Mike Marr: I've bought 15 companies, here's how I do it!

From building 10 companies to executing 15 strategic acquisitions, Mike Marr shares the secrets behind scaling through M&A. In this episode, he breaks down the five-stage acquisition process, the common pitfalls buyers face, and how culture can make or break a deal. Whether you’re a founder eyeing an exit or an entrepreneur looking to grow through acquisitions, this episode is packed with invaluable insights.

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Josh (00:00:00): Hi, I'm Josh, the host of Two Commas, the podcast. Welcome to the show. Great show. Today we talk always to entrepreneurs. We are moving into the advisory space actually fairly soon as well, but today we have Mike Marr on the show. Mike's a fascinating character as he's been the founder of 10 companies, so occupies that serial entrepreneur space. However, he's made 15 acquisitions, you heard that correctly, 15 acquisitions. So we're going to delve deep into the journey today. What makes an acquisition a great one, some war stories and some interesting challenges that he's had along the way. Mike, by background, is the founder and the chair of the TPT group, which is a family oriented business. The name is such that he wanted to have separation from kind of name in the asset, which we'll get into that as we go through the conversation. He's the recipient of a number of leadership awards, the Blake Leader Award in 2020, the Beta Gamma Sigma medallion of entrepreneurship in 2017, which is a global award, and he was a finalist in the EY Entrepreneur of the Year Awards in the New Zealand in 2014. He's also got a strong philanthropic bent that's a charitable bent, and he founded the Runway Foundation with his wife Therese in 2015, which is a registered charitable trust that supports families experiencing A DHD, which Mike also experiences in his life. So Mike, welcome to the show. Mike (00:01:21): Thanks, Josh. Great to be here. Great to come and share a bit about the journey. Josh (00:01:25): Lovely. We always start these conversations with a bit of a backstory, so could you introduce yourself to the audience and listeners please, Mike? Mike (00:01:33): Look. Sure. Look, I'm originally an electrician by trade. I started off my career as an apprentice electrician and I think in that sort of game or that sort of career, you learn to think outside the box a little bit as well and then moved into corporate and into senior management roles and I guess one day I thought to myself, wait, there must be more, right? It was one of those sort of moments and instead of working for a big corporate as, hey, this dream I had was to do my own business and take that plunge, but no one could have lacked confidence more than me. I was just so this total lack of confidence and it was just that I had a very supportive wife who gave me that push, come on, get on and you can do it, sort of thing. Then once I started I was away, but that was quite a challenge then. It's been this amazing journey from our first business or founding the group I guess to what we are today of acquisitions and a big change for us is when we acquired the Siemens business in New Zealand. Josh (00:02:35): Yeah, thanks for your candor there, Mike. So lacking confidence is not something that people could have ordinarily acknowledge and talk to. And when you said thinking outside the box immediately when you were thinking outside the fuse box, I couldn't help myself, bad pun, but you mentioned that you had a really supportive wife. Have a really supportive wife, but what else did you do to counteract to deal with that lack of confidence? Because a lot of business people talk about their confidence as being something that's helped them through, so what did you do to deal with that? Mike (00:03:06): Yeah, look, I think it was taking those initial baby steps and if I look about, I used to be very good at, I'm not saying I'm very good at these days, but I used to be very good at doing business plans and stuff like that, and it was always in stages. So stage one of the business looked like this. Stage two was like this, stage three was like this and stage four, because I guess stress equals a lack of informational situation you can't control. So if we break it down into the different stages, we can feel comfortable and we can feel more confident on the journey forward, and that's sort of how I sort of operated in the early days. Josh (00:03:40): Yeah, I love that. It seems like you've veered away from the detailed planning, but I wonder if your A DHD brain may have been able to calm down a little bit with the clarity and Mike (00:03:50): What the plan was. Yeah, I think that's right and once I've sort of in the groove or sort of getting that dopamine hit by doing my passion of business, which is what it kind of became is I then sort of got that confidence to push ahead. Josh (00:04:05): Yeah. So what was the very first business that you started and where did you take that business to? Mike (00:04:12): Yeah, look, we started the group and our first business was an electrical and security contracting business, and within the first couple of years it grew to about five or six staff, and then we took the big change, or when we founded advanced security and we acquired the Siemens business. Josh (00:04:30): That's something that popped up in the research that we did beforehand as being kind of a step change for you. And I believe it was just kind of post nine 11 that you made that acquisition. Mike (00:04:40): Yeah, look, Siemens had hurt globally. Many corporates had post September 11, and I guess there was just this opportunity that emerged in a staff discussion they had that I took that opportunity and sort of pitched a business plan and did a deal on part of that business in nz. So that was a real step change for us that unlocked new customers and new opportunities. It was that first acquisition, but it wasn't like a normal acquisition we do these days. We couldn't do dd, we couldn't do so much stuff. It was a big step of faith and a big risk we took. Josh (00:05:19): How familiar were you with the Siemens operating business in New Zealand? I'm guessing you knew top line, bottom line, number of staff, that sort of thing. Mike (00:05:27): And because come from some large multinational sort of electrical contracting companies and round divisions, I knew how the numbers worked and how productivity worked and revenue per employee and stuff like that. So I could kind of reverse engineer different pieces of it I needed to and go Josh (00:05:45): From there. So the business that you were operating, the one that you had founded, the TPT brand I'm gathering, you then went and bought Siemens. What was the difference in scale between your business and Siemens? I'm guessing it was the small buying, the big Mike (00:05:57): Look, the business needed work that we bought, but what was very different is the client base because it was very much government and enterprise and we could cherry pick a bunch of people, which worked really well. So we started off very lean, but we managed to really turn that business around day one to be honest. Josh (00:06:22): Okay. You've been quoted on a number of times of talking about the integration and then shifting some fundamental elements of the business to being a part of your success. Can we dig a little bit deeper into that? I'm curious about the process that you have that may have been built post Siemens, but the things that you do to understand what makes a business a great business to buy and then how you go about understanding the changes that need to be made in that business, if any. Mike (00:06:50): Yeah, look, I think anyone can buy a business. We often joke that any idiot can buy a business and it takes more than an idiot to integrate it and make that acquisition successful. And I think firstly is understanding why you're buying it. I mean, can you actually add value to it? And I'm not talking from a monetary perspective, I'm saying can you strategically add value to it? Does it strategically add value back to your organization? What is that kind of fit? And that's a really, really important thing. What's the cultural alignment of the people piece and does it have good bones? And what we typically mean by good bones is does it have an organizational structure or is it all hinge around the owner and those sorts of things. And we sort of work on a five stage plan and I guess the process up to transaction and the first one is what we call the trust and alignment stage. (00:07:46): And that's sort of catching up with if it's a privately owned business, the owner of it, and it's the same kind of thing to be honest, if it's a corporate or a multinational owned business, but that trust and alignment stage. So they need to understand are we truly a willing buyer and we need to understand are they truly a willing seller? Do we have that trust between us? Is it that cultural alignment? Is there kind of the fit we thinks there? And I think that's the hardest one truly to achieve in the process. And in the past we've often given three, we referees from three companies we've bought so they can actually get that trust up front about us that we're not about having them on or screwing them down on price or anything like that. We've always paid what we've paid in a transaction, what we've pitched to start with, we've always paid. (00:08:38): The second one from there is really the price piece and it's the second hardest. And I guess it's because all vendors have a dream of what their business might be worth and some of them pitch a big hockey stick that's about to happen. We've sort of seen it all, but yeah, look, usually we can get across that pretty easy. And then for us from there, it's really sale and purchase, which is easy and DD and we run very standard DD lists today, which we circulate very early so they know what they're dealing with and we just put it up in SharePoint and they can upload. And most of it's for us is we generally know by that point we are going to buy it anyway, and it's more a case of actually us understanding the business to help us integrate and then we sort of work through what's to the transaction. (00:09:30): So then we have what's called a things we need to do standardized lists, and it targets every single minute thing you can imagine that needs to be completed. And so that seems to run really, really well. And then we sort of go into five stages post-transaction too. And those five stages again is about people and culture first. So we're a people first organization, so they have to understand our culture and I guess customers follow people, so you want to engage your people as well. So what we always do on an acquisition on the first day is we say, Hey, we know this has been a bit of a shift for you guys and a change and a bit of stress is, hey, take your families out for dinner on us, our culture, and we're about recognizing people, so we share the history of the business and where we've come from. (00:10:29): We share about our values, we share our dreams and our vision for the business. I believe people want to be part of organizations that's going somewhere and it has an exciting future. And then we sort of say from there, it's the business as usual phase. So hey, we might have a different brand on the shirt or we could be the same brand, but hey, get out and love the customer so the customer sees continuity, the same great service and things like that. Then our next phase is what we call I guess the learning phase. And the learning phase is, and I think this is where so many get it wrong with m and a is how do we truly learn from the business we've purchased? We pay a whole chunk of money around Goodwill, but we're paying that for a reason, right? Because they've got ip, they've got smarts, they've established the business, so let's understand that, let's learn how they do it. (00:11:27): Every business we've ever done, there's things that business that we've purchased does better than us. How do we actually get hold of that? But equally in that learning phase, how do they learn about how we do it? And so they really get invested then in our systems and we'll take things out of these into ours and on to move forward. That's what we call the integration phase so that we've become one system and one business and then we call the last is really that transformational phase. What we're trying to do is one plus one actually equals three, alright? It's this new, bigger, better business. And through those five stages post we have an integration manager or integration lead who's assigned by group and they're the everyday point of contact for that team that's coming in, getting integrated in where they can ask all the silly questions, right? Because often in the line structure of reporting, they don't want to ask those questions, but when even an integration person, everyone feels happy and that person's checking in on their barometer on how they're doing and things like that. Josh (00:12:33): Okay, Mike, that's a masterclass in how to go about buying a business. Thank you. I'm going to kind of dig a little bit under the surface of each of these points. I just wanted to repeat back just to make sure that I and the listeners have got this properly. So the first, and I think you said the most important phase was the getting alongside building trust and understanding alignment with the potential acquiring party second bit. Then I think you said this is the second hardest part is establishing a price and kind of getting a bit of a leading onto the heads of agreement, which would lead into the sale and purchase. Then you jump into the dd, which I'll come back and ask in a second. The last thing is you establish a list of the to-do list, which is the things that we need to go about to make sure that the acquisition and the intention that we had for it is a success for us and a success for them. Have I got those pre stages, right? Correct. Okay, great. I'm guessing, so that very first stage, I just want to unpack these. So the first stage, trust and alignment, I'm guessing that's binary. So in other words, it either passes that phase or it doesn't pass that phase, so there's not a lot of gray that would sit in there, is that correct? No. Mike (00:13:46): Yeah, and we get to that point pretty Josh (00:13:48): Quickly, Mike (00:13:48): And to be honest, over a cup of coffee or over a lunch, you can kind of get to that point. Is there a fit? Do you feel your gut feel right? I trust my gut a lot and that feel as well, and people deal with people. So you have to sort of be able to fit with that sort of vendor and think, yeah, because still got to work with them through the process of the journey of the transaction too. But look, we found it worked really, really well, but spending time at that phase and sometimes that phase can take a long time. It might not just be one meeting, it might take a year to get to that point. Josh (00:14:23): Wow, okay. And so you're having formal and informal conversations with the owner, with shareholders of that business, you're understanding what it is that their plans and intentions are. I'm guessing you're looking for things like highs and lows in the business, looking for consistencies and conversation, looking for behavior traits. Have I got that right on what Mike (00:14:42): Else? Yeah, one thing I always ask vendors, if it's a private owned business too, what was your dream when you started this business? What was your vision for this business? I think that's really important. The other thing I always say too is the business I've got is my baby, and I know if I was selling it, it would be like I would be hackster my leg off. That would be what it would feel, right? And that's how a vendor feels, right? And it's really respecting that. So I often say that, look, the process of this is, I know this has been your baby and we are a really good owner, but we want to understand what's important to you, what's your dream for the business and all these types of things. So we can be a good steward owner of the business, if that makes sense. I think it's really important. Josh (00:15:29): Yeah, I get that. Any relationship I was once told and I have had no reason to challenge this fundamental underpinning of the relationship is communication open to way communication and expectations. So in other words, being clear about what each party's expectations is Mike (00:15:46): And Josh (00:15:47): From the back end of that comes alignment. So if we're able to talk about things and then we understand what each other's expectations are, then we can either achieve or not achieve alignment a hundred percent. And so you build that really, really early on, that's quite counter to what a lot of other people experience when someone's looking to buy their business, especially the bigger the business, the less of that they experience. And so that's really refreshing to hear that that's your approach. So do you think that's markedly different to what a faceless global would go through? Mike (00:16:16): I think it is, but even if we were buying something off a multinational corporate, again, establishing that trust stage is so important to have that credibility, to have that trust, to understand who we are and what's important to us because even a multinational, it's important on what happens to that division there. It's still their reputation as well. Josh (00:16:38): Of course, within the multinational there's likely to be an m and a team and those folk are not known to pull any punches and they can be quite numbers centric and also occasionally quite aggressive around things, whereas your approach actually flips that completely on its head, which I love. If we move on to the price phase, so different industries, different businesses would carry different valuations clearly and obviously, but how do you establish what is a reasonable price? Mike (00:17:06): Yeah, look, so usually we would look at, we ask for three years tax accounts and obviously budgets we will value the target or the business internally, but we'll usually get it valued externally, independently, (00:17:23): And we won't give any steerage to that independent, we just want a completely independent lens on valuation. Usually we come in higher and that's okay. It's just like we're just testing our thinking and what we don't want to undervalue the business either we want to disengage the vendor and that usually works really, really well. I mean sometimes I've sat there before for vendor, we won't usually just pitch a price in an email. We will sit down and because we've got about a 12 page sort of non-binding indicative offer letter, I would sit with you if you were the vendor and we'd step you through every one of those clauses on that non-binding offer and explain this is how we valued it and this is sort of why. And usually we'll get a pretty good vibe straight away how that's sort of sitting. I've had one years ago, many years ago that sort of said, oh no, I really wanted more than that. Mike And I sort of said, well, what if it was this? Or we just sort of talked it through because again, we tried to make the numbers work. Josh (00:18:27): Yeah, I understand. And so at that stage, with that price backwards and forwards, do you then establish what the structure of the deal is likely to look like? So in other words, the potential for the earnout, the cash, the warranties, those sorts of things, or does that come later? Mike (00:18:45): Yeah, look, I guess when we've presented the non-binary indicative offer, it would be the structure. So it would be, hey, is it a base amounted transaction then an earnout, or is it just all in one transaction? We are not great fans of earnouts. It's not generally received well by vendors I guess. But when a vendor pitches a hockey stick, it's the only option we have because we have to de-risk ourselves. I guess we're about sustainable earnings and it's the only way we can really manage that through. Josh (00:19:18): Yeah. What's your preferred valuation methodology? So there's net present value, discounted cashflow, there's weighted average, there's balanced, all these kind of different approaches. Mike (00:19:27): When we get it independently, it's usually priced on a number of different scenarios. We more looking at ebitda, so we're very EBITDA focused. Josh (00:19:37): Yeah, great. The other thing that I've always found really interesting is that some acquirers look to previous years and say, we're looking to buy the business of this year, so we're going to value it at x times whatever this year's profit is. And so clearly you're not buying the business that was in the past, you're buying the future business. Picking up on the point that you made about the hockey stick and hopes and dreams about the business, A three x number from any previous year of profit is clearly something which is going to be very, very difficult for that business to achieve. So do you do that kind of weighted average thing over the Mike (00:20:13): Course? Yeah, we kind of wait it, so we sort of look at, hey, what's the last three years look like if it's a pretty consistent revenue business, but what's out the windscreen? And we can tilt that a little bit either way on where it (00:20:25): Sits (00:20:26): Again, if we know it's a target we want to buy and if we've actually worked through the exercise properly and what's the value we can add and things like that. We understand the strategic benefit of it and we have a bit of a lens to what it financially looks like post transaction. So sometimes we can pay a premium because we can see the complete picture. Josh (00:20:44): Yeah. Okay, great. So got the price has been agreed, non-binding indicative offer, so letter of intent kind of thing, and then you move into the sale and purchase. And so the sale and purchase agreement is where you start to nut out the real kind of nitty gritty of the deal. Typically, by the way you mentioned, I'm just going to jump back a step that the trust and alignment phase could be over a couple of cups of coffee. It could take as much as a year to get alongside and work out, are these people our sort of people. Then the price piece probably happens relatively quickly, I'm guessing. Mike (00:21:16): Yeah, look, generally it's probably two weeks for us. Wow. Josh (00:21:19): Two weeks. That's remarkable. A very, very stressful time for the party that's being bought. So that's a super great kind of speed to be able to move through that, the sale and purchase agreement. So what's typically involved in that for Mike (00:21:33): You? We've just done a couple of those and they were about seven day turnarounds. Josh (00:21:38): Wow. Mike (00:21:39): To signed, but generally probably because done a lot of m and a, our further terms are pretty well rounded today. They've been through lots of vendors, lawyers, so generally there's not a lot of that jumps out from the vendors solicitors or legal counsel these days. And then our DD we go into is a 20 day dd, Josh (00:21:57): 20 days from remarkable. You've mentioned not being a fan of earnouts, so does that mean you tend to favor cash upfront deals? Mike (00:22:06): Yeah, generally cash upfront, Josh (00:22:07): Yeah. Great. Have you done much, if I can ask or anything around people flipping and taking script in the main business? So in other words, transfer? Mike (00:22:16): No, we've never done it, so we still own a hundred percent from our perspective. Josh (00:22:20): Got it. So dd, so that is, I'm not going to delve all the way into that because it's typically quite an involved process, although you did say 20 days, I think you try and get through that, which is again remarkable. We've had a number of guests on the show that have talked about a year of DD and just the brutality and the difficulty of it. So what are some of the three to five critical things that you really want to understand as part of dd? Mike (00:22:46): Well again, we're trying to buy, we are valuing a business on sustainable earnings or it might be on this hockey stick. And so we want to know what's underneath those earnings, what are the revenue streams? Are they recurring? What's the risk of those revenue streams? Are they backed by contracts? Is there change of control clauses in those contracts? What's the revenue? What's of the biggest customers? What's percentage of revenue? So again, we are looking at risk around that commercial piece. We also are looking at legal dd. Again, it depends if it's an assets purchase or shared purchase as well to how deeply we dive into which area. So obviously if it's a tax, a share purchase, we're going to be diving into the tax piece and be needing letters from their accountants and different things like that Josh (00:23:32): To Mike (00:23:32): Get comfort around that piece. Josh (00:23:33): Yes. Okay, great. I'm presuming you have a team of people that run through that process in your business. Mike (00:23:40): So all DDS done in-house, right? Josh (00:23:43): Yep. Great. Next things we need to do the to-do list. So that's the pre actually taking the business over. What does that tend to look like normally? Mike (00:23:53): Oh look, it's everything from registering a company to opening a bank account to increasing a limit on one of our finance teams. It's to creditor accounts, to uploading backups to uniforms to signage, to changing insurance and doing this here. It's everything you can imagine. But these are substantial spreadsheet things with priorities to deadlines, to who's assigned what task, and these run post-transaction as well. So they can cover a year post transaction and it just helps us to keep our heads around, make sure we are not missing something vital because anything we miss will cause pain. So generally these lists are well established and multiple transactions and we just keep on refreshing those and then managing, but that's what we call it. We call the things we need to do and that's what we typically share with a vendor as well. So they see we've got our heads around it. Josh (00:24:54): Yes, I love the simple name that's been given to what is essentially a very complex Gantt chart based project management approach, Mike (00:25:01): Things we need to do. Josh (00:25:03): Yeah, I love it. Before we move into the post deal, which is equally important, I just wanted to touch on a couple of really critical aspects of this. So you've clearly got a strategy with TPT group, and so if you're comfortable to share that, that could be quite confidential. So I appreciate if that's not the case. But the second piece, the extension question of that would be how do you ascertain whether a business is going to be a really clear fit with your strategic intent over time? Mike (00:25:34): Yeah, look, really good questions and look from a group perspective, we're quite diverse today because we've got a commercial industrial property business esa. We've got a technology leasing, which is really a finance business, and then we've got a whole bunch of trade rental vehicle business now for vehicles. Very, very different to what's over this other side, which are really technology businesses and they've been electronic security and advanced security IT engine, which is an MSP Microsoft service or managed service provider cable net, a SG tech and ever alert and in a correctional security company as well. And so they're very, very, very different. We've sort of broken the group in half about 18 months ago, two years ago really. So our independent directors will sit over on this side and then we've got a different sort of governance over the other side. So we sort of broken into a family office versus direct investment businesses and such. (00:26:29): So what we're kind of looking at over here is if you look at the technology business, where most of our m and a happens is how do we position our business for the future? And I guess to really create that UP in the markets that we are in and increasing that sort of capability. And I think what in these technologies business and converging them together, which is what we are doing, I think really positioned just quite uniquely in the market. And I think it's, my old chairman had a really good way of saying it's kind of like the strands in a rope When five come together, we have a real strength in that market space and a different sort of capability to if we were just an electronic security company or just an IT company. So again, and we sort of see in the whole future and connected word and tech is businesses do converge and we have to change and we have to position our business forward. (00:27:25): So (00:27:26): Our role has always been how we position our business for the future. And from a TPT perspective, our tagline is growing great businesses. So we are out there to try and enable our businesses to achieve their market potential. That's what we're out to do. How do we build great businesses? Josh (00:27:42): Yeah, I love it. So a diversified conglomerate is the name that would've been attached to the business back in the eighties back in the days of m and a and when it was kind rampant, but clearly you've got some sectors that you have a real focus on and a strength within. How do you find companies to buy? Mike (00:28:03): Look, we do get contacted from brokers. We generally prefer to deal direct with a vendor. So we have contacted multinationals with large corporates about different pieces of their businesses and we get in front of 'em and have a conversation or even privately owned businesses we'll generally approach and say, look, can we catch up for a coffee and have a conversation and have you ever considered this and get it really straight from the horse's mouth. We've also used, have used some brokers in the past to hunt out targets for us. So lots of different things. No real one way I guess, but the most successful has been direct approach. Josh (00:28:43): Got it. And you maintain a great network, you've been in business for a while, and so people start to know who you are and what you are up to. Do you think the outcome changes for the acquired party if they contact you versus you contacting them? The whole thing that there's a bit of a belief set around folk that it is better to be bought than it is to be sold? Mike (00:29:07): Look, I think it just comes down to who you're selling to. I mean, I think we wouldn't treat the vendor any different in the process. We would still be about the same things and same value too, I think. So yeah, you might find if they're sort of wanting a premium then that might be change, but yeah. Yeah. Josh (00:29:27): Okay. You've talked about values as being really important because you want to make sure that the business that you're buying, the individuals that come with the business, because we haven't managed to do overstaff just yet, there's got to be a good values alignment. What are the values that you operate to as a Mike (00:29:43): Group? Yeah, I guess it is around the integrity. It is about trust, it is about respect, it's about growth. It's really our core values. But what we're going to be really mindful if we are integrating a business into our culture that could disrupt our team and culture. And we looked at one transaction a few years back and we got right to the end of DD and we're actually really happy. Everything was great actually. It got a tick in commercial and legal and everything like that, and you'd usually just say, yes, that's a tick. But I sort of said to my CFO before I left the office, it's got a niggle, I just got a niggle and then I woke up the next morning, texted we were out, and it was just that what I really reflected as the culture didn't fit our business and we would've lost many of our good people if we'd brought that business in and we're not going to do that to our people and it would've had an impact on their business too. So just the fit wasn't there. So you've got to be paid to walk away. So we often say we hold them really lightly and loosely. You don't get over emotional around it because it has to work for the vendor, it has to work for us. We've got to know we can really add value, it's going to fit, otherwise it's going to be a train wreck. (00:30:55): Again, any idiot can buy a business. Josh (00:30:59): There's an expression in business, which is that some of the more complex things in life are remarkably easy to get into, yet incredibly hard to get out of. So starting or buying a business can be pretty straightforward. Agree a price, get a sale and purchase agreement off you go. Getting into a marriage is really easy. Starting a family is really easy. All those things have big ramifications and consequences. So that's quite clear here. I'm guessing this has probably changed over time. I'm curious about the role of finance. So financiers for these deals, I'm guessing that Siemens probably took on some debt to be able to do that deal. Mike (00:31:36): Yeah, look, it's an interesting journey. So we've always been about building a balance sheet since I went into business. We've owned everything, everything. So we own hundreds of cars and we own property and we own our photocopiers, we own everything, right? Josh (00:31:51): Wow. Mike (00:31:51): And it's, we've always been about building a balance sheet, right? Because then we can run the distance so when the tough times come, we've got a balance sheet. So that's what we've always been about. And I guess we've always been about investing back into the business. We haven't been about ripping all the money out of it. We've been about how we build a great business and that's by investing in that business. And look, we do use our care facility, our corporate banking on how we'll fund m and a deals and stuff like that. But again, we've got a balance sheet to support what we do and that's been a big thing for us. Josh (00:32:29): Yeah. Okay, great. Let's jump into the post deal phases. So the five phases that you mentioned, making sure that you've got a good people and approach and a plan around integrating those folk into yours. There's the business, business as usual phase, which sounds like it's a very outward facing, get out and love the customer, understand what their needs and opportunities are and how we're doing well and referrals and all that sort of stuff. I'm guessing the learning phase. So how do we truly learn from the business we bought, which I love by the way, integrating the business into our core operations and then any transformation that's required. Have I got that right in terms of the five steps? Okay. Let's talk about the people and culture. So you've talked about your values, they tend to reflect quite well on the culture, but if someone was to be bought by TPT, what would they see? Because I'm always interested in the behavior because culture's manifested through behavior and how we communicate Mike (00:33:24): To each other. Look, I mean I think those values is what they should see is about that trust and respect. And we will dive. We have extensive sort of staff benefits policies and recognition policies from, we have about 40 staff awards a year where our people nominate their peers for awards. They're not allowed to nominate themselves because in a great culture, it's not about yourself, it's about your peers. But you can't win an award if you haven't participated in the awards. And in our business, any manager, we think we've got 63 managers across the group. Any manager can send an employee and their family out for dinner on us. That's what they'll see in their every day. Our expectation needs 15 to 20 families a month go out for dinner on us even now in these times because about recognizing the person, recognizing him, that's our values. I think they have to see that we're putting our money where our mouth is because people talk this stuff, but they don't actually genuinely do this stuff. So the first day saying, Hey, go and take your families, you and your families out for dinner individually and to 200 bucks and claim it back is, oh wow, that's different. (00:34:41): So we have a staff crisis fund, so any staff can apply confidential financial support. We have, it's kind of an unlimited sick leave thing. So if you are unfortunate to have a life-threatening disease, we'll fund 80% of your salary for 12 months. And we cough for that because that's about looking after our people. So these are things where we think are really, really important. And we do newsletters to homes because it engages the family. The spouse gets to read what dad does at work and understand who this organization is, and we do EAP and there's all sorts of things we do. So what we are doing that first day is that first week is we're actually really showing them who we are. And again, establishing that real trust piece as well. But also in that first week or sometimes weeks is if it's integrating into one of our teams, there'll be pizzas and each week to try and actually just get our teams filling together and feeling comfortable and stuff like that. Josh (00:35:44): Love it. Draka famously said that culture eats strategy for breakfast. Mike (00:35:49): Yeah, absolutely. Josh (00:35:49): And it's quite clear that you've got a pretty detailed and comprehensive strategy. So I'm guessing that probably you've had some experiences where there has been maybe individuals or maybe a group within a business, but have you had experiences where you've bought a business and you've seen that there is a bit of a cultural mismatch in some way, shape or form? And if so, how did you go about trying to change that culture? Mike (00:36:12): Yeah, look, it's an interesting one. A because leaders set the culture or allow the culture. So it not as where we have a cultural issue, and it can even be in our current business where we might have a branch which we identified to be a weaker culture and how we sort reinforce that culture or that leader around that and things like that. But look, it's a hard thing to change, but I think the culture only changed when they really see our values and practice. And I think in a great culture too, is the team will push the people out who are not the right culture. The team will push them out and that could be the troops on the ground will push the wrong amount because they know that's not the right behavior or they'll raise it up in that sort of a great culture Josh (00:36:59): Business as usual phase. So get out and love the customer. So often customers can be quite concerned about what the new acquirer's intention is. So I'm guessing a part of it is to communicate what the strategy and what the plan is to make sure that their relationship should it be a good one. Hopefully it is a good one will continue and will only evolve and get better. What else do you tend to do when you go out, when you're endeavoring to bring the customers along on the journey with Mike (00:37:25): You? Yeah, look, I think it's how we message as well. We often say, Hey, we've acquired this business and it's joining forces with us. It presents better to the market. I mean, we keep it so under the cone of silence for so long about the target we've got even our own people don't know really till till the last day sort of thing. And obviously that's when customers find out as well because just the way it has to be to protect the interests of the vendor and the business we're acquiring. But so we seem to have a media release. We do have prepared statements that the staff can hand out to customers in the physical and obviously those key customers are contacted directly for discussions and sort of follow up meetings. So we sort of drive that engagement plan. They need to hear from us, not from someone else. Got it. Yeah, and there's always learning on that. Sometimes things get out, so there's always risks around that. Josh (00:38:28): Yeah, yeah. Understood. Speaking of learning, the learning phase is the next one. How do you do that? So how do you learn from that? Mike (00:38:36): Look, I think it's just slowing things right down. Actually. I think the learning phase is actually the longest phase. Fact is the learning phase could actually be 18 months. It's kind of not rushing in and changing everything. There's certain things that need to change. They need to come onto our payroll, they might have to come onto our gl, but hey, Rome wasn't built in a day. We can go slow here because again, that change causes, again, stress equals a lack of informational situation. You can't control. So everything's been changed around you and you can't control, it causes stress and it causes people to go, oh, I'm over this. I can't cope with this. Entrepreneurs are good at coping with all that change, but actually not everybody is. And so we've got to just go on that journey and really how we capture that, what they really do well, and again, they feel comfortable with us and we are, I accredited and audited, so we have to have a fully controlled system and processes and procedures and forms and all that kind of stuff. And so whatever they've got has to be integrated in the end. At some stage they'll be audited and things like that. So that's kind of our business. Josh (00:39:43): Yeah, yeah. Okay. Got it. We've touched on the integration piece. Is there anything else that might be helpful for people buying a business to know? Mike (00:39:50): Yeah, look, I think the gem there is, which we didn't do in the early years, was the integration manager and lead. It is such a valuable role. And someone who knows who's out of our core team, who knows our values really well, who's a great measure of the barometer of the business we've acquired, and what's the culture doing? What's the people doing, chewing the fat, having cups of coffee, Hey, what do you need? How can we help you? And things like that has been just a gem. Josh (00:40:21): Yeah, wow. Okay. They might be varied by background, but is there a typical profile of person? Is it a project manager or is it a finance person or what kind of typical Mike (00:40:32): Skills steering being people who have been a reasonably high manager role in our group. They may have been a previous regional manager or branch manager or a business manager. They may have hung that hat up and they've really just, so we've got a special strategic projects manager who does that role, but we've also had other in corporate services do that role in the past for integration. Josh (00:40:56): Interesting question for you. So with a cash deal and the no kind of earnout approach that you tend to prefer, I'm guessing that ordinarily that would mean that the CEO, the founder doesn't come with the deal, they don't start with the company. Is that correct or do you have exceptions to Mike (00:41:12): That? Look, it all comes down to the, if it's a privately owned business, I guess probably, I dunno if I would be employable, right? Neither. But often people decided to sell, it's because they actually, they've come to the conclusion they weren't even want to hang the hat up and hang the tool belt up and really go and enjoy the fruits of their labor for many, many years. So would generally, at a minimum we would want an ambassador role. So they might not be an employee, they might finish a transaction, but generally we'll want an ambassador role for six to nine months. That's an unpaid role. And all that means is we could list them on our website, we can wheel them in. If a customer had an issue or anything like that, or an employee, excuse me, if an employee had an issue, we've never had to do that. But that's just an example. That's kind of the minimum. A couple of times they've sort of had a six months fixed duration period. It's a bit of a handover period. Some vendors prefer that. So it's a bit of a discussion. And we had one vendor many years ago who we did a deal and he said, look, but understand Mike, I'm only going to work for you for six months. We've got halfway through DD and he says, actually, I want to work for you permanently. And he worked for us for four and a half years until he retired, which was kind of lovely really. But he was just a great humble level five leader, just a great guy. Josh (00:42:41): That's a Jim Collins esque reference. For those that are unfamiliar, we've both clearly read good to great and absorbed it really well. Interestingly, Jim was interviewed a little while later and he said that we wanted to call it servant leadership, but we didn't think that the time was right for that. And so essentially those terms are interchangeable. It's a wonderful leadership model. I'm going to talk to it briefly and then ask if this is yours. So that the essence of servant leadership is giving people what they need, not necessarily what they want, and then including them in the critical aspects of a decision making process that will have a major impact upon them. And then finding opportunities to grow those individuals and making sure that there's a really effective feedback loop in place. So that's me doing a bit of a teaching moment, but is that kind of how you describe your leadership style, Mike? I will do the same thing. Have some coffee, by the way. Yeah, I'll Tristin (00:43:34): The coffee at the end maybe. And Josh, if you could just take your phone off Josh (00:43:37): Of this. Oh yeah. Tristin (00:43:38): Vibrated twice I think, Josh (00:43:40): Has it? Tristin (00:43:41): Yeah. What a dick. Yeah, but it's all good. It's not too bad. It's just like you just get a bit of a, Josh (00:43:48): It's on silent and it's on airplane modes. Tristin (00:43:51): I know, but Google calendar and stuff Josh (00:43:53): Oh yeah. Can sleep through the, Tristin (00:43:56): That's kind of already scheduled. It's just nightmare. Josh (00:43:58): Good point. Tristin (00:43:59): Yeah. Right. Josh (00:44:01): So we were talking level some level five leadership and the servant leadership things, so yeah. Mike (00:44:07): Yeah, look, really love the Jim Collins stuff and level five leadership. We teach level five leadership in the business. We're about to building up and growing level five leaders. And so I lead internal leadership training days in the business a couple of years ago we put 60 through, so I've got one coming up actually. And that's about developing our young leaders understand what leadership actually is, because I think people think leadership or a manager is leadership, but it's actually not. Leadership is something we will never, ever master. We are on this journey, and it's the thing about level five leadership. If you ever thought you were a level five leader, it means that you're not a level five leader. That would be probably pride, but we really, really believe in it. We believe it's what drives great businesses. Josh (00:45:05): Yeah, I completely agree. I heard a great quote once, leadership is a decision, not a position. And I think about positional management where it's something that you're appointed into a role and you have a title, team, leader, manager, whatever it might be. And so that bestows power on you and power is not leadership. I often Mike (00:45:30): Laugh, I speak quite a lot on leadership, and I remember when I worked for an Altru City Lion company when I was very, very young, I would've been about 21. And I remember having a desk having a phone, and I had a business card, and gosh, I felt significant. So it's kind of funny, funny looking back, the journey of leadership and how we change and we get some edges rounded off us and a few scars along the way that shape us, shape us Josh (00:45:59): And build humility I think as well. Mike (00:46:01): Absolutely. Josh (00:46:02): Tony Robbins talks about significance as being a core, one of the fundamental aspects of being a human, but it's from the outside could be viewed as being positive, but he frames it as being, ah, significance is not a good thing. It's not something that you want to have more of in your life because then you are craving others to recognize you and elevate you, and therefore you're putting your place in the world in the eyes of others is more important than how you carry yourself and how you act. Mike (00:46:29): It's really interesting. Josh (00:46:30): Yeah. Yeah. So you've been through, I'm guessing you've bought 15 companies, so that probably means you've spoken to well over a hundred prospects that could be opportunities to bring into the TPT group. What are some kind of couple of three critical things that you've seen that people have done wrong early on in that journey that has meant that you go, oh, this is just not the right thing for me? Mike (00:46:52): I think sometimes people don't give the time. It should have to really listen. They might think, no, no, just not for sale. Well, actually, it's still worth having a discussion because again, it might not be now, it might be in three years time, but it's still an opportunity to engage and have a conversation, I think. And is there an alignment? Because it might be to say, well, actually it probably is the right purchaser. I just need to get my business in shape, right. Look, I think the other thing is every business should always be in good shape and be available for sale too. And I think people, we've always been a believer keep your personal stuff out of your business and keep your business clean and things like that. And I think those are mistakes people can make or private owned businesses can make. Josh (00:47:48): Yeah. I once heard a builder, I think it was that talked about extruded Fiberglas being a product that he needed to buy. He was running the purchase of his surfboards through his business. He and his whole family were made keen surfers, and so they had like 25 surfboards or something, and they talked about it as being a business product. And so that's clearly what you're referring to. There is your business, is your business. And keep those Mike (00:48:12): Two things clean, keep it clean and keep it really helps when someone's looking at buying it. Josh (00:48:18): Yeah, I totally understand and agree with that. You've described acquisitions as being whisper moments. So how do you recognize when a business opportunity is worth pursuing versus kind of not? And what is a whisper moment? Mike (00:48:31): Look, I think you kind of get this sort of gut feel or look, I can tell you a funny story was many years ago, I had a manager coming to join us from a competitor and I got a ring from one of their directors. It was an Australian company actually. And he said, actually, that guy that's coming over to you, you're not interested in taking over the lease on his car, are you? And I said, no, not we own all our fleet. And I said, oh, but I heard you guys might be pulling out in New Zealand. He says, yes, we are. We're pulling out in the 14th. And the whisper moment was, Hey, I'll buy your phone numbers off you interesting, this crazy idea that comes into your mind and you go, and he said, is this Pauls? And he says, what? You pay us some money and we had our phone numbers for you. We are leaving the country. I said, yes. It was just with this cheeky sort of cheeky deals. But I guess what's that sort of opportunity you sort of feel, or the idea comes into your head? Do you actually respond on it or do you just, oh no, don't bother doing that, (00:49:32): Or We try and look for that and also is, hey, if there is sort of an opportunity or so says sometimes we'll get something come up through the business, Hey, this could be a good business to buy. We'll go, okay, let's go and have a look at it because they're a lot closer to it to us, and it could be something good that fits with us. So it's interesting at times just sort of how are we going to explore something, but we trust our gut. I trust my gut a lot if it kind of feels right or I can sort see how it can come in. And we worked through a snapshot paper pretty quickly, which kind of looks at who the business is, what they do, what's the value adds, both ways that strategic fit, what the numbers are saying, what the strip out costs are, the deal structure, our valuation, the funding. And then there's sort of a risk, high level risk summary, what could go wrong and things like that. And then the things we need to do. And that's sort of about a four page sort of document, and that's typically what goes to the board as well. Josh (00:50:37): Yeah, okay. I really like that to me sounds like what I'd kind of described as being a canvas popularized by Alexander Oswell with the business model canvas, where you lay out the critical aspects and you as much as possible squeeze it into a small real estate space Mike (00:50:53): Yup Josh (00:50:53): Those are the critical aspects that you need to be focused on. So you can kind of get it at a glance rather than Mike (00:50:58): Leaving. And we can bang that down a couple of days, usually around the target. That just helps to test our thinking and challenge your thinking as well. Josh (00:51:05): Yeah, the surprises or the whisper moments, just relaying another story, I was speaking to a founder yesterday and they're in the publishing space. They purchased a magazine that was declining in sales and the founder wanted to get out of the business and they were kind of struggling to maintain the fixed expenses that they had, leases and salaries and that sort of stuff. So they bought the business for a dollar and a real positive surprise that came at the back end of that. What they didn't realize is that they'd bought essentially a barcode, which was the right to have that displayed and offered for sale in 5,000 merchants across New Zealand. So they bought 50,000 email database, but then also this subscription business essentially because to get into those retail outlets is very, very difficult. So the whisper was, what's the other opportunity that sits in here? And then they dug a little bit deeper, it kind of transformed their other business. To what extent when you buy a business, are you able to cross pollinate? So in other words, you talked about one plus one equals three. And to me, I would hear you say that as being we can demonstrably add some value to this business and we can kind of offer those things across to the rest of our customer set. Is that one thing, if so, how does that work and what other things do you Mike (00:52:21): Kind of the cross sell between, you mean? Josh (00:52:22): Yeah. Mike (00:52:23): Look, it's interesting and it's certainly what's driven some of our thinking. Often we sort of think, Hey, we can be the five strands of the rope and be stronger in the market if we sort of have this. But I think probably any group of companies with different subsidiaries, it is a journey to really truly be able to cross sell. And it's certainly something we haven't mastered, but we are on that journey and it is working. And I think the more it integrates, and I think our own people have to see the converged business before the customers can see the converged business because it's our people that have to share the converged business to our customers. So, hey, when you deal with us, you've got this, you can have access to, right? Things like our finance business or leasing business has been great that that was one of those gaps. We saw whisper moments and we sort of established 19 years ago, gosh, long time ago. So yeah, there's absolutely things how they touch and fit together. What we're trying to do now is because got 20 something offices across nz, so we are trying to have converged offices, so that's where we'll have several of the same different subsidiaries in the same office because that drives the water cooler conversation and helps our people to really understand those cross group discussions, which drives the customer (00:53:42): As well. Josh (00:53:43): Tech is obviously at the core of what you do as a business and you're in the technology space within quite a lot of those organizations. So you've also been kind of heard to about getting into leading edge technology. So this is kind of a two part question, so I'll deal with the first bit. First, when you're looking at something which is emerging technology, how do you ensure that you're not right at the bleeding edge, which is the space of too much risk, and then probably more promise than delivery versus getting into something at a leading edge because done some really interesting things at both of those phases. So how do you assess technology effectively? Mike (00:54:21): Yeah, look, generally the main tech businesses we do, most of them are sort of more integration type businesses where they access global manufacturers and New Zealand manufacturers and integrate solutions and design and wrap these up and deliver to customers and have a lifelong journey with that customer. That's kind of what we're out to do sort of more the pointy end innovation has been the a g tech business, which is around drones and AI and all that stuff. And certainly we've been on the real end, pointy end and the bleeding end of that, and we've spent millions on some things and then we've had to just pause on them because, and it's probably been a shareholder pause to discuss with my directors at times. It's the only time we've got independent board of directors, so it's the only time we've ever put a shareholder hat on was over one of those where I think we spent 3 million and the board wanted to carry on and the shareholders didn't. Interesting. Yeah. But look, I think we are still learning that space. Look, there's lots of different tech things we have developed and we have been able to commercialize and that sort of piece of the business, very much positions that you have for businesses forward for the future and those customers for the future. They've done some amazing cool projects like the Dock AI project on the Predator stuff, which you may have seen (00:55:46): Amazing drone tech and automated drone stuff and things like that too. But some of these projects really on that pointy end is sometimes the market's not really for them yet either. And so that's some of the things where we continue to learn. We certainly haven't got it all yet. Josh (00:56:04): Yep. Yep. Ai, you've mentioned it so I know that it'll be kind of quite high on your agenda of things that are opportunities, but also potential risks inside your business. Are you more optimistic or more concerned about the role of AI as we lead into the next kind of three to five years? Mike (00:56:23): Look, I think we're optimistic around it. I mean, the tech business has been quite a long way down that road for years. We're probably a bit slower in that space at the moment, but we are going through a business transformation thing internally around AI at the moment and process automation, so on how we can use it to do things smarter. So we've sort of got a working group together for that at the moment and get some external assistance to help us on that journey. Josh (00:56:50): Yeah. Got it. Do you have a view at this point, and we're not an AI podcast, but I'm always, I'm curious as to how that technology or technology set will influence the future of work for people. You've got a 500 staff across the group, is that Mike (00:57:05): Right? Yeah, 300. Josh (00:57:06): 300, yeah. Okay. So Mike (00:57:09): Look, I've had different views over the years and I've sort of thought I did some training for Singularity and that and then sort of thought I looked at the future and I thought, gee, it really could disrupt jobs. But look, I'm changing my view on that now. I sort of think so many jobs and careers are actually getting created. Yeah, absolutely. There's impact and to probably some of the traditional more admin roles or legal roles or different things like that. But I think there's this natural transformation and we've seen this through all the different industrial revolutions and different things like that. And so look, I think there's still a future for everybody. There's certainly a number of roles that just can't be automated, so it looks interesting, but I think we have to disrupt ourselves in business. We can't wait to be the victim. We actually have to embrace this stuff and test it and look at it and see how it can benefit us to position our business. If we're not doing that, our competitors will be and we will end up being irrelevant. And New Zealand has to embrace the future because if we don't, the jobs of the future will be in another country. So we have to position this country forward. Josh (00:58:21): Yeah, there's a risk for New Zealand of us becoming the dairy farm and the wood supplier and a nice place to go and look at the dairy farm and the wood supplier as a tourist. I note recently that we were a number 33 out of 37 countries in terms of our AI adoption. So we're quite a long way behind the curve at the moment, which is a little bit concerning. Mike (00:58:38): Yeah, look, I've been really concerned. We've started another charity, good Innovation, Franklin, because the concern of New Zealand been dropping those international innovation rankings. We've had a bit of a bounce, but look, New Zealand has to change the dial and the message to the government is we need to change the dial. Josh (00:58:55): Yeah, I couldn't agree more. The revolutions that you talked about. I personally have a concern. This is the fourth industrial revolution. Revolution as we're describing it. The first was the industrial revolution that happened in the 17 hundreds powered by steam. The second was the late 18 hundreds, early 19 hundreds, which was essentially the electricity revolution. Then we had the automation revolution of the 1960s, which was when computers went the enterprise into the factory, into the home ultimately as well, and then now into our hands. And so the first one was the most tectonic shift for humans, and we had the rise of the thing called the Luddite. And the Luddite were the people that were accustomed to working in the fields and working with their hands, largely surfs what may also be called peasants, but just that was the kind of class that they sat in at that stage and they saw the invention of the loom and the steam engine as being a real problem for them. So they actually started to smash up the machines and they got known as the Luddites at one point. Interestingly in history, there were more of the king's army in the United Kingdom that were fighting the Luddites than were fighting Napoleon. (01:00:03): So the Napoleon at war was going on at that stage. So it was a real shift and a massive, massive concern for people. And so I think that electricity was probably something we all welcomed. Lighting, heathing and cooking and all that sort of stuff, less of a concern on automation, created a whole bunch of jobs. And so I'm of two minds at the moment myself as well. Certainly going to be a big shift in the middle class knowledge workers. Mike (01:00:26): I guess what our challenge of the country is, we have to create the jobs. There's jobs there to be created, but if we don't be deliberate around that position for the careers of the future, then we get left behind and that's the big risk piece. So we have to be really proactive around it. Josh (01:00:42): Yeah, I hundred percent agree. Shifting gears slightly, so you've talked about the new acquisitions you give people the go out in the company, take your family out in the company, love that. There's also a quote that you had where you had, during the GFC, you gave each of your employees $250 supermarket Mike (01:01:03): Vouchers, Josh (01:01:04): And then you noticed there was a boost in EBIT afterwards. Causation correlation. Mike (01:01:09): Yeah. Look, it's interesting. I mean, I think we never did it for any earnings result. What we did it is because it was the right thing for our people. We posted it to the homes, but I got some handwritten letters back from spouses, which is quite beautiful that someone would go and actually do that. But I've always believed everything's a fruit of culture and it's people first. And health and safety is a fruit of culture, obviously financial, performances, customer delivery is quality and delivery. Everything is a fruit, fruit of culture. So yeah, look, that was one of those sort of moments where you send something and think, gee, you sort of think it's just a cost you're going to do, but actually it does engage your people too. Yeah, I think. But you do it from the genuine reasons why you do it. Josh (01:02:04): I understand. The next shift, and this will be our last, is that a DHD. So you have a charity which is around enabling folk and families that are in that space. So tell more about that charity. Tell us more why you kind of leaned into the philanthropic approach. Mike (01:02:23): Firstly, I believe corporately and individually, we have a responsibility for community. I think it's a really important thing, and actually it's really important to our people and staff as well, but a shareholder is really, really important. So we've got to play our part and I guess the runway foundation, which is registered charity, which is about, I guess giving people a runway for life who are impacted by A DHD. And so that's kind of parent support groups to help them on the journey. Tough and often they've got a DHD themselves too, and after school programs and youth coaching into secondary school and really helping them through that journey, I think. And it really came out of us having children with a DHD, and I guess when this is probably now what runway's going to be 10 years old this year, but there was nothing there was for us. (01:03:27): And there was this great big hole. I guess at the moment, everyone's talking most days, you open the hero, there's an arc about a DHD, and so it's suddenly become kind of a fashionable thing, but it's like if you've really got some extreme cases there, it's a really, really tough road. And so what we wanted to do, I guess it's a little bit of an entrepreneurial thing. You see a gap in the market or a need, you go and try and solve that. So we established Runway, Theresa and I, my wife Theresa's, the CEO of Runway, so leads that team, but they do amazing stuff. They completely change people's lives. They help young people to get through school, through the system, into careers, off to uni and different things like that. And they have waiting lists, people queuing up for it. And I think this is another thing in New Zealand we can do better because people with A DHD and my kids get it from me, but you're three times more likely to run a successful business with of A DHD. That's a global stat if you Google it. (01:04:36): But equally too, if we don't channel them into the right things, they'll get their dopamine hit in the wrong things. And this is probably what we see for some of our prison population and things like that too. So there's a real opportunity to position forward and for us to be a more entrepreneurial country. And really what we try and say to these young people is you've got a superpower. Even for me, I could write a 40 page tender starting 11 o'clock at night, finishing at two in the morning when I was younger. I would just get in the zone and hyper focus and go and smash it out of the park. We probably usually would take someone two weeks to do that. So runway is really important to us and on how we give back in that area. And equally, innovation Franklin is and the other charitable stuff we do as well. Yes, Josh (01:05:29): Yes. Superpower. A DHD. I love that we both share a membership of the organization called Entrepreneurs Organization. And it's often a topic of conversation that people are like, I think I might be a DHD. And I'm like, well, you probably are if you think that you are. And by the way, it's a really helpful thing to be able to succeed and what is it to be a very difficult world being a founder of a business, being an owner of a business. So thank you for the work and the resources that you provide into that sector. It's invaluable. Mike (01:06:00): Yeah, look, it's really, really rewarding. It's neat, the impact we can actually have. Josh (01:06:06): Yes. So I'm going to finish with one of your quotes and then ask you about the alternative career. You famously said, don't participate in recessions. Tell us more about that. So how do you seize opportunities? How do you grow during times of economic downturns? And Mike (01:06:25): Look, I think it's very easy to take on all the negative stuff that you hear on the radio and the tv. Sometimes you just need to turn the radio off. I remember years ago, there might've been the GFC, there was a commentator that they'd bring on an expert. And I remember messaging ZB to say, look, do you think you should really have, because a person's so negative and doom and gloom, it's just pushing the country more into a hole. I guess what do we feed our mind with? We're going to be above the line or below the line. And I think, yeah, so our mindset's really, really important. I think sometimes we can talk ourselves into a deeper thing in our own business. And so I think we have to have our own dashboard on where we get our business confidence from. And we do. (01:07:17): We've got about 13 different things we look at. But yeah, I guess what you hear is relevant or it's important, but yeah, again, sometimes you just need to turn it off. What we tend to do in the tougher times with the economy is we invest in our business, great time to acquire. We use our balance sheet, let's go out to grow, right? Let's double down, let's go faster because we'll put our foot on the accelerator. Other people take theirs off. Let's put our foot down and let's go for growth. And that's what we talk to. And that's generally what we've done the last few years is what we've always kind of done. So how do we keep on growing? How do we invest in our future? How do we position for the future? Josh (01:07:58): Yes. Now these days become pretty present and aware to the food diet that we have. And we know that fat is not bad. It's actually pretty good. Sugar is probably the devil if there was one. There's a whole variety of different types of gluten-free, fodmap, paleo, it's all these different diets. So we know about the food, what you're talking about there is what I refer to and others as the information diet (01:08:22): And being really conscious about what it's that you read, what it is that you hear, and the circles that you move in, in terms of the information that flows around. So personally, I 27 years ago stopped reading the newspaper as I had a moment of self-awareness, which I didn't have a lot of in my twenties when I would pay attention to how I felt after reading the Herald. And I would feel terrible because it's all bad news. And so I literally stopped consuming news. Obviously I consume business news and mega trends and what's going on, but that's not car crashes or genocide or the horrible things that can happen around the world. I don't consume it. And people say, but how do you know what's going on Mike (01:08:58): In the world? I'm like, if it's big enough, people will tell me. Yeah, exactly. One way or another, right? Josh (01:09:02): Yeah, yeah, absolutely. And if it's not that big, then I don't need to know about it. So that's my personal view on it. Mike (01:09:08): Yeah, look, I think too is I think I often say sometimes you come home from work and you've already had a tough day and you're just kind of overwhelmed by life. Sometimes you just need to go to bed, walk in the door and just go to bed. And because a tired mind is fertile ground for negativity too. And so mindset is such an important thing on how you approach the day. But I always love that tired minus fertile ground for negativity when you wake at two in the morning or you don't get sleep and everything's worse. And knowing our own tank level is really important and all this type of stuff on how we navigate these times, Josh (01:09:51): I've never heard that before. A tired mind is fertile ground for negativity. I love it. I'll add something to that, Andrew Huberman, the podcaster I heard recently was talking about the 3:00 AM thoughts when you wake up and there's some stress or anxiety in your life. And he says, I refuse to believe anything that pops into my head between midnight and six to 6:00 AM I just refuse to listen to that narrative. It's not true. It's not real. I'm like, that's gold. I've used it since then. Mike (01:10:18): It's absolutely. So it's interesting now that whole journey. But look, I think again, these type of times is, I mean, I think right now businesses should be investing in getting moving, right? That's what I think. Josh (01:10:30): I agree. Government and businesses should be investing. If we look at back at major recessionary times, great depression, for example, the countries that were able to spend their way out through investment in massive infrastructure projects, including New Zealand actually. And so they're partly government, but also definitely individuals rather than leaving money on the sidelines, don't buy another dozen houses because they're at a cheaper price. Invest in businesses, create jobs, and build the Mike (01:10:54): Economy economy going, Josh (01:10:55): Yeah, a hundred percent. Couldn't agree more. It's our responsibility. I love the fact that you've talked about responsibility a lot as well. And so two parting questions for you. The first is, are there any kind of companies in New Zealand that you're quite excited about? There might be things in your stable, there might be things that are outside, so businesses that have got you a bit interested and excited right now. Mike (01:11:16): Look, I think, I guess what we are constantly looking at is what's our next stage of our growth in the business and what kind of fits with that. We do identify a couple of m and a targets in that sort of space on how we position forward. But look, I love seeing the rocket labs and these different types of things that are happening, and I have so many ideas in those different areas. It's been the entrepreneur in me sort of wants to go and do that. The business person in me has this control some, a bit of both, yeah. But yeah, Josh (01:11:48): If you've not seen it, there's a wonderful documentary called Wild, wild Space, and they profile, SpaceX is obviously the big monster in the room. And then there's three smaller companies that they profile and one of them is Peter Beck. So Peter Beck with Rocket Lab. I'm not sure if he had the opportunity to meet him when the EO event happened, but Peterman got a hat from him. What an incredible individual he is. But there's an MOUs line in there that's just so worth watching. The documentary is fascinating, but some really great characters in there. Last question for you, Mike. So in the alternate universe, you're an entrepreneur and you've become like an m and a kind of entrepreneur as well. In the alternate world, the alternate universe where there was another career that would've brought you deep satisfaction and given you meeting and purpose on this earth, what would that career have been? Mike (01:12:34): Probably, it might sound weird. It probably would be just be doing community stuff actually, because engaging with people and just being real and authentic conversations and actually giving back is actually quite spins my wheels really. It's an important, I mean, I was very much on a corporate career. It's just that one day I sort of woke up and thought, Hey, there must be more. Alright. Yeah. But I see I didn't really stay more than in the last couple of gigs, a couple of years in those roles because it was sort of like, I guess that's that entrepreneurial too. You need high change. Might need high change. Josh (01:13:08): Yeah. Mike, we've covered an immense amount of ground. I'm going to call us the masterclass in m and a because it's really been super insightful for anyone that is looking to buy a business, but also those that have to have better understanding as to what the process of people who are experienced will go through with them when looking at their business. You've also dropped in a bunch of gems about being a better human being, the tired mind being fertile ground for negativity. That's just living a better life and also demonstrated a great humility and strong characteristics and traits around leadership. So Mike, I really, really thank you for coming on the show today. Mike Marr, MARR at LinkedIn People Okay to do a connect with you on LinkedIn. Absolutely. Great. And TPT group is the name of the organization. So Mike, thanks so much for coming on the show today. Mike (01:13:56): Thanks for having me. It's been great. It's been great. Great conversation. Thanks Josh. Josh (01:13:58): Pleasure. Cheers, Mike. Mike (01:14:00): Thanks.