YouSaid · the spoken record

Tracy Graham

lines on the record: 52
first: 2020-12-29
most recent: 2020-12-29
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“Absolutely. And I'm involved in Notre Dame quite a bit as well. If you come down, I'd love to take you out to one of our fascinating restaurants here in South Bend.”
2020-12-29 · Invest Like the Best · Tracy Graham - Investing in Overlooked Businesses – [Invest Like the Best, EP.206] · IDENTIFIED FROM THE TRANSCRIPT · source
“At the time, and I think it's a metaphor for just giving a kid access and letting them see the world differently than they've ever seen the world and the impact that it could make on a kid just being able to see it, being able to see Naples floors. For me, that was a big deal. Today I've been to Naples many times. But back then, I had never been to a place like that and certainly not the Hamptons. And just giving me that exposure, I think my family would say was one of the nicest things that they've ever did because I think it changed generations of my family just having that. That's the nicest thing. That's a long story, but it's near and dear to me and both those people continue to be very important people in my life. And they might say, I've done 50 of those nice things for you, Tracy, just me talking, you know, I could hear Jay answering that question. It would be fun to hear him answer the question.”
2020-12-29 · Invest Like the Best · Tracy Graham - Investing in Overlooked Businesses – [Invest Like the Best, EP.206] · IDENTIFIED FROM THE TRANSCRIPT · source
“Years old, and I go into his office, and immediately he says, Hey, I can't do this meeting right now. I got to go. I had waited for a long time to get this meeting. He said, what are you doing right now? And I said, I'm doing nothing. I had this meeting scheduled. We got on his plane and we flew to Naples, Florida. And I spent seven days with him and his family. Now, we had never met before this meeting. During that seven days, I also met another guy, Basil Sellers from Australia, who's a very successful guy. And I got seven days of what I think was the best lessons that I could ever get. It was so kind. He was so kind. His family was so kind. And that relationship has lasted now for nearly 25 years we're going on. That was the kindest thing. And then Jay Jordan did a very similar thing. We went to the Hamptons. I will tell you that it changed my life in ways that I never thought about.”
2020-12-29 · Invest Like the Best · Tracy Graham - Investing in Overlooked Businesses – [Invest Like the Best, EP.206] · IDENTIFIED FROM THE TRANSCRIPT · source
“Man, that's a great one. So as I've talked to you about since we started talking, I've been very fortunate. I'm not going to say my mom because I will tell you that in my view, she's a saint. But I won't say anything about my mom, which literally she is top of the list. But I talk to you about Chris Murphy and Jay Jordan. Both of those two have done things that are so kind to me and really changed the trajectory of my thinking, which then ultimately has led to career and life and has changed my family. I got a meeting with Chris Murphy very early in my career. It was the first time we would ever meet. He is the chairman of First Source Bank, which is a regional publicly traded bank here in South Bend. He agreed to a meeting. It was a Friday, and the meeting was scheduled at 2. Again, I knew nothing. I knew nothing about business. I was really just pretty green. I was that earliest stage, I'm probably 22, 23.”
2020-12-29 · Invest Like the Best · Tracy Graham - Investing in Overlooked Businesses – [Invest Like the Best, EP.206] · IDENTIFIED FROM THE TRANSCRIPT · source
“Turned very, very different. At the end of the day, he was killed right before when I was coming to Notre Dame in April of 1991, I reported to camp in August. He was killed in April of 1991. It was a very tough time for me given the intense relationship that we had had. And when I got out and I said, I'm going to start my own company, I wanted to really never forget them. There is no living, Alan. It's Kenneth Allen, who was a childhood friend of mine.”
2020-12-29 · Invest Like the Best · Tracy Graham - Investing in Overlooked Businesses – [Invest Like the Best, EP.206] · IDENTIFIED FROM THE TRANSCRIPT · source
“Absolutely, absolutely. Kenneth Allen is a childhood friend of mine that I named the company after because after a sort of growing up knowing him since I was five or six years old being in class together all through elementary school. And then when we in Chicago, I don't know if everybody does, but you graduate, if you will, from elementary school and we graduated from eighth grade, a very interesting story. You had to take an entrance exam to go to St. Rita High School. And the interest exam was $20 or something. That $20, Kenneth Allen and I both go back to our moms and none of our families were wealthy, of course. And my mother gave me the $20. I go take the exam. His mother said, look, there's all these public schools here. We're not paying for you to go to school. She did not give him the money to do it. He did not go to St. Rita over the next four years, our lives started to drift apart.”
2020-12-29 · Invest Like the Best · Tracy Graham - Investing in Overlooked Businesses – [Invest Like the Best, EP.206] · IDENTIFIED FROM THE TRANSCRIPT · source
“So you have to simplify it so that you all can rally around a set of core principles. That's what we've been able to do. If you think about what I learned from business in the area of, in that way, again, as I say, I didn't actually learn it from business.”
2020-12-29 · Invest Like the Best · Tracy Graham - Investing in Overlooked Businesses – [Invest Like the Best, EP.206] · IDENTIFIED FROM THE TRANSCRIPT · source
“Most important business lessons I didn't get from business at all. I got from Lou Holtz and I got from Notre Dame and some of those very basic things that do right, do the best you can treat other people the way you want to be treated. And if we do those things in our company, then in every way, governance, conflict of interest, any of the things that all of those things arise, all of them, they come up and if you're in business long enough, they will come up and how you deal with them is the most important thing. And so you have to be foundationally sound in my view in order to get it right most of the time. And I think we've been able to get it right most of the time. Again, I'll talk about it where I started. Lou Hoates was able to make it simple. Don't complicate it. It doesn't have to be something that sounds profound. It has to be digestible by a lot of people who all have various backgrounds and understand.”
2020-12-29 · Invest Like the Best · Tracy Graham - Investing in Overlooked Businesses – [Invest Like the Best, EP.206] · IDENTIFIED FROM THE TRANSCRIPT · source
“If you don't do business the right way, even if you talk a good game, people stop doing business with you. So I've been around long enough for people to really get to know who I am. So some of those business principles, I talk maybe my team would probably say, I don't want to hear him say it anymore. I often say it's easy to do business with someone when things are going your way or to make the easy decision. It's easy when it's going your way. So if you have a huge profit, everything's working out the way you want it to work out, then it's easy to make decisions. But the business lesson for me is you really know what people are all about when decisions get tough. Are they going to do the right thing? So some of the lessons we talk about is you never have to call me or ask me what to do because I just want you to do the right thing. And 95% of the time, I think people know what the right thing is to do. When you think about those lessons of business, it's weird because my”
2020-12-29 · Invest Like the Best · Tracy Graham - Investing in Overlooked Businesses – [Invest Like the Best, EP.206] · IDENTIFIED FROM THE TRANSCRIPT · source
“I would have to go back to the foundation of just doing right, doing the best you can, and treating other people the way you want to be treated. Because of what people might consider having some success in business world and certainly from my upbringing, there's a lot of sort of praise, if you will, that has come my way. But nothing's more important to me than to say that the people who did business with me 20 years ago when I started generally still do business with me today. Notre Dame was a customer of mine in my very, very first business. And Notre Dame is an investor, a partner today in some of our businesses. And many of the other customers, some of our really closest people have continued to do and continue to work with us over a long period of time. When you think about doing business the right way and really what determines that, everybody can talk about it, I think, but ultimately if”
2020-12-29 · Invest Like the Best · Tracy Graham - Investing in Overlooked Businesses – [Invest Like the Best, EP.206] · IDENTIFIED FROM THE TRANSCRIPT · source
“I would say generally we pay somewhere in the eight times LTM and then it's going to be six and a half times forward. And that's a general statement. But I can tell you that we typically don't pay greater than eight times. It can creep up a little bit. Obviously, each deal is looked at independent. And so I'm giving sort of rule of thumb that we like to be somewhere in the eight times EBITDA and then having that really pro forma out to about six and a half, maybe seven times.”
2020-12-29 · Invest Like the Best · Tracy Graham - Investing in Overlooked Businesses – [Invest Like the Best, EP.206] · IDENTIFIED FROM THE TRANSCRIPT · source
“Fortune 500, or you're fortunate really your Fortune 5000 who are going to have technical capabilities and people on staff who can really get the best out of this software.”
2020-12-29 · Invest Like the Best · Tracy Graham - Investing in Overlooked Businesses – [Invest Like the Best, EP.206] · IDENTIFIED FROM THE TRANSCRIPT · source
“Really, that's increasing the cost to the customer. It's those types of things that I'm really thinking about. And we just asked a simple question. Is that the way it ought to be? Should it be delivered that way? Is it really in the best interest of the customer that you sell them another tool? I often question people, again, would love to hear your thoughts on it, about I think software is one of the most underutilized assets on the balance sheet. You buy software with all these tools, you pay for all these tools, and typically what we find as companies use 10, 20% of the capabilities of the software, but they pay for 100% of it. Is that really the model that is ultimately the model that's going to win out? Anyway, when we talk about distribution, that's some of the things we're thinking about. And when we think about distribution for software and technology in general, I think it's a different model than selling to your full...”
2020-12-29 · Invest Like the Best · Tracy Graham - Investing in Overlooked Businesses – [Invest Like the Best, EP.206] · IDENTIFIED FROM THE TRANSCRIPT · source
“Tooling what customers really want? Or is it the service that they want? Do they really want another tool, another software tool that they have to now go out and try to hire a team of people which are really scarce in these secondary markets or pay a managed service provider, which is very hard to do when you're talking analytics? Is that the delivery or distribution model that will win out in the long run? We tend to believe, and we're still confirming a lot of this, that there is a real opportunity if you are able to develop really strong products, but focus those products not just on selling them sort of as tools for other people to use because they don't have data sciences, they don't have data engineers in those level of talent that you need to do it. Or is it better to just sell those full service? They're still paying for the software, but to sell it full service and not have a managed service person in the middle.”
2020-12-29 · Invest Like the Best · Tracy Graham - Investing in Overlooked Businesses – [Invest Like the Best, EP.206] · IDENTIFIED FROM THE TRANSCRIPT · source
“Or any of those companies, there's always a middle person, middleman who is in that business. We're exploring this, but we really like this industry. Do we control distribution of software specifically into this very targeted customer segment? Do you control the distribution of some of the more common software security applications, data warehousing applications, the analytics type applications? Do we control that by controlling some of the distribution through the managed service providers? The mobile phone market where most people typically decided to sell it through Best Buy years ago and Apple decided, look, we're going to build our own Apple stores. We're going to sell it direct. Another one I think I still need to do a little homework on this one, but Tesla, where they said, look, we're not going to have a bunch of dealers out there that are really selling it. We want to control the customer experience from end to end. It's a different model. The question really becomes, is”
2020-12-29 · Invest Like the Best · Tracy Graham - Investing in Overlooked Businesses – [Invest Like the Best, EP.206] · IDENTIFIED FROM THE TRANSCRIPT · source
“Generally, that for our largest customers, we are going to have a direct sales force. And then for every other customers, we're going to build a channel partner program, and we're going to go out and effectively, we're going to sell software through managed service providers. A great example of that is Salesforce would do that in some respects. And typically what happens is you sell software, and if it's certainly enterprise software, it needs to be customized in some way. you hire this managed service provider and so the customer gets a bill from, let's say, Salesforce and then they also get a bill from the managed service provider for doing the installation, implementation, and all of that. The question really is for us, and we've started to buy really interesting sector we love, is the managed service provider groups that really control the distribution of software into secondary markets. I mean, I will tell you in our region, we have never seen anyone from Amazon come to sell technology, Salesforce.”
2020-12-29 · Invest Like the Best · Tracy Graham - Investing in Overlooked Businesses – [Invest Like the Best, EP.206] · IDENTIFIED FROM THE TRANSCRIPT · source
“From a distribution perspective, that's a very interesting question. And I have a lot of thoughts on that today because I've kind of tried to dissect the distribution network of software today. And with Snowflake coming out and doing so well, it's another opportunity for me to look closer at how software is delivered today. And is that the right model and how it works? So as you think about distribution, it is sort of my understanding and research that says that today your traditional Silicon Valley company building software would say, we build great software in the valley and you probably need to be here. That's where all the talent is or there are a few other hubs that you can sort of build from, but that's the primary hub. And we build and I would equate them to sort of being the OEM, if you will, if this were the manufacturing world. It'd be the OEM or maybe the automakers of Detroit is another great example of that. The go-to-market strategy or distribution strategy is”
2020-12-29 · Invest Like the Best · Tracy Graham - Investing in Overlooked Businesses – [Invest Like the Best, EP.206] · IDENTIFIED FROM THE TRANSCRIPT · source
“How we either market better to those customers, how we structure our client success organization around those customers, because we have your profit drivers, which are the ones you want to spend the most of your time with. You have your profit drains and then your profit drags. And so in each one of those areas, there's a large group of your customers that are likely dragging your margin, your overall net income down, that you're treating the same as all the other customers. So I think the way AI plays a role as it relates to customers is allowing you to look at each customer individually. And that's virtually impossible if you're going to have human doing all the analysis. Building that kind of capability into your data platform is a far better way, far more efficient, and actually far more effective way to get at customers from a direct perspective around customers.”
2020-12-29 · Invest Like the Best · Tracy Graham - Investing in Overlooked Businesses – [Invest Like the Best, EP.206] · IDENTIFIED FROM THE TRANSCRIPT · source
“So there's two very interesting things. And one I've been playing with, so I run it by you and it's an interesting conversation that many of the listeners might look at and it gets directly. Except one of those companies calls your call center 50 times, and the other one calls two times. You're spending a significant amount of money to support that customer and generally in small businesses. Now, in larger companies, maybe they have this capability, but if you're not looking at your data by call at the transaction level by customer, really looking at it that way, you might not understand. Your gross margin is going to be the same because the service itself, you're providing, let's say, some managed security service or it's going to be the same, but your cost related to just your building support, all of those things, they vary drastically by customer. That typically doesn't go into a pricing model or have any kind of pricing strategy for companies of the size that we're discussing. And so really getting access to transaction level data is an example of how we would use data around customers.”
2020-12-29 · Invest Like the Best · Tracy Graham - Investing in Overlooked Businesses – [Invest Like the Best, EP.206] · IDENTIFIED FROM THE TRANSCRIPT · source
“Of those machines, we can be far more efficient in servicing those machines and understanding which machines need something as simple as oil, as an example during the maintenance period, how often those machines can be used. So that today is highly inefficient. It shouldn't be that way, but you need data to be able to answer those questions. And when you start talking about, especially on the larger manufacturer side, when you start talking about hundreds of plants, you're talking about thousands of machines and they have to support those machines. So the maintenance companies are out there doing that. That's one we're looking at. I would say we haven't done a deal in that area yet, but we really think there's some opportunity. The financial sort of profile of those companies looks really, really promising.”
2020-12-29 · Invest Like the Best · Tracy Graham - Investing in Overlooked Businesses – [Invest Like the Best, EP.206] · IDENTIFIED FROM THE TRANSCRIPT · source
“See opportunity in the future. My vision of the manufacturing space was that when I see a plant, what I see is a big data center with a bunch of machines in it. And today, you need a lot of people in that data center, in that plant, to do a lot of the work. Ultimately, we will have sensors and things on each of those machines. And a lot of that will be obviously automated, in my view. There are a number of companies today that are really interesting to us that are not direct manufacturers, but they support the manufacturing industry. And those are your maintenance companies, the people who make, it's a pretty good business where they go in, the manufacturer has outsourced the servicing of all of their machines. The data play there, of course, is that today it's a high cost of, people cost to do that. And ultimately, as those machines are outfitted with connectivity to Wi-Fi and obviously giving us the ability to collect all the data.”
2020-12-29 · Invest Like the Best · Tracy Graham - Investing in Overlooked Businesses – [Invest Like the Best, EP.206] · IDENTIFIED FROM THE TRANSCRIPT · source
“Manufacturing world. It's a heavy lift in the sense of getting the capability to bring all the data in. So whether you got to put sensors on products, whether you're connecting to all their suppliers and getting access to those data sources, those are the types of things that you have to do to get the data and then bring it all together. And obviously, you know, the process of cleaning labeling and doing all the things you need to do to that data. So in manufacturing, the primary use cases, and this is still being developed. I don't think anybody has. the answer here so i'll start with that no one has the answer but where we think the opportunities are for manufacturing specifically is improving the quality of the product improving the customer experience or customer service many of them have call centers that they are supporting they're collecting a ton of data there those are the types of use cases that we are looking at as it relates to manufacturing but that's one where we”
2020-12-29 · Invest Like the Best · Tracy Graham - Investing in Overlooked Businesses – [Invest Like the Best, EP.206] · IDENTIFIED FROM THE TRANSCRIPT · source
“Because they don't do it well today. But some of the use cases that we look at around that is collecting data on the use of a product in the field and having that data, analyzing that data in a way that engineers would have the ability to improve that product. There's a lot of opportunity around the supply chain management of that. It's really not something that's done very well in your lower middle market or smaller manufacturing plants. It'd be scary to you if you saw how it actually works today. Very little data, highly manual. A lot of people in the background in many cases not so many people, which is actually worse because they have a receptionist who might be doing all the billing and then also turn it around and getting all the invoice in and negotiating pricing and all of that kind of thing. I got to be clear here. In most cases in the smaller”
2020-12-29 · Invest Like the Best · Tracy Graham - Investing in Overlooked Businesses – [Invest Like the Best, EP.206] · IDENTIFIED FROM THE TRANSCRIPT · source
“This goes a little bit to what we've done, but also how I think the world will change for manufacturing in general. I think the customer experience, the use of their product is a big part of how you use data to improve in a manufacturing space. Engineers use a lot of data. One of our big customers at one of our portfolio companies is Whirlpool. A lot of learning, I mean, that's been five, almost six years now that we've been working with them. Some of those same disciplines that apply or sort of use cases for analytics that they would use in improving the engineering of their product, really putting sensors on products and things of that nature, collecting data about their product as is out in the field. Those are the types of things. That's the kind of data that they are now collecting, but then have trouble, in some cases, making useful and unlocking the value of that data. But those that do it well, I don't put the lower middle market manufacturers in this category.”
2020-12-29 · Invest Like the Best · Tracy Graham - Investing in Overlooked Businesses – [Invest Like the Best, EP.206] · IDENTIFIED FROM THE TRANSCRIPT · source
“There are really a tale of two types of manufacturing companies in the Midwest. There are now some very large manufacturing organizations in that space, in the RV Recreational Vehicle Space, which we are literally 20 minutes away from. So in that scenario, there are, in many cases, 100 plants that they are operating and they are building various types of”
2020-12-29 · Invest Like the Best · Tracy Graham - Investing in Overlooked Businesses – [Invest Like the Best, EP.206] · IDENTIFIED FROM THE TRANSCRIPT · source
“Reachable. That's what comes to mind for me right away as you think about parts of the data set that we thought were really, really valuable and has turned out to be too big of a lift for us to get at. Others in manufacturing also exist where you think, man, I have all this data and I have a lot of this really, really valuable thing because I have it. But if you don't have creativity and a business model to wrap around it and you haven't found anything very interesting in the data, it's really difficult, very different between having data and insights, as you know. Real insights are hard to come by.”
2020-12-29 · Invest Like the Best · Tracy Graham - Investing in Overlooked Businesses – [Invest Like the Best, EP.206] · IDENTIFIED FROM THE TRANSCRIPT · source
“Would say anything that we see on the clinical side of healthcare has been either, I don't know that I would classify it as fools goal, but what I will say is that it's so damn hard to do that we haven't been able to crack that. And on top of it being hard, the level of accuracy that the model has to have is so high that even if you're on the administrative side of healthcare, sort of the back office cost side, if we're at 90%, we're competing with 60%. The clinical side of it, if you're at 90%, it's worthless. When we think of that, our original thoughts were, man, this would be great if we could sort of help make some of the decisions around care using AI and algorithms. That has been, in a sense, fool's goal. That is not something that has been certainly in the current state.”
2020-12-29 · Invest Like the Best · Tracy Graham - Investing in Overlooked Businesses – [Invest Like the Best, EP.206] · IDENTIFIED FROM THE TRANSCRIPT · source
“A lower middle market company and said, Can we talk to your data scientists? And that company say to me, yeah, he's in this office over here or there. Generally, they don't have data scientists. So they haven't really explored data and how you might use that data. The first use case I gave you really focused on how a third party might use that data. That's one of the things we did. Another use case for them is they really want to benchmark their sales. So you give them the forecast, but they also want to know when they don't choose their drug what drug they did choose and they want to know that and they want to get that information in almost real time so that they can go out and talk to doctors and really educate them more on the efficacy of their drugs. So that's an external use of the data set that we use.”
2020-12-29 · Invest Like the Best · Tracy Graham - Investing in Overlooked Businesses – [Invest Like the Best, EP.206] · IDENTIFIED FROM THE TRANSCRIPT · source
“As either client or ownership, all of the oncology groups in the region that are there. So we have probably about, I would say 80% of the region's chemotherapy is sort of running through our database. So that's a proprietary data set valuing that data set. Really, it's hard. I mean, at the end of the day, I can tell you there's no secret sauce to valuing it. What you're trying to figure out is how much margin expansion you think you can get as a result of having access to the data. And you're really running some very complicated models to try to determine that. Now, generally speaking, in the lower middle market space, there's very little value by the seller that's put on data because they don't use it. We're just at that stage. Now, Patrick, that'll change over the next five years. People will start to understand the value of data. I generally think, in fact, I've never walked into”
2020-12-29 · Invest Like the Best · Tracy Graham - Investing in Overlooked Businesses – [Invest Like the Best, EP.206] · IDENTIFIED FROM THE TRANSCRIPT · source
“All of that, but we know what stage of cancer, what they have, how they use it, what the effects of it have been for them, what it costs to service them, what insurance carrier they have, what their schedule is. So we use that to do forecasting. So if you have a company like Pfizer or Eli Lilly and all of those guys, what they want to know is what's the forecast of our drugs? Because we know that because we have all the physician schedules that go along with that. So we know every patient that's going to receive chemotherapy for the next, let's call it eight weeks or so. So we use all of that information to really try to provide insight to the pharma industry, if you will, on a number of different issues. One very simple one is they just want to forecast their sales for the region, how much of their drug is going to be used in that region. So we have access to that and we have exclusive access to it because we basically have”
2020-12-29 · Invest Like the Best · Tracy Graham - Investing in Overlooked Businesses – [Invest Like the Best, EP.206] · IDENTIFIED FROM THE TRANSCRIPT · source
“I'll use as an example, sort of our oncology business, which is great. So the first thing we're looking for when we look at a data set is we say, look, can we get exclusive access to it? Is it proprietary in any way? And is it perishable is the way I would think about it. When we're looking to value it, we're also saying, and if we get this data set, can we run a model or can we get insights from the data set that are in some ways proprietary and valuable to others? So as you can imagine in the oncology space, it's very, very expensive drugs that are being used to take care of patients, chemotherapy drugs, and other types of drugs. The use of these very expensive drugs, we were able to see what the choices that physicians were making. We have the schedule. So when you think about all the dimensions of things that we have in that data set, so we know every patient, not the names and the”
2020-12-29 · Invest Like the Best · Tracy Graham - Investing in Overlooked Businesses – [Invest Like the Best, EP.206] · IDENTIFIED FROM THE TRANSCRIPT · source
“We really like the insurance brokerage business. You'll find a common theme about those companies is that in their cost of revenue, it is highly labor intensive what they're selling is a lot of intelligence and ideas. And we think it is those types of businesses that are going to be ripe for using better technology. Not unlike a hedge fund, right? I mean, you use technology to augment really, really smart people. I think we'll see some of the same types of things that really start to apply to your more traditional operating companies.”
2020-12-29 · Invest Like the Best · Tracy Graham - Investing in Overlooked Businesses – [Invest Like the Best, EP.206] · IDENTIFIED FROM THE TRANSCRIPT · source
“Some people will say, well, other people can kind of recreate that. So the model is more important. So we go back and forth over what the real value is, but we really like the healthcare industry today. We love where we are in the Midwest. We like manufacturing, but specifically the manufacturing part of it is the service and maintenance of plants and equipment within those plants.”
2020-12-29 · Invest Like the Best · Tracy Graham - Investing in Overlooked Businesses – [Invest Like the Best, EP.206] · IDENTIFIED FROM THE TRANSCRIPT · source
“As well. So, one of the things we've done is we acquired a company in that space specifically focused on oncology. It was the back office of an oncology group. We have, in effect, modernized that entire process. Margins up significantly. Growth up significantly. And then there's two things we're looking to do at Graham Allen Partners. The first is to use AI internally to improve the margins of the business. The second thing is figure out how we monetize some of the proprietary data that we talk about. When we get into sort of how we diligence companies and how we come up with ideas, you'll find that we talk about exclusive access to proprietary data. And I know you have a lot of people come on and talk about data sets and you go into one of our ideation sessions. One of the things you'll hear is what's the real value? Is it the model or the data? Someone will say, well, if you have exclusive access to proprietary data about a region, then you have a better chance of building a good model.”
2020-12-29 · Invest Like the Best · Tracy Graham - Investing in Overlooked Businesses – [Invest Like the Best, EP.206] · IDENTIFIED FROM THE TRANSCRIPT · source
“So one is a challenge, and the other one is a big opportunity. So obviously, we focus our time on the big opportunity. And we think at Gray Island Partners, we think we're uniquely able to help companies make that transition and improve margins, grow faster. And through that, we believe that's the outfit generation engine, which is our ability to use data and AI to help companies do that. One of the verticals we've done extremely well on is the back office of healthcare providers. When you look at that, it's still being done the way it was done 30 years ago, literally, except there's more regulation, more compliance, more of everything, and they haven't changed the model. So the workflow still operates the same. The opportunity there is it's highly labor intensive. The back office part of it is labor intensive and it's inefficient.”
2020-12-29 · Invest Like the Best · Tracy Graham - Investing in Overlooked Businesses – [Invest Like the Best, EP.206] · IDENTIFIED FROM THE TRANSCRIPT · source
“I'll start by saying I think it's huge. I think what you just outlined is exactly what we're going to see over the next 10 to 20 years. I really do. I think there'll be one of two things that happen. One is an opportunity, the other one is I think a big challenge for small companies in these secondary markets. The opportunity is they modernize and they leverage data and AI to improve gross margins and then spur additional investment in sales which ultimately drives faster growth from a revenue perspective. So that's one way to do it. And then obviously they're able to compete with some of their larger competitors. The other part of it is that their larger competitors find ways to use AI and technology that allows them to reach into these secondary markets and compete better with some of these smaller or lower middle market companies. And they are slow to adopt or transform or too slow at transforming their business.”
2020-12-29 · Invest Like the Best · Tracy Graham - Investing in Overlooked Businesses – [Invest Like the Best, EP.206] · IDENTIFIED FROM THE TRANSCRIPT · source
“In this market that I think is sort of off the beaten path, doesn't have a lot of competition from other private equity firms. And I think there's a huge opportunity here, especially with our intimate knowledge of data and technology, having done that over the last 12 years. We thought we could make a big difference. And we've been able to do that over that timeframe by focusing on this very specific geographic segment of companies.”
2020-12-29 · Invest Like the Best · Tracy Graham - Investing in Overlooked Businesses – [Invest Like the Best, EP.206] · IDENTIFIED FROM THE TRANSCRIPT · source
“Is pretty hard. In my early days of going out and having literally hundreds of conversations with owners of businesses because they were also our customers. So I was in a sense working and acquiring technology companies, but all those technology companies were serving lower middle market companies generally in these secondary markets. And so I got to know sort of the culture, the feeling, how they operated and how they thought about the world, why they did or didn't invest in technology. I really got to know them and feel really like connected with those businesses. So when I finished up, so I sold my second company with Jay. So I had done two exits. All of my experience had been a technology lens, but focused on lower middle market companies and sort of build abstract strategies around that. And so it was a natural for me. I had come of age, if you will, and I had made enough money. And I thought, you know what, I'm going to start my own firm and I'm going to focus.”
2020-12-29 · Invest Like the Best · Tracy Graham - Investing in Overlooked Businesses – [Invest Like the Best, EP.206] · IDENTIFIED FROM THE TRANSCRIPT · source
“I'd say that the core thing is that we believe that lower middle market companies and specifically those in secondary and tertiary markets are generally undervalued, in many cases simply because of their location or their geography. People sort of give less of a value to those companies. And then from a technology perspective, we believe that you can get the most lift by helping those companies really start to use technology and now data. Early on it was just technology and today it's more data and AI and analytics, which we can talk about, that you get the most lift initially in those companies. You get the most margin expansion, the ability to grow those companies well for a lot of reasons, but generally speaking, because in those secondary markets, they don't tend to have the talent and most are run by individuals who have been doing it for 30 years. And so the transition or shift for them generally.”
2020-12-29 · Invest Like the Best · Tracy Graham - Investing in Overlooked Businesses – [Invest Like the Best, EP.206] · IDENTIFIED FROM THE TRANSCRIPT · source
“And through all of that, Jason still stuck by me, and I would say I got my MBA for sure during that three-year period. There are some very, very interesting stories. And part of those stories were about sellers and having this young kid come in and say, hey, I want to buy your business. And some of these people were obviously most of them could have been my parents. I can't even imagine the type of things I was saying at that time, but I was learning the business and I got a deep understanding of the mid-sized businesses or lower middle market companies, how to build companies, how to integrate companies, sort of all the things you need to have today if you're going to make investments in companies that are operating in that lower middle market space.”
2020-12-29 · Invest Like the Best · Tracy Graham - Investing in Overlooked Businesses – [Invest Like the Best, EP.206] · IDENTIFIED FROM THE TRANSCRIPT · source
“Relationship with Jay Jordan and then Chris Murphy, who's another individual who really mentored me in a way that you just don't see from people generally with kids that they don't know and sort of didn't grow up like them. We went on to do 23 or so acquisitions, build up the company, exited in 99. And that was sort of the success story of my first entrepreneurial endeavor. There were a ton of bumps and bruises and all the things I learned in that. I got a lot wrong. I had no”
2020-12-29 · Invest Like the Best · Tracy Graham - Investing in Overlooked Businesses – [Invest Like the Best, EP.206] · IDENTIFIED FROM THE TRANSCRIPT · source
“No, no way. Don't do it. But he did the next best thing. In fact, I think that one of the most important things he did was he introduced me to Jay Jordan. And Jay and I had a meeting at 6 a.m. in the Moor Sen, which is a hotel on campus. And Jay and I just really connected very well. About a year later through a sort of a just according period getting to know one another, Jay invested. That was my first deal. It was exciting for me. I made what I thought was a lot of money, a couple of million dollars or so selling 60% of my business to Jordan. And that was a great time for me. And obviously, again, now you got to go back and say you're talking about a kid from Inglewood who never had anything. Mother didn't graduate from high school kind of deal. Single parent, three older sisters. It was a fundamental change in my life.”
2020-12-29 · Invest Like the Best · Tracy Graham - Investing in Overlooked Businesses – [Invest Like the Best, EP.206] · IDENTIFIED FROM THE TRANSCRIPT · source
“led to me running out of money because I thought 80,000 was the world at the time. I thought I had enough money to do everything. So six months later, the company's doing fairly well because we are now building this thing. Actually, we had pivoted already to providing internet access. So we're doing well. And that's what led me to the next phase, which was I went into Lou Holtz, who was the only other person that I knew who had money. And I asked him to invest in our company. I remember sitting in his office. He's smoking this pipe. I'm setting the time for myself that you could smoke indoors then. I went to the back of his office and gave him my pitch. He had one year left to at Notre Dame. He didn't know at the time, but we had this conversation and he said, I absolutely thought he was going to say, yep, I'm all in. And he said, nope, Tracy, I don't invest in businesses. I'm a football coach. I do what I do and gave me the story. And he didn't beat around the bush. So it was a pretty hard.”
2020-12-29 · Invest Like the Best · Tracy Graham - Investing in Overlooked Businesses – [Invest Like the Best, EP.206] · IDENTIFIED FROM THE TRANSCRIPT · source
“Picture on the back of the phone book. They said something like $5,000 a month. Now, this is South Bend Indiana, so I'm taking $5,000 a month. I'm 21 years old at the time. I'm thinking, man, that's Highway Robbery. I can do that a lot cheaper. Right about that time, the internet was coming out. And so I came up with an idea to start a company. And at the time, we called it Cybercom Business Directories. It was CBD Networks. And our big idea was we're going to put the whole phone book on the internet. We're going to build this search engine and we're going to do all of these things. But you got to understand that was 1996. So we quickly realized that people didn't have internet access yet. So there was no way they were going to do any searching on the internet. And those that did was accessing a 288 modem. So there was no way they were going to do it. But Jerome Battis, he sort of loaned me the first $80,000 to start that business. And that was my first entry into entrepreneurship, which quickly”
2020-12-29 · Invest Like the Best · Tracy Graham - Investing in Overlooked Businesses – [Invest Like the Best, EP.206] · IDENTIFIED FROM THE TRANSCRIPT · source
“Jerome Battis, for those who do know him, and there may be some who don't, Hall of Fame running back, Pittsburgh Steelers, but he originally went to as a rookie, went to the Los Angeles Rams. So he was one year older than I was, but we became very close friends at Notre Dame. And that friendship continued. So Jerome Battis went to LA and he left Notre Dame early as a junior. And so he came back to finish up some of his degree. And I was still at Notre Dame. through an enormous amount of communication, talking, and staying up late at night, three in the morning talking about things. I came up with an idea and I said, look, we got this great opportunity. I was looking at a phone book. And on the back cover of this phone book was a lawyer, which was sort of this malpractice type of lawyer. So you had a big picture on the phone book. I called up the company and I said, how much does that cost to put a”
2020-12-29 · Invest Like the Best · Tracy Graham - Investing in Overlooked Businesses – [Invest Like the Best, EP.206] · IDENTIFIED FROM THE TRANSCRIPT · source
“For 45 minutes, and you guys get to hear it every day for free. Yeah, I think that's it. It was the discipline, the consistency, and I do believe the simplification of the message so that the audience at that time group of players in college could understand and really internalize it.”
2020-12-29 · Invest Like the Best · Tracy Graham - Investing in Overlooked Businesses – [Invest Like the Best, EP.206] · IDENTIFIED FROM THE TRANSCRIPT · source
“I think delivery is really important. The message itself was meaningful. In most cases, he simplified it so it wasn't very complicated. I mean, obviously you're talking to a 17-year-old and again, a 17-year-old from Inglewood, or you could be talking to Jerome Bettis, who's an 18-year-old from the inner city of Detroit and who's one of my closest friends and an initial investor in my first business. But it doesn't matter where you do it. It has to be simple and in a way that we can understand it. So I think Coach Hoates not only the message itself is very simple, but his ability to deliver it with passion and feeling. And you really believed that he believed what he was telling you. So it was a lot easier to follow during that time. And then on top of that, the message never changed. In fact, he once said to our team, I forget the game, but he said, you guys get to hear, I charge $40,000 or some number of that nature to hear this.”
2020-12-29 · Invest Like the Best · Tracy Graham - Investing in Overlooked Businesses – [Invest Like the Best, EP.206] · IDENTIFIED FROM THE TRANSCRIPT · source
“Would say never leaving your team. I think the University of Notre Dame is specifically Coach Holtz continues to reach out to players, continues to be a very, very important part of our lives. And he has been for me over the last 25 years since I left Notre Dame. In fact, as we get further into this, you'll find that my connection to Jay Jordan, who was a big catalyst in my life. My connection to Jay Jordan was a call that was made by Lou Holtz after I graduated. He connected me with Jay Jordan. So very, very important part of my life, Coach Holtz was.”
2020-12-29 · Invest Like the Best · Tracy Graham - Investing in Overlooked Businesses – [Invest Like the Best, EP.206] · IDENTIFIED FROM THE TRANSCRIPT · source
“What I remember most is what I bet if you asked the probably thousands of players that he has coached over his lifetime, they're going to tell you, do right, do the best you can and treat other people the way you want to be treated. You're probably going to walk into their house like you would walk into mine and see that on the walls of my children so that they understand it. There is no question that his ability to take 17-year-olds, 17 to 22-year-olds, let's say, 100 of them, all from different walks of life, some from very low economic status. And those obviously at the University of Notre Dame, you have all the way up to sort of the 1%, if you will, and get all of those people to be focused on something that's more important than themselves. Foundationally, that's how I think about businesses. I think leaders do the same thing. And that's what I took away from Coach Holtz. And then the other thing I...”
2020-12-29 · Invest Like the Best · Tracy Graham - Investing in Overlooked Businesses – [Invest Like the Best, EP.206] · IDENTIFIED FROM THE TRANSCRIPT · source
“He may never play football at the University of Notre Dame, but he'll get a degree and it'll be the best four-year investment that he makes for the next 40 years of his life. That upbringing and really the way we grew up in the Inglewood area really was a big catalyst to me sort of operating the way I operate today. And some of those things that people would not think about as assets or skills that you develop in those types of environments, intuition is an example of that. Creativity, figuring things out, always, if you will, being aware is important. I talked about walking to school. You had to be aware. Those are things that I got a lot of reps on and in a sense have become innate. And I think they are very valuable as we evaluate companies and make decisions and figure out how to structure deals in a way that”
2020-12-29 · Invest Like the Best · Tracy Graham - Investing in Overlooked Businesses – [Invest Like the Best, EP.206] · IDENTIFIED FROM THE TRANSCRIPT · source