Summary

In this conversation, Jon Stoddard interviews Jules Brenner from Metal Solutions Holdings, discussing the company's journey in acquiring multiple welding and metal manufacturing businesses. They explore the importance of partnerships, the challenges of refining a buy box, the self-funding approach, and the unique landscape of California manufacturing. Jules shares insights on operational improvements, the significance of contrarian thinking in business strategy, and the potential for growth in the metal fabrication market. In this conversation, Jules Brenner discusses the intricacies of managing a manufacturing business, focusing on customer relationships, the significance of repeat business, and the importance of quality standards. He shares insights from his experiences in acquiring businesses, navigating deal flow, and the personal growth he has undergone as a leader. The discussion emphasizes the need for strategic decision-making and the commitment to preserving manufacturing jobs in California.

Takeaways

• Metal Solutions Holdings focuses on the metal fabrication space.
• Building partnerships is crucial in the industrial sector.
• Refining the buy box took over two years of searching.
• Self-funding allowed for greater control over the search process.
• Understanding deal structures is key to successful acquisitions.
• California's manufacturing landscape presents unique challenges and opportunities.
• Contrarian thinking can lead to disproportionate results in business.
• Operational improvements can significantly enhance acquired businesses.
• Implementing systems and technology is essential for growth.
• The market for metal fabrication is vast and offers significant potential. Understanding customer relationships is crucial for driving sales.
• Repeat business is essential for maintaining high gross margins.
• Quality standards like AS9100 and ISO are vital for success.
• Acquisitions require thorough due diligence and quality control.
• Building strong relationships with sellers can lead to better deals.
• Flexibility in leasing real estate can benefit business operations.
• Investing in employee training is necessary for long-term success.
• Maintaining a focus on long-term growth is key to sustainability.
• Leadership requires thoughtful decision-making and delegation.
• Creating a positive work culture motivates employees beyond financial incentives.

 

Listen to the Episode Here:

 

or Watch the Episode Here:

Script

Jon Stoddard (00:00.791)
Welcome to Top &A Entrepreneurs. Today, my guest is Jules Brenner from Metal Solutions Holdings, which they have acquired three welding metal manufacturing and machine businesses in the last four years. That's Penn, ASM, and Ashworth. Welcome to the show, Jules.

Jules Brenner (00:23.278)
Thank you for having me, John.

Jon Stoddard (00:25.005)
So first the question is, did your mom name you after Jules Verner? The poet writer? Yeah.

Jules Brenner (00:29.358)
No, I always get that, but you're close. It's a street in France.

Jon Stoddard (00:35.841)
very cool, very cool. So, Jules, so you've acquired these businesses. Now, is this with partners and how many partners do you have and how long you've been associated with them? If you had them, or is this all by yourself?

Jules Brenner (00:49.624)
Yeah. So, the metal solutions holdings is a holding company that we started focused, all on, the metal fabrication space, creating a metal fabricators. And on top of that, there's another holding company called industrial succession kind of the premise being, you know, work on the metal side first, and then in the future, add more verticals of other industries that have a similar type thesis. but industrial succession, there's three of us over there. So it's, myself, our CFO Ron and,

Kenneth from our &A and finance team. And then the Metal Solutions side has investors in it that are with us in there and mostly folks that are around the industrial space, whether they own something in industrial right now, have owned or they do industrial investing as a day job. And a few advisory folks as well that are industry experts in that particular space.

Jon Stoddard (01:39.629)
Yeah. How did you meet these people? Where did you meet them?

Jules Brenner (01:43.502)
Mostly, you know, over time, you know, kind of Ron joined me when it was like literally a few weeks after starting Industrial Succession. met online, turns out he's from the Bronx and from Brooklyn. So we kind of hit it off and, you know, that's what shaped a lot of the initial thesis and focus and the rest of the folks, it's kind of, you know, as we started to get more niche in the industry and people kind of heard the story, a lot of them either self nominated, reached out to us or we heard out about them.

reached out to them. So I think the industrial, you know, lower market space is pretty small. There's not a lot of folks that are involved. So the few folks that are involved in that, tend to know each other and they want to try to help each other.

Jon Stoddard (02:26.019)
Yeah, I got a question about that because it's really hard to find a partner. have my social media following and I've got a ton of people ask me, like, how do I find a partner? Like, I'm not good in this or finance or I'm not good in raising capital. How do I find those? And how do you decide, hey, I do want to work with these guys. I put them through an integrity test or I put them through a skills test and they know their stuff. I just like all of a sudden go.

What do you guys want to do? You want to make some money, buy some companies, or do you want to make some money or how do you connect and make a, you know, like really strong lifelong connection with these guys to buy companies and have money floating in front of you and realize like, I trust this guy.

Jules Brenner (03:11.886)
Yeah, I think, you know, a lot of it is like the, industrial space. mean, I think a lot of folks that are in it are here for some portion of just passion fundamentally. You know, we have folks involved that love the mission of like taking, you know, a state like California where we have our operations in and it's the largest industrial state in the country, largest manufacturing state. So there's a lot of people that feel very passionate about keeping manufacturing in this country and thereby in.

California for that reason too. So I think a lot of folks resonate with the mission based on that. And then, you know, a lot of it is also like, just get the word out there, right? I mean, the more things you do like this, like podcasts, I think you find different folks that hear the message and reach out. definitely had a few folks that have been introduced to us from something like this. So I think that's typically what drives it. you know, the...

I think in general, because we started as a search fund, the search fund community is fantastic. Everyone wants to really help everyone. And that I think drives a lot of the, know, I don't want to be your partner. can introduce you to someone else kind of thing that has, you know, driven a lot of our success with us.

Jon Stoddard (04:16.409)
Yeah, yeah.

Yeah. So you, when you looked at, started looking at deals a couple of years ago, did you, how long did it take you to refine your buy box? Like this is exactly what we're going to do. It's easy to say, Hey, we're going to do a, SMB in the middle fab space. you know, one to 5 million top line, 10 to 15, 20%.

Jules Brenner (04:45.422)
Yeah. Yeah. So when we started out, we were actually called manufacturing succession. So I knew that we wanted to buy a manufacturing business. I worked in manufacturing before. I knew that the space in general was something that this world of search was not going after. When I started pitching this, I pitched this to all the traditional search fund investors and they were all like, this doesn't make sense. Manufacturing has worked with search and everything thereof. And like four years later, hear...

a bunch of folks that have raised money for traditional search groups to buy manufacturing deals. So I think, you know, it started out kind of like just going out on a limb of like, Hey, we want this kind of business and this looked pretty broadly. And we also kind of narrowed in the geographical focus pretty quickly. I wanted something in California. thought that that's where you can have the largest opportunity for, you know, lots of businesses out here and folks not succeeding them and searchers not buying them. So once you tighten up your

proximity like that. Like in search, tell you don't tighten up geography and maybe keep a, tighten up industry or vice versa, but don't do both. We did both. So when you did both, it made it a longer for us to kind of refine the buy box. So it took about almost two and a quarter years to buy the first deal. Like literally full-time search. Yeah. Yeah. Yeah. It took a while. like the, looked at all kinds of deals and the interesting thing is like even the deals that didn't culminate at the time.

Jon Stoddard (05:59.215)
Two and a quarter years. Yeah.

Jules Brenner (06:09.95)
They're coming back now. So like when we're able to like talk to folks as to like what our &A pipeline looks like and they're like how the hell did you guys do this after you know running it, you know your first business about to and change yours now only It's because of a lot of those two and a quarter years of like setting call it almost like &A foundation to be able to move this quickly. So That's been the big part of it But we just we looked at a lot of deals and like there was a few industries that Had similar properties that were interesting. We made offers on but we just found ourselves

Jon Stoddard (06:26.543)
Yeah.

Jules Brenner (06:39.222)
in Metal Fab, the thing too that naturally tightened up the buy box was COVID, right? COVID took a lot of industries and made those businesses basically unsellable, right? Where people lost their EBITDA for a year or two and then they didn't want to sell until they had three more years of settling their numbers. So that's definitely what helped kind of make this a little, call it faster if you will.

Jon Stoddard (06:59.299)
Black Swan events kind of change people's perspective about life.

Jules Brenner (07:03.458)
They do, they do, yeah. So that's been a big part of it that's kind of what it drove us to, drove us to this point.

Jon Stoddard (07:08.783)
Do you remember how many LOIs you put out, offers you put out and what that number was?

Jules Brenner (07:14.7)
A lot, mean, a lot. You know, we looked at, I would say at least a hundred SIMs, if I'm just guessing, if I worked through our systems and we've emailed like, know, thousands of brokers and, you know, done all the stuff to get the word out there. It's weird. Sometimes a broker on the East Coast with brokers on a California based company. So we really tried to get the message out about that stuff. But the, you know, the LOIs wise, 20, if I had to just guess at it, you know.

Jon Stoddard (07:22.734)
Yeah.

Jon Stoddard (07:41.87)
Yeah.

Jules Brenner (07:42.314)
and then we had actually one deal that was really close to closing to under LOI about to start the QV we had funding all lined up and nothing actually ended up dying like right before we started QV the two partners disagreed on selling at the last minute so you know we are off market off market yeah yeah yeah was two partners and like they've been one was been added significantly longer than the other so the one significantly longer than the other

Jon Stoddard (07:57.485)
And that was a on market deal through a broker and the guy changed off market. Yeah.

Jules Brenner (08:09.07)
wanted to sell, the one that was in their last didn't. And they just kind of said that we don't want to do a partial sale. Either we both sell or we don't sell at all. that's what kind of, initially they were good with it and then just somewhere along the line, the motivation fell out. So we had a deal die. Unfortunately, we found that deal about a year into searching. That was the closest we got until we culminated the first deal two, years later.

Jon Stoddard (08:34.115)
Yeah. A million ways for a deal to die. Right up all the way up to the altar. Yeah. Yeah. And what, so how did you buy this? Was it self independent sponsor or search fund or is it self sponsored kind of you brought in your own money down payment and SBA.

Jules Brenner (08:38.156)
Yeah. That's right.

Jules Brenner (08:53.932)
Yeah, so we were a self-funded search. So after we tried to do a traditional and weren't able to get the interest we needed for it, we switched to self-funded. And I self-funded everything for two and a quarter years. So it was all the expenses, the VA's, the software's, the fees with legal and so on and so on. So I self-funded all that. And then by the we got to the deals that we wanted to close, that's when we brought in.

and outside investors like typical self-funded sort of structure.

Jon Stoddard (09:25.465)
Yeah. And you mentioned on your LinkedIn that you brought in Pursuant Capital. That's Sam Rossetti's group, isn't it?

Jules Brenner (09:32.59)
Yeah, Sam has been working with us pretty much. He started working with us probably a year after we started. I will have to say after that first deal died, Sam was probably one the biggest reasons why we were able to be successful and be successful so quickly. He taught us to look at deals in a different way than what we did before. I think a lot of searchers, they start out, they just want something that looks pretty, know, customer concentration, even an origins of this, that, whatever. And the real world does not look like that in the lower market.

So in the lower market, you have to figure out how do you get deals done. And Sam was really big at teaching us how to do that. So we got to a search with her.

Jon Stoddard (10:06.543)
So teaching you how to do what, which is like, there's going to be a hair on a burrito. There's going to be risk. You have to understand and accept that risk. Is that what you're saying?

Jules Brenner (10:15.79)
Yeah, like one interesting analogy that kind of referenced that of the conversations with Sam was like, if you think about like, you know, real estate, right, every piece of property pretty much has a value, right? It's not zero, right? If there's some value to it. And to some extent, every business can be bought, right? It can be bought. It's just for what price, what structure, you know, you can have a hundred percent seller finance, you could have 150 % seller finances. So it leaves you more money or something and you fully take over the business. There's so many different ways to slice the

the deal in that case. I think Sam kind of made it clear to us that we didn't need to look for this like perfect business. It would be, you know, something that's like, okay, it's good enough. The industry is there, the bones are there, and then what's our plan to improve it. And then from there, you know, we can, we can figure out structure and that would drive the deal.

Jon Stoddard (11:05.103)
Yeah. And what does that structure look like? Like typically you just go, I'm to load it up with a lot of debt with SBA. and this is kind of, I'm just, curious as, cause like buying a manufacturing business with a 10 to 15 % EBITDA, but if you load it up with 90 % debt, that's going to eat all the cashflow. How did that work out? I mean, how did you buy that first business cap stack wise?

Jules Brenner (11:32.494)
Yeah, I mean, you have a seller note in there. You have a good, that coverage ratio from the start. I mean, SBA is 10 years as well, right. Which, which helps as well. I mean, that's how you make 90 % leverage work, right? Otherwise you, you know, you could, you could make that work, but, that was a big part of it. the other thing too is like, when you have, a certain foundation of deals, you can start doing tuck-ins and the tuck-ins start to be like, exponentially more creative.

Jon Stoddard (11:40.398)
Yeah.

Jules Brenner (12:00.654)
towards also creating debt coverage ratio space as well. So you can follow the typical private equity strategy by the first deal that probably don't use 90 % leverage. I mean, think we were probably at like 80, 85%, something like that. And as we started buying other deals, we actually got much cheaper deals. And when we brought them into that business, that leverage ratio dropped significantly on EBITDA. So I think that's just important.

Jon Stoddard (12:19.001)
Okay?

Jon Stoddard (12:26.723)
Yeah.

Jules Brenner (12:30.552)
But yeah, mean, you know, our first deal also was a higher margin manufacturer as well, which I think is very important.

Jon Stoddard (12:37.859)
What was the bottom? What was the even margin?

Jules Brenner (12:41.198)
The guy was doing like in the 20s. like in manufacturing, you're in somewhere 25 on the top end. Anything over 25 is probably not sustainable all the way to technically you go to zero, right? So, but the real average is probably somewhere in the teens, somewhere high teens. And if you're

Jon Stoddard (12:55.469)
Yeah. Yeah. 20 is great, right? It's gotta be in the top, top 10 % of the man. Yeah.

Jules Brenner (13:01.25)
Yeah, yeah, like he that company has like an interesting niche in the sense that they focus on custom metal products targeted towards the like the last end of a product that they deliver into. at the very end, the customer is a lot less concerned with like a few thousand bucks of metal versus a multi million, multi billion dollar project. I'm able to squeeze ASM, ASM, yeah.

Jon Stoddard (13:23.757)
That was a what? ASM or Penn? That's an ASM, right? Yeah. And he was selling because what was the reason for leaving?

Jules Brenner (13:33.954)
So there's a few interesting things kind of going on in California. And I can get into those if you'd like, but one of the biggest things is of course, well, so kind of macro down, right? So California bias.

Jon Stoddard (13:39.737)
Yeah, yeah, please. Yeah.

Jon Stoddard (13:46.187)
Let me, before you explain, because I have had so many people go tell me like, I'll take any business as long as it's not in California because the politics are, you know, they're dipping into my payroll to take more from the debt they owe me like for something. So it's kind of crazy. me about that. Yeah.

Jules Brenner (14:06.038)
Yeah, so let me kind of zoom out for a minute. I came from the private equity venture capital space. So I was part of like industrial technology businesses that were trying to modernize old school sectors. And they were based in California. the initial first set of customers were California businesses. And it was in that experience, I saw how under invested the lower market industrial spaces in California, which is weird because it's like a tech state, right? You would think it would not be that way.

Jon Stoddard (14:09.998)
Yeah, yeah.

Jules Brenner (14:33.538)
But it definitely is a lot of what drives that is the children of these business owners in California, exponentially versus like other states do not want to take over company for their parents, right? They want to be, you know, real estate or a doctor or lawyer versus in Midwest. That's totally normal.

Jon Stoddard (14:47.449)
Cause their dad pays for their education, provides a great living, and then they don't go into the same business. Yeah.

Jules Brenner (14:53.622)
Yeah, there go. There you go. It's really interesting. mean, like I usually hear a story like, I tried my kid in here for a year and they didn't like it. So they left like that's the most they usually hear. But either way, so because the kids don't work in it, these businesses stay A on tech savvy B, they don't really grow much because the parents don't really want to push on growth like that. And C, they don't have succession plans. So I saw that there was just a major issue with, you know, California.

It's the fifth largest economy in the world, literally just as a state, and it's also the largest manufacturing state in the US. There's like, you know, when we look into metal fab, there's been like 30,000 metal fab shops in the country and about 6,000 of them are in California, with the majority in Southern California. The other macro thing that happens is California's zoning laws. So if you think about like other, you know, states where you have manufacturing, typically, like let's say Texas, you can have like a preschool, a church, and a manufacturing facility all in the same block, right? Versus if you...

Jon Stoddard (15:31.044)
Yeah.

Jules Brenner (15:46.786)
Look, in California, the zoning is so strict that you literally have three metal fabrication businesses door to door, all servicing different kinds of customers, but it's that dense. And what that supports really well is a geographically based roll-up where you buy them and put them under one brand, one building. when we started looking at that...

Jon Stoddard (16:03.471)
Does that all also help prices of products that are shipped to you? Cause they're all going into the same, is there some kind of efficiencies or you know, prices that can help you?

Jules Brenner (16:19.5)
Yeah, definitely purchasing power groups. So as you bring these businesses together, you can do bulk buying because most of the suppliers are local. know, so there's a lot of synergies that are typical with rollups. I real estate savings, manpower savings for managers, software, know, savings, back office integrations, things like that. But, you know, the, from the macro, right? I was like, okay, I saw this, this whole thing forming in California.

And I think, you know, coming from the VCP back world, they literally wire into your brain. If you go and you look at contrarian ways of thinking, that's where you typically will find disproportionate results and returns. So that's what drove a lot of the reasons to look there. then kind of like, you know, looking at California even further. you have the succession plan issue. You have also the fact that like, it's just expensive to do business out here. Like hiring anyone for the office is expensive.

Hiring more expensive welders versus the Midwest is typically fine because the customers then buy from California manufacturers typically want something that is either more engineered than something from the Midwest or they're local themselves and they want quick lead time. It's a cheap product under let's say $10,000 you're not going to ship it from somewhere you want it quick and you want to just run from there. So based on that the customer base it's definitely all local and

The sellers themselves, when they go to sell, there's just not a lot of moves for them until you grow your business to a certain point. So in California, out of the 6,000 metal fabs, there's probably a very small percentage that are over 15 million revenue. And 15 million revenue based on the cost of doing business is really what you need to get to to get your business to some serious scale, like a 3 million of EBITDA. So what ends up happening, because the kids are not in it,

The sellers are thereby doing everything themselves in the company. They're not investing in SG &A like they should because it's expensive. If you can get to a point where you can solid enough businesses to get to scale, you actually flip all the costs of doing business over on itself and you make it as a business mode where the small guy basically can't compete with you anymore. So these like few, you know, 15 million revenue in metal shops when they do go for sale out here because people on the East Coast and Midwest other maybe.

Jules Brenner (18:35.942)
companies that buy metal facilities want exposure to the largest manufacturing state in country, they'll pay the higher multiples for these businesses. And it's kind of crappy because a lot of the stuff is the regulations built so that it helps. Like you would think that you would be helping small business here, but I think you would effectively hurt small business pretty badly in California by doing this. So I can get more into all this, but that's kind of how we came to this thesis.

Jon Stoddard (18:58.329)
Is this the contrarian thinking that Andrew Carnegie talked about? It's like, we just got to have scale. Like the bigger we are, the more smelts we have, the lower the product that we can sell to and the more of it we can sell.

Jules Brenner (19:14.242)
That's exactly right. Yeah. Like there's a few other like trends I can get into, but like if you, I'm sure you heard of all the stuff of like reshoring in the U S right. People want to bring their supply chains back. Yeah. When you bring your supply chain back, like, I mean, like we like to consider ourselves and we're in the supply chain business really, or, know, like our customers expect us to deliver lead time quality, right? Price is nice as well. The lead time quality, if they're not there, then the price is, you know, falls off. Right. So,

Jon Stoddard (19:21.901)
Yeah, they're bringing it back because yeah, yeah, yeah, yeah.

Jules Brenner (19:41.56)
For that reason, we want to be able to provide as many services and house under one roof, which de-risks their supply chain. And with all of our short-end trends, it's getting more and more of a desire from customers. So the more of these smart facilities you can bring together, the more capabilities you share across them, the more you're going to attract larger customers with better spending power. And naturally, as you do that as well, you're going to also benefit from what's happening in the field of mechanical engineering, which is like,

Software is getting more advanced, designs are getting more advanced, more advanced designs require more capabilities and house more software ourselves to like process them and do them efficiently. So the more scale you get to the more your positioning yourself well to take advantage of what's happening in the world of manufacturing.

Jon Stoddard (20:24.771)
Yeah, what about the CNC machines? Are they getting better?

Jules Brenner (20:28.206)
They are, but like this is another thing that people ask about a lot. They're like, you know, well, if the field of engineering and all that is getting more efficient, does that mean you guys are gonna have to spend on capex or, you know, do you need different kinds of machines? The answer is yes for some parts of metal manufacturing. Some people do like crazy high precision work, which for us, we don't do anything high precision, right? We precision, but not high precision, right? High precision.

Jon Stoddard (20:54.105)
can be done with old pneumatic or hydraulic tools, a lot of it.

Jules Brenner (20:58.006)
Yeah, for the most part, mean, some things will require a computer. mean, computers in these machines is fantastic, right? That's great. But I'm talking like where you go from, know, you can have a laser of one level of precision that costs half a million dollars to something like wildly more precise. That's two million dollars, right? And that is a pretty big gap. So we would stay away from businesses that need those two million dollar lasers and instead focus on the half a million dollar lasers and just general equipment that's cheaper. So I think that's really important. You know, over time, I'm sure you can put more precision stuff in there, but the focus is certainly on

higher precision, regular precision type applications, which keep it a lot more sustainable than everything else is really made with like equipment that literally just a press frame goes up and down and a welder, which doesn't change. know, it's, the customers aren't designing parts that are like wildly hard to make. It's just the business case of like, can you deliver it quickly and on time and have a high ability to handle a high variety of products.

Jon Stoddard (21:39.651)
Yeah, that's it. Yeah, yeah.

Jon Stoddard (21:53.559)
Yeah. Let me ask you about the ACM and you've owned it for a couple of years now. When you bought it, did you see what they weren't doing that you can improve and have you realized those improvements over the last couple of years growing a business like in top line and bottom line revenue?

Jules Brenner (22:12.682)
Yeah, the most of these businesses like when walk in is a all paper and pen. B, usually they don't have any ERP system. They probably have QuickBooks and everything is, know, Excel sheets. And then C, it's usually very, very dirty, like literally, you know, it always shocks me because I'm like, if you go to sell your used car, you know, wouldn't be the first thing you do is just pay $50 for a car wash. Right. But they don't even do that. They don't even bother with that. They leave a really dirty facility, old tires and places and old material that they don't

Jon Stoddard (22:39.789)
It's like a pizza box sitting on a corner versus something that's like you got taped lines, yellow, you know, surrounding machinery. Yes.

Jules Brenner (22:47.532)
That's exactly right. Yeah. And it doesn't cost much to do what I just said. Right. I mean, if you put a thousand dollars towards that, you could do a really nice job of telling the place basically, and probably easily ROI a thousand bucks, you know, many, times over. the point is, is that that's what we typically walk into. you know, those situations, first thing we do is we have a four step system and call it clean measure, manage, grow. So in the clean, manage, grow.

Jon Stoddard (23:11.439)
What's that? Clean, measure, clean, manage, grow. Okay.

Jules Brenner (23:16.47)
Yeah. So the clean part, we take the facility and literally just clean it up. get rid of old inventory. We liquidate everything with anything we don't need. We try to in general, especially now by businesses that have quality standards built into them. they either are ISO or AS9100. Those are industries. Yeah. Those are standard industry weight. Like they are actually quality systems, but they actually extend significantly past quality. So they go, they touch everything from sales quoting.

Jon Stoddard (23:33.007)
9,000, yeah, yeah.

Jules Brenner (23:44.59)
to fulfillment, cetera. So if you actually have companies that are already on those systems, integrating them is exponentially easier. It's just like talking the same language, you know, there is like.

Jon Stoddard (23:52.899)
Let's put in an ERP system in place.

Jules Brenner (23:56.142)
I'm a lot more I mean, as I knew 100 all these are literally like, you got to do operations and sequence, you can't have your microwave on the floor to microwave your food, you know, you have to have lines and systems, you need a quality department, you got to quote things in a certain way, you got to, I mean, there's all these things that like, honestly, if you already have that, even though the businesses like from the outside may look like it's like older, whatever the guts of it are significantly more streamlined and systematized to what you may see in the space. So if you put together two plants, let's say already have a sign 100, it's it's

infinitely easier than taking two plants that have one has a S9100 one dozen or both don't have it. Right? Because there's no there's no call of rule of law past what they do internally culturally to produce things out the door efficiently. So, you know, that's part of what I do in the clean is like set all the systems up if they don't have them, but really want to try to buy businesses that already have them. And then from there, we go out and we do the measure. So we take all their paper and pen systems.

Jon Stoddard (24:31.769)
Yeah.

Jules Brenner (24:55.726)
Excel sheets, cetera, we digitize them. So we have a guy come in, he OCRs all their files where they're searchable by keyword, it shreds everything. And then we give everybody a drive and a way to look at stuff. Then we roll out a full tech stack. So we have a bunch of off the shelf softwares that are industry, you know, standard stuff that people use. And then we API all of them together. So it feels like from all the way from a lead, all the way to a shipped product, it's one streamline of workflow.

Jon Stoddard (25:21.613)
Yeah, and you have that Gantt chart. How long does that take? That like the process.

Jules Brenner (25:25.294)
we've seen, we've seen different things. Like if the business already has, certifications, like AS 91 hundred rolling something out like that is pretty quick. It's just a three months or something at the high end. But if it's like, you know, they fundamentally don't have any quality standards and you're putting in their first piece of software. I mean, you're going to blow everybody's brains pretty fast in terms of like, wow, I actually have to, you know, document and whatever. So that's just a more of a, a stretch. And I think as we've been doing this more time, we've certainly like.

you really seeing the value and like maybe pay a little bit more for a company with the AS9100 because it will be infinitely easier to get those employees to understand why they should be doing all this. like when you have also certifications in general, it's just the, you can get more work. It is. Yeah. And I'd say like, if someone was doing what we're doing, I tell them to like, have that be the first thing. I mean, I don't think we appreciated that enough when we were

Jon Stoddard (26:10.063)
That's a good lesson, isn't it? Yeah.

Jules Brenner (26:20.014)
buying businesses on the front end and then had to then get the businesses certified and all the stuff that's associated with it. So, you know, the people side, the training side of it, I mean, not the cost of doing it, the cost of doing it is pretty affordable. But yeah, either way, we rolled out the software systems. We perfected a lot of the ways from the front end of it. Our lead gen systems, we have pay per click campaigns that we run, SEO.

Jon Stoddard (26:26.489)
Yeah.

Jules Brenner (26:48.302)
We have a CRM system that helps us stay on top of all. Yeah, exactly. Yeah, so the goal is to get the business to a point where it's as close as possible to just like, we know how to get the customers. There's a clear ROI. I spend a dollar on ads. get this much back, that kind of thing. And if you can be clear on that formula.

Jon Stoddard (26:49.78)
to actually look for customers, for new customers. Yeah, yeah.

Jon Stoddard (27:05.839)
What is that? Because there can't be that many customers seeking out this product. So it's got to be a pretty small addressable market.

Jules Brenner (27:14.746)
Well, it's actually pretty big. if you look at it, right, so 6,000 metal fabricators in California, right? Like just California, right? Forget about the rest of 6,000. I metal is the most common medium that's used for anything, to make anything, right? Most things are made out of metal, right, if you look at it, right? So, you know, from there, you know, it's in the billions, you know, multiple billions of dollars. And we don't need a large sliver of that to be successful, right? We're not a, you know.

Jon Stoddard (27:19.727)
Yeah.

Jules Brenner (27:42.446)
venture capital type situation here. the, you know, a lot of that, but it's definitely, it's definitely out there. A lot of people, you know, they use everything from, it's using the construction to, to enclosures for stuff, to pieces for planes and so on. So there's quite a lot out there, but, when we run the campaigns, we, you know, get customers of all flavors, some that are looking for R and D situations, some that are looking for more permanent, you know, repeat part relationships and.

Once you have that dialed in, you can then tie it to a CRM system that lets you basically actually go through the customer sales process. know, customers, are you ordering this? Do have a budget? Do you have other people you're bidding to start to like work on driving win rates up in the businesses? Because most of these businesses, they don't track that.

Jon Stoddard (28:25.775)
What's your project size, average project size?

Jules Brenner (28:31.778)
Believe it or not, our average ticket size is under $5,000. And that's by design. Yeah, it's by design. Yeah, so our-

Jon Stoddard (28:35.191)
is it? Okay. That's interesting. Yeah. And when you target these pay per click, is it specific individuals in a company or is it keywords just through Google AdWords or yeah.

Jules Brenner (28:48.76)
So it's mostly keywords, like if you just, could search up machining services near me, welding services near me, that kind of thing. But the businesses, we have two kinds of customers, right? We have a kind of R &D engineer type situation where they're trying to just test something and make sure it works well. Those are the more the pay-per-click, the 10 grand and under style orders, kind of the one-offs. On the other end, you have someone that's buying something repeat, like a buyer in a business that

Maybe it's not like a contract manufacturing relationships because they themselves have a high volume mix. We like to think about like the stuff that works in California. We're not building the bones of any machines. The bones of any machines, you're probably like if you're making a lot of units a year, you're probably making somewhere else, whether it's out of state or out of country. What we are is when the customer is built something for their customer, that's the bones, they need customization after that. So if they build like a piece of machinery that filters water sewage,

well, everything's gonna be different. There's a different ballot for this that holds this pressure and that's this, this, this, that, but it's on the same platform of bones. So we would make those products. So our customers, for that reason, they order off a set catalog of stuff that we've made for them over the years, but it's the lower $5,000 and down order. And those are by design for A, risk reduction, but B, also to be able to drive highest gross margins, right? If you can get really good at the lower ticket sizes, you have a business mode for

you staying where you are in California, but then also having the highest gross margins as well, because they care about lead time and quality more than anything.

Jon Stoddard (30:23.951)
Let me ask you about the, the, it's a project base. So how much of your business is reoccurring non-recurring kind of per project deal?

Jules Brenner (30:34.318)
So what we track in a business like this is more so repeat part percentage. So I would say like repeat part percentage and whether they have AS9100 or IceSword probably the two top things we look at now. Repeat part percentage, if you think about a business that has a 100 % repeat part percentage, that means you're almost like an internet catalog, if you will, of stuff that you make and your customer just goes off and clicks off a catalog. So those aren't really sales, right? In the traditional sense, that's just literally order taking.

What's the cost of metal today? What are the labor that I know it takes me to make this? Put that in, there's your number. That's what you pay a customer. It's kind like going to restaurant almost. There's probably a better analogy for it. You order the lobster and whatever. So you want to get your businesses close to your customer, ordering off a menu as you can. So in this space, you're probably not going to have recurring revenue in the traditional sense of software. Every month it comes in. You may have businesses that are contract manufacturers that sign up a long-term agreement for something.

Jon Stoddard (31:05.891)
Yeah.

Jules Brenner (31:29.966)
But naturally, if you imagine someone signs a long-term agreement with you like that, they're going to be bulk buying. So if they're bulk buying, they're going to drive your gross margin down as close as to zero as they possibly can, basically. So we try not to get into contract manufacturing stuff. I think that's not appropriate for California. I think instead, you want to get close to that catalog situation. You get as close to 100 % repeat part percentage. So it makes the business easier to operate and then just get really good at producing those products quickly in the right quality so that you can keep the max gross margin.

So, and then to that point further, each business we bought has had a different repeat part percentage. mean, the first business we bought, you know, it had actually the least out of most of them. And that's why it kept the highest gross margins. And then the second one we bought had the middle ground, probably about 40%. And it kept like a mid level of gross margins. And then the last one we got into, you know, was the one that had like 80 % repeat parts. So it had, you know, even less, right? But all pretty high still, but even then you want a mix of that stuff.

in your facility, right? And get over time, get away from the one-time situations and get a lot more into repeats.

Jon Stoddard (32:30.862)
Yeah.

Jon Stoddard (32:36.383)
Yeah. When you had ASM, you proved out this template of the clean measure, manage, grow. And when did you start thinking about buying the next one? Was this always the intention? Was it to prove the model and then go to the next one or just opportunity came along? What was it?

Jules Brenner (32:56.334)
Yeah, I mean, to kind of what I was saying in the beginning of the podcast, like the when we started out, we were going after metal shops and a lot of people we reached out to like I knew a guy like literally immediately as soon as I launched the search fund, I knew a guy from before that I toured his facility and I called him I said, Hey, remember you wanted to sell what you want to sell and he's like, I definitely want to sell them of age. like you, yada yada. But I'm in aerospace, I have a 100 % commercial aerospace exposure and COVID just hit I started March 2020. So you know,

Half these guys were like, I'd love to sell to you, but I'm concerned I won't even be in business tomorrow. So trying to do a sale right now makes no sense.

Jon Stoddard (33:30.783)
Yeah. And, you're going to buy it at really discounted price because I don't have any revenue. Yeah.

Jules Brenner (33:36.494)
Exactly. Yeah. So like they're not, you know, going to jump at that. So what happened is a lot of that market went quiet. And now that, you know, a few years past this COVID, a lot of that has resurged. But the, you know, for that reason, I was like, okay, we probably will have lots of &A targets in the future, but let's get focused on something to start with. So when we bought our first deal, we like did survey the local competitors and we did have a pretty good idea that you'd be able to buy, you know, stuff locally as well. Right. So

We kind of knew we were going to do &A, but as soon as we bought the first deal, what actually shocked the crap out of me is I went to the seller of ASM and I sat with him and I said, you bought ASM yourself. Have you ever called your competitors, of which there's two, and asked them if they would sell to you or the 15 years you own this place? And he said, no. And I just thought that was crazy. But what did we do? We immediately called those competitors. We said, we bought these guys. Which you guys sell.

We started literally doing a door knocking campaign, ASM, the neighbor, and then one after that are both or metal shops. and we just started just going out to our neighbors. and that was literally it said, own the company next door. Would you want to come toward me? And then during the tour, it'd be like, Hey, do you, do we ever thought about selling? so we got into it pretty quickly and I think, it took about six months to really ramp up that deal flow. And then, you know, probably early last year is when sellers got serious. So then closed by the end of last year.

Jon Stoddard (35:03.317)
Let me ask you about when you bought ASM, how did that look? SBA loves the, if you're in the same NICS code, real estate, everything like that, was that more favorable terms to you when you bought that?

Jules Brenner (35:04.558)
Thank

Jules Brenner (35:10.936)
Yeah.

Jules Brenner (35:17.038)
Yeah, it was, so the first deal we did was an SBA. The second deal we did, that same lender just gave us like a commercial extension note. You know, it's been more popular now that I've been seeing it. Like if you have a little bit of a deal, a deal that's a little bit too large for SBA, they'll add some more room there. And then that was kind of where it went from, you know? So that's been the goal.

The from there, I think that the last deal we did, we had another group get involved. But for the most part, I think I've been hearing like SBA is now entertaining more deals in similar fashions. You know, that's probably an appropriate structure. We also use a lot of seller finance and deals as well. So like the second deal we bought, was second, first one was 15%. Second one was 40 % in the last one, I think by the time everything was said and done, we probably paid like two times even. So we just paid all cash for that.

Jon Stoddard (36:03.001)
Yeah, how much? Yeah.

Jules Brenner (36:14.382)
pretty close to the quotation.

Jon Stoddard (36:14.617)
Yeah, yeah. Well, your balance sheet's much better. Yeah? You can be the bank. Yeah.

Jules Brenner (36:19.406)
Yeah, that's right. That's right. mean, you know, the seller financing in general works really well here too, because there's an interesting other phenomenon I mentioned, California. So California, a lot of sellers we deal with, they bought their own industrial buildings back in the day, 70s, 80s, whatever, when they weren't worth much. And like with the whole growth in e-commerce, the Port of Long Beach out here, which is one of the busiest ports in the country, if not the busiest, also from China, has gone so busy that all the industrial buildings here have ballooned in value.

So what we typically see is we'll see a seller that has a building that's worth eight figures and a business that's worth seven. And for that reason, they're not gonna beat you up on purchase price of the seven, if you're gonna be someone that's gonna be reputable, able to let them lead quickly and able to just be successful. So typically a lot of our sellers will sell closer to liquidation value upfront for the business and then some seller note for the rest of it. Some will try to get more and whatever, but there's enough of the ones that are not.

doing that, that we can work with the ones that will sell for liquidation because real estate is driving most of their mistake, if you will. They don't need to juice every dollar of the business to affect that. So it's certainly driven a really nice price.

Jon Stoddard (37:29.923)
Yeah, yeah. And did you buy the real estate? Are you buying the real estate or are they just turning around leasing it to you?

Jules Brenner (37:36.462)
So far, it's been like when we've been buying these like smaller facilities, putting them into one, we don't buy the real estate. We lease it with a 10-year lease with a 60-day notice to leave at any point. So what that's given us is flexibility, and then the bank is happy with the 10 years, and we go from there.

Jon Stoddard (37:54.649)
Yeah. So what, what have all these lessons that you learned that you're, getting faster and you're better at buying better deals? mean, have you got a little notebook like my jewels notebook, like let's buy something with a little bit more ISO, ready to go like this, like that lesson and pay a little bit more for it. What does that, what does that look like?

Jules Brenner (38:17.25)
Yeah. Yeah. I would say that's the number one. Like, you know, we always knew that we can get AS9100 and ISO. The state of California has subsidies that they give you to help get it and stuff like that, because they want more businesses with it. And once you have it, it's a pretty strong business mode and pretty strong stamp on your company that you're professional. I do not think we appreciate that enough when we started. You know, that's that. But if I had to go back to ourselves in the early days and be like, yeah, pretty, you know, really appreciate that.

Because it's not the cost of going, I saw a sunny 100, it's literally the people like sitting there and teaching your operators like a, we have a quality department now, B, quality apartment is gonna watch the stuff you put out.

Jon Stoddard (38:54.669)
Yeah, you gotta mop up these shavings that are on the ground, please. Please.

Jules Brenner (38:58.55)
Yeah, yeah, you can't. ISO and AS-9100 don't allow you to have food contaminants in the manufacturing facility. In half these shops, the guys bring microwaves and eat lunch at their weld desk, you know.

Jon Stoddard (39:08.431)
They got a cot next to their machines too?

Jules Brenner (39:12.702)
You know, some of them get really comfortable. I mean, it's the nature of the industry and, you know, and that's like, that's a big thing. I mean, it doesn't, you know, it doesn't sound like much, but you tell one of these guys that you're to take their micro, some guys will quit over that, right? They literally will say, yeah, yeah. Cause that's a, you know, that to them, I mean, we've certainly seen like over, it's called in their eyes, this is over professionalization. don't, you know, we don't see it that way because, you know, a bunch of their friends work on AS90 100 ISO facilities. And frankly, those facilities.

Jon Stoddard (39:25.037)
My god! Really?

Jules Brenner (39:40.61)
are the ones that become sustainable in California. That's how you keep manufacturing jobs in California. Cause that those certs allow you to do aerospace and defense work stuff that's really hot and consistently effective here. But when you try to do all those things, you change the culture a little bit and people don't like that. You're going to have people that are going to like over exaggerate and say that, you know, you're ruining things and whatever. But all we did is we put on a quality standard that is, you know, frankly, highly encouraged by the California manufacturing association and all that stuff. So we,

We do stuff like that and that definitely was not appreciated enough when we started because we knew we could solve for the technology stack. could solve for sales, solve for getting operations going. But when you try to standardize everybody in one way of doing business and put in a quality program because you need a quality program on scale. When you start out, you may have a few hundred thousand dollars you have quality misses from the old seller, but then when you go to eight figures of revenue, you can't run that away anymore. So you quality departments and just...

We did not appreciate that enough in terms of what is really needed to be effective with this.

Jon Stoddard (40:44.887)
Yeah, I to tell you, I used to work at a pretty large software company back in Silicon Valley and they had meeting of all the account managers sales and they said, Hey, we're going to change a comp plan. And when you had like two or three people running out crying, freaking out when you do that. Yeah.

Jules Brenner (40:59.564)
Yeah. Yeah. Yeah. It's, it's quite interesting. I will tell you, but you know, we, we, did when we cut with it in terms of like, you're going to have people that are unhappy. You're going to have us, you know, that's going to hurt. Like if we take guys off of production to do training for all this and they aren't already trained, you're going to see it in, you know, the numbers too. Right. So it's just, some of that, but like the nice thing is once you go AS 9100 ISO, it's basically one more multiple EBITDA easy.

Jon Stoddard (41:21.135)
Yeah.

Jules Brenner (41:29.23)
thrown on top of your business, if not more, because it lets you scale from there. you know, like big professional, like PE type buyers, I mean, I would argue 90 % of the time, plus they only buy facilities with these certs.

Jon Stoddard (41:41.287)
that makes it because it's it's about, accreditation. It's kind of like a, you know, Hey, it's a CPA. It's accreditation. I got a question for you. when you got, went through the financials quality of earnings on these, each of these deals, do you find any kind of a surprises, you know, unintentional or malicious that just shocked you or, just standard, you know, like they, didn't do a good job because their wife was doing the books, something like that. Yeah.

Jules Brenner (41:48.183)
Yeah.

Jules Brenner (42:02.529)
Yeah.

Jules Brenner (42:10.286)
Yeah, I mean, so we had one deal that we've been working off of two years that unfortunately died earlier this year. When we started out, it was a business basically that was running to the ground by second generation ownership. It was a hundred year old company and you know, they were not doing well. They were bidding stuff really low. That's why they were getting the work and it was just a spiral down. Right. And we saw an opportunity to bring their work into our facility and join forces with them and drive them.

and their customers and their people back to profitability so that, you know, that can still stay in California. And these guys, we did the QV, the QV definitely showed us that they were more project based than we thought they were. So we asked the seller if he'd be willing to stay on and or have some seller note guarantee in the deal, something to give us comfort around that if he didn't want to stay on that long.

And right after Q of E, we paid for everything. He's just like, no, I'm not going to do that. you. And when we brought up our reasoning for why he just said, I'm not going to that. Screw you. I'm just going to shut it down, which is the risk you take when you have the dynamic that I mentioned to you, which is when the sellers own their own real estate and they have eight figures of real estate, a seven figure business, you know, which is, yeah, if they're going to, if they're going to sell over close to liquidation, we'll just say, screw you. I'm going to sell the machines, which I mean, you could do that, but I, you know, I would think that most people

Jon Stoddard (43:21.741)
Yeah, they're going to get make money out of this either way, right? Yeah.

Jules Brenner (43:32.326)
They have some sense of responsibility to employees and customers and just not screwing manufacturing in the state. But we certainly have some of the sellers, unfortunately. We try really hard to preserve jobs and keep manufacturing here. We try really, really hard. We think if we continue doing what we're doing, if we sit here long enough with all the guys that are, unfortunately, retiring and shutting down their business, selling the machines, selling the building, that work's got to go somewhere. Someone's got to be here to absorb that because California is not going to change overnight.

being the largest manufacturing state in country. you know, so I think that's been the big thing. It's just been stuff like that. we are really diligent on the front end with QVs because our CFO, Ron, he's former retired Deloitte partner, has been an accountant for 34 years, and he's an audit committee chair and a few publicly traded boards. So these deals get reviewed extensively before we start spending money on QV. So that's helped us avoid a lot of stuff.

Jon Stoddard (44:27.022)
Yeah.

And so when he gives you an opinion and does he, it is like say, Hey, this is a risk that we can take on, or this is not a risk. We need more answers to it. What, does that sound like to you? Cause you're the guy going, let's do it. Let's not do it.

Jules Brenner (44:45.752)
I would say that's true. That's partial. I mean, we like we run as if we have like a formal board meeting every time a deal gets done, right? We never just do a deal where I'm like, we're doing this and everyone else is like, no, I say, screw you all. doing that. We never do that, right? We know we are like, we've had like, we looked at one deal this year where

Jon Stoddard (45:02.063)
Yeah.

It's like when Elon, everybody goes, hey, don't buy Twitter at 44 billion. No, I'm doing it. Yeah.

Jules Brenner (45:10.668)
Yeah, yeah, the, so it's kind of like that. I mean, we had one deal this year that's been under LLY where the three of us in ISG Industrial Succession said yes. And then we showed it to two of our investors and like, no, right. So we didn't do the deal, right? So, you we run it that way. We don't try to like, we want people to be happy, right? We people to invest in Industrial Succession for the future and other verticals. But for that reason, you know, when we get, you know, enough people that we feel like they know about a deal telling us, no, we don't do it.

And that you could only really do that if deal flow is sufficient, right? Like if you desperately need to do a deal, if you're a P fund, if you've got to deploy capital, excuse me, you will put yourself in that position. But if you're, you if you're not like, you don't have to do the deal, right? Or you have other deals, focus on those. I mean, right now our &A pipeline has about 80 million in revenue of deals we could be doing. And not all of them are priced where we want them to. So we're happy to wait the sellers out and, you know, let them go down the path of denial a little bit longer. then

Jon Stoddard (45:50.841)
Yeah.

Jules Brenner (46:08.642)
get to a more fair price because we have other deals that are correctly priced and will be successful. We never want to do a deal where it's going to fail and then the seller calls us and says, the hell did you do? And then they never recommend this to anyone ever again.

Jon Stoddard (46:22.031)
How are you staying in contact with this deal flow? Are you doing direct mail pieces? You run in some kind of a program or trade show or what? What are you doing to keep in touch with them saying, like taking the temperature every three to six months. Like you ready to sell?

Jules Brenner (46:24.846)
you

Jules Brenner (46:32.695)
Yad.

Jules Brenner (46:38.806)
Yeah, I mean, we put all interested sellers into our Metal Solutions Holdings newsletter, which goes out every month, right? So they see everything that's going on. Brokers go on there, et cetera, just to make it really clear about what we're trying to do from a roll-up perspective. And then we also work really hard on trying to just do door knocking. I mean, literally go, like we send a guy, you know, door to door and say hello to people, stuff like that. And that works. mean, some of the businesses we own, like people around town know who they are.

Jon Stoddard (46:46.286)
Yeah.

Jules Brenner (47:07.95)
Metal shops tend to work with other metal shops because most metal shops just have one capability that they're good at. Just machining, so then they get a customer that wants sheet metal, so they'll send it over to that guy and take a spread on that to take a little profit. But because of that, they all know each other.

Jon Stoddard (47:21.973)
It's like a car rehab business. It's so symbiotic. Like, you know who does the upholstery, you know who does the tires, the wheels, the paint. It's like, it's a little symbiotic neurons working together. Yeah.

Jules Brenner (47:26.316)
Yeah, yeah.

Jules Brenner (47:35.822)
That's right, that's right. Yeah, and for that reason, that's one of the beautiful things about, like, if you can put the flag down in a certain area, it's a domino effect in terms of deal flow, right? And if you can get a domino effect with deal flow, naturally, you should be able to get deals under better prices.

Jon Stoddard (47:51.373)
Yeah. Cause it's the peers sell the peers. And at that point you have a relationship. Yeah. let me talk to you about, just like who Jules has become, you know, since you bought these businesses now on your third and have these partners and your, like your wealth is definitely multiplied. mean, who's, you know, what's different about Jules when you were looking to buy your business and now you own three, like who's

Jules Brenner (47:56.59)
That's right, yeah.

Jon Stoddard (48:20.547)
How are you different? mean, what have you learned about yourself and what will you would teach other people or teach your sons or kids about like what you need to do in life?

Jules Brenner (48:33.006)
I mean, that's a good question. I've never been asked that before. I mean, I think the responsibilities here have changed, honestly. There was a good phrase, I forget where I heard it, but was like a lot of the businesses, they're maybe started by generalists, but they're grown by specialists, right? And I think it's been a lot of that where I've definitely continued to be more general, but more general hands off versus before when we had ASM, it was general and hands on, but it was over smaller.

problems right like right now if I send the wrong slack message to the general channel right it you know 17 different opinions form in the wrong way three guys leave for the day right like it causes a chain ripple effect so quickly that You know you have to be thoughtful about a lot of things you do and say You have to be really thoughtful about the managers you put in place because you know bad managers the actions of bad management pervade over more people as well So there's been a lot of that and then

I think the other thing too is we definitely have found, it's not like we're going out and from the wealth perspective, drawing a bunch of money out of the business right now. We don't really do that. We still run this place like it's a, the money stays in the business. We try to grow that. We want to be successful with this. Our kind high level thesis has always been metal solutions holdings is one roll up that we do out of dozens over decades.

I really hope anyone involved in this.

Jon Stoddard (50:00.041)
So this is a buy and hold strategy, but if a PE firm knocks on your door in five years, because you got the right numbers, you're going to entertain it. Or are you just going to say no? Yeah.

Jules Brenner (50:10.186)
Yeah, that's right. That's right. Yeah, and like you buy the business is cheap enough to start where you know, let me we never buy cheap or buy fair but like if you buy at the right price to start you don't have to sell right because like I always love those situations when the sellers come and they're like Well, you're gonna you buy my business and let pay me eight times e but I might tell them fantastic I'll pay eight times e but if it gets what I have to sell it five years to make any money back here Right. So if you want a permanent hold buyer

Why don't you ask them how they're paying for you to start with, because then they're just telling you whatever stories that are not true, because they have to sell it because you've kind of forced them into that. for that reason, we like the buy and hold and have to do buy and hold based on what you said too. But the industrial succession more broadly, we want to be able to do this in other verticals. And we want anyone who is really involved with us here to see that as well too. Look a little bit more broadly. I think that's, to answer your original question, that's where a lot of my mindset has been drawn.

We want this to be successful. We don't want this to be like so growth. We like overdo it and ruin the business in some way or something like that. It doesn't allow us to do successful stuff. We want to just make the right long-term decisions for the business that let it scale so that people can trust their reputation going forward. Because our intent is not to just, even if we did sell metal solutions, it's not to just say, let's all go on a beach somewhere and be done or become passive investors and other people's stuff. I I think the team here really likes operating. We really like executing these strategies.

And we've got a lot of like gas left in the tank to do that. So it's about how do we set that correctly? How do we make sure we're steering the ship correctly from that front? And I think that's been the biggest change in my life per se, right? From a strategy and focus perspective. How do you train others? That's been another big one. We've certainly done a lot before of like, I'll just do it myself. And now it's a lot more like I got to pause and put an SOP in place for it, but a way to measure KPIs and then teach someone else to do it.

Jon Stoddard (52:01.869)
Yeah. Before you bought, had the expectations, what this reality is going to be. And now you're living in that reality. And Buffett used to say, Hey, I tip-tap dancing to work. Are you tap dancing to work?

Jules Brenner (52:02.018)
than have someone who can give me terrible.

Jules Brenner (52:15.922)
yeah, mean, honestly, even when I was like, you know, working in like the industrial tech industry, I mean, I still don't feel like I've ever actually really worked the day so far. I mean, this is just fun. This has always been fun. You know, I love industrial technology. I love the like rolling out something modern to old school spaces. I love it when, you know, we get to have more control over our destinies versus we were selling a piece of software.

to someone else and maybe they use it in the right way we want to or not. Here we get to put it in and show our destiny as to how we use it. But I also, I I think the people are really excited. think if somebody were to come into our office at any point in time and just stop any random person here and say, how do you feel about things? I think they'll tell you that they're really excited for what the future looks like. So it definitely makes it very rewarding to come into work every day and see that.

Jon Stoddard (53:06.531)
Yeah. I got a question for you because that's, it's people are motivated by different things. I remember this guy that owned a software company back in the nineties talking about, it's just weird. Some people are motivated by, you know, money. And some people are motivated by having that window that has a view. Like how's that? Is that coming to factor in with some of your people that you work with and understanding that or.

Jules Brenner (53:34.082)
Yeah, think, I mean, people here care about the money, but I think if you want to just money in your life, there's probably other industries you could go for. If that was all it was. I think the window with the view is maybe less so, but a lot of people, a lot of people love being managers. A lot of people love having authority. I would say that's pretty true in this space. So we definitely try to support that. People want more responsibility and the authority that comes with it. And I think a lot of people are just like,

excited about like, you know, they grew up out here in California. They know how important in the industrial economy is to California, right? They know that it's like, you know, there's businesses leaving the state, there's businesses that are retiring, should be down and they want to see it successful, right? So I think that's probably if you were to pull random people here, that's probably going to be top of what they say here. And then having a business that like, because most of our competitors, like we tell people like, mean,

You know, if you want to leave and not work here, like your alternative is to go to someone that's stuck in 1980s, right? And everything that they're doing, that's your alternative. So you can be in a business that's looking at, I think we were stuck more in like 2030, more than 1980s, more than anything. So the, think getting people that are excited about that too, using technology and stuff like that also motivates a lot, right? They love the newness of some of the stuff and the fresh ways of thinking.

Jon Stoddard (54:51.608)
Yeah.

Jon Stoddard (54:55.055)
I got to ask you about where you're getting your inspiration from. Cause I saw on LinkedIn, you're part of Hamptons and I recall you and I meeting, we, I referred you over to Adam Coffey at the chairman group. you, did you look at that group or, what did you get out of, what are you getting out of Hamptons? That's.

Jules Brenner (55:12.782)
On Adam's side, yeah, like I reached out to him. I think he does like a coaching thing So I'm looking at that before that he wrote a bunch of books So I bought all the books and I'm gonna read them actually through Thanksgiving. So, yeah

Jon Stoddard (55:23.353)
Yeah, Best selling books, man. Top four best selling books in business.

Jules Brenner (55:29.966)
Yeah, yeah, appreciate the recommendation on And on Hampton, think, so we've looked into a lot of different things. I mean, I was part of an entrepreneur organization for a bit. looked at YPO. YPO in California is more real estate people. And then on like kind of old world Beverly Hills money from what I was actually directly verbatim told from some guys that are in those chapters. So I was like, you know, maybe it's a fit, maybe not. And then the,

Jon Stoddard (55:32.397)
Yeah.

Jon Stoddard (55:46.809)
somebody hard to make a recommendation if they live their life in real estate. Yeah.

Jules Brenner (56:00.024)
The Hampton kind of came out because I was like, it's more tech focused, more growth businesses. So I thought we were more appropriate for that.