Matt Bodnar, named a “Rising Restaurateur Star” by the National Restaurant Association and a “Strategy Pro” by Restaurant Hospitality Magazine, is a partner at an investment firm, Fresh Hospitality. He is also the creator and host of “The Science of Success”, a #1 New & Noteworthy podcast about psychology and decision-making.
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Time Stamped Show Notes
(click the time stamp to jump directly to that point in the episode.)
- [01:09] – Fresh Hospitality is an investment vehicle
- [01:51] – Matt is an investor at his core
- [02:04] – He became obsessed with psychology and decision making
- [02:23] – Matt’s area of expertise is in making deals and structuring transactions
- [03:19] – One BIG and Unique Value Bomb: High leverage—accomplishing as much as possible with as little input as possible. The two main things are to hire people who can replace you and improving your ability to make better decisions.
- [05:20] – Worst Entrepreneurial Moment: “I invested and co-founded a chain of cash for gold stores… We had shot guns in the store because we were worried about somebody potentially coming in and robbing the business. I lost probably $40-50K in that investment”
- [07:10] – Matt got into the cash for gold business because he thought the financial returns would be compelling
- [07:35] – There is no such thing as a “get rich quick” scheme
- [08:08] – Be careful who you choose as partners in business
- [08:29] – Entrepreneurial AH-HA Moment: Matt was still on Wall Street. He was sitting at his desk and reading when he realized that the way to build wealth is not through earning a salary…
- [09:54] – Matt’s biggest shift in understanding was around how wealth is created
- [11:33] – The Internet has blown apart the illusion of a person who has to work for pension plans
- [15:07] – What is the one thing you are most FIRED up about today? Matt is most fired up about Ray Dalio’s principles, which you can find at Principles.org. The 5-Part Framework for getting whatever you want in life:
- Set clear goals
- Identify and don’t tolerate any problems that stand in the way
- Diagnose what the problems are
- Design plans
- Execute tasks
- [17:40] – The Lightning Round
- What was holding you back from becoming an entrepreneur? – “Lack of knowledge”
- What’s the best piece of advice you’ve ever received? – “You cannot learn from a mistake if you refuse to admit that you made it”
- Share an internet resource, like Evernote, with Fire Nation – Pocket
- If you could recommend one book to our listeners, what would it be and why? – Mindset – it’s about the fixed mindset and the growth mindset
- [22:05] – Connect with Matt on Science of Success
- [22:37] – The journey to becoming a better decision maker is a lifelong process
- [22:51] – Invest in knowledge that will impact you for the rest of your life
Matt: Hell, yeah.
JLD: Yes. Matt, named a Rising Restauranteur Star by the National Restaurant Association and a Strategy Pro by Restaurant Hospitality Magazine, is a partner at an investment firm, Fresh Hospitality. He's also the creator and host of "The Science of Success," a podcast about psychology and decision making. Matt, take a minute, fill in some gaps from that intro and give us a little glimpse of your personal life.
Matt: Yeah, absolutely. So first of all, thank you so much for having me on here and it's a huge honor to be here.
Matt: To give you a little bit of background, so the company that I'm a partner at, Fresh Hospitality is basically an investment vehicle that invests across the food service spectrum. So we invest in everything from farms to restaurants, to processing facilities. Really, the core biggest piece of our business is restaurants, itself. So, within our restaurant portfolio today, we have about 18 different restaurant brands comprising about 150 – actually, a little more than 150 restaurant locations, doing about $250 million in annual sales.
And our focus is investing in really early stage restaurant companies and leveraging our proprietary tools, systems, knowledge about business operations to help them scale up. Because I'm an investor at my core and investing is really about improving your thinking and improving your decision-making, and, after studying many of the greatest investors in the world – people like Ray Dalio, Charlie Munger, Warren Buffett, and many more – I became obsessed with psychology and decision making which led me into creating my podcast.
JLD: Well, I'm kind of interested in exactly what your area of expertise is. You've kind of broken it down a little bit – let's kind of get into a little more deep into it for Fire Nation. Where do you excel? What's that area of expertise?
Matt: So I'm not a traditional web entrepreneur like many of the guests that you have on here. I'm much more of a brick and mortar investor and so my main expertise is in making deals, and structuring transactions, and kind of thinking strategically about how to position and grow a business. And kind of within that, I really spend a lot of time thinking less about sort of some of the very tactical things – i.e. download and use this specific web plug-in or this app – and think much more about sort of the high-level strategic things – i.e. what are the changes that you can make that will ripple through your entire life on a go-forward basis?
JLD: Well, that being said, what specifically should we know that we probably don't know because we don't share your area of expertise? What's that unique tip, tool, or tactic, or something that just surprises you that, again, people who don't share that area of expertise just don't know?
Matt: The thing that I'm totally obsessed with is being what I call "high leverage," which is, basically, how can you accomplish as much as possible with as little input as possible? And, from studying, both in my own life and my business experience and from studying the most successful business people and investors on the planet in the history of the planet – people like Andrew Carnegie, John D. Rockefeller, again, Warren Buffett – the two biggest lessons I've found in how to be the most high leverage – And the funny thing is, it doesn't matter what time period you're talking about. These lessons stand the test of hundreds of years, vastly different industries.
And the two main things are: hire people who are smarter than you to replace yourself and improve your ability to make better decisions. And that's where I spend all my time focusing is either how can I find and replace myself with better, smarter people and how can I constantly focus my time and energy on improving my ability to make decisions? Because, if you make better decisions and, if you invest in the ability to make better decisions, that will cascade through everything you do for the rest of your life. So, investing time today – It's the same idea as compound interest, right? Little incremental changes in your ability to think and your ability to make better decisions today will have a snowball effect where, 5, 10, 20 years down the road, you're going to have huge dividends from investing in that ability to think and really understand reality at a much deeper level today.
JLD: And that's one reason why I recommend "The Slight Edge" so often, Fire Nation, because, if you're willing to make the small right decisions today, tomorrow, the day after tomorrow, they will add up to something huge, even though they may not seem like it even after six months, even after a year. It's that slight edge that you'll get over time that will be massive. Now, Matt, what I kind of want to move into is your journey as an entrepreneur. Take us right to the meat of what you consider your worst entrepreneurial moment to date. Take us to that day – tell us that story.
Matt: My original background, I worked on Wall Street. I worked at Goldman-Sachs for a number of years and I left to become a partner at Fresh. But kind of while I was doing that – or shortly after I did that – I invested in and cofounded a chain of – and I'm terribly embarrassed to admit this but – a chain of cash for gold stores which – and I can go into a number of the reasons – but it was a terrible financial failure. I got into the business for all the wrong reasons.
JLD: Give us one of the stories that you're just like, "Oh my god, I can't believe that was me."
Matt: So just the fact that I invested in a business that I'm, now, kind of looking back at –
JLD: No, no, I want a real story. Somebody came in with a piece of gold and you're like, "What am I doing right now?"
Matt: Okay, here's a good one. We had shotguns in the store because we were worried about somebody potentially coming in and robbing the business. So we literally had shot guns and I remember posing for a picture with a shotgun and one of those signs that you twirl around – because we used to hire sign guys which is actually a very effective method for bringing business into a cash for gold store.
So I remember posing for a photo with a shotgun and a swivel sign that you would toss around out on the street and being like, "Do I really want to be in a business where I think I'm going to get robbed walking to my car every night?" But the other thing – that business, just from a financial standpoint, I lost maybe $40,000 or $50,000 on that investment so it was a very painful lesson but a good lesson in terms of what I took away from it. And I'm happy to kind of delve into the two biggest lessons that I have from that.
JLD: Yeah, so, before you do – because I definitely want to hear those two lessons – what was the reason why you got into it? What was that success that you were chasing down that road?
Matt: I got into it because I thought that the financial returns on the business would be really compelling and really strong. And, after looking at kind of some numbers from some cash for gold businesses, it seemed like it was sort of a – and this is one of the lessons I took away – it seemed like, I don't want to use this phrase, but a "get rich quick" scheme. It seemed like, "Oh, man, we can put a little bit of money in and these puppies are just going to churn out cash.
JLD: It never works.
Matt: Yeah, exactly. So one of the biggest takeaways I had was there's no such thing as a "get rich quick" scheme. And the only way to be really successful and build wealth is to focus on the long-term and focus on making those incremental improvements every single day. But the other thing that I really took away from it is we partnered up with some people that ended up just being – It was me and a buddy of mine partnered up with these people that ended up being incredibly sketchy and terrible business partners and that's a big reason that the business ended up failing. And so I learned a very painful lesson that was be very careful and very conscious of who you choose as your business partners.
JLD: Love that. So let's do a little bit of a shift into one of your greatest a-ha moments to date – one of your best ideas. And kind of walk us through the idea that you had but then how you turned it into success.
Matt: The biggest a-ha moment for me in my life was I was sitting – it was actually when I was still on Wall Street – I was sitting in my desk and I was reading this story about Sergey Brin and Larry Page and it was a story of the founders of Google. And I was reading about the fact that they had – It was talking something about whoever – whichever one at the time was sort of the CEO and his salary was $100,000 a year. And, being the arrogant Wall Street guy, I was reading that and thinking to myself, "Oh my gosh, my salary is bigger than the CEO of Google." And then the next sentence is like, "And he's worth $18 billion in Google stock." Right?
And it kind of was like this anvil dropping on my head that was just like the way to build wealth is not through earning a salary – the way to build wealth is through focusing on earning equity in something and growing that. And so that, to me, was this huge wakeup call. And, shortly after that, I read The 4-Hour Workweek and really opened up my eyes in terms of you need to have equity in a business you own because you can never really achieve true wealth if you are just earning a salary.
JLD: So, Matt, kind of just looking at that and saying, "Wow. This is a path I could go down and this is a path that I am going down," what kind of shift did you make to sort of go down that other path?
Matt: I think the biggest shift that I made was really understanding, like I said, how wealth is created. And I think reading The 4-Hour Workweek was also a huge gamechanger for me in terms of just thinking about the fact that all of these – and I know it's kind of old hat now and you talk about it here but – all of these myths and stories about how you have to have a 9 to 5 and how you have to work the corporate ladder for 20 years, and all this stuff – all of those are just essentially sort of socially reinforced illusions, right? The world is malleable. The world is changeable. And if you have the will, you can figure out a way to reshape reality into what you want it to be.
JLD: Are we the generation that is going to be kind of the last generation that thinks that way? I'm looking at my niece who's 5 years old now and I'm like there's no way that she's going to think that she has to go down the route of college, Ph.D, law school. Of course, that's going to be an option for her but she's not going to think that is the only option for her which I actually kind of thought. When I got out of the military, I thought, "I really have two routes: I'm going to go to law school or I'm going to go get my Master's in Business. There's nothing else that I can do." I just didn't have that ability to think outside of that box and I just can't picture that being the same for my niece, her generation, and even generations that are older than her. What are your thoughts on that? I don't even actually know how old you are but what do you think about the generations that are coming behind us?
Matt: That's a great question. And it's really funny – I feel like the internet, in many ways, has blown apart the illusion of the person who has to go work for the same corporation for 30 or 50 years or whatever it might be. And, when you look at things like pension plans and the fact that companies have almost no loyalty to their employees anymore, I think we're going to continue to march in that direction as technology enables more and more people to live as solopreneurs and live with what used to be – You didn't have all these resources, right? And so, now, today, somebody with an Internet connection can basically plug in and start up a business. It may not be the next Google but it can be something that provides them with a great income and lets them live the lifestyle that they want to live.
JLD: I'm looking out my window right now and there's gorgeous condos for $1,200 a month that are ocean-facing – you can walk down to the beach, you can jump on a golf course right here, you can do the tennis club, the fitness club – and you don't need to be making a ton of money to be living these lifestyles. You just need decent internet connection. But my thought is was my father – who's 30 years older than me – was he having these conversations 30 years ago or was he not? Is this really the first round of entrepreneurs that are really thinking along these lines?
Matt: Obviously, people have always been entrepreneurial and it's funny because, hundreds of years ago, you had all these small merchants and then that got consolidated through the Industrial Revolution into these bigger companies. And then, now, with the internet, we're migrating back towards more and more people being independent entrepreneurs and having a lot of small businesses. So I think it'll be really interesting to see how that pans out. But, who knows? In some ways, history yo-yos back and forth, too, so maybe in 20, 30 years, our children will be thinking, "Oh, man, that was terrible. I want to go work for a stable job with a big company."
JLD: Right. How old are you right now, Matt?
Matt: I'm 29.
JLD: Okay. So you're 29 so you're square, smack-dab in the Millennial. I'm either the oldest Millennial or the youngest Gen X-er. I'm in that 1980 range right there where they flip it over. So I'm one of the two – I bleed into both for sure, being a 1979/80s child. But I just wonder, it's just like once we go down this road, how is the majority of the population ever going to go back? How are you ever going to want to wake up, go commute to some tiny cubicle and do some mind-numbing work for nine hours to come back again when you just have other options out there?
Now, of course, – I'm trying to repeat this because I want it to be clear – there are incredible jobs that you can be excited about and working for corporations, and for big companies, and, again, there's lawyers and there's doctors that are incredibly happy and they're doing their thing but I'm just looking at all the unhappy people right now and that were unhappy. Like we watched the show "Friends" and "Sex and the City" – people in the late '90s and the early 2000s that were just non-stop, all you did was complain about your job. That was part of your life. Is that going to stop? And so, Fire Nation, we're just firing off some things there and just wondering what is the future going to bring? Who knows.
But, Matt, it's 2017 when this interview is going live, here, so talk to us about what you're most excited about in your business today.
Matt: So the thing that I'm most excited about now is – Have you ever heard of a buy named Ray Dalio?
Matt: So Ray Dalio's the founder of a company called Bridgewater which is the largest and most successful hedge fund of all time. He's a billionaire, super, super sharp guy and, really, what I've been working on recently is applying his – he's got this thing – it's totally free – it's called "Principles" and I think if you go to principles.org, you can download all of it. But it's basically how he thinks about the world, right? And he's got this amazing thing; it's called a "Five Part Framework for Getting Whatever You Want Out of Life." And it's this really simple five questions that you have to think about and there's a lot more that goes into it but the thing that I've been doing a lot, recently, has been journaling and doing a lot of thinking exercises around this whole framework and how I can apply it to improving my business and improving all aspects of my life.
JLD: So what do you know about it that you can share with us – is there anything that you've read or that has been revealed?
Matt: There's five components. I'm happy to share them. The first one is to have clear goals. And the really interesting thing about this is he really emphasizes the point of don't confuse the steps and don't do two steps at a time. So you want to set really clear goals but you don't want to think about how you're going to achieve the goals when you're setting them – you only want to focus on setting them. So you want to have really clear goals, you want to identify and don't tolerate any problems that stand in the way of you achieving your goals. You want to accurately diagnose what the problems are. You want to design plans that explicitly lay out the tasks that will get you around your problems and onto your next goals. And then you want to implement, i.e. execute, the tasks. And another one of the key things he talks about which we touched on earlier in the conversation is the idea that you don't have to be the person to do any one of these steps, necessarily. All you have to do is find somebody who's really good at that particular component and that particular piece of it and have them help you with it.
JLD: I really like that one sentence: "Don't tolerate anything that is in the way of your goals." That word, tolerate, is so perfectly used. Like, Fire Nation, are you going to tolerate something in the way of your goals? Somebody, some person, some fill-in-the-blank? No. Don't tolerate anything that is in the way of your goals. I love that. And, Fire Nation, I will not tolerate it if you don't join us in the lightning round so don't you go anywhere. We're going to thank our sponsors.
[Pause in audio]
Matt, are you prepared for the lightning rounds?
Matt: Oh, yeah.
JLD: What was holding you back from becoming an entrepreneur?
Matt: I think, more than anything, the biggest thing holding me back was just a lack of knowledge that that was even a path to follow. Like you said, it's become really popular in the last 5 or 10 years but, prior to opening my eyes and reading some of the early literature on it like 4-Hour Workweek and other things, I just didn't even think about it. I just assumed, being a college student at the time, I was like, "What's the most badass thing I can do that will get chicks and be awesome?" and I was like, "I'm going to go work on Wall Street and be cool." Right? And then grinding away for 12 or 16 hours at your desk for a couple years, that stops being cool really quickly and I realized that there was a different path to be able to follow and went down it.
JLD: Yeah, in 2006, I was 26 and I got out of the Army and I was like, "I literally don't know what to do." I did not know what that next step was and so I thought the only path open was the traditional path. And, fortunately, Fire Nation, if you're listening to my voice, you're well aware there's a lot of other opportunities. What's the best advice, Matt, you have ever received?
Matt: You cannot learn from a mistake if you refuse to admit that you made it.
JLD: Share how that's been impactful in your life.
Matt: It sounds really, really simple but the reality is, if you deny or make an excuse about why you didn't achieve something, or why you failed at something, or why something didn't happen – if you blame somebody else, if you blame the circumstances, if you make an excuse about what happened or it's just bad timing, or whatever – you've denied yourself the ability to learn from that mistake. And so this goes down a really deep rabbit hole but, basically, the sooner you can accept your own flaws and mistakes – and every person has flaws and mistakes – the sooner you can accept your flaws and mistakes, the sooner you can understand how you went wrong in a particular situation, the faster you can correct that mistake and the faster you can learn from it.
And so people who get really defensive – who try to deny or hide from their mistakes – end up making the same mistake over and over again. So you literally cannot learn from a mistake if, in your mind, you don't think that you made a mistake and you just have externalized that blame onto someone else or the situation, itself.
JLD: 100 percent responsibility, Fire Nation. There is no other way. Matt, share an internet resource like Evernote with Fire Nation.
Matt: So the funny thing is Evernote's what I live my life on but a different one that I really, really enjoy is Pocket. And Pocket is, for people who might not be familiar, basically, you can get a little plug-in on your phone or in your web browser that you can save articles to Pocket. And it's essentially just a "read it later" app but it's really helpful for staying on track. Because, throughout the day if somebody sends me an article or texts me this cool video I should watch or whatever, I just save everything to Pocket and then, when it comes time to read – if I have 20 minutes of downtime or if I'm waiting in line somewhere or something like that – I bust my Pocket out and then I read whatever's in there.
JLD: If you could recommend one book, what would it be and why?
Matt: Mindset by Carol Dweck. It's one of my favorite books of all time and it's all about what she calls the distinction between the fixed mindset and the growth mindset. And you could talk for a long, long time about the distinction between those two things but, essentially, it boils down to the fixed mindset is the belief that you and your abilities are stagnant, and permanent, and unchangeable and so that leads to people being really defensive and people trying to control how they're perceived. The growth mindset is all about how you can change, grow, and learn. And, when you have a growth mindset, you're not worried about proving yourself and showing how awesome you are – all you're concerned about is improving and it's a revolutionary book that has changed my life and changed lives of many people. She's a research psychologist – it's based in data, and research, and science, it's not opinion.
JLD: Well, since I'm sitting on fire with a parting piece of guidance, what's the best way that we can connect with you and then we'll say goodbye?
Matt: Awesome. So the easiest way to connect with me is to just go to scienceofsuccess.co/better. And I put together, basically, a really, really simple thing. It's "Four Steps You Can Do to Make Better Decisions." Like I said, decision-making is the single biggest way to change your life and have a really, really high leverage impact on everything you do for the rest of your life. So that is the simplest and easiest way to find me is just scienceofsuccess.co/better.
JLD: And a parting piece of guidance?
Matt: The journey to becoming a better decision-maker is a lifelong process but, like I said, the single most high leverage thing to do is to not focus on the latest tactic, the latest widget, the latest plug-in, but think about things that don't change over time and invest in knowledge that will be good, not for the next month or for the next couple years, but knowledge that will be good for the next 20 or 30 years or knowledge that will impact you in a positive way for the rest of your life.
JLD: Fire Nation, you are the average of the five people you spend the most time with and you have been hanging out with MB and JLD today so keep up the heat. And head over to eofire.com. Just type "Matt" in the search bar. His show notes page will pop up with everything that we've been talking about today – best show notes in the biz – timestamps, links galore. And, of course, head over to scienceofsuccess.co/better for that killer gift that Matt has waiting for you. And, Matt, I want to thank you for sharing your journey with Fire Nation, today. For that, we salute you and we'll catch you on the flipside.
Matt: Thank you so much for having me. It's been an honor to be on here.
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