Collin Hathaway - Investing and Operating in Home Services - Ep. 32
Oct 6, 2020
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Collin Hathaway, a micro private equity fund manager, discusses his journey into private equity, focusing on home services businesses. Topics include acquisition criteria, company culture, risk-taking in entrepreneurship, negotiation strategies, and unique business ventures.
Company culture and leadership are crucial in acquiring businesses, aligning values and preserving morale.
Employee benefits like healthcare and PTO play a vital role in fostering a positive work environment.
Talent development and change management are essential for business growth, emphasizing adaptability and personnel assessment.
Deep dives
Focus on Small Company Acquisition and Operations
The podcast discussion features Colin Hathaway, who runs a micro private equity fund focusing on small companies, particularly in home services like plumbing and HVAC. Colin shares his journey to Skylight Capital, emphasizing his focus on characteristics required in new acquisitions and insights from his home services operating playbook.
Importance of Company Culture and Leadership
Throughout the podcast, Colin highlights the critical role of company culture and leadership when acquiring businesses. He discusses how assessing and aligning the existing company culture with their values is essential, pointing out the impact of culture degradation on business operations and employee morale.
Enhancing Employee Benefits and Business Operations
Colin emphasizes the significance of prioritizing employee benefits like healthcare and paid time off (PTO) when acquiring companies. He shares examples of improvements made in facilities, PTO policies, healthcare offerings, and management team enhancements to foster a positive work environment and support business growth.
Investing in Talent Development and Change Management
The podcast discusses the importance of talent development and change management in business growth. It highlights a company that emphasized hiring key talents and fostering a culture of adaptability. The example of the HVAC division's growth in Houston showcases the impact of effective change management strategies on business success, emphasizing the need to assess and adjust personnel to drive growth.
Rethinking Financial Engineering and Risk Management
The episode delves into the speaker's evolution in understanding financial engineering and risk management in business acquisitions. It contrasts the initial belief in complex deal structures for better outcomes with the realization that simplicity and fairness lead to improved business operations. The discussion underscores the importance of aligning incentives, prioritizing operational excellence over intricate financial strategies, and adapting risk tolerance for successful business outcomes.
My guest today is Collin Hathaway. Collin runs a small micro private equity fund in Seattle, WA called Skylight Capital and has developed a strong core competence in plumbing, HVAC, roofing, and other home services businesses. He also has one of the most interesting stories I’ve heard of getting into micro private equity. During the episode we talk about his path to Skylight, why he focuses on home services businesses, characteristics he looks for in new acquisitions, and a little bit of his home services operating playbook.
I’ve been trying to get Collin on the podcast since our first conversation a year ago and I wish this episode could have been longer. Collin is a great, entertaining storyteller and I hope you enjoy his hearing fascinating journey so far.
I’m also the founder of The Operator’s Handbook, a print publication where small company operators share their insights and ideas for building more effective and profitable companies. Articles focus on process improvement, sales, hiring and training, managing culture, and all responsibilities within operating a small company. If you run a small business and are looking for new ways to grow and improve, subscribe today and join your peers in the endless pursuit of better at theoperatorshandbook.com.
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