Josh Meadow, welcome to Acquiring Minds. Thanks. I'm excited to be here. Josh, we're going to cover a lot of ground today. Reviewing our pre-call, there were really good takeaways from each stage of your journey, so I want to make sure we hit all of those. But, let's start by telling where you are today. Telling people where you are today, so they understand where this story is headed and how exciting it is and has become. So, first question, Josh, tell us where Mercury, your business, is right now. Yeah, so today we're a healthcare logistics company and we're tech-enabled. So, what we do is we offer every type of shipping that a healthcare company might use. We kind of break that up into three markets: medical devices, you can think MRI machines or machines for testing blood. We do diagnostic kits, different types of kits that test if somebody has cancer. We did a lot of COVID testing. And then we do life science research. That's really early stage biotechs who are trying to do research. We also do clinical trials and then eventually the pharmaceutical production. What we do is we offer that globally. We offer every single type of shipping that they might need. We offer dedicated teams who give individual attention. We call them squads. I was in the military previously, so we use some military terms. And we have software that our customers can log into. They can book any type of shipment. They can track their shipments. And that's kind of where we're at today. Great. And And how about a sense of size, potential growth, because my impression is you kind of find yourself in the middle of what is kind of a high-growth startup. Yeah, it's interesting. We've definitely changed the company a lot over time, too. Just to give you a bit of background, the company was founded in 1984. And originally we were serving law firms. So, Peter Salisbury, who started Mercury, I think this is kind of a common story through a lot of small businesses. He was running the mail room of one of the big Boston law firms. And he had this idea he could make a mail room for all of the law firms. That's how Mercury started. And what law firms needed was tracking of their packages or their documents that they were shipping most often. They would ship these contracts. If there was a 5:00 meeting and a bunch of attorneys were meeting to negotiate a contract, it had to be there. So, we started from the beginning 24/7 tracking every single package, knowing where it was supposed to be. If it wasn't where it was supposed to be, we'd reach out to the carrier, try and resolve the problem, and then let our customer know. Over time, obviously, law firms started shipping a lot less. It was DocuSign and email. And that's when we pivoted because the company's based in Boston and Cambridge, right across the river, is where a lot of the biotech world is. We switched over to that healthcare life science about 5 to 10 years ago. And now we're really fully just a healthcare logistics company. And as we made that transition, the company's really fast-growing. About 2 years ago, we decided to be just healthcare life science. We've more than doubled there. We're up to 40 to 50 million revenue now. And we're really focused on trying to become a much larger company. So, I've brought in a leadership team. I've brought in a lot of people onto onto our team who have really stretch goals to grow a business. And ultimately, our plan is to try and become a public company. I did a self-funded search. I did it in a way that I could run the company for 10 to 20 years. So, as long as it takes, we'll we'll do that to get there. Awesome. Thank you for that, Josh. Well, we're going to return to a lot of those details over the course of this conversation. But headline, 40 to 50 million dollars in revenue today, and but with kind of the sense of you're just getting started. You have this leadership team and you have going public sometime in the future as a goal. So, like I said, really fast-growing kind of startup-ish culture, understanding that the business was actually founded in 1984. So, so really a really an exciting and pretty unusual um of search. We're going to again keep We're going to return to this and and go deeper. But let's now, for your own story, Josh, start at the beginning as we usually do. Some background on Josh Meadow, please. Uh yes, so I was uh let's see, I'm from the Midwest. I was born in Wisconsin. I lived in Minnesota. I grew up in Ohio. Um I went to West Point for college. I was an army officer for just over 5 years. I was an infantry officer in the army. I loved that job. I had a lot of fun. Uh I don't know if I'll ever have a job as fun as being a infantry platoon leader in the army. It's just a great time. Um Why is that so fun, Josh? Uh you get to lead people and uh one of the reasons, one of the things I really liked about being an infantry officer in particular in in the military is that you don't really have equipment. Uh everything else in the military, you've got tanks or helicopters and you're really focused around that equipment, but with infantry, it's just people, right? You just have 40 people and it's all about leadership. I was fascinated by seeing how one unit could be so much better than another with the same type of people who went through the same training and it's just the leaders in that organization. Um and so I loved doing that hands-on, you know, leading a 40-person team uh when I was 23. It's a great opportunity and I did that for about 5 years uh in a couple different roles. Um and then my next role in the military, I would have been on a staff. Um and I really didn't want to do that. The military has like leadership roles and staff roles and staff just wasn't for me. Uh so I got out of the military, went to business school. So I I moved to Boston with the Harvard Business School. Uh when I started there, I thought I was going to start a company. I really wanted to start a robotics company. I was fascinated by robots. Um and I spent my during my first year, I did an in-school internship to kind of learn about that. Um then I kind of my friends and I were going to try and start a company. We were going to start a robotics company. We thought about that for a while and decided not to pursue that. Um then I did a summer internship. Why did you decide against robotics in starting something? Yeah, um you know, we just we really didn't know what we were doing. Uh our idea, we were going to try and create like a swarm of robots. So we were trying to think about what are like the use cases for that and we decided we came up with lawn mowing and so we were like, you know, we can make this swarm of robots and then it's more efficient, you know, a crew could just drop off a swarm at one yard and drive up to another and drop off another swarm and they'll do their thing and then come back and grab them. Um but we just had no idea what we were doing. We didn't know how to start a company, we didn't know how to raise money, we didn't know who would do what. Um none of us really Right, but you started thinking about landscaping and that got you interested in search. Yeah, and funny enough my first LOI was a landscaping company actually. There you go. There you go. Yeah. Uh so then yeah, I I didn't really didn't know what I wanted to do. Um So I did a summer internship at Amazon as a product manager. Learned that I really love technology, but I I didn't want to be at a big company. I felt like I was in the military again. I was in this giant organization. Um So then yeah, my second year of business school I kind of learned about search and that's how I got into it. And and just going back to you said you loved tech, you had this idea for robotics, you were drawn to robotics. Was your degree at West Point in something technical? Uh no, I did uh international relations and Arabic. So there you go, humanities. Okay. All right. Uh but you are kind of would you say engineering minded? Um I just kind of learn what I need. I'm very detail oriented and I love getting into details of how things work. Um and I love kind of learning. I'm I'm very much a generalist. I know like a little bit about everything. All right. So your second year at HBS and you learn about search from taking the class from how? Yeah, uh taking the class and I had no idea what it was going to be. I just knew I knew nothing about finance. I'd never seen before I started business school, I never I didn't even know what like a public versus a private company was. I never seen uh any sort of financial statements and so I was like, great, I'll just take all of the finance classes and I saw this class called financial management of small firms and I thought, sure, I'll learn more about finance. Um and then I took that class, that's the Rick and Roy's search class and that's where I learned about search. I started talking to to who've done it um and I realized that was exactly what I wanted to do. I could jump into running a company. I didn't have to come up with an idea. Like I I would get to kind of take something that was existing and grow it, uh, which I think I'm I'm really fit what my long-term goals were. Then I dug into funded versus self-funded search. I really explored that really deeply. Um, and decided self-funded. per- perfect segue. So, tell us about the analysis of of traditional versus self-funded. Yeah, a lot of that for me was one of the things I wanted to do was run an organization for a long time. So, one of the things I disliked in the military was you'd be in charge of an organization for like 12 to 18 months. And by the end of that, it would be really good. You'd be like, I've got my team, I've built my culture, and then you you'd have to move on to something else. And when I learned about self-funded and I could run a company for 10 or 20 years, it's like this is perfect. Um, I can just keep doing what I like doing, um, for as long as I want. I also just talked to a lot of searchers, and there were a few self-funded searchers I talked to who were a couple years ahead of me. They were running companies already, and they were just like the smartest people I ever met, and I was like, whatever these guys did, I'm I'm just going to copy. Mhm. Interesting. And in the idea that you wanted to run something for 10 or 20 years, you know, I'm I'm um that might be a little bit uh counterintuitive from the little that I know you from these first just few minutes, but um you seem like somebody like you said you're a generalist, so you you generals kind of by definition don't go deep deep deep into something. They, you know, they they kind of bounce around. Uh, and I would consider myself that as well, by the way, so not I'm I'm certainly not disparaging it. Um, but it sounds like uh and you have these kind of varied experiences. I know you said you didn't like being moved around in the military, but still a tend to a vision to do something for 10 or 20 years. Few people, uh, want to do that, let alone in their 20s say, "I want to do something for the next 10 or 20 years." So, elaborate, please. Yeah, I think, uh, one of my personal values I like challenging myself. I like doing difficult things. And I could see how as you grow a company you just hit all of these different challenges. The challenges of a 40-person company and then a 100-person company and then a 200-person company. And so I like taking those on and that's one of the things that excites me is that as we grow there'll be new problems to solve. And yeah, I really enjoy that. Yeah, exactly. When I bought the company we were not very growthy, right? We kind of had done the same thing for a long time. But one of the things we did was just kind of redefine who we were. We had become a healthcare logistics company and we'd been that for a while, but nobody knew that and recognized that. And so that was one of the first big changes is just realizing like hey healthcare life science, that's that's actually what we should do and we should just do that. Another thing too was we had been a technology company for a long time. When I showed up we had one engineer. Literally our website and our software was on a closet and a server on like the second floor of our building. But we just never had thought about ourselves as a technology company even though our customers logged into our software every day, they booked and tracked their shipments, and then we had our own software that we used to manage them. We just never saw those two things about the company. And that took years to figure out. It wasn't like I came in day one and figured it out. It It was really not even me figuring it out. It was our existing team, promoted up the best people. I've always brought in summer interns. So we've had some really great interns every summer who've come in and done analysis. Well, Josh, don't jump ahead. We're going to I'm going to we're going to give that a lot of time. So let me let me let me interrupt you there. But I just want to circle back to the point I was kind of trying to make was yes, this company is now growthy, but like when you considered buying a landscaping business, your first attempt or maybe it was your second, did you envision that that would get you to a a that could be 100, 200 more people. Um Jim Sharp's been a great mentor of mine and he always gave me the advice that the uh the magic of search is the entrepreneur coming in and changing things. Um so I'd always thought that kind of no no matter what I buy, I'm going to change it into what I want it to be and that kind of goes along with a 10 to 20 year plan. If you do a funded search and you have five years, it's really tough to change a landscaping company into something really fast growing and exciting. But over 10 to 20 years, you can make it whatever you want. Mhm. So you were whatever business you bought, you were going to be on the lookout proactively searching for that lever to pull to potentially even pivot the entire business model to hit upon some kind of growth strategy. So so Mercury, it's hap it's happened, but it wasn't by accident. You were going to you were going to look for something like that in whatever business you bought, even if it was kind of a sleepy landscaping business. Yeah, exactly. My plan was never to distribute our profits. It was to keep it in the company and find a way to use that. And if we could, you know, just go along the path the company was going on to grow, great. If we had to radically pivot, um great, too. But that was always my plan. And I think that just goes along with that 10 to 20 year outlook. Mhm. Well, for a guy who didn't know what going public meant and now that and you started searching for a business that you kind of assume or think that you'll you'll take through that milestone, um you move fast. Okay. Um All right. So back to your decision to do self-funded, uh take us into the process of actually searching. Yeah, um I ran a very scrappy search. Uh I had no money. So uh after I graduated, I uh my wife was working uh in Boston, so we stayed in Boston. Um my parents actually moved here a couple years ago. Their landlord found out that the basement unit of the apartment complex they live in was available, so we like literally moved into my parents' basement, which is great. I got to like go upstairs and grab their food all the time. Um I had no money, so uh we lived a very frugal life. Um and I could talk more about that. Um, but the way I started my search was on the uh brokered side. I thought, you know, I really don't know much. Um, so I I set up my search entity. Um, I started talking to brokers. You know, I reached out through uh BizBuySell, and then I kind of started Googling. Then I found the International Business Brokers Association. Uh, then I taught myself how to web scrape. I web scraped their website, so I had this Excel of every single broker and their email and phone number. I started reaching out to them. Uh, I realized that wasn't the most efficient, so I started getting some interns. Um, I found great success with interns. I really enjoyed having interns. Um, so I always had um some college students as interns throughout the whole time. Taught them how to reach out to brokers. Uh, taught them to sign NDAs. I basically said, "Bring me in when you've got a an offer that you've made that uh might go somewhere, or if there's a call with an owner. Other than that, you know, I kind of taught you guys what to do, and you can run with it." Uh, Josh, let me pause you there, cuz this is going to be really interesting. The So, using a team of interns is actually there's a playbook for that, and particularly on the traditional in traditional search funds that happens a lot. I think it is kind of officially part of the playbook. Um, were you following that part of the playbook of traditional search funds, or did you do your own kind of thing and figure it out as you went? Uh, yeah, I figured out as I went. I I was working from home. I didn't have money for an office, so we were fully remote. And this was in 2018, that was very uncommon. Um, so I had all these fully remote interns. You know, basically I went down this website, internships.com. Um, I think in every way as a searcher, you want to present yourself as an individual entrepreneur, except for when you're trying to hire interns. When you're trying to hire interns, you really want to present yourself as a startup private equity firm. It's much more exciting for them. Mhm. Um, so I presented us as a startup private equity firm looking for analysts. Um, tons of applicants. Um, one of the things yeah, there just a a huge amount of applicants, a lot of interest in that role. So, I had all these interns, um, the whole time. And yeah, what's been great too is I taught them a lot, and I've followed up with some of them and they have these great like investment banking jobs after they graduated college. So, I feel really good that they got something out of it, too. Yeah. And Josh, this this um point about kind of, you know, presenting to interns as a startup private equity fund when in fact, you know, you're a lone guy, you know, eating ramen in the basement unit of the you know, of this apartment building with no money. Um It it and and yet they you do teach them something and they do go on to bigger things. That that seems like there's maybe a disconnect there. How how were you so confident that you could really give them an experience worth their time? What Yeah, I I would be daunted to to take on five or 10 people and say, you know, this is really going to be great for you. I'm going to further your career knowing that I'm just, you know, me and my office, my my personal office. Um yeah, so. Yeah, I started by doing it myself. That's why. I reached out to the brokers. I talked to them. I I saw what that role is. You review sims, you make offers, you talk to brokers. That's when I realized this actually has a lot of value for somebody. Um it particularly if you think about like the entry-level jobs they'll have right after they graduate. This is like giving them much more responsibility. So, once I learned how to do it and then I thought, okay, what I'm going to do is I'm going to teach them and then I'm just going to release them. Uh I think a lot of people are very hesitant to give their interns a lot of autonomy. I literally had interns negotiating uh LOIs that I never even seen and I just said, you know, bring me the good ones. Ooh ooh okay. And did you teach them any financial modeling? I mean, were they doing running spreadsheets? I did, yeah. I taught them uh all the basics. Um I kind of started really high level. Here's what we're doing. Here's the the market that we're playing in. Um and then yeah, I I spent a lot of time training them. One of the things that made that efficient was that I spent a lot of time training my first group of interns, but then the uh some would stay on for longer than others and they they train the next group. Um so, it became a kind of system uh that was less dependent on me. Yeah. And how long would the training be just just to get a sense of scope? How many hours of training would would would your interns get from you when this first batch of interns? The first batch uh they got a lot, you know, the their first week they probably had like two days were fully spent with me. Um, and then we did these Friday we would do business school cases, we'd review all the sims that they found and all the offers they were making. Um, and over time that got less and less of my time, but it first it was I was a significant amount of my time. Mhm. So, they're literally making offers on your behalf, LOIs. And and are you I mean and you're not even you're not even giving the stamp of approval to an offer. You say only only engage me, only bring me in if you get yes to a a yes to an LOI. Yeah, or you think we're really close to signing an LOI, um, or if there's a call with an owner. It's like if there's a call with an owner, I'll be on it. Everything else, you guys have got. And on an LOI, like so you just gave them really well-defined parameters as to what uh uh uh uh you know, the strike price was for a deal, and then you'd tell them, you know, offer the asking or offer 90% of the asking or like just give us a taste of what these parameters look like. I mean, this is really interesting that you could empower others to do this. Yeah, it was the standard search criteria, no customer concentration, uh not cyclical, not seasonal, about the right size, about the right multiple, with a large seller's note, um, escrow, asset purchase, all that. So, I just taught them the standard criteria. Um, it worked really well. My first uh LOI was it came in from one of the interns. It was a landscaping company uh about five months into when I started searching. Mhm. Mhm. And and circling going a little bit further back, the the outreach, so the scraping and the cold outreach to brokers, they were also doing this piece. Uh yeah, I iterated on that a lot, just like I iterated on everything in my search. At first I would reach out to the brokers uh through email, then I found that they just weren't as responsive to email. So, what I taught the interns to do was you know, I kind of broke up the Excel spreadsheet. Here's your 100 brokers. I said go to their website and look at what companies they have listed. Find one of those and call them. Call them up, explain who we are, ask about that company, and then try and pivot to what else they have. Hey, do you have any other deals? Anything coming online soon? I found that was really effective. I found emailing brokers was just never effective, but calling them worked really well. Wow. This is quite a quite a an internship program. And and have you in subsequently compared what you built in this internship program to the traditional search fund style internship program? I wonder how much how much intersection there is there. I'm not sure. I suspect that um I I suspect that they do roughly similar tasks. I think I gave mine a lot more autonomy than they give theirs though. Um Yeah. I mean, I've never heard that interns are actually submitting or even coming close to submitting LOIs on behalf of the searcher behalf of the searcher. Fascinating. They're really smart kids. Like people underestimate how intelligent these college students are, but they're really smart and motivated. And and you used again internships.com and and you just took and so there's applicants from all over the country or world even? Exactly. Yeah, because I was having everybody remote they ended up being all over. There were a couple in Boston and we just like meet up at a Chipotle for lunch every now and then. Mhm. Mhm. And then at the And how many interns in total did you ultimately work with? Uh it's hard to say. I typically had three to six at a time. Summers were a lot easier. During the year it's much harder to find interns. So, I kind of accepted that I had some that were part-time during the year. Um not sure exactly how many I had. 15 maybe? Uh probably more than that. Probably in the 20 to 30 range. Oh, wow. Okay. And and managing 20 or to 30 Now, they're not all at the same time, but still like managing these folks didn't undercut the the additional time that you got I I I guess not. You just as you keep saying you give them so much autonomy that you really didn't need to manage them. Yeah, by the end, you know, we would just do like a 1-hour meeting on Friday. Um, but at first I spent a lot of time training them, but once they were training each other and the system was really running, it's about an hour or so a week. Hm. It's amazing, Josh. It's really cool. Um, and then what criteria were you were you I mean, you've already said the kind of search criteria, but what about geography? Were you were you looking to move anywhere? Yeah, move anywhere. Um, and at first I started saying any industry. I was like, "Oh, you know, whatever the industry is, I'll kind of pivot into what I want." Over time I got much more narrow. Um, but at first I was open to anything. What did you narrow down? What what industries were you open to before that you eventually disqualified? Yeah, by the end I was just looking for a unique business. I'd talked to a hundreds of companies in every industry you can imagine, and I was just looking for something different. Um, and that that was actually what my criteria was by the end. I was like, "If I've seen like three of these before, Why? Why different? Why is that so important to you? Uh, one it's like one of my personal values. I'm I like being different. Uh, I figured that uh company that was unique uh would have some sort of great niche. Um, I just I I always think that if it's a one of whatever, there's just more competitors, people know about it. Uh, when you find that this is the only company in the US that does something, that's seems like a great opportunity. Sure. One of one versus one of N, I guess. Um, okay. All right. So, you're doing brokerage search. At first, yeah. with these interns at first. So, take us through cuz I know it evolves. Yeah, so I did that, signed up my first LOI. Um, I dug into that. It was just uh you know, a lot of what the broker presented wasn't was kind of flowery and not actually the truth. Um, so in my first month after signing the LOI, I did my own due diligence. I found a lot of problems. Um, it was just more project-based than it seemed. Um, I also decided that wasn't an industry I wanted to be in because there're just so many similar ones, you know, that I would that was like a one of you know, a thousand. Um so I broke that LOI. Uh everybody gave me the advice to switch to proprietary, but I was pretty stubborn. So I stuck with brokered. Um I started different. Yeah, exactly. I did a little bit of proprietary, but not that much. Um uh so I stuck with brokered. I signed another brokered LOI. Um again, I dug was that? Uh it was a printing company. It was in an area I really wanted to live. Um one of the problems there were two owners and um I signed an LOI, so I went out to visit them. My typical plan was I'd only go visit you if you were within driving distance or after we signed an LOI. I just didn't have the money to do that. Um so I went out and visited them and I spent the day shadowing them. Two owners and they did everything themselves. Every time we were talking, they were like grabbing the phone. We went around their plant, they corrected everybody. It was like this isn't a company, this is just the two of them. There's no way I could replace that. Mhm. Um so then I broke that and I was finally convinced to go proprietary. Great. You know, it's interesting, Josh, a lot of people go in the other direction. They they start proprietary and find that it's just not efficient to be sending out these cold emails and then they just kind of narrow down on just brokered search and here you are going in the other the other direction as in so many ways. W- One thing I found as I switched to proprietary, I just found better companies. I was like, "Wow, I've never seen a company that does this before." Brokered, you know, you get like there's a couple types um that you just keep seeing. On the proprietary side, you're like, "Wow, this is unique." Yeah. Yeah. Yeah. You know, and I recall us talking about that. It does feel like like just looking at if if you treat BizBuySell as kind of a proxy, if you look at BizBuySell, you do see the same sorts of businesses over and over. Like probably 50% or even maybe 60% are one of some kind of you know, landscaping or construction or remodeling business, of course, gas stations and salons and and restaurants and retail and and what else? And and kind of a FedEx or um kind of logistics or Amazon or logistics business. I mean, you you start to feeling like feel like, you know, that's the market of of business buying. And of course, it's a good reminder that it it's not. There are are all sorts of very unique businesses out there that are one of one or one of two. Yeah, exactly. And there's certain ways there's like archetypes of businesses. There's like crew-based businesses and different things like that, too, that you're like, okay, I haven't seen exactly this, but this is really similar to something else I've seen. And you had eventually decided you didn't want a crew-based business. This was one of your ultimate disqualifiers, right? Which is again counterintuitive cuz you liked so much being in the military and basically running crews. So, why why did you decide against that? I just thought it's harder to grow. Um every time you want to you can't add new customers at a limited cost. When you add new customers, you have to buy new equipment and hire new crew members. Uh it's more geographically limited. I think that's why you see a lot of acquisitions. Um so, I just thought I you know, I'd have to really change that a lot more than if I could find something that has some scalability in in the business model. Sure. Yeah, fair enough. Um digression here, Josh. I you've now said that this is one of my personal values um a couple of times, maybe two maybe three times. And it also seems like um to get a little meta, having personal values is one of your personal values. What's that about? I mean, we all have personal values, but probably not as well defined as yours. I think like knowing yourself is the most critical part to any sort of entrepreneurship. I think that when people try and decide should they go funded or self-funded, uh what type of company they should buy, it's all about knowing yourself. That's one of the beautiful parts about the search itself. You're alone by yourself for like 1 to 2 years. Everybody's telling you what you're trying to do is impossible. Um and you get to really know yourself really well. Um and so, yeah, I think that that like one of the keys. And whenever you see people make mistakes in how they search or what type of company they buy, it's all about them not knowing themselves. Hm. And so, did you have such well such kind of explicitly defined personal values prior to your search or was it the search process that kind of had all these bubble up and had you kind of codify them? Exactly, during the process. Even when I started out with, you know, I'll buy any company. And then I was like, actually, I want something unique. And then I was like, oh, yeah, actually, maybe there's something about me that I like unique things. Um Yeah. So, so search really kind of helped uh shed light on yourself to yourself. I mean, it really taught you a lot about yourself. Absolutely. Yeah, it's one of the really nice things about the search process, you know. All right, let's get into your proprietary search. This is This is another chapter where we're going to um spend some time. So, tell us what you did. Yeah, I love proprietary search because there's just details. And uh the details are fun. So, um The exact reason most people don't. Go ahead. Yeah. So, the way I started, you know, I went to I didn't have any money, so I got a Boston Public Library card. Um I logged into A-to-Z databases. They pull information from every Secretary of State database, so there's like 14 million companies in there. But most importantly, it's free. Um so, I That That's the name of a product, A-to-Z databases. Yeah, it's really great. Uh the information's not the most accurate, but uh that's sometimes is a positive. One of the things with proprietary is if it's easy, uh everybody else is doing it. So, sometimes you got to kind of do things in the harder way. Yep. Um so, I built a database of I think it was like 70 to 80,000 companies. Um what I did was I filtered out instead of filtering in. Um so, instead of saying like these are the NAICS codes or these are the industries I want, I just said like I want everything, and then I went through one by one and eliminated the things I knew I didn't want. Um I went, you know, pretty broad on the criteria, too, in terms of revenue size and year established, knowing those aren't the most accurate. And so, to be clear, you are you have a now a membership to A-to-Z databases via your your your your public library card, your Boston Public Library card. This is something that I basically This database is basically a database in theory of all the companies in the US. And you can basically just search them based on criteria, you know, age, where they are, revenue, etc. That data, of course, is not that you know, it's not super accurate as with all of these databases, but it's a good starting point. And then it just spits out a list of companies and you're basically just got to do Are you doing this from Boston Public Library or can you log in remotely and do this from your web browser at home? I started there and then I did it remotely from home. One of the things that was annoying about A-Z Databases, although I think they've since switched, was at the time you could only download like 100 companies at a time and you had to click through every 25. So, there was a point where I just like got monsters and spent like 48 to 72 hours just like clicking and downloading and then adding Excels to Excels until I had these giant Excels that took like 5 minutes to load and then I uploaded those all into the free version of HubSpot. Mhm. So, okay, so you're you you do this search in A-Z Databases based on the criteria that you're looking for. You say all companies and then you start filtering out types of companies you already know you don't want. 70 to 80,000 The search results are 70, 80,000 records of these businesses that meet your criteria in the US and you start exporting those into Excel 100 at a time. So, that's whatever 700 times that you had to do that. Is that right? Yeah, that was fun. And then you've got this giant worksheet that you can that's kind of a you know, you can you know, it's basically your own little database on your hard drive that you can as you did upload into as a CSV probably in HubSpot. And then great, you've got your arms around this data and you can start emailing it. Does A-Z Databases actually provide a contact contact point person including an email? Sometimes there's like a rarely there's an email, um sometimes there's a website domain, sometimes there's not. And the information's really inaccurate. So even once I had all of my companies, I went through um and and cleaned them. So I just went through the first one and I looked at the name of the company and I was like, is there anything in the name of this company that I know any company that has that in its name is bad and I should clean it out of my database. So I'd get to ones and it'd be like city of something. Okay, I'm probably not going to try and buy the city. So I'll like eliminate all city ofs from my database. So I spent a long time like really manually cleaning it um just one by one um and before I uploaded it. And I still, you know, made mistakes. I emailed this uh city about buying their pool and uh the guy responded and it was that was fun. You emailed the city about buying their pool. What do you mean? Uh it was like I guess somehow the company was like listed as like the pool of this city, like a public pool. Ah ah ah ah ah ah ah ah ah ah ah ah ah ah ah ah ah ah It was it was it was like some small town cuz the guy responded and he was like, yeah, I'll check with the mayor, but I don't think our pool's for sale. Uh and I would think going line by line through the 70,000 record database uh or Excel sheet would be perfect for interns. Where were the interns at this point? Um yeah, I didn't use them for that part just cuz I knew it was detailed work. I went line by line through about 500 of them. But it would just be really hard to explain to them um what like I was trying to do there. And it you know, it didn't take that long. Took a day or two. So now you've got And so we By the way, so A-Z databases, this is something that Sorry, you said it is free, but it but it's not one of the ones that we hear about and which I guess is as you said, that's kind of the edge because the ones that you hear about are the ones that everybody's using and blasting the same people and or businesses. But why is this one so obscure? Um it's free through most public libraries. So yeah, I'm not sure why other people don't use it. Um But is it something that I could I could get a a membership to now and even even if I wanted to pay $50 a month or something, could I I'm sure you could, but I'm sure you could get a free library card through any library. right, right. No, I'm just wondering why like if it's something where people kind of only learn about it if they go to the library or if it actually has a consumer facing product. They I think they do have a consumer facing product, but you know, it's not perfect for emailing because you often don't get names, you often don't get domains, and you almost never get emails. Interesting. Okay, A to Z databases. All right. Great. So, you start emailing people. This So, what's your final list after you've called the 70 or 80,000? How big is your final list? Yeah, so I kind of did two things with that. So, I got it I think I had like 80,000 I downloaded and it was like 72,000 I uploaded into my HubSpot database. And then I did two different things. I did one path that was kind of my automated path, and then one that was my intern cleaned path, and I cleaned some as well myself. The automated path, that's the fun part. So, you know, I took the whole list, I ran it through 100.io. If you know, you have an owner's name and a domain, there's a chance that I'll find their email address. You do have to be really careful about spam traps, and sometimes it comes up with these implied emails where it's like first.last@domain.com. It's probably not going to work, so I only use the top ones. Also, you have to pay for those, so I only wanted to pay for the ones that I was really sure were were going to be good. Mhm. So, I did that, and then I ran it through a couple tools to remove spam traps. Again, if you get like really deep into the details, there's these email addresses out there that can cause you problems in your email campaigns. Mhm. And from that I got about 10 to 15,000 um companies. And so, that was my like automated campaign. Then I took the rest, and that was interns. So, I gave them all free accounts to my free HubSpot database, and I you know, I gave them a couple hundred a week, and they would go through one at a time. I taught them how to see is this a good company or not, figure out who the owner is, try and find their email, market good if it's good, and then I'll add it into a separate email campaign. And I did a lot of that cleaning myself, too, just when I had free time. So you your automated batch was the was kind of like you ran them through email hunter and you had what you thought was like really good email addresses, good data and you automated those. I was about 10 or 15,000 you said? Yeah, exactly. And then the other 55,000 or 57,000 you did the same process but manually. You had your interns manually going through line by line, record by record. from that we ended up emailing about uh it must have been about 10,000. So we must have cleaned a lot more to find 10,000 that we thought were relatively good. Yeah, yeah. So 10,000 the interns and then 10 to 15,000 and automated. So your your final outreach is 20 to 25,000 businesses. Yeah, I think it was 22,000. Uh so yep. 20 22,000. Wow. Um Okay, and what is your since we're we're so in the weeds on this, why don't you just tell us what the your messaging for the email look like? Your cold your cold outreach. on this a lot. Um at first, you know, I I was hesitant to talk a lot about myself and be very personal. Um then I came to see that like that's the differentiator as a self-funded searcher, right? You're not a private equity firm. These owners are getting tons of emails from other people. Uh so I really by the end I made a much more personal message. So I kind of had this long first email talking about myself and my background and how I found their company and what I was looking to do for my career. Um and that long first in I had a little picture of uh me, my wife, and my dog and I had to like really dig into the details of the email spam rules to make sure that it was like the minimum number of pixels. So it's not a HTML email, which is more likely for you to go to somebody's junk. Yep. Um so then um but yeah, I had this long first email. That that in the end got about a 5% response rate. But then I I did these automated follow-ups um and those got all of the responses, you know, my next two emails got about a 10% response rate each. Just really simple. Um so one of the to in and see if you got this or like should I stop emailing you? Really simple messages that a lot of people said they would see that, they'd scroll up, they'd read my whole message, and then they'd say, "Oh, wow, this is like a real person, and maybe this is a fit for what we want for our business." Mhm. And so, uh two questions there. When you say response rate, do you mean any sort of response or a positive response? Uh any sort of response. So, I got about a 25% response rate, but about half of those were like stop emailing me. So, 12% were responses and positive responses. Yeah, by the end. At first, my campaigns were far worse, but as I iterated on it, by the end, that's what I was getting. And HubSpot allows you to send out this volume of emails? No, I didn't use HubSpot because their email tool is paid. Uh so, I use this and it was pretty expensive. I used a tool called PersistIQ. It's also paid, but it was pretty inexpensive. Um I had to actually have two different uh accounts cuz I had two different emails. Um I you know, I used the Gmail uh as the domain and um uh as the hosting. And so, uh you know, there's a limit to how many emails you can send per day. I think it was 500 at the time. I heard it's 400 now. So, I had to have two separate accounts for all the follow-ups I was doing. So, your impression is that these owners are getting a lot of emails. For sure. Yeah. I mean, I've gotten those emails, so I'm sure they're getting them. And uh from searchers and private equity, all of the above? Yep, exactly. I've gotten a lot of emails from searchers. It's kind of funny. Uh-huh. Uh-huh. And uh and and when you get those emails, do you is there anything now you as owner kind of see that they're doing wrong or and or that you yourself did wrong when you were doing outreach? Um I tend to just ignore them. I you know, I'm I'm nice. I don't like mark them junk cuz I know that'll hurt their email campaigns, but I just tend to kind of ignore them. I just find it funny. I'm like, "Oh, that's interesting." Yeah. It is funny. That that whole process. Okay. So, these 12 and 1/2% of, you know, of 22,000, although it got to 12 and 1/2%, so that wasn't across the board. You didn't talk to whatever 12 and 1/2% of 22,000 is. Did you? Uh I I got a lot. I definitely did a lot of owner calls. I I've always tried to like guess at how many owner calls I did. It was uh probably over a thousand. I I did quite a few. Really? Over a thousand calls with an owner? Um yeah, I think that's right. I really am not sure the final number. Uh but a lot of those calls are really short. Um yeah, I got to the point where I was ending calls in under a minute. Oh, wow. How can you end a call so quickly? Uh you know, at first you talk to everyone. So somebody responds and you have like an hour-long phone conversation with them and then at the end you find out that this is just not going to work. The company's too small, it's too large, the person doesn't want to sell, they have problems that would make it impossible for you to finance the acquisition through a bank. Um so I kind of wrote a script, I practiced it, um and I really was uh really yeah, I followed it really closely and I spent very little time unless I knew it was a company that actually would be beneficial cuz I didn't want to waste the owner's time also. I don't want them to waste an hour talking to me and find out that it was never going to work. Well, what what is this magic script, Josh, that that that allowed you that saved you ultimately so much time and allowed you to quickly disqualify that owner? Yeah, uh so by the end I would say um "Hey, it's uh great to meet you. Is this still a good time to talk?" And they'd say yes and I'd say, "Well, like you saw in my email, I'm looking to buy a company that does one to two million dollars of profit every year that's not dependent on any single customer with an owner who wants to sell in the next few months. Do you think you could be a fit for that?" And and you just learned everything right away. And and you save yourself time, you save them time. And they and you just going for the jugular like that in terms of information. You they don't they're you've already warmed them up, I realize, with the email and you've gone back and forth around let's uh scheduling the call and so forth, but still that's pretty direct. And that was fine? Yeah, um and I think that people appreciated that I wasn't trying to waste anyone's time. Um Mhm. I knew what I was looking for, I knew what I could finance, what I couldn't. Mhm. And did they understand what you were doing? Were were or were they like what who are you like what are you or they were like cuz they get these so many other emails like it they they got it. Yeah, the ones who were ready to sell got it because they'd been exploring selling for a long time and thinking about it. The ones who, you know, I was like the first person they ever talked to about selling, they're not going to sell anyways. So, Yeah. that really wasn't my concern. Is there anything more to say about the fact that this proprietary search process led to one of one companies, these interesting unique companies? Was there more to say about that? Uh I just found some fascinating companies. Sometimes the, you know, deals wouldn't work out, but I found like really interesting companies. So, I learned a lot. Now, my wife always makes fun of me cuz we'll like go out and I'll be like, "Oh, I talked to a company who's like the distributor for that or who does this random thing." Yeah. It's kind of fun. Cool. And and any any ones there that we should know about? Any interesting businesses that you didn't know and Yeah, the most interesting one uh so this guy does the uh he's a nacho cheese distributor for um movie theaters, but not gas stations. There's a different size nacho cheese machine. Um so I was talking to him and I love nacho cheese. He loves little nacho cheese cups. So, he sent me like three cases of nacho cheese cups. And so my wife and I were making like mac and cheese using them. It was amazing. Uh great business. Yeah. That's cool. I guess perfect perfect search business. All right. Um All right. So, tell us about the discovery of Mercury. Oh yeah, I met the owner. Mercury had three owners um which made things a little more complex, but you know, I I met um the founder of the company because he was in Boston. We talked once and then we went out for dinner. Um So, happily it was just in the same place where you were. Exactly. I was just like, "Well, I think you're just, you know, a train ride away. How about I come meet you for dinner?" Um and so then I started learning about him, learning about the business, and it was just a perfect fit. The three of them were looking to retire, and uh they didn't want they had friends who sold to private equity firms or sold to competitors. They cared a lot about their employees and making sure that their employees had a an owner who was going to care as much about them and about growing the business as they did. So in in many ways they were looking for me as much as I was looking for them and that's why it was such a perfect fit. I spent a lot of time with them just meeting them, learning them, learning about the business from them. Because it was proprietary, you didn't have to like sign an LOI and then do my due diligence. So we went back and forth for about five months. So by the time we signed an LOI, I knew all of the details of the business. They knew they could trust me. We had all of the details negotiated already. So we didn't have to do this negotiation post LOI. The whole time we would just look back and say, well, this is what we said in the LOI. And and they were yes, you were building trust, but there must have been an NDA at some point. I mean I mean there must have been some kind of professionalization of the process. Yeah, we signed an NDA early on and then they sent me information and I would make offers and we'd go back and forth and I'd say, well, tell me more about the company and I could find a way to pay more money and then I'd learn a more about the business and I'd say, well, this is actually a great company and you know, I was going back and forth with banks trying to figure out how much I can get from them from an SBA loan. So we just went back and forth for months. And and and how long into these five months was it that it took you to actually submit an LOI? I think I think we signed I submitted LOIs early on maybe a month or so in I started sending LOIs just so we could really get into the detail and go back and forth about them. Asset versus stock purchase, escrow, all of that. But it took us yeah, about five months from first meeting to signing that LOI and then another five to six months to close. Oh, so almost fully a year by the time from that first dinner to closing. Yeah, I think that's right. I think it was like 10 or 11 months, yeah. And meanwhile you're continuing to search. Your your process carries on. Yeah, although as I got further along with them, I really trickled down whatever else I was doing. Because by then I just talked to so many companies and I knew that it was going to work. Like I I knew that they were really trustworthy. I knew there was nothing hiding. Um I knew the QV would come back and say this is exactly what they said. You know, I knew nothing was going to pop up. I just I trusted them and I I knew so much. Mhm. And given how long this process was, five or six months to uh LOI, five or six months after that to close, you know, time kills all deals. Did you particularly pre-LOI, did you That just feels like a long time to be going back and forth. And granted this is proprietary, so you're kind of having to educate them, you know, that's one of the reasons we like brokers because brokers have done the hard work of setting expectations and educating them and getting the the seller to collect all the information. And now you're having to do that. And you know, I just I I could just imagine the psychology of like every email to them over those four or five months asking them for more information, pressing on this, prodding on that on on that. No? Uh yeah, that definitely happened. What I did was I had a once-a-week lunch with each of the owners. So I would just talk to them um and that's where I learned most of my information. That's where I learned about the company, too. So because the process was longer, uh it made me actually much more effective taking over the company day one because I really knew all the details. Don't you wonder if at some point they were like, you know, let's get on with it. Are we going to sell to this kid or or what? Sort of thing. Uh I think they were, but I was really transparent the whole time. I'm using this SBA loan. Here's the details of it. They talked to other SBA lenders so they could understand how long it takes. Um so they they understood. We were very transparent um with everything. Well, and I guess you had a number of advantages, I'm sure, but two of them were that you were local, so they they were I mean they you know, they met you early on. I mean there's there's really no um substitute for kind of being able to meet in person and and feeling like you're familiar. That just accelerates trust so much. Second, the fact that they had these friends, colleagues in the industry that had sold to private equity or or competitors and kind of the outcome wasn't a happy one for them or at least not for their employees. They already kind of your potential competition was already at a disadvantage. They wanted like you said, they were looking for you. They they were shopping you. Yeah, exactly. It's one of the things you kind of don't think about when you start the search process, but there's this whole other side of people who are looking to sell and they're looking for the right buyer. Yeah. And what your offer I assume, I mean you're building trust back and forth. I assume your offer is kind of just going to be a industry standard kind of multiple for a business like this. Yeah, exactly. I was just following the search criteria. I kind of knew what the bank could finance. Um the new SBA rules are great, you know, they've changed and they're even better. But at the time I just kind of went to the max of what I I could get from an SBA loan, seller's note and then I had to raise some equity. And they did the point about valuation, was there a moment of disappointment on their on their side that oh, this is only worth three or four times our our annual profit? We thought it was going to be worth much more. Uh they'd been thinking about selling for a while, so they were pretty familiar and we went back and forth a lot. So, you know, my initial offer what you know, they negotiated me up a lot. Um So, you know, because we went back and forth so much, it wasn't like just here's my offer take it or leave it. I learned more about the company too. Actually, this is more profitable than I thought. Um Josh, did you at all given how long this was this this back and forth was going on this back and forth was you are again building trust going out to to what do you say? A meal with him, lunch or or or dinner once a week with one of them? Well, I did lunch with each of them every week by the end. At first it was like once a week with one of them and by the end it was every single week with each of them. So, at did you find it all that like the the hazard of your own psychology that kind of the sunk cost fallacy? I mean you've you've been you've been invested so much in this deal by month 7 8 9 10 that are you saying to yourself, you know, I need to be clear-eyed here. I might not be seeing something some red flag in this deal because I'm so committed at this point. I mean, that's the danger. That's the classic danger. Yeah, one of again, Jim Sharp was a great mentor of mine throughout it and he would always every time we talk he'd say, "What's the percent chance of this closing?" And basically as the percent chance of it closing went up, I spent more time with them and less on other deals. But at first, you know, when I was like, "I think there's a 25% chance of this closing." I still worked on a lot. I also just kept in touch with all of the previous offers I made knowing that, you know, people will change their expectations or the business might change in some way. So, I just kept in touch with all these previous deals and I figured I had enough in my kind of pipeline that one would work. Great. Okay, well, there's a lot to say about your getting in there and actually running the business. So, anything more that I didn't ask about that you want to share about the actual search and then transaction? Um on the just on the search side, you just have to be really scrappy. Particularly on the self-funded side, you have to really get into the details of like what emails are going to work and how you talk to owners and all the details of the things that you get better at over time when you're searching is talking to owners because on the proprietary side, you have to explain to them what network and capital is and what how you set a target and how you do a true up. And you have to explain the escrow and the reps and warranties. That's all on you as a searcher and the subordination of the seller's note. So, you just get better and better at answering those and that's like one of the things you get really good at over time is just when somebody says, "Tell me about working capital and how it's going to work in a in the transaction." You need to have a really clear succinct answer that shows them you know what you're doing. Otherwise, they're they're going to ghost you. They'll stop talking to you. You won't know why, but it's because they don't think that you're a real buyer. Yeah. Yeah, and so you experienced some of that. You were had choppy explanations initially and you refined them over time. Exactly. Exactly. Mhm. So, you successfully buy this business of almost a year after sending out that initial email. What tell us about the first 30 90 days? Yeah, so I we closed January 29th, 2020 right before COVID. Of course, we didn't know that at the time. So, you know, I was replacing the three owners and I was kind of learning what they did. I'm not going to make any changes at first. I met everybody one-on-one. Um then about 2 months in COVID started. And it was like, wow, we have to work remote. You know, I didn't want my sellers coming in anymore. I didn't want Nobody knew who was going to get sick and what would happen. So, I told them like just you guys can stay home. So, then I had 12 direct reports. When I was searching I read traction the EOS book. And I thought that was pretty cool system. I really liked the idea of it. My plan was to wait about a year to implement it assuming that I thought it was the right fit for Mercury. But now 3 months in COVID, I've got 12 direct reports. We've got to have everybody work remote. Nobody's ever worked remote before. Literally anybody Everybody had desktop computers. It was kind of a risky situation and I said okay, I'm just going to jump all in on on EOS. So, I hired an EOS implementer. He's fantastic. We used him for 2 years. We really reorganized the company, the accountability chart, who reports to who, what our values are, what our mission is, who our target market is. So, that was a really big change about 3 to 4 months in. I wouldn't generally recommend it, but with COVID I just didn't really have a choice. And I'm sorry, why why why did COVID accelerate you doing EOS? You know, I had 12 direct reports and we all had to work remotely. And it was just I was like, I don't know how I It was a structure. It was It was kind of something to a north star that everybody could be working toward? Yeah, exactly. We didn't have an organizational chart, like who really reported to who. We didn't have like a clear target market. It was It was a a little bit chaotic and I thought I can manage that in person. I can ask people what they're working on and kind of tell them what to do. But as we try and figure out this remote thing that we've never done, and I thought, you know, this is just a great opportunity and I'm not going to not going to miss out on this chance to to make this really big change. And I figured COVID would be a great excuse. There's this pandemic, everything's changing. You know, I could use it as an excuse to make these changes I want to make a little earlier. Yeah. Yeah. And when you say 12 direct reports, does that mean that the business was 12 people plus the three sellers? Uh no, the company was 43 people, but 12 of them reported to me at first. Okay. 43 people. And can you say anything about any of the other bullet points of the business, financial or otherwise? Uh we did it like the tens of millions for revenue. And actually, Josh, I should we should So, we should mention this because you kept saying how little money you had as you were going through the process, which kind of forced your the scrappiness of your search. The tens of millions of revenue and you said you raised money for the deal. So, did you put Did you have any of your own money in the deal? Uh I was quite negative by the end. I started I got a bunch of credit cards and I you know, I I kind of maxed them out and made the minimum payments for a long time. By the time we closed, I was very negative on personal money. Um so, I did not have any money. Wow. Man, that's impressive. Buying a business with tens of millions of dollars in revenue with none of your personal money in it. Not to say that I'm here advocating buying a business with no money down, but that's effectively what you did. Now, of course, you earned it through all of the the process that we just listened to for the last 30 minutes. Very interesting. Okay, circling back. So, it's So, you decide to do EOS and you've you kind of rattled off a few things there, Josh, but give us just a minute on what EOS is. That comes up a lot, but I've never done an episode on it. So, give it give us a minute or two on it. EOS is amazing. It's a entrepreneurial operating system. It's just a organized system for running a small business. It forces you to do the things that you should do. You have to have an accountability chart. That's their version of an organizational chart where you put some bullet points of what each person's role is, who they report to. You have to have company values, a mission, a defined target market. There's a meeting cadence. They're called L10, level 10 meetings. It's It's really great the meeting cadence that you do. There's a quarterly meeting cadence. There's these rocks which are kind of big things somebody works on for a quarter. You set up the scorecard about different metrics you track. It's just a really organized system. I think for a lot of small businesses they just don't have those types of things and it really helps you take a business from where it kind of was to the next level. Yeah. And people are receptive to it because it feels like yes as the as the one as the owner as the one presiding over the this organization, it's great. But it feels like if I'm an employee and all of these new processes and scorecards are being put in place, I'm rolling my eyes and I'm saying, "Man, this thing just got really corporate. This really got bureaucratic." Doing it during COVID really helped because I said, "Hey team, like this is chaos. We have no idea what's happening in the world. We're going to do this system." And people at that point were like, "Okay, we'll do whatever. I just want to make sure I still have a job and I'm safe from the pandemic." Mhm. Yeah. Way to turn a way to turn a crisis into an opportunity there, Josh. And And talk to me talk to me in a minute about leadership. So you you're a guy with already leadership experience in the military and maybe elsewhere. Was there How did it feel stepping into the shoes of these three gentlemen, these three founders and being much younger and being not the founder etc. etc.? From the military side it's the exact same. Like as a army officer you take over a 40% organization. Everyone's been there for a while. They all know what they're doing and you don't. It's very similar to kind of taking over new organizations in the military. So that felt pretty pretty normal. And I kind of knew how to do that. I you know, I knew to come in and I'm not making any changes. I want to understand what each person does, you know, the difficult things. I'm going to be there. So, we run this night operation. I spent a lot of nights with our night operation, um, just being present, learning what they did. Um, that part all felt very normal. Mhm. And you know, um, I've wondered where in the military, yes, you you have a lot of leadership training, leadership experience, but you still kind of have at your back the authority of the US military. Like, there are there there is accountability and consequences if if your direct report doesn't do something. It it's you know, the buck doesn't stop with you, Josh. But when you're when you buy a business, if somebody is defiant or what's the word I'm looking for? Just, you know, just says, "No." or whatever. Doesn't do something you want. There there's no There isn't this entire giant apparatus behind you that kind of gives weight to your words. It's just Josh, this rando who bought the business. Who's probably younger younger than me. So, that doesn't that feel different? Yeah, that's the case during the search, too. Um, you know, I'd always think like, help's not on the way. It's like just me out there. Um, so, you know, when you're searching self-funded, no one's going to make you make offers and, you know, push you to only close a good deal. And when you're running the company, uh, you know, typical most self-funded searchers don't have a board. It's kind of just you out there. Um, and you have to be really self-motivated. It goes back to that know yourself. Um, I'm really self-motivated. So, I knew that that wasn't an issue for me, but I could see some people want that. My boss told me to do it, so I have to do it. Uh, you're not going to get that in self-funded search. Well, but also not not not just that Sorry, not that you Where does your Josh's motivation come from? But when somebody, one of your direct reports, for example, like the authority that your words carry when it's just you, seems like it would be less when you're this random guy who bought the business than when you're in the military and the the your words carry the authority not just of you who their commanding officer, but the entire military behind you. It's like they there's a system, there's a context to your authority. Yeah, but not not when you buy business. Right. EOS helps solve that because EOS um you bring in all of the kind of best people in the organization, that potential leaders, and they're involved in making all the decisions. Um and then you kind of promote them up and have this leadership team of people who are the most respected, most experienced in the company. And so it's not just Josh, it's the leadership team which is these five people who have been here for 20 years and you respect. Um EOS really helps helps solve that. Even when you come up with the company values, you talk about who are the best people of the company, what do they do well? Okay, like that's what our company does. Oh, interesting. So you back into the company values. You don't you don't like company value you sort of uncover what the company values already are by virtue of of of the of the characteristics of the good leaders in the business. Exactly. And it's the most respected people. So everybody in the company says, "Oh yeah, like that person does do a great job and that's one of their values. We should all do that." Oh, wow. Neat. And can you say how much it costs to hire an EOS consultant? Uh I think it's like 20 to 30,000 dollars for a year. Um they're really beneficial. Some people try and implement it themselves. I would definitely recommend finding somebody to help. Uh you have this external That's another thing that helps, too, is you have this external party. My EOS implementer implementer's fantastic. He was a previous business owner. My whole team had great respect for him. So it wasn't Josh saying it or EOS saying it, it was uh this implementer saying it who everybody really respected. Yeah. And and how long does an implementation take? You said it's 20 to 30 a year, so is it a is it fully a year-long process? Two years. That's what they typically do. Two It's a typically a two-year process and then you're off on your own. And that's exactly what we did. Wow. So he's involved and is he showing up at the office? I guess it's COVID, but in in generally would somebody be showing up at the office weekly? I mean, how what what what is the cut your contact with this person look like? Uh they have this particular cadence. Um it's like you do this initial meeting and then you do these two vision building days and then it's basically quarterly and annual meetings. So, at first there's a couple meetings and then it's once a quarter or once a year or twice a year. Yep. Okay. And so, the you implement EOS, it's transformational. Um you have mentioned Jim Sharp a couple of times. Uh tell people who Jim Sharp is. Uh Jim was a previously a small business owner. He was a professor at Harvard Business School and he's a mentor to a lot of self-funded searchers. He also posts a blog. It's really fantastic. I'd highly recommend uh reading his blog. Um and Jim's just a great uh he's got a lot of uh experience and uh what Jim does really well is he just really cares about searchers. Um he's not like in it for himself. He's in it to help you learn. So, one of the things that you had said that he says is when you're out there buying a business looking to buy business, you actually are in fact buying a business to change it. Not in the first 90 days, you know, you you choose your choose your timing well, probably later than sooner. But in fact, let's let's not delude ourselves, you want to put your imprint on this business. Elaborate on that. Yeah, that's why it's entrepreneurship through acquisition. Like uh particularly on the self-funded side, it's real entrepreneurship. You really change the business into what you want it to be. Um especially if you have a 10 to 20-year uh period. So, that's you know, one of the like what EOS did was it helped us clarify what do we do today? Uh so, we kind of look through all of our different customers, all the different markets, the services and really clarified who's our target market and how do we serve them today. But then I spent a lot of time myself and then I brought on these summer interns um from MBA programs to really dig into the analysis, what's the market, what are we best at, uh to decide where should we go as a company. Perfect segue. So, elabor- elaborate on that because this was the kind of epiphany. Yeah, so um when we first did EOS, we had three target markets. It was three different industries. Um then when I had the my first uh group of summer interns, they were all fantastic and they just dug through all our data and said, you know, this is really a healthcare logistics company. You guys just don't realize that. All of our new customers are healthcare. All of our best customers are healthcare. That's what we do best. That's really what the company is. We just haven't called ourselves that. So then when we made that pivot, we're just going to be healthcare life science. That's like our only target market shipping for these healthcare companies. Everything else kind of just naturally flowed through that, right? So okay, of course we need to upgrade the software to what they need. We need to reorient our teams in the network, our pricing, our costs, like everything just kind of naturally flowed from that from that decision. Mhm. And what were the three industries before? Legal, healthcare, and Uh yeah, we did professional services, which was like legal and then we did healthcare life science. Then we the other one we called technology. It was like shipping servers or things like that. Okay. Okay. And so when these this your interns have this kind of conclusion after pouring over the data, do they need to convince you and or and or leadership? I mean or cuz it's a it's a big decision. Was there kind of a lot of back and forth or did you all see their findings and were like, oh my god, yes, obviously, let's do it. A lot of back and forth, but when they were doing their analysis, they were really involving everybody in our team, asking them questions. So everyone was really involved. So by the time they had their conclusion, it was pretty obvious that we should do this. But it took us a while to come to that conclusion. It took us months to really decide to go all in on one industry. Mhm. And And what percentage of the business did did healthcare and life sciences represent? It was probably 70 or so percent of the company, 60 to 70%. Now it's probably 80 to 90. And were you going to fire the 30 to 50% of your customers that were in these other two now non-interesting industries? Uh no, we thought about that, but we're like, no, we we want to keep serving them. So we even today have some customers, some law firms, and some other customers who aren't healthcare life science companies. I think what we do actually is really beneficial for them and so they they've still enjoy it. Um So we haven't we didn't want to fire anyone. We just kind of thought, "Okay, every new customer will be health care life science and over time the percentage of customers who are health care life science will be really high." Mhm. And so was there any if you if you didn't have to fire that that 30 to those customers that represented still 30 to 40% of your revenue, was there any other perceived risk in doing this? I mean, if it if it what were the risks? Yeah, the risk is really funny in retrospect. We all thought maybe health care life science shipping's too small. We're like maybe this is just not a big enough industry for us to be a large company in. Uh now as we see it, it's massive and there's all these niches within that. Um you know, I think the industry itself is something like a hundred billion dollars of of revenue worldwide. Um but at the time we were like, you know, maybe we can't even double the company just doing this one industry. And so what was this pivot going going to entail? No longer marketing to um kind of shipping technology server type products, no longer um marketing to professional services. So your your marketing direction, your market positioning, your go-to-market kind of changes. The software needs to be updated to to really be sort of customized to this industry. What else? Yeah, sales team, um our partnerships. So we became the preferred shipping company of MassBio. That's the nonprofit that serves all the biotechs in in Massachusetts. Um our operations team, that's all they learned is, you know, how do we be the best in the world at shipping medical devices or or uh life science research materials or diagnostic kits. Uh really everything about the company changed over time. It wasn't like a tomorrow everything changed, but over a year and a half, I mean, today we really are a health care logistics company. That's that's all we do. Mhm. And did you find that narrowing your message and and and positioning yourself as just focus on this one niche has also accelerated your you know, your ability to make sales and and you know, your your your growth within this niche? In every way. Yeah, like just to give an example on the SEO marketing side, right? We're never going to win on Google for like shipping. But what we can win is UN 3373B biological sample shipping. And so, you know, we win all those terms. And then when people talk to us, we say, "Okay, tell me about your samples. Let's talk about if they're, you know, exempt human specimens or category B or category A." We have, you know, our network who does the shipping. We have different carriers who can do each one. Um so, everything about the business changed to just serve those companies. Yeah. Excellent. And rewriting Did you rewrite the software? I seem to Did you say earlier that the software was really crude and in the server or was that That was the website in the server in the closet? exactly. What was What did it look like and then what did you take it to? Yeah, we had one engineer, um and all of our software was literally in the closet, um and it hadn't been updated in in many years. And it only did one type of shipping. We offer about six types of shipping, depending on how you think of it, and only one happened through our software. The rest were through emailed Excel files or phone calls. Um so, we went through a lot of iterations. Um but now we have a engineering team, a product and a design team. We've launched new software. We launched it in April. We've constantly iterating on it. Um and so, now we have a lot of So, you built this essentially SaaS cloud tool from scratch? Yeah, exactly. It's not We don't charge a subscription, but it's exactly this cloud software, very modern. One side of it is customer-facing. They can go in, book shipments, track shipments. The other side is internal-facing. We use that to manage our customer shipments. We track all of our customer shipments for them. And so, we manage that internally. Well, well, that sounds like building a SaaS tool. I know it's um you know, it's not a a product that you're releasing to market exactly, but it's it's still essentially something that your customers are going to use. Quite a heavy lift to build something like that from scratch. Yeah, it took a long time and a lot of iterations. Uh we're on our fourth head of product. I was head of product for a while. That did not go well. We've we're on like our third attempt at engineering uh in terms of like different models of doing engineering. Um everything in Mercury, one of our company values is relentless improvement, and we just iterate on things. Uh I think our current uh setup is is the final, probably, but uh at least the final for now. Who knows what the company will look like in a couple years. Um but that took it it was not an easy path. Mhm. Well, and so for a guy who was a a product manager intern, or was it a proper job at Amazon? You intern turned out you weren't a great PM uh in the real world? Yeah, yeah. Like I knew high-level what to do, but as you get into the details, I had no idea. Okay. Uh um now, remind me, let's get into recruiting the dream team that you you now have. Um that's a big part of the story. We are coming up on the end here. The that first hire was a PM, wasn't weren't they? Tell the story of kind of realizing you want to hire kind of real strong talent, the challenges, and then how all that played out. Yeah. So, the first big hire I made outside was our at the time our VP of product. He's now our COO. Um and uh that was that really transformed the company. I mean, he's amazing, and he's entirely transformed the company. Uh it was hard to recruit somebody because if you looked at our website, we were not a very attractive company. Uh if you kind of looked at what we did or what our current state of our software was, it was not very attractive. Um I worked with a recruiter, um and then it was kind of me selling the vision. Um and he saw that, and it was a perfect fit. And so, he came in, built our product function, and since promoted him to be our COO. Um and once we had him, once we had one really strong uh kind of outsider on our leadership team, that really changed everything. Uh he helped push us in different directions. Uh then we hired on uh our net now our CMO, who also does our people operations. So, she does marketing and people operations. Uh she's also amazing, really transformed the company, brought on a CFO. Um so, just getting that first critical hire was really helpful to do the future ones because then that person and you together can really present a vision for the future cuz you're really selling the company to these candidates. Uh, Yeah. And yourself. And Josh, what this VP of product who's now COO and as you just said has been really transformational for the business. Did you expect Were you looking for somebody to hire to be transformational or this it just ended up being that way? What were you in retrospect this person was a a hugely influential hire. Did you Is that what you were looking for going into it? A hugely influential hire? Yeah, I knew bringing on an outsider who was really competent was going to really transform the company. I didn't know what that would look like. Um, I just knew that we needed product today. Um, all of our good hiring we've done as a company is just been hiring for what we need today. Uh, we've made a lot of hiring mistakes. I've made a lot of hiring mistakes and that's always been trying to skip steps, trying to get to what we need in three years or five years. Um, and he was exactly what we needed today and he also was what we needed in a different role. And by VP of product the product is this cloud software the the SAS tool? Exactly the software? Yep, the software that our customers use and we use internally. So, that really is that really is core to the experience of your customers and and to the entire company. It's not just the logistics of shipping, it's also this software is the kind of spine of everything. Exactly and it's unique to our customers. There's no other software out there that's directly uh, for healthcare companies doing just the logistics. So, all of the details in there about do you need dry ice or 2-8-8-C phase change materials and is this UN 3373B or are these exempt human specimens? And if you're shipping internationally, uh, the different rules. Our software just does that. So, if you're a healthcare company and you log in, uh, it's exactly geared for you. Mhm. Wow, very very powerful. Um, and this pitch as you as you just said to to bring somebody in and and how there was a bit of a domino effect. You brought him in and it made the second and third and fourth uh strong hire easier. Help people understand how you do convince somebody to come aboard your ship, somebody who who probably has um maybe safer or maybe more glamorous uh prospects than working for your small sleepy little company. Yeah, I mean, that's where like it's entrepreneurship, right? It's just you out there. There's no help on the way. You just have to find a way to convince somebody. So, I just really sold him on the vision. It's like, I know that's what we look like today. Uh I'm going to be running this company for 10 10 to 20 years. This is where I want to go. Uh this is the market opportunity I see. This is what we have today. We have this software. We have hundreds of customers who are using it. Uh these are the things I've talked to them that they're asking for. Um and and he saw that vision and he thought it was a great opportunity for him. Mhm. And this conversation and and and finding this person was after the recognition that you guys were going to focus on healthcare life sciences. Exactly. Even though our marketing didn't show that. So, I had to kind of explain that. Mhm. But, you had this really clarified vision dialed in at this point and then and you went to mhm. Great. Really cool. So, yeah. So, I guess um kind of the the to to to abstract your advice, it would be like having a very clear vision and direction and something that's appetizing and and kind of a mission, a sense of a mission and something big and important. I mean, I I guess I'm stating the obvious as I listen to myself. That sure helps hire people. Exactly. And you're not going to know it at first. You know, it takes years for you to know where you want to go. Uh where I thought we were going to go 6 months in or a year in was totally wrong. But, by the time I hired him, you know, I kind of knew what what we wanted. Josh, we're going to close out with um some stuff that you said at the very top, your long-term plan, the IPO potential here. But, before I ask you those final questions, is there anything about the story that I've missed that you want to share, make sure we share? I know. I think it's a critical decision as a searcher to decide if you want to do funded or self-funded. Uh I just think that's like a really big decision. A lot of things you can reverse. That's something that is really tough to reverse. And even just going down the search route, you know, if you do it, it's not a one or two year commitment. It's it's a really long commitment. So, it's something just to think a lot about before you jump down that route. Yeah. You know, one observation I'll make about you, Josh, is, you know, this theme of you're you're so very motivated. I mean, everybody listening to this podcast is going to be a motivated person, but you're particularly motivated, I'd say, and self-directed, and you like you you like pain. You like you like walking through walls. And so, maybe that's not everybody. One thing that I've now heard a couple people who did both traditional search funds and then self-funded say about the benefits of a traditional search fund is that actually they liked doing that as their first search because you do have kind of the apparatus of your investors. There are well-defined parameters. It really it's mostly I'm not sure it's those parameters. It's it's mostly just there's kind of a baked-in support network there in the form of your investors. And that's apparently really part of the model. And I think for a lot of people that is quite beneficial. And maybe for you that seems less beneficial cuz you're so good at figuring things out on your own. Care to respond? Yeah, I think a couple things. One, you can network for advice. So, I talked to a lot of other searchers, people who are in the same stage as me, a few years ahead, or even longer than that. So, you can get all the advice you need. You also can pay for advice. There have been a couple times where I've needed some outside consulting advice, and I've just paid hourly for that. Far better than giving up equity and control of the company. Mhm. One other thing that I think you said on a pre-call when you were making this decision about self-funded versus traditional, didn't you talk to a couple of your colleagues who'd done traditional search funds? They were on the other side of exiting, and they were kind of depressed. Didn't you tell me that? Yeah, Uh, one of the things that drove me to say like I want to run a company for 10 to 20 years. Every time I talk to somebody who's like recently sold, you know, they just don't know what to do next. And as I think about myself, I don't know what I would do next. Uh, growing an organization is what motivates me. Um, and so that was something else I thought about is I don't want to do this for 5 years and then be unhappy that I had to sell. Yeah. It reminds me of kind of a famous Silicon Valley story where Mark Zuckerberg was offered a billion dollars by I think Yahoo to sell Facebook when Facebook was still very, very young but clearly getting traction. And his his kind of calculation, he didn't even treat the offer seriously and his calculation was like, "Well, there's nothing more in the world I'd I'd rather be doing than running a fast-growing social network. So if I get that billion dollars from Yahoo, then what am I going to do? I'm I've given away the thing that I'd, you know, the thing that if I were if money were no object, I'd want to spend my time doing is what I'm already doing. So no thanks. I'll just keep doing what I'm already doing cuz this is this is what I want to get up and do every day." Yeah, that's awesome. Yeah, that like self-motivation. Like I don't go to work to make money. I really don't care about money, but I like doing what I'm doing because I get to solve challenges. Well, let me ask you about money uh for a second. You just made it very clear that you don't care about it, but certainly it must feel nice to be earning a proper salary now versus be having to be so scrappy um before. No? I've kept my salary really low. Even in our operating agreement, I could increase it and I haven't increased it. Um, yeah, I paid off my credit card debt. That's all I really care. Okay, Josh. Well, let's just um I I I don't want to be repetitive here cuz we've touched on it a little bit, but you know, your the long-term plan here, you you talked about going public at at the top. Um, just articulate it for us one more time. Indulge me. Yeah, I mean I think we can we can become a very large company as a healthcare logistics company. It's a huge market and we're tech-enabled, which is really going to allow us to scale. We're doing a lot of things internally as a company to improve our operations, improve our software, our marketing, um a lot of different things. We've just We stay really close to our customers. We learn what they want and we're doing a lot to improve it. Um, so I think we can become a very large company that way. Over time, that technology we're developing to serve healthcare logistics companies, we can use to serve other markets. But we're staying very focused for now. Sometimes I accidentally throw our organization off where I talk about what we're going to be doing in 3 years or 5 years or 7 years. And I I just need to stick with the focus of healthcare life science. Um, but that technology we're building will be able to propel us to go even larger in a few years. I You know, I'm surprised that the opportunity isn't already locked down, Josh, because um, shipping and logistics is, you know, the indus- the world's second oldest uh, profession. No, I mean, it's an ancient industry. I mean, moving stuff around is is nothing new. So, I would have imagined that there'd be this just enormous players in this market who are already moving sensitive goods around. Uh, there are. There's a lot of carriers out there and then there's some startups that are trying to be kind of a platform for shipping. Um, but it's an industry that has a lot of niches. Being good at shipping diagnostic kits, uh, does not mean you're good at shipping food and beverages or vice versa. And so, that focus is really what what allows us to be really good. And there's just not others who compete in exactly our market. It's actually much more complicated than it seems. There's a lot of regulatory complications. It takes a long time to to build. Josh, so I So, here here you are uh, presiding over a business that as you just articulated could really become quite a big business. You You want it to. You want it to go public. That doesn't I mean, I don't know a lot about that process, but it seems realistic to me. Um, seems feasible. Doesn't seem crazy. Um, you had also said at the beginning that like no matter what business you bought, even if it had been a landscaping business, you were going to find you were going to really proactively look for a way to make the business kind of growthy and and take it in a direction that could it could be exciting and and and fast growth. So, that may be the answer to the question, but the question is this, could you I guess for people listening to this who love the idea of buying a sleepy business that turns out to be this this business that can be pivoted into one that could be a a startup with going public potential. How how can they connect those dots? Like it's easy for us to to see where you are now and connect the dots in retrospect, but looking forward, you couldn't have seen this. Like you as as well as you got to know those sellers, you didn't know until a year into this business until you had interns really pouring over the data that this was the opportunity. So, even if you would have had a quote thesis, like it's really you know, it probably wouldn't have been super accurate. Actually, I think you just said that like you did think that you were going to take the business in a direction in month three and month six that and that would have been the wrong direction. So, even you know, so even you changed your mind even after getting into the business. So, I guess I'm just how does somebody do what Josh did? Buy a sleepy business and make it go public. Tell us how how to do that, Josh. I think it's you know, just like I talked about like knowing yourself personally, it's just knowing your company and the industry and spending a lot of time thinking about can this company become something great? Uh is there a certain market we can target or doing something else? Maybe I have to take the profit from this business to buy something else that's fast growing and turn it into that. I know some searchers have done that in the past. Um so, I think there's always a way. You just have to spend a lot of time really knowing your business and your market and what your opportunities are. I think if you um if you try and do something too early, it's a mistake. Um but if you try and come in with a thesis, it's just going to be wrong. But it so long as you have that 10 to 20 year period, you can you can do anything in 10 to 20 years. Hm. And and so, it's not like you chose an industry with great with great tailwinds, for example. It's not like healthcare logistics is blowing up. So, as long as I I I ride that wave, there will be some opportunity there. Uh well, initially the company was just kind of a logistics company. We I didn't even realize it was healthcare logistics. Yeah, right. We pivoted into the fast growing uh target market. Yeah. Yeah. Great. Fascinating Josh. Congratulations on your success to date. It sure will be interesting to see what you know what you do over the next 10 or 20 years. How can people reach out Josh? How do you prefer they do that if they want? Just message me through LinkedIn. Check that a lot. Talk to a lot of searchers. I like talking to people who's considering search giving them ideas on how to do it. So I'm happy to help anyone. Do you ever tell somebody considering a traditional search fund to yes do it or are you solidly in the self funded camp? I'm pretty far in the self funded camp but you know I think for some people traditional is the way to go. If you're looking to buy a software company off the bat you're not going to do that in a self funded world. If you're looking to buy a really large company it's kind of tough to do that self funded. If you're looking for a lot of support you're not okay with that like help is not on the way it's just me out there. Traditional might be the way to go. So I do think there's some people it's a fit for. Josh Meadow thank you very much sir for coming on and and sharing your story. How fascinating. Thanks well. 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.