(Note: this is an AI transcription, as close as possible to the original)
Kathy, Bob, Rose
[00:00:00] Kathy: I’m really happy to be with Bob and Rose Knorr. Thank you guys so much for agreeing to sit down and have this conversation. I know we’ve had it many times and as I thought about guests to invite on this podcast, I really wanted to just.
Share your story with other couples who are a little farther behind than where you guys are so because they don’t know you let’s just start a little bit with where you are currently like. How long have you guys been married?
Rose: We’ve been married 36 years .
Kathy: awesome and children?
Rose: We have two children a son and a daughter a 31 year old and a 29 year old.
Kathy: is married and you have a big event coming up soon.
Bob: That’s right. Yeah, [00:01:00] looking
Kathy: both your kids married, which is just a great place to be in life, isn’t it? It’s
Bob: isn’t it?
Kathy: spot to be. Let’s set the stage for this conversation. And when you were first
Bob: married 36 years ago, what did work
Kathy: and purpose. What did that look like at the beginning of your journey together?
Bob: you I truthfully good after graduating. We got married shortly after we graduated from the same University.
Rose: It was something we did. It was just something that was expected of us. It was just the the next
Bob: stage in life. I can’t say that we we thought much beyond the next couple years. It was when you’d earn a living. We were on our own we were independent and there was an expectation that we would carry on carry our own load beginning really day one after we [00:02:00] graduated.
Kathy: Right, right. You were off the payroll.
Bob: That’s right.
Kathy: And what about for you Rose?
Rose: I would say the same thing if I graduated with a degree, I got a job in my field. I’m which was interior design. I knew I didn’t want to work forever that I wanted to be a stay-at-home mom. So work for me was just work, you know make money we can save we can pay off our house and work until we start to have a family
Okay. And what was your degree in Bob?
Bob: is Finance and Accounting. Yeah, so,
Kathy: where did you start with work? What were the first jobs you had?
Rose: I started with the IRS exactly. Yes. Yes. Yes. Yes in Newark, New Jersey just doing some of their offices.
Kathy: Alright awesome. And Bob would what were
Bob: I started with with Johnson Johnson and a management development program.
[00:03:00] That was the five-year program and that I was there for in the management development program for about five years before moving on to other things. I’d
Kathy: at that point did you did you know you were an entrepreneur or Rose? Did you have any idea?
Rose: I had no idea because I grew up in a family right? My dad worked for the same company his whole life.
And his father had worked for Johnson Johnson. So I just assumed you start working with the company and you just keep going until you retire. I’d never heard of the word. I didn’t know what an entrepreneur was nothing. It
Kathy: definitely wasn’t
common in would this have been early
Kathy: so y’all were married 1983.
So no clue yet and tell us just a little bit about timeline for you [00:04:00] Bob in those early years of work with Johnson Johnson leading up to the point where you decided to launch tapestry.
Bob: sure. I would say, you know, my undergraduate degree is Finance and Accounting was actually sort of a miscast for my background.
I actually was much more creative and Innovative in high school. To tell you the truth. I didn’t give a whole lot of thought to why I was a finance accounting major other than I had a good friend a teammate. That was one. My father was a finance accounting major and it was a very defined career path.
So it it really helped a creative person like myself provide some structure and guard rails for. For the early stages of my career management development program also provided structure to focus on
Rose: business in general and. The financial aspects of [00:05:00] business
Bob: in particular, but I can’t say that was really it wasn’t my love or passion.
It was I think in the back of my mind there was always this creative desire to create something new. So we. Even shortly after we were married we started several very small Ventures along the ways that tested Waters and maybe tested our marriage
Rose: I’ve totally forgot about that. But okay.
Kathy: piece of the story. So he said creative in high school. Like what? What do you mean by that what creative how.
Bob: I you know, I remember as a freshman or sophomore taking a course and advertising and I had an uncle who had some experience in Madison Avenue this he was superb in kind of part of the Madmen crowd from the 60s and he was very encouraging in terms of you know, this particular project that I was working on that [00:06:00] was kind of a creative product concept that I had pitched in high school.
And I knew that that’s what my natural inclination was. I wasn’t necessarily A numbers guy. But yeah, it was also expressed itself in that ways and in ways like that and I guess just my interest it wasn’t a focus interested, you know by contrast a lot of friends. In high school went on to college and Engineering or medicine or law and I just wasn’t.
That just wasn’t my interest.
Kathy: All right. So like did you ever start a business in high school? Did
Bob: did so I had a a shoe company in high school. I was I was a high school and college athlete Runner. And so for a couple Seasons, I had [00:07:00] a business re selling shoes. They were sort of left overs from Nike and Adidas and I would take them to track meets and I would either wear the myself or find other really talented Runners and have them run it almost as a sponsorship and would use that as a way to resell she was very small business.
Kathy: that was high school or college high school. Okay, so then you went to work for Johnson Johnson and tell us a little bit about the early part of your career there you started some. I think you called them intrapreneurial things. So just give us a little bit of a timeline and some of the highlights leading up to deciding to
Bob: John said a very well-developed management.
Program that was really geared towards generating developing the next generation of [00:08:00] general managers and Senior Management. So the concept was you came in as undergraduate you and every nine to twelve months you rotated to a different functional area of the company and you learn the business from the perspective of sales marketing Finance.
Rose: R&D and
Bob: and it was a chance to understand holistically in a very short period of time you’ll five years of relatively short period of time to to learn how businesses work and function all while providing financial support. But looking at the financial support from the perspective of all of the disciplines that are required for healthcare.
That then became the opportunity to go or LED to an opportunity to go overseas in the late 80s early 90s to to practice those General management skills at a very young age before I was [00:09:00] in my late 20s early 30s.
Kathy: That was Switzerland right? You guys were happy there. How long?
Rose: seven years.
Kathy: And you had both children at that
Rose: Both children were born in the us but we moved there shortly after Maria was born.
She was only six months actually when we moved over there. So it was a big
Kathy: long way from family.
Rose: Well, I have a sister who lives in Switzerland. So that really helps she married a Swiss man and my children had two cousins there. So that was really nice.
Kathy: Okay. All right. So you were in Switzerland and
Bob: in well in the early 1990s in Europe in general, it was kind of a turbulent time from a geopolitical perspective European Union was just coming together 1992.
The Soviet Union was falling apart. So there was a need full in. Western Europe to rethink how Jones and Johnson [00:10:00] should restructure its business in the post European Union error and in Eastern Europe, there was an opportunity to open up these former Soviet countries that were open for the first time to Western Goods the first time in 70 80 years and so for a young American Executive who had the benefit of.
A management development program. I was in the right place at the right time to exercise those skills both in Western Europe and then in Eastern Europe, so it was brought over after Johnson Johnson has acquired a company in Switzerland. But ultimately that put me in a place where I was in a position to help the corporation rethink.
Its re-establish a blueprint for Western Europe and to rethink how it developed the markets in eastern.
Kathy: Okay, and you were how old at that point Bob.
Bob: Okay, we went over there when I was30 just 29 just [00:11:00] and so we stayed there for seven years. I was about 36 when we came home.
Kathy: So you got to be part of a really incredible opportunity and unique.
Rose: Yeah in his early 30s right by the time he was 36. He was done. Yeah. Yeah. He had accomplished a lot in those seven years. Yeah,
Bob: the world. I mean the world was changing at that point and it was really a question of timing. I was very fortunate to be in the right place the right time and for the company to give me the opportunity to do things that I had had great training in the US and it prepared me to take on this new challenge
Kathy: they also saw a lot of potential one of the things I’ve learned about you Bob is you are very humble and you probably underestimate your your potential and and I’m sure they saw that [00:12:00] so Johnson Johnson and what specifically what kind of products are what what was the business involved
Rose: So John
Bob: Johnson had three sectors pharmaceutical consumer and medical devices I actually worked in all three of those sectors first in the u.s.
In the pharmaceutical sector while we were overseas it was entirely in the consumer product sector so the products that most people think of when they think of Johnson Johnson baby shampoo and Band-Aids and things like that and. And eventually moved into the medical device sector and years.
Kathy: so taking us from there to launching your own business walk us through how that came about how that decision came about.
Bob: sure. Well after having practice setting up several businesses in Europe is Rose indicated while we were overseas. I came back to the United States as the kids were.
The kids were I guess seven eight years [00:13:00] old and it was time for us to get back to the United States as we went over to Switzerland affecting it to only be 18 to 24 months and seven years later. We woke up and said it’s time for us to either make a decision to stay overseas or to move back to the States.
So we made a decision to go back to the States. Now. This would have been 1996-1997 and this was sort of at the. The height of the.com boom. And so also once again the world was changing just as it was in Europe in the early 90s. It was starting to change in the west coast the United States and Silicon Valley.
So we decided that we wanted to be a part of that. We had never lived in California. So it was an opportunity for us to get transferred to to Silicon Valley. We live just just outside of Silicon Valley and I had a chance to. Do what I had been doing for 7 years over in Europe in creating new entities.
I was given an opportunity to do that. Once again for [00:14:00] Johnson Johnson this time in the medical device sector and in California as opposed
Kathy: Okay, and now y’all were originally East Coast people so you went. All the way to the other side. very good. So how did that take you then to the point where you started tapestry?
Bob: So I think at that point I had started four or five businesses within the court within Johnson Johnson and all but the last one I would say we’re Successful by any measure. We had we achieved our objectives and then I moved on and started another one and so forth and so on the last business, however, I guess by by certain measures was not successful and found myself in charge of a medical device division that didn’t ultimately didn’t fit within the Strategic objectives [00:15:00] of the part of Johnson Johnson that I was working for.
I was working for the diabetes business. My particular division was had a cardiovascular product for home monitoring and I. I guess by some measures in terms of developing a technology developing National Healthcare policy. We were successful but the business model just didn’t fit within what the diabetes business was doing.
And so the corporation made a decision to pull the plug in the business. I was running so that was I would say that was my first new Venture failure within Johnson. But that then led to the opportunity to for me to go out on my own. I was at that point. I was given a choice either to move back to Johnson Johnson corporate for a corporate job or to actually take this business and pursue it on my own as an independent.
Kathy: I remember from a [00:16:00] previous conversation. I think your your kids voted. No on that was was that the move I’m in my
Bob: that’s that’s right. So at one point we share with the kids that they were several opportunities and one opportunity I think was back in Boston or New Jersey and I described it to them, and they said sounds like a great opportunity for you dad.
I just hope you come back. Visit us
Bob: we are not going to we love California. We’re not going to the the cold North East. So
Kathy: that what year about was that or how old how old were they at the time?
Rose: Yeah, 2002-2003
Bob: ready for high school. They were Maybe Junior High getting ready for high school.
Kathy: definitely, they’re like no, we’re not moving.
Bob: Yeah, exactly.
Kathy: wise that you even asked them. I mean there was an option involved and what were your thoughts Rose?
Rose: Yeah. Again, I didn’t want to leave California. Yes. [00:17:00] I love the weather. I loved everything about it. But yet again, it was scary for me. If he was going to leave the security of something that we had for all these years to go out on his
Kathy: a really unique.
Experience Bob in terms of being able to start some things but under the umbrella of being salaried and you know not having to worry about where the next paycheck is coming from or how you’re making payroll. So great great learning opportunity. All right, so tell me about the decision to start.
What was that like between the two of you did you discuss it much as a couple or how did that what did that look like?
Rose: I’ll let you start and then I’ll jump
Bob: in. Yeah, I so as I can’t recall the specific conversations, but I’m certain that we talked about it because it was a major decision and had a [00:18:00] lot of implications. I think the as I recall I received a lot of encouragement support from Rose partly because she she really understood what I was doing for the years leading up to to that that point in time.
She was very familiar with the division. I was running at Johnson Johnson the time which then served as the basis for the independent Venture, so I didn’t have to kind of take her through. All of the nuances associated with the business at the time. She she was tracking she was I was doing a lot of work back in Washington to convince the folks at Medicare and the FDA and some folks in Congress to establish this new health care policy.
That was the that that was the basis for the business that that I was responsible for. And so she she understood everything that was going on and she understood that. We had done a lot of the hard things under while I was still under Johnson [00:19:00] Johnson’s roof. We got.
Kathy: for it. It was more for the Medicare age population the
Bob: we work with Medicare we convince Medicare to provide National coverage, which is not something they do very frequently, which I learned after the fact.
I thought it happened all the time and you know,
Rose: what about working
Bob: some some top docs in the country and we established National coverage for this particular category. And that was it was suitable for Medicare patients. And so Rose was just she was very familiar with the opportunity that were chasing and then the question.
So the question was not whether we were pursuing a
Rose: good. Market opportunity the question was
Bob: do we do this under Johnson Johnson’s roof, or do do we do this [00:20:00] on our own now Johnson Johnson made the decision that they weren’t going to pursue it under their roof. So then the question was do I want to take that
Rose: idea and pursue it as an independent
So that was the real question, but I think the fundamental questions of is this a good idea? Rose was already very supportive of than.
Kathy: you said it had not
Bob: it wasn’t successful in that the the that particular business didn’t fit within the company’s diabetes objectives. So it was it was successful and that we were able to establish National Health Care policy for this particular.
Business opportunity, we actually developed a technology that was was cleared by the FDA. The only question was did that particular business fit within the junction Zone some business unit that I was a part of and they said [00:21:00] it didn’t it was more suitable as an independent entity. And so they approached me and said would you like to buy the business or have it spun out from Johnson Johnson
Kathy: that’s the
That was the decision Point here. Yes.
Kathy: tell us just a little bit what the device was. I mean, what was the technology that you were
Rose: were working with?
Bob: Sure, the technology was a home blood monitor that monitored patients who were on blood thinners specifically the drug war friend or as it’s known by Coumadin blood thinner used to
Rose: prevent strokes and blood clots and cetera and for
Bob: many years even today it’s one of the most widely used drugs in America and the challenge associated with it is it’s a it has the same active ingredient that’s used in Decon rat poison.
So it prevents the [00:22:00] blood from clotting which is good thing if you’re you have a high propensity for
Rose: blood clots, but if it’s over or under used either
Bob: risk of stroke or the risk of internal bleeding go up. So the challenge is monitoring individuals to make sure that they’re cooling levels of Warfarin levels are just just right so similar similar to Google commenters that people diabetes use to monitor the blood sugar except we weren’t measuring blood sugar.
We were measuring clotting time for these individuals on more.
Kathy: And it’s real sensitive right diet can affect it.
Bob: other drug interactions
Kathy: so and this was monitoring that they could do at home. Okay. All right. So just you know so that our listeners have a context for what it what the technology was that you were working with.
So you had the decision whether or not to buy it from Johnson Johnson and take it on your own and so what? How did you come to that [00:23:00] decision? What
Rose: I remember after that. I don’t remember so much that decision. Although we did pursue that right. That’s right. And there were some issues then with them releasing it and then being.
I guess following through on the contract. So am I remembering
Bob: Yeah, I think the real issue was, you know, they had spent tens of millions of dollars developing the technology and because they weren’t pursuing it. The technology had no further use to them. So they were you know, they were willing to sell it for a fraction of what they had spent to develop it which then meant we would have we would have had to purchase the the business for.
For even a discounted rate was still a lot of money that would have required raising money from Venture capitalists and in Silicon Valley. And so that’s what we [00:24:00] did. We actually we approached several Venture Capital firms had some offers from some top firms for 13 to 15 million dollars to to acquire the business and the the next decision Point became.
Whether we would raise the money from Venture capitalists and by the business from Johnson Johnson or look at an alternative path the in after in very short order. I mean in a matter of three or four weeks, we’ve received several several offers from Top VC firms, but what very quickly the offers said they would give us the Thirteen fifty million dollars we were looking for but.
They would own 80% of the company and we since myself and my founding team were really The Originators of the idea just seemed like we were just employees all over again the whole purpose of going up [00:25:00] becoming an entrepreneur was to be independent on her own. And and so this whole notion of just collectively owning 20% of the company just didn’t feel right.
So. We then pursued a second path which was to partner with another company that have a device similar device that was suitable for the same purpose. So the all of the healthcare policy that we had worked on with Medicare also applied to the other company as well. So we said rather than owning our own technology.
We developed a relationship a marketing relationship with another large company that had the medical device. But didn’t have the marketing expertise and the health care policy expertise that that we did and we just struck a different deal that didn’t require us to raise Venture Capital money, but it did require Rose and I to invest our own savings to
Rose: start start
Bob: the company on her [00:26:00] own.
So that was the next critical decision. We made was to to self-fund our business owners. Sometimes called bootstrapping our business. And maintaining a hundred percent of the ownership of the company on her own
Kathy: So you didn’t buy the technology from Johnson Johnson you partnered with this other
Bob: that’s correct.
Kathy: you remember what that felt like then to just okay. This is this is a different turning point in this journey. Here’s our savings.
Rose: Well for me I was. I’m the more nervous of the two of us and I am not the risk taker of the two of us. So the comforting thing for me was first of all, I trusted him a hundred percent.
Okay, but underlying that I knew we had some savings. I knew he had a severance package, you know for so many months we’d be okay. And then after that we had Cobra [00:27:00] which is another big payment, you know that you have to make. So our health care was taken care of for another year. So it’s like okay, I think if we can do it within this time frame.
Bob: which was a year.
Rose: Maybe it was a year a year and a half. I would say it was a year and a half I said, okay. Alright for a year and a half. We have some funds coming in. Right, he can pursue what I know. He knows what he’s doing and I a hundred percent knew he knew what he was doing.
Kathy: I remember you saying once you trusted him a hundred percent and he had a hundred and fifty
Rose: Yeah, exactly.
He had a hundred and fifty percent confidence. Right? Like he was the only one in the country who knew what he was doing. So I was like, I really know what he’s doing and if I can say I had some spectacular dreams and confirmations from God. That he was supposed to do that and we were going to be okay.
Yes, yes. Yes.
Kathy: thinking a year year and a half. And what after a year and a half [00:28:00] thinking that it would be sold at that point or that was just as far as you could see at that point.
Bob: It’s yeah, it’s interesting, you know. We had so much momentum even prior leaving Johnson Johnson Working on the FDA and Medicare and convincing Congress to to provide this National policy.
Which set up the market. I mean, I can’t underscore the importance of setting up that National policy without National policy. There was no Market there was no
Rose: business. And so we had so much momentum
Bob: into that that after we were successful at convincing Medicare to establish this National coverage.
It was shortly thereafter that we were faced with the decision to buy the business from J&J or then self-funded. We were just, you know, we just decided
Rose: decided to start the business because it was The Logical next step to do but at that
Bob: don’t think we ever. [00:29:00] Sat down and said well, we’ve got a five-year plan and we’re going to sell the business and we would have been forced into that thinking in speaking to or had we taken the money from the Venture capitalists, but I was just focused on you.
Just let’s just run the business and run it achieve our objectives and hopefully do some some good for for these patients who were at risk of strokes and bleeding and things will. War in find a way to work themselves out when you work for a big company and start a company within the within the corporation.
You don’t think about selling the company because big companies Johnson Johnson’s been around 450 years those businesses. I started or still there. They’re still running. So there’s no thought of an exit or you know an IPO. It was just you got a job to do get it done. And so we were we were in the business for a couple years before.
I had some advisors I brought in they started asking about what our exit plan was. We were showing good [00:30:00] Traction in the marketplace and they said what’s your exit plan?
Rose: I hadn’t thought about that. It’s like yeah. Yeah, right, right. I was happy we were making money. Okay, we can kind of replace our salary and that’s what you do for the rest of your life.
That’s what I thought you do right? You just you work until you retire and then it’s over.
Kathy: that was how many years into after you went
Bob: that was probably two and a half years. Yeah. We were about two and a half years into it. Our performance in the market was was very strong sales increased every year by a hundred percent year on year for five years by the time.
But by the time we sold the business just about five years after we started it. We had become one of the fastest-growing private companies in the [00:31:00] country. I think the fastest growing Healthcare company in the country and but it wasn’t just a straight linear progression. In fact the story that I share in the form of a case study with with the students I teach.
Is just that it talks about the the bumps along the way the journey is and there were there were several in particular that coincided with the financial crisis of 2008 that really
Rose: caused. Well
Bob: as it was it was from a business perspective. It was it was a real.
Kathy: Can you tell us a little more about that?
Because I think it’s important for entrepreneurs and couples to know that it’s not a straight path. It’s easy to meet someone when they’re on the other side. They’ve sold or or they have someone else running the company. and. [00:32:00] In almost any Venture there are dips along the way and unforeseen. Like you said the financial crisis of 2008.
I mean some people in hindsight said, oh, yeah, we saw it coming. But who knows? So can you tell us a little more about that and how that impacted your company?
Bob: sure. So let me take you back to the first half of 2008 is you know, the financial crisis happened in September 2008 a real broken 2008 in the first half of 2008 things never looked better for tapestry in the beginning of the year.
Our supplier who was a major medical company Fortune 500 company that was supplying us the equipment that we use to provide our service. So Medicare paid us for the service. We use their product this particular this Fortune 500 companies product to facilitate our service. So the two went [00:33:00] hand in hand.
And and they had come up with the new next-generation technology that was easier to use etcetera. So that was great. This is early 2008 Medicare also because they liked this what we were doing so much not just us but our competitors decided to expand the number of people that were eligible for this new benefit by five fold.
So it went from about a half a million people being eligible to three million people being eligible. With which you have the effect of expanding the market from about a half a billion dollars a year for the market potential to about five or six billion dollars as a total market. And so everything was looking really good at that time.
Our sales were continuing to grow year on year. We were generating cash flow is a very capital-intensive business. It cost us $1,000 to enroll every new [00:34:00] patient and then we collected about two hundred dollars a month. So in about five or six months on an individual patient, we had to pay back and then you know, it was an annuity stream after that.
But if you can imagine if your business is growing at an exponential rate and you’re constantly spending $1,000 for every new patient. It was always, you know you we’re always kind of chasing our tail from the cash perspective. So healthy business, but we were always on the Edge from the cache perspective.
So in early 2008 order to address that we had to we went to the SBA Our Community Bank and got some SBA Loans and mortgaged our our home in California and we had a vacation property back in the east coast and we mortgage both of those. And and took out we at that time credit was very free Costco.
If I can
Bob: Costco had an American Express program. We were [00:35:00] two percent cash discount and we had one point, you know, several hundred thousand dollars of line of credit on our Costco American Express card, which we could use to buy inventory. Not from Costco, but we use. The credit card in the 2% cash best program to buy inventory from the the medical device manufacturer.
And so as you can imagine we were buying hundreds of thousands of dollars worth of equipment per per month and that 2% started to really add up and that actually became the basis for paying our salary for a few years and. But despite that businesses, everything was just going well first half of 2008.
Although we had our houses. Completely mortgaged and double mortgage
Kathy: like real life Monopoly.
Rose: Exactly. Yeah. Yeah.
Kathy: and you were good with that [00:36:00] Rose
Rose: was okay with that. We cashed in his retirement. We took a loan against our our life insurance or we cashed in our life. Yeah, as long as I met my mortgage payment, I was happy and then write I had very creative ways of using money and using credit cards to pay off the next one to pay off the next one just to you know, and those offers were available at that
Kathy: those were the
Rose: right 0% for six months.
So I took out as much as I could. You know, I used it for six months and or by V months another one would come and say oh take out some so I take it off. I pay the other one off. So I never paid any interest but I just kind of used free money along the way to pay our bills to put our kids in, you know through school everything there.
Bob: high schoolers at this
Rose: They were high schoolers. Yeah.
Kathy: Yeah, which gets ever more expensive there into cars and that sort of thing. [00:37:00] Okay. So cash flow is a challenge.
Bob: cash flow is a challenge but we were we were managing from a business perspective and Rose did an amazing job managing from a from a family perspective.
In fact, I would say pretty much after I started the business. She was the she was our Chief Financial Officer. I mean in terms of managing cash flow
Kathy: Really. I mean, did
Rose: Not for the business know for our household.
Bob: yeah, I didn’t know see
Rose: had no idea how we were paying for things.
Bob: don’t I think there’s some black magic going on there.
Well, everything worked at
Rose: came out. Okay, but
Bob: then the in September of 2008 three things happened
Rose: that. Coincided
Bob: with the financial crisis. So that answer crisis actually wasn’t a problem for us except that all of these three other problems happened in the midst of the financial crisis, which just magnified things for us.
[00:38:00] The very first thing is the partner that we had supplying us medical devices saw how good that we were doing and we were still a privately-funded company. They were a public funded company and they were starting to see how well we were doing. In the service in providing services using their devices and they said, you know you’re doing very well.
We’ve got this new technology that you’re using and doing very well. We think we would like to get into your business a vertical integration is with you know, it’s called and so they says will continue to provide you supply your product. No problem there but rest assured we intend to. Compete against you so it’s so that was that was I suppose it shouldn’t have been surprising.
It was it was disappointing but nonetheless they had the right to do it and we weren’t objecting to that. But [00:39:00] it meant we had a brand new competitor. Well funded publicly traded company competing with. At the same time there were three or four other large publicly traded companies that we’re seeing what we were doing the marketplace and decided they wanted a piece of the action too.
They figured here’s the small little privately funded company called tapestry becoming the market leader in this market to typically large Healthcare companies or so all of a sudden we found ourselves competing against for large publicly traded companies in this still relatively small but. Vastly growing Market because the medicare’s coverage decision.
So that was the first situation. The second situation was at the same time Medicare announced that they were considering excuse me, the FDA announced that they were considering a brand new class of drugs that would replace the need for Warfarin and even now 10 years later. You still see a lot of commercials that talk about the compare [00:40:00] the these new drugs.
Against Warfarin. Well, those drugs didn’t exist 10 years ago. They were announced just in the fall of 2008 they became and direct threat to our business because to the extent that people were no longer using Warfarin or Coumadin they didn’t need they wouldn’t need our service. So that was a that was kind of longer to no longer term existential threat that we were facing but still very real.
That was the second threat the third threatened and really the most serious one was as we were as we were expanding our business. We move to a brand new facility. We got a beautiful new facility 40,000 square feet on the other side of town and in the process of moving from a smaller facility to a newer facility Medicare.
There was an administrative snafu. I’ll say. With Medicare [00:41:00] and that that caused them to stop paying us they lost our change of address notice and it seems like a trivial matter, but it wasn’t trivial matter.
Kathy: that’s huge it. What’s your primary or was it the only
Rose: it was the
Bob: primary source of it was 90% of our cash flow was tied up with Medicare.
Yeah, and so Medicare they were there were some other changes going on at MediCare at the time. And Medicare said, okay, we’ve got to stop paying you because we don’t recognize this new address we and so until we can come out make an inspection. We are going to turn off the cash flow and they said it’s going to take a six to nine months to come out and do an inspection.
Rose: no way.
Bob: And so at that time again, you know our business was growing a hundred percent month-over-month year and year. And every new patient cost us another thousand dollars. So the the [00:42:00] more successful we were the more cash we needed and so our cash demands were ever increasing our competition in the short-term was increasing because we had large publicly traded companies coming in to compete against us and our primary source of 90% of our cash flow disappears.
And all shortly after we had just mortgage both homes and put our retirement
Rose: savings. Yeah, and
Bob: all of this happened actually in the first it happened the first week of September 2008 the second week of September 2008 the financial crisis really, you know, the Meltdown began with Lehman Brothers and Stern bear Stearns.
Etc and so the idea of going out and getting other financing to hold us over it was not to be had I mentioned the credit cards that we had at that point $375,000 of [00:43:00] credit on the credit card which by the way we paid off every single month. In fact, sometimes we paid you off multiple times per month in order to keep the cash coming so we weren’t we didn’t overextend ourselves.
From a credit card perspective, but overnight American Express reduced our credit limit from $375,000 to $15,000. And so overnight that just disappeared and so for the period between middle September until the middle of November. We didn’t know what was going to happen. Things got very very very serious.
We got our members of Congress involved keep in mind. This was also the middle of the 2008 presidential election. So the sort of individuals we might have been able to lean on with the former Bush Administration. Frankly. They were you know, they were on their way out the Obama Administration at that point [00:44:00] hadn’t yet taken shape the so there was a lot of uncertainty in terms of who to go to.
With in Washington. aside from that
Kathy: and unicorns and rainbows. So so what did you do? How did you get over that hump? Was it a hump? Was it years? What did that
Rose: Medicare part
Bob: Yeah. Why don’t you share? What you were thinking about that time and you know, the time period was around November of 2008 was like after the presidential election, but before Thanksgiving and I’ll pick up on that.
Rose: Yeah. Well I had planned a trip to Israel with our church. They were doing a trip and I think I signed up in the spring. So April or May the trip was in October, you know, I had already paid for it. I was like, but should [00:45:00] I go should I go? I think we made the decision that I should go, you know, because I should go and it was it was Israel.
Everyone always needs to go to Israel. but. Things were bothering me and I knew we could lose both of our houses. I knew we could lose everything. But I wasn’t afraid for some reason I really wasn’t afraid I just knew. Somehow everything would work out. I didn’t know how it was going to work out.
I just knew that we were always protected. Because the you know, the free credit that allowed the financial crisis to happen was the free credit. We were kind of floating on all those years. So that was that was good for us. You know, we had gone down to the bare minimum of expenses. So I know we would be okay there and all right if we had to sell our house.
Okay, you know, [00:46:00] that’s what would happen but.
Rose: I think Bob knew more of the details maybe and I know maybe I shouldn’t say that I knew the details but I also knew and going through there were a lot of other little things that happened with the business that he didn’t share that when he was faced with something.
That’s like, oh my goodness. Here’s a dead end he would sit in his office and he would think and he would think and he would think and he would come up. The most ingenious way to get over that hump that that barrier was there for a reason right? It was like, oh, okay, and it would turn out that the barrier that caused him to stop and come up with a creative solution to fix that problem which seemed like a dead end in front of you and on both sides.
It was because we really needed to go in another Direction and the direction was [00:47:00] better than we could have imagined. Exactly, not at all because when he started it, he wanted the or the I think the beginning of the business was let’s get the device paid for and then we’re good. We’re golden, but the better model was to get a service model where we had to place the device.
And you get the ongoing annuity stream you pay for the device over time, but then as long as the people were testing and we could keep them healthy, you know, it was a much better model ongoing income. So there were four or five things like that that happened to us with the meters with the competition and there was always a bigger and better solution.
So I didn’t know how this was going to turn out. I think I was just. I was okay. I don’t know how I can say other than I was okay, and I knew we would be okay. Oh,
Kathy: you aware? I mean he had to be under a lot of stress at that
Bob: time. Oh, yeah, how [00:48:00] does stress
Kathy: how did that play out
Bob: I always felt supported I really did and I think I think I I’m I don’t recall any ever holding anything back. not I mean. Anything material and if I held things back it was just like it was a trivial detail using need to know it but it was and it was yeah, I never I never felt what I’ll say is I never felt the need to Shield Rose
Rose: from bad news or.
Because I knew that I needed
Bob: support when we were making these critical decisions. This sounds like you know, I think it’s important to realize we didn’t wake up in the middle of 2008 and say gosh, how did we get, you know several million dollars in debt
Kathy: several [00:49:00] million.
Bob: Yeah through well through through through the loan.
So the SBA Loans have to be personally guaranteed and and collateralized with our homes and the funds and.
Bob: Retirement fund so it was all that was hanging over our heads and and in order to be able to bring Rose along for those decisions. I had to be completely transparent. So there was never a time where and I think I can kind of searched my conscience and know that no there was nothing we held back because frankly I didn’t want to.
I want to joint joint ownership when those
Bob: you have I didn’t I did not want to be on the other end of i-told-you-so be and there was
Rose: there was never an I Told You So and there was never anything. Well, why didn’t you tell me that? No, he told me everything.
Kathy: for that Rose or did you ever think I just don’t even want to know because I think that’s where couples are real different.
[00:50:00] Some couples do talk about all aspects of the business. Some people work in the business together other couples just you know the spouse. Just puts their head in the sand and doesn’t want to know which my observation is that is an incredible weight on the entrepreneur on the one that is making those decisions and like you said, it’s even though you were the one that had to execute knowing that you were in agreement.
Kathy: It helps to have a team. I mean you are a team as a
Rose: Yeah now now I know that we made all of the decisions and I know he would come to me and say alright, you know, we need to guarantee this loan. Nobody else is there to do it, you know, it’s us we got to do it. We need the money and we would make the decisions together.
So I never felt like I was in the. I always felt like I knew what was going on. So maybe if I said [00:51:00] before I wasn’t aware of the intricacies of the business, I did have no idea how many monitors he ordered every month or what the credit card bills were. I knew what was going on in my household finances and he had no idea what was going on in the household finances.
If I said, you know next month, we’re going to need a paycheck because I have these three things coming up. You know, we’re okay until then, but I need some money for that. Then maybe we would get paid like every three months he would get half a paycheck or something like that. So it was long as we were just keeping our head above the water.
I was okay because I did see the growth. I mean we moved into that giant building that we didn’t need. Because it was you know going under foreclosure and we got it at a good price. And so again the same things that drove us that drove the business up and kept the market low got us in the building that who knew we were going to expand into that entire thing.
We thought we [00:52:00] were just going to be in this little space because we couldn’t stay where we were anymore filling up there. Yes, it’s filled up that entire building. It was incredible. And we moved in there with 1215
Kathy: people and did you have a partner Bob or you were the sole owner?
Bob: people what? We yeah we did have.
You know a senior manager who came on board who was you know with us from the from the very early stages and in later years her and her husband also provided some funding for the business and she was a great asset. I mean, she’s very, you know, her the two of us complemented one another one another very
She was very extroverted and was very good with our team. I was going to policy strategy guy
Bob: and we worked very well together.
Kathy: but the financial burden really fell on your
Rose: Yeah, I think
[00:53:00] Bob: I mean I was the both I was functioning as the company’s CFO but and most of the funding was was was personally guaranteed by Rosa myself from from day one, so.
But I think it’s important to recognize. We it wasn’t, you know, some people kind of look at where we were in November of 2008 during this critical juncture and say, how could you have let yourself get to the situation where you had, you know, literally millions of dollars of
Rose: potential debt between mortgages and houses and
Bob: and how could you get yourself into that situation?
And the truth is it didn’t happen overnight. It was it happened rationally in Step functions. As you know, as the business was growing. We were never fueling an unhealthy business. I think that’s the important thing. We were always fueling positive
Rose: growth. And be [00:54:00] good because as
Bob: I said the candy business was Cash intensive, in order to acquire an enrolled new.
The more successful we were the more cash we needed and so forth and so on. So the only way to allow the cash flow to catch up would have been to taper down our growth and that just that had other consequences in terms of value the business the faster the grid business was growing the more valuable was but the less cash we had so we were in this kind of vicious cycle in about two weeks before.
Thanksgiving in 2008, the presidential elections had finished the Bush Administration back in DC was sort of you know, they were transitioning out the Obama administration had transitioned in and we still have this problem with CMS not paying us and it was during that time
Rose: that. I had
Bob: a crisis of Faith.
So I would say, [00:55:00] you know, one of the things I realized at this point in time was wow. I thought I had very strong faith at that point in time. I realized that my business had become my idol. It was in the very it was very definition of an idol. I was holding on to it in a way that was unhealthy and I can say well gosh, I was looking to provide the family and all the employees that we were hiring at that point.
We had about 75 full-time employees and. Think about 700 contract workers around the country. So we have a lot of people that are depending upon us and but at that point we were. the business had become it would become my idol the most important thing in my in my life at that point and it was only at this point where I really felt hopeless.
I mean we could done everything we could. To try to convince [00:56:00] Medicare to turn our payment back on and correct the error that they had made and I realized that it was completely out of my control and it was in finally accepting that. That was my turn around both from a personal faith perspective and from kind of the next chapter and in
Kathy: what specifically changed when you said it was my turn around what what changed
Bob: I became a there’s a there’s there’s an expression that if you can if you can deal with a worst-case scenario, then you can deal with anything or if you can deal with your greatest fear.
You have nothing to fear. And so we that’s what we did. So it was about that time early 2000s November 2008 where. I said to myself first and then I think I said to Rose, you know, if it’s if it’s God’s plan
Rose: to [00:57:00] put us out of business. Hmm lose our business lose our homes lose our retirement savings then.
Bob: with that. I really I just I got to the point where I really was okay with that. I can’t you know, I wouldn’t have liked it and maybe. It
Rose: write it might
Bob: have been uncomfortable living under a bridge, but I got to the point where personally I could I can say I really was willing to accept that with the I think also with some confidence that you know, we’d find a way to bounce back and you know what however the thing and she’ll crisis worked.
It would just be another chapter that might take many many years to develop but that somehow things would work out and when I finally got it to peace with that realize that there’s nothing I can do to convince Medicare to make this turn around. I think at that point I really wasn’t [00:58:00] peace for about two weeks before as we were leading up to avert really fateful day where we were 48 hours from literally losing everything losing
business losing putting about 10,000 patients removing them from
this what Medicare considered a life-saving service we would have had to pull the service from them because we were out of business we would put our 75 full-time employees and 700 part-time employees out of business in the middle of the financial crisis.
We would have been financially destitute. Our kids would have come home from Thanksgiving break. They were both in college at that. Two kids in college and they would not have been able to return back to school after Thanksgiving break and we would have had to start over and so getting the point where I was really okay with that like that.
We were somehow going to be taken care of was was really really critical [00:59:00] just being at peace with that didn’t solve the problem. Let’s go.
Kathy: and when you say at peace, I mean were you feeling anxiety? What were you feeling? What was you said 48 hours away from that worst case scenario becoming a reality.
Rose: Yeah, I think his has business associate. I was in the office that day and she said Rose. Can you look up on the computer? You know, what do you do? How do you lay off people? How do you fire people? We’re in California You Know download the regulations print them out for me. See what we have to do how much notice we have to give and I would love to go yikes.
Okay, this is kind of real now, but all right, I got
Kathy: it just sort of one foot in front of the other at that point because all options have
Bob: been expended. Yeah, we we were in crisis mode at that point. I had some crisis experience for my time with Johnson Johnson. I was there during Le Johnson Johnson as you may know way back [01:00:00] when that.
Crisis with Tylenol title poisonings is back in the early 80s. I was actually with the the division when that happens. I had a chance to see just a very young employee. I was an intern at the time. I saw that unfold I saw the way that they are Johnson Johnson’s chairman at the time handled that and it was really understanding how to.
Operate under pressure was really I think formational for a young executive at the time and I think we carry over a lot of those principles into the way that we structured our business and I hope I mean, that’s what I was trying to model during this this these critical 48 Hours leading up to Thanksgiving on 2008.
That yeah, that’s right. Yeah.
Kathy: level of pressure and. I mean in the worst case scenario, that’s when you hear people committing suicide in, you know, [01:01:00] really feeling hopeless. So, how did you hang on?
Bob: Yeah. I have to say after this after this moment where I literally relinquished the business as my idol.
I was never at that risk. I mean I’ve had that question asked to like what were you considered doing us? I was considering looking for the nicest box that we could find to move into under the nicest bridge that we could
find. But but nothing, you know, nothing that was outside of the sphere of Hope and hope is and that’s that’s the sadness when people are forced to whether it’s resorting to physical harm or substance abuse.
That if that happens when there’s an avoidance of hope. I I think I had hope I think you know, I’ll this was through [01:02:00] my faith. I was I was given I was given the gift of hope that there would be a better day no matter and it may not involve running a business may not be. Involve living in a house or having a vacation house or having my kids in college, but there was a hope for greater thing and I really Rose created an environment that enabled me to have
was you know, I wasn’t there wasn’t even a hint of i-told-you-so or why did you do that?
Why didn’t you stay with J&J and there were certainly many opportunities for her to do that, but there was never even a hint of that. And so we had a moment again. We were in California and. In the spirit of hope I made a trip the Monday before Thanksgiving 2008 and met with a business associate who had a software company in Connecticut.
We agreed to meet in New York City and I shared with him my situation. I knew he has [01:03:00] relatively small software company, but out of desperation. I said I asked him whether he could provide some flow. To
Rose: to help us through
Bob: this he was in a similar situation in that small company financial crisis. He didn’t have the money to support us but during that meeting the Monday afternoon.
I got a call from my attorney in Washington and she said, where are you and can you be in Washington tonight? So just so happens. I was just a couple of hours by train. And she said I’ve arranged a meeting with the under Secretary of Health and Human Services. So at this point this is you know, two levels below the president and the idea of a private small private company like tapestry getting a meeting with at that point.
This was really the probably the only person in Washington and I would say including the present who could have solved it solve the problem the Secretary of Health and Human Services was [01:04:00] already transitioning out the president. Writing is farewell speech and the the key person was this this particular individual.
And so I said, yeah, it just so happens. I’m she said we’ve got to get down to Washington. He’s going he’s agreed to meet you at 7:30 at night and she’s after that he’s going on vacation with his family and this this may be one of the last business meetings he ever has in this capacity is under.
Rose: secretary. And so of course, I got
Bob: next I get the Amtrak down to DC and we had we had a meeting and was very intimidating it was. Top floor of the HHS building not too far from the Washington Monument. So very clear November night and after going through a whole Security check my attorney. Brought me up and she had a previous work relationship with this this gentleman [01:05:00] and she said okay, he’s a busy guy the fact that he’s a she said I had to pull out every single trick.
I had to get a meeting with him and you’ve got to make this an impactful meeting. She said, he’s going to be literally packing his desk as as your meeting and. You know, you’ve got to let them know in no uncertain terms what you need. You said she will forewarn me. You can’t point fingers. This was a Medicare administrative mistake.
That was made. She’s a no finger pointing. It’s just lay out the problem. So anyway, I explain the problem. First of all said I described for him what our business did we help people who were at risk of stroke self monitor themselves. And then I proceeded to talk about the administrative problem and about 90 seconds in the conversation.
He started to rub his eyes and appear to be waving the off and I looked at my [01:06:00] attorney thinking is this meeting over and he looked up and he kind of had, you know tears in his eyes. He said he said I get what your business is about. He said my dad had a mechanical heart valve and had a very serious situation A few years ago because he didn’t have a service like you.
He said I get what you do I get that it’s important. What do you need? And so I said I said, well I said what this point, you know, the folks at Medicare all was about five million dollars. So what I need is about 5 million dollars in the
Rose: the next 48 hours. Otherwise, we’re
Bob: out of business and we’re going to 10,000 people who will be without this life-saving service that your dad needed.
Rose: and. He said okay. He said I see
Bob: what you I’ll see what we can do and that was it. And so with that I went back to my hotel flew back to California the next the next [01:07:00] morning and at that point, I really didn’t know what to make. I mean hearing someone in DC saying I’ll see what I can do. It was
Kathy: and he’s leaving to go on vacation.
Bob: credit. He by the time I had arrived SFO the next morning. I had a letter of apology from the the head of medic here saying we have approved three and a half million dollar a 300 million dollar wire transfer. It will be in your bank tonight. They realize they made a mistake and they said the other remaining payment would be made in the coming days after we’ve had a chance to process.
So we had actually scheduled so this is a Tuesday morning Wednesday morning. We had
Kathy: before Thanksgiving,
Bob: yeah, this is Benson for Thanksgiving. So the next morning we had scheduled a town-hall meeting with all of our employees who didn’t know what was going on. I think they had might have [01:08:00] had some sense, but you know, they didn’t understand how dire the
Rose: situation was.
Yeah. And so we had town hall meeting that I would do periodically
Bob: to give the updates on the company and the plan was to use that town hall meeting to explain how Medicare would put us out of business. And so we have the town hall meeting people were waiting anxiously and we were able to fortunately go in and say we are.
I just gave a kind of standard update. We had I think we purchased a bunch of turkeys the three half million dollars that we had and we had pretty good credit as dead Costco. So we got a good deal exactly and so we weren’t often able to do even like we you know gestures like that for employees who are giving them 75 term, you know turkeys for the employees was [01:09:00] kind of.
A big deal and it’s the other thing. It did in retrospect was calm them that they understood that if we were in a position to to by turkeys for employees all of a
Rose: a sudden,
Bob: you know, things couldn’t be that bad. How could bad could they be we couldn’t be going out of business unless we were buying the turkeys a credit.
So it was that was the turning point and then after that Medicare reactivated. Numbers and things will find but that led to a decision. This was four years after we started the company, so we had a great run. That then was the really the Catalyst for us to say, you know, what we’ve we’ve dodged the bullet.
We’ve got we’ve got new, you know, those four well funded publicly traded companies. We’re still our competitors and they were still hungry and ready to take over our little private. Now this the market that we created the [01:10:00] FDA had still launched these drugs that had the potential to eventually replace Warfarin.
So our long-term prognosis was still uncertain and we were sort of from a business perspective at our highest point at that point. So it was at that point. We said it’s time for us to to sell it’s time to us to really exit the business
Rose: And so.
Kathy: And how did you go about
Bob: doing that? So we we engaged in investment banker and we considered several different options there.
The one set of options was to sell to one of the large publicly traded companies who were just getting into the business and we’re looking for. Your to acquire markets here. We were considered the gold standard if I can say that amongst the different of the companies that were competing partly because we were in there the longest I was most [01:11:00] intimately involved with working with Medicare to establish the national policy.
So I understood that the policy, you know is as well as any of the companies or we did and so we considered all of the. Competitors in the market as number one. We looked at other companies that might be considering entering the market and then we also looked at some private Equity firms that might be interested in buying the business just for for cash flow purposes, which would have given us an opportunity to sell part of the company and still remain in the company and then sell it or do an IPO a few years later.
Kathy: and so how did you end up
Bob: being acquired? So we we spoke to the top two or three candidates including our largest competitor? And they had the the most interest to acquire us for several reasons one. It was an opportunity for them to become [01:12:00] overnight the market leader to they were having some operational problems at the time.
That we were not fully aware of and so they were very interested in our management team. I was really fortunate to have addition to the woman who was co-founder a team of individuals that had kind of grown up in the business Rose was instrumental in keeping that group of individuals intact During the period of uncertainty Rose in many cases was kind of the face.
Certainly of the nor family to these most of them were
Rose: women. Yeah. We had a large. Yeah female Workforce. Yeah.
Kathy: And so, how did you do that Rose? I’m curious
Rose: I was just I think I was the calming presence in the office because I didn’t I had a job as like the office manager.
Kathy: Okay, so you were working in the business
Rose: I was working in the business but I [01:13:00] wasn’t doing anything that ever required a deadline or to run a meeting or anything like that, but I would go around and check with all the ladies.
How are you doing today? What you know, what’s new with your family? How are your children? So for them, I think it was. Oh, I’m sorry honey. It was wow, like the boss’s wife. I’ll talk to me for me. It was just
Kathy: and if she’s not I mean if you had been really anxious and
Rose: really anxious and
Kathy: stirring things up.
It could have created much more uncertainty
Rose: Correct. Yeah, correct. But I made friends with a lot of the women in the office, you know, some of them were our neighbors. Some of them are our children’s friends mom’s. Oh it was it was wonderful.
Kathy: you guys must have felt when you were 48 hours away from this nuclear implosion.
Kathy: Wow, what a great story. So so you sold at some [01:14:00] point how long did it take for that process to go through and the
Rose: wedding and
Bob: and you just it just about a year by there were the companies were very interested in acquiring a so we spent probably five or six months vetting the different types of companies.
So doing a road show talking to the interested parties are investment bankers started to solicit bids. And we considered I guess we had three three offers for the business for offers for the business including private Equity Firm. So we had an opportunity to do some you know, sort of auctioneering or the investment.
That’s the eovaldi and think investment banker did and for the reasons. I was referring to earlier it are our largest competitor. Which was a publicly traded company was in the best position to pay the [01:15:00] greatest premium and and and also afforded us an opportunity to stay on board for a couple of years afterwards to run the companies actually merge the two companies emerge ourselves with our competitors.
I was named CEO of the two the two companies and we were given some incentives to stay on board to help turn.
Kathy: before you completely exited?
Bob: it was about two and a half or know a year and a half and then they kept me on board as a strategic advisor for two or three years after that but at that point it was I was pretty much I was pretty much done after about 18 months.
We had done what we set out to do to merge the two companies turn the turn the other kind of the Arkham former competitor around in terms of their operating practices and. Put them on a straight path and and did well, I mean the company that acquired us did well in acquiring us [01:16:00] and I think we did well in being acquired so it was one of those wins for for everyone and obviously.
Kathy: year was that acquisition completed?
Rose: late 2009
Bob: and you know because of the. Contingency payments that extended into 2010-2011
Rose: found you on
Kathy: ink. Yeah,
Rose: okay, 8:14 in the Inc. 5000.
Bob: Yeah, that was that was the following year the way the ink ink 5,000 works is your you’re not eligible. If you’re acquired during the year, so the year that if you were to look at unfortunately, we’re not listen 2010 which is based on 2009 results.
But our ranking in the [01:17:00] 2010 results would have been I think number seven or eight overall but because we required in November of 2009 we were ineligible for the. So we just have to we have to take satisfaction that we were number eight with an asterisk in the
Kathy: awesome. I mean what a store. I mean, there’s not an adventure movie that gets my work along the way it was with to be within that 48 hours.
And when the company was acquired like when you sign the paper, what did you guys think or feel in that moment? Did you pop champagne? Did you take a
Bob: Bob nap?
Kathy: Bob nap by the way is just you sit down anywhere for 10
Rose: right when they came with us.
Bob: I wasn’t
Rose: you weren’t there. No. No. No, he went to [01:18:00] our home on the east coast and did a lot of back and forth with papers and faxing and all that was that before that
Bob: yeah, so we were expecting to finish the transaction and like mid October 2009 and I actually flew back to the east coast which is where the acquiring company was space.
They were based in Boston. We were I was camped out in our home in Southern New Jersey, which was just a short one hour flight to Boston. And so the thought was. You know, we would wrap up the final paperwork for a day or so and then I would fly up to Boston. We sign and we do everything you described pop champagne and and then go out to a nice dinner
Rose: sleep for days.
Bob: and so as it turned out I was camped out there for about two weeks because it’s there was always like one last paper that needed to be
Kathy: So much [01:19:00] legal work
Bob: just continued day and day out so I was camped out there alone as so as you were doing the celebration on the on the day that it finally happened.
I was actually alone in Southern New Jersey and our
Rose: right right
Bob: it was empty and I went for a long walk when I knew that everything was finally done and it was actually very kind of melodramatic or anticlimactic I should say. Where you know I signed the paper Senate in the fax machine from the local library, which was serving as my remote office and then there was a period of time where I literally signed the paper faxed it but because we weren’t in the same room.
I had to wait for the other facts from the acquiring company to come through for confirmation and even then. My attorney said well, it’s not really done until [01:20:00] the transaction is registered in the state of Delaware the Delaware. It was a Delaware Corporation. The acquiring company was so the transaction had to be registered in the state of Delaware and that then became the trigger for them to release the money to us.
So signing the paper didn’t feel like the end. It didn’t feel like the end until I got. An email on my BlackBerry at the time from yeah that’s showing showing the the age from my attorney saying. it’s registered and here’s the wire transfer number. And so at that point it was it was like a cold November day a year after our drama in in Washington and I had gone for a long walk on the beach and I was.
I was just praying like I knew things were done but there was a sense of anxiety. Like if they change their mind at the last minute we’ve just [01:21:00] once again, we’d be we’d be we’d be a different situation and so as I was walking back after this hour walk along the beach my Blackberry. Whatever blackberries did dinged or whatever buzzed and I saw the message and I just I just hit the ground.
I hit the sand kind of the same way. I year earlier. I hit the ground when I really when I had to relinquish control of the business. It was just then it was in I would say.
submission. In this time, it was in just Elation, but you know, like it was tearful Elation was like this this baby that we can brought up and had this turbulent five-year growth period was done and what I can say from an entrepreneurial perspective was [01:22:00] you learn a lot about entrepreneurship by you know in books in school in.
Working for a big company and starting a business as I did five times over. But it’s a little bit different. As you said. It’s a little bit different when you’ve got a safety net providing you a salary and providing the funding for your business when you’re creating new businesses within a corporation.
In this case. It was it was like the entire entrepreneurial Journey became crystallized in a second when I went when. But I got the message that. state of Delaware recognize the acquisition wire transfer was made and I actually had a number that I could look at. It was it was it
Rose: our bank account.
Bob: It was like the fog lifted on this hold the whole mystery of Entrepreneurship for me and it’s like, [01:23:00] okay now I see why all these things that we were doing. Were important in some cases we did things very intentionally with the idea that ultimately we want to create a great business that someone would want to acquire in some cases.
We just did it instincts really or in some cases. I did it because that’s the way I learned in work. That’s the way I was trained and measure development program 20 years earlier. but it just it just all crystallized in a way that it’s hard to describe and so. Was it just that sense of accomplishment?
Kathy: we did this.
Bob: I think there was that but I yeah, I think there was that but I think it was even we sort of knew that we had done this like when once they made the offer, I think this was more just crystallizing what had transpired in terms of how to create a. How to create a vision how to build a business around that Vision how to plan and Marshall resources for that Vision how to [01:24:00] execute the plan for that vision and then seeing it all snap in place and they’re seeing the beginning to the end all materialize.
It just became I don’t know how else to describe it except it was like moving from old like an old grainy television screen, too. High definition overnight. It was just that complete Clarity of the whole journey all made
Kathy: signifies a shift in where your focus could be which I want to get to in another conversation.
But I want to come back and ask a question about marriage again because I think a lot of times entrepreneurs are like I’ve just got to get this out and you know my family hopefully we’ll be there whenever that acquisition comes or when we get profitable enough that I’m not just 24/7 birthing this baby as you said, so I’m curious.
[01:25:00] Because I know when we met you guys several years ago. I mean you just you have such an easy relationship with each other. You’re just really great people to be around and it’s clear that you like each other a
Kathy: still and so I’m curious what are some things that you’ve done to maintain intimacy fun and friendship in your marriage for 36 years.
And especially when you know you were in that Vise of just unending pressure
Rose: I’m just going to say that one important thing I learned so this is may not answer those questions, but it may in a roundabout way answer. Those questions is I think we learned a lot about each other. We learned a lot about our strengths and weaknesses and how they balance each other out.
I once heard a podcast about pioneers and settlers and as soon [01:26:00] as I heard that I realized oh my goodness. Bob is a pioneer. And I’m a settler and you can’t have a Pioneer without a settlor and you can’t have a settlor without a Pioneer and I realized that’s how our relationship had always been. We got married.
We moved into our first house. I would have stayed there forever. Bob’s like no. No, there’s something bigger and better and he drags me to the next place and it’s like oh, okay. All right. I can see that. I did it and then I come and I settled like all right now I’m not leaving. Then he goes. Oh, I see something, you know again and again and again, so we had moved quite a few times, you know, just the different things we had done.
So for me as the non entrepreneurial person in a business just understanding that about him was extremely helpful to know that he’s the risk-taker to know that he’s always on the look out on the horizon. Where’s that new land and as soon as he conquers that new land he’s done. He [01:27:00] has to move on to something else he knows and he’s also comfortable with me staying behind and settling until he gets the next area established.
Kathy: you guys have more of a complementarian I would say marriage, uh you each kind of have your sphere
Bob: of roles
yeah, I think so for sure
Kathy: together. You’re quite a powerful team.
Rose: Yeah, I think big well because we know our strengths and weaknesses. I think we’ve admitted our strengths and weaknesses to each other. We’ve admitted our family weaknesses that you bring from your parents and your grandparents and your heritage to a marriage, you know, my family tends to do this all while my family tends to do that.
So we know that if each about each other and we’ve given each other permission to say. Hey, stop acting like your mom. Hey, stop acting like your dad, you know what I mean? Exactly. So that is like, oh, yeah, you’re right. I really am doing [01:28:00] that. That’s that’s
Kathy: Go to marriage counseling along the way.
Did you have mentors? Did you read books? How did you learn those things about yourself about
Rose: Maybe trial and error listening to sermons listening to other people. Just knowing just seeing my family’s history and his family’s history. I think there was you know, and I’m just going to talk in very general terms about our parents generation and things that happened.
Well, we don’t talk to them anymore because this happened and. Either that just happened in our specific families or it’s a generational thing that happened around a certain time and we knew we didn’t want to be like that and we knew you know, those are things I don’t like about my parents. I don’t want to be like that and Bob same thing.
These are things I don’t like about the tendencies in my family. Let’s try to have [01:29:00] our family not do those
Kathy: So very intentional about how you wanted your family to be not just reacting
Kathy: making intentional choices. I like that.
Kathy: Anything else in terms of what? you guys do or did during those hard years, especially to keep some fun or keep the friendship and keep that intimacy that connection is a couple and not let the company just because it can it can just consume your life and it and it sounds like it did at one point.
Bob: point. Yeah, I think it did and I think you hear some people say you’ve got to be able to compartmentalize. Business and work and balance family work and I understand the spirit of that. What I would say is I’m not sure that we did that per se but I think what we did was equally healthy. I think when [01:30:00] you’re when you’re the founder of the business.
It’s not a it’s not a 40 hour a day. It’s 24/7. It’s and I know you know this you and Mark know. It’s 24/7. It’s all consuming. You can’t fake it in that you can’t say. Oh I’m present here. If I know I’ve got an unresolved issue with the business. It’s going to be there whether we’re at a candlelight dinner or not.
Rose: not and.
Bob: what I would say one of the one of the marks of a successful entrepreneur based on all the reading that I’ve done is. For the founder to be able to convey a compelling Vision to have others follow them that includes first the founding team the management team and others including investors that are going along for the ride.
I think that same principle applies in a [01:31:00] marriage. So when we look at and I’m not talking about starting a business within marriage I’m talking about, you know life is a marriage and us I think one of the best exercises. We’ve done and you may say whatever you’ve done for fun. This may surprise you is for for many years and I to some degree still do between Christmas and New Year’s we usually take you know a day or so and we just we talk about the future but it’s not just New Year’s resolutions and or we’re going to lose 10 pounds or do this or travel there.
I mean we talk about those things. But not in the context of an activity list. We talked about them in the context of our life together beginning with and again this goes to our faith. We talked about this from an eternal perspective. We start with eternity and then work backwards and it’s about what impact are we going to have on [01:32:00] this this world while we’re here on our family members our friends, our extended family the community the spheres that we’ve been placed whether it’s in the workplace or in the in our church or in the universities that I teach. You know, how are we going to impact that and then what does that look like? And so that’s that’s sort of the kind of the philosophical question ultimately the reason it takes, you know a couple days for us to have these conversations once a years it does get down into okay now, let’s talk about.
What we’re going to do with those things in mind those Eternal things in mind. What are we going to do in the in the coming months and that may include it may include losing 10 pounds or may include making a trip here, but it’s not to make a trip to see some new site. It’s to have time with maybe a family member or a long friend or to travel with a family member [01:33:00] or friend so that we we begin to execute these these.
Eternal objectives that we have and I think more than anything else that sounds like a planning actually on one levels of planning exercise. So it’s not very fun. Not very romantic. But what it does is fuses Our Lives fuses our vision in the same way that the founding entrepreneur needs to convey the vision that he or
she sees to those who may not have the same clarity. But have to have to sort of trust and be good followers to the entrepreneurial leader.
Kathy: wonder what we did but this encompasses both of you. It’s
Bob: Very much
Kathy: and were you doing that during the days of building the company or did that
Rose: think even before then right and we would have.
Like we don’t have any discussions on money and we don’t have any money issues because during those times of discussions we would say, okay, your car is getting old. Do we need a new car this year? Don’t we [01:34:00] if we made the decision we didn’t need a new car. There would be no person going out in the middle of May saying.
Oh honey. I just bought a car, you know or vice
Bob: I saw a new commercial this commercial so good. I just had to have it. I deserve the
Kathy: a Tesla.
Bob: It was yeah exactly. It was always incumbent upon the plan like once we agreed on the
Bob: in a kind of a dispassionate. Yeah mode. The plan dictate dictated what we did now and we provide enough flexibility that if it was a nice weekend, and we said let’s let’s go on a trip that we weren’t planning we gave ourselves the freedom to do that or if there was a really good commercial on a car.
Rose: go out to dinner or something happened, right the car broke down. We weren’t planning on it. Okay. Now we need to have another discussion. So we always had discussions like that. And then I also have to say we are very very silly. Very silly so silly that people may not [01:35:00] realize it. We’re the same people
Bob: Yeah, we do have a lot of we always had a lot of fun my marriage.
Rose: A lot of fun
Kathy: The Friendship is very apparent
Rose: wonderful. Thank you. Thank you.
Kathy: and I hope your children have been able to and I’m sure they have you know, had wonderful role models for their own marriages. Well, thank you so much for sharing your story. And you know, I think most people would take that money and run.
And I don’t know play golf or whatever you like to do forever, but that has not been your story. And I think there’s another chapter we’ll come back and visit another time because you’re very invested in the Next Generation
Kathy: but for your children your family and I would love to share that story at some point.
But thank you so much. This was a great story. And I hope it’s encouraging to a lot of couples that will be listening to it. So thank you
Rose: We do to know.
Bob: No. Thank you for the opportunity. Yes.
Rose: as many people as possible. Thank [01:36:00] you Kathy.
Kathy: Thank you.