Ep 62 | Will Your TECH Stack Destroy or Multiply Your Company’s Value?

Welcome to the Exit Engine Podcast, episode 62.

Welcome to the Exit Engine Podcast. Today we have Joe Infante, a longtime IT professional and someone who's been deep in the trenches of business growth. and mergers and acquisitions. And also, as we always do, we have my business partner, Jo Stapleton, with us.

Hey, John. Good morning, man.

Good morning. This podcast is where we sit down with founders, operators, and experts to talk shop. Everything from scaling tech teams and integrating systems to navigating the messy side of mergers and figuring out what really drives value when you're getting ready to sell. We'll keep it real, practical, and honest. Welcome, Joe.

Good morning, gentlemen. Good to be here.

What we find is that most people don't know what to expect because they've never gone through it before. So they don't know what due diligence will be like. They don't know what they're gonna be asked to present. They don't know the rocks that are gonna be overturned and the, you know, and the skeletons in the closet.

And, you know, it's like a surgical procedure except without the anesthesia sometimes.

Yeah. Yeah, that's it.

Without the— it's like a good rogering, right?

Yeah.

I mean, and so that— and that's just the— right, what, what happens if you go through a situation where, where deals fall apart? So what happens when I'm going through this process and I have to go through it 3 or 4 times, right?

It's not just me.

And by the way, it's not just me going through this as the founder. It's my entire family. It's like the— but the senior— it's, it's every employee in my company.

Yeah.

It is everything that's going on, right, affects everything. And so the, the ability to be able to know what to expect ahead of time, to be able to make some changes that I— to affect some change over a period of time to make it better and right and more saleable and more tight in terms of more airtight, right? Those are the things that we're, we're trying to preach because, right, it's gonna, it's gonna, it's gonna stave off so much stuff. Now it's a little bit like insurance, right, John? It's a little bit like— Oh yeah.

And like, Joe, like your expertise, right? Like, and avoiding the inevitable problems that come up after, because no merger goes 100% smoothly. But imagine, like, I can imagine you have stories, and I know we've talked about them, is where you get to— you've closed the deal, and then it's like, oh wait, we have to merge this system? Like, that didn't come up in due diligence.

Oh yeah, yeah, a lot.

Yeah.

And so those types of things, you know, those types of things you can prepare for, right? So like when you're bought, when there's an IT merger or a company that's buying an IT firm, right? Like a solutions company buying a product company as an example, that maybe that they're not used to dealing with people and making sure that the people are right and hiring the people right. But when they buy a product company and they have all this investment in the product, they have all these people required to maintain the product. And then they haven't changed their mindset to say, hey, we're no longer a solution company and a consulting company. We're a consulting company with a product now. And we have to fundamentally think differently about that company going forward than we did on day zero. Day one in that new company is a whole new ballgame.

Yeah, it's funny. My first venture into merger acquisition was very, very large stuff. So when we had the MSP, my prior business, uh, we supported some, you know, larger companies. Our largest company was an international chemical company, the US division, which had 25 plants around the United States.

Yep.

And they just bought and sell. I mean, chemical companies just buy and sell all day long. It's all they do. You're Dow today, you're, you know, you're whatever tomorrow, uh, BASF tomorrow. And they would just go out and buy them. And, and initially we were, we were the You know, we were the, uh, the infrastructure support, help desk, network, all that stuff. And we were never part of the acquisition teams. We were just— they would just call and say, okay, we have 2 new plants in, in Louisiana, uh, we need to, you know— and that was back in the day when—

Get them online.

Yeah, get them online.

Took 4 months just to get the circuits, you know what I mean? So then we eventually talked them into— it's like, let, let us be on the— let us be on the integration team. You know, and then we went out, but it was such a second thought. The business people just went in and said, what do you make here? Well, we want to sell that. And, you know, they had the, um, you know, the mindsets of, well, whatever you're doing today, just keep doing what you're doing. Which in a way I learned to say that that makes a lot of sense sometimes in their acquisitions, like buy it and hold on a second.

You just keep doing what you're doing. Don't mess with what's already working.

Yeah, let's not— we'll figure this because that's one way to do it is buy it and live with it, uh, and then just send up your reports and, you know, we'll figure out reporting, we'll make some kind of connection, uh, and then you look at the other side when you look at— and I use this and this may not be 100% accurate, but it, it's close enough— Bank of America goes by TD Bank. I don't care if you just bought all new stuff, throw it out. I don't care if you just took it out of the box, throw it out because you're putting in our stuff, you know what I mean? Here it is, you know, they have— this is the acquisition plan. ripping everything out, we're putting all our stuff in, end of story, and we're going to teach you how to use it, sort of, you know.

Right.

So there's, there's two, you know, those are the two extremes that we've seen. And, um, you know, there's, there's, uh, pros and cons to both. But I think the most, you know, when you look at, uh, the ones that I look at, you know, post now that Compass left, the new business, the business I'm in now, the successful— there's, there's two or three that come to mind in the last 10 years that were just Absolutely successful, right? And it really came down to, um, I think, you know, I, I love to use the— I love analogies and I love history. So for me, it's, um, it's Art of War. Yeah, glorious warriors win first and then go to war, right? So true.

Yeah, clarity, plan, plan, right?

Clarity, clarity being clarity of objective, meaning— and this is all of them, I'm on the buyer, seller, or the, um, The seller side, I'm sorry. And they knew exactly what they wanted to do, what it was going to be, what they were looking for. You know, what they— you know, it wasn't just, hey, I'm going for the highest bidder. That kind of— it was like, this is what we're looking for. Um, so they had that objective. They had the parameters of what was go and no-go, meaning here's the line.

Yep.

On this side of the line, we're good. If we're on that side of the line, it's not happening. Um, and then they came down to the people. They had They understand, they understood who they really needed to have, you know, that was a must-have and how to keep them. They realized some of the people they may lose. They understand what the market was like, right? Meaning people market, you know, job market's been not good for business owners for the last, you know, millions of years. Now it's a little different right now, but still. So they had that all kind of laid out. And then when they went out to message beyond the, you know, the, the, you know, the, the key people who they were going to tell initially, it was very confident messaging, right? Very confident. Here's what we're doing.

Yep.

This is what it's gonna be. This is what we see. You know, they, they, they always wanted, you know, expected their employees to stay. You know, that was part of the, you know, you can't guarantee that, but that's part of the plan. You know, they were— if it's strategic enough, everybody's staying, right? You know, so that's the ones I saw. And then it was measurable through the process. Here's what we're going to be, you know, when this happens. Transparency. These are the steps I'm going to tell you as we're going through the steps. And I seen 3 of those that were just great. Now, you know, post, you know, anything could happen. And I'm looking now, one of them is still absolutely right on, spot on, uh, you know, fantastic. The other one was private equity, which was, you know, that, you know, there's a lot of horror stories there, but still going pretty well. Um, and then—

But it gets down to what, I mean, what, what you're saying and what sort of we've been talking about is, again, it's planning, right? It's, it's, it's communicate— it's planning and communication, right? Like, if you treat this like a project And I hate to come back to this because we've talked about it recently, but yeah, what's the objective? Yeah, you know, plan it out. And it's like, it's like when you're at a corporate and you're in a corporate role and your boss gives you a project and she's like, okay, John, start this tomorrow. And you're like, well, I'll definitely start it tomorrow. You're probably not going to see me for a good 10 days while I plan.

Yeah.

But those 10 days are the, are the objectives we're creating, the communication I'm having with all the project teams, all the people I need to talk to so that the next 90 days or the next 60 days goes smoothly.

Yeah, yeah, it's— well, I mean, this is, this is, this is my life. This is our life here, what we're doing, you know, walking into organizations where they're, you know, they have a problem or they're doing something. I like to use ERP because it's big, right? ERP. Well, we went out and got demos and we liked it. And first thing I do is we throw the vendors out. And not, not nothing against the vendors, It's like, you know, uh, first of all, what do you know? And this goes even to, you know, when we start going into looking at what do I do for exit. Well, forget about tech and all, look at just lead to cash. I look at every organization lead to cash.

Yeah.

How does business come in? How's it processed?

How's it go?

It's first thing, right? So if we're talking ERP, I don't want to talk about what the great features are of NetSuite or Intacct or Dynamics or Business Central. I tell, you know, tell the vendors to sit off to the side and let's walk through this. And, you know, where, where are the holes in process and people and systems? Just so we know, because we're gonna steer the ship, you know. Otherwise the vendor's gonna— and I don't mean that, and, you know, the vendor doesn't want to do the shit.

You're exactly right. But the vendor wants you to make a decision, right? The vendor's there, they've— their process, right?

Yeah.

Do you want to follow their plan or do you want to—

yeah, yeah, yeah.

Because like their plan is Okay, get them in for a demo, get the right people on the call, have a follow-up conversation, and get them to sign the line that's dotted. It's like, wait a second, like, slow down the ship for a sec.

Yeah, it— yeah, and I don't— I will even say that, you know, I'd give vendors more credit, good ones more credit than that. But, but, but the point is, is that, yeah, from when you're looking at sales, it's like, let's get it signed and then we'll figure it out from there. But You know, it's a matter of maintaining control because going back to, uh, my first point on, on the, the successful, uh, exits— clarity and objectives and parameters. You have to know whether, whatever it is, you have to have your objective. Uh, you know, once again, Robert E. Lee, you could change your plan, but you can't change your objective. Of course, he did at Gettysburg, but that's, that's a perfect example. It's, you have to have what your objectives are to be very clear. And then plans, you know, plans change around it. Because like I said, when a vendor comes in or, or a buyer comes in, they may bring up something that's really a lot better than you were thinking.

That's it. It's about options, right? This is what we talk about. And, and it's options that are going to happen as you exit and options that come up before you even get to exit, right? The ability to be able to look at your business, examine it with this headspace, okay, that says, Okay, I'm doing this right now. This is where my revenue comes from. These are my customers. Here's my stuff. Here's my systems. Here's the things. Okay, things seem to be going pretty well. I'm making good money. I've got things. There are always things I can do to turn the screws and get things a little bit better.

Yeah.

But ultimately, I'm going there. So now what we're gonna do is to say, okay, but I want to sell the company. In order to do that, I've got to package the company up together, up like it's a product, right? And it's gonna have features and benefits. Right? It's also going to have drawbacks, okay? It's going to have things that— what we call marketable inefficiencies, things that are— that I didn't get to finish, things that I couldn't get to but I've got plans for, things that where I could hand you a plan thing and, you know, as part of this, uh, you know, transfer the company, and you could take this thing and grow it 30% in the first year, whatever those things are that help you demonstrate that stuff. Right. But the, but the, the ability to be able— and as you do that, the good news is you are creating a more healthy and sustainable company, even if you decide not to sell it.

Yep. Oh yeah.

So doing this work is about creating options for yourself. It's about creating options for yourself during the exit, throughout the earnout. It's about creating options for you to be even before you even decide that you're going to take an LOI.

Right, right. So yeah, yeah.

And I think that's what, what is, has been kind of missing for people is like, it's like, no, no, it's, it, this isn't about I want to sell my company tomorrow. And in fact, it's absolutely not about that, right?

No, there's no question about it.

It's about what can I do to, what can, what if, what, what, how can I control this and do it on my own terms in the best possible way for me for my family, for my clients, for my employees, right? Everybody. And frankly, the buyer too, because when these things are good deals that go together, uh, and that people are, are like you are pointing out, I, you know, you're at the other side of a couple of these things right now looking at how well they're still going from an integration standpoint. Yeah, that's what you want, right? Yeah, that's the win.

Yeah, absolutely, 100%. I, I think too, it's a lot, it's hard Because when you look at this, especially for, you know, somebody that hasn't gone through it, you know, and like anything else, and the reason we're in business is execution. It's easy to sit and think, it's hard to execute. Yeah.

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I mean, no, very few people are very few, you know, as good at execution. And I think that you kind of get wrapped up in, you know, where do I start? How do I start? You know, and, and the thing is, is that, um, you know, I think we, it's simple. Me, I, I'm a, I mean, I can, I can comp— I can make something so complex. And so, you know what I mean? Just from a standpoint, like, just my, you know, I had to, I had to be able to pull myself back in anything and uncomplicate it. Yes, I think so far ahead, and I'm not, you know, I'm not, you know, trying to be smarter than I am, but my point is, is I look so far down the road of all the things that could happen, it could drive you crazy. So you have to kind of figure out where to start, and, and I think that that's a big problem for a lot of people. Like, it's so, it's so daunting. Where do I begin with all this stuff?

Well, let's go there. Like, right, so let's say you get a call from a, from a referral from a client that worked with you, Joe? Like, how does that first meeting look like, right? They've signed the contract with you, they've engaged your services, and whatever you pitch them, how does— what does that first meeting look like with the founder that you're— that needs to prepare their business for sale? What are you going over? What are you covering?

So, you know, typically, if I'm, you know, honestly, if I'm brought in, it's typically brought in through a third-party You know, not that I'm still, still working with the, you know, with the founder. So I do have a, you know, I do have kind of an idea what's going on. But if I didn't, um, it's really kind of understanding the culture of the company and, you know, the, the, you know, just it's listening, like always listening what's going on. Um, but the, the thing I would sit there and say is that, um, more than anything else, it's always— I'm just going to go back to lead to cash because I look at everything lead to cash, you You know, and then HR is kind of its own thing too. But try to understand what's going on in business lead to cash and just look at it almost like an ERP project, right? Well, we're touching everything. Everything's touching here. So now we need to understand how your business operates. But I think from a standpoint is really looking, you know, because a lot of times it's always, you know, I want to say emergency because I'll be honest with you, a lot of the engagements we're going in were interim, meaning the CIO or the head IT person was like, I'm out of here.

Right.

Maybe they weren't vested, maybe something went wrong. So now we're, we're keeping the ship floating and we're also getting ready for due diligence. So it's a little bit different, but, um, it's the, the advice is the same, uh, complexity and, um, impact evaluation. So when you look at all the processes, what's, what's the highest impact evaluation? Well, anything the founder is tied to, right? So if they're the rainmaker, which hasn't— I don't want to say it has anything to do with IT, it doesn't, but if they're If they're the rainmaker and they're, you know, they're the founder, that's a problem. If it's a tech platform and they're the lead developer or architect, that's a problem. So I always start to look at, you know, where I would start for if everything else is even, it's lead to cash. Let's go down the line, you know, let's just see people, process, systems, right? It's as simple as that.

Yeah.

Here's a function, it's AP, who's doing it? What systems are they using? Is it manual? Whatever, lay it out. If there's emergencies, then it's impact evaluation and complexity, right? So an architect of a tech platform, that's complex.

Right. And right to your point, it's like, it's like in a sales— it's in a consulting company. If the founder is making all the sales, that's a problem. If the founder's built the whole platform, that's a problem.

That's a problem. Yeah. So you have to— you got to look at those things first. But all else is just going right down the line of, you know, let's look at how you're, you know, from a tech standpoint, your lead to cash of systems, people, processes.

And you're really, you know, as you said before, it's like you're meeting with the people, you're documenting the process, making sure you understand everything. And you're also, you have to be comfortable with certain things, right? Like you realize that there will be breakage, right? And by breakage, I mean, What's the— what's gonna happen, um, if we lose this person? Is it gonna be catastrophic? And if it's gonna be catastrophic, you probably wanna tie that person up. If you lose this person, you can deal, well, you know, you can deal.

So here's a great— here's a great story about that that I just literally just heard a few minutes ago, and I don't think you'll mind me telling it. So, uh, another, another part— advisory partner of ours was talking to— was talking about how he was working with, uh, with a couple of founders who exited And the story that they told was they had this one— there was an IT company, they had one engineer, and again, key people were part of the deal, and this guy staying was a major part of the deal. Okay, and so what they said was, you— when we do the integration, all these people are gonna have to come to this office, right? So the— this head engineer, this guy that was a critical piece of making this whole thing happen, was like, Yeah, I don't want to go to that office. And they were like, you know, but you had— what we have— you have to go to the office because that's the thing. He's like, I, I don't want to go to the office.

I got to go over the bridge.

I got to go— I got to go over the bridge. I got to go through the tunnel. I got to take the train. I don't want to do that.

I don't— yeah, I don't have a car. It's 50— it's 15 more minutes out of my way, I think, whatever. I'm not gonna do that.

Yep.

So the 2 founders who are obviously dying to have this exit happen Right? You go to this guy and they're like, look, we'll buy you a car.

Okay, reasonable. Like, right?

It gets better. They buy them a car, he gets the car, the deal goes through, the whole thing, right? Years later, they're telling the story, right? And the one, one partner goes to the other, oh, I— by the way, I didn't even know if I told you this— I had to spend 3 weeks teaching him how to drive.

Yeah. Yeah, yeah. So that's—

but this is the— this is what you will need to go through, okay, in order to get that one key person to stay. And they got off relatively easy because, yeah, yeah, no, I'm not going there and there's nothing you can make me, right? And, and that entire deal rested on that one guy.

Wow. Yeah, that's so uncommon.

Well, with regard to, um, like due diligence, Joe, like, so When you're preparing and helping to prepare a company for sale and documenting the IT systems, like when you go through due diligence, like how, what are you preparing for a company if the primary product is a tech product, right? It's an IT services company or they have IT services or products. What are you doing and what are you providing? Like before you even know about due diligence based on your experience, what are you getting ready? So that like it makes that process sort of go smoothly.

Wow.

So I mean, I'll just be completely transparent and honest. Is it real? Meaning if it's a platform, because a lot of times, you know, what you see on the outside is not what's happening on the inside.

So true.

Right? So if it's, uh, you know, is it multi-tenant? You know, like, you know, you know what I mean? Like, like, what is it? How is this thing built? And, and, you know, Is it smoke and mirrors?

I mean, that from a tech platform, you know, from a tech standpoint, is it smoke and mirrors, right?

Is it? Yeah, yeah.

Nice interface on something in the background that doesn't really.

That's and it's not uncommon, right? You know what I mean? So that's the first thing because it's you know and their due diligence is gonna unless the buyer is not you know just doing doing their well he would hope. But yeah, so that from that aspect, um, I think that even, even preparing like valuation, uh, we're, we're in a client now, um, and I'm trying to be careful here, that will probably at some point move. And they're in the space, they have a tech platform, um, and we kind of said SOC 2 would be, would be good.

And just explain, explain that, what, what that, what SOC 2 means for every—

So SOC 2 is the, you know, everybody look— a lot too many people look at SOC 2 compliant. It's a compliance platform, you know, it's a compliance guideline. And so many people look at it as a tech thing, and it's an accounting thing. It's really what it is. So it's not just tech, but it's, you know, through process. And the thing is, they're in a, just say, a regulated industry.

Sure.

Right? So we're like, look, you know, they have a platform, it's gonna, it's the, It's not proprietary by any means, but what they're doing with it is pretty unique.

Yep.

So it's critical. So we're saying, you know, let's, you know, we've been kind of sitting almost as the fractional compliance officers. Let's say that we're not even the CIO, or they have a CTO, but the CTO is very focused in the platform, you know, so they need help more on the business side than, you know, in coordination with the platform itself.

Sure.

And we're sitting in between and helping them With compliance and SOC 2. So that's important. So if you know, when somebody walks in the door and said, here's SOC 2, you know, they're still going to do their due diligence.

But it's a stamp, right? It's like, okay, at least they've gotten the SOC 2 standard— not the standard, but someone has said that they're SOC 2 compliant.

I should say they're audited. Yeah, they had to be audited, right?

They've got the backup that says this has been done and whatever. And again, that's a high enough level thing to be on the right to be—

It is, but, you know, then you're— you know, I've seen companies that it's checkbox, you know what I mean?

Because then you go—

however, it's still— if you went through that and spent all that time and all that money, because it's not cheap, there's, there's something behind it, right?

Yeah, again, it's like the Van Halen— I hate to go back to the Van Halen story, but it's like the Van Halen contract story, right? If they've bothered to separate the M&Ms and only the brown orange are in the bowl Then they've read the whole contract, right? And if they've bothered to get the SOC 2 compliance, because I went through this with vendors when I was switching vendors back in the day, and it's like, okay, well, send me your SOC 2 compliance. And the ones that had the certification or whatever it was sent me them right away. So I had like—

Right, you had it. Yep.

Like 4 of 6 vendors, I think. And the other 2 had emails back to me like, well, John, they're in the process. They had really long, well-written excuses as to why they didn't have it.

One.

And then 2, when they were gonna get it. And guess what happened? Yeah, I went from 6 vendors to 4. Well, of course, very quickly.

Yeah, you know, yeah, it's— and, and here's the thing, I'll be honest with you, some of those vendors that don't have it may have been great, you know what I mean? But the thing is, is that, you know, when you're, when you're looking at this stuff, and especially if you're gonna go out to, to for acquisition or, you know, sale or something, it's like you gotta, you gotta dot the i's and cross the t's, and you can't be screwing around. So, you know, that when you're going back to the point, as you're going to look, these are the things you start to look for to understand, you know, from a tech platform. But even if it isn't a tech platform, you know, when I look at like manufacturing or things like that with the work in progress, right?

No one ever knows.

No one. I've seen, and this is not something I worked on, this is through Uh, partners, sure, partner companies, you know, where the company acquired another service company, and then when, you know, they went through everything, it's like the work in progress is completely a lie. It wasn't real, and it was based on a lot of money, you know what I mean? Now actually there's triggers for that, but the point is, um, you know, if you're doing— if you're on the due diligence side of the acquisition, the buyer, you're going to be very, very careful if you're smart on things that, like, that are— you verify that are real, right? It's a work in progress. Really? It's a work in progress? Okay, show me the contracts. Show me where you're at. You know what I mean? Uh, you know, so understanding and having that—

Sure.

Being able to show that, it helps valuation. Because if you can't, then, you know, even if it's real and you can't show that it's real, Um, you know, then it's not real, right?

If, if—

Well, then you're gonna be— then you're gonna be bogging things down, and then all of a sudden timeline delay. Then the buyer's like, uh, you know, these guys, you know, you know what I mean? Like, yeah.

And if they have— especially when they have other options. And I think that that's where, again, keep in mind that, you know, very few people are in a vacuum, okay? I mean, there are a couple of times we've seen it, right, John? A couple of times where someone just needs to buy somebody one specific company and that's the only solution there is.

But that's the exception that proves the rule, right, Joe? I mean, yeah, yeah, yeah.

Yeah, yeah, yeah. And I've seen them that they're gonna buy it no matter what.

Yeah, yeah.

Like, bad deal, doesn't matter. It's like maybe somebody— and it's, it's a real, a real story of, uh, a, uh, trust fund person, right, that was just buying something that wasn't worth the paper it was printed on. But they're gonna do it and they're gonna integrate it and they're gonna— you know what I mean? And you're like Right. That's, that's a deal, you know what I mean?

And that's the kind of stuff that we talk about, how, right, where you— where, where luck is not a strategy, right? So, so this is not the kind of thing, right? So what we're preaching here, right, is just the fact that it's a matter of just, you know, you need to have a plan here and you need to be able to start by knowing yourself, right?

Know thyself, Socrates. There you go. There's analogy for you.

Exactly.

What— and I'm talking about the founder knowing themselves.

Yeah, 100%.

And knowing the company.

Yeah.

What, what is the company really? And what is it objectively outside of here? What do the— what does the outside thing see? And that is something that you cannot see for yourself.

Nope. Everybody thinks their company's worth a billion dollars, right? You know what I mean? You have to understand what industry you're in, what the multiples look like, you know what I mean?

And also like what the processes look like, right? Like, so like what process was designed internally and works for the crazy people that you have at your company. And I say crazy in quotes, but like the people you have your company— it's so funny when you go through a, a, a due diligence, and I've gone through due diligence with some people, and I'm like, and I got the process documents, they were perfectly documented. It was a perfectly documented crazy process, right? So we had all the document, they had all the documentation. I understood all the documentation. It was clearly written. It was clearly laid out. Yeah, but my goodness, the way that they did it, it's, you know, it's like, uh, it's like going to California via Mongolia, and you're like, what, what are we, what are we doing here, folks?

Yeah, so when I look at— when I talk to— and knowing know thyself is a perfect example. Matter of fact, I gotta look at this, so just give me a second because I don't want to get this wrong.

Yeah.

I'm sitting with a CFO roundtable tomorrow, and they asked me to do a presentation on, you know, why things kind of go off the rails and, you know, why things are always disparate systems. I can't get information out. And, you know, knowing myself and looking at an organization, when I look at when things are misaligned between business and tech, it's one of 3 reasons almost always. Not always, but almost always. One, uh, it's down in the weeds where they have this great technical person or people who get everything done, but it's not strategic. It's just, you know, it's MASH 4077. Pack them up, get them out. You know what I mean? There's no, you know, then you have the middle one where they're not spending— tech is just about the cost. So it's short-term gain, long-term pain. Right? They— it's like whatever the cheapest thing is. And then you have the third one, which is just what, you know, you, John, you brought this to mind. They're over-tech. They're so complicated and they're putting in systems that no one's using and they're so complex. So typically when you see misalignment, those are the 3 things that when I'm walking in the door, I'm looking at those 3 things. How is, how is IT being used?

Yeah.

And it's always, always one of those 3 things.

And number 2 is a real problem, right? Because we— I've experienced this too, is when you buy a company that it's literally a cost, an expense on their— that they view IT as no value add, then you're buying— what you're essentially buying is you're buying a lot of technical debt and you're gonna have to fix that. Like, someone's gotta fix it. Either the buyer has to fix it after it closes or the seller has to fix it before. It's like when you buy a house, right?

Yeah.

Do you want them fixing the drains? Yeah, maybe, maybe, or however it goes. So, um, that— I've experienced that where it's a real problem where you have outstanding tickets. We had— I mean, there was some— I think it was—

was it 1,000?

Maybe it wasn't 1,000, but there was something like 800 tickets in a system that were needed for enhancements that, that the buyer had to, had to fix. And it's like, users are going crazy and it's just a nightmare.

Valuation down. No, it's, you know, it's very common. And I think that the hardest thing is for the seller to really look, the founder or founders to look and say, well, really, you know, this is where we're at. This is what it is and this is what it isn't. And, you know, it's very, very difficult. Uh, when you, when you have your baby, I'd say my baby's ugly.

Yeah, right, exactly. I don't want it. Nobody wants the baby to be ugly.

Nobody wants my baby, or, you know, you know.

But when you, when you, when you meet people at that stage, okay, and, and, and where they are kind of like that, what, what is the, what is the best way that you found to be able to get people to kind of start to, to like, to, to step— maybe you can't.

Yeah, maybe you can't, but put aside that if I can't. Yeah.

Yeah. Right. The idea is to try— can you, you know, how do you get people to reflect that way? How do you get people to step back and go, okay, I see.

Yeah.

I need to examine this for real.

So, um, I think, you know, um, you know, this is like, I always say, any kind of engagement, it's always like, you know, the CIA being inserted into a village. You know what I mean? You got to go in there, you got to dig a couple wells, you got to patch up a couple goats, you know what I mean? You got to see what's going on. So you got to kind of empathize with who you're working with. But I think that showing them, like, I don't want to say industry standard because industry standards wasn't, you know, always accurate. But I think comparatively, comparison, say, hey, look, this is, this is where we're at. This is industry standard, you know what I mean? Like kind of giving comparisons. And this is what valuation does for, you know, uh, you know, uh, when you're not at a certain level. So I think that if taking the fact that they're lit, they'll at least listen. Objectivity, taking subjectivity out of everything, that's the problem. Everything's so subjective. The whole idea is to make things as most objective as possible. So that, I think that is a message, you know, or mission. I don't say mission number one, but it's a top priority is that whatever we're doing, we're making it as objective as possible. This is automated. This is completely manual. This isn't the, you know what I mean? And like, hey, you know, going back to prioritizing and all that complexity, there's certain things you're going to be like, hey, we can, we can make this look a lot better. Sometimes little things make big You know what I mean? Big improvements. So you sit there and, you know, you figure all that stuff out. But I think getting, getting to objectivity and being able to compare things and show them where in their industry, or, you know—

And not being in sales mode, right? The way, the way I interpret what you're saying is they're not, they're not in sales mode in due diligence. Excuse me, they're in explanation mode, right? They're in honesty They're giving objective responses. They're answering the questions honestly. And I find, like, when I've counseled people about this, it's like, look, if this thing is manual, if this thing is automated, say so. Because it's like Jo said, some of those things are— they're AI experts. The company that's buying you—

They don't care.

Has automated everything, right? They just want to know what the work is ahead of them so they can either alter the valuation down, right? Because nope. They never alter— in all of my experience, they've never altered the valuation up during due diligence. Maybe it'll happen. Maybe I'll get my hair back. You never know.

Yeah.

But those things just don't happen. But if you're honest, then they can plan honestly what they need to do post-integration and what they're going to pay for the company. Yes, it might impact you materially that you might not get that money, but it'll also set expectations along the way of, A, what we're buying, and B, What do we need to do to make this real?

But I'll take it one step further, right? Which is to say, okay, if I learn this stuff before I've got a buyer sitting there, okay, I have the chance to affect it. I can change it. I can make it— I can automate it so it isn't that way. Because will that make a big difference? Yes, that will make a huge difference in the eyes of the buyer if that one thing was automated.

Tell me the— tell me the truth. You've done the sales portion, right? You've done— you've sold the company, or you're in the process of selling the company. Tell me the truth so we can get— we can alter things, right? Like, yeah, maybe spend down those tickets, maybe make the enhancement you have.

Yeah, no, they're gonna find— I mean, it's like taking your car and, you know, trading your car. If the oil pan's leaking, you don't say, they're gonna know it. And they may not care, like, yeah, well, just— it's a gasket, it'll be— I'll fix that in an hour. You know what I mean?

But, but, you know, we're trying to hide it.

It's not going to help. Trying to hide it is— you can't hide it, you know? So I agree. And that's it. And it also goes back to the very beginning, which the first thing we talked about is clarity of objective. If you know who you're selling or trying to sell to, you're probably going to understand what they're buying it for. And you will have some understanding of prioritizing, you know, hey, look, AP, you know, paper invoices is going to be a problem for these guys, or it's not going to be a problem.

Right.

You know what I mean? You're gonna know that because they forget it. They got a whole AP system. They're not— it's not gonna be— I'm not wasting any time on this. I'm just gonna tell them we're paper invoices, you know?

So, Joe, I would argue too that, right, is that it's the looking at that stuff before the— before there's ever an LOI in existence.

Oh no, no. I am— you know, that's what I'm saying is that 100%. So I don't want to say, right, you know, you're— you with your objectivity or your object your objective is you kind of know who you're looking for in the buyer. Doesn't mean that that's what it's going to be, but you at least have some idea. So, you know, naturally, if you, if you're thinking that far ahead, which very few people are, I think, you know, that's why you're— that's why you have the Exit Engine, right? Um, if you are, you'll have all that stuff tied up before you're ready to go.

You know what I mean?

But if you're not, then, you know, then it's— then you have to be a little bit more selective on On going back to prioritization of impact at the valuation and complexity.

And I think that's the key thing to know is that you are, if the, when you get to a point at which there's a buyer there, even if you're able to adjust something at that point, and again, what are you going to adjust? You're going to suddenly go, okay, we'll wait and put this on hold until we automate this thing. Yeah. Right. Maybe, maybe not. But the reality is, again, all that's going to do probably result in a decrease in valuation, right? So that, fine, the buyer will take that on, thank you very much, but I'm going to decrease what I'm paying you, right, in order to do that. The ability to be able to think about those things and what those things might be in a way in which, look, if it's a strategic buyer that comes along, Then we want to look like this. If it's a PE firm that's going to come along, we want to look like this. And by the way, I've got those— both those versions.

Yeah, that's right.

Because I can show which— who is it? Oh, they get this one because this one talks about X, Y, and Z, whatever. And when I talk about sales mode, or John talks about like being in sales mode, to me that, that is the job of the broker or whoever, or whoever is actually selling the company. Right now you're at a point where you're like, you're going to go out and talk about this in a certain way to a certain audience. You're going to go out to another audience and potentially talk about it in this way.

Yeah. Right?

But you can't do any of that until you've figured out what those ways are. And you can't do that until you've gone through these, until you've looked at yourself as objectively as possible. And this is what I'm good at. This is what we're not. It's okay that we're not. We can get better at this piece of this in the next 2 years. Yeah, that's great, whatever. We can—

yeah, people.

But, but the idea is that, again, it's a matter of— it's, it's the more that you can do ahead of time.

100%.

When you, when you're, when you are in, in situations where, where it again is a not immediate exit, right? Meaning that you're brought in to examine the IT, you know, the tech stack, whatever that is, to be able to say, okay, this is This is, uh, and then you are leading people to the point where it's like, look, here's what you have, right? Do— are you ever in a situation where you are uncovering the notion that maybe this is actually someone who could actually sell and exit?

Um, what do you mean by that? As far as meaning that when, you know, their intention is to, and when, yeah, maybe they can't? Is that what you mean?

Exactly.

Yeah. Um, I don't think I've— I haven't personally, we haven't personally been in a situation like that where they can't.

Right.

It's just a matter of what we just talked about, what degree and what the, you know—

And what work needs to get done so they can get there.

Yeah. You know what I mean? And then, you know, prioritization, definitely. But this is more priority. This is way more important. You know, the ones that even had the clear vision had, you know, like you said, there's nothing's perfect. You're not gonna have everything.

Right.

So, the idea is what's the most important? Well, we know we're targeting, you know, for buyers, this is what we're looking for. These, you know, here's the objectives, here's our goals, here's our red line.

Yeah.

You know, what do we got to prepare for so we're on this side of the red line as much as we can?

Right.

And I think, you know, that more than anything else. It's never 100% that, you know, you get everything.

No, absolutely right. Exactly. And of course, the key, the key to what, to any of this is to be able to, again, to, to be able to take that kind of control, to be able to get as close to everything as you can. Right. And, and it also starts out with knowing what everything is. Yeah. So one of the things that we counsel people on too, right, I'm sure that you do, is like, what, what do you want in part in the deal? What are the terms that you want to have that matter to you? Money is only one of them, right?

Of course. Yeah, it, uh, you know, and it depends. Um, you know, I've seen, uh, I've seen a, you know, pure, pure money— I want to say pure money play, but, you know, money was the most important thing. Or, or, well, money's always important. I think it's almost always, um, what's going to happen with the staff Yep. You know, because anybody that's, you know, most especially founders at the ground up, no one does this without people. Um, and you want, you know, you're— you want to make sure that your people are okay. That, that's a big one. Um, you know, and then I, I, it's kind of weird, but, um, I even in one of these I've seen, it was, it was a culture play. It's so weird, but The, the buyer purchased based on the culture of the seller, right?

Really?

Yeah. This is a matter of fact, it might even, you know, uh, get to get these guys over to you at some point here, um, as a story. But they're in the same industry. It's kind of a roll-up where, you know, it's almost like, you know, the garbage industry where— and it's not, you know, the garbage industry where it's like, you know, you have a garbage route and then, you know, they're just sucking up more Smaller garbage companies. They could buy any garbage company. Yeah, just gonna go out and look. But they like this one because, uh, the, the culture of the company is, you know, more outstanding and something they've never seen before, and they want to implement it in their company. So they— but they're going to buy it anyway because it fits their, their model.

So yeah.

They could have bought 3 other same type of companies, but they're going after this one now And they wanted— and, and the team that stood on, the entire team stood on really, uh, and the— but the executive, a lot of the executives stayed to help build the culture of the bigger company, which I thought was very unique. So this— Yeah, it is unique because that, that's one of the things, and it's working right now too.

So what's the exact opposite of like, you know, the Bank of America analogy used before? It's like, you know, Bank of America is buying Valley Bank or whatever else we have out in New Jersey. It's like, oh yeah, We're just— we're gonna, we're gonna change the signs and we're gonna implement the systems and we're gonna do this. It's like, yeah, no, they're just becoming an extension of Bank of America.

Just rolling up.

Yeah, yeah, yeah. No, I'm saying it was buying the culture.

Like, again, how do you measure that? Like, again, people become super important when you're buying, when you're, when you're trying to obtain the culture of a company that you're buying, right?

Oh yeah. And I want, you know, let's be realistic. It's like, it's not just because there's a fish tank and a pool table or anything like that, you know, because that's right, right. Culture is about, in the end, is that, you know, everybody's rowing the same way. But even more so that I think the bigger thing was, is that in this case, it was, um, you can clearly see the, the profitability tied to the culture of the company.

Got it.

It was clear and visible, like what they were doing transitioned into, and they were doing the same business as the bigger company. So it's like, well, if there's this small, you know, not that they were small, but they were smaller. And they're getting way more production.

What we do, right?

You know what I mean? What are they doing? I wanna, you know, I wanna, I wanna know.

Yeah.

Yeah.

Yeah. That was really, that was unique.

The, uh, the, the, the culture thing is a very interesting one because, you know, when I went through the sale of my digital marketing company, it was very much about, we were told it was very much about that, that this company that was buying us, which was another, again, another larger communications company. You know, wanted to be us. They wanted the way that we did it, the way that we hung out, the way that we did, you know, they called it the culture. And what we found to be true was that it was what was an impossibility.

Well, but also, Joe, impossibility, but also what happened on that Sunday after, uh, the acquisition?

Yeah, right. Oh, right. When I had to start it suddenly, I was told to get on a plane and go to Utah or whatever to go on a client for the next 4 days because my job was now to do that as a senior managing director. Even though I was like, wait a second, what are you talking about?

Right?

So that not only did they not accept our culture, in fact, they started to railroad us with their culture right away, even though they said that was— Yeah, I mean, you know, I think the more, more common actual—

Way more common. 100%. There's no doubt about it. Yeah. And, you know, that's why you look and say most, most acquisitions fail. You know, they, a lot of them, you know, Don't work out very well. It's, you know, cold—

They don't work out. Yeah, I mean, that's the— understand that the workout is a relative term. That is something that's way in the future, right? Because once you get past not only the original close, but then the earnout and all that stuff, the integration and the success, therefore, the thing— and we talked early on about some of the famous failures of mergers in the world. Right. At the large level.

Yeah.

You know, so I mean, at the smaller level, it's even more prevalent.

Oh, absolutely. I do. You know, I look at, you know, the service industry and you look at the years ago, the roll-ups of like gas companies buying HVAC companies.

Right.

Right. And, you know, and I remember, you know, I remember one in particular just watching it where, you know, they bought up all these mechanical services companies that do, you know, HVAC services, resident. And then, you know, years later they sold, you know, they made, they made tons of money on the sale. And then years later the, uh, the founders bought it back for a fraction of the price, you know, and they're back in business again doing what they did before, you know.

It's just—

Take 2.

Look at— I mean, different service, but look at Barstool Sports, right? Barstool Sports was, was sold to Penn Gaming, and then Penn Gaming sold it back to the founder for a buck.

Yeah.

And yeah, there's all sorts of other contingencies, but like, my gosh, like, so they, so they could do a bigger partnership. So it's, it's funny how companies, it makes total sense in February for them to buy this company, and then by October when things have changed, it's like, oh my gosh, I gotta, I have to divest myself of this. Yeah, right.

Yeah, it's, you know what it is, it's like thinking, you know, when you're talking, you know, private equity or big money, it's like on, on a board, and, you know, and, and those guys, you know, they know it's almost like an angel investor, you know. 7 out of the 10 aren't going to make it, but I'm going to invest because those 3 are going to make my money. You know, it's kind of the same thing, but, um, you know, it's on a board, it looks good, but when you get down to it, like, even, you know, I look at the IT, the IT world when, you know, the roll-ups of the MSPs have been going on, and it's a little slower now, but, um, but talk a little bit about that, Joe.

It's like the— so after the acquisition, right? So you're, you're either You've been part of this issue, you've been part of the— either you've been part of the thing from the beginning, the whole process, or you come in afterwards to fix things. Like, what are the things that you're fixing in those situations? You're either fixing or making sure that goes smoothly for—

Yeah, so yeah, there's 2 areas. It's going to be tech stack or organization. So a lot of them, you know, we're doing also is, you know, looking at the IT organization. Right? So whether we're in them or fractional. So typically if you're fractional, it's because they're, they're, they don't have enough strategic or, or specific type of, you know, experience or whatever, um, or someone left. So that organization, and then you're kind of looking at what the organization needs, and it's almost always, especially if it's not a tech organization, but even tech organizations, but especially if it's not, you know, when you go into a an executive room, a room with executives, and or even HR and CFO and all that stuff, and they're figuring out we got to get the best IT guy or girl in the world to do— you know what I mean? Like, they never ever write the job descriptions, you know.

Right.

We did this, you know, in the previous, uh, the previous business of, uh, with the MSP, and we would do like temporary people and help them staff people around the country. And they always gave me this job rec. What do you think of this job rec? And I'm like, who's this for? It's for the guy in, uh, in Los Angeles. And I'm like, that's not what they do in Los Angeles. You know, when we were doing the MSP work, they don't— no, that's not what you need. I'll get somebody, I'll put them there, you know, let me bring them in, guarantee me for 6 months, and then you can have them. Okay. We ended up, you know, staffing 10, 15 people at a time and then just turn, you know, just, you know, and not, you know, not crazy. It wasn't 40, 50% kind of headhunter stuff. Because we had a great contract with them. But the point is, going out now, you're looking at almost always they're not hiring the right type of people or laying it out based on, you know, that. So that's one. I'm sorry.

Go, go, go. Continue. Sorry.

Yeah, that's the organizational stuff.

Yep.

Tech stack is, you know, once again, it's, you know, understanding first, understanding what's going on, and then It's typically handoff issues, right? So what I mean handoff issues is one department, one function to another. Something's coming over the wall. It's supposed to look like this. I'm supposed to get an apple, but I'm getting an avocado. So I gotta turn this avocado and make it an apple. Or maybe it's better to say I'm expecting guacamole, but I'm just getting an avocado, right? Yeah.

Good point.

Yeah. So that, that's probably a better way to look at it. So it's like, okay, you know, then they're like, well, it should be this, it should be that. And it's sometimes manual processes are okay, you know what I mean? It's like, first of all, let's fix the problem. And like, I just had one where the perfect example, good segue. So I'm in it, and this is not a merger acquisition, but it's a tech problem where we're ready to go out the ERP. Or I shouldn't say that we're ready, we're coming in for an ERP project. And it's a big field cert. They have a big field service segment, you know, techs going out and they're having a problem. And the problem is, is that it's, it's old technology that has to be replaced and it's end of life. And the signature that they're getting at the end of a work order isn't matching to the work order. It's not working. Right? So they wanna go out and buy a new field service platform. Then the ERP is coming. So I'm like, you know, the, the company they brought in on the demo says, oh no, you can integrate with the ERP, don't worry about it. And then I came in the door and I threw those guys out and I said, hold on a second, what's the problem? So they go back into the small IT department they had and I says, can we create something that gets a signature there even though it doesn't match a work order? And then on the back end, we'll match the work order with the signature. So we went out to the Philippines, I got somebody for $700 a month to just sit at the end of the day for 4 hours a day and match the signature and go, now let's go to ERP, right? So it's okay, you know, let's fix the problem first and then look at the—

Identify the problem, right? Because you identify them.

Yeah, you know what I mean? They all want to go on and fix it, they spend more money, or, you know, it's like— and a lot of times the problems aren't even that complex, they're just people problems. Actually, everything's a people problem. I'll be honest.

Well, it's so funny. We had a similar type of problem where a file, like one system wasn't talking to the other system. So everyone that was being removed, like being removed, like they left the firm or they left the real estate brokerage, was being reactivated at, like, was being deactivated at 11 o'clock at night and was being reactivated at 5 AM in the morning. And so like we, and it was a problem that had been persistent for years, for literally years. And we did exactly what you said. We sat down and said, what exactly is the problem? Like, oh, well, no one's taking the file that's emailed to this email address that no one looks at and emailing it to this other email address to fix things. And it's like, okay, well, let's change the time of these things. And you would have thought that— and I don't want to say I came up with the solution, but I didn't because I didn't. But like a colleague of mine did. It was like, well, that really worked. Like, it was such a simple—

Of course it did.

solution. And she identified it. And, you know, shout out to Josephine right now. But like, she did that. And it was like, everything changed after that. Everything. The team started talking better once someone identified the solution and people were proactively helping so that no one would get these phone calls anymore being like, hey, this person left the firm. It was amazing.

Yeah. So this is even for merger acquisition. But it also goes in for anything. So when we talked about— when I talk about lead to cash, one of the things you're also doing is bringing all the people. Because I'll tell you right now, especially in not even big, big companies, but you shockingly surprised that the sales department has no idea what the finance department does.

Right.

So when the sales department is not putting in the, the ship-to, bill-to, uh, contact address, which could be 3 different places Yes. And now it's over and it's like, and every week, you know, and, and it's just simple stuff. So a lot of times as we're doing these projects or whatever it is, it's, it's making sure once we have that and whatever this is, everybody understands what everybody does at a high level and where the problems are. Because I— more, more than not, people don't want to be sticks in the mud and they want to be helpful almost always. And if they're not, that's These are good exercises to find out the people that are a problem, right? This, this is what, you know, this goes in whether it's you're doing, you know, I'll use ERP like I said because it's massive, or buy-sell, you know what I mean? You, you start to see who the sticks in the mud are by laying the whole thing out and saying, yep, is this what we do? Is this how— is this basically what we do? Always at a high level first, right? You don't have to get crazy. And that's going back to where do you start? High level, right? Lead to cash. Here's AP. There's 2 people in it, they do these 3 things, these 2 things are manual, and here's why it's manual. It's like, oh well, I could, you know, if I do this, that won't be manual anymore.

Exactly.

So that, that's always critical, um, and, and in the fact that for the founders to really understand what they're— almost always, especially the bigger companies, and when I say bigger, it doesn't even have to— I'm not talking $500 or billion dollar companies, it could be a $50 million, a $50 million company, I guarantee the founder doesn't know what's going on.

Yes.

And if they do, then their valuation is going to be really low because they're, they're doing everything too close to it. But I, if I had a dollar, which I almost do, for every time a founder told me they know exactly what's happening when I go to start the due diligence, bro, I know what goes on now. They know that, they know the business, they know the industry, But every time you go down, it's almost like that game in school. It's like, I go to the COO or the vice president of operations and like, well, the CEO says it's this, and before you get this report, he pushes a button, he gets a report. Yeah.

Yeah, there's a couple— there's a thing that report starts at like— this exact thing happened. That report starts at 6 o'clock the previous night. And like the CEO, the look— and I was in the room when the CEO did this and he's like, what? He's like, I thought that was all done in the morning. And we're like, we'll get it done in the morning. But like, we brought in all these automation things so that he could start it in the morning. But like, he had no idea that— no idea that it was a 12-hour process of running all these things. And he couldn't generate the report that he wanted. It needed 12 hours to run because it had to pull different— 19 different things. But the look on his face was, oh, I just thought that was run at 7:30 in the morning. Like, oh, no, no, no, no.

Well, it even gets worse than that because as you go down the line, it's Especially in this situation, everybody that went down the line all the way down to the shipping dock had, oh, but except for this. So now it was 14 exceptions.

Yes.

So now when they're like, yeah, now you're gonna go sell, it's like, well, guess what? This isn't what you think it is, you know? No, we got all this stuff. It's great. If you lose—

if, if you lose one of those people that's doing the exceptions, right, you lose the person who's formatting the Excel spreadsheet to send into whoever Bye.

See you later.

I know.

Oh, yeah. No.

My entire, entire, entire failure right there. Failure, failure point. Right?

Well, that's the other thing too, is that, you know, even when you talk, because, and, and, you know, I'm gonna ruin, ruin another podcast, but this is the same thing for AI. You know, was it MIT? 95% AI implementations are failing. They're failing, you know, not because I, AI, AI doesn't work. I mean, it still has its issues. It's because of process. You can't— all AI is going to do is speed up your problems, right? That's all.

It's only as good as what you feed it, right?

And so it's going to make a glaring thing that you have big problems, you know what I mean? So it's the same thing here for, you know, for sale, is that these— doing this exercise of looking at everything is going to show you where your problems are at.

Yes.

And it's almost a must. for, for— unfortunately, like I said, a lot of times when we come in, uh, to project work, it's already, oh, we already bought NetSuite, or it was like, oh, you know. And I'm not saying that that's bad, it's just like, you know, you don't know what the solution is yet, so how come you—

how can you fall for—

you know what the problem is? You identified the problem incorrectly and that was a solution. That's a problem, right?

Yeah, yeah, a lot of times, and most of the time that's what, you know, uh, but yeah, so that I think it's critical to get, you know, into the mindset as an owner or founder, especially if you want to get out of the, you know, if you're critical to a component, you've got to get a lay of the land. And the best way to do that is kind of just, you know, it doesn't have to be Six Sigma lean process. It just has to be something that, you know, they can relate to. However, it's a flowchart. If it's—

They can do it, right?

There's no sense in having either a system or a process that no one follows, right? If it— and if it's too complex and if people don't understand it, no one's going to follow it, and that's a terrible process. Make it simple. Get people involved. Get people's feedback on the process. Like, hey, if we do it this way or we change it this way, what's going to happen? I had a guy that worked for me that would tell me, and like vendors, and I tell— I talk to these people all the time still. It's like, hey man, You helped me make— you helped me miss a— or you helped me not make a huge problem, right? It's like, wow, that's a, that's a good vendor, a good employee, and will tell me when I'm wrong, right? If I'm wrong about something and I think it's going to be simple, tell me.

Yeah, yeah. No, it's, it's true. It's, um, uh, it's tough though, you know what I mean? It's tough because— yeah, and you also too, you see where it really gets Tough is when you have silos and there's always silos and 1 or 2 silos are really good. Like they have their stuff down.

Yep.

And 2 silos aren't, you know what I mean? So you're like, you know, it gets very frustrating and that's because at the top level, at the executive level, it's not the level set of we're gonna, you know, everybody's gotta be doing the same thing cuz this could be the best process in the world. And, but it may be too complex for everybody.

Yeah.

You know, or may not, you know what I mean? Uh, and they're just maybe a great process person. There's always a way. There's always somebody.

When it goes over the transom, right? Like, that's when I've noticed that, that the big ones have, like, when between finance and IT, I think of that. And I was nominally in charge of like the, the finance process. And frankly, we were the problem, right? IT was not the problem in this situation. It's like we were the problem giving them information.

Yeah, which is rare.

It's rare. Well, you know what, I, I probably—

because I was involved.

Well, I, I, you know, I'm, I'm very sensitive because I worked for, you know, I didn't work in corporate America, but I worked for corporate America.

Sure.

And, uh, the, the CIO position is, is difficult. It's, you know, it's difficult to get good people anywhere. I don't want to say that, but I just found that too often they were either just money-driven CIO, you know, and it just— I want to make sure this comes out right. They're going back to my 3 buckets of money-driven or the complexity side of things, right, where they were just, you know, it's almost like the tail wagged the dog in IT. And that's a leadership problem at the executive level. But it's especially in bigger companies that had big budgets, right? There were some things that were just, and, you know, incredible, but it's like, well, that's really great, but we're not using it. Or it's so, you know, it's so hard.

Or it's a project, as a project that had a lot of support for it for 5 minutes and then dies on the vine because other things become priorities and the thing stays there. And now we have this thing, but we don't use it.

The bill comes in. Yeah. You know what I mean? That's the most— when I look at Overtech, it's that it's like, do you go in there and you sit down and you're like, we're going to be able to do all this stuff and all that? And they, you know, they believe it, but they're not, they're not really integrated into the business part. Like, in other words, for this to work, the, the, I don't know, the chemical processors or the forklift driver or, you know, whatever it is has to do these things. And guess what they're doing right now? They're putting it on a grease board on, you know what I mean? They don't even have a computer right now.

Yeah, you know what I mean?

So that's okay if you're gonna sit there and say we're gonna do that, but this is, you know, we have to account for that.

Yeah, and the worst thing is when, what I've experienced, is when the business is not involved, and I use the business terms like, you know, non-IT, and then IT has to sort of like, in order to keep the project going, IT is like, okay, well, we have to fill this in. Right? Like the business isn't engaged or involved. So the IT is gonna be like, well, I think this is how it goes. And they do the process the way that IT would work. It's like the business doesn't work that way, right?

I'll tell you what, one of the biggest examples of that I saw was back in the MSP days and, you know, same client over in Europe. They're rolling out SAP. And, and prior to this point, all the, all the zones were on their own ERP systems and everything. And, and now they're rolling out a global ERP and SAP naturally was, was the one.

Yep.

Big SA. So anyway, they're in cutover and, and we're not, we're not out, you know, we're not, we are infrastructure network and all that stuff. So we're making sure everything's talking. Anyway, they wanna cutover for the United States and December 24th? No, no, that's another one. The days they do it, it's always like January 31st. Yeah, you know, um, the, the, uh, the warehouses can't ship anything. And, and they, you know, the warehouses where, you know, they're making product and they're moving it to third-party warehouses a lot of times to put it around the country so they can get it to places— can't ship a thing. Why not? Well, the warehouses aren't on SAP. Why aren't they? Well, in Europe they own their— they own the warehouses in Europe, but over here we do third-party warehouse. So they never even thought about how they were going to— so that was just when like the whole internet came out with VPNs and everything like that. Like VPN was just started. So, so we, we ended up putting in, uh, you know, broadband. They had broadband. We put in firewalls and did VPN site to site. But we, you know, in 2 weeks we fixed the problem. But the point is, is that it was a 4-year project and no one ever looked to see that how they did business in the US different than they do it around the rest of the world.

Well, Joe, it just goes to show you that, right, that, that, that one of the biggest themes that I'm getting out of this, you know, this, this conversation with you today is, is this, um, the execution, okay, is everything.

And it's so hard. And it's hard.

And it's It's so hard. It's so hard to get right. And, and, and you won't get it right. But, you know, let's just say it. Look, it will not, it will not end up the way that you hoped it would at the beginning. It almost never does, right?

Yep.

But, but I think that what, what you're also saying is that it takes a certain amount of outside help, outside knowledge, outside eyes, right? People that don't have the institutional bias. People that aren't caught up in your own process or the whatever happens in terms of the culture or whatever, or the, you know, the person, the scary person in IT I don't want to deal with or whatever that is, right?

Yeah, yeah, yeah.

And being able to overcome that stuff strategically by saying there are certain things that as the founder I need to do, I need to step back and I need to examine and I need to be able to uncover and know exactly everything that's going on and what my involvement level is. Right. So that I can adjust myself and, and how I'm involved in it.

Yeah.

And how I can adjust everybody else's involvement in it and, and really understand what's going on before, hopefully, I'm in a situation where I've got a private equity firm at the door.

Yeah. Yep. It's, it's tough, you know, and it's just, uh, I'm going back, I think, is if you can be as deliberate as possible And deliberate is the word I see to be successful. You know, you don't have to be perfect. And outside help, you know, naturally, because that's what we do. That's what I do. But every— even like lawyers, you know, you don't have the right lawyer, you're in trouble.

Yeah.

You don't have the right legal team, you're in big trouble.

That's true.

Well, Joe, we appreciate talking to you today, and thank you so much for being generous with your time.

Thank you.

What, what's the best way for people if they want to get in touch about engaging you for services and learning more about what you're doing? What's the best way for people to get in touch with you?

Yeah, so you just reach out to compassleft.com and go on there and you can find us on a form or joe.infante@compassleft.com or info@compassleft.com. That's— we will get to you somehow and I appreciate it. I really was It was a pleasure talking to you guys today. Thank you. And hopefully we'll have some more conversations in the future.

Thank you, Joe. Thanks so much. You know, it's a— IT is such a huge part of every company now, right? Every single company has some kind of tech stack on some level. You may not have a CTO, you may not have a CIO yet, right? But you're gonna have some kind of tech stack, some kind of off-the-shelf Whether it's just your website, right? Whether it's, you've got a CRM, you've got some kind of technology back there and whatever, right? That is guiding these things. And so when you are, and that will be a large part of what the ostensible buyer will be looking at when they're examining your company for sale. So being able to understand what that tech stack does, how it works, whether it's a good one or a bad one, Right? Relatively, whether you can affect change on it, all that stuff is all things that are— that as the founder of the company, you— it is imperative that you understand, especially as you approach it.

And also, it's not going to be, right? The chances that you buy a company that uses the same— all the same vendors as you is impossible, right? And you will need to do work. And whether that work occurs before or after, it's just— it's knowing.

That work, right?

You don't— no one likes surprises. And knowing that you need to consolidate things in the future, do add a couple of projects— look, the buyer's gonna have to put that into their model. It's going to affect valuation, but it's— you're not going to get sued, right?

Yeah, right.

Yeah, disclosing things and again keeping everyone on the same page with, hey, we're going to need to switch A, B, and C And B is the most important, C is the least important, and A should get done by the end of the year. Great. Like, okay, perfect.

That's it. Yeah, 100% on that one. Awesome.

Wonderful. Awesome. Joe Infante, thank you so much for being on the Exit Energy Podcast. Really appreciate it.

We're gonna—

there's gonna be more, uh, you guys are gonna see more from Joe, uh, around here hopefully, um, forward as well. And, uh, we really love having Joe in our network. Um, he's a great guy who can be really, really helpful in terms of you helping through, sort through all your IT issues. John, again, you know, I, I, I, I, the, this, this notion of being able to step back and allow yourself to examine what is really going on in your business. It's not just about what you're involved in. It's not just about, you know, what I loved about what Jo was talking about was The first thing we're all looking at, right, is lead to cash, right? The flow of, right, of getting a lead and making it turn into money, okay, becomes obviously the most important aspect of what happens. But so much of the time, the IT stuff is what enables that to happen.

Yeah, I'm sure.

And so being able to, again, understand the tech stack, understand what you need to do, how you need what, what a buyer is going to anticipate is going to be critical to your valuation and saleability, right? So this is the first of IT stuff that we'll talk about a lot more on this podcast. Uh, Joe Infante, again, thank you so much.

Yes, sir.

left.com, correct? That's Joe's website. Go check him out there. He's on LinkedIn, all over the place as well, uh, with us. Um, my name is Joe Stapleton. That's, uh, John Kniff. Uh, you can find us at jo@myexitengine.com or john@myexitengine.com. Look at us on YouTube. That's Exit Engine Community. At LinkedIn, we are all over the place. So come take a look. There's lots of information. And one thing that's very special right now is that we are asking people to go to myexitengine.com, give us your email address, okay? And what we're going to do is we're going to invite you to a very special opportunity about the this about this Exit Engine Community, okay? We're we are putting together a a community of people that are going to, uh, be founders together with advisory partners like Joe Infante and so many others that you hear on the podcast, uh, and, and, and other founders who have been through this, right, who understand what you need to look for, what you need to examine, and it can help guide you through the process of getting yourself setting an exit trajectory and raising your value and salability on your way to exit, right?

That's myexitengine.com.

If you go there right now, put your email address in there, we'll do that. And as John's about to say, we're not going to use it for anything else. We're just going to use it to tell you about this particular thing called the ExitEngine platform. All right, perfect. Use your email address, get there. Let's see this. Uh, Joe, thank you. Thanks so much, John. Another great one. Thank you so much, man.

We'll see you soon. Great.

Thank you, Joe, too.

Good. Thanks, guys.