Amir Haboosheh – How CEOs Develop Empathy – Ep.169

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(00:00:00) Intro

(00:03:45) Favorite Warren Buffet Lessons: Reputations

(00:07:28) Being flexible in purchase agreements

(00:09:31) Snowball’s Origin and business strategy

(00:14:52) Home Services companies going Public

(00:16:48) Revenue required to go Public

(00:19:27) How the role of the CEO changes through company growth and Going Public

(00:25:45) The power and importance of Empathy

(00:41:28) Screening for empathy in candidates

(00:44:14) Color Code

(00:49:06) Giving feedback

(00:53:35) Leaning on a board for expertise

(00:57:29) What strongly held belief have you changed your mind on?

(01:00:01) What’s the best business you’ve ever seen?

Alex Bridgeman: I loved our discussion earlier on Berkshire Hathaway books, the Snowball, Making of an American Capitalist, and others. Is there like a favorite takeaway you’ve had from the various Berkshire books that you’ve come across or coming to- or watching the annual meeting or interviews that he’s had, anything stand out as like a core lesson you’ve taken and applied at Snowball?

Amir Haboosheh: One stands out more than anything else, and its reputation. And reputation is something you can build over decades but can pretty much erode in a matter of a day if done wrong. So for us, reputation matters. And as we are building a brand both at Snowball, both at the operating companies that we have, quality of work, how we treat our partners, and our partners are not just the builders, it’s all stakeholders, it’s our vendors. We want to make sure that we have good relationships with them, not just beat them on price. We want to make sure that we’re part of the community that they’re operating under. You have noticed what happened with supply chain issues over the past two years. Having a good relationship with a vendor that it’s always a pleasant working experience and they’re giving you good terms and making sure that you get the equipment and the supplies and materials you need to actually execute on the job. Let’s not worry about half a percent or percent or anything like that. That’s how we approach everything is through the lens of reputation and relationship. Same thing with our investors, with all of our stakeholders, with our employees. We want to make sure that we also are doing right by the owners that sold the businesses to us. They care about their reputation. Some of them still carry their last name on the businesses that were acquired. For example, Andersen, it’s a reputation they built and brand they built over 60 years. We’re now those stewards. So we have to do right by them to continue building on that. So I’d say reputation would be like top of mind. I think I repeated that already like 10 times.

Alex Bridgeman: It’s definitely important. It’s a small world too. You never know where relationships could go from folks that you’re meeting today until 5 or 10 years in the future, what could happen in both of your careers. Where have you seen reputations tarnished? Like, what are some examples of things that you’ve seen in your industries that have rubbed folks the wrong way and tarnished reputations and hurt folks in the long run?

Amir Haboosheh: I would say right now more than anything else is on the acquisition side, how you structure the deal. We try to make it more of a win win so that post acquisition, the way we actually mark a successful acquisition is if a month to three months from now, a seller refers someone else to sell their business, that’s when we indicated a win. It’s almost like when a consumer puts a review on Yelp or Google, it’s after they had the full experience from the first phone call to the installation of the unit and making sure it’s a clean area after they leave. They’re going to- they’re so enthusiastic and they’re so delighted about the experience that they’re going to put a review. That’s how we mark a successful acquisition. And what we’ve seen is nothing wrong- there’s really good private equities or good acquisition partners out there. But some of them go about it in a way of thinking they can pull a fast one or be a little bit more aggressive in how they word an LOI or purchase agreement that a typical contractor maybe didn’t get the right legal team to be able to flesh that out or identify it. That’s stuff that came about and we’ve seen. And that’s not what we do, our standard. But to your point, that’s the closest thing.

Alex Bridgeman: Yeah, when you say not writing contracts or purchase agreements as aggressively as others, is there a particular set of terms, like maybe two or three, that you feel like you’ve tried to be the most flexible on that you see others draw maybe too hard lines on?

Amir Haboosheh: Purchase price comes to mind. A friend of mine, actually he’s our Vice Chairman, is famously saying your price, our terms, or our price, your terms. So you could ask for the price that you anchored in, but it is structured in a way that we can actually deliver on that, whether it’s having milestone payments over years, adjusting the seller notes and having an earn out component. But being flexible in how we go about acquiring or structuring a deal. The first step of it is to find out what exactly the seller motivations are, what is a win for them, and what are they anchored towards, and okay, now what’s a good outcome for them, and let’s backtrack to how we can structure it so that our investment committee and our team feels comfortable with it. And of course, on the other side, making sure that we have the right mix in terms of the equity and debt as well to be able to execute on the acquisition. The other one related to it is making sure that we take care of his employees or key employees. That’s always a big concern for the seller, not just for us. So us having a path to go public, are able to provide stock options and stock grants for key employees. And this way, day one after an acquisition, their equity holders, they have that ownership mentality from day one. And then it makes retention easier post acquisition, and they like seeing that and they feel like that’s a good way to also take care of people that helped them build their business and helped them grow to a point of an exit option for them. So this way, they can position it like hey, I’m taking care of you guys, so they don’t feel like they got blindsided either.

Alex Bridgeman: Yeah, I definitely want to talk about your vision for going public and having an IPO as a public business. But before diving into that, I think it’d be helpful to have a review of what Snowball is. And my understanding that I’ll need your help filling in the gaps and expanding but Snowball raised a pool of capital and is acquiring service businesses and with a vision for being people first and operation focused and with a growth mindset. But I would love to hear the full story of Snowball and what your vision is. And going public, of course, is part of that, but there’s lots of dimensions to the vision that I’d love to hear more about.

Amir Haboosheh: Yeah, absolutely. So back in June, July of 2020, my co-founder and current chairman Devin Sony met up with our other co founder Zager Helgason at a summit in Utah. Actually he was introduced by another friend of ours, Robert Babbage, a great guy, also entrepreneurial. And he is one of Snowball’s- first investor in Snowball as well. But all that being said, he introduced them. They hit it off right away. Xavier called his co founder, partner at Enduring Ventures, Kaczynski, and they then called me and said, hey, you’ve got to meet these guys. And they were planning- were talking about building a holding company and loving the trades and really wanting to elevate the people in it. So within a matter of a few weeks, got on a Zoom call involving a local restaurant here in LA, and during COVID, every restaurant was shut down. So pretty much we’re able to use it as a mastermind office. The team flew down from 10am to 10pm. We spent time together mapping and brainstorming a lot of division of Snowball, including the name and where you alluded at the beginning with Warren Buffett and Berkshire Hathaway, Snowball being a hat to his autobiography. So we’re all very aligned in our core values and wanting to provide- we are motivated by value generation more than anything else. And then within quick order of incepting in September of 2020, we had our two first acquisitions towards the end of the year in December of 2020. And that’s northwest Arkansas, mechanical new construction and service business, and a HVAC business in northwest Arkansas, HVAC plumbing business out of Fairfax, Virginia. And after those two acquisitions, within a matter of nine to ten months closed on a plumbing operation out of Phoenix, Arizona, that’s diamond back. To round up that year, towards the end of the year, we acquired a marketing agency out of Toronto, Canada, mainly for the talent. They’re known for doing really good SEO work. Not a lot of people do good SEO work. These guys are pretty much the top 1%. We wanted the talent within Snowball as one that were servicing our clients, our operating companies. So it was a good way for us to retain that and continue building on that. And we’re seeing that paying dividends quite a bit for us.

Alex Bridgeman: Yeah, these are pretty quick acquisitions, like you mentioned within three months of founding, having two acquisitions. So clearly, the story resonated with a number of owners. When you point to the story you’ve been able to tell through Snowball, what key points stand out most to sellers?

Amir Haboosheh: So the biggest one is always the concern of the next flip. They have people that they pretty much spend significant amount of time with, this legacy and the culture that they built over decades, they’re always concerned, hey, private equity is buying, when is the next flip, when are you going to get your exit, and if you have investors, what’s their liquidity event. For us, we’re able to say with conviction, that when you sell to Snowball, you sell forever, mainly because our investors, they get their liquidity event out of us being public. And we’re able to- so there is no second flip. So we’ll be able to continue providing that legacy and culture that you built, and really amplifying all the positive and strengths in your brand and helping you mitigate some of the stuff that you’ve struggled with just because of capacity and scale. That resonates with them quite a bit. And then the second part of that is having that public vehicle for us, they’re able to retain a portion and rollover a portion of their equity into Snowball mitigating some of the taxes there. And also being able to participate in the group as a whole as it grows over decades. And they decide if they want to pass that on to their kids, benefit from potential dividends from the cash flowing of the operation or just exit at that point at a higher valuation. So that’s something, an option that we absolutely provide for them. So those are the things that resonated right away with sellers. And the third one is really the ability for the customer service reps, the dispatchers, the helpers, the technicians, the leadership team to actually have a piece of the company and to have equity day one for the leadership team. And then as they build, choose to get some of their bonuses or participate in our ESOP and employee stock option program and buy shares in the company directly themselves and really not only having the ownership mentality but having a piece of paper or digital paper saying hey, you own a piece of this company when you’re part of a bigger group.

Alex Bridgeman: Have you seen other similar investors and acquirers of home service businesses go public in a similar way? Like when you’re looking for inspiration or examples of comps of other folks who have done similar things, what do you look for there? Or is it not a  very populated space?

Amir Haboosheh: It’s not. There is a company that is currently public, their ticker is Fix, FIX. And it’s called Comfort Systems. They’re fairly large. They’ve been public for close to a decade or two. Outside of that company, I think there’s one or two that are, they’ve reached their second and third flip. The only other path now is to go public. So the private equity that bought them will probably spin them off into a public entity. Those are ones that I think the timeline is eight to ten years from now because they want to reach a certain point of growth to justify that level of exit or return for them for their own internal investors. It is not common. The path we’re doing is not common. The way we’re doing it is really wanting to build a retail base, and what I mean by retail base is having Mr. and Mrs. Jones own a piece of their local neighborhood plumber before it even goes public. That has not been done. That’s the path of us doing our crowd funding raise to the reg CF, then in a year’s time doing a second larger one with our Reg A filing. With each time we were able to build our base having 1000, 2000 individual investors as part of our group of investors or subscribers. So when we go public, we already have, one, all the qualifications that you would need for being listed. But second, Main Street owns a piece of the local neighborhood HVAC, plumbing, electrical business. That path has not been done.

Alex Bridgeman: Is there a certain point where going public- a certain revenue level where going public becomes either more feasible or possible or sustainable? Like what’s revenue today for Snowball versus where it needs to be to be a public company?

Amir Haboosheh: Revenue today for Snowball last year was actually 34 million that we closed at. This year we’re tracking with no acquisitions 42, with acquisitions, so including the tuck ins that we recently did out of Phoenix, should push that even further. And we have quite a bit of acquisition pipeline. But our target is not so much the revenue. The revenue will fall probably closer to 120 plus. Really what we’re looking for is having 18 to 20 million in EBITDA. Being public is expensive. Going public is expensive. Staying public is also expensive. And we want to- we don’t want to just go public, that’s not our milestone success. We want to make sure that we stay public and we can afford paying everything that comes in that. I think even the signature of an auditor or legal becomes 20, 30% more expensive just because you have a ticker, even though it’s exactly the same work. You need to have compensation committee, audit committee, your board needs to expand. So everything becomes more expensive and roughly could be anywhere from 1.5 million to 2 million in staying public, especially an M&A team or M&A company where every acquisition wears material and needs to get audited as well. So for us, that 18 to 20 million in profitability a year is where we can absolutely absorb that and justify that public world. Because just by being public, all else being equal, you do get about 20 to 30% premium in valuation between private and public. So that’s kind of like where the math evens out a bit. On top of that, we want to show consistent revenue growth both through acquisition and organic, so that public markets love that to see that year over year from the inception, you hit 20 million, 34 million,  42 million and keep growing. That consistent growth plus a good cash flowing operation, that’s exciting for them in an unexciting line of business because everybody loves a startup or AI or some sort of a new trend. Plumbing, HVAC, electrical, it’s not exciting. But the cash flow is and exciting for us. Hopefully investors see it the same way, especially when you add our approach to it, our vision for it and the growth rate.

Alex Bridgeman: How would your time as a CEO change? So if you look at a pie chart of your weekly calendar and the different activities you’re focusing on, what gets bigger and smaller being a public CEO?

Amir Haboosheh: I’m trying not to think about it too much because right now I’m really enjoying spending a lot of time with our leadership teams and our operations and GMs. You do become a bit of a two headed monster when you’re publicly traded. You have your operation side and you have your public side. I probably will spend more time with my CFO than a COO at that point. Right now I’m really enjoying spending time with my COO. He is a partner in everything we do. So that I could see that changing. But yeah, it’s something that I haven’t quite mapped out yet or experienced in order to tell you with conviction, but from my understanding, that’s where it’s headed.

Alex Bridgeman: When you talk with CEOs you know who are running public companies or have run companies before that are public or even just talking with your board, you probably know similar folks too, what strikes you as the most different with how a CEO of a public company spends their time? You mentioned you might spend more time with your CFO than your COO. I’d be curious if there’s other differences you’ve noticed or heard from peers or board or friends of yours on how life changes and how your time changes.

Amir Haboosheh:  You’re managing up a lot more. And you’re talking to your board more, to investors more, to analysts more, telling the story to bring more awareness to your company. That’s your number one job at that point outside of recruiting and retention of key talent at the holding company really becomes- you become the champion of the brand that you are building so that you can get more investors interested, providing more liquidity to your stock, and just keep talking and being on every outlet that is willing to hear your story. So that’s what I hear, like continue providing press releases, continue being out there having quite a bit of a PR IR cadence. You’re the driver of that.

Alex Bridgeman: Yeah, I remember listening to the 50x series with TransDigm and listening to Nick Halley talk about the time he spent as a public company, because he had a period of time where TransDigm was private and then became public. I think he mentioned it was like 20 to 30% of his time was investor relations as a public CEO. So I’ll be curious to continue our conversation as you become public and how that changes. Do you think that that would create an upward pull? You mentioned like you’d be managing upwards more. Would that be an upward pull away from the daily operations of the business? Or is there some other way you can counter some of that pull if that’s happening?

Amir Haboosheh: I think like you said, like reviewing it once a year is going to be definitely fun for us to compare what I say and what I do a year from now. Absolutely there will be a upward pull. One of the things we’re working on is to have a better information flow between the operation and to the holding company, so that it doesn’t rely on just getting on one or more phone calls on a weekly basis. I do enjoy getting calls. I enjoy traveling quite a bit, and spending face time with them and something that we’ll continue to doing to have that close pulse to operation. But to a certain extent, that won’t scale. You can do it with three, four operations. With 30, 40, it’s going to be a bit more difficult. So having certain KPIs to keep track of, good, accurate timely financial reporting with MD&A, which is management discussion and analysis, in a way that we can really capture in a month like what happened. And making sure that that’s implemented in every single operating company would be key here.

Alex Bridgeman: Yeah, on the one on one time, I remember reading about Herb Kelleher and David Neeleman who are both airline founders, and they would ride the planes on a regular basis and talk with passengers and like pass out drinks and get that like one to one feedback. And I’d be curious if there’s something equivalent you could do or a sense for how much of your time and energy should be spent making sure that you’re maintaining those lines of communication.

Amir Haboosheh: That’s a great idea when you’re decentralized because our operations, Snowball itself, is a holding company. I’m in LA. My CEO is in Vegas. Our chairman is in Vegas. Our director of FPNA is in Alexandria, Virginia. And then our board is between Maryland and San Francisco. So we’re spread out and the companies itself, as I mentioned, all over the state and we’re going to continue seeing that. We have deals out in Seattle that we’re interested in, in Miami that we’re interested in, so we can see that we’re going to continue being coast to coast. Having a way for us to check quality that really comes down to the GMs running when they can do secret shopper type of calls to their operation and report back to us. Definitely something we thought about. Checking reviews, the good and the bad, how they handled the bad. I learn a lot more from mistakes than I do from anything positive. That came from my grandfather and uncle. But I famously remember them always talking, just telling me the bad- the good will take care of itself. At least with the bad, I can actually do something about it. So I like knowing the bad so I can actually do something about it. But it’s always good to hear the good just so you know you’re on the right track too. But all that being said, that will fall. We very much so like to empower and give autonomy and trust and verify to a certain extent with our leadership team with each one of our op cos, operate companies, that quality definitely will be fun for us to experience. One of the things that my COO likes to do is surprise visits. Like he just won’t tell anyone and just fly out there, and just show up. I like to give him a heads up and mine is more casual, his is more making sure that everything is on the up and up.

Alex Bridgeman: You mentioned your family. I love that quote around tell me the bad because the good will figure itself out. What other lessons have you pulled from your family or has your family instilled in you growing up that you take into work?

Amir Haboosheh: Leading with kindness and empathy. That’s something that I embody quite a bit and I talk through with my team, being empathetic. Being firm because there’s a balance between sympathy and empathy. But hearing them out, but also encouraging them to take chances and encouraging them to work through the difficult conversations that they have to do. Very often, we’re coaches of- we become managers of managers and become their coaches or the executive coach. And that’s pretty much what a lot of our one on ones are around because they need to build their leadership skills, they need to build their leadership team. With it comes being empathetic to the fact that if they’re new in those positions or they’re about to go through a difficult conversation, but us being that support for them. It’s the only way that we trial and balance, trial and error, we came to that conclusion where in order for us to be able to really scale is to give that level of autonomy, but accountability and ownership path for the GMs. So that comes with also understanding that they’ll make mistakes. If they’re the right ones, they’ll take the ownership and they’ll call it out before we even call it out and they already will come up with a solution for us. But yeah, to me, a lot of it actually was from my mom being highly empathetic and kind.

Alex Bridgeman: Yeah, empathy is huge and really an important skill and something to learn more about. Is there any memory from- it sounds like your mom was impactful in thinking about empathy. Is there any lesson or memory from childhood with your mom that sticks out to you in regards to empathy?

Amir Haboosheh: I mean, I still experience it daily with her. Like when she- it doesn’t matter if it’s stranger, it doesn’t matter if someone she hasn’t met, she treats them like he or she is family. Just, it’s her right way she connects with people. There’s no judgement, wants to make sure that they’re on a good path. You can see she wears her heart on her sleeve. And I think that got passed down. So I think I just experience that on a regular basis with her. Taking the time and listening to people, even if you might be rushing that day, that person has something important to share and unload, you clear your next hour or two and you hear them out. And I apply that with my GMs too. My calendar might show that I have only one call and all of a sudden, eight hours and I’m still on the phone. Because in order to get to the meat of it, sometimes it takes an hour for them to clear it out. Probably not the best time management from everything that I see on Twitter or anything that I read. But it’s important for me for them to know that they have someone that they can talk to. And you really get to the meat of things after they let go of a lot of like frustration and sometimes they solve their own problems. So being a good listener, caring about the person on the other side not because you just have to but because you want to. And that person is important. Just because that person is not somebody you have family relationship or friendship relationship, that person in front of you right there and then is an important person, and you should respect the fact that they’re sharing their time with you.

Alex Bridgeman: Yeah, I couldn’t agree more. Is empathy something that you think is a skill that you can develop over time if you feel like you’re lacking in it? Or do you feel like a lot of it has to do from childhood and upbringing and it’s a harder thing to teach?

Amir Haboosheh: That’s a great question. I’ve been trying to spend some time thinking of that. I’ve seen there’s an operation out of Utah, it’s called Any Hour. They’ve done a fantastic job from what I’ve seen to instill empathy in their one on one as part of a process or system that they implement, and part of it is doing a personality test called the color code. And they have an employee dashboard that shows the history of the employee, when did you receive raises, what are their strengths, what are their limitations, their weaknesses, what are their core motivations. So when you spend five minutes reading about somebody else before they walk into a meeting with you, you already put yourself in their shoes, you already see the journey that they had with you over the past 5, 10 years as an employee or maybe even though they just newly got hired. So all these things for a good manager or co worker gives you a different level of insight on that individual versus just blindly getting onto a one on one call. That’s probably the best execution that I’ve seen on implementing a process. And I don’t think that their mindset, maybe there is, I should talk to them about it, was, hey, how do we put empathy into our one on one. I think they just operate at that level. And that’s just what they saw that works best. But to your point, I haven’t seen it until recently and this is about a year ago that I came across it. Other than that, it is just through coaching and conversation of putting yourself in somebody else’s shoes. And we do that regularly. I think even sellers that we spend time with, when we see that the conversations are getting difficult or there is friction, take a step back, let’s go play golf, go have lunch, let’s go have dinner. Let’s forget talking about business. Let’s build that rapport and relationship so you know you’re selling to peers. There is no adversary here. There’s no conflict here. We want to get to a position that you’re passing your legacy on to someone, someone that cares for you and your company and your people in the company as much as you do and your brand. But that comes out of just working with your team on a regular basis. And I’ve seen that they themselves continue here and there, they implement that type of mentality to their operation.

Alex Bridgeman: When you’re coaching someone on your team in an effort to improve their empathy or ability to connect with folks, what sorts of lessons or things do you talk about with them that you’ve learned about being empathetic and having empathy for others that you try to instill with them?

Amir Haboosheh: I’d say it’s definitely unique for a situation. A lot of it has to do with one figure out- let’s say, figure out what your history is, what’s your background, what are the things that you were challenged with that you learned, then see if there’s any one of those that you can use as well remember how you were in that position. Think about this person that you’re working with right now, what you went through last year in that challenging environment or that challenging person that you’re working with, that’s what they’re going through right now. Right away, then they can say okay, those are the things that I was struggling with. Now I understand what that person is kind of trying to first figure out what has been some of your lessons learned and then apply that moment into what the person is currently experiencing. I can give you an example with one of our- very frequently we’re big on empowerment, we see that a lot of people get stepped over or passed on in getting into leadership positions because of whatever reasons, and the opportunity probably was never given to them for them to stretch themselves and prove themselves. And I’m a big fan of trusting them to execute. Because what happens is when you trust someone to do it, any mistakes that happen, any challenging, they probably will spend a bit more time than normal, they probably will figure it out, will take great ownership over it. And they’ll make it happen and they’ll figure out a path. And that’s what you want. You want to start pushing out of the comfort zone. So we had a operation manager that she really wanted to step up into that position. And typically she was I think more of the office manager role or lead dispatcher or wearing a million different hats. So having that conversation with our GMs and exec team that hey, let’s have her be in that position. You were in the same position where those opportunities, you were stepped over. How did you feel? How did you do when that opportunity was given to you? You not only owned up to it, but you also rised and proved yourself more than typically would have because you really wanted to impress and do right by the person that gave you that chance. So then the conversation changes, like alright, let’s do it. Perhaps we’ll see what you’re saying and so we’re coming across- that’s kind of one way of doing it. But you’ve really got to know both sides. You got to know the person you’re talking to the person that you’re trying to help them coach through. But that takes some work some time to really get to know and that’s where half an hour becomes an hour or two.

Alex Bridgeman: Yeah, I feel like we all have our own memories and lessons where we’ve had to learn empathy and learn what it really means to think about what the other person is going through. I have a small sample from a college internship I had where I worked with the director of finance as part of the accounting team because my degree was in accounting. And every so often, I would need the CEO to sign checks that are like larger than 2500 bucks or something like that. Every so often you’d have one. I’d need him to sign it. And often though, he would have his door closed because he’s on a call or is working on something and he needs like dedicated focus time. And as an intern, I didn’t know any better. So I see a door closed, and I was like, oh, he’s still probably available. I don’t know what I was thinking. But I would still open the door and ask him to sign a check, which in hindsight is like the dumbest use of his time at that point with his door closed. And the director of finance later on in my internship, I think like a week later, pulled me aside and said, hey, like, when the door’s closed, don’t bother him, like he’s working on other stuff. Like, there’s a lot going on. The check can wait. Like, it’s okay. And so I had to think like, okay, I get it. Like he’s, of course, very busy. There’s lots of other stuff going on. In terms of priority, like thinking in his shoes, signing a check isn’t really that big of a deal. And so I had to learn how to how to think through that more. But in your own career, do you feel like there’s been a moment like that where maybe you didn’t have that same amount of empathy that you do today for somebody else and it was a good learning opportunity for you?

Amir Haboosheh: I have to think back. I’m trying to think when was the last time I got reprimanded on something. Right away signing $2,500 check, I agree, which is probably really important, we should just burst in. So like, I need this done. I don’t care whether you’re on the phone or not. Probably something similar, especially when you’re younger, something menial, like you’re building a quote for a customer, and it’s the most important thing. You told someone that, hey, you want it done by this time, like to that person, like I’ll get the quote out to you. And then, your manager or your boss is working on whatever they think is important and you try and interrupt them, like I need you to review this approval. And they’re like, that’s not the most important thing for me to do. So right away, you start learning that even, cleaning they scream. So you learn really quick that okay, maybe the doors closed, they are on the phone, I could wait a minute. I could call someone and say, hey, I’ll send you the quote by the end of the day versus first thing in the morning or something like that. So you learn really quick empathy. But lucky for me, my upbringing was around that, including from my grandfather and grandmother. Always put yourself in somebody else’s shoes. Yeah, I agree with you.

Alex Bridgeman: Yeah, I feel like it’s a experience thing too, like the more jobs you’ve had, the more companies you’ve worked in, the more people you’ve worked with. Over time, you just learn that people have their own to-do lists. Everyone has their own set of priorities that may not overlap at all with yours. And you have to work through aligning interests over time.

Amir Haboosheh: And to that point, I’m like really looking at a person, we all are 80% the same to a certain extent in terms of what motivates us, what are our concerns, the security, impressing your boss, it’s job security, taking care of your home, looking at a person as a human being versus whatever the job description is, and then it makes it a lot easier to connect with them and find out why they do something for you to be able to walk them through why that’s not okay. Because in their mind, I personally don’t think people are obviously inherently trying to damage the company or do their job incorrectly. Just this is how they think they can go about solving the problem; they don’t see the repercussions to their teammates, or they don’t see the repercussions that will happen to the customer. But to their mind, hey, I know, let’s say a plumbing example. I’m going to go to a customer’s house, like I fixed their clogged drain and doesn’t matter that I made a mess; I fixed their problem. But you just walked in with a whole bunch of mud, and your presentation and everything else, explaining that walking into a Chipotle or In & Out is very different than walking into Mrs. Jones’ house, put your booties, introduce yourself. She’s alone, take a step back after you knock on the door, so you’re not towering over her, walk her through everything that is going on. Like being able to explain that to them versus you just solve a problem. It’s very different. Chipotle, just solve the problem. I need to make sure that I can keep the lights on and have people coming into my restaurant, keep operating. So making sure that you explain that to them, taking the time to do it, to explain the difference. They definitely understand it.

Alex Bridgeman: Yeah, it’s interesting you mentioning like the steps of approaching a customer’s house. I remember I had an episode with John Wilson, and he talked about that. He talked about they coach folks to, if you’re going to pull up, make sure you don’t pull up into their driveway, like park on the street. And if you arrive at their house, like get out of the car fairly quickly, like don’t sit there for 15 minutes because they’re going to wonder what you’re doing. If you have to finish something up, like park around the corner, and then come around. Knock, but then step back, make sure you’re not like busy on your phone, and you’re there to say hello. And so it’s interesting hearing about some of those steps that help build that empathy with a customer too.

Amir Haboosheh: Yeah, we love John Wilson here. And he actually toured one of our facilities, the one in Phoenix and connected with our GM there, and they’re texting as far as like things that they can implement in their processes. And one of the things we do actually is once you get out of the car, wave to the home, and not that the home will wave back at you, but everybody has like a Ring or some sort of a doorbell camera, or they’re looking out their window or the neighbors are looking, and you want to present yourself as a friendly contractor, friendly plumber, friendly HVAC tech, or electrical technician. So it’s all starts from that mindset becomes a bit more uplifting if the first thing you do is you smile, wave. And then your whole approach changes right from that moment.

Alex Bridgeman: Yeah, I cannot agree more. How do you, when you’re going about hiring someone in any role, like how do you screen for empathy? Are there certain questions you look to ask or certain things on a person’s resume? Maybe that’s not as helpful. But what do you look for in hiring someone to see if they have that kind of empathy that you’re looking to have on your team?

Amir Haboosheh: Alex, you’re asking fantastic questions. The hiring process hasn’t been something that really has been- it’s changed quite a bit. I know I have a couple of my board members providing a much more detailed, systematic way. For me, it’s really how much time can I spend on the phone with them, talking to them, they’re talking to me, and through the conversation, through physical face time, trying to figure out how do they see working with, I’ll give them like difficult scenarios of hey, let’s say right now we’re hiring a CFO. And how would you approach this situation with a controller at one of the operating companies or senior accountant at one of the operating companies, and how they’d go about approaching that. Because at the CFO level, definitely you have that coaching role, mentorship role for your not only VP of Finance or your direct reports but also the key finance heads at the operating companies. So you have to have a certain degree of empathy and servant leader type of mentality. The key- the words that they use, how they use it, is how I would tell, and making sure they’re genuine about it because it’s contextual, not just a buzzword that they put in. But now I never- actually, it’s something that I inherently tried to look for. But not actually put it as part of the scorecard of like, hey, if this person has empathy or not, I would usually put like are they a good mentor. But now I’m going to put it as my list of like actually looking for empathy. So I appreciate that.

Alex Bridgeman: You mentioned mentors. Are you looking for folks who have been mentors to others?

Amir Haboosheh: Mentor to others, or they had good mentorship that they want to now pass on to others what they learned. And very frequently, when I know I’m hiring a high level person, before hiring, I will connect them with someone that will report to them. And I would ask that person how did the call go, is that someone that you can learn from, is that someone that you feel like will be a resource for you. That’s just one of the things that I like to check as I want to make sure I’m not only hiring for myself for the role, but I’m also hiring for the people that will be reporting to them. Especially when you’re introducing someone new that is not developed from within, we want to make sure that they can see that, hey, this is this guy’s experienced or lady and someone that I can learn and grow under.

Alex Bridgeman: You mentioned a character trait survey that you use at a different business is something like Predictive Index or Culture Index. Is that a part of your hiring process?

Amir Haboosheh: That’s not part of our hiring process. Color Code is part of culture index. I heard really great things about culture index. We haven’t implemented that. We use color code, absolutely. And it’s not so much to try to pigeonhole them into a type of a job because there’s like, for example, the color code is based on main four core motivations, peace which is white, power which is red, intimacy which is blue, and then fun is yellow. It’s more so that you print out the report, you show it to them. And then once you have the second or third interview, their guard is down. And because right away, it shows their weaknesses, their strengths, their core motivation. And you’re able to have a much more in depth conversation versus superficial, based on resume and putting a bit of a front in terms of everything being positive. So that’s what that accomplishes. And knowing like how they’re- people that, for example, are motivated by power, if you send them an essay long email, they’ll glaze over it; they like bullet points as an example, like just sending me- give me the ABCs and the 123s. Give me the story, even though the story is important, but just give me the meat of it. And it’s not offensive to them. Others, blue is more part of their strengths as weaknesses, perfection. And being a perfectionist and being able to coach them, knowing that about them, that hey, sometimes 70 and go is just as good as or better than 100% and we still fail on making any effective changes. So we use that absolutely as part of our coaching and empathy building and every workshop. After acquisition, we have our workshops, and within 30 to 90 days, we do our first one, and then it’s quarterly thereafter. And within a year, we peel out from that, and the leadership team takes ownership of it. A lot of it is going over the color code, even if it’s just a refresher of reminding people of what are the core motivations and what color in terms of their color personality, it’s absolutely part of our conversation on a day to day tone. What it does is also you don’t attack a person. You don’t attack a person; you are more objective in terms of like, hey, I know you’re motivated by peace, which means like maybe you want to avoid conflict, or you want to avoid a difficult conversation, you coach them through like, hey, you need to lean into that in order to develop into the role you have. So it’s not something that you can overcome, but at least you know how that person normally operates or is motivated to so you can talk to that as opposed to you’re avoiding difficult conversations.

Alex Bridgeman: You mentioned an interesting concept there, which is separating the person from the color code or the results of their survey. My wife is in a physical therapy doctor program, and one thing they focus on is being patient first. So instead of saying like cancer patient, you’d say a patient with cancer. So you’re not labeling them as the disease or condition that they have. And there’s a session I was part of on feedback recently too and how, instead of saying like you made me feel bad yesterday in that meeting, you could say like this thing that you said or this action you took, that’s what made me feel bad. So you’re separating- it makes it, like you said, it makes it feel more objective when you can point to an action or trait beyond just them as a person. That feels less, I think you’re right, it feels less targeted and personal, and a little bit more like emotionally neutral as a discussion.

Amir Haboosheh: Absolutely right. And then I like to even go even deeper than that and explain the why, addressing what they said, also who was in the room that heard it and now their impression of that, and why that wasn’t the right- not only the right thing to say, but the wrong place to say it. And that clicks. Because we all might talk differently in front of coworkers, in front of managers, and in front of our friends. Sometimes when you get too comfortable, things can slip. So I’m reminding people the differences of those nuances, it’s just part of the conversation. And sometimes those conversations come up a day later because they’re just not ready to hear you. So the timing of when you address it, when you do it fresh right after, they might not- they’re not ready for it maybe the day after or two days after, hey, remember that conversation? Let’s talk about it. And now they’re ready for it.

Alex Bridgeman: Yeah, what have you learned about giving feedback to folks? That’s a great lesson right there around giving it some time before giving the feedback, but I would love to hear more.

Amir Haboosheh: The timing of it and I tried the timing for it to be where they just experience something similar that they put up and made someone else feel, so then it’s fresh that okay, now they’re ready to hear it because they’re literally expressing their frustration that I noticed when I was in the room with them that the other person experienced. So let me bring it up now. As much as I would love to just say it on the spot just because don’t do that again. That’s, one, not appropriate, won’t stick. It just looks like- I don’t know exactly the word. You just keep saying no, no, no type of things. And often I sometimes actually waited a week to address something that was like okay, remember what you did a week ago, and now you’re ready to hear it. And very frequently, I hear them say, hey, thank you for waiting for a week, I actually would not have been ready to hear what you just said and receive it until this moment where I’m experiencing this, and now I understand where you’re coming from with that other person. So it requires a lot of patience.

Alex Bridgeman: Yeah, certainly some patience. I agree with that.

Amir Haboosheh: Because all of us just want to like offload and just say it right on the spot so we don’t have to think about it.

Alex Bridgeman: One other thing that’s been helpful, it sounds like you do this too, but asking the person like, hey, can I give you some feedback or are you ready for feedback, instead of just saying it. I feel like it is- allowing them to give you permission to give feedback, I think it feels like it allows you to connect better with that feedback and that person.

Amir Haboosheh: Absolutely. And actually thanking them afterwards, like thank you for allowing me to be so open and direct. It’s uncomfortable for me, it’s uncomfortable for you. Some things actually people are very vulnerable about, for them to be able to receive it. Even micromanaging, I do not like doing it. And I try to stay on the influence side 99% of the time. And when you have to lean in on the authority, then it’s like, hey, look, is it okay if I become a bit more micromanaging, I just want to help you see through this situation, I want to be a resource and support for you and helpful. I see where you’re navigating on this one, and let’s work on it together. Let’s make it collaborative. So yeah, 100%, that’s it.

Alex Bridgeman: Yeah, and the sentiment you share with that example just now is that I’m giving you this feedback because I care because I want you to succeed, and I want us to succeed together. Like if I didn’t care, I wouldn’t be telling you.

Amir Haboosheh: Exactly. And I’m okay with people making mistakes as long as they’re learning from them. I make plenty, and my board is very forgiving with me. And a lot of times, people in new roles, they want to just show that they can do it all and that’s something that’s a mistake because you need to have some level of vulnerability to be able to feel comfortable asking for help from the right person so that you can learn from our experience and overcome them better. But people can make $1,000 mistakes and they’re terrified of it, like you mentioned the $2,500 check. But nobody makes bigger financial mistakes than me because I own all mistakes at the end of the day. So like when I share that with them, it puts a bit of a relief. Because I want people to make mistakes, and then they’re not pushing themselves, and I’m not taking chances, then we’re not growing. If we’re just doing what’s comfortable and we’re just staying in our comfort zone, we’re not pushing, we’re not going to experience 20, 30% growth rate like we have over the past three years now if all we did is let’s just stay comfortable and keep doing what we always did. There’s always a degree of testing, pushing an envelope, doing a bit of experimentation, whether it’s customer acquisition, whether it’s a tuck in acquisition, whether it’s the makeup of the organization as far as who’s reporting to who to improve the communication lines or seeing if they will work better if this department works under this person. Every year, we try to do something a little bit different because how else will we be able to keep pushing the envelope. So with that, things will break. With that, mistakes will happen. And that’s okay. We’re learning. We’re growing. But I would like us to always be a little bit ahead of that curve.

Alex Bridgeman: Yeah, you mentioned your board, and you have a very successful board of folks who have each been very successful in their own ventures. How do you lean on that do expertise? And how you know when to ask questions or get their help, knowing also that they’re busy with lots of other things in their lives?

Amir Haboosheh: I think if you would ask them, they will tell you I don’t call them enough. They’re very available for me. I love talking to them. Extremely experienced. It’s a matter of either I text them, hey, you’re available for a quick call, are you available tomorrow? Some of them have more availability than others. Some of them are traveling or I’ll book a call under their Calendly link. I have those. Some of them, they know me that instead of sending an email, they’re like, look, I know you don’t want to go over email. Let’s just get on the call and we can talk through it. They’re very available for me, especially when there’s right now four of them. There’s one some of them I have regular calls with every two weeks. All of them, obviously once a month. So even if those conversations are 10, 15 minutes, or sometimes they’re an hour and 10, 15 minutes. So yeah, I’m very lucky. And three of them are our co founders. One of them was our lead investor, lucky to have, his name is Matt Singh from SCP, Think Capital. And great team, very collaborative, a resource every single time we’re having conversations. So I don’t think a lot of people are as lucky as we are. And that’s just by happenstance.

Alex Bridgeman: It sounds like you have very regular conversations, so maybe it’s less applicable, but I’d love to learn more about what kinds of questions are the right ones to ask a board versus peers of yours or your CFO? Like, there’s probably different types of questions or different- whether they’re like open ended or very specific questions you ask a board versus any other person.

Amir Haboosheh: I try to be open with my approach and very candid and transparent with them. I see they’re owners, significant owners in the company. So I see like okay, how would I, including myself, but how would I like to be treated? Then I will tell them if I’m sharing too much information, you let me know. I don’t want it to be- I like it to be like a two way street and I like to be available for them. I would say, I’m thinking of one situation, the conversation that I had with one of our board members was very similar to the one that I had with our own exec team, like, hey, how would you approach this situation, or what do you think about this deal under this structure, it’s one more experienced data point and that you’re- eventually you’re the one making the decision. Eventually, you’re the one owning it, but you take the time, probably slower than I should be. But I take the time, go through the discovery phase and talk to the key people. And you some of them you want- very frequently I like hearing the opposite or someone that is disagreeable. And if no one is disagreeable, then I play the devil’s advocate, and I’m disagreeable and try to find out like what’s the negative of the situation. But I like to hear as much as possible. So just, even if sometimes I made a decision, I would still- on a call, I made decision yesterday, and I didn’t get a chance to connect with them, say, hey, this is how I went about it, how would you have gone about it? I already made a decision, I will let them know. I was like, this is how we’ll do it next time or this is how we normally do it here. Because then you can learn for next time, not only from your experience of the decision you just made, from somebody else’s that they went through it, but you just haven’t had a chance to weigh, take it in before taking that action. It’s probably more open than it should be, but I don’t know how else to be.

Alex Bridgeman: It sounds like it’s working well. Moving on to closing questions. What belief have you changed your mind on?

Amir Haboosheh: Oh, I’ll tell you what we’re constantly changing- not constantly, but it’s morphing quarter over quarter or conversations over conversations is decentralization versus centralization. It’s what resources is non negotiable that the holding company, for example, marketing, at first, it was marketing will always be done by the marketing company that we acquired. Now, we want to give them some level of autonomy and decision making based on resources that they have. But SEO is not negotiable because SEO is the one thing we- it’s a long term one that we can make mistakes on paid media, you can make mistakes on a lot of other things. But SEO, you can make a mistake, oftentimes it falls into a penalty with Google or any other platform. And not that many people do it right. So that’s a very small example. Finance, is it something that sits with the holding company, is it something that sits with the operating company. We’re realizing there’s very different levels of finance. You have a controller that might be more compliance focus and financial controls, they’ll be a better fit for a Corporate Controller at the holding company. But one that is operational friendly and hands on to provide the right KPIs and reporting for the GMs and leadership team at the operating company, that person will have a different skill set. So playing around with the centralized versus decentralized from the inception of Snowball has changed. At first, we were quite top heavy in terms of the resources that we had and wanted to provide more for the operating companies so they would just do what they’re best at. That removed a level of ownership and autonomy for them. Now we’re more- we went on the other extreme of the centralizing and keeping Snowball as lean as possible and just focused on M&A and providing economies of scale and better pricing power in negotiation with our vendors and manufacturers. So using these manufacturers to get better terms and better rebates. So that’s the one thing that we’re still learning. We’re still finding what is the right balance with the idea that always making sure that the things that the operating companies are either- that are obstacles in their way for growing and executing are things that we can identify to remove without overly burdening the holding company because now we’re drawing on their financial resources to pay for our expenses. So being cognizant of that balance.

Alex Bridgeman: Yeah, certainly. What’s the best business you’ve ever seen?

Amir Haboosheh: You know what, actually one of the better ones I’ve seen is out of Fresno, a friend of ours out of Fresno, California. I think we touched on it, that team. They run a great shop. They have great training, great managers all across, great crew, system oriented, very process driven, running on a budget, love every person in their leadership team from the GM, sales manager, install manager, their controller. They built something quite amazing. So actually, I would say that business in an area that the population is about half a million and median house income is like 50,000, 55,000 or so. So, they had challenges. They overcame them and it wasn’t an obstacle for them.

Alex Bridgeman: Yeah, some of those really good cultures can be hard to find and much more rare than we would hope they would be.

Amir Haboosheh: No, that one would be Any Hour out of Utah that I mentioned. They have fantastic culture. You mentioned culture; that’s the first company that I thought of. You walk into that place and you feel it from room to room.

Alex Bridgeman: Yeah, it’s impressive what a good culture feels like. Thank you, Amir, for sharing your time. I really appreciate it. It’s really good to get to know you. And I’m glad we could get from a call to a podcast so quickly, and it feels like one continuous conversation. So I’m really glad we got to do that and get to chat.

Amir Haboosheh: Same here, Alex. I think, like you said, we have quite a bit to still unpack. I’m looking forward for some more to share with you because we do a lot of different things that are interesting and I think you would enjoy.