20 Sep September 21, 2019 – Asset Panda Rex Kurzius and Embracing the Abyss John Smith
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Mistakes and failure are the precursors to success. A lot of the mistakes we made teach us things to make us better and successful.
Rex Kurzius is an entrepreneur and has started three successful businesses. His latest venture, Asset Panda allows companies to keep track of its assets using a flexible, cloud-based management platform. The company is inspired by a fire that consumed the home of a family friend. Rex saw the need for an easier way to keep track of important belongings. He developed Asset Panda as a consumer-focused business and despite having a super model as a client (she needed a system to keep inventory of her wardrobe), the business did not take off. He was about to shut it down when a Florida police department contacted him about the platform and he realized it might be a better B2B resource. Last month, the company was recognized as the #83 fastest growing private company on the 2019 Inc. 5000 list. Asset Panda showed a three-year revenue growth of 3,779% with customers including Yeti, Dave & Busters, and Sandals Resorts. He was named the 2018 Entrepreneur of the Year by his local Chamber of Commerce for his efforts to support young entrepreneurs and his service to the community.
A constable delivered a large box to my door. It was full of documents charging fraud, conspiracy, racketeering, you name it. This was not the world I had expected at my doorstep.
John Smith, author and professional speaker, is the recipient of a Presidential Pardon granted by President George W. Bush. John was the honor graduate of his Army Drill Sergeant School and spent five years in public accounting. But when the Savings and Loan crisis of the 1980’s occurred, John was indicted and accepted a plea deal to avoid decades in prison. Afterwards, FBI agents told him that they always knew he was innocent. John was indicted and without a deal, agreed to assist the Justice Department in the hope of avoiding prison. Fifteen years later, FBI agents told him that they should never have prosecuted him. That lead to a decades long fight to exonerate himself. Today, John is a professional keynote speaker with a focus on perseverance and integrity overcoming adversity. He is the author of Embracing the Abyss: A True Story of Unknowingly Becoming Part of a Fraud Scandal, Receiving a Presidential Pardon, and Being Surprised by a Spiritual Awakening.
Highlights from Rex’s Interview
Panda assets are all assets or equipment that you would use to run your business, like computers, forklift boxes, warehouse, etc. We do some intellectual property tracking, software licenses, and that sort of thing. Anything that a company deems of value that they want tracked.
There were there were a few different points of inspiration. But I will tell you that before I hit the points of inspiration, I was actively looking for a business and I had built a framework to try to identify it. And the framework had things like I wanted it to be recurring revenue on a mobile device, a global issue, and something that I could expand and grow purely on the internet, instead of traveling and doing face-to-face meetings, that sort of thing.
As I applied the framework, and I was looking for things, a couple things happened. One, I had a startup company myself, at the time. It was an IT consulting business; it went from startup to a couple hundred employees in a short period of time, and we had lots of equipment out in the field. We could go into our QuickBooks accounting software and tell you it was a Dell Experian laptop, the serial number, appreciated mount, but it didn’t tell us anything about who had it, where it was, what condition it was in. And that was one thing that started prompting me to think. And then I had a friend who had a devastating house fire, and lost everything he had. When he went to negotiate with the insurance companies, he didn’t have a detailed list of the contents of his home. That was sort of the second thing. The third is, I was actively looking for a business to start, so I could teach and mentor my kids, so they could watch me start a business and be part of it. They picked the name, they picked the logo, and they’ve been involved since day one.
Initially, we launched and we tried to go beta. The problem is, we couldn’t get enough consumers to take on the product fast enough. So we had an option, either shut the company down or pivot. So we pivoted towards business. Then at the time that we pivoted, there were quite a few state governments, the state of Tennessee is what I’m thinking of in particular, that mandated tablets in first responder vehicles over PCs. Then they needed to change the types of systems they used and operated in those vehicles to track their equipment. So they started using the app as it was designed for home use. They would change master bedroom to jail cell one and dining room to squad car 15. We went back and forth with them to try to understand how they really wanted the app to work, and that was a critical inflection point for how we pivoted to change to businesses. The whole concept of customer feedback is absolutely critical for the development and expansion of any business, and especially a business like this.
It’s about 3800% growth over three years, it’s a combination of understanding what the demand is for a certain feature set in the marketplace. Getting a good feel for what the core product functionality needed to be, who our perfect client match was, and then building marketing programs, digital marketing programs, helping people that have the business issue that we could solve find us. So a lot of content marketing, paid advertising, reviews, that sort of thing.
We have a very broad client base. It’s everything from Fortune 100 companies, to nonprofits, and everywhere in-between. You mentioned some earlier, Dave and Buster’s and Sandals and Getty, those are examples. Golden State Warriors are a client, and the Georgia Aquarium; it’s really any organization that has something they need to track and value, and they need a low cost, high impact way to do it. Asset Panda is a good fit. We fit right in-between the accounting systems and the ERP system. Our data is a wonderful compliment to any accounting system, and same thing with the RPS/RX.
This business was bootstrapped. I didn’t raise any outside capital. I started very small, with a product manager and then a small group of developers. I was able to finance it myself. It was important to me to be able to do that, because I wanted to avoid traditional financing routes, primarily because the business model wasn’t completely baked, and I knew it was going to take a fairly long runway to try to understand product market fit, and then how to market the product itself. I’ve done startups in the past where I raised money, and equity money for growth is the most expensive money you’re ever going to bring on. I was hoping I could avoid doing that, and I was very thankful that ended up being the case.
This business has been around for seven years and seven months. I tell people the first four and a half years, the analogy that I can come up with was, a couple of them would be walking through a desert, seeing the dunes but not having any idea where you were, what direction you’re headed, or maybe being in a huge dark room with all the lights off, and having to feel your way around. We made lots of mistakes, but I think mistakes and failure are the precursors to success, and a lot of the mistakes and a lot of the failures we’ve had, continue to teach us things that make us better and make us successful. So we did everything from wasting large sums of money on content and digital advertising, because links were broken. We built wrong feature sets that the market didn’t accept, we hired some of the wrong people. If there was a mistake to be made, I think I’ve made it. But nothing terminal. It’s just part and parcel of, if you’re going to be successful at anything, you have to push yourself, you have to push your team, and you have to push the boundaries of your marketplace. Sometimes you push a little too far or in the wrong direction, and you have to correct your course.
Our sales strategy is an inbound sales strategy. We have lots of content marketing, and content marketing would be blogs, white papers, testimonials, case studies, press releases, that sort of thing. People will find an article or find some bit of information, want to learn more, go to our landing page, fill it out, and a lead goes into our inbound sales team. Within a few minutes, I call you, set up a 30 minute demo, and show you the system.
What’s important to understand about the framework is there’s two sides to it. One is the obvious side, which is the business model, or the marketplace, or the product or service that you want to try to fix or create a service for. The other side is personal. I would argue that the personal side is maybe more important than the business side. If it aligns with how you want to live, where you want to live, the type of lifestyle that you want, I think you’re on a pretty good track towards doing something that you may really enjoy doing over a long period of time. Because these businesses are hard. None of this stuff is easy. It takes a long time, and you go through your highs and your lows. I think all that has to align with what your personal goals are. Just some brief examples of personal goals: I didn’t want to risk any more than 5% of my net worth. And then my next venture, I didn’t want to have to travel for business related issues if I didn’t want to and I wanted to be in a business that I could leverage some of my expertise from the other businesses that I’ve had. That was some of the personal side of it, and I also wanted to include my kids. Then it lends itself to the business side. If you take the time to understand what’s important to you, and what are the attributes of the business that you’d be interested in, it takes you down avenues that aren’t very obvious, like asset tracking. I had that issue in the past in my own businesses, but I was by no means an expert in it. But the marketplace presented itself, and the market opportunity presented itself in a way that it aligned perfectly with what my framework was from a business concept perspective and a personal perspective.
I think that there are opportunities now; I call it the golden age of entrepreneurship, where you can get instant global distribution. For example, on a mobile app, just by creating an app, and putting in the Apple Store or Google Play, you can host like Asset Panda. When I first started I was on the same cluster of servers that Netflix was on at Amazon; we’re a small company paying $150 a month. The key is to get your idea out there and get feedback from the marketplace on your idea.
I agree with you that the vast majority of businesses are essentially, I see it as copies of other businesses, or maybe not even a copy, but an improvement upon something else that existed. I didn’t invent asset tracking, that’s been going on for a long, long time. I just found a way to do it. So I would agree with your philosophy. That’s why I was saying earlier, I didn’t get a lot of entrepreneurs getting businesses just because they’re really good at something, and they know a particular space. But I agree with you, it can be very innocuous, and maybe something that you don’t have a lot of experience in, as long as it ties in to the things that you’re interested in doing. You find an interesting problem to solve in the marketplace, and then it fits your criteria of how much you want to invest in that sort of thing. I think those are the critical components.
That’s one of my pet peeves. The big pet peeve I have is these guys who talk about OPM, other people’s money. And their whole business model, when you meet with them, the beginning is how much money they’re going to raise in their Series A and Series B. Seriously, they don’t talk about how they’re going to generate revenue from the clients. That’s my pet peeve.
I’ve got a daughter, Sophie, who is a junior at University of Arkansas, entrepreneurship major. She’s interned for the company, and she actually helped us with quite a few things this summer, and gave us a big marketing insight where she realized that if we had customers who were at risk of not renewing, that they had a very few actions associated with their account. Once you do that correlation, we created a program internally to make sure we implement accounts that had more than two actions, for example. And then there’s the back and forth, the family dinner table topic. I know entrepreneurship, so the thing I wanted to impart to my kids was the concept of entrepreneurship and why you want to be an entrepreneur. For me, it’s about freedom, to make my own decisions, to live the way I want, to be where I want with who, where I want to be, doing what I want to do. Imparting that to my kids, they can hopefully have the courage as they get older to start their own companies and be their own bosses.
I see my purpose now as setting a good example for my kids, being a good husband to my wife, and building up companies that create great jobs that impact the community in a positive way, and change people’s lives, both on the client side and internally, and everyday gets me all fired up and ready to go. So I want my legacy to be that I was a good man, a successful entrepreneur, and hopefully showed a good example for other people to follow.
You can go to AssetPanda.com or LinkedIn. I’m on either one.
Highlights from John’s Interview
We usually begin in a galaxy far, far away in the days of Luke Skywalker and Chewbacca and the other guy named Darth Vader. Sneaky lives, sleepy banking institutions known as Savings and Loans. Their appointed task was to provide mortgages in their communities, which were mostly rural. But they weren’t doing too well, because interest rates at that time was approximately 18-19%. So the government Federal Reserve decided that they were going to wage a war on inflation, and in doing so they had to deal with the S&L because they were normally making mortgages of 3%, and having a cost of funds have to turn around on them. So the federal regulators became concerned, in an effort of finding and allowing the real estate developers to own the Samus Alliance. Problem was, a solution for developers, real estate developers, to home savings and loans was that those guys didn’t have little, if any scruples, not even aware of honesty and that one thing called integrity. They began treating their new clients as loaded with their own personal piggy banks. And that happened across most parts of the country.
I was an executive officer for administrative matters and compliance. I was a CPA, and the Chief Financial Officer of the holding company that bought the S&L. And they acquired the S&L. That was the way that they began to run it. I left them because it was quite a show. And I remember thinking that due to an oversight, the S&L grew from $80 million balance sheet to $1.4 billion in only four years, which gives them a name of high flying S&L. I took a leave of absence of about six months, and I was thinking I was going to have a consulting agreement, be making lots of money, and the world was at my doorstep. But instead, six months later, a constable delivered a large box to my porch, and it was filled with documents for charges for conspiracy, racketeering, you name it, they listed. This was not the world I expected at my doorstep. I dug through the box, and I was thinking, it’s just going to be a matter of time before these guys figure out that I wasn’t one of the bad guys. But that didn’t happen. I didn’t lie. I didn’t cheat. I didn’t steal. I wasn’t like the others. I didn’t hang out with him at the bars or fly on the company dime to California to play with the prostitutes. I was too busy coaching peewee football and baseball. I faced an angry task force that came to Dallas with guns. Guns and newspaper headlines. They charged the top seven executives of the S&L, which included me, and it didn’t matter if you were an officer or a secretary or bill clerk, the FBI knew everyone was involved and guilty. A few months later, criminal charges were filed by the Justice Department. I told my attorney in the beginning that I didn’t do anything wrong. I wasn’t part of what they were doing, what they had going on, and he looked at me like I was six kinds of stupid, and he said, “There is no right side, there’s feds and all their might.” And he yelled at me, “You just don’t get it, do you? Don’t you get it? You’re on your way to prison. You can’t defend yourself against the government. They’re gonna run over you with their biggest truck, and have them back up and do it again.” He said, “They hold all the cards, including the current public perception. Even if you weren’t involved, you’re not going to be able to separate yourself from the others.”
He concluded that my only hope of avoiding prison was to cross the Rubicon and become a member of the other camp, so I began working with the FBI, as in research, and then came a February day where I had to plead guilty to something. And I pled to one count of fraud, making a false statement, not under oath, over financial statements that I never saw. Sentencing was six months later, and I was then beginning research and going through almost every box that there was available in large warehouse and office buildings. I followed up those with multiple interviews with the FBI. And during this time is when I learned what had really happened. I’d learned how they did it and hit it. Alone, the files didn’t make any logical sense. There was no purpose for doing loans. That’s because of the fraud funding going on, driven by their own arrogance and narcissism. The day I arrived at my court date, my judge, known as the hanging judge, prepared my sentence. It was quite an ordeal. I didn’t think I was going to stop shaking. At one point, Justice Department attorneys declined our last resort for leniency for me, because they were under orders to get as many people in prison as possible. I received 500 hours of community service and five years probation, but no jail time. I didn’t have a deal, as most people think. I helped as much as I could, I kept my promise that if I did cross the Rubicon that I was going to do it right. You get the truth from me, you can rely on me to become one of their witnesses. And I became their only witness for the government over savings and loans in this area.
14 years later, I was also a witness in a lengthy trial, and I was asked to go to lunch by the senior FBI agent who had worked my case at Darden. He said to me, when we sat down, that he wanted me to know that he’d been in touch with the other agents that work to learn the silence cases and the Justice Department attorneys. And they said, “We’re all in agreement that we should never have prosecuted you.” I was just stuck. You could have scraped me off the table. I finally got control of my voice box and looked at him and said, “You look like you’re buying lunch.” I didn’t know much about the pardon process. They didn’t either. They said they’d support me if they could. What it meant for me is, I didn’t want to do it first, because it means another investigation. We’re talking about labor’s employees, friends, even my ex-wife was contacted. Even my best friend, he said, “You gotta do it. You can’t not do it.”
George W. Bush pardoned me. It took an additional seven years after I filed it. And of course, that was approximately 20 years after I was sentenced. No money was involved. I didn’t even vote for George W. Bush. That was the purpose of the lunch. The guys wanted me to know that they should never have prosecuted me, that prosecuting me was their mistake.
I think their motivation was to see if they could help me with the pardon. The pardon process is quite different. You’re investigated again, I think I said, and I wanted to make sure… I didn’t want that to hurt me. I remember Abbey Road, one of the songs on Abbey Road where the words went, “Boy, you’re going to carry that weight, you’re going to carry that weight for a long time.” And I did, and that department helped. But I still do carry a good deal of that weight, and I try not to think too much about it. I had to adopt certain ways to handle myself, I had to control my emotions, I felt my own mental toughness, self discipline. Basically, I persevered. It was a grueling experience. But I did get through it.
Embracing the Abyss actually comes from Frederick Nietzsche, who was quoted as a man who looks into the abyss, and the abyss looks back at the man. It’s at that point, where man finds his conscience. That’s what I was wrestling with, of how to get people to understand that I really didn’t do anything. And even today, most people think that I bought this pardon, and I did not. I’m surprised that… I guess that’s what’s happened in the past.
In looking back, I tried to be able to master myself. I learned that in order to be courageous about the matter, you have to be yourself. I know that sharing my courage helped others. Strengthening your courage with hope. My partner attorney’s name that was assigned to me, her name was Hope. I used to call her every Thanksgiving after President Bush would pardon the turkeys on TV, and she said, “Mr. Smith, I can’t help you. I can’t tell you anything about your pardon.” But then in a few days, a week or so before Christmas, I got the phone call. It happened just like that. President Bush would like to issue you a presidential pardon.
I’ve looked back a lot, and I’ve tried to sum it up many times. It’s much easier said than done. You know, did I survive? I persevered through that, I was a victim that was screwed. And as time passes more and more, I believe that I may have simply been selected. People, when I speak with them, I stand there as living proof that there’s a greater presence out there. I have guidelines that helped me get through all of this. Hold tight to your courage, and share it. Pass it on to others. It becomes boundless, and they share their courage with others as well. Strengthen your courage with hope; hope’s mental willpower. Faith brings resolve; the faith you need most is the belief in yourself. I think I can I think I can, reaching the top and heading down the other side. I knew I could, the words are from the story of the little engine who could. I love that. I learned to have faith in myself, to believe in my courage, to hope eternally, and resolve to never give up.
I believe that storming nonviolent criminals would be called protocol. Those are probably in the manual for the FBI agents, how to do what they did. Knowing what they’re going to find on the other side of the door at 5:30 in the morning, you might wonder why they do that. I don’t know. But I think some of the sentencing has occurred for those 14 days in prison for cheating everything they could get their hands on at the university in order to make it an easy ride for their kid. I have a hard time of smiling at something like that.
My book, Embracing the Abyss is on Amazon, Ebook, paperback, hard copy. I have a website, EmbracingtheAbyss.com and also ethicsspeaker.com for contacting me for speaking.