our listeners, dial-up modems what are you talking about? 10 minutes to load up a webpage in an article and then the Beastie boys, another name from the past. What I love is, you call it a bootstrapping.
I call it a cockroach startup where you have that cockroach startup mindset. hey, I got to do whatever I got to do to live another day. And I don't have a lot of money and I'm not taking outside capital. And I just got to be really, as I like to say, resilience, always trumps resources.
And we're going to get to what you did with Precision Nutrition and our listeners heard the official intro. I mean, you're just what you've done is incredible. And you've just paved the way with just your passion for this. But I want to go back to the beginning for just a moment here. So, you know, You're a research geek and you're in the library and you're doing all these things.
You're passionate to find this information at that time. Was that passion to solve a particular problem that you saw that was going on out there, or is just, hey, I'm really interested in this. Let me see what I can do or learn more about that. What was really the fuel for the fire for you?
[00:11:13] John Berardi: There's probably a tad bit of psychoanalysis here that we need to get into, but, I was born preemie, so I was born really small, really early. I had developmental challenges coming up, so I didn't play sports. I couldn't do a lot of things. And nor was I a brainiac, I wasn't identified as that either.
So I was just on the bottom quartile of everything for most of my sort of elementary school years. And when I got to high school, I saw guys around me playing sports and building their bodies through strength, training, and stuff. And I was like, whoa, maybe that could be a solve for me.
I had asthma and allergies and I used to get shots and I had a puffer and all this stuff. And so I just started reading about this stuff and I was also very introverted and like a lot of introverts, I just read a lot of books, so some of the books I've read were fiction and fantasy and other books that I read were health, fitness, nutrition, strength, training.
And so the problem to solve was my own problem. How does this scrawny last pick for every sport? Not that great at school kid, having go as puff on his puffer and not be able to go outside during certain months of the year eat and exit like, is there something he can do to fix these problems?
And that's where I developed my passion for nutrition and exercise. In two years I gained like 50 pounds of muscle. I was cooking all my own meals, and it was lean healthy. Like my asthma disappeared. Like I didn't have to use my puffer anymore. I didn't need to go for to be medicated for allergies.
So it's all these things, you know, solving my own problem. And then understanding how transformative it was for me. I actually got a mentor at some point, I met someone at the gym who took me under his wing, and then I was able to help other people in the same way. So it just became embedded into the core of who I was. There's this story where through some of the high school years, while I was figuring all this out, I had a pretty big chip on my shoulder. And so I was doing a lot of drugs and alcohol, failing a bunch of classes, and skipping a lot of school.
And I got into a pretty scary car accident. And so the gym also and mentorship there also felt like it saved my life. So you had this confluence of events where improved a whole bunch of measures of health and fitness and performance and aesthetics. And it took me out of a lifestyle, a self-destructive lifestyle.
When people talk about purpose nowadays, I feel like sometimes there's a lot of cliches around that. And really my definition of purpose is all the things that happen to you in your life that make you think you want the things you want. That's really where purpose comes from. It's a bunch of stuff happened who cares, what or how, or why?
And because of that stuff happening, you see the world in a certain way. And you want certain things that eventually becomes an evolved level of purpose is where you actually take some autonomy and ownership over that. But really that's what leads you, your origin story leads to your purpose.
So for better or worse, I'm stuck in the health and fitness industry. And so that's the problem to solve, right? I love it here. It's imprinted on if I was a baby chick at that time in my develop may you know, the health and fitness industry was my mother and printing on me.
And so I probably could have gone into a lot of different fields and done decently well, but this was the one that was meaningful to me.
[00:14:27] Jeffrey Feldberg: And what I love about this and for our listeners, I hope you pick this up because what JB said was so subtle, but it's absolutely key for success because JB number one, it happened to be that you had challenges unless you're one of those strapping sports jocks. And I use that term with nothing but respect and admiration.
And you said, clearly I wasn't. You're like the rest of just about every other guy out there. And you said you know what I'm not really happy about this. Let me do something about that. And so you were really the walking billboard for what would later become Precision Nutrition and you were experimenting on yourself and your problem to solve was yourself, hey, how can I get from here to there? And you weren't chasing the dollars. Clearly, you were chasing your passion.
[00:15:11] John Berardi: Yeah, that's it. And then there's all these little interesting idiosyncrasies about people's personality that determines what they do with that. So for me, I realized pretty quickly and probably influenced by things like Muscle Media 2000 and Testosterone Magazine. I was like, man, all right.
The stuff that I'm learning is super interesting. I think I can explain it in really cool ways. I don't want to tell it to five people. I want to tell it to 5,000 people. So I just knew early on that I wanted a really big megaphone. And so that was just another thing that kind of fits in.
You're like, okay, cool. So what was driving you? It was this imprinting of health and fitness on my life. Okay, cool. So I got passionate about that. And so I was doing that in my free time and I was like, oh, this is an academic field of study. Like people get jobs doing this, you can get paid doing this?
Oh. Even better. And then it's okay, cool. But where in that space will it fit me? And like my strengths and my weaknesses and my foibles and the idiosyncrasies that makeup me. And I realized, okay, cool. I'm an introvert. I am high in the dimension of gregariousness. So I like to be on stage.
I like to give presentations, I can be theatrical and entertaining. And okay. Let's do some of that. So you start to see like a path building before you, and really like I said, I met this guy. Who's hey man, we can give you a big megaphone, the internet. And I'm like, ah, I don't know, internet small so I'm like megaphone too small.
He's like, no, no, no, this can't be real big. And so, we built our first website. We hack together some products and ultimately it was just this. It was like I love this. I love learning about this stuff. I love teaching about this stuff. I like teaching others about this stuff.
I'm like, Oh and there was a time in the middle of this story, where I got into competitive bodybuilding. So that person who took me under his wing, I had built a lot of muscle. I was starting to look aesthetically pleasing. I was doing powerlifting. He's like, hey, you should compete in bodybuilding, your body's coming along great. And so the discipline I learned there really translated into a self-confidence that waits a second. I started out skinny with asthma and allergies, and now I won the Mr. Junior USA contest. If that's not an improbable outcome, I don't know what is, so what other stuff do I think I can't do that
I can probably the same way engineer my way to success. So I was like, okay, cool. I was never good in school. No one ever identified me as smart, but I bet you, I can engineer a process to do really well at school, so let's figure that out. And so I'm like, oh, maybe I'm dumb guy, and so I started to build confidence in the sort of intellectual learning domain. And then I'm like, oh, not only that, like, when I teach other people this stuff, I get a really good response. I mean, There was a time when I was a master's student where I was in a nutrient biochemistry class. I was just a participant and our teacher was suboptimal.
And so I was getting it because I put in a lot of hours outside of the class, but most of my classmates weren't and about halfway through the year I was tutoring them all. And the department asked me if I'd teach the class. And so again, these are like this isn't oh, hero journey me, no, this is just clues.
What should you be doing with your life? The universe sometimes provides some clues. If you're paying attention.
[00:18:28] Jeffrey Feldberg: What's interesting JB with that and it's a maximum, I think a lot of successful people will follow it's when you help enough people get their goals. I mean, You were giving and you really weren't expecting anything in return. It was a passion of yours. hey, if I can help, I look, I did this for me.
Maybe I can help you. Here you go. What don't you understand? How can I help you with that? You help enough people get what they want and to achieve their goals in time. And that's the key here is not before helping peoples, after helping enough people that you get to really achieve your goals and really enjoy what you want to get and where you want to be.
And success is not luck. And your passion, your determination. As our listeners heard in the official intro you were the who's who in the fitness industry and solar are one of the 20 smartest coaches and one of the 100 most influential people in health and fitness, that's not an accident.
And so how did you take your passion and funnel that into Precision Nutrition now? So it's more than just JB. You're looking to make a difference out there. How did you start getting the word out there to start growing and start building an enterprise?
[00:19:33] John Berardi: We start again, we started with info products and our list is growing. And this is a bit of the tactics of business. You need to have a group of people who you have regular access to communicate with so that when you have stuff to sell, for example, or teach or whatever gift they pay attention.
So that's growing our information, product stuff is growing. And I was actually invited to a thing in Michigan and the group no longer exists, but their buildings were like right next door to, I think it was QuickBooks. So the QuickBooks headquarters, and they had an office like on their campus and what they did was like workplace training for them.
So it started off with like tactical stuff. And then it got into larger stuff for the executives so they were doing these multi-dimensional programs for executives where you work on your physical and your spiritual and your mental and emotional health. And they asked me to come in and help write their curriculum for the physical and nutritional stuff.
And I remember going there and being like, oh, it's not a good fit for what I wanna accomplish. However, I like what they're doing. They're essentially creating a curriculum rather than one-on-one coaching. And so they can scale it to a large group of QuickBooks staff and executives. And I was like I had never seen anyone do this in health and fitness. In health and fitness, the holy grail of coaching is to have this one-on-one coach who only works with you. I mean, You see it in elite sports all the time, Michael Jordan's coach for a long time is a guy by the name of Tim Grover.
And he's gotten some notoriety because he wrote a really well-received book. And guys like that, ultimately they have two or three athletes only, and these athletes that compete to get their time. And they compete with dollars. And so it really, the holy grail is you can, I have the best coach in the world for only myself that's where everything is driving towards.
And my question was and Phil and I constantly asked this question is there a way to do this difference that scales and simultaneously. Because the assumption was you could scale, but it would be worse like less personal attention group coaching is nowhere near as good as individual code.
These are the baked-in assumptions. So we were just like, oh, could we do this differently group-oriented, but better? What tools are available that weren't available then? And the same solution is present the internet, the machine. I know this cause you were in online learning and stuff like that.
The machine can do the stuff that machines can do. And then the humans can do the stuff that humans can do. And you put that together and now all of a sudden you can scale, right? So I brought home that idea from what I learned in Michigan and said, we should try and create a geographically independent group-based online coaching program for people who want to improve their health, fitness, aesthetics, et cetera. So we launched something called Precision Nutrition coaching and that program has gone on to be the largest body transformation study slash program in the world. Today, Precision Nutrition has coached over 200,000 clients all of them for a year, so that's the tenure their with us.
It's all online. And there's check-ins daily. So imagine the dataset that's sitting before you, when you have 200,000 times, 365 days of nutritional check-ins exercise, check-ins, stress, sleep, and recovery type check-ins. Again, Phil coming from the systems design engineering background understood coding and design and things like that.
So we built our own in-house team to create our educational platform, our coaching slash curriculum platform, but it was based on this idea of curriculum. So people are stratified by how they're coming into the program, who they are. Then they're put onto a curriculum that matches who they are, and then they go through with a cohort.
And there's a coach who oversees them now because of all that data, we were able to test everything. We're testing cohort size, testing changes, and interventions. What people are doing each day is what we call practices. So, each day of the week, you're given a practice two weeks is how long a practice usually lasts.
And then every day accompanying those practices as a lesson that helps you deepen, learn how to do et cetera, that based on where you are. And we got it to the point where we were testing, can one coach a 100 people effectively 200 people, 300, 400, 500 people. When I was coaching online the old-fashioned way with spreadsheets and things like that, I'd usually max out at about 30 people.
That's how many people I could effectively keep track of everything on, including billing and programming and all that. With this curriculum model, we found that coaches, there was no difference in efficacy in the program, whether a coach coached a hundred. All the way up to 500 clients. So we're like, okay, this is pretty cool and scalable. Now with 20 coaches, times 500 each, you could start to see this thing go. And so that was the first major product advancement thing that sprung Precision Nutrition forward. And not only was it a great business for us, it also became an attractor for the second tier of our business.
The second thing we did, and it became far and away, the biggest thing we did was a certification, education, and certification for professionals in the field. So people saw what we were doing. They saw no one else was doing this. They saw the results we were getting. They saw the platform we were using and they said, hey, teach me how to do that.
I don't need 500 clients, 50 would be nice, and so we publish really what is the first and now it's the biggest and most recognized certification program, the Precision Nutrition certification. And again, that was built on the success of the coaching program.
We were the only company because most certifications come from certification companies. We actually were coaching people and we have big data sets and we could test things and learn. And then we can put that into our education program. When I started writing that program, it was the most under-resourced and under-appreciated part, people were like no, no, no coaching's where it's at. We had to go big with coaching, scale coaching, make it huge, big corporate partnerships, let's coach everyone at Microsoft and Apple, and whatever. I was like, no, I think this thing for the professionals could be really great, so they left me alone for about a year to go work on this thing.
And then when we launched this was just a runaway success. We've certified, close to 200,000 professionals. At any point in time, there's 400,000 working health and fitness professionals in the world. Achieved you can slice these numbers a bunch of different ways, but a pretty good market penetration.
And so that was the second thing that we did. And then the third thing, and this led up to the liquidity event was connecting the two. So you had this big group of successful clients in the world that we were effectively coaching. And we were putting up signposts for how well that was going.
Then we had all these professionals, we are training through education and certification, but we didn't have a means to let them use our software and curriculum yet. So they were hacking their own solutions. And we were like, what if we just created a version of the coaching platform we use that could be used by our certified professionals to deliver the curriculum? Which has been research-proven by this point, there've been a number of peer-reviewed studies showing our program and what it does with their clients, with them as the coach, not us. So they would pay us a monthly fee to use our software, and then they run their clients. And all we get out of it is that rental of our platform.
Plus we get access to the data. So now all of a sudden, instead of 200,000 clients' worth of data is growing at a couple tens of thousands a year. Now we have millions of clients' worth of data being fed back into the system, right from all of our pro coaches. We called them using the platform in their communities with them as the coaches.
And so that then led up to tons of interest in acquiring the company or supporting the company financially and our eventual sale of the company in 2017.
[00:27:26] Jeffrey Feldberg: And JB, what's amazing with this and for our listeners, I'm going to talk a little bit of Deep Wealth talk now, and you've been talking, get, we just say it in different ways. And when you go back to the beginning, so you had this passion, you were your own test project and you came out phenomenally well and you started winning competitions and you became, hey, you know, I eat what I bake.
I bake what to eat and everything's great there. And you went the traditional route in the beginning with coaching, but your style your way. And so that became what we call an X factor. It's step number two of our nine-step roadmap. X-Factors that insanely increase the value of the business.
But then you were at an inflection point and you saw it, but everyone else missed it. And that was, you know, guys, coaching is great and we broke the mold. I love how you broke the 2, 3000-year old Socratic method, and being e-learning myself, you challenged that and you broke through that.
No, you can't have coach that's more than one-to-one or one to two or one to five, but you did that by 10 X.
[00:28:25] John Berardi: And I like the use of Socratic method too. And then I wanted to get back to your narrative because that's what in the program the way that we created the feeling of personal in the coaching experience, it wasn't just here's your program. Go do it. That wasn't the program at all.
Each day was a lesson slash assignment and a series of Socratic questions to help you build what we call your owner's manual. So there'll be all these leading questions that help you do deeper self-exploration so that you can solve your own coaching problems the next day. And you build that up over 365 days, and now you have someone who has their own owner's manual and can ride that off into the sunset.
So I love your use of the Socratic thing because our question was. How do we use what is so good about the one-on-one model and systematize it and have a machine deliver that?
And, then have a coach and the machine can organize it and it can show it to the coach when the coach needs to see it so that all the coach has to do is read that thing and respond the way human would.
So anyway, back to your narrative, but I love that you called that out. And I wanted to put that into our program because if people try and just scale the delivery of essentially an inhuman process, which is, oh, here's your exercises for the day. Here's your nutrition for the day. You can't copy what we did because it's not what we did.
[00:29:48] Jeffrey Feldberg: And what's also great about that. And this goes back to the giving part because there are some businesses and unfortunately consultants are notorious for this. A lot of the business owners will say, yeah, that consultant put his or her hand in my pocket and has never left. And it's always been there, but you're saying, hey, let's teach the fisher person how to fish that they don't have to rely on us and through the Socratic method and using technology, but also the human touch with the coaching.
You did that, but that would have been a very different story. Had you just stuck with that?
[00:30:20] John Berardi: Yeah, I don't think we are around today if we are competing in the coaching market because since then companies have come out from everywhere, including Silicon Valley that have huge venture-backed resources and can compete on every advertising metric can lose money for 10 years get all the eyeballs on their thing and then do their own exit, and that gets turned into some other kind of revenue model or business.
So there's no way we exist if we're still competing on the coaching plane everyone was going that way and that's what I consider a fad, especially in the acquisition world. We can talk about this towards the end of the conversation, but I did notice in the process of selling the company that even the smartest, some of the smartest people I ever met, some of the smartest financial people I ever met in private equity and other financing sources are subject to fats.
They will invest irrationally in the thing that seems really interesting at the moment. And there was a time prior to our exit where people were investing irrationally in solving the coaching problem. Now when we exited, they were investing irrationally in software as a service, which I be the benefactor of.
So I'm happy about it. But nevertheless, I believe that people were investing irrationally in that space. And we can predict where the next couple are I have some ideas on that but it really taught me this big lesson that people are going to be skating to where the puck is not necessarily where the puck is going.
Lots of people are trying to guess where the puck is going. Hopefully, I was lucky and I guessed it, cause part of the story here too, is that when we launched the Precision Nutrition certification at the time, every working personal trainer in the world was told that they are not allowed to talk about nutrition with their clients.
So this is a dead market to anyone from the outside looking in. You're like, you're going to launch a program telling predominantly personal trainers how to talk about nutrition when they're not allowed to that's super smart. But if you work in the field, you know that they're dying for this information.
And everyone sees the writing on the wall that right around the corner. And who knows if that around the corner one year or five years from now this'll be a thing they can do. So when we launched, there was no fanfare about this. There was a small group of trainers who were, maybe I kind of clastic in their minds thinking like, yeah, screw the big organizations telling us what to do.
But eventually, that's snowball to the point where now I would wager that if you don't have a nutrition certification, you're working as a personal trainer or health coach nowadays no one would even take you seriously.
[00:32:57] Jeffrey Feldberg: You clearly changed the marketplace and JB, what's interesting in The Nine Step Roadmap, X-Factors step two, which is what I've been talking about. It's transformational. And as I look from the outside into what you've done, so you started with the coaching, that was an X factor.
That also became a Rembrandt. That you're very unique in what you're doing with that. You went against the grain yourself and everyone was saying, you're crazy, don't do it. But you said, hey I just feel it. I feel that certification is where we should be next. And that was your next blue ocean that you created because the coaching, you didn't say it quite in this way, but you said it that became the red ocean.
Big money came in and everyone's now fighting for the same fish. And that's why it's a red ocean. It's all bloody and messy. But you miss that. You took a zig when everyone was zagging and you said, Let's do the certification and you did that so well out of the certification, just the need for growth.
You created your own SAS platform behind the scenes, ahead of the curve that they came with that. And that's another X-Factor. So X-Factors after X-Factors, after X-Factor it led to growth, you're solving a painful problem. You're generating revenue along the way. You become a thought leader in the industry and you start to become just this massive company, this thriving, profitable company, making a difference.
You're changing the social fabric of society all from these X-Factors that you're piling one on top of the other. And you're ahead of the curve, with the pandemic, everyone's talking about that curve. We're going to talk about a different curve you're ahead of the curve, the competitive curve because now your competition they're so fighting it out in the red ocean.
And by the time, because of your thought leadership, by the time they figure it out, what you're doing. You're already going on to the next thing. And that's where I find most business owners. It's ironic because, within our success, our biggest success are the seeds of failure. If we keep on doing what we keep on doing, and we don't have that inflection point and we don't stop and say, hey, coaching is great, but I think certification is great, but you know what?
I think if we can give the coaches a platform that they can use, and then you follow the business model, that's the most powerful business model where you're the matchmaker. Yet all these coaches using your platform, they're out there. And perhaps you're helping them find the clients, but they're finding their own clients, but you're there behind the scenes and you're letting them just do their magic.
And if you look at some of the biggest companies in the world, you can pick Google, you can pick Uber, they're matchmakers and JB that's what you're doing. So it's brilliant how you did that. And you amassed such a large and terrific company. So here's a question for you. You're going down the street called success.
And I'm sure the notoriety that goes along with that, and you probably were getting a lot of outreach from private equity and different investors and just groups that wanted to just buy you or invest in you. How did you deal with that? And what did that look like?
[00:35:51] John Berardi: Yeah. So I want to talk about that in a second. The one thing I feel like I'd be doing listeners a disservice. If I don't talk about one thing prior, and that's just this idea that the make pretend story here is this linear success from 2000 to 2017, where it just, oh, thanks. JB was happy and it's growing great for 17 straight years.
You know what I mean? Launching successful project after successful project, that is a full myth, 17 years is said long time. And not in a, oh, what a long slog it was or anything like that. But a lot happens in 17 years. That's a heck of a lot of days, and so really I'll just point out the fact that I've given this talk before. I've shared the revenue ups and downs and some of the other ups and downs in the journey. And even in my book, I talk about the personal ups and downs that I had, as someone who started out super excited and passionate about the field and who was able to in the beginning can join the two things I wanted to do most in the world.
I wanted probably three things I wanted to read and write, and I wanted to explore scientific questions and data and stuff like, so these are the two things I like most, and there comes a point where I feel like I have to be a C something oh. Of a rapidly growing company. And that was actually a really sad time for me.
And I tell the story in my book, we just had our third child. I looked at how I was spending my days and I would finish each day, like deeply unsatisfied, to me, if I did write something or collect some data or move one Of those two projects forward, the day was wasted. Now that's not true. It's not universally true certainly didn't even have to be true in my case, but that's how my brain read that situation. And so every day I ended feeling like I hadn't accomplished anything and I couldn't even be present with my family because my brain was still spinning the wheel of, I didn't accomplish anything at work today.
So there was some dark times at that point. I remember writing a list of how I could get out of this life. You know, from selling the company to giving the company away to my partner, to giving up all my roles in the company to driving off a bridge. And I have, I still have that page where there's one of the options is suicide.
And fortunately, I had a good support group at work and outside of work. And I found ways to, to deal with this. And for those wondering how the problem gets solved we learned about unique abilities exercises. In other words, coming up with a list of the things that can be world-class that when you could envision yourself doing them for the rest of your life and wanting to deepen your experience with them.
And then when you do them, they make a difference. So that's the unique abilities concept. I've learned that from Dan Sullivan and the understanding that if you made quadrants, the upper left being unique ability exercises, the bottom right being, non-unique abilities or your unique inabilities.
I was like, man, I'm spending like 90% of my time, not in the upper left quadrant. That's why I want to kill myself. Oh, I have to redistribute where I'm putting my time and energy and efforts, and then we need to hire out the rest, and put those roles in the hands of people, doing their unique abilities.
So imagine if I have all the things I hate and I'm not that good at being done by people who love that in a really good at it. And then I can go the things that I love and I'm really good at make a difference in the business. You create a company like that and I don't know if you're going to have success or not, but I know it's going to be a lot more fun place to be. I just want to put all that out there because there had been loads of ups and downs during the journey of those 17 years before we started getting interest that I didn't want to gloss over.
[00:39:25] Jeffrey Feldberg: Yeah. You know, nudge, nudge, wink, wink, come on, JB. You were an overnight success. Come on. And overnight success, 17 years in the making and, you bring up a good point. You know, the entrepreneurial journey. It sounds good when we look back, but sure there were some dark days and you know, firstly, thank you so much for just being vulnerable with us and sharing some of the darker thoughts that you had.
And on the mental health side, we don't talk enough about that in business and we should and great support network. What comes across to me though, as you're sharing your story with us, JB is you're really, you know, a gold star for taking time out, to really reflect and think. I call them inflection points.
And this was an inflection point in your personal life. Okay. The company is doing great, but I'm really not happy. And this just doesn't work for me.
[00:40:12] John Berardi: And that period, not I'm glad you called that out because that was when I actually started doing what I called thinking Fridays. I started orienting my week such that I'm like, okay, I hate meetings. I don't like them probably much more than others. But I have to do them, I have to share my vision and I have to help do coaching and all the other things required.
So Tuesdays and Thursdays for meeting Mondays and Wednesdays for creating and Fridays for thinking, and that was my schedule since that inflection point in my career, I was like, I need to have some level of discipline over my schedule. Some level of expectation for how a week will go. I can't just be responding to things all the time.
And so thinking Fridays. I could take a bunch of different shapes sometimes that I just don't sit in the Lotus position, waiting for ideas to occur, some days that could be just reading. Some days that could be talking to experts about particular challenges that I want to solve personally, professionally, some days that could be writing and journaling, some days that could be legitimately thinking through a process I want to create and mind-mapping it or whatever.
So thinking days always, it wasn't just sitting quietly. There was some action component quite often, but it was really getting at the heart of the problems or challenges or things I wanted to run towards rather than run away from. And so I usually had a whole day, eight hours a week, 52 weeks a year, and that can really accumulate self-knowledge.
Self-awareness, business awareness and I've actually come to call what that reflective day a week. It helped me build my instincts for things, and this became really important when we transitioned the company to private equity ownership. Because at first, I was very frustrated with how many projects the new leadership team wanted to tackle simultaneously.
We were like laser-focused when we were running it. And then all of a sudden, the team wants to do 10 things at once where we would have done one. And then also how much data they needed to make decisions. And for about a year, I was just mad about it. And then I came to realize, oh wait, how could they possibly do anything else? They don't have instincts because they're not from this field. So how do you get a group of career executives making decisions about a thing they don't deeply understand and have instincts about data? They have to have data and they have to make a lot of smaller bets rather than one or two big bets.
And then once I finally understood that, how I develop my instincts what process allowed me to do that and how it was different for career executives, just coming in and running a new company in a new field. I made some peace with that, but anyway, I just wanted to map it back to you brought up the idea of taking time to think and it became not only just a vague idea, it became a day of the week for me.
[00:43:00] Jeffrey Feldberg: Which is remarkable. I had a management consultant and the management consultant would go in and JB will look at leadership and people in leadership positions on a minute-by-minute basis.
Actual thinking time, leadership type of activity in a given day was somewhere between get ready for this 7 to 9 minutes in a day and the rest of it was meetings and administration and emails and interruptions and phone calls. So here you have up to eight hours and the average quote, unquote leader out there has nine minutes.
[00:43:36] John Berardi: Yeah. It's an X factor as you called it earlier.
[00:43:39] Jeffrey Feldberg: It's a huge X-Factor.
So you got a comfort level with what you're doing. And from that comfort level, it sounds like there was discomfort of, hey, okay, I get it. The people need to do what they're doing. And the company perhaps has to do what it's doing for it to grow. But I, and I don't want to assume this JB where you saying that's not really my style.
That's not really me. Maybe it's time we look to the outside? Have people do this because that's what they do day in, day out and time to have the company just get to new levels that really aren't of interest for me? Or what was going through your mind.
[00:44:11] John Berardi: Right. Oh, so you mean, or around the time where I was looking at unique ability stuff? Yeah. there are two problems with me doing things I'm not having any fun at. One is that I'm sad all the time. And then two is that I'm not doing the things that I actually could make a difference with.
If there's something I'm, world-class at, it is writing, communicating around health, fitness, and nutrition stuff. And not just like really good, like I'm like in the top tier, so I'm not doing any of it. Like this is when you look at objectively it's madness, you have the most potent resource on a shelf doing stuff that he's terrible at. Wait a second, this needs a remedy. So then the solve was okay. Cool. You can't go to, I know Dan Sullivan recommends with the unique ability stuff like eventually moved towards 80% of the activities that you do. If you do an audit of your week are in the unique abilities quadrant, the upper left.
I'm like, you're not going to go from 80%, not unique ability, state or percent unique abilities overnight. But you can start nudging towards that. So it's okay, what do I hate? I hate admin of any kind, the first 5 or 6 years at PN, we didn't even have like tax accountants or lawyers or anything like that.
Like one day we brought them in and they're like, what have you guys been up to? This is a mess, we've been up to making monies. What we've been up to now, we're bringing you in so you could fix the mess, you know? And so, I just realized here's what I like. I like data. And it was interesting because I like data in the context of science, but I also like it in the context of marketing and I like writing and storytelling.
And I like it in the context of scientific discoveries and sharing that. But I also like in the context of writing copy and advertising and stuff like that. My role essentially morphed into you know, at the strategic level, what's the vision for the company and products and services?
Yes. Which is pretty fun. And then on the operational level, it was writing and looking at data. So I was a copywriter and I led the marketing team. Our content team was like content meets science team. So all of our content, people were subject matter experts. So I was the Editor In Chief of that group.
So those were the two things I was doing now. And, then we looked for help with everything else. So that might be meeting with staff, doing coaching, solving problems within the operations of the business. We brought in a legitimate executive layer. We also brought in a CFO and those kinds of things so that I didn't even have to think about those things except for a quarterly meeting.
And then if I trusted the person running each of those domains, I only need half-heartedly listening to what they're saying, you know.
[00:47:01] Jeffrey Feldberg: And you know, what's incredible about this JB and I'm going to mention a word selfish because when you mentioned the word selfish, it has a very negative connotation. But my thesis is when it comes to ourselves, particularly as business owners, as founders, entrepreneurs, we need to be selfish in terms of ensuring that we're happy that we're taking care of ourselves first and foremost because if we're happy, we can then take care of everyone else around us, but not the other way around.
And how many business owners or entrepreneurs would have been tempted by, okay, look great? Money's coming in. Yeah, I love doing that stuff, but I can't do that right now, but I'm making so much money and they do the opposite. You were focusing on your strengths, your unique abilities, and you said, okay, anything, that's not in that quadrant.
I don't want to be doing it, let's find other people to do it. But how many times do we hear about business owners saying, okay, I'm going to put my strengths aside, let me focus on my weaknesses? I'm just going to become that great CEO. And I'm weak in some areas, but I'm going to get some training and coaching and I'm going to hit it out of the park.
And you didn't do that which is admirable.
[00:48:05] John Berardi: And it was hard not to I mean because ultimately not coming from the business and nowadays like different companies use these words. So like CEO means something so different in every company, but to me, naive, young, untrained, and experienced I just felt like that is the ladder that you climb.
I felt like, the entrepreneur journey necessarily ended as CEO. And that's how I built it up in my mind. And that's why it was hard to let it go. And that's why I found myself in that position. It was like a title of distinction. You know what I mean?
That you earn through building a company up and, oh I learned that's false. I learned it, throughout this journey that I saw them on a continuum. But and some can do both, but there are two fundamentally different roles on two different axes, right there, it's not a continuum at all.
Again, some people can fill both roles. Like I was running marketing and I was running content, but the CEO isn't an extension of the entrepreneur sliding scale. And what I learned that it was a real awakening for me. I'm like, oh, career executives are more disliked entrepreneurs that I had expected, and that was a big wake-up call moment for me.
And maybe this is a nice time to transition into the sale because this kind of leads us right nicely to it. And that was your original question. And I took us off on this tangent. It all happened really fast. We hadn't been looking for money. We hadn't, our heads were down just growing this business.
And I think it's, we launched our Pro Coach our software as a service in 2016 really successfully. I mean, we announced it launched it, I think in June of 2016 or something like that. And we had 2,500 coaches sign up immediately, and now you're talking about like legitimate recurring revenue, and we had never had that before. So coaching people stay for a year and then they leave certification. They come once and then there that's it. They gave you their money. Maybe they refer their friends or whatever, but that's it. And so we had our first ever recurring revenue introduction to the business and that's when interest started, and I'm on your newsletter list. So I read the stuff that comes out and you talk about. Some of these themes quite extensively, first offer was from a company in our field, a big certification company. And it was for less than one 10th of what we sold for less than a year later.
Here's the story I've made up in my mind for what they were thinking. Okay. Wow. Precision Nutrition has got something good going on over there. Something really valuable. Those couple of rooms who don't know anything about business, we could probably slide in, offer them a what will feel like a big number to them devalue their confidence in the business, and grab it first deal, and so that was our first conversation. It was from a strategic buyer in our own field. We may have been rubes, but we weren't that dumb, you know and that did though kick off the process because we started conversations with them. They offered us something like $15 million for our business.
Which again, when someone walks in and says, hey, I'd like to give you $15 million for your business. I'm not offended. You know what I mean? That's not a sad moment for me. It's just oh well, our business is worth a lot more than that. And after we rejected that offer, they came back with 30 and then 60.
And we were like, oh, okay. I see this game you're playing. So we will never be partners with you. But I wonder if there's anyone else out there who we might want to be partners with. And our two criteria were we want to find a partner who has deep pockets. So we could fund the growth of this organization.
Number one, and number two like-minded. So when we present the growth plan, when we talk about how we treat our staff when we talk about our organizational structure, because we use something non traditional, we used Holacracy, which some people have heard of, but it's a non-hierarchical organizational structure that I think works really well in distributed businesses that use knowledge workers and I was like, they have to get all that.
They can't be like, hey, we want to buy your business. And we're going to stuff you all in an office in San Francisco like they have to respect the fact that we've been remote from day one, that we have oriented this whole company in every process and system around remote work. And you can't just airlift that into an office, just like you can't have a pandemic and make everyone a remote worker who's an office worker, so that was it so it was actually this company that triggered all the good things. So now I think very highly of them. Thank you so much for triggering what ended up being a really pivotal moment in my life. So then we had a few friends actually the individual that we hired that we've been grooming to be CEO.
And he came on shortly after the crisis I had professionally. We had gone to university together and he had started at very big companies and he, with each new job that he took, it was a smaller approaching, more entrepreneurial thing. And as we grew, we met in the middle. And his name's Tim Jones, he's the current CEO.
And so it was relationships that he had from business school and things like that, that we just started talking informally, like, how would you put together a team to help someone effectively sell a company to maximize its value, to find the right kind of buyers, et cetera. And so we always believe in redundancies.
So we ended up hiring Harris. Williams is a big company. Does this kind of a thing for people in the know or not in the know but we actually hired a second firm to shadow them? And this is Phil and I always people have often accused us of wasting money and doing overkill. But our thing is just hey I know what Harris Williams incentives are.
You know what I mean? And they are somewhat aligned with ours if ours is maximizing the sale value, but it's not necessarily aligned with all of our other intangibles. So we're going to have this other company auditing everything that they do that can give us off-the-record advice and that isn't dealing with buyers directly.
So that's how we built our team and again, fast forward to, we had a hundred NDAs, 30 offers. And it became essentially what I don't know if people consider this like a crass example, but it became a real estate bidding war. And so not only did we get a top of market, a multiple of EBITDA we got one that had very few, again, using the real estate analogy, conditions this was the dream sale process.
And again, as per our original goal, we got over what we expected. So top dollar the company that ended up acquiring us $5 billion private equity company, so deep pockets, so they could help ride out any market fluctuations and like-minded, they seem to get what we were trying to do. So, it was a dream process and I'll stop there. You can ask any questions and I suspect you might want to narrate some of it as well. So go ahead.
[00:55:09] Jeffrey Feldberg: Oh, my goodness. I am just bursting at the seams, JB. The wheels are turning, but firstly, congratulations and as entrepreneurs, it must be something in the air that we're breathing because we all think alike. And what you did, which was different than what most business owners would have done.
When you brought on the shadow firm to do that, we call that the Chief Exit Advisor. You brought on a firm, it could be another investment banker. It could be a business person. It can be an MNA lawyer. It could be someone who has a track record of success. But you're a thousand percent right in doing that because your instincts and that goes back to your unique abilities.
Your instincts were spot on because as good as an investment banker is, let's be honest, JB, you may have another liquidity event down the road, you're probably not going to have maybe more than one or two or three. And these investment bankers, they will do a book of business, billions of dollars with sometimes the same buyers again and again.
So you're a cog in the wheel and you're not aligned. So having that off to the side, so there's no conflicts of interest or not the deal table, but they're advising you and giving you the tips. They know what you don't know. How do you master something you've never done before that was just huge, but I want to go back to something that you said earlier, and it's really on the art side of a liquidity event.
And it goes back to being selfish as a leader. You were selfish of taken care of you. hey, I want to enjoy being in my own company. And that process was another X-Factor because it forced you to bring in and happily to bring in a management team to run the company because the private equity firm that the new investor if it was just all around you, this would have been a very different story.
[00:56:48] John Berardi: Completely.
[00:56:49] Jeffrey Feldberg: But it wasn't. So again, you're doing all the right things. All the X-Factors are coming into place. You have a management team, they're professionals they're of the corporate mindset that as entrepreneurs, we probably never will fully understand or get, but that's okay. We all need to be in our unique abilities and so that whole process was good.
And what I love about it is some people would say, Yeah, man, you really blew it. You just walked away from $60 million, but from that quote-unquote loss was the seeds of you rising again like that Phoenix of your, you know, you're coming out of the ashes for a much bigger and better deal, and I'm gonna throw two stats your way up to 90% of liquidity events, fail and ugly quote unquote, successful liquidity events.
And this is very real for you. Most business owners are leaving anywhere from 50% to over 100% of the deal value in the buyer's pocket.
So the $15 million that would have been a gazillion percent, even that the $60 million, it would have been well past the a hundred percent. And so when you look back at the liquidity event and it's a play Reddit of our nine-step roadmap, and I just love your thinking.
And again, congratulations how you did that. You talked about some things that really worked well for you. Hindsight's always 2020. And I know even from my liquidity event, it would have been some things that I would've done differently. Any lessons learned looking back at the liquidity event that, hey, I know we did this, but hindsight, I probably would have done that.
[00:58:11] John Berardi: Yeah. Most of the things that I dwell on are things that happen post-transactions. So the transition into new management and leadership team transitioned into new ownership. I don't think it went badly by any means. It probably went as well as it could have gone, but those are the areas where I'm like, man I had to do a lot of growth and understanding, and it took me probably longer than I would have liked to get up to speed on how it works and maybe how to navigate within that system.
But honestly, no, I felt like the team that we had was just exceptional experienced and part of also my answer is probably some naivety. We sat down, Tim, Phil, and myself again, Tim's our CEO, Phil is co-founder, and myself and we're expecting it to be a year-long process, if not more.
And so I'm like, we, can't all be thinking about this transaction for a year of business life. You know what I mean? Someone's got to run the company and do stuff, so how should we divide our time? And we decided that I would run the operations and the launches and the sales and all that stuff, and they would run this transition.
And so I was like, okay, cool. And it worked out great because I had a sit-down with the team. And that was another criteria that was really important to us that I haven't highlighted yet. And because it's not going to be as important to everyone, but like this really, I mean, we had a hundred full-time full benefits, people on the team by the time of transaction, but really this is a family, these are people that we pick out of the health and fitness industry.
I know these people from events that I speak at, these people are family. And so part of the criteria and also was like, these people have to get treated well also we want people to enjoy some of the financial benefits of this transition, but we also want to make sure that you're not going to come in and clean house.
So that's also part of our negotiation of the process. We wanted people to be treated well. And I think because we had that environment, I could sit down with the team and say, hey, listen, for the next year, you're not going to get as much attention as you're used to. So we're not going to totally ignore you, but I'm not particularly good at that aspect of running this company.
And you all know it, I cared deeply about you and I do anything for you. And if you had to transition from here, I'll help you find any job anywhere in the industry that you want. But you know that I can't have frequent meetings with you and these other kinds of things. And I'm like, and Tim and Phil are out, you know, working to raise capital slash find a deep-pocketed partner who can help us, part of this whole thing, the rationale here wasn't like, let's sell this company. We're making good money doing products and work that we're proud of. It was up till the 11th hour for us to even say yes to the deal.
And in fact, Phil called me on the Friday before we were set to close. This is over a year of work. Doing due diligence and all this stuff. And we're about to close on Monday and Phil calls me on Friday. He's like, I can't do the deal, man. And I was like, all right, cool.
Like we've been together a long time. I'd love and trust this person. If we are not going to do the deal is fine, I will trust you, but can you please tell me why I'm not going to have a hundred million dollars in my bank account on Monday? And so it just was something small that really had to do with the non-compete that they had put together for him.
And I was like, oh my non-compete isn't restrictive at all. They'll say yes to whatever you want. Let's call him right now. So we had that resolved by lunch on Friday, you know? But I mean, it was still to the point where we're like, do we even want to do this? A good chunk of cash going into my bank account and releasing all the pressures and responsibilities of running a business is cool and everything, but we've got a good thing going here.
You know, We're highly profitable business. We have great personal salaries from it, whatever. So again, it wasn't a sure-thing deal. Nevertheless talking about the team and preparing the team Tim and Phil are going to be over there working with these people who may help out the business.
And a lot of the story around that was the true story of the fact that our company was so big, that a month's worth of expenses were far greater than fill in my net worth. You know what I mean? So you get to a point where you're like to, 50, 50 founders can't support this business, if anything goes wrong, and also, I mean, we were smart about talking away profit and putting in a place that could help the business live for a year or whatever.
But that also means that now you have like 15 to $20 million that you could be spending on growth. That's just sitting there in case there's a rainy day. So when a company comes in and buys an asset like this, they don't even have to infuse any money into it. They just free up the rainy day money. And now all of a sudden you have a $20 million marketing budget or technology or innovation budget, or however, you want to spend it for growth.
So these are some of the decisions. This is why we got to the point where we were interested in this cause like I said earlier, the first thing was like education. So this first company comes in, offers us money. We're like, oh, someone's interested in us. Okay, cool. They're offering too little.
Why don't we go hire an investment banker and they can teach us how this whole thing works? And then we'll decide at the end, like right short of the finish line, whether we actually want to do this or not. And if we don't. Then it's a costly process. But I probably got more education than the cost, and if we do it's a win anyway. So that's our mentality the whole time, the justifications for going through with it were, hey, look, we're running a business that isn't as robust as it could be financially, has a whole bunch of resources sequestered that can't be used because we're trying to do good financial diligence.
This is a good thing for the company. So I bring all this up because it's part of what I'm communicating with the team while we're going through this process. Because of course the first thing folks think when you're talking about an acquisition or a sale of the company, is we're all going to lose our jobs.
We're going to get engulfed by some big company who doesn't give a crap about us. So how do we message that to the team? Early. A lot of people do it after the transition and then they try to switch fears and stuff like that.
I was like, I need to tell them early because there's no one is going to be no one around paying attention to them.
The way they're used to being paid attention to. So Phil and Tim are over there, working on the sale, I'm over here trying to grow revenue. So we get a bigger number. And so we had a blockbuster year that year we tripled EBITDA. And so the sale price was effectively tripled as a result of that. So that was what was happening during that year.
[01:04:45] Jeffrey Feldberg: Which is so many again, so many things there to unpack, but let's just do a few and what's unique about this, your culture. Culture is always unique and JB, you took a risk. No two ways about it. When you spoke with the team, hey, this is what we're doing. That the risk was you get gossip, you get rumors and people actually start leaving.
Oh, like you said they're selling out. What about me? Who's going to look after me but you approach it in a way because your narrative was a terrific narrative. hey, if we want to grow this company, if you want to have just upward mobility, if we want to even change more lives we can keep on doing the way that we've been doing it, but we can do it so much better and faster if we had an outside partner.
And that was risky, but you knew the people, you knew how they would be and it was a calculated risk and it paid off for you. But what I want to highlight for our listeners that's coming through in spades and is just so important. It's the clarity that you and Phil had. And it's also with the clarity we talk about this in step number three, how to master the art and science of a future buyer, how you think like a future buyer, you had your deal points and your no-fly zones. So your deal points, or whatever you want to put into it of I'm going to be in the company. I'm not going to be in the company.
It has to be you know, a certain price, but a no fly zone for Phil was the non-compete and because you had that clarity, albeit it was at the 11th hour about you had that clarity, you're able to make things right. You communicate it to the buyer end. And the whole point around that for listeners is you went in with a mindset of, okay, if this works amazing if it doesn't work, okay.
It took some time, it took some money, but we don't have to sell and we're prepared not to sell. And you were prepared to back down at the 11th hour if you didn't get what would make feel happy because you could because you had a solid company because you were happy because you had a management team, you weren't running it.
And that's what a lot of business owners miss. I got to go to market. Now I'm going to miss the boat. And if I don't do it now, it's never going to come again. And I just got to do it.
And they're coming from desperation and fear.
[01:06:49] John Berardi: Yeah. When I'm watching potential partners, acquirers, they're not desperate. You know what I mean? Like you said, this is just part of their, they do this every day with a lot of people, they investigate a lot of companies. They get a lot of pitch decks, I feel really grateful that we were in a position where there was no desperation. It, I think it helped us maximize enterprise value in this context. And it helped make the process really enjoyable. Cause the whole time, there was no stress like Phil and I would just check in periodically and just say, hey, are we still good with this?
We're going to still keep proceeding. Yes. Thumbs up, thumbs down either way. I'm cool, man. Life is good right now. Like I had that transition where I made my work at PN my dream job. I don't have to walk away from my dream job if someone would give me a hundred million.
Yeah. Maybe I will. You know what I mean? But I don't have to walk away from it out of desperation or fear or whatever. And that was the difference maker in this context. And I also fully want to acknowledge not everyone is in that situation, not everyone can be in that situation.
So that's why I just feel super blessed and grateful to have been there. But all this was a bit of a tangent answer your question. What would I change during the transaction process? Very little, but maybe that's just my naive take. Cause I was head in the business at the time, trying to grow revenue, full steam ahead on selling product and services while Tim and Phil were in the trenches of those negotiations.
But I will tell you, I mean, the one thing I noticed a lot of folks not do, and I really am happy that we did was early on we realized like we are a company good at selling. Like we were good at marketing and selling things. Let's use what we learned to market and sell the business, and I see people not even think of that concept. So I'll give you a couple of dumb examples. So at the time, Facebook was emerging as a sort of dominant advertising platform, it was just the tail end to Google's dominance and Facebook was starting to take over. And I realized like, hey, if we want to increase awareness and attention of who we are and what we do, and like really trigger people's affinity for our brand, oh, we put ads on Facebook and they don't even have to be called an action ad.
So just awareness ads, right? I'm like, why don't we do that with potential buyers? So why don't we get the list of people who work at the top 10 firms that we think we might partner with and send them ads for Precision Nutrition so that when we walk into that meeting, they don't have the experience of never having heard of us before.
And let's target those ads at both the awareness. Like for example, we had just help Sloane Stephens win the U S open tennis championships. And we noticed that a lot of folks that PE companies really saying they work with companies that work with professional athletes.
So we're like, okay, so let's put professional athletes and our brand in their faces, just for the staff who works there in the decision-making team. And then also let's put some stuff for like executive health and fitness. So all of the team that coaches George St. Pierre and the world champion San Antonio Spurs and Sloane Stephens now has executive stuff.
So we have links to free articles. So now all of a sudden folks who are going to be buying our company or considering buying our company are interested in the brand for personal reasons. So now we engineer an emotional attachment to our brand because I know they're going to meet with 10 other companies this week, sunlight hours, so it's things like that, like understanding that this is not only all the other sales you do, it's the biggest sale of your life. So throw all the stops at the sale process. So another example, and this is this is how Phil likes to live anyway, but it really came in handy here. He has a nice town home in Toronto.
And so he and his wife moved out. They moved into an Airbnb so that when potential partners came into town, we put them up at his house and we set it up like a bed and breakfast. We have a professional chef that works at Precision Nutrition. She travels with our lead athletes and stuff. So now she's cooking meals for these folks while they're in town, they're at this really comfy place.
They're treated like five-star guests, it's private. And each night we have these beautiful dinners at the house. Now the chef who cooks for George St. Pierre and Sloane Stephens and the San Antonio spurs is now making meals for them. They don't know it's Phil's house.
It's just this beautiful townhome that we put them up in. So they come to town and it's a one-of-a-kind unique experience. So part of our mentality was let's engineer this, these are our most VIP clients we've ever had. Let's engineer the perfect sale process because we want them to feel so much affinity for us.
And when it comes time to make an offer or compete with other potential buyers, which we did have. They want this more than they want something else.
[01:11:45] Jeffrey Feldberg: Wow. JB again, so much to unpack there. But the big takeaway and again, all about step number three, how to master the art and science of thinking like a buyer you're giving a world-class experience. It's very personalized. And let me ask the listeners out there. Would you rather do business with a stranger or would you rather do business with a friend and the strategy that JB is sharing with us, it's tuning into the world's favorite radio station, wii.fm.
The what's in it for me radio station, but as a buyer, these private equity investors and buyers and just buyers in general, they're flying all over the country. One hotel looks like the next hotel, and it's never as comfortable. You have a private chef, the company that you're working for, if you're a sports fan is dealing with the sports people, is that not exciting?
Or what is this something that you're telling your friends? hey, you'll never believe where I was the chef that cooked my meal. That chef just cooked the meal for so-and-so.
[01:12:40] John Berardi: Totally. Yes. Yeah. And also, I mean, the leadership team of the company, we eventually decided to work with big avid golfers and they were fans of the Titleist Performance Institute in Southern California, and the guy who runs it is a close friend. We'd been on speaking tours together and stuff.
So when I heard that, I was like, oh, and his son is a competitive golfer. So when I heard that, I was like why don't I set that up? I'll. Set them up with my friend out in California and they can go out and get fitted for Titleist clubs and they can get lessons and have the whole VIP TPI experience as well.
And again, the idea was just like, how can we show up in a unique, differentiated way to give these folks an incredible experience to make them like us and trust us? And it would be legitimate and make them likely to spend more money on the acquisition of our company, and like I said, people will spend on fads, they, if, oh, you're a SAS business. Okay. The multiples higher, all of a sudden. And then we'll also spend on affinity. These are just the, I don't know what I would call the emotional factors of that decision-making, and as cold and calculating as private equity teams can be when they're looking at businesses I spend enough time with them now to realize that human factors play a big role as they do in all humans.
[01:13:59] Jeffrey Feldberg: JB is always the human factor. And we're going to start to wrap this up, but I'll share a very quick story that really personifies exactly what you're saying. Most investment bankers, if you ask them, how would you determine the value of my business? And I asked that question to my investment banker and they told me the number, and I said, you wrong.
And they said, Jeffrey, we do this for a living day in day out that no offense, but you've done a great business, but you're wrong, Jeffrey? I said, okay just watch, write that down, put that in an envelope, but just watch what we're going to do and really what you're doing and the strategy that you had JB with the just, everyone who was looking at the business, you really warm them up to it.
They wanted to do business with you, not with someone else. It became very personal. And so the value of a business is not a complicated spreadsheet formula. The value of the business. People make decisions on emotion first and they justify it with logic later. So VIP treatment, private chef, I really like these guys.
They get the woman fuzzy. You get the competitive bid process because you had an auction and you had a hundred different LOI letters of an intent coming in, hey, I'm not going to lose it to these guys. No, no way. No. How I'm going to make sure I get this business no matter what, I just love what these guys are doing and you had them take themselves out of their very cold and calculator world and you put them into your world, exciting and sports and athletes and changing lives.
Everyone wants to be on a winning team and you did that. A huge congratulations, there's so much to talk about here. We didn't even get a chance to talk about your book Changemaker and all the things that you're doing. And perhaps that can be an invitation that we'll revisit that.
And maybe talk about some of the health topics as well that come out of that. But JB, you've been generous with your time. I'd love to ask you our wrap-up question here on the episode, a bit of a thought experiment if you will.
[01:15:50] John Berardi: Yeah.
[01:15:50] Jeffrey Feldberg: So I'd like you to think about the movie Back to the Future and you have the magical DeLorean car and that DeLorean car can take you to any point in time.
JB imagine now is tomorrow morning, you look at outside your window and there it is. The DeLorean car is not only sitting there, but the DeLorean car has its door open and is waiting for you to jump on in. And you can go to any point in your life, maybe it's JB as a young child or a teenager, whatever the point would be.
What would you tell your younger self in terms of, hey, JB, here's some life wisdom or some life lessons, or do this, but don't do that. What would that look like for you?
[01:16:26] John Berardi: Yeah. I have, I'll probably give a terrible answer here, but I absolutely love my life right now. I feel like at this point, it's like the culmination of all the skills and traits and unique abilities and all that stuff. And it's come to fruition at a thing that's so important to me.
You and I talked about this, we're homeschooling our children right now. And that's like my full-time gig that I can't imagine wanting to interfere with the timeline. You know what I mean? Like they do in all the movies where you can't beat yourself. If you go back in the past, cause you'll interfere with the timeline.
That's how I feel now. I wouldn't want to. I mean, I had rough teenage years, I was arrested four times before I was 18 years old. Maybe I could tell that guy something, but nevertheless, like I learned a few things. That were potent lessons then, some of the downtimes were really potent lessons for me, you know, nowadays the cliche is ask, what those things did for you rather than what they did to you or whatever.
And I don't know cliche is always great at me, but nevertheless, there's part of that. So I don't have anything for the old JB. He probably wouldn't listen, anyway. He thought he knew what was going on. I often say that Now that I'm 50. When I look back to 30, I'm embarrassed about a lot of things I thought and did and how confident I was and all that.
And that's also a thing I've heard other people express, but the game I want to play is figuring out what things I'll look back from when I'm 70 to 50 and be embarrassed about and not do them you know what I mean? That, so maybe if I had a time machine, that would be the one I want to do. I want to go forward and ask that guy what things did you do when you were in your late forties and fifties with your family, with your health and fitness, with your life choices that you're embarrassed about. What were you too confident about? What should you have asked more about? What should you have gotten a second opinion on before you constantly blundered your way into that situation?
And then consider how I might use that advice now because that's the one that seems most salient to me because while the past I feel like has taught me a lot of great things about, how to be and how not to be. I think the future could help me avoid some mistakes in the present that are probably more important to try and live.
[01:18:43] Jeffrey Feldberg: A wise answer from an old soul. I love that and JB, if there's one theme here on The Deep Wealth, Podcast with that question. It's really what you hit upon is, hey, if I change something back in the day, maybe my life would change. And I wouldn't be where I am today. And I love where I am today.
And I really respect that. And I think that's some terrific advice of, hey, enjoy the journey because that's how you got and that's going to take you to where ultimately you need to be and what you're destined to be as, as difficult as it may seem at one particular point in time.
And JB we'll put everything in the show notes.
If someone would like to reach you online, where would be the best place?
[01:19:21] John Berardi: Yeah. Folks could just look me up at johnberardi.com. From there I just have a basic page there that talks about who I am and what I've done and links off to a bunch of the things that I have been involved in or currently am involved in. I also post on Facebook and Instagram somewhat periodically, maybe a few times a week.
And that's about it. I don't have anything to sell. I wrote a book, but I've given away a couple of hundred thousand copies because it's more of a legacy project for me than a money-making or brand-building thing or anything like that. Yeah, folks can just check me out at johnberardi.com.
If they're curious to learn more. There have been some interesting articles written about some that we've written in and some that others have written about things from our organizational culture, to how we did remote work, which I think are all very interesting for people currently in the trenches of business.
Especially currently in the trenches of business today, as people try and figure out what the new normal is, post-pandemic for, where should we work and how should we manage a workforce remote in person, a hybrid, whatever. We started doing that in 2000. So we have some interesting solves for that. From our use to jobs to be done stuff in our marketing customer research teams are Clay Christianson, who we learned everything about jobs to be done from ended up doing a cool story on us and how we did a novel application of his process. Again while I'm retired now, and I'm thinking mostly about how to grow these four children there's some legacy stuff out there about what we've done and if folks are interested, they can learn more that way.
[01:20:47] Jeffrey Feldberg: I love it. And hopefully, this will be not the end, but the continuation of our conversation, JB. There's so much that we just, I feel like we just scratched the surface.
[01:20:56] John Berardi: Yeah, absolutely. Well, I'd be happy to do a part two, if folks are interested in hearing more, maybe even folks can email in with some questions or things like that. Whether we want to talk any more about our business or the post-exit process, or even general health and fitness things because ultimately that's what we did.
[01:21:14] Jeffrey Feldberg: On that note, a heartfelt thank you JB for taking a good part of your day and spending it with us here on The Deep Wealth Podcast. And as always, please stay healthy and safe.
[01:21:23] John Berardi: Thanks, everyone.
[01:21:23] Sharon S.: The Deep Wealth Experience was definitely a game-changer for me.
[01:21:26] Lyn M.: This course is one of the best investments you will ever make because you will get an ROI of a hundred times that. Anybody who doesn't go through it will lose millions.
[01:21:36] Kam H.: If you don't have time for this program, you'll never have time for a successful liquidity
[01:21:41] Sharon S.: It was the best value of any business course I've ever taken. The money was very well spent.
[01:21:48] Lyn M.: Compared to when we first began, today I feel better prepared, but in some respects, may be less prepared, not because of the course, but because the course brought to light so many things that I thought we were on top of that we need to fix.
[01:22:03] Kam H.: I 100% believe there's never a great time for a business owner to allocate extra hours into his or her week or day. So it's an investment that will yield results today. I thought I will reap the benefit of this program in three to five years down the road. But as soon as I stepped forward into the program, my mind changed immediately.
[01:22:25] Sharon S.: There was so much value in the experience that the time I invested paid back so much for the energy that was expended.
[01:22:36] Lyn M.: The Deep Wealth Experience compared to other programs is the top. What we learned is very practical. Sometimes you learn stuff that it's great to learn, but you never use it. The stuff we learned from Deep Wealth Experience, I believe it's going to benefit us a boatload.
[01:22:49] Kam H.: I've done an executive MBA. I've worked for billion-dollar companies before. I've worked for smaller companies before I started my business. I've been running my business successfully now for getting close to a decade. We're on a growth trajectory. Reflecting back on the Deep Wealth, I knew less than 10% what I know now, maybe close to 1% even.
[01:23:07] Sharon S.: Hands down the best program in which I've ever participated. And we've done a lot of different things over the years. We've been in other mastermind groups, gone to many seminars, workshops, conferences, retreats, read books. This was so different. I haven't had an experience that's anything close to this in all the years that we've been at this.
It's five-star, A-plus.
[01:23:34] Kam H.: I would highly recommend it to any super busy business owner out there.
Deep Wealth is an accurate name for it. This program leads to deeper wealth and happier wealth, not just deeper wealth. I don't think there's a dollar value that could be associated with such an experience and knowledge that could be applied today and forever.
[01:23:53] Jeffrey Feldberg: Are you leaving millions on the table?
Please visit www.deepwealth.com/success to learn more.
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As we close out this episode, a heartfelt thank you for your time. And as always, please stay healthy and safe.
Enjoy the interview!