Growing an Evergreen Brand with Dan Thrasher
When you grow something good, it spreads.
On this week’s episode of Growing a Fruitful Brand, Ben is joined by Thrasher Group CEO, Dan Thrasher for an enlightening discussion on how to redefine your industry while maintaining company culture as you grow and scale.
Not all companies grow with the intention of selling, for Dan Thrasher, the goal is to use the purpose and values the business was founded on by his parents, to create steady, evergreen growth.
Thrasher Group began as a small family business in Omaha that employed just over 10 people. Now, Thrasher Group has expanded to 8 locations, across three different entities and employs over 500 employees.
Scaling a family business and maintaining the character and ethics of the homegrown culture are what drew Dan Thrasher to The Tugboat Institute’s evergreen approach to private business entrepreneurship.
The Evergreen business model is founded on 7 characteristics, also called the 7 P’s:
Purpose
Perseverance
People First
Private
Profit
Paced Growth
Pragmatic Innovation
Listen in as Dan goes through each of the 7 principles of growing an evergreen business and how Thrasher Group has redefined the contractor experience with its purpose-driven approach.
Check out the latest episode and past episodes where you get your podcasts and learn more about Thrasher Group and other great brands we’ve helped create clear and compelling messaging and websites for here.
Check out episode 22 where you listen to podcasts or watch it on YouTube!
Ep. 22:
Growing an Evergreen Brand with Dan Thrasher
Automated Transcript
Ben Lueders:
Welcome to Growing a Fruitful Brand where we discuss how to create and grow a brand that makes the world a better place for you, your customers and your employees. I'm Ben Lueders, founder and art director of Fruitful Design & Strategy. Dan Thrasher is the CEO of Thrasher Group, a family of brands that is working to redefine the home contracting industry. Thrasher is also a family company, founded by Dan's parents in 1975. Dan grew up on the job site learning hard work and values from his dad that still guide the company to this day.
In our conversation, we discuss what it means to be an evergreen business. Some businesses are formed with the sole purpose to scale fast and sell, like we discussed with Flywheel co-founders Rick and Dusty in episode 17. But Thrasher is committed to a very different approach, long, steady growth over time. Listen in as we discover the seven P's of being an evergreen business with Dan Thrasher. Dan Thrasher, thanks so much for being on Growing a Fruitful Brand. Today, we are going to get into being an evergreen business. You guys are an evergreen business and a lot of people watching might be interested in knowing more. What does that even mean? And so Dan, can you just tell me, is Thrasher Group ever going to go public?
Dan Thrasher:
I would say no. I think, for us, being evergreen is something that we've really learned about in the last six or seven years. I'm second generation home improvement contractor, so not super sexy. I don't know that a lot of people that were growing up-
Ben Lueders:
Some people might be into that, I don't know.
Dan Thrasher:
Yeah, I mean, I am. But I mean, you don't get a lot of, "Oh, that's what I want to be when I grow up."
Ben Lueders:
You're not an app, you're not a cool tech startup in the same way.
Dan Thrasher:
Exactly. But we never really thought about what type of business are we? My dad just worked really hard for a lot of years and just took care of customers and took care of employees. And it was very small and very slow growth. It wasn't being built for the purpose of someday exiting or anything like that. That was never even on his radar. But then as we matured and we grew and had more employees, we started to be approached by private equity firms. There's a lot more of that going on now in areas like home improvement. Historically, that'd be more tech and more those kind of things. But it's been happening more in home improvement, especially in places where tech has a harder time disrupting. It's really hard to replace a guy with a hammer, with an app. So it's kind of-
Ben Lueders:
AI is trying right now.
Dan Thrasher:
Well, certainly. And there's impacts from technology, but it's hard to replace humans in this environment right now. And so I think it's become an interesting place for some of the private equity-type deals to look at. And so once that started to happen, it forced us to have to ask ourselves, "Okay, where are we going? What is the long term-?"
Ben Lueders:
If not scaling to sell, what are we doing here, what's our purpose?
Dan Thrasher:
And so we really had to... I mean, I wasn't even really that familiar with what private equity was or what it did or what taking on an investor looked like. I just hadn't really thought about it. So as a family, we really thought about it, we investigated it, had to make some decisions. And ultimately we learned about this idea of being evergreen through a connection with the Tugboat Institute, which has been a really cool think tank group for us to be a part of.
And we realized that it really resonated with us to think about our business as something that was going to be around for a really long time, and that we were going to really be more about purpose and more about people, both employees and customers for a really long time. Which meant we could make decisions a little bit differently, and we felt like we wanted to commit ourselves to that because we felt like that was going to better align with our values.
Ben Lueders:
I've got a quote I want to read. This is from Dave Whorton of the Tugboat Group, and I thought it captures this idea of evergreen company in a good way. He says, "It's not about making money. It is not about trying to get money at high valuations. It's about building something of impact, a business with deep purpose, bringing human beings together to do something really important in service of customers, suppliers, the communities and their families. And of course, they're going to get extremely wealthy in doing this, but this is just a byproduct." That's Dave Whorton of the Tugboat Group. What do you think about that?
Dan Thrasher:
Yeah, I mean, I think what he's saying in a nutshell is if you do really good by people, if you produce value for people, generally speaking, a byproduct of that is going to be a really good business that does really well. And so we don't get up in the morning and go aim for how much money can we make today. You aim for how much value can I produce for customers, for employees, for the community? And you trust that by doing that, there is going to be an upside for the business as well, and for the owners of that business.
Ben Lueders:
Well, Dan knows that we just had the Flywheel guys in here, Rick and Dusty. And he's not saying that it's necessarily wrong to scale and sell a company, but this is a very different way of just thinking about doing business. And so today I wanted to dig into the seven P's of being an evergreen business. These are from the Tugboat Group, and I thought it would just be fun to walk through each one of them together, and talk about how have these played out in running Thrasher Group. So the first one, purpose.
Dan Thrasher:
This is really what is the driving force behind a business, especially a purpose-driven business, obviously. I think sometimes people get a little bit like, okay, purpose, mission, values, vision. It's like a marketing thing. You have to have it for your website, but is it real? And so for us, about 10 years ago, we recognized that we at one time were a product of my parents' character, just who they were. They were good people that were hard workers, that cared about their customers and cared about their employees. And so when you're really small, it's pretty easy to maintain that feel as a priority. But then as you start to grow and the more employees you get, and especially when you get to a point where you can't know every single employee personally, which is a new place we were reaching at that time.
Ben Lueders:
Real quick on that, what was that size for you, going from what number to what number would you say?
Dan Thrasher:
I feel like when you break a hundred, and especially much beyond that, it starts to be really hard to feel like you really know everybody. I mean, when you're 10 people, you really know everybody.
Ben Lueders:
Oh, yeah, yeah. That's where we're at.
Dan Thrasher:
Right. When you're 50, you still know most of the people pretty well. You get to a hundred, it's starting to be like I know all their names. I used to really make sure I knew everybody's name.
Ben Lueders:
You got flashcards or something, kind of?
Dan Thrasher:
Not even joking, I used to have flashcards.
Ben Lueders:
I've thought about that. If we ever got to that point, would I make flashcards?
Dan Thrasher:
I was at about a hundred employees and I decided I needed to keep up with it so I started doing flashcards. When we got to like 150, I just threw the cards away, and I was just like, I'm just going to try my best. But I also realized that I have to rely on good managers to be that personal relationship person for that employee. They're not going to be able to see that personal relationship with me, but they can have it with someone that also lives out our values and really understands who we are.
So we have to be really particular about who we would hire and who we would put in a position of leadership, that they can be kind of the extended family. And we talk about it that way. We say, "At this size, we can't all be part of the same immediate family, but we can be a part of the extended family." So, you may not know me personally, but you know someone that knows me personally.
Ben Lueders:
Well, full disclosure, Dan and I go to church together, and churches have to like think this all the time. When you're a really, really small church, everyone has direct access to the pastor. But you get to that point where it's like, okay, we're going to need other people to help share the [inaudible 00:08:47].
Dan Thrasher:
You have to raise up leaders and make sure that they agree with the purpose, mission and values of the organization so that they can live that out and be an extension of that key leader. So that's been important for us. And so as we were growing, we recognized that when we were hiring people and training them and onboarding, they didn't really naturally just go, "Oh, I get it. I understand who we are." It was not as easy for that to transfer to them. And so we sat down and we said, okay, we have to figure out how to write down in actual words who we are and what we're about, and what we want people out there that are coming to work here to know about us, that that's what they're signing up for.
Because even if you don't align with our values, it doesn't mean you're a bad person, it just means you probably wouldn't like working here very much. Why would we want to have somebody come to work for us that didn't align with those things? Because they're just not going to have as much fun. So we sat down, we wrote it all out, and we said, "We're going to make sure we understand what our purpose is. We're going to understand what our mission is. We're going to understand what our values are, and we're going to share that in the interview process." And we wrote it all down. I know you've seen it.
Ben Lueders:
Yeah.
Dan Thrasher:
Because you've helped us update some of the graphics.
Ben Lueders:
Can you share that with our listeners?
Dan Thrasher:
Yeah. I mean, over time we were like, "Hey, the words don't really need to change, but we need to be able to present it in a more current format." And so we had you guys help us with an employment branded website and helped us update some of those things from a graphical standpoint, especially.
Ben Lueders:
Yeah, super fun.
Dan Thrasher:
And make sure that it was something that was easy to consume as a potential employee. So for us, we decided, we're in the home improvement business, and we're also in the supply business. We make products for contractors. And so we wanted our purpose to be universal over anything that we have had within our business. And so what we ended up realizing and what really got us up in the morning and got us out of bed and got us going was really trying to redefine what it means to be a contractor, and to make that contractor experience better for homeowners and for customers. Most people have had a bad contractor experience.
Ben Lueders:
Oh, really? I don't know. I feel like it just always goes so well.
Dan Thrasher:
So that's kind of the key thing that we think about is whenever we're trying to make a decision, it's like, how does this make the customer's experience better? How does it make the employee's experience better? How do we make it so that other contractors can level up their game as well? Even in our own communities, it's like, well, let's even make it so that our competitors have to be better. Let's make it so other people that are in, maybe not the same industry, but maybe in another similar industry, how can we prove that it can be done better?
Ben Lueders:
Yeah. Raising the bar.
Dan Thrasher:
Raising the bar. Yes.
Ben Lueders:
You're raising the bar for everybody, which I'm sure they all love that.
Dan Thrasher:
So, yeah. So, I mean, that's what we think about when we think about purpose, and that's the driving force, rather than it being about money or something else. Again, not that those things are bad, but that's the driving force behind what we're doing.
Ben Lueders:
All right. The next P, Dan, is perseverance. How has perseverance played out in the story of Thrasher Group?
Dan Thrasher:
I think businesses are going to go through easy times, they're going to go through hard times. Like when the economy's booming and all the forces out there are with you, it can be just kind of like a wild ride. And sometimes if you go on a wild ride for very long, you start to think that you're really good at this, right?
Ben Lueders:
Yeah.
Dan Thrasher:
Like, man, we're really good at this. But then-
Ben Lueders:
Things change.
Dan Thrasher:
Something changes and it's like, "Ooh, maybe we're not as good as we thought."
Ben Lueders:
We've had that for sure.
Dan Thrasher:
I think that perseverance is really about being prepared and able to live through the ups and downs. So making sure that we are in a position when something happens that we're not, all of a sudden we don't have the money to survive a downturn. Or we have some seasonality in our business, but we really value our employees, so how do we not have to lay people off in a slow season? So we have to plan for that, though. We have to be really intentional in a home improvement business that's seasonal. It's very common, other people are just, "Oh, winter, you lay people off in construction. That's just what you do."
And we were like, "Well, if we don't want to do that, how can we overcome that?" So in order to persevere, we have to plan well, and we have to budget well and have a plan for that so that we can do that. And so it's really about not betting it all on one thing. It's not going all in on one thing. It's about, okay, how do we make sure that we're setting ourselves up to be able to take advantage of the good times as best we can, but not in a way that takes too much risk that we wouldn't be able to survive a downtime. I mean, COVID was a good example of that.
Ben Lueders:
How did that go for you?
Dan Thrasher:
March 2020, when all of a sudden you can't go to people's houses? Well, we can't do our work if we can't go to people's houses. Of course, there was fear, there was concern. But we were able to be really honest with our employees. We were like, "Here's where we're at. We could go three months without doing a single job."
Ben Lueders:
That's awesome.
Dan Thrasher:
I actually joked, my parents always said, "You have to have money for a rainy day," the worst case scenario. And I always was like, "I don't know. We haven't had one of those really in a while."
Ben Lueders:
Then you had one.
Dan Thrasher:
And then we had one. I was like, okay, this is why they always said that. So we were able to be really honest with our employees. We still had to do tough things, like reduce some expenses. Like, okay, we're not going to have somebody else wash the windows. We're going to do that ourselves. Or we had a lot of things like that where we just said, "Hey, we all are going to have to do some things that are outside of our job description. We're going to keep everybody busy, but we're going to have to do some of those things ourselves."
Ben Lueders:
Did you do mass layoffs?
Dan Thrasher:
We did no layoffs.
Ben Lueders:
No layoffs.
Dan Thrasher:
None.
Ben Lueders:
What about with there's all these layoffs happening right now in the tech industries and stuff. How have you guys weathered that?
Dan Thrasher:
We have not done layoffs in 20 years.
Ben Lueders:
That's pretty impressive.
Dan Thrasher:
Now, that doesn't mean there isn't ever somebody that doesn't make it.
Ben Lueders:
Yeah, of course.
Dan Thrasher:
Maybe it wasn't the right job for them, or they weren't able to perform right. But we don't do layoffs just to... Now, I don't want to say that it's impossible that we ever would have to. There was a lot of companies, I think, that through COVID felt like they had to, they didn't have a choice. We were fortunate that we were in a position to, even though it was slower, keep everybody and find ways to stay busy. And it bounced back. A few months later, we were able to go back to work, but with extra precautions and with only the customers that were comfortable with it. And we found ways, using technology to say, "Hey, we can come to your house, but we don't have to actually see you face to face. We can talk to you through our phones."
Ben Lueders:
Oh, sure.
Dan Thrasher:
And doing video and talk to you about your problem and how we can fix it.
Ben Lueders:
So you innovated.
Dan Thrasher:
We had to adapt and innovate in order to persevere. So that was an interesting time. It was stressful, but also, I think we can look back now and be proud of the way we handled it. And I think our employees appreciated it, and the transparency was important for them as well.
Ben Lueders:
Well, I'm sure you're all stronger because of it too. You go through those hard times. But I can see how just having that evergreen mindset of, "Hey, we've been around for a long time. We plan to be around for a long time." It's just you think a lot longer term about those things. Like, hey, there's going to be an end to this. It may seem like there's no end to this crisis on the foreseeable future, but there's going to be an end. And even though this is a downtime now, it's going to swing back up at some point.
Dan Thrasher:
It's going to swing back up, and we don't want to make it so that when it swings back up, we've actually got no resources because we stripped ourselves of everything that makes us great. So then when it comes back, it's like, oh, now we have to scramble to hire people again and train them again. So part of that perseverance is just staying the course.
Ben Lueders:
How big is Thrasher Group right now? How many employees?
Dan Thrasher:
We have just over 500 employees in eight locations in the Midwest right now.
Ben Lueders:
Eight locations, that's crazy.
Dan Thrasher:
Yeah.
Ben Lueders:
Congratulations.
Dan Thrasher:
Thank you. It's been fun.
Ben Lueders:
That's really impressive.
Dan Thrasher:
It's been really fun.
Ben Lueders:
And I know a lot of that has happened during some of this crazy stuff that's been going on with COVID and everything.
Dan Thrasher:
Yeah. I mean, we've been able to grow into some different markets, which has created cool opportunities for people to get promoted. Maybe if we didn't add these locations, we wouldn't have had that opportunity, but because we did, we were able to have people step into new roles, I was just at our Denver location last night, actually, doing an open house for the employees. And we just launched that 10 months ago, and we had 33 employees, and there's families in attendance. Super fun to be able to do that. But six employees stepped up from other locations and took promotions to move to go help create something. And it was super fun to see how excited they were that now they've grown it to 33 people and they see lots of growth potential continuing.
Ben Lueders:
That's pretty cool. And we've already kind of gotten into it, but the next P is people first. And Dan can't even talk about his business without talking about people constantly. You can tell that it's at the heart of Thrasher Group. It's at the heart of Fruitful as well. You got to put the people first. So how have you guys embodied that at Thrasher Group?
Dan Thrasher:
I think first and foremost, by being really clear about who we are and what we're doing, so that the right kind of people end up on the team. So I think being able to be really clear about that allows people that are naturally hardwired in a way that makes sense for them to be a part of our team. That's a lot more fulfilling for them when they come to a place that is value aligned.
Ben Lueders:
If you have that mission really clear, it's like you know who you're looking for and they know who you are better so that you're not trying to force someone to conform to this thing that they're never going to fit.
Dan Thrasher:
Exactly. So we try to be really honest in the interview process about what we're about. We try to be very competitive. In construction, there's a lot of people that get an hourly job with almost no benefits. We try really hard to have our benefits be similar to what someone would get in an office type environment in a construction, which is pretty rare, actually.
Ben Lueders:
That's very cool, yeah.
Dan Thrasher:
So we try to really make this about more than just a job. It's hopefully a career. It's a place where somebody can grow. We offer a lot of training. We really invest in people. Of course, they have to want to be invested in. And you certainly have some people that are way more excited about training and being developed, and other people that are like, "Eh, I just want to work hard, but kind of not do that." Okay, that's fine too. But we want people to have an opportunity to come in and grow and have opportunities to try new things and take on new responsibilities. And so those are all really important about being people first. And because of the other P's, like perseverance and some of the others, we're able to make decisions without having to lay people off, or without having to overly swing the pendulum on what they need to be doing and how hard they need to be working. We try to have it be more consistent.
And it's all about just when we make decisions, how does this affect the people? And we ask that question when we have to make a change. Sometimes they're hard, but at least we're asking the question, "Okay, how does this affect our people? How do we communicate that to them? What are the good things about it? What are the maybe not so good things about it? What are people going to not understand? How do we get ahead of that?" And we try to really be open door with that kind of stuff and clear and fair. Even when it's hard, we want to be fair.
Ben Lueders:
And you guys seem really passionate about promotions, about people moving up and getting new opportunities. I loved what you were saying a minute ago about how opening up this Denver branch, it opened up opportunities to people who maybe wouldn't... And we're in a spot where we're pretty small. And so sometimes seeing the career path is harder because there's just not as many opportunities. You have to grow a little bit in order to see the path, because otherwise the path is just kind of right in front of you. And so that's a challenge we're trying to articulate now. But I love that idea of as you grow, you're not only making new opportunities for new people to come to the team, you're making opportunities for people who've already been on the team and maybe might be feeling the ceiling. You're opening that ceiling up.
Dan Thrasher:
That's the goal. And I also think it's important that we communicate and we talk about the fact that I think, especially nowadays, titles and how often you get promoted and stuff is something that you hear a lot about. And certainly social media and things like LinkedIn have added to that. I think a pretty long run of four-year degrees being sort of the standard.
Ben Lueders:
Yeah. Is that what you guys look for? Is that the first thing you got to-
Dan Thrasher:
No. Not to say there's anything wrong with education, but that is not the end all, be all for us. But certainly certain roles you need maybe different training and education. But I think we try to be like, yes, we want people to be able to get promoted. That is a goal. And there are lots of people that are getting that opportunity. But even within a current role, you can be getting better. You can be learning and growing.
Ben Lueders:
Preach that. That's good.
Dan Thrasher:
You know what I mean?
Ben Lueders:
Yeah, that's really good.
Dan Thrasher:
So I do think that we have to sometimes help people realize that just because your title didn't change doesn't mean that you're not growing, and you're learning new things. And also helping people realize that sometimes their passion is more important than the role that they think they need to get to in order to have succeeded.
Ben Lueders:
Interesting. Yeah.
Dan Thrasher:
So sometimes it's like-
Ben Lueders:
Unpack that a little bit.
Dan Thrasher:
Well, I think now more than ever, people think they need to become a manager. Like "Oh, that will-"
Ben Lueders:
That's the only way to really advance.
Dan Thrasher:
"If I become a manager and I manage a team, then that will mean I arrived a little bit." And there's certainly people out there that are just really good at managing people, and that's what they love and that's what they're passionate about. But there's also people that just love what they do, and they're a contributor in a way that's really important. And we have to help sometimes people realize that for them, managing people might actually just be not that fun at all. And maybe they won't even be effective at it. Or even if they were effective at it, they just won't enjoy it. And so figuring out how to say, "Hey, you can still be a leader without being a manager."
Ben Lueders:
Oh, yeah. Absolutely.
Dan Thrasher:
So you're on a team. You don't maybe have a direct report, but you can have peer-to-peer accountability. You can say, "Hey, you know what we're about around here, and I don't really feel like this is good enough. How can we improve that?" Or being someone that is a really good culture fit that helps people live out our values. There's a lot of ways that people can be a leader without a promotion. But there are also opportunities get promoted. So both are good, but I think it's about having a conversation about what do you really want? Because sometimes the promotion isn't actually what you should want.
Ben Lueders:
Exactly.
Dan Thrasher:
But sometimes it is, and so how do we figure that out together?
Ben Lueders:
I love that. I don't know if I've ever told you this before, but my dad was enlisted in the Air Force, and he did a whole career in the Air Force. And he was a master sergeant, he made it to master sergeant. But he knew from master sergeant to senior master sergeant, he'd have to start managing people. But he loved his work so much. He was a Vietnamese linguist. He would go over to Vietnam and search for remains of fallen Americans from the war.
Interviewing people hut to hut, going into the jungle and doing a lot of translation work. And so he loved just doing the work of it. And he knew that going any further, it would turn into more of a bureaucratic thing, and he would be having to manage lots of... And it never appealed to him. But he got really, really good at what he did, and he found ways of leading from that role. And so I always think of that when it's like not everyone... I just love what you're saying, that not to everyone is managing going to be the thing. Because there are some people that are just darn good at what they do, and not great managers.
Dan Thrasher:
I have to imagine in the creative world that there's people that are amazing artists, amazing creators. And it feels like in order to move up, you have to then become a manager of people. But then that's taking you further away from what you're amazing at.
Ben Lueders:
Exactly.
Dan Thrasher:
And oftentimes the reason you went into it is because you love creating things. And I've had conversations with other creatives about it, and some end up loving managing people and stepping away from that. But others have been like... I've even had some that tried it and they were like, "I want to go back. I want to make things. I want to create things. I don't want-"
Ben Lueders:
This is the existential crisis that I find myself in, Dan.
Dan Thrasher:
It's a challenge.
Ben Lueders:
It is a challenge. I'm very creative and I also love people and stuff, and so I might be right in the middle. But I do know others, you're right, where they feel that pressure, that, "Man, I feel like I need to, in order to advance in my career, to be someone, I've got to wear this hat. But I just am better at this, or I like this." Yeah, exactly. That is so common in our industry.
Dan Thrasher:
I think there's an inner struggle that at some point in our lives we all have to go through, where we decide, what do I love doing, and when am I going to say, this is just what I want to do? And I'm not going to worry about the pressure around me to maybe always get a new title or chase the next job.
Ben Lueders:
Dan, for you, was it always clear? I mean, I imagine you did a lot of the work when you were younger, growing up with your dad, with Greg. But I imagine you've been doing the managing thing for a while. Do you miss the work?
Dan Thrasher:
Definitely sometimes. I mean, I started working on a crew when I was 14.
Ben Lueders:
That's so cool.
Dan Thrasher:
And I enjoyed it. I love being able to see what I did today. And in management, that's hard to measure sometimes. But when you are doing a job and you get to see, when I started this job, it looked like this. And when I finished the day, it looks different, or it's fixed, it's better. There's something really rewarding about that. And so people that work with their hands get that.
Ben Lueders:
Oh yeah. I love watching the time lapses and stuff, like how a garage, or even just seeing the concrete leveling, all that stuff. It's incredible.
Dan Thrasher:
When you work with your hands, you get to see progress that's very tangible. And that's rewarding in a lot of ways. I did that for a lot of years, and then I moved into more going out and diagnosing and selling, and I enjoyed that too. But I think what I've always enjoyed more than anything was the challenge of finding a better way. The challenge of how do you deal with this growth? I'm competitive, so if I heard that there was a company in another city that was doing something more than we were, it was always like, "Well, if they can do it, we can do it." And my dad always had that attitude too, so we would then be like, "Okay, well let's figure it out."
And that's kind of where some of that redefining our industry stuff comes from, I think, is that's what I get excited about is, okay, how do we just figure out a better way? And inventing a new way, that's really fun for me. So that naturally then led me into leadership and management type stuff. But some of my favorite days are still going back out in the field and talking and seeing if there's a better way to do the work we do. So I get to do a good mixture of [inaudible 00:28:28].
Ben Lueders:
That's awesome. Yeah, I think a good mix is always good. All right. The next P is private, and I started the podcast talking about are you ever going to be a publicly traded company? It sounds like probably not as long as Dan's around. I got this from the Tugboat Group, but the number of publicly listed companies dropped by 52% from the late 1990s to 2016, which is a significant indicator of the fact that fewer companies are going public. And you guys are a part of that, huh?
Dan Thrasher:
Yeah. I think what you read in the news and in business magazines is a lot about publicly traded companies because the information's readily available.
Ben Lueders:
Yeah. They're fun to talk about, they're big.
Dan Thrasher:
[inaudible 00:29:09] companies. You get to hear their earnings calls if you want to, and find out what their strategy is. And for a company that especially wants to grow really fast and sell, it's a way to get liquidity, and it's a way to fund growth. So it's not bad, in and of itself. But I think that the reason that evergreen companies want to be private or really closely held is that you can make decisions that are really long term. You're not having to answer to someone else. If somebody invests money in your company, they have an expectation of needing to get a return, and generally a return within a certain timeline. And that timeline isn't in 50 years, or in 20 years, or even in 10 years, it's usually in three to five years.
If I'm going to put money into your business, I need to know how am I going to get it back plus some. And so when you have investors, you now have to answer to them. And so evergreen companies and our company included, wants to be able to make decisions that we think make sense for the long term. So we actually will say, something we learned from Tugboat is we'll say, "Okay, as we make this decision, what would be the best thing for us to do if we are under the assumption that we're going to be here in a hundred years?" Like long term. Now, do I expect to be here in a hundred years? No. But if our organization is, what's the right decision for us to make under the assumption we're going to be here in a hundred years? And let's be honest, even if we think in five or 10-year terms, that's longer than any publicly traded company.
Ben Lueders:
That's right.
Dan Thrasher:
Because maybe a quarter is the longest window you're going to get in a publicly traded company. You have to answer every quarter to your results. And that's why you see layoffs. As soon as quarterly earnings come out, you hear "10% reduction in staff." Well, it's because next quarter better be better. And a quarter is just not very long.
Ben Lueders:
It's not very long.
Dan Thrasher:
And so for us, it's like if we want to be people first, how can we be people first if every quarter, we have to be great. Sometimes you have to invest in a new technology and it's going to hurt your profitability. It's a big expense. We're actually going through a huge software implementation right now, and it's very expensive. And if we had quarterly earnings call coming up, I'd have to be explaining why we're investing all this money in... And our cash flow is not going to look as good during that season that we're investing in it. But when I think long term, it's going to help our employees be more efficient, it's going to help our customers have a better experience. It's going to give us better information so that we can make better decisions. It's really important stuff.
Ben Lueders:
It's a good choice for the long term.
Dan Thrasher:
It's a good choice for the next even few years, let alone a hundred years. But if you were just strictly to look at the financial performance of our organization in the next quarter, you probably would say it isn't a good investment. And so I think that is really, when we talk about wanting to remain private or closely held, at least just a small group of friends or family, that's why, is we want to be able to think really long term and make decisions for the long term. And that's only possible if you don't have other investors harping on you.
Ben Lueders:
Well, and I feel like there's already so many pressures on businesses, on business owners. Can you imagine also having that pressure of having to prove and show every single quarter of like, "No, no, no, it's going to be better than last quarter and better and better." I just feel like that's a great path for burnout, probably, for a lot of people. I mean, stress beyond-
Dan Thrasher:
You see the turnover in even CEOs of these big publicly traded companies. And you can tell it's taxing. But I mean, there are companies that it makes the most sense to go that route. Maybe they couldn't scale without that kind of capital. But that's not true for most companies. And so to have the aspiration be to go public so you can say you did, that's not what gets us excited.
Ben Lueders:
One of the things that I thought was interesting when I was looking at the Tugboat Group is there's a bunch of companies on their website that I'd heard of that are private companies.
Dan Thrasher:
There are so many big private companies.
Ben Lueders:
Yeah. I was really surprised. Are there a few off the top of your head that you think of?
Dan Thrasher:
I mean, I know Interstate Battery, huge battery company, privately held. Obviously, you've got Chick-fil-A, companies like that, that are huge. There are a ton of-
Ben Lueders:
I think I saw Mars Candies or something, it's on there.
Dan Thrasher:
There are a ton of... And when you think about them, most of them are generational, and they just had really consistent, steady growth over a really long time. And so they didn't have to take on a huge amount of capital. I'm not saying that they didn't ever have debt.
Ben Lueders:
Sure.
Dan Thrasher:
But they were able to just consistently grow. And we look at it too, as if you grow 15%, if your company and your revenue grows 15% every year, which I think most companies in most industries are like, 15% is a doable amount, you double every five years. 15% growth every year, every five years, you double.
Ben Lueders:
That's math, everybody.
Dan Thrasher:
You start compounding that over time and you think about your business. And if you do it for 20 or 30 years, if you double every five years, you're going to be a really big company.
Ben Lueders:
Oh, yeah. Well, that leads us very nicely into profits. So we've already talked about how you're people first, but that doesn't mean you're not for making a profit. I mean, you would be, what, a non-profit, I guess, if you weren't about-
Dan Thrasher:
And even a non-profit, [inaudible 00:34:38] cash flow. You can't just not have any income or whatever. So yeah, I think this is where some people get a little confused. Evergreen, purpose-driven, but now you're saying profit is a requirement. It's one of the seven P's to being evergreen? Well, the reality is, without profit, you die. An organization cannot sustain without being profitable.
And so it's part of that perseverance thing, is you can't just decide, we're going to just keep going but not worry about being fiscally responsible. So we have to be profitable in order to invest in growth, in order to take care of people, in order to think really long term. All those things require profit. And so we see profit not as the motivating priority, but we see it as an absolute requirement. But we also see it as kind of a byproduct of doing the right things.
Ben Lueders:
Yeah. Like that quote in the beginning.
Dan Thrasher:
Yeah, exactly. So that's really just, of course you have to be profitable, but we're pretty open about that. It's an important thing. If we want to continue to be able to have employees have opportunities, well, we have to be profitable first because we can't give you a promotion to give you a raise if we're not profitable. It just doesn't work that way. If you want to know whether your customers appreciate what you're doing, profit would be an indicator of that. If you can do a good enough job that they're willing to pay you enough that there's something left over, that's an indicator of value that you're providing to that customer. So it is an important metric, and it's something we have to keep an eye on, and it's something we have to make sure that we stay on top of in order to stay evergreen, in order to be sustainable.
Ben Lueders:
That's awesome. All right. Next is paced growth. How would you define that for Thrasher?
Dan Thrasher:
So, I just talked about 15% growth every year would mean you double every five years. So, we really use that 15% mark as a good target.
Ben Lueders:
Are you guys on track for that?
Dan Thrasher:
We have a goal to grow 15% every year. We want to have 15% growth. One of the concepts that we use to describe this is called a 20-mile march. Have you ever heard of that?
Ben Lueders:
No.
Dan Thrasher:
This comes from Jim Collins' book, Great By Choice, one of my favorite books from a business standpoint I've ever read. And one of his concepts is the 20-mile march. And he uses stories about trying to get to the South Pole and two different teams that were trying to be the first to get to the South Pole and back alive. And so he uses those two as examples. And one group, they, on a really nice day, would go 50 miles. On a really crappy day where the weather was really bad and it was really cold, they'd hunker down and maybe not make any progress at all.
And the other group, they said, "Hey, we're going to do a 20-mile march every day. On the easy days, when we get to 20 miles, we're going to know we could have gone further, but we're going to stop. We're going to rest. We're going to take care of our bodies. We're going to make sure we're going to be okay. But on the really bad days, we're going to fight for 20 miles. We're going to persevere and we're going to push hard and we're going to grit out 20 miles. Even on the worst days."
Ben Lueders:
I think I know how this ends.
Dan Thrasher:
And of course, the one group ended up not making it, but the other group that did the 20-mile march, they ended up being the first to get to the South Pole and back. And so Jim Collins suggests that the best companies, the most sustainable companies, and he uses real research of real companies. And he says that that's one of the things that really good, long-term sustainable companies, he calls them 10 Xers. It's a company that outperformed an equal competitor that had the same opportunity at the same time, but they beat them by 10 X, so he calls them 10 Xers. One thing that 10 Xers do is they have a 20-mile march. They grow consistently. They don't, when market conditions are great, grow by 50%, and when market conditions are bad, grow zero or go backwards.
They grow at a consistent rate, and of course, it's not perfectly 15%. But so in a really good year, we might grow 18%, but in a really tough year, we might grow 10 or 12 or 15%, but it's a really gritty 10 or 15%. And in a really easy year, that 18% might come kind of easy. But the idea is over time, you're consistently going to work really hard to accomplish your growth in a tough year. And you're going to be careful when things are really easy to not go too far, because you want to make sure that your people don't burn out. You want to make sure that you don't over-leverage yourself, things like that. So that's really when we think about paced growth, what we want to be doing.
Ben Lueders:
I mean, it just sounds like the tortoise and the hair. I mean, this is the slow and steady wins the race every day. All right. I think the last one is pragmatic innovation. And you've already talked about ways in which you've had to innovate as things get hard but tell me about pragmatic innovation for Thrasher.
Dan Thrasher:
So innovation, I think most of us would agree innovation's important. You got to continue to find new and better ways to do things. If you don't innovate, someone else will, and they'll make you obsolete. So you want to be innovating. I think the word pragmatic being before it is really important because innovation can be really expensive.
Ben Lueders:
And risky too.
Dan Thrasher:
It can lead you down paths that end up being the wrong paths. So you want to be innovative, but you want to be thoughtful about it, and you want to make sure that the innovations are things that are really going to be something that helps your core business. And that you stay true to your core values and all those things while you're doing it. And so I'm going to use another Jim Collins example if that's okay.
Ben Lueders:
I'm going to link this in the show notes to you guys.
Dan Thrasher:
You might have [inaudible 00:40:17]
Ben Lueders:
[inaudible 00:40:17] read up on Jim Collins.
Dan Thrasher:
This is also from the same book, Great by Choice. But he talks about a concept of bullets before cannonballs. And I'm a cannonball guy, so I'll tell you about this.
Ben Lueders:
Let's unpack that.
Dan Thrasher:
So, I love trying new things. I love getting a new product and being able to offer it to customers. Well, when you innovate, if you just take big shots that are expensive and you don't really know if they're going to work or not, it's really risky for the business. So it's hard to persevere, it's hard to be people-first if you're not being smart. Well, he talks about a pirate ship as an example. And he says, you only have so many cannonballs.
And so if you fire a cannonball as soon as you see a ship and it doesn't hit, you've now wasted one of your cannonballs. And if you just keep shooting cannonballs, that's not going to be good. But if you fire a bullet and it doesn't hit the target, and then you calibrate, and then you fire another bullet, "Oh, we're getting closer to the target." You fire another one. Now we're hitting the target, we're hitting the bullseye. Now, let's fire a cannonball.
Ben Lueders:
Let's not waste them, yeah.
Dan Thrasher:
And so that's the way we like to think about innovation is, okay, let's test this. I'll just use an example right now. We do a lot of concrete lifting and leveling, and we seal concrete. We seal joints in concrete. We seal the surface of concrete to help when snow melt and salt on the streets and stuff like that so that it doesn't wear out your driveway. Well, there's a product that we have been looking at that actually would allow you to then change the color of the concrete also. So it seals the concrete, but you can also make it look nicer by adding color. It stains the concrete base.
Ben Lueders:
Sounds cool to me.
Dan Thrasher:
So it's neat. It's nice and it's fun. Well, 10 years ago, I would've fired a cannonball and I'd have just been like, "Let's just roll it out to all of our locations and let's just go for it. And we'll buy the equipment we need for everybody, and it'll be great." Well, then if that doesn't go well, you've got all this investment wasted. So what we decided was we wanted to try this. So last year we launched it just with one team in Omaha. And we said, "We're going to do it for a season and find out, are we good at it? Do customers want this? How much do we need to charge for it in order to be profitable?"
Ben Lueders:
It's like taking a step back.
Dan Thrasher:
"How much will a customer pay for this product? And is it enough to make it where it's worth our while? What's the seasonality look like? If it's really seasonal, does this mean it's going to be even harder for us to keep our employees busy through the winter?" And that might threaten that no layoff policy. All sorts of different things. So we're testing it and we'll probably test it for a year. And then if it goes really well, we'll launch it in a couple more locations. And then if that goes really well, we'll probably launch it in all of our locations. We did the same thing with gutter guards, to make sure that people don't get leaves in their gutters. We tried it in two locations. It went really well. Our customers loved the product. We had no issues with it. We didn't want to have it be where we were having to go back and fix things because customers were having problems.
So once that happened, we now have launched it with more of our locations. And so we wouldn't have always been this way, because again, like I said, I'm a cannonball guy. I love to just fire a big cannonball, but I've learned through the school of hard knocks and some education that it's better to go a little bit slower and make sure things are right. And I mean, we have employees that are like, "Come on, we want to be able to offer this to our customers. Why can't we do it?" And I'm like, "Yeah, I would love to be able to give you that, but that's not actually what's best for the business or the organization. It's really not even what's best for your customers. Let's get good at it first, before we go and say it to the masses."
Ben Lueders:
[inaudible 00:43:51] are experts.
Dan Thrasher:
So that's where we have to be more patient, and that's where the pragmatic word really comes in.
Ben Lueders:
All right, Dan, we've made it through the seven P's. And we like to close our episodes if we can with a little bit of a practical thing for our listeners. And so I was just curious if there's anything you wanted to leave with everyone, anything practical that they could do, or just to take the first steps with being an evergreen business.
Dan Thrasher:
I really think probably for someone that wants to be evergreen, you do probably have to start with purpose. You really have to make sure that you've explored that and understand why do we do what we do? Start with Why, Simon Sinek's book, is a good example of really that ends up being a really critical thing to rally your employees, to make sure you're resonating with your customers. And so for us, when we did that, it really helped us. And we really thought about purpose, mission, and values, those three things. And purpose is really the most important.
But I think then it's really helpful to have all three. And you hear vision, and there's lots of different words out there. But at the end of the day, what I mean is understanding your purpose, which is why we show up every day. This is why we get out of bed in the morning, this is why we're doing what we're doing, and making sure that we really can articulate that to people. And then I like to think of an analogy of a football field. So the purpose is why we show up to play. So why do we want to show up to play the game is our purpose. Our mission is the end zone. It's where we're going, it's what we're trying to accomplish. I'm trying to score a touchdown.
So why is your business in existence, is why do you show up to play? What do you do? What are you trying to accomplish? That's the end zone, that's the mission. That's what we do every day. And then values is the sidelines. This is the things that we're committed to no matter what. So as an employee, I can give you a lot of empowerment to make decisions every day because if you are all about our why, or our purpose, and you understand the mission where we're going, and you understand the rules that we're not willing to break, the sidelines, you can't go out of bounds. If you understand our values, I can trust you to make decisions within that.
And I don't have to micromanage you. I just know that you're going to live within these core values that are the ones that we're not willing to break or go against in the future. That I think if you can really define those three things, it really gives your company an opportunity to really empower employees, to attract the right employees, to really take care of customers. And it's that first step to becoming an evergreen company.
Ben Lueders:
Dan, thanks so much for being on Growing a Fruitful Brand. And as always, grow something good. Thanks for joining us today on Growing a Fruitful Brand. If you found today's show helpful, don't forget to subscribe and consider sharing it with someone who might also enjoy it. If you'd like to work with Fruitful on a branding website or messaging project of your own, you can always reach out on our website, fruitful.design. So until next time, don't forget to grow something good.
