ROCK THE SAFARI
This is Safari Paul coming to you from South Africa where I just got to witness my first kill!
As we watched from our Land Rover, a Mama Cheetah came out of nowhere and pounced on a weak Impala. Swiftly, and with precision, the Cheetah accomplished her goal to kill the Impala. It was all over in less than 15 seconds but left an impression on me - Survival of the Fittest is a real thing on the African Plains. Most animals have to decide how to allocate their time between eating, procreating, protecting their turf and not getting killed by predators. Making the wrong allocation of time, not being one of the fittest or taking on too much risk (straying from the herd) dramatically increases the chances of living a short life.
There are significant parallels between my African Safari experience and businesses that die or suffer during recessions, self-inflicted wounds from bad decisions, lack of strategic focus or carrying too many C-Players. Jonathan Slain and I have put together a recession readiness assessment (www.recession.com/ready) that you can take for free to see where you stand vs. others in the business survival of the fittest. If you discover you’re the Impala (score of under 70 on the assessment) and you are at risk of a predator pouncing on you, look into buying our Rock the Recession workbook which will walk you through how to get ready. If you are already a Cheetah (score over 70), this workbook will teach you how to pounce more effectively during the coming downturn!
Are you in denial about when a recession will hit?
David Rosenberg, Chief Economist & Strategist at Gluskin Sheff (frequently on CNBC) recently tweeted:
“I can’t see a recession!” “Where’s the recession!” I can’t tell you how much I hear this every single day. It’s like saying “I can’t smell the carbon monoxide.” By the time you “see the recession”, your head’s sliced off (Yikes).
From what I witnessed, I chose to be a Cheetah in the next recession, the Rock the Recession workbook is your guide to preparing to pounce!
P.S. - Put an African Safari on your bucket list! If you haven’t gone it’s is a life changing experience.
What I learned from going to China with Peter Diamandis
I went to China with Peter Diamandis (www.diamandis.com) and several other limited partners of Peter’s BOLD Capital Venture Fund recently. I’m still processing what I learned, saw and experienced. It blew my mind and changed how I looking at the world. I’ve been looking at the world only through US centric eyes. I needed to wake up!
Brief History and Key Facts
- Nixon visited China 1972
- Moa’s cultural revolution ended 1976
- China joined the World Trade Organization 2001
- China GDP grew 7 times since 2000 and now is the second largest economy in the world (theUS grew a cumulative 37% vs their 700% during this same period)
- China has 1.3 billion people vs 323 million in the US
- Total internet users 710 million and rising
- Chinese cities with over 1 million people 600 and rising
- Chinese start-ups work 9-9-6; 9am to 9pm six days a week. They estimated that three days a month are gained vs their Silicon Valley peers and 10 days on their European peers.
- Peter has described China as going from deceptive to disruptive. China is intent to lead the world in everything.
Bad Ass people we meet with:
- Dr. Kia-Fu Lee, the head of Sinovation Ventures and ex head of Google China, former senior exec at Apple and Microsoft and Times ‘100 Most Influential People in the World’
- Michael Kuan, founder and chairman of Kuan Capital, an international investment and asset management firm in Shanghai. Michael’s investment career started in 1986 as a venture capitalist in Silicon Valley. Michael shared an amazing story of his journey from China to California back to China on the train from Beijing to Shanghai.
- Ken Chang, Founder & CEO of ShanghaiValley.com.
The government is considered part of the family and is involved in everything. That is their culture and we have to stop looking at how they operate through a US view. We obviously distrust our Government and want them out of our lives and as small as possible. Again, the Chinese government is part of their family. The government is not a democracy so they are able to think long term and set policy in the best interest of China. This is a huge contrast to the US. Peter has described the Chinese government as a platform on which the Chinese citizens and businesses can build things. For example, the government owns all the land but its people or businesses can build on it.
The government has set a priority to further position digital as the core engine to power innovation in these areas:
- Mass Entrepreneurship and Innovation to encourage growth of innovative small businesses and start-ups
- Internet Plus leveraging internet and digital technologies
- Made in China 2025 to transform China into a high-tech manufacturing power. They want to own the automotive supply chain.
- One Belt One Road to create a digital Silk Road with a 5G mobile network that is intent on shifting the balance of power to the East from the West. This has huge implications so research OBOR.
- The Chinese government is intent on becoming the World’s leader in AI by 2025
- The Chinese government is developing thousands of science themed parks (health care, advanced manufacturing, AI, robotics, etc) where established companies come together with incubator start up companies. The health care science park we toured was massive.
- The companies we met with all were deep innovators not copiers. You have to lose that image of China.
- The CEO’s of startups in China are command and control organizations. Think Steve Jobs. The entire organization follows the leader without question. The leader does not ask their people about their feelings or if they should add a dry cleaning pick service 🙂
- Shanghai, with a population of 24 million vs 7.5 million in NYC, is one of the most modern cities I have visited. You really have to go there to understand the scale of 1.3 billion people relative to cities, infrastructure and transportation.
- The people are hungry and want to be part of a China that leads the world in everything important. You can see it and feel it.
- The country doesn't practice organized religion like in the west but does value economic gain. Their rapidly growing middle class is willing to spend on luxury brands for the image of it.
- China has basically blocked US tech companies from getting any strong hold in China. China wants Chinese companies to dominate the China and greater Asia markets. This gives Chinese tech companies a huge competitive advantage to catch the US tech companies in capability and to surpass them (and they are protected to pursue a 1.3 billion person market).
- China has cracked down on citizens and businesses investing outside of China unless it is correlated with the interests of the government's long term pursuits. As a result, the money chasing venture is plentiful.
- I had dinner with one of my son’s college friends who is a Chinese national and now working in Shanghai as an investment banker. He works 9am -11pm Monday through Friday and 9am - 6pm on Saturday then takes a three hour train home to his parents. He is 28 and wants to eventually run his own venture fund. He has no time to meet a girlfriend but figures it will work out once he has accomplished his financial goals (deferred gratification - haven’t seen that with US millennials.)
- It's feels kind of like the wild Wild West in China. It's the pot of gold is there and young smart people are getting after it.
- The young in China, as well as the growing middle class, want better quality air and water and better education for their children. The government is putting significant money to fix these matters.
- There is always going to be social unrest with 1.3 billion people quickly moving from poverty to middle class wealth and beyond.
Again, how can you not have an allocation to 1.3 billion people in China and the 1.3 billion in India? China is projected to overtake the US in GDP by 2020.
I’m not offering investment advice. Please check with your financial advisor regarding potentially investing in:
- Alibaba (BABA) - China’s Amazon - play on China’s rapidly growing middle class
- Bai du (BIDU) - China’s google and leader in autonomous vehicle software
- Tencent (TCEHY) - a tech investment fund investing in tech companies, mostly in Asia, but also around the globe like WeChat and Tesla.
Do not ignore China and what's happening there. I feel we are going to experience what Great Britain did after WWII. China is going to dominate the world and will be the largest economy soon. India will follow and then Africa which will move the center of power Eastward. The West will still be important but more like what Britain is now vs. what they were prior to WWII. Please engage in understanding what this means. Maybe have your kids learn Mandarin?
The 7th Inning Stretch - What is your plan for the next recession?
I attended John Mauldin's Strategic Investor Conference (www.mauldineconomics.com/sic-2017 to check out the rock star lineup of speakers) this past week and wanted to share my takeaways with you.
The bottom line is that the economic recovery is at a stage equivalent to the 7th inning stretch of a baseball game. In other words, a recession will likely be with us in the next 12 to 24 months.
Definition: Change in GDP = Change in working age population time the change in productivity.
Positives for the economy
- The Trump administration is expected to significantly reduce regulation, which will increase productivity and reduce the regulatory cost burden on business. Many speakers blamed the weak recovery on Obama's growth of regulations, of all kinds, on business. They also believed that the regulatory burden benefited large corporations, who can spread the costs of those regulations leading to high Fortune 500 profits and low productivity. Take away bad regulation within the financial services industry, for example, and those firms could shed thousands of compliance workers who don't produce anything.
Issues for the economy (please have a couple of your favorite beverages before reading further)
- Government, corporate and consumer debt is actually higher now than at the peak of the Great Recession. Debt is a tax on future consumption and thus a drag on future economic growth and serves as a drag on GDP.
- Demographics are worsening. If demographics are destiny then the developed world is screwed. The first of the baby boomers turned 70 recently and 10,000 a day (3.6 million/year) will follow them over the next 15 years. This trend is reducing the working age population and serves as a drag on GDP. 70 year olds do not spend a lot of money and they only have on average $74,000 in net worth. This tsunami will overwhelm the government’s ability to fund the social security, medicare and pensions promised to millions of Americans and will also serve as a drag on GDP.
- Unfunded state and local pension plans are worsening. This mood killer will come to a neighborhood near you soon. Think Illinois and Chicago. Same root cause as above.
- The Fourth Industrial revolution (AI and Robotics) is coming faster than people think and will disrupt employment and will be highly deflationary.
Driverless cars (all major auto manufacturers are working on this) will disrupt auto manufacturers and all things related to them (supply chains, parking lots, traffic, etc.)
- Blockchain software will disrupt the financial and insurance industries
- Solar will disrupt the energy industry and utilities
- AI/ROBO will disrupt everything else
- Note: long term, everyone was hugely bullish on everything once we get over the wall
- Consumer confidence, auto sales (there is a huge sub-prime lending market for auto's which artificially goosed the number of cars made and now defaults are climbing), new housing starts, business credit demand and inflation have all peaked (classic late stage signals)
- Much of the increase in the market recently has been attributed to 5 stocks, nicknamed FAANG for Facebook, Amazon, Apple, Netflix and Google. Many speakers shared the reasons that this concentration is bad for market health.
- The velocity of money is the lowest since 1949. In other words, new debt is increasingly being used for consumption with no payback income stream. If you borrow money to add a highly automated sheet metal machine it should generate an income stream with the ability to pay it back and them some (productive debt). If you borrow money to take your family to Disney you are screwed.
- Geopolitical dysfunction (and thus risk) is increasing (black swan events - cyber, North Korea, Russia, Iran, etc.)
- The US stock market PE ratio is high and much more expensive than the rest of the world.
- This is especially true when you consider the significant amount of market capitalization that is tied up in only 5 stocks!
What I suggest you think about:
- The market drops on average 38% during a recession
- The first term of all republican presidents who follow a two term democrat has always resulted in a recession
- Follow the demographics and invest (or build) in senior living, funeral homes, biotech, trailer parks (Boomerville was the name the experts called this phenomena and is reminiscent of the depression era Hooverville - Sam Zell (ticker ELS) is investing big in this opportunity and adds amenities so you feel better about living in a trailer park) and emerging markets where the demographics are terrific (think India and check out what Modi has been able to do - research India Stack and AADHAR holder – it’s crazy)
- Be conservative and raise some cash. Many speakers noted Warren Buffett is doing this now. If we are at or near the 7th inning stretch, just be more conservative with your investment choices. If you have something that is at an all-time high, look to take some profits off the table. No one ever lost money-taking profits off the table.
They all spoke about the end game, which will not occur for a decade or more. They called it the 'bang moment' or 'the big reset' when growing debt (government debt, unfunded promises, business debt and consumer (credit cards and student loans) and worsening labor force participation (due to demographics) hit the wall. You want to bring enough assets over to the other side of “the bang” to buy whatever you want cheaply. They all recommended an allocation to gold and/or bitcoin since governments will be required to monetize the debt overhang. The experts said to just watch what happens in Japan, which is 10 years ahead of us in hitting their bang moment.
- Develop a recession game plan for your business. Chart what your business did from 2008 - 2012 by year and see what the revenue falls off was during that time. Take your current run rate and apply that percentage.
- What overhead cuts would you make?
- What markets that you service are most exposed to a downturn?
- What markets can you enter now that will be less likely to be impacted in a downturn?
- Do you have enough equity to weather a downturn (your book equity should equal at least 10% of the next 12 months revenue for specialty contractors and 5% for GC's)
- What can you outsource or automate to take out costs?
- Be obsessive compulsive on collecting receivables and understand the financial condition of your largest customers (remember recessions expose who has been swimming naked).
- What competitors are on your watch list so you can hire their good people in the next downturn?
- Bottom line, be a Boy Scout and be prepared with a well thought out plan (think proactive vs. reactive)
- Most people now have record backlogs and can't imagine a downturn. For sure the downturn will be different in each market (senior living probably will not be impacted, as an example). Your job is to not be complacent. Be ahead of the next event and have a well thought out plan to deal with the next downturn.
- The next recession could lead to a 'Feel the Burn' candidate that wants to tax wealth (like a property tax) to address the growing income inequality gap
- Keep living life and having fun but have a plan! Just saying!
(Obviously, consult your appropriate advisors before making any investment decisions.)
My next trip is to China in July with Peter Diamandis (www.diamandis.com) to meet with Silicon Valley companies in order to determine how much of an investment allocation the BOLD Capital Venture Fund should make in China. I will report back what I learn.
What I Learned from Russ Becker, APi's CEO
Introduction: On August 25, 2016, I co-hosted 30 members of YPO's Construction
Industry Network (made up of 1,900 leaders in the construction and building services industry) at
APi's headquarters in Minneapolis to learn acquisition best practices from Russ Becker and his
APi Overview (www.apigroupinc.com)
- Approximately $3 Billion in Revenue
- Privately held with 35% ESOP ownership
- 42 Independent operating companies (mainly in specialty contracting with low capex
- 10% EBITDA margins
- 8-12 Acquisitions per year
- #5 on ENR's list
- $1 Billion of bonding capacity (they don’t need it, but it sounds impressive)
What I learned from Russ Becker at the APi event
- Culture is the most critical element of any company targeted for an acquisition
- Russ defines culture by asking these questions:
- What do you stand for?
- What kind of people work for you?
- How do you treat each other?
- How do you treat your customers?
- What level of transparency and trust do you give your people?
- APi spends several hundred thousand dollars a year nurturing and promoting their
- APi's purpose is “Building Great Leaders” from the accounts payable clerk to the guy
inspecting fire sprinkler systems to the VP in charge of a
Everyone is considered a leader.
- Russ believes that training all employees to be leaders creates a cultural competitive
advantage and he uses FMI's Center for Strategic Leadership to create that advantage
- Russ and the entire organization hate to lose money. They hate to lose money on any job. They
hate to lose money any month, quarter or year from any of their 42 operating units.
Russ described one company, which lost $300k as a “blood bath,” as if he were describing a $300
million loss. This disdain for losing money is ingrained in their culture.
- Russ’ “Rule of 2” - If there is a problem on a job and a Project Manager says we have a $75K
issue, Russ multiplies the estimate by 2 to $150k.
Likewise, if a PM says we will have a write-up of
$100k, he goes ahead and divides by 2 to arrive at a likely $50k.
- When Russ is presented with a problem from one of his operating company presidents or one of
his direct reports, he asks – “What is your
plan?” before he gives any advice.
- Russ runs a $3 billion company from a one-page dashboard! His dashboard includes:
- EBITDA Margin - All operating units ranked by EBITDA margin (you don’t want to be at the
- Under Billings - Ranking of under billing (most to least) because he doesn't want to
finance any job and under billing leads to write downs or job fade
- A/R > 90 days – AR90+ is an indicator of operational discipline
- Safety incidences – Safety isn’t just an afterthought at APi, they really care
- APi spends a lot of time thinking about what success looks like in 5 to 10 years then sets
strategies to achieve the vision.
- Russ is optimistic about the construction economy 18 months out from August 2016!
Acquisitions the APi Way
- API's top three considerations before doing a deal are:
- 1) the culture of the target acquisition
- 2) the culture of the target acquisition
- 3) the culture of the target acquisition
- Russ believes if the culture of the target doesn't match APi's there is
no deal at any price. They run, not walk,
- APi only buys companies that have management teams that want to
stay on and grow the business for at least five
- APi buys companies with 10% EBITDA margins and with a service component that is (or can grow
to) 50-60% of revenue. They’ll consider deals
with weaker EBITDA margin if it’s a good cultural fit!
- APi only closes on 20% of the deals they seriously consider.
- APi pays 4-6 times the average of the past three years EBITDA
(adjusted) with 25% of the purchase price tied to a multi-year earn out.
- APi holds back 10-15% of the purchase price for 12-24 months for representation and
- At the Summit, I learned the framework of how APi structures and prices deals. I
walked away from the event with priceless information.
Each attendee received an APi branded USB stick
with all the legal documents that APi uses to do a deal.
- Letter of Intent
- Purchase Agreement
- Earn Out and Employment Agreements
- Due Diligence and Integration Checklists
- And More...
Some thoughts from PJB's M&A experience - not mentioned
- Don't fall in love with a deal!
- Have a strategy BEFORE looking for targets. This means at least one
WRITTEN page of what type of company you’d like to buy, how large
of a company, where it will be located, etc., etc.
- Know who is going to run the company post deal.
- Build relationships with industry organizations to help you identify quality
- Take your time building relationships with potential target leaders.
- Have a process, a plan and a team in place to evaluate deals,
negotiate them, close them and integrate the acquired
company. One popular statistic is that 80% of deals fail. Lack of
prior planning and poor cultural fit are the biggest culprits!
- Look for signs of trouble. Always be willing to walk away and NEVER
- Start planning 5 years prior to a target liquidity event to maximize the
value of your company. Understand the levers that increase
and decrease the value of your
company. Get an idea of how much your company is worth now and what you need to do
to get it to the price you seek to achieve.
- Have a deal team in place 36 months before starting a process,
especially tax and financial planning support. The team would normally
include tax (both business and estate and should
be engaged 36 months out), accounting, legal and a financial planning
- Understand how deals are priced, how the money works (hold backs,
earn outs and tax ramifications) and how the reps and
warranties affect the risks you will retain for a period of time post
- Understand from an investment banker or related skilled professional
what you should expect to prepare for a sale process, the
due diligence process and the legal and closing
- Think through what you want to accomplish and why so you can decide
what kind of buyer to seek.
- Get crystal clear on the answers to these questions:
- I want to sell because...
- I want my legacy at the company to be…
- Think through what role, if any, you want to have post deal and for how
long. This answer will help determine what kind of buyer you will seek.
Consult other CEO's who have had liquidity events with strategic and
financial buyers to understand what life is like afterwards.
- Be able to answer this question:
- I'm going to do ..... after I leave the company I have led.
- Be honest with yourself!
Recommended Reading List:
Expensive Mistakes When Buying & Selling Companiesby Richard Stieglitz
Mergers and Acquisitions Strategy for Consolidations: Roll Up, Roll Out and Innovate for
Superior Growth and Returnsby Norman Hoffmann
Built from Scratch: How a Couple of Regular Guys Grew The Home Depot from Nothing to $30
Billionby Bernie Marcus (they talk a lot about culture!)
The Making of a Blockbuster: How Wayne Huizenga Built a Sports and Entertainment Empire
from Trash, Grit, and Videotapeby Gail DeGeorge (He did a lot of acquisitions)
Tractionby Gino Wickman (Good system to get the Platform and Target companies talking
the same language)
BuiltWorlds CEO Tech Forum - Chicago, April 21, 2016
Improve Engagement and Strategically Grow with Ving
As CEO and Founder of 10X CEO Coaching, LLC, a coaching business for CEOs of contracting firms, and former President and Owner of Roth Bros., Inc., a $150-million, industry leading HVAC, roofing and energy management company, I have been using Ving – with great success – to bolster business growth and improve productivity. I first learned of Ving in 2008 while leading Roth Bros., located in Youngstown, Ohio, where we were always looking for new technologies to innovate how we do business.
My first introduction resulted from a visit by my IT director to the Youngstown Business Incubator (YBI). She was so impressed by the potential of what Ving could do for us, so shortly after, we met with Ving’s leadership team who provided a product demo. And from that moment, I fell in love with what Ving could do.
For me, the game changer was Ving’s digital packets – a combination of videos, texts, PDFs and surveys – that I could use, all in one trackable packet. Immediately, I knew this was a great tool to enhance employee and customer engagement, and quickly started to become an avid user to share important company news, collaborate with employees, and communicate with customers.
Key examples of Roth Bros. use cases include:
I regularly used Ving to share company news with employees, and at the end of each video, included a survey. I discovered through Ving’s real-time dashboard that employee engagement level was only 60%! This type of data-driven insights provided immediate and specific information on employee engagement and responses associated with the content shared in the Ving packet. Knowing this, I was able to improve what was in my content and how it was delivered, resulting in 83% employee engagement.
To keep our customers up to date on what we were doing, I used Ving to share videos of company news, and in the videos, asked our customers to help us improve the customer experience by completing a survey. Through Ving’s analytics, I knew that we had engagement levels of 92%. I was also able to proactively respond to customer questions and address any concerns. For example, through one of our surveys, I discovered that our largest customer was having issues with us. My team and I were able to proactively resolve the issues by going to visit the customer, fix the problems, and most importantly, retain our customer’s business.
Ving became an important tool to grow our business and introduce new products to the marketplace. For example, I created a video where I introduced two new products and asked customers if they would like to receive follow up on these announcements. 50% of our customers responded, asking for follow up, and as a result, my team and I were able to focus on those customers. By being strategic with our efforts, we had banner year, bringing in over $2 million in new business!
Furthermore, through Ving’s insights, I learned that customers and employees preferred to engage with my videos rather speaking on the phone. They were able to watch videos when they wanted to, pull the information they needed, share information with others, and participate in surveys at their leisure.
In 2011, I sold Roth Bros., and shortly after, founded 10X CEO Coaching, LLC. Throughout the transition and to this day, Ving has and continues to play an important, strategic role in the growth of my new business. In fact, three months prior to launching 10X CEO Coaching, I would send out regular Vings to approximately 400 individuals, and based on Ving’s real-time dashboard, I was then able to identify those individuals who were most engaged with my content.
When 10X CEO Coaching officially launched, I was then able to prioritize those who would be most interested in my new company and contact them first. By being strategic with my time and effort, within two weeks of launching, I signed on 17 new clients – and as a point of reference, as a CEO consultant, I have the resources to sign on up to 25 clients at one time.
I continue to be an avid user, and with their newest version, I can now view, create and send Vings while on the go. And thanks to Ving’s actionable business insights, 10X CEO Coaching’s launch was a great success, and the company continues to grow. Ving enables me to focus effort where most needed, know who is engaged, bolster productivity, and strategically grow my business.
For more information on how their solutions can help you improve engagement and strategically grow, visit www.vingapp.com.
Learn How to Maximize the Value of Your Business
Learn How to Maximize the Value of Your Business with Expert Resource Landon Funsten
Date: 18 May 2016
Time: 11:00 New York/ 16:00 London/ 23:00 Hong Kong
Find the start time in your time zone
U.S. and Canada toll-free: 1 800 697 5978
Toll/international: 1 630 691 2750
Conference ID: 7191 037#
Please dial-in/connect a few minutes early as registration takes time to complete.
Join via the Webcast
Dial In to Discover
- The basics on how to value your business.
- The levers you control to increase the value of your business.
- Strategies others have used to capitalize on these value-creating levers.
- Landon Funsten, senior managing director with FMI Capital Advisors, Inc.
4 Steps for Developing an Exit Plan to Maximize the Value of Your Business
In 2006, Paul Belair (WPO Southwest Florida) led the purchase of Roth, an industry leading national contractor, from a large utility. He then developed an exit plan resulting in EBITDA (earnings before interest, taxes, depreciation and amortization) growing from USD3.2 million to more than USD11 million. Following that, he sold Roth to a global company achieving 83 times return on his investment in only 63 months. Here’s how he did it, and how you can too.
Step 1: Deep Dive to Get a Reality Check On Your Business
- Benchmark your business against industry leaders to identify opportunities for improvement.
- Perform an in-depth, brutal SWOT analysis.
Step 2: Understand How Much Your Company is Worth
- Consult your financial advisors for a quick estimate – many owners do not actually know how much their company is worth so they never take the steps necessary to increase, dramatically, its value.
Step 3: Understand What Levers You Control That Drive Increased Value
- Grow the percentage of higher margin annuity versus total revenue.
- Maintain a consistent history of growing the bottom line as well as the top line.
- Grow products or services leveraging technology that require higher intellectual capital to compete.
- Become a market leader and achieve an EBITDA greater than USD10 million.
- Sustain a customer base with less than 50 percent concentration from the top 10 customers.
- Maintain a transparent organization with a great culture and quality leaders.
Step 4: Make the Future Happen
- Decide which levers to pursue, and develop the right strategies.
- Identify gaps in your organization chart, and fund the talent acquisition needed.
- Consider buying a company to get into a new market segment.
- Set detailed goals and hold people accountable.
- Celebrate successes.
- Recalibrate the plan every four to six months.
Get in touch with Paul for further elucidation »
Paul Belair to speak at BuiltWorlds CEO Tech Forum 2016 - April 20-22, 2016 in Chicago, IL
Join your fellow thought leaders for this high-impact event that will deepen the discussion around how technology will disrupt our industry and what CEOs can do now to take advantage of it. This forum will join Tech and Industry CEOs for a ‘hands-on' experience with emerging technologies while interacting with your peers and making lasting connections.
Building a Greener World One Disruption at a Time: Paul Belair is a Pioneer for the Future of the Green Built World
In 2006, Paul Belair (WPO Southwest Florida) led the purchase of Roth Bros., Inc. – a USD150 million industry-leading HVAC(heating, ventilation and air conditioning), roofing and energy services company – from a large publicly traded utility company.
Realizing he could differentiate the company by positioning it as “green,” he rebranded, focusing on demand reduction through energy management systems, LED lighting and proactive maintenance of HVAC systems.
“I became aware of the growing importance retailers placed on projecting a green image to their environmentally conscious shoppers,” says Paul. “The results of the green branding exceeded my expectations. We experienced double digit annual revenue growth right through the recession and grew EBITDA (earnings before interest, taxes, depreciation and amortization) from USD3 to more than USD15 million.”
By focusing on the information gleaned from monitoring building automation systems (BAS), Roth was able to give its customers the most savings possible from their BAS investment.
“We saved one national retailer more than USD500,000 a year when we took over the monitoring of their systems, simply by putting all their stores back on the proper schedule and set points,” says Paul. “We also integrated our BAS to a demand response vendor's system allowing retailers to actually get paid from the rebate money available during event days and integrated our BAS to the security vendor's system which ensured the buildings were only lit and conditioned when people where in them.”
Recently, Paul sold Roth to a large global company; with all this new time on his hands, he has been nurturing his green passions, branching out into disruptive green technologies, solar and wind.
“The energy sector is ripe for disruption within the next 10 years,” says Paul. “Solar is going to continue to exponentially improve its performance and many more buildings will be off the grid. With the Lab of Things ( a flexible platform for experimental research that uses connected devices in homes and beyond) sensors will be in everything making buildings much more efficient. The exponential performance in solar, battery storage and the Lab of Things will change how much power we need and how it is supplied.”
In 2014, Paul attended YPO’s Construction Industry Network Roundtable, where he met founder of BuiltWorlds, Matt Gray (YPO Chicago). BuiltWorlds is a new media company dedicated to advancing new and emerging technologies to improve the quality and efficiency of the construction industry as well as that of daily life. Paul was intrigued by the organization, but it wasn’t until he attended Singularity University that he took on the role of advisor.
“I got hooked on BuiltWorlds passion and vision for bringing tech content to all segments within the built environment in order to help the industry take advantage of the coming tech disruption,” says Paul. “I became an advisor to BuiltWorlds in order to take a leadership role, helping companies in our industry successfully manage this period of rapid change.”
Another upshot of attending SU, is that Paul is now part of Peter Diamandis’ Abundance 360 group of CEO's being coached on disruptive technology.
“I highly recommend SU for any YPO or WPO member who wants to position their company to take advantage of the coming tech disruption,” says Paul. “Companies who don't engage and learn about what is evolving with tech will get disrupted.”
While for many, technology and all its disruptiveness is still news, for the Millennials and Generation Z, it is all a matter of course. These next generation leaders are growing up in a society where collaboration is king and where doing well is synonymous with doing good.
“I have four millennial children, and since their teens they have grown up with technology, social media and a deep concern about the environment,” says Paul. “I also get to see millennials in action at BuiltWorlds and at the other start-ups I've invested in and have been impressed with how much work they get done and the passion they bring to the job. I would encourage all CEOs to engage their millennial employees to test emerging technologies and redesign business processes using new technologies. The more you engage them in the things they are passionate about, the more they will produce.”
As champion of the upcoming Greenbuild Impact Exchange: Washington, D.C., Paul is looking forward to just this kind of collaborative construction.
“Our speakers include Abundant Power CEO Shannon Smith (WPO Southeast US and Caribbean Region, Southern 7), discussing how big data and the IoT is changing how buildings are managed,” says Paul and continues. “Co-founder of BuiltWorlds, Matt Abeles will talk about the coolest tech he is seeing, there will be a powerful, only-in-YPO needs and leads session and before we convene for the reception, our sponsor, Sloan Valve Chairman Chuck Allen (WPO Chicago) will give an overview of his company.”
Paul’s supports his enthusiasm for finding the nexus of profitable and progressive by leveraging SEN and YPO as a whole.
“SEN allows me to learn what other YPO and WPO members are doing to leverage sustainability to increase profits,” says Paul. “As an officer of SEN, I have the chance to be exposed to the power of the international aspect of this entire, global organization.”
Connect with Paul to learn more about the green built world.