Ep. 38: Joseph Cabrera – Head of Brand at American Operator

Joseph: It is a super hard job, you know, these small businesses don't all look alike. They're very complicated in their own ways. They're very unique in their own ways. Here's where I kind of like where American operated the soul of it comes from and probably where that statement David's talking about. If you think about small business makes up nearly 50% of our country's GDP. Now you can argue one way or another about where America is right now, especially with all the things going on. But I still believe and part of it is because I'm American, so I want to believe it, that I believe that the country that we have here is still the light on the hill. It's still a place that may not be perfect, but it is still a place that I think the rest of the world looks to.

Evan: Welcome to Y'all Street. Today I speak with Joseph Cabrera, the head of brand at American Operator.

intro: The machine that smashes. 100% legit. So Chris, you want a cup of coffee? I just want to be the best. Thank you.

Evan: Joseph, you want a cup of coffee? Heck yes. I got you this, at least I think, super awesome American themed coffee mug for your company, American Operator, which by the way, is the coolest name of a company that I have ever seen or heard in my life. What is American Operator?

Joseph: Man, well, one, thanks for this. It looks like an old West Point emblem, which is kind of neat. Very fitting. Thanks for this, man. What is American Operator? It's our answer to this really important thing going on in America right now. The name on its front, I'll kind of start with something more just kind of on the nose. American Operator, American being, of course, this great country we live in, but operator being, if you look at the time, the word operator means a lot of different things across different industries, but in the military, it's kind of the highest form of executing a warrior task or the warrior job. When it comes to operating in the civilian world, it can be a tractor operator. In the world we see it, it can also be somebody who runs a business, not just owns it, but actually runs it. We could have called it American Owner. It just, we weren't really, we wanted to talk about the right things about owning a business, which is like the hard work showing up every day, doing the stuff that needs to be done. That's the name. The company itself is the answer to something much bigger in America that's going on right now. We got an entire population, primarily in the baby boomer generation that has built incredible businesses, or maybe have been second generation inheriting these really great institutions, plumbing companies, light manufacturing, logistics, the local bakery, brewery.

Evan: All the things that make our world go around, right?

Joseph: All of them.

Evan: Just like the brewery.

Joseph: Just like the brewery. I mean, here in Shiner, it's very fitting. And so what we recognize is that there is an entire generation or two built the foundation in this country. And for one reason or another, there's just a newer generation right now that may not have been engaged with potentially taking it over. And we can get right into this kind of what it means or what it doesn't mean. But there is still a small population and hopefully growing of future owners that I think realize whether they're getting burned out in corporate America, or they're just getting out of the military, or they play pro ball, but maybe didn't make the A roster and now they got to figure out what to do. They want to serve their communities. And so American Operator gives them a way to find this opportunity to take over these really great businesses that have been going on for 20, 30, 40 years, while also allowing retiring owners, not only an opportunity to retire in a good way and not just turn off the lights, but also to part ways with it with dignity. A lot of them, there's no separation between their business and their soul.

Evan: It's their baby.

Joseph: It's everything. You know, someone called it their first child. And so you don't let that go lightly. And we see this all the time with owners. And so, especially Wall Street coming in, scooping them up. There's a lot of owners very disappointed right now because they see their baby and it's just being kind of relegated to like an Excel spreadsheet and just getting rolled up. So what we do is offer an opportunity to put it in the hands of a new American Operator who's going to be a member of the community, who's going to have the support of our team, and most importantly, is going to keep it in town and keep it local. So that's what American Operator is and it's everything. From beginning to end, we take care of all the things that happen and we can dive into any of that, but that's what it is.

Evan: So like the typical word people would know is private equity. Do you guys accept that term? Do you not? And talk about the differences and how traditional private equity firms come in, they acquire a company, they're looking to sell it in say five to seven years versus just the model that American Operator works with and how those are similar and different.

Joseph: Sure. By the way, this is a good cup of coffee, man.

Evan: I really appreciate it, man.

Joseph: Let's see. Do we accept that? I think you asked me earlier.

Evan: Is it a cuss word? Is private equity a cuss word at American Operator?

Joseph: It's not one we use with a lot of... We are capitalists, no doubt about it, like every great American business is, but private equity is not what we would call ourselves at all. Here's why. It's just different. I'll explain private equity for folks in this world if it's helpful. The way it works is, and it's something that you've seen in across different industries, but small businesses, one private equity is definitely Wall Street's taken by force. What it is, is you'll go out there and you buy Evans Plumbing Company. Great business, really profitable. You'll go in, you'll buy this business, you'll put your own CEO, general manager, whatever in charge of it. You'll run it for five, seven years, grow it, grow it, grow it. Maybe you'll attach a bunch of businesses to it. A lot of the times you'll roll it up in a bunch of other plumbing companies. Then what you'll do is you'll sell it after that five, seven years down the road, make a profit, do it again. Private equity has done that across a lot of different industries, no different with small business. We're not interested in doing that at all at American Operator. That's not our goal. As a matter of fact, we fought a lot to even do what we're doing now, because if it was up to us and we could just be the conduit between an old owner and a new owner, and we could just make like a broker almost, that's it. If we could do that, I think we'd be okay. But we realized that the mission was so important and it was so complex that we couldn't just leave it to chance. What I mean by that is great operators often have, and why we're different. Great operators are often not thinking, I'm going to be a great deal person. I'm going to understand all the finances. I'm going to get all the money right. I'm going to get all these things squared away. They're going, I'm going to lead people. I need to get them to move. I know how I craft. If you're a plumber or tradesman, you're maybe a master tech or something. You know all these skills. You're not thinking about the other stuff. Often the best operators are not always the best buyers. I describe it as imagine being a world-class videographer, but then having to build your camera as well before you use it, just a separate skill set. What we do is we realize, okay, we need to help folks with that piece, but different than private equity, we're not interested in selling these companies. We might buy them on the front end to help this operator out. Evan's the new owner. Evan comes in. We're giving you a good chunk of ownership to begin with, but our goal is to make you the majority owner. We do not want to stay in the majority and we want this business to be here forever.

Evan: What is the mechanism that y'all do that in?

Joseph: How do you mean the mechanism? How do we structure it?

Evan: Yeah, I mean you have someone who comes in. American Operator has majority ownership because they're buying it. Let's say the operator comes in. They're very successful. 10 years down the line, it's my understanding that y'all want that operator now to have the majority ownership in that company. How does the ownership go from American Operator over to that operator?

Joseph: Dragon. What happens over the course of however long it might be, 6, 7, 8, 10 years, we give this operator a couple things. One, a glide path for just time in the seat. Hey, the longer you spend in it, the way you grow it, how you perform. We also want to make sure it's a good fit for you. I think a lot of folks think they want to get in the job and I think we do a pretty good job finding the right folks, but we know that time and family and things happen, so hopefully all those things are tracking. Every year when we buy this business, also different than private equity, we're making sure there's enough buffer. That's why we're not the highest paying person out there because we want to make sure there's enough to feed the family of the guy or gal who's running the business, but also enough to get those shares bought out from us. Every year the business is servicing those and those shares are transferring over into now what the new operator is going to be able to take over.

Evan: Just like anti-dilution basically because you're buying back your shares, they still have the same number of shares, so they're getting a higher percentage of the company.

Joseph: That's right and they're moving that stuff over and that can take just kind of as long as it takes. Sometimes some businesses might happen sooner and some might happen later and when folks ask us why, we've had two questions on that. One of them being from our friends on Wall Street is why would you ever do that? If you already have them, why would you ever give more away? Because they're kind of used to giving their operator one, maybe two percent of the business. For us, it's ten percent right off the gate and then we want them to be the majority owner long term. They go, how do you make any money doing that? And for us, it's just like if we do it's kind of this is the difference between being mission driven and being like how do we harvest as much value as possible. For us, we believe long term that not only is this the right thing to do economically, it's just the right thing to do for the country. Our hope is if we're doing this right now, it'll end up becoming the way moving forward and allow us to kind of have an opportunity to just by sheer volume of doing this over and over again in America for it to be something that sets in. And then the last thing I'll say about it is that with these operators, what we learned is that a lot of them have all the right soft skills and character to go run these businesses, but they need some time to get their feet upon themselves. And so us staying with them, I mean when I say with them, we're not just like some guy out there in a high rise asking for this week's weekly report on KPIs. We are with them. We're flying the middle of North Dakota, middle of nowhere, Wyoming, these great towns like Shiner. And our team is in with them, operating, helping them on marketing stuff, going, okay, you go run your calls today. I'll sit down here and let me rewrite this SOP for your team. So it's very involved and it's not one of these like we're just the finance guys. We're very much operating with them.

Evan: Well, it's really interesting too. You said you can have a master electrician who is a fantastic electrician, but there's AR, there's AP, there's payroll. How are you going to manage your cash? What are your CapEx? It looks like. What does your OpEx looks like? There's a lot of other aspects around running a business that the master electrician might not know off the bat. And that really is a very valuable thing that a company like yours comes in and does. We have a mutual friend. His name is David. That's how we got introduced. And David wrote on LinkedIn. I want to read it because I think it's awesome. He said, when work gets hard, I like to think we are saving T-Ball team sponsors and 4th of July parades. Yeah. Talk about that. What is the ethos behind that? You're saving the T-Ball team sponsors, you know, the little small town company that is out there on left field.

Joseph: Talk about that. First of all, David is not only good people. If someone met David today, they would see the testament of like the type of teammates we have. They're just salt of the earth, great Americans. Anybody who says that like a new generation, it's all kaput. It's not. It's there's a lot of promise. I'll start here. The reason all of it is a super hard job. And, you know, these small businesses don't all look like they're very complicated in their own ways. They're very unique in their own ways. Here's where I kind of like we're American operator, the soul of it comes from and probably where that statement David's talking about. If you think about small business makes up nearly 50 percent of our country's GDP. Now, you can argue one way or another about where America is right now, especially with all the things going on. But I still believe and part of it is because I'm American. So I want to believe it, that I believe that the country that we have here is still the light on the hill. It's still a place that may not be perfect, but it is still a place that I think the rest of the world looks to to. Call it like the gold standard of like what a really thriving civilization, economy and mindset of the people can be. And so if you think about it from that perspective, that means that if you believe that economic viability in a country is important for it to be the world's protector, be able to create opportunities for folks who are not even from here, who immigrate here and want to create their own version of the American dream, then you have to go and say, well, then 50 percent of that is predicated on small businesses staying strong. They employ millions and millions and millions of Americans. They help their communities. And so at American operator like that's what we think about. It's like it's almost like a matter of national security that we like really preserve these small businesses. Simultaneously, when you think about what small business does, I always think about my mother and my father in law. They're both small business owners, have been their whole life. And the one thing that I always observed from them is. What they do that never makes the P&L, whether it's a free load of dirt, they give the church, whether it's my mother giving free meals every single week, those are things that don't seem like a big thing on its nose. You would never get that at a big corporation. You would never get that in a roll up. But in these small businesses that are allowed to just really take care of their community and their neighbors, what ends up happening is you create this value. And I mean, this may sound extreme, but I think it's true. Imagine these free meals going to the church every single week. That allows the church then to not have to spend money on donations and instead on food, and instead they can go ahead and spend it on a young person's education program or mentorship. That young person gets mentored. They're given back to they come back to the community. They're the mayor now. They're creating good viability. Again, I know that sounds extreme, but I actually think that happens all the time. And when you eradicate that and you just chalk it up to like, is it a good ones and zero? Because free meals don't pencil on a spreadsheet for most big roll ups. They just don't.

Evan: No way.

Joseph: But it's the right thing to do, right? Small owners do it all the time. If that goes away, Evan, then we lose like what the American dream was all about. These businesses are not just ways that people pay the bills. This is an extension of their character and who they are in those communities. I've often talked to business owners and they'll say things like, you know what, man, I have no idea how much we spend on that. But I just know that as long as I'm owner of this business, that t-ball team or that church is going to have our name on the back of their jerseys or whatever it might be. Right. Or we're going to go pay for the seventeen hundred dollar paver that goes into the park or whatever, because it just and it doesn't pencil, but it does to them because it's how they take care of their communities. And so at American Operator and to David's comment, when you think about just like what this whole thing in America is about, this whole American dream and what we're building, it's really just giving these communities agency. And if we kind of roll that up, I kind of use this last example is like it's like rolling up a bunch of houses in a neighborhood. The reason a neighborhood if you're walking to a neighborhood and you just feels homey, it feels good. People say hi. It's because every person in there owns their own house. Yeah. But if you go to like an apartment complex and it's owned by a singular behemoth, there's no character. It's all kind of ripped out. People might be good in there, right? It's place to live, but it loses its character. And ultimately, I think is what America is all about. So that's I think David's comment and kind of what we believe in American Operator.

Evan: How did you get into I mean, what was your back? And I know you went to West Point. So obviously you had a lot coming out. You're in the military. How did you get so passionate about this? Talk about your college days and just what got you into this.

Joseph: Yeah, man. West Point. I thought I was going to do 20, 30 years in the service. You know, my dad is a career public servant, former army guy. Mother is the entrepreneur. So I knew that I wanted to do something in business, maybe run my own business at some point. But I was gonna serve my country first. And so I was fortunate enough to go to West Point. And what I tell folks is probably one of the most consequential things I've ever done in my life, not just from attending the academy, but also what it did to prepare me for follow on things, whether it's ranger training, first assignment in Alaska, all the way to the mountains of Afghanistan. All those things were extremely formidable. And what it allowed me to do. That institution, I guess I'll just I'm looking at this logo, it looks very, very akin to the logo of Duty Honor Country at West Point. That place is a forging ground of what you already are. A lot of folks, oh, you must be a certain way because it kind of goes back to your question of like, why do I take this way and why it matters and what I did before all this. What it's doing is really just making more of what you already are. And so they actually do an incredible job on the front end, finding the right folks, period. Because if that initial ingredient isn't right, what it's going to do, I've seen it, it can destroy people, actually. And it just it can actually be quite a miserable place to be the military and the academy itself. The pressure of it. Yeah. It's a lot of ass, you know, the 17, 18 year old to kind of have to surrender a normal college experience to then lead 30 or 40 troops in combat. And during the time that I joined, we were right in the height of the Afghan and Iraq wars. And so all that to say is that when you go there, what I realized about reflecting on my time at the academy is it really pressure tested those things. And merit was everything. And how you prepare to be a leader in combat was the most important. After getting out of there, did a bunch of great assignments in Alaska, spent some time on the East Coast and then some time in Afghanistan. And what I what I learned about that is how important. How important not only military services, but how important the people who actually decide to join are. And so this is kind of what started sowing some seeds for me about this is what I want to be a part of even after the service on my first reconnaissance platoon. You know, we had guys from the Bronx and we had folks from the beaches of California and good old boys from Texas. And so what you realize is that this country was made up of very different folks who could all be guided on the same thing. What they required was clear vision, strong purpose, and most importantly, good leadership day to day to go make it happen. It's kind of foreshadowed why I think small business is so important and what it was about it that kind of because it's the same thing. There's just something raw and tangible about military service. Same thing that happens in small business. There's really you'll find that day in and day out running a plumbing or light manufacturing company is really just a lot of hands on leadership. Like it's not fancy. It's not sophisticated. It's very straightforward, very raw, kind of like a sports team. And so those those things that I think I was naturally programmed for at the academy and then what ended up happening in military service later, I think really just set in for me just how important it was to be involved in something in my life that had that same dynamic. So I got out of the service after the better part of a decade. Again, I thought I'd do 20 years or so in but had this calling to go leave and do something else. And so God's calling really. It was something that just for me at the time I was at the height of my career, had the pick of the litter, you know, top of my captain's class, could do whatever I wanted to go do and realize that it was time to go do something else. I didn't know that something else was. I just had a bunch of buddies that had got out before me. And the only piece of advice they gave me is do something in finance. And I was like, guys, I'm not not great at math.

Evan: Did you have any background in finance whatsoever?

Joseph: None. OK, no, it's actually my worst subject in school. I like math and I can do business math. But when it comes to just like being, you know, the international relations or, you know, studying counterterrorism, that stuff is my bread and butter. Yeah. The physics, I think I'd barely scrape by. Like it was one of those things that those things didn't really resonate. They go, no, no, no. I don't think you understand. It's not really it's a lot more relationship based than you think. They just go there. It's kind of got a militaristic vibe. A lot of us guys from our former life ended up going into there. So I started hunting around when I was getting out of the service. Trying to figure out what I was doing. I knew I wanted to get back to Texas. My wife and I both really, you know, I'm from here, but Kelsey, my wife's from the Midwest, but she really fell in love with Texas and that's the best place in the world. Best place in the world. She'd say the same thing, too. And so when we decided where we go, we go, OK, let's get back here and just do some mutual friends and people we met had a gentleman in town that was running a finance and tech firm. And so he gave me an opportunity as chief of staff. Again, knew nothing about it, knew nothing about the industry. And from one minute I was kicking down doors and jumping out airplanes to now being in this scenario where I was in the biggest hedge funds in New York and in Silicon Valley and just learning, even though I did get my MBA at Texas, like I think I learned way more running in that position than I ever could have. And at that point in time, I realized, OK, this is an interesting thing to start pulling the sweater string on. But it wasn't it completely. I knew like at the end of that, I learned a lot about myself and I learned a lot about what I liked and what I didn't like. The high end, I dealt with a lot of private equity, a lot of investment type folks and those things had run different businesses along the way. What I realized is I really liked the stuff that was connected tissue to this small business America. And so after getting done with several years running in that world, I had moved into starting my own venture where all I did was take my military experience, paired it up with some really great business leadership problems that people had in, you know, in different businesses across the United States. And I say it's like if Red Bull was thrown on like a team building, this is what we did with my business. And so we would take these guys and gals to the most extreme things you can imagine, the mountains of Alaska, to teach them how to rally race, to help like we want you want to learn how to communicate better. Let's put you in a rally car. Let's teach you how to do it. And then CEO, CEO, let's have you communicate that way where your lives are actually at stake.

Evan: So this is like, you know, in the movies, it's the classic, like you go to the summer camp and they have you hold the log above your head or something. This is like that on 10 times steroids that you're going out and doing.

Joseph: Because it's the only thing it's like the only way I knew actually learned that when I was when I was helping run this finance and tech firm towards the end of my time there, the second half of it was running our entire like venture arm. It was like the eight different businesses that I was responsible for. I was surprised I was given this responsibility. But after being chief of staff, I was like, we're going to have you run this entire internal venture arm. All I knew how to do. I was like, man, I know nothing about these things. And they go, no, you don't need to just just do leadership. They'll be all right. And so I went in there and the only thing I knew how to do, Evan, was just like, get these people to bond and cooperate. That was it. I let them do what they do best. And so when I got out of doing that, I was like, can I just take that and help more people doing those things? The only way I know how to do that, though, is like through the extreme version of that with the military, because there is a bit of if if we hung out long enough, you'll realize I really do believe that shared suffering is like the only way people really actually lock in. That's it. And so you have to do something uncomfortable and hard together. You can't like being a you can't be in a hotel conference room, do a few trust falls and be like, we're tight now. Right. There's something bonded when you actually suffer together, whether it's being cold in the rain, is what we do with folks in Alaska, or whether it's like gripping a steering wheel and being like, I'm not going to kill you, trust me. And oh, by the way, we got to communicate because I actually don't know what's going to happen in this next turn. But you have the roadmap, you know, teach me what to do. And when we started doing this, when we started getting teams to lock in. So what does that got to do with American operator? I had no reason to leave what I was doing. I had built this dream business. And I ended up getting introduced to Will Fry, who at the time was not called American operator. And he had another company called Main Shares, and he had started this thing and we had got introduced together. Mutual friend had introduced us, mutual contact. So I think y'all just need to meet. So we were getting together. I was running my business. He was running his.

Evan: You're running this this consulting business where you're putting people through insane things.

Joseph: That's right. Yeah. Yeah. And quite a dream job because I got to go hard for most of the year, got to take some time to recon new, you know, new scenarios, new things that go down to Africa and be like, can we work something here? Can we do another, you know, maybe four or five team buildings down here with this kind of same level of stuff? Again, it was like the best of the military and the best of the private sector all in one business.

Evan: Were people like willing and joyful to do that? I mean, I could see, you know, you just toward our facility. I could totally see us, Tarek, being like, we're going to do this insane thing and it's going to be awesome. We're all going to do it together. But you saw people were willing to go do that and they enjoyed it.

Joseph: They're fired up. Here's what I will say is that usually the CEO, it's like guys like probably like Tarek and you who are like, I'm in. They don't always tell their teammates very well what they're getting into. Like we signed up to go do this thing. And then they're like, why are we here? You know, so there's a bit of discomfort, which is good. That's the whole point. What we realize, I'll say that we've had to create other options to like walk people into it. At the beginning of the day when we were, we were had folks in the most extreme version.

Evan: Like give me an example. Give me a story.

Joseph: Oh, I'm talking about like we, we would, we took, we took a group of leaders to Alaska. Now this is where I grew up out of Texas. My first job was jumping in the Arctic out of airplanes in Alaska for years. That was my specialty. And so to me, it was very comfortable with the environment, but to me, I go, okay, let me just, I'll, I'll knock it back a few notches. But to me, I didn't realize, like I remember the first time we were taking this group out into this, into the mountains, we're going to go out for days. That was already my first mistake. I didn't realize that like people aren't, some of them never even camped.

Evan: You're so used to it.

Joseph: Right. I'm like, we go out for 10 days. We're just going to go out for a few. This is going to be way better. I had no idea. So we show up, we pull them into camp. We're hiking all day, humping all day into the mountains. We get this little spot there by a big kind of stream, good place to set up. And I go, all right, Hey y'all, you got buddies, buddy teams go out there. These are, these are leaders. These are not like, it's not a summer camp. These are guys and gals who like done stuff in their life. And so I was like, y'all go out, get set up 30, 45, let's go meet back here in 45 minutes. And then we're going to kind of go discuss what we're doing for the rest of today. And then, you know, later. So they show back up or they don't show back up actually. So I'm sitting there and I'm like, it's 45 minutes, 50 minutes. Where is everybody? So I started walking around to kind of the various spots. And I found like between the group, let's see, there's probably 12 of them. There's like half a tent set up and I'm like, what the heck is going on here? And to me, I just assume everybody knew how to set up a tent. It's not a very complicated thing to do. And this is when I realized, and some folks were having a little bit of a panic attack. I had a guy, one of the leaders later would tell me, he's like, I was sitting there that night, staring up at the top of the canvas roof of this tent and going like, where the heck am I? And what did I get myself into? You know, just kind of freaking out. And when I realized that one time, it was like, okay, we got to ease more folks into this. For every 10, like on an executive team, usually the CEO is like the most adrenaline junkie. And then everybody else is kind of an octave of that.

Evan: Makes sense.

Joseph: So what I've learned is, okay, we got to find scenarios to kind of walk people into it, but let's not lose the essence. And we used to tell people, don't, if this isn't for you, like if this, we're not for everybody, we're not everybody's cup of tea. But if you do want that sense of adventure and share suffering, come talk to us. And so that's an example of like these extreme things we would get into. At the end, it always was something that they all kind of gather and hug it out and go like, wow, that was, that was meaningful. But they had to kind of get through. There's nothing, there's nothing funnier than seeing a bunch of clients who paid you and they're out there and it's just like an Alaskan torrential downpour. And they're just sitting there in freezing temperature. But at the end of the day, it was ended up being an incredible thing that I got to do. And so I had no reason to leave it. To me, it was probably something I can do for the rest of my life. I had met Will, was building this thing out and realized that if we are going to be mission-driven, we really needed to focus on enhancing more of the operators that are coming down the pipe and really start putting a brand around this thing. You know, the one thing that a lot of these bigger funds and other people who do something similar, it's not a novel concept buying these businesses and retirement and all that stuff was that there's a heart and soul to it. It was just kind of like, it was kind of a mathematical equation. And so we needed to put storytelling and brand around all of it in order for most important thing is for owners, the guys and gals who'd spent their blood, sweat and tears building these businesses for decades to know who we were as a character, as a human, as like, what's the testament of our character? Trust them. Can you trust us? And can you know, and so how do we do that to show one? So at that point, I remember getting home that night, prayed about it. And I remember talking to my wife and she goes, what do you think you're going to do? I was like, you know, we'd be giving up this like dream life that we have. I get to literally do adventure with people. Like this is what I get to do for a living. But I'm afraid that I'm gonna look back in 10 years and be down that I didn't help this important thing that our country is going through right now, which is like, you see the fabric of our country kind of loosening. There's an opportunity for us to tighten it and be a part of that. I think we got to go do this. And then maybe later we can get back into adventure and all these other things that'll always be there. And last time I checked Alaska is not going anywhere. And so that's how we all kind of got introduced in that space. And it's been kind of the history ever since.

Evan: So let's talk about without companies like American Operator, without companies attempting to keep America private. We at Texas Precious Metals, we work with a lot of the exchanges, the stock exchanges. And I think that you can make an argument that there are times for companies to go public. There are times for companies to stay private. But without companies like you guys attempting to really pass along smaller businesses to other generations, what do you think the outcome would be? What is the end of that problem? If we don't end up passing the torch. If everybody just let off and let the numbers and the spreadsheets speak for themselves, as they are a lot of times on Wall Street, what's the downside risk?

Joseph: If we allow that trajectory to continue to happen, I think you probably lose on two fronts that I think we don't get ahead of. One of them is just kind of a macro front. Economically, I think in the short term, it seems like a lot of value gain, right? America's beefier, these companies are bigger now, they're doing much more in revenue, all these things. Long term though, is if you fast forward long enough, I think you'll find that the soul of these companies get ripped out. And I know that sounds like I'm being squishy and like too soft about it. But it literally is what made these businesses special. It was that founder had a special ingredient, a high level customer service, immediate reaction to customers asking for a product or whatever it might be. You've ever bought a pocketknife, I'm a pocketknife guy. And so like if you're buying a pocketknife, and then years later, you buy it from the same company, and just like the blades dull, or something like it goes, what happened is we find out that they outsource their steel to somewhere offshore, and it's not as good anymore. All those things start to fray. And then economically, people stop buying, they start going somewhere else, they start their own business instead, because like, you know what, I can do it better. So I think you give it long term enough, there is a lot of things from an economic value that start to go down. It just is. And you see it over and over again across a lot of different industries. I think the other side of it is maybe more important. America's an interesting spot right now, I got the great benefit of like serving my country for the better part of a decade. In a way, it's a blessing and a curse. The blessing is that like, there is something no more connected to purpose, being with a great group of folks, and doing hard things with good people. The curse is that like, it's really hard thing. I mean, American operator is it, right? It's like, it's a hard thing to go chase, because it's almost like everything's going to disappoint you after that experience. Yeah. But I actually think I reflect on that time often. And I wonder why that was so meaningful. I actually think we're all programmed to have that experience. Like we all want that. We all want to do hard things with good people, and we'll do it forever. And ultimately, we want to do it in the service of others. So I think the thing that happens if we go and don't take up the torch and kind of keep allowing these businesses to stay local and move into the hands of the next owner, is I think you get an entire group of young Americans that are coming up that are going to be mentally rattled, and their soul kind of ripped down. They don't even know why they're going to go and check into a nine to five. They're going to do a thing that maybe college told them to do, or they're going to go do something that they feel like, you know, it's what's expected. And they're going to lose. And then I hear the sad person not going to know why. See, for me, at least I know days when I was kind of running around Wall Street and doing these things and going like, ah, something's missing. I can go back to my military service and go, that's what's missing. The old locker room, the old warrior locker room is missing.

Evan: Brotherhood.

Joseph: Brotherhood. They won't know what that is unless you may be playing on a sports team or something like that. They won't know what that is. And I think what we do is lose that soul. And so in addition to it being economically important, I think there's an entire generation of Americans that are we're on this like teetering point that we're going to create this really invaluable experience because make no mistake, running a small business is not only hard. It's like it might be the hardest thing you'll ever do. It's hard. People are complicated. It's often the solve is you just got to go turn a wrench yourself. Like it is extremely excruciating. I tell folks, do not leave your nine to five if you want easy. This is going to be way harder than what you're doing. And there may or may not be health benefits. So like, you know, stay with your job. But if you want to do hard, but it's worthy. You want to look back when you're 50, 60, 70 years old, know you did something and built a community. It's worth it. So we're trying to do is expose that life to a new generation coming up.

Evan: I think you look at my generation. I mean, what is normal now for us is, you know, one and a half to two years, new job, 10 percent raise one after two years, new job, 10 percent raise to the point where I think the passion just dies out because everything's on paper. Everything is corporate. My co-workers are not my friends. There's no I mean, we're in Shiner, Texas right now. There's no small town going to the football games, going to the baseball games, you know, going to the after work. Those things don't exist. And everything is just about numbers. And it's kind of like this problem that we talk about, right? Like, well, I will never be able to do the personal. They'll never be able to do the relational and people will. Those jobs will still be there because they really matter. It's kind of the same thing here, though, with these massive corporations, with all this M&A is just the people don't care. The turnover ends up getting really high. I would assume you have less people doing jobs for longer. They don't care. They have no passion for it. And that long term, like you say, maybe not short term, but long term, that cannot be good for our economic growth, I would assume.

Joseph: No, it doesn't build it doesn't build strong people either. Like, I want to be around folks who are tested and have the character that can go up against anything like the amount of times just want to get in my brain for a second that I sit at a restaurant and I look around and my wife knows I'm doing this. I'm just like maybe it's the old military, the reconnaissance brain in me or whatever. But I'm looking at folks and going, if something were to happen right now in this restaurant, how many folks do I think would step up and do the right thing? Whatever that is, someone yelling at a waitress that's uncalled for or a guy who comes in there trying to take the restaurant down, whatever it is, how many folks could I rely on to do that? I think there's a point in our country where like you could probably bank on almost everybody in that restaurant doing that because it's how they were built or coming out of a world war or something. They just were bonded. They worked with their hands. Blue collar wasn't a thing. It was just called work. You know, everybody worked, you know, in something that they built. I think what's different now is that you're not sure what that is. And I think even more so you kind of like isolated, you know, and so I don't really know Evan that well. We're in these small towns, you know, everybody. And so what we're trying to do is be an answer to, can we get folks to experience that? Because I think they'll love the heck out of it. It'll be painful at first, but I think they'll really enjoy this kind of work, but it does require some really strong, tested folks of character to be able to do it well.

Evan: Yeah. When I was in high school and in college for like probably six years, I worked at a small construction company and I loved it. And I think super highly of the company. I think super highly of the owners of a husband and a wife. And I think the world of them. Um, but there was always questions of like this man and wife, this couple, they built this company and the vast majority of the business comes in because of them. Right. All of the revenue is because of them. All the people who work there are loyal to them. And if he wanted to sell his company, I feel like now it's, it's worth pennies on the dollar because all of the, it was an insurance loss company. So all the adjusters that are giving you work are giving him work, not the brand work. And so they're not giving him work anymore. All the people that are working there are not gonna be loyal to whoever comes in and buys it. And so it does create a problem for this couple that owns this company. If it's so hard to, to sell it because they're, they think their company's worth a million dollars and you know, you get a private equity firm who's really only willing to pay $200,000 or something like that. How do you guys solve that problem?

Joseph: Given what's fair while also then be able to move on. It's one that a lot of different factors go into it. The one thing that we do when we're kind of coming into these businesses is trying to get, we spent a lot of time on, on the front end, trying to educate and talk to folks about how they can position their business a little better. My father-in-law is a good example of a gentleman who his father, after the Korean war started, started a, it was like a logging business that didn't turn into excavating. And then he, with his six brothers took over the business and ran it. What's interesting about owners, small business owners is like, they think they'll live forever. Yeah. And they never think about retirement until like one day, like some health thing comes up or, you know, hunting just looks way too much appetizing to keep going to work enough. So they want to do that full time. And then they realized like the business wasn't ready to move on. You know, it was like, there was no things put into place for that. And so I think the answer to the crux of your question is there's really like a couple of things. One is if we, what we try to do at American operators just have, I spent a lot of time running around this country, just talking to owners, doing like town halls with them to do nothing else, but just to get them to think about retirement. Like, look, I know it's probably a boogeyman word and you don't want to talk about it. I get that. And you probably will live forever. But if there's ever an opportunity to just think about it, you know, even if your kids aren't taking over, right. Maybe one became a lawyer and the other one became a doctor. Nobody wants to run the excavating company anymore. That's fine. But there are some really great young Americans who do want to take it over. So what you can do is like, how about we get the business ready for that? Right. Whatever that might be. Right. Maybe it's let's get an office manager or like, let's get a bookkeeper. You know, like I know everything's been done back to the napkin. Like, let's start thinking about that.

Evan: That is a big one. I mean, are your books in line? I mean, there's a lot of just small business things that have to be adjusted once you really get in there. Yeah.

Joseph: There's a lot of pickup trucks and wives, cars and weird things that are on small business things that would drive somebody nuts if they've never seen it, you know. So there's that. And then the other piece of it is really like thinking about how they think about positioning, they being the business owners, how they think about positioning what their business does. I think a lot of them, if you think about it, they can talk about what they do every day. But a lot of it is, can you as an owner look at your business and describe what it does? And that seems like very elementary. And a lot of them have a hard time doing it, because they think about what they do every day to keep the business going. But when you go, what does your business do? And how does it serve others? That starts getting the wheels turning about how they can do. So at American Operator, we kind of ask all these questions. And the most important thing I think we do is say no. And not no, because we don't want to. I mean, there's a ton of these businesses. There's a business the other day that is, gosh, such a cool business. It's a silencer building company. It's like small manufacturing. Wow. And I'm not saying that we're going to say no, no to it. Yeah. But it's one of those things that's highly technical. And for somebody to come into it and just take over is not like an easy feat. The thing is, it's a very profitable business. But when you think about how we get the next person to come in, it's so founder-driven. They're like, is it going to be something we can do or not? Don't know. So we say no a lot. But here's some things maybe you ought to consider. You never want to put these Americans in bad hands. We want to set them up for whatever they deserve, which I think all these businesses do deserve some kind of passing the torch into somebody.

Evan: I had a guy named Michael Lane in that seat last week. Michael is the head of asset management at SEI, a massive firm. He's been at BlackRock. He's been at Dimensional, just huge firms. And he said the hardest job to do is to take over as CEO after a founder built a company. And I think it's so funny because he's worked in these massive corporations and institutions, and you guys are working in the private small business. Yet it kind of seems like that same theme arrives. Tell me a story. How many companies have y'all done?

Joseph: I mean, we've gone, let's see here. We're north of 100 now, businesses that we've helped transition hands from one to the other. And it's continuing to grow. And that evolution has changed. In the early days, it was just helping one connect one owner to the next. Nowadays, it's much more involved in that. We are in the driver's seat with these new owners and with the old owners, and we stay friends with them. But that's continuing to grow and grow and grow for us. Give me a success story example. Let's see here. I'll talk about one that we've had recently. It's success and it's recent. We had this business that we partnered with these owners and these new owner here in Wyoming. It's a painting company. And what was really interesting, a husband and wife team started this business. He's a painter. Wife's really great with the ops and the books and everything else. So just like a really great homey business. And over the years, they grew it into quite the heavy hitting business. A lot of it is because they went from residential to commercial jobs that are just a lot bigger ticket items. And the success behind that was, there's economic success there, but I think the big success behind it was actually who we found to run that business. Just like textbook. If we could do it every time, Evan, we'd have it turn out this way. We had a gentleman who was Air Force combat controller, so a veteran, got out, started his own little painting company in Arizona, fairly successful with it. And honestly, if he wanted to keep it as a lifestyle business, I think he would have been fine. But he wanted to do more. Just didn't have the tools or the understanding or the capital to go make it happen. And so we just really just through our great team who finds great operators and also through this husband and wife team looking to retire, we're able to bring those two worlds together. The best part about all of it is not only that it was a fit technically, but the best part about it is, is that like there is a, what's tough about our business is that like we need the owner to sign off on the new owner. And a lot of times that's not easy.

Evan: Oh yeah. I mean separating the body from the soul.

Joseph: Right. Cause it's like, they don't, even if you give them the right price, they still got to go like, well, who, who's Evan?

Evan: Yeah. Like who, who am I giving my child?

Joseph: That's right. Cause this guy's going to be driving around town, potentially ruining my reputation. Right.

Evan: Totally.

Joseph: Cause you're going to keep the company name, going to keep the company trucks and logo. Who is this guy?

Evan: Everybody thinks of me whenever they see that, that logo, right?

Joseph: That's like, who is he? No, that's it. And you could not have asked for like, this is locked in. Not only did he serve our country and did some great things, but this guy definitely a different personality, but one that really respects and understands it so much so that he's still really great. And they're not there all the time anymore, the old owners, but he's still really great friends. So the success was the lock. The other success about all of it was recognizing how important this was to the, that the community kept this business. We're driving around this part of town in Wyoming where this business is. And you start pointing at, like at first it was the commercial jobs and the residential homes, but then you start pointing at these like really important landmarks, museums, old historic hotels. And this company had done all of them. It was the only place that would like these places trusted that family to get it right. And so what would end up happening if we ended up just that those owners just shut it down, the gentleman actually said that he had gotten an offer from some guy out of Florida who wanted to run it remotely, you know, if he could. And I said, well, why didn't you take his offer? He goes, I don't even know how you could run a business like that remotely. And I said, what would you do if you never found, we didn't find each other, what would you do? And he said, we probably just shut it off. That's actually more sad than Wall Street scooping it up. That is so sad. As these staples just shutting down. One, the owner didn't get anything else out of it. And two, that now community is void of that business. And so the real success story here is that you get like this real staple in the community that continues on and get these historic hotels and you get these museums that get to rely on the absolute pros to come in and do it. And you get these people who are employed by that town. I mean, it's a small town, so it's not like jobs galore, but you get this business that keeps these folks employed, not only put food on their tables, but also helps customers kind of achieve what they do. So this is like one of many, many stories that we get to have and that we get to participate in because we get very, very, very in the soul of what's going on with these businesses.

Evan: Yeah. I mean, I can imagine just the job loss, the economic hurt to a small town, right? Shiner, Texas, where we're at right now is 2000 people. You have the Shiner Brewery and you have Kaspar companies. And if Casper companies or the brewery, you know, closed down shop, then you would have hundreds of people, not only in Shiner, but in all of the small towns surrounding us. That would be without a job. I mean, what a an economic hurt to that that town too. I mean, you drive through towns now and it's it's ghost towns a lot of times and everybody has had to move to the city and you drive into a city and you're 30 minutes outside and it's construction galore.

Joseph: Yeah.

Evan: So you give people the opportunity to stay in their small towns and have those towns thrive.

Joseph: Does that appeal to you? I know I know you're interviewing me, but I'm just curious, like, does that. I'm always fascinated with what people think about that life of like being in a town, running a business with your name on it, having that sense of agency, does that sound appealing to you?

Evan: I think I think, you know, when you look at Gen Z, when you look at myself and my generation, my friends, the people that that I spend my time around, you know, I recently got married. And so the question. Thank you. So the question always is, well, where are we going to live? How are we going to raise our kids? What kind of friends are we going to have? And there's always this, you know, kind of fork in the road between, you know, maybe I want to be on land. Maybe I want to be in a small town. Maybe I want to homeschool. Maybe I want a private school. But I want these options to raise my family the way I want to. And a lot of times I think for especially, I mean, I grew up in Texas, so I have biases there. But a lot of times, small towns are at least away from a city is the most ideal spot for that. But then you kind of have to have that fight against the reality that I cannot make as much money out there. Likelihood, right? There's just less opportunity, opportunities, there's less companies paying this much, all this kind of stuff. And so I want to do it, but it's so hard. And so I think that that's where that appeals to me. You know, I lived in China for a year when I was 22 and 23 years old. I'm a, you know, I was unmarried living in a 2000 person town. I'm from the suburbs. I went to school in Austin. It was completely foreign to me. But I think that when I was here, you see a world that you don't normally see in a city. And that is, you know, unlock your doors and let us come in. And everybody knows everybody, right? Everybody calls you friend. And so I think that that is very appealing to Gen Z, because the soul has been sucked out of corporate life in a lot of ways. And you see, it's like, it's like the joke, the Harvard MBA guys, when he finds the HVAC company that doesn't know that Claude exists or AI exists. And he's like, you know, celebrating. So I think giving that back to people and at least giving people the option if someone's gonna live in a city and you want to live in New York, you want to live in Austin and Dallas, you want to live, you know, in a big city and work corporate. That's an amazing job. I'm so for that. But what I'm not for is people not having the opportunity to do the other and to work in a small town. So or just to work in a small business.

Joseph: So yeah, it's well said. Yeah. Thanks for sharing that. It gives me continued hope. I do find that as I talk to more and more owners, but also more and more aspiring owners, it is like, they don't even know where the feeling comes from. It's just like deeply seated that they want a lot of them do. And like you said, some of them don't, but a lot of them want that connection back to what they do. They want this small team. They work around every day. They want to be able to provide for their communities. And I think they want to be able to have that like, I don't know, it's a. Maybe it's primal, just like having your name on a thing, just a pride, it's a pride, right? Like you get to just stamp it on there and you go, I built that. I did that. You know, my reputation's on the line instead of I'm employee 4072 and I did a spreadsheet. Maybe the board used it. I don't know. You know.

Evan: Yeah. What what are the biggest challenges? I mean, is the hardest part finding an operator to actually go run it that, you know, a old couple knows and trusts?

Joseph: It's both it's it's that and it's also finding a great business that we can make this because what we're trying to do is make both lives better. Yeah. And so what you don't want to do is ruin one life on the count of the other. And so I'll start with the first one. You said that one is always interesting. One is finding the humans who actually know what they're signing up for to get into this owner seat. Some of them need the technical skill like you're probably not going to be a great owner of a plumbing company if you aren't a plumber yourself, right? Having a master license or whatever those things are are critical. But even if it doesn't have specific licensing, you still need to be somebody who just operates that way in a world where we've been trained to kind of like text somebody or shoot him a slack or something like that to go get something done. It's not how these businesses operate. These businesses operate with like this owner showing up every day to the truck line and smelling booze on somebody's breath and going, you need to go home. Right. That's just a different style of leadership and a different style of ownership. The other side of it also is these owners oftentimes who have great businesses for sale don't advertise it. So the tricky part for us is anything that's currently advertised right now, everybody is looking at them. And so which makes it good and bad. Good because you get a lot of folks helping you kind of evaluate these things. Bad because it's often it's kind of like I'm a I really enjoy old trucks and cars. And so often the best vehicle that I've ever found or the best classic or the thing my dad and I would used to restore was often in somebody's garage that he knew as a friend of a friend, you know, and that's how these businesses are. So the trickiest part is finding these business owners to want to talk about it and want to be open to having a conversation about selling. So those two things together are independently kind of difficult. But luckily, we have a great team that, you know, based here in Texas that does a lot of this stuff. And every time it gets better and better because every business we end up bringing into the family, they become referrals for us. Those owners go really like these guys, you know, and once they do that, then they kind of tell their next friend, next friend. My goal is at some point to get enough of them where we create what we also will tell owners is that we want to we don't want you to be gone. You know, we just want you to just kind of move into the next level. And whether that's continuing to stay on as an advisor or just being in our like owner alum group, I got to find a better name for it. But it's like where I get to invite y'all, you know, let's say we got a cohort of like 20 of them this year. Well, I'd like to go invite y'all to dove hunt in Texas, you know, and just tell you how the businesses are going, what your legacy is up to share a little bit of knowledge of what's going on. Like our goal with American operators like this thing is like a business of businesses, right? It ends up becoming something familial. And so but that's the hard part is finding both those pieces. We're just kind of picky about both sides.

Evan: You asked me what my opinion was on on this on the small town on the small business. What is what do you see from from young people? Are they desiring that? Or are they just, you know, go in corporate life? Do you still see that? That primal desire?

Joseph: I do. I do. It's hopeful, man. It's even cooler than my generation. Like, there's a lot of guys and gals in my generation, I think are open to it. But I think unfortunately, they got a lot of golden handcuffs. You know, they're just kind of stuck. You know, they've been long in the tooth enough to go like, I can't leave this thing. You know, I got too much of a house right now, whatever. The really hopeful thing about y'all's generation that I'm very pumped about is that not only y'all are and I'm not trying to, what do you call it, get your head too big. But some of the I mean, I have a lot of hope. I mean, it reminds me of my time in the service. You know, like anytime I remember at that time, people were like, I mean, all these young people. And I'm like, I have a group of young folks that are like, patriots of patriots, just like the most hope you can imagine, like the country's in good hands. Same thing right now. They want it. They just also have this like, I think they haven't been spoiled yet, meaning they haven't gone long enough where they bought a, you know, an F 350 King Ranch that they can't barely afford. And they can't, you know, they have a big house here in the burbs of Dallas where like, everything's are getting so expensive, their lifestyle creep came in, or now they have to stay at this really well paying corporate job. A lot of your generation still kind of early enough.

Evan: I ain't got nothing to lose, man.

Joseph: Exactly. Got nothing to lose. And so they're like, yeah, you know what? That sounds okay to me. Small town, modest vehicle, good little house.

Evan: Yeah.

Joseph: You know, and I get to go build it. Yeah. And build something that quite frankly, Evan is going to be much more if we're talking about numbers and cents, you're what you would have built for your family fast for 25 years is going to be bigger than you could probably ever, ever done at any corporate settings, especially when you have equity like that. I mean, start now.

Evan: Yeah.

Joseph: You know? So yeah. So to answer your question, it's not only hopeful, but it's exciting for me to see this like energetic generation coming through.

Evan: Are you a taken American operator folk to Alaska and having them camp the wilderness for a month or is that not something y'all do?

Joseph: Yeah. We actually did some stuff here in Texas already. So we kicked off the year and brought the whole team out to, out in the hill country and did something very similar. Cool. We actually had the, the entire team, we did this long hike through the hill country, team did great. And then at the end of it, I kind of gave him this, like, look, you don't have to do this, but a lot of folks are going to. So we had these ropes set up and had everybody repair repel off these cliff sides. And so we got the whole team bonding. They did great, man. It's a sporty team. And so they're really excited to go do it. But yeah, so I still get to have some of that, some of that some of that old energy in there.

Evan: I love it. I love it. Well, I got you a present. You were able to come take a tour of our, our depository. And so I wanted to get you this Y'all Street coin. It's, it's one ounce silver. You might, you might have to. Wow, man. This is incredible. Yeah. It's, it's what a cool thing, man.

Joseph: And also like, can I pop this sucker out?

Evan: Yeah.

Joseph: Pop it out the back. Yeah. There you go. Yeah. In the state of Texas on there, man. It's pretty sweet. I will tell you y'all have such a, what impressed me about it, if I may, is not, you have like a whole external facing part of it where people can show up to, but I think that's sign of a pro again, going back to my military days. If you go back to the truck shop, the gun room or the locker room for the team, and it's pristine behind the scenes, even when it doesn't need to be, yeah. You know, it's a bunch of pros running it. So I appreciate the tour today is awesome, man. Thanks for this.

Evan: Yeah. We appreciate you coming down. If someone is, you know, young, old, whatever, and they're, they say, you know, being an operator, that sounds pretty cool. If someone, you know, might want to get their business at least ready for retirement. How do they find you guys? You also have an amazing podcast where you have some amazing, amazing small business owners who come in and talks like pink's window guys. That was awesome. They have some pink says some great branding and P Terry's it's the place to be. How do they find you? Where, where can they go?

Joseph: Americanoperator.com kind of has like a whole rundown for people who are current owners want to sell or retire or new owners coming through. And then thanks for the shout out, Evan. And then American operator, we had a podcast and a kind of a short we do short films. So if you go onto YouTube, you can see this mug every single week, I mean, outside of y'all street, if you want to, but it's a way for I only share that part with the American operator pod, just because like, it can kind of get folks thinking about it. We recognize it's take some time, whether you're an owner or a new owner, take some time to kind of really think about this. And so we try to hopefully have raw, candid conversations on those things about the human story behind all this. And then if it ends up being something that piques your interest, you know, there's plenty of things. And we're usually running around the United States, different events and stuff like that as well. You can find us.

Evan: It's one of the great things actually about a podcast and just podcasts in general, though, is that you can go listen to, you know, 15 episodes that you've done and hear 15 different small business owners talk about their small business. And I think more than any time previously, you can at least have a decent understanding of what it takes. And I'm sure once you get in, the experience is gonna teach you 10 times more than the podcast ever could. But it still is, you know, it puts you a little bit of a step up compared to what people would have done 40 years ago when they wouldn't have been able to hear any of that advice.

Joseph: So it's war stories galore. I mean, if you want pure entertainment, it is. I mean, these small businesses are you could all make a movie out of every single person's business because of how crazy it is. So you nailed it. It is really great way to kind of get really in tune with what's going on. So, yeah, Americanoperator.com and come check us out.

Evan: Awesome. Well, thank you for your service and thank you for protecting the T-Ball sponsors. We appreciate it.

Joseph: We'll keep them on the baseball field. Thanks for your time, Evan.

Evan: Of course.

outro: How do y'all drink this? That's a Y'all Street.