Beyond Business: How Companies Can Give Back to the Community with Mike Kaeding

Rich Bennett 0:00
Mike Keating is the innovative force behind North Hart's rise in the residential real estate sector. Thrust into leadership after his father's untimely passing. Mike facing difficult challenges, including a temporary city imposed shutdown. However, his resilience and problem solving flair led to a transformative approach at North Hart by cultivating a unique company culture and merging diverse trades. He addressed construction inefficiencies, blending quality with affordability. Today, Mike's mission with new heart is twofold tackle America's housing shortage and elevate living standards. I'm sure all you people listening, especially and I know some of my friends are that are in the building business. Listen to this because I think Mike's even though Mike's located in Minnesota, his plan, everything he's doing can change the world. And God, I can't wait for you to bring your stuff in here. So how are you doing, Mike? 

Mike Kaeding 1:04
Oh, man, I'm doing well. Thanks for having me. 

Rich Bennett 1:07
Oh, my pleasure. So if you can leave before we start talking about in your heart and everything. Tell us a little bit. A little bit about yourself. Who is Mike? Katie. 

Mike Kaeding 1:18
Boy, who is Mike kidding? You know, for me. 

Rich Bennett 1:22
I know I'm the. 

Mike Kaeding 1:23
Kind of guy I've always grown up this way, that I've wanted to make some kind of meaningful, positive impact in the world. That sort of drives me. But on a personal level, I have an amazing wife, two incredible kids. One is passionate about YouTube, and we did a whole the whole candy truck video this last week, but just have a great, fun life with my family and friends. But professionally, it's all about making a positive impact. 

Rich Bennett 1:49
Well, I mean, I'm sorry, what kind of a video? 

Mike Kaeding 1:52
Yeah, we were on the radio in the news recently. We asked the question, what would it be like or what would a five year old do with a full dump truck full of candy? Oh, my. We filled up a truck. We drove. Then they were giving it out to people. And then we ended up donating it. It was a ton of fun. And yeah, got on the radio and newspaper and TV as well for an hour. 

Rich Bennett 2:17
Right. How much candy did it take to fill up that dump truck? Don't tell me you fill it up to the top. 

Mike Kaeding 2:23
Okay, so this is the little secret day from the fire that was filled up from the top. I call it more like candy coated, because to fill an entire truck is half a million dollars. We didn't. 

Rich Bennett 2:35
Have that. That you want to be able to find that many kids to eat it? Probably. 

Mike Kaeding 2:40
Oh, my gosh. We still filled it with over £1,000 of candy and we were throwing candy out at probably 100 kids for a half an hour. And it didn't look like we made a dent. 

Rich Bennett 2:51
Were you guys in a parade or something? 

Mike Kaeding 2:54
No, We just went down our neighborhood and. 

Rich Bennett 2:56
Get out of here. 

Mike Kaeding 2:57
Yeah. Yeah. I mean, we you know, my daughter was like, Dude, there's ice cream trucks. Why not create a candy truck? So that's what we did. 

Rich Bennett 3:05
How old is your daughter? 

Mike Kaeding 3:06
Five years old. 

Rich Bennett 3:07
And she came up with this idea that she. 

Mike Kaeding 3:10
It was a mixture of her and myself. But yeah, that was her spark, was. 

Rich Bennett 3:13
That is awesome. Oh, you know what you got to do now? 

Mike Kaeding 3:18
What? 

Rich Bennett 3:18
You're going to have to send me the link to that so I can include the video in the show notes. 

Mike Kaeding 3:23
It'll be out in just a couple of weeks. Yeah. It's going to be a really cool video. 

Rich Bennett 3:26
That is so apparently she. All right. Where does she get this from? I take it? Well, from what Your what you want to do with the business? Something tells me you give back to the community a lot. Besides can. 

Mike Kaeding 3:39
Yeah. Yeah, very much so. Okay. You know, for her, she had been pestering me for weeks about wanting to start a YouTube channel, and I thought, Dude, this is just a passing phase. 

Rich Bennett 3:50
And then she wrote down. 

Mike Kaeding 3:52
And we started creating videos. And, you know, it's been small initially, but it's been growing. And now she's like, Dude, let's take it up to another level with things like a candy truck. So we'll see how it all plays out. 

Rich Bennett 4:04
And this is the oldest one. 

Mike Kaeding 4:06
Yeah, that's the oldest one. There's a three year old as well. 

Rich Bennett 4:09
Oh, my God. And they're only five years old. All right, Mike. 

Both girls. Yes, both are. Okay, start looking for a convent now, 

because something tells me once they become a teenager, Daddy's not going to be able to say no. Yeah. 

Mike Kaeding 4:28
Oh, my gosh. 

Rich Bennett 4:30
Good luck finding the convent. I've been looking for one for years for my daughter. She's 21. I still haven't. Found what's on. So with. With newer heart, because, ah, this is a business that your father started, right? 

Mike Kaeding 4:43
That's right. 

Rich Bennett 4:44
Yeah. So if you can tell everybody how you came about, I guess acquiring everything. Yeah. 

Mike Kaeding 4:52
So I grew up with it. I lived, but my parents lost everything early on. In fact, my dad was kidnapped in Peru. It was pretty decent. I know. Crazy. 

Rich Bennett 5:04
Holy cow, Dude. 

Mike Kaeding 5:08
But then we started started digging out of that hole, and we built small buildings. Was I grew up with a very small company. By the time I went off to college and my dad always wanted me to join the family business. But I didn't want much to do with it, right, because I didn't want people to think it was given to me. So I really wrestled with that then in college, but eventually I realized deep down I wanted to make a positive impact in the world. And why not take this small business and grow it to the kind of level that could achieve that? So I jumped in. In the first few years, my dad and I doubled the size of the business. And then after that, my dad passed away. So overnight I became CEO of the company and that's that's how I got to where I am today. 

Rich Bennett 5:51
Wow. Now, is your does your mother partake in the business as well? And your wife? 

Mike Kaeding 5:58
She Not today. Early on, she did, but not right. 

Rich Bennett 6:03
Okay. So explain to everybody what North Hart actually is, because I love the fact that you want to build affordable housing. Yeah. Ah, apartments, right? Yeah. From what I've seen on your website, these aren't cheap looking apartments. These are very nice looking apartments. 

Mike Kaeding 6:21
Yeah. Yes. So the dream is to solve housing affordability, which is a little bit different than creating affordable housing, because typically affordable housing is government subsidized, right? You can't solve America's housing affordability crisis by moving money from one sector of the economy to another. Think only way to solve it. Yeah, the only way to solve it is by solving construction costs, at least in our mind, and bringing more units to market. By providing more units at a lower construction cost, you will start bringing down pricing for everyone within that market. That's our strategy. The key then is how do you solve construction costs, which only seem to go up and up and up? 

Rich Bennett 7:06
Yeah, especially after the past few years. Yeah. 

Mike Kaeding 7:09
Yeah. So really simply put, if you look at other industries like manufacturing. Mm hmm. They've improved labor productivity by 760% over the past 60 years. Construction during that timeline has done nothing. Well, 10%, but nothing. So if we simply take the lessons learned from these other industries and apply it and to our own. That's where we start seeing the reduction in costs. And we have been seeing that. 

Rich Bennett 7:41
Interesting. So I guess like your car manufacturers do. 

Mike Kaeding 7:45
Yeah. Okay. Yeah, exactly. In fact, it is crazy to manufacturing. That construction's done the way it is. If a construction company were to produce cars, you'd have a different company. And so on the wheel, a different company, and so on the windshield and different components on the door because we're so segmented. Then, of course, the drug company would come to you and say, Hey, I'm so sorry I got delayed in another project. I couldn't get out there for two weeks. Your line would be shut down. Then they'd be irate because they can only work on one car at a time. So but instead, what we're doing is bringing all that work under one roof and streamlining it various similar to how manufacturing does that. 

Rich Bennett 8:28
How in the world did you figure out how to do that? 

Mike Kaeding 8:32
It's a lot of little experiments over time. It's a lot of great, amazing coaches. I mean, in the world of manufacturing, there's this concept called Lean the company to invent lean and to make a lot of this stuff happen is Toyota. So we just contacted Toyota and they said this is a great idea. And now they sent some of their executives to work with us on a regular basis to implement some of their ideas. But there are dozens of world class people like that that we bring together to execute on really bringing this to life. 

Rich Bennett 9:03
So how much and I know you really can't say moneywise because every building is different, but let's say, I don't know. A two And of course, depending on where you're at, it's different too. But on average, what do you think the cost difference is that you've been able to see from the way you used to build, say, a two bedroom apartment to now? 

Mike Kaeding 9:26
Yeah. So if you have a let's say a $100 million building, a typical builder can maybe build it for 95 million. We typically can build it at around 70 million, maybe 75. We believe we can drop that down to 50 or 50% of value. 

Rich Bennett 9:48
What? Yeah, just by implementing, like, what Toyota does. 

Mike Kaeding 9:53
Yeah, I mean, think about it. Like, wow, if if the technology industry didn't apply these principles, your cell phone would be $100,000 and the size of this room. 

Rich Bennett 10:02
Well, that's true. 

Mike Kaeding 10:03
But they've innovated, right? The construction has literally done nothing in the past 60 years. So we're trying to provide some of the same innovations. 

Rich Bennett 10:11
How long ago did you start this process? 

Mike Kaeding 10:14
Oh, it's it's been about a decade or so, really. And the last 3 to 5 years have been in real earnest on it. 

Rich Bennett 10:24
So and actually, I wanted to ask you that how did COVID actually affect everything, even though I guess you're considered essential, right? Yeah. 

Mike Kaeding 10:33
Our labor didn't have to stop. The big issue was supply chain and cash. Right? So the lumber, steel, all that went through the roof, it was awful. Even things like resins, your tubs ended up costing two or three times more. But the other big one was financial. Our bank, we had a bank lined up for the project we were starting in 2020. They backed out one week before closing and said, We're not doing anything anywhere. They like. They're not doing anything anywhere. So we had like three weeks to find entirely new financing for a $60 million project. It was it was a tough few weeks. 

Rich Bennett 11:15
Wow. So are you now are you building strictly apartments? Are you guys also doing homes? 

Mike Kaeding 11:22
Right now, it's strictly apartments. Okay. It's just a streamline that process to get really good at one thing. 

Rich Bennett 11:28
And you're strictly in Minnesota right now, right? 

Mike Kaeding 11:30
We are. But we're slowly working on expanding beyond that. We do have manufacturing capabilities in Wisconsin. About 15% of our staff are international. 

Rich Bennett 11:39
I could see this going definitely throughout the country. 

Mike Kaeding 11:42
Absolutely. 

Rich Bennett 11:42
If what you're doing and four days of you listening, you can actually go to the to the website and even look at the apartments, some of the locations. And they're they're amazing. They are amazing. These are nice looking complexes. But so are you actually going around teaching what you're doing to other companies as well? 

Mike Kaeding 12:09
Yeah. So we're on lots of podcasts. Some of them do quite deep dives into what we're doing right? Sure. All of it openly, because again, my dream is to make a meaningful impact. It's not to get a pile of money or something like that. And so if I can help others do that as well, I'm more than happy to do that. 

Rich Bennett 12:26
God bless you, man, because that's the thing. It's what was the old phrase? It takes a village and you are willing to help others, help build that village, shred the country. So everybody definitely needs to do this. So when the shutdown happened, we are talking about how the city shut everything down. How did that affect you? 

Mike Kaeding 12:49
Oh, it was it was awful. The biggest thing that really hit us was the bank pulling out. Right. So overnight we went from having all the capital and money that we needed to build this building to shoot. We do not. And if we don't solve this problem, that means our crew could be out of a job in a matter of weeks. Right. And so it was we ended up compiling a list of all the banks large enough to do our deal in the Midwest. It was about a list of 60, and then it was calling on the list every single day, the whole list. And it was it was rough because day after day, you see that list go from 60 down to 50, down to 40, down to 30, down to 20. And it really got down to the wire. And then it happened to be a friend of mine that I was connected to happen to reach out to him who happened to know someone at a credit union, which we hadn't considered that was looking to put some money. So it it there's a bit of luck in him. But the tenacity, the energy behind us is you make your own luck by reaching out in so many different avenues. And that was it was so stressful. But it was a it was an intense it was intense. 

Rich Bennett 13:57
Few weeks it speaking of reaching out. So before you took over, how many how was the how many people knew about your heart? I don't well, you can't really give me a number on that. How many? Right. 

Mike Kaeding 14:16
Pretty unknown. 

Rich Bennett 14:17
Okay. So what was it that you did? Difference. The difference? Hello? Rich Reinert lives here. What is it that you. Did for. It? To help brand it and get the name out there even more? 

Mike Kaeding 14:31
Boy, that's such a great question. 

There's so much that goes into building a brand and building a name for yourself. I think one of the key things is identifying groups that you want to connect with, like yourself, understanding their audience, and then trying to find ways you can bring value to their audience. So for example, last week I was on ABC seven in Los Angeles and Los Angeles. 

Rich Bennett 14:59
Yeah, on the news channel. Yeah. Okay. 

Mike Kaeding 15:03
But okay, so why in the world would they ever want some residential builder out of Minnesota to come talk to them? Right. Well, this is what you to think through. The strategy that I took was sharing the secrets that landlords don't want renters to know. For example, what are the techniques that you can negotiate with landlords? What are the sneaky little ways that they try to charge you more rent and how you then deliver that news information to that audience? So it's identifying what the audience wants and then pitching the gatekeeper based upon that. And if you do that, well, the world opens up to you. I mean, like the candy truck that became a way that we got on local news and TV and so forth. But it was such an interesting and unique idea that was really captivating to them. 

Rich Bennett 15:51
Well, now you have to answer those questions. To. My audience. How do you go about that? So if somebody wants to go rent an apartment, how do they go about doing that? That you mentioned on seven News? 

Mike Kaeding 16:04
So one simple technique is to identify large new buildings and the large new buildings they've got maybe three or 400 units that they have to fill up, right? Well, guess what? The investors are putting pressure on the property management company. Who's putting pressure on the leasing staff? And the leasing staff may not be able to lower the rental price because they've got to make it look good to the investors. 

Rich Bennett 16:28
Right. 

Mike Kaeding 16:29
But they might say, Dude, I'll give you two or even three months free in rent snaring one of the nicest properties. And if you push them on it, they're afraid you're going to leave. They'll give you really good discounts like that. And if you know how to ask for discounts off of just three months of rent rather than lowering the price, you're now speaking their language in a way that they convince investors that it's a good thing to do. 

Rich Bennett 16:54
Wow. All right. So have you have the the out in Los Angeles find out about you to get you to come on and do this. 

Mike Kaeding 17:02
Yeah. So. Well, I've got a I have a friend. 

Rich Bennett 17:06
I know it was from the candy truck video because that's not out yet. Yeah. 

Mike Kaeding 17:12
Yeah. So I have a friend who is a former Wall Street Journal guy who knew Steve Jobs, the founder of Steve Jobs, knew Steve Jobs. But he said something really insightful. They said that people the average person thinks the news finds you. That's not the case for 99 plus percent of people. 99% of the people. They put a ton of effort into building the right relationships to connect with these things. So how do we get on that new station? It starts with identifying the new stations. We want to get on identifying the key people. So it's the it's the producers. It's the bookers, it's getting on social media, commenting on their posts and things of that nature, providing them real value, establishing yourself as a peer, providing them insight on things. And then once you establish a bit of a relationship, then you send in the pictures. And so we create pictures every couple of weeks of new ideas that we think could be useful to their audience, Right? Then we send them an email with a really strong subject line and then and then they respond. Now I'll say that still 99% of them don't respond. Those are those. 

Rich Bennett 18:21
Pictures. 

Mike Kaeding 18:22
But still the little ones start responding. And so it's a snowball effect that lets you keep growing from there. 

Rich Bennett 18:27
Interesting. 

Mike Kaeding 18:28
Yeah. 

Rich Bennett 18:29
So they probably wouldn't call me because they probably think I break the cameras. 

Mike Kaeding 18:36
No, they're not going to call it. But but definitely, if you didn't put the work in there, they're going to find you valuable. 

Rich Bennett 18:42
And you said something very important where you see a lot of people, I think they don't get it. You say comment on the social media post, and that's one thing I think a lot of businesses have a problem with. They have no problem putting post out there. Yes, but they don't comment back as the business and you and you definitely have to do that. 

Mike Kaeding 19:07
The whole point is about building a relationship and not spending the time engaging with the people. It's not anything of a relationship. 

Rich Bennett 19:15
Now, is this something that you learn from the show or Hunter that. 

Mike Kaeding 19:20
That so the a lot of the PR techniques that I just outlined are the things I have learned from Cheryl Hunter. There's a few other groups that we work with as well, right? Yeah, they've been fantastic. 

Rich Bennett 19:31
How did you find out about her? 

Mike Kaeding 19:33
Hmm. 

I mean, we just got connected on Facebook, if I remember correctly, and I saw a little bit of the work they did, I thought, well, this is a skill set I don't have. I want to learn more how to do this well. And so they had kind of a basic class to end up taking, which was really great. And then I realized that I really want to be a part of the more elite group. And so join that group. And the people in that group are amazing. It's some of the big people that you would see on the news and experts around the world and like being able to talk to them and understand what they've gone through is really useful. On top of that, they've got two or three gatekeepers. So these are people at major news publications that are in the group and they give you regular feedback right in that group live. 

Rich Bennett 20:19
Interesting. 

Mike Kaeding 20:20
Yeah. 

Rich Bennett 20:21
I'm I see. And I didn't even I didn't know about because I didn't know she did classes at all. I thought she was strictly a PR person. 

Mike Kaeding 20:32
No, no, no. She teaches you how to do PR. She's not going to do it for you. 

Rich Bennett 20:35
Yeah, this is what I realized. That is, until I saw your thing is like, Well, I'll be damned. So something else I learned is, like, back to North Hart with the construction part, I and I'm sure it was out. You ran into the same problem out there as we did here, especially after COVID finding employees. Well, okay. I think, you know, I'll go with that. How hard was it to actually find people to come back to work or to work here? 

Mike Kaeding 21:12
It was awful. And this kind of ties into the number one most important lesson I learned. But what we ended up doing as a result of how terrible was we just had to solve the problem. So every business that I know was complaining about it, but what were they actually doing? There were posting things on and did great. Maybe they went to a job fair to okay, but none of those things were really moving the needle. So what we recognized is we ended up hiring about 14 recruiters at the time this is happening. 14 was it was a 15% of our staff and we hired a very large, very talented group of people that went and looked for people who weren't looking for jobs. Because I back the most important lesson I've ever learned there. The way you change it industry, the way you really make an impact on business, is finding the world's best people. Right. And when I say best, I truly mean that we fly people from other states to come work with us and fly them home on the weekend. We've got a staff member that in 2007, Steve Jobs announces the iPhone. Steve Jobs walks offstage and this staff member walks on that same stage following Steve Jobs presentation. It's that kind of level of person, and I bet I know what you're thinking now. That sounds expensive, right? Yeah, and it is when it's on a per person basis. But the lesson I learned is that the best people outperform the average by two to 5 to 10 times as much. And then if you look at it instead of as a cost per unit produced, those people aren't your most expensive people. They are actually your least expensive. So for those who complain about finding the best inexpensive, my answer is it's more expensive not to. 

Rich Bennett 23:10
So there's a true asset to the company. 

Mike Kaeding 23:12
Exactly. Yeah, we we did a presentation with our company today and we're bringing an investors right now. And I said the investors, they look at the buildings that we have, we've got like $220 million worth of buildings. They say that is the value of our company. And I say no, they totally and utterly miss it because the value within our company today, the vast majority of it, is the caliber of people that we have on the team solving amazing issues. 

Rich Bennett 23:43
Wow. So how many employees do you think you have? 

Mike Kaeding 23:46
It's about 250 around there. 

Rich Bennett 23:49
Nice. Yeah. How many before you took over? 

Mike Kaeding 23:55
Ten. 

Rich Bennett 23:56
What? 

All right, so what are the things I never even asked. How long ago was it that you actually took the company over? Or I should say that in ten years you grew it that much? 

Mike Kaeding 24:10
Yeah. Yeah, we've been for many of those years, we've been double in size each year. 

Rich Bennett 24:15
Ah. Where do you see? Where do you see the company? Five years from now? 

Mike Kaeding 24:21
Boy, I see a lot of growth coming down the pike. I think right now what we're focused on primarily is, is driving down that cost of construction even more. Right? We've got a plan that I think the next couple of years we're going to get it down at levels that's unheard of in our industry. Then the next phase is a growth stage. That's how do we take what we've done here and replicate that in other major markets and then the course over the next ten years or so is to reach 192,000 units with about a 60,000 unit per year construction pace. And at that point we're starting to have enough meaningful impact on the housing market that we're thinking we could start driving down the cost for people. 

Rich Bennett 25:06
So speaking of that, because that's one of the things I dream you think about, but you know, all these people that are going into the apartments because they can afford them now, have you actually talked to anybody or have you heard of any good stories from people that are actually that you've been able to help out because of this? 

Mike Kaeding 25:31
Yeah, You know, to be very transparent, I think the first thing to mention is if you looked at our website, you'd say, Mike, look at this like your rental prices. They're just the same as everyone else. And we say, Actually, yes, that's intentional. And the reason that is, is that could lower prices today and that would solve housing affordability for about a few thousand people. That's wonderful. But that's not the level that we want to solve it out. We want to solve it at nationwide. And so we're taking those profits and putting it into the system. Imagine a manufacturing systems, buildings like a gigafactory for apartments. We're putting it into that system to build housing. Okay. But even said, there have been many stories of us making an impact. And so one fine example is we're doing this again in a few weeks, but we ended up going to an elderly man's house and we have an entire construction team, right. And, you know, hit a bit of a mental condition and it kind of looked like he had left his house in 60 years. I'm sure he had. But he had a modest lawn in 60 years. It wasn't it was an overgrown it was an entire forest. Wow. His houses are really, really tough shape. And so we brought in a construction team and we all worked together on a Saturday, and we totally renovated his house into a much better state. It was just incredible to see and to see the team willing to just donate their time like that. There was no negative stigma. No one had to write. The majority of the company came anyway because they wanted to help. And so we got lots of stories like that. 

Rich Bennett 27:04
So again, this is you giving back to the community. 

Mike Kaeding 27:08
Mm hmm. 

Rich Bennett 27:09
Yeah. And everything was donated for this gentleman. 

Mike Kaeding 27:12
Yeah. 

Rich Bennett 27:12
So that's a big thank you for doing that, because there's I know a good friend of mine does that as well. There's I think we need more people like you guys doing that. 

Mike Kaeding 27:24
Mm hmm. 

Rich Bennett 27:25
To give back and to help out. But. Oh, man, that's. I'd love to hear them stories like that. Yeah. Excuse me. Sorry. That 

got to hang another question right on the tip of my tongue for you. But you just told me that story is like. Wow. Oh, I actually going back, I Yeah. I wanted to ask you this at the beginning and because it threw me off, it is like 

we went on and just like you've mentioned, your father was kidnapped in Peru. 

Mike Kaeding 27:58
Yes. 

Rich Bennett 27:59
How the hell did that happen? 

Mike Kaeding 28:02
Well, the wider story is this. So my dad has always been wanting to help our communities in the world. And my dad and mom were really big in the Special Olympics. And in the early nineties, the Special Olympics had their major competition in Minnesota. And so families from across the world came to Special Olympics. Special Olympics would pay for a place for the the Olympian, the stair. But the family needed a place to stay. And so my parents became a host family for one of these families. There's a guy named Poncho from Peru, and they really hit it off. They built a strong relationship. And Poncho talked about the fact there wasn't much of a transportation system at the time. Within Peru. And so they realized they could form this partnership where my dad would fund the capital. He would buy these buses and deliver it down to Peru. And then Poncho would run the operations of these buses and charge you a fee for it and then return the money back to my dad. And then my dad could pay off the loan. So it all kind of made sense and started this off and the buses were sent down and Poncho said it started sending the money. And then slowly over time, the money started drying up and eventually the poncho stopped stopping entirely. And my dad, I mean, he put a couple hundred thousand into this. This was an entire his entire life savings as a family. And so he then ended up taking trips down to Peru to go kind of work all this out with Poncho. And eventually it actually went all the way to the Peruvian Supreme Court. Wow. And there was a bit of corruption. They end up swapping out the Supreme Court justices right before the trial. This was crazy. Wow. So it made it made the press down there. But anyway, one of those trips down to Peru, he knew he went out walking along the beach and the beach in Peru at the time was fairly safe, but there was sort of an area of town that was not safe. Right. He was walking along the beach and this guy comes up to him. He says, Dude, you're an American. Like, tell me all about America. I'm really excited about it. My dad started sharing that. So this is odd and the guy just ran off. A few minutes later, a few police officers show up and the police officers pull my dad aside and say, that man he was talking to, he was a he's a known drug dealer. We need to bring you downtown to the police station for questioning. My dad was like, okay. And he gets in the car and the moment he gets in the car, he knows that they're not real police officers, small car. There was four of them and one of him there was two people on the front seat. And then on the back row is two people on either side of him. And he was in the middle. So they start heading down the street to the bad part of town. They ask him for like a shakedown, like, where's your money? And it kind of shows he doesn't have much money in his wallet. There's nothing in his shoes. And he kept putting his shoes back on. And then you realize, like, this is not going to end well. It started formulating a plan and he'd actually been, unfortunately mugged before. He kind of he had the air about him is like, this is the guy you want to mug. 

Rich Bennett 31:21
Wow. 

Mike Kaeding 31:23
But he had formulated a plan partly because of his experience before. And he realized that you have about one second to act before people around you know what's going on. Right. And so his traveling down in the car and they see a stoplight coming up. This is the moment that we hit 15 miles an hour as the cars slowed down. That's when I come to act. So he watches the speedometer. There are 40 miles, 30 miles, 20 miles, 15 miles an hour. His hits, he leaps out of the back center and on the passenger door opens that door. The momentum, the slowing car actually uses the door. The door swings open as a result, pulling him out of the car all within about one second. You have out of the car and runs backwards down traffic to escape. And that's the story of my dad being kidnapped in Peru. 

Rich Bennett 32:21
Holy cow. Yeah. Have you ever thought about writing a book? 

Mike Kaeding 32:28
Maybe I should. 

Rich Bennett 32:29
That's a wow. Good thing. Good thing he acted upon that. Yeah. 

Mike Kaeding 32:34
Yeah. My life would be very different if it wasn't for that. 

Rich Bennett 32:38
Yeah, Yeah. Think. Whoa. Did he ever hear from Poncho again or anything? 

Mike Kaeding 32:45
Yeah. So the kidnapping wasn't related to Poncho, so that was sort of in the middle of trying to get his money back. And so then it went off to Supreme Court. So, I mean, it really it really dampens your spirit to want to go down to Peru to fight this court case. 

Rich Bennett 32:59
Yeah. So, yeah, you're way more than just the court case. Yeah. Holy cow. It also. Hmm. 

That's. That's wild. Yeah. How how old were you when this happened? 

Mike Kaeding 33:16
Mm, I was probably four or five years old. 

Rich Bennett 33:19
All right. How old were you when you found out? 

Mike Kaeding 33:23
It was actually around four or five. 

Rich Bennett 33:25
Oh, really? Yeah. 

Mike Kaeding 33:28
Um, I mean, it was a few days, that kind of time to shake it off. But, yeah, that was home. So the dangerous gone. 

Rich Bennett 33:35
Your mother had to be just. I. I don't know. I don't. I can't even imagine how my wife would be if something like that happened. 

Mike Kaeding 33:44
What's crazy is she was always a little bit nervous of him going down to Peru, but that day or that night that had happened, she didn't got to talk to my dad, but she just felt like something was right. And so she was so uncomfortable that night and the next day for them to talk and find out actually something did happen was a little surreal for her. 

Rich Bennett 34:03
Wow. That. 

Hmm. 

I 

God, good for him. Now, did you have any prior military experience or anything that he. No, he was just new. 

Mike Kaeding 34:20
Interesting guy, I guess, like a guy that he was smart. He was really smart. Wow. But not, like, athletic. 

Rich Bennett 34:29
That's amazing. Okay, so go back to you in your heart 

how his lead in your heart actually shaped your personal views on leadership business and the importance of mission driven work? 

Mike Kaeding 34:46
Yeah, I think early on I thought business was just about rearranging puzzle pieces, just to make things work. Hmm. My degree is in computer science, so I'm very much a math computer kind of guy. 

Rich Bennett 34:58
In that world. 

Mike Kaeding 34:59
It is just kind of plug the pieces together, get it all logically to fit in it. Good. 

Rich Bennett 35:04
Yeah. 

Mike Kaeding 35:04
The world of business is I will, in my opinion, is almost polar opposite. Yes, there's logic. There's the cash flow, there's the attention. All of that has to be right. But this strategy almost doesn't matter if you don't have the right people and the right culture. And if you have the right people in the right culture, then your strategy, even if it fails, you can work around that. Those smart people solve those problems. So early on I thought, well, I could just cut costs and lower wages and and kind of just get people and plug them into spots. I'd be good. That's not the case at all. Right. We weren't really kind of meaningful example of this. This is something I've been learning recently is everyone has sort of a genius about them. And as a leader, one of your most important tasks is to identify that genius, to kind of proclaim to label that, to speak it out to people. So people know that genius, that person understands that genius, and then they get them in the right nuanced position that aligns to that genius. Because if you just get them into a spot where they're just executing on a job, they are, you know, substantially less effective like two or three times less effective as opposed to putting them somewhere really truly aligns to their passion, their energy and their drive. You do that right, you unlock a sort of potential, a spirit, a power about them. That is incredible. Now, if you do that, then across the whole organization, now you're changing the game. And so I think a lot about culture and that stuff, but that's one little element of doing it well. 

Rich Bennett 36:45
Do you actually use a business coach? 

Mike Kaeding 36:48
Yeah, You hear a lot of coaches, a lot of coaches we work with. 

Rich Bennett 36:53
And have you turn it around to where you're actually a business coach for other people as well, other entrepreneurs or even thought about it. 

Mike Kaeding 37:01
I'm not formal. I get people who reach out and I'll definitely do little bits of coaching with them and those are always a lot of fun, especially now that I've seen that a little bit from the coaching perspective of there are insights that a coach can give you that can save you literally years of toil to discover for yourself. And so I've always understood that too, from a coach perspective. So we literally worked to find a world expert that can teach and train us. There's many ways that we can because I know so little, but if I can learn from people who know a lot more than me, I can stand on the shoulders of giants. 

Rich Bennett 37:38
You know what you you got. So with that would you just say and what you said earlier and this is something I've been telling my kids, something I keep telling young people, the education never stops. Yeah, I don't care how long you've been in business, what type of business you're doing, the education never stops. And with what you're doing, even though it's only been ten years, how much have you seen the field change. 

Mike Kaeding 38:08
Or tighten in the sense that we're trying to make that change happen? Yeah, you. 

Rich Bennett 38:13
Are making that change happen for Yeah, I mean, a lot of people just don't get that, so. Oh, actually. And with everything 

with everything that's going on now because you see the push for green energy. Mm. How does that affect your buildings or you guys are, have you guys already been doing that. 

Mike Kaeding 38:33
Yeah. So we love all of that. A lot of our buildings are built to a higher standard. The code requires we want to be bringing in things like solar technology and we've explored things like heat pumps, different ways to buildings. I think it's going to be a key component for us in the long term. I think our number one focus right now is something we call it cost to value. So it's providing really high quality buildings, but really driving down their cost but sort of phase two to that is now how do we elevate this even more to be sustainable, to be sustainably sourced as well? How do we we do a lot to support our employees, but can we do more to support the vendors employees down that chain rather than just our own? And so we're not very transparently we're not fully there yet, but we're executing on a lot of key aspects of it. 

Rich Bennett 39:22
Good. Now, do you any plans on I mean, we touched on it briefly, but right now, are there anything in the works to go outside of where you guys are building now? 

Mike Kaeding 39:35
Yeah. 

Rich Bennett 39:35
So sides Minnesota, Wisconsin. 

Mike Kaeding 39:38
Mm hmm. Yeah. So we're actively looking into Texas. I think that's probably going to be our next spa. David Yeah, Yeah. 

Rich Bennett 39:45
Okay. 

Mike Kaeding 39:47
The really interesting thing there is we get a lot of in a fairly small area, I mean, three or four if you call the four major metros, all within about 3 hours of each other. And so that becomes really interesting because we can build up our system in a way that's more scalable over a few years to a larger population before scaling out rest of the nation. 

Rich Bennett 40:07
Wow, that's good. And then hopefully you'll soon be out on the East Coast. Yeah, I'm. I'm telling you, if you want. I'm not saying if once you get out of here or teach another company to do it, I could see these things just taking off. Mm. Big time. Big time actually. Back to the leadership thing. Is there any techniques that you actually use to manage your company? 

Mike Kaeding 40:37
Yeah, I think the number one thing I think about is culture, and so we do a lot to support that. I mean, here's, let's give you a list of some simple things but one is that I do every single orientation so we'll have, you know, 10 to 20 people each week or every other week at orientation. We now started inviting our current staff into orientation because it's a good refresher, right? And culture values. But then they can also just in a more authentic way, kind of connect and share with the new recruits and what that culture is like. 

We are very, very selective in hiring. I think this is critical. So we've got a big team for recruiting, but the hiring process is extreme in that we look at a lot of candidates before we bring someone out and for many positions, there's a trial period that that person will start and then they'll only have two weeks. And then in those two weeks, your co-workers will decide if you make it onto the team or not, which is a really great safety valve to make sure we have the right caliber of people. Another really important thing that I think a lot of business leaders don't do is they're not great at firing people, which sounds so negative. But the thing is, I know what amazing teams look like. If you get one or two people in that team, that's not at the same caliber. You you just don't hit that amazing team. They bring everyone else down, right? And so we stole something from Netflix called The Keeper test. And the simple idea there is if a particular employee were to quit, how hard would you fight to change their mind? If the answer is you would fight tooth and nail, then good, they're the right person. If it's anything less than that, then they're not the right person and we want to help move them out of the organization. We're very supportive of people on the way out, but we're very proactive about letting those people go right. We tell everyone right orientation. Most companies know they don't want the bad employers most and companies know they want the world's best. But we're rather different than most companies is Most companies are okay with the average. It's nothing wrong with them. But that's not the kind of company we want. We don't want the average in order to change an industry. We want a team of the very, very best. And so those are a few techniques that we've used this so many more. So that gives you a sense. 

Rich Bennett 43:05
So what do you do? Because one of the things I know when I used to be when I used to work for other companies, 

morale was always a hard thing to keep. Yeah, because let's face it, negativity breeds negativity quicker than positivity breeds positivity. So what do you what do you do to actually keep the staff motivated, to keep the morale up? 

Mike Kaeding 43:28
You hire people that are positive. 

Rich Bennett 43:34
I mean, that really is. 

Mike Kaeding 43:35
The heart of it. Um, I yeah, I've seen this many times before. We often tell employees that it's so important to be really honest about. We're very transparent, even to the extent that we give all our employees survey results openly, honestly to the staff, including my own results. But now we also publish those under our website. The Good The Bad and the Ugly. So that transparency is really important. But there is a way in which an employee can deliver a message, right? So we want to hear the message. We want to share that message with others. But if you're delivering in a way that brings the emotional energy of the room and the people around you down, that's not good. But if you can do it in a way that brings the energy up, that's awesome. So, for example, if something is going bad in your like, dude, we're all going to hell. This place is awful, right? That's one way to deliver the message. Another way is, do guys, we're going to hell and we're going to take on everyone there and we're going to change the world, right? 

Rich Bennett 44:35
I love it. 

Mike Kaeding 44:37
So we're both honest that, yes, this is going to be terrible over the next few weeks or months, but a positive spin on it or this positive energy, a way different kind of thing. And so I think part of it is coaching people correctly. A big part of is hiring the right people and having the right kind of culture. I mean, even comes down to our values. One of our core values is to be a genuine human. And part of that is being respectful, kind, open, honest, transparent. And that goes a long way to positivity. I tell people to I don't want to be fake good, so I don't want positivity for positivity sake, but I want to be honestly and authentically good. So we need to be transparent first and then deliver that in a positive way. 

Rich Bennett 45:20
Now, I know you give back a lot and so does your five year old daughter, but do you actually also require your employees to to give back to the community in a way or. 

Mike Kaeding 45:32
Yeah, we don't this is important to you. We don't require any of that kind of stuff. Okay. And the reason that is, is it's not for everyone, right? Right. Some people may not not their cup of tea. I mean, we have a lot of employee events and stuff, too. There's like events going on every week, frankly. Wow. And again, this is not company driven. This is employee driven. Great, great people together. They make it happen. There are things from simple things like softball, volleyball to road trips to camping excursions to Valley Fair valley skier to hunting, to fishing. All that stuff is going on. And but we never want people to feel like it's a requirement in any way because we want it to be authentic and real. So, dude, if you like hunting, go hunting. If you if you like volleyball, do volleyball, if you like. Just having dinner with a couple of the guys after work, do that. You don't want any of that. If you want to be a hermit at home, that's okay too. We accept you for who you are in your moment and we want to be respectful of that. And so even with the volunteering, there's probably about two thirds of the company that was really into that, but maybe said that's not totally okay, Right. That's that's your life. And we support that one. 

Rich Bennett 46:45
The things you just mention there, too, which I love, and I actually worked for a company that was like this. You're very family driven. In other words, you treat your employees like family. 

Mike Kaeding 46:55
Yeah. 

Rich Bennett 46:56
You know, doing events all the time like that. That's all I could see. Well, it's already happened to growth of the company, but I can see this going on forever, too, where, you know, your five year old is going to be taken over and then the three year old in there drink, you know, then your grandkids is a great grandkids and so forth, 

actually, because, you know, I have to go into talking about something else. But is there any thing you would like to add about in your heart? First, before I go into the other thing. 

Mike Kaeding 47:31
I know you can jump right into the other thing. 

Rich Bennett 47:33
The podcast, man. 

Yeah. So what made you finally decide that you wanted to launch a podcast? 

Mike Kaeding 47:46
Boy, that is a great question. I mean, the really deep answer is that most businesses understand the value of money and currency within their business. Most businesses also kind of understand, but don't act on it. The value of attention and awareness of an audience or a community And so but the deep thing is there is a tangible value to that attention. Look at Gordon Ramsay, a world famous chef, Hell's Kitchen, right? Yeah. Do you go to Las Vegas? His restaurants have a line out the door. Hell's Kitchen itself. You've got to get on a waiting list four months in advance to get you to that restaurant. But in the same exact casino, same incredible food, same location, same quality of staff. The neighboring restaurants don't have nearly the kind of number of people visiting their restaurants. Right. What's the difference? It's that attention. And so for us, the PR, the social, the YouTube, the the podcast is all about working to build an authentic relationship with an audience. And so that's what started it. 

Rich Bennett 49:02
And what's it about that in your heart or yes, it's called Zero. 

Mike Kaeding 49:08
The Unicorn is about the Oh. 

Rich Bennett 49:10
Thank God. So I'm glad you mentioned the title because I love the title and I want you to go ahead and do that. Go ahead. What you were say, but also meant you had that title came about. 

Mike Kaeding 49:21
Yeah. So it's about the journey of small business growing too much larger scale. And I think we wanted the title to illuminate that. It took us a long time to figure out what the title could be, but we also wanted that it wasn't just again, and it's not just average, right? And that's what we loved about Unicorn. It's about people truly making $1,000,000,000 kind of impact. It doesn't actually have to be $1,000,000,000 has to be that kind of meaningful, deep impact in the world. And so season one was about our story, but now we've kind of shifted a little bit. Season two and beyond is going to be more than just arts, tourism, the story of others. And so the for the first episode of season two is not out yet, but the first episode is Michael Roslin, who is the originator and the executive producer of Batman. And it took him literally ten years after getting the movie rights to Batman, ten years to make that a reality. And every step of the way he got to know after, you know, after, you know, after. And now most people would give up after six months. He didn't for ten years. And look at the kind of impact he has made as a result of that. And his that story is amazing. And what he's doing today, things like Joker, the Lego movies, you know, all these crazy things that he's working on today. It's incredible to see. And so it's that kind of story and energy that we'll be sharing. 

Rich Bennett 50:51
All right. Who is the best Batman? Oh. 

Mike Kaeding 50:54
I he actually acknowledged that and talked about it. You said the best Batman is the Batman you grew up with. And I could not agree with that more. 

Rich Bennett 51:06
Oh, that was an easy way out for him. Let's face it, Michael Keaton was definitely the best with no down. 

Mike Kaeding 51:16
No, no. I did grow up without him. 

Rich Bennett 51:20
I'm Batman. So. Yeah, that's. That is awesome. And now it's something else, if you don't mind. Unless you women. When did you guys start the podcast? It was this year, wasn't it? 

Mike Kaeding 51:32
Yeah, it was just a few months ago. 

Rich Bennett 51:35
Oh, okay. So you're not going to be able to see the impact as of how it's helped the business yet. Right. Or have you? 

Mike Kaeding 51:42
Well, it's been fun watching the audience grow, but yeah, we haven't seen the wider impact. I get fan mail and phone messages and that's always great to see when people are like, This is kind of the message we needed to hear because. 

Rich Bennett 51:54
Well, then then it is helping the business already. 

Mike Kaeding 51:57
Yeah, I get people reach out and say like, Dude, I've been really struggling the last few months and kind of hear some of these stories of people that it three months is just the start. Helped ground me and put me back to knowing that this is just part of the process. That's the truth. We all go through it. You go through ups and downs and that's that's normal. 

Rich Bennett 52:16
I tell you, I've been doing this since 2015, and the biggest rewards that I have gotten out of this is when people listeners do contact you and thank you because of a certain episode. And yeah, it's helped them, you know, without a doubt. And I don't know if you can answer this or not, but this is something I've always told business owners when they come on, if it's if it's a good fit for their business. Do you feel it is important for certain businesses to have a podcast because of the way podcasting is growing now? 

Mike Kaeding 52:53
Oh, absolutely. I think the primary benefit is building the audience. I would say there's a secondary benefit many people don't understand, and that is the people that you meet, right? The caliber of people and guests that I'm talking to in my own podcast is tremendous. And in doing the podcast circle and meeting people like yourself. I mean, I was on a podcast not too long ago with a former NFL player who's built a $2 billion real estate enterprise, right? Like a lot of my guests on the billion dollar, like kind of impact in the world and like these are people that I wouldn't know and really bump into right now. You're building authentic relationships with them, and that's been incredible. 

Rich Bennett 53:32
Yeah. Who ever thought that 

510 years ago you could be talking to somebody in another state or in another country with this much clarity, being able to see each other, not a phone, but see each other and create a relationship. I mean, that's one of the greatest things I've seen. You know, I've found doing this. Yeah. To where at times I've had a lot of people back on. Yeah. Which of course you're going to have to come back going anyways because. Yes. Especially when you start going into all these other states and the growth of the podcast because that's another I love to get podcasters on the because podcasters have so much to offer. Other podcasters you may be doing something different that's helping your podcast. I know I do. I've done something completely different that helps my podcast. So that's something that, yeah, you're going to have to come back on no matter what. And I love. 

Mike Kaeding 54:34
It. I will. I'll do that. 

Rich Bennett 54:35
And bring your five year old daughter. Yeah. Yeah. No one, I can't wait to see some of these videos because I'll be the candy truck was one thing. Oh God. God only knows what she's going to come up with next. 

Mike Kaeding 54:49
Oh, yeah, there's. Oh, my God. What are the ideas they're tossing around right now is what would it be like for her to move out and then move into one of our apartments, but have it all be an entire Barbie apartment? So there's some there's some crazy things we're thinking about. 

Rich Bennett 55:05
As far God producer. Yes, I'm joking. Because the Barbie movie just. Exactly. 

Mike Kaeding 55:12
That's weird. 

Rich Bennett 55:13
Oh, God. Thank God. She doesn't want in to want to move into an apartment and be a mermaid, because I would. Have to fill. That thing with water. All right. So, Mike, you've been on several podcasts. You've had several interviews on podcast TV, I'm sure magazines, newspapers, yachting, all that stuff. And I always like to ask this question. Well, actually, first, before I ask a question, tell everybody the website and how they can get in touch with you. 

Mike Kaeding 55:42
Yeah, you can visit our website nor heart dot com. That's an 

0rhart dot com. You can learn a lot more about us, including investment opportunities and our shows. 

Rich Bennett 55:54
Didn't you just change the website recently? I thought that it looked different when you first contacted me. 

Mike Kaeding 56:03
On how it's always evolving. 

Rich Bennett 56:05
Okay, whatever. It's a good looking website. 

Mike Kaeding 56:09
Well, thank you. 

Rich Bennett 56:10
Very good looking. All right, so out of all the shows you've been on, is there anything that a host has never asked you that you wish they would have asked you? And if so, what would that question be? And what would your answer be? 

Mike Kaeding 56:25
Wow, that's a great question. 

Rich Bennett 56:30
That's not allowed to be your answer. 

Yeah, I have. 

Mike Kaeding 56:36
Yeah. You know, I think some of the best hosts that I've seen, including yourself today. 

Rich Bennett 56:41
Thank you. 

Mike Kaeding 56:42
As you dive into questions that are different than the normal. So there's the standard like, Hey, this is your history. This is where you began. This is the steps to get there. But it's always diving into something new and unique. 

And maybe an interesting question that really hasn't been dug into You do do play is really understanding the challenges at a deep level. MM Because many businesses you look for on the surface and you see this upward trajectory of a business, but the reality is there's a lot of like little loop dealers, little roller coasters going on and that when you look carefully and I think in these shows you always wanna be positive and exciting and engaging, which is good. But there are, there are a lot of moments that you're like, oh, bleep like are we going to make it through today? How do we make it through tomorrow? Do we have everything put together? Can we actually survive this next crisis? And that happens a lot. And I think it's important for people to talk about that because otherwise you feel like shit, Everyone else has got it going on. I just got a crisis. No, we all have crises. It's going on all the time. 

Rich Bennett 57:51
Exac That was good, man. Well, Mike, I want to thank you so much. It's been a true pleasure, man. And I definitely got to have you on again no matter what, because I know there's a lot more we could talk about. And good luck with the podcast. Good luck with the business. Good luck with the YouTube channel, because your daughter's going to keep you busy, man. Yeah. She's going to keep you extremely busy. But seriously, thanks so much. It's been a true pleasure. 

Mike Kaeding 58:21
Well, thank you so much for having me. This is a lot of fun. 

Rich Bennett 58:24
Thanks.