Business Problem Solvers with Eric Alspaugh, Episode 03
In this episode of Business Problem Solvers, Eric Alspaugh speaks with Travis Smith, Founder and Managing Director of Square-1 Engineering, a medical device engineering and compliance consulting firm.
Tune in to the episode to hear about:
- Challenges and Opportunities in MedTech: Travis highlights the dynamic nature of the medical technology (MedTech) industry, noting its growth potential driven by aging populations.
- Building a Successful Team: Travis underscores the critical importance of a cohesive and experienced management team in startup success.
- Founder Pitfalls: Discussing common pitfalls, Travis highlights issues such as leadership disagreements among co-founders or key executives, which can derail a startup.
- Networking and Professional Groups: Travis recommends joining organizations like Device Alliance for career growth through networking, industry insights, and more.
Learn more about Travis Smith:
- Connect with Travis Smith on LinkedIn
- Follow with Square-1 Engineering on LinkedIn
- Visit with Square-1 Engineering’s website
Disclaimer. The information provided in this podcast is for educational and informational purposes only and should not be construed as legal advice. Consult with a qualified attorney or legal advisor to address your specific legal needs.
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About Business Problem Solvers:
Welcome to Business Problem Solvers Podcast, where legal insight meets entrepreneurial innovation. Are you a startup founder navigating the complex legal landscape of entrepreneurship? Are you seeking practical advice, actionable strategies, and expert guidance to propel your business forward? Look no further. In each episode of Business Problem Solvers, seasoned attorney Eric Alspaugh takes a deep dive into the intersection of law and business, bringing you insightful interviews with a diverse range of industry experts, thought leaders, and successful entrepreneurs.
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Read the entire transcript of this episode:
Introduction to Business Problem Solvers Podcast
Eric Alspaugh: Welcome to Business Problem Solvers Podcast, where legal insight meets entrepreneurial innovation. Are you a startup founder navigating the complex legal landscape of entrepreneurship? Are you seeking practical advice, actionable strategies, and expert guidance to propel your business forward? Look no further.
Eric Alspaugh is a seasoned attorney. Based in the vibrant startup hub of California. And he’s thrilled to be your host on this exciting journey. In this podcast, we’ll dive deep into the intersection of law and business, bringing you insightful interviews with a diverse range of industry experts, thought leaders, and successful entrepreneurs.
From intellectual property and contract law to corporate governance and regulatory compliance, we’ll cover the essential legal topics that every startup needs to know. Our guests will [00:01:00] share their wisdom, experience, and practical tips to help you navigate legal challenges, seize opportunities, and build a thriving business.
In today’s dynamic marketplace. So whether you’re a seasoned entrepreneur, a budding startup founder, or simply curious about the intersection of law and business, join Eric on Business Problem Solvers Podcast, as we explore the legal insights and entrepreneurial inspiration that will fuel your journey to success.
Meet Our Guest: Travis
Eric Alspaugh: Hey, welcome Travis to the Business Problem Solvers Podcast. It’s an honor to have you here. And, uh, I just want to introduce you to, to my audience that, uh, you’re a friend, a colleague, a co worker, and a, uh, podcaster and teacher that has, uh, a wealth of information and knowledge. And I hope that we could just tap into a few things and keep our [00:02:00] topics, uh, conversational and interesting like they are in real life.
Travis Smith: That’s such a fancy introduction, Eric.
Eric Alspaugh: I know, I know. I’m getting good at this. No, thanks for coming on. And, uh, we have a lot in common. Uh, we, uh, worked at a device alliance and had lots of adventures over the past ten years. Ups and downs. And so that’s one of the things I want to talk to you about.
Diving into the MedTech Industry
Eric Alspaugh: Uh, I probably want to start off with, um, You know the med tech space and um, maybe some tips in the space for business development or any anything in that vein that you’d like to talk about?
Travis Smith: Yeah, you know the the data on the med tech industry at least from a startup perspective I’ve always found really interesting because [00:03:00] There’s there’s lots of opportunity there, right? You know, and the market continues to expand it I think that the cager over the next Four or five years Is upwards of five percent.
So I mean there’s a lot of opportunity there Um, you know and as we all know with the baby boomer generation Continuing to age that’s just going to increase the need for health care So, you know, it’s a good space to be in But that being said the statistics around a medtech startup meeting success is really not that great when you actually look at it.
And I’ve always found that information really fascinating because, um, and I know this number moves a little bit, but it’s something like every two to 1. 8 Startups out of 10 end up meeting success. So whether success is, uh, you know, commercializing and kind of scaling up internally by themselves, building up their own sales [00:04:00] force, or it’s getting acquired, right.
Um, really interesting industry, lots of growth, but it’s challenging,
Eric Alspaugh: right? So that, that math is about what 18 percent to 20 percent of companies will have some sort of objective. Success and the other 80 to 82 percent would be what we would call a failure
Travis Smith: Yeah, and look and i’m totally I love the way that you put that.
Um, My math and perhaps the way i’m looking at that is perhaps not the most scientific But at the end of the day When you look at let’s say a pma device On average it takes upwards of about a hundred million dollars to get that kind of a product to market So when you’re talking about Uh in a pma device being the most challenging to develop meet regulatory Approvals get to market [00:05:00] when you’re talking about a hundred million dollars plus And you have a give or take 20 chance of achieving that Um, I know that’s one of the biggest things where investors have been looking at that and why, um, there has perhaps, I don’t want to say a pullback, but you hear constantly, you know, when you and I are at these events, people talking about how it’s been really challenging, uh, to get new funding.
And certainly a part of that goes into. Uh, you know, money’s just really expensive right now and has been for the last couple of years. So Uh inflation that doesn’t really help that right,
Eric Alspaugh: right Yeah I remember and and so taking inflation into account 100 million isn’t what it used to be and back in 2020 2002 Uh boston scientific it cost them 1 billion U.S. Dollars to obtain [00:06:00] the approval, the regulatory approval for the first drug eluding stent. And so Johnson and Johnson in 2003 got the second drug eluding stent approved on the U. S. Market, and their regulatory cost was only 750 million. And so the ceo at that time received a nice bonus for being second
Travis Smith: Yeah, I mean look I I still contend and believe and I will admit my bias here I mean, this is the industry and profession that i’ve chosen. Um, I think it’s there’s a great opportunity in the market Uh, and one of the things that I look at, especially when we’re, because the, the company and the business that I own provides medical consulting support, primarily in the engineering and, uh, quality compliance kind of regulatory landscape.
One of the biggest things I look at when we go internal and we’re talking with a customer is where is their management team [00:07:00] at? What’s the background? What’s kind of, how does the team kind of operate? Because that tends to be the indicator as to whether or not that company is going to see success. I mean, at least in our local market here, there are several groups where this management cohort, if you will, Has continued to work together time and time again and they might be on three four five Uh startups that they’ve produced and interestingly enough, you know as the old school phrase goes the Midas touch uh, and I get that saying that dates me a little bit, but Once you’ve figured out this this rhythm this operating rhythm for starting a business Identifying user needs and the therapy that needs to go with that and then surrounding yourself with the right team.
It’s interesting how these people time and time again have figured out that secret sauce. Whereas lots of other folks around them haven’t [00:08:00] gotten to that point yet.
Building a Successful Startup Team
Eric Alspaugh: That is fantastic advice and just changing gears a little bit. I wanted to ask about doing, uh, business development, but just to follow up on what you said, can you tell me more about how to identify those type of people that, um, have had a success, a successful exit, and how can you get them to join your team, or how can you How can a startup venture, I work with inventors, so how could an inventor approach and help create a team to help manage their product development, regulatory, and future development steps?
Travis Smith: I think the first thing is, look, a lot of people do this, right? You know, you kind of start something in your garage, as we all like to kind of refer to it. Uh, in Southern [00:09:00] California, that might be in an incubator. know, fancy office, right? So it’s not always the garage, but that said, I think a lot of it comes down to mindset when you’re at a really early stage in forming a business, whether it’s a medical device company or it’s any other business, I would argue that one of the biggest things to focus on if you’re going to have partners is they have to have the same mindset, that team, because if they don’t, what you’re inevitably going to find is that.
Uh, people’s motivations, their work ethic is not going to be in sync and that will cause problems really quick in the relationship. Uh, and the reason I know that is both from my own experience, but my father actually happens to run and own a, uh, small business coaching, executive coaching firm. And he has told me from his own experience of being in that business for the better part of the last 15 to 20 years, the [00:10:00] number one reason a startup or small business will fail Is because the original founding members or those partners no longer see eye to eye with the way that the business is operating, you know, one person feels like they’re, uh, working triple time while the other person’s taking all these vacations, right?
Or, Uh, whatever it may be the illusion of that relationship ends up Dissolving the company and so for that reason, uh based on my own, uh, I hate to use this phrase, but my own lived experiences That’s one of the biggest issues that I see So if I was going to start a business and start a business with a partner or multiple partners That’s the first thing i’m looking at is what’s their mindset?
What’s their work ethic and what are they bringing to the table? That’s different Then what I’m bringing to the table.
Eric Alspaugh: How can you identify those characteristics?[00:11:00]
Travis Smith: Well, uh, you know, I think a lot of it is building relationships with people and getting to know what makes them work, uh, what drives them, right? Because that answer is not going to be the same for everyone. You know, uh, Eric, even though you are an excellent attorney, Uh, the reason you do that type of work is not going to be consistent across the board as to why the next attorney’s in that role or in that profession, right?
So I, I think it’s really important that we understand what people’s motivators are and make sure that everybody’s on the same page in terms of what the commitment is. Because that, uh, you know, I am, I don’t know, eight, eight and a half years into owning and running my first business. So, you know, this is very much still my first rodeo here.
So, uh, what I can tell you though from that experience As well as being involved in a ceo roundtable that I [00:12:00] participate in Uh, I mean, it’s a ton of work starting a business. Yeah Right. So if you’re going to have partners Everybody’s going to sign up for that same level of intensity and that same level of work You know, everybody’s got to understand and be on the same page with you know It’s gonna take X amount of years it’s going to take x amount of dollars, right?
Eric Alspaugh: Yeah,
Travis Smith: that’s another sticky point You know if if you’re putting your own money into the venture, uh that kind of creates a different level of accountability
Navigating Founder Pitfalls
Eric Alspaugh: right, absolutely so, um, I was gonna ask you about founder pitfalls, uh, you see you see This being your first venture, I’d like to hear some anecdotal stories, maybe, or real stories, and then you probably, being in a consulting role, see many more, uh, early stage [00:13:00] companies, mid stage companies, and watch how management interacts.
Do you have some key, key pointers or tips for our audience?
Travis Smith: Yeah, that, Eric, that’s a great question. Uh, do you ever remember a TV show? Uh, and I’ll segue into your, your question here in a moment. It was on a while back. It was called how it’s made. Yeah. And it was this show. It was actually really interesting.
I can’t remember what channel it was on, but the show itself took you through all of the backend processes for how general products that you and I would interact with. In every day of our lives how they’re actually made on mass scale So for example, one of the episodes I saw was how they make m& ms, right?
You’re talking a product millions millions of units that they’re putting out But the reason I give you that example is because that’s what I feel like my day to day job in life is I get [00:14:00] an opportunity to go under the hood with a lot of companies I mean, I ended up meeting probably with half a dozen or more companies every week.
And so what that does is that gives me a really interesting, uh, purview into how different businesses are run. Uh, some of the things they do really well. And of course, to your question, some of the things that perhaps don’t work so well. Uh, I think the first thing that I see that usually causes problems is the leadership team.
So whether these people are owners or not, But the folks who are running the ship, who are leading the charge, right? They’re not on the same same page. Uh, they have different priorities, different perspectives. Uh, you know, you’ll, I see pretty often where one person clearly is trying to achieve something and then literally their peer, who should ideally be helping them, has a different perspective on the matter and is almost kind of working against them.[00:15:00]
You’d be surprised how often stuff like that happens. So, you know, I think that’s one piece, um, funding is another huge issue, you know, a lot of, uh, a lot of startups if they are funded, uh, you know, venture backed, um, private equity, whatever it may be. You you kind of live and die on the vine based on what your next milestone is So that can be problematic if usually it’s the ceo or the cfo who’s in charge of really managing Uh funding obtaining that next funding round Well, if you have people in those jobs who are relatively inexperienced With the process of going out and obtaining funding courting the funding community You You know, I think you can find that maybe they wait too long to get engaged in that activity.
And then all of a sudden they find themselves and the company for that matter, [00:16:00] uh, in a situation where, you know, it, they have to start cutting folks or cutting down on the way that they’re spending money because they weren’t able to achieve that next tranche or, uh, that next series, whatever it may be, right?
Eric Alspaugh: Exactly. And my experience over the last 10, 15 years has been working with a lot of CEOs. I found that the vast majority of CEOs. That’s really their only job is going out and, uh, managing capital. And that’s really their function. They’re, they’re good at it and it’s very hard to do. So, um, yeah, people think that being the CEO is just, I’m in charge and what I say goes, but they’re there at the bottom of the food chain, everything falls on them.
So.
Travis Smith: Well, you know, in that, the way that you describe [00:17:00] that, I would agree. I see that a fair amount, but I also look at the CEO as you are the lead salesperson for the company, right? So I would, uh, politely argue that it’s more than just funding. You are the person that’s up on stage. Uh, presenting the technology, getting people to buy into your vision, right?
And, uh, that’s another challenge that I see for some startups is, uh, and nothing against my brethren that come from the engineering space, but if you’re going to be a key leader, a key stakeholder within a startup, Especially the CEO. You better dang well learn how to sell. Because if you can’t sell, that is a huge, huge missed opportunity for the business.
Eric Alspaugh: I think that you’re identifying, that’s, that’s a gap that I see working with inventors who, you know, they, they think I’ve got an idea, [00:18:00] I’ve filed a patent, I’ve, I’ve even got a diagram and, uh, if we can build it, they will come. And it’s, it’s, it’s a long road in between idea to, uh, selling in the market.
And I’m curious if there are any steps or tools that you can recommend for. Inventors to help bridge that gap to salesmen or CEO. Are there, are there any programs or any tools that you’re aware of?
Travis Smith: So there are, um, that being said, look, I mean, I will openly admit, I tend to be a rather opinionated person.
Uh, hopefully most of the time those opinions come from experience, but that being said, one of, I wouldn’t say every situation this is appropriate, but one of the best things. a Technologist an entrepreneur a founder however, you want to kind of [00:19:00] carve that up what they can do Is drop the ego and get out of the way, right?
Uh, so i’ll never forget and and I know he didn’t make this up But it’s just this is the first place I heard it. My father has said to me before Do you know what a hundred percent of zero is? It’s zero, right? Yeah. So this is a, this is a big challenge for lots of people in the startup space. And this is not just a medical device issue.
This is just entrepreneurism, if that’s even a word for that matter. But, um, you know, getting out of your way and identifying people, perhaps who have a better skill in a certain department than you to take on that task. And I will openly admit all day long, That takes a really humble person, but a person who sees the bigger picture, right?
And you know, this discussion we’re having right now, and kind of in this vein of startups and [00:20:00] entrepreneurs, and if you are a technologist by trade, and that’s truly where your passion is, There’s nothing wrong with being CTO or of some flavor like that in your own company, but you know if ideally You know, you’re just not excited about Being kind of the main guy the CEO the president the person out there, you know kissing babies and shaking hands It’s okay to step aside and have somebody else do that on your behalf But that said, that still goes back to what I was sharing earlier, which is if you’re going to do that, you better make sure you interview the heck out of people and you understand wholeheartedly really what it is you need and want out of that person.
Uh, the, the other area I would say for someone who, You know, maybe you’ve got a great idea. You just don’t really have interest in taking it all the way [00:21:00] through yourself. There are organizations out there that will help do that for you. So for example, just in Southern California alone within the medical device space in particular, there are better part of half a dozen really quality incubators.
In the local area. So for folks who are listening if you’re not familiar with what an incubator is It’s a business where their core focus is to take Uh, you know, we’ll kind of refer to as like fledgling technology So technology that’s very early might not even have been vetted out from a feasibility perspective And they will as a business help move that technology from a development perspective forward That could be a huge advantage for a founder technologist to Build a relationship with a group like that.
There’s a right here in orange county There’s an organization called NIDUS, [00:22:00] a great group of people, it’s N I D U S, NIDUS, go check them out, NIDUS Biomedical, but that’s a great example of an organization who has a really great breadth of expertise when it comes to taking early technology and moving it into Thank you.
Uh, at least where it can be positioned for commercial success
Eric Alspaugh: That’s a great tip travis. Thank you. I’m gonna have to look into them myself. So I know that you uh have a business that is successful And that you work in the community and you like to give back And so I worked with you at Device Alliance, uh, where you were the president for I think like four years and really, uh, helped grow that organization.
The Importance of Networking
Eric Alspaugh: Can you speak to the impact and the opportunities that, [00:23:00] that professional groups like Device Alliance provide? And What kind of relationships they might have, uh, for providing introductions to incubators or capital through organizations like Octane?
Travis Smith: So, uh, you know, we’ve mentioned Device Alliance a couple times.
So the, uh, for folks who are listening and are not familiar with Device Alliance, it’s a, uh, got started around 2009, 2010 as a medical device professionals association. Bye bye. So the organization is a non profit, 501c3, and its whole focus is to really help connect the ecosystem of the medical device industry Within Southern California, but its initial roots were specific to Orange County.
And make sure that whether you are at an OEM, you’re at a supplier, uh, you know, you have the right connections in the [00:24:00] right path in order to be successful in your role. So look, I’m biased about this discussion here. I absolutely love organizations like that. And that was the reason that I got involved in the first place, maybe 2012 with Device Alliance.
Just because, you know, thriving industries, they need organizations like that. People really need a place where, as cheesy as it is, it’s kind of like that old show. And maybe I need to get, by the way, Some some newer, uh stories to share here because I keep throwing up old stuff But you know that old show cheers like you want to be able to go to a place where people know your name as cheesy As that is but it’s really helpful from a career perspective and I think device alliance did that really well.
Um, in, and I remember we would get lots of feedback from newcomers that would come to the events once a month and, uh, just how supportive the group was. [00:25:00] So I think for that reason, that’s why I got involved. I would highly recommend to your listeners, Eric, that, uh, if you are as a professional, if you’re not involved in some sort of a trade group, uh, association, professionals, group of some kind, it’s, it’s a missed opportunity.
Because the amount of relationships you’ll build from attending events and groups of that nature, uh, will really impact your career in such a positive way. But then the other thing, too, is I can’t even begin to tell you or even count the number of times that I found myself in a discussion at one of those events where I was getting insider information of some kind that I never would have received Just kind of going about my daily practice, right?
Sure. So, um, You know if you want to be informed and you want to develop your career and you want to help [00:26:00] other people Um to where you can it’s it’s great. It’s great for that.
Eric Alspaugh: I appreciate that and I know that People’s time gets compressed and they, you know, they start attending events and then they drop off.
Can you speak to consistency of attending events and maybe as a practical tip, what kind of a budget should someone consider or how much time percentage wise or hours per month should they Consider uh devoting to a professional organization or professional development.
Travis Smith: Yeah, it’s funny eric I feel like you have been talking with our director of operations over here I I know you know her because her and I were just having this conversation earlier this week about Trade groups and associations and what’s the right mix and flavor in terms of interaction and [00:27:00] So I will take a page out of her book to give her some credit So if you’re going to go to any of these type of networking groups or associations or events The thing you got to realize is two things going to one event is not going to do anything It’s a consistency piece.
So if you’re going to go, if you’re going to bother to go to one, try going to the next one, the third one, because that will really give you a better ideas to. Are these the right professionals for you to mix with? Is it does it have the right feel right in the environment and all that kind of nice stuff?
What we saw while I was involved with device alliance more from a Kind of kind of running it and strategy was you would have people show up And while they may be nice people, but they’re showing up for the wrong reasons So they would come to the event trying to get something they would Trying to be [00:28:00] land land a new account try to make a sale You know, unfortunately, they just got laid off And so they’re trying to get a new job,
Eric Alspaugh: right?
Travis Smith: Where, where they’re, where the missed opportunity there is, is that they’re not giving anything back. So it’s kind of like this idea of, I’m going to keep going to the ATM and pulling out cash. But at some point, if I don’t make a deposit, there’s no cash there left. Right. And I’ve kind of just burned a hole in my pocket.
Eric Alspaugh: Right.
Travis Smith: As silly as an analogy like that is, that’s very true in the networking world, which is people can smell that kind of approach really quick in talking with someone. And if they feel like you’re there for the wrong reasons or just to make a quick buck or to just help yourself. It has a way of turning people off at times.
So the advice that I have given folks, uh, especially folks who are maybe younger in their career [00:29:00] is Try to figure out a way to learn help someone else learn or give something back and then once you’ve done that you certainly Have a better right to ask for something in return but if we just go to events and uh, you know, just like hey, can you help me get a job or I love this one.
Oh, hey, I saw you work at X, the biggest medical device company in the area. Can you get me a job there? It’s like, well, hey, I’m sorry to hear that you lost your job. I don’t know you. Why would I, you know? And so these are the things that kind of transpire at networking events.
Eric Alspaugh: This is great advice. This is great advice.
I love it.
Travis Smith: The cost, because you had brought that up a moment ago. Um, Yeah, I don’t I don’t really know if I have a great answer on that. Uh, yeah, I can tell you what I would personally spend You know, to be a part of a networking group, you know, depending on who that [00:30:00] organization is, you know, maybe up to several hundred dollars to a couple thousand dollars.
If it’s a very unique group, um, that has a very specific approach. One of the things I will say that is a little bit of a turnoff for me is when I come across. Some sort of a trade group or networking association and they have a buy in But then there is an additional cost on top of that every time you tend and you attend an event
Eric Alspaugh: Okay
Travis Smith: So, you know, everybody has their approach and everybody has their strategy for how they price their their groups I just personally have found that that’s a big turnoff That’s, that’s my own kind of name
Eric Alspaugh: organization.
Fair enough. That’s great.
Legal Insights for Startups
Eric Alspaugh: So what about, uh, tips on, well, have you encountered [00:31:00] any expensive, pitfalls or, or fails, um, consuming legal services or failing to use legal services? Uh, or do you have any anecdotal stories along those lines?
Travis Smith: That’s a great question. So I’m just trying to figure out what’s appropriate to share.
Eric Alspaugh: I know.
Travis Smith: So yes, the, the short answer is the first thing that’s coming up. It’s more, uh, business related. Is I had hired an attorney multiple years ago to help us with a particular issue that we were dealing with and I just didn’t know what I didn’t know in that moment And so the first attorney that I hired was also the first person I talked to so that was mistake number one We call it a rookie [00:32:00] mistake But what I later found out was that person was a generalist but what I needed in that particular instance was someone who was Very skilled and experienced With employment law, so I think my learning opportunity in that moment is Um, it’s not one size fits all you have to look at the service you are requesting based on the situation And my recommendation isn’t yes, it does take time, but try to interview multiple sources To get an understanding for what their core competency is And just as important who their typical customer is You And that’s, that’s probably where I made the mistake.
The attorney that we hired was used to working with, uh, organizations that were hundreds of millions of dollars, uh, annual. They have different problems, um, rather than working with a small [00:33:00] organization that has an employee head count under 50. So what we, what I ended up experiencing in that moment was getting advice from that attorney that perhaps was still accurate.
Okay. It just wasn’t appropriate for a small business.
Eric Alspaugh: Okay. So I’m hearing from you. Go out there and interview, uh, ask questions, ask to be educated on things that you wouldn’t know. Because you don’t know the space, try and try and get some extra information out rather than volunteer a solution and ask if they can solve your problem with that solution and look for, uh, some way to align interests or make sure that there’s an understanding that the service provider or lawyer, uh, understands the size of your business The magnitude of the [00:34:00] risk and the likelihood Of the something bad happening so that they don’t offer a really great solution to a really big problem But that’s you know putting the cart before the horse
Travis Smith: Exactly, and you know one of the best ways to do that if I found myself in that situation again Where I needed support of some kind whether it was attorney or something else And I hadn’t done that before the first two things i’m doing is one i’m going on google And I’m just going to simply do research based on my problem and the typical person that solves that problem, right?
So at least that’s a starting point to learn kind of what their backgrounds would be, what their area of focus would be. The second thing though is I’m going to go try to talk with some of my peers, meaning other business owners, other people that operate business GM or something like that, To learn how they’ve dealt with it and who they’ve worked with.
I [00:35:00] would always, always rather get a referral than start from scratch, going on Google, crossing my fingers, trying to hope I find someone. Um, so that’s kind of the new process I take rather than rushing to Google and going on Yelp or something like that to try to find help.
Eric Alspaugh: I love it. I love it.
Do you ever rush into projects and think that the sooner I start painting, the faster I’ll get this done? And how old, how old were you when you discovered that, um, the preparation, the tape, the plastic, and preparing to throw everything away was way more valuable and a better approach to getting a project done faster And more efficiently.
What, how old were you? Because I feel like I just [00:36:00] learned this lesson.
Travis Smith: It is so funny how you just described that Eric is, uh, I love painting. Um, I do, I do it as a, I do it as a hobby, not painting walls in your house, but art stuff. Um, as a result of that, I have done a fair amount of house painting, meaning walls inside interior.
Okay. I mean, you just nailed that. The prep time it takes. To start that project is often longer than the project itself
Eric Alspaugh: way longer
Travis Smith: what a pain in the rear that is Yeah, so, you know, when did I first learn that I mean I I have no idea but what I can tell you is When I started this business I was in my early 30s.
What I, and I had a father that owned a business at that time. I knew another person that owned a business. So I had done a good bit of discussion with people I trusted. What I thought I [00:37:00] knew going into starting that business in terms of, you know, what was it going to take, hours, um, investment financially.
It was, I don’t know, a third of what it actually took. I mean, I, I thought I’d be able to get the business up and running, see sales coming in, revenue being driven within a matter of like six months. I mean, it was well beyond that and I went into it somewhat prepared. So, um, Yeah, I mean, I guess based on that story, my early thirties, but I would tell you that I’m, I still make that mistake at times.
Uh, I tend to be emotionally charged in that. If I have a good idea, you know, I’ll do research, but I also love just the fire, you know, of running into it and just like, let’s get it going. Right. Yeah. Trying not to do the shiny object syndrome bit, but. Sometimes that’s a good, good thing, right? But other times, if you’re not careful, that can, that can really kinda, for lack of a [00:38:00] better word, paint you into a corner.
Eric Alspaugh: Right? Nice. Nicely done. I like that.
So, uh, a little bit different, which is, Have you seen the problems with starting a company and there being a lack of documentation? You, earlier you talked about alignment of the founders and the motivations weren’t there or they were misaligned. Have you seen, heard, Or have any tips or stories about founders messing up?
Can, uh, uh, legal agreements, founders agreements, is there anything that can help? Is there anything that’s bulletproof?
Travis Smith: I look, I mean that you’re probably better to answer that than me, but what I will tell you is I’m shocked how often people do things. On a [00:39:00] handshake, uh on a verbal agreement. It’s like, you know This is not 1890 anymore You know We we have the ability to document things on a cell phone at least and then get agreement Via just a response to an email.
I mean that that at a minimum But as you certainly well know better than myself at a minimum an operating agreement should be put in place to Between two or more individuals which outlines here’s what you’re doing. Here’s what i’m doing Here’s the investment we’re making. Oh, and by the way If this thing goes south, how is that process going to work?
I I will never forget that as long as I live like it was such a valuable learning lesson for me as a business owner just Professional in general, you should always think with the end in mind. The problem is nobody ever thinks that this [00:40:00] thing’s going to dissolve and crash into this fiery Inferno. Right.
But from a legal perspective. You sometimes need to treat it that way. And that’s the great thing about, you know, if you get a really good, uh, really good operating agreement, it will have language in there, which talks about in the unfortunate situation, we can no longer see eye to eye. We just can’t keep this business going, whatever that, whatever the heck it is.
This is the process we’re going to take to dissolve the business and then that way unfortunately should that occur It’s not an emotional decision at that point in time where people are potentially backed up into a corner in a wall You know, you have that operating agreement to kind of follow that process.
Eric Alspaugh: Yeah. Thank you for reiterating that for our listeners because I run into it all the time. I’m sure I actually, I think I sell [00:41:00] services by explaining to people what you said, which is we have the end in mind, which is we kind of think of all the bad things that can happen and 80 to 82 percent of the time do happen.
So,
Travis Smith: yeah, in a funny way, I kind of look at that as, um, I know this is kind of getting into a little darker side of the conversation, but it’s kind of like a prenup. Right. In a way, people who are choosing to go into business with each other, it’s kind of like you’re professionally getting married. There are, there are often real consequences.
As a result of this business relationship i. e. marriage not working out, right? So you really should have terms in this operating agreement, for example Um, because I had to learn this the hard way arbitration Right, whether you’re doing it through triple a or or you’re doing it through [00:42:00] jams Having content in there that talks about the fact that you are going to go to arboration arbitration Uh, I mean gosh that that alone right there For the listeners, if you’re not familiar with what arbitration is, please go read about it because that absolutely needs to be there as a result, if you’re looking to start up a business with others,
Eric Alspaugh: great advice, great advice.
Travis’s Passion for Motorcycles
Eric Alspaugh: So away from the darker side of things, I, I hear you talking about, and I think I’ve seen a couple of your motorcycles. Um, tell me about, tell me about, uh, do you, you got a hog? What kind of bike do you have? What’s your favorite thing about it?
Travis Smith: It’s more of a scooter, Eric, but I’m just kidding.
Eric Alspaugh: I
Travis Smith: doubt that.
Well, it’s funny you say that because actually tomorrow I am heading out on a ride through the desert with my father. We do this annual ride every year. And so, um, yeah, I’ve been riding [00:43:00] quite a long time. Um, it, it’s a big passion of mine. Um, just be able to get out, kind of empty your head and thoughts right on the open road is not to be cheesy about it, but.
It’s an absolutely, um, cathartic experience. You know, it just, uh, I really look forward to these moments, so, um, I ride a Harley, right? Because I wouldn’t write anything else. Thank you, America. Thank you America. Other than I, I will say, um, Indian makes an incredibly nice bike. Okay. Uh, I, I would probably consider that if they had.
It’s kind of hard to get parts.
Eric Alspaugh: Okay. That’s
Travis Smith: that is the advantage with Harley’s and Harley, you know, the Harley of the nineties, um, you know, and all the problems that came with them, you know, like, um, crankcase leaks and stuff like that. It doesn’t exist anymore. Harley makes an amazing bike. It’s an amazing story.
You know, [00:44:00] that company was founded in 1903, right? You know, it’s kept up with the times and, um, I’m just a big supporter of that organization and they make a great product. So I’m, I’m, I’m happy to, to you. Awesome.
Eric Alspaugh: Where, where are you, uh, going through the desert or what deserts? And do you do camping? Do you get a tent or do you hit the motel six?
What’s the plans?
Travis Smith: We we do all that, uh this trip in particular though Uh, we’re heading out to joshua tree and kind of going up around that national park and then we’re going to be So this is a bucket list item eric
Eric Alspaugh: Awesome.
Travis Smith: I’m scratching off a bucket list item. The funny thing is it’s about an hour and a half from our house So I just can’t believe i’ve not done this before but In and around that general area of Joshua Tree is a really famous saloon called Pappy and Harriet’s
Eric Alspaugh: Okay, so,
Travis Smith: um, I have always wanted to go to this place.
Uh, it’s also a [00:45:00] a a concert hall to a degree I think that’s probably giving it more credit than
Eric Alspaugh: euphemism
Travis Smith: Yeah But this place is just so unique and different. Okay, you just don’t see stuff like this often Um So, uh, we’ll be doing dinner tomorrow night there and seeing a show and, you know, riding off in the, in the dusk.
Eric Alspaugh: Oh, that is awesome. That’s awesome. Do you, uh, belong to a club? Do you mix, uh, motorcycle riding and, and business or is that’s just you said cathartic? Is it a pure escape? Do you, do you, do you lose a ton of money? I mean, invest in your bike?
Travis Smith: Yeah, I mean look it’s like a car to use the word investment in anything like that uh, I can’t say that those two go hand in hand, but um, I’ve got a i’ve got a good uh, a good steel horse. We’ll put it that way
Eric Alspaugh: [00:46:00] nice So i’m at the stage where i’ve got two boys. They’re 17 and I went to the Temecula rod and run show at the beginning of this month and I had a blast I saw over 500 classic cars you Just amazing.
And it was the second year in a row that I went and I’ve kind of been bit by the bug and I’m thinking about getting a 68 or a 69 El Camino and, uh, start wrenching a little bit with my best friend. Who’s got a 69 Camaro and a 68 El Camino as his newest project car. Do you have any advice for me?
Travis Smith: Well, uh, I happen to have a 1965 Oldsmobile Cutlass.
So, uh, I absolutely love the car. It’s a boat, things like 18 and a half feet long. I’ll tell you [00:47:00] this, um, don’t get in over your head. If you get to a point where you just think you can’t do it You’re always better off having someone else do it because otherwise it’s going to sit in your garage And just collect dust for years on end.
So The channel I love my car, but the challenge with a 65 cutlass is it was a low volume year So in 67 is really when the cut list started to kind of churn up from a volume perspective and from kind of public notoriety. So 67 and on, you can get parts all day long, but with a 65, it’s, it’s pretty tough.
It’s still the a body. So, um, I didn’t know that at the time when I bought the car about eight years ago. Uh, so that means that when I’m in a situation where I need parts, It takes me two or three times as long as if I had the cars you [00:48:00] just mentioned, you know, 60s Kind of 70 71, right?
Eric Alspaugh: Yeah. Yeah for sure Is she running?
Does she got a good paint job? Do you take her out?
Travis Smith: Yes, she’s running All right. Absolutely. Absolutely. So, um, yeah, she’s, I absolutely love what we’ve been able to do with her. Uh, the body needs a little bit of work. Uh, we, you know, like, like all old things we’ve uncovered, uncovered a little bit of rust here and there, you know, and so we’re dealing with that right now, but, uh, mechanically and electrically, it’s basically like a brand new car.
Eric Alspaugh: Awesome. Perfect. Great advice. I appreciate it.
Closing Remarks and Contact Information
Eric Alspaugh: So I want to thank you for your time, Travis, and let everybody know that Square One Engineering is right here in Orange County. They work with a ton of medical device companies, probably in vitro diagnostics. If there’s [00:49:00] anything that I don’t know that I don’t know, here’s an opportunity for you to let people know what you do and how to get a hold of people.
Travis Smith: I appreciate that, Eric. Uh, so, uh, Square One Engineering, our company, we’re a boutique consulting firm doing engineering, quality compliance, regulatory related projects of all sizes, whether it’s a three day pre audit to a two year remediation project and then obviously everything in between. But our big news that just came out last week, we had a press release, is we just opened our first satellite office out in the Minneapolis St.
Paul area. So, I’m, really excited about that because that’s our first expansion as an organization outside the orange So stay tuned.
Eric Alspaugh: All right. Thanks so much. And, uh, I look forward to, uh, maybe having a follow up on this in a little while. [00:50:00] Thanks so much for your time, Travis.
Travis Smith: Oh, you’re welcome. Glad to be here.
Eric Alspaugh: Stay tuned for our upcoming episodes where we’ll cover topics ranging from business formation and fundraising. To contracts and compliance. Subscribe now and never miss an episode of business problem solvers. Business problem solvers podcast is proudly brought to you by Eric B. Allspa, APC, providing comprehensive legal solutions.
