How did you get started in this particular approach?
So this approach actually comes from my days, you know, in grad school, I was working at a bar.
I was actually, I know I don't look it today, but I was a bouncer. I was a big guy.
Now I'm a coder. It went the other direction. But I actually worked as a bouncer at a bar,
worked my way up to a general manager there, helped them kind of build from the ground up.
And what they did was they opened up several locations, but it wasn't one umbrella company.
Each location had its own LLC. It had its own owners, its own stakeholders. They were able
to bring in outside investors, but they shared a similar goal and they shared similar ownership
across the group. And they created this thing called Consortium Holdings down in San Diego,
which I thought was a brilliant model to still create the autonomy, innovation, creativity of
the individual companies. So you didn't have this sort of corporate top-down limitation of a little
pup back there. Apologies for that. Unfortunately, there's not going to be a lot of editing they can
do about that. Somebody heard about restaurants and they were thinking it was dinner time. Yes.
So sorry to break your flow. Go ahead. No, you're good. So they started this restaurant group down
in San Diego and it was really cool. I noticed how folks who may, if you're familiar with a
restaurant and industry workers, they tend to only have part-time shifts and they can't really live
off of one restaurant or one job alone. So they work multiple places. The cool thing about this
was they were able to have multiple locations that they could go work at, all with similar systems,
with similar culture. A lot of their friends worked together, but they were technically
different businesses. So it was really cool. And I saw how successful that was and their ability
to scale up to 10 restaurants within three or four years. And now the ownership structure was
different in each one. There was different vested interests in that what was cool was some owners
maybe didn't love that model. Hey, we don't want to have the Uber hipster gastro pub or
more traditional seafood place. Well, they didn't have to be sort of roped into one.
And so I took that same approach coming into what we call Fractal Group. We've started out with a
simple software development agency called FYC Labs. That's kind of our core business. And they
provide the services and development services across the building product, digital product
businesses and SaaS companies like our other, our accounting, accounts receivable platform called
Accru, our Dealflow platform for investors called DealSend and our cybersecurity platform called
Attack Vector. So it's cool that all of our engineers, they get to bounce from job to job,
but they're all still in the family. So I guess one of my other questions is where are you going
with this vision? So I'm not naive in thinking that this is all just for authentic, great, happy,
good culture for my friends and my coworkers. There's obviously business outcomes. So we
actively are growing our businesses with the intent to be acquired, to either get the IP acquired,
to get our customer base acquired. So our goal is to grow businesses to about a certain size.
What that specific size is yet, we're not sure, but we have acquisitions,
opportunities that come in pretty often because of the attractiveness of what we're doing.
Some of them are too early stage. Some of them are too, the offers aren't quite where we want
them to be. FYC was actually partially acquired. I had an acquisition opportunity. I ended up
partnering with the buyer because I just had so much fun working with them. So that we didn't do
a full exit on that one, but a couple of my partners did get out. So we've gone through that
acquisition process and we do get that there's outcomes that are needed for our stakeholders.
That's why it's really important that when I know about what fractals and visions are, is to create
the authentic, positive culture and outcomes for our employees, as well as our stakeholders and
investors. So I do have that mindset of like, this isn't just for fun. This isn't just a kumbaya
session. This actually has to have business outcomes for people who are staking their careers and
their lives on it. So that is the vision is to build up more startups within the group,
to build more product businesses, to continue to grow our services businesses so they become
attractive for acquisition and eventually sell off different parts of our group,
make some additional capital, reinvest into the next big idea, reinvest the next big idea.
We typically want to get out at about a 10 to $25 million valuation range. So we don't have,
we're not moonshotting. We're not unicorning. We're trying to create solid, effective,
profitable businesses that are attractive for someone else who has the marketing chops.
I know where my weaknesses are. I don't know how to take a product to market at a mass level.
I know how to take it to market at an early adopter level, but there's people who know how
to do that better and they just need a product that's already baked in and has an initial
kind of evangelist following. So that's our goal is to continue to build up those types of
businesses and then find the right buyers who can take them to the next level. And hopefully our
employees get to go with that. We've seen that occur for a couple of cases where employees are
actually bought out, their contracts are bought out from us and they go and work upstream during
an acquisition and they're successful. They miss FYC because they miss our group because it's such
a fun place to work and they kind of get pulled into those other cultures here and there, but
they have successful outcomes. I love watching people get their first home, get married,
have their first kids, like watch these people grow and build careers for themselves
because of what we're doing. And that's really valuable and really like, that's where our vision
will be for the employees, but I have to make those outcomes for my stakeholders as well. So yeah.
And it's interesting because as much as we'd love to pretend that change goes on a line like this,
it's more like this. What would you say was your most significant learning experience along the way?
It comes in phases. So the first learning experience was the moment when we ran out of money
and I couldn't pay my employees because clients hadn't paid us on time. And I learned that people
don't have the integrity that I assume they had. So clients will ask for the work, you know,
we'll do the work, we'll deliver and then wait, wait, wait, where's the check? Oh, we'll get it
to you next week. We'll get to you next week. And I sat outside of Comerica Bank, it's like
four o'clock in the afternoon, it was windy downtown San Diego and I cried. That was the first
time I cried as a business owner over it because I'm like, I can't pay my employees. I just went
to the bank, I asked them for an advance on our credit line. They said that we hadn't had a long
enough history with them and we couldn't pull it, we couldn't convert our credit card into a credit
line. And we needed like two more months. And I just went, I'm not going to be able to pay these
people. This is the worst feeling I've ever had is that I can't pay my employees and I got to go
back there and face the music. The irony was that after all that, the checks went cleared and I was,
I was, or the checks went out. And then the next Monday I'm ready to talk to everybody like,
Hey guys, I'm really sorry. You know, we're going to have to, this was back in the office days,
right? Nobody was actually was in and I'm like, Hey guys, like, what are you talking about? Checks
cleared just fine. I'm like, wait, what they did? Oh, it turned out you had overdraft protection on
your credit card. So I had to eat like a 25% interest on it, but my checks cleared and my
people were paid and I lived a fine another day. But that moment of how vulnerable you being able
to pay your people is and how many things you have to put in line. And then now as having been an
employee for a part of my life, not realizing how important that, that cashflow recognition was.
Holy cow. That changed me for a long time. It changed me for knowing what I meant to take care
of my people and how much it actually affected me was like, Holy crap, this is, this is a big deal.
The second time has been when the company was acquired and sort of what it meant to be in that
in those shoes and to walk through that process and saying, okay, I'm going through an acquisition.
So I've done something that someone wants to buy. This is something that I felt successful,
but then recognizing how the nuances of all that work and the earn out process and like that this
isn't as, you know, no one comes in there and gives you a high fives, hands you a million bucks and
says, good job kid. Take it, take the next six months off. No, you're not there. It's not over.
It's not that simple. So that was a really interesting learning process. I learned how much
I, you know, like I said, I ended up partnering with the acquiring party. And he's one of my best
friends now. It worked out amazing, but it was just such an interesting learning experience of,
Oh, it's there. No one's going to give you the trophy at the end of the line. No, this isn't
going to be an exit. That's that was what you think it is. You're going to be working to get that exit.
And it's not going to be as simple as you thought. It's not like winning the lottery.
Thank you for being here today. I'm really happy that you tuned in to vision pros live.
I'm looking forward to seeing your reactions as these episodes continue to move forward.
This is going to get more and more fun. We'll have more and more engagement as well. We'll
invite people to participate in the show and thank you for giving us your time and attention.
Have an excellent time building out your vision and becoming a vision pro yourself.