David Lecko 0:00
I built deal machine as a helpful tool for myself, but the tough part came maybe five years in, when you do something significant, where we had grown quite extensively, everyone looked and they were jealous, and then they were like, want me to copy that? So nine copycat apps came out. I did the total opposite of what any entrepreneur should do. So you shouldn’t just retract in and try to solve it yourself, but that’s when you should reach out to people for help and to figure out how you’re going to get out of this mess. Reason why we’ve grown 44% in the last year even as like, a seven year established company, it’s because of like,

Brad Weimert 0:36
Congrats on getting beyond a million. What got you here won’t always get you there. This is a podcast for entrepreneurs who want to reach beyond their seven figure business and scale to eight, nine and even 10 figures. I’m Brad weimert, and as the founder of easy pay direct I have had the privilege to work with more than 30,000 businesses, allowing me to see the data behind what some of the most successful companies on the planet are doing differently. Join me each week as I dig in with experts in sales, marketing, operations, technology and wealth building, and you’ll learn some of the specific tools, tactics and strategies that are working today in those multi million, eight, nine and 10 figure businesses, life can get exciting beyond a million. David, let go. Appreciate you carving out time. Man, thanks for showing

David Lecko 1:19
up. Thank you, Brad. I appreciate it. Yeah, for sure. So it sounds

Brad Weimert 1:23
like you’ve got a you’ve been doing a little podcast tour right now. You just did something with Rich Dad, which is super fun. You are. You’ve got a couple significant things that I want to talk about, deal machine being a big one, which is a app, software to find off market real estate deals, and then, obviously that sort of is part and parcel and tied into your real estate investing strategy and portfolio. Tell me, realist or deal machine has 5000 reviews, and I think a few 100,000 people have downloaded it and use it at this point. Can you give me a basic rundown of what it is and who it’s for? Yeah, I

David Lecko 2:01
mean, we believe that the Path to Wealth is finding discounted properties, so it’s a marketing tool that gives you the data on who’d likely be willing to sell at a discount and the ability to get in touch with them. So normally, have to pay 10 cents to go get like, contact info for a house, but we included contact information unlimited access to that in the app for a monthly fee. And it’s not just random phone numbers and emails, but it’s like, how old are they? Where’d they go to high school? What’s their credit score? What are their family members? And you can browse through all that five layers deep on LLCs, etc. So you can call them with a dialer that helps you know what to say next. It kind of takes notes for you. Click, what do I say next during the call, or you can send direct mail. So basically, in summary, it’s a marketing tool for house flippers to find discounted property sick. So

Brad Weimert 2:50
I want to talk about kind of origin story, but let me ask you some focus questions on that business model first. So as a is that a feeder for a different business is it a standalone business model for you? What’s the overall portfolio of kind of what you’re working on, what you spend your time on?

David Lecko 3:07
Yeah, deal machine is the business. That’s it. And I built deal machine as a helpful tool for myself when I was looking for my first rental properties and couldn’t really find anything that would cash flow that was listed with an agent on Zillow, so I knew I needed to go off market, and so just built a tool to help my lack of follow through doing that. So I do have a rental portfolio of 19 properties, and so still building that. I did seven deals this past year, did $100,000 on the biggest deal. But other than that, it’s just that and deal machine. And on the side, I’ve been getting into race car driving, so that’s a new thing I spent quite a bit of time on this past year. That was really fun.

Brad Weimert 3:49
That’s amazing. What kind of cars?

David Lecko 3:53
Yeah. So I have local series here where we race 30 year old Miatas, and it’s very competitive, very good for building your skill. And then I also got the really popular British race car that they just started bringing over to the US, called the genetta. So it’s a really lightweight two frame chassis car that is powered by a Ford v6 engine. And it’s a spec series, so you’re racing against different people, and so it’s all about building driver skill and competing driver to driver. So we did some really historic, badass tracks and had pro coverage on the series this year. Was really exciting with the live streams. My favorite track was Watkins Glen. It’s actually where they used to have the f1 race a couple decades ago, until they came up with safety standards inside of there’s too many walls. It’s too tight at Watkins Glen for the safety that they want to have. So that’s it’s just such a beautiful track and lot of history there. Super fun,

Brad Weimert 4:56
wild. Well, let’s get back to the race car driving, because that’s a trip. Do. Um, but the deal machine. Tell me about overarching business model. Because on the one hand, you’ve got the tech component of use the use the app. Find the properties. Are you? How are you monetizing that business model? It’s a monthly

David Lecko 5:16
fee. So it starts at 119 a month. The biggest plans at 500 a month. And so the biggest difference there is, like, we have some people with six of the $500 a month plans because they want to export and text message all those sellers when I have a texting platform built in, so they get like 100,000 exports with the contact info for 500 bucks per month if they were going to skip Tris that elsewhere, it costs like $10,000 like $10,000 a month. So that’s, that’s the business model, is a monthly fee.

Brad Weimert 5:48
And so for people that aren’t actively skip tracing, that’s basically digging in and finding the data behind how to get a hold of people, yeah, so the

David Lecko 5:57
term skip tracing, it came back, like, from, I think back in the day, if you had, if you were a criminal and you skipped your court date, there’d be like, a certain person who would go trace the skipper, and so they would track them down. And it’s just a term that’s been very popular ever since it’s evolved, right? And skip tracing just means you’re going to find the property owner’s phone number. They’re not criminals or anything, but that’s the that’s where the term comes from.

Brad Weimert 6:24
That’s amazing. I did not know that, and I’m, you know, it’s funny, because I’ve heard the term skip tracing for decades, and I never knew where it came from. So that’s awesome. Yeah, where do you get the data today? So as a software provider, data is all over the place, and it’s changed a ton. How do you how do you manage that? Do you have a single source API? Is there somebody that feeds the data in? Do you have to dig around for it? And obviously the value is in the whole software. And building the whole thing, it’s not like, oh, yeah, you can just find the data here. You still need the software. How hard is it to do that these days?

David Lecko 6:59
Yeah. Yeah. So there’s 3000 counties, and those county level data providers are kind of becoming a commodity, like the price just keeps coming down on those. So I think for like, maybe $300,000 a year, you can license all the county data, and you can actually, you know, get daily updates on that, and big dumps the API is, is not useful. You want to get the the full data dump, because once you have the data in your database, then you can do a lot more things in the app. The API is just like one off data, but you couldn’t display all the properties, you know, at once if you didn’t have all that data in your database. So, man, I think, I think the most people are getting that from, like, first American Title Company is just kind of like the table stakes, you know, version of the data that you need for that, and pretty high quality. And they, like, I said, it’s like a commodity. Basically, you couldn’t build the system to collect all that data and for, like, less than 300,000 so you might as well just buy it. The price keeps coming down. Now the contact info, it’s very much our secret sauce. And how we put that together is also kind of like a moat. You know, it’s like, not exactly easy, if you have a file on every person in the US, to really match that accurately with the property and stuff. So wouldn’t be able to disclose that. I don’t even know that, because I have an engineering team that’s figured that out, but it’s been a reason why we’ve grown 44% in the last year, even as, like, a seven year established company. It’s because of, like, the value we’ve been able to provide with that data.

Brad Weimert 8:38
Love that. What has the challenge been in the last in the more recent years? So you started it seven years ago as a software to help you as a real estate investor. And actually, before we get to the most recent challenge, what made you think, Hey, I should pursue this as a business, versus just using it as a tool to invest in my own real estate? Yeah. So

David Lecko 8:59
I built it as a tool for my own self. And it was just on my phone. There was somebody who ran a meet up in Indianapolis to educate wholesalers on how to find deals. And she came every month to educate them, and then she’d buy from the wholesalers, so she’d be their buyer. She wanted to buy 30 deals per month in Indianapolis, which really blew my mind. And when I came to that meetup, and I had made the tool. It’s kind of shown her what I had. She’s like, Well, how do I get a hold of that? I’ll spend $1,000 to try any new marketing. I was like, what are you what? I didn’t even try to sell it. And so I was like, I got, I got to get on the App Store so you could actually use it. I had to come up with a name to put it on the App Store. And in my previous job, if I, like, closed the deal, my boss would be like, Man David, he’s a deal machine. That sounded great. It felt good. And so I just thought that was cool. It’s what I called the app. And slowly it just kind of built up that this app kind of made it easier to do stuff investors were already trying to do. And I think that’s the secret sauce. There’s one thing I’ve taken away from doing this for eight years. It’s like, you. If you’re in business, you want to make it easier to do things people are already doing, rather than reinvent how people should be doing something that’s very difficult to change behaviors. And we’ve gone down that path a little bit and learned the hard lesson the long way. But you don’t want to make people do things differently. You just want to make it easier to do what they actually are already doing. That

Brad Weimert 10:20
is not something you normally hear software developers say. Most software developers, no, most software developers are doing literally what you ask them to do with no regard to the friction or the ease of implementation or execution or user experience. As somebody that develops software, this is my experience. Okay, your, but your background is software engineering, right?

David Lecko 10:44
Yeah, I did computer engineering, but I have not delivered. I have not developed the software since, like, the first year, you know, that was really taken over by I made I asked my friend to be my partner. He’s 50% partner. He took over a lot of the development. I haven’t done it since then, seven years ago, and have focused more on pretty much other all other aspects of the business.

Brad Weimert 11:06
Awesome. So he’s responsible for the software side of things, and you are responsible for growing it. We actually

David Lecko 11:13
have a head of engineering who’s responsible for managing the engineering team. So we got a team of seven. They’re all in Indianapolis and St Louis, and now one in Maryland. But, you know, we actually just have them follow process. And then my business partner, he’s like a very, very popular, not very popular, but very special software developer, where he just not only has the ability to code the database side, but also the front end side, and also make it look good, like good intuition on brand and how things look and feel. It’s just one of those unicorns. And so he works as part of the team as well as kind of advises technology, architectural decisions, but then we have somebody come in and make sure everyone’s following the right process, et cetera to make that smooth,

Brad Weimert 12:01
yeah, for anybody that’s not, you know, anybody that’s watching, that’s not a software developer or running a software company, it is tremendously uncommon to find developers that are really good at front end and back end and architecture, right? Those are typically three different skill sets. So front end being, what is the design and how do you actually execute the code that allows people to interact with your software? So the user interface in the back end being kind of the database stuff and where stuff stored, and how does it move, and how does the program work on the back end? And architecture obviously plays into that, but that’s when you say unicorn that tracks, yeah, for sure. Yeah, no question about it. What do you think the most difficult thing has been in launching an app and growing it?

David Lecko 12:51
The most difficult thing was definitely my business was a rocket ship, so I kind of worked two years before I could pay myself a salary. And that wasn’t like hard, but it was something I was so engrossed in, I couldn’t focus on anything else. And so the time actually passed very fast, because there’s nothing more important in the world that I wanted to work on. I didn’t go on trips. I had three roommates to cut costs. I didn’t have a nice car, but I was fully excited to work on this software that I just had this feeling. I knew this was gonna help. I knew this helped me, and I wanted to keep doing that and growing and helping others as well. But the tough part came maybe five years in, when you do something significant, where we had grown quite extensively, everyone looked and they were jealous, and then they were like, want me to copy that? So nine copycat apps came out. That was the first time I’d ever experienced any thing less than total up into the right. And so I just wasn’t sure what was going to happen, right? Just kind of being new to business and having quite a bit to lose at that point, right? And we’d grown to like, a 12 million run rate at that point in four years or so. And so the toughest part was just the uncertainty of that and, and, I mean, I think eight of the nine apps turned into nothing, and then one of them kind of became a competitor. So, you know, it wasn’t as big of a deal as I thought. And I would say that was the toughest part, though, because there’s like a nine month period where finally had big boy money for the first time. I bought a 6000 square foot house. I bought my dream car, the Ferrari, 458, and then I also hired 50 people all at once. And so that was that was right at the moment where some of these other apps came out, and some of the attention that we were getting from people was getting diverted, right? So a lot of the mindshare was no longer just us, and so less people came in. So what was once a very profitable company kind of had some moments where it was break even for several months in a row, and I was like, Oh, crap, what? What is going to happen? What am I going to do? And so, you know, I didn’t sleep. I didn’t really have time to be with friends. I remember, I was at a Thanksgiving. It was this time of year. Or three or four years ago, and everyone was, like, singing around the piano, somebody was playing and I was in the other room, like, just like scrolling on my phone playing chess, because how could I have, like, a good time and feel good when I had this uncertainty going on? So I would say I did the total opposite of what any entrepreneur should do. Is you shouldn’t just retract in and try to solve it yourself, but that’s when you should reach out to people for help and to figure out how you’re going to get out of this mess. And so should that type of thing happen again, I’d handle it way better. I would say, having gone through that felt how painful that can be and how unnecessarily, you know, long that period lasted, rather than me go out and try to get help right away, or talk to peers, etc, for support ideas, etc. So, I mean, listen, say we got through it. I didn’t fire a single person, I didn’t sell the car, I didn’t sell the house, but we had some tight months for sure. And the way, I mean, a huge, a huge way we got out of it was we didn’t ever do any marketing ourselves. Up to that point, my company grew because of referrals from people on YouTube that educated how to invest in real estate. And so we started and formed our own marketing team, took some of the existing staff and formed a marketing team. So we started to take more control of the message and the marketing that my company needed to keep growing, and so that was like a pretty crazy thing, looking back that we had a company that big with no marketing, I

Brad Weimert 16:27
love that. I mean, I think that, I think that they’re mixed. It’s a mixed bag, right? Today, more than ever, so easy pay direction. We do the payments for 1000s and 1000s of entrepreneurs. And one of the things that we see more commonly today than ever before are people going from zero to, you know, several 100 grand or a million a month plus. But almost always, the way that’s happening is paid ads. And paid ads can be a great lever, but they also usually come with a pretty tight margin as you’re growing, because you’re just chasing the conversion. And if you can get an ad to work, even if it’s, you know, $1 in, $1 and a penny out, it’s moving right, it’s moving the engine. But if it stops, it creates quite a bit of stress. So growing organically has this huge benefit, but you have a lot less control over that engine. You mentioned two things, though. You mentioned the growth being sort of organic, but really it sounds like sort of partnership driven, content driven for sure, and education driven. Did you have a rev share with the YouTube content creators, or were they just excited about the product. What was the growth strategy there? Yeah,

David Lecko 17:43
not at first, but they naturally started picking up the app because it was just such a good app, good product, market fit, and telling people about it, because that was what was best for their audience. About nine months in, I thought, man, somebody could come in and start paying them. They might switch what they were talking about. Let me just call them all and say, Hey, I’m going to start paying you guys money. They love that 25% and then as time went on, we had the opportunity for increasing that with different tiers based on like, Hey, if you just want to talk about, if you want to post a video every month, and you’re bringing in people every month, like, we can get you even at a 40% tier. So that’s how we did the revenue share affiliate program at deal machine, and it just evolved like that, but not at first, which was cool. When I say cool, I mean, obviously it’s cool not to have to pay anyone to do it, but I it was cool and a huge honor at first that it started happening because they truly believed that this was, like, a helpful thing for people. So I knew we were on to something. You know, when they that was naturally happening. And I just as a business owner, of course, I love all attention, but I always have a much better feeling when I know the attention is coming from somebody who’s genuinely using the tool themselves, not just pushing it to make money, you know. So that’s why I was saying it like that. Was just so cool how that happened, and I’m continue to be thankful for that today.

Brad Weimert 19:01
You know, back to the all these companies that have that effectively scale quickly through ads. If you’re good at marketing and you’re good at sales, you can oversell and you can oversell the click, and that doesn’t mean you have a good product, right? It’s not often the best product that wins. It’s the best marketer that wins totally, and if you get organic attention and conversion, it speaks to the product more than the business model, which I love. What do you think is particularly unique about the deal machine, product that people like that’s different than the other products out there? To skip trace and to find contact info and help people invest in real estate properties. Yeah,

David Lecko 19:46
so, so, I guess skip trade has been around a long time. We pioneered the unlimited contact info last November, and I think the old way was you get three phone numbers, three emails and three names, but you. Get any DNC info. You didn’t see who was the renter, who was the owner, and you only get one phone number per person in deal machine, you actually have the same three people show up, but you can click into each person, and each person may have two or three phone numbers, cell phone, landline, also emails, etc. And not only do you have the numbers and you know the numbers are connected to that person, but you do know, like 40 different other things about that person that you can view and or filter by including age, how long they’ve lived there, what other properties do they own? Even do their credit score, if they’re empty nesters, if they’re veterans, if how much credit card balance they have like, it is a screen that you can view, that you can filter by that information. And just we’ve all actually heard the sales term by Chris Voss right, who was like the FBI hostage negotiator. And he was like, one of the most powerful tools that we’ve used and continue to use in sales of all disciplines, is labeling. You can’t label if you don’t know anything about the person or the type of prospect, right? But when you can’t get the info out of them that you need during the discovery phase, you you can’t, like, really provide a strong prescription or sale or solution to that problem. And one way to break through is labeling, right? And you can have a lot better chance of labeling when you have 40 fields about that person. So let me give you an example. Like, let’s say you’re you got a tummy ache, and you’re hunched over on the street corner, somebody comes up to you, and they’re like, Hey, are you okay? And you’re like, Oh yeah, I’m fine. And you just want them to go away, right? And then you walk over to the doctor’s office, and then that same person walks in too, but then they put on a lab coat, and now they have the doctor’s coat on, and they’re like, Hey, are you feeling okay now? You’re like, oh my god, I’m feeling terrible. I ate this thing last night. I have no idea how I can stop throwing up. It’s like, the same person, but you didn’t like, trust the random, random person on the street until they had that doctor’s code on right? And then they ask you, and then they’re like, Hey, I would prescribe you this solution. And you listen to it, because now you believe them, right? So if you can’t get through that discovery phase because you’re an unknown person, it’s really hard for them to believe your prescription. They just kind of want you to go away. So that’s what some of the extra data helps you do is basically during the discovery phase, maybe labels say perhaps you’re feeling this way, because maybe you have credit card bills that are, like, really becoming a problem for you to know how to pay, and you could see that, and then the person’s like, now opening up because they’re like, Oh yeah, man, I just had these medical bills, it’s on the credit card. Can’t get underneath that 17% interest rate. It just keeps racking up. So that’s that’s what’s different about deal machine, and why I believe we’ve grown 44% without a doubt,

Brad Weimert 22:52
richer data. Yes, love that. What? What are you doing differently as the owner today in your day to day operation than you were when you were trying to get things off the ground going zero to a million.

David Lecko 23:09
Yeah, I didn’t hire anyone until I had money to pay the person. So when I didn’t have money to pay the person, I was mainly just trying to get the word out going to conferences so that I could build relationships with Sean Terry is with the first conference I went to, but he was actually too busy running the conference. And my master plan of like, Hey, Sean likes me in the product, he’ll tell his like students about it didn’t really work out, but I met someone at his conference that started posting YouTube videos and just reach even more people than I ever imagined. So put myself where serendipity can happen nowadays. You know, I’m not kind of going to random conferences as an attendee to go, you know, build relationship with the host, possibly, but, you know, thankfully, like we’ve been established in the industry. So what I want to do is continue to get in front of people and help them. So I go to conferences, run a challenge at the conference, and then people in the audience will actually use the data to make cold calls. And if we have 200 people in the audience, and I help them make cold calls for 30 minutes, someone will get an appointment. We give away a $2,000 prize, and you will split any revenue from continued subscriptions with the conference host, right? So that’s definitely changed big time, and has been a great success the last two years where we’ve been doing those challenges.

Brad Weimert 24:27
That’s cool. I love that from a marketing perspective. So are live events a significant portion of the marketing strategy at this point. I

David Lecko 24:39
think we do like nine a year. So, I mean, we get a couple 1000 people sign up every month, so I wouldn’t say a significant portion, but I’ll always take those opportunities, because nothing beats in person, and they usually are ROI positive, like in that format, which is really nice. 40% of our people come from partners, though, just in general, like that. At so not, not necessarily just live, but still partners that have, like a coaching program, that want to include deal machine for their students. So the coaching program has less churn because they know they get that when they’re continued members or or just straight recommendation or incorporation in the education, and then we pay for referrals as well.

Brad Weimert 25:20
Yeah, I think that that that point is super relevant to tons of different business models, which is, if you can find a partner where your product is additive, meaning that the partner is more valuable to their client base because your product or service is being offered in tandem with it, that’s where the stickiness is, right. That’s, that’s the best type of partnership? Yeah, where did the other 60% come from? If 40% are coming from partners today or organic,

David Lecko 25:47
and then our own marketing, and that’s where the rest comes from.

Brad Weimert 25:52
How do you get you mentioned the YouTube thing? How do you get placement in the App Store today? How do you, you know, pop up first in the app store when somebody types in real estate investment software, skip tracing software, or whatever. Dude,

David Lecko 26:08
I don’t think we’ve put any thought into that. Honestly, at first I remember putting keywords like, you know, driving for dollars, skip tracing, etc, that people might be searching but I don’t think anyone on my team is any type of focus on where we come up in the app store, to be honest, we really don’t. We do we have a we want reviews there, right? So we send people to reviews there, and I think that probably helps.

Brad Weimert 26:39
Do you have a specific review funnel that you’re that you leverage to try to get the good people to post reviews. You just say, hey, post a review everywhere. Or how does that work? No,

David Lecko 26:48
no, no, no, yeah. So you want to find when somebody just had their aha moment, or they’re really happy. So if my support team solves a chat, they ask if the person’s fully satisfied, and if they’re like, hell yeah, then they’ll say, Hey, man. I mean, a whole lot, if you just leave this review over here, that’s the moment when we do

Brad Weimert 27:05
it. I love that. That’s also a great thing to do. Those are, you know, I have this general construct that a piece of real estate, it looks amazing, right? They can’t articulate what all of the elements are that make it look amazing. But if you start to take the little pieces away, after one or two or five, details get taken away, people look at it and they think, oh, it looks good, but not amazing. And as you take more away, it erodes more. And if you look at that from the other direction, it is all of those little details that make the picture amazing. And in business, things like having your customer service team ask for a referral in the moment of aha, is one of those little details that creates a really strong engine to produce positive reviews, raving fans, whatever, whatever. But all of them are really important. When you put them together,

David Lecko 28:06
yeah, if you do it random times, it’s also super annoying. You don’t want to make people mad asking for reviews, and they’ll leave a bad one.

Brad Weimert 28:14
What are the other little details that you have in business that you think are super important, that people don’t think

David Lecko 28:21
about? Oh, that’s good question. The first thing that comes to mind is the the certain font, the certain shade of black that we really wanted to have everything look and feel the same. I’m trying to think of other little details. I think one of the things I’m most proud of is my employee, net promoter. Score is 90. So for those that don’t know, you’ve probably been asked like, how would you feel about this product on a scale of one to 10 and nines and 10s are worth 100.7 eights are worth zero points, and everything else is worth negative 100 points. So you’re trying to see if people are promoters, neutral or detractors. But you can also ask your employees how happy they are working at your company. And so 90 is really, really good. I think, like most you know tech products, they’re like, 30 to 50 would be good. And so 90 is really, really good, and I’m very proud of that. Have had an average tenure of four years now, but I only started hiring people like five and a half years ago, right? And built up from there. So it’s really a special place. We have people who are more senior in their career who say, God, I’ve never worked at a place like this where there’s no drama. So a few things I feel like are important, because that’s all like culture, right? Culture is what people do with lack of direction. Is a little thing that I took from this beautiful book called The Great CEO within, and I’ve got it on my other shelf, but it’s written by Matt moccari, and he actually his job. Is a CEO consultant in Silicon Valley, where they’ll pay him to become the CEO. Have the real CEO shadow him for like, three months. He fixes everything, and then hands it back to the CEO. And he’s got this framework for having hard conversations, and that’s one of our values. And the format for how he has the conversation is what’s key for like, the leader. And I started demonstrating, and then really ingrained, I think so when people normally have feelings that fester and are annoyed by other employees, then they talk to each other about this and waste time, and it doesn’t feel good when you overhear somebody saying that about you. So we say, no, go straight to the person and you say it like this, like, Hey, Brad, I really liked how you invited me on this podcast. And I really wish you would have sent me some Topo Chico so I could have enjoyed that with you over here in Austin during the podcast. And then now you have a response that’s also in a framework you’d be like, David, what I heard you say was, you wish I would have sent you to Bucha. I reject that because that’s absolutely ridiculous. Nobody does that for for podcasts that are virtual, and then I would, that’s it. You can accept it or reject it. And that’s what’s so awesome, is it gives you the power to do so. And so, yeah, that’s, I think that’s why, and it is a little detail that has really made a great culture. Because, dude, if somebody’s like showing up late to meetings all the time, it wastes five times their annual salary when somebody’s just not doing culturally what everyone else expects. Because it wastes everyone’s time who’s hanging out in the phone, waiting, doing nothing for that person to show up or not, but then later they also like bicker and it wastes time. They’re not being productive. They don’t like their job as much. So really giving people the tools to have these conversations themselves has been a little detail, I think, has gone a long way. What

Brad Weimert 31:54
I got from that was the framework to have tough conversations, yeah, and not

David Lecko 32:01
just telling them how to do it, but really like doing it. So we would, and this was next level stuff. I don’t do this anymore, but for a while, I had our leadership team once a month assigned hard conversations. We had to do it in front of each other, because this is not natural. People don’t want to follow that. You have to really demonstrate it and then get people to practice. So I’d make do round robin feedback assignments. Be like, Nate, today, you have to give it to Josh and dude, the first, like three, four months, there was, like, real shit that people would say. And then after four months, I was like, hey, whatever you just said wasn’t real. I find something real, and you have to say something. And that worked to help really dig and push stuff out of people, but then eventually they really didn’t have anything else left to say, so we stopped forcing people to do that. But I think that was really critical to like getting them used to having those tough Convos,

Brad Weimert 32:52
and that did that lead to them having the tough combos without prompt, so communication just got better amongst the team.

David Lecko 33:00
Yeah. I mean, if somebody came to me complaining instead of me fixing it, I would give them the tools as like, have this conversation this way with this person, and then report back to me on how it went. And then I’d go to the other person and I’d be like, hey, this person is going to come to you with a hard conversation. I need you to react to it in this way, however you feel. It’s fine, but just use this format, and then they’d have the combo, not knowing I talked to either one, and then they come back, be like, and now we’re great, you know what I mean? So I’m their coach, but I need them to do the activity so they can then begin to do it themselves over time, so it’s not something that just they feel comfortable doing it over time. But I really kind of acted as a coach, and kind of also forced it with the round robin feedback with our leadership team, and I think over time, they got used to it.

Brad Weimert 33:47
The details here make a difference to anybody that’s running a business that has a bunch of employees that are wandering around talking shit or suppressing their shit or whatever. But do you have a forum for that. Do you did you specifically bring up the hard conversations in weekly meetings and one on ones? Or was it, hey, whenever it came up, we’re going to drop what we’re doing and go. Have to address this right now.

David Lecko 34:10
So you want your leadership to know how to do it really, really well, because they’re the ones who are going to coach their direct employees. So we would do a once a month leadership meeting, and that’s when I would do the round robin feedback for them. And so everyone would listen to the other leaders, give feedback to each other. That’s how we did it, for three months. And then if an employee ever had a complaint and it came to me, I would coach them on how to have that Convo as needed. The one other place that we actually do ongoing training, which I believe is a key part of any CEO’s job, is training your people, is we have, like a fun Friday meeting, and we have three questions with Kahoot, which is like a game. I don’t know if you ever knew this, like a multiple. Choice game. Whoever answers correctly first kind of gets a score it, dude. It was invented by like, a high school project, and it’s taken off, like, it’s a super powerful way to make training fun. So we’ll put like, how do you have a hard conversation? There’s four options, and then everyone has scanned in with their QR code, and they can answer with their phone. And then there’s a person with a high score at the end, right? Everybody just wants to compete. But then after the question’s over, I get one minute to give a spiel on like, well, this is how to have it, and this is why we have it this way, and then we move on. So that’s how I keep it fresh

Brad Weimert 35:31
as well. I love that. Kahoot, yep, that’s fun. So that’s, I mean, these are, again, this is like another small thing that contributes to the big picture, that gives you an employee Net Promoter Score of 90. What is the structure and framework of core values for you, and how does that play into having an employee Net Promoter Score of 90? Yeah,

David Lecko 35:54
I think it’s just my thumbprint is all over the company, and there were just six values I thought were really important to me, and I knew they were important to me because I was like, what pissed me off about past work environments and relationships? I’m gonna make the opposite of that my values. And so one of the things was like, I just hate white lies. I think it erodes trust. I think that it gives you no benefit, even though it feels good in the moment. So telling the truth is one of our core values. And early on, when the app was, like, a little bit more shaky, because we were new at software development, and maybe it had bugs, or maybe it went down. If the app wasn’t working, my person doing communications was like, I’m not sure if I should send a message out. I don’t really know how long it’s going to be gone, or what’s even going on, or what’s going on. I was like, doesn’t matter. Send the communication. Hey, the apps down, we don’t know, but we’re gonna let you know ASAP. We’re on it, right? That goes. And we were scared. They were scared to send that, but the response we got was like, Hey, we’re rooting for you guys. We love you guys. Thanks. We know you figure it out. And I feel like when people don’t know the answer, they almost kind of white lie or like don’t even come forth. But if you just always have a culture of like, I’m going to communicate what I know and the fact that it’s important, and I’m going to communicate that I don’t know, but I’m figuring it out, and that just builds trust. When you tell the truth, when you don’t have to, then people will default to trusting you, and you will be a believable person, which is very important if you want them to listen to you for anything. So dude, that value came from old relationship I used to have. We were trying to get COVID tests, and the person I was with called the doctor’s office said, Hey, we’re running late because of traffic. And I looked over, I’m like, It’s Sunday morning during COVID, there’s no traffic. They know you’re lying. Why would you do that? Why wouldn’t you just say I’m so sorry I’m late. We slept in, and it made me guess, like, what are they lying to me about if they’re saying these white lies that are really harmless and meaning meaningless. But it always just bugged me. I’m like, what are they yet? What are they lying to me about? How would I ever know if they were so that just personal pet peeve, but that’s why it’s my company value.

Brad Weimert 38:07
Yeah. Well, I also think that a reality of somebody that has a habit of lying, whether whatever type of lie is, if you were lying to other people, you’re probably lying to yourself too. And I think that the lack of self awareness is much more prevalent with somebody that is just accustomed to spitting out something that isn’t accurate.

David Lecko 38:29
Man, that’s that’s pretty deep, and that’s probably true.

Brad Weimert 38:33
Well, you know, if I if I catch myself saying something that is a little off, and usually it happens when I repeat something a lot, and sort of after repeating and repeating and repeating, I kind of think about the marketing message of it, and I’m like, that doesn’t sound great, and then it sort of permeates. And eventually I catch myself and I’m like, nope, cross the line there. That’s not true. One of my favorite things in general is when I when that happens, and somebody’s like, really? I’m like no and because I want to call myself on it immediately, so that I don’t get in a situation where I’m operating through the lens of delusion, right? Because that’s much more damaging than that white lie,

Unknown Speaker 39:16
yeah, and that’s true. One of the,

Brad Weimert 39:18
one of the, through line here, through these two examples that you gave, is articulating to people how to do the thing, how to live the value, how to have the tough conversation. Do you put time into the explanation of the core values, training people on the core values, hiring through that lens. Where else do they show up in your culture?

David Lecko 39:42
So I actually keep a note. One of the things that I want to be mindful of is not be jumping on my team’s ass with ticky tacky stuff. So if there’s something I noticed they did that I didn’t like or feel was the best way I put it in a note, and I have one. On ones with them every Monday. That’s the time when the one on one comes up. They’re like, Hey, do you have anything normally, you’re like, No, I don’t know, but now I’ve got a whole list of weekly things that I’m like, Hey, I’d love it if you did this better. I love it if you did that better. And recently, there was, it’s not even a company value, but every team almost had an example in the same two week period where they were struggling with something, and they didn’t tell me until it was such a big problem that now it’s like a bigger problem to solve. And one was like, a vendor that we paid for marketing half a million dollar spend, and the year is almost over, and we I realized they, like, didn’t deliver on, like, $200,000 worth of the spend. And so I didn’t hear about it till last week, but my team member was struggling with it since July, and so it was not their fault. First of all, everything’s your fault, if you’re the CEO. I was like, obviously I haven’t trained on this. I need to train on this, so my team feels comfortable. They’re thinking, I’m going to help solve this myself so it doesn’t bother David, and then I’m doing a great job by taking care of stuff. But really, I knew the CEO of this other vendor company. If I would have known, I could have just texted him, I’m sure wasn’t even on his radar. I explained I was like, sometimes I’ll interview my customers this podcast, and instead of going through support, they’ll text me. And I appreciate it, because my support thought it wasn’t an issue, but I could see, oh, it is. And so that teaches me, I need to go train my support team on this particular issue. I’m so thankful that I got that text from them. So I was like, my team needs to see me as a tool. If they are struggling with something for more than a week, they need to bring it to my attention, not necessarily that I need to do anything, but I at least need to know, and that way I can be a useful tool for when I’m joining them on conversations with partners, etc. And so that was just like a recent thing, and that’s how I handle not bugging them with micromanaging feedback all week, but have a cadence of like, Hey, this is stuff we could do better. Or, Hey, I’d like to know about this stuff so I can help clear roadblocks. You know, as a leader, my job is to promote my employees and clear roadblocks. I can’t clear them if I don’t know about them. So that’s an that’s another way I kind of facilitate what I want to train on. And of course, we had some Kahoot questions on it as well so the rest of the company could understand that.

Brad Weimert 42:18
Dig it. So avoid the ticky tacky throughout the week. Avoid all the little tiny critiques throughout the week. The the the thing that I hear a bunch of entrepreneurs saying in the background right now is, okay, well, then how do you avoid just dumping a whole bunch of shit on them during your one on one?

David Lecko 42:37
Oh, okay, um, I feel like it doesn’t feel like a dumping of shit, because we also have carved out time in the Fun Friday meeting for employee like and customer highlights, so we probably recognize like 20 positive things on a weekly routine basis. So it doesn’t, it doesn’t feel like that. I don’t think have you know, like, basically, that’s the thing, is, you carve out time to recognize all the positive stuff as well on a routine basis. So

Brad Weimert 43:07
throughout the week, are you spending your time gathering those positive things as well? Or is leadership? Is that a concerted effort?

David Lecko 43:14
So I so on the Fun Friday meeting, we kind of crowd source it as well. So I’ll call for people to recognize others. We also use a software called bucket list, and it’s a bucket list rewards. And so they have the ability to send each other $20 my team can send $20 to each other, and it’s public. They’re like, hey, AJ did an awesome job, going above and beyond his job duties. He showed the company value of taking ownership because he stayed 30 minutes later on our webinar last night until everyone’s questions were answered. That was awesome. Nobody asked him to do that. It was more than expected. 20 bucks for AJ, and then everyone’s like, awesome. AJ, it’s really inspiring for everyone else to see that. So I’ll read review what those were sent from the past week. For example, one year, my team gave each other 15,000 total dollars doing these bucket list stuff. But dude, it was worth it, because it’s just so exciting and and then when you do have something constructive, doesn’t feel like you’re being beat down, right? And you don’t want to give constructive stuff in person. All that positive stuff is done in front of everyone, so it just, it’s a great feeling, and that’s how I help balance it out so the constructive stuff doesn’t feel bad. I think another thing is literally like, and I have built a great relationship with the guy who used to service my car, and he’s quit his job and started doing real estate investing now, actually, which is great, but, man, I just I didn’t feel good about the way something was handled. And, dude, there’s a lot of places I could service my car. I had the phone call, and I was like, I want you to take this the right way. I’m calling you because, you know, I actually care about you. I think you’re a. Awful person. You’ve done so many good things in the past, and if I didn’t care about you, I would blow this off. I’d take my car somewhere else, or I just wouldn’t tell you it’s wasted time knowing that this is to help, because I just genuinely think this is this would be helpful. Hey, man, the way you did this thing was total bullshit. So I think phrasing things with that context before just laying out what you didn’t like is helpful, because it is true, I’m busy. People are busy. If you didn’t care, you wouldn’t tell them. So yep,

Brad Weimert 45:31
but it doesn’t feel that way if you just front load the conversation with the negative, yeah, yes, yeah, yeah, that’s great, man. So something like bucket the bucket list rewards, yeah, you’re giving your team the ability to just give somebody else on the team 20 bucks for doing something dope. Yeah, a brand new entrepreneur can’t run the risk of their team spending 15 grand and building some alliances between each other to throw money back and forth. At what point did you feel comfortable implementing a tool like that where it was okay to burn 15 grand a year in the name of a better culture? I

David Lecko 46:10
mean, I think we implemented that we had 40 employees. So 15 grand divided by 40 employees is like 200 bucks a person, or something like that. So it’s not that much. But I just thought it was cool. When I told it all up, I was like, Damn, that’s cool. I did have to train my team. This is not for recognizing doing your job. Everyone should be doing your job. I know you guys love each other and you want to give each other my money to each other. That’s just not the whole point. So I had to lay down some more guidelines about you use this when somebody does something above and beyond that’s inspiring, that deserves recognition, that’s we want to use this, right? And you it’s it’s almost just as effective, even without the dollar amount. Because who cares what’s awesome is the acknowledgement, right? People don’t need a $20 gift card. It’s nice, but really the acknowledgement is often what’s so important and often missed.

Brad Weimert 47:02
Yeah, that’s great, man. I love that. Do you run the company through any kind of operational system? There are a few different operational frameworks to run companies like, oh

David Lecko 47:19
yeah. We got traction back here. So I implemented quite a few things from traction, not the whole thing in completion, but we do our weekly meeting using the traction meeting agenda with my direct reports and other other other team direct reports. And so, I mean, that’s that’s a huge part of our operating system that we use. We, didn’t do the rocks and stuff because we did OKRs, which is more of a tech company goal setting framework, and then we just modified that because it felt too heavy, and we just really boiled it down to even simpler version of OKRs. And that’s just evolved over time. The first time we did OKRs, it was so inspiring. It was so great. As the years went on, it felt like less great, so we simplified, so we just that’s like, the hard thing is, obviously traction is like a proven framework, right? It’s a thing. It exists. 1000s of companies use it, and it works well. But I think one of the things my founder and I co own deal machine with somebody 50% right? So it’s both of our opinions that matter. Is just put he pushes me a little more to modify and tweak things to fit our our situation, rather than, like blindly adopting thing verbatim. That’s just, that’s just something that’s worked well for us. So that’s, uh, that’s kind of the version of our framework that we use to run our company. I

Brad Weimert 48:46
love that. So traction is EOS entrepreneur operating system. I just, I was actually just talking to somebody about this. Of the people I probably know, I don’t know. I know tons of people that use EOS as a framework. I know zero that use it exactly as it’s prescribed. 100% of the people I know have modified in some capacity to make it their own. And I think in some cases, that’s very good. In some cases, they fucked it all up because they didn’t follow it to a T, right?

David Lecko 49:21
Is that a cat? Oh yeah, this is my cat, George.

Brad Weimert 49:26
What’s up? George? I’m sort of afraid the cats are gonna kill me in my sleep.

David Lecko 49:30
He’s very disciplined. I teed him. I taught him how to use the toilet so he sits on the toilet seat, and then I’ve got an auto flusher that flushes every three hours to keep it fresh for him, but it’s getting less litter because of that, and it’s a good party trick. People love to do it. George loves showing off when people come over. It’s

Brad Weimert 49:47
a great party trick. How’d you teach them to do that?

David Lecko 49:52
There’s a kid on Amazon, and it takes six weeks. You basically put the litter on the toilet, cut a hole out in the middle, make the hole bigger every couple weeks until the. Is just on the ring, so he’s got to end up perching on the ring to go in the toilet, and eventually just take the lure away, and he knows to go on the toilet.

Brad Weimert 50:08
That’s awesome. A dog would probably fall in.

David Lecko 50:12
I have not seen dogs be trained to do that, but it’s a cat thing. Pretty cool.

Brad Weimert 50:18
I love that. Man, that’s awesome. Well, I appreciate you carving on time. Man, it’s great to hear about the business. I think, like, there are a lot of fun frameworks within that. And I you know, the the real estate side of things, I guess before we wrap, I want to dig into the real estate side of things a little bit, because deal machine as a business app driven serving a dedicated market. Your content is around real estate investing, but I love learning the structure of the business itself and growing it. It is, it is hard to launch an app and get traction, but it sounds like you launched an app that had a lot of value, and that was the beginning of what allowed it to get traction. It

David Lecko 51:03
was helping people do something that they were already doing easier. That’s why it actually worked well. And it did take two years of work without pay first of all, as well. So it was like, I don’t want to make it seem like an overnight success,

Brad Weimert 51:16
yeah, for sure. But it started because you were doing real estate. So did you pump the brakes on real estate investment during that period of time? Did you keep doing that? And how does real estate investment fit into your world? Now, it sounds like you got back into it, because you said, What, 19 properties in portfolio, seven in the last year.

David Lecko 51:33
Yeah, I did, like four. I did nine deals in the first, like four years. And while the app was something I was using and also kind of trying to get other people to know about it too. But I was doing real estate, so those properties appreciated a million dollars in the four years where I stopped doing it to focus on deal machine. That’s when I looked back. I was like, Man, I should get some more of these properties. So, yep, did it nine deals, took a break, came back to it, and still wanting to do about seven to 10 deals per year.

Brad Weimert 52:02
Love it. Why single family, home versus multi family or something else?

David Lecko 52:09
I am in business to provide financial freedom, and I can conquer single families alone, and if I do multi family, I have to go invest and have partners. And to me, that’s not what freedom is. I don’t want to have to worry about someone else’s opinion. A lot of times, being a business partner is even more serious than being married. So I just want to do stuff that I know well, that works well, and double down on that. That’s why I still do this new family.

Brad Weimert 52:35
Dig it. And for clarity, there’s kind of inside the world of multi family. You’ve got small multi family, like a duplex, or, you know, three or a quad or something, and then you have, probably what you’re talking about, which is large multi family, which would be like an apartment building,

David Lecko 52:49
yeah, yeah. I don’t think the duplex in the triplex is like a great play, because the price per unit is going to go down, right? So people always like, that’s like, hey, three units under one roof. But the type of person that wants to live in one of those in Indianapolis is like a lower quality tenant, which means more complaints, more fraud, more inability to probably not pay and get evicted. And since I am self managing and want a lifestyle of freedom, I want tenants that are reliable, easy to work with. They probably like a B class property, so it’s like, nicer than rental grade, but not too nice to where they don’t want to rent it they’d rather buy so that’s kind of my sweet spot, three bedroom, two bath with a yard. So they the type of person that wants a nice apartment, but they want a yard for their pet. So it’s just a sweet spot. I just wanted to focus in on that so it’s easier to manage

Brad Weimert 53:43
what what’s the biggest mistake you’ve made from a real estate investment perspective? Yeah,

David Lecko 53:47
that’s really struggled with my first contractor, because I paid him upfront and then he didn’t complete the work. So I just learned real quick, you have to make sure your incentives are aligned. And so pay him a start fee, pay him something as stuff progresses, and then pay him money’s done.

Brad Weimert 54:04
What’s the biggest mistake you’ve made while growing deal machine,

David Lecko 54:09
man, when I started asking for feedback, I had multiple people say, David, you make me feel stupid when I suggest ideas. And that was really hard to hear, because I encouraged everyone to do this during a public forum. So my whole company heard that, right? So how I responded was very important, but I genuinely took the feedback and I asked for more clarity. I was like, What do you mean? Exactly? When do I do this? So I fully understand and what was happening was, I’ve been working on deal machine for eight years. They were hired to come in and do a job two years ago. So they would suggest something I already tried four years ago, and I’d say, no, no, that won’t work. How about what other ideas you guys have? And that’d make them feel stupid in front of people. So what I really needed to say was, Hey, man, or hey, you know, that’s a really good idea. I actually had that idea two years ago when I tried it, this thing happened. I. It’s possible that things have changed. Now maybe we should try that again. Just wanted to let you have that context so that you can decide what the best solution is, and I’d like you to tell me what you think the best solution is, and I’m just want to provide context. So the big mistake was making people feel stupid, and so I had to change the way I communicate.

Unknown Speaker 55:24
You are.

Brad Weimert 55:26
You’re an interesting character because you’ve got a whole bunch of lessons that you can cite a direct source for or a direct framework that you’re using. What are the most impactful books that you’ve read that might be helpful to entrepreneurs?

David Lecko 55:40
I still think the great CEO within by Matt moccari is what I mentioned earlier, is awesome. That hard conversation thing I mentioned, that’s just like three pages of the book. I mean, it’s a beautiful book. I think it’s 100 pages. It’s filled with stuff like that. It’s super worthwhile. And that’d be my number one recommendation. Actually, it’s probably when you say entrepreneur, it’s probably not valid until you have, like, a team, right? So that’s it’s all about being the CEO. So, but want to mention that for people who listen to this, you have a team for sure.

Brad Weimert 56:11
Yeah, I think that the specifically for, I don’t know. I think at different phases you need to hear different things. And I really lean in the direction of just in time information, rather than just in case information. And I think that there, there is value in the just in case information, because sometimes studying things that are outside of your current scope will open your mind to different possibilities. But if you’re trying to learn lessons that you can apply right now, the this, you know, talking to people that are just a level above you or close to where you are, are much better to learn from than somebody that’s six stages ahead of you, because they’re thinking about different things, right,

Speaker 1 56:51
right? Yeah, I agree any

Brad Weimert 56:55
podcasts or YouTube channels you follow and pay attention to.

David Lecko 57:00
Dan Martell is a private coach of mine for years, and love that he’s got a great social media following, and I would check out his podcast called The Martel method.

Brad Weimert 57:09
Yeah, Martel is a he’s a buddy of mine. He’s been on the beyond a million show, and I, I go on a snowboarding trip with him every year. Cool. He must be pretty good at snowboarding. He’s good, yeah, the one of the criteria, one of the few criteria of being on the trip is that you have to be comfortable jumping off a 10 foot cliff. So yeah, there’s, there’s at least that, yep, love it. Well, David, let go. It’s been great, man. I appreciate you carving out time. Where do you want to point people?

David Lecko 57:39
Yeah, I mean, deal machine. My Instagram is D let go as well. And if you guys want, let’s see. I’m trying to think of what a great gift would be for somebody that just heard that. So I’ll send you guys my 10 leadership frameworks. If you guys DM me the word framework, and that would be the place I’d go. Instagram deal. Echo,

Brad Weimert 58:03
dope. David, thanks so much, man. It’s been great. Thanks,

David Lecko 58:06
Brad, appreciate it.

Brad Weimert 58:08
All right, that’s a wrap for this episode. I’m supposed to tell you that you should subscribe to the show and you should leave a review. I really want you to leave a review, though, because it makes like a radical difference in the algorithm and getting other people to be able to see the show. So can you please go leave a review? It’ll take you like 30 seconds. Also, if you want more episodes that are amazing, you can check out the full length video versions at beyond a million.com, or youtube.com. Forward slash at beyond a million. You won’t regret it.