Host Laurie Barkman, The Business Transition Sherpa, talks with Henry DeVries, publisher, writer, and CEO of Indie Books International.
Listen in as Henry debunks a few myths about creating a sustainable competitive advantage in service businesses through niche specialization.
They also discuss the importance of candid conversations in business ownership transition and exit planning to offer valuable takeaways for business owners. Henry shares how he is planning for succession and exit with a focus on growth and value. Defining the legacy and impact a business owner wants to leave behind is a key part of the planning process.
Find Henry DeVries Here:
https://www.linkedin.com/in/henryjdevries/
https://indiebooksintl.com/
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TRANSCRIPT:
Henry DeVries, welcome to succession Stories. I am so excited to be with you today because you’re one of my favorite people.
Shucks, I’m excited to be with you because you help a lot of people with a very tricky topic. Everything changes. How are we going to end this well?
How are we going to end this well? Henry, you are a super connector. You know so many agency owners and I know you’re so well connected in the small, medium-sized business community.
That’s why I think you’re a perfect person to have this conversation. So I want to start by debunking some myths. Let’s talk about myths around business ownership, creating value and letting go.
What do you think are some of the biggest myths when it comes to those two themes?
Oh, one of the biggest myths and I learned this from Michael Gerber, who wrote the E-Myth and spent some time with Michael. And it was that nobody can run it as well as you and that you’re irreplaceable. And that is a myth.
The thing I always remember is a bucket of water. And you stick your fist in the bucket of water and you pull it out. And that’s what it’s going to be when you’re gone.
There’s no real difference to it. But how you plan the exit is critical.
I think you’ve had some advice along the way about creating competitive differentiation. And I think there’s probably a lot of business owners out there that think, well, I’m just going to create something and it’s got whatever it’s got, right? But I think there is a myth out there that finding competitive differentiation can be elusive.
What do you think about that?
Oh, absolutely. So the years 2003, I’m at the Harvard Business School in a program for managing professional service firms. It has been built as for the leaders of the world’s biggest professional service firms.
And I am a solopreneur. I got in to the Harvard Business School through the back door with an essay that began, based on your entrance criteria, you should not admit me to the Harvard Business School. And it went on to say, I’d like you to make a new decision based on the following information.
Not everyone can attend the Harvard Business School. I’m going to be a missionary and share these truths that you have. And we’re in the program.
It’s very intense. It’s 12-hour days for a week. And we’re with the top faculty.
And they hear about my business that I’m creating, which is this marketing services firm like no other. And it’s a services business. And the professor gets right in my face.
Oh, by the way, I was trying to describe this to my teenagers at the time. And I said, well, you have to understand. It’s a room.
It’s like horseshoe shapes that go up. And the professors run around. And they said, oh, you mean like the movie Legally Blonde.
And I said, yes, exactly like the movie Legally Blonde. So I’m in one of those rooms. And one of these professors is in my face.
And he says, the problem, Mr. DeVries, is you are never going to be able to create a service business with a sustainable competitive advantage. And because I was polite and I was raised to respect your elders, I just smiled and wrote that down. But inside me, I was saying, oh, wait, I’ll show you.
I’m going to show you. So I think it is a myth. You can create a sustainable competitive advantage in a service business.
And we can talk about that if you’d like.
Yeah, absolutely. What do you think has been some of the keys to your company success or clients that you’ve observed?
So I run a business called Indie Books international. We help agency owners, strategic consultants, business leaders market with a book and a speech by creating a book they’re proud of. So that’s the business.
There’s a lot of competition for people who will ghost write a book for you or publish a book for you or help you promote a business, a book. And my vision was that we could do it all for these people, for this niche. But what’s the sustainable competitive advantage?
What could we offer that nobody else has? Over 10 years, we’ve built up what we call the Indie Books family. And these are authors and experts.
You’re in the family. We invited you in. Other people wanted to get in and we had to say, Oh, I wish we could.
It’s a select group. And we help amplify each other’s work and we get each other booked to speak or we get publicity for each other or we make introductions to each other. So it’s this model that nobody else could create these 150 authors and experts willing to promote authors and experts.
So that has been our competitive, sustainable advantage.
From the Harvard Business School class, where you were given that feedback to when you figured out the family advantage, how much time had passed? Did you figure it out overnight or did that evolve over time?
You know, it evolved over time. I wish I could say it was instant karma, but it was not. I evolved in the 2000s with my marketing communications firm.
And my goal was to create one like no other. That was just, it sounds vague, but my legacy, I wanted to create a marketing communications firm like no other firm. And I’d been president of someone else’s large agency, and I was president of my own lemonade stand.
And let me tell you, it’s better to be president of your own lemonade stand than president of somebody else’s, and you have zero ownership. So I was doing that, and I kept going, like, I’ve got to find the niche. I’ve got to find the special service.
I got to spend the special sauce. And clients kept coming up to me and saying, you know, one of the things you advise us to have authority in the marketplace is to write a book. And you’ve written several books, but I’ve never written a book.
Would you write a book for me? It was about the ninth person who came up and said, so-and-so knows you and they introduced you to me. And I wanted to know, would you write my book?
So that’s 300 business books ago. So I started doing the books. Meanwhile, I also had a position at the University of California, San Diego.
I was the assistant dean for public programs and continuing education. But I cut a deal that I would only work four days a week so I could work three days a week. On this book business and all.
And then finally in 2014, I went to him and I said, I love you. I love the university. I love the work we’re doing.
I mean, I was booking speakers like His Holiness, the Dalai Lama of Tibet, Al Gore. You know, these were the people I was hanging out with at the university. The Atlantic Magazine, we had Elon Musk.
I’m bringing in Elon Musk to speak. I said, I love the work, but for some reason, I love these people who want to book more and they need more of my help. They need not just for me to write it, but for me to publish it or find them a top-rate publisher, to promote the book and be out there.
So that was in 2014. And then along the way, I was focusing on these consultants and business leaders. And it was about two years ago that I analyzed of all my authors which group that I really enjoy the best.
And they were agency owners, advertising agency owners, digital marketing agency owners, PR agency owners. These were my people. And I decided to really focus on these people, wrote a book for them, became an authority in that space.
And in the last year, that grew gross revenues 40% by focusing on that group. I still help the others when they show up, but none of my marketing energy or money goes toward reaching the broad group.
That makes a ton of sense. And I know from experience, and I also know from talking to business owners, there can be a lot of fear on that decision to niche down, right? But the saying goes, and you might have even have this in your repertoire, right?
The reashes are in the niches. It could be scary, though. Did you find that it sounds like pulling back enabled a lot of growth, but in the short term, did the revenues take a dip?
It’s scary as all get out. And because you have this fear that, oh, there’s going to be these potential clients who’s going to look at this specialization and think, well, then they’re not for us. That didn’t happen.
Our referrals went up when we specialized. People talk me into working with them. And word also got out that I only work with one out of four who, you know, approach me and contact me on things.
And that’s not some marketing move. It’s being selective. So the referrals went up.
So we made some decisions that, well, gee, maybe we should be spending more of our resources and energy on referrals and being grateful. And even things like sending out Starbucks gift cards just to say thanks for sending someone our way. Or we used to send this really nice fruit basket at the end of a project.
So people spend $30,000 with us and they get a fruit basket. Today, if somebody says they want to spend $30,000 with us, I give them our fruit basket up front. Thank them for inviting me on the team.
And they get a fruit basket at the end of a project.
So people spend $30,000 with us and they get a fruit basket. Today, if somebody says they want to spend $30,000 with us, I give them our fruit basket up front. Thank them for inviting me on the team.
And they get a fruit basket at the end. Like Oprah, give that person a fruit basket. You get a fruit basket.
You get a fruit basket.
That’s right. This is great advice, Henry, because it is one of the tenets of how do we build competitive advantage. And your story is to niche down, focus on agency owners.
And as you said, the referrals came in despite having the core messaging and the core focus, which is a beautiful thing. I want to switch gears a little bit and talk about how you view your future. We’ve had lots of offline conversations because you know what I do, right, as an exit advisor.
And business transition advisor. And so we’ve kind of talked privately about this. And I was so glad when you accepted my invitation to come on air.
And I said, would you be comfortable talking about what’s important to you? And you said, absolutely. Let’s come on.
So that’s why you’re here. I want to look forward to look back in this concept of how can we use succession and exit planning with growth in mind so that I can bust another myth, which is a lot of people wait to do exit planning at the end, right? But you can’t do exit planning at the end.
So I want to just crush that right now. And I think you have a very good story, an example of why you’re not doing that.
Sure. And in our space, I’ve done research and writing for seven years. I wrote for forbes.com and I’ve interviewed a lot of people and interviewed a lot of authors and found out that only one in four from my research pull it off.
And a lot of times what happens is something forces them out of the business, heart attack, stroke, divorce, you know, the big D word. I refer to it as, because I’m a baseball nut, I have visited 44 major league baseball parks and I’m a former sports writer and “I’ve got season tickets to two baseball teams. An author friend, David Newman, says, let’s just call this your baseball problem.
So I have a baseball problem. So I just refer to it as, if I get called up to play for the Angels. So that day is going to come.
So let’s be prepared for it. So I believe in just candid conversations with everybody about this. Now, we have them.
I recruited my daughter into the business. I got her out of corporate America and she’s been with me 10 years. She’s bought in as a partner.
She’s grown considerably and she’s announced that she wants to one day be president of Indie Books. And we said, that is great. And that’s a learning curve you’re going to be on.
So I’m going to demand a lot of you in that learning. And we’re starting a 7 to 10 year process. We’ve already started this last year.
And there’s four scenarios I see. One is that you’re going to buy this business. You’re going to put money down and take out an SBA loan and you’re going to buy this business.
Two is, you’re going to run the “business. You’re going to be president of the business. And I’m going to stay in ownership.
And I’m going to get money like an annuity out of this business. And then one day when I get called up to be the angel with the angels, it’s your business. Meanwhile, there’s going to be insurance on my life and your life in case something happens in between.
The third is that there’s a strategic buyer is going to come along and going to say, hmm, he’s created an interesting money making machine. If I ran it, since I’m smarter than Henry, it’ll make more money. I said, then we’re going to get some money up front.
You’re going to get your share. You’re going to get a contract because they want somebody who can run the money making machine. And it can’t be me.
And you’re going to have to be running it for a period of time. And I’m going to have to go away for like three months and then come back. Though you could always text me if you needed me.
And then the last scenario is, as the scriptures say, time and unforeseen occurrence befall us all. So if something befalls us all, we’ve got some things in place where it takes over sooner. So we’re working on that.
We’re getting advisors, CPAs, financial advisor, lawyer. We’re getting all these people in place, people, experts on a transition of a business like ours, who’ve been down the road a hundred times before. That’s the advantage of us helping people with books.
This is, I’m not selling the book service now. But one of the advantages is, I’ve done 150 books. I know how the movie comes out.
You know, I know where the plot twists are. And by the way, Fear Never Sleeps, getting a book done, as you know. We always, is it good enough?
If I had more time, it’d be perfect. You know, is all the… Am I the real authority here?
That’s the little voice in your head warning you. So I get people through those. Well, I know I’m going to have those same problems getting through this seven to ten years.
It’s, if you think picking the niche was scary. Yeah, and that saying is, it’s niche in the United States, it’s niche in Canada. So we’re international, so we work all over.
So yeah, these reaches and niches, beaches might be the Canadian saying. So that was scary. Turning over the reins of this thing I’ve created, which was my dream, I have created a marketing agency like no others.
There’s nobody like this. There’s certainly nobody like this in the niche. I was just at a big conference and this was the third year I had been there.
So it’s like a two year period. This is the third time I’ve been there in two years. And when I walked into the bar the night before, I heard people say, there’s Henry DeVries.
He’s the agency book guy. And I thought like, wow, I was saying that for years. Now they’re saying it.
It’s working. So I know in that journey, it’s a scary journey and nobody accomplishes anything great alone. Get help.
A hundred percent. There’s so many good things that you talked about in that story. So I just want to reiterate for the audience, because I talk about this all the time.
And here’s a real life business owner talking about it for himself and for your future, which is really, really good. First off, you’re giving yourself a runway of planning. You’ve said it seven to ten years.
You’ve identified a potential successor. You’re having open communication with that person who also happens to be a family member, and you’re also talking about options. You laid out five options, which is also something pretty critical.
And I talk about a lot in the book, in my book, because I want people to not get locked in and assume option A is going to happen. option A might not happen. We have to be prepared with B or C or D or E in your case.
And the options that you selected all make sense and they make sense for you and your business. So giving some real proactive thought to what those options might be, surrounding yourself with experienced professional advisors. I call that the boat, right?
The business owner advisory team. And if and when you need an M&A advisor, you call me. But that’s really, really important to surround yourself with, again, the boat.
So a number of things you’ve put into that narrative. I really appreciate you sharing that, Henry. When you think about legacy, that word, and I know the angels might call you up one day, what’s the legacy that you really want to be leaving behind?
Well, legacy is important. So going back in time, the years 2004, I’m running a successful agency on my own. We’ve got five full-time employees and many part-time employees, and have an advisor, and an advisor comes in, and she spends a day with us and maps out a plan where we can focus on cosmetic surgery.
We could own the cosmetic surgery marketing niche. And the team was all excited. Everybody was excited, and the advisor said, there’s one person in this room who is not excited.
Do you want to explain why you’re not excited, Henry? And I said, I do not want my tombstone to read. Henry DeVries did more to promote cosmetic surgery than any man in history.
I said that is not the legacy. I also had a chance to have this large real estate agency, and I don’t want to… Henry did more to promote vaulted ceilings and low-flow toilets than any man in history, so that’s not what I wanted
So I want to help people get ideas in print, ideas in print. And there is… and I don’t know what books are going to become, you know, holographic things, but if whatever it is, I want is there, that it gets these ideas in print.
And I’m excited about getting other people’s ideas in print and spreading the word, and that there is this ripple effect that happens. We have helped millions of people through our authors. Your book helped so many people with exit.
We’ve had other people who, you know, their book saves businesses or creates legacies. It does all these wonderful things. And sometimes we even hear down the line about these lives that we changed.
So books change lives, and we’re in the life changing business. Also, we’re not in the book business. I’ve explained to our team, we’re in the authority building business.
We take people who can help people and we make them authorities in their space. So it’s easier for them to find people to help.
I love that. Henry, we’ve talked about a lot of things today. If we’re going to put it all together in a drop the mic question, which is what are two to three top takeaways that you would love business owners to think about when it comes to growth, value and exit planning.
Well, to quote the Rock Poets, don’t fear the reaper, but also don’t fear the planning. Don’t fear the authority and don’t fear picking the niche. And if it’s a niche that proves wrong, then you’ll be much better at picking the next niche.
And when you find the niche, life is so much easier for you, for that authority. And then the other thing is don’t fear having candid conversations. I can’t help it.
I’m Dutch. My heritage is Dutch. Some people think we’re rude.
We prefer candid, candor always. So, I had an uncle who, the uncle who brought the family to America, and he kept it all tight to the best. And he died in his 50s.
And he had never talked to his wife about this empire. His oldest son spent the rest of his life just taking care of all the moving parts and all the businesses that have been created and the buildings they owned and everything. And I thought, okay, my wife is never going to be in the dark.
So, be candid, have these conversations. Sometimes they’re difficult conversations. So, I make light of it.
At one point, I said, oh, and if it’s something where you just have to put me in a rest home on Medicare, just do that. My daughter, Devon, just, she says, I know you’re joking, but that is not going to happen.
Well, it’s all about being prepared. And I know that with your discussion of insurance and being ready and, you know, these, the concept of the five D’s, there’s maybe even six of them that no one likes to talk about. It’s about being prepared.
It’s about not fearing the reaper. I think it’s Blue Oyster Cult, if I’m not wrong.
To quote the poet’s Blue Oyster Cult. Usually, I quote the poet Taylor Swift. One of my buddies got that from me.
He was giving advice to somebody and he says, well, to quote the poet Thomas Petty, the waiting is the hardest part.
Oh, Henry, if people want to follow up with you and learn more, what’s a good way to get in touch?
Sure. Thanks for asking. So the website is Indie, I-N-D-I-E Books, intl.com.
It’s abbreviation for international, Indie Books international. I’m on LinkedIn. Send a LinkedIn invite and just explain why you want to invite with me.
Not one of those vague nebulous things, which is immediately followed up by, let’s have 20 minutes together on the phone. My favorite was immediately came back and said, I’d like to be your life coach. And I think I responded, usually you have to buy me dinner and take me dancing before you become my life coach.
But anyway, they can reach me on LinkedIn. They can reach me through the website. And if somebody is serious about doing a book, I give away 30-minute no cost strategy calls.
Our brand is Generosity. So we’re generous in free webinars and free one on one consultations. And I give free books away and free white papers and all of this.
I just find the more generous I am, the luckier I get in business.
I love that. Henry, you’re running an amazing company. You’ve built something so special.
I am excited to be part of the Indie international family. As you’ve defined it, I’m a little unique in how I got there, but that’s okay.
Well, you got in through the back door like I got into Harvard. But you’re here.
Because I’m special. That’s right. I always get the exception.
I’m VIP. Yeah, but that’s all that matters. And I really appreciate you coming on and sharing your future succession stories with us and how you’re building growth and you’re not afraid of leaning in on on exit planning.
Thank you so much for the opportunity to speak today.
Thank you. And to our listeners, thank you for joining us this week. Be sure to sign up for our newsletter so you don’t miss any of the episodes on thebusinesstransitionsherpa.com.
And while you’re there, be sure to learn more about Endgame Entrepreneurship, our masterclass offered for building with the exit in mind. Tune in next time for more insights from transition to transaction.
I hope that today’s episode resonated with you. What actions will you take as a result? If you want to grow, sell or transition your business, our strategic transition planning process provides clarity and objectivity on the big questions that may be weighing on your mind.
Make an intention and take the next step. Set up a complimentary consultation with me to discuss your goals at thebusinesstransitionsherpa.com. That’s the business transition sherpa.com.
