all right everyone welcome to this month's episode for the one thing webinar series every month we try to bring you the author behind a best-selling book and what I'm particularly very excited about this conversation today because a lot of people who write books they've done amazing research when they want to share great ideas yet as you were just saying Keith not all of them have actually done what the book is about and especially when it comes to extraordinary results in business today you have a very rare opportunity to have a chance to sit down with somebody who has created extraordinary success as the business owner has enjoyed wealth beyond what most people can ever imagine has suffered losses that would most people and found his way to build it back and keep it it's not what you make its what she keep he is the author of a book that has inspired my most recent 66 day challenge the road less stupid advice from the chairman of the board so with that I'd like you to be keep coming up thank you thank you very much so if give people an understanding of who you are and what your career has been about so I'm a business guy obviously you can tell from the accent it's not from New Jersey or the UK I've been in Texas my entire career I went to the University of Texas and was fortunate very early on in my career in fact my first job at a school had a terrific mentor I had two mentors and probably of all the decisions I've ever made that one was the most pivotal to align myself and study under people that had been there done that and we're willing to take me under the wing and nurtured me so I've been involved in over 20 different industries as an owner I've bought companies I've started them I've sold on I've torn them apart I've raised a lot of money I made as you indicated I've made a bunch and I lost and as part of my part of my story I suspect that will be something that we talk about is what are the lessons that you learn from from failure I love with Bill Gates and Bill Gates said success is a lousy teacher because it loves smart people into believing they know what they're doing say that again success is a lousy teacher because it was smart people into believing they know what they're doing and and I had that I had a terrific business and terrific income and I probably got a few scattered I started doing too many things at once started smoking my own exhaust got cocky and and you know ultimately had some really powerful learnings from that rebuilt it and now I spend the majority of my time teaching or consulting advising business owners we have business owners from all over the world that come to Austin Texas on a quarterly basis and meet with me in a board setting I teach you should of course call the four day MBA had a buyer exit of business so the bulk of the teaching and work and writing that I'm doing now is really based on the last 45 46 years of business mistakes I probably learn more from my mistakes than I ever dreamed I could learn I don't want to repeat them I'm clear on that but but but nevertheless I did learn why so that's kind of a thumbnail of me I own businesses today so I'm I teach what I do and I probably want people that that I study the mistakes and I study the successes and I try to figure out okay what could I do better what did I learn take us back to the when you're a real estate developer and you have an incredible net worth and all of a sudden you find yourself overnight millions of dollars upside down yeah it was who is brutal most people that are listening to this can remember 2007 2008 in 2007 2008 in the United States there were less than 10 banks that failed from 1988 until 1991 3400 banks failed it was regionally it was far more severe than what happened in 2007-2008 and so the economy turned it flipped and and I was caught with a ton of debt at exactly the wrong time I had a tremendous net worth I had a lot of cash and I had a lot of debt and I woke up every morning for four years and I negotiated with my banks and negotiated with the government who took over a lot of the failed banks that I was doing business with family got Adam dead for years I got out of debt I got back to even how far outside down did you go a hundred million that was the hundred million upside down and I get back to even WC Fields said one thing I sure hope I break even on this deal I could really use the money and and I kind of felt the same way you know if I just get back to even and I did I jettisoned all the real estate all my assets which I had all different kinds of stuff and I get rid of all the - I was even and to me that was a victory in my tenants came to me and said that I owed the IRS ninety million dollars because I had created something called phantom income which simply happens when it when a bank forgives debt so if I will Bank 10 get an only repay six I have for me the Bing come I didn't really have the income I didn't have the cash because I used it to buy property so that my account has come to me and tell me I have this problem and I said I thought being clever well since its phantom income let's give them a phantom check I mean how hard could this be and they say they're going to work and so really I had two choices either I could pay the money which I didn't have any more longer or I could put a bankruptcy in February the 12th 1991 I declared personal bankruptcy and it was it was the it was the worst thing that could have happened because I have my identity attached to my my net worth my self-worth and my net worth were entwined and that's a brutal combination so I did a lot of work internally we've got a lot of help a lot of support from people that I think are very very smart and they kind of coached me through that time period I then recreated I became a turnaround guy for several different businesses and recreated my net worth and and kind of fell in love with teaching simultaneously so I was given a radio interview in Ireland there's probably ten years ago I was there to to speak and the motor of the events and Keith would you be willing to do a radio commercial the day before the event was supposed to be about five or six thousand people who show up and hear you speak and I said sure I'll be glad to do a radio interview and so they brought me to the radio disc jockeys studio and the disc jockey was on air and then he went off air for commercial and I sat down in the chair just like this and he looked at me while we're off the air and he said is there anything you don't want me to ask or to say and I said yeah you know what let's not bring up losing a hundred million dollars let's let's just leave that one alone will about something else so he said okay so we get back from the commercial and this guy said I'm here with Keith Cunningham Keith how does it feel to lose a hundred million dollars and of course we're on the air and I can't say what I really thought I said and this is and this is the lesson I said let me tell you something life is like a university and in a university there are courses and every course has a tuition I just took a course in the university of life and the tuition was a hundred million dollars first of all not very many people get to take this course it's kind of expensive secondly the question is how does it feel to have paid that much money to take the course the question is did I get my money's worth did I learn the lessons and I would say the bow of the success that I've created and kept since that happened in the early 1990s is really a result of the lessons that I had to learn the hard way and I think I think it's crazy to have to learn lessons the hard way I had people around me at the time I should have listened to I didn't I didn't I became too cocky probably to ask for help there's a great poem that goes here lies the body of Justin gray he died defending his right of way he was right his case was strong but he's as dead as if he were wrong and that was me I was kind of dead right and and at my experiences and this is really why I teach and write and and do the things I do at this point is because I don't think you have to learn all the lessons the hard way yeah I think you can surround yourself with people that are smarter than you that have been there and can I heard somebody say one time and I think it's true if you're going to go someplace you've never then it's a great idea to have a gang and and I think that's what we all need we need people guiding us and help clearing their path and people that have a sense of true north and how do we get from here to there well I think that's one of the things that initially attracted me to you and ultimately to your book the road less stupid which people if you don't have a copy this yet I would suggest going to Amazon I literally have been tearing through this thing and it's been the backbone of my current 66 day challenge which we'll get into what power or how that I'm forming as a result of this but when I think about okay I don't want to have to pay a hundred million dollars you already did it for me so thank you you talk about these five core disciplines what were some of those lessons that was worth the price of tuition of 100 million dollars you know I think probably one of the biggest mistakes and this is something that I still struggle with I still fight this tendency to avoid thinking about second-order consequences you know I avoid my tendency is to want to tell myself a story about the upside without ever considering the downside I have a three-part rule that I have baked into my thinking and and the three-part rule is what's the other side which I'm really good at what's the downside which most of us aren't that good at usually you need some help to think about what could go wrong and then question number three is can you live with the downside and I think that's a question that only the pros ask everybody asked what the upside is a few people will touch the middle around the edges of what's the downside but they really don't get real with it they don't talk about all the things that could go wrong and almost nobody asks the third question I think I think second-order consequences I think evaluating is one of the most powerful things you can do is as a business owner or as somebody who wants to be successful in business I think making money is very different than keeping it those are two different skill sets you and now we're talking earlier Jeff about you know what does it take to make money and I kind of flippantly said look you get lucky and make money but you can't be lucky and keep it I think keeping it requires thinking in terms of what could go wrong where's the risk and the reality is that's why we have a Board of Directors you look at the biggest companies in the world you look at the most successful people in the world and over and over again you find a Board of Directors or a mentor or coach or somebody who will you know have honest conversations with you I think the higher you go or the hair you want to go the greater the requirement that you have somebody around you who will tell you the truth yeah my question for those of you who are watching this or listening to this how many of you are natural optimists like this guy right here where the glass is not only getting half full there's cracks and water spilling out you still think it's gonna overflow that's me and I remember in my first 90 days in starting this company with Gary OJ I was asked the same questions what's the upside what's the downside are you willing to live with the downside if the answer to that third question - no no dice don't go forward that's right and right people around it's powerful I think it's very powerful I think I think separating the story from the facts I have a tool that I use I'll mention it real briefly most of us know what a post-mortem is a post-mortem is some some somebody dies and they figure out why they died a pre-mortem asks you to think about one year from today project one year into the future and you look back and then look back the decision you're about to make as if it's already been made the decision has turned in to a total dumpster fire total dumpster fire the thing is raging out of control it's a giant mess from the perspective of a year down the road looking backwards what were all the things that could have happened that caused this to be a mess it's called a pre-mortem isn't probably one of the most powerful tools that you can use when making business and financial decisions its course there you go it will also work in your personal life but from a business perspective I find that most people don't do the appropriate amount of risk analysis they don't really think through their decisions they go with their gut they go with their intuition they go with their glance they wind up making glandular emotional kinds of decisions there's a book that you have I have 90% of you probably know of it or many of you actually have a few of you have probably even read you