Have you ever lost it all? What happened? Were you able to bounce back? Today’s guest, Jason Zilberbrand shares his highs and lows in building multiple businesses in the aviation industry.
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ABOUT OUR GUEST:
Jason Zilberbrand is the President of VREF Aircraft Value Reference & Appraisal Services. He is an Accredited Senior Aircraft Appraiser with the American Society of Appraisers (ASA), and an Accredited Member of the Appraisers National Association (ANA), and he is also an Accredited Member of the International Society of Appraisers (ISA). He is an Expert Witness, broker, inventorying dealer, acquisition agent, aircraft owner, aircraft operator, contract negotiator, consultant, teacher, conference speaker, and author. Jason spent over 15 years as an inventory aircraft dealer with a $300-million-dollar credit facility and over $4.5 billion in aircraft transactions.
After spending 25 years in General Aviation working directly with the aircraft owner/operator and the leading manufacturers and financial institutions, and owning and operating his aircraft, Jason knows the international aviation marketplace. He is considered an expert in aircraft valuations, appraisals, and aircraft transactions, and his background is diverse with knowledge in technology and aviation.
Jason graduated in the top 1% of his class with National Honors from Roosevelt University in Chicago and a lifetime member of The Franklin Honor Society and a member of the Royal Aeronautical Society. Jason is an avid Triathlete, marathon runner, swimmer, and cyclist and enjoys spending time with his family. Jason is currently the Director of Public Relations for ASA Chicago Chapter 33.
Sponsor
This episode is sponsored by Big Sky Franchise Team. If you are ready to talk about franchising your business you can schedule your free, no-obligation, franchise consultation online at: https://bigskyfranchiseteam.com/ or by calling Big Sky Franchise Team at: 855-824-4759.
Transcription
Tom DuFore, Big Sky Franchise Team (00:00):
You’ve worked hard to build your business and now it’s time to grow. Welcome to the Multiply Your Success podcast. I’m your host, Tom DuFore, CEO of Big Sky Franchise Team and a serial entrepreneur. And the purpose of our podcast is to give you a weekly dose of inspiration and education to help you take that next step in your expansion journey. As we get going on the episode today, the opening question is all about losing it all. Have you ever lost at all, maybe in business during an economic shock or a downturn in the economy, or maybe a bad business decision, or maybe a personal relationship? How did you respond to that? How did you come out of it? What was the result of some of those decisions you made?
Tom DuFore, Big Sky Franchise Team (00:48):
Today’s guest Jason Zilberbrand talks about how he has been a part of building multiple businesses. In fact, one in which he had over $4.5 billion in aircraft that he owned at one point and then lost it all and shares these stories of these highs and lows of all throughout his journey. So I’m so excited to share this story that Jason shares with us. Let’s go ahead and jump right into it.
Jason Zilberbrand, VREF (01:14):
My name is Jason Zilberbrand. I’m the president of VREF which is one of two industry Bluebooks for aviation, valuation, and appraisal services.
Tom DuFore, Big Sky Franchise Team (01:24):
Great. Well, thank you. You have such an interesting story and how you came into this. So you’re in aviation and aviation appraisal. That seems pretty unique and niche. So how do you end up in aviation and then of all things in the appraisal business?
Jason Zilberbrand, VREF (01:42):
I know it’s crazy. So yeah, nobody really wakes up in the morning and decides they’re going to become an appraiser. I think the short answer is after many, many years of collecting a lot of worthless knowledge in anybody else’s industry, it’s pretty valuable. So the long story is I grew up in a family aviation insurance business, and I was really fortunate that the business started when I was a sophomore in high school. So I was at that really unique position in both of age and interest in business. I don’t know, I’ve always been interested in business. I think being an entrepreneur was something I aspired to be or a salesman I definitely wanted to be in that environment from a really young age. When I was a kid, I used to go down to the Board of Trade and just hang out and watch them do arbitrage all day.
Jason Zilberbrand, VREF (02:34):
I thought that was the coolest thing in the world and seeing them active in the pits, and that was the environment I want them to be in. As I got older, I think that that changed a little bit, but my love for business and how people make their money. I find those stories to be so cool, which is why I’m envious. You get to do this every day. But learning from people I think is something else. I’m in this position where I’m a sophomore in high school, my dad starts his business from scratch, knew nothing about aviation. My grandfather was a pilot, but I mean, that was about as far as it goes. And I learned really quick that aviation, the doors are shut, especially business aviation.
Jason Zilberbrand, VREF (03:15):
I think if you’re in general aviation and dealing with piston aircraft or maybe on the commercial or regional transportation side, it’s a lot easier, but the obstacles in place to get into business aviation or dealing with business jets is just really, really difficult. And so I find most…
Tom DuFore, Big Sky Franchise Team (03:34):
Jason, sorry to interrupt. What do you think that’s from? What is that? Is it just an old network? Is it expensive to get into? What are some of those barriers to entry?
Jason Zilberbrand, VREF (03:44):
The barriers really in the business jet side. A business jets tend to be where there’s a high focus of worth. Whether it’s high net worth or corporate worth. And I think you find pockets across the United States where there’s a high density of those types of people and then you find those types of aircraft. California, Dallas, Houston, Florida, New York, oddly enough, Chicago is not a big business aviation market, especially back when it started. I think that’s the other thing, it’s a young industry. Business jets started to be built in the late ’60s and were gaining some popularity by the late ’70s, and the people that flew on him were Elvis and James Brown and Hugh Hefner, right? So, I mean, there weren’t a ton of them out there and that holds true today.
Jason Zilberbrand, VREF (04:33):
There’s not a lot that get built. There’s not a lot in operation. I don’t really think the industry in terms of total population has changed a lot over the years. So those are some of the big obstacles. So typically if you’re either born into a family business or you get really lucky and you make a contact throughout high school or college that does this for a living and is involved with the operations of business aircraft. So I’m this fly on the wall and this young kid and my dad starts his business and there’s nothing about it. Fast forward, four years, I’m in college and a sophomore in college and the business is taking off and he needed help. I mean, it was really that that simple. So his partner was an investment banker who did not want to quit his day job.
Jason Zilberbrand, VREF (05:17):
He was making a good living and my dad was an investment banker and he did quit his day job to put it on the line and try and make this business work. And it was a really unique situation. It was a like a cross between health insurance and life insurance for airframes and engines of business jets. And it was needed because in those days they weren’t very dependable. They broke a lot. The engines blew up on start quite often. So you can imagine, right, you go to look at a $10 million airplane as a demo flight, and the pilot goes to start the aircraft up and boom, there goes one of the engines. Chances are you’re not buying it, right? They had a real hard time selling business jets. So these programs you’ll hear them referred to as hourly cost maintenance programs or engine maintenance programs.
Jason Zilberbrand, VREF (06:05):
The only one that existed was in the day it was run by Garrett Turbine engines, and it was called MSP and they covered scheduled and unscheduled maintenance. And that unscheduled maintenance, that catastrophic loss coverage was critical to the success of business jets gaining of popularity. So my dad decided to go into competition against them and do it for every engine and every manufacturer, whether they wanted him around or not. And it was tough. I think he enrolled two aircraft his first year in business, but by the time I was in college there were aircraft getting enrolled every day. And all of a sudden, he had thousands of engines enrolled and thousands of aircraft, I think when we sold the business, not to fast forward too far, but when we sold it, I think we had close to 4,000 engines on the program.
Jason Zilberbrand, VREF (06:54):
So it was wild. I got to see this one man show become a three man show become a 12 man show transitioning into what I think was the big transition in not only the industry, but also with the company. It wanted to grow up and become real corporate entity. You know, it was a mom-pop business. We were hands-on, we were intimate with our clients, and when that transition started, I think that’s when I started to lose interest. I know that’s when my dad started to lose interest, and that’s when the true entrepreneur I think came out of my father because I was not old enough to really witness it in the early days, but my dad bounced around a lot. Parking lots, salad dressing companies, JSSI the hourly cost maintenance program.
Jason Zilberbrand, VREF (07:41):
I think I learned that you can get intimately involved if you stick to your skill set and ultimately become really successful. And I guess that’s like rule number one, stick to what you know. We put the market. Fast forward now, so it’s 2004. So I had 10 years in the industry. I had been approached by a couple of clients to ask if I would help them buy aircraft. And I never really thought twice about it. I knew all the context, the manufacturer, I knew how the transactions worked. Somebody would say, “Hey, can you refer me to somebody at Hawker Beechcraft or Raytheon. Sure. Pick up the phone. “This is John Doe. He wants to buy a plane.” Okay. Six months later, I get a phone call.
Jason Zilberbrand, VREF (08:29):
“Where do we send your commission check?” My commission check. I mean, honestly, I know that sounds really naive, but I’m a 20 something, I had no clue that’s how it worked. I give them my account information. And in those days, if you remember while you’re transfer took forever, I get a phone call from my bank because more money came into my account than they had ever seen before and they wanted to make sure it was legitimate. And I’m like, I guess I had no idea. I mean, long story short, the guy sent two checks for 50 grand a piece. It was more money than I had seen in a lump sum ever. And while I was making really good money on a salary at the insurance company, it’s really hard to get ahead when you have no capital to work with.
Jason Zilberbrand, VREF (09:14):
So that was like my first opportunity to get a chunk of cash and be able to put it to work and start doing things. And then I recognized really quick that this might be an opportunity. It might be something that I could not only do something that I love and that I’m good at, but I get to sell and I get to be around business jets and how cool, right? So I walk into my dad’s office the next day and I’m like, “I just got 100 grand for selling these two airplanes.” And he’s like, “You’re kidding me.” I was like, “No.” He’s like, “Well, what are you doing here?” And I was like, “What do you mean?” He’s like, “Go sell airplanes.” He’s like, “If you can make that money like that,” he’s like, “You’re wasting your time, you’re wasting your talent.”
Jason Zilberbrand, VREF (09:52):
And I’m like, “Okay.” I was like, “Let me give it some thought.” So the wheels start turning and eventually I pulled the trigger. I said, “All right, I’m going to go do this full-time.” And he says to me, “I’m going to come do it with you.” I’m going to sell the insurance business and I’m going to come do this with you full-time.” I’m like, “Okay.” I was like, this is crazy, right? Because now the shoe gets flipped so to speak because I mean, here’s a man that I looked up to, obviously my entire life. Taught me everything I knew about selling, and now he wants to basically come work with me. I think that that’s a huge… I mean, it’s just a big responsibility change. And I remember freaking out a little bit, because it’s a lot of money to be responsible for.
Jason Zilberbrand, VREF (10:35):
But I mean, as you know, eventually we decided to pull the trigger and we put the business on the market, it took four years to sell the insurance company. And in those four years we built the first inventory dealership of paper contract to be delivered business jet inventory dealer. And so I worked at a car dealership. I had a credit facility. Back in those days, it was a little easier. So we’re going back now to 2004 and I took my dad’s stock in the insurance company and I collateralized it with a aviation centric lending institution. It wasn’t a bank, it was a finance company. And I think that’s a really important thing that the listeners understand because banks have regulation and financial institutions don’t. So I went to them with a partner. A partnership play, basically.
Jason Zilberbrand, VREF (11:30):
I said, “Look I’ll put in skin in the game, you match me, I’ll sell the aircraft before it delivers and we’ll split the profits.” Okay. So I call my dad I’m like, “All right. We got a deal.” I was like your 100 million is now 300 million let’s go buy airplanes.” And that’s what I did. Picked up the phone, called a client of mine who had a direct contact with the factory. I said, “I want to go buy positions.” And he said, “Okay.” And the first one was a Challenger 300 and we closed on it and I sold it 60 days later, paper contract. The plane delivered years from that.
Jason Zilberbrand, VREF (12:11):
I think that that’s a really important thing to also note, because back in those days, nobody was doing that. When you heard of somebody buying and selling business jets, they were tangible. They were on the ground, they were operational, they were usually turnkey. The general business model was you would buy an airplane, refurbish it, put it on the lot and wait for somebody to come buy it.
Tom DuFore, Big Sky Franchise Team (12:33):
Right. So you’re almost like you buy it and you drive it off the lot a thing, right? You buy the vehicle and away you go, but now in your case, you’re saying, “Hey, no, no, no. We’re taking…” You change that up. What led you to think of this new way of doing this?
Jason Zilberbrand, VREF (12:49):
It’s a great question. So it was actually a really big, happy accident, but we had these wonderful emerging markets back in the early 2000s and they were primarily India and Russia and Brazil. And everyone was talking about China, but China wasn’t doing anything yet. If you remember that acronym BRIC, we always used to hear about. BRIC this, BRIC that and while I was seeing it firsthand. These Russian oligarchs were buying aircraft like Tic Tacs. They couldn’t get them. And I kept witnessing this insane backlog just continue to grow. I mean, we’re talking about four or five, six, seven years from the date you decide to pull the trigger until the date you actually physically get delivery of your new plane and I’m going, “This is insane. Who wait seven years to delivery of an airplane?” I was like, “There’s got to be a way that we can take advantage of this.”
Jason Zilberbrand, VREF (13:37):
And so what I started doing… It’s a funny story. So the first one is I got a call from my buddy because I called my client and said, “I want to buy some positions.” He’s like, “I got a position.” He’s like, “You’re probably not going to be really happy, but it’s a huge opportunity.” And it was crazy. Now it’s 2004 and it belonged to Bin Ladin Construction Company in the UK. Yeah. That Bin Laden family. But who had nothing to do with Osama Bin Laden, but you know, it was a legitimate company and they were very prominent in the UK and they had this asset and they didn’t want to take delivery of it. It was just that simple. And we went to London and we met with them and we were able to buy it for back in those days it was a pretty insane amount of discounted price just based on the fact that we were ready to close right then and there, but we didn’t get permission from the factory to do it.
Jason Zilberbrand, VREF (14:28):
I think that that’s something that really gets complicated. So when you buy an airplane from somebody who has it and it’s tangible, there’s nobody there to protect you. There’s nobody there to look over your shoulder. There’s no consumer protection laws. But you know, the warranty, if it still is under warranty, is supported by the factory and they don’t care if it transfer was used, you still get that support. When you do a pre-delivered aircraft, the manufacturer is going nuts if you try and transfer it without their permission and think about it. You are conceivably giving, especially in those days, something that can be used for terrorism or an act of war and they want KYC, they want to know who the customer is.
Jason Zilberbrand, VREF (15:11):
So we buy the plane and we buy the paper contract and Bombardier had no idea that we even existed. They were still doing business with the construction company. That was my first real lesson. Don’t beg forgiveness. I went to them and I said, “Look, we own this thing now.” And they said, “Well, how do you plan on doing this? We didn’t give you permission.” They started making things very difficult. And that’s when I went to him and said, “Look, this is not what I want to do. I don’t want to just buy one. I want to buy 25 of them. I want to buy 30 of them, whatever I can get. I want to buy him and I want him stagger.” I set the deal on the table and they basically said, “Okay, we’ll do the deal.” What could have been a disaster was the beginning of a wonderful relationship. It lasted four years.
Jason Zilberbrand, VREF (16:00):
My dad and I bought a ton of paper aircraft and we flipped just about all of them within months of buying them because there were all these people that wanted them and they wanted to be able to make them their own. So that’s the other big difference. When you buy a pre-owned plane, there’s no pre-owned manufacturer. If it’s got a pink interior, you bought a pink interior. With a new airplane, you can do whatever you want to it, right. Nothing’s been done yet. And if you’re talking about $50 million business jets, and that is what we’re talking about on the low end, there were 28 to 29 million, on the high end there were 50 to 60. When you start dealing with numbers like that, the sky’s the limit. You want a $10 million interior, you can have it.
Jason Zilberbrand, VREF (16:43):
So what I did to protect the relationship with the factory, to protect the relationship with the clients, because these are all notables, these are either high net worth individuals or well-known corporations. We gave them a contract. We provided them the completion management services. So we sold them the plane, and then we babysat it until it delivered. We were in charge of doing the interior design work, optional equipment lists, basically everything that was needed to get that aircraft ready to deliver complete. And I think that that really kept me in a position where I had a lot of control. The factories were dealing with me directly. They weren’t dealing with a bunch of unknown people, and then my clients were dealing with me directly. So I had a lot of control over letting them down or failing. And I think that that’s a conceivably big issue.
Jason Zilberbrand, VREF (17:35):
So back in those days, I had three cell phones. I had one for Mexico, I had one for Europe. I never slept. But by the age of 33, I had made 40 or $50 million. I had broken all the records for how much aircraft were selling for to this day. I mean the most expensive airplane ever sold it that wasn’t a commercial VIP is the one that we did. It was cool. I mean, it was an amazing business model. And like all good things, they come to an end and that’s what happened. I mean, 2008 hit me. You talk about failures. It’s so difficult to explain this to people. I mean, we’re talking about $300 million worth of inventory that I had on my books the day the market crashed. And it was a crazy day. My first wife was in labor getting ready to deliver my first child. I had the Russian stock market closed due to this just substantial free fall. Lehman brothers just went bankrupt and went out of business.
Jason Zilberbrand, VREF (18:41):
The bank that floor plan me unbeknownst to the rest of the United States was moments away from filing bankruptcy. The federal government took them over at midnight that night and they became a new bank under a new charter backed by the government. And when that happened, they didn’t want to play ball anymore. And what I mean by that is all my notes got called instantaneously. I had $300 million with the notes called the next day. Yeah.
Tom DuFore, Big Sky Franchise Team (19:08):
Wow. Totally cow.
Jason Zilberbrand, VREF (19:11):
That was the worst day of my life. It was probably the worst year of my life. I mean, it was such a mishmash of emotions and so much going on and I’m young. I had no experience. I didn’t know how to deal with this. I mean, this was like… I’m looking at my dad going, “What the hell are we supposed to do?” And he goes, “Don’t worry. Things will work their way out.” He’s like, “This is temporary.” My dad has always the glass is half full type of guy and I quickly became the glass is half empty. I couldn’t sit there and just accept the fact that everything was going to be okay. I got really depressed. It was a really slow period for new businesses you can imagine. Nobody was calling. Nobody wanted to buy business aircraft. I’m sure you remember how bad it was back in those days.
Tom DuFore, Big Sky Franchise Team (19:56):
Oh yeah. I mean, I remember our clients I worked with, large, small, everywhere in between. Lines of credit were getting pulled. I mean, just exactly what happened. Notes were getting called in. Everyone’s losing their mind saying, “What is going on here?” How are we supposed to still do business in just literally snap of a finger. It changed overnight.
Jason Zilberbrand, VREF (20:22):
It did. I mean the entire environment, right? You couldn’t borrow. We couldn’t do anything with what we had. It had dropped 50 cents on the dollar within a week. I had aircraft that I had to make payments on that the bank didn’t want to support. The only way they were going to call the notes is if I kept coming up with enough cash to support those payments, those curtailment payments. And a curtailment payment is a little bit different than a mortgage payment or a normal credit facility. So when you’re highly leveraged with inventory like this, especially with asset based notes, that really the assets are worth nothing, a curtailment payment could be 10%, right? So I have to come up with these 10% payments of the overall note every 30 days. How long do you think I could do that?
Jason Zilberbrand, VREF (21:06):
I mean, it’s just one of those things. I mean, there was no backstop. Now the good news is that the stuff that hadn’t delivered yet. And the stuff that you know was down the pipeline, I did have a backstop. I negotiated liquidated damage clauses and all those contracts and I knew right from the jump, what my note was that I could walk away from and the whole thing would just go to hell in a hand basket and that was it. But I didn’t do that. I stayed in it. I did out with every one of the manufacturers and they were really fantastic. I mean, you can imagine what it’s like dealing with a company that everybody’s canceling these orders. I mean, I was just one of many. As crazy as that sounds, you went from a seven year backlog to zero. Across the board. Nobody knew any of this stuff.
Tom DuFore, Big Sky Franchise Team (21:53):
That’s incredible. That’s really incredible.
Jason Zilberbrand, VREF (21:55):
I don’t think it’ll ever happen again. You know, and then think about the fact that I’m dealing with all these emerging markets, all these, like it’s like dealing with a lottery winner. You got a farmer who’s now worth 100 million or a guy that’s sitting on a bunch of resources and his land. He doesn’t know what to do with that. They just spend, spend, spend, and a lot of the Russian high net worth individuals, they were just spending. And then you start getting the phone calls from them, “Hey, this plane that we bought, that’s not going to deliver for five years, we’re being told it’s worth 20 million less than what we paid for it. We need to come and have a talk.” What am I going to do about it? But I was getting these calls all the time. Like, “We got to come talk to you.” Well, what am I supposed to do?
Jason Zilberbrand, VREF (22:40):
I don’t control the market and I think that that was really a critical point in my life because I was getting the education that no money could buy. I’m 33 years old. I had made more money than I had ever dreamed of making. I had my own airplane. I had property all over the place. I was living a life that I think today, looking back, it’s easy, come easy go and I think that that’s a hard pill to swallow, but if you don’t work real hard for something, it’s kind of hard to hold onto it. You don’t respect it. I didn’t respect the money I was making.
Jason Zilberbrand, VREF (23:17):
I didn’t respect the fact that one day it might end. And I think that more importantly, the mentors I had, they did not know that this was ever going to happen, right? There was no rainy day mentality in any of our lifestyles. I hate to say it, but it’s a loosey goosey way of living, but brokers and people in that high net worth arena, we’re all like that. We have very similar mindsets and that if we have a big loss, tomorrow we’re going to make it back. I mean, I don’t know, one entrepreneur that doesn’t have that ability to just shut it off. “Okay, I took the hit, but I’ll make it back tomorrow.” Well, with this environment, there was no tomorrow.
Jason Zilberbrand, VREF (24:00):
I mean, I was waking up and it was Groundhog Day. Couldn’t find anybody, nobody wanted to do business. Nobody wanted to buy anything. Manufacturers, what was I going to buy? I didn’t know how to buy a pre-owned aircraft. So I forced myself to go through this painful business model transition, where we basically had to shut down all of the paper contracts and start buying pre-owned airplanes. I got to tell you, it’s not easy. It looks really easy. It looks easy to buy diamonds and flip them and make money. It looks easy to buy homes, refurbish them and flip them and make money. I will tell you the people that do that know what they’re doing, and they’ve had a lot of losses and it takes a long time before you’re an instant success or overnight success, right? I mean, isn’t that what everybody wants? It’s just it doesn’t work that way.
Jason Zilberbrand, VREF (24:52):
I’m buying these planes. I know it all, but I couldn’t figure out how to make any profit. I was basically sitting there waiting for the refurb to happen and the market environment was changing right out from underneath me. And that’s when I really, it wasn’t a light bulb, but I started doing a lot of appraisal work. I was doing it for myself, I was doing it for friends, the banks that I did, all those workouts with, they started calling and I had a phenomenal track record. I mean, that’s one of the really neat things about this. Even when the market started to drop, I was still calling the market. I think that’s being confident in your opinion and having the data to back it up is a pretty neat feeling. That was something that I think led me to continue to invest in going down that path and really focusing on appraisal work.
Jason Zilberbrand, VREF (25:38):
I mean, it’s interesting. There’s not a lot of people under the age of 60, that appraise aircraft full-time. There’s not a lot of people that have 30 years of experience even if they are in their 60s and here I am, I started when I was a kid, I was 21, right into business jets, right in the operational side. I’ve owned my own airplanes. I’ve been around in my whole life. It was just a happy accident. And so I’m buying and selling pre-owned airplanes and I’m appraising them and a friend of my dad’s called me and he said you know, “Have you ever thought about doing it full-time?” And I was like, “It’s so funny you say that I can’t stand buying and selling aircraft anymore.”
Jason Zilberbrand, VREF (26:19):
I just hit a wall. I hit the point in my life where I couldn’t leave this legacy to my kids. I don’t want to be a broker. Not that there’s anything wrong with it. And I’m not saying that it’s a negative connotation at all. Although in my industry, it is a little slippery from time to time. I just think I had so much more to offer this industry and I was backed into corner where I kept getting referred to as a broker. I’m like, “I’m not just a broker. I know what’s going on in this industry.” I talked to all the people that you need to talk to on a daily basis. I don’t know, I just felt like I was really not living up to my potential. And so I listened to Ken, Candace’s name called me and I said, “I’ll think about it and talk to my wife.”
Jason Zilberbrand, VREF (27:06):
I’m now in my second marriage and I have two wonderful children with my second wife. And I just said, “Look, there’s an opportunity.” Old Jason would have walked in and said, “This is what I’m going to do. Take it or leave it.” But knew Jason having been divorced and going through 2008, I did ask permission and I said, “Look this is a huge opportunity. He can teach me what I don’t know and I think this could be a really phenomenal living.” I’d actually like have a living, a career, instead of just being a broker, trying to go day by day-to-day to prospect. And she told me to do it. And that first year was a nightmare.
Jason Zilberbrand, VREF (27:46):
There was no makeup in there. I stuck to it and I think the end result is we had an opportunity to buy VREF and we bought it because I knew I was going to be able to apply all of this stuff, plus the appraisal work and really take this company that was just publishing books and just had online software as a service into a full comprehensive appraisal firm. And within three years, that’s what we did. We took it over the business. We tripled the net revenue in three years. We do 16,000 valuations a month through the software, and we do 2,000 comprehensive use pap compliant appraisals a year. So we’re by far the largest aircraft appraisal firm in the world.
Jason Zilberbrand, VREF (28:38):
And I think that that’s just the coolest thing in the world. I get to tell people what stuff is worth. I have no vested interest. I don’t care. For the first time ever, it’s like, I don’t have an attachment emotionally to equipment. It’s like the coolest thing ever. I get to just be my gear head. I’m like 13 again, just playing with planes and it’s cool.
Tom DuFore, Big Sky Franchise Team (28:57):
Yeah. Wow. I mean, talk about a roller coaster ride of just highs and lows and peaks and valleys, and just starting with your dad’s business then to the business that you started. I’m just curious how things went when… It’s always easier when you work for dad or mom, but then now you start this new company. How did the relationship fair through there? I’m just curious how things went when all of a sudden now it’s your business and dad’s helping out. How was that transition?
Jason Zilberbrand, VREF (29:35):
It’s interesting. I think the one thing that all father and son… If father and sons are go into business together are usually pretty close. And I would say more like best friends and father and son, and if you’ve experienced it, it’s really wild. I think, my dad and I started having this relationship when I was in high school. And he started looking at me as an equal. I think it when your father starts to look at you as an equal, it’s a crazy thing and then you start to talk back and you start to share your opinion. Sometimes things aren’t rosy. As I start to learn and gain an experience, my confidence started to gain and I started to question him and I started to battle his opinions, and sometimes those battles would occur in public. And sometimes those battles wouldn’t occur in front of investors or in front of banks.
Jason Zilberbrand, VREF (30:28):
I think being a young kid you don’t necessarily realize what you’re doing, but I think outside is probably saw that as very disrespectful. And I think there was a lot of that tug of war between my dad and I. My dad wanted to maintain the dominant position in the relationship and here I am growing up and honestly, I think I took his skill sets and I would hope that he would want me to do better in life than he did. I’d hope my kids have a better life than I did. But he would hang on to that competitive nature. I mean, even to this day. I mean, there isn’t anything we don’t compete. We play cards all the time together. We’re big backgammon players. So I mean, the competition is always very stiff.
Jason Zilberbrand, VREF (31:11):
I think when I was at the insurance company and it was his company, I never really, I thought that I had an opinion that was worth hearing. And so when he would come to me and ask my opinion for things, that was him saying, “I’m proud of you.” And that was him reinforcing that I was doing things to his approval. And when it was my company and I was asking him, I think things started to change a little bit. And I think that there was a definite period of time a year or two there where we were very combative. I think it was because we’re such control freaks. I mean, we really are identical people. I mean, when the poop hit the fan in ’08, he freaked out internally.
Jason Zilberbrand, VREF (32:02):
He did not let me see it, but I could tell that he was just not having a good time dealing with all this negativity. And he had just sold his business three weeks before it happened. He got a huge payout and honestly he didn’t have to stick around. He could have gone, retired, never heard from him again, he had plenty of money. My dad would have been bored out of his mind. He is a serial entrepreneur. And so there was two years where we fought a lot back and forth during that ’08 to 2010, 2011 timeframe. It taught me that family relationship is something that I never had with him. I wanted a father and I think it took us years to get to that point. But now finally, where I’m at today in VREF, he’s like he’s a sounding board. My dad’s in his mid 70s. He’s been there, he’s done that.
Jason Zilberbrand, VREF (32:55):
He’s here to really see things from a different perspective, even if it’s a perspective that’s so far from where we’re taking the company. I still want to hear what he has to say. And he’s gotten to the point where he’s like a legend now in our industry, right? So he can pick up the phone and call anybody. Anybody will take his call and I think it’s cool. My dad is a very well-known guy in business aviation and because of him, doors are much easier for me to get through and I’m very respectful of that. And at the same time, I think it’s neat when your dad’s your best friend. I mean, I was like his little right-hand man. I used to go and collect money with him at the parking garages. I mean, he just always would teach by example and he’s got the greatest work ethic in the world. And I think that that’s the one thing that I try and live up to is his work ethic.
Tom DuFore, Big Sky Franchise Team (33:43):
Wow. Amazing. Well, I’m glad that obviously in any crisis it’s hard to imagine a relationship of any kind that’s not strained at a crisis point in some way, shape or form. So I’m happy how things are going and convenient for two, hopefully dad’s either on a board of advisors or directors or something or an unofficial board.
Jason Zilberbrand, VREF (34:08):
We keep them busy. I think I always know when he’s bored, I get the phone call from my mom. Yeah. He’s driving me nuts, but that’s the nice thing, right?
Tom DuFore, Big Sky Franchise Team (34:18):
Yeah. Well, for some closure, I’m just curious when you transitioned into, you talked about transitioning to the broker and then into VREF and going that direction. What happened with the company when you were selling the planes and these vehicles. What happened there?
Jason Zilberbrand, VREF (34:39):
The jet collection was the name of our dealership and my dad and I just decided it was 2013 and I think we both had had enough. We had enough of each other. We had enough losses trying to buy pre-owned aircraft and I shouldn’t say losses. We were breaking even on them, we’d make a little, but it wasn’t enough where we would be able to sustain our overhead. And I think that’s another really important lesson I learned. Don’t create a lot of financial liability because you don’t know when the siphon’s going to get turned off. We had a huge overhead. We both had personal assistants. We had a huge office space. I mean, we had 6,000 square feet and it was just four people in Chicago.
Jason Zilberbrand, VREF (35:19):
And I think it was ridiculous and then all the other personal stuff and all the other overhead I had, it was putting a real drain on him and I. And the way I would walk into the office, which I think is probably how a lot of other entrepreneurs are. I know what my overhead budget is, and I know how many deals I have to close to cover that. And then I know that what’s left over is how I pay my bills. And so I was killing myself to cover the overhead of the business. And I just said, “I’m not doing it anymore. I can’t kill myself.” Well, how many years was it? Eight years ago? So I was 39 years old. I said, I’m just not going to spend the next 10 years of my life, trying to make up for a market and economy that I can’t get back. I can’t live in the past anymore. I just can’t do it.
Jason Zilberbrand, VREF (36:04):
I think that that’s another really important realization living in the past is just a dangerous thing. You go down that rabbit hole, the depression sets, and I was depressed all the time. I mean, it was just a really awful… You just want to get back to where you were, you start trying to point the finger, but how can I point blame when the whole market comes unravel? I mean, and that’s the situation is what made it so that I could live through last year and know that everything’s going to be okay. I got to tell you, COVID everyone was freaking out.
Jason Zilberbrand, VREF (36:33):
It was like business aviation all over again, 2008. People were really freaking out and we had our best year ever because I stuck to my guns and I kept my head down and I didn’t come unraveled. I just put the work in every day. I think that that’s amazing. People ask me what my competitors are doing. My answer’s, “I have no idea. I’m too busy.” I changed a lot of things back in those days. 2013 was a big transition year. My dad and I separated, I decided to start buying and selling aircraft for a Russian brokerage firm. They wanted me to be the US conduit to help them liquidate aircraft. And I did it, and I thought it was a really neat experience. I got to deal with some really big publicly traded Russian companies and help them move assets out of Russia and then register them in the United States and then resell them.
Jason Zilberbrand, VREF (37:22):
I did it for years and end of 2016, 2017, I just couldn’t do it anymore. I couldn’t deal with the time change. I couldn’t deal with the antics, the politics. The US and Russia were not in good terms and my life was basically up to whatever president or whatever politician was going to make remarks for that day. I just found myself so involved in politics, which is not me, that I was just miserable. I was miserable all over again. It’s like okay, I can earn a living doing this, but are these the people I want to work with? Again, is this is the legacy I want to leave for my kids? And I was actually embarrassed. People would ask me who I was working for or what I was doing, and I would tell them, and I just could tell that they don’t like it. They didn’t approve. They didn’t approve I was helping Russian companies liquidate aircraft.
Jason Zilberbrand, VREF (38:10):
I mean, these weren’t oil companies. These were normal… They were just in Russia. I mean, I went there. It’s not a scary place. They’re actually some of the nicest people in the world. But I mean, it just got to a point where it’s like, “Okay, I don’t really want to keep doing this and and I don’t know.” I mean, it was just like a real happy accident. I think had I closed one of the huge deals like I had done in 2004/’05, I wouldn’t be with VREF. I would still be buying and selling aircraft because it is like fishing. It is that big wind mentality and you know, gamblers. I mean, you put everything on the line, right? One big win you’re right back the next day because we’re addicts.
Jason Zilberbrand, VREF (38:58):
I don’t know. I took everything. I took all of that negativity and I said, “I can actually start investing in myself. I can actually start growing my career the hard way, putting in the work, spending every night, doing SEO and rebuilding this business.” And basically I had a 25-year-old company that had never done any marketing, had never had any online exposure. It was just basically word of mouth how VREF was growing. So I’m like, “Well, I can throw all my skill sets at this.” I mean, this was like the coolest thing ever. I was dealing with a blank slate with a 25-year-old legacy. How I could screw it up was not knowing anything about the industry.
Jason Zilberbrand, VREF (39:38):
So the people that had bought the business along with me, trusted me to do it and long nights and early mornings, but it paid off. Appraising aircraft, right? You go back to your first question. I mean, how do you get to being an appraiser? 30 years in an industry and you learn a lot about a bunch of airplanes and people call you and they don’t know where to get the answers. And that could be a lawyer, could be a bank. I mean, I do pretty complex appraisal projects now. So I do a lot of estate work, I do a lot of famous estates, a lot of deaths, I do the FAA’s aircraft. I do a lot of publicly traded companies aircraft, but I have a huge responsibility to manufacturers in the industry.
Jason Zilberbrand, VREF (40:22):
I mean, our numbers, our software is used by over half a million people. With that comes a great amount of trust and transparency. I rely on my data and everybody else relies on my data and it’s neat. I mean, we’re really the first crowd sourced software program, if you think about it, because we rely so heavily on others to share their closings and to tell us what they’re seeing. So I’m intimate now with all the banks. And it’s funny, though the people that ran the bank that went under back in ’08, I actually ran into them a couple of years ago, and I was with VREF and we had this really deer in headlight moment where we were all standing together and there was nobody else around.
Jason Zilberbrand, VREF (41:08):
I just basically threw it out there. I was like, “Can we say that that was the worst thing that ever happened?” And everybody just started to laugh and one of the guys looked at me and he said, “I got to tell you, I was so impressed with how you guys handled this. It could have been a real nightmare. Like you are a pleasure to deal with, and I’m sorry, you never called you. And I know things got heated.” I’m like, “It was $300 million.” I’m like, “Anybody’s going to get heated over $300 million.” And that’s when I realized it personal, it was business and the names change on the the company, but the people they stay the same. And in a small industry you just, you don’t burn bridges. We have a really small industry. There’s 80 guys that do what I do. I mean, that’s it. It’s wild.
Tom DuFore, Big Sky Franchise Team (41:51):
Wow. Amazing. And thank you for sharing the level of detail. I love your story and what you shared, and this is great time. You’ve talked about several of these, I like going through the formula for the show and ask about a miss or two that came along. I mean, you’ve shared some things here and in lessons you’ve learned from it, but I’d love to hear if there’s anything else that you’d like to talk about there.
Jason Zilberbrand, VREF (42:19):
I missed a lot I think that there were a lot of times when I could have zigged and zagged. I think you got to stick to what you know, and it’s a tough lesson to learn, but I was approached many years ago to invest in a bar and in a restaurant. I did that, and that was an utter failure. I knew nothing about the business. I couldn’t step in and fix things. I didn’t know where the pitfalls were. I didn’t know where the obstacles were. And I think easy come easy, go, right? And like I said, if you don’t work real hard for it, it’s easy to put it on the line and gamble it. That’s how I was treating my capital throughout my 30s. It was like being at a casino.
Jason Zilberbrand, VREF (42:59):
And so today what I’ve learned from my misses is that capital and capital is so critical. I mean, you need to establish, you got to have a war chest. You’ve got to have enough money to make it through a downturn, right? Anybody that’s experienced the last 12 months knows. I mean, you don’t have six months, nine months of reserves. I don’t know how you’re going to survive. I learned to live under my means. I will tell you the number one miss that I have made in my life was spending money before I got it, creating debt. I don’t create debt. I live debt free. I don’t have a credit card with a balance on it. If I can’t write a check for it, I don’t buy it and I don’t care how much it is. I will not generate debt.
Jason Zilberbrand, VREF (43:43):
I’m not going to pay 20% usury interest rates to a credit card for the pleasure of putting my groceries on a piece of plastic. And back in the early 2000s, I probably carried a 40 to $50,000 debt on my credit cards. I used to be so afraid of the Amex guy, right? I think we’ve all been in that position, but when they don’t give you a credit limit, like my Platinum Card back, there was no limit. If I wanted to go buy a $200,000 car, they weren’t going to call me and tell me not to. They just wanted to make sure that they got paid at the end of the month. And I think it’s really easy to spend and not keep track because the money’s always coming in, but the money stopped and my overhead was through the roof. I mean, I had three cars and two golf clubs, and then the business jet. I mean, what a disaster… talk about a miss.
Tom DuFore, Big Sky Franchise Team (44:33):
Yeah. Well, and I can imagine too, that when you’re in those scenarios, doing what you’re doing with the clients you’re working with, I mean, these are the rich and famous that you’re dealing with. And like you said, they’re living a lifestyle, you’re in and around them and it’s like, well, you’re hanging out with these folks, guess what? Now, all of a sudden you’re spending all the money and buying whatever cars, watches, jewelry, whatever fancy thing is popular at the time, whatever it is. It doesn’t matter.
Jason Zilberbrand, VREF (45:05):
No, you’re right. I mean, it’s so funny because, I don’t know, my dad set me aside one day when I was young and he said, “You don’t want to go into a business meeting and have a nicer briefcase and a nicer… well, we used to carry briefcases back in the day. Kids today have no idea what that is, but you don’t want to have a nicer briefcase or a nicer watch than the guy you’re going to sit down with. I don’t know, I just learned some really valuable lessons about not trying to show up my client base, but I was dealing with, for the most part of my early careers doing the maintenance guys. So I’d leave the BMW at home and I’d go rent a rental car. So I showed up in something that was very understated and I just didn’t want to be a bragger.
Jason Zilberbrand, VREF (45:43):
I didn’t think that that was the right environment. When you’re selling the plane, if you don’t have the Rolex or the AP or whatever it is, right? If you don’t have a $5,000 suit on, they do not respect what you have to say. You’re never going to be an equal to somebody that’s got that net worth, but they’re just not going to do business with a P on. So you’re now all of a sudden, and it’s no different. I don’t care what you do for a living. I bet you spend 20 to 25% of your paycheck supporting your job. It was the same thing. I had to buy this stuff to fit in, the golf clubs, what a stupid waste of money. I mean, I love golf just as much as the other guy, but to drop that money so that I can be next to somebody and have the opportunity. But that’s what it was all about. How do you meet somebody who can a jet?
Tom DuFore, Big Sky Franchise Team (46:35):
Yeah. Well, thank you for sharing that. Let’s talk about make. You’ve shared some already, but is there another one or one you’d like to reemphasize?
Jason Zilberbrand, VREF (46:47):
I don’t know. I think the makes are interesting because some of them are very temporary and some of them I think are very… they stir up a lot of emotion and I think the one make that I think was probably, I don’t know, one of my best was just the ability to witness that I can invest in myself and I can make myself better and more appealing to clients. I think that there’s a lot of people out there that just don’t know what to do. I mean, do they go and get an MBA or? For me, that wasn’t going to generate more money. So what I really had to do is just build my skill sets. And so going through accreditation programs. That was a phenomenal, continuing education before COVID, you were in person sitting with people, networking.
Jason Zilberbrand, VREF (47:33):
For what I do, it’s really hard for me to be around a bunch of lawyers or a bunch of finance people. So, I guess, just investing in myself and not being afraid to tell people that that’s what it is. I mean, I think that there’s nothing wrong with investing in your career and spending the time and the money on you. I mean, marketing and all this stuff we’ve got to spend money on. So I guess that was a big one. I don’t know, maybe with VREF, just being able to witness the fact that there was a real void in the market and nobody really was looking at the appraisal business and nobody really wanted to be in the data business and that was something that I always wanted to be in. I like when my money makes money and I like when it makes money and I don’t have to put a lot of effort into it. I think VREF is a business because of the software that I can put a bunch of effort into it, get that engine going and then sit back and the money comes in while I’m sleeping.
Jason Zilberbrand, VREF (48:32):
I mean, that’s always been my dream. This is the first time where I’ve had a service business. I haven’t had to rely on my own labor or my own contexts. And as much as I sold and bought in my years, I think I’m a terrible prospector. I hate cold calling. I hate it. I used to get yelled at all the time when I was young. You don’t make enough cold calls. I couldn’t stand getting hung up on. I hated the rejection. I still do, but I think that that’s just something like public speaking, the more you do it, the better you become at it.
Tom DuFore, Big Sky Franchise Team (49:03):
Yeah. Yeah. No, that’s great. Thank you. What about a multiplier? The show’s Multiply Your Success. Is there anything that helped as you have gone through all of these different really businesses and career paths you’ve gone down?
Jason Zilberbrand, VREF (49:16):
Yeah. Mentoring, I think mentoring is the multiplier for me. It’s something that people don’t really get. Young kids don’t even know what that word means. I think they confuse it with a father or a parental figure or someone that they might think they have a relationship with, like Elon Musk tweets all the time, as opposed to somebody that you know for your entire life and watched you grow up. But for me, having someone mentor me, having someone not being a relative who was looking out for my wellbeing, because they took a vested interest in me and someone that I could call and ask and get the truth. And that’s what it’s all about. It’s the truth. I don’t expect my parents to ever tell me what I need to hear. They tell me what I want to hear.
Jason Zilberbrand, VREF (49:59):
So if that happens enough, oh, it’s amazing. All the people that are close to you, you probably realize most of them tell you what you want to hear. They don’t want to be in a position where it’s confrontational, but a mentor they’ll tell you when you’re screwing up and they’re going to tell you when you’re being a jerk and they’re going to tell you when you missed an opportunity and how you can learn from it. And so I think one of the things that I try and do today is give back. Be a mentor if somebody will take me up on it. It’s difficult. You don’t want to put yourself in that position if no one is going to take it. But every once in a while, that relationship will appear and I think it’s really cool if you have the time, teach somebody.
Tom DuFore, Big Sky Franchise Team (50:43):
Well, the final question we like to ask everyone, Jason is what does success mean to you?
Jason Zilberbrand, VREF (50:49):
Success to me? Gosh, that’s such a great question. So success, I think, is about being able to have a really natural balance, right? You work hard, you play hard and I think success allows you to have that play hard. Without the success, I think you wind up working really hard and sometimes maybe spinning your wheels. But to me, you’ve got family and health and all of these things and, success allows you to be able to, I think, focus more on those things too. So it’s not necessarily monetary. I think it can be emotional. It can be, whatever type of person you are. But for me, it’s the ability to spend more time with my family and for me to have a more balanced life.
Tom DuFore, Big Sky Franchise Team (51:32):
Fantastic. Well, thank you for sharing that. And as we close out the interview, I’d like to ask, is there anything that you were hoping to share or get across that maybe you haven’t had a chance to say?
Jason Zilberbrand, VREF (51:44):
Oh, no, people are probably sick of hearing me talk at this point, but I don’t know. I think it’s really important to witness your failures and not beat yourself up and take it for what it is. It’s easier said than done. I think I still fight with that every day, but one of the things that I think people need to do is not be so hard on themselves. It’s so easy to beat yourself up after you make a mistake and I think you just got to chalk it up for what it is. It’s a learning experience. And without them, the success isn’t quite as fun and as someone said it once, the sweet isn’t as sweet without the bitter or something like that. And I think there’s a lot of truth to that.
Jason Zilberbrand, VREF (52:21):
That’s something that I think is really important. You got to fail. Even Coca-Cola, right? I mean, think of all these amazing companies that have hit home runs, grand slam after grand slam and they make this big blunder and almost puts them out of business and they survive. I’m still here. I’m still kicking. I think anybody can make it. If I can survive the financial losses of ’08, I mean, I don’t really think there’s a whole lot that that can be done to me at this point.
Tom DuFore, Big Sky Franchise Team (52:48):
Jason, thank you so much again for being here. What an incredible journey and a story you shared with us. Thank you. And let’s go ahead and jump into today’s three key takeaways. So the first key takeaway is when Jason talked about when he was building and growing his company, he didn’t respect what he had at the time. He didn’t respect his money, his revenue, his expenses, his business, he wasn’t respecting it in the way that he felt he should have.
Tom DuFore, Big Sky Franchise Team (53:19):
Number two, he talked about sticking to what and he gave a few examples about investing in restaurants and other businesses, but really staying in your lane. I know we hear that often, but it’s really easy to get diverted. It happens to me. I know, I’m sure it happens to most leaders of organizations, but keeping that focus is so critical. And the third key takeaway is when Jason talks about investing in himself. He talked about it in a few ways, how he did that. Number one was through networking. Number two was through certification programs, and the third one was other types of training programs, maybe industry association training programs or certifications or whatever it might be. I thought those were really great. And now it’s time for today’s win-win.
Tom DuFore, Big Sky Franchise Team (54:12):
So today’s win-win really orients around Jason’s transformation from what happened in 2008, when the market crashed, everything crashed and his business went from literally flying high all the way down to just an absolute crash. And I think why it’s a win is because he then talked about 2020 when the pandemic happened and that was his best year ever. So from his worst year in the last big financial economic mess to the most recent financial economic mess from the pandemic and having his best year ever and the difference in those two is that he really focused on learning from his mistakes and taking heed in what he had learned. So I thought that was just an absolutely phenomenal lesson.
Tom DuFore, Big Sky Franchise Team (55:05):
So Jason, thank you again so much for being here. And that’s the episode today folks. Please make sure to give us a review and subscribe to the podcast and remember if you or anyone, might be ready to franchise your business or take it to the next level, please contact us at bigskyfranchiseteam.com. Thanks for tuning in, and we look forward to having you back next week.
