What we talked about
Bill Canady joins Federico Ramallo to share simple, hard-earned leadership lessons from running and transforming billion-dollar businesses. Bill explains his “four commandments” for leading any organization: be data-driven (decide with 20–80% of the data), no surprises (share bad news fast), be on pace (avoid leaving people behind or becoming the bottleneck), and results matter (no “best efforts” culture). He describes how these rules create alignment, clarity, and accountability across teams.
Show notes
Bill Canady’s leadership framework boils down to four rules he can recite in under a minute, and he claims you can run any business in the world with them. What’s striking is how he arrived at them: a president who worked for him told Bill he had “no idea” things were not going well, which sent Bill straight to the whiteboard.
What we covered
- Bill’s Four Commandments emerged from a real crisis moment when a president told him he was shocked to hear things were not going well. Bill wrote them down on the spot: be data-driven, no surprises, be on pace, and results matter. He says any business problem you find will trace back to one of those four.
- On “be data-driven,” Bill draws a clear boundary: less than 20% information means you’re guessing, more than 80% means competitors have already moved. Leaders have to get comfortable living in between.
- His method for avoiding burnout is to set the goal, say, growing from $10M to $20M, and then ask the team member how they plan to get there. The leader who sets goals and dictates the method is the one who burns people out, because they’ve stripped ownership from the person doing the work.
- Bill uses a military analogy directly: a general tells troops which hill to take, then asks the people on the ground how they will do it, because they have the team and the logistics. That same principle applies in business, set the destination, then get out of the way.
- Arrowhead, where Bill is CEO, is north of a billion dollars in revenue operating across 50 countries in power sports and outdoor power equipment. His five-year goal is to reach $2 billion in revenue and lift profitability from just under 10% to 15%, while pivoting the brand story from parts supplier to “passion and protection.”
- Bill’s framing of that pivot is concrete: a rider suit with airbags that inflates when you fall off a bike. The question he asks is not what parts do people need, but what do they want to do and how do we keep them safe doing it, and that question tells you which markets to enter next.
About Bill
Bill Canady is the CEO of Arrowhead Engineered Products and chairman of OTC Industrial Technologies, having delivered over three billion dollars in shareholder value across multiple industries. He is also the founder of the 8020 Institute and the author of several books on profitable growth, including The 8020 CEO and From Panic to Profit.
- LinkedIn: https://www.linkedin.com/in/bill-canady
- Website: http://www.arrowheadepinc.com
{ 0f page.youtube_url Bill Canady’s leadership framework boils down to four rules he can recite in under a minute, and he claims you can run any business in the world with them. What’s striking is how he arrived at them: a president who worked for him told Bill he had “no idea” things were not going well, which sent Bill straight to the whiteboard.
What we covered
- Bill’s Four Commandments emerged from a real crisis moment when a president told him he was shocked to hear things were not going well. Bill wrote them down on the spot: be data-driven, no surprises, be on pace, and results matter. He says any business problem you find will trace back to one of those four.
- On “be data-driven,” Bill draws a clear boundary: less than 20% information means you’re guessing, more than 80% means competitors have already moved. Leaders have to get comfortable living in between.
- His method for avoiding burnout is to set the goal, say, growing from $10M to $20M, and then ask the team member how they plan to get there. The leader who sets goals and also dictates the method is the one who burns people out, because they’ve stripped ownership from the person doing the work.
- Bill uses a military analogy directly: a general tells troops which hill to take, then asks the people on the ground how they will do it, because they have the team and the logistics. That same principle applies in business, set the destination, then get out of the way.
- Arrowhead, where Bill is CEO, is north of a billion dollars in revenue operating across 50 countries in power sports and outdoor power equipment. His five-year goal is to reach $2 billion in revenue and lift profitability from just under 10% to 15%, while pivoting the brand story from parts supplier to “passion and protection.”
- Bill’s framing of that pivot is concrete: rider suits with airbags that inflate when you fall off a bike. The question he asks is not what parts do people need, but what do they want to do and how do you keep them safe doing it, and that question tells you which markets to enter next.
About Bill
Bill Canady is the CEO of Arrowhead Engineered Products and chairman of OTC Industrial Technologies, having delivered over three billion dollars in shareholder value across multiple industries. He is also the founder of the 8020 Institute and the author of several books on profitable growth, including The 8020 CEO and From Panic to Profit.
Episode 90 of the PreVetted Podcast.
Full transcript
Federico Ramallo (00:01) Welcome back to the pre-Vetted podcast where we spotlight extraordinary people and remarkable talent reshaping our world. Today, I’m joined by Bill Canady He’s a global business leader, best-selling author, and the creator of the profitable growth operating system. Bill has led and transformed billion-dollar companies across multiple industries, delivering over three billion in shareholder value.
He’s currently the CEO of Arrowhead, engineered products and chairman of OTC Industrial Technologies, known for bringing clarity, discipline and execution at real scale. He’s also the founder of the 8020 Institute and the author of the 8020 CEO, From Panic to Profit and the Rule of Three books that focus on helping leaders build businesses that are simpler, profitable and built to scale.
Bill, welcome to the show.
Bill Canady (01:00) Well, it’s great to be here. Thank you so much. And I’m so excited today.
Federico Ramallo (01:04) Yes, yes, I’m honored to have you here today. I think we’re going to have a lot of fun.
Bill Canady (01:10) I think so too.
thank you so much for having me.
Federico Ramallo (01:12) Great, great. So I was reading about your four commandments, right? Be on pace, be data driven, no surprises, and results matters, right? Why do you use them? How did you come up to them and why do you use them?
Bill Canady (01:27) You know, that is such an interesting story. I’ve been very blessed in my life and I’ve ran a lot of different businesses and things like that. And you want a way to communicate with your team about how things are going, how they’re doing, and a way to really be aligned. And so I remember it was kind of a challenging situation. I was having this conversation.
with the guy working for me, he was the president. I said, you know, I’m not really happy with the way things are going. And he told me, he goes, I had no idea. I’m shocked, right? And I was so surprised when he told me this that I sat down and I kind of quickly wrote down these four, what became known as the four commandments that I’m telling you, you can run any business in the world with these four very simple things. And so this is…
No particular order. So the first one is be data driven. And so we all run businesses like yourself and myself. And if you’ve got less than 20 % of the information, you’re just kind of guessing. And if you’ve got more than 80 % of the information, you probably have taken so long that everyone else has made decisions to go and buy you. So you have to be able to live in this world of ambiguity. But you do want to get all the information you can.
So trust your gut for sure, but go get the information. So first data-driven. Second one, no surprises. So fish, relatives, and bad news all stinks after three days. So we have to be honest and candid with each other and make sure that you know what’s going on. Now as a leader, it’s incumbent upon us to not kill the messenger, but you gotta have those conversations, right?
So no surprises. What’s happening? If we know early, we can get ahead of it. The third one is be on pace. So there’s a right speed you need to go at. So if you’re going too fast, you’re leaving your team behind, that’s not good. If you’re going too slow, you’re the bottleneck. And all of sudden, you’re holding everything up. And then the final one I actually think is the most important, and that is results matter.
A lot of times people will come in and they’ll say, Fradrico, I did the best I could, but I failed. And we cannot survive as a best efforts company. We actually have to win some. We don’t have to win them all, but we got to win some. So results matter, right? And we’ve got to put points on the board if we’re going to win. So like I said before, so no surprises, be data driven, be on pace, and results matter. And when something’s not going well, or even if it is going well,
Any issue you find will be tied back to one of those issues, right? It’ll be tied back to one of those. They didn’t get the data, so they were guessing. Things went bad, they didn’t tell anyone. They got way ahead of everyone, left them all behind, right? It would be one of those types of things to do it. So the four commandments with that simple philosophy, you can run any business in the world.
Federico Ramallo (04:31) I think that’s amazing because you’re, you know, distilling, you know, so many insights. when I’m listening to you and I’m saying, yes, yes, yes, everything, you know, applies to my business. So I find that very interesting.
Bill Canady (04:47) Yeah, it’s kind of funny, know, when you get a new employee and they come in, they’re not really sure what to do. If you’re a small business, maybe you don’t even have good processes put together. But if you start having this conversation around, this is what’s important, this is what we’re focused on, these are how I’m gonna measure you. People will understand it. And having that conversation with your team, with your customers, with your suppliers, with your board members.
It gets everything out there and it gives people permission to start asking tougher questions and expect better results.
Federico Ramallo (05:23) Right. How do you push for results without burning people out?
Bill Canady (05:28) Boy, that is a great question. It’s probably the hardest one because, there’s only so many hours in a day and there’s only so much that can be done. So you can’t say, work harder or work the weekends or whatever. People have times they can work and times they can’t. They’ve got to have some balance in their life. So the way I do it, actually, and I find this works really well when I come in. So I do a lot of turnarounds in businesses. I’ll come into companies not doing very well.
And so I have my job, my team has their job, right? And so my job as the leader is to set the goal. The goal is what we’re here to accomplish. Generally, it’s quantitative. we were at a, I’m just gonna make up numbers. So we’re at $10 million, we wanna get the $20 million, right? Or we’re at a million dollars, we wanna get it to whatever it is. I will set that goal and that goal will be based on
whatever result we’re looking for. So sometimes the board says we gotta grow so much, sometimes investors, whatever it is. But we agree, I’m at 10 and we’re gonna go to 20. So you and I were working together and I say, Frederico, my goal is to get it from 10 to 20, we gotta grow by $10 million. And you’re running a piece of my business. And I say to you, what are you gonna do? What’s the strategy to deliver this growth? And you’re gonna tell me.
Right? Because remember, you’re already here. You’re an expert. You know what you’re doing. You’re going to tell me, this is how you actually drive great change in a business. Because I’ve set the goal. I’ve set the destination. Your job is you’re going to tell me how we’re going to achieve that through your position. You now own that. I don’t need to tell you what to go do. I don’t need to tell you what to do, because it’s your strategy to grow the business.
on that piece. And what happens where people burn themselves out, where leaders overreach is not only do they set the goal, but they also tell you how to go do your job. Let the person tell you how they’re going to accomplish whatever that goal is, what their strategy is to get there. And you see this in the military a lot around the world. You’ll have a general, right? The president, whoever it is, sitting there saying, our goal is to take this hill. We’re going to go take this hill.
this valley, this whatever, and they’ll look at to the people on the ground, the people who are in charge of it, and they’ll say, how are you going to get there? Because you’ve got the team, you’ve got the logistics, they have to figure that out. Because they own the strategy of doing it, they will not burn themselves out. They’ll actually work at the pace that they’ve set because I didn’t come up with something that wouldn’t work. It’s their own vision. When people have control and feel they’re valued and they’ve been heard,
and that they’re aligned where they’re going to do it, they work at a pace that’s appropriate for them.
Federico Ramallo (08:17) Amazing, it took me a while to realize that, you know, as a founder, I have a set of standards for myself, right? That then I start trying to apply to everybody else, right? But it took me a while to learn that what I can expect of myself is not the same what I can expect from an employee, right? ⁓ And it took me a while. Sorry?
Bill Canady (08:24) That’s right.
Exactly right. We have two jobs.
We have two jobs, Frederico, as founders and owners. One is we want to tell people what our values are. Like we’re not going to cheat. We’re not going to steal. We’re going to be good business people. We’re going to treat people with dignity and respect. So that’s our values. This is how we’re going to run this company with it, right? The second goal or the second job we have is to make sure
to make sure that our team understands their tools, right? They’re like, maybe you got a machine they gotta run, you gotta make sure they’re trained on how to run that machine. Maybe they got a delivery route, they gotta know how to drive the car, they gotta know how to load stuff and all that. So as that leader, particularly as a small company, as a founder, it’s your job to let people know this is how you’ll conduct business with this dignity and honor, and you need to make sure they know how to do their job, whatever their job is. From that,
point, they have to decide how much time and energy they’re going to put into it. Right? So if you’ve, if you set the goal and you said, well, look, our goal is we have to deliver these parts in the same day and you know how to drive the truck. I’ve showed you how they operate the machines. You know where you’re going. Their job is to get that done during that period of time. I don’t actually have to tell them any more than that. Now their job is to go do it.
Because as a founder, you may work a little harder, you may go a little further than what they are, but you set the parameters for their job. Now it’s your job is to get out of their way and let them go do their job.
Federico Ramallo (10:18) Right, right. I used to, know, again, this is a learning process for me. I went to tell them exactly what to do, where they would, you know, employees will come back to me and say, you know, on any decision they would ask me, right? What should we do in this situation? Right. It took me a while to realize, right? Well, I cannot drive from the backseat. Right.
Bill Canady (10:37) Yes.
Really good. Boy, that’s really inside.
Federico Ramallo (10:49) And then being able to delegate that and say, well, this is where we want to go. And then you drive, right? Again, it’s more of a realization throughout the years, Or maturity, right? And then the other thing that I realized is if I give them an employee too many options, they freeze, right? So…
Bill Canady (11:01) Really?
Federico Ramallo (11:12) I realized that I have to be able to draw the lines of the game, right? If you play football, if you play whatever sport, you have a game field, right? You have lines drawn on the field, you play within that space, right? So, I learned that I have to be specific on what is the box of, know, operation box for the role so they can…
do their job within that. And the bigger the field that I can make, the better they’re going to respond, right?
Bill Canady (11:45) That is so insightful. And that’s where a lot of small businesses go wrong is they’re the founder, they’re the owner of the business, they created it, they know how to do everything, but they don’t have anything written down. So they haven’t really written the rules down. They haven’t put the lines on the field. They hire someone, they come in and they say, go do this. And the person doesn’t know how to do the job. And it is really, really hard, particularly if you’re small, let’s say you’re a one person business.
How do you find time to run the business, write down all these processes, train someone new, keep your customers happy? And so it takes a very special person to go from a solopreneur, they’ve got themselves in one business, to truly running a business, working on the business instead of in the business. The amount of time and energy and effort it takes is extraordinary. Not everyone can make that leap.
Federico Ramallo (12:41) Right, right. I call my business Post the E-Myth Book, where I was able to detach myself from the operation of the company and be able to manage the company. you know, being able to… How many days can I be afar without intervention, right? And being able to play with that, you know, ⁓ as much as possible.
Bill Canady (13:03) Yeah, because if you’ve got to read every
day, you don’t have a business, you have a job.
Federico Ramallo (13:08) Yes, yes. And again, it’s those things that the way that I describe this is this idea of, you you’re on a floor on a building, right? You can walk around everywhere. It’s an infinite floor, right? But you cannot go to the next level until you’re right on the spot where there’s a hole that you can go to the next level, right? ⁓
Bill Canady (13:32) Mm-hmm.
Federico Ramallo (13:33) Once you’re on the next level, you have a new world, a new floor to explore, a new perspective of the world, which is hard to transmit to the person that was right next to you on the bottom floor. But it’s not until you’re right there at that spot that you can go to the next floor and elevate yourself. I find that that same principle applies for these learnings.
you have to walk it in order to learn it.
Bill Canady (14:00) It’s really true, right? mean, what a great example. People get ahead of themselves, right? They get off pace. They’re trying to go to the next floor too early. They’re not ready. They don’t know how to get to the next floor. And if they did get there, they wouldn’t know what to do with it, right? So building your business and taking these steps and making sure the foundation is solid and ready to go and then going to the next is really important. But if you spend too long in your current, you’ll never grow your business. So it’s a
It’s a struggle and it takes a really special person who can build a business, grow a business. Peter Thiel, now I think I’m saying his last name right, very famous investor, started PayPal and all that. He wrote a book from zero to one, I think it’s called Zero to One. It’s versus one to in, right? So it’s much easier to run an existing business than it is to start it from scratch.
Federico Ramallo (14:43) Yes.
Bill Canady (14:51) because you have processes, have all this stuff already exist, you have existing customers. But to build that, know when the time to go from the floor to the next floor to the next floor is really critical. And there’s no one really giving you a map to do it.
Federico Ramallo (15:06) Right, right. And you have to reinvent yourself as CEO because what the business needs changes through different stages of the business.
Bill Canady (15:17) So well said.
Federico Ramallo (15:19) Yeah, I I used to code with everybody else on the team, I’m software engineer, right? So going from there to becoming a manager of the team and then becoming a CEO where the team is working on the day to day, for me, it’s been an interesting growth.
Bill Canady (15:23) Yeah.
What was the big change you had to make to do that?
Federico Ramallo (15:42) First, build trust with the people that I had that they would be able to manage and then learn this delegate, truly delegate. I thought I was delegating, but I wasn’t. And being able to distribute decision making. I read about this system, business process management notation system, which was overkill for my company, but it was good enough for me to understand
this concept of delegate to the lowest hierarchy possible by designing decisions beforehand. So, I tried to implement BPMN, but it was too complex for what we were doing. And I didn’t need a million dollar ERP, SAP or any of those software because of our company.
didn’t have that budget and didn’t make sense for the operation, the complexity of operation. But it was good enough for me to understand, these are the things I need to do, right? Figure out the workflows, figure out the decisions, what are the decisions, what can I make? How can I…
you know, pre-make those decisions before happened, right? And then from there, I refactor my company towards being able to make decisions beforehand. And, you know, I turn a business ambiguity into a engineering problem, which is something I, you know, it was within my realm of understanding and, you know, workflows, conditions, those type of things, things that I…
Bill Canady (16:52) Mm-hmm.
Federico Ramallo (17:07) I understand, right? So that worked really well for me.
Bill Canady (17:12) Very impressive. Yeah, it makes a big difference to make that transition and lot of people can’t do it. You should be very proud of yourself.
Federico Ramallo (17:20) Thank you, thank you. Yeah, I mean, eventually I learned that I’m doing stuff that I don’t know the name of the stuff that I’m doing, if that makes sense, right? So once I learned the name, how other people call it, then I connect the dots and I learn a little bit more. And then I compare notes of, I came up with this idea or this theory or this framework that I made up.
that it’s pretty similar to what other people made, so I’m not that bad, you know, off the mark, right?
Bill Canady (17:52) It sounds like you did great. It takes a lot of moxie to start all this and guys who do it and folks who do this are a special breed and you have to press through. I’ve started a lot of different businesses and I certainly have this idea, but it morphs over time. Where I thought I might be successful, I’m not always successful, where I hadn’t thought of, I do. But if you’re in the business, if you’ve got your hands dirty, you’re in there and you’re working on it,
you will start finding out this is what makes you special. This is what customers are looking for. And this is how you like to work. right. And it’s really, it’s really be quite rewarding, but it’s exhausting too, right? So, and people want to be business owners, but because they think, the lifestyle, I make a lot of money and I’ll work when I want. You can make a lot of money, but you work all the time.
Federico Ramallo (18:42) Yes, yes. And I was telling you off camera that, you know, with my wife, we’re 13 years now, and she’s also my co-founder. So there’s also that additional complexity, which, you know… Yes, yes. And we were able to figure it out. Yeah, because…
Bill Canady (18:58) my. Does he still work with you in the business?
So what are
the different roles? What do you do and what does she do?
Federico Ramallo (19:11) So I’m the CEO and she’s the CFO. she, ⁓ yeah, she’s finance. I’m the dreamer, I’m the technician. I’m a little bit of everything, but she also is my anchor, right? When I’m dreaming too much, right? She puts me down to earth and then we negotiate something in between and that’s the beauty of it, yeah.
Bill Canady (19:14) He’s fine.
That’s a special relationship to be able to work together and be married. So it’s like you work all day and then you at home at night, which may just be the same place you were at all day. And in order to keep that and raise a family with your 10 year old, that’s quite impressive, Frederico, to be able to really, really do that. So are you still coding? Do you still do all that today?
Federico Ramallo (20:01) Less and
less. mean, because the issue is I have more interruptions throughout the day that doesn’t allow me to focus on coding. So I’m more efficient on managing coders and coding myself. But I do code a little bit more. My son wants to get into coding now. So I’m getting back into it because of him, right? So he’s asking me to come back to coding.
Bill Canady (20:06) Yeah.
Yeah.
Wow.
Federico Ramallo (20:31) That’s interesting.
Bill Canady (20:32) No
kidding. So he wants it. Is there a language or a special that you use a lot or is it more, know, today with AI and all this other stuff, you know, so.
Federico Ramallo (20:44) Yeah, so my mom is also a software engineer. She’s actually data science, and she’s teaching kids robotics and programming. she’s teaching my son coding with blocks. So basically you drag and drop blocks of code. So for the kids, it’s a graphical interface, kind of like playing Lego.
Bill Canady (21:01) Mm-hmm.
Federico Ramallo (21:06) and then they can learn the basics. But my son, you know, it’s both a blessing and a curse when you raise a kid that is self-confident because his ambitions are way beyond what the platform can do, right? So, and even though I tried to explain that to him, he’s like…
yes, yes, I understand that the platform cannot do that, but I want to do it, right? So, you know, then we have to try until, you know, we find the limitations, And then the blocks, basically behind the block, it’s a piece of code, right? So I’m trying to go towards that transition of, there is is text behind this block. If you learn how to write that text, then
Bill Canady (21:29) Yeah.
Federico Ramallo (21:47) you can give more advanced instructions to the computer. So we’re going through that transition.
Bill Canady (21:52) Well, he’s 10, so he’s already like a genius then.
Federico Ramallo (21:56) Yes, they’re doing object analysis on the images. So he shows a teddy bear and the code can identify the teddy bear or a bunny or different bunnies. And he loves that experience, right? Because it’s something fun for him.
and he has all the support of all the family and he’s… Yes, yes.
Bill Canady (22:17) You said your mom’s a coder too?
Does she teach you how to code?
Federico Ramallo (22:22) So I, a little bit, but I was mostly self-learned, but both my parents are engineers, so they taught me a lot of the basics. And then I studied, actually studied industrial engineering. So I’m more of a generalist, knowing about manufacturing processes, but I did my first startup at 16 and then…
I was hired by Microsoft so I kind of got into software because of that
Bill Canady (22:59) That is so impressive. So manufacturing and industrial, that’s in my realm of what I do. So that is really, really neat. So you learned when you were just a little kid. that’s, wow, how old were you when you first started coding?
Federico Ramallo (23:14) So I started coding with Atari, Atari 2600. They had a program where you could do math, so you could learn how to do plus, minus, greater than, less than. So I started learning with that and then being able to load the games. So I started, my coding was Shell.
Bill Canady (23:20) I remember the Ataris.
Federico Ramallo (23:40) basically being able to run the programs, being able to connect the computers together. My first computer was, you it didn’t have the money to buy a PC, but I was fixing PCs. So my first computer was the spare parts of other people’s computers, right? And I didn’t have the money for the frame, you know, the case. So my computer was spread out on a table, right? Again, it’s low voltage. you know,
Bill Canady (23:59) case.
Federico Ramallo (24:08) As long as I knew it was high voltage, low voltage, know, I was kind of okay, right? Yeah, yeah, yeah. I blew up so many transformers because in Argentina you have 220 and the power was… it had a switch for 110 and 220, so you had to be very careful about how to connect everything together. I blew a few of those, you know, in that learning process. So that was…
Bill Canady (24:11) Yeah, don’t touch this. This will light you up. This one’s OK.
Did your mom help you build the computers and everything?
Federico Ramallo (24:36) Well, yes, but by that time, I was able to ask her for specifics, because at the time you had to connect the speed of the RAM with the speed of the CPU and everything together. And my main motivation for that was playing, you probably remember this game, Microsoft Flight Simulator. The first version was Vectors.
just black screen with vectors. ⁓ Yeah, yeah, yeah. So that was my main motivation to build a computer, right?
Bill Canady (24:59) with vectors on it.
kidding wow
and how old were you again were you as young as your son or were you
Federico Ramallo (25:12) So, yes, actually, before that, in 1984, I showed up at an IBM conference and I learned to type the keyboard before learning to write. Therefore, my handwriting is horrible, right? Because of that. My thinking was…
Bill Canady (25:31) Yeah.
Federico Ramallo (25:33) what is the point of writing down if I can press a button and then I’m going to have a key on the keyboard right?
Bill Canady (25:38) And it has a spell check, so it doesn’t even matter if I spell. All
I just need to know how to input this stuff. So no kidding. Wow, that’s impressive. And your wife, she’s the financial genius. So does she do coding at all or anything, or she likes bookkeeping?
Federico Ramallo (25:55) She’s doing bootkeeping, finance. Right now she’s doing performance evaluations. She’s getting more into the business. She’s doing collections. She’s been growing on her role a lot and doing it on an international level, right? Because we have companies in the US, companies in Mexico, right? And other countries. So she’s been doing the international inter…
currency exchange kind of thing as well how you know how do you do bookkeeping with multi-currency things right yes
Bill Canady (26:28) It’s very sophisticated. So I
deal a little bit with that myself. So wow, that’s really, how did she get started being in finance?
Federico Ramallo (26:37) So she studied that at the university and then when the business needed more, I would encourage her to learn more about finance and she’s been growing year over year. So I’m very proud of her, everything she’s doing.
Bill Canady (26:52) Does she do this before you got married or is this something after you guys got married and you got in business?
Federico Ramallo (26:57) So we worked together before and then when I had the opportunity to start this company, I invited her to join me and she was, yeah, let’s do it, right? ⁓
Bill Canady (27:10) This was before
you were married.
Federico Ramallo (27:13) Yes, yes, we started first before we got married then we when we started this company were already married. So it was a no brainer to continue working together, right? Yeah, and now she’s running multiple companies because again, you know, now that we have, we were able to detach ourselves from the company. Now she’s running another company and you know, doing…
Bill Canady (27:22) Wow, that’s…
Uh-huh.
Or someone else
or is it your business?
Federico Ramallo (27:36) with her brother. They’re doing industrial…
catering. They take care of catering.
Bill Canady (27:41) catering, take food
out to businesses and things like that.
Federico Ramallo (27:45) yet they take care of feeding people on different farms that are growing avocados or growing cherries or blueberries, you know, and they have hundreds of people and it’s a logistical nightmare, right? So, you know, they have hundreds of people, sometimes they bring, you know, hundred people more in and they have to figure out how they’re going to feed them, right? And they are in these remote locations, some…
are you know you have the climate or the roads get closed right so it becomes a logistical nightmare and also a financial risk they have to manage that as well so she’s helping that on taking a lot of the things we learn on this company into that other company so yeah she’s doing great she’s the anchor as well of saying
Yeah, we can dream of all of these, but these are the numbers, right? She’s a very, you know, cold numbers, you know. So she brings me back and her brother, you know, on, you know, we’re both dreamers, so yeah.
Bill Canady (28:51) How’s this business doing?
Federico Ramallo (28:53) It’s been doing great. mean, they’ve been taking more and more.
operations on different factories and they are building now a center for logistics centers so they can do the prep in one place and then distribute the food every day.
Bill Canady (29:15) Does he have his own farms and all that for it or is he buying it and then just fixing it?
Federico Ramallo (29:21) he’s buying the food and then delivering it to the different locations. We have in the area, are places where they are isolated. they have, funny enough, there’s one that has a landing strip, right? So you have, you go through the road and then on the left side they have the plantation and then on the right side they have the houses for the workers. And then right next to the road,
they have a highway, a land strip. So an airplane will land there and then they will pay people in cash and then they would, you know, they would leave again with a jet, right? So it’s very, it’s a very bizarre, you know, place, right? And part of…
Bill Canady (30:02) And is he catering for
the airplanes or is he catering for the employees? Who does he cater to?
Federico Ramallo (30:07) He’s caring to the employees. So the employees are working there. They don’t have a vehicle. So they are attached to that location and they need groceries, food for every day. sometimes they need some, he’s taking orders for a request, know, think of a local Amazon, right? So I’m thinking that that’s a very smart thing to do.
Bill Canady (30:32) That is amazing. So she helps him and Andrew. Sounds like she’s got a very busy schedule.
Federico Ramallo (30:38) Yes, yes. But the, again, I mean, I always joke that it is both a blessing and a curse, right? Because we have the freedom to manage our time, right? But also, you know, when there’s firefighting, then we’re both busy, you know, just dealing with stuff, right? ⁓ Yes, yes. ⁓
Bill Canady (30:57) That’s right, you gotta look after the business, look after your son. Isn’t that something?
So what does the future hold? What are you gonna grow to next, right? So you got a SaaS business, right? And you got a helping your brother-in-law with the catering.
Federico Ramallo (31:10) Yeah, mean, our business is consulting, so we’re doing stuff augmentation, high quality stuff augmentation. That’s my business density labs. And then the other business that I started is, because of that, I needed to improve my recruiting process, right? Recruiting and screening process, technical people. So we’ve been able to do pretty well on that process. Again, I overbuilt this process, so you know.
My idea is zero false positives. So, you know, if we’re presenting somebody to a client, the client trusts us, then I have to vouch for that candidate, right? So after being able to achieve 100 % success rate over the last four five years for every candidate that I presented, then I thought, okay, how can I productize that screening process? And that’s what I’m trying to build.
with privet.ai, we’re automating that process using AI and we’re trying to get an AI agent to do the screening. There are a few hypotheses we’re trying to test out. One of them is the quality of the screening and then the other one is would a really good candidate will be willing to go through an agent interview, right?
You know, because an average candidate, I think, yes, but a really good candidate. It’s it’s we might have issues there because they’re looking for more of a higher experience. So we’re testing that that that hypothesis. And then I have these five years of backlog of interviews that I’m using to to test.
my agent to see how it goes, right? I have the… Yes.
Bill Canady (32:56) On the AI agent? What’s
the foundation or what LLM are you using? you Gemiini, Jack GPT, Claude?
Federico Ramallo (33:06) So we started with GPT and then we’re starting to try another one. Actually, I’m trying to host, I’m hosting our own LLMs and comparing that with commercial LLMs because my thinking is if I can host the LLMs, I will have a better privacy and I will not be sharing the data with the service provider.
I don’t know how much relevant that would be, but that’s kind of my thinking. Yeah, and then the other thing we’re doing is we are building the voice agent, right? So you can interview with the agent, right? So I’m doing it on stages, but my first stage is human in the loop. So the agent is giving more of, is on the backend and giving recommendations.
rather than making decisions. And then we’re building the agent to interview, which is a simpler process because the only thing the agent needs to do is keep asking the questions that we give them, making sure. And then we can evaluate the answers based on that.
Bill Canady (34:01) Yeah.
Interesting. Yeah, we, I sat on the board of a university and we have an AI agent, people who recruit all over the world and people call in and they’ll speak Chinese, they speak Spanish, they speak whatever. And, you know, it’s very simple. They can answer questions, send information, things like that. And we’ve had that now for a little while. That’s helped a lot. I think your insight to what kind of candidate
will want to interview with an AI agent. I think you’re onto something there. A high-end candidate for a high-end job is probably wanting something. They’re probably going to want to skip through a lot of that stuff. You know what I mean? like their tolerance, if they don’t need a job and all that, their tolerance to sometimes go through processes is not very
Federico Ramallo (35:01) Yes, yes. that’s one of my hypotheses. The high value, you know, the senior engineers who prefer a more personal approach. Yeah, but one of the things we are doing on or we commit. So when we set the invitation, we set, it’s not commandments, but similar, we set our grant rules. One of the things that we commit as a company.
Bill Canady (35:13) Yeah.
Federico Ramallo (35:29) for every person that goes through our process. And one of things we do is we commit to give feedback to the candidate what are things they need to do to improve, right? Because I’ve seen a lot of recruiting processes that ghost candidates, right? And so we try to provide that feedback, right? We choose the best 2%, so we give the 98%.
Bill Canady (35:40) Mm-hmm.
Yeah, for sure happens all the time.
Federico Ramallo (35:58) what they need to do to do better. And we try to give them hope and we invite them to a play again, right? So read this book, follow this practice, you know, whatever it is, and then a play again in six months, a play again in a year, right?
Bill Canady (36:12) What kind
of jobs are these? These would be for engineers primarily?
Federico Ramallo (36:16) Yeah, so we started with engineering, so software engineering, but then I expanded to QA and design because this is a little bit of tangent, but when I was coding, I was mostly focused on building the highest quality code possible until I realized that’s fine, but I started to need to think about what are the user needs, right?
Because if I don’t understand why the user needs this feature, then I could be writing the most beautiful code that nobody’s going to use because it’s going to be useless, right? So that’s how I got involved into the product owner role. Because on software, you’re thinking on the how to build it, and then on the product, you’re thinking on what to build it.
and why, right? ⁓ And then involving the QA, we involve the QA in following Ford’s idea of fixing quality as early as possible, so we save time. And then we bring the design team because that way the design can convey the requirements from the product owner in a much, you know, clear way. So…
Bill Canady (37:11) Yeah.
Federico Ramallo (37:33) The best way that I can explain this is if you’ve seen friends where they couch episode, where they’re with the couch, it’s easier to just provide the requirements once and then give it to the developer so they can build it without interruption dependencies and whatnot. So that has been my evolution of those roles. And then from there, I start doing non-technical roles, administration, recruiting, SDRs.
Bill Canady (37:46) Mm-hmm.
Federico Ramallo (37:59) a assistance, virtual assistants and account executives, right? And we’ve been successful in those roles as well on finding right candidates for those roles.
Bill Canady (38:12) That’s really interesting. you know, we, we’ve used GPTs and others. She told about feedback. One of the things that we found helpful is if you take your interviews and you record them and you upload them into a, you know, GPT or whoever, you can, you can say, well, these are my successful interviews. These are my unsuccessful.
ones and then you can rapidly build a kind of a rubic or a model that says successful candidates have these characteristics and unsuccessful have these characteristics, right? And you can determine they’re statistically significant or not. So if you give 90 feedback to the 98 % that don’t do it, in theory, you should be able to say, look, here’s what a good candidate, the qualities are gonna have.
and we can prove it, right? And then we took your information, you if you’ll go through this, we’ll take this and we’ll overlay it to these and we can tell you with pretty high certainty if you’re going to make it or not based on it. you could, that’s automation could, you know, it might make people who are probably younger in their career or not as experienced who are really, really trying to understand their gaps. could, you you could, you could quickly tell them.
You could have some kind of meter that says you’re in the red or the green because you answer questions this way.
Federico Ramallo (39:42) Right, that’s what we’re doing with the interviews that we have. We’re starting to iterate toward having a more accurate model.
Bill Canady (39:50) You could do the whole thing automated, right? Maybe you already do it. You do it all automated. They come in, they answer these questions and it tapes them and there’s no human interaction.
Federico Ramallo (40:00) That’s the second stage that we’re building in order to do that. Yeah. And with that, we can give the manager, the hiring managers, the opportunity to customize their screening process. Because so far we’ve been doing it, what I called God-like approach, right? Which basically is we approve with our mighty finger, right? Who is worthy and who is not, right? Which…
Bill Canady (40:25) Who’s gonna go?
Federico Ramallo (40:26) Right, which is okay for most cases, but if we can delegate that criteria to the hiring manager, then that could be a game changer because then we give them more access to the model to make better decisions.
Bill Canady (40:41) Mm-hmm.
Federico Ramallo (40:42) Yeah, one thing that we have not been able to, or we don’t think we will be able to automate is one of the things that we do is we do pair programming with the people because the best way for me to evaluate a candidate is to work with them. And that is a simplified version of working with that person, right? We can weed out a lot of bad candidate with that.
Bill Canady (41:04) Yeah, I think so. We have what we call co-botting. So you’ve got a human being and a robot, like in factories, you’ll have an arm. So the jobs that are dirty, dangerous, or dull, people hurt themselves in those jobs. And so maybe we have an arm, a robot arm that sweeps the stuff over. And so a human does that. But then the sophisticated stuff or the thing that requires constant change, a human being does that, right?
So with what you’ve got, you could do a co-botting piece where you could have someone come in, go through the AI interview, answer the questions, and then get an overlay to say, you know, with the answers you gave you, you’d be highly likely or highly unlikely or somewhere in the middle. And then that could then get them to meet you or someone like you. And then you say, all right, so let’s go through this thing. Because your first one is, do you have qualifications? Can you do the job? The second one is fit and fit.
At this point, most of the stuff, we haven’t been able to get a machine or a robot to tell us if someone fits or not. That’s how they make you feel, right, Alpha? So your first one could be skill-based. Your second one could be fit-based.
Federico Ramallo (42:17) Right, right. We’re doing it in…
Bill Canady (42:19) Good time for you figured
all this stuff out. I don’t think I’m offering you any insight.
Federico Ramallo (42:24) Yes, but I think it’s interesting to talk about this stuff because it also helps me validate that what I’m doing is, yeah. We’re doing those both the fit and the skill. We do it in two levels. One is asking questions, behavioral questions, asking technical questions with a non-technical interviewer.
So they have the answers, but so they don’t really know if the nuances, right? ⁓ But that’s good enough to because then we have the technical evaluator going deeper, right? But at that time, we know what specific things to ask, what are things that we find are weak points so we can go and dig a little bit more on that. And then we have the pairing, right?
Bill Canady (42:45) Yeah.
Mm-hmm.
Federico Ramallo (43:11) The idea is to try to reduce how much time we spend, right? But at the end of the day, we’re spending 250 hours for every candidate that pass our system.
Bill Canady (43:20) of human time or total time in the system.
Federico Ramallo (43:24) Human time.
Bill Canady (43:25) That is a lot. I mean, that’s an extraordinary amount, actually. Yeah, that’s extraordinary, because you do something like that, that’s almost seven weeks of time.
Federico Ramallo (43:26) Yes, yes, as I said, it’s overbuilt. Yeah.
Yes, yes. So we tried to optimize that with the process. But sometimes when we cut corners, we realized, well, there was a reason we were doing that because the quality of the output gets affected. So, you know.
Bill Canady (43:59) Yeah, if you’ve got a really good process and it takes you 240 hours, 250 hours, how do you maintain the quality of process and get it down to 10 hours, five hours, right? What does that look like? Interesting. So is that, when you think about your future and you’ve got your coding that you’ve done, developing different softwares and now you’re really recruiting, where do you see your company going?
Federico Ramallo (44:24) Well, mean, my thinking is if once we can build this product, get and get revenue with this new product, then we can go from a service company to a product.
Bill Canady (44:33) Service as we recruit for you today and then tomorrow it would be we’ll sell you the product and you can do your own recruiting using our product.
Federico Ramallo (44:44) Yes, right now we’re doing staff augmentation services. So we build software engineering teams for companies in the US and that’s a boutique service. So it’s customized for every customer. And that’s a high involvement process. So it’s a low volume, high involvement process. With this tool, we will be able to provide a product that will allow…
customers to design their screening, run through the process. And what we’re thinking is to allow them to set up agents and humans to do the service and then build a token system so they can, we have an economy for the humans involved, right? ⁓ That way they can have both. They can say, well, we delegate this to your humans or
Bill Canady (45:23) Yeah.
Federico Ramallo (45:30) our humans, They can run the interviews themselves, but they have the context of all the previous steps, right? So they have a better context of the candidate, right? That’s where I think this product might go, right? So I’m doing customer development to validate some of those assumptions. I quite understand the hiring side, on the screening side.
and working on understanding the hiring practice on the HR side.
Bill Canady (45:58) Hmm. You know, as a, as the CEO, most of the candidates I interview before they get to me, I know that they can do the job, right? Cause they’ve gone through all the pre-screening, they’ve had all the tests. So I don’t spend any time at all questioning anyone on their qualifications for a job. Right. ⁓ what I spend my time on is, I think they represent our values? Will they fit with the team?
Federico Ramallo (46:19) Right.
Bill Canady (46:25) And so, you know, cause the table sticks is the job skills, making our team great. Like math is math, right? So can you work with people? Can you make them better? Right? So, you know, if you have a service that can help small companies who don’t have HR teams go through and say, I know that this person, you know, can do the job. Now, do you want to work with them or not? Right? Will you?
go have a tequila with them in the evening when you want to go have a tequila with them, right? So if you can do that, there’s gotta be, because most services today focus on connecting, right? You have a job, you want a job, how do I get you two people together? And most small businesses, they don’t really know what they want. And they know they got this thing, but it’s a weird hybrid thing that doesn’t exist anywhere else, right? Cause their business small is unique, it’s always unique.
but if you can reduce it down to a set of skills and then, and then, and then, be able to select people where they have that or not. And then you’re a hiring manager. You say, I know this person can code. know they can, I know they can do QA. I know they can do whatever it is. I know that I have high confidence. I just need to figure out if you can work in my system. So yeah, it’s pretty, pretty clever idea. When have you launched it yet?
Federico Ramallo (47:44) We launched our first version. So the first version has AI for assisting on the background. We’re working on a second version where the AI can do the initial evaluations. And then the third stage is having the agent to run the screen with the candidates directly. Yeah. Yeah, on the service side,
What we do is, because I’ve seen companies like that where they throw bodies at it, right? And they connect candidate with company and good luck by, right? What we do is we stay as employer of record, we stay as local oversight. And my approach is we should be the one to raise the flag before everybody else, right?
Bill Canady (48:15) Mm-hmm.
Federico Ramallo (48:31) we should detect issues before everybody else, right? Try to stay ahead of the game, right? Most of the time we do, sometimes we miss a few things, but my intention is to say, we see a risk here, this is how we’re planning to work on it, and this is our next steps, right? So we do local oversight, and then we have a backfill ready in case the worst case scenario happens, right?
you know, we’ve done backfills in a day, in four hours, right? Which is, you know, again, overkill, but my thinking is, I want to… So the first question that our clients ask is, can you find good candidates or good people? Once they find out that we do, then the second question they ask is, can you keep them longer because they’re doing a great job, right? And then after that,
if that person quits or they have performance issues, then that person is critical on the team. So we have a backfill ready and a plan for knowledge transfer so we can reduce the impact of that person living as much as possible.
Bill Canady (49:36) No, that makes a ton of sense. know, we, when we have to hire someone, uh, depending on what they do, you have to find them, you have to verify and vet them. Then you got to decide if you want to hire them. have to leave their previous employer. They have to come in and start your job and all that. And generally about the fastest you can get it done. If you don’t have a relationship with them is about 90 days from zero. need, I have an opening to the field.
90 days is considered quite fast. And you can hire people in four hours and all that sort of stuff and all that, but just as a general rule. And if you’re in Europe or in Latin America, it can take much, much longer depending on their contracts. And that’s six months, sometimes a year, because we’ve got to finish out their other contract. They may be restricted from doing something in the meantime. So having the speed to get someone through that process and get them.
Federico Ramallo (50:28) Right.
Bill Canady (50:33) as a productive member is very bad.
Federico Ramallo (50:35) Right, that’s kind of how the name PreVered came in because it’s been our bench. for roles that we already have a screening process designed, we can find candidates in two days, right? One business day, and the manager can interview them. For a new role where we have to design the screening process from scratch, right? Most of the time it’s something in between because we can take
you know, one process, a software engineer that requires to need no React or requires to know Next.js is very similar. 80 % is the same process, right? So we make the adjustments, right? But, and then we work towards the people that candidates were already screened. So we can reevaluate candidates if there’s any requirements. So usually that’s, you know, a day, two days.
a week at most. For a new complete process, it takes us six weeks to find the first candidates. So we’re doing pretty fast compared to the 90 days that you’re mentioning, right? ⁓ Yeah, but…
Bill Canady (51:43) That’s Yeah.
And it’s technical, which is nice because you can, you can be very quantifiable versus say it’s a really soft scale job. That’s more.
Federico Ramallo (51:47) Right.
Bill Canady (51:52) not well defined. Yeah, so that makes it nice. And you can test for it. You can run tests to see if they have the skill or
Federico Ramallo (52:00) Yes, when we do a new process, we usually try to the first two or three candidates, and we get feedback from the manager where we fine-tune. Sometimes we miss something. But once we, after the four candidates that go through the process, we have zero false positives. Right.
Bill Canady (52:14) Now know what you want, you’ve got a, you’ve got
kind of a test case and everything. this is cool. Well, that’s good. Well, congratulations on this. This will, this will be great. Are there other people in the industry doing this? Do you have competitors who doing it like you are? Or is this something new and unique?
Federico Ramallo (52:30) I mean…
I have a mixed feeling of comparing with competitors because on one hand, doing what somebody else is doing maybe doesn’t make sense. I tried, but also doing my own thing without looking what everybody else is doing doesn’t make sense either. So I try to do what we, based on our values, where I think makes more sense. But…
trying to answer your question. I haven’t seen other companies, what they do is they do a transactional recruiting where they don’t care about the candidates. so we try to do a relational recruiting, basically trying to follow up with the candidates. So we build a pre-existing relationship before we hire them. So if we reject them, give them feedback, they come again, right?
Bill Canady (53:00) Mm-hmm.
Federico Ramallo (53:19) then we build that relationship throughout time. And hopefully that would be a… We can know about them more about their values. Maybe they don’t have the skills, but they have the attitude. it basically, we can say, it’s somebody we want to hire, but not yet, right? Because we don’t have the specific technical requirement for that person, right? So…
So yeah, that’s something I haven’t seen other competitors doing. And then the other thing I haven’t seen doing is working towards the quality that we have. So yeah, there’s that.
Bill Canady (53:51) Well, that’s great. Well, this has been a fascinating conversation. I really learned a lot. I know we’ve gone way over the time you’d allocated. there else you want to cover or anything that I can help you with?
Federico Ramallo (54:03) Do you want to talk a little bit about Arrowhead and what you’re doing there?
Bill Canady (54:07) Sure, absolutely. Do you want to ask me a couple of questions or how would you like to handle?
Federico Ramallo (54:11) Yeah, mean, one question I wanted to ask is what your vision for our head in the next five years?
Bill Canady (54:18) for sure. Yeah. So Arrowhead today, we’re north of a billion dollars a year, about a billion, two-ish, billion, three-ish. We’re in 50 countries and we sell, we have two main segments. We’re in power sports. So we sell parts for motorcycles and ATVs and things like that all over the world. And the other one is outdoor power equipment. So things for like lawn mowers and string trimmers, blowers, things like that.
And in our third piece that we’re in is what we call rotating electric. So that’s parts, starters, all natures for trucks that go over the road. So our goal is we’d like to see ourselves get it to $2 billion. We think our growth will primarily come from the power sports side. We’re number one or two in the world in that in every market we’re in.
That represents about 75 % of our business. In Europe, we’re primarily known as company that’s beer, and in the US, it’s primarily as WPS. There’s a lot of sub-brands that go in it, but those are our two main groups. We see that continue to grow and really, really prosper around the world as we bring more brands in and things like that. And then second there is the outdoor power equipment.
You know, we are one of the leaders in the world in supplying for commercial equipment, things like these big companies that go out and maintain agriculture, lawns, things like that. we’d like to see ourselves, you know, in the next five years, get it to 2 billion, get our profitability about 15%. We’re running just under 10 today with it and get ourselves to…
about 15%, which we believe very strongly in. And we’re moving ourselves from just being a parts and pieces supplier to really around passion and protection. So out the things that make people passionate that they like to do, whether it’s riding dirt bikes or over the road bikes or these powerful equipment to these things that get them excited. then secondly, and even more importantly is the protection, make sure people are safe while they’re doing it, make sure that they…
can accomplish their mission, whatever that may be, in a way that not only they have fun doing it, but they can come back in because you can hurt yourself with lot of this stuff. So we see ourselves moving into passion and protection and getting deeper into the current markets that we’re in. So it’s a great business to be in. We’re really excited to have that come.
Federico Ramallo (56:41) That’s very interesting. I haven’t thought about going from parts to passion and protection. I think that’s a very powerful mission.
Bill Canady (56:49) Well,
it helps you identify. So if you take a motorcycle, there’s everything on there. There’s wheels and rims, tires, right? Forks, handlebars, all this stuff with the motors. And we supply all that stuff, right? But then you say, well, all where are people going with it? What do they want to do with it? So in the United States, for us, it’s primarily off-road. Dirt bikes, ATVs, agricultural equipment, things like these.
these gators that they use on farms. In Europe, New Restorers is primarily on road. So you see people use it as transportation to go back and forth to work and it’s highly regulated. So in the United States, have no helmet, no gloves, nothing to just ride and all that. In Europe, you have to have so much tread on your tires, you got to wear protective equipment.
So between the two of them, they really, really go well together for us. so Europe is more of an on-road market. Same thing in Latin America. don’t, you know, in the US you see like X Games and Supercross and these people doing all these stunts. You don’t really see that in the rest of the world. You know, it’s people go to work and they drive a bike because it’s cheap and it’s easy to get through traffic and things like that. So yeah, so by defining what we’re doing and looking at
All of a sudden it tells us what to aim at, tells us where we’re going. So if you take your recruiting business and you go, I’ve got this AI tool and it’s kind of cool and we want to reduce time or whatever, but really what are you trying to do? Right. And what is the customer’s wants? If you start with the end in mind and work backwards, it’ll show you your next features you should be looking at. It’ll show you the next markets you should be in. Like, who cares about speed and what kind of job can you be quantitative enough to do it?
That defines everything. It’s the same thing with us. So who cares about having fun they’re doing it, but they want to be safe. That tells us who our riders are. That tells us what kind of equipment should we bring out and where we should be pointing it at. So yeah, if you start with the end in mind and work backwards, it gets really interesting really fast because it shows you how to grow your business.
Federico Ramallo (58:53) Right, because at the end of the day, you, while understanding your customer, then you can make better decisions throughout the chain.
Bill Canady (59:01) That’s right, because nobody cares that you have AI. mean, AI is a buzzword today and all that. What they care is can they get better candidates faster that fit their needs, right? I don’t care how you. Just like saying, I build houses and I have the best hammer. I don’t care what kind of hammer. I want a good house, right? I want a good employee who can do the job. I want a bike that gets me to work and makes me have fun doing it and protects me.
Federico Ramallo (59:22) Right, right, I have a friend he’s…
Bill Canady (59:24) So like we
develop rider suits that have airbags in them, right? We were wondering, yeah, yeah, so you fall off the bike and the airbags go off and you live and you don’t get injured, right? So it’s that kind of stuff. How do you combine passion and protection? What do the gloves look like? What do the tires look like? And how do you make them safer?
Federico Ramallo (59:28) really? Nice.
Right, right. One thing that one trend that I’ve seen on the auto industry at least is that with EVs, they are doing the cars disposable, right? It’s harder to fix, right? One self, right? I like to fix my own car. So that’s why, you know, I have a vested interest in this, right? And I think that this, you know, if you go to the…
the 80s and the 70s right the VW bug manual it explains how to do the valve you know lights everything yeah
Bill Canady (1:00:16) everything. And
you can do it yourself. And it was easy to get to that rear end, the bonnet or whatever. It’s a trunk, right? But it’s different because of… Yeah, you can fix it. You can fix all of it. And people did.
Federico Ramallo (1:00:31) Right.
And then if you, you, I was reading about Volvo, they basically don’t sell you parts, right? They say, go. Right. Right. And they, they. Right. Right. So I’m wondering what, you know, what, what are your thoughts on that? And what do you think the industry or, or maybe, maybe this is more of an interest in the consumers, right? What the consumers could do.
Bill Canady (1:00:39) Most cars today won’t sell you anything. And you can fix it if you wanted to.
Federico Ramallo (1:00:58) get towards that.
Bill Canady (1:01:00) Yeah, so I think the industry is bifurcating itself. You’ve got EVs that are coming in, which is a giant battery and very few parts, four little motors on it in many cases, and some wiring. Not very repairable. In fact, these cars are quite expensive to repair, and most people don’t, right? And you’ve got your older cars, like the 60s and 70s, the VWs, the Novas, the Chevys, the Fords, that could be worked on.
And a lot of the stuff you see like Tata and stuff building in India, you these are $2,500 cars and people work on them all the time. So you’re bifurcating between these really high-end technology, like a lot of the German ones that take a lot of maintenance and you can’t work on it yourself and you specialize equipment to do it. So I think you will see certain parts of the world that because of the ability, the money and the technology,
Yeah, you’ll see these lower end cars or just totally disposable cars, but particularly cars that are repairable. I think they’ll continue to grow and have traction. That’s why you see like the motorcycles, the scooters, they’ve brought out a lot of electric ones. They’re not doing particularly well with them, right? Harley-Davidson, the United States brought it, didn’t do well.
You see it in Europe and all that. One is people like the noise, right? The noise that’s exciting. And two, in a lot of places, it’s cheap transportation and people want to be able to work on it. If you’ve ever been, I’m sure it’s the same way in St. Paulo or, you know, and, and, and, and, I’m the bad, I mean, all these places. You go through there, you see people working on these bikes. You can’t work on the electric bike. There’s nothing to really fix, right?
I’m not sure that’s going to take off there. How do you repair it? Where do you take it to? And people need this ability to be really cheaply repaired. I think you’ll see part of the development world, particularly Europe, that’s gone heavy into EVs. The US appears to be pulling back from the EVs, but it’s still have very fancy cars. And then you see some of the developing world, which is really concerned around repairability and low cost.
So I think the world is as it normally does is segmented itself. And there’s a place for all three of those. If I was betting the Chinese are gonna own the EV market, they’re already the cheapest guys, BYD and others. You’re gonna see muscle cars and cars that are repairable come out of the US. Things like Fords and things like that are, well, are still very sophisticated, but still have parts and gasoline, ICE engines, internal combustion engines. And then you will see things like India.
continue to make some of the cheapest, most repairable cars in the world like Tata and other ones. So I think that’s what’s gonna happen.
Federico Ramallo (1:03:39) Yeah, I think that maybe this is hoping, right? I hope to see a movement like PCs where you could like put together parts from different manufacturers and basically build your car. ⁓ I… Right.
Bill Canady (1:03:52) But you don’t see that much anymore. mean, look at Apple.
You can’t repair Apple and anything. You can still build your own. So if you can get a chassis and the boards and all that, but the cost on so many of these computers has gotten so cheap. You just throw them away. We’re a world of, we throw things away. Nobody repairs TVs and computers and all that. It’s just the hobbyists who do it today.
Federico Ramallo (1:04:15) Right, right. I did that with an old Jeep and basically replaced everything in it. Engine, transmission, I did an engine swap, axles, everything. It’s a very fun car, I’ll send you picture, but it’s a three-year project that we’ve been working on, right? And I love it. It’s economically unfeasible. I do it as a hobby.
Bill Canady (1:04:24) That’s not the fun part.
You’re right, he’s…
Federico Ramallo (1:04:43) But I mean, I use a V8 as a swap. But if I had a kit that I could use for an electric engine with a range extender, I would do that in a heartbeat, right?
Bill Canady (1:04:55) Yeah, but I wonder if there’s because it’s a hobbyist market, right? So you look around the world, I’m just going to do a comparison. I don’t know what the actual numbers, but let’s just say there’s 15 million cars being sold, right? That are coming off the assembly line today. The hobbyist, maybe there’s 100,000 cars. There’s people who who who want to rebuild and repair. It’s vastly different. So it’s going to be niche.
Federico Ramallo (1:05:01) right?
Bill Canady (1:05:24) And there’ll be money to be made in it, but it’ll be some kind of kit stuff or it’ll be something where they take old Jeeps, old Novas, know, old, these cars that you can swap engines out. And then the question becomes is, does it ever get cheap enough with the EVs that you can stick that battery in? Because that battery is huge, right? And the car setup is very different. So maybe in the future, maybe that’s the future is this hybrid as we’re doing today.
Federico Ramallo (1:05:46) Right.
Bill Canady (1:05:52) but you got to put the battery somewhere. So maybe it goes in the trunk. I was in Sri Lanka. This goes back many years ago and all the taxis, they had converted themselves to gas. Yeah, yeah, yeah, you know what I’m talking about. Yeah, yeah, the GNC. And so they had tanks in the trunk that they were running the, cause you could, you you just need a different
Federico Ramallo (1:06:06) GLP or GNC. Yes, yes.
Bill Canady (1:06:18) The way it’s going into the engine, you need a little bit different. But otherwise, you can run gas in it. You can run all the compressed gas. So I always thought that the world, this was before electric really got big, that they would go with more compressed gases than they would EV. Because EV is not really environmental friendly, because you got all these batteries, and they can’t dispose them. And then you have to make this stuff. The compressed gas, like with hydrogen, you pull it out of the air, right? With the compressed gas, you
You’ve got the stuff, can put it in and there’s the disposal’s a lot easier. But it didn’t go that way though. Tesla took off and now in like 98 % of all cars in Norway’s are electric. yeah, so it’s, you know, I will be shocked if Latin America, Africa and Southeast Asia beyond China, like down to Bangladesh goes electric.
How are they gonna get the power grid? They don’t have power grid today.
Federico Ramallo (1:07:19) Yeah, the power grid is not developed and the power stations are far apart.
Bill Canady (1:07:21) It’s not developed.
Yep, whereas something that you can haul, because the electricity’s problem is storage. How do you store it? But something you can haul like a compressed gas, gas, a liquid, anything that you can haul and you can store in a tank, right? So I’ll be surprised if EVs reach certain areas that just, there’s no grid to speak of, right? Many of the places I’ve been,
They’re either running off a generator or they’ve got some local power grid that they’re running it off of. There’s no national power grid. And even the power grid in the US is terrible, right? The grid’s the issue.
Federico Ramallo (1:07:56) Right, right. That’s what I’m thinking on. There is this company called Edison Motors in Canada, and they are building big rigs where they put an electric motor on the axles and then a diesel generator. ⁓ Yes, and they build electric, big rigs, trucks, but with a small battery on scale, right?
Bill Canady (1:08:09) And we’re gonna end off with that.
Federico Ramallo (1:08:18) because they charge it with a generator, right? ⁓ And the way that they are building it is so it can be self-repair. So the founder is very pro right to repair. And he was unable to make the products because Canada regulations doesn’t allow them to put a generator on the highway, right?
Bill Canady (1:08:22) Intro
Federico Ramallo (1:08:40) So basically they had to switch to traditional diesel engine with a transmission power until they are able to go through the hoops of regulation. In Latin America, think the regulations are less of an issue because they’re less strict. So there’s an opportunity there.
Bill Canady (1:08:57) They don’t have an auto industry
like Canada builds cars. You don’t really build cars in Latin America. And there’s a lot of innovation that, you know, people to get their car running. So it’s interesting putting the electric motors on the wheels with a generator. A generator is more than an engine with a big alternator, right? That’s all it is. So that’s quite easy. Interesting. Who knows? This might be an opportunity for you, Frederico.
Federico Ramallo (1:09:02) Right.
Yes. Yes.
So what?
Right, yeah, I mean, I come from Argentina where basically they have a hostage market between Argentina, Brazil and Mercosur is the name of the market. And basically they build their own cars and it’s cheaper to buy those cars than, you know, car from Europe or US or whatever, right?
Bill Canady (1:09:37) A
lot of them took plants that General Motors or others had put in years ago. They were expropriated. They became nationalized, but that gave them the foundation to, you know, that they could go and build some of these cars and some of the technology is old, but it’s still working and alpha.
Federico Ramallo (1:09:45) Yes.
Yeah,
they have great engineering. The Germans, Mercedes-Benz had a factory there. It’s the only place where they build the Unimogs outside of Germany. Sprinters have been… Yes, it’s an amazing vehicle. I mean, it’s less practical than taking the kids to school, but it’s an amazing technology.
Bill Canady (1:10:01) which is a really cool vehicle.
straight
if you want to go off road and go to the Arctic or something, right? And they’re a bog.
Federico Ramallo (1:10:16) I had the opportunity to buy a three-year-old Unimog when the local dealer decided to close operations and I was very close to buy a Unimog.
Bill Canady (1:10:23) Really?
I’ve never written in one, I’ve seen them. I’ve seen them online and all that, but man, that would be kind of cool to have.
Federico Ramallo (1:10:34) I was able to drive in a 406, is, it’s a nightmare to drive because it has straight gears. So every time you change gear, it clanks, you know? And we were going 45 degrees off camber. was a beautiful nightmare that I enjoyed very much.
Bill Canady (1:10:50) I think that
would be like, are we going to die or but we’re having a great time while doing it.
Federico Ramallo (1:10:55) Yeah, yeah, like hanging with your feet on the air because you’re on the, you know, on the bed. Yeah. And we were doing like 20 miles per hour, 10 miles per hour, whatever, you know, we were going that fast, but it was fascinating. I loved it.
Bill Canady (1:11:06) Now you can’t go fast with that,
but that would be really cool. Yeah, I’ve seen them. The ones that Mercedes, I think they still build them, or at least I think so, I’m not sure. But they’re really expensive. Like they’re super expensive vehicles from Mercedes.
Federico Ramallo (1:11:20) $189,000 new.
Bill Canady (1:11:22) Is that what it is? Holy cow. That’s a, you know, for a truck that’s really not practical at all. So like other than being really cool, what are you going to do with it? If you’re an army or, know, like you got maybe you’re taking over the Amazon or something, but otherwise you can’t, it’s hard to take the kids to school in it. So.
Federico Ramallo (1:11:24) Yes.
Yeah, yeah, mean, it’s not practical to drive on the city, but it’s so cool. Yeah, it’s basically a tractor that can go on the road, right? So, so yeah, and they have rear axle driving. So that’s very interesting as well. So you can turn the front and the rear if you, you yeah, yeah, yeah. You can crab walk with it.
Bill Canady (1:11:49) Yeah.
That is so cool.
in the back at the same time and really tightens the circle.
You know, they’ve got that now, know, the Hummer, Hummer’s owned by the China, Chinese now, but they’ll crab walk. And there’s a couple other ones that came out that will crab walk, but I saw a guy locally had a Hummer, he turned it enough and both the wheels then, it’s so cool to look at that stuff.
Federico Ramallo (1:12:23) Yes, yes. So I think it’s interesting, yes. What you’re doing at Arrowhead, I’m looking forward to see where you’re taking it next. Yeah.
Bill Canady (1:12:30) Well, I’m looking forward to seeing your recruiting thing. Remember us little people when you’re out there making all these big money and recruiting the whole world in four days. So that’s really impressive. So I want to thank you for taking the time today. And this has been really, really great. And it’s been such a pleasure chatting with
Federico Ramallo (1:12:48) Yes, thank you for joining us today. I truly appreciate it.