[00:01:42] A.J. Lawrence: Ayo, thank you so much for coming on the show. I’ve been following you for a while. This is so cool to talk to you about your journey.
[00:01:50] Ayo Phillips: Thanks so much A.J., for having me. I’m excited to be on.
[00:01:53] A.J. Lawrence: I mentioned a little bit about your background. I want to get to the story of why I followed you, but I found you in Search Funder, which is a great community for people who are thinking about acquisition entrepreneurship. Can you walk us down a little bit what led you to acquisition entrepreneurship?
[00:02:11] Ayo Phillips: Sure, absolutely. And again, thanks again for having me. So I’ll rewind back maybe further than I should, but I will do that because it gives context to how I came about this path.
[00:02:23] I grew up in Africa, in Nigeria specifically, and watched my dad worked a job for a really wealthy individual over the course of many years to help them build that business out but, never actually got to own a piece of equity in that business. And he always told us as kids that if you ever got the opportunity to own something, own it.
[00:02:41] And I got an opportunity of a lifetime to move to the United States as a teenager. And that always stuck with me and went to undergrad, had some entrepreneurial experiences there, paid for college with some of it, but that’s not really where I really got the opportunity to kind of really apply some of those things that my dad had always talked to us about into my own life and career going forward.
[00:03:03] That happened more recently for me. So starting with that vision and wish to be an entrepreneur and pursuing just a regular career in corporate America for a while, I just knew that I had to pursue this entrepreneurship path in some way, shape or form, or I would not feel fulfilled. At that time I was married and one of the things that was important to my wife was that any path that I was going to go on to actually do it in a relatively safe way. And so one of the differences between acquisition entrepreneurship and just startup entrepreneurship is you’re buying something that already exists and you’re hopefully improving it, which technically should reduce the risk profile.
[00:03:38] Right? I mean, 1 in 10 venture back companies, the numbers might actually be worse than that, actually succeed. And there’s a lot of money behind them. And so that was one way of thinking about it, minimizing the risk on my part for pursuing this path. The second reason why I decided to pursue acquisition entrepreneurship was just looking at myself and my skills – the things that I was good at, the things I was not so good at, my experiences to the point I wish I decided to move along this path, which was one of leading teams, improving operations, having key performance indicators that we could exceed and surpass not necessarily one of, and a lot of things are starting businesses. One of leading, managing, and hitting goals, exceeding goals, and continue to improve from that perspective.
[00:04:19] So I say those things, my background in Africa, my desire to minimize risks, and then the third piece of looking at my skills that I had acquired over the course of working in the corporate world. It made me feel like Acquisition Entrepreneurship would be the right path.
[00:04:34] A.J. Lawrence: When you talk about your background, because you really do talk from a background of a consultant, you have one of the best bad job experience descriptions on LinkedIn I’ve ever seen. And when I say this, I say this with like someone who’s had bad jobs in the past. Can you tell us a little bit about that experience? Cause I really think it gets to you as an entrepreneur.
[00:04:55] Ayo Phillips: I’m happy to talk about that. So I got a unique opportunity to work at a company called McKinsey. So McKinsey is a global management consulting firm and essentially they provide, you know, high-level advice to CEOs of multinational corporations all around the world. And so I got this unique opportunity to work at the firm and just to sum it up, I was bad at the job. Okay. Let’s just keep it simple.
[00:05:19] Yes. There were a few things that kind of led me to that conclusion. So number one, I didn’t enjoy it. I didn’t enjoy the travel. The work, I would say it was intellectually stimulating, but it wasn’t fulfilling to me because of the background I had come from. I had worked in manufacturing so every day of my working career before this experience, I wore a hat, net and goggles to work and I was working day in and day out with technicians, operators of manufacturing lines, helping to improve processes.
[00:05:47] So working at this 50,000-foot level, theorizing about how things should work versus how they actually worked just did not float my boat. And I was at a point in my career in which I would say early on in your career, I think find a lot of things and experimenting with different jobs and seeing what works for you and what doesn’t work for you is great. But I was at a point in time in my career in which it wasn’t time to experiment. It was time to start settling into the things that I had developed my skills on at that point. Right? So I was roughly 9 or 10 years into my working career at that point, and I knew certain things about what I enjoyed and what I didn’t enjoy.
[00:06:23] I certainly didn’t enjoy this. I definitely worked with some of the best or the smartest people I’ve ever met. I just didn’t feel like I fit in that environment just to be very honest about it. So that’s a little bit about that story and about that job. And it’s really just about assessing fit and realizing: Hey, listen. What am I good at? What will I enjoy doing? What do I want to commit my career to? And all of that kind of ties into how effective a person can be in their role. And I think the later you are in your career or the later a person moves in that career, the more you define that.
[00:06:54] I would say the first five years of your career, try a lot of things. You’re in year 8 through year 12, you should start to know, okay, these are the things I’m great at, maybe the job I’m in doesn’t perfectly fit those. And to start to try to find the things that do fit those roles and responsibilities that you truly believe that you can excel at.
[00:07:09] A.J. Lawrence: I know a lot of people, ex-McKinsey people, who I think feel like you. It’s smart people, it is challenging work, but at the end it doesn’t really feel like a great space, but please McKinsey don’t come after me.
[00:07:22] You had these skills, you talking with your wife realized that the risk profile of acquisition entrepreneurship versus entrepreneurship is sort of the path of 90% of all businesses that have started fail within the first year. It’s like the numbers are so fun, but you hadn’t yet hit the risk profile of the acquisition entrepreneurship because you have a look.
[00:07:48] You didn’t take the self route, you didn’t take the fund route. You kind of crafted in between these roles here. Can you talk about how you moved down that path of acquisition first in your backing and then in the type of company. That you went after.
[00:08:05] Ayo Phillips: Sure. Search funds in general is the big bucket of the different paths you’re talking about. So there’s this acquisition of entrepreneurship and then under that, I would say there’s search funds, right? And then underneath search fund, there are these different paths you can take, so you can sell fund, but you can sell fund transaction. You can go a what I’ll call it traditional search fund route, where you raise capital from a bunch of different investors. And then the path I took is what you call kind of is sponsored search to a certain extent, but partnering with just one partner. So one family to go out and acquire a business that you want.
[00:08:38] I’ll talk about how I decided on that path. So as I pursued acquisition entrepreneurship, one of the things I found was that a lot of the businesses that were being acquired where in spaces that I didn’t have a lot of familiarity with. So people were acquiring businesses in SaaS in the SaaS space, which is a great space, but just not something I was familiar with. Again, I came from a blue collar environment in which, like I said, hard hats, goggles, uniforms the work. And I felt like I could thrive in that environment where it’s service-based type of manufacturing operation. And I think the traditional sources of capital see those things, those areas as the best places to put capital at the time, that is, I would say slowly changing now as there’s more diversity in funding sources, but at that time it wasn’t so obvious.
[00:09:24] So I found this family office actually, they found me because I was leading a group back when I was on an acquisition and entrepreneurship group. And they came looking in and asking questions about, Hey, what is this about, and that. Over the course of two years, they got to know me, I got to know them. We decided that we’re going to partner, go out and acquire the business that I felt would be a fit for my own background and my own skillset. And so that’s what we did. So we partnered up, found this business and acquired it back in 2017.
[00:09:53] A.J. Lawrence: I know your goal is 50 cities tech-enabled. And then let’s talk about maybe we’re skipping the whole concept of the actual business you chose. Let’s get back to the investors and stuff later. Let’s talk about Perfect Surface because it’s right there on your shirt. Can you tell us about the actual acquisition and that process? And then let’s talk business.
[00:10:13] Ayo Phillips: We could spend the rest of this conversation about the acquisition itself, but I’ll keep it short. I searched for almost two years for a business to acquire. Obviously, the market was hot, then it’s way hotter now. So I was coming towards the end, the two year mark and I was thinking, okay, well, I’ve got to close something and hoping that whatever came across my desk would be the one that I would close.
[00:10:32] And I found this business, I got excited about it. So specifically at the time when I acquired it, the business provided what’s called resurfacing and refinishing services to apartment complexes in the city of Houston. So that’s what the business did. And for me, niche meant excitement. Right? Niche meant opportunity.
[00:10:49] When you hear of an industry that you had never heard of before, you get intrigued, at least I get intrigued. I got really intrigued by it and I thought, man, this has to be it. No one else was looking in this space. I need to acquire this business. And so I went through the due diligence process, which in hindsight, there were a lot of things I missed partly on me. And it just goes to the rookie CEO piece and partly on the business owner and him not being transparent about a lot of things. But ended up acquiring this business in August of, at the end July of 2017 was when I acquired the business. So that was the path to acquiring it, the path since has been even more exciting.
[00:11:27] A.J. Lawrence: Yeah. Cause this is where I started paying attention to you. But before we got into to get into that one, you were saying you were kind of getting to this two year and feeling the need. Were the investors pushing or was this an internal need to kind of-
[00:11:40] Ayo Phillips: No, my investors, no. My family office partner was not pushing. I mean, I could have searched for longer, right? But just from a personal perspective and setting goals and kind of looking at peers who were acquiring or not acquiring and then making different decisions about, okay, what path are we taking? I just felt like the two year mark was kind of a reasonable time to pursue this and pursue this wholeheartedly to find an acquisition to move forward with. Again, I was married, my wife was pregnant with our second son, right? And we were in limbo. We were living in a rented apartment in Chicago. The same apartment that we lived in for the past four years was getting too small for us.
[00:12:19] We didn’t know. Okay, where should we be moving? We were expecting a baby. So the baby came 10 days after the deal closed. This is all that was going on in my life at the time. So there needed to be some clarity around what path we were taking, right. To give us as a family, some stability to put it that way.
[00:12:35] A.J. Lawrence: I started my last company that I sold during the pregnancy of our second child. I just had a guest on the show where she had started her company that’s growing like crazy based upon the experience of when she decided while pregnant with the second child. I wonder it would be cool to kind of get a few of us entrepreneurs who’ve used the second child because it’s like the first child you have no clue. The second one, not that we’re experts, but it’s like, yeah, I’m not going to sleep.
[00:13:02] Ayo Phillips: Yes, it was an incredible experience for us. When our second son was born, the businesses is in Houston, we were still living in Chicago. So I’m flying back and forth between Houston and Chicago, living in an Airbnb down in Houston and trying to run I call the business my second baby. So I really have two babies at that point, right? So with my first one, three. So I’m trying to kind of tend to this new business baby, and then like the actual human baby that we just had and balancing all of that. I mean, I don’t remember 90% of what happened in those three months. I could tell you that it was just living from moment to moment.
[00:13:37] I’m just trying to maximize each moment you are in and just acknowledging that you will get through it, but you can’t get through it by thinking too far ahead. You just have to deal with what’s happening right in front of you. We had a hiring experience during that period actually was 10 days after I acquired the business 12 days or so was when our second son was born.
[00:13:56] I thought I was gonna fly for the birth. We had scheduled the birth for health reasons for my wife, and some other reasons. We’ve scheduled the birth, thought I was going to fly in and then fly right out probably three days later. Well, the birthing go as planned and my wife was in the ICU for the next seven days. And obviously I was in the ICU with her during that period of time, as you would expect. And so taking calls from the ICU, and I apologize to doctors, I always apologize to doctors when I tell this story, because I think calls from the ICU, one of those calls was from the office stating that, Hey, we can’t process checks for your technicians because the new bank would not acknowledge that the transition had happened and so we couldn’t process checks. And so it was quite an experience for sure, but living through that period of time.
[00:14:37] A.J. Lawrence: Let me ask one thing and then let’s kind of get into some of these experiences you found when doing it, or let’s set this up with, you had mentioned that when you did due diligence or through your process, that there were some issues, did you do all the due diligence yourself?
[00:14:50] Ayo Phillips: I did all the operational due diligence myself. The legal right? I mean, those thing you take care of the way you’re supposed to, but the operational due diligence, I did essentially myself with some hired help to support that process.
[00:15:03] A.J. Lawrence: You’re also doing something that I think is incredibly brave. You’re building in public. I wanted to reference the Rookie CEO, which is your site about your experiences as this person buying the company and growing it because you have in the search world, you have one of the best viral stories of what happens when you buy a company and all of a sudden. Can you tell us about the strip club?
[00:15:31] Ayo Phillips: Second off. Is that the strip club? Yes. Yes.
[00:15:40] A.J. Lawrence: Yeah, please keep it short. You don’t have to go too far. You’re legendary in the small world of search acquisition
[00:15:50] Ayo Phillips: Right. So basically I found out that the primary customer acquisition tool for this business was weekly strip club meetings with key customers. And I did not uncover that during due diligence.
[00:16:05] A.J. Lawrence: This was after the acquisition
[00:16:06] Ayo Phillips: Yes, this was long after diligence. And when I started to see my customer count recede and wondering, _hey, is it the quality? Is it the price? What’s the problem_. And I found that out much later. In fact, the way I actually found out about it was when I was trying to make an acquisition of a competitor within the market. And he kind of put all the dots together for me about why I was losing customers and how it came to be that this company had acquired all those customers and was able to charge them a premium price and all of that.
[00:16:33] My first couple of weeks running. I had already started to get some inklings of _Oh man, there are some interesting things about how this business used to be run_. And one of those inklings came from one of the field supervisors who I went on a ride along with and he proceeded to tell me that one of the ways that customers were acquired was that the ex-owner would hire really great looking women and send them off to properties, to customer locations, who our customers are primary maintenance or maintenance man or facility managers. And they would not be selling the service.
[00:17:13] So that was my first inkling that something was wrong. And then I later found out about the strip club cost of acquisition and how say to be serious about it. I would say that I think one of the things that’s really important to pay attention to in businesses like this is, I think it’s easy to kind of look at a business from a customer concentration perspective.
[00:17:31] A.J. Lawrence: Yes.
[00:17:31] Ayo Phillips: I think it’s more important to look at a business, a small business from a relationship concentration perspective. So what does that mean? It means that even if a customer is only 2% of your revenue, you want to understand how the relationships are maintained in the longterm. And you want to make sure that they’re maintained in a way that you can sustain, and you want to make sure that there’s no concentration on most relationships.
[00:17:53] So for instance, the example I usually give is if the way the business you’re buying, the owner maintain relationships, was through hanging out with his customers at the golf club every week. You better like golf. You better love golf. Because even if each customer is 2% of your revenue, I mean, if they are all hanging out together and they all hanging out with your seller or your owner at the golf club, you better be able to afford to join the golf club and be willing to spend a ton of your time there or else you could see those customers leave because you’re not maintaining the relationship.
[00:18:22] So I think that’s a critical thing to look at when you’re buying a sub call it a sub $10 million revenue business. Actually probably for revenues higher than that as well. You probably need to watch out for relationship concentration, maybe over and beyond customer concentration.
[00:18:38] A.J. Lawrence: Yeah, because I think so often we talk about customer.
[00:18:41] When you’re looking at an acquisition, as someone who is going through the process myself, to kind of add into my collection of businesses, things I do. You talk about customer, concentration, billable, all these things, but the idea of how you keep the relationships. Yeah. It’s the country club for the more traditional, it’s the online business groups for different things. It’s how did they come about? And that tie, you may be very much walking to a situation where the guy who had the business basically was like, Hey, let’s go down to the crazy work, I don’t know the name. You know, I’m no longer in my twenties saying, yeah, that is, that’s a, yeah, that’s a good kind of additional thought process around it.
[00:19:28] Why did you decide to build them public? What’s the reasoning for Rookie CEO? You bring a lot of intelligent processes and thoughts into it, but with very deep, straight forward, and very interesting stories to frame everything around. So why are you building in public here?
[00:19:45] Ayo Phillips: There was a lot that went into kind of making the decision to essentially be public with my experiences. So, one of the primary drivers was in a sense as a first time CEO, there are so many things that no one ever tells you about what the actual experience is going to be like, right. Or what it is, right. And obviously we see these success stories all over the place of, Oh yeah, I bought it and I sold it in three years or I was out of it. And one of the things that I thought was important to inject into the conversation was how sometimes it doesn’t start out the way you expect it to, and the things that you need to do to work through those issues. And frankly, there’s an aspect of me that just looks at this and says, Listen, I’m a first time CEO. I’m trying to learn the ropes of doing this. I haven’t been doing this for decades and decades and decades. I don’t have all these experiences. So I looked at it as a two-way street of me injecting the conversation with some realism around how things are, right, at least from my perspective, but also a two way street of being able to glean insights from wise people who have been extremely successful at it as well.
[00:20:48] That was the initial and wants to put forward with this. I’ve been journaling about my experience for like years but I just never, I just never made a lot of it public prior to COVID. I mean, the business was growing at an astronomical rate. We had been through 10 or 12 crises to get us to that point and then COVID happened.
[00:21:07] And honestly, it was a disappointment and it made me feel like, Man, am I about to go through my 12th crisis and probably go to navigate through this. And honestly, there was a sense of loneliness and a sense of just reaching for something, something that would make me feel like, okay, well there are other people out there that are also working through the circumstances because it really did feel lonely.
[00:21:30] And so I said, okay, well, now’s the time I’m going to put this stuff out there and just see there are other people dealing with it. And what kind of wisdom I can gleam from experienced people like you and others who have run and grown and built businesses. And so that’s how it started.
[00:21:44] A.J. Lawrence: I appreciate because I’ve dabbled in acquisitions. What I had in my last agency kind of backed in, I acquired some teams that were more just like a group of professionals working together. And then I realized I wanted to get more serious. I bought this podcast, but in looking at it I kind of appreciate a lot of your thinking because it is this reality.
[00:22:03] I’ve had other people who’ve gone through it but you bring to light, like, yes, it’s cool, it’s fun, it has all these things, but you know what, doesn’t matter how good the kid behaves most of the time. There’s always going to be moments where you’re like, please shoot me. Just please.
[00:22:22] Ayo Phillips: Yes
[00:22:22] A.J. Lawrence: But you have to absorb it and bring an intelligent manner. And you, the way you’ve approached it and yes, I know this is a mind sign of your journaling and bringing your great intellect to the matter, but it is great how you kind of talk about like, well, okay, customer concentration, this thing, the relationship. And then I have to look at diversifying product that you bring in this outside expertise and kind of let it flow.
[00:22:47] You were talking about how you were growing and I love your slogan about the company. Since you’ve bought it, what is now the goal for Perfect Surface? Are you organically growing it? Are you going to acquire, what is this process now to become 50 cities tech-enabled?
[00:23:04] Ayo Phillips: Thanks for asking that question. Right now at Perfect Surface my goal, like you said, is to turn it into a tech-enabled platform and for providing what we call multifamily and single family turnover services. So, what that is essentially is that we go into apartment complexes and single family rentals. And when a resident moves out, there are certain services that need to be provided. So it needs to be painted, there are repairs that need to happen. It needs to be clean, but there’s carpet cleaning that happens that flooring that happens.
[00:23:35] We want to be the sole source to provide those services in a coordinated way for institutional clients so owners of commercially-managed, single family rentals and multi-family rentals as well. So that’s the longterm objective of where we’re going and to do that we are in the process of building a technology tool that would allow us to coordinate those efforts for property managers.
[00:23:59] Property managers today have a heck of a time coordinating the work between multiple different vendors. So they have a painter, they have for the guy that’s going to do the repairs and they have someone else that’s going to do the cleaning. They’re on the phone constantly, working the lines to get those units. And we want to take that work off their shoulders and onto ours and allow them to focus in on what is primary revenue generator for them, which is lease-ups, right? Getting those units leased up as quickly as possible, their marketing efforts, their resident retention efforts while we take on this work of, Hey, we’re going to turn that unit in five days for you. All you need to do is give us the key and we’ll give you the key back when it’s done. In five days, the unit is on the market, which reduces their vacancy rates and keeps the cap rates at a reasonable level, which ultimately increases asset value. So that’s the goal for us. And so we’re slowly building a technology tool and we’ve transitioned our business from the original resurfacing business. Now we’re providing these services now in three cities, up from one, and really where really deep now into the single family rental space, which we started initially the multi-family space.
[00:25:04] Most of it has been organic. We did make a small acquisition, back in 2019. But the bulk of what we’ve done has been organic to this point. It’s trying to get us to where we are. And so, excuse me?
[00:25:15] A.J. Lawrence: Funded through free cash flow?
[00:25:17] Ayo Phillips: Yes, funded through our cash flow.
[00:25:19] A.J. Lawrence: I originally was asking, so my soul has to know .What is now the involvement of your family partner or your sponsor partner, the family fund? Is it purely investing or is it, what are they? What’s the relationship like now?
[00:25:33] Ayo Phillips: That’s a great question. So I have a quarterly board meeting which they are part of obviously, and we talk about what’s going on with the business and they have served as a great support for me. Just helping to bring perspective and just being there. You talk about kind of mitigating risk, I think one of the things that’s good about having a partner in these deals, and I respect yourself on that folks a lot is that in my case, I have someone that I at least can talk to. They may not have all the answers, but they are there and they can be a back stuff for certain things. So that’s what they are today.
[00:26:06] I would say their role is evolving now as I transition from this old school, old world business into becoming more of a tech-enabled business. Because obviously the depth and knowledge and the depth and skills aren’t necessarily there. And so we’re starting to look to bring in other well-skilled partners that have a deep understanding of how you build out a tech-enabled business and platform, the things you should focus on that create the best value. So frankly, I’m in search of those type of people.
[00:26:36] Now I’m doing some outreach and kind of figure out, Okay, who are the people that I’d like to include either as advisors or as potential board members that could help me accelerate the path of this journey that we’re on.
[00:26:49] A.J. Lawrence: Off channel, let’s talk about that a little bit, because I do know some people in the space. I think some of it is the specifics of what you’re looking for. I’ve seen so many companies go after a similar thing, but from your angle, it’s so interesting. I have nothing in real estate other than being a passive investor in other people’s stuff.
[00:27:06] But my brother lives and breathe real estate. He puts all his money in the houses. And it’s funny because the things you’ve talked about, my sister works for one of those management companies where she is the property manager. So like everything you’re talking about and doing, it’s like, that’s such a great angle because when I’ve heard about them talking about pain points, it is specifically around the services to turn around or get things ready or deal with stuff. I’ve heard that pain point from people on the other side and you are dealing with it directly. So that is, that’s pretty cool. Sorry, just kind of a little off there, but in talking about now that you’re trying to expand this, actually, one other question.
[00:27:48] Sorry, I wanted to ask about the longer-term big picture, but for you, what is really interesting out there now that you’re looking like. Is it where the tech is allowing you? Is it the change in the way that we now interact more? We don’t have as much in-person. What’s really interesting to you that you hope to bring more into your your entrepreneurial efforts?
[00:28:11] Ayo Phillips: That’s an interesting question. So there are elements of our business that feel like we’ll continue to remain in the old way. Right? I mean, we still, a lot of the efficiencies that we’ve always gleaned has been from being together even though we’re working remotely now and we work pretty well. But, it seems like some things become new, but some things stay the same.
[00:28:32] I feel like at some point we are going to get back into an in-person working environment as the primary way that we continue to interact. But I will say that one of the things that intrigues me now, as I move forward specifically with my business is essentially what I’m working on now, which I mean, people talk about this all the time whether it’s on Twitter or LinkedIn. It is this whole idea that there is an actual opportunity in these old school businesses, especially the ones that are off the beaten path, like the one I’m in. Where you can find a way to build a technology stack that dramatically improves the efficiencies and create value both for the business and for the customer.
[00:29:18] I’d like to emphasize industries that are off the beaten path. So an industry that’s not off the beaten path, it’s plumbing or HVHC right. I mean, those businesses have already been optimized because people have already identified that these opportunities exist. So if I were to say for anyone who’s listening to this, who is thinking what areas can we go into and how can we add value? I would find businesses that are off the beaten path, industries that are off the beaten path, who haven’t yet gone on this technology optimization path and find a way to inject some of that into those business processes and glean efficiencies from doing those things.
[00:29:57] And from my experience, it does take some time. So you actually have to get into the business. You have to spend time. You can have thesis going in, but you have to actually spend a year, two years, three years really understanding that, appreciate that at an intricate level, in order to be able to build the appropriate tool for that industry.
[00:30:13] One industry where I’ve seen it done or where it’s being done right now is kind of the auto rescue world, right. So where you lock your key in your car and someone needs to be dispatched out to you, or yeah so you’re on the side of the freeway. That’s an industry that used to be notoriously old school and that has evolved significantly.
[00:30:33] I know the place where it’s being done and be done incredibly well is trucking. Right? So trucking was probably at the leading edge of technology, even though it’s like an old school, like back office. People don’t talk about it much, but the dispatching capabilities, complexity around managing contractors, payment terms between customers and independent contractor relationship. I mean, the trucking industry is doing an incredible job at using technology to make their world more efficient. And there’s several other industries like that where people can find and dig in and build something that doesn’t exist and essentially create value.
[00:31:10] A.J. Lawrence: So, on your journey is Perfect Surface going to build this tech enabled platform for the real estate industry? Or are you going to expand into other, are you going to go deeper? Or are you going to go wider over time?
[00:31:26] Ayo Phillips: So interestingly, we’re primarily focused on multifamily and single family residences so deeper. So I’m not interested in becoming a tech company, okay. I want to make that clear. A lot of times the tech is sexy and people want to kind of move into that. That’s great. I mean, for me, I look at tech as a tool, not as the end, so it’s technology to provide better services, not to personally become a tech company myself.
[00:31:50] So whatever tools we’re developing are about making us better at what we do and making those more efficient than our competitors could ever be. And giving us a competitive advantage that doesn’t exist today in a real way today in our business, right. If you think about it, right? Painting, handyman services, I mean those are commoditized operations, right.
[00:32:11] The way you create a moat is by doing something that your mom and pop shop or the guy out of the back of his trunk can’t do, or he’s not interested in doing. And so that’s part of what the evolution of our business is about. It’s about creating that moat that makes people say, Yep, they add the ones we want to use and we’re willing to pay for that service because they make it way more efficient for us, right.
[00:32:35] I can pull up the thing on my app and schedule the job versus me having to pick up the phone and talk to five different vendors. So specific to your question, it’s more deeper, right? And it’s tech enabled and not tech. And that’s how I think about it. Well, for our business,
[00:32:50] A.J. Lawrence: So in building, you’ve talked about sort of how your father’s experience led you to think about ownership versus, and I’ll say not that working for McKinsey is that type of situation, but obviously, it’s similar thing. So instead of being that type of person, you’ve decided that you’ve gone down this path and, you know, living the life of being an entrepreneur. You’re a father, you’re doing this, obviously, if you’re talking about wife and the partnership you guys have, you talked about your kids, what is a legacy that you hope to be building from here? And I don’t mean what statues or what libraries, but what is it that you want to be sort of remembered by from this entrepreneur journey you’re on here.
[00:33:36] Ayo Phillips: Oh my gosh.
[00:33:37] A.J. Lawrence: I also want to put one other thing cause I’ll gild the lily for you because you also referenced how important it is to make sure that the people work for you have work.
[00:33:48] Ayo Phillips: Right
[00:33:49] A.J. Lawrence: I’m just setting you up here, but yeah
[00:33:53] Ayo Phillips: No, I appreciate that. So I think that huh, this is such a hard question. I always tell my employees, and I ask them to hold me accountable to this, is that anyone who works for us is better by the time they decide to leave or continue to work with us. So there should be no one that comes within the sphere of this company that is not better for it.
[00:34:13] So that’s one piece of how I view the world in general. But I would say another thing that is important to me is that there’s varying levels of transparency that people like to live out or give or be associated with. And I want to be associated with the highest level of transparency that is possible without compromising relationships and without compromising integrity and without compromising what we stand for.
[00:34:38] So the conversation around McKinsey, as an example, it’s okay to say that I was bad at that job. There’s nothing wrong with that. We are all bad at something, atmany things. I’m terrible at a lot of things. And it’s okay to admit that I, I made an acquisition that had a lot of problems with it and still has issues that we’re dealing with. I think it’s okay to say those things. And I think not enough of those stories get told. And I think we fast forward too much to the end of, Oh, yes, it was three years and it was a success story. Or at someone’s 30 year mark, they rewind and miss all the planes that they have to go through to reach that and go.
[00:35:13] I like to think of myself I still always been on the journey. I mean, I’m literally still on the journey. I’m not some wealthy guy that’s like reflecting back on some experiences, right? I am a little younger journey. But the end of the story is not told, it’s not known. It’s not, I’m not A.J. who’s kind of a .
[00:35:39] I understand I’m taking a risk by sharing some of these things along the journey. But I do think where a lot of people glean their knowledge from not just from oh, this guy was successful. And so he’s going to follow his exact path. I mean, you can learn more from my failures that you can from my successes.
[00:35:54] And I think that’s an incredibly important thing that needs to be injected more into the world. And one of the things that is interesting is that the Rookie CEO name, right. I mean, who actually wants to be known as a rookie CEO, right. Where you get to the point of being a CEO, it’s kinda like, yeah, I’m a CEO. I’m sitting right on my purse as the CEO. And that was part of the thought process behind it was no, I’m more than happy to be known as a rookie CEO. Because it’s a journey, it’s not the destination and so you can see I get a little passionate about that, but that’s how I think about things and how I think about the world.
[00:36:28] A.J. Lawrence: I like it so much because I am playing around in the tech space and sort of the digital look, independent location and the different startups. It’s always been one of my jokes that almost everyday I’m talking to someone who’s CEO of something. And I’m like, so how many people? Well, it’s just me. It’s like these people have these titles. It’s like, I mean, because one, I think it helps perspective is very important because. This is such a crazy journey.
[00:36:55] I know from my own experience. My own ego got out of control when we had a little bit of success and then it crashed when we got banged and it was like, wait a second. Nothing really changed. Really, it was just up and down. So perspective is really important, but also you’re setting yourself up perfectly for an Amazon bestselling business book right here.
[00:37:17] It’s like who? The rookie CEO, my lessons. You’re going to be giving lectures at business schools. Let’s do a whole campaign around this because this is a number one business book. 1, 2, 3, once you’re ready.
[00:37:27] Ayo Phillips: Thanks A.J., I appreciate you saying that. Thank you.
[00:37:31] A.J. Lawrence: I super appreciate you coming on the show. This was a lot of fun, and I have learned a lot from you both from reading your materials and then talking to you.
[00:37:42] And I know our audience will and the shownotes, we’ll definitely have information about how to follow you. But it was wonderful, and I hope you would be willing to come back on the show again soon because you’re on such a cool journey. I can’t wait to see where you go with this. This has been so much fun having you.
[00:37:58] Ayo Phillips: Thanks so much, A.J., really, really appreciate the opportunity. And it’s been definitely a fun conversation.
[00:38:03] A.J. Lawrence: Everyone, I hope you enjoyed today’s guest. I’ve learned a lot from talking to Ayo and I hope you have too.
[00:38:09] The top three things I believe we can all take away from Ayo’s journey is, he was focused on acquisition entrepreneurship as a risk mitigating choice. Especially given his family life and where he want to go with his long-term plans. Similar to what we heard from previous guests like Param and Walker.
[00:38:26] Two, he’s using the concept of sharing his Rookie CEO stories as an opportunity to build in public, very common concept that a lot of entrepreneurs are using. His focus is really on sharing these stories so he can get advice from others, but also to keep his own world and perspective. As someone who’s been riding this roller coaster for quite a bit, I know how easy it is to lose perspective when things are going well. You think you are the king of the world yet when things don’t go so well. I know I personally crashed hard and the way that I was going through this is something I’m going to try the practice more in the future because his efforts are great way to grow, but also keeping the experience and perspective.
[00:39:04] Lastly, his focus on near extreme niching down. He kind of looked at other traditional businesses to bring his a long-term idea of tech enabling tool. But he realized that the further down he niche, the less likely you would have to face competitors. When he was looking at the acquisition of the talent layer for hiring and for his future growth efforts, market choice is a very important part of what it is to be an entrepreneur. And we should all pay more attention to it as we focus on what we’re trying to be good at and what we’re trying to do as entrepreneurs.
[00:39:36] So perhaps one day, we’ll see Ayo’s name on the bestseller list. I’ll be buying his book when it comes out, when he writes it. What stories do you want him to share? So if you want to learn more about the Rookie CEO journey, find out how to connect with Ayo, his podcast or his company. Check out the links in the show notes below. And while you’re here, why not follow Beyond 8 Figures on social media? So you can be part of a strong community of rising entrepreneurs. We’d love to hear your insights on the Rookie CEO’s journey, his business acquisition, and any entrepreneurship misconceptions you believe are out there. So see you there. Thank you so much for listening. I hope you have a wonderful day and I can’t wait to talk to you again soon. Goodbye.
[00:40:26] This episode of Beyond 8 Figures is over, but your journey as an entrepreneur continues. So if we can help you with anything, please just let us know. And if you liked this episode, please share it with someone who might learn from it. Until next time, keep growing and find the joy in your journey. This is A.J., and I’ll be talking to you soon. Bye bye.