Esther: This is the BusinessMakers show, heard here and seen online at thebusinessmakers.com. This is a special edition o f the BusinessMakers show because it's unlike any other we've done. We're here at PKF Texas, Doing Business Over Coffee, sponsored by The Houston Business Journal. We are here with the 40-under-40 winners, people who have won the very prestigious award given by The Houston Business Journal. There's winners here, there's people who want to be winners here, potential winners, future winners. We've got an awesome audience here, but we've also got a really awesome guest today, who is the cofounder of BrandExtract. His name is Bo Bothe. It's nice to have you on the show, Bo.

Bo: Thanks, Esther. Appreciate.

Esther: Yeah, good to have you here. So what exactly is BrandExtract?

Bo: We do brand development and brand strategy. What we do is we help companies kind of define who they are, what they do, and where they're headed with their companies, and then we help them market it and promote it to the public.

Esther: So you're an advertising agency, or you're more than an advertising agency?

Bo: Little bit more than an advertising agency.

Esther: Okay, like what exactly is more? What does that mean?

Bo: Well, what we found over the last couple of years is everything needs to work. We call branding really everything your company is, and what we've been able to find is - a company will ask us to do a web site, and we'll say, "Well, what do you want it to do," and they'll lay down on the couch, and they'll say, "Well, we have employee engagement issues," or, "We need to market this new product," or, "We've lost our audience," or whatever those things are, and we really had talked to them about where their business is headed, what the true value of the business or the product is, and then we help promote it, market it.

Esther: So we're here in front of a live audience - [Cheers, applause] - I want to just quickly mention that - and you are actually a 40-under-40 past winner. Is that correct?

Bo: I am.

Esther: It takes a lot to be 40-under-40, a CEO, a co-founder of a very successful company - what does it take? How did you get here?

Bo: I think first I have to say - my dad was an entrepreneur. I didn't realize this until I was doing a lot of speaking in the last couple of years. I was always sitting in his board room. I was always listening to what was going on. I've never really been uncomfortable in a room. And I always had a vision of what I wanted to do with my life, and part of that was owning a company, and part of that was employing people and being responsible to help take care of them and do good work and do good work for clients, and it's just always been a goal. I never really thought about doing anything else other than running my own business.

Esther: So how did you start? What was your first job?

Bo: Oh, my first job was mowing lawns, and then -

Esther: That'll help you in advertising.

Bo: No doubt. You have to walk down the street and put little papers in people's mailboxes. But after that, I've pretty much worked all my life. I worked in my dad's warehouse, waited tables, I worked at Dillard's through college, and then, after that, got jobs with great people - a couple people here from Savage, Paul Savage is one of my mentors and was a pretty amazing person to work with - and then, from there, started my own gig with Jonathan.

Esther: So you founded this company, but it didn't just kind of come together. It's not like you started this company, and then it started growing, and that was it. You guys have gone through a lot of changes - I've heard about this - over the last couple of months. Can you tell us a little bit about that?

Bo: Sure. It's really even over the last five years. When I went out on my own, I went back and got my MBA from Rice. I was a graphic designer and decided, "I need to button this up a little bit. If I'm gonna run a company, I really need to understand a little bit better how to make it work." And so, while I was starting my own business, I did that - merged with Jonathan Fisher, Fisher Creative, we created BrandExtract five years ago, little over five years ago. A year after that, we integrated in a interactive development firm, and that was an interesting deal 'cause all of a sudden we were a software company, which was a kind of neat thing to do, and then, after that, in the last year, we added Parker Hayden, merged with them last year - seven-person advertising agency and kind of creative firm - to really manage our creative group, and so we've got multiple disciplines and a lot of different things, so it's been really interesting integrating different cultures, integrating different ways of doing business, and making those things work together.

Esther: So give us an example of helping a company from A to Z, from beginning to end, the way that's kind of been your strategy, to grow.

Bo: Well, one of the focuses we have is mission-based branding, the idea of, "Who are you, and why do you do this?" One of the things that really caught me and my MBA experience was - a mission should really - it's the thing that gets you up in the morning, right? What do you really do? Ours is to help people grow. It's not to go do creative, cool stuff. So my job as CEO is to make sure that my people are growing every day, make sure that my business is growing, make sure that my clients are growing - so that's kind of the baseline for everything. So we'll help our clients define that - who they are, what their values are, what really means a lot to them - and then where their products fit. What do people really buy? And so we'll do positioning of products, positioning of different elements in their portfolio - and then, at that point, we'll develop the marketing materials and the messages and things they need to take over the marketplace.

Esther: So you mentioned merging with Parker Hayden. What is the difference in having these two companies? Like, how was it before and how is it now?

Bo: Every time you merge, acquire, do any of that kind of stuff, it throws everything on its ear, and you kind of have to figure out what the best pieces are, and I think -

Esther: Has it been a challenge at all?

Bo: It's been a challenge. Culturally it all worked. I think we have a really strong culture, and so any time the new group would go out of culture, our guys would kind of pull them back in, which really worked. We brought them in to really change our culture and to really change things about the company, so they've done that, too. They've shaken us up pretty good?

Esther: How has your culture changed? You say you brought them in to change your culture. What was it about your culture before that you wanted to change?

Bo: One of our focuses has always been to be very professional about what we do. There's a business reason for why people market. They don't want to just spend money to do cool stuff. They want to spend money to build their businesses, grow their people, engage their people, whatever. I think we got a little bit too far on the business side of things. We lost a little bit of what it was to be a creative firm, and adding in Mark and Guy and their team really supercharged that. And they're a little bit crazy, they're a lot different than John and I, and they've given us the kick in the pants I think we need to do that.

Esther: I understand that. You mentioned your Rice MBA. How important has that been?

Bo: It's been huge. Honestly, didn't really know why I was going to get an MBA other than change. I always like to learn. I love to read. I love to grow, as obviously the firm follows that. But from a connection standpoint, from a changing-the-game standpoint, from a learning-about-myself standpoint, it was the most incredible experience, one of the most incredible experiences I ever had.

Esther: So we're gonna wrap up segment one right now, and we'll be back with more with you right after this. You're listening to the BusinessMakers show, heard here and online at thebusinessmakers.com. [Applause] We're back with the BusinessMakers show, heard and seen online at thebusinessmakers.com. We're back with Bo Bothe. He's the cofounder of BrandExtract. Welcome back to the show.

Bo: Thanks.

Esther: So you've been in business for five and a half years. Is that correct?

Bo: Correct.

Esther: Has it just been as easy as you're making it sound, or have there been challenges along the way that other people can kind of relate to?

Bo: Well, obviously, other than all the changes that we keep making to the company, the economy's been a challenge, and I've got a really interesting story about culture and people. We're very much an open-book management company. I mean, we share everything we do at the end of the year with our company, during the year, what's going on. Financial crisis hits - economic hurricanes, all that stuff - and we made sure our people were taken care of. We did all that. We got to Christmas, and there was - and we had some money, but we could see the cliff at the end of 2008, and we thought, "You know what? We're gonna still - let's give out bonuses, let's take care of 'em, let's do what it was," and really everybody was wiped. There weren't a whole lot of thank-yous and happy-happy and all that. It was kind of weird - as a business owner, I was thinking, "We've done so much - all of us, them included - why aren't we a little happier?" But we got into January, and we saw what was gonna happen, and we had a meeting right a the beginning of the month, and we said, "Okay, guys, look. We've done all we can from a cutting standpoint. We've worked so hard to keep the team together, and we've watched our competitors, we've watched our peers in the industry, have to do this kind of up-and-down thing that their businesses have always done," and we didn't want to have to do that, and so what we did was we said, "Look, you're a bunch of creative people. Help me figure this out. Come back to me with ideas," and, to a person, they all came into my office, right at the end of January, and said, "We all want to take pay cuts."

Esther: Wow.

Bo: And I've never - it was an experience, it was a really interesting deal because - sometimes you just don't think that your people get it or that they understand what's going on, and they completely got it. And we didn't have to take the giant step back that a lot of companies normally do. And it was really on them. They made the choice. I didn't have to make - I had to make final choices, and unfortunately we lost a couple people along the way, but we were really able to keep our core team together, and I think that was - in the last year, there have been some residuals from that, trying to get their pay back up, do the different things trying to come out of that, which have been a challenge as well, but I think that was - it was an interesting thing to see how - we for three years, four and a half years, tried to build this culture to where everybody worked together, and it actually paid off.

Esther: Well, that's a really amazing story, and it's something I personally have never heard - of a group of people approaching their boss and saying, "Yeah, we want less money." So it's pretty spectacular. What do you think you've done to kind of impart this culture in the people that work for you? Because it sounds very special.

Bo: Well, I think a lot of it's just being open. "Here's what's going on, guys." Being direct, being honest. There are times when maybe I haven't been as open as I should have, but our company is - we are focused on helping people grow, and I think the guys get that. The last year and a half have really been a challenge in making sure that they could because I haven't had a lot of the resources to be able to help, but they've helped themselves, and I think that's a pretty interesting deal.

Esther: So as a business leader, how do you grow personally? Because in order to impart these values and to help your people get better, you yourself have to get better, so other than obviously getting an MBA at Rice, which helps significantly, what else do you do?

Bo: Well, I think there are a number of places - I coach all my kids, so I learn a ton from them about teamwork and how to get them to do things that they don't think they can do and how to motivate them. I've got four kids, a beautiful wife, Heather - we've been married 18 years. She's constantly pushing me to do better, do better, do better. I'm constantly thinking about, through my kids, how can they go do more with their lives. Just outside - Bethany Haley, who I used to work with at Savage -

Esther: - who's also a 40-under-40 winner.

Bo: Yay. She and I were talking about our businesses. And that's the kind of thing - showing up to these events and talking to a couple of people - networking's not just about walking around and shaking hands and doing those kinds of things. It's about understanding different people's businesses, how they operate, and what could make your business better, and sharing a little bit about what could make maybe their business better.

Esther: Now back to your business, specifically - you've got all kinds of departments now in your business. You've got the advertising and the marketing, which we've kind of touched on, but what about the PR portion of it? How, in a local market like Houston - I guess my first question is - are a lot of your clients local?

Bo: Most. Most.

Esther: So how do you kind of get out there in this super-saturated market and get your message heard?

Bo: The buzzword, social media - that's just technology. The reality is, good marketers get out and meet people, and they're authentic, and they share, and they talk about what's going on - and I think we do a lot of good work in the community. We're aligned with the Rice Alliance, we're aligned with Crystal Ray. Part of those are strategic. We're very focused on our brand alliance being around education, doing good with kids, business and entrepreneurship, so we hang out around those places, but it's places that we enjoy to hang out, and so we're really just getting out there. We don't do a whole lot of advertising, we don't do a whole lot of paid, which I think as our business grows we're gonna have to do more and more of that, but really we're just involved, and I think that's a big part of what's been successful for us. People just see us everywhere.

Esther: What advice would you give to somebody who is maybe out in the audience listening who has always dreamed of starting their own agency and has no idea - or that they're working for an agency now, wants to go out on their own - what are some of the things they can do to get to where you are now?

Bo: Well, I think having great support is huge. My wife pushed me out of the nest and said, "Go do this thing. You really want to do it." And I did it. I think - I've got a million stories.

Esther: Tell us one.

Bo: We were remodeling a house, and I stripped everything down to the studs, and I couldn't get the bathtub out. I couldn't figure out how to - the gas and the plumbing - "Is there - how can I - what do I do?" And I call a plumber, and he comes in with a hacksaw, hacks it off, takes $50.00, won't even carry the thing downstairs with me, and I spent a week staring at this thing trying to figure out what to do, and my wife pregnant out to here - it was a nightmare - and the reality is there are always unknown unknowns that you're afraid of that you shouldn't be. You just have to figure it out. So one of the things - the MBA, the experience at Rice, and some of the people I worked with - they kind of pushed me to learn a little bit more about myself, my business, when I was ready to go do it, but I think the biggest thing is being afraid of the unknowns. That's the biggest hurdle I think you have to overcome.

Esther: So once people get over that fear, once people take that leap, where do they go?

Bo: Make a list of all the people you know, and start calling 'em and telling 'em what you're doing. I found that - when I was a kid, I really wanted to play professional football, and I told everybody that I was gonna play NFL football, until my focus changed.

Esther: Well, you're - in all fairness, since people can't see you - you're a tall man.

Bo: Yeah, I always thought I was really small, but it's one of those things. [Cheers] Thank you. Thank you very much. But I think the big thing there is - I made it real in my head, the whole kind of golfer looking down the fairway seeing where the shot was gonna be. You practice in your mind constantly - "Where am I gonna be?" - and then tell people. You can't be bashful and do it. You have to let people know, "I'm doing this. I'm doing this." And if you fail, it's okay. You learn a ton, and you move on to the next thing. And I think that's one of the things that - you asked about the MBA - this is all about options. Life is about options, about putting yourself in a position to do more. The same thing - I tell my kids that all the time. This is about putting yourself in a position to have a choice to do some other things next time, not just to achieve that goal. So what's after that? What's after that? My dad always told me over-committers are over-achievers. It's gotten me in a lot of trouble in my life, but it's also made me push, push, push, and it's a neat deal.

Esther: Well, thank you so much for being here. It's really been a pleasure. And we're gonna actually come back in segment three, and we're gonna have some questions from the audience. How about that?

Bo: Be great.

Esther: You ready for that?

Bo: I am.

Esther: From the peanut gallery?

Bo: [Laughs]. Thanks.

Esther: You're listening to the BusinessMakers show, heard and seen online at thebusinessmakers.com. We'll be back with more with Bo Bothe after this. We're back with the BusinessMakers show, heard and seen online at thebusinessmakers.com. I'm back with Bo Bothe, the co-founder of BrandExtract, and now we're gonna take a couple of questions from the audience, after listening to Bo and hearing all the kinds of the interesting things that he's working on right now. I know a lot of people are wanting to get in there and ask you some questions, so our first question I believe comes from Bethany from Savage, correct? Works for Savage, and I believe you guys have worked together in the past. In fact, her name has already made its name into our interview, so welcome to the podium, Bethany.

Participant: We have, and we're good competitors 'cause we do talk about business. Anyway, my question is, do you have a formal advisory committee, or do you seek advice specifically from your clients or vendors, or where do you go to as a business owner for that type of advice?

Bo: That's a great question. I think - we've talked about forming a formal group. Right now it's more informal. I've got our attorney Bill Boyers - really good at giving me advice about the business and what's going on - my dad, Al, is great at doing the same thing - but we're always talking to our clients. We're always talking to them about, "What can we do better? How can we do better? How did we do?" Jonathan, my business partner, is great at, at the end of it, going, "Hey, guys. What did you think? How is this working?" But then, in other cases, once a month, I'll take three or four of my friends, clients, advisors, to breakfast or lunch, and I'll say, "Okay. Here's what's going on in my business. How could I make it work better?" I think, as we grow, formalizing that would be great for us and make it work a lot better, so it's a great question. It's something that we're always looking at, getting great feedback.

Esther: Now I've got Mark Nathan up from Chai One, vice president at Chai One.

Participant: Bo, how do you teach your more conservative clients about the value of creative?

Esther: Great question.

Bo: That is a good question. We've really focused on working out tools and things to show them how things work. I think that that's the biggest deal. It's really less about talking about the creative itself. That's gonna work. Good design is good design, and good creative is good creative. Good communicators are good communicators. The reality is - what are your business goals? What do you want to get? And I think we do a really good job of tying in - "Here are the five or six goals that we set at the beginning of this," and painting the picture of how we're going to achieve those goals with these specific things. And many cases, we're not just doing what they tell us to do, we're going in and we're saying, "No, no, no, may not need that. Let's not invest as much in that. Let's invest in this and make that work." And so that's been at least our approach, to the point where I'm building spreadsheets and performs of where they want to go from a marketing standpoint, which is a little weird for a designer to be doing, but the Rice thing's paying off, I guess. [Laughter] Thanks.

Esther: Brandy McDonald, up on the mic. And tell us your company's name, Brandy?

Participant: I'm with Newmark Nightfrank. So, Bo, do you watch Mad Men?

Bo: [Laughs]. I do.

Participant: Okay. Help separate truth from fiction. Is it really Don Draperesque, or is there a different side to your industry? Drinking all day? Smoking cigars?

Bo: Woo! We're all over it. Other than happy hour on Friday afternoons. I think the funny thing about that - and I've thought a lot about that - I typically download the episodes because I can't watch 'em with the kids and whatnot, but on planes, and I'll be watching it - there's a lot to that show about our business that's true, where Don Draper walks into the department store and he tells everybody, "Hey, all this needs to change. You need to - that woman's gotta go, she's too old. You need to realign all this stuff" - that's really a lot of what we do. I'd love to say it's a lot of martini lunches and all that kind of fun stuff, and my wife would hate to hear that, I'm sure, but the reality is - if our kinds of companies are doing the right kinds of things, they're going in and changing the business. They're going in and saying, "Okay, if you say you want to be fast, and I see something that's not so fast. I need to be able, from an operational standpoint, to say, "That's not working, and you need to change it." I think, from that show, while I love it, and I know it got a little bit too high level about the show, but that's one of the amazing things about that show, is it kind of shows how an agency really should work on the work, not how it works really in the background.

Esther: Got it. Gorav, the president of Chai One, up on the mic right now.

Participant: Bo, first of all, thank you for being a friend of Chai One. Really appreciate it, all the support and advice you've given over the years.

Bo: Sure.

Participant: We have grown from four to 22 people in the last year, and so we bring people from lots of unique backgrounds. I know that BrandExtract has bought or merged with other agencies in the last few years. Talk to me a little bit about how did you manage to bring those cultures together?

Bo: I think the biggest thing is we've got a really strong culture itself, so it self-regulates, so when a new person comes in, the team - I don't have to go in and say, "No, no, no, you can't do that." The team does it, which really helps a lot. I think the other thing is we're always talking about our culture, and people call me out constantly. They're always telling me, "No, no, no, Bo, that's not the way. Don't shut your door like that," or, "You're walking around grumpy all day. Don't be like that. You're kind of making things run, here." But they have - we've given them permission to come and talk to us, and I think that that's helped with the integration. I think the other piece of the integration is that I've got a checklist of all the mistakes I've made, so any time you're ready to do any kind of integration work, call me, and I'll e-mail it to you. But the reality of that is, I think, preparation, really being open - anybody you're talking about bringing in, especially if it's groups of people, you really need to be honest and say, "I don't like the way this is working," or, "I don't like the way this works. Can you explain it to me?" And if they' can't explain it, that's a red flag. If they can and it makes sense, it's time to move on. So those are some of the ways to handle that.

Esther: Ann, can you tell us the name of your company?

Participant: Hi, yes, I'm with McCord Development. I've got a question for you. Team members are obviously such a critical component to the success of an organization. How do you motivate your team members, and how do you challenge them to be the best?

Bo: Honestly, the last year's been really hard to do 'cause we haven't had money to do it, so what we've decided is we've given up, and we've opened it up to them. They do cultural stuff, they set it up, we go build houses for Habitat, we go box lunches at the food bank. They kind of control what's going on day to day in there, so we give them a lot of the control, and that helps. I have to sometimes rein it in, but, again, back to Gorav's question, the culture's kind of running itself now, which is really good. The reality from a motivations standpoint is - I just can't be a downer. I gotta walk in every day with a smile on my face and be ready to go, and they typically kind of regulate it and make it work.

Esther: And you're with Top Spot?

Participant: Yeah, Veronica with Top Spot Internet Marketing. Hi. As somebody who's just getting started in my career and is someone who's in a position, as you are, to hire and bring in new talent, what are some skills that you really recommend we develop to become an asset to our companies?

Bo: Oh, wow. Actually that's a great question. We talked to our guys a lot about it today. Paula Savage told me one time, "Don't bring me problems. Bring me solutions." And I think that that's the biggest thing that I as a business owner am looking for, is someone who's gonna bring solutions to our clients, someone who's gonna bring solutions to me, someone who's gonna see something and - they may not have to do it, but they're gonna come in, and they're gonna say, "Hey, I see this problem, and here are two or three ways we might solve it." Those may be the craziest, nuttiest things and not ever work, but the reality is we're bringing me opportunities for my business, and that's huge, and it's the same thing with clients. Don't just take notes in a meeting. Participate. Participate might not always be talking, but participate can be, after it, taking really copious notes and looking at it and talking to the partner or the person you're working with and going, "Hey, I saw these things. How do we address them?" But the reality is - if you're pushing out solutions, you're pushing out ideas all the time, you're invaluable because a lot of people don't do that.

Esther: Maybe being self sufficient, someone who can solve their own issues and not have to be supervised all the time.

Bo: Correct. I mean, and that's a big part of it, but also let's push beyond that. Let's be beyond just taking care of myself and let me bring you ideas to make things better.

Esther: Tell us your name and who you're with?

Participant: I'm Arianna McNire, and I'm with Williams, and you had mentioned earlier fear of the unknown and dealing with that, and I'd be curious to hear how you handle change because businesses and the economic environment - everything in our operations and daily lives is constantly changing, and I think sometimes people fear change because it's an unknown. How do you recommend dealing with the unknowns and change within your company and your life?

Bo: How do I handle it. Our director of interactive, Malcolm Walter, is a great guy, and he's very black and white. He's always got a plan for stuff. And I think that's the biggest thing, is having a plan. It's never gonna work. You can plan - it used to be you could set a corporate plan for the next ten years, and today you can set a corporate plan for a day. But we've got a five-year vision, and that vision may change, but at least I can keep my eye on the star and try and keep the boat in the right direction. You know what? I tell everybody my goals. I tell everybody what I want to achieve, and they help keep me on it. They're constantly saying, "Wait a minute. Weren't you gonna do this?" Just kind of like what I was talking about with the pro-football thing - "I'm gonna be a professional athlete. I'm gonna be a professional athlete." I'm gonna get that constant feedback, and I think that helps you stay focused 'cause you kind of move on to another thing and you forget what you were really supposed to be doing, and I think that that helps, and then having a good support system - Bethany and I talked about that earlier - having a good support system is huge because they're always giving you feedback, and not all of its happy, but at least it says, "Okay, do I have my eye on the ball? How am I gonna handle change?" Because you're right, it's inevitable. Something is gonna drop right in your lap, and it's not gonna be what you expect, and how do you handle that? And I think that that's - grace under pressure really is more preparation than it is the stoic, "I can handle anything" kind of deal.

Esther: I read an article yesterday, and the headline said, "Your plan A wasn't that good anyway."

Bo: [Laughs]. Yeah. Right.

Esther: That was what the article was called. So that kind of makes me think of that. Don't always focus so much on staying the course, but if something comes up, a roadblock or whatever, learn to go around it.

Bo: Right. Right.

Esther: Well, I think that takes up all of our time today. Thank you so much, Bo, for being here. We really appreciate it. It's been very informative and interesting.

Bo: Thanks for having me.

Esther: You're listening to the BusinessMakers show, heard here and online at thebusinessmakers.com. [Applause]