Charlie Garcia Transcript
Clint Betts
Charlie, thank you so much for coming on the show. You are the founder of R360, which is a very interesting and really cool and a really exclusive group of folks that you've put together, which I want to talk about. But tell us about your career. You've done a number of things. What led you to found this group?
Charlie Garcia
Well, Clint, thank you for having me. So, I became an entrepreneur. I wanted to be in the military, and I wanted to fly airplanes. So I went to the Air Force Academy, and I did that for a while, but my eyes went bad because I was studying under the covers with a flashlight after midnight. So, I lost my pilot qualification. So I stayed in the military for six or seven years and had a lot of fun, but I got out, went to law school, decided that law was a business, so I didn't do that, and I started a financial services company. We became the fastest-growing company in Florida for a few years in a row. Eighth fastest-growing company in the country. We had 60 offices in eight countries. I sold that and then continued investing and doing other things. But because I didn't have an MBA, I joined a peer-to-peer organization called the Young Presidents Organization, and I also joined Distich at the same time.
So, going to these peer-to-peer organizations was really helpful to me. Then, I thought I had a chance to do a one-year leadership fellowship at Harvard and also spent some time at MIT. They have an incubation program called the Venture Incubation Program, which takes place 10 weeks in the summer, and about 130 teams have applied. They selected 20, and one of the 20 teams they selected was mine. And this was 2019. So I had two Harvard, two MIT professors, 10 students, and that's where the idea came up of creating a peer-to-peer group for individuals that had created wealth over a hundred million.
We were aligned by values, especially generosity spirit, and we wanted to use our entrepreneurial grit, our wealth, and our family to solve some of the world's most intractable problems, benefiting humanity to heal our planet and to show people that capitalism actually is a good thing and be a role model for other families of wealth that can use their wealth, family and their talent to make a change in their local community, in their state, in their and in the world. So that was the idea. And YPO, Vistage, EO, and organizations like that are the ways you become a better chief executive officer.
But we believe our secret sauce is that wealth is more than money. They say if you give a man a fish, you feed him for the day, you teach them how to fish, you feed him for a lifetime. And the fish that we're trying to get our families to master are not only financial capital, but they are also intellectual, social, human, emotional, and spiritual. And our meetings are thematic around those six things. At the end of the meeting, you have to tell everyone in the group, "Based on what I've learned today, before the next meeting in 12 months, I want to be held accountable to do things, these things for myself, my spouse, my children, my grandchildren."
As the patriarch or matriarch, you're constantly, we're lifelong learners, and we're trying to up our game through the things that we learn from other people in the group and what they're doing. So, my goal is to touch 3 billion people on the planet in a positive way, and I can't do it on my own.
So we decided we're going to go out and a thousand superheroes globally, 500 in the U.S. and 500 abroad, and have a philanthropic platform where we can assist individuals with their and their family's philanthropic goals, whatever they may be, but also encourage our members to think not only about giving away money, I was on the Florida State Board of Education, and in the six years that I was there as an entrepreneur, I was able to transform key parts of the Florida education system. I led the reading task force for the governor, and now, in the state of Florida, African-American fourth graders read better than whites in 33 states. Latinos have the highest graduation rates from high school. When I got there, a third of them were dropping out of high school. So we encourage individuals with entrepreneurial gifts to think not only about spending time on nonprofits giving money away but also going into these voluntary positions and local, state, and federal government where you can do a lot of good, similar to what Elon Musk and Vivek are trying to do at the national level now with their Department of Government Efficiency, things like that.
Clint Betts
So what does that actually look like? What are some of the projects you've come together on as leaders to make a difference?
Charlie Garcia
So everybody does their own thing. What we do is supercharge them and give them platforms, but depending on what you're doing, as we grow, it's going to be pretty amazing. I was just interviewing a potential member about their philanthropic goals, and I said, well, I'm going to have to connect you with this person and that person because they're in the same space. And then, if we have eight individuals who want to take plastics out of the ocean, then why don't they work together and bring something to that space that's still needed and think about it in a very entrepreneurial, thoughtful way and not duplicate things that already exist? So it's really that thought.
Things that we are doing actively right now, we're going to go to Dharmasala where the 14th Dalai Lama lives, it's going to be his 90th birthday in the summer of next year, and he's gifted all the intellectual property to a friend of mine that runs a nonprofit. And they want, or he wants, to affect children nationwide by giving them peace, compassion, and empathy. So the idea is that they can ask an AI agent questions, and it will respond in his voice in any language. It is really focused on developing these values in children nationwide. So that's the type of project that I want to get behind. We already have two members with AI companies who would like to get behind it. I'm going to go with my wife and other members in May to meet him personally at his home and see if we can push that project forward.
But I would say every single member has four or five of their own projects that are really important to them, and a lot has to do with our life story. Sixteen of our members did not go to college. Nine of our members dropped out of high school, but a lot of them were scarred early in life with extreme poverty where they didn't eat seven days a week. They were so poor, and something went off in their brain that said, no freaking way, this is not going to be my life. Because of this painful trauma, they created great wealth, but they have a spirit of generosity that makes them want to make sure that these things don't happen to others.
So yes, we're very difficult to get into. The membership committee, which I'm not on, has turned down 72 members including nine billionaires, not because they didn't have the wealth, but the values didn't quite align with what we're looking for.
Clint Betts
That's super interesting. And so, how many members are you trying to get to a thousand? How many do you have now? Or maybe you don't want to say
Charlie Garcia
We have, two new members were just approved by the membership committee, so that would be 136 when they come on board. We have about eight or nine in the pipeline. It takes us about six weeks to clear a member and do all the due diligence.
Clint Betts
I see. How are you thinking about AI? You mentioned that in that project with the Dalai Lama. How are you and the leaders within your organization thinking about how it's going to transform the world?
Charlie Garcia
So we've been on top of this for three or four years, and I made a commitment after intellectual capital meeting a few years ago to spend four hours a day, which I have, probably more than that on AI. So, I now have about 2,000 hours of learning AI. I got really good advice early on because I had 10 platforms that I wanted to learn that I thought would make me efficient in certain things that I do. And somebody said, look, instead of going to 10 platforms, we were really never going to go deep pick one. His advice was to ChatGPT to really go deep because what's happening is they're making changes. Some they announce, some they just make, and you're going to be able to use data to really evaluate the changes.
So I did that for about a year, and I kept on, and then I added Claude 3 Anthropic. And then what I've done in the last four months is that one of our members who's had two billion exits put a lot of his own money into creating an AI company, which already has 180 employees. And he has a platform where you can now say, "Okay, this is going to be my prompt, but you can give it to five different models, and you can fidget, you can set the model, and then you can see who gives you the best response." In some models, you can put a hundred thousand words. In others, you can't. So they've assigned me a software engineer that I've been working with who has 12 years in AI.
But the funny thing is now I am the one teaching my own children, 21 to 30, how to use AI and I'm giving them classes. And the big irony is that there's a guy that I met recently at peer-to-peer groups for creatives. Johnny Ives is part of the group. This guy invented Siri, and it was bought by Apple, and then he went off to Apple, but he was a Stanford professor, and he lives in Hawaii now, and he's having a heart operation. I told him some things about AI, and he wanted some help with what he was being told to do by his heart doctor. So what I tell people is that when you go to ChatGPT, and you ask a question, it's like asking someone in a bar or at a bus stop, and that's the quality of response that you're going to get.
So I went to ChatGPT, and I said, "Who are the five best heart surgeons in the U.S.?"Then, it gives you a list of five names. Then I said, "Okay, five heart surgeons. If you were going to create detailed criteria to pick the five best surgeons in the U.S., what would the criteria be? Explain them to me." So it gives you like 15 things like, "Wow, I never thought about that. All right, using that criteria, who are the five best?" None of the original five are on, right? Then I say, "Hey, you five best, how would you improve that criteria? Not only for the U.S., but globally?" Now it does it again, much more refined, some new things that didn't come out. I said, "Okay, using that criteria, who are the five best in the world?" Only one of my five made it. Now, there are two in India, one in France, and one in Japan. And then I say, "Okay, you're my team. We had to add one other person that brings something totally different than what you five have. If that person exists, who would it be and would you want them on the team?" "Oh yeah, there's this Japanese doctor who's an expert in robotics and AI doing heart operations and none of us do any of that." So we add him to the team. Then now this has taken three minutes maybe.
Clint Betts
Yeah.
Charlie Garcia
Then I say, "Okay, I have a friend who's 69 years old; this is what he's being recommended. What would you five think about that?" And they came up with four non-invasive diagnostics that he should do first because if this one shows this and he shouldn't be doing the operation, he should be doing that. And if I sent this one back to him, he showed it to his doctor, and he was like, "Okay, who are you talking to? I got to know who told you all this." And I can't tell you how it does it, but I always say, if I could go back 30 years, I'd be a software engineer. But now with AI, as long as you know how to ask questions and you know how to prompt engineer, you can create teams of whatever and be talking to a heart surgeon that does 10,000 surgeries a year, and you could go really granular in picking heart surgeons with a specific type of operation. So it's going to change the world. My mom is in hospice, she's very religious. I was able to see that she's Catholic and follows the Virgin Mary, and I had her having a conversation that just blew her mind about the Virgin Mary. My mom would ask questions, very deep questions from Scripture, and it would answer back because with Gemini, you could tie it to your phone, and you could give it a woman's voice.
And my mother, who's 88, was just talking about magic. She thought she couldn't... But it was about an hour, and she said it was such a nice thing to do for her. I could have chosen Jesus, and she could have had a conversation with Jesus. And anyway, so there's just some really cool stuff that I think one can do. But it is an investment of time that is very well worth it. And it has come so far in two years that when I started, it was very frustrating. However, the quality has gotten just a lot easier today to learn than what I was doing two years ago, but I got 2,000 hours into learning AI. I think that every entrepreneur should be the chief AI officer for their company, and I certainly am because if you're not, your employees who are used to doing things a certain way will not integrate the AI into their workflows.
Clint Betts
Having dealt with so many interesting leaders and being a remarkable leader yourself, what are some of the key characteristics and traits that a leader should have that you've seen that work? Obviously, all leaders are different, have different styles, different personalities, and all that type of stuff. But what are some of the key characteristics and traits that you've seen leaders share successfully?
Charlie Garcia
And I have a couple of books that go into this in depth there, 11 or 12 languages, and a message from Garcia was my first book, and then Leadership Lessons of the White House Fellows. I've had tons of mentors, and I go into all these qualities, but I think that for me the number one skill quality of a leader is self-awareness. I used to teach at MIT how to use behavioral analytics to lead high-performing teams. I have four children, and they're totally different. I'm not sure how that happens, but if I am trying to get my own kids to maximize their full potential, I can't approach them the same way. So you have to have self-awareness of who you are, number one. And number two is empathy.
And self-awareness is like, look, there are certain traits that I have that are going to drive other people absolutely nuts. We often marry our opposites, and if you think you have a spouse, the best decisions are going to be made together. But there are things that she has superpowers; my wife and I have superpowers, so I delegate those things that I'm not good at and that she is. But we think totally different. So, understanding that my wife has her own behavioral DNA, she's not being a pain; that's the way that she was built. And we're all perfect just the way that we're like.
And if I want something, I need to know what are her triggers. She has great self-awareness, and so do I. And now I help a lot of the children of our members who are before they get married to understand what their behavioral DNA is, where they're going to be good together, and where there's going to be friction. So when you're running... Nobody gets a job in our firm without us having their behavioral DNA. In fact, we will consider this to be the perfect behavioral pattern for this job, and if 400 people apply, we will only interview the ones that have a nine or a 10 on the behavioral fit. The number one thing that's going to show someone being successful is cognitive. It's how fast your brain spins, but also your experience.
But the behavioral fit has to be there because you can have those things. But if I put you in a position that it's just not who you are, I'm not going to keep you for very long; you're going to get frustrated. So, for me, the two big ones are really self-awareness of who you are and understanding even though you're perfect the way you are, many of your behaviors are going to drive other people nuts. You have to be aware of that, know who your team is, and approach them the way they need to be approached to maximize their full potential. And the same result for families.
Clint Betts
Do you think that's unique to CEOs or could that be applied to politicians, global leaders, things like that?
Charlie Garcia
Any leader. I mean, any leader, obviously, has to have great values, be ethical, have integrity, and all of those things. Hard work ethic and other things are all important. But it depends. I'm going to be a leader in the military. I'm going to be an entrepreneur. Qualities will change by the industries you're in. And politics as a whole, a whole different ball of wax. I think particularly today.
Clint Betts
Mm-hmm. 2014 was kind of a crazy year because it felt like we were in recession in some industries, doing well in others. So a lot of uncertainty. There's an election coming up in the United States, and around the world, there are about 25 other elections happening. So, there's a lot of uncertainty going into 2024. Now we have a little bit more certainty going into 2025, what to expect, how to invest, and where things might look. There's never a hundred percent certainty. How are you thinking about 2025 and just the way 2024 shook out?
Charlie Garcia
Well, I write about investment opportunities. We have a thing called The Night Owl. So this weekend, I wrote three or four things, and we looked globally. So what's going on in China, the largest economy, and what are our opportunities there? Bitcoin, I think, is a place that everybody should be. We're still very early. I tell my kids that I do believe in 20 years, Bitcoin will be above $10 million. So a hundred thousand, 105, 103, wherever it is. It's still very early in the game, and it's divisible by a million. We have BitPay, so our employees can put a hundred percent or 1% of their salary into Bitcoin every two weeks. And I say, "Look, if you're putting in a hundred bucks a week and you've been doing that for four years, you'd be shocked what that is worth today." So, in the U.S., there are 10 key people, from his Vice President to his Cabinet, who are big proponents of Bitcoin in particular.
So, I think that's a no-brainer in terms of thinking about the investment landscape. And I also like companies that pay dividends, and the dividends are growing, as well as things like that. But I think that my mother was a schoolteacher. I was on the State Board of Education of Florida for six or seven years. I was brought into the Air Force Academy Board of Visitors, which has control of what happens at that military institution because there was a sexual assault scandal. So I think a lot about education. And the fact that we can't define what a man and woman are and that our kids are being raised as socialists, and capitalism has a really bad name. I had seen it at Harvard for a year, and I was shocked. And if you think of Harvard as a nonprofit, it's really a $55 billion hedge fund that's growing 10% a year. They don't need tuition. And they've got...
So, a virus that had gone into our educational system about 10 or 15 years ago needs to get out of our school system. It's gone into the U.S. military where we're not thinking about being warfighters; we're thinking about other things. So it's going to require somebody with the tough skin of some of the people that are coming into this administration to fix those things and get back to a country that's built on hard work ethic. Anybody in this country can be successful. I had the good fortune of living outside of this country for 20 years in the Republic of Panama. I've lived in Eastern Europe. So I am very grateful to be a veteran, for I think we're in the greatest country in the world. We're certainly not perfect like anybody else, but we're always working to be better.
So I am very optimistic, very optimistic that we're going to get our country back and the bad behavior of the federal or state government using tech platforms to... One of the things that I taught Latin American militaries in the eighties was propaganda, and how to ensure that they didn't have guerrilla insurgencies was to have counter-propaganda stuff to what people are being taught from religious organizations to many other things. So, there is a grip on what's being taught in our federal bureaucracies and what's being taught in our schools. The federal government controls about 10% of the spending for public schools. So when it says, "You're going to teach this, and you're going to teach that, or you're not going to get the 10%."
And what's happening in the state of California just blows me away that a child who's not an adult, who's confused, he's not even in puberty, can make some sort of a statement. And the next thing you know, they're getting physically mutilated, and their parents can't find out about it, or somebody goes to jail. It's not even stuff that happens in China, but for it to happen to our own country is really sad. So, I am optimistic that the pendulum is going to swing the other way in a lot of these areas, and people will be able to have conversations like this. You and I can be totally on opposite spectrums, so let's talk about it. "Hey, I want to understand your point of view. I want to understand what am I missing?" And I remember the first president I worked for was Ronald Reagan. He always said he invited Tip O'Neill to play poker. And in the first four months, Tip O'Neill said, "I've seen you more in four months than I saw the president of my own party in four years." And Reagan always said, "Hey, we don't have to agree on everything. We can still be friends and say," and he told Tip O'Neill, "I disagree with 80% of what you think. Let's focus on the 20% that we agree on and start doing some amazing things there. And let's see how, maybe I'll do more of what you think because you'll convince me and you'll do a little bit more of me." But it starts with the conversation when you can't have conversations at the Thanksgiving table with your own family because they have Trump Derangement Syndrome or something else.
It's scary. And it's scary because the platforms that we have on social media or television are not journalists. I was just kidding with a new person that I met over the last week, and I looked at his last name and said, "You wouldn't know my editor who ran the op-ed pages for CNN has the same last name." "Oh, that was my father." When I wrote for CNN back in 2012, I had to have a footnote for every line, which was most lines. If there was a fact, there needed to be where it came from. Every single thing was checked before it was published. That doesn't happen today. People just report stories from anonymous sources. You cannot have a democracy if people aren't well-informed and if the press is not getting two sides to every story and presenting things in an unbiased way.
My favorite show on CNN used to be Crossfire. I don't know if you remember that. But you had someone from the left, someone from the right to gasp, and you would listen to someone and say, wow, that makes sense. I agree with that. And the next person goes like, "Oh, okay. It's more complicated." And after the show, you left more information. And they weren't trying to convince you of anything; they were trying to educate you, and they gave you both sides, which was what journalism is supposed to be about.
Clint Betts
What do you make of having the greatest entrepreneur currently living and being part of this new administration in such a big way, him and Vivek? Obviously, I'm talking about Elon and what they're trying to do with the Department of Government Efficiency and things that he's done already inside of his own companies and taking that to the federal government. How do you think that shakes out? I don't think we've ever, I can't think of anything that's ever been like this in history.
Charlie Garcia
No, look, there's a model for it already based on what Milei, the president of Argentina, has done in just one year. And now he's president, he has the power to do it, and he's turned around a basket case of a country's company in one year, and we can do the same. People don't realize that Elon runs a $6 billion company. He's able to do things like deploying AI equipment, which would take... Impossible. This would take a year, and he does it in a few weeks, and people just can't believe it. And we get billions and billions from the federal government to build charging stations, and four years go by. I don't know, but we built two or three of them.
It's a bureaucracy that is all about taking as much money as possible and making people wealthy. And somebody had the joke, the comedian, where our politicians should look like NASCAR racers when you see them, they got patches. So hey, there's all these patches from oil companies, so you know where their money is coming from and they're being upfront. But we have a system that's very corrupt. But you have not only Elon but also Vivek, who's a genius, and the people that they're recruiting who can apply. And I do think that if I were a corporate CEO and I had a genius working for me who could go for a year or 18 months to work on this initiative, I'd continue paying their salary. I would gift that individual the opportunity to work on this initiative. What a great project to do.
But I was a White House Fellow back in '88, '89, Reagan's last six months. And the business of government is complicated. You have the strongest union in the world, which is the civil service. And I remember it's like, "Hey, don't let the door hit you in the butt because we're still going to be here when you leave." And what I found is that I've worked in six administrations, and a lot of the monkey business in government is happening right now. It's the last six months, especially the last couple of months. Everybody that's a political appointee isn't going to be there long. So they're focused on their next gig and the civil service that know everybody, particularly at the senior level, are doing all kinds of crazy things. You read about some of it, but you'll never know about most of it.
So I am optimistic that they will be able to do things, and then the president's going to have to make the tough calls because the most important thing that needs to happen is personnel. You have about 5 million members nationally in the state, federal, and local governments, right? About 5 million, probably 3 million of that is the military and the federal government. But the fact that they don't even come into work, and there's no pandemic, and they want to keep working from home, and who knows what the heck they're actually doing is a massive, massive problem. But if you look at the whole workforce, there are about 23 million members in the government 23 million. But a lot of those are state and local.
But if you just look at the Feds, I think it's about 2 million, a little over 2 million military, and about 3 million in the federal workforce. So that's a lot of workers. A lot of these agencies were created years and years ago; they lost their authorization, but they just keep going because they have congressmen and other people that they've, so there's going to be a lot of screaming if they do what's actually they need to do. But Elon let go 80% of the employees at Twitter, now X, and now they're the number one news platform globally. Those people will find different jobs and do different things. But the payroll is the biggest problem that we have right now in the government, aside from giving billions away to foreign countries instead of using it in our own country.
Clint Betts
Finally, just because I want to be respectful of your time, we end every interview with the same question, and that is at CEO.com, we believe the chances one gives is just as important as the chances one takes. When you hear that, who gave you a chance to get you to where you are today?
Charlie Garcia
So, in my first book, I wrote all the mentors that I had, and I tried to honor them. My grandfather once said, "When you learn to shave, try to learn on someone else's face first." So my ex-father-in-law, Seymour Holtzman, who's passed, gave me a wonderful opportunity. I worked for a four-star general who became a father figure to me and many older entrepreneurs that I approached that were at a stage in their lives where they really helped me out. Max Chapman was the CEO of Kidder Peabody and sold it to General Electric. He became the president of Nomura. I think he was the first American to be on the board of a Japanese company. He was the vice chair of the Amex.
And he came to this little rinky-dink company, mine, and the only reason he did it was because he really wanted to help. And he was unbelievable. I sold my company because of him. He called me into the office. I'd been working really hard, and he said, "Look, one of my jobs is succession. If you get hit by the Peruru bus, who do I hire? So I want you to think about and do a whole job description." And I did. I went on vacation. I came back after a couple of weeks, went to his office, and he said, "Hey, this is what you gave me. Read it. I want you to read it and be honest with me and yourself. Is that you?" I'm like, "No." "Well, then, we have two choices. You come onto the board, we hire that person to build and scale the company, or we sell it." And I decided to sell it. And I'm glad I did because that was 2006, and Bear Stearns was our clearing agent, and two years later, they weren't around.
So he, Max Chapman, is somebody that I owe a ton to. He was a former Marine, I think he had 10% body fat. Everybody was scared of him, but he was just a great guy with a lot of wisdom who took the time to not only be on board but to mentor me and members of my team. So I always read the best book, Think and Grow Rich, or I recommend people actually read the real book, which is Laws of Success, which is 1,200 pages, and the first 108 pages are about creating a mastermind. And I think you become or we are a combination of the five people that are closest to you. And if you're in business, you really need to have those mentors.
And what I've been doing recently is writing them thank you notes, finding them, calling them. Saul Trujillo is another one. We started a business together, Garcia Trujillo. He grew up poor in Wyoming and barely went to college, but he runs three $50 billion global companies. And he decided, again, that he didn't need to do this, but he wanted to help a young Hispanic kid be successful in business. So he came onto the board and became a partner, and I would not be where I am today had it not been for all of these people. And I tell my kids, "You got to reach out and get mentors. And it's your fault if you don't pick up the phone and do it." And if one of them says no, then ask the next and ask the next until you surround yourself with some amazing people.
Clint Betts
I think that's good advice. Charlie, thank you so much. Coming on the show means a lot to have you. When you publish your next book, come on the show, let's talk about it. I'm excited to read it.
Charlie Garcia
Love to. I will reach out to you, Clint, and we'll certainly do that. I'm really excited because it's a novel and I've been working on it four or five hours a day. I did a 360 review, and they said I was working too much in the business, not on the business. My wife said, "You need a new obsession, something with a 90% failure rate to get you excited." So it's like, "Okay, I want to write a book that gets picked up as a major feature film that's like one of two million." So I said, "Okay, I like those odds." So I've been working on it for two and a half years now.
Clint Betts
That's incredible. That's Charlie. Thank you so much for coming on.
Charlie Garcia
Thank you, Clint. Really appreciate it.
Edited for readability.