The Real MBA No Business School Teaches: How Entrepreneur Peer Groups Changed Everything

I think it'd be helpful for the listeners to talk a little bit about groups. These are questions that I get a lot. You rose to the global president of EO. I've been a YPOer, uh, I'm in Strategic Coach. I'm in a group called CEO. I'm in a group called the Genius Network. I spent 9 years in Vistage and I was not a great student. I didn't go to business. I barely got outta school and then I, then I didn't go to business school, but somehow I've built a lot of businesses in my life and I really attribute that to getting in some of these groups and getting around other entrepreneurs. What was that journey like for you? When did you discover, like, hey, there's places I can go to get around people that are up to something and going somewhere? And what did you do?

As you've experienced yourself, it was incredibly instrumental to my journey and to giving me direction in that journey. And I stumbled into those associations back 30-odd years ago now, in the Entrepreneurs' Organization in particular, I was invited to a function in Brisbane in Australia where they said, look, we're starting this new chapter of this group called— back in the day it was called the Young Entrepreneurs' Organization. And I said, I haven't got time for that. I'm trying to grow a business. I'm already working 15, 16, 18 hours a day. That's not for me. And they said, look, just come to lunch. Come to lunch and we'll tell you about this organization and what it can do for you. The lunch was at a very nice restaurant in Brisbane, so I took that offer up. That's a good start. After the first bottle of wine, they had my attention. After the second bottle of wine, they had my credit card. And after the third bottle of wine, I was chapter president. It was an all-in start to those sort of organizations. An incredible experience for me over the next 15 years. I was so excited about what it was giving me at a local level, I became a regional director as a volunteer for the organization. And then joined the global board and ended up my tenure in 2006, 2007 as global president. And every step of that journey was another eye-opener for me. Meeting helpful people in your local community, in your city, then in your region, and then in different places around the world. Friends I have today from all over the planet that I can still call on for help or advice or guidance or even just some basic feedback on different things I'm dealing with. And these guys and girls have got no interest in my businesses, no interest or really understanding of the sectors I work with even, but they're just a great sounding board of experience that I've been drawing on for 25-something-odd years now. And I would encourage everybody to investigate that path, whether you think you've got time or not, find it. Because that an hour a day that you can spend talking to different people around the world, or even 30 minutes, and the time you get together as part of a group once a month with a closer network, those things Those things were certainly pivotal for us or for me and my journey, and it gave me the education I didn't get from going to college.

One of the hallmarks of YPO and EO, which are very similar in structure and execution, is confidentiality. And we have a lot of trade. We're both in franchising. You've been in franchising with Poolworks. Maybe you've done some other things as well. Uh, we have an incredible trade association called the IFA, and there's all kinds of groups and there's all that stuff, but you also kind of get in an echo chamber when you get into your own association, into your own industry. And every industry has their trade association. The thing about EO and YPO is that it is people that are from all types of different businesses.

Yeah.

And you rare— you don't find a lot of competitors in there. And then there's this confidentiality aspect to it. And what it— what, what I saw really first when I got into YPO, I'll say Vistage really shaped me and educated me and gave me tools over that 9 years. Vistage is really good at giving you tools. You have a meeting every month, you've got a mentor, you meet with them every month, they have a speaker every month, and it's one day a month of like You know, MBA type stuff and, and it's stuff you can take back and put in your business the very next day. Uh, very well delivered, uh, highly recommend it, but it was all local to me. And then when I got into YPO, what I realized is there's not anybody in here who hasn't sold a business. Everybody in there had, and I didn't even think what life after selling my business would be like. I didn't, it was like the abyss. You know, up against the— what do they call it? I was up against the firmament at the top of the world.

I was—

my hands were on the glass, not knowing what it would be like on the other side, that there could be freedom and choice and, and these things. So, but then you get into YPO and all of a sudden it's like, yeah, I've sold 3 businesses and well, and so now you're like, okay, well, it gave me that exposure. And then I got into a small group. EO has forums, correct?

Yes, yes. Yeah.

And you get in a small group with 6 to 8 people and you kind of— these are— it's in the lockbox. You can talk about anything that's going on personally, business, in your marriage, with your health, in, you know, in your business. And, and these people are there to kind of help you. So, um, I— when I saw that you were the global president of EO, I, I had to believe that it was a big part of the ultimate success that you had.

Oh, huge. And you make two great points. The two things that, that I think I found most significant in the journey I've had with EO over in the last 25 years or so is the diversity of businesses that you come across that are not in your sector, have never had anything to do with what you've been working on for a decade. And yet those individuals can give you an equal amount of information to help you on your journey regardless of that. That was my first big lesson was understanding that I was in a bubble. And I figured that unless you know my industry or what I'm trying to achieve here, you can't really help. And the answer was, yeah, they can. And it was funny, my first experience with that was back in '97. I think it was, where I went to my first EO University in Tokyo, in Japan. And I wasn't going to go because I figured I don't speak Japanese. I don't like Japanese food. I'm never going to do business in Japan. Why would I go to Japan? And it was my grandmother at the time who said, Troy, I have this feeling you should expand your horizons. And I think you should go to this university, this event in Tokyo. She said, I will pay for it. And if you don't get anything out of it, then you don't owe me a dime. But if you do, then of course you can write me a check. I got on the plane. I went to the university with all these thoughts in my head that, what am I going to learn here? These guys have got nothing to do with my business. It's a different country. I'm never going to work here. This is probably a waste of money. On the first evening, after about 30 minutes in a room of 300 entrepreneurs from all over the planet, I raced back upstairs to my hotel room and rang my grandmother and said, check's in the mail. Wow, this is extraordinary. I had this whole world open up in front of me that I knew was there, but I didn't believe was going to be helpful to me. And then that set me on this journey of, well, if they're not in my sector or they're not in my industry or know nothing about my business or my life, maybe I should just ask a bunch of questions and see what feedback I can get from these guys and girls that might, in some part, give me a different view or an alternate perspective to what I'm looking at at the moment. And that's exactly what happened. And it sent me on this journey to find more of these individuals in more places around the world with more information that I could distill into what I was trying to achieve in my backyard and just pick and choose elements of information that was going to be helpful. And EO and YPO developed that comfort, that opportunity to be vulnerable and to ask those questions and not feel silly about it. And also knowing that you're going to get an answer to the question and can have a conversation in confidence that it's just between you and that individual. And I think those two things were an incredible aha for me that I needed to be vulnerable. I needed to be a leader that was okay to be wrong, okay to ask questions, and happy to pick up a phone and talk to anybody that I felt might be able to help me out.

I remember specifically, sitting in a forum meeting with my forum mates and talking about my business and then just realizing as the words were coming out of my mouth, like, these guys are going to slap these words right back in the—

right?

These— I was, I was like, why? And I, I even caught myself saying, that is a stupid thought. You're stuck in your own thinking.

Why?

These people are gonna, you know— and sure enough, with some grace, they were like, you know, why, why would you— why wouldn't you do this? Why wouldn't you do that? And I I just realized that I had surrounded myself with a very comfortable group of people, some of which we pay, by the way.

Yeah.

I mean, when you're, when, you know, when your name's on the, the what, the front of the check or the back? Yeah. When your name's on the front of the check and their name's on the back of the check, they're likely to tell you how smart you are sometimes.

Yeah, exactly. Because they want another check from you. That's right. Where you've got a forum group and groups like EO and YPO, They get nothing to win. They've absolutely got no benefit other than to the reward of helping and the reward of sharing. And that experiential way of learning from each other, I think, is key to those conversations where it's not about giving you advice or being paid to give you advice. It's about just wanting to help out and share some ideas that I may have had or experiences that I may have been through that may be helpful to you. And it comes from a place of service before self-service. It's about, well, if I can help you enough or others enough, then maybe that will be helpful to me down the road and karma will sort itself out. And lots of times over the last bunch of years, that's exactly what's happened to me. Exactly.

One thing that's clear to me is that you've developed a set of fundamentals because you've been successful in so many different industries. And every business has a purpose. Every business has people. Every business has hopefully a competitive advantage that's either being exploited or it's not. Every business has challenges. Every business has budgets, forecasts, and cash flow concerns and the kind of the economic cycle of it. So, you know, I started looking through your book, Future Proofing Your Business, and then I realized that, you know, you're, you are one of those entrepreneurs that could really go into any business and make an assessment of it and provide some value. And then what's incredible about it, and I listened to you speak on another podcast, the humility with it saying, I'm not the smartest person in the room. I'm gonna take a business. I don't have to take it all the way to the moon. I can take it to the next level. Yeah. And then get it to, get it to the next people that can take it. And I want to, and, and one thing you said is you like to leave some meat on the bone.

Yeah.

Some people, when they, when they get into a business, they grow it. And then they try to get, they try to get every single cent out of that business when they sell it. And now the business is overleveraged and the people have a hard time with it where you're like, I like to show the people when they buy this business, here's 3 things that they can do, right? You know, that are, that are strategies that they can, they can implement. And so I had a lot of respect when I, when I heard you say that. So my, my opening question into this buying businesses, and I'd like to unpack a little bit about like if you went into a business today like what would be your process? What would you go through? What are some of the first things that you would do? Before that, what do you look for in a business? What makes a good business that makes you interested in it?

Yeah, I spend a lot of time watching videos, scouting around the internet, looking for angles or sectors or things that look like they're underserviced or are maybe not experiencing the same opportunities as technology does or AI and that sort of stuff where they've been left behind or disregarded along the way by entrepreneurs thinking it's not the next sexy thing. So looking for the unsexy businesses has been part of our strategy over the years to look for things that don't have to make a headline, but we can make an impact in that business. And then that thought process goes straight to that. What impact can we make in that business? How can we add value? And I'm always looking to surround myself with people that can help me with that value. I know what I can do, but I also know there's plenty of gaps that I can't really contribute to because I'm just not good at it. And if I can bring others in to bolt into that business to make that impact, then we've got half a start. And the journey for me is always, as you said, if I'm the smartest person in the room, I'm in the wrong room. So if I can assemble individuals to— to what I believe to be the— deliver the greatest value or the greatest impact on that business quickly, then the next school of thought we have is, well, how quickly can I make myself redundant? Because I don't want to actually work in these businesses as much as I want to impact them and have them go to somebody else who can make their mark on it in the next generation or the next iteration of that business. I'm not that proud that I have to take it to its death. I'm good enough to say, I can get you to here with my skill set and those that I'm bringing into the business. But you know what? I've got a few good ideas that you might be able to implement once you've taken the keys off me. And here's what that looks like. I think you guys are the smarter suitor to do that. So we're almost— we're not chewing their food for them, but we're giving them the roadmap that says, well, we've put this business on the market. We've made as much impact as we can. But we really believe you guys can do better. And so they're buying into that journey, that dream. And that's where the premium comes from, my experience over the years. It's not about just selling the business. It's about selling the sexiness of the next person's dream. You haven't got to make it sexy yourself. You've just got to make it look good in their eyes so they fall in love with it. And that's the worst thing you can ever do is fall in love with an asset. But if you can create that, that sort of connection, then that's where we've found the most powerful exits.

Can you share a few simple tools or things that you do when you go and you walk around a business for the first time? Or how do you sort it? I mean, I can imagine that, you know, you start putting things into buckets and you're like, I need to evaluate this, I need to evaluate that. Do you, you know, can you just give us a simple framework that maybe you do in the first few weeks or months?

So I have a slightly different approach to many. In a diligence process, everyone thinks it's about numbers. It's about the P&L. It's about the governance. It's about the way that they manage the cadence of their meetings and reportings, and et cetera, et cetera. And they're right. That should be part of the diligence process. But when you're buying a distressed asset, none of that exists. That's why it's distressed. So you've got to have a lot of conversations with individuals to find out what's really going on. Because it's not being shown in the P&Ls, it's not on the balance sheet. You can't see any reports or any meetings or things that have evidence of what's going on in the business. So you just got to talk to a bunch of people. So we'll go into a business and I'll just have conversations with people. And not in a controlled or staged environment, it's just, all right, well, let's go and have a beer or let's go and have a coffee. And tell me about what goes on in your role in this business. Tell me about the things that you're excited about, the things that that you're frustrated with and try and understand the culture of the business, the fabric of the business, and then start looking for the data. Because lots of times the data doesn't exist. And so you've still got to triangulate the reality of what's sitting right in front of you and the individual you're talking to and the piece of paper that tells you what they believe is really going on in the business. Lots of times they don't match. So mine's a little bit more of a— I don't know, organic approach to diligence in an opportunity. And then we move to a more technical approach where we're looking through whatever resource we can get our hands on financially or from a governance perspective to try and work out where the real skeletons are.