Touchstone Talks: EP 1 - The Ups and Downs Owners Face

It's getting better every day,
but it's probably not perfect right now.

And I've sort of had some results
where I scratch my head and said,

this doesn't feel right.
Why is. This here?

Yeah, yeah.

But, but yeah. So that.

So there you go.

There we are. Off.

Everything seems to be going well.

Excellent, excellent.

Okay, so if you're just joining us, we're
sitting here with, Cosmo, who is joining

touchstone Talks today
to talk about his experience exiting,

for our promos.

He means

he's a client with touchstone.

And we worked with him
to find a partnership to take his business

to the next level
and let him head off to retirement.

I still hate that word.

So I heard a great word.

And you tell me if you like this one.

Okay.
Thank you. It's called pre-retirement.

Okay.

It sounds. So a little. Younger.

It is? It does.

The idea is that it's not

sitting on your couch all day.

Yeah, it's it's before that. It's the.

What did I not get to do that
I wanted to do now.

I like that a lot better.

And that was my one of my concerns.

Like, once we were going to be free
to do whatever we wanted every day,

and and the first week or two, I'll tell
anyone is just chaotic.

You're nervous.

You don't know what to do.

So just just go with it and stay busy.

But eventually the dust settles
and you kind of find a rhythm,

and it's a different rhythm.
Then working every day.

But you find with that rhythm needs to be.

And I agree, you need to have stuff to do
because it can't just be getting

up, doing exercises
and then maybe reading a book.

And I sort of made a point not to read
too many books, because I could go 3

or 4 hours a day with the book in my hand
and sitting on a couch.

So, you know, I've tried not to do that,
at least not during the day.

Maybe at night.

Okay, that's a good call.

But pre Tyerman I like that.

I was sitting at a, showcase

and there was a panel, and,
the gentleman that was speaking

was, a retirement coach and he goes,
I don't like the word retirement.

And I'm like,

I don't like the word retirement either.

Sounds so final, right?
Nothing after that.

Right.

Well, I think about,

you know, long walks on the beach
and twiddling your thumbs, right?

Like, that's.

That's the only walk on the beach
so many times before it gets repaired.

Exactly. Exactly.

And and I think volunteering
is a big part of it.

And spending time
with your family and traveling.

Yeah.

Those are all the kind of things
that we've tried to

do as we have more free time.

Yeah, I get that.

I get the, the,
the panelists that were there.

One of them was in divinity school.
Oh, wow.

And one of them had started a nonprofit,
and one of them had written three books.

So considerations for other Ways
to include books.

I was like, that is not my definition.

That is, that is a more realistic view on

what would likely happen
if I were to exit my job.

I, I don't think you'd want to read
any books that I write.

I not I'm not a writer.
That's not a skill set.

I have.

My wife is terrific at it,
but but for me, it would.

I always sort of joke
my would be more all bullet points.

Very clear, very concise, but very boring.

Technical
writing is a higher field, honestly.

Keep that in mind.

So if you ever get really important,
you can go write some instruction manuals.

There you go. Put that on my list.

But it's good to have a list.

So so that's you know, that's
I guess that's important.

If you only honestly took a couple weeks

to get a new rhythm,
I think you did it quite well.

Yeah.

Maybe it's more of like a month or two.

I think what I and I,
and I always tell this story,

I think a week or two after we sold in,
the dust had kind of started to settle,

and we weren't going into the office
that much is when I sort of

would come down and say, okay,
what am I going to do today?

So I, I needed to fill my day.

So my wife has,
a theater production company,

and she had a website
that's been sitting there for ten years.

And I said, oh,
it's time to give her a new website.

So I spent the next probably month
give you're working on a new website,

including some video
from past performances and

and every day I'd go down there
like a job now and then.

Once I got that out of my system,
I could sort of let go and sort of,

you know, used to
what I really wanted to do.

That was your retirement. Yeah, right.

So check the box.

Yeah. Exactly.

Excellent.

Well, let's rewind time a little bit.

A lot of our viewers
are going to be business owners

who are going to be in the same spot
that you were.

Worried about
what does retirement look like?

But still going.

Okay, well, but maybe I do want to exit.

So what made you
decide it was time to exit?

So I think it's a process.

I don't think it's any one data point.

And and, I own four hour

promos with, a partner,
Tim, Raymond and Tim,

had a clearer mind
about wanting to retire,

and I teased him a lot about it
ahead of it, teased them after it.

We teased him during.

It, and we teased him during it. Exactly.

But it was helpful for me
because I think I needed

that little nudge
to know that it was time.

And and,
we started it early, as you may recall.

Pre-COVID. Right.

We had initial conversations
with, with with you and Jeff

Rich and,

once Covid hit, we had to sort of
put it on the back burner.

Right, right.

And so we had so had a lot of time
to sort of process it.

And I think for me, along with Tim's
help, it

I came to the realization
that there's certainly

a lot of growth left in for our promos,
but I didn't have the

the fire in the belly, as they used to say
to, to want to bring it there.

And, and once I realized that,
I knew it was in the best interest

of everybody to step aside
and have someone else do it.

And, and so,

a year and a half later, sitting here,
it's very clear to me going through it.

It's not at all.

It's fuzzy.
You have days where you're second

guessing, days
where you want to backtrack.

But but I think overall, the fact
that I knew I didn't have the same

desire that I had ten years earlier
sort of made it clear that,

you know, I had to step aside.

And that was a good thing, wasn't it?

Yeah.

Well, and you guys, bought the company,

which is something else
that, you know, we work with people on.

That's kind of an unusual situation.

How did that process?

So, that was probably close
to 20 years ago now, right

when we found ourselves,
wanting to run another business,

and we stumbled
upon the e-commerce sector.

And so that's probably 2004, 2005,
still relatively new.

Me. Google was still Google,
but it's not the Google that it is today.

And so we kept looking for e-commerce
companies and,

and we eventually stumbled on one,
within the commercial products industry.

We knew nothing about the commercial
products industry, but we liked e-commerce

and so we bought a small
we sort of say a shell of a company.

It wasn't named for all promos.

It had a website that was very clunky,
and we really got into the innards of it.

It really wasn't e-commerce,

but that was okay with us
because it gave us the the framework.

It gave us the the network of suppliers.

And, and we immediately got introduced
into the industry.

That probably would have taken a couple
of years for us to figure out on our own.

And then within a year, about a year,
we launched for our promos and,

started on pay per click.

And that's, that's another sort of,

yeah, story that was somewhat

random, not planned out, but,
you know, was.

Pay per click was random for us, really.

We started for our promos thinking
that we were going to, have a catalog,

a full 20 page catalog and do direct mail.

Okay.

And so we were working
on developing the catalog at the same time

that we started pay per click,
because we were certainly aware of it.

And over time

and not a long period of time,

maybe a couple of months,
we realized the economics of pay per click

were so much better than then
catalog mailings,

printing, writing, the postage,
the response rates, the lack of control.

So we never even got the first catalog
off the ground.

We just shelved it
and we weren't entirely on pay per click.

And I can remember the first month where
it was, you know, all in on pay per click.

I forget,

I do know how much we spent,
but the results were disastrous.

I mean, it was just awful.

Oh no. But we learned.

Okay, so through trial and error,
you know, as the months unfolded,

we got smarter and better
and and we just stuck to it, you know,

and I think that's for me,
I think if I give anyone any advice,

if you're starting a company or
if you're in an entrepreneurial situation,

just never give up.

Just keep,

you know, don't listen to other people
if you think you're right,

make your changes.

But just keep at it.

Just just never give up.

That's that's excellent. Yeah.

So that's how it started.

And and you know, we had a lot of,

input, both requested
and not requested from different folks.

In the industry 20 years ago,
there was a lot of talk

about the e-commerce companies,
of which we were one,

just not not sustainable
the industry for.

Sustainable. Because of the industry.

Some folks within the industry
20 years ago, thought that,

you had to meet with your customers
face to face.

You had to show them the merchandise
and, Touch, feel.

Touch and feel and, and the e-commerce

sector
was just never going to be successful.

We said, okay, but we stayed on our way.

We didn't let that bother us.

And then once we were, we got our feet
on the ground and we we saw some success.

We heard from everyone in the e-commerce

space, don't build your company
just on pay per click.

You know,
build it on multiple fact factors.

It makes perfect sense
right from the outside. It's right.

Diversification. It's everybody's right.

Everybody wants you to diversify.

And and ultimately we got there.

But we took a lot longer than I think
anyone would have recommended we take

because we were in complete control of pay
per click.

We we could
we could decide how much to spend.

And we got results every day
and we able to react on those results.

And, and for us, in those early days

where cash wasn't in abundance,
we had to be sure

that whatever we were going to invest
in, we needed to pay back.

And we looked at our organic traffic.

It's a much more long term view.

And so we didn't have the luxury of that
long term view.

Somebody ready to buy? Yes. Yes. Exactly.

So, so initially we
we stuck with pay per click.

We did not diversify.

But then over the years,
you know, we did.

Well, I remember we'd already started
talking when you started doing the email.

Email marketing.

Yeah.

Email marketing, you were
that was relatively new

and you were talking to new companies
and that was

which I guess
is kind of an important thing

to think about, that I don't know that
all of our owners think about.

Right.

Even though you're planning to sell,

and it doesn't mean you stop growing,
right.

Like, oh, absolutely.

You can't just I'm going to sell now.

So now I can, you know,
not worry about those anymore.

You know, it's just the opposite. Correct.

Okay.

We we we we felt it
when Tim and I would be sitting there

in the middle of all this
and knowing that, you know, the year

before we went out into the market was the
everyone was going to look at.

And suddenly we looked
Tim and I looked at each side

and we said, after 15 years,
you know, we didn't worry about it

as much as we're worrying about it now.

Yeah,
because if we missed, it was just Tim

and I missing and we said, okay,
we'll do better next year.

But now it was important to us. Yeah.

And and so yeah.

No absolutely I think and unfortunately
it's going to be the most stressful

as you go
just before you go and bring it to market.

I mean that's.

Just oh absolutely.

Every month.

Where's your TM. Yeah.

What Tim. Now what's our team forecast.

Yeah yeah.

What's your view of it.

Oh my goodness.

And then and then you worry
at least we did.

We were very conscious of what we said
because we didn't want to.

We don't want to over promise
and we didn't want to.

We wanted to be as realistic as possible
without hurting ourselves.

Right.

It was quite the balance.
It was a balance.

To think through.

And as you may recall,
we were going through tremendous growth

in that year leading up to to selling,
which was great on on the front end.

But we had a lot of operational concerns,
right?

We couldn't handle
all the orders coming in

and then we couldn't
get back to the customers.

Something that was always so important
to us was making sure

that the customer was happy,
and then they got answers right away.

Suddenly we were
we were in this situation where we

we couldn't sustain the customer levels
that we wanted to.

That interrupt bothered us, but that was
that was a reality and we owned up to it.

I mean, oh. You're in trouble.

It was a bubble and we had a
they you know, part of diligence

is they review everything.

So they were on your Google reviews
and they were spot.

Why why is this review say this
what happened here. Right.

And so we we we were just open about it,
you know, this is the way it is.

And so, you know, in some respects
it was an opportunity because

because they, they could do a lot better
in the subsequent year or two.

And so yeah, unfortunately,
I wish I could say it's,

it's an easy it's
you made it as easy as possible.

But it was it's a, it's it's it's
stressful process.

It is a stressful process. But

so was operating the company.

Yes. Right.

Like, entrepreneurship
doesn't come without stress.

So people that have started
and operated a business,

I think are, are a very

precise human being.

And persistent.

Yes. I do think that's a key.

And, and, in the early years
it was extremely stressful

because one mistake
could be the end of the company.

Right.

And and Tim
and I realize that we didn't always we

we tried to shelter the employees from it
because that wasn't their problem.

Their problem was to do their job.

It was our problem to make sure that.

You could.

Take them for another day. Right.

You gave them to do their job. Yep.

And it was years later
before we sold that.

One of the employees who's been with us
for almost from the beginning said to me,

wow, you're just you're not

you're not as you're more easygoing
than you were a few years ago.

And then I could say, well, yeah,
because I was worried

that we weren't going to be surviving.

And so it was, it was it was nice to hear
that at least I, I wasn't,

as stressed as I

was in the early years
and they, they sort of perceived that.

But it was important to Tim
and I that we didn't share all the,

all the what ifs with, with the staff
because it's not their problem.

No problem.

And that's a good, a good attitude. Yeah.

Yeah.

And creates a healthy work environment.

So you guys were very focused on, like,
your employees were so important

to you?

You know, we we always said
we all, we all needed a job.

We all needed to work, but we can try
to make it as pleasant as possible.

There are some days where it was stressful
for everybody.

We couldn't avoid that,
especially when things got really busy

and there were backlogs.

But,
you know, generally we tried to treat them

the way we treated everyone
in the way they wanted to be treated.

And so, you know, we, we

we ran a flat organization, right?

We didn't have a whole bunch of layers.

We didn't have a whole bunch of titles.

And that was by design.

We just wanted everyone
we wanted to empower everyone

to be able to do their job
so that they didn't need to come

to somebody else
to get, directions or feedback.

And, and, and that worked great for us. It
but when you, when we were close to 50

employees towards the end, we realized
it was time to create an organization.

Some.

Structure, some structure, and,
and that was another reason,

that we knew that it was time
because that's, that's

we had left
the big corporate world decades earlier.

And so we didn't want to go back
to an organization

that was structured like that.

And, and, but it was needed.

And I and I know since the acquisition,

we're more of an organization is in place
and it's appropriate even to need.

To grow to the size
that they're projecting to grow.

Now. Yes.

There's got to be a hierarchy.

Everybody cannot come to Cosmo. No.

And and you could probably have,

you know, the last year
that we were there,

we probably needed a little bit
more organization than we had.

But.

You know, people get comfortable with
what they are in and change is not easy.

And if we were pushing you
out of your comfort to exit,

then pushing you into a structure
at the same time could disrupt everything.

Right? Right.

Because we did. Actually,
we talked about right.

Should we, should we be looking at a GM?

Should we get another
a management level in here?

And, and should we promote people
to create an organization.

And, and we, we all sort of collectively
agreed that it would be too artificial.

It'd be too.

Yeah. Forced. And so.

I don't think you had the right people.

Like.

That wanted that.

Yes.

And that's kind of an important decision.

You can't just.

I promote you and expect them to achieve.

Well, I promote you,
but I don't really want to be the person,

you know, training you
or telling you what this new thing.

Right.
So it's a fail. Fail for both of us.

And we didn't
want to set anyone up for that.

So I'm glad that we didn't do that.

It was an easy decision.
I mean, you guys were right there with us.

Yeah.

As we were having those conversations
that it just didn't make sense

to do anything other
than what we had done for the previous.

And there were plenty of owners
that we work with that were like,

you know, he's actually
mostly in charge already.

We could change his title and his his
you know, his optics are.

Yeah, mostly that title. Anyway.

But that just wasn't.

We didn't. Have you guys.
You didn't have that.

No, we had strong people
in in each of the functions.

We didn't have a general manager type.

And so,

yeah, that was clear.

It was it was clear to the organization,
I think, too.

Yeah, absolutely. Yeah.

But the exit has been good
for the employees as well.

Right.

It has
and we touch base with them occasionally.

And, a year and a half later,

everyone that I've talked to in the sense
that I get is that they're happy.

They're, they're,
they're they continue to be treated fairly

and they're given opportunities
as the organization grows.

There is opportunity for them.

And that's one of the things that
we talked about with the employees once.

It was widely known in the weeks
leading up to the to the transaction

that it would be different,
but there'd be opportunity.

And that's that's one of the
the positives that could come out of it.

And it did.

So that I know it makes
Tim and I very happy.

That's good.

That it's it's worked out
the way that it did.

Good.

And we see often
what happened with you guys.

You guys were both given a board seat,
for the growth.

So what does that involvement look like?

I mean, it's obviously
not filling your day to day.

No, that's not the goal. Yeah.

Our involvement now is, is

is solely as an investor,
as a minority investor.

And we do attend
the quarterly board meetings.

And it's nice to get the information
and see where things are going.

And occasionally maybe
there's a question or two that that will

Catherine or Patrick might reach out
to, to to get a quick answer.

But but other than that, you know,
that's, that's our involvement.

And it's, it's nice to see that
it's continuing to grow right from.

Yeah, from having created for our promos
now almost 20 years ago

to, to it being one of the top
distributors in the industry,

you know, is is makes us proud.

Absolutely.

When you have your commercial
running next to for imprints,

you'll be able to say,
I did that at least at the beginning.

Yeah, yeah.

We came up with that name.

So yeah. So it is excellent.

But yeah, but the you know,
the organization now is thriving.

It's got good management team that Patrick
at the helm is doing a terrific job.

Catherine, who you met,

brought in from Hadley,
is exactly the right person.

That should be good. So good.

And and so I
and and the employees are echoing that.

Good, good, good.

Well, and we thought
that was very important when we met her.

And we met her during the diligence
process, which is a big help.

Doesn't always happen, but happens often
that you want to meet the

the kind of the person
that's going to take over.

Yeah. In advance.

Yeah.

And I think we picked up on it right away
that she had that right balance.

And she, you know, she certainly knew
what she was doing and is very competent.

But she had she had compassion.

I think that's part of the equation
in terms of your moving forward.

How do you, and treating employees
we talked about earlier,

you know, having compassion,
understanding, empathy,

you know, understanding,

you know, you know, where their head is at
and what they're going through.

And, and and accommodating
that to the extent that you can.

Yeah. Yeah, yeah.

What was the worst thing about diligence.

And you can't say. Me.

Yeah, I won't say that.

They were just there.

Got to a point
where there were so many documents

and then versions of documents
that we couldn't keep.

We couldn't keep some of it
straight in terms of where we looking at

the latest version, or is there a version
after it that we should be answering?

Like just the volume of data

that got transferred for company
that didn't have a lot of organization

in terms of the structure,
and we weren't really big on on

holding board meetings or having minutes
or having, you know, documentation.

We certainly created a ton
of it in, in diligence.

And,

and the questions just kept on coming.

I mean, they just
they just didn't stop. Yeah.

Good questions, necessary questions,
but they just kept coming.

And then at the, towards the end
when we thought we were done,

only come to realize, you know,
we had to do the whole technical review.

We sort of took by surprise,
understand why they're doing it.

Yeah, no complaints there.

But, you know, you mentally had said,
okay, we're done with diligence.

And we were. Surprised, you.

Know, I think that was maybe as we talked
through it, that was one that that was,

disappointing in the moment.

But we did it and it was fun, but.

It was actually fairly painless
as technical goes.

Yeah. Oh, yes.

We had worse. Yeah.

I'm sure.

And I think the person on their end,
Jake, did a good job again.

He he did.

He was, you know,
he was professional, you know,

and to the extent
he could be compassionate, he was.

I mean, he understood,
you know, all the dynamics and so I.

But diligence gets tricky.

How much to say when how much to show now,

what puts you at danger for overexposure.

And it's good
to kind of increase that gradually.

But I think that's right.

That's
probably very good advice because you,

you have to get to know each other one.

And while and I don't think Hadley

ever did this during the process,
you don't want to hold back

too much or hold back the significant
things that you're thinking of.

And they certainly didn't do that.

I think they were very open.

But I could see,

you're doing in steps. Right, right.

Because it could become overwhelming
if it, if it happened all at once.

Oh yeah. Yeah, a floodgate.

Yeah. Yeah.

And so, Yeah, that's
that's probably good advice.

Yeah. Excellent. Well,
we we're about done.

So I have one signature question for you.

If you had not done e-commerce
and you had not done for our promo,

and, you know, certainly
you had plenty of options

because you're a traditional finance bro
from back in the day.

So what else would you have done?

So you know, my knee jerk we answer
and I guess I can't give.

When I was 12 years old, I wanted to be
a professional basketball player.

Oh, too short, too slow
and not coordinated enough.

So I gave up on that early on.

But I, you know, there

we always had parties at for I'll provide
sort of summer picnics and whatever.

And there was and we always played
trivia games.

We made up the questions.

And there was just one time,
many years ago, where,

the employees asked Tim and I a question,
and one of the questions was,

if you weren't in your position here

at for all promos,
what position would you want to be?

And so my answer was obvious.

I said, oh,
I'd want to be a graphic artist.

And I say that because

I'm always in awe of anyone
who can draw a beautiful picture,

sing a beautiful song, act

any kind of artistic flair to me
is because I'm so far from it,

I have no ability to do it at all,
but I'm always in all of it.

So if I if I come back again,
I'd want to have some artistic flair.

Okay.

So so website design is actually a good
a good hobby.

Yeah. And that's why the theater. Exactly.

It's sort of I get close enough to
it without doing any damage.

Yeah.

Not artistic myself.

So I understand the appreciation, but.

Yeah.

So I think that's my answer.

Good. That's an excellent.

Thank you for sharing.

Yeah. Well,
thank you very much for your time today.

And it's always great to catch up. Yeah.

Well thank you.
I always enjoy talking to you.

So thank you very much.

You're welcome. You're welcome.

We we we.

Beep beep beep.