good morning, everyone. coming up on msnbc's "your business," how you acquire another company and successfully assimilate them into your culture. the company of dog rover who acquired their biggest competitor tell you how they dealt with those challenges. and how the owners of cafes catered to our four-legged friends and how they dealt with government regulations. plus, what you need to know to evaluate if you're a good leader. that is all coming up next on "your business." >> "your business" is sponsored by american express open. helping you get business done.

hi there, everyone. i'm jj ramberg. and welcome to "your business," the show dedicated to helping your growing business. a couple years ago we went to santa monica, california, to meet the founder of dog vaca. an online service to match dog owners with pet sitters. the last year, everything changed for this company when their biggest competitor acquired it in all stock deal. we decided to find out what it takes to merge develop different cultures, two different teams and two different platforms in a way that makes sense for both the company and the customers. it was just another regular work day at the santa monica headquarters of pet sitter booking company dog vaca, that is until it wasn't. >> that morning our ceo called an all-hands meeting and brought the whole company in, sat us down and said, we're being

acquired by rover, which was kind of a shock for us. >> it was a shock for the employees, but not for the executive team. they had been working on this for years. aaron easterly, the ceo of seattle-based rover, dog vaca's biggest competitor, had always considered the possibility of merging the two companies. >> i had reached out to aaron in the early days of the company and said, hey, does it make sense to put this together early? i think at the time, there wasn't a lot of interest, but we continued that conversation for five years straight. >> and they met with other ceos to understand what it really takes to bring two companies together. >> talked to people at odesk and seamless, there's a number of deals that consolidated and we talked to leaders in depth. and generally, the advice was, whatever the plan is going to be, it's going to be debatable. so you have to accept the fact that there is going to be

imperfection, but at least there's clarity. don't waiver and move very well. >> in march of 2017, after years of conversations, rover acquired dogvacay in the all-stock deal. >> anyone can go to the white board and say, look at the value created with this deal, but most of the value comes from the tough choices that happen post-close in the ability to execute well as a combined team. >> the first order of business was getting both teams on board. employees found out just moments before the press release went out. >> day one when we were there with executives, that's what we led with, we are very proud of this. we are very impressed by what you have done. but here are the choices we have. and here's what we decided to do. >> some choices like closing dogvacay's santa monica headquarters and migrating users to one platform affected dogvacay employees in a big way. so the executive team built in

time and space to give them a chance to react. and they purposefully had the dogvacay, not the rover team, run the announcement meeting. >> we wanted them to have a chance to shout or whatever. but by involving the dogvacay team in the decision, it comes easier because not coming from the new company, the strangers, it is coming from people they trust. >> seattle sent customer service agents down to santa monica to cover the phones because we knew we were going to get flooded for calls once our community got flooded with this. so we could process what was happen and really take it in. >> teams from both companies met to share best practices and how to create the best company possible for customers. >> one of the things we tried to do was really make sure that we learned from what they had learned. because the businesses were so similar, we were exploring a lot

of the same problems. and there were times where they had already investigated something and we thought, hey, that was a really good idea. >> before the newly-merged company rolled out platform changes, they posted a detailed faq on both sites. >> let me just try to answer all the questions that people would be nervous about right away. and then automate the work. >> this helps clients like patrick feel confident they could still depend on the company to find dog sitters for their furry friends. >> whenever a company gets acquired, i am always nervous. and it was one of the easiest transitions i've ever had. everything kept working. >> for savannah, the changes were so seamless that other than the announcement it was business as usual. >> the website said, hey, we're migrating and going to be two together. i joked to some ofone the other day, and i said, basically the

color scheme changed and the logo, it was a seamless transition and enjoyed rover just as much as dogvacay. >> but it was not all smooth sailing. >> i want happened so much faster than we thought, but because of that, we had consequences. we would have done a better job of the flexible support capacity had we understood how fast it would move. >> also it meant losing some great dogvacay talent. >> we had anticipated for the employees we wanted to keep, we would have three to six months to have the conversations. but instead, you know, the whole process moved so quickly that some of the employees, maybe that we wanted to retain, were off looking at new opportunities three weeks in. >> ultimately, aaron said looking back he learned the most important factor to the success of a merger is knowing exactly who you're jumping in the mud with. >> there's the asset of the company, but perhaps more important are the team you're going to be dealing with at the

company. and ultimately if you have confidence that the team is going to be equal partners in the process that will take place. and i think we were very for fortunate with that. and people underestimate the importance of that when valuing a deal. >> thanks to the acquisition, rover now has the largest network of pet sitters and dog walkers in the u.s. and they have set their eyes on a bigger playpen. >> we expect rover to be a global brand. our mission is to make it possible for everyone, even if they are single, even if they are career-oriented, even if they are living in a big city with no yard to make it possible for everyone to have a pet in their life. many businesses have to deal with government regulations and that is particularly true in the pet industry. that was the case for two entrepreneurs who opened pet cafes on the east and west coast. they each braved the red tape

using a common social mission as leverage. first in the nation's capital and now in the city of angels, crumbs and whiskers offers sips and nibbles surrounded by meow misfits, nosey parkers and masters at the art of sleeping. >> even my most supportive friends, they would be like, uh-huh, that sounds really cool. cat cafe. nobody got it. we need a place for creamers to go, which i was thinking should be up there. >> undeterred, she knew having a traditional business that could also offer rescued cats a capable-free and happy life was definitely her calling. along with the help of her brother, the pair forged ahead with the novel concept. but soon, stumbled upon some major road blocks. because of strict u.s. health codes, mixing animals into the cafe fold was virtually a non-starter for regulators in

the food industry. >> my first meeting with them sucked. my second meeting sucked. nobody was taking me seriously, they were laughing at the concept. >> knowing she was desperate, the animal shelter agreed to provide her rescued cats for adoption. once her business was established. >> i said, we need to do a perception and i need a credible source backing me. so for the third meeting, we went in with the vp of on rap s operations. people knew and respected him. >> that move was what they needed to open regulators minds and agreeing to outsource the food prep finally gave them the green light. >> i think our social mission, the fact that we have an impact that it is not just a business, there's a huge giving component to it, has always worked in our favor. >> but without many examples of pet cafes to follow in the u.s., the pair's first business plan flopped in some areas.

>> when we first open, we got swarmed. i remember crying over the reviews. every review said too many people, the cats are stressed out. >> we just didn't really think through every single aspect of the customer experience, from the moment they check in to the moment they leave. >> too many customers and not enough cats caused quite a few cat fights of the human kind. they realized part of the mistake had been too much focus on marketing and virtually no attention paid to operations. >> we killed it on the press, we killed it on the marketing, it just was absurd because now we have built up all this buzz and hype that people want to come and check us out, and we completely lost it on the operations. >> the only way to deliver the perfect experience was to cut down on customer capacity and raise prisces. >> i was scared because that was not in our business plan. that was the only way to make it

sustainable. >> today crumbs and whiskers has had thousands of visitors, fostered many cats and found loving homes for many. on the other side of town, sarah wolfgang, owner of the dog cafe, was also trying to revolutionize the world of animal adoption. >> why are you causing so much trouble? >> she had seen cat cafes sprouting up across the country and wanted nothing more than her dreams of lick, loves and lattes to come true, too. >> we had kind of wanted to form or establish the dog cafe on the impacts of these types of cafes. because they had already been through the health department aspect of things. that just did not work. every single time we called them, they were like, you must be out of your mind, this is the health department's worst might in the nightmare. >> sarah spent month after month negotiating. >> when you are trying to navigate the government to say

yes to an idea, it's important to be on the side first. so tell them what they want to hear. >> staying determined while getting creative with possible solutions is what gave sarah the go-ahead. >> finally, i was like, what if we just happen to have two stores that happen to be next door to each other that one store happened to sell coffee, one store happened to have dogs, people happen to take their drinks into a dog location. and they are like, if customers do that on their own freewill, let them, that's okay with us. >> she had an approved plan, but lacked the funds needed to get going. sarah soon realized by tapping into a community that was like-minded, she found many with the desire to give back. >> we had like a pro bono lawyer to help us with the formation of the company. we had a real estate broker who went into help us find a location. we had a design team that wanted to help us design stuff. that was super exciting. >> and sarah has built a loyal

customer base who shares her passion for helping overlooked pups let their true selves shine through. >> this is chief? >> that's mac. >> hey, buddy. >> they genuinely appreciate dogs and the fact that we're able to rehabilitate rescue dogs and find them forever homes. when i was in business school a long time ago, one of the most popular classes was called interpersonal dynamic. and the idea was that you have to be incredible self-aware to understand how people are perceiving what you do. so it's not just about what you think is right, it's about whether what you think is right is being heard and received by the people on the other end. and you've got to do this well in order to be a good leader. our next guest is gary cubachek,

this is your thing. >> this is how we help people get better. helping them know what it is like on the other side of themselves. >> i think it is very important that you divided people into four categories. tell me what they are and we'll go into them. >> you have leaders based on how they do support and channel. so you have leaders that are come n dominators, you have people who have a tendency to be support-driven, so they are protectors. they support people and don't share expectations or challenges very well. then a category of abdicators who are tired and worn out and ready to retire. they bring low challenge, low support, and then the best leaders in the world are what we call a liberator that brings high challenge, high support simultaneously. they learn how to calibrate it like the best coach you have ever had, the best professor you have ever had. >> it's interesting as you say these, i'm sure the audience, as i'm thinking, oh, this boss i

had was this, this boss was this. and i can think of times when i was a dominator and advocator. when is it right when people put themselves in the right box? >> a very low percent annual. one leader i worked with, when i laid out the quadrant to let them see, i said, do you mind if we asked your people what they say about you? and he was like, no, go for it. guys, what do you think of your boss here? and they were afraid to share in front of him. so i said -- >> are they a dominator then? >> they said, do you mind if you leave. so joe leaves the room. they put him in the dominator category. and he says, are you kidding me? you threw me under the bus in front of this guy. and i said, where did you think you were? and he said liberator. >> he thought he was supporting and challenging people.

>> that was the learning curve. so ask them, what support do you need? and it was basic things. it wasn't hard stuff. but they didn't feel support. >> he didn't think it was important. and they did. so what questions, give me a few questions we can ask ourselves to try and start the conversation, at least with ourselves and then go to the team. >> the question most people are asking is, are you forme or against me or for yourself? the whole idea is, do people know you are for them or not? so what does it look like to be for your people? then are you for your people? truly, are you fighting for their highest possible good? you want them to succeed or not. so that is a question a lot of people can ask themselves. >> i think it gets tricky when different people need different things. how do you determine, okay, you need a little bit more support. and you just want me to challenge you most. and you think of that as support. >> well, it starts with yourself. what is your tendency. so i know, for instance, my tendency is to support, to a lot

of a rah-rah, excitement. thank you for being a part of the team. but i have a ten didcy to hint as people. if i know my tendency first, that's the starting point. let's say we have worked together for a long time, if i know you, i know how to lead you, or i should. so i need to learn how top challenge better. so if i'm talking to you, what does challenge look like to you? and what does support look like to you? if i can answer those two questions, i'm on my way to serving you and leading you better. >> and if your employees at least know you're trying and can feel comfortable coming to you to say, this is what i need for support. >> then you are a person people want to follow, not have to follow. but the reality is i'm all those things. i can be a dominator, protector, liberator all in one time. >> i know this is great to think about this. there's a lot of work people need to do. thank you so much. >> got it, thank you.

i'm here with this week's elevator pitch. congratulations on being here. and your new app called -- >> esa's edible adventures. >> you are a chef and cookbook writer. ever a business owner before? >> well, i guess this is my business at this point, so yes, now, yes. >> so you're used to pitching to publishers but not to investors. >> that's true. this will be my first investment pitch. >> okay, let's see how you do. you'll be talking to two people. they will give you great advise because they have big consumer companies. the first one is jennifer who built physique 57 from an idea to a company now in five countries around the world. and andy dunn who started venobos and just recently sold it to walmart. let's see how you do. >> hi. by way of introduction, i'm a chef, cookbook author and first-time mom. i noticed the lack of perception for color in the media. so i created this ios app to

teach children about diversity, social studies, and cooking. and it follows a chef around the world and follows her back to her kitchen. food is an entry point to learn more about joography, culture and heritage. and you can cook in the app and put the recipe at home. i have sold it to nonprofits and found ways to bring it to curriculum from social studies to a summer camp program. i self-funded this app just to get it into the hands of kids that need it, but my business strategy is really do well by doing good. and i would like to create business lines to help fund the good work. some product expansions could be, expansion opportunities could be a tv series or digital series animated, a book series and other product extensions. in an age when we have a movie like "black panther" it is amazing to see how far we have come, but it shows how far children need to be in a unique and reserved base in the world.

>> so you have great big plans, how much money do you need at this point to get a step forward? >> well, i think at this point i need $200,000. >> all right. okay. both of you, $200,000. i need a number from one from o. first, what do you think of the product, second, what do you think of the pitch? and i will tell you what i think of the product, because my kids had a chance to try this, and it was amazing. they were totally, particularly my 8 year old, was totally enthralled and into the whole experience. >> i'm so happy. >> let's see if a good product can make a good company. and both of you have been in this position, right? 2006, 2007, so let's start with you, jennifer. >> sure. so i give the product a nine. i have a 6 year old, 9 year old, and a 13 year old, and they all loved it. my 6 year old really liked it, and i think what's great about it is the social studies aspect and getting introduced to other countries. we're not a big cooking family,

but they were enthralled by that. >> what is this thing? >> what are they talking about? but they loved this helicopter brings these kids to other countries and you spend time explaining the culture so the geography and culture part i thought was fantastic. as far as the pitch, i would give it an eight. certainly wasn't lower. i think eight for me was the minimum i would give it. i think a little more energy and also explaining a bit more about the future and where you think this could go. i think it could be a little more clear, but i thought it was a really good pitch. >> thank you. >> so i'm a ten and a nine. the idea is awesome. just the look of just seeing the graphic rendering, i think for a start-up to have that quality of aesthetic, it sort of drew me in. i want to play with it. i know it's for kids. and in terms of the quality of the idea, maybe i'm biased, my mom is an immigrant from india, grew up eating food from amazing culture, learning about it and transferring that to other

people across different kinds of cultures, i think, is a really important mission and i think kids will love it. in terms of the pitch, a nine. i think your energy was great and hard to nail everything you said in a way that's articulate and positive, so i was drawn in. i think the one opportunity that got between nine and ten is when you talked about the future business extensions, books and otherwise, i think there's probably not time for that in an initial pitch, just focus on the core product you have, why it's going to win, and use extensions for follow-up conversations. >> congratulations. those are some good scores. >> thank you. >> thank you for coming and sharing your business and product. you, too, thank you so much for your great feedback. when we come back, what you should be looking for when hiring mid-level managers. and how getting out of your comfort zone can be the first step to growing your business.

thank you so much. thank you! so we're a go? yes! we got a yes! what does that mean for purchasing? purchase. let's do this. got it. book the flights! hai! si! si! ya! ya! ya! what does that mean for us? we can get stuff. what's it mean for shipping? ship the goods. you're a go! you got the green light. that means go! oh, yeah. start saying yes to your company's best ideas. we're gonna hit our launch date! (scream) thank you! goodbye! we help all types of businesses with money, tools and know-how to get business done. american express open. we're about a 100-person company, scaling pretty rapidly. less than half our staff is less than 12 months old, and i think

we are struggling a lot with hiring managers and senior managers as opposed to more entry level people. what tips and advice to recruit the best executives? >> number one is, remember that your job is to light up the purpose of your company so brightly that it attracts the right executives. always understand why someone's joining you from a bigger company, and make sure that they are there for the right reasons. you can't delegate this. you have to stay involved. number two is, don't hire c-level execs in bulk if you can avoid it. each executive will need the time to set their own pace and really gel with the rest of the team and if you hire a bunch of leaders at the same time, it's hard to see what's working and what's not and give people the right support. >> we now have the top two tips to help you grow your business. andy and jennifer are back with us. andy, i want to start with you.

in the past, what, 11 years you've founded a company, watched it grow, took investment, and now sold it to walmart, so you have been through the whole cycle. what's one thing that you've learned? >> the most important thing you do at a company is hiring and if you need to do a hire well, you need to do two off list references. those aren't that helpful, those people by definition are going to say something good. they are obliged to, provided by the candidate. you need to track down two people who aren't on the list and those people will tell you the truth. >> how do you track down, are you hiring private investigators? >> use linkedin, figure out where they've worked, who do you know. it's like being an investigative reporter, it's really fun if you treat it as fun. >> almost the same if you're looking for a job, who do i know at that company so i can ask someone. how many times have you

interviewed someone, thought they were great, then did this and thought they were not right for the company? >> we're getting better, have a great talent team, but still probably one in four times or three times we walk away. >> you learn something. jennifer, also, such an incredible growth story. you started your company in 2006, now you're in five countries around the world. i've been watching you from the sidelines and have been so impressed with physique. let's hear of something that you've learned. >> sure. my tip for business owners and any entrepreneur is really work outside of your comfort zone. i think that's one of the best ways to grow and evolve as a leader and there's four steps to venture outside of your comfort zone. one is really address what your biggest fears are and zone in on those insecurities that make you uneasy. the more you know about your issues, the better you can tackle them. number two is really imagine the best case and worst-case

scenario. if you step out of your comfort zone and do the project, you are downsized so far, you should just go for it. >> if you don't think about the downside, it's much scarier. >> usually not so bad. easy to recover from it usually. then to really visualize yourself thriving in that moment. put yourself in that position and think what's it look like if i'm doing this well, and if you can get excited about it, mentally, it's more likely going to work out. finally, afterwards, reflect on the entire experience. not just your experience, but those around you. how did you all perform, did you get the support you needed, did you provide the support you needed to give, and how did you grow and evolve as a leader through the process and take that and move on and you'll be better for it. >> i appreciate you gave us steps. a lot of people say get outside of your comfort zone, but that's easy to say and hard to do.

great to see both of you guys. thank you for all the advice today. this week's your biz selfie comes from martha boateng. she is the business consultant who specializes in social media management and web design. while she talks about virtual offices, we see her in her real office. pick up your smartphone and take a picture of you in your business and send it to us or tweet it to @msnbcyourbiz. include your name, name of your business, location. tell us a little about your company. thank you so much for joining us today. we love hearing from you, so if you have ideas or comments or questions, just send an e-mail to yourbusiness@msnbc.com. we answer every e-mail we get. also, you can go to our website. if you missed anything on the show today, we put it up on the website. plus a whole lot more information for you.

and we put up stuff every single day on our digital and social media platforms, as well. we have one more thing. we have a new podcast, been there, built that. please go, listen to it, and i'd love any ideas you have about the podcast. really makes a big difference to hear from you, the audience. we look forward to seeing you next time. until then, i'm jj ramberg, and remember, we make your business our business. so that's the idea. what do you think? i don't like it. oh. nuh uh. yeah. ahhhhh. mm-mm. oh. yeah. ah. agh. d-d-d... no. hmmm. uh... huh. yeah. uh... huh.

in business, there are a lot of ways to say no. thank you so much. thank you. so we're doing it. yes. start saying yes to your company's best ideas. we help all types of businesses with money, tools and know-how to get business done. american express open. welcome to "politics nation." an incredible week of news sparked by a new generation of americans, who are taking the lead over the debate of guns and school safety. and the russia investigation, the president's deputy campaign chief pleads guilty to special counsel robert mueller. plus, the democratic rebuttal to the devin nunes