 Hey, so what are we going to talk about to these people? Do we have to give a talk? Maybe. Um, we could just sit here and hang out with all you guys for like an hour and does that sound okay? Great. All right. You know, you're supposed to start this thing. I'm supposed to start this thing? You're supposed to start this thing. Oh, okay. You know, it might be more interesting if we just give you a talk because does that sound better to everybody? Okay. All right. All right. We'll give you a presentation then. We'll give you a presentation. Okay. So my name is Ashkan. This is Graham. We run a float tank center here in Portland called Float On. I don't know if you guys have managed to stop by there at all, but it's definitely worth a visit if you head down and check it out. We also do this thing called the Float Conference. I don't know if anyone's heard of that before or not, but that's a pretty fun event. We recommend checking that thing out. And we do a lot of stuff, and just to give you a little intro here about our actual float tank center as a good place to start, we've been running since October of 2010. We opened up with four float tanks, and then we grew and expanded to about six float tanks, not about exactly, we're at exactly six float tanks right now. I guess if you count the Epsom salt, that's just all over our lobby. But we're at six float tanks, and we've had that up and running for about a little over a year now. And just a little bit about kind of the numbers of our business. We run about 1,250 floats a month. And what's the other number there? That's just a random 42,000. Yeah, yeah. That's just a big number. Just a few. In total, over the last four years that we've been open, we've run about 42,000 floats through our center. Which is about... Thank you. Thank you. It ends up being about maybe 20,000, 22,000 individual customers that we've had come through the doors, and that has had pretty much all hours. So we started out open 12 hours a day. And really quickly, we just started getting slammed with people. And we started expanding our hours, and eventually we hit the 24-hour mark. And we just kept being packed full at 24 hours a day. And this is a shot from our beginner's guide to floating. So 24 hours a day, six days a week. And then, of course, we're closed Mondays for our deep queens. And it has been a really amazing ride. It turns out there's an incredible demand for nothing going on. And a couple other stats just on us to breeze through these. And a lot of these we covered during previous float conferences. This is just kind of a whirlwind tour through our organization before we get into the meat and potatoes of our actual presentation. So we do 90-minute floats. That's the minimum time that you can schedule. We actually lock people in the tank so they can't get out earlier. That's not true. But we do offer longer floats. So people can do two and a half hour late night floats, and they can book their floats together. So you can kind of string together two 90-minute floats and get a three and a half hour float or a five and a half hour float. The longest paid float we've actually done in our space was 24 hours. Yeah. He came out and said he thinks he can go for 48. So, yeah, crazy. We've done some fun things over the years with our actual float tank center. We talked a little bit about this kind of stuff at our workshop as well. But just to give you another brief overview, we started off by launching an art program in our center where we gave 150 artists in Portland two free floats and just asked them in exchange for those two floats to create a piece of artwork for us. And the end result of that was we got 150 unique pieces of artwork all inspired by floating that we got to turn into this awesome art book, which is a lot of fun. We've also run a music program through our space where we gave about 27 different musicians and bands and DJs all six free floats over the course of two weeks, so a really condensed program. And from that we made a three CD set out of the music, which is also what we used to let people out of the floats that we run in our center as music composed in our float tanks, which is kind of a nice little way to close the loop there. We then did the most delicious program we've run, which is our chef program. We floated a bunch of chefs and had them create recipes for us and then made them cook them for us so we could just eat them all, which is really great. And we've been turning that into a cookbook, which is really exciting. And we'll be releasing that relatively soon here. And we've run all kinds of different programs too. Dance programs, we have a writers program going right now. One of our employees invented his own program called the Floater X Project, which instead of giving floats to a large number of people from a specific group, it's taking individuals who have really acute problems. For instance, insomnia combined with fibromyalgia, combined with chronic stress, and putting them in the float tanks and seeing what happens. And then doing video recordings and writings on those. And that's been a really beautiful program as well, watching those people come along. We've had writers come through. We've had slam poets. We've ran a program for pregnancy. We're just starting an insomniac program right now. We basically have a lot of people interested in doing a lot of crazy things with float tanks and the infrastructure in our business to support our employees to run those things and bring those people into the tank. And it results in all these kind of fun projects that we get to do all around Portland. And other things that we do around that you might have seen as well in addition to the conference, float tank solutions. We started about a year and a half ago now. And that we help people start up their own float tank centers and pretty much just share all of the information that we can that we've gathered over the years of making an incredible amount of mistakes ourselves. And we then became really frustrated with the software we were using to run our float tank center. And ran into a programmer who was interested in floating. And we were interested in learning some programming. And so we started trading some programming lessons for floats. And it turns out we really like programming. And the programmer really liked floating. And then we created our own float tank software as a result of that entire thing. So now we have the float helm, which we actually use to run our actual center and put it out there for other people to get to use to run their float tank centers as well. And that's been about two and a half years in the making, which has been a wild ride in itself. In addition to that, we started up a book publishing company called Coincidence Control Publishing. And just this last May did a book launch of Programming and Metaprogramming in the Human Biocomputer by John Lilly, which was the first unabridged copy that's been released in 25 years now. And we managed to push it to number 93 on the Amazon best seller list when we launched. So that's a little bit about all of the crazy things that we do, and probably why we look so tired all the time. But just to give you a little bit of background about why we even do these things and how we do these things and why we even want to run our business like this, a lot of what our talk is actually going to be about. So just to give you an overview of what we're going to be covering, we really want to get you to know that it's kind of your duty to run a business that you care about. And you don't need to do things how they're conventionally done at all. Much of the convention in this world and certainly in the world of business is crafted from an infrastructure of selfishness. And doing things unconventionally is harder because there aren't as many paths already made for you to take. But coming from a place of generosity yields greater rewards in the end. And just in case you think we make this stuff up as we go along, there's a copy of our speaking notes. So this is pretty much going to be the outline of the talk that we follow. This is our thesis in five sentences, if you will, for why we do what we do. So let's just break that apart. And the first one is, it's your duty to run a business that you care about. There's a quote that we heard in a podcast that we like a lot, a business podcast called Mixergy. And we're probably paraphrasing it. And we don't know who the author is. So it's all about the intention of the quote, really. But it's do something big and do something you love. Because whether you do or whether you don't, it's going to take the same amount of effort. See, might as well dream big. Seriously, though, opening up a chimney suite business is going to be the same amount of work that you put into it as opening up a multinational conglomerate. You only have so many hours in your day. And when you're a small business owner, there's a joke in the business world that being a small business owner means you get to work any 18 hours a day that you want to. Yeah, this is going to be what you're spending your time doing. And it's important to think about that. Like time is a limited resource. It's probably one of the hardest limited resources that we all have. And the fact that no matter what you decide to do, it's going to take that same amount of time should really put a significant consideration on what you're actually doing with your time. And it's not like he said, it's a renewable resource. As they say in Fight Club, this is your life, and it's ending one minute at a time. And you might as well do what you love in the process of going through this. It's insane. It is actually insane, opening up a float tank center. And if you don't love it, you're going to be miserable the entire time. And if you do love it, it'll be like us. And it doesn't actually feel like work. You'll grow giant mustaches. So this is one of my favorite people, actually. And I started looking into him after I heard about him in second grade, George Washington Carver. I see who this is. This is also my favorite picture of him with a big mustache. Lots of times he has it more cropped. I'm going to see a theme throughout our talk. So he said, anything will give up its secrets if you love it enough. And I recently found the full quote of that, which is, anything will give up its secrets if you love it enough. Not only have I found that when I talk to the little flower or to the little peanut, they will give up their secrets. But I have found that when I silently commune with enough people, they give up their secrets also if you love them enough. And George Washington Carver is most famous for developing over 100 different varieties of peanut products. He was very into the soybean world as well. And these were alternative crops when the bull weevil started wiping out cotton. That's why he was doing this really interesting guy, an ex-slave. And again, the big takeaway that I take from him is that you really can dig deeply into something as simple as peanuts and end up just exploding that entire world if you love it enough. So running a float tank center is crazy, basically. It's a huge, huge project. It takes a lot of work. You get up and running and everything feels great. But at a certain point, you have to tear your floors out and replace them. You have to fire your fourth employee. You have to get rid of that contractor who's been failing you over and over again. And it all just starts to pile and pile and pile on top of each other. And it starts to make you seriously question things. If you're getting into this and you're really going through there and being there at 3 in the morning every night and getting that pump fixed and all the work that it actually takes to give everyone that actual float experience. Yeah, by the time I had fixed my third liner leak at 2 AM, I was just ready to collapse. I could not believe it. And for some reason, I'm always the one in the space when the liner is leaking. So I'm always the one that has to fix it, which is ridiculous at one point. We didn't have the materials. We didn't have a new liner because a liner had broken a leak more recently than we'd had time to actually replace it. And so I'm in there trying to figure out how to fix this hole that we have now torn in our liner. And I call one of my employees up at 3 AM and tell him that he has to drive down here with an iron. So we can try and melt it together and put saltwater in there. And that completely failed. It was terrible. He woke up his girlfriend so he could get an iron from her. And we ended up just putting 100% silicone cock on it and making this giant patch, getting it back in, covering it in tape. And we were able to run floats in the morning without canceling on anyone. But it was absolute insanity. And that's just the nature of the beast when you're running something as complex and relatively unknown and underdeveloped as float tanks. There's a night that we have now called the night of three floods. And it basically started when I noticed a tiny little leak coming out of the filter in one of our float tanks. And I was like, oh boy, OK, we've got to go reprimed that and get that going well. And I went to do it. And as I went in, I noticed that the pipe had fallen off on the inside of the float tank. So I was like, OK, time to get naked and take my clothes off and get in there and start fixing that. And while I was in there, I brought a little bucket of water and that spilled. And I was like, ah, OK, I've got to go fix this bucket of water. And then I noticed there was another little tear in our liner and that started to spill. And I went to go just basically get the water out of the float tank. I'm like, OK, we've got to start pumping this water into a trash can. And so we started pumping it out. And then that pump just shot the hose off and started geysering saltwater out into our lobby at about 6 in the morning, about an hour before our floats were supposed to come in and float at 7 o'clock. And that was really intense. I'm sure everyone here probably has a night of four floods. There's something equally as crazy as that. It's really insane. We ended up the night before we opened up. We had not put in our handicap spot that we needed to do past inspection. And so at four in the morning, well, it's like drizzling outside. We're out there with these special paints, measuring the lines in the 7-Eleven parking lot to figure out the distance so that we can mimic their parking handicap spot in our back parking lot. And we go back there and we get it completely done. And we finish up at 6 AM. The inspector peeks around the corner and is like, great. It walks up. But again, total, total insanity. And it's just we didn't, you know, it wasn't like we were trying to be irresponsible. It's just that we'd given ourselves a deadline to open that we had to meet because we also bootstrap. We just are irresponsible as we're saying. Yeah, we are really responsible, I guess, is exactly what I'm saying. But we, you know, it just everything takes longer than you think it's going to with float tanks. Everything is saltier than you think it's going to be. And eventually you end up at 5 AM in the rain trying to paint a handicapped parking spot. And again, if you don't love what you're doing, these things will destroy you. They will just wear on you and you'll get worn down. And if you do love it, and if you're working with people who you also love, then it becomes a story that we get to tell to the rest of the community. You know, at the time, of course, we're exhausted and we're going through it, but we're also just laughing and smiling the entire time because of how absurd it is and because it means that we're one step closer to opening our center. Yeah, and so if you can imagine doing all of this work into something that you don't care about, it would just be awful. It's not worth it. Run, run for the hills, get out, you know. If you're doing something that is not at all completely interesting to you and completely captivating, then five years from now, I think you're probably going to be very regretful, I think, as the end result of all of it. We have a lot of people out here, too, who are really new to the industry. And we have several people who have stuck around for the entire thing. Glen and Lee Perry, for example. It's amazing, you know, they saw it launch, they saw it boom, they saw it go through almost a 20-year period where there was just dwindling interest in float tanks. And now here it is rising back up again. And again, if you don't love something, do you have the patience to wait for two decades for it to come back around and resurface? It can be challenging. So that's why we say that it is your duty to love what you do. Okay, so now we've covered that part. Now everyone here is here because they really want to. They love it. From that foundation, when you're actually running a business that you care about and that you enjoy and when you're doing something that is interesting to you and fulfilling, then there's a huge amount of potential. It really is something that you can put your effort into to try to make as good as possible because you're doing something that you think is great in the world. And when you actually get to that point, you realize that you don't need to do anything that the way that they're actually conventionally done. It seems like, especially in the world of business, that there are all these business rules and all these business logistics and the way the business runs. And none of it is true. It's all just a facade. You really can run a business the way that you want to run it. And we get confused sometimes because we see a lot of people fail and we forget that people are failing equally as much for following the pre-prescribed methods of doing things as they are succeeding because of that. So we're gonna give you a little tour through some people who have really inspired us and the work that we've done at Float On. And then we're going to end with some more stories about us. So this guy. This guy is Ricardo Semler. He runs a company down in Brazil called Semco and has been running it for many, many years now and has basically taken the concept of his business, runs a giant manufacturing plant and kind of turned the entire thing on its head. He's a really big fan of democratic organizations and allowing people to, allowing the employees to make their own decisions and allowing kind of the entire organization to run as much from everyone who's involved as possible instead of kind of just authority coming down from the top. To the point where he allows his employees to set their own hours, they set their own wages, they determine pretty much everything that happens in the organization, which sounds crazy at first, but then he breaks it down and it actually makes perfect sense. He says that in order to know how much you wanna pay yourself or how much you're going to be happy at your job making, you need to know pretty much three things. You need to know what the company can afford and so he also does open book management which we'll get into a little bit later as well, where he shares all of the finances of the company with the employees. That's also something we practice at Float On. And he says that you need to know what the industry average is for your area, for that job so that they can compare against that. And the third one is you need to know what they're going to be happy making. And he says, well, the business can provide the first two. I can say what the business can pay. I can say what the industry would pay. And that third one, since the business can't determine it, we'll just leave it up to the person working. And so the end result is that they decide how much they pay themselves and all of that information goes public with their team, with their department, with their supervisor, and it balances out itself. And by taking away structure and by giving people more freedom, he created a simple system that works every bit as well. And I would say better than trying to control those things with, again, that top down kind of hierarchical structure. And only at one point did someone actually go in and start paying themselves $400,000. And the rest of the people on his group were like, I mean, you know, if you do that, like this entire project is gonna be shut down. Like that's our whole budget. And he was like, oh, and he went back and just changed the back and that was it. And like 30 years, that was the only little hiccup and it just fixed itself without anyone having to intervene. He lets people decide what their titles are. Down to his title is CEO. And he had about three other CEOs in the company who just decided they were called CEO. And at some point it was just really confusing and people didn't know how to contact and he thought about changing it so that they couldn't do that and to add a little more structure and then he said, well, if they reach this other guy and he's able to do his job and they're just talking to him like he's the CEO, does it really matter, you know? And so he just decided no, they can name themselves whatever they want to. And the philosophy there too is if you're making a phone call and you're trying to get through to someone, your job title is exactly what it needs to be in order to get the job done that you need done. If you work at front desk, you get to say that you're VP of marketing. If what you're talking to is an advertising agency and you just need to get a slightly better deal. So it's that idea of job titles as an empowering thing rather than as a confining operative. The entire business actually doesn't even have a mission statement, which is like where people usually tell you to start. They don't even define the work that they do anymore. Basically, if someone comes up with a project that they are excited enough about that they can wrangle other people on board, whether it's nothing that they've ever done before, if they can convince enough people to hop on board this project with them, SEMCO will just start moving in that direction and build a little branch for it and like, yeah, okay, we can manufacture tiny little pen holders, that sounds great. And so yeah, it allows it to be a very organic process and allows them to now be a hugely diverse business that does much more than when they first started out, just manufacturing crazy like ship equipment. Another one that we use at Float On Tomb is all of their meetings are non-mandatory and anyone can show up to almost all of their meetings as well, so they're open. And what that does is if someone proposes an idea and he wants to gather a meeting about it and they throw it, it's at six p.m. on Friday and no one shows up, it's a pretty good sign, he's not gonna get engagement on that project that he wants to run, he's gonna have to be twisting some arms to get the results. If 20 people show up from the employees, it's a really good sign that people are interested and you can actually push forward with something. And he's turning the idea of meetings into a feedback loop where he can actually understand what's likely to succeed, what people think is a good idea, simply by making them non-mandatory. And again, it's that idea of taking away controls and still creating a better system by removal, which in the float tank industry should sound very familiar to you guys. Another company that we really like is a company called 37 Signals, which is a software company. They wrote this book called Rework is kind of one of the ways that a lot of people know them. And they also do a lot of, this whole book is basically about not having to do anything the way that normal businesses are done. And they kind of live their own practices as well. They reduce their hours to 30 hours per week for all of their employees. And they found that they didn't decrease productivity at all doing that. They just got 30 hours of good work instead of 40 hours of mediocre work, which is great. The other things they do, they're just big proponents of staying small and not having to grow. So last time I checked, they write about a 12 or a 14 person team, really small considering the size of the software company that they run. And they also believe in staying small in the business sense in, they kind of branched off into a few different realms. They do project management and other software. And eventually they started selling off the other software because they wanted to simplify back down to only working on this one project management thing. And there's this idea, you're gonna be judged by what you do worst. So focusing in, make sure that you can put your attention on that and actually excel at it. They also, in that same sense, are not trying to sell their company. They really wanna grow it organically, make it profitable, make it sustainable, and they have no interest in pulling on outside investors or selling. They also bootstrapped their entire company from the ground up. And Jeff Bezos of Amazon actually came on as an investor, but not, they basically just bought a portion of the business and they took it all off the table and into their own pockets because they didn't need the money for the business at all, which is incredible too. And it was a very hands off agreement. Yeah, they're big proponents of having a business, a software business that works towards profitability rather than just selling it off down the road. Which is the typical software business model is that you start it and you go through a round of venture capital and eventually you exit it and that's kind of like the entire purpose with very little focus on the actual software managing too, make enough money to actually support itself. Which is really silly when you actually think about it for a moment. And they also, this is actually something we've adopted at Float On is when they actually need to reach a conclusion on something, instead of voting or anything like that they pretty much just argue about it until someone is obviously more passionate than everyone else. Yeah, it's just like, okay, okay, fine. Jake, yes, we'll organize our receipts by color. Like, okay. So this guy, Jack Stack, runs SRC Holdings which is a really interesting company and it's done a lot to promote employee ownership for the last several decades. And his division of the manufacturing company that he's going into, again, manufacturing, it's the unsexiest of businesses. And he specifically did engine, what is it? Remanufacturing, so taking engines and rebuilding them, old engines and then reselling those. Which again, a really cut and dry regimented type of business. Still manages to do some really amazing things in it and so his branch was about to go under and he decided, hey, what if instead of just losing our jobs, we, all of the employees come together and try to purchase it. And after three, six, nine months of going back and forth with the parent company of trying to raise the funds, he actually managed to purchase the business out from under his parent company. It became its own branch and then worked to create a really robust employee ownership system. And the whole idea of that purchasing was that combined, all of the factory workers could manage to get the money to buy that plant. And then they would own it and they would work it and they would set the rules and that's exactly what he did. He also is a big proponent of open book management. So any of the financials that go through the company are available to any of the employees. And in order to get people actually making intelligent decisions, saying that you want to empower your employees and saying you want to share things with them is one thing. But if they don't know what's going on in the company, if they don't understand what a fine line you're cutting or how little you're paying yourself or how much you're paying yourself to keep you honest, then you're not gonna get the kind of results that you want and it's these kind of simple things that come from this place of openness and generosity that end up making a big difference. It was also one of the first people to find a way to really allow kind of experimentation to happen in these very large factory settings by basically taking parts of his business and breaking them into tiny little chunks that could be self-managed and that could, if they were to explode, not just destroy all of the rest of the business around them and that you could even sell off these tiny little chunks at a time and basically allowing the agility of a small business to exist within the infrastructure of a much larger organization. He calls it his firework factory model which comes from the story of his travels and he was going to visit a firework factory to see how they manufactured things and he shows up there as Tura's guide is bringing him over this hill and he's like, okay, here's the factory and they crest the hill and there's just a set of about a hundred different little huts down below and he's like, where's the factory? This is like a tiny little village or something and he's like, this is the factory and it's apparently because when you're manufacturing fireworks, if some of those explode, you don't want it to blow up everything around it so instead you have these tiny little mini areas where one or two people are doing the fireworks inside each hut and if one of them blows up, hopefully the people are okay but at the very least you're not blowing up every single firework that you own and destroying a giant factory just that tiny little isolated hut is destroyed so that's the idea between branching off and creating these separate little businesses is kind of isolating them so that if one explodes it doesn't take everything else out with it. When we put on our first conference three years ago the weekend before our conference happened we found out that there was another conference happening here in Portland all about the sharing economy which sounded really exciting to us and despite the fact that we had a conference of our own to put on, we decided just to go for it and go to the conference and be there for the entire weekend which was really insane it was complete insanity but it was also a huge, huge learning experience which is great. Yep and so this girl, Janelle Orsey is one of the premier sharing economy lawyers in the country and she also wrote the book on the sharing economy literally it's like legal tools for the sharing economy Janelle Orsey and so it was a great workshop that we got to go to with her and she taught us everything about opening up non-profits about doing co-ops, about barters and how to do bartering legally and these are all things that are worth looking into because it's ways that you can really ethically run your business and ways that are designed to give a big benefit to the business owners for going that route. A lot of legislation even though we think of it in terms of playing big business games and bending the rules to make the extra margins on this investment that someone gave you there's also a lot of good people who are trying to pass laws out there there's a lot of good human beings and as a result if you start digging deep enough you start finding really neat and legal infrastructures that are in place to take advantage of again generosity as opposed to selfishness with a lot of the things that you're doing and you can do it I mean you can legally barter you can legally run these different types of business structures you can give ownership to your employees all of these exist as things that you can pursue and set your business up that way if you want to and exist as structures the same way that the totally normal managerial hierarchy that most businesses use exist so they're all out there and they're all ready to be used and just kind of waiting for people to hop on and use them and even the process of selling off your business when you're ready to exit can likewise go to a much different source than you might think so there are these things out there called ESOPS which is basically an employee stock sharing program and those were set up back in the 70s I want to say and I might be wrong about that and the goal was after World War II things started branching out for how you make your money late in life and before that people who owned a business and people who worked at that business had a very similar, from your perspective this way it's very similar trajectory in growth for earning money and saving money late in life and post World War II you start to see this divide where business owners are suddenly getting a disproportionate amount of the business to the employees who are working there and seeing this, they thought it would be really great and the government as well is having a hard time then supporting all of the employees and making sure that they have all of the money that they need so the national government doesn't want to step in and pay that discrepancy that's now happening in that divide and they decided to reward companies that will take that on themselves and so if you decide to sell your company to your own employees you start getting some crazy superpowers that happen with ESOPS which is really interesting so if you are a C corporation and you sell over 30% of your company to your employees you actually get that entire amount tax deductible as long as you reinvest it in another project and you can reinvest in your own projects too so if you want to reinvest in business if you want to do something else you can sell off not to an outside investor but to your employees so that they own the shop and get a huge tax break on that when you initially take out loans through the ESOP the not only the principal but the interest is tax deductible on there or the principal and the interest are both tax deductible if you're an S corporation and you're an ESOP let's say you're 100% ESOP owned S corporation you are now the only for-profit entity in the United States that does not pay taxes because it's a non-profit trust and an S corporation passes through and so the employees get non-taxed on that and so this is all kind of a bunch of legal mumbo jumbo but it's really interesting stuff and the bottom line with it is that there are great ways to play big business games for moral and ethical purposes instead of the reverse again you can play these games out of generosity instead of out of greed and even as a small business you can really just start to adopt these things and put these things into practice we use a lot of the stuff at our shop and like anything that we can't use we strive for and we work towards integrating in we run our entire store with a as little actual higher-up authority kind of saying anything down as we possibly can we do a ton of, we run an entire internship program where we allow people to come in and float with us in exchange for coming and doing this internship and learning about all the float tanks and getting to float through that process we do a ton of barter we've bartered for an unbelievable amount of stuff cane swords, massage tables this haircut a circular saw that we've used there's so much construction at this point like 20 hot dogs someone came in once with just a bag of two frozen Indian dinners and a bottle of like industrial-grade cleaning solution and I was like, okay, yeah, alright, yeah, I'll eat those and... we've gotten pies people bring us in cookies to our customers on a regular basis out of barter it's just absolutely absurd the amount of things that people will give you for time doing nothing someone just showed up at some point with this painting with like a dream catcher on it and like float on, paint it on the bottom and she came to our shop she had made a reservation and said so I heard you guys might like take artwork for floats and like I wasn't really sure but I just painted this thing and I'm from California I like flew with it in my lap this entire time and like, if it's not true you guys can just have it but like here it is and I'm like, oh yeah, absolutely like get in the float tank this is awesome and we have it in our living room now just like sitting there with our logo and like all this crazy stuff all over it it's great, I mean that's given me more joy than any like $50 I think someone could have handed me, you know? You have any more stories you want to tell about them? Oh, so many stories? Okay, well too bad, we need to move on anyway so a lot of convention is crafted to become an infrastructure of selfishness and what I mean by that is that the world is made from a sense of possession from this idea of mind and always trying to get more and building that up and we have this false sense that that is the way that we can protect things and that that is the best insurance is gathering enough that we will always be set and in fact what we found is that the more that you give away the more that you're generous the more that you pull in other people and that you share that's actually real insurance I have no doubt that if something disastrous happened and you know, a float on caught fire and our fire insurance didn't cover it for some reason that you guys for being in our industry have been so supportive of the things that we've done to try and share with you that I'm not worried about us going under if we hit a financial hardship I feel like we could figure out something and like someone would come to our aid just because of the goodwill that we've generated I'm Graham and I have this concept of fences which we've noticed all over the world a fence being basically an unnecessary obstruction in place and when you start looking around you start realizing that there's more and more fences everywhere you look like you're just trying to scroll down the street and like there's a fence and like all you're trying to do is get to the bus stop on the other side but you can't do it and you start noticing that a lot of these fences probably don't need to exist and a lot of them are there because they've just been grandfathered in from all these sets of, you know one person did something 20 years ago and then they made a rule about it and then everyone forgot why they made that rule and now like there's just this whole system and rules and policy in place to stop all these people from doing something that probably no one will ever even do again and those start stacking on top of each other and you build more and more fences and eventually you realize that you've just completely caged yourself in with fences all around you and it's called bureaucracy is what happens at the end of that there's a really good quote or more like a micro story from Kurt Vonnegut and he's talking about his friend Joseph Heller who wrote Catch-22 and he's talking to him at a party and he says, and they're at this party of a really rich investor and he says, Joe, how does it make you feel to know that our host only yesterday may have made more money than your novel Catch-22 has earned in its entire history? And Joseph Heller says, I feel okay about it because I have something that he can never have and Kurt Vonnegut says, what on earth could that be? And Joseph Heller says, enough. The entire concept of money in general in a business I think has become really skewed over time. It's, you know, money is, it works. It's a really good way to achieve something. You can use money to make things happen in the world but at some point some disconnect happened and money no longer became the means to do things but also the end, which is absurd. Like they are just little green pieces of paper and are meaningless stacked up by themselves. There really are just a means of doing things and so when your entire goal just becomes to get the means of doing things like it doesn't make sense anymore. The entire system and the entire logic of it breaks down and it's a really easy trap to fall into and it's a really easy trap especially in business because again those conventions really push you to think about it in that framework. It really pushes you to think about how much money you're making and your profitability and looking at those numbers and basing everything off those numbers and you get lost in it and you forget that all of this has to become placed on top of the real world again and all of it has to still make sense for you in your life and be something that's actually valuable to you and I mean if there's anything where you're trying to push out into the world it's that very concept that money is not the only thing that's valuable and it can be used to create valuable things but simply working hard to basically get the accumulation of it is a fool's game. Money is a placeholder and when a lot of people tell me that their business is profitable or how much it's making the first thing I wanna know is what they're spending that money on and once they tell me I always wonder if they could have done that without spending money on it and achieved the same goal they're trying to go for. I'm along those same lines basically just the idea of continuous, continuous growth. The fact that you constantly need to get bigger and larger and take on more things and open your 100th center and are you striving to become that giant, giant, giant company is not something that needs to happen. It is again very much what business seems like it's supposed to be doing but you can be content running your business the way that you want. You can be content keeping to your single float think center and making it better and better and just living inside of that world. Growth itself does not have to be an actual end. Again, that is just like money a means to doing something. And it's interesting, you know even within that trying to do the right thing and using formal systems you see big businesses and different companies adopt the letter of the law and not the spirit of it. We just talked about ESOPs for example just by implementing an ESOP in your company the stats and surveys show that companies who are employee owned at least partially tend to do about 2.3, 2.4% better in terms of growth year after year. If you layer on top of that a culture of ownership where you're not just giving your employees stock in the company but really empowering them to make decisions, a more democratic organization more open book you see that 2.3, 2.4% jump to 8 to 11% that companies grow faster if they're using both ownership culture and sharing ownership. And another good one that we had a roommate who worked at US Bank for quite a while which is one of those just giant banking big business type of corporations and these stories that he would tell us about him getting stuck in their bureaucracy were just preposterous. We're sitting here talking about the best way to share ownership with our employees and just like brainstorming and having meetings on our back porch and our roommate looks over at us and he's like, yeah, I have to put people on hold mandatorily for 60 seconds so that I can meet my call deadline because I close people's problems too fast and you're supposed to keep them on the phone for three to four minutes and the only way you could do that perpetually was to just finish their problem not give them the solution and say like, hold on for a second and he'd sit there and they'd sit there and he wasn't allowed to surf the web so he couldn't actually do anything so he just wasted two man minutes of time every single call just so he could meet their rules and regulations for how long that call should be. Which some people in suits and ties up in some room decided was the best idea. Right, because they want to answer it on everyone. It comes from this place of wanting to provide good customer support, right? And they're like, hey, people complain about our customer support being too pushy trying to close this thing too fast because previously they were just measuring number of calls they get through and I'm sure they started getting complaints and they're like, okay, okay, we need to keep these guys on the phone for a set amount of time so we stopped getting these complaints from people because we're wasting their time or we're being too pushy and instead it ends up in that two people sitting staring at their own monitors neither of them doing anything for a minute in order to meet that regulation. And you can see a lot of these stories in much larger contexts as well. I mean, you can just look at the world around you and everything that's going on and the different people that are marginalized out there and basically have become the victims of the systems and infrastructures that we have set up in our world that kind of get led astray by all of these different goals that I don't think were that well thought through or just got caught up in kind of these systems of growth and these systems of trying to accumulate certain things without actually thinking about the end purpose of all of them. Yeah, I mean, you don't need to look very far to see huge disparities in wealth in civil treatment of people. And I think because those are such big problems and they're so overwhelming and we are faced with them on a regular basis we forget that it scales back from there too and even well before you're committing gross human rights crimes you're building a lot of fences. And so just being aware that it doesn't have to be something that a lot of people are rallying around and saying, no, you're doing the wrong thing. In fact, lots of times when people tell you that you're doing the right thing you should be more nervous. And I think in a hundred years or a thousand years a lot of people are gonna look back on the ways that we've run businesses today and realize that they were completely ridiculous and that they were inhumane in a lot of ways the same way that we look back on systems of feudalism and systems of slavery and serfdom and all these other systems that in our modern context are like, oh yeah, how could we possibly have treated people like that? People are gonna look back on here and be like, oh yeah, how could we possibly have just forced people to work these menial things and given no one any rights or responsibility. Never share with them how the company that they're working in is doing everything is hidden and behind this veil. Yeah, I think it's gonna seem really silly to us basically as the world keeps progressing and getting forward and moving towards, I think a lot of what we're talking about which is definitely what I'm seeing in the path of different businesses. So rewind a year and before last year's conference we also went out to another conference the weekend beforehand and this time we flew out to Florida for the crowdfund investing conference which is also where those lovely pictures of us half naked that Kirk put up on the screen come from. That's right. Which was also crazy and completely insane and we have lots and lots of stuff to do. And just to give you guys a little overview of crowdfund investing, it's another one of these concepts where basically the very traditional ways of getting money in the world of pulling on investment from some investor who's accredited and being accredited just means you have a lot of money. Like that's it. You don't even have to like go get a certification. It's just like, oh, you got a lot of money? Yeah, you're accredited. You're good. Don't worry about it. And that was the system. Like that was how you could go pull on investment was from these people who had a bunch of money or you could go try to get some sort of bank loan but those are getting harder and harder. And so eventually what happened is a law got passed to allow something called crowdfund investing which is kind of the concept of Kickstarter where you're pulling money in from the crowd except even a level more than that. Like you actually give out ownership in your company to people who are helping fund your company which means that like if you want to open a coffee shop on the corner, you can go to the community around you and be like, would you guys want a coffee shop on the corner? And everyone's like, yeah, it sounds awesome. I would definitely go to that coffee shop. Like I'll give you some money for that and you get the money to start the coffee shop. Everyone in your community is an owner of that coffee shop. When they come, they get to feel like they're part of the process. It kind of feels like it's their place. It basically is a completely community developed little business and you don't have to go through any of the normal means of financing to be able to get to that. So FESOPs are a way to share your business when you sell it off. Crowdfund investing is a way to share your business when you're just forming. And a lot of these things that are unconventional are a lot of work. They're actually way more difficult right now than just going the totally normal routes of pulling on some sort of bank loan or hiring a manager and just having each of your employees kind of do specific tasks that they're given. And the reason that they're harder is because they haven't been as many paths that people have made that lead to these things. A lot of people have gone down the more conventional routes and so there's a lot more information about how to do it and a lot more knowledge in people's heads about how to do it. And when you actually come to these other attempts of running a business in a way that is more interesting and maybe more fulfilling for you, you end up having to work a little bit harder because you're blazing that path for people. You're the person going out there and kind of showing the world that it can work and hitting the pitfalls that are being figured out that you can pass on to other people to kind of strengthen it and clean that path off. And a good lesson there too, just in path building, because doing things unconventionally is so hard, I think it's important as soon as you figure out that something works, as soon as something is a little bit better and you found a system that is a little bit nicer for you, go out and share that immediately. Let other people know what's going on. Blaze a path for the people who are coming after you so that it's not just effort that went into you doing better but everyone else in the world who's looking for another way to do things that isn't just the norm. You can find that path that you've blazed there and actually walk down in. And you're gonna fail a lot. You're gonna hit a lot of problems and you're gonna make a lot of mistakes and it's gonna be really difficult but you learn from those things. And the fact that it feels like you're doing something experimental and testing things out isn't actually even that much different than doing the totally normal conventional thing that you would be doing. You're still testing out that conventional model in your own context and in your own world and you're probably still hit plenty of problems with that and just as much difficulties. And so it's not like you're actually really even going the safer route when you're going through all the normal conventional things that people do. It just feels like it is because you look around and that's what everyone seems to be telling you to do. Yep, it's this false sense of safety. We think of our safety zone as being right here and especially over the last couple of decades with how easy it is to produce things, how quick we were able to launch a book publishing company. I mean, 50 years ago that never would have happened. Things are getting easier and easier to do not only in different ways but in better ways and in quicker ways. And yeah, the new safe is I think over here and we need to adjust our mental framework to kind of switch out of our mammalian normal like fear instincts start kicking in when we hit the unknown. So when Jack Stack who we were talking about with the ESOPs actually first got this idea of having his company owned by employees and even trying to buy the company that he was trying to, that was part of a larger company so that he could own it and share it with his employees. He went to do it, he was like, this is great, let's go for it. And he went off and just found out that it was way harder than he thought. It took about two years longer than he thought he was actually gonna be able to get ownership into his employees' hands than when he actually managed to do it because he started finding out all the actual legal difficulties and all the hoops that he had to jump through and the actual structure that he needed to build to be able to support something like that. It's just insanity. Deciding that you're gonna do the right thing and even knowing the mechanism of what that thing is does not mean that it's going to be easy. As you go again, you're going to be blazing some pretty serious trails. And sometimes that just means there's a giant tree in the middle of the path whereas before you kind of have a nicely groomed manicured lawn that you'd kind of be strolling in. When Ricardo Semler from SEMCO went to start changing his business and adopting all those democratic business structures, he had to first go and fire 60% of the entire top management of his business. And that's difficult. That's not an easy thing to do. You can't just go and upturn everything like that and expect everything to just run smoothly from that point. But he did it and that's what actually allowed him to start putting those new processes in place. And eventually at the beginning, he just ended up in the hospital from having so much stress in his life, from having to deal with all this stuff. Yeah, he was one who was definitely working those 18 hour days. And yeah, eventually it was too much. His heart, his cholesterol got out of control. He was hospitalized basically for overworking himself. And from then on he was like, okay, I need to actually do what I preach and turn over control to the employees. And he kind of took on a single vote for himself and gave all of his employees votes and everything. And that was it. He just backed as far off of management as he could and just gave all of the responsibility to his employees out of a sense of personal necessity simply because the business, even though he tried to do that at the beginning, was still just destroying him. And for us as well, it's been, we've hit so many difficulties trying to actually implement this stuff. I mean, just the idea of bootstrapping instead of getting investment money from somewhere is crazy. It's way harder. Like we were literally just like barely shuffling money around at certain points to be able to keep our business open. Yeah, the reason that we started float tank solutions, in fact, was that we were running low enough on money that we had our new tanks that we installed just started going horribly wrong immediately. We were like, okay, we're gonna build our own custom tanks, it's gonna be great. We'll save money on the process, which is not true at all. And also we got them in there and they just started breaking. And still, right now, we're not running floats in our new open float pools because we've had some heater malfunctions and other problems popping up. And yeah, so again, you decide to carry through and do these simple things like building a float tank. And it just proves harder and harder and harder. And so at some point, our bank account was just near that point of empty. We had like $500 in it from all of these unexpected expenses. And I just said, you know, I'm gonna go back to sharing and generosity. And I bet that if I just, we'd written up a business plan at some point just for our own internal use. I'm like, you know, I bet if I just call people that went to that first conference and see if anyone needs a business plan right now, that I can find some early customers and maybe make up that money we need in our bank account. And we did, we found 10 people who were willing to be our early test clients for what's now our float tank solutions business plan. And so kind of out of necessity of dealing with this bootstrapping chaos, we ended up with a company that now is profitable itself and hopefully has actually helped a lot of you guys who are sitting in the audience now. As we went to try to open up our finances to all of our employees, we realized pretty quickly that you can't just throw up your financial statements on a wall and be like, here you go. Like you actually have to go and make it digestible. Like nobody knows what that information is. It doesn't make any sense. And so it's useless. Putting it up there just as it is is not actually helpful to anyone. And so it's more work. You have to go through and you have to teach people how to look at it. You need to go and format it in a way that makes sense to people. You need to get everyone on the same page and train people so that what you're doing actually will be effective. And so even though we wanted to implement open books now, since we opened our doors, we still haven't actually, employees can ask us questions and we can look up data and kind of tell them what's going on, which we do willingly. But having those digestible financial statements that people can read, we still haven't managed to get that up and running despite our best intentions. It's just so much work unexpectedly. Our internship program started off as a volunteer program when we were first up and running. We were like, yeah, come volunteer some time and you get a float. And about a month in we realized that that was in completely illegal. And very, very quickly we're like, okay. And so we started scrambling and looked into it and came up with the structure of our internship, which is way more difficult to run. Like it is a huge focus on education. We actually have interns come in for set periods of time. We have like an infrastructure that they come through our shop and learn things more. It's way, way more than when people volunteers are first coming in. I was like, yeah, just go clean that off. Like that'll be great. But it's worth it. On top of actually being able to do things within the law, which is cool, it became a much more fulfilling program. Like all those interns actually come out with a huge knowledge about float tanks now, which is really excellent. So it managed to benefit itself too. Yep, and again, going down those overgrown paths sometimes leads you to some really magical places, even if the journey there is a little bit, a little bit tumultuous. We don't have a manager for our shop, which is really difficult. Like we try to just get everyone to kind of run things by themselves and make their own decisions. And we first thought by just removing all structure and all policies from our business, that everything that people would just be super happy and everything would take care of itself. And it turns out that that is not the case at all. Like people don't actually enjoy that the way that we do, just living in complete chaos. And what ended up happening was that we would get calls at three in the morning when things were wrong and no one had any idea how to fix them or who to look for for answers. And so it's led us to do research and figure out different types of intelligent systems we can set up to actually not just jump back into that hierarchical structure, but figure out a way to have everyone have equal say and have everyone be able to make decisions, but have everyone still understand like where they fit into the piece of the puzzle and how to actually make the business function. If you're ever wondering what the word is for a non-hierarchical structure that's even across the board by the way, it's a heterarchy. This kind of difficulty too for doing the right things, doing things the way that you really want to extends down to the simplest elements of running a float tank center. It really is an insane industry that we're in to the point where we started testing thermometers that we had in our space against each other and we realized there was this huge variance and we start digging down a little bit deeper and we go to the actual websites, the manufacturers of the thermometers, we get their spec sheets and we find out that anything that you're paying less than $100 for a thermometer that you're checking the temperature of your water in your tank has about a 0.8 degree Fahrenheit range of error which usually isn't a problem, but in a float tank of course is a huge difference. Plus or minus 0.8 is like over a degree that it can shift in either direction and so we ended up having to splurge and get a $200 thermometer that has something like 0.1 degree margin of error I think a little less than 0.1. So even just something as simple as we want to get accurate readings in our float tanks of how hot and cold they are proved to be way more work than we thought it was going to be. Yeah, the tanks themselves are very unconventional which leads you down paths like this. We've had to send samples of our water off to so many different labs to get it tested with their testing equipment just to try to get answers to some of the questions that we have because we are just hitting areas that no one has ever gone to before. So the last topic that we have here is coming from a place of generosity yields greater rewards in the end. And there's this idea that when someone gains something it means that someone else loses something and it's called a zero sum game basically is kind of what it's described as in game theory which is I think part of what money kind of convinces you that someone's making money means someone else is losing money and that the world functions like that. There is a limited resource of like awesomeness out there and it just means that it's like this constant scale being tipped in one direction and I think it's false. Like I really don't think that that is how the world actually works. I think that there are a lot of situations out there that are not zero sum games that are win-win situations that everyone like both sides of the party become more awesome at the end of the day. So there's this concept of a tit for tat in game theory and it's a much better way to look at the world I think and there's a really famous researcher named Anatole Rappapour who did a lot of game theory research and they believed that life is not a zero sum game essentially and so the research there was on prisoner's dilemma if you guys are familiar with that. Essentially it kind of comes from interrogation type scenarios so you separate two prisoners and they can either betray the other person or collaborate with them, you know, say like no, no, their story holds up or like yeah, they did it and so if both people betray each other then neither of them gets anything. If one person betrays the other and that person doesn't betray the first one, the person who did the betraying gets 10 points and the other one gets none and if they both cooperate then they both, they each get five points is the way that the system works and the in gaming competition so they'll gather together programmers and put scenarios like this versions of the prisoner's dilemma up and try to write the best program for just combining them and seeing what will come out on top and it turns out that during the first one they did tit for tat was the model that came out on top which is basically two lines of code competing against some that were just tens of thousands of lines and it just said if the person, so pretty much give people the benefit of the doubt is where it starts. Trust people to begin with and so you always trust them in the beginning and then if they cooperate with you then you just keep cooperating. If they ever betray you so if they're ever on the other side of that then you stop trusting them until they give you something and then you start cooperating again in return so it means that at any given point you can only be down kind of one interaction worth of someone screwing with you before they have to make it up to you and then you kind of call things even again but the important thing there is that it starts from a place of trust you don't go into that situation saying well I'm just gonna try to screw you over at first and then if you do something nice for me next time I'll be nice to you that would be the like tat for tit or something like that but not the right way to do it. And then there was a second one that got run after that. Yeah and that one actually ended up being people really learned from the first one and developed their programs accordingly from having seen the results and the new program that won that was actually even more generous than the first round. It actually gave one step of allowing someone to kind of like screw you over and you would still be nice to them so like you were nice to them they were nice to you they would hurt you you were still nice to them and then if they were nice again you're like all right it's cool don't worry about it and that just led to a lot less destruction a lot of those programs like running more successfully and both sides of the party ending up winning out at the end which is called tit for tit for tat. So a week ago before this conference Graham and I flew out to Washington DC for a conference on the International Society for System Science which is a conference for systems theory and cybernetics which is something that we've been looking into a lot recently which is basically the answer to a lot of these questions of how do you set something up in the way that you want it to if you're not trying to do the managerial structure if you're not trying to just set things up the totally normal conventional way well you need to study systems you need to figure out how interactions work and figure out how to build a system that will function the way that you want it to function and very importantly to build a system that can grow itself that not only is in place and successful but that can adapt as part of its own system without you having to interfere with it that built into your business your float tank center is the ability for that center and for your employees to learn that your organization has an identity in that it can get better if you set it up right instead of just being in place and exactly how you set it and you know it's not going to change you want it to change so moving on from there I just wanted to circle back around these guys we started with and see how things ended up for them so Semco was worth four million dollars when Ricardo Semler took it over in 1982 from his father in 1994 it was worth 35 million dollars and in 2003 it had an annual revenue of two hundred and twelve million dollars Jack Stack SRC Holdings expanded it from buying this company and being eight million dollars in debt at one point he describes this company as being the equivalent of basically like a functional baseline on your brain like it was all but completely dead it was the brain debt company it's a debt to equity ratio it was just off the charts and they came back from that and ended up launching not only one but I think they have over oh gosh I'm going to get this wrong I like definitely over fifty and maybe even over a hundred separate subdivisions and sub-companies of their giant manufacturing firm that does everything from repurposing parts to service industry stuff it's all over the board 37 Signals is actually one of the most popular online web services their base camp is their project management software and they have over 285,000 companies using their software despite the fact that they are run by a team of about 12 people and for us I mean these we've been using these things and they've been going well I mean we're not out of business we're here I mean we have all of you sitting here at this conference it turns out that just being open and sharing with everyone and being generous with our information and sharing with our employees and really trying to run our business the way that we want to run it and the way that we think it should be run and the way that we think we'll make the world just a little bit of a better place to be not only makes us feel so much better about our lives but it makes this entire thing way more successful and I think it would have been if we had just started right off and tried to run a totally normal and conventional business revolving around trying to take people and put them into these float tanks that breaks them out and have all of their own conventions so it is your duty to run a business that you care about and you don't need to do things the way that they're conventionally done and a lot of the convention that is in this world and certainly in the world of business is crafted from an infrastructure of selfishness and doing things unconventionally is harder because there aren't as many paths for you to follow but coming from a place of generosity yields greater rewards in the end thank you