"It's easy to fix metal—it's not easy to fix relationships." Jonathan Ord is a big believer in passion, and its ability to promote positive change in individuals and teams. While most businesses take a lean and mean approach, focusing more on technical aspects and bottom lines, Jonathan focuses on relationships and their ability to unlock individual potential. Learn more about his experience launching Dealer Socket and growing the company in this episode of Taking the Stand.
Erik Bermudez: Hello everyone, welcome to today's show of Taking the Stand. With us, we have a very special guest in Jonathan Ord. Jon, thanks for joining us today, appreciate it, especially on a Friday morning. Jon Ord: Oh, any time. No, love to talk to you guys. Erik Bermudez: Yeah, awesome. So yeah, today we have something really, really special. We have some insight into Jon's brain, who's been a successful businessman, who's been a successful investor. We know a lot of our listeners are looking for tips and secrets from a successful investor and businessman like yourself on how to grow and scale a business, so we have a really, really special show for you today. So let me introduce Jonathan Orr. Jon, you've been a great friend, Filevine board member for years now, and actually founded DealerSocket, and that was in 2001, Jon, is that right? Jon Ord: That's right, yeah. Erik Bermudez: And that's still going strong after 19, 20 years. Jon Ord: It is, yeah. It was a fun overnight success story that took 20 years, yeah. Erik Bermudez: So look, really appreciate you being on the show, and we're excited to dive into some of the insights that you have to share with us today. Jon Ord: Awesome. Logan McLeod: Awesome, Jon. Well, I kind of wanted to start this off with kind of getting your insight and your take on the role that passion plays when you're trying to assess a company. Obviously to be successful at anything, you have to really like what you're doing and stuff, but when you're looking at evaluating companies and assessing them, what's so important about that passion portion? Jon Ord: Yeah, listen, I'm highly involved in software, I'm on quite a few boards and invest in a lot of software companies. I do have one clothing company that's fun, but it's a hole you throw money into and wait for it to sprout. So I like software a little better at this point. But software companies are interesting, and really if you think about how software changes businesses and solves problems, it's really built out of, normally, a passion for someone really, really understanding the industry well. I'll use Filevine as a great example, right? Ryan and Nathan were inside the law firm in Las Vegas, and they found a problem that they needed to solve, and they couldn't find a solution in the space, and they were passionate about solving it, because they had a bunch of lawyers that needed to do work more efficiently and help clients more effectively. And so they found a solution to the problem, they built a software around it, and they were passionate about the return on investment that it created for their business, about how it created a great customer relationship, and they really, really understood how that application could highly affect law firms. And then they figured out, "Hey, man, we could start a business around this." I love businesses like that. When we first started DealerSocket, we thought we had a great idea, we went in, we talked to some auto dealers, and those auto dealers said, "You guys are really smart about technology, and smart about what you think we need, but you see that guy over there holding up the side of the building smoking a cigarette, that's my sales guy. That's who needs to use this software to be successful, and that guy will not use what you're talking to us about." Jon Ord: And so that kind of was a big revelation to us, and so we went in and we worked inside of dealerships for free for a year. We worked for free so they wouldn't fire us, because we asked way too many questions. And so we believe that that passion bleeds from a supreme knowledge of the industry, and an understanding of how people act in the space, and how you can leverage technology to really benefit the end user, and you really have to know the industry to do that. And so being inside of that industry, being passionate about an industry and kind of understanding how everything ticks is highly effective in creating software. Logan McLeod: I couldn't agree more. Having that insider's perspective is probably key to really figuring out the problems that are there. My followup question to that is, how do you measure that passion? I mean, I'm sure everybody that's looking for an investment or guidance says, "I really love this topic," but there's those who really mean it and those who don't. Jon Ord: Yeah, I think you could see it pretty quickly in their eyes when you walk in the room, right? You can see how they structure their office, you can kind of tell whether the technology entrepreneur is highly technical-based, which isn't a bad thing, but if they're over-technical, or over kind of business-minded and just want to make money in a short period of time, you can kind of ferret that out pretty quickly, especially if you ask some detailed questions about the ins and outs of the industry, and why they love to work in automotive, or in legal, or in healthcare, or mortgage, whatever. And that's why I love niche software companies, right, I love vertical SaaS software, because you can get into the details and you can really find out really quickly how much a person loves that industry by the way they talk about it. I mean I, take a good example. I mean, I'm not invested in this company, but there's a company here in Utah called Owlet that makes socks that kind of understand the- Erik Bermudez: That's right. Jon Ord: ... heart monitoring of little kids and stuff. And when you talk to that CEO, I've talked to him a couple times, you can just tell, he's passionate about what he does, and he's passionate about the problem that he's trying to solve. And so I think you can see it really quickly, and then as you get into the software as well, you can see that it has a human element to it, it's not just, "Hey, we're trying to create something that we can proliferate really quickly from a technology perspective," but it's something that's really going to affect the lives of people that are using it on the ground. Logan McLeod: Right, I love talking to people that are in the details so much, that they've seen all sorts of problems that usually the rest of people or maybe everyday workers have not seen, I think that's a huge indicator of them really understanding the complexity of what they're trying to either offer to the market, or solve, having that level of detail and understanding is paramount. Jon Ord: Yeah, I couldn't agree more, and I love investing in businesses that way, because then you see the customer retention rates are through the roof, because customers really use it to be as successful as they possibly can. And then you get in and you talk to end users and they're like, "Man, this helped me make more commissions on sales, it helped me help my customers better, it helped me save lives," whatever it is, they get really passionate about the effects of what the software are having and not just the revenue that the company's generating that has created the software, right? Logan McLeod: Right, right. And for our listeners who are listening in, obviously a lot of them are going to be passionate about the law that they practice, but they need to be passionate about the business that they run. The business owner should definitely know the ins and outs, from the inception of a case all the way through completion. If they are relying on other people to solve those problems, hopefully they have the right people in place, but they should be able to understand exactly what their law firm needs so that either, one, they can solve that problem and put the right people in place, or two, implement processes, solutions, things like that. Jon Ord: Yeah, I mean, in the entrepreneurial world, we always say, "Tell us what reality is, and we'll solve for that X," right? And the challenge is, many companies don't even know what the reality is. They don't know what the metrics and challenge that they're having in the business are until it's a little bit too late. And so software and software-enablement processes should help that process, big-time. Erik Bermudez: You know, Jon, I want to piggyback off that a little bit. Logan just mentioned, and you've mentioned that building a team around that passion is important. I mean, no one can build a company by themselves, they have to build a team around them. So I want to dive into the second insight that you've shared with us, which is building a team, and not only seeing people for who they are in a given moment, or who they are currently, but as a leadership team, especially as an early stage company or an early stage business, the potential of what your team members can become down the future and how you can develop and build them. Sometimes, I've heard a lot of leaders say that that's a hard attribute to obtain. It's so easy just to fall in the trap of looking at performance of a team member in a given moment, and not being able to have that long-term vision. What advice would you give a leadership team that's looking to develop that attribute? Jon Ord: Yeah, I mean, I think we as an investment community, especially the private equity world, has screwed this up in a big way, right? I mean, when you think about how private equity and investors come into certain companies, they kind of feel like they know a playbook or a playlist on how you should hire, how you should, the exact attributes and qualities you should get in an individual, and I find that that creates a kind of a little bit of a sterile environment, and the challenge is, in an entrepreneurial business, most of the time entrepreneurial businesses are different, and they're different than other business that have been run before, and they have different passion levels and different knowledges about industry and different ways that people work, and in our ever-changing environment, especially in this time of COVID, right, working from home is a different attribute than working in the office, and I think we've historically kind of praised the people that have been really, really good relationship people, and kind of maybe test well on a personality profile test, or something like that, but we have a less of ability to test or to understand true passion elements and the potential of other people. We can test the current attributes, but we can't really test the ability, how well they're going to grow over time. Jon Ord: And so I think this is more of a, it's not just a business principle, right? I love world religions and looking at all different kinds of philosophies and structures about how different people through time have looked at individuals. And if you think about Eastern religions, with Hinduism and some of the Eastern religions like Sikhism, they had these concepts of Moksha or Nirvana, or getting to a particular location that is a perfecting location, right? And Christianity has a similar doctrine to it. And so if you look at how religions have talked about this, it's really a charitable attribute, right? In that when we have charity for others, we see them who they can become, versus what they're acting like. And so if you kind of think about who looks at you and sees you in the best light possible, whether that's your mother, your deity, your friend, your best friend, your spouse, what have you, you kind of have to see yourself in that same light, of who you can become, and that helps you kind of smooth off the rough edges that we all have in life. And when you learn that about yourself, then you can learn that about other people. And then, when you start seeing other people for their potential, it becomes a whole different deal. And I liken it to, if you have children, we always see our children with this divine potential or this eternal potential. And you look at them and you say, "Ah, yeah, they did this stupid thing or they did that stupid thing when they're young, they put their hand on the stove, they crashed the car." I remember my son crashed one of my cars, and he was just distraught. And I remember driving up to the scene, and it was a Sunday, it was actually Easter Sunday in like 2014. I don't remember the exact date, of course I do, I remember the exact time. And I drove up on the scene, and I could see, just had tears in his eyes, and he was just distraught. And I could see he didn't want to have that happen, I could see he made some bad decisions on the drive that day. But as I drove up and I looked at this gray car, and look at my son, I just got the overwhelming feeling of, "This is not a time to be overly critical, this is a time to love him up," and say, "Hey, this is not a mistake that this kid's going to make again." Erik Bermudez: Sure. Jon Ord: It depends on how I react to it. And so just wanted to give him a big hug and tell him it's easy to fix metal, it's not easy to fix relationships, and I love him, and move on. And so I think a lot of times in business we kind of forget that element of, what did we learn from the experience? I love the book Fail Fast, and these books that try to get you to make decisions in a very proactive and aggressive way. And when we manage the way that most businesses manage, at times we kin of do the opposite, we put people in a box and we don't allow them to make decisions, and we make them be tentative and have trepidation on what they really should be doing on a day in and day out basis. And so when I'm talking to entrepreneurs, I'm always thinking, "Hey, is this a" ... We have bad hires and we have good hires, but once you have them hired, all of them should be good hires, right? Unless there's something that they lied about on their resume or whatever, there's a reason why you hired them in the first place. So now let's invest a little time and effort into understanding them and understanding how they can deliver inside the organization, and give them a little bit more bandwidth to be able to produce, and to become ... And then you be a good leader. You be the person that mentors them and teaches them, and is charitable with them, does things that enables them to attain this potential that we know that they have. And then there's certain cases where, right, they just aren't going to grab hold and make decisions that are appropriate, and so yeah, we're going to lose employees, but most of the time that I've seen, especially if you hire right, in terms of passion and just innate kind of intelligence and ability to run fast and make quick decisions, we can teach everything else. We can teach the passion for the business, we can teach the knowledge of legal services, we can teach how to mentor and manage customers. But a lot of times we get too short-sighted on that, and the turnover expense is really, really high inside of businesses, when you lose employees and have to re-train them, right? Erik Bermudez: Absolutely. Logan McLeod: I think that many people, they lose sight on that ability of coaching people up, or bringing out their best abilities, because honestly, that's how you're going to get your best talent. Finding those that are diamonds in the rough, and being able to polish them up to do exactly what to do for that specific need, it's been huge for Filevine, we've found lots of great people like that. Logan McLeod: Well, I want to change gears slightly here, and I've got some rapid-fire questions that you're not prepared for, so we're going to fire them away, and let's hear what you got. So I want to ask you, what's the best piece of business advice that you've ever received? Jon Ord: Oh, wow. So I think the biggest principle that kind of I've learned and have employed in my life, and see other people employ it and it makes a lot of sense, is this, kind of the principle of, you can act or be acted upon. And what that means is, from a business perspective, is there's things that can act upon you over time, right? Crazy investors can act upon you. Putting an obsessive amount of business can act upon a business and make you make decisions when you don't want to make them or aren't ready to make those decisions. There's, in your own life, you think about it, if you buy a car that's too expensive and you have too much debt, then your wife's going to be mad at you. So you're getting acted upon. Or you can't afford to put food on your table, whatever. Personally, there's also acting upon things, addictions, and alcohol abuse, and you can kind of think about all those different things. And so I think about it in terms of this principle of act or be acted upon. Am I doing things today, from a business perspective, that are going to enable my business to act, to be a proactive participant in the future that comes, or am I doing things today that are going to detract from my ability to do and be free and have liberty in my business? And it's an eternal principle, it's taught religiously, again, all over the world. But applying that to business is really, really fundamental, and so when we started DealerSocket, we went seven years without any debt, without any external investors. And then when we did choose our first investor, we chose that first investor really, really wisely, a guy named Paul Madera who's now with us on the board at Filevine as well. Just a great guy, he's an old Air Force fighter pilot, doesn't get overly excited about too many things, doesn't get overly bummed out about too many things. And just he's a really sage, wise, great investor and business guru, if you will. And so making those types of decisions in who you align yourself with and the decisions you make inside your business can really open up a wonderful amount of freedom and liberty in your business going forward, so you can serve customers better. Logan McLeod: Awesome, awesome, couldn't agree more. Okay, tell us about your favorite thought leader, whether that's like a quote or book or something else like that that you like to draw inspiration from. Jon Ord: Yeah, that's a great one. I would say my wife is one of my favorite thought leaders, I just love to watch her think, and when she figures out problems and when she gets frustrated or passionate about something, it's amazing, because you can see that our spouses in many cases are a little bit different in the way they're wired, and the way they see our children, and the way they see life, and kind of viewing that from a alternate perspective, because I'm pretty rational at times, and maybe overly rational at times, and less empathetic, and kind of let's get to the end of the road. And so I think that that thought leadership that's different than me, I can say a bunch of other things. And then I also, I told you guys earlier that I love the study of world religions and scripture of all sorts, and so I kind of dig that stuff, based on my religious culture, our religious texts are pretty sacred to me. So I think those are probably the two biggest ones. Logan McLeod: Awesome, awesome. I'm going to ask you this next question, I think I already know the answer, but I've got a followup question to it. But tell us about your favorite pastime or relaxation activity. Jon Ord: Oh, so I love to ride my bike. I haven't done, I didn't do that my whole life, but about maybe 10, 12 years ago I started riding a lot of mountain bikes and a lot of road bikes, and just that solace when you're out and you can be on a phone call for a little while while you're churning on a flat, and so people can't hear you breathing hard, and then you get to a hill and you got to say, "Oh, I got to go." But I think that's ... And it's also great because it builds physical endurance and allows you to kind of apply those same business principles of freedom and liberty, right, if you work out harder and you ride harder, then you can have more freedom and liberty to do whatever you want on the bike, versus if you kind of let yourself go, then you've got zero freedom on the bike, because you can't breathe. So it's that kind of same principle. But outside of that, I love spending time with ... We have six children, three boys, three girls. I love spending time with my family and my kids, and it's awesome. We were out on the lake yesterday, hanging out, we're up here in Utah on a little vacation, and it's just great to see them and realize that you're kind of, been given stewardship over these wonderful people that you get to hang out with in this lifetime, so it's cool. Logan McLeod: And I understand you're quite the motor sports enthusiast, too. Jon Ord: Yeah, I do. I mean, based on growing and starting DealerSocket, I love automotive, and I'm a big fan of racing cars and love, love the Porsche brand especially. So yeah, I do like cars. Logan McLeod: Well, that was my followup question, if you're going to recommends somebody trying to break into the Porsche brand, what platform do they go with, do they start with the Boxster, they try to find the best 911 out there, what's your recommendation? Jon Ord: I think you go to a ... I've got them in all different time frames. My favorite is kind of an old original 356 Convertible D that's a 1959 that's just a phenomenal, fun car. Four gears, 75 horsepower, and then I've got one that has close to 1000 horsepower, so it kind of runs the gamut. But it kind of depends on what kind of decisions you can make in buying a car and not be acted upon, right? I mean, that's kind of the deal. Logan McLeod: That's exactly right, awesome. Jon Ord: But I think, what I would say is get a, if you've got kind of a limited budget, I'd get an older 911, kind of early '80s, after they fixed the chain tensioner stuff in the 911s, probably '80 to '85. Get an old Targa that you can pull the top off and kind of have fun fixing, and those flat-sixes, they're fun to drive. Logan McLeod: Air cooled prices are skyrocketing lately. Everybody's loving this air cool, yeah. Jon Ord: They are, it's cool. Logan McLeod: Well, it's been great Jonathan. Had a wonderful time speaking with you, thanks so much for all your input, really appreciate it. Erik Bermudez: Thanks, everyone, for listening on today's show of Taking the Stand, and thanks again, Jon, appreciate it. Everyone have a wonderful day.