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Get expert tips on how to scale your business by developing systems and teams. Jeff Hoffman recommends that entrepreneurs chase excellence instead of money. Learn how to chase excellence in branding, leadership, and innovative from one of America’s most respected consultants and investors.
About Jeff Hoffman
Jeff is a cofounder and former CEO of Priceline.com. He’s also a public speaker and the bestselling author of Scale: Seven Proven Principles to Grow Your Business and Get Your Life Back.
Today Jeff is the Chairman of the Board of the Global Entrepreneurship Network. The network operates programs in 170 countries to make it easier for anyone, anywhere to start and scale a business.
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This transcript was auto-generated from the original video recording using Otter Voice Meeting Notes.
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Welcome to Deliberate Leaders. I am your host Allison Dunn, Executive Business Coach and founder of the Deliberate Leaders podcast dedicated to helping leaders build strong, thriving businesses. Each episode we do is interviewing inspiring leaders to help you on your leadership journey. And today’s guest is no exception. And joining us today is Jeff Hoffman. He is the co founder and former CEO of priceline.com is also a public speaker and the best selling author of scale seven proven principles to grow your business and get your life back. So today, Jeff actually is the chairman and on the board of an organization which is a nonprofit called Global Entrepreneurship network. And do you call Jeff?
Okay, fantastic. Which is in 170 countries. Trees and is designed to make it easier for anyone anywhere to start and scale a business.
Jeff, welcome to the Deliberate Leaders podcast.
Thank you very much. Glad to be here today.
Absolutely, we’re stoked to have you. So I hope it’s okay. I’m going to do a little break away of what I have been typically doing. And I’d like to just have a quick deliberate conversation about leadership. Are you gained or are absolutely awesome, fantastic. So I kind of have a three part question. And sometimes, you know, once you get going, you may answer all three at one time, but what would be your one top leadership tip?
Surround yourself with people smarter than you? It’s that I learned early on that one of the worst enemies of any leader is success. Because as soon as you see yourself on the magazine cover, you suddenly think you must be a good leader and smart at this. And in fact, the truth is you got there because of The people around you so surround yourself with people smarter than you and then lead by service get out of their way and take care of.
For sure. Okay, so you’ve explained why it’s important, which is my second question. So final question, how would you suggest that that is best implemented and practiced by our listeners? Okay, so that’s
Okay, so that’s a little bit longer answer, because it’s such an important question. The, what so many people do so let’s back up. The task is find people smarter than you. Right? And then we can talk about the second part, how to serve them and how to retain them, and a few minutes, but how to read how to acquire them as the first part, how do you find them? How do you surround yourself with those people? And what most people what most leaders do? What most people do is use traditional channels to build a team. We might post a job, we might talk to friends of ours in the network, we might hire a headhunter and all of those methods yield some degree of success. But here’s a hard truth. The hard truth is typically the let’s say you posted on job site. Typically the person that is applying for a job is the person that recently lost the hairs. Um, so the rock stars and industry are rarely looking for a job, they usually have five people lined up everybody wants hires, what you need is the rock stars of each mark of a segment, right? If it’s a marketing person and finance person. And the problem is those people aren’t really looking for a job. They don’t respond to the traditional job, hiring methods or posting methods, and they’re not going to just wander into your office. So my answer to your question is, you need to schedule time to go find them. So I used to do this, sometimes two Fridays a month, I would take two days a month where I was out of the office and I was touting, not sitting in my office posting stuff on the internet and hoping somebody magically replies, I agree Going out in search of the most talented people. And I’ll tell you one quick example of that. I needed somebody amazing to run HR. I’m an engineer. And even though I was a CEO, I’m the leader. I’m an engineer. I don’t really have training and human resources and people management, but I needed the best. So I asked people, where did Human Resources people hang out, and people kept saying Sherm, and I was like, I don’t know what Sherm is I looked it up society for Human Resource Manager. So then I googled it, and I went to their website, and on the Sherm website, which I’ve never been on before, I’m not an HR. I’m on the front page. It said, Don’t forget to register now for our upcoming national conference. So I registered, I paid my fee, and I went, and when I got there, I don’t know 1200 people or whatever, and you’re all wearing a name badge. And I’m walking around and people are looking at my name badge. And they’re like, what do you do? And I said, I’m a CEO. And they said, we’re not even in HR. I said I’m not. And they said, then what are you here for? And I said, shooting fish in a barrel. And they would laugh. And they would say, What do you mean? I said, let’s see. There’s 1200, new of you one of me and I need someone to run my HR department. And here’s the other amazing thing. Who are the speakers at a conference? Well, they’re people like you, right? You speak on leadership at conferences. They’re the people that know that are the best in that particular field. So you know what I did, I circled the names of the speakers. And I went and hunted them down at the conference. And the keynote speaker was Angela, who won the HR Manager of the Year from the United States. And after she spoke, and she was done chatting with people, I managed to get her attention. And anyway, I’ll skip the details the interest of time, but she ran HR for me for four companies. I was able to hire her at the conference, she was not looking for a job and everyone else. She had plenty of job offers. So you have to hunt for You have to go where they are, and you’re gonna have to get out of your office and go find them.
Yeah, very solid advice, Jeff, thank you for sharing that. So let’s check. Let’s talk about your book scale. Who did Who did you write that for?
So I co authored that with David Finkel, they will have written already eight business books and I’ve written zero. So there would be no book without data. Here’s the question, we answered why we wrote the book. People kept saying, this is what I hear all the time. They say I’m stuck. Okay, as a business owner, here, one, we had high growth year two, year three, let’s just say we grew from, you know, 100 grand a year to now we’re doing 4 million a year in sales. And then we were at 4 million and then last year, we’re at 4 million and then this year, we’re at 4 million. The two words I hear all the time is I’m stuck. I can’t figure out I’m working harder and longer than ever, and I can’t figure out why I’m not growing anymore. What am I doing? Not doing right. And or what am I doing wrong? that’s preventing my business for achieving some exponential growth. So that is the question we were answering, we wrote the book scale to make a practical how to guide or the list of things, that if you don’t get these things, right, you’re never going to achieve that sort of hockey stick growth. You’re not going to get unstuck if you don’t do these things.
And would you mind outlining kind of on a like a high level, what the what the critical steps are in scale?
Well, there’s a number so I won’t take all that time, but I will hit a few of the highlights because one whole section we just talked about, which is team building, is that you need to spend some amount of your time much more of it, working on your business and not in it as people say, right. You’re there running the business, taking calls, talking to people going to meetings, that’s in the business, on the business is taking a step back. It’s me leaving every other Friday saying I’m not even in the office today. Don’t call me I gotta go. Find someone to run HR. It’s taking a top down view of how do you make this business stronger, and you getting out of the flow of running the business, you’re not at the meetings, you’re not taking calls, you’re working on the business that day. There’s an example. We have a whole section on systems and processes. As an example, about automating the things that are not your secret sauce. No one’s coming to you because you do this one function. So he automated or outsource it. That’s then we also talk about documenting processes. So that we talked about onboarding. How What is your onboarding process? When you hire a new person? How quickly are they up to speed? Well, if they’re only up to speed as fast as they can follow another employee around and get and pay attention, take notes. That’s not it. onboarding should be as automated and documented, right? That you know, there’s basically cloning your best employees and documentation and videos so that the new employee can emulate the best employee without the best employee being distracted. From their job to train them. So these are examples of there’s basically seven chapters, we call them the seven proven principles to scale your company. There’s an example of a few of them, right?
Fantastic. In every company that I work with, who wants to expand and scale in some way, creating the systems before they put people in place often is like the hurdle or one of the largest hurdles that I see them struggling to overcome. Do you have any recommendations on an easy way to systematize a business? And I don’t know, easy is kind of like a cliche term, but well, you know, in a sense, we said one, which is to clone your best people. But if you don’t have those people yet, to the case that you’re talking about, it’s much harder to do that. And then in that case, I really believe that it comes from creating community around you have similar leaders and similar business owners. So Somebody, you know, if you’re not part of an organization already that has forums and eo or YPO, or picot, there are a bunch of them, you can create one on your own. I had somebody during Corona recently, where I asked him to reach out to all the small business owners in the town he lives in, that are roughly his size, and form and every Friday, zoom call, and just now they’re doing it because of COVID. But you should be doing that all the time. You should find a group. And you know, in COVID time, we’re asking people to call their competitors too, because we’ve all got to get through this together, but in non COVID times, calling somebody from each industry, if you’re in fashion call somebody from food services, somebody from it, somebody from hospitality, find companies and leaders of similar sizes with yours, and so that you don’t feel competitively you know, nervous about sharing info and meet or talk regularly. Somebody has solved that problem. When you say how do I say systematize this process in my company, someone else has already done it. So instead of guessing, you should be relying on the knowledge of the community and kind of crowdsourcing those questions.
And apps deliberate directions, we have a similar eo style program called whetstone. And I say that that shared knowledge of I’ve done that system. And this is how we did it to learn from each other is powerful.
Yes, so people should be joining that so that they can learn from somebody that’s already actually solve that problem that you have, and you probably has a solution and have a solution to something they’re working on.
Absolutely. And in the book scale, you talk about leverage points or areas of leverage, and can you kind of share a little bit more about what that is about in what, how to easily find or identify a company’s leverage points?
Well, that is kind of in multi dimensional. We talked about that in a lot of ways. We talked about leverage for an industry as well. I’ll give you a few examples. Because one form of leverage is something I’ve, you know, sort of since taking the call your unfair advantages, right? In some cases, people focus on leveraging. And this is kind of an update since we wrote a book. So we have no content. Yes, pretty much new content. In many cases you are or what I asked people to do is to sit down and you know, what you’re going to do is find your leverage by asking what unfair advantages and I use that term unfair, obviously, everything’s fair in business. What I mean by that is, what unfair advantages do you have that other companies don’t? What should you be leveraging in the market space? I’m going to give you a quick example when we were I had to travel tech company technology in the travel industry. They the travel industry is written in a programming language that is proprietary and for most of its life was on document. It takes like two years to learn it and that’s If you have really smart people, so one day I we were talking about the kinds of business deals we should pursue. And we were looking to see where we add leverage. Well, it turns out that if you wanted to compete with me, you’re two years behind. That’s how long it takes just to learn to train people in this very complicated back end processing language. So that was a leverage point. For us. That was an unfair advantage. I’ve already spent those two years. So pursuing a business idea that I have leverage in was me focusing on an area that I’ve got an advantage that you don’t when I’m bidding on the job, I can tell them, we’ve spent six years already doing this will be up and running faster than any of our competitors, where relationships are a leverage point. And that same model because I had delivered different products at a previous position. And so in some of my employees to the same customers, CEOs of airlines, they trusted me, was that a track record with him. So I had a leverage point in that My team that they were betting on in hiring had proven performance to these customers in their industry. So those are some examples of unfair advantage leverage points that we look to exploit in our business so that we’re pursuing the business, we really are going to win it.
I love the angle on really figuring out where the unfair advantages and I know that every company likely has one. It’s just figuring out what it is.
You got to think about it is and I love your work. It is a deliberate process. Right? If you don’t deliberately say, let us focus on and define our leverage points. It doesn’t happen. You’re too busy otherwise.
Yeah, for sure.
Obviously, scaling is a strategic type of investments. And so my question is, what are your thoughts on where companies may be over investing? And maybe an example of where companies are under investing strategically?
Do mean that In terms of investing in what part you mean, anything that causes scalability?
Oh, sure. So, the under investing let’s start with that one because that’s easy one, which is in to in in, in automating. A lot of times when people look at I’m gonna give you three answers that question a lot of times what people look at is the cost of it and software products and SAS products and when I say why don’t you do that they say because it’s expensive. Excuse me, so they’re under investing in these areas. Because of the initial outlay of the costs for getting that the month by month you know, return on that investment is is often oftentimes worse initial investment. So they under invest because they don’t want to lay out the initial cash and automating a process that once it is automated saves them so much money month after I’ll give you a You know, just a crazy example my first product ever. The first product I ever sold as a business was creating the check in kiosks that you use at airports now. And the first couple airlines I got right place at the right time. I went to airlines and I said you should buy these kiosks because then all these people in airports now of course, they’re in airports all over the world, but then they weren’t. And people could check in and some airlines said, How much of those costs, and I said roughly this and they said less than in our budget, so we don’t want to spend more money. And so I said, Okay, you spend X amount now to buy these. And then I had to do the analysis over the next five years, the number of personnel in the airport, you don’t need to hire the number of counters the number of check in computers. I said, You kidding me? It will cost you this much. Now, in three months, it’ll pay back in the next you know, 15 months, we’ll all be positive return on investment, but all they said to me was We don’t have an IT budget to buy hardware right now. And I was like, what an insane decision. Of course, they eventually did. But some of them did not want to invest in automation, because of the upfront costs, not doing the math over the long term. Another place people under invest is employee development. I can’t believe how many employees tell me that their company gives spends no money on continuing education or upgrading their skill set. Right. I know some people that said, we think that artificial intelligence, we might be able to do predictive consumer behavior algorithms in our company, but we don’t know what that are with those are and you know, none of us have a certificate and they applied AI. And because their company doesn’t want to spend the money on training them on something they don’t quote need. And so once they did and what happened in COVID, during this time, a bunch of these AI classes are free, which they’re normally not But once they invested in, in continuing education for employees, those employees were able to create new products that were worth way more than the cost of education. So those are examples of, you know, under investing in some of these areas. I think the over investing piece comes a lot from expansion. I’m going to say this, when I see people trying to scale their business geographically, and they’re opening and building offices and other places. And without really exploring in a global world partnering, right, a lot of times they over invest in access to market because they’ll say there might be a company in Europe already that already exists that already markets to the same customers a different product, but they’ll tell me Well, we don’t want to do that because they want 20% of every sale. So what we’re going to do instead is we’re going to spend hundreds of thousand dollars to open a Europe office and fly back Fourth, but we’re going to get 100% of every product sale I’m seeing when you do the math, you would have been way smarter not to invest in your own physical expansion, but to just partner with someone who’s already there and give them a cut of your revenues. Those are some examples.
Yes, those are very, very good examples. In the, book, you also talk about innovation. And so what are the most innovative brand promotional strategies that you’ve seen? Maybe in the last year or so? you highlight it stands out?
Yeah, they do. So one of the, you know, I’m use the old term for this. Because when it came out, they call it user created content. Right now, if you think about it, look at all the really funny memes from parents, who are suddenly teachers in homeschool, right? My favorite one, the first one I saw was the one that somebody said how is homeschool going question mark? The woman wrote, both students were suspended for fighting and the teacher was busted for coming to work drunk. So that was a meme created by an individual. There are the power of the crowd is hilarious. When you look at the growth of new platforms like Tick tock, even though it tends younger, it came out of nowhere because its users. It’s not YouTube, where everybody’s watching somebody else’s video, a small number of people create them. tik tok, as an example, is everybody’s creating their own little video, because it’s fast and cheap and easy. So user created content. So what I’m saying is challenging. This is my favorite new strategy, challenging the world at large to make a funny video about your product, right? So they’re all out there promoting your product for you. And if the veteran The video is fun or funny, it goes viral. And in the process, everybody sees your product and example even though it wasn’t a commercial product was the ALS ice bucket. Check. Who doesn’t know what the Ice Bucket Challenge is? But that wasn’t Yeah, it wasn’t a random thing that was ALS. Right? The foundation put out a challenge. And everyone knew about the ALS Ice Bucket Challenge. So that trend is one that excites me the most. Why don’t you challenge the world to talk about your product by doing something funny online? They love making funny means they love making funny videos. Why don’t you ask them to?
Yeah, that’s a brilliant idea. I hope that’s the takeaway from everyone who’s listening who’s going to be listening to this podcast? That’s the challenge. You talk about or recommend info sponging, which I think is such a fun term for 20 minutes a day. So can you tell our audience a little bit about what info sponging is?
Sure. So I just made the word up because people asked me what I was doing. So that’s where info sponging came from. The concept was this. I was studying my business heroes. Why are some of them who I think are the brightest In most innovative people, what is it they’re doing that everybody else isn’t. And so for example, Steve Wozniak from Apple became a friend and spending time with Steve, and people like that, or when I would be with Richard Branson or whatever, just business innovators, I would try to see what habits they have that everyone else doesn’t. And one of the ones I noticed is, everybody else sticks to the industry, their industry. If you’re in the real estate industry, you don’t really care what they’re doing in banking. If you’re in banking, you really don’t care what you know what the retail mall industry, whatever everybody tends to focus on, you know, you wouldn’t go to conferences for other industries in the same way sort of that I went to an HR conference, I’m not in the HR business. But when I noticed these innovative people, they are constantly looking to see what the rest of the world around them is doing, to see literally if there is a good idea they can steal to apply to their industry. So I created this concept of info sponging to say, every seat here’s your task. Every single day, you should challenge yourself to learn one new thing today that you don’t need to know, for 10 minutes, 20 minutes a day, you are not in the real estate industry and you do not work for your company. So for those 20 minutes, you have to learn one new thing read one new article, one new story, one new magazine, one new conversation with someone that is not about real estate and is not with anyone you work with. And at the end of these in the info sponge time, I write down one sentence of what I learned that day. And what happens over time, is you start to collect ideas from other industries and other people that are not in your industry and not in your company. And you wind up being the first person to figure out how to use that great idea in your industry. That is what the common element of these great innovators were, was that they took ideas like the example be, you know, Travis looking at the the sharing economy and micro payments and past based freelance work and putting all these ideas together. None of which came from the taxi business, putting them all together in something called Uber. He didn’t create Uber by looking at taxis. He created Uber by looking at ideas that other industries have and said, Well wait, these things are cool. How do I use them in my industry?
And are you okay? If I put you on the line? What did you invest sponge today or yesterday?
And yesterday I was looking at yesterday, I had a very specific one, because I was looking at something in Uganda, and I was looking at the supply chain of feed of food, and Uganda, specifically to schools because there’s a lot of kids there than there are in our country, whose only food supply actually comes from the school government delivers food in school, not to the individuals. And while school is closed because of COVID the government is also closed, so no food is flowing. And so I was trying to understand that made me wonder I didn’t know any of that. Just in general. I wondered how food does food get to them. They don’t have a car. They don’t have a grocery store, not like we do. So in general, how do they get their food every week? Where do they get it from? What is the food supply chain? In a country like that? That is actually what I was researching yesterday all the way down to chatting on WhatsApp with some people in Uganda to see if there was something we can do to help. And the process of that made me start to think of if we had a solution to that what other supply chains could that be applied to, for moving goods or food in other parts of the world as well?
Cool, that is?
That is a challenge. I think that I don’t know if we’re going to solve it today. But can you imagine that I can imagine that.
It’s important. It is very important.
So you are also a consultant as well as a coach, correct?
And what would you say is the most common so I think I know the answer because I think you brought it up earlier, but what is the most common challenge that you’re poaching someone over. Yeah, so
it is one I brought up earlier than when people come to me. Because you know, our expertise is scale several other companies I was involved in scale globally and became large companies. And so that’s when people ask me, I can’t figure out why I’m not growing. Why am I not hitting a growth ramp? Why did my growth plateau? That’s one of the people come to me they want explosive growth, and they can’t figure out how to get there. And or at least exponential growth. So I would say that’s the first one, um, along those same lines is expanding into new geographies. People like how do I go global? With my products? That’s an area that’s a common one that I get a lot in an increasingly more global business world. Strategic Partnerships is one How do I form How do I get these big giant players in the industry? If you want to do business with me? I’m not big. How do I how do I cut a partnership deal? I would say but last one is more about the one we talked about, which is how do I attract? And how do I retain the top town? Those are the ones that people usually ask me.
And I don’t know if this is I kind of feel like it’s a separate question, but maybe they’re the same answers. And that’s okay. If they are when you’re working with the business owner and helping them with this exponential, you know, desire for growth. And what kind of challenges do you find it when you get a chance to work with their teams? Is it similar or different?
No, they’re similar. I’m give you two words trust and empowerment. You as the leader, tell them I believe in you, you’re my new, you know, right hand, you’re my VP of everything, whatever it is, you tell them that and you do not behave that way. You tell them that, that you trust them and you believe in them but you do not empower them. They still have to call you to get approval for a major decision. They still feel like if they made a mistake, they would be fired. They still feel like they cannot fail. Are there jobs that stay even though you have failed many times, they do not believe that you trust them and they do not feel empowered no matter what word you’re using your actions and your words do not match. That’s what I see the most is people don’t scale me say that you can’t scale until you get out of the way. You can’t get out of the way until you actually trust and empower people. And everyone says, I am doing it. Look at this email I wrote, you know, sit down this conversation I had, and I tell them, those are your words, your actions don’t match that your actions are Wait a minute, you told the people in London Well, why didn’t you call me Why wasn’t I on that call? Why didn’t you run it by me? And so they’re not trusted and they’re not empowered until you can actually allow somebody to fall not on purpose. But until you until that happens. And without you reacting like saying, I you know that old adage, if you want something done right, do it yourself. That’s the worst advice you could give a leader that wants to grow.
Excellent. Excellent descriptive trust and impairment super important.
I am just fascinated by the work that you’re doing their global entrepreneurship network. And so I just like for you to kind of share with us exactly what type of projects is Jeff solving or permitting? Um, our focus now is on the ecosystem itself. Entrepreneurship is a lonely game. So many of us know that. We need support from everywhere, whether it’s policy and government, like tax regulations, hiring laws, immigration laws, whether it’s the city we live in, like, I can’t afford rent and there’s an empty building down the street. Why can’t I use offices there, whether it’s education, from organizations like yours, or even universities preparing students for entrepreneurship as a career, hire them? funding, so the talent pools I was referring to funding. Why aren’t there more business angels In my community, there’s only there’s only high end VCs or banks or people that won’t loan money to anyone who actually needs it. Or they don’t want to do an equity investment. Those are all pieces of the ecosystem as Jen, our focus is on strengthening and building ecosystems everywhere in the world. So if you start a business, all the things you need around you to launch your business actually exist where you live. That’s our focus.
It’s no small mission. So no, it’s not. And what would be the easiest way for any listeners who are interested in either getting involved in or helping, like what would that look like?
We’re sure. So on that organization, That’s our website. My emails just Jeff at Jeff Hoffman.com and there’s plenty of plenty of opportunities to get involved. We need you know, we meaning entrepreneurs in the world and small business owners need all the help we can get with this Coronavirus? You know, obviously it is created a massive shift in disruption on what’s going on in the way we work and live. Do you have any sage advice or guidance or recommendations for business owners right now?
Yeah, I have published something called my three R’s, which I will send you a copy of you can post on your website for your listeners are well, but that came from talking to literally hundreds and hundreds of small business owners all over the world during this last month and a half during all this. And the three R’s are repurpose, retool and redeployed. Repurpose means looking at the skill set, you have the capabilities you have in your existing company, and trying to see if you can use your skills to solve some COVID related problems. And so you know what, exactly would be a small business owner that I work with and owns a small distillery. She makes vodka for a living, and no one’s the close so she has no business right now. But their skills and their tools were able to repurpose to make hand sanitizer. And now they’re selling out and she’s hiring like crazy. Because everyone in the world needs hand sanitizer she repurposed her business to do something her business could do to help retooling you. And I actually talked about retooling as a chance to add new skill sets to your business during this slow time. I gave you the example of a consumer goods company where all the employees got new certificates and applied artificial intelligence. And they’re building predictive behavior AI algorithms for their company that they’ll be up and running by the time they go back to business full time. And then redeploy, is really loaning your employees who have usable skills to people in your environment. That that could endure geographic geography they could use it again an example being a tech company. I know it’s kind of shut down now because they have nobody buying software, but they have graphic designers on their staff and they loan them to a hospital. The graphic designers offered to create graphics for a hospital to get communications out about Coronavirus right now, so that’s redeploying. So repurpose, retool, redeploy, are my three R’s for what business owners should be doing now?
Yeah. And I think that going forward, that is always applicable. So brilliant. I do too.
It’s just it’s just magnified.
If you share that with me, I will make sure that it gets added to the actual posting itself, or I will email it to you right when we’re done. Thank you, Jeff.
First, I just want to I just want to thank you. I want to make sure if anyone wants to follow you, you’ve provided your email and the website if they want to actually follow you as a fan. Where is your favorite? You know, channel?
Honestly, LinkedIn. I’m on LinkedIn more than anywhere else. Usually, if people there’s a lot of Jeff Hoffman’s, it’s a common name. So if you put in like Jeff Hoffman Priceline, it finds me fast.
Okay, fantastic. Excellent. Well, I very much appreciate you spending time with us here today. And just appreciate all the work that you’re doing with your Gen Network and sharing your guidance with us today. So thank you so much.
Thank you very much, everybody, stay safe.
Thank you and whatever you do, be deliberate.
Transcribed by https://otter.ai
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