Darvin shares his remarkable story of having a front-row seat to several key moments in our nation’s economy. From the dot com bubble burst to launching an e-commerce company to the financial crisis and many other things, Darvin has a unique perspective and opportunity to grow and learn through all of these experiences. You’ll enjoy his perspective and the way he navigated the various challenges he faced. Thankful to our episode sponsor, WindowCraft (https://windowcraft.biz), for their support.
Aaron Spatz 00:05
You’re listening to America’s entrepreneur, the podcast designed to educate, entertain, and inspire you in your personal professional journey. I’m your host, Aaron Spatz. And on the podcast, I interview entrepreneurs, industry experts, and other high achievers that detail their personal and professional journeys in business. My goal is to glean their experiences into actionable insights that you can apply to your own journey. If you’re new to the show, we’ve spoken with successful entrepreneurs, Grammy Award winning artists, best selling authors, chief executives, and other fascinating minds with unique experiences. We’ve covered topics such as how to achieve breakthrough and business, growing startups, effective leadership techniques, and much more. If you strive for continual self improvement, and enjoy fascinating and insightful conversation, hit the subscribe button. You’ll love it here at America’s entrepreneur. We’re gonna jump right into this morning. I am so excited to welcome Darvin Schmidt, the program Darvin comes to us from constructive transformations. He’s got a he’s got background in strategic planning, mergers and acquisitions finance. We’ll I’ll let him do all the explaining as we as we jump into this, but Darvin I just want to welcome you, man, thank you so much for being here this morning.
Darvin Schmidt 01:22
Oh, thank you for having me here and appreciate the opportunity to spend some time with you.
Aaron Spatz 01:26
Certainly, certainly. So my favorite leadoff question is, where are you? Where are you originally from?
Darvin Schmidt 01:33
So I’m originally from Western Nebraska. I grew up in the panhandle of Nebraska. Um, you know, I like to tell people reference it two ways. One is, I grew up about 40 miles north of Cabela’s original flagship store. Um, and then I also reference that I will, on a forum about a mile from Chimney Rock, if you’re familiar with The Oregon Trail in the pioneer days, why you’re that famous landmarks. So? Um,
Aaron Spatz 02:08
yeah, yeah, right, right there in the heart and in the heart of America. Yeah. Yeah. Yeah, that’s really cool. So you share with us a little bit of your journey then. So you’ve had you’ve had quite the quite the exciting career looks like for you a lot of that got started back with the Southwest securities, and then just you just kind of went from there. So take us on a little bit of a tour with you on how you got started into the into the work that you’re doing right now.
Darvin Schmidt 02:38
Yeah, actually, it goes back a little bit further than that. You know, Southwest securities is sort of my post business school career. But yeah, I grew up on a farm. I was a little wirey kid, didn’t like farming. My dad grew up on a farm loved it, I hated it. So, um, I couldn’t wait to get to go to college and pick a career that wasn’t farm related. And so I went to school in Chicago, got an economics degree and came out of school and moved to Dallas, most of my first job was, was in Dallas, and I’ve been here ever since. And as an economist, I got a job as a trained economist, actually got a job doing economic analysis, and my first job out of out of college was helping to deregulate the telecommunications industry did a lot of rape case work, which is, you know, expert witness work in the Public Utility Commission arena, and the administrative with a call Administrative Law Courts rather than civil courts. So I did did a lot of economic analysis to set rates for the regional Bell operating companies. I’m and did that for a couple years. Then, when JC Penney moved down here from New York, they were looking for economists and demographers and and so I decided to join them and work for them and by myself a little bit of time to decide whether I wanted to go to law school or business school. And then I went to business school. And when I got out I worked for Arthur Andersen fellow while doing a little bit did valuation advisory services, valuation, litigation support I bankruptcy restructuring turnaround work, you name it anything under the financial advisory services umbrella I did. But I wasn’t an accountant. So at one point they came to me and said, When are you going to be an accountant? I said, Never. Economist I’m not I’m not as CPA nor, you know, did I even qualify for the CPA exam? Because I didn’t take, you know, the requisite CPA grind?
Aaron Spatz 05:08
No, it’s so funny because it’s so it’s funny. I, my, my undergrad also is in economics. So a lot of people just assume that it’s like this. It’s this finance related degree and like guys know, it’s like this weird crossover between business and finance, but it’s mostly, you know, I mean, once you get into the micro economics, sure you’re getting, you’re getting a little bit more into the weeds, but it’s, it’s a lot more, you know, higher level type stuff, at least, at least for my experience. But what’s really cool about your story is like, you have this really interesting opportunity coming out of school to go put that degree to work, because that’s, that doesn’t happen all the time, at least, at least looking back on the job market, and maybe it was the maybe it’s the time that I was getting out of school and some the courage that that I’d made. But the the job market for economists typically required a lot of experience, maybe even an advanced degree in order to be even considered for something like that. So I just make that observation. It’s just it’s really cool that your firt like your first thing out of school is I mean, you’re, you’re doing stuff that really made a difference that was really detailed, some pretty critical, some some pretty critical things that you’re working on.
Darvin Schmidt 06:29
Yeah. Well, I’m in my economics degrees from the University of Chicago, which is known for sure economics, and they have a very quantitative program. So yeah, why when I got out of college, I had, I had, you know, calculus, advanced mathematics, econometrics, statistics, man. And and the first company I worked with was sort of a think tank consulting firm that, you know, we did some high level stuff. In fact, a lot of our our work depended on Pon some in house software that we developed, and it was off microeconomic based computer software applications, which, you know, I that was my first foray into coding. I didn’t write the code, we had coders, but I, we updated this software, you know, to include macroeconomic theory, and I don’t want to get I can go on and on and talk about. Sure. But but you know, you have to understand the code to be able to see if they program the economic principles correctly. And so was my first foray into into the IT world.
Aaron Spatz 07:44
Yeah, well, we’ll, we’ll back up and not go go down that rabbit trail. That’s, that’s real. It’s really fascinating. Because what yeah, you’re coming from a great school, that that is known for its Economics program. And the I mean, that’s just it’s a fascinating discussion. Maybe, maybe, maybe if we have a lot more time, we could talk more about that. But no, but but so. So you went to business school? You had that experience? And then from there, then what, like, what did that do for your career? And then what what were you working on for the next several years as you kind of lead up into some other things to work on? Because I mean, I’m looking at your background, I mean, you you’ve had quite a few different, really interesting opportunities. I just, I’d love to learn more about how those opportunities presented themselves to you.
Darvin Schmidt 08:36
Yeah, well, I went back to school got a degree in finance from the University of Texas at Austin. I loved Texas, I had, you know, been here. I, you know, I want to stay here because I could immediately see that we’re going to be still plenty opportunities in Texas. Um, so, uh, you know, I went to school and then spent some time at Arthur Andersen, as I said, wasn’t going to be a long term fit because it was not, you know, not my goal. To get a CPA and the accountancy world, you have to if you want to be a part or you got to be a CPA, that’s a for the most part. That’s the truth. And so I wanted to stay in finance. So, you know, my experience with Arthur Andersen get me into Southwest securities, they were at the time trying to build a full service regional investment banking firm, which includes corporate finance, work, investment bankers, sell side research, sales and trading, you know, syndicate department, and so I timed it pretty well and was the first investment banker hired under that new mandate. And so I spent six years there, doing nothing Traditional investment banking work. You know, we think of us as a mini Wall Street firm. You know, we weren’t doing the big, big deals that Merrill Lynch or Bear Stearns, or Morgan Stanley Goldman Sachs did, but we did that we have that model on a regional scale. Okay. Um, and so, uh, you know, was just a lot of hard work a lot of effort. But, um, yeah, I did a lot of technology related investment banking work, because of my experience in the telecom field, a lot of the rape case work I did I, I had to learn the telecom network from the bottom up. And so I learned, you know, literally, the switches and, and tandem switches and how it all worked. And the software, they use to, you know, route calls. And, and so I got sort of that technical engineering side from telecom. So it was pretty easy for me to understand other, you know, software companies, other hardware companies, and, of course, the internet when the internet came along. And so yeah, I had I, we, we competed as, as hard as we could. And I’ve done, I’ve raised money for startups to, you know, working with later stage companies and private equity, whether it’s m&a or raising capital. And I’ve even taken five companies public as an underwriter. And as a sole underwriter, where southwest securities was the only investment bank underwriting the public offering. So we assumed all the risk,
Aaron Spatz 11:41
holy cow, well, that’s, that’s something we don’t get to talk about, you know, every day, but what like, what is the what does that process look like, for a lot of companies, it’s, it, you have a company that their, their, their performance is x, and they’re, and they’re considering going public? And so one, help us all understand, what what drives the company, first of all, to think that they would like to go public, and then to what, what is that process, like, behind the scenes in order to even make that possible that you’re so heavily involved with?
Darvin Schmidt 12:12
Well, I think there are a number of factors that go into that decision. But obviously, if it you know, timing wise, and scale wise, the company should be well positioned to be received as a, you know, company in the public domain. So, you know, there is a, um, you know, there’s a certain size, I mean, it’s not a uniform size for every company, but it’s one where, you know, you have the infrastructure in place, so you can, you know, now you can scale the business even further, you know, you have enough support in employees to have a scalable business and, and, you know, resources to do that. Part of the reason also is just liquidity for your earlier investors, you know, a lot of them are venture capital or angel, and, you know, you know, they don’t want to, they don’t want to have illiquid investments for the rest of their, you know, fund life, the life of fun. So, you know, there’s pressure to, to go public so that they can at least liquidate some of their holdings. Um, you know, I think the public, the public, the IPO market has its cycles, too. Sometimes. It’s very popular, and sometimes it’s not popular. Right now, I think a lot of a lot of what you see me you still see a few very large tech companies go public, pharmaceutical companies go public. You know, I think, I think another another reason which companies go public is it does provide easier access to capital, when you’re when you’re public. Yeah, you can do an IPO. And then you can do a secondary offering, you can keep doing secondary offerings. It’s just that, you know, you have SOCs issues and, you know, public disclosure issues that that are also a burden to a public company, unnecessary requirement. But when you reach a certain level, you have the in house resources to manage all of those disclosure requirements that the SEC requires of a public company, it does provide a much easier way to get access to capital and large amounts of capital.
Aaron Spatz 14:45
Oh, yeah. No, cuz there’s just there’s so many different things from a compliance standpoint that that companies have to I mean, you see, I mean, you go to the investor relations tab of any major companies website or you you go scroll through the different SEC filings. And you’ll see just page after page after page, there’s just all sorts of different disclosures in if you’re just trying to get to an AK or a 10 Q or a 10k. I mean, you’ve got to wade through all these other documents that you may not even really care to read, but they’re, but they’re there. And they’re, and they’re an important part of the, of the disclosure process. And like you said, you got to, you’ve got to have the infrastructure, the staff to be able to handle that, that burden, because I mean, that’s quite the chore in to make sure that you are compliant, and that everything is on the up and up when it comes to everything with sec.
Darvin Schmidt 15:34
Yeah, yeah, I mean, it’s primarily, you know, the accounting, the numbers, and then the communication of those numbers, which is the investor relations function. But, you know, I mean, they came out with regulation, FD, which is a regulation fair disclosure, many years ago, and that, that added some extra burden on the communication side, because what it basically said is, you can’t give preferential information to mutual fund managers, first, you got to treat, you know, you individuals are the retail side of the market. And then, you know, funds are the institutional side. So, Reg FD said, you know, you can’t pre release your research to the fund manager, you got to release it to everybody at you know, at once. Um, and so it’s, you know, it’s, um, if it kind of leveled the playing field, but, you know, what the internet has done is that it’s actually brought some white noise to it. Just, you know, the last the Gamestop case, you know, it good example, you get on a shout site, or, or, you know, a stock chat sites and, and, you know, you can get people who are promoting a stock because they own it in, you know, people will listen sometimes without doing true, you know, analysis. Sure. series analysis so,
Aaron Spatz 17:01
well, for for those that are not, you’re not as well versed in that that whole situation, and I don’t know how closely follow the game that the whole Gamestop news story, because I do, I do remember reading that and seeing just the price of that stock, just go through the roof. And it was really, if I remember, right, it was, it’s a group of private and like the public group, retail, folks, I mean, anybody like, like myself, or just general public, we go, and we and we could go purchase the stock. And I think the whole I think the motivation behind it, and I’ll let you fill this all in, but the motivation behind it was they’re, they’re trying to screw over institutional investors that had what I think they had like a short position on, yeah, on that stock. And so they knew if they, if they drove this price of that stock up, then it was going to cause that, you know, those contracts to expire, and they were going to those folks are going to be left holding a pretty fat bill. Like, what was all that about? If you had time to study that? I totally put you on the spot on that one. But yeah,
Darvin Schmidt 18:07
I don’t want to I haven’t stated in great detail, because quite frankly, I’ve heard this story so many times, I just try and avoid it. I avoid those those chat rooms. i Yeah, no, have I managed my own investments by my concepts?
Aaron Spatz 18:22
But like, what, but the but the concept of it? I’m not asking you to say
Darvin Schmidt 18:28
yes, yeah. So what happens is, is companies there are you know, there may be large funds or institutional money in head, you know, hedge funds, mutual funds, ETFs, exchange traded funds, whatever, that take a short position, meaning they’ve, they think that the stock price is going down. So what they’ve done is they, they’ve a short position is where you sell stock that you don’t even own with the intent of buying it back at a lower price. And, and you technically are borrowing the stock from somebody else selling it, and then buying it back as it goes down, and then giving the stock back to the original owner. That’s what shorting a stock is. And so, and so, um, you know, a large short position in a stock can be an indication that you know, the stock price is something dreadful is going to happen to drive the stock that to cause the stock to go down some you know, material event will happen that will lower the value of the company. Well, in this case, I think, you know, retail traders, the average average trader with the you know, a discount brokerage account, are those the retail guys institutional versus versus retail, the economy there, and and so, the retail guys gone on and they started you know, Promoting buying the stock going long. And what that does is it increases the price of the stock. So the short sellers, who sell it at $100, hoping it goes to 50 now have to buy it back at a higher price. And so that’s how they lose money. And so short short, investors always want the price to go down long, investors always want the price to go up.
Aaron Spatz 20:26
That’s fascinating. And then yeah,
Darvin Schmidt 20:29
and then when you learn derivatives options, you know, options are derivative and instrument based off the price of the stock options can give you leverage. So where you put $1 An option and the price of the stock goes down $1, the option is is pricey, you could get a $3 increase in the value of your option. And and so options are a lot more riskier, because they have sort of that, that you’re not buying, you know, you’re not paying the whole price. You’re you’re betting on the price increase or decrease in the option market. And so yeah, it you can, you know, will you remember the trader at Barclays a few years ago, the rogue trader that, you know, lost billions of dollars, billions of dollars overnight, he just made bad trades. And, you know, he got, yeah, and they found out about it. And, you know, of course, he was fired. But yeah, I you know, you just, you gotta you gotta be smart and be you know, do your do your analysis. Yeah, for
Aaron Spatz 21:39
sure. No, it’s, it’s, it’s just, it’s, it’s a fascinating study, I’m not sure how that how that whole story is gonna play out for for the retail investors and I, and then we’ll, we’ll move on, because then we can start getting into a political discussion and a bunch of other things that we probably don’t want to get into. But but it’s all good. But, but know that, you know, you’ve had a lot of different experiences, like, take me through then your journey at, you know, after southwest securities, and you now moved on to some other opportunities. What, what was that like for you?
Darvin Schmidt 22:11
Yeah, well, you know, like a lot of people in 2001, I found myself laid off, I was doing a lot of investment banking in the.com world, and of course, you know, 2001 the.com bubble burst. And so, you know, investment banks were shedding their their.com bankers and research analysts, and I was, you know, I got caught up in that as well. So, I found myself looking for another opportunity. And I just, I met up with some people, and we started a B to C E commerce company, probably the worst time to do it, I knew I would never get any venture capital money, or, you know, I had all the contacts and the relationships, but just the wrong time to start, you know, an E commerce company. So saturated,
Aaron Spatz 23:04
I mean, the, the market was already saturated with a whole bunch of was a whole bunch of tech, like, tech related type, you know, the whole internet, boom, there. And so like that, that’s, that’s pretty neat, that you had like the, you had the gall to go out and do that. But like, for those that are not as familiar with with that whole period in time, it’s fascinating. And, and again, like, I appreciate you sharing it, just because it’s not everyday that you’ve got a front row seat to some of these things that are happening. So explain everybody. Again, just just to make sure we’re all on the same playing field here in terms of just general understanding, explain to folks what happened during the.com bubble burst, and like, what, what caused the bubble to happen in the first place? I know, it’s just, I mean, too big to fail, right? Company, companies just could not, could not, could not lose, and no matter what you did, it was just it was bound to be a success, but how help people understand like, what happened during that time that that caused the bubble? And then what brought it all to a screeching halt.
Darvin Schmidt 24:13
Yeah, that’s, you know, that’s been a long time. So I’m going to couch my answer, because a lot of this, you know, I may have forgotten a little bit, but essentially what, you know, the internet caught on it was a technology that had a ride during its commercialization getting in the public domain, right. And so, and so you couldn’t lose because anything that had a.com and the company name, people were enamored with the, this novel technology or this novel way of, of communicating or sending information, you know, the cost of the information was went down to nothing zero. And so people were, you know, visionaries were imagining business This models where, you know, the cost of information was so high now it’s so low. And so, um, you know, and and, you know, everybody kind of got on the bandwagon, and the novelty of it kind of overtook sound rational analysis and good business decision making. And so what would happen is, is just this exuberance in valuations, you know, stock prices were now not based on on, on tomorrow’s earnings, but earnings 10 years from now, or, you know, I still remember, research reports, I’ve gotten somewhere where, you know, research analysts were volume companies based on eyeballs, you know, views, a page views, right. And, you know, for an ecommerce company, the only way they make money is if you buy something from them, and yet, you know, they’re valuing the company based on the number of eyeballs that come to the landing page, rather than the revenues that, you know, it’s conversions in profit margin, that comes from buying their products, their goods and services, right. So that’s what happened. And then, and then, of course, you know, like everything, you can’t keep that pace up. But you know, what, when the public companies in the in that space, started reporting numbers, and they weren’t great numbers, or they didn’t meet expectations, then that causes, you know, everybody to readjust how they look at at those investments. And then that’s what happened is people just started fleeing, they realized you can’t value a, you know, you can’t a company with 10 customers at a billion dollars, right, or something like that. And then, and that’s what happened, then it’s a ripple effect that affects everybody in that sector. And that’s, that’s kind of what happened, it was, you know, people were literally making investment decisions. And companies were going public and putting common their names simply because it was driving the, you know, interest in their, in their stock, much higher, just having common name. And, you know, you take the.com off, and you put it in the manufacturing sector, and you start forcing people to look at, you know, cash flow statements, income statements and growth rates and financial metrics, there was no, you know, there were no numbers that justify those valuations. So that’s not what happened. It just the whole the whole, you know, capital markets world started giving these guys leniency in terms of how they valued companies and stuff, and then it caught up with
Aaron Spatz 27:44
that’s crazy. I mean, it except was those back when, I mean, you could the, the ability for someone to connect to internet was now at their fingertips. I mean, they could connect from their home. And it just it created this, this entirely new experience, and it really access to a whole new world. I mean, it really was like, it was it’s like the New World discovery of Christopher Columbus. I mean, it was like it is that revolutionary, that revolutionary to business into the way that that markets are shaped. So now you don’t, you’re not relying on FedEx, to, you know, to freight financial statements anymore. You know, you are you’re now you got everything at your fingertips are slowly right. I mean, I know it was. Still,
Darvin Schmidt 28:30
well imagine what what we would have done in this pandemic, had we not been able to order stuff online? Like, gosh, you know, we much, you know, infection rates could be much worse, because we would have been forced to go get our, you know, buy our groceries at the store rather than get them delivered or something like that. I mean, yeah, and, you know, that was just, it really was an interesting part of our technology. You know, our technology revolution. I’m crazy.
Aaron Spatz 29:00
Yeah. Well, then, I mean, so So let’s go back, go back to the E commerce companies. I mean, yet, like I said earlier, Mike, you had the gall to go start that in, right, during all this was happening. So like, what, what was that like in terms of like, you know, we’ve got something we’ve got an idea, we’re gonna run with this idea and see what happens what?
Darvin Schmidt 29:21
Well, yeah, in all fairness, we didn’t we didn’t come up with the idea. It was a sort of a failed effort by another company. Okay. And my partner’s happened to be in the web hosting business. And so they said, Well, you know, you basically came to me and said, he think we could turn this into a business or, you know, should we shut it down because our client can’t pay for it? We said well, and I said, Well, I think we can turn it into business. So the idea the the the idea itself, right? We didn’t come up with but it was the the person who did didn’t advance very far. And we sold, I sold wedding accessories online and, and there was a, somebody who was had a, a wedding magazine, and he was trying to start an online business and he didn’t get very far. But he was paying hosting fees. And, you know, the people I connected with said, you know, if we shut this down, we’ve got, you know, we’re already out on the hook for, you know, his hosting fees, what do you think we should do? And I asked when I jumped in, and, you know, and then and then we grew it from there. But, you know, the idea itself, we didn’t put that on paper. But yeah, it was, it was difficult, you know, it’s difficult to bootstrap any company. Um, and, but we did, and, you know, put a little bit of money in, but, um, you know, you just have to be very careful. And, of course, you can’t approach startups like a regular nine to five job, it’s just not going to be successful. So it’s a lot of late hours, and, you know, you wear many hats. I mean, I, I was CEO, A, for the most part, I was the CFO, too, I did the financial planning, I didn’t do a lot of the, the accounting, we had a controller, but, you know, the financial planning, I’m dealing with the, you know, partner strategic partners, I mean, I did search engine optimization, we did everything we could to drive traffic to the site, and convert that traffic into revenue into orders. Um, but we yeah, we had an amazing team for a small company, we, we had probably an advanced order fulfillment management system, you know, it helped us manage our inventory tied in with our shippers, and we were even probably one of the first companies to sell internationally. Wow. And going through that process is a big deal. You, when you when you cross borders, now you got, you know, you’re dealing in the customs world, and, you know, you’re dealing with a lot more regulation, and, you know, you got to know where the, your parts come from. Because if you want to sell to this country, they don’t, you know, you know, that have to know their laws, and they may not accept any, you know, components that were manufactured in this country. And then, you know, it’s, it can get nasty for a small company, but, but we did it and, and, and learned a lot. I mean, that was, you know, it was my first entrepreneurial effort, and I enjoyed it, I just, you know, you’re, it’s a young man’s game to start a business. And I, you know, I got, I spent a lot of time in a three year period, and I was, you know, burnt out a little bit. And, and, the other thing was this, I found out I, I had no connection to my products, and that’s important. Um, you know, I, I’m not a bride to be. And so I really lacked the necessary connection to the products. Um, and so I said, you know, an offer came along. And so I took it, and, you know, we cashed out some of it, but most of us cashed out I think, some if I remember correctly, some of our, our shareholder stayed in with the, the company that bought us out. And, yeah, I don’t get survived very, very long after my exit. But, uh, but, uh, it we built a nice little business up to that point.
Aaron Spatz 33:49
That’s great. I mean, that that’s really cool, seeing like your first entrepreneurial venture and how that how that whole thing played out and knowing that, you know, despite the fact that you didn’t have maybe connection to the product, you still were able to grow something successful. And you had had a great team of people, and you guys were able to make it happen and learning all these different complexities. And you, you make it sound so easy, and I know, it’s I know,
Darvin Schmidt 34:16
not I mean, but yeah, but it starts with you got to take a step forward, right? whether, you know, I mean, we looked at you know, at that time there was this whole industry growing up a search engine optimization, you had Pay Per Click advertising, but you had, you know, Overture and Google AdWords that were pay per click and, you know, if you’re an online business, the you know, it’s it’s your your operation only kind of exists virtually. I mean, yeah, you got physical location, but, but you know, we’re not, we’re not inviting people over to our offices or a warehouse to go by. We don’t have cash. registers at our office. And so, you know, marketing is an online role that matches your your business. And so, you know, we had to learn to play that online marketing game, pay per click, and, you know, you know that search engine optimization getting, you know, banner advertising, and, and all of that. And so, you know, we didn’t have a Morrow deep marketing staff. So right, I learned how to do a lot of that I did, you know, I learned Photoshop and did animated GIFs, and all that. And
Aaron Spatz 35:31
that’s so cool. And that’s back when I’m just sitting here, just salivating at the idea of like, some use AdWords of just what the cost would have been back then for, for certain types of certain certain types of advertising and certain certain assets that you can get your hands on, because now it’s become so hyper competitive in terms of trying to, you know, box your, your competitors out, and you may not not only establish dominance, but maintain that dominance, whether it relates to search engine optimization, or many of the other best practices in search engine optimization is not even limited. Just the website, there’s 1000 Other things you can be doing off site that can help contribute to your ability to be found. And so it’s, it’s, it’s, it’s fascinating, it’s really, it’s really interesting to me, just to, I’m talking purely selfishly, just because it’s really cool to hear how thing and see where it all kind of started the background and right out right around 2000 2001 2003, and so on. And then looking now where it’s calm, and it’s come so far, and these are just things last 20 years, but what would love to love to then kind of switch topics on you? And I’d love to learn more about like, what’s been one of the biggest, like, what, what’s been one of the biggest challenges that you’ve had to overcome in your career. I mean, you’ve you’ve had so many different, so many different opportunities. And we may have already touched on any number one of these but, but what’s been one of the biggest moments in your career where you felt like Man, that was, that was really tough, but it was really rewarding. Like really like, I really felt like I not only died, like I gained something, and maybe it was Manja monetarily or maybe it was just a great lesson. So Susan, come back from break, I look like I’d like to dive into something related to that. So but you know, we’re incredibly grateful to have just a amazing sponsors, I just wanted to shout out window craft window craft. If you haven’t had a chance, you can actually go back and watch episode with Luke Morrow. He was on I believe his last week, who’s the owner president of window crafts, they have a showroom in Dallas. They also have offices up in Gainesville. And so if you are in the market looking for, like really like high end windows doors like so like architecture, aluminum, iron, steel, bronze, they do historical replications of just about anything. But then they also work residential, but they do commercial, they do mean to be municipal colleges, they do a lot of different types of work. what’s really awesome about these guys is they they have their own in house installation crews. So they’re not outsourcing and forming out jobs to you know, all these different packs of subcontractors. They’re all people that are employees of the company so they have this you know, outstanding knowledge of all the intricacies involved with how this window or how this door actually goes in so it’s one thing to buy an order it I mean, I think anybody can buy an order most of this stuff right but it’s the expertise and the professionalism of understanding which product you need and then how to make sure it goes in properly and so you’re in your business or your home just looks fantastic. So they’re a really great group of people they service a tremendous areas like a 200 mile radius from DFW so they are all over the place, I do think they do a lot of work like Plano South Lake Fort Worth, Colorado, West Lake Dallas, they they kind of maintain a a position really they’re in the heart of DFW so give give those guys a shout incredibly grateful for their sponsorship and their support of the show. So darvid I just want to get right back into I just really want I just appreciate you being so open and in going down a couple of these different lanes here. But you know, what’s been what’s been some of the, some of the more challenging, I mean, you’ve already covered some pretty, pretty big challenges, right? But But what what what are what are some big things that you’ve learned through your career and some of the things that you’ve seen, and we just, I just love to get a little more insight into some of the some of the things that you’ve seen and how you overcame some of these different challenges.
Darvin Schmidt 39:30
Um, that’s a very broad question. I mean, it’s,
Aaron Spatz 39:34
it is a, I mean, or we can even pivot into like, the the FDIC, because I saw that you’re a senior program manager there and so that again, that’s something that you don’t meet someone every day who who worked, you know, Federal Deposit Insurance Corporation like that’s, that’s not something you run into all the time. So like, what, what like, what was that experience like for you?
Darvin Schmidt 39:56
Well, yeah, actually. It’s just It starts with the difference between the private sector and the public sector. I mean, I, I, you know, my, my official title was a team lead at the FDIC. That’s because the government uses a completely different, you know, title system. And so, and trying to translate that in the private sector, I get a lot of, you know, it’s very hard to do that. But, but But essentially, yeah, I was helping the FDIC navigate the the banking crisis post 2008. And
Aaron Spatz 40:34
I’m really challenging, right? Yeah.
Darvin Schmidt 40:37
I mean, you know, I think one of the threads, the Unifying Threads in my career has been, people have come to me, or I gravitate toward people who have problems, and they don’t know where to go to solve them. And I just step up and say, Yeah, I think I can do it. Here’s my approach, you know, let’s try it, you know, and, and so I’m not afraid to, you know, get into some areas, I spend the time to get into areas just, you know, to learn how to navigate it in and solve the problem I and so if it’s a new subject, I spend the time to learn the subject, you know, I mean, it takes a little longer, but you got to do that. And so I, you know, I went to, went to work for the FDIC. And, you know, at the time, they, they, you know, they were closing 150 banks a year. And these were big sized banks. So, you know, it’s what do you do with it with those banks? And, and, um, so that’s why I brought in some technical skills and my finance skills, and I basically worked in what’s called post closing post closing once you close a bank. Okay. What do you do with it? Well, you, you know, you pay off the depositors. That’s what FDIC insurance is, but then all the loans, all the assets of the bank, now become owned by the FDIC, actually, by receiverships and control by the FDIC. But in simple terms, the FDIC and so they don’t want to run banks, they don’t want to own assets, they just want to regulate the industry. So you know, now you got to build this infrastructure to dispose of all these loans that they inherited from failed banks? Well, no, and those loans are being serviced. So people, borrowers are paying money, it’s a mortgage on the residential side, or a commercial loan, a business is paying off their debt, you know, their principal, and plus interest. And so somebody’s got to collect the money for you. And so, you know, that this was just a large scale, you know, problem, how do you integrate all these pieces, and keep, you know, keep these loans you know, getting them in the hands of somebody other than the FDIC. And so that’s, you know, that’s, that’s what what we did when I did was, I worked with a number of other folks inside the FDIC that managed all these functions is that we had loan servicing and loan servicing vendors. And that’s just trying to figure out how to sell loads and loads of of loans bundling and, and so that’s what, you know, my investment banking kind of picked up, but, you know, a lot of it was just implementing processes and leveraging software to manage, you know, you know, from reporting and dashboarding it’s like, how many loans do we have? And how many of these loans that we have? And how can we bundle them with other loans that we have? And so, yeah, and so it was a very interesting time. You know, it’s just another situation where I was doing some restructuring work and turnaround work and, and capitalization planning and financial advisory planning for portfolio companies have investors that I knew institutional investors I knew around town and, and, you know, the FDIC just had needed a lot of a lot of talent, a lot of areas because, you know, we were shutting down our central banking system or our banking system, our central banking system, but our bank commercial banking system, and that would have had, you know, it did have an impact on their central banking system, having to do QE, you know, quantitative easing and that sort of thing. So, yeah, I I am very proud of that work. I mean, it. One is, the FDIC is a quasi government agency. It’s it, you know, you it’s an insurance company, it lives off insurance premiums, but it’s also overseen by Congress. And the labor follows, you know, government, the Office of Personnel Management, so, in essence, they are a government agency, not a private entity. Insurance Company. And so it is public service. And I, you know, I’m, I’m proud of it I you know, it’s very interesting work, particularly in a banking crisis. And, you know, people should not discount the opportunity to do public service like that. Um, um, and there are a lot of interesting problems to solve in government agencies, just like in private sector companies.
Aaron Spatz 45:29
Sure. Well, I mean, you had a, you had a front row seat, once again to it to a whole nother whole nother series of problems, right. So I think that’s been, for me just kind of looking at you looking at your career, like you’ve had some really amazing opportunities and experiences to really be a first hand participant in a lot of different things that are that have that have happened. So whether it’s the.com, bubble bursting, and then the the E commerce wild, wild west gold rush that, that, that that turned into, and then working at the FDIC, on the you know, on the tail end of a huge financial crisis, when as relates to the banking industry, I mean, you’ve you’ve gotten to see a lot of different things. And so it’s, it’s definitely, one, it’s pushed you it’s, it’s helped grow you into different areas, and I think it’s really stretched you. And that’s, and that’s what’s made us so incredibly valuable in the in the types of work that you do, and the impact that you have, because you’ve seen, you’ve seen the gamut of all sorts of different things. And so, tell me about then your transition from FDIC and then into your present role. What is what was that journey like for you there?
Darvin Schmidt 46:35
Well, you know, this is where the story gets. Not so positive. But um, yeah, the So, constructive Transformations is really a, it’s a DBA. That was, at one time registered in Nebraska, I have I after the FDIC, um, I left the FDIC did not renew contracts, and because, um, I have some elder care issues back in western Nebraska. Okay, so I went back to western Nebraska, sort of mid to late 2016. I’m the dressing some issues with my father, but I was able to basically get consulting clients either from from Dallas here or locally there. Um, and Buck was able to work on there, I could I work I work remote. So I was sort of getting into work remote before the pandemic hit, but I needed some flexibility. You know, because I was, I have some home health care duties from my father who was ill. And, and so, I did that for a little while, my father passed in, I moved back to Dallas, and I don’t know or late, late 20s, mid to late 2018. And then my mother had had some eldercare issues. So I wound up going back to Nebraska, and getting our house sold moving her into nursing facilities. Um, because she was very quickly was not able to take care of herself. So I I’ve been sort of, you know, doing, self employed and doing consulting for, for people in my network, because I needed that flexibility. But also because, you know, I’m basically a problem solver anyway, whether I’m a W two or 1099. So, uh, you know, it’s, it’s, the pandemic has made it a bad year. But, you know, for me, it’s, I just, you know, I’m out there trying to network with folks and, and I have an extensive network. And, you know, there are plenty of problems to solve, right? So, it’s been an interesting past couple of years with COVID. But, um, you know, I’ve been even maybe thinking of starting a business in the eldercare space myself, counseling guiding, right now, there’s not much in terms of a social media platform based company, but there’s a lot of education people need and, you know, it’s, it’s one of those topics where if your parents are getting old, you don’t want to wait till the last minute to get prepared. Um, and also for yourself, you don’t want to leave your children in a position where, you know, they’re ill prepared to handle when you can’t handle it yourself. Yeah, so I’ve been looking at some some some opportunities there. But yeah, I mean, I, I’m, I’m, you know, basically intellectually curious. Um, you know, like, if somebody mentioned something, I don’t know about it. I will spend time studying it. Um, I, you know, to the point where I feel comfortable, I understand it, and, you know, there’s something valuable out of it that I can apply my everyday life. That’s what I do. So, I guess that, you know, I’m a product of intellectual curiosity, because I’ve gone, you know, a number of different directions. Yeah, worked in a number of different environments. And, um, you know, but I’m proud that I’m able to solve people’s problems. And I don’t think there are many people who have anything negative to say about my work. So, one very proud proud of the most is, you know, my integrity, my reputation. So, sure.
Aaron Spatz 50:41
I mean, yeah, well, I appreciate you sharing all that. And, you know, and, you know, obviously a little bit sending a sensitive subject there with with families. I mean, it is, yeah, yeah. But I just I’m sorry, that you went through the things that you had to go through, and but like, it’s really, really interesting observation that you’re making, because I think it’s something that we’re, we’re all going to be facing, and people are either in that journey now, or they’re going to be soon. And so if we have an aging population, how do we, how do we handle that? How do we handle it so that everyone is treated well, and the quality of care is high? And what are you going to learn as the person receiving that care? What do you need to learn as the person may be helping facilitate that whole thing happening? There’s, there’s a lot there. And I’ve had a few close friends of mine that have had to go through had that had to go through that. And there’s, there’s a bit of a learning curve, but there’s, there’s a lot of different things going on. So I would be curious, like, I’m gonna, I’m gonna keep tabs on you, man. See, see what See What I See what IDEA SEE WHAT idea you start noodling with? Because I think it’s, I certainly think there is an opportunity there. But, you know, I just want to thank you, Darren, like, I really appreciate spending spend so much time with you, but like, what’s the what’s the best way people can can reach out and get get in touch with you learn more about the the work? You’re doing? Yeah, I mean, I
Darvin Schmidt 52:03
have a LinkedIn profile, I don’t have my own website, because a lot of the, you know, a lot of what I do is just by referral, or through my network. I also, you know, I also learned very early on because of my ecommerce days, I am not a fan of a lot of social media. Um, I was an early adopter and Facebook never use it. Don’t like it, I eliminated it off of my mobile phone. Never have tweeted, I think I follow two people. I there’s something to be said about keeping information private. And, and, you know, so I try and minimize my, my footprint online, but LinkedIn, good place, I mean, I disclose my email address and my phone number, you can reach me at any time. And, you know, I’m, you have a problem that needs solving. If I can’t solve it, I usually know somebody who can. So
Aaron Spatz 53:03
that’s terrific. Well, hold on. I, again, I just really just want to thank you. I mean, it was really fascinating discussion, I really enjoyed kind of doing a deep dive on your, on your story and on some of the different things that you’ve seen, it really is really, really a lot of fun. Thank you so much.
Darvin Schmidt 53:19
Thank you. I mean, this is a great video resume, to be honest with you. I mean, I you know, I this is a you know, this is a great marketing tool. And podcasting seems to be growing. Um, and, and I think you’ve hit on something here. Um, you know, not just the helping people like me the other end but for yourself, you know. It’s great opportunity. It’s the right way of leveraging the internet to get the right kind of information out there to be honest with you,
Aaron Spatz 53:53
for sure, for sure. Well, I greatly appreciate them. And thanks. All right. Thank you. Thanks for listening to America’s entrepreneur. If you enjoyed the show, please leave a review or comment on your preferred social media platform. share it out with friends, family, coworkers, others in your network. And of course, you can write me directly at Erin at Bold media.us That’s a Ron at Bold media.us Till next time