--:-- Host: Hello everyone and welcome back to the show. Today, we have a tremendous episode for you, a conversation with James Webb, the author of *Redneck Resilience*, a tremendous book.
--:-- Host: James has a storied career from being in the radiological industry to running hospitals to owning one of the largest Orange Theory franchises in the entire country. And what I loved about James' story is his resilience, is where he came from to where he got to, and all the trials and tribulations in between that he explains to us.
--:-- Host: Because as we know, working through this pain, experiencing this pain and being able to not only push through it, to not give into it, but to thrive in moments that are challenging, in moments that we don't see coming. It's a story that I feel like we all need to hear. I was inspired by the story. It was tremendous to meet and talk to James and I think you're absolutely going to love this episode.
--:-- Host: Before we get there, I want to talk real quickly about Finding Peak. Guys, more than 10,000 of you listen to this podcast every month, and we have just about 2,000 people subscribed to Finding Peak. If you love this podcast, if this podcast is something that adds value to your life, you are going to love the website, the blog, and there are a lot of changes coming. There are a lot of things happening. Subscribe to Finding Peak. Go to F-I-N-D-I-N-G-P-E-A-K.com. 10x ideas for people who want to become more. That's the tagline. You're going to love it. You're going to love what I'm doing there. And I hope that you'll join us. So go over to Finding Peak. Subscribe today.
--:-- Host: And for all my insurance friends who listen to this podcast, which is most of you, but more and more people are listening to this podcast who are not in the insurance industry. So I feel like I need to say that. If you are in the insurance industry and you want to maximize the income that you are getting from your agency, check out SIA. I know that to different people, networks, aggregators, however you classify an organization like SIA may scare you or you may have a negative perception or you may just not know what SIA is altogether.
--:-- Host: But SIA is a tremendous organization. Matt Masiello and the entire team and what they're doing is changing the game on what it means to be part of a network, the value you get from a network, and it is a pleasure to be associated and to be part of the executive leadership team of that organization. So I ask that you check them out only because I have said such a positive experience. Honestly, I don't care if you go to SIA or not. It's independent insurance industry and the beauty of our industry is you get to choose your own adventure. All I want to do is put in front of you the idea that I have had a tremendous experience and you may too.
--:-- Host: And so you know, they do not pay me or even ask me to do this and frankly, they have no way of making me say this. I say this because I've had a positive experience. I enjoy being part of the organization. I enjoy the benefits, the thoughts, the ideas that they're trying to put out, the resources, and ultimately the carrier contracts that they're able to deliver to members. And if that's something you want, I encourage you to check it out.
--:-- Host: So with that, guys, thank you for listening to this show as always. I absolutely love you. Let's get on to James Webb.
--:-- [Transition to interview]
--:-- Ryan Hanley: I'm going to shop booze. I was very intrigued when your team reached out because particularly about some of the ideas around granting high performers equity and how you do some of that stuff. Because in the industry that this podcast is primarily focused on, the independent insurance industry, we have anywhere between 10,000 and 15,000 people listen to the show and all throughout the independent channels.
--:-- Ryan Hanley: You're thinking people in the carriers like Travelers, Hartford, Liberty, all those, all the way down to brand new single-person independent insurance agencies on the corner of everywhere America. And a conversation that happens quite often and has been going on since I got in the industry 17 years ago has been compensating high performers. It is a major topic. A lot of really difficult conversations because there's an old school methodology: "Hey, you get a commission check from me. That's my value to you. And that's what you get. And you should be happy with that. And you have renewal commissions. And those are essentially equity."
--:-- Ryan Hanley: But what's happened recently, and I want you to get into your story and stuff, is that there is not a consistent, agreed-upon solution in our industry for how to compensate, how to handle, how to give longevity and a sense of ownership, if not real ownership, to high performers who don't have the same last name as the owner of the agency. So that's why I was so excited. But before we get there, let's get into your story, man. I'm excited to chat with you.
--:-- James Webb: I'll share one fact with you about your previous comment that's one of the highlights and one of the things I'm most proud of. I had 14 key employees in my life work for me. 13 rode it out to the end. The one that didn't rode it out long enough that she got her buyout, so I bought her out. Of the 13, seven became millionaires and four of those became multi-millionaires. And these are people that just took a paycheck with me when they started when they were young, most of them out of college and stuck with me the longest, close to 20 years.
--:-- Ryan Hanley: That's amazing.
--:-- James Webb: It's a good little strategy I have. We can tell the James Webb story. It's kind of cute and kind of fun and kind of interesting.
--:-- Ryan Hanley: Let's do it.
--:-- James Webb: James Webb, country boy from South Mississippi, born to two teenage parents. They were 17 years old and got a little too friendly in the front seat of a Ford — or as my 80-year-old mother reminded me, it was the backseat, which I thought was funny. Grew up fairly poor. Dad was an electrical apprentice straight out of high school. We lived in a little shack behind the electrical shop that the owner let us rent.
--:-- James Webb: I recognized real early in life that if I wanted anything extra besides peanut butter and jelly, I had to do it myself. So I started working at five, building potholders and selling them at the local church bazaars. That led to bicycles, which led to paper routes, which led to lawn mowers and rakes. When I was 14, I bought my first car. And yes, in Mississippi, you could pull that off and not get in too much trouble.
--:-- James Webb: Then I got involved in the printing industry and worked full-time through high school. By the time I was a senior, I was a senior pressman for the company. I thought that might be what I would do. Then I enrolled in the local junior college on a music scholarship of all things, because at some point I could sing before other things corrupted my voice.
--:-- James Webb: Walking through the school one day, I saw a sign that said, "Want to be an x-ray tech? Call this number." And I thought, "What? I could become an x-ray tech?" So I did a two-year slave labor program as an x-ray tech. One of the local colleges gave you credits for x-ray tech hours, so I actually went back to college at night or in the daytime, worked at night, and got my bachelor's degree.
--:-- James Webb: The day after I got my bachelor's degree, they named me president of the x-ray tech school I graduated from 18 months earlier. So I'm 21 years old, got 15 students, six are my age, three I went to high school with. Quite a management learning lesson. Did that for a few years, really enjoyed teaching, but wanted more. So I flipped a coin — literally flipped a coin — and said Dallas or Atlanta. I packed up a pickup truck and a bass boat and went to the Redbird Mall parking lot in Dallas, Texas. Slept in the parking lot trying to figure out what the hell I'd just done.
--:-- James Webb: Got involved in the hospital up in Lewisville, Texas. Three months after I was there, they promoted me to director of radiology. I was the youngest director of radiology in the United States at 24 years of age, had about 50 employees. Went to night school, way before the internet, got my master's degree, thought I was going to be a hospital administrator. Then this thing called MRI came out and changed my life.
--:-- James Webb: I left the clinical side of medicine and went into the MRI business. I was one of the first people in that industry. Learned a very valuable lesson. Worked my butt off, built the second largest mobile company. Sitting in my big office in Dallas, Texas at 30 years of age, 300 employees, thinking I'm hot stuff. The phone rings and they go, "Mr. Webb, we just sold the company. Therefore, since you have no equity, you are fired."
--:-- James Webb: I learned a really valuable lesson about being my own boss and starting my entrepreneur journey. It took a little while to get there, but eventually in 1995, I started my first company internationally. Went to Trinidad and Tobago, started and traveled all over Latin America and the Caribbean. Got crazy stories we can talk about or not talk about. Probably the only guy you know that's been held at gunpoint by the Sandinistas. Probably the only guy you know that was kidnapped by the Guatemala rebels and released. Just a lot of fun stories.
--:-- James Webb: Sold that company in 2000. I was living in Boca Raton, Florida. Moved back to Dallas, Texas to start another company with some buddies of mine. In 2003, I was dead broke, couldn't pay my house note. Started all over and made a couple of business decisions people said wouldn't work. And they did. The next month, there was $9,000 there to distribute to my partners. The next month, there was $10,000 to distribute to the partners.
--:-- James Webb: As we kept growing, we got to a point around 2010 that if I wasn't personally pulling in $600,000 to $800,000 a month in distributions, I'd kind of want to know why. We branched out into other areas outside of radiology. We were building medical imaging centers, then we went into surgery centers, then we went into toxicology labs. Exited the medical imaging company in 2017 — public knowledge for right at $100 million, so a nice payday. Exited all the surgery centers one at a time because we sold them to healthcare systems in the various markets. Exited toxicology.
--:-- James Webb: About that time, I got involved in Orange Theory Fitness, which I had no idea what that was and just accidentally stumbled upon it in 2014. We ended up building 33 gyms across North Texas, became their largest franchisee. We sold that in December of 2019, about two months before COVID hit, for almost as much as the imaging center company. So it was a nice couple of paydays.
--:-- James Webb: I still have four or five companies now I work with, and it's a little different now. You're not worried about whether Ryan punches a clock. You're more worried about the bigger picture stuff. So that's sort of my business story. And I can't stop being an entrepreneur. Really love it. Really love it. Love my employees in the business. And I have a crazier personal story, but that's a different conversation.
--:-- Ryan Hanley: I'm interested in the — so obviously when you were a kid, you had a very entrepreneurial spirit. You described all the different jobs you had, selling at the church bazaar. And then you go and you become an x-ray tech, which is not an entrepreneurial endeavor. And then you have this period of time, sounds like close to a decade, between when you become an x-ray tech to where you're sitting at 30, company gets sold, and you're fired.
--:-- Ryan Hanley: Talk to me a little bit about that time. Were you constantly chomping at the bit? Were you trying to be an entrepreneur? Were you finding other things that were entrepreneurial oriented outside of your nine-to-five while you were in the punch-the-clock phase? I hear that a lot from people who seemingly have entrepreneurial traits. They all seem to go through this "bureaucratic winter," where there's a period of time in their lives where they aren't an entrepreneur.
--:-- Ryan Hanley: What you see is, I think the people who truly are entrepreneurs, they tend to find cracks — they find little ways of getting involved. Were you finding that in your life? Were you kind of always aware of that underlying sense that you wanted to get back and do your own thing? Or were you content for that period of time while you were not an entrepreneur?
--:-- James Webb: I don't know if "content" is the word, but I definitely didn't have that entrepreneurial thought process. I'm working eight to five, punching the clock. And again, this is pre-internet. So I'm going to night school at North Texas to get my master's degree because I thought I was going to be a hospital administrator. I was trying to go up the corporate chain.
--:-- James Webb: I thought I was going to be a hospital administrator. It wasn't until Barry O'Brien knocked on my door and said, "Hey, we're starting this mobile MRI company. You want to join us?" And I went, "Heck no, man. I'm going to be a hospital administrator and make $150,000 a year." He convinced me — in a funny little side story, doing 130 miles an hour in his Datsun 240ZX in Connecticut — to leave the hospital space and jump out here and work for him. So I got tuned to the business side of it. I worked with hospitals, we were building mobile routes — get 10 hospitals together, run a mobile between them. Got to learn a lot about the sales side. But no, I really didn't have that entrepreneurial spirit. It was just climbing the corporate ladder.
--:-- Ryan Hanley: And then you get fired. Was your next thought, "Time to start my own business"? Did you go through a period where you were feeling down? What did that look like?
--:-- Ryan Hanley: I founded Rogue Risk, a national independent commercial insurance agency which I'm the CEO of today. I founded it on March 9th of 2020, seven days before the zombie apocalypse in upstate New York. In two years, I was able to build it to the point where I was acquired in full. I traded equity in my company for equity in the parent company owned by a PE company and became an executive director in that company as well.
--:-- Ryan Hanley: But to get to that entrepreneurial point, I was fired from the previous three executive positions I had. I was a CMO, a CMO, and then a CEO of three consecutive companies and was fired from all three positions. I kept going back to that corporate job. I kept thinking, "This is $200,000 a year with a bonus. That's not bad. Let me try this again." And I would just keep butting heads. It wasn't until I went off and became my own boss that I realized this is much more who I am.
--:-- Ryan Hanley: So I'm interested in how that worked for you. There were obviously dips in between. The first time I was fired, it was like, "Oh my God, I'm a loser. I'm never going to have another good job again." Then I got another job and got fired again. You're like, "I'm sure I can find a job." The last time I was fired, I was like, "Fuck it. I'm just going to start my own company." It didn't even really phase me as much. It's interesting how that works.
--:-- James Webb: Mine was a little bit different. Mine had a little personal impact on it. I had a young daughter, had been separated from my wife. We literally got back together the day before I got fired. So it was really hectic. I had bills to pay and I had to have a paycheck. Since I was a little bit known in the industry, I was fired one day, had a job the next day. But in Atlanta, so I had to move to Atlanta. The city is wonderful, but the lifestyle I had there was not very good.
--:-- James Webb: Those were the tough years — 1991, 1992. I got a chance to move to Florida to take over this company. I said in my book — I'll tell you anyway — that's the only time I ever told a boss to F-off. He tried to keep me hired because he said, "I'll fire your boss if you'll stay." I said, "No, I'm going to go down to Florida and fix this company." I went through a divorce, had to worry about my daughter, had to have a job, had to have a paycheck. Moving to Florida, sleeping in hotels, sleeping in rental places. Finally got my first apartment about six months later. It was a very tumultuous time for me, but it was about a paycheck at that point. I really had to worry about the paycheck.
--:-- Ryan Hanley: Do you think — and in fairness to my own story as well, very similar. I also had two young boys at the time as I was bouncing through. It wasn't until that third time that I was fired that I felt like I was fighting the universe. It wasn't even that I really wanted to go back to zero. I was just sick of it not working.
--:-- Ryan Hanley: Do you believe that those hardships are necessary? Those moments where you're on a couch or in a motel — I was recently divorced from my wife, living in a hotel for three months, miserable, feeling like I'm not a good father, all these emotions. Do you feel like those times are necessary to navigate to success in business?
--:-- Ryan Hanley: I think there's a lot of people in the insurance industry, especially second-generation leaders who were born into families that had successful agencies. They lived with success — father, uncle, aunt, mother — and were brought up in success, went to college, and walked right into a successful business that is at least steady, if not growing. A lot of these people come to me and ask questions, and I can tell they never really got punched in the mouth before. They never had that moment where they had to pick themselves up off the ground. They're struggling with direction.
--:-- Ryan Hanley: Do you think you have to feel that? Do you need to have those types of experiences? The story is so similar — everyone's is different but the same. They had these moments that were just terrible, and they had no idea how to get through, and they did. Do you think that's a mandatory part of reaching the elite levels of success that you have?
--:-- James Webb: I don't know if it's a mandatory part, but I will tell you this: I look back on it and I'm glad. I'm glad I had those lessons. I'm glad I had that chance. Yes, I would have loved to be more second and third generation. That might have been cool. I don't know what kind of person I would have turned out to be. I've met so many nice people that are second, third generational wealth. And I've also met some real pecker heads that are third generation.
--:-- James Webb: What I have found is that most of the guys that go through what you and I went through tend to be the nicer people on the planet, tend to give back more. And that's a big thing for me — giving back more. Did I like the hard lessons? Heck no. Am I kind of glad now that I'm 63 years old, looking back on it? I'm sitting on the couch in Rockwall, Georgia, crying on the couch because I'm getting a divorce and I'm worried about my daughter. I think about that. It helped shape me and helped make me. More than anything, it gave me that resilience and that determination to just drive forward harder. It's a mixed answer, but I'm glad I had them.
--:-- Ryan Hanley: Why do you think it is that some people have these hard moments, and maybe not perfectly, but they bear down, push through them, get better, continue to find their ambition, continue to maintain a discipline that keeps them moving forward in a positive direction — while others just wallow? They sit in it. It becomes quicksand. They wake up six months, a year, five years later and haven't taken a single step forward. Is it family? Is it built in? Is it who you surround yourself with? Why do some people push forward through dark times and others sit in it?
--:-- James Webb: I'm a huge, huge, huge fan of relationships. I think relationships will define your life. For me, it was developing relationships during these hard times. Mentors, people that helped me see, helped me guide. One of the reasons I love being a mentor now and spend a lot of time doing that is helping people get out of that thing.
--:-- James Webb: I also think part of it is just a personality nature. There's just some people aren't meant to be an entrepreneur. That might sound terrible, and I apologize if it does, but there's just people out there that need a career. They need the nine-to-five job. Nothing wrong with that. I'm happy for them. I'm happy they're making their $75,000 a year salary and paying for their house note. But that was never for me.
--:-- James Webb: I'll tell you another quick side story. It's Second Avenue Baptist Church. I'm 17 years old, graduating from high school. They go around the room — and if I hadn't personally heard this on a cassette recording, I wouldn't believe it — but they come to me and go, "James, what are you going to do after high school?" In a very tiny voice, I said, "I'm going to change the destiny of a family." I said that at 17 years of age. If my mom didn't have the cassette tape, I wouldn't believe it.
--:-- Ryan Hanley: That's amazing.
--:-- James Webb: For me, it was always about wanting more — not just for me. I want more for my children, for my family, for my aunts, for my uncles. The amount of people I'm able to help now is crazy. The amount of family that we're able to help now is just something I always dreamed of.
--:-- Ryan Hanley: I'm not going to be able to reference who the person is — for some reason I want to say it's Simon Sinek, but it doesn't matter because I have no idea — but I was listening to a podcast interview about successful individuals. This person was breaking down X number of successful individuals they had talked to. One of the topics they brought up that I had never really considered before was this concept of thinking generationally.
--:-- Ryan Hanley: They think — no matter how successful they are, no matter how much personal income they take in — their day-to-day thought is not about their own success. It's about the success of their bloodline, their children, their children's children. You just said, "changing the destiny of a family." My father used to say to me all the time, "Once you have children, your only goal is to make your kids better than you. That's it. You get to be as selfish as you want to be until the day you have kids, and then you don't get to be selfish. Everything from that point on is about making your kids a better version of you."
--:-- Ryan Hanley: That mentality makes a lot of sense. There's a lot of nonsense in success literature, but that idea of thinking generationally — one, it gives you a longer timeline. Two, it forces you to prioritize activities and decisions that have a greater impact than just the next couple thousand bucks you're going to put in your pocket. Does that make sense to you? Have you seen that in other people you surround yourself with and the mentors you've had?
--:-- James Webb: I think that is one of the most critical factors in my life and in the life of a lot of people I know. I use this fun example. I have a friend who's successful, got a vasectomy at 18 because he never wanted children. He's got 18 exotic cars in his driveway, he's got his plane in his hangar, and he might have enough money in the bank to pay his grocery bills. He has zero interest in worrying about all that.
--:-- James Webb: I am the complete opposite of that. I have a company out of Baltimore that I hire that does family governance. I've spent hundreds of thousands of dollars on my estate, making sure that it's estate tax-free, making sure that my children are protected, making sure my grandchildren are protected. If I drew it out on a board, it would blow you away — how many trusts are involved in all sorts of crazy stuff.
--:-- James Webb: It was always, always, always my single driving factor. Did I want to drive a Lamborghini Urus someday? Yes, I did. Did I want to live in Mexico someday? Yes, I did. But my wealth manager now knows that I'll make the money. His job is to protect it, period, end of story. He protects it for my kids. I don't touch anything out there. I make my own money now for what I want to do, what I want to buy, where I want to live.
--:-- James Webb: We're continuing to do projects. We've got a couple more. We got one potential grand slam — we'll see if it happens. Then you get to a stage in your life when you're 63, which is not that old but old enough, and you start thinking a little bit more about yourself. "Okay, wait a minute. I've got 15 years on this planet, 20 years on this planet." You've got to balance that with the fact that I got a new granddaughter coming in three weeks. I got to be back in Texas. But I want to do the round-the-world trip one day.
--:-- James Webb: Wealth allowed you to do that. When you think about your family, it allows you to do that. So yes, to answer your question, I 100% believe that the majority of successful people think long term, long term.
--:-- Host: Sorry to take you away from the episode. But as you know, we do not run ads on this show. And in exchange for that, I need your help. If you're loving this episode, if you enjoy this podcast, whether you're watching on YouTube or you're listening on your favorite podcast platform, I would love for you to subscribe, share, comment if you're on YouTube, leave a rating review if you're on Spotify or Apple iTunes, etc. This helps the show grow. It helps me bring more guests in. We have a tremendous lineup of people coming in, men and women who've done incredible things, sharing their stories around peak performance, leadership, growth, sales, the things that are going to help you grow as a person and grow your business. But they all check out comments, ratings, reviews. They check out all this information before they come on. So as I reach out to more and more people and want to bring them in and share their stories with you, I need your help. Share the show, subscribe if you're not subscribed, and I'd love for you to leave a comment about the show because I read all the comments. Or if you're on Apple or Spotify, leave a rating review of this show. I love you for listening to this show. And I hope you enjoy it as much as I do creating the show for you. All right, I'm out of here. Peace. Let's get back to the episode.
--:-- [Host returns to the conversation]
--:-- Host: So pivoting to your book and some of the ideas. I want to spend some time thinking about what I've kind of prefaced our conversation on, which is one of the things that we as an industry talking about insurance struggle with the most: cultivating our high performers, keeping them happy, keeping them invested, keeping them growing. I don't know how familiar you are with the property casualty insurance industry, but there's a lot of issues around employees will hit a number and then they'll just stop growing. Whatever their number is — everyone's got a different number. It could be $100,000, it could be two, it could be five, it could be a million a year. They hit a number, and they just stop. There's just no more growth, they just manage the book. And that's what you're going to get. Not that having an employee who consistently brings in a million dollars is a bad thing — that's not a bad thing. But you can't grow a business that way, because they just sit on it. There's all these different compensation models, all these different philosophies. And as I said, it's a mess. There is not a tried and true methodology that has circulated our space that people kind of sit back on and go, "Yeah, we take care of our people by using the whatever system." It just doesn't exist. So, not that you have to speak to the insurance industry if you're unfamiliar, but just in general, I'd love to know — because of the success that you've had — how do you start to cultivate that? What is it? Where does it begin? Does it begin at hiring? Does it begin in culture building? Where does this begin? And how do you start to think about this when you're building a company?
--:-- James Webb: Yeah, so when we started Preferred Imaging in 2000, we had three employees. It was really starting from the ground up. Initially, you focus on growth and culture. We were a little bit of a party company. We had some fun, probably did things you probably shouldn't do nowadays with the current environment. We had a lot of fun and happy hours and played poker tournaments and kept people busy and motivated that way. But as we got bigger, the financial situation becomes involved in it. We did the commission structures and we did the bonus programs. In the case of my sales reps, one day I took them from salary to commission only — period. I said, "Okay, here's your base. You get three months to live off of this base. After that, you go $23 a scan. Get as many as you can." I saw guys go from $60,000 a year to six figures a year just working because it was commission only. I really liked that. I just reinitiated that into another company just literally the last few weeks, bringing them back from salary commission to just commission only. You give them that little cushion of three months — here's your cushion. I sort of back into it: you're doing $60,000, you're doing 500 scans, you get $30 a scan, you make the same amount of money. You do another scan, you make an extra $30. Another scan, you make an extra $30. So that was that model.
--:-- But then I started looking at the bigger picture model. I'll describe it through an LLC model. It can be done through an LP and it can be done through an S Corp too. I took my LLC — and the beautiful thing about an LLC is you can write anything you want in the operating agreement. I can tell you, "You got to wear a hat that says 'Como' on it every day at work or you don't even have a job." I can put that in a company agreement. So I went to the company agreement and I went, "Okay, Class A shareholders. That's me." Class A, B, C doesn't mean anything. It could be class red, green, blue, whatever. Class A is me. I have all the voting power. No one else can vote but me. I control the company. I went to Ryan, I went, "Ryan, you're one of my key people. I'd like you to have 2% ownership in the company. You will get profits and losses just like me. There'll be no difference. All you don't need is to vote. And two, there's a five-year vesting period. So stick around. And as we make money, you'll make money." At that end, that five-year period, you can come to me and you can say you want to become a Class C shareholder, which gives you two more years of vesting. So now you've got seven years, profits, losses. After that seventh year, if you leave under good terms, I have to buy you out under an agreed upon multiple. In my deal, I put a three times multiple, made it a 36-month payment if I wanted to, so I could just pay out distributions for 36 more months.
--:-- What was really amazing about it was it got such a good point with four or five of my employees that they only drew a $30,000 salary to cover their health insurance benefits. The rest of it — I remember my president in one of my companies made $700,000 a year in distributions, but she had a $30,000 salary. She was highly motivated. If you think about this in a bigger sense, it's really just a profit sharing plan, but they get to say they have equity. They get past that seventh year. It's not really equity, but it really is, but it really isn't. I found for people to say, "I own part of this company" was highly, highly motivating for them. For me to control it, for me to make sure everything happened the way I wanted it to happen was important to me. But when they hit that seven-year mark, they owned it. As I mentioned, 14 were owners in the different companies. 13 rode it out to the exits. The one that left left under good terms. I paid her a three multiple. I think I just wrote her a check because it wasn't a big one. Still friends with her today.
--:-- That was my model — ABC shares. Get to a certain point, you're vested. There's things I might have done different. If you want to be selfish, I might have said, "Okay, if we exit, you only get a four multiple even if I exit at a seven." But I chose not to do that. I didn't exit, however I exited. So there's different little things you can do inside the model. But that was my model right there, and it was highly successful. I'm about to do it again with an employee in a new company in the pet industry. I've gotten out of healthcare — never want to go back into healthcare. We're in the pet space, we're in the female weight loss space, we're in a charter space. I'm starting to bring those people in. They're not in the same model. I know for seven years they're going to stick around because they want that exit and they want those distributions. And distributions are a hell of a lot more than commissions, let me tell you.
--:-- Host: Yeah, I would agree with that. One of the things when I founded my agency, I wrote down this term — I was kind of mapping out what I wanted to do. I wrote down "a no ceiling insurance career." Because at multiple times in my career, I've been told I have no shot at equity or profit or really any kind of ownership structure, because my last name was different than the last name on the building. To me — I'm 42 today — when I was in my 30s, those were unacceptable. I was too young and too ambitious to accept the fact that there was never going to be anything more than where I was. So I wrote down this idea: no ceiling insurance career. Essentially what I wanted to do, and we are doing, is building out a plan which allows people to trial by fire, work their way through a set of escalating positions to the point where, when they've proven themselves — which will be around the five-year mark — they vest into a profit sharing plan on their book of business and stuff like that. It's going to be interesting. We're still young, so we haven't seen all the pitfalls that come with these different things as we go. But I will say that the producers that we get here, the salespeople that we get here, tend to come in and fire pretty hard because they see that there's a future for them. Some of them don't have the ability, or culturally they're not a good fit. But the idea that I could come in, work my ass off, make money, and ultimately have this future where I'm sharing the upside of what I create — it's incredibly motivating. I couldn't agree with you more. I like your structure a lot. You have me thinking because we aren't yet using different share types. We're using more like phantom equity structure. But I like the term equity. I really think that's a motivating factor over profit sharing. I just do.
--:-- James Webb: Yeah. And it's the same thing from a dollar perspective. But when I tell people they have ownership, I hand them a stock certificate. They know all the rules. They sign the operating agreement. It's a little ceremony almost. It's a huge, huge deal. I agree with you. For some reason, profit sharing doesn't feel real. You're kind of like, "Eh, they're going to hose me somehow. They're going to do something. They'll spend a bunch of money before the end of the year." All these negative thoughts start to creep into your head. But just like you said, even if it's distributed exactly the same way, feeling like you have ownership in something — it's a sense of pride. It feels very important.
--:-- Host: So, Redneck Resilience — what made you write this book? What was the impetus of it? Why did you decide to write this? Of all the things that seemingly you still have an incredible amount going on and didn't need to take on another project, what was the reason for putting it together?
--:-- James Webb: I'll backtrack a little bit and share a little bit of my personal story, because I've had a crazy, crazy life. I mentioned I'm the only guy that's probably been held at gunpoint by Sudanese soldiers when I was young. I bit off my tongue — fell off a swing set, bit my tongue completely off, had to have it sewed back on three different times with no deadening medicine, no pain medicine. I learned a lot about that. That led me to disregard blood on my pillow when I was 17, only to find out I had some brain tumors. Had to go get those out. Lost my hearing another year because of it. Had a tough year in 1990 going through divorce and child and losing jobs and all those sorts of things.
--:-- Side story to the side story: country Baptist southern boy marries big city Jewish girl from Chicago, Marcia, in 1993 or 1995. Very supportive spouse. Another thing I talk to people a lot about is having that support system around you that you need. I had it with her. She knew I had to work 17 hours a day. She knew that I had to do things. We set up certain things — we had date night, date night was religion. We had dad coached kids sports. I coached 17 seasons of some kind of sports so I'd have that relationship with my kids. Grew, grew, grew, grew, grew. The sad part of the story is we were really doing well in life, making a lot of money, building our big 12,000-foot dream home. And Marcia was unexpectedly, without any symptoms, diagnosed with stage 4 pancreatic cancer. Caught us completely by surprise. I took off from the company, took care of her. May 20th of 2012, the day she was dismissed from MD Anderson, I was diagnosed with stage 3 renal cancer. I made a decision to forego radiation and chemo. I said, "Just cut me open. Cut me. Take the tumor. Take the kidney. Take the bowel." Walked out of the hospital 19 hours later. She lasted six more days. So I'm raising two little boys.
--:-- When I was ready to get back into the real world of dating, I went on Match.com, which was kind of fun. I lied and said I was an X-ray tech, which was cute. Went that route and met Kathy. She was my first date in 20 years and the last first date for the rest of my life. We got together, dated three years, she helped me raise my boys. We got married now eight years ago and have this wonderful, wonderful life we get to live. All that's really due to this resilience — coming back, getting knocked down. I use the term resilience: it's not just getting knocked down and getting back up. Why the hell do you want to get punched in the face again? It's getting knocked down, getting back up, and finding another path. I think that's one of the keys to resilience. I don't know if I answered your question, but that was sort of a personal part of my story.
--:-- Host: No, it makes a lot of sense. I think there is an art to knowing when to keep doing the same thing and not getting results. Some people take a concept like resilience or perseverance or dedication, and they just continue to get up and try to do the same thing and get the same results and wonder why they're not moving forward. I think the insight that resilience isn't just getting back up — it's getting back up and having the self-awareness, the situational awareness to be able to make a decision if the reason you got knocked down isn't because you're just not on the right path maybe. There's a lot to that. So what do you think — obviously your personal life has played a major role in the success of your professional life. What was it about being raised in the South, being raised Southern Baptist? Was there anything in your upbringing in particular that you think helped you develop resilience, or was this an innate quality in you that you've cultivated over the years?
--:-- James Webb: I think when you watch two 17-year-old parents that have three children by the time they're 24, and you watch them go through what they went through — I learned so much from my parents. My mom went back to nursing school when I was in high school, became a nurse practitioner. We were in college at the same time. She would get up every morning as a child and make biscuits. We lived near a farm, so we lived off of milk straight from the cow, eggs straight from the chicken, squirrels and fish and things like that. My mom would get up every morning at five o'clock and cook us breakfast for school and get my daddy ready to go to work.
--:-- One of my biggest resilient lessons was my dad decided to start his own company when I was in high school. Two things came out of that. One, I said, "Dad, I want to go to work for you after high school." He said, "No, I want you to go to school so you don't have to work for a living." I didn't really know what that meant until about 2006. I was stuck in an ice storm and I saw a lineman on a power pole in the middle of the ice storm, and I went, "That's what my daddy meant. Get an education where you're not climbing the pole." Nothing wrong with climbing the pole, but he was telling me get this education. The other thing that happened to him was his accountant was stealing his money and the IRS came in and shut him down. I was probably 17. I watched my dad go back to work, pay back every penny to the IRS, pay back every penny to every vendor he ever had money to, and rebuild his career in the sales side of the electrical world. A lot of resilience there from him. Learning that from him — okay, he got his ass whipped and he got back up and he went back to work. Same thing I did in Florida when I couldn't pay my house note. I kissed my wife on the cheek and said, "I got to go back to work. I'll see you in four to five years," and went back to work. I think that was really relevant.
--:-- Southern Baptist, not so relevant. It was interesting. We went to church four or five days a week. I'm a little burned out on the church thing right now, personally. Then when you marry a Jewish girl, you learn a lot about the Jewish faith. So it's kind of in the middle. I did agree to raise my boys Jewish. So Southern Baptist kid from Mississippi raised two Jewish boys. Interesting learning experience. Kathy embraced it. I'm extremely, extremely close to Marcia's family still. Her dad is my best friend. He calls Kathy his daughter-in-law. We've got this really crazy blended family that's kind of cool with grandbabies popping up everywhere. My parents were probably the biggest influence in my life in terms of driving me and teaching me and showing me.
--:-- Host: It seems like despite all that hardship, you were able to keep love to a certain extent in your heart. The relationships you've had, the depth that you've had with your employees, particularly your key employees and throughout your companies, has been a big part of your success. Does that seem right?
--:-- James Webb: Yeah. I said it earlier and I'll say it again: relationships will define your life, period, end of story. They will define your business. They will define the direction you go. They will define your success. I always make a joke about the fact that I probably fired 498 people, and 496 still send me Christmas cards because I have a relationship with them. I set expectations. They didn't meet them. They either weren't the right fit, needed to go somewhere else. I was compassionate in my terminations — two not so compassionate, the rest of them I was. Again, about relationships. I'm a big believer in that.
--:-- Host: I mean, at the end, not to get too cliché, but I think this is something you definitely don't realize when you're young. It takes time. As your life gets more busy and you realize what real relationships are and you go through real hardships with people, you start to understand what relationships mean to you. Do you have any — I don't want to make it trite — any advice for people who maybe struggle? One of the things I talk about — normally on Fridays, every other Friday, I have this little man meeting that I go to. It's a bunch of guys around my age, thirties to mid-forties. We just sit and have coffee or eggs at the diner and chat. One of the things that comes up every once in a while is just the hecticness and urgency of 2023, modern society, makes cultivating relationships difficult. We kind of come back to: is it just a lack of prioritization? Is it that the world really is incredibly busy right now? Is it that secularism has kind of taken over and we'd rather buy something than spend time with people? Do you have any advice or guidance for people who maybe are sitting here going, "Geez, I believe that 100%, but man, I struggle to maintain, build, or grow relationships with people"?
--:-- James Webb: It gets harder and harder the older you get. It's really hard in 2023, 2022, and maybe harder in 2024. I think one of the most positive things and negative things that came out of COVID is what you and I are doing right now — Zoom. Positively, we can communicate. Negatively, we're not in the same room. I'm not meeting you afterwards for a happy hour drink. I'm not going to lunch with you. I miss that a lot. I think that's a huge component. I wonder about the next generations — how they'll overcome that, how they'll develop these relationships. Will it always be on a computer? I don't know. I like you already, but you're on a computer.
--:-- Host: One of the things — we're big into baseball in my family. I played baseball in college, played a little while after college. I have two sons, nine and seven, and they both play baseball and travel baseball. One of the things I find very interesting just watching young kids today — because I tend to enjoy kids, I'm not one of those guys who finds them annoying — I talk to my kids a lot about it. I tell them all the time: this experience that you're having where you're struggling, you're winning, you're losing, you're having personal successes, personal failures, team successes, team failures. You're watching your friends where you're bleeding and sweating and having all these experiences together and traveling together. I say, "You don't know it today, but you will look back on these times. All these kids that sit at home and play video games and never come out of their house and their parents have to watch every move they make — you are going to be so far ahead of them in life because you're learning how to have friends and how to interact with kids. One of the kids is kind of a jerk — how do you deal with them?" All these interpersonal, interrelational skills associated with a common goal of winning baseball games — it's just so valuable. So many kids, you can just tell they spend 90% of their day indoors in front of a computer, in front of a TV, in front of video games. They really struggle. They don't look at you in the eye. You talk to them, they don't talk back. I worry for those kids. It's not really my concern necessarily — they're not my children — but I do think there is going to be a major divide in our society in these generations. You have the kids that were given experiences like what I hope I'm doing for my children, and then you're going to have this other group that absolutely does not know how to relate to each other outside of a text message or a video game chat screen. I just see it as such a competitive advantage if you can put your kids in that space.
--:-- James Webb: I agree 100% with you on that one. I'm really trying to focus my grandkids on sports a little bit. They're not athletes, but they're participating. My one grandson spends half the day on the computer doing a program — he's learned how to do programming at 11 years of age. But he's also going to the basketball game that night practicing with his friends, and he's also going to the swimming thing. We're trying to really push in that direction. Then we have the other grandson who's pretty content to play a saxophone and do his video games and never leave the house. We're really trying to get him more involved with friends.
--:-- Host: I have a buddy of mine — he's known out there — during COVID, his son was stuck in the house for so long playing video games. He broke his video controller and he hung himself in his closet. He was seven years old. It completely wrecked his family's life. They've started non-profits now to kind of remind people to get them off the freaking video games, get them out there into the real world. I struggle with it with my own grandchildren a lot.
--:-- James Webb: Yeah, I do too. There's part of me that completely understands that the hectic nature of life — in small doses, this is how these kids relax to a certain extent. But uncontrolled, unfettered access to YouTube or to video games — it's not healthy. It's absolutely positively not healthy. It's a struggle. I struggle with it a lot. You have that thing inside you as a parent where you want your kids to be happy, and it's something that makes them happy. But at the same time — I think my ex-wife and I have done a good job at this — you get so much time and that's it. Then it's done. This is play. This is not real life. I tell them all the time: "Guys, this is not real life. Being good at football on the video game is meaningless." It's fun, it's cool, we all have hobbies. But it's meaningless to your life. It's just a fun thing that you do as an escape for a little while, which we all need. But it's not real. YouTube stuff — you're watching something that's a fantasy. It's like watching a dragon movie. It doesn't exist. You're not watching real life. That is such a hard concept for these young kids to wrap their head around. They don't realize that they're watching something that is completely make-believe. They get lost. Maybe there's some real to that. It's very scary, particularly with some of the things that are happening out there in the world.
--:-- I remember back when I was a child. My parents said, "Okay, you watch Popeye and Three Stooges for two hours. After that, get your butt out of the yard." We literally had the Second Avenue Raiders, our little club. We would meet and play baseball and softball and run up and down the streets and skateboard and build our own little go-karts. We just don't do that now. I don't know how much that falls on us as parents, how much that falls on us as society as the norm. But I push my children to limit their kids' time on the devices.
--:-- Host: I completely agree with you. I talk to my mom about this all the time. My mom was young too — not as young as yours, but she was 20 when she had me. We talk a lot. At eight years old, she was handing me milk money and sending me out into town to go get milk and eggs or whatever we needed from the store. I'm crossing streets and walking through neighborhoods at eight, and I'd come back with bags of groceries and she'd be making dinner. Now, my older son is nine. We're at the batting cages the other day and I send him out to get more money — I left my wallet in the car. He's like, "Hey Dad, can I get a Gatorade?" So I send him out to the car to get my wallet. I'm having nervous energy that he's going. I trust that he's smart, I trust that he's capable, I trust that he's very cognizant of what's going on. But I'm having some anxiety. I know that same situation with my mom 30 years ago — she wouldn't have thought twice. She'd just be like, "Hey, I need milk. There's my milk getter. Here's $3. Go get us milk and eggs." Is it that we just know every bad thing that happens in the world every day through the news and media? Is it that the world is actually more unsafe?
--:-- Host: I don't know what it is exactly, but it's definitely there. It is absolutely definitely there.
--:-- James Webb: Yeah, I don't think there's any question that the world is more unsafe, period, end of story. I think access to news and social media has enhanced that problem. You brought up getting milk. My parents had a horn. At eight o'clock at night, they would toot the horn and we knew we had to come home. But I might have been gone for 11 or 12 hours.
--:-- Host: Yeah, yeah, yeah.
--:-- James Webb: So it's a hard question to answer, and it's even a harder question to solve.
--:-- Host: Yeah, I agree with you. I'm not sure what to do. I'm doing the best I can with my kids. I'm going to make sure they're protected. I'm going to make sure that they limit their time on social media. But so far, they're doing great. All my kids are doing great. I'm very happy. I'm very proud of them.
--:-- Host: James, I want to be respectful of your time, respectful of our audience's time. It's been absolutely tremendous speaking with you. The book is *Redneck Resilience: A Country Boy's Journey to Prosperity*. We'll have it all linked up in the show notes for everyone that's listening. If anybody wants to connect with you in any way, other than just coming to your website, which I'll have linked up — it's jamesherrellweb.com slash book if you want to go to the book, but you'll see the links are on there. Is there anywhere else they can connect? Do you do anything in any other venue where they can follow along with anything that you're doing?
--:-- James Webb: I don't really. I mean, Facebook is big. LinkedIn is probably my biggest.
--:-- Host: Gotcha. We'll have all that. Just look up James Herrell on Google, we have LinkedIn. We try to post daily messages and we're trying to motivate people.
--:-- Host: Awesome. Well, it's tremendous. I love your viewpoint. I love your experience. I completely think the way that you've used the word resilience and the fact that you did use it makes so much sense. And in the way that I think a lot of people need today, because it does feel like people are getting — and maybe this is the way the world has always been — but I know a lot of people right now that feel like they're getting knocked down or getting held back quite often, or more often than they're used to. Whether it's COVID or it's something else, the economy. And I think it's positive, reassuring messages that also come with a bit of a kick in the butt are what people need. And I appreciate you and I appreciate your time.
--:-- James Webb: Thank you for your time, Ryan. It was a pleasure, buddy.
--:-- Host: Yeah, thank you. Have a good one.
--:-- James Webb: Thank you.
--:-- [End of interview. Promotional segment begins.]
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