Blair asks David to make some predictions about the new year, and then they discuss some ways that businesses can prepare for and react to (God forbid) an economic downturn.

 

TRANSCRIPT

BLAIR ENNS: David, predict the future. Coming year, the year ahead ... It doesn't matter when people are listening to this or when we've recorded it, but in the year ahead is it going to be a year of abundance or is it batten the hatches, we've got trouble?

DAVID C. BAKER: I think it'll probably be right in the middle. I think it'll be-

BLAIR: Oh, come on. Make a guess.

DAVID: Oh, no but that is a real prediction.

BLAIR: Don't you love driving through these small towns and rural parts of whatever country and you see these fortune tellers that read the cards or whatever? And they're all in these shitty little offices. I'm just wondering, how does that work?

DAVID: How come they're not in palaces?

BLAIR: Yeah. Right. Or the 49th floor of some high rise condominium.

DAVID: You talk with your clients, a lot of them every week, and I do as well, it'd be interesting to see what you're feeling right now. What they're feeling right now. My sense is that there's quite a bit of uncertainty, like the stock market wasn't great through last year, and unemployment is still low, and there's some political uncertainty. The world feels a little bit fragile. But really that's kind of in our heads.

DAVID: The actual business results have been pretty good for almost everybody in the marketing field. There are a few isolated examples of firms that have struggled a lot. Often because they lost one big client or something like that. But it's generally, firms have been doing really well, and there's thinking okay, is this next year, is this year, 2019, going to be as good as last year?

DAVID: I don't think it will be better. I don't think it will be a whole lot worse. I think we'll be lucky to have a similar year. But what do you think?

BLAIR: For context, we're recording this on December 21st, 2018. So Happy Solstice by the way. So we're going into 2019 wondering how things are going to shake out. And the stock market, see I don't pay much attention to the stock market but I just noticed that all the gains for the year have been wiped out in the last few weeks. So the market is down. There is discussion within the broader financial markets about whether, or not we're headed for another 2008-ish crisis. There is the global political unrest and uncertainty.

BLAIR: But in the face of all that, if you ask me to make a prediction of the year ahead ... this has nothing to do with reality, I realize as I was thinking about it. And only to do with whatever is going on inside of me. But I always believe my future is bigger than my past, to steal a phrase from Dan Sullivan, from Strategic Coach. So I'm an eternal optimist.

BLAIR: Now it doesn't mean I think that the market conditions are going to improve next year. I actually don't spend a whole lot of time thinking about this. That's why I'm going to interview you on it. Because you've spent some time thinking about it. And this can't be right, but it's a great way to go through life. I actually think it really doesn't matter what the markets do.

BLAIR: If I'm running a well run business, I will be able to survive anything. So, that's the way I think about. And then how I think about a bad year, looking back on it, might be entirely different. But I go into it with this, you might call it naiveté, around what's going to happen. But you should hope for the best and prepare for the worst. Is that the saying?

DAVID: Yeah. That's a really interesting perspective. And by the way, you are so messed up in the head.

BLAIR: I know. I acknowledge that.

DAVID: You think I wouldn't be surprised anymore by the stuff you say.

BLAIR: What surprised you?

DAVID: Well, you said something really powerful, that I don't want to pass up. I want to make sure that people don't miss it. And that's that from a personal performance, or a firm performance standpoint, next year will be better than last year. And that's separate than what the marketplace might bring us. I think that's really, really smart thinking.

DAVID: I want to clarify having, in that broader context, that yeah, I absolutely believe that too. Every one of my clients is going to be running their business better in 2019 than they were in 2018. But what will the marketplace bring them? And I think that's just brilliant the way you just separated those two things.

BLAIR: So I've spent a lot of time contemplating the question of, is there such thing as free will? Do we human beings have free will? Then one day I realized, you know what, it's kind of a stupid question. Because the answer is it doesn't matter. You should live your life like you have free will and you have total control. And I feel the same way about business.

BLAIR: You should operate your business like you have complete control over what happens. Because I think in those moments when we feel helpless and out of control; and if we have a tendency to blame the market, really most of us we're running businesses that can survive a downturn in the market. If we're making correct and courageous decisions and preparing ourselves appropriately, it really doesn't matter what happens in the market.

BLAIR: Now there are some exceptions to that. Maybe we'll get into that. Because some vertically specialized firms in particular are more susceptible to an economic downturn. Is that right?

DAVID: Right. For sure. I think of this as ... so you, the people listening to this, are the captain of the ship. You're standing on the deck, and you can't control the winds that are going to come your way, but how far out should you look so that you can take corrective action if you see an iceberg coming. That's kind of your job as the captain. You can't just rail at the winds, assuming that you're going to change them. But you can get your crew ready. You can think about the decisions you need to make, as far in advance as possible. Think about the culture of the crew and all of those things.

DAVID: So it's a unique balance that nobody else at the firm has to think like you do with a finger firmly on the immediate pulse, but also looking far ahead, and making those smart decisions that way.

BLAIR: Okay. Let's begin by talking about those things that our listeners can do to prepare before a downturn even hits. So if you suspect, or if you're worried about the economic conditions in front of you, wherever you are in time, what are some of the things that you should do to prepare yourself?

DAVID: Well, one of the things that you might do is think about, rather than building a much more expansive, slash expensive, amount of money going to people, you could give somebody a one time bonus, instead of building that amount into their usual salary. Because it's very difficult to take money away from somebody, so that would be one thing that you could do. I don't mean a Christmas bonus. I just mean, instead of an annual bonus, maybe you'd give them just a one time bonus, rather than raising their compensation. That'd be one thing to think about.

DAVID: Obviously if you've been doing the opposite for a long time that's going to raise a few eyebrows, but it also might just be prudent thinking, and say, "Hey listen. You've kind of maxed out within the salary range that we set for your role. But you've been a fantastic employee. I don't want to build a whole lot of fixed, higher money going to salaries, but I do think you deserve something. So here it is." I think that might be the first thing you probably think about.

BLAIR: I think that's a great way to phrase it. Because as you were describing it I was thinking, well how do you communicate this? So you communicate it by saying, "I want to acknowledge your good work." I guess this is my question. Would you acknowledge nervousness about the market? Because of the market et cetera, I don't want to build in higher, fixed salaries. Or would you always come back to, you've kind of maxed out in the salary band. Is it appropriate to communicate to your people, I'm doing this move because I'm concerned about the larger economic conditions?

DAVID: Not unless not mentioning it would strike them as odd. So if they are feeling the same thing, because of what they're seeing in the news, and what you're talking about. And if you don't acknowledge that potential for something right around the corner then I think you're going to look kind of stupid. But if saying that feels more like an excuse to them, then I wouldn't say it. So just sort of acknowledge what is widely viewed in the marketplace. I think that's how I would view it.

BLAIR: So preparation point number one is to consider bonusing people rather than building salary raises into fixed compensation. What else should people do to prepare?

DAVID: I'm really just working down the income statement thinking about where most of the money goes. Right? And most of the money goes to people. Where does it go next? Well it used, and this is kind of changing a little bit, because of how expensive benefits are for people. But where it goes next is facilities.

DAVID: So this is not the time to sign a 15 year lease. Right? It might be as long as you have some outs. And those outs are the ability to sublease to somebody else, or the ability to give them six or twelve months notice at any point in the lease, and walk away from it at that point. Or maybe if you're providing a personal guarantee for the entire term of the lease, that personal guarantee is capped at some certain amount.

DAVID: So when you think about how you might need to adjust the size of your firm, other than people, facility is the next thing to think about. So just really careful about some of those long term decisions that you're making.

BLAIR: Okay. That makes total sense. What else?

DAVID: This is one I want to talk about together. And it's just this notion that lead generation, if done well, is this massive fly wheel. Where I grew up we had to supply our own electricity, and there's this diesel generator. I remember how slow that thing would start. You'd have to crank it over by hand and it would go ... little faster, faster. And then once you turned it off it would take forever to slow up. You could lose a hand if you put your hand in there too quickly. That to me is what lead generation is like. It takes so long to spin up.

DAVID: So if you don't have your own lead generation plan well in place, before some sort of downturn hits, then you are screwed, my friend. Because it just takes so long. People are always asking me, after we fix positioning and lead generation at a firm, and you're doing the same kind of work as I am, well what results should I expect? How long should this take? And the answer isn't the same for everybody. But frequently it sounds something like this. "Well, if you do everything right, you should expect to land the first right fit client in about six months. And then about every three months you're going to land another one." And they look back at you thinking, that is not what I expected to here.

DAVID: So you've got this downturn that hits and then you decide to get your act together. Sorry friends, it's too late. You know. What do you think about how long this kind of stuff takes to spin up?

BLAIR: Well, and both of these issues, positioning, and lead gen in particular, they also affect how you see the new business position. So if you don't have the flywheel, the lead generation flywheel moving already, by creating content, building a reputation, et cetera, putting stuff out there that positions you and drives inbound inquiries. If that's not happening and then you hit an economic downturn ... and let's say you've got the new business seat is empty, and you decide oh we need new business, we have to fill it. You're going to look at the new business seat as you want to feel it with somebody who does lead generation the old fashioned way. The outreach, the cold outreach way.

BLAIR: And when times are good and your lead generation flywheel, to continue the metaphor, is turning with little effort, then most small to midsize independent firms, probably don't need a business development person who is its salesperson. They need somebody who is actually good at navigating a sale to a close.

BLAIR: Just very quickly, if you need your new business person to generate leads for you, rather than navigate the leads that marketing is generating for you, than you want somebody who has got a very high competitive drive. Who's rejection proof. Who goes, goes, goes. Who talks people into things. When leads are coming from marketing then you tend to think of a salesperson as somebody who is a little bit more patient and consultative, who's good at navigating. Is a little bit more discerning, so they have a lower competitive drive. And they're good at navigating opportunities through to a close. And in a lot of firms that can be the principal or another senior person.

BLAIR: If your lead generation flywheel is turning you don't need that kind of old school typical new business person, who's out there smiling and dialing.

DAVID: Right.

BLAIR: But as soon as the downturn hurts and you realize that you haven't done the hard work on the lead generation flywheel issue, then you're going to panic, and you're going to go looking for a salesperson, lead generator, who's going to smile and dial and try to talk people into things.

DAVID: I always picture those people driving a Taurus for some reason.

BLAIR: Why?

DAVID: I don't know. They drive 300 mile max trip and it's usually a dark colored Taurus, and they're wearing a polyester suit. Maybe I'm a little prejudiced about those sales people.

BLAIR: Yeah. Maybe you are.

DAVID: Yeah. Maybe.

BLAIR: Okay. So we're talking about preparing for a downturn. You've talked about trying to keep your fixed comp lower by maybe bonusing people, rather than raises. You've talked about being careful about signing long term leases. You've talked about do your positioning and lead generation planning and work in advance, so that the flywheel is still spinning even in a down economic period. What else? Anything else on the preparation list?

DAVID: Last thing maybe would be just to pay down as much as possible, the debt that you've already incurred from either ignoring operational issues that you should have solved in other ways, or maybe from the last downturn, or whatever. Get that off the books. Because when you are looking at reducing your monthly outlay there are some things that you simply can't touch. One of those is the debt. So if you have debt, still on the books, in a downturn, you have to cut the people side even deeper than you would have wanted to. You can't cut the facility. You can't cut the debt. So you have to cut the people side deeper.

DAVID: So you really want to focus there, and in particular you want to focus on any debt that's personally guaranteed. Which for any smaller firm listening, almost all of it is. Even the credit cards. That would be like a term loan from a bank or a line of credit. Sometimes in the bigger firms, it's not. If there's a distinction there and some of the debt is personally guaranteed, and some isn't, then focus on the part that's personally guaranteed. So that if there's a really big disaster and we have to walk away from the firm you won't be as harmed personally outside of the corporation, that is the business.

BLAIR: Yeah. This in a previous episode we talked about the idea of steady pressure and a pulse of something hitting. So the steady pressure in this case might be debt. You're carrying an unnecessarily high debt load, and then the pulse is rapid economic downturn. You've talked before about how ... I don't know if you abhor debt, but you can correct me if that's wrong. I think you've got a great line about how debt covers up some other issues. Right? It hides things. Is that right?

DAVID: Right. Right. Debt is okay in some cases. I personally hate it for anything except for appreciating assets. But where I particularly hate it is where it's just covering up sins that need to be solved in other ways. Whatever the reason for the debt that's on the books, get rid of it as much as you can before a downturn. Then of course if the downturn does hit you could borrow again. I don't think you should. You could borrow again. But mainly it's about giving yourself the flexibility of not cutting more people than you would have otherwise done.

BLAIR: Yeah. If you're carrying a lot of debt in good economic downturns, the likelihood of you surviving an economic downturn is not good.

 

BLAIR: So let's move from how to prepare to how to react. So let's say, God forbid, the market keeps dropping. Other things happen. And we get something close to what happened in 2008, and a big part of the economy kind of takes a big hit. Or freezes outright for a little while. I think you're a big proponent of having a plan. Right? Essentially having a plan, in writing, that you enact at the appropriate time. Is that fair?

DAVID: Yeah. Because it's very emotional when it hits. So whether it affected the world around you, and you weren't being singled out, or whether it was just you losing a big client. Whenever that happens it tends to freeze you. It's emotional. You don't know exactly what to do and the best way to prepare for that, I found, is for you as a management team to get together before it happens, and put two plans together. One is the adjustment plan. One is the survival plan. And you put it in a folder. I mean, maybe it's not really a physical folder, where somebody could find it. Maybe it's just in a folder on your computer, or whatever. You just pull that plan out. It will still need to be modified a little bit. But it's a fantastic starting place.

DAVID: The adjustment plan would say, "Okay. We probably need to get rid of this one administrative person. We're going to need to slim down and have two fewer account people. Whatever." Then the survival plan is much deeper than that. "We are going to sublease half of our facility. We are going to stop our cooperation with this other firm that we've been doing. We are going to put off this particular purchase. We are going to draw down our line of credit, up to this amount but not a penny beyond that. I am going to cut my salary." Whatever all of those things are. You just pull out the appropriate plan. The adjustment plan or the survival plan, and then you put it into place.

DAVID: If you haven't done that then you're typically going to lose two or three weeks worth of very valuable time in reacting the way you probably should.

BLAIR: Okay. So I'm imagining, it's a little bit of war planning or just scenario planning. You have these two folders. Here's what's going to happen when things go bad. But I also imagine that that subjective measure of when things go bad, changes as things are going bad. So you probably should have some objective measure that says, when this happens or when revenue or AGI per FTE, or when this client leaves. Or a client of a certain size leaves, or whatever. Is that what you're saying? And if so what would those objective measures be?

DAVID: That isn't what I was saying but I really like adding that. Because otherwise, you just don't know when ... so if we were part of the military planning in the U.S., we might say, "Okay if North Korea launches this missile, this is what we're going to do." That would be very easy to measure. But if we say, "Okay how do we measure our relations with that country getting worse, and so on."

DAVID: So one of the things that I've seen some firms do is that when they add generous benefits ... so they say, "Okay we're going to pay for everybody's parking now." That makes sense. A lot of firms say that. But what they don't do is they say, "We're going to pay for everybody's parking now, because now our fee billings per full time equivalent employee are above X. And by the way, if they drop below X again, then we will no longer be able to do that." So they layer the generosity, and they tie those individual layers to specific performance metrics.

DAVID: The ones that they would particularly pay attention to would typically be the fee billings per full time equivalent employee. Or it could be net profit. That net profit frequently would need to be indexed so that if the principal pays themselves less money to help get through a downturn, we recognize that. And say, "The net profit lower would be a whole lot lower if I hadn't lowered my compensation." So, that's what I mean by indexing that.

DAVID: But I like that. So we're going to go to this folder if we lose this client. Any client that represents more than 25% of our billings. Or we're just going to go to this folder if we have two quarters in a row with less than five percent net profit. Or something like that. That's how I would think about it.

BLAIR: So I think our listeners need to go out and buy one orange folder and one red folder.

DAVID: One red folder. Right.

BLAIR: Okay. What else should we be thinking about in terms of our reaction plan?

DAVID: You know when you work with a firm, and I work with a firm, and we're sitting there looking at their situation for the first time, it's really obvious to both of us that the roots of what they're struggling with came about many years ago, or many months ago. Then you stop and say, "How did that happen? What led to that?" And frequently it's when they began to chase cash instead of chasing profit.

DAVID: So they had these people that were working for them. They didn't want to lay them off. So they said, "Okay I know this is not an ideal client but at least it's something for them to do. We're not going to make a lot of money, but we'll make more money than if we didn't take work for them." And that's fine if you want to do it. But what you don't want to do is lie to yourself here and say, "And then when things get better we'll convert them into the good client that we had hoped they would be at the first." That is simply not going to happen. It's very unlikely that that's going to happen.

DAVID: What you want to do is not necessarily, you wouldn't be able to drop this edict on yourself and say we're just never going to chase cash. We're really going to chase profit only. That's probably unrealistic. But at least be honest with yourself and say, "We are going to take this client. We're not going to make much money. But at least it's going to cover our overhead. We know that as soon as we are able to we are going to replace them with a client that will deliver profit to us." So just being honest at the very beginning and recognizing when the switch in your head flips, and you chase cash instead of chasing profit.

BLAIR: That's a really important point. And you wrote something years ago, and I quoted you again within the last two weeks on the subject. I think the article was titled, it wasn't the title it was the point of it. Most cashflow problems are profitability problems.

DAVID: Right.

BLAIR: And somebody said to me the other day, "Oh yeah, we're going to do X. It's just an issue of cashflow." And I probed deeper into that to try to determine whether it was a cashflow problem or a profitability problem. But the interesting idea there is some people know it's a profitability problem. We're just not getting validation from the market that what we do is actually worth something. And others are somewhat delusional about it. So they might know it and they might be spinning a story to you. Others might be spinning a story to themselves.

BLAIR: So you're saying, be honest with yourself. First of all. About whether or not we're talking about cashflow or profitability. But in this specific situation, I really like how you said it, it's unrealistic to say never take something for the cash. Because there are times when you've got good people sitting there with nothing to do, and along comes a project that isn't profitable, and you think, 'yeah, what's the harm. It will keep them busy. Maybe they'll enjoy it. There's no profit in it for us but allows me to keep those resources around.' So you're saying that perfectly valid. Just be honest with yourself, and maybe your teammates or your leadership team about what you're doing.

DAVID: Yeah. Exactly. And when you mask a problem and say it's cashflow, what you're really saying is this is a problem with my clients. If you said profit, that's really a problem with the way you're running the business. So it's easy to deflect some of the decisions you're making around that.

DAVID: You know the other thing I would do too, working down this list, is just about, do you really want to continue this business? In the past it never seemed to be an option to just close the business because there was so much stigma attached to that. But I don't see that stigma in the marketplace anymore. I don't see the stigma of failure like I used to. In fact, I see more stigma associated with people who stick it out, and they really shouldn't. Instead the courageous decision is not to stick it out. The courageous decision is to just stop it. Right?

DAVID: But you want to make that choice for yourself. Like every professional athlete, they want to chose when they stop. They don't want their contract to not get renewed, or get shuffled down to a minor league team or something. Just deciding, making a good decision, early on, and not just bleeding all of the money that you do have out to fix this thing that in the end never gets fixed.

BLAIR: Now you work with about 50 firms a year. How many times a year are you advising your clients to shut their businesses down?

DAVID: About, probably two a year. So four percent or so, of those firms.

BLAIR: Yeah. Yeah. Okay. What else is on the list of how to react to a downturn?

DAVID: Maybe you need to get rid of that partner. Maybe this is the right time to do it. The firm will never be cheaper if you need to pay them out. This is going to be the cheapest you'll ever get it. That would be one way to look at it.

BLAIR: So I'm imagining a firm of two partners, and both partners are listening individually, and they're both thinking, 'Yeah.'

DAVID: Yeah.

BLAIR: I'm going to get rid of that other partner.

DAVID: And they're trying not to flinch as they listen to betray what they just thought of. Yeah.

BLAIR: Okay you're both in the car together. You're not making eye contact. This is getting really awkward. You better stop for coffee. Or switch to country music.

DAVID: Surely it's not that bad. We don't have to go to country music.

BLAIR: We can stop right now. We're done. This podcast will not get any better.

DAVID: It probably won't. Why do you not get through a tough time, if you do have a partner? You would think that having a partner would make it easier to get through a good time. When in fact sometimes it's just that you're not on the same page. You're not pulling the oars in the same direction. I often think that, oh there's a great opportunity to adjust your partnership. Especially if this highlights how one of you is just not carrying your share of the weight.

BLAIR: Insert awkward silence here. We just stirred up a whole hornets nest, didn't we? Anything else on your reaction list before we get to things that we don't dread about a downturn?

DAVID: No, that's about it. Those are the big things. But if you get those you've covered almost all of it.

BLAIR: Okay. So I'll just recap. So it happens, you've got to have two folders. One is like things are going bad and when things are really bad. You want to have objective measures where possible. You want to know who you're going to layoff because as you've pointed out, that's probably the easiest part of your overhead to deal with, is the personnel. Don't chase cash instead of profit. Unless you're honest with yourself about what it is that you're doing. Think about shutting it down if it's appropriate. If you're thinking of getting rid of your partner, now is a really good time to do it. Probably financially as well. Okay.

BLAIR: So you and I have talked about this before, in private conversations. We have each talked about this from a stage, or written about it. But a downturn isn't all bad, is it? Why? Why isn't it bad?

DAVID: No, and I'd want to hear what you have to say about this because you have a very strong evolutionary way of thinking about this. Right?

BLAIR: Yeah.

DAVID: You see animals killed where you live and you realize it's a part of life. Maybe firms dying now and then is a part of life. It just sounds so cruel when we say it, right, but thinning the herd is okay. If maybe you don't survive, maybe you didn't deserve ... did I just say that? Maybe you don't deserve to survive right?

BLAIR: Yeah.

DAVID: And if you do survive than tomorrow you're going to have fewer competitors. And it's kind of sad for them, but it's kind of a good time, too, right? Oh that just sounds so awful saying it.

BLAIR: Well first let's put it in a larger context. Because I think for most of listeners here, let's just acknowledge, we're all very fortunate to be born when we're born and where we're born. And to be running businesses. And if our business fails what's the worst that's going to happen? If we've been successful entrepreneurs to a point, and our businesses fail, then we will regroup and we'll be fine. We will start another business, or we will go work for somebody else, and we will put those skills to bear.

BLAIR: A small number of people, for whatever reason, whatever else they're dealing with in their lives, it's not going to be so easy. So let's just acknowledge that there's always some human suffering. But as we talked about in one of the podcasts a couple of episodes ago, the worst case scenario really, for most of us, isn't all that bad compared to most of the population on the planet.

BLAIR: So with that greater context, the idea is that a downturn is like a disease running through an animal herd. It kind of kills the sick and the weak. And in some ways it's a horrible ... well it's a ruthless metaphor. It's not horrible. But in the end it makes the herd stronger. There have been times when I've heard you say, you know if you've opened a design firm in the last ten years, and you haven't made money, then you're an idiot. Because the economic times have been so good that all you had to do was-

DAVID: Did I really say it like that?

BLAIR: Yeah. Maybe on paraphrasing. But you've essentially said, times are so good that it's really hard not to make money. We have to make exceptions for the exceptional situations. Like when you're young, you're just starting out. You're highly leveraged debt wise. Taking all this risk when you're just starting out. I'm a big fan of those people. And other things, you care for a sick loved one, et cetera. There are all kinds of extenuating circumstances. But generally speaking there are some firms that continuing with the ruthlessness streak, that the world's just not going to miss.

DAVID: Right.

BLAIR: If they go out of business. Because the honest to God truth is they weren't creating value in ways that other firms, that may have been somewhat similar to theirs, were creating real value. So if you're not creating real value in the world, and an economic downturn hits and your firm gets wiped out, you can feel sorry. You can say, "Oh the odds were stacked against me." But statistically the odds are probably that your business isn't going to be missed.

DAVID: Yeah.

BLAIR: So what does that do to the profession? It makes it stronger. At least in theory it does, doesn't it?

DAVID: It does. And even though it does sound callous I concur exactly with what you're saying. So if you are running a firm right now, and you know how well you're positioned, you've got this lead generation flywheel spinning. And you've got good people, and you don't have a lot of debt. What if next year is bad? In the world around you. What if the environment does take a turn for the worse? In some ways you ought to be rubbing your hands together, and saying, "Oh man. This is going to clear my head. I can't wait to make sharper decisions and to think more clearly about this. And to not tolerate some of the poorer performers that I have. And to use my time more wisely. It's okay."

DAVID: So as we face some of the uncertainty that's coming up, I hope the people that get nervous are the ones who should get nervous. And they get off their asses and start fixing their lead generation problem, mainly. That's the big one. I know you've got some events coming up. I've got some events coming up. People need to take that sort of stuff seriously. Or if they just know what the answer is, then they just need to get off the couch and start doing things. Those are the people I want to hear this and just really implant this sense of excited, not urgency, but excited about the future. Excited about taking their firm a little bit more seriously. I think is a message we want for people.

BLAIR: You wrote to me an economic downturn is like a breath of cold, fresh air, on a cold winter day, in the mountains. What the hell did you mean by that?

DAVID: You just can't ignore it. You just climb out of the tent and ... oh my goodness. It opens up your lungs in a way that it doesn't. And you feel alive, like you're never going to feel alive in an apartment in a city somewhere. Right?

BLAIR: Yeah. When I read that I thought some of us our wartime CEOs. When there isn't something wrong, when we're not under attack, by say a competitor or a larger economy, then we are not at our best. When you see threat on the horizon that's when, you know it's like that bracing cold air. It's like, all right. I recognize that in myself. I don't know if you see it in yourself. I recognize it in some of my clients.

BLAIR: There's nothing like a little bit of threat to reinvigorate you about your business. And that's what I was when I read your line that an economic downturn is a breath of cold, fresh air, on a clod winter day, in the mountains.

DAVID: Yeah. And I didn't mean that as a Hallmark card either. I meant it as a terrifying, sort of invigorating statement.

BLAIR: Yeah.

DAVID: This has been fun.

BLAIR: It has been fun. So let's just leave our listeners with this. We hope an economic downturn is not in your immediate future, but if it is we'd like you to think about it, like a breath of cold, fresh air, on a cold winter day, in the mountains. Okay. Thank you David.

DAVID: Thank you Blair.