Marcus Walks Away Again

Well, this was another episode where our hero Marcus couldn't get past the People component of his three-step fix-her-up methodology to work on Products and Process. However, it still offers up a valuable business and life lesson which I will get to shortly. But first I want to say that the episode brought back some memories for me. Back in the 1980s, right after completing my degree I moved into a third-floor apartment in an old four-story mansion that had been built in the Roaring 20s for railroad executives. The mansion was situated in the most exclusive neighborhood in the city so that in addition to being a fabulous place to live, it also offered tenants a prestige address.

People, Product, and Process

People, Product, and Process

Now not all was perfect with the place. It was rather run down with the residents affectionately calling it "Faulty Towers." Despite this, what made the place a great home was the people. We always had an interesting collection of graduate students and professionals, including a reporter for a national TV broadcasting network who was made famous by his reporting on the Tiananmen Square protests, and assorted eccentrics all living and socializing under one roof. If you wanted company there was always someone to talk to. If you needed some alone-time all you had to do was shut your door. I couldn't imagine a more interesting place to spend a few years if you were single.

Sounds great, doesn't it? Yes it was except for one huge problem. The owner of the building, who resided in the guest house at the back of the property with his three feral children, was continuously at war with all of his tenants. All that anyone had to do to trigger such a war was to mention that their apartment had something requiring repairs. Since all of the appliances were ancient they were practically expiring monthly. I recall one tenant simply buying a new refrigerator and not notifying the landlord because he didn't want the aggravation of dealing with him.

However, things could also get quite bizarre in other ways. One time the landlord let himself into a tenant's apartment while the latter was away for a week visiting family and unplugged the fridge "to save on electricity." I am not making this up. It was like living in a sit-com in many ways. The tenant returned to discover that hundreds of dollars worth of steaks had spoiled. I could go on with horror stories about the landlord but let's just say that he was constantly being ordered to appear before the body that handled landlord-tenant disputes in the city.

The final point I want to make in this story is that there was no reasoning with this man. Many of us had tried. If you attempted to explain to him in the most tactful, sensitive, and diplomatic way that it was unacceptable for him drag his heels for months on repairing dead stoves, broken windows, or leaky roofs, he would fly into a paranoid rage about how all of his tenants were out to take advantage of him and snatch food from the mouths of his children. There was simply no hope of ever having him see the world through anything but his own paranoid eyes. He could not grasp how much his tenants actually loved Faulty Towers, despite all its defects, and how they were often choosing to fix the smaller problems with their own money because he was so difficult to deal with.

All of this finally brings me to the business and life lesson promised at the top:

When it comes to people, what you see is what you get.

I had to learn this one the hard way in my romantic relationships early on. You simply can't change people. You can't save them from themselves. What you see is what you get. Accepting this truth in the business sphere was a snap in comparison to accepting it in my personal relationships. I was about 30 before it finally sank in.

The owner of LA Dogworks, Andrew Rosenthal, reminds me so much of my former landlord. Neither can be reasoned with, or so it appears, because both are convinced that the the world is out to get them and that no one can be trusted. This mindset quickly creates a toxic environment. Even when Rosenthal finally broke down in tears after realizing how badly he was abusing his employees, I knew it was just a momentary glimpse into reality that would quickly vanish and be erased from his memory.

And it was.

Watching him scream, shout, and hurl abuse at his employees was downright painful. Anyone who behaves that way is out of control and deserves no respect. Here's hoping that his employees have all found better jobs by now.

The Growth Strategy for LA Dogworks

It's too bad that Marcus didn't have the opportunity to lay out his grand growth strategy for the business. Operating at just 27% of capacity LA Dogworks is obviously a business at no where near its potential. Marcus's plan would have involved working out all the bugs at the original location and then rolling out the concept regionally and nationally. As usual, Marcus also saw the potential for a branded line of products.

Sadly, the owner was an insurmountable obstacle.

The LA Dogworks concept is an interesting one with potential in that it appeals to all dog-owners who occasionally have to travel. It's also an easily replicable one as most of its secrets are exposed in the episode.

Something I have noticed over the decades is that if you simply insert the letters "NY" or "LA" in front of a business name, the business automatically becomes perceived as cool, trendy, and sexy outside those cities. Think about it: LA Cat Corral, NY Donair, LA Wafflery, NY Barbers, LA Dog Walkers, NY Chimney Sweeps, etc. It works like magic.

So far Marcus has had two wins, Car Cash and Eco-Me, and three walk-aways, Maarse Florists, Planet Popcorn, and LA Dogworks, which is on par for anyone doing what Marcus does for a living.

One rule that I stuck to while working as a business broker was that if the business owner came across like someone who was going to be difficult to work with, I passed on taking the listing. The good thing is that these types are easy to spot if you don't filter out the warning signs.

la dogworks

Oh look, here comes yet another explosion.

Click the image to watch the show online. CNBC doesn't allow embedding.

Find out how Marcus builds his empire.

13 Responses to The Profit: Marcus and LA Dogworks

  • Andrew is a first class jerk. I would have punched his lights out.

    • I can only imagine how lonely his personal life is? Most people learn people skills in kindergarden. He will continuer to make the same mistakes over and over because he cannot admit he is part of the problem My opinion

  • I agree with your observations, assessment, and conclusion of LADogWorks owner and another walk-away by Marcus. No doubt, even on the walk-aways that Marcus leaves the business much better than when he arrived.

    Unreasonable people are out there. The challenge is to avoid them, whenever, and however possible. I have been blessed to have only had business with two in my lifetime and would rather never have business with another one again the rest of my life.

    Rumors are that the recent ratings for The Profit are down and trending down. Concerns are they may not continue. What is the word you have heard on the continuation of the show, how many more has Marcus taped, etc.?

    Thank you for your blog.

    • I disagree that Marcus leaves the businesses he walks away from in a better shape. If there had been no cameras, then yes. But as it is, everyone in the country now knows how bad they are. That gives them little chance to make it. As a customer, I would never deal with these businesses.

      I also disagree that the business should run at 100% capacity. The play area was already cramped as it was. Without expanding the area, even the number of dogs that we saw in there was too high.

      • You are correctomundo about capacity. If it were operating at even 66% the dogs would be fighting in the play area or at least very stressed out. I don’t know if the idea is with a full house to only allow a few dogs at a time into the play area.

      • I would have bought Andrew out and fired him. You can’t teach an old dog new tricks.

  • That guy is a clinical psychopath. He was at least unwilling and probably unable to see others as actual human beings with their own points of view.

    Too bad. The biz concept seemed a good one.

    I, too, hope the employees have found better gigs.

  • The concept can be copied quite readily since there’s no IP. You just need to lease an old garage and have the budget for leasehold improvements. Then break it up into a retail area, a playground, sleeping quarters, and offices. Call it something like LA Doggie Motel and go for the upscale market.

  • Mental illness and business do not mix well. This man does not know he is doing wrong

  • I’m just now catching up episodes of “The Profit”, so I’m writing this long after you posted the article.

    Was Eco-Me really a “win”? Marcus said repeatedly that the sales person was the big problem, but in the end, she was still there. And the owner ignored her “You’re in charge for a week” pledge by changing the product packaging.

    Despite saying that he would turn it into a $10M business, the last sales figure he gave was that business had increased by 50%. A 50% increase on $500K sales is great, but it’s nowhere near $10M. Sound like he gave them a nice new packaging machine, but nothing else really changed.

    I think the show is really fascinating. Looking forward to the new season.

    I wonder if he’s heard of a business called “Amy’s Baking Company”.

  • I truly enjoy your shows. Look forward to each and everyone of them.

  • Have just recently found The Profit, and I love it. Can’t wait to watch them. The man on L.A. Dog Works was terrible. I can’t believe he couldn’t see how he was treating people so badly. There is no way I could have worked for him. Enjoy the show though.

  • I once managed a large Graphic Arts supply business. My largest customer treated his employees, my employees and me exactly like this. After my first meeting with him, I avoided him never offered him the help that I was able to deliver.
    Looking back, the anxiety he created and the unnecessary problems he generated, distracted me from pursuing other profitable and pleasant business with others.
    These men have deep seated psychological and socialogical issues.

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