Think Like an Owner

My guests on this episode are Bradley Roofner and Logan Brown, who together, along with a third partner Kade Thomas, acquired WLE, a landscaping firm in Austin, Texas, in 2017. After nearly four years of operating, they sold the company to Brightview, a public landscaping company and one of the largest in the country. Our discussion today focuses on revenue quality, a topic Bradley and Logan have given a great deal of thought to. We talk about defining revenue quality and how to identify high and low quality revenue, creating your ideal customer profile, how to sell that customer building a motivated sales organization, emphasizing high quality revenue across an organization, writing more valuable customer contracts, and various tips they have for CEOs looking to boost revenue quality and thereby their company's valuation. Enjoy. Listen weekly and follow the show on Apple Podcasts, Spotify, Google Podcasts, Stitcher, Breaker, and TuneIn.  Links: Bradley on LinkedIn Logan on LinkedIn The E-Myth by Michael Gerber Topics: (2:44) - What was the business you ran in Austin? (4:29) - What would you say are some aspects of high-quality revenue and aspects of low-quality revenue? (6:57) - Was there any revenue that wasn’t as clear cut to be either high or low quality? (8:35) - How did you beef up the quality of revenue in your first 90 days? (15:350 - How did you go about determining who your ideal customer would be? (19:38) - What decisions are made based on the ideal customer profile? (28:09) - How did you build out your outside Sales Org? (31:31) - Did you have more success hiring people for Sales that had industry experience or Sales experience? (33:15) - How did you instruct Sales people to navigate price increases? (35:01) - Was your Sales Team compensated based on margin? (36:07) - What were some levers in cash and collections that improved Quality of Revenue? (44:04) - Did you find that as Quality of Revenue increased, the number of customers in collections decreased? (46:40) - Did you find some interaction between construction and maintenance? (50:47) - How did you go about measuring the conversion rate from low to high quality revenue? (53:11) - How did Quality of Revenue impact your lives? (59:11) - What advice would you offer CEO’s looking to do general clean up in their business?

My guest on this episode is Josh Schultz, current president CaneKast and previously co-founder of the Chess Group. Josh has partnered with Reg Zeller, a former podcast guest from Episode 81 and CaneKast founder, to acquire and streamline foundries across the country. But as Josh and I talked about in the episode, that is far from their only ambition. Josh and I talk about what has changed the most in the year since joining CaneKast, how he approaches scaling, organizations, and teams, documenting processes, change management, and finding a complementary partner to work with. Josh is also a great friend and a person I deeply admire. He's incredibly intelligent, process driven, and creative, and I always love talking with him. Please enjoy our conversation. Listen weekly and follow the show on Apple Podcasts, Spotify, Google Podcasts, Stitcher, Breaker, and TuneIn.  Links: Josh on Twitter JoshuaSchultz.com CaneKast Reg Zeller on Twitter The SMB Ops show Topics: (2:58) - What would you say are the biggest changes you’ve seen in your business in the past 10 months? (4:45) - Do you feel like there’s an order of operations for changing or tracking different things? (7:00) - How did you go about understanding pricing and mold counts? (10:47) - Do you believe you’re creating a competitive advantage beyond pricing that contributes to growing sales? (12:40) - What’s the most challenging piece to improving service? (14:45) - How much do you think making internal data more transparent has impacted your efforts? (19:46) - How do you get someone with deep domain expertise to share and document knowledge? (20:51) - What is the goal for building multiple solo companies within CaneKast? (23:42) - What are some business models that are inspiring this move? (25:05) - The importance of building a competitive advantage (27:15) - Do you feel your competitive advantage will allow you to acquire other foundries? (29:02) - Do you think there’s correct pacing to change? (30:45) - How do you approach setting a vision for the company? (34:49) - How do you view what types of aspects of the business will change next? (36:51) - Where do you think you’ll feel the strain as you start acquiring companies? (38:34) - How do you go about learning a new topic? (42:10) - How have you used media and podcasting to build relationships? (43:47) - What advice do you have for finding a good partner? (46:00) - How did you think about your role at CaneKast? (48:18) - Have you always had this Entrepreneurial Impatience? (50:43) - Where do you feel like you need to be patient? (54:56) - Evolving the CEO role to pure people & executive team management (59:26) - What’s a strongly held belief you’ve changed your mind on? (1:00:09) - What’s the best business you’ve ever seen? (1:03:24) - What’s next for you in manufacturing after foundries?

My guest on this episode is Brandon Kuchta, the former CEO of Analytical Technologies Group, which provides repair, maintenance, and contract services for lab instruments. I say former because he sold ATG last October, and today's episode is going to cover all things selling a company from determining the right timing, what is typical in a process, and communication across stakeholders. We also talk about life after the sale, including Brandon's consulting period with the new owners and how operators can relax and give themselves a well-deserved and often much-needed break. Enjoy. Listen weekly and follow the show on Apple Podcasts, Spotify, Google Podcasts, Stitcher, Breaker, and TuneIn.  Links: Brandon Kuchta on LinkedIn Seven Springs Partners Topics: (2:31) - What was the business you ran and what was the process for selling it? (4:09) - How did you know it was the right time to sell the business? (7:03) - What advice did you get from other folks about selling a business and planning for life after the sale? (8:27) - How long was it between deciding to sell and selling the business?  (9:25) - What sorts of things would you do to prepare to sell a business if you had a 2-3 year runway? (13:12) - Would you run a business differently if you knew you would be selling it? (14:39) - What made you decide to hire a bank to represent the company instead of going directly to buyers? (16:18) - How did you filter which bank you would partner with? (19:41) - What types of offers were you fielding? (22:11) - What were the typical terms you saw for seller financing? (23:38) - How did you think through rollover structures within offers? (26:04) - What were some expectations buyers had if they wanted you to roll over some equity? (27:48) - What was your thinking on a strategic sale vs. a PE sale? (29:33) - How do you think about communicating the process of selling with different stakeholders? (34:28) - What was the reaction from your team when you announced the sale? (36:32) - What did the consulting agreement look like? (38:41) - What is your role today? (39:16) - How have you relaxed and decompressed as the former CEO? (43:31) - What are your health and fitness plans? (49:10) - What’s a strongly held belief you’ve changed your mind on? (50:59) - What’s the best business you’ve ever seen?

My guest on this episode is A.J. Wasserstein. Early in his career, A.J. founded Archives One, a physical records management business he operated as CEO for 17 years before selling to Iron Mountain. He then acquired One Source Water, which was eventually sold to Water Logic in 2016. He then began teaching at Yale School of Management where he has written ad nauseam about nearly every topic within growing and running small companies and search funds. His writings are my go-to resource for many questions and business concepts I want to learn more about, and I'm quick to recommend them to others. A.J. and I talk about being a professor and how to get involved if you’d like to teach, why students do not pursue entrepreneurship through acquisition and work-life integration as CEO, a topic A.J. has written and thought very deeply about, among other topics. Please enjoy this fantastic conversation with AJ Wasserstein. Links: More on A.J. Wasserstein The Judd Lorson story by A.J. Wasserstein Why MBA Students Do Not Pursue Entrepreneurship through Acquisition by A.J. Wasserstein How CEOs actually spend their time? by A.J. Wasserstein Topics: (3:14) - What made you excited to publish a paper covering an unsuccessful search? (4:26) - Is it a conscious part of your process to present both sides of an issue in your writing? (5:45) - What was your experience like going from a CEO to academia? (8:39) - What were some challenges you faced as a CEO? (13:49) - In your experience, did you find your workload felt reduced as you grew different departments? (15:20) - Is work-life integration as a CEO possible? (18:03) - Are there any CEOs you know who have achieved this balance? (19:39) - How do you think about the ROI of your time spent as an investor, professor, and content creator via research papers? (25:52) - You said it takes 5 years to be a successful CEO, would you say it takes the same amount of time as a professor? (27:04) - What are some best practices for being an effective professor? (30:20) - What moments as a professor bring you the most joy? (32:02) - How do you help students think by asking them questions? (34:25) - For someone in the process of selling their business, how would you recommend testing out the waters of academia? (37:59) - What were some interesting observations you saw in students after they went through the Search Fund curriculum?  (43:20) - For students wanting to pursue Search, what roles were most effective in helping them feel ready (48:41) - Do you have any desire to turn your papers into a book one day? (49:55) - Do you find there are any themes that come up consistently in your writing? (52:15) - Do you get the sense more folks are thinking about work-life integration than ever before? (55:18) - What strongly held belief have you changed your mind on? (57:42) - What’s the best business you’ve ever seen?

My guest on this episode is Jamie Shah. Jamie worked in investment banking and Google before returning to her family's business, Chem-Impex International, which manufactures materials for life sciences companies, as VP of Operations. Today, she is the managing director at the company and a professor at Chicago Booth, where she teaches a course on family business. Our discussion focuses on lessons to be learned from family businesses, which are more trusted and stable and generate higher returns. We talk about what success looks like in failing businesses, the balance of paradoxes, and how to apply principles that make family businesses successful to all companies. Listen weekly and follow the show on Apple Podcasts, Spotify, Google Podcasts, Stitcher, Breaker, and TuneIn.  Links: Connect with Jamie HeartlandHopeMission.org/Christmas Jamie on LinkedIn Chem-Impex International Kauffman Fellows Lee Kum Kee Family Business as a Paradox by Amy Schuman, John Ward, and Stacy Stutz Unconventional Wisdom by John Ward Succeeding Generations by Ivan Lansberg The Three-Circle Model HBR: What You Can Learn From Family Business The Five Dysfunctions of a Team by Patrick Lencioni Topics: (2:46) - Jamie’s background and career with Family Businesses (9:46) - How do you feel like your family’s business is run compared to others? (11:12) - What was the most interesting Family Business you learned about at Northwestern? (13:24) - Why do you think there are such high levels of stability, trust, and returns in Family Businesses? (15:54) - The boring aspect of Family Businesses (18:53) - What are some observations you have about the different paths within entrepreneurship? (22:01) - What are some examples of different business goals within Family Businesses you’ve studied? (25:00) - What are some paradoxes you’ve identified in Family Businesses? (28:38) - How does your Family Business deal with being uncomfortable in these paradoxes? (30:16) - Do you think conflict is good because it forces clarity? (31:20) - Which benefits of a Family Business would be most replicable to other styles of businesses? Which would be most difficult? (34:29) - Why are Family Businesses cautious to take on debt? (38:35) - How often is the CEO of a Family Business a member of the family? (40:44) - How do Family Businesses navigate liquidity, control and capital? (42:24) - What strongly held belief have you changed your mind on? (43:39) - What’s the best business you’ve ever seen?

My guest on this episode is Nevin Raj, Co-Founder and COO of Grata. Grata is a fascinating data software business that takes in all available public information about private companies, such as their website, LinkedIn, funding data, PPP data, and so much more. It then uses that data to create the most accurate profile of that company in their industry, headcount, business model, revenue range, and more. Nevin and I talk about the categories of data businesses and where he sees data businesses evolving into, how to accurately estimate the revenue of private companies and how the best investors do it today, and how to build a data software business. Listen weekly and follow the show on Apple Podcasts, Spotify, Google Podcasts, Stitcher, Breaker, and TuneIn.  Links: Nevin Raj on LinkedIn Grata Politico Pro Quorum Verisk Second Measure Transaction Data Economics of Data Businesses by Abraham Thomas Topics: (3:12) - What are your thoughts on data vs. workflow as business models? (7:30) - Do you see data businesses developing into more of a ‘wisdom’ category of companies? (13:42) - Can you walk us through the different types of data businesses? (22:53) - How would you describe a workflow company? (24:37) - Within your business, can you walk through the different ways you can get data from private companies? (27:52) - What are some of the data sets that correlate most with revenue size? (30:04) - How do the leading investors you’ve studied or worked with historically estimate the size of a company? (32:14) - How much do you balance measurable data and intuition? (34:51) - How do you integrate the data you have with your client’s software and workflows? (38:11) - What were the early days of Grata like and what did growth look like? (41:27) - What second-level data sets do you want to add to Grata over time to build a moat? (44:13) - Do you think eventually most data businesses will become workflow businesses? (46:49) - What’s a strongly held belief you’ve changed your mind on? (49:18) - What’s the best business you’ve ever seen? (50:56) - Are there any insights you’ve gleaned from ZoomInfo you want to apply to Grata?

I'm very excited to share that starting today Think Like An Owner will now be publishing episodes twice per week. This change coincides with our decision to close the Operators Handbook and move those topic-specific conversations to the podcast for Thursday morning episodes. You can expect these episodes to focus on topics like sales, culture, hiring, debt, capital allocation, leadership, board meetings, and dozens of other topics. This is an addition I've wanted to make for a long time, and I finally feel like the podcast is ready to go to this next level towards our endless pursuit of better in small business. The second episode also means we have more availability to partner with great companies serving operators and investors through podcast sponsorships. If you're interested, please send me an email at alex@jointheoperator.com or connect with me on Twitter or our website alexbridgeman.com. I'd love to chat. Jessica Markowitz, President and COO at Paragon Legal, kicks off our new topic-specific episodes. Paragon offers outsourced legal services to corporate legal departments, which Jessica and her partner Trista Angele acquired in 2018. Our conversation covers all things culture, including defining culture, maintaining and enforcing culture, and how to build a culture in a remote-first company. Enjoy. Listen weekly and follow the show on Apple Podcasts, Spotify, Google Podcasts, Stitcher, Breaker, and TuneIn.  Links: Jessica Markowitz on LinkedIn Paragon Legal  Topics: (2:58) - What is the purpose of Paragon Legal? (5:10) - What values do you view as incomplete and what are some complete ones? (9:47) - Is there one value that you see as most difficult to live out? (11:55) - What are some of the most recent adjustments you’ve made to Paragon’s values? (13:31) - How do you sus out whether someone will live out your values in the interviewing and onboarding process? (16:42) - Do you have some way to quantify an employee’s alignment with values during performance reviews? (17:54) - How do you maintain and communicate values to the team? (19:33) - Have there been any particular challenges with enforcing values? (23:03) - How have you approached building a culture in a remote-natured company? (29:07) - What are you considering adding or changing concerning communication or trust building? (30:20) - How do you approach a situation where a team member is continuously not living up to the Paragon values? (31:59) - What are some other benefits you’ve seen from focusing so much on values and culture? (34:04) - Have you found any way to accelerate the process of building trust with a new employee to be open and honest with management? (37:38) - Do you view the act of building a strong culture allows you to trust your team much easier in terms of delegation? (39:30) - Where are you focusing on improving right now in terms of culture? (43:05) - Do you have a strongly held belief you’ve changed your mind on? (44:02) - What’s the best business you’ve ever seen?

My guest on this episode is Trevor Flanagan, COO of Flint Group, a home services roll-up founded by Collin Hathaway. Collin’s appeared on this podcast twice, on episodes 32 and 90, for good reason, and I highly recommend listening to those episodes as a primer for this conversation with Trevor. Trevor has a fascinating background as I'll touch on earlier in this episode. He started his career as a district manager for Aldi before becoming GM of Bob Hamilton, a home services business in Kansas City. He then left and co-founded Professional Chats, which offers website chat software to home services businesses, before selling it two years later. In those two years, he and his co-founder grew it from 3 to 150 employees and nearly $10 million in revenue. Soon after selling, he met Collin and joined Flint. Our conversation covers how great companies scale, how crucial of a role sales and hiring play in scaling, the role of debt, and everything in between. Like Collin, Trevor has an amazing ability to make hard problems simple and teach through storytelling and I'm positive you'll enjoy hearing his story. Enjoy. Listen weekly and follow the show on Apple Podcasts, Spotify, Google Podcasts, Stitcher, Breaker, and TuneIn. Links: Trevor on LinkedIn Flint Group Predictable Revenue by Aaron Ross Episodes 32 & 90 with Colin Hathaway Topics: (3:40) - What’s your career been like scaling companies across different industries? (10:24) - How were you able to land a job managing a grocer at only 22? (14:27) - What was the most common issue these different Aldi locations were struggling with? (16:54) - How did you set up systems when you co-founded your first company? (23:23) - Where did your growth in the first 18 months come from? (26:13) - How did you eventually get to Flint? (28:55) - What’s scaling been like at the PE level? (31:07) - Of the companies, you’ve seen, is there a consistent theme as to why they don’t scale? (33:21) - How do you adjust cultures as quickly as possible without breaking things? (34:37) - How do you figure out what KPIs are most important for certain roles? (35:54) - Once you have established a culture and KPIs, what’s next to accomplish to scale? (38:00) - Do you have a case study example of a formula that works for scaling? (40:29) - Do you hire first before tackling marketing? (42:44) - What are some of the most challenging parts of the sales side of these businesses? (47:57) - How do you identify potential Salespeople and how do you design the training process? (49:27) - What’s your philosophy for compensation and incentivizing Salespeople? (50:51) - What’re your thoughts on scaling in terms of cash flow? (53:43) - What other impediments to scaling are top of mind for you day to day? (55:15) - What are you most excited about for Flint over the next 2 years? (56:05) - What’s a strongly held belief you’ve changed your mind on? (57:25) - What characteristics of folks make them desirable to work for? (1:00:10) - What’s the best business you’ve ever seen?

My guests on this episode are Paul Yanchich and Ryan Beaver. Paul is a co-founder of Arcadea Group, a vertical market software holding company that Paul and his co-founder Daniel raised $320 million to found 14 months ago. In this episode, Paul is joined by Ryan who serves as managing director of value creation and operations. Our conversation acts as a part two to our first episode with Paul and Daniel, episode 84, and breaks down learnings from 14 months of activity, lessons learned, where software acquisitions see the most improvement partnering with Arcadea, and evaluating management teams for the long haul. Enjoy. Listen weekly and follow the show on Apple Podcasts, Spotify, Google Podcasts, Stitcher, Breaker, and TuneIn. Links: Arcadea Group Paul Yancich On LinkedIn Ryan Beaver on LinkedIn Episode 84 on TLAO with Paul Yancich and Daniel Eisen The Outsiders by Will Thorndike Topics: (3:04) - What have been some early learnings as first-time investors and founders? (5:50) - In what ways are you efficient with Arcadea and where do you focus your resources? (9:42) - What do the first 1-2 years look like after closing? (16:38) - What are some other ways you create value and make it collaborative with CEOs that join you? (20:53) - What parts of a software business have changed and what’s stayed relatively the same? (24:46) - When you look at software companies today, what are the most common technical best practices missing? (30:56) - What are some key learnings you’ve had from chatting with folks like Will Thorndike and Mitch Rails? (37:47) - What makes founders excited about Arcadea over other potential acquirers? (40:04) - Do you have any ambition to be a public company?

My guest on this episode is Juan Ruiz. Juan is the founder of CommunEtA, the first-ever student-led search investment fund. The goal of the fund is multifold: provide exposure and training for students wanting to build a career in search, provide a grassroots investment option for searchers, and spread the word about search across the country. We start off the episode discussing a few student-run funds on the venture capital side that inspired CommunEtA and round out the conversation with topics like building a team of students that are constantly joining and graduating, the power of search to transform someone's career, and how search might evolve in the future. Enjoy. Listen weekly and follow the show on Apple Podcasts, Spotify, Google Podcasts, Stitcher, Breaker, and TuneIn. Links: Juan Ruiz on LinkedIn Entrepreneurship Through Acquisition Student Club Blue Road Capital Severance on Apple+   Topics: (3:32) - What models did you study for this dorm room-style fund for the VC world? (6:52) - What kind of oversight is there from the University staff? (8:15) - What’s the process for creating systems around the fund given the high turnover of graduating students? (10:07) - What was the inspiration for the fund and the mission, vision, and value behind it? (13:36) - What was your background prior to your MBA at Harvard? (18:40) - What’s the interest level you’re seeing from students toward Search Fund Investing? (21:50) - What do you view as the main goal of the fund? (26:53) - What’s the involvement of students in the fundraising process? (27:46) - What will your role be for Commune ETA going forward? (29:06) - What are some roles and jobs for students in the Club? (30:24) - Is there any conflict of interest with students helping to run a Fund while also pursuing Search? (32:08) - Do you plan to expand this club to other MBA programs? (33:22) - If this club was in 5 schools, what would the investment committee look like? (35:08) - Do students get paid? (35:25) - What are some of the different compensation models you look at? (35:55) - What challenges do you foresee with growing this club across other universities? (36:55) - How many students do you need to have quality output? (37:59) - Evangelizing Search (42:26) - What college class would you teach if it could be on anything? (44:43) - What strongly held belief have you changed your mind on? (46:52) - What’s the best business you’ve ever seen?