Episode Description
Embarking on a career path is a universal experience, where even the most seasoned professionals were once beginners. It’s crucial to recognize that expertise is not acquired overnight. However, by implementing a few strategies, you can pave the way to success, while taking those lessons into the future to help you become your best self.
In this episode of Empowered Owners, Jack West, Vice President at Firstar Precision Corp., discusses his diverse career journey, including two years in the military, his humble start at a gas station, working his way to a machine shop, and now, 22 years at Firstar.
Throughout this inspiring episode, Jack generously shares the wisdom he has acquired over the course of his professional career. Furthermore, he sheds light on how some of these invaluable skills have extended into his personal life, allowing him to discover and pursue a fulfilling hobby: managing his very own farm.
Empowered Ventures Vice President Spencer Springer also joins this episode to discuss Acquiring Excellence, a pillar of the EV strategy. The segment is part of a miniseries that will cover the four key components of the EV strategy: excellence in acquiring, stewarding, ESOPing, and storytelling.
What You’ll Learn
- The importance of working together and building cordial relationships with colleagues, partners, and customers.
- How to build skills in the field and why continued learning is critical for success.
- Why it is important to be patient with younger employees who are learning a new field.
- What makes Empowered Ventures different as a business that buys businesses
How to Listen or Watch
Listen below or wherever you listen to podcasts.
Watch below or @Empowered_Ventures on YouTube.
Read the full transcript here or below the following media links.
Episode Transcript
Chris Fredericks: Welcome to Empowered Owners, the podcast that takes you inside Empowered Ventures. I’m your host, Chris Fredericks. In each episode, I’ll have a discussion with one of our employees to discover and highlight their distinct personalities, perspectives, and skills while also keeping you in the loop with exclusive news, updates on company performance, and a glimpse into the future plans of Empowered Ventures. This is an opportunity for me to learn more about our amazing employee owners and an opportunity for you to hear regularly from me and others from within Empowered Ventures. On this episode of Empowered Owners, I’m excited to chat with Jack West, VP of Operations at Firstar Precision Corp. A precision machine components manufacturer based in Brunswick, Ohio. That was Empowered Ventures’ first diversifying acquisition.
Jack has worked at Firstar for 22 years and started about a year after Dave Tenny founded the company. Jack leads a large production team of talented machinists and a large operation that includes numerous types of machines, CNC, turning centers, mills, grinders, shapers, and more. In this, Jack shares some really surprising and interesting stories that I’m really excited to get to share with you.
I’ll also be joined by Empowered Adventures Vice President Spencer Springer at the end of the episode to debrief my discussion with Jack. Spencer will also share what we mean about Acquiring Excellence, which is one of EV’s four strategy pillars. Spencer was Empowered Ventures’ first official employee and team member, and he has done just a phenomenal job finding at adding some terrific companies to our holding company. With that, let’s get to my conversation with Jack. Hello, Jack. Welcome to Empowered Owners.
Jack West: Hi, Chris. It’s good to be here.
Chris Fredericks: Thanks for coming on the show. I’m really excited to chat with you as we were just joking, you love to talk about yourself. So a great thing for you to come on a podcast. What made you decide to do such a crazy thing to come on the podcast?
Jack West: Oh, boy. I’m not ready for this question. I don’t know. Do you want the real answer or the politically correct answer?
Chris Fredericks: Whichever answer you feel comfortable giving.
Jack West: I don’t know. When the president of Empowered Ventures says he wants you on a podcast, to say no is just I don’t know, I just didn’t feel comfortable saying no to that.
Chris Fredericks: Sure. Thank you for saying the honest answer. Yeah, honestly, I think that’s awesome. I really appreciate your perspective. We invited you on here because I think you’re a terrific representative of Empowered Ventures and obviously Firstar, as well. So I am very excited and honored to have you on and I appreciate you taking the time to do it as we seriously get started. Where did you grow up? What was your family situation growing up? Where are you from? Just give us a little bit of where you’re from and all that.
Jack West: So I grew up in northeast Ohio, in a suburb of Cleveland, so a little bit west of Cleveland, just in a small neighborhood, in a small house. We didn’t have a whole lot when I was growing up. My father worked at a steel mill in the shipping and receiving department for his entire career. And my mother didn’t work for most of the time until the kids got a little bit older and then she got some part time jobs and stuff like that. So we didn’t have a lot and didn’t have the greatest upbringing, really. I don’t know. Probably my most formative experience was going in the military. That’s probably what changed me the most. To be a better person, more disciplined person, more self motivated. So that’s my upbringing.
Chris Fredericks: Yeah, thanks for sharing that. So what led to the decision to go into the military?
Jack West: No options. No other options, really. I compare myself to my son who is just light years ahead of where I was at his age, and I just think back, I just wasn’t a very well educated, I wasn’t very well raised, I wasn’t very motivated. I didn’t have any real vision of what I wanted to do with my life getting out of high school. I don’t know, I could have gotten a job at some fast food place or just some random crappy job or I decided to go into the military instead, mainly to try to get money for college. I planned on going to college but had no money and no support or guidance. So that was the main motivator to go into the military was just an avenue to escape where I was and possibly get some finances for college later in life.
Chris Fredericks: It sounds like that experience though, which was it, two years?
Jack West: Yeah, that was the minimum at that time, yeah.
Chris Fredericks: Interesting. And in two years it obviously had a really big impact. Both how did it impact you and also in what ways does it still continue to impact you today?
Jack West: How it impacted me at the time, it gave me discipline in my life structure and taught me, I guess, more of what’s right and wrong, what’s acceptable and not acceptable consequences for your actions, accountability, just discipline really is what it was.
Chris Fredericks: And today, is that still the number one thing you took from it, or is there anything else that kind of ended up also being something that you took from it?
Jack West: It definitely helped change my perspective because I spent one of the years that I was in in Oklahoma, basic training, and then shortly before I got out, I was back in Oklahoma. But the other year I spent in Korea, so that was the first time I was overseas and this was in the late eighties. And Korea at that time, at least where I was at, which was pretty far up north, it was almost like a third world country. There was water buffalo walking around and people riding their bicycles and it was a lot of manual labor that people were doing to farm and things like that. So it definitely opened my eyes to the way other places in the world were like. So it definitely changed my perspective on my life.
Chris Fredericks: Wow, that’s so amazing, because that’s the first time you left the country and to go to it’s not like you went to Europe, to Great Britain or something. You went to someplace that was entirely different than what you probably were used to.
Jack West: Yeah, absolutely. Different culture, different language. Just everything was different. It was pretty shocking.
Chris Fredericks: Yeah. At first when you got over there, were you almost, like, paralyzed just in terms of overwhelmed by this newness of everything?
Jack West: Yeah, a little bit. But I think they’re very familiar with that. You get over there and they’re definitely there to direct you and help you get acclimated to that environment.
Chris Fredericks: Yeah. Wow, that’s so amazing. So when you came back after that two year stint, what then? What did you do when you came home?
Jack West: I went and got a job at a gas station and in preparation for signing up for college, because I got out. I don’t know, I think it was in the spring. No, actually it was in the fall. I got out, so I got out too late to sign up for a college, so I got a job at a gas station, and then I was preparing to sign up for the next semester. And again, I had no one to really help me with that and no guidance. I screwed that all up in the process. College didn’t work out for me. That’s probably a good thing.
Chris Fredericks: Interesting. Why do you say that?
Jack West: I don’t know. I can’t say it’s a good thing. I don’t know if it would have been good or not, but I ended up meeting my wife at the gas station, so maybe if I had went to college, I wouldn’t have married her. And our 30th wedding anniversary is this spring, so that’s pretty exciting. And then she got me the first job at a machine shop.
Chris Fredericks: Oh, interesting. Okay, interesting. And that was through. How did she end up getting you that job?
Jack West: That’s an interesting story, too. We were working at the gas station and she was working at the guy that owned the gas station. He actually owned multiple gas stations. One of them was a service station. That’s where I worked. And then there was another one that was more like a store, like a convenience store. So I met my wife there and we were dating for a while, and then I used to get off of work and she worked the late shift at that convenience store gas station. And she was not allowed to let anybody into the gas station after 11:00. So I would come up there after work, after I got off work at the service station and visit with her. And I’d have to talk through the little speaker vent thing in that plexiglass window and I kept telling her that I wanted to come in because it was cold outside and I didn’t want to stand outside in the cold and the wind. And I told her, I’m just going to leave. You can let me in or I’m leaving because I’m freezing. So she let me in. And they had cameras in there and everything. So they found out that I was in there, and even though I was an employee too, it didn’t matter. Not allowed to let anybody in. So she got reprimanded for that. And then a couple of weeks later, I did the same thing. And then she got fired. So I got her fired. So she was pretty irritated about that. And she said, I don’t want you working there anymore. I’ll try to get you a job at this shop where my dad works. I said, yeah, okay, that’s fine.
That’s what happened. I got a job there, and I started there by basically I shoveled chips. So metal chips. They had a lot of big machines in that shop, and they can remove a lot of metal with that equipment. And I would just shovel chips all day into hoppers and then dump them into bigger hoppers. So I did that in basic sweeping and mopping and cleaning the toilets. But yeah, I did that for a little while. And then they wanted to the guy that was driving the company truck, he quit. And so they wanted me to do that. So I did that for a while. That was probably my favorite job, get to get outside and get out of the shop and drive around and see different things. And then after a little while of that, they wanted to get me on the machine, train me on the machines. And I told them no. I said, hey, I like driving the truck. This is a good job. But they kept bugging me, and eventually I said yes.
Chris Fredericks: Interesting. When you got on a machine, was that something you picked up really quickly?
Jack West: The guy that trained me, he’s still a good friend of mine. He actually owns a shop, but in Cleveland. After several months of working with me, he came up to me and he said, maybe this type of work is just not for you. Maybe you should find something different to do because you’re just not catching on.
Chris Fredericks: Was it that you were too slow or not getting the details right?
Jack West: Just not understanding. It was all CNC, so you have to program the machine. So I wasn’t understanding the programming part of it. I wasn’t very proficient with the math aspect. There’s a lot of math involved. But I did terrible in school. I was an awful kid, really awful. Didn’t apply myself, was a troublemaker. I was not a very good kid. But once I got into the machining and then I went and took some classes, some math classes on my own at a community college. And then once I started catching on, I started catching on pretty quick after that.
Chris Fredericks: Interesting. So what made you decide on your own to go take some math classes?
Jack West: I knew that I needed to if I wanted to do that type of work. And I enjoyed it. I like working with my hands, and it was pretty interesting. It was an interesting shop. We did almost all of our work was for NASA, so we would make the experiment packages that would go up in the space shuttle for testing. They did a lot of materials testing at the NASA Glen Research Center in Cleveland here. So the materials researchers would need their experiment packages built, and we would build them. So it was really interesting work, and there was a lot of pride in making something that’s going to go into space. And it was interesting to talk with the researchers because they would come over to see the progress of their parts. And some of those guys, they wait their whole career to try to get one of their experiments into space. These guys have their whole career, 20 years of work, and they’re relying on you to build their experiment package to go up in space.
Chris Fredericks: Wow.
Jack West: So I found that really interesting.
Chris Fredericks: Yeah, it sounds almost like it may have given you a really direct sense of kind of purpose almost in your day to day kind of work. That’s awesome. And you said you were always mechanically inclined. Was that growing up? Were you someone who would take apart things and do stuff with your hands like that, or is that more something you discovered later?
Jack West: A little bit. I used to work on cars and stuff like that, but I don’t know. I never see myself as really that mechanically inclined, especially when I look at my son, who is he’s super mechanically inclined. And I don’t know. I wasn’t one of those kids that’s like taking apart a television or a microwave oven when they were eight years old and building something else out of it. So I think I picked a lot of the mechanical ability up later in life.
Chris Fredericks: So that when you did the math classes and came back from that, at what point did you feel you turned the tide and felt like you were doing more than sufficient work? You were actually doing a good job?
Jack West: It took a while. It probably took after taking some of the math classes and some of the programming classes, it probably took a good year before I felt really comfortable that I was doing a good job and I started getting more and more complex projects at work. And that’s an indicator that you’re doing a good job. They’re entrusting you with more involved projects.
Chris Fredericks: Interesting. And I guess I’m digging on this a lot because I think for a lot of people, two things. One, it’s not always easy to find your career path that really connects with you in a meaningful way. A lot of people go to college, come out of college, don’t know what they even want to do still with their life. So it’s interesting that you found something and then that motivated you to just make sure that you were successful in it because you were actually enjoying the work, not because you were good at it right off the bat, but because you actually liked the work. And then because you weren’t great at first, you were able to learn slowly. And I wonder if that helps you now as a manager or leader when you have people that also it’s not easy to become a really effective machinist. Would you say that’s true?
Jack West: I’d say that’s very true. You have to be fascinated with it and you have to have the aptitude I don’t want to say intelligence, but the ability to retain information, the ability to do some higher level mathematics and just it’s not easy. It takes a lot of time. And the way I started, I think that helps a lot with we were just talking about this the other day, Luke and I, these guys on the floor, we hire somebody in and they’re so quick to say, oh, they’re not working out. They’re 17 or they’re 18, they don’t know anything. And it takes years. And I have that perspective because that was me. That was me at 20 years old. I didn’t know anything. I didn’t know how to do anything. And it took me a long time to catch on, but once I did, I ended up doing really well. So with some of the younger employees that we have, I keep telling these guys, just be patient. You can’t just write them off in a month and say, hey, they’re worthless. They’ll never be anything. So, yeah, it does help my perspective in that way.
Chris Fredericks: Yeah, that’s amazing. What would you say though, that I’m sure there are some things you are looking for, like early signs that someone has the right makeup or skill kind of ability or that probably they will be able to become fully fledged, capable machinist at first are what are some of the signs you’re looking for early on with new hires?
Jack West: What we are always looking for here is a lot of the I don’t know, just the basic just being a basic normal human being, which you don’t run into all the time when you’re interviewing people for a machinist job. But yeah, just being respectful, having good hygiene, being on time, being organized, being able to listen to constructive criticism without getting upset. Just a lot of the basic people skills that you think everybody can do that, but in reality, especially with younger people bringing them in, there’s not that many that can do that.
Chris Fredericks: Yeah, when you’re hiring an 18 year old, almost any 18 year old boy is probably not going to have some deficiencies. What about broader like a machine shop. So for anyone that doesn’t know, what does a machine shop do?
Jack West: Machine shop uses machines. In our case, it’s computer controlled machines to cut metal, all varying types of metal or plastic or even ceramics. Using computer controlled machines to cut metal parts, basically, and cut anything, pretty much anything and everything. We’re a job shop here, so we do parts for we have our customers, our main customers, and they’re mainly in the automotive or wind or solar energy assembly industry. So we make a lot of tools that would go onto automotive assembly lines or a lot of components for tools that would go into assembling a wind turbine, the tower or these solar farms that you see all over the place. There’s tools that are used to put all that stuff together and we make a lot of the components for those tools.
Chris Fredericks: What makes a great machine shop? There’s a lot of machine shops out there. I don’t know if people realize it’s a very large and fragmented industry. What makes a really great machine shop in your experience?
Jack West: Either ownership or manager. Typically it’s ownership. And most of these machine shops are small family businesses. And it all comes down to the leadership at the top. And if the leadership at the top is a good person, a caring person, somebody that has compassion for others and is not driven by money, only those values filter down from the top. I’ve seen it over and over again where you go to a I’ve worked in good shops and I’ve worked in shops that were not good. And it all comes down to whoever is at the top running it.
Chris Fredericks: And with Firstar, obviously, that would have been Dave Tenny, president and founder of Firstar. And you started working with Dave, I think, just one year after Firstar founded, is that right?
Jack West: Yeah, that’s right.
Chris Fredericks: Yeah. And what did he hire you on to do then?
Jack West: The business was already growing pretty rapidly and he was involved with the business side and the floor side from the very beginning. So he really hired me to take over the floor side of it, the operational side, because it was just getting to be too much for him to do both, even that early on.
Chris Fredericks: Yeah. What have been some of the key things that you guys that Firstar did over the 20 plus years? To have such a great run and build a really nice company with a terrific team. You have a wonderful team of machinists and people at Firstar. So from my perspective, it’s been just an incredible success story. What would you say some of the key a few key things have been in kind of building Firstar, with most.
Jack West: Businesses, the customer is really everything. And that’s probably the key to Firstar’s growth, is just being very customer service focused. We want to be partners with our customers. I would much rather have not a personal friendship, but it’s a business acquaintance who you’re like, friends with them, you’re going out of your way to help solve their problems and just treating them like a friend and not like an adversary, which there are some shops that are like that. They look at the customer as an adversary and that’s not how we look at it.
Chris Frederick: Yeah. Why would some shops do that? Because it doesn’t make sense that you would think about a customer like that. But why would they do that?
Jack West: Because they think that not companies, but buyers specifically. There are some buyers out there that are very jaded and they’re trying to squeeze the last nickel out of every job that they source somewhere, or they think that they’re being taken advantage of by every company that they deal with. And it’s just a matter of their perspective. And I don’t think it does them any favors to operate like that because they end up alienating suppliers, good suppliers. And there’s been companies in the past that Firstar has dealt with and after the first order, we said, you know what, we’re not interested in doing parts for your company anymore because it’s an adversarial relationship and that’s how they’ve made it and we won’t work like that.
Chris Fredericks: Yeah, that makes a lot of sense. And I would think that then trickles down. If you only work where you have a partnership opportunity with a customer, then that’s going to flow through the whole process ultimately and maybe help you be more successful as a company and your people be more successful in servicing that account.
Jack West: Absolutely. A good example of that is we’re running some prototypes for Betcher and we ended up scrapping more than we expected, trying to get it up and running. I’ve been in contact with the engineer that’s in charge of that project and I said, Listen, we scrapped a bunch of this material and we’re going to be short on the order. Do you have any laying around that I can have? And it’s not cheap material, it’s a couple of $100 worth of material. And he said, yeah, I’ll saw it up, I’ll heat treat it for you and I’ll have it over there Monday morning. And he did. But the only reason he did is because we work together more than just emailed conversations. And I’m not going to say it’s like we’re like friends or anything, but it’s a very cordial I’m working to help him, he’s working to help me.
Chris Fredericks: Yeah, that sounds like the kind of work relationship we all would like to have with customers and vendors and partners. So that’s awesome. Thank you for sharing. That my last question, Jack, for this part of our discussion today, what advice would you have for any empowered ventures, employee owners or team members or any listeners out there, just from your work experience, your life experience, what advice comes to mind?
Jack West: Love what you do, or at least like what you do, because if you don’t like what you do. It doesn’t matter what the situation, how successful you are. I really don’t think you’re going to be very successful if you don’t like what you do. So really, that’s the key if you have to like what you’re doing. And if you don’t, then go find something else that you do like because it’s hard to be successful doing something that you hate.
Chris Fredericks: Well said. Thank you, Jack. Welcome back. So, Jack, to get to know you a little bit more, we have another quick segment. So you and I have talked about this a fair amount in the past, and I thought it might be fun for us to discuss, but one of your main hobbies is actually having a hobby farm. And I’m really curious to dig into that a little bit with you. I think for a lot of people, dream about what it’d be like to have a hobby farm. And for me personally, even, I really enjoy visiting farms, and it can be very serene and peaceful and making your own produce and having animals, it really is a neat thing. So I know we connected on that really quick once we started talking about it for you. When did you get into having a hobby farm and where did that interest come from?
Jack West: I think that started probably about, let’s see, maybe 16-17 years ago when my daughter was eight years old, she joined 4-H and she wanted to show a chicken at the fair. So we built a little chicken coop and went out and got six just little hen chickens for eggs and so she could show one at the fair. And that’s where it really started and it’s just grown from there. I always like doing a garden. I always used to do a vegetable garden even before then. But that’s really where all the animals started coming from, was when my daughter went in for age.
Chris Fredericks: Yeah. And I think it’s been a family project since then. What animals and what all do you do or have you done on your hobby farm?
Jack West: Oh, boy. Yeah, it’s more like a petting zoo, really. I really like animals, so we end up collecting a lot of animals that other people maybe didn’t want or whatever. So we’ve done like a dairy cow. We have goats right now. I don’t even know how many more keep coming. When I’m not around, they’ll show up. But I think we have twelve goats right now, and they’re dairy goats and a bunch of baby goats and geese and turkeys and chickens and ducks and dogs and cats and what else? We have a horse, have bees. Yeah, it’s a lot. I should have made a list for the show.
Chris Fredericks: That’s great. Really briefly, just for anyone out there. Since you have so much experience at this point with it, I thought it would be fun to hear some of the reasons, too, are not to have a hobby farm. So with your experience, what would you say the top few reasons are? To actually go for it and to have a hobby farm.
Jack West: You have to love animals, that’s for sure. But it’s really nice to know where your food came from, especially if you’ve raised it yourself or grown it yourself and it’s better quality. It really is. It’s amazing the difference between eggs that we collect from our chickens, and then you go to the store and you buy eggs and you eat one and it is an amazing difference. It really is. And the same thing with the milk that my wife has these dairy goats, and I don’t drink milk at all, but according to them, to my kids and my wife and anybody else, this goat milk tastes. You can’t tell the difference between the goat milk and regular cow’s milk. And she makes butter out of it. She makes cream and ice cream and it’s just really good. And you know that there’s nothing in it that shouldn’t be in it. There’s no weird hormones or chemicals and you know what you’ve fed them, what they’ve eaten, that you’re not packing them full of Skittles or some industrial waste or whatever. So it’s really nice to know where your food comes from.
Chris Fredericks: Yeah, that’s great. Anything else? Any other reasons come to mind to have a hobby farm?
Jack West: It’s rewarding. I don’t know, it’s like infinite work, but it can be really relaxing. A few months ago, her goats had all these babies and initially they’re a little skittish, but as you spend time with them, they get really snuggly. And so I would come home from work every day and I would go out into the barn and sit down and I would have three baby goats jump in my lap and they want to crawl up on your shoulders. So I would just sit there with all these baby goats and just relax. And it was really nice. It’s very rewarding for me. It’s like a stress reliever and I don’t know other reasons you have to really like to have infinite work. So I like to be busy. I like to work with my hands. I do enjoy that part of it.
Chris Fredericks: Great. That’s great. What would you say the top three reasons are? Top few reasons not to have a hobby farm.
Jack West: It’s expensive. It’s really expensive. It’s not one of these farms that you see, like, on YouTube or something, where the people seem like they have it all together and they’re making money and we don’t make any money. It’s a money pit. But it’s a hobby. Just like any hobby, sailing or whatever hobby, it costs money. And if you don’t want to invest a lot of money in your hobby, don’t get a hobby farm.
Chris Fredericks: Any other reasons not to have a hobby farm?
Jack West: The infinite work. If you don’t like to constantly be working, then, yeah, it’s probably not good to have a hobby farm and dealing with probably the biggest one, though, is just when you have a farm, animals die. You have to kill animals if you want to eat them. And not that we’re eating every animal that we have, but most of them are pets. That’s why it really is like a petting zoo. But you have to deal with death a lot, and especially with the kids. That can be hard. That’s probably the biggest. The thing I don’t like the most is just dealing with death more often than I would like, which is I would rather never have to deal with that, but instead I have to deal with it all the time. So that’s probably the biggest drawback for me.
Chris Fredericks: Makes sense. Makes a lot of sense. Jack, this has been really interesting and fun for me to have this conversation. Thank you so much for coming on. It’s been a ton of fun for me.
Jack West: Sure, no problem.
Chris Fredericks: Coming up next, Empowered Ventures Vice President Spencer Springer will join me to debrief my discussion with Jack. We are also going to dig into the Acquiring Excellence pillar of the Empowered Ventures strategy, what it is and why we think it is important. Hi, Spencer. Welcome to Empowered Owners.
Spencer Springer: Hey, thanks for having me.
Chris Fredericks: Sure. Thanks for coming on. Just first off, was curious what you thought about my conversation with Jack.
Spencer Springer: Yeah, it’s a great example why Jack’s so well liked and just I thought it went really yeah, yeah.
Chris Fredericks: I remember when you and I first met Jack in person. I just had a really good feeling about working with Jack and just a terrific human in general. So I thought that came across pretty well in the podcast myself.
Spencer Springer: Yeah, it was really cool to hear him talk about just how he views the employees and cares about them and their development and building relationships with the customers. Jack’s a rare breed. He’s got obviously very high IQ, but strong and high EQ as well. He’s just all around rock star.
Chris Fredericks: Yeah. Humble and funny too. So we can’t say enough good things about Jack. So you’re on here to talk about acquiring excellence and what we mean when we talk about acquiring excellence to set the stage for the conversation. Not everyone will necessarily know, but you have a really significant background in mergers and acquisitions, and you joined us to lead this effort right from when Empowered Ventures launched in 2020. And you’ve really led the effort to find our first two great companies to join. So maybe to set the stage for folks who aren’t as familiar with even the industry of M & A, mergers and acquisitions and buying companies. What is that industry? If you had to just describe why it’s an opportunity, why we focus on it, what does it even mean to be in the M & A industry? Do companies even get bought and sold.
Spencer Springer: I mean, the common reason is a business owner has built a business and they’re primarily looking to retire or move on to something else. And they’re looking for a way to pass along their business on to somebody else, primarily by selling it. This creates an opportunity for somebody else to come in and take over the company and continue, hopefully, the success that company has had.
Chris Fredericks: Yeah, totally. So that leads to us and we’ve chosen to be in this industry of buying companies. So as an employee owned holding company, we’re in the business of buying successful companies and then stewarding them for the long term. From your perspective, how does this business model benefit our employee owners?
Spencer Springer: Yeah, as an employee owner myself, there are a couple of things that attract me to this business model. One being the diversification strategy, and two is the potential to create more success over the long term.
Chris Fredericks: Yeah. What does diversification mean?
Spencer Springer: Yeah, so when you’re concentrated or how I think about it, is when you’re concentrated in something, you’re going to realize the ebbs and flows that naturally happen when a company is operating. But when you’re diversifying, that can help smooth out those ebbs and flows to make things more sustainable.
Chris Fredericks: Yeah. So for us, at this point, we have three companies in three different industries. And maybe one industry could be doing really well one year, and another industry might not be doing quite as well. So it helps us stabilize the overall performance of the business and can help preserve value over the long term. If any of our companies really have a hard time because of things outside their control, that could really help to have a large group of different types of businesses. Is that kind of what you’re getting at there?
Spencer Springer: Yeah, I think you’re exactly right with that.
Chris Fredericks: From your perspective, what makes Empowered Ventures stand out as a buyer for companies?
Spencer Springer: Yeah, there’s a couple of consistent themes that I get from business owners when talking with them, one of which is the employee ownership model, especially how EV is approaching it. And to elaborate on that a little bit more, you can go down a traditional employee ownership path doing an ESOP, which, as you know, Chris, is a long arduous process, or you can partner with somebody like EV, which makes it a lot more streamlined. And for business owners that are interested in doing employee ownership, that can be very attractive. The other thing that I’m hearing from business owners is too, is the focus on building great companies over the long term. So there’s a group of buyers out there that are looking to buy a company and then sell it in three to five years. And I think that’s very different than what the intent is with Empowered Ventures.
Chris Fredericks: Yeah. So it’s a common story, right, that there are groups of investors out there that buy companies and then try to maximize the value after three to five years and sell it again to a different buyer and then maybe another flip down the road even with that new buyer. So what’s? Empowered Ventures. What do you mean by long term?
Spencer Springer: I think even that example you shared of you have one buyer come in and in three to five years they’re looking to sell it to somebody else. You just don’t know what’s going to happen to the company, to the employees, to the name. It just depends. If a new owner is taking over, they can do what they want with the company because they now own the company. And that creates a risk. For if you care deeply about what happens to the name of the company, what happens to the employees, you just don’t know what’s going to happen to that company in a ten year or 15 year time span versus somebody like Empowered Ventures. The intent is really to hold great companies over the long term. So when a business owner is talking with us, they know, hey, this is the group that’s going to be with the company for the long term versus somebody who might be interested in selling in a three to five year period to somebody else and you won’t know who that person is.
Chris Fredericks: Yeah, makes sense. And have you found that for some business owners that the employee ownership angle too is unique and interesting and potentially an important part or factor for them too?
Spencer Springer: It’s a huge differentiator. And even hearing from Dave Tanny or Rex Lim, the owners of Firstar and Paramount (Plastics) respectively, employee ownership was very important and top of mind, and that’s similar to other conversations we have with business owners or their advisors. It’s a real differentiator. So obviously I’m a big fan of it and I’m biased, but it’s so far proved out with Firstar and Paramount.
Chris Fredericks: Yeah. Awesome. I love it. What would you say just are the basic steps of finding and buying a company? Like, how does that process even work?
Spencer Springer: Yeah. First step is finding the company, and a lot of time is spent finding referral sources or contacting business owners directly. And so we’ll get opportunities presented to us or people will contact us with potential opportunities. We’ll also reach out to people directly, and if there’s businesses that we’re interested in or industries, we’ll reach out to them and just make sure that we’re top of mind with business owners. So when the time does come, we’re the first person they call or shortly thereafter.
Chris Fredericks: Yeah, makes sense. What happens then after you, let’s say, find an opportunity and it starts to get more serious, like, you and the business owner are talking and there’s clear interest on both sides, like what happens next.
Spencer Springer: Yeah. So the process is acquisition opportunity or potential acquisition opportunity comes in. It first goes through initial screen, and so we have a specific screen that we look at of criteria that we’re targeting for acquisition opportunities and see if it passes the screen. If it does, it continues to go through the process and each stage gets more and more scrutiny as an acquisition works through the process. So in the beginning it gets initial screen. The next step will get more scrutiny and further along the process, up until closing, it continues to get a lot of scrutiny to make sure that it’s the right fit before bringing it in and closing on.
Chris Fredericks: And that scrutiny can apply to a lot of things like finances, the people, the industry, and it also turns and flips on us.
Spencer Springer: Right.
Chris Fredericks: The business owners probably scrutinizing us on a kind of growing basis and it’s a mutual dance and kind of making sure that it keeps progressing and both sides are increasingly interested. Is that how you would think about it?
Spencer Springer: Yeah, I mean, it’s very much a two way street where we are evaluating the company to make sure it’s the right fit and we’re scrutinizing them, but as you said, they’re scrutinizing us, too to make sure that we’re the right fit for them and it’s the right decision. So it is very much a two way street to make sure it is a good all around fit, which I think you want. You don’t want to start a relationship off bad.
Chris Fredericks: Yeah. It’s not unlike buying a house. It’s different in some ways, but you look at a lot of houses, scrutinize them, get serious about one, go through, like a negotiation process, end up at the closing day, which is also how we experience it with buying companies. There’s an actual closing day and then what happens after that? Yeah.
Spencer Springer: After closing, then it gets integrated into Empowered Ventures and the day after closing, the focus quickly shifts to bringing them into the Empowered Ventures umbrella. And there’s a lot of work that goes on, mostly behind the scenes that most of our employee owners probably don’t even really see to really bring them in and make that as seamless as possible.
Chris Fredericks: Yeah. And an announcement goes out to the employees and there’s a moment of celebration and then yeah, the hard work continues. The hard work before and the hard work after. But thank you for describing that. I think it’s a really interesting process to go through. It’s a very difficult process and I’ve seen you in action leading that entire process and it’s super impressive and I’m grateful you’ve done it for these first two businesses and I think it’s been great for those companies for Firstar, Paramount. I’m super excited about continuing down this path of finding more companies to buy and really appreciate you laying out the process.
Spencer Springer: There’s so many people involved. I know that probably goes unsaid, but I do want to give a lot of shout outs because there is a lot of hands to make these opportunities successful and go seamlessly both on the EV team and externally. So it’s a lot of work that goes into it, and a lot of people work hard to make it possible, which I very much appreciate.
Chris Fredericks: That’s great. Thank you for saying that. Yeah, we have a lot of great people and partners that we get to work with to make these things happen and be successful, so we’re super grateful for all of them as well. What should our team expect with regards to how many acquisitions we would even be able or want to accomplish in a given year going forward?
Spencer Springer: Yeah, EV has, and my guess is we’ll continue to be very selective about acquisition opportunities. And so what that means is one year there might not be any acquisition opportunities, another year, there might be one to two, and in future years, there might be many more. I think it really just depends, but in my experience so far, it’s in a good way. I think EV has been very selective to make sure that the right companies come in to the Empowered Ventures umbrella, and I think that’s a smart way to continue doing that.
Chris Fredericks: Yeah, fantastic. Last question. Anything else coming to mind that you think people might want to know or that you’d want to add just with regards to what acquiring excellence means for Empowered Ventures?
Spencer Springer: Yeah, I couldn’t come on here without giving a pitch, which is to all of our employee owners that are listening, if you come across a great company, please let us know. If they’re interested in selling, or if you think that they might be interested in selling and you think they’re a great company, please reach out to us and let us know. If there’s an opportunity out there. We look at a lot of companies, but the best ones that have come to us are through referrals of people that we know and trust. And what better referral source than our employee owners?
Chris Fredericks: I love that. That’s such a great point. Reach out to us at [email protected] is the easiest way to get a hold of us. And Spencer, this has been awesome. Thank you for coming on Empowered Owners, and maybe we get to see you again on here in the future at some point.
Spencer Springer: Sounds great. Thanks for having me, Chris.
Chris Fredericks: Well, that wraps up this episode of Empowered Owners. I’d like to thank Jack West and Spencer Springer for joining me. Remember, we want to hear from you. Please give us feedback, suggestions, and topics for future episodes and tell us how we can keep improving the show. To reach us, send us an email at [email protected]. Last but not least, a big thank you to our production team at Share Your Genius. Be sure to join us next time on Empowered Owners as we explore the lives and stories of the amazing employee owners of Empowered Ventures. If you haven’t already, follow our podcast on your favorite platform so you never miss an episode. Thank you for tuning in.
