Pete Vera, Exit Algorithms: Welcome to Exit Algorithms, the podcast where we decode what it really takes to unlock growth, streamline operations, and prepare your business for a high-value exit. I'm your host, Pete Vera, and today I'm joined by George Pilari. George grew his first company from a college startup to over a thousand employees before taking it public and eventually becoming part of IBM. Throughout his career, he's been a crisis manager and turnaround specialist for hundreds of companies. He's authored two books, been named Ernst Young Entrepreneur of the Year, has been quoted in the Wall Street Journal, New York Times, Washington Post, and on CNN. George, excited to have you here. Welcome to the podcast.
George Pillari: Yeah, good to be here, Pete.
Pete Vera, Exit Algorithms: Yeah, I'm excited to get into this. why don't we start off, George? Do you mind sharing a bit about your background and and business journey? What led you to your work today?
George Pillari: Sure, sure. I began my business career while I was in college. I was kind of a numbers grunt. I was, you know, an applied mathematics and statistics major and went to work for a couple of professors who were in a kind of an emerging field known as healthcare economics. And now, you know, it's it's everywhere. But at that time I was lucky, I had some great mentors. And you know, I learned how to use data, how to make a point, how to do a lot of deep research to do analysis and things like that, and always wound up in published articles in academic journals. So I my start was as a researcher and a data analyst. And from there we turned that into a company. really, we gathered a ton of data. Which at the time was difficult to collect on all kinds of hospitals and healthcare companies. Put it all in a database so you can just push a button and learn anything you wanted to about, you know, how profitable was a hospital in Des Moines, Iowa, things like that. and that grew into a really interesting business because we measured the outcomes, you know, whether somebody got well if they took a certain treatment, and things like that. So it was it was really an interesting. Knowledge Worker type company. It was really fun. I did a another company after that, which involved outsourcing to India. At the time, having offshore operations was becoming the new thing. And we processed huge amounts of healthcare claims and information on behalf of employers. So that was another interesting company. And then the second half of my career, I got into Away from making widgets, right? As an entrepreneur, you're you're really making the widgets and enjoying it. but as you move through your career, you spend more time with boards, more time with lenders, more time with regulators, all kinds of other outside agencies. So I spent the second half of my career doing interim CEO crisis management type work, where you have to go in and try to keep everybody from killing each other first. and you know, try to recover what you can for your lenders and investors. and that's where I've learned a lot of lessons. I've been in, you know, like you said, more than a hundred companies. And you know, my first book was a kind of a consolidation of a lot of those lessons: the seven deadly stupidities. It's all about bad decision making and and why we make bad decisions. You know, for example, You know, why why wasn't there some additional due diligence done before people wrote a check? you know, really
Pete Vera, Exit Algorithms: Mm.
George Pillari: simple things that we tend to overlook and a bunch of examples in there. Second book I wrote because I I really like technology and you see it everywhere has been about AI. And it's called No Adult Left Behind. AI is Learning RU. And I chose the title because back in the early 2000s. There was a there was legislation in the United States called the No Child Left Behind Act. And it was to make
Pete Vera, Exit Algorithms: Mm-hmm.
George Pillari: sure every child in grade school had a real basic understanding and minimal knowledge, at least, of reading, writing, and arithmetic. So I thought it was appropriate from a title standpoint, because we have so many people in mid and later careers right now that have had a level of success, but they're like, what do I need AI for? You know, I'm I'm doing
Pete Vera, Exit Algorithms: Mm.
George Pillari: fine. And this is kind of like, well, you're gonna need it because it's just this isn't a fad. I like to say it's kind of like Excel. it's kind
Pete Vera, Exit Algorithms: Yeah.
George Pillari: of like the internet. You know, it's one of those waves where the technology will pervade everything. So that's where we
Pete Vera, Exit Algorithms: Yeah.
George Pillari: got to. book came out a couple of months ago, and it's kind of a the reviews, I'll let the reviews speak for it, you know, tell you it's kind of a readable guide. To you know how to use AI and how to understand it. I talk about what's going on in certain industries, healthcare, aviation, military, things like that, as well as how to use AI at your job, how to make presentations. and then I talk about the Battle of the Bots, right? Where you submit your resume, it's being screened by an AI. So you should probably
Pete Vera, Exit Algorithms: Yeah.
George Pillari: turbocharge your resume by running it through some AIs first and giving yourself a better chance. So it's a lot of fun putting it together and a lot of fun talking about it for the last month or two 'cause people are really interested in the topic.
Pete Vera, Exit Algorithms: Yeah, absolutely. awesome. I I love your your story and your journey and we'll talk a little bit more in depth, I think, at the end about AI. yeah, w why don't we start off with a little more, you know, on your your career. When you you sold did you you exited a number of your own companies first, is that right?
George Pillari: Yes. Yes. And you know, somebody very, very wise when I was young, gentleman, you know, much more senior, said to me, Never go in unless you know how you're getting out. All right. meaning think about your exit before you even start the company. All right. which is good advice because she might build the coolest thing in the world. It might be a great product, customers might love it, but it might not be a company anybody wants to buy. so I thought that was interesting. Because you can't do that at the last minute. You gotta think about your exits early in the way you design things, the systems you choose, you know, things like that. You know, if you could, you know, get get a company on a unified ERP system, for example, even if an even if a a company that's acquiring you has a different ERP system, it's much easier. Right, to migrate from a stable ER ERP to another stable ERP. many times you might build a company through a bunch of small acquisitions. I was in a company once that had 31 different payroll systems. And you know, and that's a mess, right? That's very that's that's a real turnoff for a buyer. You know, when all that stuff's on one platform, you're using Oracle or something to run your payroll or everything's running through ADP. People look at that and go, that'll be easy. You know, it's not it's not marking down your price because you thought through it. You thought through what's gonna make my what's gonna make my company attractive to a buyer. And that's something I think senior executives and owners have to think about all the time. Not just my customers, right? You know, who's who's gonna be the eventual owner of this thing? And how do I have to contour the business, my contracts with customers, how do I make things so that it's it's easy. Right for a buyer. Don't put up any roadblocks and red flags.
Pete Vera, Exit Algorithms: Definitely. Yeah, that's that's great advice. you know, and and yeah, you can identify a a popular like you said, ERP system. That's a great example. and you can make your model your business after what, you know, what they you think they would wanna see, make it easier to integrate, right?
George Pillari: Yeah, it's actually better. Even if even if you take a small hit to your revenues and your profitability for a year to go through the pain of something like that, it's definitely worth it when you're thinking about an exit two, three, five years down the road. You know, if you're gonna look to sell in the next twelve months, don't waste your time doing that stuff. But you know, if you're forming a business or you're looking at a three five year horizon, things like that really need some thought. And I think that's kind of what, you know, what Part of what you do is, right? You help people think through these things. But you really, it's hard because you're you're taking money out of your own pocket today, right? If you're the owner, making these investments, hoping you get a return on it down the road. And you definitely will. The more you can make your business look like the acquire oars business, the easier it is for somebody to acquire you.
Pete Vera, Exit Algorithms: Yeah. definitely. Makes sense. You were you given that advice before you exited or or were maybe there's some some bumps in the road? Yeah.
George Pillari: that one that one hit me. Yeah, that one that one I I found out on my own from talking to buyers. my first company was kind of in a, you know, a modestly frothy sector at the time. It was kind of a new, you know, the healthcare information technology world was just growing up. There were clearly some big guys in the space and I was one of the little and medium sized guys. And You know, you realize what people were looking for. At the time, they really wanted recurring revenue. Okay, they wanted to see people under contract for three years, things like that. They would take lower revenue if it was, you know, mostly recurring, so that there was a level of predictability in the business. I think that's probably still true today with anybody to the extent you're you know, you can overcome your customer churn or however you want to do it, you know, you can say, hey, you know, 87% of my revenue is going to recur next year. you could you have a much lower risk enterprise.
Pete Vera, Exit Algorithms: Yeah, definitely. Yeah, I think a a lot of it comes down to, you know, reducing the perceived risk,
George Pillari: reduce the the procedure growth.
Pete Vera, Exit Algorithms: right, in the eye of the of the buyer.
George Pillari: 100%. That's that's pretty much the most important thing. You know, whether it's key personnel, systems, exposure to one customer. You know, the big customer is great when you're getting going, right? You you have a party, but when somebody looks at your business and you have 40% of your revenues with one customer, they're really not they don't want to have a conversation with you anymore. They wanna go meet the customer and make sure the customer's gonna stay locked in through an ownership change.
Pete Vera, Exit Algorithms: Yeah, exactly. Yeah, and and a number of your organizations also have been on the acquiring side as well. Is that is that right?
George Pillari: yeah, I I've I've been involved in you know several dozen acquisitions, big and small. And acquisitions are tough, you know, they're they're hard to do, time consuming, and everybody wants to point fingers when it doesn't work. You know, so
Pete Vera, Exit Algorithms: Right.
George Pillari: you really have to, I mean, the term you hear is spring loading, which is before you do the deal, you know, you really have to understand all the things you're gonna change. you know, so that the day the thing closes, your hundred-day plan starts. All right. There there's some ways where spring loading isn't quite legal. I'm using a a term loosely, but with public companies, if you do certain things before the acquisition and they call it spring loading, where you're you're making certain changes to the business so that it's better for the new owner, but it it hurts the current shareholders. But the concept is valid. You really want to make sure. you you know, you're you're way out ahead of things. And when the thing closes, that's just one of the milestones. You know, like that day you might want to do your RIF if you're gonna let go of 50 or 100 people. You want to do it the day you close. No need to wait around
Pete Vera, Exit Algorithms: Mm.
George Pillari: for a month. You should have that all thought through, you know, before you sign transfer funds.
Pete Vera, Exit Algorithms: Right. Yeah. And and from a buyer's perspective, what were some of the the main things, maybe top three things that you would that you know you look for in a in a acquisition target?
George Pillari: Well, from a a risk standpoint, right, it's always the integrity of the financials. Okay, so I'm sure you're familiar with the term quality of earnings, where you know it's really important to understand, okay, you made a million dollars last year, but I see it half of that came from one customer, and that customer is now liquidated in bankruptcy. You know, so you don't you don't have a starting point of a million dollars. So really understanding that that Q of E is a big deal, all right, as a seller. And you should periodically really do that with your board or with any advisors you have. Do a little poor man's version of it. You know, take take you a half hour, you know, to sit down and figure out, you know, what's goosing up your earnings or what's depressing them. so that you can get a real good look at it. The second thing is always the people. All right. If you could do acquisitions, not have any people involved, they'd be really easy. But you know, everybody always acts in their in their self-interest. All right. You have to just remember that. I don't care what they say, or they're doing this for their shareholders and for this. Everybody acts in their own self-interest. and You know, you're always gonna have fights over somebody's employment contract, or some bonus they say they're owed, all that kind of stuff. So it's you if you can't cut through the social issues early in a in a diligence, I would cut and run from the deal. All right. I wouldn't force that unless you're gonna fire everybody. If you're gonna clean house and you have you're confident you can do that, great. But if you're bumping into social issues early and they and they just feel off, that that's a that's a signal to just walk away. I guess the third thing as a buyer is something in the regulatory world. All right, there's always something that's overlooked. I'll give you an example, and this is where you have to get creative and and you have to kind of look for a problem. Right. You want to find it before you spend the money for the acquisition, right? So I think here's an example. There was a company that did remote monitoring of operating rooms, right? They put equipment in the operating room, and then a doctor sat in a reading room, you know, off-site someplace in an office and could monitor what was going on during the operation. Great. Low it improved costs, it improved quality, it was a great model. Then what happened is the payers like Medicare and Aetna and people like that said, wait a minute, one doctor, one read. Because what they were doing was they would have one doctor with three or four screens up at once, all
Pete Vera, Exit Algorithms: Mm.
George Pillari: right, three or four operations going on, and the doctor could bill for four cases. You know, the company could build four cases at once and insurance shot that down. It blew apart the business model. All right. And
Pete Vera, Exit Algorithms: wow.
George Pillari: the company, you know, had to get wrapped up and sold. So always look for when they have kind of a magic bullet. it's probably not a magic bullet. You know, and you really need to, you know, deconstruct some of those things and and run some worst case scenarios. Otherwise you're just gonna fool yourself and waste a lot of money and maybe ruin your career.
Pete Vera, Exit Algorithms: Yeah, definitely. Yeah, and so and someone trying to
George Pillari: Yeah, thanks so much.
Pete Vera, Exit Algorithms: sell their business, you know, on that token be very transparent and, you know, demonstrate clearly to the to the perspective buyer, right?
George Pillari: You y you said something, a big word there, transparent, right? So if you disclose things and you're transparent about everything early on in diligence, you build trust, right? Even if even if it's a bad fact, right? It you're you're building trust with the buyer. If the buyer has to discover it or it was public information and they discovered, you didn't tell them, you know, you're cooked. There's never gonna be a level of trust there. so you might have already you might have killed your own deal by thinking you're if I don't tell them about something, it's gonna help me. That's just they're gonna find out.
Pete Vera, Exit Algorithms: Yeah. great, great advice. Yeah. And I'd love to talk a little bit about your your turn turnaround experience working with distressed companies. maybe, yeah, and and you talked a a lot about it in your book, Seven Deadly Stupidities. what are maybe some some through lines or some some of the major the highlights that the business owners listening could apply today?
George Pillari: I think the the common threat I saw in almost every distress situation is a vision that people won't give up on. Okay. So you have management, rightfully so, shooting for the stars, right? They want that equity to be worth a lot of money. but look, you got a lot of debt as well. You gotta make sure you you're running a company responsibly so you can. Pay your debt service and keep things intact while you're shooting for the moon. And in almost every case, there was just millions of dollars wasted on initiatives that never panned out. And that's okay, that happens to every company. But when you have these kind of bet the farm initiatives and they don't pan out, well, you bet the farm. then you gotta you gotta face those consequences. So I've seen a lot where people, you know, they they they say, well, you know, we're gonna enter the long distance we're we're gonna enter the telephone market with a handheld device. Well okay well isn't there Android and iPhone and things like that and Samsung companies I've heard of and they go all we all we have to do is get point one percent of the market And we're gonna be a hundred million dollar company. You know, so they have all the model all laid out and and how many per month they're gonna ramp up. And it you're not gonna get it, right? It's just you know, I'm giving you an example here, but that's like the kind of things that people build into business models to try to impress their boards. and you know, the other thing is there are some managers and some owners, owners especially, that work for the equity. Right. They want that equity value. But I could tell you right now, 99% of all the other executives, all they care about is their base pay and their annual bonus. Right. When I call it the great American bonus protection scheme, right? Where managers are shuffling around, producing charts and tables. here are my goals for next year that I should be paid on. You know, some of these things are ridiculous. Right, ridiculously easy. And all they care about is making that annual bonus. They don't care about
Pete Vera, Exit Algorithms: Mm.
George Pillari: the value of their equity. That has to change. You know, I think part of the problem has been COVID has given a lot of power to the worker. You know, you you can't you can't get a management team to live in one city anymore. It's impossible. Yeah. I mean, companies I'm working at now, people are all over the country in both of them. Not even two in the same state. So, you know, so the worker has the upper hand now, can demand more pay, demand better bonuses, but at some point we'll get back to people that really want to be entrepreneurs and really build something. And you know, take modest pay, reasonable pay, and and build the equity. You know, don't worry
Pete Vera, Exit Algorithms: Mm.
George Pillari: about your annual bonus. You're gonna make a lot of money when your equity goes over the top. we need more, we need more of that. I think that's why you see so many kind of ghost zombie companies out there now, where they had a lot of investment put into them. But you know, nobody's fired up about building underlying value. They care about, hey, I'm gonna make my bonus this year. It's a bad it's
Pete Vera, Exit Algorithms: Mm.
George Pillari: a sad state of affairs, I think.
Pete Vera, Exit Algorithms: Yeah. yeah, and it where do you see companies go wrong, you know, when they're like what's the what's caught you think that's the main cause for them to the culture and and and things like that that contribute to the decline?
George Pillari: That that's a big pillar. The second pillar is boards are just lazy. Okay. Boards don't do anything anymore. All right. they, you know, I was I was looking at a company where the board members were were making like two, three hundred thousand bucks a year, all right, for half dozen meetings. And I said, You guys gotta make some changes to this company. You gotta do this. You got nobody wanted to rock the boat. Okay. Okay. Nobody wanted to like step in and say, hey, wait a minute, I'm gonna pound the table on this. So that's everywhere. You don't have boards, boards don't have spines anymore. And you know, I once wrote an editorial about this, like an op-ed piece, I'm sorry, about this. When I was at Alvarez in Marcel, you know, which is pretty much, you know, the the top turnaround firm in the world. I do this stuff on my own now. You know, I but I I'd spent a dozen years at Alvarez in Marseille and they wouldn't let me publish it. They said, no, you're gonna alienate too many of our relationships. Okay. So, but it's true. Boards, boards, it's ceremonial. I tell friends of mine, I said, Don't go on any boards. They're like, Why? I go, well, why are you going on the board? You want to go tell your friends at a cocktail party you're on some board. So you're going to get sued. All right. When the company creators and things go wrong, they're going to go after the board members. They're going to they're going to ask you, why did you approve this bonus? Why did you approve this business plan? You're not even paying attention in these meetings. You're going to get wiped out. So don't go on a board unless you're going to be really active, is what I tell people who ask me. And I follow that advice. So that's you have those twin forces of evil, if you ask me. you know, the greed factor of I want my bonus and the greed factor of I'm a board member, I'm really cool, I'm getting paid and I'm not gonna I'm not gonna ruin this gig.
Pete Vera, Exit Algorithms: Interesting. I love it. yeah, let's talk a bit about technology. you know, you've seen a a number of disruptive technologies, innovations in in your business career. how does AI compare to some of the other ones you lived through?
George Pillari: AI is you know, magnitudes more powerful than the examples I like to use, which I wrote about, or the dawn of the internet,
Pete Vera, Exit Algorithms: Mm-hmm.
George Pillari: the Excel, and smartphones, right? Those are like the three biggest changes we've seen, right, in in most of our lifetimes. And you know, AI is faster, faster adoption and more widespread. If you if you look at things going all the way back, the examples you hear are like radio, right? Radio was the death of distance, right? Now you can listen to somebody from a thousand miles away, right? That took a certain number of decades to ramp up where people had radios, television, you know, a little faster. All right, internet way faster, smartphones faster, you know, AI is pretty much everywhere now in like two years or something. Right, be when it was made mainstream. You know, and there's some good I forgot, I I gotta find the quote, but what what a gentleman said, a commentator of of some import, he said, it's all we talk about, you know, when when the topic of AI came up. That's all everybody talks about. And it's kind of true. so I think it's I think it's a powerful technology. The example I like to use is You know, who wouldn't want to have all the world's knowledge in the palm of their hand? Right? It's it's really a powerful tool. and it's much different than search. I have a chapter in the book about that. Explain how it's different from search, different from a chatbot. you know, real a real a real AI is a powerful tool and it has to be used correctly. you could you can immediately see the danger. The terminology in the industry is human in the loop, human on the loop, or human out of the loop, right? Which is really we're going to hear about these terms for a long time, all right? And human in the loop is what it sounds like. Okay, a human is using the AI to assist with the task. Maybe the AI is proofreading or editing or something, but the human is responsible and hits send, right? human on the loop. Is kind of like the autopilot on a plane, right? Where the AI is taking over and doing everything, and the human monitors and intervenes when there's an issue.
Pete Vera, Exit Algorithms: Mm.
George Pillari: Okay, that's kind of where most AI is moving right now. Then you have human out of the loop, which is fully autonomous. Fully autonomous car, right? It's a big jump to go to human out the loop. It's not linear. It's it's a really big jump to go from human on the loop to human. To human out of the loop. And that's why, you know, autonomous cars have been around a long time. Really long time, right? Decades. It's slow though. It's slow to you don't see them everywhere just yet. Now it's starting to pick up some speed, but it's really hard. It's really hard because those cars have to be trained on every conceivable scenario. Was that a deer
Pete Vera, Exit Algorithms: Mm.
George Pillari: that ran in front of the car? Was that an elk? You know? You think you know W was that a a child or was that a big dog? You know, it's there's just so many things that the AI has to learn, which is why that one's so slow, as far as adoption goes. So in in no
Pete Vera, Exit Algorithms: Interesting.
George Pillari: time, you know, it's gonna be high school requirement, right? a course in AI, if it's not already in a lot of places. It'll replace having to learn French or German or something, you know, learn, learn, you know, become fluent. you know, in AI. It's not that hard. Okay.
Pete Vera, Exit Algorithms: Yeah.
George Pillari: It's not that hard to become a good fluent user. you just have to not be afraid of it.
Pete Vera, Exit Algorithms: Yeah. fascinating. yeah, I'd love if you could share a bit with us some maybe some key takeaways from from your latest book, No No Adult Left Behind. and yeah, and then maybe some s some advice on the proper use of AI for for business owners.
George Pillari: Right. Now you don't you don't have to become an expert, is what I what I want to make sure people understand. And you should spend twenty dollars a month for a premium subscription to, you know, Claude or Clod co-work is fantastic for a business owner. they really should take some time and learn it. you can organize your whole life in there. and it goes in and reads your emails for you. It it'll go in anywhere you want to send it, it'll help you do things. I'll give you a great example that what's the worst thing all of us what we all dread doing as business people is your expenses. I don't know one person who enjoys doing their expenses, okay? And it's getting a little easier with things like ramp and some of these other technologies where everything is on, but you still gotta do it. And you still have a lot of emails that have receipts in them. So I wrote a little agent. And every Friday morning it scans my email and anything that says American Airlines or Uber or anything like that, it pulls it, creates, you know, a file and it puts it all in one folder for me. All right. So when I do my expenses, I just click and I just pull them all out of there and attach them. Simple thing, but I took the pain away from something that, you know, maybe took me a half an hour, a week or an hour, but I hated doing it. I just hated scanning through emails or where's my Southwest receipt from two weeks ago? Who wants to do that? You know? So, you know, that would be a use, but I think what people have to do is play with it. and the example I like to use is get on the AI and feed it your LinkedIn profile. Right. And say, hey, what do you think of my LinkedIn profile? tell me what you know what level of my career do you think I'm at? What does this reflect about me? Ask it some hard questions. You might be stunned at what comes back. Because I got news for people. If you're not keeping your LinkedIn up to date, you don't really exist anymore. Okay. Even
Pete Vera, Exit Algorithms: Mm-hmm.
George Pillari: though LinkedIn's got kind of spammy and all that, if your LinkedIn profile isn't up to date, you're you're you're you're roadkill. Okay, because that's where everybody goes right away. All right. so people need to do that. So play with it with something you know, like your LinkedIn profile or your resume, something that you can work on, like you're dealing with a colleague. I like to say the AI is like having a friendly professor to ask questions and and push things back and forth. So let it let it run through your life, let it run through your your LinkedIn. And say, hey, what else should be in here? It'll it'll tell you things like, hey, you seem to be very accomplished in this field. Do you have any awards? Have you done any speaking engagement that should be on here? It'll it'll it'll think of things that you took for granted. I know I did. I know I have a whole bunch of stuff. I never even listed them, and I'm like, boy, you know, this was eye-opening for me. So, because a lot of consultants I work with, they have a log of like everything they've ever done every day of their lives. And I never did that. but conversing
Pete Vera, Exit Algorithms: Mm.
George Pillari: with the AI really helped me shape how I present myself on paper and in person. so I would I would start there and then as a business owner, I would probably throw it into the competitor analysis. I would say, you
Pete Vera, Exit Algorithms: Mm.
George Pillari: know, here's my company. and don't tell it who the competitors are. You know, I'm in this industry, right? We make tires or whatever we do. And identify my competitors both geographically and by product and create a matrix. Give me a table that shows me how I stack up, how my company stacks up against these guys. Where am I where am I better? And so on. My pricing. And then the AI will give you all the dimensions: pricing, product mix, all that. They'll do all that for you. Then you have a draft of something, and you can push that back and forth for 15 minutes with the AI. I I made a a visual last night of a very difficult thing to explain. it was you know, I was trying to explain it to my wife and she kept shaking her head. So I I sat down and made the graphic, but I it took four or five iterations to get the graphic the way I wanted it. And then she looked at it and said, I get it. You know, so
Pete Vera, Exit Algorithms: Mm.
George Pillari: i if you you think about it, it's a conversation. It's it's not like search where you type in a word and you get a list of stuff. No, it's it's it's a it's a knowledgeable, friendly professor that can help you and give you and give you objective advice. It's you know,
Pete Vera, Exit Algorithms: Mm-hmm.
George Pillari: AI AI is probably wouldn't be bad board members, you know, you know, properly chaperoned, because they're they're not gonna
Pete Vera, Exit Algorithms: Yeah.
George Pillari: fall for some some garbage management puts out. They're gonna go, your competitors in three markets are doing that already. Why is that a why are you putting a million dollars into that project? So I would I would do that. I would start out with the competitor analysis and don't guide it too much, but give it a good healthy prompt. That's very important. Give
Pete Vera, Exit Algorithms: Mm.
George Pillari: it a you know, write a paragraph. You know, my business is five years old, I'm in this space, you know, I'm trying to do X, Y, and Z. who are my competitors? You know, who who's selling substitute type products to what I do? you know, should I be competing on price, service? You know, where where is my best path? And then let it let and run through your resume or your bio or your LinkedIn. That's stuff that's close to home and it'll make you feel like you know what you're talking about.
Pete Vera, Exit Algorithms: Yeah. awesome. Great, great advice, George. Man, I l I love this conversation. I got one last question for you. I and I know you touched on it quite a bit earlier, but if you could leave listeners with one practical tip that would move the needle the no the most for small business owners prepping for a successful exit, what would that be?
George Pillari: I think if you're prepping for an exit in today's world, you must have an AI strategy. All right. Even if it's small, even if because the first thing a buyer is going to do is to say, where's AI in your company? Like, what are you doing with AI? And even if you have a marketing team that is constantly updating competitor analysis, to use my example, that's useful. It shows that you're progressive. All right. Think about if you're selling your company, it's like a job interview. You're being interviewed, right? Your company's being evaluated. And if you're not modern and you're not current with what's going on, you know, that says something. It it it pushes your price down, is what it does. So I would say have some kind of AI strategy, even if it's small, and you could say we're our A straight strat AI strategy starting here. And we plan to expand here. It doesn't have to be grand, right? But you must have AI running somewhere in your company.
Pete Vera, Exit Algorithms: Yeah, you give some great advice, sir. Thank you so much for your time today. where's the best place listeners can find you,
George Pillari: Ways listers can find
Pete Vera, Exit Algorithms: your your blogs, business, and and your book?
George Pillari: Sure. I I publish weekly. you can you can sign up for by email for the thecautionary.com. Okay, thecautionary.com. And on there is also information about my books. and you can just you can search my name and find me if you want to find my personal website. It's running fox partners. But the the cautionary is where all the material and content is and my my bio and background and all that kind of stuff's on my running fox website. So hope that helps.
Pete Vera, Exit Algorithms: Great. I'll leave that in the in the show notes. It'll be easy to find ya.
George Pillari: Yeah.
Pete Vera, Exit Algorithms: thank you, George. Love this conversation. It was great talking to you.
George Pillari: All right. Thank you, Pete.
George Pillari: Yeah, good to be here, Pete.
Pete Vera, Exit Algorithms: Yeah, I'm excited to get into this. why don't we start off, George? Do you mind sharing a bit about your background and and business journey? What led you to your work today?
George Pillari: Sure, sure. I began my business career while I was in college. I was kind of a numbers grunt. I was, you know, an applied mathematics and statistics major and went to work for a couple of professors who were in a kind of an emerging field known as healthcare economics. And now, you know, it's it's everywhere. But at that time I was lucky, I had some great mentors. And you know, I learned how to use data, how to make a point, how to do a lot of deep research to do analysis and things like that, and always wound up in published articles in academic journals. So I my start was as a researcher and a data analyst. And from there we turned that into a company. really, we gathered a ton of data. Which at the time was difficult to collect on all kinds of hospitals and healthcare companies. Put it all in a database so you can just push a button and learn anything you wanted to about, you know, how profitable was a hospital in Des Moines, Iowa, things like that. and that grew into a really interesting business because we measured the outcomes, you know, whether somebody got well if they took a certain treatment, and things like that. So it was it was really an interesting. Knowledge Worker type company. It was really fun. I did a another company after that, which involved outsourcing to India. At the time, having offshore operations was becoming the new thing. And we processed huge amounts of healthcare claims and information on behalf of employers. So that was another interesting company. And then the second half of my career, I got into Away from making widgets, right? As an entrepreneur, you're you're really making the widgets and enjoying it. but as you move through your career, you spend more time with boards, more time with lenders, more time with regulators, all kinds of other outside agencies. So I spent the second half of my career doing interim CEO crisis management type work, where you have to go in and try to keep everybody from killing each other first. and you know, try to recover what you can for your lenders and investors. and that's where I've learned a lot of lessons. I've been in, you know, like you said, more than a hundred companies. And you know, my first book was a kind of a consolidation of a lot of those lessons: the seven deadly stupidities. It's all about bad decision making and and why we make bad decisions. You know, for example, You know, why why wasn't there some additional due diligence done before people wrote a check? you know, really
Pete Vera, Exit Algorithms: Mm.
George Pillari: simple things that we tend to overlook and a bunch of examples in there. Second book I wrote because I I really like technology and you see it everywhere has been about AI. And it's called No Adult Left Behind. AI is Learning RU. And I chose the title because back in the early 2000s. There was a there was legislation in the United States called the No Child Left Behind Act. And it was to make
Pete Vera, Exit Algorithms: Mm-hmm.
George Pillari: sure every child in grade school had a real basic understanding and minimal knowledge, at least, of reading, writing, and arithmetic. So I thought it was appropriate from a title standpoint, because we have so many people in mid and later careers right now that have had a level of success, but they're like, what do I need AI for? You know, I'm I'm doing
Pete Vera, Exit Algorithms: Mm.
George Pillari: fine. And this is kind of like, well, you're gonna need it because it's just this isn't a fad. I like to say it's kind of like Excel. it's kind
Pete Vera, Exit Algorithms: Yeah.
George Pillari: of like the internet. You know, it's one of those waves where the technology will pervade everything. So that's where we
Pete Vera, Exit Algorithms: Yeah.
George Pillari: got to. book came out a couple of months ago, and it's kind of a the reviews, I'll let the reviews speak for it, you know, tell you it's kind of a readable guide. To you know how to use AI and how to understand it. I talk about what's going on in certain industries, healthcare, aviation, military, things like that, as well as how to use AI at your job, how to make presentations. and then I talk about the Battle of the Bots, right? Where you submit your resume, it's being screened by an AI. So you should probably
Pete Vera, Exit Algorithms: Yeah.
George Pillari: turbocharge your resume by running it through some AIs first and giving yourself a better chance. So it's a lot of fun putting it together and a lot of fun talking about it for the last month or two 'cause people are really interested in the topic.
Pete Vera, Exit Algorithms: Yeah, absolutely. awesome. I I love your your story and your journey and we'll talk a little bit more in depth, I think, at the end about AI. yeah, w why don't we start off with a little more, you know, on your your career. When you you sold did you you exited a number of your own companies first, is that right?
George Pillari: Yes. Yes. And you know, somebody very, very wise when I was young, gentleman, you know, much more senior, said to me, Never go in unless you know how you're getting out. All right. meaning think about your exit before you even start the company. All right. which is good advice because she might build the coolest thing in the world. It might be a great product, customers might love it, but it might not be a company anybody wants to buy. so I thought that was interesting. Because you can't do that at the last minute. You gotta think about your exits early in the way you design things, the systems you choose, you know, things like that. You know, if you could, you know, get get a company on a unified ERP system, for example, even if an even if a a company that's acquiring you has a different ERP system, it's much easier. Right, to migrate from a stable ER ERP to another stable ERP. many times you might build a company through a bunch of small acquisitions. I was in a company once that had 31 different payroll systems. And you know, and that's a mess, right? That's very that's that's a real turnoff for a buyer. You know, when all that stuff's on one platform, you're using Oracle or something to run your payroll or everything's running through ADP. People look at that and go, that'll be easy. You know, it's not it's not marking down your price because you thought through it. You thought through what's gonna make my what's gonna make my company attractive to a buyer. And that's something I think senior executives and owners have to think about all the time. Not just my customers, right? You know, who's who's gonna be the eventual owner of this thing? And how do I have to contour the business, my contracts with customers, how do I make things so that it's it's easy. Right for a buyer. Don't put up any roadblocks and red flags.
Pete Vera, Exit Algorithms: Definitely. Yeah, that's that's great advice. you know, and and yeah, you can identify a a popular like you said, ERP system. That's a great example. and you can make your model your business after what, you know, what they you think they would wanna see, make it easier to integrate, right?
George Pillari: Yeah, it's actually better. Even if even if you take a small hit to your revenues and your profitability for a year to go through the pain of something like that, it's definitely worth it when you're thinking about an exit two, three, five years down the road. You know, if you're gonna look to sell in the next twelve months, don't waste your time doing that stuff. But you know, if you're forming a business or you're looking at a three five year horizon, things like that really need some thought. And I think that's kind of what, you know, what Part of what you do is, right? You help people think through these things. But you really, it's hard because you're you're taking money out of your own pocket today, right? If you're the owner, making these investments, hoping you get a return on it down the road. And you definitely will. The more you can make your business look like the acquire oars business, the easier it is for somebody to acquire you.
Pete Vera, Exit Algorithms: Yeah. definitely. Makes sense. You were you given that advice before you exited or or were maybe there's some some bumps in the road? Yeah.
George Pillari: that one that one hit me. Yeah, that one that one I I found out on my own from talking to buyers. my first company was kind of in a, you know, a modestly frothy sector at the time. It was kind of a new, you know, the healthcare information technology world was just growing up. There were clearly some big guys in the space and I was one of the little and medium sized guys. And You know, you realize what people were looking for. At the time, they really wanted recurring revenue. Okay, they wanted to see people under contract for three years, things like that. They would take lower revenue if it was, you know, mostly recurring, so that there was a level of predictability in the business. I think that's probably still true today with anybody to the extent you're you know, you can overcome your customer churn or however you want to do it, you know, you can say, hey, you know, 87% of my revenue is going to recur next year. you could you have a much lower risk enterprise.
Pete Vera, Exit Algorithms: Yeah, definitely. Yeah, I think a a lot of it comes down to, you know, reducing the perceived risk,
George Pillari: reduce the the procedure growth.
Pete Vera, Exit Algorithms: right, in the eye of the of the buyer.
George Pillari: 100%. That's that's pretty much the most important thing. You know, whether it's key personnel, systems, exposure to one customer. You know, the big customer is great when you're getting going, right? You you have a party, but when somebody looks at your business and you have 40% of your revenues with one customer, they're really not they don't want to have a conversation with you anymore. They wanna go meet the customer and make sure the customer's gonna stay locked in through an ownership change.
Pete Vera, Exit Algorithms: Yeah, exactly. Yeah, and and a number of your organizations also have been on the acquiring side as well. Is that is that right?
George Pillari: yeah, I I've I've been involved in you know several dozen acquisitions, big and small. And acquisitions are tough, you know, they're they're hard to do, time consuming, and everybody wants to point fingers when it doesn't work. You know, so
Pete Vera, Exit Algorithms: Right.
George Pillari: you really have to, I mean, the term you hear is spring loading, which is before you do the deal, you know, you really have to understand all the things you're gonna change. you know, so that the day the thing closes, your hundred-day plan starts. All right. There there's some ways where spring loading isn't quite legal. I'm using a a term loosely, but with public companies, if you do certain things before the acquisition and they call it spring loading, where you're you're making certain changes to the business so that it's better for the new owner, but it it hurts the current shareholders. But the concept is valid. You really want to make sure. you you know, you're you're way out ahead of things. And when the thing closes, that's just one of the milestones. You know, like that day you might want to do your RIF if you're gonna let go of 50 or 100 people. You want to do it the day you close. No need to wait around
Pete Vera, Exit Algorithms: Mm.
George Pillari: for a month. You should have that all thought through, you know, before you sign transfer funds.
Pete Vera, Exit Algorithms: Right. Yeah. And and from a buyer's perspective, what were some of the the main things, maybe top three things that you would that you know you look for in a in a acquisition target?
George Pillari: Well, from a a risk standpoint, right, it's always the integrity of the financials. Okay, so I'm sure you're familiar with the term quality of earnings, where you know it's really important to understand, okay, you made a million dollars last year, but I see it half of that came from one customer, and that customer is now liquidated in bankruptcy. You know, so you don't you don't have a starting point of a million dollars. So really understanding that that Q of E is a big deal, all right, as a seller. And you should periodically really do that with your board or with any advisors you have. Do a little poor man's version of it. You know, take take you a half hour, you know, to sit down and figure out, you know, what's goosing up your earnings or what's depressing them. so that you can get a real good look at it. The second thing is always the people. All right. If you could do acquisitions, not have any people involved, they'd be really easy. But you know, everybody always acts in their in their self-interest. All right. You have to just remember that. I don't care what they say, or they're doing this for their shareholders and for this. Everybody acts in their own self-interest. and You know, you're always gonna have fights over somebody's employment contract, or some bonus they say they're owed, all that kind of stuff. So it's you if you can't cut through the social issues early in a in a diligence, I would cut and run from the deal. All right. I wouldn't force that unless you're gonna fire everybody. If you're gonna clean house and you have you're confident you can do that, great. But if you're bumping into social issues early and they and they just feel off, that that's a that's a signal to just walk away. I guess the third thing as a buyer is something in the regulatory world. All right, there's always something that's overlooked. I'll give you an example, and this is where you have to get creative and and you have to kind of look for a problem. Right. You want to find it before you spend the money for the acquisition, right? So I think here's an example. There was a company that did remote monitoring of operating rooms, right? They put equipment in the operating room, and then a doctor sat in a reading room, you know, off-site someplace in an office and could monitor what was going on during the operation. Great. Low it improved costs, it improved quality, it was a great model. Then what happened is the payers like Medicare and Aetna and people like that said, wait a minute, one doctor, one read. Because what they were doing was they would have one doctor with three or four screens up at once, all
Pete Vera, Exit Algorithms: Mm.
George Pillari: right, three or four operations going on, and the doctor could bill for four cases. You know, the company could build four cases at once and insurance shot that down. It blew apart the business model. All right. And
Pete Vera, Exit Algorithms: wow.
George Pillari: the company, you know, had to get wrapped up and sold. So always look for when they have kind of a magic bullet. it's probably not a magic bullet. You know, and you really need to, you know, deconstruct some of those things and and run some worst case scenarios. Otherwise you're just gonna fool yourself and waste a lot of money and maybe ruin your career.
Pete Vera, Exit Algorithms: Yeah, definitely. Yeah, and so and someone trying to
George Pillari: Yeah, thanks so much.
Pete Vera, Exit Algorithms: sell their business, you know, on that token be very transparent and, you know, demonstrate clearly to the to the perspective buyer, right?
George Pillari: You y you said something, a big word there, transparent, right? So if you disclose things and you're transparent about everything early on in diligence, you build trust, right? Even if even if it's a bad fact, right? It you're you're building trust with the buyer. If the buyer has to discover it or it was public information and they discovered, you didn't tell them, you know, you're cooked. There's never gonna be a level of trust there. so you might have already you might have killed your own deal by thinking you're if I don't tell them about something, it's gonna help me. That's just they're gonna find out.
Pete Vera, Exit Algorithms: Yeah. great, great advice. Yeah. And I'd love to talk a little bit about your your turn turnaround experience working with distressed companies. maybe, yeah, and and you talked a a lot about it in your book, Seven Deadly Stupidities. what are maybe some some through lines or some some of the major the highlights that the business owners listening could apply today?
George Pillari: I think the the common threat I saw in almost every distress situation is a vision that people won't give up on. Okay. So you have management, rightfully so, shooting for the stars, right? They want that equity to be worth a lot of money. but look, you got a lot of debt as well. You gotta make sure you you're running a company responsibly so you can. Pay your debt service and keep things intact while you're shooting for the moon. And in almost every case, there was just millions of dollars wasted on initiatives that never panned out. And that's okay, that happens to every company. But when you have these kind of bet the farm initiatives and they don't pan out, well, you bet the farm. then you gotta you gotta face those consequences. So I've seen a lot where people, you know, they they they say, well, you know, we're gonna enter the long distance we're we're gonna enter the telephone market with a handheld device. Well okay well isn't there Android and iPhone and things like that and Samsung companies I've heard of and they go all we all we have to do is get point one percent of the market And we're gonna be a hundred million dollar company. You know, so they have all the model all laid out and and how many per month they're gonna ramp up. And it you're not gonna get it, right? It's just you know, I'm giving you an example here, but that's like the kind of things that people build into business models to try to impress their boards. and you know, the other thing is there are some managers and some owners, owners especially, that work for the equity. Right. They want that equity value. But I could tell you right now, 99% of all the other executives, all they care about is their base pay and their annual bonus. Right. When I call it the great American bonus protection scheme, right? Where managers are shuffling around, producing charts and tables. here are my goals for next year that I should be paid on. You know, some of these things are ridiculous. Right, ridiculously easy. And all they care about is making that annual bonus. They don't care about
Pete Vera, Exit Algorithms: Mm.
George Pillari: the value of their equity. That has to change. You know, I think part of the problem has been COVID has given a lot of power to the worker. You know, you you can't you can't get a management team to live in one city anymore. It's impossible. Yeah. I mean, companies I'm working at now, people are all over the country in both of them. Not even two in the same state. So, you know, so the worker has the upper hand now, can demand more pay, demand better bonuses, but at some point we'll get back to people that really want to be entrepreneurs and really build something. And you know, take modest pay, reasonable pay, and and build the equity. You know, don't worry
Pete Vera, Exit Algorithms: Mm.
George Pillari: about your annual bonus. You're gonna make a lot of money when your equity goes over the top. we need more, we need more of that. I think that's why you see so many kind of ghost zombie companies out there now, where they had a lot of investment put into them. But you know, nobody's fired up about building underlying value. They care about, hey, I'm gonna make my bonus this year. It's a bad it's
Pete Vera, Exit Algorithms: Mm.
George Pillari: a sad state of affairs, I think.
Pete Vera, Exit Algorithms: Yeah. yeah, and it where do you see companies go wrong, you know, when they're like what's the what's caught you think that's the main cause for them to the culture and and and things like that that contribute to the decline?
George Pillari: That that's a big pillar. The second pillar is boards are just lazy. Okay. Boards don't do anything anymore. All right. they, you know, I was I was looking at a company where the board members were were making like two, three hundred thousand bucks a year, all right, for half dozen meetings. And I said, You guys gotta make some changes to this company. You gotta do this. You got nobody wanted to rock the boat. Okay. Okay. Nobody wanted to like step in and say, hey, wait a minute, I'm gonna pound the table on this. So that's everywhere. You don't have boards, boards don't have spines anymore. And you know, I once wrote an editorial about this, like an op-ed piece, I'm sorry, about this. When I was at Alvarez in Marcel, you know, which is pretty much, you know, the the top turnaround firm in the world. I do this stuff on my own now. You know, I but I I'd spent a dozen years at Alvarez in Marseille and they wouldn't let me publish it. They said, no, you're gonna alienate too many of our relationships. Okay. So, but it's true. Boards, boards, it's ceremonial. I tell friends of mine, I said, Don't go on any boards. They're like, Why? I go, well, why are you going on the board? You want to go tell your friends at a cocktail party you're on some board. So you're going to get sued. All right. When the company creators and things go wrong, they're going to go after the board members. They're going to they're going to ask you, why did you approve this bonus? Why did you approve this business plan? You're not even paying attention in these meetings. You're going to get wiped out. So don't go on a board unless you're going to be really active, is what I tell people who ask me. And I follow that advice. So that's you have those twin forces of evil, if you ask me. you know, the greed factor of I want my bonus and the greed factor of I'm a board member, I'm really cool, I'm getting paid and I'm not gonna I'm not gonna ruin this gig.
Pete Vera, Exit Algorithms: Interesting. I love it. yeah, let's talk a bit about technology. you know, you've seen a a number of disruptive technologies, innovations in in your business career. how does AI compare to some of the other ones you lived through?
George Pillari: AI is you know, magnitudes more powerful than the examples I like to use, which I wrote about, or the dawn of the internet,
Pete Vera, Exit Algorithms: Mm-hmm.
George Pillari: the Excel, and smartphones, right? Those are like the three biggest changes we've seen, right, in in most of our lifetimes. And you know, AI is faster, faster adoption and more widespread. If you if you look at things going all the way back, the examples you hear are like radio, right? Radio was the death of distance, right? Now you can listen to somebody from a thousand miles away, right? That took a certain number of decades to ramp up where people had radios, television, you know, a little faster. All right, internet way faster, smartphones faster, you know, AI is pretty much everywhere now in like two years or something. Right, be when it was made mainstream. You know, and there's some good I forgot, I I gotta find the quote, but what what a gentleman said, a commentator of of some import, he said, it's all we talk about, you know, when when the topic of AI came up. That's all everybody talks about. And it's kind of true. so I think it's I think it's a powerful technology. The example I like to use is You know, who wouldn't want to have all the world's knowledge in the palm of their hand? Right? It's it's really a powerful tool. and it's much different than search. I have a chapter in the book about that. Explain how it's different from search, different from a chatbot. you know, real a real a real AI is a powerful tool and it has to be used correctly. you could you can immediately see the danger. The terminology in the industry is human in the loop, human on the loop, or human out of the loop, right? Which is really we're going to hear about these terms for a long time, all right? And human in the loop is what it sounds like. Okay, a human is using the AI to assist with the task. Maybe the AI is proofreading or editing or something, but the human is responsible and hits send, right? human on the loop. Is kind of like the autopilot on a plane, right? Where the AI is taking over and doing everything, and the human monitors and intervenes when there's an issue.
Pete Vera, Exit Algorithms: Mm.
George Pillari: Okay, that's kind of where most AI is moving right now. Then you have human out of the loop, which is fully autonomous. Fully autonomous car, right? It's a big jump to go to human out the loop. It's not linear. It's it's a really big jump to go from human on the loop to human. To human out of the loop. And that's why, you know, autonomous cars have been around a long time. Really long time, right? Decades. It's slow though. It's slow to you don't see them everywhere just yet. Now it's starting to pick up some speed, but it's really hard. It's really hard because those cars have to be trained on every conceivable scenario. Was that a deer
Pete Vera, Exit Algorithms: Mm.
George Pillari: that ran in front of the car? Was that an elk? You know? You think you know W was that a a child or was that a big dog? You know, it's there's just so many things that the AI has to learn, which is why that one's so slow, as far as adoption goes. So in in no
Pete Vera, Exit Algorithms: Interesting.
George Pillari: time, you know, it's gonna be high school requirement, right? a course in AI, if it's not already in a lot of places. It'll replace having to learn French or German or something, you know, learn, learn, you know, become fluent. you know, in AI. It's not that hard. Okay.
Pete Vera, Exit Algorithms: Yeah.
George Pillari: It's not that hard to become a good fluent user. you just have to not be afraid of it.
Pete Vera, Exit Algorithms: Yeah. fascinating. yeah, I'd love if you could share a bit with us some maybe some key takeaways from from your latest book, No No Adult Left Behind. and yeah, and then maybe some s some advice on the proper use of AI for for business owners.
George Pillari: Right. Now you don't you don't have to become an expert, is what I what I want to make sure people understand. And you should spend twenty dollars a month for a premium subscription to, you know, Claude or Clod co-work is fantastic for a business owner. they really should take some time and learn it. you can organize your whole life in there. and it goes in and reads your emails for you. It it'll go in anywhere you want to send it, it'll help you do things. I'll give you a great example that what's the worst thing all of us what we all dread doing as business people is your expenses. I don't know one person who enjoys doing their expenses, okay? And it's getting a little easier with things like ramp and some of these other technologies where everything is on, but you still gotta do it. And you still have a lot of emails that have receipts in them. So I wrote a little agent. And every Friday morning it scans my email and anything that says American Airlines or Uber or anything like that, it pulls it, creates, you know, a file and it puts it all in one folder for me. All right. So when I do my expenses, I just click and I just pull them all out of there and attach them. Simple thing, but I took the pain away from something that, you know, maybe took me a half an hour, a week or an hour, but I hated doing it. I just hated scanning through emails or where's my Southwest receipt from two weeks ago? Who wants to do that? You know? So, you know, that would be a use, but I think what people have to do is play with it. and the example I like to use is get on the AI and feed it your LinkedIn profile. Right. And say, hey, what do you think of my LinkedIn profile? tell me what you know what level of my career do you think I'm at? What does this reflect about me? Ask it some hard questions. You might be stunned at what comes back. Because I got news for people. If you're not keeping your LinkedIn up to date, you don't really exist anymore. Okay. Even
Pete Vera, Exit Algorithms: Mm-hmm.
George Pillari: though LinkedIn's got kind of spammy and all that, if your LinkedIn profile isn't up to date, you're you're you're you're roadkill. Okay, because that's where everybody goes right away. All right. so people need to do that. So play with it with something you know, like your LinkedIn profile or your resume, something that you can work on, like you're dealing with a colleague. I like to say the AI is like having a friendly professor to ask questions and and push things back and forth. So let it let it run through your life, let it run through your your LinkedIn. And say, hey, what else should be in here? It'll it'll tell you things like, hey, you seem to be very accomplished in this field. Do you have any awards? Have you done any speaking engagement that should be on here? It'll it'll it'll think of things that you took for granted. I know I did. I know I have a whole bunch of stuff. I never even listed them, and I'm like, boy, you know, this was eye-opening for me. So, because a lot of consultants I work with, they have a log of like everything they've ever done every day of their lives. And I never did that. but conversing
Pete Vera, Exit Algorithms: Mm.
George Pillari: with the AI really helped me shape how I present myself on paper and in person. so I would I would start there and then as a business owner, I would probably throw it into the competitor analysis. I would say, you
Pete Vera, Exit Algorithms: Mm.
George Pillari: know, here's my company. and don't tell it who the competitors are. You know, I'm in this industry, right? We make tires or whatever we do. And identify my competitors both geographically and by product and create a matrix. Give me a table that shows me how I stack up, how my company stacks up against these guys. Where am I where am I better? And so on. My pricing. And then the AI will give you all the dimensions: pricing, product mix, all that. They'll do all that for you. Then you have a draft of something, and you can push that back and forth for 15 minutes with the AI. I I made a a visual last night of a very difficult thing to explain. it was you know, I was trying to explain it to my wife and she kept shaking her head. So I I sat down and made the graphic, but I it took four or five iterations to get the graphic the way I wanted it. And then she looked at it and said, I get it. You know, so
Pete Vera, Exit Algorithms: Mm.
George Pillari: i if you you think about it, it's a conversation. It's it's not like search where you type in a word and you get a list of stuff. No, it's it's it's a it's a knowledgeable, friendly professor that can help you and give you and give you objective advice. It's you know,
Pete Vera, Exit Algorithms: Mm-hmm.
George Pillari: AI AI is probably wouldn't be bad board members, you know, you know, properly chaperoned, because they're they're not gonna
Pete Vera, Exit Algorithms: Yeah.
George Pillari: fall for some some garbage management puts out. They're gonna go, your competitors in three markets are doing that already. Why is that a why are you putting a million dollars into that project? So I would I would do that. I would start out with the competitor analysis and don't guide it too much, but give it a good healthy prompt. That's very important. Give
Pete Vera, Exit Algorithms: Mm.
George Pillari: it a you know, write a paragraph. You know, my business is five years old, I'm in this space, you know, I'm trying to do X, Y, and Z. who are my competitors? You know, who who's selling substitute type products to what I do? you know, should I be competing on price, service? You know, where where is my best path? And then let it let and run through your resume or your bio or your LinkedIn. That's stuff that's close to home and it'll make you feel like you know what you're talking about.
Pete Vera, Exit Algorithms: Yeah. awesome. Great, great advice, George. Man, I l I love this conversation. I got one last question for you. I and I know you touched on it quite a bit earlier, but if you could leave listeners with one practical tip that would move the needle the no the most for small business owners prepping for a successful exit, what would that be?
George Pillari: I think if you're prepping for an exit in today's world, you must have an AI strategy. All right. Even if it's small, even if because the first thing a buyer is going to do is to say, where's AI in your company? Like, what are you doing with AI? And even if you have a marketing team that is constantly updating competitor analysis, to use my example, that's useful. It shows that you're progressive. All right. Think about if you're selling your company, it's like a job interview. You're being interviewed, right? Your company's being evaluated. And if you're not modern and you're not current with what's going on, you know, that says something. It it it pushes your price down, is what it does. So I would say have some kind of AI strategy, even if it's small, and you could say we're our A straight strat AI strategy starting here. And we plan to expand here. It doesn't have to be grand, right? But you must have AI running somewhere in your company.
Pete Vera, Exit Algorithms: Yeah, you give some great advice, sir. Thank you so much for your time today. where's the best place listeners can find you,
George Pillari: Ways listers can find
Pete Vera, Exit Algorithms: your your blogs, business, and and your book?
George Pillari: Sure. I I publish weekly. you can you can sign up for by email for the thecautionary.com. Okay, thecautionary.com. And on there is also information about my books. and you can just you can search my name and find me if you want to find my personal website. It's running fox partners. But the the cautionary is where all the material and content is and my my bio and background and all that kind of stuff's on my running fox website. So hope that helps.
Pete Vera, Exit Algorithms: Great. I'll leave that in the in the show notes. It'll be easy to find ya.
George Pillari: Yeah.
Pete Vera, Exit Algorithms: thank you, George. Love this conversation. It was great talking to you.
George Pillari: All right. Thank you, Pete.
