David Mann is a guy who’s got a lot of experience as an individual, as a competitor, and as an investor, with a time-tested level of virtuosity. He co-founded the Indiana-based venture capital firm Spring Mill Venture Partners that focused on early stage information technology and life sciences companies. After this stint, he co-founded The Firefly Group, which focuses on investing in growth-oriented lower-middle market companies. He also serves on a number of non-profit boards and spends his spare time as a faculty member at Indiana University, Kelley School of Business.
Oftentimes, private equity is shrouded in a negative reputation, where making cold hard cash sans the human element is said to be put on the forefront. But these days, that’s far from the truth. Today, I am joined by investor-entrepreneur David Mann of The Firefly Group on how their company successfully acquired EOS Worldwide and to take a crack on the long-standing myths about venture capital firms, the importance of core values, finding purpose in business, and raising money.
9:18 Partnering with private equity is like a marriage
13:11 David talks about the decision makers and the processes in their venture capital firm
22:07 Raising money for your company
23:58 The landscape of buying and selling companies today
34:33 David shares his own core values story failure as a co-founder of The Firefly Group
37:16 Finding true balance in life and having time for fun
40:06 The importance of authenticity and vulnerability
42:09 Finding joy in the good and the bad
46:06 Business can be a tool to positively impact lives
55:17 David’s passionate plea to entrepreneurs
“Build your business on core values, live those core values yourself, and build your team.”
GET IN TOUCH:
MARK LEARY:
www.linkedin.com/in/markhleary
www.leary.cc
DAVID MANN
https://www.linkedin.com/in/david-o-mann/
https://www.thefireflygrp.com/
May 5, 2021, Wednesday
SUMMARY KEYWORDS
people, core values, business, private equity, company, eos, money, life, world, community, mark, sell, investment, thought, talk, build, joy, investors, gino, conversation
SPEAKERS
Mark Leary, VO, David
Mark Leary 00:00
So we're rolling, cool. We are live. This is you're doing it wrong with Mark Henderson, Leary, and my name is Mark. And I, as you know, by now have a passion that you should feel in control of your life. And so what I do is I help you get control of your business. And part of how I do that is by letting you listen in on a conversation between two people who have a passion for excellence in the entrepreneurial world who are talking about a subject you already know something about, or in this case, think you know something about, but this time we're digging in, we're pulling back the layers and kind of showing you what's underneath the hood. So you can get a real understanding of what's going on and maybe break through those barriers and blockages in your thinking and break through that ceiling, in your business. And ultimately, in your life. Before we dive in, though, and this is going to be a good conversation before we dive in. Don't forget to subscribe, share with your friends give us that feedback, the positives and the negatives, we need both. We love all that constructive feedback. People are really reticent to give negative feedback and constructive feedback. But I'm telling you, we need it. We love it. So bring it on. Shoot, shoot it to me directly put in the comments. We don't care any way you can get it to us carrier pigeons fine, too. So let's get into this conversation. One of the hot topic right now my business is hot right now, lots of industries are suffering. But many entities are screaming right now it's very interest. I had somebody I was talking to you last night was describing this as another roaring 20s in terms of how things are moving along. And so one of the topics that's out there is investment and getting money to go to the next level. And one of the scariest things a company can do is look after investment and things like private equity. And so I thought we would dig in and understand a little more about what private equity look like. And if you're thinking private equity is a big bad thing. I'm here with Darth Vader himself. I'm here with a wonderful example. And a guy is going to tell us what's going on David man, a guy who has a lot of experience as an individual as a competitor. And as a as an investor. And I'm excited to have this conversation. David, how you doing this morning?
David 02:01
Hey, Mark, really great to have you on the show this morning. Can't wait to spend the next hour hour with you.
Mark Leary 02:07
So tell me I mean as a human being, because I think that's I can't tell how many how many times I've heard people say the phrase that sounds a lot like I've worked with private equity before. Which means, you know, they've got a baked in opinion. And it's not great. So that it's almost like it's a machine. It's almost like the Deathstar pulling up alongside your business, but you're a human being what's, who are you?
David 02:35
Yeah, I mean, private equity has gotten a lot of a lot of negative publicity, and many reasons, many reasons are well founded. Because there's been some some some rough, rough goes of it out there. But when we think about it, we think about it differently. People put this label on private equity or venture capital and these big bad guys coming in to steal my business or to break up my business, or suck the life out of us to squeeze out every penny they can. Yeah, that's a reputation. And I can tell you when I came up through the business, and when I was first learning about venture capital and private equity, people say it's about the financial statements, you got to look at the financials, you read the financial statements, but I didn't have much joy doing that. I didn't have much enthusiasm doing that getting out of bed every day. That's part of the bottom line. But the real joy for me is how do we go into a business and do this differently. And that's the path we decided to take and why we started Firefly group and see if we could do it different than perhaps has been done before. So for
Mark Leary 03:34
full disclosure Firefly group, is the organization that recently purchased the organization. I'm known to be associated with EOS worldwide. And so EOS worldwide is the is the creator, the organization that publishes and manages the intellectual property, the toolset that I teach Eos. And so that's how we've come to know each other and in even in the EOS community, again, full disclosure. You know, this is this, the involvement of private equity in a community that's very tight, is is controversial. Like there are people who are all in and are people who are like, this is scary. So how did you and your organization Come come to be looking at an organization like EOS to get involved with and what's the story there?
David 04:19
That's a great question mark. Give you a little backdrop. Back when I was younger, I was doing venture capitals here working with Peruvian entrepreneurs with cutting edge technology and brilliant ideas, working 80 100 hours a week just to get that first customer. And here they are oftentimes reinventing the wheel every week and solving the same problem every week. Like we need some kind of system or tools that helps that right because we continue to have that ongoing problem. And that's when I discovered the book traction. And I read the book like wow, this is this is amazing. And it wasn't because it was some MBA Mumbo jumbo stuff. It was just practical stuff you can start using right away. And so I we found someone who can introduce us to Gino. Okay, and we got him on the phone. It took a couple months to get him on the phone. So for those of Gina Whitman, who wrote the book, traction was the founder of Eos. And we got him on the phone. We said, Is this just a book? Or is there a copy behind this? He goes, Yeah, there's a company behind it is doing really well. Like brainy thinking ever want to sell it? He's like, nope. Oh, wow. Yeah. So we got it. We got him. He called us back six, three months later said, I think I'm going to sell the company like, Well, great, we'd love to buy it. Well, I hired a banker, we're running a process. Unfortunately, we went through the entire process over the Christmas holidays, New Year's holidays, thanksgiving on into the next year. And we had the good fortune to acquire the company and join them on the next phase of the journey. And that was May of 2018. And as you might imagine, and being part of this community, high achieve your SMART go getters, talented people 300 plus people who make up this great community of EOS implementers. And they find out like private equities coming into acquire the company. They're part of like, Oh, this thing's going to hell in a handbasket. Right.
Mark Leary 06:15
Yeah. I mean, I have a big family. Because we were there was a lot of leadership changes over the years. And I I'm definitely Chief among the people like this is not a company, this is not a business. This is a movement. This is a this is a way to change people's lives. And obviously, you know, I'm passionate about that concept. And so this is my vehicle to do it to turn it into turning into something that seems so mundane and clinical and spreadsheet driven. just seems like the wrong thing to do. So having to say more about how you think your approach to the hat.
David 06:47
Yeah. So for us going in, we thought we had a great engine, a great tool, a great community wouldn't we didn't want to fix what was broken, right? So everybody says, Hey, I'm private equity, I'm here to help. We didn't want to take that approach. If there's things we could do to add value and help we wanted to be all in on. And so Gino, when he was selling this company, as you might imagine, he had a lot of vendors, he had a lot of places he could go to sell this company. We weren't the only buyer. There are lots of people in the table. So the amount of due diligence he did on us to see our core values, does it match up with this community? How are we going to do things? He spent a lot of time on that. So it went both ways. It wasn't just us doing due diligence.
Mark Leary 07:25
That makes sense. So take more about talk more about this the purpose versus money side, I mean, private equity. If you look it up in the dictionary, which I don't even know what it looks like in the dictionary of its Wikipedia, I'm sure there's an article that says this is a collection of investors with a thesis will design have a certain formulas they're following to take invested capital that has some multiple on on exit, there's pretty close. How do you reconcile that and how do you make money and how does that fit into the purpose side?
David 08:00
Yeah, it's it's a great question mark, in part of what Geno's thesis was, he goes, I want to firm who's going to acquire some old at least take a 10 year view of holding this company. In private equity. They oftentimes say how do we be in and out of this in three or five years. So we were happy to take that 10 year view, good companies are hard to find, and we didn't want to just get rid of it. We're here to build something that's lasting. So that was the first part of it, too, as I go back to what as I said at the beginning of this, we don't find much joy in just looking at numbers. Yes, we're investors, and we have other stakeholders that we need to ensure they get a return on the investment by building great companies, putting culture first putting people first we think those will be a byproduct of that happening. And so we don't have to just beat people over the head about Hey, squeeze another penny out. You'll never hear us talking to the EOS leadership team about Okay, how do you squeeze another penny out? That's not where ahead is build a great company, build a great culture, have a great community, and the rest of that will take care of itself.
Mark Leary 09:03
How normal Do you think this approach is? I mean, yeah,
David 09:08
historically not. I think you're seeing more of it, though. Because what do you do you want to get out of bed every day and have joy when you partner with a private equity firm or a venture capital firm? It's essentially a marriage and you're going to be together a long time. And so people who who worry about their team and have built a great company and Gino who had built a great team, a great community, he worried about who was going to be the next people to carry on his legacy that mattered to him. And for those people who are legacy matters, or your team matters, and you truly put them important. What do you team up with makes a difference? So I think you're seeing more and more of it, and people fake it. You can't fake it for very long, because people figure you out.
Mark Leary 09:52
So how what's what's it what's the what's the what's at stake for you? Because what I can easily imagine that people listening to this are Thinking, yeah, but they're not in the business every day and they're in there wanted to sound good and want to feel good. And I want to talk about it at the Thanksgiving about how about a great, you know, their companies, and then somebody bounces in with the right number
10:12
they're out, right? They
Mark Leary 10:13
don't really care. They want to see the multiple, you know, how do you how do you think about that, you know, are you if somebody came and said, like, hey, it's time, we're going to give you your number, you know, eight years in advance of your of your timeline. Are you out? Or what's what's your thinking on that?
David 10:28
Yeah, I think we we, we think hard about what we what we committed to, and we committed to a long term timeline in my life at this point. My commitments are more important than than put another dollar in my bank account. But we are investors, we have to look at the, the the good of everyone. And so we're always thinking about, where are we going? What does that outlook look like? And what is the right time. And so I think we're we're in the second inning of a nine inning ballgame. But EOS, we're still early days, and we got a lot we can accomplish. So the road ahead of us is bright, and it's not on our radar.
11:05
So what does that exit look like?
David 11:08
I think it's a good question. We don't go into this saying, okay, here's what an exit looks like in this time frame, we go back to building a great company, build a sustainable company, build a great culture, and those exits will take care of themselves. And I know that sounds kind of wishy washy, but it's really true, because we build a great sustainable company that people want to be part of, and is making a huge impact in the world and making a huge impact in entrepreneurial businesses. That'll take care of itself.
Mark Leary 11:39
When you imagine what the spectrum of options from, you know, one to 10, I don't even know, I don't even know what I'm asking, what is the context of spectrum of exits, it's, you know, so you know, Aesop's, you know, sell back to the, to the franchisees, is it sell to Microsoft or your way, you know, what, what do you what do you what are the kinds of things that you'd imagine and dream of and heroes that would be in that ballpark?
David 12:06
I think it's someone who has the similar core values that EOS is founded upon someone who sees the beauty of this EOS implementer community as the centerpiece, as the engine that makes it all go. And he thinks kik can enhance that community make that community better make the company better. That's where I would see it, anybody who's going to try to add little bells and whistles, go away from the core values go away from the core, that's not our partner. So we want somebody we're one in one plus one equals three. That's an overused statement, but I believe it, how do you get that to really equal more than you better together?
Mark Leary 12:44
So behind the scenes, how many how many voices have to be in unison on that? Because I asked that question. It's like, it's easy to say like, Well, you know, David's got this idea. But there's a there's millions of dollars behind this. And each of those dollars is a vote and each of those votes is by person and and you know, whoever's got the biggest, you know, cash risk is probably going to swing this on the day that they feel the most pain and the most opportunity. So how many voices are you are you orchestrating and what does that like in your world?
David 13:11
Yeah, so we have a board of directors, that board of director meets quarterly, where myself in the role I sit in, and my partner, Mark Snyder are more engaged with the team outside of that we're in regular contact with one another. But just like the EOS has the same page meeting, we have those same page meetings because we never want to get to are too far off track with one another. So those same page meetings mean a lot. So we're talking to Kelly Knight, we're talking to mark O'Donnell in those same page meetings on a regular basis so that we were synched up, and we have a we're on the same same agenda so that no one ever gets too far out of sight. And, and Firefly is a controlling investor in this. And so we always want to keep everyone on the same page between the leadership team, the community, and the board.
Mark Leary 14:00
And I didn't mean to make this like kind of a masterclass dissection of the EOS specific thing, but I know most about it and to me, it's just a good it's a good sort of tangible thing to walk through by proxy. So you know, let's not I don't want this to be locked into any US politics so but it's the questions I know to ask and so feel free to open up the conversation applies to other investments and other other things but I'm curious what what mistakes have you made along the way that got you to this belief system I guess you know, you've probably pays in tuition in making some investment choices or even career choices the guy you to that your belief system that probably are what gives you the commitment. So what was the last time you did something that man that was expensive? Oh, well,
David 14:45
I mean, there's so many mark, I've had plenty, plenty of failures along the way, and lots of cuts and bruises to show for it. And as I started my my business career, I started on the entrepreneur operating side but then quickly went into the venture Capital side. And what I didn't like about venture capital is you have all these different board members. And they're never on the same page. So back to this being on the same page, they're never on the same page, because you had four or five different venture firms and an investment. And people say, hey, I want to put more money in i don't i want to exit. Now. I don't. So back to your earlier comment, Mark, you see that a lot in venture capital. The only people I've ever met in a venture capital back company, were the people who showed up at the board meeting at Eos. I know the people I know the team, I know lots of the implementers. That's enjoyable to us. And there was always another round of investment in venture capital, hey, we got to go raise the next round, we got to go raise the next round. When you acquire a company like EOS, you're not talking about Hey, raising the next round, because it's a profitable, successful company, you're thinking about how do we grow? Maybe Maybe we need to make some investment to grow to the next level quicker. But how do we do that. And so it's back to that, that learning along the way of Wow, this isn't very fun doing it the way we're doing it didn't have much fun doing it. I had some successes, venture capitalist Hey, swing for the fences, and maybe it'll be a homerun fortunate to have a couple of those. And then some big whiff to like, wow, we put a lot of money in that to get 10 cents back on our dollar. And so we've had those two. So it's a it's a certainly a roller coaster ride. And it wasn't much focus on the people. It's okay, it's the technology, how do we build the next technology and EOS and what we're doing it's people first, and we really meant that. And it's not just Kumbaya and hugs. Oh, yeah. It's people first. Yeah, it's people first, combined with accountability. And we think when you can do both of those, well, that's where the magic happened. And that's why we're believers in us.
Mark Leary 16:45
So that's, I agree, unpack a little of that, because I've experienced in Houston, that was the predominant industry for decades has been oil. And what that mindset and that ethos has done for business culture is really visible, if you know what you're looking at. And it just, I start to write it down. As you know, money is culture, money equals alignment mentality, that, you know, we know why we're here is to make money. We know why you're the sales rep, we know why you're going to do this. And so business is built on money equals culture. That that was the way it was done very blunt force approach in an industry. And as the oil industry has gotten more competitive, and having to live a totally different economies, it doesn't survive. And culture has to be culture and purpose has to be purpose. And it's really shaken up a lot of old industries and all the new sprouts that come out from our like, Look, we got to have that more compelling argument. People have to come and work for us for a reasonable salary, and want to do the work. And it sounds to me like that when the money is so big. In play it it fools people in the thinking that that's enough that there's nothing else to talk about that we must be aligned, because you're putting in a million, I'm putting in a million we're same and that's not at all what happens. So what's what's the state of private equity and venture capital investment right now with regard to sort of this imbalance of people who just assume like you've got money, you must be smart, and we must be the same and you rang a $300 shirt to it? It's so a compared to people were like, no, this, we really got to figure the formula out. There's really work to be done here. We need to be aligned, we need to have real conversations. What we need to look out out there. What's the landscape look like?
David 18:31
Yeah, there's been a battle egos. Right. So you got all these smart people sitting around, hey, I put my money in. But who's the smartest guy in the room? The room? The person who put the most money in? Of course. So that's you back to the early comment, like who's who becomes the de facto decision maker, the person who invested the most money? Why don't think that's the way it needs to be done. We need to have all the other heads around the table. two heads are better than one foreheads are better than two. And so a lot trying to align this board of investors and this management team, this leadership team, and be like, Hey, we gave you stock options, aren't we aligned? cultures a lot more different than some stock options. When things get really hard to perhaps when those stock options are now underwater. I'm looking, hey, I'm working 80 hours a week, and these aren't worth anything. Why? And so if you didn't build that culture, based on something, some set of core values that we quickly becomes, comes out when hard times hit. It comes to fruition, and it's not very good.
Mark Leary 19:33
Yeah, it's, I always look at the example of ownership. And I'm speaking to speaking to specifically to businesses and breaking apart ownership versus leadership and organization, the operation leadership, and I say like, you know, if you're an owner doesn't mean you have a job. There's like if I get if I buy Google stock, that's cool on me, but I don't get a business card, a phone a desk, and you know, and they don't ask my opinion on anything over Google even when I own it. And then if you kind of ratchet up, you work your way towards the idea of maybe activist investors, people do buy so much Google stock that they are, they force their opinion and, and it sounds like if you're not careful, you bring in any kind of investor, you're basically inviting activist investors into your world who may or may not have any clue about how to run a business or be aligned in any way. And so you better be very well aware of what people think and want and how much control you're giving people in that. And that doesn't seem like something that the average company seeking investment is likely to be prepared to search for and know, do you think that people who are seeking investment are getting more more aware and more savvy about how to find smarter money?
David 20:41
Yeah, I think Mark, there they are. But the people who have great companies have lots of options, those people who don't, like hey, I need money, and I kick in from wherever I can get it. So the better the company, the better was built, the more options they they have for themselves.
Mark Leary 21:02
So you were dating you were dating us for a while, like, you know, and us wasn't gonna go exclusive. We're just dating. We're not getting married yet. How many? How many people were you competing with in that process?
David 21:12
I don't know that we ever new funding. No new is the total number. And I've never gone back and started probing I didn't feel that was appropriate. Let me start digging and find out. But I think there were probably at least eight or 10, maybe 12 other suitors. And those were serious suitors. I'm sure there's other people who came through and some some some level of interest, but like 10 or 12, probably serious suitors to that. That's
Mark Leary 21:33
no joke. I think that i think that's worth sort of calling out. And in the process, not just anybody showed up to the party. And there was there was a you know, when you've got options, you make better choices, we know that for sure. And if you've got eight or 10 competitors, and you're the seller, and you have a real opportunity to make good choices, and I think it's an interesting concept. And I how typical, do you think that is? Do you think when somebody is raising money that they've got a dozen options? Or is it more like they've got one who's serious, and they're hoping to get at least a competitive second or third?
David 22:07
Yes. When you're first getting off the ground, you don't really have that technology fully baked? You haven't gotten your first customer. Those are people like hey, my next door neighbor said typically $5,000 Okay, I'll take it, versus the people like, Okay, we've got we got a million dollars in revenue, we're growing at 70 500% a year, boom, boom, boom, then money starts coming, coming to you. Right. But as soon as it's that initial in respect to us, because it's I think it's an interesting example, Gino did something that sellers of businesses are told, and rarely ever do, he announced to everyone that he was going to sell the company. Most sellers, they say, don't tell anybody because it's going to get out there, it's going to, it's going to hurt you in the marketplace. But he goes, this is our core values, and I'm going to announce it to the community, which he did. And he established 12 criteria for buyer, and only one of those being price. A lot of people say that because it sounds good to you good buzzword, hey, it's not just about the money. But he really meant it. And so he was willing to take less in some cases, and he might if it didn't feel like the right buyer. So that was the most unique thing. I think
Mark Leary 23:14
that's that's interesting thing to call out, too. Because I I having been through that as well when I when I bought companies and when I sold mine that was his traditional those those investment banker types are like no, you never do that. You gotta you got to keep the variables minimized, you don't never know what's gonna happen. And I think from a scientific perspective, there's That's true. But core values in my case, and some of the companies I work with, like that's just not an option we've got we got to is a smaller company, typically, and there's too much trust, I've got too much ice, it's impossible wouldn't be able to do it. And it was tricky in there, you really had to manage that. is buying and selling a company evolving? Is it a different is a different thing from when it was 20 years ago?
David 23:57
I think a lot of people are there's, there's a lot more knowledge, there's a lot more information out there. There's a lot more people educated on how to buy a company and how to sell the company. But for most people selling a company, they do it once in their lifetime. Right. So it's not
24:11
a lot of reps to get it right, exactly.
David 24:12
So and those who do it where they get some guidance and coaching to help them. And for us who buy a company, some people may buy one company in your lifetime for us we do that more often. But you're seeing a lot more sophistication around it from all sides. And not just from the money side, but from the people side and how people are looking at it. Particularly in today's world where you got frothy prices out there. You got low interest rates, you got people flush with cash from the PPP loans, in some cases. It's it's playing out, played out differently.
Mark Leary 24:46
So go to that. That's a great point. What's the state of the market in your opinion right now? Well, I mean, I kind of threw some observations out there. Tell me what what do you what do you see?
David 24:55
Yeah, people who have great businesses are doing one of two Who thinks they can sell it now and get a huge multiple than maybe the premium than the next seen before? Again, because private equity folks who are buying companies interest rates are low and they can get cheap money. But also people are saying I have a great business and I thought I wanted to get out of this thing a year ago, but PPP ln mon came in, we're starting to recover, I got a lot of cash on the balance sheet. I think I'm gonna hang with this for a while. So you have choice variables, when you have a great company. Those people who barely made it through the pandemic are Like who? I don't know if I want to ride that roller coaster again and are are kind of taking the opportunity to perhaps get off the horse here. Yeah,
Mark Leary 25:40
yeah, the horse has been bucking a little bit.
David 25:46
Yeah, exactly. If they made an eight second is pretty good.
Mark Leary 25:51
So what do you Well, actually speaking to? When you look at the market? What are you segmented? Do you have specific targets, verticals, formulas, and because the client, there's two questions, one is like, what are you seeing across them? Because like, how many people are investing investments right now? And that's not a nothing. And there are other people who are technology and certain services are just crushing it right now. And so you speak to the two questions. They're like, what do you look at? And when you look out, what do you see in terms of an inequity? And
David 26:19
sure, we kind of go into a little different space and mark that a lot of people do when we first started, we were just trying to buy any great company, somebody would sell to us. Hey, somebody want to sell us something. And we talked to everybody who, who might have a business no matter what it was, and we we saw somebody who even pay we have to park benches with advertising on it, we'll sell you. Okay, we'll talk to you.
26:45
We got a lot of
26:46
contracts involved.
David 26:50
Yeah, having recurring revenue to it, let me know. But we as we've gone further along, we've tightened our focus quite a bit, what's the area we call human capital, which really, if we narrow it down to something we call the entrepreneurial toolkit. So if you think about a small and medium sized business, at the highest level, we think they need three things. They need great information, which oftentimes small businesses don't have very good information to make decisions on. Then they greet great people to execute on those decisions. And they great customers to be able to build upon to be referenceable. So we're trying to acquire companies that help in all three of those areas. So EOS was our first step into that. It's a great system to help these entrepreneurial companies. But we also think about assessment tools. COBie is a great tool culture index is a great tool, we think about fractional services, hey, I can't afford I can't afford a CFO full time. But I'd love to have he or she a day a week. And so a fractional service business. We think about certification businesses, how do we certify our people in different areas, we think about health and wellness businesses. So those are the areas that we're spending a lot of time we think about community and membership based businesses like an EOS, we think that's an area that's going to help these entrepreneurial companies, again, this entrepreneurial toolkit, help them be more successful. So if we can build that out, and these partner companies, a firefly can help help each other. We think that can only add value. So if I if an EOS implementer can get a lead from one of our other companies, we think that's only a win win.
Mark Leary 28:26
That's very sophistic. I mean, having being a pro services background. I mean, I I used to I used to be jealous of companies that had you know, static inventory, like if you don't sell a box of bolts, because sell it next month, you know, right. But like in pro services is like I didn't sell it, I pay for it, man, renewing inventory, and disposable depreciating him every single month at very high dollar was very scary. Yeah, and managing people in a way that creates predictable profitable outcomes as your product was, like, Man, this is very, very sophisticated. It's hard to learn to scale fast. And I always sort of envied either b2c product companies, or just anybody who could have a technology that could be leveraged and manufactured and outsourced and contract produced and co packed and all those things that just where you can they can lever really quickly. But you're choosing to get into that space. Why did you choose to get into that very sophisticated, error prone people that people centric world?
David 29:31
Well, the way you describe it, Mark, maybe we don't want to? I think we've we've, we've seen such the impact that EOS has had on companies and leadership teams lives. And that goes back to what we're trying to be all about. How do we impact people's lives? How do we send people home at the end of day when they go home at five o'clock, then we completely drained them of everything they had, or did we actually fill them up with Something so they go home, and perhaps their spouse and kids actually want to be around him instead of hiding and saying, Hey, I wonder what mom or dad did today. And so if we can find other tools that help help with that help companies be more successful, help them be more proactive and off this reactive treadmill. We think it's great. And we've seen the six success of an EOS and how it's able to grow, and the scalability of business of an EOS. But I think that's what attracted us to it.
Mark Leary 30:31
It's interesting to describe, because it's not that different than in my personal journey, because being a leader in an entrepreneurial business is typically I mean, what I teach my clients is, you know, how to get a freer life. And it's about scaling and leadership and process and structure and simplification. And I'm actually describing the five leadership abilities that we teach in the process, simplify delegate predict systemising structure, and learning those skills, which is, I think, really the essence of what we're trying to do there. You know, if you look at it from a spreadsheet, multiple factor, you know, it's not the most logical place to start. I mean, me now as a former business owner, who had teams and leaders, now I'm somebody who is an individual contributor, like I, it's not the most efficient thing I get, I get money when I do work, that I went kind of the wrong direction. But it was a direction of purpose that helps me fulfill what I think I'm great at what matters to me. And the feedback from my clients is that I'm in the right place in the world, I'm helping them. And so it is it really comes down to purpose first, what's the best method? And it's turned out? Great. You know, it's not it's not the best. I mean, there's no contracts in my world, like, I don't have any enterprise, right? Nothing. There's no inertia, like that first month of the pandemic. Oh, there was nobody on the planet who was obligated to pay me one cent when when things shut down.
31:56
And was that scary, was terrifying.
Mark Leary 31:59
What was it what even that it was, it was almost like, there were there was like a week because I had planned vacate like spring break, I had like nothing scheduled. And suddenly everything shut down. It was like, it's the beginning of 2020. Have I already made all the money I'm gonna make all year long. And that was how I was looking at the world. And it was like, how do you even process That's not at all what turned out to be the case. But it was definitely an example of I had to trust in my purpose, trust and what got here trust in the contribution, and that it would pay off and man has it ever in terms of just especially over the last 12 months, how I think I've learned a lot and my grown closer with my clients and where we are now with all the people I'm working with. Now, it's an amazing privilege to be doing what I'm doing. But it man, I really had to let go of some advice I used to give people like, you know, never get into a business without recurring revenue, or better be contracts and or better not be any outs, you know, three years are better than one. You know, all of that. any of that stuff.
David 32:58
And so, so we think about that and think about what you just said, but it's that lasting impact. It goes beyond the contract, right? contracts are great. But when you make an impact people's lives, you become part of their family almost. And maybe you felt that marks, let me hear your your your thought on that. But that's what we saw when we looked at this community, the impact that they were having, and, and the relationships they were developed, developing with the leadership teams. It was incredible. I'd never seen anything like it. So the culture, there was what sold us at the end of the day.
Mark Leary 33:35
Yeah, it is absolutely the culture for many, many reasons. I mean, I'm a member of have been a member of many peer organizations where that identity matters and Vistage, certainly the entrepreneurs organization has been a member of and are involved with, in many ways, one way or the other for the last 15 years. A community of like minded individuals where you can learn from each other and counting each other and connect and EOS is exactly absolutely has that. And what I think is interesting is in the community of the implementers, who came to the party, for all the same reasons, either all the same core reasons whether they implemented at first in their company, or they just wanted to make a contribution and improve their own lives. But then the people who implement it, the companies who are running to us the identity and connection they have with other companies who run on us, it's it's amazing when people say, hey, yeah, that's an issue, you should bring that into your level 10. And there's like, Oh, you know what I'm talking about. And so the connection that happens with that common language is pretty, pretty amazing. And by the way,
David 34:33
the core value thing, I've talked about it several times, but I've had the big core values failure. I don't know if you were there that day, when we acquired the company, and we came to the first QC mark. This was back in the summer of 2018. So we've just acquired the company, we got invited to come to the QC the quarterly collaborative exchange when they get the whole community to get together to introduce ourselves introduced Firefly you And so my teams asked me to get up there and it said, Hey, will you make some remarks, David, I said, I'm happy to. So I got up in front of the group 300 plus people in this room at this beautiful hotel, smart, capable, all successful in their own way, people. So I give my rehearsed remarks, that comes out pretty well, then people shall take any questions. People give me a couple softballs, like I was going pretty well, I think we're, we're in here. And then somebody stands out and says, a winner fireflies core values. And I was a deer in a headlight, and could not think of one. Like, here we are, we're talking about core values. Here we are. Oh, and so I pitched it over to my team, like, hey, do you and they couldn't show it because of my failure. And we went back and read it read, we spent a two day off site like, are these core values somebody that's hanging on the wall? Do they mean anything? If they really are true, I shouldn't have to memorize them, like, Hey, where are they? Again? They should just be who I'm living, right? And people, when they see me they like, of course, those are his core values, or are you kidding me? That says is our core values. And so we read the three did those core values, we think they're now who we are, and we feel like we're living them. Every week during our weekly ltn meeting, we call each other out on on those core values, if we see people exhibiting them, and people when we don't, so it made an impact for us, but it was my failure. And that uncomfortable, one of the kroners on the rug feeling.
Mark Leary 36:33
That's a great story. I shared that. But I have an obligation at this point. What are your core values?
David 36:41
Yo, bolt action, compassion and accountability. Do the right thing. Humble confidence, and have fun? So we added have fun, and we want to make sure that we actually are doing that. That's great. I
Mark Leary 36:56
love that you shared that. And I was like, oh, man, I know another deer in the headlights. You better remember he teed it up? Exactly. If he screws it up now. That's right. So it's interesting. Tell me about the half fun, because that sounds like that was one of those moments where you looked around the room and had an introspective moment.
David 37:15
Yeah, so it's trying to get some true balance in our life, we were a team that just worked an amazing amount of hours and never talked, Hey, where's the point of where I'm productive and where I burned out. And so I've tried to did some analysis. And for me, I figured out it's 55 hours a week, less than that, I start to feel lazy more than that, I start to get burnt out. So that's kind of my number, trying to incorporate our families where it makes sense. And people talk about this work life balance, I don't know that I've gotten it right, but trying to incorporate all these things and be there for you know, I have a daughter in college now son in high school, be there for their events and make sure that they're my priorities that I talk about and used to talk about actually are I say it's my faith first in my family second and work. But it was really work and then work and then work. And so that was it was nice, look nice on a poster, be able to tell people but if you ask my wife or my children, or those as prominently, as priorities and priority work. So I have this sort of my self reflection and trying to change that in my life that led to part of that.
Mark Leary 38:26
What what made it clear to you that that needed to change? When did you start getting a clue?
David 38:30
Yeah, just going through the motions of life failures and setbacks, right? And you have enough setbacks like, Hey, I'm not achieving what I want to, I don't have true joy in my life. I'm not truly connecting with people. I'm just going through the motions of life here. And it's, I knew in my faith, I was going to church every week, but I was just checking a box. Like instead of checking a box, let me do something different if I'm going to get something out of this made me seem try putting something into it. And by putting something into it, starting to connect with people on a real level that made an impact for me. And so that was I have realized that I wouldn't have started setting my own What are my own personal core values, which is honor, courage, commitment, compassion and authenticity in my truly being authentic or is this just a game I play and a mask I'm wearing to hey, here's David the business professional, hey, David, this or am I gonna take those mask off and be real. So that's been part of the process mark.
Mark Leary 39:26
Men does a lot there. A lot of my motto, my personal journey, as well, and the core values of my personal core values and how they fit in my work core values, and they're different and I guide a lot of people through that process. But to two words, that jumped out of me that I'd like to know more about one is true joy. That's two words, actually. But Joy, joy in there and then authenticity. I have to imagine that that is probably something you think about a lot in a world that's very formal and what what's your authentic self looks like? So pick one of those to tell me a little bit more Which one more resonates with you right now? Or scares you? Either one?
David 40:03
Yeah, can go into both. But let's take authenticity. Because I was teaching a leadership class, to some of our new leaders and one of our, our partner companies. And one of the things we dove significantly into is, who do I tell myself I am? And who do I want the world to think that I am. And those that aren't for most 99% of the world. They don't match. And so I was trying to put on them, Hey, I'm this person, business professional. But if I never have any vulnerability, it took me a long time to figure out nobody can ever connect with me or relate to me, like, I don't ever know who he is, or he's trying to be perfect. Like, nobody's perfect. He doesn't really let us in to know who he is. So it's trying to let that guard down. And here's who I am. Here's some of my failures that I think started opening some of those doors. I don't think I've mastered it yet. But I started taking on some of those masks.
Mark Leary 41:03
Well, I think you did a good job with that with the core nice story. That's a good story. It's very, I mean, I think that I love that story. I think it is, like you said it allows people to see a human being. And I'm trying to think who is it that talks about this concept, and that is that, that people connect with us and they like us and they even love us not not in spite of our weaknesses and idiosyncrasies and things like that. It's actually because of it. We know what when, when somebody in our life is lost after they're gone. It's this it's those weird things that we miss most right? You know, it's that uniqueness, that character that comes with us. And so being able to, just to open up about being human that's that is exactly a connection, because everybody listen to anybody's story anybody listen to this is acutely aware of their own failings, at least in their own eyes. And so when somebody shares their own, it's like, oh, wait, man, there's actually gonna mean that I can actually, yeah,
David 41:54
it's it's relatable, right? There's something I can connect with. Because I am, we're all we all have our thing. Or many things, I have many things, bad things. And so and then that this idea of joy and happiness to people always just distinguish, hey, I'm happier joy. I mean, we can find joy in the good in the bad, right? And so that's for me, I never really realized that or thought about that, like, Hey, what's the next thing is going to make me happy? How do I get on the treadmill and achieve the next goal? Well, at some point, those goals just getting bigger and bigger, and I can't, I can't run fast enough on that treadmill. So it's trying to find joy in the good and bad. And this idea of embracing suffering, like I don't want to suffer would be uncomfortable. But if I can embrace uncomfort and suffering, I think is where the true joy can come from. So that's the journey I'm I'm on is wallmark.
Mark Leary 42:43
So is that is that like, starting to remind me of stoicism and the idea of Mr. Fit familiar with that concept? A bit? Yes. Man, the idea of love your feet and the the essence of that is not not pretend to love it. But truly find gratitude in the situation you have for all the teachers, you and all that it is. And I like the concept, struggle with it.
43:07
It's hard, it's hard.
Mark Leary 43:09
Pain is pain. And like, I think in George Orwell's 1984, one of the things he experiments within the story is this idea of sacrifice. And how far can you take it? And could you ask for more pain if you if you thought it would reduce someone else's suffering? And his hypothesis is you can't that once you reach your pain threshold? You are out? Yeah.
David 43:33
Yeah, it's, I don't know if either say, when the actor Will Smith was interviewed several years ago, and he said, there's people smarter than me, better looking than me more talented than me. But if we get on the treadmill, side by side, you're going to either stop before me or I'm going to die. And so when I'm working out really hard, I said, I'm going to do that too. But when it gets really hard, like I think I want to stop is to your point about how much pain can we actually take and how much suffering can we actually take there's a there's a point. I don't know what that is, but there is a point.
Mark Leary 44:11
Yeah, there's a deep maybe even a subject of another podcast, which is really this idea of toughness is one thing, but building yourself up what you know, self care is not about just being gentle on yourself. Because a lot of people around this concept like look, you need to change your mindset about self care and clarity breaks and recovery from what the weak people do to what the highest competitors do to put the best ingredients out there. You know, LeBron James is passionate about his sleep and recovery. JJ Watt goes to bed at eight o'clock because he knows he can't recover from the abuse he puts himself through and so understanding how to manage your own recipe for success and one of those successful ingredients is recovery, clarity and care. You really have to not Just be gentle. So you have to care for yourself. Give yourself that those things that that may have seemed soft in your childhood or in history or in john wayne movies. Yeah, exactly really created create better outcomes. Yeah,
David 45:14
I think that's right, Marquis thing. I used to think, Oh, I can't go hire a coach for myself. Come on. That's only a week people need a coach. Well, no, the greatest as you said, the greatest athletes, they may have their their mind coach, their Swing Coach, their fitness coach, their nutrition coach, so some of them have four or five coaches. So it's, it's, it's shifting that mindset for me like, and I've hired my own coach, okay, I want to get better at this. Let me hire a coach. So
Mark Leary 45:44
since we've kind of gotten into some really good territory, I like I like the human side of this. If somebody asks, you say, you're a church, and somebody asks you, why do you do what you do? What would you ask what you know, your whatever that means to you? That could mean many. And I realized when I asked you like, you probably even know what in what sphere like, I don't care. Why do you do what you do?
David 46:04
into the day to positively impact lives. That's it to positively impact lives to change lives for the better. That's what I do. What I do. And if we're not doing if we're doing business can be a tool to do that. I used to think business it was just about making money and reach veterans profit and loss. No business can be a tool to change people's lives. There was a guy who wants a company at about 1000 employees. And he said he used to sit in church every day and listen to the pastor speak 500 people, that pastor had had the crowds, undivided attention for an hour, and he was jealous of him. All these people paid attention. He said, Hey, wait a second. I have my people 40 hours a week. What if I did this differently? And it was reading that book? And here Nelly? huh, yeah, we have a platform to to impact people's lives in a positive way. And we have 40 hours or so a week. Let's do it differently. So that was a long issue to say, impact.
46:54
I love
Mark Leary 46:55
how that kind of guy got you fired up. And it was I do the same thing. When you when you when you catch me on something that matters. It's like, my voice gets louder. I go faster. Yeah. And that's exactly what happened with you. It's. And so that was that was really cool to see how, like there's an opportunity, there's a leadership, almost responsibility. It's like you look around the world could be better if only people knew some things and had some things. But wait a minute, I actually have the ability to contribute and help. What am I waiting for?
David 47:24
Exactly? That's right more?
Mark Leary 47:27
What is there anything in your childhood or your life experiences that really taught you the importance of that? Or made you feel the loss when that wasn't? around?
David 47:37
That's a good question. I think I came from a little town blue collar family. Just the idea that I can never leave that town and do anything significant with my life. I was, it was not something I originally thought of. And so I think about people, I had a coach in the eighth grade, who said, Hey, I think you could go and you do really well at the Naval Academy. I'm like, what's that? I thought I used to see this Army Navy football game on TV, I thought they took some army guys out of out of the field and some Navy guys off the ship and play the game. And so it was through through people like that those small conversations, those mentorship, people putting ideas in my head, hey, I can do to something more assertive put me on the path. And I was surrounded by a lot of different people in my life from all walks of life. And I saw the the impact that it had my mother worked in a nursing home for 30 years. And my first job was working in that nursing home was being able to interact with those patients and walk down the hall. miny, moe said say half those people maybe more never had a single visitor, the only visitors that the only person to talk to them was people like myself, and be able to have that conversation and the joy brought to their face. That was pretty neat.
Mark Leary 48:49
So what I think I heard was, you had your eyes opened to the world and the possibilities. And when you look around now and you see people whose eyes are not opened, it drives you nuts, these people can have access to so
David 49:03
much more. Exactly right. So when we teach this leadership class and as a part of it, we use a how do we help you achieve your dreams and so in the first 90 days of this year, I'd have to remember the list we've had people pay off their credit cards, or starting to have gone back to school, read five books, learn how to cook six new recipes, random mile and under nine minutes for the first time in their life. Because we think if you're going to be a great leader, you got to know thyself and be comfortable in your own skin. If you can start achieving your some of your dreams and stop being worried about those. Then you can get outside of yourself and start thinking about some other people in their dreams.
Mark Leary 49:40
How long did it take you to get comfortable in your own skin?
David 49:43
still working on it Mark? Still we're now right yeah, still working? Yeah, you think like okay, I'm 50 years old. I'm done. A few things are successful, a lot of failures, but should not at least know myself and be comfortable. I'd say where I am today. At least I know myself. Much better. And I'm able to admit it to myself and mostly to the world. But before I wouldn't even before, when I was in my 20s, I wouldn't even admit it to myself, let alone anybody else.
Mark Leary 50:12
Yeah. Yeah, there's kind of I think there's a hierarchy of first, uncovering the fact that there might be something there like, what like, what is the uniqueness like discovering, oh, I have a thing, I have a value, there's something that actually is important to me, as opposed to taking on other people's expected values, what people expect of you what you think is expected of the community you happen to be in. And that's a big, it's a big factor. And then once you discover it's the thing that you have a unique perspective that might not exactly line up with other people. Oh, my God, what if somebody found out and then had to transform into like, is it possible that somebody might actually even appreciate that, like, how, like, that takes forever to get to what I just described that might take 20 years.
David 50:56
Exactly, yeah. And so it's, it's been a process and I think it probably is a process our entire lives, for good or for bad. But hopefully, I can get a little better each each day each year and, and maybe pass on some of the things I've learned good and bad to others along the way.
Mark Leary 51:14
So you've had quite a journey, I mean, Naval Academy, through operational leadership into private equity investment and trying to make a difference. What's the future look like for David?
David 51:27
Yeah, I think continue to see how we can impact lives. So I have my own personal vision of how we can impact impact more lives through through business. And for some of the other things I'm involved in a big important thing to me is as a veteran, trying to help other veterans as they come out of the military, and come into the business world. That's important to me. So I spend some time on that. And right now, just trying to make sure my kids at this point they are they're getting on their journey out into the quote unquote, real world, and making sure they're on the pathway. There. One of my big things we did last year, I took a group. This came to happen to be a group of men, but it didn't have to be at two to hike the grand canyon rim to rim in one day. And so we took a group of people, many of them had worked out in for 10 years, and others that worked out every day. So over six months, we got them ready. We went and hiked the grand canyon rim to rim one day, we all made it. And so being able to take people on these kind of adventures, where they may think they can't even they never thought they could do something like this, to see them be successful on it. Again, that's back to helping people live their dreams. And I invited some of our partner companies at the Firefly group, I invited the leaders of our companies to say, Hey, who anybody want to go climb Mount Whitney with me in September of this year? I forget everybody say no. But we're taking 10 people out to Mount Whitney in September to summit Mount Whitney on September 21. So a couple of people you know, Kelly nights part of that group? Amber Baird's part of that group, Marco, Donald's part of that group. So we're going to be so we've been working towards, towards that. Sounds awesome.
Mark Leary 53:07
Yeah, sounds incredible. Well, we've covered a lot. And I got more, I would love to ask all kinds of things. But I want to make sure you know, so it covered a lot of ground, anything that we missed, you want to kind of fill in the gaps on,
David 53:22
I think we've gotten a lot of different directions, Mark, I enjoyed it. I think we could have gone deeper in any one of those and spent the whole time together on that. But I think we touched on a lot of interesting things. So I think it's just this idea of coming back to core values was a big part of what we've talked about, in living my life, hopefully, on that set of core values and encouraging others, to find out what their core values really are, and set them on the path that
Mark Leary 53:53
you know, and that's it this, the arc of this conversation really has gone from sort of the technical aspect, and I you know, we in the spirit of authenticity and vulnerability, I think we've gotten to some really core human stuff. And so this is this is what I wanted to uncover. I wanted to take this from like, Well, you know, there's a, there's this, there's the packaging of private equity, and there's also human beings and where these human beings think and feel. And I think for me, the takeaway is that, yeah, pursue money in a technical capacity, you've got a board of directors, and if you need investment, you should do that in a logical, highly intellectual way. And this is run by human beings, and you should, and what their what their organizational core values and their personal qualities and if you're talking to people, I mean, I would certainly like if you talk to somebody to lead the, you know, the leader of the of your fund or whatever, and they can't give you a clear answer what they stand for it, that's a pile of red flags,
David 54:43
run the other way. And I hate when people say, Oh, it's just business. No, this is my frickin life. So maybe just business to you. But this impacts people's lives. So I don't like from people. It's just business. It's not personal. It's personal to me. And so if you To your point, like, yeah, if you can find alignment on those core values and run them in.
Mark Leary 55:05
So right now, what is your most passionate plea to entrepreneurs in this economy in this world and the evolution? What do you want for entrepreneurs to do and think right now,
David 55:17
there's so much you could be doing as an entrepreneur today coming out of this crisis of a lifetime. But I goes back to what I said, multiple times on this already mark, core values, build your business on core values, live those, live those core values yourself. So that that's who you are, and build your team that's going to lead to more joy and more success in the long run because we got to have the greatest technology, what are my competitors doing? I've got to have this. Those are all great. Come back to the simplifying it to those core values if you can get that right. that'll start leading to everything else being right.
Mark Leary 55:54
Awesome, man. Well, David, I'm grateful for all you shared it's great stuff. If somebody wants to, you know keep in touch or continue the conversation with you. How does someone find you most easily?
David 56:03
Yeah, love to connect, please reach out to me on LinkedIn David man at the Firefly group or our website is the Firefly GRP comm one of those are great places to connect.
Mark Leary 56:15
So great, man. Well, that's it for today. Please don't forget to subscribe share with your friends if this was useful to you. Or if you think someone you know this would be useful for get it in their hands, otherwise, they won't learn it. So please give us the feedback. Everything I said is always good, even if it's bad. But we will see you next time on you're doing it wrong with me. Mark Henderson.
VO 56:37
This is you're doing it wrong with Mark Henderson Leary for more episodes and to subscribe, go to lyric