After 20 years in business, The Abs Company has seen a lot: The years leading up to the overnight success of infomercial legend The Ab Roller; negotiating patents and legal disputes; testing their products in gyms; and sending fitness care packages to troops overseas. Sean Gagnon, president of The Abs Company, chats with Clate and Scott about what success looks like, getting Fortune 500 levels of revenue per employee, and learning how to become a leader.
Sean Gagnon: Yeah. You know, I mean, you make a lot of great points and I think one of the greatest traits that an entrepreneur can have – and I don’t think most have it initially – is humility. And you have to realize exactly what you don’t know. We’re just to just getting it done and doing this and that, but you have to step back at some point and say, “You know what? I’m not an expert in this area and I need to find someone who is.”
Clate Mask: That’s Sean Gagnon of The Abs Company, talking about what can happen to your business when you have to guts to admit what you don’t know.
Scott Martineau: Welcome to the Small Business Success podcast. I’m Scott Martineau.
Clate Mask: And I’m Clate Mask. We’re co-founders of Infusionsoft, and we are really excited to have Sean Gagnon of The Abs Company with us. Sean, how’re you doing?
Sean Gagnon: I am doing great. Honored to be here with you guys and I appreciate this opportunity.
Clate Mask: Oh, we’re totally glad to have you. Thanks for spending the time. We know you got some good stuff to share with our listeners.
Scott Martineau: I think to start, maybe just give the basic stats on your company. Let us know where you are today.
How many members of your team, and a little bit more about the business.
Sean Gagnon: Yeah. Sure. We just celebrated last year 19 – our 20 – [laughs] – 19 – 2015 was our 20th year of business.
Scott Martineau: Fantastic.
Sean Gagnon: And, you know, through various iterations of the business I should say, and the current business right now, we have ten employees, ten team members, and we have revenues just under about $4.5 million. We got some exciting new things in the pipeline for this year, so we’re looking for some big growth in the months and years to come.
Clate Mask: That is awesome. Congratulations. You’ve got great production of your company with ten employees. That’s an enviable revenue for employee stat. I have to tell you. You're like Fortune 500-esque at about 4 – or $500,000.00 revenue per employee, so that’s pretty impressive.
Sean Gagnon: Thank you. And you know, it’s funny, in our industry and our – the industry we’re in, commercial fitness primarily, it’s a small industry in general.
You get to know a lot of people and most people think we’re a lot bigger than we are, so we’re a little bit like the Wizard of Oz with some of the things that we’ve been able to do. But we have a neat niche that we can kinda own and that’s why it works. We got some great people, for sure.
Scott Martineau: That’s fantastic. Commercial fitness. Tell us a little bit more about that.
Sean Gagnon: Yeah. So back in the day, we owned health clubs ourselves. We owned five commercial fitness centers. Back in 1995, one of my business partners created a very well-known business product known as the Ab Roller.
Clate Mask: Oh. Yes.
Scott Martineau: Yes.
Clate Mask: The Ab Roller. We know that. [Laughs] That’s awesome. Very cool.
Sean Gagnon: And that was the product that you – a lot of people mistake it for the old gym wheel looking product. But this is the product where you look like a little rocking chair and you lay down and do crunches on it. And with that product, it’s so unique because –
Scott Martineau: It’s how I developed my – that’s how I developed my one-pack.
Clate Mask: [Laughs]
Sean Gagnon: [Laughs] We’ll send you another one. Yeah.
What was so unique about that product is we didn’t invent the crunch, but for the first time, we mechanized it. People – for the first time they got on that product, and they felt the crunch the way they should and that’s what made it take off. And because it sold over 10 million units to the consumer primarily, we learned a heck of a lot about products. We learned about copycats and knockoffs and legal systems and all that. We were gym owners. We didn’t know any of that stuff. And –but the neat thing was because of the success oft hat product, a lot of fitness inventors started to come to us. Personal trainers, guys that just had an idea, but didn’t know what to do next.
And a lot of those products fail in the commercial realm. And we realized as times were changing so fast, one, TV infomercial products are very hard to sell, especially nowadays as people don’t even watch TV anymore. It became very difficult. And, two, we realized that by having a commercial-facing business, we really legitimized our home business. So now the consumer would say, “Oh. This isn’t just another late-night fad.
This is something that’s used by real personal trainers, real health clubs all over the world. I’ll bet’cha it’ll be good for me too.” And it gave us a lot of credibility in the industry and that’s really how we got into the commercial fitness business, and also having the credibility of having been gym owners ourselves. We were able to speak the language to the gym owners. It really was a nice synergy all the way around and kinda how things became full circle for us.
Clate Mask: What was that – you know, you went through a pretty significant transition there from gym to then producing your own product and taking it onto an infomercial, and then to a transition where you were now working with inventors that had fitness products. Those are a couple pretty big leaps and I think a lot of times, business owners are faced with those challenges of moving their business into a whole new realm, and those are hard scary decisions to do that.
Maybe – talk to us just for a minute about your decision o go from running gyms to the Ab Roller and then from the Ab Rolled to now actually helping inventors with their inventions for fitness. Talk to us about those two transitions for just a second.
Sean Gagnon: Yeah. Sure. The first one was pretty simple, right? We were in the gym business and everybody in the gym business, you know, in the gym atmosphere loves to work their abs, right? They want to do something about that stomach because people equate having a flat stomach with being fit. Plain and simple. Whether you call it health or you call it vanity, whatever it is. People want that.
Clate Mask: Or you call it your spouse. [Laughs]
Sean Gagnon: [Inaudible comment] Absolutely. Yeah. Especially if they have one and you don’t.
Clate Mask: That’s right. [Laughs]
Scott Martineau: [Laughs]
Sean Gagnon: People are always coming to my business partner, Don, saying, “How do I train my abs?” or “How do I not hurt my neck while I’m doing these crunches?” And that’s what spurred him to create that idea. And when he did that, he just started to show a couple of people and people got it instantly.
And the light bulb went off. Through the years, he had few other inventions in the fitness area that didn’t really take off. This one just – it lit a fire. And that transition was really easy because we saw the demand instantly for that product.
Clate Mask: You saw demand instantly, but you were able to contrast that with some inventions you’d done that didn’t really take off. It wasn’t like – people might go, “Oh. Well, that was just this big overnight success story with the Ab Roller.” But the reality was you were actually working in a lab, which was also called a gym. You were working in a lab over and over and over, seeing – inventing different things that weren’t working, but then you saw something when the demand really popped. My guess is your overnight success story was probably just like everybody’s that was paved with years of hard work, blood, sweat and tears.
Sean Gagnon: Yeah. Absolutely right. Exactly what you said. Our overnight success story took years. Even after you’ve found something that seemingly had some traction then you got into a whole new realm.
Like I said, we were gym guys. We didn’t know anything about products. We didn’t know anything about infomercials, patents, anything like that. And we were very fortunate that the Ab Roller grew so fast and it took off so fast that you were able to defend it because we were knocked off literally by 28 companies. And what do a couple of gym guys know about that? And if you didn’t have the war chest to fight, you were stuck. And so that was a blessing. It really was. It was a blessing to do that and to have that opportunity. At the end of the day, we’re able to – when the patent’s issued – because, look, while a patent is pending, there’s nothing wrong with copying and idea, right? Because you don’t know if the patent’s ever going to issue. That’s the system. But when the patent issued, we were able to go back and fight and ultimately win all of those suits. And move on to some greener pastures. That first transition was really kinda easy for us.
And the second one, you know, we considered it an honor that people had enough faith and trust in us to say, “Hey. You were inventors and you did this.
You took something from mind to money from concept to market. Can you help me too?” That was an honor. Like most people who look at ideas, it’s like that, the majority, they’re not for you. They weren’t’ for us, but every once in a while, one would come along that we said, “Wow. That is really cool and we think we can work with that.” As well as continue to innovate on our own. So that next transition kinda came because we knew that there were people just like us were out in there in the field, working everyday and had great ideas. And, you know, just didn’t quite know what to do with them, but they were really opportunities. We just took that as a blessing. We took it as something that we thought we could run with and today, the business runs on both of premises, our innovation and innovation from the outside.
Scott Martineau: Love it. You were the Shark Tank for gym before Shark Tank.
Sean Gagnon: [Laughs]
Clate Mask: [Laughs]
Scott Martineau: That’s great.
Sean Gagnon: Well, you know –
Scott Martineau: Sean, tell us if you’ve ever had a time where you woke up one morning and you're, like, “Ah. This is bad. Why did I do this?”
Sean Gagnon: What time is it?
Clate Mask: No. Yeah. Just those dark moments of this isn’t’ going to make it. We are up a creek without a paddle. How is this going to – how is this going to play out? You must have had a time or two like that over the 20 years.
Sean Gagnon: I mean, absolutely.
Clate Mask: Or 20.
Sean Gagnon: As I said earlier, in the legal system, all that patent stuff, and all that having to learn that. You think, “Wow. If you lose these cases,” right? If it this doesn’t go your way, all your hard work, your invention, everything you did, could be for naught. Everybody else could take the spoils of what you created and it’s amazing, but those are dark days. And then ultimately, the Ab Roller IP was sold to a consumer good company, and then when we started The Abs Company and started to market products, you have those days again, because you're, like, “Okay. Do we really want to do this again?”
You get out there and are in the commercial sector, especially, making that transition, hearing noes from the companies, not having the connections, being a one-product company at the time, getting the door slammed in your face over and over again. You're, like, “Man. Maybe we should just go get a job. Wouldn’t that be easier?” But you wake up and then you find an inspiration. You get that yes. You see that opportunity and just say, “Man. We’re going to keep going. We did it before. We can do it again.
But I’ll be honest with you, after 20 years of entrepreneurship – I don’t know about you guys – but I have those days still where you're, like, “Man. This is hard.” And I think almost today in 2016, you can have those feelings even more because the world is changing so fast. How do you keep up? How do you get that attention of the customer? Like I said, back in the day, throwing up the infomercial, that was easier. Not easy, but it’s easier. But now, holy cow. I’m right there with anybody who feels that way.
Scott Martineau: Yeah. It’s interesting. The way you talked about the –
waking that one day, realizing, “Wow. We’ve got to understand the law.” I’m guessing, when you went into business, you had no clue that someday you’d be defending five patent lawsuits – or I guess, you weren’t defending, but you know, having to master that –
Clate Mask: Litigate.
Scott Martineau: Yeah. Litigating. I think every business owner has a version of that story. If it’s not law, it’s something else, right? Marketing. “Oh, man. I got to market this product or finance or whatever.” There’s a flexibility there that you’ve – you have to be willing to face if you want to be successful.
Clate Mask: Yeah. You know –
Scott Martineau: Maybe “flexibility” is the wrong word. You’ve got to – there’s a breadth of knowledge that you have to address.
Clate Mask: And always take it on. You know, whatever that new thing is, you’ve got to learn. Sometimes it’s – you know, early on it’s sales or marketing or product market match, getting that right. But as you get bigger, you know, you have leadership challenges. Now you got to lead people. You’ve got ten employees and you got to make sure that everybody’s growing in the same direction, or it might be that you’ve got an issue that’s
a legal challenge like Scott’s talking about and you’ve got to now become knowledgeable about that. But that’s – you know, that’s one of the reasons why we love entrepreneurs, why our number one value at Infusionsoft is we power entrepreneurs because we just – we revere that entrepreneurial makeup that says I’m going to go figure this out. I’m going to go learn what I’ve got o learn. Take on what I’ve got to take on to be successful and plow through whatever those obstacles are.
Sometimes it’s a little bit sobering when you wake up and you feel like you’ve achieved a certain level of success or maybe you feel like you're – you know, you're having to take on something totally unexpected or totally different than what you feel like is your sweet spot. But if you don’t do it, then you won’t achieve your goals. You won’t be successful. You might be put out of business. And that’s – when faced with that reality, what do entrepreneurs do? They go figure it out. They go find the resources. Learn what they need to learn. Get in touch with the people who understand. Build the relationships, the connections, ask the questions. All those things that you’ve got to do, and then you actually demystify this big thing that feels like it’s impossible to figure out.
For you, it might have been legal questions and legal issues. For somebody else, it might be people leadership challenges. For another person, it might be technical product issues. But all those things are equivalent to math blocks for people as they’re – when they’re in school. It’s just a block. It's a mental block. You get rid of the mental block and then you can go solve the problem. And it sounds like that you’ve done that many times.
Sean Gagnon: Yeah. You know, I mean, you make a lot of great points and I think one of the greatest traits that an entrepreneur can have – and I don’t think most have it initially – is humility. And you have to realize, to your guys’ point, exactly what you don’t know. We’re just to just getting it done and doing this and that, but you have to step back at some point and say, “You know what? I’m not an expert in this area and I need to find someone who is.” And that’s one of the true values of your community, your elite groups. I’ve posted things on there and I’ve had literally business-changing solutions in minutes.
And that takes humility, right? It takes humility to put yourself out there to the world and say, “I don’t know how to do this.” Look. As I’ve grown, I’m in my early 40s now, but in my early 30s, I may not have done that, right? I didn’t have that sense of humility then. And it’s grown. And the other thing that I think you said that I think is really critical and I’d like to reiterate, in addition to being an entrepreneur, I’m a father.
And I have a 14-year-old son. I spend a lot of time coaching his teams. I have since he was a little kid. And one of the things I’ve always spoken to my son and kids who have played for me, is one of the greatest traits that you can have as a boy and growing in a young man, and eventually man, is the ability to figure it out. The answers aren’t always here for us in our own minds. But it’s out there, right? If you can figure it out, the world becomes a much greater place and you don’t have to always say, “Oh, man. I have to know how to do this.”
I can figure it out. And being able to work through those challenges, whether it be on your own or becoming more humble and asking for help, you figure it out, and that’s when you can really start to take things to the next level of success. I think that as an entrepreneur, if you can grasp those two things you’ll be worlds ahead of the people that don’t.
Clate Mask: Well, that is great. We always love to ask people what characteristic – or what characteristics have helped them achieve success and you’ve just highlighted two big ones in humility and the tenacity to figure it out, whatever that issue is. One thing I love about Scott is that Scott’s got that figure-it-out tenacity. He’s just totally goes after it. I’ve seen it a million times. By the way, if you want to be on a basketball court with him – or for that matter, any competitive endeavor – he will – [laughs]
Scott Martineau: Yeah. Who are you to talk?
Clate Mask: What do you mean? I’m not competitive. What’re you talking about? That’s awesome. Thanks for sharing that. That is great. You’ve – let me ask you this, because you referred to your son.
Sounds like you’ve done some coaching on teams. And I’m not necessarily fishing for a particular answer, but you’ve achieved a certain level of success and what does that – what has business success meant for you personally? What has that meant for you in your life? What are you able to do as a result?
Sean Gagnon: You know, I think that, obviously, success means different things to different people, but I think that for me, it’s being able to, in some sense, just live life on my terms, right? I want to coach these teams and – he’s heading in to high school next year so a lot of my coaching duties will be over because the high schools will take over. But being able to be there through little league and Pop Warner football and all those things, that’s been a true blessing for me. Another thing, it’s been a blessing for me, I’ve traveled the world with my business and success has meant that for me. We do business in over 40 countries around the world.
And I’ve gotten to see a lot of them. And that’s been a true blessing. For me, having a business that allows me to have the freedom to have that family time when I need it, but also to experience the world through the business have been great markers of success for me. And I think that the thing that I probably hold the most dear in terms of success of my business and myself personally has been the ability to give back in the manners that I want to do.
Because growing up I wasn’t blessed with the things. I truly believe that in life, we’re blessed so that we can be a blessing to others. And that’s something that I hold very dear personally and with our company. If we weren’t able to do that, we wouldn’t be successful. If I can continue to do that, I think I’d hit one of the highlight markers of success for myself.
Scott Martineau: Great.
Clate Mask: Well, that’s great. Thanks for sharing that. And I can appreciate where you're coming form in terms of being able to spend time with your kids,
live life on your terms as you described and being able to travel and then being able to serve and help and bless others’ lives. You know, it’s funny because every entrepreneur that’s sitting out there, listening knows that being able to get to a place where you have freedom is – it’s a big part of why we started business in the first place. We want to have freedom. We want to have a little bit more control, a little more ability to live life on our terms as you’ve described.
And yet, man, it is so difficult to do that when you star ta business. You think you're going to have all this freedom, and all of a sudden you're more shackled, more burdened, more weighed down by the problems and challenges and issues with the business than you ever had when you had a “job.” So that elusive freedom for an entrepreneur is something that we love to celebrate when we see business owners get to that point. And, sure, there are always challenges and things to work through, but I think it’s awesome that you’ve been able to, like you said, live life on your terms and enjoy the spoils of success and then keep giving back to others and serving others.
Of course, that’s the magic formula. Magically, it tends to continue. The success tends to continue. The success continues to flow in your – when you're serving others. I think it was – I think that’s a Zig Ziglar quote. If you help enough people get what they want, you’ll get everything that you want. And sounds like you're making that happen. Very cool.
Sean Gagnon: Yeah. One quick thing I’ll add to that _____ is that even, you know, for the folks that are just starting out in their business, they may not have the – some of the traditional markers of success. When I say “living life on my terms,” even when were just starting out, if I could get out there on the field at 4 or 5:00 to help coach the team, that just meant I can go do what even though we were just starting out because I knew that 10 – 11:00 when the kid went to bed, I was going to go and I was going to put my time in and get my work done. I think that people – yeah, everybody has that entrepreneur’s illusion. If you're not an entrepreneur that – yeah, we leave at 4:00 to go coach and then we’re done for the day. Well, we all know we’re the one – we’re going right back at it.
Clate Mask: Yep. Great.
Sean Gagnon: My son actually said to me – the other night, he said – his teacher told him in school they’re probably the only generation that people leave work to go back to work. [Laughs] You go home. You bring the computer. You just open it back up and you’re till working.
Scott Martineau: Leave work to go back to work.
Clate Mask: [Laughs]
Scott Martineau: That’s great. So, Sean, tell us about the – maybe the flip side. What’s the thing that has been most rewarding in your business? Maybe the time when you just felt super proud and excited about what you were doing?
Sean Gagnon: Yeah. I think one of the things I’ve been most proud of is the ability to employ people and help them, help provide a living for them and their families and help them achieve some of the goals that they want to achieve. That’s something that I take very seriously. You know, other than performance issues, we’ve never laid anybody off in our company. And that’s something. Even in tough times, I’ve stopped drawing money. I’ve kept people on. That’s something that I’ve been very proud of because I know that – they’re putting a lot of faith in us. Sometimes that’s a tremendous stressor.
And a pressure. Weight on the shoulders. But it’s something, as you look back, that I’ve been very proud of. And I’ve also – the other thing that I’ve been very proud of is I have a huge respect for the military. And I come from a military family. I’ve had the opportunity through the business to sit on the board of a foundation that sends fitness and nutrition-based care packages to our troops overseas. And one of the proudest moments, for me, was last year. They sent me a flag that they flew over a base overseas in our honor. We hang it proudly in our office for all to see. That was a tremendous sense of pride for both me and the people that work here because without them, that wouldn’t have happened.
Clate Mask: That’s cool. That’s really cool.
Sean Gagnon: That was a neat moment.
Clate Mask: Thanks for sharing that with us. We ask that question frequently of our guests. It’s always – you know, it’s awesome to see that the answer is almost always about the people they work with in almost every case.
A lot of times, it’s the customers that they serve, but I think even more predominately, when successful entrepreneurs are proudly talking about the moments in their business that they reflect on with fondness, it’s usually about the people – the people you work with. The people you lead and so that’s – we congratulate you. We love seeing entrepreneurs create a vision for their company and then build it and grow and bring people into that mission and it’s just incredibly rewarding. We experience it at Infusionsoft everyday. We know that you’re doing the same as you lead your team and we just applaud the entrepreneurs out there who – once they achieve a certain level of success, they see a new peak. They want to go after it and that usually involvers really rallying their people and getting to work side-by-side with a bunch of great people that share the same mission> you get to have moments like you just shared.
Sean Gagnon: Indeed.
Scott Martineau: Well, so we talked earlier about the characteristics of success. Any other final nuggets of wisdom. You know, you’ve accomplished something that an extremely small percentage of businesses do, being in business for 20 years. Revenue per employee, which is one Clate’s favorite business metrics.
Clate Mask: As I threw it right at the beginning of the podcast. Everybody’s like, “What the heck are you talking about?”
Scott Martineau: By the way, a little aside there, a quick shorthand for understanding how much revenue a company has or so forth is using revenue per employee. The SBA, Small Business Administration, they say it’s real – those of you who are in this situation will know what they’re talking about, but they say it’s really hard to sustain a business with less than $100,000.00 revenue per employee. And then you get up into larger Fortune 500 businesses, and you see numbers like –
Clate Mask: 4 – $500,000.00.
Scott Martineau: 4 – $500,000.00 per employee.
Clate Mask: By the way, the average for solo-preneur in the U.S. is $47,000.00.
A solo-preneur is an average of $47,000.00. As you get – it’s ten times that if you're an individual employee in a Fortune 500 company. One of the things that we love to do and one of the reasons why we talk so much about the small business – on the Small Business Success podcast it’s really about helping entrepreneurs grow their business and get to that place of much more prosperity because it benefits everybody involved. You can create a great opportunity for your people and they join with you in helping to serve customers. Everybody benefits. When an entrepreneur is successful, his or her family is successful, the community’s – the employees are successful, the community’s successful, it really drives the economy. That’s why we get fired up about it because we see the far-reaching effects of small business success.
Scott Martineau: I took a little bit of a detour, but the question is any other, just, nuggets of wisdom you want to give to our audience and our listeners.
Sean Gagnon: Yeah. I would say one of the – I attended ICON this year for the first time.
And I attended it – to be honest with you – because I was on a plane, I was reading an article in Inc. Magazine and they talked about the top ten events that an entrepreneur should attend in a given year. And you were on there. And I didn’t know anything about it. I was thought I was coming into a software conference, and boy, was I wrong.
Of course, all that information was there for you if that’s what you wanted, but I focused more on the business side of thing because I have people that run our Infusionsoft program and I don’t know much about how to use that wonderful program, but I have people that do and that’s what matters. But when I was there, I – this – one of the speakers said – and I quote – he said that businesses don’t fail due to lack of opportunity, but due to lack of leadership. And, boy, that struck me like a bolt of lightning. I think I might have even fallen out of my seat because that was me, right? That was me. After all these years in business, that was me. We – and especially in this day and age, there – I don’t think there’s an entrepreneur out there who can say I don’t have enough opportunity.
Because it is everywhere. But it’s leadership, right? I talked to my staff when I came back. I said, “(A) Leadership for me is the leader, but (b) you have to realize that you’re your own leader. Even as an employee, you're running your own business essentially and you have the opportunity all around you, but have to lead your day properly. You have to lead your tasks properly.” Everything I learned there came right back. If there was one other thing that I would share with a fellow entrepreneur is whether regardless of the stage of business they’re in is really take that statement to heart because I believe fewer true words have been said about the business opportunity. That it’s lack of leadership and it’s –
Clate Mask: Yeah. That’s great.
Sean Gagnon: not that _____ _____ leading a team. It means leading your
personal day ‘cause opportunity is everywhere.
Clate Mask: Yeah. It is a great point. It’s – the leadership, whether you're leading a company of 25 people or 10 people or 1 person, you’re leading yourself. We like to say at Infusionsoft, all problems are leadership problems.
It’s a similar version of what was shared at ICON. And by the way, thank you for the commercial about ICON. We appreciate that. It is an amazing event, and this year we’ll have over 4 – 5,000 people there. And like you experienced, it’s just an awesome business-building community, and a business-building event that – the software’s at the heart of it, obviously, but it’s so much more than that. Thanks for sharing that. I’m glad that it impacted you. I’m glad to hear how it affected you as an entrepreneur, as a leader, and the things that you're doing at The Abs Company. It’s really an inspiration. Thanks for dishing the advice and sharing with people out there that are listening on the Small Business Success podcast because your experiences or – they’re inspiration or motivation for people that are out there listening.
Sean Gagnon: Yeah. Truly an honor to share any insights that I have, and to be in your guys’ company because I know that you guys, having heard your story, you started in a small room like many entrepreneurs did, and you have grown to the heights that you have.
And I know that you're still growing. To me, as an entrepreneur, that’s who you want to learn from, right? You want to learn from someone who’s been where you were, and is where you want to go. There’s tons of books out there that you can read about it, but if you have the opportunity to talk to someone who’s done it, that’s just gold.
Scott Martineau: Right. Well, thank you, Sean, and congratulations to you for hat you’ve done. Thanks to all the listeners. I’m sure you got some great nuggets of wisdom today. Thanks for tuning in, and we’re going to call this a wrap on this episode of the Small Business Success podcast. Thanks for tuning in
Clate Mask: Don’t forget to rate us, write a review, and subscribe to the podcast on iTunes.
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