In this episode of Building Texas Business, I sit down with Pete Mora, founder of Fajita Pete’s, to talk about his journey from running a full-service restaurant to building a scalable, off-premise food concept focused on delivery and catering.

Pete shares how starting small and keeping the menu focused allowed him to maintain quality and simplify operations. He explains that by limiting the menu and designing the kitchen accordingly, they were able to keep costs low while serving large groups efficiently. His approach helped transition from dine-in service to a streamlined catering and delivery model.

We also discuss the importance of hiring well and establishing effective systems. Pete admits he learned the hard way about managing people and the value of setting expectations early. As the company grew, building a culture based on respect, structure, and direct communication became essential to maintaining consistency across locations.

Finally, Pete reflects on what it takes to be an entrepreneur. He emphasizes being prepared for challenges, not romanticizing the journey, and staying committed to the long haul. His advice is to set small, achievable goals and surround yourself with people who complement your weaknesses. It's not about doing everything yourself, but about building a structure that supports the growth of your business and your team.

Show Notes

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About Fajita Pete's

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INTRO

Chris: All right, pete, welcome to Building Texas Business. Thanks for taking time to come on the show. I've been a big fan of your food for years, so really excited about this opportunity.

Pete: Well, thank you. I know you told me that the babies grew up eating some of it, so those are always my favorite stories when we get to see multi-generational type of business. We've done some kids from kinder through college now. That's how old we are, that's how long you've been around, I love that I hope my daughters listen.

Chris: They don't listen to all these. I think I know that to be true, but they're going to listen to this one. Hayden and Holland grew up on Fajita Pete's. For sure, Fajita Pete's, tell us what that is what you're known for, fajita Pete's.

Pete: We're a very small footprint restaurant. 98% of what we do is off-premise. That's our thing. It's either pickup delivery. Catering is a huge part of what we do. By catering, we specialize in corporate catering. Okay, so office lunches, like here at your firm, people call us up 30 people, 11, 30, 14th floor, 29, 25, richmond, you know and then we just show up. They, they like the ease of it. We do three types of deliveries. We do with the warmers, with the servers if you need them, or just drop off and get out of your way which is the most?

popular one, but we specialize in a very limited menu so that way we can feed the hundreds of people we do every morning on catering, and then at night we turn into a delivery company, kind of like a pizza company. You call us up, feed us for four. Boom, we show up at your door with the food.

Chris: And I can attest that you show up fast.

Pete: Yep, yeah, that's from those small menus, so we specialize. There's very few things I'm good at, so I try to do as little as possible so I can be good at those things.

Chris: Yeah, keep it simple, stupid, exactly, I love it. So I would think keeping the menu narrow like that helps you with controlling food costs and inventory and managing kind of the cost side of your business.

Pete: Yeah, business-wise it's good on a lot of levels. The fixed costs, like you said, the rent. So the menu decides your kitchen layout.

So, it decides your equipment package. It decides how many feet I mean you can get very granular with these things. It decides how many feet you need between the equipment, how you lay everything. Our menu specifically allows you to get high ticket items in the small area you know fajitas and group type of events. So we got a high ticket average for the restaurant industry and that's because our items are sold for families or for big groups like this. So it allows you to crank out a lot of food in a short amount of time and allows you to keep it fresh, and it's also a menu that transports well you can compartmentalize everything and it arrives the way you want it to it makes sense.

Chris: So let's go back to the beginning. What was the inspiration for you to start this in the first place? At the beginning.

Pete: Well, I waited tables to school. I went to. I'm from, naturally from columbia, south america, when we moved here. I grew up inief. I went through high school here, I went to U of H, got into the entrepreneurship program at U of H and that was a program that taught me how to really think about what I can do and scale. Having waited tables, I said well, restaurants really allow you to find out very quickly if you're going to make it or not. And my mom always told me we didn't bring you here to fill out applications, we brought you here to do something.

Chris: Wow, I love that yeah.

Pete: So with that mentality I was blessed enough to get out of the entrepreneurship program and run into the Meyer family. You know Meyer Land, meyer Park, sure, and we were able to get a very good deal on a restaurant that had been closed for a few years. Mr Meyer was very gracious, allowed me to go into his office. I learned a lot through that negotiation and we started a full service restaurant right out of college, 60 tables in Meyer Park, and that really taught us a lot. I mean typical immigrant story. Right, we made the tables in our garage. You know, walk through the snow in the Houston summers, all that stuff Uphill both ways.

Chris: Yeah, exactly.

Pete: So that experience was very good, and I always mentioned the full service restaurant because it led to what ended up being Fajita.

Chris: Pizza yeah, it's part of your journey, right yeah?

Pete: Taught me. The first year was just survival. Second year was figuring out. Okay, now that we kind of know what we're doing because you never know you kind of know what you're doing. Now how do we add revenue? And that's how catering became a topic.

Chris: Okay.

Pete: It got to over the six years we were there, where we grew the catering business to where it was doing more than our lunch business, and so when it was time to renew a lease, it just didn't really make sense to have the 6,300 square feet we had. Right, we took a leap of faith and went to a 1,200 square foot kitchen in West University and, thank God, it worked out. Yeah, you know, and that's kind of, we were able to keep what we liked from the restaurant business and do it in a way that allowed me to keep doing it, because maybe if I was still in full service I wouldn't be in the business anymore. It was just a very you know, starting at 23, and it was just very hard to get it going yeah uh, but it taught all the lessons I wouldn't learn.

I mean, you learn, you know how they say. You learn more the first six months out of college than you do.

Chris: The four years in right, yeah. So what was the name of that first restaurant?

Pete: Poblano's Mexican Grill.

Chris: Okay.

Pete: It was in Westmire Park. Now they tore down that area. There's a Coles there. It's a nice development.

Chris: Yeah.

Pete: I'm very grateful to the people in that area. They were very nice to us. We still deliver to them a lot. You know, we have people that come by the kids. Like I mentioned earlier, we've been able to feed kids from since they're little to college, and when they're in town they come and say hi. So so it's been a very good community based business from the beginning, and I think that's what allowed us to really get the roots down. That allowed us to, you know, withstand all the problems that come with a new business.

Chris: Yeah. So let's talk a little bit about those early days. You just said, and kind of alluded to it, those first six months out of college. You feel like you learned a lot more than you did in the four years in college. Anyone in any business starting out on their own there's a lot of headwinds. There's lessons learned. What were some of the things that the challenges you faced that you might share with the listeners to say now you know I went through this, you're likely to go through it too. Here's what I did to help and maybe something you experienced that someone might learn from your experience, to avoid Anything that you share from that perspective.

Pete: I think at the beginning, with the restaurant business, you're in the people business right, and the biggest issue that you don't get practice at is managing your employees, your team, your coworkers. I think that was a big eye-opener because maybe people you run into people that don't have the work ethic you have, so you have to learn and I was, you know, young and my mom always told me start when you're young and dumb, because if you're smart enough, you won't do it. If you were smart enough, you wouldn't do this.

Chris: Well, there's plenty of people that have come on the podcast that have said you know, yeah, you're never really ready, you just got to take the leap. It's like having a child.

Pete: Yeah, you're never ready, it just comes, comes and now you have to figure it out. So, dealing with a crew setting up, the importance of setting up systems from the beginning and not willy-nilly as you go, which I did at the beginning, that's a problem. I said well, we'll figure it out.

Chris: Follow your heart.

Pete: I think during those trying times at the beginning, it was that developing systems, figuring out how to be a better leader to the people, and also all that while controlling cost, and what really helped me through it because businesses fail from being undercapitalized or mismanaged and what helped me through it is that we were always able to live very below our means to really withstand those pressures that came at the beginning.

Chris: Okay, yeah. So yeah, it's good insight. You talked about the challenges of you know work. You're managing a team. There's challenges in building the team right Because you got to get it right and you're going to run across times where you make bad hires. What are some of the things that you've learned over the years? To try to? You know perfect that either the interview process or whatever to make sure you're hiring the right team members that can kind of buy in and get aligned behind your mission and your beliefs.

Pete: I think it's hiring. When you hire out of necessity, you're already at a disadvantage. You just need bodies, right. I think, hiring at the right, getting the right person even if you don't have a spot for them, and making a spot for them Somebody that you think can be good for your team. 85 percent of the employee issues are solved at the hiring table. Yeah, you know, you need to get better at picking people who represent, and now people when they're applying, they talk very well, right, so you've got to get used to looking through the through the BS.

That's the hard part yeah, and, and we're in the industry where we're talkers right, the end is the restaurant industry and also understanding and being compassionate that most people that are in the restaurant industry didn't that wasn't their goal originally.

We get a lot of people that end up in this industry okay, so you have to be understanding of the path they've been through yeah, I didn't think about that yeah, and so so you have to allow them a growth path within your company, allow them a system that shows them respect and treats them like people, because I hear horror stories about how people get treated other places or and it's just the industry word, sure. So I think having that empathy and looking at the same time, looking through the BS and making sure the person you're hiring has somewhat the same values and goals, or at least providing a structure to where it's very clear what you expect from them, I think that's the only fair way to hire somebody Right, because at the beginning I was hiring people and I didn't have a structure, so that's unfair to them because I figured out, like I'm doing current.

Chris: Right, right, right, you're living and breathing it. Yeah, someone you hire may not.

Pete: No, they need a job yeah, and so learning that that immaturity I had at the beginning, that was key as well and it was unfair to the employee. So really creating systems becomes a way to be more fair to your employees. Set clear expectations, trackable expectations and achievable expectations. I think that's key to them.

Chris: So you have this restaurant right, full service for six years or so, and you make a decision that's pretty significant to kind of really change up your entire business model. What was it that kind of you know led you to get the I don't know confidence or the ability to take that risk Like?

Pete: everything else. Necessity Necessity Right, because you're signing an extension of a lease and it feels like a plea deal.

That's not a good that's a good sign that you shouldn't sign that extension. You know Right, good sign that you shouldn't sign that extension, you know so. Then, luckily, some of my um. Greg lewis is a gentleman who found the spot for me at west you and I'm always very grateful to him. He was just a customer of mine. He said, hey, there's a spot. If you really think about doing it, there's a spot that's available, you should check it out and so I'm very grateful to him.

Always he does a lot of real estate here in houston and um, it was a leap of faith in that. I knew that in 10 years I didn't want to be doing what I was currently doing. So I always think if you don't want to do it in 10 years, then don't do it today, because what are you doing? So I said I like this part of the industry and it was also more scalable. The model I was creating was more scalable and coming out of the entrepreneurship program, I mean, you go there to scale businesses. They teach you a lot of things. So I said this is more scalable. With my small brain, it was easier to fill in the spreadsheet and really explain to myself and prove to myself that it was going to be more profitable in the long run.

Chris: It's interesting. I wrote a note to come back to this because when you were talking about full service to what you're doing now, it struck me that what you're doing now is way more scalable than a full service restaurant. It's tough and there's plenty of great examples in town that are still very successful restaurants, but those full service restaurants seem to have a. They gain up, the ones that sustain, develop a personality, typically around that founder and entrepreneur right who's there, and we have lots of great examples. I frequent them a lot but they're tough to scale. Maybe they go to two locations, but it's like it's hard to get beyond that personality of that person and what you've done is is may created something that still has great quality food, has your stamp on it, but doesn't require you to be at all the locations for it to be successful and I think that comes from the, the low operating cost, the simplified menu we spoke about earlier, all those things you know.

Pete: I do think that the full service there's always. There's great restaurants here. Like I said, I was born in colombia. I learned how to eat mexican food at ninfas yeah you know, and, and there's a lot of amazing restaurants here in houston. People always ask me well, what do you think about this place? They're great.

There's a dude, we're blessed in houston there's so much good food and it's just to me. I tell them it's just an honor to be even mentioned. Like they say oh well, I like your food. I compare it to this restaurant. I compare that. You know that's crazy yeah now it's to think of how it's scaled and how how people know we're actually starting to go from the. What the heck is a fajita pizza?

Chris: oh, there's a fajita pizza right, which is a weird turn yeah, you know, I don't know how to tell a different mind. Yeah, yeah, so so you, yeah, so you start this new concept, you start to it. Let's talk through what were some of the challenges you faced in scaling the business.

Pete: I think it was educating the market. Right, it was really letting people know because at that time in 2008,. You either got pizza delivered or Chinese and that's it. Yeah, so really educating the market that we do delivery. They're like, oh, okay, so for like 150 people or no, no, no, we do. And you would tell the customers would come in, it's a little room like this. They would come in multiple times and then until while they were there, they saw drivers going. They go oh, you deliver to houses.

And it was just an education time because Uber wasn't really big. No, third-party platforms, so that was a very difficult thing. I also put the tortilla lady right behind the counter so I could see her hand-rolling tortillas, because also, when you go to smaller locations, people assume it's a lesser product. Right, it's an inferior product. So I said, well, let's put the lady right here so they know, because they're used to going to the restaurant and seeing the ladies make tortillas the good ones, you know and so they were like, oh, I get it, y'all make your food. It was just a big education process, educating the markets always was the hardest thing at the beginning.

Chris: Talking about the tortillas, your quality of food is outstanding, my opinion. Thank you. I think other people agree. One of the challenges for a restaurant, I would think, in the scale, is maintaining the quality and the consistency. Is maintaining the quality and the consistency what? And you? You talked earlier about putting systems in place, but what? What are you doing to make sure that quality and consistency is there, because you're now all across the state of texas?

Pete: yep. So it was very difficult to begin. Like I said, we we used to trim in house marinating house. It's a. I mean, we can get into the weeds on processes and procedures, but you would always maybe go to another store where they added sugar instead of salt to the marinade. So you're like, oh, we can't do that. Very early on I realized that I needed more system, more structure, and one of my goals was to grow. But I knew I couldn't do it the way I was doing it. Then we got to the point where we could marinate our stuff centrally and distribute it to our food distributor who takes it to the stores. So that was one thing that saved some concern, because that's the biggest heartache is the worst thing you can hear is I don't like that one as much as that one.

Chris: Right, it's just different, right? Yeah, that hurts yeah.

Pete: So it's developing relationships with manufacturers that can actually do your recipe the right way and deliver it to the customers.

Chris: Sorry, yeah, go ahead. You've been talking a lot.

Advert:

Pete: Well, you go back to getting a good team around you, right? So when I started to grow, I ran into one of my partners, joey Aguia, who had a lot of operational experience in the industry. He was a franchisee for multiple concepts and, because I don't want people to think this all came out of my brain, I had a lot of help along the way and I would stop you because that is such a great point.

Chris: Rarely has anyone just done it on their own right. You surround yourself and maybe we'll talk a little bit about that in a second, but I think it's a great point we should pause on, it's knowing what you're not good at. Yeah.

Pete: And luckily.

Chris: I'm so bad at so many things that it was just finding people all over the place that could help me. Well, I doubt that part but I bet you know.

Pete: So innovation so you were talking a little bit about All right. So innovation was going to these manufacturers and our recipe is citrus-based. So technology really caught up to what we do in that not that we do anything special, but the way we do it was very hard for technology to be able to put it in a stable way that could perform the way we expected. So along the way we got with further processors who marinated our product and that was a three-year process to really get it right. So that's innovation on their side right.

For us it was our technology, our apps, our ability that helped us survive through COVID. Actually Our ability to do curbside, to be quick and responsive, the way we package our things, the way we set up our kitchen, which took a couple iterations, and to really limit steps and increase customers service through speed and convenience and, like I tell people, the three C's you know convenience, a consistency and quality dad joke, like my daughter says that joke and and so. So those three things really helped us to speed up our service and match. So the problem there becomes matching your service through technology and through your processes on the front end. So really investing into that at an early point helped us keep a little bit ahead of the curve along the way. Okay, so those type of innovations.

Chris: That's great. Head a little bit ahead of the curve along the way, okay. So those type of that's great. So, as I mentioned, started in houston and one spot in west university. Uh, you've now expanded throughout the state. What are some of the advantages that you've experienced or see in being a texas-based business and maybe it'll kind of spread across the state? I?

Pete: think that that well, I came to Houston. I don't you know, being here, you don't realize how big it is and how competitive it is, and, as I think being in that competitive environment really helped us, you know you gotta. I mean, you can't sell fajitas 23 years in Houston and not be good.

Chris: Right.

Pete: There's 10,000 restaurants that do a great job in Houston, so I think that was one of the things Having access to big providers, distribution, the ports, being close for our produce. You know being close to the border, so I think that being a hub allows you to control costs, develop business and really grow strategically. Having so many people here law firms, business professionals to help you along the way, you have everything you need in Houston, In Texas, you know, by professionals to help you along the way. You have everything you need in Houston In Texas by default, so I think that was really an advantage. Although it's hard to make it, I think you have the tools you need if you're lucky enough to run into them early.

Chris: Okay, that's good. So, when you think about the restaurant industry, what are some of the headwinds that you feel like your company or the industry may be facing today, or that you see around the corner that you're trying?

Pete: to. Right now. I think there's a crunch. People are spending a little bit less, right? I think we all see it at the grocery stores, we see it everywhere. So a headwind is how do you translate your value proposition to the guests? We're a community-based business, so we tell people teachers, preachers and coaches so that is part of the value proposition you have as a brand. But people still want to. I mean, it's all about the meat and potatoes, right? They want to get a good value for their food. So the headwinds are figuring out how to provide value, control cost and still deliver the quality that the customer deserves. Gotcha.

Chris: What was one of the? When you think about struggles or lessons learned, what was one of the maybe failures or mistakes you feel like you made along the way in those early days that you overcame, but it taught you a lesson that you'll never forget.

Pete: I think it was really like we mentioned in the beginning hiring problems. At the beginning it was a lack of maturity. It was a lack of having systems, like we mentioned. I think, maybe underestimating what I did in that well, if I did, anybody can do it and maybe making bad decisions on people I could put in key situations, and those probably came because my systems weren't good enough also. So I think really underestimating what you do as an entrepreneur is a problem that we all have. Underpricing your services is a problem we all have. And trying to compete with my full service restaurant, trying to be everything to everybody, having 70 items on the menu that was the biggest lesson. I said no, there's too much waste. It's too hard to be good at everything else. Let's just be good at one thing and replicate that. So I think those lessons really got us to where we are in learning how to trust other people in areas that you're weak at.

Chris: I said well, going back to being the best at one thing, it's almost like the GE mindset, right? Yeah, let's be. If you can't be the best, let's not do it.

Pete: Yeah, I got any color you want, as long as it's black. Yeah, you know so that's the way you, that's the only way I could figure out how to do it.

Chris: Yeah, the kind of going back to the people and I agree with your emphasis on so much of it is in the interview process, hiring process. You usually learn that the hard way, right. And then you get to what do you do when you realize you made a mistake? And what have you kind of learned over the years about when you realize you've made a mistake, how to handle that and how to move?

Pete: on. I think you have to be fair to the person. You have to let them go. You have to get rid of the people, right, inform them of why it's probably not a good fit. Most of the times, people just fire themselves.

But in this situation where you make the mistake, you just have to be fair. Let them know what their strengths and weaknesses are, because I would want somebody to do it to my son. Sure, let him know where he messed up so he can be better next time. Say, hey, it ain't going to be here, but if you get better, you'll do better there. So having those clear conversations those are tough conversations to have, sure, they are, but they're important because they're part of leadership is not when you're with the person you know. Good leadership extends to when they're gone from you and in the lessons, like a lot of the leaders I've come across, I say the things they say still 30 years later because they're good leaders. So they don't have to be next to you to be a leader. So we, as people who are in charge of businesses, we have to understand that the leadership style we need needs to be forward thinking, right.

Chris: But it's a great mindset to share. So let's talk a little bit about leadership then. I always like to ask people how would you describe your leadership style? How do you think that's evolved over the last?

Pete: almost 20 years. I think it's like people, I'm very relaxed leadership style. I'm really not very confrontational. I need to get better at those things. But I take everybody's opinion. It's very disseminated the way we make decisions. It's never hey, make the call, pete, right, no, no, we talk about it. I involve everybody. People that maybe even ask why are you asking my opinion? Why do I? Whatever, I think it's very important to always take the opinion of people actually in the front lines, and that's the reason I like having my store, my original store, always because I'm making decisions for a store in Chicago, well, I need to feel the pain of that decision, I need to feel the weight of it, and if I wouldn't do it at my store, why would I do it at theirs? So it keeps you honest. You have to be with the team. I guess is the question for leadership.

Chris: Sounds like kind of that servant mindset.

Pete: Yes.

Chris: I'm not going to ask you to do something I wouldn't do myself Exactly.

Pete: And then, once decisions are made, expect everyone to know, get behind it, move forward. Yep, exactly, I think that's important part of especially the industry we're in, because people you, you deal with hourlies, salaries. Now with the franchising corporate staff is a different employee than at the store level, but everybody has a, a trigger. You can. You can touch people in different ways, but you have to take the time to know what motivates them. So you have to to be in it.

Chris: Got to be in it. So we've kind of been talking around this, but let's go right into culture, right? So all you're talking about hiring the right people, telling them and being clear about expectations, giving them motivation and incentive to do that job. You know, how would you describe the culture that you believe you have at Fajita Pete's? And then what are you doing to make sure that, as you scale the business beyond that one location, that it is resonating in those other?

Pete: locations. We need to do a better job of culture building. You always need to be doing a better job of culture building. I think it's by example, like I told about the leadership side. So we try to communicate directly with the teams. If there's issues, you communicate directly with the frontline people that don't expect a call from you, but it lets them know hey, somebody's watching, and not only when there's issues. When there's good things happening, you need to communicate that to them, because it's like putting deposits in a bank account right, every interaction you have with somebody is that you're putting a deposit or you're taking a withdrawal and if you go and only withdraw, they're not going to listen to you. There's nothing there. So you have to build that up.

So those interactions are part of what we do as a culture. We need to incorporate probably more team meetings, as we do. We did at the beginning and now, as the company grew, we have multi-unit franchisees who kind of have a good vibe going on good culture within them. But I do think getting back to more scheduled team events is going to be good. We just had one a few months ago. So those things that allow people to see that you're in it with them. You're going through the same issues it's not just you and you have that support system. I think those things are critical.

Chris: I like that and I think the team building right Creating opportunity for them to connect and build relationships so that the team within the team has a connection, feels like they've got each other's back will end up being a better product for the customer Because they're taking pride in what they're doing and want to help each other be successful.

Pete: You have to believe your own BS. You know what I mean.

Chris: If not, because part of the service that.

Pete: You have to believe your own BS. You know what I mean. If not, because part of the service that we try to teach is genuine service. So you have to have a genuine. Like I tell people, don't learn my spiel, but learn in your words. Say the same things in your words, because I don't want it to sound rehearsed True.

But, it's a tough thing, as we grow so fast, to really you go through six months at a time in the blink of an eye. So it's something that we have to be more intentional on and keep building that Right.

Chris: There's so many things going on right. That's a good point as an entrepreneur, just how you juggle and manage because you're trying to keep the business going, trying to grow the business, you're trying to maintain relationships up, down and all around. But you got to. I think it comes back to systems and processes. Right To say we're going to have quarterly team meetings or whatever they're going to be, so that there's a scheduled cadence to doing the things that help create the connectivity.

Pete: Yep, that's part of growth. I think it's just taking stuff off your plate, putting in the right, because on top of all the business stuff there's also life.

Chris: you were a great education at U of H and the entrepreneurial program. So what? What type of advice, being where you are now looking back, for someone out there that maybe is thinking about starting on their own, like you did years ago? What are some of the one, two, three things you might say as advice to say, if you're thinking about starting your own business, regardless of the industry?

Pete: What's some something you might say as advice to say if you're thinking about starting your own business, regardless of the industry, what's something you could pass on to them? I think you have to have. You have to go in it with open eyes and understand that it's going to be. You can have the best intentions and you can do everything fault, but it's always your problem. So I think that's having you have to know that going in and thank God, now there's industry. You hear, hey, I started a business, sold it in five months for X amount. That's awesome, but that's not everybody. So be ready to.

If you're not planning on keeping it, don't start it. Be ready for that. So I buy a couple of little commercial real estate properties. Are you going to flip it? If I'm not willing to keep it for 30 years, I'm not going to buy it today. Now will I flip it? Probably.

But you have to go in with the mentality If you're not going to keep it, don't start it. And, like the good things, set yourself small goals, because you always have the big picture as the entrepreneur, as the founder, sure, but set small goals and celebrate the wins, right, you know. So I, I think it, once you achieve those smaller goals, those milestones. You really need to celebrate them for you, because we have, I tell people, entrepreneurship is almost a disease, right, right, and you don't recommend it to everybody. It's not for everybody. 100 so, and there's nothing wrong with not being an entrepreneur now. Now there's a culture that everybody needs to be their own boss and side hustles, and not for everybody. There's nothing. There's entrepreneurship that they teach us in the entrepreneurship program also how to grow within the company Interesting, how to add value to your boss.

Chris: I hadn't heard of that. That's great yeah.

Pete: So that's a very important part, because not everybody, it's not for everybody.

Chris: It's not, and that's a great point, right. Everyone thinks, and because of those, the the things that get the headlines right someone starts a company, a year later, they sold it to whatever it sounds easy, we're making it.

Pete: You know the media romanticism about it yeah, but it's not for everyone.

Chris: I mean, we're all different, we all have different strengths and and we said this earlier, you know in the podcast, in this episode it's not easy, it's not for everybody. So just because you can't do it, that make you a bad person. You have, you could have a very significant role within a company, even if you haven't found it uh, I would think that's a great thing on your resume is failure right, right that that that I mean.

Pete: that's how we all learn, absolutely, you know. And another another thing is people who have done things. If you can move one rock out of the path of somebody coming behind, then that's also our responsibility. Right Now, will they listen or not? Because I remember 23,. You knew everything, you know, yeah, so, but you have to be available to those people as well available to those people as well.

Chris: Okay, so you said you moved from Columbia. Yes, sir, what's your favorite thing about Houston or Texas? Is there an event you like to go to every year, or sporting event or cultural event?

Pete: About Houston is that there's a lot of live events. So I like live stuff, I like sports, I love the Astros. Go to the Texas games, rocket games, I like that. If you wake up at, if you you're one in the morning and you want to eat food from any country in the world, you pick it. There's a restaurant here in houston for it. Yeah, I like that. There's a good international community. I mean, there's bad things, always the traffic and everything, but that comes with it, right. So I like the opportunity that it's there, because then you can learn from different things, you can apply what you learn in other areas. So that's what I like about it Just the broadness of it, the availability of whatever you can think of and the access to different people that come from maybe not a similar background, but we all have mothers, grandmas, fathers, brothers, sisters. So you end up realizing that the world is not as big as you think and we're not as different as we think.

Chris: Very true, very true. So I'm 90-something episodes into this podcast. I've asked every guest this question at the end. When I ask you even though it just seems a little bit odd, but I ask my guests, what do you prefer? Tex-mex or barbecue? You with the fajita restaurant? It seems like it's not a fair question.

Pete: It's not a fair question, because my favorite type of food is chinese. Okay, so no. But houston has a great uh text mix scene and and I think it's just awesome when people come here you've seen the interviews they come in for barbecue text mix, but there's so much more in between, sure, you know? I think it's. It's such a beautiful, it's a good city.

Chris: It's a great city to be a foodie. Yeah, because it's also where it's such a beautiful part of town.

Pete: It's a great city to be a foodie. Yeah, because it's also where it's at on the map right. You can access different produce products that match other cuisines, so then you end up getting more authentic food, like you would if you went there Now. It's not equal apples to apples, but it's a very good representation of whatever that culture is trying to portray.

Chris: So last question you've mentioned is it's it's not being an easy being an entrepreneur, run your business. So what do you do to kind of for yourself, to kind of recharge, relax?

Pete: Spend a lot of time in the afternoons with the family. The funny thing is cooking, which we do all day. But you know, go home, clip a branch of the rosemary plant, make some steaks for the family, spend time, go to live events. I think recharging that social battery. Being in crowds, I like that environment. That's part kind of the restaurant kind of gives you that. But you know, going to different live events, concerts and sporting events is really kind of the way to charge up and it allows you to be in the moment and, even though you never clock out as an entrepreneur, it allows you to kind of disengage for just enough.

Chris: Yeah, you know until you're driving out. Nearly right, yeah, so well, pete, this has been great really your stories amazing and inspiring. Like I said, I've been a big fan of the food for four years before you, so getting to meet you has been a real pleasure.

Pete: Thank you, thanks for coming on. Thank you, brother.

Chris: Appreciate it.T

Special Guest: Pete Mora.

A thriving business is built on people, not just product.

This week on Building Texas Business, I spoke with Lynne Doherty and Clarissa O’Connell of Sonar, a developer-first software company founded in Geneva and growing fast in Austin, Texas. Lynne leads their go-to-market team, and Clarissa heads up people and culture: together, they’re shaping Sonar’s growth story in the U.S.

We discuss Sonar’s journey from its open-source roots to serving over 28,000 organizations. Lynne shares how Austin’s tech ecosystem and talent pool have been key to expanding their operations, including the rollout of their latest product, SonarQube Advanced Security, an integrated solution that combines code quality with security. Clarissa highlights the cultural strategies that keep Sonar’s fast-scaling team engaged and committed, including an acronym-based value system (CODE) and a balanced hybrid work model.

Over the conversation, we see how Sonar’s approach to innovation and people has evolved. From whiteboarding solutions on-site to building confidence in AI-generated code, their focus is on helping developers build better, faster, while maintaining a human connection.

What stood out to me most was how Clarissa and Lynne use leadership not just to grow a company, but to create a space where culture and innovation reinforce each other. It’s a reminder that whether you're writing code or growing a team, trust and clarity go a long way.

Show Notes

Previous Episodes

About BoyarMiller

About Sonar

(AI transcript provided as supporting material and may contain errors)

INTRO

Chris: In this episode, you will meet Lynne Daugherty and Clarissa O'Connell of Sonar. Both Lynne and Clarissa share how being based in Austin, texas, has helped accelerate their company's growth and influenced its culture. I'm going to say hello to Lynne and Clarissa from Sonar. Thanks for joining me on Building Texas Business.

Lynne: Thanks for having us. Thanks for having us. Great to be here.

Chris: So I'm going to just have a fun free-flowing conversation, but I do want to start with each of you telling us about yourself, but also about Sonar. What does the company do? What is it known for?

Clarissa: Great.

Lynne: Yeah, I'll start. My name is Lynne Doherty and I lead our go-to-market team here at Sonar, which, if you think about that, is almost everything that directly touches a customer it's sales, it's support, it's engineering, it's our customer success organizations, our demand marketing organizations, and so I've been here at Sonar a little over a year now and it's been a great and wild ride. To give you a little background on who Sonar is, so we're a company founded in Geneva in 2008. And since the beginning, we have been an organization focused on developers, a developer-first company. We came to Austin in 2018. It was our first US office is in Austin and since then we've continued to build out the team in Austin, including our CEO Clarissa, our head of HR, our new general counsel, our new CFO all sit out of Austin. So Austin is is our second biggest office outside of Geneva, where we were founded.

What we do is we focus on developers and it's around reaching the market of developers. We have 7 million developers that use our products. We have 28,000 organizations that use us today, and it's all around. How do we make developers more effective, more productive? We call it building better, faster, and that's what we're focused on is how do we do that Giving developers actionable intelligence so that they can build better faster. That that's what we're focused on is how do we do that giving developers actionable intelligence so that they can build better faster.

Chris: That's right. So is it kind of an open source type concept then?

Lynne: We start in open source. That was our roots is we have an open source product and then we have what we do at Sonar is sell the enterprise version of that product, the product that's the commercial version, when you need more features and grow and scale. We developed a product that people can use when they sort of graduate from open source.

Chris: Great Well Lynne I appreciate that so. Clarissa, let's hear a little more about you, and then your background and a little bit in the role you play at Sonar.

Clarissa: Yeah, absolutely so. My name is Clarissa O'Connell and I am the chief people officer here and, as you heard from Lynne, she manages the business and I'm in the lucky position that I get to manage the people that help drive all of those activities. So I'm really excited that we're in Austin, texas. As you know, it's a really thriving city, specifically for tech and for things like AI, so it's a perfect place for us to be located. We have almost 200 people here in this Austin office.

We are growing this office every single day, with offers coming out on a regular basis, and I am in the really lucky position that I get to help drive the initiatives that help Lynne establish the protocols and sell the business for our customers.

So I get to focus on things like making sure that we're one of the top employers in Austin, the rewarding packages for our employees, so that we can take the time to find really qualified individuals and then keep them here, and then all of the things that surround that, like culture, learning, development, career advancement and training. We also partner with all of the major research universities in the region to be able to develop things like internship programs and make sure that we're really socializing what it is that we do within the developer community and kind of embracing this really fast moving startup culture that Austin is really known for, and all of those things put together are making us who we are and the employees here are fantastic. Austin is amazing and some of our smartest talent is coming from the Texas region, so really happy to be here to talk to you about businesses in Texas.

Chris: Yeah, Well, I'm not biased but I'm not surprised you're finding Texas and the workforce. I think it's important. It's one thing to have business friendly policies in place, which Texas certainly does, but you've got to match that with talent or the companies aren't going to come and some of it may be a chicken or egg kind of thing, right, because we do see, and I'm sure y'all are experiencing migration of people to Texas because that's where the companies are establishing themselves, like you have, and then trying to build from there. So you know, kind of to that lens, what are some of the emerging technologies or the trends that you see shaping kind of Texas business and, specifically in the Austin area, what are some of the trends that you're seeing emerging that are helping you with this growth?

Lynne: Why don't I start? And, Clarissa, you can add in if you have anything. But I'd say the biggest trend that we're facing as a technology company and a software company for developers is, every day the news around AI is coming out and changing and evolving incredibly quickly, and you know, for us, we really believe that the core of software development whether that's designing program, validating the code that's developed, it's going to be enhanced by AI, and what that means is people, our customers, their roles as developers is going to evolve. We don't believe any of those roles disappear, but we believe they change, and so it's a big trend that's out there, that we see and our customers are faced with every day. It is something that we take into consideration as we evolve our business strategy, as we think about how we talk to our customers and how we help them solve the problems that they are facing today, and it's one of the benefits of being in Austin is that it enables us to attract talent to help solve these problems as we develop our products.

Chris: Yeah, I think, just to step in. I think what's important in there is the idea that AI doesn't replace jobs. It may change and enhance, because isn't that what technology has always done right? As things have evolved, people have always adapted to. The computer hasn't replaced them, even though, with AI, I think there was that big fear, that myth that you need to debunk, right.

Lynne: Yeah, no, you're exactly right. I mean, think of all of the different innovations across time that are going to displace people and people aren't going to have jobs, and it ultimately means new jobs and growth, and it's just different kinds of jobs with different skills.

Chris: Yeah, so of course, how has being in Austin helped position the company for the success that you're seeing?

Clarissa: Yeah, and that's exactly why we're in Austin right.

We're in this fortunate position where, as a global company, the Central Time Zone location is really perfect for us and we've got a really amazing strong pool of skilled workers that are coming to Austin, Texas, from all over the world because it is this emerging tech-friendly environment that people are embracing and Austin is a pretty attractive city to live in.

You know, we've got really great weather, we've got really fantastic resources, we've got an infrastructure that supports all of these global individuals from across the world, and we're finding new ways to give back to the community, which is also helping us draw really solid candidates, whether that's through you know, sonar Serves is what we call it, but it's when we take our amazing environment of individuals and we give back to our local communities, and so that helps us really retain and attract really strong talent, and all of those things equal us now out of office space, and so we're actually today moving to more space in the building that we're in so that we can continue to be an emerging talent where we can focus on hiring, bringing in those key people, expanding into those new technologies and bringing in those skill sets and diversifying the Austin region and the company itself.

Chris: Well, that's really good to hear because in this environment you hear more about companies shrinking office space, not growing. So I'm sure the office market there in Austin appreciates that. So just while we're on that topic, how are you managing with like kind of work remote policies while you expand and take on more office space? Do you see your people coming in more over the last, say, year or so than before?

Clarissa: Yeah, we're really lucky that our work environment here is extremely collaborative and, because of the work that we do, oftentimes we do our best work all sitting in one room and whiteboarding things out and solving the problems as they come up. That's really. Our workforce has embraced that opportunity to be able to interact with each other face-to-face. You know, as an HR person, I think it's a combination of people love working remote, but they also kind of miss that interaction, and so currently our workforce comes in every Monday, tuesday and Thursday and then on Wednesdays and Fridays. We make those days optionals for our employee. They can come in if they want to interact. They also choose not to come in. They have the ability to work from home. But, believe it or not, we have about 60% of our workforce that still comes in on Wednesdays and Fridays because that interaction has now become a thing.

We're in this fortunate position, being a global company, that we work really hard, but we also have this European culture where it's common for us to embrace that work-life balance, and so it's common for us to do coffee chat meetings. We have the luxurious European coffee machine in the kitchen, so it's dragging people into the office where they're able to talk about those emerging technologies, how to continually improve and increase the company and really embrace our culture. So the one thing I think I'm really proud of is that people work really hard, they're incredibly talented, so they're driving the product to the next level and they're embracing this interaction of culture, and so all of those things together are making it a pretty incredible place to work.

Chris: That's great. So, Lynne, let's talk a little bit about innovation. What are some of the things that you feel like Sonar's done in the last several years to really you know? I know your technology company so you probably said, look, that's in our DNA. But what are you doing to really be, or do you think is innovative, for maybe your industry that has, you know, kind of helped position the company to where it is today?

Lynne: Yeah, you're absolutely right, chris. I mean, I think it is in our DNA, it's part of what we do, and developers are always at the forefront of technology, and so our customers challenge us to be better every day, because they want to be better.

They need to be better and because we're in this changing landscape. So a few things we've innovated on, and we're fortunate because our solution is a fit for really all industries, all types of organizations, all sizes, and so we're focused on a few things that we've done recently, which is really interesting. We have just put out something called SonarQube Advanced Security, and so, if you think about what that is, it's helping developers make their applications more secure, and security is a threat. Everybody in all walks of life, all organizations, faces this threat of cybersecurity issues that can get embedded in code, and so we support developers in not just helping them build faster, better quality applications, but now we've just put out something that enables them to do both code quality and security. It's the first integrated solution to do that, so there are a lot of people that do either one or the other. We're the first bringing that together into one integrated solution for a developer to use, that together into one integrated solution for a developer to use.

So security is something that is a big innovation for us that we've just come out with. I'd also add the AI features that we have. How do you get assurance on your AI code? So a developer's creating AI code, it's automated, but you still want to make sure that code has good quality, good security, good maintainability, and so with our product that's a new innovation that we have is to how to make sure that all of that AI generated code you have the same kind of confidence in that you do human written code.

Chris: Good stuff. I mean security. You're right. It becomes increasingly more of an issue because more and more things in the cloud all of our information and of course we know there's a whole world of professional hackers out there just trying to get in. So I think it has a lot of people concerned and trusting, whether that trust is well-placed or not. But I think to your point of focus on security, you can't emphasize that enough.

Lynne: Yeah, yeah, you're absolutely right. I mean, it's a huge issue and huge concern and we really believe if you start with the developers as the application gets developed and build security in, you get a better outcome than you build an application and try to layer all of the protection on top of it. So it's really about building security and at the development stage from the ground up, and we believe that's a really important trend that we should be a part of.

Chris: So, Clarissa, what are some of the kind of investments, if you will, that Sonar is making in Austin to kind of help support your growth strategy? And how do you see, how has that been playing out for you?

Clarissa: Yeah, that's a great question. So Austin, as a thriving tech city, has this really entrepreneurial spirit where we've got these incredible talents from all over the globe that have come here. They really want to stay close to innovation and attract kind of that top talent for us, and our product allows us to do that, not only because of its name recognition but because of the impact that it has for developers worldwide, I think being able to grow our businesses in Austin is key for us. We've already mentioned that we're out of office space and so we're having to grow into that region, but we've expanded our footprint within the market way more than just increasing our office space.

We've got internship programs where we're partnering with some of our incredible universities to bring in those individuals who want to get into the footprint of technology and because oftentimes they're already aware of our product, it's a really good opportunity for them to partner with some of the best minds in the business that are working on our product, both driving the product and driving the technology, and so we have really robust internship programs where we give them exposure into what we do and then those eventually lead to full-time jobs and we have the opportunity to put those interns into multiple markets because we are spread across the globe and so we're really proud of exposing those individuals and it helps us to hire those right people.

From the very beginning, we are working really hard to be a standout or a world-class choice for employees and so because of that, we leverage a lot of our hires based on referrals, whether those are from customers or from internal employees, and we really focus on providing that experience for individuals that they're proud to work here, and doing that in a way that gives them a work-life balance but also a rewarding package so that their impact that they have in driving our product forward is rewarded for them on the back end through multiple things, whether it's activities giving back to our community, really amazing benefits packages to be able to support them when they're not at work, to learning and development opportunities so they can continue to grow in their career, so that we're bringing them in as a world-class employee, and then we're giving them the tools and resources to even be better than what they ever could have been, and all of those things coupled together are helping us get that top talent in that Texas market to be able to work for our company.

Chris: So of course, you've talked a lot about it, but I want to dig a little deeper about culture.

Clarissa: One of my favorite topics.

Chris: So how would you describe the culture at Sonar?

Clarissa: Yeah, that's a great question and one of the favorite things. We could talk about this for the entire time. But we use an acronym to divide, to talk about our culture, and it's actually CODE and it stands for committed, obsessed, deliberate, and then, based on what team you're on, it could mean efficient or it could mean effective. The committed is being committed to what it is that we do as a company for our customers and our clients, but it's also that we're really committed to each other.

Everyone at Sonar has a voice and all those voices are heard and we're really good at a collaborative work environment where we talk about things in joint sessions and we have nuances to that that I'm really happy for. We do this thing called called chickening, and what it basically means is anybody in the company at any time can sit it on generally any meeting so that they really understand that collaboration between teams and departments. So if you're on the product team, you can sit in on marketing so that you understand what that's about. If you are on a, an IT team, you can sit in with products, you can understand the roadmap, and so it's really helping our employees understand what we do as a company so that everybody is moving in the same direction. Our obsessed really is closely tied to committed obsessed about what we do, obsessed about who we are and obsessed about the impact that we make, both internally and externally to our clients.

Chris: I love that word, by the way.

Clarissa: Me too.

Chris: I mean it's impactful right.

Clarissa: It's really great. We have pictures throughout the office that are code and it's this big, bright acronym that's posted everywhere, so it's really in front of everybody and we talk about it all the time. For deliberate we really do make deliberate choices. We listen to our customers, we listen to our employees and we navigate throughout our company decisions based on a lot of that feedback. We've got incredible moderators that are out there listening to the voice of what our customers are, and they're sharing that information on a regular basis.

We're constantly iterating on how we do things so that we can do it better every time that we tackle the project again. And then the, of course, efficient, effective, right Based on the team that you're on. We try and do things in the best interest of the company and we also really embrace this culture that it's okay to ask questions and it's okay to make mistakes, as long as we recognize what those are and we get back up and we try again, and all of those things combined really drive a culture here that is extremely positive. As a global workforce, it helps establish the criteria and expectations that we have across the company, but it also drives those relationships so that everybody understands where we're going and what we're trying to do, and everybody is all in and doing it together. We do regular all hands where we talk about everything transparently, including. What most companies don't do is we take live Q&A at the end and we answer them in real time. So transparency is really important for us.

We want our employees to understand that they're here and that their voice matters and to reward that.

Every year we also have this really amazing incentive that we have called the Company Growth Incentive, and so we establish milestones in the beginning of the year and every employee at Sonar is rewarded for their actions and activities by a growth incentive or an award bonus at the end of the year, and it's the same amount regardless of what role that you're in, because everybody here matters for what we're doing every day and everybody gets to kind of celebrate in the rewards of those achievements through the company.

So we do our best to make sure that our people know that we wouldn't be here without the people that are driving the business and we hope that reflects when we talk to our customers and it clearly is reflected in the business. I mean we hired 231 people last year and that's amazing considering all the trends across the globe, where the companies were downsizing and collapsing, and Sonar was really great at making sure that we did exactly opposite. And it's only May 28th. We've already sent out 158 offers just this year, so we're on track to double that number, which just shows that we're doing something right here and that we're really happy with what we're doing.

Chris: It's amazing, it really is. Kudos to you and yeah, I love it. I mean culture. You can have stuff on the wall and you can have your sayings, but unless it's really ingrained into the organization, it doesn't matter how colorful the signs are or whatnot, but I do like the connection to code and what you do. So let me ask you Lynne Clarissa shared that one of those values about deliberate is listening to customers, and that's where you sit right.

ADVERT

Chris: You're on the front edge of that. What are you and your team doing? I guess in two ways one, to listen to the customers, but also to stand out and be able to communicate. You know the why sonar over your competition.

Lynne: Yeah, it's a really good question because software development is changing, with AI as a tool, as a practice, as it's pervasive in everything, and we really fundamentally believe that this is a partnership between AI and humans. This is not an either or this is not a one wins and the other loses. It's how do we have that partnership? And I think our customers are in a sort of trial and error phase right now that we are trying to listen to and be there as a partner for them, and how do we help facilitate this for them instead of, you know, be silent in this? How do we facilitate them using AI and using AI effectively, and that's really important for us. So we do spend a lot of time listening to customers.

I would say, you know, there's a lot of noise, and I think that's something that we try to be a voice to our customers on is what's the signal, what's the noise, so to speak, on AI, because it's hard to open anything in tech today and not see a dozen or more articles about AI and what's new, and it is rapidly changing, and so I think for us to be a voice, to have a perspective on that and to help them with a solution, a here and now solution that they can use today, as opposed to things that are maybe today. You know ideas and concepts, but they're more vaporware. We're giving real solutions in the world today to help them solve and do AI, but do it better.

Chris: Good. So you know, Lynne, what you know there's always good times and bad times in business. What are some of the headwinds that you kind of see that you're dealing with as you're trying to? You know, deal with customers, grow the business, whether that's unique to Texas or just general in your industry.

Lynne: Yeah, I think that one of the things that is a challenge today is this need to do constant enablement of our team and education and conversations with customers about changes that we're seeing.

I remember and I've been doing technology with customers for a long time and there were times where you'd sort of have a product or a trend or some innovation and it would be months and years that you talk about the same thing, and now I feel like it's weeks or days, or sometimes even minutes, that things change, and so I think that's a real challenge for our customers to stay up on, to stay educated on, but also for our teams that need to be experts on this, and so it's a real challenge, as Clarissa talked about, how many people we've hired is how do we bring them in and educate them on what we do today? But also, what we do today changes tomorrow and changes the next day and changes the next day, and so I think that's a challenge for all of us in technology today is that the sort of lifespan of technology has gotten so much shorter, and so our focus on educating our own employees but doing that in partnership with customers is a constant uphill battle.

Chris: Makes sense. Clarissa, what about you from the kind of the HR perspective? What are some of the headwinds and challenges that you're facing as you're trying to help? You know you're really trying to feed the machine with people and talent so that they can continue to drive the business, but what are some of the challenges with finding those people and integrating those people?

Clarissa: Yeah, that's a great question and a real problem sometimes, right, because we're not the only company in Texas that realizes how great it is to be in Texas, and because of that, oftentimes we're up against really large organizations that have now made Texas their home and they have compelling stories.

And we have compelling stories, and some of those are larger, really well-known companies, and so it's a constant battle to find really great talent.

I feel like we have a really good position in the market to be able to find those individuals and we have a great reputation, which is very helpful.

But when you're talking to a candidate who has other really amazing Texas companies that they're also speaking to, it is kind of a little bit like a talent war, and because we're growing so quickly, we are trying to constantly hire these individuals, and so the pipeline really never ends for us, meaning we close one requisition and right behind it we're opening it up, so we think we found the best person, and then all of a sudden we're restarting the cycle and every employee that we're hiring here is fantastic, right?

We say that we're constantly raising the bar, and so the expectations are changing, which that we're hiring here is fantastic, right, we say that we're constantly raising the bar, and so the expectations are changing, which means we're constantly evaluating that we are a world-class employer with the best offerings, and so the cycle never ends. But we've been really fortunate to be able to have people want to work with us because they understand what we're doing, and you know we celebrate every time somebody says yes, regardless of their role, because every person that's here is important to us and helping to drive what it is that we're doing.

Chris: So I'm going to give you a tough question because one of the things I talked to a lot of entrepreneurs, a lot of business owners hiring is such an important decision and such a challenging thing to do. No one's perfect right. We don't always get it right. So I'm going to ask you, when you realize that it's not working out, maybe just advice, one or two things that you would recommend to people when you're facing that decision of you realize this hire is not working out, it's time to move on. Any tips that you've learned over the years you know doing HR that you know, even though it's hard, it's hard to do when you're affecting people's life any tips on?

Clarissa: Yeah, that's the worst part of my career, to be honest with you is you know you want everybody to be successful, just like you want your company to be successful. I really my piece of advice would be to really try and do everything you can on the front end to make sure that the person that you're bringing in understands not only the expectations but what the environment is going to be. And, like Lynne said, enablement is really important, and that goes for customers, but it also goes for your employees, and so, kind of trying to be ahead of that conversation before it ever starts it's not always possible but give them the resources that they need. At Sonar, we assign individuals both a point of contact and a mentor and we also put them through an extremely robust training program. We try and check all of those boxes when they're hired to make sure that it doesn't get to that point. But if in fact, the job isn't right for somebody and jobs aren't always right for people and it's a really hard decision we do try and give individuals that attention that they need to be able to help them be on track, whether that's additional one-on-one training or pulling them aside to re-establish kind of the connection between what they're doing and what we need them to do, but sometimes it doesn't, unfortunately, work out for people.

The one thing that Sonar does really well is we do everything in our power to treat people with the outmost kindness. We have really built-in contractual exit periods because we firmly believe that individuals in Texas need that off-ramp period in order to secure their next dream job, even if, unfortunately, it's not with Sonar, and we do everything we can to set them up for success. When people need to depart the company, we give them reference letters so that they have the opportunity to leverage that and we make ourselves widely available to help them secure their next job. And then we do exit interviews so that we can collect that feedback so we can hopefully stop that cycle. Our attrition rates here are really low, so we are very fortunate.

But in the unlikely event that they need to leave, we leave on really good terms. I mean, we hire people because they're brilliant but we keep them because they become part of who we are in the fabric of Sonar and every exit that we have is painful for us. But we really do everything we can to make sure that person's set up for success, and sometimes that's leveraging our extensive networks and sometimes it's putting people into partnerships with other companies where they may be a better fit, because it is a small technology state, right Like a lot of us communicate on a regular basis through agencies and entities, and so the referral network is really strong and we do everything we can to make sure that those people are set up for success, even if it's not with Sonar.

Chris: Well, thank you, thanks for sharing Great advice. It looks like it's very well thought out on the front and back end, which I think is what's most important right being thoughtful and, to your core value, deliberate about it. So, Lynne, I want to ask you a little bit about leadership. I'd like for you to share kind of how you see your leadership style and how do you think that's kind of evolved or adapted as this role in Sonar has grown and your team has grown.

Lynne: I think my leadership style has changed a lot over the years. I mean, I think earlier in my career it was more about how do I get the next step, how do I do something. And I think, as I've gotten bigger roles, I realized it's not about me. It's about what I can do for other people, and so I very much think my leadership style is how do I make people better, how do I leave the company, the organization, the individuals in a better place? Because I was a part of it and play a role in people's careers.

That goes long beyond any given quarter or year in a go-to-market leadership position. I always think about the fact that nobody remembers in 2018, I did the best quarter ever but people remember the person who gave them a chance, the person who supported them when they didn't have confidence, and I think through my career, I've seen that even more and gotten more realization. That's really what leadership is about. It's it, you know, fundamentally I need to deliver the business for this company, so we're successful and everybody can have jobs. But you know, for me as a leader, it's more about the individuals that I get to impact through the job.

Chris: Very nice, clarissa, how about you? And you've been in this role for some time, but how do you see your leadership style, how do you think it's evolved and changed and you know, kind of share that journey with us.

Clarissa: Yeah, absolutely. I mean HR in general has completely changed since I've been doing this in my career. You know it started where we would almost be considered policemen and enforcing the rules and it's really morphed into more of a consultant type of environment, right? So I've found that establishing familiarity with the employees and a really strong partnership with our managers and leaders within the company. I mean, our executive team really thinks exactly like Lynne said, right, we are here to make sure that the individuals who work for us and under us are better than us and I firmly believe that making sure that the people who are driving the business feel heard and that we offer them the transparency that they need and we openly talk about how to be successful here, because, I mean, to be honest, I'm not going to be in this role forever.

You know, eventually I want to go.

You know, live in the Texas Hill country and my best life.

I need to make sure that the individuals who report to me and work under me are able to step in to not only the expectations for how to be a good HR representative for a company, but also to understand what that means and what attributes you need. I think that for me, I have a strong moral compass and leveraging that moral compass through transparency and collaboration and guidance, I try and impart that into every employee. I really think it's important and I've learned through my leadership growth period is to really taking the time to listen and hear what the employees are saying and responding back to them in a way that I would expect, when I was at their career stage, to be responded to, and that's one thing that Sonar's really good at is making sure that everybody understands that their voice is important and taking the time to be able to not only answer things like live questions on an all hands, but to openly and transparently talk about the good and the bad, the growth and the learning, and the successes and the failures.

Chris: Yeah. So let's talk a little bit about how you integrate and, Lynne, I'll start with you how do you integrate this professional life that is demanding, with your personal interests and making sure there's some time for you and family and friends and whatnot? I use the word integration, not balance, because I don't think there's. I think it's a better use of what you do from my perspective, what you do to make it work.

Lynne: I totally agree with integration. I totally agree with integration. I think I have never found balance, but I have found integration and so I think a lot of it is having for me. So I'll first start by saying I'm not maybe the best at any concept of balance, but I do think it's important to have priorities, like for me, exercise is a priority. I think I can't be good at what I do here every day if I'm not fit and healthy and strong and here for the marathon, not just the sprint, and so I try to think of that integration as it's a marathon, not a sprint, and so I have some things that are sort of non-negotiable priorities and that doesn't mean every day, every week, every quarter is equal, but I think it is really important to have the things that are very important to you.

The other thing that maybe it's less advice about the integration or balance. It's more about recognizing that working is about having different chapters of the book, and there's probably chapters where I'm way more balanced, so to speak, in work and way more balanced in life and viewing things as it's not forever, it's one chapter, and that I think when you're feeling guilty about the things that you miss or the things that you didn't get to, having this view that I'm just in this chapter and that chapter isn't the whole book. So maybe that's my advice, for how do I not feel guilty when I'm not doing something or doing something as well as I think I ought to be?

Chris: Great perspective. Thank you, clarissa.

Clarissa: Lynne is also leaving off that. She takes fitness to a new level when she comes to Austin. She rallies the troops here and they all go to a cycling class to not only get out their spent up energy but to also like reward and push through and hit other milestones. So she successfully convinced me to go, but that's something she does every time she's in Austin with the team. I also agree I do not have balance myself. I have more than I did earlier in my career where I was trying to figure out what it means to be a leader for an organization.

My role is a little bit different than everyone else's because people have needs and you never know when those needs are going to occur. I deal with the employee and not necessarily the product, and so you know. Sometimes there may be an emergency that occurs on a weekend, or somebody may need a clarification on something, or people just might need help, and I need to be there when those individuals need to be there. I've established a really good cadence and balance for offsetting. You know, if I need to be there for an employee on a Saturday at 11 pm, to being able to balance that with something during the week I'm a big fan of even though our employees work really hard grabbing people and dragging them out for coffee just to not only reset my own self but to be able to help them reset, and pulling people into different environments and cultures, and acknowledging to people that I know that I don't have really solid balance and that don't do what I do, what you need to do, and giving them the tools to be able to do that. It does help.

Lynne and I both are lucky to be able to travel to multiple offices, so we have forced downtime sometimes when we're on airplanes and so we do have those reset periods, but we're able to hit the ground running when we start again and each market's different, so we try and do the best that we can. I try and do the best that I can. Sometimes I'm great at it and sometimes I'm not great at it.

Chris: Well, I think that's all you can do and I think the biggest thing is knowing that you're not always going to get it right.

Yeah, we put a lot of pressure on ourselves, and maybe you know, so does the rest of the world and just knowing that it's going to be okay, your intentions matter a lot, and so you know that. So, look, I really appreciate the two of you sharing not just a sonar story but a little bit of your own. You are on a Texas podcast, so I do like to end this way. I'm gonna start with Clarissa. I give Lynne a little bit of time. I know Lynne just travels to and from Texas. But, Clarissa, do you prefer Tex-Mex or barbecue?

Clarissa: Definitely barbecue.

Chris: Okay, no hesitation I love it.

Lynne: Yeah, yeah, a hundred percent barbecue.

Chris: Love it. Y'all agree on that.

Clarissa: I'm going to book us a lunch, Lynne.

Chris: Favorite barbecue place in Austin.

Lynne: Franklin's.

Chris: There you go, there you go. She reads the press clippings, all right. Well, ladies, look. I really appreciate you taking the time to come on the podcast. Congratulations for all the success you're having with Sonar Love, that the company chose Austin and Texas to put their stake in the ground and just pleased to see it going so well.

Clarissa: Yeah, us too. Thank you for having us. Yeah, I really appreciate you taking the time. Thank you so much.

Chris: Okay, McKenzie, cut it there. Great job, ladies. Come on, Katie Great conversation.

Lynnee: Love to listen in you made it nice and easy, chris. Thank you, yeah, no, you're welcome.

Clarissa: If you decide to leave Houston and head up to Austin, please call us Lynne, and I'll take you to barbecue.

Chris: Deal and spinning class.

Lynne: And spinning class. What are you?

Chris: like what's that?

Lynne: Tex-Mex or barbecue.

Chris: Oh see, it's hard because I'm born and raised here. So I usually say I mean if it's like when I'm gone, the way I have to gauge, that is, if I'm out of town in a different state for a period of time. When I come back, what's the first thing I really want? And the truth is it'd be Tex-Mex. Yeah, blending it right, so you have brisket tacos and things. So there's right down the street from our office we have a barbecue place called the pit room and they own a tex-mex next door and they use the barbecue so you can get like brisket nachos and brisket tacos yeah, it is delicious well maybe we'll come visit you, because that sounds lovely.

If you're ever in houston holler at me. But yes, I was like with Lynne. I'm a I'm kind of a fitness freak, so spinning and pilates and okay, okay, but I'm like you, I have to and I have to do in the morning where it doesn't happen. But if I'm not taking care of myself, I don't have. It takes a lot of energy to do what we do.

Clarissa: Yeah, I feel like you're not I'm the local pilates girl, so she can take you to spin and I'll do pilates with you, and then we'll all go former I do, reformer I do reformer. Yep, yep, it's a lot harder than it looks, but it's 55 minutes in and out and then you're done harder than yeah, you're right, those machines make it look easy.

Chris: It is nothing. It is not anything close to easy not at all, but yeah, so we're good, but seriously love to stay in touch. So yeah, if I'm in Austin I'll give you a ring, and please do if you're headed this way.

Clarissa: Yeah, we'd love that. We're right downtown so we'd love to host you. So you let us know when you're in this area and we'll let you know when we're in yours.

Chris: Thank, you All right, sounds good.

OUTRO

Special Guests: Clarissa O'Connell and Lynne Doherty.

In this episode of Building Texas Business, I speak with Brian Birdy, the CEO of PMI Birdy Properties and a regional developer for Dill Dinkers. Brian shares insights about managing his family business, which his father started in 1979. He discusses the complexities of succession planning and how involving family members can strengthen the business for future generations. Brian's latest venture, an indoor pickleball facility, highlights his ability to identify emerging trends and foster a unique business culture.

We explore effective strategies for business growth as Brian emphasizes the importance of a solid foundation. He talks about the need for a strong team, comprehensive training, and well-documented processes to navigate unexpected challenges. Additionally, we discuss the hiring landscape post-COVID, where Brian advocates for a proactive approach to recruitment and the importance of adapting to new employment trends.

As we move into the topic of franchising, Brian shares his experiences with Dill Dinkers and the potential of using repurposed industrial spaces for pickleball courts. He reflects on the benefits and challenges of setting up a franchise in this fast-growing market. His connection to San Antonio adds a personal touch, as he expresses his passion for the local community and its cultural vibrancy.

Show Notes

Previous Episodes

About BoyarMiller

About PMI Birdy Properties

(AI transcript provided as supporting material and may contain errors)

Chris: Brian, welcome to Building Texas Business. Thanks for taking the time to come on the podcast hey thanks for having me.

So you know, let's dive right in and talk about some of the things that you're doing as an entrepreneur and business owner and just introduce your companies to the audience.

Brian: Sure. So I'm the broker and owner of Birdie Properties, which is a real estate company that specializes in residential property management. It has been in business for over 46 years. My dad actually started that business back in 1979. I've been running it and working at it and eventually running it since about 97 and have grown it to one of the largest residential property managers in South Texas, learned a lot of lessons in growing that business and the newest adventure is Dilldinker's Indoor Pickleball, which I'm sitting in, and I'm very excited that we will be opening our first location here in about a week and a half.

Chris: Well, that's great. So two full-time jobs, it sounds like.

Brian: Yeah, Well, the other one's a family-owned legacy business. It's three generations deep. Like I said, my dad started it. My brother and I both worked in it. I've owned it and run it for 20, 28 years and currently all of my three adult children and my daughter-in-law all work there and do the heavy lifting. With a little bit of guidance from me, that gave me the ability that could run effectively without my daily requirement, gave me the ability to actually continue that entrepreneurial spirit and try something completely different, which is indoor pickleball. I saw a true need in my city for this. There wasn't anybody delivering it. I saw it as an up and growing and when I actually started on it, less people knew what pickleball was. In the last 18 months it has really come to the forefront and so I got on. I started riding the wave at the right time and I hope it just keeps rolling, yeah well, it's certainly taken the last couple of years.

Chris: It's taken on like a life of its own, it seems like. So let's go back to, I guess, Birdy Properties and maybe the unique part of what it's like in a family business to do the succession from your dad, who was the founder, to you and your brother then taking over that business. What were some of the maybe the pain points and lessons learned about doing that and what maybe advice you might give to someone that's in the process or thinking about it, of what to do or not do?

Brian: Yeah, running a family business it's wonderful and it's tough, both hand in hand. The wonderful part about it is their name is on that business. Their future is tied into that business. Their commitment generally if they really care about it is they're a lot more committed than just an individual employee. But at the same time it's problematic in that you can't separate yourself from business. Family meals are filled with business. Taking an entire family vacation becomes almost an impossibility. And then succession is an issue.

I bought the business from my father and it was clearly me. I own it. So my brother continued to work there but was not in ownership of it. That has its own problems. We found a way for him to actually build a business out of this and he's actually gone out on his own, is specializing in short-term management and is running his own business now, and so that was a way to kind of figure out how that could work. So he is the owner, sole owner, of Birdy Vacation Rentals.

But I've got three kids that work for me. Each of them have unique qualities. They own all own a very important part of the business and they really can't survive without them working together, which works great now, but it's going to be. I'm going to wonder, I keep wondering and trying to figure out how, what is the best way to pass this on? And I don't have the right answer for it, but continuing to work at it, you know, giving them all individual pieces that they could own and be the masters of, and then by doing that, everyone needs each other kind of helps with that whole process. You can't no one of them can survive without the others.

Chris: Well, it seems, if that's the case, right then you've set it up well for success because that fosters that team environment and team mentality. And you know we love talking about culture. So obviously you have the unique relationship with your children. How have you tried to take that beyond the family relationship with the other employees so that they feel the same engagement with the organization and tied to the organization's success?

Brian: So we've gone through lots of that and growing and basically anybody who works for us can see that. I mean their last name isn't Birdy, they're not in the succession plan but we treat everyone within our business as if it was a big family. We believe in family. We believe in quality time. Individuals who work for us recognize we want them to do a great job for us but when they need time, when they need something they know they can ask for it, they can get it and just building that kind of culture has allowed us to have.

Number of people who have worked for us for 15, 13, 12, I think is my current people that are out there have been here for a very long time. They're part of the family even though they're not. You know, their last name doesn't say birdie on it, but we work really hard in building a core that can. You know, property management is a tough business. I've said all along one of our core values is that we're going to have fun, and so one of the things we've always built is if we can have fun doing the worst part of that business, then we got it made. So we have a lot of fun when we're doing the fun parts of the business and when we go out of our way to make sure people are going to have fun. But we also find ways just to have fun and to really own that. There are tough parts of that business also.

Chris: Sure, well, true for any business, right. There's always, yeah, the piece that you don't enjoy doing. But you know you have to right, it's a necessary piece but it may not be the most fun. I think you're right. If you can bring joy and fun into that, then the rest should be easy.

Brian: right, because it's the stuff you like to do and want to do and, as I think about, I've been doing that for 28 years and I love going to work there. I love people that I work with and even though it's in a very tough and stressful because I mean, at times I have to evict people from their homes, I mean that isn't something that's fun, you know. But it has encouraged me that I'm waiting to see how much fun is running a pickleball facility going to be, where we have a core value of bringing joy to everyone through the sport of pickleball. And I'm like, if I can have fun doing property management, I think I should find it a little easier to have fun running a pickleball facility. But I don't know yet. We haven't opened our doors yet, we're going to find out, but it's. I mean, I'm just it feels like it's going to be fun, but you know, I don't know what, I don't know yet.

Chris: So going back to Birdy and property management is anything innovative? Or you know how? Has technology or innovation kind of helped you be more efficient in what you do and maybe more profitable?

Brian: Yeah, so we've. We have challenged ourselves to chase technology. You know, if you go all the way back to probably, I mean, and we've done this for a long time and we've had a website since 1998 when it didn't do anything and most people didn't have it, I mean we have a five letter URL. I mean we are www.birdy.com, you know, and people have wanted to pay a lot of money to buy that name, but it's just something. Fortunately, my dad said I think this might be something someday, let me just get our name now. He was lucky, he did that. But from that we've continued to chase the changes. Every business has had major changes.

I will tell you that, coming out of the 07, 08 mortgage industry collapse and all the problems that happened, property management got brought way up into the forefront and technology, of course, coming on strong at that time saw this as an open lane that nobody was in and they have been chasing after us like crazy. And we have said all along if we want to continue to be relevant, if we want to be a hundred-year-old business, the only way we're ever going to get there is we have to embrace technology, embrace change, figure out the ways to do that, race to it, understand it and apply it. You know however that is, and so we've dramatically changed our business from where we first I mean when we first started, you know everything was on paper. It was all in a folder. The folder was in a cabinet. You know, you met people face to face. I mean, everything has changed and you know, at our last national event, the big thing that was there was all AI driven.

Not only have we used technology and we use computers and we've automated some things, but now we're having the computer starting to figure out what can they really do for us in the industry, and I see that being big changes coming forward as to what can it really do for us. Coming out of COVID, we learned we can do a lot and we don't really need an office to do it anymore. We can have remote team members. We can do a lot on Zoom. We can do everything with computers.

I think AI is just going to push that, and that even runs into this business. Bill Dinkers has changed a lot and it's only a couple of years old, but it's incorporated on court cameras that film the sessions for the players, and now that company is building AI, so it's going to be able to tell them automatically. You know some statistics from their match, you know counting things for them and I'm like, and so again, very early stages open landscape that technology and AI development is just stepping into, and I'm just curious and excited to see what can that take us to. I mean, because that's the future of our business, all of our businesses.

Chris: Oh for sure, I mean, technology is not going anywhere. I think I had someone tell me one time never bet against technology. Technology always wins right Eventually it continues to evolve and you may not be an early adopter, but you better pay attention and learn how to integrate it sooner rather than later, or you're going to get left behind.

Brian: Well, right, and it'll show you ways that you can like. We can manage more properties with less people. Because of technology, we can have individuals working for us now all over the world and we have been embraced that for a long time and we're about a 50-50 business. Half of our employees are here in town. The other half are all remote team members and primarily in Mexico, because I'm in South Texas, so I need people that can speak Spanish, and what greater way to have somebody work for me whose primary language is Spanish? So that part has been a significant change in the property management side of it. And that comes with technology. Right, because they have a computer. They can do everything. They have a phone line, so you call my office and you hit the phone. It's calling them Because phone is now what? A computer? Everything is a computer. If you can learn how to adapt the changes in your business to automation, you find ways to grow and to make money when you're doing it right.

Chris: So you mentioned the 08 kind of market crash. What were some of the lessons you learned? I think that's a pretty important or severe impact on your business business and we always learn, kind of through some of those crises. So what were some of the things that you learned, maybe about your company or, more importantly, about yourself that kind of helped pull the company through to continue on a path of success?

Brian: Well, if you think about it, most people saw that as a crash, as a problem. In my world it was actually a good thing. Besides the fact that people were losing their houses to foreclosure, that was certainly a negative. That didn't help me at all. But what came behind that was investors, and investors were buying those properties and turning them in to single family rentals and they needed management behind it. People who wanted to hold onto their house but had to leave them could not sell them Again. Another thing we were ready for growth. We were prepared for growth and we were not scared to grow as fast as we possibly could In those years. We doubled in size in both 07 and 08. And I think a lot of that was we were preparing for growth and then something happened that we didn't expect. But we were ready and I don't think anybody else was, so we benefited from that. We exploded over about a two or three year visit and really skyrocketed us up that. We've never lost that position since.

Chris: That's amazing. So you talked about you were preparing for growth before those events happened. What was it you were doing to be preparing yourself for that growth?

Brian: Making sure I have the right staff, all my training, all my processes, systems, policies and procedures. You know, you, when you first start and you're an entrepreneur, you have this great idea. You know how to do it all in your head, you make sure it can work right. What a lot of entrepreneurs aren't great at is writing it all down, systematizing it all and teaching people how to do it. And so, as you're growing, you're just throwing things trying to fill in these holes and you have to learn there's got to be a better process to your business and growing your business, and an individual who is forward thinking and really crazy ideas and just really interested to go do all these wonderful things can come up with some great stuff, but they're not the person that's going to carry it the long-term, step-by-step and so, understanding what you're good at, learning who you need around you to fill in those pieces where you're not and luckily for me, you know I have children who are from me but not really like me and so and they're not really like each other and so, collectively, the four of us and others that we've built into that start to create more of a complete package, and we learned and we're continuing to learn. We are forever changing and we are forever growing. It never stops, and that's, I think, it.

I think at that time, what we wanted was I wanted to grow. We were talking about growing and I was trying everything to be visible because, remember, technology hadn't taken over. You know, people weren't finding you online. You had to. You know, I was still paying for ads and newspapers and the yellow pages because I wanted people to find me. But I found technology earlier than anybody else.

I found a program called allpropertymanagementcom when it first opened and it was the first marketplace for property managers on the internet and I raced to it. I was the only one there in 2007. And that's when everyone started freaking out what am I going to do with my property? They looked and they found me, and that was a big part of so just the little steps like that was like not, I mean, that was an investment, I was paying money to do that, but I thought there would be a payoff.

I didn't expect the tremendous payoff I got, but it really was a lot about just making sure you know what you have around you and a lot of times, what happens is we don't hire for growth, right, we want growth, then growth happens and then we get squished by the work. Everyone gets overworked, everyone gets stressed, nobody's happy, culture starts to get hurt and you can't sometimes, can never hire fast enough to catch up to train them all. So, knowing your business, watching closely, investing in growth by investing in your people, those are some of the lessons I learned because I did all that wrong at first and I suffered because of it and I've learned to do it differently because of that.

Chris: Yeah, that's a beautiful point. I mean to your point about if you start to grow you haven't, excuse me, hired for it then you start making hiring decisions out of desperation and that's a recipe for disaster, as opposed to being able to follow that process. As you mentioned, that process is in place, that you stick to that. You follow that. You're always looking to evolve and change and tweak as times change. But if you're behind the curve, if you will, then it's hard to catch up.

Brian: You also have to change with times. I mean when you can be hiring, when you don't need to hire someone, you're not in a hurry. During your interview process you don't settle for okay, this person's good enough, right? You're like, if none of them are good enough, well then they're none. Keep looking right. But if you're in a hurry, if you're in a need, then anyone close you're going to take and it may not be a good fit for you. And I would tell you, before COVID you had people in large numbers applying for jobs, but after COVID that changed dramatically and it became a point. I mean I used to say if I could get 10 people to interview, five of them would show up, or maybe six, and one or two or three potentially could be good opportunities there and you'd be able to windle it down to possibly one good quality candidate. After COVID you were lucky if one person showed up, and I don't think that's really changed dramatically even yet today.

Chris: That was my question. It feels, like in the last, say, 12 months or so, there's starting to be a little bit of a maybe it's slow, but a swing back towards people realizing.

You know you hear the bigger companies saying five days back in the office and you know that you know where we had the quiet quitting going on in 21, 22. It seems to me there's a little less of that and it's coming back. There are maybe more people out there and you hear that you know new college graduates are having, you know, really difficult times finding jobs because it seems like it's tightening a little bit Well.

Brian: Luckily I'm in a season in which I've not needed to hire and I've got everything placed out right, and so I hope when I start hiring again in that space I do see that change, because I've noticed a big difference there and even had to change my whole process of what's really important when I interview people I mean I have put you know the number there are two things that are at the top of the list, and that is an overwhelmingly positive attitude and an undeniable desire to work. And if people come in with those two things, I can take them from there with anything else, because I can't give them either one of those. I can't culture that to anyone, I can't teach that to anybody. They have to have those two things If they have those, if they have those two things clearly, and you can find figure that out pretty quick.

Chris: So I have a chance to identify with that, because the words I use are we look for effort and attitude Right. And I like your desire to work. You would think that would come natural, but you and I both know it doesn't. You're interviewing people. They just want a job sometimes or a paycheck, and they don't really have a desire to work or work hard. So I agree, you have to have an interview process that can kind of figure that out.

Brian: That's true and we've, and that's something you have to learn and experience and get through and continue to tweak because, as you think you have the best experience, your market of applicants change and then you have to change and adapt with them.

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Chris:So we kind of look at the landscape out there. What are some of the headwinds that you either are dealing with now or that you think may be coming around the corner, that you're trying to prepare for to kind of not let them slow you down?

Brian: I think that in the residential property management space, when times are good we do well, when times are bad, we do even better. So generally making sure that we're running the best business that we can, that we're providing what people need, figuring out a way to be being better Everyone wants to say they're better, but being better doesn't really necessarily draw anyone's attention anymore because it's like are you really better? You're just saying you're better. But when you're different and you can show someone why you are different, that's what really changes it, and I and so we focus on how are we different, why are we different, how can we be different and what differences are going to be important in the next five years that may not have been important in the last five years.

Chris: That's really good. Yeah, I could see where and I would think even the lots have been written about it how difficult it is for people to purchase a home. Now, right, the interest rates, one thing, maybe the lack of accumulated wealth or down payments because of the lending markets. I can see where that would boost your business.

Brian: I would tell you that in 2024, nationwide the market said that rental markets should have been skyrocketing and doing well, but for a variety of reasons it was not the best year. 2025 has started out as a much better year. Last year was a rough year on most residential property managers and when we look at that it came back to a tremendous amount of apartment complexes that were built coming out of COVID that opened and it drew a lot of the market space away People not buying, not moving, families coming together in one location, which reduces right. But we've seen a big change this year at probably one of our busiest first quarters in a while, so we're hoping that just continues.

Chris: Very good. So, shifting gears a little bit Sounds like a company that you love. You said you love to have fun doing it. I guess we're in it for most of your life, bought it from your dad. All things going well, Kids are in it, Kids are thriving and against that backdrop you decide to step out and take on the pickleball business, which there's certainly some competition there. Maybe San Antonio's market was a little lacking. There's certainly some competition there. Maybe San Antonio's market was a little lacking, but there's all kinds of people doing pickleball courts now. So what was it that inspired you or drove you to make that decision and take on that risk?

Brian: Well, so I started playing pickleball for the first time coming out of COVID in 2020, when our mayor said, okay, you can go and gather, but it has to be outside. And so there was a tennis place that had converted on a tennis court. Still, they converted and made these makeshift pickleball and I went out and said, hey, this is a lot of fun. Eventually, chicken and Pickle opened in San Antonio. I went inside to that and I thought, hey, I really like this, and started playing there. Quite regularly.

My wife and a non pickleball related injury broke her ankle and we were out for about a year. When I came back one year later, everything had changed. It was almost impossible to book a court. The age of the players had dropped 20 years in a year. It used to be forties and fifties and I walk in and now it's twenties and thirties and I was like, okay, something has really happened here.

So I did a lot of research, looked at all the numbers and then I started saying, okay, we don't have enough courts and we don't have any indoor courts, and I was like I think we could do a good job at this. I was first trying to find a place to go play, and what it led me to is there's a need. Maybe I can solve that need. And then, in researching it in the state of Texas, san Antonio was lacking in indoor courts In the country. We're doing awful. Houston was the only city in Texas even on the radar for the number of pickleball courts, and the number of indoor pickleball courts they have more than anyone in Texas. They have more than almost any other city in the country. So that city had figured it out and I'm like we hadn't yet. And I'm like we hadn't yet and I'm like, hey, if you're going to do something and you're going to be different, one of the greatest ways of being different is be first, because if you're first, you're different. There's nobody else, right? And so so I dove in, found a great Dill.

Dinkins is a national franchise and I believed in what they put together and and so I'm one of their first franchisees. I'm going to be opening up my first club here in about 10 days here in San Antonio, and I'm a regional developer, so I have the right to develop up to 20 clubs. Whether I open them or help somebody else who wants to run their own pickleball location here, I will be supporting them and getting them open, and I can open all of my clubs. Other entities can open all theirs.

There will not be enough pickleball, because if I fill all my clubs up all 20 clubs open and they're all completely full that would only represent a fraction of 1% of the Bexar County population, and so there's room for everybody and there's room for growth. And that's kind of one of the reasons why I got into this is that I'm like hey plus, I love it. I have so much fun, and I'm going to tell you what running a property management business has been a lot of fun, but I really hope that running a pickleball business is going to be even a lot easier to have fun. We'll see. I don't know yet.

Chris: Yeah Well, in 10 days you'll start to figure it out.

Brian: Well, that's free, that's free week, everyone's coming for free, so they're going to love me for at least a week, for sure. We'll see what happens after that.

Chris: Good strategy there. Yeah, I know. Look, we've worked with some entrepreneurs and developers here in the Houston area doing this right, developing pickleball venues with the bars and the food service, and that's where they did the market research. And even in Houston it's interesting to hear your numbers on the covered courts in Houston, kind of leading all cities but there is a lack of courts in light of the demand especially, you're certainly private clubs have taken converted tennis courts or extra space where they put in pickleball courts, but if you're not a member of that club you don't have access. And so for the general public to have access, things like what you're doing and chicken, chicken pickle, et cetera, and some of the maybe non-national brands just worn off local things there's still a ton of demand for that.

Brian: Yeah, if you look at it, lifetime Gyms and LA Fitness have both decided they're going away from basketball and they're going all in on pickleball. And I talked to their national developer and I said why are you making this change? And they said well, basketball has led to altercations and fights and problems and pickleball equals new membership and so they're all in and you can see, most of them are converting them. I have a couple of Gold's Gyms in San Antonio that have converted into pickleball in their courts. It's just there's such a need, there's such a desire. A lot of people say they find a way to play, they'll play anywhere. A lot of people haven't played because they say it's too hard to find a place to play. So we're hoping we can be part of the solution to that and start giving lots and lots of options for people to come out and play and see how easy it is, how fun it is.

The community that's built around this is unlike other sports is the community that's built around this is unlike other sports? It is. It is a unique game in which it is the most gender equal and age equal. I can go out on any given day and lose to an eight-year-old or an 80-year-old, and both of them could be a male or a female. It doesn't matter, because this is. It is the equal sport amongst all sports.

Chris: Yeah, well, I'll say you know, given the timing when you're opening and the fact that you know we're in Texas, being covered courts is going to be a nice added bonus, because I don't think you want to be in the middle of summer outside on a pickleball court for too long.

Brian: Well, they've been doing it for years. What I have to do is get them in here so they can see, and that's the thing about being different. So some things that are different with us is we have pro cushion courts. They're all individually fenced. We have special LAD court lighting that's designed specifically for pickleball. Of course, it's not windy in here. There's no rain, there's no heat, there's no humidity and, as you can see behind me, all the walls are black in the playing surface, and that's so. When you're standing on your court and your opponent hits the ball pops, you know it's coming outside. You don't see that. You got wind, you got heat, you got sweat, you got movement, you got craziness, and so that's where we've dove into being different and we're hoping it'll pay off.

Chris: No, all true. I mean having played myself. You're right, if you're outside and depending on where the sun is, you may, it's sometimes hard to see the ball.

Brian: Yeah, true, not in here. Perfect lighting, perfect temperature, perfect courts. And the one thing I get annoyed I'm a spoiled. I'm a pickleball snob. Now. I cannot stand playing on a court where the court right next door is not separated and their ball keeps coming into mine. I'm like I can't even play that way anymore. I'm, I've become a. I've become a pickleball snob. I expect to be able to get on my court and play my game and not be disrupted by anybody else.

Chris: There you go, as every man and woman should have a right to right. That's right. So so you kind of bit this off as a franchisee. Let's talk a little bit about that. What are some of the things that you learned about that process that maybe you weren't expecting that you could share with some listeners, and maybe a lot of people look at franchise opportunities.

Brian: So I tell people all the time. So I've been involved in franchising in a couple of other ways. I went for about a four-year period and worked for a nationwide property management franchising company called Property Management Incorporated and I was up at the corporate level seeing. So I learned about franchising itself and people go why are you doing this, why should I do this? And I would give them reasons why. If you're already running your business, you already know what you're doing. You don't need a franchise when you're starting out from brand new and you have no idea what you're doing and you're not really sure how you're going to do it. You have to consider that Anyone can do the business on their own right. Even me, I could have opened this on my own. But do you know how much stuff I didn't know about pickleball that I learned from my franchise organization and the attention that it has drawn me? You have to figure out when that might be right for you. I think that there's been a lot of benefit of doing that. But you got to examine them all. I went and looked at every existing franchise when I started to do this Now. Since then, there are five new Pickleball franchises available and I'm sure there'll be five more in the next six months. So there are a lot of choices.

I looked at them all, I checked into their history, I interviewed, expect what they need to do, and then I went and did a discovery day in Columbia, maryland, to find out what was Dill Dinkers all about, and a big part of it is who is the leadership? Who's going to be guiding you? Who are you going to be working with? And I absolutely loved the people that were involved, and that's a big part of this. You're going to be in business with them at the same time, and so this made a lot of sense for me. They were structuring in a very smart way of doing it, and they're the fastest growing Pickleball franchise that's out there, and they've sold 27 regions across the country. They've made great strides at improving everything that we do the play site cameras that we talked about earlier, with the AI involved that's something that's new. The pro cushion courts that's new from when we first started, and now all of our pro shops are powered by Pickleball Central, which, again, is also something new. So when you look at a franchise, it's like, yeah, they exist, but what are they doing to evolve? What are they doing to be different, because you're going to rely on that and work with them to show them how else they can be different.

I decided this was the way for me to go and by being a regional developer here in town, I have my first one opening, I have my second one already under construction and I've got 18 more to go, but I'm probably not going to open all 18 of those. So there are opportunities right now and the way Jill Dinkers is, they have your corporate staff, but I'm the local representative. I'm here to help develop anyone locally. So anyone who wants to open one here has me helping them, and I've already gone through all the pain and suffering of what does it take to open a place.

I know all. I know what you need to do to have it happen. They taught me what they knew. Now I've experienced here locally in San Antonio. I know what's going to happen here. Those are some of the advantages when you start looking at franchising and say, hey, I want to do a business, I don't want to do it alone, I don't want to start and it's tough. There's things you've got to know to be successful right out of the gun and you may not know everything on your own, it makes sense.

Chris: And I said there's the franchisors got to show that value right.

The why you're going to be making payments and getting the benefit of some of their things. It occurs to me too, one of the advantages, at least to what you're doing with these indoor courts and just kind of looking behind you is that you could take advantage of some of the big box locations that have been abandoned right that there's every city has those where there was some store that has either now gone to a bigger complex but left that space behind it looks like that's what you can kind of take advantage of from a real estate perspective.

Brian: Right and I figured, with my real estate background, that this was going to be a piece of cake. But let me just tell you, san Antonio is a healthy city. We don't have big boxes just sitting around empty. Finding the location was the biggest challenge for me, and that isn't true everywhere else. That's why I'm franchise number one, but I'm not the first franchisee to open, because there are people who found it much quicker. The gentleman up in Pennsylvania went on his very first visit and found two locations and has opened both of them. One of them has 17 courts inside with 75 foot ceilings and no columns. Wow, I think it was like an aircraft hangar at some point. It was an indoor soccer facility for a while and it is like the perfect layout for indoor pickleball. But he found it in one visit, found one landlord, signed two leases and opened them both up.

I have been to hundreds of places because I have to have the right hype, I have to have space between columns. I got to have air conditioning, I got to have bathrooms and I got to figure out, you know what's it going to cost to convert the place? And in San Antonio we don't have a lot of space just sitting around empty. Well, that's a good problem, it's good, it's good for the city. I mean, I found this one and I found my second one and I'm continually looking and there will be more opportunities and there will be more opportunities and there will be.

Yeah, I think the strange thing in my city is we have probably the most vacant space in our city is industrial space. There's industrial warehousing all over and it's all empty and they don't want to talk to me yet. But they're going to one day they're going to say you know what I'm tired of being empty. Maybe we should talk to these pickleball guys, because it's the perfect layout giant empty buildings just sitting around empty. One day, when I can start turning them into pickleball, then the life's going to be real good.

Chris: For sure. So just real quick, though, I want to ask about you kind of just as a leader right, your leadership style and how you think that's evolved over time, and kind of what you've learned maybe about yourself and about leadership in the process, in that journey.

Brian: You know I learned leadership pretty young. I mean I go back and think about it and say you know, my dad was in the military. I was a military brat. We were all part of scouting. That was you start learning leadership and scouts right. I joined the Air Force myself, I served time in that and that the leadership is pretty well defined there. I mean, you know you can grow into being a good leader through that process. But in the military leaders comes with rank. Sometimes you don't really you haven't earned it, but you get it because you wear the rank and there's a difference in just knowing and understanding. And in that I learned I'm like if I want to be a leader, I've got to earn the right to be the leader of other people.

As I started growing my own business, the challenge was I know how I want everything done. I like it done. A certain way. Most entrepreneurs are type A personalities we got an idea, we're going to run with it, we want to do it and no one could do it as good as we can. Well, you're going to be awful lonely and awful small if you think you can grow business all by yourself. So lesson you have to learn is how do I surround myself with people who make me better, who fill in the gaps of the things I'm not, and how do I let go and let them lead? So I've learned to invest in my staff and invest in them being leaders and letting it go.

And remember, if you get from point A to point B and it doesn't cost any more money and it isn't illegal, does it really? And it doesn't use up any more time, does it really matter if they got there different than I would have? And honestly, it doesn't. But that's a lesson I had to learn. I was not very good at it, so my wife and my kids pulled things out of my gripped hands because they were like you got to let this go or we're never going to grow. And then you look back later and go wow, I'm so glad I did that. I mean, they're doing a better job at it than I ever did.

And then you just have to make sure you're continually watching over what you're doing right, building good systems, checking on what you're doing, investing in your people, which means spending money on them, spending money to educate them, spending money for them to go out and try things, and also, don't be scared to try something. It's probably one of the biggest lessons I've learned Don't be scared to try something new that no one else has tried, because they're not all going to work, and I can tell you some of mine that were absolute failures. You figure it out, you go eh, switch back, we're done. But the ones that didn't work grew the business, made me money right, made us more efficient, and not being fearful to just change, adapt and be different is a big part, and when your staff sees that you're willing to do that and you're encouraging them and you're investing in them and you're giving them the ability to lead, you'll be surprised what they can do for you.

Chris: Right. Well, so first, thank you for your service and second, yes, I think part of that for me is you can't be scared to fail, nervous. And second, yes, I think you know part of that for me is you can't be scared to fail. Uh. So if you don't take any chances, you won't learn, you won't grow. So you've got to be willing to do that and be observant of is it going well, is it not? Do I need to pivot, do I not? For your business and for yourself? Right?

Brian: and you have to listen to your staff around you, because at certain point when you grow a business effectively, you start to get out of the day to day, and so you've got to check on it, you've got to hear from them, you've got to build on it and you've got to give them the ability to tell you maybe it is time to pivot, maybe we need to do something different, maybe there is a need out there, even though you didn't recognize it. They need to know. They can bring it to you and you'll listen Doesn't mean everything is going to change, but you give them a chance to speak it up and then it's out there and then you talk about it, and we do that regularly and it really changes the business when people have the freedom to bring up ideas and not be afraid of it.

Chris: So let's move from the business side of things to just personal. Tell me what's your favorite part about San Antonio and why you decided to call it home.

Brian: I moved here with my dad. He got stationed here when I was 13 years old and this has been my hometown almost ever since I joined the Air Force and I did leave here and I missed it all while I was gone. There's something about the community here in San Antonio the people, the events, the city that I missed. I've lived in other places. I don't think I ever missed not being there as much as I missed being here, and so this is truly my hometown. I love the city, all that we have going on, the fact we continue to grow and get big but we still feel like a small town Never and there's something for everyone. There's everything you possibly can want to do. You can do it here. I mean, we're in the middle of Fiesta. It's been going on forever, but there's still something in Fiesta that I still probably haven't even done. As many times I've gone out and done things and it's exciting just to be involved in that.

I've been a Spurs fan since I moved here. I actually saw the Spurs as soon as I came back. We were coming back from Italy, moving to San Antonio, and the Spurs. I was 13 years old. The Spurs were in the Eastern Conference Finals against the Washington Bullets and they were up three games to one and I watched them lose the next three games and then not, and then I followed them and we didn't make it back to a conference championship for 20 years in 99. And then the next 20 years was a good payoff. We had a lot of fun and won a lot of games.

Chris: So this is my town.

Brian: I love my city. I love all that we do here.

Chris: Yeah well, it's definitely spent enough time there to get a feel a very unique and welcoming culture and vibe. You mentioned Fiesta, but I don't see any badges on you.

Brian: They're on sale at the front counter. Gotcha yeah, I actually was we made one, we've made one, we've traded some. A few people have bought them and it's a fun part to be part of that when you run a business in San Antonio.

Chris: For sure. I've had the benefit of being there for a week on business during Fiesta and learned the whole thing about the badges and the trading and still have them with me. That's a lot of fun.

Brian: Yeah, last weekend one of my managers took them all, went down and was down there handing out badges and also handing out flyers about our business Just getting the word out and getting connections to both people and other businesses. It's a unique time when everyone's just willing to talk to you and get face-to-face and everyone wants everyone else's medals. The Fiesta medals are kind of a cool thing, yeah for sure.

Chris: Okay, last question Do you prefer Tex-Mex or barbecue?

Brian: Tex-Mex for sure. I'll tell you this in traveling the country. There are other places where you can get barbecue. Maybe not quite the same, but there's some good barbecue out there. There is no good Tex-Mex anywhere except here.

Chris: Yeah, yeah, I think it's a pretty accurate statement. Well, brian, I really appreciate you taking the time to kind of share your story, both on the property management side and Pickleball. Good luck with the grand opening coming up and look forward to seeing you guys succeed in that industry as well.

Brian: All right, well, hey, great Thanks for having me on Great conversation. All right, take care. All right, bye, and there we have it.

Special Guest: Brian Birdy.

In this episode of the Building Texas Business Podcast, I sit down with Jacob Robinson, the founder of Dig World, a construction-themed amusement park. Jacob's journey from owning a commercial cleaning business to launching a theme park was inspired by his son Pierce's courage in overcoming a severe illness. Jacob shares how this personal experience drove him to create a space where families can make lasting memories by operating real construction equipment.

We also explore Jacob's unexpected invitation to appear on Shark Tank, which initially seemed too good to be true. Jacob describes the rigorous preparation process for the show and how securing a deal with Robert Herjavec provided significant exposure and credibility for Dig World. This experience sparked interest in franchise opportunities nationwide, propelling the business forward.

However, Jacob's path has not been without challenges. He reflects on the operational setbacks faced during Dig World's grand opening and the importance of resilience in entrepreneurship. Jacob emphasizes learning from these failures and the need to be patient and ready for success.

Throughout the episode, Jacob discusses his leadership evolution, focusing on servant leadership and building a passionate, customer-focused team. He highlights the importance of creating a culture of trust and creativity to ensure a safe and memorable experience for all visitors. Jacob remains committed to expanding DigWorld while offering an affordable alternative to traditional family outings.

Show Notes

Previous Episodes

About BoyarMiller

About Dig World

(AI transcript provided as supporting material and may contain errors)

Chris: Jacob, I want to welcome you to Building Texas Business. Thanks for taking time to come on the podcast.

Jacob: No, thank you. I'm so honored to be here.

Chris: So we can see from behind you. You know Dig World's your company. Take a minute to tell the listeners what Dig World is. What do you do? What are you known for?

Jacob: Yeah, great question. So we are a construction theme park where we allow kids and adults to operate real construction equipment. So we let them drive real skid steers, real excavators, real UTVs would take you up and boom lifts, the whole deal. And the only thing is you need to be three years old or older. And so we truly are a fun family theme park, but we allow you to operate real construction equipment.

Chris: Wow, I mean, that's amazing Real construction equipment. I can't wait to get into more of the details behind that, but first I have to ask you what was the inspiration to start a company like this?

Jacob: Yeah, it's crazy. You don't wake up with a dream every day to start a construction theme park.

Chris: Yeah, maybe a construction theme park, but not one where a three-year-old can operate. That's right.

Jacob: That's fair? That's fair? Well, no. So we, my wife and I, were blessed. We have three amazing kids. We have nine-year-old, a five-year-old and almost a two-year-old, and so life is good and hectic right now.

But my nine-year-old son, pierce, was born in 2015, a happy, healthy baby boy, and life progressed just normally and just fine. And then, in 2017, one morning on a Saturday morning, my wife found him in his crib unconscious and after rushing him to the hospital, we learned that he had contracted bacterial meningitis. We weren't sure if he was going to make it through the weekend, but the Lord had different plans. He was in a coma 12 days and we were in the hospital 75 days. And when we left the hospital, pierce left with a whole host of issues he's nonverbal, he's epileptic, he's deaf in both ears, you know, wheelchair and mental capacity of call it maybe a one-year-old, but but he is a happy little boy and, as I was telling somebody else, you know Pierce sees the world the way that we should all see the world. He doesn't see your skin color. He doesn't see your income. He doesn't see what car you drive. As long as you hang out with them, you've, we could bring people together. You know, you conceptually always understand that life is short, but when you're faced with something like that, you really understand that life is short and precious and so you want to bring people together and create memories and have good times and not just look up and say, man, all I did was work for 40, 50 years.

And here I am, and so we had this idea. You know, as I told somebody, we're pretty good arrogant Texans. We thought we could build a theme park. It couldn't be that hard, right. And man, we were wrong and we'll get into that, I'm sure, at some point in the show. But Pierce's always loved construction equipment garbage trucks, dump trucks, really thinking that whole, everything in that category. And so we said, hey, we really think we could build a theme park where kids could actually come and operate real construction equipment. And for the listeners out there, some of you may be thinking, oh, this must be some toned down version. No, these are real. These are 3027s, these are 305s, these are 243 skid steers, and so these are the real deal that we have re-engineered to where it's safe, but these are the real deal that you get to operate the park. So that's how we got started. Pierce is the inspiration behind the park, the inspiration behind really a lot of things that I do in life, and bringing people together to create memories that last a lifetime.

Chris: My gosh, I mean what? I mean? That's a mic drop story, jacob. I mean, you know, blessings to you and Pierce and your whole family. I hope to get the chance to meet him one day. Yes, he's the coolest member of our family. So, yes, that is amazing. So, wow. I love the inspiration and the story and this whole idea of bringing people and families together for those memories. So were you in the construction business when you started this, or what?

Jacob: were you doing? I would say yes and no. I had a commercial cleaning company. I started in 2015. That was my job. We just recently sold that business and where we started that business was in the construction cleaning space. So anytime a general contractor would go and build a big building or a hotel or an office building, we would come in, we would work for the general contractor and we would do the final clean on that building. So I was kind of in the construction space. We, you know we answered to GCs all day, but I am not a construction guy by trade. I was an ag major at Texas A&M, so I was a janitor turned theme park guy. So it's been a very interesting career, as you can ask my CPA wife from all the meandering roads that we've taken.

Chris: Yeah, so you know we're on inspiration. So then let's yeah, let's kind of dig into what a lot of entrepreneurs and business owners you know face is that first step right Of actually getting the courage to, to chase that dream. So let's take us back to that. What was that like? You know what were, you know what were the first steps like, what were the feelings? Like? How'd you convince that CPA wife that you know CPA wife that this wasn't quite as crazy as it sounded?

Jacob: Yes, I'm not sure, when we crossed that line that the craziness went out the window. We may have been there for a couple of years, but I would say to those entrepreneurs out there it's easy to say and it's cliche to say, but everybody sees the end of the story, everybody sees Dig World. Now We've been open, we're on Shark Tank, we're franchising. You know everybody's going ah, great idea. Listen, that was not the case when we first started. We went back and counted. I had roughly 248 pitch meetings where they told me no, that I was crazy, it was never going to work. Nobody's ever going to come to this, nobody's. You know, it's not safe All these kinds of things. And so 248, it's a lot of meetings. It's a lot of meetings. It's a lot of no's. It's a lot of no's. To keep coming home and go, no, it was a good meeting. It was a good meeting. What did they give you? Money? Not at all, quite the opposite, but it was a good meeting, right? And so to those entrepreneurs out there that you, you, if you're pounding your head against the pavement and going, man, if one more person tells me no, hey, I've been there with you, I know what that's like. Keep pressing on, keep going. If you have the vision and you have the conviction behind it, I promise you, at some point you are going to find somebody that believes in your vision for no other reason than you've just been at it for so long and you've got conviction behind it that somebody will take a flyer on you.

But it was difficult. It was difficult. We started in 2019, and then COVID hit right, and so we told people not only were we the crazy theme park people running around asking people to invest, but then we were the crazy people saying hey, listen, not only are we going to build it, we're going to get a whole bunch of people together. And that messaging wasn't going over very well during COVID, and so you know, we had all of these factors that were not going in our favor. And then, finally, in 21, in 2021, we had a first couple of people start to say yes, and then Domino's started to fall, and then we opened in March of 2022. And, frankly, that was an epic failure, too, that we can talk about as well, but it was a long journey.

It was a long journey, and so my encouragement to those that are out there, either on that journey or those that are at the beginning of that journey is take a step, just take a step. Right, do something. Just call somebody and say your dream out loud, right? Call somebody and say hey, listen, I'm going to let a three-year-old drive a skid steer. Right, and the more you start to say it out loud, the better that muscle is going to become being flexed. And then, all of a sudden, you're going to be the confident person that walks in the room and goes no, yeah, of course we're going to put a three-year-old on skid steer. We're going to let them drive an excavator. We're going to have birthday parties here, and then, hey, guess what they? But that theme of just take the step, just do it just go for it.

Chris: No one's ever going to believe it as much as you do, so you got to have that passion and belief and eventually you will find someone to get behind you, and then it's on you to deliver. Right, that's right, that's right, that's exactly right. So I do want to get to the story on the opening, but I have to ask you mentioned it earlier, so how did the Shark Tank thing come about? How did you, how'd you wind up on Shark Tank? Let's talk a little bit about that experience and what that was like.

Jacob: Yeah, an amazing experience, you know, it just was fantastic all around. An exhausting experience nonetheless, but it was a fantastic experience. You know, we were very blessed. One day I was sitting at my computer and we got an email to our info account and said hey, would you consider being on season 16 of Shark Tank? And clearly we thought it was a joke, right, and clearly thought something was going to be hacked if I responded to it.

Chris: Don't click the attachment right, that's right, that's right.

Jacob: All of a sudden our bank account gets hacked. But it was actually one of the producers. She had seen us on Instagram and said, hey, listen, would you be interested? Let's learn more about your business, see if it checks a lot of these boxes. And then that started the whole process. And the process is rigorous and it's long, and your fate hangs in the hands of people that you never get to see or talk to. And you know it goes from one lawyer to another lawyer. None of those lawyers have talked to each other, and so the whole process is very interesting. And then you know the show is true. It's true to form.

The only thing scripted about the show is the very beginning pitch that you give, and other than that, it's a free for all. The Sharks don't know about your business, they don't have a flyer on your business, they haven't been given any information. It's truly a live pitch pitching again when I'm like, hey, no, hold on, we got the park open, I don't need to pitch anybody again. Plenty of people have told me no, I don't need, you know, five people on national television to blast me and tell me no. But so when we got there, we did the pitch and we were very blessed it went well.

We secured a deal from Robert Herjavec, the tech entrepreneur on the show. He's one of the staple sharks and it's just been a great experience and once there's one of those things that you look up and you really have to sit in the fact that it's one of those once in a lifetime crazy things. And even yesterday I was driving to the grocery store and I sat there and I was like man, this really happened. That's crazy and just trying to enjoy those moments.

Chris: Well, and it has to be. I mean, it's great that it worked out and you got, you know, some additional investment from a very seasoned person, but just the notoriety of being on right Open, you know, a lot of eyes to you and had to, you know, you know, increase traction and interest in what you were doing.

Jacob: Totally. I think, from even, just you know, foot traffic to the park here in Katy. That that's been tremendous. But then even, obviously, you know we went on the show to sell franchises. That that's our next big hurdle is selling franchises across the country and we have been flooded with requests of franchises to bring people, you know, bring a park to their location, their city. Talking to potential franchisees, it really just just totally gasoline on the fire.

Chris: Yeah. So let's go back to the opening. You said March 2022. One of the things I like to talk to people about is let's talk about a failure that you've encountered and most people will tell you can do a whole show on them, right. Literally, I was going to say you don't have enough time on this, but you know you shared that. I guess the opening didn't go so well or something around that. So let's talk about what were some of the failures around that. What did you learn that made you better going forward?

Jacob: That's right. You know, I tell people one day when I'm, when I give it, when I give a speech one day at a theme park conference, I'm going to be able to tell people I'm one of the very few theme park operators in the world that has opened a theme park and closed it the same day because it went so poorly.

And so you know, I do have that badge of honor with me. So we opened the park too soon and that was a hundred percent my fault, right you too soon, and that was 100% my fault, right? You're trying to you build in these parameters in your head. We got to open this date. We got to do this. You know people are waiting and I really wanted it to be open that Thursday of spring break back in 2022. Could I have waited 48 hours more and would that have fixed our problems? Yes, did I? No, and I think a lot of it was. You know, we had been at this for four years. At this point, we were exhausted and here was the finish line. The finish line was on Thursday and we could do this and everybody's gonna love it.

Tickets were sold out there. There was plenty of buzz. You know we were being interviewed from broadcaster. You know I was on NPR and we're doing this interview in this country and all over the US, and there was so much media attention. We had helicopters circling over the park doing filming, getting ready for the opening, and when we opened, man, it was an epic disaster, and the reason it was is I pushed the grand opening. All of our machines were not ready. We had not put on our technology of all the machines, not that we were letting people operate those machines, but we did not have enough time built in to put a computer on this machine, and then this machine, and then this machine.

And so what happened is we opened the park to hundreds and hundreds of people and we didn't have that many machines going, and so those hundreds and hundreds of people waited in line for hours and it was just disastrous. And people were angry at me, rightfully so. People wanted to tell me what they thought about me, and rightfully so. The amount of refunds that we issued that day were it was probably dollar for dollar, we probably made $0 that day or just lost money, and so we had to shut the park down. So so I go on, and we, you know we were open. We were going to be open that Thursday, friday, saturday, sunday, and I just canceled everything and said hey, I'm so sorry, we're not going to be open, we'll refund you your tickets or you can come back whenever you want. And, man, people were so mad at us. They were so mad at us.

The news was doing coverage about how Dig World closed in less than 24 hours and it was a disaster, an epic failure. And so you know you go home that night and something you had been working for four years, there was no, nothing good about it. There wasn't even. There was no silver lining, like you could be, like well, but no, it was terrible and kids left crying. I mean, just like I said, just terrible.

And my wife will tell you that, looking back on that night, she goes hey, I thought I lost you mentally that night, like I thought you were so down in the dumps that night that I didn't know where we were going to go from here. And yeah, I remember the next day waking up, I was trying to, I was going to take my son on a walk and I remember getting halfway out of the neighborhood and having to turn around, got to go back into the office. We've got to go on the offensive here and really try to say hey, listen, we're sorry, let's own the mistake right. Hey, we opened too soon, please come back. And so I think you look at it right and it just was one of those epic failures, and we've had many more along the way, right?

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Jacob: I was thinking of just trying to figure out how to run a theme park, and we've never run a theme park, but that was one. That's an easy recall when somebody asked me to talk about failure.

Chris: Right, like you almost were there right Reliving it that day.

Jacob: Oh man yes.

Chris: Well, the lesson, though, in that you found the positive and I think it's true in so many different circumstances. We're all going to make mistakes, right, we've made them in the past. One thing certain we're going to make them again in the future, it's owning it right, be this, taking ownership of it, and then kind of committing to do better. I think when you do that, you know what, more times than not, what comes from that is grace. You know people grace to you, and I think that's what it seems like what you've experienced. Right, you owned it, so we're going to do better. The community gave you grace, and when you open back up, they came.

Jacob: I think don't pass the blame, Even honestly, even if it's not really your blame, right? People want somebody to stand up and say, hey, it's on me, and I think we don't see that a lot of times in leadership throughout you know, whatever. But people willing to say, hey, that was on me, I'm gonna raise my hand, that was on me. And then the key is forgetting quickly and moving on right and not dwelling which, whatever you do, operate out of imagination, not memory. Right, Don't go back there, sit in those failures operate out of imagination, not memory.

Chris: That's a good one. I haven't heard that one before I'm writing it down.

Jacob: I would like to take credit for it, but somebody much smarter than me said it, so yeah, right.

Chris: So I want to talk a little bit about technology and innovation because, I mean, I know these are, you know, big machinery used out in the construction. There's nothing really innovative about them, but it seems to me that using them in your theme park has to have some innovation and technology to make them safe, as you've described them. So you know, tell us about that. How did you come up with it or did you, or where did you find it?

Jacob: it? Yeah, great question. So, yes, yes, all of the above. I know I did not come up with it, I'm not smart enough to write code, but we partnered with an engineer and we said hey, listen, this is what we want to do. We believe this can happen.

And what we did, in simplistic terms, we built our own computer to put onto the back of the machine. That goes into its wiring to override a lot of the functionality of it. And so when we call it dig world mode, when the computer's in dig world mode, it is safe. The excavators are stationary, they can't go forward and backwards, they only go certain degrees to the right and left and up and down. Our skid steers are heavily governed, the hydraulics and a lot of functionalities are disengaged. We have kill switches and then we can flip the computer back to normal mode and it's a normal functioning machine.

And so really, coming alongside a bright engineering team and building this technology that's our technology and putting it on these machines is really outside the box kind of stuff. And finding somebody that wanted to dream alongside with us was the key to success there. And he's still dreaming alongside with us. I mean he had made a technology upgrade this past week. That's one of those things you look at and you go why didn't we do that three years ago? That makes things a lot, you know not safer, they were very safe it makes it simpler for our team to utilize, and so we're always improving.

I think that's the other thing. You know you hear it all the time as an entrepreneur, but as a business owner, one of the things that's very easy to do is get stuck in a rut and go well, we've always done it that way, right? I had a call with my business partner this morning and he's newer to the team and he said well, why are we doing that? And I was like well, honestly, I don't know if we've ever asked that question. I think we've just done it and let's try something new here. And knowing that you don't always have the right answers, and your teammate you may have a high school kid that works for you, like I do that comes to you and goes hey, why, why aren't we doing it like this? Could we do it like this? And you go it's a genius idea, let's do it that way. Yeah, and being okay and putting your pride aside and saying let's change and adapt.

Chris: Right. So you're clearly kind of in the entertainment business. Let's talk about building a team right, because I think I mean clearly you've got an internal team there, I guess in the office that's got to run the company, some creativity around it, but then you have another team, that's, you know, customer facing. How have you gone about building kind of each of those teams to try to maximize the company's success?

Jacob: Yeah, it's a great question, Thank you. I would say, yeah, our two teams I'd almost kind of say like our corporate team. Right, our corporate team is the X's and O's business focus. How do we grow the franchises? How do we optimize the P&L? And really the key to success there is not to overstate cliches, but like go hire somebody smarter than you and go hire somebody that is great at your weaknesses and then give them the reins to run it.

I don't go in your lane, you know how to run it. I trust you explicitly. I've given you the keys of the kingdom because if not, if I'm just going to micromanage you, then why would I even have you on my team? That's demeaning to you. I'm going to end up doing the work anyways because I'm a control freak. So I'm going to go hire somebody that really knows what they're doing and say go, do it right.

Or my business partner he oversees a lot of different things, but one of them is the marketing, and today he said hey, listen, do we want to spend here? Do you want to spend here? I think the answer is here. Yep, let's go there right, if you think that's interview going. Hey, this is what we sleep and breathe here. We love the customer, we love that people are here. We're going to love on them and we're going to make memories. Can you do that? And that's what I'm going to hire and fire against. If I see you out there and you're not loving on customers and you're not creating memories that last a lifetime, we're going to ask you to leave. But that's what you know from the beginning. We're going to hire and fire against. Do we love people and are we serving them well? And if we do those things, we're going to build a culture that people start to talk about.

And every team meeting that we have, I kick off of hey, today we're going to love people and today we're going to think outside the box, and I know you had, you know, a long week at school. I'm asking you from nine to five today to dig deep and love on people because and when you really frame it up, we get to be a part of something so special and so unique. We get to really be a part of this kid or this family's memory bank, and hopefully in a good way. Right, there are going to be hundreds and hundreds of kids for the rest of their lives that are able to say man, when I was five I had my birthday party at this place called Dig World and I got to drive a real excavator.

They're gonna tell that story for their whole life. We get to be a part of that. How humbling is that. And so when you really can set the picture for these kids, what we're doing here is not just a job. We're not here today to collect tickets and put you on a machine and say thank you for coming. We are ingraining ourselves into your memory bank, and when we can take that on in the privilege of that, then, man, we can really sky's the limit.

Chris: Yeah, well, I could see if you get that light bulb to go off and kind of in any employee, right, it changes the whole dynamic, the mindset and luckily those high school kids I got to believe they're learning great life skills to have to deal with people on the fly. And that's what we do every day. Right, we're dealing with people as we as they come to us, and so that's exactly right.

Jacob: And get to teaching that, hey, the customer's not always right Sometimes. You know we can stand our ground every now and then too, and so really, yeah, how do we handle conflict with each other? How do we handle conflict with a customer? You know those are skills that are in an online day and age are becoming less and less, so how do we actually stand in front of another human being and say, hey, listen, I know you're frustrated, let's figure out how we can work through this kind of deal. So hopefully we're teaching them things that can go far beyond Dig World.

Chris: Yes, for sure. So we're here in Texas. You started this business here. Tell me some of the things that you found, or have found, to be advantageous about being a Texas-based business.

Jacob: Oh man, so many, one. Obviously. Just the people right, the people buy in and they love it. They love supporting the business, they love supporting what we're trying to do here. And so, culturally, it's amazing to be here in Texas.

We were fortunate when we started we had a partnership with Texas A&M, my alma mater and so I'm a little biased there but really getting their buy-in, and a university that saw what we were trying to do and said, hey, listen, let's go capture the next generation of construction workers and teach them about Texas A&M. Yes, but let's also teach them about this great industry of construction. And then really, just the flexibility of Texas. You know there's not many states you can just go out and, for the first and foremost, be like, hey, listen, we're going to start a theme park and it's going to let kids operate construction equipment, right, the flexibility and you know we went through the whole rigmarole and everything with insurance and the filings, but really the adaptability of the state and going, yeah, that sounds great, let's do that. And then everybody behind it. It's just, it's been amazing.

Chris: That's great. So I'd like to talk about leadership, and you know you're clearly, as a founder and CEO, leader, but how do you think those leadership qualities have developed over time and how would you describe your leadership style?

Jacob: Yeah, I tell people a lot of times I think there's two versions of Jacob as the leader. There is pre-Pierce getting sick and then there's post-Pierce getting sick. Not that the goals have changed. The goals are still. Listen, you're running a business. You got to make money and you got to keep the doors open right At the end of the day. That's the name of the game. But mindset around those have changed. The intensity around that has changed and the bigger picture around that has changed.

So, for example, pre Pierce getting sick and our cleaning business, we lose a contract. I'm pretty frustrated. I'm probably a little panicky. We're getting a little desperate on how do we replace that contract. I'm driving the team harder. What are we selling? I'm micromanaging more because I'm feeling nervous and anxious. Right, post Pierce getting sick, the intensity is not gone, but the priorities are going hey, we lost the contract, okay, let's go home, let's reset. Tomorrow, we'll find another one. There's another one out there, let's go find another one. Right, and motivating the team that way, instead of fear-based whether it be my fear or the fear I'm instilling rather than going hey, we'll be fine, we're gonna keep doing what we're doing. We're gonna keep doing the X's and O's of the business and it will be there. And so I think, when failure of a grand opening and a grand closing comes, you go.

Okay, listen, today was not a good day, today was a terrible day. However, I'm still here, my family's still here, and tomorrow we're going to figure out how we survive this and we're going to pick up and we're going to go to work tomorrow and we're going to figure it out, and then I think, at the end of the day, I'm a servant leader. I hope our high school kids see me doing things that I asked them to do. I hope they see me cleaning the bathrooms. I hope they see me doing this, not to manipulate them to saying, hey, you know, oh, jacob's doing it, I should go do it. No, I want you to see that we're all in this together, right, and I believe in it this much that I'm going to get in here with you and I'm not going do at that point is they go? Yeah, I'll go clean the bathrooms, right, and hey, jacob asked me to do it, I'll go do it because I know he would do it right, rather than the dictator style leadership or the authoritarian style leadership.

So I think for me it's coming alongside them, servant leadership, getting in the trenches, dealing with the disgruntled customers and not just making them deal with it, all of those kinds of things, I think. Build in the goodwill with the team and they see somebody that wants to link arms with you, and then what it allows me to do is come alongside them on those times where I either have to discipline or I have to recorrect or reposition, and they go. Ok, I know. But I know at the end of the day, he loves me. I know at the end of the day, it's the best, even if he's firing me. You know at the end that you, moving on, I'm still going to be in your corner, and so I think I view my leadership in those two ways.

Chris: I like that. I can identify with it as well, feel the same way. To me the servant leadership is so valuable, right? Your employees have to believe not only they've seen you do it, not that you will do it, they've seen you do it right, and that when you ask them to do it it's important and so that's great. You know, just thinking about the obviously a lot of stuff going on in our world and in any kind of different ways. But you know economically, you know legislatively, what are some of the headwinds, given all that that you kind of see facing dig world as you're kind of looking out over the next 30, 60, 90, 120 days, year, kind of yeah, yeah.

Jacob: It's a great question. I would answer it two ways. One you know, as we look at the economics of our park and people coming to our park, you know what we feel like is we sit in that middle or probably lower to middle ground of your discretionary spending as a family, meaning. Meaning, as I compare it to a Disney right, and when the economy goes down a little bit or people are a little worried or nervous, the Disney vacation may go on the back burner. Right, because that's a significant financial investment into that. It's a great experience, but it's significant. Where we fall is on the lower end of that category, hopefully delivering the same memories and experiences and fun and joy, but the price point is significantly cheaper than that. So we feel in good times and in rougher times we hope to be a resource that allows those families to still create memories in that regard.

Externally, as we look to grow franchises, the ups and downs of the economy can sway different investors. They can sway how they want to hold their money, what they want to do with their money, what they don't want to do with their money. Now my sales pitch to those individuals are hey, you could take your money and put it over here, or you could take your money and put it over here and you could kind of be in control of it, but you also can create something that's bigger than you for your community, for your family, things like that. So it it will be interesting to see what the next probably call it 120 days have in store for us as far as how we're received on the investment side. But right now, our focus on this phase one is how do we get five franchises across the finish line, and right now, praise the Lord, we're very close to hitting that number. And then we got to get them open and we have to produce right.

Chris: At the end of the day, you have to produce and I understand you have two open now or the second one's about to open. Dallas will be open by the end of this year. That's correct. Okay, that's great. So I gotta ask. I mean, you're talking about disney, made me think. Do you have some kind of mascot or anybody like in a big suit when you show up at dig world? You know?

Jacob: so. But he said I literally got off a phone call earlier we are, we've honed it into kind of two mascots that we want, and so that will be released soon once the debate can be decided within our team of which way we're going.

Chris: Okay very good. So let's just kind of turn to a little more casual side. Yeah, you said you and Katie went to A&M. I'm taking those two data points and making an assumption you're a born and raised Texan, it's a great question.

Jacob: It's a great assumption, but no, I am a son of a healthcare executive, and so I was born in Alabama, raised all over Texas, graduated high school in South Carolina, then came to A&M, met my wife, who is a Houstonian, who's a Katie girl and much smarter than I am, and so she had a real job after college, and so I followed her here and I've been here ever since.

Chris: Okay, Great story. So just talking about Texas, you know you all have a favorite spot. You like to go within the state to get away, maybe vacation time.

Jacob: Yeah, you know it's funny whenever, within the state, melissa and I we love to head over to San Antonio. We love the Hill Country side. We like a couple of the resorts there. That's our, our getaway. And then I think you know when we're getting away. Now we've got young kids. Grandparents and cousins and nephews live in waco and so we head over to waco. We spend a lot of time there. But if melissa and I are just getting away and staying in the state, we're gonna head probably over to san antonio very good.

Chris: That leads me to the next question then do you prefer tex-mex or barbecue?

Jacob: oh man, that's. Oh man, see that one. That's a tricky question because we'd have to be like specific in the subcategory right. Like'd have, we'd have to like pit two against each other.

Chris: I hear you. Everyone says that that's the hardest question saved for last.

Jacob: Oh, my goodness, I'm going to have to go barbecue. I'm going to have to go barbecue.

Chris: All right, all right. I love how you're going to break it down, though, cause I'm the same way. You know. It's like. Well, I don't know, it depends, I mean it depends it just.

Jacob: You know, on Friday night this weekend I had Tex-Mex. On Saturday I had barbecue. So you know like it literally is, but I'd have to go barbecue.

Chris: All right, very good. Well, jacob, thank you again for taking time to come on the podcast. I mean your story, obviously from the start of it with Pierce, was amazing, but just such a creative, unique thing that you've created. And you know, just wish you the best of success, thank you. Thank you, honored to be here today. Thank you for taking time

Special Guest: Jacky Fischer.

In this episode of Building Texas Business, I spoke with Mason Brady, founder and president of Brady CFO, about his entrepreneurial journey and the growth of his fractional CFO services firm.

Mason shares how he transitioned from corporate CFO to entrepreneur after realizing the strong market demand for part-time CFO support among construction and agriculture businesses. Starting the business while supporting a family of five tested his comfort with risk and uncertainty.

His firm now includes five CFOs who help businesses with revenues up to $75 million navigate financial decisions, capital access, and growth strategies. Brady CFO uses a unique team approach, pairing CFOs with analysts to deliver cost-effective services tailored to clients' needs.

Recently relocated from California, Mason appreciates Texas's business-friendly environment and central location for serving clients nationwide. He focuses on helping entrepreneurs evolve as leaders while managing their growing companies, particularly in construction and agriculture where many face similar challenges around financial reporting and bonding requirements.

Show Notes

Previous Episodes

About BoyarMiller

About Brady CFO

(AI transcript provided as supporting material and may contain errors)

Mason: Thank you, chris, really appreciate this opportunity.

Chris: So let's just start introducing yourself to the listeners. Tell us about yourself and about Brady.

Mason: CFO self. I'm a husband and father to three little girls, so that's the biggest priority of my life. I was just telling Chris earlier that we celebrated my three-year-old's birthday this past weekend and she had a blast. That did the trampoline and pizza party thing and she had a wonderful Saturday. So that was awesome.

And from a more professional perspective, I started Brady CFO about three years ago. Yeah, roughly right around three years ago. That really in just seeing a need in the marketplace that I was a corporate CFO for agribusinesses and I had friends that would reach out and ask for help within their construction or ag businesses. They really just needed some fractional CFO support. That they had an existing accounting team, but that accounting team wasn't really leveling up to help them with the decisions that they need to make, whether it be, you know, hey, we want to buy out our partners, how much should we pay? How should we finance it? Hey, we want to go buy this building. How should we do it? You know, we want to buy out our competitor, or we need help getting access to capital all these multitude of requests that they had.

But they certainly didn't need a full-time CFO and so I helped them part-time but really it just kind of exploded on me that within about three months of helping friends on the side, I was making more money on the side than I was in my full-time job and said, oh wow, there's actually a business here to be had, and so eventually decided to go full-time with it, and I've been growing it since then. So now this past weekend we're now a team of five total CFOs. We specialize in the ag and construction segments, and so we serve ag and construction-based companies with revenues up to 75 million and we come in as their part-time CFO, helping them with all the pain points I mentioned that you know. They need to look at potential investment opportunities. They want to bring in partners or buy out partners and want to figure out what's the right way to do that At least finance it. They want to figure out, you know, how to optimize their finances, and so we're the ones that ultimately can help solve those pain points for them.

Chris: Very good, yeah, so first I can identify, I have two girls, so I'm a girl dad as well, and no better pleasure in life. And then you know I love hearing that you know this kind of just being entrepreneurial and, I guess, open to opportunities and seeing a gap where you could kind of step in and provide value to clients and small businesses, midsize businesses, and turn that into your own business, which is pretty cool. And I think what all entrepreneurs are kind of looking for right is where can they make a difference? Where's there a gap in the market? And so you said three years ago now tell us a little bit about you. Know.

I guess you kind of had it going on the side, and that's not uncommon. Some entrepreneurs will say I kind of had a job and then I was doing this kind of side hustle and then that just kind of exploded. What was it like, I guess, to to go through the process mentally and emotionally, to go I'm going to leave the stable corporate job to kind of, you know, branch out on my own, because a lot of people are probably stuck, scared to make that decision. Let's talk a little bit about your process and what you might offer. Some advice to others who may be listening.

Mason: Yeah, I think the path of me becoming a full-time entrepreneur it has been more of an emotional roller coaster of learning how to deal with fear and risk and being comfortable with it. You know, of living in a state of being comfortable with knowing that you're really not in control, which none of us are anyways, even in a W2 job, right, none of us are really in control, but there's some false sense of security that exists in a W2 job and you know, and just reckoning with that in your own heart. As to you know what that looks like. And yeah, it certainly was scary for me to have three young children and my wife doesn't work. I am the breadwinner, my wife is a stay-at-home mom and we generally wanted to maintain that lifestyle, just to be able to take care of our girls in that way. And so it definitely. Yeah, it was on my back, right, but you know, I say this, my, my personal faith is important to me, and so, you know, inherently I kind of knew that it wasn't all in my back, but yet at the same time, you know, as human nature is, we want to try to control things, and so it was scary, but I saw that the door was opening for me. It wasn't on my own, you know, doing that, obviously, I worked hard, but the door had opened to me that I'd personally prayed and I said, hey, if this is the path I'm supposed to go, it's going to be clear when you know, the answer to that was really clear when I started actually making more money on the side and I had more booked revenue than I did in my full-time job and said, okay, there's obviously something here that it's not. Like I have this little launch period where all of a sudden, I'm going to do a dip in income and try to figure it out. It's like, no, I've literally fully replaced the income and then some, I think we're good to go here, and so that was easier.

Not everybody has that opportunity but, yeah, for me personally, it certainly was becoming comfortable with risk. That you know, that has been the journey over the past three years, and I think every entrepreneur is a bit on that journey of as an entrepreneur, you have to be comfortable with taking risk in a bigger way. That you know, especially, I come from an accounting background. Right, I'm a. You know, I was a CFO by trade, that I'm known for risk-taking. No, we generally are conservative decision-makers right, and I had to get comfortable with just, it's okay, get comfortable with fear. That's when the greatest growth happens.

And you know, I heard somebody else like you and I are going to do a podcast swap. I heard somebody else say that you know, wealth is managed and conserved via diversification. Wealth is built when you go all in. You know and and it was like okay, well, if that's true, you know. Then I got to go all in and know that I got to go all in and that I'm burning the ships, and you know and just be comfortable with that. And so I began. That wasn't like a day one decision for me. I had to incrementally overcome some things to at that, but it was definitely a huge leap for me of doing that. But I would say to most people that you know it's going to end up being okay that you know all the fears that are in your head for something else. That's better because, as a result of that failure, that if you are good at what you do generally, it'll work out.

Chris: Yeah, yeah, I mean it said you know, I guess, succinctly have faith in yourself, right, that you can do the job. The other thing I like about what I heard you say there was it's very rare for someone speaking of entrepreneurs, it's very rare for an entrepreneur to have it all figured out, to not be or be immune to risk, immune to the fear of taking the risk, right, that's the unicorn. The reality is that Almost every entrepreneur shares those fears. They may not want to talk about it until they've done it and then they can talk about it, but you're going to be scared, you're going to have some uncertainty and you're going to grow along with the process. Story may be told different ways of I wasn't sure, but I believed. Or if I didn't try it now, I never would.

Mason: And who I was when I started as a business owner and leader versus who I am today is very different because we all evolve, so I think what I would tell entrepreneurs is even though you feel like you're alone, you're not.

Chris: Many that have come before. You felt the same way. Yeah, and I would just encourage you're not right, many that have come before you felt the same way.

Mason: Yeah, and I would just encourage there's not really a perfect time to start a business that people think, oh, like, at this age, I'll do it when the kids are out of school, or whatever the case is I actually advocate that. I, you know, being the breadwinner of my family, you know, and having, you know, three little kids to take care of it was a higher level of risk, right? Like I didn't have a safety net and that meant the decision-making that I was going to make I was going to focus on the top, like if I had to look at my calendar, I was going to focus on the top strategic priorities that were actually going to deliver a result for my time. Like I wasn't going to mess around because I didn't have the safety net, and so you know, the success of the business I think, has been built upon that.

As to making the right decisions, because I didn't have any spare, you know, wiggle room in there for making a wrong one Right, and some of that's luck, some of it is just prioritizing time. I think that mentally we can get in our own way and so I encourage anybody, any listener, that there's no just because you can have a safety net later on in life or it can feel more comfortable. Sometimes entrepreneurship is pretty hard and to make the right decisions is pretty hard. Sometimes, when your back is against the wall, that's the most strategic, opportune time to actually do something, because your ability to fight your way out of that is actually better.

Chris: It's really good. Let's go a little deeper on that, because I think you touched on something I think is so important, especially for someone that's starting out in a new business, and the one thing you hear almost universally is you're wearing many hats right in those early days and to your point, where you spend your time doing to make sure you are prioritizing your time in the right ways versus being distracted on the wrong things.

Mason: Yep, I would say in any business starting out, I mean, making sure that you have tractions in your sales is critically important and you have to try to drive repetitive repeat sales. That and in order to do that's not just going to fall in your lap, you actually have to take action in doing that. And to the conclusion that I was going to have a weekly set of sales activities that I was going to do and that meant that you know whether it was activities on LinkedIn, whether it was people I was going to meet, who I was going to meet and making sure I was meeting with the right people and saying no to the wrong people. But I was going to commit to a consistent set of actions every week that I was going to prioritize, because even if I had book client work that you know could sustain me revenue wise, that can dry up Right. And so I never wanted to be in a position where, okay, we know that's going to dry up at some point and we don't have a solution to it, or we're going to have this big gap period, like it literally is when you're starting a business always be selling literally and make it a part of a routine, and I think for many people that are somewhat the artisan like, they're going and providing a service.

So, whether it could be you know accounting or CFO work, it can be plumbers, it can be you know roofers. They may love doing the operational work themselves or that's what they're good at, and it's really easily mentally to go do what you're good at because that's what you're comfortable with. It's human nature, right, it's human nature. But sales is hard, regardless of whether you have a sales background or not. Sales is hard because you're putting yourself in uncomfortable situations where you're going to get told no, you're going to get told you're going to get rejected, and that is hard but it becomes easier through repetition and through repetition you're going to be able to define things better.

You're not going to start perfect and just understand that. You're going to find your niche better. You're going to find who should I talk to better. Where am I going to get the greatest ROI for my time? But create a set of weekly activities I'd say, especially for somebody just starting out, that really needs to represent close to 40 to 50% of your time. Honestly, it needs to. You need to be making at least 40% of your calendar focused on new business development activities and just create that pipeline that's always flowing. And if you do that at least for me, that was a great success. Factor is just trying to implement that. Finally, and I think most people would agree, that is the way that you keep things rolling.

Chris: Yeah, thank you for that. So let's talk a little bit about innovation, because you started out on your own. You said you now got five CFOs. How are you using technology or what are you doing to kind of be innovative, to kind of drive your business and grow it? Yeah, I would say.

Mason: I mean, we're not heavy technology users in the sense of, yeah, like, we do use technology, but we're not necessarily taking technology to drive where we want to go and how we provide our services. I mean, I do think that there's opportunities in the space of AI to improve what we do 100%. I think what we're a bit unique in is you'll find out there and I think innovation can just come from seeing one way that everybody does something and trying to do it a different way. And I always worked for agribusiness firms that were always low margin and so from an overhead standpoint, you couldn't really staff up in a big way because you know, you didn't know when your next crop was going to, you know when you're going to have a hailstorm that was going to knock out your next crop, and you know and so you had to maintain a really lean overhead at all times. And just through a personal you know aspect my wife is from Chile, I've worked in South America, I can speak Spanish and all that, so I would actually contract, you know, a financial analyst and accountants out of South America, and I did that in corporate where, when I needed project support that I would go secure people from South America and I'd have them help me build financial models when I needed time to focus on other strategic objectives, and I would have them do that on my behalf rather than me getting stuck in Excel analysis and so like.

Within our business you'll find a lot of fractional CFO firms where you're kind of you're buying the person of the fractional CFO themselves, you're buying the person, and we have a unique team approach to where every CFO is paired with an analyst and that way in our pricing we can deliver it at a more cost-effective rate to our clients.

That ag and construction aren't historically, you know, high margin industries and so that way we can be most cost-effective and be value adding for the client. But we have a unique model in which the analyst does a lot of the Excel analysis, financial analysis work on behalf of the CFO, so the CFO can go actually work on strategic objectives with the client versus being stuck in financial analysis all day. And at least for us, that's what innovation looks like and we're driving that further in regards to setting up systematic ways that we deliver our services and rather than it just being that, hey, you're buying a person for an hourly rate, which I feel like a lot of our competitors do. We're trying to set up a systematic way that we deliver the services, along with a team approach, and that way it just it creates the greatest value add for the client. And so there's not a lot of technology in there, but we're just doing it different. That we feel like is, you know, it's all meant to be valuable to better fit our clients ultimately.

Advert:

Chris:Yeah, so, like I said, you know, I agree I don't think innovation has to be wow always, but just maybe slightly different. Sounds like what you're talking about more is a value proposition, right, and that you're really getting a little team here or not just one person. I can see where that would be different and important to your clients. So you're in Houston. Let's talk a little bit about the advantages you see of being a business maybe not just in Houston, but in Texas the advantages that you think that's brought to you and how you're trying to capitalize on those.

Mason: Yeah, so I think I should start a little bit backwards. Originally from California, so I'm one of those statistics right that I moved the business to Texas. I literally picked up my LLC and I converted it to a Texas based LLC. So I'm all in on this.

Chris: Welcome. We have, man. We have done so many conversions of California LLCs to Texas LLCs since 2020.

Mason: It is crazy, yeah, it's real Still have family in California. We still have many clients in California. There's a lot of ag in California construction as well that we will continue to serve. That still believe that while the state is difficult to operate a business in, that also creates opportunities because there will be people that leave and yet there's still demand for those services and those products and goods. So yeah, for me being in Houston it's really actually great because this is a booming state in terms of its economic activity, especially on the construction side of things.

But from an ag standpoint too, it can be a little bit tough not to be, you know, in the ag segments that we serve. You know where we're being able to go out to the ranches and the citrus groves and all that and then the farms themselves on a regular basis in Houston. The fact that we can serve clients in California, go hop on a plane, get out to Fresno, california really quickly, but at the same point in time there's a ton of ag in Florida, georgia and we can go hop to those areas. We happen to work with a lot of fresh produce clients and fresh produce distributors and so those are all over. But the fact that Texas is a central point and has a lot of economic activity where a lot of those goods and services are coming in, and so, while may not necessarily be that all the products and goods are grown here, the distribution of them is happening in a very significant way here, and so the fact that this state is so central to everything, it's just, yeah, it's been actually a blessing, because if I was all the way in California and I wanted to go to a trade show all the way, you know in Georgia, you know that whole lag of time in between, you know travel time and just killing a day worth of travel, et cetera, et cetera, when right now, I can get to most places within two and a half hours.

You know the United States, and that's a beautiful thing in terms of building relationships and being on site and the fact that, yeah, the Texas economy is booming. Nonetheless, that you know it's real here, yeah, it's. We actually had one of our CFOs that moved from California to Oklahoma and he just said, yeah, it's amazing, just the lack of I shouldn't say lack, but the more minimized regulation by comparison to other states, and how it just creates additional business opportunities. It's a wonderful blessing. So it's great for us and, yeah, allows us to be centralized, but at the same point, yeah, it allows us to work with Texas and the clients all over too.

Chris: Right, you mentioned, I guess, one of the CFOs that you brought on. How are you going about evaluating whether these additional CFOs align with your vision of the company and can, not just from performance but from your ethical standards, which you obviously led with in the very beginning of our conversation? So what are you doing to kind of vet these people out, to make sure you're making the best decision you can and bringing them on board? Yep.

Mason: We definitely, through our hiring process we do a very significant case study approach and even in the person's background we want to see that they're. You know, for me it's a personal choice to each person building their own practice or firm in this way. If the background is heavy public accounting, you know that they work for a CPA firm for most of their life. It's probably not a fit for us, because we actually want to make sure that we get people that have been operators inside a business that have experience helping to deal with the issues of whether it be a family transition. You know growing a business and you know wearing many hats, because it's rare that if you have a full-time job in a $20 million revenue business that you're not going to be doing you're going to be doing multiple things, I should say, and you know. And so we want to see that they have operator experience in that regards. But we put them through some significant case studies to really evaluate, because it's unique that many of the business owners that we're working with we say that we work with businesses up to 75 million in total aggregate revenues, because we find that's a perfect segment where they can really use a part-time CFO. They don't quite need a full-timer yet. They can use a part-time on a reoccurring basis. But what's interesting is we're watching the evolution of the entrepreneur themselves as well, or the founder. I got to tell a little bit of my story but even though that they have the CEO title, they're not quite fulfilling that CEO role fully and we're helping them navigate that and there's a lot of emotional rollercoaster that goes with that and so we actually evaluate.

We just did interviews with two construction-focused CFOs and that's another part of it too is we wanna see deep industry experience within the industries we serve. But we ask them that, hey, if you were faced with this similar issue we just worked through with a previous client where it's a husband-wife team and we literally just saw the husband wife get in a fight with each other over you know, something they're talking about in the business. We say, how would you handle this? And we want to hear how they would handle the emotional aspects of it from an empathetic standpoint, like, can you actually navigate that as a leader and still come out, you know, on the right way, that you're not going to be overly technical about it. You're going to help them, you know, relationally, work through it and help them move in the right direction, see the bigger picture.

And so that's a lot of how we're doing it, that we are working with clients where, again, there's just emotional dynamics, where we're seeing that the entrepreneur themselves is having to evolve in a very significant way. They are not some major corporate CEO, they wouldn't tell you that they are. They're evolving as a person and so being there with them through that evolution and kind of helping to almost be somewhat of a guiding coach too, is what we see in our role and you know that's what we're looking for in our people that they can help do that too and help navigate sticky situations.

Chris: Well, very similar kind of parallel seats that we sit in, cause we I find myself in very similar times with a lot of our clients where, you're right, they're evolving through the process, as I mentioned, and they were really good probably at sales or something with an idea, but they all of a sudden have a CEO title and helping them along that journey and whether that's eventually getting a good operator underneath them to really run the business so they can focus on what they you know they enjoy doing the most that made the business successful. Those are fun places to be, to kind of be an extension of that team. Right, let's talk a little bit about your clients. I mean what you know, what are some of the things you're helping them through, some of the challenges. You're seeing any kind of trends of where people are. You know, maybe, what are they excited about, what are they concerned about? You know, how are you helping them kind of navigate through both of those emotions?

Mason: Yeah, I like to tell this story because literally you can insert the name and this more specifically applies to, like our construction clients, but you can insert any one of our client names in here and it literally is the same situation. This is the trend that we see. That you know, joe started a construction business that he was. He started general contracting business. He was a project manager for another big general contractor in town felt like, hey, I can do this on my own, I want to go do this on my own. He got the licenses and started bidding on some work and started winning the work and started, you know, actually managing the projects, working with the subcontractors, et cetera, you know, fulfilling the, you know all the work requirements for the job and kept growing. You know, eventually hired some PMs underneath him to handle some additional jobs, but knew that he needed to take care of accounting and so he's got QuickBooks and you know he's heard stories. But he needs somebody that he can trust to handle the day-to-day transactional entry and that he's got to keep things lean. So he asked his wife, his mom, his sister, his aunt, somebody that generally has some knowledge of QuickBooks and coding transactions. He asked him to take care of his books and he can do that for a couple of, a few years and then all of a sudden say Joe, you know, he gets this opportunity at the university or this big hospital, that this big remodel project where he can put his banner up. Everybody can know it's his brand that's doing this work and it can be a real showcase project.

And he goes to bonding. He goes to his bonding agent to you know, make sure they can be bonded for the job, and wants to put a bid and proposal forward on it. And the buying company says no way, absolutely not put a bid and proposal forward on it. And the buying company says no way, absolutely not One. The financial reports that you give us show that you are an absolute financial mess. Whenever we ask for those financial reports, you send them two to three months later, so we never get anything on time. And when you actually do send them, the quality of them not just from a financial performance standpoint but your accounting standards and your record keeping is absolute junk. Like we can't really tell what's going on underneath the hood here, but of the little that we can tell, you're not doing that great.

Insert Brady, cfo, we help to make sure that you know you are never denied by bonding again, that when you want to go pursue that high profile job, we make sure that you get the yes, and that's done through various ways that we make sure that you do have liquidity, so, whether that's working with banks or other you know capital providers, to make sure that, hey, we get you liquidity so that the bonding companies will like that you have a little bit of backup. But then, yeah, we're navigating that. How do we get your accounting in good order to actually that it's in a useful state? And then how do we optimize your financial performance to where, whoever's provided that capital, we can make sure that there's a good ROI on that too whether you're having to pay down debt, can you actually pay down the debt, et cetera, et cetera. But through that process we're seeing a significant trend that a lot of construction companies right around 15, 20 million mark they're going through an ERP implementation, as an example, just to get their accounting records in a good state, and we're helping to navigate that.

We don't like to be deep within the accounting itself, but we certainly serve it because we understand it's a means to an end that once we have good financial records and we make sure that there's some liquidity in place. Then we're talking about, okay, where do we want this business to strategically go, that this is a $15 million business now, but how do we make this a $50 million business? And then how do we make it a hundred million dollar business? And we're creating these long-term plans with the ownership to do that. And so that story I told about Joe though literally you can insert several of our client different names in that and that is the consistent theme across the board. And we find that when we bring that up in a sales call too, that is usually what's being seen for most of our clients that we work with.

Chris: That's what's keeping them up at night and again. And when you solve that problem right then, now you have a client for life. Yep, Yep, that's great. That's the goal. Let's talk just a little bit about leadership. How would you describe your leadership style and how do you think it's kind of evolved over time?

Mason: Yeah, especially as an entrepreneur, I would say that like I have a visionary side to me and that is important, that I think every entrepreneur has to have that visionary kind of fulfillment and believing in what's possible and what can be created. But at the same point in time you still have to put in the operator mode at times, right, like you just have to get stuff done. And that aspect of learning to delegate, I mean I was a corporate CFO so I had teams of people. But again, in an agribusiness environment you're running lean, and so usually what you see in an agribusiness environment is that you have these C-suite leaders or these VPs that they're excellent, but then generally there's not a good layer of middle management below that. That it's basically you have a variety of accounting assistants and they're all rolling up and with the intention that, yeah, you're keeping your labor and your overhead costs low, you know, and so you have one kind of rain maker up at top, but then you have a lot of people that need a lot of additional skill and development reporting into you, and so naturally you're kind of having to manage and keep the reins pretty tight. Right that you're having to be a little bit more controlling to make sure that things are going well and within this business. On the other hand, we're managing other CFOs right Like we're managing, you know, highly qualified people and coming to the conclusion that, yeah, I don't need to be involved in as much. Right Like I. It's important to trust but verify.

But you have to be really good at delegating. But delegating doesn't mean you show them once and then you hand it off and expect why didn't that not get done a month later? Why did it not get done the way I wanted it to? To me. Getting really good at delegation I've had to evolve at this is, you know, spend some time with them, show them, make sure that it's being done over the course of a couple of weeks or a couple of months correctly, and then you're good to go and you can leave it and you can touch base and say you're accountable to this. Now I've given you all the training. You know what to do. Be careful about just giving somebody something and expecting that it's going to be done the way that you want it to be done. That's hardly ever the way it works. But you got to be really good at delegating and getting things off your plate as quickly as possible, right.

Chris: Yep, very true, very true, let's. Let's try a little bit, since you're new to Texas, places you've gone, experiences you've had since coming to Texas that stand out in your mind.

Mason: Yeah, I mean I just the generally friendly nature of people. I mean it's a part of the reason that we love living here and that we wanted to move here is, you know, you walk down the streets and people just say hi, and that doesn't necessarily exist in other states, where people are friendly and just say hi. And we got to be. You know, we got to witness or experience our first hurricane last summer and I couldn't believe the resiliency of people where I mean, yeah, the day after the hurricane people still had to work. Oh, like you go into Barnes and Noble and like people are literally plugging their laptop into the corner little, you know. You know electrical outlet and making sure that they could still get work done and send emails that day, like you're just back at it.

And the nature of that type of stuff happens here so often that you know from California, yeah, you get wildfires there's that's a whole nother story of how it can be managed or not but you get wildfires but you don't really get natural disasters that just kind of come and, you know, uproot your life for a bit, but they happen so often in Texas has such, you know, crazy, you know up and down weather people's resiliency. It's pretty amazing in Texas of just yep, we had that terrible storm yesterday. Well, we're back at it tomorrow, you know, and it's just. This is life and we got to get back to it and, yeah, I think the friendliness and people's resiliency here is is a pretty, pretty big thing that we've noticed. Yeah, that's great. I love that perspective.

Chris: I think those of us that have been here our whole life maybe lose sight of that sometimes. But yeah, it's good to get that perspective from you. So again, new to the area. But I ask everyone this so it'll be good, because you're kind of a guinea pig or fresh in this, do you?

Mason: since getting here is your tex-mex or barbecue tex-mex yeah, that I do love good barbecue, but tex-mex I. We have all kinds of mexican food in california, right. I mean, I think the population in california is good 60 to 70 percent hispanic but tex-mex has a different, unique flavor to it that I grew up on mexican food. Because of that growing up where I did, yeah, and yeah, it's kind of natural to make that migration, I love it. So, yeah, I love a good queso.

Chris: Oh man, I have it for my own heart. Yes, okay, well, yeah, really appreciate the time. Mason, love hearing your story and where you're taking this business. I definitely agree. There's a lot of opportunity for the type of services that you're providing, because there's a ton of companies that fit within that space. Again, I know that because that's part of the market we serve in, that kind of middle market there. So congratulations on taking the risk. How it's going so far?

Mason: Yeah, no, I just appreciate being able to come on here, chris, and talk with you. It's fun to come and share the story. But, yeah, I just appreciate the opportunity to share with your audience as well.

Chris: Well, that's great. Well, we enjoyed having you on and I look forward to seeing you soon. Take care, that's good, awesome.

Mason: Thanks, chris. Have a good one.

Outro

Special Guest: Mason Brady.

In this episode of the Building Texas Business Podcast, I spoke with James Dieter, Chairman and CEO of Principle Health Systems. James shared his journey from orthopedic and interventional pain specialist to healthcare entrepreneur. Motivated by inefficiencies he witnessed firsthand, he created a more efficient healthcare model focused on mobile diagnostic services. Principle Health Systems has now conducted over 3.2 million mobile lab tests in 2024, demonstrating the success of his patient-centered approach.

James opened up about leadership challenges and the importance of self-awareness when managing strengths and weaknesses as a CEO. By redefining Principle Health's mission, vision, and core values, his team created a unified direction that improved employee satisfaction and strengthened company identity. His insights on strategic partnerships showed how the right team can transform an organization.

We explored their innovative "daily DON" program, an AI tool that helps Directors of Nursing prioritize patient care in long-term facilities. This technology enhances clinical decision-making while serving as a distinctive marketing asset for the company. James also discussed the Texas healthcare landscape, including Medicare conditions and reimbursement rates.

Throughout our conversation, James shared practical advice on informed risk-taking and learning from setbacks. His experience navigating the healthcare industry offers valuable lessons for leaders and entrepreneurs looking to make an impact in this complex field.

Show Notes

Previous Episodes

About BoyarMiller

About Principle Health Systems

(AI transcript provided as supporting material and may contain errors)

James: Glad to be here.

Chris: Yeah. So let's start at the beginning. Just tell us a little bit about your company and what it does and what it's known for.

James: Yeah, so Principle Health Systems has evolved over the years. When we started out we really had multiple directions. We were going in just as a healthcare services company. So a little background on me.

I started out in orthopedics and interventional pain. I was really just dedicated to practice inpatient, outpatient and surgery. So going through that for my first decade of work, I saw a lot of inefficiencies in the healthcare, outpatient and surgery. So going through that for my first decade of work saw a lot of inefficiencies in the healthcare services sector, specifically in the Southeast region of Houston where I worked. So I wanted to build a better system right.

Our lab results took too long to get back. Our pharmaceuticals weren't in stock at the pharmacies we'd send our patients to. Mri results took too long and started to, through my entrepreneurship journey, go out and started to build little sectors of where I could have influence really over my own practice to have a better outcome and through that over time started over 20 businesses in the first 10 years Just had numerous pharmacies, laboratories, diagnostic facilities, did three surgery centers. I was involved in one large hospital system and then got to a point where I said, hey, let's wrap this thing together, let's put it together. I want to have really just one source solution where we could come in and work with physicians and provide a host of different services. That went fairly well. The service level was outstanding. The most difficult aspect for us was really the payers actually having reimbursements without being contracted with certain individuals.

From there, we really, about six, seven years ago, found a niche and that was called long-term care. So we define long-term care as skilled nursing facilities, assisted living facilities and home health facilities and we provide laboratory and diagnostic services to those guys. So, in-house, you call it your house if you live in a skilled nursing facility or assisted living facility, or at home, but we provide mobile diagnostic services. So we go out and we offer labs, x-rays, ultrasounds, echocardiograms and ekgs in the home. So you bring it to the patient. Bring it to the patient, that's right. That's right. And last year, 2024, we performed over 3.2 million lab tests mobile. So, with a large amount of those being for stat tests, right? So tens of thousands of stat tests per month where somebody needs something in four to six hours and we get us turned around for them.

Chris: Okay, so it sounds like the inspiration for you was maybe frustration born out of frustration, for sure, and a gap in our healthcare delivery service, so he's shedding more light on that. I mean, you've mentioned this entrepreneurial journey. I mean most physicians and doctors don't have that. So what was it for you that you kind of took frustration and turned it into action?

James: Yeah, I mean just a matter of you know, I'd have a patient that was really suffering right, specifically on the interventional pain side. This is not uncommon. You have a patient who's in a very bad position and you're already jumping through hoops with insurance companies. So it might take three to four weeks to get something approved. And then you're in, then you set them up for surgery.

Well, you, the assumption is okay, we're going to have the lab work back, we're going to have the MRI back in time, and then it just wasn't happening. So you're pushing off surgery, you're pushing off procedures and just over time it's just a great deal of frustration. At the end of the day, the mission was always to help the patient, and if it's all about the patient, we've got to do something different here. And that was the biggest frustration for us was just the delays and turnaround times on the imaging and laboratory specifically, but then also getting medications, you know, sending patients out and having sometimes three, four, five phone calls come back up. The pharmacy didn't have my medication, the pharmacy didn't have my medication, the pharmacy didn't have my medication. So that's when we started opening up our own pharmacies back then as well.

Chris: So just there, right, you said we. Who did you partner with? How did you go about finding a business partner? If that's the case, going about setting up a business, because you don't just turn on a switch right. There's planning, there's financing. Entrepreneurs in any industry, in all industries, go through that when they're starting a business. Let's talk a little bit about that journey in the beginning, of how you got it going and some of the lessons learned in that process.

James: Lots of lessons learned in that process. You know, speaking of that, we call it chewing glass, right, okay, I?

heard that one. So much of it's just a grind right and just figuring it out. But as far as partnering goes, I've had numerous partners in different individual business units over the years. When I formed Principle Health Systems in March of 2016, I had to get really specific on who am I going to allow on the bus, who do I really want to partner with on the bus? So I pulled away from certain partners, left goes, let go of certain businesses and then brought some together. So, in total, I believe we started out with there were three of us on day one that we brought in, you know. But I had different skill sets, right. I mean, I was trying to always try to be very honest with myself about where are my weaknesses right. I'm I would say I'm highly visionary. I like to think big. I like to have that 50,000 foot view of where we're going, set goals, set mission, set vision. Big culture guy. I love to talk about culture and instill culture throughout the organization.

Chris: We'll get to that in a minute.

James: Cool yeah, but just frankly, I would say weaknesses are on details, right. So I've just always been someone who likes to move forward and not analyze every aspect of it. So partnering with some people that were strong in an analytics and detail side of the business was really important for me, and I still have some just phenomenal business partners today in that regard.

Chris: That's great. You touched on two things that I think are very common, some of which when we're advising clients. The first is choosing your partners right and being clear about expectations, documenting what the deal is on the front end and making sure you know that where everyone's going and what the roles are. The second is understanding, especially when you're the leader, your weaknesses in hiring around that, because you can't do it all and you're not going to be good at everything, and so I think everyone that I've met that's been successful has that self-awareness Right. How did you go about getting comfortable letting go of some of those job responsibilities and whether it was a good hire or a partner that you chose.

James: That's a tough one. I mean, some of it was truly difficult to let go of. And then other pieces. You know you tend to be good at what I would say you tend to enjoy what you're good at. Sure, yeah, and that's one of the so to really convince yourself like, let's go spend more time at what we're good at, more time at what we enjoy, I would say I didn't focus so much on letting go as focused I wasn't spending so much time focused on what I'm not good at as what I was good at right. So it was just a matter of, by virtue, of spending more time on what I enjoy, doing less and less of what I don't enjoy. And that was easier for me to let go.

It was almost to to to let it slip to let it slip away rather than to give it away and know that because you weren't giving it attention.

Chris: someone needed to Right.

James: Right. And then you know, obviously just helping to build folks up I mean, we have right now an unbelievable director of human resources who was in project management at one point and just understanding the value of different people in the organization that you already have built trust and rapport and you believe in them.

and then to find, hey, I really think they'd be good at this and then move them into these roles to fill gaps was so important and just finding, really analyzing the people that are around you to understand what are they great at and what might else they do from where they are today, that could be a greater opportunity and bring greater value to the company and organization.

Chris: Yeah, so you touched on culture, let's go ahead and go there. Anybody you talk to at a CEO, entrepreneur, business owner, leader will say, right, culture's king. We believe it a hundred percent. We talk about that constantly around here. It's just part of our DNA. We believe it 100%. We talk about that constantly around here. It's just part of our DNA. So everyone goes about it differently. Let's talk about how you have gone about building the culture at Principal Health. How would you describe it first? And then, how have you gone about building it and nurturing it?

James: Yeah, so great question. I mean, starting out, I couldn't tell you when we started the organization what was our mission, what were our core values. I couldn't even tell you what they were. There was something we came up with. I think two of us came up with one day, in a couple hours, some marketing stuff yeah marketing stuff.

We hung it on the wall, just like you would expect right from most organizations to do most organizations do. And we had a phenomenal, you know, I would say the top 20 people in the organization just had a great relationship together and I would say that we thought culture was very strong. Four years in we polled the entire company and it was pretty, pretty terrible. I mean, it was like a 60% satisfaction, maybe even in the fifties, and we were kind of horrified like wow, we thought we had this great culture and everybody loved this company and it was. You know what it was.

Well, I decided a couple of months later I did an offsite. So we did a two day offsite and kind of big hotel room, you know, or I guess I said conference room, with these big windows overlooking clear lake, and you know it know, the whole idea was like let's think big, and we brought in just management. So I think there was 46 managers at that time in the organization and we all came in the room we said, hey, we're here for two days to figure out three things Our mission, our vision and our core values.

And we're going to sit together and this isn't going to be the C-suite telling everybody what we're about as a company. We as a people, as a community, are going to discuss what is this company? Who are we Not? What are we? Who are we?

Chris: And what do you want to?

James: be Exactly, and we did come up with a BHAG. We ended up throwing in a BHAG as well there. But where do we want to go? Classic Jim Collins. So we did get through that two-day period and we came out with a really strong mission, vision, core values. Our mission is to improve patient outcomes and experiences. Relatively simple, very difficult to do in healthcare. We decided our core values would be URPHS Principle Health System the acronym I should say is URPHS. Understand the mission, respect everyone. Patients are our purpose, happy to help and step up. So and we talk about simple, right, exactly, I would believe at this point, 90% of any you know we're approaching, I think, right, right, 500 employees today. I would think 90% of those folks could tell you that and not just tell you what they are, but give you examples of how they've done those things.

We live culture. We no longer talk about it. We did that in the beginning. Now we live it. It's brought up in every management meeting. It's brought up in all the leadership training sessions, all the offsites and it's kind of what I call the North Star. So we look at culture as the direction. If you're not sure about a decision that you're going to make in any regard. I want you to think about the North Star. Is it in alignment with, are you walking towards, the culture, are you walking towards the mission of this company? And that helps to drive behaviors so important.

Chris: I mean, that is the true key to the kingdom. I think the word I would use is it sounds like your culture has become institutionalized. Right, it starts out where it is you as the culture cop or maybe the C-suite, and getting it deeper in the organization. But once you've done that and everyone knows it and everyone lives it and everyone can hold each other accountable to it, then you've got a true directional tool To your point. I think the more you can tie behaviors to those values that's when they become real the more you can tie behaviors to those values. That's when they become real. And so when you're praising people because whatever they did connects with these two of our six or whatever number is of our values, it becomes real to them and they know how to repeat it A hundred percent.

James: Yeah, I'm fairly unapologetic about the culture, so I would say it's even unusual Some of the things I'll say when I'm in management meetings or even when I do a quarterly coffee and conversation. So I meet with the entire company. It's usually takes six or seven sessions, but I go company wide, we bring the big groups and I'll sit down with the entire company for an hour every quarter and what I'll typically say when it comes to culture is that it's up to you to you know we can't police it from management. It's up to the people to police the culture. So one of our core values is respect everyone. So if there's someone who's not respecting everyone, I expect that the people of the company will kick that person out, go after them, make sure they don't work here, and I'll literally look out and I regularly look out across when I'm talking to the whole team.

Chris: And I tell them.

James: If you really can't say that you're here for the patient, if you can't say that you're really here to serve our mission, I was like I really don't want you here. I was like I prefer you to quit. I was like we will replace you and I would prefer to go without somebody for a short period of time. I'm unapologetic about it. We truly believe it. That's what we're about above all things. The rest of it, because at the end of the day, in our business, if we do a really great job treating patients, everything else will follow. Yeah, the doctors want to work with us, the facilities want to spend time with us, the payers will respect us. It's really about the patients. So we put patients first. Everything else comes next and if you can't get behind that, we don't want you.

Chris: Yeah, I think that's a great point. Some of the words we use here, right. We're passionate about our mission and our values, which means they resonate in our heart and our gut. Right, we just it's in our fiber.

If they don't resonate with you, it's really okay, because it means it's not the right organization for you, right there's a different organization out there that you're going to be happier with, you'll connect with and we'll go find someone that connects with us. Happier with you will connect with and we'll go find someone that connects with us, because they're going to be the better performer, the self-policer, the self-motivator. They're going to be the ones that connect with for us, similar to patient care, client service, right and mutual respect amongst everyone. So I agree with you it's okay to tell people if you don't connect with this. Actually, I use it in interviews when I'm interviewing someone. Here's who we are, we're very clear about it. And if you don't connect, it doesn't make you a bad person 100% doesn't. It just means it's in the right organization for you and there's a gazillion other organizations.

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James: There's another team, there's another team that'll work just well for you. Yeah, totally.

Chris: No, let's switch a little bit because I want to get back into kind of the business I'm always interested to ask about, like innovations and technologies I mean no-transcript.

James: Yeah, I mean, you know, obviously, with the increased levels of compute, you know, now you have the large language models, you have artificial intelligence and that has already made an impact for us. So I would say that we are the next 18 months are going to be very interesting, but we are already using automation from AI that is changing the way we do things and I can give you one example in particular. Well, two really good examples. One in the back office, we have a team of I believe it's three ladies total. Still we had three ladies that would handle all of our facility invoicing right and it's very complex.

We have the decipher between patient to patient each day who's part A, who's part B and how we do the billing, and some of it gets billed to facilities. Some of it's billed to without getting too much in the weeds. Some of it gets billed into the insurance company and we've been able to quadruple our volume with still having the same amount of people and not have to scale payroll because of implementing automation techniques through AI that help to decipher where those go. These get scanned in and it all gets brought up. Still have a little bit of a you know, a people component to it. But, just you know, we would be sitting here with and one division. It's just a great example, because that one division would probably be 10, 11 people, yeah, and the cost increase Exactly.

Chris: That's an amazing statistic.

James: So that is kind of a back office area that we're really focused on going. Where else can we, where else can we look at the bringing in this technology to help as we continue to scale, so that we don't have to just keep hiring bodies?

which is you know, from a real estate perspective even difficult. So we're, you know, we're, we've been tapped out on space for two years and we're it's been very challenging. Where do you just put you know, where do you keep putting people Right? So, but on the I guess I'd say on the actual business, well, that's the back office on the front of the house. We've got a program. We call it the daily DON. So, right, so it's a DON is a director of nursing.

A lot of the facilities we work within, you know, skilled nursing facilities, assisted living facilities, they have someone who really oversees the house. They're the clinical expert in there that makes sure that all the patients are taken care of. That's called the DON. So we have a form that's.

Thousands of these go out every morning to all of our facilities and it's an AI program that picks out the most important things that happened the prior day. So here's, you know, bobby Sue had a stat test performed at X time and here's the result. Here's a critical result or whatever is most important. They kind of have a clinical mind and says, hey, this is where we think you should pay attention to your patients today. These people are trending in the wrong direction. These people if they're doing just fine, they're at the bottom of the page. The things that are most important are highlighted at the top of the page, but it's really helping us provide better healthcare diagnostics for our providers so that they can treat the patients better. So it's right, in line with our mission, but it's really just automation and again, it would take an army of people to do this.

Chris: Yeah, that's really cool stuff. I have to believe that is also, if not already, will become a huge marketing tool. Oh, it's a big marketing tool. Right, people are worried about the family mergers they're putting in there, where they're really going to get care, because, you already know this, your industry doesn't have a great reputation as a whole. No for sure.

James: And so the more you can say no, this is what we do to make sure we're taking care of your loved one, yeah, so there's a huge journal publication called McKnight's and it is the, you know, the premier publication for the long-term care space and you know, all over the country, the daily DON. We actually won a bronze medal this year against thousands of applicants for innovation. So it was actually yeah, we were awarded.

Chris: I guess that was 2024, but last year yeah, close enough, yeah, so let's talk a little bit just about, you know, being in Texas, being a business, primarily in Texas. What are some of the advantages that you have experienced being here, not just in Houston, but taking advantage being in Texas? For us is related to the Medicare Advantage plan, right so?

James: or, excuse me, the MAC right so? Different Medicare has Medicare administrative plans and they actually carry out Medicare's will in an area. Texas has a MAC that is somewhat more favorable than the rest of the country. Now there's a few states that share that, but just in general, for us, from a standpoint of clarity they're a little bit more clear. There's a lot of bureaucracy that goes on in just getting paid, so this might be surprising to people outside of health care, but today I believe we are paid on 61% of the business we do and we're actually probably one of the really high end. We've run studies on this and we're we are, better reimbursed than most companies out there in our space, and so we still, you know, roughly four out of 10 patients that we treat, we get paid $0.

Chris: It's just fascinating to me that it's that poor it is very poor.

James: However, we are in one of the more favorable areas, so I can only imagine if you don't have a lot of clarity and guidance on how to bill, it just becomes more and more challenging for you.

Chris: Yeah, this may be one of those, but I'm just interested as you kind of look out going forward, what are some of the challenges or headwinds you see maybe coming at your industry? Some of the challenges or headwinds you see maybe coming at your industry, lots of changes going on in Washington right now will have an effect, I'm sure, on your business but maybe also affect what goes on at the state level.

James: So one thing you're kind of worried about as you kind of look out, I would say just one of the concerns, and I mean I think again, everybody likes to point the finger to the big bad guys and I really look at them more as a partner than they're not a, you know, an adversary to us or more of a partner. But the insurance companies have become more active in utilizing ai to to identify discrepancies within chart notes to deny claims. So that's something where, you know, recently went to, one of the conferences I attended was for health care payers and they have booths set up, you know, trying to sell to the health insurance companies of how to use artificial intelligence to identify the to not pay.

They're already not paying much and you know they're now. In reality, the reason they are not paying is because the notes are lacking in something. So, rather than paying a person to go and evaluate each note, which is very expensive, you think about the health insurance companies if they have to hire thousands of people to evaluate the charts, or they can use AI programs to evaluate the charts it's going to save them money and hopefully that money gets passed on to the consumer. So I actually don't think it's a long-term a bad thing, but I do expect in the meantime it's going to just decrease even further, decrease the amount of claims that get paid.

Chris: Right, it sounds like it would be incumbent upon companies like you to kind of push back a little more in the short term.

James: to be able to take advantage of those efficiencies later. Absolutely yeah, and I look at it from our perspective. We're in a really good spot. We're pretty developed to where we can handle those kinds of headwinds.

Chris: So let's switch again a little bit. Just talk about leadership. How would you describe your leadership style? How do you think it's evolved over the past, you know, 12 to 15 years since you've kind of been moving forward with this company?

James: Yeah, I mean. So starting out with a group, I think, start with five people and 500 folks. So leadership looks very differently as business scales. And, to start right, I mean I used to take out the trash and do the accounting. I mean I've worked every job in the company personally and in the beginning, worked with a lot of people who were for lack of a better, better word incompetent at what they did, and today, having been able to develop people and hire and bring in and partner with incredible people that are, frankly, better than I am, a lot of things it allows me to go and do what I'm really good at and, from a leadership perspective, I've probably, if I've, believed in you from the beginning.

I've always given you. I'm not a micromanager. I don't believe you can't really grow a large company if you're watching over everything going on. So you have to truly, just, I would say, collaborate with those around you and I guess, if I had to define it who I am, I try to be a great collaborator, right. I try to really help, provide as many resources for the people around me as possible so that they can be successful.

Chris: That's good. Let's talk about problem solving right. Especially where you are today and probably have been in your role, probably more of what you do is facing issues, and how are we going to work through this and solve an issue, solve a problem? What have you found to be the most effective way to kind of get the information you need to make those informed decisions that you believe would be in the best interest of the company?

James: Yeah, I mean. So again, that's something that over time, has become, I would say, much more of a process, right? So now we have data analytics and we have incredible CFO that's been coming in and able to provide information. There. We have all these additional resources, from accountants to lawyers, to folks. We sit down. I like to surround myself with the right group. We try to sit in a room with the right people at the right time and analyze all the information, but very quickly. I do not like the old analysis paralysis. That's not us at all. I move very quick, I like to make decisions very fast and I don't look in the rear view mirror very often. I'm always looking out the front window and just moving forward. So when there's challenges that are hitting us, it's just a relatively. Let's get as much information as we can today, let's analyze it and let's go.

Chris: Yeah, I love that because I agree, I think, the idea that stagnation will kill the company right, and so I think you try to get as much information as you can, knowing it's never going to be perfect. But I think the key then is, I agree with the mindset of kind of move quick. To me, the next piece of that is to evaluate the decision as it's implemented, because then you're continuing to learn and gather information. If you're doing that so that you can adjust right, Because the plan goes out the window as soon as you start to act right, so some people will act and then ignore, and I think that's a mistake. I think if you act, continue to analyze and then align behind what you've learned, it may not be a pivot, it may just be a tweak, but you've got to keep moving.

James: I totally agree and you really touched on a great point that I like to speak about. Often and it plays a little bit in the culture. I tell people, guys, we've got to make mistakes here. If we're not making mistakes, we're trying nothing new. So I hesitate to say I encourage mistakes, but to some extent I think I did in my last meeting ask for mistakes directly. So the idea here is that it's okay to make mistakes, it's not okay to make the same mistake over and over again. But if we're not trying, we're not growing. If we're not growing, we're dying. So we've got to continue to move forward. And the culture is that if you are focused and I mentioned that North Star earlier but if you're heading towards the North Star and you make a mistake, you're okay, there's no problem If you're doing something new and you're trying something for the good of the company and the good of the patient, that's okay.

Let's learn from it. Let's learn from it, let's change course and let's keep moving.

Chris: Yeah, that's right. Comfort and complacency aren't good, and I think that that freedom to take risk as long as it's an informed risk, as long as it aligns with our mission and values, is the type of risk you want to encourage your people to be doing and learn from it 100%. So that's good. People always learn from setbacks. So let's talk about a failure or setback you've experienced, and I know there's probably two or three examples from yesterday.

James: No, but yeah, I mean, where do we start here?

Chris: But what was it you know, and how did you learn from it, and how did it make you better? How did it improve you or the company, whatever the example may be?

James: Yeah. I think geez, you know, this is only a tough question because I have so many.

Chris: Yeah, I think geez, this is only a tough question because I have so many. You're not alone in it. A lot of guests say the same thing and I can identify with that.

James: Yeah, so. I think for one this just comes to mind somewhat early on in our business we had just one massive customer. We had a great deal of revenue concentration in one customer who ultimately had a bankruptcy and put us in a really bad financial position when we lost out on. You know they were way behind on paying their bills and you know such and such. You've heard the story.

Chris: Oh sure. So not only did you not get paid. If you were that beholden to them, you didn't have a lot of other things coming in Correct.

James: Correct, correct. And just to learn from that example of not letting yourself get too far out over your skis for one, but also just to diversify, not just the customer base. We were actually diversified in our revenue and how we were paid, but it was all one customer. So you've got to diversify your revenue base and your customer base and not have too much concentration. That was a really early on lesson that just comes to mind. That, I feel like, was still one of the most painful. I think I laid off 40 or 50 people that day and it was just a tremendous. That one scarred me pretty bad.

Chris: Layoffs are never easy. Those are ones you'll remember.

James: Yeah, that one still haunts me, so again I've. Which mistake would you like to talk about?

Chris: we could do a whole show. Yeah, you really could, but yeah so kind of you know, bringing this more to a close, any advice you would share with our listeners, entrepreneurs and business owners out there that you know, if there's one thing you're if you're thinking about, if you've just started the journey or you're thinking about it, here's one or two things that you would kind of want to pass along.

James: Yeah, I mean I just, you know, from an entrepreneurial standpoint, I had a one of my, one of my father's good friends when I was a young kid, you know, probably high school. He told me at one point he said, hey, your business really isn't going to fail unless it runs out of time or money. And just kind of keep that in the back of your head, because I can think of at least six or seven times that we were done, you know, and I had to sit there and go well, hold on, you know, we haven't completely, we're not completely done because we haven't run out of time or money. And that was how, you know, I spoke about chewing glass earlier. I think you know one of my buddies, he's a new entrepreneur. I always I tell him ready, shoot, aim. You know, at some point you can analyze all the data. And if you do analyze all the data, you're probably never going to start Right, because the odds are of starting a new business are challenging.

Chris: For sure, as everyone says, it's not for the faint of heart.

James: It For sure, as everyone says, it's not for the faint of heart. It's not for the faint of heart. And everyone will run into a lot of problems and challenges. And that's why because if it was easy, everybody would do this Correct, and so just I would. Just it might sound a little silly, but just don't give up. I mean, if it's something you believe in, if it's really a great cause, if your heart's in it, just keep your head down and push on, because you will be successful.

Chris: That's great, and perseverance and grit is what it takes if you're going to be a true entrepreneur 100%. But the ready shoot aim is kind of like you were saying earlier, in decision making, at some point you got to make a decision, absolutely you got to go.

James: Yeah, I see that as just a big mistake that folks are making over and over again is sitting around just waiting and by the time they actually make the decision, the opportunities passed.

Chris: yeah well, let's, we're going to close with some more fun stuff. Talk a little bit more about texas, any favorite vacation spots within the state.

James: Things you like to do in your spare time you know we have a little piece of land up in west texas so we're out in the lakey area okay it's kind of kind of over there by Garner State Park for those that know the river and just absolutely love. We go out there probably every month. You know I have two boys and a little girl so I spend a lot of time out there. The family makes it out there every now and then, but I definitely try to grab a boy and go out there every month. How fun is that? We just go and shoot guns and hang out and, you know, take the kids and their friends over to the Garner State Park, dance and do all that kind of stuff.

Chris: God's country over there.

James: It is God's country. It's fantastic. That was my favorite place.

Chris: It's just beautiful out there, yeah, so any like books or anything that you've read lately that you might pass on to a listener as something to go spend some time reading or learning from. Reading or learning from.

James: Jeez, you know I'm actually doing 10 books with my kids right now, so there's nothing new and exciting, but they're all you know. I've got them reading Seven Habits of Highly Effective People, so that was the book they read last week. They're reading a book a week, so this week they're on the Five Dysfunctions of a Team Peter Lencioni.

Chris: Yeah.

James: So those are kind of what's going on. That's what's on my mind at the minute. I like it At the moment, yeah.

Chris: And teaching them young.

James: I love that, yeah, I mean well, they're 15, 13, not too young.

Chris: Right.

James: But kind of when I was reading those books and trying to. So a bunch of oldies but goodies. Yeah, we're going through right now.

Chris: We're doing Rich Dad, poor Dad world from that perspective. Last question do you prefer tex-mex or barbecue?

James: barbecue, all right, yeah I guess you can't go out to lakey and and not have barbecue in that area or on the road trip to and from no, I mean I it's.

Chris: That's a tough question I always save it for last and everyone says the same thing. It's a trick question what's yours? People turn that on me and I think I it's a tough one that they. You know, once it's turned on me and I think it's a tough one Once it's turned on me, I realize how unfair it is. Yeah, I think my answer has always been I love barbecue, but my go-to is probably Tex-Mex more than barbecue.

James: So if I was going to say Tex-Mex with a margarita, that might go above barbecue For sure, but if it's just food, it's barbecue Okay.

Chris: Yeah, because it's hard to have Tex-Mex without a margarita.

James: Yeah.

Chris: And then, of course, you have places now, especially here in Houston, I'm sure, other places where they're combining, you know, like the brisket into the Tex-Mex.

James: so brisket, burritos or tacos, and that, to me, is probably the penultimate, it's fantastic.

Chris: Yeah, there really is. It's challenging when it comes to healthcare. So, James, this has been great man. I really appreciate you coming on and sharing your story. It's pretty fascinating, and congratulations for all the success and what I know will be successful in the future.

James: Awesome, thanks so much for having me,

Chris: you bet. And there we have it another great episode. Don't forget to check out the show notes at boyermillercom forward slash podcast and you can find out more about all the ways our firm can help you at boyermillercom. That's it for this episode. Have a great week and we'll talk to you next time.

Special Guest: James Dieter.

In this episode of The Building Texas Business Podcast, I spoke with Brian Freedman, president of the Bay Area Houston Economic Partnership, about the region's economic development.

We explored the five major industry clusters shaping the area: maritime logistics, aerospace, tourism, healthcare, and petrochemicals. Brian shared updates on aerospace innovations at Ellington Field, including projects by Intuitive Machines and Axiom, while highlighting new opportunities in defence manufacturing.

I learned about Project 11, an initiative to expand the Houston port's capacity for larger vessels. Brian explained how this infrastructure project connects to the broader transportation network, particularly the role of trucking in regional commerce. We discussed how the partnership works with legislators and industry leaders to address challenges like insurance costs and maintain economic momentum.

The conversation shifted to leadership approaches and team dynamics in Texas business. Brian described how maintaining diverse projects keeps his team engaged and motivated. We explored how the Houston area supports entrepreneurs through community partnerships and mentorship programs while adapting to technological changes like AI integration.

Our discussion wrapped up with a look at workforce development in the region. Brian explained how educational partnerships are building talent pipelines across industries. We covered the importance of aligning training programs with business needs while fostering collaboration between municipalities, educational institutions, and industry partners.

Show Notes

Previous Episodes

About BoyarMiller

About BAHEP

(AI transcript provided as supporting material and may contain errors)

Brian: Hey, thank you, Chris. Honored to be here and great to catch up.

Chris: Yes, likewise. So let's start with you. You're the president and the organizational name's kind of long it's Bay Area, houston Economic Partnership. Tell the listeners a little bit about what that organization is and what it does, to kind of put the rest of our conversation into context.

Brian: Sure, so BayHEP is the short version of it. So we're the Regional Economic Development Group and kind of the, as I like to say, in the Houston-Galveston region. We're three o'clock to six o'clock on the watch, face right. So we kind of go out 225, all the municipalities and cities going out east and then going down south 45. We go a little west of 45, but really that 3 o'clock to 6 o'clock and we're really focused on how do you recruit, retain and expand primary employers in the region with the idea that if you can get great companies located here and have a group of industry clusters that are cranking away every day, that we can have a great place to live.

We have great involved residents that are in this area and opportunities for the folks who live here and kind of build what the future will look like for this region. So a lot of good stuff going on and, happy to get into that a little further, we do economic development, recruitment, retention projects. So how do we get companies here? We do some grants and then we're a membership organization is how we're funded. So we have about 300 members, 19 municipal members, Harrison-Galveston County, the port, the airport system. It's really how do you get the leaders of a region to work together to advance what we're doing here.

Chris: Wow, I mean that's it sounds like it's easier to say and harder to do coordinating that many organizations and trying to get everybody pulling the same direction.

Brian: Yeah, it's a lot of fun and we get to work with a lot of great folks. That's how we met Chris, is that, you know, through some of our mutual connections. But yeah, you know, it's really when you can get generally like-minded folks thinking about what the future of a region will look like and pretty aligned and working towards that effort, it's more of a well, it's just fun and you can create a lot of impact and we're seeing that and I'll be happy to dive into some of the specific projects we're working down here. But I mean, you guys do it too at Boyer Miller. Y'all are working with clients all over the spectrum of types of industry and you have to adapt to what's coming up, what's at you, and be ready for that kind of stuff.

Chris: Yeah, no doubt. So yeah let's jump into some stuff. Let's talk first, because when I think of your area, obviously the first thing that comes to mind is NASA and all that's going on around that, and that leads me to technology and innovation. So what are some of the emerging technologies or trends that you're seeing that are kind of helping shape the future of Texas and kind of the business opportunities, at least in your region and for Texas?

Brian: Yeah, so I call it kind of the big five on the industry cluster. So everybody thinks about this area for NASA, which we love right, because it really is a crown jewel out here, but I call it the big five right Maritime and all the associated logistics with the port aerospace and aviation, so nasa, but also the great work that the airport system is doing with ellington and hobby, tourism and recreation, health care and all the hospitals that have campuses down here, and then specialty and petrochemical and the energy industry partners and every one of those ecosystem has a ton of stuff going on. So I'm happy to talk about some of those more granular. But a couple of observations. One is that often overlooked in this community and really an asset to the greater Houston region is Ellington Field, ellington Airport, the Spaceport and, if you haven't seen or heard about it, the work that's going on at the Spaceport. They have three new beautiful buildings. One is occupied by Intuitive Machines who just put the first commercial lander payload on the surface of the moon. One is occupied by a company called Axiom that's building the next generation of commercial spacesuits and the next generation space station, and Collins who do spacesuit design in our building and maintaining the current spacesuits. They've set up huge facilities down there and so new stuff coming on.

But I'm equally excited about just across the runway is the 147th Reserve Group. So there's a reserve unit out there, a reserve base, and the defense opportunities are pretty exciting. So that's highlighted by the 147th. But almost every branch has a reserve unit out there, save the Space Force, and we're working on that. And so the opportunities with defense manufacturing to come out to do more work in Houston and some of their innovation units and, as mundane as it sounds, some of the procurement opportunities, because when it comes to contracting, having a group of folks here would be a great opportunity for Houston businesses to then pipeline the work that they're doing into the broader defense industry, which can be really exciting.

One other thing I'll mention, chris, is if you just look at the path of predictable growth for Houston, right, it keeps going out and we see that on our freeways every day. So there are growing pains that come with that, but for our region it's that steady march down Interstate 45. And so while Clear Lake Lake City are starting to get to fully built out and we're looking at what is the next generation of building look like, what's redevelopment look like For communities Dickinson, hitchcock, santa Fe, to some extent Texas City. Although they've got quite an industrial complex too, there's still space, and so it really brings up the opportunity of we can handle big projects, and whether they're industrial or tourism, there's a lot of opportunity that comes with that. And so, as folks you know, as we get built out further and further, those cities that were, they've always been important cities for the regional ecosystem, but they become major players, and so it's exciting to be able to work with them on that stuff.

Chris: Sounds like a lot of opportunity for real estate development. Both residential, retail, commercial, industrial kind of all sectors are going to be playing a big part in that ongoing development in your region.

Brian: Exactly right, and part of the the fun part is, you know, every municipality has different targets of what they view their economic development to look like, and so we get to work with all those cities where some may be really focused on industrial, some may want to be bedroom communities and be focused on residential. Our task is to support those municipalities in this region and identifying good players to bring to the table. So who are people that we do want to partner with that can follow through on the projects that can complete them and make them successful?

Chris: That's great. I think I saw recently in the news the state of Texas, I think it's had something along these lines, but it's like a fund for the space-related projects and I know I don't know the name and you'll help me with that, but I seem to recall the governor being in town and making some big announcement right after the first of the year. Tell us a little more about that.

Brian: Recall the governor being in town and making some big announcement right after the first of the year. Tell us a little more about that, exactly, right? So last legislative session, primarily spearheaded by State Representative Greg Bonin, who's also a Princewood resident he's a neurosurgeon by day and State Representative Chairman of the House Appropriations Committee during the legislative session he had this kind of vision of how does the state become a major player in the aerospace community. That's been primarily a federal and private industry ecosystem and so under his vision and with support of the state legislature and certainly the governor, they put a bill that kind of outlined a direction for the state to engage and the resources behind it. It does a couple of things. One was it allocated about $200 million that would go to Texas A&M to build this A&M Space Institute, and they've actually located that property. It will be built on the edge of the campus of Johnson Space Center, so for those familiar with this area, right on Saturn Lane. $200 million building and, as A&M's laid it out, it will have a giant lunar rock yard and a giant Mars rock yard, with the idea that everybody who's going to be doing hardware testing to send vehicles to the moon or Mars is trying to figure out where they're going to do that testing. And it's very expensive to build, obviously. And so companies are making the decision whether they're going to build that themselves and own it or go lease it somewhere. And if they're going to lease it, where do you go to find a giant brockyard to simulate the surface of the moon? And well, the state of Texas answered that question. So what was so unique about that vision was that everybody who's in that ecosystem now wants to come through Houston Texas to do that work. And so with that comes the. You know they'll be have their lab space there, but they may need offices, they're going to be hiring people, and so you know it really is an exciting project. They had their groundbreaking right at the end of last year. I've seen surveyors out there and they think they're going to have it open in 2026.

So an aggressive timeline to get that bill. The other part to that bill was they appropriated $150 million for a grant program to incentivize sort of space leadership projects in the state of Texas, and so they have to set up a whole, basically administration portion of this. So they selected nine individuals to serve on the Texas Space Commission who will review those proposals and evaluate them and make awards. Who will review those proposals and evaluate them and make awards, and then they'll also help advise the state on how they can keep their leadership position in the space industry. The first of those awards about 20 million were released a little over a week ago. A couple of them were studies for best use for really cool stuff hypersonic corridors where to be landing sites. And then another one that is to build assets and capabilities for the Space Force in El Paso to have more of a Space Force presence in the state of Texas, which is pretty exciting. So I'm optimistic about what's to come for them.

Chris: Yeah, that sounds very exciting, especially the concept of the $200 million grant to A&M and what that will do to attract other businesses that might relocate somewhere else and bring them here, and then all the ancillary things around hiring and jobs et cetera. So that's very exciting news and I think it'll be just around the corner. Let's maybe talk a little bit about. You mentioned Maritime and the port, and most Houstonians People know the Houston port is a significant asset for our area. Anything going on there that's new and exciting, any kind of innovation that you see when you're working with those entities and, I guess, the port authority itself.

Brian: Yeah, well, maybe the first thing when you talk about the port is you're absolutely right just how important they are to this well, to all of Houston, but to the country I mean. The scale of the port is hard to appreciate when you just look at the numbers. But the numbers are just staggering. The amount of capability that comes through there and the innovation really is on the logistics and management for how they move, whether it's container, you know, container containers, the container terminal organization and how that whole orchestra is operated, and the capabilities from there is that the crane's getting stuff unloaded, then onto the trucks or rail or whatever. The mechanism to get it out and then get it distributed to wherever it's going is pretty incredible, and so we're fortunate to have them. We just hosted the new port CEO, charlie Jenkins, who's a phenomenal leader, has a career in service of the port, is the right guy to lead that organization into their next chapter. But he made this comment kind of in passing that the port's operations are about a $3 billion a day operation, you know, and you just go like a day of economic impact that go into that.

The scale is really something impressive and that's all the trickle out and secondary effects. But it's amazing, the big thing that's going on with them right now is Project 11. That's the deepening and widening of the channel that'll allow additional capacity to go in there, and it's really writing the story for what the next chapter of the port's future is and Houston as a trading hub is, and so it'll allow for larger ships to come through. The additional investments they're making will allow faster turn and movement of all the goods that are on there. So a lot of good stuff going on. I guess the last thing I'll say is anybody who's driven 225 sees all those trucks and I drive it pretty regularly and see that too and as much as nobody likes driving next to a giant 18 wheeler, every one of those trucks is jobs and prosperity for our region, and so the next time you're driving there and you see a hundred trucks going down 225, that's our economic prosperity moving around our region and, candidly, around the country. It's good stuff.

Chris: It's a good point. Yeah, I mean it's. You wouldn't want the roads to be empty and no trucks moving. I mean that's not a good sign. So feel blessed that we have all that you know in our area and driving all kinds of different prospects and opportunities for people. So when you are working with, let's talk a little bit about these member organizations and all the different moving parts you know what are you doing?

How do you, I guess, keep things organized and people kind of moving in the same direction? Just, I would think that in itself is a full-time job.

Brian: Yeah, it's a lot, but you know it's good stuff. I guess I'll start with a phrase that I kind of live by, which is we have a lot of stuff going on and so we'll find something to get on about. Right, we can always find something to work together on, and so, if you kind of start with that attitude, there's a lot of common issues that really require a lot of work but you can get maybe not perfect alignment, but general directional alignment. And so you know, one of the big issues we're working with right now is insurance. Right, we're all dealing with it. I'm sure you've gotten your insurance bill, but whether it's home or your business insurance, all those things, and so you can find a lot of commonality and ideas about hey, how can we work with our state leaders, potentially our federal leaders, with the insurance companies themselves, to try to manage the cost of doing that and find ways could it be grouping, doing kind of what they do in medical where you can have these larger groups or other mechanisms to try and help mitigate some of the costs? For that I'm getting a little granular, but you can find these little pockets where you can go move the ball down the field and get general alignment and so we spend a lot of time doing that.

But we are very fortunate that our membership and generally this is kind of a Texan spirit type thing is hey, how do we go get some stuff done? Right, we want to go work on some stuff we want to go work on together. Generally it's a rising tide mentality and I spent a good portion of my career in industry and there are times where we compete like crazy and that's fun and, you know, makes great products and great opportunities for our customers. There are a lot of times where we need the tide to rise and finding alignment about that we try to be an outlet for that and keep things running. Right Is that we have not a big staff but a staff that can help make sure that.

You know, our members are doing a lot of this stuff as volunteers, right, but they're bringing ideas to the table. So how can we make sure that they're staying engaged, that we're checking in on them, that we're helping carry these things and that we're creating a forum to have the right discussions and bring leaders together so we can invite in elected officials over relevant stuff, the right industry players, and bring them to the table and figure out what we can do, and then I guess the last thing I'll say is that manifests itself. We have a very active state legislative agenda. That we're going to be spending a fair amount of time in Austin, federal priorities. That we work with our congressional delegation and then very on the ground working with our municipalities and all the companies that are out down here to make movement.

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Chris: Well it is. You know legislature is in session, so I know that creates a busy time for you. You talked a lot about some of the opportunities and I hope we can talk some more about that, but I do want to ask you at this point what are some of the headwinds that you see you know this region and specifically kind of where you are. You know that could be out there. That you see you know this region and specifically kind of where you are. You know that could be out there that you've got to try to deal with, to get ahead of or navigate through.

Brian: I'll start with. It's a great time down here. Just the way that each one of those big five industry clusters is going about is that it's a. You know they're all doing well and have a lot of opportunity that's on the horizon or that they're in the midst of right now, but certainly you know, a few headwinds.

One of the things that we're always worried about and we work actively is just natural disaster flood mitigation and storm surge and making sure that we're resilient and prepared for the future, and so the risk from some incident happening. I'm more excited to talk about, when it comes to that, all the things that we're doing to mitigate that. In terms of flood mitigation, the coastal barrier protection work that we've been spending a lot of time on. That's the Ike Dike. It has a lot of names, but most commonly known is that but a system to protect us from storm surge. So one is the risk of natural disaster I don't like it, but it's a real thing, right?

The second is that we're in the you know how do we have responsible development?

And so when you have a project that comes online, there are, you know, reasonable concerns from citizens saying, hey, is this the best thing to be doing with this piece of land, and so anytime you're talking about a development that's going to take a field and turn it into a thing, people get concerned about that and that's perfectly reasonable for them to be concerned and want to do that.

And so part of what I spend time doing is addressing like, hey, here's why this is worthwhile, here's why this funds your local municipality and build more parks so we can have the resources and the tax base that justify expenditures that come elsewhere and make through that. But just the ability for the public's ability to impact development, as it happens, is important. But for them to do that knowing all the ground truth, knowing what the trades are and understanding that, so that if they are concerned about something that they come with that from an educated knowledge base and so that's out there. And then I certainly don't want to get political, but anytime there's an administration change, there's just priorities that get changed.

And so we're still waiting to understand all of those. We're kind of watching how things are shaken out in Washington DC and we'll adapt and make sure that we're doing everything we can to put our region in a great posture with whatever those priorities are at the end of the day.

Chris: So yeah, to that last point where you're kind of right in throws that change. Right now that's happening pretty fast, so you got to stay on your toes. Let me take you back to the Ike Dike, because that you know something to get after Harvey. Hurricane Harvey got talked about a lot. You don't hear much about it anymore. Any kind of updates for the listeners. That might be curious. Is it really going to happen and, if so, what's really going on down there to make sure it doesn't happen?

Brian: And if so, what's really going on down there to make sure it doesn't happen? Yeah, so it's still moving along, you know, and with some enthusiasm. So a couple of big milestones. One is that in December of 22, it became a formal project of the US Army Corps of Engineers. It was authorized by Congress as a project, so that says, you know, they can now go focus on that. And so the next big question becomes how do we pay for it? To answer that, the state stepped up in a big way in the last legislative session and they had previously formed what's called the Gulf Coast Protection District. That is the local entity for that project. That will work with the US Army Corps of Engineers. So that group exists and has monthly meetings. They actually have an office in our suite. We lease an office to them them and they have their meeting in our conference room two out of every three months and then they do a rotation on that. Third, and they've been funded to the tune of about a half a billion dollars from the state of Texas. So they're ready to take significant action.

We've been working with our federal partners about identifying where the big dollars come from for that project.

It's going to be expensive and it's going to take a long time, but it will be likely done in phases and so that allows it.

Where you don't need this one giant tranche of money all at once, you can do it sort of in a series and address the most important aspects of that, like the gates, some of the initial most highly populated areas, in phases. But we got to get federal appropriations for it. So in addition to the state entity being in our office, actually the US Army Corps of Engineers is on the fourth floor of this building and so all of the players for that project are in one building in our area right here, so that when what I'm hopeful for is if Corps moved in about six months ago, anytime an elected leader wants to come down and meet, they'll get every leader for that project in the same building and often meeting in our conference room or one of the core conference rooms. But a lot more can get done. There's sort of the opportunity for water cooler conversations between the state and the fed folks, and so I'm optimistic that the cadence just from that proximity will be helpful to that effort.

Chris: Very good, that's good to hear. Let's change conversation a little bit. So, as I said, you're the president of BHEP. You mentioned your staff. Let's talk a little about leadership. How would you describe your leadership style and how do you think that's evolved kind of as you've been in this role?

Brian: Yeah, well, I don't know that I can quantify terribly well, but I'm a kind of hey, all hands on deck and let's all just lean into wherever we're going. Right, and I kind of have that expectation of our team that we're have a clear set of priorities generally around the growth of this region and the projects that we're undertaking and that we're just leaning into them all the time and focusing. That I've been. You know I love getting down and into projects and so that's as I've been on this journey. That's been one of the big focus points to me is that you know you need a team to get this amount of stuff done and the size of these projects and the scope and so the ability to trust in the team and lean on them and let them go run with the ball is really important.

I've been extremely fortunate that we have a great staff and we have a great membership base that we can lean on to help go bring those things to fruition. But it's a lot of fun coming to work. I think the team has a great time and enjoy the work that we do and you can see the difference that we make because there are buildings. We can point to that, wouldn't, you know, if not for the work of us and the leaders in this community wouldn't be there, and I'm looking forward to seeing that one on Saturn Lane with giant Texas A&M buildings sticking out of it coming through.

Chris: It sounds like it's going to be impressive with the rockyards and all. But, you know, it made me think, though your team has a lot on its plate, I would think at times it may feel overwhelming. So, you know, what do you do to kind of help keep the motivation and keep the energy level up for a team that probably, at some points is, you know, starting to get to the end of the rope or run out of gas?

Brian: Yeah, diversity of projects and lots of different stuff to work on. I'm guessing and actually I'd kind of turn that question on you, chris, because I can only imagine the type of stress that you guys live under, especially working big cases and big projects. There's one part that is, hey, we're just all in this together, right, and the esprit de corps that comes with. We're tackling big projects and that's just part of what comes with it. But there's another part where you just need to shift gears for a little bit and work on something different and give yourself a little recharge time. But how do you guys deal with it? I'm curious how?

Chris: Boyer Miller, yeah that's a fair question to turn around on me. I would say it's similar. I think it's. You know to me that you can't underestimate the power of a team and if you have the right people on the team, there's some self-motivation just within that group, Right. And then I think it is the.

We are fortunate to have very diverse type projects. We practice in all industries. So we may be doing a, a deal or a project, but it's in a different industry and there's different nuances that make it exciting. And at the end of the day I think it's the one point you highlighted on you can point to something and we're helping clients achieve their goals. So we can, you know, point to a deal that's been done or, you know, maybe it's a merger of two companies, or one that's grown and now has a new building and doing whatever. But you can point to those successes that you, where you've helped the client achieve, you know something really big for them and their business and their life. And so I think all of that continues the motivation. Yes, sometimes at the end of a big deal, you need just a little bit of a breather, but you just jump right back in and get going. So it makes it fun.

Brian: Well, if you'll let me share. So you and I first met in person, had an opportunity to meet at one of your big forums, and that was a bunch of your customers and clients were there, and I love meeting new folks, as you probably saw, and I you know, walking around just saying, hey, I'm Brian, what do you do? And almost every one of them I would ask like, hey. So how do you know Chris, how do you know this group? You know, have you worked with them? And they all had a story. That was exactly that. You know, whatever thing it was that you helped them. We did XYZ project and it was awesome. We use them all the time for all these things. It was just very striking how passionate your customers, your clients, are with the help they've gotten from you guys, and so, anyway, that is extremely commendable and what I've seen from your team has just been amazing.

Chris: Well, I appreciate the feedback. It's always good to get that, especially from different sources. So you know, like I think, we're always trying to create raving fans so that they'll keep coming back and tell their friends. So you get a unique seat and I think it's similar. You kind of analogize back to us. I think we get a unique seat to work with Texas entrepreneurs, and that's a pretty cool thing to do, in my view. What's, what would you or how would you describe the Texas entrepreneurial spirit if you could, based on your experience?

Brian: Yeah well, I'm a native Texan. I have this hypothesis that part of the reason we're such a proud bunch is that when you go through I don't know if you grew up in Texas, chris but then also this sense of like we can do big things and big audacious things and we can make big asks and ask big questions and go get it done. And so we see a lot of that down here. And so you know, if you were sitting in I'll make this up Iowa and you said you know I want to have a space business and we want to go put hardware on the moon, and you know your neighbors would look at you and kind of scratch their head and in Texas they'd go oh yeah, that's intuitive machines and they're down the street, you should go. You know, go talk to them. They'd love to work with you. So that kind of spirit is really something special.

When I was in industry I traveled all over the country working projects. There's something very special about this region, this community, this state, and that translates into why people want to come here. You know we keep Texas and Houston keep winning all these awards for business, new businesses coming here, people moving here, and that's not by accident, it's not by coincidence. It's because we have a great, great story to tell, whether that's workforce and the capabilities, the affordability of being here, the caliber of people you can work with and who your competitors are, and the level of intensity in the game that we play here is high and that creates the right ingredients for a really thriving community, for entrepreneurs, but also for industry any size.

Chris: Right, very good. So what advice would you give to entrepreneurs out there that might be looking to start a business, let's say specifically, kind of within your region? If not, maybe beyond that in Houston? What's? Some of the advice you might give them if they wanted to get involved in some of the all the things you've been talking about.

Brian: Yeah, dive in. It's a great community and a great ecosystem and there's a reason people are investing here and making a great run at it. We try to make that as easy as it can be. Now it is not easy.

There's no illusions that starting a company you know scaling and growing a company all those things are very challenging. So the question I find myself asking I don't know that I'm in a position to give you know this immense amount of wisdom about these things, but what can we as a community and we as an organization be doing to help that entrepreneur? How do we help them build a relationship so that if they're having trouble with a permit, they know who to go ask, who to go talk to If they have a big idea, who might be good partners If they want to bounce something off, a retired executive who they might go talk to about that has the right skillset, so that we can create the conditions for them to be successful? And so that's really how we find ourselves interfacing that ecosystem is how do we put the right players together to go make things happen?

Chris: Very good. So the other thing I'm curious to know is what do you see? You mentioned your five big industries. What have you observed of those industries working together to create innovative ideas to help each other? You got to move forward.

Brian: Yeah, there's been a lot of. So workforce has been one of the biggest, especially over the last few years, where there's been this really high intensity competition amongst folks. And I wouldn't be surprised if you have been in some of that with, you know, recruiting and retaining high talent attorneys, right Is that? That's been, and so we've spent a lot of time and I've observed a lot of our members in this community go with that as a spirit of, hey, we're not really doing anybody any good If we're just poaching each other's people and you know, and creating pain points and friction between senior executives and those kinds of things. Let's go look at other communities and go figure out hey, what are the best universities and how do we get the professors that are training the students in it to send resumes to our area, right, and that we have a coalition of companies, not just one company has a relationship with one professor and that company benefits from that it's. How do we build that relationship as a community and say to them hey, we have a very strong demand signal, let's work together on things like that and so feeding that workforce pipeline so we're not divvying up the pie, we're growing it. And so, on the workforce side.

I hate to be cliche because everybody's talking about AI, but we've had a couple of membership meetings about it. We've been working with partners about integration of it. We've adopted different technologies that have come out of it. But that stuff really, I mean it's the wave that we're living in right now, and so the integration of that into systems, both the how to do it and the mitigation of risk. I think I saw over the weekend that the new DeepSeek had a big not terribly surprised, but had a giant data leak and compromise, and so when you know when you're using that, I can only imagine, chris, I'd be curious how y'all are integrating it. But you know everything you put in there. You got to assume that at some point, somebody you don't want to have access will at least have the opportunity to have access to it, and so you have to be quite careful about how you integrate it. I, just as an aside, how are you guys using it much? Have you all banished it? What's the?

Chris: Well, I'd say it's a little bit of both. I mean, we are definitely looking at and finding ways to integrate it. We've adopted a policy, but it starts with, as you mentioned, with us. It starts and stops with maintaining client confidentiality. So there's some systems out there through recognized kind of legal researchers. So Westlaw comes to mind, where they developed AI tool that is solely within their database. So it's secure, it's, it's all legal. You don't have to worry about we were still spot. You still have to check things right the human element of that. But if you're searching, for example, using the AI tool within Westlaw, you don't have to worry about the fake cases you've seen in the news. But our attorneys, you know, if you're going to use it, it has to be approved through the firm which are only a handful. You can't use anything outside and everything has to be double checked by a person to make sure for accuracy, etc. But so it is. I mean, the confidentiality side is a real concern, not just for law firms, for everybody, any company using it, and unfortunately that's just gonna be more and more what we see right. The more that we're moving everything to cloud, you're going to have people coming after it to try to. You know, on the bad side of that and certain countries it's not illegal to be a hacker. So it's just, you know, that's the world we live in now. Yeah Well, you know, brian, this has been a very interesting conversation and the you know, the last time we spoke I came away with the same feeling, and that is, we talked a lot about a lot of opportunity going on in the three to six o'clock region of greater Houston and we didn't even scratch the surface, I'm sure.

But my takeaways have been it doesn't matter what industry again, I said earlier, you always kind of automatically think of space and NASA, but it's every type of business you could think of. An industry you could think of Sounds like you've got ample opportunity for businesses and entrepreneurs to start, grow, expand and be there and thrive.

Brian: Well, perfectly said, and I think we get a recording. I may use that in some of our promotional material. Chris, that's exactly right. Great time, great place to be and welcome folks to reach out to us to help however we can if they're interested in looking at opportunities down here for that Before I lose you. Chris, one of the favorite questions that you had sent over that I wanted to ask you that you didn't get a chance to ask is what your favorite recreation vacation spot in the state of Texas is.

Chris: Well, I'll answer that. I was about to ask you that. I would say if it's kind of a vacation spot in Texas, it would probably be anywhere along the Texas coast to relax a little bit and get some fishing in.

Brian: Perfect.

Chris: How about you?

Brian: We are huge campers, like we love going camping. My kids are eight and 11 and we have state parks pass, and so any day I'm in a state park is a good day for me. But Inks Lake is one of my favorites and McKinney Falls between the two of those. Those are my top two right now, but we've probably been to Keene and we're just checking off the box to hit them all, and maybe we'll upgrade to National Parks as we get a little bit older. But I love our visiting our state park system. They're just absolutely wonderful.

Chris: That's great. Okay, last question You're native Texan, so do you prefer Tex-Mex or barbecue?

Brian: Oh, I feel like that question is going to get me in trouble, but if you made me choose, I'd pick barbecue. I'll eat it all day, every day, as it shows how about you, how about you?

Chris: I think it's a tough one, so I've had some guests. You know, it depends on the day. I probably lean Tex-Mex more than barbecue. But I love the restaurants now that are combining the two, so brisket tacos or brisket nachos or something like that. It's a great combination.

Brian: Yeah, there should be an answer all of the above there.

Chris: So we're getting close to the rodeo time in Houston, so I have to go with barbecue for now and then back to Tex-Mex, I guess.

Brian: Well, I look forward to seeing you at the kickoff event, where we get to go sample a little everything. Deal, that sounds good. Well, I look forward to seeing you at the kickoff event, where we get to go sample a little everything.

Chris: Deal. That sounds good. Brian, thanks again for taking the time. Really appreciate your friendship and definitely appreciate what you and your team are doing for all the things business down in the Bay Area.

Brian: Well, right back at you, Chris. Thanks for your leadership and all the great work you're doing with your team. Appreciate the opportunity to visit with you today. Thank you.

Special Guest: Brian Freedman.

In this episode of Building Texas Business, I met with Chris Gillman, President and CEO of Team Gillman, to discuss how technology is transforming car dealerships in Texas.

I learn how his team uses AI and virtual assistants to streamline customer service, enabling online car purchases and digital service scheduling. Their approach to technology has improved both customer experience and internal operations while maintaining strong relationships with car buyers.

Chris shares his path from general manager to business owner, including a key moment when he had to terminate an employee who broke company policy. This experience taught him about insurance requirements and legal considerations that protect the business.

We explore how Team Gilman adapted during COVID-19 by focusing on company culture and employee development. Chris explained their strategy of reinvesting in staff training and using customer data effectively, which has supported steady growth without aggressive marketing tactics.

Show Notes

Previous Episodes

About BoyarMiller

About Team Gillman

(AI transcript provided as supporting material and may contain errors)

Chris Gillman: I look forward to it.

Chris Hanslik: So let's just start by telling the audience about your business and maybe a little bit about how you got into the business.

Chris Gillman: Okay, well, last name's Gilman Been, a family name here in Houston since 1938. I'm a third generation car dealer. We started off in downtown Houston with Pontiac and GMC at the corner of Milam and Pease, and then my father took it over, ran it, did everything, built it all the way up, and I've kind of taken over kind of since then, since my father's passed away since 2011. We roughly have around almost 800 employees and we do roughly around 18,000 cars a year here in Houston. That sounds like a pretty big volume. It's definitely a small family business.

Chris Hanslik: Yes, I think it's pretty good volume. Yeah, it sounds like it and so let's you know. Talk about. There's a lot, especially at the beginning of the year, about looking ahead. There's been a bunch of conversations in the last two years about AI. What are some of the emerging technologies that you see now or may be coming as it relates to your industry?

Chris Gillman: Well, right now, one of the big things is almost 20 to 30 percent of every service appointment. When you bring in your car for service, when you set your appointment, you are actually talking to somebody. That is an AI virtual assistant that is scheduling your service appointment for you and you actually think you're speaking to a human and that is setting up a pickup and delivery. Or hey, I need to drop my car off at three o'clock, I need a loaner or I need a shuttle you're actually dealing with. I don't want an ai virtual voice setting your service appointment kind of like the virtual assistant. Yeah, it's full-blown. And also, a lot of times, if you're setting an appointment to come in, to come test drive a car, there are tools right now that we are utilizing to streamline and make and make the car buying and the servicing of your vehicle a lot easier.

Chris Hanslik: I'm sure most people will love hearing that because almost like death and taxes. Most people say you talk about buying a car and they just like poke a needle in my eye because it's such a painful process yeah, it's you's.

Chris Gillman: You know back from way you know me being 47 years old. You know buying a car the way it did in 1985 and 1995, hell, even in 2005,. It's completely different. Now you can get in and out of a car dealership with not only an hour and a half, but the days of, oh, let's go haggle and beat up and go negotiate and oh, hear me roar. Those days are gone. If you want to make the car buying process difficult, you can, or you can make it very simple.

Chris Hanslik: Well, you bring up a good point, though right, with the consumers much more informed these days because of the internet way more, and so which?

Chris Gillman: is great. By the way, an informed buyer is a better buyer, you know. You know what it was in I think it was 2010. Your average consumer used to visit 5.2 5.5 dealerships before they bought a car. Now it's like 1.3 wow, yeah, so more efficient way.

Chris Hanslik: More efficient? I don't. I mean. My sense is that's common across a lot of industries. Right, and with the age of the internet, more price comparing and shopping online and things like that oh, it's just like buying a home.

Chris Gillman: You see all the photos online and you look at it and go. You know, you know, back in the day you used to go visit 20 different homes before you bought it. Now you might only look at three.

Chris Hanslik: That's a good point. So you got dealerships across the greater Houston area, 800 employees. Anything that you know we talked about technology for the consumer, anything you're using to kind of help hire, manage, train employees, that is kind of innovative. Or using technology to help you there.

Chris Gillman: Some of the technology that we're using. You know I'm not here to promote a payroll system or anything like that, okay, but you know we've been able to lower our HR staff by using a company called Paycom.

Chris Hanslik: Okay.

Chris Gillman: And also our hand. Also our digital handbook is in that we have training videos and all that. That's from the employee standpoint, from the consumer standpoint. We use a company called Reynolds, and Reynolds they're a Texas based company, or they have a company in Dayton Ohio, but they started off in Houston. There's a thing that we call DocuPad, where you do the whole car deal, everything. It's all digital. It's no paper, it's all digital and we are able to also I don't want to use the word FaceTime, but if you are remote, we're able to do a virtual go back and forth so you can sign your paperwork while you're sitting at home or at your office or you can be on a boat fishing if you want to do it, and you can do your whole car deal and you don't actually have to come into the dealership.

Chris Hanslik: That's amazing. I've experienced the DocuPad. It looks like just you're sitting at a desk.

Chris Gillman: Yeah, it's a gigantic iPad.

Chris Hanslik: And I've seen you I mean in action when you have any car that you know you have access to under your umbrella is for sale. I think we were on a day trip and you sold a Tahoe.

Chris Gillman: Yeah, just it's. You know, no matter where you are, you know you can have a tablet or a phone and you can do a whole car deal everything right there and there. You see, you know if you think about it we're in the world of the now, yeah absolutely and that's you know. The world has taught, Amazon has taught us that you could buy anything in three clicks. Well, if you want to go buy a $50,000 car in three clicks, I want to be able to provide that for you, sure.

Chris Hanslik: So you know, I think we all, born and raised in Texas, very proud to be. What do you see as some of the advantages of having and starting and growing a business in the state of Texas?

Chris Gillman: The state of Texas is very pro-business. The state of Texas likes it for people to have employees to create business, to create I don't want to say an economy, but you're generating taxes for them, right? Sure, so they are pro-business and that's, and the state of Texas likes that. And there's a lot of car dealers that wish they were car dealers in Texas that aren't in Louisiana, colorado, california.

Chris Hanslik: Yeah, there's a lot. So those are some of the positives. Any challenges or headwinds you see coming maybe specific to your industry or just in Texas in general about operating here.

Chris Gillman: Well, just from like Texas, they've just passed a new law and the new law is today's pre-owned vehicles do not need a state inspection on the car. Well, what I mean by that is the car does not for you to get a new registration for your new license plates, you don't have to have a state inspection. Well, you can now have a car with one headlight seatbelt not working, the emissions terrible, bad tires, no brake lights. That is just unsafe for the state of Texas.

Chris Hanslik: It seems that way. I'm not sure I understand the logic.

Chris Gillman: I have not a clue. I spent a lot of money lobbying and a lot of time in austin texas fighting that deal and I lost really so I'm just curious what was the lobby? It was the support of saying that it is getting rid of the state inspection because that state inspection it hurts the average texan of paying a fee of $25 to have them inspect their car for a safe vehicle.

Chris Hanslik: So my view that falls in the definition of penny wise pound foolish.

Chris Gillman: You know, in the famous words of John Wayne, you can't fix stupid.

Chris Hanslik: So you know, talk a little bit about you know your management style and kind of your approach to leading your team of 800 there at Team Gilman. You know how would you describe your leadership style?

Chris Gillman: My leadership style. I've kind of inherited from my father the ready fire, aim type mentality, but something that my father beat into me a long time ago hire people that are better than you. Hire people that are smarter than you. Pay them what they deserve, I mean you know God forbid.

you pay somebody what they're worth, right? You pay them what they're worth and get out of their way. Let them do their job and also give them the authority and give them the power to make decisions where they don't have to be overlooking their shoulder, and let's not rule by a committee. I know these are all buzzwords I'm saying, but in all honesty, let them eat, let them earn, let them do what they need to do. You're wanting to hire them for a reason.

Chris Hanslik: Put them in let them go, Tell them the job you expect them to do and give them autonomy to do it Correct.

Chris Gillman: Say this is your sandbox and give them autonomy to do it Correct, say this is your sandbox, these are your rules. Go build and you know a lot of employees. I would rather have to pull the reins back on them than go have to kick them.

Chris Hanslik: Yeah, I use. I'd rather pull the reins and crack the whip all the time around here. Right, it's so true. Right, you want someone that has that ambition and the initiative to go do stuff.

Chris Gillman: Yeah, there's you know you can't teach hustle, you can't. You know you can tell when you were talking to someone. Okay, that person has drive, or that guy's a popcorn fart. Well, I mean, it's true, right. So I mean, at the end of the day you look at it and be like, yeah, no, that guy's just, or that person is just not going to get it done, or you look at him and go that guy's going to get it done, but I know I'm going to have to pull the reins back on him.

Chris Hanslik: Yeah.

Chris Gillman: I would rather surround myself with that guy and then go. Okay, by the way, we'll work on polishing you later. Sure, Sure.

Chris Hanslik: Right, it's something to work with, right. So you know, you say you kind of, over the last what 13, 14 years you've been building this company, what are some of the things that have occurred along that journey that you maybe surprised you and wish you had to know, and kind of those hard lessons that you learned along the way.

Chris Gillman: But man, you're like man. I'm gonna try to use the word empathy and feeling bad for a situation verse what happens from a business insurance legal world. We had a technician that was working on a car after hours, illegally, with another employee as another employee's car, and the company policy is you have to have a ticket, a repair order, on any car that's in our shop. That is standard rule, that is rule number one. Rule number two working on an employee car is especially, you have to have a manager signature. Number three you can't be working on a car after hours without the shop being open, with management around. Well, this technician and this his buddy, both of employees working on a car after hours. The car goes up on an alignment rack, they don't fully secure it, the car falls down and the car falls on the employee's head and his jaw is just dangling. I mean, it's just terrible. Right ambulance comes. He rushes to the hospital. I find out I was like, oh my god, I'm at home. It's like 8 o'clock at night, I run the hospital. You know, at the time you new, fresh business owner Dad's passed, got all this stuff, like what. So I call the attorney, insurance agent, people. What do I do Right and he goes. Did he violate company policy? Yes, he did. He goes.

When you first see him fire and I'm like, have you lost your damn mind? This man is in the hospital car and he goes. Chris, the violent company policy yeah, yes, you have to fire him and I go, but his jaw is dang. He's in this hospital. This is bad. He goes, chris, if you don't do it, I will drive down there and I will do it for you. You need to fire him. And I was like, oh my God, so will do it for you. You need to fire him. And I was like, oh my god, so I went. I saw this guy and had his mother and his sister, his girlfriend, a bunch of employees are all in the lobby like oh this, you know, poor guy, and I fired him.

I felt is like a piece like, like just a piece of sand, like a piece of grit, you know. Yeah, and that was the defining moment of knowing, okay, I now live where I was just a normal general manager employee. Now I've gone to business person owner. This is the world now I live in and to me that was like a turning point of know your insurance, know the law, know the HR and when an incident happens which something will always happen, no matter what make sure that when you make the phone call at that time you have somebody you trust that will give you the right advice so you can make the right decision. Because the employee sued anyway and they lost because we did everything by the book, right. But my normal mindset would have been like, okay, let's do this, you know, and I would have done it, I would have handled it differently, but the attorney told me to do it like that. So have good representation, that's a good point.

Chris Hanslik: Look, there's the, especially with us being a law firm.

Chris Gillman: Yeah exactly by the way Boyd Miller used them.

Chris Hanslik: Yeah, the. But there's a fine line right of that, as the leader and owner, having to make some tough calls to protect the business while still trying to show some compassion and empathy towards your employees, because you want to retain good employees, you want to have loyalty amongst your employees where they are true team members, right, and so it's finding that balance. It's not easy.

Chris Gillman: Well, it's also that during the hiring process, you know you have someone that has. You know we do background checks on you, okay, and let's just say, let's say you have some bad stuff on your background, right? Well, it's my job to have it. So when female employees come to work, they know that the 879 other employees people, right, you know you have to have that good work environment instead of going okay. By the way, we've got a guy over here. He's been a past felon. It was 10 years ago, but hey, it's 10 years ago, it's past. Like no, I mean, that's probably crossing some of the HR laws right now, but I background check you and if you're a famous words of what Trump says, you're a bad hombre, I don't hire you.

Chris Hanslik: Oh man, that's good. So what would you say if you were advising a young entrepreneur, maybe about to start? What are some of the biggest lessons that you would want to pass along? Maybe one or two, maybe three things of. Here's some things that you ought to consider that I did, or I've seen others do, that worked.

Chris Gillman: You know, the number one thing I would definitely say is you're going. I'm going to use this example and tell it to a lot of people. At one point in time, babe Ruth was the home run king. He was also the strikeout king. You've got to keep swinging and there's going to be failure. You're going to stub your toe. You've got to find a way every day to get back up on the horse, get back in the saddle, get back in that car, drive your ass to work, figure out a way. It's going to work out If you believe in it and you do it and you hustle and surround yourself with people that believe in the same thing that you do. And just, you've got to keep fighting. It's the fighters that work and people are like oh, that's just cheesy as shit. You know something? I've never met anybody that has started their business and said you know, it just fell into my lap.

Chris Hanslik: Yeah, I'll tell you this. I mean we're, I don't know 80 some odd episodes into this podcast and everyone that's come on has said it was harder than I thought. It will be harder than you expect it to be. Expect the unexpected Right. All those things Right, Because it's not easy.

Chris Gillman: It's not easy, but if it was easy everybody would be doing it, yeah for sure.

Chris Hanslik: So part of that to get to success is you've got to be profitable. Yeah, so let's talk a little bit. I mean maybe your mindset and how you balance getting the short-term profitability to keep the business going against long-term sustainability.

Chris Gillman: So one thing I'm going to say, and people kind of get mad at me for saying this, but profit is not a bad thing.

Chris Hanslik: Period, period, end of story.

That's what you're in business for that's why I'm in business.

Chris Gillman: Okay, return on my investment. Not only you need to reinvest into your employees. If you reinvest into your employees, they will bring back profitability and make your business go longer. Put the money back into your employees. That's number one. Number two there's a big thing that we're currently doing is I use the word data mining. Data mining is I'm taking my own current customers that are doing business with me in the service department. They're driving a two to three year old car and I just look at him. I go, hey, would you like the exact same car, one trim level up, at the exact same payment?

and the customer goes you're telling me if I can get 2.9 for 60 months. The exact same car, but now this car has leather as a sunroof, has navigation, has Apple CarPlay and they have the exact same payment. Sounds Sounds too good to be true and I go, yeah, and they go, yeah. That's a no brainer. I've spent zero advertising dollars, right, yeah.

Chris Hanslik: So you're just looking at what the data you already own.

Chris Gillman: Right, I own the data. It's managing my own data and then, I'm leasing that customer and I'm currently doing gas and go. The only thing you got to do is put gas in the car. I cover your maintenance. I cover doors, dings and whatever road hazard stuff on your car. The only thing you got to do is put gas in it and then, when you're done, come back, come get another car. So I am creating my own market so I could be sustainable.

Chris Hanslik: Yeah, so like a reoccurring revenue, almost like software licensing right.

Chris Gillman: Exactly. But I'm doing that with my own customer base so I don't have to rely on going to go get new customers to go battle 16 other Honda stores, eight other Subaru stores and we're all fighting for that one customer, over $100 on the price of a car. I'm keeping my current customers happy so I don't have to play in that crazy. Oh, let's all go cut each other's throats price war.

Chris Hanslik: Yeah, there's so much truth to that. To me, that is transcends in across all industries. We always find ourselves, I think, trying to get the new customer and we lose sight of the existing right and we have this existing customer base. That's gotten our business where it is, and not that you don't want to grow, but you can grow the existing base. You can grow revenue and profit from your existing base if you're smart about it, and not that you don't want to add new customers too right, but it's that current customer already likes you.

Chris Gillman: You already have good csi. Well in the industry it's good is customer satisfaction and index. I like to call it constant source of income right yeah, and so your current customer base is. That's where your money is. That's what you need to focus on. You don't need to go focus and go spend thousands of millions of dollars to go find new customers. You already have people that are happy with you already yeah, no, you're right, it's.

Chris Hanslik: Yeah.

Chris Gillman: You don't have to convince them no, you don't have to give it and they're coming back into your service department anyway. So so they bought the car and they're servicing with you. I mean, do you need to get hit over the head with a two by four? Hey, they already like.

Chris Hanslik: Yeah, so you mentioned something to the first point you said was reinvest in your employees. Yeah, when you? When I think about that concept, and which I think is very true, it brings up to mind culture. Right, you're investing in your employees. You want them to like where they are, you want them to see opportunity. How would you describe the culture that you have built or trying to build at team gilman?

Chris Gillman: number one. We are trying to build this thing daily on a culture right. So whatever the vision is I'm sorry, the vision that we have up on top, we're trying to really push it down and sometimes the culture from the bottom comes up and we find a way to meet it. It's you know I don't want to say how do I say it. I want you to treat everybody kind of like it's your grandmother right Right.

You know, if your grandma's in the room, if you feel like that's something bad, you shouldn't be doing it right? You know don't ask, don't tell someone to do something Unless they've seen you do it first. You know, if you ask someone to go pick up a piece of trash while you're walking around the car lot because trash blows, you know that employee's not going to pick it up unless he sees you do it. You know, lead by example, right. You know, doing stuff like that Giving back into the community, being the SPCA, doing it with dog shelters, buying dogs and training them for blind people, stuff like that donating to cancer, whatever charity that we have going on I want the employees to know that not only am I giving back to the community, but I also want them to know that, hey, your kid's soccer team, your kid's football team, I want to sponsor it, I want to take care of it, and they also feel like it's a good thing for them yeah, okay, so that inclusive, we're going to take care of you.

Chris Hanslik: Yeah, we're going to take customer right.

Chris Gillman: So like during covid, you know I'll probably catch a lot of shit for this, but you know, hey, it is what it is.

Chris Hanslik:During covid, new car supply was non-existent the inventories went down, right prices went down everything.

Chris Gillman: Well, I needed also used cars to sell. Well, the only way you get used cars is to take trade-ins, right. Well, we normally trade company average around 50. So for every 100 new cars you sell, we get 50 trades. Well, I sat there and I said hey guys, we need to be trading around 80%.

I have people that need to buy cars and I had some people get mad at me. They're like well, what happens if I don't have a trade? I got 20%, but I'm not selling you a car. They go well, that's just not fair. And I go well, okay. Well, I got 20%, but I'm not selling you a car. And they go well, that's just not fair. And I go well, okay.

Well, out of my 800 employees, how about I just have to go fire 160 of them and we'll see what's fair? You know it's make you mad or go fire these 160 souls that have nothing to do with it, because the economy is something it wasn't. It wasn't something that I did as a bad businessman. It was just because of a virus or whatever. Right, and next thing I know is they have to lose their job. So I made business rules to keep these employees intact. Now, did I piss off some customers. Yeah, I did but did. But at the end of the day I kept my 160 employees and at the end of the day I put my employees first, over the customer. And some people might disagree or agree with that, whatever, but I put my employees first and that's what makes me successful.

Chris Hanslik: I think that's what you've got to do, so they take care of the customer, right? Yes, because if you have customers with no employees to service them, you're not going to have that customer very long either, right? So that makes sense. What were some of the? You mentioned, obviously the shortage of new car supply.

I mean, you know, it's nice to kind of be turning the page into 2025 and we're five years now from 2020, which you know is you know a distant past, but talk about some of the leadership challenges you face in keeping the company together, keeping all those employees together oh, well, you know, finding good people is hard.

Chris Gillman: It is really hard. There are some benefits to COVID, you know. I mean you hear, you know let's talk about Texas business. Okay, sure, there's a lot of businesses. Talk about Texas business. Okay, sure, there's a lot of businesses that had record years during COVID.

Chris Hanslik:Okay.

Chris Gillman: Some of them failed, some of them dive bombed, but some guys they had not only record years, but it was crazy. So let's talk about that elephant in the room. Right, there are some people that just got overpaid during COVID Period, end of story. And it wasn't because of their stellar management style, it wasn't because of what they did or what they brought to the table. It was the market that got them overpaid, right, and when COVID went down, then now they have to get back to working, get back to doing follow-up, get back to the basics, get back to the foundation of whatever industry that they're in. And it's made some people lazy and it has created a vacuum or a vortex of people hopping around different businesses because they keep chasing that COVID number that's out there and some of them have come to, okay, you know Now, some of them, it's made them lazy.

Chris Hanslik: I've seen it. I call it the COVID malaise. Yes, and just saying we're five years removed and it's still out there.

And it's still to me, one of the biggest impediments to your business achieving its fullest potential Right Is getting people. So many people came into the workforce at that time, yeah, and that's all they knew. And they don't know any different. And I mean, was it yesterday, in the last day or so? Right, jp Morgan, everyone's back to work in the office five days a week? Absolutely. Amazon announced it in what October or so, but it started this week and I said for a while that was where the pendulum was going to start swinging back and it's back there where the hybrid work. I don't know if it will ever go away but it is going away in big numbers.

Chris Gillman: I had salespeople come to me and go. I want to work from home. And I went great, knock yourself out. And they were like I'm at home. I've, I've been at home now for 10 days and I haven't sold a car and I go, yeah, because no one's knocking on your home door to come by a car.

Chris Hanslik: They're knocking on my door, I mean some of them. It just makes sense, right?

Chris Gillman: I mean it's just like a you know, some people just need to stay home, I guess. Right, well, it's, you know, covid.

Chris Hanslik: Decisions have consequences.

Chris Gillman: Yes, they do.

Chris Hanslik: Yes, they do. So let's talk about you. Look back since 2011, when you took over. What's the one thing you're maybe most proud of at this moment? Knowing that you still have goals ahead of you.

Chris Gillman: I guess one of the things that I look at each dealership like. They have their own heartbeat, you know, instead of making it a blanket, okay, these are the business rules at all. Yeah, we have our basic foundation rules, but each store has its own little heartbeat, you know.

Chris Hanslik: And that's from a business standpoint.

Chris Gillman: You know, I grew it from three stores to eight stores, so we we've doubled it up, almost tripled it. By the end of this year year we should have a night store. So I would have tripled the business. And just, we're just having fun, man, you know, just having fun, that's, yeah, every day's a new day and I'm not here to be cheesy when I say it, but it's, I don't think I've had one bad day. We're just having fun and every day's a new day and we're just kind of throwing a pickle on the windshield on the window. We're just kind of throwing a pickle up on the windshield on the window.

We're like let's just see what happens, man you know. So we're having fun, so I'm sorry that's such a cheesy answer.

Chris Hanslik: No, look, if you can't have fun, it's. I mean you won't be able to make it through the tough times, right, right and then they're going to be there.

Chris Gillman: So if you don't love it, you know you're, you're in trouble.

Chris Hanslik: Yeah, you're definitely in trouble. So well, that's great. I'm going to turn a little bit to some just going to be texas related things. Okay, tell us what's your favorite kind of maybe vacation spot in texas or a place to visit I think south texas is the most prettiest place in the world.

Chris Gillman: You know, some people might look at a cactus or or a mesquite tree, but I look at him. You're like, well, that's just a thorny little bush man, but it's too. I love to hunt and I love to fish, so I love South Texas. I love lower Laguna, madre, I just died that whole ecosystem, everything down there. I think there's nothing better in life having a margarita looking at a South Texas sunset man. I think that's just. I think that's the most awesome feeling in the world. I'm sold.

Chris Hanslik: I couldn't agree with you more. Well, kind of continuing that then. What about you know? Texas traditions, houston traditions, anything that you just love to do every year?

Chris Gillman: So I have been fortunate enough. You know, one of the staples here in Houston is the Houston Livestock Show and Rodeo, so I'm one of the announcers for Mutton Bustin'.

Chris Hanslik: Okay.

Chris Gillman: One of the volunteer gets you know. It's just a, it's a, it's an eight second ride for a little five year old, right and a fistful of wool Right. Literally it's a. You know, when they fall off that sheep it's a face full of dirt and a lifelong worth of drift of memories. Yeah, so I love the houston livestock show and rodeo only because I'm an announcer. As a kid my dad used to take me to the art car parade and so now, because of the financial situation, I'm in team gilman automotive, we are the main title sponsor and we have kind of built back up the art car parade. Okay, that's every year, that's in april, that goes up and down allen parkway I've been it.

Chris Hanslik: I mean, if no one, especially if you're listening and you're in the greater houston area and you haven't been right, you owe it to yourself to go at least once it's definitely.

Chris Gillman: you know, I was sitting there talking to a bunch of kids the other day and all these kids, all these different schools that I've donated some cars to, and they're like what's the one thing?

that you can tell us and I go. Creativity takes courage and you know something? Amen, be creative, decorate the car, express it, do whatever you want, and let's just hope to God, the car runs in April so you can go up and tell them I'll impart quality, you know, because there are some cars, man, you're like, ooh, this thing needs some extra oil, right? So those are probably my two Houston things that I do tradition-wise.

Chris Hanslik: All right, I love it. So last question do you prefer Tex-Mex or barbecue? Ooh, that's a bold that's tough.

Chris Gillman: Save the hardest for the last.

Chris Hanslik: That is tough man.

Chris Gillman: I love crispy tacos man. I the hardest for the last. That is tough man. I love crispy tacos man. I mean, if you have a great three, three crispy tacos, I think everything else in the restaurant is good.

Chris Hanslik: But it's also it's hard to beat a good dry chopped beef sandwich oh well, the crispy tacos you have to actually be able to eat right. Some places you know they're already in the grease and you can't pick them up.

Chris Gillman: Yeah no, no, I'm the standard. I like old-fashioned Crispy tacos man. All right, I'm Texas, it's crispy tacos. Got it, chris? This?

Chris Hanslik: has been great.

Chris Gillman: Oh, thank you so much.

Chris Hanslik: Really enjoyed the conversation. Congratulations for what you and your team are doing, not just with your business, but what you do for the community. So with your business and what you do for the community, so really appreciate it. I appreciate it, thank you for having me.

Chris Gillman: And if anybody wants to buy a car? It's teamgillmancom.

Chris Hanslik: There you go, all right,

Special Guest: Chris Gillman.

n this episode of the Building Texas Business Podcast, we dive into the entrepreneurial journey of Summer Craig, founder of Craig Group, a strategic consulting firm. Summer shares how a vacation epiphany led her to start a business while caring for a newborn. Her firm now partners with private equity-backed companies, helping middle-market businesses transition from startups to structured entities ready for expansion.

We explore the early challenges of entrepreneurship, including securing initial revenue from clients like Gulf States Toyota. Summer discusses how the COVID-19 pandemic unexpectedly fueled growth in the middle market and healthcare sectors. She emphasizes the importance of building high-quality teams through strategic hiring, focusing on complementary skills and an ownership mentality.

Craig Group stands out with its hands-on approach and a patent-pending software platform for sales and marketing forecasting. Summer highlights the significance of creating a flexible work environment that prioritizes excellence and authentic client relationships. Her innovative approach to consulting demonstrates how companies can adapt and thrive in challenging business landscapes.

The conversation reveals the delicate balance of cost-saving strategies and necessary investments. Summer shares insights into maintaining a remote work culture built on trust and continuous improvement. We learn about the power of problem-solving, client feedback, and the determination required to transform business challenges into opportunities.

Show Notes

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About BoyarMiller

About Craig Group

(AI transcript provided as supporting material and may contain errors)

Summer: Thanks for having me. I'm glad to be here.

Chris: So I know there's a lot for us to talk about. I want to start with giving you the opportunity to tell the audience who your company is and what are you known for.

Summer: Yeah, absolutely. First of all, I love your podcast. I love what you're doing, telling people's stories, so I'm glad to be here.

Chris: Thank you.

Summer: Yeah, my story is a unique one, very interesting. It actually started with an actual epiphany that I had. I had a true, you know, entrepreneurial lightning strike moment. That that moment was sitting in Frisco, colorado, on vacation, while rocking my three month old third child, which is never the time that you should start a company.

But I but that was my I had an epiphany, and the epiphany really was this that I was always going to work very hard, I was going to outwork the people around me, I was going to outwork my peers and I was in a fantastic role, fantastic job. But I had the epiphany that if I was going to always work that hard, no matter what, I could create more value for myself and for the economy by starting my own firm. And I knew that I needed to start my own firm because of that that, if I'm going to always do this, why not build something instead of working for someone else and creating value for somebody else? So that was the epiphany, and it was a true anxiety ridden, sweat inducing moment when I knew that I was going to start a company, you know, despite having a newborn third child. But fast forward. And you know, we're five and a half years later, and you know, we have a firm of 32 people and it turns out the Epiphany was the right way to go for me, that's a really unique story.

Chris: And I'm sure your husband thought it was part of brain fog, but you proved him wrong.

Summer: Yeah, actually he's been nothing. I think he said okay, sure, you know a little bit, maybe a little more, thinking like oh, we'll see what, we'll see what actually happens here.

Chris: Okay, so. So it sounds like the inspiration for you was I want to do this for myself and build something that's mine. Tell us what it is that you've built.

Summer: Yeah, absolutely. So what we've built is we built a strategic consulting firm. So we consult with sponsor-backed typically private equity-backed portfolio companies. We really focus on the middle market, lower middle market. What we do with those companies is we come in at different phases in the hold period even pre, even in LOI and we support top line organic growth. So we've built a system of tools and a system of really smart people and a platform that creates a formulaic way to streamline processes, streamline people, streamline technology for growth in these companies.

The solution is really right size for companies that have been really successful but haven't really worked on their operations and growth. So they're selling whatever they're selling widgets, whatever it is but have they truly really looked and said is there anybody else I could sell to? Could I be doing something better? Could I be faster, could I do this more cheaply? They haven't really had to do that, but when the PE sponsors come in, you definitely do have to do that and what we're finding is that in a lot of in-house and PE there is a trend of hiring operating partners, which is a newer trend. So some have expertise on top line growth, but for the most part, that expertise is not in-house. So the PE firms need to go outside of their doors to get support to help these firms grow.

Chris: So it sounds like you take a company that's almost been successful, despite themselves. That's right and help them systemize that that's right, so that they can maybe leverage it for more success.

Summer: Well, yeah, and I mean I hope some of my clients are listening, but many are in Texas and I'll say it's so impressive, a lot of industrial manufacturing it unbelievably successful, either family businesses or entrepreneur-led businesses. But you're right, they haven't really had to. I'm using, you know, using air quotes here, but try that hard because they've had a great product right they've had a great story.

the entrepreneur, the founder, had a really great connected network right, so that gets you to a certain amount of growth. But then when you have, you know, pe dollars coming in who are betting on you, there's a growth mandate and the growth mandate that that activity to grow is not the same as what it takes to start a business, so growth is harder and it takes more structure, and that's exactly right.

We come in and say, man, this is awesome, how can we take what's awesome, do more of what's awesome, and let's try to reduce some of the risk that you have in the business, probably because nothing's repeatable, nothing's written down, maybe there's no technology supporting system, so we help them build that structure.

Chris: And it helps them go to scale.

Summer: That's exactly right.

Chris: So let me take you back to the beginning, right after the epiphany. What were some of the first things you remember doing to kind of start the business? And, as you said, you build this thing of your own. What were some of those basic building blocks and things you did?

Summer: Yeah, Well, for me personally, it was. The first thing was, you know, pray, look for guidance and then talk to people. So I spoke to a lot of people in my network just saying, hey, I've got this crazy idea, I want to build a firm. And the initial idea, while still very similar to what we do, was really around looking at sales and marketing and being able to tie the two together and prove ROI. So that's the crux of what we do right is show your work, show that this works.

And I have a long career of traditional marketing. Marketing and marketing has always struggled to tie themselves to results. And that was really, you know, the core idea, you know, back when I originally founded it. But at the time I was working for Gulf States Toyota best people in the world and I'll never work for another company again. That was the, I think I topped out working for them and being, you know, affiliated with the Friedkin family. They are just salt of the earth. So I was very lucky. At the time when I had my epiphany, I said, well, wouldn't this be great if I built my business plan and I started my company but I already had a client? Wouldn't that just make me feel better?

Chris: For those of you listening, it's the ideal thing to do.

Summer: It really is the ideal and I think, as an entrepreneur especially somebody that I wanted to do something, but it does mitigate some risk when you first file that paperwork and you know you've got some revenue coming in. So I was lucky enough to have Gulf States Toyota before I actually quit my job, they had agreed to hire my firm, which at the time was me, and we had a great relationship and we ended up entering into a contract where I was consulting with them and I was able to do that the day I officially opened, you know, opened Craig Group and opened my doors, and I think that gave me just a little bit of peace, knowing that there was revenue coming in while I was building all the structure that you have to do, which, honestly, is quite painful.

Chris: Right, it's very painful. It's always more work than you even can think. Right, absolutely.

Summer: And if you've not done it before, which? Who has? That's something, that's a skill set that you know. I mean, I guess you know lawyers do it all the time. You probably do it all the time, right, setting up entities. But if you I just had this, I you know, probably should have advised, got more advice, but I definitely was able to say, oh well, I can do this, I can. And what state do you incorporate and why, and what do you do, and who do you bring in, and is it all those questions? As an entrepreneur, you have to just do it.

Chris: We advise on those issues all the time. I was in a conversation yesterday with someone on the same issues and always tell people look, because as the entrepreneur, the other thing you're doing at the very beginning is trying to save every penny you can, and people will maybe try to do it themselves on the legal side, and I try to counsel people. It's an investment in your business, not an expense, and but try, you have to keep it manageable you're exactly right, exactly right.

Summer: And luckily I was at that juncture. It was a small enough entity where I was able to get by with it. I don't cannot today with. I have, you know, a wonderful legal team, but that time, you know, just as an entrepreneur, it's really a pain, it's overwhelming, just to figure out how do I, how do I get you know, a wonderful legal team. But that time, you know, just as an entrepreneur, it's really a pain, it's overwhelming, just to figure out how do I, how do I get you know, get started. But again, I was lucky that I had a client and so I had revenue coming in. It really enabled me to get a lot of things done because you didn't have to worry so much about that.

And I remember thinking my first goal was, oh, you know, back half of the year, six months, if I could just, you know, make my salary back right, thinking like, oh, I'll just replace my income. Well, that I quickly got client two, client three, and that I blew past that goal. It was amazing. It was a little bit of a you know it, who you know. I really talked to people and got advice and those ended up being some of my clients eventually, when people that I was asking for advice. So that was great. But it was such a funny little goal, which was okay, because if I can do that, then it's like, okay, I've done something that hasn't been a detriment to my family. I'm adding to the family kitty. Well, we realized like, oh wait, now I can. There's more here.

Chris: So I was just thinking as you were answering that question. You said it's been just over five years.

Summer: So, given the calendar, that means you started in 2019 and then the world went upside down.

Chris: So let's talk about, I mean, every business that starts out. It's going to face some headwinds and obviously this was a pretty big one. But just walk us through some of the challenges you faced and how you managed through that, given that you just had this new business.

Summer: Absolutely Well, of course, like you know we. Business. Absolutely Well, of course, like you know we. I was just looking at right before COVID so COVID was in March and February I was just looking at expanding and getting some more office space because I'm hiring people. I was looking at leases. So that was hilarious, right, because the minute COVID hit, you know you don't sign the you don't sign the lease, which was great that we hadn't signed it yet, so that was just a fortuitous that was a God thing, but I will say there's a few good things that came out of COVID.

In general, COVID was very good for Craig Group and here's why it was good for Craig Group. I think that middle market businesses that I was working with and we also work with healthcare companies as well, especially healthcare technology, B2B and B2C healthcare I think that what COVID brought to us was that people always did, but then they had to go and find your business online Right, and probably on their phone Right. So if you were not ready with a digital presence and for sales and marketing, so if somebody could not seamlessly buy something from you online or if they couldn't research your product online, you were toast in COVID.

Chris: Very true yeah.

Summer: And even B2B industrial manufacturing businesses that never cared a day in their life about their website. All of a sudden they need their spec sheets to be posted online because they can't drive over and drop them off in person right? They're not going to trade shows, right? So website, but not just the website, really the content, the interaction. And then how good is your email response? How good is your team on the phone? How good are they at working those leads that just got spotlighted? And on the healthcare side, as you can imagine, about COVID, people are scared to death. At that time, telehealth was nascent.

Chris: Right.

Summer: Pretty terrible still, kind of, and they realized we have to invest here. Patients don't know how to get in touch with us. Everybody's scared. People aren't coming into the doctor's office or the hospital because everyone's afraid that they're going to get COVID. So the messaging opportunity for what we do, which is growth, really about growth.

We no longer had to convince our clients you need to take action, because before pre-COVID, and even either at the same time of COVID, there was also this shift with the markets too. Around PE also said oh wait, this has been like really good times and I actually need to start building organic growth instead of just buying another company and doing roll-ups. So this happened very right after COVID. So those two things we did not. We stopped having to tell people. People would ask us why are you doing growth support? We don't need that, right, and nobody says that now, right, no, there's no argument. So COVID, plus what was happening in kind of the deal-making PE market, which we can, that's another. That was another big change for us, but it just helped people say, oh my gosh, we need help. We need help right now. And that was a huge. It was a huge growth time for us. So we grew significantly in 2020 and 2021.

Chris: Stars aligned, it sounds like.

Summer: Stars aligned and again, it was just one of those who would have. There would have been no way to know.

Chris: Forecast, foresee or plan no way.

Summer: The only way that I was able to do is I said we were able to kind of make hay, which was okay. We have a door here, so how can I be really good about scaling in a smart way? So I didn't hire tons of people, I hired slowly.

I never wanted to have layoff right, so I was able to say I have an opportunity, let's scale slowly. Due to that growth, we're also bootstrapped. So we were able to fund our whole company out of revenue which, especially at that time, I wasn't going to go fundraise. It was just so we were just. We're really lucky that we were able to build something, grow, but grow in a. We weren't growing too fast that we were getting out over our skis. We were able to service our clients, grow, you know, as needed. Then it ended up being a good time for us to kind of get our feet under us about who we are as a firm.

Chris: It's a great segue when you talk about the growth you were seeing from the client revenue side forced you to start building your team. Yes, so let's talk about how you went about. One setting the strategy of not growing too fast, because you can fail when you do that, but really focusing on making sure you're making the right hires and adding to your team in the right way.

Summer: Yeah Well, I'll say I don't always make the right hires and I've made so many mistakes.

If you said that, we'd know you're lying, yeah if there was a thing that I think I could always do better at, it was being even better at hiring. I mean, to me it's the hardest thing that I think we do as business leaders, as CEOs and entrepreneurs. So that is something that I think you just get better at, but you still fail. So that's hard. I have no secret. I have a few things I've learned on that side, but I will say, on the growth side too.

Before that, as a person, I'm just a fiscally conservative person in general, so I think some entrepreneurs can get especially more kind of visionary and I think I for sure hold the vision, but I'm very conservative. But that helped us. I think I've had to almost pull myself off of that, so I almost can be too conservative, right. So that's something that I've had to learn about myself, which is I need a counterweight to say you know, do this. But at that time it worked. It was a good way to scale. So I am conservative there, but I did realize in terms of people, if I was really going to grow and we have this value prop about growing with sponsored backed businesses. I myself while I am married to somebody that works in PE and I know a lot about PE. I never myself worked inside the doors of PE and I really had to have that in my firm in order to just have that credibility, you know, just to. Okay got it right and so I did decide very early on. We're growing, we're having a lot of success.

I knew that I had to have somebody else at a partnership level that was going to be able to move us to the next level, and it had to be somebody that did not have my skills.

Chris: Hello friends, this is Chris Hanslick, your Building Texas business host. Did you know that Boyer Miller, the producer of this podcast, is a business law firm that works with entrepreneurs, corporations and business leaders? Our team of attorneys serve as strategic partners to businesses by providing legal guidance to organizations of all sizes. Get to know the firm at boyermillercom, and thanks for listening to the show.

Summer: So I needed somebody that was very, you know, has a different background than me, had a different skill set than me, and so that was, you know, really a game-changing hire. So we brought on at that time Libby Covington. And again, she comes out of private equity, she was in-house at Cap street but also worked at law firms and then had also operated in-house with the Doggett family, so we had a lot in common in that sense. But I knew what she brought and what I brought were going to be complimentary to the market and that was ended up being true. You know that that was. But it was hard right, deciding to bring in, you know, somebody. It's really hard.

Chris: You make it sound really easy.

Summer: It's not.

Chris: Because a lot of people entrepreneurs, maybe just humans in general we tend, you know people that we're like, so you tend to hire people like you Absolutely. Instead of doing. What you should be doing is what you did. And how do you hire someone that fills you out right the other side of the skill sets that you don't have to make the strong team.

So you know, kudos to you for seeing that, and I know of Libby from her days at Cap Street. So so then you bring Libby on and there's 30 other people you've hired in a few years.

Summer: That's right, that's right. Well, I have, you know, tricia Eaton. She started with me. She was actually my first employee, trisha Eaton, she started with me, she was actually my first employee. She now is in an operations role for me. She's been with me since day one. You can do anything. She's the person that can do anything. You just give her a problem and she just goes and solves it. So she has just been my right-hand woman and I couldn't do this without her.

So we had her, we had Libby and then, quickly, we had to hire some subject matter experts. So me and Libby cannot keep delivering all the work. Patricia can't deliver all the work. So we really had to go and fill out the teams and I focused on hiring high-margin employees. So where could I bill and where could I charge for their expertise? Sure, right. And then if there was employees where we didn't really use them that much or it was really low margin, we would usually go with consultants. So I had a bench of 1099s. And we still do. We've less. So now we still do. And again, that was another way where we scaled more slowly. So it didn't, you know, have to get ahead of ourselves on building. When was it the right to have the full-time versus the part-time. That was also a benefit of COVID. So I think COVID and I'm seeing this today too it really, I think, enabled people to work the way that was better for them, like there was a new definition of work.

Chris: For sure. Yeah, and it's being talked about every day.

Summer: Of course, and especially in your industry too, in law firms with a very kind of traditional track, and I think there's people that say I want to work and do really good work, but I can't work in this way, and whether it was in the office or not, but even if it was maybe I want to do great work, but I need to do it 30 hours a week because I'm taking care of my aging mother or I want this lifestyle.

I will make less money, but I need to work this much time from this location. So we leaned in hard on that Huge value prop for us. So I think that was one of my successes of being able to hire really great talent, because I was able to align with the times, because it was what it was but also to truly say I want your best work. I don't care if you need to live in Miami, right, I don't care. If you're telling me I really have to work 30 hours a week because I have personal responsibilities, I'm like great, give me your best 30 hours a week. To me that's better than any you know 40 plus hours a week person. That isn't maybe the best.

Chris: Sure.

Summer: Right. So I, we scaled that, we scaled through that way, we also would. We have a and we still do this today. We bring people on and we do a 60 day trial, and so and it's written, it's papered up and it says if this isn't a fit fit, we're going to separate fast.

Chris: Yeah, there's a lot of value in that and it does help the saying of hire slow, fire fast, absolutely. So you get a test run at it.

Summer: That's right, and sometimes you can't hire slow. Sometimes I wish I could. I've got I don't know four roles we're hiring right now and I need them to be filled yesterday.

Chris: Right.

Summer: But at least we've learned that we do have to have a trial period and we have to be eyes wide open about it. You know we're and I. Just part of our culture and it's part of our values is we do excellent work. So excellence is part of our culture. But also, if you can't meet that excellence, you will be let go, like we fire people, and it's not a scary thing, it's just. You know we're, we just have no tolerance. You know, and what we talked about we something we say in houses we don't have. Just you know we're, we just have no tolerance. You know, and what we talked about we something we say in house is we don't have middle managers. You know we don't have that. You're, you're, everyone's in the spotlight.

It's that ownership mentality that's right and everybody's like that, so everyone's in the spotlight. There's no middle, you know. So you years, I mean there's been lots of not home runs you know, it's been you know there's hills and valleys there with hiring.

Chris: Well, that's good for people to hear. Right, You're not always going to get it right. There's ups and downs, just like in life. But if you're, if you have a mission, like like Craig group does and like our firm does, then you know what your why is. And if something veers off from that, then you stay true to the why and then make those hard decisions.

Summer: Yeah, and it always is. It's always hard. It's the hardest thing we do.

Chris: No doubt. I want to talk a little bit about innovation, because clearly what your company's doing is innovative and for PE firms. But just in your space, how do you go about fostering innovation amongst your team and encouraging it within the company?

Summer: Yeah, I mean, I think that it is who we are. Honestly, it has to do with every single person that we hire. Again, even going back to that, we don't have any middle managers mindset, which is there's no medium, there's no mediocrity, we're always how could you have done better? How could we have done something faster? Wait, what tools did we not use this time? So those questions are asked. Every engagement we have, I'll say we're doing something pretty different. We do have a few competitors out there not very many, but we do something unique. I mean, we are consultants, we do consult, but we're certainly not a consulting firm typically. You know, we're not an Accenture right, because? Why? Because our people actually get in and then they actually do the work, Not that we don't do at Accenture, but that's our model, it is what we do.

So we're boots on the ground, so we actually do the work. So we're not an agency, but we do some agency work right.

So and then on the technology side, we have a software platform. It's patent pending. It's all about forecasting and how do we get better at forecasting sales and marketing? And if we can forecast better, we can then make action and take action more quickly. And so those are the three things we do. And again, we have some competitors, but what we do as a company inherently is pretty innovative, Like we're doing something a little different, Like the skill set is a little different. We move faster, you know. We have a different, you know. So we are doing something different. I think everybody at the firm knows that and they're aware of it, it's just ingrained in your culture, it's just who they are.

Chris: They know it, and I've been to your website so I'll tell you it absolutely comes across from your website, which I know is part of the thought that went into design of the website. Right, you show up different Yep, so it seems like that's part of when you're hiring these people you're looking for someone that can fit that.

Summer: That's exactly right that DNA that innovative mindset.

It's right and something that Libby and I talk about all the time and again, I fail on it. Sometimes I succeed, but we hire and we've really landed on this for Craig Group is we have to hire for people that just figure it out? They just get it done. It's like I don't really care what they're, you know exactly what they know or what they've done. It's like can you solve this problem? Just you know, almost like if you just did a business school case and put it in front of them and said solve it.

Chris: Well, I'm curious because I've been reading a lot about this lately and we have some internal debate about it in our recruiting process.

Summer: Do you do any kind of role play as part of your process to put them in the position or challenge them to see how they problem solve. You know, we don't do it formally and I think maybe we also thought about doing it formally like a formal case. We do it in an informal way, which is here's a situation that we're in Usually, it's a real, it's a real client situation and we say hey, what do you think about this? And let them, you know, talk it through.

Right so we do it as part of our interview process, but we certainly don't have it formalized and I think maybe we should.

Chris: I feel like there's a lot of value in it. I've heard people a lot smarter than me talk on it, and you know the question is and it is the question of does that scare a candidate away? And my answer that is well, if it does, and maybe we learned something early on we should have won't find out till a year later. Absolutely. I'm kind of at a mindset. It seems like a good idea.

Summer: I think it's great. I would agree wholeheartedly. If somebody's scared of any kind of testing, then that's probably not a good. It's probably not a good choice.

Chris: It was not going to be the person that says let me prove to you I can do this, I'll figure this out, right. So just interesting. You know people's mindsets on that so that always leads me, maybe, into the culture of Craig Group. How would you describe it and what are some of the things that you believe you're doing that help foster and allow it to grow?

Summer: yeah, yeah, I'd say that our culture again, we you know excellence in our work is really the number one pillar. We have a thing on our on our mission also. This is no bs. What we mean by that is we show up authentically. We're real, we're real people, we're real humans. We have, you know, everybody that I work with either is caretaking for somebody else in their family, whether it be aging parents, children. They're passionate about volunteering and they're doing that. So we are whole humans and whole people and so I believe in like I don't want to if somebody shows up in an inauthentic way, it's like I'm fine, everything's fine, and I have no tolerance.

So we have this real culture of authenticity, excellence, absolute excellence in client delivery. So everybody shows up with that. It's our culture, because we talk about it in hiring, we talk about it in our all-hands monthly meetings, we talk about it in the way we behave, which is we meet people where they are today. So it's okay in Craig group to be very authentically who you are. So that's just how I am, that's how I run the company, so, so we have an authentic culture. But what that also means is everyone at the company we're on, we're remote. We do have a lot of people in Houston, but we are remote. But that does require people to communicate with each other, which is are you okay, all right, picking up the phone and saying because you, if we're all going to have no bs and we're going to work hard, you have to know what your team how, what is your team okay?

Chris: what's going on in their life?

Summer: yeah, might impact their ability to deliver excellence 100, which is like tell me, do you need help?

Chris: my follow-up question was going to be you sounded like a remote company. So, yeah, creating the, the connectivity of that culture, especially at that level that you're trying to achieve, has got to be challenging because you're not in person.

Summer: It's so hard, it's so hard and again, I think it's. You know, we have a cameras on culture, you know, and everyone's cameras are on. I mean, I spend, we are all on. You know, video calls all day. Which pros and cons.

Chris: Right.

Summer: But I think that everyone's leaned into that. There know we can't be grumpy about that. We're not, you know, and everyone's also required to do really good work. But part from a training standpoint, and I think we're getting better at this, I think we can keep getting better. We're not perfect, but working asynchronously, which is what remote work is Right. Not everybody knows how to do that. Like you can't assume that everybody just knows how to work asynchronously. It's a skill set. Knowing when to do async work versus when do you need to have an in-person meeting, knowing when those workflows that is not something that I think you can just know.

Chris: Sure.

Summer: And so we definitely have an expectation that everyone works really efficiently asynchronously, and I love asynchronous work. Personally, I think it's way more efficient than getting in a big meeting full of people all at the same time and wasting everybody's time. But there is also this time to get everybody in the meeting and you know, sit together.

But we are doing better at training people about asynchronous expectations. So we use you know, very technology heavy, very tool heavy. So we use a tool. There's a tool called Loom. It's a video tool. Basically, you can explain something really quickly on your own time and then send it to people so then they can go figure out what you're trying to explain to them.

even if you couldn't meet in person. We use project management software. Basecamp is the one we use. Other people use Asana, so we use Basecamp, and all of our work is asynchronously matched. And so I think that culture though one thing that does it, we move really fast. So the culture is again with the excellence and you can move fast with async work. Sometimes it slows you down, sure, because you need to just pick up the phone Instead of you know, so you can. And that's a lot of times where I get into things Is, hey, let's stop doing this Call like call each other, you know somebody's not understanding, right, but our culture is really, we move really fast. Our clients have extremely, extremely high expectations. I mean our clients are you know?

PE firms. They're, you know, there's no tolerance.

Chris: And they're worried about the ROI and they want the growth yesterday. Yes.

Summer: Yesterday and they, you know. So we work under that pressure with all of our clients high intensity, high growth. So we're high intensity, high. You know that we match our clients. We're yeah, that's what, that's who we are, and I think it works really well with a remote team. I think we've been able to hire people that want that, that high intensity work. If you don't want it, you can tell and it doesn't work with that.

Chris: It shows up real quick, it shows up. Yeah, so you were talking about, you know, your base clients, the PE firms. Let's talk about what are some of the things you found to be successful for you and your company to kind of build and maintain those relationships so that you keep them and you get more.

Summer: Yeah, absolutely so. I think it's challenging to, I think, sell anything which we're selling a service, right, but I think it's challenging to sell into. I don't want to put them all in the same basket. So not all PE or independent sponsors are sponsored, because they're not all created equal, right, so that's.

I can say that but it is a tight group of people. It's a it's tight knit. It's a small group. I think it's an it's elite. Most people that have those roles are very well educated. They have great experience.

I think you really have to be trustworthy, like they are not going to pull in a partner that has not been vetted. You know that, had that, that hasn't really been like. You know this is the real deal. So those relationships are really hard-earned. You know those are not easy to come by. I will say me and Libby both have our own sets of networks. That was enabled, sort of the catalyst. But the only reason why that's been able, we've had success, is because we've had to prove it. And when we prove it, you know, we then can build onto the next one and the next one. And I mean our model would be that we become a partner with the firm and that they bring us in on multiple portfolio companies and that's what happens, right. But it's hard. It's not something that you don't. You know we're not selling. You know something that's not high value, high stakes, and we really are a partner. We're not a, you know, a vendor and that takes a lot of trust. We have to spend a lot of time.

Chris: Yeah, it's funny because I can totally relate. Our mindset here at the firm is the same. We want to be as we say this all the time the legal partner to our clients, an extension of the C-suite, not a vendor, not a commodity, but an actual value-added partner.

Summer: Yes, that's exactly right. And it's hard to get there. You don't just say that and you know you're like oh, I want to be your growth partner. I want to be a member of your management team. It's like OK, prove it.

Chris: Right.

Summer: Right, and so I think that we do that. I think our team consistently delivers best in class results and best in class work. We're also right sized for the lower middle market and middle market, and I think that's what needs to happen. We can't you know it's not Bain, right? No, and they can't, they couldn't, they can't do it anyways Right, but we're also not, you know, your sister's brother that's going to help you with sales and marketing. That you know out of their garage.

So I think we're right size and for our size, like for where we are in the market, I think we're an absolute best in class option and we've had to prove it and prove it and that's also why we have best in class talent, because we've proven it and proven it. But it's definitely been. You know it's a hard fought. It's hard fought.

Chris: You know every single win is a hard you're only as good as the last one, that's right.

Summer: I mean it's dig and ditches hard. You know, it's like we have to say. I mean we're making sure that every time we deliver the work product, the trust and then also the ability to immediately implement our plan, and that's one of we really stake our hats on that, like we don't just give you a here's some really great ideas that you can't implement, nor do you have the money to go hire the team to do it.

So we really just hang our hat on, let's roll, let's go, and it's like ready to go, and so that's hard, it's hard work. You know this is tough and so that's exactly right We've got. You know we need that to be so good that the firm, the CEO of the port co and the firm are going to say man, that was really worth it. What would we do without that team? How would we, where would we be right now without that team?

Chris: Where else can we use them?

Summer: And that's what they. You know it's like we can't. We have to. You know, we have to keep. I think we can always get better.

Chris: The results would suggest that. But to your point, the last word you just said right was if you don't have the mindset of continuing to, how can we improve? You're going to get left behind.

Summer: That's right, and I think, a lot of my core team. You know one of my senior strategists, Macy Allen. I think every time she works on something, she comes up with another innovative idea about. You know what, if we would have done this or wait this tool, can we try out this tool? We're really leaned into that technology and AI in our work, but I think that what works so well is the answer is yes. Bring it in, let's try it, let's test it no-transcript and just your leadership style.

Chris: How would you describe that and how do you think it's evolved since you started this five years ago?

Summer: Yeah, well, I mean, I think it definitely has evolved, you know, I think that also going from having you know two people to this very large team. We're very flat organization so we don't have lots of hierarchy. So most people directly report to me probably too many, which is something we're working on. But I think I've got a very straightforward management style so there's really not a lot of dancing around things. There's not a lot of confusion. If I'm telling you something, it's probably going to be very clear. I also give feedback continuously. I believe in spot feedback so we don't wait and write it down and wait for the quarter end to go back and like report. I think that's just tiresome. So everyone is encouraged to give spot feedback both you know, positive and negative and do it in that moment. Sometimes I will do it in our project management tool and say spot feedback and just put it.

And that way if it's written. Sometimes they can have some time to react.

Chris: Right.

Summer: As opposed to kind of.

Chris: I like how you signpost it though. Yeah, I say spot feedback.

Summer: Like prepare thyself. You are getting feedback. Yeah, and I put it and I just say it, and I think that I lead with kindness, always, always. I think that truth without kindness is cruelty and that's a direct quote from my husband, jason Craig, one of his themes and I think that being kind to people, even when you're frustrated and is, is the only way to be. So lead with kindness, but also tell the truth, which is this you know this went well, this didn't go well, you know, but it's not. It's not about you as a human. You know this isn't a. You know we're not making a personal judgment about you, but this work product, you know, wasn't what it needed to be or whatever it is.

But I tend to give feedback. You know, again, it's rapid, it's in this, it's like I lead. You know, very, you know, crisply in the moment I've had to get even more efficient with that, with a lot of people you know, and I don't see all the things, and so I definitely try to speak to every a lot of people to get you know other people's opinions on work product. So I talked to a lot of people. I talked to clients ask for feedback and then go and manage my employees.

That are what I heard from clients. So yeah, I think I'm a management style again. I think I get a lot of feedback, a lot information, but crisp, kind, but really Christmas and some compassion right, always, always.

Chris: So that's something you mentioned. I don't think a lot of people think to do or they think to. They think about it but they're scared to do it, and that's get feedback from your clients.

Summer: Yeah.

Chris: Right, it's the most valuable feedback you can get because you're really trying to serve the clients. But if you're not delivering what they want in the way they want it, you're missing the mark. Right, you can work hard and you can believe it's excellent, but if they don't believe it's excellent, hard and you can believe it's excellent, but if they don't believe it's excellent. So anything you do this kind of systemize that, or is that just you know periodic check-ins with your clients, or I don't like that.

Summer: You know people will disagree with me on that and there's a whole theory in marketing around, you know, net promoter scores, which is it's just a survey, essentially that we're just not big enough for that. Like I need to be able to call all my CEOs which I do and can, and I get feedback and write it down. I mean, you know, and I talked to all of my CEOs at least every other week and I asked them all every time, you know, and sometimes they would say I don't even know, go talk to the other team and I do which is great, because if the CEO doesn't know if if anything's good or bad, that's great.

Chris: That means there's no problem excellent.

Summer: But no, I do it continuously. I see that as really one of my roles in sort of steering the ship is talking and saying you know what's, you know and I want everything. I want silly stuff, little bitty, you know things. I got some of that last week. It was a really super small thing, but that you know it matters. That's right. You know I don't, you know I want all the things. So I just try to have a relationship that's very trustworthy. It's informal in the sense that we can talk. I want that kind of relationship. I don't need it to be something that's this big thing.

Chris: You don't need an email saying click the button and fail the survey.

Summer: I really hate it. I really do I mean again somebody's going to quote me on that in a few years when we do that and send the email but I just no thanks, We'll ask directly?

Chris: I don't. I'm not in favor of them either, and I don't know that you get the most authentic feedback. Yeah, right now, at some point, if you're so big, maybe you don't have a choice.

Summer: But yeah never lose the personal yeah, that's right, that's right.

Chris: Summer, this has been such a fun conversation. I want to just end on a few lighter notes. Okay, what was your first job growing up?

Summer: oh, lifeguard, life lifeguard. Out at pecan grove, country club, out in richmond texas, which might have been my most favorite job I've ever had. I still like love it taught because you had to wear.

Chris: You got to wear a bathing suit. You were the most tan you ever did. I was the most tan.

Summer: I also love to swim. I love teaching swim lessons and I was a swimmer, and it was just it was great very good. Native texan native texan born in odessa, texas. Yeah, native native Texan Lived in Oklahoma, lived in Illinois, but I'm back in Texas.

Chris: Okay, so do you prefer Tex-Mex or barbecue?

Summer: Tex-Mex, all right yeah.

Chris: I usually ask people this question, but you have three young kids so I don't know. But if you could take a 30-day sabbatical, where'd you go and what'd you do?

Summer: Yeah, my husband and I, even though we live in the flattest part of Texas I think that's under sea level we really love to mountain climb. So we're hikers and climbers. We try to take a pretty big trip every year or so if we can. We did a really big trip this summer. It would be a no-brainer. I mean we would go and climb a really big mountain. Aconcagua in South America has been on his list. I can't quite get it on mine because it's a 30-day trip and I can't. I've got a 11-year-old, a nine-year-old and a five-year-old and I can't quite do that. But if I could wave a magic wand and I could be gone for 30 days, I would go climb Aconcagua and spend time in South America.

Chris: How cool. That's a good one. Well, thanks again for taking the time. Love your story. Congratulations on the success that you've already achieved and that I know that's in your future.

Summer: Thanks, Chris, appreciate having me on.

Special Guest: Summer Craig.

In this episode of the Building Texas Business Podcast, I speak with Amyn Bandali, CEO of Ivy Kids Systems. Amyn shares the story behind Ivy Kids, a premier childcare and education provider founded by his parents. He reflects on how their move to Pearland, Texas, and the challenges they faced finding quality childcare led to the establishment of their first school. Since then, the family business has grown to 20 locations, with 16 more under development.

We discuss the decision to franchise the business, the importance of building a culture of empowerment within teams, and Amyn’s philosophy on leadership. He explains how empowering employees with autonomy, transparency, and responsibility has been key to Ivy Kids' success. Amyn also talks about navigating challenges, including the impact of the pandemic, which required the business to pivot toward virtual programs and innovative approaches to childcare.

The conversation highlights the critical role of early childhood education in shaping lifelong success, the importance of continuous innovation, and how technology like coding and robotics is being integrated into Ivy Kids’ curriculum. Amyn also shares insights into managing a franchise system and the value of fostering strategic relationships and learning from setbacks.

This episode is filled with practical lessons for entrepreneurs and leaders who aspire to create sustainable growth and a strong company culture.

Show Notes

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About BoyarMiller

About Ivy Kids Systems

(AI transcript provided as supporting material and may contain errors)

Amyn: Yeah, thank you for having me, Chris. Happy to be here.

Chris: So you're the CEO of Ivy Kids Systems. Tell the listeners what Ivy Kids is. What do you do? What are you known for?

Amyn: Yeah. So Ivy Kids, we are a premier childcare brand, not just a daycare where parents just come in to pick up and drop off. You know, we provide education and that's from the infant level, so as young as two months old, all the way to our pre-K program, which is five and six year olds. And then we also have an afterschool program as well, where parents pick up and drop off from elementary school. The kids come in for homework help. And we're next year celebrating our 20th anniversary.

Chris: Congratulations. That is amazing.

Amyn: Yes. So what was the inspiration to get into this primary childcare, education, afterschool learning? Where did that emanate from?

Amyn: Yeah. So, you know, a little bit about our history. So Ivy Kids was actually founded by my parents, Allen and Layla. You know, we had moved from Canada to the States or to Houston in 1995, and we lived in Pearland. So, as you're probably aware with Pearland, it experienced massive growth during that time. You know, 518 had one stoplight. Now it's a six-lane highway, it feels like. But you know, my parents, you know, with my brother and I being young children, they found out very hard time finding high quality care for us. You know, we would be in the daycare system, mom and pop childcare, quote unquote, you know, prestigious childcare program, and it was, you know, observation, where there was no learning going on, or my brother and I would, you know, be picked up and we'd have a bump or a bruise, and nobody would be able to point out why.

Amyn: My parents being engineers and also having a history of entrepreneurship from their parents and their grandparents, you know, they thought about this industry and they thought, hey, we can do a better job of running high quality schools. So I like to say they reversed engineered the childcare. You know, they put a lot of thought, time and thinking, and over that course of 10 years from when we moved to Pearland, to 2005, we opened our first school, and that was in the Pearland area, and it did really well. So from that, we grew from that one corporate location to then five corporate locations. And then when I joined the business in 2015, and I can talk about the reasons why, but that was when we decided to franchise our brand. And, you know, today we are at 20 locations. We actually just opened our 20th location about a month ago and we have 16 under development right now throughout Texas and the Southeast United States.

Chris: And, just curious, I mean, the 20 that exists in the 16 under development, how many of those are franchise versus corporate owned?

Amyn: Yeah. So we still own all of the corporate locations today. We are at five corporate locations and we are at 15 franchise locations. You know, I think one of the things that shows maybe a strong brand and, you know, happy franchisees is folks opening their second or third locations. And even though we opened our first school in 2017, you know, that's been one of the great things to see. As a franchisor, you know, seeing folks open their second or third location, looking for sites for that. And that's kind of where we are right now in the evolution of the business, which is really exciting to see.

Chris: That sounds exciting. So you're going back to the beginning in listening to the story you were telling about your parents. Yeah. It sounds like a very common entrepreneurial inspirational moment where they see a gap and figure out a way to fill that gap or need, right? And in this case, you know, quality childcare.

Amyn: Yeah, absolutely. You know, they saw a lot of great things about this business, which really stand today. And it's, you know, if you do right by that family, you do right by that child, you know, you're having that parent for 10 years from when they're infant to that afterschool program. You know, they saw that childcare is a need, not a want. You know, if you have a dual income family, you have to put your child somewhere where, you know, they'll feel safe where they're learning. And from that they saw a need in building their first Ivy Kids to, well, there's so much research out there about the importance of education at an early age that then, you know, catapults a child into future learning, future success, as opposed to not getting that in the early ages.

Chris: And the kind of the downward trajectory of the backing cause.

Amyn: Yeah. I mean, there's some amazing studies. There was one that was done about eight years ago by Harvard University that basically said 95 percent of who you are is from the first five years that you were born. You know, everything from what your passions are to your ability to learn. So much of that comes from those first five years. And then if you think about, hey, what is the best return on investment then for my education? It's not necessarily those prestigious universities that does have a high rate of return, but the best ROI actually that a family can spend, that a government could spend is that first five years and getting that part right.

Chris: Right. You know, if you're doing that, then you are truly building that foundation. And I think that's one of the drivers for why, you know, why families make a decision. You know, they're looking for, they're seeing the benefits, they're understanding more and more of, you know, the link between high quality learning and how their child is going to do. And they're making a smarter decision now with where they're choosing to enroll their child.

Chris: So let's go a little bit, so we understand your parents' inspiration. You alluded to this, but I don't understand what drew you into the business. What were you doing before and what was it that caused you to leave that to step in and kind of take over?

Amyn: Yeah. So by the time we had opened our first school, I was in, you know, college or close to college and seeing the business up front, you know, seeing the ability to build your own path, create your own destiny, working in the business from everything, from us assembling the furniture when we were opening our first school, actually laying the grass and the sod down in order for us to get our CEO inspection passed, you know, I was just so enthralled by it. I was so excited about it. The ability of owning something and really charting your destiny. And that really didn't leave me. You know, in college, I also took a job. It was with Student Agencies, which is a business run by undergrads and I did sales there. And that also really excited me too.

Amyn: And then, you know, I kind of went the route that a lot of students at Cornell did for undergraduate business, which was pursue finance, look at the business consulting route or the investment banking route. And, you know, I learned a lot going down that path, but I missed being in that small business, you know, really building something that was my own working with a dynamic team and a small team. And, you know, I think building some of that foundation, this amazing opportunity came that was presented by my dad to say, hey, let's franchise the business. You know, we've got something great going. This would be an amazing opportunity for other like-minded people to open their own locations and thrive.

Amyn: And I just thought, man, this marries what I did earlier. I've got a bit of foundation for working at larger organizations. You know, maybe there's something there and it turned out to be a good decision.

Chris: Very good. That's a great, I love the story and how you were able to, I think it's important. You got an education and you got real world experience outside of that, right? To then bring that into and maybe help professionalize a little bit the company, especially as it was launching into being a franchisor.

Amyn: Yeah. So you mentioned, you know, working with the team, let's talk a little bit about, you know, some of the ups and downs that you've experienced and maybe you saw your parents early on experience and building the team around you so that the company can achieve that success. Because if I know anything about hiring, it's an imperfect thing, right? Is that part science, part art? But you do your best to get it right. So tell me, let's talk a little bit about those experiences, you know, what you've learned from that.

Amyn: Yeah. I mean, I think, you know, going into small business entrepreneurship, there's very much a feeling of working in the business, you know, being so kind of head down and focusing on, hey, how do we survive today? And, you know, I think when you're joining or launching a new business, which really was the franchising part of our business was a brand new business, you are really thinking in that lens and that mindset. And I always feel like hiring, building an infrastructure, it just allows you to think more long term and that just prolongs the lifespan of your business too. So I think making those right strategic hires as soon as we have that capital, thinking ahead about, hey, where do we want to be in the next 5, 10 years and investing in those people and really giving them the freedom and empowerment, you know, to expand their careers, expand their responsibilities as you're seeing them master their role.

Amyn: I think that really helped, you know. So one book that I read early on about a year or two after I joined the business was Traction by Gina Wickman. Sure. You know, the entrepreneurial operating system. I mean, that's something that we do today. And I think that was foundational in how I look at people, helping the assistant. Hey, do we have the right people in the right seats? And then are we creating a culture of empowerment? You know, I think about what attracted me to Ivy Kids and starting this franchising part of the business. And it was this idea of taking ownership, having accountability, you know, maybe having a little bit too much rope.

Chris: Right. Right.

Amyn: And I just think, hey, at a size that we are, those are probably the people that I'm going to be attracting to. And how can I create that where if I were in their shoes, I'd want to be a part of this business. And I think some of that where, hey, there's alignment on goals, but hey, you have the empowerment and you have the ability to achieve it and how you achieve it and how you get to that final product is up to you. You know, I always feel like that allows you to really grow people, especially when you're smaller, maybe you have that limited capital base, you know, and now you can start thinking strategically about your business and then your business can really grow.

Chris: So I love that term culture of empowerment. Let's talk about culture. You know, everyone agrees culture is king, right? And every book you read and each strategy, you know, all those clichés. What have you done to kind of foster and build this culture of empowerment within Ivy Kids?

Amyn: You know, I think of myself as a generalist. And I think of myself as, hey, I am not the best person in any department. And I think as you grow as a leader, that is just what naturally happens. You know, you have to build a team of people that are smarter, more experienced. I would say better than you in each of these divisions in each of these areas.

Amyn: So I think just thinking, hey, if I'm growing or if the business is growing, I have to increase the skill sets of everything around me and I have to play more of that generalist mindset. And with that, it's let me bring these people on and have and let them be the experts in the subject matter experts of what they're doing now.

Amyn: Alignment and vision and where we are and ensuring that, hey, prove to me that you can do this job is still very important. Sure. You know, We still need to have check-ins and make sure that, hey, are we all marching in that direction and where we want to go as a company. But at the end of the day, I do think that people are more passionate if they feel a sense of ownership, if they can look back and see, "Oh, I or my team accomplished this." I'm getting praise for those kinds of things. You know, one of the things that we do, we have quarterly town halls and we do shout outs, and it's a thing that I love. We just had ours on Friday. And, you know, the team gives each other shout outs, but I think when people are empowered and we are able to showcase, you did a great job and this is why, and this is what your team is doing, is getting the company moving forward, is amazing. And that might be harder to create that visibility as a company grows. But it is something that I like to keep on the forefront of my mind because empowering people, it's just like this flywheel of positivity, right?

Chris: Right.

Amyn: It just, it's like the snowball or flywheel effect. It just grows upon itself. You know, the shout outs that you mentioned, I don't think it can be overstated, the value in just simple recognition. Private recognition is great, but the public recognition amongst someone's peers, I mean, it doesn't replace cash rewards, but some people value it as much or more, right? And I think that you would take the time to do that in a thoughtful way, and I can see where that would inspire your people to do more, right? Or, well, gosh, your coworker got it. I'm going to do something so that the next quarter I get it. And it just, to your point, that flywheel effect, it just creates this atmosphere and culture of wanting to achieve and be successful.

ADVERT Hello friends. This is Chris Hanslick, your Building Texas Business host. Did you know that Boyer Miller, the producer of this podcast, is a business law firm that works with entrepreneurs, corporations, and business leaders? Our team of attorneys serve as strategic partners to businesses by providing legal guidance to organizations of all sizes. Get to know the BoyerMiller.com and thanks for listening to the show.

Amyn: The other thing I heard you say is there's a key piece of autonomy to create the culture of empowerment within Ivy Kids and giving your people the autonomy to go do what they do, what they've been hired to do without being micromanaged.

Chris: Yeah, that's exactly right.

Amyn: I mean, I always think back to when I first started out, you know, in my career, you know, as an investment banking analyst, you know, you're spending 80, a hundred hours a week, you're working on these pitch decks. You're grinding until 2 a.m. You're working on this project and now all of a sudden you have this package, you deliver it to your managing director and then they go to a meeting and you never hear back. You come up from the dungeon, right?

Chris: Exactly.

Amyn: And I always was like, hey, you know what, I wonder what that client thought or if that what I did had an effect. And you know, that’s that part where I'm like, well, am I doing that as a leader? And am I these blockages? You know, because people want to learn and people want to be in those meetings. I think everybody wants to be in that meeting and see where their work is leading to. And I just always think, hey, if I were working for me when I was starting off, would I have liked myself as a boss?

Chris: Right.

Amyn: And that also means, hey, clear vision of where that person is heading. What am I doing right? And what am I not doing well? You know, I think feedback transparency, you know, I really try and instill that criticism is not a negative word, you know, problems are not bad. You know, problems are just identifications of what we can all do better.

Chris: Right.

Amyn: I like hearing problems to not, you know, and that could be a, you know, what we're doing and just what's going on within the organization. You know, what the way I would phrase what I just heard you say is about, it's about mindset, right? You can view someone's performance from a positive mindset or a negative mindset and say, look, okay, this didn't go well, but that's a learning moment. Let's find the learning as opposed to chastise and criticize and beat someone down.

Chris: Yeah, right. And I think, you know, same situations handled, you know, one versus the other can encourage and empower someone to want to do better or discourage them to, you know, put their tail between their legs and maybe leave, even leave your organization when it's not someone you necessarily want to leave.

Amyn: Yeah, and this is a thing that comes over time. It comes with empowerment. It comes with, you know, celebrating that publicly. It comes with a culture of positivity. You know, it is also something that I feel like is so important when you are owning a small business, when you're opening a business is separating yourself and your identity and ego in some ways from your business.

Chris: Right.

Amyn: You know, it's something that I, you know, try and share with our franchisees when they're opening a school and they're having a quality assurance visit or their first, maybe, you know, not ideal interaction with the parent. I mean, there’s a real personal feeling there. It's easier said than done, right?

Chris: It is.

Amyn: But I, to your point, very important to do. So let's kind of dive into some of those subjects because you start the franchise part of the business, I think you said 2017. So it seems to me you're getting it off the ground. It's going well. And then a global pandemic hit. So let's talk about managing through kind of uncertainty, economic downturn, especially when your business is predicated on kids coming into a public, basically facility and gathering together when that wasn't going on.

Amyn: Yeah. I mean, I remember March of 2020, I think our average school enrollment was about 200 children. And I think it went to 40 in two weeks, so very stressful period as you can imagine. You know, and one thing that I learned from the pandemic or from our team and in business is you can really pivot on a dime. You know, and I think that's something that I've taken from me too is we went to online learning, you know, for two, three hours every day we were able to orient the company in that direction. You know, it ended up generating a million dollars of revenue for our franchisees, which was a benefit. You know, we were able to do things like private kindergarten. We were able to do a virtual program for elementary school children. They were able to come in our schools and do the virtual learning from the elementary teacher at our schools, and everybody was separated apart.

Chris: Wow.

Amyn: So we were able to come up with revenue-generating ideas. We weren't able to make up entirely for the lost revenue due to COVID. But we were able to do some really amazing things and stay in really close communication with our franchisees. Yeah. Because as you know, each city, each state had their own requirements.

Chris: Right.

Amyn: I think I learned a lot from that, that, hey, if you've got a long-term goal, a long-term plan and things change within your business, that doesn't mean you don't change your goal. You know, you can orient things, you can turn things on a dime. And, you know, although things have returned to normal and in many respects, right? Or pre-COVID, I think the learnings from that have helped our innovation and just saying, hey, let's push a little bit more. Let's try a little bit more.

Chris: I love it because I think the lesson there is despite what comes at you, whether it was in your control or not, there's always opportunity.

Amyn: So again, it goes back to mindset. I thank you. Okay, get the team, you or your team together and go, okay, where are the opportunities out of this that we probably wouldn't have seen before? And I think, like you said, you see so many people, especially in your industry. Now that kids are back in your facilities, it doesn't take away the opportunities for online learning you can do.

Chris: Right.

Amyn: And it's just added revenue.

Chris: Yeah, that's right. You know, I think, you know, a franchisee, they open and they think, oh man, you know, these problems are just centered around me and oh my gosh, I'm opening a business. And it's luckily now you're around 20 years of experience of us operating, but also imagine those franchisees that had that same feeling and they opened during 2020, 2021, right?

Amyn: Where we had to do everything virtual. So, you know, I think, you know, a business owner, you have to be an optimist. You have to look for, hey, what are ways that either I could turn this around or generate some revenue. Growth mindset is just so important.

Chris: Yeah, so true. So you mentioned innovation. What are some of the things that you have done or that you may be doing now to kind of foster innovative ideas, innovative thoughts within your team that you can then implement with your franchisees, etc.?

Amyn: You know, I think so much of that comes from our goals and seeing, hey, what can we continue to do to further differentiate ourselves as being the leading provider of early childhood education? Right. I mean, you look at our curriculum, you know, we have a lot of, you know, mom and pops that are great, you know, and in varying levels of quality and large franchise organizations too. Right. And what you find is there has not been a great deal of innovation in the curriculum space and in education, you know, so really it's us thinking at things differently, like, hey, just because everybody else is doing the same thing.

Chris: Right.

Amyn: That grounded in the research of today? Right. Does that relate to the teachers of today? What children need to learn in order to be successful in the elementary school, middle schools in the communities that they're in today. I think just always trying to understand the why, you know, I think why is one of the most important questions that you can ask. And that's really what I do in the meetings is understand, hey, why are we doing this? How are we doing this? You know, I think that generates a lot of thought within our team. Then once we have those strategic tools in place, we have those systems in place. Okay, then what is our cadence to see how we're executing on it and seeing how we're going within that?

Amyn: So I always think goal setting at the year, understanding what those rocks are each quarter, but then, hey, just because it's a status quo does not mean that's good enough. You know, so even in our curriculum, implementing coding and robotics, parent assessments that are digital. So you can see every, you know, every month, every two months, exactly what your child's doing in the classroom. Camera access. So as a parent, you can see exactly what's going on in your child's classroom. You know, those are not just tried and true things. Those are things that came from great communication with our parents, a team that is, you know, flexible, forthinking about what they would want to see as a parent and then great execution.

Chris: Wow. That's great. So you mentioned robotics. I've got to ask, what are you doing or kind of what's on the horizon as it relates to your curriculum and your delivery of this, your childcare and child education, early childhood education as it relates to AI?

Amyn: Yeah, I think that's a great question. You know, I think tools like AI are amazing. You know, there's so much that you can do in regards to communication, idea generation. You know, I think for us is just, hey, when it comes to technology, you know, how do we ensure that children today are well-equipped for their technological future? So when we talk about coding and robotics, it's not just sitting in a computer and coding, you know, for it. It's even from that two or three-year-old level of doing logic puzzles, if-then statements. If I take a certain input and I am bringing code puzzles to it, what do those outputs look like? So it's a great way of them to manipulate in a coding language, but not also spending time in the computer and being in front of a screen too, which also which shows you know, a negative impact due to research for that young and FNH, right?

We're making steps towards that direction. We are not diving full ahead, you know, to me, it's one thing to be first in an area, but I'd rather do it best, right? And I'd rather do it where, you know, we're not just testing things on children, but we are providing something that is impactful. That's based on research that we know we can implement really well. And I think you're going to continue to see growth in that area, too. You know, other things is just back to a naturalistic component, having things like gardens in our schools, you know, teaching children, hey, the food does not just come from H-E-B. It comes from the ground, and this is why. So, you know, I think innovation is a big part of it.

Chris: That's great stuff. I mean, I can imagine parents get excited about hearing about that fundamental learning that their kids are going to get to experience with you.

Amyn: Yeah, absolutely. Building strategic relationships, you know, partnerships and things that you have, you know, obviously relationships with franchisees, but other key, you know, advisors or relationships you have. Let's talk in the context of the value you've seen in that, how you think that's helped grow the business and how you lean on those, you know, from time to time to get you through to the next stage, if you will.

Chris: Yeah. I mean, I think you always want to be around people that are adding to your skill set and have exceptional talents in those skill sets. You know, I think about continual learning. Luckily, in franchising, it's an amazing model and way for people to share best practices. You know, the IFA International Franchise Association has amazing resources, especially for emerging franchisors. They have great conferences and that's a great way to share ideas.

Amyn: You know, I'm part of a mastermind group of franchisors, 50 to 100 units. And just learning and seeing what best practices that they do. You know, they advocate a lot for transparency within a franchise system. Franchisees sharing what their P&Ls look like. What's going well, what's not going well in the business. And franchisees learning from each other and sharing best practices. You know, that's something that is important. We're implementing more in our business with benchmarking and KPIs and performance groups. Even being part of a local community, you know, I'm part of a Vistage group here in Houston.

Chris: That sounds like an amazing asset.

Amyn: Yeah, I think that is an amazing asset, going and meeting people in person, seeing their businesses, touring their locations. You know, I think sometimes being an entrepreneur, being a CEO can be a very isolating experience.

Chris: For sure.

Amyn: You know, all the fingers are pointing at you and all the hard questions come to you too. So being able to learn from others. I mean, learning from mistakes is great. Then you're not making them and they're less costly. So I'm always about trying to learn from other people.

Chris: You alluded to one of my favorite questions there. So I always, I like to ask a guest, cause I do, we do learn from mistakes and it is nice if you can learn from someone else's, but has there been a setback or something you would describe, you know, a mistake or, you know, again, learning moment, like I mentioned earlier you've encountered? And let's talk about what that was, but what did you do to overcome it? What was the learning and how did it make you better?

Amyn: You know, I think the learning that I encountered is not stepping into the business. And I think my idea of being a generalist came from mistakes, you know, being young and eager, wanting to jump in, hey, I can write this operations manual because I've spent time in the business or, you know, hey, use this marketing plan or this idea because it worked for me. You know, I think the big one was COVID early on. Oh my gosh, I was seeing the business totally transform. I felt the need to be in this. I need to be a wartime, you know, CEO or senior member. I need to be here. I need to be calling the franchisees. And really, our team had great ideas and approaches and they were thinking about the business and their fears around the business in a similar way that I was.

Chris: Right.

Amyn: Yeah. And the moment I snapped out of it was, hey, this training is great. I mean, but think about X, Y, and Z that the franchisee is going through. And I had my operations person tell me that. And I think it was a, oh my gosh, I've sucked myself into this business. Yes, there was a big change, but I talk about empowering my people. That also means not just when moments are good, but when moments are bad as well. So I think that goes both ways and people and relationships strengthen sometimes when you're giving someone the rope when the business is not going that well.

Chris: Right. But I mean, that's powerful. I can certainly see how that was an aha moment for you. And again, for your people, right? That you trusted them enough in those times had to go a long way.

Amyn: Yeah, absolutely. I mean, you know, it's kind of like war stories during COVID or the up and down, but, you know, having a kind of a business history and having institutional knowledge, I mean, those are amazing tenants. You know, a franchisee joins, they have now someone on the operations team that's been with you for 20 years. But you're also incorporating, you know, newer people who are excited about the culture that we're trying to build. That's really important.

Chris: Yeah. Well, I think you've talked around this, but just to kind of crystallize it, I do want to ask, how would you describe your leadership style and how do you think that's changed or evolved over time?

Amyn: That's a really good question. I mean, I would say I like to empower people, you know, I like to set goals and a vision. You know, we have a vision of where we want to be as a company, and I want to understand what people think and how they see us getting there. And I want us, and I'd like to see that individual develop KPIs. What they think are the right metrics. And I want to understand the rationale behind that. And then we'll get together and figure out alignment there. But I like to see how people think. I like to see thinking. I want a demonstration of why they are getting to that problem or what their reasoning is around that problem.

Chris: That makes sense.

Amyn: Then we check in and I let them do it. I always think about how I, you know, if I was the low man on the totem pole, how empowered would I feel? You know, what are my responsibilities? And I think that attracts, you know, passionate people.

Chris: Yeah.

Amyn: And that's what I want to see. I want to see passion because I'm giving that responsibility. You know, as you were talking, it made me think. You know, we talked about learning from bad experiences or, you know, maybe learning, seeing something and going, okay, I experienced this, but I don't want to repeat that. And I can't help but think you learned so much as an early analyst and how you were treated.

Chris: Yes.

Amyn: You go, if I'm ever in a position of leadership, I'm not going to do these things. And it probably serves as a good reminder and a guidepost for you.

Chris: Yeah.

Amyn: To say, no, you know, remember what I didn't like, and let's do the opposite.

Chris: Right.

Amyn: Yeah, you learn a lot from great managers and you learn a lot from not so great managers. Yeah. And, you know, I think I had a lot of those on my bucket list and I think a lot of just reflection too. I mean, you know, I really try and take feedback and I really try and understand. Hey, you know, I mean, I've made a lot of mistakes and I think it's just, hey, let me try not to make that same mistake a second time.

Chris: Right?

Amyn: But you know, the sad truth is you're going to make some more, as will I, and the goal is trying to make the same one twice, right?

Chris: That's right. I mean, this has been great. What an exciting business you have going. I want to, before we wrap up, I just always like to ask a few, you know, maybe less serious questions. What was your first job outside of Ivy schools?

Amyn: My first job was a company called Student Agencies, in college. I sold ad space on the maps that you'd see around the Ithaca campus and these brochures. And I also helped with marketing promotions. A promotion I actually dressed up in a mascot outfit was a big light bulb because it was for an entrepreneurship idea competition.

Chris: That's great.

Amyn: So, I was a light bulb for a few weeks around campus. Talk about humility, right?

Chris: That's right. And if you sold ad space for a brochure, I have to believe you got used to hearing the word no.

Amyn: Oh man, yeah. No is common. No is very common.

Chris: Okay, so, grew up in Pearland, you know, Texan as you can get, so do you prefer Tex-Mex or barbecue?

Amyn: Oh, Tex-Mex for sure.

Chris: Something you missed when you were up in Ithaca, I guess.

Amyn: Oh, man, yeah. You didn't see much Tex-Mex over there.

Chris: Well, I mean, this has been a great conversation. Congratulations on the success of the family business and where you've taken it, you know, since joining and the franchise side of things. Really appreciate you sharing that story with us and wish you the best success in the future.

Amyn: All right. Thank you so much, Chris. I enjoyed it.

Special Guest: Amyn Bandali.