BRIAN VANDERHEYDEN - OWNER OF RICHMOND ALARM COMPANY - EP. 30
My conversation with ^[redacted], owner of Richmond Alarm Company on:
- Acquiring a 2nd generation family business as a searcher
- Dynamics of the security industry
- How he's built his team
- And why he admires Chick-fil-A
Listen weekly and subscribe on iTunes, Spotify, Google Podcasts, Stitcher, Breaker, and TuneIn.
Visit our page for more information and the full episode transcript.
Think Like an Owner Sponsors
Live Oak Bank - Live Oak Bank is a seasoned SBA lender focused on search funds, independent sponsors, private equity firms, and individuals looking to acquire small companies. Live Oak has closed billions of dollars in SBA financing and is actively looking to help more small company investors across the country. If you are in the process of acquiring a company or thinking about starting a search, contact Live Oak directly to start a conversation at liveoakbank.com/contactus.
Hood & Strong, LLP - Hood & Strong is a CPA firm with a long history of working with search funds and private equity firms on diligence, assurance, tax services, and more. Hood & Strong is highly skilled in working with search funds, providing quality of earnings and due diligence services during the search, along with assurance and tax services post-acquisition. They offer a unique way to approach acquisition diligence and manage costs effectively. To learn more about how Hood & Strong can help your search, acquisition, and beyond, please email one of their partners Jerry Zhou at [redacted]
Barrel - Barrel is a digital marketing agency that helps companies create revenue-generating websites, emails, and marketing campaigns. Clients include L’Oreal, ScottsMiracle-Gro, Barry’s, and SmartyPants Vitamins. Barrel has extensive experience working with venture capital and private equity firms to help audit, optimize, and grow their portfolio brands. To learn more about Barrel, visit barrelny.com/alex or email [redacted] and mention Think Like an Owner podcast.
Interested in sponsoring? Send me an email at [redacted]
Thank you for joining us. This is awesome. I listened to your interview with The Authentic Leadership Podcast and The Polsky Center, which I'll link to below. They have some good background a little bit on your search and how you've progressed through COVID and whatnot. We'll link to those, and people can listen to those. I recommend listening to them first. Would you give us the quick two to three minute background of your past career, and then your time thinking about searching, and then your search, and then finding Richmond Alarm?
Thanks for having me. I spent about 10 years at a large medical device and biotech company in a variety of roles. I started out in a financial role, and then worked my way into product development, and then ultimately into M&A, and was continuing to search for what my passion was, or what I really wanted to do with my career. At that point in time, just sort of serendipitously, was attending The University of Chicago. Met somebody who had formed a search fund. That was the first I had heard of it. In fact, it was pitched as something slightly different. Really, he introduced me to some investors. One thing led to another. I ultimately took the leap because I felt that I wanted to do something entrepreneurial at that stage in my life. It was not starting a business from scratch. It was really finding a great business backed by really solid investors to take the business to the next level.
Again, it was really just fortunate, I guess, to find that opportunity at that point in my life. I ended up raising the search fund in the middle of[redacted]Searched until we acquired Richmond Alarm Company in mid[redacted]We've been running the company for just over three years now. Excellent. Talk a little bit more about the company, Richmond Alarms. It's been around over 70 years. Has it been through a few family generations, then?
It has, yeah. So, it was started by a gentleman who ended up passing the business off to his two sons. They ran the business for the better part of 40+ years. We acquired the business, again, in[redacted]At that time, the business was exactly 70 years old. We acquired it from those two brothers that were running the business, and there was a third generation in the business as well. They've been awesome to partner up with. Again, they bring a ton of expertise. Somebody who's my age has 20 years of experience, not only in this industry, but in this company. That's been really cool to partner with a family, so to speak. With going from the first generation to the second generation, what did the two sons do to kind of make their mark on the business and improve from the first generation? Then what have you seen as your mark on the company so far?
It's tough to say, going back. I want to say, when the brothers took over the business from their dad, that the company had about five employees. I could be wrong on that, but plus/minus it's directionally correct. They just built a really solid customer service business over a period of 40 years based on doing things the right way, taking care of customers, and then having technical expertise or knowledge of what they were doing. I mean, I guess that all that's to say I can't speak to the first generation of it, but the second generation, they just built a business the right way, and the way that any founder should want to build it.
I guess, as we look to the sort of third phase of that, so when I came into the business, what we've done is we've done a variety of things, not the least of which as we've applied this traction or EOS process to the business. Brought on a CFO. We've invested heavily in the systems and in training. I think we took what was sort of this ... I'll call it this raw, really strong customer service business, and try to apply different investments to it to take it to the next level. That's it. I mean, there was a reason we bought into a good business, because we didn't want to have to reinvent the wheel, so to speak. I guess, a few years in, as I look back, those are probably the major drivers of the growth and development of this now 73 year old business.
In 73 years, I imagine there's been a ton of technological change for alarms and security. What technology existed 70 years ago that the company first started using, and then with each leap, how did the company adjust to it? Then what are you seeing today as your next leap that you have to make?
It's really crazy. We have ... I'll call it a museum, in the front of our facility, so you walk in to ... You see the old equipment that was installed, foil wrapping that would go around the windows. They used to have a loop that would start at one end of the alarm, go throughout any facility, and basically be an electrical circuit that goes through the entire building. If that electrical circuit was broken, that would trigger the alarm. Back in the day, they would have a bell, or some type of siren, or whatever it was, on the outside of the building, which would alert the police force and neighbors that there was an alarm issue at a facility. That was back in the day.
So, nowadays, there are still audible alarms. Those are obviously very impactful for people that are trying to break into a facility, but now that signals transmits right to our 24/7 dispatch center. We can get on the phone with the owners of the property to verify if there was an issue. We can get on the phone with fire, police, and dispatch authorities as necessary when the owners aren't there to take action. That's been sort of the historical development, which brings us to what we see nowadays: very, very large sales numbers around access control. People want these access control key cards to enter and exit buildings. They don't want to deal with locks anymore. Alongside that, we see a lot of camera sales, so it's not just security and fire monitoring, but people want to be able to watch who's on their property, have a recording of that. Transmit that to the cloud, and then be able to act on it. That's sort of the most recent transition.
Then, where it goes from here, I think it's just going to be very interesting. In the residential market, there's been a lot of do it yourself innovation. You've heard of SimpliSafe, and Frontpoint, and all these other companies that are just drop shipping equipment to a home. Then they're installing it. Nest and Ring are others. You see proliferation of that on the residential side. Not so much on the commercial side.
Commercial, the cutting edge, or the next wave of innovation, is more around smart access control tied into a camera system, facial recognition, AI recognition to determine who's on the property. Should they be on the property? If not, take some form of action, whether that's notification of owners of the property, or authorities as needed. In our previous call, you mentioned cyber security a little bit. What innovations do you see as becoming the base level of service that's expected, versus things that are becoming available now, but are going to be more optional? They might like it, or they might not. They might choose to go with it or not. What do you see as the two types of technology in each category?
Yeah, I think it's more. As we look at security itself, it's more security as a service. There are things right now that people ... Guard tours were taking place at parking facilities and other buildings. Those can be replaced by video capabilities and people watching remotely. As it pertains to cyber security, certainly a glaring need for that. I think whether we're the best provider of that or someone else probably remains to be seen. A lot of that will depend on what type of IT knowledge is required to fulfill that service, and then also what type of equipment is required.
We've sort of built our business based on providing great equipment, but really it's a service business, so it's that high end customer touch. Being able to install it the right way, know exactly what's wrong when something does break, versus ... At least the outsourced IT folks that we talk to, they can get into a computer system, diagnose an issue. They set up firewalls and protocols to prevent threats from happening. It's slightly different, so I guess it remains to be seen whether we're the best providers of that or not, or whether we invest in that space, acquire into it. We'll see.
When you're looking at competing with SimpliSafe and these other home security businesses, obviously with companies that are that big and with that scale, there's going to be things that they're going to do really well, and there's going to be things that you could probably do better than they could. Where do you see as the opportunities for Richmond Alarm to compete effectively? Within which services they offer, with the direct to consumer alarms and the cameras, maybe they do that better, so maybe you don't invest as much in that. But with in person patrols and more elaborate systems, you're obviously going to be better than them at that, so you have that advantage. What kind of advantages do you see over someone like SimpliSafe where, even though the company is huge, you're still going to be better than them at certain services?
I think where we win all day against that type of service is when somebody appreciates an expert doing the work for them. I equate this. There's growth. Let's take landscape management as an example, and this is even in the residential market. There's been very significant growth in people that just say, "I don't want to mow the grass anymore. I want someone to do it for me." Those people are totally capable of mowing the grass. If they probably broke down the cost per hour, it's still probably worth it for them to mow the grass. They just don't want to mow the grass, so that's why you see the growth of that market in particular.
I think the same exists on alarms, too, although there's another component to it. We have all those same elements, except there's just a certain demographic, let's call it. Although, it's wide ranging across multiple demographics. A certain mentality that people don't want to do that work. They don't want to install an alarm system in their own house, for fear that they might be doing it incorrectly. It might not communicate properly to the central station in case something happens. That's where we really come in. Definitely on those higher end systems. There's no question that that's really difficult to have SimpliSafe ship out all of those components. Do it right. Set it up properly. I haven't heard of that working yet.
Even on the smaller scale, you're looking at two doors, a few motion detectors in the house. A very simplified system. I'll call it a very basic system. Again, there's a certain group, a certain population that wants to install it themselves, sort of tech advanced. The argument back in the day was millennials would want to have a DIY system, because they would want to install it themselves. Well, I know plenty of millennials that say, "I don't want anything to do with it. Just install it for me." I don't think it's necessarily generational as it is more just personal preference. Anybody that wants that high touch service with guys. Our average service technician has 23 years of experience. They know exactly what they're doing. They've watched the technology over time. I think that's really where we win.
Yeah, especially with the desire to have somebody present who can come to your home or your office and install it for you who is an expert. Having that hands on person is really important throughout the pandemic. You talked about this on The Polsky Center Podcast, how you've had to adapt each of your services that used to be in person, that now have to be digital. I'd love for you to provide a little more information about how that's gone. Then how many of those services have been able to transition to digital smoothly? How have you maintained culture throughout this, too?
Yeah, I think we're able to avoid some service calls, just based on diagnosing issues. We always were able to diagnose the issues before we went out to the house. I think nowadays people are asking if we can solve it without coming out to their house, so that's been good. We've probably saved some people some money on that regard, so that's always a plus. I will say that that was, let's call it, April, May, maybe even some June timeframe of 2020 where that happened. Now, people just want someone to come visit. Like you said, when the alarm is beeping, you just want a professional that knows exactly what key codes to punch in and how to manipulate the system to get it to stop and work properly. One thing we've noticed is there's some people that'll take these remote phone calls, and they do want that assistance that they're looking to save some money, and that's okay. But, for the most part, those have died down, and people just want us in their home. They want to know that we're there helping them with their technology. It's actually been really fulfilling on that regard.
In terms of how we've maintained culture through COVID, it's tough. I think it's tough in that there's a lot of negativity out in the world right now, for a variety of reasons. What we try to do is focus back on what we're doing with the customers. We had a great story the other day. We had a dispatch on a fire alarm that we called, a real fire. Critique in the industry is there's some false alarms, but real fire. The person was out for a walk. We ended up effectively. We dispatched the fire department, and they were out there within minutes. They contained the fire. There ended up being two disabled people in the home at the time. Likely saved their lives. It all comes back to that. The more that we've been able to focus on the benefit that we're providing to the customers despite all the negativity that's taking place in the world, that's what our employees really resonate with. Frankly, that's why they're here to begin with anyway. It's why they do what they do. That's how we're trying to maintain the culture.
We've had all employee meetings every quarter. We had a desire to do those, because if anybody has the virus, we don't want to infect the entire population. We've held off on those, but we've been able to do things. We called one of them Tailgate Tuesday, where all the technicians came in. We had lunch outside. Packaged lunch, so everything was packaged. We didn't touch anything. It was all COVID friendly, so to speak. We have a giant parking lot, so we just all got out in the parking lot and got to shoot the breeze a little bit. Have some lunch. It was just a good, heartwarming experience relative to what's taking place in the world. Honestly, if there's any ideas, we're open to them. We've just tried to keep it loose and light.
Yeah, it sounds like you've developed quite the culture, and it sounds like people trust you, too. I wonder, how long did it take, when you first bought the business, to get that trust? Also, in an industry that has some technical aspect to it, or a pretty major technical aspect, how long did it take you to mesh with the team?
I guess I sort of admitted defeat upfront on the technical aspects and just said, "I'm never going to get up to where you guys are technically." I had comfort in the fact. It probably provided them comfort, too, to say, "Look. There's things that I'm going to focus on in running the business, which is let's provide the capital. Let's put some things in place to make sure we're measuring the right things for the customers. Let's invest in the right areas. Let's hire and bring on new really strong talent." Those are things that I can focus on if I'm not having to focus on technical elements of the business. There was sort of this harmony right off the bat where I was very transparent. I don't want to say you sort of fall on the sword about it. I know what I know, and I know strengths and weaknesses, so let's just kind of leave it at that. I think people resonated with that. I think they respected that I wasn't coming in trying to act like I can learn as much as they know, so that was good.
In terms of how you build that trust, I don't know that I have a silver bullet for it. I've always just tried to be really transparent and honest with the employees at all points in time. I remember, this is going back about a year, just over a year. We had a town hall meeting, and I solicited questions upfront. People gave me all sorts of things. Why was this person let go? Are you going to sell the company? What do you really think about the way our company performs? I knew, in asking for open questions, that I wouldn't be able to dodge anything. That's kind of why I did it, because I think that transparency goes a long way to building trust. The more you can be real in front of the people and answer their question without a political roundabout answer, you can build trust that way. That's what we've tried to do. I think it's worked out. I thoroughly enjoy working with the team here, and I think they enjoy working with me as well. We have a lot of fun. Those are just some of the things that we've tried to do that I think have worked.
You said the two brothers ... At least one of the brothers still has a role in the business. What was their plan, after closing, with the business?
One of the brothers wanted to retire. That was sort of why I was called in. He wanted to retire. The other brother was ... I guess I'll call it indifferent to whether he was going to move on or not. But, really, he wanted to stay in the business. He loved the business and hadn't yet thought through what retirement looked like. I guess I'll probably put it that way. Ultimately, that's what happened. The one brother that wanted to retire ended up retiring. The other brother stayed in the business. He still helps us out in an IT capacity. He started the monitoring center probably 30 to 40 years ago, so you can call him the founder of that business unit that we have. That's what he's very closely involved with today. I think it's really rewarding for him. He doesn't have to worry about all the things that business owners have to worry about: cash, employee turnover, holding people accountable. He just gets to do what he loves, which is the technical aspects of the business. So, it's been really rewarding to see that one brother wanted to retire and go to, and the other brother gets to focus on the things that make him happy. I'll deal with the other headaches.
So were they co-CEOs in capacity, or the brother who is currently in the IT role, was he the CEO, and he just didn't want to do it anymore?
His official title was the president effectively, yep. President and CEO. Then the other brother, I can't remember exactly what the title was, but he effectively ran the operations group. They had sort of divided the business. You could call it co-CEOs. I mean, they didn't make any material decisions for the business without consulting one another and agreeing to it, so it's the right way to do it. But I would say one of the brothers was probably more heavily involved in the accounting, sales element of it, and the other one was more involved in the operational, insulation, and service aspects.
Got you. As you've gotten more familiar with the team and the company, and folks come and go, how have you developed your team over time?
It's been a great growing process. When we first came on board, the folks that were here were great for what we needed at that point in time. Great at executing the certain processes that we had in place. Well, since then, we've grown the business about 70%, plus/minus, so there are a ton of different challenges that one faces when that happens.
Now, I mentioned before that we put the traction or EOS process in place, which has really helped us narrow down what our core values were, and also how we hold employees accountable. It's well known that the EOS process has a framework where you grade employees out based on the core values. Plus, do they get the job? Do they understand it? Do they want the job? Deep down inside, is that what they want to do? Then, do they have the capability to do the job? That's basically a manager assessment of whether they've got the intellect and the other horsepower to do the job.
We just try to be really transparent with every employee, particularly the managers, as we transition from where we were to growing however much we have, 70%. In terms of, do they still understand what the needs of the job are? Do they want what that role is? Do they want to take on manager responsibility for more people, or different processes, or whatever it might be? Then, ultimately, do they have the capability to do it? That sort of manifests itself in time. Some have stepped up, and that's been great. Some have moved on, and some we've repurposed. It's really been a combination of all three of those things. The beauty of it was we bought a business with really good people, so we didn't have, really, any of those issues. It was just a matter of whether we're going to repurpose somebody or whether they wanted something different.
I guess, with that EOS process, we just had a ton of conviction behind what the business needed, and then the compassion and candor to realize what the employee also wanted. If that worked out, great. If it didn't work out, we've helped them somewhere else. It's been a heck of a growing process, though, to get to that stage. Ultimately, I don't know what the stats are, but we have very low employee turnover. But the management team, we've had to bring on some additional resources, at least in their current roles. Then we've repurposed others. It's been great.
Did your work experience prior to your MBA and searching, did it help prepare you for being the CEO? Was there a lot that you had to just learn as you went?
I would say more you have to learn as you go. The prior work experience helps. At Abbott in particular, I got to see how really good managers managed. That certainly helped. They also promoted me to management positions fairly early on, so I got experience managing people, holding people accountable, driving to performance evaluation processes. Things like that. That all helps.
In terms of one of the things that you don't deal with at a large company, only really at smaller companies, or as the owner, is cash management. I mean, all of that was basically learned on the fly. There's nothing really that complicated about it. Just make sure you make more than you spend. There was other things, in terms of how you address certain employees. I wouldn't say that it was necessarily the prior career that developed those skill sets. That was just probably more how you were raised than anything that helps address that. Again, treat people with respect. Transparency wins the day. Those are all the things that you sort of have to master in spades on the fly, and stay a step ahead of the learning curve, so to speak.
I don't know if there's really anything that can prepare you for it. I'm sure you talk to founders all the time, and particularly people that have even started a company from scratch. I would bet they'd say the same thing. There's just nothing that can prepare you for that trial by fire.
Are there any books that you found helpful in some capacity in being a manager?
Yeah. There's a few. One of the books that I think is pretty interesting was called The Art of Action. The book studies military leadership and how they delegate their desires. The military leader that says, "At the end of the day, we need to take that hill." But the military leader can't say, "At 12:02, do this, and, oh, by the way, if this thing happens, turn right and command your troops differently." It's impossible to lay out all the possible scenarios that could potentially come up, but, at the end of the day, you need to take the hill. That's what the organization needs to do. The book talks about how you delegate authority, paint the vision, and try to get people to accomplishing ultimately what that goal is. Taking that hill. Growing the revenue. Launching a product. Whatever it might be. So I thought that was good.
I think traction was really good for us, because we needed that operating system. That was really helpful for me. I did not have my team read that. We just implemented the EOS process, but it was good for me to get to understand exactly what operating system we are going to be implementing. That was helpful.
General book about team, and leadership, and trying to pull together is a book, The Boys in the Boat. That one is an awesome one. I think they're coming out with a movie of it at some point in time. That's about a rowing team that ultimately went to the Olympics and beat, frankly, better athletes, but they were a better team. It's all about how the priority should be on a great team versus a bunch of individual athletes, so I've shared that with the team here.
Then, right now, I'm deep into a book called Deep Work, which is basically, how do you remove distraction and focus on priorities? That's sort of another. On this growth curve of growing a business, that's just where our business is at, and where a lot of our management team and leaders are at, is how do we remove distraction to prioritize and focus on what the business actually needs?
Yeah, and looking at the next hills that Richmond needs to take on and get to. Do you think you can get to most of those through natural, organic growth, and adding products all internally, or do you think there's some that might need an acquisition to get to?
There is. There's plenty of runway organically. So, to answer the question, I think we can get there organically. Our day to day focus is that. How are we improving the sales process? How are we communicating more effectively what the customer wants to the insulation team? How are we installing with proper notification to the customers, and on time, and all that good stuff. Delivering that great experience. That's the organic engine that we've got and are trying to continue to cultivate. I think there's a ton of opportunity from an acquisition standpoint, though. There are a bunch.
This industry is extremely fragmented. ADT is the largest market share leader with approximately 25% market share. There are a bunch of other providers. Last I heard, I want to say there was about 13,000 providers of security, but I wouldn't doubt if it was more than that. We've acquired a couple. We have others that are on our radar. We'd love to acquire those businesses. Really good, solid businesses built the right way, just like Richmond Alarm was. I think there's opportunities there.
Now, that's all staying within the operation of what we currently do, which is security, fire, access control, and video. That would not be any product expansion, if we wanted to expand products. We mentioned cyber earlier. I think probably low likelihood of that, but you never know. If we wanted to expand into something like that, we would almost have to acquire, I think, hiring somebody on board to help build that business. We'd probably just take too long, especially with sort of my go, go, go mentality. We would have to acquire a business to leap frog into that product line.
So, with the companies you've acquired, what made them suitable acquisitions for you? Were you buying contracts? Were there employees you brought on? What made them good targets for your acquisition?
Their customer base was probably priority number one. Did they bring their customers in the right way? Again, in this industry, there are people that will go knock on doors, sort of intimidate people into a sale. Well, those books of businesses, so to speak, have extremely high attrition rates. The good thing is, if the customer base has been there for any period of time, let's call it over five years, you can study attrition rates to understand just how healthy that book of business is. That was probably priority one.
I would say priority one B was who the employees are that we were going to bring on board. We're constantly trying to build a great team, so we don't want to bring on employees that wouldn't add to that. With the acquisitions, I would say 75% of employees have come over with us. None of these have been synergy plays. It's not like we intended to lose 25% of the employees, but just for whatever reason, manage turnover. People come and go, and that's okay, but we obviously try to keep the A players. That's just kind of the way it's worked out. It was really buying both the accounts, as well as the added technical resources of the people.
You've talked before about wanting to eventually acquire unrelated businesses, and just build a bit of a portfolio of sorts. How do you think about going after companies like that? Is that something you're going to do in the next two, three years, or is that something more long term? What would your role be as you go through that process?
That would probably be something that's a little bit more long term. Tough to see the forest through the trees, so to speak. Right now, these trees we're working through, it's operating Richmond Alarm and trying to build out that customer service platform. Not build it out. It's already built out, but trying to continually enhance it and invest in it.
I think there's a lot of learnings here. A lot of learnings that we've learned from Richmond Alarm, in terms of capital structure, and investing, and training, and growing the people, the employee population. That's all been really good. We could definitely apply that to other businesses. There's no question. I think it probably applies to businesses across a variety of industries, not just a service business. You look at what a software business is, as example. They've got a product, whether it's license, maintenance, or a fast product. They've got a product that they're selling. They've got a sales engine that's pursuing these leads. Trying to build a funnel of sales. Putting that into the installation, or, in a software case, implementation backlog. Then delivering a great customer experience, no matter what it is. Whether it's a technician visiting a home, or whether it's a software platform. Okay? I think the learnings here translate to a lot of other industries, so I'm excited to see where that can go. I don't know exactly what that means at this point.
I can tell you my personal ambition is to be invested in, own, run, whatever it means, to several businesses at any point in time, but right now the focus is definitely on Richmond Alarm. Let's call it somewhere between two and 10 years. That's a long enough time. It's a short enough time horizon where it's not tomorrow, but long enough to where it's a decade out to where we'd like to acquire more businesses. I think what we've done here is strong. It's a really good story, so we can take that to other places.
So if you're going to hold on to this business, then, and potentially go run a new one, are you looking at grooming a successor for your role now, or is that something that that's probably still in the future for you?
Yeah, it's still a bit in the future, although we look at our succession plan every so often. I can tell you with confidence that, if I were to get hit by a bus, we'd be okay. It's not necessarily we need to groom a successor, and we haven't started that process, so there's zero chance we could go acquire something else right now. We'll see what ends up pushing that envelope. At any point in time, if you can have a strong bench, that's obviously a good thing. If something came up in the next couple years, that's why I say two to 10 years. If something came up in the next couple years, I have a very high degree of confidence that, if my time were to back off of Richmond Alarm ... Right now, a lot of my time if focused on trying to understand our sales process, where we can generate leads, looking at capital structure and how we can acquire and invest in other things. If, at any point in time, somebody were to take those elements off of me and Richmond Alarm, we have people that are capable of doing that. Then we could make that happen pretty quickly.
What class would you teach in college, if it could be about anything you wanted?
I'm not sure you could teach anything that helps somebody run a business. I think one of the glaring elements here, running Richmond Alarm, is communication. Communication is such a giant challenge for people. What to communicate? How to communicate? When to communicate? Who to communicate with? I just think that so many problems can be solved if people were better at that. In the spirit of helping people, and trying to help them get to the next level, maybe something around communication. That's pretty broad.
From my schooling, I think, from my MBA, anyhow, the class I enjoyed the most was probably commercializing innovation. I was a TA for a professor who taught that. That was about taking businesses from startup, or concept really, to launching the business. We did some cases later on in the class of when it was launched, how you raise additional capital, raise a series B, a series C, et cetera. I really enjoyed that. It was very stimulating mentally, so I would probably teach that if it was an MBA setting.
If it was anything else, science is great. I like blowing things up. Doing lab tests, I think, with middle schoolers would be really cool. I just think that would be a very entertaining job and fun. I probably wouldn't get too stressed about that. Not a direct answer or one specific course, but depending on what population I'm trying to help, I think those are a few of the things that interest me.
Was that innovation class something that helped spur a little bit of your entrepreneurship mindset, or was there something else that did it for you?
Absolutely was a combination of my work experience. When I was with Abbott, I worked in California in that product development role. That was where I was sort of bit by that entrepreneurial bug, so to speak. Then it was cultivated at the commercializing innovation course. The thing that commercializing innovation course did for me was provide the confidence to understand how to break down a unit model, and what unit economics look like, and trying to perfect that, either in the initial stages through research, and understanding what type of unit model you're building. In terms of what product you're building, what the unit economics look like. Then, once it's built, and once the unit economics look good, how you can attract investors to fund that. It gave me a ton of confidence behind the knowledge of what a unit model is, how to sort of tell a story behind it. That was the idea behind taking a product from concept to launch and getting it funded. It gave me a ton of confidence there.
I was sort of bitten by the entrepreneurial bug, but then it became real when I understood what unit economics were, and how I'd say, "Yeah, I could do that myself. I could." In this case, go buy a business that's got good unit economics, and get investors behind that, and really grow it.
That's awesome. There was this program at University of Portland I was a part of called Entrepreneurial Scholars, and it sounds very similar to the one you were describing. A lot of the feedback from students gave me that confidence to go out and do something on my own, and that I could create something that didn't exist before. There was something really cool about that. It's neat to hear that that was the same for you.
Yeah, it's very empowering. That's, I think, what gives people that confidence to go take a risk.
Yeah, absolutely. What's a belief you used to hold fairly strongly that you've changed your mind on over the years?
When I was at Abbott, there was this belief that somebody is either right for the role or not. It's very cut and dry. Somebody would either succeed or fail. It was sort of black and white. I don't really hold on to that belief anymore. I mean, I think there is a certain coaching element that I like to apply to our management team. It's really cool to try to understand people's strengths and weaknesses, and really play up their strengths. Now, it doesn't always work. I'm not naïve to that. There's an element of performance management that you do have to sort of just call it a day. There is this excitement, and just this energy, around watching somebody grow and develop. Realizing their strengths. Pushing those strengths. That's really changed my perspective on that. It was very black and white back in the day, and it's probably because it was part of a corporate environment with these 10 things you had to be graded out on from a performance management standpoint. That's definitely changed as I've grown with Richmond Alarm, and with this management team. That's fantastic. What's the best business you've come across?
I think, as it relates to the company we're currently with, service delivery model. We talk a lot about Chick-fil-A, only because, from a customer standpoint, everything seems so flawless. Yet, we will drive past a Chick-fil-A around lunch time, and the line wraps around the building. There'll be another unnamed restaurant next to it with maybe two cars in the drive-thru. I don't know about the best business, but I will say it's one that, as I run Richmond Alarm, we have a ton of admiration for, because they deliver this unbelievable service. I'm sure there is a ton of complicated elements behind the scenes, and they never let the customer see it. Having run Richmond Alarm, I have a ton of appreciation for that.
I've been in those lines before. There's one here in Beaverton that has actually two driveways for the drive-thru. There were folks out front who were taking orders on iPads, and they had the menu there for you if you wanted to look at that. Then you funnel into one, and each meal is dropped off, and then the car drives away. It was so quick, and, like you said, seamless and smooth. Really, really impressive. I can see why you'd admire them.
From what you just said, they've adequately invested in training technology processes so that, at the end of the day, the person that's taking your order, they're not worried about 45 things. They're worried about getting your name and smiling. Right? And talking in a great tone to you. They really narrow it down to providing a great experience through simplifying, I guess, these other elements of their business. It's really cool.
It is really cool. Michelle and I are heading out to our mini honeymoon this weekend, and there's a new In-N-Out that's in Salem. We went there one time, and I think she wants to go again this time. There was, the last time we were there, a huge, gigantic line that went into the road. It had cones in the middle divider lane that people would funnel into. It looked like people were sitting there for hours. I don't even think a Chick-fil-A system can fix 60 cars trying to get into the same lane, but it's impressive when companies can really get that right. Is there something that you can identify that you've pulled from Chick-fil-A within Richmond?
Yeah. I mean, it's going to sound pretty small relative to building a Chick-fil-A. I went into a Chick-fil-A one time. Had this experience where I ordered a breakfast. I was meeting with somebody, and just wanted the entrée. Then, as soon as they rung me up, I said, "Oh, I'll have a coffee as well." If you think about it, they could have canceled out the order. They could have re-rung up a coffee. They could've scanned the credit card again. At the end of the day, the customer just asked for a cup of coffee. Just get him a cup of coffee. We use that term a lot here, "Just get the customer a cup of coffee." It's not that hard. We don't care about the 22 cents that it costs to get the customer a cup of coffee. Okay? At the end of the day, they're going to think it's really impressive that they ordered a coffee. You just went. You turned around. You filled the cup, and you gave it to him.
We've used that example a lot when it comes to things like change orders. We'll go out. We'll visit a customer site. They had two doors of motion, and let's say they want a camera. Just get them a camera. In that case, we're going to charge them for the camera, because it's not just a 22 cent cup of coffee. But have it on the technician's truck. We don't want to have a long, drawn out paperwork process. We don't want to have them pay cash or check. You know what? We've got a credit card on file. We'll run the credit card when it comes back in-house. Just get the customer the cup of coffee. We've used that example, specifically, numerous times.
That's fantastic. I've loved chatting with you today. I'll let you go here and get back to your day, but thank you for sharing your time with us. This has been a lot of fun.
Yeah, I appreciate you having me on, and congrats on the wedding. Have a really good mini honeymoon.
Thank you. Will do.