Why Fast-Growing Companies Still Run Out of Cash

Jason Lippman’s entrepreneurial journey includes scaling a real estate portfolio to hundreds of homes, losing everything during the 2008 financial crisis, and rebuilding a successful financial services company from scratch.

At one of his lowest points, his wife called from the grocery store because her debit card had been declined — and there was nothing he could do about it.

In this episode, Jason shares the hard lessons from losing everything, the mindset required to rebuild, and why fast-growing companies often face their biggest challenge: cash flow.

We discuss:

• The rise and collapse of a vertically integrated real estate business
• The painful lessons of the 2008 financial crash
• Rebuilding after financial devastation
• Why growth often makes cash flow problems worse
• Building a remote-first financial services company
• Hiring experienced operators instead of junior staff
• Leadership lessons from endurance sports and aviation

This episode is a candid look at resilience, leadership, and the realities of entrepreneurship when things don’t go according to plan.

Feeling stuck in your business?

It’s ok. We’ve all been there… You simply don’t have time for vision and growth. You feel frustrated, anxious, and stuck because goals aren’t being met, processes aren’t followed, and your team isn’t on the same page. Time after time, you’re putting out fires only fast enough for the next one to pop up.

Get OUT of the Sh*t Show 

Let’s build your team and guide them to the next level.

Transcript

Jason Lippman 0:00

the real low point, is when your wife calls you, because her debit card is not working at the supermarket and she's got groceries all lined up on the checkout counter. There's people behind her and she can't check out and there was nothing I could do about it.

Speaker 2 0:14

Welcome to The Scalability Code, the podcast that helps you get out of the sh*t show and start growing your business. And now for your host, Matt Haney.

Matt Haney 0:23

Again, another episode of the Scalability Code and today I have a 20 year friend of mine and former boss, Jason Lipman. Jason, Thanks for. joining us today.

Jason Lippman 0:33

Thanks for.

Matt Haney 0:35

So as we do with every episode, I encourage my guests to go back and think through their entrepreneurs that were mentors to them or people that gave them. Their entrepreneurial start or their journey. because I think those are some of the most impressionable times we've had as young people that are young business owners is to, and I don't think we go back and look enough. So think for a second if you could go back to some of the, influences on your life And got you to be an entrepreneur. And ideally if there were any leadership traits that they've had that impression you And just give us a little backstory.

Jason Lippman 1:08

I started my career at, at Arthur Anderson, people would, not think of when they think of entrepreneurialism. because it's a big behemoth and accounting firm. But, I was in the consulting division and, it was kind of shockingly entrepreneurial. and all the managers there, first of all, you know, everyone at Arthur Anderson, not including myself, are super smart, super driven. And you surround yourself around, all those people. and it, it can be quite inspiring. one person When I was working there told me like, the one reason, that you don't leave, uh, is when you leave, uh, you'll never find a. This kind of team, again, like the, the quality of talent up and down the chain where everyone cares about what, they're doing and they're professional and they're focused on what's important and it's not political and blah, blah, blah. Um, and so really, Arthur Anderson really kind of, in inspired more of my entrepreneurial journey than you'd expect. Because all those people that I worked for, they were all trying to build a business, build the book of business marketing plans, responsible for bottom line profitability. They were responsible for recruiting, uh, team members. Um, super dependent on making sure that they got the, the good ones, and treating them well and, and doing well on projects, getting more work out of existing clients. I mean, all the things that a small business owner would do. again, all within the safety of, uh, I was getting paid every two weeks, which is, uh, a pretty, pretty big difference, but still very entrepreneur, very goal-driven. and I knew that, eventually, like if I did ever leave, which I, I was not planning on if I, I knew if I ever did leave that eventually starting to run my own, deal.

Matt Haney 2:45

Well I'm gonna ask you to go back even further'cause I think you grew up in an entrepreneurial family. I think your, dad, who I happen to know and have met for years, uh, you guys worked together at some point. Uh, I don't remember his like whole story, but I know at some point he went out on his own And as an entrepreneur. But give me that, like did you, did you see him growing up and as a child? Was he working in businesses and out in Rena or what was his story?

Jason Lippman 3:09

I never really thought of my dad as being an entrepreneur. He certainly was. Uh, I just didn't think of it that way. he worked for the same company, for 30 years. it was during the heyday of like, roll-ups and restructurings and he never knew whether this was gonna be the time. He was kind of a mid-level management and was never knew, like, okay, was this gonna be the time that he gets. outsourced or restructured or downsizing. Downsized the word of the day back then. And so, it was very important to him to stay in El Paso. You know, we had family reach there, that he had built and, was very important to him. and so he started buying, uh, rental properties, on the side so that, if he did get downsized, he had something to go to because he was an engineer. if you didn't work for El Paso Natural Gas in El Paso. That was generally like you were gonna have to move to Houston. That was the And so, I'm not sure I thought about, the entrepreneurial influence. the thing that he really, showed me without telling me is, the work ethic that was required. I do remember him. He'd work all day, you know, nine to five and, and, come home and say hi. And then he had a separate office and he'd go into that and go work on the, on the, real estate. And then on the weekends we'd go and clean houses and fix shit. you know, that was my life growing up. and those lessons, as much as I'm sure I hated it,'cause I wanted to go play soccer or hang out with friends or ride bikes or whatever. And I was, doing, maintenance on apartments in east El Paso, which. There's a lot of other lessons to be learned there too. But, He ended up retiring, then starting a consulting firm, built that, sold it. So he certainly is an entrepreneur, but I just didn't, I I I saw it more as um, you know, he worked his ass off and still does, but

Matt Haney 4:47

still does, still does. Still does. That's awesome. Okay, so I do, I had this conversation with George Benelli, who we have mutual friends with. George was early to, an industry, and you were early to an industry as well before the days of the VRBO. give the backstory, I can't remember the name of the company, but the concept was fractional ownership of homes. Wasn't that the concept? What was that story and what year was that?

Jason Lippman 5:12

Yeah. gosh I'm terrible with years. Um,

Matt Haney 5:15

It was over 20 years ago.

Jason Lippman 5:16

but it, it, yeah, makes me feel really old. but yeah. I was working, for an advertising agency that was helping, build some Max De guys had started. this is after the.com crash, so you can put those years together. And, uh, one of the partners had a, a, 20 unit condo building and Telluride, that he helped me put some marketing plans together and I met with a bunch of, agents there, as well as high net worth individuals who were target buyers. And I caught the same feedback from all of'em, is that they all wanted, to own a second home, but frankly, they wanted it to be in Telluride, but they also wanted a place in Cabo for the beach and over here for golf. and there was no, option for that. and so I came back to them and said, Hey, why don't we start a company that goes around and buys high end second homes and we sell it as a club membership. Somewhat of a unique idea, at the time.

Matt Haney 6:04

certainly.

Jason Lippman 6:05

And about about nine months into it, I still remember this day, one of the, more influential, uh, people in my life, uh, Someone who could, cut through a very complicated situation. Uh, his name is Tom Martin. He was the chief marketing officer at Dell. and he cut through all the noise and get to the heart of a matter within like two or three minutes. Uh, it was amazing. super super smart guy. and so, uh, him and I started this, uh, high-end, club for second home ownership. But like I was saying, nine months into it, we were, uh, reading the Wall Street Journal, which, you know, you actually did back in the back in the day. And there was a full page ad. for a company called Exclusive Resorts that was advertising basically the same exact thing. but they had a full page adv in the Wall Street Journal. And I remember going to Tom's office and I, I went to Tom and I said, Tom, the price of poker has just changed. And I showed him the article and, you know, he sat there, looked at it. Looked up at me and said, well, we got two choices. We either go raise a shit load of money, and compete, or we have to sell to these guys. And so I went back to my office. I did not want to go raise a shit load of money. I wasn't that confident in the concept, enough to go raise 30,$40 million that we'd have to go raise. So I called the company, the CEO was nice enough and, took the call. And two days later I was in their offices in Denver. Four, eight hours of negotiations and we sold the entire company. and I remember getting back on the plane. and, uh, coming back and realizing like, oh, shit. Um, I just sold myself out of a job

Matt Haney 7:33

Yeah, exactly.

Jason Lippman 7:34

because it wasn't like a huge win. You know, we were nine months into it, Tom had put all the money in. Uh, so I was getting a nice, almost more severance package for my quote unquote first exit. I wish it was more, but, uh,

Matt Haney 7:46

What was after that?

Jason Lippman 7:48

Uh, that's when I started home Text your alma mater. Um, and, Uh, yeah. Well, and that was just, uh, again, just, finding a need in the marketplace. I had all these friends through the years'cause I've been, like my dad had been buying real estate on the side, so I had a decent little portfolio built up. Um, but there's only so much you can build on your own because of the, way structured. And so, I always had friends that would come and, and go, oh man, can you help me buy a house? I, I, I really wanna do this. I wanna build a portfolio and stuff. And so I'd shared like, yeah, here's the books I read, here's the things I did, here's what I'm doing. It wasn't competitive because, there's only so many houses I could and none of'em ever did anything. Because, they didn't like it as much as I did. they probably didn't wanna go drive around and look at shitty houses on Saturdays. For me, that was pretty fun. they certainly didn't wanna fix them up or deal with tenants and yeah, I was already used to doing all that. So that's how I started home tech and built up, that company. I do remember, the timing on that.'cause, you know, when you lose all your money, you remember those, those years.

Matt Haney 8:47

we have to tell part of this story.'cause I think this is interesting. Jason actually hired me, I think he was my first real job outta college. I had worked restaurants and done a bunch of other stuff and he and I had a friend in common, Merrill actually connected us together. she got an introduction to Jason. He's like, well, what do you know how to do? And I was like, I don't think I really know how to do anything, but I'm gonna work hard and I'm gonna. work through it. And I remember going through foreclosure notices and just running the sheet driving by doing the best analysis we could on each property based on the major systems that could have. Could or couldn't go wrong in a purchase. And then fond memories of standing at the Travis County Courthouse on the steps, bidding on foreclosure properties. and it was a ton of fun. Here I am watching Jason spin all the plates and figure all this out. And then there's a property management company in this side of the office that's trying to deal with all the people in the world and hundreds of houses. And do you remember the numbers on what the portfolio was at one point?

Jason Lippman 9:46

Yeah. And we got to 350 under management. Uh, I mean that we had owned and, and managed.

Matt Haney 9:53

that's a lot of shit to manage, figuratively and literally.

Jason Lippman 9:57

Yeah, and it would've been a lot better. Like we, we started the business in, in 2005. and it would've a been a lot better, if we would've started in 2007. So we would've only had like a year, before the shit hit the fan in 2008. but we had three years and so we had three home vest franchises, as you know. We had a property management company. We had all the maintenance that, goes with that. We had a fix up crews. Uh, we had, uh, the title company that we started. we had the mortgage bank, and so we're. Fully vertically integrated, which is great. Uh, when the market is going up, uh, vertical integration, when the market goes down, it just means everything doesn't work. And in 2008, like absolutely everything didn't work. And I lost, everything that I'd ever made. plus some. And, and, when I tell people that like, I lost all my money plus some, they're like, well, how's the plus sum? and, it's like, that's when you lose everything and you still owe people money, that you have to pay back. And I did, have to. do that. Uh, so we, we had to. You know, I learned a lot more, uh, as I think every entrepreneur will tell you that, you know, you learn a lot more on the way down than you do on the, on the way up. But I, I, I learned a ton, on, on the way down. some of it was mistakes we made. and then also some of it was just like, no matter what we did, the market was the market there, there was no way we were going to,

Matt Haney 11:10

Outsmart it or beat it or do something different. It was

Jason Lippman 11:12

and so it's pretty funny, you know, when we, you know, fast forward, you know, another five years from there, and then all of a sudden all these Wall Street guys thinks It's a great idea. Blackstones of the world are, start buying up all these houses and renting them out and think that that's a good model. Um, yeah, uh, it's, it's it's not.

Matt Haney 11:30

Yeah. Are they still buying, they still doing that, or they close all that stuff

Jason Lippman 11:33

No, And you can't make that worse, especially if they're the their overhead in it And stuff. It's uh, uh, I had one person, you know, I had probably a hundred percent conversion rate. Every investor that was interested'cause it was such an easy deal for them to sign up with us and go buy houses and rent them out. We did everything. I mean, literally every single person I ever met with, like that got referred to us, like signed up. And there was one gentleman in Austin who I thought was like a perfect, you know, guy. To sign up and, and he said, you know, he didn't want to. And, and I was like, oh gosh, this is the first time someone I like, literally told me no. And, and I asked him, you know, like, Hey, I don't get it, you know, help me understand or whatever. And he's like, he just did not like, the friction in the single family housing model. And I did not know what he meant. I mean, I was just like, friction, what are you talking about? This is easy. We go out. We buy houses, we fix'em up, we rent'em out, we do it again. It's the same thing or whatever. and he was just talking about the friction of there's just no economies of scale when you're buying one house in different neighborhoods. Every, as you learned, as you were working for me, every house was different, every tenant's different. Every neighborhood was different. Every market was different. I mean, we learned how different Fort Worth was from Austin and so. It wasn't until, we had 350 houses that I understood. Oh, that's what he meant.

Matt Haney 12:47

Yeah.

Jason Lippman 12:48

Friction. cam Cronenberg, uh, an awesome investor, super smart guy, made a shit ton of money, I'm sure. and, I still remember that conversation, uh, because I, I didn't get, I did not get it. I left that meeting going. He doesn't get it. Give doesn't understand.

Matt Haney 13:03

Go to the next guy that says, yes.

Jason Lippman 13:05

Yeah, exactly. It didn't stop me for a second until I was like, Ugh.

Matt Haney 13:08

What a messy business too. I mean, I just go back to all the things. All of the things, and then you scale it and then you have all the things scaled. It's all of the problems. All but all the people. Although I will say, I go back and think of some of the faces that were in the office. Uh, and the characters that we came across, the management company specifically, a lot of hardworking people, a lot of folks that, had gone through hardship or, but we dealt, oh my God, all the hardships that you had to hear, all the challenges that people were going through and, it was a very dynamic time to say the very least. so, okay, so that happens. That's a low, that's a low point, right? Oh nine

Jason Lippman 13:50

pretty low. the real low point, is when your wife calls you, because her debit card is not working at the supermarket and she's got groceries all lined up on the checkout counter. There's people behind her and she can't check out because her, and there was nothing I could do about it. Like we literally. didn't have the money. So if you wanna talk low points, that that's a moment that will always, stick with me. I'm, and I'm honest, and, and talk about it because it was, it was that bad. you know, by the time. I, and I should have just you know, I should have filed bankruptcy, uh, it would've been a lot easier. Uh, a lot less painful, a lot faster. Um. In the long term, I had to go get a job and, um, which will, you know, lead us into my next career. But, how our marriage survived that I'm, I'm not sure. to be honest, it probably

Matt Haney 14:37

Well, I, I

Jason Lippman 14:38

not that particular moment, but

Matt Haney 14:40

Yeah. but in general,

Jason Lippman 14:41

pretty hard for a marriage to survive.

Matt Haney 14:43

she's a fighter and a saint herself and all, and the same, pretty tough, tough woman. That's what we, we both married into these, these strong personalities by design, and they have both stuck with us over the years. How many years have you guys been married now? 20

Jason Lippman 14:57

Uh, we're, we're at 29. 29 will be this April,

Matt Haney 15:02

That's crazy. Carolyn and I celebrate 19. Okay, so you, you, uh, you had the low point and then I love this, the, the high point of the story keeps is, is keep building. So let's get to the next thing then you went to, was it Far West?

Jason Lippman 15:17

Yeah. Yeah.

Matt Haney 15:18

Tell us about that business.'cause it took me a minute to understand this business, and I love, I love what I know about it now. So get set up. Kind of where you were and then kind of where, where it went. Today.

Jason Lippman 15:29

Yeah, I mean I had a, a good relationship with the bank, uh, that helped finance some of my, uh, real estate that bank sold right before the downturn. So their timing was great. and two guys spun out of that and started their own, factoring company, Cole Harmonson and Don Strickland. Um, and I was friends with Cole Ton Get d eo. he was helping me on what to do on, on my workout side. And so once I finally got everything shut down and realized I needed to find a job, uh, I was going back to my Rolodex and, and, and asked, literally asked for a favor. and I still remember the email that I sent him that was basically. I call it on my knees kind of email. Uh, because I didn't know the industry, I knew nothing about it. I needed a job. and, uh, and he gave me a, a, an opportunity to help him build, uh, that company, met him for lunch. uh, I still, you know, went out to the car and googled what factoring was'cause I really did not know. What it was And I was like, oh, that seems pretty cool. companies sell and, and they get accounts receivable, but they need the cash today and, and you loan on that and then you get paid by their customer. I'm like, that. sounds pretty easy. It turns out it's like one of the oldest forms of finance around, Uh, especially good, uh, in the downturn. It works during, growth modes too, but especially in the downturn of, you know, when banks aren't, aren't doing something.'cause it's an alternative to, uh, traditional, bank financing. But I was still, I thought. It had pretty limited application, meaning like one out of a hundred companies would need not, uh, what I ended up learning, which was there is a huge market for it, a huge need. there is like anything else, there's a ton of competition. but it was an industry that I could learn really quickly. and just grind through, in, terms of you know, it was just a lead generation business. Like I just had to get enough leads and go through enough opportunities to find the ones that fit. and at the end of the day, all we do is help solve a timing difference has. But those timing differences are real, where you've got people that gotta pay, or subs you gotta pay, or expenses you have, And you're waiting to get paid by your customers, and you've gotta bridge that gap. And a lot of times we're talking to companies that are actually successful and growing and working. Capital is one of the few, problems that growth does not solve. it it actually makes it worse.

Matt Haney 17:38

make it worse.

Jason Lippman 17:39

when you talk to new entrepreneurs, they're like, I always ask'em like, well, what, like, let's say you don't do this. what's the backup plan? What's the alternative? It's like, well, we're growing so fast. I mean, we're not gonna need this in six months. I'm like, you haven't done this before,

Matt Haney 17:51

I've heard that a

Jason Lippman 17:52

not, not only are you not gonna grow as fast as you think you are, so let's start there. but two, if you are that successful, you're actually gonna need twice as much, uh, than you think. I and so, if everyone, paid their bills the day that they've got invoiced, uh, then. wouldn't have a factoring product. And then there's a whole bunch of other stuff that goes with it, with asset-based lending and, inventory and equipment and all the other things. But, uh, at the end of the day, it is a pretty simple

Matt Haney 18:19

Yeah, pretty simple business. You're, you're too kind to yourself. so I want to go back, I just dealt with this with one of my clients who sold their company in November, but we, same thing. We had growth, growth, growth and that's great. And you're hiring and you got the, but eventually it all is like, ah, shit, everything comes together and you're liquidating 4 0 1 ks and you're doing all these things. And we had good, contracts and You know, good payment terms, but as you said, the more you put into the top of the funnel and the more comes through, the more challenges you end up with from a growth perspective. So I love that that is So true that new entrepreneurs, just assume they'll grow their self right through it. And sometimes they do. Right. but a lot of times you get stalled out with a pipeline of people and it's like, how can we have so much demand and people fulfilling it, but we're outta cash.

Jason Lippman 19:03

Yeah. And if you have to start, you know, pushing your customers to pay faster, those aren't the kind of conversations you wanna have with your customer. You, you want to figure out how to better serve them, expand the relationship. You don't wanna use your. Favors and relationships and phone calls on, hey, uh, can you call accounts payable and see if they can pay me tomorrow? Those are not the conversations that you wanna have to have with a customer. Of course, you know, once the bill starts getting out there, you need to have those kind of conversations and you gotta get paid for the service or, you shouldn't be doing it. But, certainly you wanna have a different kind of expanding the relationship conversations, not the how can you pay me quicker?

Matt Haney 19:39

Go back to your team. what was the team look like when you built Infusion? did you have that model? Obviously you'd seen what was happening and you were part of the success at Far West, but did you set out to do something different than the way Far West was structured on? And kind of talk through the logic as to how you built the team you have today and give us a little insight on who they are and what they do.

Jason Lippman 19:59

Yeah, I think I took a little bit different approach. I mean, it's one of the lessons that I learned at at Far Wests from, what we do in terms of the services that the products we were gonna offer. all that was exactly the same. We're gonna go after the same kind of customers with the same product lines, solving the same problems. We were hopefully gonna do it faster. Maybe with some better tech and blah, blah, blah. But at the end of the day, we're, we, were doing the same thing. Uh, but when it came to staffing, we, we took a, different approach. and that was only because of the lessons I learned. You know, while I was at Far West, the biggest one, was. our factory business, it's a high touch business. There is a lot of repetition, uh, a lot of back office requirements, and so There is a need for a lot of junior employees and we had the hardest time, as I'm sure a lot of other businesses do, of hiring, junior level employees. And keeping them there and keeping'em motivated and doing good work. And so when we started, the business, I just said, we're gonna build a model that doesn't have junior employees. We just weren't going to do it. If, it was something that a junior employee needed to do, we were gonna figure out a way. That either technology was going to do it or it was gonna get, outsourced. and so, uh, that was kind of the, the biggest differentiator. The, the second one was we were also trying to do it in Austin. again, these are two kind of old school bankers They kind of felt like people needed to be in the office. They needed to see and touch them. I, I didn't probably have that same sense, but I also knew the market was changing. especially, COVID hadn't happened yet. so we were a little bit ahead of that curve where we did not hire for people that the requirement was they were gonna have to come to Austin because I knew I'd be giving up talent that there were plenty of talented people I could hire that knew the industry, knew what we did. And then we'd go, can you move to Austin? Uh, no. or whatever. And so, uh, we were virtual, uh,

Matt Haney 21:49

So you were virtual. What year did you start and sort of when you were, you were hiring virtual before virtual school is what you're

Jason Lippman 21:55

Yeah, I mean, we started seven years ago, like the end, uh, of 2018. and yeah, we were ready. Like when COVID hit, it was kinda like a, like obviously there were a lot of things that COVID, uh, affected, uh, but at least from a, being in an office structure, things like that. I mean, we had an office here in Austin,'cause there's a couple of us here.'cause we needed a place to go. but everyone else was outside of Austin. And we continue that. Today we have, 35 domestic, employees. And I think we only have six or seven actually here in Austin. And everyone is spread out through the country. last year, we had, One employee that I was talking to and, and just came up in conversation. She happened to mention that she lives in Mexico. I had no idea she had been there for like six months. I've been, and this is someone I talk to two, three times a week probably. She has my interpersonal skills there that, that I had no idea that she lived in Mexico, but she was doing her job, getting shit done. It didn't matter to me. Uh, and still doesn't, So, so that, that was one of the biggest difference. So there's two components of that. Not, you know, forcing everyone to a specific geographic location, which means then you have to have kind of the teams, uh, structure, all that stuff. But it also, like, you can do that because you don't have junior employees, because junior employees are technically easier to manage and they need an environment to learn and those kind of things are harder to do. I don't care how much Zoom and teams and all that bullshit that you do, it's just harder to. To learn that way. So all the junior level function we outsourced, uh, to India from day one. And that was a lot easier because we started with, like. Two employees in, in India, doing a bunch of stuff. And then it's just so much easier if you start that way than trying to take a whole function that you have 10 people in the US that are, have a fiefdom and don't wanna get fired and having to outsource. So when you start by outsourcing it all right from the jump, it's a lot easier. So. we've just built out that team. We have two different companies that support us there, but at any given time, we have, 40 ish, employees in India working in our back office.

Matt Haney 23:52

So that would be the 40 working the back offices. So are there essentially the Indian employees and then there's 35 people that are not a part of India.

Jason Lippman 24:01

Yeah. We have 35 domestic full-time employees.

Matt Haney 24:04

when you set up the India piece. First of all, do you remember how you got started there? Like the first, I always think it's fascinating how people end up with their particular outsourcing company, their offshoring company. Like how did you know where to start and was, have you been with the same group of people from the beginning or like, are there still people that have been around for six years that you guys have?

Jason Lippman 24:26

Yeah, and, and I, I can't take any credit for that. First of all, uh, my, my first employee that I hired was AM Mercado. Uh, she was running a outsourced, uh, like a back office accounting firm for, she was managing 10, 15 different, uh, companies. And I knew with her accounting background. That she would be good at doing all of our accounting, but then she could also do like the operations side, because accountants can really understand the whole factoring, uh, thing. So she was employee number one. She had to shut down her, her finance and accounting back office thing, but she was already outsourcing a bunch of that accounting to India. So she was already. Used to, you know, doing phone calls at, you know, four o'clock in the morning, um, and, and understanding what they're good at and what they're not good at, how they're only as good as what you train them to do. They are very like, um, it's uh, it's kind of like that, that um, segment on, on Anchorman when they're like, oh, he'll read anything. You know, anything you put up there, he's going to read. And with our team in India, they will do, like if you tell them here's these 10 steps, they're gonna do those. 10 steps. Even if like step number nine doesn't make any damn sense and it's like they throw in three extra zeros, they're not gonna notice like they're gonna do exactly that. That's the beauty of it. It means like if we tell'em, here's the report that has to come out at nine 30 in the morning and it's gotta have these components and it's gotta do this at nine 30 morning every single morning. Like there's no, like my kid was sick, my, this was that. Uh, it's there like come hell or high water. It may not be done by the same exact person, or whatever, but they are very, consistent and the work that they're doing. I mean, frankly, nobody here in the US wants to do,

matt-haney_2_02-06-2025_192447 26:12

You are listening to the Scalability Code. I'm your host, Matt Haney, founder of Sinclair Ventures, and we help visionary entrepreneurs like you get out of the shit show and focus on growing your business. We offer fractional COO and leadership coaching services that free up that brain of yours to focus on what's next. Learn more about us at SinclairVentures. com. Now back to it.

Matt Haney 26:32

Yeah. Give us, because I know a little bit, but I don't think people realize the level of intimacy and the level of detail and the transaction volume. That your teams have to process in order to be successful as a factory company. So give us a high level process for, for kind of what it looks like to bring on a client and sort of what you're doing. And I mean, I'm just overwhelmed thinking through all the different pieces and I don't know anything about it.

Jason Lippman 26:57

I mean, the biggest thing is control of cash. I mean, that's kind of step number one in a factoring relationship as we talk about in our office. If, if you don't have control of the cash coming in, meaning the, uh, revenue coming in from their customers, then it's really not factoring, uh, we're loaning money against their accounts receivable if you're not collecting the money from their accounts receivable. it doesn't work. And so just the nature of that part of the relationship, you can imagine, a hundred clients. They each have, on average, I mean, let's just say 25 to, you know, 35 customers, so multiply that by a hundred. Those are all the customers we're receiving a hundred percent of all those payments from all those debtors, our client's customers all into one place, different accounts and, and blah, blah, blah. And that has to get processed, organized. Everything from a, oh, well the invoice was a thousand dollars, but they cut a check for$995. Like you have to process that. money comes in and you don't even know what it's for. You gotta go figure that out. So cash application is probably the number one thing. and we use a lot of technology that does it because you're talking about, hundreds of millions, of dollars. we process probably 50 million a week. across 35 different bank accounts. Yeah. And we're only making a, a certain percentage on uh, each, you know, a fraction on each one. And so if you You know, lose$10,000 or whatever, that's a lot of transactions you have to go process and make up. to get$10,000, you. can just take$10,000 and divide up by 2%, and that's like the next amount of invoices you have to go process

Matt Haney 28:35

Just to get back to

Jason Lippman 28:37

Just to get back to, to even. Yeah. but it's a lot of, and of course they do a lot more than just, cash application. They do a lot of our underwriting process, so like, uh, pulling out, you know, standardized reports and such. you can imagine, all the reports and stuff. We're pulling on a daily, weekly basis, uh, reconciling, you know, 35 different bank accounts.

Matt Haney 28:55

everyone's on a different system. I mean, presumably you're working with a business. I mean, yes, there's some commonalities in terms of. You know, accounting platforms and such, but like were you able to build a technology or how did that work? and I'm sure that's ever changing.

Jason Lippman 29:08

Yeah, and great question. I, I think there's two, uh, two strategies in in our business that you've seen. When companies start getting big, they decide, to invest in technology and write either their own, operational software, uh, or compliance software, what, whatever that is. Uh, I've never been a big, uh, fan of building our own tech. I'm not a tech guy. I'm, I'm not a software guy. I, I don't know how to go through that process of, of building it. and I also think we're one Of like a couple hundred companies that do this. there's some pretty good standard, platforms that already do what we're doing. and even though we all complain about them, oh, well, you know, here's the five things that they can't do. Uh, and you can go build.

Matt Haney 29:53

95% is

Jason Lippman 29:55

Yeah, you completely underestimate what it takes to build the other 95% And so you can go build a program that does that 5%, but you're gonna miss 25% that you took for granted'cause you just didn't think about it. And so we haven't built any technology since we started the business. I've said the, our technology, best practice is going to be the process and integrations of all these different packages and platforms and how they work together. And we've gotten really good at that. and it doesn't seem that special. I won't be able to sell the company for, you know, a 10 time multiple because I have some super, you know, technology. But the business has never been about technology. It's been about solving our, our clients' problems. And I just haven't seen a technology that does a much better job than what we're already doing today. And so we just, we've never invested in that. I mean, we've invested a bunch of time and we, we pay a lot of money to other software providers. We have a. A system on the factory side. We have a. system on the asset based lending side. A system for AP system like, and there's systems all over the place,

Matt Haney 30:52

speak to each other, or is

Jason Lippman 30:54

Well, they, they do now on our side.

Matt Haney 30:56

Yay. What'd you Do Tell me about that. How'd you

Jason Lippman 30:59

I think they're all built around. APIs, when we keep our business fairly compartmentalized. And so I, I didn't want to spend a bunch of time putting the systems together because I want the portfolios and platforms to operate, on their own. because we do have an octopus type, business model, at. least from a strategic perspective of optimizing across three or four different tentacles. So that if we did have a problem with one, not to say that you could cut it off and not affect the others. It, there's certainly, uh, but we run those portfolios as really a separate, businesses because it has separate, metrics. certainly different people, different skillset, different software, uh, to manage it. Um, there's obviously some common. Areas in our company, you know, like, uh, obviously hr, accounting, um, our sales, you know, anyone can, can sell across, uh, the, the product lines. But actually managing those portfolios, we keep, uh, pretty compartmentalized. And so I didn't want, you know, everyone's like, well, can you get it and put it all together and stuff? We put it all together? when it comes to doing the financials, um, and the borrowing base for our senior lender, of course. and that takes some time and, you know, it's kind of manual, but it, it's not. there's still great tools to, to do that.

Matt Haney 32:10

Well, let's shift the gears. I wanna ask you a couple questions about managing people. You've managed people your whole career. I was one of them. Uh, what, what are some of the struggles you, you see in yourself or, positives you've seen in people that you've worked with over the years? When it comes to. You know, you mentioned junior level employees and the accountability they need and management. Like what were your struggles and what were some aha moments you've seen?

Jason Lippman 32:33

Yeah, I mean, I think, uh, there's a couple things that I do well, and then there's a couple things that I don't do well, and I think that probably goes for every, owner or manager. I think recognizing that it probably took me a long time to recognize that, but like, I don't do great managing junior level people. I don't spend enough time with them. Uh, I don't particularly want to train them. I don't have the patience for it. Uh, like I'm just not good at that. So I, I, I struggled with that, which is good.'cause then that, so that was part of the reason why we didn't wanna hire, uh, any,

Matt Haney 33:02

Great.

Jason Lippman 33:03

what I'm really good at is like, I try to hire, uh, really good people. People that are smarter than me, uh, people that have experience, uh, in the areas, whatever expertise they have, um, at whatever level they need to be the expert in whatever they're particularly, uh, doing. Um, and then I need to get out of their way. if I can't do that, then I either, I hired the wrong person. Um, but we always talk about like, I'm gonna give you enough rope to hang yourself. That's not the right environment for everybody. So you gotta, interview for that. And of course, everyone says that. That they want like autonomy. They want to, drive their own thing and then do their own thing and be responsible for it But then push comes to shove and it's like, well. Now you have to. be responsible for it. that doesn't always work for everyone. So you know, we, we actually somewhat hire everyone says like, hire slow and fire fast. I mean, that sounds great. Uh, we've always been hire fast and fire fast. Like you're not gonna know what you have. Until you have it, like you can't interview. and these companies that do 10 interviews and stuff, I mean, great. Uh, for our business, that doesn't work. Um, we're gonna look at the history. We're gonna get a good gut feel. That means that not everyone, you know, makes it, Like on the sales side, it's easy'cause like the numbers don't lie. Uh, it's, you know, either produced or you don't produce. But it's pretty self-selective. We have a very, high performing team, and when you have a team member join that's takes on the same level of responsibility or doing the same level of, of kind of work and, and, and focusing on the company, doing all those things, like you find out real quick, and usually They kind self-select

Matt Haney 34:38

They Sure do. You mentioned this, I wanna jump on for a second. You said something about salespeople. Obviously I think salespeople are the easiest people to manage on the planet because they've got metrics, they're cash motivated. There's a dashboard to look at that says you're on track or off track. Did you find it hard and, and how do you handle this now where it's like. Understanding if somebody is successful, that's, you know, in an, in an administrative or a support role, meaning obviously there's their quality of work. But you know, if you look at those 35 people, would they all know in some way they're being successful, like at their job? And, if yes, how? And if no, how do you know they're not being successful?

Jason Lippman 35:16

Yeah. it's tough. and we put together like a, a crazy, like d dashboard and metrics for operational folks at Far West Capital. And, uh, I think it had the opposite effect. the good people, hated it. Yeah. Uh, everyone hated it, basically. It didn't, it wasn't motivational and and you're coming up with these kind of bullshit metrics. Just to say that you had a, a number of phone calls and then you have people making calls for no reason. and so, what we do is that we, we give people a lot of responsibility, to get the work done. Uh, we don't care, you know, when they do. it, how they do it. Frankly, if they can figure it out how to get their total job done in four hours, we wouldn't know if it took'em eight or not. Uh, and I frankly don't care. And so, as long as the work is getting done, and. You know, we see it in the, in the results. I mean, everything does come out at the end of the day. I mean, a, a good example is like an account manager. Um, we start having some AR that's aging off and I call the account manager, I can immediately tell if they're on. top of that It, it's one phone call, it's one discussion. you can really tell like, well, I've called, you can get the answer of like, oh, I sent them an email last week. Okay. Or you get the, I've called them three times. I've talked to so and so, so and so said this person was outta the office. I should hear back on this date and blah, blah, blah. And it's all documented in our system. And then I can go, okay, you're on top of your shit. I don't know how many hours it took you to get that. I don't care. But it's done. And, and so it's things like that where you can just, just tell and you start getting feedback too. I mean, if they're not returning phone calls and stuff, your clients are your clients are gonna let you know.

Matt Haney 36:54

It is a tough, tough scenario to, um, to step into a company of high performers like that. And I think you're unique in the sense that, creating that culture is hard. And you've mentioned it earlier, that if you're not performing, uh, and you're part of the process and you're holding back part of that process, it's gonna become very evident. And your people around you aren't gonna be okay with the fact that you're holding up something or your lack of performance is, is affecting someone else's or the overall company. that's interesting. All right, I wanna switch gears a bit'cause I do know. a lot about you And one of the things I love about you is you're a very intense person. I would call you a close friend, but a very intense human. what you do outside of work to, to fuel yourself and stay sane is fascinating to me. And I know you, you have a very successful endurance career and have run and done all sorts of adventure stuff. Are you still doing that today? And, uh, I know what you've transferred it? over to if you're not. So tell us about your, your, your, your outdoor running skills.

Jason Lippman 37:53

Yeah, I mean, I've always been a fitness enthusiast played soccer in college. and transitioned to, start running after college. just cause it was easier to manage. And, I've always been into kind of long distance endurance pursuits, got into, uh, triathlons and then transitioned into trail running, which is what most people do when they get old and slow. but I really love. Uh, being in the mountains and being able to go along in the mountains. And so if you wanna be able to do that, you have to stay in shape. And the only way to do that is by running. it's, the only thing I've struggled, uh, obviously with, uh, both getting older, uh, and just injuries. Uh, And, running's an awful sport. you're gonna get injured. Um, and it just takes a long time to come back, from that. So success we have come back from. You know, I'm now, uh, uh, a year from when I started running again, but 18 months for my double Achilles, uh, surgeries I had and, uh, running again and, and actually feeling like a runner again. it? took me a year, uh, to actually feel like a, a runner again, signed up for my first race. and it's been four years since I, since I had a race, but I signed up for my first race in September that I'm now

Matt Haney 39:06

Where are you doing it? And have you done it before? You know the

Jason Lippman 39:08

I haven't done this particular race. It's very similar to a, a race I did called, uh, UTMB, which is Ultra Trail of Mont Blanc, um, and which was one of my favorite races. It's a circumvention of Mont Blanc through three countries. it's like, it's phenomenal. Uh, and anything over in Europe is better than here. No offense,

Matt Haney 39:24

I agree. I agree.

Jason Lippman 39:26

you know. uh, same, same, general thing. It's in Switzerland. It's only Switzerland and Italy, but it's a ultra malt, uh, Rosas, it's called UTMR, much more low key. UTMB is a, an enormous, of people, and it's like it's like the World Cup of ultra running. And so this is much more, uh, low key still hundred miles and, and 39,000 feet of it's a, it's a, lot. Um, big, big mountain. And, and so training in Austin obviously is always a Uh, but yeah. it can, it? can be done. So, yeah. So, uh, I am running again. I love, you know, the people I run with and, and getting out there and, obviously I need that release, um, you know, get

Matt Haney 40:09

Are you the type of runner that will think of something and, and voice text to somebody while you're doing it, as you remember about a specific thing? Or do you, really try to stay in the, in the moment there?

Jason Lippman 40:20

Yeah, I, I, I very rarely think about work when I'm, when I'm running. Uh, I might start thinking about something when I start running, but it goes away pretty quick. Um, and I, I, don't, I don't have great ideas. every once in a while I'll think of something like, oh, I kind of need to do this. I certainly have never. Texted a business idea. I do when I'm driving. Uh, and people fucking hate it when I drive, uh, because I, I can't just sit there in the car and I can listen to podcasts. I'll have to listen to yours now. but, uh, so I, I make phone calls and I, and I get a lot of shit done in the car.'cause I got nothing else to think about, but for running, uh, I just don't, I don't think about Maybe I maybe, maybe I

Matt Haney 40:56

I I couldn't, I couldn't do that. I couldn't spend the amount of time that you spend, in that head space and not think about opportunities for growth. And, but I love that you're able to stay in the moment. Is that'cause you're miserable through the grind or it's just not, never been something that's never been part of it.

Jason Lippman 41:15

Yeah. Uh, a a lot of is, you are pretty miserable. I mean, most of the time when I'm running I, am, I, am. Uh, I wish I was that. like, oh, it was this zen moment and I'm like, peaceful runner. But usually something that hurts or I'm tired or, and I'd rather be walking. I'm finally now, and I was telling Angie this, uh, a, a few days ago that I'm finally gone back into shape where my easy runs are actually Uh, it, but it has taken a long time to get, to get back to that, uh,

Matt Haney 41:45

Has it been four years? Is that you haven't been racing in four years?

Jason Lippman 41:48

Yeah, I've paced, some races and stuff, but I haven't, uh, actually done a race. and, uh, and, but now through these injuries and, and feeling really good and,

Matt Haney 41:59

that's

Jason Lippman 41:59

knock on wood, hopefully I can stay injury free. Always ramping up the mileage, uh, is always, you know, the risk. we'll, we'll see how it

Matt Haney 42:08

not ramping up too much yet this far out. It's only February and you've got to go till almost February. You've gotta your, your races in September. So when will you start picking up that heavy mileage? You know, over the summer? The worst time to do it?

Jason Lippman 42:20

I mean now, to be honest, uh, you gotta build a pretty big, yeah, you gotta build a pretty big base. So, you know, we're, we're, getting into where, you know, 50, 60 mile weeks and long runs. We're doing 20 every weekend right now. I've got the Austin Marathon that we're pacing in a couple weeks, so that'll be my first marathon and a long time. Granted, it's like I'm just pacing it. So that's kind of nice, uh, at a

Matt Haney 42:41

But you're pacing at a different rate, right? You're not gonna, obviously your, your, UTMR race pace is not what the marathon, what's

Jason Lippman 42:47

Yeah. It's. Uh, I think I'm on the 3 55 group, so it's, it's, it's super slow. I didn't, no offense to anyone running 3 55. It's, it's, it's a, it? should be a benign pace. Um, you know, tha hopefully, uh, still at the end of the day, no matter how slow you're going, it's 26 miles. It's still, you know, it's still, uh, it's still some work for sure. There's a big difference, like these training runs I'm doing at 20. There's a big difference, uh, at, at the end of 20. I don't feel K, that's Uh, so yeah, running,

Matt Haney 43:15

on the road. That's not at Elevation.

Jason Lippman 43:18

Yeah. Um, but the rim suit and, and running's good and there's only so much running you can do and it's super efficient. People are like, how do you have time to do there's only so many hours that you can actually run.

Matt Haney 43:28

Right.

Jason Lippman 43:29

you know,

Matt Haney 43:29

Yeah. All right. Let's finish with my favorite hobby of yours, which is aviation. And that's a new hobby for you How the hell did you get into that? I don't even know how that started. I just remember one

Jason Lippman 43:39

I mean, that, that is just the, the purest midlife crisis you. could have. I mean, I as like. Uh, verbatim of like, oh, I'm turning 50. Um, and you start questioning, you know, uh, things you've done and things you haven't done for me, it was always like, I always wanted to do it. and I got to an age where I'm like, if I'm going to do it, like now's the time if I waited any more. It's kind of a ways because you do age out of that hobby fairly quickly. Um, and I always wanted to do it. Uh, my wife was super scared about it. So, uh, it started out with, uh, being a challenge from a relationship perspective, but it got to a point where it was like, Hey, I just, this is something I have to do. You never have to do it with me. I just wanna do it. I don't know where it's gonna take me. I might quit in two weeks. because the, Memorization side, like the learning side, uh, flying plane. Super fun. Uh, obviously, And that's, you know, but there is a lot of book smart that goes into, uh, getting that done. And I didn't know if I had the chops for that anymore. Both the, uh, I, I've never been the smartest, uh, guy. For sure. Uh, dyslexia, uh, to the nth degree. Memorization is super hard for me. And so, uh, I knew that the book side was gonna be a super challenge, uh, for me, uh, that it was just gonna require a bunch of time and, flashcards and, and, and like, we're old now. Like, you don't want to get up at five o'clock in the morning and start cramming for a test anymore. but you. have to do that. And it's multiple tests and once you get into it. Uh, and that's when you find out like, do you really wanna do this? Or, you know, do you just wanna learn how to go play golf? so I really did, uh, enjoy it. I caught the bug. Um, and I do love it. I love the challenge of it. I love the, the balance of like the intellectual challenge, uh, for sure. but also just like every day you can get a little bit better, to be a real professional at it. Like it takes a ton of work and I'm still just scratching the surface. I'm, know, 700 hours in, I have a commercial pilot's license and I'm always learning first of all, but there's thousands of pilots that are way and better is not like the right word for it. Uh, but their level of experience and professionalism and the things that you can learn from them are incredible.'cause no matter how much school you go to and stuff, there's no substitute in the air for that, that? in air experience. And there's always like a next thing to go get. And for me that's for someone who's a, you know, goal oriented, always having the next, mountain to go climb. I love it. I'm working on my multi-engine. Uh, right now I don't even need it, but it's like, you know, I want to go learn it. And so I'm studying, I I did flashcards yesterday'cause it was a snow day and things slow, so I was doing flashcards on the

Matt Haney 46:14

how do you, um, how do you, do you feel like, getting ready for this race and training is taken away from that piloting piece? Or, or like how do you not stay dis I mean, you're distracted by these things. You love your relationships, your work, your applying, the running. Like how do you focus and compartmentalize that stuff?

Jason Lippman 46:33

Yeah, compartmentalize is like a great, way to do it. First of all, I'm, pretty adamant about, about that. Uh, I'm not a huge sleeper, uh, so that helps. Um, like I've always been able to operate on a fairly low level of sleep. but, none of these things in itself, like take up that much time. And I look at like how I could be, I don't wanna say wasting my time, but like. don't do social media at all. Um, and I'm not saying there's anything wrong with social media, and I know there's a big debate going on over

Matt Haney 47:02

But it's a huge waste of time. Let's not act like it's not.

Jason Lippman 47:05

It's a lot of time. There's some benefits to it too. My wife knows more that's going on with our friends or whatever. And if I wasn't such an asshole, I would care more about other people and what schools their kids are going to. And, and I just don't keep up with any of that stuff. I don't have, like, I don't have room for it. And so I don't spend like really any time, on that. there's plenty of things I do waste my time on. I mean, it's not like, you know, I don't watch TV and, do a lot

Matt Haney 47:29

It is not like you're not on the controller website scrolling through airplanes looking at avionics packages.

Jason Lippman 47:35

Can you see my other, Can you see my other, screen right now?

Matt Haney 47:37

been there.

Jason Lippman 47:39

I literally have controller up with the vision jet

Matt Haney 47:42

You do. Looking at a,

Jason Lippman 47:44

have the prize, you gotta have the eye on the prize, man.

Matt Haney 47:46

Gotta have it. No, you said on something earlier that, you know, you and I have talked about aviation a lot, obviously, and. your commitment to doing it? My fear openly throwing it out there is that it's hard to get the ratings done and the memorization and the commitment and, you know, uh, scared to start is kind of one of those things that I struggle with, or it's like. I really want to do it, but I don't wanna set myself up for failure. So it's just easier not to, well, you're the absolute opposite of that. I think once you put your mind to something, you're gonna run through the wall to get it. and I admire that quality about you, that stubbornness. I'm sure Angie would say it's, uh, a bit challenging as well. She might also argue that all the things you do take time.

Jason Lippman 48:24

Uh, no. I'm sure

Matt Haney 48:28

I want to thank you for your time and. the story and the opportunity to hear your background and obviously to catch up with you. And I'm glad to hear you're, you got another event coming and also that you're working on your multi-engine rating. That's cool. So, wanna say thank you and want to catch up with you in a few weeks and hear how things are going. So thanks for joining us Jason.

Jason Lippman 48:46

Matt, great job by the way. I was coming into this thinking like I've got about two minutes of shit to talk about. So it shows you what a great, host you are. and it is good to watch like you in this professional environment and anytime I see someone who's doing like something that I would never be able to do what you're doing and do it in such a great way, in a professional way. And make it comfortable, and I could have sat here and talked for another couple hours. it. shows you just like what you do is super hard. and I know how you're helping your clients. I can't imagine the things that you're doing there. So one of these days we'll have to like, flip the script and, and hear more about that. But I appreciate you having me on and, I enjoyed, uh, enjoy the time.

Matt Haney 49:23

you've always had a special place in my heart. You gave me an opportunity. I got to watch you, uh, in the best of times and the worst of times, and I'm, I'm proud to call you friend and obviously, love the journey you've been on and love the fact that you just keep getting up and going after it.

Jason Lippman 49:39

Thanks, man.

Matt Haney 49:39

So

Jason Lippman 49:40

it.

Matt Haney 49:40

awesome buddy. See you later.

Speaker 49:41

Thank you for listening to The Scalability Code. If you made it this far, please follow the show on Apple, Spotify, YouTube, or wherever you get your podcasts. Let's get out of the sh*t show together. We'll see you next time on The Scalability Code.