Strategics are usually filling a gap. Either the market shifts or the market leader’s service portfolio is lacking. This gap can be filled by building a practice internally or through an acquisition. On this episode, Randell Mauricio, VP of Operations at WorkerBee.TV, discusses how they built a sustainable firm to attract market leaders.
Greg Alexander [00:00:15] Welcome to the Boutique with Collective 54, a podcast for founders and leaders of boutique professional services firms. For those that aren’t familiar with us, Collective 54 is the first mastermind community to help you grow, scale and exit your firm bigger and faster. My name is Greg Alexander. I’m the founder and I’ll be your host today. And today we’re going to talk about the buy versus build conversation and in particular, how to build a sustainable firm with the intention of attracting a potential acquirer at some point down the road. And what I hope to accomplish on this show is to reveal with the help of our role model, which I’ll introduce in a moment, that the buy versus build conversation is happening with or without you, whether you know it or not. And in the event that you do want to sell your firm someday, there’s things that you should be doing right now as you’re growing and scaling your firm to put yourself in a good position to make that happen eventually down the road. We’re very fortunate to have Randall Mauricio. Randall, did I pronounce your last name correctly?
Randell Mauricio [00:01:31] Mauricio.
Greg Alexander [00:01:32] Mauricio. Excuse me. My pronunciation is terrible. I’ve known you for Randall for quite a long time, and I don’t think I’ve ever, ever said your last name. So I’m problem. And he is with WorkerBTV and they are in the process of doing exactly what it is that we’re talking today. So, Randall, would you please provide a proper introduction to the audience?
Randell Mauricio [00:01:55] Yeah, absolutely. First and foremost. Thanks for having me, Greg. And you’re right, we are in the process. In fact, the last meeting I was just on was actually just scratching at the surface of this bigger evolution of our company. But we’ve been around technically 15 years, and I’ve been with this company for, I think coming up to 12 years. I say 12 years because there was a reinvention. The 2008 crash in US significantly hard, but company’s been around for 15 years and we predominantly serve the association marketplace and we’re both a services provider of media production, videos, podcasts, that sort of thing. We aim to be a content machine for our clients and the other division of our company is is SAS and we have some platform services that help associations of that on our mission or our our core competencies and value. We help associations recruit more, retain more and drive revenue. We call those the three R’s. We’ve been doing that for 15 years. And as I mentioned, we’re looking at that next stage.
Greg Alexander [00:03:04] Yeah. All right. Well, very good. So let me introduce some concepts to the audience. So what do I mean by buy versus build? So when a market leader, a potential strategic acquirer, thinks about buying a boutique, they ask themselves a question, Should I buy a firm? Or Can I build this practice myself? And they really analyze that across three dimensions. So the first dimension is how long is it going to take? The second dimension is how much is it going to cost? And the third dimension is what’s the probability of success? So if I was a large firm in the media production space and I wanted to build out a practice that served associations, I would say to myself, okay, well, I could build this practice myself. And that’s going to take, you know, X number of years cost me y number of dollars and I would swag a probability of success percentage at it. Maybe I’ll give myself a 5050 shot or I could pick up the phone and call the good folks at WorkerBTV and say, Hey, you’re already doing this. You’ve been doing it for 15 years. I could get there a lot faster if I bought your firm. It’s it might not be cheaper. But if I consider the time value of money and opportunity cost, maybe it is. And certainly with a 15 year track record, I got a better than 5050 shot at pulling this off. And that’s the key, right? The key is to is to build the firm that you might get one of those calls. Now, you don’t have to accept it and you might say, well, I don’t want to sell my firm, but you do want it to be your choice and not theirs. So I’d love to hear from you as to, you know, what it is that you’re doing with your company that puts you in a position to maybe someday take that call and be able to prove to a strategic acquirer that buying you is better than building the practice internally.
Randell Mauricio [00:05:09] Absolutely. Greg, we’ve been talking a lot with the collector. Talk about, you know, what is a method firm, methodology firm? I really do think that it’s about the methodology, not just the institutional knowledge, but the way that we do things. And furthermore, for an acquirer, the partnerships that we have. And so let’s let me dig into media production for a moment. We have I think we just crossed over the 60 staff members, Mark, and predominantly most of them are here in Canada. And and I get it know, one of the things that we’re looking to do in the coming years is leverage the global workforce. There’s a lot of incentive for doing that. But or 15 years we’ve developed some some unique partnerships that allow us to do things a certain way better, faster, many times cheaper. I’ll give you a really good example right on the onset of our company, the first few years when video production was still a new concept and the association clients, we, we, we serve, they’re not local. I would dare say that 98%, 99% of them are in the US and they’re their business is international. So there’s times where we need to film in the US or in the UK. Here in Asia we’ve developed some partnerships and abilities and acquired some abilities to be able to dispatch the demographers just about anywhere in the world. But we’ve done that over the years. Harping back on two methodology that was in the first few years, in the last recent years, actually, fortunately enough for us, in late 2019, right before the pandemic, we actually acquired a technology. So going back to buy versus build, we actually invested in a technology in a company based out in New York that allows us to decentralize the process of filming. And so we can we’re able to film now using smartphones, iPhone 13, that are capable of filming in 4K. So what that does what that initiates for our clients is you can be in Singapore, your interviewer or somebody could could log in from London. We could have a recorded interview or a podcast conversation just like this that we’re having right now, record that immediately. And at the push of a button, those files are uploaded to our cloud. And later on that day we at WorkerBTV could very well be editing and producing that content. And so to wrap it up in certain partnerships have enabled us to have certain capabilities that, quite frankly, are really unique.
Greg Alexander [00:07:57] You know, it’s a great use case that you just share with us, and I’m going to share with the audience a story. So I was last July 4th, I was in Telluride, Colorado, with my family, hiking and WorkerBTV, was producing some content and they asked if I would be willing to be on the show. And of course I said yes. And one day I came back from a hike and there was a box at my garage and I opened the box and there was this iPhone 13 and a stand in a light and all this. And in 10 minutes I had it set up. And next thing you know, I was being interviewed by a television host and it was there was a little laminated card that said, okay, when you’re done with it, hit this. And literally I hit send, I guess was the button and went on to my my day and had a cup of coffee with my wife. And we went on with the rest of our activities. And it just it struck me because I’ve been around video production companies before and the legacy providers are large firms. I mean, that process, they would have had to have either found a local crew which in a place like Telluride, then maybe there is, maybe there isn’t, but it’s a small town of 2000 people, or they would have to fly in a crew with all the equipment, etc., and it would have been really, really hard. So in this new world we’re living in right now, where everything is decentralized, where virtual everything it seems like is the way to go, virtual office space, you know, you name it. This is an example of a a methodology. And to use Randall’s terms, a capability that a large acquirer might say to themselves, hey, we need to be able to do the same thing.
Greg Alexander [00:09:40] There’s a segment of our market that wants to buy our service in that way, and we don’t have it. So we could figure it out and hire to it or we could go make a deal with WorkerBTV and overnight I have that capability in my firm that’s it’s a great illustrative example to make the point here on developing a capability and methodology that might be attractive to somebody. Now, the challenge here, Randall, is that the large firms, which all of us, members of the boutique tribe, so to speak, compete with the large firms, have to be aware of the fact that they have a gap that needs to be filled. And then when they are aware that they have a gap, they need to know that you’re a best in breed. And whatever that niche is and partnering a buyer, you guys is the right thing. And the best way to make them aware of that gap is to compete with them head on, head in new client acquisition and actually win. And that’s that’s how they become aware of who you are. And they say, geez, how did we lose to that company? I never heard of them before. Maybe I should do some investigation. So has that happened to you? Have you competed with some of the bigger firms? And and have you beat them? And has that got you some attention or is that not happened just yet?
Randell Mauricio [00:11:03] It’s an interesting conversation, an interesting question, Greg, because I dare say it hasn’t happened yet and I’ll give you the context. We’re a bit of an anomaly in that because of the services we provide, but also the platform services that we provide, the SAS platforms where we believe there’s no one out there quite like us. Now, we’ve been seeing in that same zone for the last ten years or so. I think in the last year we’re starting to come out of the woodwork and we’re starting they’re starting to register on our radar where, hey, this actually might be something similar to what we do. And it wasn’t it wasn’t a surprise. We we both know that media production has been around for. For years. We’ve seen over the years how that the pendulum is starting to swing more towards our tech. Right. Ten, 12 years ago when I when I started with this company, by the way, I’m not the founder of this company. But as I alluded to earlier, we’re starting to plan out that next evolution so that our our founder takes on a chairman role anyhow. Ten, 12 years ago, it was I would dare say we were 80% media production. Hmm.
Randell Mauricio [00:12:17] We’ve swung now to about 5050, and I believe it’s it’s going to be 80/20 the other way, 80% tech. And we’ve been very conscious of that. We’ve been very strategic in our staffing and how we’ve structured our offerings and capabilities. We know that there is a certain type of genre that we can produce media for, and we and we’re very clear on that and we try to go after that business. We also know that we are in a global marketplace or workforce, and it’s really difficult to completely to compete with the agencies out there based out of New York, Dallas or wherever, shipping a bunch of work to India or to to the U.K. or to Asia or wherever that may be. So we’re trying to get ready for that. So a long way of saying we haven’t quite experienced that yet, but we’re gearing up for it in are silver bullet, if you will, is to focus more on our tech and hence why we’ve been investing largely in our SAS platforms.
Greg Alexander [00:13:27] And the tech. Just to be clear, the tech is what enables this unique way of capturing video via the iPhone.
Randell Mauricio [00:13:35] That’s part of it, actually. And we’re. Or we’re. Whether it’s a curse or blessing. We, too, just like you, Greg, in your in your prior business, we have a lot of offerings and service lines, but that’s just one. But our our SAS platform is actually video hosting and maybe for for a lack of better terms, I’ll say this, it allows our association clients to do what YouTube will not let you do. And I’ll explain that YouTube won’t let you serve your own banners for a click through. We can’t. YouTube will not let you gather data. We can. YouTube will not outright give you the data of whoever is subscribed to your content names, email addresses. We can do that for you. And if I were to relate this back to our live versus build conversation, we, we over the 15 years of developing this platform. And as you know, it’s it’s a body of knowledge. It’s a body of code and programing. We’ve always had to make the decision, are we going to build this internally or is there something out there that we can either buy or rent or partner with? Yeah. And one of the most one of the more interesting partnerships which we’ve secured is a data analytics firm, basically a data management technology or software. We’ve partnered with this company. If we take that capability layer on top of our existing I.T infrastructure, we’re excited about this because later on this year we’re going to have the ability to manage data preferences and become a rec and recommendations engine, just like YouTube or Facebook. And that’s going to be really powerful for our clients.
Greg Alexander [00:15:19] Yeah, that is powerful. You know, I’m struck by you said that video production been around a long time and it certainly has. But the way that you’re doing it, it’s just a great example of a new way of doing something old. I mean, this whole distributed video capture, the way that you’re hosting some of those examples of how you’re different than of an earlier approach on YouTube. You know, these are all the things that make your methodology, your capabilities attractive and somebody that wants to be able to do that in the future. If you guys do decide that you want to sell, you know, it’ll be an easy decision for them because it’s a it to your point, it’s 15 years of accumulated knowledge and that that is what a strategic acquisition partner would think about. If I’m going to build this myself, am I willing to invest 15 years or am I willing to throw some money at it and get there tomorrow? And that’s the takeaway from from this session, from the membership is whether you plan on selling or not, you want your firm to look great to a larger firm who might approach you for an acquisition. When they think about buy versus build across the three dimensions, how much is it going to cost? How long is it going to take, which is the big one, and what’s the probability of success? And Randall, you’re your role model. Today was fantastic. We’re at our time window here, but I just wanted to thank you for coming on the show and and sharing your story. The WorkerB story. It’s quite a story. And we look forward to the member Q&A.
Randell Mauricio [00:16:57] Thanks, Greg. Appreciate you having me on. This is a pleasure.
Greg Alexander [00:16:59] Okay. And for those that are interested in this topic and others like it, pick up a copy of the book, The Boutique How to Start Scale and Sell a Professional Services Firm. You can find that on Amazon and our website. And if you’re not a member and you think connecting with a group of peers in a mastermind setting would make sense for you, consider joining Collective54.com. Okay. Thanks again. Take care.
Randell Mauricio [00:17:26] Thanks Greg.