$400 Million, 24 Deals, and No Fund to Answer To

They looked at me and said, "Don't talk to me about a budget and numbers, because my mission is greater than that." And I said, "Well, it may be, but your mission has to be financed."

Today's guests are Edward Crawford and Ralph Manning, co-founders and co-CEOs of Coltala Holdings, a permanent capital holding company focused on building enduring businesses. Since launching Coltala in 2017, they have deployed more than $400 million across over 24 transactions spanning healthcare services, essential services, manufacturing, and aerospace.

If you want somebody at 2:00 a.m. when something's happening with your company, and you can call me and I'll help you, then I'm your partner. You want a guy from New York who has a Harvard MBA who's going to tell you how great they are, then you can maybe go work with them. They might have more money than we do, they might have more expertise, but if you want a real partner, we're your guys.

Crawford's background spans the Peace Corps, naval intelligence, Goldman Sachs, and private equity, shaping the firm's mission, capital strategy, and relationship-driven approach. Manning brings decades of lower middle market investing experience and leads the operating discipline behind Coltala's portfolio through the Coltala Enterprise System. Together, they combine purpose with execution, strengthening leadership teams, removing operational bottlenecks, and building businesses through people, process, and performance.

A five-year cycle is relatively quick in the lifespan of a company. Now, we have the confidence to know so much about our business and be able to see the risk. Just because you can't see risk in a business doesn't mean it's not there.

What made y'all successful in implementing that versus like so many companies that failed?

Simplicity.

The Deal Table is brought to you by Capital Southwest, a Dallas-based internally managed business development company focused on supporting lower middle market businesses. The firm partners with business owners and private equity sponsors to provide flexible capital solutions that help companies achieve their growth objectives. Capital Southwest, a best-in-class BDC built on partnership and long-term value creation. Security National Bank, a family-owned bank with more than 60 years of serving business owners who value a true financial partner. From lending and treasury management to long-term financial relationships, the bank takes the time to understand the people behind the business, not just the balance sheet. Security National Bank, they bank the person, not just the business. Blockchain.com. Since 2011, Blockchain.com has earned the trust of more than 40 million users and facilitated over a trillion dollars in crypto transactions. Through Blockchain Wealth, they bring investors and their advisors the white-glove service private banking has offered for decades, built for digital assets. Blockchain.com, in digital assets since the beginning.

Ralph, I'll be honest with you, I know way more about Edward.

Mhm.

And I think he's a little bit more on the internet. He's like Indiana Jones type, superhero type, James Bond type.

Right.

Like he has a lot of hats. I think he actually has an Indiana Jones hat.

Indiana Jones hat?

So I'd like to learn a little bit more of you, just put you in the hot seat, because it's so easy to just go where Edward's been at. So welcome. Thanks for being here.

Yeah, thank you.

So the floor is yours. Tell us about, what do I need to know about you?

Well, gosh, that's a great story. I grew up in Fort Worth, live in Fort Worth, so we kind of split and divide and conquer Dallas and Fort Worth, and it does make a difference, because when you have a presence in both locations, you have a better connection for what's going on in those markets in terms of what we do. And then networking with people is a big part of it.

Mhm.

So I'm in the Crescent in Fort Worth, which a lot of people don't know there's a Crescent in Fort Worth, but there's a Crescent in Fort Worth. And there's an Old Parkland in Dallas, and they have kind of become the epicenters for what I would call an economic ecosystem, if you will. And you know what I mean by that.

Yeah, I use Old Parkland as kind of a signaling device, where my rule of thumb is everybody you meet is always full of crud, you know? And if it's, "Oh, I'm doing 100 million this, a billion that," I'm like, cool, do you do a lot of business at Old Parkland? What's that?

Got it.

You don't do all that stuff you just said.

Yeah. Absolutely.

So, Coltala. I know I won't steal your thunder, but that's an interesting name. Where does it come from? Because I know that's your favorite story.

Yeah, so it's actually, Ralph failed to mention that he runs a business called Whistlejacket Farms. So he's been in the horse business, I think three, maybe four generations, and his daughter's running it too. So horses, the animals, the outdoors is something we both enjoy.

And as we were thinking of a name, our opportunity is, we want to build the people to build the businesses to build America. That's kind of our ethos, right? And mission is margin is how we think through that. And a colt is a young horse, usually four years or younger. Ralph, maybe it's four and a half, Ralph would know better. But it's a growing horse that's running, right? And then "ala" means wing or wing-like structure in both Latin and Spanish. It's a horse that we put wings on. So our idea is we find a business that's growing, that's got a lot of potential, whether it's leadership, whether it's structure, and we try to help put wings on the business by building out the team, looking for new markets, and expanding it.

And so it was as simple as that. And most of the names that private equity firms pick are like Red Dog or Bird, or, you know,

White Creek.

Brook Creek or whatever. And those all cost a lot of money and they're not super creative. And so with Coltala, there was a fairly attractive girl on Facebook named Coltala. Outside of that, all you're going to see is us.

So I think it cost $45 for the website. So I'm a value guy. And it was a really good value, and if you ask about Coltala, that's all you're going to see. There's nothing else but us.

Other than the girl on Facebook.

Yeah, exactly. And we're trying to develop enough content to where we at least compete somewhat with her.

You can always just hire her as an influencer.

Post internet, it's gotten really hard to come up with a unique name. If you've ever tried to name something, you know what I mean.

You know what's interesting about that is yes, but also no. Because I just formed a new LLC maybe a little over a month ago. And I don't know if I want to put this on the camera, but I'll just share it, because it's obvious. I was like, I want to start a new LLC for kind of what I want to do with my what's next. I just finished SMU with my executive MBA, strong ties to SMU now. Well, what about Peruna Ventures?

It was available. Not just the website, but the Secretary of State.

Yeah, great.

So I have a new LLC that's called Peruna Ventures LLC. And then I was like, well, what are the other websites? Peruna Capital, Peruna Holdings. I was like, how is this available? And it was.

You have to get creative. And what Ralph's speaking to is, we came up with another name, our first choice, which was Cultaire. So "cult," same root, with Voltaire, which means to unlock. So unlocking the potential.

And is there a female?

There was no, but there was an operationally focused private equity firm with a horse theme already.

Okay.

So when we saw that, we're like, gosh, there really aren't many new ideas. Like, we're going to have to get real creative, right?

So, mission and margin.

Mhm. Yeah.

Explain that to me.

Well, I'll tell you what, that's an interesting story. I'll not use a name, but I was on the board. I got invited, tricked, to go on the board of a very high-profile nonprofit. We were headquartered in Las Vegas. Two locations here in Texas.

And what I didn't know at the time, when it was a 35-year history, Frank Sinatra was one of the spokespeople, Ed McMahon, it was legacy history. It was in terrible condition, and it was on the verge of bankruptcy. So I came in, and then they kind of thrust me into it, and in 2005, I got to lead my first turnaround, which was a nonprofit.

But I was surrounded with social workers who had a very passionate mission, and a very important mission. And they looked at me and said, "Don't talk to me about a budget and numbers, because my mission is greater than that." And I said, "Well, it may be, but your mission has to be financed." You know, and so you couldn't say that to them, but over a period of about 18 months, actually, we turned it around

and reversed the course, and it was an incredible experience to live through and to go through that. Experientially, I learned that if we run a better business, even though we're a nonprofit, run a better business, we can provide higher quality care. And their product, their service, is to abandoned, abused children, right? Who are the poorest of the poor. Have nothing but the clothes on their back. And that's where the mission and the margin came into play.

Edward, conversely, was in the Peace Corps, and started a coffee cooperative, which is still in existence today. The nonprofit that I was on the board of for 12 years, still in existence today. And so this ethos, that mission and margin are not mutually exclusive, is not true. They're actually mutually inclusive. And so we kind of all know that in the not-for-profit world,

but it applies to for-profit too. You've got to have a purpose, you've got to have a mission, it needs to be bigger than you, bigger than any one person. So when we go into businesses, we acquire a business, and the goal is to, as we talked about with Coltala, take that business from where it is today to a very different place. There's a mission and margin ethos that we want to bring to that work. Not just build a great business, but do it in a way that has more meaning than that, more purpose.

That's actually how we connected, on that purpose. Because it's what drew us together. You mentioned the coffee cooperative. One of my mentors was the chairman of Whole Foods, and he said, in 2008, Whole Foods will only exist if we make a profit. And we have all these people that have water projects in Colombia, and people that we're serving. If we don't exist, they're in trouble. We have to make a profit. And so that's where the margin piece comes in.

And if you look at just the basic economics of this country and of our economic ethos, if you look at Adam Smith, he has The Wealth of Nations, which a lot of people refer to for the invisible hand of economics. Didn't work so well in Russia.

All right.

But if you look at his other book, The Theory of Moral Sentiments, it's about community. It's about impact. It's about taking care of the poor. And so if you combine those two books, you have America, because we have to have a safety net for those who are the poorest of the poor, but we also have to have the ability of someone to make it up through the top, right? And make a profit.

And so if you look at a lot of what Old Parkland stands for, it is a lot of that. It's economic opportunity for everybody, right? It's not just the rich get richer, but it's also not just take everything and give it away at the expense of people making a profit. So we really connected on that, and it's what drives us and gets us out of bed each morning, because we're creating jobs. We feel like we're making a difference.

Does the mission part dictate the types of businesses you invest in?

Well, I think it's become more important. I think when we lived, we all did, of course, but we lived through the pandemic and went through a pretty, there's a story there, but I won't go into it.

In the building that we were in at the time, our Fort Worth office at the time, there was a bank in the building and an oil and gas company. So the building was able to stay open because they were providing mission-critical service.

Right.

And that resonated with us too, because we were in a business at the time that maybe wasn't deemed so mission-critical to society.

And it was pretty compromised during the pandemic. All of our businesses today are mission-critical with the services that they're providing. They are not luxury goods. They're not optional items.

Yeah.

They are mission-critical to society, and so that was an experiential period that we lived through that

informed our thinking. So that was 2020. So every acquisition that we've done subsequent to that has been

mission-critical.

mission-critical businesses. That's the theme.

Can you go into your definition of mission-critical? Because obviously we all know what, in the COVID era, what that means for that.

Yeah.

But what does that mean for you moving forward, outside of

death. Like literally, our health care business. Water's pretty

pretty important.

Maslow's hierarchy is somewhere around

Pretty crucial. Yeah, I mean, as things go, transportation. If we want to fly on airplanes, what we're doing there, it's not optional work. We're in Old Parkland. So we have a real estate consultancy business. It's really an engineering firm. But without that business, commercial

properties don't transact. You mentioned earlier you're tied to commercial real estate. So they don't get built.

Right.

And you don't buy and sell the Sears Tower, or institutional grade real estate, without the systems of what we're doing there on the engineering side and consulting side. So that's how we would think about it.

What about defense? Because I know you hosted the Sentinel

Sentinel defense system.

Definitely part of it, part of the aerospace. Yeah, there's a defense component there. And so, absolutely, 100%. I mean, that's like keeping those airplanes in the air. There's four specific planes you might want to talk about.

Yeah, there's the Doomsday plane and there's various others that we work on that, if stuff hit the fan in this country, that is the go-to vehicle and we're the ones that do a lot of the work on it. The second, third most important person in the country, we do some work for their planes.

We're keeping people safe when you get on a Southwest flight. That's part of our job. But also on the defense side, when people are in harm's way or protecting our country, making sure that, you see a lot of plane crashes and people die in plane crashes that aren't getting shot out of the air. And that's not something we think is acceptable or that we want for our servicemen and women. So we're both protecting people who are moving around, daily commuters on Southwest and American and United, but also the American warfighter. And we feel very strongly about that.

Love that business.

Can you talk a little bit about specifically what that business does?

Yeah, so we have two businesses within Coltala Aerospace. One is a consulting business, engineering consulting. So we work for all different types of businesses doing their engineering support, write designs, that sort of thing. And then we have a composite repair business. It's a structure shop. And so think of wings, wing flaps, inlets, thrust reversers, the cones on the front. When there's drainage in a wing and a bunch

of wings are getting damaged or have water in them, we'll take a couple hundred of them and fix them. When a plane needs to get redone, we'll do that. So one of the theses in that investment is an aging fleet. A lot of Southwest and American planes should be retired at 21, 22. They're 26 years old.

That's why your planes are getting stuck.

for mechanical failures. It's because it's older planes. The B-52, which is near and dear to my heart because I'm from Shreveport and we have Barksdale Air Force Base, is a fairly old plane. Right? And so we've got an aging

fleet on the commercial side, but also on the military side. Even some of our drones are old. If you look at the Global Hawk, right, the ScanEagle. Some of these drones are older and need to be refurbished and kept going. And so we are the service group that keeps these platforms going and safe in the skies.

It's a very interesting business. And I'll give you an example. If the government buys a lot of planes, they might buy a Gulfstream. And they're going to fly really important people on this plane. Well, they've got to have communications equipment installed on that plane, defense equipment, all kinds of things.

Gulfstream doesn't have a set of drawings for that, right? They don't have a plan for that. So they'll come to our business and they'll say, "We need to install this communications equipment. It needs to go on the roof." And so we'll figure out how to do that.

Yeah.

And our engineers will create something that, before that time, there wasn't a how-to manual on how to install it. Of course, it has to be FAA compliant, has to pass all the regulations. And so there's some very interesting

projects that come through that company. And if you were to see these aircraft parts, back to the other business, when they come into receiving, when they come into the plant, boy, they look like they've been through a war. I mean, they're dirty and broken. And then they go out the shipping dock and they look like brand new parts. And so what makes that business interesting and also complicated and challenging is we're not making widgets, the same product every day.

So things come in broken, all kinds of parts, different every day. They have to first be engineered. You have to develop a plan on how you're going to fix it. So how are you going to fix this part? That has to go to the customer and they have to approve it, because if it's beyond economic repair, they won't fix it. So you fix it and then it goes to production. One of our businesses actually will outsource to the other engineering business. We'll work with the repair business to help them on the engineering side. But yeah, it's very interesting.

We get calls, a lot of people want Starlink in the fuselage but it doesn't fit. Elon Musk Starlink, right? So we'll look and say, "How big's your fleet?" We'll figure out a way to develop a part. We'll figure that out for you.

It seems like, and I might be showing my ignorance of the space, but I know technology's always evolving, especially in the defense tech world, we're always trying to evolve and always progress. But the last two years, with

Ukraine and then now Gaza, it feels like warfighting is revolutionizing at an extremely fast pace, more so than it has in like the last 30 years.

Probably the last 15 or 20. But if you're familiar with the book Unit X.

What is it called?

It's called Unit X, about DIUx, the Defense Innovation Unit. Ash Carter stood this unit up. Palo Alto, some MIT guys went and started it, right? And they were supporting

the DOD through technology. And then they got away from it because the DOD and the US government, frankly, got so hard to work with. So Ash Carter stood up this unit, they went back to Palo Alto and said, "Hey, come do contracts with us. Come sell us technology." And they said, "No, we're doing Facebook and Google. We're doing commercial stuff." And so they broke the bureaucracy and they said, "We need drones, we need AI, we need this for the safety of our country," and got Palo Alto back involved. Since then, since that book, since what he stood up, you've had 25

venture firms solely focused on defense tech. And Sentinel Defense sold out, we didn't have enough room for all the people because so many people were interested in that investment, right? So you really have a massive amount going through it, and you look at Saronic at a $9 billion valuation. You've got Shield AI building V-BATs and X-BATs that are autonomous drones, in Plano, right? You've got so many defense companies that are growing and have multi-billion dollar valuations, whereas that wasn't possible before. Nobody was going

to disrupt the primes. Now you can make the argument that there are a couple of emerging primes and the primes have invested in them. You look at Will Edwards' business here in town, Firehawk, 3D printing his own fuel. Raytheon's an investor. So the primes are investing in these businesses because they can't move fast enough. So it is the first time, thank God for Ash Carter and what he did, I think it was a big service to this country. But it's fast. When I was in Afghanistan, the only drones we could use outside of our big

commercial, I mean our big drones, the small ones, if you wanted to use them they were Chinese. We had nothing. Predators and the big stuff, but nothing small.

So when I went to my MOS school in the Marine Corps, I was in artillery. Even though the fleet had already moved on to the AFATDS system, we were trained, and this is circa '99, 2000, on a Vietnam-era computer system, because that's what was certified in the training system, even though they'd already

moved on in the fleet. But they hadn't developed a training system for the fleet at that time.

They were using iPads in fighter jets to determine certain things because the system in the fighter jet couldn't keep up with the iPhone.

Wow.

And that really doesn't work very well.

I mean, there's so many stories about the military and technology that kind of

But the trajectory is good. We didn't have enough minesweepers to put them in the Strait of Hormuz. We had like four in Japan and we had two somewhere else. We don't have any of these. We're running out of missiles.

At one point there was a bottleneck where Minden, Louisiana was really the only place that you could produce enough black powder to do anything, and it burned down. It's like, if Minden, Louisiana is on the front page of the Wall Street Journal for being a supply bottleneck, that's a bad thing. I'm from the area. It's a great town, but.

So you guys are a lower middle market, middle market investor in these businesses. Is this a thesis you developed and you went out looking for things that fit the thesis, or did you find the business and develop the thesis?

A thesis that we've been on since day one, really. Yeah.

Okay.

The thesis evolved over many, many years doing this, right, in my prior firm and others. But when you're buying these smaller companies, they have a lot of constraints. And you see that, and all this stuff's been written about, and there's a lot more familiarity about it today, but growing up in the business and learning it, it's like what got you here won't get you there. But what got

you here is what you know and you trust and it's been working. But that's kind of when we come in, is that a lot of these entrepreneurs start to hit a ceiling. And a lot of times, many times, sometimes they know it, they don't want to acknowledge what the constraints are. Other times they just feel the headwinds and it's getting harder, it's not like it used to be, and they're tired and they want a transition.

And so yeah, that's one of the things. There's a longer story there we can talk about, but bringing a toolbox, right? As Edward mentioned earlier, because one of our early things was, you always see these projections, and you do a lot of investment banking work, so you understand what I mean, but there's just numbers on a page. Those numbers on a page probably do represent

the market opportunity. That's probably a very viable projection. But it doesn't answer the question, does the company have the capability

Right.

to do it? To actually fulfill that market opportunity? And if they've got these constraints that we've identified, and that's the predominant reason why the owner operator is looking for some form of transition, they probably don't have the capabilities. And so when you acquire a company like that, well, what are you going to do?

I mean, if the owner operator is stuck but he's got this interesting market opportunity, how do you unlock it? And so bringing a toolbox is how we figured it out. There's four or five different things that happened, but it's been an interesting journey.

That's what's different about our firm. It's called the Coltala Enterprise System. And if you're familiar with Danaher or the Toyota Production System, that's where it came from. And so as we look at each business, we start with a certain methodology.

The first thing we do is try to make sure it's the right leader. Then we try to get the top five leaders around that leader. And then we start putting in our system, right? Sometimes we'll do pieces of our system before. But it's a lean management system. And so, for example, we find the top three problems in the business, and then we address them using our problem-solving toolbox. Aerospace is a good example. We had a constraint. We had a 140-something day lead time. And our customers didn't like that a lot. It was tying up money in the shop. It was tying up people in the shop. We had labor issues.

And so we basically did what's called a value stream map. We drew out every single process from when something comes in at intake and eval all the way to paint and getting it out the door. And as we drew that up, we said, "Where do the bottlenecks lie? Where are the biggest lead time bottlenecks?" Eval, the paint shop, and then final inspection. We spent two weeks doing kaizen, which is the Japanese word for continuous improvement,

working on each one of those problem sets and just grinding it away and figuring out the root cause. Root cause in the paint shop: we were doing dusting, we were doing painting, we had large changeover, stuff was piling up. We got a new paint shop. It was like 80 grand. Not a whole lot of money. We fixed it, right? We had intake and outtake going through the same door. We fixed that. And then we had eval. We said, "Let's streamline the eval process." So instead of taking the whole thing apart and figuring out what it is, let's take a look at it, see what we think it is, get back to the customer.

If they say go, then we take it all apart, right? So we did those three things, and we cut lead times down to 30 days from 140 and change.

In three months.

to 30-something days.

Now, here's two things I'll say about that.

Unlocked the business completely.

One, the best ideas. These are just some of the principles that we've learned that we love to share and talk about, because of the wisdom that comes from it. The best ideas come from the people doing the work. The people doing the work knew the answers to all those questions, but they

did not have a framework or a structure from which to get them out. That's one thing. The other thing that I would tell you that's

Because they knew there was a bottleneck in that.

Right. Well, they knew there was a bottleneck, but they did not know how to solve it. But more importantly, think of it this way. Think of it like a NASCAR race or any kind of race, the race cars going around. Race cars do what? They go through a pit stop. And what do they do in the pit stop? They work on the car, right? And they work on that process over and over and over again. How fast can they

make, how short can they make that pit stop? That's a value stream map. They take it and they see how many minutes, seconds can we take out of that process, so they keep iterating, iterating, iterating and make that pit stop tighter and tighter. But the point is, they bring the car in and they work on it and they put it back on the track. That's called working on the car, working on the business. So most of these businesses, the people have never had permission to take a time out and work on the business.

going around the track, and eventually they crash.

They burn up the car because they don't come into the pit stop. So all we do is we say, "Okay, that's called a changeover in a plant." A changeover is you're changing the line. All we do is we show them how to work on the business. And 20% of the time needs to be on the business and 80% needs to be in the business. And it's what happens in that pit stop that gets the business to go. Businesses don't grow in a straight line like this.

They grow like this and then there's these flat periods and they grow. What happens during that flat period determines the steepness of that curve when they grow again. And so, back to the mission. What we love to do, I tell all of our teams, I say you're just as good as the folks down at Lockheed or General Dynamics or out at Boeing. But those companies invest in their people.

Training program.

Development. And they invest

a lot, because turnover is very expensive. And so we do that. That's what we enjoy doing, is investing in our people, because they're just as good as the people down at Lockheed, but most of the time, almost every time, they haven't had the opportunities or the training.

That's why, you know, extraordinary

People, plan, process, performance. That is the sequence that we do it in, and we have a profit share for each business that democratizes it. Very different than a lot of other folks.

Instead of having five people at the top earn a bunch of money, every single person in the business gets a piece of the profit share. And it's usually 8, 9, 10% of after-tax profits every quarter gets distributed. So if I'm making 40, he's 60, you're 80, and you're 120, you take your 120 divided by the four of us, that's the fraction that you own of that profit share. Very simple. That quarter, if the business does well, whether you're a forklift worker, janitorial staff, or whether you're actually fixing the planes, you get a check. If it doesn't

do well, you don't get a check, and you understand why, and we try to go back. So everybody wins, but everybody's tied to it, so that everybody says, "Hey, I'm part of this. I'm part of this team," right? In the Super Bowl you get a ring if you're on the team, right? We just want everybody to get that.

Yeah, and I think change is very hard. Most people will resist change, and our biggest success story is in the aerospace business, and we attribute that to the fact that they were so

tired and frustrated with the firefighting, that's what they call it, where you're just running around. As Edward mentioned earlier, there's so much demand in that business, fortunately, that the business is just coming in, but they literally can't. And they were so tired that they were actually like

They're like, they're begging

begging us, right? Come in and do something, please. And a lot of times people resist change because it's foreign, and we all know how that works, but here they embraced

it. And it was magical to watch.

Great culture. We pray before our meetings. We pray for each other. It's a really neat culture, this business.

Yeah. You brought up Danaher. It seems like everybody tries to do that. What made y'all successful in implementing that versus so many companies that failed?

Simplicity.

Well, it was simplicity. Yes, but it was meeting, very fortuitously, no design of ours, we met Larry Culp. He was

one of the CEOs of Danaher for 15 years.

CEO of GE now.

Yeah, he runs GE Aerospace now. So the market cap of Danaher under his tenure was 3 billion when he started and 30 when he left. But he did a tremendous amount of work in taking the Danaher business system, the Japanese, it was mostly all about process. Process is very important. I think Larry's biggest contribution was really

taking that and marrying it to what we would call American business strategy. They call it strategy deployment. So it was taking this toolbox that was the Toyota Production System and then making it more strategic, and creating the DBS out of that. And when we met Larry and he talked, we asked the question, why don't more private equity firms do this? He didn't have a

great answer. I think we know the answer, and the answer is that this is really hard to do. This change happens, we gave you an example where we got an immediate impact, but for the most part it's small gains incrementally over a long period of time. And private equity's in a hurry, for the most part. A five-year cycle is relatively quick in the lifespan of a company. That's

not a long time. And honestly, to do a transformation like we're talking about is a 10-year project. You have to think in decades. Mr. Culp would tell you that.

Didn't fit the model.

It doesn't fit the

In seven years, you hit it in six years. You're starting to get gains.

Yeah. You're giving away all of your investment to the buyer. You're not owning it long enough to really reap the gains of it. So we think that's the why behind why. But Danaher

is very much like a private equity model in a public market vehicle. And they've done over 600 acquisitions, integrated them repeatedly, successfully, and generated these very predictable results. And it comes from process improvement and systemization. And so what we learned there, for me at least, I'll speak for myself, was I was completely underestimating the power of process and continuous improvement. It seems like process, when you start

talking about it, people think about it as being kind of bureaucratic. But it's the opposite of that. The bigger you get, process is speed. Process allows you to scale. Without it, you can't. And so, anyway, that's a little bit of a digression. He was so successful at Danaher, he was retired when we met him, and he was very influential in encouraging us to do what we did with Coltala. And we were trying to get him to come in as an investor and come on our board. And we do have Danaher people as investors

and more or less on our advisory board, but not Mr. Culp, because he got recruited to go to GE, first to their board for a year and then as CEO. If you followed that story at all, you know what's happened there. It's been a miraculous turnaround.

And he's been in big, I mean, these are bigger companies, for us to implement it in the lower middle market.

Yeah.

You've got to keep it simple. You've got to say, "What are your three problems?" And you say, "Okay, your problem is lead times. Value stream mapping. Okay, your problem is sales. Let's build a sales team.

Let's do sales funnel management. Let's look at probability weighted sales. Let's make sure we develop a function where you can look at the lifetime value of a customer instead of doing one transaction. Do a transaction for 15 years with the same customer." Basic blocking and tackling like that. And so what we've done, we've actually built it into the cloud through AI. Each one of our businesses is on a different level of their CES journey, their lean journey, right? And some are doing sales things, some are building out the team, some are doing more ops work. But we take our

book of tools, and instead of saying, "Here is what you will do, Moses from the mountaintop," we say, "What are your idiosyncratic, what are your three problems? Let's look at which tool might best fit to help you solve that problem."

It's like what you said.

Driven by the operator, by the people on the ground.

If you have a hammer, not everything is a nail. So it's whatever, what's the problem? And then we have a toolbox and you can pull the tool out. In aerospace, that particular problem required a value stream map and some other things, but it was very bespoke to their problem,

which was critical to that business because the bottleneck was restricting cash flow and other things. I'm just telling you, this is an example, they did not know how to solve it. They had a great business with a forecast, but without the capability. And that's our single largest, I would say, success story, because it's so tangible and measurable. We have a chart, we looked at it yesterday. Turn times, I think we're 32 days.

Yep.

And they were 164,

I'm going to say, in April of 2025. And then at our home health business, we had, I think, four or five really talented salespeople, and now we have 220. But to do that, it took a lot of intention on what does a sales force look like? What is the ideal candidate? What does their culture index survey profile look like? What is the compensation model? Where do you focus? And so a lot of these things, as you go from a very small business, when we met David and Trina, they were a small

business getting started. He had started off on three credit cards, and now he's at three, 400 million dollars of top line, in nine states, right? And so it's beautiful to see somebody grow like that and go from a couple people to hundreds or thousands of people.

Yeah. And I don't know what you call it, but I'm just going to use simple conversation. I believe y'all are more, because you referred to how typical private equity, venture capital, they buy it and they're out in three to five

years because they want the exit. Y'all are more of a buy and hold for the long haul. Did DBS influence that, or was it that that influenced getting DBS?

Two things. One, I would say very specifically, we were having these conversations for three or four years before we started at Coltala.

Very different businesses.

When I got in in the late '90s, you could find opportunities, and I'll just

say it, use the word cheap. You could buy them appropriately.

Right?

Fast forward to 2014, '15, '16, the market got a lot more efficient, a lot more crowded. I mean, you all know this. The representation that even small companies get today is substantially higher than

it was back in the era when I started. And so it's really hard to find a good opportunity. And if you sell it, you've got to replace it. And it's gotten really hard to do. So to your question, Ryan, I'm going before Coltala. I'll just speak candidly, but there were many situations where we would say, "We need to sell this company before

something bad happens." And what I mean by that is, because we couldn't see into our businesses. We didn't have transparency. We couldn't see everything we needed to see. And there could be a boogaboo in there, especially in a healthcare business. And so you just say, "Everything's working. The market's good. We should." We didn't have the confidence to hold long-term. That's the question that you're asking. Now I would

argue we have the confidence to know so much about our business and still be able to see through it and be able to see the risk. And if you can see risk, you can mitigate it. Just because you can't see risk in a business doesn't mean it's not there. You know what I'm saying? It's there. You can't see it. That's the scary kind of risk. So anyway, we have a level of transparency in our businesses.

Which gives you the confidence to hold a long time. And the first thing we do is stabilize and defend the core.

And then once we have that, you've got the first person, you've got the core five, six people built, you build out the management systems, then you can have confidence. Okay, we're going to hit this month, we're going to hit the next month, versus we hope sales come in, we hope it goes well. So building value for the long term is just where we're focused, and it allows us to hold a little bit longer. But also, a lot of people, to Lane's point, have to get out. And we don't have a fund model, so we don't have to sell in year seven to go raise another fund. So we're never

opportunistically selling a business because we have to, if that makes sense.

So it's just aligned with the operator and the people in the businesses too.

I want to acknowledge that that's the first time I've ever heard, like, historically companies just selling assets because of fear of what's going to happen. Obviously people selling because they have to, they want to make money, the market's right, that all makes sense. But just like, hey, times have been good,

something bad's going to happen, let's get out. I've never heard that thought process before.

Well, but you know,

Growth makes complexity, complexity kills growth.

No one wants to admit that, but it's almost, maybe not a lack of fear, but a lack of confidence.

Yeah.

And when you're sitting there and you have a big gain on paper, it's hard to not want to take that gain. However, like I said, that's fine if you can turn around the next day. And if you can't replace that asset with something that's just as good,

then you traded down.

Right.

And I'm telling you, it's gotten a lot harder to do.

Yeah.

I think everybody acknowledges that. It's gotten a lot harder to do. If you've got a grade A asset, I'm going to say, honestly, I'm going to replace that with something just as good next week. Well, maybe. It may take you two years, three, to find something just as good.

Well, is that what tells, and I promise Lane I'll let you talk, the phone call I had with Edward a couple days ago

where he's like, "Ryan, if you have access to businesses that are looking to exit or take on whatever, that is the golden ticket. Everybody can raise money, everybody has money. Money's not the issue, access to capital is not the issue. It's deal flow. So if you have that, you write your own check."

Mhm.

So to that end, I'm just kidding. Call the audience.

Well, and I would say something else. I would say it's like

everything in the world today is becoming more specialized. So the other thing that we haven't talked about that I think we both share is this idea of going deeper and broader in a segment. Because knowledge about a particular industry segment, and a network inside of that segment, gives you a completely different ability to respond to opportunity than being a generalist. And growing

up in this business, I was always a generalist. Now we're working diligently to become knowledgeable at a much deeper level by not doing so many deals, focusing on a smaller number.

Yeah, it's hard to get into aerospace. That's a network. Healthcare is another one that's hard to get into.

So earlier you brought up HVAC, healthcare, blue collar type businesses,

but then also the aerospace. So is the niche that y'all are wanting to be in more aerospace related businesses, defense tech businesses, blue collar businesses, or is it the niche that lends the work that

I'd say it's the essential service niche. But if you look at it, it's air, land, and water right now, right? If you think about it, those three businesses that you just spoke to. In the air we've got aerospace, so we're protecting people there. We like that business a lot. There's tons of barriers to entry.

We're an MRO. It used to take you three months and about 500 bucks to start an MRO. Now it's about $1.2 million capital outlay and about three years. There aren't a lot of people starting these things, right? And so we feel like that's good. There's also supply and demand about it. We like that space. You have to have certain clearances to do certain work on certain airframes. You have to have certain competencies. So it's a technical side of work, right? In our engineering business, Pond

Robinson, the exact same thing. We're working in data centers. All of our guys are either architects, engineers, or both. JP Morgan is one of our clients. We've got some of the largest blue chip clients, and we're one of the top firms in the country. And when we called them when we were looking to acquire it, they said Pond Robinson is the best quality shop in the country. It's the Goldman. It's the McKinsey. It's the Apple, right? And so that business, very hard to break into that. We have engineers. So we have really technical people in all of our businesses. If you look at all of our businesses, it's a technical

workforce. It's either a craftsman or a tech expert. And so a lot of very detailed work is going on versus a lot of other businesses. So in our water business, we have roughnecks. We have drillers. We drill very complicated wells, and we have to get them out. There are short formations. There's subsidence within aquifers. We mentioned earlier that 60% of water in a lot of San Antonio, Houston, Austin comes from underground water. You don't want to have subsidence. You have to manage those aquifers very

well. People can die on these rigs. They can catch fire. All sorts of things can happen. Once again, a very technical workforce. So we like being with a technical workforce that takes pride in their work. And that's kind of where we like to be. In home health, it's nurses, LVNs, physical therapists, right? So that's the area we want to stay in, that kind of technical workforce that take pride in what they do, and then recruit the best and pay them a little bit more than our competitors.

You have to be better to prosper in a regulated

industry. And

It's all quality.

a bit of a barrier.

Yeah.

And it is definitely a barrier in aerospace. It's definitely a barrier in healthcare. And it's a barrier in all four of those businesses, but I would say those are two really good examples. You've got to have licenses. The FAA comes in and inspects us. United will show up and inspect us. They'll do audits.

Southwest will show up. American Airlines. Gulfstream. On site. So you've got to be on your game. You've not just got to run a good business, but you have to run a good technical side of your business. You've got to have good safety. You've got to have good compliance. You've got to have good regulatory. And so that makes it harder for people to compete.

But if you like transparency and quality, being in those businesses feels safe, because you're good at what you do. If you're winging

it and you're just over-leveraging things and trying to get to a sale, you could blow up. And we've had a lot of businesses do that around these more regulated businesses. So we do like them.

Yeah, I just want to back up to the process of acquiring businesses. And I'm kind of curious, because you're kind of the anti-PE, right? There are a lot of things

We really kind of are.

you do that are very different in a way that, from my perspective at least, to the seller would be positively differentiated.

And so I have some questions around that. I'm curious about the chicken and the egg here. You have a thesis. You identify businesses that you think are a fit, so you can sort and screen and figure out which businesses are in this space, they're in this size. And then you're doing outreach directly to those businesses to establish a dialogue.

Always.

Not always. I can tell you, our marketing framework is a little different than your traditional private equity. We're not cold calling in New York. We have over 30,000

newsletter subscribers to the Coltala Report.

Wow.

We have 8,000 followers or so on LinkedIn, which at one time, outside of Texas Pacific Group and some others, was one of the largest followings of any private equity firm in the state.

Yeah.

Right? And so what we've created is, we have a relationship funnel where Ralph and I build deep relationships. He has 50, I have 50. We build deep relationships with about 50 people.

This is one of them over here.

Right? But we source our businesses through deep relationships. We have the marketing engine

and the relationship engine. So the marketing engine is, we're always relevant. We send the newsletter out so our team sees what we're doing, so we see what they're doing, to educate them, to educate the market and our thousands of employees, plus 30,000 people who follow us, right? On top of that, we get to know people at a deep level, so that when they say, "Hey, I've known Edward or Ralph for 15 years. I'm about to sell." We get a lot of inbound calls. We get inbound through LinkedIn, it's been 10, 15 just so far this year, just saying, "Hey,

we don't like private equity. We like what you stand for. We believe it's true. We would like to have a dialogue and maybe sell to you."

How wonderful.

And so that has been what we've intentionally tried to build. But there's a book called Building a StoryBrand, if you've ever read it. And it talks about how some of the top movies were made in LA, and it also tells you about politics and about building a brand. Your brand is not about you. Coltala is not about Ralph and me. Coltala is about the heroes that run our businesses on a daily basis. They are the heroes. We are

the support staff. They are Luke Skywalker and we are Yoda. And when we go in with that and we say, "Hey, listen, I've been to war and back," right?

Right.

I'm a foxhole guy. If you want somebody at 2:00 a.m. when something's happening at your company, you can call me and I'll help you, then I'm your partner. If you want a guy from New York who has a Harvard MBA who's going to tell you how great they are, then you can maybe go work with them. They might have more money than we do. They might have more expertise. But if you want a real partner, we're your guys. And that has worked for a lot of folks that don't want to deal with the traditional

private equity model. So you have private equity, you have a family office, you have your big, what I call, strategics, and you have groups like ours. And so we stand out in that regard, and I think most of our sellers were looking for something a little different, and that's why

And are they staying on? Are they doing an equity rollover and staying on in an operational role?

Most all of our sellers are staying on in an operational role. In some cases they become the long-term guy, like a David Jackson at Choice.

Yeah.

I'm convinced he'll run a multi-billion dollar business one day and it'll be called Choice still.

Right? He's on that pathway. He's great. Others wanted to retire, wanted to hand it off, but really care about their business. We still speak with Alan Pond a lot from Pond Robinson. His name is on the business. He deeply cares and he helps us with strategy and we get to lunch with him often. So there's always an ongoing role and involvement from the founders, whether they stay on or not.

I was just going to say, the perception, the bad press that PE has had the last couple years, where they're coming in

and it reminds me of the movie Pretty Woman where,

Oh.

not the Pretty Woman aspect, but the business scenes of it, where they come in, strip it, and then they destroy the company. But it seems now, whether it be social media or just the 24-hour network, and I know I'm dumbing everything down, it's not always PE's fault, but Toys "R" Us, did they fail or was it the PE firm that came in? Red Lobster, did they fail or was it the PE firm that stripped away the

real estate? So there's so many examples of PE coming in, stripping it bare, making all the money, and throwing it away to the trash.

I think for us, that's a great point, right? Assuming that it fits within our mission, our box, then it's really, what is your market opportunity and what problem are you trying to solve? And we kind of turn the table and start interviewing

the team. Because if we start talking about Coltala Enterprises, the conversation we're having today, and they're kind of pushing away from the table, then that's not something that you can fix. You have two kinds of mindsets, and we all have a little bit of both. A knower and a learner.

Yeah.

And it's like, are you 50% knower and 50% learner, or are you 80/20, one or the other? And if you're 80 knower and 20 learner,

that's not a good fit for our model, because we're learning every day and we'll be the first two. We always have more to

The more we learn, the less we realize we know.

Yeah. But especially today, when you're running a business, the world is changing so rapidly that you can quickly become irrelevant, quickly, if you're not working diligently every day just to stay even with what's happening in the world. So a learner

mindset's key, right, among our teams. And I'll tell you that you can tell pretty quickly if they don't have a learner mindset.

From a practical standpoint, if you get into a business and they're not in a competitive process, they're not being represented and they're out in the market, then I guess you would have the opportunity to have that dialogue and to talk to people and to evaluate it. We run competitive processes, and so it's a very compressed time period, and

maybe that's one of the reasons that you favor

None of our

an opportunity to get there directly. So I'm kind of wondering

that chicken and egg is

Yeah.

you've got to figure out whether or not there's a cultural fit, whether you think these are folks that you can put into your model. You've got to assess whether or not the process that you guys run, these proprietary processes, are applicable to that particular business.

What motivates the seller?

Right. If the seller wants top dollar, it's not for us. If the seller cares about his people, his legacy,

and wants somebody to continue that legacy, and he or she wants to have a word in it, then that's different.

And what we see, Ralph, I mentioned it earlier, like people leaning forward or leaning back,

Yeah.

there's a humility with the people that we've worked with that's very refreshing. There's a humility of, I don't know it all. I've gotten to this point, and I'd like to go even further, and need some help. And once you can admit that, and like Ralph, and like we all at some point need some help. There is no self-made millionaire or billionaire in this country. They

had a tax system. They had roads to drive on. They had a bank that gave them a loan that you can't get in a lot of countries. And so having that humility from founders to say, "Hey, I am a badass at selling stuff, or I'm an amazing home health guy, or you know what, I can fix planes like nobody's business, or we have the best quality service in the United States at this, but we can't grow because we don't know how to sell stuff, or we don't know how to build that team." Once we see the humility of, I need help in these few areas, then

we can say, "Okay, let's help bring you tools." But if we're having to go in and say, "We have these things for you to do," and it's kind of Moses from the mountain, it ain't going to work.

This stuff didn't come from us. I want to say that. We're not, as Edward actually said, we're not Moses from the mountaintop. This is a toolbox. It's been proven out over thousands of companies by the best companies in the world, like a Danaher, like the old GE and now GE Aerospace, like Boeing. They use all these tools.

These small to mid-size companies don't even know they exist. So it's really that simple, but it's that complicated. It's like resourcing our teams. But first, you have to have the market opportunity. You have to have a team that wants to lean in and recognizes that. Edward said it earlier, but once you understand this, it does change your thinking. But growth in a business

by its very nature creates complexity in the business. And that very complexity kills future growth unless you break it down. And so the toolbox is what you use, and what large companies use, to continually break the complexity back down.

Simplify back down.

So they can keep growing. And that's the secret sauce. And so how do you do that? We do it through process improvement. Well, it depends on what processes you're trying to improve, what tools you're going to use. But at its simplest

foundation, that's what we're doing. But it's not our tools. We have learned and brought these resources.

Implement them very well.

If you don't have the right culture approach, nobody will accept your tools.

So from the interview process,

that's the key.

one thing that Lane always brings up in the M&A world is the seller sometimes

at the very final will just not sign the paper because

like, I changed my mind. So how much vetting, what's that process like, to go through the psychology of the operator to see if it's a good fit?

It's hard. It's a great question. At the end of the day it's a transaction, and deals can be, no two are the same and they're all the same. But I would say you can see a lot about an operator and a leader by looking at their people. It's like

looking at somebody's family, right? How's the relationship with the wife? How are the kids doing, right? Are they estranged? And so if we look at David Jackson, his people will go to war for David Jackson because they know he's going in first. And he's going to take the risk first and he's going to own it, because he's humble. We call it servant leadership, right? If you look at our aerospace business, it's the same thing. The guys running that business, they're the first guys in the shop and the last to leave. They deeply care about

it, and they'll go to war for their people. They will take money from their own pockets and give it to their people when times are tough. So when you can look at someone's culture and say these people really, we ask line workers and people on the floor, one of the first things we do is find out, hey, what do you think about the leadership? And they're like, yeah, these guys are great. Right? That's when we know we have the right person. But I cannot emphasize culture more, because if you start with the people and they know that they're first, and we

try to get the right compensation plans and the right health care. Those things are very important to us. We mentioned profit share earlier. If the people are winning, then long-term they're going to want to commit. But if you're running it on a spreadsheet and that's all you've got, and that's all that the seller cares about or the founder cares about, then that's not a good fit for us.

People have different definitions of what culture is, and one of the definitions that I like, because I think it's very practical, is culture is what people do when nobody's looking. And that's

what everyone's talking about. So when you've got people that are there for the right reasons and care about the business and care about each other and have each other's back, that's a risk mitigator.

Yeah. Character. We have a saying, we run from crazy, and we've seen it. I know you've had Ken Hersh here, but we know Ken really well and we've seen it. He has a saying: yellow lights don't turn green.

That's true. I like that.

One of our favorites. And we see somebody that's a little bit crazy, or frankly just selfish

or throwing all their people under the bus, and we're like, huh, probably going to throw us under the bus too.

I should use that with

The light might not turn green.

I should use that with some of the searcher community. In the lower middle market you get a mix of institutional buyers and searchers and sponsors, and you guys are kind of a unique blend of

Yeah.

And I've seen searchers that are two years into their process and the lights are all yellow and they're running them because

they're so eager to get a deal done and they drop their discipline. So I like that. I'm going to use that.

It's like square peg, round hole.

Yeah.

That's the yellow light.

Yeah, they're trying to force it. I'm curious about how your personal background informs how you work. I don't know that I've met anybody who served in the Peace Corps and was a naval intelligence officer.

Yeah.

At least the second naval intelligence officer on The Deal Table podcast.

Victor.

Yeah, Victor Vescovo.

was the first.

Yeah, he's old school.

Yeah, and I would say that in the dialogue with him, his training as a naval intelligence officer helped inform how he tears apart businesses and how he looks at things.

Yeah.

You have an interesting blend with Peace Corps and naval intelligence. How does that help you in business?

Well, I'd just say our people-centric approach. When I went to the Peace Corps, I landed in a small town called Los Blancos, and I had a backpack. And they said, "Drink coffee, and figure out something

to do." And I had two and a half years to do it, right? And I found out my first assignment, they were corrupt, and so I kind of bailed out. And so I did a poll of everybody, and I asked them questions, Socratic method once again. Drank coffee, developed relationships. And I found out that their coffee, they were getting charged astronomically large prices for the coffee that grows 40 years under shade, so it's the best thing they can grow. They're growing yucca and stuff like that and corn on inclines that we could hardly climb up. And once

you cut it down, it would expose the soil, and it was gone. So Haiti's all desert because of nomadic farming.

Mhm.

So the only way to preserve the actual watershed was through coffee. And so I said, "Hey guys, I don't know much. I read three books on coffee at the Peace Corps library."

Yeah.

But if you do this, I think it'll work, right? And they trusted me enough because I'd been with them, right? And so that's kind of our people-focused approach. And then as an intelligence officer, the idea is getting to the ground truth as fast as you can. So we had an issue with one of our businesses yesterday. We do what's called an A3

problem-solving form. And the whole idea is find a problem, see what the root cause is of the problem. Once you find the root cause, come up with a mitigation and fix it forever. And if you look at Elon Musk, that's what he does in all his companies. He goes, "What's the biggest problem? This one?" And they spend a week and they go solve it, and then he moves on to the next problem. And so, finding the people on the ground that really know the work. The work is done on the ground, and we have a saying, you don't have a right to an opinion until you've seen the work. And so instead of us coming up with solutions, we have them find the problem, and we help them

be the solution. So whether it's Peace Corps or the military, it's that human element of understanding them and asking them the questions, and then helping them find the right answers.

So, New Orleans. I like to tell this quick story. I read a book on Andrew Jackson.

Yeah.

So Andrew Jackson gets appointed by the president. They want him to go down and defend New Orleans.

Mhm. Yeah.

He shows up in New Orleans and he gets his aides, and he's at, I forget what the place was.

Jackson Square.

It's their building there that became Jackson Square.

So this is after we've been through all of this training and we've learned lean, and it's called, you're not entitled to an opinion unless you've been to the gemba. In other words, you don't sit in a conference room and, like Moses from the mountaintop, you're the smartest person. You go to where the work gets done and you see for yourself. So what does Andrew Jackson do? They bring him all these maps, where they're trying to figure out where the British are most likely to come in.

Yeah.

Are they going to come from the east? Are they going to come from the west? Are they going to come right up the middle? And they're trying to figure it out, because they have limited resources and they've got to defend the flanks. So where are they going to put their resources?

Naval.

So Andrew Jackson said, "I see the maps. Take me. I must see. I've got to see." So Andrew Jackson went to see each of the three most likely places where the British would come in, because he knew he would form a different opinion if he could actually see it. And I'm reading this and I'm going, he went to the gemba. Where the work gets done. And he went before he was going to form an opinion. But just think about that.

So this stuff is not new. In fact, Larry Culp has a saying, it's applied common sense.

Yeah.

It's common sense applied

Applied vigorously.

Yeah. It's common sense applied vigorously. So it really is. But you look at Andrew Jackson, 18-whatever. When was it? 18

It was 1812. Close to 1812.

So there you go.

And to put a point on that,

By the way, they won the Battle of New Orleans and they defeated the British. Part of that was

probably attributable to the fact that he was wise enough to know that he wasn't going to just rely on what the aides were telling him. He, the general, wanted to go see the gemba. So anyway, I think that's fascinating.

He was from Tennessee, where you're from.

Yes.

And when he gave that famous speech in what today is Jackson Square, it was to a half Spanish, half French audience who didn't understand half of what he was saying, thought he was a hick, and didn't consider themselves American.

Oh, wow.

And so he enlisted a guy named Jean Lafitte, who was a French swamp pirate, the local, on-the-ground guy, and said, "Hey, you want to join us? Because if not, you're going

to lose Grand Isle." The pirates joined him.

Yeah.

And it was a pirate and a future president of the United States who beat the crap out of the

That's fascinating.

greatest naval force that had ever existed on the earth.

And Lafitte's blacksmith shop, I think, is the only thing in the French Quarter that survived the fires, because they had a bucket brigade uniquely and specifically for it. It's one of the only French Creole cottages that still exists, because the rest is all wrought iron Spanish after they burned out all the French Creole stuff.

There's a great story.

It's a bar, if you haven't been.

I love that story, and I love going out into the field and figuring something out. It reminds me of one of my favorite movies and books, which is Seabiscuit, if you know the story of Seabiscuit. They ended up racing against the East Coast established horse, War Admiral. And it was a much faster, stronger, bigger horse. It was kind of a joke that they were even going to race Seabiscuit. I don't know if you remember the story, but the East Coast owner established the rules, and

the rule was that they were going to start with a bell. Not inside the gates, but a bell. And so he went to the track and he trained Seabiscuit on how to get to the inside with the bell. And then the night before, like 2:00 in the morning, he goes out and he walks the track.

Yeah.

And it had rained, and it was dry right by the rail, but it was wet outside. And so he thought, if we can beat him to the inside

and make him run outside, and they did.

He'd get bogged down. Yeah, just like the British.

So, showing up at 2:00 in the morning and walking the track, a lot to be said for that level of work.

As a Southerner, there's a book called The Fish That Ate the Whale that I highly suggest you read. But the word Banana Republic came out of a guy. Yeah, you know that, don't you?

I recommended it and gave it away. We talked about it. This is how we became friends. This is one of the greatest American stories ever told. We met at an event

with Senator Parker, and I'm friends with Senator Parker and so is Edward, and Senator Parker is like, "Edward, Ryan, y'all should meet. I like both of y'all. Y'all should like each other." And then I think five seconds in I was talking about this book. He's like, "I'm from there."

So there was a Russian Jewish immigrant, and he was a fruit jobber who got bananas and was selling them in New Orleans. And he realized that they were throwing away the yellow ones, because this was before, once it got ripe there wasn't anywhere to go

with it. And so he developed a train route with a box car and started selling them up and down the South, right? He ended up making enough money to where he was like, hey, I'm going to start my own company. Then he went down to Honduras and bought some land and realized that he could 4X the yield by just basic irrigation techniques. So then his business gets big enough to compete with United Fruit Company. So the president of Honduras is not really abiding by what he wants at the time. And JP Morgan, all these people know he's going to do it. And so he gets a guy that looks kind of indigenous and he says, you should be president.

And he sends a group of boats down there and he takes over Honduras, installs a president, and the president says, this company will no longer pay taxes.

Oh.

Banana Republic was formed, right? He and United Fruit, Jeffersonian Harvard descendants, they start fighting with him and they call it the Banana Wars. But they're literally proxy battles in Guatemala, these different countries. That's how Che Guevara was hardened and moved to Cuba to take over Cuba and the Batista regime. So, fast forward,

they forced them to merge because there's so much bloodshed between the two companies. And he ends up owning something like 30% or $30 million of the company. They start not doing well, and this guy, his house is where the president of Tulane lives. That's where his house is. He's one of the richest people in the world by now. And so United Fruit Company, these guys, they invite him up and they're taking the company down. It's not going well. He goes, "Hey guys, you need to change. I know what to do." And they laugh at him. They say, "Thanks, no thanks." Four weeks later, he comes up and he says, "Hey guys, I think you

need to do this." And they're like, "Huh, we can't really understand what you're saying." And he says, "Understand this." And he drops a bag of proxy votes and goes, "You're all fired. I own this company now."

Wow.

And he built it back. I believe he was 71 at the time.

Yeah.

Anyway, fast forward, I was a Jones Scholar for Public Service and a Stone Scholar for Latin American Studies, and I did a master's at Tulane. And it was a very liberal program and I always wondered, who funded this? He did.

Wow.

So the banana king, the economic guy, funded this program

for years and years at Tulane.

It's a great story.

Another aspect of this gentleman: his son. Was it World War I or World War II that he passed away?

I think II.

II, because I think he was a pilot. So his legacy is gone, other than his wealth. So then after World War II an Israeli statesman says, "Hey, we need your help." He's like, "Well, what do you need?" And they said, "Everything."

Playbook.

What's not known, because he didn't want to be in the press, is that after World War II it's not like the immigration laws were lifted. Jews were still being killed. They were still being persecuted and they couldn't escape. So he used his boats

to sneak them into Israel.

So he was the first exodus out of Europe post World War II to get to Israel.

Pretty interesting. Yeah. Underground railroad for Jews.

Yeah.

Well, which brings us to

Which brings us to

Yeah. So, coming to the end, we've talked about a lot of books, which is great, but because I'm trying to be better at it, what would you recommend? Ralph, from a book standpoint, what should somebody read?

Well, I'll tell you real quick, we both had the opportunity recently to go do some work one-on-one with Jim Collins. He's just come out with his latest book,

What to Make of a Life. It was released in April. And he spent the last 12 years researching this, very much like he did companies, matched pairs, but with people. And so one of the things that he has learned through all of his research, across all of his books and then specifically this one, was something that we both appreciate. It's this idea or concept that we all

have a genetic encoding, which is what we're trying to measure with our psychometric testing. What do we have proclivities to do? What are your

What did God give us the gift for? Yeah.

Yeah, and he calls that being in frame. And the importance of knowing what you're doing in life, which is kind of what we're talking about a lot today, is, are you in frame with your genetic encoding or not? So he has these matched pairs

of people that he studied for 12 years. There's about, I think, roughly 40. And then he distills all of this information, and what he shows is that people go through periods where, John Glenn the astronaut was one, where he went through a 10-year period where he was out of frame. In frame he was incredibly brilliant as an astronaut. Out of frame as an executive

at this business, and then back in frame as a senator. The way to know if you're in or out of frame is very interesting, and one of the most interesting things that came from it is that one of those people that he studied was Benjamin Franklin.

Yeah.

And Ben Franklin, if you read an autobiography of Ben Franklin, almost 60% of what's written about Ben Franklin took place after his

60th birthday, which gives hope for people like me.

In a time when people didn't live that long.

There's still hope that I can do things as we get older, which a lot of people start sunsetting, and he says no, no, and he gives multiple examples

Right.

of people he studied who did some of their most prolific work after the age of 60. Which actually, if you think about it, makes sense, because you've had all the life experience, we've accumulated all this knowledge and learning. And so it's also a motivation

to do our best, which I think Edward's a great example of. Eat well, try to stay healthy, exercise, so that when you turn 60 you've got runway in front of you, because you're finally equipped to actually do something important. You're qualified. You have something to give back to the world. Don't squander those years. So I'd highly recommend that book.

Nice. Edward?

I do think the Banana King is an amazing underdog, messy, great American success story,

and I think that's an incredible book for us as Americans to read, because it's not always easy and there are a lot of twists and turns. But what I'm reading now, I'm a jiu-jitsu guy and I've just fallen in love with it, and Gracie wrote a book called The 32 Principles, and it really is fascinating. There are just a lot of principles that go with martial arts, which a lot of people have learned, that apply to life and business. And one of the ones that I take the most out of is don't white knuckle everything. Your grips are important in jiu-jitsu, your holds. If you grab something

too tight and you white knuckle life, they say in jiu-jitsu, if you grip it too tight, eventually your grip's going to break. Right? This is a marathon, not a sprint. Relax. Look at the problem. Don't freak out. Don't try to control everything, and surrender a little bit. In my personal faith, I think surrender is one of the hardest things for hot-blooded American males like us in this room to do. And it's been hard for me to do. And so the ability to surrender and have a gentle grip. Jiu-jitsu means the gentle

art. It's about taking somebody down, redirecting force, not using brute force. And so as we look at business or life, it's like, hey, let's use this force. Let's not grip it so tight. Having had two commanders, one who had a gentle grip and was very talented, and one who had a tight grip and is not living with us anymore, seeing that real time was very impactful for me. So that book, I think, is a very neat book to read.

Well, that's a good theme coming out of this discussion. Life is a marathon,

not a sprint. And one of the quotes that I like to repeat is, most people overestimate by a lot what they can accomplish in a year and they underestimate what they can accomplish in 10 years. And that goes back to why we invest in our system, thinking in decades, which is one of the things that came out of Collins' book.

Yeah, the marathon. We're really eight and a half years in. We've got plenty of time.

So yeah, you've got to focus on every day and get every day done, focus

on the top three things every day. But it's that incremental gain over a long period of time. It's the compounding effect that really moves us.

And then can you do two to three sentences on Give and Take, because you just recommended that to me on Monday?

Yeah.

And it speaks to me that I need to read it immediately, but I want to give it a plug.

Give and Take, very interesting book by Adam Grant, and it breaks people into three categories: givers, takers, and matchers. Takers are those who take, take, take. They're selfish, and eventually, if they do real well, when they mess up somebody wants

to bring them down. Matchers are these quid pro quo guys that are always keeping score. You got lunch last time, it's my turn. And then there are actually two types of givers. If you've read The Go-Giver, people say, "Hey, are givers really successful?" And the truth in the economic data is yes, highly successful. Unless you are a giver that is a doormat. Put the mask on yourself first, take care of yourself, and don't let somebody come take over your business or mess up your family. And so it really goes into that, and it shows

that you can be a giver, and I truly believe this, I think that servant leaders and givers can be the most successful in life and have the most successful companies, the most successful families and marriages. So I think it's a really neat book that is a very positive, uplifting book, but also shows that if you don't watch your back and take care of yourself physically and put the mask on yourself first, then you're not the best giver either.

Edward, Ralph, thanks for being here. Lane, final thought?

Great session. Thank you guys. Good to get to know you.

Yeah, appreciate it.

Yeah. A little Memphis, a little TV. Not bad.