Fred Koury: Sales, Smarts, and Service
Fred Koury started his business career by subcontracting his weekly chores to kids in the neighborhood. Fast forward to today and his list of accomplishments and business success stories have become extensive. Fred Koury is the President and CEO of Smart Business Network, a multi-faceted company serving the business community nationwide. Listen as he freely shares on how he makes big decisions, on the importance of mentoring, and many valuable life lessons regarding the intersection of faith and ethics while running a company.
Excerpt from The "Mary Gloster" by Rudyard Kipling (1894)
“They copied all they could follow
but they couldn't copy my mind
so I left them sweating and stealing
a year and a half behind.”
Dave Douglas: Hi. Welcome to another episode of Up2. Eight years ago, Up2 started as a live event series showcasing leaders who are as humble as they are successful. The humility piece is extremely important as we identify leaders who can inspire others. We try to focus our interviews on the non-business aspects of their lives, and in doing so have found that there's a real thirst to explore their hearts and minds in atypical ways.
Dave Douglas: Our host as always is Adam Kaufman and our guest today is Fred Koury. He's the founder of Smart Business Network, which is both a magazine and a live event series that caters to and is a tremendous resource to middle market executives, venture capitalists, entrepreneurs, and so on. Fred is involved in many other aspects of business as well, and we'll hear more about that from our host, Adam Kaufman, in just a moment. Fred Koury will talk about his family and about growing up. We'll learn how he has navigated the timing of opportunities that he's been presented with and what his process is for thoughtfully weighing those opportunities. Adam and Fred will talk about mentorship and the importance of real caring for people even in the context of business. Fred will share one of favorite poems with us and talk about the role that faith plays in his life, both in personal ways and business endeavors. Toward the end of the interview, we'll hear a real story of when Fred decided to humble himself in order to resolve a difficult business situation. Finally, Fred will give his younger self some advice.
Dave Douglas: We're glad you've joined us hear on the Up2 Podcast. We'll be right back.
Adam Kaufman: Hello. My name is Adam Kaufman and I'm thankful you're joining us today on the Up2 Podcast. I want to tell you about a group I am grateful for and that is Town Hall, Cleveland's most popular restaurant and the only place my wife tells me that she can eat every meal: breakfast, lunch, and dinner. Town Hall was the first all non-GMO restaurant in the US a few years ago, and they're now expanding into Columbus, Ohio, soon. I'm very selective about who we choose to partner with for this podcast, and it was with open arms that I embraced the idea of partnering with Bobby George and Town Hall. To learn more about what they're up to, you can visit townhallohiocity.com.
Dave Douglas: Welcome back. You're listening to the Up2 Podcast. Here's your host, Adam Kaufman.
Adam Kaufman: Our guest today is entrepreneur Fred Koury. Fred founded Smart Business Network in 1989 with a single business magazine in Cleveland, Ohio. He has since built the company into a national multimedia and events business focused on middle market business owners and executives. The company's diverse operations include monthly management journals and sbnonline.com, which features more than 20,000 management and leadership articles on such successful CEOs as Jack Welch, Michael Dell, Ted Turner, and Steve Wozniak.
Adam Kaufman: After building a reputation as a leading provider of CEO to CEO content, SBN launched the Smart Business Dealmakers Institute to provide MNA education and networking for middle market business owners. The Institute provides ongoing coverage of dealmaking activity in cities throughout the United States. Each year, that coverage culminates in a Smart Business Dealmakers Conference, attended by hundreds of prominent entrepreneurs, investors, and advisors involved in local mergers and acquisitions. I've attended these conferences. They're terrific. The events share best practices on raising capital and every aspect of buying, growing, or selling a company.
Adam Kaufman: On the person side, Fred has served on numerous boards including major organizations like the United Way, Cuyahoga Community College Foundation, the National Conference for Community and Justice, and Saint George Antiochian Orthodox Church. He also serves on a regional bank board and he's a graduate of Bowling Green State University, having also done graduate work at Ohio State University. Fred is a husband and father of two young men.
Adam Kaufman: Fred Koury, welcome to Up2.
Fred Koury: Thank you, Adam. Thank you for having me on the podcast this morning.
Adam Kaufman: What have you been up to?
Fred Koury: A lot of exciting things.
Adam Kaufman: What are you most excited about right now as we kick off this new year?
Fred Koury: I'm excited about the economy right now. For our business, we're in the process of expanding our Dealmakers Conference across the country and building a national network of middle market people interested in MNA. The market is so hot right now with the economy. There's a trillion dollars on the sidelines and people are looking at doing deals. We're right in the middle of it.
Adam Kaufman: MNA: mergers and acquisitions. Are those the type of people who come to this Dealmakers Conference? Who attends?
Fred Koury: Correct. We do something called the Smart Business Dealmakers Conference. It brings together 400 to 500 people around the MNA space.
Adam Kaufman: Bankers, attorneys, fundraisers.
Fred Koury: Exactly. Our goal is to have about a third presidents, owners, and CEOs, and another third MNA advisors, and another third from the private equity, venture capital space for a daylong event around learning best practices. We have 40 to 50 speakers of people that have bought and sold companies and they'll share their experiences. This is a great place to bring people together, to meet one another, and to get educated on the whole process of buying and selling a company.
Adam Kaufman: I know we were kind enough to have me participate in one of your early Dealmakers events and I interviewed one of the earliest employees of Google, and I was so impressed with the caliber of people there. The number of people was impressive, but there was a large number of very successful, very busy people who were taking almost a full day out of their busy lives to be at your conference. You must be delivering some sort of good value.
Fred Koury: I think we have a targeted niche. Our focus is the middle market. We describe that as companies that have 10 to 500 million in revenues. They represent about 10% of the marketplace but about 60% of the purchasing power. It's an audience that's very active. They're wheeling and dealing, so to speak.
Adam Kaufman: Dealmakers.
Fred Koury: We're right at the heart of it.
Adam Kaufman: We're going to delve a lot into your career, but if it's okay with you I'd like to set the stage for our listeners a bit and learn more about you. One of my mentors taught me that we're all born into somebody else's story. Let's back up a bit. Whose story were you born into?
Fred Koury: I come from a Lebanese background. I was born in Lorain, Ohio: industrial town. Great family. My father was and still is an attorney. My mother was a homemaker with four siblings in the family. Very blue collar town. It was all about relationships.
Adam Kaufman: Where were you in the siblings? Oldest? Youngest?
Fred Koury: Second oldest in the family. Grew up in this blue collar town and from a very early age learned what it was like to operate on the streets, so to speak.
Adam Kaufman: Really? I want to delve into that a bit. Your mother was Miss Lebanon. Your father, like you said, a successful attorney: respected political figure as well. Does that mean you were a picture-perfect student growing up?
Fred Koury: I would say I was a student who had a very short attention span. I was always interested in not so much about learning from a book standpoint but more of wanting to do something. I was very active and thus at a very early age became entrepreneurial, so to speak.
Adam Kaufman: I was going to ask that: were there were some early signs that you might want to do your own thing or run your own business some day? Any early projects that shed light on that?
Fred Koury: A couple of cute stories. My father used to pay me 10 dollars a week to cut the grass. We had a riding lawnmower. As soon as he'd leave, I'd pay the neighbor five dollars to cut the grass and I'd drink an ice tea on the porch.
Adam Kaufman: How old were you then?
Fred Koury: About 11, 12 years old at the time.
Adam Kaufman: That's spectacular.
Fred Koury: Then I'd tie a wagon to the back of that lawnmower and we'd go to the discount store and buy a lot of gum and candy. I'd have my sister sit in the wagon and I'd drive the lawnmower around the block and she would be selling stuff out of the back of that. People would be lined up to buy stuff and we'd make profit doing that. I'd give my sister a bit of money.
Adam Kaufman: That's definitely an early indication that you were going to be creatively thinking of your own ways to make a few dollars.
Fred Koury: I was interested in buying and selling.
Adam Kaufman: Then you got into high school and college. Were you continuing to experiment with how to make money?
Fred Koury: Yes. I was a finance major in college. I minored in accounting. I wasn't really sure what I was going to do. So many kids knew exactly what they were going to do, which I envied. This one was going to go to law school, this one was going to go med school, this one was going to get a job in sales. As my senior year was running out of time, I had to buy some more time. The next obvious step is to try to go to law school, because my father was a lawyer.
Adam Kaufman: Stay in school longer.
Fred Koury: I made a decision to take the LSAT test and applied to law school. Unfortunately, I applied too late. I had to sit out a year. So I went to Ohio State and took some classes there. While I was in classes there, my brother-in-law who was in the seafood business in Boston asked me if I would sell for him part-time. While I was in school, I started selling for him part-time. I was selling fish.
Adam Kaufman: You were selling in Boston or Ohio?
Fred Koury: I was selling in Ohio.
Adam Kaufman: While you were a student?
Fred Koury: Exactly. I was selling to grocery store chains that were in Columbus, Ohio. I landed a couple of big accounts. I didn't realize at the time, but I was a salesman. Even though I was a finance major, I was a salesman.
Adam Kaufman: Well, Lebanese. We're Phoenecian. We're marketers.
Fred Koury: Yes, I think that helps. I never had a problem with no. No to me was that they just weren't sold yet. I had to keep selling them.
Fred Koury: So I landed an account and my brother-in-law flew in and offered me a full-time job. I quit school... I never went to law school... and ended up going into business with him.
Adam Kaufman: You're like 20 at this point?
Fred Koury: I was about 22. This was after college. I started selling fish. I wholesaled seafood to grocery store chains across the country. We went from two states to about 30 states over the next four years. I headed sales for the company.
Adam Kaufman: Forgive me for interrupting, but was that a big decision, to leave school and go full-bore into working full-time?
Fred Koury: It was. I made a couple of commission checks and I saw it as more of a quicker way to get to where I was trying to get to versus going to law school and studying for three more years and then taking the bar exam. I decided to take a risk. At the time my father concerned as to whether I was making the right decision or not, but once I made that decision they supported it. I became very good at it because I didn't know what I didn't know at the time.
Adam Kaufman: Naivety is good sometimes.
Fred Koury: The only problem is that never liked selling fish. Even though I did it for four years, I reluctantly did it. The money kept me there and the loyalty to my brother-in-law, but eventually I didn't want to sell it any more. I was ready to take a leap of faith and try something else.
Adam Kaufman: Four years, though. That's amazing that you were good at something and you did it for so long but you didn't like it.
Fred Koury: Yes.
Adam Kaufman: A lot of our listeners are in jobs they don't love and they sometimes send me notes about how they get encouragement. What would you tell someone who's in a role and they have ideas like you had to go off and do your own thing? What would you tell those people who are considering taking the risk?
Fred Koury: I would you have to take that step of faith. I did. I remember there was never a good time to do it.
Adam Kaufman: Never a convenient time, yeah.
Fred Koury: I'm a timing person. I always like to wait for the right timing, but in this particular case there wasn't a good time. I had to take a step of faith. I decided that this was the time to do it. Even though I didn't have anything else to take a step of faith into, I knew that it would be better... I couldn't look for something while I had something else going on.
Adam Kaufman: And the added dynamic of it involving family, so you had to tell your brother-in-law, "I'm going to leave now in spite of it going well." "What are you going to do next, brother-in-law?" "I'm not sure yet," I guess you said.
Fred Koury: That was very difficult because I was successful and it wasn't an easy job to replace. I did give him a six month notice and tried to give him plenty of time to replace me.
Adam Kaufman: And then in that six month period, is that when you came up with your idea of what to start first? Or did it take a lot of exploration to analyze the marketplace and come up with an idea?
Fred Koury: I had a fraternity brother that was working for me in the fish business at the time. He put his notice in six months earlier. He wanted to start a boating magazine. I helped back him in that magazine. I was a silent partner with him and I would help sell the advertising once a month. I had that business going on the side. We had this publishing business.
Fred Koury: The problem with that business is that the boating magazine was too small of a niche. I remember it rained every day that summer, the luxury tax hit... It wasn't the right niche. We knew that was coming to an end. We met another gentleman and the three of us founded SBN... Smart Business... today.
Adam Kaufman: When you started the boating magazine, was that about a passion for boating or because you trusted this fraternity brother?
Fred Koury: I was always intrigued with the publishing industry.
Adam Kaufman: So you knew you liked publishing, which makes sense because you've now been doing it for 30 years.
Fred Koury: Yes. My father was involved with the Horowitz family, a very well known family in the media industry. I just remember that whenever I was around him he always said, "If there's a way to get into this industry it's a great industry to get into." I saw that as a way for me to pivot into this industry.
Adam Kaufman: Did you leave on your father's exposure with his colleagues... the Horowitzs and others... as you started learning this new industry? Or were you just off to the races at that point doing your own thing?
Fred Koury: Just off to the races. We created this business magazine and the concept behind it was to tell people stories: hometown heroes. Weekly business journals were already out in the marketplace, but they were more transactional news. Our niche was, "Let's tell the story of the entrepreneur who's running the company and what kind of culture they have and what their thought process is behind doing mergers and acquisitions? What do they think about debt?" That was the thought process behind the publication that we started.
Adam Kaufman: I was going to ask you why you focused on small business at the start. You've kind of already answered that. I hadn't thought about that before. Here we are telling stories in this new format... digital format of podcasting... long form conversation that's become so popular: this whole industry has. People do love telling their story and others like hearing stories and we can learn from them. By the way, thank you for telling your story a bit today. Is this your first podcast?
Fred Koury: Yes, it is.
Adam Kaufman: Okay. You comfortable? You doing okay?
Fred Koury: Sure.
Adam Kaufman: Okay. So you started first with Small Business. It was a print magazine. It was in one city: Cleveland. Then you started expanding first in Ohio and then beyond.
Fred Koury: Yes. The reason why we called it Smart Business News at the time when we founded the company 30 years ago was because 97% of the companies out there employed 50 workers or less. That's when deregulation was hitting and all these small businesses were starting up. It was a hot niche at the time. Over the next four to five years, we had started a number of different publications.
Adam Kaufman: You identified a marketplace opportunity at this point. There's a bit more science involved.
Fred Koury: It was a great niche at the time. What we ended up seeing happening over the course of the five years is that nine out of 10 of those businesses would go out of business and that they were becoming very hard to serve and collect payments. We identified the middle market as the growth market that people weren't paying that much attention.
Adam Kaufman: A little more sustainable businesses have scaled up.
Fred Koury: Yes. By 1994 we had pivoted into that middle market audience: '94, '95. At that time I bought both of my partners out. That was about 25 years ago. We repositioned the company to focus on the middle market.
Adam Kaufman: I've always been impressed with how you seem to be continually evaluating if you're in the right business, in the right sector, using the latest technology. Even 25 years ago, you were transitioning away from small business to middle market. More recently... maybe about 10 years ago, maybe less... you said, "Adam, I'm going to buy a video company." I was so wrong. I said, "Fred, CEOs aren't going to watch a video. Busy, affluent entrepreneurs aren't going to watch a video." This is pre-YouTube. I was totally wrong. You were totally right. Do you remember when we talked about this?
Fred Koury: I do.
Adam Kaufman: Thanks for not reminding me about it too often. Where do you think that innovation in you comes from? That you're always evaluating, whether it's 25 years ago or getting into video or the new things with the Dealmakers Conference. You're always paranoid about "Am I missing the next big thing?" or "Do I have an opportunity for the next big thing?"
Fred Koury: When I took that step of faith back in 1989 that I was given an opportunity, and when we're given an opportunity we need to make the most of it. My drive has always come from fear of failure and survival. When you're in that mentality that you can't fail... that failing is not an option... and that you have to succeed at all costs and that you're in that survival mode mentality, it has you always looking ahead.
Adam Kaufman: How do you actually look ahead? Are you reading certain publications? Do you attend conferences outside your industry? I know you believe a lot in mentors. I want to talk about that a bit. You have advisors that you get help from. But how do you stir the pot of your own innovative thinking?
Fred Koury: There was a poem by Rudyard Kipling that said-
Adam Kaufman: You're breaking out poetry today? That's awesome.
Fred Koury: "They followed all they could follow but they couldn't follow my mind. I left them sweating and stealing miles and miles behind." Don't quote me exactly on that. It means that you can only learn so much, but then you have to continue to take the step ahead of where you're learning from people. I get the opportunity to be surrounded by some of the best and brightest minds. I get to learn and understand best practices about the people that we're continually writing about in our publications. I get a chance to meet wonderful. We're all given a different lot in life. There's been times I wished, "Hey, I don't want to be in this industry. I wish I was in this industry over here. I wish I had a software company. I wish I was doing something over here."
Adam Kaufman: I remember one time you thought about dipping into the private equity world and starting your own fund.
Fred Koury: I did. That's another consideration. At the end of the day, it's important to stay in your lane and stay in what you know. I still have the opportunity to invest in funds like that, but at the end I stayed in what I know and what I know is content.
Adam Kaufman: One of my mentors keeps reminding me to grow where your roots are. That's what you decided to do when not doing the PE fund, but instead growing your publication and media business. It's still a talent. You're so humble, so you're not going to say this is a talent of yours, but it clearly is because you can take the ideas from the other people... you have exposure to these sharp leaders... but you still have to filter these ideas and decide which ones to pursue. Correct?
Fred Koury: Correct.
Adam Kaufman: How do you think that skill can be improved upon? Have you ever taken someone's advice that was bad advice? If so, did you learn from that?
Fred Koury: Sure. We all make mistakes. I think I've made a lot of mistakes. But one of things that I try to do now is... Before, I would use my gut a lot to make decisions. Now what I tend to do is do the pros and cons on a white board. If I'm thinking about doing something, I'll definitely do the pros and cons on the different scenarios and think things through before acting on something with my gut. My gut's gotten me into trouble now and then. Also, wisdom comes from an abundance of councilors.
Adam Kaufman: I was going to say that.
Fred Koury: That's important as well: to seek out... We should each have that core group of people, which I'm sure we do, around us that we can trust and open up to and get their advice. A lot of times we don't like what they have to say. You brought up the fund. I wanted to create a fund of funds. I was excited about creating one. One day my wife and I went to talk to somebody that was doing a fund, and the first thing he said is, "How much time do you plan on spending on this business?" I said, "A lot of my time but not all my time. I have an existing company." He said, "When you take money from family and friends you better spend every second of your waking time on that business. I have to see the people that I take money from on the 50 yard line at college football games. I see it at family holidays." As soon as he said that comment, my wife looked over at me and she knew that I wasn't able to do that.
Fred Koury: So I got my answer and it was confirmed with her, because she didn't think I should be involved with that to begin with. I was very disappointed at the time. Even though I didn't want to hear that, it was good that wisdom comes from an abundance of councilors: that I was able to hear truth being spoken to me at that time.
Adam Kaufman: Two things I take away from that are, one, great advice. Our mutual friend Eric Chen tells me the same thing. He's the founder of a Paolo Alto-based venture fund that he feels he needs to think about all day every day because it's a major responsibility to take other people's hard earned money and put it into high risk investing. My take away is, one, good advice, but two, you showed humility by asking people what they think. A lot of successful CEOs... I know many... do well on their one line of work, whatever their industry is, whatever widget they're making, and they think... usually wrongly... that therefore they know how to distribute other people's money in other industries because they've been successful in their one business. Have you met people like that?
Fred Koury: Sure. I think I've done that as well: made decisions in a vacuum that have gotten me in trouble. I've tried to learn from that over time as I've grown and gotten older: to make sure that avoid knee-jerk reactions any more.
Dave Douglas: You're listening to the Up2 Podcast. We'll be right back.
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Dave Douglas: Welcome back. You're listening to the Up2 Podcast with Adam Kaufman. Today's guest, Fred Koury.
Adam Kaufman: I love events. Going back to your Dealmakers Conference, there seems to be something resonating because this has grown quickly in a lot of cities... not just in the mid west either... where you're selling out these massive conferences, bringing in terrific content. What do you think is going well? Do you spend time thinking about it? Or are you just operationally getting them all done? I wonder big picture, what's resonating with the attendees that has led to this success?
Fred Koury: I think from a big picture standpoint our goal is build up the Smart Business Dealmakers Institute.
Adam Kaufman: Smart Business Dealmakers Institute. What's that going to be?
Fred Koury: That's building a network of middle market CEOs that are interesting in MNA, not only on a local basis but a national basis. What we do with these events... When we go to a city, we don't just bring an event. We start off by bringing a newsletter.
Adam Kaufman: Digital, right?
Fred Koury: It's a digital newsletter to the MNA community. What we do is track deal flow on a weekly basis of what's bought and sold in the local marketplace. We feature different MNA advisors or experts or players in that space. We're bringing that local content knowledge there.
Fred Koury: In addition to that, we're also putting on this event. We're bringing the local dealmakers together for a one day event. Then we're connecting those people after the event with each other so it's go evergreen content.
Adam Kaufman: It keeps going.
Fred Koury: Yeah. We don't want it to just be a one and done.
Adam Kaufman: So you're in Chicago, St. Louis, Philadelphia... I can't keep track of all the expanding markets you're in.
Fred Koury: Yes. This year we'll be in 12 markets with the Smart Business Dealmakers: Cleveland, Columbus, Pittsburgh, Detroit, Philly, Chicago, Charlotte, St. Louis, Nashville, Baltimore, Kansas, and the twelfth one has escaped me. I think Milwaukee. The following year we'll be opening up six more. Our goal is to get into 25 markets.
Adam Kaufman: 12 plus six more... So 50% growth in one year?
Fred Koury: The following year, yes. 2021.
Adam Kaufman: That's significant growth. Do you have to ramp up people for that? Do you find good experts in each city?
Fred Koury: Yes. We're always looking for great people, always investing in talent.
Adam Kaufman: I know you invest in talent. I've met a lot of your sharp team. I know also that you invest a lot of time in mentoring, both as a mentor and as a mentee. Why do you think mentoring is so important?
Fred Koury: When I think about people that given me time... people that speak at our conferences, like yourself... you had brought the gentleman from Google to our conference... and the people that volunteer, the people that we write stories about... they're willing to lend their experiences to us... it's about giving back. I feel like what I have to give back is what people have sown into me I'm willing to share with somebody else. It's a cycle of giving.
Adam Kaufman: Absolutely.
Fred Koury: Now that people have invested in us, to pay it forward to other people as well.
Adam Kaufman: How do you decide who you help? Because it can get never-ending. It's a bit of a tap dance to decide how much you help someone or not. Do you help ad-nauseum? Or do you do some selective assistance? How does that...
Fred Koury: I'm intentional about who and how and when I spend time with. I carve out Friday afternoons. Also, towards the end of the day I'll meet with certain individuals. I try to keep work hours for work hours.
Adam Kaufman: That's smart. You carve out a certain day of the week or half day.
Fred Koury: I do. Then there's certain folks that I'm willing to meet with. Sometimes it's people for a reason, sometimes it's a season, and sometimes it can be a lifetime: people that I'm still engaged with over the course of time. A lot of times I'm willing to invest into it based on what somebody else is willing to invest into themselves. If I see someone who's very serious about it and they're calling me and they want to meet and they keep sending followup, those are the folks that I'll take more seriously... people that are good about following up... versus somebody that sends you a one time email and for some reason doesn't do a good job of following up.
Adam Kaufman: I know what you mean. Just last week a peer of mine had his son send me a note without any kind of background about what school he went to or what he wanted to study. He was just looking for an internship. Having never met the son and only knowing the father, out of respect to the father I sent a note back, "Give me an idea of what types of industries you want to be in or even size of company or geography." I asked him some followup questions before I just started peppering him with CEOs' phone numbers and email addresses. He never followed up. He didn't even followup with the bit of homework I gave him, so to me that demonstrated a lack of seriousness in wanting to help. Is that what you're talking about?
Fred Koury: Exactly.
Adam Kaufman: Speaking of your extracurricular life beyond work, you and I share a fondness for political affairs, whether it's backing a candidate or just being knowledgeable on current events. What does politics do for you in your life? Why do you spend time in political affairs?
Fred Koury: I spend a lot less time now than I did in the past. The last 10 years I've withdrawn myself from politics.
Adam Kaufman: Is that related to the family growth and your boys?
Fred Koury: I think it's being involved with it and going to the highest level and getting the chance to meet presidents face-to-face.
Adam Kaufman: You were at the highest level. I know you won't talk about it, but you were.
Fred Koury: Getting the chance to inside of what's happening there and the lobbyists that control everything in Washington and... We all have different issues and items that we care about and that we're passionate about, but it's gotten to the place where people are very hostile. It's a hostile environment. You can't bring things up and just be able to talk to one another about certain issues. I've chosen to leave that behind right now, because I think it's important to stay focused. When we talk about our company... and I tell all the employees of my company... we're pro-economy, we're pro-jobs, we're pro-business. That's our agenda. That's the business that we're in. As far as politics go, if you want to talk about it or address it do that outside of the office, because that's not where we're at inside of the office.
Adam Kaufman: At one time you were really involved in politics. Didn't you get recruited to run for office? Was a party flirting with you about running for office?
Fred Koury: I was asked to run for senator at one time.
Adam Kaufman: US senator.
Fred Koury: US senator at one time.
Adam Kaufman: That's a big deal.
Fred Koury: It was a big deal at the time.
Adam Kaufman: Had you considered that?
Fred Koury: I slightly considered it. I think a lot of times it sounds more glamorous than what it is. After having a chance to do the pros and cons like I talked to you about, to me it made the most sense to continue to do what I was doing and stay focused in business.
Adam Kaufman: Do you think that's in your future at all? I know you just said you're somewhat displeased with the current tone in American political affairs, but do you think there's a future for you in politics?
Fred Koury: No intentions of running for office.
Adam Kaufman: We don't know God's plan, right?
Fred Koury: We don't. Anything is possible.
Adam Kaufman: What are you most excited about right now? I asked a version of that in the beginning, but what gives you hope as you look forward?
Fred Koury: One of the things that excites me right now is growing this company, not only for my sake but for the employees' sake: the people who work at the company. I've had a lot of loyal employees that have been with me for a long time. I want everybody to be able to prosper from what we're doing. I think right now we're in a time of prosperity with economy as booming right now.
Adam Kaufman: Sure is. It's been about 10 years.
Fred Koury: I think we have to continue to capitalize on that. Now is the time to capitalize on it. We don't know what it's going to be like six months from now, a year from now, or even five years from now, but right now...
Adam Kaufman: Hit the accelerator.
Fred Koury: Hit the accelerator.
Adam Kaufman: Do you think that hitting the accelerator changes strategy? I don't know if you do a one year plan or a three or five year plan. Different companies have different types of strategic plans. Or is it really month to month? Different styles. There's no wrong way to do it.
Fred Koury: We like to operate three years out.
Adam Kaufman: Three years, okay.
Fred Koury: We like to operate three years out in terms of how we grow the company. We're a family first company. That's how we run the company.
Adam Kaufman: Tell us what that means.
Fred Koury: Family first means it's the families first. We have flex hours in our company. We have an employee loan program. If somebody needs to borrow money, they can borrow up to one month of their pay for no interest and they can pay it back over three months. There's a lot of other added benefits that we do for our staff based on that.
Adam Kaufman: Not only does that lead to a great culture internally, but I'm sure it's a draw as talent is so hard to come by in today's booming experience.
Fred Koury: Yeah. It's been something that we're more like a family. That's part of the culture that we've built inside of our four walls: we're like a family. People have been loyal to me and I'm loyal back to them.
Adam Kaufman: The way you talk about your business is almost like it's a higher calling. You think marketplace ethics and faith ethics and coexist? Can business be a higher calling?
Fred Koury: I do. I think we spend most of our time in the marketplace, and so being in the marketplace we have so much interaction with our employees and with our customers and with our vendors. Because of that, that's why we have the ability to affect the most people possible.
Adam Kaufman: One of my favorite writers, Michael Novak, wrote a book about the spirit of capitalism. It's counterintuitive to think that one can be growing a business, selling product or services, making money, and still be ethically moral in this world today where we do hear about the sensational stories of bad CEOs or that there's a lot of demagoguery about wealthy people who are not bad people. It's not a sin to make money. I love hearing you talk about how this is a higher calling for you. You want to treat your employees who've been with you for a long time really well.
Fred Koury: I mean look at the parable of the talents. If you look at that parable, one was given one, one was given a few more, and one was given five. The people that did more are the ones that got more in the end. The person that took the one talent and buried the talent, that talent was even taken from them and it was given to the one who had the most talents. I mean, we're all given a certain amount of talents in our life and we should put those talents to use.
Adam Kaufman: It's clear that faith plays a big part in who you are. How does that exist in an environment where... In 2020, there are plenty of laws regarding the marketplace and companies and how we talk about faith or not. Do you have to think about that? Do you have to behave differently?
Fred Koury: No. I think my faith is ingrained into my business. Work is what I do, it's not who I am. I'm a Christian. The greatest commandment that God gives is to love another: love him and love another as he has loved us. In doing so, I think that we need to put into practice that he teaches us. Early on, when I started the business and people didn't work out I would just get rid of them. I wouldn't think twice about it. That would be the end of it. I wouldn't even remember their name. Going full-circle now with my faith, if somebody doesn't work out that doesn't mean they're not significant. It doesn't mean they're not of value. Now we make sure that we give them severance pay. We make sure that we write a letter of recommendation, if we can find, on behalf of their character. We help them find a job. We try to treat them as a person of significance.
Fred Koury: I think over the course of time, putting some of these things into practice is what's important, is where I carry out my faith in the marketplace.
Adam Kaufman: Can you reflect on a time when you had to lean on your faith during a business dealing? I know I sometimes wonder how people who go through major challenges make it through if they don't have faith.
Fred Koury: I've had several instances that have happened to me. I'll give you a recent one and if you'd like I can give you a longer version. Recently there was a customer of ours that kept swearing at our employees: using the F word. I told our people that they don't have to tolerate that, because that's not the kind of environment that we work in. This person was an anomaly. This company was a one off company, success entrepreneur that couldn't control their emotions. Finally I told my brother Lee, who oversees revenues for the company, "Get rid of this customer." He went to get rid of the customer and he said, "We can't work with you any more," and they threatened to sue if we didn't pay them all the money that we owed them that they had paid us in the past.
Adam Kaufman: For services you had delivered already.
Fred Koury: Services we had already delivered to them. I said to my brother, "This person is being completely unreasonable. Let me handle it." I picked up the phone and called this person. No sooner did I get my first and last name out did they hang up the phone on me.\
Adam Kaufman: Wow. This is somebody you knew, obviously, as a customer.
Fred Koury: I never met him personally. I knew the name.
Fred Koury: So they started sending me text messages threatening me. I remember thinking to myself, "How much money do I have to pay them to get rid of them?" I went to my controller... she's a very quiet, gentile person... and I told her what I was planning on doing. She said, "You're going to show a sign of weakness." I remember thinking at the time, "That's fine, but I'm not going to get moved by what she tells me. I just want to move on from this person."
Adam Kaufman: For the good of your company and your employees.
Fred Koury: For the good of my company and my employees. Maybe it is a sign of weakness, but I decided that I'm going to submit and I'm just going to get this person off of our back. I'll never forget it. I settled with this person. Paid him a decent amount of money. I didn't look at it as a sign of weakness. I looked at it as a sign of maturity on my part. In the old days, I probably would've gotten into a fist fight with him.
Adam Kaufman: You would've armed yourself with a few other lawyers and gone back at him.
Fred Koury: It would've been a back and forth, exactly.
Fred Koury: I remember a week later I got a check in the mail for the exact amount of money that I gave him out of the blue from something that I had forgotten about.
Adam Kaufman: From a different customer?
Fred Koury: Not even a customer. From a couple years earlier from a vendor that I wasn't even expecting a refund check on something. That covered the exact amount of it. It was a confirmation for me that I did the right thing just by moving on. I think sometimes we get involved about who's right. We try to win the battle but we lose the war.
Adam Kaufman: That's the humble you again. That's why you're here today on Up2, is because you are so humble. Meek is not weak. You were meek in this situation.
Fred Koury: We were. It was a lot of toiling over it. It wasn't an easy decision to do. Believe me, my pride was tested on many occasions and I consulted my advisors like I talked about before. At the end of the day I made the decision and I believe it was the right decision.
Adam Kaufman: God knows the intention of our heart. He knew in that instance for you.
Adam Kaufman: Do you think, Fred, much about legacy? You're still young, but do you think about the Lebanese heritage you mentioned, the story you were born into we've talked about? How do you digest all of what you've accomplished? And have you begun to think about what others might say about you?
Fred Koury: I think our legacy is the people that we spend our time with that are around us. It's the people that we see on a daily basis, the people that we see on the most frequent basis... maybe on a weekly basis... I try to be very intentional regarding the people around me. That starts at home. It starts with my wife and my kids in terms of intentional time with them. Then with my parents and then with my siblings. Then it works outward from there. I want my legacy to be my relationships.
Adam Kaufman: I can remember... full disclosure here for our audience, we are authentic on UP2... you and I many years ago sat on the floor in your large home, which incidentally had very little furniture. We were both signal. We both sat on the floor and prayed for wives of noble character. Do you remember that?
Fred Koury: I certainly do.
Adam Kaufman: My disclosure for the listeners is that we ended up marrying sisters.
Fred Koury: Yes we did.
Adam Kaufman: As I talk to you here, my mind races with so many different topics to bring up, but what a kaleidoscope that's been put together through all of this.
Fred Koury: I was just going to say that I know that's something you always, is God's kaleidoscope. There's no coincidences.
Adam Kaufman: For you, I still want to go back to this legacy question. I agree with you: it starts with the people around you. One of my mentors... Doug Holiday... taught me that we become a mix of the five people that we spend the most time with, or pieces of those people. You kind of said that as well with your family and your siblings and close friends and associates. In the future, how do you think about how much you want to work, how much you want to leave for your children to consider doing, or taking care of your employees? Maybe you haven't decided yet if you want to grow this business forever. Have you thought about your business legacy?
Fred Koury: Sure. I love business and I always want to be involved with business. I think it's exciting. I don't have a lot of hobbies. I do enjoy golf, but I enjoy business. That's something I really enjoy doing. I enjoy investing in startups. I enjoy investing in private equity venture capital. I enjoy investing in real estate. I enjoy different industry. I'm not an expert in any of those industries, but I think it's a way to be a part of those industries and have your toe in the water.
Adam Kaufman: Absolutely. Are there any new industries that you haven't jumped into that you might want to get into in the future? Something you're trying to learn more about now?
Fred Koury: These ecosystems are so important for the future. One of the reasons that we like events so much is that so much has gone the way of technology.
Adam Kaufman: Do you mean peer groups, or like the environment ecosystems?
Fred Koury: Peer groups. The part I was going to share with you is that a lot of it with technology and the direction that the economy is going with Google and Facebook and all of these different technology platforms and softwares and the way people communicate together... there's never been a greater need for people to communicate face-to-face. I think that's one of the reasons why events have become so successful right now, but also peer groups.
Adam Kaufman: Peer groups are so in-demand and the more in common the people in the group, the more they can help each other. That's why I'm such a big believer in AA. That was one of the original powerful national peer groups: Alcoholics Anonymous. That group of peers sharing with each other... Bible studies have peer groups. CEOs have peer groups. Every segment of society should have a peer group, and they don't have to be huge: 150 people. In fact, they're probably better when they're small groups.
Fred Koury: Yeah, but relationships are still the key.
Adam Kaufman: Relationships are the key. Yesterday, they must've been desperate: I was asked to give a speech yesterday and they asked me to speak about private equity because I'm in the venture capital business. I said, "I don't like to talk about private equity. That's so boring. We look that up online real quickly with our thumbs. Instead of private equity, I'd like to talk about relationship equity." And their eyes lit up like yours did when I said relationship equity. "What is that?" It was my four steps to take to cultivate relationships in the digital age. You would've thought I was teaching them how to attain the Fountain of Youth. They were so enthralled with these basic relationship-building skills that are really in-demand right now.
Adam Kaufman: How do you think about relationships now? I'll let you think about it for a minute. This year I... for about the fifth year in a row... made out a list of 10 people I want to get to know better in the year ahead. I can't remember who taught me this, but I love the idea. I wish I could give her or him credit. I include people that I might've already met but I want to get to know better. I also include a few stretch goals of people I've never met but I want to get to know, both on the personal and professional side. Are there still people that you think about getting to know better? You don't need to tell me the names of them, but do you look at potential future relationships as being helpful? Or do you just try to grow with your existing ecosystem?
Fred Koury: I do try to grow with my existing ecosystem, but I'm always open to meeting new people. I love meeting new people. It's the greatest thing about my career, is that we get to tell the stories of so many different CEOs: that I get to meet these different people.
Adam Kaufman: You're definitely a people person. I was asking somebody about you in preparing for this and this gentleman who works for you said, "Every time I go into a restaurant with Fred Koury everybody knows him, whether it's the restaurant manager, the other diners, even the servers sometimes know him." You're definitely a people person on all levels, not just the CEOs.
Fred Koury: I believe in sowing into the relationships of the people around me. It's so important when we go into a place... whether it's a waitress, whether it's the person who's running the restaurant... We frequent the same places, so why not invest in those people around us, not only with our time but with our talent and treasure? Why not give them our time? Why not give them a bit of extra money? Why not make them feel important with a special word?
Adam Kaufman: Light up their day. Right.
Adam Kaufman: Do you think backward a bit? I want to get off this legacy question. Thanks for tolerating that. I know you don't want to talk about your legacy too much. But how about the younger version of you? If you could back and talk to the 21 year old version of yourself, what would you tell the younger Fred Koury?
Fred Koury: I think I would've slowed down a bit. I think I moved very quickly back then and didn't give a lot of thought to cause and effect: how my actions can affect somebody else, that there's consequences for decisions that we make. I've spend a good amount of time through the years rewinding things that I've gotten myself into.
Adam Kaufman: Because you moved too quickly.
Fred Koury: Because I moved too quickly, yes.
Adam Kaufman: I often say that everything we do we do better slowly. Is there an example of that where you learned from moving too fast and what your take away is from reflecting backwards?
Fred Koury: My takeaway is hurry and love is incompatible.
Adam Kaufman: Hurry and love is incompatible.
Fred Koury: Now I believe that... which the greatest commandant is to love... we can't be in a hurry and love at the same time. We've got to slow down and appreciate the moments. Joy is made up of a series of moments. If we don't take pleasure in those moments, we're not going to experience the joy that's set before us.
Adam Kaufman: It has been a joy speaking with you today, Fred. I know how busy you are. I'm grateful that you slowed down a bit to spend some time with us here at Up2. I'm certain that our listeners will gain a lot from what you've shared today. I really appreciate it.
Fred Koury: Thank you, Adam.
Adam Kaufman: Today's episode with Fred Koury left me with so many thoughts. I'm going to provide a few more than five takeaways today, because I didn't want to limit his many good take-home value comments for all of us.
Adam Kaufman: Number one: Fred said it's never a convenient time to take a risk like starting a new business. Instead, you can take what he called a step of faith. I like that. Number two: Fred encouraged that we need to make the most of our opportunities presented to us and that we should look ahead with big ideas. Number three: at the same time, while that is a good thought, Fred also encouraged us to stay in our lane and grow where our roots are, and that was how we would most likely obtain the success that we sought for ourselves. These two points are somewhat different and I think we should have some combination of the two along with the wisdom that comes from an abundance of councilors, something else that Fred added, which I love. Maybe some combination of both is what he's recommending.
Adam Kaufman: Number four: the most effective way to make big decisions is the tried and true method of listing out the pros and cons. I know that's true for me. Illustrating, visually, the number of pluses and minuses... if you go one way or another... can really be helpful. Number five: I previously said it, but to emphasize, wisdom comes from an abundance of councilors. Number six: clearly our guest today has within his ethos a cycle of giving and paying kindness forward. Number seven: when explaining the family culture at his business, Fred used the example... which I really liked and I haven't thinking about... that even if an employee isn't a good fit for a particular role, that doesn't mean that he's not a significant human being. That's powerful. Number eight: try not to get bogged down fighting little battles in your daily life, whether they're personal or professional battles. That's a pride problem getting in the way of progress. Finally, number nine: be intentional about who you spend time with. Do you relationships lift you up or bring you down? Something for us all to think about.
Dave Douglas: And now, it's time for this week's listener mail bag.
Adam Kaufman: Today's submission comes from a regular listener: Jean Claude, who originally hails from Luxembourg. Jean Claude writes, "Thanks for sharing another meaningful podcast, Adam. [Bernie Moreno 00:48:06] shared several great life lessons, many of which strongly resonated with me. In particular, his comment on indecision and persistence." Merci, Jean Claude. Thanks for listening and thanks for taking the time to provide this feedback. And remember, to all of our listeners, we want to hear from you. We accept all types of feedback. We also appreciate reviews and ratings on iTunes or wherever you're listening to this podcast. Thank you.
Adam Kaufman: Up2 is a production of Evergreen Podcasts. Special thanks to our producer and audio engineer, Dave Douglas. I'm your host, Adam Kaufman. Thank you so much for listening to the Up2 Podcast.