Zack Smith, welcome to Acquiring Minds. Glad to be here. Thanks for having me, Will. Zack, you're a former tech guy. You were at Uber during its some of its big surging years. So, we'll hear a little bit about that. But, more recently, you have gotten out of tech and bought a business. An interesting business, an unusual business. So, we're going to spend time on that as well. Start us off, Zack, with some background on you, please. Sure, happy to. So, so yes, although I did a brief stint in public accounting at the very beginning of my career, I quickly, a couple years after graduation, joined Uber in 2013. I was doing operations work locally in Washington, D.C. at the time. That grew into I kind of grew up professionally alongside Uber over the next 7 years and did a variety of strategy and product and operations-related jobs there. All kind of jobs that didn't exist before I did them, which was a fun kind of experience at each step of Uber's growth. There was some new opportunity for me and I had a a great experience both professionally and a pretty good outcome from that experience. But, I got laid off at the beginning of the pandemic when the rides business cratered and that set me down a little bit more of my own entrepreneurial path. I spent a couple years freelance consulting for mostly early stage tech companies. And but was starting to feel kind of in late 2022, early 2023, that itch to be building something again in a way that freelance consulting was was not really offering me the opportunity to build. And I'd had a friend who'd mentioned Walker Dieppe's Buy Then Build, got it over the holidays and read it early last year and that set me down a very different path that we'll get to discuss today. Awesome. Well, when you say you weren't you were consulting, but you didn't feel like you were building anything. I think that's pretty clear, but just give us a couple more sentences on what that lacked. You were were working for yourself, it was entrepreneurial, but it still lacked a a certain something in the entrepreneurial journey that is this kind of sense of building. What Why did you feel you weren't building? Uh I felt like I was I was making a very efficient trade of my time for money or occasionally equity in in businesses that may or may not be worth something, but I didn't feel like I was building a business that could continue to generate value without all of my time, all of my professional time going into it. And certainly, there are plenty of people who build a consulting you know, go in a go in an agency model and build their own little consulting firm, and I I kind of thought about that, but from the beginning of my time doing that, I didn't really feel like that was what I wanted to do. What I was really selling was my experience and expertise largely from my time at Uber, and uh trying to productize that or build that into something more generic that I could hire people and sell their time, and you know, it's a great model. There are plenty of people who do it effectively. I just wasn't excited about it, but I did want to be doing something and building something that I felt like could generate value and opportunity beyond just the time that I put into it. Um and certainly, coming from my background, going into a you know, founding a venture-backed tech company was a was a thing that I thought about, but I also never felt like I had that kind of uh great idea. And I'd seen I had a wonderful experience at Uber, one of those just perfect product market fit at the right time uh products and opportunities, and I saw what that rocket ship was like, but in my couple years of consulting, I also saw plenty of pretty good ideas that just couldn't execute and get over over hump and were sort of in a frustrating find the right product market fit or get the right sales strategy just couldn't quite get off the ground the way they hoped to and I wasn't super excited about that path either in a kind of going the venture back route as a founder co-founder early executive type role and so as I learned about acquisition entrepreneurship and buying a longer running smaller cash flow positive business that had a lot of that started to tick a lot of the boxes in my in my head about things that I wanted to have that I wasn't getting from my current roles or what I could have felt like I could have done within that kind of narrower tech path. Um and so yeah now I'm here. Yeah, it sounds like you were a soft target for buy then build a couple years of consulting and and seeing some some how difficult or or how much of a crap shoot zero to one can be and and it's that was probably really good that you were disabused of the zero to one promise in those years because coming out of Uber maybe you were naive and thought they're all just like Uber. It is certainly when that is your No but but when that's your intro to tech it can feel like oh this is this works just go build the great product and raise the money and it it goes goes crazy. I do think the last five years sort of say 2017 on and and certainly 2020 on the venture world has been a much more challenging place the sort of all the free money of the early 2010s has not been there and a lot of companies have made have had to grow in different ways probably healthier ways I would suggest but so I don't think there are plenty of I know plenty of great ex-Uber folks building really interesting tech and who I'm sure many of will be very successful in their tech ventures and I'm rooting hard for them, but um I also think there are plenty who have found how hard that path can be. And so it can go either way and I I wasn't feeling excited or optimistic about any particular specific opportunity that I wanted to bet my next 10 plus years on. Yeah. Yeah. But you do know people from your from your Uber days who have who have gone out and and are are taking a stab at zero to one. Some who have not done well, some who it appears that they've got some traction. Absolutely. Okay. Interesting. Um and you said that you did well at Uber financially. Is I guess because you were there during you were there in relatively early days and then you were there for the IPO. So was that a material a material financial event for you? It was uh and and I think that plays into sort of my thesis as I went into uh acquiring a small business, but yes, I I had a certainly a windfall life-changing uh exit from from Uber and feel very fortunate and privileged to have had that experience and have gotten there when I did and have all that happen. At the same time, it wasn't tens of millions of dollars never work again in my life, but it was um it kind of put me in an interesting spot where uh a lot of the sort of like I'm confident that my I will be able to pay for my kids to go to college when when they're that age, right? That type of thing I can sort of tick those boxes, which is wonderful. And also I want to keep growing and building and and moving forward, but there's a little bit more to risk when you think about, you know, personal guaranteeing a really big loan or that kind of thing. So there's an interesting sort of middle space that is a great problem to have. I I don't uh you know, I'm very very aware of that. But with certainly part of my thought process as I was figuring out how do I want to go about this next step of the process. Yeah. And can you tell us what the dollar number was? Um not specifically but it it's like a a low seven figure type number. Mhm. Yeah, it's it's interesting. Um money is infinitely interesting to me and our relationship to it. Yeah, it's it's it's enough that you got some of the biggest life concerns are no longer concerns. Like you said educating your kids. But it's not enough to stop working. That's right. but but but it's enough to where you have a nest egg that you actually want to protect and don't want to put you know, risk or risk too much of. Yeah, very interesting. Okay. All right. So, you get by the building your hands. Does that do you immediately then do you have the light bulb moment that so many of my guests do? Uh I wouldn't say it was immediate light bulb. You know, I was still I was still doing I had multiple consulting clients for my business and I was working One of the things that happened when I left Uber was early pandemic and I had two young kids and I almost felt like I was given a gift of getting shoved off of the corporate ladder that I was on and an opportunity to rebuild my life the way I want you with the priorities that I wanted to have which largely in that moment meant family in a lot of ways. I've got now an 8-year-old and a 5-year-old. They were certainly younger then. And so the consulting practice that I built was really built around I want to It started because my daughter was in virtual school and I needed to be able to help proctor some of that because my wife works full time as well. Um so I was sort of taking some of those more primary duties and then even as she went back to school, I loved being able to drop them off and pick them up and do those kinds of things. And so I built that consulting practice around sort of the lifestyle that I wanted to be living, which was a really great opportunity. And as I read by then build, I had that I I was starting to feel that itch to maybe prioritize my professional work a little bit more, but also not wanting to go 100% all the way in the other direction. And so I would say it was a little bit of a slower process. I still had consulting work that I was doing. Um but it kept lingering in the back of my mind. And the real catalyst to kind of go full in, or not quite full in, but more full in on a on a search was that I had a uh one of my contracts that was ending. Um and I had some more time in my schedule. And basically instead of focusing on immediately backfilling that with the next client, I decided to treat searching for a business to buy as my my new client. And so uh it took, you know, that chunk of of my week to start working on talking to brokers and building, you know, reading Sims and putting together models and all the things that we do as searchers. And so um that was kind of how I got into it. It was maybe a little bit slower, but I I I had that idea of this is a good opportunity and a good project to work on and I think I want to put some time towards. Um and when the when the moment was right to do that, I started doing it. Mhm. Okay. All right. So not love at first sight as it is for so many of my guests. Intriguing. Uh but the the kind of timing had to align for you to kind of get serious about it. That's right. And you're doing this from DC? Uh no, good good point. We moved from DC to Houston, Texas in uh 2022. Both my wife and I Both my wife and I grew up here, our parents live here, and so that opportunity to get young kids closer to their grandparents was was a big selling point for us, and over the course of the pandemic, neither of our uh professional work at that point required us to be in person in DC anymore, and we realized we didn't need to be there. So, uh let's We loved DC. It was a tough place to leave in a lot of ways, but the opportunity to come be close to family was too much to pass up. Yep. I I know that I know that trade-off. Where in DC did you live, by the way? Where exactly did you Yeah, we lived on uh Capitol Hill or or Hill East for the locals over by RFK Stadium. Uh loved it. It was a great great neighborhood, great part of town. We loved DC. It was a great city. It's a great city. All right, Zach. Great. So, you turn your attention to your search. You've moved to Houston. W- Is your search geographically constrained? And And basically, give us a picture of your search. Give us a sense of the criteria. Yes, geographically constrained search. I wanted to uh be in the Houston area. I was reasonably industry agnostic. So, I had kind of the geographic constraint, but less of the industry constraint. I had a couple of, you know, I don't want to go into restaurants or You know, there are some things that I didn't want to do, but um certainly thought about HVAC and lawn care and some of those classic uh ETA type type spaces. But, also um given my background particularly in in tech uh and in kind of more software and products, things that were more you know, less in-person service delivery and more tech-enabled type products were also of interest to me, which is sort of more where I landed, but I was open to all of those things, and was was trying to do enabled, do you mean that you were also open to um e-commerce or SaaS, micro SaaS? I mean, were you also checking out Quiet Light and Acquire.com? Or do you not really mean that No, I I did. I was I Yes, I was looking at Acquire.com. I was looking at You know, I am not an engineer. I'm not a coder by by trade. And so, I sort of know just enough of the language to be dangerous, but would need significant help to actually be building software. And so, um starting those would have been tricky without a technical co-founder. But some of the more established micro SaaS type products, if there was an existing product there and maybe an engineer who wanted to stay involved, I could see how those could have worked and made sense. So, yes, I was looking at those kinds of things. Um I was also looking at a lot of e-commerce would certainly count or or products that are you leveraging software to deliver something to deliver a service or a product to people. There was a background check company that I looked at that was using someone else's software to help run background checks, but they were providing a background check service that didn't require much of an in-person type uh type service delivery. And so, that kind of opportunity potentially was interesting to me as well. What about SDE or size? How how much How much of this nest egg were you thinking you would put to put to work? So, I I started thinking I was looking for something in the half a million to a million dollars of SDE type space on on kind of a a premise that I one I was open I was open to an SBA backed loan for the right business, the right opportunity that I felt fully convinced of my ability to execute. Um I had a reasonable level of confidence that for the right opportunity, I could have raised equity either in like a friends and family type route or through some of the various avenues of people who like to invest in and people's small business ventures. Um Mhm. and I had my own nest egg that I was willing to to put on the line as well for the right opportunity. So, I was looking in that kind of half a million to a million. I was trying to be kind of that sweet spot of smaller than huge search fund and PE type stuff, but big enough that there's a little bit of meat on the bone. Obviously, well, not obviously cuz we haven't gotten there yet, but I ended up even on the smaller side of that, which we can discuss next. Um but I ended up on the smaller side of that in a business that I think has the potential to get to that half a million to a million of SDE space relatively quickly. Well, it can be quite it obviously higher risk when you buy a smaller business, but the economics are uh quite compelling to buy a business that's doing less than that range like half a million to a million of SDE and then you get it there within a year or so. That becomes even more uh economically interesting than just buying one of those businesses outright. Needless to say. Um growth is where wealth is built after all. So, tell us then any more to say about the criteria that of of the search and if not, what what do the mechanics of it look like? What are you doing here? Yeah, so so this was kind of late spring early summer of 2023 that I I started to really, you know, make this a project that I was committing to to putting 15-20 hours a week into. I started uh reaching out mostly to brokers. I used things like BizBuySell as a way mostly to find brokers. So, if I saw an interesting business with a good that that seemed to be represented by a professional broker, I would usually try to go to that broker's website or the more of their own channels, reach out to them there, uh express interest in whatever business I had seen, but also try to kind of get a sense of the types of business they were representing and what other opportunities might be available. And uh pretty quickly that happened to lead me to the the to look at American Dental Care, which was another listing that a broker that I reached out to about a different business happened to have in her portfolio as well. And I probably would have skipped over it on first glance given the dental component. I'm not a dentist. I'm not didn't have any seemingly relevant experience for something like that. But she mentioned it as an interesting opportunity. I said, "Sure, send me the SEM." And as I looked at it, what I saw was a business that wasn't really providing dental care. There were no dentists that were part of the team. And it isn't an insurer. They're not processing claims. It is essentially a marketplace business that's connecting dental practices with patients. And so it is legion for dentists and it is a discount for a cash-paying customers and I take a membership fee from those customers and funnel them to the dentists. And the dentists get new patients, which they're happy about, and the patients get care at a lower cost, which they're happy about. And I make a little money in the middle. And it's kind of a classic two-sided marketplace business, which I had really relevant experience doing. And so as soon as I kind of read those couple pages about it, my wheels started turning as, "Okay, this is the type of business that my experience lends itself pretty directly to and which maybe there's a an opportunity to to do something with." For you and for me also, my my tech roots, we know what marketplace businesses are. But it's actually not a term you hear much in our world of in the in the world of ETA. So just indulge me and define explicitly here what what a marketplace business is. And and and speak specifically to the power of them, but also the cold start problem. 100%. Yes, so a marketplace business is designed to bring customers together with suppliers in a single place and to take some kind of cut or fee or build a business and revenue off of the ability to bring those those two sides together or sometimes more sides. Uh, Uber Eats was a three-sided marketplace. You had restaurants and the delivery people and the customers who wanted the food. So, there can be multi-sided marketplaces. eBay is probably the classic first big tech marketplace. They built a platform that brought people who wanted to sell things together with people who wanted to buy things and by bringing more of those people together in the same place, you create more liquidity and more opportunity and it's a win-win-win for the people selling the stuff, the people buying the stuff, and the marketplace in the middle. Um, Uber's certainly a great example of this a little bit more recently and I saw that opportunity in this business as well. The The tricky thing is, um, a marketplace to operate effectively does need liquidity in the marketplace. It needs enough supply and enough demand in one place to actually to give extra value to both sides of everyone who's involved in that marketplace. And so, uh, if Uber was in a city with only four cars, that's not a very useful marketplace to the people in that city because they probably can't get a car when they need it. And even for the four people who have the cars, it's not that useful because they may have to drive 30 minutes across town to make a pickup because there are only four cars. But if you put 400 cars in that same city online at the same time, suddenly most people probably have a car within a few minutes of them and those cars don't have to go very far to pick someone up and suddenly you have a very useful and valuable marketplace for both the driver and the rider in that case. And so, I see my business in a similar way. I need enough dentists that most people in a city, when they look at my available dentists have a good dentist, you know, within 15 minutes of where they work or live. And if I can't get that density, then it's hard for me to get people to sign up. Um and I need people to sign up so that I can send leads to the dentists so that they want to be part of my my network. Um so yeah, that's that's kind of how a marketplace business works. And the tricky thing about it can be Sorry. Yeah, the tricky thing can be if you don't have that density or to get it started can be tricky because if you don't have the demand to start, then how do the why are the suppliers going to sign up to be a part of it? If you don't have suppliers, the the customers, the demand is maybe not going to sign up and use your product. And so buying an existing marketplace that already has some of this going was also particularly attractive about this opportunity. I wasn't building it completely from scratch. That was awesome, Zach. Really, you you clearly are a guy who's come from the world of marketplaces. Excellent explanation. I just want to emphasize a couple elements of that. I I I've always loved marketplace businesses. They're just so elegant as many people in in tech will will tell you. A few other but but a one point to emphasize is point of liquidity, which really gets to the point of both why it's hard to start these businesses and then why they seem like great businesses, but they do take quite a bit of babysitting, need quite a bit of babysitting. This liquidity is is so that if you're let's let's use one of my favorite marketplace businesses, Upwork. So if I you need liquidity is if I'm the buyer and I want to put up a job post, I need somebody to redesign acquiring minds.the the acquiring minds website, I need to know that if I put up up put up this project, I'll get bids quickly and a lot of them. So that's liquidity from the buyer side. And on the on the supplier side, the people who are the web designers who are providing the service, they need to know that there's enough volume of buy potential prospective prospects there putting projects to actually deliver certain deliver clients to them. So liquidity is is basically that in short order both sides of the marketplace can get their needs met either buy the thing that they want or sell the thing that they're selling. Um and so yeah so so getting that going is really hard because you're basically trying to get two businesses you need to sell most businesses just need to sell one constituency their direct customer but in a marketplace you need to sell two constituencies at the same time. You need to bring buyers in and they're they're going to say well it's only valuable to use your thing if there's actual sellers there and vice versa. So it's it's quite difficult. Um and then even when you got it going you you got to you got to kind of keep it calibrated so that there's not too much on one side or too much too much buy demand or too much excuse me too much demand or too much supply um and that was actually one of the geniuses of Uber the surge pricing concept. So they algorithmically built this way to solve the problem in real time. So if there was too much demand for people passengers then they'd raise the prices drawing in supply in real time. So all these Uber drivers would jump in their cars to go out into their neighborhoods and and and serve these customers just really brilliant despite its controversy just from a kind of economics perspective just totally brilliant. Um maybe maybe there was a precedent for that copied from somewhere but first I'd ever seen of it and of course surge pricing we now see we now see all over the economy. Um It was probably the most explicit version of it ever ever done. Okay. I would say you know I mean airline pricing right is is surge driven in a lot of ways but but in a much less transparent way. Uber did it in a pretty transparent hey you're paying 2x right now um which was a little bit controversial but like you said pretty effective. Yeah. Yeah. The only other thing to say about marketplaces and that then I want to say and then we can move on is the reason they're such powerful businesses is is because they're hard to unseat. So if I have a highly high liquidity high volume marketplace, if a competitor a would-be competitor wants to come in, they're going to have to go to all my buyers and say, "Hey buyers, come use my thing." And they're basically going to have to pull both sides of the marketplace away from my thing into their thing all at once because all of the value is very it's self-reinforcing and self-perpetuating. So it's it's So this is also where you'll hear tech people talk about winner-take-all markets. Like if you can if you can they're classic winner-take-all. If you can be the marketplace for a category, it's very hard to unseat you. Now I think it's it these businesses are not quite as motey as we thought. I mean, eBay is not as relevant as it was 10 years ago and it appears to lose relevance every year. The social networks are all marketplaces and we would have thought that, you know, MySpace would be around forever. It wasn't. Facebook is no longer cool. So in fact, they're they're not permanent businesses. They're not quite as as strong as they might seem, but they're still pretty dang strong. Clearly I like I like marketplace businesses. Okay, back to you, sir. That's great. No, no, this is wonderful. Now let let's hear more about the business. You you you you kind of talked about about American Dental Care. You talked about it in brief, but give us more detail, please. So so tell us who the customer is and what they get from American Dental Care, then we'll flip to the other side. Sure. So the the customers, the members of American Dental Care, are typically people who either because of their age, they're retirees, or their work situation, they don't have a dental insurance or other dental benefit from their own from an outside source. And so they're looking for a way to make their dental care more affordable as an individual uninsured cash payer. And so the customer tends to be you know, leans a little bit more blue collar, leans a little bit older. Um certainly the more problems they have with their teeth, the more likely they are to be involved. And so um that's that's kind of the typical member for us currently. I think there's a opportunity, a growth opportunity in selling into businesses uh as an alternative to offering a dental insurance benefit, you could offer a dental plan benefit. Uh and that is a part of the business that I am hoping to build. But um that's the typical Hey Zach, let let me uh interject with a couple of questions there. The Why would one of your First of all, why would a customer use you instead of dental insurance? Oh, you're going to maybe get me on a little bit of a soapbox there. Um they would So I Please. I would step right up. Great. Wonderful. I would say that dental insurance isn't generally is generally not a very good product. Is not a does not actually deliver very much value to very many people who have it. Um it typically has relatively um low limits in terms of how much it will pay out in a in a higher cost of care situation. And when you think about the premium that you pay for that insurance, plus whatever fees you're going to pay on on the care that you get, plus the limits that uh exist on it, there's a really narrow window of how much dental care you would need to use to really get meaningful value out of out of the care. I would say in most cases, dental insurance is prepaying for most of the dental care that you would get in a particular year. And if you end up getting all your teeth knocked out and needing $5,000 of work, your dental insurance is probably not going to pay for all of that anyway. So, unlike health insurance where like there's almost in most cases there's no upper limit in a catastrophic situation, it is going to cover you. You don't really have that in dental in dental insurance, and so there's less of that worst-case scenario protection. And so, I don't think there's actually for many consumers a lot of uh actual value that they get out of out of their dental insurance. Now, for many people they're getting dental insurance through an employer or in some other way where as they may feel like they're getting value out of it, but I would argue that an employer in general would be better off either just reimbursing dental expenses up to a certain amount similar to the premiums they pay for for a employee or and or using something like MyDentalPlan to help make that care a bit more affordable for their for their folks um without the full insurance package. That's my soapbox. Yeah, no that was great. And so and so the the pitch to a customer of yours to the end to the patient to the end user is pay X dollars a month and the the dental care that you receive is discounted by Y percent. So, actually let's put some hard numbers around that. Can you tell us like what one of your packages is and what the dis associated discount is? Sure. So, so an individual can sign up for our plan for $12 a month. A family can have their plan for $29 a month. And we have a fee schedule. There are fixed, you know, a a an adult dental cleaning is $59. Uh If you go get if you go get a cleaning as a member of the plan, and there's a whole list of fees for kind of your typical fillings. It depends upon how many fillings and which part of the mouth, but those are going to be $140 instead of $250 or something like that. Mhm. Uh and if the if they're if you're getting a service that is not specifically listed on the fee schedule, then a general dentist will discount their normal fee by 30%. A specialist like an orthodontist will discount by 25%. And so you have those sort of as your floor discounts for services that don't have a listed price. Um but the listed prices range from 30 to 75% off of what you might typically see as a cash paying price. So really the calculus, if you will, of the patient is the same as dental insurance. It's like it is is what I spend over the course of a year on in this membership, am I going to the savings that I'm going to get from that, is it larger? And if so, green light. Exactly. And I think we have it priced in such a way where if if you pay, you know, a year's worth of of the membership fee for my plan and get two cleanings and a full set of x-rays, you know, if they if you just do like the basic bare minimum, you actually might honestly, if that's all you're going to do, you may or may not need the plan, but it's a it's a going to be around a break-even. But if you tip past that towards I need to get a couple fillings or I've got to have a root canal or kind of anything beyond that, you will have saved money with the plan, even including the membership price plus plus the care that you get, that total will be less than if you had nothing and just paid cash at whatever the kind of normal going rate would be for those for that dental care. Great. Okay. And so now flipping to the other side, the value prop to the dentist, explain this. I heard you say that you're essentially lead gen, but lead gen discounted. So how how what does that look like? Yeah, yeah, really fair question. So the For dentists, uh many of them have availability in their They they have they have slack in their schedules. They could serve more patients. And so, um even a discounted patient, and we'll talk about the discounts themselves in a second, even a discounted patient as long as they're above sort of their marginal cost of delivering the service, in general, they would want to have that patient come in in the chair. And in our case, they don't pay to be a part They don't pay us anything to be in the plan. They just agree to provide the discounted rates. And so, when we can send them a new patient, that is, you know, free lead gen, free is not I mean, they're going to pay for it with the discount, but that's a new a new patient in their chair that they didn't spend anything to get there, uh which which is useful for them. Um and then, you know, the challenge, I think, in a lot of the medical space is how opaque pricing can be, and I find that frustration even in my seat right now trying to figure these things out. But, um my sense is that the pricing that we offer through our fee schedule is comparable to maybe a little bit less, but relatively comparable to what they might get reimbursed from an insurer or from uh Medicaid for folks who are on those types of plans. And so, um they're not They're getting less than they would get from a full price cash-paying customer, but not that much less than they would get from from a patient who is in and using an insurance plan. And so, it's it's comparable in that regard for them. And so, the discount is not wildly out of line for them, at least now. It had gotten a little bit out of line under the the previous owner, and we can talk about that, too. But, um that's kind of the value prop is is they're getting a similar amount of money for the service, and they're getting patients in the door that they might not have otherwise had. And Zach, my sense is that the reimbursement rates for insurance companies to healthcare providers, be they health healthcare or straight-up healthcare or dental is based on millions of data points and the you know the the armies of what's the word for somebody who runs the numbers at an insurance company? Typically it's Actuaries? Yes, but I think that just relates to death. But insurance yeah, the actuarial tables or whatever and and so you know they're arriving at these prices that they're going to give to their health care providers. The insurance companies are arriving at these prices. Very mathematically, scientifically based on based on huge stores of data which you don't have. So how are you figuring out what what numbers to you know to tell your dentists who participate in this what they need to be able to offer to your members? This is this is the process we went through kind of in my first couple months of owning the business was how do we how do we figure out what our fee schedule ought to be and in our case there is both the we have to thread the needle of both what works for the dentist, what they can make work for their business model and what offers a compelling enough discount to to the patient, to my customer to make them want to sign up the plan sign up for the plan and and take it and you know go use it in the first place. Um we did that by surveying competitors in the dental discount plan space and by surveying dentists who were already in our network and saying we're going through this process to figure out what our pricing should be. Uh help us understand what would work for your business and combining the data that we got back from dentists with our own market research and our own sense of what customers would be willing and able to pay we arrived at a fee schedule for 2024 that we hoped and and so far seems to be effectively threading that needle of getting a dentist dentist to be in our network and to take our plan and it keeps customers satisfied with the pricing that they're getting when they go to get dental care. Well, we're not done talking about the business, but let's return more kind of to the plot here. So, you're looking at this business as a buyer, as a potential buyer. You don't know anything about dental, but you do know marketplaces and you realize you've got a marketplace business on on on your hands here. What were some of the numbers around it in the history around this business? Yeah, so this this business was over 30 years old, had been around for a very long time, uh same owner through that entire process and had had, if you go back 10 or so years, had had a top line of 1.5 million, maybe even a bit more at one point uh for the business, but had been shrinking fairly steadily for at least five years. COVID was not friendly to this type of business. People did not want to go uh get dental care if they didn't have to and so that was tricky. Um and there are more insurance alternatives for folks who don't have employer provided insurance in a kind of post-Obamacare world. So, there's just more options out there for folks over the last decade. Um which I think is not necessarily a bad thing, but made it a little bit tougher environment for this business. So, this is a business that's been shrinking for a while and my sense of why that was was some of those external factors, certainly, but was also an owner who was getting towards retirement age and who was had had built a business in an era of TV advertising and newspaper advertising and call this phone number and we'll mail you a brochure and um had not really evolved effectively into a more internet-driven, e-commerce-driven sales process. And so, I saw an opportunity to certainly improve Yes. Uh you know, there was there was a a big opportunity to get to people looking for this type of plan on the internet that was completely untapped. And so, there there was some web marketing they were running um Facebook lead ads that basically tried to get people to give them a phone number so that they could just call them. And you know, there was some effectiveness in that, but not enough. And so, um I saw a significant opportunity to improve the the way the product was sold for the current environment. Uh and I learned this even more once I bought the business and was inside it, but as as the owner had neared retirement, he had really focused more just on continuing to keep his members and collect cash flow from those members and had really not invested on the dentist side of the business in a number of years. And so, the fee schedule was a bit dated and was not suitable for attracting new dentists into the plan. Um he hadn't kept up as much as I think he could have or should have with his existing dentists. And so, um that flywheel that we talked about that requires investing on both the demand side and the supply side of the business had really probably wasn't investing effectively on either side and was almost completely neglecting the supply side, the dentist side of the business. Uh and so, I saw that opportunity as well. Zack, so clear that it's like the previous owner wasn't doing enough to con- continue to kindle this this business. Um but the kind of external effects that you touched on First of all, let me understand. Is this a business model that is I guess if it's a 30-year-old business, it's not a new business model. It's an old business model. Is it one that still exists in the same strength it did in say the '80s and '90s? Or is the business model itself What Where does the business model itself stand in terms of headwinds, tailwinds? I think the business model itself has faced more headwinds than tailwinds over the last decade, 15 years, maybe. Through some of the stuff we talked about in terms of more insurance options through uh state marketplaces and things like that. Uh So, there've been headwinds. I also think though that the the consumer has just gotten a lot more discerning about understanding what a product offers. I think like I can't imagine myself as a 36-year-old man in 2024 seeing a brochure and sending a check and signing up for something, you know, just because I saw a TV commercial and got a brochure. I would be looking at the website to read more about it and looking at reviews that I could find places and trying to understand a bit more about the product. And frankly, for this product, there's a bit of a kind of an education curve. It is not insurance. It is a little bit outside the most common path for for making care more affordable. And so, there's a there really is an education process and a curve to get up for a potential consumer to say, "Okay, I understand what this is. I understand how it is going to benefit me and I am ready to sign up and pay for it." And And to some extent, not only am I ready to sign up and pay for it, but I also have the money that I need to go see the dentist and pay them for the services that I need, which is probably going to be several hundred more dollars in many cases. And so, all of that means it's got a little bit of a lengthier sales cycle that I think is even longer today than it was probably 15 years ago. And uh I'm understand that much more now 6 months into owning the business than I did a year ago when I was just learning about the business. A year ago, I didn't even know the business existed. But um So, yes, I think I think there are there are some headwinds there, uh but I don't think that's because the model can't work. I just think that it needs to be uh sold and positioned in a more effective way than it had been. And to what extent is there competition? I mean, is there an industry here of of dental benefit benefits organizations? Is that what we call the industry? Dental benefits organizations dental uh dental the the uh health savings plans is sometimes what is probably the the umbrella category that they fall into. Um Okay. Yes, there is there is an industry there. There there are competitors. There are a few bigger more national players. My my business operates primarily in Texas and Florida, uh has a little bit of business outside of that, and really primarily in the Houston metro and the Miami metro. And we've got great coverage there, but not as much nationwide. And so, um again, another growth opportunity, right? I see a potential to build a model that can grow geographically into more areas. There are already some bigger more established players in those in those areas, where I'll hope to be able to differentiate myself by being smaller with better customer service and not this big national uh brand. But as we talked about, that is challenging in a uh in a marketplace where there can be benefits of scale. I think the difference being a little bit that ultimately what you're not going to go see 50 different dentists. You're going to go see one or two or maybe a specialist. And so, as long as we've got good care and good pricing in your micro geography as as the customer, I think we can attract you to this business and and make you a customer. And that's that's kind of what I'm banking on. I heard blue collar earlier. I hear big in Houston, big in Miami. So, is this a uh also a largely Spanish-speaking clientele? Yes, a a decent uh I'm trying to think of it's probably a third of our our customers who tell us that Spanish is their first or preferred language. Um we have a a bilingual uh sales and customer support staff. A decent percentage of customers are are from that demographic. Zack, you'd also said in the pre-call that that the industry had suffered a little bit of reputational bruising at times. Tell us a little bit about that. Yeah, I think um you know, I certainly wasn't aware of it at the time cuz I was uh in high school and college and not thinking about it too much, but I think in the early I'm going to say it was probably the 2000 early 2000s. Um kind of 2000 to 2010 there were definitely there was a probably as reaching consumers was easier kind of for the first time on the internet there were my understanding is there were a decent number of companies that sprung up offering these plans, but having um either not very many dentists or poor fee schedules or essentially just kind of advertising, "Hey, sign up for this card. We'll mail it to you and you can go get free care." And then they would just kind of disappear. Um And so it was sort of that like middle ground of you could just mail a card that said, "Here's your discount card. You got it. You paid for it. Go use it." But then kind of disappear and not not be there. And so I think there was a stretch where there were some players in this industry who were less reputable than you would hope. And um that combined with some of what I talked about about it not being an insurance product, which is what people more intuitively understand uh led to there being some reputational harm in the industry. I don't get a sense today, I'm not hearing from people all dental plans are a scam you know, get out of here. But I do know that that 2005 to 2010 stage was when some states, Texas and Florida among them, chose to start regulating discount plans. I think in response to some complaints that they were hearing about less reputable folks in the market. And so we've held those licenses for you know, 15 plus years now. Um, I'm not worried about that for our business, but I think there are consumers in those markets who who maybe have some wariness around around these types of products. Thank you, Zach. Okay, you had mentioned $500,000 in revenue at its height, maybe a million and a half. So it's in terms of paying members, it's a or aggregate revenue, it's a third of what it was. Um, what do what does profitability look like? What does SDE look like? And how many employees? So, when I was first looking at the business, when I was buying the business, um, the uh, the 2022 top line was uh, 450, 460, I think. And the SDE that was uh, Mark did was 180, 200, right in there. Um, so, you know, 40% uh, ish margins there. And um, you know, but but was shrinking, right? And so there's there's that part of it to to figure out as well. And so, um, I bought the business for $450,000, which was a kind of 2.7-ish multiple on that SDE number. And which, you know, multiple-wise is pretty good, but it's a very small business. And so, and then it's shrinking, so there's a lot of risk there. Uh, but was enough for me to get comfortable that this was an opportunity worth worth proceeding with. Well, I imagine those juicy 40% margins was also an enticing feature of this business. Not not a bad not a bad situation on that, no. Not not at all. Did you say how many employees there are? Sorry, I might have missed Um, there were four employees when I when I took over the business, uh, plus the owner. It is now me and two of those employees. You know, that I talked about the old sales process was largely collect phone numbers and then call these leads over and over as many times as necessary to get them on the phone and try to sell them the plan. And it was pretty clear to me that that sales process was not efficient or effective enough to get the business growing the way that I felt like it could grow. And so, uh, after a month of running the business that way to make sure that I was confident that that was the right move, I let, uh, two of those folks go from those sales roles just frankly because I didn't think it was a role that the business needed to support at that point. And, sorry, when was that that you let them go and what have they That was a month into my That was a month into owning it. So, so there were four the day that I started after continuing to run that old sales process for that first month, uh, that was when I made the decision that no, this is not the way I want to go. Uh, I'm going to let most of the sales team go. And how long ago was that? How many months have you been Yes, I I have been I've owned business for 6 months. So, that was I bought the business at the end of September of 2023. I let them go at the end of October, um, and it's it is today the beginning of April. So, it's been another 5 months since then. And did you feel an effect on sales having completely kind of yanked out the sales process or were your instincts correct? Well, yes, there was some effect. We are probably We needed to sort of start fresh in terms of building a new website, building a new sales funnel that could convert either online or get people up that education curve online before they called us or we called them to to sell to them. And so, um, for for a couple months, I was we really didn't try to sell too much. If people came to us, we certainly were happy to sign them up. Um and and we did sign some folks up, but I we talk you talk about kind of the J curve involved in in uh buying a business and getting it going the way the way you want it to go. I uh sort of intentionally, I guess, accepted that there would be at least a few more kind of down months while we started to build the process that we wanted to have going forward. Um the costs were lower to a certain extent as we did that cuz we had two less heads on the payroll, but uh but I I think there's more There was rebuilding to be done on the sales side. And like I I I mentioned before, the fee schedule that existed for dentists was not going to be sustainable or effective. And so, we needed to go through that process of making a new fee schedule that we launched at the beginning of this year. And so, um you know, that flywheel that we talk about for a marketplace business, in a lot of ways it was pretty stagnant on both sides. And it takes a bit of uh significant effort to get it spinning again with pushing on kind of both sides of it to get it to go. That's what we're working on doing. And I'm starting to see signs of of early movement, but the business is uh you know, monthly revenue is down now from where I I bought it, you know, from that first month in October. I'm okay with that. That's part of the model that I built. That's part of what I expected to have in this business. I will admit that when you model a J curve that then shows it going up again, like that model looks great. And you're like, "Sure, I know that I need to accept six months of of down, and then it will go up." When you're sitting at what you hope is the bottom of that curve, but you can't yet see it going up, it feels the emotional feeling of being at the bottom of that J curve, hopefully, is a little bit more stressful than maybe your Excel model that got you there is going to uh to to show you. So, I've been learning some of those kind of classic small business entrepreneurial lessons as I go through this process, but I still believe in the approach that we're taking that is more internet first, less phone driven, uh take better care of the dentists and have a good fair fee schedule for everyone on both sides. I think that's still going to get us going in the direction that we want to go. Starting to see some of the early evidence of that and excited to kind of prove that out over the rest of 2024. Well, Excel spreadsheets making contact with reality is always an uncomfortable um an uncomfortable moment of truth, isn't it? No doubt. No doubt. Uh yes, and you can tell yourself that that will be the case, but you really can't quite predict how it will feel the moment uh that reality shows up. Yeah. Yeah. And I recall you telling me Zach that the seller you well, you've already told us in this interview that the seller had been neglecting the uh um supply side of the marketplace, meaning the dentists. And I recall in the in our pre-call you saying he literally hadn't had a conversation with a dentist, right? For like years. Wasn't that I I I don't know I don't know if I said that. That might be true. I I don't know if that's true or not. He What was clear to me was that he had um not been trying to build relationships with new dentists or work to get useful information from existing dentists to to grow the business. Um you know, to grow the the in engagement and involvement and the number of dentists in the plan. I I I think I think for the last several years, probably at least from COVID on, he had been you know, he's got he had kids uh a little bit later in his life and has has kids at home, too. I think he had just been in a like I'm going to coast on the cash flow that this business produces and not worry about it too much type space. I think he did worry about it to a certain extent, but not enough to try to take significant steps to change the direction of the business. And so, it was just kind of continuing its downward trend to where we are today. And I'm not going to I mean, one it created an opportunity for me to step in and hopefully do that. And so, I'm excited for that. And uh he'd been doing it for a long time and at one point had been making good money on the business and was maybe at a point in his life where that was the right I I said, I got into this business because I wanted to find an opportunity to keep the lifestyle that allowed me more time to focus on family and all that and also do something interesting with my professional time. And I think in some ways he was doing a version of that himself and maybe in a way that was more detrimental to the business than um uh he would have hoped or that any business owner might hope. But, uh I hope that he doesn't regret the way he's spent his time in the last few years and that he's enjoying the opportunity now to focus even more on his time now that he's out of the business and I'm here. Well, Zach, as you as you as you kind of single-handedly get this flywheel going again, you know, this I I I have like a visual of you like pushing like a millstone around. It feels like it some days. Are you So, so you've already told us how you're trying to solve one side of the marketplace, the buy side, the demand side, getting customers engaged again. On the supply side, talking to dentists. So, have you now had any conversations with existing or new prospective dentists? And I and I wonder, how do they react to the value proposition here? Maybe dentists know what this is. They're like, "Oh, you're you're a uh uh Sorry, what is it? A dental plan provider?" Yeah, discount plan. Yep. Like Yeah. They know what it is. So, it it's not a long conversation. Or or or maybe they don't. So, how how is it how have they reacted to your pitching, basically? Yeah, we we are you know Well, I would say two things. One is we're not probably the the perfect partner and product for every dentist. So, if you think about you know, there are dentists who are in expensive real estate with really nice interiors that are focusing very much you know, kind of that five-star dentist experience. Uh we are not the right partner for them because our pricing is not set to support that. And some of those insurers work some of those dentists I think do work with insurers and I don't totally know how they make that that model work. But it makes sense to me that my product is not designed for that you know, high-end five-star dentist to to kind of use that language. For that like three to four-star dentist is kind of our sweet spot, right? Where the pricing um makes makes sense for their business. They're in more of a volume business. They want to keep their seats full and bring people in and they uh you know, just the economics of having customers from our plan works for the economics of their of their business. Um So, there is definitely some self-selection that happens. I mean, some of those five-star dentists I think aren't even taking insurance these days. That's just like a we don't need it. We we've got our price. The people who want what we offer will come pay us for it. And that's great. You know, I I like that there are different levels of of sort of businesses out there. I think that works well for everyone in the long run. But um I so I think dentists sort of self-select a bit in knowing whether this works for them. And sometimes you'll call a dentist and they'll say, nope, not interested. And that's that's fine. And other times you'll call them and they say, oh yeah, we work with dental plans. We'd be we'd be happy to talk to you. Send us over your fee schedule. They want to see that fee schedule, right? And so, um they need to make sure that it does work for their for their business model. And for the most part, for the types of dentists that are interested in having this type of plan, you having customers from this type of plan, when we send send them that fee schedule, we get a pretty positive response from them. So, um I am I am optimistic that we are very much headed in the right direction with dentists. The tricky thing sometimes can be getting the right person from that dental office on the phone. Sometimes it's the office manager, sometimes it's the dentist themselves. And so, what we're trying to figure out is the Can we just call the front desk and get to the right person? Do we need to be scraping the actual dentist emails and and make contact with them? Do we need to send someone in person uh in an American Dental Care polo to the front desk and say, "Hey, will you give this to your office manager and your dentist and let have them let us know?" We're starting to work on that piece of it right now. Like I talked about how we kind of had neglected some of the dentist relationships. We launched the new fee schedule at the beginning of the year. We've spent most of the last couple months focused on making sure all of our existing dentists are aware of the new fee schedule and are using it and are happy with the direction of the business. And we're I would say over the last month and moving forward are are starting to get more into that expansion, talk to new dentist phase and are seeing promising early signs of engagement from them, but it's a little bit early to say exactly what that strategy looks like and how quickly uh we'll be able to add at dentists to the network. We still haven't gotten to the actual terms of your acquisition, which is a big part two of the way you kind of your overall thesis. Was um the cost of the business and the terms that you got um and your how you kind of downside protected yourself here. So, so what were the terms of the of the deal? You Remind us you paid 2.7x for a business doing call it 200 SDE. What was the acquisition price? $450,000 was the acquisition price. Great. 450 and and what were the terms? Yeah, so the seller gave me a note for $200,000 over 3 years. Um and I brought my own cash for the other $250,000. Um you know, I thought about getting some outside equity, but ultimately felt like on a business that's this size, one, I had the ability to buy the whole thing outright, and two, I that allowed me to maximize my upside. I was basically comfortable with the amount of money I was risking, and I would have you know, 100% ownership of this business and 100% of the of the growth value as it hopefully grows. And so I was comfortable it's just my cash plus this plus the seller note in the business. Um and then in terms of how how I thought about that overall, you know, my basic thesis on it was as I've modeled out sort of that three-year payback period to to the seller, um if the business continues to shrink at about the rate that it has been shrinking in the previous three or so years, um and I'm just not able to get any traction and turn this thing around, then at the end of three years, I expect to have completely paid off the seller note and have paid myself roughly the $250,000 that I uh that I put into the business. You know, more as salary and stuff at that point, but I I will have paid myself back and I will be three years down the road with the business still producing some level of cash flow that's 100% mine and that I've basically broken even on. Mhm. And you know, is there like a worst worst case scenario that could be worse than that? Yes, I suppose there is, but I think my like most likely bad case is is that. On the flip side, if I, you know, if I just get it growing a a little bit, if after this first year of being roughly flat, I can get it to grow 10 to 20%, it's a top line, you know, half a million plus business and that's great. Um it's not my preferred amazing outcome, but it's It's that I'm paying myself a reasonable salary and I own 100% of the business and I've got kind of a, you know, very classic, very small business type type outcome. Um, and on the really good side, if I'm right that I can use uh better sales techniques and better supply acquisition techniques to really grow this business, uh to acquire customers more efficiently, to grow into new geographies with new dentists, I can really see a world where where the business can two to three X in in three years and and maybe two to five X over over five or 10 years and I've got a really home run outcome. And so, as I looked at that range of outcomes, I was comfortable enough that if my kind of worst case scenario is I get three years of experience owning and operating a business and learning a lot of probably in some cases painful but good lessons along the way, that will have been worthwhile. And if any of those more positive outcomes happen, I will be somewhere between uh happy and ecstatic with with those outcomes and and it will have been really great experience. And although I only searched for a handful of months to end up in that spot, um the idea of being able to kind of get right into the game of owning and operating a business in that range of potential outcomes was uh was very attractive to to me and so, you know, to now be less than a year from when I started my search and to have six months of actual owning and operating experience under my belt, I feel really good about being in that spot and not being in the spot that I know a lot of people end up in where they're still searching a year in or even longer and so, um I'm really you The get in the game argument. Get in the game. That's right. I was I was in the get in the game camp. Uh and I'm I'm happy to be in the game despite the ups and downs that go into the day-to-day and week-to-week of running a business. Yeah. Yeah. Zack, that was a great breakdown of your analysis and And a couple follow-ups. To be clear, so your base case or your your not even base case, I guess I'd call it your your negative case, your downside case Yes. is continued decline at the current rate. So, not an acceleration of decline, but indeed decline. Yes. if it just declined if it if it declined linearly at the same rate, you would break even. You you penciled out basically a break even scenario. Mhm. Great. And um and and we should also highlight you just said it in passing, but I didn't good do a good job of surfacing it. Your search was very short. It was. Yes. It it was so it was June-ish to you said you closed in September. So, 3 months. at the beginning of August and closed at the end of September. Had you gone in By the way, had you gone into your search being like, "I just want to get in the game." or was it once this opportunity presented itself, that was one of your justifications to go after it? I think I know myself well enough to know that if the search had really dragged on, I would have gotten bored or distracted by some other opportunity. And so, um like I wasn't going to I wasn't going to search exclusively for 2 years um and and not do other things. And so, I would have picked up more consulting work or I would have One of those consulting jobs would have turned into an offer to come on board and I think I would have said, "The search isn't going anywhere. Let me Let me kind of do that." And so, I My time frame that I gave myself in in June when I kind of committed to making this a project was "Let's see what we can make happen by the end of 2023." Uh and if that had been, you know, under LOI in December, it's not that I would have given up on it, right? But um I was I was not on a I must buy business and I will do search for as long as it takes to find something uh timeline. I was on a "Let's see if there's really something here for me." type timeline. And so, yes, a little bit more of the get in the game type mindset from the beginning. Great. Uh the again, your kind of analysis here of of evaluating the various of the various cases uh from not great to great. You chose not to do an SBA loan. You talked about equity. You decided against bringing in investors. You did not do an SBA loan um and in fact came out of pocket. We're talking lesser sums here, not huge amounts of money. Of course, it depends on one's own balance sheet. If $250,000, how much money that is. We already know that you had a nice nest egg from your Uber years. Um so, for you, this probably wasn't all We know this wasn't all of your money, but not nothing. It's $250,000 is not nothing to anybody. Correct. Why not just buy a $450,000 for $45,000, meaning the 10% you know, that roughly that the SBA would would would enable? It sounds like this seller probably would have accepted a pretty aggressive I mean, he gave you 50% seller note. So, he probably would have accepted that. I mean, you And and then your downside is really minimized. I mean, your downside at that point is um well, I mean, sorry. Your downside's basically the same cuz you're going to have to personally guarantee the the whole cost of the business, but your cash out of pocket is is quite nominal at that point. Sure. Yeah, fair question. I think the way I thought about it was there are a few factors in this. One was uh frankly, as fast as it happened, I wasn't particularly like I hadn't really been talking to bankers. I hadn't really gotten to that that phase of of things. So, I didn't have um I didn't have a lot of I hadn't made a lot of progress there, and I knew one of the most important things to the seller was to close as quickly as possible. And so, um not in a like, I don't want you to do your due diligence, but in a like, I am ready to be out of this business. I was ready 6 months ago. I should have sold it 2 years ago, but I'm here. I want to get out of this. And so, um a fast close was was important to him and was something that I could accommodate. And then I think I think the other piece of it was I don't actually know, and again I didn't have the conversation, so it's hard to say. This business has very few physical assets, right? We've We don't sell There's no inventory. There's no building. There's no I think it would have been a little bit of a tough um maybe it's small enough that it would have been okay, but it doesn't, for my understanding of SBA underwriting processes, I'm not sure it ticks kind of their typical boxes, and so I wasn't sure how smooth that process would actually be. And ultimately for my my personal situation, like making a $250,000 bet on myself was a comfortable enough, acceptable enough um that and risk to take. And so, it just kind of decreased the complexity of of getting the deal closed, and I was comfortable doing that. Yeah. Again, a bit of a get in the game sort of argument. Yeah, I think so. You know, I thought about um I could I could have like taken a home equity line of credit to do it, and that might have been a little bit faster, but but then like the interest rate environment last year kind of sucked. Like I wasn't particularly excited about the, you know, 10 to 12% interest rates that would have been tied to any of these things. Um I You know, I I guess the market has done really well since then, so the the $250,000 left in index funds or Uber stock actually might have done even better, but I tend to try not to second-guess those things too much. I made the decision that felt best for me and my family in the moment with the information that I had, and still feel good about that. Awesome. Awesome. And but let me ask what interest rate did you get from your seller? Just curious on the note. 8%. Um it was a stock sale, not an asset sale. Tell the audience what they you think that they should know about that. Oh, yeah, fair question. Um so in our case because we had contracts with dentists um to take the plan that weren't assignable and we had licenses in a couple of states that uh the process of applying for new licenses under a new corporate entity would have been more onerous, we decided to go with a stock sale. Um and so the the agreement has all of the you know indemnifications and things that you would probably want to beef up in that case. But ultimately it was one of those things where I got comfortable with um that being the right way to go in order for the business to be able to continue to operate. It was sort of a um that was one of the moments in the kind of sale closing process. We hadn't We had started with an LOI that was going to be an asset sale and as we started looking at the contracts and understanding the process it became pretty clear that that wasn't an option and so it was either we agreed to go with stock sale direction or it was walk away and obviously we continued forward. Um in some ways there are some nice things about it. I didn't have to go set up an entity and uh open new bank accounts and do all of those sort of day one you know rehire employees. I didn't have to do all of those day one things which was kind of nice. On the flip side of that you kind of get to year end and you're working with an accountant to put together uh tax forms and license renewals and things from a business for nine months of a business that you didn't actually operate and are kind of piecing together from the records available and the memory of of the seller and all those things. I mean it's not that he left me high and dry on it but it was a little bit more challenging in some ways than just the clean start that you get I think in an asset sale. So um Yeah. I don't come away from it feeling like I would never do a stock sale again or like um it's the way to go. I think it was what made sense for the transaction and that's what dictated where we are and it has pluses and minuses, um, but made sense for our situation. Yeah. Yeah, it it seems like in a few cases where a guest of mine has done a stock sale, it's basically because well, similar to your case, they're trying to inherit some some of the agreements or licensure or whatever it is from from the previous owner, so that carries with the business with the entity. Um, so so that they're kind of compelled to do it that way. Uh, not that they necessarily wanted to. It's it was kind of like had to. Uh, with that, yeah. Sort of thing. Yep. Yeah, I think I think probably, practically speaking, if you don't have to do it for a business of this size, it's probably a little bit easier to do what most people do and do an asset sale. Um, Yeah. but also, if you find I guess in my my experience of it is it is not a reason that I would walk away from a deal in and of itself. Um, if that's what makes sense for the business to be able to continue the way that you wanted it to. Just in terms of growth, how many or in terms of kind of a picture of your marketplace here, how many dentists are in your network and how many member paying members do you have? There about 250 dentists and specialists. You start there's some optical vision providers in there as well. Um, and 2,000 to 2,500 members. Um, yeah, those are those are the numbers on both of those. When I hear 2,000 to 2,500 and you know, I feel like if you can get 2,000 to 2,500 consumers, I mean, this is a this is a market there are a lot of people in your target market. I mean, kind of middle class lower middle class, middle class people who go to the dentist. That is a huge market. So, if you can get if the business already has 2,000, 2,500 using very old, outdated, unsophisticated sales and and marketing, you should be able to get another 500,000. I mean, I mean, if you have 2,000, you should be in these big city markets, you should be able to get 20,000. I mean, there there just should be another 18,000 of of those folks out there. And that that would represent 10x-ing the business. So, uh you know, it's just interesting when you think about consumer numbers. 2,000 is just not that many consumers. And so, moving the needle there shouldn't be that hard. I I I think. I I Premier lifts to God's ears, well. Um I I I I had a I have a similar have had I I guess yes, that that is very much the thinking that I came into this with. I now have a little bit of experience enough to know that it's a little bit harder than maybe I thought it might be to at least get it started. I do think there's that flywheel and the momentum that will make it easier and easier as we go as we start learning some things. But yes, I mean, one of the things I really liked about It's hard to buy a half a million dollar business um that doesn't have customer concentration and uh I managed to do that, right? Like if you think about most of the small businesses that are out there at that size, it's probably a couple of big contracts and maybe a couple smaller ones and like that's it and you're looking at those businesses thinking there's real key customer risk here. I had 2,500 members where sure, some of them might not like things that I change and will leave or they'll be the normal churn factors and and all of those things. Um but it's not like all of a sudden in one fell swoop, 25% of my business is just going to disappear because a contract ends. The flip side of that that's a little bit tricky on the growth side is that when you've got a large number of customers who are small ticket customers, it takes a lot of them to actually get growth, right? It's not that the sales process to go get And so, that's part of why my thesis to some extent on getting those 20,000 customers is I want to go get the employers that have five to 50 employees and don't offer a dental benefit and get them to bring their their employees on the plan. Um, yeah, I still think the individual consumer piece is there, but when I think about a business that's five times bigger than the one that I run today in five to 10 years, I I kind of imagine that half or more of it is going to be small business customers with their roster of employees on on the plan. That to me is actually going to be maybe a smoother path to growth than the individual consumer. The individual just has I talked about it a little a little bit before, but, you know, if they need to go if they've neglected their dental health and in many cases for our target consumer, they have, then they may have $500 to $1,500 of dental work that needs to get done even with even with my discount plan. Um, and so, not only do they need the the $12 a month or the $150 a year to to sign up for my plan, but they need enough cash to go to go pay for that care. Um, or they want to do it, but they know they need a few months, so they're not going to sign up today. Like the the sales cycle is sometimes someone hears about me, they call us, they talk to us, and then we don't hear about them hear from them for a couple of months, and then suddenly they sign up. And I think in a lot of cases, they were trying to figure out the the steps of, okay, I'm going to need the plan, and then I'm going to need the money to go pay the dentist, and I've got to do a little bit of saving to get to that point, and oh, now I'm there, I'm going to go back and sign up. And so, there's just a longer cycle that's a little bit that in just 6 months of ownership, I'm realizing the work that it takes to get people all the way through that that cycle and that process to to get them in on board. The other thing that you would ask yourself about the the existing members is lifetime value. So, on the one hand and and if you haven't already said it, I recall from the pre-call, the lifetime value is really long here, which is awesome. I mean, you have I think you said you have customers that have been there for years and decades. On the other hand, if the entire membership are are folks who were who signed up five years plus ago, then that's a little worrisome because you're you're clearly he was just kind of farming existing customers and not being able to generate new ones or at least not trying to. And so, yeah, you you worry that that the the the existing membership base doesn't tell a story for what growth could be today in 2024, net new growth, net new members would look like how hard it it might be to get them. Yeah, in a lot of ways I feel like what I what I bought was an existing, fairly stable, but small base of cash flow, some dental some dentist relationships, um although not a ton, but some dentist relationships, and the licenses needed to of them. But that in terms of the actual like day-to-day business operations, selling process like the growth, anything around growth in the business, um in a lot of ways I feel like we're building from scratch and in a marketplace business that requires getting that flywheel going with those heavy, hard, early, slow-moving efforts that hopefully compound over time, we're really kind of starting from little to no momentum on that flywheel. And so, um I I I kind of feel like I bought a platform to build on top of that gives me some some comfort and some protection, but that in a lot of ways there are some start-uppy elements of like we're we're building we're we're sort of rebuilding product market fit and sales process and ideal customer profile and um supplier acquisition channels and like there's just a lot of stuff that is maybe not like zero to one, but is, you know, .1 to one uh type type feeling, if that makes sense. Not sure that's a real mentioned I think you'd said the phrase, "If I can turn this thing around." So, so do you see it as a turnaround or a.1 to one business or uh or what? Kind of how do you give me what the what what phrasing I should use in the title of this episode? Yeah, I know I I I I I very much see it as a turnaround project. I I think Okay. um Yeah. Yeah, it's a turnaround. It is It is a long-time business that has been shrinking for at least the last 25% of that long let that older business and um that I see I see that path. I can I can, you know, I have the vision for what it looks like three and 10 years from now for this business to be bigger, um but that that's not just doing what the This is not one of those um you go buy a million-dollar SDE business and just, you know, add another truck and get a few more customers and grow it 10% a year for the next 10 years. It's more of a this thing's been shrinking and we need to really do some things in new ways and really change what we're doing to get it um to turn it around, to get that flywheel going. And And if we can do it, I think the growth potential's even bigger, but there's a real risk in um whether or not we can we can get it there. Um so, we'll see. And so, how you feeling? You you you I I detect upbeatness in your voice, but you're about the things that you're saying make it seem like the risk you feel like the risk is uh the business has a much more risk in it than you perceived at the outset. I don't know that it's more risk than I perceived at the outset. I think it's I think it is the risk that I perceived at the outset, but but as we talked about a little bit earlier, the experience of of navigating it is is different than seeing it on the spreadsheet. And so, Yeah. um it really probably depends on what week you catch me on. The last most of last month, um I was probably on on more of the negative side of things, but that was not really because of how we were selling. It was we were moving offices and going through our annual license renewal process, and I was in kind of admin hell not getting to focus on the actual growth driving things that I want to be doing. I mean, they're important things that need to be done that enable future growth, but I feel like that's what a lot of these first 6 months has been has been kind of just cleaning up some of the baseline things that need to get done in order to grow in the future, and not yet getting to do those growth things. And so, the theories that I had 6 months ago about what it's going to take to grow this business, I haven't gotten to test as many of them as I would like to. Yeah, it's been a little bit of a longer process to get here, and I really do feel like I'm on the cusp of doing that, um and I'm excited for it and still optimistic about it. At the same time, I have 6 months of experience that shows, I think some of these things may take a little bit longer than I might have initially hoped in my optimistic case they would take. And so, I'm maybe even more aware of some of that risk and that downside while still maintaining that optimism for where we're going. Like I said, this week is more optimistic than not week, but uh in a few more weeks, I don't know. I could be back on the other side of it thinking like, yeah, that downside case is looking pretty likely. So, um you know, I I I'm enjoying the journey. It's a fun It's a fun process. Um it's a I'm learning about myself. I'm learning You know, I if I can kind of go on a little bit of a tangent, I grew up in business. I learned business in a 2010's VC-backed tech world where money was cheap and free and like budgets didn't exist. It was growth at all costs. It was if there's a way to get more customers and more drivers on the platform, whatever it takes, go do it. That was what I was doing and I'm now in this different world where it's my money that's on the line and I don't want to be you know, no one's going to just give me more and uh I I want to figure out how to make this work in a sustainable way. But some of those those things I kind of the the mindsets, the frameworks, the mental frameworks of how to operate a business and make it grow were built in an environment that I that I'm not operating in today and I'm having to sort of relearn some of that and realize some of that and I'm enjoying that experience. I think I value what I learned from Uber and also I'm really enjoying seeing things through a different lens where I'm the owner and it's smaller and it's my money and my risk. Um that's a fun experience but it's it's been educational. I've been learning a lot about business and about myself through the process. Totally. Yeah. Going from the lighting money on fire culture, venture capital culture to being highly resource constrained. It's you're seeing kind of two ends of the spectrum here. Lighting money on fire can be fun particularly when it's not your money but you know, that is today that idea is not particularly attractive. So I you know, I'm trying to find a different way to do it. And and it's I'm it's me and two employees now, right? And there aren't that many of us and we have to really like we can't do all of the things at once. I can't be going and knocking on doors at dentists and trying to uh talk to small business owners about signing up their employees for the plan and uh going through a a a move and a financial statement audit and the other stuff that we had to do last month. Like I can't I can't be in three places at once and yet I want all of those things to be happening at once and I'm having to figure out the right way to navigate that or do I hire for that? Just kind of the the stuff that small business owners have to do. I'm having to do it for the first time and it's fun, but it's challenging. Zack, anything that I failed to ask you that you want to share with the audience? No, this has been a a fun experience. I appreciate you having me, Will. Great. Well, Zack, thanks very much for coming on. Thanks for your transparency. Really interesting business. Point one to one experience here. So we'll have to we'll have to hear hear from you in a year as to how things have gone. Thanks a lot, Zack. Happy happy to do it. Thanks, Will. 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.