Standing Against Unethical Behavior & How to Build Connections With David Burkus

In this episode of the Creating Wealth podcast, Jason Hartman spoke with client Muthia about a recent issue that he had with a provider. He covered the complaint that he filed and how it reached a relatively positive conclusion afterward.

Then, as 10th episodes cover off-topic subjects, Jason Hartman spoke to David Burkus, author of Friend of a Friend and associate professor of Leadership & Innovation at Oral Roberts University, about the book and how it explains networks and how to build connections. They discussed how to grow a network, develop connections to people, and developments in the business world like new vacation policies and “no managers” business.

Muthia’s Journey with an LMS

Jason Hartman begins the episode by stating that as a 10th episode, it’s going to cover topics of general interest, and because we all need to improve our networks, David Burkus, author of Friend of a Friend, joins the podcast during the second half of the episode to discuss his book.

First, Hartman introduces a client and regular guest to the show, Muthia, to discuss his recent journey with a local market specialist in Hartman’s network.

Hartman explains that there is going to be a full episode in the future with Muthia, where he discusses the event in detail, but today he briefly covers the situation and how he was able to remedy it. Hartman states that there are two big frustrations in his line of work: sourcing inventory and property managers. There are good property managers, but there are also a lot of bad ones.

He notes that one of our duties is to hold bad apples accountable for their actions and hopefully save the next person from being treated poorly. If there’s a company involved, you have to hold them accountable.

Muthia explains that he found this local market specialist and seller by listening to the podcast, and like many things, it started out smooth, but eventually things began falling apart. He notes that he bought two properties in Alabama about six months into his first investing year. One property had a pool and some equity, which he was excited about.

He states that he made several mistakes on his part and realizes it. He hopes that listeners will pay attention and avoid making the same mistakes in their endeavors. He mentions that he did not have the pool inspected with the house inspection. He specifies that a qualified pool inspector was needed, and he did not have one. He also states that he did not have a re-inspection performed as well; two critical mistakes.

Hartman agrees that if you have a pool, it has to be inspected as much as the home does. He advises against buying properties without a home inspection, as this is a very important step. If there are repairs needed, a re-inspection is also needed after the repairs have been completed. He advises listeners to be sure that the inspector is independent, rather than going with one that the seller recommends.

Our Taxes Allow Us Court Systems

Fast forwarding to when Muthia filed an administrative complaint that Hartman recommended he file. He explains that the legal system is a disaster, and with the way it works, a person gets taken advantage of by a party and then by their own lawyer. He notes that one of the main purposes of our taxes are so that the government provides a court system for us to resolve our disputes. We pay for regulatory bodies. If an individual holds a license, one can file a complaint with their agency for free.

Hartman mentions that he has a Hall of Shame resource list, and if you’re a client, you can ask your counselor for a copy or request one at if you’re interested.

Muthia explains that he filed a complaint with the Alabama Real Estate Commission, and since the seller didn’t sell the property under the guise of a real estate company, but sold from another entity, the Alabama Real Estate Commission said that they didn’t have authority in the sale. Muthia explains that he sent complaints anyway and was not going to stand for the issue. It took time, but eventually the Alabama Real Estate Commission bought the property back from him.

They paid for the closing costs and $7-8,000 in foundation damage as well. He states that he came out close to breaking even and appreciated that Hartman and Carrie helped him the way they did. It took effort, but the Commission became aware that Muthia was not going anywhere so they needed to help.

Your Duty as a Citizen

Hartman points out the importance of being empowered and states that his clients are not going to be victims on his watch. His team is available to help with any issues that come up. A lot of the time the bad apples, sometimes big companies like AT&T who Hartman personally experienced issues with, go through life rolling over people.

He mentions that he filed a federal court complaint against the PIP Group and accused them of running a Ponzi scheme and participating in investor stacking. Even if it takes time and money, Hartman says, you have to do something. It’s the duty of being a citizen. Maybe you’ll lose, but those companies are going to think twice before they roll over the next person. Even if they didn’t have to give up anything, the awareness is something they’ll consider. These complaints tend to pile up, and if there enough, they might have their license revoked.

The 1031 Exchange

Hartman mentions 1031 exchanges and how a lot of listeners happen to have highly-appreciated properties in cyclical markets. Many of those listeners have done 1031 exchanges that his team has helped set up, and he mentions that now is a good time to think about exchanges. He advises sellers to consider selling the over-inflated property in order to get several other diverse properties and improving their cashflow. If interested, reach out to your investment counselor. All of these services are free.

Upcoming Events

Hartman notes that there are several events coming up in the near-future. He is headed for the Ice Hotel in Sweden next week for the sold-out event. He notes that he plans on hosting a podcast in the hotel, so listeners can look forward to that.

In May, the Creating Wealth event will be held in Philadelphia. A lot of people have purchased tickets, and Hartman explains that this is likely going to be the only Creating Wealth event held this year. The following week is the Venture Alliance Mastermind trip in New York City over Memorial Day weekend. These are the first public Northeastern events, and to register, go to for early bird prices.

The Scientific Method to Networking and How to Build Connections

Hartman introduces his next guest David Burkus, best-selling author, speaker, and associate professor of Leadership and Innovation at Oral Roberts University. His newest book, Friend of a Friend, presents a new perspective on growing networks by focusing on the science of human behavior.

Burkus explains that there are a lot of networking books on the market about how to build connections, but two years ago when he was researching a new book idea, he studied the 5 to 6 decades’ worth of research on the topic that explained how networks operated and the universal principles of how they work. Some of the advice lined up with what gurus had to say and some did not. His book is about how networks work, not networking according to him personally. It discusses strategy, how networks work, how to act accordingly, and how to build connections with them.

He states that the first important thing to do is develop a different sort of mental model. When most people think about networks, they think about the people in their contacts list or their LinkedIn app. However, networks are three-dimensional, he says.

He explains that it is not just about who you are connected to, but who they are connected to as well and who is two or three degrees of separation from you. It’s important to study this rather than simply collecting contacts. Explore who knows each other and who you can find a path to.

He states that a lot of research supports the idea that unless your online network of people is a representation of your in-person network, it isn’t really that helpful. Having friends from 6,000 miles away isn’t that helpful if you have not really gotten to know them, Burkus explains.

He mentions that the best place to do this is to participate in shared activities rather than the ineffective networking events. In his book, he notes an event by a client who has a dinner party where dinner is served after everyone takes turns cooking. In the event, people are paired together and assigned a task, and they interact at the table once they’ve worked together.

how to build connectionsHow to Build Connections With Specific People

When asked what someone who wants to improve their network should do, Burkus states that when we look at studies on the six degrees of separation on Facebook and the way they’re conducted, we learn that the six degrees came from sending messages to random groups of people and having them reach out to another specific person. They choose who the best person is to introduce them to their target.

The Facebook research is the online connectivity piece, and it was using an algorithm to crawl through the networks and find the most efficient path to a desired target. Burkus states that this is proof that we don’t really know the most effective route to reach the people that we want to meet.

On how to build connections, he explains that what he encourages people to do based on this research is to develop a habit of asking people, “Who do you know in_______?” This accomplishes a couple of different things, one of which is allowing that person to come up with multiple people rather than producing a single introduction. It also takes pressure off of that person because you are not expecting them to vouch for you, which they might not be keen to do.

This way, he says, you have a broader, bigger networking possibility. He states that he tries to work this into regular conversations with people as well. This way, people are accustomed to the idea that he’s always trying to broaden his network when it comes time for introductions.

When asked if this can or should be done online or if it’s better to be in a 1 on 1 type of quest, Burkus explains that if you’re exploring, it can be done online as a scaling measure. He states that he did this about a month ago, asking his network who they knew in television and there were people who could comment and even offer introductions. While it can be done this way, he notes that he is hesitant to ask people he only knows online because he isn’t aware of the strength of their individual relationship or the strength of the relationship between that person and the person they know.

Hartman mentions that the dinner party idea is great, but since a lot of listeners do not have that sort of friend or don’t know where these events are being held, he asks if there are any events on how to build connections that apply to anyone listening around the world.

Burkus states that it depends on what you’re looking for. If you’re aiming at a specific industry, there is usually community “watering hole” either online or regionally that can be sought out. Those tend to be great because you’re meeting with like-minded people, and it’s easier to develop a rapport with these people rather than the “speed dating” type of networking meet ups.

Another possible route on how to build connections is the use of Facebook and LinkedIn groups, starting a group for people who are doing a certain activity. The trick here, Burkus explains, is going from online to offline. If you can’t find any groups that fit what you’re looking for, you can start the community yourself. He notes that he began a Facebook group two years ago for people who write business literature. Now he has more than 300 people who bounce ideas off of each other.

He also mentions that one of the most surprising things that he has found is that those events designed to meet new people was developed from a scientific aspect called homophily, or “like attracts like”. It’s interesting, he says, that it is not just an innate tendency to hang out with people like ourselves.

As part of the network effect, as we build up a network, it starts to look more and more like us. This means that finding a broad, diverse network is more difficult. It’s important to look for diverse answers and reach out to people. This is why Burkus uses the open-ended question regarding who people know in an industry or location, so that we can find people unlike ourselves.

Getting Away from the Org Chart

Discussing his book, Under New Management, Burkus mentions the counter-intuitive ways that businesses are acting. He notes that in some businesses, people are pulling away from the traditional org charts and have started building “teams of teams” with the ability to re-allocate based on the needs of a project. If you’re a solo-preneur, he says, you know that you need a wide network of people so that you can build teams for your individual projects. It’s better not to assign people to buckets and have them remain there forever.

He mentions the way that Zappos is paying people to leave, and notes that some other companies are experimenting with the “no managers” idea. He explains that there is still management being done but it’s being handled by a team of people, rather than placing management with one person. Reporting to only one person was designed for a specific industry, the railroad, which doesn’t change often. This concept works in large organizations like the military, but small startups are finding that they need more flexibility.

Trusting Your Employees

Referring to his chapter covering the removal of standard vacation time, Burkus states that Netflix was one of the companies that made this concept popular. They circulated a culture deck in early 2008-2009, and this was one of their policies that got attention.

Employees of Netflix were approaching the CEO and HR and were asking why they were not being tracked on when they show up for work, when they leave, how long their lunch breaks are, and when they go on vacation.

Burkus notes that Netflix lawyers thought that the vacation policy wasn’t stringent enough. Reed Hastings, the CEO, asked if a stringent policy was completely necessary and if there was a law pertaining to it. Federally, there is not, but some states have vacation laws. To Hastings, the idea of a stringent policy set up an Us vs Them sort of issue, and he was trying to place trust in his employees and push back against micro-managing their work.

He opted to have his policy remain as, “Take as much time as you need” to establish trust. To be fair, Burkus says, one person out of a hundred takes advantage of the situation, but the other ninety-nine benefit from the system.

Hartman mentions that with his company, it’s a common view in the land lording world where tenants are seen as children and landlords tend to think that they’re bad people. Hartman reminds them that the tenant is the customer, and if the landlord was running a hotel, they’d treat their guests with more hospitality. While there are bad tenants and bad employees, the majority of them are decent people.

Companies Without Luxury and Vacation Time

When asked if companies that can’t afford luxury can adopt the open vacation idea, Burkus cites a hospital in Windsor, Ontario, Canada that discarded the standard vacation. In a hospital, schedules have to be closely managed, and this responsibility was turned over to the working staff so that they could coordinate their schedules with each other. The vacation time at this hospital is still open and Burkus points out that in industries who have adopted this move, people tend to take the same amount of days for vacation as before, but they feel more trusted.

Most Surprising on Creativity

In closing, Burkus explains that he found creativity to be a team sport. We tend to think of individual genius, but we don’t realize that every time someone makes a dent in the Universe, they had people working beside them. If you believe in the lone genius, it’s easy to feel like we aren’t good enough. It feels better with a team involved.

For more information about David Burkus or any of his books, visit