Private Equity Spotlight: Grit, Growth, and Game-Changing Deals with Micah Dawson

[00:00:00] Sean Mooney: Welcome to the Karma School of Business, a podcast about the private equity industry, business best practices, and real time trends. I'm Sean Mooney, BluWave's founder and CEO. In this episode, we have an amazing conversation with Micah Dawson, principal with Trivest Partners. Enjoy.

[00:00:34] It's great to be here with Micah Dawson. Micah, great to be with you today. Yeah. You too. Likewise, Sean. Mike and I have known each other for quite a while at this point, there's all sorts of things that I'm excited to talk with Micah here. And so I've been looking forward to this conversation for a long time.

[00:00:51] Micah Dawson: Well, I was wondering when you were going to invite me on.

[00:00:53] Sean Mooney: It was only a matter of time. And so here we are. So let's jump into it. One of the ways I love to start these conversations with each other is to get a little bit more of your backstory. So Micah, can you share a little bit, kind of like how you came up, how you ultimately got into private equity where you grew up.

[00:01:12] Are you staying in college? All that kind of fun stuff.

[00:01:14] Micah Dawson: Yeah, sure. Happy to share. I was actually born down here in Miami where Trivest's headquartered, which Miami is not a place a lot of people are from. I'm one of those unique people that is from here, but moved when I was young up to a small town in North Carolina called Lenore, North Carolina.

[00:01:31] Some people know it is the headquarters of Bernhardt and Broil furniture, but about 16, 000 people. My dad's actually a Presbyterian minister. So the joke is that The preacher's kids are the worst ones, so I'll neither confirm nor deny my childhood activities. You got saved every Sunday, though, and you got to reset.

[00:01:51] Exactly. So small town preacher's kid, and then actually returned to Miami to attend the University of Miami for college, which was an interesting transition. Born and raised Miami Hurricanes fan, and so my first year of school, we won the national title, which was a pretty fun experience. Wow. Which team was that?

[00:02:13] That was the 0 1, I think like the record for the most number one draft picks at some point, but it was a lot of fun. And one of my claims to fame is Vince Wilfork actually mistook me for Ken Dorsey in the dining hall when I was there, kind of made my day. Yeah, that is a good day.

[00:02:36] Sean Mooney: What a great experience.

[00:02:37] I never got to experience that kind of thrill of sport in any of the schools I went to. So for all those have, I am jealous, but like an iconic, a excellent academic school. But if you can couple that with, they know how to put some W's on the board too. That's pretty nice.

[00:02:53] Micah Dawson: Yeah. It's been all downhill since then, but it was a good start.

[00:02:57] And then after college, kind of what was your progression? I always joke, I'd pretty standard route into private equity. I actually studied architecture undergrad and then moved to New York on a pretty cold January day to work for an architecture firm up there, which was. I think a really cool experience.

[00:03:15] I did it for about three years. We worked on some interesting stuff, some stuff that's been published, but realized after some time in the industry that it's kind of hard to make a living as an architect. Especially doing what I wanted to do. And so I said to myself, okay, what are my alternatives? I was looking around New York and I had some friends in finance and people were doing some pretty interesting things.

[00:03:40] And. I very naively thought that, hey, if I go to law school, maybe I can then parlay that into a job at a hedge fund. There were some people doing that at the time because it was the sort of the height of the pre crash craziness. So I applied to law school, I got in, spent about a year at law school and said, I'm just not cut out to be a lawyer.

[00:04:03] It's not something I'm passionate about. So then applied to our business school. I was at the university of Virginia and that's where I really said, you know what, some of this small, medium sized business stuff is pretty interesting. So you went from business school, did you go direct into private equity after that?

[00:04:20] I spent an ill fated summer in banking and then just fortunately, there was an alumni coming out to interview at our school. He had been the CEO of a large family mining company and they were looking to diversify their holdings. And he said, you want to come work with me and see if we can buy some other industrial companies.

[00:04:43] And I thought that sounded like a pretty cool gig and was probably one of the few folks in my class that was willing to move out to St. Louis, which is a great town. That's where I ended up. Do they own mines themselves? It was limestone mine. So it was, it's actually kind of an interesting, it's like these like hundred foot high caverns and these like huge trucks driving around.

[00:05:05] And then they would process that into all sorts of chemical products.

[00:05:09] Sean Mooney: Were they underground or were they kind of like surface mines? It was underground mining. Oh, I've always wanted to go into a mine. Never done it. So you went all the way down in there all the

[00:05:19] Micah Dawson: way down. I mean, it's, you're only about a hundred feet under the ground, like the surface layer.

[00:05:24] It's a wild experience because it's just completely dark, except for the lights. And like I said, you have these massive mining trucks just flying around down there.

[00:05:33] Sean Mooney: My inner child is so jealous,

[00:05:36] Micah Dawson: big

[00:05:36] Sean Mooney: trucks

[00:05:37] Micah Dawson: and underground

[00:05:38] Sean Mooney: and caves. And that, that must've been

[00:05:40] Micah Dawson: so cool. I think my mom for a while thought I actually worked in the mine rather than for the company, which was always an interesting conversation when I was home.

[00:05:49] Sean Mooney: We were doing part of it was like, we're going to go and we're going to buy complimentary companies with this. And so you're doing kind of some of the MNA and integration activities in this role.

[00:05:59] Micah Dawson: A couple of things. So we were doing some internal consulting and then also MNA integration. And so it wasn't exactly.

[00:06:05] And adjacency strategy, it was more, Hey, we know industrial companies. We know manufacturing let's take those skills. And we were pretty agnostic within that sort of industrial vertical. And ended up buying, I found a deal through a business school classmate who was at a bank in Charlotte, who I'm still in touch with, and it was an automotive supplier, so we helped lead that deal, and then they said, hey, we want you to get some grit, you need to go be the quality manager at this manufacturing plant in rural Indiana, and so that's what I was, I wore the uniform with my name on it, I was there first shift, making sure the lines were running on time, and yeah, That's how I cut my teeth in the operations world.

[00:06:49] Sean Mooney: What a great experience though. You've seen all these different kind of walks from architecture, which is another one of those things where as a kid, I love to draw But then I figured out I was not really good at it. I thought it was pretty good, but everyone else told me I wasn't. And so and then you kind of made your way through law school and business school, and it's like this serendipitous journey.

[00:07:11] And then you found this great kind of family business that's acquisitive. How did you ultimately end up at Travis?

[00:07:17] Micah Dawson: I spent probably four years at the family business doing operations and then sales and then general management. I was really had my heart set on running a company. And I think the timeline in my mind for doing that versus what our corporate parent thought were just not directly aligned.

[00:07:37] And so I was looking around to maybe try to get to private equity proper. I think there's something about just having a fund to deploy that creates some urgency and a pace of play that I wasn't experiencing at the other place. And so it's sort of how these things happen, right? Which is. I had a network here down in South Florida.

[00:07:58] I think it's a burgeoning industry down in this region. And my college roommate from UM actually did M and a work on the legal side for Trivest introduced me to the general counsel and just fortuitously, they were looking to build out an ops program. And I think really liked the combination of having done some deal work and having operated in a family founder type company.

[00:08:22] And so it ended up being a match. And so I started. What we call our portfolio support group, which is, was really back then, just a portfolio support group of one, we're now 11 or 12 of us and growing. So it's been a really fun journey and try this

[00:08:38] Sean Mooney: since we've known each other when you were getting involved.

[00:08:41] I think probably the very beginning you all have been a rocket ship. It's just really one of the more kind of amazing success stories and private equity that we've had the privilege of seeing. What I've taken away from the first part of our conversation here is there's a couple of things that really kind of jump out.

[00:08:57] It's one being open to the universe where like, if you listen, it'll kind of take you where to go. And so you've had all these kind of amazing experiences and what I've liked about it is you've kind of followed your instinct. And it's gotten you to this great place, right? And it used to be that private equity was a this kind of linear path where you had to get in.

[00:09:17] Like if you didn't start when you were 22 is tough today. Now there's all these on roads to the industry. The other thing that I really appreciate that you've kind of shared that has been a theme in these conversation we've had is like the power of your network. Like if you've invested in knowing people and not in a transactional way, but having a good group of folks, you can find your way into these kinds of opportunities.

[00:09:41] And it seems like time and time again, that kind of has brought you to places as you've been on your path.

[00:09:46] Micah Dawson: Yeah, I think both of those are really true. It's funny as we were doing some team building and strategic planning with my team last year, portfolio support. One of the themes we noticed was that like none of us have any business being in private equity.

[00:10:02] We just don't fit the mold. We had to hustle our way in. I think there's some real value there. A lot of us had operated scrappy sort of the characteristics I look for. And there's also a low ego portion of that, which is I'm pretty happy to be here. It feels like. I ended up at sort of the best possible place I could given where I started.

[00:10:27] And so I think you're right about just sort of these different paths and also the network. I mean, if you look at the different points of departure in my career, a lot of it had to do with someone I knew that I'd followed up with, that I built a relationship with. And so. That's one of the things I think about and probably don't do as well as I should is, how do I help others?

[00:10:49] How do I encourage my team and provide the same level of support that other people have given to me?

[00:10:55] Sean Mooney: Our listeners can understand why we wanted to have Micah on this conversation because we've already gotten into the parts that we usually don't even talk about towards the end of our conversation, but I've gotten a lot out of Just these lessons learned that I was like, I wish I knew that.

[00:11:11] Hi, this is Sean. Wanted to take a quick moment to tell you a little bit why BluWave exists. It's based on this whole notion that assessing opportunities and building business is really hard. We all know third party expert service providers can dramatically help. But at the same time, it's hard to know who's good.

[00:11:29] Usually leaving you like I would do and call friends and ask, Do you know someone who does this? Or just go the square peg round hole route. So, after nearly 20 years in PE, I decided to solve my own problem and created BluWave. Today, many hundreds of PE firms, thousands of portcos, leading public companies, private companies all call BluWave to instantly get connected with the exact third party service provider they want that's pre credentialed by BluWave and perfectly calibrated for their need and really good.

[00:12:00] You too can give us a call or visit our website at BluWave. net. We're free to use and you can benefit the same way other top PE firms do.

[00:12:11] Maybe one other thing to kind of double tap on just kind of understanding your story. It's one of these questions I love to ask is what's one other thing that we'd know you better if we knew this about you that might not be on the LinkedIn profile.

[00:12:25] Micah Dawson: So maybe I'll circle back to college. I told you I was born and raised a Canes fan.

[00:12:31] And always dreamed of playing quarterback for the university of Miami. The problem is when you're like six foot five and only weigh 180 pounds, your division one football opportunities are limited. And plus, I mean sort of fun fact, I went to high school, I graduated with nine people. And so we did not have a football team.

[00:12:50] And my other joke is I was the salutatorian and I didn't graduate in the top 10 percent of my class.

[00:12:57] Sean Mooney: I went to a small class. I think we had like 40 in my class and my senior, but nine. That is amazing.

[00:13:03] Micah Dawson: It was small. So I get to Miami and I said, you know what? I don't really care. I'm going to give this a shot.

[00:13:08] My roommate ended up walking on as a tight end. And so I just followed him to walk on tryouts, had a pair of soccer cleats on because that was my sport growing up. And I actually made it to the final cuts just by following directions. Not because I was some great athlete or they liked me. It was just everyone else didn't listen.

[00:13:28] And so they're like, okay, you're gone. You're gone. You're gone. I stuck around and they cut one more group and then whoever else made it as a walk on. And then later, once that dream was thoroughly dead, I tried out to be the mascot, which I actually did incredibly well at the tryout just by, I don't know, dancing around and acting goofy.

[00:13:49] And they pulled me aside and they said, listen, you killed that, but you are too tall to be dressed in a bird costume and running around and scaring children. And so I was slightly discriminated against because of my height, but it was probably the right call on their part. As they walk on candidate, did you ever have to take a hit from a D one player?

[00:14:12] The only time that happened, we used to play a no pads fraternity tackle football game and we'd play it against FIU and they had a couple of D1 folks and I remember catching a pass and just getting drilled in the chest and it was maybe the worst I've ever felt in my life. I barely got up for that and I don't even think it was a hard tackle, so I'm not sure I would have been cut out for being on the team.

[00:14:36] Sean Mooney: I hear you. And so here's a quick aside, and I'll keep this brief for our listeners. I went to a small high school in Austin, Texas, and everyone almost had to play football for our football team. And we were not very good. Our coach was a all American tight end from the University of Texas. And I was a runt, but my dad was 6'4 so he said, you're going to grow, kid, you're going to be a tight end.

[00:15:00] And the only good player we had was this all state linebacker. And it just so happened that our coach's favorite play, Was a play called the tight end dump where they would throw the ball to the tight end, right in front of the linebacker. And so every play during I was in scout team offense against the A team defense.

[00:15:18] And the quarterback would throw me this ball right in front of this like crazy, awesome, like Allstate tight end, our only good player, and he would just pick me up and pile drive my face into the ground. So I was like, I was like, I'm not made for

[00:15:30] Micah Dawson: football. So it was one season. It was the same play. We called it the tight end pop pass, but let's just run a little curl and then get the living daylights knocked out of you.

[00:15:41] Sean Mooney: You know, I'm not made for this and I'm not going to be my dad's height. So I love that. So maybe as we transition into the next kind of phase of our conversation here, Micah, one of the things I'd love to kind of hear from you is, I think one of the things that's common in private equity, you touched on this a little bit of this, like this notion of like tenacity and grit and overcoming challenge.

[00:16:05] Is there something that you've kind of gone through that you've. Had to overcome and maybe what are some of the lessons you learned from it?

[00:16:14] Micah Dawson: Yeah, and I'll probably mean this hopefully builds on what I was saying earlier just to zoom in on my time in graduate school I'd mentioned my sort of ill fated stint in banking I was going into my fourth year summer of my third year spent time in a lower middle market Sell side advisory shop for whatever reason things didn't work out.

[00:16:36] I didn't get put with the right group. Maybe I didn't work hard enough I didn't get an offer and so I returned to my last year student debt mounting no sort of prospects from a career standpoint, a recovering architect who had a law degree, not really qualified to do anything and so it was, I think, a pretty scary time for me to figure out like, Oh, what am I going to do with my life?

[00:17:02] Because I truly had no idea, but persevered and A door opened and then fast forward to that next inflection point. I was looking to jump into private equity and had an interview with a really good firm down this way, not try vest, but ultimately didn't get the job. And that was another one where I was like, man, only so many of these opportunities come up.

[00:17:27] I think even sort of five, six years ago, it was a little bit different. The operations groups weren't as developed as they are now. And so I was like, man, am I just kind of stuck here? Is this kind of it for my career, but one of the things I did that I think was really helpful is the division I'd just been placed in charge of.

[00:17:48] I was running a couple things, a manufacturing site and a distribution warehouse, and the manufacturing site was just an old legacy product in a dying portion of the industry, and I really just said, well, let me rededicate myself to see what I can do with this business. Because I had a few things on my resume where like I had an idea I made an impact here was the outcome but not as much as I think I really needed and so I just dug in and I said we were making I think negative 10 percent EBITDA and in about four months I turned it around to with the help of my team a positive 5%.

[00:18:27] And so it made it viable. It was a small town in indiana. We employed 25 people, but it was 25 people that still had jobs. And I think that's been a valuable line item on my resume and just for my personal development to really just say, you know what? I'm not going to worry about my own career. Let me focus on what's in front of me and see what sort of good I can do and what kind of impact I can have.

[00:18:50] I think it's been a really valuable life lesson for me.

[00:18:54] Sean Mooney: Once again, like another really good lesson for people are coming up, just like in private equity, when you're building a company and none of them are like just up into the right, it's always a twist and a turns. And I never played soccer as a kid, but now I appreciate it.

[00:19:06] Like sometimes you got to pass back to score the goal. And sometimes you got to go sideways when you're going to have challenges and you're going to get kind of like knocked off your shoes every once in a while, but you just got to get back up. It really is. I think a good lesson that if you look at kind of your career where you had obstacles in so often in life, the intuition is you just kind of stop.

[00:19:28] I think what the lessons that I'm taking from our conversation is now you find a way to go around it above it below it. There's an obstacle. You don't just stop and turn back. It's you're going to find your path and ultimately you get in the right place by just continuing to persevere and proceed. And sometimes that means you're going to go sideways and then continue going forward.

[00:19:49] And I certainly experienced that. I don't tell the story very often, but when I joined the PE firm before this, so the second PE firm I was with, I think I was going to get fired within the first three months because I was just like, it was just a different way of doing things. I'd been with another PE firm for eight years.

[00:20:07] I was expecting every day to get the white paper, but I just put my head down and figured it out and then eventually became a partner at the P firm. But it was the first six months, whoa, I was in shock. And so I think it's a great lesson that you're going to come across these tough times. And you can either stop or turn around or you can figure it out and whether it's turning around a company like you mentioned there or continuing to find the path to get to where you are now is a very successful operating executive at one of the best P firms in the world.

[00:20:41] It's a great story and a great lesson, I think, for anyone. Hi, Karma School of Business listeners, Sean here. Wanted to shine another spotlight on one of the most important ways PE firms assess opportunities. They are the most active users of a product called Commercial Due Diligence, also known as Market Studies.

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[00:21:22] As a result, top P firms call us pretty much every single day to get connected with the best of the best, right fit providers in the world. This product is not just for those who do M& A, one source of alpha and edge is to do a commercial due diligence, including a growth strategy assessment on your own company.

[00:21:41] And you'll be amazed how much your insights and go to market plan will improve. Give us a call or visit our website at BluWave. net and we can give you excellence and alpha with ease. Back to the show. So if we go on to kind of the next chapter here, I'm curious, as you think about TriVest itself. Yeah.

[00:22:03] You have a pretty multifaceted firm where you bring a lot of things to the table in addition to capital. You have a deal team and a biz dev team and you have your operating support group and you have portfolio company leadership teams that you're working with. How do you manage all of that interplay so that you're all kind of like pulling on the oars at the same time?

[00:22:23] Micah Dawson: I think to answer that it's helpful to look a little bit at our progression and how we've evolved. Because we didn't have an ops group till six years ago. I think BD started maybe eight or nine. I mean, we've always been focused on this family founder owned thing. And one of the things I talk about with our work co's is this idea, not my own, but of like the three uniques where your business relative to your competitors in the industry, there are going to be a lot of similarities.

[00:22:57] And so. You really want to think about things in terms of like three uniques and someone else may have two of them, but not the third one. And that's where you want to get is probably three differentiators where those three together are truly differentiated. And I think we started with, Hey, we're going to really focus on family founder owned businesses and make the deal process much easier for them.

[00:23:22] And then as we evolved, I think we were seeing founders really were interested in a variety of capital solutions, which is when we raised our non control fund and then sort of the next evolution from there was they're really thinking about, like, not just how much you pay me, but how are we going to be partners on a go forward basis?

[00:23:40] And what resources are you going to bring to the table? And so I think that's how we've built. I was mapping this out with my team. I break it down. Someone taught me a while ago to think of things in terms of like a sales funnel or sales strategy, just process steps. And if you look at like sourcing execution, really onboarding platform building optimization exit, our goal is just how do we plug in and create value for the deal team and for our management teams in each one of those phases?

[00:24:11] What are the non negotiables? And so at Trivest, our deal team, our investment team is really sort of a, they always say, don't say cradle to grave. But I can't think of like a better phrase. So if you have one, let, let me know, but they've got cradle to grave responsibility for our portcos. And then we're plugging in sort of selectively where there's an opportunity to provide really good leverage.

[00:24:35] And we're sort of doing that in a few different ways.

[00:24:39] Sean Mooney: I'd like that. And what's resonating with me there is I'm hearing almost like themes from like Jeff Bezos, where. Just like this relentless focus on what the customer experience is. And you're talking about for a lot of it, it's like, what is the founder owner experience in terms of working with us?

[00:24:55] And how do you make it better? How do you remove the friction? And then from your own group, you're thinking about who are my customers? It's well, it's the deal team. It's the management teams. How do I make them successful? There's elements of service leadership in what you're saying, but it's also like this focus on who are your customers and how do you make them have the best experience and outcome possible?

[00:25:15] Micah Dawson: We have a very intentional marketing strategy within PSG thinking about the different stakeholders and how do we make the work we do visible? How do we build those relationships with very intentional channels and communication cadence and all sorts of things to that point is just treating them like customers.

[00:25:36] I've found to be a successful approach. It's

[00:25:40] Sean Mooney: really smart. I haven't really thought about it that way until you've shared that. So I like how you articulated that. So as you go into, you've kind of all worked together, you remove the friction, you've gave this great experience to the founder owners, and now you've partnered together and you've invested in the business, either in a majority control or a minority interest basis with your different products, if you will, or maybe fund families.

[00:26:06] And so once you're into the investment, what is your team's approach on supporting the managers of your portfolio companies in the value creation phase?

[00:26:19] Micah Dawson: Yeah, so one of the ways we think about it and kind of my latest iteration of the PSG pitch is I think we've always had a really good strategy around, or at least over the last decade around value creation.

[00:26:33] And it's not rocket science, but it's the right stuff. We call it our path to 3x. It's things like how do you get the right people in the right seats, how do you grow organically and through acquisition, how do you improve margin, how do you drive cash flow, all the, all the sort of common sense things you would think.

[00:26:49] The issue I've seen is that strategy without resources is not terribly helpful in the lower middle market. And so as we've built out the team, it's really about, okay, what are the resources that we need to enable that strategy? And what we've done is because we have four different types of funds, we have the same strategy, but one strategy for products.

[00:27:14] We have coverage folks on each of the funds, and then we have value creation specialists really aligned with a specific functional area that can plug in and. As we've thought about it, we think about a couple of things. We think about impact, like direct value creation, which is a lot easier in things like.

[00:27:37] Revenue acceleration and margin expansion. It's just easier to tie a dollar of EBITDA to an activity. And then there's this idea of driving consistency, which is indirect value creation. And it's things like, how do we run a great process around hiring executives? How do we onboard companies consistently?

[00:27:56] How do we stand up a finance and accounting function, install a data warehouse and a data strategy? And so we continue to build that out. Really rallying around, like, how do we have impact and how do we have consistency really across the life cycle of the investment?

[00:28:11] Sean Mooney: I think that's great. And once again, I'm seeing kind of recurring themes in our conversation here.

[00:28:17] And one of the kind of additional elements that kind of comes to mind as you're saying this, and we've talked about this a fair bit on this podcast is the business of private equity is increasingly turning into a business. And as you kind of are sharing your approach to it, it seems very strategic.

[00:28:35] Very intentional and very kind of organized in terms of, like you said, like anyone can have a strategy strategies are cheap, right? It's the execution that's hard and the sobriety around attaching resources that are needed to get it done is even harder. And so I really like the approach that you are taking to enable the execution to get it done and get the three X because it's really

[00:29:00] Micah Dawson: easy to just say, let's do it.

[00:29:01] It's a model that I think just what I told our partners last year was we just need a lot of arms and legs to do it. And as we went through our PSG sort of strat planning mission vision values, we asked the question, why do we exist? And the answer to that was because it's really effing hard to do what we're doing.

[00:29:25] It's hard to take a business from 4 million Aviva data, 30 million. And if a management team and an investment team could do it easily on their own, we wouldn't have a job and that'd be okay, but it's just, you just need a lot of arms and legs. And I think that's the next iteration of PSG for us is we've got some really great talent and what I'd call advisory seats and now we've got to continue to grow.

[00:29:50] Our pool of doers that will be a mix of captive resources and outsource but you just need people to go in and do stuff like the strategy is usually not that complicated it's usually fairly tactical execution against sort of a plan that we can identify pretty early on

[00:30:08] Sean Mooney: that's really thoughtful and I'd like the idea that you're going to build.

[00:30:13] Of your core competencies and then you're also gonna bring in kind of outside support for force multiplication, so you can kind of cover the whole, you would like that, wouldn't you? I love that part. ,

[00:30:23] Micah Dawson: there's, there might be an entire business model. Yeah, there might be a clinical

[00:30:26] Sean Mooney: BluWave that does that, but , but that was the problem I was trying to solve was my own one.

[00:30:31] I was like, the 2% management fee just doesn't cover that much. I would always feel very badly about getting select members of our ops team stuck in very far away places. And then we would lose that person for like 18 months. And then I was like, sorry, it looked good in the deck, but it's like, not so smart.

[00:30:52] And there was regret, but I was like, we got to get it done, but we're limited because the 2 percent management fee can only do so much, but we needed these capabilities in house who have superpowers like yours, because. Lord knows my investment banking training did not equip me to be helpful. So it could

[00:31:09] Micah Dawson: be helpful in

[00:31:10] Sean Mooney: some other ways,

[00:31:10] Micah Dawson: but not in that way.

[00:31:12] I don't think there's a perfect answer. Like, it's just a really tough question to deal with. And one of the things I presented recently to one of our partners is I was like, Hey, one of my folks, if they only did three projects, 100 million in enterprise value, would you consider that success? And it's just, you can't really answer that.

[00:31:32] It's like, well, what costs over here and what were we not doing? And it's a pretty complicated puzzle. I think we've got a decent framework, but we're going to continue to be nimble and iterate and see what works for us. That's the trick too, is what you said there is

[00:31:47] Sean Mooney: like, you're going to have a hypothesis, but you're going to be testing it every day and you're going to be going left and right and left and right.

[00:31:52] And. Like every deal that I did in private equity, we always got to the end result some way or another is probably there are a lot of brute force and it could have been more elegant, but the reasons we got there were always different. And to have that kind of openness, I think for any business builders, like you have your destination, but if you go into it knowing you're going to get there in ways that you can't even comprehend, that's how you do it.

[00:32:16] It's like if you don't overcomplicate things like we're going to get there, but. There's going to be some lefts and rights and hitting the gas and brakes along the way. So Micah, one of the things I'd love to get your sense on is what are some of these kind of the top value creation opportunities that you are thematically engaging in with your portfolio companies right now that maybe other business leaders should also be thinking about or would benefit from?

[00:32:40] Micah Dawson: Sure. I almost hesitate to say this one because it just seems so obvious and probably has been repeated a lot, but talent. It's funny, when I was in business school, we had a class called leading organizations and every single executive that would come back and speak to the class said, this is the most important class you'll take.

[00:33:03] Everyone in the class was like, I don't get it, I want to learn about ops, I want to learn the numbers, I want to learn, and I didn't get it at the time. And I honestly didn't get it that well when I was working at the manufacturing company because it was like, well, process improvement or our sales funnel or something like that.

[00:33:20] And it sort of hit me in the face when I got to try best and I think about it a couple of ways. One is the team I've built here, which is like, I'm not sure if I'm good at what I'm doing, but what I know I'm good at because I think it's really obvious is building a team because I've got a team of just absolutely wonderful, smart, effective folks.

[00:33:42] And so whether that was by accident or by intention, I don't think it matters like the work speaks for itself. I do wish someone had told me that earlier, which is just like, you should just spend all your time hiring a great team under you. Because where I've been really careful and just waited on my pitch, it's paid off many, many times over.

[00:34:05] I don't think it's a dirty secret, but it's like, as we're doing value creation in the portfolio, CEO, then Like they do all the stuff we would do. Like they know how to build a sales team and they know how to build go to market strategy. And if we have a good CFO, they know how to do a P and L walk and optimize margin and all that good stuff, but it's just really hard to do.

[00:34:29] And so especially in the lower middle market where we have just pretty constrained resources. I mean, you think about a 4 million ebit dot company and you hire two or three good management folks, you cut your ebit dot in half. And so I think what we're really sort of the next horizon for us. Is thinking about Travis not only is a great place to land for a founder family owned company, but is a great place to land for a private equity executive because I think there's a pretty compelling vision to be painted for how we're going to make those folks successful, put them in great spots in their career and then just Enjoy what they're doing by working with a partner who's pleasant to work with, but also cares about winning.

[00:35:13] I think that's once

[00:35:14] Sean Mooney: again spot on in terms of everything is easier when you got the right team in place. It's so tempting when you're in the heat of the battle, if you will, of just building a business to hire fast. And kind of what you said is like, wait on the pitch and get the right person in there, be intentional about it, it makes everything easier.

[00:35:36] And so I think that kind of focus is something that has proven out in the data that we see when we started in the earlier innings of BluWave, maybe 18 percent of the projects were related to people today. It's like one and two, it's really, really grown. I think people are realizing. The world of business building gets a whole lot easier when you get the right people on the bus and it's not numbers and dollars and i don't think people are dehumanizing it's just.

[00:36:04] I think all of us are on this journey and then certainly i experienced it here starting a company from a basically a deck in a rental office the second i finally figured out if you get really good people in place i think we have really good people here. Everything just happens so much easier and better and it starts becoming more fun for sure.

[00:36:23] Micah Dawson: Yeah, I saw a good stat that I always put in our kickoff decks. It was a McKinsey study that said a high performer A player on average is eight times as effective as a C player in high complexity roles, so management, private equity, what have you. I always thought coming from a manufacturing background, like if I had a machine that I could pay 30 percent more to acquire generated eight times the widgets, it's a no brainer of a decision.

[00:36:55] Why don't we think about people with sort of that same rigor,

[00:37:00] Sean Mooney: kind of the ROI kind of mentality. Yeah,

[00:37:02] Micah Dawson: that's,

[00:37:02] Sean Mooney: I've never thought about that way. I like that. You're right. Just in some ways, like you invest a little bit more to get that a, you're going to get outsized returns versus getting the less expensive C player out there.

[00:37:15] It's a good way to think about it. Maybe Mike, as we bring our conversation full circle, this has been a really interesting and fun conversation. And I think we've had some consistent themes in, if you were to maybe kind of go back to your 22 year old self and maybe or not 22 year old Michael will listen to this.

[00:37:34] But if he did, what would be one of the top piece of advice that you'd share

[00:37:38] Micah Dawson: with your former self? It's interesting. I'm going to answer with a little bit of a non answer, which is I do think about this sometimes, which is just given how varied my background is, like there's part of me that wishes someone had told me like the key to making money is like you just go to a good school.

[00:37:57] You major in business, you go to investment banking and you go straight into private equity and they wouldn't be wrong if you look at sort of the timeframe I came up through, I'd probably be in a better position financially if I'd done that at what cost in terms of personal development and just the experiences I've had and the richness it's brought to my life and so again, little bit of a non answer, but it's like, I don't know if I would have changed anything.

[00:38:26] I think part of it is. Yeah. Learning to be content with where life has taken me. I love that advice.

[00:38:33] Sean Mooney: And it's absolutely the right answer. I did the conventional path, right? I went to a college that was a feeder to investment banks. And from the investment bank, I went to private equity and then business school and private equity.

[00:38:46] But there was a lot of like regret along that way. As I look back where I was just like, I was just collecting badges and metals and ribbons, but the life just passed me by, there was a lot of things I think, as I was Leaving to start BluWave where I was just like looking at kind of what I had kind of sacrificed to kind of get these little ribbons and badges.

[00:39:06] I was like, I don't know my kids. I'm working 24 seven. I'm trying to climb this mountain that's never ending. And one of the, kind of the past to finding humanity was I dared to look left and right and listen to the universe as I think you've done really well, right? You've listened to it and it's taken you to all these really interesting places and ultimately to where you are here.

[00:39:27] And for me, it was. The first time I dared to listen to it, I said, go start this company, which was crazy, by the way, like I worked my whole life for this job, like, like, oh, yeah, no, it's like, I'm finally like making money and I'm like, now I'm going to go and do a startup where I'm not going to make money for six years, but you're so right.

[00:39:44] It's like, dare to listen to it. You're going to get there. That was advice my brother gave me, who was really kind of entrepreneurial and kind of more of the sage sibling of mine. I'm one of six kids. And so we all have our little personas. He's like, sometimes you just listen to the universal, tell you what to do.

[00:39:59] And so what you're saying resonates a lot with me in that, if I were you, it seems like it worked out pretty well.

[00:40:06] Micah Dawson: Yeah, it's been really fun. No one can say I didn't have fun doing it. So at least there's that.

[00:40:12] Sean Mooney: No. And you're building a really, really interesting, capable value added business within your business that is helping make other people successful.

[00:40:21] And I think there's nobility to that as well. Yeah, absolutely. So while we're being kind of introspective, one of the other things I'm always a borrower of is other people's wisdom. And that's some good one that I'm going to share with my kids, your kind of point earlier. Another thing I'd love to ask, are there any kind of books that you've read that have had an impact on you as you've grown and developed and have been on your path?

[00:40:47] Micah Dawson: Yeah, I think tying into a theme, there's something going on in the industry with just a group of high performers that I've had conversations off and on with a bunch of different people on this. It's how do you balance that like ambition, that work, like what we do is fun in many ways. With this idea, and there's this term called the hedonic treadmill, where it's just you get on it and you're just chasing and you're chasing and you're chasing, and it can be really unsatisfying.

[00:41:18] And so I read a few books around that theme and the first two, one was called, I think The One Thing. And I'm going to get a couple of concepts probably confused from some other book. But one of the things they said is like the horizon is constantly receding, and if you're always chasing that, you're going to drive yourself insane.

[00:41:39] One just very sort of practical exercise to do is just look back and look at what you built in sort of a short or a long time. It's a good way to feel good about the path you're on. I think a second thing that I had gleaned from that is like sort of understanding what your purpose and role is. And for me, I got this really great moment of clarity around like my role is to make my folks successful.

[00:42:07] And if I do that, a lot of good things are going to happen. And that was really captured. So the real book recommendation is there's this great book by David Brooks, who is a New York times columnist called the second mountain. It's all about like, we're all trying to climb this first mountain of achievement and at some point most of us get knocked off of that and we go through a valley and the lucky ones find the second mountain of service of personal joy.

[00:42:33] I'm not there yet. I'm still trying to climb the first mountain furiously, but I think it was really helpful as I thought about this interplay of like enjoying my job, the hedonic treadmill, how do you find happiness and fulfillment and how do you find balance. I just thought he had a really great perspective on those things that I had found helpful to just kind of settle me down.

[00:42:54] Sean Mooney: I love that. I mean, it's a great perspective. We're all on this journey and I think people who listen to this probably most can feel this kind of like we said, I love this like ever receding horizon in front of you and you're like, you're never going to get there. And, you know, having that kind of moment to say, this is part of the fun.

[00:43:12] You're climbing mountains because you like it. If you're climbing mountains because you hate climbing mountains, but you're doing it just because he's decided to walk in a direction. That's the wrong motivation. So I like how you frame that as just like, no, nice fun. And if that mountain doesn't work, there's another one behind it.

[00:43:28] You just got to keep on going. And the other thing that I really liked about what you shared was this whole concept of like every once in a while, look back at what you've built already. You've accomplished so much. If you're always only looking at the horizon, there's a long way that you've come in the meantime.

[00:43:45] And it really is helpful. And I have a hard time with that part. But it's like, there's so much, I think, wisdom on what you shared. It's like every once in a while stop and look back and you go, Whoa, look how far you've come.

[00:43:56] Micah Dawson: I haven't found the silver bullet yet, but still so easy to get wrapped up in the busyness of the day, but you got to keep trying.

[00:44:04] Sean Mooney: I love it. Just keep on keeping on. And that certainly is. A lesson that I think all of us have benefited from over time, and if we include all the other kind of themes and concepts we talk about, you've got the right sense there that I certainly wished I had earlier in my life, but it doesn't mean you regret it.

[00:44:22] That's how you became who you became. So Micah, this has been a really, really fun conversation. I've learned a ton of things that I wish I knew before. And that's just an incredibly generous gift of you to share. So thank you so much for taking some time out of your really extremely busy day and sharing some of the lessons for all of us.

[00:44:41] Micah Dawson: Really happy to be on here, enjoy the friendship and the partnership with BluWave, and I look forward to seeing what the next years have in front of us.

[00:45:00] Sean Mooney: That's all we have for today. Special thanks to Micah for joining. If you'd like to learn more about Micah Dawson and Trivest, please see the episode notes for links. Please continue to look for the Karma School of Business podcast anywhere you find your favorite podcasts. We truly appreciate your support.

[00:45:15] If you like what you hear, please follow. Five star rate review and share. This is a free way to support the show. And it really helps us when you do this. So thank you in advance. In the meantime, if you want to be connected with the world's best in class, private equity grade, professional service providers, independent consultants, interim executives that are deployed and trusted by the best business builders in the world.

[00:45:37] Including many hundreds of top PE firms and thousands of portfolio companies. And you can do the same, whether or not you're in the PE world. Give us a call or visit our website at BluWave. net. That's B L U W A V E and we'll support your success. Onward.

Private equity insights for and with top business builders, including investors, operators, executives and industry thought leaders. The Karma School of Business Podcast goes behind the scenes of PE, talking about business best practices and real-time industry trends. You'll learn from leading professionals and visionary business executives who will help you take action and enhance your life, whether you’re at a PE firm, a portco or a private or public company.

BluWave Founder & CEO Sean Mooney hosts the Private Equity Karma School of Business Podcast. BluWave is the business builders’ network for private equity grade due diligence and value creation needs.