The following is a transcript of Episode 9 of Return on Podcast, the show where we help e-commerce sellers improve their ROI in business and in life. For more episodes, subscribe to our YouTube channel or listen on Podbean, Apple Podcasts, and Spotify.
All right. Welcome to Return on Podcast, where we talk about the experiences, obsessions, and habits of the most successful e-commerce entrepreneurs. I’m your host, Tyler Jefcoat, and I wanna welcome you to this episode of ROP. You’ve heard of return on investment. Well, this is Return on Podcast. In today’s episode, we’re gonna talk about how the current bearish market is impacting business values, and more importantly, what the heck do we do about it? You know, every weird market presents an opportunity to us as we’re building our companies. And so let me go ahead and bring in today’s guest, good friend of mine, Chris Shipferling. Chris is one of the managing partners at a leading digital investment bank called Global Wired Advisors. Chris, I love working with you buddy. We’ve done some complex deals together. We’ve helped our clients make lots of money on the market over the last few years and welcome, homie. Glad you’re here.
Chris Shipferling (01:07):
Yeah, thanks, man. I remember when you first were telling me that you’re gonna do this podcast and I was hoping you would invite me on, so I am so thankful to be here, dude.
I appreciate you saying that. It’s funny. For those of you who are, relatively new to the show, we, Nikki and I sent out invites to some of our closest friends, and Chris, I think like literally signed up that day. So it was like a little bit affirming to be like, okay, thank God we’re gonna have at least one episode.
Right. I’d come on it. I’ll just be your cohost if you didn’t get any other responses, man, we’d just shoot the breeze about the space and the industry. That’d be fun.
Well I’ll yeah, that’s right. Batman and Robin here. So listen, we’re gonna talk about bears, we’re gonna talk about the bearish market, the capital markets are a little bit gooey right now, but before we dive into that, I wanna hear a little bit of your story, Chris, just for the sake of the audience here. You’ve got a ton of experience with consumer products, manufacturing, brand building. Like,, what story pops into your head, if one does that would help us understand what a great brand looks like in your opinion right now?
Yeah, I mean, it’s a great question. My experience in consumer products has been in real, kind of, call it true, traditional CPG. You know, I worked in a very, I’d say ironically small, but very like consumer product, product innovation-driven industry, which was baby products. You know, in order to continually innovate around safety, we were constantly looking at ways to make the car seats better, more comfortable, and obviously way more safe, right? And so safety when it comes to cars, when it comes to baby products, in particular car seats, you know, it’s not an easy task at all to come up with innovation and then also apply that innovation through a manufacturing process. It’s really hard. You need a very competent, capable, experienced team.
And then even just looking at, you know, for instance with strollers, which was another – you know, I worked in the durable good side, so on baby products, you’ve got the furniture side with that kind of leads – a lot of adult furniture companies sell baby product companies. So there’s a lot of crossover. There’s a lot of toy companies that sell a lot of like toys and accessories in the baby – so there’s a lot of crossover with toy. And the durable goods, you know, I sold strollers car seats, high chairs, play yards, et cetera. And just really, really kind of diving deep into how you innovate through even just the fabric that you’re using, you know, using breathable fabric and sourcing that type of fabric. And so, you know, that was kind of how I got thrown into all of this. And I first started with a smaller company that was a Japanese brand. They owned 50% of the market share in Japan. There was two, Aprica and Combi, and I worked for Combi. So Aprica owned 50%, Aprica owned 50%.
And then Maclaren actually came in, which was a brand you may have heard of before when you were having kids, but they were a high end English brand. They actually came in, and trend hits Japan, like you wouldn’t believe. They took 20% market share in one year, which is crazy. So anyways, total sidebar. So yeah, I kind of got thrown into, you know, traditional consumer products. So I was, you know, instead of me having to take a couple steps back and have contrast, you know, I didn’t work with any brands that were – and I had no exposure to brands like, or companies like I do now, which are finding product off Alibaba, it’s a lot more commoditized and they haven’t taken the steps to make themselves differentiated, innovative, and building a community. It’s really about how do I exploit white space in a category based on potential data, murky data that I’m finding. I need to get the lowest price so I can commoditize this and just churn out profitability.
So really I kind of learned about brand by osmosis and what a good brand looks like, you know? And so the tenets for myself as I worked through Combi, I spent 2003 up until 2009 there, was running their sales and marketing before I left. And then I switched over to Evenflo, which was a much bigger consumer products company close to a half a billion. And they were in all types of categories. They were one of the original bottle makers, from 1920, I think is when they started making actual baby bottles. It was originally a rubber company actually. And yeah, that made the little nipples that went on top of the baby bottle, so. And really going there, that’s when I started to get exposed to a much larger organization and what it’s really like to take something from all types of different functions, working cross functionally, I worked, you know, I worked almost hand in hand with all of our product development team, our engineers, our industrial designers, our fashion team, because when it came time to place a program into Babies R Us, or a Target or a Walmart or a Sears and a Kmart, RIP, you know, you had to really think through how you were going to position yourself and leveraging the brand that you’ve already built to position yourself on a shelf.
It took a lot of real critical thinking. And I think that that’s the tenets, in my opinion of developing brand, it’s something that’s sticky and something that people want to, they have an affinity, to have a gravity towards that. Right. Because you’ve done something unique, you’ve positioned, you’ve differentiated yourself. And I think what you find a lot in the Amazon space is the differentiation is really coming from more like, “well, I’ve got some visual identity and I’ve got price” and it’s like, no man. Like innovation, that’s the stuff that really drives a lot of, I’d say, brand awareness. And so kind of working through that – and after that, I went to a premium company in Barcelona, and it was a family-based company, but it was $120 million business, global business. They were around – Mr. Jané was the first I think the first guy to create a stroller in Spain and so really cool history.
Yeah. Like I think the company has been around since like 1924. I actually worked directly with his great, great grandson, Axel Jané. Yeah, cool experience. It was a little bit of a miniature version of what I experienced at Evenflo, but I got to see, I got to see premium product. And how you think through that? I mean, they were selling strollers – they had a carbon fiber stroller, Tyler, that they sold for $1,800 where you could engrave the name of your kid on the side. They made it once in 24 karat gold, Messi had that product, like all the Barça players had that product. So to really see, you know, all of the tenets, the innovation and cross-functional activities were identical. The difference was how do you now position yourself as a premium brand. And so that was really interesting.
So when I, to answer your question, I gave you a little bit of a long-winded, “hey, here’s my story in business,” but this is how I’ve learned brand. You know, when you’re working with a real PR team to actually build community for your brand, you know, when you’ve, when you develop a position for your brand, when you develop a brand promise, you know, especially with baby products, because you’re dealing with something so precious and so delicate, and you’re speaking to mom. That’s who you’re speaking to for the most part, right? Dads are slowly getting more involved, but you’re speaking to mom. Right? And so that’s really where, that’s where I grew up in business was just spending a lot of time, and I spent a lot of time in China seeing how the product was made, seeing what it was to go through, you know, call it quality control, QC, QA. You know, I got to go watch the car seats go down – we had a sled both at Jané and at Evenflo, which is the same things they use to certify like Ford and Chevy and GM. They all use the same benches. And I got to see like in slow-mo, and we would do these hammer tests where we would, literally a giant hammer would hit the side of the car seat. What type of impact was made? How much would it hit the child’s face? I mean, it was cool stuff, man.
It was pretty awesome, I gotta say, and seeing manufacturing up close and personal, that’s the other thing. Like we’ve got in this space a Mexico trip coming up, we’ve got, you know, a China sourcing trip that’s occurred in the past. And man, I guess I just consider myself very, it’s very humbling to look back on my career, and I didn’t realize it then, but the building blocks I was actually building to go – I mean, I got an MBA in manufacturing by spending as much time in China as I did, just literally talking to the, literally working with the factory owners to understand how we can develop something together that can sit on a shelf at a major retailer in the United States and actually sell. I mean, I’ll say this, and then I’ll shut up and we’ll move on.
We were at a factory in, just outside of Hong Kong in Dongguan. And at the time we were it was – I was with the president of the company at Combi. We found this walker, you know, the little baby walkers? That was a three-in-one. So you could actually use it as a baby walker, then the tray, the front came off, and it was a tray, so you could actually use it as like a little snack time, and then the back actually folded in, and it could be used to help the kid learn actually how to walk. Super innovative, really expensive. We made a couple tweaks to it, put it in Babies R Us, and that thing started selling during Christmas 1,800 pieces a week. I mean, just flew off the shelves, right? And they struggled. So these guys were guys who sold to some of the largest brands out there, like Safety First, Costco, Evenflo, Graco, et cetera. They rejected this product, and we were like, no, actually, if we take it, and then we strategized on how we would change it, pushed it through the shelves of Babies R Us, it became one of their better selling products for that Christmas season. So it’s –
So beautiful, dude.
It’s fun stuff, man. I’m telling you, like, it’s so fulfilling genuinely. I mean, it’s why brand owners get fulfilled every day that you speak to because they’ve chosen something, they’ve created innovation, and they call it their baby. They put it through a great platform called Amazon, and then they refresh, every second, the sales on their seller app, and they get to see the fruit of their labor. It’s –
Actually, it’s really funny. It’s funny you say that Chris, ’cause I was talking to a seller today that just sold his business for a few million dollars a couple months ago, and he says he’s suffering like withdrawal symptoms from that like refresh your sales ’cause now he is like, what do I do with myself? But it’s – you mentioned three pillars. You talked about like innovation, differentiation, and then building community amongst your audience. So you’ve worked with these larger companies. I would imagine most of the folks that would listen to this particular show are trying to figure out how we could practically apply one or more of those to more of the, like $1 to $20 million brand. Like in your mind, if I were a CEO wanting to build enterprise value in my brand, I’m not Graco I’m not Evenflo right now. Like how would I, how do I, what should I focus on? What should I be doing to really build brand equity if I’m trying to?
Well, I think one thing that no one wants to talk about, and it’s a little bit taboo, because we’ve, as service providers try and make it easy for everyone. But the real, the reality is building a good brand is not a prolific exercise. Period. It is not for everybody. Finding product to sell, to arbitrage, to put through a Walmart, to put through Amazon, more people can do that, but to really build a brand in consumer products in particular, I just, it’s not for everybody. So let’s start there ’cause I think that kind of sets the tone. Right? And then really from there, I mean, every brand that I know that has ever seen any level of success, and please someone, I would love to hear from the audience that I’m wrong, but it’s always in consumer products, it’s bred from product innovation, period.
It’s something that they created that set the world on fire and put that particular person on the map. We could start with almost insert any brand that is out there. Right? Everybody wants to talk about Apple. Well, how did Apple come on the scene? They were the simplistic computer. Right? They made everything very easy and very simple. Then they created the iPod, right? Once Steve Jobs came back. And by the way, they were also a massive mess in the nineties. Like, everybody has read all the different case studies on Apple, ’cause they’re so easy to pick on. Then they created the iPod and then the iPhone and it was game over, basically. Right? But how did they, how do you create that? How do you even create the community? Now they – not only did they just create a bunch of product innovation – and in some ways actually, they didn’t. That’s a whole other separate story because they copied most like some Samsung stuff. Right? And some Android features and benefits.
But by doing that, they actually even created this community of us versus them. I’m an Apple user, and I’m proud of it. I’m super proud of being an Apple user. No one walks around going, “I’m an LG user, bro. I’m so proud of that.”
You know, it’s like back in the day it was Motorola. I mean you and I remember that, right? The old Motorola flip phone, you know, so, but anyways, you know, hopefully point well taken. I mean, look, it’s very hard work. I think in brands that are one to 20, the other good news though, is there’s a lot of access now to helping you achieve that product innovation, that brand, call it that brand and product innovation and building out that community. I mean, we’re in the 1099 universe now.
I mean, being able to find someone who used to work at even McCann Erickson, who wants to work with small businesses – I mean, look at your career, man. You were a CFO of a healthcare company, and now you’re helping sellers anywhere between, you know, $500,000 of revenue up to $20 million, $50 million of revenue, you know? It’s like more and more folks are leaving that large enterprise world, coming down as service providers, and it’s just creating a lot more access to folks who wanna build a brand that’s between one and 20. But dude, I always, I hang my hat on product. I saw it firsthand throughout my entire consumer products career. Anytime there was innovation, things just flew, and then the brand just, it got on the map.
And so thinking about like these micro brands, I think the wisdom hidden in what you just said is we need to actually listen to somebody that matters to us, whether it’s that 30-year-old mom that’s just had a baby or whether it’s somebody else that’s has some affinity to us and actually do something that the big guys can’t be nimble enough to do. I think that there’s still an advantage to the micro brand, and the micro brand can pivot. And so the answer, maybe, is like, do it, like do the innovative thing, test the new products. And actually, ’cause you can almost like build that community relationship with her, with your customer, while differentiating while innovating, if you just ask her what she wants and then deliver it in a new way. Or –
Yeah, yeah. That’s right. Keep going. I’m sorry Tyler, go ahead.
No, no, no. I was gonna say, or you’re kind of stuck with – and again, there’s nothing wrong. There are lots of like let’s call, ’em like supply chain arbitrage brands out there where basically they’ve identified ways to navigate the algorithm, source their products, make a little bit of money. The problem is is that that margin in that business is continuing to get compressed almost like drop shipping margins were compressed five years ago or like just selling a basketball goal that you bought from somewhere on Amazon was compressed 10 years ago. It doesn’t mean that no one’s gonna make money as a pure Amazon private label FBA brand.
It just means there’s gonna be less of them, and it’s gonna be more difficult.
It is. I mean, and Amazon is making the video game a lot harder. You know, they’ve – it’s very clear they want you to focus on brand moving forward. That brings value to the shareholders because it brings better enterprise-level brands to the platform, and advertise, which of course is really where they wanna try and make a lot of their cash. And they’ve been doing a lot of cleanup as we all know, and everybody listening, they’ve been doing a ton of cleanup, and I think they’re really the vector here is let’s get – let’s really focus in on being brand oriented, brand focused. And I think that’s, I think to your point this – right, I mean, look, arbitrage will always be around you know, look at a bad example, like baby formula right now. I mean, that’s a huge arbitrage opportunity. And anybody who’s doing that, that’s listening shame on you, but I’ll just, that’s totally aside .
But arbitrage opportunities will always be around, finding a product on Alibaba, buying it in volume, and switching from product to product. And when I talk to folks that are doing that and they wanna understand the enterprise value of their business, I say it’s cash flow. So take the money, and you know, here’s a Grant Cardone course and go buy some multifamily, you know, units and go buy some land and go buy some other assets, but you don’t have a valuable asset. You have a cash flowing asset. And that’s cool, it’s not equitable. It’s just cash flowing. And by the way, like I said, that’s – in this race towards wanting to sell the businesses in the past year and a half, two years, and really it’s just, I called it the Pacman craze, just gobbling up everything, you know, people did get lost in the fact that like, yeah, now the craze is over and it’s like, it’s so cool to go back to being a cash flowing brand. Like that’s totally fine, man.
But I agree with you. I think that, you know, and moving forward, it is, the barrier of entry is gonna get harder. I think brick and mortar, if you’re gonna build a brand, brick and mortar has to be part of your strategy, omnichannel has to be part of your strategy. It does attract a different base of acquires if we’re talking kind of you know, an actual transaction or liquidity event. But I mean, look, if you, the good news is if you do these things, A, if you’re building a community, you’re talking to your community, which Amazon does make it difficult by the way. But there’s ways to get around that too. You can build a TikTok and social media presence and you can talk to your audience directly through that. You can build an email list. I mean, there’s, there’s ways to talk and interact.
The only way you can do that though is if you give them reason to do that. So you’ve got something innovative that they want to talk to you about, they have questions about, they’re interested in the next thing that you’re coming out with, et cetera. But if you’re building that, you’re building the brand community, you’ve got a real position that you’ve taken the time to think through, you’ve got really good messaging, you know what you stand for, you’re innovating with your product set, you’ve got a really good product roadmap, you’re starting to diversify away from just one, I wouldn’t even just say Amazon, just one channel channel concentration, you’re building a very valuable asset.
And Chris, you mentioned something that’s really true a minute ago, which is that it’s okay to know yourself. Like there are certain product types, there’s certain brand types, which are going to naturally lend themselves to giving you an ROI on spending three years, building a funnel off of Amazon. I would say baby products is certainly one category where that could be the case, ’cause it’s easy to command a premium by differentiating with the customer, but there’s also lots of products out there, and you know, Chris, you and I know lots of eight-figure sellers who make a lot of money who don’t need to go hang a Shopify site because their product is commoditizable enough in the way it’s purchased that actually gaming the algorithm is probably better than trying to burn a bunch of cash. And so to your point, for that guy or gal, she needs to make a ton of money and go buy real estate or be happy making half a million year profit, that’s okay.
And I may only get a 2x multiple if I were to put this business on the market, but it’s okay because I think you can blow it if you try to be what you’re not. Right? So just understand who you are. This is one of the first comments you made, Chris, was am I a brand builder? I might not be. If I’m not that’s okay. Be who I am. And then the second kind of kind of element to it is does my product offering lend itself to being differentiatable? Can I actually create a customer experience where they will select me regardless of whether Amazon is slapped on the box also and –
Right. No, that’s exactly right. And look, I think there’s a lot of, you know, and there’s a lot of resources out there if you start to really look for them, if you want to build a brand. Like if you really want to build a brand and like, okay, this is what I’m going to do. Well, where do I begin? Well, let’s first start with these five things that you have to do. Like I’ve gotta, it’s just business plan 101. I’ve gotta choose my product. Where am I gonna sell it? What’s my price go? Through the four P’s of marketing, which is now five, by the way, because they added People as the fifth. And so, you know, it’s kind of going through those traditional things you would do as you’re even doing a, you know, you’re doing a project in business school, right? And B school you’re, you do these types of projects, you create a business plan. Can it be successful? Everybody pokes holes in it, et cetera, you know? And so exactly what you just said, man. Know thyself, right? And you know, some people have it in ’em and guess what? Some people don’t. It’s cool. Some people are just really good at identifying those commoditized opportunities and exploiting the algorithm, exploiting the white space. Have at it, man. You’ll make a lot of cash.
So maybe if we had to name this episode, maybe it’s called “Know thyself and know thy market”. So let’s pivot talk about the market here for a minute. So we have had some bearish pressures that may have implications on our strategy. What are you seeing right now, Chris? What’s happening in the marketplace?
Yeah, I think what’s happening is, I mean, obviously from a macro perspective, you’ve got a lot of, I mean, just go listen to any earnings calls, right? If you listen, the most germane earnings call was Amazon’s in recent history. You know, you listen to what they are using. I call ’em excuses, but what they’re using as reasons for why they are missing their targets. You’ve got inflationary, which is not transitory. We all hope it will be, but it’s not. We’re staring down, you know, a Ukraine-Russia war that is affecting macroeconomic, not only views, but actual activities. That’s not helping. You’ve got, you had an overheated stock market for a long time, especially in tech, and that’s now bleeding out. I just read a stat that hedge funds, Q1 have put a tremendous amount of money out of tech and into energy.
You know, so you’ve got a lot of macroeconomic headwinds, right? Asset classes are getting battered. People are looking for non-risky assets. That’s why Bitcoin has dropped as much as it’s dropped, and – whatever, we won’t get into, will it continue to drop or go back up? I think long term, crypto is gonna be just fine. I think long term, all of this is gonna be just fine. And so that’s really the outlook. Right now, we’re going through a massive correction. We’re feeling it. We’re going back down to the same clip of growth in e-commerce that we had in 2019, but we’re at a higher grade. So like while we were growing here and COVID did this, and then we corrected here, we’re not back to 2019 levels, then growing again. We’re actually back higher than ’19 levels, but we’re growing at that same clip.
And so while we’re going through this correction and everyone’s feeling it, there was a lot of mistakes that were made, especially in – and I’ll speak just to Amazon sellers. There was a lot of, there was a ton of liquidity that chased anything, anything that had profit and product on Amazon. And there was a lot of COVID bump effect that was being ignored in the sake of “I’ve got dry powder or capital. I need to deploy. I’ve gotta go buy a lot of things because I gotta go make these guys who I sold very happy.” And what we’re discovering is it’s a little bit of the classic Wall Street story, right? Smart finance guys who can’t operate. And that’s cool, man. Now they’re, but they’re still smart finance guys, and they’re realizing a restructuring needs to happen because a correction has happened in the market.
But the first thing they’re doing is they’re really reallocating and repurposing that dry powder away from acquisition debt towards working capital. And they’re also looking for other avenues for that working capital. And so what’s happened as a result, as we all know, Thras has had a major correction. It was all over Business Insider. There was a lot of detail about that, but let’s take them as the bellwether. I mean, look, they’re not going away. A lot of these guys won’t go away. They’re going to be here for a while, but the way that they purchase in the next, call it, 12 to 18 months is gonna look a lot different than the past 12 to 18 months. They’re going to be purchasing a lot more like private equity. They’re gonna have a mandate, a new mandate, and they’re gonna have probably a bit of a different thesis.
And within that, they’re going to be looking at acquiring targets and assets that look a lot different than they did in the past. And so, hey, as a seller, use this time where lots of people are not getting deals done, right? There was this race to the aggregator, and the aggregator shut the front door. And now that they did, turn around, go to Seller Accountant, everybody listening, get your books in order, right? Take the time to actually organize yourself, take the time to, you know, call our friends at Escala and MultiplyMii to fill in some gaps in terms of personnel that’s needed to scale, go to our friends at Escala who scale e-commerce businesses and teach you how to operate better, go to our friends at say, Seller’s Funding, and get some really good working capital for your business.
Put your head down right now. It’s cool. And you’re hearing that from a guy who, you know, is a co-founder of an investment bank, where all we do day in day out is sell side advisory where we actually sell companies. So listen to the guy who’s doing that day in day out that, hey, it’s okay. Right now, fix yourself. Know thy self, know thy market, and fix yourself because of it, right? But hey, by the way, if you got a great business and everything we’ve been talking about in the beginning, and it’s seeing a lot of growth and you want liquidity, by all means, let’s have a conversation, but you know, I think it’s okay to put your head down during this bear market. It’ll pass.
Yep. And Chris, actually, you bring up a pretty good point there. Like what I’m seeing with my clients, and a couple of them you’ve talked to recently, is if you are not premium premium, and what I mean by premium is you have a clearly differentiated brand with a clear connection to your audience and a clear innovation in your products, you may be better served to hold right now while the capital markets are weird. However, if you are that rare you know, Chris, you and I can both think of a brand that really had a great Kickstarter start that just has outrageous margins and has really crazy differentiated project. Like, so guys like that guy may wanna still look, ’cause there’s still a lot of dry powder out there now clamoring for these most premium above board deals. And I think if you fit that mold, it may still be a time to go talk to Chris at Global Wired because there’s still enough money out there where you’re gonna now stand up – to your point, the theses of these investors are, they’re not just changing, they’re actually clarifying.
I interviewed 30 or 40 of ’em a year and a half ago. And by and large, they were, they would use words like agnostic during my question of “what is your investment thesis?” “Well, we’re category agnostic, and we’re a platform agnostic.” And which just means “I have no idea what I’m trying to buy here.” And now that they’ve had some opportunities to diligence, and sometimes poorly diligence some of these assets, they are smarter, like you said. They’re bringing in better operators on the team. Some of them might be realizing they bought some assets they wish they hadn’t bought, and that’s just –
No, that’s exactly right, man. And to your point, I mean, let’s pick on that one that you just mentioned, the Kickstarter one. I mean brand innovation. He created a community. He did it, he’s doing it the right way. And you know, we told him point blank, you’re a strategic acquisition, man. Like you need to go, you need to bust through and permeate away from this current set of liquidity that’s chasing all the Amazon businesses. You are a PE potential strategic acquisition, no questions asked. So yeah, and there are plenty of businesses that are out there, and folks that will be listening to this podcast, who have businesses like that. I just think that look, you know, if you are eager to hit the bid, and “I’m an Amazon business, and I just wanna sell, and I want my liquidity,” I think, look, that’s a tough road, right? Very, very tough road for you right now. And I think it’s time for you to, you know, anticipate where the hockey puck is going to be in the next 12 to 18 months, put your head down, hire some really, really great people, great resources around you to really improve on the brand and make you an extremely valuable asset in the next year or two. So, and that’s okay, man. That’s okay.
That’s actually a great way to, by the way, bet against human emotion, like great investors are great at betting against emotions, right? When things are really bearish, when things are bad, my question is how can I be investing capital right now to make the end goal better in the future while everyone’s clammed up? What can I be investing to improve my future? And there may be some things you guys can do for your brand. So Chris, let me ask you a question. So somebody listening to this has a brand that they feel like, wow, I think I actually have an innovative, differentiated product. I’m profitable, but I’m kind of, I’m nervous about the market, and I’m thinking I might want to get out. Like, awkward question, dude, but most people are listening to this have no idea what an investment banker is. Like what would be, like in your mind, like, obviously you’re gonna have an opinion here, but what is the difference between a broker partner and an investment banker partner, if I was gonna try to take my product to market?
Yeah. I think, look, you know, when you talk to a standard business broker, I think they try and commoditize the way that deals are getting done and the way that a business goes to market. Right? And I think for the most part businesses that are what we would consider mainstream, yeah, it’s fairly commoditized, you know? You don’t have to put nearly as much effort into the complexities as you do as you go up market into what we call lower middle market, which I’ll define in a moment and say middle market, right? So brands and businesses that are a lot like what we’ve described, they’ve got complexity to ’em, you know, they’re going to a different type of asset class. They’re going to a different type of acquirer. You know, that requires a level of, I’d say, pedigree and a level of being able to assimilate a business by every function, break it down, and then articulate the opportunity of that particular asset and why this fund, this capital provider, should even care about wanting to look at it.
And I think that when you really boil it down, if I can make it, if I can try and make it simplistic, I think it’s in the types of people who are investment bankers versus business brokers, their experience, their career experience, the way that they view businesses, it’s a much more strategic process versus a much more commoditized transaction-driven process. And within that process, there’s, I’d say, a lot more heavy lifting than an investment banker is going to do in the process versus a call it “business broker.”
I mean, business brokers have been around for a long time. It’s a lot like real estate agents, you know? And they’ve got a very specific method, and they’re needed. They are needed, they’re needed to, you know, introduce you to the right buyer, potentially warn you of some landmines, kind of talk to you about the market. But you know, when you start to get to a specific level, and the brand starts to become more complex, it just requires a different type of provider to do that, man. I mean, it’s a lot like in any world. I mean, you know, if you’re a, when you’re a Fortune 500 company, you know, you’re going to KPMG to get your audit done. You know, you’re going to PWC to get your audit done, you know? And so, but if you’re, you know, a business that’s doing $3 million of revenue, , that’s what the audit costs, you know, is $3 million to go to KPMG.
You get my point. Trying to just kind of fit it into something of an analogy here. I think, you know, that’s really the main differences. And really why does it matter? It matters because your outcome looks entirely different. The way that your company is packaged, the way it’s positioned, the way it’s presented, types of people who are presenting it, everything now looks wildly different and allows you to optimize the process because if you have something like what we talked about in the beginning, you have to go to a different type of acquirer, and those acquirers expect a specific process to be done in order to even look at the opportunity. So hopefully that makes sense.
No, it does make sense. And like, just to bring that practically home a little bit, I mean, Seller Accountant, right, where we’ve worked with some really good brokers, we’ve worked some that we haven’t been as pleased with. We’ve worked, but we’ve only worked with one investment bank that we’ve honestly been really happy with Chris, and it’s been your outfit at Global Wired.
Appreciate that, man.
You and I have been in the trenches, dude, with, I mean, a number of deals and several of the kind of highest value, highest multiple, most complex, would’ve been hairy to get through diligence, happiest end result for the seller. Those, several of those deals were deals that you and I worked together on. And so I just you know, that’s right. The definition almost – like, I was gonna say my dad’s a commercial real estate broker with a CCIM certification, and he works on the most complex real estate deals because he can provide a superior amount of value to that more sophisticated investor, which differentiates him from a guy that just got a real estate, like, agent license in the state of Georgia or wherever they might live. And I would imagine –
That’s right, that’s right.
That an investment banker’s kind of similar. Is that, am I right about that?
You are. And I mean, look, we encourage people all the time: call everybody. You know, if you’re looking to go to market – I mean, first off, you know, people who have a more middle market-driven business, they don’t call business brokers. They call investment bankers because effectively, you know, in most cases, they already knew that just from their career experience. That’s just what you do. Or they’ve had private equity reach out to them, and private equity even will encourage, don’t go direct with us. We need some, we need an emotional middleman. Like, we need someone in the middle for sure, type of thing. But we encourage everybody, look, go talk to everyone. It’s fine. You know, and I think you, if you ask the right questions, you’ll start to see the differences and like, oh, by the way, you know, like we have a great relationship with a very good mutual friend of ours, right? I love that guy to death. And I think he’s wildly smart. I think they drive an incredible process for what they do. And we work in great symbiosis.
And I encourage people to, hey, no, this is a better process. Like, this is a much better – use this process. You know? Our process is not going to be the right one for you. And I also, like I said, I encourage everybody to go do that. Talk to everyone. You’ll see the difference, man. It’s like calling, you know, when you, this analogy will sound arrogant, but when you’re talking to the guy who’s selling you the used car, you know, versus the guy who’s, you know, selling you the Lamborghini, , you get a, you pick up pretty quickly that that guy has a much different view of the world than the guy who’s the used car salesman.
You know what I mean? It’s just kind of simplistic at that point, but anyways, hopefully –
I love your advice though. Like you want someone to shoot you straight. You wanna really interview your options right now while it is kind of let’s clean up and get things in order. Probably good to have those discussions now for maybe a transaction in a year. You know, it doesn’t, don’t wait until the last minute. Hey, listen, I wanna honor our time here and our guests’ time. I wanna talk about -, so close business for a second. Hard pivot. By the way, you’re talking about like how much you love to have your Apple phone versus your, you know, LG phone.
We’re gonna talk about golf for a minute. And I just wanna say, I don’t have like Wilson golf clubs. So I do actually have PING golf clubs, Chris, that I enjoy. Like, you play quite a bit now, man?
I do. I, actually, I hit, I bought some, oh gosh, the SIMs, the TaylorMade SIMs, and I bought a TaylorMade driver. I just, I renovated my entire golf bag. My son’s really into golf, and my father-in-law actually bought him a set that of Top Flights. I’m gonna buy him – so he wants PINGs actually. And you know, the reason why he wants PINGs is because they give a set to every veteran. I don’t know if you knew that or not.
I didn’t know that.
It’s so, they have such a cool story, man. Yeah. And so, yeah, they’ve actually, we’re part of a golf club. They call themselves a country club. It’s not, it’s not. It’s way too unpretentious for that, so I just call it a golf club. But PING is actually, I think, supposed to have their demo day out there pretty soon, and my son is just like, oh, he’s so excited. But yeah, it’s been something where golf has been something that my son and I have been able to do together. He got into it about a year, just over a year ago. Dude, he kicked some rear end, and he worked at it. He went to his lessons, got a ton of lessons. And he actually like first year in playing golf, he made the golf team, man, and like won the, he won the Most Improved award. I was so proud of him. He was starting out shooting like 59, 60, 61 on nine holes, and he went down to like 50 by the end of the season. And now when we’re playing, he’s like shooting between 45 and 47. I mean, I’m just like, he’s kicking my freaking tail, man. And I love it.
I’m gonna be playing in a charity tournament here in about three weeks, and I’m gonna be honest with you, I have not picked up a club this year yet, which I’m not happy with, and I will for sure not be breaking – now it’s a scramble, so actually we will break 50 on nine holes, but it’s only because I will not be the one carrying the team. It’s like anything else. Like you do it, and you get better, right? I mean, your ball striking gets better if you play, and you don’t play and you get frustrated ’cause you suck.
No, it’s true. And I mean, literally, I mean golf is such an interesting game. And I’m about to take some lessons, but what’s so interesting about golf is you change one little thing, and it makes all the difference. Like one of the things that changed recently on my irons, ironically, as my son’s getting lessons, he’s teaching me on the golf course, and I love it. This 12-year-old is teaching me how to play. I love it. So instead of like arms kind of doing this with the irons, it’s keeping things straight, and I noticed by keeping things straight, keeping your body straight, so you keep your arms straight and your body straight, I’ve noticed, I mean, massive improvement in my irons. I still need some help on the like 4-, 5-iron. But my drives, he taught me like, he told me what to do with my drive, and I’ve improved massively. And so, but it’s like little tiny tweaks. I love that about golf, little tiny tweaks, and all of a sudden it makes this huge impact. I mean, it could literally take off, you know, strokes from your overall score. So yeah, I love golf. I just love being outside, man.
Yeah. I had a person in my mastermind this morning call it “green therapy.” Just the idea of getting outside and –
Really, I’m sorry. I’m gonna tell my wife that –
“Listen dear. I’m going to green therapy today. It’s it’s gonna be great.”
She’s gonna be like, “are you into cannabis?” I’s like, no, no, no, no, no. It’s the other green therapy.
That would be green therapy while I’m doing my green therapy. Yeah. So –
Right. That’s right.
So, hey listen. The, final part of each episode of Return on Podcast, Chris, I just want to ask you if there’s any habits, hacks practices that are giving you an unusual ROI in your life, things that you’re like, man, if somebody were to take this away and kind of test drive it and try it, they might really benefit from it. Anything like that pop to mind for you?
You know, I gotta say, nothing crazy pops in my mind, but I think over the past few years, I’ve just really surrounded myself with just smarter people. It really helps, man. Like genuinely helps. Like not jerks who think they’re better than you, like actual people who you just are like, you know what? Like you’re smarter than me, and I like that. So why don’t you talk, I’m just gonna ask you lots of questions. I wanna ask you about your experience. I wanna ask you about, you know, what’s made you a better person? How have you structured your time management? You know, I spoke to a guy just today where we were actually talking about time management, and you know, it was like a load of wisdom around being intentional with your time, thinking about your week, and going, I’m gonna give two hours to exercise. I’m gonna give, you know, one, you know, one hour or three hours to my kids, but I’m creating self boundaries. Like he was talking a lot about self boundaries, and I’m like, oh, lapping it up, man. It’s like soup, you know?
And so it’s just, I’ve tried to be very intentional with that. You know, Global, my three partners are just great guys. They’ve, you know, we’ve worked kind of hand in hand in the trenches the past three years, and they came, you, you know ’em, and they came from some really big careers, and just even being around those guys, and just – it’s really about being humble and asking questions, man. You’re the same way. I mean, you’re identical with that, just surrounding yourself while you’re part of, you know, a lot of masterminds and big groups, and you know, you get around other men that, you know, kind of, you can just, you know, kind of just, you know, take the coat off and prop your feet up and just kind of get real, you know? And so, yeah. Nothing too, like monumental here, but I mean, it’s helped. I don’t know, anybody listening, I would encourage it. Just go find smart people.
So one of my heroes, a friend of mine in Atlanta named Tommy Breedlove always says “your net worth is your network.” So I think that’s one of the truths there, and the other one is life is too short to work with assholes. And so I think –
– that means we need to be really careful, you know, who we invest our time with because we, you know, wanna have good people. Bro, it’s been great having you. Chris, if anyone wants to learn more about Global Wired Advisors, what’s the best way for them to get ahold of you?
Yeah. If they go to our website, globalwiredadvisors.com, or just type in “Global Wired Advisors” on Google. We’re the first ones to pop up. My email address, my phone number’s on the website. We have lots of ways to get in touch. I don’t care what size you are. I don’t care what category you’re in. If you’ve got questions about the market, you’re concerned about what’s happening right now, you need good resources, please just contact me. I promise you, I will, we will have a, we will have a productive call. Even if we just talk about your grandma, we will have a productive call, I promise.
. There we go. Unless you’re calling to tell him your grandma’s an asshole, in which case that could be a little bit awkward.
Well it’s yeah, exactly. Then I would give ’em actually your advice, and you should stop surrounding yourself with toxic people in your life.
Life’s too short, “but grandma calls me every day!” I’ll go –
But grandma’s toxic. She needs to go. It’s totally fine.
Oh boy. That’s awesome. Anyway, well, Chris, thanks for being on the show today, buddy. And I just, for those of you guys who have made it 45 minutes into this, thank you so much for listening to Return on Podcast. I’m Tyler Jefcoat. Guys, if this content serves you or is helpful, I’d love it if you shared it with your friends, subscribe to our channels, hit that little bell so that when we go live each week, you can get notified, and you know, until we talk again next week, hope you guys kill it, and have a great day.