Chase Murdoch welcome to acquiring minds well thanks for having me man it's good to be here chase you are the co-owner of a hold Co in Salt Lake City called Dakota group Dakota includes one business that you started from scratch and four others that you've acquired over just the last two years I believe there are many unique and interesting angles to Dakota and we're going to get to all of them but before we do that let's hear about your own personal history Chase please sure well um yeah like I said great to be here will um so my background has been in entrepreneurship ever since um my early 20s I have been an entrepreneur in the zero to one space so creating companies um primarily pursuing venture-backed ideas pursuing pursuing Big Ideas moonshot Ventures um and contrary to the space that Dakota is in today going from one to two or one to ten um I got the first 10 15 years of my career start in the zero to one business so starting companies from scratch building a startup team trying to find product Market fit raising capital and one of the things that I found as I was doing that is it was really fulfilling to me as an entrepreneur in the sense that I love building and assembling teams I love going after Big Ideas I love working alongside smart people um one of the things that I wasn't feeling um an itch being scratched was this desire to build something long lasting this desire to build something sustainable and I felt like every project I was pursuing the goal was to go on a one to five year Sprint a quick trade-off where I would trade off um you know Comfort um a casual day-to-day work-life balance for an outcome of shooting for the moon you know trying to build the next Twitter for example and while it's fulfilling and while it's a bold Endeavor and while I respect the entrepreneurs who who have built their entire careers doing that it left me feeling like um almost like it was the arrival fallacy like I was I was you know wanting to get to an outcome and build something temporary in order to exit in order to sell um in order to kind of get to some some quick Middle Ground exit and I'm sure we'll get into it as we go but Dakota group is kind of the the antithesis of that it was kind of the solution to that issue of um not only did we switch leaving the zero to one game to go play in the one to two game um but it was how do we build something uh long lasting ideally with a multi-decade strategy hence the name Dakota group where we can build something sustainable and so my start first 10 15 years was pursuing various entrepreneurial projects some successful some completely flopping and a lot in between and that's I've always been an entrepreneur and you are as I said now in Salt Lake were were those years of your career also in and around Salt Lake or did you do a stint in the Bay Area I I seem to recall you were also in Asia for for a Time yeah so I've been out in Utah for somewhere between 15 and 20 years so Utah's now home um I got my start and where the entrepreneurial bug first bit was when I was relocated out to the Philippines by a company I was working for this was right out of high school it was a unique experience for for me for being so young a company willing to relocate me go out to the Philippines and oversee a team of project managers in the market research space and uh that was where my first entrepreneurial project began is I was out there working and I was traveling frequently because when you're in the Philippines you're an 80 flight from so many cities in Southeast Asia from Hong Kong to Vietnam and everywhere in between and it was where I actually picked up my first custom tailored suit out in the Far East and I had it made overnight it was eighty dollars and it was falling apart on the plane ride home but it fit me perfectly and I I kind of just remember that moment of saying this is an interesting product we don't have this in the states the supply chain is obviously a mixed bag some of the suits I ended up accumulating a half dozen custom suits during my time there and some were remarkable and really well made some were like I said falling apart on the plane ride home and uh I finished out my stint there relocated back to the States and fast forward about a year later that's where I started my first business importing custom suits so that was where my career got it started this was um probably 2009 2010. and uh ended up raising some Capital to go pursue this uh Venture and ended up growing it to a multi-state business and um yeah it was a really fun Journey so I've been in Utah 15 years um and spent a little less than a year out in the Philippines at the very beginning of my career that's that's a really exciting I'm sure it was quite quite an adventure so let's get to the first business that you that is part of the Takata portfolio Taylor cooperative or custom suits and how you decide give us kind of the decision point where you and your partner decided to do that in leave zero to one behind what was the kind of the Moment Of crystallization yeah so the uh the story goes back to Southern Utah we were out hiking together um I had just uh exited a tech startup uh he was kind of in between projects as well and Adam my partner in Dakota group he and I were really close friends and a part of it was trying to figure out what we were going to do next and um I I was at this inflection point in my career feeling some of these emotions we're talking about of do I want to continue pursuing zero to one primarily Tech enabled startups or do I want to go make a career pivot and he was in a very similar position it was a grueling multi-day uh hike that we took in southern Utah and Capitol Reef National Park and we went down with no intentions of starting a business we uh we came back up though with the very beginnings of a business plan to go start naively this idea of a small business that we would start with a limited amount of capital we would hire a general manager very early on and the vision wasn't to go build a multi- small business holding company we weren't even thinking along those lines the goal was if we could start something small on the side that was Cash generative provided a little bit of an income on a side to me and Adam it would allow us to have the fuel to go continue to pursue moonshot ideas so we hadn't even fully made it full circle to we want to build small businesses it was simply we see an idea of creating a lifestyle business and we'll go figure it out from there let's let's get something profitable let's optimized for building a really great product it doesn't need to have a large Tam it doesn't need to have a large moonshot opportunity in front of it let's just create something small something we're proud to have in the community and something that financially can be a really good vehicle vehicle in our lives and then we can continue to pursue entrepreneurial projects we ended up starting a business not a month after that hike we went from like idea to our first dollar of Revenue in 30 days uh ended up filing to create the entity and started it on about 750 and at the time very naive Ambitions 18 months later we were doing about a million bucks a year top line so we were able to very quickly grow this to this business for some really great Partnerships in the supply chain and we ended up signing a lease agreement on some space for a brick and mortar luxury suit shop in Salt Lake City and I kind of liken the process of building a small business kind of like uh what what I would imagine a sculptor goes through when they're kind of shaping a bust when they're like the first steps of creating this sculpture is you're hacking at the clay and you're just trying to create the the semblance of a head and that was us in year one it was just we were we were just trying to build a great product and we were making broad brush changes and trying to build something that really worked and what we found is year two got easier and a little bit better and year three even easier and better better product better team and it kind of like the way you might sculpt a bust of year one chopping at it and then year two it's like you're pulling out the knife and you're shaping the ears and you're shaping the chin and then you pull out the scalpel and you're starting to really shape it and that's what it felt like building this business was and it was it was very different from what what I had built in my career previously which was raise a boatload of capital burn through it as quickly as you can to go get to the next tranche or the next fundraising Milestone and build aggressively this felt very different it felt iterative it felt sustainable it felt like we were making a lot of small incremental changes as opposed to a lot of big transformative changes and it led to the creation of a really really great team uh folks who stayed with us even to this day who have been with us for years and years it led to a really great product and it was a really fun format of company building and that led that company was effectively Taylor Cooperative uh which is our first operating company in our holding company so it's a luxury custom Clothier brick and mortar in downtown Salt Lake City um and a really beautiful business it's a great business model it's a really really fun product and we didn't know this at the time but it was essentially our unfair advantage that allowed us to start acquiring companies and led to the idea of becoming a multi-company holding company but at the time the naive ambition was let's keep it as a sideshow and we can go pursue other ideas eventually as the years went on we fell in love not just with that business but we fell in love with the idea of small business and what um you know what kind of a role a small business actually plays in a community and and we started to begin to have these thoughts of well what is a community what is a City without small business and you know why have I spent the first time or 15 years of my career not even thinking about Main Street small businesses thinking about you know really large moonshot technology Ventures and is this potentially where I want to spend the next chapter of my career building companies like Taylor Cooperative so that was the Genesis of it all and that's how that's how Taylor Cooperative came to be and Chase when when you guys are thinking okay we're going to start a small business and it's going to throw off enough cash to enable us to experiment and go and do the next moonshot that still belied a lot of confidence on your part that you could just spin up a small business that would generate you know a healthy amount of cash and sure it's not quite you know the chances of success of doing a small business like that are a lot better than one in a thousand of of doing a moonshot unicorn that is successful but you know all business uh there's a lot of risk to it and all you know the the whatever nine out of ten businesses fail I don't know if that's actually a you know that that's kind of the rule of thumb that you all hear who knows if it's actually true um but but there's a high failure rate in business so I'm just struck by how confident you guys were that you could just start a small business that would generate a few hundred thousand dollars a year you know Bing Bang Boom you know well yeah you were right you were right there two thoughts on that one um this was effectively a do-over of a business I had previously started 10 years before um right and so I had that advantage and the the the second thought I have is so while we had a lot of the product knowledge and a lot of the supply chain relationships and you know I had a very crisp understanding of how this business model Works um the second thought I have is we went into this completely differently and that we didn't raise a dollar of outside Capital we funded it initially with a 750 investment and that 750 dollars was enough to go get to our first sale and that first sale funded our second sale in those first two sales funds and and it was Cash generative from day one and and the ambition wasn't to go build something that was throwing off hundreds of thousands of dollars in free cash flow the ambition was if this if this provides it's two to five k a month to each of us um that that's that's a game changer because then if we're pursuing one of these moonshot ideas we could potentially cover some living expenses or help subsidize this next big idea so that if we were to go raise capital on that idea we could delay that date so it was again the way we were thinking about it is so different from how we're thinking about it today yeah um yeah it's a general idea of as you're building it doesn't look like a straight up into the right line but as you look back you can kind of see some of those dots and how they connect so at the time our Ambitions were really naive we simply wanted a small business that we were proud to have in the community that was throwing off some cash flow and ideally somewhat independent of our time and we were wrong on some of those ideas but we were right on some of them and that led to you know the creation of that business great thank you and when so once Taylor Cooperative started being successful and you really got a taste for small business in in businesses that that live amongst the community and serve the community what conclusion did you draw you asked yourself well why have I been working on these Moon shots and so overlooked this world what was your conclusion as to why that had been well you know I think I I started to see a shift in what I wanted out of my life I think um as the business coming back to that bad sculpting analogy I made earlier as we were pulling out that that fine scalpel and making those adjustments it was very fulfilling it's it's uh it's fun to Tinker on a business and to see changes you put in motion return a kind of positive result whether it's again team or product or anything related to them um and instead of wanting to go um be on the cover of You Know The Entrepreneur magazine or Fortune it was like I I really was valuing the work-life balance I was valuing the the team building component and I wanted to continue to do more of that so it was kind of a shift in what I personally wanted and I think Adam was going through the same thing um but there was this higher purpose that I was personally starting to feel as we were building it it was becoming something of we didn't use this term at the time but we used this a lot today when we talk about Dakota but Taylor Cooperative became more and more something of a Community Asset it was something where we were involved in community events the you know all the local Mayors got their suits from us it was we got to meet really interesting clientele we would advertise in local Publications we were a part of of Salt Lake and I I kind of wanted there to be more businesses like that not fewer and as I kind of got to know the business landscape the small business landscape there's a lot of stats that are alarming for where we sit today in 2023 small business is on the decline there are fewer small business small businesses today than there ever have been uh large Mega corporations like Amazon are making it more difficult to compete in the marketplace more difficult to recruit talent and if we fast forward this 20 to 30 years I don't like that world I don't like this vision of you know on the corner of Maine and Broadway in Salt Lake City will be an Amazon you know store right an Amazon pickup Locker um and so a part of like the early idea as well be before we were thinking about Dakota is it's intellectually stimulating to try to figure out how can we compete as a local Independent Business with some of these larger Mega corporations you know there's large brick and mortar retailers who sell uh suits how do we compete with that and and what is the role of local business in in our economy and so as we were continuing to to find success year over year throwing off more cash flow and and the product getting better net promoter scores through the roof we were trying to figure out Adam and I do we double down on this business you know we're throwing off cash flow do we reinvest every dollar back in this business and go open multiple locations over the United States do we sweep all the cash out and stay as a local business and just sweep every dollar of free cash flow out and maybe go buy a cabin neither of those answers felt right we were too young to to go by the cabinet it felt like you know small businesses are risky it's like will it be around in five years we wanted to ensure that it would be so it didn't make sense to not reinvest but to go reinvest every single Dollar in growing Taylor Cooperative didn't feel right either and this was around covet times and we had the opportunity to acquire a second business and that came knocking on our door before I had ever uttered the words holding company or before Adam and I had even thought about our kind of long-term vision and over the course of that year year and a half process of considering buying this business it led to a lot of reflection that ultimately led to Dakota group and one of the thoughts we were thinking about at the time was did the Playbook that's worked for us over these years at Taylor Cooperative in building this first business can that Playbook be applied to other small businesses and that's what we wanted to go figure out um and so those those were some of the thoughts going through our mind at the time I do want to return to your the kind of uh the your philosophical view of Amazon in every corner versus something local you know a locally owned business on every corner this is a this is a kind of tension that's been going going on since you know since for since forever since franchises were invented and then Walmart came along and then and for our generation it's now Amazon has been the story for the last 10 and 15 years but there's always some um monolith that seems to be gobbling up small business and has been for low these 70 years probably um and you know we we could indeed have a very philosophical conversation about this um and I and I think that and I'm going to tie this in now too to moonshot just your your personal Ambitions and your own career and how you envision it moonshot versus small businesses I think one of the reasons you correct me because I'm gonna put words in your mouth because it's kind of how I feel too the small businesses are things that are overlooked is because if you're ambitious you want to do something big and small businesses don't feel big I mean they have it's right there in the name small business right correct and so when I what I think you may have stumbled upon and and a lot of people in our space and particularly those of you uh building hold codes is a way to thread the needle to be involved in small businesses and keep the keep all of that that texture that we all love both as entrepreneurs and as the people who live in these communities we don't want everything to me being Donald Starbucks and Amazon um to to keep the texture of small business but still be able over the course of your 40-year career to do something big I.E a holtco and and so it seems like that that may have been this kind of the answer the the threading the needle of being able to do small business for a career but still do something big for your career it's you know what what are your thoughts there yeah I think you're on to something I've never really thought about it this way so I'm glad you're you're kind of teasing out this idea in in that way I think um well I'll share something more personal than I usually share in conversations like this um when I had my son who's 11 years old today um I was in my 20s and um went through a divorce during that process and co-parenting my son between my household and his mom's house and at the time that was when I was in the very beginning stages of um you know really looking up to these Coastal uh hubs as hubs of innovation and places to go build a career and kind of the only place to be if you wanted to build a company that would make a dent in the universe so to speak and I remember feeling really attracted to wanting to go relocate and go move out to the Bay a lot of my friends had done that and entrepreneurs that seemed really committed to building something big that seemed to be the only pathway is go move to New York or out to San Francisco and go pursue a big idea that's where the talent pool is that's where the capital is and of course that was off the table for me I was deeply committed to you know being near my son and what that meant is I was somewhat anchored to Utah I felt somewhat tied to Utah and in the very kind of early days of that what that meant is well I better make the most of it you can still build a great company in Utah there's great talent out here there's Capital um but also what that meant is if I'm going to retire here what that means is I kind of want to go create a better Utah I want to help shape creating a community where I want to live in it and how can we convince folks to move from the bay to Salt Lake over the next you know years and years and years and so coming back to your question um relocating out of Utah has kind of always been off the table but while I was seeing fulfillment and building something small and staying in Utah I was feeling this sensation where I missed the part of company building where you're recruiting really bright people and you're working on really hard problems I think that's one of the tempting and fun things about going into Tech is you can recruit really great people you're solving a really big mission and people will uproot their lives to come and work sometimes for below market rate for stock options to go try and attempt to build something big and building small business sometimes it feels very different from that you're not working with folks who um are trying to go make a dent in the universe you're working with folks who want a great work-life balance who want to take pride in their craft so it's a different orientation I felt like the pace the the rate of change was different in small business so while it was fulfilling I I sometimes wouldn't feel as intellectually stimulated to be honest and and I think that that was also a part of the Genesis we never vocalized that me and Adam but it was like I remember at a point we felt like we had created a Playbook and created infrastructure and systems that we felt like maybe were bigger than this one small business what if we went and we applied it to a second business what if we went and tried to create um a firm a holding company uh that had the structure in place that could go and help incubate preserve Steward multiple small businesses this was well before I had gotten onto Twitter and read the hundreds of tweets about the silver tsunami and the gap between all of these you know retiring baby boomer businesses and the number of buyers available I wasn't even thinking on that level I think what Adam and I were thinking was we were having the time of our lives building a really beautiful small business our work-life balance was great it was throwing off meaningful cash flow how do we keep this train going without just doubling down on this one business um and so that that's how I think about that it's a little Meandering to your question there but it's this culmination of all of these thoughts where small business needs to small business is critical to the fabric of a community small business is fulfilling to build um and yet we wanted to take on a bigger Challenge and and I think those were some of the early uh seeds that it that eventually sprouted as we started to form the cutter group and and to make sure that I I took the right thing away from that so doing a hold Co of small businesses scratches a different intellectual itch than doing a single small business because now you're you're you're you're seeing into multiple businesses multiple problems you're a capital allocator you can be adding and subtracting from the portfolio probably not subtracting in your case I know you're kind of a hold forever but you can be adding to the portfolio so there's all this interesting um there's all this interesting kind of intellectual stimulation that goes on right as well correct we sometimes refer to it as a craft in small business Mastery right is what does like what is an exceptional small business look like how do they recruit what is what do their financials look like what how does product development run when you're a team of 10 people and there's no head of product what does marketing look like for a small business and and I think one of the things we're trying to go develop over the next you know 10 20 30 years is what is small business Excellence like is there are there commonalities how do we help um create that because small business does have of a disadvantage at the at the same playing table of a larger Corporation but what are some things that we can bring to small business that give it that leg up they give it that unfair advantage and that craft which is very similar to the same craft that a craftsperson who's making a suit or a craftsperson who's making a hat you know in some of our current operating companies it feels similar to me you know we're not craftspeople there's no chisel we're not working with wood over here but it's it's this pursuit of how do we find Mastery and I don't think it's that ethereal white whale I don't think we're gonna find it next year it's this it's what is the proper way to build a small business sustainably over multiple decades even in this era of digitization even in this era of Amazon you know even in this era of fill in the blank what is small business Mastery look like and Dakota is almost a practice in how we go and and uncover them mm-hmm well I know that you are in regular touch with the folks over at chin Mark and that sounds a lot like the the kind of musings that come out of chenmark about just the the the game the iterative game of small business the you know the inches of progress that you make that compound over time so hopefully John you know really nice Financial outcomes but also the kind of artistry of of the entire project as well correct because yeah if you think about where we're at today skipping ahead a little bit you know five operating companies it's almost five experiments and if something works well in one company our job is to help surface that uh to our other operators who are running our other businesses and and see if we can cross-pollinate the things that are working obviously something that works in a construction company may not translate over to A Fine Arts Studio but sometimes they do and one of the things I've been struck by is despite having five businesses in five very different Industries there's a lot of common thread in between and so I'm sure we'll get into that as we go but I don't think I have this unique perspective I think or kenmark I think anyone who is in a seat similar to ours would have that similar takeaway of you're looking down on these operating companies that are facing very very similar challenges and you can start to pull a Common Thread in between those and learn some of those takeaways and so uh yeah it does feel similar to some of the things that I've heard Denmark talk about and I think it's pretty built into the holding company model well I'm interested to hear what some of these commonalities are I certainly you hear it said a lot that a particular style of business like a crew based business or Home Services businesses or even broader categories blue-collar businesses um have you know under the hood they all kind of really feel similar but but to hear you say it where there's a lot of similarities from across small businesses whereas in um to hear you say it given that takata's portfolio is so much more eclectic a word you you like to use uh is is interesting to me because like you said like you know small Art Studio to electrical service business like are there a lot of similarities it sounds like there are we'll get to that let's bring it back uh down from from Theory back to back to the story let's get back to it I'm sure we're going to get go back up into the clouds here in a minute but for the moment okay so can you give me any numbers around what Taylor um was doing in terms of sde that gave you the Comfort to go after this first acquisition and then and then we'll hear about that first acquisition what what did the business look like from in numbers yeah I'll say I'll say broadly hundreds of thousands a year stockpiling cash trying to figure out what to what to do with that Capital um so hundreds of thousands a year that we were trying to figure out what exactly to do from a capital allocation standpoint okay okay great um and and you said it's a Clothier is that is it so is it more than custom suits or is it pretty specifically custom suits for men yeah that's the majority of the businesses custom suits for uh individuals men women uh we actually have a very large presence in the androgynous kind of non-binary community um but yeah custom um shirts denim boots custom shoes so it's a full-fledged Clothier but primarily custom suits is where the bread and butter is for that business and do you believe that sounds like a very fashion forward business um and I don't think of Salt Lake is a super fashion forward place I live right outside DC also not known for its its fashion forwardness do you think that uh a a business like uh Taylor Cooperative can work in kind of any any Urban Market yeah I think the city needs to be of a certain size um and and while suit wearing is trending downward in society what we're finding is luxury suiting is benefiting from that because while people are buying fewer suits when they do want to buy a suit they want one of higher quality that's a little more experience focused so uh it's a it's a fun business because our net promoter score has kind of fluctuated in the 60s to 90s over the course of the past seven years it's a very fun product and a very fun experience you come in for a fitting a drink is poured a Clothier spends one-on-one for 90 minutes getting to know the background of the client understanding you know are they fashion forward and they want to design every detail themselves or are they simply coming because they want guidance so if I just landed a new job I want to make sure I look good please guide me through this process so we have a team of trained personal Clothiers who guide the client through that process so it's a very experience driven business which we like um and the primary product is is custom suits and you despite bite suit wearing being on the downward trajectory this business is growing organically really really healthy in double digit growth I think we grew 25 30 percent year on Year from 2022 to 2023. so it's a fun business and and yeah that's the primary product that's great there was a business like that here in DC uh that started in 2012-13 and similar thing they had a really great space that they outfitted just at Dupont Circle so a great location in DC and you went in and they poured you you know a great cocktail or uh and you know had a very kind of refined masculine uh Vibe with you know antlers hanging on the wall like a whole look yeah and just get it was as you said it was very much an experience um and it was the Talk of the Town for a while it they ultimately folded I don't know what happened they may have expanded too quickly I think they were trying to take it to multiple markets but anyway um I I do remember having an experience like it myself and just thinking how cool it was okay Chase let's move on to the to this first acquisition so you guys are you've gotten this business you've got Taylor Cooperative which you've started from scratch to um hundreds of thousands of dollars a year in cash flow you're trying to figure out what to do with this cash uh reinvested in the business or this acquisition opportunity Falls in your lap tell us the story yeah that's right so it's a business called Workshop SLC It's A Fine Arts Studio in Salt Lake City um it's a it's an interesting business model it's essentially a wework but for artists or that's what it was at the time it was founded by a woman named Lucia Heffernan and she's a prolific accomplished artist herself she bought the building uh years before we bought the business building from her um as a space for artists a space for creatives so six or seven private studios in the back and then the front was a classroom and Lucia Heffernan the founder of this business uh her vision for this was as an accomplished artist uh our artists are commonly taking classes from other artists it's how you hone your craft even if you're an accomplished artist you yourself want to be sitting at the hands of other artists and learning technique and sharpening your skills and so there's this uh there's this industry of uh art classes um art master classes that are commonly held in New York or LA or Florence and she would go to those and as a busy accomplished artist herself she got tired of having to be on the road to go to those classes and her thinking at the time was what if I just pay them to come out to Salt Lake City and host them out of this classroom and I get to attend the class and so do all of my friends and that birth to the very beginning of Workshop SLC uh fast forward we made the acquisition in 2021 uh fast forward we've since added a number of business lines to that business we we had this opportunity to come and really breathe fresh air and into that business she um she as a busy artist was wasn't putting a full 40 50 hours a week onto that business and uh wanted to stay focused on her art herself and we began conversations with her about this becoming a second Dakota company we had this Playbook that worked at Taylor Cooperative which was uh invest heavily in the customer experience uh build a really great brand and and run a strong digital marketing funnel where we understand kind of unit economics we're advertising on Google on Facebook at any given time and driving traffic to the website and converting it we we saw this world where we could add on to Workshop SLC not just these these destination artists who are being flown in from all over the world to teach but also go build an introductory program for watercolors an introductory program for acrylics and oils eventually a Ceramics program and we kind of worked to to develop this vision and see if what worked at Taylor Cooperative in a very different industry could also work at Workshop SLC we ended up closing in early 2021 and in the first 30 days of our ownership we've spent more in sales and marketing than the com than the previous owner had in the entire history of the business we we essentially moved forward with what we now call our kind of car wash integration process where we are typically doing a full Rebrand we're implementing technology we're building website or rewriting the website and we are investing in breathing life into the business so you know the founder had a very clear Vision she wanted this to be a hub for creatives in Salt Lake we loved that vision and what we wanted to do was bring more resources to the table to execute that Vision with even more capital and support and so it was a teeny business it was doing a few hundred thousand dollars a year and we were able to five exit in the first year just by investing aggressively in that brand and in growth uh developing out uh product lines adding more classes to the schedule and um you know fast forward a year later we were looking down and saying you know what this this Playbook is actually working this is this a great community business we have more students than we've ever had we had a phenomenal operator her name was also Lucia and an artist by trade and just really excited about the prospect of building a multi-decade art studio in Salt Lake City Workshop SLC so fast forward a year later the Playbook is working and Adam and I were thinking um it might be time for us to start adding to our collection and making our third acquisition so that that was the story of Workshop SLC and that was the first acquisition we ever did and the second business to add to our portfolio and chase this Playbook that you're referring to so I heard you say Rebrand digital marketing more product lines so I understand that you could product that you could that you could Playbook eyes a Rebrand you could play book guys digital marketing um but product lines that's that's very idiosyncratic I mean every business is going to have different ways that it generates revenue is that part of the Playbook or is basically the Playbook like most small businesses probably aren't being as creative as possible about services or products that additional services or products that they could sell so we'll come in to an acquisition assuming there are new and interesting things that we can add to the current portfolio of services is that essentially how you would characterize that piece of the Playbook yeah I mean at a 50 000 foot view the way I would maybe frame it is let's apply some of the zero to one principles of starting a business and trying to identify product Market fit in additional products and bring this intensity and fervor into the business that maybe the exiting small business owner the seller uh didn't have you for one reason or another probably because they built this business around their lifestyle they were attending their kids soccer games they were skiing 50 days out of the year they were filling the blank whereas we can come in with this kind of increased fervor and the zero to one tinkering you know approach and and iterate on launching those products and so as we found successful products what we typically don't talk about is all of the failed products that we experimented with along the way so it's a lot of Tinker it means a lot of uh coming in with capital that go burn down ebitda if we have to in year one take it through a J curve where if if we're truly interested in holding this business for multiple decades and we have conviction that we can get it there what investments do we make in Year One Visa Visa brand vis-a-vis technology an operator a management team in order to go breathe that fresh energy into the business and allow it to be for its potential to really be unlocked yeah yeah uh that's great and and when you talk about the J curve are you using the capital of the business that or let's just take the case of Workshop SLC was it the cap capital that the business itself was generating or did you infuse it with your own additional Capital um that was coming out of Taylor above and beyond the acquisition the the capital that you put toward the acquisition itself yeah we absolutely fueled it with our own Equity beyond that to go and finance some of that growth so we use debt um so so we've now made four Acquisitions we've used Bank debt and two of them we've used our own equity and the other two with a combination of seller note on one of them um but what we bring to the table is the ability to if we have conviction behind this business and behind our Playbook is we can go above and beyond and we we have the ability to to go invest in that Jake or burn down ebitda we don't have Bank covenants we don't have outside Capital we really can if we so choose go and burn that ebitda down and and accelerate that growth so we kind of look at it as almost ripping the Band-Aid off we want to make some one-time investments in time and one-time investments in capital um in order to go and really rejuvenate this business and accelerate it into it's it's kind of multi-decade strategy that we plan to to take it through you see let's just get into something that that you talk about a lot Chase which is when you kind of one of your key um filters that you put an acquisition opportunity through is we need conviction that we can 5x this business in five years um I I have actually I have a quote here from from some writings I found of yours online um it's you say it's why we've exclusively acquired businesses where we have conviction we can apply our Playbook to grow the business quickly into more stable territory so part of this 5x in five years um uh Playbook is also buying quite small businesses so so how do you get that conviction let me clarify the strategy a little bit and then wrote me back to that question if I don't if I don't end up Landing there but um to start unfortunately Adam and I are not independently wealthy nor do we have a rich uncle and so what that means is we've had to fund each acquisition through cash flow of the previous business and so we've kind of moved up the chain as we've gone but like you said on average we're buying businesses in the one to five million top line revenue per year phase so these are when you compare to other holding companies um significantly smaller than um what what most holding companies go focus in on that's not necessarily by choice if if I had it my way I would go buy larger companies that have more cushion that have more redundancy in place that have more robust management teams that uh that have you know a little bit more room for error because when you're operating in this sub 5 million range you're in what I commonly refer to as the small business Death Zone just like when you're climbing Mount Everest you you enter this death zone territory where you have to operate quickly when you're within it and get out of it as quickly as possible it's in it's when the oxygen levels drop and you have to just surface to the top and then get right back out of it it's a little bit dramatic but in the small business landscape under 5 million you're one very uh big mistake away from closing the doors it's just there is such uh such little durability there are some durable small businesses out there that are under 5 million I'm sure but by and large uh you know they're you're one phone call away from a key person you know resigning to having to jump in and it sucks all the oxygen out of the room and that level of risk is uh is real and it's why most people you know if you're on ETA Twitter like you and I both are it's why the common recommendation is don't go by too small of a business because you want to have that cushion built in um we uh we took a very different approach mostly out of naivety and uh you know bold fervor that we could kind of push through and and drive through that growth but also out of this forcing function if we simply couldn't go afford a 10 million dollar business if we could we would have done that instead we chose this idea of let's go buy five or four let's go build a portfolio of five smaller businesses learn what it's like to be a multi-company holding company accelerate those learnings take on some of that risk and offset some of that risk we need to have conviction that we can roughly 5x in roughly five years so there's kind of two things driving it it's one we want to grow out of the small business uh Death Zone um you know as quickly as we can um and it's uh it's buying businesses where we believe we we can do that so as we as we look at businesses we want to have this this Viewpoint where we can pull certain levers uniquely well that the previous ownership wasn't able to so whether it's the ability to burn through ebitda to go plug in an operator and execute a Rebrand or whether it's today now we have at the holding company level a shared services team across marketing Finance HR legal where we can bring that on day one and and go and Implement Gap accounting principles within the first 30 days of closing and sometimes that's just never been done at that business where we can Implement really great organizational Health kpi dashboards where we can kind of help come you know plug in a process of company building that maybe you wouldn't find under that five million dollar range but go apply it for a one-time kind of investment of again both time and capital in order to get the business out of that that kind of Death Zone and so we're we're in the middle of what I explained our team is kind of phase one strategy for Dakota group where we are we are polling aggressively levers of growth to go build durable um five million plus small businesses and and ideally fast forward in a year or two from now we're sitting on top of five really great small businesses that are profitable um that have that redundancy built in have great management teams have really great fundamentals in place and we're throwing off millions of free cash flow per year uh in order to go and acquire companies in phase two where maybe we take a little bit more traditional of an approach in other words the Dakota strategy isn't to Forever go roughly 5x businesses in roughly five years the strategy is this is how we kind of earn our seat at the table of being able to be a self-funded bootstrapped diversified holding company of small businesses despite not being independently wealthy to us it kind of felt like the only way we could go about doing that and so um that's what we look for you ask like how we identify that primarily I would say one of our advantages is like implementing a really solid digital marketing funnel where we're spending aggressively on acquiring customers in a repeatable and sustainable way uh we're learning those unit economics earlier of what the CAC is the customer acquisition cost and the lifetime value of the customer and we're finding a way to just go repeatedly acquire customers a lot of small businesses just don't have that because you know built into being a small business is a small team and what that means is you don't have a head of Finance ahead of HR ahead of marketing and so sometimes just the way we can pull those levers is by simply bringing those resources to the table with Workshop SLC we saw opportunity to go and invest in a high net promoter score experience Implement a really strong digital marketing funnel partner with a really great operator who knew the space and and take it through that growth J curve as we acquired built by design construction that was our next acquisition it was a general contractor who had become who had emerged as the specialist in adus accessory dwelling units essentially micro housing structures behind a structure the backyard uh you know structure that you can have for long or short-term rentals and they had emerged as that and and we we saw opportunity to do kind of the opposite of what they had done to successfully build a multi-million dollar construction company which was saying yes to every type of job and we had this thesis that we could help help them come in and say no to every type of job except for one or two things that we would emerge as a specialist to us that was our thesis that's what we brought in is let's go sharpen uh a niche and let's go sharp in an area where we can become experts find higher gross margins and drive a better process in a very kind of crowded construction space here in Utah and that was our thesis there at Northern electric it was a thesis around digitization and digital transformation of can we take a very paper driven analog process uh bring it digital and and drive a more efficient and productive workflow where we can better service customers as an electrician with tat and Baird it was a very similar thing to Northern electric can we help digitize and bring a really beautiful brand online and can we create some kind of symbiotic advantages between Taylor cooperative and Taft and bear so I wouldn't say well there's like one Playbook that we go follow it's more we need to have conviction that we think we can and even if we miss by a little bit the goal is that we are driving that growth to build more durability and capacity while we're also accomplishing our mission which is stewarding exceptional Community businesses in Utah from owners who are ready to retire who had a really great vision and we feel like we can take that Vision into its second chapter if that makes sense yeah yeah no it does Chase it and the reason I want to press you on this is because to your earlier point that that you know don't buy small buy as large as you can because small businesses are so fragile your one phone call away from losing your operator whatever you're you know you're one sneeze away from the whole thing collapsing right so we all we all know this principle um and it's a solid one um so but it's interesting that you guys have you know I've really really made a Playbook of going after these even if it's just by necessity you've you've gotten a certain you've built a certain expertise and comfort with these businesses and so what's interesting and what I think would be just interesting for the audience is like you know small very small businesses under you know five one to five million dollars in Revenue so what whatever the sde is two three four five hundred thousand dollars in sde those are plentiful and so if if there's some way that that people listening to this Searchers listening to this could could get similarly comfortable uh or build similar conviction around these business around a business they see like you guys have you know that might really compress the time that they search because everybody so many people out there are looking like no I'm just gonna buy that 750 000 sde 750 000 above sde business and and that's why it takes them so long to find a business um but if and many of them don't and so they eventually just have to lower their standards kind of like you guys were forced out of necessity to buy or smaller business so I you know I just think it's um I'm not sure there's more to say you may have already answered it but I just love it's just very striking to me that you've built a hold code out of buying these quite small businesses that we're all told to avoid you're having success at it it'll be great if I'm if I'm somebody out there who who who like Takata can find can get conviction around a 350 000 sde business and and feel pretty confident that I'm going to grow this thing 5x in five years I feel strongly that we picked the right pathway for us whether I would be comfortable saying it's the right pathway for any Searcher I'm not sure I think we had 10 15 years of operating experience of like really uh kind of entrepreneurial um curveballs being thrown at us every day for 15 years you know the chaos of company building was not unfamiliar to us and so what I usually say is if a Searcher um if is the profile of having a proclivity for company building and operating and they've been in operations themselves jump in yeah reduce that that searching timeline and go jump in and drive growth it's fulfilling um you'll you'll find ways to be successful if you're the profile where maybe you're coming in without that entrepreneurial experience maybe buying a business where the strategy is less about driving growth and it's more about not breaking things and preserving what's already working and paying a price premium for that that might be the better strategy I just think going in with your eyes wide open uh it's important especially today when interest rates are through the roof and and um you know you have to really think about how you you know what kind of risk you're taking on as you acquire a business but for us you know we always optimize for moving quickly you know we we would rather not sit we would rather go operate and learn we could have potentially bought one small one larger business and then we would have two companies today we we chose again perhaps naively and unintentionally but we chose the path that led to faster learnings um a little more chaos um but I think we're going to look back in several years from now and say that was kind of our unfair advantages we were able to accelerate all of these learnings and if we're successful even if we only emerge with four companies in a few years driving significant um you know revenue and ebitda uh that was self-funded we're in a very advantaged position to go and take down our next acquisition and so you know I I would I would be careful will to kind of just like prescribe what's worked for us we'll work for everyone and not because we're particularly gifted just because everyone needs to kind of assess what their uh advantages are and what they kind of bring to the table when you're looking at an acquisition because one last thought here is one of my biggest pet peeves is the general uh attitude that I sometimes see of man small business is so easy and I'm just going to come in and buy this Boomer run business and bring it online and it's gonna be a breeze how could we mess this up and every small business owner I've met with um has been remarkable at running their business they have learned it over years or sometimes decades they know how to fly that that machine if you know to use the analogy of an airplane that they know how to fly it blind they've they've gotten to the point where they can run this thing really really well and so to have this presumption that you can come in and buy a small business and run it better you you should check yourself if that is your your thinking um but if if um if if there's comfort with chaos and willingness to get dirty and willingness to go build um I think buying at a smaller sde level is something I would recommend because it allows you to get in the game sooner um and uh as you're successful in finding ways to unlock growth um it's one of the best ways to learn learn by doing mm-hmm wow that was that was phenomenal Chase and uh that's such a great point that you made that that the experience that you and Adam had was was was comfort and Chaos uh because you've been in in zero to one land and and so um you weren't easily shook by uh by the unpredictability of all these very small businesses um and so for a a business buyer of a different background of a different profile um that might not be the case for them so that the great um point of difference that you make there you know I will say just the other thing about buying small is that the UPS I mean the upside can be potentially better I think it's fair to say it's much harder to grow a business doing 15 million in Revenue to 75 million exactly versus the business doing one to five and yes you've still got you know you've still five extra you know your investment rough roughly let's say or at least the valuation I mean there's that going for it I should say like if you the the upside over a shorter amount of time could be better because a you know a very small business can maybe kind of grow a lot faster than a pretty mature business can I completely agree yeah so Chase on this point about size again and your point about you'll see people say oh I'm just gonna buy this unsophisticated Boomer business and go in and you know apply my um and and I think most acquiring minds listeners at least people who've listened to a few episodes will not be so naive uh hopefully what people will uh hopefully have heard more from my guests and for me on this podcast is that this is really hard and that you're signing up for a rocky road no matter no matter the business you know and so but but the really really small businesses can be more of a bloody knife fight than the more mature businesses right and so so that's what I really wanted to to ask you you started one you've acquired four quite small businesses do you feel like they have been uh bloodier knife fights be for their size than you know other Searchers out there who bought bigger businesses yeah and I think for two reasons one yes is a product of their size but two because we have this growth strategy um I think if if we were content um maintaining them at that smaller size and maybe growing with inflation or growing 10 15 a year uh it wouldn't be quite the knife fight but in order for us to get to this like next mile marker that we feel is a really critical juncture for Dakota's multi-decade strategy we want to escape that death zone and we are driving growth and one of the things I've talked about before is growth it presents challenges and it forces you to get very clear on on what matters and as you're growing especially as you're growing at 20 30 40 50 year on year we had two businesses grow over 100 year on year last year you're outgrowing a lot of things you're breaking a lot of things you're implementing process and then you're finding yourself eight to twelve months later going and having to rebuild that process because it no longer works uh you're outgrowing people which is a really difficult place to be um so growth drives a lot of challenges and so yes I I do believe we signed up for a knife fight that sometimes feels bloodier than the average Searchers day to day uh Adam and I view that as a as a one-time investment that we are making into Dakota this is you know we're financing Dakota Through Blood Sweat and Tears not someone else's money or not our own Capital we're doing it through through Sweat Equity um but but yes I think it's a byproduct of because they're smaller but also because we're trying really hard to get them into more stable full and durable territory by driving that growth Chase do any any stories uh any particular knife fights come to mind that you might share out of any of your four Acquisitions um just to give people a feel and a picture of what of what you know what what the real deal can feel like what could be like yeah I mean I think one of the trickiest things about our line of work uh as a holding company is uh the operator component um if I kind of think about the the hierarchy you know if you picture like the Maslow's hierarchy of needs are like our hierarchy of our of our responsibility is a long-term holding company the the very base of that Foundation the first Chief most job we do is we should be good at buying great companies number one the second thing we layer on top of that is really great at hiring and retaining great operators the third that we talk about is assisting those operators and building a great management team the fourth being assisting The Operators and their management team in pulling the right levers and running the business properly you know as a Hands-On Advisory Board and then the fifth is realizing that long-term mission of the the business that that original Founder's Vision um and so we have to be good at buying great companies the second is is the one where we are um where we've seen a lot of Challenge and as I have a peer group of other holding company CEOs and we talk about this all the time it is very hard to hire operators and particularly when you're growing at a 60 year on your growth clip in one of our businesses I'll have to be a little bit broad but in one of our businesses we went through two operators in a 12-month period And if you imagine the team that went through that Journey we had a day where we announced to the team where the new owners were so excited to partner with you in this next chapter we've promoted from within this is your new operator to fast forward six months later and that Operator just chose to resign and just kind of had a personal life event that forced them to step out of the company we went and we searched for a really great operator we found someone that we thought would be a great fit and lo and behold we actually plugged in the wrong person we're learning a lot about what a good operator looks like sounds like and how to best support them to be successful and so you know I would say the number of issues that come out of the transition of picking the wrong operator and the issues for the team on the ground is going through that much change and that big of a transition it's really really hard all the while we're taking these businesses through this car wash process of going through a Rebrand implementing technology and so um you know I think that um there's there's there could be a strategy again of of go pay a price premium for a great business that you don't need to change that's already earning well has a great management team and and you're not changing much that is so different well compared to the the strategy that we currently have is this phase one part where we're coming in and we're breaking so many things we're changing so many things and that can be really really hard on the people and and that can be a lot of change and so we try really hard to over resource at the Takata level so that we can be there on the ground with our companies helping navigate that change when an operator transitions come in and run that business while we go search for another operator but um you know I could come up with endless examples but I think think the hardest has been dealing with change on the on the people side um people was that's the the number one ingredient in company building and if you get that wrong um it can create so many Downstream cascading effects that make it harder and so the way I think about that that kind of mazzles hierarchy of needs is if we're not good at buying good businesses the next job of being good at hiring and and retaining great operators gets harder because no good operator wants to run a bad business and and so if we buy a good business and we find a good operator but they have a bad manager so it's like we're trying to take our businesses through this this hierarchy of needs and and one of the most foundational pieces is uh recruiting and retaining really great operators and helping them be successful and that is an art not a science and we've gotten a lot better at that over the past two and a half years but I still think we're in chapter one over the next 20 years of like really becoming exceptional at that part of being a holding company the and and just to be clear so when you have found yourself operator Less in one of your businesses you or Adam have stepped in and served the role of operator like you guys can do that in each of the businesses you you have enough enough knowledge that you can get in there and run things correct yeah and and um as we think about that lack of redundancy inside our operating companies we try to go over rotate for that at the holding company level so that if that does happen God forbid we do have some capacity at the holding company level to go step in and do that um it's it's not a good permanent solution of course but it's a good temporary solution for us to get back into the business um sometimes that helps us uh get acquainted with all of the issues that were happening uh unbeknownst to us underneath the water um and sometimes it's just a great way for us to be there personally uh and emotionally during a transition because that can be really hard when a small business loses its its leader that can be a disorienting transition and so yeah that's that's a part of what we do is we step in over time we'll build out this kind of portfolio Operations practice we just hired a chief of staff and his responsibility will be over the next few years building out a portfolio Operations practice where we have that so it's not me or Adam having to step in because when we step in that comes with a real cost we're drawing down time that could have been there to support other companies or go look for the next acquisition so we're continually looking for ways to build more and more redundancy uh but yeah that's one of the wonderful parts of the job is if uh if we do get a call like that Adam or I are going to go parachute in and go run a company for a few months and Chase with either with the story you just gave where you lost the two operators I guess the first that first operator had a personal issue and the second one it just didn't work out either that case or another case where you may have lost an operator um what what did you learn from that and when you post-mortem what had you done wrong or what had you misread about the operator or the operator business match them proved wrong that's a great question I think we have recalibrated a lot on how Hands-On or hands-off to be with the operator role um so so if I kind of zoom out and speak philosophically for a second um the the operator role is is tricky because a really good operator wants autonomy they they're they're in that role so that they can go effectuate change um Tinker on the business and and play that fun company building role that we were talking about at the very beginning of our conversation earlier and and autonomy is something we want to be able to give too much rope though and we can find ourselves in an issue if we selected the wrong operator and and so so that's where I think we have Adam and I have tried really hard to finesse that that right Rhythm that right um balance of how frequently we meet with operators what role we play do they see us as their manager or do they see us as their partner and what are we doing that contributes to that and so you know we have a rhythm today where we do uh board meetings every six weeks with the operator we do a managers meeting with the operator in their management team every six weeks it's a great opportunity casually to get to know the management team and for them to get to know us um we have you know frequent one-to-ones with our operators we do these kind of strategic um you know off-site planning sessions once or twice per year quarterly we get together and we have leadership Summits across the full portfolio so we've been tinkering a lot with how do we provide that autonomy so that a really great leader has as the control that they want but we have some guard rails in place so that they don't accidentally walk down a trail that we've walked down before that doesn't go to a good place um and so it's it's kind of this never-ending tug of war and so you ask for specifics in the second Opera that didn't work out we um we were kind of experimenting with this model of giving more autonomy than we were comfortable with a little bit more rope and and we learned that if you don't have the right person in place for that that can actually take you to really treacherous water and so we've had to be adaptive and in how Hands-On how present are we and what kind of relationship do we have with our operators I kind of talk about it um often is we want to be the Iron Man suit around our operators at the Dakota level where through shared services marketing Finance HR that's elective they can they can purchase shared services from Dakota and we can support them in that way but also just through the phone calls of like if they need a shoulder to cry on or advice or a sounding board on a really critical decision who to hire who to fire what strategic initiative to to Really invest in uh a re-budgeting exercise we want to kind of ideally come into those conversations as that sounding board and that helpful coach to help ensure that collaboratively we reach the right decision together it's a really tricky balance especially because in the first 15 years of my career rare I was the front person of my company I was the one calling the shots and I didn't have a you know I had border Boards of directors but um over the past few years one of the most fulfilling components to building Dakota has actually been not being that front person instead being this empowering behind the scenes uh role to our operators letting them be the front person but being there as a source of camaraderie um you know breaking bread as well as guidance when the moment calls for it and it's a really really fulfilling day to day I I truly feel like I could spend the next 20 30 years doing what I'm doing because I love that role that we play with our operators but we didn't land on that on day one um and we've had to really learn by fire on how much rope is too much um because a good operator also wants support too you know they want someone they can call and so that that's I think the the number one lesson we learned in that part of the journey well well the the tricky thing is that the additional tricky thing is that there probably isn't a single right answer so because every operator is different so every operator is going to have different capabilities and a different appetite for your support and a different appetite for autonomy so it's not like you'll arrive at the you know one day you and Adam will be like we got it we cracked the puzzle here's the answer it'll always be it'll always need to be kind of conforming to the the operator of the moment um so it's um completely right there's an analogy here to Parenting not to say that your operators are your children but there's an analogy here to Parenting where you know that push and pull how much autonomy how much Authority is something every parent goes through with kid number one and then if you try to apply what you've learned from kid number one to kid number two who's a completely different human translate right and often you'll hear that it's just it just does it at all and so you know different techniques for every human so correct um okay this is fantastic Chase well we we're we're bumping up on time I want to make sure I want to Circle back um uh just to the types of businesses that you like for Dakota we talked a lot about size but a lot of Searchers out there you know there's the The Familiar checklist of Ideal characteristics of a business recurring Revenue recession resistant uh you know Etc it's a business to business et cetera et cetera uh and we all know that there's no perfect business and so you decide what you're comfortable uh which of those criteria are comfortable sacrificing in which you're not um and so on and every Searcher goes through this kind of thought process um does Dakota have criteria like that uh where you won't touch X and you gravitate toward y yeah I mean we're intentionally Diversified and so what that means is we're not a roll-up we're not an accumulator we're not focused on one space we are in the process of building platforms within Dakota so you know built by Design in Northern electric are the beginning to our trades platform and kind of residential home service and so we plan to make Acquisitions and plumbing HVAC larger electrical contractors over the coming years and and that platform we will that that should be a very meaningful part of our portfolio but we will continue to make Acquisitions at very unrelated uh spaces I think Life's Too Short not to you know we just have so much fun getting to know the industries and the businesses um as they surface and as we kind of get inbound deal flow and have the opportunity to look at businesses um I think there's definitely some things we're sensitive to we're really sensitive to avoiding High customer concentration uh significant owner dependence so we want to see a world in which we can come and replicate what the owner's done very well and build that into the business as a business asset something that's actually transferable um so so there's certain things um that we definitely are sensitive to but um aside from restaurants um there's really nothing we won't look at I think if it were a highly sophisticated Aerospace or Life Sciences businesses that we don't have any business running that so so it has to pass on sniff test we have to have conviction that we are uniquely suited to um to be good owners to this business but sometimes really that the the way we we are uniquely suited to be a good owner is is our long-term hold our ability to really um not have to um you know make significant uh changes to the original founding intent um and so I think there's something very powerful about a willingness to um you know burn down ebitdon and take it through a J curve but then have this long and patient time Horizon with no intention to sell that allows us to be uniquely good owners to to small businesses so that's kind of what we look for we want it to be a really remarkable Community Asset we want their to be something that is you know it could be distilled into what makes this company great that we can enhance and then from there in an Ideal World in a few years from now we're simply a matchmaking service between operators that we've built you know over the years kind of our Rolodex of potential operators and small businesses here in the community there's a really big advantage to being geographically focused the way we are which is the you know as we're out there making Acquisitions getting to know Brokers serving on non-profit boards being involved in local Chambers uh you know Dakota is nowhere near a name brand by any means but when someone is thinking about selling there is a chance that Dakota's name comes up as a potential Suitor and so we're starting to get some inbound interest um and so that that's good because that allows us to look at a lot of opportunities and be selective about what makes sense at this stage so Diversified add but pretty agnostic to to what we're really going after yeah yeah well I imagine that this local Focus this SLC Focus well the part of the there's just a lot of flywheel to that and I think one of the most powerful aspects of that flywheel is the one that you just said where your deal flow maybe not yet although you're starting to see it but eventually like if you really become known in town and and you're just the first call that any retiring business owner makes I mean incredible an incredible place to be and and I feel like that could be pretty realistic for you to get there correct I think that would be a significant Advantage uh if we can get there and I think the way that we get there is we have to run a sharp and disciplined organization we have to be good owners we have to build a really great reputation of being good to our sellers uh you know being you know really good stewards of these businesses and so that stewardship is one we've started to use a lot more of um because Adam and I have done that zero to one game for so long we respect how damn hard it is to go build a business from nothing to something and so that allows us to really appreciate that and bring it into its second chapter all the better and so yeah long term I think we want to be seen as a destination home for small business owners ready to either move on to the next project or ultimately retire great how powerful one thing I do notice about your business is I I think unless I'm I'm missing one is that they all all are consumer they're all B to C are they not yeah they are that's right in that but that's just by happenstance not by strategy yeah I think it's more coincidence um there are definitely some B2B businesses we've looked at and gotten close to uh pulling the trigger on but um yeah I think we have a natural um proclivity toward that um but I don't think that's a an intentional we won't do a B2B business it's more just a coincidence and a little bit of a proclivity as we're looking at deals mm-hmm uh Chase where we're getting tight on time but I I don't want to let you go before I ask um just for the 30 000 foot view of the electrical business because we hear so much about Plumbing we hear so much about HVAC um and we hear about electrical as kind of the third big trade out there but it's so much less uh common to hear about it um from in our world of of search in small business acquisition can you give us just the three-minute primer on on buying an electrical business what to look for what you liked about it Etc yeah well I I should say Tim this the previous owner and founder of Northern electric uh he he came to us when he heard that we acquired built by Design he had done a lot of business with built by Design they had a really great relationship and a part of our interest in acquiring a construction company which is typically not a favorable business to go by if you're talking to holding company types or investor types construction is a very challenging industry one of the things we loved about it though was the close proximity to all of these trades companies um all of these plumbers HVAC companies electricians and uh Tim approached us not a few days after we closed on built by Design and we were not interested in doing two Acquisitions in three months which is what we ultimately did but uh sometimes opportunity strikes at an untimely moment um and so we we loved that we had that relationship already established so it allowed so in other words I tell you that story because it's not like we specifically said let's go buy ourselves an electrical contractor it was an electrical contract across our plate we loved him we loved the business and we saw opportunity to go pull some levers um so it's a it's a traditional electrical contractor it does a mix of project work and break fix residential service we're very bullish on residential service and that's what we've been investing aggressively in uh it's a trades company and so what that means is it's one of the hardest companies I've ever been close to when it comes to recruiting great people it's a shrinking trade there are fewer electricians every day in the state of Utah it's very very difficult to get a quality electrician to want to come work for you and even harder when as an electrical contractor you're on a smaller kind of end of the Spectrum in size but also on the lower end of the spectrum on price uh when we acquired the business it was well below Market on average hourly rate that was being charged for services so we saw that as an opportunity but it's also been a African headwind as we've moved that that average price point up to deliver kind of higher quality service to higher quality customers so that we can kind of get into this virtuous cycle we try to do this in each of our businesses where Charger price premium so you can have quality margins to hire uh Folks at or above market rate so that those quality people can go deliver a quality service so that you can justify charging a price premium it's this virtuous cycle we're trying to get Northern electric into and it was hard to do because we uh it was vastly underpriced it's it checked a lot of the boxes that I think a lot of Searchers look for in a trades company primarily analog run by an owner who had been kind of running at 20 to 30 hours a week so so not investing aggressively in growth and pushing the envelope on you know 40 50 60 hours significantly analog a lot of paper process and underpriced and so it checked a lot of boxes we were really excited about this business and it's been a really fun trade to get to know um and I would say the the the short of it is trades companies we're learning are very hard to recruit for but they're very simple businesses to operate in terms of like simple not easy they from a building block standpoint you're selling time and you have to deliver billable hours productively in order to drive profitable revenue and so it's not a complex business model and so as you can drive productivity as you can drive demand and as you can afford to hire that's kind of the three-legged stool of our electrical contractor if you can successfully do that growth is inevitable there's constant demand for it as you indicated earlier it's largely recession resilient it's a very beautiful business and so I'm really bullish on the trades I think two things I really didn't know about three things I maybe didn't really know about the trades that were now very clear on very hard to hire for we thought we would come in and clean up on our digital marketing experience and you know if we kind of had this naivety that we could come in and kind of uh out advertise uh some of the competitors not true it's it's a very it's a very competitive Marketplace for acquiring customers profitably and then third the the valuations are are incredibly steep right now to go and build out our trades platform and so in a high interest rate environment with really high price points and strong demand for trades companies there's there's a headwind but as we're getting to know this electrical contractor and how it functions there's a reason why you see HVAC plumbing and electrical typically being rolled up together it's it's a very similar go to market motion and I'm really looking forward to taking what we've learned at Northern electric and applying it to Future acquisitions and and why do you think we see less activity in electrical among Searchers versus plumbing and HVAC that is a great question um I think electrical tends to find themselves more uh tied to new construction and larger projects and typically uh when you look at a plumbing acquisition that the The Sweet Spot is where they're doing a lot of brake fix residential so you have a lot of high volume jobs as opposed to very few large Project based jobs and electrical can can oftentimes be in in that kind of area of the marketplace um I think sometimes it's daunting you're working with power there's significant safety issues um and so it's it's a trade that you have to know really well you have to take safety incredibly seriously you know HVAC and plumbing you have to take safety seriously but I think on the electrical side of things you're dealing with people's lives and there's significant safety protocols so I don't have a perfect answer for that but um but I would I would assume it's for those two reasons great yeah that's great Chase I want to close out with um just as you look back at what you built with Takata and how you've just been become so immersed as as somebody in the world of small business and Community businesses versus your years of chasing moonshot unicorn zero to one VC style entrepreneurship what muscle has grown what muscle have you grown and what muscle has atrophied hmm it's a great question um I think I've had to get comfortable moving at a more slow and intentional Pace where we're optimizing for incremental progress versus transformative change uh and and I think that is I'll give one answer for both I think that is a muscle that's potentially atrophied is the ability to move fast and break things as the cliche out of Silicon Valley is um but it's also a muscle that's developed the most is is really honing in on a a more intentional overarching long-term strategy um so so making decisions more slowly um you know not having to Pivot constantly but instead kind of picking those kind of key inflection moments that you're building toward reassessing strategy once you get there as opposed to when I was in the zero to one space it felt like we were Reinventing our business model weekly and most entrepreneurs that are in a zero to one space will relate to that um so some of this is a product of the being in the one to two uh Arena where you're making progress you're professionalizing you're slowly making incremental change and you know to kind of tie off where we ended is for me that is very fulfilling it feels like we are shaping this this bust we are we're making uh progress and we're seeing that daily as we go the sculpted bust yes um and so it's fulfilling um sometimes it can feel uh slower than the days when we were chasing our tails and Reinventing our business model weekly but um it's it's a really uh fun place to be uh to be able to to be that intentional uh with with company building well I wonder if that's an illusion I mean you have acquired four businesses in two years after all Chase you're not inching along here and so I wonder if the illusion is when you're in zero to one and you're pivoting every week um if that Frenzy feels like a lot of progress but it I I but it's actually just frenzy um and it's a fair point and and as you're moving ahead here linearly and things aren't you know you don't it's less Tasmanian Devil and more kind of like yeah one foot after the other but it's still very it's still very real and and quite quick progress sure I talk about the there's two different types of risk that you take on if you're in zero to one or one to two in zero to one there's so much risk in whether your your Venture succeeds at all you reference this kind of comment I don't even know if it's true either but nine and ten businesses fail and it can be due to timing or due to just the product not being right or the team not being right or running out of capital there's not that kind of risk in one to two I mean that that risk is still present but the risk that we take on there's not as much existential will this business cease to work next week it's like no this business has worked Northern electric we acquired it it's been around 27 years you know we would have to do something pretty stupid to go take it off that winning track record um but Adam and I have personally guaranteed a few million dollars in debt and if something does break and not work um we we have a lot more on the line and so the zero to one it's it's you feel like you're in constant risk of existence all the time I don't feel that at Takata group but it's a different type of risk where there's there's a lot more on our shoulders we have a larger team we have more people under our employment we have more debt you know we have a lot more to consider and so um I think that's related to it as well is it doesn't feel like we are at risk of dying you know every day uh we feel like we're in a more controlled um controlled risk uh aspect of our journey right right but the stakes in some sense are a little bit higher in the sense that if things do go South you have millions of dollars personal guarantee you have people who's you know you're responsible for you know who you feed their families so it's like in some sense the the stakes are are realer than in Silicon Valley land where if the business completely collapses nobody's gonna I mean Capital will have been burned and and I guess the employees of the business will will be out of a job so I don't mean to downplay that but in some in some sense it's it's a little bit um Monopoly money uh in Silicon Valley exactly right I think there's risk in all forms of Entrepreneurship the risk is just different depending on on which stage you're operating at yeah Chase how if people want to reach out how do you prefer that they do that uh Twitter's probably the easiest the best way to reach out I'm just at Chase Murdock um and I would be happy uh to connect if there's interest in reaching out so thank you for the opportunity to be on the show today will it's been fun talking to you thanks thanks so so much for coming on Chase what a what a really cool thing you and Adam have built at Dakota and and will be eager to watch for for the decades that come it's in the name so thanks a lot sir uh and uh I'm sure we'll have you back on here sometime next year thanks will appreciate you I hope you enjoyed that interview make sure you subscribe to the acquiring minds Channel below we are now publishing twice a week so tons of new interviews and stories to come stories that will help you along your own path to acquiring a business