Why "Boring" Businesses Win: Greg Schow on Growth, Grit, and Long Term Thinking

Summary‍

00:00 - Introduction and Background

03:10 - Early Entrepreneurial Lessons

05:47 - The Importance of Teamwork

08:49 - Navigating Partnerships

11:49 - Transitioning from Corporate to Entrepreneurship

14:55 - Building Non-Sexy Businesses

17:53 - Myths of Buying Boring Businesses

22:35 - The Reality of Passive Income

23:56 - Pivotal Moments in Business

25:51 - Acquisition Insights and Challenges

30:20 - Building a Management Team

31:50 - Long-Term Business Strategies

36:11 - Scaling Through Acquisitions

39:35 - Parting Wisdom for CEOs

‍

Full Transcript

Jeff Holman (00:02.444)

Welcome to the breakout CEO podcast. I'm Jeff Holman, your host. And I am here today with Greg Schow. Greg was actually introduced to me by my wife. both did a, what's it called? It's the 10,000 small business, Goldman Sachs, 10,000 small business program. And boy, I know they love the program, but I might be the biggest recipient out of that program because I got my wife helping run the law firm. I've met wonderful people like Greg.

And it's so good to have you on the show today, Greg.

Greg Schow (00:34.189)

Yeah, Jeff, now Brooke's phenomenal and she's much like my wife. She supports and does so much behind the scenes. I know she's amazing and you could do probably 10 episodes just on her. So my wife's the same. That's the only reason we get to do what we do, right?

Jeff Holman (00:49.812)

for sure. They're fantastic. We should do a spousal appreciation event or something like that. I like that idea. Well, before we do that, one thing I didn't know about you when I read your bio here, I didn't know you played basketball at the University of Utah.

Greg Schow (01:07.593)

well, I practiced with the University of Utah. I got into a few games. I was a walk-on back during the Rick Majerus years.

Jeff Holman (01:12.492)

Nice.

Jeff Holman (01:16.787)

Are you trying to make it sound like you didn't play? Because that sounds like you played.

Greg Schow (01:20.867)

I played it well my claim to fame Jeff is I got into a game and I shot a three and I made it and I quickly retired from the game with a hundred percent shooting so

Jeff Holman (01:30.264)

There you go. Very nice. That's one three more than me or a lot of other people I've ever had.

Greg Schow (01:37.955)

It was an amazing experience and talk about learning leadership. Sports is one of the best places to learn it and you know learning from Coach Majerus and many others great good things you want to do things maybe you don't want to do but just a phenomenal crash course in leadership so it was awesome.

Jeff Holman (01:55.608)

That's so cool, very cool. And I didn't necessarily increase my respect for you, because it's already very high, but I did learn something new and I'm more impressed, I guess. So.

Greg Schow (02:04.77)

It was wearing red, so I know sometimes that decreases people's respect. So I keep kind of leave it on the side.

Jeff Holman (02:13.678)

Oh man, I'm a Ute. I went and did my engineering and my law school there. I did get my MBA at BYU and I wear blue because it matches my eyes a lot more than red most of the time. other than that, I don't hold any offense or take any offense from that.

Greg Schow (02:24.383)

Hahaha.

Greg Schow (02:28.544)

Yeah, that's great. That was a great experience.

Jeff Holman (02:32.823)

That's fantastic. Well, so your entrepreneurial experience, it started a lot sooner it sounds like. You were out there selling candy out of your locker at school and making money and traveling around, I guess, huh?

Greg Schow (02:45.942)

Yeah, I think as a kid, just always, always enjoyed it. So had friends and we, you know, sold candy, did little lawn mowing businesses and lawn aeration growing up in high school and, you know, learned at the age of 13, how to buy a lawn mower. My mom got a deal. It was 90 days, same as cash. And so I heard him paid it off in 90 days and realized how great it is to run a business with no expenses at all cashflow.

So yeah, we learned a lot of things young, I did, and then went to college and thought I'd be working corporate route. had no intentions of being an entrepreneur. I got a degree in accounting and finance and went and worked public accounting and thought my entrepreneurial days were over, but little did I know they were not.

Jeff Holman (03:33.484)

Yeah, did, it sounds like you did like a decade in maybe corporate world before getting back into the entrepreneurial world. And you really got into it hard, but before we get there, I wanted to ask a little bit more about this 13 year old, Greg, you know, is there anything from that time period, selling candy, mowing lawns, whatever other odd jobs you might've done? Like, what's a lesson that you kind of picked up then that maybe has stuck with you or maybe even influenced what you've done?

with your team or your partner or your businesses. I found a lot of people, a lot of people, especially CEOs who are, that's just ingrained in them, they draw on those early lessons every now and again. And it's kind of surprising how ingrained those early lessons are.

Greg Schow (04:19.842)

Yeah, I think we do form our personality and especially our business personality really young, right? We learn and improve skills, but when you're selling things or working with clients as a 15, 16, 17 year old kid, you realize you've got to take care of them or you won't get another customer. And so really it's kind of a customer centric idea, but also this idea of like hard work and blue collar.

Just get out there and make it happen. One of my favorite quotes is from Amelia Earhart and she says, the most efficient way to do something is to do it. Sometimes I think we get lost with that as we get bigger in corporations and process and process improvement. I'm a huge fan of all those things. Sometimes you just have to be an entrepreneur and you have to just go do it and get it done and figure it out as you go. I love that. I think that definitely.

Jeff Holman (04:58.573)

Yeah.

Greg Schow (05:17.79)

We've kind of built that into the DNA of our companies.

Jeff Holman (05:21.453)

That makes perfect sense. It aligns with a tagline that I adopted from my law firm a while ago called innovate with confidence. And there's kind of a whole thing around that, but essentially I see a lot of innovators, people building brands, platforms, products, trying to launch something new in the world. And I see a lot of people who want to do that. They say they want to do that, but actually do it is a totally different thing. And I think from my perspective, there are different types of fear that stop people from taking action.

But really the only solution to having fear stop you from taking action is to really just take action. Once you take action, you're kind of eliminating the need for fear anymore because you know what's going to happen. You're afraid of what's going to happen, but once you do something, you know what's going to happen. Even if you don't like it, you know what happened and there's no more need to be afraid of it. So I like that quote from Amelia Earhart. That's great.

Greg Schow (06:13.036)

Yeah, no, I think that's exactly right is I'd rather deal with the known and have it be a problem than deal with the unknown that you just don't know because you never tried or never went down the path. And so I think you're exactly right. Just hitting it on the head, just going after it, get it done. And you're gonna have to innovate on the way and you know that. So let's just go and get the process started.

Jeff Holman (06:32.107)

Yeah. Yep. So, was there anything, because I know later, I think we're going to talk about a little bit about how you've dealt with team. Teams are really important to you. Early on, again, just not going too far into this, but early on, did you have inklings of what a team meant or, you know, did you get lessons from a good partner in the business when you were young? Where did this team mentality come from?

Greg Schow (06:58.71)

Yeah, good question. think sports and playing team sports is probably a big part of that. Most of my businesses early on were small enough that it was kind of me and maybe one other person. So there wasn't a whole lot of team aspect to the original businesses. But sports, if you have any kind of success in any team sports, you know how critical it is that, hey, I'm the point guard and I may not score. But if I get him an open shot and he gets the assist, he's more engaged, the team wins.

I don't get the accolades and I don't care because all I care about is the win. And you learn how to sacrifice. We had a player on our team who was our rebounder. He was our hustle guy and he didn't get many shots. He had to create his own, but he was such a team player. And you just see that over and over in sports. And so now trying to integrate that in with teams and businesses and realizing what we can't get there alone. We have to work together to build this the way we want. And it's super fun when you succeed.

There's the quote that says, if you want to go somewhere fast, go it alone. If you want to go far, go with the team. And we see that every single day in our company. So it's absolutely critical.

Jeff Holman (08:09.645)

Yeah, that's, I'm one of the things that I'm only, you know, maybe nine or 10 episodes into recording for this podcast. And I have to say that one of the things that shocked me the most, aside from how impressive so many people are with these backgrounds and early entrepreneurship, you know, opportunities, things like that, is every, almost everyone to a T comes back to this aspect of team, building up people, focusing on culture.

So I'm not surprised to hear you say that, but maybe that's because I've just heard eight or nine other people before you say the same thing. So it's a theme that we're gonna have to develop out on the podcast a little bit more. And I'm saying that just for my own benefit as much as anybody else in the audience. So I'm.

Greg Schow (08:51.808)

Yeah, well I’ll throw one more story out there jeff because it's kind of informative and this is I’ve heard You know your podcasts and things are great. Our businesses are very different. We're not software. We're not private equity. But here's what I mean. We're a little counterintuitive. I had a great business mentor when I first started out Someone I respected deeply knows business knows people treats people great

And he said, Greg, if you're going to go the entrepreneurial route, really think about it because if you can go it alone, you should never get a partner. And I listened and I took it in and I understood everything he was saying and I promptly ignored it and went the other way because I knew what I wanted to build was something with someone I love to work with someone I love to grow together with someone, a sounding board. And I knew I didn't want to build it alone.

And so lots of times we talk about mentorship and getting shown the way in the path. And sometimes that means we have to ignore that too and know what's right for us and our business, right?

Jeff Holman (10:00.737)

Yeah. for sure. Making the right decision for your situation. I mean, that's what strategy is all about, right? We have, I talked to lot of businesses about their business strategy and how their IP or their patents or trademarks or how the legal side of things fit into that business strategy. And it does, it's so individual. can't, anybody who's ever out there saying, I have a strategy, know, join my course and learn my strategy. It's like, well, that's fine, but your strategy is not my strategy and my strategy is not his strategy or her strategy.

And so to your point, I agree 100%. Mentors, a lot of people who are mentoring, they're mentoring because they've been successful. They've been successful because they've overcome these bad experiences or good experiences or both. I know a lot of, you know, I've seen behind the curtain in a lot of these businesses, a lot of people have bad partnership, legal interactions that lead them to that exact conclusion. Don't do a partner, whatever you can do, you know, never wanna do it again.

And to their credit for their experience, that's probably the right decision for them. Right. But how did you know that it wasn't the right decision for you just from the team efforts that you'd had or the type of business you wanted to build or, you know, because it's, it's something to have a mentor and then say, I really appreciate what you say. I'm going to go a different direction.

Greg Schow (11:21.708)

Yeah, I think it was a couple different things. So number one, I really valued his opinion. So I wanted to understand exactly why he was saying it, what things to avoid, because there's a lot of wisdom in what he told me, right? And I needed to internalize that, figure that out, make sure we had all the agreements in place before we started, because partnerships can go bad. Many times they do go bad. I totally get all those things. So I think it made me a better entrepreneur, and then it made me have those conversations.

with our partnership and make sure we had everything lined up and we were on the same page and we weren't just starting you know shotgun from scratch without a really detailed strategy. And that said you'll hear this a lot from entrepreneurs it's lonely at the top right it's a tough road it's really hard and at some point your wife gets sick of talking to you about it and so you really need like a friend and someone you can really build that with and I've been really lucky with

the partner I chose. He's been a good friend from middle school. played sports together in high school. We played against each other. We went and played in national championships when we were young and three on three round ball ruckus, hoop it up type tournaments. And we just had a blast, but he's also on the East coast and I'm here. And so we're not, we're not in the same room a lot, but we just work so well together. And I think we both worked really hard at it.

but we had a very clear vision from the get-go. And I think, ironically, my mentor's advice really helped with that.

Jeff Holman (12:59.319)

set you up for success, even though the exact action was different from the advice, huh? So let's get into your business. I'm really excited to hear more, because I know a little bit about it from interactions we've had before, and I know you've expanded over the last several years into more stuff, but kind of take us back to when you decided to move on from corporate life, right? How did you make that leap and say,

Greg Schow (13:07.191)

Thank you.

Jeff Holman (13:25.527)

You know what? Now's the time. Was it kind of a soft launch and you said, I got the side project or was it like, Hey, I'm, I'm out of here tomorrow. I'm doing something new.

Greg Schow (13:35.17)

Good question. guess it was a little of both. And so I had a little side hustle going on. One of my friends went to college and we bought some vending machines up at University up in Idaho and kind of had this little side hustle again, blue collar, very, you know, very simple business, but filling vending machines, changing it out, putting a new product. And when he left school,

Jeff Holman (13:49.751)

Mm-hmm.

Greg Schow (14:02.582)

He decided he was ready to get out. And I said, hey, let me buy your machines. And so I partnered with my current partner, Mike. And so we just kind of had that on the side. And again, I was planning on going the corporate route, worked public accounting for a while, worked at a hedge fund for a long time, loved it, enjoyed going to battle in the markets every day with some of the best investors in the world. Super fun. There's no more competitive game.

than the markets. So that was really enjoyable. But that said, it was pretty clear that that road was ending at some point. And the entrepreneurial itch, just couldn't scratch it all the way. And so we needed to, I called my partner and said, hey, I think I'm ready to do this full time. What do you say we grow?

Jeff Holman (14:49.591)

How long, how long, how long have guys been partners at that point? Cause it sounds like this started backing maybe college and was, and went on for a long time. Had you been together that whole time?

Greg Schow (15:00.214)

Yeah we had so I mean it was a couple of vending machines it's nothing extravagant right a couple vending machines eight years in I just sent him texts and we talked about the business and like got a good feel for it he was doing his MBA at Darden at the University of Virginia at the time and stayed back east and worked for some really impressive companies especially around process, Danaher, GE, Six Sigma all those things and so he was getting a view of the world.

It was very different than the investment world and the entrepreneurial world I was seeing. He was seeing it at the corporate level at the top echelons of business. So it was really fun education for both of us, I think, to kind of bounce ideas back and forth. So probably eight years before we decided to launch fulltime.

Jeff Holman (15:47.891)

and probably very complimentary experiences. Did you guys both go in together? Was it like, hey, I'm ready to go, you know what, me too, let's just launch? did you, how did that work?

Greg Schow (15:57.602)

He joined full-time later, so he stayed in corporate for a good five or six years after that. And so I launched here in Utah. We bought a few businesses. Again, we started with vending machines because we were already in it. And so we made about 13 acquisitions over a three or four year period. grew from...

Jeff Holman (16:03.511)

Okay.

Jeff Holman (16:19.499)

All vending machines, like just buying routes, buying areas, whatever that's called.

Greg Schow (16:25.462)

That's right. And so we, we ended up having around 500 vending machines here in Salt Lake. were doing over a million in revenue, which is tiny, right? But for a vending machine, people are like, you got a million dollars in revenue for a vending company. So we, did that and it was really interesting though. I learned early on from one of my sons. I was used to playing in the financial markets. And again, I took a lot of pride in that we were going up against.

Jeff Holman (16:31.414)

Okay.

Jeff Holman (16:39.746)

Yeah.

Greg Schow (16:54.818)

Goldman against all the hedge funds every day in the markets trying to eke out returns for our investors. And that was like really prestigious, really fun to do. And now all of sudden I'm driving a truck and filling up Snickers and Cokes and not interacting with people professionally much at all. Right. And I overheard my son, I think he was in kindergarten or first grade at the time talking to one of his friends saying,

Jeff Holman (17:05.037)

Yeah.

Greg Schow (17:20.106)

Yeah, my dad's felt sell Snickers and Cokes like it was the coolest job ever. And I realized it's not about the prestige. It's about, you know, building businesses the right way. And so we, we have kind of a collection of non sexy businesses, but they work great and we invest in our people and our people make it work. And so I learned that early on that it's not about the prestige or the ego. It's about the people.

Jeff Holman (17:49.195)

Yeah. Well, you used a key phrase there that I think has gained a lot of popularity recently. And maybe there's a lot of myth around it too, but this, this concept of non-sexy businesses, maybe vending machines, right? Or you've got some others that you're into and you can tell more about it, but you do windows and cabinets and, cabinetry, you know, doors, think, and, stained glass now. And, the latest one was what trailers is that maybe there's more sense than the last one I, that you and I talked about was trailers.

Greg Schow (17:58.32)

business.

Jeff Holman (18:16.889)

So you call them non-sexy businesses is you see a lot of stuff online, LinkedIn, know, these groups talking about buy a boring business. It's easy. Just go in and, you know, buy it at the right price, get somebody who's retiring and then, you know, sit back and watch your money grow and just, just do that, you know, two or three or a dozen times and you'll be great. Is it, I getting the storyline right? Is that, are you seeing the same stories out there that I am?

Greg Schow (18:43.746)

It's a good question. I don't know what the latest fad is they're selling online as well as, you know, I know there's things out there. We, people would ask us what we did and we had no idea what to call it. So now they put a business school term on an ETA, entrepreneurship through acquisition, blank check funds, things like that. We didn't know what to call it. So we kind of called it prop equity.

Jeff Holman (19:02.498)

Mm-hmm.

Greg Schow (19:11.222)

Proprietary equity. weren't taking outside investors. We were buying companies and building them, but no one knew what prop equity was because we made the term up. You know, it's not private equity. It's not proprietary trading from the hedge fund world. It's prop equity. We're doing our own thing. We're building small businesses. And we, we came up with that term before we'd ever heard of it, you know, buying non-sexy companies. They worked 30 years ago. They work today and they're still going to be around in 30 years.

and in those kind of businesses it's paramount that you execute and with our background we thought this is a great fit for us we're not going to be in some biotech incubator we're not going to you know do a software tech startup that's for other people and there's nothing wrong with those businesses those are fantastic but that's maybe one thing I learned in the investment world is there's

15 different ways to truly make money in markets. And intellectually, I can learn every one of those 15, how they work, how to operate it, when to trade. But my personality should dictate my correct trading style or investment style, right? If I'm counterintuitive, if I'm a long-term thinker, if I'm short-term, my personality has to drive how I invest.

And it's the same way when we're building businesses. We build our businesses very different than most people, but we know it fits for us. And so that's how we've decided to grow and non-sexy is a piece of that.

Jeff Holman (20:45.292)

Back into this idea of kind of unique strategies for who you are, where you're headed, what your circumstances are, what your resources are. I love that. So I want to get into kind of one of these pivotal moments, breakthrough moments, if we can. But before that, I just, I don't want to linger on this too long, but I'm really curious. What are one or two or three of the myths that you think are out there around?

these around buying boring businesses that somebody who hasn't been down the road, who hasn't been traveling this for 10 or 15 years might fall into if they're not aware of these kind of traps or myths.

Greg Schow (21:28.33)

Yeah it's a good question and maybe I'll put it this way we got a call from our banker a couple weeks back who said hey we've got a business that we helped you know one of these groups acquire it's been about two years they've driven it kind of into the ground they're down 40 percent in revenues and you know 75 percent and we think you guys can really turn it around your operators you know what you're doing we have trust in you.

Do you want to come take over this business?" And we said, tell us a little bit more. And they said, well, it's an ex-Goldman guy who bought this company and he just doesn't know how to operate a company. I think the problem with a lot of the pitch on those things, I think a lot of the information may be correct. That competition is less in small, non-sexy businesses for acquisition. I think that's probably correct. I think you need less capital to start.

Jeff Holman (22:22.006)

Mm-hmm.

Greg Schow (22:26.558)

think that's correct but I think the way they're going about it is they're bringing in the wrong people. These are people who want to be private equity investors who want to sit in a boardroom and make strategic decisions and don't want to get their hands dirty. That is not how this works. You have to get your hands dirty you have to get in there and you have to build trust with your people and at least that's how we've done it and we've really

Jeff Holman (22:42.314)

They want the passive income.

Greg Schow (22:55.882)

really enjoyed that. So I would say to those same people, I would just ask a follow-up set of questions. Are you willing to get in there and get your hands dirty, work 60 hours a week? If you're not, this might not be the right fit. If you're not willing to get greasy and put away your, you know, your nice suit and, and shoes and wear jeans and a cutoff t-shirt and not care that you're out there with the guys throwing stuff around in the steel shop or the wood shop or installing rails for a day because somebody called in sick, like,

That's how we've done it. Again, very different from most businesses, but it's sure been fun and really rewarding for us.

Jeff Holman (23:33.261)

Yeah. And so you got to be ready and willing to sell the Snickers and the Coke. Leave your ego at the door, huh? So, well, it'll be interesting to see where that trend ends up and how many people, I'm sure there are going to be a lot of people who find success. I always wonder if it's the gurus kind of teaching the courses that are also finding success or if they're more successful with the courses than they are being the operators like you're doing, you and your partner.

Greg Schow (23:40.747)

Yep.

Jeff Holman (24:02.988)

Well, let's jump into like a pivotal moment or a breakthrough moment for you. Something where, you know, maybe there was a key inflection point in your business. Maybe it was, you know, maybe it was going from one business to two businesses, or maybe it was a moment in one of your businesses where things were just stuck, plateaued, and you came to this realization like, why are we not doing this? You you've mentioned a few times kind of this counterintuitive thinking, so I wonder if that plays into it.

Greg Schow (24:03.319)

Yeah.

Jeff Holman (24:32.908)

But I'm really curious to hear, know, something that, something that you ran into either an obstacle or a plateau and what that, what was going on with the business and you know, your, your team, how was that looking when it, when you started to kind of recognize, we'll call it the opportunity to fix something, right? Or the opportunity to break through. Is there something in there that you've, that you've thought of that you can share with us?

Greg Schow (24:53.292)

Right.

Greg Schow (24:56.982)

Yeah for sure I would say after vending our next acquisition was a steel fabrication shop so we make rails and staircases for large apartment complexes. We had some manufacturing expertise but we never thought about we should get into steel right and this was actually really hard from a search perspective we looked at well over a thousand companies before we settled on one.

and part of that was because we didn't have a tiny niche we were looking at but part of it just was we wanted to make sure the first one we got right we had to get this first one.

Jeff Holman (25:34.624)

What did, yeah, what did that look, mean, de-risking, that's like another concept and a theme that keeps occurring throughout these conversations. What did your team look like at the time? Or was it just you and Mike, your partner, or what did, do you buy into a team that was, you know, 10 people running a shop or a hundred people? What did, what, when you decided to buy this, this railing, steel and railing shop, what was it like?

Greg Schow (25:58.476)

Yeah, good question. So it was just Mike and I, when we were out searching and the company we bought had 28 employees. And so we were looking to grow that and learn the business and also learn how to grow it. Usually by the time we buy the company, we've done the due diligence. We kind of have a game plan of here's two or three things we know we can improve. We know we can fix. And if we can hit on most of that, this is going to be a great.

Jeff Holman (26:03.052)

Mm-hmm.

Okay.

Greg Schow (26:27.06)

a great opportunity for us. And so we felt really good about the people we were buying into at that business.

Jeff Holman (26:33.612)

So 28 people, there were around 30 people, is that right? Once the two you came in. That's size where you still know everybody, right? You still kind of, walk through the shop, you're like, hey Joe, hey Sally, you know who they are, you probably see their family. What were one of the two of the things where you said, you know what, when we buy this business, if we can flip these two levers, we can probably do, probably make this into something good. Although I think with the story where it's going is you say,

Greg Schow (26:36.982)

Yeah.

Jeff Holman (27:03.308)

We're going to flip these two levers and then something else comes along and you're like, wait, we didn't plan on that, right? So I'm curious to hear what the levers were and then maybe what kind of derail that if anything.

Greg Schow (27:09.142)

Yeah, for sure.

Greg Schow (27:14.24)

Yeah I would say the first thing we looked at our first problem and challenge is about three weeks in we realized our head fabricator was not a good fit for us. When we buy a company we plan to buy a healthy company and grow it better he was not a good fit culturally for what we were trying to build but he was the one who knew everything he had trained everybody else.

taught everyone, it was a big, big risk. And so we, we hemmed and hawed over that decision for a while. Eventually we let him go and it was one of the best things we'd ever done because everybody else in the business could step up and could flourish in a way that they were held down because of his leadership style at the time. So that, was a pretty big thing. One of the things we knew we had to get into is we had to add structural steel to the business.

Jeff Holman (28:05.484)

I see.

Greg Schow (28:13.972)

At the time, they were building railings and staircases, but they were telling every GC partner they worked with, hey, you've got to get structural steel elsewhere. You've got to get a lot of this other business from someone else. And I made the comment when we bought the business, boy, they must really, really like you guys to only give you a piece of the business and then generate more work for themselves to go find somebody else to do everything else. And that's a pretty big risk.

And so we really built that out with our team over the next few years. And it's a challenge.

Jeff Holman (28:46.582)

Well, we're competitors. We're competitors that you're bidding against doing both. So, I mean, you must've been really good at railings and the stuff that they were, that they were giving you work for if, if they could have gone to a one-stop shop somewhere else. That's.

Greg Schow (28:50.86)

Bye.

Greg Schow (28:58.946)

Yeah, I think they did have really good relationships but you knew that was probably short-lived. We either needed to offer what the customer wanted or we had to change our strategies but we probably weren't going to exist that long and we didn't know that going in. We learned that within the first couple weeks and so it's like wow okay we need to pivot already and we're three weeks in. We've got a fire ahead fabricator and we've got to grow in a business that nobody here wants to grow into.

but we've got to sell them on the idea that we have to, and this is a survival issue.

Jeff Holman (29:32.109)

And those weren't issues that you were, not the issues you had flagged as like the levers that to pull necessarily. Or did you, surprises or.

Greg Schow (29:37.962)

No, no you are.

Yeah, we planned on growing our GC base, selling into more GCs. We planned on potentially adding a product line that didn't pan out. I pushed and tried and the data kept coming back, don't go this direction. So we didn't. And so yeah, that first acquisition was a really great success, not for any of the reasons we planned on.

Jeff Holman (29:46.86)

Mm-hmm.

Jeff Holman (30:05.228)

I mean, that's business, that's small business right there, right? That's so funny. So, I don't know if maybe one of those was a pivotal moment. It sounds like they were pivotal issues in the business. What would you say would be kind of that inflection point, that moment where you hit the wall or worked through an issue?

Greg Schow (30:10.282)

Right. Yeah.

Greg Schow (30:28.706)

So those were some of the issues I would say kind of a breakout moment is about five years in after we purchased a steel company we've grown it about three times since we started and we'd really put a management team in place so it wasn't running like a solo operator business like many of these small companies do everything runs through the CEO. We had to build a team we had to build the confidence and the trust to continue to grow the business without single point of failure being the CEO.

And so as we did that we really came to a point and again we didn't necessarily plan this but we came to a point where we said okay we can continue to grow the one business or we can acquire another business and do the same thing. And so we had an opportunity to buy a tangential business that was in doors and finished carpentry worked for a lot of the same clients but again a totally different business and not what we planned on but the opportunity presented itself and

we thought we'd put ourselves in a good position. A lot of our strategies, which are people-based, this time at least we knew the industry very, very well. And so we knew we'd have to learn the specifics of carpentry, but we knew all the same clients. So there was a lot of things we had de-risked on acquisition number two. But that was a key moment for us to say, we're not gonna be just a one business company. We're gonna continue to acquire and build companies.

Jeff Holman (31:46.657)

Yeah.

Greg Schow (31:58.358)

the right way, building for the long run. And I think that's kind of what distinguishes us, Jeff, is I saw in public markets, public companies make decisions for three months quarterly earnings, right? Private equity companies are better. They make decisions with a five-year timeframe towards selling their business, growing fast, selling, you know, cashing out. We thought they were both inefficient.

Jeff Holman (32:12.353)

Right. Right.

Greg Schow (32:26.826)

and we want to build companies, we tell people for 250 years. Obviously that's well past how long my partner and I will live. But if we're making decisions with the third and fourth generation in mind, we're gonna make very different decisions about a building we purchase, about the equipment we buy, about the people we invest in, than if we're thinking two years out towards an exit. And again,

Jeff Holman (32:36.235)

Yeah.

Greg Schow (32:52.99)

Nothing wrong with that. I know a lot of great people in private equity and building companies in amazing ways, but strategically that was a better fit for us and how we want to build our companies.

Jeff Holman (33:01.994)

Yeah. That reminds me, and I don't remember now who I was talking with. Maybe it was you. Maybe I feel like it was somebody else, maybe another guest, maybe even a LinkedIn conversation. Somebody was saying, have you heard of the term? It's a Japanese term. And they're like, the Japanese build companies for hundreds of years of longevity, not just, you know, that early, you know, five year exit, whatever time. Nothing wrong with other timeframes. But did you and I talk about this another time or is this some other conversation I'm thinking of?

Greg Schow (33:29.73)

I think it's a different conversation it's very it's very Japanese in its thinking and not just Japanese right Asian cultures think a lot longer term than typically we do in the west. We're part of an amazing group called the tugboat institute and it really focuses on building they call them evergreen companies for the long run that last and last. It's called evergreen companies and it's by the sorry the tugboat institute.

Jeff Holman (33:38.262)

Yeah.

Jeff Holman (33:50.816)

What was the name of that?

Jeff Holman (33:59.295)

Okay.

Greg Schow (34:00.162)

And so it's a group of 300 or so CEOs who are building businesses the same way. And it's fascinating that discussions around those tables are completely different than discussions around tables with other CEOs. They're yeah, totally different paradigm. So.

Jeff Holman (34:12.704)

different than your hedge fund years,

Jeff Holman (34:17.548)

Interesting. That's probably a good resource for people who are like-minded with a similar objectives to what you're doing. Well, so what did your team, like your team was bigger, the business was 3X. I don't know if that means the team was 90 or hundred people at that time when you're making a second acquisition. Who were some of the key people that helped with that process? I'm sure your partner was there. Were there other key people that kind of, you built a team that you could then transition in and help out? Or did you just have to like,

Greg Schow (34:24.449)

Right.

Jeff Holman (34:47.148)

de-risk, but start building a second company in parallel to running the first one. What did that look like?

Greg Schow (34:53.974)

That's kind of how it's been, Jeff. we, know, that second acquisition was my partner and I, when we bought the company, we really liked the management in the group. so luckily, knock on wood, we nailed that one. The management in that company are fantastic. And so we didn't have to get nearly as involved in that business as we did the first time. But they're, doing great. And we, we plan to, each of our companies, plan to stand alone. We don't.

work with lot of synergies. Most synergies, don't think, and there's lots of scholarly research to show this, but most synergies don't come to fruition that they sell on Wall Street. And so usually we try to operate them as independent companies. And then if any synergies appear later, fantastic. But we don't plan on that with any acquisition. And so we were in the guts of that business working with those managers and the president of that company as well, just helping to grow that.

Jeff Holman (35:34.55)

Yeah.

Greg Schow (35:53.504)

when we bought our third company and now our fourth and our fifth. And so as we continue to scale, our team does get bigger and it is easier. We now have a CFO. We've never had that in the past. And so we have someone who could just handle the finances instead of Mike and I. looking, we have a head of HR that can handle things across the businesses, not just for an individual company. So our team continues to scale.

Jeff Holman (36:15.947)

globally.

Jeff Holman (36:19.583)

Yeah, because you're running this as a holding company of sorts, right? With different assets under it. And so you have maybe not shared management, but shared SG &A of some sort across the holding company level. Well, I'm curious, that breakout moment, buying that second business, where did that put you? Were there any unexpected gains? you're like, my gosh, the management was better than we thought.

Greg Schow (36:24.194)

or try to reach it.

Jeff Holman (36:49.685)

Like how did that kind of propel you from having right-sized and tripled the first business to buying a second and then like what's the trajectory shift that that created for you?

Greg Schow (37:01.218)

It really I mean you hear all businesses and you look at all their charts and it's kind of hockey stick growth but what that second acquisition did was it gave us the confidence that the first one wasn't just luck we could continue to scale this and while we bought the second one we had a third one under LOI and we were thinking we can't buy two at the same time

But timeframes worked out that six months later we bought the third company, was Willett Stained Glass Studios. They do stained glass nationwide, basically telling people's story through a beautiful art of glass. And it's such a fun business to be involved in. But when you walk in on day one and everyone says, well, what experience do you have in stained glass? And we say zero. And all the chins hit the floor. And then you tell the rest of the story and say, but that's OK.

because we have lots of experts here in the business we will learn it as fast as humanly possible and give us three months and we're gonna be pretty darn good at this company and here's what we know so far here's where you're positioned here's where we need to grow here's how we're going to build you as a team and so all of sudden it's like they do know what they're doing they just haven't applied it in stained glass yet got it and so it's fun to watch that the light turn on in people's eyes is that that conversation shifts.

Jeff Holman (38:19.199)

Yeah, yeah.

Greg Schow (38:25.622)

We're very transparent about we don't know stained glass yet. We're going to, but here's our plan. So.

Jeff Holman (38:32.715)

That's cool. That's the confidence you get from taking action, right? From the two times that you'd already acquired and run the businesses, or at least the one time, we'll call it one and a half by the time you acquired the stained glass, right? So that's pretty cool. Greg, I'm so appreciative of you sharing this with me and with our audience. It's always been just immensely satisfying to talk with you about this type of stuff.

Greg Schow (38:43.744)

Right.

Jeff Holman (38:58.379)

And I know that a lot of people in our audience are also, they're going through these same things, right? They're trying to acquire a business or they're trying to fix the culture. Maybe they're dealing with that employee that they've got to handle and figure out, do we keep them or not? And they might not be doing it in the same order that you've done it in, but they're doing it in an order and they're going to run into a lot of the same things. So it's really valuable for all of us to hear these types of things that you're sharing. Yeah, go ahead.

Greg Schow (39:25.282)

Jeff, I appreciate it. Yeah, I appreciate it. You're phenomenal. I know you're a great advisor to many of us in the business space and you do a great job and it's always fun to talk with. I always say I love to talk with smart people doing smart things. So it's always fun to be on with you.

Jeff Holman (39:43.359)

Yeah, that's good. If you had some parting wisdom for a scaling CEO, somebody who's, they might not be building a brand or platform or whatever, they might be building a boring business. What type of advice would you give them?

Greg Schow (39:44.962)

If you have to be part of the experience of the years, they might be going through a process. What type of advice would you give them? One of my favorite people is Charlie Munger, who passed away a few years ago. And as he passed away, I've read a lot more of what he and Buffett talked about, which I think are really wise tenets.

One thing Charlie Munger always said was show me the incentive and I'll show you the outcome. And I think that's true, not just for our employees, but also for us as business owners. I know I wouldn't run the kind of business I want to if I was looking for a three year exit. Right. I can't expect my people to act one way when I, the CEO, am acting a different way. I'm ready to cash out as fast as I can.

And so I like that our business strategy aligns with who we are. And that can then translate down to, our people. We, we always talk about we'd like to grow businesses, but we love growing people more. And I think that's kind of my parting message is just, just enjoy the ride. Get on, get on the bus with people you love to build with and just enjoy the ride. So we have a blast doing it and it's hard. It's tough.

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