Palmer Higgins on Building a CEO Factory at Chenmark

Seven years ago, I was trying to venture out and buy a couple companies. It was this guy and his brother and his sister-in-law whose podcast with Brent and other podcasts gave me the stones to go quit my job and get started. So, thank you. I did not know that.

He's got an operator factory, that's the best way to put it. A lot of us who are in the seat are envious of that. So we're going to talk a bit about that. Our preference would be for this to be interactive, so speak up, let's have a conversation. Without further ado, Palmer, can you tell us what is Chenmark today and bring everybody up to speed if they haven't been following along for the last 10 years?

So, 10 years in the making. It'll be 10 years next year since we acquired our first business. We'd be classified in the holdco universe. The idea all along was to buy multiple small operating businesses with the intention of holding them forever, in myriad geographies, myriad industries. That was the kernel of Chenmark 10 years ago, before the holdco concept was a thing.

Today, we have 11 businesses across a bunch of different industries, geographies in Maine, down in Florida, northwestern Canada. We're very decentralized by design. All our businesses are run totally independently of one another. CEOs run those businesses. They have their own P&Ls, they run their own payrolls. They could in theory be cut off entirely. We only centralize what we legally have to for the most part.

September of 2015 was when we closed our first deal. It took us about nine months to finance and stuff the clock. 11 independent companies over how many transactions? It's probably north of 40 at this point. I don't really keep track of it. Some of the deals are such a tough thing to define. I've done a low six-figure deal before. Technically that's a deal, but it's very small.

The one that blew up yesterday was a mid to high six-figure deal blowing up in my face right now. I got a phone call from my CEO. It was supposed to be a small deal, and it turns out, legal matters, guys, legal matters. Because we do legal matters, the seller disclosed he's in an active lawsuit. You find out the day of closing because the ambulance chaser lawyer calls you and sees dollar bills. He filed papers last night. After dinner I got back to my dorm at 10:00 PM and I'm on the county website looking at docs, and now Chenmark is named as the defendant in this BS suit for a company that we didn't buy. Welcome to the world. Like the Mike Tyson thing, everybody's got a plan.

The seller tried to bury his head in the sand and thought it was a frivolous suit. I looked at the evidence that's public, and it's definitely not frivolous. He didn't appear at the trial, so he's now guilty by default. The trial Tuesday was basically just to award judgment. The guy did his research on Chenmark, every company he could find, every person he could find. He probably went to LinkedIn, searched Chenmark, and put anyone who came up in there.

So you want to be a CEO. This isn't the first time I've been named in a lawsuit, but I did call our CEO and our CFO of the business that was doing the acquisition. It is the first time they've been named in a lawsuit. So part of my calls yesterday in between sessions was, hey, I know this is happening. I'm really sorry. I've been in this seat before. Don't freak out. It's BS, it's going to go away. I know you're probably freaking out because your name's on a lawsuit and they're seeking a million dollars in damages.

Back to the 11 platform companies. Three landscape businesses. That's what most people associate Chenmark with, the landscape rollup. We haven't bought a landscape business in a really long time. The multiples now are tough. Three of those, one commercial focused, one almost purely residential, and one a hybrid. They're all in New England, but all running under different brands. One is what I'd call a lawn care business, outdoor pest control. It does fertilization, mosquito abatement, seeding. Three tour businesses, two in Maine, one in Florida. We have a Canadian food manufacturing business. We have a Canadian paint retailer, more in the manner of a Berkshire company than a franchise. A power equipment company in New York that sells outdoor power equipment to residential homeowners and commercial landscapers. And a retreat farm. That's 11.

In the beginning, I started Chenmark with my brother and his wife, my sister-in-law. We didn't know what search funds were when we started. We thought buying small businesses was an interesting idea. We realized what a search fund was pretty soon thereafter, but I think it was good that we didn't know what a search fund was early on. 10 years ago, the whole strategy wasn't a thing. Once we learned about the ETA space, it was clear that we were sort of on the fringes. If we knew what a search fund was back then, we would've been talked out of what we were doing. Ignorance was bliss to some extent.

In the beginning, they say partnerships should be like one plus one equals more than two. Honestly, I'd say one plus one plus one was probably less than three. We did a lot of stuff together, and it was not super efficient, but it really helped us get to know how we all worked and what we were good at, so we could separate. The first thing I started to take on was search. I headed up search, did a bunch of our early acquisitions. Then I was sort of forced into a CEO role. We realized hiring CEOs externally wasn't working, had to replace a CEO, didn't have a CEO bench. I stepped in to run a business, ran that business for about four years, and then stepped in to run a different business on what ended up being a fairly interim basis. About a year ago I stepped out of that role, and now I'm overseeing five of our businesses, working pretty closely with those five CEOs and on some stuff at the holdco level.

We don't have formal boards, but I'd be a fairly active board member. I'm definitely a coach a lot of times. Sometimes I'm a mentor, sometimes I'm a kick in the ass, sometimes a hand on the shoulder. I'm a sounding board a lot of times for stuff you can't talk about with your teams, or things I've seen before in other businesses. Ten years in this world, I've seen a lot. I've gone through a lot of reps myself and I've seen a lot of reps. Having that pattern recognition helps in being able to download that to some of our CEOs who haven't been in the world as long.

What makes for a great CEO? I'd distill it down: high processing power, processing speed. You get a lot of stuff coming at you when you're the CEO. Your aperture's very wide and things are coming at you from a lot of different domains. You need to process all that, contextualize it, figure out what's important, what's not, triage it. You need intellectual and analytical horsepower to take it all in.

The other piece is you need to be a good communicator. A lot of stuff comes back to communication. Can you take what's in your head and communicate it clearly and concisely to a team? Can you do it in a way that gets them on board, gets them interested, gets them motivated? Can you do it in a way that creates a shared consciousness in an organization? If you can do that, for those of you that have run businesses, you've probably seen times your businesses have really taken a leap forward, what some call a firehouse moment. In my opinion, that generally happens when you have really good alignment and shared consciousness in the team.

On the flip side, what makes a suboptimal CEO? Lack of humility. You're done in this space. People are going to suss that out, and you're going to lose the team real fast. I'd put authenticity higher than humility. There's a lot out there about how to be a good CEO, but there are a lot of different ways to be a good CEO. That's why I focus on principles and not discrete things. People say Steve Jobs was a really good CEO. He was, but also an a*****e a lot of the time. You shouldn't try to be Steve Jobs, that's not you. Jack Welch, sometimes he was an a*****e too. You need to be true to who you are and what kind of leader and manager you want to be. There are themes all good leaders do, but if you try to be someone else, you're going to be inauthentic and it's going to be hard to be effective.

A lot of us get in the seat and don't realize it's maybe not the job we expected. We left a corporate gig and the idea of sitting behind a computer is appealing, but when you're managing a team of blue-collar folks, you don't sit behind a computer. You have to be out there getting punched in the nose and dealing with all sorts of stuff. So a willingness to get into the weeds, the tough stuff, the managing of people.

How does the CEO role change as a business gets bigger? A lot of our businesses are still small. Jobs's stage one to three is a good framework. There are different life cycle and maturation phases of the company in terms of sophistication and capabilities. Early on, especially as a new CEO, you're going to have to work in the business. The drumbeat of "work on the business, not in the business" has gone a little too far. It gives people the impression they shouldn't do anything in the business. It's a small business. There's not a lot of redundancy. You're going to have to work in the business to some degree. I don't think that's bad. It gives you great awareness of what it's like on the front lines, great context, and it helps build camaraderie with the team.

If you do that, you learn the business really well. You learn what really drives the business. In my opinion, there are always three to five things in every business that are key to the business performing well. If you do those three to five things, a lot of other stuff could be totally screwed up and you're still okay. On the flip side, if those three to five things aren't moving in the right direction, you can be perfect everywhere else and it's not going to be perfect.

You earn the right to move on to the next maturation phase. Then it's a lot more about looking out, are you pointing the company in a good direction? I always felt like the maximum I had visibility and conviction about where the company was going was 18 to 24 months. Beyond that, it's pruning. I was a big believer in Herb Kelleher, five-year plans are BS. Things change so fast it's not worth the time you put into it. I just need to know roughly what direction I'm going and put the company in a position to be successful 6 to 24 months out.

We've seen one of our leaders run a business that started at 12 million of revenue, 2 million of earnings. He was the point of contact for customers. He's now running a business north of 50 million of revenue. You go from being a doer to a coach of the doers, and it's a hard change. Is that something somebody can develop? I really think it can be developed. I enjoyed that progression. I'm the kind of person who doesn't feel like I understand anything until I understand it deeply and completely. It's not linear. It's nothing, nothing, then aha, I got it. If I got it, then I understand what's upstream, what's downstream, the second and third order implications of decisions. That gives me clarity to know how to delegate, how to automate, what we don't need to do anymore.

I'm seeing it in some of our CEOs. Part of it's confidence, part is being willing to let go and understand some things aren't going to go well, some things will get done in a way you wouldn't do, some things will get done worse than you'd do them. One of my favorite quotes: if you want to go fast, go alone. If you want to go far, go together. I can go faster doing a lot myself, I'm willing to work hard, but that's not really going to build the muscle in the company to take it beyond what any one of us can do.

Do you encourage CEOs to build the team or do most get there on their own? I do have to push some of our CEOs to build a team, especially for big strategic hires where the payoff isn't immediate. CFO is one example. I've got a CEO I'm working with whose business is performing really well, foundation is solid, but what's lacking is sophisticated revenue growth organically. The company's ready. If you slam on the accelerator on the sales side without the infrastructure to handle that and develop people to service that influx of revenue, you have a problem. They're there now. It's a big hire, call it director of growth or chief revenue officer. He's nervous, big hire, lot of money, not going to pay off immediately. That's the whole point of hiring a high-quality person. You point them in the direction and they figure it out.

Would your preference be to hire ahead of need, or has Chenmark been slow and methodical? If you were looking from outside, you'd probably say we're slow and methodical. We expect to own the companies we own indefinitely. We're not in a rush to grow a ton next year. There's a natural conservatism that you could argue is bad. We employ some pretty high-quality Type A people, so they want to grow. We give our CEOs flexibility of not having external pressure. We underwrite deals very conservatively. We don't have private equity leaning over our shoulder saying you better hit this IRR hurdle rate. That takes a lot of the edge off and allows CEOs to develop at their own pace.

The internet is full of great stories, sunshine and rainbows, but I've been there twice where things have gone sideways. Tight on cash, losing customers, lose a key person. Everybody here who hasn't been there will be there sooner or later. What are you looking for in a CEO who can step in during wartime versus peacetime?

Stepping into the CEO role myself was wartime, a turnaround. That was our lawn care business, the outdoor pest control business. We tried to hire externally for the CEO role to acquire the business and find a CEO to plug in on day of closing. We tried that a few times in the early days of Chenmark, and it didn't work out in any case. That's why we pivoted to developing internally. Things weren't going well. Team was angry. Revenue was plummeting. Cash was dwindling. Then we realized he was falsifying reports to us. That was the last straw. We needed to make a change really fast. James, Chris, and I had a meeting. One of us has to go run the company, and nine days later I was introducing myself as the CEO of the company. I had nine days to prepare to be CEO.

That situation in itself is a forcing function. You're strapped on time, things need to change. The benefit is the team also knows things need to change. When things aren't going well, it's easier to engage in change management. It was kind of easier for me to come in and say, yep, I had a hand in hiring that guy, that was the wrong hire. I screwed up. I'm sorry. But I'm here personally to fix it.

First impressions matter. Talk to everyone in your business. Work your ass off. Face time matters. I was the first one in the office, last one out for 90 days. I've never worked harder in my life. I got super sick. My now wife, then girlfriend, was like, this is unsustainable. But I was like, this is what I need to do. It does force you to make decisions faster.

The whole saying, don't let a crisis go to waste. When you're tight on cash, all you have is the hustle and energy of your team to get past it, and you make mountains move fast. So long as you can survive it, I don't hate a crisis. You go through hard times and look back on it fondly. A lot of people talk about parenthood that way. Those first 90 days, it was awesome. I brought the team back together. There was a conscious element of feeling like I didn't have to feel guilty anymore about putting the wrong guy in the seat. We got forged by this intense moment of wanting to turn the business around together.

What is GVP and why did it come about? 9.8 out of 10 owners we talk to who want to sell their businesses don't have someone in the business who's capable of stepping up into the CEO role. So in order to successfully acquire those businesses, you need to have someone prepared to step in. The search fund community has solved that problem with the searcher being the one stepping into that role. There are only three of us. We can't split ourselves different ways.

We tried buying businesses from owner-operators who were going to stay on as CEOs. That didn't work great for us. We tried hiring CEOs directly into the CEO role and found out it was really hard to hire for that person. Hiring is an inexact game. Your hit rate is not a hundred percent. Putting them into a CEO role with a ton of autonomy and agency and decentralization means it's really critical we get that position right. So by necessity, we had to develop them internally.

Credit to James, he masterminded the GVP program. GVP stands for generalist vice president. It's a CEO development program. We bring people in to work with us at HQ, originally Portland, now we've gone remote. That's an opportunity for us to make sure that we hired the person we thought we hired, and for them to make sure they joined the company they thought they were joining. We get them reps in search so they can see a lot of deals, a lot of small businesses, understand how a lot of different business models work from a numbers perspective and a deal perspective.

Stage two is they go work at one of our current operating businesses in a senior leadership role. CFO, general manager, chief of staff, head of sales, head of people, director of growth. The majority of our CEOs now are people who have gone through the GVP program. They're adding value even before they become CEO. By definition, they're not going to be around very long. It's designed to turn over because they're meant to become CEOs themselves. I'd rather have a really high-quality person for a year or two than not have a really high-quality person at all.

Step three: CEO. We're always looking for new opportunities. Once they get to that stage, they're eligible to become CEOs. As deals come up, they have an opportunity. They can basically run an internal application process at that point. Time-wise, average times are very similar to a search by design. But the majority of that time, ideally, is being in an operating business.

How do you incentivize and motivate your CEOs? The big thing we focus on is free cash flow generation. We give them a split of the free cash flow their business generates, and we pay that cash. We give them an opportunity every year to take that cash and buy Chenmark holding company stock with it. You earn your incentive compensation based on performance of the company you're in charge of, but you can convert that into stock of the holding company.

We're also working down the org chart, giving people options to acquire stock. We're a holding company, diversified small businesses across borders. It's an illiquid stock. It only trades once a year. But we make a market, so owners of stock have an opportunity to sell. There is liquidity available to stock owners without an exit. Anyone who comes to work in the GVP program has access to that program from the start. At this point we're at the senior leader and middle management layer of employees at all our companies having access to it, at the CEO's discretion.

This is partly pilfered from Berkshire Hathaway, partly from the Motley Fool. Fun fact, I went to the same high school as the guy who, two brothers actually, started the Motley Fool. They wanted people to have equity-like incentives, but they didn't like options. They thought options were clunky. So they make an internal market once a year. It's not perfect, you only have liquidity once a year, but it's elegant.

The hardest thing in my opinion is hiring for key people. Our application process is pretty simple. A resume and a Google form with about five questions. They're broad enough but let people answer how they want. Phase one, they're with our head of recruiting for a first screen. Then we do some case study work. We've had to change that up. Some of our case studies were making it out to job boards, so we had to create multiple case studies to keep the market honest. We do that to make sure they have some basic capability. If you haven't looked at financials ever in your life, if you don't know what a gross margin is, we're probably not the best place to start.

Phase three, we bring people in for in-person interviews. They meet with a group of five of us. If you asked any one of us individually, we'd say we're terrible interviewers. But collectively we're great. We're all looking for so many different things. The wisdom of the crowd really works.

The one thing I screen for more than anything else is the true authentic interest in wanting to be in this world. Going back to when things get tough, it's really easy to be CEO when things are going awesome. It's not so great when things aren't, when things are blowing up in your face, cash is tight, you're named in a lawsuit for purposes you didn't even buy. Do you want to be a CEO on those days? If yes, great. If no, then don't.

What is inauthentic? You need to want to sign up for the whole role, not just the good parts. If you're in it because of the title, because you love the fact you're going to be CEO, because you think your day is going to be like Warren Buffett eating peanut brittle and drinking cherry coke and thinking about capital allocation, reading books all day, that ain't it. You've got to be in it for the whole job, the good and the bad, people management, customer acquisition, the hard stuff, the nitty-gritty. You've got to be willing to work in the business. Zooming in and zooming out. You need to do both, not just zoom out. If you think being CEO means managing this business by decree from your corner office at 30,000 feet, it's not going to happen.

After the interviews, we fill out an assessment form independently. We have a strict rule, we don't talk about candidates until we've done that. So it's true independent assessments. Then we sit in a room and discuss. We force ourselves to rank people on a zero to 100 scale. 100 means I'm comfortable, I'm a champion, I'd convince other people we should hire this person. Zero means I'd convince people why we shouldn't hire this person. So you can't fence-sit at 50. That helps modify what is admittedly a subjective assessment. Yes, we should hire this person, but to the tune of 90 or 65? Those are very different things.

If the answer is yes, we're hiring them as a GVP, and we're hoping and expecting they'll turn into a CEO. Should single-company operators take this approach? You need to paint a picture of what the future could look like for that individual. People come to us because they want to be CEO. We tell them this is a program designed to put you on that track. You could offer that too. I'm hiring a chief of staff, expectation is that person will take over for me as CEO.

I'm very reluctant to tell anyone what is right or not right. We were told 10 years ago that what we were doing was not right. So my biggest piece of advice to anyone in this space: don't let anyone tell you what's right or wrong. If you have a conviction on what you think should happen, make it happen. This world is full of people who are figuring it out.

When you find yourself wondering if you have the right person as CEO, how do you handle it? Candidly, it hasn't really happened yet at the CEO level. We've had people not make it through the GVP program. The program is working in that regard, both from our perspective and theirs. I'm sure it will happen. The reality is if you have a bench of capable people, someone gets through the program and isn't a good fit, you have other people that can step in. We're very patient. We're not expecting CEOs to hit the ground as the world's best CEOs. That's why we underwrite deals the way we do. We take a permanent mindset. No one comes into this world fully formed, ready to be a fantastic SMB CEO. I sure as s**t wasn't. I made a ton of mistakes. Glad that on balance I made more good decisions than bad. If I were under intense pressure to make every decision the right one, I probably would've messed up.

How do you think about the financial relationship between the individual companies and HQ? Money costs money. If they want equity from Chenmark, it comes at a price, just like debt comes at a price. Do you want to retain earnings to invest back in your business? Great, you should do that, but there's a charge for it. Make sure the return on that investment is in excess of that charge. It's an annual rate paid back on equity injected into the business. Stolen right from Berkshire. They can keep whatever they want. Money costs money.

On backgrounds in our GVP program, pretty myriad. We skew younger because that's where people are getting exposed to ETA, want to do something, and are up for an adventure when it comes to moving. People in our program are probably going to move at least once, if not a couple times. We've got ex-professional athletes, people right down the middle from consulting and banking, and everything in between. We have a guy who started a lawn care, outdoor pest control business, pretty small, sold it, learned about ETA, came into our program. Didn't have formal training in business or finance or consulting. He's awesome.

Are you actively reaching out, or are people putting their hand up? Both. When I run into people, if I think it might be an interesting fit, I make sure they're aware of it. Previous GVPs do the same. In certain circles, Chenmark is a known thing. Writing weekly thoughts for 10 years has been helpful in that regard. We spend time in business schools, the whole business school circuit, just like a lot of the investor cohort. Business school is a classic point where people are looking for their next thing.

What's the difference between people who choose the GVP program versus buying their own business? Better question to ask GVPs. My guess: they want to be part of a team and want to expand their learning period, learning what it's like to be in a business. It's no secret, whether you're searching or operating, that searching is a lonely process. I couldn't imagine doing it myself. Even with James and Trish, there were aspects of being lonely. Being a CEO is lonely. There's a reason for the phrase "it's lonely at the top." S**t rolls uphill until it finds a CEO. There are things you can't talk about with your team. Hopefully, doing it here, it's a little less lonely. You've got other people who've walked that road and others walking it currently. Some people like being part of something bigger.

The other thing is search hit rate isn't perfect. A lot of people sign up for search and don't find anything. If you make it through the program to a point where we think you'd be a good CEO, we're doing deals all the time. I'm not concerned about the deal part. I'm concerned about whether they want to stay in this world and whether we think they're capable of doing the job.

Do you think about CEOs as being good at certain levels? Zero to one is totally different. We don't do zero to one. One to 10, 10 to a hundred, I haven't seen any of our businesses go to a hundred million dollars of revenue. I believe in people's potential for growth. I wouldn't say out of hand that we have to be replacing people because the business has scaled, assuming the business has scaled because they've been able to scale themselves and their teams. That's another aspect of Chenmark I think is great. We're in a position where CEOs can say, you know what, I'm looking for a different challenge. We had one CEO running one company go to running another company.

One to 10, the skillset does fundamentally change. Multiple locations, multiple divisions, 30, 40, 50 million of revenue, it fundamentally changes when you have essentially a CEO-quality person in each functional area. Then your job is to manage, hire, rinse and repeat, and do deals. When you get bigger, you have problems you didn't have before. The bank requires audited financials. It's a huge lift to go through audited financials. So you need a CFO. How many hires is the CFO role going to take to find a great CFO?

There's a huge distinction between one location and two. Communication becomes even more important. You can't physically be in the same place as your entire team. How you communicate, disseminate information, set standards, the clarity you need in the organization, that definitely changes. I stepped into that in my first CEO seat. It was roughly 10 million in revenue but I had three locations, then five. I had to learn to be a CEO of a distributed company that had multiple branches where maybe twice a year the whole company was together physically.

Does the autonomy of your operating companies extend to culture? They define their own culture. Chenmark has our values. Hat tip to James for being the primary architect of that. They're easily accommodating of subcultures. Keeping score, playing the long game, putting the team first, those things can be encapsulated in a lot of other values.

At the lawn care company, when I stepped in, I interviewed everyone in the company. One of the questions I asked: how would you describe us to friends and family? How would you like us to be? I was very surprised about how consistent the answer was across the whole organization. Quality, customer service, education were the three words that kept coming up. I didn't love those core values, I thought we could have punched them up. But there was so much consistency. Everyone wanted to be bought into quality, customer service, and education. Done. We don't need to do an offsite. Those are our core values, and it's been that way ever since.

The first year or two after somebody's in the CEO role, there's a lot of J-curve investment. How do you review CEOs in those first couple years? We do see some J-curve. I wouldn't say it's as pronounced as what people talk about, maybe because we're fairly conservative in how we underwrite. We've gone through what we call the car wash period. The shared services can really help. The technology, replacing IT systems on day one, the gentech team kills it in that regard, they're there at two in the morning setting up the network. Marketing director partners with the CEO to do a scrub of everything and get the company at baseline pretty quickly.

I'm not super concerned about earnings dipping a little bit. I'm focused on, what's the plan? I don't have any hard and fast, you better hit this margin. It's more, are you on top of it? In the first 12 months, I'm coaching CEOs to figure out what those three to five things are that really drive the business. You might have an idea in the beginning, but you don't know what you bought. Get in and figure that stuff out.

Financial metrics, KPIs, no hard targets. We underwrite the deal at certain levels, so there's an expectation of how you're doing relative to that and relative to the prior period. I'm much more focused on trend than "hey, revenue better be this number or else." Companies report monthly with financials. Part of my career was spending two years doing nothing but looking at financial statements, so I'm comfortable doing reviews with the CEOs. I encourage CEOs to review their own performance monthly with their senior teams, which is generally something no small business ever does. What's our management meeting going to look like? What financial information are we going to review? What operational information? How do we do that in a way that generates buy-in among middle management? All that's happening in the first 12 months.

Compensation in the GVP program versus CEO role: it's competitive. Certainly the CEO role, we're structuring on purpose so that if you are committed to long-term capital compounding like we are, you're going to do as well, if not better, than you could in search with no PG.

Last question: how does highly levered SBA debt impact behavior in the early days? When I heard about deals with 95% leverage, I would throw up every single morning. God bless you guys. But it does keep you sharp. I was talking to someone yesterday who told me their SBA loans are now at 11.4%. If that were me right now, if I don't have great opportunities to reinvest in my business at a higher return than 11%, I'd be paying down debt. You're guaranteed an 11.4% return. You're delevering, de-risking the company, and earning 11% all at once.

The levered approach and cash flow being tighter than it otherwise would be is a forcing function to get into the business. The situations where I've seen operators get in trouble is not enough personal touch on revenue. Once revenue starts going sideways and there's leverage, that's when problems happen. In a way, leverage forces getting close to the action.

Something I would've said 10 years ago: don't worry about revenue growth. Focus on everything other than revenue growth. The chance the revenue declines is actually higher when you go into a new business, new industry, and just try to jack growth without understanding how the business functions. There's a saying, shoot for the stars and you might land on the moon. But you can also shoot for the stars and land in hell. You can grow yourself out of cash, or you can grow yourself into a bunch of angry customers because you don't have the logistics or operations muscle to support that. I'd tell people, don't go in and try to be VC scale, shoot the moon. But a little bit of growth, five to 10% growth, really covers up a lot of sins.