00:00 Introduction
Jack Jostes:
Have you ever thought about building up your company to a point where you could sell it? It’s something most entrepreneurs dream of. And today I’m excited to interview one of my best friends, Dave Summers, about how he successfully built up Urban Energy Group and sold it. And since I've known Dave for nearly thirty years we talk about some of our childhood experiences, how we got in trouble as kids and why many troublemakers might end up being entrepreneurs. We talk about some of the books that we’ve read and the key systems and processes that Dave built that helped him eventually sell his company. Plus what is he up to next. So check out today’s interview to hear Dave’s story.
Jack Jostes:
Hey everyone. Welcome back to the Landscaper's Guide. Today I'm at about 2,500 feet in Leavenworth, Washington with one of my best friends, Dave Summers, who I've known since I was like nine. And, I'm excited to interview Dave because he just sold his company, Urban Energy Group. Which, Ramblin Jackson, we also built a website for you guys, and super excited to be here, right now. We're celebrating the sale of your business. We're smoking cigars. We're gonna record some music today at a winery right down the street. And Dave, thanks so much for coming on the show.
Dave Summers:
My pleasure.
1:30 The Sale Of Urban Energy Group
Jack Jostes:
So what was Urban Energy Group and what can you tell us about the sale?
Dave Summers:
Yeah, so Urban Energy Group is an energy efficiency company focused on LED lighting for commercial industrial buildings. And I started the company in 2013 with one employee and grew the business over about a decade, and then just sold it about a month ago.
Jack Jostes:
We were just looking through the Audible app on my phone and the photos on your phone. And we listened to the book Built to Sell about six or seven years ago. And I remember we were, we were driving to, was it Pemberton?
Dave Summers:
British Columbia.
Jack Jostes:
And that was awesome. What was it, Lake George?
Dave Summers:
Uh, Joffre Lakes.
Jack Jostes:
Joffrey Lakes, yeah. Yeah. I remember fly fishing. We went fly fishing and there was fog on the lake, and we caught some trout. It was really a great trip. And on that trip though, we listened to the book Built To Sell by John Warlow, and I remember us both being really struck by it. It was a great book. It definitely shaped how I've built Rambling Jackson, that that book is actually about a marketing agency. But there's a lot in that book that I think inspired you to grow Urban Energy Group in the way you did. And I was curious, what were some of your takeaways from that book that helped you build Urban Energy Group in a way that you could sell it?
3:00 How Selling A Company is Similar to Selling Any Other Asset
Dave Summers:
Previous to reading that book, you know, I really thought about the company more as my career, my path, kind of my everything in terms of my income and business. So after reading Built to Sell, it changed my perspective that companies can be sold like any other asset, and that you have a higher chance of selling your business if you build it in a certain way. And one of the key things is really getting yourself as the owner out of anything that makes the company money, or, you know, basically removing the owner from running the whole business. That's one of the main takeaways. And so I kind of started taking steps after that book to build systems and get myself out of all the important or necessary tasks of running the company.
Jack Jostes:
How long did it take you to get to the point where you felt like it could run without you, or to a point where you felt like it was sellable?
Dave Summers:
Yeah, you know, I didn't really know if it was gonna be sellable until it actually sold. You know, I like to have a little bit of doubt there. I really didn't know. It's sort of, you know, you have to go to the market and see what the market says, but as I started getting closer and closer to listing the company yeah, I think it was probably…it took me about three years to just even get it where it was operating, even without me doing sales. But then I was building more systems with project managers and different software tools to get it to really operate as independent of me as possible.
4:57 Who Is Involved in the Sale of a Company?
Jack Jostes:
Sure. And you know, so I know that you, you've had to like, work with tons of lawyers and attorneys, and there's things you can say and there's things you can't say. But what, what could you tell us about the actual process of selling it? What was that like and who was involved?
Dave Summers:
Yeah, so I've been doing a bit of real estate investing over the last, five, six years. And I was pretty shocked how much similarity there is to real estate, purchases, acquisitions at and selling a small business. So there were a lot of the same players, attorneys, CPAs, contracts, you know, it was just a lot of, and then the timeline. And then with the sale of my company, there was a bank involved that was very similar to getting a loan for buying a house. So there were a lot of similarities that I wouldn't have thought of before I went into it. I thought it would be a lot different, but it was very similar overall as selling or buying a house.
Jack Jostes:
What are, what are some of the other books that you read? We've both read a lot of business books and we pass 'em back and forth and recommend 'em to each other. What are some of the, of all the books you've read, some of the ones that come top to mind that influenced how you built your company?
Dave Summers:
Yeah, so John Warlow books, all three of them really played a big role. So Built To Sell, I believe was the first one I read. I think he had a couple books prior to that, but then he wrote The Automatic Customer, which is about creating recurring revenue, and then also his latest book, which is The Art of Selling Your Business. And that book was pretty instrumental. I read that at the beginning and then multiple times throughout the process because it had a lot of good stories and a lot of good ideas and insight and kind of things to watch out for.
6:58 Dave’s Gnarliest Mountain Adventures
Jack Jostes:
So one of the, one of the things that I know about you personally that you loved, the mountains were in the mountains. You really dreamed this up. I remember you telling me years ago that you wanted to live in the mountains and own commercial real or own real estate investment properties and sell your business. What similarity is there to your maybe risk tolerance in business and also in your personal life and your mountain adventures? What are, what are some of the most gnarly mountain things that you've done?
Dave Summers:
Yeah. You know, there's, I, I thought in the very beginning there was a lot of similarities, between big mountain climbing and business in that you had to really plan it out. You had to know that there was a chance of failure and accept that. And then you had to just train and practice and put a lot of different pieces together. And then definitely the risk part. You know, I've been in a lot of sticky situations in the mountains and got out of it and was okay. And, you know, I was able to, in my business, all the risks seemed not as significant, you know, as being in like a kind of life or death situation in the mountains. But yeah, I think one of the examples I like to reminisce on is when a friend of Kevin and I climbed Mount Denali, the highest peak in North America in 2011.
Dave Summers:
We had to train for about six months. We had to take classes on how to do different types of crevasse rescue, and we wanted to do it on our own, unguided. And yeah, we just planned for it. And it was a very big goal at the time cause we really didn't have a lot of experience, but we trained and we got mentorship and, went for it. And then we summited. And so I think after summiting Denali, you know, I kind of had a confidence in my own ability to execute my dreams. And so yeah, I would kind of link it back to some of my early climbing days.
Jack Jostes:
What do you think about like, when we were kids? So I've known you, I remember meeting you, you had, a gyro, you had one of those bikes that could, you could turn the handlebars endlessly. I remember meeting you. Yeah. And, we got in a fair amount of trouble together as kids. I think you were, were you kicked out of the first school in like grade school or something? Because isn't that why you came to Windsor?
Dave Summers:
Yeah well, I wasn't kicked out, but I got in a lot of trouble there. Yeah. And, we wanted to switch to a public school. It was a private Christian school.
9:44 Were Entrepreneurs Troublemakers When They Were Little?
Jack Jostes:
Well, so I got in a lot of trouble at that time. And I remember in first grade, Mrs. Cardone, Frank and I were in Mrs. Cardone's class. And, our school system made sure that Frank and I were never in the same class again until our senior year of high school. Because we caused that much trouble together. And, and so we were all friends and we were always causing trouble. I'm curious looking back, but oh, Mrs. Cardone said, Jack, you, you are a leader, you're a natural leader, but you're choosing to be a negative leader and you could choose to be a positive leader. And it took me a long time to realize what she was saying because it was true. It was much easier to be a negative leader as a six year old and to cause trouble and to get the other troublemakers together. I'm curious now, we're both parents, what do you think about that phase of our life now? I'm curious, like, are entrepreneurs troublemakers when they're little kids or?
Dave Summers:
Well yeah, I think, I think there is certainly a, I wanna say a, a trend or a, a vein of some entrepreneurs where you have to bend the rules or at least know that the rules are not, they're not set in stone. You know, rules change over time. And I think a lot of the most successful entrepreneurs really took the rules, moved them around, reshaped it, and then built incredible companies outside of the confines of what the rest of society thinks as acceptable or I guess, yeah, just thinking outside of the box, I guess would be a another way. And I, I don't know if troublemaking has any necessary correlation there. Cause I think a lot of troublemakers maybe just end up being troublemakers.
Jack Jostes:
For sure
Jack Jostes:
I don't know. I think that there's a certain element of it of recognizing the confines of something and the rules of something and observing a way to do it outside of that and then wanting to do that. And then in school, like that's not really encouraged and then you get in trouble for it and it's kind of thrill seeking to, you know, I think part of it was the thrill of getting kicked outta class or whatever it was. And sometimes yeah, it wasn't constructive, but sometimes it was, sometimes it was like, hey, this assignment doesn't really make sense.
Dave Summers:
Yeah, I think there's definitely a difference in sticking with what school, teachers ,society, like the box that they want to put around you. And a lot of those people end up being very successful, but working inside of other companies and following rules, it's like school sets you up to follow someone else's rules, which is what a lot of corporations have is just a set of rules that you follow. And I think a lot of entrepreneurs don't want to do that. They want to make their own rules and they want to make their own way.
Jack Jostes:
Right. And so, but isn't there, it's kind of paradoxical though, because in order to build a sellable company, you have to build systems and structures and yourself, you need to kind of work within them in order to have a thriving business and manage people who collaborate with you.
Dave Summers:
Yeah, I think the difference is following someone else's instructions versus creating your own.
Jack Jostes:
I think some people just don't want to follow other people's rules, just for the sake of not wanting to do it. And then I think, I think there are some people who observe that there's a better way of doing it. And that's more of the, I think the entrepreneurial mindset or nature to some ways. Cause I know some people who they don't want to, or can't participate in other people's systems, and then they're more of like a lone ranger or a solo entrepreneur. And there's definitely, that's great. But it's not really a sellable business. So, in order to get a sellable business, you have to have a repeatable system that somebody else could then buy and repeat with other people excluding you.
Dave Summers:
And that's where I think John Warlow's books really, he really hit that over and over again. Was that a sellable business is one, I mean, not always, because some businesses you can sell and then the owner stays on for a long period of time, and that's just part of the sale. But having the company run as independent as possible without you, is creating that environment or ecosystem that anyone else who had the interest in time and money could also operate.
Jack Jostes:
Yeah. What are some other books? I know that we both read the EMyth. That was another book that was the, I'd say the first business book that I read that was like, life changing and introduced the idea of an entrepreneur, a manager and a technician. Did that book resonate with you?
Dave Summers:
Oh Yeah. I think you introduced me to that book. Yeah, I've read that many times. And that's probably been one of my number one recommendations to other business owners. Yeah, I mean, from the beginning after reading that book, I realized I didn't want to be the technician, so the one who was really doing all of the actual work. And I really wanted to hire other people to do the work. And that allowed me to continue to think outside of the box and figure out new ways of doing business. But yeah, the EMyth is a great book.
15:41 How Do You Create Your Systems?
Jack Jostes:
I'm curious, what are some of the ways that you've built your systems that other people use? Like, so for me, I use, I use video. At this time I use Loom. Loom is a program where you can record a screencast video of your computer really easily. For a while I used Soapbox by Wistia and there was a period where I made over 200 videos a year, and I now have over a thousand videos that are, and they're in a video library, and it's like an online course when I'm onboarding a new marketing coordinator right now. And they're going through the video training and course of all the steps of like how to release this podcast. And that's allowed me to create systems in a way. And then I have a lot of people who work with me, project managers, operations people who can watch those videos and type them up into the checklists and really expand on them for all the things that I'm not thinking of. So that's the system that works for me is video. I like record a video of just, what do I do? Why did I do it? And then other people can do it. How do you create your systems?
Dave Summers:
I mean, very similar. There's been quite a bit of video recording but also checklists. The book The Checklist Manifesto is one of my favorite books as well by Atul Gawande, I think his name is. But also just a lot of just Google Docs and documents and spreadsheets that have the steps that need to be taken.
Jack Jostes:
How do you when you're selling, how do you share that with a potential buyer? So they know that the business has these systems and checklists to operate without revealing the secret sauce and I mean, there's some risk in that. How do you protect yourself from that during that kind of evaluation phase?
Dave Summers:
Yeah, I mean in the industry it's just called the due diligence phase, and there is a very strong non-disclosure, non-compete that's usually signed before you can share, before you share anything with the potential acquirer. And so there's still the risk that they could take it and do something with it and I'm sure that that happens. But, yeah, I mean, you really do share quite a bit in the due diligence phase.
18:05 What’s Next?
Jack Jostes:
So for the last 10 years, you've been the owner, the CEO of Urban Energy Group, that's been a big part of your identity, your work. It's been a significant part of your life. It's helped you build your family. Who are you now? Who, like, what, you know now that that piece of your, at least your work identity is gone. What's next?
Dave Summers:
Yeah. You know, I've been thinking about that, grappling with it, if you will. That's probably been one of the hardest parts of this whole process is reinventing myself. But I've also continued to hold on. You know, I might not be running the company anymore, but I did for 10 years. And so that's a core part of my internal identity. You know, what other people think about me, you know, that that can vary based on the, the way I describe myself depends on the moment the person I'm with. You know, to some people I, I might say I'm an investor to other people, I'll just say I'm retired to other people, I'll say I'm fun employed, you know, it's, or in other people just say, I'm unemployed you know, I just don't have a job right now.
Jack Jostes:
Right.
Dave Summers:
But yeah, the identity is definitely a, I think it, and John Warlow talks about that quite a bit in his book, Built to Sell as well as the Art of Selling Your Business. And a lot of entrepreneurs that sold their companies, that's one of their number one recommendations is to really have the next, and there's a lot of resonance or it resonates a lot with retiring cause a lot of retirees, people will work a career in the same company for 20, 30 years of the same industry and then they retire and all of a sudden their identity and that whole, so for me, you know, I've, throughout the last 10 years, I was really simultaneously focused on starting a family and I have two kids and then also as being a climber and a mountain person. So those parts of my identity are just gonna get stronger. And I also still own a business and that's part of my rental property. So, you know, I'm still a business owner and still a mountain climber and still a dad and a husband. And so yeah, I think time will tell what happens, but, you know, I've got other business ideas that now I have time just to sort of think about and let ferment in my consciousness.
Jack Jostes:
Tell me about Mountain Huts. What do you know about Mountain Huts? So we've been to a couple, we went to the RS two, a hut up near Eldora, what was it, the Eisman? Is that the hut that we went to? Up near Veil Pass. But you've been to significantly more. You get dropped in on helicopters to go skiing and all these gnarly things. So what about what's in store with huts?
Dave Summers:
Yeah. You know, I've long had a dream of building back country cabins of some in some capacity. There's a lot of government, you know, land issues. And I've actually been working this last winter I’, working with a friend who started a hut just right behind this mountain here, and I helped put it together. And then also I was working, once or twice a month, hauling people in gear. And it's a ski hut and so I'm, I'm yet to find my exact path there. But I'm, I've got quite a few ideas, locations and I think time will tell how that unfolds. But yeah, I mean, mountain huts I think are one of my main passions. So whether or not I'm gonna do it in the way that I did Urban Energy, probably not where I wouldn't build it to sell it necessarily.
Dave Summers:
But maybe, I don't know, maybe if I got it to a place where it was worth. And one of my favorite lines that John talks about, about when is the right time to sell a business is when it's worth more to someone else than it is to you. And I think that was a really important point. And, you know, I came to the realization that it was worth more to someone else than it was to me to keep running the company. And so that was when I, you know, knew it was the right time to sell and stuck with it.
Jack Jostes:
How do you feel now that you've sold it?
Dave Summers:
Well, I've got a one year old, so I'm tired. And the whole process was, you know, relatively exhausting. But I'm starting to, yeah, feel good, feel great actually.
Jack Jostes:
I know when I have big trips planned, like big elk hunts or like I'm speaking, I'm the keynote speaker at a conference and I know this like nine months in advance. I spend a lot of time and energy training and preparing for that. And I remember when I went archery elk hunting the first time and I didn't harvest anything, but I felt really sad and kind of depressed after it. Like it was like this kind of letdown of like, oh, I did it and it was great. And then I was, I don't know, I kind of felt really low surprisingly after it. And I found that I actually enjoyed the work of getting to that point maybe even more than the hunt itself. Do you ever have that experience with either your building up your business and selling it or some of these mountain adventures?
Dave Summers:
Yeah, I would say that the journey is what it's all about. I can't, can't think of the quote right now, but there's a lot of quotes around. It's more, the journey's more important than the destination. But with the business, I would say, yeah, the sale was anticlimactic for me. You know, I think I had it built up, but then it took a long time and so you kind of get exhausted from thinking about it.
Jack Jostes:
Yeah, it took like a year or something, right?
Dave Summers:
Yeah. I mean the actual sale took a handful of months, but we had it listed for a while and had a number of offers that we had to go through the process, but yeah, I think that's definitely a life lesson of always having things to look forward to and that often the anticipation is more valuable than the actual destination. And so, you know, that's part of, I'm working on planning some, traveling with my family to go abroad for a while and explore the world and just planning it is exciting, you know?
Jack Jostes:
Definitely.
Dave Summers:
I'm sure it'll be fun when we go there, but, you know, I think when we're done and come back, maybe they'll be that low, but we'll hopefully have another thing planned.
Jack Jostes:
I'm sure you will.
Dave Summers:
Yeah. So it's all about planning and dreaming and, you know, living in that state of the journey.
Jack Jostes:
When in your personal life, I know your’re way into weightlifting and mountain climbing and biking, when do you find that there's a certain time where you get big ideas?
Dave Summers:
Yeah, it's in that in between state of being, you know, consciously thinking or doing something and then being super present, hyper present in a moment. In between those two places, I don't know what it's called, but maybe just their subconscious.
Dave Summers:
Yeah, I mean often it's like right before I fall asleep or when I'm on my way to do something. You know, often like with mountain biking, you kind of go uphill slowly. And that's kind of that in between state. You're not super present cause you don't have to be, but on the way down you have to be super present. But on the way up yeah, I'm not sure I come up with all my great ideas then, but yeah, it's just, it's in the back of the head. It's, it's like in your, in your subconscious.
26:21 The Pressure To Sell Your Company
Jack Jostes:
One thing that I wanted to talk about was, you know, we've both done some coaching with Wayne Haring. And one of the things Wayne shared with me that I don't think we hear enough in these podcasts and things is like, you don't have to sell your company. You know, so it could be that you don't. Cause I think there's a lot of pressure to like, have built this sellable company and like, you're a loser if you don't, or something like that. But I know a lot of people who really love running their company and that's fine. And some of them retire. Yeah. Like people with jobs and during that time they've enjoyed running a business. Totally.
Dave Summers:
Yeah. I mean there's a whole spectrum. You know, on the one end there's kind of the Elon Musks who are creating spaceship companies and Tesla and you know, he's just creating companies all the time and growing them and selling them and going public and doing all these wild things. And then there's the kind of other spectrum where it's more, more of a lifestyle or a legacy company where you pass it onto your kids and that's your plan, your hope. And then there's everything in between. So I think it's very much a personal journey and I, you know, I guess I didn't really feel any pressure to sell from outside forces. It was more internal pressure. CauseI felt like, as I said before, the value was higher to someone else than it was to me.
Jack Jostes:
Well I mean, one thing you shared with me was that you felt like you reached the, I guess the cap of where you wanted to grow it. Not that you couldn't grow it to the next level, but you didn't really have the drive to do it, or you didn't find the joy or the excitement. It wasn't a challenge that you wanted.
Dave Summers:
Yeah. Yeah. That's also another thing that's brought up quite a bit in John's book. And I think he ends one of his books with a whole little paragraph on that. Or maybe a chapter that it's totally okay to not, cause I think to your point, in my opinion, there's actually more pressure to grow a company than to keep growing it. And to keep hiring and keep scaling and for some people that's just not what they want to do. And for me it was really creating the company, the creation of it. The management and then the scaling and the growing of it was less interesting. And also just frankly less fun. Like, I just wasn't having as much fun as the creation and the problem solving and putting the puzzle together. You know, for me it was a puzzle and I was kind of putting all these pieces together and then once the puzzle was pretty much put together and it was running by itself. That's when my interest and motivation and energy started to decline with running the company.
Jack Jostes:
Right. Well, and that's a good thing that you realize that because there are a lot of people who own companies and they get to that point, and if they haven't invested in the systems that get them out of being so integral to day to day that business owning a business can be awful.
Dave Summers:
Oh, yeah. I mean, it could be much worse than having a job.
Jack Jostes:
Oh, significantly worse. Yeah. And if you're not getting paid very well doing that, like why, why would you do it?
Dave Summers:
Yeah. I can't remember what the statistic is, but, it's a shockingly low percentage of businesses that actually sell. Like, it might be in like the single digits or single percentile of 1%. It's like 0.4% of companies in the US actually sell, versus how many are created. A lot of people create companies, and I've also heard from the broker that I worked with and different companies that sell companies that the majority of their clients are at that point where they're too old or they're having health issues or various issues and now they have to sell. And so I wanted to avoid that.
Jack Jostes:
Mhm
Dave Summers:
So yeah. And then it's a personal journey, but once I got the idea in my head of selling, then I was able to latch onto it and get excited about that. Like, that was what was exciting, more exciting to me
Jack Jostes:
That was the next project to do
Dave Summers:
Yeah, that was the next project to do. And the next puzzle to solve it was like you know, I've made the business new puzzle is figuring out how to sell it.I think it's been really helpful to know you throughout this whole process. You know, you started a company before I did, and you were an inspiration to go out on my own. And I saw you doing it when we were both in our early twenties and it resonated a lot with me versus seeing other friends, like get corporate jobs and, you know, get into that corporate lifestyle, or not get jobs and like do nothing. That happened to some people too, but watching you start a business and then I followed behind and I felt like we were, we've been on kind of parallel paths for a while and it's been really helpful to have friends that own businesses that you can talk to.
Jack Jostes:
Yeah. It really has been because it's pretty weird running a business and having staff and all the risk. AndI've definitely appreciated that part of our friendship because I don't know, it's difficult to talk about with people who aren't doing it.
Dave Summers:
Totally.
Jack Jostes:
One of the other cool things you do is you take Epic mountain photos. You've gotten really good at that. So where can people connect with you online if they want to network with you, see your photos, see your mountain adventures?
Dave Summers:
Yeah, my Instagram handle is probably the best. It's just @davesummertimes and that's where I post a lot of my mountain photography and, yeah that's a passion of mine.
Jack Jostes:
All right. All right, everyone. Well, uh, thanks so much for checking out this episode of The Landscaper's Guide. If you haven't subscribed already, you can check it out at https://landscapersguide.com/podcast/, where we interview interesting people. And I'm Jack Jostes. Thanks so much for checking out this episode. We will talk to you next week on the Landscapers Guide.