The Home Service Expert Podcast - Accelerating Your Business’ Explosive Growth With The Right Systems

Episode Date: July 30, 2020

Mark C. Winters is the co-author of the bestselling book Rocket Fuel. A CEO with more than 25 years of entrepreneurial leadership experience, Mark has worked with everyone from multi-billion dollar global enterprises to raw startups in their earliest stages. This frequent keynote speaker and Certified EOS Implementer has delivered over 500 full-day EOS workshops with companies across the United States. He has received numerous awards and recognition through his career, including being a Tech Titan finalist as an emerging company CEO,  the Rookie of the Year and Chair Excellence distinctions from Vistage International, and a spot on the “40 Under Forty” list by the Business Journal in both Milwaukee and Dallas. In this episode, we talked about entrepreneurial leadership, performance optimization, executive coaching, strategic planning, small business, EOS implementations...

historically, I've managed lots of people. And can I do it? Yeah, I was probably okay at it, but I had to work really hard at it. But my span, my natural span of control as far as how many people I can effectively have that kind of relationship is probably one. If I'm really candid with you, it's probably one. I can do one pretty well, but if it's two or three, I'm probably not going to give them the kind of leadership and management that they deserve. Same thing's true for most visionaries, right? You start spreading that out and it becomes less effective and it can get confusing for the organization, right? So, integration happens somewhere, right? If a visionary has three integrators, who's really the integrator? The visionary, right? The visionary is the final integrator that has to take all three of those things

and pull them together, right? So you got to decide and be smart about where you want integration to happen. And the structure we see work is you got one visionary, clear vision. You've got one integrator and they have this really unique, powerful relationship. And then that integrator is pulling everything together

in the rest of the organization in a real focused fashion that all feeds right up into making that vision happen. Welcome to the Home Service Expert, where each week, Tommy chats with world-class entrepreneurs and experts in various fields like marketing, sales, hiring, and leadership to find out what's really behind their success in business. Now, your host, the home service millionaire, Tommy Mello. Welcome back to the Home Service Expert. I'm Tommy Mello. And today I have Mark Winters. There's a cool book he wrote that pretty much changed my life. He's an expert in entrepreneurial leadership, performance

optimization, executive coaching, strategic planning, small business, and EOS implementations. He's based out of Dallas, Fort Worth. Rocket Fuel Ventures, he's a CEO visionary from 2015 to present. Peloton Ventures, president and CEO from 2006 to present. Revelation MD, co-founder and shareholder From 2007 to present And Vistage International Chair from 2009 to 2013 Very, very big on Twitter and LinkedIn He's a keynote speaker, CEO, certified EOS implementer And the co-author of the best-selling book, Rocket Fuel

With over 25 years of entrepreneurial leadership, he's worked with multi-billion dollar global enterprises like Procter & Gamble and British Petroleum, and even raw startups originally drawn up on a napkin. He delivered over 650 full-day EOS workshops with companies from around the United States. To date, he has started, bought, sold, and shut down 11 different companies. He has been a tech titan finalist as an emerging company CEO, and he was listed 40 under 40 by the Business Journal of both Milwaukee and Dallas. He was also awarded Rookie of the Year and Chair of Excellence Distinctions by Vistage International. I can't believe you read all that man so we've already talked and I'm really excited to get you

on I had the opportunity to talk to Gino and he I didn't know he was based in Michigan because that's where I'm from yeah and I just went back there for a bachelor party did a lot of golfing but you know first I like to do is just see how things are going and hear kind of your your history from your own perspective yeah so things are going well hear kind of your history from your own perspective. Yeah, so things are going well. You know, my background from my perspective doesn't sound exactly like that. You know, I started off, you know, kind of in big corporate. Went to work for Procter & Gamble coming out of University of Oklahoma and sort of cut my teeth there. Got the entrepreneurial bug.

I went back to business school at the University of Chicago. And while I was there, I saw people doing things that just seemed way more interesting than what I was doing. You know, they had come up with some widget that met some need and they would cost them this much to make it, but they could sell it for that much. Or they had some service gap that they had found that they could serve and make this much every one they did. And I said, man, that just looks really interesting and cool. So eventually I sort of burned my ships and said, all right, I'm going to

figure this out. And that led to this string of all these different entrepreneurial experiences that I've had. And, you know, candidly, some of them haven't been great, right? So, some of them have worked out very well, but some of them, you know, the value was in the education I got and what lessons I took from it. But that's all led to me sort of getting my scars along the path of being an operator. Somewhere along that line, I decided, you know, I want to kind of be less operator and more advisor. And so that's where I started getting heavy into peer groups. Longtime EO guy, I was on the board for a couple of terms, EO Dallas. And so I have a good appreciation for the peer model of Forum.

And so I started doing peer groups and some of those guys sort of drug me back into, well, why don't you help us do an operating system in our business like you did in yours? And I sort of reluctantly went along for that ride, enjoyed it. And then I met Gino and he and I hit it off and became fast friends. And then that led to writing the book Rocket Fuel, you know, and that's led to all the interesting stuff we're doing with visionaries and integrators today. Yeah. You know, I told you before I met a guy that said your book changed his life and Rocket Fuel. And EOS is just, it's amazing how to handle meetings and everything that goes through as well, which we want to talk about.

But I really want to dive into the book first because I just, I think every entrepreneur needs to read it and recognize what they are. And it's funny, I think I told Gino this, but I said, everybody that I meet tends to think they're both. And I know I'm a visionary. There's a lot of people that are much better than me. And I like to live in the visionary spot. I don't need to go outside of it. And I'm comfortable with it. So talk to me a little bit about the book and kind of some epiphanies like Walt Disney and Roy Disney.

That's in the beginning, I believe. It's been a while. I reread it not that long ago. But yeah,. That's in the beginning, I believe. It's been a while. I reread it not that long ago. But yeah, it's right in the beginning that Walt was the visionary. So let's talk about that. Yeah, so we kind of looked back through history and we found numerous examples,

the Disneys being one, where you had somebody who was a clear visionary. And those are the people that we knew, like Walt Disney or Henry Ford. But you look around the story of how they made it happen, particularly when they were in the entrepreneurial phase, right? So not like the Disney that we think of today, but when they were really getting rolling, you know, probably where a lot of your listeners are, you know, they're somewhere in that growth curve, right? They're figuring out how to get it done and how

to scale it. And they had this other person there. And so for Walt, it was his brother, Roy. And so you read a lot of these accounts and Walt's own words. He's like, you know, we would never have made it if it hadn't been for Roy. He goes, frankly, I probably would have been brokered, thrown in jail. And Roy was the, you know, he was the voice of reason. He was the one that could kind of take all this crazy, wonderful ideas that were coming out of Walt's head and get them focused and make them happen. And so they had a really great

relationship. And, you know, it was kind of a cool relationship because obviously, you know, they're brothers and there's a lot of love there. And, you know, you see that later on in the story after Walt passed away and what Roy went on and made happen in fulfilling the vision of Disney World. And so, it's kind of cool to see that. And that's the kind of relationship that a great visionary and integrator duo can have. You know, I've got folks I work with that'll talk about it as their business marriage. I mean, it's a powerful, meaningful relationship in their life and they invest a lot of time and energy into it and treat it like that. Yeah. You know, I've got my integrator, but have you ever heard of a company having multiple?

Because you can't have a ton of visionaries, right? I don't think you don't want that at least. It'd be two different paths. So is that possible to have many integrators or how does that work? So, within a company, and so, I'll talk about it as the planning envelope for an organization or for an entrepreneur, you know, like you. So, you got to kind of draw a box around what you're talking about. So, if everything inside that box is all really closely connected and aligned, it's one business or it's a couple of businesses that are, you know, really tightly run together. Maybe there's two entities, but they're effectively, you know, one business because of how it works with each other. Then you want to have one integrator because the visionary really only needs one integrator and typically can only work effectively with one

integrator, right? So, take me for example. Historically, I've managed lots of people. And can I do it? Yeah, I was probably okay at it, but I had to work really hard at it. But my span, my natural span of control as far as how many people I can effectively have that kind of relationship is probably one. If I'm really candid with you, it's probably one. I can do one pretty well, but if it's two or three, I'm really candid with you, it's probably one. I can do one pretty well, but if it's two or three, I'm probably not going to give them the kind of leadership and management that they deserve. Same thing's true for most visionaries, right? You start spreading that out and it becomes less effective and it can get confusing for the organization, right? So,

integration happens somewhere, right? If a visionary has three integrators, who's really the integrator? The visionary, right? The visionary is the final integrator that has to take all three of those things and pull them together, right? So, you got to decide and be smart about where you want integration to happen. And the structure we see work is you got one visionary, clear vision, you've got one integrator, and they have this really unique, powerful relationship. And then that integrator is pulling everything together in the rest of the organization in a real focused fashion that all feeds right up into making that vision happen. So I went through, there's questions in here to show me who I was. And you know,

I'm such so far to the visionary side. I mean, I figured out what I wanted to do, how much money I started with the end in mind and work backwards. And I mean, I had a project manager. We hired me and Adam, my integrator. And she said, okay, let's, let's get your projects under one roof. And I said, okay, come sit in my office. So two days later, we came up with 40 projects and Adam's foreseeing them all through. But I know that I'm the visionary. I've got these ideas and I know how we're going to get there and they're big ideas. But what's the best way in your company to identify if you have the right integrator or if you're a visionary? Because that's pretty important. Yeah. So there's kind of two different questions there. So one, let's talk about figuring out who you are

as kind of the first thing. And so you talked about, so there's an assessment in the book. We've also got that online. So, and actually we've kind of taken it and made it easier where we've got a combined assessment. You take one assessment and it gives you both a visionary score

and an integrator score. And really, that's the recommendations. I want everybody to take that so they know both scores. They see really where they are. And so, that's the first step to tell, right? So, you got to be really honest with yourself. Don't try to game the test. Be really honest with yourself, and that'll give you an indication of where you lean, right? It's not a pass fail kind of thing. It's orders of magnitude. So you're going to be able to see whether you're just a slam dunk integrator or visionary or whether, you know what, you can do some of that, but it's not your main thing or it's

not your natural thing. It's something that you're going to have to work more at. Somebody who scores lower on that assessment in either area doesn't mean they're incapable of it. It just means they may have to work harder at it than someone who is naturally going to score very high on those things. And that's at rocketfuel.com?

Rocketfuelnow.com is the place to go for all the Rocket Fuel stuff. And then the other question. Yeah, so the other question is how to know if you have a great integrator? Right. So a couple of different things there. So, you know, one, it's all a process. So when you, when you bring them on, you should have, as the visionary,

have made a real clear description of what you're looking for in that integrator. Okay. So there's a couple of different pieces of that. One is how you define the seat on the accountability chart. Another one is, you know, when you go through the matching process and you look at each of your respective scores on that assessment, there's areas where you may both be high or both be low. And there's certain discussions that you need to have in terms of who's going to take the lead for what.

And so that kind of goes into building out the profile of what they should be doing if they're going to be great. A lot of visionaries, Tommy, will create what we call a wish list. And a wish list is on the front end of the relationship, you know, and imagine yourself doing this. Maybe you did it with your 40 projects, but you just kind of, it's a brain dump where you just go, yeah, man, if this was true, I would love it. If this was true, that would be such a relief. If this was true, man, that would change our world, right? And you just kind of get all that stuff out. And then you hand that off to the integrator early in the relationship. And then the integrator helps you

put some priorities around that. You guys talk about it and you decide, you know what? Yeah, all this stuff, there's 78 things on here that are on my wishlist. Well, we can't do all that today. So we got to kind of look at it and figure out where this stuff goes. Some of those things you're going to go, you know what, this is a later thing. Let's put that out there in the future. Here's something that we need to get done this year. Here's something we need to get done this quarter. Here's something we need to start working on right away. And you kind of compartmentalize that stuff. So you have a shared understanding of how to attack it. So that's another grading point. If you have a shared understanding of how to attack it. So that's another grading point if you have a great integrator.

There's another tool called the Rocket Fuel Power Index that has eight different mindsets, eight different categories where we describe the range of what it looks like to be really great and really powerful versus on the other end to not be so great. And so the vision and the integrator can both independently work through that tool and see where you're at. And so if we've got really high scores on the power index, if we're knocking off the stuff on the wishlist, if we're delivering, you know, per the description of the accountabilities of the seat in the accountability chart, those are the kind of things that should be happening if you've got a great

integrator. You're hitting your rocks, you're hitting your numbers. I mean, things are getting done. Does that make sense? Yeah, no, I got it. This is genius stuff. I'm going to go get on the site here after we get off. So talk to me a little bit about going about finding these people, because that's the hardest thing is it's great. You get this great person and they make everybody's wondering 20 million people unemployed right now. COVID hopefully goes away here soon. But what's the best way to find the right person? Yeah. So so great question. And actually, you know, now may be a great time to find one because they may not even know they're an integrator and they may be available. Right. And so so that's kind of a cool thing. And so, you know, if anybody out there is an integrator, we need you folks. So, you know, raise your hand. But really, the process, it starts with a, you know, again, a self-assessment.

In the book, we've got a seven-step connection process for how you go about it. The first four steps of that are self-inspection, right? So, looking at who you are, looking at, you know, your assessment scores, looking at the company, you know, we talk about the visionary spectrum. Different businesses need different levels of visionary energy. And so, you need to understand how much visionary this particular business needs. And then the other side is an integrator spectrum. So different businesses need different levels of integrator energy, right? So some businesses are pretty straightforward. They're pretty simple. And you may need an integrator who's more of a, you know,

really project management expert that can really kind of make things move along. Other businesses are much more complex and they got a lot of different moving parts, a lot more people. And there you really need an integrator that's got that kind of enterprise horsepower that can kind of bring all that stuff together. So you need to understand that. And then you got to put the word out. And so sometimes that's as simple, but not necessarily obvious as putting it out in your own professional network. So, you know, putting it out on LinkedIn, telling your friends, if you're in a, some kind of a CEO group, whether it's EO or YPO or Vistage or Tab or whatever, there's a lot of great CEO groups out there. Tell your people.

Tell the people in your chapter. Tell the people in your forum. Let them know, hey, I'm looking for an integrator. Here's kind of what they look like. Maybe give them a job description. We've got a sample job description for what an integrator should look like that's at least give you a starting point.

And you send that signal out. And I've got story after story after story of visionaries that that's how they found their integrator. Next option you can look at from there is a fractional solution. So, there are more and more folks that are springing up that are calling themselves fractional integrators. And it's fractional in the sense that just like a fractional CFO or a fractional marketing person or whatever, it's not full-time, but it can give you that capability. It can give you that function in your team.

And it's a good way there to kind of start, to maybe try before you buy, maybe date a little bit before you get married, working with somebody like that. So there's folks out there that can help you. And then the higher end of the scale is if you, you know, you're willing to spend the money and get some help, you know, you don't want to do all this yourself. There are actually recruiting firms that are specializing in integrator search. And so they're getting really good at all the unique specifics of how you go out and find a

great integrator. And so you can get some help from one of them and get there maybe even sooner. This next question is a tough one, and I don't know if there's a good answer for it, but figuring out pay grades, I'm guessing most CEOs, and you can tell me if I'm wrong, are visionaries, and then they need to find the COO almost to be the integrator. Is that kind of the dynamic usually? Yeah. So I would say more often the CEO titles, you know, we think in terms of labels because we don't like titles because they have an entitlement expectation that comes with them. Right. So, so we try to stay away from that, but yeah, the, the typical, if you want to compare

it to a common title, the visionary, yeah, is going to be more typically the CEO. More importantly, it's typically the founding entrepreneur. Okay. Okay. The integrator is going to compare more closely with titles like COO, maybe president, maybe general manager, those types of things. So again, there's can be a lot of confusion. Same title can mean 1400 different things. So don't get too trapped up in that. But that may give you an idea just how to compare the language. Almost everybody in this company makes performance pay. There's a base on a lot of roles, but I'm a big fan of performance pay. Because a good question is, how much should I pay? You know, if you're a five person company trying to get to 15, these are the questions you're asking. This is our audience. So what would you say the best way to kind of – it's a tough question.

Unfortunately, the answer I'll give you is there's no one answer. The way we will often get asked the question is, do I have to give up ownership? Okay. And so the answer to that is no, but some do. Right? So on the ownership, non-ownership spectrum, we see everything. We see everything from somebody who brings somebody in with a, you know, a pretty meaningful piece of the pie to, you know, there is no ownership involved or there's some kind of a

gain sharing or, you know, sort of a phantom ownership, something where it's a little bit different, but it sort of mirrors it. So, we see those kinds of models. And then on the other side of just a straight comp, you know, fixed versus variable. Again, we'll see everything. I love your model, Tommy, of at least having some component of variable-based pay. Typically, the higher you are in the organization, meaning the more impact you can have, the more leverage there is from your, you know, seat in the accountability chart, you know, it just makes more sense that you'd have a, you know, a good chunk of it be variable, be performance-based. So, no one answer. So, it kind of depends on your philosophy and your business and then the market. And so, you kind of get clear on what you need and what the responsibilities are and then sort of benchmark using some of those

terms like we've used, you know, a COO, a president, a general manager for a company of the scale you're talking about. That can kind of help you zero in on some levels. And then from there, it's just, it's figuring out a deal that you can get done. Yeah, you know, I've always said there's three ways to pay people. Number one is equity, and it's an expensive way to pay. Number two is you could give them profit sharing. And number three is some type of salary or hourly or just a regular pay scale. So a lot of people like all three. And I love the idea of phantom equity.

And I'm actually working on that right now in my company because why would you want to give that away well there's several reasons why because it's a vesting period based on performance number one number two is there's only three things that could happen with a company you could sell it you could give it to the next of kin or you die and the government does something with it so most people say i want to sell it one day, right? And you've sold 11 companies. So you'd want your C-suite employees or whatever label you want to give them. I like the idea of labels to be excited to grow something that's able to sell and they've got a piece of it. And I think that's the reason why I'm choosing to do a type of phantom equity. Tell me a little bit about, you've grown and sold 11 businesses, if I'm counting

correctly. Yeah, so let's clean that up. So, I have not sold 11 companies. So, there's 11 different companies and actually that number is probably, it's probably closer to 13 or 14 now. Okay. Where we've had one of those outcomes, right? So, either on the front end, I either started it or bought it and on the back end, I either sold it or shut it down. So I've done both. So don't think that everything has turned to gold. It hasn't. You know, some of them have, but some of them, they've been ridden down the hard way. One of the things I'm super excited about and I'm obsessed with lately is a word, and I've been talking about it a lot, but arbitrage. It's buying a company for maybe a multiple of EBITDA, like three or four, and I'm worth 12. So I tripled what I paid for it because I'm a platform company.

It's a home service company. This is how they all work. And I'm obsessed with it. I know this question isn't on here, but I'm just thinking to myself here, it's starting to get fun to think about growth through mergers and acquisitions. And I don't know if you've had any experience with any of your business of growing that way. Yeah. So I've been on both sides of that deal. So I've been on the side where we were buying stuff and I've been on the side where the person or the company buying us, it was that kind of a play for them. I mean, that's the whole strategic buyer model. Yep, exactly. And so, there's a, gosh, I'm going to forget the name. His name's McCaskill. So, there was a book years ago, I heard about it actually from Vern Harnish and it was called

Selling Your Business for a Premium. Do you know this? I don't know. I haven't read that one. It's hard to find. Australian guy. And I met him and spent a little time with him. And, you know, it's a genius model from the business owner perspective to basically have your ducks in a row and have everything kind of really dialed in and simplified kind of the point of it. Think about a curve. And so, you know, when you start talking about a deal, pretty quickly on the front end, if what I'm telling you is true, you know, and that's what you want, we can quickly agree to a value. Okay, so yeah, that's worth about here. If that's all true, it's worth about here. And then you start moving forward and you start getting into due

diligence. And what do you uncover in due diligence? You uncover all sorts of risks, uncertainty. So, that value number starts to fall. And it comes down, down, down, down, down. The more stuff you find and there's a line there somewhere that's sort of the no deal line where once it gets down to there, either I go, nah, I don't want to sell for that. Or you go, nah, it's too risky. I'm out. And the deal goes away, right? And so this book is all about what are all the things that you need to have squared away? Actually, I kind of think a little bit about your book. His is a little more detailed, but your book is such a great assembly of all these different kinds of things you need to have dialed in. But he literally has like checklists of, you know, you need to have this document,

this document, this document, this document, all these and all these files and all this kind of stuff to prepare your company to be basically de-risked from the buyer's perspective. And so, you know, he would have file boxes. This was a while back. So now that would all easily be digital, but it was just kind of ready to go so that if somebody showed up and said, hey, you know, would you ever be interested in selling your company? He was ready to go. Every one of the questions had already been anticipated and answered. He had that book, he had contracts in place and all this kind of stuff. And so you think about it, that positions you really, you know, in a strength position so that when a strategic buyer like you, maybe Tommy comes along, you're all ready and you can really, you know, you can maximize those dollars because it's, you know, again, you can make four times more out of it than somebody who's just isn't smart enough to see those synergies can

make out of it. Well, you know, the cool thing is that I was going to mention is I've gone through this in my past of almost selling 20% and there was quality of earnings. There was all this diligence. There was background checks. It was crazy, the stuff I had. And what it did is it kind of prepared me to learn. But what's funny about a lot of the small companies that I've been looking at buying, and I've bought a few of them, is their financials are a mess.

So any advice I could give is get your financials in order, your balance sheet, your income statement, your P&Ls, your cashflow, because it's a mess. And as small business owners, especially in the home serviceness, because we're always out there working, it tends to be, we hate to do this stuff. They don't understand the meaning of top line, bottom line. And they either did I for a long time, and I didn't understand net or EBITDA or multiples, but how important is it to have a good financial setup for your company?

So it's huge. And so I'll give you a list of things that I think are really important. So, so yeah, you got to have your financials in order because if you don't, A, you don't know what's going on. You think you do, but you really don't. And when you get them tight, you'll see something that you didn't even realize was happening. You probably didn't realize it and they will for sure find it. Right. So get your financials tight. Second thing I would say is have an operating system. So we see companies that have implemented EOS going for significantly higher multiples because of it.

Again, it's de-risked in that sense. They know that these things are repeatable, sustainable. The processes are there. The accountability systems are there. They understand the people that are in the mix. So that's a value adder. Guess what else is? What seat on the accountability chart do you think can significantly increase the value

of the company? What seat can definitely increase? I'm going to say the integrator. You would be right. Why? Why do you think it cranks up the value? Because the integrator is helping to fulfill the vision of where the company wants to buy, right?

I guess. So you're buying the guy that's going to help bring you there. But the visionary sometimes falls off. You need the integrator still there. That's it. It protects me against visionary risk because visionaries, they leave. They're moving on.

They don't want to work for you. And so they'll sign a three-year contract and they'll make it through 12 months. Yep. Right? Because you'll kick them out or they'll get frustrated and leave. Right? So that's just the pattern. You know, very rarely do they make it through.

And so if you've got a strong integrator in place, the visionary becomes interchangeable. And so that's what, again, trying to minimize that risk, de-risk the business. That's a big move. So yeah, get your financials in order, implement a great operating system and get great at it and get a great integrator in place and you'll make your business work more. I had an hour long conversation. I read a book on the airplane called The Private Equity Playbook. Okay. And I called this guy. His name is Adam Kofi, and he's coming on the podcast.

I got a hold of him through LinkedIn after I read his book real quick. I mean, I flew through it. It was like super just exactly what I wanted to read about private equity. And I learned a lot of the terms and stuff. And I got him on the phone. This is just the other day. And he said, Tommy, you don't know what's going to happen. There's one thing we know for sure. And that's through COVID. There's a lot of uncertainty. AMC was one of the clients I was working to take this guy

public. And AMC was one of their biggest accounts. It was like a cleaning company. And the guy works with a lot of stuff that's not sexy. It's kind of funny. And he said, their value cut in half because they didn't take any chips off the table when they could have. And he said, when you analyze your business, I was talking to him in particular about mine. He said, if you take chips, you grow it. You get the right partner that accelerates your growth. And then people that just work on basically M&A deals. So he goes, you take some chips off, you rebuy in 40 or 49% because they're always going to want to usually take the 51% or

more. But he said, you're going to lose 20%. But on a great day, if everything went right, you're going to lose 20% overall of what the big picture is. But you're solidifying that, what did he call it? Generational wealth by taking some off here, here, here, and moving up the ladder for five turns. And I just, you've done a lot of businesses and I'm kind of selfish now because I'm taking your time for myself for a second, but everybody can get something out of this.

What's your perspective on when to sell? Because I'm going to, they're going to want me back in and I want to take this thing to the top. I just love the business. What is your perspective on that? So, I'll give you a couple of thoughts here. So, one is I watch companies that when I first meet them, the visionary is frustrated. They may be a little tired and they're like, we got it. Nothing's working. Maybe this will work, right? And so fast forward. And if they do a solid job of implementing EOS, they get an integrator.

They kind of do all the things that we're talking about. And then you fast forward, you know, two, three, four, five years down the road. And it's a whole different world for them because now they're able to spend their time doing just what they want. The stuff that drives them crazy, somebody else is handling for them and it's growing. Things are happening. All the things that they had in mind when they started the business in the first place are becoming real. And so then their motivation to sell or get out is at a completely different place. So I think it's a combination of those things, Tommy. So if you've got undone business, so something's really important to you, you want to hit a certain scale, you want to have a certain impact, you want to have some accomplishment

that's really important to you that's unfinished business, then you're probably not ready. If you're loving it, if you cannot wait to get up and charge out the door every day and go do whatever it is that you do, then you're probably not ready. That said, if I told you, hey, how much money you've got to invest, I want you to put it all in this one stock. I don't want you to invest in anything else. I want you to put it all in that and just kind of let it ride. Would you think that's a very wise investment strategy? No, but Warren Buffett would say, pick two or three tops and pick one that you know you could win at, which for me would be the best investment is one I could control, which is my business.

But yeah, I think you want to diversify is what most people would say. Right. So just, you got to be eyes open that that's effectively what you're doing. A lot of entrepreneurs are doing that. They're putting everything in their one business. And so it's not even two or three, it's one. And so they're really letting it ride. And so there's risk there for sure. And so you just got to be aware of that. And, you know, I do not claim to be an investment professional by any means, far from it. But, you know, those are the kinds of things that you need to get some good investment experts to help you sort through based on what your goals and objectives are. Right? Yeah. I mean, my quality of life, I think, is what people want to choose and enjoying the ride while you get there. I am in the fetal stages.

I'm like, I don't even feel like we've even started trying yet. It's so small, even though we're in all these states and hitting the best month we've ever had, but more importantly, the best profit we've ever had. And I'm like, you know what? If everything was to go, the whole business fell apart. I still have enough to make a million dollars a year on interest of my investments. So I have nothing to lose at this point. So I'm not in a hurry. The only reason I can see to do it is if I really found a partner who has tried and true to pull in a bunch of companies and they're the best, best possible private equity to do these acquisition deals. But I was just curious, you know, you've done these 11 business or I'm sorry, like 13, 14.

I want to stick to this because everybody's payday comes when you sell for the most part, you should be making money through it and living a good life. But I don't think that enough of us do. And I love what you said, be prepared to sell on a moment's notice, like have accurate financials on, you know, mine generally come out on the 10th after each month I'm shooting for the, the seventh, sometimes it's the 12th. I think that's a good number to have from the previous month to be able to really examine it. What are your thoughts on just gold nuggets? Because you've done this so many times. Is it just some general overall ideas that you want to share? So here's, yeah, from a financial perspective, the thing that I tell all

my clients and passionately beat on them to get in place is a 12-month rolling forward P&L, okay? So, every month, so when you close out your month or whatever, that's fine. I want you to do that, the sooner the better, when you're pushing to get as close as you can to the end of the month. I want you to look back over the last 12 months, okay? Month by month, so you see what that pattern is looking like. And then I want you to forecast that forward for the next 12 months. Okay. And to do that, I mean, you know, to forecast sales, what do you have to do? Your revenue, you got to forecast unit sales and pricing and you got to put all your assumptions in there around that. You've got to, you know, forecast your labor. How many people, how much are we going to pay them? When are we going to hire this person or that person? So all of your assumptions for the moves you're going to make that are going to have financial implications, that forward-looking forecast gives you a framework to talk about that in. And then I want you to have a financial meeting with your leadership team every month working through that.

And so here's what's going to happen. You're going to look at the next 12 months and you're going to go, ooh, that sucks. That's no good. In three months from now, we're going to be in trouble. That won't work. What are we going to do? And you start moving things around. You know, let's push that off. Let's reduce that. Let's shift that around and see what it does to the numbers with all the leadership team they're looking and involved so that they can hash it out. You can have the fights you need to have, the discussion and debate, all the stuff that you need to do to put together a plan looking ahead that is going to work to achieve what you want to achieve, that everybody can buy into and go, yeah, we can do that, right? So, that's a huge

one from the financial perspective, in my opinion. So, I have a weekly financial quick check and Ellen Rohr talks about it in my book, but she's the weekly financial quick check and Alan Rohr talked about it in my book, but she's the one that taught me it. And then Ross came on and Ross is a CFO. That's been, he started at 22 million, I think in North Dakota, he ended there at about 430 million of an ESOP. So the CFO, so I got this guy who's been where I want to go. Yep. And we just went over our financial quick check for the first two quarters. And we were taking a big peek. And we call that our budget, the next year's budget. And COVID has treated us kind of really good, actually.

I mean, I hate that it's there, but we're at 173% of our predicted net income. So it's darn near double. And I talked to the bank and I just told them, I'm looking for more of an investment bank. They're more of a general bank. And I said, Hey guys, if you asked me, you called me up and you said, I've got a commercial garage door for you to fix and you're going to make a lot of money. I'd have to say no. And I said, that's what I told them. I said, this is what we specialize in. And I want to know from your mouth, if you're the vehicle that's going to take us to where I want to go. And basically they said, we'll get you a $7 million line to start with, to do acquisitions. And you've already done some, but we want to prove out two or three, and then we'll,

we can open the gap to 20. And I was like, cause I told them I want 20 or 30. They said five to seven. Hopefully they're not watching this, but it's super cool because this is the best time ever. You know, I hate to say it, but when there's bad times, there's winners and losers. So the housing crisis built a lot of winners, believe it or not, because it turned into a buyer's market. And right now I believe we're into a buyer's market. And right now I believe we're in a buyer's market for businesses. Although the prices haven't come down, but they've came down

if you didn't do well through COVID. They really did because there's winners and losers. What's your take on this whole thing with COVID right now? And is it a good time to buy? And what would be your criteria for wanting to buy? Just you could use any business, but home service is really the audience, so. Yeah, so I think you're right on. I'm seeing a sort of a split, right? It's the strong ones that are doing fine or flourishing. And it's the other ones that are, for whatever reason, are weak and exposed and they're getting hammered.

The companies I work with directly, the vast majority of them are really doing pretty well. And I've got some that are doing exceptionally well because they made some kind of a smart pivot. The underlying client base somehow is benefited by the situation. I just got off a Zoom call with a guy who has an event business.

And his attendance has gone up because of virtual, you know, everybody now is a Zoom expert, right? So, they're not afraid so they can do it. And he used to do them in big fancy hotels. Well, now he doesn't have that expense, right? So, his profit, you know, line has gone through the roof. So, I see that. On the other end, I see folks that are either, you know, exposed to something that you really can't do anything about. So, I've got somebody I've seen that's in the oil business, bad place to be right now. Not anybody that I'm seeing doing really well there. Somebody else that's in the entertainment restaurant space that just sort of got,

you know, they got kind of hit early and hard. It's not just a traditional restaurant. There's some dimensions of it that are pretty unique that make it tough to adapt. But everybody else, they're aggressively making moves. How do we adapt? What do we need to change? Make those changes quickly, you know, reassess regularly and roll on. And they had an operating system in place. You've got a visionary and integrator that are on the same page, staying on the same page as things are moving really quickly. As the rate of change, you know, speeds up, you know, you got to pulse more frequently, right? You got to, you know, reconnect, reconnect, reconnect so that you stay together and keep up with it. So those folks are doing well. And so I think the ones that aren't, that's what they're missing, right? So the ones who are weak and exposed, those fundamental things are missing. So I think when you talk about opportunities, if that's the opportunity, you find a target that the home services space that, you know, they've got the client list or the, you know, the whatever, the whatever, but they just didn't have those fundamental things that we were just talking about in place. And that's caused them to get exposed and they didn't have the cushion there or whatever reason. So they're behind all that kind of stuff that, that happens. You're probably going to find some

things that are, are very attractive opportunities for the people that are strong. They're all over. That's why the big get bigger right now. I mean, when you see these times, I feel like you got to seize the day. And I feel like right now is there's just so many opportunities out there. So I'm a big systems and process guy. I mean, I study our KPIs and I'm like, I'm sitting there, we're looking at all, I have Ross put everything in the bar charts for me. And I look at a lot of them as percentages, and then I circle these ones and then I know where to spend time. I study bottlenecks.

I study outliers and I train on the outliers. The small 1%, I circle that and I say, let's go talk to these guys. But I identify what they're great at and I just make it come throughout the company and it's just processes and systems are everything. Talk to me about growing a business with or without them. So first, just the way you said that, have you read a book called The Goal?

The Goal? Yeah. I've got a million books. I know, I know. I'm going to throw another one at you. So this book's called The Goal and it's an oldie but a goodie and it's by a guy named Ellie Goldratt. And the model is exactly what you're talking about. It's finding the bottleneck, knocking it out. And then what happens when you knock out the bottleneck? Another one pops up over here and you go attack that, right? So you'll enjoy that. When I think about process, why have process? And it's really about scalability. It's about leverage. It's about getting more out of what you got repeatably, predictably at a certain level of quality. So that's the why. And, you know,

what's really important, you know, in EOS, we talk about having your processes followed by all. And that means something really specific. So first, it means you've got to identify what those core processes are for the business. It means you've got to document them at a high level with your current best thinking about how that process should happen. It means you've got to train folks. Whoever's involved in those processes have to be trained for, hey, this is what it's supposed to look like. This is how it's supposed to work. The expectation is that it will work like this every single time we do this. And then you have to identify measurements to put around it to measure two things. One,

is the process working? Is it doing what we want it to do? And two, are people following the process? So you want to measure compliance. And then once you've got that in place, you've got to create great accountability around that so that people are held accountable for actually following the process and doing the process the way that is our current best approach to doing it. And then the last thing we do is we close that continuous improvement loop and we're always looking for ways to improve it. So we're always looking at the process going, man, how could we make that? And there's your bottlenecks, right? How could we make that a little faster, a little less expensive, a little smoother, a little simpler, a little more reliable, whatever. And so you work that process on your process and that's where you build a machine. You know, you turn your business into a machine that just, it just does all this stuff.

Oh man, my brain is going 90 miles an hour because I'm thinking, I think one of the epiphanies I've had in the last few months is really being able to look backwards. And as being a visionary, that's just rare. I've forced myself to look backwards and I'm not good at looking backwards,

but I'm getting better. And the backwards looking is the bottlenecks. But what I found was millions and millions of dollars, a quarter, you know, and I found it because I'm getting better. And the backwards looking is the bottlenecks. But what I found was millions and millions of dollars, a quarter, you know, and I found it because I'm like, but now I'm asking myself and Adam's amazing, but is it the integrator or can the visionary have a little bit to look backwards and fix bottlenecks? Because it's not sexy, but I don't know. Yeah. So, so to me, you're a platform company, right? Yep.

So what's the vision? The vision is, all right, let's figure out the system, the macro system here that's working across all these different types of businesses, right? And if I can solve the problems once, I can reapply that solution many times. And that's why you're able to get the higher multiples, right, than a standalone.

I can get up to 17 times if I do this, right? Right. So, to me, that's a little bit, for you, it's a visionary exercise, right? As you look back and you see where those problems are, you're going to be able to reapply that solution. So, you know, that's just fun. That doesn't seem inconsistent to me. Good. Good, because I'm having fun with it. And I'm using some tools right now for interviewing. And I just, I love it when these ideas, I got tingly earlier when we were talking with my, we had our financial quick check.

And I said, guys, when people apply, they go to this, it's almost like a Zoom that pops up for an interview. So right as you apply, you could do the interview. Then we watch it and we look at it. And I'm having my employees say, you know what, let me ask you something. So they record the question. They say, this is a picture of me. And it's, I got this big check. It's $3,000. You could draw on it. It's a whiteboard check. And I made three grand last month from recruiting a couple good buddies of mine that I know are great employees. They're great workers. And I was able to recruit them and the company gives me $1,500 per person.

So I made out last month. Let me ask you something, Mark, would you be able to, and they can't say the name specifically because they don't know, but would you be able to help recruit us? Cause that's what we're trying to do. So every single one of the questions in this,

this program, there's like five or six of them and it's a different employee selling the new person on the company and then asking them a question. And it's just like, this game of business, I've probably said this 100 times in the last two weeks, but I feel like I'm playing chess and everybody else is playing checkers. I seriously feel like we're cheating. It's not fair. But it's fun. And I know we're running out of time, but I want to ask you a few questions because you got Rocket Fuel Academy or university right there. Tell me what that's all about.

So Rocket Fuel University is the place for all things Rocket Fuel, all things visionary and integrator. And people come in once they join, we've got a little course that we have everybody take. That's just Rocket Fuel 101. It's just the basics. It's the fundamentals. They take that and then they pass a little quiz. We want to make sure everybody understands that. And if they still feel like this is for them, then they move

into a community where visionaries, integrators, and really anyone who wants visionaries and integrators to be successful. So these recruiting firms, these profiling companies, all these people that are interested in how visionaries and integrators do can get in there and interact. to be successful. So these recruiting firms, these profiling companies, all these people that are interested in how visionaries and integrators do can get in there and interact. So like earlier today, I had a sort of an office hours Q&A call with the members of that group where they're able to ask questions and folks from the Rocket Fuel team, including me, will get on there and answer and, you know, other peers, other visionaries and integrators will share their experiences. So it's a pretty cool peer group. And then there's an online community that they can,

you know, build these relationships and interact. So, that's sort of the foundation. So, everything RocketFuel happens from there. And from there, we take the integrators specifically and we've got a whole development path for them. So, if an integrator wants to become truly great as an integrator, see what truly great as an integrator, see what it looks like to be great, see how they stack up against that. You know, they take our masterclass, our Maximizer masterclass over there. And if they pass that, then they'll have an opportunity to actually get certified as an integrator. And so for, you know, your visionaries that are out there looking for integrators,

you know, wouldn't it be great if there was some sort of a stamp that could get put on somebody that would let you know, at least these people know what it looks like to be great. And then we've got different levels of certifications they can get as they meet different criteria along that path. So that's really what it's all about. How do we find them? How do we get them prepared? And then how do we get them matched up with a visionary so that those two can go out and change the world? You're going to hate this question because it's probably going to screw up like a funnel or something, but I'm really excited right now. I hope Adam's still here because I'm going to tell him he's going to this academy, but roughly how much should someone expect to get?

Is it all different or, or it just depends? Just spend on the integrator academy. Yeah. So to get in the Rocket Fuel University, it's 29 bucks a month. I mean, we want that to be super low friction. So you're coming in, that gets you in the door. And then once you're in there, it depends on which courses you take.

So I don't want to get into pricing for specific courses, but it's all very reasonable. And we just want to get people in there and get them prepared, get them trained and get them back out there making a difference. I got these guys running so hard right now. And I said, you know, what's so cool, guys, is we could run together. And I said, you guys are keeping up and I'm going to continue to pump the gas.

And I said, there's certain days you're not going to like me because you're, thank God I've got a bunch of workaholics around me. But what's really cool is I have them reflect on their time on a weekly basis. And we actually keep journals of what we could have done better. And I figured out what I made last month. And it's a pretty sizable amount per hour. And I'm like, you've really got to value that time. And I think as an entrepreneur, as you grow, your time becomes more valuable. And I told these guys, man, without my executive assistant, without the people around me, people look at me, they go, how do you do it? I go, it's the systems and the people around me.

And it's the systems that pick the people. See, that's what people don't understand. They go, well, what's the most important? Is it people or is it the process? And I said, the process is what picks the people because I do the predictive index and the cognitive tests. And then we do background and drug tests. And these are all processes.

And I'm doing even way more than that now on top of that. And we've got a killer team. And I think the biggest thing I found with amazing people is they've got to be competitive. They've got to want to win. And when I get people around me that want to win, see, there's other people that say, this big list comes out and they say, Oh, at least that wasn't last. And I'm like, no, no, no, no, no, no. If I'm number two, I'm like,

and there's a list of 50. I'm like, what happened? See the top guy sets the curve or the gal, you know, it's super important. Oh man. I can sit here all day with you. I love this stuff. What is three books that you'd recommend, Mark? And you've already given me a couple that, that I'm going to get into the goal and sell your business for a premium. It's a game changer. So read the book. And read, read Home Service Millionaire. You can't see mine. Yes. Thanks. And what are the three other books? You've got three other ones? Oh, boy. So let me give you, so I'll tell you one that I just read that I really like.

It's called Disunited Nations. And that's sort of a little bit off business topic, but I think it's really, really relevant. And the author's name is Zeihan. It spells Z-E-I-H-A-N. I think his first name's Peter. I think that's right. And from a global perspective, that will really challenge your thinking about what the future is going to start to look like.

So that's one. You want two more? I would love it. You don't have to, though. You've already given me three, so it's up to you. I'm going to go with the three I gave you. Okay. And if someone wants to get ahold of you specifically, Mark,

you know, I realize you're a busy, busy guy, but if they just want to connect, is it LinkedIn or social? Yeah. So I'm pretty much Mark C. Winters everywhere. So if you will, you know, on any of the socials, Twitter, LinkedIn, Facebook, whatever, Mark C. Winters and, you know, the website, markcwinters.com will take you to kind of everything I'm working on. Rocketfuelnow.com will take you to the rocket fuel specific stuff. But I think that should get anybody hooked up that wants to. And then I always like to do this at the end. I've got a whole laundry list of stuff I need to do now from you. And it's a good thing that it happened. And people, they think I'm crazy. They're like, when's enough enough?

And I'm like, if I felt like I was doing too much, then it would be enough. And they say, when do you sleep? I'm like, I sleep 10 hours a night. I go to bed. It's fine. I work smarter, not harder. It's not hard stuff. I've got the best team you could ever imagine. So I'm going to get all this stuff by the weekend. And I got to take a test this weekend too, for insurance. Cause I'm going to get all this stuff by the weekend. And I got to take a test this weekend too, for insurance. Cause I'm helping my sister out. So that's 40 hours. But she said it'll probably take me five hours of studying, but I'm going to do this right away. And then I always like to end it with letting you kind of spend a few

minutes with whatever you want to talk about, maybe some action items, maybe, maybe some really, really amazing tips that's earth shattering for people. And I'm going to give you the last few minutes, give you the floor. The thing that just is coming out of my head right now is don't let perfection or hesitation get in your way. Just jump in and do it, right? So these new things that you're trying, you know, new ideas that you're getting thrown at you. The place I see people get stuck that really hurts them is they don't make a decision. They don't take action. Tommy, that's

something that you're great at. You take action. And as a result, they never learn. They never find out if that doesn't help them at all or it was the magical thing that just changed their life and changed their world. So So keep yourself open to those new ideas and say, yes, try it and see what happens. So that's what I got for you. I don't know if that's earth shattering or not. It's earth shattering because some people wait until it's perfect. There's never a good time to do things. There's never this open opportunity. It could always be better. It's progress, not perfection. I think you hit the nail on the head there. I really, really appreciate your time today.

I appreciate your time. I'm definitely going to get involved with the stuff that you mentioned. And I look forward to speaking with you soon. Awesome. My pleasure, Tommy. So great to see you. Thanks for having me on. Thanks, buddy.

Hey guys, I just wanted to thank you real quick for listening to the podcast. From the bottom of my heart, it means a lot to me. And I hope you're getting as much as I am out of this podcast. Our goal is to enrich your lives and enrich your businesses and your internal customers, which is your staff. And if you get a chance, please, please, please subscribe. You're going to find out all the new podcasts.

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