full
Exits: Buyers Run Diligence To Cut The Price | Dave Guttman
A buyer is not trying to work out what a brand is worth. He is trying to find a reason to pay less for it. That is the half of due diligence nobody explains, and it is where most founders lose money they had already earned.
Dave Guttman has bought, run and sold companies for most of his career. He was President of First Stop Health, a telemedicine company that made the Inc. 500 in back-to-back years — No. 276 in 2018 and No. 375 in 2019 — and he now mentors founders through their own exits.
This one is for operators who have ever thought "I'd sell at the right number." Andrej and Dave get into what an acquirer is actually doing during diligence, the three numbers that set a multiple, why polishing every last opportunity before a sale costs you money rather than making you more, and the one deal Dave says he should never have done.
In this episode:
• The second reason buyers run due diligence, and how it shows up in the final price
• The three numbers an acquirer checks before bidding, and the floor Dave puts on each
• Why maxing out every opportunity attracts a worse buyer, not a better one
• How being the face of the brand quietly caps what it is worth
• The handshake rule he learned across 18 months of depositions
• Why he walked from a deal with 70% of revenue in a single client
• The timing move he credits for holding his price through the 2008 crash
• What he does first with a struggling $5M brand and 90 days
Chapters:
00:00 The half of due diligence nobody explains
04:59 The first meeting, and what drops his offer
05:29 Lifestyle business or exit business, pick one
07:12 Make every month they wait cost them more
09:31 Being the face of the brand makes it hard to sell
14:02 Diligence exists to cut the price, not to check it
14:46 He timed the exit to his three best months ever
19:47 A big cash payment at close spooks buyers
22:54 Stop looking at CAC and LTV blended
25:05 The three numbers that set the multiple
27:42 The cold plunge brand that added a subscription
29:30 Two identical $3M brands, 4x versus 7x
30:09 Leave the acquirer some low-hanging fruit
31:53 Max out the upside and you attract a worse buyer
34:23 Start planning the sale 18 to 36 months out
35:43 The deal he should never have done
38:05 70% of revenue from one client, and he walked
41:59 What an acquirer wants the key employees paid
45:27 A struggling $5M brand and 90 days
Dave Guttman:
https://www.linkedin.com/in/drguttman/
https://www.instagram.com/realdaveguttman/
Ecom Growth Insider is hosted by Andrej Tumachowitsch. Watch every episode on YouTube: https://www.youtube.com/playlist?list=PL785J5b_VfDG4PrhJ0OVdkDlUioSkb-tf
Running a DTC brand between $100K and $1M a month and want the profit side looked at properly, not the traffic side? https://hologrowth.com/apply/
Transcript
There are two
Speaker:primary reasons for due diligence the obvious one and the not obvious one.
Speaker:The obvious one is they want to know what they're buying.
Speaker:But there's a second reason.
Speaker:The second reason is they want to reduce the purchase price.
Speaker:My guest today is Dave Guttman.
Speaker:17 acquisitions, exits in the eight and nine figures.
Speaker:A telemedicine company taken from near bankruptcy to the Inc.
Speaker:500 for two years in a row and then sold to private equity.
Speaker:Dave is the guy that buys companies like yours.
Speaker:Which is exactly why you should hear him out.
Speaker:In this episode.
Speaker:The second reason why companies run due diligence.
Speaker:The one nobody tells you about.
Speaker:The three numbers that decide your multiple.
Speaker:Why being the face of your brand quietly kills your exit.
Speaker:And the handshake rule that he learned the expensive way.
Speaker:If you ever want to even have the option to sell your company.
Speaker:This is the hour.
Speaker:Let's get into it.
Speaker:My guest today is David Guttman.
Speaker:And before I run his resume, Dave, jump in and correct me
Speaker:because the numbers that I found are yours and not mine.
Speaker:But by by your account, I think you're at three times Inc.
Speaker:500 entrepreneur.
Speaker:You've run 500 person companies.
Speaker:You did around, I thought 13, but you just mentioned 17 acquisitions.
Speaker:And you also took a telemedicine company from near bankruptcy to the Inc.
Speaker:500, 2 years running and then a PE exit.
Speaker:And you've exited your own companies for eight and nine figures,
Speaker:and you also host one of the top business podcasts out there,
Speaker:which means you probably have parent matched across
Speaker:hundreds of operators, more businesses than any founder sees in their lifetime.
Speaker:All correct?
Speaker:Thank you.
Speaker:You nailed it.
Speaker:Yeah. Thank you so much for having me on.
Speaker:One thing before we jump into it,
Speaker:because I think a lot of people will wonder, you have two Ivy League
Speaker:degrees award MBA, and you now sell a course
Speaker:that is called the anti MBA.
Speaker:In one sentence, what did buying and running
Speaker:real companies teach you that the MBA couldn't?
Speaker:Well, actually it's funny, I actually I don't even sell the course.
Speaker:I just put it in my community and give it away for free.
Speaker:But yeah, it was it started out as a little bit of a joke.
Speaker:I actually ripped up my Wharton MBA live
Speaker:on a podcast about, I don't know, eight months ago,
Speaker:something like that.
Speaker:Just trying to demonstrate that, you know, all the people that went to,
Speaker:you know.
Speaker:Ivy League schools, it's like a dirty little secret
Speaker:that they don't want to share, that the education is nothing special.
Speaker:In fact, you can get away better education on YouTube than you can get it Harvard
Speaker:or Brown or, you know, Wharton or any of those.
Speaker:The MBA really is like what I wish they had taught me in business school.
Speaker:It's the things that actually are useful,
Speaker:especially as it comes to entrepreneurship.
Speaker:You know, most things nowadays.
Speaker:It used to be that the accumulation of information was really challenging.
Speaker:I'm 60, I just turned 60 a few months ago.
Speaker:And when I was growing up, you know, gaining new information was really hard.
Speaker:You had to go to school or you had to go to a library.
Speaker:You had to go to a bookstore.
Speaker:Those were your only three ways to accumulate new information.
Speaker:Now you can become an expert in almost any topic
Speaker:in three months or less between the internet and AI. So.
Speaker:So now it comes down more to the application
Speaker:of that information, and that comes down to experience.
Speaker:And you only learn by doing so.
Speaker:And even even when I went to business school that was true for me.
Speaker:I would learn things, you know, from an intellectual, academic standpoint
Speaker:in the classroom, but that's not the same as having to apply it in real business.
Speaker:And even though I was in entrepreneurship major,
Speaker:I learned almost nothing of value in those classes
Speaker:because the teachers teaching them were not themselves entrepreneurs.
Speaker:You learn by doing, and I think that's never been more true than it is today.
Speaker:Yeah, and I
Speaker:definitely had the same experience when I went to school.
Speaker:So I didn't go to into an Ivy League.
Speaker:And I also don't have an MBA, but I studied
Speaker:like media sciences, social sciences and some marketing.
Speaker:And the only like really valuable thing
Speaker:that I take from that is an internship that I had to do
Speaker:while I was studying, and I learned significantly more in
Speaker:that internship than the three years that I spent studying.
Speaker:Yeah, no, I think it's true across the board.
Speaker:You learn by doing, you know, and, you know, like on the engineering side,
Speaker:you know what?
Speaker:I you know, I have a computer science degree back, you know, in the 80s and 90s,
Speaker:you know, you couldn't get a job as a software developer, a computer
Speaker:engineer without a degree from, you know, from a decent school.
Speaker:Now, I would say something like 75% of the engineers
Speaker:I've hired in the last five years or have no college degree whatsoever.
Speaker:They code, they, you know, they become experts
Speaker:because they become really good coders by actually coding.
Speaker:So yeah, yeah, you learn significantly more by doing the thing.
Speaker:Yeah.
Speaker:Now you've you've bought quite a lot of companies.
Speaker:Take me into the first meeting.
Speaker:Like what is the specific red flags.
Speaker:That red flag that tells you like this is just one person duct
Speaker:taping it together and like, what is the thing that makes you lower
Speaker:your offer on the spot?
Speaker:So I think
Speaker:from both the buyer and the seller's point of view,
Speaker:you have to know where that person is coming from.
Speaker:So for anyone who's interested
Speaker:in selling a business, because at the end of the day
Speaker:there really there's probably more than two,
Speaker:but there's two main, main ways that people run a business.
Speaker:People run a business as a lifestyle business, right?
Speaker:For they're running it to grow, scale and eventually exit that business.
Speaker:It generally falls into one of those two categories,
Speaker:and you need to be honest with yourself about which of those two categories
Speaker:you're in, right?
Speaker:If you're in the lifestyle business
Speaker:and by the way, there's nothing wrong with that.
Speaker:There's this one guy who I mentor.
Speaker:He is an app called Menu Fit where we're moving.
Speaker:I would say our trajectory is for a low nine figure exit
Speaker:in the 150 million range in the next 12 to 18 months.
Speaker:He has a sister, younger sister who has a clothing brand.
Speaker:She's not interested in scaling her business and exiting.
Speaker:She wants to run it as a lifestyle business,
Speaker:so she wants it to make good money.
Speaker:She wants it to be profitable.
Speaker:She wants it even to have some growth.
Speaker:But she's not trying to create some giant brand and exit for 50, 100, $200 million.
Speaker:That's not what she's trying to do.
Speaker:And she's running, you know, and the way I mentor her
Speaker:and growing her business and running her business versus Cole
Speaker:and how I'm helping him with his business are completely different.
Speaker:When you're running a business with the intention of selling it
Speaker:from the beginning, you have to think about your business
Speaker:like you're going to sell the business.
Speaker:Now, one of the traps that people fall into is the way
Speaker:you maximize your exit opportunities is, yes, of course you want to be.
Speaker:You want to have an eye to an exit, but you don't want to.
Speaker:You don't want to run your business, you know,
Speaker:month to month, quarter to quarter, year to year.
Speaker:Just thinking about the exit.
Speaker:The best way to maximize your options is to run a really good business.
Speaker:And so the same principles because what will happen
Speaker:and this is what we're doing with Menu Fit, is every person
Speaker:we're talking to that's a potential acquirer of our business.
Speaker:The message we need them to understand is every month
Speaker:they wait to buy us increases the price that they're going
Speaker:to have to pay for us because our business keeps getting better.
Speaker:So having slow, controlled,
Speaker:not necessarily slow,
Speaker:but controlled growth and a clear understanding of your trajectory
Speaker:is is probably more valuable than anything else
Speaker:in terms of being able to maximize your exit.
Speaker:The other thing that most people don't do is, I would say something like
Speaker:95% of businesses that have less than 25 million
Speaker:in revenue do not have a budget.
Speaker:And anyone that is serious about wanting to scale their business and exit
Speaker:that doesn't have a budget, it's basically business bell practice.
Speaker:You have to have a budget.
Speaker:You have to have a forecast that you're performing against.
Speaker:I would also encourage anyone
Speaker:that's running a business seriously to have a board of directors
Speaker:and have quarterly board meetings, things that a lot of small, smaller
Speaker:businesses or solopreneurships or entrepreneurs that are doing, you know,
Speaker:smaller brands don't think about they think, oh, that's for bigger companies.
Speaker:I shouldn't do that.
Speaker:It's a huge mistake.
Speaker:Again, if the goal is lifestyle, different advice.
Speaker:But if you're trying to exit your business,
Speaker:you want to think about it from the beginning, about what
Speaker:that business is going to look like in a year or three years and five years
Speaker:so that you can sell it, but it may not be you running it.
Speaker:Right.
Speaker:So the timing of when you sell is based more on the market conditions and how
Speaker:well your business is doing and how well you networked than it is anything else.
Speaker:And what would you say?
Speaker:What is the main difference in the advice that you give to someone
Speaker:that wants to run a lifestyle brand compared to exit their company?
Speaker:So as an example,
Speaker:with Menu Fit, their CEO's main role
Speaker:is to be networking within the industry with other you know he runs he has an app.
Speaker:It's an app business.
Speaker:And so he's networking with other mobile app entrepreneurs, other CEOs.
Speaker:He's also networking with everyone and anyone that could
Speaker:potentially be an acquirer or people that we might do channel partnerships.
Speaker:So your main role as a CEO?
Speaker:Yes, there's some operational stuff,
Speaker:but if you're running it well and you've got a little bit of scale,
Speaker:you want to make yourself as replaceable as possible.
Speaker:Because if your core to the business.
Speaker:So let's take an e-commerce brand.
Speaker:If you're an e-commerce brand
Speaker:and you're the face of the business, that makes it really hard to sell.
Speaker:So, you know, because now you have to be part of the business when it's sold.
Speaker:And most people they buy businesses don't want to keep their CEO in place.
Speaker:And so you create a problem for yourself if, if the
Speaker:if the CEO is the face of the brand.
Speaker:So you want to try to make yourself as replaceable as possible
Speaker:because that's going to facilitate an exit.
Speaker:Someone who's running a lifestyle brand much less important to sort of
Speaker:make yourself replaceable.
Speaker:If you're if you're if you're running it as a lifestyle brand
Speaker:because you don't have any intentions of selling it anytime soon, or if at all.
Speaker:Yeah, I've, I've heard the founder tell me,
Speaker:tell me a story about how they how they wanted to to exit their company
Speaker:for a very long time because they were not happy with, with running it.
Speaker:And then they did everything necessary to make it acceptable
Speaker:and to make it a valuable company.
Speaker:And then after they were done with all of that process and they were like,
Speaker:not the face of the brand anymore,
Speaker:they weren't way less involved in the day to day at that point.
Speaker:It actually shifted, and they didn't want to exit the company anymore
Speaker:because at that point it was way more enjoyable to run the company
Speaker:and everything was working way more hands off.
Speaker:So do you think there is a strategic advantage
Speaker:in running the company, as if you want to sell it,
Speaker:even if you want to have it as a cash flow business?
Speaker:For example, I think that the again, it all depends.
Speaker:So in the clothing brand example, you know, with the sister of the of
Speaker:the guy, I mentor, in her case, one of the biggest things
Speaker:that she loves about her business is the experience
Speaker:of seeing people actually wearing her clothing.
Speaker:Right.
Speaker:So for her, she wants to have a component.
Speaker:She started online only, but now she's going to have a physical location too,
Speaker:because that's the
Speaker:there's no financial reason for her to have a physical location,
Speaker:but there's a personal reason for her to have that.
Speaker:Right.
Speaker:So, so, so again, every situation is a little bit different.
Speaker:What I would say is you're exactly right.
Speaker:The making yourself
Speaker:replaceable will make running the business that much more enjoyable,
Speaker:because you'll get to focus on the things that are most exciting for you.
Speaker:And everybody's a little bit different.
Speaker:Some people are more people,
Speaker:you know, they're more of a people person, and so they love
Speaker:being out there and networking and so forth.
Speaker:Other people hate that part of the job.
Speaker:They like growing something.
Speaker:So it depends on the characteristics of the person.
Speaker:Again, what I would say is when you run a really good business
Speaker:and you've made yourself as replaceable as possible,
Speaker:you maximize your opportunities.
Speaker:And so to me, that's always the best outcome, which is,
Speaker:hey, I don't have to sell.
Speaker:And what ends up happening
Speaker:sometimes is someone would have sold for unless you say $25 million.
Speaker:But now that they're more hands off and they're enjoying it more,
Speaker:they're like, I would sell it.
Speaker:But in though someone gives
Speaker:me a stupid offer, I'm not selling, and that's the place you want to be.
Speaker:You want to be in that place
Speaker:where the only way you're going to sell is if someone gives you, you know, to a
Speaker:to steal a godfather term, they give you an offer you can't refuse.
Speaker:Yeah, yeah.
Speaker:I imagine it also gives you way more leverage on the
Speaker:or like pricing power on the on the exit.
Speaker:Because if you really want to exit, you really want to sell.
Speaker:You want to get out of it.
Speaker:The buyer has all the power and they can decide like what the terms are.
Speaker:But if you don't really care and you wouldn't mind
Speaker:selling it at the right price,
Speaker:but you also don't need to exit it, you have way more control.
Speaker:So right go completely true.
Speaker:It's like and that's what I said.
Speaker:It's like when I'm having a conversation, if I'm running my business properly,
Speaker:they know that, hey, they were thinking about buying me in October.
Speaker:They know that if they wait until January, the price just went up.
Speaker:Right?
Speaker:And so they just know that they know that every time they come back to me
Speaker:and they asked me, hey, would you think about selling?
Speaker:Well, remember, the price was here, now it's here.
Speaker:I remember the price was here, now it's here.
Speaker:And again, not like in an obnoxious way,
Speaker:but because the business is doing better and, you know, people are going
Speaker:to pay some multiple of revenue or some multiple of cash
Speaker:flow or EBITDA, whatever net income, whatever terminology you want to use.
Speaker:And, you know, as the EBITDA and the net income and the revenue
Speaker:and all of those things continue to climb, the purchase price goes up.
Speaker:And so if you run it that way, that you might sell it,
Speaker:but you don't have to sell it, that's what maximizes your opportunities.
Speaker:And one other point I want to make here about due diligence,
Speaker:because whenever you're selling a business,
Speaker:you're going to go through a due diligence process.
Speaker:And people need to understand that the primary
Speaker:There are two primary reasons for due diligence
Speaker:the obvious one and the not obvious one.
Speaker:The obvious one is they want to know what they're buying.
Speaker:buying.
Speaker:Okay.
Speaker:Of course, that's the that's the the reason people do due diligence.
Speaker:But there's a second reason.
Speaker:The second reason is they want to reduce the purchase price.
Speaker:So they're looking when someone is doing due diligence,
Speaker:they are looking for every possible excuse you can imagine.
Speaker:Oh, I didn't realize you had this much customer concentration.
Speaker:Oh, I didn't realize you this much geographic concentration.
Speaker:You know, whatever it might be.
Speaker:Oh, I didn't realize you had a down month in October or whatever.
Speaker:They're looking for reasons to reduce the purchase price.
Speaker:So the better you run the business to cleaner you, you run the business.
Speaker:The more you know buttoned up your business is, the harder that is.
Speaker:In fact, when I had my eight figure exit, part of what we did
Speaker:intentionally was we were very intentional about the timing of the acquisition.
Speaker:We wanted to make sure that the three months prior to us
Speaker:selling the business were our three best months in revenue.
Speaker:And, and that was again, that was by design.
Speaker:So we actually sold that business in the financial crisis of 2008,
Speaker:when every businesses were getting 50% haircuts on their valuation.
Speaker:We did not lose any valuation. Our term sheet and the price we were purchased
Speaker:at was the same.
Speaker:And the reason that was true was because our best three months
Speaker:in the company's history, with the three months
Speaker:before, close, so there was no way they could argue for a reduction in price.
Speaker:They knew that
Speaker:if they wanted to buy us, they were going to have to pay
Speaker:the full price we agreed to in the letter of intent.
Speaker:Yeah.
Speaker:I mean, with a with a due diligence, it kind of sounds like if you buy a used car,
Speaker:like as a, as a buyer, you try to find like every single scratch,
Speaker:every dent and everything possible to reduce the price and get a better deal.
Speaker:And it's kind of a perfect analogy.
Speaker:I'm going to steal that analogy.
Speaker:I love that.
Speaker:That's exactly right. That's exactly right.
Speaker:Perfect.
Speaker:And let's say like someone listening to
Speaker:that wants to exit their company, their e-commerce brand at some point.
Speaker:Like what would you say?
Speaker:What are the first steps that they should take to get the business
Speaker:to a point where it's interesting for someone to buy?
Speaker:So, you know, this is a place where, you know,
Speaker:as I mentioned earlier, the intentionality of your business matters so much.
Speaker:So there are these two young guys who I mentor.
Speaker:They're already doing a couple million a year in revenue on a run rate basis.
Speaker:And, and they're they're young guys.
Speaker:They're in there, you know,
Speaker:they're in their late teens or early 20s and they're still they're doing terrific.
Speaker:And what I was trying to explain to them is, hey, things are going well.
Speaker:And that's when it's the easiest to be sloppy.
Speaker:That's when it's the easiest to, you know, do a poor job in planning.
Speaker:But that's when you need to plan, you know, more than ever because you know.
Speaker:And so what I've insisted that they do is they have quarterly board meetings,
Speaker:and they have a budget in and a forecasting process
Speaker:where every single month they look at what they're
Speaker:what they've done that month versus what they said they were going to do.
Speaker:They look at what's going better than they thought,
Speaker:what's going worse than they thought, and they make adjustments once a month
Speaker:based on looking at that and some input from people like me.
Speaker:And so, you know, that's the way you need to run your business
Speaker:and you need to have an eye, you know, you always need to be looking in
Speaker:a very, very detailed level for the next 12 months, always.
Speaker:But you always want to have like a 3 to 5 year plan,
Speaker:knowing that plan is going to change. And that's totally fine.
Speaker:But have a 3 to 5 year budgeting and forecasting process
Speaker:where you see where you're going to go, because ultimately, you know, the
Speaker:and the other advice I would give someone is try to network within your,
Speaker:you know, within the area of e-commerce that your particularly, you know,
Speaker:so let's say you're doing, I don't know, let's say a clothing brand right?
Speaker:On e-commerce side,
Speaker:you should be networking amongst other founders that have either
Speaker:are currently running or have exited clothing e-commerce brand.
Speaker:Because guess who's going to know who does transactions in that space?
Speaker:The people who are in that space that people have already sold.
Speaker:So, you know, as a CEO, other CEOs will be happy to talk to you because,
Speaker:you know, they were in your position at 1.2.
Speaker:And all you have to do is ask and they'll be happy
Speaker:to share some of their guidance.
Speaker:But that's my advice, is network like crazy and make sure you've got a plan.
Speaker:And and that's how you're going to find the right acquirer.
Speaker:Because you know, there there are financial acquirers,
Speaker:there are opportunistic acquirers and there are strategic acquirers.
Speaker:Your best opportunity for the highest exit price
Speaker:and the easiest transaction to sign to someone who's strategic.
Speaker:And the best way to do that is to network within your area to understand who
Speaker:you're most valuable to.
Speaker:And I'm curious, is there
Speaker:is the company still sellable
Speaker:or valuable to an investor if the founder is still involved?
Speaker:Because I was talking to to brand, we're working with last last week on this
Speaker:on the show as well, and they're considering exiting
Speaker:the company in the not too distant future.
Speaker:But right now, the founder is still very involved in a lot of things,
Speaker:like he's in some of the ads.
Speaker:He's very involved in the creative process of the brand, in
Speaker:what the how the brand perception is out there.
Speaker:And he also doesn't really want to step out of
Speaker:that for an investor.
Speaker:Is that kind of a no go or is there
Speaker:like some kind of deal structure where it still makes sense?
Speaker:There aren't deal structures where it made more sense, but what I would say is
Speaker:when when you're getting a large cash transaction.
Speaker:So let's just let's just pick a number.
Speaker:So let's say that a company sells for $25
Speaker:million, 10 million is paid at closing
Speaker:and 15 million is seller financed over three years.
Speaker:Let's just say okay.
Speaker:So now there's a reason for the for the original founder
Speaker:CEO to stay in the business because they haven't earned out.
Speaker:Right now.
Speaker:What I would say is most buyers, most acquirers are very, very nervous
Speaker:about a situation like this because they've just handed $10 million to
Speaker:somebody who maybe has never had anything close to that kind of money there.
Speaker:All of a sudden, they're now their incentives are no longer as well
Speaker:aligned as they were before, because now you've got a CEO that has operating,
Speaker:you know, responsibility and performance responsibility, but they got $10 million.
Speaker:So if at all, you know, collapses, they still got $10 million,
Speaker:you know what I'm saying.
Speaker:So now all of a sudden that makes acquirers nervous.
Speaker:So I won't say I've never seen deals like that happen, but sophisticated acquirers
Speaker:that are going to be more likely to pay a higher price
Speaker:are not going to love a deal like that. Generally.
Speaker:Yeah, yeah, that makes sense.
Speaker:I saw you I saw you mentioned the brand.
Speaker:I think it's the apparel brand that you that you touched on
Speaker:where you took them from 1 million in a year to 9.5 million in a year.
Speaker:And I'm curious, I mean, apparel is one of the most
Speaker:brutal categories there is super high returns.
Speaker:Everyone is discounting.
Speaker:What would you say?
Speaker:Like what led you to being able to get that kind of growth?
Speaker:So I we must have our signals.
Speaker:So there's not an apparel brand I can think of that I mentored
Speaker:that, did that.
Speaker:There are other brands I have that have had that kind of growth.
Speaker:But if I just think about the apparel brand,
Speaker:it's called Clothes by Chloe.
Speaker:But if you know, if you look at any apparel
Speaker:brand, it you could see apparel seems like it's a very different thing.
Speaker:But at the end of the day, the two main things is that that drive
Speaker:every single business is what's it going to cost
Speaker:to acquire a new customer, and what's that?
Speaker:Customers lifetime value to me.
Speaker:And obviously on a SaaS business, the transactions, you know,
Speaker:the lifetime value is how many months or years they stick around.
Speaker:But even in a in a transactional business, like a, like apparel business,
Speaker:you still understand repurchase, you know,
Speaker:you know, probability of repurchases, what the average order value is.
Speaker:You can still calculate a lifetime value of someone.
Speaker:So just understanding those unit economics and how you can improve those unit
Speaker:economics over time,
Speaker:at the end of the day, those are the single most important
Speaker:numbers when it comes to scaling a business.
Speaker:And then the last thing to think about is people think about things like customer
Speaker:acquisition cost and lifetime value on a blended on a blended rate.
Speaker:Right.
Speaker:Because let's say that you have three sources of customers.
Speaker:Let's say some come through paid advertising,
Speaker:some comes through influencers, and some came through email marketing.
Speaker:Let's just say right. Or a channel partnership.
Speaker:The lifetime value and customer acquisition
Speaker:cost of all three of those channels might be very, very different.
Speaker:So understanding which ones you want to double down on
Speaker:and which ones you don't, to sort of be so that not just that you're growing,
Speaker:but you're growing more profitably over time.
Speaker:That's an intentionality thing where you need to be looking at the numbers,
Speaker:understanding where things are profitable and where they're less profitable,
Speaker:and double down on the places where things are are more profitable.
Speaker:I'll give you an example, though.
Speaker:That's not in e-commerce, but I mean, it's close enough, which is that
Speaker:this menu fit app, where, you know, the first million a month in revenue,
Speaker:came almost 100% from influencer marketing and the ROAS
Speaker:their the return on ad spend there runs something like four.
Speaker:Right.
Speaker:It's is really good on paid advertising.
Speaker:We know we're not going to do that well like there's just
Speaker:there's no scenario in which
Speaker:we might get two and a half Roas, which is still a very, very good business.
Speaker:But we need to be thoughtful about that mix
Speaker:so that we understand our growth and overall profitability.
Speaker:So understand all of your channel, you know, all the places you get customers
Speaker:which ones can be grown just by having more capital
Speaker:available to you for what the other growth levers are going to be.
Speaker:So like an influencer marketing, maybe it's more about networking and identifying
Speaker:and having the right incentive model, if you will.
Speaker:For those influencers,
Speaker:think about where that revenue is coming from, which channels you can grow,
Speaker:what it's going to cost, cost you on an operating basis
Speaker:to grow those channels, to grow those channels.
Speaker:And that's what's going to give you a clear idea about where you're going.
Speaker:Then of the day comes down to, you know, good CEOs understand their unit economics,
Speaker:like they know their date of birth or their Social Security number.
Speaker:Right? You know it like the back of your hand.
Speaker:And that's what good operators do.
Speaker:And that's how businesses scale and exit.
Speaker:Yeah.
Speaker:And you already touched on some of them.
Speaker:But if you would have to say to, to say the three most important metrics
Speaker:for any business that is that is growing, like what are those for you.
Speaker:So the, the they're very similar
Speaker:to, to the ones that people care about when they're buying a business.
Speaker:So the three biggest variables that someone looks at that acquire a business
Speaker:is they're looking at the top line growth rate.
Speaker:So you know, generally you want to be at least again, if we're talking about
Speaker:trying to get a nice exit value, you want 40% or higher annual growth rate.
Speaker:They look at your gross margin again depends on the type of business it is.
Speaker:But in something that has, you know, inventory and physical product,
Speaker:you want to have something at least like a 50% margin is something that's
Speaker:more like a service or SaaS business, more like an 85, 90% gross margin.
Speaker:And then they look at the operating income margin,
Speaker:and you want to be north of 25% generally there.
Speaker:So those are the three biggest metrics from a company valuation standpoint.
Speaker:But I would say the three biggest numbers from an operating standpoint
Speaker:or the customer acquisition cost,
Speaker:the lifetime value and your retention rate, right.
Speaker:That retention rate, you know, how long can you keep a customer,
Speaker:how many transactions?
Speaker:So if I'm a e-commerce brand and I know that, you know, 2025,
Speaker:my my average customer
Speaker:lifetime purchases was 2.5, right?
Speaker:Well, maybe my goal needs to be, well, hey, I want to move that up to 3
Speaker:or 3.25 by the end of 2026, right?
Speaker:That's a really important metric to think about
Speaker:because that's symmetric, that's going to drive that hyper growth
Speaker:that you're going to get excited about, and that a potential acquirer will be
Speaker:excited about.
Speaker:So would
Speaker:you say that businesses that are more like the
Speaker:the one time transaction type of businesses or where like they get
Speaker:a customer to, to buy ones and then not come back
Speaker:just due to the nature of the product.
Speaker:Would you say that those are inherently less valuable than the ones
Speaker:where the customers keep coming back and keep repurchasing?
Speaker:Absolutely.
Speaker:So yeah, let's talk about it on the other side.
Speaker:So one of the guys who I had on my podcast, you know, smart guy,
Speaker:his business initially was primarily very expensive.
Speaker:All e-commerce was very expensive.
Speaker:Cold plunge, you know, equipment.
Speaker:So I want to say like average I think average
Speaker:price is something like $8,000 for one of these cold plunges.
Speaker:Well, you're not going to buy five cold plunges right.
Speaker:Again this is a yeah.
Speaker:You might have a location like a recovery place that might buy 2 or 3.
Speaker:But you know, again, his brand was mostly to consumers.
Speaker:You know, you're buying this one time in your lifetime.
Speaker:So it was the worst of all possible worlds.
Speaker:Single transaction, extremely high cost of goods.
Speaker:You know, extremely high customer acquisition costs, no
Speaker:recurring purchases whatsoever.
Speaker:So what he did that was smart because he does want to ultimately exit
Speaker:was he added another product line to his product mix.
Speaker:He still needed the revenue and the profitability.
Speaker:Even though the margins weren't great, there was still margin there
Speaker:to basically fund another part of the business.
Speaker:And so he got into the business where again, it was related to water,
Speaker:right where he did a shower head, where they had very sophisticated
Speaker:filtration system.
Speaker:But now all of a sudden, so someone buys a showerhead, much lower cost of goods,
Speaker:much higher margin, but now they're selling a filter
Speaker:you have to replace every 90 days.
Speaker:And now they have they added a recurring revenue component to
Speaker:to a product that would have normally been a one time purchase.
Speaker:So trying to find some way to create a recurring revenue aspect
Speaker:to your business model will help your cash flow.
Speaker:And of course, it will ultimately help your exit value.
Speaker:Yeah.
Speaker:And I mean, I see that more and more with with a lot of brands
Speaker:that are more like one time purchase brands.
Speaker:So for example, I wear the aura ring and today, like
Speaker:you buy the ring once for like 300, $400 or something.
Speaker:And but then they added the subscription back in.
Speaker:Then it also just bought like an eight sleep mattress.
Speaker:And they also have a subscription.
Speaker:And like almost every single brand that has like those expensive one time
Speaker:purchases, like a lot of them start adding in a subscription on the back end.
Speaker:And as you mentioned,
Speaker:I think on the one side, there's obviously just great for cash flow and just to
Speaker:to keep the money coming in and obviously very high margins.
Speaker:But at the same time, it probably has a very positive impact
Speaker:on the valuation of the of the company, enormous,
Speaker:enormous impact on the valuation, a single transaction business.
Speaker:It's a hard business to sell
Speaker:really hard. So
Speaker:now let's imagine like you've purchased
Speaker:a few of your companies, let's say two identical companies land on your desk.
Speaker:Both do 3 million in profit.
Speaker:For one, you would pay
Speaker:like four times multiple for the other one, 7 times multiple.
Speaker:What do you like?
Speaker:What would be the specific differences in diligence
Speaker:that create that that gap between those those two?
Speaker:It would be those big three metrics, right?
Speaker:I'd have to say.
Speaker:So. The other thing people need to understand about about a business
Speaker:is if you do it just right, the way someone looking at your business
Speaker:is going to feel is, oh, they've done a really good job running this business.
Speaker:They've really executed well.
Speaker:The business is well managed, but there is these other opportunities
Speaker:that they have yet to be able to take advantage of,
Speaker:maybe because they didn't have enough capital to do it or not enough time.
Speaker:But in a perfect world,
Speaker:and acquirers like, wow, I already like what I'm buying, right?
Speaker:But there's all this other new revenue I could take advantage of.
Speaker:Maybe it's expanding outside the US, or some new product lines
Speaker:they're about to launch but haven't launched yet,
Speaker:or they're adding a recurring revenue aspect to their,
Speaker:you know, to their to their product offering or whatever it might be, that
Speaker:that's what's going to get you the difference
Speaker:between that four and seven in your example. Right.
Speaker:It's like that company
Speaker:where there's still some low hanging fruit for the acquirer to take advantage of.
Speaker:And that all comes down to the story you tell when you're getting ready to
Speaker:to sell.
Speaker:Because ultimately, understand that a huge part of your ability to sell
Speaker:your business and sell it at the price you want comes down to storytelling.
Speaker:And you need to have you need to know exactly what that story is
Speaker:that you're going to be telling to that potential acquirer.
Speaker:And you need to make sure that
Speaker:that story is a story that that acquirer wants to hear.
Speaker:And so, you know, there's a lot of nuance to that.
Speaker:But but ultimately that would be one of the big differences is if
Speaker:this business has
Speaker:a bunch of opportunities, it's very clear how to take advantage of those,
Speaker:but they have yet to be taken advantage of.
Speaker:That's going to give you a premium to your purchase price,
Speaker:and that might get you the difference between that four and seven.
Speaker:So could it be
Speaker:could it have a negative impact if as a founder like,
Speaker:let's imagine you're already doing everything perfectly
Speaker:and you're already like maxing out all the opportunities
Speaker:that are there, that it's then not as attractive for a potential buyer
Speaker:because he just doesn't see the laboratory to to grow the company further.
Speaker:What I would say is that you're going to attract a different buyer, right?
Speaker:So in the case where most of the values been extracted, you're going to attract
Speaker:a more financial buyer and you're probably going to get more like
Speaker:3 to 4 times EBITDA Multiple.
Speaker:Right.
Speaker:The strategic acquirer, where they see a whole bunch of things that have not yet
Speaker:been taken advantage of, that person is going to get a higher EBITDA multiple.
Speaker:So so I think it's more about the the type of acquirer
Speaker:that you might attract based on whether or not there's still opportunity,
Speaker:you know, left on the table for them to take advantage of.
Speaker:Got it.
Speaker:Okay.
Speaker:And for for someone who wants to exit the company.
Speaker:Like how do they decide what kind of buyer is the right fit for them?
Speaker:Do they just like, try to reach out to to a lot of buyers and then see,
Speaker:like who's interested in it, or does it make sense to decide
Speaker:like what kind of buyer you're looking for, what kind of exit you want,
Speaker:and then strategically go from there?
Speaker:Again, every business and every situation is a little bit different.
Speaker:So my advice would be different based on the circumstances.
Speaker:But but roughly speaking, you know,
Speaker:it comes down to the type of business I'm in and where we are in our growth
Speaker:curve, the industry that I'm in and what's happening in that industry.
Speaker:What I will say is when you're shopping a business, it's
Speaker:always better when someone comes to you to acquire you than you're going to them.
Speaker:There's a there's a company that I'm that I'm helping
Speaker:that has some interest in selling.
Speaker:But they're, you know, they're making they're doing 3 million a year.
Speaker:They're probably doing, you know,
Speaker:a million, 2 to 1 million, five to their bottom line.
Speaker:And, you know, so they're making really good money.
Speaker:But it's a it's a three location business.
Speaker:It's you know they work all the time.
Speaker:And so there's some interest in selling.
Speaker:And and my advice to them was, you know, if you put yourself,
Speaker:if you put yourself out there like, you know,
Speaker:we want to sell our business it again, you can do it.
Speaker:You can try to create a competitive situation.
Speaker:You can even try to create a bidding situation.
Speaker:But again, that's easy to say and hard to do
Speaker:because ultimately,
Speaker:the thing that gives you the single best leverage in never doing a transaction
Speaker:is when the acquirer comes to you and not the other way around.
Speaker:And so my advice is you want to be thinking about, again,
Speaker:it's very different.
Speaker:Like, you know, your your spouse becomes sick
Speaker:or something like that and you want to leave the business.
Speaker:That's an unusual situation.
Speaker:But in a situation where, you know, this is a business you want to sell,
Speaker:you want to be planning for that sale
Speaker:18 to 36 months before you actually want to sell.
Speaker:So you can be putting out a lot, you know, really being out there,
Speaker:networking, having conversations with lawyers, accountants,
Speaker:you know, every kind of intermediary, you could think venture capital firms,
Speaker:people like that, as well as other founders
Speaker:in the similar space or adjacent spaces.
Speaker:That's what's going to give you the opportunity,
Speaker:because then the word is out that, hey, these guys are running this really good
Speaker:business, and the word is out in the, in the, in the areas where there's
Speaker:other people that might be interested and people talk and people will come to
Speaker:you just like people came to this couple that has the three locations.
Speaker:And so now someone's coming to them
Speaker:saying, hey, we'd like to we're interested in buying you.
Speaker:And now like, well, well, we'll have a conversation.
Speaker:We're not looking to sell. Right.
Speaker:That's where you want to be. You want to be in that place.
Speaker:And if you're going out to market, I'm saying I want to sell by definition
Speaker:that weekend, your negotiating position, because they know you want out.
Speaker:And if they know you went out and you made this point earlier,
Speaker:you know, that's already kind of a strike against you.
Speaker:Not that you can't, you know, rally against that, but it just makes it harder.
Speaker:Yeah.
Speaker:Yeah, that makes sense
Speaker:from from all the deals or all the acquisitions that you did,
Speaker:is there a deal where you know that you overpaid or one
Speaker:that you would never, never do again?
Speaker:That's a good question.
Speaker:So when I did this call, we did a roll up in the call center space.
Speaker:And, you know, we bought a bunch of different companies
Speaker:and they all went smooth as glass, with one exception.
Speaker:And I learned a really valuable lesson that I'll share here.
Speaker:So when we were doing due diligence on this business,
Speaker:we'd already done, I think at this point, 6 or 7 transactions
Speaker:and had all gone really well during due diligence.
Speaker:The guy was just being really shady.
Speaker:He was acting really shady. Right.
Speaker:And and so what we thought we were clever because what we did was
Speaker:I think we paid 3 million for the business, but we only paid,
Speaker:I think it was like $800,000 at closing and like 2.2 million in a seller note.
Speaker:So we were like, we convinced ourselves, well, hey,
Speaker:you know,
Speaker:if he lied to us during due diligence, no big deal, because we had really tight
Speaker:reps and warranties in the asset purchase agreement.
Speaker:If he lied to us, we'll just offset the seller note and we'll be no worse off.
Speaker:So you know, we'll be fine.
Speaker:Well, that's the way a rational person thinks.
Speaker:Okay. Unfortunately, you're not always dealing with rational people.
Speaker:So what happened?
Speaker:So he lied during due diligence.
Speaker:We had to offset the seller note.
Speaker:We had to replace a whole bunch of equipment that cost us a lot of money.
Speaker:And then we spent the next 18 months in court and depositions and stuff like that.
Speaker:So did we ultimately prevail? We did.
Speaker:And on paper it looked like the deal was still a good deal.
Speaker:It was a bad deal. We should have never done the deal.
Speaker:And what I would say is, if you wouldn't do the deal on a handshake,
Speaker:don't do the deal now.
Speaker:Don't do the deal on a handshake. Right?
Speaker:But if you get if you feel uncomfortable about the people that you're dealing with,
Speaker:don't do the deal.
Speaker:If you feel like, man, if I don't contract this language
Speaker:just right, there's going to be some way they're going to try to screw me.
Speaker:Don't do the deal.
Speaker:And, you know, it's I've learned that lesson a couple times
Speaker:in other areas of business, too.
Speaker:If you wouldn't do the deal without the contract, don't do the deal.
Speaker:Was there a deal where you, like, walked away from it
Speaker:in the in the last second while doing the diligence?
Speaker:They're definitely ones we looked at.
Speaker:We walked away during due diligence because they just were either
Speaker:they were dishonest, but more often than not,
Speaker:I wasn't that they were just honest. It was.
Speaker:It was something like as an example, there was one deal we looked at
Speaker:where we just didn't understand that like 70%
Speaker:of their customer came from a single client, right?
Speaker:It was a government.
Speaker:It was a government contract that was most of their revenue,
Speaker:and that just wasn't a deal we were looking to do because, you know,
Speaker:yeah, there was still like a year and a half left to go on the contract.
Speaker:But, you know, if that contract didn't renew, 70% of our revenue evaporated.
Speaker:And that just wasn't a risk was willing to take.
Speaker:And we just weren't close enough to the to the client,
Speaker:to the customer to be able to know what that probability of them renewing was.
Speaker:So that's an example of one where the due diligence,
Speaker:you know, identified a customer risk we weren't comfortable with.
Speaker:What would you say?
Speaker:What is the the most common risk that businesses could be e-commerce
Speaker:could be in general that they have that they're not aware of.
Speaker:That's a good question.
Speaker:Let me think about that for a second.
Speaker:I mean, there's so much difference from business to business.
Speaker:You know, I would say that
Speaker:customer risk and employee risk,
Speaker:the two are the two that are the easiest to miss.
Speaker:Right?
Speaker:So because in some cases, you'll have,
Speaker:you'll have an employee that's like the, the glue that holds a business together.
Speaker:Oftentimes in the sales team you might have a sales person.
Speaker:I mean, I had this back at the telemedicine company
Speaker:I ran where my top salesperson sold more than the next six salespeople combined.
Speaker:And if that person left now,
Speaker:the way to protect against things like that is, is if you could identify
Speaker:that during due diligence, you could take action to protect yourself.
Speaker:So like when the eight figure transaction that I was involved
Speaker:in, part of the deal was and I had a big piece of the equity,
Speaker:part of the deal was while the CEO was going to leave, I was the I was the COO.
Speaker:Well, this they wanted the CEO to leave.
Speaker:They were insisting that I stay for at least three years.
Speaker:So basically they had a I had a retention bonus.
Speaker:I mean, they had they had all these golden handcuffs for me
Speaker:because they knew I was critical to the business.
Speaker:So there's ways to lock those people up in a way that, you know, again,
Speaker:you align the right incentives.
Speaker:So if you can identify that employee risk,
Speaker:there's things you can do to mitigate it.
Speaker:Same thing on the customer side, right?
Speaker:You could if someone had a giant customer risk,
Speaker:you could talk to the person who was selling the business and be like,
Speaker:hey, look,
Speaker:if you can go back to this client and get them to extend the contract
Speaker:to five years, then I'll do the deal, right as an example.
Speaker:So identify the risk.
Speaker:And then potentially there are opportunities to mitigate those risks.
Speaker:Got it.
Speaker:Yeah. That makes sense.
Speaker:I was thinking like when you when you have an employee employee risk
Speaker:or like team team member risk to rather like try to hire someone else to
Speaker:or have the processes in place so that the person is not
Speaker:the number one salesperson, for example, anymore.
Speaker:But what you
Speaker:what you just said is that there's also the other option
Speaker:to just making sure that they don't leave the company
Speaker:and that they that they stay around, give them and give them equity.
Speaker:Right.
Speaker:So in some cases, I've definitely seen that where, you know,
Speaker:a salesperson has no equity in the current business.
Speaker:Right.
Speaker:And then what you do is you're like, you know, hey, here's 2% of the company.
Speaker:Now think about it, right.
Speaker:If you're paying $100 million for, you know, for a company,
Speaker:you've effectively handed that person, you know, something like $2 million.
Speaker:But, you know, that's great insurance if that person is a critical hire.
Speaker:So, you know, identify the things that are critical to the business.
Speaker:And again, there's a whole bunch of risks and things you can't control.
Speaker:But there's a bunch of cans.
Speaker:It just make sure you maximize your control over the things you,
Speaker:you know, that you really have influence over.
Speaker:And if there are multiple people that have equity in the company,
Speaker:does it change the process of exiting the company?
Speaker:Does it make it more, more complicated?
Speaker:A little bit.
Speaker:Not so much more.
Speaker:What I would say is the the perfect scenario for an acquirer
Speaker:is that these key employees are making very little money.
Speaker:Maybe they're making some,
Speaker:but they're making very little money from this transaction.
Speaker:But you're going to lock them in so that they make a lot of money
Speaker:on your transaction.
Speaker:So if I'm an acquirer, if I'm buying a business for 50 million,
Speaker:the reason I'm doing it
Speaker:is because I think a few years later, I can sell it for 100, 150, 200 million.
Speaker:That's why I'm buying it. Right?
Speaker:So what I want to be able to say is, see these key employees?
Speaker:Hey, man, it's
Speaker:too bad your previous CEO, you know, wasn't looking out for you, okay?
Speaker:And you didn't have, you know, you didn't really make much
Speaker:on this transaction, but I'm going to treat you better.
Speaker:So right now we're worth 50 million.
Speaker:Our plan is to be worth 200 million.
Speaker:I want to give you 1% of the company, because I think you're
Speaker:that important to the business.
Speaker:And I want you to stick around all the way through a transaction.
Speaker:And so now when we do that, you're going to make one and a half, $2 million.
Speaker:And so now, you know, they're more excited than ever
Speaker:because they've seen the transaction that they could have made money from.
Speaker:And now they're going to participate potentially in a transaction
Speaker:at an even higher evaluation.
Speaker:And that generally gets them pretty excited.
Speaker:So that's the way that's as an acquirer, having been an acquirer,
Speaker:that's what I look for is I'd love to have a situation where
Speaker:you're kind of getting a little screwed.
Speaker:The key employees are kind of getting a little screwed
Speaker:in the current transaction, and I can take care of them in my transaction.
Speaker:Got it.
Speaker:To end this podcast, I want to I want to do rapid fire session.
Speaker:And I want to start with underrated or overrated.
Speaker:So I'll just give you some some keywords and you have to say
Speaker:whether for you it's underrated or overrated.
Speaker:Okay.
Speaker:The first one is earn outs.
Speaker:Overrated.
Speaker:I don't like earn outs. If I can avoid them.
Speaker:Founder led content as the brand's growth engine.
Speaker:Overrated.
Speaker:I really like you said, if you want to divorce the
Speaker:you want to divorce the the the company from the owner whenever possible.
Speaker:If you want to exit.
Speaker:Yeah, hiring an MBA.
Speaker:Definitely overrated.
Speaker:Being one.
Speaker:Being one myself.
Speaker:SBA loan buyers versus PE buyers.
Speaker:I would say.
Speaker:I would say I would probably prefer an SBA buyer versus a PE buyer.
Speaker:PE buyers are going to be much more likely.
Speaker:They're going to be sharks for sure.
Speaker:These are very sophisticated, ruthless people.
Speaker:Someone who's an SBA buyer.
Speaker:You probably get a lot more flexibility on valuation, I would think.
Speaker:Now you might you might have to stick around longer than you might end up.
Speaker:Deal. But you probably get a better valuation.
Speaker:Yeah.
Speaker:And then you already mentioned that.
Speaker:But selling at the top of a trend.
Speaker:You always want to.
Speaker:So I would say it's overrated.
Speaker:You always want to sell at the top if you can.
Speaker:But again just like in trading stocks right.
Speaker:Only an idiot is trying to sell at the peak and buy the at the valley.
Speaker:Right.
Speaker:You that's why your dollar cost averaging.
Speaker:So again
Speaker:you want to run a really good business that will maximize your opportunities.
Speaker:And try not to drive yourself crazy about the timing.
Speaker:The timing will present itself.
Speaker:And if you try to optimize it, you're more likely to harm the business
Speaker:than you are to help it.
Speaker:If I if I had to use struggling
Speaker:$5 million DTC brand and give you 90 days, what is the first thing
Speaker:like as a as a task that you would do Monday morning?
Speaker:The very first thing that I do at almost every company
Speaker:I've run or consulted to in the last ten years is I.
Speaker:I dig into the data.
Speaker:In many cases. I actually build a data warehouse.
Speaker:I have a team of people.
Speaker:I've used it a whole bunch of companies that can, you know, their data experts,
Speaker:because ultimately
Speaker:you want to make as many decisions in a data driven way as you possibly can.
Speaker:And it's shocking how many even really smart
Speaker:people run their businesses more on gut and less on data.
Speaker:You know, the number of times people say, oh yeah, I'm a data driven decision
Speaker:maker, and till their gut tells them something different
Speaker:and I see it all the time, it's one of the single biggest mistakes, even.
Speaker:In fact, I would say people that are really, really smart
Speaker:make the mistake more often than the people
Speaker:that are not as intelligent, because people that are not as intelligent
Speaker:are a little bit more worried about making a mistake.
Speaker:So I would say, you know, really be super data driven, dig into the data.
Speaker:I will say this, that,
Speaker:I mean, I had a period of time where I consulted to a lot of businesses,
Speaker:and in almost every single case, I had no background in the industry whatsoever.
Speaker:Zero and like projects were usually two weeks long,
Speaker:and at the end of the two weeks, I would present my findings to the CEO.
Speaker:And every time the CEO would be like,
Speaker:how the hell do you know my business better than I do in two weeks?
Speaker:And I'm like, I don't.
Speaker:I just talked to everyone in your company and I looked at the data.
Speaker:That's all it really takes.
Speaker:In almost every case, the answers are clear.
Speaker:If you look at the data,
Speaker:100% agree.
Speaker:Every almost every single brand that I talk to you,
Speaker:like the majority of their decisions, of their problems,
Speaker:could be solved by having the right data and looking at the data.
Speaker:And I think what holds the majority of the businesses back from really
Speaker:scaling and growing is that they don't have the right data,
Speaker:or if they have it, they don't look at it the right way
Speaker:and they don't make their decisions based on the right data infrastructure.
Speaker:Right. Yep.
Speaker:This was a great conversation.
Speaker:Thank you very much for for hopping on.
Speaker:Where can people follow you learn more about you?
Speaker:Yeah.
Speaker:@RealDaveGuttman across all my socials.
Speaker:My my podcast is is there on YouTube.
Speaker:I actually have two at the David
Speaker:Guttman podcast and I do one on longevity called The Business of Wellness.
Speaker:But yeah, of course all my socials.
Speaker:Anyone interested you can go to my website, guttmanmedia.com, DM me.
Speaker:You know, I look at all my messages and stuff like that.
Speaker:I'm.
Speaker:If you've seen my TEDx talk, you understand that the the path I'm
Speaker:on through life is I'm trying to be as helpful to people as I can possibly be.
Speaker:I think there's eight companies where I mentor
Speaker:their CEOs, and I have equity. And I've asked for equity
Speaker:in none of those companies.
Speaker:The CEOs gave me equity because they were grateful for my help.
Speaker:And so again, I'm not I'm trying to have money for me be a side effect, not a goal.
Speaker:If I can be helpful to people, you just need to ask.
Speaker:I love that.
Speaker:Thank you. All righty. Thanks for having me.
