AP 1185: Is Passive Income Even Real, and How Do I Leave a Legacy?

AP 1185: Is Passive Income Even Real, and How Do I Leave a Legacy?

Pat Flynn:
What's up, everybody? Pat Flynn here, and welcome to episode 1,185 of AskPat 2.0. You're about to listen to a coaching call between myself and an entrepreneur just like you. And today we're talking with Shira Kates from Snapdragon Strategy. Now Shira's coming in with a lot of experience. She was in not just the corporate world, but in Silicon Valley. And she's done so much and has done many, many, many great things, but she's kind of wanting to remove herself from that line of work and try something else. Is it coaching? Is it something else? And she's got a lot of things lined up.

So we're going to talk about that today, but also how might we direct that towards something that is somewhat passive, to give her some time back. Is passive income even real, she asks. Does it even exist today, which is a really cool discussion that we have. And more than that, and I think this is the most important part, is how does Shira and how you leave a legacy? So we talk about a number of different things today, opportunities that are in front of her and new opportunities that might exist as well. And I hope you enjoy this conversation again. You can check out Shira at SnapdragonStrategy.com. Here she is.

Shira, welcome to AskPat. Thanks for being here today.

Shira Kates:
Thanks for having me, Pat. It's great to be here.

Pat:
I'm excited to chat and see how I can help you. But first I'd love to know a little bit about you and what you do. Tell us a little bit.

Shira:
Okay, great. It's been a long, winded road. I actually started my career in the Bay Area tech scene. I climbed the ladder for 20 years and I worked in a lot of different roles, from software engineer to product manager, and then most recently with leading software design teams. The last role I had, which I left recently, was chief design officer of a company that works with big government agencies to do web modernization. And so we were redoing the Centers for Medicare website and the Veterans Association website and things like that. It's been a very interesting journey, mostly wonderful. And so leading and growing teams and leading and growing leaders is part of where my career has ended up. It's been interesting, in particular, being a woman in tech. It's definitely very much male-dominated sport.

Pat:
I used to read this blog called Silicon Valley Girl. It was from the perspective of a woman in Silicon Valley, but she had to hide her identity because it's such a male-dominated space. And so I can completely understand that. I would imagine that you, having gone through that sort of environment, have learned so much, and have got so much to offer. I'm curious where you went from there.

Shira:
Well, at different times—I also had this entrepreneurial streak. So I've started a few companies over the years. I had an agency, I had a consultancy. I actually am part owner of a café in New York City, that's also a wine bar. And we're talking about getting into maybe doing some kind of cannabis business as well. Mostly it's been pretty much straight in the tech sphere, and… but I did have a coaching practice, which I quite enjoyed, that I was doing as a side hustle. It's tough also, actually, when you get to a certain age in tech, it's harder to get roles. You get to be quite expensive.

So you start to think about, well, what's next for me if I wasn't going to do this? You also get a little burned out. So what's next for me? And coaching came up as something that ... or offering guidance on what I've learned along the way to help people and to help women break through the glass ceiling, if that's what they want to do, to figure out whether they even want to do that, what that would actually be like to step into leadership and the mindset.

So those are things that I feel like I have to offer now, but then I left my job and I was like, “You know, I think I need a little break, just a break.” I got invited to run my friend's law firm, which is a completely different thing.

Pat:
I was going to say, that's not what I expected.

Shira:
And I was like, “That might be interesting. Let me try it. I'll try it on.” And I found that I really enjoy it. So what I can offer there is I'm very clear about how to ... I've worked in remote companies for about five years. He's now remote. So how do you optimize the business to be remote? And I'm basically like a mini management consultant inside his company. And I absolutely love this. So this is another area where I feel like I have some value I can offer, especially now when people are figuring this out and I have a few years behind me of experience doing it.

I'm trying to think if there's a way that those things can be combined. When I look at, and also working for him, he's a thought leader. This attorney is a thought leader, and he has a podcast and does office hours, and he's all over the Clubhouse and he's got blogs and all this stuff. And I see how much time and energy that takes. And I also have a little bit of trepidation. Is passive income really passive? Or when does it become passive? And is it even still a thing in 2021? So that's really what drove me to want to meet with you and hear from the expert.

Pat:
No, I love it. I love it. We'll talk about passive income in just a minute, but I would just love to ask you a very simple yet perhaps complicated question, which is, what do you want? What does Shira want?

Shira:
You know, I think a lot of clarity came around that in the pandemic. Shira does not just want to chase a large paycheck. I've had the large paycheck and the stock options and all of that. It's really important to me to have balance in my life. I have a child I'd like to spend time with and be present with and have energy, and also have the time and energy to take care of myself. And that has been a problem for many years, is just not prioritizing self-care. I think the first thing that comes to mind when you ask me that question is a lifestyle.

What I want is a lifestyle that allows me to have that kind of balance. I need to make money, and I've typically been the primary earner in my family. So that is important. I can't just build something while not having income coming in. I would like to leave a legacy of having been impactful and useful to people and having transformed lives. I would like to set my family up to have some wealth if possible, but not to have that be the thing that runs all decisions.

Pat:
So to me, there's almost a set of constraints, if you will, or not constraints, but more rules or filters for you, with wherever you end up choosing. And the beauty of, and also the curse of what you have, is so much experience that you could go literally anywhere and do anything. I believe that you're confident in that whatever you choose to focus on, you'll be able to make it work. I mean, you have a café, you have all this experience. You've just started helping this person in the law firm. You have years of experience in big tech. You can do anything, which is really great, because now you can kind of reverse-engineer, if you will, a lifestyle that you want and then find a job or a career or a business that you own that fits into that. Right? And so that is a really important question to know how to answer, and you answered it beautifully.

You want balance, to be able to spend time with your child and have energy for yourself and self-care. If you have this great opportunity, but it doesn't check off that box, then it's an easy thing to say no to. And the struggle with a lot of entrepreneurs, especially those starting out who have experienced and can kind of Jack of all trades do anything, is that we say yes to all these things without considering how these things fit into the ultimate life that we want. And I'll tell you, I've sat in bars after conferences with very successful entrepreneurs on paper, who tell me they're the most miserable they've ever been, or that their kid and them don't have a relationship and it's too late, because 18 summers goes by really quickly.

And so, I love that we've defined what is important: balance, legacy, impact. So you don't just want to be like, sure, it might pay a lot of money, but you're just kind of pushing papers and putting things into files. That's kind of meaningless. So that's a thing you would also say no to. And then financial security, wealth, for your family and whatnot, so that's great. That, combined with the things that you seem to enjoy now, which is like more of a coaching or consulting type of thing allows you to kind of start to hone in on where you might want to settle or be, or create.

To go back to your question earlier about passive income, when we start something it's never passive. It doesn't ever start passive. And in most cases, most businesses never get to anywhere close to passive. However, passive can happen when a couple of things happen. Number one, you either have people take care of those processes, and/or software to take care of those processes, htus allowing you to remove yourself from the process.

And this is where my businesses ended up. You know, it was very much me for the first six, seven years. I started to hire a team and build systems, have automations into place that would allow me to show up asynchronously in a way that would still be able to teach and serve, and then remove myself from that process now. And that's kind of where it comes, but that's always the last step. The first step is picking a target market and solving their problems. Really, that's what it comes down to, in whichever way you can. And it may be involving a lot of hands-on work, consulting, calls, things of you showing up right now, but you're investing that time now to find the processes, to hone in on those messages and that positioning so that eventually you could hire a person or have other people or software do that.

It could be, for example, you find a way to help people manage a business remotely. And then you build a software that does all that for them. Then you can either just worry about selling it or you sell that thing off, and then it does the work for you. Or it means building a service-based business. But then it turns into an agency, where now you have people, not you, doing those things. And you're just sitting at the top managing that crew, and they're doing all the work, and that's been very common. That's called productizing your service. And that is also something that can then allow you to have that time and that balance and that energy when you build that out.

The struggle that I know a lot of entrepreneurs who are similar to you have is trying to scale up so big, so fast. And when we try to scale up so big, so fast, we start to use way more energy than we have. And we often get burned out or we spend too much money or have way too many investors involved and it just spirals out of control. So do you have any thoughts on speed and scale, and what's your reaction to thoughts on passive income based on what I've described?

Shira:
It's really interesting, because I was curious whether you would be branching off into those areas of software and building an agency or a consultancy, or if it would be more of like the online, passive ... In some ways I think those might be a better, or a clearer path for me. I've already done some of that, like I’ve—obviously, I've developed software for other people's companies, and I have tons of ideas all the time that I don't pursue that I could pursue and could probably bootstrap pretty well in that area. And then in the consultancy agency area, I have been very close to a place where I could scale and then backed off a couple of times. And mostly because I didn't have mentorship; I was younger, I didn't have the confidence, I didn't have the right mindset, and I didn't have the mentorship. And I got scared and I thought, and as a lot of women do, I need to know more things before I do this.

So that's when I went and got an MBA. But I probably didn't need to do that. Although it gave me some confidence, I probably could have just kept going if I'd had the right support structure. And I do think about that. There's definitely a period of intense involvement before you get to the place where you can back away. I think that's the part that makes me a little nervous, like how could I ramp up to that more gradually? I have two speeds: zero and all the way, like zero and 11.

Pat:
Yeah, it's almost like, all-or-nothing kind of situation at times, which in the very competitive world of startups and such, you kind of need that or else you're going to get left behind by other competitors and stuff. But now we're talking about your life, your life and the balance. And this requires a little bit of slowing down, almost kind of like removing yourself from what's happening so you can see the full picture. Which is why, like you said, support systems, mentorship can be really key, because you can't read the label when you're inside the bottle sometimes.

One thing that could really help would be to understand, financially and time-wise, what those limits are. And for example, how much money might you need to make. I'm not asking you to answer that. Just something to consider.

And then you might be able to realize that, “Wow, I only need five clients paying this much money per month to make that happen. So my scaling doesn't actually require me to go and find hundreds of clients. It might instead require me, I've got to develop deep relationships with people so that I can have five really good clients who are going to stick with me for a very long time, and that's it. And how much time might I be required to do that? Or once those clients are there, how much time is required from me versus somebody I might hire or another team or a software, whatever the case may be?”

So have you given thought to, well, how much would you need to make? Because every time I have this conversation, on the extreme, I hear people going, “I want a seven-figure business.” And I'm like, “Okay, that's a million dollars. Tell me exactly what you would need to live and be happy every day you wake up. We do the calculations. It's like, wow, it's $175K. And I'm like, “Okay, a $175K business is way different than building a million dollar business.” And then they start to go, “Wow, this is actually a lot more achievable than I thought it would be.” And the same answer could come your way if you have these self discoveries of defining where it is you want to go.

Shira:
Yeah. I think $30K a month feels like a nice stretch goal to me, and also doable. I could imagine it. So maybe I should double that.

Pat:
Well, imagine. I'm imagining one client paying you $30,000 a month for the highest-level stuff that's going to give them such a huge ROI in their business. I mean, I'm just throwing that out there, but this is where I always start, because that could happen. There are clients who could pay you that much, and imagine just how much service you could provide them, but almost how much clarity there would be with just ... I mean, it is scary to just have one client. Diversification is a thing, but now we're not talking about hundreds of thousands of users, like an app that would compete with Facebook would need. It's a completely different approach.

So how are your thoughts on starting off in that realm, and then maybe the scaling comes when you build a software or a team or an agency, or what have you to then start to take on bigger numbers? It might not be as hard to get to the balance and the life that you want. What I think the real battle will be, the conditioning that you've had in the spaces that you've been of growing so big so quickly, versus what you might actually need is slowing down and being more intentional. That's where I think a big struggle might happen. What do you think?

Shira:
I think that I have really not utilized my network enough. You know, I try to, I just go very ...

Pat:
Like you're in your own little bubble, right, and it's like ...

Shira:
I get into the bubble and I'm like, “I'm going to build this and then I'm going to go, ‘Wow,’ and everyone's going to go, “Oh my God.” And it's like, oh, guess what? I built a website on it. No offense to Wix, I love Wix, but you can't really build a business on Wix if you want great SEO. And then I learned that after the fact, “Oh, but I already have the website.” It's trying to figure it all out by myself has been a problem. And I think I'm ready to stop doing that.

Pat:
So when you say “network,” not for clientele, but for “Hey, this is what I'm working on. Can anybody support me or have any references?” Because yeah, that's such a huge realization. And actually that fits into something that I had experienced early on in the first four or five years of my career as a business owner, was trying to do it all myself, because I either could do it all myself or I knew I could figure out how to do it myself. And there was a sense of pride in doing it myself because I… my upbringing or whatever, there's history, right?

When you really think about it and you step out, and it took other people to tell me too, and the cool thing is you found this out on your own, is why wouldn't you find somebody who's done this before, who's made all the mistakes, who you have a relationship with? Perhaps you've served them at some point. We don't often redeem those “points” that we've earned by helping others. People would love to help you. And you're not even giving them a chance to, because we're so closed of wanting ... You know, it almost makes us feel weak sometimes. At least that's how I felt, like, “Oh, I'm a weakling because I don't know how to do this. So I'm just going to figure it out on my own.”

Shira:
Or the ego just wants to take credit for everything and doesn't want to share credit with somebody else or something, and even subconsciously I think. And now I'm realizing like, oh, that's just silly. And also, I would pay people to help me now. And I have the funds to do that to some extent. Not wild and crazy funds, but I have some… I could probably bootstrap something and get some help. That feels like unlocking potential, just saying that. You know?

Pat:
Yeah, that's great. So what do you imagine you'd be reaching out to help for first?

Shira:
Yeah. I think it's starting to get a little clearer because I'm working for my friend's law firm, and I've been interviewing SEO companies. And we're talking about redoing his website. And so I'm like, there's a parallel universe next to that of like, “Hmm.” For me, “Would I work with this person, and okay, how much are they charging?” And so I'm able to do the research in a very low-stakes, low-risk kind of way.

Pat:
That's true, actually. And this is a podcast for doing these interviews and stuff for?

Shira:
For just building his funnel, really just marketing ops. We're trying to figure out how to double his revenue this year. Just being able to experiment with someone else's business who has a lot of trust in me. I think it's the perfect laboratory for figuring this out.

Pat:
Oh, for sure. For sure. And plus, the relationships you'll build through the clients that they have or the people that they're hiring. I mean, you're set up for major success. I think what needs to happen is just clarity on what is it that you're going to serve with and what you're going to build, and then not being afraid to ask for help to get there. And I think it can only happen when you're very clear with what you want this thing to look like or else you might do what I did, which was ask for help before you even know what you needed. You know, I had once built some software that just was because I wanted money from selling it. And I didn't even define what this thing was. I was just chasing dollars, and I didn't have an understanding of who I was serving or what I was building. I was just like, “Hey, developer, here's money, go.” It crashed.

Clarity with where you want to go, and I'm grateful we talked about not just in business, but in life in general, making sure those filters are on as you make decisions, like you're eventually going to, it's not going to be an overnight thing. But you eventually start to hone in on that path and where you're going to end up and utilizing your network, which you've built over the years. I mean, there's probably people from years ago who perhaps you haven't connected with in a while that could potentially serve you at some point.

Now would be a good time to reach back out, not to ask them for anything, just to reconnect, because there will be a time, perhaps, where you might need something and then it won't be weird, like “Oh, the only reason you're reaching out is because you have this thing going on.” That's what my friend Jordan calls building your “layoff lifelines,” which is like, just keep those relationships going because there could be a time where you get laid off and might need some help. The same thing happened to him and many others, so keeping those relationships going could be great. And your superpower, to me, is your experience and your Rolodex. So use those.

Shira:
That's good advice. I think I get trapped by the fear of when I pick something, everything else goes away. So it's like, I get a little bit of a decision paralysis. It's like, “Software?” And I have all sorts of stories about why it would be great and terrible because I have already dipped my toe in those waters, plenty to know.

Pat:
Let's flip the story. You had just said, “I'm fearful of making a decision on one thing because it's going to leave all these other things out.” How would we rephrase that to be a positive for choice?

Shira:
“Let's try this first,” as opposed to closing up, maybe so that it doesn't feel like I'm-

Pat:
This is the focus for now.

Shira:
Right, for now.

Pat:
Right? I like that. I like that change. I also like the idea of, “I'm going to put all my current effort into this to give it the best chance to succeed before I move on to the next thing.” You are, by making a choice, making it easier for you to understand who to ask for help for, what this thing might look like, and put all your resources and experience into it. And if you were to keep all those other things open and focus on those two, then your energy is divided across all those things, and not any one of them would have a chance to get to the point where you can see if it works or not.

Shira:
I like that. That's helpful. Yeah.

Pat:
Good. This is turning more into a therapy session, right? Versus like a…

Shira:
I need it. We all need it.

Pat:
The last person I spoke to right before you, literally, it was the exact same thing: different situation, but all up in here, all up in the head. And that's the journey of an entrepreneur. It's not about the what; it's about the why, getting those cobwebs out.

Shira:
It really is. And just clarity and knowing, and mindset, really. But I think we all need therapy after the last year. [crosstalk]

Pat:
Oh, true. Gosh. You're absolutely right about that. And here's the other thing that I've learned through this conversation is that, and because I just literally had this similar conversation right before this. It's like, I would encourage you to have, and continue this conversation with other people. Just by talking about it, you were able to discover some things and realize some things. And so, we don't have to have a formal call with another podcaster to have conversations like this. Go to a coffee shop and have a conversation like this with a friend or somebody in your network. And through that conversation, you're going to discover stuff not just about them, but even about yourself as they ask questions and are interested.

Shira:
I think that's a great suggestion. And I feel like, you know, newly vaccinated, I'm ready to start doing that, whereas I've been feeling very insular and even more so in my own bubble than usual. And it's time. It's definitely time to branch out and do that, and have those conversations, and reach out to people in my network who I haven't seen or heard from in a long time because I moved, started a family, and all the other excuses and reasons that we fall out of touch with people. Yeah, that's a great step.

Pat:
I mean, the feeling that you're having, having gotten vaccinated, wanting to get out there, guess what? Everybody else has the same feeling. So it would be a very easy “yes” for you to connect with other people and learn about yourself as you learn about others and what they've been up to too.

So anyway, this has been fantastic. Thank you, Shira, for the openness to share this therapy session with others. Thank you for this. Where can people go to follow your journey? If you have anything you'd like to share, I'd love for you to share.

Shira:
I have a domain that I bought, but I don't have the site yet. And I'm not sure that it will be up by the time we air. Just going to SnapdragonStrategy.com. SnapdragonStrategy.com, or find me on LinkedIn. I think that's the easiest way. I'd love to connect with people.

Pat:
Cool, and Shira, S-H-I-R-A, and Kates, K-A-T-E-S. Is that right?

Shira:
Yes, that's right.

Pat:
Okay. Cool. LinkedIn, Snapdragon —

Shira:
— Strategy.com.

Pat:
SnapdragonStrategy.com. And when the domain becomes available, we'll pop it in the show notes for you. How's that?

Shira:
That sounds great. Thank you so much, Pat. Appreciate it.

Pat:
Thank you, Shira. This was great. Now one thing's for sure, whatever Shira puts her time and effort into, with her care for customer experience and all of her skills that she's earned over time, I guarantee that whatever she puts her time and mind into, it's going to work out very well for her audience, for her customers, and for herself. And I love the discussion on legacy. I think that's so, so key. Many people forget about that, especially those who have young kids or want to leave things behind for their family. Those kinds of things aren't often discussed, and I'm glad we got to initiate that conversation today.

So Shira, thank you so much for coming in today and for being honest and open with us. I appreciate you so, so much, and I'm so glad to have met you here today. And I want to potentially meet you too. I mean, I do want to meet you, but I potentially would here on AskPat—that's you the listener. If you'd like to potentially get coached here on the show, just like Shira did today, and have me help you and guide you with whatever you might be needing help with, all you have to do is go to AskPat.com and leave your application there, and leave us a little voicemail. Tell us a little bit about what you're going through. We might select you for a future episode. And of course, AskPat wouldn't exist if people didn't ask Pat!

So anyway, thank you so much for listening and I appreciate you. And make sure you hit subscribe so you can catch the next episode of AskPat 2.0, real coaching calls with people just like you. And I hope to see you again soon. Cheers. Peace out. Thanks so much. And as always, Team Flynn for the win.

Thanks for listening to AskPat at AskPat.com. I'm your host, Pat Flynn. Our senior producer is Sara Jane Hess. Our series producer is David Grabowski, and our executive producer is Matt Gartland. Sound editing by Duncan Brown. AskPat is a production of SPI Media. I'll catch you in the next session.