Coast updo welcome to acquiring minds thanks will happy to be here it's a treat to have you here Coast up you are a familiar face and voice in our world of buying small businesses you were on stage at SM bash last year in Orlando you'll be on stage again in Austin here next month and your story in summary Coast Hub you're a former private Equity guy who got the bug for search and are now owner of a tree services business in Seattle so we're going to hear that story see what we can learn from you and your experience and of course learn about the tree business let's start off please with a little background on you Coast up yeah well thank you again for having me um so I grew up in the Seattle area in the suburbs in Redmond um went to middle and high school in Seattle and then moved out east for college and which sort of led me down the finance track I was always really curious about how businesses worked that's sort of what took me to you know a school that had an undergrad business program um and where I learned that being a professional investor is a job you could have which seemed incredible to me once I learned about it and honestly it was incredible I spent you know a few years with paid Capital in Boston doing distressed debt Specialists investing that was a lot of of you know pretty funky situations like good businesses bad balance sheets working at restructurings figuring out ways to solve that um a lot of times spent you know on first principles like what is a good business and that definition looks very different and institutional investing than it does in small business World um but a lot of first principles like learning there's the fundamentals of how to think like an investor decided the credit was a little bit too far removed from the how does the business work question that I was trying to answer and so that led me to more traditional private Equity to get on the you know the equity side of the table so I went to a firm called Searchlight Capital Partners which is a you know generalist PE firm based out of New York City but with a special team media and Telecom got to learn from some really just incredibly bright and driven investors and I spent almost three years there as well um and as I was there I kind of started to learn that I'm still not getting it like I was missing something fundamental about how these businesses run um you know we had two deals at search I go really well and I didn't really understand why right I looked like one of the deals was the one I worked on one of the deals was an older deal but I was sort of staffed on later and when I looked at the original underwriting and thesis it just didn't quite click for me and the answer is really management execution right in those deals like we were able to find and select and put in really amazing operational talent manager Talent who could come in and really do amazing work with those businesses and so when I was sort of making the decision do I progress in private equity and you know I was sort of moving into the next role at PE where you're in the carry of the fund and getting equity and all that and you're really signing up you know what I mean for PE at that point um I sort of made a choice of like hey I think I want to look a little bit more like the CEOs of the portfolio companies I worked with um the partners of my PE firm are incredible and like you know in a league at the top of their league so to speak in that world but I was like hey I think I'm missing something on this other side so even if I do want to be a professional investor long term I was missing this element of how do you even identify great management Talent or what does that mean to be a great manager of a business um that was sort of part one and part two was in PE you have to sell your businesses which I found just kind of frustrating right like I ran the sale process for one of our businesses that you know I thought it was one of the best businesses in our portfolio and we just you know it was at the end of fun life it was time for that business to go I mean it was a good outcome for everyone involved it's a good outcome for management a good outcome for our investors but you know there was some level of like man we kind of turned around a business grew it really well it's a cash flow machine now it's a great you know brand and now we just gotta let it go and so there was those were sort of the two driving forces that led me towards Surge and specifically self-funded surge um as I started exploring the space you know like most Searchers here you learn from other Searchers who are a year or two or three years ahead of you and so I had a couple colleagues a former colleagues from Bay Capital who have gotten down the search path you know Justin vote is one of those who's pretty um you know well known in the search space he was at Stanford um business school at the time while I was sort of learning about this um and then I had another friend who was sort of you know he's doing his own little roll up and so between those guys I started to learn the different paths and it landed basically on a self-funded surge um while I was working somewhat part-time for the PE firm I focused on brokered search only because I didn't honestly have the time to do proprietary search and working part-time for the PE firm extended my Runway and in search which was kind of a win-win all around and Coast up let me let me stop you there before we get too deep into your search um you know what strikes you hearing your kind of background and what kind of Drew you in here you sounds like you said you didn't know that professional investing was a thing as late as going into college so you were definitely as much of a kind of thought leader as I consider you in search you were not somebody who is like you know investing as a little kid or you know not a little kid but even even in adolescence I mean a lot of people who end up in private Equity or Investment Banking um have been picking stocks since they were eight you know with you know 50 bucks given to them by their father or something right you didn't even realize that there was a world of of High Finance out there so that's interesting I knew about stocks in high school right and I had kind of like messed around with that with like some of those um like fake money type investing things I didn't really realize that there was a whole world dedicated to it like my family is all you know engineering type world like my dad is on year 29 at Microsoft uh my little brother is now on year two at Microsoft you know what I mean um and so that's in like my aunt is that apple and my uncle is that face you know like that's the world that I came from um yep and so learning about that the ecosystem of institutional Finance is very new to me um and kind of amazing it was just like damn like my whole job is to just learn about random businesses all over the country in the world and decide if we think it's investable or not like what a cool job well that brings me to my next observation which is that it seems like you're you're draw to the world of business and finance is very much an intellectual one you said you said the first I think the first thing you said was you've always been curious about what makes them work but I don't hear in your voice kind of like the hunger to make a lot of money um which may be crass and people may not want to acknowledge but is definitely there and a lot of people in this in this world and certainly up and down the world of Finance um do you have that hunger is that is that or did you or I mean is that any part of your motivation or is this purely an intellectual exercise for you yeah it's a great question I mean look like one I'm coming from like a general background of privilege right where I came from a family with kind of White Collar parents that put me through private school and college and so it wasn't like a pressing issue in my life that I was chasing money it I want to make money but it was never like I sort of had a soft understanding that like if I went down a variety of pads I would be able to create a life for myself that was comfortable that I could kind of raise a family with and all of that so I think of Finance more of like this was a very fun intellectual exercise I'm just lucky that the thing I got really interested in happens to pay a lot of money mm-hmm yeah you sure did yeah you could have gotten interested in some other academic uh academic exercise that um as we know doesn't pay great okay and so just to recap for the audience what because my I wanted to ask you directly what how you got the bug for search you were in PE you saw that um first of all you didn't like the model that required selling which is kind of intrinsic in the in the classic PE model and I want to ask about that a b u um felt like there was this piece of the puzzle that you understood in an abstract way but not in a real tangible way would namely that like execution operation is like what separates you know success from failure NP and the businesses you hold um just for the novice why is the PE model uh a flipping model or the flipping is pejorative but like why is it always why is it always selling um when you have of course you know Buffett and Warren Buffett would be the canonical example of like he only buys businesses forever why isn't that the model um yeah why is it always a seven year hold thing I mean it's primarily a function of how funds are structured right so like private Equity investors they raise a pool of capital from institutional investors like Pension funds and the protection funds make a commitment to the fund so if you raise like a billion dollar fund maybe you know whatever you've got 20 investors who've each committed 50 million bucks they don't give you that money right they've just given you a commitment for it you have the way these PE funds are structured is you usually have four years of an investment window so you have four years during what you're allowed to call on those commitments from those guys and say like hey have a deal you gotta give me the money let's go and then you've kind of got the six-ish years like a 10-year total fund life six this year time to go create value and then harvest the deals right and like the those LP like your investors that are called LPs they are expecting a return of that Capital now look the as private Equity has evolved and kind of matured as an industry you are seeing a lot more of longer term Vehicles where PE funds will sell a business from One Fund to the next fund or they'll put that fund into a standalone entity that they can own for longer they call these like continuation vehicles um so it's it's happening but the like the math of a private Equity Fund and the structure of a private Equity Fund fundamentally involves selling your business and realizing an exit because then also the PE fund managers are paid as a percentage of profits right and it's really hard to say what the profits are until you've sold your business yeah yeah well I don't want to start critiquing here because I'm clearly no expert but it just it feels like there would have been um sub models or alternative model I'm just I'm just surprised that this kind of like one rather rigid model has persisted and there hasn't been more variety over the years when when I mean certainly down here people are you know in small business land or think about buying and holding Forever at the other end Warren Buffett thinks about buying and holding forever and you in the belly of the PE Beast were also frustrated by this reality that there was always had to sell so anyway I mean the one other element I'll note well is that like businesses as they improve in quality and get larger their cost of equity Capital should come down right because they're becoming a higher quality business private Equity is fundamentally like an alternative investment vehicle it's a way for large investors to attract higher returns right it's not meant to be a low cost of capital source of equity right and so like the way you're generating your return is you buying a business at a high cost of capital you're improving it and growing it and then hopefully exiting it to somebody with a lower cost of capital which like the best option of that is you IPO it right and like public Equity investors are going to have the lowest cost of capital amongst Equity investors so in the classical sense that's how it should work now like you've got these like PE darling deals that just jump from P fun to P fund to P fun until the Music Stops that's like a different issue right because you're not actually changing your cost of capital fundamentally you're but like the whole zero interest rate issue right over like 20 years has effectively allowed the cost of capital to come down just without actually changing the type of owner of that business but really the way PE should work is that we are a high return type of fund that allows businesses to eventually become a good deal for a low return fund okay I had never heard it put that way that's fascinating returning to your story co-stub so now please tell us take us through your search and I know it took twists and turns and evolved and kind of give us an abbreviated version of all that yeah I mean the only other element I will note of in leaving PE is that I was also just realizing that to stay in PE you kind of have to be at a certain level of commitment to it and a lifestyle to it that I just didn't see myself sustaining um and so I kind of looked at the different search models and I was like hey if I'm going to spend the next five to ten years of my life really grinding on something I want it at the end of that to have some more time freedom and I think in private Equity you sort of end up after five to ten years making like a crazy amount of money but not necessarily a lot of time Freedom yet right like when you're a partner uh whereas here I can kind of see that vision and so that was the other draw to Surge um but yeah I went through the search process was you know doing it the way you know like a bunch of Searchers were probably listening to this or you know in the grind of it trying to look at whatever 5 10 15 deals a week primarily brokered like I mentioned because I didn't really have the time to be proprietary got very close on one deal that fell apart um and then basically you know one of the one of the things that I talk about is like I think I had to go through like a grieving process of realizing that oh like I'm so used to looking at businesses that are 50 to 200 million of ebitda plus like we're talking about like top one to five in any given Niche globally right that's the type of businesses I worked with they're just really high quality businesses and not all of them were but a lot of them were and like I think small businesses are awesome clearly right I'm in this space I put a ton of personal risk in my business um but the reality is like they're not as high quality as like a 200 million ebitda business right um and I think I had to go through a little bit of a grieving process of like oh the business I buy is not going to be as high quality as what I'm used to looking at um I think that's probably the case for like anyone coming out of private Equity who goes into search um once you get through that and you figure out the compromises you're gonna make to get a deal done um it got a lot easier and a lot faster um and it's more became more of a question of like hey like what risks am I willing to take um what risk am I not willing to take and then can I find a deal that's reasonably priced oh you know that contains the risks I'm willing to take and not the reason I'm not willing to take and so anyways that that sort of led me down the path I eventually focused my search on just Seattle I initially started nationally then I started only looking in major cities where I'd want to live and then it kind of occurred to me I was like hey like a big part of the reason I'm doing this is to potentially own it forever right like I don't want to have to sell it right and so I would love for this to be in a city that I could really envision myself living forever um there's a lot of cities in theory I could live in forever I just knew Seattle was practically a city I could live in forever I and so I sort of focused my search there which honestly turned out to be a really good move because it was so much easier to connect with Sellers and Brokers um because I could tell them you know where I went to high school I could tell that my parents live like here right like there it was just a lot easier to make those connections and then you know not to jump too far ahead but post close these small businesses for the most part especially if you're buying a service contractor like I did they're hyper local businesses like our entire Google Calendar is organized by neighborhood name client name I know all the neighborhood names already like I didn't need to learn that um and so that that's honestly been an advantage to be operating in the city I'm from like I understand it culturally I understand it geographically um and so once I focused in on Seattle while the deal flow slowed because there's not as many deals the odds of Any Given deal felt like they went way up you know as I hear you talk about the benefits and already knowing the geography of Seattle and you know that to an outsider could be learned relatively quickly I guess the culture of the place is not that would take that that is an advantage in your in your operations um but what strikes me is the largest advantage of all is what you said that like so it actually it actually helped you get better deal Flow by Brokers kind of being more open to like a HomeTown boy than some Outsider that there was a a currency there that that was valuable there was definitely a currency there and honestly more than the Brokers it's the sellers right they they want to unders they want to know who you are in almost any other city I was New York City private Equity guy in Seattle I was hey I want to move home guy yeah totally totally that's that's strong well first of all I want to plug some of these questions are going to be follow-up questions two answers you had in uh an interview with Alex Bridgeman on think like an owner about a year ago 10 or so months ago great interview I encourage people to go back and listen to that um don't want to repeat much of that interview here but um just add to it so you talk about the grieving process in your conversation with Alex what um but give us a little bit more color on that here sorry quick aside the funny co-stop that you um had to reset your expectations of the qualities of the business from companies that were doing 200 million in ebitda down here to you know half a million in any but uh um did you just think you were going to get that 3x multiple for free I mean I mean right so so yeah not even that it's um I just you have to remember right when you work in private Equity you have no idea what's happening in the businesses right you interact with the c-suite only um if you're lucky you're kind of doing it monthly if you're like and as an associate in PE but it's primarily at like a boardroom meeting it's really sanitized so it's not even just quality of the business it's also like you're just getting to see the guts of a business for the first time truly well what were some of these some of these expectations that you had to let go of do you remember anything concrete yeah um I think there's three big ones in small business one is some level of concentration risk um to which is either customer side or supplier side um or like franchise or is another way of thinking about concentration risk um so that's number one number two is owner dependency um and then number three is revenue quality right recurring versus reoccurring versus one time um and I think like those are three items that are all on a spectrum right and I was a like I was thrown off I think by especially owner dependency right how much these small businesses revolve around their owners um and the just the act of the sale and the transition is truly like you're ripping out a spinal cord from these businesses and like sticking in a dude in his late 20s has never run a business yeah but kosov I do want to ask because um at least in theory if you go a little bigger the conversation about size of business that you'll buy you haven't told us what you were targeting um but I know you've talked about this um you go a little bigger a million dollars you know 1.2345 if you can find it in sde uh one of the arguments for a business of that size is not only well more cash that's good more uh room to screw up that's good but also it's a signal that there's probably a management layer there or maybe you know maybe not a layer but maybe two or three people it's not just totally totally totally all in the owner's head um now that's theoretical that uh do you how do you react to that like why why not go for a 1.5 million sde business where there's going to be at least two or three people who the business also leans upon and will give you some room to learn things and it's not all unlocked in the owner's head uh there are two reasons one I felt really strongly about being the majority owner with governance control um once I went to that size I just don't have the personal Capital be able to retain you know majority control most likely um and that like retaining majority control to me was important for a number of reasons but primarily like having the time Freedom down the road having kind of control of my life not having a for sale event at any point um you know and even I have investors in my deal but sort of being aligned with my investors that hey like we might not sell this for a long time like I will return Capital through cash flow but we might not sell this for a long time and as you go bigger you need to start getting like bigger investors who have more interest in having Capital returned um so I was like number one and then number two honestly like I was kind of down to be in it right like I didn't feel a pressing need to like buy the business do one to two years of like work on it and then lift out which listen like that's a great strategy also it's probably a better strategy to make more money faster also for yourself personally but like a big part of this for me was just getting to do the work right and like be in it and so like I yes I would love to build our business to get to that point where there is a middle manager layer and the business is just structurally Sounder right like it just needs to be less owner dependent like now it's pretty underdependent on me right and like that's not good either but I it wasn't well in the time Freedom time Freedom has been being been such a motivation for you sorry totally no no you're totally right so like we will get there but I kind of wanted to do it yeah okay um so after grieving for the loss about the loss of quality one of one of the key points there being odor dependency then turned around and totally embraced it um so the idea of buying buying a job correct and I bought an incredibly incredibly underdependent business which we can get into okay okay okay well let's let's get in let's do get into it so tell us about the business that you found and bought and any numbers you can share to give us a sense of size yeah um so it's a tree service uh business located in Seattle uh this is basically residential and Commercial tree pruning tree removals tree I like like stump grinding after the removals we recently launched treat Healthcare which is a great service um servicing you know we do something like 800 900 jobs a year we've got two Crews so about 14 employees at the moment um and you know it's a it's a really great business because it's focused on treat pruning that's what I really liked about it a lot of tree businesses in the country are focused on tree removal um which tends to be higher ticket but you can only remove a tree Once uh which is you know it's failing and so for us you know when I started looking at this business that's what got me excited it's like oh you've got a huge base of customers that you know we don't you don't need your trees pruned every year for the most part depending on the type of tree but like we've got this base of clients that come back to us every other year every third year every fourth year um pretty consistently like you know we've got an email list of 7 000 clients which is you know significantly larger than the number of clients we service every year and so that was a foundation I really liked in the business um like I was saying the company was heavily owner dependent so it was a father-son team who are both you know excellent arborists um excellent tree workers like as an in on the actual Cruise um and really great with clients as well and basically the way it works is we had two Crews the dad and the sun they led the two cruises they were each in the field four days a week climbing trees and on their fifth day they were doing sales and so and that was it there was no other sales person there were no other crew leaders right it was two Crews being run by the dad in the Sun and that was the whole business um wow the the sun didn't want to take over the business you know just in terms of like he'd sort of seen his dad go through it uh and kind of you know just didn't want that level of headache which I respect um and you know he has a young family and so wanted to focus there so the question was really when I met with them was like how or how could how are we going to transition this business to anyone else right and the answer ended up being like hey like we just gotta sit down and like figure out a plan right and we figured out a plan the plan more or less worked it's still you know like we're not 100 of the way there but we're now sitting you know it's about 13 months from the transaction the dad he retired three months into the deal we replaced him with an internal promotion to crew leader that we had identified you know before closing and he's been great it's worked out really well you know with him as a crew leader and then the son he agreed to a 12-month transition which is you know the max Allowed by the SBA and that also went like incredibly well like he really came in and he put in his like 40 50 sometimes 60 hours a week really supporting the business through that transition and then finally you know he sort of he left about a month ago and we found a new crew leader just in you know open hiring who we've brought in to take his spot and so like and then while that was all happening we also had to solve like the sales side so we've hired new Isa certified Arbors to sort of handle sales we've had some like fits and starts with that like gone through a couple different people but I feel like we finally landed it up at a comfortable spot that um the business right now feels stable you know what I mean which like when you're in a small business like feeling stable is a luxury um and we're finally you know we're past both both the sellers are gone now we've now had a month with both the sellers gone and you know I feel like we figured out what that infrastructure looks like yeah yeah you've sort of finally completed the transition the transition is now no longer in process um I guess if you were gonna have to make some of these additional hires because the father and or son were doing so much then that that reduced the sde that you negotiated against for the multiple well so that's the thing right like real like during the transaction process I sat down with the dad primarily and said like look like I get you've been making this much money and that's how we base our our deals off of but the reality is we're gonna have to make a lot of replacement hires and so we need to like get aligned on that and like let's walk from what sde was to what it really should be and he engaged in good faith around that right and we reduced sde by a lot in the LOI process you know is a pro forma right we don't really know if you're gonna be able to hire people for that amount you know the business used to be run out of the seller's home whereas we obviously needed a lease like a real commercial building so you have to make some assumptions around what that's going to cost um so we performed a lot of expenses as part of the underwriting and diligence process and that was a discussion with the sellers right that and like they didn't agree with all of it for example like they felt like some of it I didn't need to replace we could do in-house and so like the number I was sort of thinking in my head was a little bit different than the number they were thinking but the key is that this wouldn't have worked If the sellers weren't like extremely understanding and aware that this business is not going to generate the same income that it did for them right because you need to make all these new hires and therefore the multiple I could pay had to be based on the earnings I could generate um and so I think a lot more about what is your buyer's ebitda or or like buyers discretionary earning that is a much more relevant point to me than what a seller's discretionary earning the problem is the sellers don't necessarily care about that right in this deal the sellers understood that point and negotiated in good faith around that point and that's why a deal is able to get done yeah yeah give us some numbers if you can on on revenue and Ste or whatever you feel comfortable sharing yeah it's it's in the ballpark of 2 million Revenue um so on the smaller end for sure of you know small business search deals so to speak and we can save 15 to 20 margins it's honestly hard to say because of the amount of Performing that happened right um but you know it's it's it's a it's a higher margin business than that hopefully but I'm not sure yet okay okay um well Acosta one of the things that I heard you say in the aforementioned um interview with Alex is that one of the the values that you thought you brought to your search um you were a generalist in private Equity so you didn't have particular industry experience but you had looked at a lot of Industries and you'd become a a quick study on Industries um what did you like tell us about the tree business uh in the tree industry and what you like about it and then and then take that to what you liked about this business you've already mentioned that you like that it was pruning Focus versus tree removal but um what else there must have been more too that you liked about it but the industry first what did you find when you when you looked under the hood yeah exactly on the industry level yeah the one of the key things about this industry is it it looks and feels a lot like HVAC Plumbing in that you've got really skilled people in the field um it's a little bit different than HVAC Plumbing because it's a little bit more Artistry driven like it's science and art right especially in pruning like a well pruned like 10 arborists could work on the same tree and it would come out looking 10 different ways and they could all be right and it's so that's like there's a little bit of artistry there um that was appealing to me because you know it just there's a there's a level of it's just like more of this like skilled Tradesman type of a field um where people take a lot of personal pride in like their gear they take a lot of personal pride in their practices and their techniques and what that meant to me was you can actually build a culture right like if you don't have people that take that kind of thing seriously it's hard to build culture around it and you know we're not an industry that is like churning guys at minimum wage right and there's a lot of contractor businesses that are like that that are pure manual labor and you know this is a physically taxing job right don't get me wrong for our cruise but I can in good faith tell people like hey if you start here you know in minimum wage I mean we are starting as higher than minimum wage but in that vicinity like over seven to ten years like you can double your pay right it's hard to make that statement in Commercial Landscaping right unless they actually move up into management whereas in in tree work you can move up that type of a pay scale just by becoming a skilled trades person within this field right and caring deeply about it and the practice of it so to me that meant like hey I can actually build an employee in small business culture that is focused on growth for both the business and for the individual and start to attract people who are excited about that growth right like I talk about to our team I talk about the idea of like hey I want people here who are viewing this as a career right and not a gig and don't get me wrong there's a ton of tree companies that are like pay by cash they pay on a day rate basis guys come in for a couple months they leave they get laid off in the winters like that's alive and well don't get me wrong but there's this sort of like different Echelon I think of like Professional Tree companies that are really building a really good place to work and because it's the skilled trade we can charge the prices of our clients required to allow us to make a good place to work and pay well and like we pay for medical we pay for dental we have a four percent 401K match like like I have better benefits here than I did on my PE firm you know what I mean like that like that to me felt like I could build something and it's not just a financial Endeavor of like hey can we get ebitda from X to 2X and then with like SBA leverage the math all works like that's all there in the background don't get me wrong and that's important as well but here I felt like okay this is like I can build something cool I can build something fun I can build like a place I want to be every day I can build a place that other people want to be every day um and I'm kind of rambly I know but like that that is inherent to the structure of the tree industry right like by the time somebody picks up the phone and calls an arborist they've already given up on their landscaper so they know they're going to have to pay for a skilled trade right very few of the clients who come to us they've self-qualified by the time they call us right that they know they're gonna have to pay a certain number for the level of skill that our guys bring to the table and that's structural to the tree industry and as a result I can actually invest in the team to get them to that skill level but let me ask you Costa um I've heard you say that there's it's a very mom-and-pop industry it's highly fragmented I think I heard you say in in Seattle alone which granted is kind of a mecca for the tree business but in Seattle alone there's like 50 tree businesses so and and many of those are not cultivating culture are not trying to give their people a place to have a career and grow there as you said they're just churning and burning people so I would imagine those people are with that it would be a very competitive business because it's so fragmented and because their a lot of your competition is just paying people in cash and burning through them so how are you which which makes you a more appealing place to work yes but also it anchors prices lower because and you don't want to compete on price so how did you reconcile that dynamic in the tree industry in Seattle yeah so that that that's definitely a part of it and there's way more than 50. there's like 50 I could find on Google Maps you know what I mean um and so for for that that's a little bit of function of the market you're in right so like the Seattle Market specifically is a really great market for tree work because you have this mix of clients that are pretty wealthy right because Seattle as a city is pretty wealthy we know when you're talking about homeowners and they actually care a lot about trees right like that's a cultural value in a city like Seattle that like the environment and the home landscape and sort of the urban canopy those are all kind of values held by not by everyone but in general it's a thing that like cities like Seattle and Portland care about a lot more than other cities in the country and so you have this mix of people like with a willingness to pay and an ability to pay that they're actually looking for like arborists they're looking for people with certifications they're looking for people that are using science-based recommendations for what to do with their trees and and honestly like the former owners of this business they did a really good job of cultivating a client base like that right they didn't chase the price competitive jobs because it's just not the client base you want to actually build this business around does that limit your ability to grow like yeah for sure right you can't grow as fast if you're trying to qualify your client base like that hmm that's okay you know what I mean like yeah I'm okay with that it's part of also why as an aside why this is such a fragmented industry right like there is a role up in the space called save a tree it doesn't strike me as the most roll-upable industry because it is real like it the barriers to entry are low it's pretty easy for somebody to set up at their new tree company um they can start with like pretty bad equipment and a really old chipper and then eventually get a decent chip truck and a good chipper but it's not that hard to get started it's really a function of like does your client base want that type of a tree service or are they going to you as a tree service because they're looking for professionals mm-hmm great um anything else about the industry that you liked or should we move on to what any more about Bloom bluma within the industry that you liked uh no I think that hits the big stuff yeah great great um so but while we're on the the point of roll-up ability so despite its fragmentation you you then are not going to be out there buying buying up your 50 competitors that's not necessarily um I'm sure there's some opportunities there but it's not it's not the obvious like charge forward Playbook right now I'm definitely open to it and I will look at them and I have looked at them it's a little bit more of like buy a phone number and a website right you're not buying a lot of assets and these types of deals for the smaller ones um and so unless you're going out and buying something pretty big it's hard to pay a multiple of cash flow for it because the vast majority of these are like an owner plus two employees right and the owner wants to retire and so in that scenario you're really buying a client book that you're hoping converts to you and you're probably hiring the two employees and you're maybe buying a truck right so like when you talk about that type of a thing it makes your what you really want to do is pay like almost for like lead generation like that's the way I would think about that um it's not really like buying a business so to speak now I think that could be a great strategy for us to you know it's hard to hire people I love the idea of sort of finding great small companies smaller than us and saying like hey like are you exhausted of the admin side of your business are you exhausted dealing with like workers comp every month and quarter or like do you just want to be a great arborist like we would love to have you right and like that's I would love to hire a crew at a time so to speak and pay that owner you know a fair share of the client base he's bringing or she's bringing to the table so I think that to me feels like a really cool powerful model that I haven't figured out how to do it yet right but I am open to that um but the straight up just like buy a business and have the owner leave I think is pretty tough in this industry unless it's quite large well your point about employees and the team I mean at in these really fragmented uh situations where Acquisitions might be tiny um it's just a way it's it's acquisition of of your tiny competitor is a euphemism for a hiring I mean you're basically just you're basically getting labor and that and that can be really valuable I mean it's a way to get it you know even if it's a team of two guys and each have seven years experience like that's a win it's awesome really hard to find two guys like that so but it just changes how you look at stuff right you're like you're not buying it for like the ebitda multiple leader like saying like hey are these guys good culture fits are they do they have good experience like there's a lot of different techniques in tree work that different people practice different ways like we need people who practice like our style of tree work just a little bit more on the industry itself so so hearing what you just said about Seattle and Portland as well and and having people who having the citizenry who they cares about the urban canopy is the tree business made up of people who love trees or because because I've always you know I remember as a kid when my dad you know hired an arborist uh to come over and you know chop down a tree in our yard you know I was like oh I don't I love that tree don't don't kill that tree and and you know Tree Huggers I mean the the pejorative for environmental people are people who love individual trees so there always has struck me in this industry like even if you're not a tree hugger there might be like a little bit of a nagging discomfort with the idea that you're out there hacking down beautiful trees even if they need to come down for all kinds of good reasons um so comment on that who the people who are actually doing this hacking and work in this industry are they bloodthirsty for trees do they actually love trees or all of the above like some yes some node all over across the board it's definitely all of the above there is a dynamic of there's an interesting Dynamic that there's one end of the industry that is sort of like PhD type people right like they can really study trees as an academic science um and they're the ones that are really progressing some of the like your knowledge around trees like like how do trees recover from wounds informs how you prune them right and so they're the ones doing studies on like tree like like trees are kind of like humans in that sense that they can kind of heal their own wounds um and so like for as an example like they used to say you should cut the branch all the way back to the trunk now they've learned that you should actually leave a couple inches off and that allows for better healing off the tree so like that starts coming from like PhD world within arborists right and then at the other end you've got the guys who are actually doing the work every day and so for a chunk of those guys it's a job and so for the guys that it's a job like a tree to be removed represented money right it's like pretty straightforward um but then there's this like big amount of people in between those two ends that are like hey like they love the job they need to make money they're practical about it but they find trees like intrinsically interesting and exciting to learn about they feel bad to see a really cool specimen tree go down even if it's for a good reason um so it ranges right and I think there's like there's an in like you kind of have to have like a deep respect for what trees are and like the fact that we can take a tree down that has been around for you know 50 years in like four hours is kind of a bummer right like it's not what I want to focus on as a business either um but like for me the way like my ideal setup as a business is we are able to prune a tree multiple times over its lifetime for a client and at some point that tree is no longer a good fit for where it is and so at that point we remove trees and so tree removal will always be a part of our business but it's not sort of the focus area right and I like it's it not only is it a great Revenue quality area like I think like it's not good for the business in general to focus on tree removal because it's all one-time Revenue but I think just on a values basis like I'm a Seattle kid also right like I like trees I don't want to be cutting down trees we don't have to um so there you know there's a balance there you strike with with your clients and understanding ultimately you are a service provider to the clients as well right mm-hmm a little bit more on the culture of this industry it's a it's a you had said I think I just referred to it a minute ago that it's a passion industry people um really the arborist really get into it they love it um and not just the PHD types but also the climbers and the in the pruners um and one of the things that was so um such a happy detail to hear in your earlier interview was that you were were expecting the the fact that you were an outsider and knew nothing about trees frankly um was going to be something that you know you had to you had to you would have to sell yourself to your to your to your new employees because you were an outsider and this is an industry where people are really committed to the work um and you found that in fact they were very open to you and they were eager to teach you and you were an eager student and so that was um kind of a non-issue um that do you think that that you just got lucky there or do you think that people in our in our shoes The Searchers um over are overly concerned about that because I too think about that and it makes me really nervous to buy into an industry particularly in Industry like you're describing where people are really passionate to be in this industry it's they see it as their life's work um and I've come in you know sort of opportunistically um uh yeah so so has it and a year later has it continued to be fine I mean the the answer to that question is yes like the guys have continued to be super welcoming and sort of supportive of my learning of the tree industry um I climbed a tree for the first time a couple weeks ago uh which was fun and the the guys were sort of teasing me as I did it but they were also supporting me and actually teaching me how to do it you know what I mean um so that was cool the that is cool yeah I was a little I have a sample size of one on this right so like who I could be wrong I think there's an element of like yep searches are probably a little bit too afraid of kind of being accepted but there is something industry or like business specific for me which is that it's a really young team right like I think the median age roughly is like 26. and so it's and it's also kind of a it's a physical it's a really physically labor-intensive job it's hard to do as you get older there are older folks for sure in the you know on cruise all over the city but the reality is I think having a younger crew especially as a younger new owner myself right I'm 29. um that helped a lot in terms of just yeah them being welcoming to me I think it would have been tougher frankly if we had like five if like half the team had been in the industry for 20 years and they were like 45 you know that much older than me I think it would it would have been harder for me to kind of enmesh in with the team yeah great I'm glad I asked because I do think that that was that that's a a big difference buying a team of 20 somethings versus 40 somethings um Coast up about the um you had said that the like the end product the end service that that your team delivers happily is is a really good one like you're really you guys your crews are really good at what they do um and that's actually not something I hear people talk about very much they'll look at the course research Google reviews and then they'll kind of do what they can but to to be able to really assess the actual competence in aggregate of the team and Crews that you're buying especially as an outsider again returning to that theme like is near impossible and you know because especially in this small business world as we all know currently the current market dynamics are such that there's so much demand for services you have a lot of not great business people in crews out there doing work and they don't they're not especially good at what they do but demand keeps them in business um so did you get lucky that you're you're your crews are so good at what they do and and um if not like is there any way you think that you can diligence this other than as I said looking at Google reviews and Yelp reviews but even those aren't going to be very helpful because the consumer might not really know be able to them themselves assess the quality of the work yeah that's a tough question um there's a large element of luck for sure um I think this is not something I recognized while I was doing diligence it's something that became clear to me after the fact but the fact that the two owners were still running the cruise every day um went a long way in terms of ensuring a certain level of quality and they very sincerely believe that quality was a competitive differentiator for them right so they had like a personal driver to have be a high quality like provider but they also understood just financially and strategically they needed to be high quality and they were in the field every day ensuring it was high quality so like the challenge for us now is to be able to maintain that quality without an owner on every crew and you know there's ways to do that and that's sort of part of our operational challenge that I feel good that we will be able to do but in terms of like coming into the business yes it was difficult that there was not this like middle manager layer and the owners were so involved flip side of that is like part of the reason they were so involved is because they are so fanatical about service quality right like they didn't want to delegate that to anybody else they wanted to be the end-all be-all of quality um so I mean look I I to be clear I still got lucky I had no ability to assess somebody's tree work right like I could have gone to a hundred of their jobs and still had no idea if these are high quality jobs or not um but I think that's that wasn't interesting in hindsight that's an interesting um Dynamic that like oh the fact that they never lifted themselves off the cruise and it is is a good indicator that the quality levels are high yeah well that's um that's um I guess a good Insight because I think for a lot of Searchers if they see that the seller is going out on the crew four days a week that's going to be a red flag like oh this is two this this owner's two in the business I can't and they'll walk away but um there's actually here's here's a reason why that could be a really good thing now the question is can you like actually systematize it and make it yeah exist outside of that owner that's a hard question but I feel confident that we can let's talk about change management a little bit um I've heard you uh talk about you know you you heard from everybody before you did your deal before you did your acquisition that you shouldn't change anything um and yet when you got in there you were you saw stuff that you were really just itching to improve as you saw it to change for the better uh and then and then but you were disciplined and recognized that oh you waited recognize that oh it was good that I didn't change that because here's the why that things were the way they are um so now 13 months in tell us tell us what you've changed what you've learned about change management when you felt comfortable and how you knew you were smart enough about your business to make changes just kind of open-ended about change yeah I mean I like when you think about these small business deals especially if you're using SBA financing so there's some risk involved on the debt side like your number one priority for the first couple years is to not break the business like full stop like yes we want to grow for sure but number one priority is don't screw it up and like actually figure out what's going on right and so to that end like yes have I tried to change things for sure and I have changed something successfully some unsuccessfully um but I just want to make sure that's clear up front that like making improvements in the business in year one just was not a priority relative to me just learning the business especially by the way in a seasonal business right where every season looks a little bit different um yeah that said the changes like I think the change that probably has been the most impactful that we were able to pull off reasonably well is moving from QuickBooks to a real CRM system um which has a number of benefits but primarily means that we're actually like we take payments online we take um we all of the contracts go out as an email not just as like a we we used to just give them a paper copy the estimate and then they would call us if they want to do the job or not whereas now they still get a paper copy I haven't changed that but every paper copy also gets typed up emailed to them with an automated three-day reminder right and so like the change that's a good example of a change because those are changes that don't really impact your service provision at all right it was a lot of change for the Office Team and like luckily the office team is me and one other person and she's super down to try these kinds of things and is really open to change which is amazing so it's just me and her figuring this out and like that's the kind of change that's a lot easier to implement and can be pretty high impact without a lot of potential negative repercussions on your service providers the guy's actually out in the field um and so like For Better or Worse even with that Edition we're still sort of parallel processing the old way and the new way we're like our work orders are still the handwritten copy that the estimator wrote up I haven't moved that to the print the emailed copy or like the typed up version um so they're still like we're slowly making those changes but I think like I've tried to focus changes around things that are less impactful on the cruise the one maybe major caveat to that is like if there's something that feels mandatory for lack of a better term like we never had safety meetings before um and so now we have weekly safety meetings now it took me several months to put that together and I needed to hire somebody to lead them because I just don't have like the subject matter expertise to do that um but that one felt strong like that was you know like that's the sleep at night risk in this business is somebody hurts themselves badly it's a really dangerous job and so like implementing safety meetings so now we have that once a week every Thursday morning um actually today we took four hours off to do aerial Rescue Training all all of the guys were just in a training session with some trainers I brought in um that I think is a change that I feel good about and felt mandatory you had talked in your interview about reference materials for customers getting getting some some suggestions on how they kind of maintain the work that your Crews have done so that they don't need to call you back out or their beautiful tree doesn't die prematurely or what have you have you done any of that stuff nope not at all um still on the list we now have an arborist who specializes in plant and tree Healthcare who is a new addition in December so that's something that like it's one of those that in theory I would do in practice it just wasn't going to happen I needed a hire for it and now he's sort of taken the lead on sort of the in between all over the tree pruning what is the healthcare services we can be providing for trees let's uh we're bumping up against time here Costa but I want to hear um I want to hear just kind of about I have a bunch of questions about your new life uh comparing it to PE comparing it to your expectations but before that let's let's ask from a guy who is comes from private equity and has seen um kind of the magic of financial engineering uh your thought on hold codes um because you're still you're only 13 months into this business but um of course they're talked about all over Twitter you see it I see it we know we you know Mutual mutual people that are doing it um you uh do you see for yourself buying outside of this industry if you get to the point where you can kind of step out a little bit of your day-to-day or do you see going deeper into your industry um you personally and then abstract out and maybe give kind of a general General thought on it yeah so for me personally I'm not sure I'm gonna have the like energy to do this again frankly uh maybe if you buy something bigger to our earlier conversation but like this is taking 110 of my just emotional energy social like all of it right like this is It's a real grind and so and not in a bad way right I I'm excited about it but it that is what it is I'm not sure I'm gonna have what it takes to do it again necessarily I I maybe that I'll feel differently in in the future but right now when I'm like 13 months in and a lot of months to go it doesn't it just I can't imagine buying another business in a different field um I do love investing right and investing as a craft I really enjoyed and so I would hope over time to free up hours in my week to go invest in other businesses not as a primary and not as the active you know sponsor so to speak but like I would love to back other Searchers I would love to really back searches in the tree space right because it's one industry I know pretty well now um and so in my mind there's a I would love to sort of take on more and more of an investing role over time and so that is a form of hold go right like one of the things that's attractive about being a hold Co is you get to be like the capital allocator um sort of sitting above all the businesses and deciding where should the capital best go I have a hard time imagining there being like another business that I'm running alongside this one that I'm sort of allocating Capital between but I like this is a pretty low Capital requirement business so there will become a point where it is throwing off cash that I will want to allocate elsewhere just because the business won't need it right like we have trucks but other than that you don't need a lot of capital to go into the business to grow it is more of a people business um so I do look forward to basically being able to build that type of capital allocator role which is sort of allocating that that cash flow into other Investments more broadly like hold codes are like an awesome structure right they're I mean they're not new right they've been around since forever and they're kind of like they're getting rebranded and kind of coming back into the the whatever the Twitter sphere um I think it's just a it is harder than it looks is probably the obvious thing to say and I think the ah I think getting it right is hard to Define right like it is easier to get a whole code right financially than it probably is in terms of like the lifestyle you want or the social life you want or everything else you want like I don't doubt that a ton of the people in the SMB ETA Community could pull it off I'm not necessarily sure it's like the right answer for them in their life or their priorities um and like this is different for everybody um but like for I know for myself right like I probably could have made more money if I stayed in PE that isn't going to be the right lifestyle for me long term or they'll like write life priorities for me long term so in the same way like yes I could build a hold Co eventually but like doing it for a financial outcome is not going to be sufficiently interesting great answer and um just going back to what you just touched on you you probably could have made more if you'd say it in PE but it's close um well if I could have made it in PE for more than 20 years I definitively would have made more in PE I think um I think the odds of me making it another 20 years in PE were very low so I think the odds are better in small business mm-hmm and aside from the everything like up to the acquisition itself all of your your ability to diligence and quickly learn Industries and understand deals has being all of your private Equity experience served you post acquisition and if so how as not not super directly but I think the biggest area of it is and I've spoken to a lot of other small business owners about this there's this constant like undercut of anxiety when you run and own your business that is like I can't tell if this is going well or not right like I think it's going okay but I can't really tell and I think what's nice about the private Equity background is it kind of gave me a tool kit to really build like kpi dashboards to really understand the financials so that I'm really like on a weekly and monthly basis able to objectively assess the business and see how it's going and for me like that has been a huge Advantage where the that kind of like vague anxiety I can sort of Define as like how many weeks of backlog do we have what is our weekly like margin profile looking like how what is our week to week Revenue looking like and if I can see those be consistent like I can appropriately tell myself not to be anxious about it um I'm just I just find that curious kosa because it's not a complex business um and I just wonder if that anxiety is just because you're still kind of getting the feel for having all of this on your shoulders as opposed to there being some you know elusive details to the business that you still don't fully understand this is a theme with you because I'm feeling like you just don't understand things to their to their to their absolute fullest but I mean you know yeah you look at your backlog you know are your employees happy are your margins where they should be I know I'm oversimplifying but it is a simple business and and just making sure you know you got enough in your pipeline coming and no one's quitting on you uh and your equipment it's good working order it would seem that you could you know rest easy enough right um but the problem is like how do you know if your backlog is consistent how do you know if enough leads are coming in there's you have to measure it and like there were no ways of measuring it before closing and most of these businesses have no way and so like if you talk to small business owners like out the gate like Searchers turned operators like I think you'd hear pretty consistently or I'm saying like when I've had these conversations I've heard consistently like they're watching the bank account yeah they're watching the bank statement go up and down every day and they're not entirely sure why and they're not entirely able to like unpack why and it's really easy to slip like AR days like account receivable days might go from like 14 to 60 because there was some system or process for that that you just didn't quite pick up in the transmission and like you're just not seeing your cash convert and you don't really know why and you don't feel good about it right and that's the kind of like cash in the bank account is the very very very last output of a ton of systems that come before that and so the further you can kind of get analytical up the chain of the business the much more easily you can kind of quell the anxiety of watching your bank account go up and down everything and I think that like a lot of small business owners I talk to they they struggle to specify why their cash is moving up and down every day and you feel like you're you're closer to having a complete answer for your own business but maybe still only 90 of the way there and to be clear I'm like way worse than a bunch of other stuff right like I'm not as good of a like I'm still working on learning how to be an organizational leader I'm still working on how to like build organizational values and all and like I hate documenting processes like that stuff I've had really like I that I find it's just like Sops like not interesting that's stuff I need to get better at what I am good at because of PE is being able to really drill down like what are our numbers what are our kpis and so like are things going well or not a couple more questions for you Kosta um just talking about kind of the anxiety and what you've heard from other Searchers who got into businesses and were watching their bank balance go up and down and not being quite sure why and just um kind of this this this just whole kind of emotional lifestyle change um have you had you read Zeller I think we both know like uh and he talks about the fetal position moment that many new new business small business owners will kind of inevitably have in year One have you had a fetal position uh bathroom floor at 2 A.M uh moment yet any any any panic attacks or is it just persistent low-grade anxiety at all times I wouldn't go like fetal position in the bathroom at 2AM bad I would say there are like they have been plenty of like calls to my SMB peer group of like yo this was a week let's can we talk about it you know what I mean um that I mean honestly for me like having an asset like a small business peer group of other owners like I think if I didn't have that I would have had a lot of those 2 A.M nights and um I'd like to distill this we've we've touched on it a number of places but I wanted to ask you what muscles you think you've built in these last 13 months and what muscles have atrophy hmm it's a good question um but what immediately comes to mind I think I've really built a good muscle around patience coming from New York City PE that is not like a skill I had per se nor was it rewarded right like being patient was not really a skill that was rewarded I think I've learned to be a lot more patient and let the business come to me to some extent uh and not try to like force it in a direction I wanted to go in because it's just it's a loose collection of people like it's not my willpower that determines whether or not this business is successful it's like whether or not I can paint a vision that's sufficiently compelling and interesting to the people that work with me um and doing that requires patients allowing them to get on board requires patients um and also just like feeling successful in this type of a role requires patience because it just takes longer um and the like one of the big differences between this and PE is in PE you do these like major deal Sprints that are 60 70 80 100 hour weeks and then the deal closes and you like did the thing and now you've been you've completed an accomplishment and now you chill for a couple weeks then you do it again right like that's what PE lifestyle looks like um running a small business is a lot of really little small days like a lot of little problems you're dealing with day in day out and then you look at you look back on like a couple months of that and you're like oh wow we made some real progress here but you almost don't notice the progress as it's happening right and so like that that requires a sort of different type of patient because you don't have these like big moments of like yes like we did it we got the deal done you know um so that it just requires a slightly different appreciation um in terms of atrophying like I don't think I have the same um it's like the other side of that coin right like I don't think I have that same uh fire that is required in PE like I had no problem at like 3 A.M sort of firing up the model and really doing like hard work from like three to six A.M that I don't I don't have that now like I honestly I just I can't do that anymore like I'm trying to build a life that's sustainable and enjoyable and so it's not like I don't feel bad about losing that muscle but there was a certain amount of like Just Pure Drive and grind it out hustle that I think like it's very unique to New York City Style private equity and normalized there that I I think that muscle has atrophied mm-hmm great and just overall 13 months in how would you reflect last question how would you just reflect on the whole thing I mean we've touched on so many angles of it but just like you know distill it for us this was a giant life decision professional life decision for you um is it kind of honestly let's do it a scale of one to ten uh of 10 being you know this is everything that you'd hope for and more what would you give it and why um I'd give it a solid like seven which is and it has been really fulfilling in some ways I didn't expect it to be it's been primarily like I think the like business side of it like the pure numbers and the financials and all that I'm probably more like a four or five like I'm chugging along we're doing a it's going well but not like it's not I'm not like knocking it out of the park and I'm also not failing uh it's going fine right what I've found really fulfilling and I've been really happy about is like the seeing people on our team improve is really fulfilling and like watching them actually improve and being able to give them a raise because they deserve it and like they've become more productive for us and they're higher like they're doing better quality work like that's awesome to watch and witness them go through that um kind of being involved in the industry building like a whole new peer Network outside of my business alone right like I joined the board of directors of our regional chapter of the international Society of Arbor culture I'm getting to work and talk to some like really cool arborists who have been in the space for 20 or 30 years like these are just conversations I wasn't having 13 months ago and it's I'm having a lot of fun doing that and also just like being back in my hometown I feel much more like a member of the community here than I ever did before right like we are touching you know some 900 clients a year that are homeowners all around the Seattle the greater Seattle area like we're working on like the physical landscape of our city every day um that's yeah it's been more fulfilling than I thought it was going to be like I didn't quite realize how much I would enjoy that like I mean I've gone to two freaking uh Seattle City council meetings and given public comments on like changes to the tree code that they're considering like who does that right like I'm in that like Parks and Rec world now but it's like yeah I feel like I have you know a vested interest in our city now right I feel like I have I'm not a homeowner here I imagine that maybe this is what it feels like if you're home owner in a city I'm not a but like I I feel like I have a vested interest here I have Roots here um and building a really good small business is an important part of the fabric of Seattle right in many ways just in terms of the people of the business and the trees and the houses we work on um yeah so anyways but like I'm not really fun yeah well I love it because you're kind of exhibit a of this um this kind of cliche about how you know High Finance Masters of the Universe you know move things around in the CH the world that is their chessboard and like really are completely disconnected without how it affects like everyday life um I know that's a a really cruel characterization but you know you you hear it a lot it's in movies it's everywhere um meanwhile it but now you're you know kind of living down here you know on on planet Earth running a real small business in a real city um where things um you know it feels maybe less like some giant intellectual exercise and more like you know real people real City and uh real day-to-day stuff I I actually I loved that and Before I Let You Go custom I just wanted to ask you about the industry because we you mentioned it a little bit earlier to me and it sounds like happily you you really like your industry a lot um and you're meeting a lot of interesting people um is there any advice there about uh thinking about like doing some diligence just on the industry is it an industry that you want to play in for the next 10 years or or what what would you say to people who are searching well the one thing is like you don't generally want to buy an industry that is purely passion driven right like restaurants are often a function of pure passion and like it like the passion is so high that it offsets margins like people will take margins lower because they want to do it so badly yeah you don't really want that that's like too much right that's a tough industry to live in this is awesome because you've got really passionate people who understand like this is a profession that they need to make money and that they need to get paid for the skill set that they have developed then you get paid for the danger they take um so this is that kind of in between which is fun which is like people are passionate about it but are true Professionals in every sensible word and like um and so like when you're in the diligence process I think going if you can go to one of the industry conferences if you can use your network like I suppose to three different tree company owners during my delicious process right just through like asking enough people and bugging them about if they know anybody um just those conversations kind of illuminate so much about what actually happens in the industry um and you pretty quickly will start to figure out like hey like is this something I'm excited to be a part of or potentially 20 30 years right like it's it's a choice yeah coachtub what is the best way people want to reach out how do you prefer Twitter LinkedIn what uh I think LinkedIn or email is best um my email or it's my initials KD at blumatree.com um I'm also on LinkedIn you know I'm active on LinkedIn so feel free to reach out on that as well okay great and so just to say again you'll for anybody who's going to SM bash you will be there on stage at the end of April and I will see you there in person thank you very much for coming on Costa this has been a fascinating conversation I I knew it would be uh you're you're so fun to always fun to get your your thoughts on things so a really fun conversation for me thanks a lot appreciate it will I enjoyed it I'll see you in Austin 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
Kaustubh Deo bought a $2m tree business in Seattle just over a year ago. Kaustubh comes from New York private equity, and we talk about the big differences between that world and this one. You'll learn what it feels like to own a business if you never have. So even if you are not coming from private equity, the picture that Kaustub paints of his life today as a business owner will be valuable to understanding whether this path is for you. And we talk a lot about the tree business, and contrast it with the other trades businesses like HVAC, plumbing, landscaping. ❤️ Enjoy this interview? SUBSCRIBE for more: https://bit.ly/42hLnN0 00:00. Kaustubh’s background 08:04. Explaining private equity 12:45. Kaustubh begins searching 20:03. His criteria for search 23:06. Kaustubh buys a tree service business 30:13. Explaining the tree service industry 34:31. Competition in Seattle 37:50. Possibility for rollups 44:20. Being an outsider in the tree industry 50:55. Change Management 56:09. His thoughts on Holdcos 01:00:35. How he measures success for his business 01:06:07. Personal growth as a small business owner 01:09:02. Reflecting on 13 months in business 01:12:50. His advice for searchers 01:15:30. END CONNECT with the Acquiring Minds podcast, socials, etc. 🎧 Podcast on Spotify: https://open.spotify.com/show/2vZrl0u2wMHPEz1EZFw2dC 🎧 Podcast on Apple: https://podcasts.apple.com/us/podcast/acquiring-minds/id1569715379 👉 Get notified of new interviews: https://acquiringminds.co 👉 Follow host Will Smith on Twitter: https://twitter.com/whentheresawill 👉 Connect with host Will Smith on LinkedIn: https://www.linkedin.com/in/willsmithsf/ ABOUT Acquiring Minds Acquiring Minds is a podcast about buying businesses. Acquiring an existing business is an awesome opportunity for many entrepreneurs, and host Will Smith talks to the people who do it. New episodes 2x per week. #business #enterpreneur #smallbusinessowner