[00:00:00] Speaker A: Foreign.
[00:00:14] Speaker B: Hey Victors. Welcome to this week's Victory show. This is Travis Cody. If this is your first time joining us, I'm the author of 16 bestselling books and I've had the privilege of helping hundreds of business consultants, founders, entrepreneurs write and publish their own best selling book as well. And, and in that journey, I discovered a fascinating pattern. A lot of businesses sort of hit revenue plateaus and they really struggle to break through those. So on this show, I sit down with some of the world's most successful CEOs, leaders and business owners to uncover the strategies they use to overcome those plateaus and scale their business to new heights. So if you're looking to learn from the best and get actionable insights that can propel your business forward, you're in the right place. And of course, if you like this episode, please subscribe and turn on the notifications. Today my guest is Peter Goodmanson. He's the CEO of B Home 24 7, a leading provider of unified property management platform technology for operators in hospitality and residential real estate. The SAS property technology company allows property managers to control smart home devices, attain operational efficiency and communicate with guests and residents. Throughout his career, Peter has led small and medium sized businesses in the veterinary media, human capital and technology spaces. He's the author of two books, he's a regular media contributor and has published opinion pieces in Forbes, The Washington Post, U.S. news & World Report, the Hill, Christian Science Monitor, and many, many others. And he's also a former U.S. marine field artillery officer. Peter's a graduate of Harvard Business School and Brown University. Peter, thank you so much for being here.
[00:01:40] Speaker A: Thanks Travis. It's my pleasure.
[00:01:41] Speaker B: And first and foremost, thank you for your service.
[00:01:43] Speaker A: That was a long time ago.
[00:01:45] Speaker B: Yeah, well, hey, we did it.
[00:01:47] Speaker A: We won the Cold War.
[00:01:48] Speaker B: There we go. So we were talking earlier and about, a little bit about your background and you made the comment about when it comes to businesses and scaling businesses, you pre to come in and you're, you're a build, buy, build, sell.
[00:02:03] Speaker A: Exactly.
[00:02:03] Speaker B: And you, you've found, you've, you've gone in the startup space and have found that to be a little bit more challenging. So let's, let's talk about that a little bit. I would love to talk about from those two experiences. What, what have you found? Like what are some of the significant differences between finding a business to, to, to buy and build versus somebody going out there and trying to bootstrap their own company as a founder?
[00:02:24] Speaker A: Yeah, I think, you know, in American business culture we tend to overuse the term entrepreneur. I mean, people, everyone wants to call themselves an entrepreneur. I mean, there is a. There is a. Called entrepreneurship through acquisition. And that's essentially what I. What I have done. But to me, two geeks in a garage, you know, the proverbial Hewlett and Packard with a better idea or Steve Jobs, that sort of thing. Yeah, I mean, that, that, that is. That just takes a special person, someone who really doesn't care about, who just is almost oblivious to risk. You know the old saying that all progress relies on the unreasonable person. You almost need someone who just doesn't. Like. I live in Dallas, Texas, and I often wonder when a new, you know, Tex Mex restaurant or a steakhouse opens. I think what bravery it took. There are three more across the street. You know, it's like Seattle does not need another coffee shop, and yet people keep doing it.
And so you need a certain reckless regard. If you're at all measured and even, I would argue, grounded psychologically, it's just too hard in many ways. But it's kind of like pursuing a career in music or acting. If it's your passion, you kind of have to do it. But if it's anything short of a passion, you will burn out. It won't work. And so I have found that I'm much better at systematizing something that's already started starting, improving. Also, I have a psychological tendency just to what I would call humility, that I go in with a very much of a attitude to learn the business that I buy or invest in or get hired to run. Because that way I. If you're humble, you listen. There's a saying a boss of mine told me many years ago, which is take the first period of time to figure out what they do right and then change what they do wrong. Some people do it the other way around. They come in guns blazing. I have a fancy mba. I have all the answers. And that's a recipe for disaster.
[00:04:02] Speaker B: Yeah. We just spoke with a business owner probably three or four episodes ago, and they bought a business when they were younger. And that was one of the big mistakes. They bought a very big business. And then they came in and they changed everything. And then that first year was, you know, it wasn't nearly as profitable as previous years.
[00:04:18] Speaker A: Yeah, exactly. And also. And very often the incumbent staff will sit back and say, well, okay, genius, you, you drive for a while. We'll just sit back here. And that's not good.
[00:04:28] Speaker B: So how did your business journey start? Like, I mean, obviously you've got a fantastic Education, Brown and Harvard and then.
[00:04:35] Speaker A: Military in between, which taught me a lot about leadership and how things run. Nothing about business, but a lot about organizations and people. And business school taught me about business, at least in theory. And I took a brief detour at the beginning on Wall street as an investment banker at Morgan Stanley, which honestly I didn't like very much. But again, it did teach me some certain financial insights and financial discipline, how to, how to model companies, how to value companies, that sort of thing. There is a. There's a science to that. So the science of that matched with the sort of art of leadership that I learned in the Marine Corps was a great combination. And so really from there I did some corporate, what we called in the mid-90s, sort of corporate private equity. I worked for KKR's media company, buying other media businesses. And that's where I really learned sort of the art and science of acquisition, which is what I call seller relations. It's a lot of salesmanship, frankly. It's contacting sellers and selling them on the idea of selling their business to you. In that case, I was working for a corporation later in my life. I did it for myself.
And so it's a great education early in life because acquisition analysis is really the whole totality of the business, really understanding how it works from, from start to finish. Very often it's a functional approach. You know, how does marketing work, how does sales work? What's the product market fit, how does finance fit, how does accounting fit? All the operations, all these pieces come together in a holistic way. And that's what I really enjoy is figuring that. So I'm a generalist by nature, so I like to. I like to know a little about a lot of things. Specialists are very different. In fact, some people going through life, you know, I have son who's an orthopedic surgeon. Have to name drop that. And he's the type of guy who loves being the guy who knows more about damaged knees than anybody else on earth. That would drive me crazy. But he'll help a lot of people that way. And so it's a different, different way of looking at the world. So. Long winded answer. But, but that's what I found about in my career. I've just really enjoyed that, that, that sort of diagnostic aspect of, you know, what is it? What does a organization need to be successful?
[00:06:28] Speaker B: So what were some of the big takeaways when you were doing analysis and starting to seriously look at companies to acquire them? Like what, what was really surprising about being from that looking, looking in on something of like does this make sense to buy or not?
[00:06:42] Speaker A: Yeah, it's, it's, it's really combining what I call the, the, the, the heart and the head, meaning the intellectual and the emotional. So the intellectual is the, like I said earlier, the modeling, the understanding, the product market fit, size of market, total addressable market as it's called, product market fit, you know, the four P's of marketing, you know, all the basic sort of MBA 101 type stuff is what you have to work through it systematically. Who's the customer, what's the ideal customer, all these types of things. But then there's also a less, I always forget which one's right brain and which one's left brain. But one of them is that intellectual part. The other is more of an emotional part. Understanding the culture, both of the organization itself, it's almost anthropological. What drives this culture? If you walked into, I don't know, Walmart, they'd be talking about very different things than say Goldman Sachs and different types of people with different values, different priorities. And I find all that fascinating. That's what I, that's one of the reasons I've loved moving a different company every say five years is that once I sell one, take a little time off and then, then go find another.
[00:07:45] Speaker B: One and you get bored and you got to go do it again.
[00:07:48] Speaker A: Exactly. And it's just, it's just fun to, to crack that puzzle. And like I said, I think just starting with the humility of I don't know anything yet, let me find out and then apply what you do know from other things to see what patterns develop. But the key is to again have that humility, ask a lot of open ended questions and learn well.
[00:08:06] Speaker B: So was there a particular size of business because I mean you were in veterinary and you were media, you're human capital and technology. So it sounds like it was more about the, the revenue versus the industry. Is that.
[00:08:18] Speaker A: Yes. I mean the industries you mentioned at the beginning are the ones that I've tended on. I've really liked information businesses in particular, including technology like software, but where there's content, where there's something to be articulated. For example, one of my companies about a little over 10 years ago was recruit military and we, it was a for profit that helped other companies hire military veterans. And I love that because I one it was, it was just an interesting challenge. There was something like 15,000 veteran service organizations, nonprofits mostly tried and that started with the premise that wouldn't it be nice to Help veterans get jobs. I came in and very quickly determined that that was not what we should be doing. We should be helping companies hire veterans, which is entirely different. I mean, it's not entirely different, but it's a different perspective.
[00:09:02] Speaker B: Sure.
[00:09:03] Speaker A: And it's really important because the logic was all companies need great people. Most veterans are great, therefore all companies need veterans. And that was fun, but I had to evangelize and articulate that. So I started writing a column for U.S. news, I wrote an op ed piece in the Washington Post, things like that to articulate this. Look, don't hire a veteran out of pity or some sort of ill defined patriotism. No, hire them because they're the best candidate for the job. And that's really what drove me. So anyway, I love businesses where there is mission driven, maybe a little bit strong, but where there is a cause or a purpose that can be articulated through communication. I really enjoy that challenge.
[00:09:41] Speaker B: Well, what a fantastic business on that one as well. Because, you know, I've, I've, I've had my, my stints in the corporate world and you know, the, the, the middle manager is a cliche for a reason. You know, you get promoted to the level of your incompetence. And if you can just take.
[00:09:55] Speaker A: Which I hate. That's called the Peter Principle, which I've always objected to. You know, what is, what is wrong with my name? That same thing. Things peter out, you know, they don't, you know, I guess, could be worse, could be called Jack or something. But anyhow, it's.
[00:10:06] Speaker B: Anyway, take, take, take people that have had four to six, eight years organizational management and leadership and put them in the middle and it sounds like you'd solve a lot of problems.
[00:10:18] Speaker A: That's fun.
[00:10:20] Speaker B: Take me through the steps of. When you come in and you, you've. All right, okay, this is going to be a, this is going to be a good acquisition. Again with the idea that because most people are like, I'm just going to build this company and be successful and live the life of entrepreneur. And you're like, I'm going to buy something that's okay. And we're going to build it specifically to sell. So when you come in, what are, what are some of the steps that you take?
[00:10:39] Speaker A: Well, even before coming in is when it starts. And so there's the. You start with the premise. You get a lead for an acquisition, whether it comes through a business broker or an investment banker, or you find it on your own through networking. So that's step number one. Then you start with A thesis. What could we do with this business? Is this a turnaround? Is this a reposition? Is it a. Just don't screw it up and let it keep growing. There are different approaches. And you start with a thesis which you may modify and probably will modify once. As von Clausewitz said, no plan survives contact with the enemy. But once you get into it, but you start with that thesis, you work through that with your investor group, with your lenders, if there are any, and you start with that premise. And you have to have some sort of, you know, five year projection and all this sort of stuff, which is most assuredly wrong. But it's a starting point. And then you go in there and I, I always make a point. Most of my companies have been, you know, fewer than 100 employees. And I meet with every single one, I spend an hour with every single one. And I start with a, a questionnaire that I'm, that I'm filling out. They don't fill out, but I ask them essentially, what works here? What doesn't work here? What would you change? What would you, what would you not change? What, what's the essential thing? What else do I need to know? What advice do you have for me? And it's amazing how the, the themes will, will, will evolve very quickly. And you'll see, okay, here are three or four things that we, by all means, we do not want to change. And here are three or four things we need to get to. And we're gonna have to prioritize what order we do that in. So that's, that's very much the case. So I'm getting sort of a very much of a populist approach.
[00:12:04] Speaker B: Sure. To, to most people, for most businesses, they're pro. Probably the first time in their lives that anyone's asked them their opinion of like what's working in the business.
[00:12:13] Speaker A: Yeah, that's a great point. And in fact, I spread out those, those things over the first month or so, those meetings, because partly I want the gossip to percolate now and I'm giving away my secrets, but that, hey, you know, he actually seemed really interested. Go ahead. When you go in there and sometimes people come back, hey, can I have another five minutes? Because there's something I forgot to tell you and that sort of thing, and so that's really helpful. But I think you get 90% of what you want there. Well, that's not true. You get about 75% of what you need there. The other 25% comes from outside the company. Go on a listening tour with customers. Hi, I'm new. I just got here. I'd love to learn. Again, same questions. What works, what doesn't? What can we improve? Where do you think the opportunities are? And again, most of the time they'll tell you.
[00:12:50] Speaker B: Yeah. So fascinating. Like, from a, from a principal standpoint, it's so simple, and yet it's something that most organizations don't ever do.
[00:12:58] Speaker A: Right.
[00:12:59] Speaker B: And, you know, it comes back to, we didn't chat about this before, but I was in Hollywood for, for nearly 20 years, and here's an industry spending billions of dollars, and you know what they don't ever do? They never ask what people want. Right. Which is so bad.
[00:13:11] Speaker A: They want another Marvel movie. Isn't that what they want?
[00:13:13] Speaker B: But I was always like that. My, my, my main mentor. That was one of his biggest things with he, he wrote a book and, and the, the subtitle of his book was like, how to Fix the Accidental Industry. He called Hollywood accidental.
[00:13:24] Speaker A: Yeah.
[00:13:24] Speaker B: And then he shows. He's like, well, here's how something works in the manufacturing space. And then he's like, and here's what they do in Hollywood, and it's all. And it's completely the opposite. And he's like, and then they, then they complain when they lose $200 million.
[00:13:34] Speaker A: Exactly.
[00:13:34] Speaker B: So I think that's one of the themes as talking to people about growing and scaling. It's like, so what, you know, what are some of the primary things? And I think almost every single person has said, hey, you really need to understand what your customer actually wants.
[00:13:45] Speaker A: Yes.
[00:13:46] Speaker B: And so.
[00:13:47] Speaker A: And what business you're in, what is the product? What. What are you, what are you really solving for? There was a, after my time, but there was a now, now deceased Harvard Business School professor named Clayton Christensen. And his big thing is, what, what problem are you solving? Is very, very important. So you may think. And one of his examples was that a, a milkshake is just a dessert or a drink. And it's like, no, it's a time killer. It's a thing people take on a road, on a drive to make a drive a little more palatable because they can enjoy their milkshake for the one hour that they're driving, which is kind of interesting.
[00:14:17] Speaker B: And sort of the famous thing with McDonald's and Ray Kroc. And he said the thing that shifted him was when he realized he wasn't in the hamburger business, he was in the real estate business.
[00:14:26] Speaker A: Yes. Yeah, exactly. That's a great example. Well, yeah, great example. The McDonald's brothers that he bought it from. Didn't know.
[00:14:32] Speaker B: Yeah. So what from a leadership perspective then?
What makes for a good, a good leader in running teams? And what are some of the two or three things you see that again were probably very common, but that would have the opposite effect.
[00:14:49] Speaker A: Yeah, I mean there are many terms for the philosophy I aspire to follow. Ultimately it's servant leadership, it's sometimes called. But basically it's what I learned in the military line time ago, which is that it's just really very simple. Two things. Take care of your people and accomplish your mission. If you, you can't do one without the other, or if you do one without the other, it's ultimately ineffective. But you really have to care about your people, take care of them, get the right ones in the right, in the right seats on the bus, as the proverb goes, and then accomplish your mission. You have to deliver your numbers, get to where you want to go and it's, it's really that simple. Which of course like anything simple, it's, it can be more complex in the execution. But if those are the guiding stars, good things follow most of the time.
[00:15:29] Speaker B: So when you were acquiring a business knowing that you were going to scale, so obviously you had your five year plan, but like did you have a process of being able to go into a business and knowing like, okay, once we find a good business and we know it's got a solid foundation, like was there a series of sort of steps that you could take businesses through to actually get it to the point where you could then. Because I think you were talking about, you know, there's a phase one business which is startup and there's phase two and then there's phase three. So what are those phases and how do you kind of, how do people move or how, how do businesses move between those.
[00:15:59] Speaker A: Yeah, usually the first one is, is establishing sometime some kind of product market fit. And this is where most businesses fail are early on they, they're offering Mongolian food in a traditional town that just can't, can't get their head around it. When that might have worked very well in a hip neighborhood. They just. The product market fit's not there. And by the way, I know nothing about restaurants. Restaurants.
[00:16:21] Speaker B: That's a good analogy though. Yeah, everybody gets that one.
[00:16:23] Speaker A: Yeah. And so, so really if that's the. And there's also a saying that is it, is it, and this is very true in technology. Is it a feature, a product or a company?
And that's important to know that, that distinction as well because Sometimes people forget that and they start a software company, really something, it's just a feature. It doesn't really deserve to live on its own. So that's an important insight as well. So getting the product market fit is really the. One of the first big steps at the beginning and then after that, then it. Then really by phase two, it's, it's really when the first step, you can do a lot of things yourself. Again, I have not been successful as a startup person, but you can do a lot. You really want to keep your overhead low. I mean, some people go the venture capital route, but that I have a saying that venture capitalists have the parenting skills of sea turtles. I mean, just they, they should be avoided whenever possible. There are certain times where it applies, but basically it's a, it's, it's a devil's bargain that's not worth it. But if you're bootstrapping, you're doing a lot of things yourself. In phase two, you have to start thinking about system.
There was a book that influenced me probably 15, 20 years ago now called the E Myth. I'm sure it's been published a few times. And E Myth Revisited I think was the sequel. Same thing, just stated a different way. But that's the whole, the saying there that summarizes the whole book is work on your business, not in your business. So in phase one, you're working in the business and phase two, you're systematizing. You've got SOPS processes. All the while, be be aware of bureaucratic, you know, or sclerotic. Bureaucracy is not something you want at any phase, but that has to be purged from time to time. But, but thinking in a systematic way, what happens when the customer walks in, what happens next, what happens next. And that in that way you can actually also bring employees on more successfully and so on. Because all those, all those factors are very clear.
[00:18:07] Speaker B: Well, it's interesting because I've worked with a lot of companies that they have a very clear, you know, when you bring a customer on, here's what we do. But then when they hire somebody, they don't have, they don't have that.
So that's part of the systems. Right. So if we're going to hire somebody.
[00:18:20] Speaker A: What'S the marketing is one, is one tactical aspect of people, of people management that most people fail at. It's amazing how many people. Oh, there's your desk. Let me know if you have any questions.
[00:18:31] Speaker B: Good luck.
[00:18:32] Speaker A: Two weeks later they take them to lunch and it's a little bit of a rah rah. And they have no what they don't know what's going on. Onboarding is really important. Onboarding customers, onboarding employees, all those things are really, really important. And thinking that through systematically.
[00:18:45] Speaker B: So when you come in then you've got somebody that's they, they've got a good product to market fit. They've already started to build some small teams. So now you're there really optimizing systems for to, to for growth. Is that is it and is it how big of a, how much of trying to think of the right way to ask this but how important are systems to be able to go from two to three?
[00:19:07] Speaker A: Yeah, absolutely critical. You can't do it without them. I mean the system might be a very simple one but it has to be clear and replicable. And we mentioned McDonald's earlier. Again, I don't know anything about restaurants like I said but I mean the whole idea is you can go. The french fries are going to taste the same wherever you go. And that's not based on the cooking skill of the fry cook. It is the system they have in play in that case equipment as well. Even the franchisees can't decide, you know, I want to add a little extra salt, see what happens. You can't do that. You have to follow the rules exactly. And that's an extreme where consistency. The product is the product in many ways. I'm sure if it's a five star restaurant that people enjoy a little variance here and there and they trust the artistry of the, of the chef at that level. But it really depends on the product or the nature of the product or service that the company sells.
But again systems. I can't say enough about systems yet again back to that heart and head. Having the emotional intelligence to understand where the system is becoming the enemy, not the, not the ally.
[00:20:08] Speaker B: Awesome. So let's talk a little bit about what are some of the challenges that just are just come out of growth. Right. So getting to 25 employees is a. 99% of companies will never get there. What, what are the sort of the specific challenges of hitting sort of that mark and then how does, how does things especially as a leader change in a corporation when you go from say 25 to 50 and then 50 to 100.
[00:20:30] Speaker A: Well, I mean in the Marine Corps we were taught that the rule of threes, which is sometimes violated as rule of four, that one person can only, only effectively lead or manage three or four other people. You can lead bigger groups but you have to do it through those three or four subordinate that may be a little bit rigid. You can probably do a little bit more in the civilian world. But to think in that terms is very important because if you have 15 direct reports, you're not giving them the time of day enough attention, they're going to feel like they're not getting the time of day. And so it's important to think a little bit hierarchical now. That hierarchy can be fluid and it can be pretty horizontal in many ways. But where a lot of technology companies, especially in the Silicon Valley, we're all hip, we wear sweatshirts and have dogs in the office. And so there's no hierarchy here. Well, there has to be. I mean even Googles and Yahoos of the world or whatever all went through a phase where they realized that the hippie phase wasn't doing anything. In many ways, it's just sort of a. Can be window dressing. It's almost. I've been to a lot of technology companies where they have the foosball table in the corner covered by a sheet. And why is it there? Well, we feel like we had to have one because we're a software company. I'm like, no, you don't. But anyway, hierarchies can be spongy and they can be react. They should be reactive and all that information should flow up and down. It doesn't have to be the General Motors 1955, but you do need some sort of structure. Who's responsible for what? What are the key metrics? Where does information. I have a piece of information. Who needs to know it?
Again, we keep using the word systems, but those are. Those are systems. And systems operate within cultures and cultures. And then that's again, systems are the head and cultures are the heart and those two are combined.
[00:22:04] Speaker B: I've never heard it explained that way before.
That's great.
[00:22:07] Speaker A: Why I just made it up. But I, I think that's it. That, that's, that's one way to.
[00:22:11] Speaker B: That's the. That's the title for your next watch was.
[00:22:14] Speaker A: There you go.
[00:22:15] Speaker B: Opinion piece. So then for you being the owner of the business, how do you know that it's in time to start looking to exit?
[00:22:23] Speaker A: Well, usually I've, I've had investors and so that, that also adds a certain.
[00:22:27] Speaker B: And they get impatient and like this go.
[00:22:29] Speaker A: Well, sometimes that can be. In fact, that's investor selection is very important. Some people get so excited that someone wants to invest in their deal that they don't vet them. And you know, what is, what's their past behavior has been, are they buy and hold people? Because if you're, if they're buy and hold and you say you want to cash out five years, that's may not be popular. Others may want to flip earlier because they have fund economics that they have to return money to their shareholders or investors and so on. So that's important. But you know, a lot of it has to do with, with I, I'm a big believer in, like I said, I've tried to build a career hitting doubles and triples and that's why startups are, are, are strikeouts, mostly strikeouts and occasionally home runs. And I prefer doubles and triples. And that comes from the, again that word humility. The humility to know you. You also want to sell a little early. You want to sell when growth coming in, when there's a good story to tell where the buyer can think, wow, they've come a long way. This is good momentum. I can take it further. Of course there's always, there's always a little bit of hubris, the opposite of humility in buying anything because on some level you wouldn't buy it. By definition, you would rather own the company than the cash that's burning a hole in your pocket. So by definition you think you can do more with the company.
So as the buyer, so you have to, you have to engender that message when you're the seller, imagine what you can do with this company and you, and you sort of lay out the steps. Look, we've, we've penetrated 40% of the market and look how well we've done. Think how well you can do when you penetrate 80% and you, and you spell it out for them. And it's not a cynical thing. It really is a legitimate. But to get there, you're going to have to invest in this and this and, and, and here's some of the risks and, and all that. Most buyers will appreciate that. And also I, I should mention might be of interest to listeners that I'm a big believer in flirting with the potential buyers really early. So almost at the point like that recruit military company, I was flirting with the potential sellers. I sold it four years later. I was flirting with the potential buyers of the business the month I bought it and for subsequent four years, I sort of played them off against each other and played hard to get. It's not the right time. This and that. And eventually it was the right time for one of them. I knew they were all private equity owned. I knew they all had fund pressures and they had synergies with what we did. And so it's often good to, when you contact someone, say, hey, you want to buy my business? Already your price has dropped in half a half. So you have to go through a few sessions of, nah, it's not the right time. I don't know, it'll have to be a pretty big number, you know, that sort of thing.
[00:24:57] Speaker B: So what was it that attracted you to your. The current company? Be home 247 through networking here in.
[00:25:04] Speaker A: Dallas, where I live, a friend of mine knew that a family office actually out of Midland, Texas had just bought a software company and they were looking for a CEO. I met them and we hit it on off the property. Technology space where we operated was very hot about four years ago when I joined. Still hot. It's cooled a little bit, but it's still a very hot sector. And so I like the people, I like the product. And when I got to know the employees, I loved the company. So that's how I got here. And so I didn't really agonize over the decision. That's another thing. I sort of 80, 20 rule. If it feels 80% right, give it a shot.
And generally if you just Hippocratic oath, first do no harm and then do a few things right, good things usually follow.
[00:25:46] Speaker B: That's great. So is the plan with this one to also grow and scale?
[00:25:49] Speaker A: Yeah, definitely, yeah. When I got here, we had about you know, 1 million in revenue. It's a little smaller than I would have thought recurring revenue. And we finished the year at a little over 5. And so the goal is to get to about 10 and then probably exit at that point again to the point that it's. It is difficult, especially in software. It's difficult. There's certain cut points of value. Five million is one of them, 10 is another.
Again, rule of thumbs, there are always exceptions. And then beyond that, everyone thinks they're going to be Google and they're not. I mean just again, humility, that word comes back to says no. And also you have to look at the marketplace, like I said, flirt with buyers. But that also comes along from understanding that, that where is the fit? Thinking about not just you as an owner or a partial owner, but what's the best outcome for the asset itself. Where does it fit? Right. Because synergies, people think of that as a spreadsheet thing, excuse me, at the high level, but it's really also about the employees, where their career is going to develop, develop and so on. There are a lot of factors that exit may be a Good thing. Now, most employees panic a little bit when you say you're selling the company because, because they all have a neighbor or a friend who lost their job when the company was acquired. And they just assume that's what happens when people buy businesses. And you have to spend a lot of time articulating why is this new company buying. You know, you can't entirely vouch for them because you don't know how they're going to behave. But there's a reason they're buying this business because it's a good business. And it's a good business because there's good people here and you guys are good people people. So you're going to be fine. If anything, at a small company, there's only so far you could grow in your careers. Now at a larger company, you've got more opportunity and most people will get that.
[00:27:19] Speaker B: So what advice would you give to somebody who's maybe at like late stage one looking to possibly be like, oh, maybe they're listening to this go, well, maybe take this to a stage two and sell it to someone who wants to do it. What would be two or three pieces of advice you'd give them?
[00:27:33] Speaker A: Getting good advice, probably having outside advisors, whether it's your own board of directors or just sort of a committee, city of friends or acquaintances or. You mentioned mentorship before, a mentor and just know yourself. Do you really. You know, as you get larger, things get more abstract. You know, think about Fortune 500 company CEOs. They're almost like macroeconomic actors more than anything else. I mean, if you're, if you're the, the CEO of Ford Motor Company, you're not picking which leather to use in the Mustang. I mean, that's not your thing. At that point, you're looking at interest rates and cost of capital. Capital and whether to put your next factory in, in Mexico or Michigan. You know, those types of things. It's very abstract the higher you get. And some people don't like that. I mean, if you're a car guy, maybe you want to have a local body shop and where you get to work on cars or work with the people who work on cars and smell the oil and the grease and all that. So knowing yourself and likewise, what sort of returns do you want? You know, just like mutual fund, there's three types of gain. Usually there's growth, value and income. And what is it that you want to do? Value in the acquisition game sometimes is buying at a, at a bargain price because usually a turnaround, taking that risk, growing and then selling growth is generally what technology is. You're banking on growing the top line, sometimes at the exclusion of the bottom line. And income is where you're, you're clipping coupons or you're, you're really like an ATM machine. You're just regularly producing cash at a certain rate, which is where you'll get your returns. So again, being very mindful, which game are you in? Which game are you playing? Sometimes it's a combination, but usually it's one of those three.
[00:29:05] Speaker B: Love it. Well, Peter, this has been a fantastic conversation. If people want to learn more or be involved in what you're doing should. It's like right now, like, let's do the pitch for be home 24 7. Who's. Who's a good user for that?
[00:29:16] Speaker A: Yeah. So we serve two markets in real estate operations management, and that is the vacation rental or hospitality space and the residential space, which is single family rentals, multifamily or apartments and student housing. And so anyone in those sectors should check us
[email protected] we say 24 7. I can be found personally on LinkedIn. And yeah, be a pleasure to help anybody who's looking to, we say, you know, drive efficiency in their real estate operations, deliver a better resident experience and reduce risk of how they operate.
[00:29:51] Speaker B: Love it. Peter, thanks for your time.
[00:29:53] Speaker A: My pleasure.
