Meet The Disruptors: Scott Yahraus On The Five Things You Need To Shake Up Your Industry
I’m not sure that I can get it down to five words. My father was a big driver in my life. He was self-made and from a broken home. He was living in his truck at the age of 17 and really had to make his own way. I always had a lot of respect for him and, like most young men who look up to their father, I held on to every one of his words. He told me on more than one occasion to always remember that there will always be someone out there who is tougher than me, smarter than me, faster than me, and stronger than me. What he was instilling was that it was smart to be humble and to always keep my guard up and pay attention.
As a part of our series about business leaders who are shaking things up in their industry, I had the pleasure of interviewing Scott Yahraus.
Scott Yahraus is Founder and CEO of Scott Yahraus & Associates, a company that guides and supports trustees, conservators and business owners on assignments involving distressed or troubles businesses and/or real estate. Scott has a deep and varied background in real estate, receiverships and business turnarounds. He is a wise choice for a troubled business or family or divorcing partners to bring their case to resolution.
Thank you so much for doing this with us! Before we dig in, our readers would like to get to know you a bit more. Can you tell us a bit about your “backstory”? What led you to this particular career path?
My job is incredibly unique. You can’t quite study for it in college, although understanding numbers is a good place to start. I received my undergraduate degree in business economics. I went on to graduate school studying the same. When I was 23, my father suddenly passed away. At that point, I began in real estate where my father left off. He was a real estate developer and a successful one at that. I played that game but became more fascinated in growing businesses. Simultaneously I was working in real estate and had begun my own small business. I sold that business a few years later for a 5x multiple. Having a deep knowledge of commercial real estate and growing a business proved to be unique and valuable for where I am at today. I would go on to become a court receiver and referee. In that role, I manage real estate and businesses through court appointment. These cases are the bloodiest of the bloodiest — typically, partnership disputes where the parties are at each other’s throats. I am brought in to assume all of the responsibilities of the real estate or business. I typically sell the asset and divorce the business partners, but there are times where the case will go to trial, or the parties will settle their litigation. I have been involved in dozens of cases in dozens of industries. Over the past 8 years, I have managed 120 cases across California, Nevada and Arizona.
Can you tell our readers what it is about the work you’re doing that’s disruptive? Due to all of my experience running and managing businesses, I am a great resource for trustees, conservators of an estate, or business owners that aren’t doing well.
For trustees and conservators, those individuals are used to administering assets after a person dies. But they are often lost when it comes to commercial real estate being a part of the family estate or navigating through a business. I am able to come in at a high level and be a resource for a trustee or conservator. I make their jobs easier and defer risk away from them and onto me. For example, I currently have a case with a large business with 110 employees and two buildings spanning 78,000 sq. ft. I brought in the right real estate team to sell the industrial real estate and I was able to get the business sold as well. The real estate has environmental contamination issues. I am managing through all of that, as the lender for the buyer is hesitant to lend. We are keeping the business afloat because I was able to restructure the debt. if I was not involved in this case, the business would be shut down and the real estate would be sold to an opportunistic purchaser who buys distressed real estate. I am able to resolve these complicated issues that most trustees, guardians, or business owners cannot.
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lesson you learned from that?
It is funny to me now to look back at my younger self and think that I knew a lot. My ego was much bigger back then and it didn’t serve me well. Hindsight is always 20/20. When I disagree with someone on a topic, I like to play a game called “change my mind.” This gives the person with whom I am debating the chance to articulate exactly what they want to say and lets them know that I will listen to them completely. It works for both sides. I cannot say that I am always convinced of the other’s argumentation, but it allows me to learn from someone else with the temperature being lowered.
We all need a little help along the journey. Who have been some of your mentors? Can you share a story about how they made an impact?
When I began doing receivership work, I knew very little about receiverships. I knew real estate and I knew how to run a business. But I didn’t know how to navigate the tense waters of litigation and fighting partners. Kevin Singer is the ultimate receiver. He is a mentor and friend, and I am blessed to be able to work with him every day. He has taught me not only how to be a good receiver, but what makes a bad receiver. We do not always agree on strategy in our cases which is okay, but we know that defining our options in a case is crucial. I have taken these attributes and applied them when working with trustees, guardians, or business professionals.
In today’s parlance, being disruptive is usually a positive adjective. But is disrupting always good? When do we say the converse, that a system or structure has ‘withstood the test of time’? Can you articulate to our readers when disrupting an industry is positive, and when disrupting an industry is ‘not so positive’? Can you share some examples of what you mean?
If you do not add value, then your efforts, time, money, and opportunity costs are wasted. Disrupting a business practice or industry isn’t a bad thing. It means you are changing something about the game that everyone else is playing and adding value. Typically, that game change is adopted. PayPal disrupted payments on the internet and made the entire ecommerce experience evolve and become better. Wework came in and disrupted how office space was rented. Their business model wasn’t likely to work because they never controlled the underlying real estate. They were just subletting the space that they leased. Many folks lost their investment in Wework. Disruptors can cut both ways, but those who add value will survive the long term.
Can you share five of the best words of advice you’ve gotten along your journey? Please give a story or example for each.
I’m not sure that I can get it down to five words. My father was a big driver in my life. He was self-made and from a broken home. He was living in his truck at the age of 17 and really had to make his own way. I always had a lot of respect for him and, like most young men who look up to their father, I held on to every one of his words. He told me on more than one occasion to always remember that there will always be someone out there who is tougher than me, smarter than me, faster than me, and stronger than me. What he was instilling was that it was smart to be humble and to always keep my guard up and pay attention.
We are sure you aren’t done. How are you going to shake things up next?
It’s hard to say. Being a father of four, it appears to me that I’ll have to work for the majority of the rest of my life, which is fine because what would I do in retirement? Knowing that I will be likely working for many more years to come, there is no doubt in my mind that the future is wide open.
Do you have a book, podcast, or talk that’s had a deep impact on your thinking? Can you share a story with us? Can you explain why it was so resonant with you?
Recently, I’ve been listing the Megyn Kelly podcast on a regular basis. I really enjoy politics and she often has political commentators on her show breaking down topics in real time. I read the wall street journal everyday — not the online version, but the physical paper which is delivered each morning. The editorial section of that paper is second to none. I find that holding and reading the paper allows for a richer experience and limits distractions.
Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?
I’m not particularly religious, but one quote that has stuck with me is “even when no one is watching, God is watching.” This allows me to always have my moral compass pointing in the right direction. This is important when there are so many inputs coming my way on a daily basis, which isn’t unique to me.
You are a person of great influence. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be?
America really lacks political leadership right now and has for some time. I have a strong desire to lead politically. My foundation is reasonableness. We are so polarized right now because viewpoints are vastly divergent, and they really don’t need to be. It feels like identifying with any political party requires you to march the party line no matter what that entails. In reality, most of us see a lot of gray in political issues. I think that it would be incredibly refreshing to hear a politician rail against their own party for the betterment of the citizenry when they know a policy position by their party is ridiculous.
How can our readers follow you online?
INSTAGRAM: SCOTT_YAHRAUS
LinkedIn: Scott Yahraus | LinkedIn
This was very inspiring. Thank you so much for joining us!
