October 20, 2025 • 64 mins
What if the fastest path to growth isn’t “more leads,” but fewer, better customers you serve so well they never leave? We dive into the uncomfortable truth most teams avoid: value is concentrated, churn is predictable, and the difference between winners and strugglers is a focused list, clean data, and relentless follow-through.
Nick Mavrick of Built Data joins us to unpack how behavioral data flips strategy from guesswork to precision. We talk about why 3 percent of customers can drive most of the revenue, how to spot the accounts worth protecting, and why chasing the bottom of the market burns time and morale. Nick shares lessons from rental consolidation and dealers under pressure, then maps a practical path for OEMs and dealers to operate from a single, shared dataset that actually moves the needle: national to regional account targeting, unified telemetry for proactive service, and outcome-based offers that make loyalty rational.
We get tactical on carving out “special forces” inside legacy organizations to bypass slow systems and prove change in 90 days. Think weekend war rooms, a defined list of high-potential accounts, service promises tied to uptime, and quarterly reviews that reward implementers. We also explore the shift from selling iron to selling outcomes: cost-per-hour, automatic replacements at thresholds, and machine health monitoring that turns vendors into partners. Along the way, we tackle supply chain capital traps, competing with national rental giants via human service, and how to raise standards one name at a time.
If you’re tired of noisy dashboards and stale models, this conversation offers a cleaner lens: begin with the end, market to a defined list, and serve the right few better than anyone. Subscribe, share with a colleague who owns key accounts, and leave a review with one change you’ll make this quarter.
Visit us at LearningWithoutScars.org for more training solutions for Equipment Dealerships - Construction, Mining, Agriculture, Cranes, Trucks and Trailers.
We provide comprehensive online learning programs for employees starting with an individualized skills assessment to a personalized employee development program designed for their skill level.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
SPEAKER_04 (00:02):
Aloha.
And welcome to another candidconversation.
Today we're joined by NickMaverick.
And it's going to be aninteresting discussion.
Nick has a business called BuiltData.
He's been involved with therecent AI podcasts we've had
with Venke and others.
And today I want to focus on hisstrength, his focus, which is
(00:28):
data.
And he looks at data in waysthat most of us don't have never
thought of.
But also how that applies toartificial intelligence.
So with that as the opening, andthat's a pretty damn wide field.
Nick, good to see you, youngman.
SPEAKER_00 (00:47):
Ron, always a blessing to see you.
Did I give you enough ground tocover?
And I may, I have to look atflights.
Um make them end of next week.
That's okay.
I'm here.
SPEAKER_04 (01:00):
But so how do you how well?
First of all, how long has builtdata been in existence?
SPEAKER_00 (01:10):
Good question.
So uh I'll answer it two ways.
One is built data to answer yourquestion specifically.
We've been a call incorporatedfor a year and a half.
Prior to that, uh, I operated asData Co and for a couple years.
And the foundation of themethodology, and happy to share
(01:35):
that.
We I hope people do this ontheir own, um, was many, many,
many years ago, uh, 1998, when Iworked for one of the
consolidators that competed withUnited head-to-head called
Nations Rent.
And Nations Rent uh had extremecustomer concentrations and it
(01:56):
just shocked me.
Um, Nations Rent, 3% of itscustomers did 62% of the
business.
It was 15 people per store.
And it uh was just astounding tome.
And if you lost five of thosecustomers, your acquisition,
since the company grew throughacquisition, the acquisition was
(02:18):
no longer a creative.
And nation's rent gotover-leveraged.
Um, ultimately went into chapter11, restructured, got rid of a
ton of debt, and was sold toSunbelt at quite a handsome
return for the new owners, whichwas a very large hedge fund and
some talented people.
But that taught me the a bunchof things.
(02:41):
It's not only a concentration ofdata, but it was if if you you
it the notion people talkrelationship, if you treat your
customer very, very well, theykeep coming back again and again
and again.
And that's how you end up withthese concentrations.
And it's actually a very, verygood thing to have uh extreme
(03:04):
concentrations, as Buffett says,you know, too much of a good
thing can be wonderful.
SPEAKER_02 (03:09):
So the other side of that concentration, it is a
blessing of good things, likeBuffett said.
But you lose a lot of customers.
SPEAKER_04 (03:28):
And the construction equipment dealers late to the
game in rental didn't understandthat concentration piece at all.
Didn't it was outside theirtheir thinking pattern, their
comfort zone.
When you started with nations,and then for a while you worked
(03:53):
with smart equipment with Alex,right?
Alex Hirschler?
Yeah, yeah.
Sunbelt I don't know that thesenumbers still hold or pretty
close.
I think Sunbelt's return onassets is fifty percent.
So you have ten million dollarsworth of assets in the rental
fleet, and you're gonna spin offfive million dollars of profit.
(04:15):
That's to an equipment dealerthat makes two to five percent.
That's obscene.
They don't know how to deal withthat.
Yeah.
So from that is the beginning,and the concentration and the
retention being the drivers, howdid you how did you start trying
(04:37):
to slice and dice the data?
SPEAKER_00 (04:43):
Uh good question.
You know, I'll do my best toanswer because so many things
kind of rush into my head.
There's a number of ways uh welook at data, and I'm gonna say
our jobs are relatively easy.
The hard work is done by therental company or the dealer,
specifically by the salesperson,and to stay in the path of
(05:05):
growth.
And we we look at a few things.
One is we look at the behavior,uh, which is just think of it as
a bunch of photographs andputting them together, as Steve
Clegg says, the transaction.
And Steve is so brilliant that,and you're brilliant, and that
the transaction, which is thebehavior of what I did today and
(05:28):
yesterday, and the last month,and the month or in the month
before, matters incredibly so.
So we look at the behavioralside of math, is the fancy word,
um, of what happened.
We look at the concentrations inthe market to point people
towards desirable customers,meaning you mentioned um
(05:51):
customers do turnover.
But when you break down inconstruction SICs, some people
prefer the NAICS codes, about uh83% of the companies have less
than 10 employees, and theycount for 23% of all
construction segments orbusinesses.
SPEAKER_02 (06:12):
So say that again.
83%.
SPEAKER_00 (06:15):
83% of the companies is the bottom end.
I'm gonna say the lowest value.
That doesn't mean they'revaluable customers, but they're
not gonna drive um they're notyou're not you're gonna have a
very hard time prospering offthis segment.
So 83% of the business money.
Correct.
Yeah.
Have less than 10 employees, andthey account for 23% of the
(06:43):
number of employees.
And so that you can look at thatnumber of employees is a proxy
of their of their capability ortheir their wealth, like a
better word.
And there's an extreme amount ofturnover uh in that one to 10
category segment.
Those businesses come and go.
(07:04):
What we aim to do is pointpeople towards the more secure
companies, uh, generally 20 plusemployees.
It isn't does also include 10 to19 employees, and the ones that
are working in the highestgrowth areas.
So a dealer or a rental company,or an OEM for that matter, can
(07:27):
secure their business with themost valuable customers
strategically.
As opposed to, um, granted, asalesperson executes a
transaction.
The a lot of sales focus andmarketing focus is very
transaction-oriented.
Now, I know that recognizethat's a contradiction.
(07:47):
They're trying the I've got tosell something today to achieve
my market share goal.
I've got to sell something orrent something today to achieve
my quota.
And then they scatter all overthe market to achieve that
outcome, but it may not bestrategic.
SPEAKER_04 (08:02):
So stop there for a second.
SPEAKER_00 (08:03):
Yes.
SPEAKER_04 (08:05):
For 27 years, you've been digging around in data.
You've been analyzing things,and 27 years later, you've got
conclusions that stand the testof time.
But they didn't come in thefirst year, first three years,
five years, which is why mostpeople don't want to walk
(08:28):
through the door that you did.
What triggered or why or how, orwhat is it about your
personality that makes you socurious?
Doesn't matter how many timesyou don't get the answer, you're
going to keep on digging.
Because that's what's missing inalmost all of us, isn't it?
SPEAKER_00 (08:48):
Yeah, I wish I had the Bill Burley.
Well, yeah, it just it's been alife, yeah, a life.
I I was watching, uh, I don'tknow if you've ever seen the
Bill Burley uh video aboutrunning running down a dream.
Uh I'll send it to you.
But he just is publishing abook.
And I would say the youngerversion of me stuff had was
(09:10):
blessed with a bunch ofdifferent experiences.
And the teachers like AlecSchussler, um, Don O'Neill, who
great entrepreneur who reallyfound was the foundation of call
it my realization of howimportant integrity is and
caring for people is John Kaske.
John Kaske, absolutely very goodfriends with Don, Don
(09:32):
Charbonnet, um, McKay.
There's others.
And what about uh when I was inmy very early 40s, I turned 41.
I was working at Volvo Rents andfor almost 10 years, and I
realized I had become, I alwaysthought of myself as an
entrepreneur, and I and I Irealized I was quote unquote a
(09:53):
corporate guy.
And the so I left the industry.
I said, I'm gonna had enoughcall it uh accumulated to uh not
have to work next week, and Ileft the industry for um
probably eight years and wentand did other things.
(10:14):
A few years ago, I did some uhwork for the owner of a large
dealer enterprise.
It happened to be a caterpillardealer, and it was very well um
resourced.
They had more data, they hadsystems up the wazoo,
subscriptions, people in all theseats, but they quote unquote
(10:37):
couldn't get their data.
And I you know have to kind ofblind some of this information,
but they that I think they hadlost, uh, my opinion, they had
so many strengths, but they hadlost awareness of what the how
they were succeeding.
So a lot of what I learned earlyon was proportionality, and the
(11:00):
proportionality is ineverything.
It's if you flip a coin, ofcourse, you're you have a very
even distribution.
But you if you can look at andunderstand, get on the scale,
understand the proportionalityof your most important customers
and your least importance.
Now you can put a stake in theground and you can say, How am I
going to go strategically?
(11:20):
And if you don't do that, yourresults can be quite volatile.
For the industry as a whole,there's a huge opportunity, as
you know, with the amount ofcapital that's stuck in the
supply chain, meaning a dealerplaces an order, a manufacturer,
manufacturer, ships it to thedealer, floor plans it, it may
sell, it may not, it sitsaround, it ultimately gets
(11:41):
discounted and rinse and repeat.
And there's an incredible amountof capital that's trapped in
that supply chain.
Our vision is if we can providea common data set to the
manufacturer and theirdistribution, they'll be more
successful.
There's no reason this industryshould have 2% net income
margins, um, or a dealer shouldhave 10% gross margins.
SPEAKER_04 (12:05):
It's not what we're seeing recently, though, Nick,
is about every 20 years we'relosing half of the people in the
supply chain.
SPEAKER_03 (12:15):
Yeah.
SPEAKER_04 (12:16):
Again, part of that is the low return they're
getting, part of that is theexcessively high investment
that's required.
Part of that is the process andmethodology they've been using,
which is, I think, to somedegree why leadership sticks
their hands up in the air andsays, Well, we'll just continue
what we've always done, becauseeverything's okay.
(12:38):
My sales number's going up.
And if it isn't going up, whenyou're dealing with only half
the number of competitors, yougot a bigger problem, you know.
But they didn't, they don't knowthat because they're not data
driven, which I think everythingthat you talk of, think of, deal
with, and every decision thatany of us should make should be
(13:00):
data driven.
Without it, we're dead.
SPEAKER_00 (13:06):
I I mean it it you might as well wear a blindfold.
It's in it's unf the outcome isunfortunately when businesses
don't do well, it destroysfamilies.
It it really does.
And it's from a humanitystandpoint, it's it's a shame.
(13:27):
It it's completely preventable.
And you there's a few moremarket forces today, right?
Well, by the size of the threelargest companies, um, United,
Sunbelt, and Herc, very wellrun.
How they did it, I get kudos tothem.
It's very difficult to pull offwhat they did.
(13:50):
But they now have extreme marketpower.
Uh, they can open and closefactories.
And so if you're a dealer, youthe rate of shift, as you know,
from ownership to rental ischanging dramatically.
And what was general rental, nowthey're in specialty rental.
And the amount of used equipmentthat they pump into the market
(14:12):
um quarterly is massive.
And you see that in the numbers.
And if you're a dealer, what youyou may want to consider were a
rental company is the employeesof big companies generally
aren't happy, right?
They don't feel valued, theyfeel as a number.
So, how can you play into thatinherent weakness?
(14:36):
And I mean, if they're not truebelievers, and they're not,
because it's a big company, hasnothing to do with the pedigree
of who these companies are, inmy opinion.
Then the the independent, thedealer, the locally owned
businesses, the locally ownedrental companies, the way they
can play against those companiesis by securing the customers
(14:58):
through better relationships.
Now, I'm being a littlesimplistic because of course it
it breaks down to advantagesthat those big companies have,
like incredible buying power.
SPEAKER_04 (15:08):
Um the the thing, and let me interrupt for a
second, the thing that thatfocuses on is that crazy word
loyalty.
Yeah.
And almost everything that wehave in society is saying to us
loyalty doesn't exist anymore.
And that's from marriages,that's from all kinds of
different directions.
(15:29):
I believe our activity, ouractions have caused loyalty to
become less important.
We went to voicemail, nobodyanswers the phone anymore.
We did the customer service fromIndia, and no disrespect to
India or Malaysia or wherever,but it wasn't local.
(15:50):
Do we not have enough peoplehere?
Oh.
And then in the last this year,it's kind of interesting.
We're suffering now because wedon't have enough employees out
there because we're getting ridof the illegal aliens.
They were performing a validfunction in society, but Ronald
Reagan and Tip O'Neill back in1980 decided that they didn't
(16:13):
want the visitors' visa toexist, the temporary visa for
the agricultural workers, forinstance.
The consequences of regulationsand governments and is is really
amazing.
And the only way you can fightthat, it appears, is like you
(16:33):
just said.
I've got Sunbelt, I've gotUnited, I've got Herc.
And they have an inordinateamount of power.
Like you said, they can bury amanufacturer.
Unbelievable.
Yeah.
And that's not just in ourindustry, this is generic across
regions.
It's in the paper business, it'sin the mining business.
(16:54):
You know, one little side, andit's a little weird.
Do you know who the largestforestry company is in America?
SPEAKER_00 (17:00):
I don't.
SPEAKER_04 (17:01):
Warehouser.
And that's three guys thatstarted in Minnesota.
You know what the largestforestry company is in Canada?
SPEAKER_00 (17:11):
I do not.
SPEAKER_04 (17:12):
McMillan Blowdell, British Columbia.
So in Canada, the forestrycompanies are given trees to
plant.
So the part of the forest issubsidized, according to
America, because we don't dothat.
So the America puts a tariff onit to make it equal.
(17:35):
You know who owns McMillanBlowdown?
Warhauser.
So they got both sides of theborder.
It doesn't matter to them whatthe governments do.
And that's the same thing withthose three rental companies.
It doesn't matter what theregulators want to do.
They've got enough stroke,enough power, they can overcome
(17:55):
damn near every obstacle that'sout there.
If you don't deal with data,you're dead.
SPEAKER_00 (18:03):
Like you said, you're blindfolded.
You're blindfolded.
And you if you flip it around,um, they can win.
They can.
I mean, it it's uh in themilitary, it would be special
forces backed by greatintelligence.
You need a small team.
You cannot get in a land war.
(18:23):
It this can be one, but you youcan you have to take it in
layers because it's intimidatingotherwise.
Meaning, an OEM with theirdealer operating off of
literally one name, same row ofdata.
Some of the biggest OEMs, as youknow, have national accounts.
Regional accounts are tough forthem to execute.
(18:44):
That's that's not that's notright.
And it just requiresorganization.
So the they could work down fromnational accounts to regional
accounts and be specific with abrand.
And so they can want to securetheir business, working from
national accounts to regionalaccounts by working off a list
(19:06):
that's shared with the dealerand using systems, not legacy
systems, that can jump over, youcould argue it'd call it AI, but
just call them flexible systemsthat link the OEM to the dealer
on a common set data set withthese regional customers and
provide them the level ofsupport to guarantee uptime.
(19:29):
It just requires a little bitmore imagination.
And to the extent they leavethat to and they just say, no,
it's not a national account,that's not cool.
Um, United, you know who hasgreat national account programs?
United, Sunbell, phenomenal.
Um, I would again argue thatthose people don't feel
(19:54):
completely valued.
Maybe they're not fullysupported.
Nothing against those companies.
It's by virtue of being one ofthe tens of thousands of
employees that you you couldbeat them through better
relationships, meaning a betterunderstanding of what you're
trying to accomplish.
SPEAKER_04 (20:10):
So what you're you're describing really is the
competition to a shoppingcenter, to a mall.
It's specialized services,specialized products with people
that know what they're doing.
You go into Walmart, uh changethat you go into Safeway, and
(20:34):
you ask for what's the specialtoday in meat.
And they'll come up withhamburger, they'll come up with
rubai, they'll come up with NewYork's, they'll come up with
pork chops, whatever the heck itmight be.
And I'm a bit of a jerk.
I say, well, why is that specialtoday?
(20:54):
And they can't tell me what'sthe content of protein on that?
They can't tell me.
So mom and pop, or whoever doesthe shopping, have their tribal
knowledge of what's good for thefamily, like a dealer has tribal
knowledge of what's good for thecustomer, and here comes
(21:16):
Reynolds, here comes Amazon,they change the whole damn game,
and they don't need the thetraditional doesn't know what
hit them.
SPEAKER_01 (21:25):
Yeah.
SPEAKER_04 (21:26):
Whole Foods is gonna deliver in four hours.
Why does anybody go to theshopping to the grocery store
anymore?
I got other things to do, I'mtoo busy.
Let me spend some time with myfamily.
It's a real shift, Nick.
SPEAKER_00 (21:42):
It is, but what if you um and I want to share with
you something, and I would loveyour advice.
But what if you a manufacturerpicks their national regional
accounts?
Okay, they may have to formalliances called allied brands,
(22:03):
right?
And because they have to servethis customer, they can't leave,
they have to just pick offenough of this customer's needs,
slash share of wallet, to um tosecure that base and leave the
remainder to these large rentalcompanies.
They may have to become creativein working with people to other
(22:26):
call it the allied brands.
They may have to dig a littlebit deeper and grow a little bit
closer to offer a completeoffering to the customer.
And where I would love youradvice is we're we're just about
to come out with call it a newdata product.
And specifically, when you spendenough time staring at the same
(22:49):
thing, we're identifying the gapin the market that's not in your
customer data, and it's not indata that you may receive from
external providers.
And we we believe it's 30, it'sabout a third to 50 percent.
And when we we can score thesecustomers, we can project what
they rent, the parts and servicethey consume, and what they own,
(23:11):
what and what they're likely topurchase, whether new or used.
How did we do that?
By observing uh lots of rentaldata, right?
And lots of parts and servicedata.
And when you when you I guess Ican stop there.
SPEAKER_04 (23:31):
Uh when I say I love your the thing the thing that
you're pointing at is life cyclemanagement.
And one of the flaws that wehave is the availability and the
accuracy and the cleanliness ofdata.
So I have a question that says,I've got data at the OEM, I've
(23:54):
got data at the rentalcompanies, I've got data at the
dealers, I've got data at thecontractor level.
Why?
Why don't I have one commondatabase that everybody has
access to?
SPEAKER_00 (24:08):
Or with go with that.
Limit, take that database, youjust created it.
We magically, you just press thebutton and you magically create
it.
Only put in that database whatyou're trying to accomplish.
That's it.
And what there's so much layersof brain damage, which is this
the systems today, if you reallybroke it down all down, my
(24:30):
opinion.
There in unfortunately, there issome of the data is
inconsistent.
And what happens is it's like adrop of poison.
It will not kill you, but itwill make you sick.
And people burn, they put itoff, they say, I'm not gonna do
this, I get confused, it's notmy job.
Um, these systems, quoteunquote, can mostly talk to each
(24:52):
other.
Uh portions of it will will becalled duplicates, et cetera, et
cetera.
But I would say start over oractually forget that, scratch
that.
Create a new database, it'sRon's database, and only put
into it the targets that you'reaiming to go after.
That's it.
And watch it and secure it,treat it almost like a startup
(25:13):
within your enterprise.
An OEM could do this, they canlink it with their dealer
distribution and go aftersomething that's beyond their
national accounts, my opinion.
SPEAKER_04 (25:25):
But what what what you're describing is what the
TrueMax and CarMax and thosetypes of boys do.
And go back to Alex Schuschlerand SmartEquip when he started
it with Eric, the systems guy,and John.
He was looking at life cyclemanagement.
(25:45):
He was looking at the total costfrom birth to death.
And we've often talked, Alex andI and others.
Who owns the first machine sale?
The OEM dealer or the OEM?
The OEM if it's selling to arental company, the OEM dealer
if it's a normal customer.
(26:07):
Okay.
Who owns the second salestransaction?
That's where Ritchie Brothersgot to roast and smart equipment
and a bunch of other thingsbecause Anne's vision was uh an
auction company is gonna own thesecond machine.
But there's a flaw with that.
The the auction company then hasto provide the same services
(26:32):
that whoever sells the firstmachine does.
Example, maintenance services,extended warranty services,
field service response times,all of the happy stuff.
But today I've got sensors inalmost everything of every piece
of capital equipment anywherethat's going to tell me there's
(26:52):
a problem.
Nobody sells that.
Why don't we sell that?
SPEAKER_00 (26:58):
You're a thousand percent right.
These things are computers now,or more, you know, tilted in
that direction.
You're a thousand percentcorrect.
That what a dream that you canbe connected to this asset, and
if you can connect that asset toa customer you've already
identified as either a bestcustomer or future best
(27:19):
customer, you've secured yourbase.
And you're part of theirsolution.
You're part of helping themelevate their margins.
It's with a little bit ofplanning, uh, you could do stand
up Ron's database, put it onlyin it, the people that you're
targeting, link it with thiscall, this channel, the OEM and
(27:40):
their channel, and service theshit out of them.
And what happens is is it's it'sit's a death move because they
will succeed at a faster rateand they will bleed out their
competitors with um call itinternal bleeding.
They won't know it immediately.
You have to do it.
You have to do it.
SPEAKER_04 (28:01):
The interesting thing, I think, is the unit of
prominence is changing.
We sold a machine for a price, amillion bucks.
Not so fast.
We rented the machine for fivethousand dollars an hour.
(28:22):
Not so fast.
I didn't rent the machine, Ididn't sell the machine.
I'm gonna charge you thirtybucks a month, I'm gonna charge
you seventy-five bucks a monthfor these ten or fifteen things,
and after so many hours at somuch cost per hour, I'm gonna
change out the machine fornothing.
I'm gonna keep the price thesame.
Now we're talking about adoctor, a patient, and instead
(28:47):
of the doctor being a pullprescriber or a plumber, they'll
be interested in the health ofthe patient.
Instead of making a millionbucks selling a machine and
making three percent or fivethousand dollars an hour and
making fifty percent, they'regonna be making an inordinate
amount of money.
(29:07):
And who the heck's gonnadisplace them?
If I sell you a machine, whetherit's new, used, or whatever, and
I'm collectively charging you$3,760 a month, and I have
somebody monitoring the healthof that machine remotely, and
it's gonna give you a call orshut your machine down without
your knowledge, in a safecircumstance.
(29:31):
What's the contractor gonna wantit?
He's gonna then all of a suddenrealize, well, D, all I'm really
worried about is how much am Igonna make per hole, or how much
per mile of road, or how muchper trench.
Cost of the machine, cost the itdoesn't matter anymore.
The whole thing's gonna changeagain, Nick.
SPEAKER_00 (29:50):
You're right.
And the best entrepreneurs knowthose unit costs, meaning the
cost of digging that hole.
They do.
SPEAKER_04 (29:57):
But go back to How you got to where you're at.
There's people out there rightnow trying to figure out what
that next iteration is, andthey're going to be stubborn
like you are to get there.
And it'll be bringing new datato us that's going to change the
whole thing.
And it probably is going tochange the kind of equipment
that we have available.
(30:18):
Money more small.
If you look at mining, look atforestry.
You probably have two, maybethree manufacturers that have
the lion's share of the money inmining, Caterpillar, Kamatsu,
and Hachi.
In forestry, it's a similar typeof situation.
But now go down.
(30:40):
So that's the D10, the 575, theyou know, the obscenely large
machines at very expensiveprices.
But go down into the middle.
The mid-sized wheel loader onrubber, mid-size tractor,
mid-size crane.
And then you go down to thesmall stuff.
Oh, wait a second.
Now we've got a different game.
(31:01):
Here's Mahindra.
They might, and it's a soldproduct, they might have 15
million, 20 million dollars,they might have seven, eight
employees.
It's an old mom and pop type ofshop.
Everything's fine.
And who's going to compete withthem?
I don't see anybody out there.
So take somebody like Bobcat orsomebody like Kubota.
(31:23):
Kubota's a better example.
They're worldwide.
Under 50 horsepower, probablythe largest engine manufacturer
out there.
Maybe Yanmar would be a littlebit of competition.
Who's going to compete withthem?
They're in Bobcat skid steers.
All of a sudden, Kubota comesout with a skid steer.
Uh-oh.
See how the dynamic changes.
(31:47):
World War II starts.
There were seven tractorcompanies going into World War
II, all about the same size.
Coming out of World War II, onewas head and shoulders above
everybody else, and we know itwas Caterpillar.
You know what made thedifference?
SPEAKER_00 (32:01):
I don't.
SPEAKER_04 (32:02):
Caterpillar got the track contract on tanks.
SPEAKER_00 (32:06):
Huh.
That's interesting.
I didn't you've seen that inother industries.
SPEAKER_04 (32:12):
Oh, it's the same thing in other industries.
You got to identify where thebig problem is, concern is,
whatever.
And and the guys come back afterthe war, Corps of Engineers,
they were all trained on capmachines.
SPEAKER_00 (32:26):
Yeah.
I heard that with chocolate,with Mars chocolates, because
MMs apparently didn't melt ifyou kept them in your pocket all
day.
SPEAKER_04 (32:34):
And did you know that if you have one MM, you
have to walk a block?
SPEAKER_00 (32:40):
No kidding.
SPEAKER_04 (32:41):
Yeah, somebody actually went through that.
See, so that that's what makesthis whole thing so exciting.
Who's the one that created thequartz watch movement?
SPEAKER_00 (32:51):
I don't know.
SPEAKER_04 (32:52):
The Swiss.
But because it wasn't gears andall that fancy engineering,
etc., they didn't think much ofit.
And they showed it at a tradeshow.
And guess what?
The Swiss, the Japanese saw it.
That was the end of that.
Right.
Who has the best watch mechanismin the world?
(33:13):
Omega.
Who owns Omega?
Swatch.
SPEAKER_00 (33:20):
I didn't know.
SPEAKER_04 (33:22):
It's all over the place.
So the trick is to have thedata, to have the people that
are curious enough about it, tohave them have enough comfort
economically that they can dothis without any necessary gain
in sight.
And it's amazing what we find.
Winter wheat.
(33:44):
Invented in Saskatoon,Saskatchewan, University of
Saskatchewan.
Now we have three seasons ofwheat.
Soybeans, sorghum, all of these,every single thing you want to
talk about is the same thing.
Here in Hawaii, it's wonderfulbecause everything comes to us
from land somewhere.
It comes in by boat primarily.
(34:04):
It comes in in containers.
So there's one expensive machinethat can tow two or three boats
filled with containers that haveno power, no staff, no nothing.
(34:26):
That's interesting.
It's all so what you do withbuilt data, and the thing that's
intriguing is the number ofapostles, the number of
followers you have of builtdata's theory is small.
Fair comment?
100%.
Yep.
And how you get mass acceptance,let's say, is in this kind of
(34:52):
change environment is reallytough.
I was talking to a school thismorning, one of our centers of
excellence.
And schools have never had tosell anything.
There's been a syllabus, there'sbeen a book, a parent and a
child, a teacher and a child,they'll sit down to time this
class, this class, they'll placean order to go to the school.
(35:12):
Schools never had to sell any ofthat stuff.
This particular school has nowthree people, only three people,
five different campus locationsacross the state, three people
in marketing.
Because they've never had tosell.
(35:41):
Just that is a radical shift.
Change is really our enemy.
SPEAKER_00 (35:49):
It uh the I don't want to be a cheerleader, but
the good news is there this intechnology inflection point
called AI allows you to uh itallows you a shortcut to change.
You just have to have thecourage to dig in.
(36:11):
There is look, Charlie Mungerwould say turnarounds too hard.
And the what if these thesecompanies are looking at their
declining profitability overtime, you've talked about it
with your cat parts example,many that I've heard is in is
etched in my mind.
The good news is if you pullback and you look at the amount
(36:36):
of cost that you're carrying,whether the OEM or dealer, and
you can free up some of that,it's not it's not working for
you.
Um free up some of that capital,create Ron's database, work to a
dedicated list.
You can begin to pull some ofthose capital back back in,
restore your coffers, and keepgoing.
SPEAKER_04 (36:58):
I think the the best illustration to use on that one,
Nick, is since COVID, go to arestaurant, and it's pretty
general now, 80% plus, you'regonna get a one and a half
percent credit card charge.
The restaurant doesn't pay acredit card charge.
(37:20):
Why should the customer?
Well, because the restaurantfigured out, well, I can charge
more and the customer is notgonna get too upset.
Go on a takeout now and pay forthe bill.
You have to choose a tip or noneof the above.
(37:40):
It's all of these things, sowhere I'm going with that, we
have societal changes, one ofwhich is chips, NVIDIA and AMD,
one of which is crypto, andcrypto's got a lot of fraud in
it, a lot of risk in it, butthere's some parts of CRISPR
(38:01):
that are just clean and aregoing to be there forever.
And then you got networks, letalone electricity, let alone the
number of people that were goingto have to support the
electrical grid, let alone thatwe lose 50% of the electrical
from the source to the user, letalone fusion's coming that's
gonna replace the need for oiland gas.
(38:23):
All of this stuff's out there,and people are discontinuing
their life because it's toocomplicated.
And there's not very many peoplethat think this way.
Alex is one of them, you're oneof them.
Steve Cleggs is one of them.
Well, you're one of them.
Well, you know, I'm too old tobe considered anymore.
(38:44):
The the uh so all like this beltdata basically, you've heard my
statement.
I I talked to a lot of salespeople in sales management of
what are you gonna sell nextyear in 2026?
Well, I don't know.
I gotta wait till later in theyear.
Really?
Do you have a fixed number ofcustomers?
Yes.
Are they assigned to salesmen?
Yes.
(39:05):
Do you know what the operatingcost is for parts and service to
those machines?
Yes.
You know how many hours you'reputting on it?
Yes.
Well, how come you don't knowwhat you're gonna replace next
year?
Oh, darn, I never thought of itthat way.
That's the kind of thing that weneed to have people talking
about.
SPEAKER_00 (39:21):
Yeah.
You know, I wanted to ask youradvice when we launch this new
kind of what you can't see inthe market.
We're playing with sort ofpositioning.
One is mind the gap, right?
That could be one of them.
Another one could be uh for asales guy, it could be the no
smoking sign that says no leads.
Um, we it could be you know,stop digging for your data, or
(39:44):
it could be market share in yourpocket.
I would welcome what you thinkwould what would resonate to get
people's attention.
What I would make a very, verystrong argument about is there
their systems and the data thatthey're using is not serving
them.
The they're inferior.
In my opinion, there well, youcan start with the end.
(40:05):
If you're getting inferiorresults, back up from it and
say, what what can I dodifferently uh tomorrow?
Go go go more deeply.
SPEAKER_04 (40:17):
The the leadership, and that's from supervisors up,
of any business in ourindustries, the data they're
dealing with is 30, 60 days old.
100%.
Why?
Why don't we get this stuffevery day?
SPEAKER_00 (40:38):
Well, 90 a significant portion of it from
various third parties is ummodeled.
SPEAKER_04 (40:47):
There you go.
Okay, so let's stay with thatword.
No, let's stay with that word.
We're using a model.
And I'm at the counter in aparts department, in a car
dealership, in a marina, in ahouse builder.
(41:12):
The stuff that I'm dealing withis too old.
But I'm not prepared andunderstanding enough of what the
data means for me to be able todraw a conclusion.
I have to rely on somebody elseto do it.
There's nobody out there that Ican look to because I don't know
Nick.
I don't know his competitors,and they're not there.
(41:32):
And you look at it in medicine,it's the same.
In repairing cars, it's thesame.
Try and be a woman going into anautomotive repair shop versus a
man.
There's market segmentation foryou.
Yeah.
Um, try and be somebody who'sknowledgeable on health and goes
(41:54):
to a doctor and is told to takethese pills.
You out of your mind.
I'm not going to take thosethings.
Do you know what theconsequence?
You know what the side effectsare?
Everything is going to come backto how do we get the knowledge?
Where do we go?
Google isn't doing it anymore.
Copilot isn't doing it, Geminiisn't doing it.
Oscar, all these little namesthat we're coming up with for
(42:16):
people to ask questions of,where do they get the answers?
SPEAKER_00 (42:20):
Well, you uh a common theme I hear from in when
I either read or listen topodcasts on autobiographies or
biography is bad boys move insilence.
And if you're using the samesystems and the same external
data sets that every competitoris using, and a lot of these
people do, they sell to you andthe person on every corner, your
(42:43):
competitor on every corner, thenyou don't have an advantage.
And I would say challenge everyinternal cost that you have and
move in silence.
SPEAKER_04 (42:55):
Stay this stay there for a second because I agree
with you 100%.
I think we're coming into a newage where it's not going to be
that everybody might have thesame tools.
I'm going to call it tools tomake it more generic.
But the person who uses thosetools is going to be the
(43:15):
differentiator.
We haven't had that in societyfor decades, if not millennia,
where the person, the individualthat's sitting in front of the
customer, now we're going backto Steve and his buyer and
seller, and we're taking all therest of the noise away.
So you have something I want tobuy.
(43:40):
And there's nobody other thanyou and I involved in that.
So, salesman, equipmentsalesman, black book.
Then it goes to CRM.
CRM came in not to help thesalesman, but to have the sales
manager be able to manage howmany calls the salesman was
making.
SPEAKER_00 (43:58):
Or the illusion.
SPEAKER_04 (44:00):
Exactly.
And then here comes Salesforce.
And now I've got another wrinklebecause your database as a
dealership in my black book,your database in my CRM, and
your database in sales, they'reall different.
They have different measures,they have different communicate,
they have different addresses,for instance.
(44:21):
And then we get something likeEDA, Equipment Data Associates,
that starts tracking everything,every machine that's financed.
Now, how the heck does the nameget put into the file?
How do I match names acrossthree or four databases?
And that's what we're dealingwith today.
SPEAKER_00 (44:37):
Yeah.
Or what if a company can't findit?
The bigger the company, uh, asyou know, the bigger the
company, the less likely eitherit's not necessarily that
they're less likely to finance.
It means it's less, it's hardmuch harder to find in a state
filing um because of corporaterevolvers and securitization and
dot dot dot.
(44:58):
So, or multiple tax structures.
And you you're the data can bevery, very good at the low end.
That's the 80% of businessesthat constantly turn over.
So just think that through.
You have very good data in theworst segment of the fucking,
pardon my language, of themarket.
And imagine the brain damage itcauses when that's when you
(45:21):
don't know that.
So you spend an enormous amountof time, uh 80% of your time
chasing the 80% of the companiesthat don't matter.
And but you don't know that.
You don't know it.
What that leads to is fights,disappointments, turnover,
expense, lost structure,turnarounds, crisis management,
(45:46):
bankruptcies, dot, dot, dot,dot, dot.
SPEAKER_04 (45:49):
Frustration, ulcers, heart attacks, strokes.
It's not good.
It's not it it hurts people.
It you know, one of the I don'tknow how to characterize this,
but the last couple of weeks,you know, I read like an idiot.
But one of the things that gotmy attention the last couple of
weeks is paradoxes, and methinking that it is more
(46:12):
important today than ever beforethat I can keep in my mind
completely oppos opposingpositions at the same time and
be productive.
Because I think that's whatwe're conduct we're we're
confronting today.
My car is consuming too muchgas.
(46:33):
I haven't had it maintained forthree months.
My tires are wearing out.
I haven't had them balanced andaligned in six months.
Not that it's 110 degreesoutside.
Not that I didn't warm up theengine when I started.
(46:55):
So all of these things, and likeand we know this stuff.
My my Subaru and I I kinda likethis little thing.
There's a light on my dashboard.
Until that light goes away, inother words, the RPM's down, the
temperature of the oil, andeverything else is back to the
right place, then I can start.
And I've done that since I ownedthe damn car.
(47:16):
My wife had an A6.
She's had 12 years, 41,000miles.
She never did that kind ofthing.
But she didn't put enough mileson it to cause a problem.
If you're gonna drive at 80miles an hour, you better ought
to have the right fluids and youbetter ought to have the right
(47:38):
temperature and you better oughtto have the right filtration, or
you're gonna have trouble.
We know all this stuff, but wedon't act on it.
And we're getting to the pointthat the prime product is almost
too expensive, except fortelevisions.
Yeah, they're getting cheaper.
SPEAKER_00 (47:57):
If we go back to working from a defined list,
it's it's not that hard.
What's hard is count to 10,right?
SPEAKER_04 (48:04):
And I love you, man.
Because that's really what it'sabout, isn't it?
It's basically blocking andtackling.
SPEAKER_00 (48:10):
Meaning you could multiply 10 times blank, right?
10 times dealer, 10 timessalesperson, blah, blah, blah.
But when you're marketing to adefined list, you're now looking
at the holistic relationshipwith the customer, and you're
looking at you're making grossmargin dollar decisions, not
gross margin percent.
And the I think what OEMs coulddo, uh, there, you know, look,
(48:31):
who am I?
If and you know more than I do.
I I hope, God willing, they'redoing there's some great people
in all these companies.
They're probably doing it.
And if they're not, we would, Iwould hope, I'm sure you would
hope, at this point in time,when you you can get root rid
yourselves of legacy systems andlegacy behaviors.
(48:52):
You didn't have a choice before.
You had to install it and workits way.
You can now jump over thesesystems.
Um, I would say considerstarting a little piece of your
company, carve it out, call itspecial forces to begin to chip
away at uh impending doom.
You said it, the paradox.
You can operate.
SPEAKER_04 (49:12):
That's extremely I um lost the sound, so bear with
me a second.
Something happened here that uhI have to adjust to.
I can hear you though.
SPEAKER_03 (49:30):
Okay, that's what it was.
SPEAKER_00 (49:37):
Go ahead, and I went um I would say, you know, I mean
I to I'm being uh forgive me forbeing on the soapbox, is no
matter what you the I you know,you have an amazing uh
reputation, uh a voice, you arethe voice of the industry to me,
(50:02):
and to many, is your idea ofcreating the segregated database
and only putting into it thefish that you want to cater to.
Watch what happens and form, goconsider doing new things to
call it, manage those names thatyou're going to go secure to
(50:24):
secure your company's future.
It it's uh as Buffett says, ifyou're in a chronically leaking
boat, your time and energy isbetter spent switching boats
than plugging bolts.
I can only imagine if you're theCEO of one of these OEMs, how
difficult it is that you've gotto keep your constituents happy
(50:47):
while you make this hot sink andbefore you run out of energy and
retire.
Um broadly speaking, I would saycompanies can raise their
standards and they can raisetheir standards one name at a
time.
SPEAKER_04 (51:02):
Yeah.
Yeah, I I I I I agree.
I agree.
SPEAKER_00 (51:07):
And I would welcome your advice on call it as we f
provide this uh data set thatsays what you rent, the parts
and services you consume, yournew and used consumption.
Would welcome your advice abouthow to position that to I don't
want to say get people'sattention, but make them aware
(51:28):
of the part raise theirstandards.
Yeah that seven.
SPEAKER_04 (51:34):
Yeah, no, I agree with you, but how how you how
you do that is tricky.
SPEAKER_00 (51:44):
You agree?
It is tricky.
I think it starts with Volvoconstruction equipment, Volvo
AB, actually, I think did a verygood job in starting Volvo
Rentz.
They I was blessed to work uhfor Volvo Rentz, and they
segregated this division andprotected it and kept it away
(52:04):
from um a very good company, inmy opinion, that was just run
very differently.
And I'm not suggesting um VolvoRentz wasn't you know a gold
menor Olympic Olympic athlete orgold medal winner um at the
Olympics, but it had a muchhigher chance of succeeding or
(52:28):
call it change management thanit would have had it been a
subsidiary, you know, or managedby the parent.
SPEAKER_04 (52:36):
Yeah.
Yeah.
You know, this this whole thingof change and and artificial
intelligence and data drivingus.
Um all of this leads us to apretty dangerous time, I'm gonna
(52:59):
say.
(53:29):
So it's the consequence for usis nothing.
The consequence for the nextgeneration is huge.
So I'm talking with a companyyesterday, and there's three
people that they've identifiedas the replacement of the
(53:50):
current executive.
And they're gonna make thetransition somewhere in the next
six to eight years.
And I said, that's terrific.
So you're gonna end up with anew boss.
Yeah, it's gonna be reallyexciting.
I said, Well, how expensive isit gonna be for the two guys
that don't get the job to leavefor you?
Well, they're not gonna leave,really.
(54:11):
Their future is taken awaybecause the the guy who's taking
the job is gonna block them forthe rest of their career.
You think they're gonna stay?
So we get all kinds of changesin how business operates.
Then we we started collectingsales tax now on education
(54:33):
products, which drives me crazy.
And it's gonna cause us to startthinking about different things.
For instance, in the EuropeanUnion, it's 145 bucks per
client.
If you're non-EU, it's 445.
So obviously my pricing moduleis gonna have to change
altogether.
I said, no, no, I'm not gonnachange the pricing module.
(54:55):
I'm gonna have a membership.
You want to join and you're inthe EU, it's 100 bucks.
You want to join and you're inthe non-EU, it's 500 bucks.
Or some such thing, because Idon't want to just continue to
do what we've always done.
I have to look at it in withfresh eyes.
I don't know many people arelooking at their business with
fresh eyes.
I'd almost want to have aweekend getaway with whomever
(55:19):
the players are, sit at a tableand have it out.
What do we want to change in thenext 12 months?
What's our biggest risk in thenext 12 months?
And it's not what you're lookingat, it's to the core of their
business, how they operate.
SPEAKER_00 (55:33):
Yeah.
I would agree.
And I think that is, you know,call a there's a few people
equipped to help them do thatdiagnostic from top to bottom.
You're one of them.
Steve Clegg.
Um, I could see, you know, aLarry Kay, you know, meaning a a
(55:53):
Kasky, a Schussler, right?
There's a small group.
Frankly, that scripts team waspretty solid, as you, in my
opinion.
Yeah.
Scripts International.
And you, you know, I think Ishared with you, of course, I
had to read something to knowthat you were at the day zero of
smart equipment.
And I was like, of course, youknow, it's where I didn't, you
(56:15):
know, you didn't expect to see aname.
Uh I mean, it was just a it'slike a great end, great
beginning of a book um that youjust didn't know for the first
chapter.
So yeah, I would uh I wouldthink you're right.
Put those people in the room,bring in your special forces
team, and start and fund it.
(56:36):
And start small.
And those those small moves canbe incredibly powerful.
SPEAKER_04 (56:42):
Well, no question about it.
So there's a project for you.
You sell the services, you'regonna meet six o'clock on Friday
night, you're gonna have dinner,you're gonna explain what we're
gonna do, and then Saturday,Sunday, we're gonna meet all
day, beat each other up.
Sunday, we're gonna have areport, we're gonna have a to-do
list, and everybody's in theroom, they got their
(57:03):
fingerprints all over it.
You want to do it, you want todo it, you want to do it or not?
And every quarter have acheckpoint.
And get that kind of embedded inour thinking, in our management.
We is a heck of a lot morepowerful than I or me.
SPEAKER_00 (57:25):
Asking me to kind of be the yeah, absolutely.
You know, I the answer is yes,as you as you say.
SPEAKER_04 (57:32):
Yeah, that's right.
SPEAKER_00 (57:34):
I would be honored to do that.
And to you know, if we called itDARPA, right?
It's we peel off this private uhintelligence unit and we just
stay quiet and tight.
SPEAKER_04 (57:46):
And well, you've heard you've heard me use the
term virtual garage, and you'veheard the term STX, which is
what we're calling.
This is what Steve and I arecalling the virtual garage.
What this leads to is we'll havepeople that are specialists that
can go into a company thatrecognizes they have a need and
(58:09):
facilitate, not do, facilitate.
Because I think you've heard mecharacterize this.
We've got people that arestrategic thinkers, we've got
people that are doers, and we'vegot people that are
implementers.
There's probably 75 to 80percent of the workforce that's
doers.
Strategic, that's theory, so Ican get that from school.
(58:32):
There might be five or tenpercent of the population that
do that.
The real trick is who's the guythat's gonna do and the gal
that's gonna do theimplementation.
Because those dudes and dudets,they got real skills, baby.
Yeah, you're right.
And they're rare skills.
SPEAKER_00 (58:46):
Yeah.
Yeah, it takes a lot of energyto, and it is rare.
You have to be, it takes a veryrare skill set, and it's and it
which also includes a lot ofenergy to do change management.
SPEAKER_04 (58:58):
So let's wrap this up because we've been about an
hour.
What what do you think we'vegained out of this?
Have we exposed what we wantedto expose?
SPEAKER_00 (59:07):
I gained a call to action.
I I had one other note to toshare, which is as companies
reevaluate, starting with theend in mind, right?
It simplest.
I had a great boss, uh, NationsRyan, who would say that it
wasn't his, he didn't coin theterm.
Begin with the end in mind andback out of it and start with
(59:31):
this.
Ron, I will, I pledge to you, Iwill do that.
We'll you know, work as call anassistant to form this group.
SPEAKER_04 (59:39):
What what your guy, what your guy said should be,
should be, every single leader.
Where are we going?
Christopher Columbus, I'm gonnafind the new world.
Where are we going?
I'm gonna find the new world.
How am I gonna get there?
I have no idea.
SPEAKER_00 (59:55):
You know, it's interesting.
I'll just tell you with thisgentleman.
I'll I'll kind of omit his name.
He he went from uh being anation's rent executive to I'm
gonna skip a step, became apartner at a major private
equity firm that has a verystrong opera, you know, they're
operators, truly.
I mean that with sincerity, notjust a marketing tag.
(01:00:16):
He they owned a company for manyyears that kind of went nowhere.
He was the operating partnerresponsible for one of them.
And he became its CEO.
And one of the strategies heused, um, you know, different
layers of strategy, typical partPorter's five forces.
Um, he focused them on top 200accounts because he knew that
(01:00:40):
big plants, people that ownplants, own other sites, right?
Or big companies own multiplesites, think ExxonMobil, think
uh Facebook data centers, dot,dot, dot.
We are only focusing on thesenational accounts.
He secured his position there.
He um gained leverage over itssuppliers, which is the same
(01:01:03):
counter argument he makes withthe top 200 accounts.
He says top 200 accounts, we'llcut you a better deal because
we're getting your businessacross the nation.
We'll give you better servicebecause but he accumulated these
nickels and dimes, and he justsold a services business to one
of the largest companies,private equity funds in the
(01:01:24):
world for 19 times IBITA, right?
And there's no D in thatbusiness.
So it's nuts.
And this transformationhappened, and I remember going
there and sitting with theinterim CEO about five years
ago, until this gentleman becameCEO, which is probably three
(01:01:44):
years ago.
This was an investment.
I'm now I'm speaking in my Wackoworld, that they were probably
saying, shit, how are we gonnaget out of it?
So in three years, transformsomething that may have been
sold at you know, whatever, 5xbecause it was worthy of that.
Sold it for 19 times.
SPEAKER_03 (01:02:05):
So stay there, stay there, and there's one man.
SPEAKER_04 (01:02:09):
Charlie Munger, there's one man or woman, yeah,
Warren Buffett.
They're rare entities, they'rerare individuals.
The trick is for society, forus, you and I, to find them
before they become them and helpthem get there.
We're not mentoring people likewe used to, we're not coaching
(01:02:31):
people like we used to, we'renot allowing people to fail like
we need to.
If you don't make mistakes,you're not learning.
And that's why I call thecompany Learning Without Scars.
I've got the scars, baby.
I promise you.
Other people don't need to getthem because I've had them.
Nick, it's a pleasure.
And I want to do this again andkeep going because I hope people
(01:02:53):
are paying attention and I hopethis provokes thinking, because
that's what we're trying to do.
SPEAKER_00 (01:02:57):
And I'm gonna tell ask Helen if I if I can find an
inexpensive flight from SanFrancisco to you.
I'm gonna do it.
SPEAKER_04 (01:03:05):
So you're welcome to come, buddy.
SPEAKER_00 (01:03:08):
It will be the end of next week.
SPEAKER_04 (01:03:10):
That's okay, whenever it is.
I look forward to it.
I hope and thank you very much,Nick, and thank everybody who's
listened to this.
And we hope you turn in foranother candidate conversation
that provokes your thinking.
Mahallo.
Aloha.
And welcome to another candidconversation.
Today we're joined by NickMaverick.
And it's going to be aninteresting discussion.
Nick has a business called BuiltData.
He's been involved with therecent AI podcasts we've had
with Venke and others.
And today I want to focus on hisstrength, his focus, which is
(00:28):
data.
And he looks at data in waysthat most of us don't have never
thought of.
But also how that applies toartificial intelligence.
So with that as the opening, andthat's a pretty damn wide field.
Nick, good to see you, youngman.
SPEAKER_00 (00:47):
Ron, always a blessing to see you.
Did I give you enough ground tocover?
And I may, I have to look atflights.
Um make them end of next week.
That's okay.
I'm here.
SPEAKER_04 (01:00):
But so how do you how well?
First of all, how long has builtdata been in existence?
SPEAKER_00 (01:10):
Good question.
So uh I'll answer it two ways.
One is built data to answer yourquestion specifically.
We've been a call incorporatedfor a year and a half.
Prior to that, uh, I operated asData Co and for a couple years.
And the foundation of themethodology, and happy to share
(01:35):
that.
We I hope people do this ontheir own, um, was many, many,
many years ago, uh, 1998, when Iworked for one of the
consolidators that competed withUnited head-to-head called
Nations Rent.
And Nations Rent uh had extremecustomer concentrations and it
(01:56):
just shocked me.
Um, Nations Rent, 3% of itscustomers did 62% of the
business.
It was 15 people per store.
And it uh was just astounding tome.
And if you lost five of thosecustomers, your acquisition,
since the company grew throughacquisition, the acquisition was
(02:18):
no longer a creative.
And nation's rent gotover-leveraged.
Um, ultimately went into chapter11, restructured, got rid of a
ton of debt, and was sold toSunbelt at quite a handsome
return for the new owners, whichwas a very large hedge fund and
some talented people.
But that taught me the a bunchof things.
(02:41):
It's not only a concentration ofdata, but it was if if you you
it the notion people talkrelationship, if you treat your
customer very, very well, theykeep coming back again and again
and again.
And that's how you end up withthese concentrations.
And it's actually a very, verygood thing to have uh extreme
(03:04):
concentrations, as Buffett says,you know, too much of a good
thing can be wonderful.
SPEAKER_02 (03:09):
So the other side of that concentration, it is a
blessing of good things, likeBuffett said.
But you lose a lot of customers.
SPEAKER_04 (03:28):
And the construction equipment dealers late to the
game in rental didn't understandthat concentration piece at all.
Didn't it was outside theirtheir thinking pattern, their
comfort zone.
When you started with nations,and then for a while you worked
(03:53):
with smart equipment with Alex,right?
Alex Hirschler?
Yeah, yeah.
Sunbelt I don't know that thesenumbers still hold or pretty
close.
I think Sunbelt's return onassets is fifty percent.
So you have ten million dollarsworth of assets in the rental
fleet, and you're gonna spin offfive million dollars of profit.
(04:15):
That's to an equipment dealerthat makes two to five percent.
That's obscene.
They don't know how to deal withthat.
Yeah.
So from that is the beginning,and the concentration and the
retention being the drivers, howdid you how did you start trying
(04:37):
to slice and dice the data?
SPEAKER_00 (04:43):
Uh good question.
You know, I'll do my best toanswer because so many things
kind of rush into my head.
There's a number of ways uh welook at data, and I'm gonna say
our jobs are relatively easy.
The hard work is done by therental company or the dealer,
specifically by the salesperson,and to stay in the path of
(05:05):
growth.
And we we look at a few things.
One is we look at the behavior,uh, which is just think of it as
a bunch of photographs andputting them together, as Steve
Clegg says, the transaction.
And Steve is so brilliant that,and you're brilliant, and that
the transaction, which is thebehavior of what I did today and
(05:28):
yesterday, and the last month,and the month or in the month
before, matters incredibly so.
So we look at the behavioralside of math, is the fancy word,
um, of what happened.
We look at the concentrations inthe market to point people
towards desirable customers,meaning you mentioned um
(05:51):
customers do turnover.
But when you break down inconstruction SICs, some people
prefer the NAICS codes, about uh83% of the companies have less
than 10 employees, and theycount for 23% of all
construction segments orbusinesses.
SPEAKER_02 (06:12):
So say that again.
83%.
SPEAKER_00 (06:15):
83% of the companies is the bottom end.
I'm gonna say the lowest value.
That doesn't mean they'revaluable customers, but they're
not gonna drive um they're notyou're not you're gonna have a
very hard time prospering offthis segment.
So 83% of the business money.
Correct.
Yeah.
Have less than 10 employees, andthey account for 23% of the
(06:43):
number of employees.
And so that you can look at thatnumber of employees is a proxy
of their of their capability ortheir their wealth, like a
better word.
And there's an extreme amount ofturnover uh in that one to 10
category segment.
Those businesses come and go.
(07:04):
What we aim to do is pointpeople towards the more secure
companies, uh, generally 20 plusemployees.
It isn't does also include 10 to19 employees, and the ones that
are working in the highestgrowth areas.
So a dealer or a rental company,or an OEM for that matter, can
(07:27):
secure their business with themost valuable customers
strategically.
As opposed to, um, granted, asalesperson executes a
transaction.
The a lot of sales focus andmarketing focus is very
transaction-oriented.
Now, I know that recognizethat's a contradiction.
(07:47):
They're trying the I've got tosell something today to achieve
my market share goal.
I've got to sell something orrent something today to achieve
my quota.
And then they scatter all overthe market to achieve that
outcome, but it may not bestrategic.
SPEAKER_04 (08:02):
So stop there for a second.
SPEAKER_00 (08:03):
Yes.
SPEAKER_04 (08:05):
For 27 years, you've been digging around in data.
You've been analyzing things,and 27 years later, you've got
conclusions that stand the testof time.
But they didn't come in thefirst year, first three years,
five years, which is why mostpeople don't want to walk
(08:28):
through the door that you did.
What triggered or why or how, orwhat is it about your
personality that makes you socurious?
Doesn't matter how many timesyou don't get the answer, you're
going to keep on digging.
Because that's what's missing inalmost all of us, isn't it?
SPEAKER_00 (08:48):
Yeah, I wish I had the Bill Burley.
Well, yeah, it just it's been alife, yeah, a life.
I I was watching, uh, I don'tknow if you've ever seen the
Bill Burley uh video aboutrunning running down a dream.
Uh I'll send it to you.
But he just is publishing abook.
And I would say the youngerversion of me stuff had was
(09:10):
blessed with a bunch ofdifferent experiences.
And the teachers like AlecSchussler, um, Don O'Neill, who
great entrepreneur who reallyfound was the foundation of call
it my realization of howimportant integrity is and
caring for people is John Kaske.
John Kaske, absolutely very goodfriends with Don, Don
(09:32):
Charbonnet, um, McKay.
There's others.
And what about uh when I was inmy very early 40s, I turned 41.
I was working at Volvo Rents andfor almost 10 years, and I
realized I had become, I alwaysthought of myself as an
entrepreneur, and I and I Irealized I was quote unquote a
(09:53):
corporate guy.
And the so I left the industry.
I said, I'm gonna had enoughcall it uh accumulated to uh not
have to work next week, and Ileft the industry for um
probably eight years and wentand did other things.
(10:14):
A few years ago, I did some uhwork for the owner of a large
dealer enterprise.
It happened to be a caterpillardealer, and it was very well um
resourced.
They had more data, they hadsystems up the wazoo,
subscriptions, people in all theseats, but they quote unquote
(10:37):
couldn't get their data.
And I you know have to kind ofblind some of this information,
but they that I think they hadlost, uh, my opinion, they had
so many strengths, but they hadlost awareness of what the how
they were succeeding.
So a lot of what I learned earlyon was proportionality, and the
(11:00):
proportionality is ineverything.
It's if you flip a coin, ofcourse, you're you have a very
even distribution.
But you if you can look at andunderstand, get on the scale,
understand the proportionalityof your most important customers
and your least importance.
Now you can put a stake in theground and you can say, How am I
going to go strategically?
(11:20):
And if you don't do that, yourresults can be quite volatile.
For the industry as a whole,there's a huge opportunity, as
you know, with the amount ofcapital that's stuck in the
supply chain, meaning a dealerplaces an order, a manufacturer,
manufacturer, ships it to thedealer, floor plans it, it may
sell, it may not, it sitsaround, it ultimately gets
(11:41):
discounted and rinse and repeat.
And there's an incredible amountof capital that's trapped in
that supply chain.
Our vision is if we can providea common data set to the
manufacturer and theirdistribution, they'll be more
successful.
There's no reason this industryshould have 2% net income
margins, um, or a dealer shouldhave 10% gross margins.
SPEAKER_04 (12:05):
It's not what we're seeing recently, though, Nick,
is about every 20 years we'relosing half of the people in the
supply chain.
SPEAKER_03 (12:15):
Yeah.
SPEAKER_04 (12:16):
Again, part of that is the low return they're
getting, part of that is theexcessively high investment
that's required.
Part of that is the process andmethodology they've been using,
which is, I think, to somedegree why leadership sticks
their hands up in the air andsays, Well, we'll just continue
what we've always done, becauseeverything's okay.
(12:38):
My sales number's going up.
And if it isn't going up, whenyou're dealing with only half
the number of competitors, yougot a bigger problem, you know.
But they didn't, they don't knowthat because they're not data
driven, which I think everythingthat you talk of, think of, deal
with, and every decision thatany of us should make should be
(13:00):
data driven.
Without it, we're dead.
SPEAKER_00 (13:06):
I I mean it it you might as well wear a blindfold.
It's in it's unf the outcome isunfortunately when businesses
don't do well, it destroysfamilies.
It it really does.
And it's from a humanitystandpoint, it's it's a shame.
(13:27):
It it's completely preventable.
And you there's a few moremarket forces today, right?
Well, by the size of the threelargest companies, um, United,
Sunbelt, and Herc, very wellrun.
How they did it, I get kudos tothem.
It's very difficult to pull offwhat they did.
(13:50):
But they now have extreme marketpower.
Uh, they can open and closefactories.
And so if you're a dealer, youthe rate of shift, as you know,
from ownership to rental ischanging dramatically.
And what was general rental, nowthey're in specialty rental.
And the amount of used equipmentthat they pump into the market
(14:12):
um quarterly is massive.
And you see that in the numbers.
And if you're a dealer, what youyou may want to consider were a
rental company is the employeesof big companies generally
aren't happy, right?
They don't feel valued, theyfeel as a number.
So, how can you play into thatinherent weakness?
(14:36):
And I mean, if they're not truebelievers, and they're not,
because it's a big company, hasnothing to do with the pedigree
of who these companies are, inmy opinion.
Then the the independent, thedealer, the locally owned
businesses, the locally ownedrental companies, the way they
can play against those companiesis by securing the customers
(14:58):
through better relationships.
Now, I'm being a littlesimplistic because of course it
it breaks down to advantagesthat those big companies have,
like incredible buying power.
SPEAKER_04 (15:08):
Um the the thing, and let me interrupt for a
second, the thing that thatfocuses on is that crazy word
loyalty.
Yeah.
And almost everything that wehave in society is saying to us
loyalty doesn't exist anymore.
And that's from marriages,that's from all kinds of
different directions.
(15:29):
I believe our activity, ouractions have caused loyalty to
become less important.
We went to voicemail, nobodyanswers the phone anymore.
We did the customer service fromIndia, and no disrespect to
India or Malaysia or wherever,but it wasn't local.
(15:50):
Do we not have enough peoplehere?
Oh.
And then in the last this year,it's kind of interesting.
We're suffering now because wedon't have enough employees out
there because we're getting ridof the illegal aliens.
They were performing a validfunction in society, but Ronald
Reagan and Tip O'Neill back in1980 decided that they didn't
(16:13):
want the visitors' visa toexist, the temporary visa for
the agricultural workers, forinstance.
The consequences of regulationsand governments and is is really
amazing.
And the only way you can fightthat, it appears, is like you
(16:33):
just said.
I've got Sunbelt, I've gotUnited, I've got Herc.
And they have an inordinateamount of power.
Like you said, they can bury amanufacturer.
Unbelievable.
Yeah.
And that's not just in ourindustry, this is generic across
regions.
It's in the paper business, it'sin the mining business.
(16:54):
You know, one little side, andit's a little weird.
Do you know who the largestforestry company is in America?
SPEAKER_00 (17:00):
I don't.
SPEAKER_04 (17:01):
Warehouser.
And that's three guys thatstarted in Minnesota.
You know what the largestforestry company is in Canada?
SPEAKER_00 (17:11):
I do not.
SPEAKER_04 (17:12):
McMillan Blowdell, British Columbia.
So in Canada, the forestrycompanies are given trees to
plant.
So the part of the forest issubsidized, according to
America, because we don't dothat.
So the America puts a tariff onit to make it equal.
(17:35):
You know who owns McMillanBlowdown?
Warhauser.
So they got both sides of theborder.
It doesn't matter to them whatthe governments do.
And that's the same thing withthose three rental companies.
It doesn't matter what theregulators want to do.
They've got enough stroke,enough power, they can overcome
(17:55):
damn near every obstacle that'sout there.
If you don't deal with data,you're dead.
SPEAKER_00 (18:03):
Like you said, you're blindfolded.
You're blindfolded.
And you if you flip it around,um, they can win.
They can.
I mean, it it's uh in themilitary, it would be special
forces backed by greatintelligence.
You need a small team.
You cannot get in a land war.
(18:23):
It this can be one, but you youcan you have to take it in
layers because it's intimidatingotherwise.
Meaning, an OEM with theirdealer operating off of
literally one name, same row ofdata.
Some of the biggest OEMs, as youknow, have national accounts.
Regional accounts are tough forthem to execute.
(18:44):
That's that's not that's notright.
And it just requiresorganization.
So the they could work down fromnational accounts to regional
accounts and be specific with abrand.
And so they can want to securetheir business, working from
national accounts to regionalaccounts by working off a list
(19:06):
that's shared with the dealerand using systems, not legacy
systems, that can jump over, youcould argue it'd call it AI, but
just call them flexible systemsthat link the OEM to the dealer
on a common set data set withthese regional customers and
provide them the level ofsupport to guarantee uptime.
(19:29):
It just requires a little bitmore imagination.
And to the extent they leavethat to and they just say, no,
it's not a national account,that's not cool.
Um, United, you know who hasgreat national account programs?
United, Sunbell, phenomenal.
Um, I would again argue thatthose people don't feel
(19:54):
completely valued.
Maybe they're not fullysupported.
Nothing against those companies.
It's by virtue of being one ofthe tens of thousands of
employees that you you couldbeat them through better
relationships, meaning a betterunderstanding of what you're
trying to accomplish.
SPEAKER_04 (20:10):
So what you're you're describing really is the
competition to a shoppingcenter, to a mall.
It's specialized services,specialized products with people
that know what they're doing.
You go into Walmart, uh changethat you go into Safeway, and
(20:34):
you ask for what's the specialtoday in meat.
And they'll come up withhamburger, they'll come up with
rubai, they'll come up with NewYork's, they'll come up with
pork chops, whatever the heck itmight be.
And I'm a bit of a jerk.
I say, well, why is that specialtoday?
(20:54):
And they can't tell me what'sthe content of protein on that?
They can't tell me.
So mom and pop, or whoever doesthe shopping, have their tribal
knowledge of what's good for thefamily, like a dealer has tribal
knowledge of what's good for thecustomer, and here comes
(21:16):
Reynolds, here comes Amazon,they change the whole damn game,
and they don't need the thetraditional doesn't know what
hit them.
SPEAKER_01 (21:25):
Yeah.
SPEAKER_04 (21:26):
Whole Foods is gonna deliver in four hours.
Why does anybody go to theshopping to the grocery store
anymore?
I got other things to do, I'mtoo busy.
Let me spend some time with myfamily.
It's a real shift, Nick.
SPEAKER_00 (21:42):
It is, but what if you um and I want to share with
you something, and I would loveyour advice.
But what if you a manufacturerpicks their national regional
accounts?
Okay, they may have to formalliances called allied brands,
(22:03):
right?
And because they have to servethis customer, they can't leave,
they have to just pick offenough of this customer's needs,
slash share of wallet, to um tosecure that base and leave the
remainder to these large rentalcompanies.
They may have to become creativein working with people to other
(22:26):
call it the allied brands.
They may have to dig a littlebit deeper and grow a little bit
closer to offer a completeoffering to the customer.
And where I would love youradvice is we're we're just about
to come out with call it a newdata product.
And specifically, when you spendenough time staring at the same
(22:49):
thing, we're identifying the gapin the market that's not in your
customer data, and it's not indata that you may receive from
external providers.
And we we believe it's 30, it'sabout a third to 50 percent.
And when we we can score thesecustomers, we can project what
they rent, the parts and servicethey consume, and what they own,
(23:11):
what and what they're likely topurchase, whether new or used.
How did we do that?
By observing uh lots of rentaldata, right?
And lots of parts and servicedata.
And when you when you I guess Ican stop there.
SPEAKER_04 (23:31):
Uh when I say I love your the thing the thing that
you're pointing at is life cyclemanagement.
And one of the flaws that wehave is the availability and the
accuracy and the cleanliness ofdata.
So I have a question that says,I've got data at the OEM, I've
(23:54):
got data at the rentalcompanies, I've got data at the
dealers, I've got data at thecontractor level.
Why?
Why don't I have one commondatabase that everybody has
access to?
SPEAKER_00 (24:08):
Or with go with that.
Limit, take that database, youjust created it.
We magically, you just press thebutton and you magically create
it.
Only put in that database whatyou're trying to accomplish.
That's it.
And what there's so much layersof brain damage, which is this
the systems today, if you reallybroke it down all down, my
(24:30):
opinion.
There in unfortunately, there issome of the data is
inconsistent.
And what happens is it's like adrop of poison.
It will not kill you, but itwill make you sick.
And people burn, they put itoff, they say, I'm not gonna do
this, I get confused, it's notmy job.
Um, these systems, quoteunquote, can mostly talk to each
(24:52):
other.
Uh portions of it will will becalled duplicates, et cetera, et
cetera.
But I would say start over oractually forget that, scratch
that.
Create a new database, it'sRon's database, and only put
into it the targets that you'reaiming to go after.
That's it.
And watch it and secure it,treat it almost like a startup
(25:13):
within your enterprise.
An OEM could do this, they canlink it with their dealer
distribution and go aftersomething that's beyond their
national accounts, my opinion.
SPEAKER_04 (25:25):
But what what what you're describing is what the
TrueMax and CarMax and thosetypes of boys do.
And go back to Alex Schuschlerand SmartEquip when he started
it with Eric, the systems guy,and John.
He was looking at life cyclemanagement.
(25:45):
He was looking at the total costfrom birth to death.
And we've often talked, Alex andI and others.
Who owns the first machine sale?
The OEM dealer or the OEM?
The OEM if it's selling to arental company, the OEM dealer
if it's a normal customer.
(26:07):
Okay.
Who owns the second salestransaction?
That's where Ritchie Brothersgot to roast and smart equipment
and a bunch of other thingsbecause Anne's vision was uh an
auction company is gonna own thesecond machine.
But there's a flaw with that.
The the auction company then hasto provide the same services
(26:32):
that whoever sells the firstmachine does.
Example, maintenance services,extended warranty services,
field service response times,all of the happy stuff.
But today I've got sensors inalmost everything of every piece
of capital equipment anywherethat's going to tell me there's
(26:52):
a problem.
Nobody sells that.
Why don't we sell that?
SPEAKER_00 (26:58):
You're a thousand percent right.
These things are computers now,or more, you know, tilted in
that direction.
You're a thousand percentcorrect.
That what a dream that you canbe connected to this asset, and
if you can connect that asset toa customer you've already
identified as either a bestcustomer or future best
(27:19):
customer, you've secured yourbase.
And you're part of theirsolution.
You're part of helping themelevate their margins.
It's with a little bit ofplanning, uh, you could do stand
up Ron's database, put it onlyin it, the people that you're
targeting, link it with thiscall, this channel, the OEM and
(27:40):
their channel, and service theshit out of them.
And what happens is is it's it'sit's a death move because they
will succeed at a faster rateand they will bleed out their
competitors with um call itinternal bleeding.
They won't know it immediately.
You have to do it.
You have to do it.
SPEAKER_04 (28:01):
The interesting thing, I think, is the unit of
prominence is changing.
We sold a machine for a price, amillion bucks.
Not so fast.
We rented the machine for fivethousand dollars an hour.
(28:22):
Not so fast.
I didn't rent the machine, Ididn't sell the machine.
I'm gonna charge you thirtybucks a month, I'm gonna charge
you seventy-five bucks a monthfor these ten or fifteen things,
and after so many hours at somuch cost per hour, I'm gonna
change out the machine fornothing.
I'm gonna keep the price thesame.
Now we're talking about adoctor, a patient, and instead
(28:47):
of the doctor being a pullprescriber or a plumber, they'll
be interested in the health ofthe patient.
Instead of making a millionbucks selling a machine and
making three percent or fivethousand dollars an hour and
making fifty percent, they'regonna be making an inordinate
amount of money.
(29:07):
And who the heck's gonnadisplace them?
If I sell you a machine, whetherit's new, used, or whatever, and
I'm collectively charging you$3,760 a month, and I have
somebody monitoring the healthof that machine remotely, and
it's gonna give you a call orshut your machine down without
your knowledge, in a safecircumstance.
(29:31):
What's the contractor gonna wantit?
He's gonna then all of a suddenrealize, well, D, all I'm really
worried about is how much am Igonna make per hole, or how much
per mile of road, or how muchper trench.
Cost of the machine, cost the itdoesn't matter anymore.
The whole thing's gonna changeagain, Nick.
SPEAKER_00 (29:50):
You're right.
And the best entrepreneurs knowthose unit costs, meaning the
cost of digging that hole.
They do.
SPEAKER_04 (29:57):
But go back to How you got to where you're at.
There's people out there rightnow trying to figure out what
that next iteration is, andthey're going to be stubborn
like you are to get there.
And it'll be bringing new datato us that's going to change the
whole thing.
And it probably is going tochange the kind of equipment
that we have available.
(30:18):
Money more small.
If you look at mining, look atforestry.
You probably have two, maybethree manufacturers that have
the lion's share of the money inmining, Caterpillar, Kamatsu,
and Hachi.
In forestry, it's a similar typeof situation.
But now go down.
(30:40):
So that's the D10, the 575, theyou know, the obscenely large
machines at very expensiveprices.
But go down into the middle.
The mid-sized wheel loader onrubber, mid-size tractor,
mid-size crane.
And then you go down to thesmall stuff.
Oh, wait a second.
Now we've got a different game.
(31:01):
Here's Mahindra.
They might, and it's a soldproduct, they might have 15
million, 20 million dollars,they might have seven, eight
employees.
It's an old mom and pop type ofshop.
Everything's fine.
And who's going to compete withthem?
I don't see anybody out there.
So take somebody like Bobcat orsomebody like Kubota.
(31:23):
Kubota's a better example.
They're worldwide.
Under 50 horsepower, probablythe largest engine manufacturer
out there.
Maybe Yanmar would be a littlebit of competition.
Who's going to compete withthem?
They're in Bobcat skid steers.
All of a sudden, Kubota comesout with a skid steer.
Uh-oh.
See how the dynamic changes.
(31:47):
World War II starts.
There were seven tractorcompanies going into World War
II, all about the same size.
Coming out of World War II, onewas head and shoulders above
everybody else, and we know itwas Caterpillar.
You know what made thedifference?
SPEAKER_00 (32:01):
I don't.
SPEAKER_04 (32:02):
Caterpillar got the track contract on tanks.
SPEAKER_00 (32:06):
Huh.
That's interesting.
I didn't you've seen that inother industries.
SPEAKER_04 (32:12):
Oh, it's the same thing in other industries.
You got to identify where thebig problem is, concern is,
whatever.
And and the guys come back afterthe war, Corps of Engineers,
they were all trained on capmachines.
SPEAKER_00 (32:26):
Yeah.
I heard that with chocolate,with Mars chocolates, because
MMs apparently didn't melt ifyou kept them in your pocket all
day.
SPEAKER_04 (32:34):
And did you know that if you have one MM, you
have to walk a block?
SPEAKER_00 (32:40):
No kidding.
SPEAKER_04 (32:41):
Yeah, somebody actually went through that.
See, so that that's what makesthis whole thing so exciting.
Who's the one that created thequartz watch movement?
SPEAKER_00 (32:51):
I don't know.
SPEAKER_04 (32:52):
The Swiss.
But because it wasn't gears andall that fancy engineering,
etc., they didn't think much ofit.
And they showed it at a tradeshow.
And guess what?
The Swiss, the Japanese saw it.
That was the end of that.
Right.
Who has the best watch mechanismin the world?
(33:13):
Omega.
Who owns Omega?
Swatch.
SPEAKER_00 (33:20):
I didn't know.
SPEAKER_04 (33:22):
It's all over the place.
So the trick is to have thedata, to have the people that
are curious enough about it, tohave them have enough comfort
economically that they can dothis without any necessary gain
in sight.
And it's amazing what we find.
Winter wheat.
(33:44):
Invented in Saskatoon,Saskatchewan, University of
Saskatchewan.
Now we have three seasons ofwheat.
Soybeans, sorghum, all of these,every single thing you want to
talk about is the same thing.
Here in Hawaii, it's wonderfulbecause everything comes to us
from land somewhere.
It comes in by boat primarily.
(34:04):
It comes in in containers.
So there's one expensive machinethat can tow two or three boats
filled with containers that haveno power, no staff, no nothing.
(34:26):
That's interesting.
It's all so what you do withbuilt data, and the thing that's
intriguing is the number ofapostles, the number of
followers you have of builtdata's theory is small.
Fair comment?
100%.
Yep.
And how you get mass acceptance,let's say, is in this kind of
(34:52):
change environment is reallytough.
I was talking to a school thismorning, one of our centers of
excellence.
And schools have never had tosell anything.
There's been a syllabus, there'sbeen a book, a parent and a
child, a teacher and a child,they'll sit down to time this
class, this class, they'll placean order to go to the school.
(35:12):
Schools never had to sell any ofthat stuff.
This particular school has nowthree people, only three people,
five different campus locationsacross the state, three people
in marketing.
Because they've never had tosell.
(35:41):
Just that is a radical shift.
Change is really our enemy.
SPEAKER_00 (35:49):
It uh the I don't want to be a cheerleader, but
the good news is there this intechnology inflection point
called AI allows you to uh itallows you a shortcut to change.
You just have to have thecourage to dig in.
(36:11):
There is look, Charlie Mungerwould say turnarounds too hard.
And the what if these thesecompanies are looking at their
declining profitability overtime, you've talked about it
with your cat parts example,many that I've heard is in is
etched in my mind.
The good news is if you pullback and you look at the amount
(36:36):
of cost that you're carrying,whether the OEM or dealer, and
you can free up some of that,it's not it's not working for
you.
Um free up some of that capital,create Ron's database, work to a
dedicated list.
You can begin to pull some ofthose capital back back in,
restore your coffers, and keepgoing.
SPEAKER_04 (36:58):
I think the the best illustration to use on that one,
Nick, is since COVID, go to arestaurant, and it's pretty
general now, 80% plus, you'regonna get a one and a half
percent credit card charge.
The restaurant doesn't pay acredit card charge.
(37:20):
Why should the customer?
Well, because the restaurantfigured out, well, I can charge
more and the customer is notgonna get too upset.
Go on a takeout now and pay forthe bill.
You have to choose a tip or noneof the above.
(37:40):
It's all of these things, sowhere I'm going with that, we
have societal changes, one ofwhich is chips, NVIDIA and AMD,
one of which is crypto, andcrypto's got a lot of fraud in
it, a lot of risk in it, butthere's some parts of CRISPR
(38:01):
that are just clean and aregoing to be there forever.
And then you got networks, letalone electricity, let alone the
number of people that were goingto have to support the
electrical grid, let alone thatwe lose 50% of the electrical
from the source to the user, letalone fusion's coming that's
gonna replace the need for oiland gas.
(38:23):
All of this stuff's out there,and people are discontinuing
their life because it's toocomplicated.
And there's not very many peoplethat think this way.
Alex is one of them, you're oneof them.
Steve Cleggs is one of them.
Well, you're one of them.
Well, you know, I'm too old tobe considered anymore.
(38:44):
The the uh so all like this beltdata basically, you've heard my
statement.
I I talked to a lot of salespeople in sales management of
what are you gonna sell nextyear in 2026?
Well, I don't know.
I gotta wait till later in theyear.
Really?
Do you have a fixed number ofcustomers?
Yes.
Are they assigned to salesmen?
Yes.
(39:05):
Do you know what the operatingcost is for parts and service to
those machines?
Yes.
You know how many hours you'reputting on it?
Yes.
Well, how come you don't knowwhat you're gonna replace next
year?
Oh, darn, I never thought of itthat way.
That's the kind of thing that weneed to have people talking
about.
SPEAKER_00 (39:21):
Yeah.
You know, I wanted to ask youradvice when we launch this new
kind of what you can't see inthe market.
We're playing with sort ofpositioning.
One is mind the gap, right?
That could be one of them.
Another one could be uh for asales guy, it could be the no
smoking sign that says no leads.
Um, we it could be you know,stop digging for your data, or
(39:44):
it could be market share in yourpocket.
I would welcome what you thinkwould what would resonate to get
people's attention.
What I would make a very, verystrong argument about is there
their systems and the data thatthey're using is not serving
them.
The they're inferior.
In my opinion, there well, youcan start with the end.
(40:05):
If you're getting inferiorresults, back up from it and
say, what what can I dodifferently uh tomorrow?
Go go go more deeply.
SPEAKER_04 (40:17):
The the leadership, and that's from supervisors up,
of any business in ourindustries, the data they're
dealing with is 30, 60 days old.
100%.
Why?
Why don't we get this stuffevery day?
SPEAKER_00 (40:38):
Well, 90 a significant portion of it from
various third parties is ummodeled.
SPEAKER_04 (40:47):
There you go.
Okay, so let's stay with thatword.
No, let's stay with that word.
We're using a model.
And I'm at the counter in aparts department, in a car
dealership, in a marina, in ahouse builder.
(41:12):
The stuff that I'm dealing withis too old.
But I'm not prepared andunderstanding enough of what the
data means for me to be able todraw a conclusion.
I have to rely on somebody elseto do it.
There's nobody out there that Ican look to because I don't know
Nick.
I don't know his competitors,and they're not there.
(41:32):
And you look at it in medicine,it's the same.
In repairing cars, it's thesame.
Try and be a woman going into anautomotive repair shop versus a
man.
There's market segmentation foryou.
Yeah.
Um, try and be somebody who'sknowledgeable on health and goes
(41:54):
to a doctor and is told to takethese pills.
You out of your mind.
I'm not going to take thosethings.
Do you know what theconsequence?
You know what the side effectsare?
Everything is going to come backto how do we get the knowledge?
Where do we go?
Google isn't doing it anymore.
Copilot isn't doing it, Geminiisn't doing it.
Oscar, all these little namesthat we're coming up with for
(42:16):
people to ask questions of,where do they get the answers?
SPEAKER_00 (42:20):
Well, you uh a common theme I hear from in when
I either read or listen topodcasts on autobiographies or
biography is bad boys move insilence.
And if you're using the samesystems and the same external
data sets that every competitoris using, and a lot of these
people do, they sell to you andthe person on every corner, your
(42:43):
competitor on every corner, thenyou don't have an advantage.
And I would say challenge everyinternal cost that you have and
move in silence.
SPEAKER_04 (42:55):
Stay this stay there for a second because I agree
with you 100%.
I think we're coming into a newage where it's not going to be
that everybody might have thesame tools.
I'm going to call it tools tomake it more generic.
But the person who uses thosetools is going to be the
(43:15):
differentiator.
We haven't had that in societyfor decades, if not millennia,
where the person, the individualthat's sitting in front of the
customer, now we're going backto Steve and his buyer and
seller, and we're taking all therest of the noise away.
So you have something I want tobuy.
(43:40):
And there's nobody other thanyou and I involved in that.
So, salesman, equipmentsalesman, black book.
Then it goes to CRM.
CRM came in not to help thesalesman, but to have the sales
manager be able to manage howmany calls the salesman was
making.
SPEAKER_00 (43:58):
Or the illusion.
SPEAKER_04 (44:00):
Exactly.
And then here comes Salesforce.
And now I've got another wrinklebecause your database as a
dealership in my black book,your database in my CRM, and
your database in sales, they'reall different.
They have different measures,they have different communicate,
they have different addresses,for instance.
(44:21):
And then we get something likeEDA, Equipment Data Associates,
that starts tracking everything,every machine that's financed.
Now, how the heck does the nameget put into the file?
How do I match names acrossthree or four databases?
And that's what we're dealingwith today.
SPEAKER_00 (44:37):
Yeah.
Or what if a company can't findit?
The bigger the company, uh, asyou know, the bigger the
company, the less likely eitherit's not necessarily that
they're less likely to finance.
It means it's less, it's hardmuch harder to find in a state
filing um because of corporaterevolvers and securitization and
dot dot dot.
(44:58):
So, or multiple tax structures.
And you you're the data can bevery, very good at the low end.
That's the 80% of businessesthat constantly turn over.
So just think that through.
You have very good data in theworst segment of the fucking,
pardon my language, of themarket.
And imagine the brain damage itcauses when that's when you
(45:21):
don't know that.
So you spend an enormous amountof time, uh 80% of your time
chasing the 80% of the companiesthat don't matter.
And but you don't know that.
You don't know it.
What that leads to is fights,disappointments, turnover,
expense, lost structure,turnarounds, crisis management,
(45:46):
bankruptcies, dot, dot, dot,dot, dot.
SPEAKER_04 (45:49):
Frustration, ulcers, heart attacks, strokes.
It's not good.
It's not it it hurts people.
It you know, one of the I don'tknow how to characterize this,
but the last couple of weeks,you know, I read like an idiot.
But one of the things that gotmy attention the last couple of
weeks is paradoxes, and methinking that it is more
(46:12):
important today than ever beforethat I can keep in my mind
completely oppos opposingpositions at the same time and
be productive.
Because I think that's whatwe're conduct we're we're
confronting today.
My car is consuming too muchgas.
(46:33):
I haven't had it maintained forthree months.
My tires are wearing out.
I haven't had them balanced andaligned in six months.
Not that it's 110 degreesoutside.
Not that I didn't warm up theengine when I started.
(46:55):
So all of these things, and likeand we know this stuff.
My my Subaru and I I kinda likethis little thing.
There's a light on my dashboard.
Until that light goes away, inother words, the RPM's down, the
temperature of the oil, andeverything else is back to the
right place, then I can start.
And I've done that since I ownedthe damn car.
(47:16):
My wife had an A6.
She's had 12 years, 41,000miles.
She never did that kind ofthing.
But she didn't put enough mileson it to cause a problem.
If you're gonna drive at 80miles an hour, you better ought
to have the right fluids and youbetter ought to have the right
(47:38):
temperature and you better oughtto have the right filtration, or
you're gonna have trouble.
We know all this stuff, but wedon't act on it.
And we're getting to the pointthat the prime product is almost
too expensive, except fortelevisions.
Yeah, they're getting cheaper.
SPEAKER_00 (47:57):
If we go back to working from a defined list,
it's it's not that hard.
What's hard is count to 10,right?
SPEAKER_04 (48:04):
And I love you, man.
Because that's really what it'sabout, isn't it?
It's basically blocking andtackling.
SPEAKER_00 (48:10):
Meaning you could multiply 10 times blank, right?
10 times dealer, 10 timessalesperson, blah, blah, blah.
But when you're marketing to adefined list, you're now looking
at the holistic relationshipwith the customer, and you're
looking at you're making grossmargin dollar decisions, not
gross margin percent.
And the I think what OEMs coulddo, uh, there, you know, look,
(48:31):
who am I?
If and you know more than I do.
I I hope, God willing, they'redoing there's some great people
in all these companies.
They're probably doing it.
And if they're not, we would, Iwould hope, I'm sure you would
hope, at this point in time,when you you can get root rid
yourselves of legacy systems andlegacy behaviors.
(48:52):
You didn't have a choice before.
You had to install it and workits way.
You can now jump over thesesystems.
Um, I would say considerstarting a little piece of your
company, carve it out, call itspecial forces to begin to chip
away at uh impending doom.
You said it, the paradox.
You can operate.
SPEAKER_04 (49:12):
That's extremely I um lost the sound, so bear with
me a second.
Something happened here that uhI have to adjust to.
I can hear you though.
SPEAKER_03 (49:30):
Okay, that's what it was.
SPEAKER_00 (49:37):
Go ahead, and I went um I would say, you know, I mean
I to I'm being uh forgive me forbeing on the soapbox, is no
matter what you the I you know,you have an amazing uh
reputation, uh a voice, you arethe voice of the industry to me,
(50:02):
and to many, is your idea ofcreating the segregated database
and only putting into it thefish that you want to cater to.
Watch what happens and form, goconsider doing new things to
call it, manage those names thatyou're going to go secure to
(50:24):
secure your company's future.
It it's uh as Buffett says, ifyou're in a chronically leaking
boat, your time and energy isbetter spent switching boats
than plugging bolts.
I can only imagine if you're theCEO of one of these OEMs, how
difficult it is that you've gotto keep your constituents happy
(50:47):
while you make this hot sink andbefore you run out of energy and
retire.
Um broadly speaking, I would saycompanies can raise their
standards and they can raisetheir standards one name at a
time.
SPEAKER_04 (51:02):
Yeah.
Yeah, I I I I I agree.
I agree.
SPEAKER_00 (51:07):
And I would welcome your advice on call it as we f
provide this uh data set thatsays what you rent, the parts
and services you consume, yournew and used consumption.
Would welcome your advice abouthow to position that to I don't
want to say get people'sattention, but make them aware
(51:28):
of the part raise theirstandards.
Yeah that seven.
SPEAKER_04 (51:34):
Yeah, no, I agree with you, but how how you how
you do that is tricky.
SPEAKER_00 (51:44):
You agree?
It is tricky.
I think it starts with Volvoconstruction equipment, Volvo
AB, actually, I think did a verygood job in starting Volvo
Rentz.
They I was blessed to work uhfor Volvo Rentz, and they
segregated this division andprotected it and kept it away
(52:04):
from um a very good company, inmy opinion, that was just run
very differently.
And I'm not suggesting um VolvoRentz wasn't you know a gold
menor Olympic Olympic athlete orgold medal winner um at the
Olympics, but it had a muchhigher chance of succeeding or
(52:28):
call it change management thanit would have had it been a
subsidiary, you know, or managedby the parent.
SPEAKER_04 (52:36):
Yeah.
Yeah.
You know, this this whole thingof change and and artificial
intelligence and data drivingus.
Um all of this leads us to apretty dangerous time, I'm gonna
(52:59):
say.
(53:29):
So it's the consequence for usis nothing.
The consequence for the nextgeneration is huge.
So I'm talking with a companyyesterday, and there's three
people that they've identifiedas the replacement of the
(53:50):
current executive.
And they're gonna make thetransition somewhere in the next
six to eight years.
And I said, that's terrific.
So you're gonna end up with anew boss.
Yeah, it's gonna be reallyexciting.
I said, Well, how expensive isit gonna be for the two guys
that don't get the job to leavefor you?
Well, they're not gonna leave,really.
(54:11):
Their future is taken awaybecause the the guy who's taking
the job is gonna block them forthe rest of their career.
You think they're gonna stay?
So we get all kinds of changesin how business operates.
Then we we started collectingsales tax now on education
(54:33):
products, which drives me crazy.
And it's gonna cause us to startthinking about different things.
For instance, in the EuropeanUnion, it's 145 bucks per
client.
If you're non-EU, it's 445.
So obviously my pricing moduleis gonna have to change
altogether.
I said, no, no, I'm not gonnachange the pricing module.
(54:55):
I'm gonna have a membership.
You want to join and you're inthe EU, it's 100 bucks.
You want to join and you're inthe non-EU, it's 500 bucks.
Or some such thing, because Idon't want to just continue to
do what we've always done.
I have to look at it in withfresh eyes.
I don't know many people arelooking at their business with
fresh eyes.
I'd almost want to have aweekend getaway with whomever
(55:19):
the players are, sit at a tableand have it out.
What do we want to change in thenext 12 months?
What's our biggest risk in thenext 12 months?
And it's not what you're lookingat, it's to the core of their
business, how they operate.
SPEAKER_00 (55:33):
Yeah.
I would agree.
And I think that is, you know,call a there's a few people
equipped to help them do thatdiagnostic from top to bottom.
You're one of them.
Steve Clegg.
Um, I could see, you know, aLarry Kay, you know, meaning a a
(55:53):
Kasky, a Schussler, right?
There's a small group.
Frankly, that scripts team waspretty solid, as you, in my
opinion.
Yeah.
Scripts International.
And you, you know, I think Ishared with you, of course, I
had to read something to knowthat you were at the day zero of
smart equipment.
And I was like, of course, youknow, it's where I didn't, you
(56:15):
know, you didn't expect to see aname.
Uh I mean, it was just a it'slike a great end, great
beginning of a book um that youjust didn't know for the first
chapter.
So yeah, I would uh I wouldthink you're right.
Put those people in the room,bring in your special forces
team, and start and fund it.
(56:36):
And start small.
And those those small moves canbe incredibly powerful.
SPEAKER_04 (56:42):
Well, no question about it.
So there's a project for you.
You sell the services, you'regonna meet six o'clock on Friday
night, you're gonna have dinner,you're gonna explain what we're
gonna do, and then Saturday,Sunday, we're gonna meet all
day, beat each other up.
Sunday, we're gonna have areport, we're gonna have a to-do
list, and everybody's in theroom, they got their
(57:03):
fingerprints all over it.
You want to do it, you want todo it, you want to do it or not?
And every quarter have acheckpoint.
And get that kind of embedded inour thinking, in our management.
We is a heck of a lot morepowerful than I or me.
SPEAKER_00 (57:25):
Asking me to kind of be the yeah, absolutely.
You know, I the answer is yes,as you as you say.
SPEAKER_04 (57:32):
Yeah, that's right.
SPEAKER_00 (57:34):
I would be honored to do that.
And to you know, if we called itDARPA, right?
It's we peel off this private uhintelligence unit and we just
stay quiet and tight.
SPEAKER_04 (57:46):
And well, you've heard you've heard me use the
term virtual garage, and you'veheard the term STX, which is
what we're calling.
This is what Steve and I arecalling the virtual garage.
What this leads to is we'll havepeople that are specialists that
can go into a company thatrecognizes they have a need and
(58:09):
facilitate, not do, facilitate.
Because I think you've heard mecharacterize this.
We've got people that arestrategic thinkers, we've got
people that are doers, and we'vegot people that are
implementers.
There's probably 75 to 80percent of the workforce that's
doers.
Strategic, that's theory, so Ican get that from school.
(58:32):
There might be five or tenpercent of the population that
do that.
The real trick is who's the guythat's gonna do and the gal
that's gonna do theimplementation.
Because those dudes and dudets,they got real skills, baby.
Yeah, you're right.
And they're rare skills.
SPEAKER_00 (58:46):
Yeah.
Yeah, it takes a lot of energyto, and it is rare.
You have to be, it takes a veryrare skill set, and it's and it
which also includes a lot ofenergy to do change management.
SPEAKER_04 (58:58):
So let's wrap this up because we've been about an
hour.
What what do you think we'vegained out of this?
Have we exposed what we wantedto expose?
SPEAKER_00 (59:07):
I gained a call to action.
I I had one other note to toshare, which is as companies
reevaluate, starting with theend in mind, right?
It simplest.
I had a great boss, uh, NationsRyan, who would say that it
wasn't his, he didn't coin theterm.
Begin with the end in mind andback out of it and start with
(59:31):
this.
Ron, I will, I pledge to you, Iwill do that.
We'll you know, work as call anassistant to form this group.
SPEAKER_04 (59:39):
What what your guy, what your guy said should be,
should be, every single leader.
Where are we going?
Christopher Columbus, I'm gonnafind the new world.
Where are we going?
I'm gonna find the new world.
How am I gonna get there?
I have no idea.
SPEAKER_00 (59:55):
You know, it's interesting.
I'll just tell you with thisgentleman.
I'll I'll kind of omit his name.
He he went from uh being anation's rent executive to I'm
gonna skip a step, became apartner at a major private
equity firm that has a verystrong opera, you know, they're
operators, truly.
I mean that with sincerity, notjust a marketing tag.
(01:00:16):
He they owned a company for manyyears that kind of went nowhere.
He was the operating partnerresponsible for one of them.
And he became its CEO.
And one of the strategies heused, um, you know, different
layers of strategy, typical partPorter's five forces.
Um, he focused them on top 200accounts because he knew that
(01:00:40):
big plants, people that ownplants, own other sites, right?
Or big companies own multiplesites, think ExxonMobil, think
uh Facebook data centers, dot,dot, dot.
We are only focusing on thesenational accounts.
He secured his position there.
He um gained leverage over itssuppliers, which is the same
(01:01:03):
counter argument he makes withthe top 200 accounts.
He says top 200 accounts, we'llcut you a better deal because
we're getting your businessacross the nation.
We'll give you better servicebecause but he accumulated these
nickels and dimes, and he justsold a services business to one
of the largest companies,private equity funds in the
(01:01:24):
world for 19 times IBITA, right?
And there's no D in thatbusiness.
So it's nuts.
And this transformationhappened, and I remember going
there and sitting with theinterim CEO about five years
ago, until this gentleman becameCEO, which is probably three
(01:01:44):
years ago.
This was an investment.
I'm now I'm speaking in my Wackoworld, that they were probably
saying, shit, how are we gonnaget out of it?
So in three years, transformsomething that may have been
sold at you know, whatever, 5xbecause it was worthy of that.
Sold it for 19 times.
SPEAKER_03 (01:02:05):
So stay there, stay there, and there's one man.
SPEAKER_04 (01:02:09):
Charlie Munger, there's one man or woman, yeah,
Warren Buffett.
They're rare entities, they'rerare individuals.
The trick is for society, forus, you and I, to find them
before they become them and helpthem get there.
We're not mentoring people likewe used to, we're not coaching
(01:02:31):
people like we used to, we'renot allowing people to fail like
we need to.
If you don't make mistakes,you're not learning.
And that's why I call thecompany Learning Without Scars.
I've got the scars, baby.
I promise you.
Other people don't need to getthem because I've had them.
Nick, it's a pleasure.
And I want to do this again andkeep going because I hope people
(01:02:53):
are paying attention and I hopethis provokes thinking, because
that's what we're trying to do.
SPEAKER_00 (01:02:57):
And I'm gonna tell ask Helen if I if I can find an
inexpensive flight from SanFrancisco to you.
I'm gonna do it.
SPEAKER_04 (01:03:05):
So you're welcome to come, buddy.
SPEAKER_00 (01:03:08):
It will be the end of next week.
SPEAKER_04 (01:03:10):
That's okay, whenever it is.
I look forward to it.
I hope and thank you very much,Nick, and thank everybody who's
listened to this.
And we hope you turn in foranother candidate conversation
that provokes your thinking.
Mahallo.
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