SPEAKER_01 0:02

What actually separates the most elite integration businesses from everyone else? If you're like most integrators, you're deep in the day-to-day. And while sometimes that's what it takes to keep the business running, it can also make it almost impossible to step back and see how the business really works and what it will take to get to the next level. On this episode of Insights, I'm joined by Paul Starkey, a longtime industry leader and one of the key forces behind companies like Ilan, Bravo, Vital Management, and PrepTech. Paul joins me for a candid conversation about what drives the highest levels of success in this TI game. Drawing from decades of experience both inside and outside the industry, Paul shares a different way to think about your business. Not just as a set of projects, but as a comprehensive operating system, with clear levers that drive sustained excellence. We break down the core components that matter most from demand generation and sales to operations and finance and the challenges that inevitably show up as companies grow. We also dig into the evolving private equity landscape, covering topics like succession planning and what owners should be thinking about when it comes to driving maximum enterprise value. Finally, we explore how AI is changing the way CI leaders need to think, plan, and operate. And why, if you're not spending five to eight hours a week working with AI, you're already falling behind. As always, this conversation was originally recorded live with audience questions and discussions throughout. For a link to the video recording, check out the episode description. If you've ever felt stuck in the day-to-day or wondered what it would take to get to the next level, this episode offers a powerful place to start. Let's dive in. All right, we are live. Welcome everybody. Thank you so much for being here for the April edition of Insight Sessions. I am Jason Griffin, OneVision's Director of Product, and again, very excited to have you here today for what promises to be a fantastic discussion with Paul Starkey. Paul is uh something of a living legend in the uh in the CI industry, so we're lucky to have him. He's been a driving force behind uh many big companies and initiatives such as Elon, Bravos, Prep Tech, amongst others. Paul's uh a business architect, a growth coach, a serial entrepreneur with a proven track record here of helping individuals and businesses really unlock their maximum potential. Additionally, Paul's now stepped outside of the industry, which I think gives him an even more unique lens on the question of what this channel gets right and what it is that we too often miss. So today's conversation will be all about unlocking those insights and helping you come away with a better understanding of what it takes to win in the CI business. Paul, thank you so much for being here.

SPEAKER_00 2:30

Jason, I just love being here. Yeah, we're really we're really excited to have you.

SPEAKER_01 2:35

So I'll give uh just a quick few bullet points here about what people can expect, and then we'll jump right in. So, some of the big topics that we're gonna attempt to cover today, what actually drives growth and where do businesses tend to break? What to watch for in private equity roll-ups? We're seeing a lot more of this in the industry. And Paul obviously has a really unique perspective on these things. How AI, data, and better systems are changing how fast businesses can operate. This is one I am particularly excited for. And then additionally, what lessons from outside the industry can help you build a stronger business? So, Paul, I was thinking a lot about where to start today's conversation. You have made the comment to me that far too few integrators look at their business like a true operating system. I'd love to hear you riff on that. What is what does it actually mean to you for a business owner to look at their company like an operating system? And what sort of things does that really unlock for the business owner?

SPEAKER_00 3:29

And thank you. You know, I I've been in business, I hate to admit it, 50 years now, uh, since since college. And um what I failed to see first 40 of it, maybe, um, was that there's always a business model behind the business. And um we we we get so entrapped in the day-to-day selling, installing, doing all the things that that you know owners, operators do, that uh I think sometimes we miss um what the real business model is. And I think the more you you understand the business model, the better you can execute. Um we were able to do that with um the vital management concept that actually goes back to 2013. So that's that's incredible. It's been 13 years since that. Uh that's just started with a dumb idea. And the dumb idea was hey, if we could take uh profit-loss statements and balance sheets and make them so everybody understood it and wrapped it around the uh the business model so people understood the levers better, uh, we could make a difference with integrators. And um I I just had an idea, it was in my head, floating around my head of you know, kind of dice boards for dummies, uh, kind of idea. And uh uh met Steve. Steve was already doing great work, he was my integrator. You know, if you read the EOS stuff, there's always a visionary and there's an integrator, and I've been so blessed to have great integrators with me. So so I mean that that was I would point out that that I would say um the business model and and understanding that. Um I've been able to look into about a dozen different industries now, and it's it's always fun to do the discovery to figure out, you know, how these businesses really work.

SPEAKER_01 5:41

Yeah. Yeah. I think that point about um, you know, you being the visionary, having an integrator ties to a broader kind of meta point of just like understanding who you are, right? And what your strengths and what your weaknesses are. And I think that's like such an important part of being successful in business because we all have strengths and weaknesses. And I think identifying those and then making sure that you're looking at your role in the business and doing everything you can to align the things that you're working on day to day with your strengths and then getting people around you to really augment the areas where you're not as strong.

SPEAKER_00 6:14

Yeah, and no, no one person can do it all. I mean, if if you end up being a one-person business, you're not gonna scale. So, you know, it it a lot of it is is knowing yourself, knowing your limitations. And you know, for me, I'm just not a repetitive task person. Um, I I love the challenge of solving problems. I think every great business starts with solving a big problem. And um so I I I that's where I like to live. And uh we'll get into AI like now. Yeah, yeah, definitely. It's it's really keeping me from retiring.

SPEAKER_01 6:53

So yeah, yeah, I I look forward to that. Before we go there, though, I do want to jump into so you you know, you've mentioned the word scaling a couple of times and uh demand generation, you know, figuring out where the business is coming from, what problems are you solving for customers? How do you get in front of those customers and drive that demand? I know you've shared with me that you perceive this as something that too few integrators are really paying attention to. We do have a unique business in the CI channel, and that we a lot of our business does come from referrals through builders and architects and designers. But what's your mental model for this? I mean, how do you encourage integrators to think about demand generation, marketing, and really scaling the business from a growth perspective, you know, because it all starts with generating more demand. You can't scale a business unless you have more people to sell to.

SPEAKER_00 7:42

It's been interesting because I've been on both sides of the equation. I've been on the B2B side, the business-to-business side, the business B2C, which is business consumer. And um it, you know, when you're on the B2B side, you don't think too much. I I think about um the demand side of it. You you know, there's pretty finite, finite set of targets. When you get over to the B2C side, the the instant thing is, well, it's there's so many people out there, I can't really wiggle needle. I can't, I can't really uh, you know, I can't build a brand, a big name brand, and that kind of thing. So, you know, what has been interesting for me, uh coming out of you know the CI end of it is you know, most of the business comes, like you say, from another source. Somebody else, we're all almost drafting off the somebody else's client. Somebody's already uh got the ball rolling. And for many integrators, it stops there. It's just um don't know how to do business development, maybe don't even have a clear sales process in place. Um you know, some of it is a customer on lot 39 needs a quote. You know, uh that's not a lot of demand agitation right there. Um uh I've been in the fencing business where we had to create our own leads. Um I'm now working in uh uh a different uh B2B business with chiropractors. Um so it you know what I'm seeing is you know efforts that go into really doing marketing in a way that that that generates uh new eyeballs on the brand, uh new inquiries, uh that you know turn into proposals and hopefully into projects. So, you know, that's I I kind of slice the business into four pieces, uh demand being kind of the marketing or the market-facing side of it, uh sales, which I think are really, you know, that's the conversion, you know, converting the demand in into uh you know opportunities. And then, you know, operations and finance, which kind of was my focus at at Vital uh originally, uh operations being the install side, if you will, in my book, and then you know, finance being the steward side of uh understanding, you know, the the cash and the profit, because those things are two two really different things. Um and I I think if you look at it in those four slices, um you you can better orchestrate what you know a company should be doing or what your company should be doing. Um most people go out of business because of demand, really. I mean, there's not enough demand. Um in CI, I think demand's pretty steady. Uh, most companies find a niche where they have got repetitive projects coming in. We always talk about RMR, but you know, RMR at the end of the day is a pretty small portion of what most integrators uh experience. They uh uh reoccurring customers is probably the most important thing as uh you know um that builder or architect or designer or you know that source of of customers continues to evergreen, if you will. That that's important. Um but I mean it it's really managing those four aspects of the business that I found, you know, makes the difference. And those are the businesses that are most challenged when you get to breakpoints. We're gonna talk about growth and everything. I my first couple of businesses, every time we added about 30 people, it seemed like the whole company culture changed. You know, it it it was just, you know, I remember the when we we first were involved with law and we had 12 employees. And you know, when we got to about 40, it was like, hey, this is really becoming different. And then we got uh 75, and then we got over 100. And every time there was there was a lot more specialization going on because you know, early on, everybody does everything. You know, we we used to just hire people for rug burns if they would make a diving catch on the carpet. Yeah, you're in, you're part of the team because somebody had to do something all the time.

SPEAKER_01 12:34

Yeah, so yeah, yeah, and and what what advice do you give? I mean, because like for for a lot of integrators out there who might be listening to this, you know, adding 30 people to a company is a lot. They may never add 30 people, but the same thing applies if you go from two people, probably to five or to 10. And I've been part of, you know, I've always worked in small businesses. I've been an integrator for many years, and I was part of several integration companies that went through this where, you know, you you basically double in size, right? You go from four to eight people, and even that is just a really fundamental change in terms of the way the business operates on a on a day-to-day basis. Do you have any advice or lessons that you've learned in your career about navigating those sorts of cultural and operational?

SPEAKER_00 13:13

Well the challenges, the challenges on one end become communications because you you you're not self-reliant. Um, you know, there's always an evolution where the owner is in the middle of everything in these small companies. And then, you know, getting out of the owner-centric model where you know people are empowered to make decisions and and things happen without uh the owner being involved. That those those are important stages uh you know to get through. But communications is one part of it, the other part of it is really process. You know, when things are very tribal, everybody, you know, has the the how-to do in in their heads, that's a little hard to replicate and scale. So it, you know, uh people like Jason Seon are helping a lot of our investors in in the in the space learn how to think about process and think about documenting that and replicating it and refining it. Uh, I mean, continuous improvement. I don't care where you are on the on the scale of growing your company, uh, you got to continue to improve, you got to continue to change. And, you know, so I communications and process are the biggest speed bumps, I think, as you add people. Um, you know, because you know, some people take instructions very well, some people won't move until they're told to. Uh others are very, you know, progressive, lean forward. You know, I've always loved to work with people who you didn't have to really coach, yeah, you know, to do things that were highly motivated, that were able to uh because I I I never faulted people for making a mistake. Now making the same mistake twice, uh, you know, that's that's a tough one. Um, but you know, you if you don't take the risk and you don't, you know, because we're we don't always know what a decision will result in. So it's important to get people that you know are capable of thinking, capable of doing, uh, not getting in the trap of just thinking about things, but actually doing them. I mean, action is probably the the best thing in a company because you know, if if you act and fail, you get to act again.

SPEAKER_01 15:41

Right. Right.

SPEAKER_00 15:42

Um if you let go ahead.

SPEAKER_01 15:45

Sorry, yeah, I was just gonna say, and I think the you know, the ability to um be decisive and also operate in sort of ambiguous environments. Something I I think a lot about is like as I look at different people that I work with and different people on my team, is like you have this spectrum of people on one end who you know need things kind of really spelled out and broken down and concrete, and then on the other end of the spectrum, you have the type of people that you can throw these huge, abstract, ambiguous problems at, and they're able to take that, decompose the problem, figure out a plan to kind of move things forward one step at a time and take that action. And so I think like as a leader and business owner, like you're gonna end up with people across different parts of that spectrum, but it's really important to be mindful of it and also to again take deliberate measures to recruit and build a team around you of the types of people that you want. And I think if you're trying to scale and you're trying to grow, the more of those people you can get who are comfortable making decisions and operating inside of a relatively ambiguous environment feels so critical to me. I'd be curious for your thoughts on that.

SPEAKER_00 16:50

Well, you know, one of the things I I've witnessed, uh I've I've been around a lot of teams, and you know, the best teams I ever were uh was involved with, there was always a a little bit of a contagion, uh, you know, contagious attitude to it. So, you know, one person would would lead, the other people would would would see the example, and it became contagious. And sometimes it's just simple things, sometimes it's just attitude. I've been spending a lot of time on uh 10x thinking and how to grow businesses, you know, uh beyond and beyond. And most of the time the things that um keep us from being great are the things we're not willing to do. Uh and and sometimes our competitors aren't willing to do it. And those that's really the space that if you can get into, if you're you're you're comfortable, you know, doing some things that people aren't other uh others aren't willing to do, there's that's where the breakthroughs come. And I think you know being too conservative, having you know, less than always on attitude, um, those are the things that keep keep good companies from becoming great. Yeah. Um you know, when you can get the team contagious about that, uh, it just feeds on itself, you know, because those environments have everybody has a high respect for each other, everybody is is pulling in the same direction. Um, you know, I mean it's fun to win. Let's let's admit it. I mean, there's there's the you know, the you learn a lot when you lose, but it's it's more fun.

SPEAKER_01 18:38

A lot more fun to win.

SPEAKER_00 18:39

More fun, more fun to win.

SPEAKER_01 18:41

So yeah, certainly. Well, I think that's actually a decent segue into a topic I I do want to get your perspectives on here. And that is the you know, continued uptick of like private equity roll-ups, mergers, and acquisitions in the channel. You've been through a lot of this, you have a unique perspective on it, you know. And speaking of winning, right, like a lot of integrators out there are hoping for a successful exit at some point. And I'd love to hear your perspectives first on this topic. The first sub-bullet I'd like to hit under that heading is you know, if you're an integrator out there and you're thinking about succession planning or ideally maybe being able to sell your business at some point, what to you are some of the key components in the in the CI business specifically that you think integrators should be focused on if they if they are thinking long term about you know where all of this is headed versus just dealing with the day-to-day business in front of them?

SPEAKER_00 19:34

Well, it's an interesting thing because we all get busy. We're all sucked into the day-to-day, and you know, I I can't tell you how many integrators, and I've worked with hundreds and hundreds of them, that when I'd ask them the simple question is, you know, you know, what are you thinking about exit? When you what are you thinking about 10 years down the road or whatever? Most of them said, you know, I I don't even entertain that thought. I don't even think about that, you know, because they are busy in in the business, right? Um, so it it is something that um, you know, I've been involved in 15 equity events. Um I guess my first one goes back to 2000 and probably 1999, let's say, because I was raising venture capital back then. But but I would, you know, you know, so I've had 27 years of seeing transactions done and and seeing a lot of owners deal with not only exiting, but raising capital and and and growing their companies. And you know, our we have a lot of activity right now, uh a couple, three or four different, you know, roll-up groups going on. We were fortunate enough to be able to execute the the the Bravest deal. And because I always thought we had it backwards in in custom integration. I I think we were so enamored with rolling up and getting paid that we missed, you know, the preparation stage, which is you know, we we spent a lot of time uh getting uh the accounting and the operations thing. And we didn't get completely there. I mean, you uh we got far enough down the road where you know we raised 65 plus million dollars. Um and you know, I still think that model is is is a viable one and a good one. Um, I learned a lot of things uh post close though, that you know it's one thing, yeah. I think I think owners should look in the mirror and say, hey, what where what what I want to get what's what it's it's kind of a Stephen Govey thing. You know, what what let's start with the end in mind? Where do I? Want to be? You know, is it retirement? Is it is it um you know some level of comfort? I mean, a lot of our companies make good money, so you know, people are you know pretty fortunate they have money to invest and you know create nested and that kind of thing. But where where do you want to be and what do you want to be doing? Yeah, I think those are the questions to ask. And because when you get involved with investor-backed uh buyouts and those kind of things, uh things are gonna change. I can tell you that. Um, you you can get a check, but I don't think most people are all about the check. I think it's it's more about where do I want to be in life? What do I want to be doing with it? If if it is a check, what do I want to do with the check? You know, uh, you know, what you know, it it could be uh charity kind of things you get involved in. But but you know, the important thing is knowing, kind of asking yourself who you are and where you're going, where you want to be. Uh, and then as far as the mechanics of it, I think too much of it goes into the valuation and in the in the deal making, where I think the day after is when it really starts. That the day after you sign, you know, to to turn your cover company over, whether it be to a successor or be, you know, to investor group, or you're gonna stay and run it, it's gonna change. I mean, uh uh with money comes a lot of things. My my first deal, I made a mistake on where I got the money from. You know, I I was so like, I gotta get this deal done, I gotta get this deal done that I lost sight of who I was getting the money from. And it turned out not good for me. Uh, the first one. But you know, I learned, hey, it's not you can get the money from a lot of different people. You have to get it. You have to almost go into it's like this is a marriage, this has got to be something that's a relationship that works, works long term. Uh, the after is always the hardest. The integration work after these roll-up deals are being done, that's the hardest part. You know, um, it could be a hard because you don't fit with what they're trying to do. It could be hard because your people aren't ready to make that level of change. Uh, you know, a lot of the things they're gonna ask you to do, you could have done on your own if if that was your drink, you know, your vision. So I, you know, I think it's it's the after party that I'm most concerned about with with the uh you know uh the the roll-ups and everything. Yeah, we've been doing succession planning, which is usually a strong number two, number three uh in the company, and and it's a well-known almost family situation in most with the most integrators. Um, and we've been putting those deals together for several companies, and and that's an interesting dynamic too, you know, because um of us owners don't want to give up, you know, the the reins. You know, we don't we don't we don't know when to quit, you know. I always knew when to quit because I always had something else going on, or two or three other things going on.

SPEAKER_01 25:28

Ready, ready to jump to the next thing.

SPEAKER_00 25:29

Yeah, I got bored.

SPEAKER_01 25:32

Yeah. I I I'd love to to dive one layer deeper into the um kind of acquisition exit planning question. So really there's there's two broad things, right? There is um making your company attractive for that in the first, assuming it's something you want. I think your point about getting clear about what you actually want and maybe being careful what you wish for is an important one. But we'll put that aside and let's say there's an integrator who indeed is is fixated and know is clear on their goal to sell their business. First, there is making your business attractive to a buyer. And I'd love to hear your perspectives, given your experience with Bravus and just generally in these kinds of environments, what makes a company attractive? And then there's getting yourself set up so that you're actually successful after the deal. And same question there. What makes owners and businesses successful in that environment versus the ones that fail? So, how do you get set up to be an attractive acquisition target in the first place? And then what should you focus on if you want to navigate, you know, the day two, like you said?

SPEAKER_00 26:37

Well, most of our integrators have some challenges in getting ready. Uh, one is our our accounting practices across the company to company, or you know, go out there and pick 100 companies. It's a mess, it's it's inconsistent. One of the things we we did with Vital, and they're still doing it today, is we got a conforming set of chart of accounts, we got a uh consistent way of recognizing revenue. Um, you know, so it's accounting is very important. And I didn't say uh counting, I said counting. Um very important and and and to understand what's important from you know a valuation standpoint, um, you know, uh some of the companies we find there's a lot of personal stuff intertwined in it. Uh that's not good for you know a third-party buy-in company. Uh usually gets adjusted out, but it's also culturally a speed bump. Um the, you know, the the things I would say, and you know, Matt doesn't pay me to say this, but I I would get involved with a company like Vital. I mean, I I I think they they help structure discipline, they understand the business model, um, they can get the financials uh correct, they can identify um, you know, people issues if there's people issues, process issues if there's process issues. Uh, so having you know, having a good story is we're we're not static, we're not, we're growing. You have to be growing in this business, or or you're going backwards, basically. So uh need growth, you need profit, you need cash. Uh, a lot of our companies uh don't understand the difference between profit and cash. And you know, because of that, there's not the you know, they strip the cash out every year, and there's not a lot of cash in the business. Um you know, working capital, which is like AR and inventory, accounts payable, those things are out of whack. Um, so you know, having you know somebody in your corner that helps you get ready, I think, is an important step. Uh valuations will will be you know different from whoever's buying. You know, I'm sure Daisy is paying differently than Bravis that is paying differently from some of the other uh regional buyers out there. Um you know, I have my theory on what companies are worth in this space, and we've we've actually done a lot of valuations for for uh companies. Um you know, once you get the deal done, then I think it's it's which you should do due diligence before to know, hey, what are they gonna expect me to do? What am I gonna have to change? You know, what how how is how is the culture gonna change? Because when you start to put together, you know, we put together, I think, 12 or 13 the provost. There's probably more than that with Daisy now. You you can't take disparate, you know, things that happen, you know, and evolved all differently and put them all together and expect kumbaya day one. You know, it usually doesn't happen that way. Um people are used to doing certain things certain ways. Things things generally have to change. That's that's fine. Um, I think most companies in our space as they grow, you know, developing the middle management layer is really critical. You know, having it not be uh owner-centric. If it's owner-centric, they're not buying the owner. They're they're wanting to buy a business that can 2x and 3x and 5x, you know, uh in the future. If it's all dependent on one person, that's tough. Um you know, having good ops people, having good, good install lead techs, um, you know, field people, having great salespeople. I mean, salespeople are the the the the one I think most of us struggle with. You know, if I if I wanted to quadruple my business, you know, can I find three other salespeople have? And the answer is generally no. And sometimes you don't want to clone what you have. You know, what you had was was fine, but it's it's not, you know, um what got you here won't get you there necessarily. Well, we in in the sales front, we have a lot of unicorns, you know. God bless them, they're great, they're awesome, they're productive, but it's hard to clone unicorns. Yeah, yeah. Um, so that you know, that's that's a consideration. Um, but you know, the the the things that that are gonna happen once you do one of these deals or you pass it to successor, a good successor is gonna look at this. He's he's he's gotta grow demand, he's got to grow conversion, he's got to grow uh install productivity, uh, he's got to be able to find great people, or or have a system where you find good potential people that you can develop, uh, which is you know what we were trying to do with uh Prep Tech. Um you know, you need some kind of financial uh oversight. I mean, it's funny in our business, the small business, fence business, same way. You know, most of the financial people are like mother-in-laws or sister-in-laws or wife's or you know, family members, you know, it's uh they kind of know how to do this stuff, and so they're doing it. And let me tell you that if you don't have really prompt acra data, it's like driving a car with you know the this, you know, those sun things they put in Texas, keep your dashboard from heating up, yeah. Get the car the sun shield. Yeah, it's like driving with those still on, you know, it's it's it's very difficult. Yeah, not ideal. It took me a year in the fence business to get their their their accounting squared away and getting the right person in there so we could we could run the company successfully. Yeah, I can't tell you how many CI companies are stuck in that bug. And it's it's a shame. And CPAs don't know our business. They they don't know. I I I thought I would never be one of those guys. I know our business is so much different, but they they they they know it, they know business uh generically, and and there's a lot of nuances in CI and some of these what I call sell and install businesses that um you know you're really missing leverage if you don't don't understand the model and you don't understand uh the information you need to drive the levers in the business.

SPEAKER_01 33:49

Yeah, yeah, devil's in the details. Well, I think that's great advice. I have a couple of more quick questions I want to hit on this kind of broad area, and then I want I want to shift gears into AI, but these are questions that came in from the audience ahead of the event. So Steve Weber asked, if there was anything that you would do differently setting up Bravos for the investment phase you went through, given the benefit of hindsight. Is there anything when you look back at your experiences at Bravos, is there anything you'd do differently?

SPEAKER_00 34:14

Yeah, there's a lot of things I did differently. I'm sure there are. What comes to mind? We Jay uh, you know, I would say we chased um top line, even though we coached to bottom line, you know, we we had over a $12 million EBITDA when that deal was done. Um we weren't as selective as to who should have been in there. So we ended up with companies that were 180 degree out of phase with each other. Uh extreme luxury companies with people who had grown their business with security accounts, basically, and others that have had been low mid-market project businesses. Um I I think we should have focused on fewer companies more aligned, more more go-to-market aligned. That that would have been uh I think a smarter play for us. Um I wish I would have stayed the first year after the close to run the business. I mean, uh, and and I maybe that's an ego thing, but um the system that we had really required a lot of time from Steve and I. And we, you know, we left day one. We actually we left almost six months before the uh uh the closing. So, you know, there wasn't quite the continuity that that it that it needed. Um so I I wouldn't do that again. Uh so I think you know, having some better certification process of of who you let in, not just chasing so many locations or so many uh uh or a revenue number. Um probably working more consistently on assortment and some of things. We we didn't get into to telling the the companies you know what to spec or what to quote and everything. I I think if you're gonna run as a company, that's gonna happen. It's gonna happen. So you know, should you should you align yourself with with vendors and lines and brands, you know, everybody. Oh, I've been this rep's been my guy for 20 years. I can't obviously change. Hey, a freaking speaker is a freaking speaker. So you you line up, they all have great margins, you know, pick a line or two and stick with it. You know, we we had we had companies sourcing speakers from Crestron. My God, you know.

SPEAKER_01 37:09

Yeah, well, those are great, those are great.

SPEAKER_00 37:11

Sounds stupid when you say it out loud, but you know, uh, you know.

SPEAKER_01 37:15

Well, no, but I think those are great, those are great insights for anybody thinking about, you know, we work with a lot of integrators at OneVision. Um, you know, Steve's one of them, multi-location integrators, uh, aggressive growth goals, expansion, you know, this is something we see. And I I think like those are really good insights, you know, thinking about the details of consistency in the model. Are you going after markets that are just totally 180 degrees different from one another? What does that imply and so forth? So I think that's that's good advice. There was one other question that came in. I'd love to hear your perspectives on, which came from Grady. And it's, you know, what's what's the optimum size of a high-end residential integration company? Too small, you can't keep up, too big, you get bogged down. I'm curious if there is a number that you have in mind. Uh, or how do you think that's a good idea?

SPEAKER_00 38:02

That's a great question, because I I've you know, I I've probably seen more profit and loss statements and balance sheets than almost anybody on the planet here in in this space. And my my tendency was once companies get over 10 million, they tend to layer on a lot of non-selling, non-installing uh layers of people. People's the biggest you know expense of the business outside of you know the material cost cost of goods, which you know, um, you know, that that's very manageable, particularly it should be more manageable bigger you get, but uh the people side becomes a little harder. That's that's what difference between a one and two million dollar integrator and a three to five million dollar and uh uh let's say a seven to ten and uh ten to fifteen and a fifteen to twenty-five is really the the the the the people and system side of it. And um I do think there there's probably a a a sweet spot, and it's it's probably changed a little bit. Yeah, I've been out a few years and we've been through a period of inflation, but it you know, it used to be five five to six and a half million was was probably a a good spot where you know you're gonna be making a million to you know million five, some some could even do better uh on the bottom line. So, you know, I think that's a great healthy business, particularly if you got recurring sources of of new customers and that kind of thing going. Um most companies over 15 start to shrink their bottom line. Doesn't make sense to me, but yeah. Uh I I can I've worked with many 20 million dollar and over companies that I look at it and say, man, you guys are walking by two million dollars a year.

SPEAKER_01 40:14

Yeah. Yeah, grow growing top line, but the but the bottom line is is shrinking.

SPEAKER_00 40:20

Yeah, well, and and you know, and in they start to justify it in a lot of ways. I you know, I think I don't don't think it's ever about the top line. I think it's really about uh you you need to pay your people well. I mean, I I think if you you know it's the people that make the business. So, you know, the owner making profit at the expense of his people. Uh I got I got issues with that. But um, but I I you know I think if if you're paying your people well and you're you know being responsible, um you know, uh running the business, I you know, I I I don't know what year it was, but I realized I you know I don't want to be in a business I can't make 20% profit on. You spend so much time and energy and everything into it, risk capital into it, you know. Why why would you want to make less than 20%? And there's a lot of people going out there. Oh, I'm at five, I'm at six, I'm at seven, I'm eight. What is he saying? Yeah, I'm saying it's there, it's in the yeah, we had we had guys making 25% net in this business. Um we took dozens and dozens and dozens of company from low single digit, you know, two to six percent profit to 18, 19, 20, 25. So, you know, it's it's understanding the model again, it's it's being willing to pull on the levers. Yep. Anybody making less than 10% in this business is underpriced.

SPEAKER_01 42:08

Got it. Well, I think that's a good, that's a really good framework for people. And and if you're way under that number, it's something aspirational to you know to understand what's what's possible. I'd love to shift gears here in the time we have left and and and talk about AI. So you've dropped a lot of of knowledge here and wisdom, hard-earned wisdom. And I think, you know, AI is arguably a way like like I'm listening to this call, and I'm thinking, if I'm an integrator, I'm taking a recording or transcript of this call immediately after, and I'm dumping it into AI, and I'm giving it a bunch of context about my business, and I'm saying, let's start talking, build me a framework and help me unpack all of this and and map it to my business. It's it's insanely powerful at these sorts of strategic questions. And you've said to me specifically that if you're somebody who's in business strategy and you're not spending an hour or two a day in AI, you're you're probably falling behind. So I'd love to open it up to you to just talk about your use of AI and specifically in the context of an integrator who's listening to this conversation, how do you use it as a lever to get to the next level in your business?

SPEAKER_00 43:13

It is such an ex accelerator. I mean, it's it's lighter fuel fuel, I think, for for yeah, I consider myself a business architect. That's what that's a title I prefer these days. So, you know, I I spend probably close to three hours a day uh with AI doing various things. Now, I always have four or five irons in the fire, so I can just kind of hop, skip, and jump from them. Uh, but the the speed and the depth and the clarity and the iteration ability of AI to refine ideas and um and deliver. Execution plans because you know the thinking part sometimes is the easy, it's the doing that separates the winners from the wish I would have done that uh type. So, you know, I if you're not using it, uh you you need to use it, and I'm not one of these where I have five different platforms, and you know, when I start coding with with AI, somebody shoot me because take you out behind the shed. Yeah, they'll yeah, I'm not going there. But yeah, in in terms of of playbooks, in terms of uh strategies, in terms of pressure testing ideas and that kind of thing, um, in terms of generating uh visual concepts, whether you know it's it's it's PowerPoints or it's infographics or whatever, it to me it just helps communicate concepts so much better and faster. Um, you know, I I'm uh almost like an AI junkie now, I guess, because I I you know I I've never had an assistant all 50 years of business. I I've never had uh a personal assistant. And um so I use it that way. I use it for all of uh you know my strategic, you know, laying out of businesses. Uh I you know, I'll feed a spreadsheets at times to to help you know have to check its math a lot. Uh but it it's great. I I think it's it's it's something that every business owner uh should have. Um I think it's something you you should learn how to use it better. Um I'm I'm still a novice, you know. I it's probably equivalent to my Excel and Word and PowerPoint skills, which are you know remedial at best, but you know, it it's use it's very useful.

SPEAKER_01 46:06

It's a tool, right? And yeah, you you learn how to use it to solve the problems that you that you're dealing with, and that that's all you need to do. I I'm gonna launch a poll here, by the way. So everybody who's with us live, I'd love if you could take a minute to fill out this poll, which is just trying to get a gauge for you know where everyone's at in terms of AI use uh in today's audience. So we'll give that a few minutes. And you know, while that's coming in, there's a couple things, Paul, that you said that I that I'd love to react to. So, number one, this idea that, like, hey, I'm not in five different tools, I'm not using claud code to go build custom software. But it's clear to me from this conversation and others that you and I have had that you're very, very bullish on AI. And the thing that I would encourage people to take away from that is it doesn't have to be complicated, right? Like you can get in there and just use it in simple ways that can still be like incredibly effective. And then the other thing that I've observed that that tends to surprise me is how few people, yeah, at least in my circles, understand AI's ability to act as that strategic thought partner. So people will sometimes, I'm a big AI guy, and people will ask me, like, what's your favorite AI use case? And and honestly, like, I feel like my answer is is kind of boring, but it's like I use it to like get in and learn about new things. So if I have an idea for our business at OneVision or an idea for my department to solve a specific problem that we're grappling with, AI is my first port of call every time now. And it's, hey, here's this idea. Maybe here's some additional context about the business. Let's just unpack this together and help me think about it. And that just back and forth, that dialogue can really help you get a better lens on the problem, look at it from multiple angles, and then at the end of it, come out with some sort of concrete deliverable, whether that's something that you talked about, like an execution plan or a brief that you're sending out to your team to say, hey, here's an idea that's really fully fleshed out. So I think these this kind of like strategic analysis and using it just as that thought partner within your business is just can be just so impactful.

SPEAKER_00 48:03

Well, and the other thing I would mention, we kind of didn't get too deep into this, but I've been able to use it to develop a more comprehensive view of whatever business, like almost an operating system from front end to back end uh for the business, um, which I think sometimes we we have such an isolated use of things, very specialized use case that we're looking at. And I think if if you will allow it to iterate and reiterate with you, you can get some really, really key insights as to how to build an end-to-end uh system, starting with demand, working through conversion, working through install, working through finance, and uh it it accelerates your learning so so fast and deep. Um, you know, and anybody who's kind of critical of the same people that probably said, I don't need email back 20 years ago. I remember being in a in a CES meeting, and so people people were just saying, Hey, I got an email address. This is gonna really be cool. My partner says, I'll never use it.

SPEAKER_01 49:21

Crazy. Yeah. Yeah, and it does feel like you know, AI is becoming that, right? It it is just gonna be table stakes where there's a lot of dialogue and conversation around it right now and a lot of excitement, but I think sooner than later it's just gonna be expected and something you know that you're that you that you're just using. And I I think it's you know, there's lots of conversations about AI and how it's gonna completely transform business and and displace jobs and so forth. And I think those are important conversations. And I I think nobody's talking about the the other side of it. How many businesses are gonna create the opportunities exactly?

SPEAKER_00 49:55

The the way that it it generates code, there's gonna be a you know, application explosion, there are gonna be business explosions. I mean, the entrepreneurial uh life is gonna be hundredxed with AI. Uh now you know, the jobs it's replacing are are the redundant, you know, a little bit, you know, I wouldn't want to be in that job for 50 years, but I think, but I I think there's two sides to it. I think one is gonna all the opportunities it's gonna create. Um I'm sure the blacksmiths felt the same way, right?

SPEAKER_01 50:31

Yeah, yeah. Yeah, times times are changing. Yeah, so it looks like 78% of um uh attendees here who answered are using it daily, about 22% occasionally, and then we had zero in the aware, but not actively using it or not using it at all.

SPEAKER_00 50:45

So that's I I never use it as a replacement of Google, not that I'm a big Google guy, but a lot of people use you know Chat GPT just as a search engine. I I rarely do that. I write massive prompts. You know, I always write them in Word first because I I can correct them at the typos, but you know, if you're not using it to to write like big healthy prompts and getting really uh deep, juicy stuff out of it, you know most people can can answer the trivia questions.

SPEAKER_01 51:20

Yeah, yeah.

SPEAKER_00 51:22

Using it in a in a purpose-driven way, I think, is is what what does one of these prompts look like?

SPEAKER_01 51:28

So uh an example, maybe you have a an idea for a new business model or something like that. Talk to me just at a high level about the about about your process.

SPEAKER_00 51:38

Let me see if I can recall a recent one. Um recently I was invited to consult a brain instrumentation uh business that sold equipment that did five tests to test stress and your response and basically your nervous system, the internal condition of your nervous system. I knew nothing about still no know much about it, but so I I said to my girl, my my girl is called Grace, by the way.

SPEAKER_01 52:10

That's your AI. You're giving me for your AI, yeah.

SPEAKER_00 52:12

I was like, Grace, you know, I said, uh, we're a business architect, you know. We have to figure out uh what we're gonna do. This, my my friends actually own the business, and she sells the equipment to chiropractors. That's her channel. So I said, you know, Grace, you're a business architect. Uh this is what you got. Um let's develop a growth plan for them from them. I I suspect that the data that we get out of this this instrumentation is not well understood by the uh practitioners, and we need to make that simple. And uh, you know, kind of went from there. And yeah, basically, she she caught out right away and said, Hey, this is a blades and razor blade or a razor and razor blade uh strategy. The money isn't in the equipment, the money is in the analytics, the data, and the reporting. Uh turns out they have 10 years of data that's stored locally, that if we got it to the cloud, now we can have normalized results. So essentially the concept that came out of this is we could create brain work like blood work. Everybody goes, you know, maybe once in a while gets blood work done. You know, if you're diabetic or something like you're probably going every quarter, you know, you get your cholesterol, you get all your uh A1C, you get all your blood uh makeup uh done. Uh this is like a brain workup. Uh so that whole concept, simple concept, exploded into a whole operating system where now we're offering uh to the chiropractors this data and analytics with the intelligence to interpret it, not only collect it and classify it, but interpret it. And then by creating brain patients, because they're usually just have pain. Oh, my backs are I gotta go to chiropractor. Now they're attracting more patients, they're adding more services to those patients, they're keeping the patients longer. Now you got a cubic, a three-way dimensional growth. So I mean, all this came out of this one prompt. I mean, it was like my my big unlock.

SPEAKER_01 54:35

Yeah. That's so cool. I appreciate you sharing this specific example, and I think it generalizes so well, right? You pick any challenge in your business, any problem that you're trying to solve, yeah, new market you're trying to expand into, build more relationships with builders and architects, like you name it. Just go in there, be thoughtful about how you're prompting it and the context that you're giving it, get down into the weeds, give it a lot of detail, and then just watch the magic happen, right? It's pretty cool.

SPEAKER_00 55:02

And it, I mean, it goes back and forth, back and forth, and you'll you'll go a hundred miles an hour down a cul-de-sac, you have to slam on the brakes and pivot. It's just like real business. Yeah, yeah, exactly. You know, uh, but it it I really enjoy it. I enjoy the challenge of thinking and and getting through some of these things.

SPEAKER_01 55:22

Awesome. Paul, well, I think that's a great place to wrap things up. Really appreciate you taking some time out of your schedule to come join us. This was a super fun conversation. If there was any um parting words that you might have for the audience, again, somebody out there listening to this and really growth-minded wants to get to that next level in their integration business, what what would that be?

SPEAKER_00 55:44

Well, I I I think, you know, read a lot. Um if you're not a reader, use AI to help you read what what's appropriate uh to it. And and and I said, you know, uh take the lid off the jar. You know, I think some of us get trained because uh of our risk profile, where it's like the flea, you know, only when the lid's on the jar, you only jump just that far from the top. You can take the lid off and the flea's still jumping where it is. I think you know, I think, you know, just think 10x. Think, think how, you know, how you know, if if I got a million-dollar business, how can I get to 10? If I got a three million, I get to 30, you know, some of that you'll you'll you'll you'll probably get to a point where you're you hit your comfort zone. But I think a lot of our own restriction is on our own mental acceptance of good is good enough. Um, you know, I'm not gonna press on this, I'm not gonna push my people, I'm not gonna, you know, let them push me. Um so I I think just you know, adopting more of a 10x mentality. What does it take to be uh great and and and be unreasonable? You know, I think when we become reasonable, we become average.

SPEAKER_01 57:12

So yeah, I love that. Think big and and never stop learning. I think those are are really good, you know, parting words. So, Paul, again, thank you so much for being here. If there's anybody listening to this either live today or on the recorded version that wants to get in get in touch with you and learn more, uh maybe ask a follow-up question, what what would be the best way for them to do that?

SPEAKER_00 57:32

Yeah, I'm I'm at uh Paul at Fenco F-E-N-C-O Invest I-N-V-E-S-T.com. That was my fence investing company. Um that's the best email uh these days. Um I'm on LinkedIn, probably have my phone cell phone number there. You know, I'm always happy to help people. Um that's that's really my my goal in life is to help people be uh reach their full potential. And you know, if if I can help people do that and uh they help others do it, then you know the world's better.

SPEAKER_01 58:16

So yeah, yeah, absolutely. Well, Paul, thank you again. This was a ton of fun. We'll let you go. Hope you have a great rest of your day. Thank you. Thank you everybody for being here today. Thank you. Yep, absolutely. And uh we'll see you all on the next one. Take care, everyone. Bye.