Episode 4: Finding Your Why and Making It the Foundation of Your Company
Hosts Joe Muratore and Ryan Swehla discuss their "Why" and how they've embedded in the structure of the company and have allowed it to guide their operations.
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Ryan Swehla:
And when we zeroed in on that, creating environments that transform people's lives, it resonates for me, personally, in a very deep way because I'm very passionate about our region, the Central Valley region. It's a part of California that is underserved, that's overlooked, it has historically not seen the attention or the investment that I believe it deserves. And so for us to be able to take that and have a tangible impact on our community, and know that every property that we touch regardless of type, we're going to leave that property that much better-
Narrator:
From Graceada Partners, this is Durable Value, an investors' podcast where hosts Joe Muratore and Ryan Swehla demystify commercial real estate with safe, sound investment strategies to help you balance your portfolio.
Ryan Swehla:
On this episode, Joe and I discuss why we do what we do and some of the challenges and successes that have led us to where we are today.
Joe Muratore:
What makes me get up in the morning is building something. Most days I exercise, I have a road bike. I get out at least three days a week, an hour or so, going at 18 to 20 miles an hour, I just get going. I come into the office and I enjoy what we are building, and every day I love the feeling of building something greater than myself. So investing in our team, seeing decisions being made on properties at different levels in our company, building something of scale, building something of size, building something that's regional, there's just the joy of speed and lightness and stability and growth. And I especially enjoyed the long runway. We've been doing this 15 years, I look forward to another 30 years. Money matters and money is a way to measure things, but this isn't about the money. This is about building something great and excellent for the reason of doing it.
Joe Muratore:
Sometimes people say, well, when's enough or what are you trying to build? And it's almost like if you're an athlete, why try to get a gold medal, isn't jogging enough for you? Why try to get a gold medal? And the answer is because they exist. And for me, it's like, I've only got one life, I want a gold medal. And the fact that I can do it with my best friend of forever years and have a great time in our hometown and bring a lot of people on this journey, that's great. What about you? What makes you tick? Why do you do this?
Ryan Swehla:
You kind of alluded to it a little bit, but I enjoy mountain climbing, I enjoy climbing to the top of peaks, and Sir Edmund Hillary famously responded when someone said, why did you climb Mount Everest? He said, because it was there. And I think that really embodies why I get up in the morning and do what I do and the work that we do. I love the challenge, I love being able to say that I or think about something that was difficult to do, difficult to accomplish and I did it, and the journey was the most rewarding part of it. When we go on mountaineering trips the parts that we talk about are not, I was there at the top of the peak and it was so beautiful, it was amazing. The parts that we talk about for the rest of our lives were the painful, difficult, I was there at 4:00 AM, four miles from camp and had to spend the night on a snowfield, just crazy stuff like that.
Ryan Swehla:
And I think of our business journey as well, there's a challenge out there and I want to run at it. And the parts that we end up looking back on and smiling about or laughing about are some of the most challenging things that we've gone through. Here we are in Modesto, California and the challenge to be able to create a world class commercial real estate investing company based here that brings institutional capital from across the nation and across the globe to our community, to the Central Valley is pretty powerful, and I just love that opportunity.
Joe Muratore:
Yeah. I often think that... Well, I was thinking the other day about my high school year book. It turns out my quote was, never doubt that a small group of dedicated people can change the world, indeed, it's the only thing that ever has. Which is interesting, I was 18 when I put that in my high school yearbook, but that's been sort of a defining idea. And I look at companies that are dominant in our space, Blackstone, BlackRock, Brookfield, even the brokerage firms, Coldwell Banker, Cornish & Carey Newmark Knight Frank, Jones Lang LaSalle, CBRE, what's in common here? What's common to this is a few people, a small group, often a partnership worked together a very long time, with great diligence, and in their small niche of the world changed it.
Joe Muratore:
And there's something empowering, and I think about this often, but every generation owns the world in some way. We're in our early forties, but people in our early forties will be president. Every skyscraper or tall building or industrial plant will be owned by people of our age at some point. And it's motivating to me to know that whatever we set our minds to do, we can accomplish. Now, there's risks and pitfalls in that, we've talked about hubris. There's plenty of risks and pitfalls, and we talk about those often, but for this segment I want to say, I believe that between the two of us, we can accomplish whatever we set out to do. And we only get one life let's do some cool things. Ryan, what led you to start a company and what has the journey been like for you?
Ryan Swehla:
Well, what led me to start a company was, I think, your and my constant discussion around where we wanted to go. And we started out working in a company together, then you worked at a different company, I did my own thing, then we worked at another company together, we started a company, and it was always this angling to figure out how we can manifest our own independence and pursue what it was that we wanted to pursue.
Ryan Swehla:
And I think if you asked, 20 years ago what that was going to look like, I don't think either of us would've said that it looks like what it is today, but we just knew that there was something out there. And I think that says a couple of different things, it speaks to pursuing what it is that interests you, but it also speaks to being open to where that path leads. You see people in life not pursue the things that they're passionate about because of whatever reason, circumstance, money, whatever, and then you also see people who are so focused on what they think they need to be doing that they pass by opportunities along the way.
Ryan Swehla:
So it's been a journey and I think something that's helped us through this journey is being open to change. There are moments in our history and seasons in our company's history where we learned by doing something that we ultimately decided was not where we needed to go or where we needed to spend our time. But I was asked recently, what would you change in your company path? And I really have a hard time picking something that I would change in our company's history because I can point to what we learned and how it strengthened us for every one of those stumblings or pitfalls along the way. So, I really wouldn't change the fact that we had those. I would say there were definitely lessons learned that maybe if we were less obstinate or more open minded, we might've learned the lessons quicker. But, other than that, those lessons needed to be learned along the way to make us what we are today. What about you?
Joe Muratore:
Yeah, I agree. There's always been a connection between us. We have similar but different personalities, about half similar and about half different and that works pretty well. I remember working at the company we worked at before this, and I felt... It was great, I liked what we were doing, but I just really wanted a sense of freedom and control and a sense to carve out my own destiny, and it worked out for us to start this business. And it's funny, we went through some really challenging times especially the first five, six, seven years, but there were some very dark cashflow times and times where there wasn't a clear path at all from A to B. But there was never really a sense of let's go do something else, it always felt meant to be. I mean-
Ryan Swehla:
We burned the boats.
Joe Muratore:
The boats were burned. I could never imagine going and getting another job. It was just like, make it work, make it work, find a path. And when you over and over find a path, over and over find a path, after a while you begin to think there's always a path. And even now, as we grow this business and things are a lot better now, or we have more resources than we did before, we're still those same people deep down. We've grown, but we also have that combined camaraderie and friendship, we've been through really challenging times and we're experiencing great times. So, what led me to start a business? Kind of back to the earlier comment, you only get one life and at the same time the opportunity to team up 50/50 and see what we can accomplish was really compelling for me and still is.
Joe Muratore:
Well, we just talked about it a little bit, but the consistent difficulty of cashflow in the early years and any entrepreneurs who's listening to this can probably relate to that when you're adding staff and trying to grow, and trying to figure out what your niche is, and you're trying to win clients, and sometimes you're trying to get clients to pay on time and all those sorts of things. I remember year two, three, four of the business, I just couldn't sleep at night, I gained weight, my marriage was suffering, I was at grouchy person, and it was tough there for quite a few years.
Joe Muratore:
And sometimes when I... Like one entrepreneur told me once, ah, the first 10 years are the hardest, you know what? He's right, the first 10 years are the hardest. It's not like, hey, go start a business and in two years you're going to be wildly successful and this is going to be great. No, you're probably going to pivot two, three, four, five times until you find that niche. And any entrepreneur can make it, but only if you just don't give up and only if you keep pivoting.
Joe Muratore:
So I wish I could say like, oh, we stuck to it and it just got fixed right away. But the answer is no, it took a while and we had to learn the lessons we had to learn. And that is why 70 to 90% of businesses fail in the first five years and then 70 to 90% of those fail in the next five years. There's so many shifts and changes, and those allowed us to get to where we are now. But man, those were tough, man, those were painful, man, those hurt my marriage, man, I lost sleep. But I wouldn't give it back, I wouldn't give it back. What about you, Ryan?
Ryan Swehla:
I would definitely say the most challenging time in my professional career was when I was invited into a room and fired. And that really is what started me off on my entrepreneurial venture. I look back on that and there was definitely a young guy who thought that he knew everything, speaking about myself, and really was adjusted back down to reality, number one. Number two, I also learned from that experience that I didn't want someone else in charge of my destiny, I wanted to be responsible for my future. And that opportunity, I look back on it and it was an opportunity, and the reason it was an opportunity is because, would I have had the impetus to go off and start my own thing had that not happened? I don't know, I don't know that answer. Or would it have taken another five, 10 years to do it? It was that kick in the pants that really set me off.
Ryan Swehla:
But like you mentioned about the personal life, I remember walking through downtown Modesto head spinning, my wife was pregnant with our third child, we had just purchased a house and I didn't know where income was coming from. So it was an incredibly challenging time. But as I mentioned earlier, I wouldn't give it up in the sense that it helped shape the resilience of who we are today.
Joe Muratore:
I often ask people we hire or people we're looking to work with, tell me about a dark time in your life, because those are really the times that shape you. People who have not seen enough adversity aren't hardened towards the difficulty that it takes to grow and build a business. It's a daily struggle and it's a competitive environment, and it takes a managed person, a person who is in control of their life, but also who's got a hardness to them and can get up day after day and face adversity and move the business forward and find joy in life at the same time.
Narrator:
You're listening to Durable Value, an investors' podcast. We understand the world of commercial real estate can be daunting, but we want to make it as simple as possible for you. Get the free 56 point check list for evaluating investment properties that Graceada Partners uses every day at graceadapartners.com/guides.
Joe Muratore:
So Ryan, talk about the company's why, talk about your why.
Ryan Swehla:
Well, our company really has rallied around creating environments that transform people's lives. And we really only zeroed in on that, I'd say, in the last couple of years. And that's not because it didn't exist before, but we hadn't spent enough time thinking about, when you really drill down what motivates us. I think when you're in the early years of your company, it's easy to focus in the reactive space not the proactive space. Like, how do I make payroll? How do I grow my company? How do I make sure that we have enough resources? How do I make sure my clients are happy? A lot of reactive type stuff. And over time, especially the companies that survive, you start to realize that there are core things that keep you motivated through those times, and when you're in that reactive space, it's difficult to necessarily drill in on those. But when you're able to move into more of a proactive space, you can think about what it is that has been motivating you.
Ryan Swehla:
And when we zeroed in on that, creating environments that transform people's lives, it resonates for me, personally, in a very deep way because I'm very passionate about our region, the Central Valley region. It's a part of California that is underserved, that's overlooked, it has historically not seen the attention or the investment that I believe it deserves. And so for us to be able to take that and have a tangible impact on our community, and know that every property that we touch, regardless of type we're going to leave that property that much better, and we're going to make that space that much better for the tenants, we're going to make that space that much better for the residents, and that we're going to make our lives and the livelihoods of our team members that much better, it really is something that I'm passionate about.
Joe Muratore:
Yeah. We put a ton of time into our culture and vision and mission, and there's a lot of talk about this. And certainly, early on, I thought like, where's the money in this? Now there's so much money in this. When your company is aligned around culture and mission, it helps so much. So with every hire, we go through our culture pillars and our gets it wants it and capacity, and we hire around that, and our why is the culmination of all of that. So it's like, here's who we are as people, these are the type of people that are going to flourish in our organization, but then why are we doing this? And there's quite a bit of science around why statements, but why statements say we do this so that this, like, we're going to do this so we can do this to the world.
Joe Muratore:
So we create environments, well, but what do we do? We don't just own buildings, we create environments. Why do we create environments? Because buildings are a thing but environments are a place where people are and without people there's no buildings. We're in the people business, not in the building business. So, we create these environments so that what? So they transform people's lives. How can a building transform people's lives? That's a tall order. It's one thing to make people kind of happy or make them think you're building's cool, it's another thing to transform their lives. And it's a tall bar but when we think of design, when we think of the way we interact with our tenants, when we think of the systems in our building, HVAC, maybe solar, maybe lobbies, maybe lead, places to sit, places to connect, we work to make our buildings be a spot where lives are transformed. A lot of this is we seek to bring culture also into our buildings. We seek to have tenants that reflect who we are as a company and who we want our buildings to be.
Joe Muratore:
I often look at companies and to be really candid, sometimes you think of the CEO's or you think of the ownership, sometimes they're just not great people, they're jerks. They're just not the kind of person you would want to have a beer with or hang around with or go to a barbecue with on the weekends. And guess what? They tend to hire employees that reflect their personalities. They tend to have dysfunction in the ranks that tends to be a negative place to work. And guess what? When a lot of the buildings we buy tend to be from sellers that sometimes are that way too, their tenants are dysfunctional, their buildings are in disrepair, their lobbies aren't great. You get a sort of gritty feeling when you go into the building.
Joe Muratore:
So how do we transform lives? Well, when we buy a building, the way we connect with the tenants, the way we changed the lobbies and the exterior's and the landscaping and the parking lots, we create a community, we show care. And guess what? That is great for business and it also makes our jobs a lot more fun. We're improving the world with every building we buy.
Ryan Swehla:
Well, I think you, you touched on something. The why is the passion, so the core values is who you are as a person that gets it, wants it, has the capacity, GWC, is you have the ability to do the job and the why touches on the passion.
Joe Muratore:
Yeah.
Ryan Swehla:
And I think that's why all of our people, all of our team and ourselves we're passionate about what we do. Generally, we have smiles on our faces, generally, we're excited about the work that we do, because we know that we're not just maintaining something, we're not just doing status quo, we are trying to raise the bar in what we do. And I think for any entrepreneur or anyone, even an investor to be thinking about what makes you passionate because that really is your why, that is the internal motivation of what makes you do what you do regardless industry or sector that you're in.
Narrator:
Thank you for listening to Durable Value, an investors' podcast where we demystify commercial real estate with safe, sound investment strategies to help you balance your portfolio. If you enjoyed this podcast, be sure to rate it on iTunes or wherever you get your podcasts. To learn more, visit graceadapartners.com where you'll find more information, investors tools, case studies and more. This podcast is hosted by Joe Muratore and Ryan Swehla. It's produced, edited and mixed by Melodic with intro music by Ian Post. Thanks again for listening and we'll see you next time.