00:39:36 · Ramsey Sahyoun
[00:39:36] S1: I think with a founder who has already had a big liquidity event, there are things you can do on incentives, of course, like rollover equity helps. And we have a long term incentive plan that I'll talk about a little bit. And and and that... Those those things help. But I think with founders, there needs to be some intrinsic, more qualitative level of motivation. Like, they gotta feel connected to the company. They gotta feel empowered. They gotta I think with a founder, think it's a lot more qualitative. And then I think with a hired manager that hasn't had a big liquidity event, like, they could be more motivated with incentives. I think that would be kind of like my overarching learning. As far as like how we incentivize people that lead our individual businesses, we have incentive plan. I won't get into the specifics, but we call it the Multiplier's Club. It's all about, you know, doubling the earnings of a business within a five year period. And then there's it's rolling, so obviously you could do more than double a business after that. But it's entirely within the control of the operator, and I think that's really an important aspect. Like, it's not at the holdco level. It's it's focused on the individual business that that CEO is running. Yeah. So I I think that's another important thing is to just make it, you know, and you need to have incentives that people can actually affect the outcomes on. Like, it doesn't make sense to, you know, judge or incentivize someone based on, you know, what acquisitions we're doing. And it doesn't make sense to, like, incentivize someone that's running a MSP in, you know, Washington DC with, you know, based on how much M and A we do in the ERP consulting space. Like, doesn't make sense. So I think tying it to something that the operator can really have control over is critical.
00:41:54 · Mikk
[00:41:54] S0: Now again, when it comes to all the data you've seen and if we take the acquisitions, which are so called best performing, and maybe we take the ones which haven't been as you expected. So obviously, there isn't like a red line between there. It's about those small things. But what would you bring out when it comes to the ones which did very well and the ones where maybe you made a mistake with this certain acquisition, specific acquisition.
00:42:26 · Ramsey Sahyoun
[00:42:26] S1: I think there are things that are... You know, we do these postmortem analyses of... And we do have a lot... You know, we have over a 100 data point, you know, a 160 data points now on on acquisitions. So, I I think maybe a few things that that we've learned through those. Customer concentration, you know, that that is a that is a thing that people pay attention to, like how much of your revenue is concentrated in one customer or five customers. That's a risk that people pay attention to for a reason. Like, that we... We've... It... It's it's pretty clear that, like, businesses with high customer concentration tend to underperform businesses with lower customer... With a more diversified customer base. I think we have actually found another counterintuitive, maybe counterintuitive thing we found is that our businesses that have generally lower profit margins when we buy them, we're able to grow those businesses more more quickly and expand margins, and I think that sometimes businesses are highly optimized before they're sold to you. And that can be tough because you don't get an opportunity to optimize those businesses, and you're having to invest a lot, in some cases, just to stabilize the business. So, yeah, we we've been focusing a lot on companies where there's been real investment in the team and growing the business, and maybe that's translated to lower profit margins. But we can benefit from that in the future by not having to hire as much when we grow... When we add new customers. So I think those those are a couple of things that are kinda top of mind for us right right now. We just... Our most recent postmortem analysis was just sent around, and those were a couple of the takeaways.
00:44:22 · Mikk
[00:44:22] S0: Did you ever expect to grow this thing so large in in short ten years? Was it like a plan, or you just did your work, gave your best, learned from each other, learned from Alpine, and just went went doing this day by day? Or how has it been?
00:44:38 · Ramsey Sahyoun
[00:44:38] S1: Yeah. No. No. It was definitely a plan. Like, we set big, hairy, audacious goals. The first one that we set before we owned any companies was to get to $100,000,000 of EBITDA by 2023. And we did that. And, you know, we're going after our next BHAG right now. So thing Alpine instilled in us is these BHAGs. So look out, you know, five or ten years and set a big, hairy, audacious goal. It might feel impossible or far out, but then work back, like take the... The important thing after that is not just to have the goal, it's to backwards plan from the goal like, okay, you know, if we wanna get to 100,000,000 of EBITDA by 2023, and we assume a 10% organic growth rate, like how many companies do we need to acquire each year? Like what does that acquisition waterfall look like? Okay, next step, how many companies do I need to talk to to buy one? And so you really got to go through that backwards planning exercise. I think a lot of people throw out a big hairy audacious goal. And maybe they continue to talk about it, but they don't kinda get into, like, okay, like, what are the inputs that I need to get there? So I think we're pretty, like, methodical about that. And I think that's been a big key to our success is, you know, we put these these big goals on on the page, but then we, like, hold ourselves accountable to achieving a goal this quarter that we think will, you know, contribute to that outcome occurring in seven years. Like, so I think that's just been an important thing. I know some people are, you know, take a more approach of like, just take it day by day. And I get that, and you want to be nimble and adaptable and everything. But I do think the goal setting and being very systematic about that has has allowed us to get to this point without it being like that surprising that we're here.
00:47:05 · Mikk, Ramsey Sahyoun
[00:47:05] S0: How much time have you actually spent on putting together the systematic plan? And the... It was just like, yeah. [00:47:15] S1: Yeah. A lot of time. That's actually a good question. A lot of time. We spend a lot of time working on the business. So every quarter, and is another thing we learn from Alpine. So so we we have a one page plan and that one page plan has our, you know, on the left hand side of the page, it's got our vision and values, and then it's got like your five year goals on another column, your one year goals and your quarterly goals. And so we kind of run the business on that one page plan. And then every quarter we're getting the holding company team together to, you know... It it... It's a little bit different every time, but we call them renewals. So basically, we we look back at the quarter, what went well, what didn't go well, where are we tracking, where are we not tracking, what do we need to change. Yeah. And so like, I mean, it's kind of, I think it's kind of extreme to take the whole company for a couple days a quarter to just work on the business. Like, basically, you know, taking time away from the day job to to go work on improving the business and goal setting and things like that. So we we spend, I think, kind of now that I think about it, we spend an outsized amount of time on that. And I think that's that's served us.