The Journey to Scale and Losing it all with Robert Fraser at Aspen Funds

The ups and downs of entrepreneurship are not for everyone. The journey to scale a business requires many skills and evolving mindset. Join us for this climb of building a business. Today’s guest is Bob Fraser, Founder, and Principal at Aspen Funds. Inc Magazine ranked his company #2436 on the 2021 Inc 5000 list. Aspen Income Fund is a residential mortgage fund designed to provide current income for investors, along with the potential for capital gains. Bob has had quite a ride on his journey to scale. We look at the challenges he faced and the heights he has reached. The journey to scale is part of the entrepreneurial ride.

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Robert Fraser: The Transcript

About: Mr. Fraser has 20+ years of experience as a finance and technology executive and is a Magna Cum Laude U.C. Berkeley computer scientist and a former Entrepreneur of the Year Award winner. Fraser is responsible for financial management, portfolio modeling, as well as systems and processes, designing and deploying Aspen’s scalable state-of-the-art back-end platform. In 1995, Mr. Fraser founded NetSales, Inc., a back-office e-commerce provider. As a CEO, Mr. Fraser raised $44 million in investment capital, and guided the company to an average of 20% month-to-month revenue growth, becoming the metro area’s fastest-growing company between 1997 and 1999.

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Disclaimer: This transcript was created using YouTube’s translator tool and that may mean that some of the words, grammar, and typos come from a misinterpretation of the video.

Robert Fraser: Scale is a big deal and scale puts an enormous amount of stress on an organization. It just stresses every area of the business. So, so figuring out how to, how to do it is, is really critical at the same time, especially in the tech business or other businesses ‘ market share is really important. So scale matters, right? The guy that gets to scale fast. This is the guy who wins. And so scale really matters. So being able to scale is, is a critical skill. And you know, it’s not taught anywhere as far as I know. , but it is absolutely critical if, if you’re, if you’re in a rapidly expanding business or in a market share where it’s market share, grab business, you want to be able to do that. And it’s not easy to do.

Intro: Welcome to Growth Think Tank. This is the one and only place where you will get insight from the founders and the CEOs, the fastest-growing privately held companies. I am the host. My name is Gene Hammett. I hope leaders and their teams navigate the defining moments of their growth. Are you ready to grow?

Gene Hammett: Growing fast is not for the faint of heart. In fact, the journey to scale is so important for you to understand that today we’re going to look at the inflection points. Of scaling a business fast. We have a special guest on the show, but what we really want to talk about is how you can understand the key inflection points that allow you to know what’s coming around the corner. Our guest today is the co-founder of Aspen Funds. They’ve been on the Inc list, but he’s also run a fast-growth company. One of the fastest in the midwest. He was also listed as an ENY entrepreneur of the year. This company was on rocket fuel. And what we learn about the scalability through that period really will help you understand what’s coming around the corner.

I love having conversations like this with people like Robert because you can see in the trenches and see behind the scenes of what’s going on. As they scale, we talk about hiring the key employees. We learned from, we also look at, do you take money or not take money? That’s one of the biggest decisions every entrepreneur has to make, but we look at what happens when losing it all. And what do you do next? All in this episode on Growth Think Tank, when you think about your journey to leadership, are you crystal clear what it takes? Better leader and grow your company. The next step, I find that some people are sort of clear. It’s a little murky. They’re putting their head down, they’re getting the work done and they show up every day and hopefully allow workout.

Here’s what I know for sure. The best-laid plans are intentional. You probably believe that you’d love to have a clear plan about you being an extraordinary leader. I offer a chance for you to sit down with me and talk about what your steps are, what are the challenges with your team, your business. And we can help you get really clear about that.

Step your priority. And that is something I do absolutely free for the right people. You have 10 or more employees. If you want to grow beyond where you are today, you don’t have to be an Inc 5,000 company, but you do have to be driven and hungry. Just go to checkout start your journey. We’d love to connect with you there. Now here’s the interview with Bob

Bob, how are you?

Robert Fraser: Hello, doing great.

Gene Hammett: Excited to have you on Growth Think Tank to talk about scaling and leadership in all things growth.

Robert Fraser: Do it.

Gene Hammett: You, were invited to come on the show before because you’ve had some tremendous success lately, but you’ve also had some tremendous success before this venture. but before we go any further, tell us a little bit about Aspen Funds.

Robert Fraser: So Aspen Fund, it’s a fund manager. So we manage investment funds and promote your buying distressed residential real estate debt. So we own the notes, kind of the bank, for distressed debt.

Gene Hammett: Love that. And it’s very interesting. I don’t hear many people that that’s their focus.

Robert Fraser: Nope. ,

Gene Hammett: it’s good to have a niche, right? It is. That helps you grow the business to where you are.

Robert Fraser: Oh, definitely. I mean, one of the keys to a high-growth business as high margins, in my opinion. Because you know, high margins, let you make a mistake here on there, right? Let’s you higher lets you spend on your growth. I mean, so much of your spending has to be internal when you’re growing and so high margins make it possible to do that. And the business we’re in is actually fairly high margin, another unique kind of strategy we have, which my partner discovered it’s very tiny. Very small and very lucrative. And so it’s perfect, you’re going to start a business and you want to be armed with business, finding an MVP, a minimum viable product. That’s actually a high margin in my opinion is, is, is the only way to go.

Gene Hammett: Well, you’ve been on the Inc list before, but this isn’t your first time in a high-growth company. We were talking before we cut on the recorder here. You had a business before the tech bubble, you raised millions and millions of dollars. You were worth something crazy. And then you lost it all. Is that it?

Robert Fraser: Until it wasn’t yeah, the message there is, Hey, you know, when somebody is willing to pay you a few million bucks for your business, consider it.

Gene Hammett: Okay. , I think a lot of people listening in here would love to sell them. Someday, but I will tell you most of them when you say that. And I say, you know what, there’s a few things I want to do before I sell it.

Robert Fraser: That’s right.

Gene Hammett: That’s our segway into. How do you create a cell of a scalable business that, that really you do love to work in? So what is scalable businesses to you?

Robert Fraser: Well, scalable. I mean, we, we grew from, I mean, I literally raised a hundred thousand dollars from mom and, you know, in my attic with my sister, Well, sorry, I got started and just had an idea. I mean, it was like, it was the worst business plan I’ve ever seen in my life. And I’ve, I’ve read a lot of business plans now and it was a horrible business plan, but we, we, we scaled up to some 280 employees in five years and had become the fastest growing business in the Midwest region, United States in the late nineties by refs. And so scale is a big deal and scale puts an enormous amount of stress on an organization. Which are stresses every area of the business. So, so figuring out how to, how to do it is, is really critical at the same time, especially in the tech business or their businesses’ market share is really important. So scale matters, right? The guy that gets to scale fastest is the guy who wins. And so scale really matters.

So being able to scale is a, is a critical skill. And you know, it’s not taught anywhere as far as I know, Absolutely critical. If, if you’re, if you’re in a rapidly expanding business or a market share where it’s a market share, grab business, you want to be able to do that. And it’s not easy to do.

Gene Hammett: No, I was talking with some clients the other day when they were talking about my VC doesn’t want us to be profitable because it’s all about grabbing the market share.

Robert Fraser: Exactly.

Gene Hammett: And that’s what you’re kind of relating to is, is it different today for you and the way you run Aspen fund?

Robert Fraser: Absolutely. I don’t. I don’t have, I don’t have outside investors meaning running my management company. So when you take equity capital in your business, you take on partners and those partners have their own dictates. And for you just. You know, venture capital has its own idea about the way they want it. They want to, they want to run the business. He went to his latest venture capital funds. I mean, they can be a billion dollars. They want, they want to put in if you’re going to do a hundred deals, you know, they want to put in a hundred million dollars, you know, in, into a deal or, you know, so their minimums are huge. They don’t care about how much money you spend. They care about the, when are you getting the big right? And so they take you to the, to the trough, and fatten you up. and so you get an, a rapid scale mode and that’s, and it’s, it’s win or lose, you know, one of my first investors was a guy who was a very, very famous venture capitalist, who was one of the founders, one of the very first tech funds back in the, back in the late seventies and early eighties.

And he, and he said their model was, was they’re looking for only businesses that could do a hundred X of their investment so that if you put in a million, they’re going to get a hundred million out. And, and they had one in 18 deals be successful. And so if you doubled or tripled, it was a loss to them. It was a write-off. They didn’t care a lick about that. They’re looking for the big w so they’ve, they’re basically picked businesses that can scale super, super well. And they, they pump it full of cash and one in 18 wins the rest. They don’t care about

Gene Hammett: Bob. My mind is, wants to go through a little bit of a journey with you we were going to do this kind of off the cuff, have a good conversation about scaling your business. I want you to go back and think, and, and, and really here are the guidelines. It has to be applicable to today’s leaders and founders, and just share key inflection points. As you went along, the journey of scaling up your business. Inflection points are just those, those real turning moments where you either made a big decision that helped out or maybe you made a mistake of some way. Can you walk us through some of those inflection points of scaling a business?

Robert Fraser: Yeah, Gene, it’s a great question. And it’s something I never, ever really thought about, but that is really a great idea, you know, and, and the first one I told you, I started with it terrible business plan. And so the first inflection point I made on this is probably pretty lame. I mean, everybody is probably light years ahead of me on this, but you know, all my customers worked. It was an advertising-based business, a horrible business plan. And then all my customers said, Hey, this is great, but can you sell my product? And I’m like, no. We’re maintaining, you know, a journalistic period here. And the pivot I made was actually listening to my customers. They wanted calmer e-commerce so I, feel it to what my customers want it. And I mean, it seems pretty basic, right. But am pretty dense. And, and it worked so all of a sudden, we started getting a whole lot more, more customers. So that was, that was really a, you know, pretty obvious pivot for some, but for me, it was critical that that was a that was a big deal. You know, I think a second one was when I took venture capital.

Gene Hammett: Hold on Bob,

Robert Fraser: Go ahead.

Gene Hammett: When you say, listen to customers, some people like Steve Jobs say, don’t listen to customers. I think we get twisted on what that really means. , what have you, what are your one or two key steps of listening to the customer so that you get insight and can make that pivot?

Robert Fraser: You know, I think hearing their pain and hearing theirs. It’s basic, basic marketing and, you know, serving your customers. So I get what Steve is saying. He’s saying, Hey, let’s be the outlier. Let’s be, let’s be creative geniuses, which I agree with, but you do need to listen to the customers, you know, too, as far as, you know, where are their pain points, where are they, where’s the market not taking care of them and, you know, selling them something that they, that they want and they’re screaming for. So, , you know, it was a critical pivot.

Gene Hammett: I’m glad you made that clear. So you were going into your second point, which was taking venture money.

Robert Fraser: Taking venture money. So you, we became from a private company or were just kind of closely held to taking outside, outside the capital. That was a, I wasn’t really comfortable with that, you know, and I don’t know these people, are they, good people? Are they honest? Are they, you know, so, so there was just a ton of angst and I didn’t want to do it. And. And finally bit the bullet because I needed the cash, to grow so bit the bullet and, and turns out, you know, I learned a lot about what I won’t do and by the way, my latest business, I didn’t take venture capital and I wouldn’t. So, so, you know, as good and bad. It’s pluses and minuses. So that, that was, that was a big deal, but I really became, I became a scale guy and figure it out how to do it. So, so I got key skills, even though they put me on it on a trajectory, that was, it was either a moonshot or a, or a crater, right. There’s no middle ground and, you know, re very risky proposition, but incredible lessons learned at the same time.

Commentary: Now, Bob just talks about going from a private company to taking outside capital meaning, do you raise money or not? Probably one of the biggest decisions that you’ll have to make as an entrepreneur. Are you completely confident in who you are and what you’re doing and where you’re going to be able to bring on outside capital? What are the things that you have to be aware of is that anytime you raise money, you are giving up the control of the business. And in many times you’re giving up all the control because they will be putting people on the board. They will put people that have more experience in front of you. And so that they lead the team. Now, if you’re prepared with that okay. With that, then that’s perfect for you. But if you’re not, if you’re not quite sure, make sure you step back, do the research you need to, if you want to have a conversation about it, check out, just go to Love to talk to you now here’s Bob.

Gene Hammett: All right, we’re going to go too much into that, but I’d love to know what that third inflection point is along that journey.

Robert Fraser: You know, and honestly it was getting, it was when I hired. , so I, I mean, I’m a computer scientist from Berkeley. Okay. Kind of a geek, not S I mean, a level 10 introvert and my management style, I used to call it like a mother hand with a hammer, you know, I mean, I was not good with people. I wasn’t a good manager, get frustrated, let people have it. And so it was just a rough business to work for me, you know? , and what happened is, is the VCs, wanted to bring on skilled management, you know, hello. , and, so we hired a guy who was a leader of, I mean, it was, yeah, I think he had 4,000 employees. He was a COO of a local, very large medical tech business. And he came on board. Honestly, this was like, so he was my, he was my president. I was the CEO I learned far from this guy. I learned how to be a great manager and how to, how to actually communicate, you know, with respect to people and how to get, get people to move forward and do what you wanted to do and how to, so, so that was, that was, I just really became a very different person and a very different manager. Because of this guy, and, , and can you learn from somebody who works for you and, you know, the transit, the transformation of my life was absolutely extraordinary, absolutely straight. He just because I’d had models now, finally, how, how I could see it. Right. You can see how to do it and how, and so much of what I, what I practice today is really stuff I learned from him.

And then I’ve taken to my, I’m going to put my own spin on.

Gene Hammett: You know, I think a lot of. I think that they understand management and leadership, but when you really pull back the covers, which I do, I do have some feedback, three sixties where I’m having this. Most of them don’t have a clue of the gaps that they have in their skills of listening, of communicating, of really creating connection and understanding across the company and get alignment. But you learn those from an experienced person that was ahead of you in the game.

Robert Fraser:  Yeah, and who worked for me of all things, you know? Yeah. , and absolutely. I mean, seeing it in practice, you’re right there. There’s these, you know, level 10 managers, I mean, that are just crazy good at what they do. There’s and there’s a reason that they’re successful and the reasons the success follows them. And. You know, it’s, it’s, it’s in, it’s in a lot of books, but you don’t see, it really practiced out there a lot. Do you, you know, maybe you do, but, but it’s not super common to see that practice.

Gene Hammett: There’s a question in here that I want to make sure this is really clear, and I have no idea what you would say, but you learn from this person was their style of teaching you and learning from them. Were they more like a coach or, or some other type of style?

Robert Fraser: They literally ran the business. I observed them doing it. So they didn’t coach me. I was just watching them do it. And I’m like, that is awesome. You know, and just watching how they got people rather than just piss people off or frustrate people or those kinds of things. He was just able to move the ships smoothly and calmly and chained into massive new directions and other things by just clear communicating, by the way, they did meetings the way they did just performance reviews, and everything else just completely shifted. I’d never seen anything like that’s. I mean, he, I think he was a student of. A lot of the best thinking and, you know, kind of best practices and management and he, but he actually practiced it and sort of seeing it all was new to me as a computer scientist, for sure. You know, they don’t teach that stuff, and, coding schools, you know, ,

Commentary: Bob just talked about the importance of clear communication. No, I think clear communication is good, but you know, what’s better explicit communication, explicit communication. It’s not about cussing or anything like that. It’s about you communicating in a style that can’t be misunderstood, that people get it right. The first time that people understand they get, they buy into the ownership. You’re on the same page. We could put a lot of details around this, but the core of it is when’s the last time you put any intention on being a better communicator, a better listener ability to share your thoughts. In a concise manner or maybe it’s just the ability to make sure people understand what you’re saying because sometimes what you say and what they hear are completely different. Explicit communication is the job of the CEO, the founders of the company, to be a model to everyone else. And what that means. I’ve got some training that we do here, but if you want to have a conversation about you being the best leader, you can just check me out at Now back to Bob.

Gene Hammett: They actually teach the opposite. I’m sure I’m going to get it, we have time for one more inflection point across this journey. I know losing everything, was difficult, but would you rather go to something else than, the resilience that, you earned the hard way?

Robert Fraser:  Yeah, Gene, that’s a tough one. You know, that’s a tough one to say yes. Oh, you know, I mean, as it was, it was so painful, so painful to lose everything. And I’m mean I was on the front page of the paper going up and I was on the front page of the paper, gone down to it. And that it’s just no fun. , but you know, you know, it became the best time for my family and my kids. I got four kids, all home, we’re all super close and they’re all have families are married successfully and grandkids and my wife, I mean, so, so the whole family thing, for whatever reason, It really worked. It really was the best thing for me to get off the hamster wheel, at that point. And, and nothing you would choose again, I guess, I mean, I would keep that thing alive. Had I been able to, you know, but it’s so glad it worked out and now I’m, I’m have something I actually control and I’m not beholden to outside investors. And I still got my family, you know, and all that working. So honestly, it’s all better. , you know, minus zero.

Gene Hammett: Would you hold the belief that we go through these things that are difficult in life for the purpose of creating who we really are and who we’re meant to be because now you’re a different dad. You’re a different, husband through, through this. , but you probably had to go through some of that dark period, to be who you are today. Is that fair?

Robert Fraser: Gene, again, great question. And there’s absolutely no question, but it’s not just going through that. Cause I know a lot of people that go through these things and they don’t do well. Yes. It’s about responding properly and about maintaining your health and building your relationships and, you know, sewing into those relationships and just strengthening those relationships and about resilience. You know, I, I would be sharing, a friend of mine, who was a, it was a, was won national awards, many national, she was a professor of accounting, but studies, you know, these, these interesting, it has a lot of interest in grants and studies.

She doesn’t her number one, number one, that she says her number, the number-one success factor in the earth is resilience. And being able to bounce back from things that that’s, that, that matter more to your success than any other factor. That they’ve they’ve measured. And so that, that really matters. And I do believe, you know, it’s like at this point in my life, I look at all the kind of pit stops I’ve made or pivots or, you know, other areas. And I, and I think every single one has added to today and to my success today, there’s no question that we can turn them in weekly. We can make them, we can allow these things to hurt us, or we can learn from these things and put them in our backpacks for the future and be they become tools for us.

And, I mean, I’m sure you, as you, as a coach, are right. You know, coaching people. That, that is going through challenges, having those challenges qualifies you, you know? And so we, you put them in your backpack as a tool. And I, and today I can honestly say it’s like, everything in my life has added up to this moment and everything in my life makes sense for where I’m at now. So, absolutely.

Gene Hammett: I didn’t know where I’d go with that, but I can talk about one of the things that have kept me going through all my tough times, I lost it all which I shared with you. And I’ve shared on the show many times before, but I have decided, and this comes from a Jim Carrey. Well, where he said, I’ve decided that life works for me. not to me.

Robert Fraser: Wow.

Gene Hammett: And he, you know, he kind of framed it as like, I don’t know if this would be true, but I’ve just decided this is what it is for me, that all the hard times that I will go through are for me to, to develop and grow. , instead of these things happening to me. And it’s just helped me that one quote, more than, than most.

Robert Fraser: Wow. That is absolutely profound. I love that. I would absolutely concur, absolutely concur.

Gene Hammett: Bob, you’ve been a pleasure to talk to today about the journey to scale and losing it all. I really appreciate you sharing from your heart so that others can learn the hard way. It is a tough decision about taking money or not. You’ve painted the picture of both sides. I think it’s, it’s one of the biggest decisions that an entrepreneur has to make in that journey of scale.

Robert Fraser: So good, great to be here and best to you and all your, all your listeners.

Gene Hammett: Well, I want to wrap this. One of the things I love to do is like reflect back. What did we just hear? So Bob’s listening in so you can correct me if I’m wrong, but I took away from this a lot of notes about, you know, it really takes a special kind of leader to, to go through this journey. It’s not easy to do it. It takes a lot of courage, a lot of confidence. You know, learning from others and having the ego put aside to learn from this president that came in is a very good lesson to learn that you don’t have all the answers and it’s okay not to have all the answers. In fact, it’d be crazy to think that you did have all the answers, right. You have to be open, to seeing another way to lead, manage, to get the work done. And that’s one of the big lessons I see here. Now, the other piece behind this is, is when you do lose it all, and we’ve all had tough moments that you’ve got to dig down and say, what, how are you going to get back up?

Because that is the key to your long-lasting journey and really serving humanity, serving yourself. So those are the things I took away from today’s episode. I want to remind you that if you are on your own journey of leadership and entrepreneurship, and you wanna connect with others in the fast road community, learn from them, just like what Bob said.

We get together and fast-growth boardroom to do that. Do you think you’re a fit for something like that? Check out We race Porsches. We, we can do some dune buggy stuff. We do a lot of fun stuff, but the core of it is you being an extraordinary leader, growing your team, and growing the value of your company, where it is today.

Just check out if you’re a fit as always lead with courage. See you next time.

Disclaimer: This transcript was created using YouTube’s translator tool and that may mean that some of the words, grammar, and typos come from a misinterpretation of the video.




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