00:00:00Strategic Insights for Business Growth
00:03:25Leadership and Investing Strategy
00:15:53Succession Planning for Business Owners
00:19:19Evaluating Business Investments
00:30:22Innovative Mindset for Business Success
معلومات عن هذه الحلقة
To better understand why your business isn’t meeting its full growth potential, you sometimes have to look from the outside in. Getting an outside perspective into your business can give you helpful insights to make decisions that accelerate growth. Venture capital firms often perform deep dives into prospective businesses during due diligence, which helps uncover a company’s strengths and weaknesses. After examining so many businesses, investors understand what separates a successful business from its competitors.
Missy Kelley and Dave Hartley, co-hosts of But Who’s Counting? were joined by Tim Spihlman, Managing Director of Lewis & Clark Ventures and Lewis & Clark Capital to discuss how business leaders can fuel growth and company value and what steps they can take to build a business investors want to partner with. The free-flowing conversation also included actionable tips to improve accountability within your workforce, identifying your biggest barriers to growth and the following:
- Traits the best leaders have in common
- The key tenants of retaining the right employees
- Where Tim sees AI’s biggest impacts on businesses
- Why it’s important to adopt an “innovation mindset”
“You have to be equal parts empathetic, strong emotional IQ, with equal parts accountability. Your employees need to know that what they do matters. They need to know that you value them and you treasure them as humans, but that doesn't mean you get a pass when you don't perform.” - Tim Spihlman
Resources to Count On
Want more insight into the conversation? Check out these additional resources:
- Connect with Tim on LinkedIn
- Learn more about Lewis & Clark Ventures
- Get to know Lewis & Clark Capital
- Check out ChatLingual, the AI customer service translator
Make sure to never miss an episode by subscribing on Spotify, Pandora or Apple Podcasts and let us know what you think by rating and reviewing. Keep up with more Anders insights by visiting our website and following us on social media:
Facebook | LinkedIn | Instagram | Twitter
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WEBVTT
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You're focused on making important decisions to take your company to the next level.
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But who's counting?
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We are.
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Counting on trends and insights to move your business forward, operationally and strategically.
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Focused on helping executives achieve their highest potential.
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But Who's Counting?
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is a podcast shedding light on and breaking down critical issues and opportunities for businesses.
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Brought to you by Anders CPAs + Advisors .
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I'm Dave Hartley.
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And I'm Missy Kelly.
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And Missy and I just wrapped another episode of the but who's Counting podcast.
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Our guest today was Tim Spillman Spihlman Tim is a managing director of Lewis Clark Ventures, lewis Clark Capital.
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Missy, I love Tim's comments today about how to make your business .
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.
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.
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really.
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He he had three tips tips: the three tips to make your business most attractive to outside investors.
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I also loved his comments around the importance of leadership, teams, leaders and succession planning.
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For me, I thought that was great.
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.
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Yes, and for me, my favorite part was the guidance on how to have an innovation mindset throughout your firm or your company.
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And that is to ask yourself every day what can I do to make the business better today?
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And that's really the driver.
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And if you can do that from the top of the organization all the way through sounds simple, may or may not be easy to do, but it's a good question to ask and that's how he sees success coming through.
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Yeah, and I think that's how you drive innovation.
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So that was really interesting.
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So, yeah, tim drops a lot of great ideas in this episode.
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So to our listeners, enjoy the show.
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Welcome back to another episode of the but who's Counting podcast.
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I'm your host, dave Hartley, here with Missy Kelly.
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Our guest today is Tim Spillman.
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Tim has served in both CEO and CFO capacities, plus serving as a board and audit committee member during his 20-plus year career.
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In recent years, tim has shifted his focus from running businesses to the investing side of business by joining Lewis Clark Capital and Lewis Clark Ventures as managing director, managing investments in over 20 companies representing over 300 million in investments.
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Tim has significant experience in growth drivers of business, both organic and via acquisitions, having executed over 6 billion of M&A transactions.
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Tim came into the business world as a CPA and spent time working in Big Four as a financial statement auditor.
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Tim volunteers his time, serving on two nonprofit boards and is a proud supporter of his Bradley Braves.
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So, tim, welcome to the show.
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Yeah, thank you.
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It's an honor to be invited.
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Appreciate the opportunity.
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So, tim, it's interesting the career transition that you made.
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You were sort of you were running companies and then you decided to make the shift to investing in companies.
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So I guess, talk to us about how.
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Did you learn the worlds of private equity and venture capital?
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Were you already familiar with the investing side of business before you made this switch, and have you been involved in buying and selling companies extensively before?
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Talk to us about the background.
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Yeah, no great question.
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So the short answer is yes.
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You know, in my role as operators, particularly with a financial background, you do get involved in transactions.
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You know that your companies make and you know I was head of strategy for a large global company for a couple of years as well.
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So then I was creating the investment thesis and executing those investment theses within, you know the company that we had, which is akin to what you do in private equity.
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Now to your question you know how did I learn it?
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What I would say is, yeah, I'm still learning, but I think I've got a good operating background that underpin a lot of the things that make acquisitions successful.
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But just as important in that question is who I work for in that Lewis and Clark is is a bit different in that it's a very operator first, operator centric business model, and I can tell you that the vast, vast majority of PE firms and I've worked with four or five different middle market firms based on the East coast If you went to them and said I've got 30 years of operating experience and I'd love to now be truly in the partnership at private equity, they would say, hey, interesting, but no thanks.
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And so I found a partner in Lewis and Clark that really values operators first and says operators are who we'll build our business around and that's who will make our decisions, versus someone who maybe is very steep in transactions but maybe not quite as deep in operating.
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So do you?
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Generally?
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What's your thesis in terms of, like, how long do you hold?
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Is it basically, are you in and out in a couple of years, or do you buy and like, build together?
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What's?
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How does that work for you all?
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Sure Well, we I manage two different investment vehicles.
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So on the venture side, obviously you don't take a majority position in companies In round numbers.
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Your LPs limited partners are expecting cash back in sort of the five to seven year timeframe.
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So that will guide a lot of what we do and how we think about when it's time to get out.
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On the private equity side, which is Lewis and Clark Capital, we've held companies, we've owned one now for over 20 years.
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And, what I would say is, we don't have a duration-based investing strategy.
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We have a capability and milestone-based strategy, which means we buy a company.
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We believe that we can get it from X to AA.
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We hope we can get it to AA in a certain amount of time, but the reality is, when you get to AA now you say I'm at a point of optionality, is it time to exit or do we double down?
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Leave some chips on the table, go at it again.
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We have the flexibility in the private equity world.
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We're what's called a family office, so we're investing off the balance sheets of high net worth individuals which, in comparison, most private equity firms have limited partners.
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These partners come in.
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They expect to get their money back as I said earlier, similar to venture in five to seven years.
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We don't have that same mandate on our private equity side.
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Of course, the folks that provide us the funding expect a return, just like anyone would.
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But we do have some flexibility on timing, which is great.
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So were you already familiar with the investing side of business before you made the move to Lewis and Clark?
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Yes, I was In my role in the finance side of the world and in strategy, you're constantly making investments in your company.
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If your company is executing well, think about it this way.
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Every time you do a budget, it's simply an allocation of funds.
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So where do you want to invest A, b or C?
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Now that investment is simple, like hey, maybe I invest in technology, maybe I invest in my sales team, maybe I need more marketing support
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class="MsoNormal">So what’s been the biggest surprise that you’ve discovered since
you
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got involved into this type of investing.
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Sure so.
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And the reason I got into this side of investing is after, as Dave mentioned in the intro, a bit after sort of 30 years on the operator side, I kind of stepped back and said, hey, how can I best impact the most people for the rest of my professional career.
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I felt like I'd accomplished a lot of things personally and I decided it was time to stop thinking about Tim's goals and start thinking about how can I be a broader help.
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And I wasn't sure how that would resonate with folks.
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I mean, it sounds good and oh, that's nice, but but like, can you put it in action on a daily basis?
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Your company is struggling and I'm trying to positively impact people, but yet you got to hold people accountable.
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And what I have found and I knew it and I saw it before, but I see it much more now is when times are tough and you have the tough conversation and hold people accountable When times are tough and you have the tough conversation and hold people accountable, people value that.
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of great skills but you're missing the mark on this objective, and I want you to know that, like A, I believe in you or B, we don't think you have the right skill set and we're going to try to find where your skill set is best utilized and then fill this gap that you know we all fear that in work.
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.
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Like I think I'm doing a good job, but what does my boss really think?
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And what I found and gained the confidence over my career is to, like, have that tough conversation and tell them what.
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Like you almost want to close your eyes because you don't want to see the face reaction when you say it, but people generally over time will respond very positively because then there's trust like never before.
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I'm being open and honest with you, but I'm doing it in a way that is not demeaning.
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It's a way that's saying I recognize your skills and I recognize what makes you special as a person.
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However, that may not be lining up with what we need in this situation and can we change it or not?
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And let's figure that out together.
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So we're visiting today with Tim Spihlman.
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Tim, talk to us about I mean, you have the benefit of seeing 20 plus portfolio companies, so I guess, talk to us about the makeup of those companies.
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You've mentioned already that it's very operator focused, but do you go after specific verticals or industries that you're going for?
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And then also would be interested in your take on how consistent is business across those 20 companies.
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Is it 80 percent the same and there's a little bit, or is it?
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No, it's completely different.
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What's your take on that as well?
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Yeah, great, two great questions.
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Let's start with the nature of the companies, which then will help the second question, which is on the venture side yes, we are very clear that Lewis and Clark Ventures our second fund, which is what we're investing out of.
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We look for companies that are software companies working in the B2B space.
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Most of these companies will have a SaaS model.
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Where we invest invest in their life cycle.
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Most companies are somewhere between a million and five million in recurring revenue, so they've been around for sort of three to five years.
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Most are not generating positive EBITDA or cash flow at this point in time.
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They have a visionary idea and they're trying to obviously create an alternative that is very appealing to a current state, in whatever sector they're in.
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On our capital side, we're investing in companies where we take an equity ownership position and, simply stated, what we look for is certain verticals like manufacturing, logistics distribution, business services, where we look for opportunities, where, number one, we find the right leader, which is even more important to us than the sector that we're in, and then, with that leader, we ask ourselves how much can we scale?
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How much fragmentation is there?
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How much organic growth opportunity is there?
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And so the simple question there is what's the art of the possible?
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If you're at $25 million in revenue today, how do we get you to 125 million?
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Do I think this leader can do that?
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And so in both sides it's very leader focused.
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On the capital side again the equity side you've got a leader who's maybe done this for 10, 20, 30 years, whereas on the venture side you've got a leader that's done it for three to five.
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So it's harder to assess, obviously, the leadership capability as someone who's managing a team of 12, all of which are programmers, and say this person's going to be great at leading a 100-person plus company.
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So your second question around volume is what I would say is it does vary, but generally speaking, we've been pleasantly surprised at the resiliency of the US economy on both the B2B side and, to the extent it's relevant, on the consumer side as well.
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So you know we have in the venture side you've got lots of companies doing a hundred percent plus type of sales growth.
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That's common for companies of that size.
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But but even on our more established companies you companies we're seeing growth rates that are double digit 10, 15, 30% and so I would say it does vary.
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But macro level, we're very encouraged by where the vast majority of the companies that we have an investment in how they're performing here in 2024.
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So, when you do find barriers to growth with these small to mid-sized businesses, are you seeing a common theme?
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Do they look similar or are they very different?
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Does everybody hit the wall at the same point?
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No, everybody hits the wall potentially at a different point, but there is one common factor: it's the leadership of the company.
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It is literally that simple.
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So the question is you know there's multiple ways you look at the leaders and one is and it's been talked about in prior podcasts a bit is fear of failure.
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Leaders get comfortable in what they've done and hey, I know, if I keep doing this, you know, rinse repeat, rinse, repeat, I'll grow.
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And then you come along and say, yeah, but how do we grow three to five times, like, how do we put our foot on the gas?
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They have all the ideas.
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They have all the information.
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Them and their team have lived in this environment.
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They know the answers Whether they're willing to make themselves uncomfortable, try something different, adopt AI, attack a new vertical, try to attract new customers.
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Whether they're willing to do that is your biggest barrier to growth.
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And so that's tough when you find that, because then you say can I supplement your fears with subject matter experts inside the company or even as an outsider helping the company?
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You know how do we help you get more comfortable?
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Yeah, sure, we can give you capital, but what you really need is sort of the encouragement and the backing that says let's try this, let's try it together.
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It may not work, we both know that but we're going to go after it.
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So you know, that's why my earlier comment around leadership is so critically important when we evaluate.
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Because if you're comfortable with your business as it is today and you maybe have a desire to transact for financial reasons, lifestyle reasons but you want to stay on, a lot of times you want to stay on because you've been doing this for 30 years and there's fear of I don't know what to do.
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This has been my life.
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Okay, very human, I understand that.
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But on our end, we want to drive a different dynamic and are you ready, able, willing, energy level, financial risk level, able and wanting to do that.
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And those are the really interesting conversations, the heart to heart with an owner during a diligence process that I really enjoy because it's a very personal conversation.
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So how often would you say their response to that aligns with what actually ends up playing out?
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And the reason I ask that is that I can talk to owners who are considering selling and they are often very passionate about the company because it's like a baby or a child to them that they've raised and they're so proud of.
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And when they want to hang on, I can see even maybe them believing themselves oh sure, yeah, I'm ready for that, I can do that and then maybe getting into that and not being as comfortable with it.
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I'm just curious if that's something you see happen often, or are these people typically people that are kind of designed for growth and change?
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Yeah, missy, you know you're spot on with that question and observation.
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These companies are part of the fabric of who the person is, ok, and so what happens is when you tell them, I'm taking part of your identity away from you obviously not raised in that way, but that's the reality.
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It's terrifying and it would be terrifying to any of us.
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We recognize that, we know that and so, yes, the first time you ask the question to the owner like, hey, you're ready to go, or you, are you ready to go or are you ready to drive harder?
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Some are ready to go.
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That's an easier approach, but many say I want to drive harder.
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I know that a lot of times that answer comes out of fear of because I don't know what else to do, and then you have to slowly walk them through.
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Okay, well, let's talk about what drive harder looks like.
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So we're going to have to do something different in your sales team.
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We need a different way to market.
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We may tinker with the product because we think maybe if we do left or do right, it will perform better.
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Well, I built that marketing team, that's my product, I have the patent on that product, and suddenly you're like yeah, I know, and I might be dead wrong, but that's what we want to do, and so you share with them.
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Here's my ideas, maybe dumb, about the future, and if you think like this guy is just crazy, hey, then like, let's just end this now, because I've been involved in situations on the operator side where the owner hung around well-intentioned, but there was not harmony at the board level.
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It's not fun for the board and it's not fun for the operators.
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It's really not fair to the employees of the company.
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Tim, our audience is mostly made up of business owners, business executives.
00:17:16.936 --> 00:17:23.580
So at some point, as you well know, they may get to a point where an exit or a transaction of some sort might make sense.
00:17:23.580 --> 00:17:44.335
So, when you think about from a big picture perspective, you know you've already mentioned the importance of the leadership team, the strength of the operator, but I guess are there other things that when you go in and start looking at and evaluating a business, things that like are man, if I see these three things, those, you know this is something we should really look into, things, this is something we should really look into.
00:17:44.335 --> 00:17:47.528
And then, conversely, are there things that you see that make you say no timeout, they're not ready or this isn't the right fit.
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I guess what would be some of the things that, when our listeners think about how to make their businesses attractive, what are the things that they should do and what are the things that they should avoid?
00:17:57.089 --> 00:17:57.210
Yeah.
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So let's talk about the positives first.
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So obviously we've mentioned it that the leadership team is critically important, and the biggest question for that entrepreneur today who's run a successful business is they've ran it, the business has done great, their customers love it, they want to leave.
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Don't blame them.
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So my first question is great, we can't run it like we who?
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So who's going to run it?
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And so the number one barrier and we see this very often right now right, the baby boomers are retiring.
00:18:26.452 --> 00:18:40.419
There's the single greatest wealth transfer is happening right in front of us, where the retiring folks are moving wealth down but they don't have a go to the private equity world and sell it.
00:18:40.419 --> 00:18:43.500
Well, our number one criteria is well, who's going to run it?
00:18:43.500 --> 00:18:47.321
And let's diligence that person and then diligence with that person.
00:18:47.321 --> 00:19:00.467
So my number one piece of guidance and the number one thing we look for is I need a leader, and if you don't have a leader, it's going to hurt your valuation, because that's an awful lot of what drives it.
00:19:00.467 --> 00:19:05.615
So number one is think about a succession plan two to three years beforehand.
00:19:05.615 --> 00:19:11.513
It may be that I don't have one, but I've got three or four people that, when you put their skill set together.
00:19:11.513 --> 00:19:13.157
Wow, I've got the superhuman.
00:19:13.157 --> 00:19:18.999
Great, that can work too, but you got to think about who's going to run it for the guys next One.
00:19:19.819 --> 00:19:27.880
Two obviously the financials matter and the neat thing about where we are today we've been through COVID, we've been through supply chain shortages.
00:19:27.880 --> 00:19:29.712
Now we're in a little bit of a demand slump.
00:19:29.712 --> 00:19:40.030
So your history tells me a lot about how your company has responded to very different environments, and so I love to look at the recent history because I'm like did you price up?
00:19:40.030 --> 00:19:42.075
How did you get product when no one else did?
00:19:42.075 --> 00:19:43.538
How did you see demand coming?
00:19:43.538 --> 00:19:44.159
Or did you not?
00:19:44.159 --> 00:19:45.842
Did you lose market share?
00:19:45.842 --> 00:19:48.230
So the financials do matter.
00:19:48.230 --> 00:19:59.047
None of them are perfect, that's for sure, but simply you've got to be able to see something that says hey, our customers stuck with us when we had service problems.
00:19:59.047 --> 00:20:05.521
Our customers stuck with us when we did pricing, when we rolled out new products, our customers were enthusiastic and embraced it.
00:20:05.521 --> 00:20:08.376
So those factors are critically important.
00:20:09.309 --> 00:20:14.931
Three and I would say important, but not the most relevant, is what is the industry you're in?
00:20:14.931 --> 00:20:21.231
If you operate a blockbuster video store, yeah, I'm sorry, I'm not interested, no matter how strong and talented you are.
00:20:21.231 --> 00:20:30.306
And so there definitely has to be something in the industry that says hey, what, what are the tailwinds, headwinds in the industry?
00:20:30.306 --> 00:20:33.420
And just because there's headwinds doesn't mean we wouldn't buy it.
00:20:33.420 --> 00:20:40.230
But you also want to know that if the industry can give you a little bit of growth, man, that just makes every day a bit better.
00:20:40.230 --> 00:20:46.297
So those would be three things that we generally would look for out of the gate with any acquisition.
00:20:47.479 --> 00:21:01.073
I think that the deal killer for us, if you do the inverse of what I just said, if the leadership team all wants to exit, like okay, then I want to exit too, because you know more than me, and if you're all leaving, then I'm not coming right.
00:21:01.073 --> 00:21:09.237
Two is, obviously, if the financials are choppy, that's not an automatic, you're out, but it certainly is a OK.
00:21:09.237 --> 00:21:10.761
We have a major problem.
00:21:10.761 --> 00:21:16.162
We probably think we can solve it, but we really need people in the business to help solve it.
00:21:16.162 --> 00:21:17.330
And so what are your answers?
00:21:17.330 --> 00:21:21.095
And then, finally, as I said, the industry can be a problem.
00:21:21.335 --> 00:21:25.659
And the final thing I'll say too is what is the culture of the company?
00:21:25.659 --> 00:21:33.487
If you've had somebody operate the company for 30 years and everybody looks up to Jane because she's been the leader of this business forever.
00:21:33.487 --> 00:21:49.079
Jane isn't with us anymore and that's really hard to assess, but it's something we're acutely aware of is Jane is gone and now how special and fun is it to come to work?
00:21:49.079 --> 00:21:55.558
So that would be some of the pluses and minuses I would encourage business Maybe selling is future my near-term
00:22:00.355 --> 00:22:00.636
Okay.
00:22:00.636 --> 00:22:05.771
So, Tim, the theme of our season three of this podcast but who's Counting?
00:22:05.771 --> 00:22:20.895
Is innovation, and so I'm curious when you're looking at businesses and evaluating businesses, where does innovation and technology fit into the formula of whether or not a company is one worth investing in?
00:22:21.416 --> 00:22:23.201
Sure Well on the venture side.
00:22:23.201 --> 00:22:26.176
So, as I mentioned, we look at B2B SaaS companies.
00:22:26.176 --> 00:22:29.163
So technology is underpinning each of these.
00:22:29.163 --> 00:22:29.931
Ai is.
00:22:29.931 --> 00:22:33.378
You know, every single company we look at now has AI in it somewhere.
00:22:34.441 --> 00:22:39.566
I could go on and on about some of the neat companies we've invested in and the AI that they're using.
00:22:39.566 --> 00:22:50.817
It'll blow your minds and I'll give you one quick example and then I'll be more direct to your question is we have a company that is in the customer contact, customer support area, and they do translation.
00:22:50.817 --> 00:23:03.692
So imagine that if you need people in Japan that can speak Japanese and English and German, the answer today is okay, well, I set up a contact center in Japan and I hire people that are fluent in those three languages.
00:23:03.692 --> 00:23:05.355
Well, you really don't need to do that.
00:23:05.355 --> 00:23:18.792
I mean, their technology exists to very easily say, you can sit wherever the customer question comes in in native tongue and you can answer it back in native tongue, even though you don't know that native tongue, because the computer does the translation for you.
00:23:19.233 --> 00:23:20.056
That's phase one.
00:23:20.056 --> 00:23:22.422
I mean, that's actually quite common now.
00:23:22.422 --> 00:23:34.755
But what's phase two, which is really neat, is if the person who is working for you in your contact center is in Germany and they answer the question and I'm German, so I can say this very directly like no, that is wrong.
00:23:34.755 --> 00:23:41.015
You can also have the software say and can you please soften the tone when you answer back?
00:23:41.115 --> 00:23:54.000
So you can actually move the tone of the answer to more friendly, less friendly, based on how the conversation is going, the tendencies of the person in the call center, and so you know, ai is really.
00:23:54.000 --> 00:24:07.763
We're just on the beginning stages of AI, but what you're already seeing in a lot of different areas where there's a lot of data, a lot of research, where the AI can zip through it with these large machines, is fascinating to me.
00:24:07.763 --> 00:24:22.478
But more directly to your point, yes, our investment thesis on our Lewis and Clark Capital side, where we take equity ownership in smaller companies, is we want to bring significant sophistication to these companies.
00:24:22.478 --> 00:24:24.593
So that's number one, human talent.
00:24:24.593 --> 00:24:38.875
But generally speaking, these companies are generally way behind the curve on innovative processes and relevant and modern technologies, and so when we think about macro level, how can we improve companies?
00:24:38.875 --> 00:24:45.556
We like to believe that we're good evaluators of talent and can help leaders grow and be the best version of themselves.
00:24:45.556 --> 00:24:47.038
One but two.
00:24:47.038 --> 00:24:51.375
We also bring technology to say I understand we're doing that on paper today.
00:24:51.375 --> 00:25:03.643
I understand we're doing that in Excel or that's done in somebody's head today and tomorrow we're going to innovate and we're really going to drive better processes, one and then better tools around it.
00:25:03.809 --> 00:25:16.721
And it's honestly fun, because what you see in these companies, if you bring in somebody new who's maybe been at a larger company to a smaller one, they are literally shocked at how manual the company is.
00:25:16.721 --> 00:25:18.798
And I'm always like I know, isn't it great?
00:25:18.798 --> 00:25:25.483
Because our ability to innovate and help the company become much, much better is like right in front of us.
00:25:25.483 --> 00:25:28.251
There's so much there, and so it is.
00:25:28.251 --> 00:25:38.165
It definitely, missy, is one of the key tenets that we always look at, which is what do we need to do, system wise and process wise, to make this company better?
00:25:38.165 --> 00:25:40.369
It also normally involves acquisitions.
00:25:40.369 --> 00:25:43.095
We're going to put two, three, four companies together.
00:25:43.095 --> 00:25:47.443
I'm going to have common systems so we can get a common source of data.
00:25:47.443 --> 00:25:50.095
So it's very central to our investment thesis.
00:25:51.898 --> 00:26:14.075
So, tim, let's talk human capital for a minute, because I think that the importance of that is skyrocketing, and in your remarks you've talked about the importance of the leadership team, but I think just in general, in terms of attracting a workforce beyond just the leaders, but actually attracting people, figuring out what they want, who are the right people, and then, once we attract them, how do we retain them, how do we develop them?
00:26:14.075 --> 00:26:22.763
What are some of the tips or the things that you see successful companies doing in the people game that seem to be working well right now?
00:26:24.086 --> 00:26:24.806
Yeah, I think.
00:26:24.806 --> 00:26:41.096
Number one everyone wants to play on a winning team, right, you all are at Anders because you love the environment there, but also because Anders has really grown, has gotten a lot of acclaim, a lot of good recognition, because you're doing great things.
00:26:41.096 --> 00:26:43.938
This is positive.
00:26:43.938 --> 00:26:51.923
So you, you need to create a winner, and so you need to have leaders that know how to win in whatever market they're competing in.
00:26:51.923 --> 00:26:58.838
One Two I also think that what you need first from the leaders the tone at the top that trickles down.
00:26:59.644 --> 00:27:06.398
You have to be equal parts empathetic, strong emotional IQ with equal parts accountability.
00:27:06.398 --> 00:27:10.445
Your employees need to know that what they do matters.
00:27:10.445 --> 00:27:15.535
They need to know that you value them and you treasure them as humans.
00:27:15.535 --> 00:27:27.094
But that doesn't mean you get a pass when you don't perform, and usually when you find someone who's incredibly empathetic, they always can see like yeah, I know why you missed the deadline.
00:27:27.094 --> 00:27:29.259
I understand that it's okay.
00:27:29.259 --> 00:27:30.709
Like, try to do better.
00:27:30.709 --> 00:27:32.817
Well, yes and no.
00:27:32.817 --> 00:27:40.286
You certainly need to be understanding of their situation, but you also have to say but the business needed that yesterday and we didn't get it.
00:27:40.507 --> 00:27:53.917
Therefore, our business is not as good today as it could have been, and I think employees, particularly high performing employees, want to see the organization take corrective action when things aren't right.
00:27:54.057 --> 00:28:02.950
When you see something in your company that's not performing well and at the water cooler, people just roll their eyes and say, well, that's Bill, he gets a pass on everything.
00:28:02.950 --> 00:28:05.715
It's demoralizing right.
00:28:05.715 --> 00:28:13.298
And then you feel like you know, I'm working my tail off Bill's golfing, but yet we got the same bonus and he's getting promoted when I'm getting promoted.
00:28:13.298 --> 00:28:24.317
And so I think you create an environment where you say I love you, you're special, you're valuable, but you still have to perform today and you got to perform tomorrow.
00:28:24.317 --> 00:28:25.386
Now how can I help you?
00:28:25.386 --> 00:28:27.450
But at the end of the day, I need you to do that.
00:28:27.450 --> 00:28:48.692
And I think when you provide that structure to folks, I mean and I'm really high level here, dave I mean we could go into excruciating detail on specifics, but to me that's the key tenet that I think allows you to be successful as an organization and retain your individuals, or at least retain the ones that have the skill set that align with what your company needs.
00:28:50.055 --> 00:28:59.397
Are you finding that any of these companies are struggling with the right talent and that that's part of what may affect their ability to grow and advance?
00:29:00.286 --> 00:29:02.452
Yeah, I think every company struggles with that.
00:29:02.452 --> 00:29:21.684
I mean, talent evaluation is such a challenging process, right, and even when you think you got it right sometimes a year later, particularly in our venture companies, where they're growing like a weed 200% a year there are three people, 10 people, 50 people Suddenly that person who worked well at three doesn't work so well at 50.
00:29:21.684 --> 00:29:34.775
And so it is a constant challenge to say do I have the right skill sets, do I have them in the right seats and can they stay there if I 2X the company from where it's at today?
00:29:34.775 --> 00:29:38.973
But it's hard and it's you know, it's really a journey.
00:29:38.973 --> 00:29:43.972
You never get to the destination where I have the perfect team, the minute you believe that you're in trouble.
00:29:43.972 --> 00:29:45.991
So it's never ending.
00:29:47.246 --> 00:29:48.450
So, tim, you mentioned earlier.
00:29:48.450 --> 00:29:50.949
Let's talk about AI because it's interesting.
00:29:50.949 --> 00:30:01.813
You mentioned that it's used within your portfolio companies, but I guess, when you think about, when you look at a company and you evaluate them, what would you expect to see from an AI perspective?
00:30:01.813 --> 00:30:04.729
Because I think there's a lot of people now who are conflicted on.
00:30:04.729 --> 00:30:07.875
The media says everybody's using it, but I'm not.
00:30:07.875 --> 00:30:10.439
So where's the reality?
00:30:10.439 --> 00:30:13.510
Is it only larger companies?
00:30:13.510 --> 00:30:14.653
Is it smaller companies?
00:30:14.653 --> 00:30:21.535
Kind of talk to us about where you see AI actually being deployed and having a business impact today.
00:30:22.156 --> 00:30:28.445
Yeah, well, first, on your general question and sort of the fear of missing out, it's incredibly real in AI today and it's interesting.
00:30:28.445 --> 00:30:39.815
There was an article in the Wall Street Journal this week that said 61% of executives believe that AI is a game changer and roughly the same percent said they had no confidence in their senior management team to execute it at their company.
00:30:39.815 --> 00:30:44.019
Yeah, exactly, and I don't think it's actually confidence.
00:30:44.019 --> 00:30:49.392
I think it's lack of confidence in themselves, like because I don't understand AI, which most of us actually don't.
00:30:49.392 --> 00:30:51.695
Right, and we understand line one.
00:30:52.757 --> 00:31:02.213
And so I think, number one, if you have that fear, like you know I don't really understand this, like I can't even get my computer to talk to my printer sometimes, how will I ever understand AI?
00:31:02.213 --> 00:31:03.217
You're not alone.
00:31:03.217 --> 00:31:09.878
We all are intimidated and in awe of this thing called AI all at the same time.
00:31:09.878 --> 00:31:13.291
So, number one, relax and accept that.
00:31:13.291 --> 00:31:24.008
Yep, it's new to me, but it's new to everyone and, as humans, things that are new are scary and it's just like how to eat the elephant we just got to take our first bite and so where do we see?
00:31:24.068 --> 00:31:39.432
It was the question you asked, and I think it's not about the company size, because obviously, I work with small venture companies that are all over AI and their ability to dream how it can impact businesses and marketplaces is incredible.
00:31:39.432 --> 00:31:47.913
Certainly, big companies have the resources to deploy AI and they've got boards that are saying you better be saying AI and your quarterly earnings.
00:31:47.913 --> 00:31:49.857
You better use the word artificial intelligence.
00:31:49.857 --> 00:31:50.404
Yeah, you know.
00:31:50.404 --> 00:32:15.977
So I think it's much more about the mindset of the company in terms of you know what are we trying to drive and is senior management banging the drum of innovation and innovation through AI, and so I think it's much more around the aptitude to grasp something new, more so than company size or company sector, for example.
00:32:16.765 --> 00:32:18.508
Wow, well, this has been fascinating.
00:32:18.508 --> 00:32:26.607
So, tim, we typically end each episode with a question, the same question.
00:32:26.607 --> 00:32:35.994
We call it our Make it Count segment, and this is where we ask the guest to share one actionable takeaway that other business leaders can count on.
00:32:35.994 --> 00:32:37.992
You have so much insight.
00:32:37.992 --> 00:32:45.549
It's probably gonna be hard to pick one, in my opinion, but if you had one piece of advice on how to innovate, what would that be?
00:32:46.246 --> 00:32:47.644
Yeah well, thank you for the comment.
00:32:47.644 --> 00:32:51.174
I would say that one piece of advice is it's your mindset.
00:32:51.174 --> 00:32:57.051
Your mindset has to be every day it's my job to improve my company.
00:32:57.051 --> 00:32:58.849
And how do I do that?
00:32:58.849 --> 00:33:05.895
I do that through making sure my employees know that every day, it's my team's job as well to improve the company.
00:33:05.895 --> 00:33:16.568
So my mindset is hey, we're talking about a problem and this customer is not happy and we're struggling to meet the customer's demand and our competitors kicking our backside.
00:33:16.568 --> 00:33:18.934
Okay, great, are we?
00:33:18.934 --> 00:33:20.518
You know, every understands the problem.
00:33:20.518 --> 00:33:27.430
Now let's ask the question we got to solve this customer problem today, but how do we make for a better process, guys?
00:33:27.430 --> 00:33:30.989
What are we doing and how do we do it better tomorrow?
00:33:30.989 --> 00:33:41.036
And if you ask that question, enough, what happens is your team then picks up on that and they start asking the question hey, how do we get better?
00:33:41.576 --> 00:33:45.491
Number one you have to insert into mindset it is our jobs to improve.
00:33:45.491 --> 00:33:48.097
By the way, that's what innovation is, innovation.
00:33:48.097 --> 00:33:50.153
A lot of times people say innovation equals technology.
00:33:50.153 --> 00:33:56.877
Technology is a great tool in the United States to innovate, but innovation is much, much broader than technology.
00:33:56.877 --> 00:34:02.050
So it has to be that mindset that says what can we do better.
00:34:02.050 --> 00:34:04.656
You then create that culture inside the company.
00:34:04.737 --> 00:34:15.326
And then finally, as the third piece of that mindset is when folks bring ideas, sometimes you got to let them run with it, even though you're like that's not going to work.
00:34:15.326 --> 00:34:16.548
But you know what?
00:34:16.548 --> 00:34:23.835
I'm going to let them run Because if I ask people, the worst thing you can do is say give me ideas on how to make it better, and then I shoot every one of them down.
00:34:23.835 --> 00:34:27.833
Eventually people just turn off the knob and say, yep, that's happy.
00:34:27.833 --> 00:34:28.516
Talk from Tim.
00:34:28.516 --> 00:34:43.132
And so to me, that's the advice I would give Mindset every day to bring it in, then have the courage to let somebody try it, even if it may not work, because, by the way, sometimes you'll get surprised like, well, I'll be darned, that actually worked.
00:34:43.132 --> 00:34:44.505
Thank goodness, I didn't say nothing.
00:34:44.505 --> 00:34:48.635
So that would be my guidance to business owners and leaders out there.
00:34:49.096 --> 00:34:50.257
Well, that's great, thank you.
00:34:51.166 --> 00:34:52.891
So, Tim Spillman, thank you for joining us.
00:34:52.891 --> 00:34:53.693
We appreciate it.
00:34:53.693 --> 00:34:57.731
As always when I hang out with you, I always learn something, so I appreciate it very much.
00:34:57.731 --> 00:35:00.391
Thank you for taking the time sharing your insights with our audience.
00:35:00.954 --> 00:35:02.117
Yes, thank you, it's been fun.
00:35:02.556 --> 00:35:05.179
Thank you for joining the but who's Counting podcast.
00:35:05.179 --> 00:35:10.943
Make sure to never miss an episode by subscribing on Spotify or Apple Podcasts and let us know what you think by rating and reviewing.
00:35:10.943 --> 00:35:17.172
Keep up with more of Andrew's CPAs and advisors' insights by following us on social media through the handles in the show notes.
00:35:17.172 --> 00:35:18.378
We'll see you next time.
00:00:00.561 --> 00:00:04.392
You're focused on making important decisions to take your company to the next level.
00:00:04.392 --> 00:00:06.086
But who's counting?
00:00:06.086 --> 00:00:07.584
We are.
00:00:07.584 --> 00:00:13.692
Counting on trends and insights to move your business forward, operationally and strategically.
00:00:13.692 --> 00:00:17.010
Focused on helping executives achieve their highest potential.
00:00:17.010 --> 00:00:18.481
But Who's Counting?
00:00:18.481 --> 00:00:23.733
is a podcast shedding light on and breaking down critical issues and opportunities for businesses.
00:00:23.733 --> 00:00:26.865
Brought to you by Anders CPAs + Advisors .
00:00:29.050 --> 00:00:29.652
I'm Dave Hartley.
00:00:29.731 --> 00:00:30.553
And I'm Missy Kelly.
00:00:31.300 --> 00:00:34.691
And Missy and I just wrapped another episode of the but who's Counting podcast.
00:00:34.691 --> 00:00:40.911
Our guest today was Tim Spillman Spihlman Tim is a managing director of Lewis Clark Ventures, lewis Clark Capital.
00:00:40.911 --> 00:00:45.911
Missy, I love Tim's comments today about how to make your business .
00:00:45.911 --> 00:00:45.911
.
00:00:45.911 --> 00:00:45.911
.
00:00:46.320 --> 00:00:46.540
really.
00:00:46.560 --> 00:00:50.712
He he had three tips tips: the three tips to make your business most attractive to outside investors.
00:00:50.712 --> 00:00:56.344
I also loved his comments around the importance of leadership, teams, leaders and succession planning.
00:00:56.344 --> 00:00:57.950
For me, I thought that was great.
00:00:57.950 --> 00:00:57.950
.
00:00:59.240 --> 00:01:07.640
Yes, and for me, my favorite part was the guidance on how to have an innovation mindset throughout your firm or your company.
00:01:07.640 --> 00:01:12.471
And that is to ask yourself every day what can I do to make the business better today?
00:01:12.471 --> 00:01:14.888
And that's really the driver.
00:01:14.888 --> 00:01:26.009
And if you can do that from the top of the organization all the way through sounds simple, may or may not be easy to do, but it's a good question to ask and that's how he sees success coming through.
00:01:26.299 --> 00:01:28.227
Yeah, and I think that's how you drive innovation.
00:01:28.227 --> 00:01:29.349
So that was really interesting.
00:01:29.349 --> 00:01:32.730
So, yeah, tim drops a lot of great ideas in this episode.
00:01:32.730 --> 00:01:34.888
So to our listeners, enjoy the show.
00:01:34.888 --> 00:01:39.531
Welcome back to another episode of the but who's Counting podcast.
00:01:39.700 --> 00:01:41.647
I'm your host, dave Hartley, here with Missy Kelly.
00:01:46.882 --> 00:01:47.626
Our guest today is Tim Spillman.
00:01:47.626 --> 00:01:52.081
Tim has served in both CEO and CFO capacities, plus serving as a board and audit committee member during his 20-plus year career.
00:01:52.081 --> 00:02:07.084
In recent years, tim has shifted his focus from running businesses to the investing side of business by joining Lewis Clark Capital and Lewis Clark Ventures as managing director, managing investments in over 20 companies representing over 300 million in investments.
00:02:07.084 --> 00:02:16.112
Tim has significant experience in growth drivers of business, both organic and via acquisitions, having executed over 6 billion of M&A transactions.
00:02:16.112 --> 00:02:21.860
Tim came into the business world as a CPA and spent time working in Big Four as a financial statement auditor.
00:02:21.860 --> 00:02:28.012
Tim volunteers his time, serving on two nonprofit boards and is a proud supporter of his Bradley Braves.
00:02:28.012 --> 00:02:30.074
So, tim, welcome to the show.
00:02:30.939 --> 00:02:31.641
Yeah, thank you.
00:02:31.641 --> 00:02:32.947
It's an honor to be invited.
00:02:32.947 --> 00:02:34.009
Appreciate the opportunity.
00:02:35.502 --> 00:02:39.133
So, tim, it's interesting the career transition that you made.
00:02:39.133 --> 00:02:44.165
You were sort of you were running companies and then you decided to make the shift to investing in companies.
00:02:44.165 --> 00:02:45.989
So I guess, talk to us about how.
00:02:45.989 --> 00:02:49.094
Did you learn the worlds of private equity and venture capital?
00:02:49.094 --> 00:02:57.776
Were you already familiar with the investing side of business before you made this switch, and have you been involved in buying and selling companies extensively before?
00:02:57.776 --> 00:02:59.080
Talk to us about the background.
00:02:59.521 --> 00:03:00.705
Yeah, no great question.
00:03:00.705 --> 00:03:02.468
So the short answer is yes.
00:03:02.468 --> 00:03:08.649
You know, in my role as operators, particularly with a financial background, you do get involved in transactions.
00:03:08.649 --> 00:03:14.931
You know that your companies make and you know I was head of strategy for a large global company for a couple of years as well.
00:03:14.931 --> 00:03:24.792
So then I was creating the investment thesis and executing those investment theses within, you know the company that we had, which is akin to what you do in private equity.
00:03:25.479 --> 00:03:27.947
Now to your question you know how did I learn it?
00:03:27.947 --> 00:03:37.703
What I would say is, yeah, I'm still learning, but I think I've got a good operating background that underpin a lot of the things that make acquisitions successful.
00:03:37.703 --> 00:04:10.615
But just as important in that question is who I work for in that Lewis and Clark is is a bit different in that it's a very operator first, operator centric business model, and I can tell you that the vast, vast majority of PE firms and I've worked with four or five different middle market firms based on the East coast If you went to them and said I've got 30 years of operating experience and I'd love to now be truly in the partnership at private equity, they would say, hey, interesting, but no thanks.
00:04:10.615 --> 00:04:27.728
And so I found a partner in Lewis and Clark that really values operators first and says operators are who we'll build our business around and that's who will make our decisions, versus someone who maybe is very steep in transactions but maybe not quite as deep in operating.
00:04:30.132 --> 00:04:30.593
So do you?
00:04:30.593 --> 00:04:30.995
Generally?
00:04:30.995 --> 00:04:33.889
What's your thesis in terms of, like, how long do you hold?
00:04:33.889 --> 00:04:38.567
Is it basically, are you in and out in a couple of years, or do you buy and like, build together?
00:04:38.567 --> 00:04:39.108
What's?
00:04:39.108 --> 00:04:40.151
How does that work for you all?
00:04:40.800 --> 00:04:43.949
Sure Well, we I manage two different investment vehicles.
00:04:43.949 --> 00:04:50.651
So on the venture side, obviously you don't take a majority position in companies In round numbers.
00:04:50.651 --> 00:04:56.250
Your LPs limited partners are expecting cash back in sort of the five to seven year timeframe.
00:04:56.250 --> 00:05:01.351
So that will guide a lot of what we do and how we think about when it's time to get out.
00:05:01.351 --> 00:05:13.983
On the private equity side, which is Lewis and Clark Capital, we've held companies, we've owned one now for over 20 years.
00:05:14.002 --> 00:05:15.788
And, what I would say is, we don't have a duration-based investing strategy.
00:05:15.788 --> 00:05:20.302
We have a capability and milestone-based strategy, which means we buy a company.
00:05:20.302 --> 00:05:24.572
We believe that we can get it from X to AA.
00:05:24.572 --> 00:05:35.226
We hope we can get it to AA in a certain amount of time, but the reality is, when you get to AA now you say I'm at a point of optionality, is it time to exit or do we double down?
00:05:35.226 --> 00:05:37.935
Leave some chips on the table, go at it again.
00:05:37.935 --> 00:05:41.942
We have the flexibility in the private equity world.
00:05:41.942 --> 00:05:52.548
We're what's called a family office, so we're investing off the balance sheets of high net worth individuals which, in comparison, most private equity firms have limited partners.
00:05:52.548 --> 00:05:53.906
These partners come in.
00:05:53.906 --> 00:05:58.387
They expect to get their money back as I said earlier, similar to venture in five to seven years.
00:05:58.387 --> 00:06:01.108
We don't have that same mandate on our private equity side.
00:06:01.108 --> 00:06:06.190
Of course, the folks that provide us the funding expect a return, just like anyone would.
00:06:06.190 --> 00:06:10.168
But we do have some flexibility on timing, which is great.
00:06:11.139 --> 00:06:18.290
So were you already familiar with the investing side of business before you made the move to Lewis and Clark?
00:06:19.000 --> 00:06:26.386
Yes, I was In my role in the finance side of the world and in strategy, you're constantly making investments in your company.
00:06:26.386 --> 00:06:30.230
If your company is executing well, think about it this way.
00:06:30.230 --> 00:06:33.529
Every time you do a budget, it's simply an allocation of funds.
00:06:33.529 --> 00:06:35.648
So where do you want to invest A, b or C?
00:06:35.648 --> 00:06:44.026
Now that investment is simple, like hey, maybe I invest in technology, maybe I invest in my sales team, maybe I need more marketing support
00:07:09.620 --> 00:07:09.620
00:07:09.620
class="MsoNormal">So what’s been the biggest surprise that you’ve discovered since
you
00:07:09.620 --> 00:07:10.884
got involved into this type of investing.
00:07:11.285 --> 00:07:12.166
Sure so.
00:07:12.166 --> 00:07:27.213
And the reason I got into this side of investing is after, as Dave mentioned in the intro, a bit after sort of 30 years on the operator side, I kind of stepped back and said, hey, how can I best impact the most people for the rest of my professional career.
00:07:27.213 --> 00:07:37.548
I felt like I'd accomplished a lot of things personally and I decided it was time to stop thinking about Tim's goals and start thinking about how can I be a broader help.
00:07:37.548 --> 00:07:43.047
And I wasn't sure how that would resonate with folks.
00:07:43.047 --> 00:07:48.675
I mean, it sounds good and oh, that's nice, but but like, can you put it in action on a daily basis?
00:07:48.675 --> 00:07:54.079
Your company is struggling and I'm trying to positively impact people, but yet you got to hold people accountable.
00:07:54.500 --> 00:08:07.411
And what I have found and I knew it and I saw it before, but I see it much more now is when times are tough and you have the tough conversation and hold people accountable When times are tough and you have the tough conversation and hold people accountable, people value that.
00:08:09.413 --> 00:08:27.805
of great skills but you're missing the mark on this objective, and I want you to know that, like A, I believe in you or B, we don't think you have the right skill set and we're going to try to find where your skill set is best utilized and then fill this gap that you know we all fear that in work.
00:08:27.805 --> 00:08:25.531
.
00:08:27.904 --> 00:08:31.793
Like I think I'm doing a good job, but what does my boss really think?
00:08:31.793 --> 00:08:39.183
And what I found and gained the confidence over my career is to, like, have that tough conversation and tell them what.
00:08:39.183 --> 00:08:51.841
Like you almost want to close your eyes because you don't want to see the face reaction when you say it, but people generally over time will respond very positively because then there's trust like never before.
00:08:51.841 --> 00:08:57.332
I'm being open and honest with you, but I'm doing it in a way that is not demeaning.
00:08:57.332 --> 00:09:03.033
It's a way that's saying I recognize your skills and I recognize what makes you special as a person.
00:09:03.033 --> 00:09:10.009
However, that may not be lining up with what we need in this situation and can we change it or not?
00:09:10.009 --> 00:09:11.432
And let's figure that out together.
00:09:12.321 --> 00:09:14.230
So we're visiting today with Tim Spihlman.
00:09:14.230 --> 00:09:21.919
Tim, talk to us about I mean, you have the benefit of seeing 20 plus portfolio companies, so I guess, talk to us about the makeup of those companies.
00:09:21.919 --> 00:09:28.373
You've mentioned already that it's very operator focused, but do you go after specific verticals or industries that you're going for?
00:09:28.373 --> 00:09:34.192
And then also would be interested in your take on how consistent is business across those 20 companies.
00:09:34.192 --> 00:09:37.067
Is it 80 percent the same and there's a little bit, or is it?
00:09:37.067 --> 00:09:38.432
No, it's completely different.
00:09:38.432 --> 00:09:39.900
What's your take on that as well?
00:09:40.501 --> 00:09:42.023
Yeah, great, two great questions.
00:09:42.023 --> 00:09:54.092
Let's start with the nature of the companies, which then will help the second question, which is on the venture side yes, we are very clear that Lewis and Clark Ventures our second fund, which is what we're investing out of.
00:09:54.092 --> 00:09:58.937
We look for companies that are software companies working in the B2B space.
00:09:58.937 --> 00:10:05.125
Most of these companies will have a SaaS model.
00:10:05.125 --> 00:10:05.568
Where we invest invest in their life cycle.
00:10:05.568 --> 00:10:11.562
Most companies are somewhere between a million and five million in recurring revenue, so they've been around for sort of three to five years.
00:10:11.562 --> 00:10:15.231
Most are not generating positive EBITDA or cash flow at this point in time.
00:10:15.231 --> 00:10:25.167
They have a visionary idea and they're trying to obviously create an alternative that is very appealing to a current state, in whatever sector they're in.
00:10:26.289 --> 00:10:54.230
On our capital side, we're investing in companies where we take an equity ownership position and, simply stated, what we look for is certain verticals like manufacturing, logistics distribution, business services, where we look for opportunities, where, number one, we find the right leader, which is even more important to us than the sector that we're in, and then, with that leader, we ask ourselves how much can we scale?
00:10:54.230 --> 00:10:55.856
How much fragmentation is there?
00:10:55.856 --> 00:10:57.982
How much organic growth opportunity is there?
00:10:57.982 --> 00:11:02.113
And so the simple question there is what's the art of the possible?
00:11:02.113 --> 00:11:06.830
If you're at $25 million in revenue today, how do we get you to 125 million?
00:11:06.830 --> 00:11:08.432
Do I think this leader can do that?
00:11:08.432 --> 00:11:12.006
And so in both sides it's very leader focused.
00:11:12.408 --> 00:11:22.586
On the capital side again the equity side you've got a leader who's maybe done this for 10, 20, 30 years, whereas on the venture side you've got a leader that's done it for three to five.
00:11:22.686 --> 00:11:34.692
So it's harder to assess, obviously, the leadership capability as someone who's managing a team of 12, all of which are programmers, and say this person's going to be great at leading a 100-person plus company.
00:11:34.692 --> 00:11:52.355
So your second question around volume is what I would say is it does vary, but generally speaking, we've been pleasantly surprised at the resiliency of the US economy on both the B2B side and, to the extent it's relevant, on the consumer side as well.
00:11:52.355 --> 00:11:58.440
So you know we have in the venture side you've got lots of companies doing a hundred percent plus type of sales growth.
00:11:58.440 --> 00:12:00.644
That's common for companies of that size.
00:12:00.644 --> 00:12:11.111
But but even on our more established companies you companies we're seeing growth rates that are double digit 10, 15, 30% and so I would say it does vary.
00:12:11.111 --> 00:12:20.461
But macro level, we're very encouraged by where the vast majority of the companies that we have an investment in how they're performing here in 2024.
00:12:21.260 --> 00:12:30.826
So, when you do find barriers to growth with these small to mid-sized businesses, are you seeing a common theme?
00:12:30.826 --> 00:12:35.028
Do they look similar or are they very different?
00:12:35.539 --> 00:12:37.308
Does everybody hit the wall at the same point?
00:12:38.009 --> 00:12:44.475
No, everybody hits the wall potentially at a different point, but there is one common factor: it's the leadership of the company.
00:12:44.475 --> 00:12:47.576
It is literally that simple.
00:12:47.576 --> 00:12:57.724
So the question is you know there's multiple ways you look at the leaders and one is and it's been talked about in prior podcasts a bit is fear of failure.
00:12:57.724 --> 00:13:05.316
Leaders get comfortable in what they've done and hey, I know, if I keep doing this, you know, rinse repeat, rinse, repeat, I'll grow.
00:13:05.316 --> 00:13:10.419
And then you come along and say, yeah, but how do we grow three to five times, like, how do we put our foot on the gas?
00:13:10.419 --> 00:13:12.736
They have all the ideas.
00:13:12.736 --> 00:13:14.303
They have all the information.
00:13:14.303 --> 00:13:16.490
Them and their team have lived in this environment.
00:13:16.490 --> 00:13:29.419
They know the answers Whether they're willing to make themselves uncomfortable, try something different, adopt AI, attack a new vertical, try to attract new customers.
00:13:29.519 --> 00:13:32.995
Whether they're willing to do that is your biggest barrier to growth.
00:13:32.995 --> 00:13:45.495
And so that's tough when you find that, because then you say can I supplement your fears with subject matter experts inside the company or even as an outsider helping the company?
00:13:45.495 --> 00:13:48.982
You know how do we help you get more comfortable?
00:13:48.982 --> 00:13:56.677
Yeah, sure, we can give you capital, but what you really need is sort of the encouragement and the backing that says let's try this, let's try it together.
00:13:56.677 --> 00:14:00.111
It may not work, we both know that but we're going to go after it.
00:14:00.211 --> 00:14:05.861
So you know, that's why my earlier comment around leadership is so critically important when we evaluate.
00:14:05.861 --> 00:14:21.134
Because if you're comfortable with your business as it is today and you maybe have a desire to transact for financial reasons, lifestyle reasons but you want to stay on, a lot of times you want to stay on because you've been doing this for 30 years and there's fear of I don't know what to do.
00:14:21.134 --> 00:14:22.397
This has been my life.
00:14:22.397 --> 00:14:25.160
Okay, very human, I understand that.
00:14:25.160 --> 00:14:38.293
But on our end, we want to drive a different dynamic and are you ready, able, willing, energy level, financial risk level, able and wanting to do that.
00:14:38.793 --> 00:14:48.731
And those are the really interesting conversations, the heart to heart with an owner during a diligence process that I really enjoy because it's a very personal conversation.
00:14:49.734 --> 00:14:54.811
So how often would you say their response to that aligns with what actually ends up playing out?
00:14:54.811 --> 00:15:09.942
And the reason I ask that is that I can talk to owners who are considering selling and they are often very passionate about the company because it's like a baby or a child to them that they've raised and they're so proud of.
00:15:09.942 --> 00:15:23.022
And when they want to hang on, I can see even maybe them believing themselves oh sure, yeah, I'm ready for that, I can do that and then maybe getting into that and not being as comfortable with it.
00:15:23.022 --> 00:15:31.644
I'm just curious if that's something you see happen often, or are these people typically people that are kind of designed for growth and change?
00:15:32.250 --> 00:15:36.081
Yeah, missy, you know you're spot on with that question and observation.
00:15:36.081 --> 00:15:49.993
These companies are part of the fabric of who the person is, ok, and so what happens is when you tell them, I'm taking part of your identity away from you obviously not raised in that way, but that's the reality.
00:15:49.993 --> 00:15:52.240
It's terrifying and it would be terrifying to any of us.
00:15:52.240 --> 00:16:05.113
We recognize that, we know that and so, yes, the first time you ask the question to the owner like, hey, you're ready to go, or you, are you ready to go or are you ready to drive harder?
00:16:05.113 --> 00:16:06.054
Some are ready to go.
00:16:06.054 --> 00:16:10.543
That's an easier approach, but many say I want to drive harder.
00:16:10.543 --> 00:16:19.655
I know that a lot of times that answer comes out of fear of because I don't know what else to do, and then you have to slowly walk them through.
00:16:19.676 --> 00:16:22.302
Okay, well, let's talk about what drive harder looks like.
00:16:22.302 --> 00:16:26.100
So we're going to have to do something different in your sales team.
00:16:26.100 --> 00:16:28.777
We need a different way to market.
00:16:28.777 --> 00:16:34.333
We may tinker with the product because we think maybe if we do left or do right, it will perform better.
00:16:34.333 --> 00:16:46.562
Well, I built that marketing team, that's my product, I have the patent on that product, and suddenly you're like yeah, I know, and I might be dead wrong, but that's what we want to do, and so you share with them.
00:16:46.562 --> 00:17:06.496
Here's my ideas, maybe dumb, about the future, and if you think like this guy is just crazy, hey, then like, let's just end this now, because I've been involved in situations on the operator side where the owner hung around well-intentioned, but there was not harmony at the board level.
00:17:06.496 --> 00:17:09.531
It's not fun for the board and it's not fun for the operators.
00:17:09.531 --> 00:17:11.359
It's really not fair to the employees of the company.
00:17:12.384 --> 00:17:16.936
Tim, our audience is mostly made up of business owners, business executives.
00:17:16.936 --> 00:17:23.580
So at some point, as you well know, they may get to a point where an exit or a transaction of some sort might make sense.
00:17:23.580 --> 00:17:44.335
So, when you think about from a big picture perspective, you know you've already mentioned the importance of the leadership team, the strength of the operator, but I guess are there other things that when you go in and start looking at and evaluating a business, things that like are man, if I see these three things, those, you know this is something we should really look into, things, this is something we should really look into.
00:17:44.335 --> 00:17:47.528
And then, conversely, are there things that you see that make you say no timeout, they're not ready or this isn't the right fit.
00:17:47.528 --> 00:17:56.340
I guess what would be some of the things that, when our listeners think about how to make their businesses attractive, what are the things that they should do and what are the things that they should avoid?
00:17:57.089 --> 00:17:57.210
Yeah.
00:17:57.210 --> 00:17:59.257
So let's talk about the positives first.
00:17:59.257 --> 00:18:13.739
So obviously we've mentioned it that the leadership team is critically important, and the biggest question for that entrepreneur today who's run a successful business is they've ran it, the business has done great, their customers love it, they want to leave.
00:18:13.739 --> 00:18:14.520
Don't blame them.
00:18:14.520 --> 00:18:18.820
So my first question is great, we can't run it like we who?
00:18:18.820 --> 00:18:19.869
So who's going to run it?
00:18:19.869 --> 00:18:26.452
And so the number one barrier and we see this very often right now right, the baby boomers are retiring.
00:18:26.452 --> 00:18:40.419
There's the single greatest wealth transfer is happening right in front of us, where the retiring folks are moving wealth down but they don't have a go to the private equity world and sell it.
00:18:40.419 --> 00:18:43.500
Well, our number one criteria is well, who's going to run it?
00:18:43.500 --> 00:18:47.321
And let's diligence that person and then diligence with that person.
00:18:47.321 --> 00:19:00.467
So my number one piece of guidance and the number one thing we look for is I need a leader, and if you don't have a leader, it's going to hurt your valuation, because that's an awful lot of what drives it.
00:19:00.467 --> 00:19:05.615
So number one is think about a succession plan two to three years beforehand.
00:19:05.615 --> 00:19:11.513
It may be that I don't have one, but I've got three or four people that, when you put their skill set together.
00:19:11.513 --> 00:19:13.157
Wow, I've got the superhuman.
00:19:13.157 --> 00:19:18.999
Great, that can work too, but you got to think about who's going to run it for the guys next One.
00:19:19.819 --> 00:19:27.880
Two obviously the financials matter and the neat thing about where we are today we've been through COVID, we've been through supply chain shortages.
00:19:27.880 --> 00:19:29.712
Now we're in a little bit of a demand slump.
00:19:29.712 --> 00:19:40.030
So your history tells me a lot about how your company has responded to very different environments, and so I love to look at the recent history because I'm like did you price up?
00:19:40.030 --> 00:19:42.075
How did you get product when no one else did?
00:19:42.075 --> 00:19:43.538
How did you see demand coming?
00:19:43.538 --> 00:19:44.159
Or did you not?
00:19:44.159 --> 00:19:45.842
Did you lose market share?
00:19:45.842 --> 00:19:48.230
So the financials do matter.
00:19:48.230 --> 00:19:59.047
None of them are perfect, that's for sure, but simply you've got to be able to see something that says hey, our customers stuck with us when we had service problems.
00:19:59.047 --> 00:20:05.521
Our customers stuck with us when we did pricing, when we rolled out new products, our customers were enthusiastic and embraced it.
00:20:05.521 --> 00:20:08.376
So those factors are critically important.
00:20:09.309 --> 00:20:14.931
Three and I would say important, but not the most relevant, is what is the industry you're in?
00:20:14.931 --> 00:20:21.231
If you operate a blockbuster video store, yeah, I'm sorry, I'm not interested, no matter how strong and talented you are.
00:20:21.231 --> 00:20:30.306
And so there definitely has to be something in the industry that says hey, what, what are the tailwinds, headwinds in the industry?
00:20:30.306 --> 00:20:33.420
And just because there's headwinds doesn't mean we wouldn't buy it.
00:20:33.420 --> 00:20:40.230
But you also want to know that if the industry can give you a little bit of growth, man, that just makes every day a bit better.
00:20:40.230 --> 00:20:46.297
So those would be three things that we generally would look for out of the gate with any acquisition.
00:20:47.479 --> 00:21:01.073
I think that the deal killer for us, if you do the inverse of what I just said, if the leadership team all wants to exit, like okay, then I want to exit too, because you know more than me, and if you're all leaving, then I'm not coming right.
00:21:01.073 --> 00:21:09.237
Two is, obviously, if the financials are choppy, that's not an automatic, you're out, but it certainly is a OK.
00:21:09.237 --> 00:21:10.761
We have a major problem.
00:21:10.761 --> 00:21:16.162
We probably think we can solve it, but we really need people in the business to help solve it.
00:21:16.162 --> 00:21:17.330
And so what are your answers?
00:21:17.330 --> 00:21:21.095
And then, finally, as I said, the industry can be a problem.
00:21:21.335 --> 00:21:25.659
And the final thing I'll say too is what is the culture of the company?
00:21:25.659 --> 00:21:33.487
If you've had somebody operate the company for 30 years and everybody looks up to Jane because she's been the leader of this business forever.
00:21:33.487 --> 00:21:49.079
Jane isn't with us anymore and that's really hard to assess, but it's something we're acutely aware of is Jane is gone and now how special and fun is it to come to work?
00:21:49.079 --> 00:21:55.558
So that would be some of the pluses and minuses I would encourage business Maybe selling is future my near-term
00:22:00.355 --> 00:22:00.636
Okay.
00:22:00.636 --> 00:22:05.771
So, Tim, the theme of our season three of this podcast but who's Counting?
00:22:05.771 --> 00:22:20.895
Is innovation, and so I'm curious when you're looking at businesses and evaluating businesses, where does innovation and technology fit into the formula of whether or not a company is one worth investing in?
00:22:21.416 --> 00:22:23.201
Sure Well on the venture side.
00:22:23.201 --> 00:22:26.176
So, as I mentioned, we look at B2B SaaS companies.
00:22:26.176 --> 00:22:29.163
So technology is underpinning each of these.
00:22:29.163 --> 00:22:29.931
Ai is.
00:22:29.931 --> 00:22:33.378
You know, every single company we look at now has AI in it somewhere.
00:22:34.441 --> 00:22:39.566
I could go on and on about some of the neat companies we've invested in and the AI that they're using.
00:22:39.566 --> 00:22:50.817
It'll blow your minds and I'll give you one quick example and then I'll be more direct to your question is we have a company that is in the customer contact, customer support area, and they do translation.
00:22:50.817 --> 00:23:03.692
So imagine that if you need people in Japan that can speak Japanese and English and German, the answer today is okay, well, I set up a contact center in Japan and I hire people that are fluent in those three languages.
00:23:03.692 --> 00:23:05.355
Well, you really don't need to do that.
00:23:05.355 --> 00:23:18.792
I mean, their technology exists to very easily say, you can sit wherever the customer question comes in in native tongue and you can answer it back in native tongue, even though you don't know that native tongue, because the computer does the translation for you.
00:23:19.233 --> 00:23:20.056
That's phase one.
00:23:20.056 --> 00:23:22.422
I mean, that's actually quite common now.
00:23:22.422 --> 00:23:34.755
But what's phase two, which is really neat, is if the person who is working for you in your contact center is in Germany and they answer the question and I'm German, so I can say this very directly like no, that is wrong.
00:23:34.755 --> 00:23:41.015
You can also have the software say and can you please soften the tone when you answer back?
00:23:41.115 --> 00:23:54.000
So you can actually move the tone of the answer to more friendly, less friendly, based on how the conversation is going, the tendencies of the person in the call center, and so you know, ai is really.
00:23:54.000 --> 00:24:07.763
We're just on the beginning stages of AI, but what you're already seeing in a lot of different areas where there's a lot of data, a lot of research, where the AI can zip through it with these large machines, is fascinating to me.
00:24:07.763 --> 00:24:22.478
But more directly to your point, yes, our investment thesis on our Lewis and Clark Capital side, where we take equity ownership in smaller companies, is we want to bring significant sophistication to these companies.
00:24:22.478 --> 00:24:24.593
So that's number one, human talent.
00:24:24.593 --> 00:24:38.875
But generally speaking, these companies are generally way behind the curve on innovative processes and relevant and modern technologies, and so when we think about macro level, how can we improve companies?
00:24:38.875 --> 00:24:45.556
We like to believe that we're good evaluators of talent and can help leaders grow and be the best version of themselves.
00:24:45.556 --> 00:24:47.038
One but two.
00:24:47.038 --> 00:24:51.375
We also bring technology to say I understand we're doing that on paper today.
00:24:51.375 --> 00:25:03.643
I understand we're doing that in Excel or that's done in somebody's head today and tomorrow we're going to innovate and we're really going to drive better processes, one and then better tools around it.
00:25:03.809 --> 00:25:16.721
And it's honestly fun, because what you see in these companies, if you bring in somebody new who's maybe been at a larger company to a smaller one, they are literally shocked at how manual the company is.
00:25:16.721 --> 00:25:18.798
And I'm always like I know, isn't it great?
00:25:18.798 --> 00:25:25.483
Because our ability to innovate and help the company become much, much better is like right in front of us.
00:25:25.483 --> 00:25:28.251
There's so much there, and so it is.
00:25:28.251 --> 00:25:38.165
It definitely, missy, is one of the key tenets that we always look at, which is what do we need to do, system wise and process wise, to make this company better?
00:25:38.165 --> 00:25:40.369
It also normally involves acquisitions.
00:25:40.369 --> 00:25:43.095
We're going to put two, three, four companies together.
00:25:43.095 --> 00:25:47.443
I'm going to have common systems so we can get a common source of data.
00:25:47.443 --> 00:25:50.095
So it's very central to our investment thesis.
00:25:51.898 --> 00:26:14.075
So, tim, let's talk human capital for a minute, because I think that the importance of that is skyrocketing, and in your remarks you've talked about the importance of the leadership team, but I think just in general, in terms of attracting a workforce beyond just the leaders, but actually attracting people, figuring out what they want, who are the right people, and then, once we attract them, how do we retain them, how do we develop them?
00:26:14.075 --> 00:26:22.763
What are some of the tips or the things that you see successful companies doing in the people game that seem to be working well right now?
00:26:24.086 --> 00:26:24.806
Yeah, I think.
00:26:24.806 --> 00:26:41.096
Number one everyone wants to play on a winning team, right, you all are at Anders because you love the environment there, but also because Anders has really grown, has gotten a lot of acclaim, a lot of good recognition, because you're doing great things.
00:26:41.096 --> 00:26:43.938
This is positive.
00:26:43.938 --> 00:26:51.923
So you, you need to create a winner, and so you need to have leaders that know how to win in whatever market they're competing in.
00:26:51.923 --> 00:26:58.838
One Two I also think that what you need first from the leaders the tone at the top that trickles down.
00:26:59.644 --> 00:27:06.398
You have to be equal parts empathetic, strong emotional IQ with equal parts accountability.
00:27:06.398 --> 00:27:10.445
Your employees need to know that what they do matters.
00:27:10.445 --> 00:27:15.535
They need to know that you value them and you treasure them as humans.
00:27:15.535 --> 00:27:27.094
But that doesn't mean you get a pass when you don't perform, and usually when you find someone who's incredibly empathetic, they always can see like yeah, I know why you missed the deadline.
00:27:27.094 --> 00:27:29.259
I understand that it's okay.
00:27:29.259 --> 00:27:30.709
Like, try to do better.
00:27:30.709 --> 00:27:32.817
Well, yes and no.
00:27:32.817 --> 00:27:40.286
You certainly need to be understanding of their situation, but you also have to say but the business needed that yesterday and we didn't get it.
00:27:40.507 --> 00:27:53.917
Therefore, our business is not as good today as it could have been, and I think employees, particularly high performing employees, want to see the organization take corrective action when things aren't right.
00:27:54.057 --> 00:28:02.950
When you see something in your company that's not performing well and at the water cooler, people just roll their eyes and say, well, that's Bill, he gets a pass on everything.
00:28:02.950 --> 00:28:05.715
It's demoralizing right.
00:28:05.715 --> 00:28:13.298
And then you feel like you know, I'm working my tail off Bill's golfing, but yet we got the same bonus and he's getting promoted when I'm getting promoted.
00:28:13.298 --> 00:28:24.317
And so I think you create an environment where you say I love you, you're special, you're valuable, but you still have to perform today and you got to perform tomorrow.
00:28:24.317 --> 00:28:25.386
Now how can I help you?
00:28:25.386 --> 00:28:27.450
But at the end of the day, I need you to do that.
00:28:27.450 --> 00:28:48.692
And I think when you provide that structure to folks, I mean and I'm really high level here, dave I mean we could go into excruciating detail on specifics, but to me that's the key tenet that I think allows you to be successful as an organization and retain your individuals, or at least retain the ones that have the skill set that align with what your company needs.
00:28:50.055 --> 00:28:59.397
Are you finding that any of these companies are struggling with the right talent and that that's part of what may affect their ability to grow and advance?
00:29:00.286 --> 00:29:02.452
Yeah, I think every company struggles with that.
00:29:02.452 --> 00:29:21.684
I mean, talent evaluation is such a challenging process, right, and even when you think you got it right sometimes a year later, particularly in our venture companies, where they're growing like a weed 200% a year there are three people, 10 people, 50 people Suddenly that person who worked well at three doesn't work so well at 50.
00:29:21.684 --> 00:29:34.775
And so it is a constant challenge to say do I have the right skill sets, do I have them in the right seats and can they stay there if I 2X the company from where it's at today?
00:29:34.775 --> 00:29:38.973
But it's hard and it's you know, it's really a journey.
00:29:38.973 --> 00:29:43.972
You never get to the destination where I have the perfect team, the minute you believe that you're in trouble.
00:29:43.972 --> 00:29:45.991
So it's never ending.
00:29:47.246 --> 00:29:48.450
So, tim, you mentioned earlier.
00:29:48.450 --> 00:29:50.949
Let's talk about AI because it's interesting.
00:29:50.949 --> 00:30:01.813
You mentioned that it's used within your portfolio companies, but I guess, when you think about, when you look at a company and you evaluate them, what would you expect to see from an AI perspective?
00:30:01.813 --> 00:30:04.729
Because I think there's a lot of people now who are conflicted on.
00:30:04.729 --> 00:30:07.875
The media says everybody's using it, but I'm not.
00:30:07.875 --> 00:30:10.439
So where's the reality?
00:30:10.439 --> 00:30:13.510
Is it only larger companies?
00:30:13.510 --> 00:30:14.653
Is it smaller companies?
00:30:14.653 --> 00:30:21.535
Kind of talk to us about where you see AI actually being deployed and having a business impact today.
00:30:22.156 --> 00:30:28.445
Yeah, well, first, on your general question and sort of the fear of missing out, it's incredibly real in AI today and it's interesting.
00:30:28.445 --> 00:30:39.815
There was an article in the Wall Street Journal this week that said 61% of executives believe that AI is a game changer and roughly the same percent said they had no confidence in their senior management team to execute it at their company.
00:30:39.815 --> 00:30:44.019
Yeah, exactly, and I don't think it's actually confidence.
00:30:44.019 --> 00:30:49.392
I think it's lack of confidence in themselves, like because I don't understand AI, which most of us actually don't.
00:30:49.392 --> 00:30:51.695
Right, and we understand line one.
00:30:52.757 --> 00:31:02.213
And so I think, number one, if you have that fear, like you know I don't really understand this, like I can't even get my computer to talk to my printer sometimes, how will I ever understand AI?
00:31:02.213 --> 00:31:03.217
You're not alone.
00:31:03.217 --> 00:31:09.878
We all are intimidated and in awe of this thing called AI all at the same time.
00:31:09.878 --> 00:31:13.291
So, number one, relax and accept that.
00:31:13.291 --> 00:31:24.008
Yep, it's new to me, but it's new to everyone and, as humans, things that are new are scary and it's just like how to eat the elephant we just got to take our first bite and so where do we see?
00:31:24.068 --> 00:31:39.432
It was the question you asked, and I think it's not about the company size, because obviously, I work with small venture companies that are all over AI and their ability to dream how it can impact businesses and marketplaces is incredible.
00:31:39.432 --> 00:31:47.913
Certainly, big companies have the resources to deploy AI and they've got boards that are saying you better be saying AI and your quarterly earnings.
00:31:47.913 --> 00:31:49.857
You better use the word artificial intelligence.
00:31:49.857 --> 00:31:50.404
Yeah, you know.
00:31:50.404 --> 00:32:15.977
So I think it's much more about the mindset of the company in terms of you know what are we trying to drive and is senior management banging the drum of innovation and innovation through AI, and so I think it's much more around the aptitude to grasp something new, more so than company size or company sector, for example.
00:32:16.765 --> 00:32:18.508
Wow, well, this has been fascinating.
00:32:18.508 --> 00:32:26.607
So, tim, we typically end each episode with a question, the same question.
00:32:26.607 --> 00:32:35.994
We call it our Make it Count segment, and this is where we ask the guest to share one actionable takeaway that other business leaders can count on.
00:32:35.994 --> 00:32:37.992
You have so much insight.
00:32:37.992 --> 00:32:45.549
It's probably gonna be hard to pick one, in my opinion, but if you had one piece of advice on how to innovate, what would that be?
00:32:46.246 --> 00:32:47.644
Yeah well, thank you for the comment.
00:32:47.644 --> 00:32:51.174
I would say that one piece of advice is it's your mindset.
00:32:51.174 --> 00:32:57.051
Your mindset has to be every day it's my job to improve my company.
00:32:57.051 --> 00:32:58.849
And how do I do that?
00:32:58.849 --> 00:33:05.895
I do that through making sure my employees know that every day, it's my team's job as well to improve the company.
00:33:05.895 --> 00:33:16.568
So my mindset is hey, we're talking about a problem and this customer is not happy and we're struggling to meet the customer's demand and our competitors kicking our backside.
00:33:16.568 --> 00:33:18.934
Okay, great, are we?
00:33:18.934 --> 00:33:20.518
You know, every understands the problem.
00:33:20.518 --> 00:33:27.430
Now let's ask the question we got to solve this customer problem today, but how do we make for a better process, guys?
00:33:27.430 --> 00:33:30.989
What are we doing and how do we do it better tomorrow?
00:33:30.989 --> 00:33:41.036
And if you ask that question, enough, what happens is your team then picks up on that and they start asking the question hey, how do we get better?
00:33:41.576 --> 00:33:45.491
Number one you have to insert into mindset it is our jobs to improve.
00:33:45.491 --> 00:33:48.097
By the way, that's what innovation is, innovation.
00:33:48.097 --> 00:33:50.153
A lot of times people say innovation equals technology.
00:33:50.153 --> 00:33:56.877
Technology is a great tool in the United States to innovate, but innovation is much, much broader than technology.
00:33:56.877 --> 00:34:02.050
So it has to be that mindset that says what can we do better.
00:34:02.050 --> 00:34:04.656
You then create that culture inside the company.
00:34:04.737 --> 00:34:15.326
And then finally, as the third piece of that mindset is when folks bring ideas, sometimes you got to let them run with it, even though you're like that's not going to work.
00:34:15.326 --> 00:34:16.548
But you know what?
00:34:16.548 --> 00:34:23.835
I'm going to let them run Because if I ask people, the worst thing you can do is say give me ideas on how to make it better, and then I shoot every one of them down.
00:34:23.835 --> 00:34:27.833
Eventually people just turn off the knob and say, yep, that's happy.
00:34:27.833 --> 00:34:28.516
Talk from Tim.
00:34:28.516 --> 00:34:43.132
And so to me, that's the advice I would give Mindset every day to bring it in, then have the courage to let somebody try it, even if it may not work, because, by the way, sometimes you'll get surprised like, well, I'll be darned, that actually worked.
00:34:43.132 --> 00:34:44.505
Thank goodness, I didn't say nothing.
00:34:44.505 --> 00:34:48.635
So that would be my guidance to business owners and leaders out there.
00:34:49.096 --> 00:34:50.257
Well, that's great, thank you.
00:34:51.166 --> 00:34:52.891
So, Tim Spillman, thank you for joining us.
00:34:52.891 --> 00:34:53.693
We appreciate it.
00:34:53.693 --> 00:34:57.731
As always when I hang out with you, I always learn something, so I appreciate it very much.
00:34:57.731 --> 00:35:00.391
Thank you for taking the time sharing your insights with our audience.
00:35:00.954 --> 00:35:02.117
Yes, thank you, it's been fun.
00:35:02.556 --> 00:35:05.179
Thank you for joining the but who's Counting podcast.
00:35:05.179 --> 00:35:10.943
Make sure to never miss an episode by subscribing on Spotify or Apple Podcasts and let us know what you think by rating and reviewing.
00:35:10.943 --> 00:35:17.172
Keep up with more of Andrew's CPAs and advisors' insights by following us on social media through the handles in the show notes.
00:35:17.172 --> 00:35:18.378
We'll see you next time.
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