Meet the Masters - Jesse Lipson talks entrepreneur's role in economic recoveries and ghost kitchens

Meet the Masters – Raleigh’s own Jesse Lipson talks customer service, the role entrepreneurs play in economic recoveries and ghost kitchens

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This material is provided as a courtesy and for educational purposes only from Olde Raleigh Financial Group, A member of Advisory Services Network and should not be construed as investment advice. All information contained in this video is derived from sources deemed to be reliable but cannot be guaranteed.  All economic and performance data is historical and not indicative of future results.  All views/opinions expressed in this video are solely those of the presenter and do not reflect the views/opinions held by Advisory Services Network, LLC. Please consult your investment professional, legal or tax advisor for specific information pertaining to your situation.

Trevor Chambers:

Hello everybody. This is Trevor Chambers, I’m the host of Meet the Masters with Olde Raleigh Financial Group. Meet the Masters is a collection of interviews with a wide range of thought leaders. And today is March 23rd and I’ve known my next guest for over a decade and watched him become one of Raleigh’s foremost entrepreneurial spirits and an incredible success story. And Jesse Lipson, welcome to Meet the Masters.

Jesse Lipson:

Thanks a lot Trevor. Happy to be here.

Trevor Chambers:

I was thinking, you and I have probably known each other for 12 to 15, somewhere around 12 to 15 years.

Jesse Lipson:

Yeah.

Trevor Chambers:

And how you grew your first large scale entrepreneurial effort not far from my family’s restaurant.

Jesse Lipson:

Right.

Trevor Chambers:

And that’s how I got to know you. So tell me about your history. Give me an overview of what you’ve done and also I want to hear about card, you had a business selling card tricks and magic stuff like that. I got to know about that. So…

Jesse Lipson:

Totally

Trevor Chambers:

Yeah. So what’s going on, man? Tell me your deal. Tell us your deal.

Jesse Lipson:

Yeah. So as a kid I was pretty entrepreneurial. I invested in the stock market starting at probably age, I don’t know, 12 maybe. And I was an amateur magician so I invented a couple of card tricks and tried to sell them. And then I kind of got out of entrepreneurship and I got a lot more focused on school and really thought I wanted to be a professor, physics professor, and then a philosophy professor. And so that’s what I went to school for is philosophy, planning to a professor. And really just got into entrepreneurship in the year 2000 roughly. I was graduating college. That was kind of the height of the dotcom boom, right before March when everything crashed. But, I got to experience the dotcom boom for long enough to decide that it seemed like a lot more fun than philosophy. And so I kind of just started to learn programming on my own and get into learning how to build websites and software and I just absolutely loved it.

So started my own company doing custom website software development. And then a couple of years after that decided I wanted to build my own product and I created ShareFile, which is a secure business file sharing tool and built that business. And it was acquired by Citrix in 2011, we had about a hundred employees at the time. And then went on with Citrix for quite a while, grew ShareFile to about 900 employees and then left and started another business.

Trevor Chambers:

Yeah, and tell us about the current venture.

Jesse Lipson:

Yeah, so the current venture is called Levitate and it is a tool that’s designed for relationship based businesses. So companies that really grow mostly through referrals and word of mouth rather than doing advertising and having big sales teams. And Levitate is really simple. Basically the idea is it helps relationship based businesses do a better job keeping in touch and staying top of mind in a more personal and authentic way then if you were to use something like an email marketing tool, which is a nice way to kind of blast people, but more and more these days, those email marketing messages end up going into people’s promotional box and they don’t really engage with them or it doesn’t do anything to really deepen the relationship.

And so we set out to build something that has all the authenticity of a one-to-one email communication, but gives you some more of the efficiency of software.

Trevor Chambers:

Well, I must just throw out the disclaimer myself and my firm mates use Levitate and it’s been a wonderful product and has made a difference in our business model. So, I commend you for that. And, I’m not just saying that.

Jesse Lipson:

Awesome. And thank you all for being one of our early adopter customers. We have over 700 now, but I think you all were probably in the first, I don’t know, first 10 or 20 customers. So it’s been awesome to learn along the way with you.

Trevor Chambers:

Jesse, are we in the diamond inner circle group?

Jesse Lipson:

Oh, absolutely. There’s very few customers that have Levitate T-shirts. And so if you have a Levitate T-shirt that means you’re automatically in the diamond circle.

Trevor Chambers:

The diamond inner circle.

Jesse Lipson:

Yeah.

Trevor Chambers:

Yeah. So Jesse, tell us also, your lovely wife, tell us about… Because you’ve made a lot of great decisions, I’m thinking that might be one of them.

Jesse Lipson:

Yeah. Yeah. So yeah, my wife’s Brooks Bell, she’s also a pretty prominent entrepreneur in the area, has her own company, and we actually met back in college so we’ve been together for 21 years now.

Trevor Chambers:

Wow.

Jesse Lipson:

Yeah. Back before I was an entrepreneur and she was 18 years old. When we met I was 21 and so yeah, so we’ve been [crosstalk 00:09:17] together.

Trevor Chambers:

That’s a lot of hugs in training. That’s a lot of hugs in training.

Jesse Lipson:

Yeah. So we’ve been together, for me, as long as I’ve been not together. So I’m 42, so we’ve been together for half my life and more than half of her life.

Trevor Chambers:

Wow. Send my best to you guys. We’ve come in on dates to Bella Monica, you also come in and do business lunches and things, but I remember fondly you guys, even at the bar or whatever, so back in the day.

Jesse Lipson:

Yeah, yeah.

Trevor Chambers:

And I believe you’re, if I remember correctly, you are a pesto flatbread with Kalamata olives?

Jesse Lipson:

Exactly. Yes. You hit it. You hit it. And actually I just got one on Friday.

Trevor Chambers:

Oh, nice.

Jesse Lipson:

We did a takeout curbside experience from, Bella Monica. I hadn’t had that for a while.

Trevor Chambers:

Thanks.

Jesse Lipson:

I forgot how good it was.

Trevor Chambers:

Yeah. Cool man. Thank you for doing that. So shout out to my people at Bella Monica.

Jesse Lipson:

Yeah.

Trevor Chambers:

Okay. I’m going to jump right into some questions if you’re cool with it here?

Jesse Lipson:

Absolutely.

Trevor Chambers:

Because we don’t have a lot of time, so I know we want to say some stuff. So let’s jump into a meaty question here. What’s the role… Now you notice guys, it is the date on our thing is March 23rd so we are in the thick of COVID-19 still and, let’s start with this, what’s the role of entrepreneurs in innovation in an economic recovery, do you think?

Jesse Lipson:

Yes. Yeah. No, I mean I think it’s huge. I did a talk for some entrepreneurs last week and one of the things I mentioned is that I think this is actually the best time to start a business because in a lot of ways being able to start with a clean slate, there’s been so much that’s changed in the economy over the last month or two, being able to start with a clean slate is almost better than starting with an existing business where you’re trying to kind of scramble to adapt to the new reality.


And so there’s just so much room for innovation. I thought I’ve got several different business ideas that I’ve thought about over the last month or two where if I wasn’t doing what I’m doing now would, I think, could be pretty interesting businesses. And so, I think there’s going to be… There’s just a huge amount of opportunity for entrepreneurs who are starting from scratch. And there’s also, unfortunately, but fortunately, there’s people out who maybe they got laid off from their existing job and there’s not a lot of hiring that’s happening in the economy, which I think can be a great catalyst for entrepreneurial people that say, “Hey, well I’m going to go figure out something to do and create a new business myself since it’s harder to find a kind of cushy job with a large company.” And so it kind of encourages risk-taking.

Trevor Chambers:

You know, a lot of what we’re hearing is that companies, big companies, are going to hoard cash for a while and they’re going to need to spend it eventually. And you sold to a very large… You sold your first ShareFile, right?

Jesse Lipson:

Mm-hmm (affirmative).

Trevor Chambers:

There’s a cycle to that. And maybe again to your point, we’re cleaning out the cycle and now it’s going to begin again.

Jesse Lipson:

Mm-hmm (affirmative). Absolutely. Yeah.

Trevor Chambers:

Yeah. And I think to back that up. So what does it say about the American spirit also? Not to get too crazy here, but I think that classic America is just, the United States is just an amazing place. I think we just got to go back to work and work a little bit harder, but we’re really good at that. Do you have any comment on that? Just, any…

Jesse Lipson:

Yeah. Well, I think one thing I was kind of shocked by was how fast businesses adapted to the quarantine and the new economy. Like literally watching TV, days after the stay at home orders, there were companies that were already adapting their commercials and their value propositions. And car companies that are doing delivery at home and just kind of how nimble the whole free market is in this situation. So yeah, I’ve been impressed with how adaptable a lot of businesses have been and how quickly they’ve been able to move.

It’s a very interesting situation that we have and I think one of the big questions is, there’s going to be a period of time where we’re in this state of kind of threat from coronavirus, and that may last a year or two, but I think one of the interesting questions… And so we know that things are going to be different probably for the next couple of years, but then I think one of the other interesting questions is after doing things for a couple of years, what are the things that we’re going to say, “Hey, we actually like it better this way and are just going to permanently change in the economy?” And like one example would be, I saw a commercial for Trolls, the movie, and it was a commercial for this movie that is getting released to streaming, directly to streaming, and that was the first one I’ve seen.

And so that’s probably for the next couple of years, movies are going to get released direct to streaming and maybe people will decide that, or maybe the studios and everything, will decide that they’re going to do that permanently once everything comes back and same kind of thing with the car buying experience and restaurants. An interesting topic is will restaurants change how they’re configured and be more about delivery and less about the dining experience or just the curbside pickup and all the other interesting approaches that are happening now.

Even before this pandemic there was this concept of cloud kitchens, which you may be familiar with basically-

Trevor Chambers:

I think I’ve heard of it but yeah, let’s [inaudible 00:15:42].

Jesse Lipson:

Basically, cloud kitchen is like a headless restaurant, so it’s a restaurant that has no dining room. It’s designed strictly for delivery. And that was already a trend that was kind of picking up for catering and delivery. It was already picking up before this and so I think it’s really interesting to think about when things come back to normal, what are the businesses that will just stick around and people will be like, “Actually this is great now that I’ve been…” Because I think there’s a lot to figure out. Sticking with restaurants, the delivery experience has been kind of subpar where it’s like, “Oh, if I order something it’s not going to taste quite as good as it tasted when I was in the dining room.” But that can be solved with separating ingredients in a certain way and delivering them. And maybe even the last step is something that you heat up at the end. I’ve seen a couple of restaurants that are working on that, like Mandolin locally, I saw I had some kind of an offering there.

So I think it’s kind of fascinating. That’s just one industry to think about. Every category and how we’re kind of forced into this experiment and the experiment in some cases is going to result in things that we never would have been worth risking the business to try but now that we’ve tried them, we realize there’s actually a much better way to do things than we had thought before.

Trevor Chambers:

Yeah. And if you want to extend that even further kind of just on… So you can’t go to the restaurant maybe as much or maybe that changes really dramatically. Maybe you don’t want to, maybe we all want to but did the house threat is keeping us away. So do you bring some sort of aspect of high level customer service into that experience at home. For example, maybe include a couple candles for date night. Or, we used to put confetti on the table if it was your birthday or if you’re celebrating. Maybe that’s included in… You know what I mean? Just those little touches that differentiate. Yeah.

What areas of the economy do you see, and we talked about restaurant industry, but what do you think there could be some kicking off of some new trends? What sectors? I know you’re in the information business and the technology world. What else are you seeing? What else are you reading out there?

Jesse Lipson:

Yeah, it’s a good question. I think it kind of gets back to the prior topic about there’s some short term things that are going to happen that are pretty clear right now when everyone’s in stay at home world. But I think the question is what’s going to stick? And it’s hard to predict.

Certainly one of the questions out there is about commercial real estate and now that companies have been doing the stay at home kind of thing and figuring out that they can work from home productively, what are offices going to look like in the future? I think there will be offices but… Sorry.

Trevor Chambers:

No that’s fine.

You can hear my dog. I don’t know if there will be offices or there probably will be offices but how will they be configured? What kind of density? What’s the way that offices are going to adapt? And so I think that’s a really interesting topic. Software, we’ve been using some software, we’re pretty tech savvy because we’re a software company, but we’ve been using some software that we hadn’t been using before for chat and things like that, that I think we’re going to continue to use post getting back into the office.

So some of the areas that interests me a lot are software tools, commercial real estate, what’s going to happen there, and then I’m pretty interested in the whole restaurant industry and how that’s going to adapt. What are the things that are going to change permanently there?

Trevor Chambers:

Yeah. I’ll tell you, my 16-year-old, she likes this distance learning.

Jesse Lipson:

Yeah, absolutely.

Trevor Chambers:

And where’s that going to take us? For better or worse, my 13-year-old and my 16-year-old, and I’m talking to not just myself, but lots of people out there are in this situation. They’re the guinea pig so it’s going to be interesting how that plays out. And of course, I think while telehealth was around it just got adopted.

Jesse Lipson:

Yep. Yeah. I saw the stats and it’s up like 4000% since the virus and I think I saw that one of the challenges in telehealth in the past has been doctors have to be licensed in the state where they practice, and so it’s been hard to launch really national telehealth, but I think they relaxed that law as part of this whole coronavirus stuff. And that’s an example of maybe they relax a law and then maybe they decide not to un-relax it. Maybe they decide that that works and then that is a catalyst for all kinds of other change moving forward.

Trevor Chambers:

Yeah. I’m excited about that area and the distance learning thing, it’s just… So what are you most concerned about? Are you concerned about anything? If you are, what’s troubling you out there?

Jesse Lipson:

Well I think probably the biggest couple of concerns I have now are, you mentioned the getting back to work, which is going to happen, and it kind of has to happen, because when you think about it, when they talked about flattening the curve, really the main purpose until there’s a vaccine, the main purpose of flattening the curve is to make sure that hospitals are not overwhelmed with capacity. So we don’t get to a point where you’ve got people that are dying because there’s not enough hospital capacity, there’s not enough ventilators, there’s not enough of that kind of stuff.

But flattening the curve otherwise is really just, it’s slowing down what will inevitably happen, which is people continuing to get coronavirus. And so not necessarily going to majorly change the impacts, the health impact or a number of deaths or things like that unless before there’s a vaccine they discover more effective treatments, which I think just by trial and error we’ll find, we’ll learn and get better. But I guess the concerning thing to me is that I don’t know if everybody in the economy appreciates the fact that we’re in probably the first inning or the second inning of something that’s going to be lasting a couple of years.

And you know, I almost think that some of the impacts may be worse on restaurants and hotels after the stay at home orders are lifted because then there’s just going to be kind of the consistent low grade, 30% drop in revenue and there’s not going to be stimulus to support it and it’s just going to go on and on and wear a lot of people down.

The other thing I worry about is the ripple effects or kind of the chaos theory of the whole thing. It’s easy to understand restaurants being impacted, airlines, but then all the follow on effects, what happens to loan defaults on mortgages and on commercial property? And there could be a crisis or collapse in a part of the system that a lot of people aren’t even thinking about just because of how complex and intertwined the economy is. And so I think it’s just we are dealing with a black swan kind of event. And it’s very, very difficult to know… It’s been a hundred years since something like this has happened. It’s very, very difficult for us to model and know how we should be thinking about the world. And so I think that the thing that concerns me the most is that the worst may not… In some ways it feels like “Hey, the worst is almost over, we’re getting ready to end the stay at home orders”, but in a lot of ways I think it’s possible that the worst is yet to come with this whole thing.

Trevor Chambers:

Yeah. Well, can I say what I’m most optimistic about?

Jesse Lipson:

Yeah.

Trevor Chambers:

I’m going to riff on this for a second. One thing I think that’s a little bit being discounted and I think could be the thing that could help lead us out of this, there’s a lot of millennials that are getting into their early thirties and where they’re finding mates and mating and creating that cycle, and where they’re going to have to buy a house, they’re going to have to buy a car and you’re going to have to get into that world. And I think that’s a macro trend.

I know you hire a lot of people in that age group and I think that’s something that I… You know, I’m a long-term investor. You know what I do. And so that’s kind of something that I like to keep an eye on and keep… That’s one of my true north sort of things. Let me ask you this, I’m going to switch and go back a little bit personal question because we only have a couple more minutes, what was the biggest, could you give me a nice statement on what you’ve learned the most in your ShareFile experience? And then I want to ask you what you’re learning the most in your new venture?

Jesse Lipson:

Yeah. Yeah. Well, one of the big things I learned from ShareFile and the new venture, and I think it was a principle I had even before ShareFile, is the value of a high level of customer support and service. And I know that for you in your Bella Monica days, I mean you were literally at the beginning of this call, you remembered what my favorite pizza was.

Trevor Chambers:

Yeah.

Jesse Lipson:

You know, 10 plus years removed. And I think one of the secrets to our success with ShareFile, and I think with Levitate, is that if you just start with an extraordinary level of service, customers will tolerate a lot of problems and will be very loyal if you have a high level of service and just do an exceptional job addressing your customer’s needs. And that’s just been one of the guiding principles I’ve always had as I started my businesses throughout the years. And so that’s certainly a big one for me.

And then the other one is just continual improvement and optimization. And that’s definitely been the case for Levitate. When you launch a new product, as long as you continue to iterate quickly and try to get better, just a little bit better, every single day, eventually you kind of converge and find the right path. And so I think it’s all about exceptional level of service and support which buys you a lot of time and patience from your customers, and also is kind of the key to driving referrals. And then also that consistent introspection and regular improvement. And that improvement just compounds over time. And so if you, I think, do the math, it’s like if you improve 1% a day, then by the end of the year you’ve improved like 3000%. And so those are two of the guiding principles across both businesses.

Trevor Chambers:

You mean the Kobe Bryant thought process? To just get better relentlessly every day? I mean yeah, it’s-

Jesse Lipson:

Yeah. Yeah. Absolutely. Yeah.

Trevor Chambers:

All right. I got two things to cover and I’m going to let you go. Restaurant. Give me a nice plug. I know you guys are downtown someplace or inside of [Bella 00:00:28:32], am I right? So what’s your plug man? What’s your restaurant? And tell me what you’re doing with the company because I know you’ve been supporting restaurants through Levitate.

Jesse Lipson:

Yeah, exactly.

Trevor Chambers:

So, tell me about that.

Jesse Lipson:

Couple of things. Yes. So first of all-

Trevor Chambers:

And, you got a couple restaurants, that’s fine.

Jesse Lipson:

Yeah. Yeah. First of all, Brooks and I announced that we made a $are two donation to the North Carolina Restaurant and Hotel Workers Relief Fund.

Trevor Chambers:

Awesome. When did that happen? When did you guys do those?

Jesse Lipson:

It was about a month ago.

Trevor Chambers:

Wow.

Jesse Lipson:

Kind of near into it. And so, we absolutely feel for local restaurant and hotel workers and it’s just-

Trevor Chambers:

Thank you for doing that. That’s huge, man.

Jesse Lipson:

Yeah. Businesses that, through no fault of their own, if I was running a restaurant I would be in the exact same condition they’re in. It has nothing to do with how well they run their business, it’s just a very, very tough situation. So one of the things we’re doing in the company is we have a weekly virtual company meeting and we’re reimbursing employees if they order take out delivery. We’re reimbursing employees, and they just have to take a picture of their food and post it to our company chat, which is kind of fun, so you can see who’s ordering from where and all that kind of stuff. But in terms of, for me, some of the places I’ve been ordering from, I like Gringo, downtown, the Mexican place.

Trevor Chambers:

Yeah. Very cool.

Jesse Lipson:

And so I’ve ordered from there a little bit. When I was back in my regular office days, Chopped, I like Chopped, Cameron Village, and more…

Trevor Chambers:

Oh yeah.

Jesse Lipson:

And then Bella Monica. So Brooks and I actually ordered from there last week-

Trevor Chambers:

Yeah, thank you again.

Jesse Lipson:

… and had a great experience.

Trevor Chambers:

Oh cool.

Jesse Lipson:

And Brooks was really impressed with… She’s gone gluten free now and so she’s been pretty impressed. A lot of our delivery experiences… The two of us, she’s also really sensitive to spicy food and one of the things that we’ve noticed is just talking about how things will evolve is we had a couple of failed delivery experiences, where we both ordered and food was too spicy or whatever, stuff that you can kind of communicate better in person. And so we had probably… I’ve had a lot of individual good delivery experiences, but she had her first positive delivery experience with Bella Monica last week, so we’ll definitely be-

Trevor Chambers:

Oh, good.

Jesse Lipson:

Yeah, we’ll definitely be going back to that.

Trevor Chambers:

Well, I’ll tell you one thing, if you’re in a restaurant business and you’re not rethinking your website right now, you know what I mean? I’ll give a shout out to, I think it’s a chain, I don’t know, but it’s called, Just Salads, it’s over on Lake Boone, and that website was awesome and I went out and it was sitting on a table in the front area. No one around. Very clearly labeled in a beautiful branded bag. I picked it up. I double checked it. Out the door. Beautiful. Beautiful. So, I mean, you really, yeah.

Well that’s super cool. All right, well I love the… Oh, and hey, I’m going to plug out, I did Sassool, Lebanese up in North Raleigh today, it was fabulous. Oh, the hummus was fabulous.

Jesse Lipson:

Fantastic.

Trevor Chambers:

All right, one last question.

Jesse Lipson:

Sure.

Trevor Chambers:

How’s your hair? Is it-

Jesse Lipson:

Well, you know we’re-

Trevor Chambers:

I got to tell you because my hair-

Jesse Lipson:

Well, you know we’re-

Trevor Chambers:

Dude, my hair is as wide as it is my high.

Jesse Lipson:

Exactly.

Trevor Chambers:

Is as wide as it is high. You and I have great hair so I had to throw out that. I mean, if we’re nothing, you and I have great hair so how are you looking?

Jesse Lipson:

Yeah. Yeah. I think we’re in the same boat. You know, we’ve got the… This is not a friendly environment for people with our curly hair styles and so. I mean, my hair, it depends on the time of the day. The later in the day, the worse it gets, the bigger it gets. So I was actually trying to decide, I was talking to Brooks this morning about do I grow it out? At one point I had a man bun a few years ago and so do I go for that again or what? So still undecided. So I’m kind of hanging on by a thread. The hair is barely hanging on. I’m going to have to make some tough choices probably in a couple more weeks if can’t get it cut.

Trevor Chambers:

Well, I think in terms of innovation, there has to be some innovation I think there too. How do we do it? Everybody’s you know… But maybe six foot sheers, like [inaudible 00:33:07], like with the huge handle.

Jesse Lipson:

Right.

Trevor Chambers:

You know what I mean?

Jesse Lipson:

Yeah. Yeah.

Trevor Chambers:

I keep thinking that, you know I just saw it the other day, like all the sports teams are going to come out with branded scarfs and stuff like that.

Jesse Lipson:

Mask and stuff, yeah.

Trevor Chambers:

I told Gonza, I said, “Gonza you’re fricking brand is perfect for masks.” All these Mexican… You know what I mean? Now you can’t use them, there’s certain… You know what I mean?

Jesse Lipson:

The wrestling masks, yeah.

Trevor Chambers:

Yeah, totally. Yeah. Yeah. Well, I tell you what, if you feel brave, send me a selfie of yourself with your crazy hair and I’ll put mine up and we can have like a hair competition. All right?

Jesse Lipson:

Okay.

Trevor Chambers:

All right. Sounds good.

Jesse Lipson:

Sounds good.

Trevor Chambers:

Well listen, I really appreciate you taking the time to do this. Maybe we can do this again in six months and we’ll review the tape.

Jesse Lipson:

Sounds good. Yeah. On the other side.

Trevor Chambers:

And if I see you before that, and I’ll give you a big hug and stuff, but listen, a big shout out to the Lev team and have a great day and say, hi to Brooks.

Jesse Lipson:

Thanks. Thanks Trevor.

Trevor Chambers:

Yeah, man. Peace, brother. Thank you.

Jesse Lipson:

Bye.