#312 - Alex Bridgeman - Host @ Think Like An Owner - Studying CEO's, Data Businesses, & Chief of Staff Roles

Chris Powers: Alex, welcome to the show. I'm excited today. 

Alex Bridgeman: Thanks for having me, Chris. We are excited to be here. 

Chris Powers: Getting to know you over the last few years has been a joy. You're unbelievably talented, and I look forward to unpacking some of that today. A fun place to start would be a tweet that was your second-best of all time.

But it's something that we've talked about and something that we have in common. And it was basically like this. If you want to buy a business, don't start a search fund; start a podcast. Let's unpack that.

Alex Bridgeman: I want someone to do this ongoing idea or thesis to use content to gain credibility in an industry and acquire a business there.

So, the podcast has been helpful in meeting business owners, but thinking like an owner is something other than industry-specific. I'm not just talking to software or data or whoever it's a broader range. However, you likely wanted to buy a company and knew the rough target industry or region. In that case, you can create content for that region, build the industry's credibility, interview experts, and get CEOs on.

And over time, if your show is big enough or influential enough in that industry, you can get sponsors who want to reach those you're interviewing and listening to. And then, if that works, you might get a couple thousand bucks to at least pay for the podcast or help subsidize your search and living expenses while you look for a business.

The core idea is that the podcast is a unique way to meet somebody and get introduced to someone who's busy and hears from many different people, and you need to stand out. It's a unique way to do that in a podcast, which builds credibility differently.

And so it makes you stand out. And so a lot of the time, just standing out and getting someone's attention is a lot of the battle. 

Chris Powers: That makes a lot of sense. It is an entrepreneurship podcast, but many think it is a real estate podcast. This podcast has undoubtedly helped our real estate efforts, whether it's deal flow, meeting people in the industry, raising money, or hiring people.

It's been huge. Are there any other examples you've encountered of folks who have used content, whether a podcast or something similar, to do this? Brent B. Shore is one of the godfathers of using content to buy businesses. But does anybody else come to mind?

Alex Bridgeman: Yeah. Brent B. Shore is the best example. First, because he believes in it so strongly, like his market, his background is in marketing. So he knows the content well and how to hold an excellent conference for a while. But he's also just been doing it for a long time. So, we can see, down the road, okay, Brent's doing this for, what, 7, 8, 9 years to this point.

So, he's been doing content the whole time. So, what does this look like if I keep doing it and it continues to compound? What does that eventually turn into? Brent is the best case study for that. There are smaller examples. Chen Mark has a weekly newsletter that they put out. That's pretty popular.

They also go on many other podcasts, including my own, and talk about Chen Mark, their businesses, and the GVP CEO program they run. There are examples like that, but there are a few examples I can think of folks using content to acquire companies. Some folks will use, you know, larger Twitter accounts; Alex Ramadi, I can think of as someone like that.

The lack of plentiful examples is why I believe the opportunity exists, and it's so exciting, and it's that next layer of podcasting. So, today, a lot of podcasts are monetized through advertising. Still, what's more valuable is the couple thousand bucks you get through advertising or perhaps more if you're a more extensive show or buying a multimillion-dollar business that grows. Then, the podcast helps you recruit into that business or find other companies. That seems like the apparent monetization down the line. And I see fewer people doing that. And I want someone to go out and do it. And so I should do it myself here. 

Chris Powers: I love it.

We could unpack that notion of content. A bit of angle to this: last week, I was asked to moderate a fireside chat for the founders of @ hotels.com, which, for anybody listening, was the most successful tech IPO of all time. One of the things I asked him was how they grew the business and liked it.

Without question, he said it was all PR, like back then in the early 2000s, he would get on this weekly. It was a podcast then, and he would talk about the business. And as soon as he started taking the PR angle rather than the advertising angle, he's like, we could not; the phones were ringing nonstop.

And so his whole message and that little segment of the conversation was if you want to attract loyal followers and customers. Do more great PR, not great advertising. He just thought it was infinitely better. And the podcast, I'm sure you know, this has proven true, whether it be guests that have been on here that have had remarkable stories from people that they've met from being on here or vice versa for me, like the, the doors that continue to open because one podcast is authentic to, you're not selling.

You're just having a conversation, and then people are listening. It just creates a lot of warm introductions that nobody feels threatened by. So, it's been an incredible experience, and I agree with your thesis.

Alex Bridgeman: It's very conversational, and it doesn't, you're right. There needs to be a precise, apparent sales angle.

And your point around the story around @hotels.com and PR makes me think that content is more about letting folks know what you're doing and just marketing your mission, and the more people that know about what you want, what you're seeking, and what you care about. More folks can help you in various ways you can't predict.

I think the podcasting and content and putting yourself out there, putting your mission out there and sharing it, it just gives you this kind of call option on serendipitous opportunities that can happen to you and folks that you'll come across paths with you or hear about your show in some various way or a friend forwards it.

And so you now get to talk to this person that otherwise you never really would have been able to speak with. It's incredible. 

Chris Powers: It's incredible. 

Okay. Let's talk a little more about how the podcast has impacted you. So you've had yours now for what, four years or three years?

Alex Bridgeman: We're almost five years at the start of December.

So, December 1, 2018, was my first podcast with Trish Higgins. 

Chris Powers: And so what comes to mind, we can talk about your chief of staff role, or if you want to dabble in some other things, what are some highlights that have come from you running this podcast that maybe you expected or didn't expect? 

Alex Bridgeman: It's helpful to start with the podcast's mission.

So, back in 2018, I was in college, so that was the fall of my senior year. At that point, I didn't have a clear sense of what job I would get in—search, small business acquisition, or just small business. Generally, I didn't know what that would be, so I thought, okay, this podcast will help me meet interesting people, and this will be just if I keep doing that, if I, you know, so far, if I've met interesting people, good things happen if I create this podcast, I presume that that will continue to happen and good things will come of it.

I wanted to meet folks who are doing this. And I just continued doing it through college. My episodes were monthly, and I was doing the editing myself. There were no sponsors. So it was a very, very low budget. Eventually, around August 2020, I was going to get married. And the podcast had grown enough.

And at the Folks that I knew, the number of people I knew in this space was growing enough that I felt like, okay, I can probably do a weekly show, and I wanted to do weekly because monthly is brutal. Having a consistent listener base with a monthly show is hard because people need to know when your episodes come out.

As you can say, episodes are out the first of every month, but the first-ever, it could be a Monday this month, a Wednesday next month, and it could be more predictable. And so it's better to have weekly. That's the right cadence, at least for me. And so I wanted to do that.

But to go weekly, I knew that I probably needed not to do the audio editing anymore because it took me five to six hours per episode to do all the editing and production. That was while working a full-time job. And so I don't recommend that if you can avoid it. I had someone like Johnny who joined us and thought like an owner down the road.

But the first thing I did was find a couple of sponsors in August 2020 who supported the show's mission. And part of it was I wanted something like investing, like the best for small companies and CEOs of small companies. And I didn't find anything out there, so I created it myself.

And so, the pitch in August 2020 was different from this. There is only one podcast with this audience, primarily your customer base. So it would help if you sponsored this show, help me get to weekly. And it was almost a venture investment for them; turn this monthly show into a weekly show, and your investment, while above market today, will match demand down the road as the show grows and leads come your way and whatnot.

On Thursday before my Saturday wedding, I left my full-time job and went into marriage unemployed. Her parents were very supportive. Her dad's an entrepreneur. So he, he got it. That was both a fun and scary time. I would not do that again today, but I'm glad that I at least did it once and realize, I think after the wedding, like the week after the wedding, I was like, Oh, this is just, this is what I do now.

I'm there's, it's all on me to make this work. It was both scary and exhilarating to realize that you're now more in control of what you do and work on, doing something super fun and engaging and meeting exciting people along the way. And so one of the things that happened was about a year and a half later, in March 2022, I got to know Clayton Collins, the CEO of HW media.

HW Media is a housing media business for mortgages, real estate titles, and everything down the line. It's a media business with housing, wire, actual trends, and other brands. But he wanted to take this media business and add data to it. So create a Bloomberg of sorts for housing, where you have the Bloomberg media business and the Bloomberg terminal, and they work together.

I have flown between the two, where I think of a Bloomberg article referencing the Bloomberg Terminal. Now, as the reader, you are aware of the Bloomberg Terminal. You should reach out and have a conversation and say that that lead for the Bloomberg Terminal had negative customer acquisition costs because the media business made money by giving you that article.

And so you have this Negative customer acquisition cost vehicle to get customers into your data business. And so we thought, okay, we have this media business. Why don't we do the same thing? Find a data company that we can plug negative customer acquisition costs into and accelerate the growth of that data company and be a valid value add, you know, acquire for that business.

And so. Hearing all of this, I was like, oh, this is super exciting. And my goal is to run a business one day. And we structured the chief of staff role as an MBA in operations. I don't have an MBA. And so I wanted to have that experience with any small company on how they grow, what a growing one looks like as a CEO, and run a management team.

And learn all about, you know, corporate development and deal processes and what have you. And so I joined on March 22 because of the podcast; that opportunity only happened because Clayton saw I was just as passionate about media and data as he is. And we connected on that, and he brought me on as chief of staff.

And so last year, we could talk about the chief of staff role itself and why it's becoming more popular or seemingly more popular. I'm in a search bubble. Chiefs of staff are famous here but nowhere else. But then, I remember thinking about the chief of staff role for the first time.

And you think of chief of staff as something in government like they're going to the white house and having meetings with the president and senators and what have you. And that certainly exists, but there's a growing chief of staff role amongst startups doing it a lot, too, and Silicon Valley. Still, more, and you're seeing it in these small growing companies where The CEO has a lot of projects that they care about but only has a little time and space in their schedule to do everything.

Or they have something that they're focusing hard on. Still, they could use some extra support, and they want a peer-type hire who can come in and think similarly to a CEO and take on projects from the CEO's perspective versus as an executive assistant or as a team or department head. The other advantage to a chief of staff or other design of the role is any different department or individual contributor has a powerful perspective on what they do. Still, they often need clarification on what's happening across the company and other teams.

And so if you're the CEO trying to get a sense for what's happening, you're going to get all these different perspectives, all of which are true in some ways but maybe have missing facts that don't overlap. And so a chief of staff can come in and give you a comprehensive look, view, and understanding of what's happening in a company and be a sounding board for ideas and things you can work on next with them.

Chris Powers: What's your process for being in the know so that you can give that comprehensive look, like how do you, how do you go about your days, weeks, months to make sure that, that you can fill that gap? 

Alex Bridgeman: So last year, that was a closer description of my role. Last December, we bought a housing market data business, and I stepped into that business and took over the sales function for the licensing business there.

So, my role has become much closer to an individual contributor versus a chief of staff; however, last year, during that time, it was much more of a traditional head of staff role. The critical part was having one with department or team leaders across the company, finding ways and excuses to work together on something, and hearing how they think through problems or what challenges they're facing and how I can be helpful there.

Let me help you with things because I can jump around and be a free agent within the company, permitting people to let you help them with specific projects. And that enables you to understand how different teams work, what they're working on, what they're focusing on.

And that gives you a broader perspective within the company. And it's meant to be additive to the CEO. So, the CEO will have their means of communication and understanding of how the company works. You're supposed to add perspective. You're supposed to keep the CEO's transmission, of course.

Chris Powers: Were you the first chief of staff they had hired? Or were you okay? So, how was it received amongst the team, given that you were the first and, like, was everybody, all these one-on-ones that you started sitting in on? You could give a little color of what those first few meetings look like where people were expecting them, where they are a little caught off guard because I'm getting at this chief of staff role is becoming more popular. Many folks you'll see over the next decade will continue adding this role to their company. And we could use this as some lessons learned, but for somebody that will hire one right out the gate, like.

How was it integrating with the team like right out of the gate? 

Alex Bridgeman: most folks weren't expecting me because there wasn't a formal process, for there wasn't a long recruiting process to whittle down the candidates for chief of staff and then pick one. It was more fortunate that Clayton and I connected and decided this would be a good fit for the role.

So, with the typical hiring process, many folks know you're looking for this role. You're going to fill it. Here are a couple of candidates. Many folks get to talk with them, and then there's a hire. And so there's lots of time for everyone to prepare for that new role. That was different with my HW media hire.

And so I joined a management team, introduced myself, and then started having one-on-one with folks and sharing what, you know, the best that I could articulate at the time, what is my goal here? What am I, where can I be helpful? And what is my like, how do I add value to this, this team?

And it's a nebulous role. There's no clear job description or day-to-day duties. I didn't have any direct reports, and that's intentional because the idea is that the one thing you want to do as chief of staff is to have time in your schedule to take on projects quickly.

So if something happens, you have this space with no operational day-to-day things you're working on, and you can take on projects faster. And so I didn't have a straightforward, even set of tasks to share with folks at that point because it was so early on. And so it took probably a month or so for folks to understand what I was there for, and that I was there to help and add value and not, you know, threaten any existing project or what have you.

I wasn't coming in because someone else needed to do a better job. I was there to help and move things forward and not take projects from others or anything like that. That took a little bit of time. 

Chris Powers: Can you give an example of a project that you expected to have and then maybe a project that You didn't expect would land on your plate?

Alex Bridgeman: The project I was excited about out of the gate was creating a mobile app for housing buyers. So many media businesses, such as the New York Times and Bloomberg, will have mobile apps for iPhone and Android for you to flip through their news articles. A couple of companies create those well, and we'll effectively take the skin of your website and mobilize it into this app. And this would be a good project. It seems straightforward. Let me start doing this. And, of course, I'm still waiting to bring new ideas to anyone here. Like every every picture I have has been thought about before. And that's the thing I'd like. I didn't fully understand that at the time.

And so I went to our VP of product and said, Hey, can I help you build an iPhone app or put one together? And here's a list of contractors or developers that do it well. And here are some examples of what we could do. And he said, Oh, we have done this. We've thought through this before. It doesn't work for these reasons.

These other projects are more important. I was like, this makes sense. But the core lesson there was every idea has been thought about before. There's nothing new that I'm thinking of necessarily. Around the edges or connecting specific dots, but not in a like, Hey, we should create a mobile app or do this new conference.

Those things are less novel to folks. And so they have generally been thought through before and placed in a particular priority. Has this been thought about before? And where on the priority list does it fall? And that determines whether I help them with that project versus coming in.

Chris Powers: So they said we will do an app. There was a team going to work on what your role was in that just communicating to Clayton what it was like, what was going on, where the progress was, and how it was going. Or would you like to contribute? Were they asking you to do things to help push that project forward?

Alex Bridgeman: Communication certainly, but leading discussions with that developer would be a part of it. But again, this is a project we still need to do. So, we got shut down very quickly as an example of a project I thought would fall on the priority list and lost here.

It was something other than what we pursued, but there were other projects where we wanted to understand who the different data companies out there were and which ones fit best. And I knew that that would be a big part of my role because I was excited about that. I didn't fully grasp that we were doing all these market maps and other things.

So that was a project that we took on. Another project we took on was writing a white paper, about 30 pages of Research, on how media and data companies combine effectively. So, we took case studies from Bloomberg from Freight Waves. I know you've had Craig Fuller on the podcast before.

He's the best modern example of combining an influential media and data strategy. And so we've taken a lot of lessons from freight waves and have just asked a bunch of questions over the last two years to that business and learned a ton. Still, that was a core example for that project, but the project was just a matter of these 30 pages; we're going to talk about how media data businesses combine. Why are they effective? Why do they help each other? What's the flywheel between the two firms? How do you introduce a media audience to your paid product at the bottom of the funnel? How do you know what kind of data products work well?

What industries do you focus on? So, if you do this from scratch and search, should you go by the media business first? Should you go by the data business first? How do you complement the two together? That was a big project that I had a lot of fun with but didn't see coming, but it quickly became a good project for an asset for us to use while thinking through our strategy and then through the acquisition of Altos Research.

Chris Powers: You said you love data companies. You started hitting on why. Let's expand here. And so I'm going to retell you what I heard, which was these nice flywheels are, you have people consuming your media. They already like you and trust you. And through that, you can weave in your data products for sale.

And so people are reading media. They love it. They like it. Oh. I see this data product that this company showing me media also owns. I should jump over and start using that, too. And the data company didn't have to pay for that customer. They made money while acquiring that customer.

Is that fair?

Alex Bridgeman: 

Yeah. And in this concept of. Content used to market a paid product. It certainly isn't novel or isn't just in media and data. You see, individually, we both had Nick Huber on our podcast. Recently, he's sent a lot of people to support Shepherd. That's an example of taking a content funnel and audience and introducing them to a paid product.

They would be interested in using it and increasing the value of that paid product in that business through your content. Same thing for, you know, a prevalent one with health podcasts is you have, are a health podcaster, and you own a supplement business or, you know, workout business of some kind or protein powder business, whatever.

And so the two feed off each other. And the same thing happens with media companies and data, with fray waves and blueprints being the. There are probably cornerstone examples that I can think of, but data companies are the most significant companies we've ever made. If they're a proprietary data set, a phenomenal example is a company called Smith Travel Research.

So, a company co-star acquires them. A handful of years ago, the data they gathered started as a consortium of hotels, all contributing data on occupancy room rates. And so they could have their competitive intelligence for how to price their rooms or how they were performing relative to their peer set, whether that peer set was when they're in the same city or comparably sized cities. Smith travel research, STR would give you a score, and that score in this data became so ingrained in the industry that that STR score became a part of a hotel manager's performance compensation. So, part of your performance review as a hotel manager was what was your STR score, and did it improve?

Did it change? It has become so embedded that you cannot operate a hotel without STR data. And it's just a phenomenal example of a proprietary data set. STR has access to that data. It's not public. It's not been drawn off the web, like stock market data, and organized cleanly, like SEC filings.

It's proprietary and has a clear use case and value set. It ties to revenue for those hotels, and hotels use STR to optimize their income and make money, which is a fantastic use case for data. And so companies like that are unique and hard to replace and compete against. The challenge with data companies is there are few of them.

So, another company wanted to create a competitor to STR and have all of this data on occupancy, pricing, and what have you for all these hotels. In that case, there's no reason a hotel would choose the new competitor versus STR because STR has so much more data. It will probably have much of the same data as the small competitor.

And so, with any of these industries, you will only have one to two leading data players in that space. And this can be hard for anyone else to compete. Think about credit card data being vend to hedge funds. There's only a handful of people who need to be selling credit card data.

Cause it, ultimately, you're just selling facts. You're selling the same facts as the person next door. We only need a few companies. You know, as opposed to software, you can have hundreds of different ERP software businesses, but data generally has only a couple in each given space. And so it makes them harder to find and start, but when they have a competitive advantage, it's a fantastic business.

Chris Powers: How are these businesses usually set up and structured? And do they have licenses with sure folks to get that proprietary data they need regularly? Like, what are, how does, what makes up a data company? What are the different functions, and how are they usually set up?

Alex Bridgeman: So in gathering the data, there's.

A handful of ways. And the paper I referenced most is that Abraham Thomas wrote. He founded Quandl. He wrote an article called The Economics of Data Businesses, which best explains how a data company works and why it creates value. And there are many reasons for how these companies gather data.

They can license it from others. So, certain data vendors have data sets. They'll approve that from those folks. You don't own and control the data, but you can get access to the data. There's public records data, think property level data, or public filings, like financial and SEC filings. So you can gather it publicly.

There's Proprietary, so you have access to a bunch of different proprietary data sets for either from this group of customers, perhaps. One example is FreightWaves, which gathers data from software platforms that trucking companies use to price their loads. And so they can get this pricing data directly from the software business, anonymize it, and clean it up a little bit.

But that's an example of something more proprietary and less public. It's not public out there. You can grab it. There's pay-to-play, so you could pay for data, pay to complete surveys, for example, or pay to pull in specific data from companies. You'd have to go individually, one by one, so it would take some time.

But there are lots of ways. There's a whole bunch of others, too, but at its core, a data company creates value when it has a data set that generally helps make a company more money or save on costs. And has some proprietary edge that will keep that data company around and valuable for an extended period; it's harder to create a lasting data company just relying on public data unless you're taking some unique angle or mixing that public data with other proprietary data sets and the two become more valuable.

One example of this is a company called, uh, SafeGraph. One thing that they do this is Oren Hoffman's company. He has a podcast called, uh, World of Dask. That is a fantastic data podcast. It also talks about the business of data, which is why it's so interesting. What they do is they tell you that's point of interest data.

So, if you are a retail location and a shopping mall, you can buy data from a safe graph that will tell you how many people walked by your store, how many people went into your store, and how many of those people will purchase from you. So, they are taking a couple of different data sets. So, they accept credit card data, which has been around for a long time.

And it isn't that novel hedge funds have been using it for decades to estimate things, but they took the credit card data and added data from cell phones and cell phone locations. So the two combined created this whole new business use case for traffic and then conversion rate within a store. 

And so that's an example of something that's not proprietary. This credit card data isn't necessarily proprietary, and cellphone data probably isn't either; even though it's relative, it's newer than credit card data. However, the two combined created something exciting that is helpful and valuable. And they now have this vast data team that's become good at analyzing and creating value.

So, you'll generally have a team that helps ingest the data. And often, this data needs to be cleaner. It needs to be in order, and there are duplicates or messy data. And so you might have dozens of people whose whole job is to clean the data as it comes in. Freightwaves has a couple of dozen people, and Research has about half a dozen folks who focus on the data and making it clean and organized.

And so that's a huge piece. And then, of course, you have sales and marketing teams and all the typical functions you'll see in a business. But the data side is fascinating to me.

Chris Powers: You're getting me fascinated by it. I'm going to run through a wall and buy a data company. So I got a few questions.

Are we everything we do now in society? Like we are creating data for others. Almost every movement we make. My iPhone right here is giving data by the day. Somebody asked me the other day, like, do you like privacy? And I was like, of course, I do. And they're like. No, you hate it. And I was like, no, I don't.

I love it, and they asked why I carry an iPhone everywhere. And then, I can't remember the number, but it tracks a thousand data points on you almost every time. So. Like you said, it was whatever safety page or what you call it?

It's a safe graph, but is it fair to say we're moving into a world where just about everything we're doing creates data for somebody to do something with? 

Alex Bridgeman: I think so. That doesn't mean that every data point has value. It just means that there's more to measure. There's more that is to be measured.

And it's up to us to decide which data sets combined have value. One that I had Brian Cormack, who's a Venture capitalist who invests in data companies, and there's a business that he's invested in that's an API between cars with GPS trackers and the manufacturers or the rental car owners or whoever. They can track the location and mileage of their vehicles, and are they driving well? Is their maintenance going to be required here pretty soon? What's happening with the bit with the car? So that's an example of using tracking data and now coming online and being available. Still, one of the exciting things about this time is that, as you said, we follow more and more things, and it's giving us data sets that we didn't have before that weren't available, even if you wanted them.

Daily satellite imagery is its whole use case of data that is now coming online. They didn't have before. So you can look at all the fields in Nebraska. My wife and I just moved from Omaha, Nebraska, to Boise. But if you want to estimate corn crop yields, you could use satellite data to help you estimate how much Crop yields will be in Nebraska this year, and that's data that is coming online for the first time in the last decade or so.

Brian Yormack also invested in this company that creates these like onesies for babies. And it has a health monitor. So your baby can sleep at night, and it also has a camera that can sense movement. And if your baby is turning over, sleeping, or awake, it gives you this whoop, sleep data, but for your baby now.

And so you can have all this information on how your baby's sleeping? Is he sleeping through the night? Is he doing well, or is she doing well? And so that's a data set that you didn't have before that didn't exist. Same with whoop, like that's data we didn't have before, but now many more folks have sleep trackers.

And so whoop as a company has, has sleep data on, I don't know how many customers they have, but thousands or maybe millions of customers one day. These whoop trackers track their sleep, so we'll see what you know as a 30-year-old, 40-year-old, or 50-year-old; what is your sleep benchmark against your peer set?

How do you rank amongst 40-year-olds for sleep? Are you in the top 1%? What can you adjust? What have other folks noticed that helps their sleep, alcohol exercise, whatever? And so stuff like that is going to be exciting, but a lot of that's happening because there are data sets that are coming online for the first time that we didn't have before that didn't exist.

And that's exciting.

Chris Powers: From your view, does AI impact the data world? And if so, in what ways? 

Alex Bridgeman: I think, at the very least, AI is helping to clean up data and can be real helpful in some of the there's a massive workload once you have data in cleaning it up and making sure it's not messy or disorganized, appropriately formatted.

Many AI tools could be helpful in that process because that's typically a very tedious and menial process with many parts that they could automate or at least have an AI tool come in and help you do things faster. So, looking to check to make sure that these specific properties have the correct address or the bed bath, you know, make sense, it doesn't make sense that there'd be a four-bedroom house with only a half bath like that seems like an error of some kind AI might be able to help you find that error faster so that you don't have to spend all your time scrolling through or looking around and doing all these different, V lookups and whatever you could have an AI function help you identify those faster. You could start solving them more quickly.

There are ways, things like that, that could be helpful. I've not studied AI in data beyond that, though. There are ways that AI could help gather data. I am still waiting to see examples, though.

Chris Powers: You've said you want to buy and run a business. And you've always said that data is what fascinates you.

Let's talk about what buying the data business you're looking for might look like. What are the criteria? If you saw it come through, you would say, boom, that's a data business I want to buy.

Alex Bridgeman: It has to be a certain size data companies that are too small companies that are small, often stay small, or are small for a reason.

If you can find data business that has reached a certain amount of scale, it could indicate that you're seeing a more oversized product market fit.

Chris Powers: Real quick, I don't mean to interrupt. What might the scale look like in the data scale?

Alex Bridgeman: I'm thinking more of a revenue standpoint.

Five million in error or above, or 10 million in error and above, if you're too small, it means you usually still need to establish that competitive edge. And if you're more prominent, there's a stronger indication that you have a competitive advantage. At some point, we talked about how, in any given space, only one or two data companies make up most of the market share.

That's true if you're looking at a data company to acquire, but the other part, maybe the more critical, is that it's a proprietary data set. It needs to organize public data or something easily scraped or pulled from various sources that another competitor could replicate for cheaper.

Ideally, you're looking at a data business with access to a database that they own or own access to. And because that's going to be your competitive edge over time. Otherwise, you will be fighting uphill versus competitors who can do it cheaper, faster, what have you; that will be a hard uphill battle.

And it's much easier to build a business around a data set you own and operate. 

Chris Powers: How do you value them?

Alex Bridgeman: They're valued similarly to SAS companies. They have a lot of similar characteristics to SAS. There's recurring revenue. They're often subscription-based. A lot of them have multi-year contracts. You're giving an ongoing data set.

So there's a product that is ongoing, similar to SAS. And you're always making improvements. So, most of the time, there is a subscription business. And so they're going to be valued like SAS businesses. And that's going to be a factor of how large they are, how fast they're growing, whether it's a most of the time it'll be some ARR multiple of some kind, potentially EBITDA if it's cash flowing or what have you.

But most of the time, we've seen them be ARR-based, similar to SAS companies. So, a lot of the Research around SAS applies to data companies. 

Chris Powers: And I'm assuming they're just really sticky because once a company, like a customer, starts building their business using the data coming from this data company, and you said there's usually one to two players, it's pretty sticky.

If the business keeps getting built around that data they're buying from, call it your company or whatever company it's, it gets stickier and stickier with time. 

Alex Bridgeman: Yeah. Mean, take Altus research, for example. Their housing market data is the most comprehensive on the market. It's not affiliated with any MLS.

MLS has most of the housing data. That's just where realtors will post our list of homes for sale. But there's course. Other places that folks will list, if you're a, you're, if it's for sale by owner, you might not list on the MLS, but you'll still have a house for sale. And so Altos has a much more comprehensive data set, which allows you to have this competitive edge where you are the only vendor with that kind of complete look.

Once a company has been taking your data and inaugurating a product, whether it's an AVM, Automated valuation model, or rental valuation model, it's not something you can take out. It's become an ingredient in that product. You still have to, of course, find the right customers who can use that data effectively. But it is tough and sticky to take out once it's in that product or company.

Oren Hoffman has this excellent phrase that I love. He says, as a data company, you're selling butter to pastry chefs. And you can talk about how high quality our butter is and how amazing it is organic. The cows will roam free over this hillside their whole lives. We gave them delicious grass and whatever, so the butter is fantastic, but it will only be precious if the chef knows how to work with high-quality butter.

If the chef is not very good, your butter will go into this kind of mediocre croissant or something. So you have to match the high-quality butter with a chef who understands how to use it and has the skills to use it effectively in the end product they sell. 

Chris Powers:  I love it. If you bought one, would your goal be to create that flywheel where you have a content business alongside it?

Or could you own a data company as a data company? 

Alex Bridgeman: To go with the flywheel approach of having a media and data company, buying the media business first is most important. Buying the media business first means getting the audience, and you can work with that audience and understand what they eventually want.

Otherwise, you're buying a data business and need a clear direction on which audience will fit well with them. Whereas Once you purchase the media business first, and ideally you're buying a top, you know, one to three media brand within a given space, it's hard to go by the number five media player in a room and have a sustainable business because when the tide washes out in the next economic cycle, all of the advertisers are going to cut budgets wherever they can. Still, They might hold onto their budgets at the top player because they know that that will be where all their return and spending will primarily come from.

And so if you can buy that top one or two media brands in this space, you understand you have a broad audience to work with to understand what products. They would be most interested in using whether that's a data product or something else. And then, you buy or build a data company from that audience or from that audience.

Chris Powers: So, is that the route you would prefer to go? Or do you, would you buy a data business and own the data business? 

Alex Bridgeman: To this point, I would buy and run a data business, but I'm very open to the other way and going the media and data route to ensure there's value in both.

Chris Powers: So if you did that, though, just bought a data business to own a data business.

I'm probably asking dumb questions, but they're somewhat valid. Are you buying that? And then you're just trying to find more customers like that's how you grow it. Or are you buying it and trying to create new data sets and sell it to existing customers? Or is it both?

Alex Bridgeman: There's a whole bunch of ways, but you can, of course, grow your existing customer base for the current product that you sell. But you may also discover verticals around the edges that use your data somehow, and you can build a product for them out of the core data set you already have.

If you have hotel business data, that data is also valuable to hedge funds. So, there's probably a version of the data that you could sell to a hedge fund. So there's any data set where there's value for one party, value for another party, but in a different way.

And so there is expansion beyond your ideal customer profile. The exercise we're going through with Altos is what our ideal customer looks like for this data business. Focus on that, learn how they buy and why they believe. What data they care about, get good at that ideal customer, and then only expand to others and see who along the edges is exciting and could work with, with this data and then grow from there.

So there's a whole bunch of, I'm fascinated by how data sales teams and SAS sales teams work. And that slow expansion over time into other verticals. It was exciting, but that's what you'd end up doing. 

Chris Powers: Let's bring it home on that note because that's a note we have.

So you. You're fascinated by how these sales teams work. Why? 

Alex Bridgeman: I thought sales would be dull, but I've been proven wrong. 

Chris Powers: So what did you, what did you think it was, and how have you been proven wrong? 

Alex Bridgeman: It would be monotonous, not very interesting, boring, gritty, and with little payoff.

It's not sleazy, but it's just not a very comfortable thing to be doing. When we bought Altos, this new licensing business selling the raw data needed more structure and dedicated sales resources. And so we quickly saw that this was an opportunity for me to help lead many of those sales efforts.

And so, coming in, I realized, wow, sales is super interesting because it activates every part of your brain. It's the creative. How do I reach this person? Who's the right person to talk to at this company? It's like the conversational piece, like podcasting, the interviewing and talking to someone new.

How do I learn about this person who I'm this prospect? How do I know what they care about? What problem they're trying to solve? And how do I like, in the back of my head, trying to match them with a product that we have that fits their use case best? If you want the contracting and like the fine-tuning of, you know, any legal documents, you have a contract you're working with.

And then it's the, the joy of closing a deal, except you're, you're not just closing one deal on, you know, buying a business, you're closing a deal on, you know, hopefully, a couple of times a month on different data deals that you're, you're selling. So, and that's just the fun, like similar to podcasting, where you develop this network of friends and peers you admire, it's the same thing with sales, like these.

All the folks you're talking to most of the time know each other. And so there's interest or, this person knows this other person at a prospect or client of ours, they would be interested in talking to each other. I even started a podcast for Altos called House of Data about how housing companies use data.

And that has led to helpful discussions and new sales opportunities for Altos research. And so the Sales function has been an enjoyable thing. I have a very storied seven-month career selling data, but it has been much more fun and engaging than I thought. 

Chris Powers: Were you given a blank canvas for setting up the sales funnel, or was there already some structure you could take with you and run?

Alex Bridgeman: There was loose structure. So, we use HubSpot. And so we would see leads occasionally or folks selling the other half of our products. They would be talking to somebody who is a better fit for data licensing. And so they would send them to my side, but there was no prospecting for new licensing clients.

There needed to be someone spending their full-time effort. Just on working with licensing clients, it was either the founder and then the founder hired a technical salesperson who could come in and help support the founder in some of those conversations. But of course, as a founder, you're not just doing one thing.

You're doing, you know, ten things throughout the day to keep the business running. You can only focus a little bit of time on sales. And so, coming in, I could focus all of my time on sales and start developing more of a playbook on how we go about prospecting, working with customers, handling red lines for contracts, pricing, all these other pieces, and putting together a more comprehensive sales strategy.

And that has been a ton of fun, more fun than I expected, but still a lot to learn. It's still a very new part of the business. It would help if you were ready for the way sales continue. It's always an evolution, an evolving team and process. Your business is growing and requires a different structure for your sales team.

You'll eventually bring in a VP of sales or a CRO as you become more successful. So, there's always the next step to take as a sales team. And so that kind of the never-ending game part is also a lot of fun. 

Chris Powers: We've covered why starting a podcast is important. We've covered the chief of staff.

We have covered data businesses, which was fascinating. Thank you for the last 30 minutes. I learned a lot. We will pivot and bring this home on more of a fun topic because I am still waiting to see this one come across my desk. But you are obsessed with carbonara and making it. Okay, what's happening here?

Why is this the thing? 

Alex Bridgeman: So there's two food theories that I have. So I do love carbonara. It's fantastic—only a few folks. I have yet to see it done. It could be better done because you're taking this raw egg yolk and mixing it into the noodles. And so you're not trying to scramble the egg; if it's too hot, you'll run the egg and ruin the texture.

And so you have to get the temperature just right. And so often when you serve this meal, it's not piping hot. So, it throws folks off sometimes. It's delicious and creamy. I use that as a this is my first of two theories. So, my first theory is to determine if you will evaluate restaurants' recipes.

So, if you like cheeseburgers, a cheeseburger is the go-to that you can have at multiple restaurants and compare the two pepperoni pizzas. One, like, I'm going to try your pepperoni pizza. If you do that, well, you likely do everything else. Well, for Italian restaurants, it's carbonara.

Suppose you have a delicious carbonara. I'm confident the rest of your menu is also good, but that is my benchmark. That is how I evaluate how the rest of the menu may likely go. My other theory is the chicken theory is what I call it, which is if you're at a restaurant and they have.

Chicken and steak or pork and steak or what have you? Get the chicken or the pork because they must work harder to sell that dish. Like steak, you can put salt and pepper on it, put it on the grill, and sell it. It will sell all day because everyone loves steak, and it's straightforward; you have to do nothing about it; nothing special needs to happen for you to sell tons and tons of steak in your restaurant. However, for someone to see steak and chicken on a menu and to choose the chicken, it's because they dress up chicken; there will be more herbs and seasonings.

It's likely going to be. Breaded in some way or added texture or more sauce and cream. And they're going to do more to the chicken to make it taste good so that it sells on the menu. And so if you've never been somewhere before, get those slightly lesser meat because they'll often have to do more to it to make it sell.

And it will be a more flavorful meal than the steak. 

Chris Powers: If we look at the chicken data charts a month from now, you'll see a spike hit this day. And it's because the millions of listeners who listen to this podcast are about to go out and order chicken. And you're going to see steak sales plummet.

That's true. It's hard. You have to go out of your way to screw up a steak. But chicken's pretty bland, so you must work to make it better.

Alex Bridgeman: Yeah, especially pork chops, too. Most folks don't like pork chops, or many don't like pork, but pork chops are; I don't see them often at restaurants. And so when I see a pork chop, I'm intrigued. There's a reason they put this on here next to a steak, where those are often. And those are similar dishes. So if I'm going to, I don't look at a pork chop; maybe I have one recently at a restaurant, which was delicious and fantastic.

And they added all these different herbs and like they had tomatoes and stuff to it. It was amazing. I had this like mango chutney, and they had. They worked hard to make that pork chop good, which was delicious. 

Chris Powers: Alex, this has been great. If people want to contact you, how can they find you?

Alex Bridgeman: Yeah. Thank you for having me. My podcast is to think like an owner. It's focused on CEOs who run great businesses. You can find it anywhere you get podcasts. And if you want to contact me, I'm on LinkedIn and Twitter. Either of those will be easy to get a hold of. And so I'd go there or my website, TLAOpodcast.com. If you want to go that way, there's a contact form. 

Chris Powers: Cool. Alex. Thanks again. 

Alex Bridgeman: Awesome. Thanks, Chris.