Decentralized Success: Ramsey Sahyoun Scaling Evergreen to $1 Billion of Revenue
Title: Decentralized Success: Ramsey Sahyoun Scaling Evergreen to $1 Billion of Revenue
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Diving deep into the world of managed service providers (MSPs), this episode features a chat with Ramsey Sahyoun, co-founder of Evergreen, a holding company that’s making waves in the industry. With a revenue exceeding a billion dollars, Evergreen isn’t your typical MSP – it operates under a decentralized model, owning over a hundred individual platforms. Ramsey shares his journey from a golf-obsessed college kid to a private equity guru, and ultimately to a leader in the MSP space. This episode explores the strategies that set Evergreen apart, including their unique approach to acquisitions (independence), the importance of nurturing individual company cultures, and how to scale without losing the essence of what makes each MSP tick. If you’re an MSP owner or thinking of diving into this industry, there are some golden nuggets in here that could change the way you think about growth and success.
Takeaways:
- Building a successful MSP means focusing on a strong growth engine rather than just operations.
- Evergreen operates with a decentralized model, allowing individual companies to thrive on their own.
- The journey from golf dreams to private equity was a wild ride.
- Acquisition success hinges on finding businesses with potential for organic growth, not just financials.
- Avoiding the integration trap is crucial; decentralized approaches often yield better results in MSP acquisitions.
- Investing in marketing and consistent sales efforts is key to growing MSPs and avoiding stagnation.
Companies mentioned in this episode:
- Evergreen
- Alpine Investors
- Datatel
- Wolf Consulting
- Constellation Software
- Transdime
- Danher
- Revolution Capital Group
Transcript
Foreign welcome to the MSP Owner Podcast where we delve into the journeys of leaders in the managed service provider industry, uncovering challenges, successes and insights to help you build scale exit your business.
Speaker A:Today I'm talking with Ramsey Seyoun, co founder and M and a partner at Evergreen.
Speaker A:Evergreen does more than a billion dollars in revenue.
Speaker A:Evergreen is also more of a Holdco model.
Speaker A:They're not a one size fits all msp.
Speaker A:They've got a very decentralized ownership approach which I'm very interested to dive into.
Speaker A:And from my understanding their holding company owns over 100 individual MSP platforms in the space.
Speaker A:Very interesting and something we'll dive into.
Speaker A:Ramsey, before he co founded Evergreen, worked at Alpine Investors, a well known private equity firm that does a bunch of rollups and a whole bunch of different industries.
Speaker A:So I'm excited to dive into that as well.
Speaker A:So welcome.
Speaker B:Thanks Ben.
Speaker B:Thanks for having me.
Speaker A:Yeah, I'm super excited to jump into this given my, you know, I grew up in private equity, like started out my career and then went, went into business ownership.
Speaker A:Sounds like you went down a similar path to you did private equity and then you know, went into a Holdco and, or ownership sort of mindset and structure.
Speaker A:So I guess we have that shared commonality.
Speaker A:Where did that start?
Speaker A:Did you always think you wanted to build a Holdco or where did, where did this begin?
Speaker B:Yeah, no, it definitely didn't start that early.
Speaker B:I was born and raised in, in Los Angeles and I got into golf very young.
Speaker B:Like my grandpa got me into the game and so basically until the very end of my, my time in college at usc, I played on the golf team there.
Speaker B:I, and I got a golf scholarship to go.
Speaker B:So it was, I was all in on trying to make that my career and I got.
Speaker A:You wanted to be a golf pro?
Speaker B:I did, I did, yeah.
Speaker B:Like Tiger woods was my hero and you know, I just, I was obsessed with the game.
Speaker A:And were you like, were you like top in your class in high school?
Speaker A:Like you were the best golfer on your team?
Speaker A:Like what was that, what was that story?
Speaker B:I was.
Speaker B:Yeah, yeah, yeah.
Speaker B:I was like a nationally ranked junior golfer.
Speaker B:And then I played all four years at, at usc and you know we were, we're a pretty good team.
Speaker B:We won the conference championship.
Speaker B:We would get to kind of the NCAA tournament every year.
Speaker B:So it was fun but, but, but very competitive.
Speaker B:Like I once, once you get to college, you know the bar, the bar is high and it's even way higher to actually become a successful professional.
Speaker B:So kind of by the end, I, I very, by the very end of my college career, I, I decided not to try my hand at being a pro.
Speaker B:And that's, that's kind of when I started getting into business.
Speaker B:But it wasn't something I was, like, always preparing for.
Speaker A:What got you there?
Speaker A:Like, why did you decide, hey, I'm going down this path?
Speaker A:And then you didn't want to.
Speaker A:What was that?
Speaker A:Was that like.
Speaker B:Yeah, I just realized I wasn't good enough.
Speaker B:You know, I, I, I didn't have a good enough college career to justify, you know, taking the risk.
Speaker B:And it's a, it's just so few people.
Speaker B:You know, I think there are 120, 125, 150 people on that PGA Tour that make a really good living.
Speaker B:Everyone else is, you know, earning their paycheck every week.
Speaker B:And, you know, I just didn't want to take that, that risk with my career.
Speaker A:That was like, junior year, you were like, man, I got to find a, find a career.
Speaker B:No, it was later than that.
Speaker A:It was later than that.
Speaker B:Yeah.
Speaker B:It was senior year.
Speaker A:So junior year, were you doing, like, were you doing, like, pro internships?
Speaker A:Like, you were still doing golf as, like, your thing?
Speaker B:Yeah, that's right.
Speaker B:Like, I didn't have any internships.
Speaker B:Over the summers.
Speaker B:I would go compete, so I had no internship experience.
Speaker B:So as a result, it was my senior year, back half of my senior year.
Speaker B:And, like, I was just, like, I was about to graduate, and I was trying to get internships.
Speaker B:So my first, I was lucky to get an internship at a, at, like an independent sponsor kind of, you know, private equity firm would be a generous term and that, that it was unpaid after graduating college.
Speaker B:And they said if I did a good job over the summer, that they would start paying me.
Speaker A:And, and did they end up paying you?
Speaker B:They did.
Speaker B:They did.
Speaker B:It took, like, four months instead of three, but they did.
Speaker B:So that was, that was my first experience with private equity.
Speaker B:But my, my boss there, like, just taught me the whole, the whole business, and I just, I fell in love with it, you know, right away.
Speaker B:This idea that you could buy private companies.
Speaker B:I didn't even know that that was a thing.
Speaker A:What was the independent sponsor called?
Speaker B:It was a company called Revolution Capital Group.
Speaker B:The two partners there have since split and created their, their own separate firms, but they were based in Los Angeles.
Speaker A:What did you like about, like, what opened your eyes to the, the model specifically?
Speaker B:Yeah.
Speaker B:Yeah.
Speaker B:So, I mean, my role was basically cold calling business owners and bankers, and I, I guess I just, the, I think What I liked about it was it really gives you an appreciation for just how vast the economy is and like the, all the different types of businesses out there and how you can, you know, make really great investments by just finding things that are, by uncovering things that people aren't looking for.
Speaker B:You know, when you, when you think finance, usually you think like stock picking and investing.
Speaker B:And, and I liked that you could, you could win by like going to the far corners of the earth to find really niche.
Speaker A:So like uncovering the, like, uncovering opportunities, that's what I love.
Speaker B:Yeah, yeah, yeah.
Speaker B:Uncovering opportunities that are off the radar.
Speaker A:And did you like the like discovery?
Speaker A:Like, you know, private equity's got a few different functions, right?
Speaker A:You got to find the business, you got to close the business, and then you got to operate the business.
Speaker A:Which one did you like the best?
Speaker A:Or sounds like you had more exposure on the finding aspect given your role.
Speaker B:Yeah, definitely the finding.
Speaker B:And maybe when we get to my time at Alpine, I got some experience on the investing side when I was there because that's kind of what everybody is, is, is, is chasing.
Speaker B:And you're told when you kind of go out of college, when you get out of college, you do banking and then you go to the investing side of private equity.
Speaker B:So I got some exposure to that.
Speaker B:But I came back to the sourcing, you know, the finding side of the business.
Speaker B:I just really love that because I think it adds so much value in this, this area of small business.
Speaker B:M and A specifically.
Speaker A:That's really interesting.
Speaker A:I had a similar experience at the second private equity firm I looked at.
Speaker A:They basically said they wanted to spend their time focused on talking to the big, big shot bankers because they wanted to do bigger deals.
Speaker A: gave me, they're like, here's: Speaker A:Go call them and then go find these small deals that will just pass on automatically anyway.
Speaker A:That was like where I cut my teeth on a small business, you know, arena too.
Speaker B:Yeah, look, I think that the big insight that Alpine had, and you know, we're kind of a part of that insight and that we did it in, in a very specific industry.
Speaker B:But Alpine as a whole, I think the insight they had is that you can actually scale your firm without necessarily doing big deals.
Speaker B:You can scale those efforts with the 3,500 brokers that you talked about and, and just do it at a high velocity and you can successfully, you know, raise and deploy multi billion dollar funds with that strategy.
Speaker B:I think that, I think that's really, really key insight that, that they've had that has kind of, kind of driven the success.
Speaker A:What are people missing?
Speaker A:Right?
Speaker A:Like, because I feel like there's this, there's this idea out there that, you know, acquiring fails half the time, mergers fail half the time.
Speaker A:There's like, there's like preconceived notions.
Speaker A:Then you have firms like Evergreen that can go out and acquire a hundred plus companies and, and not blow things up.
Speaker A:So like, what do you think is the, what's the difference between those two?
Speaker A:Or is it just a scale thing?
Speaker A:Is it a focus thing or is it a, like, you know, what is it?
Speaker B:Yeah man, I, it's, it's probably not just one thing because know, I, I, I always hear the, the stats about, you know, whatever most M and A fails or something and I, I just don't know.
Speaker B:Like I, I just, I, I sometimes I question the validity of that because I, I do think a lot of strategic transformative M and A fails, but I think M and A, like anything else is a, is a skill that you get better at with reps. And so I think if you look at very acquisitive companies like Constellation Software and Transdime and Danher and all, all these companies that like we've admired for, for a long time, like their M and A is wildly successful and they do it over and over and over again and they probably get better as they go.
Speaker B:And I, I think having that attitude towards it, Yeah, I guess that's what I, that's what I think.
Speaker B:And then, and then I do think it's every, it's, it's everything like you have to be, you have to invest in your sourcing function.
Speaker B:I think a lot of private equity firms are afraid to kind of do that and do the, do the dirty work.
Speaker B:They just kind of want to talk to bankers and be comfortable.
Speaker A:Yeah.
Speaker B:And then you got to know how to diligence these businesses and then you got to know how to create value once, once you buy the companies.
Speaker B:It's all, I think it's all in the details of, of you know, being great at each, each stage.
Speaker A:If you could only choose one aspect to be excellent, at what stage would you choose?
Speaker A:The finding, the closing or the operating.
Speaker B:Oh man.
Speaker A:And the rest, you're just mediocre.
Speaker A:The rest are just mediocre.
Speaker B:Yeah, I, I would pro, I'm a little unbiased, I would probably say finding and just because I feel like, you know, you can do good deals and, and de risk your to de risk all the rest of the components, I think that is changing.
Speaker B:Like if you, if you ask me in five years, I might say operating just because as, as the, I think as it gets, as, as the industry gets more competitive, you won't be able to just win on the buy as much and you'll, you'll need to be excellent at creating value post close.
Speaker B:So I would say operating would be a close second.
Speaker B:I probably will overtake finding in the future.
Speaker A:Yep.
Speaker A:Okay.
Speaker A:Yeah, I, that makes, that makes sense.
Speaker A:It's, that's the MSP owner's biggest challenge too, is finding new business too.
Speaker A:And, and also it's the hardest thing.
Speaker A:So if you're good at that, everything else becomes, you know, a moot point, so.
Speaker B:That's right.
Speaker A:Hi, I'm Ben Tigelaar, the host of MSP Owner podcast and the CEO of Datatel, an IT managed service provider with 35 employees.
Speaker A:The mission of this podcast is simple, to have authentic conversations with IT owners about their journey, how it started, the challenges they faced, and where they're going next.
Speaker A:Every episode, I personally walk away with a new actionable item to strengthen my own business.
Speaker A:But a quick word about my company, Datatel.
Speaker A:We are actively acquiring MSPs who align with our service and culture.
Speaker A:So if your company is generating between 1 and $10 million of revenue, I want to talk to you.
Speaker A:But wait, you're probably thinking, why me and why Datatel?
Speaker A:First is I get you.
Speaker A:I understand the challenges MSP owners face.
Speaker A:Being one myself, feeling overworked, overwhelmed, constantly being on call, struggling to bring in new business.
Speaker A:I have the solutions and people in place to address these pain points.
Speaker A:Second is culture.
Speaker A:We run our business on EOS entrepreneurial operating system, which has been transformative for our employees and clients alike.
Speaker A:I believe that building a great company comes down to finding and retaining great people who are in the right seats.
Speaker A:Everything else is noise.
Speaker A:If any of this resonates, it probably means we're a fit and we should be having a conversation.
Speaker A:Until then, let's get back to the show.
Speaker A:What do you view yourself as?
Speaker A:Like you and your position where you're at right now, do you view yourself as an MSP owner, a private equity investor, an operator?
Speaker A:Like what do you, how would you define what you are right now?
Speaker B:Oh, man, that's a good question.
Speaker B:I never really thought of that.
Speaker B:I, I, I mean, I view myself as a partner at a holding company.
Speaker B:I, you know, I think I'm, I'm closer.
Speaker B:My day to day is closer to what someone working at a private equity firm looks Like, I think we're a little bit closer to our operating companies just by nature of how the organization is set up.
Speaker B:But yeah, that's, that's kind of how I see myself.
Speaker A:Got it.
Speaker A:See, I always, I always thought of, of true independent sponsors.
Speaker A:True people are having holding companies really, they're, they're owning a small percent of a large company and.
Speaker A:That's right.
Speaker A:Yeah.
Speaker A:The role that you do is, is mostly, you know, acquisitions.
Speaker A:You're at the partner level.
Speaker A:You're not doing the individual operating at the individual companies.
Speaker A:But yeah, that like, but I still view you as an MSP owner.
Speaker A:Right.
Speaker A:You're just a, you're, you're a different nature of one and your, your motivations and focus are going to be different than, than a lot of others.
Speaker A:So that's why, that's right.
Speaker A:That's why I wanted to have you on this because I feel like there's an intersection there.
Speaker A:You have some, you have some unique things that I think we can, we can pull on and, and have some fun with.
Speaker A:So, so you, so just going back to your early career.
Speaker A:So you had, you went to college at usc, you worked for this independent sponsor and then you went and got an MBA and then went to Alpine or what was the, what was the path there?
Speaker B:No, no mba.
Speaker B:I, I, I studied USC as an undergrad business school.
Speaker B:So I studied business in undergrad.
Speaker B:I majored in it and yeah, so no, it was independent sponsor for a year after college and then I got the opportunity at Alpine right after that.
Speaker B:I just found it on like.
Speaker B:Indeed.
Speaker B:And I, I applied.
Speaker B:Alpine was building out at, at that time.
Speaker B: ,: Speaker B:And I was the second person Alpine hired when they were building out their dedicated sourcing function.
Speaker B:So prior to that sourcing, investing and operations were kind of intermingled and they, they were building out dedicated sourcing, which at the time I, you know, they, I think they were on the earlier end of private equity firms building out dedicated deal origination, you know.
Speaker B:Got it 10 years ago.
Speaker A:So you were, you were, well, you were at the beginning stages of Alpine becoming Alpine, what I understand it to be today.
Speaker B:That's right.
Speaker A:From, from a D and sourcing perspective.
Speaker B:Right?
Speaker B:Yeah.
Speaker B:Alpine was very, very different then.
Speaker B:Like I, I think the year I joined they did three or four, five deals and, and they didn't do add ons for the most part.
Speaker B:Maybe they, they did, you know, add ons for some of their platforms some of the time.
Speaker A:So what, what, what changed Going from that approach to the let's focus on these smaller add ons approach.
Speaker B:Yeah, I think so.
Speaker B:Constellation Software was, was an inspiration on the software side.
Speaker B:And Alpine Software Group was created, you know, a little bit before Evergreen was created.
Speaker B:I think those, I think those two strategies were kind of the early, the early aggregators, if you will.
Speaker B:So focusing on, you know, smaller businesses and doing them at a higher velocity.
Speaker B:And then I think, you know, I think building out the sourcing engine, you know, was, was critical because then we, you know, it was kind of just banker coverage sourcing.
Speaker B:And then we built out.
Speaker B:When we started Evergreen, I kind of.
Speaker A:Built out.
Speaker B:A direct to, direct to business owner sourcing engine.
Speaker B:And you know that, that, that's been deployed across all the Alpine aggregators at this point.
Speaker A:Gotcha.
Speaker A:And so you worked there for, you worked at Alpine for how long?
Speaker B:I worked at Alpine for three years prior to starting Evergreen.
Speaker A:Okay, and then near the end of it, it seemed like you guys had like what was going on at the company because I assume that this organically turned into an opportunity that you discovered and wanted to, you know, go into.
Speaker A:So how did, how did that go from you're focused on just building a company to like maybe there's something else, a tangent here.
Speaker B:Yeah, yeah.
Speaker B:So Alpine Software Group was being created to focus on these smaller software companies and the initial thought for Evergreen was to be the services version of that.
Speaker B:So to aggregate smaller services companies and Alpine.
Speaker B:So, so we came to Alpine with that, that pitch like the services aggregator and, and then that the Alpine's push was hey, focus in on a, on an industry.
Speaker B:And so we started exploring various industries.
Speaker B:We looked at IT services as an overall category and generally Alpine had passed on all IT services companies because they were project based and non recurring.
Speaker B:But we kind of zoomed in and zoomed in and zoomed in and we found this SMB managed services, part of the market that has recurring revenue.
Speaker B: d that became in kind of late: Speaker B:So that's kind of how it evolved from kind of services, small services company aggregator to you know, focusing on, on msps.
Speaker B:And then today we've gotten into a few other segments of IT services but spin all so with IT focus.
Speaker A:So, so but you, for you personally, when you're sitting at the company, are you like naturally leading this and you're just like the natural person to come in to lead this company or how does, how does that happen?
Speaker A:Yeah.
Speaker B: made, made a trip to Omaha in: Speaker B:That was, yeah, that was the inspiration.
Speaker B:We were like, we got to build a holding company.
Speaker B:And I think the timing lined up well with what Alpine was doing with Alpine Software Group.
Speaker B: e, late late April, early May: Speaker B:That's when we got the, the idea and it, it just again, the timing kind of worked out with where Alpine was, was heading.
Speaker B:So it, we kind of pitched it and, and, and it was off to, off to the races at that point.
Speaker B:Yeah, I, there was a point at which we kind of had to make the decision, you know, do you want to stay in a private equity firm like Alpine and there's kind of a more defined path there or do you want to take this bet on starting a strategy?
Speaker B:And we ultimately took the bet on starting the strategy.
Speaker B:So that there, there was kind of a decision point there that I, I remember pretty vividly.
Speaker B:Like, you know, just a fork in the road in your, in your career.
Speaker A:Did you negotiate the structure of the deal up front or you just started working on it and said, hey, I will figure this out later for you.
Speaker B:Personally, I don't remember.
Speaker B:I, I, I, now we, we really just started working on it and trusted that, you know, the, the incentives and everything would, would work out in, in the end.
Speaker B:And I think, you know, Alpine's backed a bunch of CEOs and management teams.
Speaker B:So there's, you kind of knew what it was, what it was going to be going in.
Speaker B:So yeah, we didn't really focus on that.
Speaker B:We, we, we're fortunate.
Speaker B:We got to just focus on running after building the company.
Speaker A:That's awesome.
Speaker A:So maybe start with high level with Evergreen as a company.
Speaker A:And when you say holding company, it's interesting because I think some people might look at it and say, oh, you're a big msp.
Speaker A:And then you think of yourself as a hold co owner.
Speaker A:So can you just talk a little bit about that decentralization and, and what that means for you and then for your portfolio companies to totally.
Speaker B:Yeah, so, so if you look at Evergreen today, there's Evergreen, the holding company which is based in San Francisco.
Speaker B:We've got 40 people at the Evergreen holding company.
Speaker B:The majority of those folks are focused on sourcing and, and, and executing acquisitions.
Speaker B:And then underneath that we have three what we call groves.
Speaker B:We have our MSP business which is called Lyra.
Speaker B:And underneath that you have all the, all the MSPs that we own.
Speaker B:And then we have two other groves, one called Pine that's focused on ERP implementation and consulting firms, and then another called Cedar that's focused on it for governments, both state and local and federal government agencies.
Speaker B:So those are kind of the three categories.
Speaker B:So that, that's part of why I think of this as more of a holding company that's focused on technology services businesses versus an MSP roll up.
Speaker B:And then I think the other thing like that you called out is just the decentralized operating model like the companies that we, Berkshire was the initial inspiration to start Evergreen, but also companies like Constellation Software that you know, I think they have over a thousand independently operated vertical software companies.
Speaker B:Transdigm has, you know, a hundred aerospace component businesses that are operated on a decentralized basis.
Speaker B:So that's, that's, that's, that's what we see ourselves building just in technology services.
Speaker B:So that's, that's why I think of it that way.
Speaker B:And like you said, we, you know, we probably have a hundred, about 100 different P Ls and each of those has, you know, each of those businesses has a CEO and a management team that's incentivized and accountable to drive that business forward.
Speaker B:And we have a deep seated belief that that works better than trying to mash it all together into a single brand.
Speaker A:How do you align the incentives from a pretty decentralized approach where one company might be growing at 50 or 100 a year and then another one is losing 10 a year.
Speaker A:And yeah, like how do you, how do you reconcile those differences between at the individual company level and then at the holding company level?
Speaker A:Is there a mixture of two or how does that work in reality?
Speaker B:Definitely, yeah.
Speaker B:Great great question.
Speaker B:So yeah, I, I believe you have to have very different incentives depending on where, where in the organization someone is.
Speaker B:Like we, you know, I, I think incentivizing somebody running a million dollar EBITDA MSP on the overall Evergreen M and A activity like, doesn't, doesn't make a lot of sense.
Speaker B:Like we, we, those people can co invest and, and, and buy shares in, in the company, but we have, we have a, a of incentive program for operating company leaders that's all focused around their business and the performance of, of their business.
Speaker B:So, and, and basically the, the gist of it, I won't get into the details of the plan, but the gist is we want folks, you know, doubling their business organically over a five year period.
Speaker B:And if they do that, you know, there's, there's, they're, they're richly rewarded for, for doing that because that's, that's great operating performance I think in this industry to grow the bottom line at a 15% compound annual growth rate over five years.
Speaker B:So that's kind of what our incentive plan is, is, is oriented around and can create really exciting outcomes for the individuals leading a single operating company.
Speaker A:Got a.
Speaker A:Got it.
Speaker A:So.
Speaker A:So it's an individualized approach.
Speaker A:But then hopefully five years from now the overall company is worth more as well.
Speaker A:And then you get some, you know, because I think of the idea of joining a bigger MSP is like you get to ride on the enterprise value increase with it being larger and like you're de.
Speaker A:Risking yourself and totally.
Speaker A:So it sounds like you kind of get, you're trying to attempt to get best, you know, best benefits of both.
Speaker B:Yeah, yeah, yeah.
Speaker B:So yeah, I think that what you bring up the kind of the concept of rollover equity.
Speaker B:So a lot of people sell their business and they roll equity into Evergreen.
Speaker B:So that, that's a, that's a big part of it too.
Speaker B:What I'm talking about is kind of the long term incentive plan that we have with the individual operating company leaders, you know, many of which aren't, aren't founders, oftentimes founders selling to us because they want to transition out and we, we, we put in someone to run the company.
Speaker B:That, that's kind of when we put in that incentive package.
Speaker A:Got it.
Speaker A:I'm curious, like in this journey, what do you think about like the last, you know, eight, nine years as like you have inflection points or like what were the inflection points in your mind?
Speaker A:Because you're at a hundred platform companies in three different verticals and like if you were to like break it into chunks, like maybe like the first chunk is like you think you know, you have something.
Speaker A:What was, what was that that first year?
Speaker B: ,: Speaker B:Company called Wolf Consulting.
Speaker B:That, that.
Speaker B: t kind of, that first year of: Speaker B:Yeah, it was definitely like we have something here like this, this industry is, is great.
Speaker B:And, and I, we, we feel like we got the thesis right.
Speaker A:And how did you know it was great though?
Speaker B:I.
Speaker B:Well, we knew it was great from an M and A.
Speaker B:We, we knew it was great from an M and A standpoint.
Speaker B:I think that was the biggest thing.
Speaker B:Like we were, we were having a lot of success sourcing acquisition opportunities.
Speaker B:The Valuations were reason.
Speaker B:Yeah I think we were early to it.
Speaker B:It wasn't particularly competitive at that time to acquire msps and we ran after it like hard.
Speaker B:Like we, we moved with conviction which in hindsight was.
Speaker B:Was good and I wish we would have moved with more because the industry got more competitive quickly.
Speaker B:So yeah we knew it was good from an M and A standpoint.
Speaker B:We had some challenging and I guess so.
Speaker B:So there was that I guess phase two would be like we had.
Speaker B:We learned some challenging lessons in those in those early couple years.
Speaker B:Probably the most powerful one was we tried kind of integrating some smaller businesses into kind of a regional platform that we had acquired and it.
Speaker B:And it really struggled and so we always had that belief in the decentralized operating model but we were open minded.
Speaker B:This that experience like really reaffirmed that because our, the companies that we were operating the on a decentralized basis were crushing it.
Speaker B:And and we had you know we had some challenging ones where we were trying to put these businesses together and it.
Speaker B:And it just reaffirmed our, our.
Speaker B:Our strategy.
Speaker B:So I think the second phase was like okay, now we now we know what works and we know kind of what we are and what we're trying to build and we're going to really own that.
Speaker B:And then I think the third stage would probably be just building out the team.
Speaker B:You know it was me, Jeff and me and Jeff for like the first six months and then you know we kind of slowly built the team to now the 40 folks at the Evergreen holding company and um, you know that it's been much more about scaling and you know finding finding other like minded folks to to bring onto the team.
Speaker B:So I think that probably be kind of the, the third phase.
Speaker A:Yeah.
Speaker A:So so phase two, when you, when you realized hey, you had some challenging lessons with with.
Speaker A:With integrating is is hard.
Speaker A:What.
Speaker B:Yeah.
Speaker A:Do you, do you still have that view that like it's really.
Speaker A:It's.
Speaker A:It sounds like you don't do very many add ons for your existing portfolio companies too.
Speaker A:You had some?
Speaker A:Yeah, you know, very few right?
Speaker B:Yeah, very very few.
Speaker B:We we we do do it a little bit.
Speaker B:So we, we have we have a couple deals under LOI right now that are.
Speaker B:That are tuck in types.
Speaker B:But but yeah.
Speaker A:Why do you think it's so challenging?
Speaker A:Because in other industries, right there's I look at dental, I see consolidated branding and structure.
Speaker A:I see you know H Vac consolidated branding and structure.
Speaker A:And then yeah and then.
Speaker A:But.
Speaker A:But I was also in healthcare so there was also the flip, there was also holding companies that had very regionalized or even local.
Speaker A:Dr. X was owned by private equity, so there's varying degrees of that.
Speaker A:But I'm curious, why do you feel like it's so hard, particularly in this space?
Speaker B:Yeah, yeah, it's, it's a good question.
Speaker B:And I'm, I don't believe that it can never work.
Speaker B:Like, I'm not one of those people where it's like, if someone tells me about their, their roll up strategy and they want to integrate companies, I'm like, oh, you have no chance.
Speaker B:Like, I, I, I think there are plenty of successful examples of people doing it.
Speaker B:Um, it, I, I think our, our strategy is different and, and I think we own it.
Speaker B:And I think that's part of why, why it works because we kind of built the whole organization around it.
Speaker B:But I do think that this space is particularly challenging for an integrated kind of roll up model.
Speaker B:And I think it comes down to like the, just the churn that tends to arise out of integrating tool stacks.
Speaker B:And I think when integration leads to a worse experience for the customer and lower service levels, which it almost always does, that is kind of the core driver of this business.
Speaker B:And there aren't really economies of scale that are powerful enough, in my opinion, to overcome that churn.
Speaker B:And I think that's why most rollups struggle to grow organically, because they have churn coming out of the acquisitions.
Speaker B:They don't have maybe enough of a new logo acquisition engine.
Speaker B:Like, like you said earlier in the show, like new customer acquisition is one of the hardest things for msp.
Speaker B:So what does that mean?
Speaker B:If you churn, you're going to have, you're gonna have heck of a time growing organically.
Speaker B:And I just think that's, that's a lot of.
Speaker A:Got it.
Speaker A:So you're, you're saying you would rather have change in leadership over change in infrastructure.
Speaker A:So you'd rather replace a leader who's leaving the company.
Speaker A:Right.
Speaker A:And a founder owner who's been with the business for 20 years.
Speaker A:You would rather change that person completely versus having to go through the integration process between two different, you know, service models.
Speaker B:That's right, yeah.
Speaker B:Because I think what happens is like the rest of the team is staying in place, the brand is staying in place, that the, the customer relationship is the same the day before we buy the company as the day after.
Speaker B:You're talking to, if you're a customer, you're talking to the same people that you talked to before.
Speaker B:So, and, and we tend to buy, I think you know, larger MSPs.
Speaker B:I think our average MSP acquisition is 7 or 8 million of revenue.
Speaker B:So these, these are businesses where the founders are not, not always doing the things companies.
Speaker B:Yeah, exactly.
Speaker B:They don't have customer relationships necessarily.
Speaker B:They've handed that off to account management.
Speaker B:So you know, I think our strategy works really well for, for those types of businesses.
Speaker B:I think if you're looking smaller than that, I think it can, you know, maybe an integrated model can make more sense.
Speaker A:And as you look at like other industries, you know, even other portfolio comp.
Speaker A:Other hold cos within.
Speaker A:Within the network, what do you.
Speaker B:Yeah.
Speaker A:Do.
Speaker A:Do other people have differing views like as it relates to other industries or is that shared commonality where everyone within, you know, the private equity group is saying we like the decentralized model.
Speaker A:Like is that core to ever.
Speaker A:Is that core or not really?
Speaker B:It's, it's.
Speaker B:No, I, I, you know, I think it, it.
Speaker B:You mean across like the Alpine.
Speaker A:Yes, across Alpine as abroad.
Speaker A:Across all these industries.
Speaker B:Yeah.
Speaker B:I think at Evergreen we probably skew the most like, like we're, we're the most hardcore about it.
Speaker A:And, and I mean the only thing that you're integrating right is is ERP financials.
Speaker A:That, that was my understanding.
Speaker A:And everything else is decentralized.
Speaker B:Everything else is decentralized.
Speaker A:Do you have companies like some companies are running on EOs, some running on scaling up, some not doing anything.
Speaker A:Like from a framework perspective.
Speaker B:Yeah.
Speaker B:It, it so happens that most of them run on eos.
Speaker B:It's remarkable how, how kind of ubiquitous that operating system is is.
Speaker B:Has become in, in small businesses generally.
Speaker B:A lot of people use that, but, but not all.
Speaker B:I think like.
Speaker B:Yeah, I, I do think that there is a, that the belief in decentralization persists at various levels across.
Speaker B:To varying degrees across the different Alpine companies.
Speaker B:I think the big thing that is common for across all of them is.
Speaker B:Is developing a value creation playbook and strategy.
Speaker B:Like what I think is so much more important than integrating tool a tool stack is that you come in with a playbook to create value in each business you acquire and you have a plan to.
Speaker B:Against which you go and execute.
Speaker B:And when you do the deals over and over again in the same industry, I think you get really good at that.
Speaker B:And so that, that is, that's something we, you know, we, we believe in because ultimately like we're not running a decentralized business just because like we're nice and it feels good.
Speaker B:Like we, we.
Speaker A:It's less work for you.
Speaker A:Right.
Speaker B:We think it leads to better financial results in the, in, in the companies.
Speaker B:And we think it leads to better, you know, better service to the customers.
Speaker A:And really the idea around that too is like, okay, you have enough portfolio companies, you have enough diversity.
Speaker A:Now you're representing IT services more broadly and you know, individually.
Speaker A:Right.
Speaker A:It's, it's not as important like you're looking to, you're building Holdco for a reason, right?
Speaker A:Like, you want scale and diversity.
Speaker B:Yeah, we want scale and diversity.
Speaker B:Yeah.
Speaker B:I mean, I think that is, that's a benefit.
Speaker B:I wouldn't say that's like why we're, why we're building the company.
Speaker B:I think like the, the why, why we're building a company for me is because I, I do believe, I have a belief that, you know, this kind of model is better for most business owners in, in this industry, particularly business owners of, of scale.
Speaker B:And you know, I want to, I want to spread that as, as much as I can.
Speaker B:And, and we also, you know, we want to build a big, you know, important company that makes an impact.
Speaker B:So that's, that's kind of what, what drives us.
Speaker A:Nice.
Speaker B:More so than like, diversification necessarily.
Speaker A:So, so acquisitions I'm curious about.
Speaker A:I mean, you've done this a lot of times.
Speaker A:You've got a model, you've got a playbook.
Speaker A:Can you tell us how you approach acquisitions platforms?
Speaker B:Yeah, yeah.
Speaker B:So I, it starts on the sourcing side.
Speaker B:So like building out, like doing a lot of research.
Speaker B:We have a database of like 15,000, 15,000 MSPS that's been built over a long period of time.
Speaker B:And I think that that part of it is really important because I think what you want to do with acquisitions is first, like, give yourself options.
Speaker B:Like, what I find with a lot of people that do M and A is like, they find, you know, they kind of work on the first one or two deals that come and you don't really kind of get a view of like, what the options are.
Speaker B:And I think that, you know, that can lead to failure.
Speaker B:So that, that's like step one is like, give yourself options.
Speaker B:And there's, there's no shortcut to doing that.
Speaker B:You just gotta do a lot of research, do a lot of outreach, get rejected a lot of times, talk to a lot of people.
Speaker B:And then, you know, and then, and then once, once you talk to someone, I think having a differentiated message is, is important.
Speaker B:So we spent a lot of time into doing that finding.
Speaker B:You know, we got on the phone with the business owner, like, what are they going to remember after that call So I think that that whole part is, is kind of the first step.
Speaker B:And then, you know, we, we have a, we have a process that we go through.
Speaker B:So you know, you have the first call, you get an NDA, you review financials, there's a financial call and then there's a letter of intent.
Speaker B:So we try to get to that point in the process pretty quickly, like within a matter of weeks.
Speaker B:And then, and then there's a due diligence process post LOI that's like 60 days and, and, and then we close and, and it goes, you know, and the focus is on, you know, operating the business from there.
Speaker B:And then, you know, during the due diligence process, the value creation strategy, putting that together.
Speaker B:What are we going to do to double this business over five years?
Speaker B:Like specifically like, you know, what, what are we going to do on pricing?
Speaker B:What are we going to do on new logo acquisition?
Speaker B:What are we going to do on, you know, on the procurement side?
Speaker B:You know, what's our, what's our strategy here?
Speaker B:I think that's a critical part of, of diligence and then translating that into.
Speaker A:Is part of the fit here that if you go down the value creation strategy and you can't really find one, then you pass.
Speaker B:Yeah, yeah, I think we've got, you don't want to do that post loi.
Speaker B:So you need to go in with like a belief that.
Speaker B:So, you know, I think an example of that is we see a lot of businesses with really, really high EBITDA margins because the founder is doing four different roles in the company.
Speaker B:That's a good example.
Speaker B:If you pass on that because how do you create that is very tough.
Speaker B:You get a business starting at 30% EBITDA margins, what are you going to do, take it to 40?
Speaker B:No.
Speaker B:Chances are you're going to take it down to 20 and you're going to lose your shirt on that investment.
Speaker B:That's an example of what you're talking about there where there's not really a path to value creation.
Speaker A:And I guess if you're focused on buying businesses that are six plus million in revenue that usually have a lot of structure and stuff in place that would prevent that from happening.
Speaker A:Most of the times like you have to have a salesperson, they have to have, you know, most of the time or no.
Speaker A:Do you see that less frequently?
Speaker B:Yeah, yeah.
Speaker B:On, I would say most of the time we see that.
Speaker B:I, there's usually an area and it usually is on the sales side where the owner is still kind of the main driver There maybe they have a salesperson, but maybe it's not.
Speaker B:If you look at who's winning the deals, it's the owner.
Speaker B:Maybe the owner needs to be there to close the deals.
Speaker B:So oftentimes that's where we're finding we're having to make an investment.
Speaker B:The nice part about that is if you get it right like that, it is, it's related to revenue, it drives revenue.
Speaker B:I think if you have to make investments because the team is way understaffed like that, that's, that's really challenging because that's like pure cost without a revenue generating component.
Speaker A:What do you, what do you see as the, the biggest mistakes that MSP owners make when either selling or building their company?
Speaker B:Let's see, selling or building their company.
Speaker A:I'm thinking like, man, if I focused in a particular industry, if I niche down, if I built a repeatable sales function, if I, you know, wouldn't have skimped on doing these things the last three years.
Speaker A:Right?
Speaker A:Like, what are the things that are the biggest regrets that people have when they come to the table and they try to sell?
Speaker A:And I'm sure everyone has some that they're like, I wish I could have done this better.
Speaker B:Yeah, I think there is probably, yeah, I think it comes down to a growth engine or sales engine and really focusing on growth.
Speaker B:I feel like most MSPs focus so much on the tech stack and the stock service and, and, and that stuff.
Speaker B:You know, it's really important and it's the foundation of the business.
Speaker B:But I think most MSPs have a lot of scar tissue from like trying to hire a salesperson and it doesn't work.
Speaker B:And then you try again and it doesn't work.
Speaker B:And, and, and they built a nice business where they don't have to do that.
Speaker B:I think that's, that's probably what I would say is like a growth, a focus on growth and adding new customers.
Speaker B:And I, you know, I would, I would encourage most folks to, to, you know, let go a little bit on their, on the operations and tech stack side and focus on growing the company and, and, and adding new customers.
Speaker B:I think that's, that's the thing that almost nobody does to enough of a degree.
Speaker A:And, and I would guess this is a total guess.
Speaker A:But, but people probably focus more on sales than on marketing, at least at this size.
Speaker B:Definitely, definitely.
Speaker A:And is there value in investing in marketing before that?
Speaker A:Like, are you, are you seeing the winners invest in sales and marketing?
Speaker A:Only sales, only marketing.
Speaker A:Like the ones who are, you know, achieving that top 10%.
Speaker B:Yeah, I think the ones that are doing it at scale, marketing is definitely a component of it.
Speaker B:If I think about even our companies, the ones with the kind of slickest branding and marketing, even though they may be, actually some of our companies I think are understaffed on sales but are still growing at scale.
Speaker B:And I think that is driven by marketing, a combination of marketing and verticalization which I think makes your marketing more effective.
Speaker B:So I, I definitely think that's a, that that's a component of it.
Speaker B:I think that's a good point.
Speaker B:But I, I, I do think you kind of have to have, you kind of have to have both and, and most of our, you know, 5 or 6 million revenue MSPs, you need to start by having a person at the company focused on adding new logos.
Speaker B:Like that's, that's oftentimes we're going from zero to one on that.
Speaker A:That seems pretty, pretty common.
Speaker A:Yeah, I, I see anything, anything under, anything under 3 million.
Speaker A:Like you have just really immature sales and marketing as a whole.
Speaker A:And then you start to figure out between three and six is like you've got, you need to invest, you probably have some people, you're probably making some mistakes, you're figuring out where you're going to be.
Speaker A:And then the people above 6 probably look a little bit more professional, they have their stuff going on or, you know, and I think the challenge for people is like when you're under that five million dollar range, right, or you're under four, an owner is having to do all these things and it's really challenging to, you know, once you finally start making money after eight years of building your business, I'm gonna go and hire some salespeople who don't deliver like that.
Speaker B:Right.
Speaker A:That would kill me totally.
Speaker B:And in the short term, if you're just looking at your ebitda, it devalues your business.
Speaker B:Right.
Speaker B:And so I think that's, that's the other hesitation for folks, particularly folks that are getting closer to exiting is like, am I really going to like, you know, reduce my profitability and therefore the value of my business temporarily?
Speaker B:Because I believe that this is going to pay off.
Speaker B:So I, I think you really have to go into it with, you know, whatever three to five year time horizon on, I'm going to make this work.
Speaker B:And I think the payoff at the end can be huge if you execute, but it can, you know, it can be painful if you don't, you're making less money and you know, you don't build the value that you thought you're going to build and you're kind of back to, to square one and you still have a valuable company at that point.
Speaker B:But it's just you, you, you didn't hit the home run you thought you were going to hit.
Speaker A:So, so if you, if you were an owner, would you be, would you be focused on consistent profitability or would you be focused on some other metric like recurring revenue or overall revenue or like what a overall gross profit dollars?
Speaker A:Like if you were to pick one metric to look at that really, really mattered.
Speaker A:If you're trying to maximize your outcome at the end, what would you do?
Speaker B:Yeah, I, I would definitely focus on consistent profitability first.
Speaker B:Like I would try to achieve best in class EBITDA margins.
Speaker B:I would and I, I would focus on, I would see like how far I could, I take it with owner led sales at really healthy EBITDA margins and, but I would be looking ahead.
Speaker B:You know, if I'm 3 million of revenue and I want to grow 20%, how am I going to add that revenue?
Speaker B:Can I do that?
Speaker B:Do I need to start thinking about, I would start thinking one year ahead as far as what revenue I need to add and who, you know, and as a result, who do I need to bring on to do it and make that investment in the growth engine at the right time?
Speaker B:I think doing, but doing that before you get good profitability can be tough because then you just don't even know if your services are being delivered profitably.
Speaker B:And layering a growth engine on top of that is like, it's just less clear whether that ROI is going to make sense.
Speaker B:So I'd focus on profitability first, see how far you can take it.
Speaker B:If you get that right, then don't be afraid to pull the sales and marketing lever to try to get to the next level.
Speaker A:As I think about Evergreen, what do you think are the biggest roadblocks or threats from taking you from a billion to 2 billion over the next five years?
Speaker B:Yeah, good question.
Speaker B:I think it's always, it's always the operating performance of the companies that's been really strong so far.
Speaker B:But you know, if, if, if that turns and, and we don't continue to grow organically, but over over a hundred.
Speaker A:Companies like you, you kind of have confidence, right?
Speaker A:Or, or it's more market.
Speaker B:I think industry disruption would be the market.
Speaker A:Like yeah, that's what, what does that look like?
Speaker A:If, if there is a disruption, like what do you envision?
Speaker B:Yeah, I think, you know, AI is obviously super top of mind And I, you can paint both a glorious picture of how great it's going to be for the MSP industry and you can paint a disruptive picture where it, you know, it disrupts the MSP industry.
Speaker B:And I don't know.
Speaker B:You don't know.
Speaker B:I don't think anybody knows.
Speaker B:Right.
Speaker B:And I think that what we can do is try to navigate that as best we can.
Speaker B:And I have some thoughts on that.
Speaker A:But yeah, I'm very curious because I think about that with our business.
Speaker A:I think about like, man, could AI run my company better than I can on a daily basis?
Speaker A:Like, like I own my company remote and, and so, you know, I've thought about man, could I just plug in my methodology, my mindset, like remove my individual emotions for making bad decisions and then, you know, have, you know, have it put up video.
Speaker A:Like, would that be a better company than what I could run?
Speaker B:More consistent.
Speaker A:Right.
Speaker A:Works 24 hours a day.
Speaker A:Like knows what I'm like, I see my job getting replaced.
Speaker B:Right, right, right.
Speaker B:Yeah.
Speaker B:We have a guy at our team, he's like AI seems to be coming for all the jobs that like people want.
Speaker B:And I just want AI to do my laundry and like it.
Speaker B:It's kind of true.
Speaker B:You know, a lot of these, a lot of these knowledge work, you know, type jobs are kind of what AI has been built for.
Speaker B:So, but yeah, I, I, I, I think, you know, it's going to drive a lot of change.
Speaker B:My, my view on it is that MSPs need to be trusted technology advisors that are on their front foot with helping their customers leverage AI to drive business outcomes.
Speaker B:And the MSPs are going to be left behind are the ones that think their job is to fix computers and close tickets.
Speaker B:Right.
Speaker B:Like that.
Speaker B:I think that that is going to be less a core part of the MSP value proposition and it's going to be more about consulting.
Speaker B:And the consulting is what's going to drive customer value.
Speaker B:So that's my, so greater importance on.
Speaker A:The customer relationship and what they feel they're being delivered to help them solve problems.
Speaker B:That's right.
Speaker B:And, and on the account manage.
Speaker B:I think that account management, like who, who's, who's, who's having those conversations with the customer.
Speaker B:I think that's a critical part of it.
Speaker B:And are they, are they genuinely curious about the business of their customer and, and how they can add value through technology?
Speaker A:Yep.
Speaker A:Agreed.
Speaker A:If you think back to the, you know, you've had great acquisitions and I'm sure you've had bad acquisitions.
Speaker A:Can you talk about one that you thought was a bad acquisition and why did that fail go sideways?
Speaker A:What was the challenge around that?
Speaker B:Yeah, let's see.
Speaker B:I, I, I mean I think the biggest one was the, the where we tried to do more of a roll up strategy and so, so we've kind of talked about that one.
Speaker B:One other one was we, we bought a business that, that had concentrated non recurring revenue and it was in, in the year of sale they'd done a couple, couple customers and it didn't repeat itself you know, after we, in, in the years after we bought the company.
Speaker B:And so we learned a, a lesson that way.
Speaker B:That company's actually gone on to do really well.
Speaker B:But it was, it was a tough two or three years when you were kind of outrunning that.
Speaker B:So you know, we learned a lesson around just sticking with it.
Speaker B:But also, you know, there's hard lessons around.
Speaker B:Sometimes projects can drive temporary profitability and if you buy off of that, you know, you're, you're going to be in trouble.
Speaker A:And then the best ones, like the outstanding ones, what, what, what did they do special or unique and what made them grow?
Speaker A:I assume you're thinking about one that has grown X amount per year.
Speaker A:What does that look like?
Speaker A:What does the absolute best or absolute top three look like?
Speaker B:Yeah yeah.
Speaker B:I, so our, our first company that we acquired, Wolf Consulting I think is performed incredibly well.
Speaker B:I think it still set the, the highest bar.
Speaker B:We have some others that are, that are doing great.
Speaker A:Your first one being your best.
Speaker A:Wow.
Speaker B:Yeah yeah.
Speaker B:I, I think and you know, I think it's, it's, it's like anything, it's never one thing like that, that company and the other companies have, they've done well.
Speaker B:It's like they get all the details right.
Speaker B:They're, they're disciplined in the, they have a, they have a predictable growth engine in place.
Speaker B:They're disciplined on, on pricing, they deliver.
Speaker B:They have really happy customers.
Speaker B:Like I, I just think all the details of, of the, of the business are really good and I, I think that is what I, I feel like the best leaders also are just very like detail oriented in a lot of these, these businesses because there are just so many things that you gotta, you gotta get right.
Speaker B:So I don't think it's.
Speaker A:So is that one really driven more by, by the leadership that was in place or is it, or is it a business model or in market focus?
Speaker B:I think it's, it wasn't just the leadership.
Speaker B:Is the whole company like that?
Speaker B:The founder Lloyd Wolff, very detail oriented, ran A tremendous business.
Speaker B:He's actually an EOS implementer now.
Speaker B:So he, he's very like structured business builder and I think that was a great foundation.
Speaker B:Elliot came in to run that business after Lloyd retired.
Speaker B:He now runs all of our, he kind of oversees our MSP portfolio.
Speaker B:And what he brought was more of the like growth engine.
Speaker B:Like we bought that business at 6 million of revenue.
Speaker B:And he was kind of the catalyst, I think, to build the growth engine to, you know, to keep growing it at 20 a year on.
Speaker A:So Wolf Consulting itself is probably doing 40 to 50 million at least of revenue.
Speaker B:No, not that much.
Speaker B:We've done no acquisitions.
Speaker A:Okay, gotcha.
Speaker B:Probably like 3x in revenue organically.
Speaker A:Got it.
Speaker B:Just about got it.
Speaker B:Since, since we bought the business.
Speaker A:Got it.
Speaker A:Because it's only been eight or nine years and 15% growth.
Speaker A:Got it.
Speaker B:27.
Speaker B: ,: Speaker A:Got it.
Speaker B:Yeah.
Speaker A:Cool.
Speaker A:Oh, that's, that's awesome.
Speaker A:So, so really the, the, the best, your best one is actually only growing at 15 or 20 a year.
Speaker A:You, you don't have any, do you have any portfolio companies that are growing like a hundred percent a year or that's just, does you're not seeing that like massive growth?
Speaker B:Not organic.
Speaker B:Not organic.
Speaker A:More massive growth.
Speaker B:Right.
Speaker B:Not organically.
Speaker B:Got it.
Speaker B:I, yeah, I, and we have, I.
Speaker A:Was just curious about like the distribution of companies right within the portfolio and like what does great look like, what does bad look like?
Speaker A:And then it's like, so it sounds like the distribution's pretty tight.
Speaker A:You don't have like a bunch of really, really high return, you know, high growth ones.
Speaker A:And I guess you don't have a ton of low growth ones.
Speaker B:But you know, I think that's probably, that's probably right.
Speaker A:Interesting.
Speaker B:Yeah, I, yeah, I think.
Speaker A:It'S, it's.
Speaker B:Also, you know, it, it is, there's also top line growth, which I think is more distributed, you know, is, is probably more consistent.
Speaker B:And then there's the bottom line because like sometimes you have businesses that are going through an investment period in their, in their business and then you have others that are coming out of an investment period and you really see a lot of EBITDA growth.
Speaker B:So I, I, I think it's important to kind of maybe distinguish between those, those two metrics too.
Speaker B:And look, I mean if you're growing a business just in the double digits on the top line and just, that's good leverage and operating leverage, you can, like, if you can grow these businesses 10% on the top and 20% on the bottom.
Speaker B:Right?
Speaker B:Like with.
Speaker B:With operating leverage, like, you're, you know, you can expand margins just because your operating expenses don't have to scale with your revenue, man.
Speaker A:Don't.
Speaker A:Don't tell my management team where our.
Speaker A:Our growth ambitions are.
Speaker A:Higher.
Speaker A:Are higher than that.
Speaker A:I'm like, oh, man, maybe I should take up the gas.
Speaker B:Yeah.
Speaker B:Yeah.
Speaker B:I.
Speaker B:Again, you know, investment.
Speaker A:You.
Speaker B:You have phases of investment and not.
Speaker B:But I think generally you can grow earnings faster than revenue over time, and I think you should, so.
Speaker A:Agreed.
Speaker B:What.
Speaker A:What.
Speaker A:What else do you.
Speaker A:Anything else that's top of mind that you.
Speaker A:You think we should talk about?
Speaker B:No, I don't think so.
Speaker B:This is.
Speaker B:This has been great.
Speaker A:Cool.
Speaker A:Well, appreciate your time.
Speaker A:And very interesting to hear about Evergreen and.
Speaker A:And doing over a billion dollars in a decentralized model.
Speaker A:I mean, it's.
Speaker A:It's.
Speaker A:It's really, really impressive.
Speaker A:Unique.
Speaker A:And having started out acquiring just one company at $6 million revenue and being where you're at is.
Speaker A:Is a testament to.
Speaker A:To you.
Speaker A:So congrats, man, so far.
Speaker B:Thank you so much.
Speaker B:It was fun.
Speaker B:Fun conversation and yeah, it's been fun.
Speaker B:Fun building this business.
Speaker B:But all.
Speaker B:All credit to our team and the.
Speaker B:And the people that have chosen to partner with us.
Speaker B:That's what this business has been built on.
Speaker B:So I'm just grateful for them.
Speaker A:Thanks.
