Andrew Swiler's Formula for Flipping Software Companies into Gold Mines

Speaker 2: 0:11

Welcome to Side Hustle City and thanks for joining us. Our goal is to help you connect to real people who found success turning their side hustle into a main hustle, and we hope you can too. I'm Adam Kaler. I'm joined by Kyle Stevy, my co-host. Let's get started, all right. Welcome back everybody to the Side Hustle City podcast. Today we got a special guest Andrew Swiler.

Speaker 3: 0:37

Andrew, welcome to the show hey Adam. Hey Adam, thanks for having me on. It's great to be here.

Speaker 2: 0:42

Yeah, this is awesome. So you're in the HR world, you have a platform and you know an HR platform. Essentially you're buying up other HR software companies. At least that's what I got from the email that you had sent over. I've played around in the HR software world a little bit and anybody that listens to the show knows we had a business in software. These are one of my favorite businesses. Not a whole lot of overhead. At some point you end up getting to. You need to support the software, you need sales people, things like that. But if you know what you're doing, it's not too hard to whip up a software company and potentially someday sell it.

Speaker 3: 1:22

Yeah, absolutely that's the. I mean there's a whole world right now of software buyers that are up there buying, you know, companies that are doing maybe $200,000 to $1 million in revenue and it's a growing pool of buyers, which is great for entrepreneurs that want to get started right now and maybe possibly sell their business. I'd say there's a lot of different paths to travel for software and, like you said, you kind of get to a certain level where you can either kind of sell it and sell it to somebody that's ready to take on those next responsibilities, or you have that optionality to maybe get into the path of, you know, hiring salespeople, adding some more structure to the company, which is sort of what we do when we step in.

Speaker 2: 2:04

So are you guys? How does this work? I mean, do you raise money? Do you go out and raise capital to go out and search for these businesses? So are you more or less like a financial type person versus a software guy?

Speaker 3: 2:19

Yes.

Speaker 2: 2:20

Is that hedge money?

Speaker 3: 2:22

Well, I'm a little bit of both. So I did study finance. I went to Miami University to study finance, but I was in private equity after college and then, after that, I became an entrepreneur, started, you know, some software companies, some e-commerce companies, and I got to the point where, like the zero to one journey for me was getting to be difficult and I've got two kids, I'm almost 40, like starting something from zero for me was a daunting task and I wasn't really sure if I had the capability to do it again. So what I decided was to kind of go out and find companies that had already done that. You know, big first step. You know getting to a million or getting to 3 million in revenue. And we go out and we raise capital from investors. So I go out, dial for dollars, find, you know, a little bit of debt, a little bit of equity capital, and we acquire these companies. You know, typically what we're looking for is companies, like I said, doing about 1 to 3 million companies that are at this point where they don't want to add salespeople or they don't want the headaches of, you know, building certain operational infrastructure, and so what we do is, you know, we acquire them, take them to that next level. And what we're hoping to do is, you know, grow these companies from. You know, 1 million to 10 million in revenue.

Speaker 2: 3:37

Oh, wow, okay, and you guys have the expertise. This isn't the first time you've done this, and this is what private equity firms do, not just in the software space, but in other businesses. I mean, there's a private equity firm here that goes in and buys up mom and pop HVAC companies and you know any home service company, right, they'll just go in. They'll say you know, hey, look, your website sucks, you're not generating enough leads. You know, same guys own this company for, say, 30 years. He's ready to retire. Let me come in here, buy his essentially book a business, clean the whole thing up, make it pretty and then advertise it and boom and they. Well, it's not that simple, but it's kind of what you guys are doing in the software space right.

Speaker 3: 4:16

Yeah, yeah, exactly. I mean there's a whole world of SMB acquisitions. You know search funds, independent sponsors, things like that that have been growing over the last you know 10 to 15 years, and exactly what they do. I mean the. You know the narrative of that type of businesses. You know I'm going to step in and take this guy that's using the fax machine and I'm going to have him start using you know software and optimize everything and put it out there. And you know the reality is there there are some private equity firms that do that and they do it very successfully and they have huge opportunities. But the reality is it's gotten really competitive and the space has grown quite a bit. You know the the. Typically the narrative is there's more capital than there are good deals in the market. So it takes a lot of work to build relationships with with entrepreneurs, build relationships with software companies and get in there and make them know that. You know you're going to buy this company but you're doing it to kind of continue their legacy or or for whatever reason. Everyone has their different motivations. Some people just want money, but some people this has like been their whole life for 10 years and they want to make sure that it goes somewhere.

Speaker 2: 5:19

Yeah, totally. And I think a lot of people that listen to our show these are. These are normal people. They're probably got a nine to five job. They're looking for some kind of a side hustle. They don't understand how any of this private equity stuff works. They hear the word and they're just like I don't know how any of that works. This is confusing to me. But essentially, let's use my. I sent you over a link to a company that we've kind of just we were. We were pumped up about it, we were getting going, we built a software, we put the website up there, we got the social media stuff going and then my two co-founders kind of pooped out. So now I've got this company that I haven't done a whole lot with, but also they both worked for Robert Haff, so they knew the business Well, I own an ad agency. I don't know that business. So one thing you would do if I got some sort of traction with the company, let's just say, right, I got great software. It's really cool. I'm getting great feedback from customers. You're like hey, let me come in here, scoop this up. And I've done so many deals, I'm so well connected into the world of HR, I can turn this I can take this from what you have now into a bigger business, and that's really the value folks like you add to these companies and why they want to sell to you.

Speaker 3: 6:35

Yeah, that's where we add, and it also depends on how you structure it. On your exit, I mean, one thing that people think of when they're going to build a business or exit a business is like what kind of cash might I get? But sometimes there might be a business like what you're describing, where you know they maybe they haven't been able to hit the right metrics or hit the accelerator yet and there's ways to, you know, build a deal where everybody wins, where we say, you know you guys haven't done very well with this or you haven't taken it that far, but you know, we'll bot, we'll give you this much upfront, which we think is fair, and then we'll also give you, you know, a lot of backend to that, even you know, whether it's in the form of equity or in the form of of what's called an earn out, and it, you know, could potentially be incredibly lucrative for the seller If there's like some hidden value there that maybe wasn't unlocked and these guys can unlock it.

Speaker 2: 7:23

Sure. So that's 100% of of nothing, right Versus, you know, 5%, 10% of a multi-million dollar company.

Speaker 3: 7:33

And that's really what you're looking at. That's hard to explain to people. A lot of times that's one of the hardest narratives to get people to understand, because a lot of times people don't see the lack of value in something they have to. They say, like, well, I built this. Or a lot of times what people see is the investment they've put into it so far and they view that as the value of the company. And you say, well, you know, this has no value, it's 100% of nothing right now. Let's try and make it into something.

Speaker 2: 7:58

Exactly, exactly, and tell us about your company. So is Lantaria. Is the company.

Speaker 3: 8:03

Yeah yeah, lantaria is our current company.

Speaker 2: 8:07

And how does that work? So it looks like it is actually it's it's ties into Microsoft products, so it looks like it's SharePoint kind of solution. Is that what's going on here?

Speaker 3: 8:17

Yeah, so we I mean what the easiest way to describe this is. You know, workday is probably the most famous HR management system tool. That's that's in the market right now. We compete with workday. We pretty much offer the same sort of set suite of products as them, but what we do is we built it inside of or not us the previous owners built it inside of the Microsoft ecosystem, so this is really optimized for you know, sharepoint or Microsoft Office 365 users. So if you're already in the Microsoft ecosystem, you know this allows you to share your data through throughout Microsoft. So if you're already using Microsoft and have all your employee data there, we can easily import it into our system and you could work across without having to leave Microsoft. And usually a lot of times you know when you what you find in the Microsoft ecosystem is people are in Microsoft because they want, you know, security, they want certain boxes checked for compliance and they never leave that ecosystem. Like, once you're in, you're not going to go from Microsoft to Google.

Speaker 2: 9:15

That's right, you're hooked. That's very very true, very true. And so you had to. You got a degree in finance, right, you're, you know, bounce around, you know, you're working in finance for a while there, and now, here you find yourself in this HR software world where now you have to be an expert no-transcript, what was that pivot or education like to ramp up into understanding this world? I mean here you are telling me about, you know, microsoft's ecosystem and things like that. I mean, when you graduated from Miami, you probably didn't really know a whole lot of that.

Speaker 3: 9:49

No, no, I didn't. When I graduated from Miami I didn't know anything really. I barely knew how to make Excel spreadsheets. So I mean, everything I've ever done I just kind of figured out on my own. I mean, I started an eyewear company, I've started a clothing company before, I've started a bunch of different random things that you know. You just kind of figure it out, you go, we started clothing companies. I remember we'd go to like textile trade shows and just talk to people and just be like so how do you make clothes? Like what do you have to talk to? And we figured out how to make clothes and we figured out how to make glasses and in HR, software. I mean, the way I did this was, you know, we were looking for my partners, our based. They're two guys from the US, but they also live in India right now. So we had built some companies together, some software companies, and we decided we wanted to get into acquiring companies. And we, you know, we were searching, we were looking around and we saw HR as like a really interesting market, but that wasn't like our direct focus. But when we found Lanterian, we decided to acquire it. Basically, what I did was just get on the phone with all of our customers and talk to them for the first three or four months and just find out like why do they need the software, what does it do for them, what is interesting, what does it not do, what are the other softwares that they're using in their day to day lives, and just kind of understand the HR thing. And then I've actually just started. Inside the company we started a podcast where I would just have HR people come on for like 30 minutes and just tell me about what they do, and it wasn't really for marketing, it was just like I just wanted to figure out what people in HR do because I've never worked. I've never worked in a big company before. So I have no idea what these people do all day.

Speaker 2: 11:30

So fact-finding podcast is what it was. I mean, it's no different than mine. Like you don't understand, like so many people come on here and they tell me about these cool side hustles they've done. Or you know this guy on the last one. He has these ice water vending machines. He puts out on the beaches in Florida in these yeah, in these apartment and hotel areas, pays the owners a couple hundred bucks, sits this machine out there costs about 50 grand for these machines, but the guy's got three of them. He's making 33 grand a year in passive income selling water and he doesn't have to do anything he spends two hours. he spends two hours a week. So I mean, you know, that's essentially what this is in a way too, is you know, we don't make a bunch of money off this podcast, we, it's just fact-finding for me too, just the way it is for you. But that is a very interesting strategy that you use to to understand the industry. Not many people would have thought of that.

Speaker 3: 12:21

Yeah, the hardest part for me because you're doing it sort of in public. So you know I have to maintain and obviously I'm not doing that right now and this is public, but whatever you have to maintain a certain level of expertise in the discussions because you want them. You know you're talking to your clients, you're talking to people at HR, so you want them to view you as a person that knows about HR but at the same time, you're trying to learn from them and this is the best way to get. You know random people. You know I've gotten people that you know they're running companies that have 5,000, 10,000 people on them and they're explaining to me sort of how they've built HR systems across. You know several different firms in. You know we'll talk to people on healthcare, talk to people on oil and gas, talk to people in technology, and it's great. It's a great way to get people to talk to you and to learn from them and to sort of open up and explain their, their business.

Speaker 2: 13:10

Yeah, oh, it's totally. Some people love to talk about their business. I mean, if there's one thing you learn, if there's one thing you learn from having a podcast, is people there's. You know you could talk to people for two, three hours about their business. I mean, I could sit on here with you and probably talk to you for hours about this, and it's just people love to talk about what they're doing because, honestly, if you're an entrepreneur and you're doing whatever you like to do, like you love this, right, I mean you. This is why you don't necessarily work for someone. You have your own thing, because you love to do it and you're excited about it. You want to tell other people about it.

Speaker 3: 13:45

Yeah, yeah, you can't. It's really hard once you've turned it on and I mean it took me a long time to get to the point where entrepreneurship made the same amount of money for me as as what I was doing before. I mean part of it could be I live I live in Barcelona, actually my wife's from from here. So my first, you know, four years as an entrepreneur was really focused on like being an entrepreneur in Barcelona and in Spain and that that was a huge challenge and you know it forced me to be an entrepreneur, but at the same time, you know, in a very challenging market, like I wasn't in America, selling to America, and the pandemic, frankly, for me, changed most of my career and most of my path because it it made it. So, you know, I could raise capital from people in the US, I could be working with customers in the US and where you know, four years ago it would be really unheard of that people would have given me capital to acquire a software company.

Speaker 2: 14:37

Yeah, oh, it would have been really, really tough. Yeah, it's been probably. It's been probably three years since I've been in Barcelona, but when are they going to finish the Sagrada Familia? When is that going to get done?

Speaker 3: 14:48

I don't, I don't turn it in enough. That's a good question.

Speaker 2: 14:51

Yeah, and then Los Rambles. I remember, guys, if you've never been to Spain or Europe in general, the it's, it's amazing. The food is amazing. We got a truffle pizza. This was oh yeah, on Los Rambles, right, and we get this truffle pizza $10 for a large truffle pizza. That pizza would have probably cost $40, $50 in the US. I mean just covered in in in it's crazy, just slices of truffle. It was amazing. I, I, I, I envy you for just getting out, despite the fact it makes it harder for you to do business in the US. But living in Spain, living in Europe, you know, getting out of probably your comfort zone and, and what was actually probably easier for your business, to stay in America but traveling.

Speaker 3: 15:35

Yeah, it's, it's awesome.

Speaker 2: 15:36

It opened your eyes to so many things.

Speaker 3: 15:39

Yeah Well, now I'm, I'm now I'm thinking about starting an ice water business here, because it's really hot, and that guy says, oh hey, everest, it's Everest vending, I think is what it's called Everest ice vending machines or whatever.

Speaker 2: 15:51

These things are amazing.

Speaker 3: 15:52

Look at this guy.

Speaker 2: 15:53

These things are amazing. Yeah, I actually had on the guy a sales guy from the company, right, and they were, you know, explaining it. And then someone reached out to me who's actually buying the machines off of those people to tell me how it actually works, and it was great. So I have two episodes, one from the people trying to sell you and then another one from a guy who's actually doing it. So, yeah, why not? I love it. Yeah, barcelona gets a little little warm.

Speaker 3: 16:20

Oh, it's hot, it's still hot. I just went swimming before before this call, because it's it's still hot and it's like 10 o'clock at night here right now.

Speaker 2: 16:26

Oh my gosh. Wow, yeah. So I mean, you're able to get away and and I don't think people understand it Sometimes it's good to leave a country, especially if you're an entrepreneur go somewhere. Yeah, the way people are marketed to is is kind of the same in America as it is in in other countries, but it can also be different. The products are different, the things people value are different in other countries, and it kind of gives you a more global view of of you know what you're making, whatever that is. But it's just the best thing to just round yourself out as a person and as an entrepreneur, in my opinion.

Speaker 3: 17:08

I agree I think traveling is the most important thing that people can do. If you can do it, I always highly recommend it, and I mean it's I was talking to. I have a good friend that has a podcast about like digital nomads and we were actually playing golf a few weeks ago here and you know we were discussing like it's still fun to travel. I mean, now it's way easier than before. Like now you know, you bring in like your Apple watch, like I was just in Paris the other day and like you bring your Apple watch and you just pay for things with your Apple watch where, like 20 years ago, you would need travelers checks to take exactly, and so like, yes, all those frictions that are taken away makes it easier, but you do lose some of the romance and some of, like, the adventure of traveling. Like I think you can probably still get it when you go to Asia or parts of Latin America. But you know Europe's just an easy place to go and it's, it's comfortable.

Speaker 2: 17:58

But I think you still do get another vision of sort of how the world works 100% and I've threatened to move with my wife to England and go to like the London Business School or something, just to just for GP Like I at this point I don't need an MBA or any of that stuff, but you know I was like I should just go, just I think it would be fun, it would give us a reason to live over there and, you know, then she could go do the Harry Potter experience in England. You know how that whole studio is up there and all that. She just loves Harry Potter. But you know, trying to get her away from her spa, she owns a spa and she's got the same problem as a lot of people who own brick and mortar companies is that you know you have to. It's a brick and mortar Like. You have to be there.

Speaker 3: 18:42

Yeah, you gotta be there.

Speaker 2: 18:43

Right, especially when it's a lifestyle business and you're kind of stuck there. She is the one doing the services and she does really well. She does great business, but she has to actually do it. She's tried to hire people but unfortunately there's a lot of folks in that industry, just like there is in you know. Say you had a franchise, you know restaurant, a Dunkin Donuts or something. Imagine trying to keep employees at a Dunkin Donuts right. They're going to leave. Oh man, they're wishy-washy, they don't show up to work. Same problem in her industry with the beauty care stuff. So she's just decided not to do it. She's the one doing all the work. But the problem is is you can't really leave, you're stuck. You've given yourself a job. It isn't that way in software. Software is different. It's just like my job. You know I own an advertising agency. As long as I have my laptop, just like you mentioned, the Apple Watch you can kind of go wherever you want this is yeah, you can always find people for sure.

Speaker 3: 19:39

that makes it easier 100% Plus.

Speaker 2: 19:41

I mean you're in a place where now you could go to Portugal to find employees. It talented, really talented people in Spain, really talented people in Portugal, talented people all over Europe, but at a much lower cost than you could probably hire those people in the United States. And you know, to do whatever it is software development, design, marketing, social media those people are available to you and you're right there.

Speaker 3: 20:12

Yeah, no, I mean we have our companies fully remote. I mean we don't have. I think we have four or five employees in the US and the rest of our employees are sort of spread out across Europe, india, southeast Asia, so we have people all over the place. And when we hire, I mean it changes the way you hire. I mean we do. We got a lot of like tricks of you know we go on LinkedIn and I'll post the same job on LinkedIn in you know 10 different countries, and we do a thing where we'll post, like for one day we'll post one job in one country and then the next day in another country, and then you can use the free posting on LinkedIn. So you don't have to pay their, their crazy advertising fees to be able to do that. So we're able to recruit. I mean there's definitely certain roles, like, I would say, support, for example. So we have our support team. We struggle with getting new team members and retaining them because it's just not a very exciting job. And when you're working fully remote, I mean either you're giving people some sort of leeway and some ownership of their time or you're on top of them all the time and like doing like screen grabs and doing all this crazy stuff. We try and be more laid back, but the other side of that coin is, you know, you get people that just don't show up. I mean, we had a sales guy that we fired last month, that was based in Canada, that he was working two jobs. I got a call from the CEO of another company and he called me up and he said, hey, is this guy working for you? And I said, yeah, he's our new sales guy. We just hired him like a month ago and he goes. We just hired him a month ago too.

Speaker 2: 21:47

Oh, no, he was doing it. Oh, I see what he was up to.

Speaker 3: 21:52

Yeah, yeah, so you get. You know it has it's. It has its goods and its bads, but definitely like the fact that you can hire anywhere. It makes a huge difference compared to you know what your wife goes through, which is definitely a struggle.

Speaker 2: 22:04

Oh yeah, it can be really, really tough when you're dealing with people because you love your company, but your employees don't necessarily love your company. They just are there for a paycheck a lot of times and you know, trying to motivate people to love your company is it's hard.

Speaker 3: 22:18

Yeah, yeah, they might like you as an owner or as their boss and be happy with that, but that only goes so far, and it really doesn't go far when you're not there, because maybe they don't like the other person that you put in charge.

Speaker 2: 22:32

Oh yeah, oh yeah, well, and I know some, you know in that that's the hard thing is is quality control. So, you know, if my wife is working on someone, you know she's doing a great job. She's she's making sure they're they're relaxed, she's got the music playing, everything's great right. Some of her past employees, you know, want to talk about their personal problems with their guest or whatever, and it's just not you're not paying. Yeah, $200 for an hour facial to listen to somebody's problems. It's just you know you're not there to be their psychiatrist, so you know she dealt with things like that people not showing up to work you know it's people. Another thing is too why am I getting paid this much and you're making this much Like, why is this $200 an hour and I'm only making $25 an hour?

Speaker 3: 23:20

You know you get that. Yeah, they don't do all the other calculations that go into it.

Speaker 2: 23:23

They don't know. They don't know how that works, and that's. That's a tough part, and I do know one HR hack though. So one HR hack people are doing now, believe it or not, is that they are posting a job pretending they have a company. They're posting a job on Indeed and all that other stuff for the job that they actually want. They receive resumes, they go through the resumes and create their resume based off all the resumes that were sent to them.

Speaker 3: 23:52

Really Yep Interesting.

Speaker 2: 23:54

That's a new thing.

Speaker 3: 23:56

That's an interesting. That's an interesting tactic. I mean I guess it goes beyond. You know you could ask chat GPT to make a resume for you, but it would be easier to find out what other people are saying Exactly Like you, take the best ones.

Speaker 2: 24:10

Yeah, you take the best ones. You say, wow, these things are awesome. And you just kind of take what they you know on there. You always have something about like what was the challenge you faced, or whatever. Sometimes people put that stuff on there. So it gives you an idea like oh, I should put that on my resume. Or oh, I never thought to put that on my resume. Or you also see the competition you're up against and what you need to do to kind of pivot. But you could. You could literally. If they send you Word documents, you could literally just copy those, stick them into chat GPT and say, hey, chat GPT, here's five people that I'm competing with for a job. Write my resume based off of this and what I could do to stand out.

Speaker 3: 24:45

Interesting that's. Honestly hadn't heard about that but that's an interesting, interesting little hack off to have our team kind of look into that, do some research, because we always like doing some content pieces around like interesting new HR things that are going on that maybe people haven't heard of.

Speaker 2: 25:02

So there, you go Do a TikTok on it. Yeah, yeah, yeah, from Barcelona, this is a TikTok, but also, have you heard about these lazy girl jobs?

Speaker 3: 25:12

No.

Speaker 2: 25:13

Oh, you got to look that up. That's the new thing, like quiet quitting was a thing for a while, right, yeah, yeah yeah, we did a few podcasts on quiet quitting. Yeah, and there's like job ghosting and all that which and when everything was good and the pandemic was happening and people were getting free money, they were just sending in applications, like and they would not even show up for the interviews and stuff, or they, you know, pretend they showed up for the interview, I guess, until their unemployment people that they actually interviewed.

Speaker 3: 25:38

Yeah, you can get the unemployment check yeah.

Speaker 2: 25:41

And my wife also. She was getting a lot of resumes and not a lot of people were showing up. But now you've got lazy girl jobs is what they're called where it's. There's people out there and I don't know why they call it girl, Like I don't know why they do that because guys are doing it too, but they're essentially taking these boring administrative jobs. And I don't know who the author was, but he mentioned he wrote a book on BS jobs. So he said there's these BS jobs out there that every company has, but really they're just there to pump their numbers kind of like oh look, how many employees we have. But they're just boring middle management or middle of the middle management, admin type jobs. They pay decent money. I mean, if you're in a bigger market maybe you're making you know 60 to 80 grand doing one of these jobs. But it's like a secretarial job and it doesn't require a lot and they just kind of sit on their phone all day and get a paycheck.

Speaker 3: 26:33

I'm assuming it's all remote type of jobs.

Speaker 2: 26:35

It could be remote or it could be actually Bloomberg wrote the article on it so you would look up and anybody who's listening you could look it up. But just look up lazy girl jobs, bloomberg and it has yeah.

Speaker 3: 26:44

I'm looking it up now. There's like hundreds of articles.

Speaker 2: 26:48

It's crazy, it's in, it's sad in a way, because people you've got this whole movement of like young people and stuff too, I think, where they feel like the system's taking advantage of them. They feel like you know, these jobs they, you know they don't have. I don't feel like they have the same aspirations. Even though I grew up in the slacker generation, I still feel like we were able to get over that crap, you know, like the whole socialism nonsense and the talk of that and everything else. We were able to kind of overcome that eventually. I think these guys are kind of stuck in a in a I don't know a depression almost, and it could have something to do with social media and these influencers who are you know how many, how many multimillionaire 20 year olds are on social media right now are claiming to be multimillionaires. I did this and now I'm a multimillionaire. It's like there's not that many multimillionaires guy like your BS.

Speaker 3: 27:39

No, there's a lot of BS on the internet and I mean that, for me, is one of the biggest challenge. Like I have two little kids and I I always view how they can critically think is going to be the most important thing and even just like how they, how they're going to be able to fact check things, is going to be the most important tool that they probably have in in the future. I mean social media, internet, all this stuff too, and also just like having these titles for things like lazy girl jobs. I feel like this is a very American thing too, that we have to like put a title and then like make it a thing for something just because, like it went viral on Tik Tok, and then you know all these, all these like I mean, just looking at this, I can just see this is like clickbait articles everywhere of people are clicking on this, because there's thousands of articles and it's something that exists here and I feel like it's something people are probably like debating intensely in the US and like over in Europe, people would be like what's? Like who cares about this? Like why, why are you even talking about?

Speaker 2: 28:38

it or you. You have some countries in Europe where they would love these jobs Like they would love to work yeah. I mean we're complaining that you know we're working over 40 hours or whatever, and I mean these are people that aren't entrepreneurs, right? I mean you and I, you know we can work 100 hours a week and we're just fine because our job, our, our companies, our hobby really. I mean, this is what I tell people they're like man Adam, all you do is work and I'm like you don't understand, this is my hobby. Like I don't go golf, I don't go rock climbing or whatever you people do, I don't. You know, this is what I do for a hobby. I watch freaking YouTube videos on what's the next thing you know, so that I can come on my podcast and talk about it. I you know, I love it. I love just taking in information and and using it in different industries or using it in different ways, and you've probably done that too. I mean, there's probably things that you learned in finance that are applying to the software world that you never thought would work. But you're able to make those connections because you've bounced around in different, in different worlds and in met with different people.

Speaker 3: 29:40

Yeah, you got to just be curious. I mean, like, like I said before, I mean everything that I've done is just kind of like throw yourself in there and and figure it out. And you also have to assume I remember I read the four hour work week like 12 years ago and I don't remember anything about the four hour work week. I don't even remember. I remember it's about delegating. I remember it's about like hiring people in the Philippines. But the one thing I remember is like the first chapter is just about believing that you can do anything, and that he like his first stories about like he was at Princeton and he wrote an email to like Bill Clinton or something and he responded to him and he said like that's the most important lesson of this book is like just know that you, if you don't, if you think you can do something, at least try it. Yeah, and you'd be surprised how often it actually works 100%.

Speaker 2: 30:25

No, I was mentoring some kids, but you see, and this one kid went to Indian Hill High School and you, by being in Miami, you know where Indian Hill is. It's a really wealthy neighborhood. Yeah Well, this kid had no fear and it's probably because of the way he was raised, right? I mean, if you're raised around wealth, you don't, you don't, you're not intimidated by wealth. He writes an email to Mark Cuban. Somehow. He gets Mark Cubans email and we're doing this it's like a startup competition and I'm mentoring these kids. He comes in one day. He's like, hey, so I emailed Mark Cuban and he wrote me back and he's interested in listening to our idea. And we're like, wait, what, what did you do? And he's like, yeah, I just wrote Mark Cuban. Here's the email. And he's like, hey, great to hear from a young person, a college student you know, I'm always up to to listen to what's going on and just wrote us back. And then the the guy that's just under what's his name? From Amazon. He writes him too. And he, apparently, this guy is a UC graduate. And he writes him back, yeah, and he sat there. We did a zoom with the guy to show him, like, what we had and everything. It was crazy. I was like I'm a grown man and I wouldn't even do that this kid's in high school.

Speaker 3: 31:38

Yeah it's, it's crazy, I mean, if you just do things and just kind of. I mean, I think that there's certain things like if you want to become a rocket scientist, you know there's probably a certain path for that, but usually most things that don't require certain, you know, like a certain extreme level of expertise.

Speaker 2: 31:56

You can become an expert on things or or or become relatively literate in them pretty quickly if you sort of dedicate yourself to it 100% and I, you know, if you think of life as kind of like a forest and you know, 50 years ago there were maybe two pathways you could take through that forest, two or three pathways you go to the military route, you go to the college route or you go the trade route.

Speaker 3: 32:17

maybe those are the three paths. You could become a priest, maybe.

Speaker 2: 32:20

Or you become a priest. Yeah, go, jordan, the clergy. There's a fourth path, right? So there was a. Or you just be a homeless hippie and live in San Francisco in a tent if you wanted to. So there's five right there. Right, so you've got these different paths. Well, today is the time especially when I do all these, you know, I listen to all these side hustles. People are blazing their own paths and then some people are following in them. They go off on another path. There really is like unlimited paths, Like people are. People are creating their own journeys nowadays and it's totally possible.

Speaker 3: 32:55

Yeah yeah, the internet, I mean it's. It's definitely opened up a lot of optionality. I think the key is always, I mean with anything is sales and marketing. You know how you sell yourself. If you're willing to sell yourself, you got to get out there. And my wife does a lot of really cool, interesting stuff, but she has no interest in selling herself or selling any of the things she learns. She just learns it for her own edification. So, unfortunately for her, she doesn't want to get on social media and sell it. But if she did, or if you are interested in saying it's now is the time that you can get on there and anything you're interested in if other people aren't talking about it. I mean you could be that expert that that people start listening to tomorrow.

Speaker 2: 33:38

That's right. That's right. Do you, since you're in HR, have you done your Myers-Briggs?

Speaker 3: 33:44

No, I've done. We use something called Culture Index which is similar. It's not exactly like Myers-Briggs, but we use Culture Index, which I'm a philosopher in Culture Index, but I don't know where it is and fits into Myers-Briggs.

Speaker 2: 33:59

Well, I'm the type that I'm an ENTP. So I'm the type that I have a million ideas. I get about 80% on them. Then I jump to the next shiny object. My wife which my wife sounds like your wife she's an INTP, which is she goes really deep on one subject but she doesn't want to be bothered by anything else while she's learning that subject and she will learn 110% about that subject. And she, she does not want to sell herself. She's not a promoter at all. Where I'm a promoter, I can go out and talk about it Like I'm like oh, I get hyped up about it and as long as that excitement is there, I can go out and sell it. If she does not like selling, she just loves the process of learning.

Speaker 3: 34:44

Yeah, yeah, that's my wife. She loves just learning things. She's like, if you just let me study the rest of my life, and I'm always like, well, do whatever you want, like that's, that's fine with me, because she'll be like, well, you know, do you want me to do this, or do we need to be making more money or anything? I'm like, listen, even if you made a bunch of money, I would still be doing what I do. So, yeah, it's not like I'd be doing something different.

Speaker 2: 35:05

Yeah, no, no, no, no. I'm doing what you do. Explain this, the personality thing that you use, because there's so many of them out there. There's Enneagrams, you know. There's Disc, there's Myers-Briggs what's the one you guys use, and do you see that? Is that common in the HR world? Is that common in companies?

Speaker 3: 35:25

Yeah, I mean Biggest one, I would say, is predictive index, which is similar to what we use. We use culture index. We're actually going to probably switch to predictive index soon because they they're a partner of ours, so we're probably going to start using them, but we had used culture index for a long time. They're they're all sort of similar in the sense of you know, you're just trying to get an idea on what the person's personality is, both. What culture index does is it's like a five to 10 minute survey. It takes very little time and you basically just as a bunch of adjectives, um, and it asks, like how these adjectives describe you and then how these adjectives, uh, describe work and they're all the same adjectives and then what it spits out is sort of who this person's personality is and then what their work personality is. But the key thing in there too is there there's these things called energy units, uh, which tell you the person's ability, like how much energy they have, and that means their ability to go outside of their sort of comfort zone or or their, their zone of expertise. So what we always look for is, you know, unless you're looking for like a very specialist, like I need a web developer. I need a coder. I need something like that. You know, if we're looking for somebody in management, we try and find high energy units because then you know that especially in like a startup or small company, you're going to need them to do some weird stuff.

Speaker 2: 36:42

Like one day they're going to have to fix the copy machine. Yeah, and they'd be willing to do that, not cry about it.

Speaker 3: 36:48

Yeah, exactly so. We always look for people with high energy units that you know are willing to step outside their zone of comfort. Um, but there I mean predictive index and culture index. I I never was like I had never been. Like I said I never worked for a big company, so I was never like hired, uh, or had to go through one of these. But ever since the the guys that I work with introduced me to it, I'm a huge believer in this. Like before, uh, we hire anyone, like before we even do like an interview process with someone, I send them this first and I decide if I'm going to have an interview with them or not, because I know, if you know, we're looking for a CTO or a technical lead and they're a uh, socializer is like one of the type of things I know it's not going to work. Like, from day one, you're like this isn't going to work. This guy's going to be going to want to chat too much, he's not going to be focused on what he needs to do, he's more you know would fit more into like a sales kind of role, and so you can weed people out pretty quickly using these tools.

Speaker 2: 37:45

I love it. What do you think is their value in? Or is this? Are these just business tools? Or are these things that people listening could go in and just learn more about themselves?

Speaker 3: 37:57

I think they're like I wish so the for culture indices as an example. They give you like this printout that sort of like runs through, like what this person's like, what this means and like when I read my own, you definitely identify a lot of things in yourself. I mean, there's certain things that they get too specific on You're like well, that doesn't really apply to me, but I think it is a really good test to sort of learn about yourself, understand yourself. The issue is usually what we try to do is, if we do share their culture index with somebody, we usually use somebody from like our HR team or somebody that's sort of an expert to walk them through it, because sometimes people just get lost in this type of stuff. But I think it's always good because you learn who you are and you learn a little bit more about, like what is your. I mean, I think everyone has a zone of competency that they could be in and maybe they're in the wrong job right now or they're maybe in the wrong area right now and you know, just learning this type of stuff about them, they could see like wait, maybe I should be in sales or maybe I should be, you know, you know, be running a spa, or maybe I should be doing something else and it helps you.

Speaker 2: 39:01

Well, and the crazy thing is this I mean, I even take it down to the DNA level, believe it or not. Like I, there are there's a thing called genome link and if you do your 23andMe or your Ancestry or whatever, you can actually download your genome, upload it to this service and it will tell you, based on your DNA kind of like, your personality traits, and it also tells you you know physical abilities. It told me I wouldn't be a good soccer player, so that kind of depressed me. But it also tells you like, like my conscientiousness is high, like just genetically, in which it's based on actual research. So at the bottom they give you links to the actual research and a lot of times the sample size of that research group is pretty large. It'll be like we sampled 10,000 European men who had this trait and they said they were this or they you know. We gave them a test on conscientiousness and they all ranked highly in conscientiousness. So they're basing it on genome. Genome link, dot IO. I believe it's dot IO. I love it. I mean I don't know how accurate it is, but I mean there's appears to be research behind it and I'd rather have that than nothing. You know, at least you can kind of go off of that. But people that are low in agreeableness which I apparently am and then high in conscientiousness, usually make really good leaders. So when you're when you're doing the you know, when you're doing this HR stuff, I can only see this stuff getting more detailed and expand over time the genetic research part of it, and then also what you're talking about, just these personality tests and how those play into it as well. But I mean you could almost target people perfectly for the right position for them, because I know a lot of people. I suck it as an employee. I'm a terrible employee. I just I found that out. I can't just be pigeonholed into one thing, and that's kind of like what you were talking about High energy, people that want to do a lot of different things, but there's also the vast majority people that I would say are just fine, just coming into work every day and doing the same thing over and over and over again. Wouldn't you want to know who you are. You know. Why wouldn't you want to know that?

Speaker 3: 41:19

I think it's. I think it's a huge, huge unlock. And it's also an unlock to understand other people's traits too. I think what what people have difficulty is also understanding and empathizing with other types of people and like why they do things or what they like doing. So, like exactly what you just said. Like people like coming in and doing the same thing every day and for people like you and me, like entrepreneurs, they're like wait, why? Like I know entrepreneurs that like they don't understand why people do things without having equity or without having ownership and it really it costs them a lot to get into that mindset and understand. Like why people just like having a salary, going to work, you know, having their friends at work and talking to people and sitting at the water cooler and having those chats. When, for them, they're like I don't get why people like this, but it's a blocker for them for hiring because they don't understand other people. Yeah, so the more you understand these types of things, the more you can, you know, be a better manager, be a better entrepreneur, be a better, you know, psychologist in marketing and sales. It really helps to understand all these personalities.

Speaker 2: 42:19

Well, what I never understood is why people go into these jobs, do the same thing every day for a paycheck Essentially it's called being a wage slave and then complain about it, like complaining that the boss is making more than them, complain that they didn't get a the raise they thought they should get, complain, complain, complain. And to me, I can't, I can't understand it. It you know, and what this also does. When you take these tests and you start to understand yourself, you're like, ok, the reason I feel like this is because this is the way I'm built. But then you read about all these other personality types, you're like, look, there's nothing they can really do about it. It's like just the way they're built.

Speaker 3: 43:00

Yeah, yeah, it's a huge unlock, understanding these things and you've been just being able to empathize with them, like, ok, I get, you know. If you know this person's personality, you're like, ok, I get why this person is like this and, you know, if you're nimble enough, you can figure out a way to sort of work around that and work with them and understand them. And that's that's sort of the key to getting into like a good management position is is understanding people.

Speaker 2: 43:25

Yeah, and I wouldn't want to hire another person like me because they question everything. They'd be like hey Adam, how come I don't have any equity? Or hey Adam, how come I'm not doing this? Hey Adam, why don't I just take this idea and go start my own business? And I'd be like, yeah, damn it, I guess you could yeah.

Speaker 3: 43:41

Why did I hire you?

Speaker 2: 43:42

Why did I hire you? Why did I hire another me? This is not right.

Speaker 3: 43:45

Yeah, I should have done a personality test first.

Speaker 2: 43:48

Yeah, but the problem too with like your person I mean you're probably a similar person at a time where you're in the same range as me and other entrepreneurs. I think we all kind of have the same four or five Myers-Briggs types right, or three or four Myers-Briggs types. But one problem is is we have to be entrepreneurs, like we're not good employees necessarily. If it doesn't work out for us being entrepreneurs, you're kind of like miserable, I would say.

Speaker 3: 44:14

Yeah yeah, it's not a lot of optionality for people like us. I found that when I've had jobs I can be pretty good at sort of blending in and working there, but I'm never giving all of my, I'm never giving everything to those jobs.

Speaker 2: 44:30

No, no. You go home and you need that mental energy. You need to burn those mental calories on something else you want to do.

Speaker 3: 44:39

Yeah, yeah, I remember I was working for a while. I was working at a venture capital firm and I was taking time like at lunch and I was trying to do well, part of it was when we were acquiring this company. But I was also trying to do a rollup of eyewear companies because I had started this eyewear company. I was like maybe I could get like merge some of these eyewear companies together and start a new company. Yeah, and I was like doing that on the side, like calling people and like trying to get them to join this company, and be like, yeah, then we're going to go raise some funding. And it was just like for me it was just fun Like, yeah, maybe I could get this done, like on my extra time.

Speaker 2: 45:16

Yeah, and that actually brings up a good point. Explain to people what a rollup is. Explain to them how that works.

Speaker 3: 45:22

So a rollup is there's a few different types of definitions for this, but a rollup is where there's basically a market that you want to go after. So what you brought up earlier HVAC companies. So HVAC companies. You go out and buy a decent company in, let's say, cincinnati and you use that as a platform. So now you're going to build up systems, you're going to build up marketing, you're going to build up a brand and then what you're going to do is either buy up competitors in your own market or you're going to start expanding into other markets via acquiring companies. And the idea is that there's economies of scale to these types of businesses because you can buy more HVAC equipment at cheaper prices. You can get more scale in marketing, you can pay a back office for HR and marketing. That if one company has to have all these functions inside their company, in the rollup it can be done at the parent company level. And now you have all these economies of scale where the parent company is paying for all these administrative things and the companies that are below them only are operating. They only have the operating key people that bring revenue and contribute to the top line and bottom line. So that's the idea of rollups. There's another aspect to this where the enterprise value of one of these companies, like an HVAC company maybe you're buying it for 3X EBITDA and so you're buying up a bunch of these at 3X EBITDA, but then the parent company, because it's so big, could sell to a private equity company that's larger for 6X EBITDA, and in that case it's called a multiple arbitrage, because you're buying at cheaper multiples and every company that you acquire adds enterprise value to you and you're getting basically double the enterprise value than what you paid for it because you have this whole platform there. So that's sort of the crash course Fastest way I could explain why somebody does a rollup. Then there's a whole other area of why you shouldn't do this, because most of them blow up, because it does require a lot of operational excellence, but it's something that private equity companies do quite often.

Speaker 2: 47:32

And it's similar to. We had a guy who was an expert in franchises on a couple weeks ago and he explained hey look, there's 4,000 franchises out there. What they do is they take people who loved working for people. These are former executives who are ready to move on to something else. Right, they want to leave. They've got a lot of business experience. They don't know what they want to do, but they're interested in franchises. Well, these guys filter out all the crap, franchises that aren't going to work for this person and their business style, their personality, what they want. Maybe they got three kids. They want to spend half the day with their kids. So, okay, I need to find you a franchise that does this, where you only have to work this many hours. You're not going to make as much, but maybe you got more time with your kids now. So, but all these franchises they actually filter out of the 4,000. They whittle that down to maybe a handful that they really like. But the ones that they like are going to have the best processes. They're going to have those economies of scale like a McDonald's. Mcdonald's isn't necessarily a food company, they're kind of a real estate and process company. When you buy. McDonald's. You're buying a process, right? Yeah, you're buying the buying power, Like if you went out and tried to start your own hamburger franchise. You're probably paying 50% more, maybe more than that, to acquire the same stuff to make that hamburger than McDonald's is able to buy that.

Speaker 3: 48:58

Yeah, absolutely, McDonald's is always. I mean, I respect the hell out of McDonald's. You go to McDonald's in any country and usually they have the cleanest bathrooms and everything tastes exactly the same as it does in any other country. It's truly an amazing company.

Speaker 2: 49:15

Well, the one in my neighborhood where I grew up. You might get stabbed or shot, but it won't be by the employer, It'll be by some random person who goes in there and just upset that their fries are cold. That's what's going to happen. But as a company, yes. Mcdonald's is very efficient, Chick-fil-A another one. That has taken it to another level as far as, yes, we have the process down, but now we're going to improve the customer's experience with customer service, which is part of the process.

Speaker 3: 49:44

Yeah yeah. I love franchise businesses. I think they're amazing businesses. That's an actually cool business, like to kind of be a franchise coach, like to get people into the right franchises. That's an interesting angle. I've never thought of that.

Speaker 2: 49:58

Yeah, yeah, but it doesn't necessarily have to be how much you're buying a hamburger for. Part of the process could be the way you train employees and how they act and how they. That's part of your brand. It's not just the logo on the wall, it's what does that logo represent? What represents that logo? It's the customer service, it's the food quality, it's a consistency, it's the speed, it's the process, it's the bathrooms. Is there parking available? It's all that stuff is part of that brand. Those experiences that customers have with your brand is when they see your logo. Boom, it hits. When I see Starbucks logo, I'm like, yeah, I can get my drug for the day. The caffeine mixed with the sugar is more addictive than I think cocaine. That's my drug of choice. When I see that logo, I know that I'm going to get my caffeine fix. It's that way with what you're talking about, with these rollups and things like that, it's similar, I guess, in a way, to what you're doing now with Lanteria. You're doing really the same thing. You're picking up this software. Are you incorporating what? If these softwares are built in another technology, say, they're built on a lamp stack or something, and it's not a Microsoft type of thing? How do you overcome that? Or is that a separate thing? Or do you not even look at a Google technology company?

Speaker 3: 51:21

No, I mean we're pretty open to the technology. The way we see this is we're trying to build a back office database, knowledge of the HR space and have HR professionals that we can reach out to and sell to. A lot of what we see is the synergies. Here is more on the sales side and top line stuff versus the product side. I think from an acquisitions perspective. I've looked at this a lot. If you only focus on the tech stack and trying to make sure the tech stack fits, you're going to get into a situation where there's very few targets that can fit for you. What you have to focus on is just does the market fit? Is the product good enough? Is there looking at individually, is there too much tech debt on this product? How does the product work? That's usually what we're focused on. Our focus is keeping them as individual businesses and if we can figure out ways to roll them together. For example, lantaria. We're talking to a company right now that we could turn into a module within Lantaria. It would be a great product that would fit inside of ours, but we could keep it as its own standalone product as well and just have as a complimentary thing that we sell. But we would keep it as a standalone company on its own as well.

Speaker 2: 52:36

I love it. Well, tell people what you're looking for. Tell people how they can help you or how they can get in contact with you if, say, they've got an HR company they want you to look at, or if they're interested in using your software.

Speaker 3: 52:50

Yeah, so I mean, if you're interested in using our software, check out lantariacom L-A-N-T-E-R-I-A com. We're going to set up a demo. Our sales team will get in touch with you, hopefully in 30 seconds, if they're following our process. Correct, there you go, and what we're looking for is we're trying to raise money right now. So we're raising money so we can buy more of these, so we can invest more into the ones that we have and sort of grow this. I mean, what we've done right now is sort of buy the first ones to prove the thesis. We've been able to grow them about 30, 40%, and now what we're looking to do is take this to the next level and sort of grow these businesses and acquire a few more. So that's what we're looking for. So people can look me up on Twitter, linkedin, shoot me an email and help join in the journey.

Speaker 2: 53:44

And all they got to do is look up Andrew Swiler, s-w-i-l-e-r on any of those sites and you'll come up.

Speaker 3: 53:51

Yeah, exactly Perfect.

Speaker 2: 53:54

Andrew, this has been awesome man, and don't be surprised Now that I know I'm connected to you. Maybe I hit you up one of these days if I decide to reignite this Vanda company that I had going on.

Speaker 3: 54:05

For sure, if you try to come to Barcelona and look me up too.

Speaker 2: 54:07

Oh, you already know, We'll go get some truffle pizza man.

Speaker 3: 54:10

Yeah, for sure I'll find some more stuff for you. I'll introduce you some other stuff that we have here too.

Speaker 2: 54:15

Oh yeah, maybe probably even better. I mean, we were on freaking Los Ramblas, so who knows, who knows what we were eating there. Well, thanks for being on the show. This has been awesome and, yeah, good luck with everything you got going on.

Speaker 3: 54:27

Thanks, adam, it was a pleasure. Thanks for having me on.

Speaker 2: 54:30

Thanks for joining us on this week's episode of Side Hustle City. Well, you've heard from our guests, now let's hear from you. Join our community on Facebook, side Hustle City. It's a group where people share ideas, share their inspirational stories and motivate each other to be successful and turn their side hustle into their main hustle. We'll see you there and we'll see you next week on the show. Thank you.