Thoughts on Lower Middle Market Private Equity with Michael Rubel

[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 a fantastic conversation with Mike Rubel, Managing Partner with RFE Investment Partners. Enjoy.
I am super excited to be here today with Mike Rubel. Mike, thanks for joining us.

[00:00:40] Mike Rubel: Thank you, Sean. Appreciate it.

[00:00:42] Sean Mooney: I've been looking forward to this one for a long time. I think we're going to have some really interesting topics to discuss today. Maybe before we jump into some of the meat and potatoes of our conversation here, Mike, I'd love if you just give a little bit of a backstory.
How did you get into private equity? How did you get into this industry that you've now been in for so long as one of the leaders in the industry?

[00:01:03] Mike Rubel: So fairly traditional route. I started out with investment bank. I was kind of a stock market junkie in college and high school and like the markets and was going to do the public market equity research thing, but then found a boutique investment bank called Harris Williams out of college.
And that was more of a private equity kind of advisory firm, a lot of PE clients and buyers at Harris Williams. So kind of saw how they think, and it was pretty cool. So I started with PE. And kind of never looked back. I did a hedge fund thing for a summer, but I sort of liked the personal nature of private equity more so than the hedge fund market.
So in 20 plus years and been fun.

[00:01:39] Sean Mooney: I'd love the Harris Williams background. And for those of our listeners who are maybe newer to private equity or newer to the middle market of private equity, specifically Harris Williams was one of these investment banks that really kind of turned the M and a process on And that they were the kind of the creators or the originators of.
What now is kind of the modern day M& A process where you would create a fair bit of competitive tension and keep people running fast. And as a result, they would create tremendous amount of value. And I remember as a private equity investor, I loved it when they represented us, not so much when I was against them in the beginning, but it was all new when they started it.
Now it's just an M& A process. What was your kind of. Yeah. Exposure to that.

[00:02:23] Mike Rubel: Yeah, I didn't know any better. So I just thought you called 400 of your friends and offered them the company. And that was kind of how it worked. Like you said, it was kind of the pioneer of the broad process. We got to know the companies pretty in depth, but we also went very broad in terms of how we marketed the businesses.
And again, like I didn't know any better, but then as I got to the PE side, I saw that there was different flavors of how banks operate, but to your point, Harris Williams made a lot of money and had a lot of success in just really trying to find the right home for a company with a very big funnel of name, both corporate and PE buyers.
Good training got a lot of flavors for different PE funds and how they operate, which was fun. They've grown nicely. When I was at Harris Williams, it was probably 40 or 50 people, and now it's hundreds and hundreds in different countries. And so it was a cool place to start.

[00:03:05] Sean Mooney: And I'm sure just given the kind of the mechanized nature of there, you were regularly finding that 25th hour in a day and

[00:03:13] Mike Rubel: you're 22 and you get the stuff and kick daddy for a few years.
You don't realize it, but you're learning a lot at the time. So it's a good training.

[00:03:20] Sean Mooney: I started off in kind of a similarly now kind of mainstay and middle market M and a, which was Houlihan Loki. And I started in the restructuring group, which is a little bit of a different flavor, but yeah, when you're 22, you didn't really think when you're going through the process, when they said 100 hours a week, they really meant it, but they did.
That's the idea. And then I'm curious to learn more about hedge fund. You kind of like looked at it. What was it about? When you're considering, do I stick in hedge funds or do I migrate towards private equity? How did you kind of compare and contrast that?

[00:03:52] Mike Rubel: Yeah, I figured I'd try out for a summer. I was in business school and wanted to be in New York and found a, a pretty cool kinda European hedge fund that took a pretty decent sized stake in a small cap company.
So it had a kind of a private equity bent to it. And it was fun. It was definitely a cool experience, but just again, you're lucky to get one call with management before you start to build a position. So just didn't have that kind of intermittent. Deep dive that you get with a kind of an illiquid private equity investment.
But on the flip side, it was nice to, if you like a name, you just start buying and you don't have to like wait for an actual process or convince a seller, which is kind of frustrating. On this side of the table. So pros and cons, but just in the end, I think just the access to the team and the ability to dive into the company in all levels was more fun on the PE side.
And it was kind of more of my heritage. So good to try out the hedge fund thing for a summer, but probably not the right match.

[00:04:39] Sean Mooney: It's interesting. So a lot of my friends from college migrated towards hedge funds and we were living in New York. And they would ask me like, Hey, why don't you come try this out?
And I go, well, it's real easy. I can't do math in my head. And so they were all very good at math. And it was like, even if I wanted to, you all would spit me out immediately. I'm more of an arithmetic and maybe algebra, but calculus is not in my back.

[00:05:02] Mike Rubel: Yeah, definitely smart bunch. And we would meet with other hedge funds quite often and kind of trade names.
Like there are baseball cards. I was kind of always confused by how that process works. It's like, well, all we're doing is giving each other names. Like what's going on here? So it was definitely a smart bunch, aggressive bunch, and a cool kind of different culture to learn. But I always thought that the personal nature of PE was a better match for me.

[00:05:22] Sean Mooney: There's a quick aside story with the hedge fund friends I had. They're all great at mathematics, which I think is part of them. It's a great skill in general to have, but this is at the time when Texas Hold'em was getting very popular. They'd put on these games and we'd all come play and they're all instantly in their head able to recalculate pot odds.
And just, they know every flavor in there. And I go, well. The only way I'm going to be able to make a buck off these folks is if I totally destroy the odds. And so I'd go North Korea on them. I'd make the dumbest plays. I'd show them my hand right after I did the call and they'd just go so mad because it screwed up their whole game.
And it would enable me to just stay late enough to not get enough sleep. But then eventually, the quality of their play would overcome me and I'd give them all their bucks anyways, but it wasn't until like one in the morning.

[00:06:06] Mike Rubel: Well, when in doubt, just turn the steering wheel off and just go all out. Yeah, exactly.

[00:06:11] Sean Mooney: So, eventually quality rose to the top and I got flushed out, but it was fun in the meantime. So, one of the things I think as our listeners know that I'd love to ask on this podcast in particular, Is what would be one of the things that we would know you better if we knew this about you? So mike, what would be one of these kind of tidbits of trivia that you can share?

[00:06:31] Mike Rubel: Yeah, I guess on a personal front My family comes from a long kind of naval tradition. My father's in the navy. It works the naval academy today Both my grandfathers were in the navy. My uncle was in the navy So I kind of ruined my family's proud naval tradition with my finance route here But I didn't have quite the discipline or that kind of path when I was in my sort of high school years You So it sort of wasn't for me and it was never pushed on me because it wasn't quite a match for me at that age.
But I think I found kind of a, like a military discipline and just working hard and trying to just assert myself in this industry from a structured and disciplined way, which is obviously not military defending countries, but it's, you know, the route to make the world a better place by doing right by the people and investing behind hardworking people, time, capital and hard work and sharing the upside and reward with folks that drive the economy through this position of private equity, which is kind of the match for my financial curiosity, if you will.

[00:07:20] Sean Mooney: It's interesting to hear that there's such a strong thread of people with ties to military and military traditions in the industry of private equity. And I think the nail on the head is that discipline, it's that ability to work with lots of different people and stakeholders and constituencies, the ability to kind of persevere and overcome.
Did any of that kind of resonate with you as you kind of peer back on yourself and maybe growing up in that world? How it kind of supported your ability to succeed in the industry that you now call home.

[00:07:52] Mike Rubel: Totally. Yeah. And I kind of would roll my eyes at my dad back in the day about. It's the way he lived his life.
I thought I was too uptight and too rigid, but as I progressed in my career and kind of worked my tail off, trying to work my way up and try to find leadership and leave the investment, leave my firms, I'm calling my dad often with, how do I do this? Or what's the military sort of structure for approaching this, which may not apply to business world, but at least it's a good place to start with regard to just how do you muscle through a situation that needs the right kind of military bent to it.
It's kind of been an odd, unexpected twist that has come back into my life in terms of the military heritage. Working its way into how I try to do things these days.

[00:08:30] Sean Mooney: And did you travel and live in many locations growing up?

[00:08:34] Mike Rubel: Yeah, we bounced around quite a bit not only in the U. S. And we were mostly in california and virginia, but bounced around a fair amount and didn't love that growing up But I guess it builds character And that's something that's not fun at the time But looking back it was nice to have a little bit of variety in terms of your childhood and different houses and neighborhoods And friends

[00:08:50] Sean Mooney: you learn the ability to kind of build connections quickly, I imagine.

[00:08:55] Mike Rubel: Yeah, you can't be me Socially lethargic when you're moving around, you got to sort of get out there and meet people and be a little more flexible with the kinds of folks you're trying to meet. And so maybe that's something to carry with me as well.

[00:09:05] Sean Mooney: You can see how that translates into the business you're in now.
And it's one of those things you said, it kind of builds an amount of character that I'm sure has served you well. Flipping the page here and going into this next chapter of our conversation. You've been in the private equity industry from quite some time. You've had this great set of kind of foundational experiences, A, from a kid, but B, coming up through this industry.
When I was in PE, you just couldn't help, but come up with kind of a yardstick of here's what I'm looking for in a company, because you look at hundreds of companies a year, and there's gotta be some commonality. If I treated everything like this craft project, you're already reading every Sunday, 20 Sims.
Confidential information memorandums for those who, uh, don't like acronyms as I should stay away from. But you're looking at all these companies and you have to have almost like a yardstick of like, here's what I'm looking for. So Mike, when you get a new company coming through and you're trying to say, is this a business for us?
What are some of the common traits that you look for in a company that says, this is a company that is interesting or could or will be interesting and valuable after you're able to kind of support the company?

[00:10:14] Mike Rubel: I mean, it starts and ends with the people and I'll get to that, I guess. But the business itself, I mean, to me, there's gotta be something a bit unique about what they do.
It can't just be. A me too company. It doesn't need to be revolutionary and change the world, have a totally fresh approach on something. But I do look for something that has a bit of a twist on what is oftentimes kind of a sleepy industry. So what we love to see is kind of a mom and pop industry. That's not terribly exciting.
It's straightforward. And there's big guys who do it a certain way. There's little guys who try to keep up. And if we meet a mid sized player, that's doing it a bit differently and smartly and analytical. Cool. It's a bit of a twist on the market that's resulting in them taking share and growing nicely.
That's kind of the bullseye for us. And again, that's a broad generic description, but some element of that is important because when you're trying to grow organically, it's very tough if you really are just competing on price and hoping the market blows the right way. We look for companies that can cut through any market cycle and acquire bits and pieces and put their own playbook on that add on.
Because they've got this unique West and they've got their sort of special angle on how they do things and they win business and they win clients and they win customers by just refining and constantly improving their approach, which again is a bit different. So that's kind of the foundation we look for.
But again, I think the people aspect, the culture and the passion and just kind of the young, hungry leadership that can articulate all that is obviously paramount to

[00:11:42] Sean Mooney: those are spot on. Mike, what are some of the things you look for when you're getting that early read where you say, you know, this thing might be a little bit different, they have a little uniqueness to it.
As you kind of peel that onion back, what do you look for to see that differentiation that makes it unique and being able to kind of cut through the choppy waters of a cycle?

[00:12:01] Mike Rubel: A real life example is a company we work with maybe five, six years back called Three Bridge. It looked like kind of just a staffing company.
And I was like, all right, staffing. Great. This is exciting. So I kind of put another quarter on my desk and then the investment banker, the advisor said, look, you need to meet these guys. They're doing something different. Maybe the book didn't. Demonstrate this like it should have, but they're doing something very unique on the lower end of the staffing model.
And they have a unique kind of interview process to interview really kids out of college and weed through them and find the right trades to deploy their clients to do sort of it projects. And so their secret was kind of their screen of how they find and screen and train basically talent at the lower level that the big companies don't want to go through that process.
So we take we're better at this than the big companies. They'll pay us to do it for them. And here's how we do it. And it's a very kind of formulaic and scientific way of assessing talent and deploying it in the right area. When I heard that, right, this is cool. We'll go fly out and see them. And then we met the team and we fell out of our chairs.
I mean, they were doing something that sounds so simple, but they were doing it so well and they were growing at 40 percent a year in a staffing industry that's flat on a good day. It's an example of something that on the surface is kind of, okay, well, everybody does this. But then when you dig a few layers deeper, there is something special about what they do and their clients pay them handsomely for it because they don't want to do it.
So that to me, and that business did very well for us. We sold it and rolled over with the next guy. And so we're still kind of in the business, but at a minority stake. And so it's a good example of a book by its cover. Like the cover of it was not terribly exciting, but the more you dug, the more it was something special and unique that they were doing in their end of the market.

[00:13:36] Sean Mooney: I love that. And I think it's a hundred percent on target. One of my mentors would say, Sean, what we're looking for are companies that aren't necessarily glamorous or they're sexy, but they can dance in some ways. You don't want to be in the big, bright, shiny industries. You want to have someone that's a little uncovered because glamor attracts all of this attention, but if they can do something and they can dance to the tune of some fast moving music, kind of magic happens.
I

[00:14:03] Mike Rubel: like that. That's a good analogy. They went up against a lot of big competitors who don't dance to use your analogy. They were kind of life is good. E and Y Deloitte. Why would they deploy this model? What they're doing is working fine. So it was kind of a situation where they found a niche that was kind of underserved by the small guys and really kind of blow the radar of the big guys.
To your point, they could dance in their own little market with their own little offering. It worked very well.

[00:14:28] Sean Mooney: The other point that I really like, particularly if people are coming up in this industry, what was really telling in terms of one of the signals you look for is Is this company growing at a different pace than anyone else, which means their customers are voting with their dollars?
It is such a great signal that, you know, you get this information memorandum and you see this, you go, wait, staffing, this is a 0 percent growth industry. What are these people doing to grow at 40 percent a year? There's something in that secret sauce that came down to this execution ability in an area that was probably really hard to do, but they figured out kind of a secret sauce to it.
Yeah.

[00:15:02] Mike Rubel: Yeah. The best companies like that. They kind of say growth is the easy part. We do what we do well. Growth is easy. Maintaining the culture and finding good people to fulfill the work is the hard part. So it becomes a people game. It's kind of where RFE tries to specialize. So we're not operators and we don't pretend to be operators.
And if their model can't grow, we're probably not the best fit. But if their model can grow and it's a game of what add ons do we do? What hires do we make? And how do we keep our culture and people happy while we grow? Then that's where I think we can be valuable.

[00:15:33] Sean Mooney: That's something that is really kind of telling and jives with what we see and that the more and more I read in the headlines about chat GPT, the more and more we get calls from firms like yours for people.
And so, AI is going to have its place in making things efficiency, but ultimately it's getting the right people with the right culture in a business with some sort of competitive differentiation. And then magic can happen.

[00:15:55] Mike Rubel: No question. I think I spent the first half of my career kind of rolling my eyes at culture, thinking it was kind of the soft hokey stuff, and it's all about the numbers and the hard metrics.
And I don't know when I flipped, but I've completely flipped and it's all about culture. And it's all about building the right team that has the right culture and not much else matters if you get that right.

[00:16:13] Sean Mooney: And that's something that I directly experienced as well, spending the vast majority even to this point of my professional career in private equity, it was kind of like, yeah, it's a little huggy.
But in some ways, because we're in this very bizarre microcosm of like type A's, and the industry I think has come a long way from like when I started the industry in like the late 90s. But when I started with BluWave, I spoke with a ton of people who had built companies before. And one of the common things everyone says, like, get the culture right.
I had a study. I was like, what does that even mean? And the best thing that I was able to at least explain it to myself was, is it's not necessarily a religion or philosophies of life even per se, it's how your organization responds to things in a common way across a variety of circumstances.

[00:17:03] Mike Rubel: That's well said.

[00:17:04] Sean Mooney: If you get that right and you get a commonality with a diversity of people who bring all the different perspectives, but who can behave and have whatever those three or four or five things that you want them to do, and then you reinforce it and reinforce it. And then it just becomes a flywheel.

[00:17:20] Mike Rubel: That same company has a kind of a culture check for all their people.
But if you have two minus culture scores in a year, you're kind of out the door. It's sort of a culture grade, not a performance grade, which I thought was kind of hokey. But it's true. If you can keep the culture rich and have a, almost a mercenary process for reading out the wrong cultural fits, then everything else really does fall into place.
You're not seeing culture drift. You're not seeing culture friction. You got a way of measuring and pruning culture as needed.

[00:17:47] Sean Mooney: We do the same. We hire to our culture, we pay to our culture and we fire to our culture. That is a well run business. That we aspire to reach someday. Us too.

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[00:18:20] Sean Mooney: Mike, maybe to turn the page here.
I'm curious to understand more about how your firm approaches value creation in kind of the resources that you bring and the approaches that you bring to build value within the companies that you're partnering with.

[00:18:38] Mike Rubel: Yeah, I'd say that we don't deploy the operating partner model like some firms do very well in our size and part of the market.
We just think the operating partner is a bit of a dangerous game. You have people that are kind of the PE firm, kind of the company and doing both ends, which can be confusing. So we're pretty big believers in our job is to really obviously find good companies in fragmented spaces and run the ad on play, but it's really just to find the best team we can and really incentivize them, support them, capitalize their efforts and always be assessing and top grading the senior team and the mid level team at all areas, which sounds pretty basic and pretty, I guess, vanilla.
But I think. We pride ourselves in being able to find good people. Like I think a lot of folks can find good companies cause we have new deal engines and originations and BD, but the companies are kind of half the battle, the people are everything. We have a in house chief people officer who finds talent.
We've got a lot of people on retainer that are all focused on, like I said, culture, retention, incentives, onboarding. So we try to be better at the people side of things. In our world, that's kind of how we empower these companies. We think every small company with the right strategy is kind of two or three hires away from victory.
And our job is to find those two or three hires and hopefully the leader you backed is still the leader, but almost every time that leader needs a few strong lieutenants. And our job is to find the lieutenants. And make them all mesh and if they don't mesh, make changes and then put a lot of incentives behind that senior team and then all the way down into the company, down to the lower ranks and get the element of ownership to kind of flow through the whole company and go from there and really stay out of their way and let them execute and operate.
We sometimes have to get in the weeds and sort of help the company, maybe put a little financial rigor into what they do and analysis. We don't view our jobs as really altering business models and changing operations. We're really there to provide again, capital support incentives and people and horsepower.

[00:20:37] Sean Mooney: I really like what you said there, and it resonated on a number of levels. And one is this whole point that even to start with, you're looking for a differentiated company, right? And so they've got something through your approach at RFE that's going to be differentiated. And then it's this idea that one of my favorite books of business of all time is Jim Collins Good to Great.
What does he say in that book time and time again and really early is, get the right people on the bus. You have a differentiated company, you have the right people on the bus, and I'll mix some metaphors here, but if you give it some fuel, then that flywheel really spins. What you're talking about is all connected, and it's this whole point that like, listen, we're going to find our cut type of RFE companies.
We're going to get people on the bus, but what you're also saying is, I think so often people just look at kind of the admirals, but you're also saying, no, let's get you the lieutenants too, that we're going to get in to get this thing going. And then the thing with the right amount of fuel can go really fast.
That makes a ton of sense to me.

[00:21:37] Mike Rubel: And then the incentives got to go deep. Cause a lot of times there's always three or four mid level folks who are making it happen day to day. And you don't see them in the board meeting, but you hear their name in the board meeting. So I'm always like, all right, who the heck are these people that you keep mentioning?
How many shares do they have? Are they happy? Are they well paid? Are they productive? Do they see a path forward in this company? So it's not just about the senior team. You got to make sure that the incentives and the alignment is all the way down, especially in those mid level folks that are in the trenches.

[00:22:02] Sean Mooney: That's another great theme that I think is lost on a lot of people, particularly when they think about maybe. Old school private equity, we're going to just the CEO, the CFO, and maybe one other gets equity. I really like how you're talking about also like pushing that down to not only drive performance and value creation, but also reward.
You're ahead of the trend, and it's a really good and important trend in terms of, Rewarding people for doing things that are in the best interest of a whole host of stakeholders, not only just the equity, but the other team members on this company. So it can be bigger, better, faster, safer, stronger.

[00:22:36] Mike Rubel: Exactly. I mean, everybody has these incentive plans, but we think ours are bigger than most and we do push them down pretty far. And we also try to communicate the value of the plan to everybody. And we had a call the other day with 80 people on it that all had shares in the company. And I got to explain kind of here's where we are.
Here's sorry, but down here's our multiple. Here's kind of what your share price is. You know how many shares you have, you do the math and here's kind of what drives your price. Here's what we try to do at kind of the RFP and board level and management level to make the company worth more, which affects all of you in terms of your share price.
So if you don't explain it in kind of layman's terms, and if you don't let people know kind of where they stand, you're kind of wasting value because they don't sort of change their behavior or think like owners, if they don't have kind of that owner's meeting. And education, we're sort of big on that.
As I end every call like that, I say, please call me anytime if I can be more help. And I instantly regret that because I get a lot of calls from people, but it's a good use of my time to educate people that are working hard on what their shares are worth because they are my partners and I got to take care of them.
And the more they think like owners, the more they're doing right by the investment.

[00:23:44] Sean Mooney: It's an amazing transformation when you see it. And when people go from. Valuing an hour of their time as like an hourly rate to understanding that that hour of their time is actually a multiplier if they think holistically about being an owner and a business builder versus someone who's kind of, stick with our analogy, just saluting and say, aye, aye.
If they think about having a stake in what's being created and benefit from that, they think completely differently about how they spend their time and understand how it matters meaningfully. In terms of the impact that they can have for not just their bosses or their owners, but themselves.

[00:24:24] Mike Rubel: Exactly right.
And frankly, the growth is hard. It's hard work running the PE playbook with MNA and growth, new hires, pressure. There's gotta be a reward for it because they're creating lots of value for the company. To me, the whole point of private equity is to share a lot of the upside with the folks that make it happen and do it in a tangible way with a tangible event, and hopefully they make lots of money and it's well deserved.
100%.

[00:24:48] Sean Mooney: I have this feeling, and I think a lot of people feel it, we've been living in a washing machine over the last four or five years, where it's like, good news, bad news, good news, bad news. And it seems like now it's kind of like if you cut through all the noise and look at the signal, it's like two or three good news is, but still the one bad news, but it's still, there's so much uncertainty in the world.
What's some of the things that you're speaking with your portfolio companies, your colleagues are speaking with your portfolios to kind of manage through this time right now and find opportunity while also keeping an eye on kind of the noise and the signal and some of the risks that are still out there.

[00:25:26] Mike Rubel: Yeah, I think again, it sounds kind of basic, but we just got to keep score as much as we can on the guts of the business. And it sounds kind of callous or mercenary, but we're in this weird time where you don't know if you should be investing in growth or cutting back or the leverage you got to pull to maximize value long term, short term, whatever.
A lot of CEOs are saying like you're asking me to find this balance. I don't know what the balance is Like what do you want to do? We want to cut we want to be acquiring do we want to be growing? And I said look there's never a perfect balance but to find the balance you got to keep score and by that I mean you got to Put on one sheet of paper.
All the things you're investing in investing can be, you get a new office in Australia, just losing money, or you've got these new BD people who are not paying for themselves yet, or you did an ad on and they're brick even or whatever, and so there's, to me, anywhere you're not maximizing profit is sort of an investment, quote unquote, that you got to just put on a piece of paper and rightly quantify what it is doing to the overall business and just keep an eye on it and think about every week or every month, like, is this the right investment for where we're headed?
And what do I need to see? To have more patients here, or do I cut this loose or do we need to double down? But the first order of business is just keeping score and having a really strong financial function that can help the business keep score. And that's kind of where we come in and not everybody likes to keep score.
They get defensive and they get upset when you're rating their people poorly, even though they're work hard and they're passionate, which I get. And you're not saying make cuts. You're not saying. We're going to jump ship on these initiatives, but you just got to quantify it and put it all in the same currency and make sure that the senior folks are looking at all the right things the right way.
And that's make this good decision. So that's kind of what I'd say. The way to navigate this uncertain time is just to really be maniacal about keeping score on every inch of your business.

[00:27:12] Sean Mooney: That warms my heart to hear that, just coming from some of the same schools of thought, and one of the things that, whether it's John Doar's kind of measure what matters, or going back to kind of like Dr.
Edwards Deming and about Lean Six Sigma, If you can define what's important to you, and you can measure how you're performing, it becomes so much easier to improve those things, and the trick of that is figuring out the fewer rather than more things that matter most. And then the easier part is like measuring it, and then the hard part again is like how do you make it better?
But at least if you know the score, you can play the game. If you're just like, you just have no clue, one of the things as I watch like soccer for instance, that I find. Really, really frustrating is that I never know what the time clock is. How much time do I have left? What do I have to do? And it was like, I know the score, but if you can understand time versus the performance measures that are important, then you can take action and do things about things.

[00:28:08] Mike Rubel: A hundred percent. Yeah. That's what I try to harp on with some of my companies and some do it well, and some kind of resist. It's not easy, especially these days when, again, you're trying to navigate a year that's going to be. Like you said, a lot of uncertainty and you don't know which way the wind's blowing some days.
Depends on what headline you read that day.

[00:28:24] Sean Mooney: And that's a really good test. So if you're a CEO looking to this and you're in private equity, you're hoping to, that's the hard part. It's like you can come up with 50 measures on that scorecard, but what are the three, four, five, maybe up to 10 at most that matter and it forces you to know your business.
Cause that was the thing I really struggled. We still, I mean, we measure everything here at BluWave. But every year we got to cut back like half the measures because there's just this creep that grows. It's so much harder just to know the few things that really drive the business. And if you can do that, you're going to be able to do well with Mike or his peers or others.
But that intellectual process of understanding what moves your business is so important. And if you don't know, better figure it out

[00:29:07] Mike Rubel: real

[00:29:07] Sean Mooney: quick.

[00:29:08] Mike Rubel: But we recognize again that It's not easy. These are not poker chips. These are people. These are hard working folks and initiatives that have a lot of elbow grease in them, and so it's not easy to cut bait.
We get the fact that, by definition, the scorecard is kind of, again, callous and cold hearted capitalism at work, but it's how you got to start, and then you can be successful. More thoughtful as you progress in your thinking, but starting with a scorecard is kind of the point.

[00:29:32] Sean Mooney: And ultimately, if you think about this from the human capital side and the human resources side, once you get those measures going, you're likely hiring a lot more people because then you have fuel to grow, you're using that cashflow that you created to do things you never thought could have been possible.

[00:29:47] Mike Rubel: A hundred percent. Great point.

[00:29:48] Sean Mooney: One of the other things that I'm always trying to go back as I look at myself historically. If it were up to me figuring things out in life, it would have been a very short, short trip.
Yeah, I always tell myself, yeah, I live my life through the Walmart form of innovation. Like, I don't figure it out myself. I just see what other people do, and then I borrow it liberally and then Frankenstein myself. And so there's all these pieces of advice I wish I knew back then, but as soon as I learn them, I'm like, I didn't know you could do that.
And then I immediately start doing that. But there's a lifetime of, Oh, I wish I knew that then. I just learn all these things. Like, I didn't think you could do that. And then everyone gets really nervous when I have these epiphanies because then I like stir the coals within blue, but, but it's still, I wish I had all these things.
And so, Mike, I'm curious if you were to go back and meet 22 year old Mike. What would be one of the pieces of advice that you'd share with yourself that you wish you knew that?

[00:30:49] Mike Rubel: Maybe on the softer side, I would say just enjoy the ride. Obviously I've enjoyed life and have a good time with both personal life and career, but I do think just by our nature, we're very focused on just the next stage and results what's on the common.
Can we get this company sold? Can we raise this next fund? Can we hire this next person? It's always about that next step. And that's kind of what keeps us motivated is our kind of discontent with the here and now and kind of what's next. But. I think too much of that, you just sort of lose a bit of the ride and the enjoyment of what we do in life.
And so I would maybe tell my younger self to maybe just keep doing what you're doing, but enjoy each step, enjoy the ride, keep your general impatience with status quo, because it drives you to perform, but, but try to balance that with just the general sort of enjoyment for the journey, not just the destination.

[00:31:36] Sean Mooney: And you put your finger on the number one nerve that I have, is like, enjoying the now and being present, and it's something that confounds me. I try every day to find that moment. I always have this mentality of looking forward, and you never cross a finish line, and there's always more to do. And I'm keenly self aware that I have a hard time with this.
So, if you figure out how to do that, please let me know because I'm so bad at it.

[00:32:08] Mike Rubel: Yeah. If my 20 year old asked me how to do that, I don't know if I'd have an answer for him, but I'd tell him to try and just be conscious of it, I guess. But yeah, to your point, I don't meditate or do any of that stuff. Maybe I should, but I don't have a lot of stress relievers in life.
But I think being more mindful of just, like you said, being present would be good advice to my younger self, I guess.

[00:32:27] Sean Mooney: If you figure it out, let me know. If I do the same, I'll let you know. I'm getting a little bit better. And I tell everyone this within our companies, like, it's not that I don't mean to, it's just that it just evades me.
And so it's also one of those things where I'm just trying to get support from people who do have that gene where they're able to go, Oh wow, this was great. I will give myself a little credit. I am kind of finding moments now in ways that I never did before.

[00:32:51] Mike Rubel: Well, you've done something different in terms of your career change. I think you're helping a lot of folks like me, not only with this kind of thing, but with just your business model of connecting us to the right folks who could help make a difference in our companies. I think Sean, you've really taken your PE experience and twisted it in a way where it helps a lot of different people. So thank you.

[00:33:09] Sean Mooney: Oh, and thank you. It all comes down to the opportunity to work with people like you and your colleagues and your firm. And it was really powered by probably a midlife crisis, hubris, and naivete. And so, it was like three things, it was kind of insane. It truly has been professionally the most satisfying thing I've done to date is the opportunity to work with Work with all these super powerful business builders like you and your colleagues, and I mean that with a hundred percent Integrity and maybe this is one of those moments where I say like wow This is pretty good because every day I like as I said, like I know you could do that It's such a gift to someone like me to be able to watch you all do what you do.

[00:33:53] Mike Rubel: Well, thank you again Thank you for all you do for our firms and you found a unique niche and it must be fun to be filling that niche

[00:33:59] Sean Mooney: It's a blast It luckily is a kind of a continuation of what I already did, and maybe from a different way. In more of the picks and shovels way, if you will. Mike, this has been an amazing conversation. I 100 percent appreciate you, A, taking the time to share your insights. And then B, sharing all these things that I wish I knew before, and that's something that is truly appreciated and not lost on me. So thanks so much for taking a few moments to not only impart wisdom on me, but also all our listeners.

[00:34:30] Mike Rubel: I enjoyed it, Sean. Thank you.

[00:34:40] Sean Mooney: That's all we have for today. Special thanks to Mike for joining. If you'd like to learn more about Mike Rubel and RFE Investment Partners, 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. If you like what you hear, please follow, five star rate, review, and share. It really helps us when you do this, so thank you in advance. As a measure of gratitude, we're making a donation to Feeding America and the related associations for each five star review we share in your podcast platform of choice. So thanks again. 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 by the best business builders in the 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.