← Travis Makes Money
Travis Makes Money
INTERVIEW | Make Money by Scaling Profits, Not Just Revenue with Cruz Gamboa
00:28:13
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A
So good, so good, so good.
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That's why you rack. You're listening to the Travis Makes Money podcast presented by GoHighLevel.com for a free 30 day trial of the best all in one digital marketing software tool on the planet, just go to gohighlevel.com travis. What's going on, everybody? Welcome back to another episode of the Travis Makes Money podcast where it's a mission to help you make more money. On this episode of the show, I have a new friend, Cruz Gamboa. Cruz is the founder of Ascend Growth ventures and scaling CFO to where he helps 1 million to $30 million founder Le businesses scale profitably through his financial operating system framework. A former GE Finance and GE Capital executive, Cruz spent over 20 years structuring and closing more than $2 billion in deals across the US and Latin America. He's also a scaling up certified coach, holds an MBA from New York University Stern School of Business, and is the author of the upcoming book Scaling Profits the Missing Financial Operating System for Ambitious Founders. So I think he knows a thing or two about managing finances and learning how to make a little bit more money. So, Cruz, what's up, man? Welcome to the show.
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A
Yeah, Travis, it's great to be here on the show, man. I'm, I was looking forward to this conversation.
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B
Yes, sir. Well, let's jump right in, man. Tell me the first time you ever made a dollar that you were excited about.
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A
Wow, okay. Yeah, the first time I made a dollar was when I was 8 years old. We had a, an orange tree in the back of my house and the orange were super delicious. And me and my brother had this great idea that we would just take oranges and just go and sell them around the neighborhood. And we did. And we actually, I thought people was, they thought it was kind of cute. So we, yeah, we, we got a lot of money out of it, so.
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B
Nice. So door to door orange sales.
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A
Door to door orange sales. That's how, that's, you know, that's how it all started. Cruz Gamboa Brand.
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B
Where, where did you grow up, Cruz?
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A
Originally in Venezuela.
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B
Yeah, Venezuela.
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A
I left when I was 17. So, yeah, I left pretty, pretty young.
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B
So what, what did your parents do.
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A
My dad was in the insurance business. He was just like a badass sales, like, insurance sales person. And my mom, she did like, like. I don't know what you call it, but it's basically like, like, bio lab work. Like, she used to have her own. Her own lab.
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C
Okay.
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A
Yeah. Just. That's what she did.
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B
So. So got a little bit of that sales DNA from. From dad then, I guess, huh?
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A
Absolutely. Yeah, absolutely. My dad was always, like. It was kind of funny. Like, I remember when I was like, 8 or 10, like, he started selling like, like toys. Then he solved golf clubs. Then, like, I saw him, like, go from one thing to the other until he finally made it through insurance. And then he became really good at it, actually. He was one, like, one of the best insurance sales reps, basically, in the whole country.
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B
Oh, wow. Okay. And is that sort of the path that led to the US eventually? Or did you come over by yourself?
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A
No, I came over by myself. I actually got a full tuition scholarship to. To just study here in the US I could literally, like, pick pretty much anywhere that I could get into. I applied to a couple of schools and I got into the University of Texas at Austin, and that's where I graduated from.
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B
Was that something that you knew that you wanted to do? Like, did you know that you wanted to come to the U.S. like, did anybody else in your family do that?
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A
Yeah, well, it. It's funny you say that, because that's how I got my. The idea. My. Both of my aunts, they also got scholarships to study overseas, so they did leave, like, almost like a decade prior, me leaving. And I. And for me, it. It. I can all. I can trace it back to a moment where I was like, 14 years old and I don't know. Do you remember that guy Chavez? Like, he used to be like, the dictator in Venezuela. Like, I remember, like, yeah, yeah. So he, like. I literally, like, saw, like, some of the planes, like, throwing bombs in, like, one of the, you know, the military compounds and everything. And I saw all of that and I was actually watching it on television and I'm like, I just need to get the hell out of here. This is not safe.
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B
Yeah, yeah. Like, I'm. I might only be 15, but I know that this is probably, like, a bad.
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A
This is not good.
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B
I knew that's not going to serve us well in the future.
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A
Yeah, yeah, yeah, yeah. And then you just have actually. It, like, it's actually a funny story. If you. If you. If you don't mind.
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B
Yeah, please.
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A
Literally, like, I just put that out there that I just wanted to leave. And my parents at the time didn't have the money to send me to school here in the US and I remember I was like, about, around 16 and I was leaving school and I just bump into a couple friends and I asked him like, hey, where, where are you guys going? He's like, oh, yeah, we're going to apply to a scholarship to study overseas. And I'm like, what? Like, how, how do I do that? So, well, why don't you come along? Just like, here I have an extra form. So I literally was in the car. I, like, I didn't even tell my mom. I just got in the car with these people that were going to like, you know, put the application in. And I was like, somebody like, I borrow a pen, I put all my information, and then I had to go and like, take a test and all of that. And I got selected and they got. And the person who actually, like, got me, like, gave me the ride, did not get in, so.
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B
Oh, no way.
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A
Yeah.
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B
That's wild. That's great. Well, it also speaks to, like, when you want something, put it out into the universe. You never know who's listening, you know what I mean?
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A
A thousand percent. That, that's the lesson that I took from that, from that situation. Yeah.
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B
So when you come, so you come over to the States, go to University of Texas in Austin, what was the, what was the goal in, in college? Were you going for business? Were you going for something? Like, were you planning on staying and working in the States? Were you going to go back home? Or were you just not thinking about any of that? Let me just get my degree first. We'll see what happens.
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A
Well, it's a, it's a great question because at, at the time, I had like, no idea what I was, what I was going to do with my life, to be honest. But I did know that I had to come back to Venezuela because part of that scholarship, it was a scholarship given by the Venezuelan government at the time, and there was like a covenant that basically said that I had to come back and basically just work in Venezuela for a little while. Yeah. So I, I knew I had to come back eventually. Okay. And they said that they will help me. They will help, you know, sort of like they will help get me a job, basically. But so I came back after I graduated and I, you know, they, they didn't really help because that whole organization was dismantled by Chavez. So there, there was not, I mean, whatever agreements that were made were not being sort of followed. Yeah, yeah. And so I had, I had to find a job at Unilever originally and then at General Electric and I did most of my career in General Electric over 20, 23 years at GE.
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B
So you started for working for GE back in Venezuela?
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A
That was my first job, but it was, it was part of a, of a, one of those like rotational programs. So I got hired there. But I, I almost never, I never came back to Venezuela ever again.
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B
Basically.
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A
Like, I started going around first Latin America and they sent me to the US and like every six months I was rotating jobs and all that. So.
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B
Okay, got it. And, and, and then ended up back in the States.
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A
I ended up back in the States. I had a sort of a finance manager position. Then I did a little bit of like financial Sigma. I was like a.
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A
Do you know what Six Sigma is like? Sort of the, the quality? Yeah. So, but we did it for, I did it for finance. So I became a black belt for, for the finance organization in one of the GE businesses.
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B
Okay, got it.
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A
And then that led to other, other things, becoming like another finance manager, another company like GE Company. Then I went to GE Capital and that was actually kind of cool. I, I spent seven years at ge, GE Capital, and I learned a ton. So then after that, you know, sort of my career kind of like exploded.
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B
GE Capital, can you explain exactly is this is a, this is a division of GE that invests in companies or what. What is it? What exactly does it do?
- [11:33]
A
Yeah, ge well, GE Capital used to be used to it because it doesn't exist anymore and it hasn't existed for a while. It was basically the financial division for General Electric. So they did corporate loans, they did equity, they did like all sorts of stuff. It was, it was actually one of the largest fincos in the world at the time.
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B
But I was gonna say that surprises me that it's not there anymore. Cause I mean, GE is one of those companies that you just like, you hear about it but you don't realize how like just how massive it is. It's like a Johnson and Johnson to me. It's like you make like medical equipment and then you make like lotion. You're everywhere, you know what I mean? Yeah. So like when companies like that spin off a financial arm, it's usually not to, to do mom and pop business loans, you know?
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A
No, it was, it was like, it was literally kind of like a bank. More like, I would say more like an investment bank.
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B
Okay.
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A
So. So they did a lot of like, like mid market loans, all of all types for all industries and also for some of the verticals for ge, like example aviation, healthcare, energy. So it was a, it was a pretty massive company. It was actually at some point it was responsible for like 55% of the revenues for General Electric. So this is how important it was.
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B
Wow. What happened? Why did they end up, why did
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A
they end up shutting it down after 2008? It was kind of like deemed like too big to fail. But in reality, like the portfolio, I remember this, our portfolio was super healthy. We didn't have a lot of like toxic stuff like, like, you know, like real estate assets and all of that. Like, but, you know, it was like the investors were pretty adamant that GE had to reduce the GE capital footprint. And the reality is, you know, I, I think of the time of the management that was in place and they also didn't, they, they didn't see the opportunity to actually create the whole company into a separate finko. I think that would have been the greatest, one of the greatest IPOs at the time. It would have been, but it never was. So they actually ended up selling the, like, different parts and the different sort of like portfolios to different banks and investment companies, et cetera. So it was not, in my opinion, in hindsight, if you ask me, that was like the stupidest idea. But, you know, that's how they did it.
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B
So interesting one might decide, right, what, at what point and why did you go back and get an mba?
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A
I felt that, you know, because at the time in ge, like, you know, to be successful you either have to, you know, have either an MBA or come or have come from. There was sort of something called the audit staff, which was the, I guess, yeah, like the internal audit team at General Electric and most of the leadership actually came from audit stuff. So this is actually quite remarkable that a lot of the, the CEOs for the different divisions and CFOs and you know, all the leadership, you know, I would say probably like 60, 70% came from other stuff. And I made a decision not to go to other stuff because I wanted to be married, you know. And like most of the people that went to other stuff, you had no life, basically. Gotcha for four years almost.
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B
So, so. And getting an MBA was sort of like an alternate path.
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A
It was a crutch, you know, it's like, okay, compensating for not having gone through that, you know.
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C
Got it.
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B
Okay. How did you find your time with the mba?
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A
It, it was interesting. I, I mean, I went to NYU and I mean, I had some really amazing professors. I didn't really like, spend that much time like networking, to be honest. I, and I, in hindsight, that's one of the things that I, I wish I would have done more, but I, but I also had a, I have basically a three year old and a baby, you know. Wow. And, and, yeah, and, and my, at the time, my wife, she just like, she just needed help, man. So I, I mean I was like work, school, babies, you know, that was my three areas of, of of attention.
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B
So yeah, not, not much time for extracurriculars during, during.
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A
I wish, I, I wish I would have had more time. But yeah, that was not in the cards for me at the time.
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B
When you, when you're advising young people at this point, the, the path that you took at that time, do you still view math now today? Would you have done anything differently if you were 18 years old now versus back then?
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A
Well, I mean, I'll, I'll say this. I mean, if you are just graduating from school, I think you need, you do need to get a job and in the sense that go work for a company for maybe two to three years, then right after, like craft your own path. I mean, I believe that entrepreneurship is like the biggest game out there for somebody who's ambitious and smart and, you know, driven to execution. It is, it is this, it is basically it puts you in the steering wheel of your own life.
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B
Okay.
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A
And it is true that not every company that you're going to start is going to be successful, but you're going to learn a ton. Okay? So if you have that itch to, you know, make a lot of money and just create a lot of impact, you know, there's no better way to do it. Than as an entrepreneur, choosing the path of sort of the corporate world is not for everyone. And quite frankly, I think that path is going to become more and more. Less of a choice, I guess. Yeah, yeah, yeah. Because there just, there's just so many ways to make money that do not require for you to be at a, at a corporation, you know, and working,
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B
you know, 75 hours a week for that corporation.
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A
Oh, man, I've lived that life and it, it, you know, it burned me out, you know.
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B
Yeah.
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A
And, and, and I, you know, I, I often told this story in other, in another podcast and when I'm interviewed because there's this, this thing that happens. Burnout, right? Burnout is, it's actually, it's actually kind of interesting because I think most people that experience burnout, they don't experience it because of the amount of work that they do. Because I'm telling you, as an entrepreneur right now, I work very long, long hours and I love what I do.
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B
Yeah, big difference.
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A
Big difference. So I could be working like, I don't know, whatever, 20 hours a day, and I will still love it. You know, I don't, I mean, obviously at some point you have to rest and all of that. I'm not, I mean, advocating for, you know, burning yourself out, but the reality is when, when you're doing work for stuff that is not aligned with you, that's when you have the highest probability of experiencing that burnout and working for other people. Unless you really love the mission and the cause. If you're not aligned with what the company that you are working with and the team that you're a part of and your boss, if all of those three things are not a yes, right, Then, yeah, you have a, probably a high probability of just being demotivated. And like, you know, you'll be another statistic. Two thirds of the, of the US workforce is quiet quitting. Right. And the reason, in my opinion, I mean, that's not how they say it, because they, they have, they cite different causes for that, different reasons. So in my opinion, I mean, it has to do because you go to work, you spend eight, ten hours a day, and you don't find any meaning in what you do because you're just doing like, you're either number crunching or you're just, you know, doing plain politics, right? Just doing the same thing over and over and over again. And it's just like, you're like, why am I here? This doesn't, you know, like, what value am I creating? And you start like, subconsciously you start asking yourself those questions and then all of a sudden, you know, they become more like, you know, things that you have to figure it out on your own, on your own spiritual journey, on your own, sort of like, what is it that you want to be when you grow up? They become real conversations that you have to accelerate. Otherwise you run the risk of like, being, you know, kind of like miserable.
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B
Yeah, yeah, yeah. There's not a direct correlation between the volume of hours worked and you're burning out. You know, that's. Be working six hours a day and still burn out over here and be working 18 hours a day and not burn out over here. If there's purpose and meaning or mission, if there's some form of a values alignment or something like that that can keep you, you know, excited about the work that you're doing. I'm curious, Cruz, have you, did you. What's your mentality on, like, coming over the States as an immigrant with the work ethic that, that you have. Have you seen, have you seen that have some sort of an impact on your career? Was there something that was obvious to you about it or did something that you'd ever really even thought about?
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Initially, I did not really, like, consider it because I was part of a corporation, you know, and in corporations that, that is not a thing. You know what I mean? Yeah, as much. I mean, it is to some degree, but not, not as much. Okay. Because it's, you know, corporations, especially bigger corporations, try to create sort of like an equal opportunities for everyone. And by the way, equal opportunities doesn't mean that I got any like, you know, benefits or, you know what I mean? Like, I, I had to like, basically it's. It was a meritocracy. You know what I mean?
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B
Yeah, yeah.
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A
I have to, I have to create results for the company and be the guy that it. Sometimes I was even comp. Overcompensating and doing much more than many other people, you know, because. Because of my, because of my background.
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B
Yeah.
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A
So, I mean, over time, I mean, I. I've kind of like realized that in some circles it may, it may be, you know, something that, you know, could deter somebody's. Someone's career and economic success, but only if you let it, you know, because there's like millions of other people that don't have an issue. And like, if you focus on the positive, then. And focus on those people, then your market is pretty huge, so. And so trying to hide behind your accent, your, you know, your sex, your gender, for that matter. Right. Like, we can always try to pin our success to some external factor and then that's giving our power away. At least that's my mindset. Right. That's my mentality. You asked me about that. Right. I believe that we get to craft our own destiny. And you know, sometimes people may want to put you into a box. I mean, if you want to be in the box, you go into, you walk into the box, or you craft your own box, you know?
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B
Yeah, yeah, that's, that's why I asked the question. I've talked to so many different people on the show now, and it's just clear to me that there's, there's almost a different mindset with a lot of, like the immigrants that I've talked to on the show that just. But there's a, there's sort of a sense of entitlement for, I think a lot of people that were kind of born raised here where they think they're owed a version of their dream life because they checked all the boxes. And so therefore I should be able to have this life. And I don't find that to be necessarily true for, for other folks. Like, it's more just like, yeah, of course I have to work hard. Like, yeah, of course I have to.
- [22:46]
C
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- [26:03]
B
to take big risks. Yeah, of course I have to, you know, work on work nights or weekends. Like of course I have to do those things. It's not met with this, you know, visceral reaction to, to, to fight the power or fight the system. It's more just like, yeah, if I want to be ultra successful, then I have to do the things that those people are willing to do. Like, it just makes sense.
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A
I mean, I, I mean, I resonate with that. I mean, I think that there's nothing better than just accepting reality assists and just seeing. But, you know, hey, this is, this is the, the system that I'm in. Okay, then you do the best you can with what you've got, you know, not. And you don't try to like, oh, I wish it was this way. And this is why I'm not succeeding. I believe that that's like I said before, that's like handing your power to others, handing your power to the system, to the government, to, I don't know, to politics, to whatever it is. Right.
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B
To things that are outside of your control.
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A
Things that are outside of your control. And like, when you show up and you deliver value and you have a, you know, a good work ethics, people notice and people want to be around people that they like, they respect and that are adding value.
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B
So tell me a little bit more about Ascend Growth Ventures and scaling CFO IO. Where did these come in play and what do you do for people?
- [27:22]
A
Yeah, so initially I, you know, after many years in corporate, I, I had a niche that I wanted to do something else. And I, you know, there was this startup that came and recruited me to become CFO and, And chief development officer. And so I was there for like a little while and just like just, just one another, I guess, another startup that didn't work out. And eventually I was faced with the decision of either having to go back to corporate or doing my own thing. And I chose the latter because I guess it was scarier. Yeah. And I, and I had no idea how I was going to do it, to be honest. I, I hadn't, I, I had a little bit of idea, but I wasn't really sure. And I said, well, what. Let me go back, Let me go back to basics. What is it? That. Well, right. So I just, like, I literally went through the process of writing, like journaling, like, what am I good at? What are my skill sets? What. What are my desires? Like, I did all of that inner work and then I figured out that I was, you know, that I had been. For the longest time, I had been a CFO and, And a business person because, I mean, some people think that those are different things, but business and CFO is actually the same, by the way. And I mean, I, I was responsible for closing an $800 million deal. So I've done a. As a CFO, as an in finance person, I've done really, really big business things. I just wanted to kind of like reframe that. So I started working as a fractional cfo. At first I only had a couple of clients, then three. Then I got into scaling up. I learned sort of, I got myself certified and I got a couple of clients scaling. And then I realized something that is I found super interesting, which is that most entrepreneurs, they think. Well, first of all, they think that growth is the same as scaling. Okay. And I don't know if, like, maybe we want to, you know, double down on that one, but I think there's. There's something.
- [29:23]
B
Tell me the difference between those. Yeah, tell me the difference. Yeah.
- [29:25]
A
So growth is when you're growing your. Like you're growing your revenues. Right. You could be growing from like a million to 2 million, 2 million to 3 million. That's not scaling, that's growth. Okay. Scaling is when you actually create a system that has a. Basically, it's like a machine, a repeatable system where it doesn't matter if you put more clients in, more opportunities, it can still has the capacity to absorb all of that. And what it does is every time you increase your revenues, it increase your profits as well. Yeah. So it's not just growth. It's not just revenues, it's profits. Scaling, scaling is about profitability, not just revenues. Yeah.
- [30:06]
B
And so like, your argument would be that scaling is the thing that businesses should be focusing on, not growth.
- [30:12]
A
Absolutely. Because that's what drives value in the end. Travis, think about it like, you can have two companies, two, $10 million in revenue each, and one could be worth a million, and the other one could be worth 10 million. And you're like, how is that possible? Well, what is their. What are the profits? What is the present value opportunities of the growth that that company has? Right. And when. If you do a sort of a discounted cash flow model, or even if you just use multiples to figure out what the valuation is, the valuation is going to be very different. One is very valuable because it has profits and generates cash and the other one doesn't. Yeah.
- [30:49]
B
And to your point, has systems to continue scaling for a new buyer.
- [30:53]
A
Absolutely. Because that's the other thing. Right. Like sometimes we are so focused on growing the company and we forget that eventually if our target is to exit the company, to sell it. Right. The company has way more value if we're not in it.
- [31:09]
B
That's right. That's right. Cruz, I appreciate you taking the time to come on the show, man. I wish we had a little bit more time. Tell me where, where people can go get some more from you.
- [31:17]
A
The best, the best place is LinkedIn. So just look me up on LinkedIn. Cruz Gamboa. I'm, you know, pretty active there and have a couple of, you know, sort of documents that I share. Like some of like the seven financial blind spots is one of the things that I share with people the most because it just kind of like highlights. I like what it, in my, in my opinion are the seven kind of like recurrent places where we actually, like, screw up as entrepreneurs when it comes to our financials. So that's.
- [31:48]
B
So Cruise Gamboa over on LinkedIn. G A M B O A Cruise Gamboa over on LinkedIn. Go follow him over there because he's got a new book coming out as well called Scaling Profits, which is some of the stuff that we're talking about here today on the show as well. So, Cruz, I appreciate you taking the time. I know you're a busy guy. I don't take that for granted. Everybody else tuning in, remember, money only solves your money problems, but it's easier to solve the rest of your problems when you got some money in the bank. So let's start there here on the Travis Makes Money podcast. Thanks for tuning in. We'll catch you guys next time. Peace.