Season 2, Episode 7: BERNIE MORENO: the delusional optimist
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 there is a real thirst to explore their hearts and minds in atypical ways. Today's guest is Bernie Moreno. We'll start with Bernie telling us about the conference he organizes called Blockland that is centered around blockchain technology and later he'll talk about his newest company that deals with the way cars are titled using that very technology. But before that, we'll hear about the development of his car dealership business and the philosophy that drove its success.
Dave Douglas: Bernie will talk about defining your business and how that definition can affect operation in dramatic fashion. We'll also learn about how he led his business to some of its greatest successes during an economic downturn. He'll also be talking about his family's immigration to the US when he was a child and how his parents made the decision to humble themselves in order to reinvent themselves. He'll let us in on what he thinks is the future of the car industry, specifically regarding autonomous vehicles and we'll hear some of his life philosophies including the importance of persistence. You're listening to the Up2 podcast. We're glad you're with us. We'll be right back.
Adam Kaufman: During the first season of the Up2 podcast, I had several companies and entrepreneurs approach me about potential partnerships, but I'm really selective before choosing to do something like that. One choice we did make happily is to partner with Vivid Front, a full service digital marketing and website design agency based in Cleveland that works with both local and national brands. They've built their entire client base on referrals and they've won a lot of awards, including the 2019 Inc Magazine Top 5,000 Fastest Growing Companies, North Coast Top Places to Work, and several others. They're known for their talent, they're known for their creativity, they're known for their culture, a firm I liked before we agreed to partner together for the show. Check out vividfront.com or you can email me and I'll introduce you to their dynamic leader, Andrew Spot.
Dave Douglas: Welcome back to the Up2 podcast, your host Adam Kaufman.
Adam Kaufman: Our guest today was born in Columbia and his family immigrated to the United States around the time he was beginning elementary school. At a young age, he demonstrated a keen interest in automobiles and he got his first internship with General Motors and soon after that a job with Saturn. After learning the trade for several years, he had the opportunity to purchase an underperforming Mercedes Benz dealership around 20 years ago. Saying that he turned that dealership around would be an understatement. Bernie's Benz operation became one of the most successful and most awarded in the United States and he expanded to more than 15 dealerships representing 30 car brands. And something I noticed firsthand on countless occasions, this leader was able to build his successful business while earning the respect and what seemed like a genuine friendship with his employees. All of the smiling at his dealerships made evident the enviable culture our guest today created.
Adam Kaufman: During this supercharged growth phase of his career, this husband of one and father of four also found time to donate significant energy and money to charities dear to him. He has served on several boards of large institutions like the Rock & Roll Hall of Fame, the Cleveland Clinic, as board chairman of a major public university and also a community college foundation board. A few years ago, today's guest decided to make a significant pivot in his career, moving away from an almost unimaginable level of success in the auto industry to focus most of his time on technology, specifically the nascent blockchain industry. In fact, less than 24 hours ago, our guest concluded his chairmanship of a three day international blockchain conference, having convened 1,500 technologists, entrepreneurs, investors, and thought leaders at the second annual Blockland conference.
Adam Kaufman: Our guest is an investor in real estate and in startups and he's also become an influence in politics and policy, backing candidates he believes in, in pursuing public policy he thinks will benefit the masses and stimulate economic development. A real force in the community, this leader is diplomatic but not afraid to be candid and to advocate for his beliefs. And we love authenticity here at Up2. I've been fortunate to enjoy friendship with today's guest for nearly 15 years and we're grateful he's able to spend some of his valuable time with us today. Bernie Moreno, welcome to the Up2 podcast.
Bernie Moreno: Thank you for having me, look forward to our discussion.
Adam Kaufman: What have you been up to?
Bernie Moreno: I've been up to a lot, certainly the last three days. It was great having this conference here. This technology is really going to change our future and for us as a community to be at the leading edge of that is really exciting.
Adam Kaufman: How do you measure the success of a conference? I've chaired a conference before and it's not exactly like a business where you're pumping out widgets. How do you measure a successful conference?
Bernie Moreno: Yeah. Certainly the way we do, this is only the second conference I've ever organized, so I don't have a big track record there, but last year we had 1,500 people. This year we had 1,500 people so we didn't see drop off. I think that's number one. It's December in Northeast Ohio. So it's not exactly the most compelling time to come here yet we had a lot of-
Adam Kaufman: Not really a destination conference.
Bernie Moreno: It's not where you say you're in Miami and it's really sunny. Well let me go somewhere really cold in December.
Adam Kaufman: That's why I missed your conference. I was at Art Basel last week.
Bernie Moreno: See, there you go. You were buying $125,000 banana.
Adam Kaufman: Right.
Bernie Moreno: Duct tape.
Adam Kaufman: Exactly.
Bernie Moreno: So, but back to your question, I think the answer is also the quality of the speakers. We had Thomas Kurian who is the CEO of Google Cloud. We had Simon Mulcahy who is the CIO and executive VP at Salesforce, probably the number two guy in that company. We had Don Tapscott, who is the founder of the Blockchain Research Institute speak. We had Bob Wolpert who heads up a company called Golden State Foods, which nobody's heard of probably, but everybody's used. They supply 125,000 restaurants all over the world. And he's a chairman of the food trust with a small little company called Walmart, Kroger, IBM, Nestle, and he's a chair of that. And they're using blockchain to track food for food safety and food waste reasons. So he talked to us about that. And then on Monday we were kicked off by a guy named Jeremy Gutsche, who runs a website and organization called Trend Hunter, and really talked about the importance of understanding where the future's going to be so that you don't get left behind.
Adam Kaufman: So the food trust, I hadn't heard of that. So those huge corporations created this food trust?
Bernie Moreno: Correct.
Adam Kaufman:And can you explain again what the trust is setting out to do?
Bernie Moreno: So, do you remember the romaine lettuce problem?
Adam Kaufman: Oh yes.
Bernie Moreno: So what happened was there was some romaine lettuce that was tainted, but they didn't know where it came from. So the answer became, throw away all romaine lettuce and then which was insanely wasteful. Millions and millions of pounds of romaine lettuce got thrown away.
Bernie Moreno: What they did by using blockchain technology, which is basically an immutable ledger that keeps track of this, what they can do in the future if there's something like this, they can know the exact date and farm that the problem occurred so that they isolate that issue as opposed to having to take the kind of action took before. But also around food waste, which is how do they track the amount of food being discarded to minimize the amount of waste in the system. So that's why these big companies all got together to do that.
Adam Kaufman: We're going to spend more time on blockchain in a bit, but let's go back in time a little bit to the car business, your past career. You started at such a young age and then you brought in lots of different brands, different price point. Was your thinking to have cars for each type of shopper or how did you end up having everything from GMC to Aston Martin and so many other brands in between?
Bernie Moreno: Yeah, so we started with Mercedes Benz is our core and then we grew the luxury business really well, but we wanted to broaden the volume. And so we brought in Nissan, Kia, Volkswagen, Buick, GMC, Acura, Mini. That was really to help us scale so that we'd be a larger company and not just be a niche in the luxury world. That was basically a growth strategy that we followed.
Adam Kaufman: And at the peak, how many team members were under your employ through all those different dealerships?
Bernie Moreno: About a thousand.
Adam Kaufman: That's amazing. And I'm not just saying this to patronize you because you're our guest today, but the happiness factor inside your locations was just so palpable. I don't know what the mission statement of the company was, but I feel like it was happiness and excellence. That's it.
Bernie Moreno: Well, we had a vision statement. I can tell you what it is, but the more important part when it comes to our team members, we had 10 commandments.
Bernie Moreno: So I grew up Catholic and went to Catholic school and we got pounded in the 10 commandments. And so I looked at the 10 commandments since everybody kind of knows what they are. They're relatively negative, right? They're not exactly the most uplifting 10 commandments in the world. So we created 10 fun commandments that really were the commandments that every team member in the company didn't need to look very far to understand what the expectations were. So the 10 commandments were something that everybody physically carried out. They were on our walls. It was something that we talked about literally every single day. And commandment number one is thou shall have fun.
Adam Kaufman: So my observation about happiness, I guess it wasn't by chance. It seems like that was something you guys focused on.
Bernie Moreno: Correct. Yeah. It's literally the first commandment, the most important one.
Adam Kaufman: I don't want to put you on the spot and have you regurgitate all of them, but maybe we'll add them on our website later if that's okay with you.
Bernie Moreno: Sure. Of course.
Adam Kaufman: I think people would be interested.
Bernie Moreno: Yeah, absolutely. It's like the Bible's 10 commandments. You remember the first one, right? Thou shall not kill. The rest of them get fuzzy after that. But everybody knows killing bad. So in our case, it was fun first because let's be honest, you're going to be at work more than not. You're going to be at work eight, nine, 10 hours a day. You sleep about eight. So that leaves six hours that you're not working, 10 hours that you are. Do you really not want to have fun most of your life? That's crazy.
Adam Kaufman: I love the philosophy. Didn't you bring rare coffee in as well? I remember when you opened that espresso bar, but it wasn't just coffee. It was some rare Colombian coffee.
Bernie Moreno: Yeah, the greatest coffee in the world.
Adam Kaufman: Of course.
Bernie Moreno: Certainly the most expensive coffee in the world.
Adam Kaufman: So that's the excellence piece of my observation. Happiness and excellence. You had to have the best coffee.
Bernie Moreno: Right. That's one of the commandments is thou shall pay attention to details because the way we viewed it when we were at a luxury car business, luxury, what does it mean to have a luxury experience? Right? We talk about that all the time. We recognize it when we see it, but how do you define it? So what we did is we defined it and we defined it as a million details done perfectly. And so the coffee isn't just about serving coffee. Anybody can serve coffee.
Adam Kaufman: Sure.
Bernie Moreno: But do we serve the best coffee in the world in the best possible way? So we don't have paper. We had silverware, we had dishes the right way and this coffee is, we've had many clients that said, "Oh my God, this is the greatest coffee I've ever tried." And then they go onto the website to buy it and they have sticker shock. It's $135 a pound.
Adam Kaufman: Wow. I didn't realize that.
Bernie Moreno: Yeah.
Adam Kaufman: How did you develop this service excellence standard? Is that something you were born with or were there other leaders that you admired that you wanted to emulate or where do you think all that came from?
Bernie Moreno: Well, it's how you define your business if you're going to be in the luxury business. We really spent a lot of time understanding what that was. What does it really mean? And what does it mean to deliver a luxury experience? And it's rare. It's not something that a lot of people get to experience. Alternatively, we could have competed just on price. And when you compete just on price, you're a commodity. So we were certainly very aggressive with pricing. That's for sure. But we had to add the element of the luxury experience so that we gave our clients less reason to leave us and more reasons to come to us.
Adam Kaufman: And that's an answer to why did you bring in excellent coffee. But what I'm wondering is how did you even learn to do that? Because other luxury car dealerships didn't bring in $130 a pound coffee. So do you think this just came naturally to you? A lot of things that we're good at, we just think, oh, I just brought in coffee because that's what we should do at a luxury car brand. But that isn't natural thinking for everyone. I really want to get inside maybe your head or your training a little bit, your heart.
Bernie Moreno: Sure. Well, like every other human in the world that we have two parents. And so I had on one side, my mother that taught us to be fearless. Whatever we're going to do, we do it.
Adam Kaufman: Go for it.
Bernie Moreno: Go for it. And then under my dad, it was to be excellent at whatever it is that you do. So if you're going to do anything, whether you're a shoe shiner, you just be the best shoe shiner in the world. And so you take both those things and you end up with a delusional optimist, right?
Adam Kaufman: Delusional optimist. That can be the title of the show. The delusional optimist.
Bernie Moreno: Exactly. So when it comes to luxury, you have to, and I think this is the lesson that that, and I read a lot, I read a lot about people that succeed, whether it's Steve Jobs or even Mark Zuckerberg, Mark Randolph who founded Netflix.
Bernie Moreno: You read and you try to find common threads. And one of the things that I've concluded, at least for myself, is that it all hinges on how you define your business. When I was in the retail automotive business, it wasn't that my business was selling cars. That's a very narrow way to look at that business. I looked at it as we delivered fantasies. We made dreams come true.
Adam Kaufman: So it's experience rather than transactional thinking.
Bernie Moreno: The car was the incidental part that went along with it, so my competition wasn't the dealer down the street. My competition was the Ritz Carlton, the Mandarin Oriental, Federal Express, Amazon who could deliver an experience like that.
Adam Kaufman: Love that.
Bernie Moreno: Something kind of the guiding force for us was we wanted to deliver an experience that made clients go, "Hmm." That was the goal where it was just like, for example, the coffee bar. I was like, "Hmm, that's interesting." Because again, your alternative is to define your business very narrowly and say my job is to sell this piece of metal to that client and I'm going to do it as cheaply as possible, and then you race to the bottom with your competitors.
Adam Kaufman: It wasn't an overnight success though. You've shared with me before the 2008, 2009 probably it was like a lot of people in America, there were some tough times with business owners. How did you get through that? Maybe on the financial side. Did you have to lay off any employees?
Bernie Moreno: Well, let me give you a little bit of background first so I can answer that question. So when I moved to Cleveland in 2005 to buy this dealership, I did it with every single solitary dollar that I had ever seen, heard of, viewed in my entire life.
Adam Kaufman: You were being fearless like your parents told you.
Bernie Moreno: This was fearless. This was plan B was to be a really great drive through operator at McDonald's because I was going to be flat broke.
Adam Kaufman: Backup plan, yeah.
Bernie Moreno: That was the backup broke because this was every chip, every chip. It wasn't a lot of chips. It was every single one. So that's number one. That was 2005. Then of course, what do you do when you're all in? You then start to expand. I did it with no partners, no equity partners, only with debt. Bought another dealership in 2006. Bought another dealership in 2007 so every cent that we were making was plowing back into the business. Maybe I'd say for every dollar we made, we'd plow a $1.25 into growth.
Adam Kaufman: Wow. Leveraging even more, the more you sold.
Bernie Moreno: Leveraging even more. Exactly. And then 2008, 2009 came in. I guess I would answer your question this way. That's like asking somebody who went to Vietnam, whether there was a disturbance in the neighborhood that they visited. It was absolute bloodshed and horror.
Adam Kaufman: I was trying to be understated. I didn't want to say more than you wanted to.
Bernie Moreno: It was armageddon. It was a biblical experience, 2008, 2009 for the car business. You went from selling 17 million cars a year nationally in America to 10 and it literally happened overnight. Nobody says when their stock is down 40%, I'm going to go buy myself a brand new Mercedes Benz. If I'm laying off thousands of employees, that CEO doesn't say it's definitely time for a brand new car. So this was a really tough time and we were massively leveraged. We were growing like crazy and we made the decision. When I say we, with my team, with my leaders, to say we're going to do the exact opposite of what every other person is doing in our shoes right now. Everybody else is figuring out how to do less with less. How do you trim staff? How do you get rid of support services?
Adam Kaufman: Cut back on marketing.
Bernie Moreno: Cut back on marketing, come back on team members.
Adam Kaufman: Extras.
Bernie Moreno: Everything.
Adam Kaufman: Benefits.
Bernie Moreno: We did the exact opposite. We doubled and tripled on everything. We increased our marketing budget, we increased our staff, we added the number of loaner cars that we had. We took our service to another level, we invested in facilities. We spent $15 million renovating our Mercedes dealership. The day that Lehman Brothers went broke, that week we opened. And it was either going to-
Adam Kaufman: Wow, that was a low point.
Bernie Moreno: Well, I figured if you're going to go down, you should go down in a blaze of glory, right? So we chose a path. There's only so dead you can be. So if you're going to be dead, be 10 times dead is no big deal. So what we did is during that period of time, we took the bet that the market would reward us and it did. And we actually experienced the greatest level of success in our company in 2009, 10, 11, and 12. Those were our absolute best years.
Adam Kaufman: So you were grabbing land during the leaner times nationally, investing, knowing hopefully America would get out of this economic downturn. And that proved to be true.
Bernie Moreno: Well, yeah. And the thesis was, well, okay we went from 17 million to 10 but there's still 10 million cars being sold. So why don't we take our disproportionate share of that? And so when a client, it came down to just obvious practicality, a client would call us and have a certain level of experience and they'd call our competitors. There's nobody to talk to because they had gutted their staffs, their staffs are totally demoralized. They didn't provide the level of service. So that one person that was in the market to buy a car, it wasn't like everybody went, it didn't go to zero, they bought a car from us.
Adam Kaufman: Was it hard to keep morale up internally? The morale that I'm speaking so highly of about your-
Bernie Moreno: No, because we were winning in a big way then, so the morale, the opposite also happened, which is now the death spiral happened to our competitors and we took the upward spiral. So what happened was, well, where would you want to work? The dealership that's dying? We had some companies were cutting away Christmas parties and 401ks. We were adding to our 401k. We were having a great Christmas party. We had more events.
Adam Kaufman: Tremendous.
Bernie Moreno: And so we were able to recruit the best of the best and build our business that way because we were able to recruit these incredibly talented people that were at other dealerships and other businesses and they wanted to be with a winning team.
Adam Kaufman: It's hard to believe that was more than 10 years ago. Now with the benefit of time, reflect back a little bit. What did you learn about yourself during those moments when maybe you weren't sure should we aggressively invest right now?
Bernie Moreno: I'd say that the answer is indecision is your enemy.
Adam Kaufman: Indecision is your enemy.
Bernie Moreno: You have to make a decision. You have to be confident in yourself. There's certainly a fine line between conceit and convince, but you have to be absolutely convinced in what you're doing. You have to believe genuinely in your inner core that you can accomplish anything and you have to be bold. You have to think, right? All of us have to think, well, why not think big?
Adam Kaufman: And take risks.
Bernie Moreno: Right. Right. And calculated risks but you have to be willing, and that risk really is dependent on how much you believe in yourself. And you just got to get it done. And I think sometimes we underestimate the power of just persistence. Just genuinely be persistent. We think that a lot of these things have to happen with brilliance. It's not. It's you have to have this idea that you just will not give up and you will push no matter how hard it takes to get something done.
Adam Kaufman: I think you were a risk taker early on. I read preparing for today that you wrote a letter to the chairman of General Motors when you were 14 years old.
Bernie Moreno: Yes.
Adam Kaufman: What compelled you to do that?
Bernie Moreno: I didn't like the strategic moves he was doing. So I figured he needed some advice.
Adam Kaufman: As most 14 year olds are analyzing public company strategies and five year plans.
Bernie Moreno: Exactly. I was concerned about his moves that he was making with General Motors and I thought I had something to offer.
Adam Kaufman: And he replied to you, right?
Bernie Moreno: He did. He did. I gave him, I had been studying World War I in school, so I remember Wilson, I think it was nine points or something like that, on how to resolve the European conflict, so I gave him my nine points on how to fix General Motors. And at the end of the letter I said I'm going to go to school, I'm going to study, I'm going to work hard, and I'm going to take your job someday. And so he thought that was funny. So he replied back and he actually responded point by point and addressed each one of the issues that I had come up with.
Adam Kaufman: You still have the letter?
Bernie Moreno: Yeah. Well I don't have the letter I sent him because kind of 14 year old doesn't think about stuff like that to keep it.
Adam Kaufman: Pre-internet too. There's no digital copy of it.
Bernie Moreno: There's no digital copy. But I do have the letter.
Adam Kaufman: His response.
Bernie Moreno: My mom kept it and a few years back my wife and my mom got together and they framed it for me and I keep it in my closet so I look at it every day when I get dressed.
Adam Kaufman: That's awesome. Now you just mentioned your mother again. Speaking of your family, you came here from Colombia. Can you talk a little bit about your family? We're all born into somebody else's story one of my mentors has taught me. Talk a little bit about what story you were born into.
Bernie Moreno: It's a very unusual story. So my mother's family, it has a long history of, I'd say outsized privileged, which is typical in South America. My dad's family is the same way. They-
Adam Kaufman: Outsized privilege. I haven't heard it explained like that. What do you mean?
Bernie Moreno: Meaning that generationally wealthy for a long time. In fact, I like to joke that in a lot of these developing countries, the families that have wealth forgot how it is that they have so much money. So that's the case. So they'd been there for Colombia for a while, generations back, very successful on both sides of the family. My mom was an only child, but her dad was extraordinarily successful. My dad was one of 11 kids and his father was extraordinarily successful, massive amount in some industries. My dad went through the best schools, got his master's degree at the University of Pennsylvania in medicine.
Bernie Moreno: He went back to Colombia to be the Dean of the medical school there at a very young age, in his mid-thirties. My mom, even though it was the 50s, late 40s, early 50s came to the United States to get an education. That was something my grandfather pushed on her and things were going really well financially for the family in the 60s and my dad was equivalent of what would be the Secretary of Health. There's an organization in Colombia, which is basically a closest analogy would be the Department of Health.
Adam Kaufman: Sure. Minister of Health.
Bernie Moreno: Minister of Health. Yeah. And one day my mom decides that she is very disappointed in the way that she felt the family was being raised, that we were seven of us and that we were being raised in an entitled way and she didn't want us to be raised that way. So she packed up 23 suitcases, seven kids, and flew to Fort Lauderdale where her mother had a condo, a two bedroom condo, by the way. And all of us lived there and my dad joined us later and he had to get his medical license in Miami. So the real story is we basically came to the US to have my mom show us, not just tell us, show us what it was like to live the American dream, which is that you start with some level of modesty, so lower middle class type life, and then it's up to you to achieve wealth and not have it be given to you.
Adam Kaufman: So you were five then, so you weren't aware of all of your mother's thinking.
Bernie Moreno: Oh my God, no.
Adam Kaufman: You just went because Mom said we're taking this trip.
Bernie Moreno: Yeah. Yeah.
Adam Kaufman: Did she tell you this thinking later or it's just learned over time and observed through kind of family heritage.
Bernie Moreno: No, certainly observed. There were some observations. I mean, we had multiple homes in Colombia. The house that my dad grew up in is so large that it was converted into the embassy for Germany. It's a giant home and we had farms and people, you have staff. And then now we're in a two bedroom condo. There's 11 of us living in there, a two bedroom apartment. So you do think hmm, this is odd.
Adam Kaufman: Right.
Bernie Moreno: Right. And then we ended up buying a small little home in what was then the western part of Fort Lauderdale. Now it's the eastern part of Fort Lauderdale.
Adam Kaufman: You were educated so did you all already know English?
Bernie Moreno: No, I didn't know. In my case, I didn't know a word of English. My brothers did. I'm the youngest of seven. So my oldest brother at the time would have been probably just about to graduate from high school. So he was fluent in English. He had been born in America. My three oldest siblings were born in Philadelphia where my dad was getting his master's at Penn. So they spoke English. They were bilingual. Obviously my parents were bilingual, my siblings were bilingual. But at five, you're really not even lingual.
Adam Kaufman: You're still learning the basics.
Bernie Moreno: Exactly. So, but, and that didn't deter my mom from enrolling us all in school. Now remember, this is 1971 so if it were 2019 it would be a lot easier. But in 1971 there wasn't a big compelling group of population that you could assimilate to that spoke Spanish in South Florida. So I started kindergarten and didn't speak a word of English. I sat in the classroom all day-
Adam Kaufman: That's an obstacle.
Bernie Moreno: Wondering, I got to figure out what these people are saying. So we had to find creative ways to learn English quickly.
Adam Kaufman: And Fort Lauderdale wasn't as Latino as it has become, right?
Bernie Moreno: Zero Latino. It wasn't non-Latino. Zero Latino. The small presence of Latin Americans existed primarily in very small pockets in Miami. Fort Lauderdale was as we used to say, 100% WASP. There was no Latino. Zero.
Adam Kaufman: Well that's interesting. There's almost could be a pendulum effect. You want to quickly become Americanized and learn English, but I imagine your mother wanted to hold on to some of the heritage. How does heritage play out then or in your life today, do your kids go back to Colombia? Does anyone speak Spanish or is it more about the food you eat or the faith you practice?
Bernie Moreno: I think my mom and dad took the approach on that one, and this is maybe not, I'm not suggesting that this is right or wrong, it's just what happened in our family-
Adam Kaufman: Right. Right.
Bernie Moreno: That when we moved to the United States, that we were going to become Americans and that that's what we were. Doesn't mean that we were no longer Colombians, but in terms of the way we behaved, practiced, communicated with each other, thought of ourselves was really that you're just, you're an American. So there's certainly an idea that we have relatives that live in Colombia, but if you were to say, where's your allegiance, thoughts, heart, it's we view ourselves as we became Americans because that's why we came here. Because if we wanted to stay Colombian, we probably would've just stayed in Colombia.
Adam Kaufman: Yeah I think you're right. There's no right or wrong to that. It's just interesting how different families-
Bernie Moreno: Exactly.
Adam Kaufman: Play out heritage. I have this special feeling when I visit the village in Lebanon where my grandparents were from and I can't say that, I don't know if I'm different now, but it definitely was a high point in my life to do that for the first time. So now I've been returning and I want to take our kids there. But I think different people do it in different ways.
Bernie Moreno: They do and in my particular case, that was just not how we were raised, so it just doesn't even cross my mind. When I do go to Colombia, I do go there, not that often, but I do, my many billion cousins that I have that I don't know, everybody there calls you a cousin.
Adam Kaufman: Of course.
Bernie Moreno: But they call me the gringo and they, I think they view-
Adam Kaufman: Oh you're the white guy to them.
Bernie Moreno: Yeah, yeah, yeah. Well I think the American but I think they view it as a little bit of a shot. I view it as a compliment. So I don't-
Adam Kaufman: They're envious, don't let them trick you.
Bernie Moreno: Yeah. I look at it that way. Yeah. And again it's not about who's better or not. I just, the minute I could become an American citizen, I did, which was when I was 18 years old. I think America is a really special country.
Adam Kaufman: Absolutely.
Bernie Moreno: What makes this place amazing is that what I saw first hand, I mean we got here and anybody can do anything. My dad went from driving in the middle of the night to do rounds in a building to get his medical license even though he was 40 years old, master's degree, PhD, Secretary of Health, dean of the medical school. And yet there he is with 25 year olds doing rounds at midnight in the only hospital that would take him under those circumstances. And he had to eat crow to do that. And then later became chief of staff, chief of surgery at the hospital, very prominent physician in South Florida. And I saw that first hand and that wasn't with because somebody handed that to him.
Adam Kaufman: Sure.
Bernie Moreno: That was because-
Adam Kaufman: Merit.
Bernie Moreno: Merit and my mom, who was raising seven kids, built an incredibly successful real estate practice with three offices, 100 plus associates. Not because anybody handed it to her, but she worked like a mad woman to make that happen. So to see that that's only possible in the United States. That's not something that exists anywhere else on Earth. In Colombia, if you're wealthy, you cannot work hard enough to become un-wealthy. And if you're poor, you can't work hard enough to be wealthy. And that's that concept of the American dream is something that I'm very, very passionate about because I saw it and I saw it firsthand and lived it.
Adam Kaufman: I'm now concluding something about you I hadn't come to before. Your parents reinvented themselves in kind of mid-adulthood and now recently, at least professionally you've done this major pivot to essentially almost entirely almost leave the auto industry, the retail auto business, and to delve into this new technology called blockchain. So it's kind of similar. It's maybe in your DNA, this fearlessness about reinvention. And was that a hard decision for you or did you ponder it for years?
Bernie Moreno: No, not at all. No, and again, my mom and dad have that in common. They're not ponderers. This is let's go, that's make decisions. Again, the idea that you don't worry about making a bad decision, you just make a decision, you go and you move. I think that analysis paralysis is something that holds a lot of people back.
Adam Kaufman: I agree with that. Why specifically blockchain? Did you look at other industries to delve into or was that for you, the obvious post-retail auto choice? Or were you considering other industries?
Bernie Moreno: Yeah, let me give you 30 seconds of background. So-
Adam Kaufman: You can go 35, 40 seconds.
Bernie Moreno: There you go. We'll keep it to that. So my youngest and I do a lot of trips together. We do a lot of windshield time in the car together and we exchange, what we joke around is billion dollar ideas and threw a bunch of stuff together and nothing materialized from those conversations. And one day he came home, he said "Dad, I got one word for you." And I said, "Plastics." And he goes, "No." And that's when I realize he probably-
Adam Kaufman: He didn't even know the movie.
Bernie Moreno: He didn't get the movie.
Adam Kaufman: Right. Right.
Bernie Moreno: I realize oh, he's 15. And he said, "No, Bitcoin." And he started ranting about Bitcoins are going to change the world.
Adam Kaufman: Is that so?
Bernie Moreno: And it's a currency.
Adam Kaufman: At 15 he exposed you to that.
Bernie Moreno: Oh yeah. Well that's how all these technologies happen. I mean, look at any significant new technology comes from young people. So to make a long story short, I got on the phone with my financial advisor at Bernstein on a speaker phone, jokingly to bust his chops and my son's chops, I honestly, just to have fun with both of them, said that I was going to withdraw all of my money out of Bernstein and put it into Bitcoin. And Shane Bigelow, who was the managing director of Bernstein in the midwest at the time said well please don't do that. And we were joking and I would have just hung up except that Shane continued the conversation and said, but there's a technology underlines Bitcoin called blockchain. It's really interesting. Bernstein's studying that. There's a lot of stuff Deloitte's doing around that. I'm like wow, Deloitte's a pretty big name. Bernstein's a pretty big name. Then I started doing research and PWC was looking at it. ENY was looking at it. IBM was looking at it.
Adam Kaufman: This is what year, 2015?
Bernie Moreno: 2015. 2014, 15. And so really spent the next year or so really picking up everything I could do to understand what does this technology really mean and then understood that there was huge applications in the things that I knew about, which is the automotive business. Then made the pivot, sell these dealerships in a coordinated way, not in a fire sale way.
Adam Kaufman: Sure.
Bernie Moreno: And then started the company ironically with Shane Bigelow, same person. And spent the last two years building out our technology privately, quietly, which is hard for me. And now we're ready to launch and we're going to revolutionize the way cars are titled and we're eliminating paper and transforming it all to digital.
Adam Kaufman: What's the name of that company?
Bernie Moreno: CHAMPtitles.
Adam Kaufman: For those who aren't really as involved in this technology yet, do you want to take a stab at defining what is blockchain?
Bernie Moreno: Yeah so blockchain is an underlying technology. It's basically a very, very, very sophisticated cryptographically encrypted ledger. So-
Adam Kaufman: Cryptographically encrypted ledger.
Bernie Moreno: So think about any ledger you've ever seen except it's hack proof and it's immutable and it's permanent and it's very efficient. The application that we all are familiar with, that my son was familiar with five years ago is Bitcoin or other cryptocurrencies. That's just an application.
Adam Kaufman: One use.
Bernie Moreno: It's like email is to the internet like Bitcoin is to blockchain, right?
Adam Kaufman: Sure.
Bernie Moreno: So what we're using blockchain for is to digitize the car titling process, which means we eliminate the paper so it makes the ecosystem dramatically more efficient, reduces friction, reduces cost.
Adam Kaufman: Can I interrupt you? And on behalf of a grateful nation, I thank you for that. Recently, one of our kids acquired a used vehicle from another state and I had to go to four different government entities in person, take off time from work to do this and it would have been so wonderful to do that from my phone. And I suspect that's what you're working on.
Bernie Moreno: Exactly. In fact, that's what we've completed. So imagine what it used to be like when you flew, where you had to have a boarding card and now the boarding pass is on your phone and you get updates, gate announcements, delays, all that immediately happens. And that's because that paper is now digital. It's on your phone. And so we'll start with car titles. It's a very secure and ditch thing, but it's if you think it's cumbersome for you, imagine you're a bank that holds a million car loans and now there's a lien on that car that you bought and you have to perfect that lien from one state to the other and from one owner to the next. Huge, huge, huge burden on the ecosystem. So we fix all that. We're really excited to get launched on that.
Adam Kaufman: Congratulations. And can we go to home titling after that?
Bernie Moreno: Well, it's funny, a lot of people ask, that's exactly the first question people ask me and-
Adam Kaufman: I ask obvious questions.
Bernie Moreno: You do. That's a good one. The answer is no. Let me tell you why. There's way too many people making money with the existing system. So whenever technology wants to replace an ecosystem, if there's money being made in that current inefficiency, it's very hard to break through to that.
Adam Kaufman: In politics, we call that sacred cows.
Bernie Moreno: Exactly, exactly. In the case of car titles, everybody's losing money with car titles.
Adam Kaufman: Oh okay.
Bernie Moreno: So, our system is welcomed, not fought. So we'll do cars, then we can move on to all other assets that are titled that's not real estate.
Adam Kaufman: Okay. Well the state government currently is involved in the titling. So would they be outsourcing to a for profit business like yours, some of what their union employed bureaucrats did in the past and will it be a problem for them to release some of those tasks?
Bernie Moreno: No, not at all because what we do is our technology will sit on top of the existing system.
Adam Kaufman: Okay. Just making them more efficient then.
Bernie Moreno: So for example, what we've asked the states to do, and we hope that Ohio and they've given us all the indication that we're in good shape to do, is the state will allow, enable titles to also be digital. So we'll be the enabler of digital titles, but we interact with their system and we follow all their processes. And what we hope to do is create an ecosystem in Ohio around car titles that's very similar to what Delaware has around corporate registrations.
Adam Kaufman: We all do the LLCs in Delaware.
Bernie Moreno: Exactly. Because it's easy and there's a lot of advantages. So we'll be massively additive to the government revenue in Ohio. So imagine for them they get lower costs, more revenue, dramatically more efficient, new jobs and new industries. So it's a very, very positive thing.
Adam Kaufman: Sticking with technology but moving away from blockchain for a minute, can we talk about autonomy?
Bernie Moreno: Sure.
Adam Kaufman: My business partners and I, we've been doing this somewhat deep dive into that category. Do you think much about autonomy or are you totally out of the car business or are you placing any bets within your old industry as it relates to driverless vehicles?
Bernie Moreno: Well, there's no question that that's happening. Nobody disputes that. Nobody says there's not going to be a autonomous driving cars. You may not like it and whatever, et cetera but it's going to happen. The only debate is when. So if you're Elon Musk, you're thinking this is a year or two away.
Adam Kaufman: Sure.
Bernie Moreno: If you're the chairman of the board of General Motors, you're thinking this is 20 years away. And so the answer is somewhere in between. Right? And-
Adam Kaufman: What is your prediction?
Bernie Moreno: My prediction is probably by 2030 and here's-
Adam Kaufman: We'd have level five fully autonomy.
Bernie Moreno: More than not.
Adam Kaufman: Okay.
Bernie Moreno: So that's the tipping point. So are there more autonomous cars or is autonomous like electric? For example, I think the tipping point in electric is probably 2023 where there's more electric cars being made than non-electric cars.
Adam Kaufman: That's pretty soon. Okay.
Bernie Moreno: Very, very soon. That's right around the corner. So autonomous, I think that tipping point's right around 2030. Where it came to the dealership business is that the question mark is how do dealers fit into that future. I think there's-
Adam Kaufman: Talk about a sacred cow or a subset of an industry.
Bernie Moreno: I think there's a decent chance that car dealerships can still live and thrive in that environment of the future. But the control is really around whether the manufacturers want that to be the case or not.
Adam Kaufman: You've mentioned GM a few times. Have you ever crossed paths with Dr. Larry Burns?
Bernie Moreno: No.
Adam Kaufman: So he was the long time head of R&D at GM and I by chance had an opportunity to sit with him for two hours and he's from the old line Detroit thinking of auto industry future. But he was an early adopter of autonomy. So now in Silicon Valley his book is simply called Autonomy, the race for the driverless car is a must read for everyone out in northern California. And he thinks that, and I know I interrupted you, I'm sorry, but maybe you could react to this because I respect his views too, he thinks that the fleets will be owned by the manufacturers and we'll just use their vehicles when we need them.
Bernie Moreno: Well, I'll address that in a second. But the question becomes where does the car dealer fit into the equation?
Adam Kaufman: Right.
Bernie Moreno: And if the head of R&D for General Motors is saying that they're going to own the fleet and the consumers will use it, it doesn't bode well if you're a car dealer.
Adam Kaufman: Right, right.
Bernie Moreno: Right. So that's my point is that the manufacturer gets to answer that question. I don't want to own a business in which somebody can make a life or death decision for my business that I don't.
Adam Kaufman: You can't control that variable. Right.
Bernie Moreno: Exactly.
Adam Kaufman: Right.
Bernie Moreno: So personally I disagree with him. I think what's going to happen is that if they break the bond, and I hope they don't, but if they break the bond between dealer and manufacturer, what that will do is open up a world of opportunities for other companies to step in to be the alphas in that scenario. So I don't see a General Motors doing that. What I see is a company like an Uber, so whatever comes after Uber that will own the vehicles and what they do is they'll contract out the manufacturing of that vehicle to the lowest bidder.
Adam Kaufman: Sure.
Bernie Moreno: So if you and I are the transportation providers and we need a widget that carries people from point A to point B, I'll go to Renault, I'll go to Fiat, I'll go to GM, I'll go to Ford and I'll say to you here's the specs that I want, build this car for me. And it's no longer branded as a Chevy Camaro, it's branded as an Uber car. And at the end of the day, if you're using a car as transportation, you don't really care about the brand car. You care about the brand who's providing you that service. That's what I think will be possible.
Adam Kaufman: That's where you think it's going. Yeah.
Bernie Moreno: Because I have worries that the car manufacturers see the dealers as impediment to the future. And then once that bond between dealer and manufacturer breaks, it opens up Pandora's box. And by the way, don't count out Amazon.
Adam Kaufman: Keep going. What do you mean by that?
Bernie Moreno: Meaning why isn't why Amazon becomes your provider of automobiles, right? Why wouldn't they? Basically think about the evolution. Amazon will sell you a DVD, Amazon will rent you a DVD. Amazon will stream that movie to you. Amazon will create content. Where does that go if you're a movie studio, right? I mean they've minimized the role of the movie studio to the point where they're the movie studio. So if Amazon says we'll-
Adam Kaufman: Or Apple destroying the music industry.
Bernie Moreno: Or Apple owning the music industry.
Adam Kaufman: Right.
Bernie Moreno: Not destroying it, they own it.
Adam Kaufman: Destroying the old one.
Bernie Moreno: Right. Destroying the old one. So, you see where the power comes, so why wouldn't Amazon Prime also be a way for you to use transportation? It's $1 trillion company. So you've got to keep in mind the value of every car company on Earth doesn't touch the value of Amazon. All of them combined.
Adam Kaufman: Isn't that remarkable?
Bernie Moreno: All of them combined. Every single, every single car company in the world times maybe three is the value of just Amazon. So the power is a problem.
Adam Kaufman: Ironically though, just yesterday, Aramco became a $2 trillion valuation business in the old line oil industry.
Bernie Moreno: Yep.
Adam Kaufman: So who knows, these two worlds could collide, these old and new innovations.
Bernie Moreno: Oh sure. I mean we'll see where Aramco goes. I mean one of the things that the Saudis are incredibly smart because I just said to you that I think the world changes to electric primarily in 2023 and then almost exclusively electric not even a decade after that. You don't need oil. I mean gasoline's gone. So maybe it's a $2 trillion company much the way that WeWork became a $70 billion company and then it wasn't.
Adam Kaufman: Fast living.
Bernie Moreno: And then it wasn't. But I give a lot of credits for the Saudis have convinced people that that company is worth $2 billion. We'll see what it's worth in 10 years.
Adam Kaufman: One of the things you mentioned a minute ago that I want to actually build on, you don't want to get involved in a company or an industry where a big variable that you can't control might affect it. I like how you are involved in political affairs. I am too. I've always been surprised that business owners, a lot of them don't care about who their elected officials are. Why do you think you decided to get involved in backing candidates or lobbying for certain policies? Was that ingrained in you or is that your own thinking? Do all of your siblings have that level of involvement?
Bernie Moreno: Well, my oldest sibling was the ambassador from Colombia to the US.
Adam Kaufman: Okay so political affairs, family.
Bernie Moreno: Yeah. My dad was a politician and that was a politically appointed job. We talked about politics at the breakfast table, lunch table, and dinner table. 24, seven. My dad would read three newspapers every single day. He would call us a dumb ass if he didn't agree with our political positions. And I'm not talking about when we were 40. We're talking about when we were 10. And-
Adam Kaufman: Right around the time you were writing to the chairman of GM.
Bernie Moreno: Exactly I remember being nine years old and asking and telling my dad that I thought Jimmy Carter would make a good president and being scolded.
Adam Kaufman: Were you in Florida during the Elian Gonzalez moment?
Bernie Moreno: Yes. Of course.
Adam Kaufman: Because that was in my own political interest development, that was a big moment.
Bernie Moreno: Yeah, that was a-
Adam Kaufman: For me.
Bernie Moreno: Absolutely. And so we always were taught to be lean in on community, lean in on public affairs and public policy. But at the same time my mom was adamant that none of us ever run for political office.
Adam Kaufman: I was going to ask that.
Bernie Moreno: That was-
Adam Kaufman: So you're not allowed to do that. I'm sure you've been asked.
Bernie Moreno: Well my dad literally on his death bed, asked my brother to run for president of Colombia and my mom ever since then has been telling him no. My dad wanted me to see political office when he was alive and was another comment at literally at the end of his life. And my mom spent every waking moment convincing us not to do that. The answer is I've come to the conclusion, listen, I'm 52 years old, I'm never going to do that. There's people who are born to be police officers. Thank God. Thank God that there's people who-
Adam Kaufman: We all have different roles.
Bernie Moreno: Absolutely. And if you said to me that you had to be a police officer, I would be the worst cop in the world because I would be frightened to death 24, seven. There's people who want to be in the military who put the uniform on and God bless them times 100 and I would never ever do that. Just not built for that.
Adam Kaufman: Understood.
Bernie Moreno: And also not built to be elected official. But we do have a responsibility as good citizens to support candidates that do a good job because if not, then we give up the right to complain about it.
Adam Kaufman: I agree. I actually love introducing entrepreneurs to lawmakers or candidates for the first time and lo and behold, a few years later that candidate's elected and that entrepreneur has some sort of need or question and they're glad that relationship is now already in place.
Bernie Moreno: Right. I mean we're really lucky in Ohio, we have a governor, Mike DeWine, just a genuinely great person. He's in office to do all the right things. So again, the type of politician we'd normally complain about, that's not him. We have a Lieutenant Governor, Jon Husted, who's absolutely making an incredible imprint as he likes to say he ran for office to get things done. Just a genuinely good person, heart in the right place. Anthony Gonzales, which we both know and support is if we had 435 Anthony Gonzales', this country would be unbelievable. We have people like Rob Portman, just absolutely class act, does a great job. Cory Gardner from Colorado, Marco Rubio. There's just a lot of really great elected officials and so you have to support them because it's hard. Unfortunately the system does require money for advertising, for-
Adam Kaufman: It's expensive process.
Bernie Moreno: It's expensive process and introducing people and I believe in the candidate. That's really important to support these people.
Adam Kaufman: Yeah, I love doing that too. How about outside of politics? Do you have any role models in business, either current or growing up that you really learned from or were inspired by, anyone in your kind of a mental hall of fame or uplifting people from your past?
Bernie Moreno: Well, I mean for sure, and it sounds cliche, but certainly my mom was a big influence.
Adam Kaufman: That's not cliche. I call my mother every day. I do.
Bernie Moreno: So my mom, like I said, you'd commented about culture earlier, we are Latin and the proof of being Latin is the fact that my mom was an incredibly successful business woman. Again, 100 plus people working for three offices, tens of millions of dollars of real estate sold.
Adam Kaufman: Real estate, right? Yeah.
Bernie Moreno: Sold on annual basis. Top realtor in South Florida, raising seven kids and every single solitary day at 11:30 she would drive home, make my dad lunch, and sit there while he ate it. And then when he was done eating, she'd cleaned up, put the dishes away-
Adam Kaufman: Amazing.
Bernie Moreno: Wait for him to leave and then go back to work. So the idea that she would do that and not look at it as oh, I'm feminist and blah, blah, blah. She just did her thing. And-
Adam Kaufman: Like you said, we all have different roles. We're all good at different things.
Bernie Moreno: Exactly. Exactly. And built an incredible business, worked like crazy and genuinely lived this idea of being fearless and being bold her entire life.
Adam Kaufman: Clearly your parents influenced you. Who influences you today? Do you have any major influences in your life?
Bernie Moreno: Well, I lost my dad. So my dad died in 2014 but my mom's still alive and so obviously she’s still influence in my life. My wife, I was fortunate to meet somebody who's my best friend who also happens to be my wife and she plays a really important role in my life because one of the things, listen, I'm just going to say it because again, I say it like it is, one of the challenges that you get into when you achieve success and you have people working for you and you have managers and team members and people telling you how great you are, it's very easy and I've seen it with a lot of people to let your ego start convincing yourself that, yeah, you're this really incredible, great person and-
Adam Kaufman: Ego can be blinding.
Bernie Moreno: It can be blinding. And it's almost like a drug and I will tell you that the one role my wife plays, now sometimes I think she overplays it, but she really keeps me and our four kids massively grounded. She makes that crystal clear that listen, you're out of line-
Adam Kaufman: Has she been talking to my wife? I think Bridget and Claire have been talking.
Bernie Moreno: They overachieve. They overachieve. It's not that. The guy I worked for in Boston was an incredibly successful entrepreneur, but he was single most of his life. He got divorced a long, long, long time ago and he didn't have that force. And I think it's so important and I, there's times again, we joke that I say, well hey, calm down. But then there's other times when thank God for her because-
Adam Kaufman: It is needed.
Bernie Moreno: I think humility is something that is so important and especially when you're dealing with this new generation of millennials. Millennials are about humility, humility in every aspect of our lives and respecting other people, listening. And that's really my wife.
Adam Kaufman: Bernie, this is why you're on our podcast. If you look at that card, our theme is leaders who are as humble as they are successful. There are plenty of successful people that I don't invite onto this program, but I love your humility. I knew that about you and I'm so glad. Even sharing it right now as being humble, sharing it. So thank you for that. Do you ever get stuck? You're always on top of your game it seems like, but you are human being. Do you ever get stuck in anything? Whether it's a personal pursuit, a professional project.
Bernie Moreno: One of the exercises that I've made myself so good at that it actually has become real because one of the expressions I have that I tell my people all the time is fake it until you become it.
Adam Kaufman: Okay.
Bernie Moreno: Not fake it until you make it. Fake it until you become it.
Adam Kaufman: Fake it until you become it.
Bernie Moreno: Meaning, for example, let's say that you don't like public speaking and you're afraid of it. You just have to fake it, fake it, fake it, and then eventually you just break through and you're comfortable with it. So when it comes to-
Adam Kaufman: What's something that you, clearly, it wasn't public speaking, so what's something that you-
Bernie Moreno: Oh my God, you didn't meet me when I was in college. I was the most shy kid you've ever met in my life.
Adam Kaufman: Is that so?
Bernie Moreno: Did I mention I'm the kid that was 14 writing a letter to General Motors? I wasn't the cool kid in school. Right. So-
Adam Kaufman: I didn't draw that conclusion but I see what you're saying now.
Bernie Moreno: There you go. Yeah, I was the only kid in my dorm that had a computer.
Adam Kaufman: People were like...
Bernie Moreno: Exactly. Exactly. I was that kid. But so, as I say, that's number one. But the other piece that I've done, I think that helps me is the idea that you just delete things from your brain that were negative. So like any other human had, 52, my God, I can't count the negative experiences that I've had. Tons, tons, tons, tons, tons, tons but I can't remember any of them. I deleted-
Adam Kaufman: Can you try to remember one, for a moment here? I'd love to just learn how you dealt with a negative experience. Maybe what you learned about yourself.
Bernie Moreno: Yeah. I'll answer that. Just finishing that thought real quick. So deleting it to the point where it's deleted. I joke that my brain is now a recycle bin. And it drives some people crazy especially for example my CEO Shane Bigelow of my tech company because I'll say to him, "Hey, were you there?" And he goes, "Seriously? I was sitting right next to you." And it's literally just deleted. You have to, because I think it's important to look to the, you can't change the past.
Adam Kaufman: That's even more effective than compartmentalizing. People talk about compartmentalizing. It's not even on your-
Bernie Moreno: It's gone. No, it's gone. It's gone. Because you know what happens, you cannot live in yesterday. You have to live in the future. So this idea that you are constantly reliving oh, I should've done this, I should've done that. I should've done that. I should've done that. There's only so much brain capacity that we have. So my brain capacity I focus on today and the future and not dwelling on the past. But to answer your question, I could give you a few that I've only recalled because people do ask me that question. The biggest one is probably May 9th, 2005. I landed in Cleveland. I had wired every dollar I needed to close on that deal. So every dollar I have ever seen is now gone.
Adam Kaufman: This is buying the Mercedes dealership.
Bernie Moreno: Buying the Mercedes dealership. For those of you know what money being hard means, it means it's never coming back. If you don't close the deal, you lose all your money. So every dollar I got.
Adam Kaufman: All in.
Bernie Moreno: May 9th, all gone, all the money's gone. But I still need a $950,000 loan from a bank to complete the deal. And the loan was coming from Charter One Citizens Bank. And on May 11th, 2012, the representative from Citizens comes to see me. White as a ghost to tell me that the loan was not signed off on by two people. Just one and not two. I'm like well, that's interesting. Okay. What does that mean? Well, he really finally had to explain it to me like a two year old, explained to me, you are not getting the loan, which means I can't close, which means all my money's gone and I have no dealership 24 hours before closing.
Adam Kaufman: This was over the phone or in person.
Bernie Moreno: In person, yeah.
Adam Kaufman: How did you react?
Bernie Moreno: Oh I mean basically what he's in retrospect, here's what he's saying to me. You're financially ruined. You've moved your family to a city where you have no business.
Adam Kaufman: And you were like 33 then or something.
Bernie Moreno: 38. 38.
Adam Kaufman: Yeah pretty young.
Bernie Moreno: And well I gave up a job, I burnt a bridge in Boston, gave up this big job and it's done. You're literally done. And so-
Adam Kaufman: So what do we do, do we play the lotto or?
Bernie Moreno: Rob the bank, no. No, I called the chairman of the board of Citizens Bank.
Adam Kaufman: Again, reflecting back to the 14 year old writing to the GM chairman.
Bernie Moreno: Right, called Larry Fish and said to Larry, I said, "Listen, it's 24 hours before closing doesn't seem like an appropriate time to tell me the loan's not going to be done. It seems like maybe that conversation should have happened a month ago, which would have given me the fairness that I would expect that you would give-"
Adam Kaufman: And you were that diplomatic about it?
Bernie Moreno: Yeah, just like this and he listened. He said, "Let me check into it." Obviously he's the chairman of the board. He doesn't know. Two hours later, the same guy came back and said, "You're all set." I said, "What happened?" He said, "Larry Fish signed the loan document himself."
Adam Kaufman: Tremendous. Have you remained in touch with him or has he followed your rise?
Bernie Moreno: We did for a while. Then he retired from Citizens a few years back. But those are those moments in life where you can cry, suck your thumb, sit in the corner and feel sorry for yourself, doesn't move the ball forward, does it? And sometimes you just have to plow through those situations and remember that it's that persistence, belief in yourself and hey listen, Citizens got paid every cent I owed, I'd borrowed from them and then some. It was a great deal for them. Great deal for me. And it worked. You have to have that confidence and the belief that you can do anything.
Adam Kaufman: Well it's been a great deal for us to have you here today, Bernie. You were kind enough to come to one of the first live Up2 events we had about 10 years ago. I don't know if you remember that, but-
Bernie Moreno: I do.
Adam Kaufman: I was thrilled to have you as a featured guest during that live event and now here we are several years later talking about new things and a little bit older. You look the same. I'm bald now, but-
Bernie Moreno: I thought you were always bald. See, I've deleted it. So I thought you always were.
Adam Kaufman: Your system works. I am grateful for that.
Bernie Moreno: It does. I don't remember you with hair.
Adam Kaufman: You don't remember the mullet.
Bernie Moreno: No.
Adam Kaufman: But seriously, your time is very valuable and I take that seriously, so thanks for being with us at Up2 today.
Bernie Moreno: Oh it was my pleasure. Thank you for having me.
Adam Kaufman: This conversation with Bernie was terrific. There are several points which stand out to me and actually I'm going to share some that I agree with, but also some that maybe could be challenged but nonetheless were strong points that our guest today made. Number one, indecision is your enemy. Believe in yourself. Number two, don't underestimate the power of persistence. Push to get things done. Number three, Bernie said, fake it until you become it. Number four, leaders often lack honest feedback or constructive criticism. A spouse or a family member can be a healthy and necessary resource providing that feedback and we should be open to that. And number five, plow through tough times. Have confidence in yourself. Five strong points made today by our accomplished guest. Let me know what you think, if you challenge any of these thoughts or you agree with them.
Dave Douglas: And now it's time for this week's listener mailbag.
Adam Kaufman: Today's letter comes to us from Beth. She writes, "I already was a Baker Mayfield fan, but I like him even more now that I was able to listen to him on Up2. You were able to bring out a more self reflective side of him we don't get to see when he's being interviewed after football games and I think it was great to also hear from his wife Emily too. I really got the sense that they felt safe talking with you." Thanks Beth. And please keep the feedback coming.
Adam Kaufman: Up2 is a production of Evergreen Podcasts. A special thanks to our producer and audio engineer, Dave Douglas. I'm your host, Adam Kaufman, and thank you so much for listening to the Up2 podcast.