The Real Playbook Behind an Operator-Led Roll-Up (10 Acquisitions in 18 Months)

Myös Torei, Ceremi, Yamaguchi, Sereja, Lansopuner, - whose built scale, and exit the three home services businesses - each time combining technology with so-called pouring - fragmented markets. He built Golden Shine in the housekeeping space - then law and law, why combinator back national law - care brand he sold after eight years of sprinting. Now he's building Kavanaugh, a national pool cleaning company - that blends M&A, software and local execution. Thanks a lot for coming to the Holko Builders Podcast, Ceremi. -Haven to be here. Thanks for having me, mate. -Could we start with a bank? I mean, this hope hopefully - helps me understand how you think about your current - opportunity and the next business building in Kavanaugh. Some time ago Nikita Beer have tweeted - the greatest trick that venture funds played on entrepreneurs - is to make it seem glamorous to spend your most youthful - years having meetings with middle managers while you patiently - wait for a liquidity event that will arrive when you're old - overweight and ugly. And you've wrote the fascinating - tweet, a retweet, where you pretty much share different ideas - of which type of opportunities you built and you're not - like giving advice to people immediately. But again, as I said - trying to understand how you think about different opportunities - so maybe you can elaborate. -Yeah, so this is some time ago, but about probably five, six - years ago, I was in two CEO forms at the same time. And both of these forms had different - make-ups of the founder, different kind of founder compositions. One was heavily venture backed with a bunch of hard charging - venture types who had raised hundreds of millions of dollars - and were building or attempting to build multi-billion dollar - empire's. The other one was a bunch of bootstrappers. And the thing that was notable to me and kind of what I - what I rift on in my response to Nikita is that - the bootstrap contingent were visibly far more wealthy. Right? Like they lived in gorgeous houses on the beach and - had tons of disposable income and you know, had already - like pulled forward the lifestyle that you would expect from - you know, hyper successful founders. Whereas the venture - guys were in many cases more sophisticated. Not because raising venture makes you more sophisticated, but they were just playing at a scale that required a depth of - sophistication that the bootstrappers didn't necessarily need. Nevertheless, lived in relatively like modest homes and - had like deferred a lot of those lifestyle gains. Now it should be said many of that group have - since sold their companies for high eight figure, low nine figure - mid nine figure sums. So they won in the end, but - that was a very long - but also some of them also went to zero. Some of them spent 10 years compounding to very large - paper valuations and then saw no kind of exit liquidity - and no final financial reward. It was just an interesting kind of thing to observe - is that bootstrapping might not take you to the same heights - it certainly won't, but it certainly will give you - or often will give you, you know, a much near term lifestyle - boost than if you go to the venture path. Venture path is very much delayed gratification, I think - for most folks. I will add one final caveat though, - which is that the advent of secondaries and founders raising - kind of secondary liquidity in these hot rounds - has solved this to some degree, but - that phenomena tends to trend on interest rates and - kind of broad deal heat and stuff that may or may not be out of your - control so you can't quite count on it. But that is a remedy to provide near-return liquidity - to venture guys who are otherwise locked up for a decade or more. - Excellent. This is what I wanted to discuss. Now, what about you, Jeremy? Let's start with your background - and maybe most importantly, how do you do it all? I mean, your skill sets, your beliefs, your execution, the drive - where does it all come from and try to mix it with the story. - Yeah, I mean, I, you know, I guess I can go back to the beginning - but I was born and raised overseas, - kind of born and missionary parents, - so grew up in Japan, Southeast Asia and East Africa - as a teen and immigrated to the US as a late, you know, - at 16 kind of late teenager. And always was very entrepreneurial, grew up kind of selling candy - and stuffed animals to my school yard friends as a, you know, 10-year-old - and then made balloon animals and sold them at festivals - and kind of Matsuri in Japan, - created fine wood furniture as a late teen and sold that - to kind of get to the United States or sorry, get to Africa - and then eventually the US. And so like, had a pretty instinctive entrepreneurial streak - or DNA from the beginning, - and knew I just wanted to build companies. So when I got here at 16, I got a GD early, - finished high school at 16 and started my first business, - which was a web dev shop. You know, I'd previously been a self-taught designer - and was doing a lot of visual design work, - but got sick of designing things that just lived in a hard drive - and never saw the lot of day or did anything - and you know, had no function, it was just only form. And so, you know, I went out and taught myself how to code - and built a digital agency over the next four or five years. I started building websites for friends, - scaled that into a growth marketing firm, - kind of got deep on SEO, SEM, LeadGen. It's where I first cut my teeth and kind of - performance marketing and digital marketing. And then ran that for a bunch of my late teens early 20s - and was very much more successful than I thought I would be - as a, you know, 19-year-old, - but was ultimately limited by the finite number of hours I had in a day - was looking for something that had more natural scale - than a consulting business, which was, you know, - bounded by my kind of finite time. And found the opportunity in '08. I went to go book and made, - realized the entire home service landscape is super offline, - largely low tech. And you really just have like two choices at the time. You could go to Craigslister, Yelp, - or the yellow pages at the time. That was still thin. And like, pick a random service provider, - quality was all over the map. Or you could go to, you know, Molly Maid's or Mary Maid's - and one of these large franchises. And even the big franchise players who were much more expensive - still didn't use much in the way of software to run their businesses. So I looked at this and I was like, "Man, - I know how to build software. I know how to grow companies. I know how to like do lead gen kind of generate leads. What if I just built a software platform that generated - all the demand and then paired third-party independent contractor - kind of home service professionals with homeowners? And we start with house cleaning and then we do carpets and windows - and kind of scale from there. And so I ended up building what was, you know, - essentially like a handy, which, you know, exist in the US. They've raised about 130 million. They eventually sold to IAC. But, you know, prior to them and fully bootstrapped. So I built this in 2009, ran it to 2013, - and then sold it to a private equity firm in my early 20s. And that was kind of the first meaningful exit - and, you know, the end of that particular journey. But it was a great business, never raised outside capital, - good across Southern California and then accident. And then knew I wanted to build another home service company. I was like, man, the entire home services landscape, - even though I'd been in the space at that point for years, - it hadn't still evolved that much, right? Like most, it was hyper fragmented. Honestly, man, like 15 years later, this is still kind of true. Like we've seen somewhat more tech penetration, - but not as much as you would imagine. And it just is like, it's very much for whatever reason - blue collar industries live on the lagging tail of tech adoption curves. And they're often last to adopt kind of novel, nascent technology, as it emerges. And so, you know, I realized, man, - broadly home services is like a trillion dollars a year in the US. It all looks like this. So like, let's go keep building in this category. And I went and I started a company called Lonlove, - which was a marketplace for long-care and landscaping. Not too dissimilar from Goldenshine, kind of home services marketplace. Only this time around, I knew I wanted to raise venture. Because one of the things that I faced at Goldenshine is - at the tail end of running that business, - having raised no outside capital, - I saw over the horizon a bunch of hyperfunded competitors start to emerge. So a company called Homejoy raised about 40 million - from Google Ventures and Y-combinator and Andreessen Horowitz and so forth. A company called Handy, - raised a bunch of money from various East Coast VCs, - Losh.HBS. And then a company called - was that exec was founded by Justin Khan, - kind of founder of Twitch, somewhat celebrity entrepreneur. Great dude, but very well capitalized. And all of these folks are selling house cleaning services - for, you know, negative unit economics. You know, paying their maids more than they were charging the customer. They were fligmantly violating labor law and worker classification laws - and I looked at this and I'm like, "Man, - these guys have raised infinite board chests - and they're coming for me and they're going to run negative unit economics - until the end of time. This is not a great business to be in. So got out of the way of that particular steam train. And, you know, - but resolved that the next time around - I wanted to be the one with the board chest. Like I wanted to be the one with venture dollars to go - eat markets, you know, - potentially run in negative gross margin territory for some - hopefully short period of time in order to kind of take market share. And so applied to Y-combinator with the next one. Got an interview, ultimately got a comeback with traction. You know, pitch-pull-gram, Jessica Livingston, Paul Bukkite, - a bunch of folks. It's like seven of them are raised and me as a solo founder - kind of fighting for my life on the interview. But ended up got the interview, but - ultimately got a no and it was a fateful email that was, you know, somewhat disheartening to get, but I kind of resolved to keep building. I knew I could build another like high growth, high velocity business in the space. And so just put my head down, grind, grind it out for the next six months. And then as a afterthought, applied again on the final bat, the final day of applications on the summer 14 batch. And more or less just reuse my same app and, you know, submitted it. Paul Bukai immediately emailed me and was like, hey, what's changed since your last kind of application in today. And at that point, we were going very quickly from like, comically small numbers. So we did $200 in revenue in month one and, you know, 700 a month to 1500 a month, three and 3500 and four and 7,800 and five. And we were at like 13,000 a month in revenue six months in. And I just share those numbers. The invite me to interview again next time around, I interviewed with Sam Altman, uh, Kazzle Eunice and a bunch of other folks over there. And it was a very different tenor. The whole dynamic was like pretty collegial. They were answering each other's questions for me. Ultimately got a yes, got in, went through the program, which was a whole gauntlet in itself that I could talk about. But, you know, emerged at a YC raised two million bucks from Joe Montana and the Pritzker family and a bunch of folks. And we were off to the races. I then spent the next eight years growing long love or seven and a half years going long love to a national brand and lawns. So we scaled across 120 cities, 40 states had about 250 kind of full time corporate folks at long love at about 7,000 texts in the field, mown lawns every day. So we rebuilt a, you know, meaningful business in kind of on demand home services. Ultimately sold the company to a competitor called lawn starter and merged to create the largest marketplace in lawn and guarded in the country. Uh, that business is still going very well. But found a happy exit in a, in a category that I think has a lot of deadpool, right? Like on demand, Uber for X style businesses have almost become, you know, they've very much become a meme as, you know, me to model kind of, they take a working model in one vertical and try to like obtusely apply it to every other vertical imaginable and it often does not work. So I'm pretty proud that we managed to build a profitable business on relatively few dollars. We raised a grand total of like 6.5 million bucks and built a phenomenal scaled business with, you know, in a category that has a whole lot of, a whole lot of deadwood. So that was the journey. And then, you know, could talk about post facto stuff. But I realize I'm giving you a entire end to end life monologue and happy to pause and let your answer, ask questions where you have them. That's perfect, man. Thanks for, thanks for sharing. You said it's this base that the industry overall services industry is not too developed. Why do you think it's like this? Don't we have enough cherries or what is what is the thing they're like? You know, I think it's probably very, very low. Right. And so because it's very easy, this isn't true in every vertical. One of the mistakes that new home service founders often make is they think home service verticals are largely the same because, you know, from a zoomed out view, they all have similar mechanics, right? Like you customer comes to you, you quote a job, you close the job, you, you know, schedule and dispatch, dispatch a job, you know, service flow goes out, render service, you build a customer, done deal, right? That is like at a zoomed out level, how it all works. But every industry is extremely nuanced as all of its kind of unique, idiosyncratic hair. And you got to really be thoughtful about where you build and why, not all of the verticals are equally good. But I think in many cases, home services is just an easy business to get into as a single solo operator. So this means that your average population of home service operators are probably moderately sophisticated versus if it had a much higher barrier to entry. A very quick pause from the broadcast. If you like what cherries, you're spilling at cabana, but you don't have a pipeline of proprietary deals yourself. Check out our today's sponsor, capital bat. It's where investors pack the next generation of business buyers. Inside you'll find vetted searchers, real acquisition opportunities, and deals you won't see on public brokers, think like serious operators, clean data rooms, clear timelines, and buyers who actually know how to run the businesses after the close. Because the real edge isn't just finding a deal, it's packing someone with a time horizon advantage, the operational discipline, and the chargement to buy from the right sellers and build for the long term. If you believe in backing builders, head to capital bat.com. You can browse the opportunities, partner with proven operators, and put your capital to work alongside people who execute. That's capital bat.com. I'll also put the link in the show notes now back to the show. Right. You would only be able to attract founders who could raise substantial amounts of capital and had to jump over a lot of filtering hurdles in order to even get access to play the game. You can play the home services game at a kind of entry level, trivially easily. And the most obvious example of it is like teenagers mowing people's lawns. You can literally as a 12-year-old go moseom lawn and collect 30 bucks and start a small lawnmowing business. If that's any indicator of if teenagers can do it, then what's the average level of operator in the industry? A saturation or a median operator that might not be sophisticated because they just simply don't have to be. In many cases, they can become that. I've met many, many, many home service operators who started as teenagers and kept doing it one day after the other and have over 30 years developed impressive levels of sophistication in their businesses. Almost irreducible levels of sophistication as you want to go by their companies and you realize how much tribal knowledge and domain expertise they've recruited over so many years. But that's a story for another day. But I think the, that's my like off-the-cuff sense of why it's still relatively fragmented. It also just like frankly is not an industry where you it's easy to sell vertical software. Right? Like if you think about it, vertical software go to markets are probably best targeted mid-sized categories where there's enough mid-sized companies to go buy or go sell your software into. When you've got this like massive field of minors, the go-to-market motion for selling vertical SaaS to pool cleaning companies where the average company, the 72,000 pool cleaning companies in the US, the average company does like 130 grand a year in revenue. It's a difficult business model to go chase down a bunch of tiny businesses with what we call single-polars or chucking at truck types and sell them 50 bucks a month's software. You know, they churn it 20% a year on average because they got a business to go get real jobs. Right? It's just a tough model. So that I think is another reason why penetration is kind of lagged. But we'll see honestly man, like AI might change all this stuff. There's that, you know, the ease and the speed at which people can build and deploy functional point solutions in near real time is like honestly incredible and it's a brave new world out there. We'll see how it looks in about 10 years. What's your view on game selection? Because something you mentioned like the average level of of the operator, maybe not the highest because the kids can can start their business very simply, just doing door knocking or just calling their neighbors on the same street. It's relatively easy. What is your thought process when choosing those opportunities when it comes to the game selection, like who you're going to against? Like, and this question paired with what are your own strengths and weaknesses when doing it all? I think this is probably one of the most important questions and possibly one of the least interrogated ones by founders who start companies. I know it's certainly true in my case. Most of the early businesses that I started were really just like me putting one foot in front of the other and I kind of fell into them in one way or another. Right? Like I didn't set out to be a home services guy, but now I have 15 years, you know, building, scaling and selling home services companies. Now buying home services, and so, you know, I think it's only on this most recent endeavor with Kavanaugh and the pool industry that I've been extremely explicit in what I wanted and what I was trying to achieve. Almost everything else, even long love, I took like a week off after selling home shine and sort of long love a week later. I definitely should have taken more time, but like it was pretty reflexive. Like I was just like in the business and kind of intuitively knew how to do with something else that was narrowly adjacent to what I just finished doing, so when did it? Right? And that's not necessarily a bad thing. Right? Like to to answer your question of how do you know what businesses to operate in or what opportunities to pursue. Like I'm a big believer in comparative advantage, right? Like ask yourself what things come to you easily that other people find difficult. Right? Like if you're going, if you're like some power nerd who's just incredibly good at churning out prodigious amounts of product, but you struggle to sell or you struggle to talk to people, you should probably not, you know, find yourself in a very sales heavy industry. Right? Unless you have a counterpart who can go take that mantle and do that job. Similarly, if you're like not technical, this is probably the more common failure mode actually. I think technical people can learn to sell much more easily than like non-technical people can learn how to code. Although soon to be not true or already not true given the advent of AI, but you know, if you're not technical, I see a lot of non-technical founders trying to go solve hard problems that have big technical modes or barriers. That's really tough. Right? Like you don't know what you don't know. The unknown, unknown, surface area. is enormous in the mind field that you're likely to walk across is much larger and more densely populated than you probably anticipated. So like, you gotta be careful there. I would very much just say, play to your strengths. First know your strengths. Maybe this is the hardest problem, like know thyself. I think a lot of people live blindly and somewhat autonomously without actually interrogating what they are good at and what brings them joy. And so write it down, be explicit, what are you actually good at? If you're not good at anything, figure out what you can get reasonably good at. I really do love this, this like, who's the guy? So Jim Simon's founder of Rentech has this story that I've thought of many, many times. And he talks about how, you know, growing up in high school, he was extremely, you know, precocious. He graduated high school early, got into MIT early, very, very, very smart, graduated top of his class and then gets to MIT and is doing math and MIT. And he realizes that he is measurably less smart than some of the peers around him. Even though he is like a one of, you know, one in tens of thousands intelligence, there are people at MIT who are so kind of comically smart at math that he is embarrassingly slow relative to them, right? And so he developed this idea that I've thought about many, many times and it is, okay, like, it's good that I'm smart, but it's not good enough that I'm smart because there are people here who are demonstrably smarter than me. So I need to be smart and I need to be something other than just smart and I need to meld those two things to build my own unique durable advantage. And in his case, what he arrived at is he was smart and had good taste in what sorts of problems to work on. And he observed that even though there were people at MIT who was substantially higher clock speeds than him, they kind of just again, reflexibly fell into problems that were most adjacent to them and didn't really think through what was worthy of their time or what problems were most promising or were the implications for commercialization were most significant should they solve these problems. They didn't really think through that. So Jim, Jim Simon's had good taste and was smart. He was both of those things and he wielded the combination like a weapon to create rent hack, which is obviously one of the greatest kind of trading firms in human history. I just, I think that's a phenomenal framework, right? Like I think this notion of you're probably not going to be the best in the world at any one thing that you do, but I would venture that if you like, keep refining what you do to find the intersection of various things that you're at least reasonably good at, you will find something wherein you are like probably a one of, you know, the top 10 best people who are jointly, you know, smart and personable and can do reasonable marketing work and are reasonably good at code and can work with, you know, blue collar folks who are difficult in the field and, you know, you can kind of like find the intersection of your many relatively strong talents to the point where you now have differentiated yourself as like a one of one. And that's a, and if you can find an industry or an opportunity that aligns with that, you're in an incredible place and you're on the right path. That's a great thing you said, like having good taste and solving the right problem because you can be wrong here as well by having a good taste, but choosing a wrong problem for yourself. So that means you're not going to be good at it. Exactly. So like find the intersection of things that you're good at, your zone of excellence and then try to find opportunities that are most, you know, with a Venn diagram, maximally overlaps, you know, the problem space overlaps your what you happen to be good at and what comes easily at you that other people find difficult. That's comparative advantage, right? If you find yourself operating in that world, you're going to outcompete your competitors all day long because they're suffering every day and you're singing and skipping into work makes a difference. What about you? You're smart and what's the thing for you? Oh, I mean, I'm a living example of this advice, like I've taken it to heart. I'm not the best home services operator in that there are very much people who are better running scale blue collar companies. But compared to, and I'm not the best programmer or software engineer or kind of product manager in the world, but I'm a pretty damn good product manager and I'm a recently good programmer. And for technologist, I am unbelievably good at blue collar home service stuff because I've been doing it for 15 years and I have a lot of the scar tissue and the trials of having worked with, you know, armies and armies and armies of blue collar types. And I can very easily trade in that industry and I know that industry well. I'm not the best growth marketer in the world, but I'm much better at growth marketing than 99.9% of software engineers and certainly most pool companies, right? And I'm not the best like fundraiser in the world, but I'm radically better at fundraising than like anyone who has, where's those hats generally, right? If certainly anyone who has the intersection of those hats. So all of that together, it turns out are the explicit skills that I need to be uniquely good at to go to these deals, right? To build Kibana. And that's Kibana is a direct explicit expression of all of the things that I happen to be quite good at and, you know, targeted toward building a multi-billion dollar kind of public scale company. Now when you dig day to day, they turn into weeks, weeks turned into months. We discussed this a bit, but what comes easy to you when you look at your day, look at your weeks, months, what comes easy to you? So the things that come easiest to me are actually weirdly, I love doing hands-on kind of I see style work. Like I love being in the weeds, literally helping build products, you know, building out marketing campaigns, driving SEO. I think with people has become a lot easier for me as well. Like I like building great teams. Obviously, part of the team building exercise is one of managing, you know, underperformers out of the business and that's never fun. But if you've done a good job hiring and I think we very much have, you're going to largely be surrounded by excellent people who motivate you, inspire you and add energy to you and working with them and kind of managing that org ends up being pretty fun because it's really just doing cool things with people you genuinely like and enjoy. And that comes easily to me. I don't find that to be like net energy depleting. It's energy adding. Honestly, talking to pool company owners and hearing their life stories and connecting with them is pretty easy for me, mostly because for whatever reason I was born pretty and frontally curious. And it's a really special thing to be able to parachute into someone's, you know, 40-year business and see all the decisions that they made and understand how they made those decisions and why they made those decisions and learn about them as individuals and, you know, connect with them personally. Like that is fun and like genuinely interesting. Like it scratches a deep curiosity in me that I think I find wildly rewarding. And so that stuff comes easy. I could do that all day. Yeah, there's more, but that's like some of the, some of the broad strokes of it. Now, we covered a bit pool company owners. Tell me what exactly are building with Kavanaugh and tell me the thesis and where are you today and let's go from there. Yeah, so at Kavanaugh we're building the first national brand in pool services. And the whole idea here is that if you look at most other home services vertical, whether it's past control or longcare or HVAC, usually it's like wildly oversaturated with private equity rollups, there's many, many, you know, usually one or more public scale household names in these industries. Whether it's true green on the longcare side or, you know, orkin terminics on the past control side, doesn't exist in pools. But pools are about $10 billion a year. They're largely recurring. They're non-cyclical. It grows through every macro environment and it's hyper fragmented. But no one is built a household name national scale player in the space for a variety of reasons. Mostly because there's not a lot of skilled companies for private equity to go by. So this is not a good target for traditional roller models. Because they're pretty hard businesses to run, barrier to entry is low, any dude with a pool skimmer and some chemicals can, you know, throw stuff in his truck and start cleaning pools. There's a lot of like, there's a lack of middle management sophistication across the org or across the industry where you have, you know, a deep bench of talented service managers that you can go tap to help scale and operate your businesses. And these are all like barriers to scale that we're solving using process systems software and just being smarter than our competitors. Hi, one more quick pause from the podcast to tell about our second sponsor, Spacebar Studios. They've been a long time sponsor for us and in January, it is month they offering an insane offer. 35,000 new newsletter subscribers in 90 days, Karen did or you don't pay. There is no setup, there's no retainers. But this offer is only for two companies in January. So if you want more clients, more deals, more capital and just maybe better operators showing up in your inbox, what you need to do is you need to be known and Spacebar Studios, they will handle everything for you. Strategy, voice, writing, design, sense schedule and again, they will grow your list. So you can focus on investing, operating and running your business. So if you want more customers, again, book a free call with them, spacebarstudios.co. I'll also put the link in the show notes. That's spacebarstudios.co and now back to the show. And so that's the thesis is like, can we spend the next 10 or 15 years building a household name and fools and we do this in three ways. Step one, we go by amazing pool cleaning companies. partners with sellers who have run their firms for years have built, lovingly built, beautiful businesses and are looking for the next chapter. We'll partner with them and buy their companies. Step two, we kind of professionalize operations further. In some cases, we learn a lot of a lot from them on what they've done better and democratize that across the rest of our business at Cabana. But fine-tune the playbooks so that we can continue to drive performance and margin over time, and grow the companies organically, which we do very well because I have a 20-year growth marketing background. I built lawnlove.com into a top three property and lawns on Google. We did a million unique some months and generated hundreds of thousands of leads a year. So building that same thing in pools and then piping all of that organic demand into the companies that we buy is a big part of the thesis. But finally, and this is probably the most important part is that we use these businesses as the bootloader to build a vertical software. And this is really important for a few reasons. One, you could take off the shelf software and tooling like Schimmer or Poolebrain or Ion or whatever, and you could deploy it into a mid-to-small size bulk cleaning company and you're going to get a decent amount of tech leverage from that. It's far better far superior than running a rousal on paper. But the software that exists in the market today is not built for any sort of scaled company. Is that built for complex multi-operations, multi-location operations? It's not built with the premise of integrating lots of standalone enterprises at a high velocity through an M&A style growth model. And what we've learned, I bought the first 300,000 lines of code at lawnmove and then we hired armies of engineers and product guys who built and built and wrote many millions and more behind me and built an enormous amount of product to power that business. And what we learned at lawnmove is that the amount of technology leverage you can get when you build opinionated tools that solve your own bespoke idiosyncratic needs are enormous. And it's an enormous advantage to have in-house technical expertise to fully automate workflows end-to-end in the way that you want to run your business, then to have to build generic general software that works for any random pool cleaning company from one single individual in a truck to 50 trucks on the road. You can't build good generalizable software that drives. You could build generalizable software, you could build good generalizable software, but definitionally it's not going to be able to give you the same amount of technology leverage as if you built the spoke software for your own unique needs. And so that is what we do. And that is a big advantage. And that is something that one, your average pool cleaning company is not building their own tech. They don't have the in-house expertise, they're not native technologists we are. And honestly the P firms aren't doing it. And they're not doing it because they are mostly financial arbitrages, not technologists as well. They're not by definition innovative. They're not trying to radically change the way things are done in a given industry. They're trying to take best-in class off the shelf and deploy it into some business. And that's best case scenario. That's assume you're not getting slapped into some platform and left for dead, you know, just to be flipped in three to five years to the next holder. Right? So this gives us a big advantage versus the PE buyers because their time horizons are much shorter than ours. Right? Like they are definitionally playing three to six year games before they have to recap and sell you to the next bitter. We're playing long-term games with long-term people. Like we're going to be doing this for 10, 15, 20 years. However long it takes to build a household name and pools. That's what we're doing. And this means that we have the natural incentives to go invest in teams. And if we buy companies, the goal isn't to just fire half of them to get the EBITDA up so we can flip you in the next three to four years. The goal is to genuinely invest in your team because there's not some other bag holder downstream that we can just dump you on. Like we are the bag holder. We care about how well the business performs over decades. And so we can take EBITDA down as long as we need to to invest in R&D and build a little tech and give us a durable long-term competitive operating advantage. And that's exactly what we do. And I think it's an enormous advantage to sellers because they can sell their companies to private equity where they know the incentives just not that these are bad people. There's many great people in the industry. But like the incentives by virtue of their funding models require them to juice EBITDA in the short term and optimize for the short term. Our incentives are to optimize from the long term and we have a just a profound time horizon advantage that we will exploit until the end of time. Can you share a webinar today? Where are you at? How has it been? Has it been as you expected? Or how's the investors approach? Like how things are going? Yes, so we've raised 10 million bucks so far. We've done 10 deals over the last 18 months. Without sharing explicit numbers, we've grown revenue 4x year over year from 2024 to 2025. We expect to double again in Q1, growing extremely fast. Most roll ups that we've looked at suffer pretty badly from retention and churn. We have not. We've retained most of the customers that we've acquired. We've retained 100% of the teammates that we've acquired. We have, as of today, I'm very proud to say, have never lost an employee from a company that we've bought that was regretted. There are certainly people that you buy who are not a good fit for the new regime and we happily move them on to find better jobs that are better suited for their kind of long term interests. But of the companies that we buy and the folks that come with it, we've never lost a person that we wanted to keep and this is very hard to do because you're buying companies that are mostly just a collection of people and some trucks. These are people-powered businesses. We're not buying factories. There's not huge existing infrastructure. This isn't software where most of the values in the code, the values in the team. If you don't do a good job integrating these teams and helping these folks who, to be clear, had no say in being sold. Their company got sold out from under them. They might have reported to their founder, boss, for 30, 40 years. And they might feel some kind of way about you coming in and being like, hi, I'm your new boss now. So handling that transition with grace and being very thoughtful about how to communicate well with the team and get them inspired and motivated for the new frontier is a lot of what we do. And so far, it's been going very well. So this is to answer your question, we are outperforming our initial expectations handily and are very excited for what we're going. But when you set out to eat an elephant, there's no other way to do it, but one bite at a time. And there's a whole lot of wood to chop between here and the promised land. So we're definitely not taking it easy. I think we're kind of, finitially ambitious and excited to go 10X again in the next few years to continue on about to what we think is an inevitable public scale company that we're building. You said you've done accomplished the then deals and no good person has left. So I would like to ask, what changes for those people, for those small business owners when they join to you? And I guess I can say, they are not working for you. They're working with you. So what changes for them? So the first thing that changes for them is that the career ladder just immediately extends in front of them. So most times, most pool cleaning companies that we look at are kind of small to mid-sized. And that means by definition that anyone in these companies has, in many cases, been limited in their career growth by just the scale of their own business. It's difficult to graduate into a senior role if someone's already sitting in that seat and the company is not growing very fast to create a bunch of seats like it. So if you want to become a service manager, if your field tech and you want to become a lead tech, you've got to wait for the lead tech in front of you to leave or retire in order for you to get that job. If your lead tech and you want to become a service manager, you've got to go to the same. So the very static, they're very slow-paced in terms of the career growth that they can offer their teams. And as through no fault of the business owners, these are beautiful businesses and they're often very loyal, wonderful people that they've built their teams that they built around themselves. But you just can't create jobs for no reason. You can't create roles that don't need to exist. We create roles all the time because we grow so fast. We have an infinite appetite for service managers and lead techs and repair techs and kind of senior and progressively more senior folks across the company as we grow. And we're big believers in promoting from within. So the second we buy the company, we can genuinely tell these people like, "Look, you just got a 10x extension of the career ladder in front of you." If you want to keep doing what you're doing and you love cleaning pools all day and you've been doing it for 20 years and you don't really want to change that, great. Here's what's not going to change. Your route's not going to change. Your pay is not going to change. Your benefits aren't going to change. You know, none of that's going to change. The only thing that is going to change is you're going to order a different shirt and you're going to probably drive a different colored wrap truck and you're going to use a different software. But it's going to be pretty similar to what you already know in terms of the kind of based mechanics of it. It's easy to learn. That's all that changes. Everything else, you know, you're getting net new benefits most likely. You're never losing benefits. And your career opportunities just expanded meaningfully if you're motivated and if you're ambitious and if you're interested, the path just got a lot wider for you. So we tell that story all the time and teams find it very motivating for sure. How many students are unsurprisingly? As you would expect. They find that pretty exciting. How many synergies for those businesses? One sterile on your portfolio and your portfolio? I mean, the synergies are many, but most of it comes from our preparatory software. But like the thing that I, I mean, there's obvious synergies, right? Like you get sort of like scale economies on your camps, do you get scale economies on your route density and, you know, it's kind of localized network effects on routing and labor margins and so forth. But, you know, you get like operating leverage on the kind of back office and whole co-team and stuff. But really, what was surprising about this strategy that I don't think people often expect is how much you learn from the businesses that you buy. And I know that sounds weird because you're like, why would you not expect to learn a lot from them? You've just joined the industry and they've been operating for 40 years. But what I mean more by that is most business owners who are running their companies. This is true for like all businesses, not just bull cleaning. They run one company for their entire time in the industry. Right. And they might like have some peer groups and you know, to chat with some peers, but it's usually pretty competitive and pretty closed-lipped, right? And they don't get to see the alternative universe where they made different decisions all along the way. When you buy companies, you literally get to parachute into the alternative universe and say, you know, Bob built Bob's pool service with, you know, a per-stop payment model. And this has this margin implication, you know, Jeff put chemical tanks in his supplyhouse and this had this implication, right? Like these guys charged customers for fifth week services. These guys did not. These guys charged customers for yearly heater tuneups. That's a great idea. We should probably do this. Right? Like, you know, you get to basically see all of the best practices and like smart decisions that these operators made. Again and again and again. And at some point when you buy like 100 of these things, you're going to have basically covered the entire surface area of good ideas that could have possibly been had. And you're going to have incorporated all of those best ideas into your business to create the like mega best operated company, ignoring economies of scale, ignoring other synergies. Like just the ability to adopt good ideas that are frozen and isolated in this one, you know, small to midsize company in Sacramento and deployed across your entire scaled operation. That is really cool. And you only get this with a high velocity M&A machine. And most founders never get to see this because you just don't get to see intimately all of the kind of decisions that happen in a similar competitive business. So it's pretty cool. I like that a lot. That part was that part itself was very surprising. Now I want to get a bit more practical for listeners. Yes, your portfolio is growing through M&A. But what about each separate company once joining with your team, with your holding company. And because you mentioned something before that you're strong at growing those companies organically. So maybe you can share, I don't know, top three things. Please don't hold back because listeners, they run those traditional business themselves. And maybe there are some things which you buy a business you already see it before that it's it's screaming. Like you can you know that once you change this, so many things will improve. Like if you can bring out like maybe two, three things, a better neural experience. Do you mean on in terms of like operating performance and margin or new growth and customer acquisition or yes, yes, customer. The latter, the latter. Well, as you might imagine, most of these companies are not particularly deep on SEO, SEM. Right. If they're running paid ads, they're probably not running really sophisticated advertising campaigns. So being able to spin up our own kind of advertising models and deploy them into these new businesses is quite effective. A lot of these businesses have relatively modest review profiles. They aren't really leveraging kind of GMB. We go heavily in that area and certainly invest aggressively across the local local search and kind of Google my business. A lot of these companies, the most common one, and this is kind of a trope at this point, but it's still true, is that they're run by small to midsize business. You know, the small to midsize businesses run by owners who are busy. And they're busy running their teams, they're busy in the field. And so they often don't answer the phone as fast as you might hope. And so just having really good lead response and nurturing like flows so that when you do generate the customer interest, you're answering the phone and you're quoting the customer immediately and you're getting them, you know, what they need fast. That's just as a profound effect on conversion rate that is a profound effect on how the customer views you from the first interaction. Like investing there is big. And we can do that basically on day one, right. We have a full call center and, you know, very robust lead nurturing and kind of follow-up processes. So we can bolt on these new businesses into our marketing machine and respond much more quickly to leads, nurture them better, drive kind of more top of funnel through investing across local search, paid search, and so forth. And those are the biggest drivers transparently. That's that makes quite a big difference. Another practical thing I think we should discuss is fundraising because you've been able to successfully raise capital on the one hand, on the other hand, you have this experience of actually growing the companies and eventually selling it. So you experience both sides of it and then you you you started again. And so what are maybe some of the things which you've experienced, what works and maybe folks who haven't done fundraising yet or they've done but maybe haven't been that successful. So what comes to mind when I say fundraising one on one? Oh man. How much time do you have? Okay. I could definitely talk for like hours about fundraising strategy and how I think about it. And obviously like the later hours would get progressively more nuanced and unhinged. But the the broad strokes of it, let me try to encapsulate the some totality of my fundraising knowledge into like five minutes. Run it like an enterprise sales process. Right. So figure out who your best possible investors are. One way to do this is you look at all the similar companies in your industry that are not directly competitive figure out who invested in those companies. Right. Once you've built a lead list stack them inversely based on desirability. So you know, you lease favorite investors that you would have on your calf table, you pitched those first. The reason you do this is because they're inevitably going to ask you questions about your business that you haven't considered at length. And so by the time you're pitching your favorite investors or most desired investors, you have meaningfully shaken off the rust in your pitch, you're going to be more dialed in. You're going to be more thoughtful around exactly what questions they're liable to ask and you'll basically have like covered the surface area of possible questions. You're going to get asked when you keep getting asked a question repeatedly put it in your pitch deck in the appendix so that you show that you've thought about this and maybe you kind of foreclose on the question being asked in the first place does they already have an answer. But really the secret is like build a great list of target investors. Try to drive enough, compress the timelines in your fundraise as much as possible so that you waste less time fundraising. Right. You spend less time talking to folks and more time building the actual business. And that also happily kind of drives deal heat, which is important because like any deal, having multiple horses in the race is substantially superior to having one or none. So like you build this list, you immediately try to get warm introductions to all these all these investors. If you have a preexisting network, warm introductions come much easier. That is an advantage of multi time founders with prior venture experience. If you have no preexisting network, one of the ways to get warm introductions, honestly, a lot of VCs will take cold interest these days. So I think I think the warm introduction stuff is overrated. Personally, you should genuinely just like shoot or shoot like take shots. But even on the warm intro side, which are better if you can get them just like well, you don't have an existing network, reach out to some of those founders of those companies that are similar to yours, but further ahead than you and talk to them. And if you're building something impressive and it's and you are impressive and you are inevitable and you are indomitable and you have to be those things. So you certainly have to believe those things about yourself. Because you're doing hard stuff, right? You're sitting off on a journey to go build something out of thin air and ring billions of dollars of value out of the mist. That is like objectively difficult by definition. So you'd better believe that you have some particular quality about yourself that's going to allow you to go climb that hill and telegraph that to the people that you talk to you and then ask them for an introduction. Like tell them what you're building. Help them understand why you're the right person to build it. And then ask for an intro. And then in terms of like how to structure your pitch itself, this is really important. The two pieces of advice I have here are one, understand the fund economics of the investor that you're pitching. So a lot of VCs, a lot of first-time founders will pitch a angel investor who might be much more interested in like downside protection and guaranteeing a, you know, double or triple on their money than they are about hitting multi-billion dollar outcomes. They'll pitch in the same way that they pitched like a tier one VC on San Hill Road, who clearly only cares about, are you going to be a hundred billion dollar company? Right. That is all they care about. They do not care about if you're going to like 5X their money. If they're writing you a seed check out of a 10 billion dollar fund, it's definitely a discovery check so they have an option on on your A or B or C, right? Oh, really, $10 billion on the front. If they're writing, you would A, it's a discovery check, right? And so understand the fund economics and what outcomes matter to them and don't pitch the wrong investors first of all. Like pitch people who are appropriate for the mission that you're going on and the stage that you're building at and so forth. And if people get this one all the time and waste time getting intros to, you know, investors that are too early or too small or underwriting much smaller prizes or who are too big and too ambitious and are underwriting much larger prizes. And they do this all the time. So figure out the stages. Investors will tell you what stage they invest in and they do this by telling you the check size that they write. And that usually you can like them back into what their ownership targets are and therefore what valuations they expect and so forth. But like get the stage right, pitch investors who are stage appropriate. And then the way that I structure the actual pitch is I think about the opportunity in terms of a basket's of risk, right, like every business is a collection of various baskets of risk, right? You might be running at something that is has like really, really significant technical risk, right? Or maybe there's limited technical risk but really it's like distribution of good-a-market risk, right? Or maybe you're doing a hardware startup that's wildly capable intensive in which case, there's like heavy financing risk, right? But usually there's like some combination of like team, problem, hard technology that needs to be solved, hard-go-to-market growth marketing kind of exercise that needs to be proven, you know, a series of risks, figure out which risks are the most significant and biggest and de-risk those first, right? But as you think through this like basket of risks model for your business or for this opportunity, you'll come up with, you know, you'll find out quickly where you have good answers for why you are, you know, you've de-risked it either because you've literally de-risked it and you have proof of it. Or you are like credible and plausible to de-risk it, you know, in some way. Like for example, when I first raised for Kavanaugh, it's definitely a risk to wonder, can you build good technology that allows you to build a field so if it runs a field surface company better than, you know, something that you pull off the shelf? Like that is a product or technology risk. But it's not in any sense a hard technology risk. We're not solving some novel theorem that like, you know, proving some novel theorem that has yet to be proven, you know, without which we, you know, cannot build a business we're trying to like charge iPhones through the air or whatever using, you know, induction charging. You know, the technical risk here is more of a product and kind of execution perspective. Like can you build great user friendly, intuitive products that dramatically move the needle in your day-to-day operating cadence and in the experience of your technicians and your customers? And I didn't have to have done that for people believe that I could do that because I'd done exactly that at Lomov, right? And so I had a great answer that de-risks that particular technical risk, right? So just think about your business through basket of risks, come up with answers to each of the biggest ones and the way that you tell that story, like, to the degree that you tell that story well and most importantly, are truly like, truly inevitable. And you telegraph that inevitability well, that you're going to build this thing and you're gonna do it on the back of your like raw, you know, ingredients as a founder and your skill and your ambition and your, you know, psychotic work effort, work, you know, that is, that's most of it. So if you're pitching the right investors and you're pitching them in a tight cluster and you're getting in trouble to them well and you're conveying your inevitability and you've already been thoughtful around all the risks to your business and your good questions, like congratulations, you are infinitely fundable, you always money. Let's go from here smoothly to something which is not too often discussed and banks being commodity. And you've shared a, you've retweeted something some time ago that you had a deal going on and you pretty much emailed to your, to your person in the bank and the wires were created within an hour and you've said relationships matter in there as well. I think this is something which is not discussed very often. So what are your thoughts on this and how have you been able to be in a position that those wires were cleared within an hour? - So this isn't great advice to listeners because the answer is get into elite networks that have a lot of high powerful people in them, highly powered people in them. So this is basically downstream of Voicombinator which is the premier startup accelerator, almost a trillion dollar portfolio of the companies that they've founded so far. One of their former visiting partners and kind of multi-time YC founders a guy named MD Mod who founded Mercury. And in this particular case, we're buying our first business, company called Poologic from a gentleman named Kyle who still works with us and is a phenomenal human. Rolling up to the closing dinner with Kyle and his wife Abby and we were faced with a very real prospect or I wasn't quite rolling up, like this is in the mornings, wires hadn't closed but was set to have dinner with them that evening. And faced with a very real prospect that these wires that we initiated first thing at like 6am were not gonna clear for various arcane banky reasons. And Kyle, you know how it is, like when you sell your company, I definitely felt this having sold a couple of companies. You trust the sellers, you have to trust the sellers, you don't transact if you don't trust them. But there's some part of your brain that's not zero that's always like, am I getting screwed? Like is this person gonna like, "Gach, am I, did he just take the keys to my business and he's gonna like, have scondoned into the night and I'm never gonna get paid?" So like it's really important to put dollars in people's bank accounts 'cause that immediately alleviates all of that stress. And it's especially important to do that before you have a closing dinner with them. So we were looking at like going into this closing dinner and the wires were not gonna hit and it was Friday. And so he was gonna sit there and like churn in his own soup for like three days if these things didn't get cleared. And I was fortunate enough to have a connection to a mod through a combinator so you know, texted him and he immediately like clear these wires personally. And that's just a huge advantage. But it's not a useful thing to like, say on a podcast because it's like obviously trivially true that if you're deeply well networked across a bunch of, you know, operators in an industry, you're gonna have remarkable advantages, getting things done in that space. And the only way to get to that position is to just like do a bunch of cool stuff and spend a lot of time compounding in your respective industry. And then you accrue these advantages over time and you know, the most expressed version of this is like you can call the president and he does something cool for you. You know, like so like, you know, there's all titrates down to degrees of influence and advantage from there. But yeah, like being a known quantity and having done important things gets you access to communities and networks and relationships and friendships that help you on block important hurdles at various points as an entrepreneur. That is very, you know, that's just like obviously true. - Now you've spent a lot of time in different as you said, communities, you're in those networks, you've both businesses, you've sold businesses. What is the best investment advice you've received yourself? What's something that comes to mind and maybe something you live by? - I mean, I think the, all I use is more from the Cabana lens, right? Like investing, buying companies, you know, I'm not gonna talk about like public market trading 'cause they don't put us into speak well on that. But like I do know a lot about buying businesses and I got some advice that I ignored in the past and we will not ignore in the future. And it is that you should only buy businesses from people that strike you as like extremely good faith actors. You should ignore the financials and no matter how good the PNLs look or how good the financials of these businesses look or how good the terms are or what you're price you're getting in at, if you don't really love the sellers and think that this is a great person who operates and good faith and is open-handed and clear-eyed and good of heart, you shouldn't buy that business. And the reason you shouldn't buy that business is because companies come to exhibit the traits of their founders, right? You know, dogs look like their owners, companies look like their founders. It's just inevitably downstream of all of your like culture is mostly just the expression of your personality and your, you know, foibles and idiocy and credit, you know, human bits that also get filtered out over time and to culture. But like if you don't think that the person is a good faith operator and you buy their business, you're probably right, you should trust your gut. And you are going to find that there are many things in these businesses that have been, you know, hidden or corners cut or, you know, culture cultivated in the people in these businesses that don't match your values and aren't aligned with the company that you're trying to build. So like only buy good businesses, yes, they still have to be good, the financials have to be good, but from good people. And if you don't, if you ignore the from good people advice because the good business part looks so attractive that you're like, I can't help but just buy this thing even though I think the founder might be shady, you're going to regret that. And it's not as good a business as you think. And that's, you know, That is the best advice I can get people who are trying to buy companies is you got to like the people that you're partnering with. And if you don't like them fundamentally as people, there's probably something there that's, you know, subliminal that's being communicated to you by your gut and you should listen to it. Okay, Jeremy. This is awesome. One more question. I know you're busy. What is the favorite book or what was something very good you recently read? Oh, man. I'm reading two books right now. One is the inner game of tennis, which is actually not about tennis. It's about the mental game of high performance athletes and really high performers broadly. It was, it's kind of an old book. It was written in the 70s. I thought I'm about halfway through and find it fascinating and it's really, really great. Mostly kind of centered around how do you quiet the, you know, type one or type two thinking that's like over analyzing all of your performance while you're performing and getting to flow state so that you can actually perform well, really interesting book. And then the other book actually ever here is a thus spoke, Zerathustra by Nietzsche about the uberman and, you know, will the power and conquering your environment and designing the optimal self. I think Nietzsche is interesting. I'm not like hugely new, Nietzschean is a person but I try to read kind of broadly across philosophy. And it's hard to ignore his ideas. They've certainly become like canon in the zeitgeist over the last 60 years. So trying to be like more Nietzschean in my, more Nietzschean formed, let's say, even if I'm not like, you know, totally convinced that this is ultimately a healthy world view. Okay, Jeremy, this was good fun. I'm very happy. We eventually got it done because we were talking about this in August. Now it's December. So very happy that look. And let's do it again in the future. But yeah, thanks for your time today and Dr. Sun. Super fun, Mick. Great chatting, man. See ya.