On Bucket Lists and Edgecraft
For as long as I can remember, I’ve always wanted to drive the Pacific Coast Highway. It’s been on the bucket list as long as there’s been a bucket list.
When I think about it, I really have no idea why, or where that idea initially came from, or what I thought I’d see. Maybe the idea came from watching and re-watching the Fred Savage classic “The Wizard”. Yes, I used the words Fred Savage and classic in the same sentence… fight me.
This past summer, I finally got to do it. And we did it in the most ambitious fashion possible. By renting a Dutchmen Aerolite 22’ Trailer and hauling it behind us for a 26 day road trip… along with a 9 year old, a 4 year old and an 8 month old. Did I mention this was the first time I’d be pulling anything longer than a Sea-Doo on a trailer?
It was basically our version of the National Lampoon’s Vacation road trip to Wally World since we DID manage to sneak a stop into Universal Studios in LA along the way. Griswolds, you have nothing on us.
Yes, people called us ambitious. They called us crazy. They called dibs on the stuff in our house they wanted to take if I accidentally got blown off a cliff along a Big Sur Switchback. Or in our case, get lit up in a trailer fire as I had the brake controller set to 10/10 for the first day and a half until a kind friend told us about the dial that backed it off. BAG FACE
But we agreed that this is likely the last maternity leave we would be going through, and I was still in search of our first acquisition as the Agincourt Ltd team when we scheduled the whole thing. So, while not really working, we saw the gap to check something off that bucket list and went for it. And, of course, as Murphy demands, Agincourt managed to come across a nice little prospect with a properly motivated seller, and closed our first acquisition… precisely one month before I was scheduled to take off for four weeks. This was by FAR the fastest deal I’ve ever put together. I was stunned. Talk about making a GREAT first impression on your team.
Fortunately, I am very lucky to have exceptional partners and teammates - they understood that this was part of a life long dream of mine and they stepped up to be a cause in us seeing it through. And I hope to return that favour for all of them someday. For example, the seller of the company we acquired had expanded travel plans as one of his primary motivators for selling. I will be thrilled when he gets to take his first extended break this coming November as we manage through the transition of ownership. Being able to be part of making someone’s dreams come true in this reciprocal fashion HAS to be one of the best feelings I’ve ever experienced, and is definitely bringing me as close to a tangible purpose for my work as I’ve ever discovered. This concept is one of the pillars of what I mean it is to Humanize M&A, to intentionally draw that venn diagram where prosperity and purpose can overlap in the most delightful manner.
THIS is exactly why I am an entrepreneur - to be able to understand what we want out of life and help take care of everyone that helps take care of that business. This is why I get up everyday. This is why it is so crucial to understand our dreams, the dreams of our partners and co-workers, and to be super selective as to who we work with. One of the luxuries of entrepreneurship is that we have the option to curate our tribe in this fashion, and if you are position to do this, I sincerely hope you are doing so consciously. If not, I invite you to start.
One of the nice things about taking an extended time away from your regular life in this fashion is that it can be the source of revealed knowledge about yourself and what direction you’re moving in. This clarified vantage point is a gift in that you now have the ability to continue moving forward with vigor, or choose to change directions entirely.
2017 and 2018 have been very strange years for me. I had been attempting to reinvent my career as I re-partnered in business, had a new baby, and tried my damnedest to ignore the media circus around US and Western Canadian politics and general doomsaying. I found myself feeling my way through how we could possibly do M&A differently. I view the system as exceptionally broken, and as an outsider that basically backed my way into this world, I’ve got very little in terms of “should-isms” or loyalties to associations or mentors that keep my ideas entrenched into a “this is a way t’s done” sort of mentality. I think the community can do better. Much better.
In order to do this, I had been applying a technique that Seth Godin describes as Edgecraft. It is a process of intentional exploration through doing, through bold iteration at the understood edges of what is already part of the canon. It involves being wrong, a lot.
It is in here that I hope to discover those earned secrets that one can only find by attempting the heavy lifting and understanding, viscerally, what it is that prevents an individual or organization from getting from a literal Point A to a theoretical Point B. Those secrets are what tell us why competitors in a market tend to copy one another and follow blue prints to acceptable results rather than facing the boring or difficult problems so to as land in a truly unique and defensible niche. How can we break M&A and make it really work in a beautiful and enduring fashion?
When I chose that I would get back into acquiring businesses after being bought out of my first partnership that did the same thing, I knew I was essentially committed to getting a Ph D in M&A without stepping foot in a school. I’ve done enough of that for a long time (but thanks for the offer of making and teaching a block week course, Jim). I wanted to take at least the next 2 or 3 career cycles (which in my opinion are about 7 years a piece), and get REALLY EFFING GOOD at acquiring companies and somehow change the game in doing so. Over and over again, it made me sick to see how traditional brokering (doesn’t) work and how that hurts so many people. From day one I thought that this could be a means to create a Trust-based network of affiliated investor-operators seeking exceptional transition businesses to acquire, and peers to lean on in order to become better owner-managers.
Dependence to Independence to Interdependence. For the sellers, for the buyers. With as few people stepping in the middle to take advantage of just how damn emotional and bewildering all of this is for both sides, just so they can get a piece.
I wanted to make something that was remarkable. Something for a community of people like us that don’t fit into the standard lanes in this profession.
Enter the podcast. Enter the openness to possibility. The hypothesis was that more acquisition prospects would come apparent (they did, both directly and indirectly), and perhaps some managerial talent would step up and try acquiring something on their own, or raise their hand to enroll themselves onto our team because they found something that resonated with them. I had no idea what would come, but they came.
The opportunity to push myself into new aspects and areas of M&A came by exploring some unexpected prospects, an unsolicited request to help sell a fantastic business, to advise to two separate committed equity funds, and to coach a handful of others along their own ETA journey. I was never “classically” trained, brought into this by the way of family craft, or groomed at a big consulting firm known for this. All I had been part of was a small handful of deals with our own money and some conventional debt. Could the process translate, or would I be revealed as a charlatan upon stepping out?
But such is the terrifying beauty of edgecraft, of testing one’s mastery. Robert Greene describes the rough process of mastery being one of choosing a direction (or finding your calling), finding a mentor to apprentice under, surpassing the skill of the mentor, and then putting your work into the work with your own unique expression of that skill whatever it may be.
”High level intuition the ultimate sign of mastery, involves a process that is qualitatively different from rationality but is even more accurate and perceptive. It accesses deeper parts of reality. It is a highly legitimate type of intelligence a one that has to be understood in it’s own right. And by understanding it, we can begin to see that such power is not miraculous but intrinsically human and accessible to us all.” - Robert Greene, Mastery
Where am I, exactly, on this curve? I can see a vision for what could be possible, but do I have the skill and network and resourcefulness to make it real, or am I still just an apprentice in search of my next mentor to surpass?
Truthfully, I believe that I am still somewhat early on this curve, but I am impatient, especially when I see a problem that is not being addressed. This needs to happen, and I can try to be the one to do it. Life has taught me to temper this urgency to action where possible, lest be burnt by naivety. In absence of a formal mentor, I am embracing the concept of mentorship-through-partnership and have selected my partners very carefully, to balance my known weaknesses and to accelerate learning in areas I want to be better at and where I know them to be exceptional. I look at every new teaching opportunity and advisory role as a chance to propel my own understanding by being exposed to scenarios I would never experience otherwise.
Edgecrafting is not easy. Doubt is constant and heavier than usual, and the failures feel like they cut deeper somehow. Yet we move forward because we know they are survivable, and that we have a greater purpose to serve. Just find the next edge, the next proximal possible, and leap.
What have I discovered in the last year or so of edgecrafting in this space?
1. Willing owner-operators are still a rarity in this space, and it is a powerful story you can tell to a prospective seller that will make you stand out over the professional buyer. That, and the competition for sub-2 million EBITDA companies is already thin, but even thinner still for businesses that appear to be thin on systems, process or heavy on goodwill. Given that we are willing to play that operator role, why not double down and actively seek these targets as opposed to fighting for the same low hanging fruit as everyone else? There is tremendous value to be made here, because we are willing, and it is our own capital at risk. Why not get exceptional at turning these companies into something the professional, arms length quant investors want? Therefore, we’ve since refined our target mission statement from “acquiring established companies with EBITDA between 500,000 and 2,000,000” to “becoming exceptional at taking a company from 2 million to 10 million” with a meta-objective of shortening that cycle time as much as is practical. Let’s see where that takes us.
2. The emotional labour required to coach other buyers directly was much more intense than I was expecting. This is probably why I have to give myself constant reminders to stay detached from outcome, but I found myself getting really caught up with how my buyer protege’s were navigating their pathway. The good news is that it worked. Out of a group of ~5 proteges, one team was able to complete an acquisition of a company that the one partner was currently consulting to when they discovered the owners were looking to retire. It is a much longer story for another day, but it is off to a great start and if gave me confidence that we could do this, together. But I am really doubting if I can be “the guy” that is there for the proteges every step along the way. This is one barrier that I have one or more blindspots on, and is preventing the next phase of growth for the trust-based, buyer network. I believe the solution might involve having a team in place to keep the plates spnning, but I am short on emotional and mental capacity while we 2to10 our most recent acquisition. If you have any bright ideas here, I am all ears.
3. There remains a significant segment of the population that wishes to invest at arms length without getting involved in the day to day. I cannot begrudge these people, but the simple fact is that these people do not convince sellers to let go, and they are not worth the time coaching as buyers. This is a tension I’ve yet to resolve and I do sense there are better solutions here as the network grows. It would be really great to be able to raise a fund of committed equity to help fund committed operators with great prospects. That said, I do not want to just bankroll these people and remove the value of the VTB from the process. This is a paradox I will continue to probe.
4. Solo-podcasting is not smart. Booking guests is a slog, and editing has put two great interviews that I have in the bag on hold for almost a YEAR as all these other things happened. That to me is just unacceptable and super disrespectful to my guests. I truly aim to be better here. Dropping standards of quality sound or content are not acceptable. Letting go of publishing frequency is likely inadvisable if I want to grow big and fast… but I don’t. I want to play as infinite a game as possible with this and approach the long tail. This lifestyle and approach to investing is NOT for everyone and I’d rather take a decade to gather 1,000 quality fans than rush and fill the tent with a bunch of wantrepreneurs that get nothing done.
5. I am actually stunned with the amount of private placement opportunities in compelling early stage companies have come out of this investigation. This was a total surprise.
So what’s next?
I still intend on podcasting, but very likely on an ad hoc basis. I’m not trying to build a media empire here, but if that’s part of how this will grow into what it needs to be, I am sure there will be both a team and perhaps new hosts, or otherwise interesting new formats. Perhaps it is a shift to focus on people entering the community and their stories. Perhaps meeting sellers and hearing their stories that will help the concept find that next gear. Otherwise, think of this as a gorgeous old world stone wall or cobblestone street that will be meticulously built piece by piece, over time. I’m not going anywhere until I am satisfied.
Part of this is because I am now in full operating mode, and that is very demanding. We only have so much time to transition from the previous ownership and that commands full attention. However I do see great value in more frequent written pieces describing our strategies and tactics around the operational phase of the acquisition process, which is truly something I have not covered all that well to this point, and it could be really very interesting. So that means the inner circle coaching groups will remain on hiatus until I get some kind of bolt of lightning inspiration on how to do it better. In the meantime, you can still purchase the Financial Freedom Basecamp video series that will teach you how you can go from willingness to signed LOI with a seller; and you can still join the Facebook group where you can meet and converse with other buyer proteges and owner-operators. The more of you that are out there taking actions and supporting each other, the faster it will grow and maybe the community will emerge organically.
Lastly, it is our goal at Agincourt to get into a position of where we own net 6 million in ebidta within 7 years. I also wish to have built (or significantly helped to build) a network of 1,000 qualified owner-operators across North America within the same timeframe.
Joshua Wilson, host of Bet the Jockey and The Deal Flow Show, recently challenged me to be more aggressive with this than I am currently being. This was refreshing as I often wonder how I might be holding myself back. It helped that he also referenced the incredibly powerful challenge that Peter Thiel issues:
”How can you achieve your 10 year plan in the next 6 months?” - Peter Thiel
So.. how can I get to 6 million in EBITDA and grow a 1,000 strong network of trust based owner-operators in the next 6 months? That’s the question I will be putting to my subconscious before sleep each and every night until an answer waits for me the following morning.
Thank you for being with me so far.