25 Jun June 25, 2020 – Adam & Eve Phil Harvey and Conversational Texting AC Evans
The impact on small businesses of government rules and regulations
is MUCH greater than it is on bigger businesses. With fewer employees, regulations cost much more per employee.
Phil Harvey is an entrepreneur who has founded a thriving business, a philanthropist who has created several important nonprofit organizations, and the author of five books. Harvey is chairman and a major shareholder of Adam & Eve, a mail order business that sells products for a better sex life. Harvey used the profits from Adam & Eve to found DKT International, which provides family planning and HIV/AIDS prevention programs in more than twenty countries in the developing world. Harvey also co-founded Population Services International, which today operates in almost 70 countries. Scheduled to be released in August 2020, Phil Harvey’s new book, Welfare for the Rich: How Your Tax Dollars End Up in Millionaires’ Pockets―And What You Can Do About It, describes and analyzes the many ways federal and state governments provides subsidies, grants, and many other payouts to millionaires, billionaires, and the companies they own and run. His previous books include Let Every Child Be Wanted, about the marketing of contraceptives; Government Creep: What the Government is Doing That You Don’t Know About; The Government Vs. Erotica: The Siege of Adam & Eve, which won praise from the American Library Association; and The Human Cost of Welfare, co-authored with Lisa Conyers.
Aaron Christopher Evans – Pioneer of Conversational Texting® and Co-Founder and CEO of Drips.com
A chat bot looks like a bot and is meant to answer simple questions,
where our system is humanized with human conversations.
Aaron Christopher “A.C.” Evans, a serial entrepreneur and pioneer in conversational marketing, is the Co-Founder and CEO of Drips. Drips is the first conversational texting company of its kind, founding a new category and leading the way for some of the biggest brands in the world to use automated, humanized conversations at scale. Drips is the 20th Fastest Growing Company in America on Deloitte’s 2019 Technology Fast 500™. A.C.’s story of success is truly inspirational and the quintessential entrepreneur struggle story. Starting at the early age of 16, A.C. has been passionate about “scaling the unscalable” in all of his business ventures and Drips is no exception. As a proven thought leader, A.C. shares his vast experience in performance marketing, consumer retention, and entrepreneurship. A.C. continues to innovate many of the best practices in lead conversion and compliance being adopted within the industry.
Highlights from Phil’s Interview
The Chamber of Commerce does some things that benefit small businesses as well as big ones, but in general, time after time when we examine the impact or the government rules and regulations at the federal state and even the local level, the impact on small business is much greater than it is on bigger businesses. Not just because the big boys can hire experts to get them through the paperwork and the red tape, but also because with fewer employees, say if there’s a regulation that you have to have a certain size of the railing and walkways between buildings and things like that, it costs a lot more per employee if you have 20 or 30 employees than it does if you have 1,000. So from that point-of-view, if a small business takes a regulatory hit, it costs much more for small businesses and much more per employee to conform to OSHA and EPA and other regulations that the government puts upon us.
There are cases too where a big business will clobber smaller ones. A very interesting example of that was toy makers. Back in roughly 2008, Mattel and Hasbro, the big toy making companies managed to get a federal law passed, mandating elaborate chemical testing of children’s furniture and children’s toys, which had the effect of putting out of business a lot of small entrepreneurs, particularly in England, who were making children’s chairs out of wood. They were perfectly safe, but this new law required that they’d be subjected to elaborate chemical tests, which the small individual workers at home couldn’t afford to pay, so it essentially put them out of business. So there are ways of clobbering the small guys that can even be done deliberately by the bigger ones. For example, there is a law in Georgia that you cannot pack ice cream into a pint or a gallon container by hand, it must be packed by a machine; and the cheapest one of those machines costs about a million dollars.
So even though, many of the legislators themselves come from small business, an awful lot of times when somebody gets elected to the legislature, his or her view of the world changes. The first thing that happens is that getting re-elected becomes a top priority in that person’s life, and that can mean paying attention to the well-connected people in the political establishment. It can also mean paying attention to potential donors who will help fund the campaign later on. So the loyalty to people engaged in small business as they have been in the past begins to fade. That’s at least one way that it happens. Another one is simply the effect of massive and intense lobbying by the big guys. Actually, most businesses don’t lobby, they really just want to be left free from many of the burdens that government places on them. But the biggest businesses do lobby, and the result of that is that they get a lot more attention than they probably should and the smaller businesses get a lot less.
There are no easy solutions to these problems. But I think that the tendency to burden small businesses simply needs to be fought like the freedoms that we all enjoy, it needs to be continuously defended in order to maintain them. Small businesses need to do a little more lobbying and sales. There are a number of organizations that represent the little guys, particularly the taxpayer, who is often paying the bill for subsidies to the bigger corporations. Those organizations are helpful and are always willing to respond too, and to work with individuals who believe in these things. But the fact that our constitution mandates the legality of the constitutionality of representing oneself in front of the legislature, I think that maybe we need a Chamber of Commerce exclusively for businesses with fewer than 500 employees for example, that could be a very good start. Because if you’re small, then getting together with a bunch of other people, other parties, other businesses is probably a good first step. I think most of us, Adam & Eve and many other businesses that I have been associated with, basically just want to be left alone. They don’t need no lobby for any favors. So that, I think, in a way is the first step is to fall back on some of these regulations. For example, the OSHA regulations are very tough to meet. We once got gigged by OSHA because the toilet seats in the men’s rooms didn’t have that break in the middle, they were just round toilet seats and that’s apparently not allowed by OSHA. So silly stuff like that becomes a real burden. So I think working to reduce and eliminate some of that nonsense would also be a very big step in the right direction.
So even though I may sound like a conservative person, to simplify this somewhat, I’m a fairly consistent libertarian, which means I want the government out of our bedrooms and our boardrooms as well because being left alone is as a major part of libertarian belief. I’m certainly not a conservative, my views are very much with civil liberties, civil rights, gay rights, gay marriage, and racial integration. But I’m opposed to the illiberal tendency to go to the federal government as the answer to all our problems rather than working at the community level or the county level or even the state level to try to make things work better. Adam & Eve is a conservatively run business. The president, David Groves, when it comes to cash and capital, is a very conservative investor. We spend the money on things we need to spend it on for the business, which incidentally they’re not the silly regulations. So it’s a conservatively run business selling products that only the liberals can love.
So let’s now talk about the early days of Adam & Eve and how it all started. Speaking for the entrepreneurs, I’m a little embarrassed because really in the very beginning days of Adam & Eve, my partner and I wanted to sell condoms by mail in the United States. But we noticed that as opposed to most European countries, they didn’t seem to be anywhere in the little classified ads and we found that it was illegal back in 1972 or 1971 under a century-old Comstock law that classified contraceptives as obscene. So we consulted lawyers. The lawyer said, “Well, a law is a law! You could do five years for selling condoms.” So we put our heads together. This was a time when teenage pregnancy was really at peak. So we realized that providing condoms to people, particularly young people who need it and who would benefit themselves, we wanted to help them by having more convenient access to that product. So we went ahead anyway, but the piece of good luck was that there was nobody else in that business because of the law and we were willing to take a chance on that. I think the government quite wisely decided it would be very foolish to try to put in the jail a couple of people who were basically trying to solve a social problem in the United States, so they left us alone. The business got off to a very, very fast start for that reason, the orders just rolled in. That is how the business began. We went from there to lubricants, incense, sex toys, vibrators, and so on, and also a visual material that got us into trouble for a few years. But that is basically how the business evolved as an end result. We didn’t need nearly as much capital that you typically do need to start a new business from scratch.
There were a lot of obstacles we had to face along the way, The Government vs. Erotica is the title of the book that details them. They came after us, this was during Edwin Meese’s tenure as Attorney General, they ordered detainment of sexual materials of all kinds. We spent nearly seven years in a legal battle. I was facing a good many years in jail over what was then called disseminating obscenity based on the visual materials. But afterwards, they just thought the government was trying too hard to tell us what we should read, write, and see on the screen. But it was a sustained attack. We got indicted in Utah, we got inspected in Alabama. We sued them over First Amendment rights and eventually won and succeeded in changing rules along the way. So the outcome was very positive, but it cost us a lot of money and kept us on the defensive for just about seven years. But it didn’t slow down the business.
Surprisingly, fighting for such a long period of time was not all that bad, the biggest burden is the cost. But here’s one of the surprising things to me that has happened. This process began with a raid on our premises in North Carolina by federal and state and county agents. I thought that our employees were treated rather badly, they were personally searched, they were interrogated separately, had to make statements and so on and so forth. I found a lot of our employees simply wouldn’t show up the next day, they sent them home after they put them through this process. I thought a lot of them were afraid for tangling with the law, I don’t want any part of it, but they showed up spitting mad, most of them. “What right do they have to tell us what we can sell with constitutionally protected visual material?” For the next three or four years actually, our staff morale was very good because we were being attacked by the limitless resources of the federal government and in a sense, by the country you may say. But we never felt it was by the country really, we felt it was by the federal government, which is not the same as the people, I’m afraid.
But generally speaking, the business prospered, thank goodness, because we couldn’t have afforded all the legal fees if it hadn’t been. In many ways, I enjoyed it personally because there’s nothing quite as exhilarating as a good fightwhere nobody gets physically harmed and you have a chance of winning in that kind of situation as a business that was not prospering, that would not have much of a chance. Because in order to prevail in our legal system, you’ve got to be able to pay for it. That’s why our system of justice in many respects, is not working as it should. But I felt pretty good about the whole thing and our employees were right in there with us and things worked fine. I reached the point where some years later, I said maybe I can figure out a way to energize corporate managers by threatening it somehow from the outside, by invasion from Mars or something like that. Because it really energizes people and it works quite well.
If you ask me about the current situation, I think this is a geniune dilemma for the government to tell us when we’re allowed to run our businesses and things like that. Because the health risks are serious and the consequences of those risks are not known in any detail. I certainly understand the anger of some people who are being forced to close their businesses in situations where they would choose not to. On the other hand, I think this is a serious dilemma. This virus is important not only for health but also for the economy as well. But I would not pretend to know what the proper balance is or the proper tipping point is, because keeping people out of work is also dangerous as we all know. Other forms of death and disease tend to go up when people aren’t working, and that has to be taken into account as well.
So the book, Welfare for the Rich: How Your Tax Dollars End Up in Millionaires’ Pockets, will be out in a few days I think, it will be out in early August. We would of course be delighted to see everybody in the country reading it, but I do suggest that for entrepreneurs and small businessmen in particular, it’s a good read because the details are very clear about the unnecessary harm that is being inflicted on business generally, but mostly small business, by the government. We don’t need the government dictating the size of olives or the percentage of peaches in fruit cup. That kind of crap is is typical of some of the regulations that we have to face. So the book details all of that very well and does also list the organizations that are working to neutralize some of this nonsense and suggest ways that readers can make their voices heard.