Host: Ah, the J Curve. This is the phenomenon that happens in probably most acquisitions where profits dip after you buy the business and then rise again and hopefully much higher than they were when you bought. The name comes from plotting earnings on a graph. The line looks like a J. Now the question for your acquisition would not be are you going to experience the J Curve? You probably are. You should expect it. Instead, it's how long will the J Curve last? I was at SM Bash this weekend and more than one business buyer felt discouraged after having owned their business for well over a year, maybe two, and still feeling like they were in the J curve. You'll hear a similar sentiment from today's guest, Matt Dirndak. Matt is looking at having doubled revenue and earnings, but it's taken him three years and those three years have felt long. I'm not sure what the average J curve is in any way. It would be dangerous to try to pin down an average because every situation, every business is unique. But I would suggest this like the search, like the transaction. Like so many things in buying businesses, it's going to take longer than you think. Back to Matt. He bought a really interesting business, an E commerce enabled parts business for big construction vehicles. Listen for how Matt, without his own experience around such machines, learned this business and how there's a moat that keeps Amazon and other would be entrants at bay. Please enjoy this conversation with Matt Derndeck, owner of DHS Equipment Announcements Last week I told you about the launch of Smithlist, a platform for business owners to post leadership roles they're seeking to fill at their businesses. It's a job board for operators of small businesses. Well, roles have been posted and you can check them out@smithlist.com you'll see the caliber of opportunities that Smithlist will collect all in one place. A couple examples A sponsor is looking for a CEO to come run the first acquisition of a rollup the platform business. The goal is to grow and acquire to $200 million in gross revenue within five years. Immediate P&L responsibility for $15 million in revenue and over 60 employees. The business is a manufacturer of custom metal components based in New England and the sponsors got it under Loi. Another role. The CEO owner of a wood products manufacturer is looking for a chief Operating Officer. This is a strategic operations role to start with. Potential to grow into full president and maybe one day buy the business from the owner. The owner is actually a searcher himself who bought the business back in 2015. Tons of untapped potential at this 25 person furniture manufacturer. Their 40,000 square foot manufacturing facility is only at a quarter capacity based in Manchester, New Hampshire. So if you go to smithlis.com, you'll see much more about each of these roles as well as a few others. And you can apply for the jobs right there. And you'll hear me continue to mention new roles in this space on the pod going forward. One more announcement. The Self Funded Search Conference is coming back around September 13th through 15th in Dallas. Come meet other self funded searchers and learn from two packed days of highly tactical content. There was a wait list last year, so you should probably not wait. If you want to attend, get your ticket@self fundedsearchconference.com okay, on to today's episode. Welcome to Acquiring Minds, a podcast about buying businesses. My name is Will Smith. Acquiring an existing business is an awesome opportunity for many entrepreneurs and on this podcast I talk to the people who do it. A PEO run by a searcher for searchers. If you're running a company with less than 100 employees in providing health insurance, you could secure better benefit plans at a 15 to 30% discount through a professional employer organization or PEO. Aspen HR, run by search fund veteran Mark Sinatra, understands the needs of search operators and could be a great solution for you to receive HR compliance and diligence support, a powerful HR tech platform and Fortune 500 caliber benefits, all for a fraction of the cost. Check out aspenhr.com or contact Mark directly@markspenhr.com

[5:23] Guest: Foreign

Host: Matt Durndack welcome to Acquiring Minds.

Guest: Thanks for having me.

Host: Will Matt, you bought a B2B E commerce business, so a bit of a different business than one might think if you say E commerce. And we're going to learn all about this business in this category today and your story of how you got here. Start us off please, Matt, with with a little of that. Give us some background on you, please.

Guest: Sure. So I grew up in Florida. My dad owned a solar contracting small business and yeah, I went to Florida State for a year, dropped out and bought a homevestors franchise. They're the we buy ugly houses billboards which you may have seen the last 20 years or so.

[6:23] Host: The caveman one.

Guest: Exactly. Yeah, they added a caveman. Yeah, they did.

Host: I didn't realize that that was a franchise actually. That it was a big corporate concern. Interesting.

Guest: Yeah, yeah, I didn't either. But then when I found out it was a franchise I left college to to buy one. And yeah, did that from like 02 to to the great Recession, great financial crisis and yeah, Thought I was a great real estate investor. Realized I was not and.

Host: Because you'd done well during the run up.

Guest: Exactly. Right. As did a lot of people.

Host: Right, right.

Guest: Everyone was a genius. Yeah. I mean, I started when I was 19 and you know, by the time I was 21, 22, I, you know, on paper was a millionaire, I suppose, very much on paper though, and thought that I'd keep everything in that asset class as leveraged as possible for forever because real estate never goes down. And then, yeah, had a nice implosion at the bleeding edge of.

Host: You had a real estate portfolio and you were a franchisee. So in the. We buy houses or, or, sorry, what is it called? Home.

Guest: Yeah, we buy ugly houses. It's kind of what everyone knows it as. It's HomeVestors is the name of the company, but everyone knows it as we buy ugly houses. But yeah, a lot of people used the franchise as a vehicle to build a portfolio of houses.

Host: I see.

Guest: Yeah. So.

Host: So you weren't, you weren't building much. Your intention wasn't necessarily to build out this thriving franchisee. Instead it was to use that as a vehicle to build your own real estate portfolio.

Guest: Primarily it was, it was both. I mean, what did me under was I had a ton of hard money loans, you know, high interest rate short term loans for my short term inventory. And then the music stopped. So.

Host: Yeah. And what happened when the music stopped?

Guest: I did my best to liquidate things as soon as possible. I, I wish I knew how to architect. I wish I had known how to architect. Some sort of short trade. I feel like I, I knew what was coming ahead of people but had no idea how to properly react to or trade on that other than try to get out of things. And yeah, it looked like a financial situation that if a personal bankruptcy could have made it better, I would have filed. Personal bankruptcy.

[9:10] Host: Wow. Wow. So down to zero or negative?

Guest: Negative, yes.

Host: Yeah. Yeah. And this is, so this is, I assume, 2009. Ish.

Guest: I mean that was actually. It got real bad for me even the third quarter of 2006, just because I was in Florida and like it. Again, it was the very, you know, I mean that scene from the Big short where they're in Florida. I don't know that's where I was. And yeah, I didn't realize that.

Host: So things started unraveling before 2008, which we all consider it all starting in 2008, but I guess things had started already unraveling in certain real estate markets a year more before 2008.

Guest: Yes. Yeah.

Host: Okay. Okay. Well and so you're. It's 2006 ish. And you're how old?

Guest: 24.

Host: Okay.

Guest: 24. 20. Yeah, 24.

Host: Okay. Okay. Well not to take away from the trauma of that, but if you're going to find yourself broke, I guess best to do it when you're young.

Guest: Oh, for sure. Yeah. Yeah. It was a great college, you know, and even more expensive than typical college education, but it was worth it for sure. Yeah.

Host: Right. Okay. All right, so. So carry on. What comes next because I know you have a number of kind of small business experiences leading up to dhs. Your now business not going to have time for them all. But take us through the kind of quickly what happens next?

Guest: Yeah, I bought a, I said okay, well you know, I'll try to buy a simpler service franchise. Bought a, a Serve Pro franchise which is the disaster restoration deal in Austin, Texas. Had a. Wanted to buy several of them. Quickly realized after buying the first one that that wasn't to be a possibility based on the first one that we bought. So kind of abandoned that before even a full year probably. And then, then a guy I knew from HomeVestors, a fellow franchisee from the we buy ugly houses deal, an old, Older, older than more experienced guy than me, was like, hey, we can just buy any business. It doesn't need to be, you know, in a franchise network and started looking on biz by sell and this was 2008 at that point and bought a, a business in Miami that sold parts for sprayers, chemical sprayers for like lawn pest control and small farms. Bought that, bought a business in the same industry that made the sprayers in 2009 and kind of consolidated those ultimately in Orlando a few years later. And so we had this company that we sold. We assembled the sprayers, we sold the parts and components for them as well and we were able to ride kind of the early AdWords days and yeah, grew that, owned it and operated it for about nine years. My, my partner got sick and I didn't know how to put together the money at that point to, to buy them out. I was a minority shareholder. So we sold it in 2017. I then we had implemented EOS at Sprayer Depot and had a lot of great success with it. And I thought, well maybe I'll try being an EOS implementer, which is kind of the consultants that implement the system in other businesses. I did that for a couple years. I didn't, I loved the system. I didn't love. I don't think I'M a great consultant. So then I, that kind of brought me to 20, early 2020 ish when I started my search for the business that I now own.

[13:37] Host: Perfect. Me ask you a couple follow up here. Follow ups here. Matt. The, this gentleman, Joe was the, was your partner when he says, you know, we can just buy businesses. As I recall from your pre call, from our pre call, that that was an epiphany, an exciting epiphany for you. Not unlike what I hear so many of my guests have, although they usually have it because they've read Buy, Then Build, which wasn't published for another eight or nine years after you had your epiphany, thanks to Joe. So just talk me through a little bit of that. Like, you know, I always love this moment, this light bulb moment that my guests have. So share your light bulb moment with us, please.

Guest: Yeah, it was w. I mean I was like, oh. Because it. And I, I do think franchises are great as well. But you know, being in one for a while, you do start to feel a little bit constrained sometimes. And not being a zero to one tech entrepreneur type. Yeah, it was just this whole world opened up and Yeah, I think you've had plenty of guests who have talked to it just being, you know, you're searching in your hometown or you know, places you'd like to live or certain keywords for types of businesses that are interesting. And we just went on like a road trip and just were driving all around the southeast us and looking at a business a day because, oh, I don't know, I think there was less competition then maybe or something. But we'd call a broker, there'd be a listing, we'd look at the business the next day. It was just like two or three week.

[15:12] Host: Oh, that's cool.

Guest: Yeah.

Host: Shopping. Just shopping around.

Guest: We're getting Lois used in the car because we've got them all printed from the hotel. It was kind of a mess. But, but yeah, I loved every, every minute even, Even in that point too, I was looking at like, oh, I should have just bought existing franchises even if I wanted to stay in the franchise. And I. Which I don't know why that didn't even occur to me because those are show up on biz by sell as well even. And so just that whole idea of like putting debt or owner financing on an existing concern and just taking it to the next level, I think is the biggest unlock for me.

Host: Yeah, well, you know, it took me 100 episodes to realize the exciting opportunity. That's that and that's of course a niche with an ETA is applying ETA to franchising where you buy an exist, a franchisee that's existing. So it has all the benefits of eta. Existing business don't have to start from scratch and the benefits. But with the pro, the pros and the cons of franchising. But just a little bit about the business that you did buy, we're not going to have time for the story, but Sprayer Parts Depot, I recall that in retrospect, you know, you just said you didn't know how to buy it from Joe who was ill, but you would have in retrospect, because why that business? What you wouldn't have wanted to sell? Why?

Guest: Yeah, we had just kind of reached that point where, you know, when we had bought the first business of the two that became Sprayer Depot, you know, I was making a couple hundred grand, you know, the very bottom end of anything you'd want to buy, profitability and revenue and size wise. But yeah, we had gotten to the point where we were a legit company, you know, approaching 2 million in discretionary earnings and had a management layer in place and knew what we were doing. You know, know it was a nice niche and yeah, I didn't have to be there every day. You know, it was a, it was a good, a good thing we had going and yeah, I would have, it would have been stretching, it would have been beyond like the SBA limits and I probably would have had to bring on even some outside money, but I would have tried rather given it a shot. Now, knowing what I know now about how easy that. Well, not easy, but doable. That is doable.

Host: Yeah, yeah, yeah, now it is. And the, but that exit, even though in retrospect you maybe wouldn't have done it was material for you, the money you made on that.

Guest: Yeah, yeah, it was a, for me, you know, it was a low seven figure exit. So it was, it was, you know, not, not retire and never work again money. But it was enough to, you know, be comfortable and ultimately I guess not need an investors for this later purchase.

[18:24] Host: Then one question on the EOS and then we're going to get into your search for your NOW business. You'd said, you know, you got into EOS consulting and didn't love being a consultant, but still are committed to EOS. Tell give people 30 or 60 seconds on EOS and having seen it and imply implemented it yourself into a number of different businesses and kind of remaining a believer or maybe even that solidified your belief even more to just Kind of pitch eos to people for a minute for, for those who are don't know it very well.

Guest: Yeah, sure. I mean, it's just kind of all the business fundamentals you've ever read in any business book put into one kind of cohesive language, which I had never seen done. You know, typically it was me as the business owner bringing new ideas to employees and saying, this is how we're going to do this now. And well, that might have conflicted with a different way of running meetings previously or, you know, a different way to have a strategic vision. And yeah, let's just kind of put. There's nothing. I don't, I don't. There aren't any concepts you haven't seen anywhere else. It's just in one nice cohesive system and everyone can use the same language and, you know, have the full plan on two pages and you can show it to a banker. You can also show it to the guy who works in the warehouse and everyone kind of gets like, where we're going and how we're going to get there.

Host: And you saw it have real impact on the businesses that implemented it?

Guest: Yeah, absolutely. I mean, the longest example I had was at Sprayer Depot where we implemented it about halfway through and saw the iterations of our like, leadership team and several years of making plans and seeing if they came true and, and all of that. And yeah, it absolutely worked with, you know, I just had a handful of clients. One of my clients was delivery dudes who was. You had Peter Dbat Te on your show recently? Yeah, yeah. But yeah, he was one of my very few clients that I had and yeah, I mean, it was great for them.

Host: What do the following Acquiring Minds guests all have in common? Doug Johns, Morley Desai, Tim Erickson, Chirag Shaw, Shane Ursum. They all went through the acquisition lap, the accelerator and community for people serious about buying a business. But they represent just a sliver of the Lab success stories. The number of deals across the Lab's cohorts now stands at over 120, with over $300 million in aggregate transaction value. The Acquisition Lab was founded by Walker Deibel, author of Buy Then Build, the book that introduced so many of you to the very idea of buying a business. The Lab offers a month long, intensive, almost daily Q and A sessions with advisors, Live Deal reviews with Walker Deal team introductions and an active community of serious searchers. Check out acquisitionlab.com, link in the notes or email the Lab's co founder, Chelsea wood. Chelsea buy, then build.com okay, Matt. So you decide that you're not going to be an EOS consultant forever and you turn your attention back to this thing that had worked well for you, buying an existing business. What does your search look like?

[21:52] Guest: Yeah, I think it was Peter who early on, you know, I was like I, I think I'm not going to keep doing these implementations. You know, I was trying to help them either find someone else or how to do it themselves and I'm going to go and you know, find a business to buy. And Peter was even like, oh that's, that's a search fund. And you know, he kind of opened my eyes to I think Search Funder. And probably soon after that I found like Buy then Build and the HBR guide and all that. And then I use that in combination with. I went back and found during our OA search there was this, there was one course on Biz by Sell called D. Elmo which was by this guy Richard Parker who I think I've seen around Search Funder a little bit now. But it was a. He advertised heavily on biz by sell in 08 and it was a great. Just fundamentals of I would say similar to the Buy then build architecture of like how to put a search together. So yeah, I just kind of went back and read all that. You know, I said it's been a decade since I've done this. Like I should, you know, remind myself how it works. And yeah, just put together kind of my criteria and got on Biz by Sell and started a, you know, I guess a self, what you'd call now kind of a self funded brokered search

Host: and looking locally. You're Florida based.

Guest: Yeah, so I was looking at first in. So I, I live in Southern California and. But I've been back and forth to, to Florida a lot over the, the years and so I started looking in Southern California specifically but then pretty soon started looking in south Florida as well. Just because I had a certain comfort level there with I guess the businesses and the people and how to transact there. And there just seemed to be more like a lot of things in Florida, a more liquid market maybe. I mean this is at the beginning of COVID as well. So you know, things in general seem to be moving more there. Anyway, I was looking in both Southern California and South Florida.

[24:25] Host: Okay. And it was going to be Biz by Sell pretty much that was going to be your deal flow as opposed to something proprietary.

Guest: I would love for that if not to been the case. But yeah, I mean I did just kind of Your standard where like, okay, I'd see one listing that was interesting, I'd contact the broker and then just do whatever I could with the broker to get further up the funnel with the broker if I thought they were legitimate and had other listings that, you know, would be becoming. And that ultimately did actually work out because I. The things I got closest on and what. The one I ultimately bought one way or another weren't on Biz by Sell. They were from brokers. But for, you know, whether it was an email they send out first or a phone call or. Or what have you.

Host: Well, I should come up with a name for this. The Using Biz Buy Sell not to find businesses but to find the good brokers strategy.

Guest: For sure. Yeah.

Host: Because you're not. I don't know if you did that intentionally, but it's kind of the way it worked for you. It's the way it's worked for a number of my guests. And then I actually just had a recent guest who explicitly was like, I use Biz Buy Sell to find the good local brokers and then just establish relationships with those brokers. Yeah. So. So intentionally or not, it seems to be a strategy of many.

Guest: Yeah, yeah. Looking back, I probably should have. Yeah. Now I would probably go and specifically look for brokers on Biz Buy Sell rather than maybe the one off, you know, based on the listing. But yeah, I think that's a great strategy.

Host: Great. So eventually, after how long you find dhs?

Guest: It was about a year into my search, I would say. Yeah. Early 2021. So I got close on a few things. But ultimately, yeah, I think I got DHS under contract or under LOI rather like the end of February of 21.

Host: Okay. Wow. So if you had been doing a year. Ish. This search really overlapped with COVID Like when co. I mean, Covid started almost exactly a year earlier.

Guest: Yeah, yeah, yeah, yeah. I was looking at my criteria before the call and the first line was Covid Resistant, which I don't even remember what that means anymore at this point. But yeah, that was. That was part of it for sure.

Host: Okay, great. So tell us about this business DHS that you found were connected with.

[27:03] Guest: Yeah, so was kind of smaller than, you know, I was looking in that 500-1-2-2 million discretionary earnings range as kind of your typical self funded searcher SBA land. And this was right at the bottom end of that size wise, earnings wise. But. But it was kind of right in my wheelhouse with they sell parts for construction equipment and mostly Through E Commerce, either the customers are checking out online or at least finding us online and calling us and we're packing and shipping them parts and yeah, that just lined up well with my experience at the, the previous company. And even though it was smaller than I had hoped for, I just felt like I could, I could grow it a little more quickly than, than something else that maybe I didn't have as much direct experience with and kind of went into it with a, an investment budget in mind to kind of put, put some things in place that I, I thought could jump start the, the sales a bit.

Host: So when you say an investment budget, you meant you were going to bring whatever you needed to to acquire the business and then you already were thinking about either using the earnings to reinvest or your own infusing it with more of your own capital to really grow things reinvest in the business. I guess that's not so dissimilar than most searchers they imagine reinvesting. But it sounds like you were already budgeting things in your mind as you, as you negotiated the transaction.

Guest: Yeah, exactly. I knew how much it would cost to implement a real ERP system in an inventory heavy business. I knew what it would cost to do some real marketing as most people do, just add inventory. A lot of blocking and tackling. It wasn't like anything super speculative and it was easy enough to budget for.

Host: When you say sell construction parts given us, give us an example. What's a construction part? Like what's one of the most popular parts that sells if such a standout?

Guest: Sure, sure. I mean most of our, the parts that we sell equipment for is a lot of like infrastructure construction. So a lot of road builders, bridge builders, excavation companies and within those it's a lot of like soil compaction equipment, concrete and asphalt cutting and. Yeah, and any part that goes on any of those machines, you know, it's a lot of vibration and a lot of shaky machines that have parts that wear and we sell mostly for the lighter to medium duty equipment. So not generally, not the huge rollers that you'll see rolling a road, but a lot of the support equipment that might be closer to the size of a big lawn mower. And yeah, most of our parts fit in a FedEx two day pack and we've got a lot of them.

[30:47] Host: And, and so a given part will be maybe something like a proprietary piece that has to fit a particular manufacturer's particular model sort of thing.

Guest: Yeah, it might be a carburetor for an engine, it might be a Gasket for an exciter assembly. A. It might be a, it can be a handle, you know, an awkwardly shaped handle. So think of a lawnmower handle that we just need to figure out how to ship without getting damaged. And yeah, a lot of kits we put together kits that are a combination of proprietary parts from the original equipment manufacturer combined with aftermarket sort of commoditized parts that we get from overseas, from Asia. And just over time, the previous owner, who was a mechanic, knew how to find the right mix of, of those. And yeah, I think that's kind of our unique offering in a lot of ways is just that technical expertise. The we're able to offer the customer and they just kind of know that they can count on the parts that they're getting from us.

Host: Well, maybe you've just answered the next question, which is whenever I encounter an E commerce business, it's like, why? Why is this protected from Amazon? Why? I don't know if Amazon has a B2B construction section, but Amazon has everything, so if it doesn't, let's pretend that it could. Why did you feel that this was protected from Amazon selling carburetors out from under you?

Guest: Yeah, so I mean, a lot of these things you can buy on Amazon, it's just a different experience. And there is the technical component. I think Amazon is getting a lot better in B2B when it comes to supply as well as some other, like Home Depot, you know, some other big players that are getting more into E commerce are good on construction supplies, which are your consumables as a contractor. But when it comes to parts on the actual machine, it's a, you can't, if you get a supply, you know, you know, say you get a nail that's slightly the wrong size that you're using. I mean, it's not a big deal deal. But if you get a gasket that's slightly the wrong gasket, your machine is just not going to work and your project is still halted. And so there's the combination of finding the right part that the customer needs and actually getting that to them as soon as possible. And yeah, the Amazon effect was certainly something we were always worried about at the sprayer business as well. I mean, going back, you know, 14 years now, and we always kind of thought, well, Amazon will squash us at some point. But yeah, they've never quite gotten there with I think the niche B2B parts stuff yet. And not that they couldn't, but they haven't.

[34:14] Host: Well, and so it sounds like many of your sales are high touch sales. I mean are you on the phone with people? Are you on the phone with your customer?

Guest: We are, yeah. You know, the majority of them were not and we, you know, we've built enough on the front end to help customers self service. You know our typical product page is quite a bit more detailed and technical and boring than any T shirt that you're going to buy online. But it's pretty explicit. Like these are the models that this fits. If you're not sure, download this, break this parts breakdown and here's how to look at it and confirm that this is the right fitment for your machine. That's 25 years old and this machine has had 12 models since then. And let's make sure it's the right gasket because the shape has changed ever so slightly over the years. And then yeah, we say all over our website, if you're not sure, don't order it and just call us and we'll walk you through it or chat with us or email however you like. And that's a combination of making people feel good that they are in fact buying the right part. Maybe pointing out like hey, you might want these handful of other. If you're replacing that, you're probably going to want to replace these handful of other items as well. And then also just the sourcing of the parts. So sometimes people will have something in stock but they'll need a couple other items on that same machine. And those we ship directly from the manufacturer, we have to special order them or whatever. But we can say like look, this, this is going to get to you in four days, this will get to you in 12. And yeah, that's a lot to communicate just on a website without the personal touch. Yeah, yeah.

[36:24] Host: And do you consider it a. Some of these definitions can be arbitrary. But do you see yourself as an E commerce business or almost more of a distributor? But I guess not just typically a distributor, you kind of have regular distribution whereas you're taking every, every order is different. Every order is, you know, and you're serving the end customer as well. And that's not really, that's not distribution either. But it feels, it starts to feel like, you know, you're the one middleman. I don't mean that in any negative way. You're the one middleman sometimes between a manufacturer and the end customer. And that sure sounds like a wholesaler or a distributor. So just indulge me putting arbitrary labels on the business. Where does this business slot in?

Guest: Yeah, I mean it's all those like. I definitely think we're not a distributor in the classic sense of like we're just moving pallets of. We get a truckload in and we move one of one pallet to each of our customers. It's much more. We get a pallet in of a soup of parts and, and then we put it into FedEx, you know, tiny FedEx packages and get it to. You're right, the end, it's always the end user. I mean almost always it's the end user. And we, Yeah, I think of our. We're a parts dealer. You know, we're a parts business and I do think we're value add. You know, it's not just about getting the part. There is a real service component to it as well. And yeah, so I don't, I mean I, you know, I'm sure on our, on my SBA loan it was called, you know, we're a parts distributor. But it's very much a, it's a, it's a B2B in that we're selling to businesses, but it's very B2C. We try to get the experience as much towards a B2C website experience as possible, recognizing that there are other components to the buying experience that everyone's aware of. And we just try to get as close to the easy breezy, no, you know, no hassle, no effort experience that you would have buying paper towels on Amazon. Recognizing that that's not that ideal will never completely get to.

Host: Yeah, yeah. Well, one of the things, the other things about this business that might have made me nervous is in a lot, you know, in a lot of businesses that my guest buy like a services business, like a lawn care business, let's say landscaping business or plumbing business, the business isn't necessarily so differentiated from hundreds of other plumbing businesses out there, but it's a local business. So that's kind of their competitive play is that they're. They only need to be competitive with four or five other big players in the market and they can differentiate within that pool. But when you're selling on the Internet, even putting Amazon aside, how do you differentiate from other parts sellers, parts distributors, parts E commerce businesses where, how does this not just become pure race to the bottom pricing, pricing bloodbath kind of dynamic?

[39:54] Guest: Right. So I would say it's almost a similar dynamic to, I mean, if you had a, you know, an H Vac business in a, in a, you know, certain metro area and now there are other players who are getting good at the Internet and The sales process, you know, I'm in a decently big enough market to, to grow but it's also not like wildly huge. So there aren't that many players specifically doing what we're doing. And so it, you know, I'm competing against a half a dozen other companies who have, even, even our direct competitors don't have the exact product mix that we do. We might have some overlap with like companies who sell like lawn care equipment. We might have some overlap with people who smell sell parts for small engines. But for like our end user. There aren't a ton of people who are companies who sell specifically for like I would say sort of infrastructure builder contractors. Right. So I'm sure we get ton of one, I know we get ton of one off customers who, or people who stop by and don't buy from us because we're not maybe the absolute lowest price on that one specific thing they're looking at at that moment. You know, when you've got a list of parts that you're trying to buy and you want to buy 20 parts for one machine because you've got a hundred thousand dollar piece of road you're trying to build, you're not like shopping around to save $2 here and there. You want to make sure that you're confident you're buying the right stuff, that that machine is going to get back up and running and your job's going to keep moving. So I think it still just comes down.

Host: So you differentiate on that service that be that really, you know, getting them the parts, getting them exactly what they need, knowing that they're getting the correct parts, helping them figure out maybe, you know, other parts they didn't realize they needed and so on. That's really where the value is. And they'll pay for that.

[42:11] Guest: Yes, correct.

Host: Yeah. You know, this reminds me a little bit, a little bit of Danny Fields and Steve Reese's business where they bought basically a distributor of the, you know, meters on the side of your house for gas, for energy. For gas. And they, and a big part of their value prop is that is, is, is the technical sales service that they provide helping home builders or whomever figure out exactly what they need.

Guest: Right.

Host: And it's, it makes perfect sense once you kind of talk it out. But I, we're as consumers we're so used to, they're not being a human in the mix, you know, everything we just do our own research and we just buy our own stuff. And that's just, just been the steady march of consumer behavior forever.

Guest: Right.

Host: It's interesting. It's interesting to just think, well no, actually I'd like some help on this sale please. And that probably happens more in B2B land than we realize.

Guest: Yeah, for sure. And we're trying to make it as self service as possible but the way to do that is to see what people are calling us about, what are they chatting with us about, where are they needing still the technical expertise or the guidance and how do we then turn that into more self service options very specifically to our type of customer. But the only way to know that is to hear from them anecdotally.

Host: Yeah, yeah, yeah. But so, yeah, so it does serve as sort of data gathering purpose as well to have these conversations. Correct. Now I've really jumped in onto the kind of strategic thoughts here. I want the stuff here. I want to hear more bullet points about the business. But one more question. So I imagine one of the big marketing strategies here would be to just have this incredible long tail of pages devoted to all these variations of machines and their attendant parts. Just hundreds and thousands of pages, product pages about random parts that you sell. Is that, is that the play? Sort of.

Guest: You got it. Yes.

Host: Yeah.

Guest: Every, you know, every time I go to add a tool to our, our website it's a conversation around how do you manage huge catalogs and how much is this going to cost me because of our massive product catalog. And yeah, so it's a combination of having them there so people can, you know, we're one, sometimes we're one of a few people who even have a product that's on Google period and they bump into us and then realize, oh, they got a ton of other stuff as well. But also it's, it's a matter of like when they land on that one random product, showing them a few others for that same machine that they might need and didn't realize they need. Didn't realize someone's, you know, making it available to them on the Internet in a self service way if they want or, or call us. But yeah, that's, it's managing a lot of SKUs.

[45:13] Host: Rewinding back a little bit now to so just kind of bullet points about the business. You told us that it was at the lower end of your range of ste, which was half a million to a million and a half. So let's call it half a million. SDE about.

Guest: Yeah, I don't think I really knew exactly. I mean that's what they were representing, maybe even a little slightly more than that. But it was one of those where the inventory number over the years on the. Had been the same number and the inventory was never tied to the accounting system, which is fine. It was easy enough to sort of back into and estimate. But yeah, that was roughly where it was.

Host: And how about in revenue and number of employees?

Guest: Revenue was like about 3 1/7 ish million and I think seven employees.

Host: Okay.

Guest: Yeah. Okay.

Host: So that was that 7 1/7. So call that what, 14, 15% margins. So for a business like this, that strikes me as probably pretty good margins in this category, I would guess because it's not a lot of.

Guest: Yeah, yes. Part of that was, you know, a very involved owner, as is common at that size range, obviously, I think going, you know, and I ate up all of that immediately for the first couple years. But going forward, you know, for projections, I use generally like a 12 and a half percent to allow for a steady, you know, 20 to 30% growth rate. But yeah, anything over 12 and a half percent, I've always thought was pretty healthy for this type of business. I don't know, I guess I'm just basing that roughly on like what we did at the, at the sprayer business, but not on anything else in particular.

Host: And, but when you say 12 and a half percent and anything above that to allow for growth, you said, does that mean that sort of like you, you allow yourself once you're into the 12 and a. Above 12 and a half, you can feel comfortable reinvesting that. If your margins get above that, you can feel comfortable reinvesting and putting fuel, putting the money back.

Guest: I'm sure for, if I wanted to for a year at any point, as I know some people do. Yeah, could make it 15 to, you know, high teens and just know that the following year revenue will be exactly the same. But yeah, so some, some mix within there. But like I said, yeah, the first couple years it was a 0ish. And, but we've been. Been growing so.

[48:14] Host: And what did the purchase price look like and how did you buy it?

Guest: Yeah, it ended up being a, what I learned was a pretty vanilla kind of SBA deal. It was right around 2 million. It ended up being a little less than that purchase price just based on a little bit of renegotiation. But yeah, call it 2 million ish, with 80% SBA loan, 10% seller note, 10%. My equity check.

Host: And that forex was with inventory, correct?

Guest: Yeah, so it was kind of your, you know, in ecom businesses, sometimes it's the, the, you'll see the multiple plus inventory for whatever Reason. But yeah, so it would. It was either like a 3x plus inventory or a 4x including inventory.

Host: Well, let's hear about inventory and how two things I want to cover the inventory and how you kind of diligence it and how you think about it now because this is often one of the tricky parts with E comic probably the trickiest part with E Comm and you've also got this interesting dynamic where you actually drop ship a lot of your parts directly from the manufacturer. But and then. And then I also want to talk about the technical knowledge needed to run this business. Your owner was pretty technical. A mechanic, you said. So first things first. Inventory. So how did you diligence this inventory? This you know business is selling inventory. How what does it look like to get in there and decide if it's really half a million bucks worth of inventory?

Guest: Yeah, I mean looking at enough of this type of business because even at the sprayer business we had all along the way even though we didn't make any acquisitions we were looking at a lot of these types of businesses and there's just always a certain percentage of in parts businesses, you know, whether it's E commerce or not of stale rusty parts that you just know is is kind of part of the deal and you know whether the seller is and my seller at DHS couldn't have been better was super upfront about everything and

Host: but in other words, unsalable useless inventory.

Guest: Right. So you have a. Or you know some gray area there within that of like you know this, this, these are parts for a machine that is a 20 year old machine that they all had been in use until a few years ago. Yeah, it might sell because there's 300 of this machine still in use out there. But you're probably not going to. It's not worth the shelf space. It's tough. You kind of got to ballpark a decent amount of it. But if you can look at in parts businesses specifically because that's all I know so I won't speak to I guess other E Commerce. But if generally if you have any SKU that you've sold at least one of in say the last 12 to 18 months, I would treat that as active. And if you haven't sold it in at least one of it in 12 to 18 months then that is stale and worthless and costs you more than. But just by taking up shelf space typically and yeah just looking for. I smile because we. You don't want to have obviously also if say you've sold one of that item and you have a thousand of them. Well, we don't need a thousand years worth of, of that particular item either. So just recognizing those discrepancies as well. So there's the sort of on off of like completely worthless or possibly worth something, but then also like the how

[52:11] Host: many years too much. Yeah, exactly.

Guest: Yeah, yeah, yeah.

Host: And do you feel that did an inventory diligence is a key part of the diligence of a business like this, or is there, did you feel pretty comfortable doing kind of following whatever standard procedure to diligence inventory was fine. I guess, I guess the reason I'm harping on it is because the whole business is like you is the inventory. So it feels like that's where there would be a lot more diligence necessary than elsewhere.

Guest: Yeah. So I think it depends on the, the, the business. So like if, if for instance, so say, say he had half a million dollars in inventory, you know, that's a few turns a year based on our, the revenue size. When I bought it, if it had been three or four times as much as a lot of parts businesses are, you'll see parts businesses with 3 to 5 million dollars in revenue and they also have 2 million dollars in inventory. Well, you just know intuitively like there's an issue here. And then it's a matter of like how much value is the seller putting on that inventory and how much does it seem like this is when they're cashing out and how much cash has the seller accumulated over the last several years? And if it hasn't been very much cash, but it's been a lot of inventory. I know these are more sort of quality, more of a qualitative answer to your question. But to me those were the kind of key things. Looking at a lot of these and just the fact that this particular business, I trusted the seller when I asked about, when I would walk through an aisle and say, you know, what is this? What's it, what's it used on? When was the last time you sold one of these? How dusty are literally. Literally, yeah. How rusty are some parts? Because a lot of time, you know, things can accumulate rust pretty quickly and it's not a big deal. But if the whole bin is rusty and it's covered in cobwebs, I'm saying all this, these qualitative things because I guess you can only do so much with the data that you're provided with. And it's also not super easy to do. Like real comprehensive inventory counts in a lead up to a purchase. Right. So I can't, like, I can ask a seller to do an inventory, a full inventory count before I buy it, but I can't necessarily be there asking a bunch of questions of the employees while they're doing that. You know, if this, I mean, you've had plenty of people, I'm sure, where, you know, it's always a question of like, what employees are you able to talk to before the transaction goes through, if any. Right. So yeah, a lot of times you're relying then on reports that you're asking a seller to provide to you. But like there's no, I'm not going to take that to a. What expert do I take that to, to say, tell me if this is accurate. I'm, I'm the expert. I mean I'm not even an expert, but like I'm closer to it than anyone else would be. Obviously the real expert though is the seller. So if you don't trust the seller and it's a lot of asking the same question 100 different ways about inventory and trends and why you have this in stock and not that, follow on to that.

[55:59] Host: The technical nature of this business and him being a mechanic, this plays into the inventory because again, this business basically carrying inventory and redistributing it is the business. So tell us how you thought about buying basically a technical sales business, not knowing then the first thing about the, about this product category, how did you approach that?

Guest: Yeah, it was actually looking back at my criteria. It was one of the things that was on my criteria as like a preference was a technical sale. And I'm the least technical person myself. You know, my wife puts the furniture together, I can't do anything. But the experience then of having the parts business, the sprayer parts business was telling because like I was immediately selling parts for sprayers as a guy who didn't know what an o ring was or the purpose and, and, but to your point, it's just a matter of like how, how, how technical, how much technical intuition does that person on the phone with a customer need to have immediately versus how, how good can we be as a company with having that information at the customer service person's fingertips? So if a customer can't find something on our website and, and they're calling us, how quickly can we have those hard to find parts breakdowns pulled up on our computer screen? How quickly can we help a customer find a serial number on their very specific type of equipment? Because that serial number has been muddy for five years and dirt's like caked into it, we got to tell them where to find it, how to unearth it so that we're finding the exact right parts breakdown for them. A lot of our customers aren't technically savvy at all. They can find our phone number, but they're can't otherwise do much. So how do we get them a. How do we get their nephew on the phone to print them a parts break? You know, if it's something where we can't just hear exactly what it is, how do we get them there? So you're, you're right. The seller was a, a mechanic and, you know, was able to build a lot of this technical information onto our website and we still use him regularly for a lot of information. But he. One thing that he wasn't on the phone with customers at all. You know, he was able to hire people that he trained and, you know, had the right information in front of them. And yeah, I think that's the key thing is just make it. We're hiring customer service people who have no experience in any of this, but they're good with people and they're capable of using tools that we're putting in in front of him.

[58:59] Host: Then it sounds like the key kind of link in the chain was his ability to hire and train customer service people. Again, something that was going to rely on his technical knowledge as a mechanic, his intuitions, how are you planning or how have you downloaded that capability into the organization without it there?

Guest: Yeah. So, I mean, he. Luckily we did have a couple employees that were. Had been there for a long time, and one in particular who's still there, who really knows the products inside and out and can answer a question from a customer without needing to look anything up. But it's, it's really more about. I mean, even Dave, who's the seller, he's a mechanic. When it comes down to like, if a customer calls and says, oh my Exciter is, is rattling and in this very specific sound is happening like, yeah, sure, he's going to get to the bottom of that faster. But a lot of our customers are mechanics themselves. And it's not so much a. This is how you do the repair, it's how do we find this part that they already know. They, they at least know they need that initial part because they can see that it's worn. And then at that point it's not so much like, oh, well, here's how you then install that part. It's a matter of, let's make sure that it's the exact right o ring that even the seller couldn't eyeball. When you have, you know, if you have a million different size o rings, you can't look at it and know intuitively, but there really is. It's unrealistic to think that anyone would help a customer as fast as someone who's worked on this equipment. But it is realistic to have our customer service reps look up the part for our customer in a reasonable amount of time. Our customers realize if they call with an obscure part they're looking for, we're not going to magically have the part number on the top of our head. But if we say, all right, we're just looking for it, does it look like this? Maybe shoot them a quick picture picture and. And that is as good as you get. But having Dave and being able to use his initial technical knowledge and put a lot of that on our website, he made a lot of YouTube videos that people, you know, reference still and I'm, I'm still plan to have him hopefully make a lot more of those for us. But yeah, it's about having the technical knowledge available to us more than know it intuitively because it's impossible.

[1:01:47] Host: Is there anything to learn about E commerce generally? I guess since you're kind of B2B E commerce, kind of depending how we choose to label you. Do you have a sense of what buying a business like yours is versus say, buying some consumer D2C E commerce business? Does that feel like adjacent to your business or does that actually feel like a completely different business model? And what might you tell people listening about whether or not to buy a business like yours or to buy kind of a consumer D2C business?

Guest: Yeah, it does feel different. Like when I, you know, I've heard people on podcasts or when I, you know, try to listen to E commerce podcasts, they're. They're almost always D2C. And it does feel quite a bit different. I identify a lot more with parts businesses. Like, even, even ones that don't sell anything online but say they're like a local parts supplier. So, yeah, it's a little tough. I think the markets are quite a bit different. But that, like that example you gave earlier of the, the meters was that what the. Yeah, yeah, gas. And you know, I did look at. There were a lot of businesses I looked at that were selling parts and components to equipment that I had the thought of like, oh, I'll turn that into more of an E Commerce pack and chip situation. And I think there are a lot of opportunities from what I Saw in, in those types of businesses where it's a little bit, it can be a little bit touchy in some of them where they're, if you're a parts dealer for certain manufacturers, they might have geographical restrictions on where or how you can sell. And if you start selling online out of state, other dealers may or may not have an issue. But yeah, I do think there are opportunities there for sure. Especially going forward as, as more and more people are different types of consumers are being, you know, everyone seems to be pretty comfortable buying stuff online now.

[1:04:17] Host: Online.

Guest: Great.

Host: Matt. Well, I'd like to start wrapping but with. Let's hear how it's gone. So I have the sense, correct me if I'm wrong, that your thesis or your sense of the business from the outside looking in has, has, has played out pretty, pretty, pretty well. How's it, how's it gone?

Guest: Yeah, yeah, yeah, I think it's gone pretty much to plan. I mean, I've, you know, I've implemented a legit ERP system, we've made some upgrades to the website, implemented just a lot of your standard SaaS tools that, that are used by a lot of D2C E commerce businesses. But we're using it in, you know, Obviously this more B2B experience. So trying to kind of marry those, those two because a lot of those tools are very simple, you know, for very simple transactions. And we're trying to use them in transactions that are a little bit more complex and often require a little bit more back and forth. So, you know, it's not your standard customer service ticket a lot of times. But yeah, we're approaching three years in and we'll be about double in revenue. The discretionary earnings should recover to not quite double from where I bought it, but should be, you know, somewhere close to that this year as well. But again, that was after a pretty big J curve trough for after some expensive projects the first, the first couple years.

[1:06:22] Host: Well, that's it. That's. I would say that's pretty good progress and pretty exciting after three or so years to have doubled your sd, doubled your revenue and doubled your ste. And, and you know, to have your initiatives kind of bear out, you know, to spend a lot of money, but to have it go the way it should.

Guest: Yeah.

Host: And so what is the, the plan thereafter? Or is the plan basically to kind of more of the same or is there some grand strategy or, you know, how do you think about the next five years?

Guest: Yeah, so we did just. I hired an EOS implementer over the last six Months, you know, and I've got a little bit of a leadership team now and, you know, started to look at some of these types of questions over the next five to 10 years. And yeah, I think we're at the point now where we finally have all the right platforms in place. And I'm hoping we're at the point where we can legitimately start to scale, you know, for our type of business anyway. And yeah, I think we've got a lot of. With so many SKUs, there are a lot of opportunities to get better at selling each one of those individual SKUs on our website. So that's either with very manual content that we're adding or around those types of parts that customers are interacting with. But obviously there's all kinds of AI tools now that can help us. And I think marrying those two, like our actual product knowledge, our actual customer feedback data of all these customers that are shopping for these parts, we see what they're not clear on that they're asking us about. And then using the AI tools that are available to everyone, but not everyone has the same proprietary data input that we have. And that's been a big part of the investment the last couple years is investing in a real ERP that could start to collect this data that wasn't there before. And yeah, I think those are the real opportunities. And a little bit of it is just staying that much ahead of any other competitors that might have similar ideas. And yeah, ideally I'd love to grow organically at an aggressive, you know, kind of that 25% plus a year. And I think that's doable organically. I mean, certainly if there are acquisitions that make sense along the way, I'll do it. It's a little bit different than obviously just buying another H Vac business within your metro area in that I might just be buying either a website or a different dealer in a different area that might have different agreements with the same manufacturer. Just a few different considerations. But yeah, the main plan is to grow it organically, aggressively organically. And if we happen to bump into any decent acquisition candidates, we'll certainly take a look. But to stay in this main parts for construction equipment and, and just to our kind of our why that we sort of identified in the EOS process was to keep builders building. And I think Certainly our first 10x is within this parts pack and ship world in North America. And yeah, maybe after that, if that becomes, I think our next, you know, this is eight or ten years from now, but would be like local service centers at that point. So we're not just providing the parts, but we're actually fixing the machines for you for our specific equipment. I do think there are a lot of opportunities to provide better service than a lot of people are. And obviously at that point that would be much more of a, maybe not obviously, but in my mind much more of a acquisitive sort of growth strategy at that point.

[1:11:08] Host: But you said your first 10x that would come post your first 10x which I guess implies that you feel like you could, you could, there's room here to 10x revenue. Play your cards right long enough, time frame. So this, what was a three and a half billion dollar business, your business when you bought it, you could be selling 30. You think there's room to sell $35 million in parts a year?

Guest: I do. I mean that would include probably adding a couple of manufacturers lines that we're selling parts for both, you know, the, the OEM part and growing our aftermarket part like replacement parts for those as well. But yeah, I mean construction equipment in general is a multi billion dollar.

Host: Right.

Guest: Industry. There are opportunities too if I, if we want to start selling bigger parts for those bigger, you know, legit heavy duty machines and having more warehouse space and shipping stuff on pallets instead of FedEx packs, then there's room to grow within that as well. It's the same model, it's just a heavier shipment basically.

[1:12:26] Host: Right, right.

Guest: Yeah.

Host: Great, Matt. And then last question. So the business is in Florida and you're in Southern California.

Guest: Correct.

Host: And just any thoughts on virtual businesses? You, I guess, how often are you at the business and do you like the nature of the business being one that you can, can run virtually?

Guest: Yeah, I mean I just recently I'm there less. I mean I've had an apartment there and was there a whole lot for the first couple years. So it was certainly not a virtual business for a while. And yeah, I certainly think obviously a business like this where it's, you know, leaning towards E Commerce pack and ship is for sure more of a virtual possibility. But we're very, you know, we've got inventory, we've got people moving inventory. It's not just an FBA shipping stuff to Amazon scenario. But yeah, I would say I'm. This has been more closer to, you know, being close to three years in now where I've got an operations manager who is on site and probably isn't wildly unlike if I had bought a local service business. And you have operations managers who run the very physical day to day operation you know, at this point we've hired contractors who are, and employees who are remote and overseas and you know, we're probably half remote, half on site as far as employees go. So now it's not as crazy for me to rarely be on site, but yeah, right now I'm probably there every six weeks or so.

Host: Oh, okay. And what is employee count at now?

Guest: Probably 11 or 12. Yeah, I'd say about 12.

Host: Anything about your story or this or this business? DHS, Matt, that we didn't touch on, that you feel like the audience should hear?

Guest: I think a common theme that a lot of your guests have, the ones that have done well and even the ones that have struggled. I think the key thing to me is you need to be someone who is able to walk into a room with any type of individual or group of people and just be able to communicate and listen to them. And I think it, as long as you're able to do that though, this, you know, specifically this SBA loan program is pretty wildly appealing. And yeah, it doesn't, it doesn't seem like there's any anti SBA coalition out there that is jeopardizing this going forward. So yeah, I'm excited about it and for just the sort of this, this part of the world in general going forward.

[1:16:02] Host: Well, Matt, and just about kind of net out how you feel about your business model. Let's say a parts business or you know, a web enabled parts business. It's, it's not a business that I've interviewed many or any guests really. Well, I guess Steve and Danny a little bit. But it's not, you know, a home services business. It's, it's different. Different than most of my typical guests. Is this a, an appealing business model? Is there, is it something that, that guest searchers listening should maybe try to find?

Guest: I think so, yeah. I think probably the, the, the highest likelihood that, you know, this one happened to be doing a decent amount of E commerce sales. But more what I came across during my search was parts businesses who did a little bit of E Commerce or a little bit of pack and ship where I thought I would turn it into more of a E commerce operation. And that I think is where the opportunity probably is. You'd come across that more in a typical search now, I don't know, you know, there's just a limited amount of this very specific type of business where they're selling parts for equipment online. So I mean, I'm sure you could come across, I'm sure people could run proprietary searches that Might be close to that as well. But yeah, I think more along the lines of like they're selling parts for, I mean I like equipment specifically, but really any type of replacement parts, it would work. And you have access to the parts to buy them at a competitive price and have some margin there. But maybe where they've at least proven a little bit that they can pack and ship those parts and not have their vendors cut it off, then that would probably be enough of a proof of concept that you'd be able to, to grow it for sure.

[1:18:12] Host: And so a parts business like that today would be serving its local market sort of and be taking orders at the other end of a phone call of a phone number.

Guest: Yeah, yeah, I think a lot of

Host: times there are a lot of businesses like that. I mean there's a lot of kind of parts businesses and all over kind of local businesses, all over the place sort of thing serving their local geography. It's, it's funny, I just you say a parts business and I'm like, yeah, that sounds like a business type. But I actually, I actually as I said, I haven't really interviewed anyone who's kind of done a parts business and I don't know what they look like or how often, how common they are or what.

Guest: So carry on. Yeah, I mean any, obviously people think of automotive parts when, you know, whenever you think of parts and that's not what I'm talking about but I mean you see any piece of equipment anywhere, whether it's mobile or not and you've had plenty of guests, I'm sure that service different types of equipment and that's the business model. I looked at a bunch of those as well that do have a parts component that I thought I could grow. But yeah, a lot of those are. It's a mechanic type owner where they want to be able to service that customer afterwards if there's any issue with a partner component. And that's much easier for a mechanic type person if they can see it, see the, the issue physically and put their hands on it. And yeah, it's just a matter of being comfortable with, with solving those customers issues. When there are issues without having the part right in front of you, you might have to ship it back to you to, to your warehouse. But yeah, there are absolutely a ton of those businesses out there for any type of, you know, it might not be quite as technical as what we're selling, but it can be technical enough to where it's not. Amazon can't get it right. You can't tell by looking at a picture of a wheel on an obscure machine whether it's exactly the right size. I mean, you can if they've taken the picture properly with some scales on it. But generally, you're going to need something more than Amazon, at least right now, is providing.

Host: If people want to learn more about parts businesses, Matt, or they got one that they're looking at, how can they contact you? How do you prefer they do that?

Guest: LinkedIn is, is great.

Host: All right, Matt Durn Dak, thank you for walking us through web enabled technical parts business. Congratulations on what seems like a really good business with a lot of growth

Guest: still ahead of it, for sure. Thanks so much for having me.