WEBVTT - Jamie Dimon: America’s Strength in Small Business 0:00:03.320 --> 0:00:03.800 Ruby. 0:00:07.280 --> 0:00:10.480 Usually on The Unshakeables, we hear about small business owners 0:00:10.480 --> 0:00:12.719 stuck between a rock and a hard place, running up 0:00:12.720 --> 0:00:16.200 against a make or break situation. Well, moments like that 0:00:16.239 --> 0:00:19.440 don't just happen to small business owners. They also happened 0:00:19.440 --> 0:00:22.720 to big companies and their CEOs, people running some of 0:00:22.760 --> 0:00:26.160 the largest corporations in the country, people like my boss, 0:00:26.480 --> 0:00:27.240 Jamie Dimon. 0:00:28.480 --> 0:00:30.840 When I realized I was sitting at my desk, I 0:00:30.840 --> 0:00:32.440 didn't realize this to very of the problems I was 0:00:32.479 --> 0:00:36.320 going through, the actual trade positions, and my heart fell out. 0:00:38.560 --> 0:00:40.840 There were a series of trades that the London office 0:00:40.840 --> 0:00:43.200 of JP Morgan Chase made in twenty eleven and twenty 0:00:43.240 --> 0:00:46.480 twelve that would come to be known as the London Whale. 0:00:46.640 --> 0:00:49.240 As soon as he found out about them, Jamie knew 0:00:49.240 --> 0:00:53.200 he had a problem. 0:00:51.600 --> 0:00:53.239 And I knew at that moment we're going to lose 0:00:53.280 --> 0:00:55.880 billions of dollars. I had not expected that. 0:00:56.080 --> 0:01:00.920 It caught me off guard, but instead of panic, instead 0:01:00.920 --> 0:01:03.440 of lashing out, he calmly went to break the news 0:01:03.440 --> 0:01:05.760 to everyone. And when I say everyone, I mean to 0:01:05.800 --> 0:01:09.399 the board, to the media, but most importantly to his 0:01:09.480 --> 0:01:13.000 employees at the firm. Whatever was going to happen. Jamie 0:01:13.000 --> 0:01:14.039 took responsibility. 0:01:14.959 --> 0:01:17.560 All these bad headlight said, forget all of that, take 0:01:17.600 --> 0:01:20.679 a deep breath, don't overreact. We have a couple hundred 0:01:20.720 --> 0:01:23.280 thousand people work with this company. More important than that 0:01:23.319 --> 0:01:25.399 they serve. As you mentioned at the Times, by four 0:01:25.400 --> 0:01:29.959 million small businesses, serve your clients. Ignore the other stuff. 0:01:30.000 --> 0:01:32.840 Do a great job your clients and your communities. We're 0:01:32.880 --> 0:01:33.560 going to get through this. 0:01:40.360 --> 0:01:40.520 Hi. 0:01:40.560 --> 0:01:43.840 Everyone, it's Ben Walter with a big welcome back. We're 0:01:43.840 --> 0:01:46.920 officially kicking off season two of The Unshakeables, and I'm 0:01:46.920 --> 0:01:49.360 excited and ready to share some incredible stories with you. 0:01:49.800 --> 0:01:52.640 I'm impressed every day by small business owners, and I 0:01:52.680 --> 0:01:55.240 can honestly say that this season continues to surprise me. 0:01:55.960 --> 0:01:57.920 Just when I think we've heard it all, I speak 0:01:57.920 --> 0:02:00.480 with another small business owner that reminds me just how 0:02:00.520 --> 0:02:02.760 tenacious and creative you have to be to start and 0:02:02.840 --> 0:02:05.120 run a company. I can't wait for you to hear 0:02:05.160 --> 0:02:09.080 their stories. But today we're doing something different. Our guest 0:02:09.160 --> 0:02:12.000 is not only the CEO of America's largest bank, he's 0:02:12.040 --> 0:02:14.919 also a longtime champion of small business and its ability 0:02:14.960 --> 0:02:17.440 to lift up communities. My colleagues, and I get to 0:02:17.520 --> 0:02:19.880 learn from him every day. I'm thrilled to welcome to 0:02:19.919 --> 0:02:23.000 the show my colleague and my boss, Jamie Dimon, the 0:02:23.120 --> 0:02:26.640 chairman and CEO of JP Morgan Chase, Welcome to the show. 0:02:26.840 --> 0:02:27.560 Grilled to be here. 0:02:28.240 --> 0:02:31.120 I also have a great co pilot joining me. Kathleen 0:02:31.160 --> 0:02:34.960 Griffith is an entrepreneur, author, and founder and CEO of 0:02:35.040 --> 0:02:39.720 Build and Grayce & Co. She'll be joining me throughout the season. Kathleen, 0:02:40.040 --> 0:02:42.280 Welcome to the Unshakeables. We're thrilled to have you. 0:02:42.880 --> 0:02:44.120 So glad to be here with you. 0:02:45.160 --> 0:02:47.680 Kathleen, you have so much experience as an entrepreneur and 0:02:47.720 --> 0:02:49.680 as a small business owner yourself, so I know you'll 0:02:49.720 --> 0:02:52.600 be a great addition to the show today. I'm looking 0:02:52.600 --> 0:02:54.960 forward to getting your take on Jamie's insights and advice 0:02:55.560 --> 0:02:58.960 ready when you are on today's episode. Chairman of the 0:02:58.960 --> 0:03:05.800 board and CEO of JP Morgan Chase, Jamie Dimon. The 0:03:05.800 --> 0:03:08.120 theme of our podcast what we talked to small business 0:03:08.160 --> 0:03:11.400 owners all the time is colloquially their oh Shit moment. 0:03:11.480 --> 0:03:13.280 We talked to them about the time that they really 0:03:13.320 --> 0:03:15.040 weren't sure they were going to make it. Have you 0:03:15.080 --> 0:03:17.240 had any of those moments running businesses in your career 0:03:17.280 --> 0:03:18.640 and can you tell people a little bit about it, 0:03:18.680 --> 0:03:20.200 what you learned from it and what you did with it. 0:03:20.840 --> 0:03:23.520 Yeah, people are talking my career and stuff like that. 0:03:23.520 --> 0:03:25.520 They almost never mentioned the fact I was fired from 0:03:25.560 --> 0:03:27.760 the place I'd worked for for fifteen years. That was 0:03:27.800 --> 0:03:30.040 kind of an O shit moment. But you know, listen, 0:03:30.120 --> 0:03:32.359 there's some of them are real, like when you make 0:03:32.480 --> 0:03:36.400 real mistakes, usually people mistakes. They're hard. Or you do 0:03:36.560 --> 0:03:38.960 acquisitions like Bear Sterns in the middle of a crisis. 0:03:38.960 --> 0:03:42.160 You're buying a company with thirty thousand people, three hundred 0:03:42.160 --> 0:03:45.240 million of assets. You're scared. You have to then execute 0:03:45.280 --> 0:03:48.440 all the consolidation, et cetera. That would be one. We 0:03:48.480 --> 0:03:50.720 had a big trading problem. It's called the London Whale. 0:03:51.080 --> 0:03:53.360 I'm sure when I've died, I'll be You know, you 0:03:53.400 --> 0:03:55.680 did a good job, but for the London Whale. But 0:03:55.840 --> 0:03:57.800 that to me, yes, that was O shit moment. 0:04:00.320 --> 0:04:02.760 For those of you who don't know, The London Whale 0:04:02.840 --> 0:04:05.200 was the name given to a significant loss incurred by 0:04:05.240 --> 0:04:08.920 JP Morgan Chase in twenty twelve. A series of investments 0:04:08.920 --> 0:04:11.560 made by one trader in the London office had gone bad. 0:04:12.240 --> 0:04:14.680 At first, the teams thought it looked like a relatively 0:04:14.720 --> 0:04:19.120 standard loss. Very quickly Jamie realized it was much larger. 0:04:20.600 --> 0:04:22.680 The loss was billions, and it could be billions more. 0:04:23.240 --> 0:04:25.640 I had not expected that, he caught me off guard. 0:04:26.200 --> 0:04:28.559 I immediately told the board, and I went on radio 0:04:28.640 --> 0:04:31.880 or TV. I said, we made a terrible mistake, bad 0:04:32.000 --> 0:04:34.800 risk management, bad this, bad that, and it's my fault, 0:04:34.880 --> 0:04:35.560 and I'm sorry. 0:04:37.240 --> 0:04:39.560 Jamie didn't just own up to the public and the board. 0:04:40.000 --> 0:04:42.320 He talked to all the JP Morgan Chase employees. 0:04:43.520 --> 0:04:45.760 I got all the people together inside the company and 0:04:45.839 --> 0:04:48.560 I told them this is gonna be terrible. They're going 0:04:48.600 --> 0:04:50.320 to accuse us of this with the one bank that 0:04:50.360 --> 0:04:52.800 didn't have these proms and now we do, and Diamond 0:04:52.880 --> 0:04:55.640 off his white horse and all these bad Headlines I said, 0:04:55.760 --> 0:04:58.200 forget all that, because very often what happens, and you 0:04:58.279 --> 0:05:00.679 quote have this crisis a company, it makes it worse. 0:05:01.480 --> 0:05:03.880 The bosses crying and spilled milk, and everybody's waiting to 0:05:03.880 --> 0:05:06.160 see what's going to happen. Meanwhile, our day to day 0:05:06.240 --> 0:05:07.200 job didn't change. 0:05:09.200 --> 0:05:10.920 This is something we've heard a lot on the show. 0:05:11.160 --> 0:05:13.599 It's not just about what happens, but it's about how 0:05:13.640 --> 0:05:16.960 you respond to it that really matters. Jamie told the 0:05:16.960 --> 0:05:20.200 press as much. The day after the London whale story broke. 0:05:20.520 --> 0:05:22.880 He pulled up to the office around seven am and 0:05:22.920 --> 0:05:25.560 the press was already outside, cameras at the ready. 0:05:27.640 --> 0:05:29.880 I walked out. All the cameras can run up to me, 0:05:29.880 --> 0:05:32.200 you're gonna lose your job or how much money you're 0:05:32.200 --> 0:05:34.680 gonna lose. I looked up at them, I smiled, and 0:05:34.760 --> 0:05:36.840 I looked up to Bill and said, if you want 0:05:36.880 --> 0:05:40.279 to know something, there are seven thousand people work in 0:05:40.279 --> 0:05:42.320 this building, and how proud I am of every single 0:05:42.360 --> 0:05:44.279 one of them, and we're gonna do a great job 0:05:44.640 --> 0:05:45.760 every day for our clients. 0:05:46.920 --> 0:05:49.200 One of the recurring themes that comes up from every 0:05:49.240 --> 0:05:52.400 guest on the show is how deep inside them they 0:05:52.400 --> 0:05:54.440 had to reach to get through those moments to really 0:05:54.440 --> 0:05:56.839 find the grit and the drive and the energy. Where 0:05:56.880 --> 0:05:57.719 do you get yours from? 0:05:58.360 --> 0:06:01.080 I grew up with some basic value, do the best 0:06:01.080 --> 0:06:05.040 you can, treat every respect, make the world a better place. 0:06:05.600 --> 0:06:07.640 And I literally feel that way when I wake up, 0:06:07.680 --> 0:06:10.600 and then when I see our people around the world 0:06:10.680 --> 0:06:12.960 what they're doing for their clients and their communities and 0:06:13.000 --> 0:06:16.159 their countries. That's where I get my motivation. I feel 0:06:16.320 --> 0:06:20.159 being the boss is a responsibility and it's an honor 0:06:20.240 --> 0:06:22.800 and it's a privilege. But you owe the people, you 0:06:22.920 --> 0:06:25.799 owe the clients, and so I really feel that pressure 0:06:25.839 --> 0:06:28.119 to make sure I do a good job. If I don't, 0:06:28.480 --> 0:06:29.880 a lot of other people you get hurt. 0:06:30.640 --> 0:06:32.960 We're lucky, as you know, to serve more than six 0:06:33.040 --> 0:06:35.599 million small businesses every day, hopefully closing in on seven 0:06:35.640 --> 0:06:38.080 million soon. And the last few years have been interesting 0:06:38.160 --> 0:06:41.440 because business formation has been at levels we haven't seen 0:06:41.600 --> 0:06:44.560 ever in the history of the country. What should small 0:06:44.600 --> 0:06:47.480 businesses expect and how should they feel about their contribution 0:06:47.560 --> 0:06:48.839 to America in that environment? 0:06:49.480 --> 0:06:51.359 Yeah, so, you know, small businesses have always been a 0:06:51.360 --> 0:06:54.360 critical part of the country. They're more than half full 0:06:54.400 --> 0:06:57.440 of the jobs, a lot of formation. It's for very 0:06:57.480 --> 0:07:00.680 strong economy, it's confidence, all those various things. But also, 0:07:00.720 --> 0:07:02.559 I should be playing a small business in big business 0:07:02.600 --> 0:07:05.520 a symbiotic. Very often when their plans is built somewhere 0:07:05.560 --> 0:07:08.360 for a big factory, three or four times as many 0:07:08.480 --> 0:07:12.200 jobs outside of the company, you know, doing small services 0:07:12.200 --> 0:07:16.080 and food and engineering and consulting and we're all kind 0:07:16.080 --> 0:07:18.600 of grow together each year. 0:07:18.760 --> 0:07:22.520 It's estimated that federal regulations cost small businesses around fourteen 0:07:22.960 --> 0:07:26.440 seven hundred dollars per employee. That's twenty percent higher than 0:07:26.440 --> 0:07:30.520 for larger businesses. Small businesses tell us that they feel 0:07:30.520 --> 0:07:33.800 the weight of regulation, and they feel the weight of 0:07:34.040 --> 0:07:36.520 all these changes on them, and sometimes they feel like 0:07:36.560 --> 0:07:38.600 they don't have a voice. How do we give them 0:07:38.600 --> 0:07:39.520 a bigger voice? 0:07:40.080 --> 0:07:41.760 We all go in these bus trips together and we 0:07:41.760 --> 0:07:44.000 always have lunches and dinners with a lot of small 0:07:44.040 --> 0:07:47.640 business people. You hear about the regulations, the audits, the local, 0:07:47.680 --> 0:07:50.440 the federal, the state audits, how long it takes to 0:07:50.440 --> 0:07:54.680 fill out their taxes and get permissions and licenses and permits. 0:07:55.160 --> 0:07:56.680 They have a voice, you know. They do have a 0:07:56.760 --> 0:07:59.320 voice through chambers around the country so much are actually 0:07:59.400 --> 0:08:02.960 quite capable around the SBA. But I think sitting here 0:08:03.000 --> 0:08:04.960 with you, Ben, we can help give a better voice 0:08:05.000 --> 0:08:07.640 too and get to the government all the things would 0:08:07.680 --> 0:08:11.360 do that can help foster, nurture and grow small businesses. 0:08:12.000 --> 0:08:13.800 Yeah, we try to get them involved and we encourage 0:08:13.800 --> 0:08:15.400 them to use their voice and to speak up for 0:08:15.440 --> 0:08:17.160 the issues that they're passionate about and to try to 0:08:17.160 --> 0:08:20.320 give them a platform. I want to pivot to where 0:08:20.400 --> 0:08:23.120 people's heads are at the moment. I've followed the NFIB 0:08:23.600 --> 0:08:26.280 Confidence Survey now for the better part of fifteen years. 0:08:26.360 --> 0:08:29.120 It's been trekking along at an all time low. Suddenly 0:08:29.160 --> 0:08:32.320 spiked to a pretty high level actually after the election. 0:08:33.520 --> 0:08:37.240 The NFIB is the National Federation of Independent Businesses, and 0:08:37.280 --> 0:08:40.960 they publish something called the Small Business Optimism Index, which 0:08:41.000 --> 0:08:43.400 is a metric that shows us how small business owners 0:08:43.400 --> 0:08:46.520 are feeling about the state of business in America. Between 0:08:46.559 --> 0:08:49.720 November and December of twenty twenty four, I saw that 0:08:49.840 --> 0:08:52.120 number jump more than I had ever seen in a 0:08:52.160 --> 0:08:52.760 single month. 0:08:53.960 --> 0:08:57.439 I think, whether you're a Democrat or Republican, business actually 0:08:57.480 --> 0:09:01.360 feels pretty good about the oncoming pro business environment, pro 0:09:01.440 --> 0:09:03.600 investment environment, and things like that. 0:09:04.200 --> 0:09:08.040 But we are still hearing when we survey that rising taxes, 0:09:08.120 --> 0:09:12.199 wage costs, inflation, those things continue to weigh on businesses. 0:09:12.200 --> 0:09:13.439 And one of the things I've been lucky to learn 0:09:13.440 --> 0:09:15.160 from you is about risk management and how to really 0:09:15.200 --> 0:09:17.960 think about a risk culture. So what should small businesses 0:09:18.000 --> 0:09:19.959 be worried about and what should they do about it? 0:09:20.520 --> 0:09:22.880 In terms of risk management, it doesn't matter what business 0:09:22.880 --> 0:09:25.560 you're in. Obviously, every business is different. So if you're 0:09:26.080 --> 0:09:28.800 a bank, our biggest risks or interest rates and credit 0:09:28.800 --> 0:09:31.360 exposure and things like that. But if you're certain types 0:09:31.360 --> 0:09:33.640 of other companies, your biggest exposure might be what's the 0:09:33.679 --> 0:09:36.120 cost of oil, what's the cost of energy, what's the 0:09:36.160 --> 0:09:39.000 cost of transport, and other areas might just be what's 0:09:39.040 --> 0:09:41.440 the cost of wages or something like that. So I 0:09:41.440 --> 0:09:44.439 think every business should prepare and think through a wide 0:09:44.559 --> 0:09:47.960 range of potential pros and cons slower growth, higher costs, 0:09:48.320 --> 0:09:50.839 so they can handle it. Because survival is half the 0:09:50.920 --> 0:09:53.079 name of the game. You could talk to anyone out there, 0:09:53.080 --> 0:09:55.480 from big companies to smaller companies. If you can get 0:09:55.520 --> 0:09:58.960 through tough times, then you can really do quite well 0:09:59.000 --> 0:10:01.880 in good times and sure a better workforce and make 0:10:01.920 --> 0:10:03.959 different types of investments. That the economy is kind of 0:10:03.960 --> 0:10:06.200 like the weather. No matter what you think it is today, 0:10:06.640 --> 0:10:08.760 it may not be sunny tomorrow, and so you need 0:10:08.800 --> 0:10:10.719 to be prepared for that. So we just have very 0:10:10.760 --> 0:10:13.200 blunt open conversations. Can you handle this, What does it 0:10:13.240 --> 0:10:14.360 mean to you? How are you going to do it? 0:10:14.720 --> 0:10:18.200 So you're basically prepared. You're thinking through what a plan 0:10:18.280 --> 0:10:20.160 might be, how you might deal with it. It also 0:10:20.360 --> 0:10:23.640 very often stops you from overexpanding. People get exuberant and 0:10:23.679 --> 0:10:25.040 you know, over expanding. All of a sudden you have 0:10:25.040 --> 0:10:27.240 a downturn. Now you have a lot more overhead or 0:10:27.240 --> 0:10:30.920 something like that. So just being prepared, thinking through, having 0:10:30.920 --> 0:10:33.760 an honest assessment, always think about what can go wrong 0:10:33.840 --> 0:10:36.000 to not just about the things that can go right, 0:10:36.440 --> 0:10:38.000 and you get better and smart as you go on. 0:10:38.920 --> 0:10:40.679 So how do you lead a team through that when 0:10:40.720 --> 0:10:42.240 you see the bumps in the road coming, when you 0:10:42.240 --> 0:10:45.040 see the downturn coming, how do you convince people that 0:10:45.160 --> 0:10:47.400 work for you to persevere through that. 0:10:48.600 --> 0:10:50.800 First of all, we're totally honest with everybody. The things 0:10:50.800 --> 0:10:53.400 that we say publicly privately right about that you hear 0:10:53.800 --> 0:10:56.360 in the management meetings is the same stuff. You should 0:10:56.360 --> 0:10:58.920 always celebrate your positive you should always celebrate your wins, 0:10:59.120 --> 0:11:01.760 but every now and then to sit down, emphasize what 0:11:01.880 --> 0:11:04.360 you're not doing well and that sometimes there are bad 0:11:04.400 --> 0:11:07.360 times out there. So you've got to be a little prepared, And. 0:11:07.320 --> 0:11:09.520 How do you develop the judgment for you know, things 0:11:09.559 --> 0:11:12.320 are changing, maybe they're getting worse, maybe they're getting better. Nope, 0:11:12.360 --> 0:11:14.000 I'm gonna stick with my plan and I'm going to 0:11:14.040 --> 0:11:16.360 power through. Or it's time to think differently, it's time 0:11:16.360 --> 0:11:18.640 to stop, turn look and rethink things. 0:11:19.240 --> 0:11:20.840 Well, I think there's a bunch of things here. So 0:11:21.080 --> 0:11:23.600 when it comes to growing and investing and expanding, I 0:11:23.679 --> 0:11:26.120 try to run a business that we don't worry about 0:11:26.120 --> 0:11:28.439 the weather. I don't want you to change those plans. 0:11:28.800 --> 0:11:30.800 I do think you have to take a very deep 0:11:30.880 --> 0:11:32.599 look at yourself. Sometimes I don't care if you're a 0:11:32.640 --> 0:11:36.560 big company or a small company. Sometimes you're slowing down, 0:11:37.080 --> 0:11:40.880 the weeds are growing, Bureaucracy builds in you and your job. 0:11:40.920 --> 0:11:44.440 Ben you have to deal with risk, legal, credit, compliance, audit, 0:11:44.480 --> 0:11:48.200 finance from the big corporate headquarters who's making demands on you. 0:11:48.480 --> 0:11:51.320 They may not necessarily fully understand what those demands are, 0:11:51.600 --> 0:11:54.679 and so it's always important to like refresh it, rethink 0:11:54.720 --> 0:11:58.400 it through, be honest, criticize yourself. And we've had if 0:11:58.400 --> 0:11:59.840 you look at it, we've had a good time for 0:11:59.840 --> 0:12:02.680 it a long time. We have not had a real downturn. 0:12:02.880 --> 0:12:05.440 COVID had this you know, momentary downturn, but we haven't 0:12:05.440 --> 0:12:07.600 had a downturn for a long time. 0:12:08.120 --> 0:12:09.520 One of the things I tell people. I started my 0:12:09.520 --> 0:12:11.640 career in the mid nineties, and we actually haven't had 0:12:11.679 --> 0:12:13.720 a normal I'm gonna call it a normal garden variety 0:12:13.800 --> 0:12:17.440 recession in my entire career. We've had crises and good 0:12:17.440 --> 0:12:20.160 times and nothing in between. Right, people have forgotten about 0:12:20.160 --> 0:12:21.079 the normal business cycle. 0:12:21.080 --> 0:12:23.440 I feel like that's correct. Yeah, you had so you 0:12:23.480 --> 0:12:25.920 lived through the Internet bubble that was kind of temporary 0:12:25.920 --> 0:12:28.080 because this docks went up, they came down. You lived 0:12:28.080 --> 0:12:30.040 to the Great Financial Crisis. That absolutely is not a 0:12:30.080 --> 0:12:32.080 normal thing. But you're right, we have not had a 0:12:32.120 --> 0:12:35.599 normal garden variety recession in quite a long time. And 0:12:35.640 --> 0:12:38.080 it's not just a recession. You might have things that 0:12:38.120 --> 0:12:40.880 you don't expect, like interest rates going up in a recession, 0:12:41.320 --> 0:12:44.280 inflation not going down the way you'd expect it. And 0:12:44.320 --> 0:12:46.320 you see that today where you know, all of a sudden, 0:12:46.360 --> 0:12:48.440 people saying, wait, inflation's not going away so quickly, and 0:12:48.440 --> 0:12:50.360 the Fed's gonna have to adjust. You always have to 0:12:50.400 --> 0:12:52.720 be prepared for things that you don't expect, and you 0:12:52.840 --> 0:12:54.559 always want to bank in your corner that's going to 0:12:54.600 --> 0:12:56.720 be there for you through good times and bad times. 0:13:00.160 --> 0:13:01.560 Kathleen, I think this would be a good time to 0:13:01.559 --> 0:13:04.440 get your take. A lot of that conversation focused on 0:13:05.200 --> 0:13:08.240 risk and managing risk and having a culture of risk 0:13:08.440 --> 0:13:10.679 in a business. So I'm curious, from your perspective, as 0:13:10.679 --> 0:13:14.400 someone who has started businesses and who works with small businesses, 0:13:14.679 --> 0:13:16.520 how do you tell them to think about risk. 0:13:17.080 --> 0:13:20.120 For a lot of small business owners, it's seen as 0:13:20.120 --> 0:13:24.400 an expensive luxury. It's boring and not something they think 0:13:24.400 --> 0:13:26.880 they can afford to do right now. You know, they're 0:13:26.920 --> 0:13:30.080 just kind of running fast with super sharp scissors. But 0:13:30.320 --> 0:13:33.600 as Jamie talked about in this episode, there are as 0:13:33.679 --> 0:13:37.160 many types of risks as there are types of businesses, 0:13:37.760 --> 0:13:43.680 everything from labor to lawsuits, to competitors to cybersecurity, to 0:13:43.800 --> 0:13:46.920 supply chain, to cash flow to cost of goods. The 0:13:47.000 --> 0:13:50.800 list goes on, and so you really need to first 0:13:50.880 --> 0:13:54.680 and foremost identify what those risks are for you as 0:13:54.679 --> 0:13:58.280 a small business owner. For me, the biggest risk is 0:13:58.440 --> 0:14:02.200 exposure and liability. So I put three things into place 0:14:02.360 --> 0:14:04.840 early in my business so I could sleep through the night. 0:14:05.320 --> 0:14:08.600 The first was just setting up a business that's protected 0:14:09.200 --> 0:14:10.240 the formation. 0:14:09.920 --> 0:14:10.679 Of the company. 0:14:10.880 --> 0:14:14.840 The second was making sure that I had liability insurance 0:14:14.920 --> 0:14:18.840 in place and all my exposure points were covered, and 0:14:18.880 --> 0:14:23.880 the third was really just managing contracts and agreements, making 0:14:23.920 --> 0:14:27.320 sure that those were ironclad, and paying for really good 0:14:27.400 --> 0:14:30.400 lawyers even before I could afford them. 0:14:30.880 --> 0:14:33.200 One of the things that people like me who work 0:14:33.240 --> 0:14:36.240 for big companies have the advantage of. Even as CEO 0:14:36.280 --> 0:14:38.680 of Chase for Business, I have a team that's designed 0:14:38.680 --> 0:14:41.880 to challenge me. It's designed to say, hey, Ben, did 0:14:41.960 --> 0:14:44.840 you think about this? Or what if this happens? But 0:14:44.880 --> 0:14:46.680 in a small company where it might be just you 0:14:46.800 --> 0:14:49.040 or you and a few people, how do you facilitate 0:14:49.120 --> 0:14:52.200 that sort of cognitive challenge? How do you make sure 0:14:52.240 --> 0:14:55.160 that there's somebody who's thinking about the other side of 0:14:55.200 --> 0:14:55.840 the trade right? 0:14:56.480 --> 0:14:58.760 The most important thing I would say is just to 0:14:58.880 --> 0:15:03.160 really focus on on owning that as a founder yourself, 0:15:03.360 --> 0:15:06.480 so you don't really have anyone to delegate to. You've 0:15:06.520 --> 0:15:09.600 got to be on your front foot thinking through everything 0:15:09.600 --> 0:15:11.720 that can possibly go wrong in your business. 0:15:12.440 --> 0:15:14.920 So it really is a lot of trial and error. 0:15:14.960 --> 0:15:17.080 You learn by making. 0:15:16.760 --> 0:15:19.840 Mistakes, a lot of them are costly, and you decide 0:15:19.880 --> 0:15:21.280 you're not going to do that again. 0:15:21.960 --> 0:15:23.440 One of the other things I want to talk about 0:15:23.480 --> 0:15:25.920 is the business cycle. I mentioned this to Jamie because 0:15:25.920 --> 0:15:28.800 I think about this a lot, particularly from a bank perspective. 0:15:29.480 --> 0:15:32.360 We haven't really had a normal business cycle. We had 0:15:32.360 --> 0:15:34.520 the dot com bubble, and then we had the Great 0:15:34.520 --> 0:15:37.120 Financial Crisis, and then we had COVID. These were sort 0:15:37.120 --> 0:15:41.520 of headline type, you know, the world is melting down 0:15:41.640 --> 0:15:45.360 kind of things, as opposed to we had growth, and 0:15:45.400 --> 0:15:47.400 then we had a recession, and then things got better 0:15:47.400 --> 0:15:48.400 and we had growth again. 0:15:48.880 --> 0:15:51.680 How do you think that small businesses should prepare for that? 0:15:52.440 --> 0:15:55.600 My view is there's no real way to prepare for 0:15:55.680 --> 0:15:57.640 something like COVID, where some businesses had, you know, an 0:15:57.640 --> 0:16:00.840 eighty five or ninety percent drop in demand. I just 0:16:00.880 --> 0:16:03.320 don't think that's a reason that's such a black Swan event. 0:16:03.840 --> 0:16:06.400 But I think you can plan for what if I 0:16:06.440 --> 0:16:10.160 lost my largest client, or what if demand in the 0:16:10.200 --> 0:16:13.480 aggregate were down fifteen to twenty percent? What would I do? 0:16:14.000 --> 0:16:16.200 How would I survive that? When I talk to clients, 0:16:16.240 --> 0:16:19.000 I always say plan for the sort of middle of 0:16:19.000 --> 0:16:21.600 the Bell curve, not the very extreme ends of the 0:16:21.640 --> 0:16:24.000 Bell curve. Not that you can't think about some of 0:16:24.040 --> 0:16:26.280 those things, but those kinds of things are what insurance 0:16:26.320 --> 0:16:28.440 is for, or for other things because there's no way 0:16:28.480 --> 0:16:30.320 you'd have the financial wherewithal to stomach it. 0:16:31.080 --> 0:16:33.440 Yeah, and I liked a lot what Jamie was saying 0:16:33.440 --> 0:16:37.040 about people get over exuberant and so over expand and 0:16:37.120 --> 0:16:41.240 so really taking a step back and assessing your business 0:16:41.280 --> 0:16:46.560 periodically to make some you know, strategic changes to make 0:16:46.600 --> 0:16:49.120 sure that we're prepared for changing times. 0:16:49.720 --> 0:16:49.960 Yeah. 0:16:50.000 --> 0:16:53.000 The other advice I have for small business owners with 0:16:53.040 --> 0:16:54.760 respect to this is you can have too much of 0:16:54.800 --> 0:16:57.200 a good thing. And I don't know what that good 0:16:57.200 --> 0:17:00.160 thing is. It's different for every business. But whenever something 0:17:00.200 --> 0:17:03.640 is going really well and just constantly, constantly going really well, 0:17:03.840 --> 0:17:06.640 over and over and over again, that should also make 0:17:06.680 --> 0:17:07.440 your antenna go. 0:17:07.440 --> 0:17:09.919 Up right, and so you may have the sense that 0:17:09.960 --> 0:17:11.960 you've got a really healthy business. We hear all the 0:17:12.000 --> 0:17:14.120 time when you get under the hood of the car 0:17:14.160 --> 0:17:17.439 and you're asking about allocation, someone saying, well, eighty percent 0:17:17.440 --> 0:17:19.840 of my business is coming from this one retailer. 0:17:20.040 --> 0:17:23.680 Yeah, what if they go under, You're out of business. 0:17:24.359 --> 0:17:27.040 Okay, let's get back to Jamie. Jamie and I had 0:17:27.080 --> 0:17:29.919 a wide ranging discussion about risk, and we ended up 0:17:29.920 --> 0:17:32.199 talking about one of the specific types of risk that 0:17:32.240 --> 0:17:35.200 we have to manage at JP Morgan Chase. A few 0:17:35.200 --> 0:17:38.400 weeks ago, on Joe Rogan's podcast, Mark Andreesson whos 0:17:38.400 --> 0:17:41.600 a prominent venture capitalist, talked about de banking and that's 0:17:41.600 --> 0:17:43.439 something you and I have had to deal with, is 0:17:43.480 --> 0:17:46.199 some of the myths and truths around that. Can you 0:17:46.240 --> 0:17:49.040 talk a little bit about how that works and what 0:17:49.119 --> 0:17:51.480 is debanking and how do we think about it here 0:17:51.520 --> 0:17:52.600 at JP Morgan Chase. 0:17:52.960 --> 0:17:55.440 Yeah. I called Mark Andreessen after that as your friend 0:17:55.440 --> 0:17:57.439 of mine, I want to explain to him we have 0:17:57.640 --> 0:18:02.840 not debanked anyone because of political or religious relationships period 0:18:03.080 --> 0:18:05.600 Now when we debank so and they often blame that reason, 0:18:05.600 --> 0:18:08.920 but that's not a reason. We don't bank marijuana companies 0:18:08.920 --> 0:18:11.840 because there's no federal law around it. We simply can't 0:18:11.840 --> 0:18:14.639 follow the law. If there's a federal law, we probably would, 0:18:15.000 --> 0:18:17.680 and we do bank some crypto companies and very carefully. 0:18:18.080 --> 0:18:21.679 We are responsible in the law to fight sex trafficking, 0:18:22.200 --> 0:18:24.480 money laundering, tax avoidance. 0:18:24.560 --> 0:18:26.080 It's the Bank Secrecy Act right. 0:18:26.040 --> 0:18:28.280 Bank Secrecy Act, and we have to follow that. 0:18:29.240 --> 0:18:32.760 The Bank Secrecy Act went into law in nineteen seventy. 0:18:32.840 --> 0:18:36.000 It requires financial institutions to assess the risks the clients 0:18:36.080 --> 0:18:39.720 posed to the firm and act accordingly. It also specifically 0:18:39.760 --> 0:18:43.440 requires firms to identify and flag activity that could suggest 0:18:43.480 --> 0:18:47.840 criminal behavior like drug trafficking, human trafficking, or terrorism financing, 0:18:48.440 --> 0:18:50.879 and there are serious consequences for banks that keep such 0:18:50.920 --> 0:18:51.680 accounts open. 0:18:52.800 --> 0:18:55.639 But where Mark is right is all these examples where 0:18:55.880 --> 0:18:58.120 they put a lot of pressure on us and they 0:18:58.119 --> 0:19:00.200