2021 Annual Letter

What a year it’s been. My wife, Michelle, was accepted into Creighton University’s physical therapy doctorate program and in June 2021 we moved with our corgi, Cici, from Portland, Oregon to Omaha, Nebraska. Neither of us had ever been to Omaha before, but we have enjoyed the new city immensely and are feeling settled now. No, we have not seen Warren Buffett, but we are three blocks from his building so it’s only a matter of time.

The podcast has continued to grow tremendously. Monthly downloads increased from 5,832 in August 2020 to over 18,000 in October 2021, and we have surpassed 216,000 total all-time downloads:

It’s hard to attribute the podcast’s growth to any one particular action or effort, but I would say consistent weekly publishing has allowed the podcast to grow more effectively through word-of-mouth and on Twitter than when it was monthly. Additionally, our audio quality and guest variety have both continued to increase and I hear from more and more folks in wider circles having heard the podcast. Consistent effort compounded over time is an incredible growth driver.

I also unveiled a new business I’d actually announced in my 2020 letter called The Operator’s Handbook, a quarterly print publication focused on the endless pursuit of better in small company operations. We have just started (Issue 2 is due out soon!), and there are some exciting plans for this new publication in 2022.

Before diving in, I do want to share one thing I’m very proud of this year. I made a much more conscious effort to delegate and attract great people to help me run the podcast and create The Operator’s Handbook. These folks created an amazing product in the Handbook and made our podcast undoubtedly better. I’m proud not only of the work they’ve done, but also the positive impact it has had on their lives and families.

Our Handbook editor, Taylor Cothran, was able to perform work she loves—editing—while being able to stay home with her husband and daughter, who recently turned one. Our web developer, my cousin David Bridgeman who is currently in college, continued building his business on referrals from work he’s done for the podcast and Handbook. Our new podcast editor, Johnny Peterson, was referred to me by Chris Powers who helped him launch his business and now Think Like an Owner gets to be another meaningful building block in his company.

Helping generate a positive impact for my team members, their personal careers, and their families makes me proud to be a small business operator. The mutual cooperation that helps everyone on this team (including myself) is incredibly rewarding to be a part of, and I hope in 2022 we find even more fantastic folks to help us as we continue building the Handbook and growing the podcast.

The Operator’s Handbook

After taking twice as long as I imagined to create and several mailing delays later, The Operator’s Handbook officially went live in September of this year. Thank you to all those who have subscribed and helped create what I hope will become the best publication for small business operations.

There were trials along the way. For instance, on the first day of my honeymoon in Hawaii, our original printer said they couldn’t perform our project. I was literally on the beach when I got the email and had to scramble to find a new printer. All was resolved fairly soon after, but my heart rate was the highest in the resort that day.

The reason for creating The Operator’s Handbook was the same reason I created the podcast. I didn’t find anything out there I myself wanted to listen to or read about running small businesses. I felt the Handbook was a publication that should exist and, given my experience with Think Like an Owner, I believed I was set up well to create it.

I also have to give credit to Tim Ludwig for helping me come up with the idea and take part in multiple brainstorming sessions on format, design, frequency, pricing, features, and so much more. His feedback, and that from so many others, was instrumental in creating the product that exists today.

There are two features I’m very excited to add to The Operator’s Handbook this coming year, some of which will be seen in the second issue.

The first is benchmarking studies from subscriber-only surveys focused on a rotating series of topics such as sales and marketing, hiring and training, financial controls, and software and systems. Each quarter we will send a survey to all subscribers on one of these topics and publish the results (anonymously) in the following issue. We have already collected results from a sales and marketing focused study, the results of which will be included in Issue 2.

The second is a Handbook CEO Confidence Index, to be tracked quarterly, that measures the confidence of small company operators in the performance of their industry and their own company over the following 12 months. The results will be included in our benchmarking studies, and we’ll be adding them to the front cover of each issue. That way the second you take your Handbook out of the mailer, you’ll know exactly how scared or excited you should be for the near future (at least based on the predictions of your fellow operators!).

The Operator

One big change for next year and beyond is combining Think Like an Owner and The Operator’s Handbook into one single media business focused on the endless pursuit of better in small company operations. I’m calling it The Operator. Together, these two media properties can feed and build off each other in a way not possible when separated.

We’ll have a new website out shortly with a slight branding change to be more in line with The Operator’s Handbook. I think this will be a very exciting business to build over the coming years and I’m looking forward to the benefit of focus this will bring to my daily life.

Experiments

2021 was both a year of growth and of experimentation. I’m always on the hunt for ideas and ways to improve the podcast and publication, and experiments are a meaningful part of improvement.

First, we tested out two new podcast episode formats. One was issue-specific episodes with operators trying to solve a single problem in their company. The issue-specific episodes were conducted with Jason Hill (Benefits to Making Food a Stronger Benefit at Work – Episode 60) and Palmer Higgins (Removing Sales Roles at Mainely Grass – Episode 61). I received minimal feedback on both and download numbers were below average. I’m happy I tried the idea, but I do not have plans to make more episodes like this, although I greatly appreciate Jason and Palmer helping me try out a new format!

The second format was a conversation between two operators in similar industries. I tested this format with Palmer Higgins and Austin Hall in an in-depth discussion on the lawn care business (Episode 94). Feedback from listeners has been positive so far and I’ll make an effort to record a few more episodes like this during 2022.

I also experimented with search investing using the podcast as a way to find great operators and searchers, and realized it wasn’t the right path for me. I connected with dozens of searchers but quickly found being a search investor wasn’t as interesting to me as I originally imagined. I enjoy the act of building businesses and, as a search investor, you are removed from the action and typically only receive periodic updates on a business’s progress. Also, I don’t have much of a competitive edge against other prominent search investors who have years of operating and investing experience to draw upon. I’d quite likely be the least helpful search investor in a cap table.

For all these reasons, I decided not to further pursue search investing for the time being. I may pick up the idea later on in some form, but search investing is going on the shelf for now.

While experimenting is very important, it is equally important to add to your winners. While the newsletter has grown nicely, the podcast is the engine driving the bulk of this enterprise. 

This year we increased investment in our show production by bringing on a new editor who can produce higher-quality episodes, better transcripts, improved show notes, short audio clips we can share, and who can give a more professional feel to the podcast. I expect the listener’s experience in 2022 to be the best to date.

Thinking Bigger

There were a few key experiences this year that encouraged me to think bigger about my businesses and life. The most impactful was my trip to Capital Camp in Columbia, Missouri in August 2021 where I met dozens of successful entrepreneurs, owners, and investors, all of whom have had objectively incredible careers. All of them said a version of, “Think bigger in your business; paint a greater vision for what you want to accomplish.” That line has filled my mind for the last few months and it’s led to substantial soul searching.

I’m still working on what my long-term “think bigger” vision is, but I feel I’m narrowing down what it looks like and I’m excited to start working on it more in earnest in 2022.

Thank You and Where I Need Help

Thank you all for coming on this journey with me; it’s been so much fun building this business and meeting so many incredible people along the way. It means the world when you listen to my podcast, read The Operator’s Handbook, recommend either to friends, and reach out for a chat.

I still can’t do this work alone and there is one key way you can help me. Please introduce me to the most fascinating small company owners, operators, and investors you meet. I want to continue interviewing and creating articles with smart and interesting folks for both the podcast and the Handbook, as well as learning from them off mic. Introducing me to a friend of yours that you trust and think I could learn from is one of the highest possible compliments you could give me.

Thank you all, have a great holiday break, and I’ll see you next Tuesday morning wherever you get your podcasts.

Happy operating,

Alex

Thanks to Taylor Cothran, Tim Ludwig, Justin Vogt, Craig Fuller, Chris Powers, Collin Hathaway, Peter Bell, Kelcey Lehrich, Rich Jordan, Mike Botkin, Kaustubh Deo, and Chris Fredericks for reviewing early versions of this letter to fine tuning.