Episode Transcript
[00:00:00] Speaker A: Welcome to the Independence by Design podcast where we discuss what it means to be a business owner and ways to get unstuck from the day to day so we can design a business that gives us a life of independence.
One of my favorite things about doing this long form podcast is we get to dive into the actual details of someone's whole story. Because when I listen to a podcast, what I want to know is how are people making decisions based on what they want? Like what was obvious, what was not, what decisions did you made or did you make and then how did it go and then what would you have done differently? That's exactly why I was so excited to have my friend Tom Nagler on the show today. I've known him for years and I was in the trenches with him when he was making some of the hardest decisions that he's made. And we spend time going all the way back to how he joined the family business, how he went through the buyout with his dad, how he ended up growing the company and juggling cash flow, had an out of the blue offer, he ended up not taking that, and then growing the company, acquiring a business partnership stuff, and then the decision to actually sell and then what he's doing afterwards. So it's a full story arc. And I have to say that Tom is one of the most thoughtful people I've met. He really felt the weight of every decision, did everything he could to get all the information in front of him, clarify his goals, and then went forward with his decisions without regret. And, and he spent a couple hours with me reflecting on that journey and it was an honor to be able to, to share the story with you because I just am so grateful for Tom and the time that he spent sharing what he went through and what he's learned from his journey. So I really hope you enjoy the long form conversation with Tom and the full story arc. If you want to go check out the newsletter that I've been publishing, it's Ryan Tanson dot com. I got some material out there on business valuations and I hope you enjoy this podcast with Tom.
Look at your smile. This is gonna be fun, man.
[00:01:57] Speaker B: Surprisingly nervous, man. I've known you a long time, but.
[00:02:02] Speaker A: Yeah, isn't it funny? Like I can't even imagine what it'd be like to go on rogue. And when he hits record, my God, I think I'd myself, yeah, like attack. I remember when I first, when I did my first, when I did my first presentation in front of like keynote in front of people, Tom, I literally Got up and I just stared. I just, like, utterly, like, completely, like, who is this idiot? Why is he up there sweating? What's he. What's he doing?
[00:02:26] Speaker B: Before the call, I was like, let me put some spreadsheets up on my other monitor so I feel more comfortable, you know, like, all this stuff over here so that I could, like, be comfortable, you know?
[00:02:37] Speaker A: Well, like, as we jump in here. So I.
I'll just tell you. I want to tell you a story because I. I've been thinking about, like, how we want to do liftoff of your journey is.
There were. So when you and I were on our coaching calls years ago.
[00:02:52] Speaker B: Yep.
[00:02:55] Speaker A: The reason I enjoy our relationship is because you were like, you were going through the material, Tom, and you were like, racking your brain with, like, what path do I go?
What do I do? And, like, the amount of emotions that you were experiencing. Just, like, it was so fun to be in that moment with you, man. Like, as in, like, just sitting there, holding it, going, like, there's a lot of. On my shoulders here, and I, like, a lot of, like, ramifications depending on, like, what I do with myself.
[00:03:31] Speaker B: Yeah.
[00:03:31] Speaker A: Business. And like, how seriously you took. That was why I, like, why I like you. It was like, here, you didn't.
You thought so hard about it. So anyways, like, I just wanted you to know because I don't think I'd shared that story with you of how.
How much I know you think about the outcomes.
[00:03:50] Speaker B: Yeah.
[00:03:51] Speaker A: It just. You're a very thoughtful person, and I just wanted you to know that given it's been a few years and you made decisions that, you know are in stone now. I just know how hard you thought about it, how much work you put into it.
[00:04:02] Speaker B: So.
[00:04:03] Speaker A: Yeah, you should be. You should be proud, man.
[00:04:06] Speaker B: I appreciate it, brother. Yeah. And, like, right place. Right. Like, we. We, like, I. I met you and yes, I was ready to do that work. Right. Like, and it's a business, but it's also like, when it's family, which I know. You know, and.
And then it's like you add decades worth of. Of personal sunk costs in there as well. Right. Like, there's all this, like, sense of belonging and importance and meaning and. And these larger things kind of attached to that, to the business itself. You know, it's really not just the business. And you guys, you had your finger on the pulse of that and helped walk me through.
[00:04:42] Speaker A: It's so fun, man. It was really fun to be in it. Really fun to be in the trenches with you. And so I. What.
[00:04:47] Speaker B: I.
[00:04:48] Speaker A: You know, for our conversation, I think what we could do is take the story arc. I want to hear, you know, I think the audience.
[00:04:55] Speaker B: What.
[00:04:56] Speaker A: What I would love for the audience and for, you know, as we go through this is like, what kind of thinking you went through, what was the journey? And like, I mean, like, because you ended up selling the business.
[00:05:06] Speaker B: Yep.
[00:05:07] Speaker A: It wasn't obvious at all for you of what you were going to do with the business, but, like, what was the bit, like, let's just start kind of high level. Like, what was the business? And you know, family, you know, family business. And then what. What led you to me? And like, how did. How did that kind of triggering event happen?
[00:05:22] Speaker B: Yeah, sure. So. So my business was natech plastics. We were a contract manufacturer. Our primary technology was injection molding. So it was basically plastic centric execution of client designs.
Over the course of, like, the sale happened in July of 2023. And over the course, I would say the last 15 years, we focused almost exclusively on, like, the medical market.
I started there. This was my. This was. It was a family firm. My dad started it.
[00:05:51] Speaker A: What year did he start it?
[00:05:52] Speaker B: He started in 1998, but it was. It was the second iteration for him. He had built and sold an earlier version of the firm, and so he was like a career entrepreneur. He got done polishing every brick around the house, and my mom basically kicked him out.
[00:06:09] Speaker A: Like, you're annoying me. Go do something.
[00:06:11] Speaker B: Yeah, he's probably like my age now, like early 50s. He sold and exited. It was like mid-90s. He like stayed home for maybe, maybe a year, maybe 18 months and just couldn't sit still anymore, you know.
So. Yeah, and at the time, I just graduated school and I had. I had a, you know, like, starting my career. I was a few years into my career and it was like a fork in the roads in, like in late 99, early 2000, where he had just sort of gotten natech off the ground, real grounded. Pound, like less than a million in sales. Four machines. It was like, you know, looking back on it, it's just. It's just crazy where we went from that, from that early.
[00:06:48] Speaker A: So did you, like. I'm curious, Tom, like, did your, like, what was your exposure to like, entrepreneurship?
Like, because, like, for my mind was like my. Because the same situation. My dad started business in 99 or 97, and it was like 9 o' clock at night. He'd come home and I'd hear the war stories.
[00:07:05] Speaker B: Totally.
[00:07:06] Speaker A: And that's where. And that's where I kind of got a little bit of my fix of, like, huh, he's going and eating and, like, we can actually, like, design our own destiny. But, like, how did you get exposed that with your dad?
[00:07:15] Speaker B: Yeah. Like, I love, like, in retrospect, I love the way I grew up on, like, that area of. Of my upbringing. It was like my dad brought the business home with him. Like, we all knew. Like, did the shop have work? Shop not have work.
If the shop didn't have work, you better run. You know what I mean? Like, that.
That's the story, I'll say for my therapist. But, like, you know, like, and, like, when he has successes, like, when he got a big job or, like, he would share that with us. Like, we were excited as a family of, you know, big family of three sisters and a brother. So it was like, it was very down home, man. And injection molding, I don't know. Like, most people know it from, like, when you build models. Have you ever got a model kit and it comes on the runner. Well, the pieces.
[00:07:56] Speaker A: Because I never. I never got to visit your shop, but there's a plastic injection molding company in the Twin Cities, Sport Tech. Ever heard of that company?
[00:08:03] Speaker B: Y. Yeah.
[00:08:04] Speaker A: Chris Carlson's been on the podcast, the founder. And so he started, like, you know, with the plastic injection molding of the snowmobile shields. And when I went in there, Tom, like, he had freaking. Because they. They do all the plastic injection molding for the side by sides and, like, ridiculous wood. Like, what do you call those things that you. The casings and stuff like that?
[00:08:21] Speaker B: Oh, the tool.
[00:08:22] Speaker A: And just like. Yeah, just wild shot, man. Just like, how fast they grew.
[00:08:26] Speaker B: And so there was like. There was like.
Basically, like, they would come on like, a runner, which is like.
Like a car. Like a plastic carrier, and parts would need to be broken off and separated. This is a very old school. It's no longer like this a lot, but. But, like. So my dad would come home with, like, boxes of the raw parts, and basically we'd all sit around the kitchen table. We had wicker baskets, and we'd separate the parts off of the wrong. And you get $2 a box. $2 a box.
[00:08:52] Speaker A: Slave labor, baby.
[00:08:53] Speaker B: And you couldn't start until you finished your homework. So, like, we. We would, like. I. I would not. All my siblings. I.
That in me where it was like, the idea of filling up, like, my piggy bank with those $2 was, like, so strong in me early on. So I think that's part of my nature. You know what I Mean, in some sense. Yeah.
[00:09:09] Speaker A: That's so cool.
[00:09:10] Speaker B: So it was very. It was very intimate, you know, the growing up. And it was very much a part of, like, our family and. And me as his oldest son. It was like, I took to that like a fish to water, you know.
[00:09:21] Speaker A: So when you graduated then, and it's like a million dollars in sales, like, did you have other opinions, like, other opportunities? Like, how was it obvious or not obvious to go work with your dad?
[00:09:30] Speaker B: I did. It was not obvious.
[00:09:32] Speaker A: Like, we.
[00:09:32] Speaker B: We didn't. I did not get along with my dad as a teenager or in. Or in college. Right. And it was like, there's no way I'm doing this was kind of where I was at mentally in my early 20s, you know, and. And I. And I had five years and I graduated in 95, 96 area. I had. I had a few years under my belt. I had, like, a good job. I was in sales for, like, a large, like, international company and doing well. I had prospects there, you know.
[00:09:56] Speaker A: Yeah. What were you selling?
[00:09:57] Speaker B: I was selling rolled steel coil out of Japan. I worked for a Japanese trading company, and so I spent a lot of time. I've been in factories my whole life. Like, I was all over the Midwest at steel service centers, basically taking Japanese businessmen around the Midwest selling roll steel coil to, like, service centers and people that supplied the big three.
[00:10:17] Speaker A: That's awesome. And then we were over there talking copiers.
[00:10:20] Speaker B: Yeah, yeah, totally, totally. You know, don't pull up into Ford with driving a Honda. You know what I mean? Just don't. Don't do it, you know?
[00:10:28] Speaker A: That's awesome.
[00:10:29] Speaker B: So. And it was like, okay, I would. I. Oh, it.
This. Thanks for letting me talk through this. I appreciate you. The.
I applied to business school at the time I was 26.
I applied to, like, the top six business schools. I was like, big or bust, right? I got rejected from all six.
[00:10:50] Speaker A: Jokes on them now, Right?
[00:10:51] Speaker B: Yeah, I got rejected from all six.
My. And. And at Marabeni, I. I basically like you. I solicited from them like, hey, man, I want to work in a foreign office. I want to work in Brazil. Because I had my. My buddy lived in Brazil. And like, I had an imagination around Brazil somehow.
[00:11:07] Speaker A: You know, he had somebody like, erotic, beautiful place.
[00:11:10] Speaker B: Exactly, exactly. And they. They were like, you can't go to Brazil, but you could go to Tokyo. This was like December of 1999. And my dad at the same time had just started, you know, like, he just got NATO off the ground. He was like, do you want to Come work for me. And. And that. That was it, man. I could have, like, went left and went to Tokyo and been, like, international business person. Or went right and I went to Ron Comkomo where I was ordering my own toilet paper. You know.
[00:11:34] Speaker A: This is where it's so fascinating. Like, I. I call those, like, the timeline splits in the simulation.
And there's this other world. I'm like some, you know, corporate. Exactly.
[00:11:43] Speaker B: In another world, I could speak Japanese fluently. And, like. Yeah, like, I'm like, yeah, exactly, exactly.
[00:11:49] Speaker A: Oh, that's awesome.
So, like, I resonate so much with how you and your pops and, like, all the dynamics and, like, I was like, no way in hell going to work.
[00:11:58] Speaker B: Yeah.
[00:11:59] Speaker A: And because, like, him and I are like oil and water. Just two alpha males. And, like, there's not enough oxygen in the room for both. Handsome.
[00:12:05] Speaker B: And that's exactly it. Yeah.
[00:12:08] Speaker A: Like, the world took a. And I graduated during the financial crisis, and I was like, all right, fine. It's like, yeah, like, what led it you to actually wanting to do it? Did you see an opportunity? Do you think it was gonna be yours? More money? Like, what was the deal?
[00:12:22] Speaker B: Look, man, I mean, like, you said, like, the oil and water part, like, the best part about a family business is trust, right? Like, I know that my dad has my best interests at heart, right? And, like, when we would make decisions, like, we would go head to head on decision making, like crazy. Right? But, like, in the end of the day, you could put that question of trust aside. Right? And, like, where in business are you able to do that? I mean, I. I come to find that in. In many places nowadays because I'm a different person. I'm. I'm capable of trusting, but I. I think it's different. What's that?
[00:12:59] Speaker A: Family's different, though. I mean, I'm tracking what you're saying.
[00:13:01] Speaker B: Yeah, it's different. Yep.
[00:13:03] Speaker A: Yeah, it's. It's interesting that you recognize that. That early.
[00:13:08] Speaker B: I don't know that I recognize that. I think also, like, I always.
I wanted my dad's approval, you know?
[00:13:14] Speaker A: Like, no, I do know. Like, I am. It took me many, many decades to go, like, you're gonna love me no matter what. So fine. Like, yeah, like, yeah, like, by the.
[00:13:24] Speaker B: Way, my dad passed away in 2016. I find myself still looking for his approval. You know what I mean? So it's like, oh, have you ever.
[00:13:30] Speaker A: Done the love languages thing? Yeah. Yeah. I'm like, I'm raging. Affirmation, and I'm, like, raging.
Like, just, like, I Said to my wife, I'm like, all you have to do is be like that a boy and I will run through walls for you. And like dishes those out like barely ever. And I'm just like. So when I get it, it's just like. Yeah. But yeah, I think a lot of this comes from the childhood, right? Like just. That's awesome.
[00:13:57] Speaker B: So I used to say my dad gave me a compliment once back in 1986, you know what I mean?
[00:14:05] Speaker A: It was enough to suck you into the business.
[00:14:07] Speaker B: Yeah.
[00:14:07] Speaker A: How many boxes do I got to fill, man?
[00:14:09] Speaker B: The carrot just out of reach. It was like, oh, like I got the order. And then it was like, where's the deposit check? I got the deposit check. Well, now you have to make the order. Like, I made the order. Like, are you sure they liked it? You know, like, literally. Oh, that's awesome.
[00:14:22] Speaker A: So I came back from like one of my first sales calls.
[00:14:24] Speaker B: Tom. Yeah.
[00:14:25] Speaker A: And I mean like, it was a big effing order. Like I'm 22 years old and I come back and I'm like, let's talk about it.
[00:14:34] Speaker B: How, what was the order? Let's hear it.
[00:14:35] Speaker A: Well, I hit quota in the first six months, so I almost, I was five. So two parts of this, right? And this is not about me. I want to go back. So.
[00:14:43] Speaker B: Yeah.
[00:14:44] Speaker A: So first six months in the guy in the job, I'm in the bullpen and it's like, you know, I work hard, twice as hard as everybody else, like, to make sure they don't think you're entitled prick or you just like. Or you just wear the entitled prick suit. And.
[00:14:58] Speaker B: Yeah.
[00:14:58] Speaker A: And so it's like sell as much shit as Everybody. I hit $295,000 in quota in six months, which is an annual quota. And they wouldn' me go to president's club.
I was like, f off. Like I sold literally a year's worth of in six months. And so I, I got back with this order and I was like, it was geodime. It was like, I think it was like 300 and some thousand bucks. And the big, I come back, I was like, I got the verbal on this deal and my dad goes, show me the paperwork. I was like, well, I, I mean it's a verbal. He goes, good luck paying your mortgage with a verbal.
[00:15:36] Speaker B: Yeah, yeah, yeah, yeah. I, I look, man, I got an exact. I'll never forget. It was like exactly the same thing. Was like a four hundred thousand dollar tooling order. It was like our biggest tooling order ever as a company. And I was like, I got the order. And he was like, you don't have it until the check comes in. You know, I got.
[00:15:54] Speaker A: I was.
[00:15:57] Speaker B: Maybe you identify with this one, too. Like, my mom called me at night to tell me that he was proud of me.
You know what I'm saying?
[00:16:06] Speaker A: Yeah.
[00:16:07] Speaker B: My mom called me that night because he knew he had crossed the line. Because, like, I just was furious, man. You know what I mean?
[00:16:12] Speaker A: Yeah. Give him a bone. Come on.
[00:16:14] Speaker B: Yeah.
Hey, you know what, man? It's like, today I can, like, enjoy my successes as they happen. Right? I don't need to, like, to, like, put that carrot out on myself, you know? And, like, we're all contextual, right? We come from somewhere, and he was also contextual. Right. And, like, we pass on what's given to us.
So the beauty of it is, like, we get to write our story as we go.
[00:16:41] Speaker A: You know, I think the. The. You know, you're 100% right. Time. And the reason I want. I love starting with the backdrop because, like, all of these decisions led up to, like. I can picture that moment, like, yesterday, just how much you're toiling on what do I do with my path.
And it's all of this stuff that goes into it and all the history. I mean, it's. It's so in one part, you're speaking Japanese, and you're. Yeah, you're in Tokyo, and. And then this is another timeline split.
[00:17:14] Speaker B: Yeah.
[00:17:15] Speaker A: So, like, what a.
You know, at a million bucks, you start. And, like, what. What was the journey like, man? Like, as you were growing the business, like, what was the dynamic with your dad and you and, like, you hear me talk a lot about operations versus ownership and, like, how, like, my dad and I had no clarity on any of that stuff. How did you guys navigate your relationship and the operations and the strategy?
[00:17:35] Speaker B: We were great partners, man. I. Great partners in terms of, like, skill split, you know, like, he. He was fantastic on the shop floor. Like, basically the best engineer that I've ever met. Hands down. Incredible designer as well. So, like, really super creative.
I can. I can run with that too. But, like, the areas where he was. Was. Was. I would call it disinterested in.
You know, he. He was a good closer, but he wasn't necessarily. Like I said, like, I. I knew how to, like, get the clients I. I was capable of. I don't love this scope of work, Ryan. That's why I hesitate to even go down this direction mentally. But, like, I was good at, like, process oriented. I'm good at That I hate it, but I'm good at it. Like, I like the computer and data and all that stuff. I call it finding the nickel. Like, I'm really good at finding the nickel. But it, like, it's the worst part of me. I get out of that activity and I'm just like, ah, like, yeah, you've.
[00:18:33] Speaker A: Got spreadsheets up on the monitor to keep you comfortable.
[00:18:35] Speaker B: Yeah, totally. Yeah, exactly, Exactly. And like, he, he knew to like, he encouraged me to educate myself. I did wind up like, so then 10 years, like in 2008, I did wind up going. I, I like, went back to business school.
[00:18:52] Speaker A: Oh, did you really?
[00:18:53] Speaker B: Got my executive MBA in like 0809. And that was like, that was a big investment for the company.
And my dad had this, like, he had like, it was like every other weekend, every other Friday, Saturday for 22 months.
And he had this like. And it required like, a lot of work outside of the thing. And he had like, the list of the dates on, on next to his desk and he would like, cross out, cross out the dates. It was like a prison. It was like a prison wall, you.
[00:19:17] Speaker A: Know, like the tallies on a prison wall.
[00:19:21] Speaker B: So like, he, he knew to invest. Like, he himself might not have upgraded to those things, but he knew to invest in that and he knew to, to like, let me go and, and do my thing, you know?
[00:19:33] Speaker A: Interesting.
[00:19:34] Speaker B: So it was like, it was like real, real dichotomy where he would, like, push me forward, but at the same time be stubborn around certain things.
[00:19:42] Speaker A: What was the power dynamic of YouTube? Because, like, like, did you understand, like, sounds like the roles were complementary as your jobs, but, like, what was the conversation? Or lack of, or. I don't. As far as like, hey, this might be yours, Tom. What's the buy in? How does this work? You know, like, because, like, for my father and I, I mean, the whole reason I'm doing this 11 years later is I wish I would have had all this kind of clarity so we could have had good conversations around this.
[00:20:08] Speaker B: Yeah.
[00:20:08] Speaker A: What was the dialogue as far as, like, was there a bigger picture plan or a transition plan or anything in the works throughout the years?
[00:20:17] Speaker B: The transition plan was there. Transition plan meaning like, hey, you're gonna pay me, you're gonna.
He. He had his transition plan in mind.
He definitely did, you know, but did.
[00:20:32] Speaker A: It reconcile with your plan or it.
[00:20:34] Speaker B: Would change based on, like, what day it was? You know what I'm saying?
[00:20:38] Speaker A: Yeah, I do know.
[00:20:39] Speaker B: Yeah. Yeah. So it's like. And also, like, I only. I Only understand this now is like, I'm getting a little bit old. I. Believe me, I do not, like, own any age related limitations, but there is like a certain amount of like, energy level that you have at 30 that you just. It's. It gets less and less available, you know? Yeah. So he. So, you know, 10 years in at natech. Imagine like now he's in his early 60s and it would be like he would, you know, one day would be on fire and the next day would be like, do what you want to do, kind of.
[00:21:12] Speaker A: I.
Yeah, like, I used to have that. It was like, go do all this shit. No, don't do this stuff. We're selling the company. No, I don't want to sell the company. I need a big distribution. By the way, how come you haven't grown more? And I'm just like, I'm so tired and it's just like perpetual whiplash.
[00:21:28] Speaker B: Also, like, the. The. The way of running the business. Like, I talk about it a lot. It was like he. We would strip mine. The balance sheet, you know, And I know you. You love the. The three statement model and I love Columbia University. That taught me the three statements and taught me how to understand cash flow. And not just the income statement and the bank. And the bank statement. How much money do I have in the bank? And.
Right. Like you always talk about that. And that. That resonates so deeply with me. And. And also, like. Like the. The way that. That usually operates from a decision making perspective is like, well, when you get the thing, then we'll buy the thing.
Right.
Mm. And that works? It works. Right.
[00:22:11] Speaker A: So it doesn't.
[00:22:13] Speaker B: And. But it's. It's. It's like one of the ways where we diverged. Once I bought his shares, his final tranche of shares was I would make. I would make R and D based. I would make decisions based on strategy.
[00:22:29] Speaker A: So I want to get to that. But like. Okay, so you just. How was it pretty simple to go from your dad owns the business to tom owns the business? Or how did you actually. Like, how did you come up with a price and a payment terms and all that stuff? Because, like, before you even answer, Tom, what I used to get is, wait a second, you're gonna buy me out with my own cash flow? That sounds idiotic.
[00:22:50] Speaker B: Right?
Right.
[00:22:52] Speaker A: Well, I. I didn't. And I didn't have the verbiage to explain to him why that actually matters if he quit. If he quit his job. But. Yeah, how did you.
Your arrangement.
[00:23:01] Speaker B: Look, I. Well, first off, like, he he, he granted me like sweat equity along the way. Right. So I, so I was like a minority shareholder, a significant minority shareholder. I think like I had roughly 40% or something like that by the time like we made the deal for the final 60%.
And, and his, and my dad had like reasonable expectations. Like he was an immigrant, you know, he came from Germany, 1962. Like it seems crazy but like, you know, like he, he grew up with dirt roads and.
[00:23:35] Speaker A: Yeah.
[00:23:37] Speaker B: Needs remind like that, that I, you know, I'm so closely connected to like and farm. It was basically like a 2000 person farming town, you know. So it's like he had a very basic. For him, it was like about, about caring for him, about caring for my mother, about like a reasonable price. You know, sometimes he's reasonable, sometimes he won't. But, but I mean, ultimately, ultimately, like I'm super blessed, man. Like, he, he.
[00:24:03] Speaker A: That's so cool.
[00:24:04] Speaker B: Yeah, he, he respected. He, he, he knew. He, he knew what I brought to the table.
[00:24:10] Speaker A: He, it's that trust you were talking about.
[00:24:12] Speaker B: Yeah, he, he built me. He, he built me right. In some sense. And then I built myself.
I built on top of what he built. And so I don't have any complaints at all, man. Like, he treated me very fairly, but it was mostly like on yellow. On yellow legal paper.
[00:24:25] Speaker A: Like I do know.
[00:24:27] Speaker B: I want, I want, I want some spending money.
Make sure your mother has this right. Like and, and $8 million for the rest of.
Wait a minute, like, where are you.
[00:24:41] Speaker A: Getting my health insurance?
[00:24:44] Speaker B: Yeah, they cross it out and write 4 million. You know what I mean? It was like, it was like, you know, you just better feed them well and catch them on the right day. You know what I'm saying? Something like that. Yeah.
[00:24:55] Speaker A: It's like, hey, we're going to go hang out at the cabin to get you nice and like warmed up. And then I'm going to slide in the yellow pad.
[00:25:03] Speaker B: But I got, I got a folder full of like his yellow, his yellow sheets. I would come in, he would leave. He had a yellow pad. He had, he loved writing scratch notes on yellow pad. It was a skill to actually read his handwriting.
And, and it would be like, fire everybody, do this, do that, like collect the money from so and so, you know, like, like everything was like an exclamation point on the end of it.
[00:25:25] Speaker A: You know, everything's urgent, everything's.
[00:25:26] Speaker B: That would be like sitting on my desk when I got there in the.
[00:25:29] Speaker A: Morning, you know, it's like, oh, that's awesome. Did you Guys have.
[00:25:32] Speaker B: I loved working with him, man.
[00:25:33] Speaker A: Did you with Columbia and like with your education, you know one of the things.
Because now like why I love talking about these past stories because like over the journey of us learning this, we learn the. The concepts to use. We're like our jobs are in the income statement and the cash flow statement is where we have the debt service or owner's distributions.
[00:25:55] Speaker B: Like how did you strategy in there? Right, right.
[00:25:58] Speaker A: Yeah. Like how did you start thinking about that?
[00:26:02] Speaker B: I look at NATECH as like blocks of like blocks of time. Like the like 2000 to 2000, like 5 or so was like I call it like operations. Like we got our ISO certification which was like it's basically like a process based thing for manufacturer. That was again something that I really fought for. It gave. It was like a stamp of credibility. Like we implemented computer like at the time, like built our own database and we did all these operations things to make the company like more stable and efficient. Probably grew from like 1 to 4 million in sales, something like that.
And then the next phase was kind of like the people phase. And I stumbled around a lot like trying to build the team out and.
[00:26:44] Speaker A: What worked and what didn't work in that phase.
[00:26:50] Speaker B: When I think about what I can add to the universe, it's like I almost feel like that was like a 10 year journey that I could really help people get through quicker than I did because just made a lot of mistakes along the way.
[00:27:03] Speaker A: With the people side or.
[00:27:05] Speaker B: Yeah, with the people side. Like, but like. Like the hiring and elephant of a team. You know, by the time I left natech, man, like the team. My best example of this is recently one of our. One of the young engineers on the team, on the NATEK team like posted about like how the NATECH values like what they mean to her.
[00:27:30] Speaker A: Oh, how cool.
[00:27:31] Speaker B: This is a young engineer that like I basically never talked to.
You know.
[00:27:35] Speaker A: That shows a lot.
[00:27:37] Speaker B: Yeah. And like so that to me was like oh, like again I like I'm. I'm no longer an employee of that organization and it was just a real gift to see.
[00:27:49] Speaker A: You know, especially two years after the sale.
[00:27:51] Speaker B: Yeah.
And those. And those values like were I. I pulled one of my best friends, my best friend in the world and, and. And my business partner out of Columbia.
He was David Kachui. He was like basically worked for Citibank as like a product manager. And at the time in Columbia it was like 2008 area when we started. Right, right when you said you. You graduated college. What a lovely time to graduate college.
[00:28:17] Speaker A: Yeah. Right.
[00:28:18] Speaker B: And I remember everybody was shitting their pants, like, am I going to get a job? You know what I mean? Most people get their mba, they want to, like, change careers or do something different. Yeah.
[00:28:26] Speaker A: I was the idiot that was willing to work for $1,500 a month because I was a sales guy. I had all of my smart friends, had no job offers. I had 20.
[00:28:35] Speaker B: Right.
[00:28:36] Speaker A: You're willing to do, like, you're. We can pay you almost nothing, and you're going to sell. Fine.
[00:28:40] Speaker B: Right.
Right.
Yeah. Your understanding of cash flow has evolved since then. Right. You know?
[00:28:46] Speaker A: Yeah, I have none now.
[00:28:48] Speaker B: I have some.
[00:28:49] Speaker A: This is better than none. So your partner, you pulled out of Colombia.
[00:28:53] Speaker B: Yeah. And, like, people were like, by the way, like, manufacturing in the United States in the early 2000 was like a graveyard. There was like, yeah, like, companies like us, like mom and Pop, manufacturing companies were, like, going out of business. Like, our trade paper read like a graveyard. Right. In the early. In the early 2000s when I joined, you know, my dad.
And so, like, people at Columbia were like, you do what? Like, isn't that done in China? Like, like, why? How are you doing that on Long Island, New York? You know? And. And Dave, I always say Dave was like the crazy. Like, the only person in the. In Columbia NBA at that time that was crazy enough to join.
Join. To join Nate play. So anyway, like, what. He. He brought a level of professionalism to us that was really helpful at the time. And, like, he showed up in a suit and tie every day.
[00:29:40] Speaker A: He.
[00:29:41] Speaker B: He had, like, a big company mentality, which, like, we were trying to make a leap from. From a mom and pop to, like, how many employ. Have a real company, you know?
[00:29:50] Speaker A: No, I. I do know. And, like. And, like, even the quote unquote, real companies are still. Yeah, exactly what we're talking about.
[00:29:57] Speaker B: Underneath, I later come to find out that, like, yeah, like, yeah, real company, you know? Yeah.
[00:30:03] Speaker A: What does that even mean?
[00:30:03] Speaker B: Right? Exactly.
Exactly. So, Dave.
Oh, sorry, Ryan, go ahead.
[00:30:11] Speaker A: No, go. No, go for it. Because I was gonna ask more about the. Dave, like, well, how big was the company when he joined? And, like, did you. Did you sell him some shares or did he buy some share? Like, how did that work?
[00:30:19] Speaker B: He. He was. The company was like, maybe four and a half, five million in sales.
He.
I later sold him. I sold him shares in 2018.
[00:30:30] Speaker A: Okay.
[00:30:30] Speaker B: So he was with the company for almost. Almost eight or nine years.
[00:30:34] Speaker A: This was a lot of money. How did you get him to come over?
[00:30:39] Speaker B: I got to say, man, he's like an interesting cat. I don't know if you've met him, but you should. You should meet him.
He.
[00:30:45] Speaker A: No, I never met him.
[00:30:46] Speaker B: I guess where we connect on is, like, the idea that Natech was like a living laboratory. Right. Like, I could go home, read a book, and, like, the next day I could walk in through the door. And this credit to my dad, like, the next day I could walk through the door and, like, try something, you know? And that. Dave loves that. He loves that.
[00:31:05] Speaker A: That is super cool how you said that. So, yeah, you almost. Like, our stories are so fun to, like, so I remember.
So when I was sitting in the CFO's office when I quit.
He probably doesn't remember it much, but I remember it, like, yesterday. And he's like, why do you want to leave? Because it was a very good pay package at my age and all this. And I was like. I said. Because I said, whose name is on the door?
[00:31:32] Speaker B: Yes.
[00:31:33] Speaker A: He said, loeffler. I'm like, it's not my name.
And what I said to him, tom.
And I think that this is tied into, as we get into, like, the rest of the story is the intangible value of having a business where I said to him, I said, being able to read a leadership book or a strategy book, and this is way before podcast, right? And I said, and I could have an idea from listening to a book in the morning and literally show up in a meeting and make shit up. And it's like this childhood playground as an adult. And I said, like. And I'm sitting. And I. When I was sitting in his office, I was like, I got out of a management meeting of middle management with 10 people that can't make a decision on anything. I quit.
Like, I can't.
[00:32:15] Speaker B: I.
[00:32:16] Speaker A: Like, I'm professionally unemployable. Like, I don't. I don't belong here. But it was that. Whether it's a laboratory, I think what I. What I. What I heard on it, because you guys actually had a laboratory of tinkering. But, like, whether it's strategy or people or culture or ideas, like, that's what a business becomes is, like, this platform of, like, magnifying our ideas. As a business owner.
[00:32:36] Speaker B: Yeah. Like. Like, one of the legs of my personal purpose is creativity, and which is the act of, like, birthing something new in the universe, Right?
[00:32:45] Speaker A: Yeah.
[00:32:46] Speaker B: Yeah. In this sense, I was really talking less about, like, the creativity that was happening on the shop floor and more about the creativity that you just mentioned. Like, okay. And Culture.
[00:32:55] Speaker A: And Dave saw that coming from Citigroup.
[00:32:59] Speaker B: He saw that. I mean, look, like the, the MBA process was like, it was a bunch of busy professionals with you. So like you have you and 150 other like type A people trying to like, do their best in like a crucible for two years. And it's like you really get to know people, man. Like, he and I, like, he was the guy that like, okay, if this thing had to be done at 2:00 in the morning, like, I knew he would, you know, like, he and I had developed that kind of rapport where like, through working together. So it was really the experience of the school that like, gave us that kind of comfort level with each other that like, all right, like we're gonna build something together, you know, it, it.
[00:33:38] Speaker A: Sounds similar to the trust that you and your dad had.
[00:33:41] Speaker B: Yes, I like that. I like that because I think they sat in our, our office. Ryan. Imagine that. Imagine. Imagine getting hired from Citibank and coming and sitting at 1750 Julie Goldbach Avenue together with me and my dad in like a 12 by 12 off.
[00:33:58] Speaker A: Like he had to have gotten home that day and going, what did I do?
[00:34:03] Speaker B: Like, you know that guy's crazy, right? Like, you know, that guy is crazy.
[00:34:07] Speaker A: But what's fascinating is because you, you started this talking about the, the block two of the people part.
[00:34:14] Speaker B: Yeah.
[00:34:15] Speaker A: And I have similar experiences time where like, so we went from like an insanely toxic culture. When I started to. After like gutting the whole thing, I read Zappa was delivering happiness and it was like life changing of like, it, it, like you said about that trust that you have as a family, building that in an organization is, I think, one of the most magical things I've ever done.
And there's no, like, I've like, I mean, for 11 years tried to find a, Trying to find a prescription. Yeah, Trying to find a prescription for that is like almost impossible because you're trying to just harness that trust that you build. And then the idiosyncrasies of how you all interact. Kind of the Navy SEALs, where they don't communicate with vert words, they just kind of think, how did you and Dave, like, how did that show up as you're hiring people or like firing people when they don't fit? How did that, how did that work?
[00:35:15] Speaker B: It's tough, man. It's tough. The, the foundation of it was. So I hired Dave. His first thing was like, why do the clients do business with us? And then it was like, we sort of like distilled the long and short of it, it was a big journey, but the long and short of it is the values. The values are timeless, enduring principles.
They are behaviors that we hold to whether or not they're an economic disadvantage.
[00:35:38] Speaker A: I love that a lot.
And do you have an example of, like, where you, like, held to your values, but it was an economic disadvantage?
[00:35:48] Speaker B: Oh, I guess, like, there's so many. So many circumstances where it comes into play where, like, oh, like, are you gonna. Are you gonna onboard that client when you know that the signals they're giving off are bullying tactics or price buying or business, you're faced with circumstances where it's like, man, I gotta eat tomorrow.
Right?
[00:36:13] Speaker A: Totally.
[00:36:14] Speaker B: Every day you're faced with these circumstances of, like, I gotta eat tomorrow. And, like, how are you gonna make those decisions if you don't know who you are?
You know?
[00:36:21] Speaker A: It's so good, dude. We had this one company. Alberto.
[00:36:24] Speaker B: That's a lot of pressure, right?
[00:36:25] Speaker A: Ryan?
[00:36:26] Speaker B: You know that, man, the payroll.
[00:36:27] Speaker A: Oh, shit. Well, and I think we should even.
[00:36:28] Speaker B: Talk about, like, payrolls coming in. The suppliers are knocking on the door. I used to be like, when do I get to exert power? Like, the clients. The customers just like this, like, you know?
[00:36:41] Speaker A: Yeah, yeah. Like, yeah, yeah.
Oh, my God. So true. Tell where there is. I don't have to go on to my own rambling stories, but I think you.
[00:36:50] Speaker B: Well, let's have a conversation. Yeah.
[00:36:53] Speaker A: You said something that was so important, which is like, when it's not obvious. And that's why I keep asking, like, when it's not obvious, because in hindsight, 2020, we. So many people listen to these podcasts and all this shit, and it's like, well, I just do these things. I'm like, f off. If it was like, if it was that obvious back when I was in that situation, it would. It wouldn't have been that big of a deal. And when you're running a business, like, you're saying, it's like, I gotta eat. We got payroll, we got suppliers, we got inventory. And, like, we had this company, Banner Engineering, where it was like, we just have to up everything with the order.
And, like, we were broke from cash flow again, on paper, you know, like, again, there's a difference between illiquid value and liquid value. And it was just like, we have no money. And we took all of the equipment back, and they were a raving fan of ours for, like, a decade.
And it's just like, we don't have any money. We have to take all this Equipment back. And so I just learned those principles from watching my father watching the hard decisions and then participating in those. And it's like this per. Like this person. We need to keep them, but, like, they're a disaster, and we were making a bunch of money off them, and it just. It's just.
[00:38:08] Speaker B: Yes. On the people side, that's almost constant. Like, when I talked about, like, oh, I wish I could speed up people's journey through the people side, it would start with the values. Because for at least five years, I hired based on, like, oh, you had a certain skill.
And. And now I know that that's, like, just the minimum. Like, that's just the bar, you know?
[00:38:28] Speaker A: And honestly, are the. Are the right people might not even have the skill yet.
[00:38:33] Speaker B: And by the way, I don't even care. I want the right raw material. Exactly, Ryan. Exactly. I later came to believe that I was completely wrong, that what I was doing was just looking at, like, how did they make my life easier tomorrow, by the way? That's not. That's not.
[00:38:46] Speaker A: And it's perception of easy because it ended. How often did it work, actually?
[00:38:49] Speaker B: Yeah.
And when I started flipping that and being like, all right, it's my responsibility to develop. It's my responsibility to provide an exciting scope of work. It's my responsibility to give them a picture of the envisioned future that they could. That they could see themselves in.
Right.
[00:39:08] Speaker A: What was it like for you learning how important that was? And the reason I'm asking that question is because I learned that, too. And it was like, it took a long time for me to realize, like, people don't have that.
Like, they can't see it. And, like, it's that communication of the vision. How freaking important that is. Communication of the vision and the expectations.
[00:39:34] Speaker B: Yeah.
[00:39:35] Speaker A: And, like, how they fit. And it's like, this is interesting to me, like, how people.
I'm so not an employee that it just does it. It's like. It's like being outside the matrix and being like, I know they. Somehow it makes sense to all of them, but it's not me.
[00:39:52] Speaker B: Yeah, I guess that you're right, man.
[00:39:54] Speaker A: There's like.
[00:39:55] Speaker B: There's, like, that eternal split. It's like I used to say, if you can. I don't know where I got these four questions from, but credit to whoever I got them from. But it was, where. Where are we going?
How are we gonna get there? What's my part in it? And what's in it for me when we do?
[00:40:10] Speaker A: That's super cool.
[00:40:11] Speaker B: And I felt like if we had an organization where you could walk up to anybody's desk and ask them those four questions and they had an, an if any organization.
If, if you could walk up to a random employee and ask them those four questions and then they have an answer, you're going to go to the moon.
Well, go to the moon, you know.
[00:40:29] Speaker A: And it's back to like the Daves and the people that you guys are hiring. And I mean it really starts. I, I, from my experience, it's like, it, it's this core. It's like the Fibonacci sequence. You got to start at the beginning and then just it spirals out. And the moment that some weak link is in there. It's brutal, man. Like, it just screws up the whole thing. So what was it like in the growth phase and maybe more on the mechanical side? Because you and I both have hilarious stories about cash flow.
[00:40:57] Speaker B: Yeah.
[00:40:58] Speaker A: Is like growth is really effing expensive.
[00:41:01] Speaker B: It really is, man.
[00:41:03] Speaker A: And so like, were you guys buying all the inventory and all the equipment and all the people? So like, what's it like as you're holding on to this growth? Like, how are you growing? What's the cash con like, the cash cycle like, and how are you managing it?
[00:41:14] Speaker B: Yeah, so I didn't, I didn't know any of like, I didn't like get super skilled. I didn't get skilled at that part of things. Ryan. Like managing three, the three statement model until like sort of like in between Columbia Post. Columbia in that area. So like we're talking like 2012 area, something like that where like I really start to be. Other than that, it was just like you said, like the income statement and the bank statement. Right. Like we would make decisions from the hip and like if they, if they wound up biting. Oh, I wouldn't even say from the hip. It was like a combination of intuitive intuition and experience. Right.
[00:41:47] Speaker A: Which is what most people do, man.
[00:41:48] Speaker B: Like, look, man, those are powerful things, right? Like if you work 25 years or something, you stub your toe enough, you know, not to stub your toe. I mean, it's just as simple as that. So like we, we did have that and my dad had 40 plus years.
[00:42:00] Speaker A: Of that, you know, So I think we're it, we're. It's all greed and like, and I think like literally 99 of the people listening in are doing that. And it does work. I mean, I've watched people with 200 million dollar companies doing that.
[00:42:13] Speaker B: Oh yeah. Oh yeah.
[00:42:14] Speaker A: And what happens is, is like, okay, I got these floor hires that I have to make. I got these POS that I got coming in. I gotta buy this kind of inventory. How much? I got 2 million bucks in the bank account or receivables of this. And every morning and every evening. That's what we mentally do. Instead of seeing it on a dashboard, we end up, like, internalizing it. So it is.
There is no method to the madness. But, like, when I think about, like, accelerated growth and as you're sitting there.
[00:42:42] Speaker B: Yep.
[00:42:42] Speaker A: I mean, you're cap. I mean, capital intensive, just like my old business.
[00:42:46] Speaker B: Yeah. I used to say that, like, the reward for success in a capital intensive business is you need to go get more.
You need to invest more capital. That's your reward, man. Like, we would get like a great client or something like that, and all of a sudden be like, all right, well, you need another 250, 000 machine. You know, you need another building or you need another engineer. Right? So it's like. Like, I laugh when I think about, like, you know, like, again, like, you mentioned, like, books or like. Or like podcasts or like, private equity, like the. Where it's like, oh, yeah, like fast growth and fast. It's like, okay, like, yeah, I want high growth and high profit.
All right. Like, good luck finding that, man.
[00:43:26] Speaker A: Like, yeah, I would like to drink a case of beer a day, wake up, have a six pack, and then.
[00:43:31] Speaker B: Be able to be, just by their very nature, that they're. They. They feed on one another.
[00:43:38] Speaker A: It's like, I think the dysfunction in that narrative, Tom, is that. Yeah, in a SaaS based company, a software company, once it's built.
[00:43:47] Speaker B: That's right, man.
[00:43:48] Speaker A: But then, like, everyone takes the directions off of that. And I'm going like, well, any professional services firm that sells people, you have to hire ahead of the demand, which is. It sucks. I've had a company like that and then distribution. Like, I was you. Like, I've done workshops for distributors. I'm like, raise your hand if you. Like, if you feel like you're the bank for everybody and everyone reins their hand. It's like, I buy shit, I float it. I have inventory receivables, and then everyone has my money besides me. And then manufacturing, it's like, so like, the real economy has to pay attention to this.
[00:44:22] Speaker B: Yes. Yeah. We didn't have big inventory, man. Like, we. We were built. We were, like, built to PL primarily.
[00:44:29] Speaker A: So your equipment, I mean, it's got tons of equipment.
[00:44:32] Speaker B: We have tons of fixed costs, like, in terms of, like, space and People and that kind of stuff. So like, and we did, we did have inventory, but it was, that wasn't the thing that kept me up at night. It was, it was the people and the things that, that kept me up at night in terms of like, okay, like once you make that the. And these are like, you know what, you know what really helped a lot? Like I, I took an activity based costing class at Columbia. It was an operations club or an operations finance class or something like that. Like the, the professor there was like super skilled at ABC costing and like I used it to like create price at Natech. And we went, and we went from like, then I would start like analyzing like these like little jobs that we would sell. Like the, the big picture message of, of activity based costing is like you overprice long running jobs and underpriced short running jobs in general. Right?
[00:45:22] Speaker A: Okay.
[00:45:22] Speaker B: And then there's like some psychology behind it, math behind that, whatever.
Like I started looking at like these like little repair jobs that we did. And I break it down like, okay, like, well, somebody has to call the supplier or somebody has to like communicate with them then when they have to go back to the client and, and communicate with the client. So like I started counting up all the hours associated with these jobs.
Something that we would charge like oh, $2,000 for this repair. And I, and then I, and then like, I'm like, oh my God, like We gotta charge $8,000 for this thing, right? And like I would charge $8,000 for this Thing and the clients wouldn't bat an eyelash.
And I was like, oh my God.
[00:45:57] Speaker A: Yeah, cha ching.
[00:45:58] Speaker B: Like how long I've actually found willingness to pay, you know.
[00:46:03] Speaker A: Interesting.
[00:46:04] Speaker B: Yeah. And that. And, and basically like one of the principles underneath that is like being able to look at like your capacity and know how to like feather the gas of pricing. And like if you own the capacity and at capacity and step resources like.
[00:46:19] Speaker A: Each super fascinating to me.
[00:46:20] Speaker B: Yeah, like engineers and stuff like that are like step resources. Right? It's like you, you, you get one and then you like unlock a certain amount. It's not, it's not a, it's not a curve curve. It's, it's, it's, it's a, it's a step curve, you know. And so like cost in many cases in our business was like a step curve. So you'd have to like buy the next tranche. The next tranche would not have the, you would not have the capacity utilization for quite some time after that.
[00:46:44] Speaker A: Yep, yep.
[00:46:44] Speaker B: You know, so Many of the resources that we bought would be like that, they would be like step resources. And you have to know how to.
[00:46:50] Speaker A: Set another way is like, we buy something, we have no cash, then the cash comes, Then we buy something, we have no cash, then the cash.
[00:46:56] Speaker B: Yes. And look, man, like, the act of actually just knowing that that's the stuff story like that that's a whole different life.
Like, otherwise you can make these decisions and two weeks later be like, I up.
[00:47:07] Speaker A: Like, oh, my God, you just said 100%, dude. Like, just the knowing is sometimes enough medicine to go, oh, this is how it works.
[00:47:18] Speaker B: Yes.
[00:47:19] Speaker A: Instead of being like the whip, I think it's yes.
[00:47:21] Speaker B: And now you could, like, let your own decision breathe.
Because they need to. Because they need to.
[00:47:28] Speaker A: That is so.
I love how you worded that, man. Because how many times I think I get on meetings with people and it's this perpetual exhaustion of second guessing ourselves, and it's like, okay, well, and that honestly, if I were to sum up probably, Tom, now that you're at how you're wording this, like, that's like 99 of the reason I built out the entire playbook that I did. It's like, I just want to know how it works so I don't have to be so stressed.
[00:47:58] Speaker B: Yeah. I look at your playbook. I was at a conference once, like a medical conference, and there was a CEO, a woman that was speaking, and she said that the CEO's number one job is to manage their own psychology, you know, And I look at, like, what you're doing now is like, you're giving these owners, like, the tools necessary, like the factual tools necessary to manage your own psychology. Right.
[00:48:23] Speaker A: Isn't that fascinating too? Because, like, what I, I, I do like that. Because that's where at the end of the day, like, let's say someone had.
[00:48:30] Speaker B: Everything around like a child. Every time something doesn't go your way or like, or like, change your decision or blame other people. Like, these are very important skills, man. These are very important skills.
[00:48:40] Speaker A: And it's kind of like you and I had fathers where we watched what that looks like on the good and the bad. And it's like it and in we're trying. I think, to your point, it's like, if we know how it works, then we can manage our expectations. And I don't begrudge anyone, like, if you don't know it's a step change where you invest and then you have no cash. And you invest, you have no cash. Like, like you're gonna Be exhausted not knowing what's happening.
[00:49:07] Speaker B: Oh, yeah. You're gonna live with a lot of fear. Right?
[00:49:10] Speaker A: And, like, it's interesting that you've. You've honed in on this, Tom, because, I mean, I think about how emotional you were in that one meeting, which is what everybody is. But, like, you had all the information, which was, I found awesome. Like, when I think about, like, okay, like, we can sit in that moment going, like, we're not panicking because we don't have the information or we don't know this or we don't know this. We're just. We're sitting with the situation. Like, there's actually a decision to be made, and we have to just choose one or the other. But I think to your point where it is, at the end of the day, it is all psychology. Like, I was talking to my group of people. I'm like, I got guys.
Like. Like, what we're gonna have at the end of all of this is, like, monthly meetings are just spreadsheets on track, off track. But it's the education, it's the expectations, it's the goal clarity at the end of the day, where it's all. Decision making is all we're doing.
[00:50:02] Speaker B: Yeah. And I don't think. I don't think having the good spreadsheet, I don't think having the experience, I don't think any of that exempts us from the fear that comes from stretching ourselves. Right.
[00:50:14] Speaker A: And well said.
[00:50:15] Speaker B: Yeah. And, like, I think that, like, these are all vehicles to help us, like, process through it, and, like, we're gonna need to continue to process through it each and every time, you know, and do we have the right people in our corner that I could say, like, I stretched and I'm not sure. And they can. They can listen to that. Right. And, like, allow us that space and also, perhaps in gentle way, like, point us back to the hundred times that we shared about a similar. Like I used to say, our business. I was going out of business every November.
You know, thank God for my wife who would. Who would tell me, like, you know, like, you say this every November, right? Or, like, my. My best friends in the world, Kevin and David, and guys who would tell me, like, thanks for sharing. And I heard this last November.
You know, it's so funny.
[00:51:04] Speaker A: I literally, September, and I got an SOS from my best friend from college, his wife. He owns a family business.
I was like, amy, it's summer. We do this every year.
[00:51:17] Speaker B: Yes.
[00:51:18] Speaker A: And I said, I love him to death, but, like, this happens Every year.
[00:51:24] Speaker B: Yes, yes.
And it's like, oh, how do we not judge ourselves that we have to go through that each and every time? You know what I'm saying? It's okay.
It's just another process, right? It's just another process.
[00:51:37] Speaker A: What were at where. Where were you at in the growth, the life cycle, the business, you and Dave's relationships? Natech, when you reached out, because I think you were listening to the podcast or something like that, weren't you? I can't remember how you.
[00:51:51] Speaker B: It was 20, so in 16. So my.
I made the deal to purchase the shares in 2014.
[00:51:59] Speaker A: Okay.
[00:51:59] Speaker B: My dad passed away in 16.
[00:52:02] Speaker A: How was that on you?
[00:52:05] Speaker B: It was awful, man. Like I said, we were very close, and we also spent an incredible amount of.
We were father and son, but we were also partners for a lot of years. I'm not sure if people understand that, haven't experienced that.
So we spent an incredible amount of time in a crucible with one another through success and failure. And success and failure.
[00:52:29] Speaker A: And life in the trenches.
[00:52:31] Speaker B: Yeah, and life in the trenches, you know, So I. I missed him, you know, like, they were.
I miss him now, man. I miss him now. You know? Like, I wish, like, anytime, like, I'm thinking of something creative or like. Or, like, on my way to, like, getting something done, like, I want to, like, run over and tell them, share.
[00:52:50] Speaker A: The wins and the losses together. Yeah. I mean, I got two calls from my dad already this morning. So, like, he's like. He wants to talk about deals and, like. Yeah.
[00:52:57] Speaker B: I tell you that I said hello, but, you know, sent you to my own dad, man. Tell you that I said hello. I don't know the man, but, yeah, I'm glad you guys enjoy that. That's beautiful.
[00:53:07] Speaker A: And the reason. So you, in 2016, your dad passes.
[00:53:10] Speaker B: Yep.
[00:53:10] Speaker A: You're still growing the business.
[00:53:12] Speaker B: Like, we're still growing the business. I get a couple. I get this company out of Japan that, like, tells us they want to buy us. Right. Like, and I, like, entertain it because it harkens back to my job with the Japanese. And I love their business model. They had certain technology, bells and whistles that really made sense for us. It was a place I was trying to go with the company.
They wooed me and brought me and Dave over to Japan and they had us write a business plan. We did all this work over the course of six months, which you could call a waste or you could call it the place on the way to the place.
I wasn't skilled enough to know what they were doing that. They were just getting great competitive information from us and kicking the tires. Because at the end of the road, it was like at the end of the road they gave me some super low ball offer for the company and I had spent an entire summer with them.
[00:54:09] Speaker A: What was your emotions at that time when that happened?
[00:54:13] Speaker B: You know, it was like, it was like kind of relief in a way because like I had, I really like, like I said, I had just purchased, I just been like an independent owner from like 2000. So it was only like three years under my belt, which is nothing in business time. That's why when I hear like these seven year timelines for these PE firms and stuff, I'm like, what a joke.
I don't know. I think of mistakes that lasted seven years, you know, I know.
I'm not embarrassed to say. I'm like, yeah, I think there's some things I could speed up the timeline on, but some things you just can't. Right.
[00:54:47] Speaker A: So anyway, imagine hiring like the grow like double click on this for a second. Because like I think every time I've said in front of a group of people, like, can you imagine buying seven or 10 companies in five years and integrating like let's say all of the systems integrated perfectly? First of all, everyone laughs at that.
[00:55:11] Speaker B: Yeah.
[00:55:12] Speaker A: And then you, can you imagine integrating all those people?
[00:55:15] Speaker B: Yeah.
[00:55:15] Speaker A: It's like having 7,000 groups of friends all of a sudden like each other. Like, yeah, right.
[00:55:20] Speaker B: Yeah.
[00:55:20] Speaker A: It's so dysfunctional.
[00:55:22] Speaker B: We bought one, we bought our supply. So anyway, that's another part along the journey. But the M and A journey and yeah, twice as long, twice as expensive, like, and like nowhere near what you expect. Everything you believe is not going to happen and then you're going to get like unexpected wins and unexpected losses and it's like I don't care how, how professional you are at or how you draw it up, like. And again, I do think that there's room in there to develop a model that works better than most, but it would, it's, it's, it's, it's a lot of work. It's a lot of work to get it right. That's right.
[00:55:54] Speaker A: All those perfect plans. If all of this stuff happens, we get this rate of return and we have this cash flow. It's up to the right. No, no such thing as trade wars or anything. Right?
[00:56:02] Speaker B: At that, you're right at that inflection point of the hockey stick, man. You know, it's like, yes, yeah. You buy this right away, man. You're Right. Right there. Right. It's like.
[00:56:11] Speaker A: So when you got the lowball offer to. Two questions about. This is like, one is because like so many people, this is how their journey starts is like, oh, okay, what company?
[00:56:23] Speaker B: Somebody wants me to.
[00:56:25] Speaker A: Actually, the part of that was going to be like affirmation. Right. Like again.
[00:56:28] Speaker B: Yeah.
[00:56:29] Speaker A: All of my mistakes are because I like, was like someone likes and approves and then I go back in.
[00:56:36] Speaker B: Yes.
Yes. Or it was like, it was like a, like an emotional soup in there. Like my dad had passed away a year earlier.
I, you know, like again, like the JAP Japan thing, I had like some emotional connection to like an earlier version of myself. I do love that culture in general too. So it was like there's, there's always an emotional soup in there. And that was that one. At the same time, ironically, we, we, we. We got interest from a firm in GE almost at exactly the same time. And I, and I really.
And they actually gave us like a credible. Credible. So at the same time, I got the lowball offer from the Japanese and I got like a credible. What I've looked at is a credible offer from. From the German. And I said, I obviously said none of the Japanese one was the non starter. But I, But I, But I actually said no to the one from the.
From the German firm, which at the time was a credible offer. And felt like, to me, like if I would have told my friends that I said no to this, they would have been like, you're out of your mind. You know what I mean?
[00:57:33] Speaker A: And I do. So there.
The question I have about that decision tree and how you made that.
[00:57:41] Speaker B: Yeah.
[00:57:42] Speaker A: So I'll tell you my belief and I want to hear how you made that is like, I've. What I've. What I've come to realize, Tom, is like, I think the biggest missing link for decision making of owner operators like yourself and I and the people listening into this is a lack of understanding of true value and valuations. Like, hey, what's the value of the cash flow? Discounted cash flow, the multiples of EBITDA to be able to weigh our. Because, like, if you came to me and said, hey, Ryan, I want your iPhone and you're willing to give me a hundred grand, I'm like, it's yours. Right. But if you. Without understanding value, it's difficult to make a decision.
[00:58:18] Speaker B: Yes.
[00:58:19] Speaker A: Of whether we should keep it, sell it, what you offer. So, like, what was your understanding of valuations? Like, why did you say no to that?
[00:58:25] Speaker B: This is another Columbia thing, man. Like, like I took. I'm. I'm a skilled valuation person. Like I took classes Emerges and acquisition. I took classes in turnaround. I know how to build my own dc. Like I'm unusual for a business owner and that like I could build a dcf. I love building DCS by the way. Like, because they're all BS.
[00:58:47] Speaker A: Talking about tinkering. Well, if we do this and get.
[00:58:49] Speaker B: No, like their math models, like the DCF mass includes. Includes something called the terminal value, which often makes up about 90% of the total value and is basically a perpetuity. It's like imagining you're going to grow to infinity and bringing that value Back to time T0. Right. And that's like 90% of the thing there.
Nonetheless, I still find it to be a worthwhile model to develop strategy because.
[00:59:20] Speaker A: This is where I think it's worth spending a little time on or.
So like I've got these new articles out on my website called the and I've got this lens evaluations. So owner's utility lens. What I call is like, what's it worth to you as you decouple your job? So like let's say like I love the.
[00:59:36] Speaker B: I love that you do that. Yeah, yeah, that's great because like at.
[00:59:40] Speaker A: The end of the day as you decouple your job and you have the ability to hire someone in your income statement and you can keep your income through distributions.
[00:59:47] Speaker B: Yes.
[00:59:48] Speaker A: The goal is like, yes, look at that dcf. Maybe pick five years, the multiple and the ebitda.
[00:59:53] Speaker B: Yep.
[00:59:54] Speaker A: And then do the DCF for your. Like. But at the end of the day you can, you can eliminate, in my opinion, you can eliminate all that noise of all the math and all the. And say like, hey, I can get 50 grand a month in after tax free cash flow while my company continues to grow without having a complete involvement like that.
[01:00:12] Speaker B: Right.
[01:00:12] Speaker A: There is a lifestyle and a. And an owner's utility. Then I stack on top of that the multiple, the EBITDA working capital. So that way someone could look at ESOP private equity third party sale and say, okay, like regardless of the buyer, here's kind of the market range is what I call the market value and then the strategic transaction values like the actual deal with the deal structure, rolled equity, net proceeds. But the reason I'm bringing this up and I think it's very contextual is you were there with a lobo offer, a pretty good offer and you chose.
[01:00:44] Speaker B: To keep my own models right in there.
[01:00:46] Speaker A: Yeah.
As you're thinking about value and your Goals and like, why you made that decision. How did you.
[01:00:52] Speaker B: Oh, I made, I made the decision. Like you could throw all that out. So, like, after all the math, all the credible offer, my own, My own perception of myself and how that works out in the math. Right. Like, I think ultimately I, I felt like I wasn't ready.
Ultimately. It was an emotional decision. It was like I wasn't ready. I felt like that I felt like I had just gotten my entrepreneurial legs under me as an independent, as an independent owner.
And I felt as if like I was making my decision out of like, if I were to sell at that moment, that there was too much involved with like, fear of the future, you know, Like, I didn't feel like I was making the decision free of that, you know.
[01:01:37] Speaker A: Which I think it's so important for us to, as an owner, community, to like, while you're juggling cash flow, while you're juggling people, while you're juggling clients. So like, it's so easy to hit that punch out number that you hit that rip cord.
[01:01:53] Speaker B: Hit the rip cord, man.
[01:01:54] Speaker A: Because you're like, effort. Like, I mean, I interviewed this one guy. I mean, like, he's like, I was so sick and tired of my working, working capital that I sold. And like, I'm like, well, like your company was crushing it.
So like, that could be overcome. But like, like all of those things come into the fact that you still said I, I, I mean it was. What I heard is Tom is capable of more and I want to see if I can stretch myself.
[01:02:17] Speaker B: I want to see how this plays out with, with, with like the strategies that I was only just employing. Like, I'm a professional marketer. We had just like started investing a significant portion of our budget and marketing like two years earlier. Right. Because you know that there was just, it was just not the way. Again, like, I don't want this to be perceived as so negative toward. Anyway the, all these, all these.
[01:02:41] Speaker A: You're good at marketing. Well, you're. Well, like, yeah, I want to fill in some blanks so that way you don't regret anything. You're saying, like, I, I think it's what I, I don't know how to quantify or even articulate other than like, help helping people in the goal setting process where it has to do with this playground.
[01:02:59] Speaker B: You and I have talked about the playground.
It's like, yep, the lab. Right? Like, right.
[01:03:07] Speaker A: And like, like, I, bro.
So I believe Tom, like, and this will get into, as we get into how you met me and why you decided to eventually sell is like, why. Why I think most people do regret the sale is because they haven't seen their ideas fully play out and they get exhausted with the cash flow. Juggling the people, they get exhausted with the operations.
[01:03:28] Speaker B: Yes.
[01:03:28] Speaker A: They don't understand how valuations really work. So like, yes, you might be strapped with cash, but you have a valuable asset here. So it's like all this co mingling of.
Yet people still have a joy even later on in their career to watch their ideas play out and have that playground. And so it's hard to weigh all these vectors in the decision process.
[01:03:52] Speaker B: Yep, Yep. So I ultimately, I felt, I felt like, like the decisions we making were good.
I felt like there was. I hadn't yet like, like run its course appropriately, you know, so it just, it just wasn't. It just wasn't the right timing. And I'm glad I, I made that decision.
[01:04:08] Speaker A: Was Dave, Was Dave an equity partner at that time?
[01:04:10] Speaker B: He was. He. No, he was not. No, he's not.
[01:04:14] Speaker A: So where, where did. It's so then now, is it like.
[01:04:17] Speaker B: The next time, the next year I buy one of my suppliers? 2018, that's 2017. I, I say no in like, in like September of 2017, I put that in the rearview mirror.
I'm back at it. Right.
Buy one of my suppliers. That was another milestone for the business. Another very, very painful.
Another very, very painful.
[01:04:41] Speaker A: How big was it? How big of a, how big of an acquisition was it?
[01:04:44] Speaker B: It was pretty small, man. But like the, like, for us it was, it was a big deal. They were a supplier of ours. The, the owner, the, the older man was, Was looking to retire at the same time. They, their lease was, was com. Oh, they basically like, he would have hung on, but they're like the building they were operating out of, like got sold to a company that was like building 55 and over communities on this industrial lot. And so they had like six months to leave, you know, or three months to leave whatever it is. And it was like he just didn't have a move in him. You know, he was older, gentleman and.
[01:05:22] Speaker A: And they're staff and it was, it was five.
[01:05:25] Speaker B: There was five or six tool makers and his son, his son who I became very good friends with and he and I.
[01:05:30] Speaker A: That's awesome.
[01:05:31] Speaker B: You know, I have a very special connection with Paul and his dad and.
[01:05:38] Speaker A: Integrated the supply chain.
[01:05:40] Speaker B: Yeah, they were toolmakers, by the way. My dad's a toolmaker by trade.
[01:05:43] Speaker A: Okay.
[01:05:44] Speaker B: And we, he exited the tool making business. Like toolmaking Is this. It's the steel form into which the molten plastic is injected. Right. So like without it, we don't exist. You need tools, however, like, there's like very low willingness to pay in the mold in the tool making world for one reason. It's like basically it's art, it's steel sculpture and. Right. And yet clients like beat the heck out. It's a one time expense on the client's parts that they, that they argue like crazy over. They want you to like own it and whatever else.
[01:06:14] Speaker A: I have a client that does steel fabrication.
[01:06:17] Speaker B: Yeah. I later found that like the engineering hours is where the, where the real dollars are because like nobody cares about like spending hours, time on hours.
The, the profit happens at the. When you get the client all the way through, all the way through to, to long term manufacturing. That's like the, the tail recurring revenue. That's like the holy grail.
Tool building is a lost leader and engineering is like an opportunity cost. A thing that pays for itself. It's a, you can, you can pay for your opportunity costs on the engineering side, you know, super cool.
So anyway, bottom line, I bought this business and had to move it with like within 60 days of closing. So I had to like pick up a whole bunch of equipment in one place. And it was in New Jersey, which is like, it's like 60 miles from New York. But it could be, it could be like across the continent in terms of like, like the way we, the differences and like I used to think like, wow, New York is like the most aggressive place. I can tell you that like New Jersey has an edge in terms of like dealing with the town and like the real estate agents there and like trying to find a place while like I have like, like I'm holding a milling machine on the back of a pickup truck and like hoping that like I could like rent this place down the block. It was, it was, you know, I wouldn't, I wouldn't relive that. I wouldn't relive that six months again if you, if you paid me, man. But like, yeah, so that was stuff we learned.
[01:07:40] Speaker A: Twice as expensive, twice as long.
[01:07:42] Speaker B: And like I had this work, I.
[01:07:44] Speaker A: Had this workshop and this guy we were talking about, like, I don't remember what topic we were on. He goes, yeah, he ended up buying one of his suppliers that was out of Germany.
[01:07:55] Speaker B: Yep.
[01:07:56] Speaker A: He's like, I bought this piece of machinery that we needed was like 3 million bucks. The son of a bitch gets to the states and all of the directions and all of the. All of the words are in German and no one knows how to read German.
[01:08:09] Speaker B: Oh, you want English manuals. That's another 2 million. You know, you wanted. Oh, you wanted the English manual. You should have said so. I'm sorry.
[01:08:18] Speaker A: It's like, it's like the new sun country. You want to go to the bathroom on the plane, it's five bucks.
[01:08:22] Speaker B: All right, all right, totally.
[01:08:24] Speaker A: So 2018, you acquire the company.
[01:08:28] Speaker B: It's a vertical ad. I think I'm smart. Smart. I think, like, oh, yeah, I'm gonna, like, provide the whole value for the clients. It's like, of course, none of it worked out as I expected, but some of it did. And, and eventually that became like a key. A key part of like, the final transaction was just that, like, we had that integrated capability in house. Like, the, the clients really loved it from a perceptual standpoint. Like, they would always ask the question, like, do you have your own mold building? And if the answer was no, they'd be like, ah, like, we don't like it because there's like some, some perception of like, integration.
[01:08:59] Speaker A: Risk and risk. Yeah, yeah, yeah.
[01:09:01] Speaker B: Oh, now you're so subject to somebody else's supply chain. Right.
And so the clients loved it. Even though, like, once I bought one and once I started answering yes to that question, nobody ever visited.
They never even. It went from a no to a yes. And that was it. That was enough, you know, for us.
[01:09:18] Speaker A: To like, would you have done it? Would you have done anything differently?
[01:09:20] Speaker B: Would I have done anything differently? Yeah, man. Like, how much time do you have? Like, I, I would, I would have. Yeah. Yeah. I don't know if you want me to speed up or slow down or whatever, but yeah, there were a lot of things I would, I would have done differently. But the most important was I, I, or one that stands. I'll give you one. Okay. I bought a five axis mill. A five, like, so machine operates on a conventional milling. Machine operates on an X, Y, Z axis. Most people can. If I say that most people can envision what I mean by X, Y and Z. Right? And. But like, machines built today operate in, in multiple axes.
And there's a technology leap there from a machine perspective, but there's also a thinking leap that goes into designing programs and work fixtures for 5 axis as opposed to for 3 axis.
And it was a 3 axis EVM heavy shop. And I basically bought the flagship 5 axis machine and dropped it in the center of the shop and.
Laughing, bro. You're laughing.
All right, everybody, everybody let's go like, all right, now like make that thing work right? And like, yeah, like this is a powerful lesson, man. Like I laid a fan and I did this a couple times through the years. These are like stroke of the pen.
Yeah, stroke of the pen things where like, oh, it's like so easy. Look man, it's so easy to write the friggin check. People think that that's the hard part. That's not the hard part. You know. And like so many times I mistake and like I would make that decision again. I would later make that anyway.
But when you put together the human being and the equipment again, going back to the values and the people, it's like when you, when you start realizing that it's not about the next piece of equipment, that it's about the next person and what's, that's really where the, where the company takes off. And then I did have some very big successes where I took like a piece of, a piece of space age technology and then actually had the right person to operate it and like the difference maker that that could be for an organization but without, without the opera, without the human being to the machine and basically was useless, you know?
[01:11:33] Speaker A: It's so true, dude. And like I have all of my experience with that. Like, I mean, dude, like we're selling managed IT services. Like I had a bunch of copy reps. They're like, what is that? How do we do it? I mean like, yeah, like the, everything has to rely on the people. And like I mean I, I, I, I mean I just think about how slow people adopt.
[01:11:59] Speaker B: Yep.
[01:12:00] Speaker A: And like, and they need the space. You keep using the word space. And I like that and being realistic with expectations. But that's why like you even say about the PE timeline, I'm like, it's just absurd, you know.
[01:12:12] Speaker B: Well, like your community. Right. Like I, I would almost, I'd be willing to bet I don't know everybody individually, but I'd be willing to bet that like there's a like a bias there.
Like equipment is so easy to like make the decision to get the next piece of equipment. For me, in my unskilled state, it was much easier to say like yes to a $250,000 piece of equipment than it would be to say yes to $150,000 employee.
[01:12:37] Speaker A: Wow. There's a lot behind that and it is.
So yes, I would agree with you and I learn the hard way because like so I, in our family business town when we were going through the turnaround again because we were cash Strapped.
[01:12:57] Speaker B: Right.
[01:12:57] Speaker A: So you're looking at the income statement and your bank account versus the long term. Like how does this actually make my life better? And it was like $80,000 controller. $80,000. And we're dating ourselves here because it's like almost 15 years ago. It's like now it's like $30,000 controller.
[01:13:15] Speaker B: Yeah.
[01:13:16] Speaker A: $140,000 controller. Right, right, exactly. And, and it was like all like sub six figure like executives at a $21 million company.
[01:13:24] Speaker B: Yeah.
[01:13:25] Speaker A: And I'm like, well not only was it not just the pay, but I remember Paul Rochowski when he we finally I went through three CIOs who were building out. I mean we get, we did the IT services for the Minnesota while. Right. So this is not insignificant.
[01:13:39] Speaker B: Y. Yeah.
[01:13:40] Speaker A: Right. And like, and so I finally got Paul and it was the step up order of magnitude change and how my life was different after I hired Paul. The trust and like the mental freedom I got out of like the leverage of him was in quantifiable.
[01:14:03] Speaker B: Leverage. Leverage is the word. It's, it's a leather man in the caveman sense. Right. It's like you're able to and it's.
[01:14:09] Speaker A: Like the most important leverage and so Are you familiar with Dunbar's number, Tom? I'm not, I'm not so dumb. Bar's number. I should, people can kind of picture this so. Oh God, I should almost pull it up. So I'm getting geeky here because like you're so, I, I think you're gonna, I, I, I have an, an assumption that you're going to see what I'm seeing here. So Dunbar's number is how many people you can manage in how many relationships.
[01:14:36] Speaker B: Yes, I have heard this. I have heard this.
[01:14:38] Speaker A: So I'm pulling this up here. So let's see here.
So this right here is Dunbar's number.
So I got this. You can see this here. So it's how many relationships we can manage. And it's like a fractal.
[01:14:54] Speaker B: Right.
[01:14:54] Speaker A: It's all about. And the constraint is time.
So we have time which is the biggest constraint. So when we look at like so people listening in it's like, like we have this, like we have 5, 15, 35, 50 or 150 where we can manage about 150 relationships. And tell. What's so fascinating to me is I look at this and so when I think about like what I actually when I talk about the time, cash flow, wealth and the true leverage is organizing ourselves as business owner operators where like, the executive team is our. Is the largest lever. Like, what's the whole. Like, you give me a lever long enough and I can move the world.
[01:15:34] Speaker B: Yep.
[01:15:34] Speaker A: And it's those people at that are closest to us that we're interacting with.
[01:15:39] Speaker B: Yep.
[01:15:40] Speaker A: And what I Like, back to your machinery point.
Whatever we have to do, it should be like, risk the entire company's future on figuring out who these people are.
[01:15:54] Speaker B: Yeah. Yep.
[01:15:56] Speaker A: Because I think you can if you can. And now with my old company, I'm curious if yours like, or my old team. I'm like, dude, you give me any business model. If I could get Stashi, Paul Rochowski, and I could go through my people, you give me those people, name the business.
[01:16:11] Speaker B: Yeah. And I would argue, again, going back to the values, I would argue that there's some underlying set of timeless, enduring principles that those people believe in and behave toward. And yes, the names are just embodiments of those. And so once you know those, then you can get the person that's not on that list and make an accurate assessment as we can humanly make. Of course, we always make mistakes on that. But yeah, so that would be any work I would do with anyone trying to grow or I'm trying to build a new business.
I would start with the values.
[01:16:43] Speaker A: Which is just the trust. Right, the values. The trust. And just a way of communicating. Because I think.
I don't know what it is with me, but, like, when I hear.
I know. Like when I'm talking to someone like you and you say values.
[01:16:54] Speaker B: Yeah.
[01:16:55] Speaker A: It actually means something.
[01:16:57] Speaker B: It's so passe. I get it.
[01:16:59] Speaker A: Yeah.
[01:16:59] Speaker B: I get it. But it's real.
[01:17:00] Speaker A: Like, it's like. I mean, it's a real thing.
[01:17:02] Speaker B: Yeah. I'm talking about, can you build it in a way that this isn't like words on a wall or like. Or like. Yeah. Like, it has to be embodied. It has to be embodied. You cannot go into the closet, think up the three words and drop them on a group of people, that it won't work like that.
[01:17:21] Speaker A: It goes back to, like, when I think about culture and values and these people in this machinery, and we'll. We'll connect all this and keep the train going. The. It's when there's a situation that's not obvious, that could have economic damage, and you do the right thing.
[01:17:37] Speaker B: Yep.
[01:17:38] Speaker A: When no one's looking.
[01:17:39] Speaker B: Yep. Yep.
[01:17:41] Speaker A: What's the decision?
[01:17:42] Speaker B: How do you behave when. When. At the point of attack.
How are you going to behave at.
[01:17:48] Speaker A: The point of attack, which is business yeah, yeah, yeah, yeah. So you bought the Buy the piece of me. Shino dropped it in. So then you go back to. That reinforces your understanding of people. This is 2018, 2019, 2018.
[01:18:00] Speaker B: I'll. I'll fast forward if you like. The, the. I know we spent a lot of time here. I love talking to you brother, by the way. It's just lot of fun, man. A lot of fun. Grateful I found you in the universe. Which like brings me to. So, okay, so we, we buy. Buy Pulse Dad's shop Tha Precision. Wonderful group of tool makers. I love those guys.
A wonderful man. Jim Thall and his. And his son again, Paul, who. Oh. So we, we concentrate on medical. Business is growing. I really think, like I found something. We, we built the, the mission vision values up in a way where, you know, across the 10 million mark, across the 15 million mark. So like we're charging forward, like. Yeah, we're like charging forward in that, in that time frame. We ironically, like, we focused on like, not just medical, but like we had a local client that was a manufacturer of diagnostic devices. So like a very simple diagnostic device known as lateral flow. It's the technology inside of all pregnancy testers. Or it's basically a paper strip always encased in some sort of plastic. And there's a lot of fascinating. Yeah, there's a lot of intelligence that goes on between the plastic case itself and the strip itself. It helps. It's like basically all of what we did was like tiny plumbing systems, right?
[01:19:17] Speaker A: Oh, cool.
[01:19:18] Speaker B: Basically, like all diagnostic devices are plumbing systems inside of a, of a plastic package.
And the way the universe is going, like in so many other things, it just keeps getting smaller and smaller.
[01:19:31] Speaker A: I have to introduce you to one of my clients. He's a process engineer and he helped build the needles, or they're not the needles, but the piping for like the thing that goes into your brain and into your. The catheters and stuff. Like the guy like a process engineer, it's like. Yeah, he's very.
[01:19:48] Speaker B: So it's all about scale now, Ron. So it's like there's the, like fluids behave at a certain small scale differently than they do at a larger scale. And. And it enables you to like, do more with less and get more accurate and get earlier on like all decision making and stuff. So like, we moved from that lateral flow market to like the molecular diagnostics market. And like, we zeroed in. There was like a bunch of people in San Diego that like, we got introduced to and, and we zeroed in as A company. And then Covid happened, right?
So it was like how many people's.
[01:20:16] Speaker A: Stories and then Covid.
[01:20:18] Speaker B: Yeah, like, so then we were like, like I was in like, what I consider to be like this little wonky space with like molecular diagnostics, pcr, blah, blah, blah. And then all of a sudden it was like my, my grandmother was talking about like a PCR device. You know what I mean?
[01:20:31] Speaker A: So it's like, like, yeah, what do they say? Like, you know, you've hit a bubble when you're a cab driver talking about your business.
[01:20:39] Speaker B: Yeah. And it was like, exactly, man. And like the. There was just a ton of like, as you know, there was like a ton of capital out there.
Then all of a sudden, like, all that money got injected with. With COVID in general. Like, all these incentives got in, like, and like now everybody wants to be in that business. I called it the great gold rushers. There was just like people that had no idea that like, all of a sudden they're just popping up these. And so like, capacity, capital, all these things were like, washing into the marketplace.
And I, you know, like, my phone never stopped ringing in terms of like, people looking to, to purchase us from like 2021 onward.
And I ignored all that. I just considered it noise. And. And then in 2022, a very direct competitor of ours in the United States reached out and wanted to talk about a merger.
And I was like, oh, I entertained that call because the strategic combination of what we had and what they had in their value chain would have really made sense, you know, for the clients.
And so like, for all the hundreds of unsolicited offers that I just like, you know, like, blew off, it was one that I was like, oh, like this actually a lot. This makes a lot of sense. Like, let me actually just talk to these guys. And. And so that really started. I was in like April or something like that of 2022.
And then I got, I got. They were private equity backed firm and they had bought up a couple other pieces of the technology puzzle. And we were like the missing piece in there.
And they later, they, you know, like I had said to David, like, well, if they're. If they make an offer above X value, then I would consider it credible. And it was like they made an offer of like X and a half, you know, And I was like, I was like, oh, like, now what?
Like what? Yeah, exactly, like, whoa.
Yeah, like, what is it? You know, and like. And like I cried like when the man handed me the sheet of paper. You know what I'M saying. And like, he. He said to me, he said, like, I just want you to know that, like, this is a very big deal. Like, very few people, like, get to this kind of place. And what. He. He was a career entrepreneur. So, like, he understood. Like, and. And I. I guess what he meant was, like, not. Not the dollars, Ryan, like the. Just the.
[01:23:06] Speaker A: The story arc.
[01:23:06] Speaker B: Yeah, yeah, like the. The story arc, you know, and then I was like, wow, I am not capable.
I am not capable of sifting through this decision on my own.
There's just too much involved. Even though I was a skilled valuation person, even though I knew my business back and forward, even though I knew my industry back and forward, that's when I just started much.
I would say that my greatest strength is my desire and ability to learn.
And I said, okay, there's this body of knowledge associated with exiting, right? And I'm gonna go. I'm gonna go seek the universe for this kind of information, much like I had done for any other piece of information that I needed along the way and amongst a number of other inputs. I found your podcast. I think I probably either found it through Warlo or you referred me to.
[01:23:58] Speaker A: Orlo and did you LinkedIn me or something like that? I can't even remember.
[01:24:02] Speaker B: I'm not really sure. I'm not really sure. But, like, I will say that the frameworks.
The frameworks that you got, like, I remember, like, I showed you my three statement model, and you're like, oh, this guy doesn't really need them.
You're like, this guy's like. Like, usually we come in and it's like a shoebox. Right? Like, that's like, you used to find it.
[01:24:20] Speaker A: I think you and I will validate everything you said where, like, you have.
You have. No, you knew all of your inside and out. Right? Like, you like and like that. Because there's one. There's kind of like a way that I think about approaching a decision.
And it's like.
You heard of OODA loops?
No, it's. I love the word. I know it sounds like Froot Loops.
Okay. OODA loops. And why I bring this up, Tom, is it's about decision making. Like, and I think about, like, what we continue to like, surfaces, for me is I. We're just constantly deciding as humans in relationship to our goals and the priorities that we have and the constraints that we have have. And so you said that you understood all of those things, but then you're still stuck with a choice.
[01:25:09] Speaker B: Yep.
[01:25:09] Speaker A: And so I think it's just Fascinating because like, it is, it's really just about decision making. Right. And so when you reached out, you're like, so you're, what were you toying around with in like, what was challenging of a decision making?
Like, what was tough about the decision that, that led you to seek out other things. Like what were the variables that were not obvious?
[01:25:30] Speaker B: Oh, I guess because I knew it was like kind of a one off thing too. Right. That's, that's the other problem with this is like, first of all, you don't have experience.
Right. If I had experience, then maybe I didn't need it, you know, like, then I would have already built up that help. That's.
[01:25:45] Speaker A: Yeah, but what's so fascinating about you is like, you knew 10 times more about valuations than everybody else that I had ever.
[01:25:51] Speaker B: Yeah, yeah.
[01:25:52] Speaker A: So like, you could have actually fumbled your way into like making a really good decision compared to all the other people that are blindly confident.
[01:26:01] Speaker B: Yep. I, I think like my, like another part of my nature is like, I, I, and sometimes this helps and sometimes this hurts is like I perseverate or like I, I, I seek information, you know, and, but again, like, I think in this case it was the, it was a wise choice in this case because you only have one crack at, you know, like, okay, like, yes, I could rebuild, of course. And like, and like there's people that do this dozens of times. Right. So, but, but in this case it was my first and other than, other than, other than thaw and the purchase there on that side and also the purchase for my desk. So like all these things led up to this. So I did, I did have some experience.
But it does very much feel like a, like when you're in the middle of it, it does very much feel like, wow, like this is a big deal, like super bowl of your, this is only one, like this is only gonna happen once and you know, need the right people in your corner, you know.
[01:26:58] Speaker A: So what I think is, as I had, because you are very familiar with my new material, you were at the quarterly workshop recently. Yeah.
[01:27:06] Speaker B: Thank you, by the way. That was awesome.
[01:27:07] Speaker A: Also fun. Dude, we're gonna figure out how to work together too. Yep.
[01:27:11] Speaker B: No doubt.
[01:27:12] Speaker A: Up is, you know, ownership versus operator. This was an ownership decision.
And you came to me because at the, at the moment, years ago, I was like, more focused on like, hey, this M and A, there's like, you know, grow and sell, you know. Now thinking about it just like a upstream, a little bit of like, hey, even before this you were doing A lot of ownership thinking before that. But when I think about your and I's conversation, like one of those couple, like really deep, like weighted conversations, there was serious thought for you of like, keep the business step back versus sell it versus take it to market with an auction.
[01:27:54] Speaker B: Yep.
[01:27:55] Speaker A: What were the variables at play that were highly weighted for you that you were thinking through at that moment? Do you remember?
[01:28:03] Speaker B: Oh, like the. They were like certain market forces, like I said, like the, the. The fact that like we were.
[01:28:11] Speaker A: We were.
[01:28:11] Speaker B: We were diagnostic specific.
Right.
And so there was very much like, I think it felt like. It felt like this could really be a point in time.
[01:28:24] Speaker A: There was a lot of momentum in.
[01:28:25] Speaker B: Your industry and this could be a point in time. Yeah. So that was like the market forces that existed at that time. And then this just the decision like with the. Unlike the earlier time in 2016 and 17, then like the partner we eventually sold to, like the cultural and the technology fit, which is fantastic. And the intention, their intention for the business post purchase.
And so like what the sale would mean to the. To the, to the.
To the employee, to the members of the community, the natech community and to the clients, I guess was. Was. So all three of those things came together, like what it meant to me personally, what it meant to the clients and what it meant to the community, you know, in a way that like, it felt like the most.
Most respectful decision in the universe, you know?
[01:29:28] Speaker A: That's so awesome, dude. Because what I have tried to do with my playbook is try to bring those variables to light because, like what I believe, like, because it wasn't obvious for you, man. Like, I remember you like, why Again, I. No, it wasn't. But like you thought so hard about it. I remember you tearing up on one of our calls because you're like, it's not freaking obvious. Again, this is a final decision the moment that this goes down.
[01:29:53] Speaker B: But what you're an employee then you're an employee, bro.
Yeah.
[01:29:57] Speaker A: And I wasn't very good at it.
[01:30:00] Speaker B: Once the sale happens, then you're. You're employee, you know?
[01:30:03] Speaker A: Well. And what. What I find fascinating about your level of thought, your like, level of decision making, like how you make decisions. And like there's this bas, like what I want, like what I want for everybody is like the level of intention you had behind it. Because like you who understood valuations, like what I think so many people get effed up with them is like, if I don't know that this phone is actually worth 1200 bucks or 1100 bucks and someone's offering me five grand or 200 bucks, I get distracted with the price and the terms and all this shit versus, like, hey, I actually need this phone and how do I replace this phone? Or, like, you know, I mean, like, it's. Yeah, you were, you were like, let me know if I'm on track or off track where you were able. I think I saw you able to place the right amount of space and time thinking about the cultural fit, the strategic direction fit what you were going to be doing after the sale because you didn't have to, like, swim in the turmoil and chaos of what valuations meant to you most of the time.
[01:31:08] Speaker B: Yeah, that, that, that is true. That is true. Like, I also had like a, like, like, I had an understanding about, like, a deep understanding evaluation, which is like, super helpful when you're negotiating with third parties whose business is, you know, like, if you're gonna. If you're gonna.
If you're gonna sell to an outside party, it's either going to be a strategic or a private equity firm. A private equity firm, it's their business to pay the least for that business. And at strategic firms, they have entire departments that are dedicated to valuing companies, right?
[01:31:38] Speaker A: And if they don't buy you, they're going to take your IP and your trade secrets, and you have.
[01:31:42] Speaker B: You're at.
In many cases, people are at an informational disadvantage. An informational. And like, you're. You're bringing a knife to a gunfight, so to speak. Right? It's like.
So there's a very real information gap that I think needs to be closed if you're going to make a skillful decision.
That's from the company side. From the personal side. I don't know if you remember, you had this cool worksheet. It was like a personal water flow calculator. And you encouraged me to. What is my ideal life look like?
What does that ideal life cost at? What number does it allow for that ideal. That ideal?
[01:32:22] Speaker A: I still remember you pulling up the spreadsheet. You spent a lot of time with it.
[01:32:25] Speaker B: And like, I, I use that thing today, man. I go back to that thing. Like, I, I love that spreadsheet. And it was another one of Pat's creations, I think. Right.
I don't know if I'm telling too close the line. If I am, you can cut it out.
[01:32:37] Speaker A: But no, the, the endless pack creations.
[01:32:40] Speaker B: Yeah. This is like a pack creation. It was wonderful, man. And like, it just, it, it just. Again, like, the question comes up, like, how much is enough?
Right. From a personal perspective.
And what does that mean?
And there is a dollars and cents thing that can be gone on in that, which you did a very good job of illustrating that. And then there's the sense of fulfillment, the sense of belonging, the meaning and all those other things which again the business aspect of it, valuation, community, clients. Right. And then there's like the personal aspect of it, like who am I after this transaction is over? And like that, that side of it needs to be resolved. Like, well resolved I think otherwise when you get to the end of the road and I don't think like we talked earlier about fear and like some of it not being optional. I think that some of the, some I knew I was smart enough and I'd done enough personal introspection to know that like whatever I did six months later I was going to tell myself like, oh, I wish I had done this, you know, because that's just the nature, that's just the nature of the human experience. So I knew that there would be anxiety either way.
Again, like going through the process of aggregating information in the universe and making the. And I made the best decision. I couldn't. And I do feel like it was, I do feel like it was the right decision on a lot of levels.
[01:34:04] Speaker A: I do well and that's what, what I. And I think you articulated that super well because I mean me on the other hand, I'm 11 years afterwards and you're part of my 10 or 11 year therapy session, Tom. So thank you.
[01:34:18] Speaker B: Happy to do it.
[01:34:20] Speaker A: Well, in it, it's because I, I was talking to one of my clients recently. We were like, they've done a lot of really ridiculously good work where they've got their three statement model, they've got a lot of their comp plans and a lot of their play. Like, and at the end of the day, so we're sitting there looking at the cash position at the end of the year, it's still a frickin bet, right? Like it's still a bet, like what are we gonna do with this distribution acquisition? And you know, like we're still taking a bet. But what I think is possible is to look ourselves in the mirror and say, I thought through every variable, it's still unknown, but I went from a 50% confidence rating to 80 and then just like. So that way like for, like for me, Tom, to how you kind of word it is like, like just eliminate all the resentment and regrets that you have on for yourself later.
[01:35:10] Speaker B: It's like, hey, to the Degree that you can, right?
[01:35:12] Speaker A: To the degree you can.
[01:35:13] Speaker B: Yeah, yeah.
[01:35:14] Speaker A: Like, hey, I couldn't have done anything else because I had all the information at my disposal. I still made a bet. And I was. I had this woman, Candace, on the podcast recently who I really enjoy, and she is one smart cookie.
[01:35:26] Speaker B: And she listened to this one yet. I can't wait.
[01:35:28] Speaker A: She's awesome. Yeah, she. She worked in private equity, venture capital, public markets, and then she scaled her own company from 0 to 10 million bucks. Bucks. She almost sold it. And she's like. So, like, there's no lack of information that she had. And we were talking about assumptions. And she goes, and I made the wrong assumption. And she goes, I can still say to this day, I would have made the same choice. It was definitely the wrong choice. But I know that when I made that choice, yes, if I go back, I would have continued to make that choice. She goes, but I was wildly wrong.
[01:36:02] Speaker B: She chose to hang on rye. Is that what you. She chose to hang on?
[01:36:05] Speaker A: Yeah, she chose to hang on. And then the whole thing. Shit the bed.
[01:36:08] Speaker B: And yeah, it's powerful because, like, you believe in yourself as an entrepreneur. The way that you got there was you believed in yourself.
Right.
And you've become very familiar with betting on yourself. So it's very attractive to imagine that whatever success you've had to date, you're just going to replicate it. The thing that needs to be balanced with that is that, like, there can be 10 year periods and we had this at Natech. There are periods where you just bounce around a certain area.
So it's like. And, oh, like one of the good pieces. I got advice I got, which I forget where it came from. One of the podcasts, or maybe more than one where it was like, you have to leave running. Like, it's okay to sell too early. Like.
Like, I forget exactly how it's phrased. It was so elegant, but just like the, the idea that, like, you leave enough running room out there for the next party. Right. Like, if you think you're gonna get it where, like you squeeze every thing out of it like this just. It's just. It doesn't. It doesn't happen. Like, it has to.
It has to be someone's buying it.
[01:37:10] Speaker A: Person, you know, someone's buying a future stream of cash flow.
[01:37:13] Speaker B: Yeah.
They have to be able to envision. It has to be real. Right. Right. Yeah.
[01:37:18] Speaker A: Well, here's where there's a. A fascinating dynamic at play here.
And I want to make sure we close out your story, but I want to maybe, maybe plant a seed for you and I to talk about this now or in a different episode. But is given the debasement of the monetary system and the dollar, like I think the valuation formulas like in the DCF time, I mean like very straightforward. The risk free hurdle rate of, of the Treasuries is total bullshit because we're printing 8% a year. So the whole DCF model is completely effed and all of the valuation models out there are completely effed. So what happens is, is that, you know, when you talk about this next, someone has to have that growth.
[01:37:57] Speaker B: Growth.
[01:37:57] Speaker A: I think that there is a strong argument these days where like if you were to take like a full outside view of just your company as an investor and say, well, what's the best investment decision without all of like the emotions which is real again, it's almost impossible to do this but keep the cash flow and the distributions and actually keep the cat free cash flow. And Bitcoin is now inserting into the scene say okay, well is that the new risk free hurdle rate? It's volatile but they're like, I mean it's grow. There's a argument now I've got people I know that I work with where the Bitcoin 30% compound annual growth rate is like their hurdle rate for every investment in the, in the company now. So you go, okay, well now we start to balance out diversification streams of cash flow. So like, okay, here's where I'm going with this is like if someone were to say, okay, maybe these variables of like, I like my playground, I want to make decisions, but I don't like my job. I still need to think about my wealth and all those numbers that you talked about. And now the paradigm has shifted. It's even shifted more so since you and I talked years ago.
There's this opportunity to keep the infrastructure of the playground and how did you weigh that playground in that laboratory?
And the value of having the resources to deploy ideas on top of then the investment decision on top of all, you know, like there's all these variables that I have had a hard time trying to help people weigh all of those different variables.
[01:39:27] Speaker B: Yeah, look, I mean you've always been, just by the nature of our journeys, you've always been a little bit ahead. You bit. You're ahead of me, right? Like it's like I, I came to you because you were at that time five or eight years in post exit. Right. Of your family business.
And so it was like you, you showed me things or ways of Looking at things that I wasn't thinking of at that time. And I think here you've now spent the subsequent eight years sort of honing in on this model. Right. Which like, I think is the right work. I love the work that you do and I love that direction because, like, I also feel like I have like, a bit of a calling to not only build things, like, the creativity aspect is so near and dear to me and being able to like, coach and just.
I'm getting to the point in the timeline where, like, sharing my experience feels like the real value.
[01:40:19] Speaker A: You know, you're not gonna be like a dad where you're gonna start another plastic injection molding company.
[01:40:24] Speaker B: Would I do that? I, I mean, I highly bet no. You know, yeah, exactly. And exactly. So I think that, I think that what you're bringing up is like on the, on like the bitcoin and what's going to happen with the economy and all this kind of stuff. I, I, I, I look at that the way I look at like a tsunami or like a, like a, I'm like, well, if these things happens, I got bigger problems. So like, like, or, or, or like I'm gonna, like when you talk about like, oh, well, you sold for like a big boatload of fiat currency and it's like, wow, man. Like, that's just hard, that's just hard to hear.
[01:40:58] Speaker A: But it's a big effing boat. So like, yeah, but, but there, that, yeah, I think therein lies. So like, I, I want to make sure that we cover appropriately, like, the deal structure because like, you, you and I talked a lot about how much do you need at closing.
[01:41:14] Speaker B: Yeah.
[01:41:15] Speaker A: And then how much is okay and how much do you need? Because what ends up happening is like, it. People have those, those tentacles afterwards and then they don't have any control.
[01:41:23] Speaker B: I think to me, I lived, I lived in the fear of. I was, we were always like home equity line of credit on my house.
401k is all like the 401k for more than a decade, Ryan. And I was like one wrong decision away from it felt like. I don't know if this is actually true, but I was like a decision or a quarter or a client away from financial ruin. Right.
[01:41:51] Speaker A: I'm only laughing because I completely resonate.
[01:41:56] Speaker B: The value of getting out from under that is priceless.
You know what I'm saying? And look, man, I could have just as much fear today with the dream that was natech plastics, like, like actually being capitalized. Right? Like, I, I, I had an Asset. Like I wasn't just a job, it was actually an asset. I realized the value of that asset. Now I have that asset in another form. Right. And I can have just as much fear today with, with that. Right?
But, but there is something about having. Yeah.
[01:42:27] Speaker A: Isn't it interesting though? Like when you trade that is interesting though because like all of a sudden you're like, you're like. Because I had this one guy, he sold for 35 million bucks and he's like, I just wanted to be worth 35. And I was like, Dave, know you, you are. It's just in a different.
[01:42:39] Speaker B: Yeah, yeah.
[01:42:40] Speaker A: And he just could like, no matter what, Tom, he could not wrap his head around the fact I'm like, dude, you're already worth 30 million bucks. Like you're just transferring it into something else.
[01:42:51] Speaker B: Totally. Here's one, here's another one that's important I think for post exit people to think about is like all of a sudden like I find myself like I get really conservative around, around my personal capital, right?
And, and it's like, wow. When I think about it's only because I'm like I'm, I'm unskilled and I'm uncomfortable around that.
Like if I told people the kind of decisions that I made at nature.
[01:43:13] Speaker A: Here's a half a million dollar machine.
[01:43:14] Speaker B: And then, oh my God, they would like five whatever, you know, give me the bucket to, to throw up, you know what I mean? Like, and like I made those decisions on a daily, right? It's like.
And now all of a sudden it's like, no, like, where's that $50,000, you know what I mean? It's like, it's like no, right? It's yeah, it's like different.
[01:43:31] Speaker A: But what I think is fascinating, Tom, in like.
Because I don't care whether someone sells or keeps it or does any kind of combination in between. It's just thought through. Which is why I've always enjoyed our conversations because just, hey man, let's like in, in six months when we're looking in the mirror we're like, I tried my best. I made all the decisions based the best I could. But what I think is fascinating about as the paradigm is shifting and it's very recent too. So like I don't go back and like rethink everything but like as the paradigm is shifting, I mean like, like at the moment, this week that we're recording this, every developed currencies, 10 year treasuries having an allergic reaction to the deficit spending everywhere. So like we are in this. It's flipping on its head the all the paradigm. But where I why I'm bringing this up is because now like three years ago when we were talking, it wasn't a big variable, but now it's like, hey, if someone knows their business that well and they understand the valuation, it's an interesting variable to think about. It's like, hey, I might not like, okay, what do you do with the money? It's like, okay, well I don't understand these different like ways because it's true because my dad and I same thing. Like it's like quarter million dollar payroll, we have no money ever. And next thing you know, you have all this liquidity and you're like, I literally have no idea.
[01:44:53] Speaker B: Right. And you're not skilled, you're not skilled at all.
[01:44:56] Speaker A: The guy going through liquidity, really? Liquidity.
[01:44:58] Speaker B: I was not skilled. I was not skilled.
[01:45:01] Speaker A: You know, I don't think well. And first of all, the people that pretend they're skilled don't know about money. It's like how much assets under management. And by the way, it's a, you know, it'll be a 1% and we're going to put you in stocks and bonds. It's like, and like I just had my friend on the podcast too talking about he's a family office, he manages very large estates and we were just talking about just a complete misalignment of incentives. Where I'm going with this is like, okay, well if the traditional investment thesis is kind of ass backwards now because anybody that's got bonds is losing money, it is what it is.
So then you go, okay, well what then back to your point, what do I do with all this stuff? Well, it's like now there's a new, newer or it's, it's always been there, but maybe more weighted of a relevant decision to say you knew how to place those bets in the company so that someone listening in, it's like, hey, you know something very well.
You know, you were at a peak man. Like, like, like you were your business, the industry and stuff like that. But if someone can see into the future, like five, ten years, like this is a good business.
[01:46:03] Speaker B: Yep.
[01:46:04] Speaker A: You know, given AI and trade and all this stuff and the boomers like, hey, this is still a good business. Like it might be a good decision to keep the business and just get out of the job.
[01:46:15] Speaker B: 100, 100. Also like the, this is something you concentrate on the beginning and you continue to. Right. Like the growing for growing sake.
Right.
And like how that's like. And revenues vanity and profit insanity. Right?
[01:46:28] Speaker A: Inc. 5000. Yeah, baby.
[01:46:31] Speaker B: Yeah. It's like, oh, like, let's just grow, right? Like, why do you want to grow? Like, I have no idea. But like, let's just grow. And like, I have greater appreciation now. I'm doing just a little bit of like, dibbling and dabbling with investors. I'm definitely, like, I don't even consider like personal finance, like, a way that I will actually accumulate additional capital. Like. Like, for me, it's like only in private business. Like, I was once heavily overweighted in a single micro cap stock known as.
Known as Natech Plastics. And I. And I look forward to. I look forward to a place where like I once again involved in the great American experience of entrepreneurship, you know, and I'm making some decisions in that regard to like, use this capital to make investments and in. In operating businesses again because I really feel like that's where for me, that's my comfort zone. I don't get scared of that, right. Like, I don't have to worry about like, what is the Fed doing with this or that, right? So like, yeah, it's like I can, I can build a bit.
[01:47:29] Speaker A: Just like maybe maybe New Jersey real estate, right?
[01:47:32] Speaker B: Maybe. Maybe that I can handle. I'll go right to the town of Clark office.
Right? It's like, you know, or. Or we'll separate the pieces on the kitchen counter into wicker basket gets for $2 a box like that. That, you know, that kind of way of doing things. Like, I can. I can understand and it's granular and like you said, you could build a really nice life and to bring it back around again, like. Yeah, like, that's the. Yeah. So like all your.
[01:47:59] Speaker A: You've thought so. You're such a thoughtful person as you look and you just reflect. If you were to go back to Tom at the day that. That you bought it from your dad and say, hey, what advice would you give yourself that day?
[01:48:17] Speaker B: Oh, that a lot of the pain is optional.
A lot of the suffering is optional.
[01:48:24] Speaker A: In what way? What do you mean?
[01:48:26] Speaker B: I mean the fear, the false evidence appearing real around the decisions that. Oh, to trust yourself to really interesting. Yeah. To trust yourself to trust the decisions that you're making to continue people as the core of everything. Right.
[01:48:45] Speaker A: That's awesome.
[01:48:46] Speaker B: Yeah.
[01:48:47] Speaker A: Do you know Naval Ravikrant? Ever heard of him?
[01:48:50] Speaker B: I may have. I'm not sure. Yeah.
[01:48:52] Speaker A: Oh, he's. He's like a freaking like new. New age Socrates Buddha and yeah, he had he. He got asked this question and, like, almost in various different words, said the same thing. And, like, so, like, you are also a Buddha, I guess, because he said, like, he worded. It was like, hey, if I were to go back, it's like, hey, the journey is the journey. Just be more gracious with yourself.
And you kind of said, like, the sufferings.
[01:49:20] Speaker B: Right?
[01:49:20] Speaker A: We're gonna go through it. Like, hey, maybe just enjoy it a little bit more.
[01:49:24] Speaker B: Yeah, yeah.
[01:49:25] Speaker A: Oh, that's awesome, man.
What is you happy, like, nowadays? Like, how are you spending your time?
[01:49:32] Speaker B: That's interesting. That's another thing, like, thaw precision. So I had this, like, I did this. Another complicated spreadsheet that. I'll send you a copy. I think I might have sent you a copy of it, but it was like, oh, where do I spend my time? Like, when I was making the decision to leave employment, I really thought through, like, where do I spend my. Like, okay, like, I go, like, well, what's gonna happen with that time? Like, where am I gonna spend this?
And I developed, like, a bucket. A bucket of time.
[01:49:56] Speaker A: And you have a pivot table with, like, your different weights and different weights.
[01:50:05] Speaker B: And red, green, and yellow and. Yeah. The whole business.
[01:50:08] Speaker A: Maybe you are more related to Pat Hobby than do you have a discounted cash flow of what?
[01:50:15] Speaker B: There's a present value of meaning, right? Like, what's the present value of purpose?
Right.
[01:50:22] Speaker A: Oh, God, that is good.
[01:50:24] Speaker B: Oh, like, I had an idea. Like, anyway, like, I'm putting a lot more energy into my home, into my relationship, you know, because, like, that's awesome. As a business owner, like, you know, nearly 40, 50 of my time is spent. Like, my 40 or 50 of my actual available waking time was spent in the business. And that's a tremendous amount of time because we sleep eight hours a day. Right. I'm 76 when you get out of the house.
[01:50:46] Speaker A: Yeah.
[01:50:47] Speaker B: No, man, we're. We're enjoying ourselves. Like, we. We. Again, like, there was. There was a lot of, like. Like neglect around. Around the home environment itself. So I'm, like, really making it a place where I love to be. And.
And also, like, we're. We're like, you know, two days ago, went into the city just for a day to be together. Got a nice.
Yeah. This stuff. So, you know, you talk about time as being one of those.
One of those variables. So I've. So there's that, like, the home and the relationship are the places where I'm really spending a lot more time. And then whatever I do from a business Perspective, like managing my wealth or, or creativity around like what am I going to do next? This kind of stuff is like I'm really doing it. I'm trying to do it. I'm not always successful, but I'm trying to do it in a way that it's, I'm not grinding, you know.
[01:51:38] Speaker A: Have you processed it? I mean, because it takes, I find it takes a long time. I mean you went from all that risk, all that stress, all that to being liquid and then having no employee. Like, like what, what. How did you process that actually? Like, and like have you given yourself the space and the time and.
[01:51:57] Speaker B: Well, when I sold and then I was just working as an employee, it was in many ways it was a much more stressful job than before, you know. So I, I, and that only ended in, in April 30th of this year. So it was like like post sale go to work for the new owners. Now you're going from a place where like oh like the one party has just like closed the chapter and the other party is like opening a chapter and their expectations are like super high. Right. Because like oh, they've just made.
[01:52:23] Speaker A: It's time to get going. Yeah.
[01:52:25] Speaker B: Everything to work. It's like the start of something new, you know, and it's like meanwhile, like as the owner you're kind of like, you know, like you've just gone through the other side where like you're completely tapped out. So it was. And also like the, but in a world of like some. We joked a couple times about like please, please tell me what a good boy I am or please clap for me right now. It's like after, after years of like so the ultimate avatar of that, you know, me and my dad's relationship and then being on my own and being free of that for a period of time and now like oh my God, like installing, installing this third party that now like my entire job became like like what's the results to somebody else? So it was, that was very stressful transition to me.
[01:53:10] Speaker A: And what was it like quitting and.
[01:53:12] Speaker B: And, and not only that. The irony of it is that that the, the party that the, the you know that I we sold to a German company. So it was like I went from having a German accent and being an arbiter of, of of my success and failure to them like, like that it came back. So it was like, it's like, hey.
[01:53:33] Speaker A: I sold back to our ancestors.
[01:53:35] Speaker B: Yeah, yeah, yeah, yeah.
Like I had something, something about having, having that kind of leadership, I guess attracts me in some way.
[01:53:43] Speaker A: So you thought about, like, what your dad would have thought of everything.
[01:53:49] Speaker B: Oh, he would have loved it. He's.
[01:53:51] Speaker A: He was.
[01:53:51] Speaker B: He was an entrepreneur. I often thought, like, if. If, you know, like, I would. I would love to have him to have been present during that time period. First of all, he's like a rock emot. Like. Like a good bull arc. You know, so many times I'd be like, oh, like, remember when we were employees for our parents, Orion, and we. We had somebody we could point to and be like, if only they listened to me or they made that they won't make. Right? And then, like, all of a sudden, when I was free to make those decisions on my own, I was like, God, I wish my old man was here so I could.
[01:54:25] Speaker A: No, Right?
[01:54:26] Speaker B: Yeah. It turns out when you remove somebody to blame, like, like, then, like, you would like to reinstall, right? Like, so it's like.
[01:54:35] Speaker A: Exactly.
[01:54:36] Speaker B: Yeah. Wait a second.
[01:54:37] Speaker A: Wait a second. My. My favorite phrase is, I run, and then there I am.
[01:54:43] Speaker B: Yeah, yeah, yeah, that's right. Wherever you go, you find your family in Dragon, you know, it's like, yeah, he would have loved it. He would have loved it because, again, because it was a good decision for the community, the clients, and it was a wonderful technology match.
And. And also, he was just a. He was just a builder, so, like, he didn't have that kind of, like, he was a real entrepreneur. He didn't have that kind of like, some guys, like, get really caught up in, like, the name on the window or the. Or the. Oh, like, this is my family. Like. Like, he. He was business, you know, so he would.
[01:55:18] Speaker A: He would recognize that, watch it grow.
[01:55:20] Speaker B: For what it was.
And. And he would not have had, like, some emotional attachment to, like, oh, like the name on the window or something like that.
[01:55:28] Speaker A: I bet. I bet you he. I bet you you would have gotten to that.
[01:55:31] Speaker B: A boy.
Yeah. Yeah, I probably would have got one. It would have been the first one. Maybe from your mom, maybe from 86. No, this one, I would have got the right.
[01:55:43] Speaker A: Tom. This is, like, it was long overdue, man. I am so happy that we got to spend. Spend this time together.
Very excited to continue our conversation, see what we can do together.
I'm very happy for you, man. I really am.
[01:55:56] Speaker B: Yeah, I would love to continue to collaborate. Ryan, thanks for everything through the years, and I'm really grateful we had this discussion this morning.
[01:56:02] Speaker A: Yeah. Yeah. People want to reach out. They go to your LinkedIn. What's the best. Do you have a website yet?
[01:56:08] Speaker B: Or you can reach me on, you know, LinkedIn. There's my email is up there.
Yeah, Doing my thing, man. Happy to talk. I love it. All things creative with business owners.
[01:56:19] Speaker A: So that's awesome. I appreciate the time.
[01:56:22] Speaker B: Yeah, man, take care now.
