 Yeah, so we got a fun little treat for you guys today before we get our little presentation started here. We thought in lieu of doing a PowerPoint like we normally do, today we are actually going to invite to the stage our very own Katherine Sullivan. Katherine is our illustrator and our graphic designer for Float On. She actually drew the conference t-shirt for this year that many of you are wearing. She's going to be live drawing during the duration of our talk to literally illustrate our points. So we wanted to talk to all of you today about sustainability, and not sustainability in the environmental sense, although obviously that's really important too, but sustainability in the sense of creating a business that can go on without you actively in it, something that can survive for beyond just your immediate influence. For those of you out here who have multiple locations or are thinking of franchising, this is a point that has probably become obvious to you at this point. You need to be able to get your business to run without your presence in it. But we think that this is actually important for everybody here, even if you're deciding just to stick in your shop and run it and you're very happy doing that, which is totally fine. There's nothing wrong about being happy in the place you are and not striving to make something completely different, but it's still an important point to realize that you need to get your business to be able to run fluidly. Yeah, and maybe at some point you just want to take a three-month vacation, and that means leaving your shop for three months in charge of your staff. Or maybe you end up taking a little bit longer vacation as well, or you just want to at some point do something else with your time and make sure that your float center doesn't completely perish in the meantime. Whatever the environment throws at us, we owe it to our businesses to be able to have them continue running. We owe it to the people inside of them, and we owe it to the very existence on our customers and everything to have it run without not just us, but any specific person to be able to have it to continue to exist. And that means creating intelligent systems, systems that can run your business for you and take care of new situations when they come up that you've never even thought of before. So let's talk about systems. When we're talking about systems, the first thing you want to know is something called the law of requisite variety. This was developed by a mathematician named Ross Ashby in the 50s, and the law of requisite variety basically states that on a long enough timeline, a system of greater variety will always destroy a system of lesser variety. So that probably doesn't make a ton of sense at first hearing to you guys. So let's start with something a little bit simpler. Take the entirety of the universe, for example. It's very complex, as I'm sure you know, and somewhere inside this massive expanding starscape is your business. And your business is never going to be able to respond properly to all of the chaos and insanity that the universe is going to toss your way. So according to the law of requisite variety, that means that the universe will outlast your business. If our sun explodes, for example, the universe is going to keep going. It's not in danger. Your business, unfortunately, will cease to exist. So the bad news is that there's nothing any of us here can do to make our businesses last forever. But the good news is that all we're really trying to do here is to make our businesses last a little bit longer than they would have otherwise before the inevitable heat death of the universe. So let's talk a little bit about variety. In system science, your variety is about how many different scenarios you're able to respond to and still survive and stay stable. So let's think about this in really simple terms. If you were to have a really bare-bones simple policy in your float center that no matter what a customer asked your person to work in the front desk, the only thing they could say was, yes, that would be having kind of the least amount of variety you could possibly have. And it's a really simple system. And sometimes it works well, like when a floater gets out of their float and asks if they can book another appointment. And sometimes it doesn't work well. Like if a floater gets out of a float and says, can I burn your building down? So obviously, that's not going to work. A lot of businesses basically try to implement a much more robust version of the same policy, though. They're trying to cover all of the different scenarios that can come up, and they're trying to make different policies and procedures for every possible scenario that could arise. And the thing is, no matter how complex or robust you start making all these policies and writing down, everything you could think that it's going to happen, there's just no way to predict what could possibly happen in your shop. Just in the last six months of running Float On, we had our HVAC system start to smell like fish. A self-proclaimed wizard came in and on multiple occasions ended up conning our staff at a free kombucha. And we had a customer email us with a complaint that started with the line, that float was way, way, way too salty. Which is probably like the best complaint we've ever gotten. So like never in a million years could we predict these things, right? And that's just a few examples of the many, many insane things that happen in a float center. So trying to make a policy for every contingency gets to be impossible. And most people's solution to this is basically to have a fallback rule, where if your staff finds a situation that they don't know how to handle, they call you and you have enough confidence that in the moment you can kind of figure out what to say and solve the situation. Because you at least trust your own judgment. And you know that even if you don't have the perfect answer, you at least will come up with a solution that you feel comfortable with. And this all goes back to the idea of variety. The more of these scenarios, the more kind of things that the universe throws at your business that your staff and everybody working in your shop can properly handle the greater variety your business has. And it means that if you're going to make an adaptable business, if you want to create a system that can roll with the punches, you need to look around and look at your business and figure out what the greatest resources for adaptability are. And that, at least for the time being, is still human beings. Humans have the ability to think, to reason, to deal with very complicated situations pretty well. And by not using the intelligence and the creativity of humans in your business, you're basically giving up the single greatest resource that you have. So let's talk a little bit about control. Allowing people to use their best judgment, as opposed to following some rigid system that you have put in place seems to involve the loss of a good deal of control. We believe though that by the very creation of flexible and adaptive systems, although you're giving up a little bit of direct control yourself, you're not making something completely out of control. You're in fact just giving the control over to the people who are more directly involved in the decision making. And it should definitely be noted that complete lack of control is certainly not the end goal of what we're saying here. We started float on days close to complete chaos as you could probably start any business. We didn't have any policies. There were barely any procedures. Yeah, we had no formal training process. We had interns coming into intern with us and we were just pretending to track their hours and lying to them. No system in place for that. We actually didn't even have a shift schedule for ourselves for the first several weeks of running our shop. We just all kind of showed up when we thought we should show up. And sometimes it'd be like four of us there all working and sometimes to be one person like looking around wondering why nobody else was there. And it took us a few weeks to realize like, Hey, maybe we should probably like write this down and decide who comes in when. Like, oh, this is like people have schedules. So as you can imagine, that whole system or lack thereof did not work out very well. And actually some of our first employees who we brought on started demanding more and more systems rather than just allowing people to clean the rooms however they wanted or set them up any specific way. I was interesting not coming even from us. People wanted more understanding and more control in place so that they knew what to do and felt comfortable running the shop. So obviously not all forms of control are stifling. You know, we need these systems to work together just like the human body where we have different organs that are kind of communicating each other and working in unity. We need that as our business and these policies when you make them well and when you implement them well can become tools. They can help people and they can help the organization as a whole and allow everyone to make smarter decisions. Let's talk about trust. So trusting other human beings can be absolutely terrifying. But it is completely essential to do what we're trying to do here, which is to build a system that doesn't require you in it. Trust is the connective fiber that holds the skeleton of these systems together. It's incredibly difficult to create a working system without trust because no matter how airtight you make everything and try to make every little situation accounted for, there's just no possible way to create a system that doesn't have loopholes or that can't be gained. I mean, you can just look at the lengths that it takes to write a legal contract to see what you have to do to try to make something that can't be manipulated. And even those still don't work. We have patent trolls and we have all sorts of things where people find ways to manipulate these kind of rigidly worded documents that attempt to control everything. So at the end of the day, the difference between the exact same policy being useful or being oppressive can just come down to trust. Imagine a shop where all the employees are micromanaged on every single little thing they do. They have tasks pop up to tell them exactly when to empty humidifiers, return voicemails, take out the trash, count Q-tips. Every kind of minute action of their day is displayed to them and basically demanded upon them at a certain time. And that is actually exactly what we do at Float On with our task generators. It pops up. And the difference here is that the staff are in control of them. They have total reign to edit them to change the times they pop up, to delete ones if they're no longer valuable, add in new task generators, they want to make sure they're getting done. So rather than trying to limit what they're able to do through these methods of control, we're trying to empower them to make their own wonderful decisions. If this exact same system was simply passed down by authorities, it would feel oppressive. People wouldn't like it, people wouldn't trust it, and ultimately it would probably fail. And all of these policies and systems are best just useful tools that you can put at the disposal of yourself and your staff, but having tools isn't the only part of the equation. In order for people to be able to use those tools, you need to trust them. And the great thing about trust is that it goes both directions. If you trust your employees, they'll trust you back. If you respect your employees, they'll respect you back. And if you have the respect and the trust of your employees, then when you start to create these policies, they won't be there to try to poke holes in them and find loopholes and manipulate them and game your systems. They'll be there to work with you. They'll want to improve these policies. They'll want to be a part of them and they'll want to help you develop them. And this alone allows you to not have to create a rulebook that has different policies in place for every possible scenario that you're doing because you know that your staff isn't there to try and game your system. They're there to work with it. And that's really the goal of all this, right? It's to set everyone up with the best possible tools they could have to make these decisions. And more importantly, your goal is ideally to set up systems that actually improve themselves so that there's something built in so that they keep responding to the new things that are happening around them and hopefully becoming better and stronger over time. And I guess the lesson to take away here is there by giving up your own control, we're not just saying thrust your business into chaos, we're saying give over control to another group of people. And in our mind, the best people suited for that are the ones who are actually on the ground doing the work, who understand the day-to-day operations, who know what the different policies should be. They're the ones who should be in charge of things. As an example, this is our company policy taken out of our employee guide about how to handle discounts and free floats at our center. Offering free floats and discounts that float on is based on your own judgment. If you feel like you should give your friend a free float because they just drove 37 hours through a snowstorm to come see you, go for it. If you think the joke a customer said is so funny that you want to give them a $10 discount, please do. The point is we trust you to use your own discretion for when and to whom to give discounts and free floats. If you ever want something more concrete to base your decisions on, take a look at our finances. You can be your own judge of what you think float on can and cannot afford. Enjoy. And we've literally had that policy since the day we opened and not once has anything bad happened as a result of it. In fact, even in sitting down to write this talk, Ashkan and I were trying to think of any instance of that even going mildly wrong and we couldn't think of anything that even came close. It's just worked solidly. And this is a big reason why we try to start all of our policies as small and as easy going as we possibly can. And the thing is when you start a policy there, when you started at the minimum requirement and make it kind of as loose as you possibly can, from there you just kind of keep ramping up kind of how strict and specific it is until you get it to work. And if you do the opposite, if you start with really strict methods of control, really strict policies because you're afraid of what might happen, you actually don't know if a more relaxed policy would have accomplished the exact same thing. It could be that you're doing a lot of work for absolutely nothing or even hurting things by having your policy in place. And as a result of that, they tend to stay there as well. It's really hard to remove something once you have it in place because you get afraid that without it things would fall apart. And then in cases like this where we write kind of the most easygoing policy we can and it turns out to work, that's great. We have for years never had to change this and now we have a great way that our employees get to feel like. They have some responsibility and we can see that we trust them, that we think they're intelligent and that we think they're responsible enough to make their own decisions. So a lot of our systems, a lot of our policies are kind of structured like this. This obviously is a really simple example, giving away discounts, free floats, very directly trusting people's judgment. As another example, on the far, far end of the spectrum is how we set up systems so that our managers can get fired. So we actually created the system first by sitting down with our managers and basically asking them to help us figure out how they would be fired. And so our one rule was that they couldn't rely on us for it. If at some point we had to swoop in and be the ones who are deciding to let them go or judge their performance, anything like that, we didn't want them to toss that idea out. So we had to come up with some way that didn't actually rely on us. And so in the end, we really decided that who we should be asking is the people who the managers are directly overseeing. They're the ones who have to deal with them on a day to day basis. And if our entire staff hates both of our managers, then maybe they don't deserve to be in the shop anymore. And this is where we hit a little bit of a problem actually. So he wanted to let the actual shop staff are kind of normal level employees have the ability to have a voice and their managers are as possible, and ideally to be able to fire the managers if possible. But what do you do as an employee if you try to fire your manager and it doesn't end up happening? And then you have to have your boss know that you try to get them fired. And you have to continue working under that person. And what happens when both people can fire each other and everyone's just kind of sitting there and you end up in some sort of Mexican standoff of seeing who's going to fire who is first. So with a little more brainstorming, we came up with the idea of an anonymous survey that goes out every six months and it's mandatory. So every staff member has to fill it out and the survey has 16 questions that are all along a five point scale. Here's an example of one of the questions from there. The question would be how well does this person handle the shop's finances and number one on the scale kind of worst possible answer is they piss it all away. And number two on the scale is they bleed us little by little. Number three would be they do OK. Number four is I think they do a pretty good job. And number five is I've named him the executor of my will. So the survey also ends with an open answer at the end saying is there any way that this survey can be improved? Are there any questions you'd like to see added? Are there any questions you'd like to see removed? And it's a good reminder that whenever possible you need to incorporate into the systems you're building a way for them to maintain a way for the systems as part of their actions to improve themselves. And then what we do is we take those scores that are anonymous and we aggregate them together and we find the average amongst them. And if that average percentage goes below a certain number that automatically triggers a meeting with all the employees to get together and basically discuss what should be done about the situation. And that's pretty much where all the specifics stop as far as the policies go. From there there's once again just too many different scenarios that a manager could be performing bad in, including they're not actually performing bad and the questionnaire was flawed and we need to really think about revising some of those questions because they've gotten an unnecessarily low score, right? So at the time that we call all of the staff together that's where we turn it over to their judgment and just trust that they can with each other and through their own intelligence dialogue and figure out what the best way to handle the situation is. And you know if they leave that meeting with the manager intact that means that because the questions were all anonymous in the first place everyone just gets to go back to work. The only way for a meeting like this to even be triggered is if at least multiple people actually had a lot of negative things to say so there's not way for one person to kind of tank a manager and there's kind of no way for after this there to be any fall out between people because there's no actual specific person that made this happen. It's just the system itself that triggered the situation. And it's kind of nice when you make really good systems the system is sort of allowed to be the bad guy and the system can take that role whereas normally you might cause some personal tensions between people. So in the end we use a very specific and rigid structure in order to get the questionnaires out and call the meeting in the first place and then we use a very loose and open system of just letting people hash it out once it gets to that point when things get a little too nebulous. And all this requires a huge amount of trust right. I mean we're basically giving our employees the chance to mutiny if they wanted to but this trust also lets them know that we respect them that we respect their decisions that we want them to take ownership of the shop and that in fact we're relying on them to make sure that the shop can run smoothly. So let's take this back to the big picture again. Remember that your goal isn't to create something that can outdo the universe something that can last forever. You just want to give your business the best chance of lasting a little bit longer than it would have otherwise. And that means making sure that it can adapt to the crazy amount of variety that the environment throws at it. And that means creating systems that can function and continue to function without you in them. And that means taking advantage of the intelligence and flexibility of other human beings that you work with which means trust. And even if you still don't believe a single word that we're saying here even if you think we're just a couple of young idealistic fools who haven't been beaten down by the great tyrant known as life yet. Consider this. There is no path towards running your business that's easy. Any direction you decide to go comes with its own difficulties and its own challenges that you're going to have to figure out and overcome. And there's nothing that you can actually do to guarantee the success or the thriving of your business anyway. So as long as you're going to be putting all this hard work into overcoming these hurdles then why not put the effort into a path that involves respecting people's intelligence treating them kindly and making it more enjoyable to come into work every day. Thank you. Thank you very much.