Episode 239 – Lessons Learned from Matt Sweetwood CEO of LUXnow
Rob Shallenberger: Welcome back to our Becoming Your Best podcast listeners! This is Rob Shallenberger. I hope you’re having a fabulous day or week, wherever you’re at in the world. I have a fun and intriguing guest with us today. And just before we jump into our conversation, one reminder, one piece of admin: if you haven’t already taken the personal productivity assessment, go to becomingyourbest.com, take the personal productivity assessment, and you’ll get a great baseline on where you’re at in several different key areas. So, I know I mentioned that recently in another podcast, but just a reminder, admin-wise, becomingyourbest.com – take the free personal productivity assessment, and it’ll be pretty fun to see your results on that.
Rob Shallenberger: Alright, so, with that out of the way, let’s jump in! I have with us Matt Sweetwood, who is the current CEO of LUXnow. Let me give you just a little brief background on him, and then we’ll jump into the conversation here. Before Matt went to LUXnow, he spent 29 years as the CEO of Unique Photo – and during that time, he took them from $1 million of annualized recurring revenue to over $100 million; obviously, a huge deal there! He’s also the author of ‘Leader of the Pack’ – the number one bestseller in the self-help category. The book tells the story of how he suddenly became a single father to five children – which I want to talk about that – which ultimately made him a better person, a better leader, entrepreneur, and, as you would hope, a parent. So, first of all, welcome to the show, Matt!
Matt Sweetwood: Hey, thanks for having me! I appreciate being here!
Rob Shallenberger: This will be a fun conversation. He and I were just talking prior, too, and I mentioned there’s a very wide swath of leaders all over the world who listen to this – and by leader, you know, everyone is leading their own life, at a minimum. I mentioned that some people are CEOs in large organizations, other people are stay-at-home parents, you’ve got employees at every level of organizations – just a really wide swath of people on here. And so, I think what Matt has to say will resonate across the board, no matter what you’re doing in life right now, where you’re at, whatever you’re doing. This is why we had Matt on the podcast, because I really felt like he would resonate. So, I mentioned this book, “Leader of the Pack”. You wrote this best-selling memoir about your leadership journey, Matt, and how suddenly becoming a single father to your five children, made you a better leader. So, can you touch on that for our listeners who haven’t read the book? Let’s just start there, because my feeling is this will give a good insight into who you are.
Matt Sweetwood: Yeah. And, you know, I think the point you made about what we’re going to talk about appealing to a wide variety is really important. I speak a lot and a lot of times they’ll ask me – actually, it just happened yesterday, they said, “We have an event where we’re going to have spouses, not just the business people.” And I’m like, “Yeah!” Because leadership is, really, about everything you do in your life. Like you said, some people lead their own lives. And in my case, I was in a situation – we go back to the ’90s, here, in the States – I was a father going off to work, bringing home the bacon, mom was at home taking care of the kids, we had this big family, sort of the ‘American Dream’, as people would phrase it. And it was really kind of an illusion. And the end result was I ended up being a single father, having to take care of these kids when the mother walked out – I talk about it in the book “Leader of the Pack” – and what that happened to me.
Matt Sweetwood: And I think the ultimate lesson from the book is self-responsibility, it’s self-reliance. And, ultimately, you know, you’re responsible, it’s your personal responsibility for getting into these situations or the decisions you make, or everything that happens in your life. And the book talks about how I sort of got over feeling sorry for myself, got over anger, got over blaming, got over all of these things, and learned to lead myself to a more successful place. And once you learn to lead yourself to a more successful place, you’re likely to lead other people. And I think, really, at the highest level, without digging into details, yet, in the book, that’s really what it’s about. It’s really about the principles on personal responsibility, and how you, yourself, no matter what happens to you, you can do things to push yourself forward and find positive results.
Rob Shallenberger: Yeah, so, let’s talk about that a little bit. I mean, when your wife walked out on you, I imagine, with five children, that there were a lot of emotions that went with that. Of course, everybody listening to this knows someone who’s been through something similar. And that’s a pretty tough thing because, in our mind, we have, like you said, this image, and suddenly, that image is shattered. So, I’d be curious to see what’s in the book. What are some of the big things that you touch on in the book?
Matt Sweetwood: So, when that happened, my kids – we’re going back now 20 something years ago – but my kids were 18 months, still in diapers to eight years old. I had no clue how to be a parent. The thing that I also talk about in the book is I was 300 pounds, I’m five foot 10, I was out of shape. My business was also failing at that time. So, I had all of this stuff. I was scared to death, I had no idea how to parent, I was all of a sudden thrust into a crazy divorce, trying to save my kids, trying to save myself, save my business. I was scared. I thought I had a jail sentence, should I run? What should I do? It’s that moment – and there were many moments like this – when you realize that you did things to cause this to happen, this is your fault, which means that you have the ability to fix it. And you just build your way out of it one by one by one. You fix this, you fix that, you find something to be courageous about, you do that, you gain a little bit of courage, your fear goes down and you sort of just keep building and building. And, for me, the driving force in all of this – and this is a driving force in leadership – is ultimately just wanting something bad enough. And I just wanted to succeed and get out of the situation bad enough. So, for me, that really is what propelled me forward.
Rob Shallenberger: You know, it’s interesting you mentioned that, Matt. I don’t know how much you know about Becoming Your Best or the books we’ve written or anything, but our first book was called “Becoming Your Best: The 12 Principles of Highly Successful Leaders” – there’s these 12 principles that you see over and over in the very best. And number nine is, ‘Be accountable’. And it’s amazing how liberating that principle is, and it’s something that we all experience to different degrees at different times in our lives, where we have to face up and own our circumstances, own the things that are happening. And that’s not easy to do. That takes a lot of emotional courage to step up and say, “You know what? A lot of the reason why that happened was on me!” And I’m just observing you, here, as you’re talking. When we do that, it’s very empowering for people, isn’t it? Because otherwise, what’s the alternative?
Matt Sweetwood: The alternative is you’re waiting for people to help you, for somebody to step in and help you. And usually, it doesn’t happen. If it happens, it doesn’t really advance your cause. It’s a band-aid. Ultimately, you have to fix those things. And I think your phrasing of it, ‘being empowering’, is really brilliant! Because that’s what it is: once you realize that you have responsibility for what happened, you have responsibility to fix it. That’s it! You now have an action plan. You’re like, “Okay, I have to do something. I’m not waiting for something that I have no control over.” You sort of gain control. And that’s what is empowering about it. And it’s fundamental. All successful people take responsibility for what happens in their life.
Rob Shallenberger: You know, here’s probably the easiest, the most baseline example that everyone can relate to, whether it’s a spouse, or whether it’s a coworker or someone else – let’s say that person offended us and we’re like, “Well, I’m just gonna wait for them to apologize because they owe me an apology!” You know, that apology may or may not ever come, like you said. Versus when we own it and take action, it’s us stepping up, I’m gonna say, “You know what? I’m gonna take the high ground here! I’m gonna be the one who apologizes if necessary” – or whatever it is. That’s not easy to do in a lot of cases. So, I love that. I’m excited to read your book and hear more about that experience! So, let’s shift gears just a little bit if that’s alright, Matt, because I want to talk about the business side of the equation a little bit, and your background there, because you spent almost 30 years as the CEO of a brick & mortar camera store that you took from $1 million annual recurring revenue, up to $100 million, I believe.
Matt Sweetwood: That’s right!
Rob Shallenberger: So, let’s talk about that. Obviously, that’s great growth, that’s a big business, especially back in the brick & mortar day. Things have changed now, which I want to also talk about. But talk about that experience over the course of 30 years, if you don’t mind.
Matt Sweetwood: Yeah, yeah. So, you know, when you say it like that, I guess the vision you get is this linear – this might be bringing out my math background now – it looks like a line with a 45 degrees slope. Just kind of nice, smooth, straight line where you go from one to 100, right? But it didn’t really work like that. And we were only a camera store, at the end of the story. The beginning of the story when I walked into the company is we were a B2B business. We were selling film, so you can imagine where we are today, right? Because I left that company only a few years ago. They had no film left. So, the first thing that happened was our B2B business came under attack. We were selling small stores – we were selling drugstores, we were selling camera stores, one-hour labs, things like that. We were selling them film. Now, back in the late ’80s, early ’90s, when the first storm hit my business, all those little stores started to go away. The big drug chains came in and were buying up the drugstores, the camera stores were being challenged by the big box stores, like then Kmart, Walmart, Target, and so on. So, we had to pivot our business. We pivoted it to the B2C model. We started selling photographers. Very successful at that – we became the largest seller to professional photographers in the country.
Matt Sweetwood: In fact, my company, around the turn of the century, I think we had like a five share – 5% of the rolls of films sold in the United States went through my company. And then, as we went through the 2000s, digital photography came out and that business went away so fast! I tell this amazing story of being in the CEO’s office at Eastman Kodak company. I was talking about a smooth line – that was supposed to be the smooth line decline of film. Well, it fell off a cliff in 2008. So, our five share went to a nothing share. We almost went out of business. All the camera stores in the country, except for a few hundred, almost went out of business. So, we actually pivoted the business and opened a camera store. But I changed the way camera stores were run. And we ended up having one of the most successful stores in the country. And, in fact, essentially, every camera store that operates today operates off that reinvented model that I created. So, my story, or going from that one to 100 is not this linear line where if we worked harder, we’d just keep growing and growing. We have areas where we almost fell off a cliff ourselves, and it required continuous reinvention of the business to be successful. And that’s something also I talk about when I speak, is that, if you’re in business today, you’d better be looking to reinvent your business all the time.
Rob Shallenberger: Well, we see that right now with COVID sweeping the world. There’s two kinds of pivots: there’s the strategic pivot where an organization well ahead of time goes through strategic planning and tries to anticipate pivots and plan for them and be the disrupter, and then there’s a forced pivot – and a lot of companies right now are in a forced pivot. Look at the education world! Do we go back to class or do we not go back to class? Do we go online or do we not go online? Or, take the education, again, as an example, they’re in the spring, and suddenly, they say, “Alright, all students go home – and I know that all districts didn’t do this, but for ours they did – we’re going to do the last two months online.” Holy cow! If you’re a teacher and you’re the administration, you’re trying to pivot and say, “Well, how do we take all this stuff and do it online?” That’s a forced pivot. And I think COVID has done that for a lot of organizations right now.
Matt Sweetwood: If we take the fact that we’re in an election year aside – and, you know, anything that happens in an election year is always about the election – you have to view that in the scheme of what you’re doing. But education, here’s what I would argue with. I would make the point that education was challenged already. As the cost of, particularly, college education continue to go up and up, you know the generation that’s coming down now looks at college differently than, let’s say, I did in my generation or my kids did even in their time – my kids are all in their late 20s, early 30s now. So, people were looking at education, and were saying, “Do I need that $250,000 education?” So, I always knew COVID has kind of like put that last really, really big show. So, I even think now that, as we come out of this – because obviously, COVID will end – will college be the same? Will, people go back as much? I don’t think so. I think that this has fundamentally changed college. So if I had been in a university setting, just having come from businesses that undergo these major cataclysms, you’re always wary of this. Probably they should have been looking to change their business model years and years ago, as they saw this attitude decline or change in the way it looks at business. So, I view COVID as another change. So, when we come out of this, who knows what’s going to happen? Harvard, they’ve already announced that next year’s classes are going to be online. They’re still charging the same tuition, I might add.
Rob Shallenberger: I agree with you, though, Matt! It’s going to forever change things. And that kind of goes back to my comment. You know, it’s either a strategic pivot ahead of time – and some businesses will do that, but usually very few do – and it takes a forced pivot to force someone over. Take your photo business, for example. You mentioned how many people went out of business. Well, what primarily did that? It was the advent of the cell phone. You suddenly have a camera in your hand as part of your phone. And most people aren’t able to respond to that successfully. You can see that across industries right now, people are thinking, “Man, how do I keep my business in business?”
Rob Shallenberger: Let’s build on this point because now, you moved over from that, you moved over now to what is LUXnow. So, this is kind of a great segue to the other question I had for you. You know, you transitioned over to CEO of LUXnow – it’s a luxury travel platform, primarily an online business. So, that’s obviously one of the big pivots. Brick & Mortar, by nature, has just seen a massive decrease – whether it’s retail, whatever it is – Amazon being the king disruptor, the Deathstar. Across the board, I mean, Brick & Mortar, by and large, has taken a big hit over the year. So obviously, a big shift online. So, talk a little bit about, you know, from your leadership management perspective, what are the big changes in that? What has that learning curve been like for you, if you don’t mind? I’d love to hear your perspective on this.
Matt Sweetwood: Yeah. So, I mean, when I was at my electronics company, when I was at Unique, we obviously had online presence. We were also selling online. And I’m a tech guy, I’ve built tech my whole life. So, for me, being in a luxury field and being in tech was a very natural transition to this company. What I will say is that we’re in the luxury travel business and the travel business is the most affected by COVID. I just saw the unemployment rate is the highest in the leisure and hospitality – it’s almost 30%. So, I pivoted into a business that actually is most effective. But, from a business model perspective, the founders of LUXnow started in a Brick & Mortar business. They actually had luxury retail showroom, so to say, where you could go in and you would see a Ferrari or a Lamborghini or they would have access to a luxury home, and you’d be able to rent it right there. But the only way to scale that business was for them to buy more inventory. They had to keep buying inventory at risk and so on.
Matt Sweetwood: Now, we move to the gig economy, the marketplace economy – LUXnow is a marketplace. We have people who own luxury assets like homes and autos and yachts, they list their properties just like Airbnb, and on the other side, you have renters looking for luxury. And we’re solving the problem of the fact that it’s very, very hard to find luxury as you travel. No platform, no institution, no company specializes in this. So, the internet business, the gig economy, the marketplace economy, whatever you want to call it, is actually perfect for something like this. So, even though we’re a little bit hurt right now, because obviously, people can’t fly, they can’t do a lot of things very easily, eventually, this will be the way that travel is done. This is the way that you operate. It’s a business that really is a service layer on top of technology, which, to me, is really what the future is about.
Rob Shallenberger: That’s a great comment, really, because it’s a win-win for so many people involved. You’ve got the one group on one hand that owns the asset, you’ve got the other group on the other hand who doesn’t have the supply, but there’s the demand. So, those two groups of people come together – and you see that in Airbnb, Uber completely disrupted Yellow Cab, as an example. So, it’s a great concept. Well, you mentioned COVID. Not an easy time to necessarily be in that because of the airline, the travel, everything that goes along with that. So, it can’t be easy leading a platform focused on luxury travel during this pandemic shutdown. So how do you approach that challenge? We just got done talking earlier about pivots and adjustments. What have you been thinking about? What’s been on your mind as you thought about the challenges that you face now and, of course, going forward?
Matt Sweetwood: So, this is what I always tell everybody when you’re in a business: the biggest mistakes in business are always made by inaction, not by doing something. Sure, we all make mistakes when we take action, but your rate of mistake is much higher when you just kind of sit there. When COVID came down, I just sort of looked at it, and once they started saying, “You know, we may be doing some shutdowns.” I’m like, “Oh, oh”. I thought of travel, I thought of people packed in planes, I saw the cruise industry which supplies a lot of people into tourism taking such a big hit. I said, “Okay, we need to gear this company for lean, low-cost operation and we need to see what happens.” So, I immediately jumped out of our lease. I moved our company to working from home at least a week and a half, two weeks before they mandatory made everybody work at home. I had immediately reduced advertising costs, reduced a lot of discretionary expenses, did a lot of things that put us so that we didn’t get behind, we didn’t get too far behind. We set up communication. I had my staff working from home.
Matt Sweetwood: As soon as I realized that the shutdown was going to be for a longer period of time, I turned to my tech team, we immediately went full-out work to replace our website. The website needed a replacement, it was sort of like a placeholder. It needed a replacement and I couldn’t do that if we were booking a lot of business, so I was able to quickly pivot and put resources into there. We launched a new website, actually, about two and a half weeks ago, because we worked on it while there was very little business. We reduced our expenses. In fact, I just saw my p&l. Here, let’s do some CEO stuff. I saw my p&l, I looked like a genius, because we actually showed up profit last month, because I have reduced expenses so much. Even though our bookings were very low, we have put our company in a position where we can continue on. It makes me look like a genius. I’m not. It’s just one of those things where I have just been on the earth for so many, many decades, that I just knew that we had to take the more drastic measures. And so, that’s really my point. When you sense crisis like that, just sitting and waiting is almost always a mistake, it always leads in. So, I jumped in and took very, very aggressive action and I put us in a case where we’re going to be able to weather this, continue to build that marketplace and platform slowly, and then when COVID ends we are going to be ready to roll really quickly and we won’t have burned up all of our resources and money.
Rob Shallenberger: Yeah, that’s fabulous! You’re about to get me to go on a diatribe of things, but I’m going to resist that temptation. I love everything that you just said, and I’ve seen this coming for years. Whether it was in the form of COVID, or something else – there’s a book called the Fourth Turning, and many others. And we could talk about this, I’m sure, for a long time, and all of our opinions that go along with it, but I love what you just said there about getting lean, getting focused, reducing overhead, getting low-debt structure. I just hear people out there that say, “I’m going to maximize my leverage, maximize my reach. And we’re going to move into this big new building.” And I’m just thinking, “Man, that’s great as long as things are great.” But things aren’t always going to be great. So, as a business leader, I totally agree with you. It’s not just the top line, it’s the bottom line, it’s the profitability. Cost control is as important as the top-line revenue.
Matt Sweetwood: Pivot that to personal, to people, too. When you’re in a situation where your income looks like it’s going to decrease, cut your expenses. Don’t get that credit card bill that when you look at it, it’s going to give you a heart attack.
Rob Shallenberger: Yeah, going out and buying a brand new iPhone when you don’t have any current income. Again, you’re luring me in here to go down this path – credit card debt, everything else, eliminate debt, savings, buy certain assets to protect against hyperinflation, deflation. So many things we could talk about! They’re all principles that are good, Matt! You brought up some things that are important for all of us to think about. So, as we’re getting ready to wrap this up, if you wouldn’t mind, do me a favor. I’d love to hear from your perspective: all through life – you mentioned you’ve been around for decades, and so, we all learn a lot of life lessons as we continue to get older. What are one or two of your biggest lessons learned across the spectrum? Business, personal, relationships, anything’s on the table – spiritual, whatever. What are one or two of your biggest lessons learned throughout your life?
Matt Sweetwood: I think I’m off the verge a little since you really let me say what I want to say. What I learned is that no matter how tough things get, if you just have a little bit of faith, whether you believe in God, whether you believe in the universe or whatever, you made it to this point in life. God willing, you’re not starving, you’re alive, you’re functioning. Whatever will happen will pass. Just do the right things and you’ll come out more successfully on the other hand. But have confidence that everything that happens it’s really only a temporary circumstance. Everything passes, eventually. And the other piece of advice that I would give really relates to relationships. I said, work hard, want it badly enough, and all of those things – that leads to success. But I think something that we tend to overlook is our relationships. And I brought a statement that I can say is that every relationship you have should be adding value to your life, and if it isn’t, end the relationship because bad relationships bring you the bad karma that ensures that you will not be successful. Every single mistake that I have made in my life is connected to a bad relationship of some kind. And this applies to business and in my personal life. So, my biggest life advice – I tell it to my five kids – is make sure that everybody you allow into your life, whether it’s casual, serious, romantic, business, whatever it is, make sure they are positive people adding something positive to your life. Simple as that.
Rob Shallenberger: That’s great! Relationships, there’s a couple of books written on this. I know you already know this – just as a reminder for all of us. Relationships are the single greatest predictor of longevity. And so, I don’t think it should be lost on any of us, no matter what our pursuits are – again, not to get into Becoming Your Best content, I want to stay focused on you – but having roles and goals and a vision and doing pre-week planning and some of these powerful things are what will help us maintain that balance of success stories, whether it’s in the relationships, or whatever other areas of our life. So, I love that comment, Matt! It’s a good reminder for everyone to really focus in and hone in on what matters most. So, as we get ready to wrap this up, Matt, thanks for your thoughts – great thoughts, great things to reflect on. I know that our listeners will appreciate having you on our podcast. How can people find out more about you?
Matt Sweetwood: Okay, I’m easy. Since I’ve been around for decades, an early adopter of social media, I am @msweetwood everywhere: Twitter, Instagram, Facebook, LinkedIn. My website is msweetwood.com and LUXnow is luxnow.com. Go get yourself a Lamborghini, or a yacht, and have a great time!
Rob Shallenberger: Awesome! I love that advice! Yeah, go take your wife or husband on a date. There you go! That’s a good one! That would be fun! And where are you? Are you in New York, Matt? Where are you at?
Matt Sweetwood: I was 50 something years in New York, in New Jersey. Now I am in Miami, the heart of luxury. It’s a perfect place for the headquarters of a company like LUXnow.
Rob Shallenberger: That is perfect for LUXnow. And right now, you’ve got some nice beautiful weather there. A little warm, but beautiful!
Matt Sweetwood: I’m looking at the ocean and I’m thinking about that pool and the 80 degrees I’m about to go into.
Rob Shallenberger: Alright, well, thanks, Matt! It’s been great visiting with you. And, to all of our listeners, we appreciate you. You’re the reason we keep doing these podcasts. And, again, just how we started, I’m going to finish – reminding you to go to becomingyourbest.com, take that personal productivity assessment. It’s great to see your own feedback. And we love collecting this data in this research that we’ll continue to share in the future that’ll have a big impact. So, Matt, thank you so much for your thoughts on the show! We appreciate you! And everyone, we hope you have a wonderful and a fabulous week!