Justin Fortier, a seasoned tech entrepreneur, delves into the highs and lows of leading multiple startups. Fortier, CEO and CTO of FYC Labs, shares his journey from starting with minimal resources to leading successful tech ventures. His candid recount of entrepreneurial challenges highlights the importance of resilience and strategic planning in leadership.

Justin emphasizes the critical aspect of ensuring timely payments to vendors, which has fortified his businesses’ reputations and secured loyalty among partners. His narrative is not just about leadership but also about creating a supportive ecosystem that nurtures innovation and growth.

Fortier’s approach to leadership is deeply intertwined with his personal experiences and the lessons learned from the sports he loves, showcasing how personal passions can influence professional leadership styles. His story is a compelling reminder of the power of dedication, strategic thinking, and the importance of treating people right in building lasting legacies in business.

Want to learn more about Justin's work? Check out their website at https://fyclabs.com/.

Connect with Justin on LinkedIn at https://www.linkedin.com/in/justinffortier/.

Key Points with Time Stamps

• 00:01:09 - Introduction of Justin Fortier, his role, and achievements.
• 00:04:18 - Justin shares his humble beginnings and the tough early days of entrepreneurship.
• 00:06:15 - Discussion on the importance of paying vendors on time to foster loyalty and trust.
• 00:09:40 - Impact of Craig’s prompt payment policy on contractor loyalty during his health crisis.
• 00:14:33 - Justin’s experience in the manufacturing sector and the challenges faced with payment terms.
• 00:19:26 - Explanation of the "Fractal" business model and its advantages in the tech industry.
• 00:25:44 - Discussion on how the fractal model helps retain talent and prevent employee burnout.
• 00:30:07 - Justin advises on the challenges of entrepreneurship and the importance of resilience and systems.

Transcript

00;00;00;00 - 00;00;30;20
Craig Andrews
I was in a coma for six weeks while the doctors told my wife I was going to die. When I woke up, she told me the most fantastic story. My team kept running the business without me. Freelancers reached out to my team and said, we will do whatever it takes. As long as Craig's in the hospital. I consider that the greatest accomplishment of my career.

00;00;30;23 - 00;00;51;10
Craig Andrews
My name is Craig Andrews and this is the Leaders and Legacies podcast where we talk to leaders creating an impact beyond themselves. At the end of today's interview, I'll tell you how you can be the next leader featured on the show.

00;00;51;10 - 00;01;09;06
Craig Andrews
Today I want to welcome Justin Fortier. He is a tech entrepreneur and founder of multiple successful companies in California. As CEO and CTO of FYC Labs, he successfully led the company to its acquisition in 2020.

00;01;09;06 - 00;01;25;11
Craig Andrews
He's been named as finalist for CEO of the year twice, not just once, but twice by the San Diego Business Journal, and was recognized as one of the top 50 most influential business leaders in San Diego by San Diego Daily.

00;01;25;14 - 00;01;29;13
Craig Andrews
Transcript. And so this is going to be an interesting conversation.

00;01;29;13 - 00;01;39;22
Craig Andrews
we're going to talk about a really interesting concept on how to reduce cost, how to share expenses.

00;01;39;22 - 00;01;48;23
Craig Andrews
one that I've never heard of before. I've never heard of this before. And so if you think you've heard of this, stand by. I think you're going to be surprised.

00;01;48;23 - 00;01;51;01
Craig Andrews
So, Justin, welcome.

00;01;51;03 - 00;01;52;27
Justin Fortier
Hey, thanks for having Greg.

00;01;53;00 - 00;01;55;03
Craig Andrews
Yeah. So,

00;01;55;03 - 00;01;58;19
Craig Andrews
first off, you're a big hockey fan.

00;01;58;21 - 00;02;05;01
Justin Fortier
unfortunately, I'm a sharks fan, so it hasn't been a fun couple seasons, but still a big fan of hockey. You just got done playing last night at,

00;02;05;01 - 00;02;09;29
Justin Fortier
my local beer league Monday night playoffs last night, and it was a good time.

00;02;10;01 - 00;02;12;04
Craig Andrews
how did you get into hockey?

00;02;12;06 - 00;02;14;28
Justin Fortier
I know it's funny. I grew up in California, right? So,

00;02;14;28 - 00;02;20;01
Justin Fortier
I had my brother in law was from Edmonton, so he taught me when I was in early high school.

00;02;20;01 - 00;02;28;08
Justin Fortier
my sister was a bit older than me, so my brother in law came in and taught me roller hockey. You believe that? Remember that from the late 90s, early 2000 and learned to roller hockey.

00;02;28;08 - 00;02;30;20
Justin Fortier
You played that in Northern California for a bit.

00;02;30;20 - 00;02;41;12
Justin Fortier
played a little bit of ice hockey. I grew up in Lake Tahoe, South Lake Tahoe, California. So up in the mountains, some ice, not not Midwest ice. If anybody's listening, that's not the same. Yeah, I can't even compare. So,

00;02;41;12 - 00;02;43;06
Justin Fortier
Yeah, just got into it. Super fun.

00;02;43;06 - 00;02;47;26
Justin Fortier
physical sport, great exercise, good mental exercise.

00;02;47;29 - 00;02;49;28
Justin Fortier
toughness for sure. It's,

00;02;49;28 - 00;02;51;22
Justin Fortier
it's it's a good one.

00;02;51;24 - 00;02;52;11
Craig Andrews
Yeah. They've,

00;02;52;11 - 00;02;59;00
Craig Andrews
they've got real safety conscious. I mean, people used to, you know, the old days, no helmets. You know, you,

00;02;59;00 - 00;03;01;06
Craig Andrews
people are missing half their teeth.

00;03;01;08 - 00;03;03;09
Justin Fortier
Yeah, I've got got a little bit of,

00;03;03;09 - 00;03;05;19
Justin Fortier
one that popped out and was able to put it back in,

00;03;05;19 - 00;03;07;20
Justin Fortier
late night and about midnight, with thanks to,

00;03;07;20 - 00;03;09;28
Justin Fortier
the dentist happened to be at a party. You got me out.

00;03;09;28 - 00;03;10;24
Justin Fortier
and,

00;03;10;24 - 00;03;15;19
Justin Fortier
put a hole in this to the broken my nose. Actually, my nose is currently kind of broken right now.

00;03;15;19 - 00;03;24;29
Justin Fortier
I got to get that taken care of soon, but, yeah, it's it's a pretty brutal sport. I'm trying to. Trying to stay handsome. I'm doing the best I can.

00;03;25;02 - 00;03;26;03
Craig Andrews
So what's,

00;03;26;03 - 00;03;37;10
Craig Andrews
What's funny is you, for those are listening. I always tell people, you know, you're more interesting than you think you are. And so I have to say, I've never had a guest on,

00;03;37;10 - 00;03;39;19
Craig Andrews
everybody's like, no, no, I live a boring life,

00;03;39;19 - 00;03;44;16
Craig Andrews
which involves having teeth knocked out and, nose broken, all for fun.

00;03;44;18 - 00;03;46;25
Justin Fortier
So, yeah, it's for fun.

00;03;46;27 - 00;03;50;28
Craig Andrews
Yeah, it's a fun. So, anyway, I use,

00;03;50;28 - 00;03;55;25
Craig Andrews
you've obviously done very, very well in business.

00;03;55;25 - 00;04;01;21
Craig Andrews
and has it always been that way? No.

00;04;01;23 - 00;04;18;02
Justin Fortier
so this is where I get asked a lot, you know? Hey, should I become an entrepreneur? And my answer is almost always a no. It is not easy. It's hard unless you happen to walk into a bunch of money and can weather a storm for a couple of years. I started with very little,

00;04;18;02 - 00;04;25;29
Justin Fortier
I was running a bar in downtown San Diego in 2012 and decided to start my own business with about 1500 bucks in my pocket.

00;04;26;04 - 00;04;37;04
Justin Fortier
So I knew at that point in my life I wasn't going to, you know, I wasn't going to run bars. I wasn't going to go work for anybody else. I knew my mind didn't work that way. I knew I had to go do something on my own. I ran into an awesome,

00;04;37;04 - 00;04;40;27
Justin Fortier
graphic designer who was doing amazing work.

00;04;40;27 - 00;04;54;16
Justin Fortier
He was up in San Francisco working for nine. If the early days of memes, you know, he was one of the first people generating those. He comes back, he comes to the bar that I'm working on, says, hey, can I get a busboy job? Says, God, no way you're being a busboy, dude. Like you're way too good.

00;04;54;18 - 00;05;20;15
Justin Fortier
Let's go. Let's go start something together. So we started the business with 1500 bucks a piece. That was a horrible mistake. We struggled so bad in the early days. we. So it was not easy. It was. It was really tough. We couldn't find clients. Early days. We struggled to get paid on time. That was always and still is a major issue that I have a major passion for is getting vendors paid on time.

00;05;20;18 - 00;05;33;17
Justin Fortier
and we, I mean, I lived off of lentils and potatoes, I can tell you I was living off about 55. Now that's $0.75 a day at one point, trying to keep things going, I figured out that you get lentil soup and potatoes for about,

00;05;33;17 - 00;05;42;16
Justin Fortier
I think I did the math. It was the highest calorie per cent you could get was that of lentils, lentil soup and potatoes.

00;05;42;18 - 00;05;43;06
Justin Fortier
it was rough.

00;05;43;06 - 00;05;59;24
Justin Fortier
and it was, but it was all worth it because there was no. I had so much. And maybe this is the sado masochism that I have from playing hockey, too, right? Maybe I'm just a masochist in this way that I just like the pain. But I know that all of it was from my own strength, you know, from my own fortitude to get there.

00;05;59;24 - 00;06;08;15
Justin Fortier
I didn't have any handouts, and now there's very little that I feel I can accomplish because of God having gone through the hardest time. So those tough times make you way stronger,

00;06;08;15 - 00;06;15;07
Justin Fortier
way more resilient. And, yeah, it's it's I wouldn't do it any different. Any way different.

00;06;15;09 - 00;06;20;15
Craig Andrews
So one of the things you said that you're passionate about paying vendors and one time, we mean.

00;06;20;18 - 00;06;36;16
Justin Fortier
So we've we've run into this in our business. So we're a software development agency. Early days we were web development creative agency. So we would provide deliverables to let's say there was an event going on and you needed a flier. Okay. We'd quickly get the flier done. We know that you need to help promote your event. Hey, pass.

00;06;36;23 - 00;06;49;06
Justin Fortier
Pay us as soon as we send this to you. Okay? So I'll send it to send it to me and I'll pay you guys. And then I hear nothing from you for a week. Two weeks. Oh, sorry. Oh, I'll catch you guys next week. I might. My my bookkeeper was busy. I'm just sitting there with nothing on my hands.

00;06;49;06 - 00;07;10;18
Justin Fortier
I've done the work already. I'm already giving you the deliverable, and I'm just waiting forever to get paid. Eventually we get paid. But during those eight, nine weeks that, you know, you you was the not you wouldn't have done this to me. You'd be a better guy than that. But this lack of paying your people on time, especially contractors, there's just this comfort in,

00;07;10;18 - 00;07;18;25
Justin Fortier
the B2B world of not paying your contractors on time as just something that you do, that it's not that big a deal, that you don't take care of them.

00;07;18;28 - 00;07;35;21
Justin Fortier
there's maybe some entitlement out there as to to customers who don't feel like they needed to, especially if they lie to them. I find out they didn't have the money or they mismanaged their money. And it's not even necessarily something wrong with the work. But if they find one small menu issue with the work, they'll refuse to pay for several weeks.

00;07;35;23 - 00;07;59;23
Justin Fortier
And these vendors who are trying to start their businesses are trying to hire employees. They're trying to grow and create jobs and create culture. Are eating lentils and potatoes at home while they're, you know, feeding families of their employees because they're waiting to get paid. And that has been such a hard part of our business and has limited the growth of our business, because my only other options are to go out and find funding.

00;07;59;23 - 00;08;02;07
Justin Fortier
So now I'm finding funding back, you know, losing

00;08;02;07 - 00;08;15;25
Justin Fortier
margin because I'm going back into interest or I'm going into the fees and penalties. So for me, that's if I can get our vendors paid on time, I think you'll see an uptick in such so many different industries, success, innovation,

00;08;15;25 - 00;08;20;14
Justin Fortier
household incomes. It really is a major problem.

00;08;20;17 - 00;08;41;24
Craig Andrews
You know, over a decade ago, I, I made the decision. So at the time and this was actually coming out of the Great Recession and labor was abundant. Everybody was looking for work and hit me. I was like, you know, the day is going to come when labor is not abundant. And when that day comes, I want my 1090 nines.

00;08;41;24 - 00;09;05;26
Craig Andrews
I want to be the I want to be the email. They open the phone call that they take, the project that they work on. And I was like, I'm going to set a goal that when they invoice me, I'm going to pay as soon as possible. And it's almost a game where, like I see the invoice pop up, I stop what I'm doing and I pay the invoice while they're still sitting at their computer.

00;09;05;28 - 00;09;12;26
Craig Andrews
And and the impact for me is, you know, in August 20th at some,

00;09;12;26 - 00;09;40;24
Craig Andrews
August 22nd, 2023 or 2021, rather August 22nd, 2021, I was unexpectedly went into a six week coma and they started telling the, the doctor started telling my wife, I want to make it. And my 1099 my contractors started reaching out to my team and said, anything you need, as long as Craig's in the hospital, we will do right.

00;09;40;24 - 00;09;58;08
Justin Fortier
That loyalty is because it's unfortunate. I mean, it's awesome that you did that, and there's a lot of respect for you for doing that and that that you earn that loyalty. But the reality is that there are so few who actually do that, that that's how loyal your employees. Don't say that to you. Have you had W-2 employees?

00;09;58;10 - 00;10;20;26
Justin Fortier
I mean, I'm sure they would have for the sake of that. You're a good guy, right? They're different, different reasons. But that fact that the that there's this assumption that it's okay to pay your 1090 nine's late, but your W-2 employees are on time. These 1090 nines are so appreciative of that of that payment on time that they become, you know, someone who wants to support you in your in your hardest time.

00;10;20;26 - 00;10;23;12
Justin Fortier
So yeah, I'm glad you got not bad experience. A common

00;10;23;12 - 00;10;23;18
Justin Fortier
but.

00;10;23;19 - 00;10;25;06
Craig Andrews
Yeah.

00;10;25;08 - 00;10;32;04
Justin Fortier
But I'm glad that you had the loyalty and the love around you from from those ten nine contractors. It's them. Kudos to you.

00;10;32;07 - 00;10;51;08
Craig Andrews
Well, and it's you know, some people pay late just because they don't have the money. You know, they have some cash flow problems that they need to fix. Some people pay late just because somewhere they, you know, somebody told them you should, you know, you should get that 30, net 45 net 60 and pay the last day that you possibly can.

00;10;51;10 - 00;11;01;25
Craig Andrews
And I just look at that. I'm like, that is phenomenally stupid. How much money are you making off holding? You know, holding on to that money and,

00;11;01;25 - 00;11;18;20
Craig Andrews
and the thing that worries me the most is, you know, if you look at your supply chain, this is kind of how I look at my 1099 or my supply chain when I do that, I'm, I'm endangering my own supply chain as opposed to fortifying my own supply chain.

00;11;18;22 - 00;11;34;08
Justin Fortier
Yeah, exactly. I when I ran, I was telling you, I worked at the bars in downtown San Diego, and I used to do events. We had deejays, bands, everybody. Right. And there's always a promoter who did the show. I was the only place in town that paid you that night, because I think I think paying people on time does come down to three factors.

00;11;34;08 - 00;11;52;06
Justin Fortier
One, you might just be someone who, like you described, just plays the game and doesn't, you know, is comfortable stretching that vendor out and says, okay, well, go find another, go find another client. Then if you don't like to work on my terms, there are people who do that. I there are there. The other is the people who don't have the money.

00;11;52;12 - 00;12;07;16
Justin Fortier
They just don't have the funds. And they're they're doing their best to come up with the funds, and they're trying to get there. And those are the these people usually come from, which is the third one, which is they don't have good systems, they're not good processes that get those funds. And that means to keep the workflow going.

00;12;07;23 - 00;12;26;08
Justin Fortier
So for me, all these folks, when I worked in the nightlife industry, they would go out and they'd do these gigs at these other bars, restaurants. And they were they're a little bit sloppy as some nightlife might be, and they're like, yeah, I will take care of it tomorrow. And then they get in tomorrow. And they couldn't quite figure out what the numbers were, and they're trying to divvy stuff out and oh, we'll get it on Wednesday.

00;12;26;08 - 00;12;41;03
Justin Fortier
And then that that ball just keeps rolling rolling, rolling. And then somebody goes on vacation next. You know it's been about a week and a half two weeks, three weeks four weeks. Finally this person is paid. Our systems were so tight that I knew the numbers. The night of I closed everything out and I handed them a bunch of cash.

00;12;41;06 - 00;12;54;10
Justin Fortier
And guess what? A lot of times I could do it and then guess where they came back the next night? And they spent all their money back at our bar and had a good time with us again, because we were all friends at that point, because there was no there, no tension. There was this I know what I'm going to get paid.

00;12;54;13 - 00;13;10;05
Justin Fortier
We're working together. I'm going to get paid that night, which is unheard of, by the way, like nobody else got that. So when I started my business, I had a lot of loyalty. Again, same, same thing was a lot of people came to work for me. And I eat lentils and potatoes and got them paid so that they stayed loyal to me.

00;13;10;05 - 00;13;26;00
Justin Fortier
And I had the best contractors in town, and we did the best work. And that's how our reputation was able to grow and build the business. With only $1,500 in my pocket when we started the business. So it it is an investment in the long term with your people. But

00;13;26;00 - 00;13;30;00
Justin Fortier
some folks, they'll just play the game and they'll just say, look, I'll just churn you out.

00;13;30;03 - 00;13;34;06
Justin Fortier
They don't they don't respect the the talent sometimes. Yeah. So.

00;13;34;08 - 00;13;35;10
Craig Andrews
So how did you get out the,

00;13;35;10 - 00;13;38;22
Craig Andrews
how did you get out? Lentils and potatoes mode.

00;13;38;24 - 00;13;41;22
Justin Fortier
So we landed a big contract with a company called Remax.

00;13;41;22 - 00;13;45;17
Justin Fortier
and that helped a lot. So we are probably in over our heads. When we took that gig,

00;13;45;17 - 00;13;50;04
Justin Fortier
it catapulted us out from just being a web development company to a software development company.

00;13;50;04 - 00;13;59;01
Justin Fortier
it was amazing. It was a lot of work, but it basically just brought us up that next echelon that allows us to have to go hire some more employees to spend a little bit more time doing business development.

00;13;59;01 - 00;14;07;11
Justin Fortier
It wasn't by any means glamorous the next year, but it helped out. It helped us a lot. We had a, recurring retainer,

00;14;07;11 - 00;14;10;23
Justin Fortier
and we were able to kind of build off of that year over year.

00;14;10;23 - 00;14;18;00
Justin Fortier
at that time, ironically, I actually got another opportunity to go start another business and a SaaS business in the manufacturing space.

00;14;18;02 - 00;14;27;04
Justin Fortier
So kind of was able to land Remax, set the company on sort of a stable ground and had employees running the company. Meanwhile, I went over and started a SAS business in

00;14;27;04 - 00;14;33;01
Justin Fortier
manufacturing, which again kind of reset me back to almost having to go back to lentils to potatoes again, starting from scratch there.

00;14;33;01 - 00;14;34;26
Justin Fortier
and talk about an interesting industry there.

00;14;34;26 - 00;14;52;10
Justin Fortier
You get pushed around a lot as a vendor when it comes to the manufacturing space. There's supply chain management like you talked about. They're pushing 60 sometimes 90 day terms on you quarterly payments. And you're just you're just you know, you're like a squirrel just holding the way for the for the winter, just trying to make it through each paycheck.

00;14;52;10 - 00;14;59;03
Justin Fortier
So there was a lot of borrowing at that point. But we had earned credit over time so that that was helpful.

00;14;59;06 - 00;15;07;17
Craig Andrews
Yeah. And again, it's just such a shame I, you know, I don't know if people realize what they're doing to their supply chain, you know, and

00;15;07;17 - 00;15;14;04
Craig Andrews
there's a there's a story I like to tell, this goes back to the late 90s.

00;15;14;04 - 00;15;18;01
Craig Andrews
at the time, Nokia was was not the number one mobile phone maker in the world.

00;15;18;07 - 00;15;21;24
Craig Andrews
Obviously there aren't anymore, but they,

00;15;21;24 - 00;15;25;20
Craig Andrews
they had true partnerships with their suppliers. And,

00;15;25;20 - 00;15;26;22
Craig Andrews
Philips had a,

00;15;26;22 - 00;15;34;13
Craig Andrews
fab in New Mexico that burned down. Nokia got a phone call the same day the fab burned down, said, hey, Nokia, we have,

00;15;34;13 - 00;15;38;26
Craig Andrews
we won't let you into the fab burned down. Nokia said, thanks for the call. We're flying out.

00;15;38;26 - 00;15;59;13
Craig Andrews
We want you to assemble a team. Here's what we're looking for. And within two weeks, Nokia had gobbled up all the remaining capacity and Philips had. They had contingency plans for everything. But it was because of the relationship that Nokia had had with their suppliers. At the same time, Ericsson, who also used to make mobile phones, had chips in that same fab.

00;15;59;19 - 00;16;01;09
Craig Andrews
They never got a phone call.

00;16;01;09 - 00;16;12;03
Craig Andrews
they, they found out when, when orders started not showing up on their doorstep and they called up Philips said, hey, what happened? Where our parts are like, yeah, we've been meaning to call your,

00;16;12;03 - 00;16;20;24
Craig Andrews
our fab burned down. Sorry. You're screwed. And so that's that's the thing. And that was that was essential.

00;16;20;24 - 00;16;31;02
Craig Andrews
That was absolutely essential in catapulting Nokia to the number one mobile phone maker, which they held that position for many years until they fell asleep at the wheel with the iPhone.

00;16;31;04 - 00;16;50;19
Justin Fortier
I mean, the one thing you did note say though, was the relationship, right? And the relationship isn't that we're buddies and we go have drinks together on the weekend. No, the relationship is that I trust you, and trust starts with getting paid on time and making sure that you honor the letter of your contract. And I'm not going to have to go and fight for tooth and nail for you to follow through on what you said you were going to do.

00;16;50;21 - 00;17;08;21
Justin Fortier
So as much as a lot of people put into, oh, I have great relationships, I've got contacts at these little at these places. It's like, yeah, but just because you have that relationship doesn't mean you have that trust in that integrity that came along with them. So it's not just about knowing people in these places. It's about the integrity and and the reputation you have.

00;17;08;24 - 00;17;17;21
Justin Fortier
And when you go into these suppliers and the supply chain and inversely up for for my customers, I have to have to make sure I pay my people on time. We just did a really big gig for,

00;17;17;21 - 00;17;22;26
Justin Fortier
Live Nation and one of the big things that they said was make sure you pick because we subcontract work for them.

00;17;22;26 - 00;17;36;07
Justin Fortier
Right? So we had over 120 different subcontractors through us as the agency and 120. We have a media agency to which probably talked about fractal in a moment, because I'll explain why there's a media agency and a dev shop and a manufacturing site. But,

00;17;36;07 - 00;17;36;22
Justin Fortier
there's this,

00;17;36;22 - 00;17;39;17
Justin Fortier
we do this big gig for them, and they were like, pay your people on time.

00;17;39;17 - 00;17;58;11
Justin Fortier
We're like, okay, okay. Got it. Like we. That's what we do. Like you promise? Yeah, we promise. Because apparently there's there's myth and it might be these middle contractors who are basically subbing out and they're sitting there playing the arbitrage back and forth, trying to pay this person later and keep a little bit more. But no, we're like, this is a standard policy of ours.

00;17;58;11 - 00;18;09;19
Justin Fortier
People get paid as soon as we get paid like this is this is happening. This is not that's not negotiable with us. And that's why they really loved working with us, because they knew that they knew the end, the tail of the supply chain would get taken care of

00;18;09;19 - 00;18;10;26
Justin Fortier
with us in the middle.

00;18;10;28 - 00;18;26;08
Craig Andrews
Yeah, well, that's so good to have a a customer. I mean, that's a real I don't know if I've ever heard a customer come to me or anybody I know saying, hey, we're worried about how you're paying your suppliers.

00;18;26;10 - 00;18;35;25
Justin Fortier
Yeah. Livni is insomniac, who's a who's a subsidiary of Live Nation. Great people really care about the creative outcomes because we were doing a big media production for them for,

00;18;35;25 - 00;18;57;04
Justin Fortier
big festival in Las Vegas called EDC. And they care a lot about the creatives at the at the tail end of all this, the people who are actually cutting up the film flying the drones, getting the crazy shot of the of the light shows and things going on, they care a lot about how those people come out, and they want to make sure that they think of Insomniac and see as a positive

00;18;57;04 - 00;18;57;23
Justin Fortier
experience.

00;18;57;23 - 00;19;15;21
Justin Fortier
So they put their heart into that, to the work. So they want to come back and do those gigs over and over. To your point again, like they want that loyalty and they need to make sure that they have an agency in the middle that also honors that loyalty. So we we kind of made it. Part of our ethos is that we pay our people on time so that, you know, they're being taken care of.

00;19;15;23 - 00;19;26;25
Craig Andrews
it's awesome to so help us. So we haven't really talked about what you do other than software development. So first off, what do you do? And then what's this whole fractal thing.

00;19;26;27 - 00;19;33;02
Justin Fortier
So I mentioned the what do I do? I'll quickly answer that I do a lot of things.

00;19;33;02 - 00;19;46;06
Justin Fortier
I come from the mindset of a general manager at a restaurant. Right. I can I can wait tables, I can make drinks, I can clean the toilets if I have to. Right. So that's the mindset that I have. We talked about hockey, I play defense, I play offense, I play wing.

00;19;46;08 - 00;20;01;27
Justin Fortier
It's sometimes play goalie that that might be where I draw the line. But the point is my mind is I want to be able to be able to do all the things in my business, at least in a cursory level. So that way I can have an intelligent conversation with anybody who's doing any position in the business. So that's what I do.

00;20;01;28 - 00;20;07;21
Justin Fortier
For the most part, I'm a CTO, CEO, I write, it's I used to write a lot more code. I write less code. Now I kind of,

00;20;07;21 - 00;20;11;14
Justin Fortier
manage our developers and our, our technical talent and then also do,

00;20;11;14 - 00;20;17;14
Justin Fortier
business development and all the things that come on the CEO and do sort of the executive decision making. But where this model comes from.

00;20;17;14 - 00;20;29;01
Justin Fortier
So back roll back to 2008. You talked about the Great Recession. I graduated from grad school in 2008, and it was probably a horrible time to come out with a higher level degree. I was there was not a lot of people demanding high level degrees,

00;20;29;01 - 00;20;33;27
Justin Fortier
or secondary degrees. Right. So I go and I just I literally worked from the ground up at this bar.

00;20;33;27 - 00;20;40;14
Justin Fortier
I put the floors in, buddy. Mine is opening up this bar in downtown San Diego. It's a crappy little dive bar that he's renovating and,

00;20;40;14 - 00;20;48;17
Justin Fortier
cleaning up. He wants to turn into this, like, bougie little cocktail bar. So I help him install the floors. And I'm watching these guys. These are guys from Spokane, Washington.

00;20;48;17 - 00;20;54;28
Justin Fortier
they had been working the nightlife in San Diego for years, and I'm watching them just navigate that community and that industry.

00;20;54;28 - 00;21;18;06
Justin Fortier
They're just building clout. They're just building reputation, building reputation because they have this idea of starting a restaurant group. But their idea of doing it isn't to have a parent company manage this big restaurant group, it's to spin up a decentralized group of smaller LLC, of just the individual LLCs who all kind of have this agreement to collaborate and share talent and help push,

00;21;18;06 - 00;21;19;05
Justin Fortier
cost pressure, right?

00;21;19;05 - 00;21;34;21
Justin Fortier
So if they need to buy lines, they're going to go and say, hey, we're going to buy lines from you, but not just from one of our locations but from many. So we get this small bar up and running, we spin up a couple more, we collaborate and find those partners who want to open up more and more restaurant bars.

00;21;34;21 - 00;22;05;10
Justin Fortier
Really unbelievable group. They're called Consortium Holdings down in San Diego. They have the prettiest, most beautiful restaurants, the greatest waitstaff you've ever worked with. They're also like the coolest people. So you feel kind of like a dork whenever you know them. And they're like, you know, San Diego. Cool. But they build this group. And what I'm watching happen is someone can start as a busboy in one of their restaurant group, one of the restaurant groups work their way up to be a waiter, then have three different jobs, all within their group.

00;22;05;10 - 00;22;24;07
Justin Fortier
Right? Maybe they work at one restaurant downtown, one out in North Park, all the different neighborhoods, and they retain that talent in the family, because what happens a lot in nightlife is you'll work at five different jobs because you're only getting two nights at one place, one night at another, and you're trying to make ends meet. So you're kind of mixing and matching between different businesses and they retain that talent.

00;22;24;07 - 00;22;41;27
Justin Fortier
Now, I took that same concept, so why can't we just do that in tech? Why can't we have multiple startups running where maybe they don't need a full time engineer? They're really only need a part time engineer, maybe need a part time CMO or this kind of fractional group. Right. So kind of the word fractal comes from that fractional fractional idea.

00;22;42;04 - 00;22;57;00
Justin Fortier
So you've got a CMO who's able to run and help out several businesses, because sometimes the CMO is there's diminishing return on a fractional fractional CMO. They're not going to do the grunt work of of putting ads in and running all the market copy. They're just going to go ahead and create that strategic,

00;22;57;00 - 00;23;01;29
Justin Fortier
guidance. So what we've done is we've put these fractional folks across our technology businesses.

00;23;02;01 - 00;23;16;27
Justin Fortier
I'm a fractional CEO and CTO across all of our businesses. They're all independently owned with different cap tables for each one. And but we all kind of have this agreement to collaborate on getting price pressure down on when we go buy seats at,

00;23;16;27 - 00;23;21;22
Justin Fortier
for our project management software. Well, we say, hey, we can actually bring you in to 6 or 7 different businesses.

00;23;21;28 - 00;23;42;08
Justin Fortier
Can you give us a $10 discount off of all of our seats? So across 200 employees, that's a couple grand a month. That's pretty cool. We go and do some PR. Hey, we want to run a big piece in Forbes. Can you mention 5 or 6 of our businesses inside this one piece? Great. Instead of $10,000 a pop, we're now looking at five businesses all getting a feature in Forbes for one price.

00;23;42;08 - 00;24;00;12
Justin Fortier
So then we watch the talent jump around. That's what's been really cool is the the software engineers who come up through the agency sometimes JR getting, you know, earning their chops. Now they're jumping off to these different businesses. And we've created this really cool community and culture. Now up to around 200 people within the family of businesses,

00;24;00;12 - 00;24;03;21
Justin Fortier
maybe a little less like 150 to 200 people, depending on how you count contractors.

00;24;03;21 - 00;24;05;01
Justin Fortier
Right? That's always kind of tricky.

00;24;05;01 - 00;24;12;17
Justin Fortier
and it's just really cool in a balanced business, a business staying within the family, retaining the talent, believing in the ethos of the group. It's really cool.

00;24;12;19 - 00;24;23;19
Craig Andrews
Wow. That's neat. And and so collectively, what what's all these businesses do? It's you know, I when I looked at your website, I know you do some,

00;24;23;19 - 00;24;25;27
Craig Andrews
CSS work, UX work.

00;24;25;29 - 00;24;37;12
Justin Fortier
So that's so okay. Yeah. Let's I'll kind of walk through them. So we do have a services business which is our software development agency. So anybody with a software project or products come to us and we'll do service business. So we'll do hourly consulting. And

00;24;37;12 - 00;24;45;00
Justin Fortier
staff augmentation. Right. That's your typical software dev shop. We have a media agency who does something kind of similar, which is the production,

00;24;45;00 - 00;24;45;25
Justin Fortier
media content.

00;24;45;25 - 00;24;47;06
Justin Fortier
They'll do video, photo,

00;24;47;06 - 00;24;59;23
Justin Fortier
editing, animation. We have a recruiting business. So those are like a services way there. So that's where, you know, we're going to be bringing in and moving a lot of talent and a lot of cash flow comes into those businesses. Then we have a venture group, which is where we spun up our own SaaS products.

00;24;59;23 - 00;25;07;23
Justin Fortier
So we have accounts receivable. I'm sure you're not surprised that I got into accounts receivable software after everything we just talked about?

00;25;07;23 - 00;25;22;18
Justin Fortier
a deal flow platform for investors. We have a couple cyber cyber security products inside that group as well. And then we've spun up an angel investing group. So they're they're all tech focused usually around fintech or cybersecurity.

00;25;22;21 - 00;25;29;20
Justin Fortier
So they're like our are two core competencies. So we try to keep it narrowed right. We're not we're not just willy nilly grabbing, you know

00;25;29;20 - 00;25;33;23
Justin Fortier
ice cream trucks because that sounded interesting. But they kind of keep it in a particular narrative.

00;25;33;23 - 00;25;35;21
Justin Fortier
so it does help keep our talent,

00;25;35;21 - 00;25;44;14
Justin Fortier
focused. But it's been it's been really cool to give them options to grow instead of, you know, so much flight of engineers in in the software world.

00;25;44;16 - 00;25;57;09
Craig Andrews
Yeah. So how does this how does that eliminate the flight. Because, you know, when I, when I look at the average LinkedIn somebody job two years, two years and two years.

00;25;57;11 - 00;26;00;19
Justin Fortier
Every software engineer two years, two years, two years.

00;26;00;19 - 00;26;03;18
Justin Fortier
I think it's because the software engineer gets a lot of,

00;26;03;18 - 00;26;09;25
Justin Fortier
they get kind of lured away. They get a lot of attention when they start getting good.

00;26;09;25 - 00;26;12;17
Justin Fortier
they have friends who kind of leap from place to place.

00;26;12;17 - 00;26;21;18
Justin Fortier
and they also get a little bit bored and burned out, certain jobs because there's only so many times you can update the position of a button left, right.

00;26;21;18 - 00;26;39;00
Justin Fortier
But right. It's kind of boring. Right? So they kind of need new, fresh projects. So instead of them going out and finding another job outside of the family, they stay within the family and maybe jump over to, okay, I'm kind of done working on this deal flow platform. I'm getting burned out on that. I was only so many times I can shuffle a card over and over again.

00;26;39;00 - 00;26;53;07
Justin Fortier
Let me do something new. Okay? Why don't you come over and work on our accounts receivable product, and you can work on the QuickBooks API. Connectors, connections. Great. Come over and do that for six months. Eight months. Starting to get tired of that. Go back over to the agency. There's all sorts of interesting projects going on over there.

00;26;53;09 - 00;26;54;04
Justin Fortier
Do some work over there.

00;26;54;04 - 00;26;54;27
Justin Fortier
There's a firms,

00;26;54;27 - 00;27;08;26
Justin Fortier
there's a there's so many different things you can do within our group that you're never going to get burned out. And, you know, that's that's the benefit is that you're going to have enough friends, enough community within the group. And you'll you'll just don't burn out on one product.

00;27;08;28 - 00;27;11;08
Craig Andrews
you know, that makes a lot of sense.

00;27;11;10 - 00;27;25;11
Justin Fortier
Makes like what's cool is they come from business to business too. And they've already been trained on the system. We keep the same systems in each one of the businesses, so they're immediately up and running. There's no there's no learning curve for them, like, oh, I don't know. This project management. I got to get used to this email.

00;27;25;13 - 00;27;28;25
Justin Fortier
That's not a thing. They're immediately effective.

00;27;28;27 - 00;27;35;14
Craig Andrews
You know, it sounds a little bit in some ways it sounds like in Japan was famous for I forgot what was ends,

00;27;35;14 - 00;27;39;14
Craig Andrews
in the, you know, groups of companies, they always work together.

00;27;39;16 - 00;27;48;29
Justin Fortier
Yeah. Yeah, yeah, yeah, that's a that's a good way to put it. I was, I was worried you were going to say cartel.

00;27;49;01 - 00;27;56;04
Justin Fortier
Okay. I could be confused. No. Absolutely not. There's nothing nothing nefarious going on there. But yeah, it's a good that's a good analogy for it.

00;27;56;07 - 00;28;03;06
Craig Andrews
Yeah, well, that's really cool. I mean, I've literally never heard of anything like this before.

00;28;03;06 - 00;28;09;28
Craig Andrews
you know, I've never heard of it, but it makes a lot of sense.

00;28;10;00 - 00;28;19;23
Justin Fortier
Right. So if you want to look at the credit for where I learned it, this is not from me. This is from the Consortium Holdings Group down in San Diego. I think they're for their website projects.

00;28;19;23 - 00;28;20;22
Justin Fortier
Dot com.

00;28;20;22 - 00;28;28;08
Justin Fortier
really cool, innovative group that was building great restaurants and I think they may have gotten it from, I think the Los Angeles

00;28;28;08 - 00;28;41;05
Justin Fortier
and I have to it's seven grand is their is one of their big whiskey bars and independent Los Angeles and they were they had a similar model where they would just create individual owners of each individual bar, but they they drop in the same processes, the same systems, and they didn't charge.

00;28;41;05 - 00;29;00;04
Justin Fortier
This wasn't some management company that they to pay back. They just understood kind of like what we talked about the, the, the 1099 investing long term. And those systems in those processes will have will yield results. You don't need a nickel and dime. People along the way just use those systems you know will win as a whole.

00;29;00;06 - 00;29;14;05
Craig Andrews
Yeah. Oh so what would be your advice to somebody who. That seems like a lot to spin up. If somebody would want to do that, that seems like a lot of work. How do you go about going.

00;29;14;05 - 00;29;27;10
Justin Fortier
Back to the very beginning that I said, if you want to start your own business, don't. Unless you're a masochist who likes to break their nose and lose their teeth playing ice hockey and loves the lentils and potatoes and work really hard and have and push themselves, don't,

00;29;27;10 - 00;29;32;26
Justin Fortier
just don't do it. If you want the lifestyle business, go do something one one thing.

00;29;32;26 - 00;29;34;04
Justin Fortier
Do it really well. But,

00;29;34;04 - 00;29;40;21
Justin Fortier
everything in my life has led me to want to do something more difficult. I didn't want to do something that has is multifaceted.

00;29;40;21 - 00;29;51;12
Justin Fortier
so it works for me. It works for my partner, who's it has a similar mindset. It's not an ad thing. Some people kind of like would think, oh, if you have and, you know, the lack of focus is causing this.

00;29;51;12 - 00;30;04;26
Justin Fortier
No, this is a very strategic way of looking at it that says, I need to hedge some of my bets. So I need to create a diversity within our portfolio of businesses that will help grow, and I can help them collaborate. So it is a lofty ambition.

00;30;04;26 - 00;30;06;03
Justin Fortier
and it's a lot of work.

00;30;06;03 - 00;30;07;09
Justin Fortier
so you better be ready.

00;30;07;09 - 00;30;10;05
Justin Fortier
You better be very systems focused. Like,

00;30;10;05 - 00;30;25;06
Justin Fortier
I love the conversation that was had. There's a big, brewery scene down in San Diego, and there was this big competition. Why? Stone was killing everybody. Oh, it's because Stone has more funding in their marketing and blah, blah, blah, and all the other kind of microbreweries in town were saying, oh, it's stones.

00;30;25;11 - 00;30;44;17
Justin Fortier
I don't know what it is about them. And Stone just said, we just have better systems. We don't get better hops. There's nothing different about our hops or it was just we have better systems and they need to get their systems together. So that's our thing is you better be systems oriented. You better be process orientated, be strong, driven, make sure you get paid on time and and yeah.

00;30;44;17 - 00;30;47;26
Justin Fortier
So I it's I would not advise this to many people.

00;30;47;28 - 00;30;50;20
Craig Andrews
Yeah. Well fascinating.

00;30;50;20 - 00;30;54;21
Craig Andrews
if people want to reach out and connect with you, how how do they find you?

00;30;54;24 - 00;30;58;27
Justin Fortier
so they can check out fractal group.io, and they'll see our family of businesses.

00;30;58;27 - 00;31;09;01
Justin Fortier
they'll see a little bit a little profile on each one of them and then links out to their website. So it's a great place to start. LinkedIn is definitely the best place to communicate with me if you're interested in chatting.

00;31;09;01 - 00;31;11;00
Justin Fortier
LinkedIn.com forward slash Justin

00;31;11;00 - 00;31;14;02
Justin Fortier
Fortier, 48.

00;31;14;04 - 00;31;32;15
Justin Fortier
and you can message me there. And then the other way is Justin at Fike labs.com. That would be my email. Say hi to me chat if you want idea you know, feedback on. So maybe you're working on something similar. Maybe you want to bring your business to the fractal group. Because we do actually bring in other businesses that people are interested.

00;31;32;17 - 00;31;34;05
Justin Fortier
we do angel investing.

00;31;34;05 - 00;31;39;26
Justin Fortier
we're always looking for clients and work. So yeah, we're we're open for business and we're working hard all the time.

00;31;39;28 - 00;31;43;25
Craig Andrews
Well very cool Justin, thanks for sharing this one. Laters. And legacies.

00;31;43;27 - 00;31;47;17
Justin Fortier
Yeah. You bet. Thanks for having me.

00;31;47;17 - 00;32;14;13
Craig Andrews
This is Craig Andrews. I want to thank you for listening to the Leaders and Legacies podcast. We're looking for leaders to share how they're making the impact beyond themselves. If that's you, please go to Alize for me.com/guest and sign up there. If you got something out of this interview, we would love you to share this

00;32;14;13 - 00;32;16;08
Craig Andrews
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Craig Andrews
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00;32;39;22 - 00;32;47;27
Craig Andrews
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00;32;47;27 - 00;34;50;02
Craig Andrews
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