Episode #535: From Startups to Scale-Brian Anderson Shares Insights on Business Growth

0:00 I am super excited to announce that we now have a formal partnership with The Prospect Wizard. And when I say wizard, I mean wizard. Obviously, you have a website. This allows you to convert call, text, or leave a voice mail. Immediately goes to you, your sales team, or anyone else in the club instantly. MIT shows a study that if you contact the lead within ten minutes, chasing them converting goes up nine times that of the average. We got the Atlanta clubs on it, Vida Fitness, Gold's Gym, Mountainside, City Fitness Philly, College Park.

0:43 Become one of the next halo companies to deploy the wizard. It's easy to use. Go to the prospectwizard.com. Get a free thirty day trial. Talk to my boy, Dave Gallon. He will get you all set up, and let the leads flow based on the wizard. Go get them. This is Pete Moore on Halo Talks NYC. I have the pleasure of bringing back to the podcast a friend of the Square, seasoned executive, and someone we are going to be working with in 2025 to put deals together and explain how that's gonna work. Brian Anderson by way of Connecticut on the road in Austin, Texas, an entrepreneur who has had success helping other companies grow and, about to get his own little company platform, in the near future in the halo sector. So, Brian, welcome back to the show. Thanks, Pete. Thanks very much. Excited to be here. So so let's, you know, go back as far as you want to kinda tell us where you started and then some of the things you're working on now, as basically a fractional, you know, mentor slash c level executive and, you know, where you wanna take this to the next level, you know, as you build out the next chapter. Yeah. Sure. So, I'll be I'll be quick on the past, but, up until, let's call it 02/2014, I I was easy to define. Right? I ran companies. I was CEO of

2:14 a hand you know, three companies over a fifteen year span. Typical lower middle market, you know, 50 to a hundred hundred and $50,000,000 companies where I'd go in, run something, grow it, typically owned by private equity or sell to private equity, exit, and move on to the next thing. Right? But those were long term engagements. You know, you're putting everything you have into four or five years to grow the hell out of something and and, you know, make it valuable for shareholders. So I was I enjoyed that, and I had some really good runs. I mean, all all three of those things in fifteen years were high growth and nice exits. You know? Like, first one was was in the outdoor apparel space, like, 1 to 45,000,000. The second one was in the fitness accessory space. It was, like, 30 to a hundred million. The last thing was in the action sports space that was, you know, like, start up to 20,000,000. So that was all wonderful. My life changed a lot in 02/2014, and my career did as well. I became a single dad of three daughters, which is most beautiful ten years of my life.

3:15 But I made a very I made a very conscious decision in 02/2014 to put my daughters first and my career second. And, so opportunities that came to me after that, you know, I live in Greenwich, Connecticut, which is a wonderful place to to be in the private equity world and for, you know, for a finance world, but it's not a great place to run companies. Right? Because companies typically aren't headquartered there. They're on the West Coast or elsewhere. So, so anyway, I hunkered down in Greenwich and, you know, put my daughters first over the last ten years, pieced together what is still a pretty cool career. I've done a lot of very interesting things, but I've I I very, very accidentally turned into, kind of a fractional interim CEO guy. Like, you know, I'll give you an example. Right now and I'm I'm kind of embarrassed to say this because, you know, it's it's easy to do two or three things, but doing more than that is tough. But right now, I'm I'm fractionally running or helping run three different companies. Right? One and one is Melt Method in the therapy space.

4:18 One is Your Reformer, an amazing Pilates Reformer brand that's launching in The US. Another one is Drop Fitness, which is a, which is a, a booking platform, a a start up booking platform in the in the studio space. And I'm involved with an investment banking firm as an adviser. I'm working on three different start ups right now. One is with a couple of professional athletes, Saquon Barkley, notably, in the youth perform youth sports performance market. One is in this women's sexual wellness space. And, Pete, one is even in the cannabis space, in the THC beverage and cannabis space. So it's kind of crazy. Right? But I get you know, I'm I'm I have a lot of friends. People know me, and they know what I've done in the past, and and they ask me to be involved sometimes as an adviser, sometimes as a consultant, sometimes as a board member, and often to take an operating role. And it so it's cool. So, Pete, you and I have talked about this in the past, but, like, your acronym, HALO, is couldn't apply to me better because I have truly worked across all of those sports, fitness, outdoor, active lifestyle. You know, I'm not just a fitness industry guy. So I've done all I've done a lot of cool things and and have my hands in a lot of pots, but what changes for me in the near future is that, next August, my youngest of those three daughters will go off to college, which give which will give me, the bandwidth and, geographic flexibility to pursue my next thing.

5:45 Gotcha. So if somebody was to say, you know, hey. We brought Brian in here. You know, here's some of the things that he does that are kinda either unique or, like, has his own playbook on but, you know, what what a couple of things that that that you highlight is, like, here's how I approach or attack a situation. And, you know, I'll go in there and kinda necessarily prescribe something that, you know, is kind of just what was done before, but I really need to understand the DNA of a company and then the culture of a company, and now, like, this is how I kinda drive things. It's a really good question, Pete. To me, the very simple answer is the first thing I have to figure out is what they need. Right? I mean, when you when you run companies, you have to be involved in all functions. Right? You don't have a choice. So I've got pretty decent experience at every function from soup to nuts, from legal and finance and accounting and growth and, you know, growth and revenue generation and marketing and digital and, you know, you you have to be involved with all of it. Right? The boring back end stuff and the sexy front end stuff. So I have enough experience at kind of any function of a company to contribute and help out. So when I get involved in a company, the what I really need to understand is what are they good at and don't need my help, and what are they what are they lacking and and could use my help. And then I kinda work with the founder or the board to figure out, okay.

7:04 You seem to be good at these three or four things. You seem to be you could be better at these other five or six things. Let's focus on those and and, you know, and and figure out how to make the company better in those ways. And so it really depends on what a company needs. Sometimes they need to grow. Sometimes they're a mess operationally. They need they need cleanup and and, efficient operation. Sometimes it's people. Right? Sometimes the team is culture's wonky or the, members of the team, some of them aren't performing, and it needs to be cleaned up and and improved. Got it. And and when you take a look at some of the success stories on the fractional side, you know, give us a little bit of insight into that went in there. This was the problem. You know, I was able to figure out a way to to address that or deliver that, in a way that caught buy in. And, and and basically, the founder then or or whoever you your you know, the stakeholders were basically say, hey. Look. Even though he's fractional, like, he's helping us drive the business externally, Yeah. You know, versus internally. Yep. Really really good.

8:12 There are a couple that come to mind. So last year, I had the privilege of working with p volv. You're aware of p volv. Right? It's kind kind of a darling in the industry now, franchise business. Great low impact, fitness modality, and I had the pleasure of working with them for about six months. Same thing. You, like, sat down with Julie Cartwright, who's a beautiful leader. She's amazing at what she does. And just just looked at the organization, like, what are the weaknesses here? What can be improved? And plugged into a few holes to help out. And, you know, like, one example was sourcing. Product sourcing, they did they had beautiful product, but they were paying really high cost. So, you know, we worked on, reducing their sourcing cost and got their you know, delivered a solution that got their cost of goods down more than 20%, which is gigantic. Right? And there were other functions of the business, you know, with which we were involved as well. And I did that as a team. I did that with Moe Iqbal and and also Deborah Struggo, both OGs in the industry, and we kind of each helped Julie at various functions. Deb sort of dove into franchising and and studio operations. Moe dove into the tech side, you know, and and after a few months there, you know, Peeval was just operating a lot more smoothly and and good shape and and improve their pro form a EBITDA by many millions, which was cool. So, like, that's an example.

9:25 Right right now, I'm working with, you know, a a US startup, a a company called Your Reformer that makes, Pilates reformers and and digital solutions for Pilates. They crushed it in Australia over the last couple years, are just now launching in The US, and they're really good at d to c. They're they're really buttoned up at digital marketing and customer acquisition and building their list and selling to d to c. So they didn't really need me there, but what they need is exposure to the commercial market in The US. Right? Gym chains and Pilates studios should be buying their product and using it because it's, you know, it's pretty awesome. And, you know, worked on some legal things and worked on some finance things. So, it's kind of a it just depends on what the client needs.

10:09 This is Pete Moore. I wanna let you in on a little secret. There's this company called Promotion Vault, and what they do is they give out rewards from retailers that allow you to incentivize your members without having to do zero down and one month free or giving away shakes or giving away t shirts. What you wanna do is build a rewards program that lasts, that people value, and that doesn't discount your own products and services. So here's the deal. There's something called rewards vault. The rewards vault is going to allow a member to set up their own profile. They are going to answer questions. You are gonna get those answers. You're gonna be able to target those members, and you're gonna reward them inside your club, inside your spa, and outside of the club, and outside of the spa to get them to become loyal, to get them to pay their monthly dues, and to be rewarded properly for the actions. A lot of companies are cutting back on rewards.

11:05 You shouldn't be. Promotion Vault's your answer. Trust me. This is real. The one thing I find unique about you, and you can either validate this or not, is, you know, you kinda go into these fractional opportunities and basically say, hey. I'm gonna drive change. I'm gonna try and move the needle, and then I'm gonna figure out a way where you don't need me anymore. So is that, like, a mentality? Because a lot of consultants a lot of people from the outside are basically trying to, like, lock in recurring revenue and saying, like, hey. You know, here's what I need to do, and let me, like, create a new assignment for myself where you seem to contact me on an episodic basis and be like, yeah. I kinda I I I I went in there. I got it done. And now I'm getting my I'm, like, working my way out of it instead of, like, working my way deeper into it. Exactly. I love it. Dude. So very much so. But, dude, you know what I love about this? You're a Harvard MBA. I'm a Wharton guy. What is the first thing you learn about capitalism?

12:07 For profit companies exist for the benefit of their shareholders, period. Right? For their shareholders, not their employees, not their consultants, not their leader, not their whatever. It exists for the benefits of the share for the benefit of the shareholders. That is my job. Right? If you're a CEO of a company or if you're hired as a consultant or if you're in any role, your job is to increase valuation because that is what was right for shareholders. And, you know, if all of us thought that way, companies would probably be a little more successful. But when I go into a situation, you're exactly right. I'm not trying to perpetuate my own deal. It's the opposite. I wanna impact the business as positively as possible in a short period of time, get the company operating better and making more money, and then get out of the way unless they unless they continue to need me. And it's not good for me maybe to not have an ongoing engagement, but it's what's right for shareholders. Right? That's adding value.

13:01 You know, like, the election was three days ago. This is a perfectly analogous thing. I'm not gonna talk politics because I hate it. But but one of the things I can't stand about politics is that almost all of those people, all they're trying to do is get reelected. Right? Everything is about trying to get that next election or get that promotion to the bigger position or whatever. And that just so they're not they're not doing what's right in many cases for the country, for the state, for the city, for the town, for the whatever because all they're doing is trying to get sound bites for the next gig. And when I work with a company, I don't wanna do that. If it's you know, whether it's right for me is not the point. What's what's what's important is what's right for shareholders. So I wanna I wanna improve EBITDA, help out, and get out. I'd say every year or two, I I I get signed up on a deal, and then I I realized, like, this this this is not gonna work.

13:50 And and I get their wire information. I send them back to a retainer. Have you been in situations where you're like, hey. This sounded great. You kinda said everybody's open to change. Everyone's open to, like, a a fresh way of looking at things that you got in there. You'd be like, look, I I just don't just either from a cultural standpoint, from, like, a product standpoint, you know, it sounds good, but, like, it's just I I don't think it's gonna happen. Can can you give us a little insight into certain things that you walked into and said, hey. Look. I got an exit case left here because I don't think you're gonna be happy, and I'm definitely not gonna be able to to execute. Does that happen? Damn, Pete. You're good at this, man. I I I have been in I have been in situations like that. I'm not gonna bring up specifics, but, yeah, there it happens. Right? Sometimes it's cultural fit or a rub or, you know, these things aren't good. Another another, reason for which that happens sometimes is, you know, what it takes to get a company created and off the ground is often a very different skill set and very different mentality than it takes to get it from off the ground to something bigger. I'm not good at the prior of those two things, but I'm pretty good at the latter of those two things. But in order for a founder strong founder led business to work well with that person who's gonna try to take it to the next level, you've gotta collaborate well. Right? And I've had some wonderful situations like that. Sue Hitzman at Melt Method, who you guys just interviewed recently. Sue is that strong founder. I came in to help the company get make the company better. We work really well together because she didn't have pride of authorship. You know, she sorta

15:22 let go of the functions that, you know, on which she trusted me to make it better. But there have been other situations where the founder just can't let let go of their baby. And Mhmm. You know, and it's it's a little tricky because if you're in an operating role, if you're in a w two operating role, then I'm, you know, I'm gonna do what's needed. Right? But if you're in an advisory or consulting role, you're not really in a position to mandate what happens. All you can do is kind of advise and and guide guide the guide the shareholders on what's right. Sometimes it doesn't work out. Right? So so that leads me to to to the question of, like, when we work together in 2025, we say, okay. Let's identify platforms. Platforms come in different shapes, different sizes in revenue and EBITDA. On my front, I've invested in seven businesses, and they're all like series a or like, you know, friends and family hybrid series a.

16:14 And what I've learned, unfortunately, from experience, like I say all the time, experience is what you get when you don't get what you want, is if you don't really have enough EBITDA for me to hire a team, or if you have, like, a great software platform, but you don't have any sales guys, and you don't have any money and and your investors are kinda worn out or, like, you just can't keep going back because you're, like, boy who cried wolf. Like, that doesn't really constitute a platform. So as you've kinda looked at, like, all the businesses you've worked with, either from a revenue standpoint or from an EBITDA standpoint of where you're starting from, do you say, look, I can't really affect change unless I have x amount of revenue and x amount of EBITDA? Because to me, that's like an Anderson platform, and anything else is, like, subscale. And, like, I can't really I can't boot I'm not a bootstrap guy. Like, I want capital. I don't wanna redeploy the capital. I wanna get the return on that capital, and I don't want somebody to say, you know, well, we we're we're on an austerity budget. So if you're on an austerity budget, maybe I'm not the right guy to come in here, and maybe I'm not trying to take a a distressed business and turn it into a healthy business. Maybe I'm trying to take, like, a healthy business that, you know, is, I'll use, like, a, you know, football analogy. You know, went eight and eight last season. I think it's still 16 games. You know, we're nine and nine, whatever they got on the new NFL format. And, like, I'll take that that that team, and I'll I'll make them twelve and four. You know? And they'll get a buy into plus. So so as we think about, you know, what do I wanna run and, like, what's the investment criteria?

17:47 Where where do you wanna start from a platform? And then where would you say, like, the largest platform for me, you know, where I could actually, like, double or triple the size of the company? Then I wanna start a $50,000,000 EBITDA company, you know, because we're gonna have to overpay for that, and that's probably pretty healthy. You know, I wanna start at three. I wanna start filing. What what what's your, like, sense of, like, size criteria? Yeah. I I mean, I'll give you the size question, but I wanna throw an extra element of this. Right? You're right. I I'm not a bootstrap. Yeah. I'm I'm not a bootstrap guy anymore. Twenty years ago, I would have been. Twenty years ago, you would have been. Right? But you kinda get to a point where you you've done a lot and you know the resources to pull in to make things better, but you need capital to do that. You need working capital. Right? Or or you need cash. Right? So but the one element you missed there, like, so what's the right revenue number? What's the right EBITDA number? Or is there a capital infusion that can get you there? Right? Because that's a big part of it. Right? A company can a company can be not profitable. It can have negative EBITDA. But if it as long as it's got the outside capital to give you what you need, then then it's okay. So, yeah, I I'm, you know, I'm kinda beyond the point of, you know, 27 year old scrappy crazy startup. Just make it happen out of thin air.

18:58 It I admire those people, and I'm not that person anymore. So I need some scale. To does it now, Alex, try to go to your answer on size? I I'm a, you know, I I I'm not I I'm not really very interested in going sort of sub 10,000,000 in revenues unless, you know, unless it unless I detect a lot of growth potential. Right? If something's a $5,000,000 thing and I really think it can be 25 or 50, sure, I'd take a crack, but, you know, I'm I'm kinda more comfortable with ten, twenty, and up. You know, I've done companies that were 50, a hundred, up to a 50, and I and I'm comfortable with that scale. But, you know, I think my wheelhouse, you know, it's not the pure startup world even though I'm involved in a couple right now as an adviser or a board member. And, you know, and now that I'm freeing up next summer, right, in terms of my personal life, I'm freeing up a private equity group like El Catterton or North Castle Partners or whomever might call on me and say, Brian, we've got this thing. We want you to turn it around. It's 200,000,000 in revenues. Go for it. You know? And I'm open to that. But I think my wheelhouse is kind of in that 10 to 50 range. You know, it's sort of $1,020,000,000 dollar company that we think we can triple. And by the way, if you can triple revenues from 10 or 20, you know, you manage expenses carefully, and EBITDA might be able to 10 x, right, or five x on that. And and that's a you know, I like that because at at the end of the day, it's all about the exit for investors and and for a leader. Right? So, like, Pete, so if you and I do that thing in 02/2005. Right? You either buy a platform in 02/2025. Right? You either buy that thing that's $10.20, and we say, hey. We think we can get this to 50, or we

20:32 buy four things that are 10,000,000 and say, okay. We just acquired 40,000,000 in revenues and a little bit of EBITDA, maybe 5,000,000 in EBITDA. But if we can grow that 40 to 60 or 80, even just 60, but but we can synergize expenses on the back end and get EBITDA from five to 15, now you've got a valuable company. Now we sell that thing for a hundred million dollars. So, yeah. So scale scale either needs to come from what what's existing now to give you the right resources or or it's gotta be you know, or the core product and the core thing needs to have good growth potential. This is Pete Moore. Here's the last tip for you of the podcast.

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22:19 And, obviously, we're gonna do a lot of work together and and identify subcategories. But what where's your passion or, like, where where do you kind of intuitively think? Like, hey. There's some opportunities in the halo sector that either have great product but don't have good, you know, brand awareness or, you know, affinity. Or Yeah. Parts of this industry, like, just they don't intuitively make sense on how it works, or maybe they think they're, you know, maybe they think they're a technology company that but but they're basically like a outsourced, like, managed service. Yeah. Yeah. Good question. I I don't I don't think of it, and I'm not thinking of it that way. And you and I need to have a good brainstorming session and talk through this. But, what what excites me is trends, like, long term trends in the industry that that we know will have big legs in the future. Like, I get I'm gonna give you a couple of examples right now. So in the fitness world, and and by the way, I'm not limited to the fitness world because I think there's a very strong, you know, wellness, whatever that is. Right? I mean, wellness is thrown around a lot. But the shift from fitness to something much broader and and wellness is gigantic, and it's happening in every corner of the industry. So that's part of where my focus is. Right? Like, fitness used to be go hard or go home, have a 12 pack, look as good as you can, etcetera. Now fitness is has moved from cardio to strength because we all realize that having good, you know, good strength and muscle mass helps us as we get older, and it helps burn calories. It

23:51 shifted from eastern mindset to western mindset. Right? Like, holistic eastern mindset things, and I know you're big on that, is, you know, the the world now gets that and understands it. And it's not just yoga and, you know, sort of mind body things, but there's a, you know like, look at look at psychedelics. Right? Look at the acceptance and research going into mushrooms and psilocybin and other psychedelics. It's it's mind boggling, you know, mind boggling. Like, it's like five, ten years ago, that was the biggest taboo. And now the researchers from MIT and the government are looking into this stuff. Right? And it's pretty amazing. Another trend I really like, Pete, is the shift away from alcohol and to THC and other things. Right? Mhmm. We don't talk about that in fitness very much, but I've got a I've got a theory on this. So just just to sort of frame it, the alcohol industry has been in decline for a number of years, like, to the point where they're, you know, they're not in trouble. They're giant companies. But, you know, when you're running a giant CPG company, minus 5% a year is not a good thing. So lot of lot of strife right now in the alcohol industry. So why are people quitting quitting alcohol? So a lot of people are quitting alcohol or significantly reducing alcohol intake.

25:00 Why? Here's my theory. My theory is that wear is that the fitness industry has driven it. And what I mean by that is everyone with a wearable device, Oura Ring, Apple Watch, Whoop, all of them, you realize that when you have a few drinks, you sleep like shit. Right? You have terrible sleep night sleep. Your sleep score was a 62 instead of a 90. Right? And and seeing that over and over, I think people have said, I want I I this is not good for me. I'm not sleeping well. It's bad for my body. And so so jump back to the business world, the nonalcoholic beer industry has exploded the last few years. THC beverages and anything cannabis related has absolutely freaking exploded.

25:41 I don't know if you read this recently, but there are now more users of cannabis in The United States than there are users of alcohol, which is crazy. Right? Yeah. Pleasant I'm pleasantly surprised by that. Nice. I love it. Yep. I know I know you're already I know you've been there for a long time. So those are the you know, I love trends like that. Also, women's wellness. Right? Women were overlooked for such a long time, and and physiological needs are different. And menopause and what you know, hormonal things, like, all that stuff. I'm not an expert in it, but I have three daughters and a mom and a sister and loads of female friends. And that is an area that is receiving so much attention now. Some of it is is health and physical and wellness and mind body, and some of it is moving toward the sexual side. And it's all you know? So those those are the kind of trends that interest me. You know? It's it's, you know, not another gym and another way to lift and things like that even though I I still love that stuff. But moving toward wellness, moving toward holistic, moving toward, you know, away from alcohol, things like that.

26:44 Yeah. I'm I'm shocked that people drink nonalcoholic beer. Like, you know, if I could have, like, a, you know, some kind of low calorie, you know, energy drink over I'll take that over a a nonalcoholic beer, you know, a hundred out of a hundred times. So that old totals back in the day. I was like, what's that about? Anyway But but but that's a lot a lot of these CHC beverages, man, are, like, really tasty. They're like a high noon with no alcohol, but they've got 40 calories or 50 calories, and you get a nice little happy buzz from it. Yeah. You know, look, I mean, a lot of private equity funds traditionally, have had prohibitions on investing in those types of markets or products. It's kinda interesting when you see, like, I was looking at a newspaper. I was I think it was somewhere in, I think it was in LA, and I saw, like, an ad for, like, 20% off, like, ketamine. You know? I'm like, ketamine. That's like special care. That's why my kids take it, like, at at, like, rave parties. And now it's in there as, like, a PTSD, you know Totally. You know, anti depression, you know, treatment. So I'm with you. Well, look. This is the kind of recap I wanted to do, give a little people an insight into how you how you think about opportunities, and and some of the past, you know, success stories. So, you'll look forward to getting this podcast out. And if there are private equity funds that are, looking for a top executive to back, we're gonna go and try and find a deal or deals, on paper and then and then bring them to get funded and not participate in auction

28:14 processes, you know, and overpay. We wanna go in there with a thesis, and we wanna go in there and say, hey. This is what we think we could do, you know, with this company where it is today versus what it should look like, you know, in three to five years. So I I love that, Peter. And and we know the investment world loves that. Right? Because if you sit in a desk at a private equity group and your staff is looking at a hundred books coming through every month and you're just bidding against, you know so people like you and I know the industry. We know people. We have friendships of people who found these companies and own them. So being able to bring proprietary deals to the table, I think, has a lot of value. I look forward to doing it with you, buddy. Awesome. Alright, man. Have a good holiday, and, congrats on what you built on the, family side and the fractional side. And now we'll, we'll we'll get one to call the the yes. This is Anderson.

29:00 Fully big deal. Sounds good, buddy. Awesome.