Think Like an Owner

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?

My guest on this episode is Alexis Grant. Alexis and I have gotten to know each other through our mutual interest in media and our two small but growing media companies. We share thoughts, ideas, and advice back and forth all the time, and I'm excited to finally record one of our conversations. Alexis founded a blog management company that was acquired by The Penny Hoarder, which then sold and gave her some starting capital for The Write Life, which she ran for a few years before selling that business too. Now she's founded They Got Acquired, a media business covering small online business exits with a growing newsletter and data product. We discuss all things teams, products, creating content, and one of my obsessions: the convergence of media and high-end products like data. Please enjoy this wonderful episode with Alexis Grant. Listen weekly and follow the show on Apple Podcasts, Spotify, Google Podcasts, Stitcher, Breaker, and TuneIn. Links: Alexis on LinkedIn They Got Acquired The Penny Hoarder AirTable The Hustle Ben Collins Google Sheets Training StyleBot.app Topics: (3:46) - Alexis' career journey (8:52) - Why do you think 'They Got Acquired' would be a more interesting business to run? (9:40) - What issues did you run into in previous roles? (11:01) - What is They Got Acquired? (14:16) - How have you approached building your team? (16:18) - How do you determine what tasks you'll work on vs. delegating to the team? (18:40) - Do you try to focus on revenue-generating tasks over content or operations-related tasks? (20:17) - What next task are you looking to delegate? (23:41) - What role will you fill for your first full-time hire? (24:28) - What would a full-time writer be able to accomplish that you can't right now? (26:04) - Is the research team for the database different than the writing team? (27:14) - How do you ensure the media and date sides of the business interact with each other? (30:04) - Are there any companies you find interesting that have a media arm alongside a high-end product? (32:40) - Have you seen a media business buying a company that sells products best suited for its audience? (36:05) - Have you thought about an event strategy at some point? (37:05) - How do you think about competition in your space? (41:52) - How do you balance what you want to do with your business vs. customer feedback? (42:21) - What are you most excited about over the next 24 months? (43:04) - What college course would you teach if it could be about anything? (43:43) - What's a strongly held belief you've changed your mind on? (46:37) - What's the best business you've ever seen?

My guests on this episode are Kurt Leedy and Kyle Coots, co-founders and managing directors at Miramar Equity Partners. Kurt and Kyle have an interesting vantage point in the search world being backed by a family office with an agnostic time horizon, allowing them to invest in the widest set of opportunities in search and parallel spaces. Our episode focuses on a concept they developed they call the three ways to make money, those being classic LBO, M&A-driven strategies, and organic growth. We dive into the characteristics of each along with a few examples from their portfolio. We also touch on how the intersection of two or more methods can create exponential outcomes. Finally, we discuss a few theses they find interesting in healthcare and software and how they develop a thesis on an industry. Listen weekly and follow the show on Apple Podcasts, Spotify, Google Podcasts, Stitcher, Breaker, and TuneIn. Special thanks to our sponsor: Oakbourne Advisors Links: Miramar Equity Partners Kurt Leedy on LinkedIn Kyle Coots on LinkedIn Will Thorndike with Patrick O'Shaughnessy BPD Zenith Flint Group Swoogo Encore Infusion Constellation Business Breakdowns - The NFL Time Codes: (3:36) - How did your backgrounds help form this concept of "The three methods to make money"? (9:18) - Do you have a model of investing that resonates most with what you're looking to accomplish? (12:24) - Have Search CEO's been primarily focused on one of these three buckets in your experience? (15:51) - What are some characteristics & examples you've seen of the Classic LBO investing model? (18:36)- What questions or risks are you optimizing for when considering LBO? (22:13) - What are some factors that have correlated with a high retention rate in companies you've observed? (24:23) - Can you walk us through how you divide M&A Driven Strategies into its two subcategories: Roll-Up and Transformative? (33:46) - Is there some value in having M&A experience for a CEO & their company? (35:42) - Why do you think there is such increased popularity in the M&A strategy within Search? (39:00) - Which companies and characteristics fall under the Organic Growth Model? (46:00) - What are some examples of companies who have combined these methods and found success? (51:10) - What are your thoughts on Software businesses and any opportunities in that space? (54:40) - What are some ways you develop and validate different theses? (1:01:19) - What strongly held belief have you changed your mind on? (1:03:32) - What's the best business you've ever seen?

My guest on this episode is Adriana Garcia Ceja who recently launched a traditional search fund backed by Footbridge Partners, Pacific Lake, and others with a primary focus on the healthcare industry. Adriana brings a ton of experience to her search, including corporate development at Home Depot and a head of special products role at Applied Concepts, a search fund backed company, during her gap year in her MBA at Harvard. We talk extensively about lessons learned at Home Depot, including the many mentors she's had along the way, how to be an entrepreneur in a big company, picking the right search fund model for you, getting hands on experience prior to searching, and how we can encourage more women to become searchers. Listen weekly and follow the show on Apple Podcasts, Spotify, Google Podcasts, Stitcher, Breaker, and TuneIn. Links: Adriana on LinkedIn Bolivar Health Applied Concepts Flying Magazine Topics: (2:37) - What are your considerations when looking at different options in your Search? (5:13) - What factors did you weigh when looking at investors? (7:33) - What advice did you get from people to help you prepare mentally for Search? (9:23) - What motivates you to be so interested in the healthcare industry? (11:05) - What was your experience like working at the corporate level at Home Depot? (18:14) - Being Entrepreneurial in a Big Company (20:19) - Where are the similarities you see in service, retail, and healthcare? (22:13) - What observations did you make in hiring, training, and management from Home Depot that could be applied in an acquired healthcare business? (26:07) - Where do you draw the line in a Search when it comes to a culture that might be too far gone? (30:40) - What was your experience like at Applied Concepts? (35:15) - What challenges did you encounter as a woman in a male-dominated industry? (37:44) - What will it take to balance the cohort of Searchers? (42:37) - Who are some female role models that you admire? (44:16) - What are you most excited about in your first year as a Searcher? (45:37) - What College class would you teach if it could be on anything? (46:27) - What's a strongly held belief you've changed your mind on? (48:42) - What's the best business you've ever seen?