Todd Merrill:

Hi, welcome to Tales from the Sky Lounge. It’s a podcast about business, consulting, and venture investing. We get out there in the world and we talk to people who are making it happen, and we get their stories. And today in the Sky Lounge, Bob Brogan. Hey Bob, welcome to Sky Lounge.

Bob Brogan:

Thanks, Todd. I spent many, many a year in the sky lounge. I’m a road warrior for more than 20 years, working in operations, IT, consulting, and strategy. I’ve spent a lot of time in sky lounges, especially from a work standpoint. It allowed me to travel the world and go through exciting adventures and journeys.

Todd Merrill:

Very cool. Well, we’re very eager to find out a little bit more about you and what you’re working on. Right now, you’re a managing partner at TechCXO for the Great Lakes Region. So, we’d love to talk to you about that a little bit, but first, I want to understand how a guy who’s a Packer backer moved to Chicago and became a Bears fan?

Bob Brogan:

So, I’ll do the short, the abridged version. My grandfather and great-uncle were George Hallis’ best friends, and they went to high school together. And I guess my grandfather was a high school football star with Hallis.

Todd Merrill:

Okay

Bob Brogan:

After he got out of Illinois, my grandfather and great-uncle gave him the money to start the Bears. 

Todd Merrill:

No kidding. How about that? Okay.

Bob Brogan:

Which is crazy. So, my grandfather got his 10% of the shares back in the 1930s or 1940s, and my great uncle’s kids sold out in 1989, for 28 and a half, somewhere. I don’t know the exact number. I didn’t get their tax returns. So, when I was five years old, we moved from Chicago, suburban Chicago, to Green Bay, Wisconsin.

Todd Merrill:

Okay

Bob Brogan:

So, my entire schooling from kindergarten through high school was in Green Bay. And the rampant Packer fans, it was difficult to remain a Bears fan, but I have a bigger allegiance to my mom, Green Bay. So that’s how, but it’s cool. Love the Bears. I’m tired of them winning the offseason and then falling on their face.

Todd Merrill:

Yeah

Bob Brogan:

Years in a row. So, anyway.

Todd Merrill:

Duh Bears. Yeah.

Bob Brogan:

Duh Bears. Right.

Todd Merrill:

So, you got in, honestly, and you grew up deep in enemy territory over there in Green Bay.

Bob Brogan:

Absolutely. Because we were so close to Lake Michigan, we could get the broadcast on the radio by moving the single aerial around and putting tinfoil on it so that you could hear it. We were masters at listening to Chicago radio up in Green Bay.

Todd Merrill:

Yeah. It’s kind of funny. I was going to say my kids never will have that experience, but I think there was one time at Boy Scout camp, like one year, one kid brought an AM crank radio and then they were kind of like doing that same thing, you know, going around the mountain, trying to discover AM radio for the first time, you know, some weird country station and then some news talk or something.

Bob Brogan:

Absolutely

Todd Merrill:

Yeah

Bob Brogan:

Growing up in Green Bay and listening to Bob Uecker and Merle Harmon Brewer broadcasts when they were really terrible in the 70s. You’d have the transistor, and you’d have the earplugs, and you’d listen to Bob Uecker tell stories to you the entire night while you’ve fallen asleep. It was a great way to grow up.

Todd Merrill:

Very cool. Well, let’s talk about your kind of professional career. So where’d you go to school, and then kind of how did you get into your current track of business?

Bob Brogan:

Okay. Well, yes. So, I went to the University of Notre Dame. I graduated with a degree in marketing. So, I was out of the business school. And what I figured is I know enough about marketing. I’d better get educated on the other functions within a business. And so, I spent my entire 40-year career working through and getting educated on anything outside of marketing.

Todd Merrill:

Okay, okay.

Bob Brogan:

So always from a functional leadership or a technology leadership and the like, and went to Wall Street, didn’t necessarily like to live in New York and commute two and a half hours each way. So moved to Chicago, started my MBA school, and got an MBA in finance from Loyola while I was a banker. So, I’m a night school grad. And my career took off from that. Went into corporate finance in the franchise market for a couple of three years. It was before, I mean, it was truly before laptops, PC, and alike. Luggable, compact computers that you travel with that weigh more than a child. That was what I started in. And the systems were really terrible. And so, I had a friend who was working at a subsidiary of IBM, and they were opening up a territory for data warehousing, business intelligence solutions in Canada. They were a big company here and were bought by IBM. They came out of the Palo Alto Research Center. So, they invented the mouse, the iconic interface, all of the technical pieces that when you had to go back and build your own to necessarily get your applications to work, you build your own computer. We had to do that. That’s when I started hitting the sky lounge, is right at that time, because I commuted five days a week from Chicago to Toronto or Montreal, and helped them build a business up there, which ultimately, they did, and then transitioned out of there. This was the first of two times that Lou Gerstner from IBM made elephants dance, sent me to the sidelines, reorganization of their sophomore group. And each time, I ended up getting a contract back to them to work with the largest clients they had. So, I must have been doing something right, I figure, because they kept me coming back.

Todd Merrill:

Oh, wow! So, you’re literally roadshow Bob there for a little while.

Bob Brogan:

Yes. Yeah, yeah, yeah.

Bob Brogan:

Then I truly went and started to run some services organizations from there. And probably let’s say I turned around probably four different services organizations over my career by creating repeatable solutions and templatizing businesses so that you could expedite 80% of the work upfront and do 20% of the work based on what your business model was.

Todd Merrill:

Right, right.

Bob Brogan:

Okay. That concept I raised $25 million or $23 million in a series, or not a series, an angel round in 1999.

Todd Merrill:

That’s a lot of money in 99. Yeah.

Bob Brogan:

It was. And it basically was the precursor to SACS, which is interesting because we spent almost a year orchestrating, not orchestrating but negotiating a contract with Oracle for their database. And they said we can’t price it in any other way than per server.

Todd Merrill:

Mm-hmm. Back then, yeah.

Bob Brogan:

Well, Larry, the guy, Mr. Ellison, all of those guys, you might want to think about that moving forward anyway.

Todd Merrill:

So, we see a lot of echoes with that now, where people are, you know, it’s like this, the longer you’re in tech, the more you realize everything’s just a big cycle, right? That’s the AI thing now, right? So, everybody wants to squeeze down that first 80% that you’re talking about, right? And then make it super automated, a little bit more intelligent, very slick. Do most of the work so that my really smart people in the back end can pick it up and knock it out.

Bob Brogan:

Absolutely. And so cycles, I mean, the most important thing I’ve learned over my career is that technology rolls in cycles, business models roll in cycles. Cash rolls in cycles.

Todd Merrill:

Boy, does it. That’s for sure.

Bob Brogan:

And you know what? You have to adopt to the external cycles of the economy, the ecosystem, as well as make certain that you’ve got the flexibility in your organization to then adopt and mature your operating model because again, everything works in cycles. If you base everything of a cash-to-cash cycle, and you understand three or four main costs and revenue and collection drivers, just follow the dollar through each function in the business. Okay. And how long it takes, what percentage of time and money does it cost to go through the lead to a customer contract,  and the collection of it. So that’s ultimately your go-to market engine or your revenue cycle. And then on the backside, it’s a procure to pay. That works in retail. That works in manufacturing and CPG, being a Chicago guy. You know, we are the logistics capital of a hub, I should say, of the US. So, you learn a lot about how pieces fit together, and how they take them apart, and then how you manipulate them so that they move along with the roadmap that you want to take.

Todd Merrill:

So, you know, being in Chicago, you’ve probably seen a lot of really interesting businesses that went by. And then your name in all of the companies, IBM, Xerox PARC, you know, all these legendary places where you’re just kind of like, yeah, this is what we do during the day. But, you know, who knew they would turn out to be such a legendary thing?

Bob Brogan:

I had great mentors, Todd. I think you’re about to ask that.

Todd Merrill:

Sure. Yeah. And then, you know, so, Xerox PARC is legendary for innovation. I don’t know what was in the water at that point in time, but IBM was legendary for sales training. Right? And then getting in there and then selling the hardware, but also making a lot of money on the services side of things. And it sounds like…

Bob Brogan:

…yeah. So, sell value, deliver value.

Todd Merrill:

Okay

Bob Brogan:

Okay? That never gets old. Okay? No matter where you are in a business cycle, you could be at startup, scale up, growing up, or exiting the business, okay? In any of those situations, you need to kind of think in that mindset. It’s different because an entrepreneur, in and of themselves, are going to build around the strengths of their core team or who they are. And typically, when you walk into a business, the weaker areas are opposite of the leadership in the business. And, you know, so the question then becomes how long is each function’s journey to get to minimally viable marketing sales? So, keep the operating model floating at the same speed and then move at the same speed while adjusting to the external. And ultimately, you’re going to cap out each operating model, caps out. Right? I mean, you know that, you know, by industry. So, SAS, it could be, you know, it’s typically 2, 10, 25, 50, okay? You may need to adopt your business models based on that. Right? And in insurance, it could be something different. In a services business or a supply chain business, those, again, are the things that all have to fit together for a company to evolve. Sorry, it’s the philosophy of Bob.

Todd Merrill:

Yeah. So, let’s just kick that around for a second. So, I saw something go by on LinkedIn. Everybody’s, you know, going to drive the barrier to entry to almost zero. It’s going to come all the way back around. We talk about cycles, right? It’s all the way back around to the talent of the founders. And I saw an article yesterday. This is the three-person archetypal, you know, highly leveraged startup. And you’re talking about the founders, and then the opposite of them is usually weak.

Bob Brogan:

Yeah, yeah.

Todd Merrill:

So, there’s this notion of the visionary founder. So subject matter expert or somebody’s got a lot of contacts, CEO. Right? And then you have the words person and the numbers person. Right? Their analytical personality. And I thought it’s kind of, you know, it’s different words for the same people that we’ve all experienced. Right? And then, like, your career, I’m not sure which one you are, but, you know, so you’re the marketing…

Bob Brogan:

I think you’ve absolutely nailed it. Right? Because the entrepreneur is unique. Right? And then him or her have to have their right hand and their left hand. Okay? And that will work for a period of time. Right? And then you evolve and you grow and you have more people and all of a sudden, complexity. No, keep it simple, guys. Keep it simple, girls. Understand how it’s going to flow. Okay? And then you know what? Building blocks. Every successful business I’ve seen in 40 years has basically modular design components. Right? So, you add components just like you do on software or whatever, but understand those spaces. And if I’m going in a direction that, oh, you know, the government went crazy and said this is outlawed. Right? Or I’m tariffed. Right? Or I’m this or I’m that. You have to look at those components, how do I adopt my business and my go-to market to fit within those external components? And the other thing I really like is that it’s repeatable. Okay? Repeatable. And then the design of the business needs to expand with the growth of the business. I’ve got a million stories on that, but I’ll let you come back here.

Todd Merrill:

Yeah. Well, this is kind of a fun little thread we’re pulling on here. Right? So, you know, as you progress in your career, as you’ve had an entrepreneurial career, you didn’t get stuck in one stovepipe. Right? And you’re kind of you’ve got a lot of cross-functional skills, which I think is very common among entrepreneurial people. You know, you start off with one thing, then you quickly, you know.

Bob Brogan:

Yeah

Todd Merrill:

So, I had a company in, gosh, ‘97, that we started. And it was outsourced IT administration, and then it was kind of like what you’re saying. Right? And none of us knew any of the MBA stuff. We didn’t understand finance or bookkeeping, marketing, and all that stuff. And then so it’s like, okay, I’ve got to learn this stuff because nobody’s going to do this. So, you figure it out. You know, my dad figured it out.

Bob Brogan:

Yeah. Figure it out.

Todd Merrill:

So got a little bit of that in the background. But I think, you know, you kind of figure it out. And then, you help other people start their companies, and you kind of form your ideas about kind of what works, what doesn’t work. And then I think you came to the same place where a lot of us come to. It’s like I want to either start a company or I want to help other people start companies. So, I know you’re involved with Notre Dame’s, you know, in the angel investing community.

Bob Brogan:

Yeah

Todd Merrill:

So, let’s talk about what do you look for? You’ve kind of been in Chicago. You probably had access to the like McDonald’s and Sears and some of those big companies like that.

Bob Brogan:

Yeah. No. Those were my clients over the years. Each ecosystem evolves. Chicago, New York, you name it. Everybody has their special ecosystems. Right? And I think it’s important to learn from the best and work with the best, and then figure out what works best for a company at a scaled-down level. Okay? I believe in the philosophy of … I’m going to say it’s going to sound stupid, but the philosophy of why are phone numbers seven digits long?

Todd Merrill:

Why are they seven digits long?

Bob Brogan:

Because that’s as long a span of numbers that you could remember.

Todd Merrill:

Well, four and then three because you’re right.

Bob Brogan:

Right, right, right. Bingo. Exactly. But without my point being that once a company or an organization gets over six or seven core paths, both horizontally and vertically in the business, and they’re still stuck, it’s time to change your business model.

Todd Merrill:

Okay. Okay. Interesting. So, all the way back to the zero beginning as an angel investor, given all this background and history, what do you solve for, or what do you like to see in a brand new company that comes in for investment?

Bob Brogan:

Yeah, no. A founder’s passion and understanding. Okay? Their ability to work with others because it’s lonely being the CEO. And so you build up, I call it know-it-all muscles.

Todd Merrill:

Okay. Okay. Fake it till you make it muscles. Right.

Bob Brogan:

Right, right.

Todd Merrill:

Okay

Bob Brogan:

And, you know, at some point, you don’t.

Todd Merrill:

Okay. Right.

Bob Brogan:

Or the industry has passed you by, or it’s mature. I don’t mean that in a negative context. I mean, in a positive context. But, you know, again, keep modular, keep it simple as you expand and grow. So, so modular design is important, team, vision, and execution. Okay? Because execution is really key, and how does the execution tie to the cash? So, how much more cash do I need to finish my journey to the next level? So those that know it all and present as they know it all, don’t typically get funded…

Todd Merrill:

… okay

Bob Brogan:

Quickly

Todd Merrill:

I need help is a good thing to say to an investor.

Bob Brogan:

Yeah. No, because you know what? During these early stages, right? You’ve got a proof of concept. You don’t necessarily know how to go to market yet. All of the componentry, you are fixing your solution for the market. Okay? And then everything else is tangential to that. But then you’ve got to build them up so that they all get to their minimally viable state, that if they’re in a seed round, you’d expect to see some traction, could be friends and family, founder-led sales are always going to be an issue as you scale and making it repeatable. Okay? And those are what I’ve learned from angel investing, and you know, that most of the work that I’ve done applies to about 90% of the industries that the entrepreneurs work at.

Todd Merrill:

Yeah. Well, we always preach, you know, unit economics, at least have a good idea in it and be figuring it out.

Bob Brogan:

Absolutely

Todd Merrill:

Right. And they know your runway. So, what if I give you a million dollars? So, we have this mentorship thing for university kids. Some of them get it. A lot of them get it. Very smart kids. Some of them just go $100,000. It’s like, okay, what are you going to use that for? I don’t know. You know, I did…

Bob Brogan:

… I want to bring that up because of the fascination that I’ve always had with entrepreneurs and how people make money. When people are in college or university or whatever, they need mentoring and coaching, too.

Todd Merrill:

Absolutely. So, invest in your communities. Twelve years ago, I founded with, well, other people, a charity called the Legacy Guild.

Todd Merrill:

Okay

Bob Brogan:

The Legacy Guild gives college scholarships to residents, children in our high school district, who have lost a parent.

Todd Merrill:

Okay, that’s a great cause.

Bob Brogan:

Yeah, yeah. The high school, my kids went to had 4,500 kids, and we had two friends pass away very close to each other. And we were like, you know, one of them used to meet and say, how do you be a better dad, a better worker, a better, better. So, the Legacy Guild had two things. It had what I would call a how to be a better person. But also, how can we help these kids that if they were my own kids, I would hope that somebody else would do the same thing. And over that 12 years, we’ve raised over two and two and a half million dollars and given away. We’ve given away 700 or 800 scholarships. The number is …

Todd Merrill:

… fantastic.

Bob Brogan:

And what we do is we help them get internships. We get corporate people to get their resumes ready. Everything that you would think that, you know, they would have at home. We want to provide that guidance for them in their career. And what’s really, really for me, is really, it is inspiring is some of the scholars are now leading our board.

Todd Merrill:

So, okay. That’s what I was going to ask. So, you probably had enough, where it’s kind of a closed loop now.

Bob Brogan:

And now it’s closed. Absolutely.

Todd Merrill:

How fun is that to see those alumni, you know, plow right back in, right?

Bob Brogan:

Oh, yeah, no, absolutely. Pay it forward in your community. And I had the same intern for three years.

Todd Merrill:

Oh, wow!

Bob Brogan:

And three different customers in three different industries.

Todd Merrill:

How about that?

Bob Brogan:

And the young guy got to see three different businesses and understand their business models. And he was a finance major. And so, you know, he helped work on my largest exit. The intern did.

Todd Merrill:

What was your…?

Bob Brogan:

… a hundred million dollar exit?

Todd Merrill:

Well, tell us that story. Name names. You know, what was that? There’s always a really cool story on these exits because it’s, you know, an overnight success. It just took seven years, kind of usually, right? This one took 43.

Todd Merrill:

Oh, my God. Okay. Okay. And what was the…?

Bob Brogan:

It was an overnight success, 43 years in the making. The founder held and created online ordering in the 1990s, early 90s, before the Internet. And the vast majority, he had the patents for all of these.

Todd Merrill:

No kidding. Okay.

Bob Brogan:

He had hooked his start to many different franchise organizations because a good percentage of their revenue, especially pizza, is take-out or delivery. Right? And he charged a couple of cents, a few cents per transaction, and built a 27 million dollar run rate business.

Todd Merrill:

Wow! Annual run rate?

Bob Brogan:

Annual run rate with a 50% plus gross margin.

Todd Merrill:

Wow!

Bob Brogan:

Yeah, yeah. But they ran the business out of the checkbook. So, I had to build three years of financials. I brought in a young controller who worked for an old friend of mine. He didn’t know that I knew that, and the two of us went on this journey, and we brought in our interns. We had short-term cash fixes that we needed to do. We took our outstanding receivables from 138 days to 38.

Todd Merrill:

So that’s huge.

Bob Brogan:

In a summer.

Todd Merrill:

Wow! Just by asking and sending a few letters, right?

Bob Brogan:

Yeah, right. Exactly. Yeah. And just orchestrating it. Right?

Todd Merrill:

It’s fantastic.

Bob Brogan:

And so then we built out the financials, the model, we had some other tax and challenges, and patent defense challenges that we ultimately won.

Todd Merrill:

Oh, wow!

Bob Brogan:

But over a 15-month period, we went from not being able to know where our cash position was to understanding every piece of the business and why it was in place, and we passed an IRS audit as well during that time. The owner sold the business to it’s now, it was a precursor to Pizza Hut’s digital business, sold it in 2020. So that was great. I have friends for life from that experience. And it was a team coming together and responding in unforeseen ways, and all with a common purpose of building the business for the future. And that’s always exciting to me.

Todd Merrill:

So, we talked about … this comes up a lot, there’s this transition in skill set between early career and late career, right? And then so you kind of pass this kind of boundary, and it’s not so much an individual contributor. It’s strategic execution, strategic vision. Just been there, done that, knowing what to do. And then you’re you said it beautifully. You said I brought in my interns or my people, a couple of people. I knew what to do. Gave it to them to go execute. You know, we talk about fractional C-level executives, but that’s kind of, you know, that’s the secret sauce, right?

Bob Brogan:

Absolutely

Todd Merrill:

You don’t have to work 80 hours a week to get this done, and you shouldn’t. Right? And then by you leveraging other people and just kind of calling the shots.

Bob Brogan:

Your explanation of my journey from a work standpoint is absolutely true. I did not believe that at the age of 40, I’d been a millionaire a couple of times and then not a millionaire a few weeks later.

Todd Merrill:

Sure

Bob Brogan:

I was always at the tactical level. And then I went to work for Alvarez and Marsal. They could take a business apart in 72 hours and put it back together.

Todd Merrill:

Nice

Bob Brogan:

And identify all of the issues. Yeah, and that was the piece that I was missing. All right. And then, so then it went from learning to then applied learning and teaching and mentoring and coaching. And that’s the way most careers go.

Todd Merrill:

Let me talk. Let me ask you a question about coaching. And then maybe this is a coaching moment for me. But, you know, I’m at the point now where I’ve seen enough mistakes. I’ve seen a lot of mistakes made. I want to say all of them because there are always new and different mistakes. And then you go in, you tell people, “Hey, this is what you’re doing wrong, and this is how you fix it.” And then some do, some don’t. Right? And then how do you handle, you know, take it apart in 72 hours? I can give you exactly the playbook, you know, for darn sure 90% certainty this is going to help. What happens when they don’t take your advice?

Bob Brogan:

Yeah. The change management piece of that is so critical. And so, from my perspective, I’ve sat in their chair. I know what they’ve been asked to do in generic terms. Right? And so, I was the chief revenue officer. I was the chief technology officer. When I was running scrums, Todd, I wish I had known you then. Right?

Todd Merrill:

Yeah

Bob Brogan:

I mean, I was good enough at all those things, but you know what? All of the components you need to know. Let’s think of it as your first programming class: inputs, outputs. What happened in between the input and the output?

Todd Merrill:

Well, and then it’s a people problem, right? At some point where…

Bob Brogan:

… there you go.

Todd Merrill:

I guess you have to kind of preload, like, okay, we can tell you what’s going to how to fix this, but you have to be willing to do it for it to make.

Bob Brogan:

Yeah. That is a combination of experience and where the funding people are in the mix here, those two components, because it ultimately always comes down to cash; cash funding, cash flow in those cycles. Todd, I’m a cycles guy. You know? So funny. My worst class in college was operational accounting, and I’ve spent my entire career doing operations and accounting.

Todd Merrill:

Yeah

Bob Brogan:

How does that happen?

Todd Merrill:

Yeah. God has a sense of humor, I guess. Let’s talk about cycles. Okay. So, you’re in the Midwest, known to be the Rust Belt. I have older relatives who came out of that area and have seen the 70s, 80s, just go, go, go, and insane country clubs and parties. It’s not so much that anymore. Detroit is a little depressing to go visit. Are we going to see… where are we in that cycle? Surely, it’s not forever. With this new policy regime coming out of DC, are we going to see a Renaissance in manufacturing distribution coming out of the Midwest? Are you seeing that yet?

Bob Brogan:

I would hope so. There have been opportunities to do it before COVID, might have been one where, you know what, we could have re-established some sort of manufacturing here in the Midwest. Food. My daughter works in food.

Todd Merrill:

Okay

Bob Brogan:

She works for Diageo. People always have to eat, okay? So basic necessities, right, are there. There are a lot of food companies in the Midwest. There’s a lot of trucking that supports it, okay? The manufacturing that will be done will be much smarter if invested in correctly, right? I mean, there are a lot of factors that go into it, but you know what? Let’s make certain that there are enterprise zones or whatever that seed the industries, because you can’t… I’ll use an analogy of a quick story here, okay? I saw a company that, what do they do? They do battery rechargers for streetlights or in streetlights.

Todd Merrill:

Okay

Bob Brogan:

So that if you have an electric car, you can plug it into the streetlight. Okay? And it’ll charge. One of the many reasons, but one of the reasons is because of battery technology. Okay? One of the reasons that it hasn’t taken off is that battery technology is evolving. There are three major investments here in Chicago. One is the supercomputing network…

Todd Merrill:

… oh, okay.

Bob Brogan:

That is being done at IIT, which is used. So, the supercomputing… remember when Cray was up in Eau Claire, Wisconsin?

Todd Merrill:

Yeah, yeah.

Bob Brogan:

And literally they were Minneapolis, right? So, they were the supercomputing, what, in the 80s or 70s, I can’t even remember.

Todd Merrill:

Yeah, yeah.

Bob Brogan:

Right? So, there’s a supercomputing. We didn’t win the CERN super piece, but we have two labs here that are working on alternatives to battery technologies. And I play golf with a guy who’s got a bunch of the patents.

Todd Merrill:

Okay

Bob Brogan:

But that’s a different story.

Todd Merrill:

Is that like a hydrogen fuel cell kind of thing? Like a whole different technology?

Bob Brogan:

Absolutely, yeah. Yeah, absolutely. And some of those things then came in and started overlapping with the angel and venture community and government funding and grants. And there are more ways to build and grow than one way, but those are the seeds that are being still germinating. And food, okay, what you’re seeing in the market right now is multi-generational food are selling now because… or been bought by PE, right? And there’s still an aging population of entrepreneurs and owners. So, you’re going to see that cycle continue for a while, okay? Money’s still hard to get, right? And we’ve all had those issues. I’m finishing the series A that we thought would take six months. We got the commitment four months ago. It closes on Friday.

Todd Merrill:

Oh, God, okay.

Bob Brogan:

So, right, you know.

Todd Merrill:

But hey, you’re getting it done, right? You’re definitely getting it done.

Bob Brogan:

No, and you know what? And a great partner, Adam Boris, I work with him and other TechCXO. If you’ve got healthcare, he’s a wonderful person here out of Chicago. And the opportunity to work with great entrepreneurs at TechCXO, who have been there and done that, I’ve learned from them throughout as well. And everything I look at as a team sport, except my golf score.

Todd Merrill:

I got it. Got it, got it. You’re going to own that one, right?

Bob Brogan:

I own that one. It’s bad.

Todd Merrill:

Well. So, we’ve all seen a couple of cycles. I started a company in 2008. The stock market was crashing, GFC, and then everything was falling apart. And it became very difficult very quickly to raise an angel around. I got one done. It kind of reminds me of your Series A you’re talking about. But like, God, I talked to so many people over and over and over again. And it was so hard. And then you see a couple of years later, it gets really easy again. And then zero interest rate, and then you know.

Bob Brogan:

Absolutely

Todd Merrill:

So timing is a big part of it. But I believe good deals can get done in any season. It’s just a little harder, right? And then so what’s required… I’ll ask you a few questions. So, if you’re a startup right now looking for money, where’s the bar for fundable? Right? Because that varies from like, hey, I got a napkin and an idea to, yeah, I got to have five exits. And I’ve already put in a million myself. And then where’s the cycle going, right?

Bob Brogan:

No. I’d say I agree with you. Good deals always get done. Number one by rule, okay? Yes. It’s going to take longer in bad liquidity or bad interest rate cycles, right? Because you have to guarantee a return to your investor, okay? And so, I’ve given multiple CEOs advice. They would say, “I need to grow this to exit.” I said, “Well, I don’t necessarily believe that that’s true.” Okay? If it’s a lifestyle business, and you don’t want to grow it to the next stage or whatever, okay, invest it differently than you would if you are going there. So, begin with the end in mind. Okay? My end in mind is I’m some time going to exit this. So design all of the information and the back due diligence, if that’s such a word component that they’re always ready. The online pizza ordering story that I told. When I got called, they had turned down two previous offers to sell the business. And the reason why was they knew that their financial house was not in the work.

Todd Merrill:

Got it. So, you said not right now.

Bob Brogan:

So, you know what? You’ve got to build out the components of the data room and come back from there. Okay? Because your journey is ultimately to get to the data room.

Todd Merrill:

Right? Well, and I think repeat entrepreneurs inherently understand that. And then, you know, you put in a system day one, even though it’s like ridiculously overpowered for, you know, like, yeah, customers, you know, how hard is it? No, you need QuickBooks or something, right?

Bob Brogan:

Yeah, Todd. That’s a great point, you know. What I look at is, okay, all right, we’re going to have a roadmap, but the roadmap, you’re going to move in digestible chunks. Step 1, step 2, step 3, for this function. Step 1, step 2, step 3, okay? And there’s really only four levers that you need to know, right? Okay? What’s my W2 cost? And number. What’s my third party, your 1099 contracted labor? What are my fixed and variable SG&A costs? And then what is the cost of goods truly, simply, and those are four levers, right? That anybody can manage to a budget for, okay? But if you’re going to be budget-driven, make certain that you have the dollars in there for innovation for all of the pieces that make your company you, right? That shows a much more evolved organization.

Here in Illinois, it’s a little bit slower. We’re Midwest, we’re slow adopters, okay? But you know what? We know the solid fundamentals and make certain that you understand the fundamentals because if you’re building a business off of a bad foundation, it’s just going to continually crack until it stymies you from growing.

Todd Merrill:

But I think, you know, you say Midwest, we’re a little slower. I think that’s more typical, you know, we always read the Silicon Valley go, go, go stories that are weird and different and very, very, very unusual. I think most of the world, Europe, you know, Southeast, Northeast, even, people want to see solid companies, you know, that understand their fundamentals, blocking and tackling and, you know, can you make stuff? Can you sell stuff? And then it’s really not much harder than that.

Bob Brogan:

Output, right?

Todd Merrill:

Right, right. And if you get that right, you know, there’s a lot of help from a lot of different people who are willing to help out. It’s easy to find help.

Bob Brogan:

Yeah. If I had career advice, Todd, for anybody, it’s figure out what you don’t know. Okay? And find the expert to fill in that blank, right?

Todd Merrill:

Absolutely

Bob Brogan:

Because I can’t know everything. And that’s the loneliest part of the journey for a lot of entrepreneurs, is, you know, I don’t have somebody whispering in my ear that that’s the way things are. And, you know, they can take it or leave it. Bob Brogan has been wrong more than he’s been right. All you have to do is call my wife. Joke. No. All you need to do is call in, you know, I tell the story to a lot of people that I was only the fourth smartest person at my own dinner table. Yeah. Okay? And there were only three. I would like to say there were only three, but the fourth and the fifth are doing great. And so are one, two, and three. Okay? And they’ve all taken different paths. That’s fascinating. Again, it goes back to my how do you make a buck? Okay? And what value do you ultimately bring to the table? And, you know, I’ve been blessed with global travel for work, right? Now, it’s time for some global travel for my family, my wife, those who have supported me while I was on the road, my entire career. So, while I’m looking at stepping away soon from TechCXO, I’m also just recreating the next steps in my path, which is probably more board work, more investment if there’s a particular investment that I’ve done where my skills can be beneficial to the overall output, I will do those types of things. So, I love being a lifelong learner. And you know, as one of nine kids, okay? Eight boys and one girl.

Todd Merrill:

Oh, wow!

Bob Brogan:

I had to learn how to jump in really quickly, get my stuff, and get out.

Todd Merrill:

Yeah. Yeah.

Bob Brogan:

And so that was chaos. So, I’ve been in a chaotic environment in my mind, my entire life. And so how do we simplify it? And that’s really kind of, you know, there’s about five people that if I had, I had a problem today that I worked with throughout my career, I could pick up the phone and they would go, yeah, Bob, no problem. This is what, you know, let’s get together, blah, blah, blah, and figure it out. You know what? That’s fabulous, you know, people have shaped me. I didn’t shape myself. So, I’m a product of, I guess, environment is a good way to speak of it.

Todd Merrill:

You know, I had this kind of philosophy, you know, as I’ve gotten older, I want to help as many people as I can. And then, you know, that’s my guiding principle. And then, you know, it’s kind of amazing how many opportunities I get from the world, but like, I feel so much better waking up in the morning when I know I’ve got four or five people that are struggling and I’ve got that one little piece or that one little connection I can make for them. And it seems like kind of nothing, but you know, as you’ve gained all this experience.

Bob Brogan:

Yeah. It’s a pay-it-forward mentality, Todd. And, you know, I believe that you’d have to pay it forward, right? Okay? There’s craziness out there, right?

Todd Merrill:

Yeah, for sure.

Bob Brogan:

You’re seeing it right now in a lot of different ways. Okay? But, you know, being able to sort through the, and I’m a world-class guy who could mix metaphors. That’s me.

Todd Merrill:

Okay

Bob Brogan:

Bob, it’s spelled the same backwards and forwards, but the mixed metaphor, you know, most of the time, if you keep it simple and constantly know what other people are doing and you’re out there, you’re engaged, you’re in the environment, opportunities are going to come to you. When I announced to a few people, close friends, that I was leaving, I got three leads out of it. 

Todd Merrill:

No kidding. How about that? Hey, Bob, before you go, can you help us with this, right?

Bob Brogan:

And I was like, no, I don’t want to. But, you know, that’s also share and share alike. And my journey when I started at TechCXO 12 years ago, I didn’t know if I could do it. I just didn’t have the self-confidence, the understanding, and you know what? I had some great mentors and leaders in this firm. Okay? Ted Stone. You know, Mike Casey was the person who brought me in 12 years ago when we sold a SaaS company. You name it, your team, Todd, any of the CTOs, they’re great. They’re smart. And everybody’s got a little bit different experience and understanding and collaborating with people like that is much fun you can have. I don’t see myself ever truly walking away. I just would like to make certain that I’ve balanced it with the personal pieces that are coming in what I think is the last quarter of my life.

Todd Merrill:

Sure, yeah.

Bob Brogan:

You know, and I say that only because family members died in their late 90s in my family. So yeah, a long way to go.

Todd Merrill:

Yeah. You have long livers in your genetic makeup, right? I also lived a long time. Okay. So, I would love, love, love to hear some of these roadshow stories. Have you got any great travel stories that you’d love to share with us over your career?

Bob Brogan:

Yeah. One of my favorites was I was working for a PE firm for a portfolio company in Columbus, Indiana. If you’ve not been to Columbus, Indiana, it’s a fairly small town, halfway between Louisville and Indy. Cummins engine has a big place down there, so there’s a lot of truck part manufacturing right in that area. So, the company had operations all over Europe and South Africa. I was selected to work through part of their hundred-day planned post-acquisition.

Todd Merrill:

Yeah, I got it.

Bob Brogan:

I grew up in Green Bay, Wisconsin. Okay? You can get from one edge of town to the other in less than 15 minutes. So, me getting out of plane, doing work in London, in Germany, in the Netherlands, I was on this trip for this company, and they needed a volunteer to go to South Africa. It’s the middle of the summer, South Africa, had never been. I raised my hand. So instead of flying home, I went to South Africa, which was terrific. Fun. We worked through the entire piece. I spent five days in South Africa. I was provided with a driver, and the plant manager was a red wine aficionado.

Todd Merrill:

Oh, very nice.

Bob Brogan:

In Cape Town, just North of Cape Town, is the vineyards.

Todd Merrill:

Yeah

Bob Brogan:

So, for a week, I went out to dinner with him, and at the end, he took me up to Stellenbosch, and it was crazy. So, then the flight, back to Cape Town, to Johannesburg, to Frankfurt, to London, to Chicago.

Todd Merrill:

Jeez. That’s a long day. A couple days.

Bob Brogan:

32…

Todd Merrill:

Holy smokes. And then that’s what five planes?

Bob Brogan:

So yeah, five planes, 32 hours, and it was really the last trip I took as a road warrior because my wife had called me midway through it and said, “Your kids are teenagers, not right now, and they’re not going to be teenagers again.” It might make some sense that you move off the road.

Todd Merrill:

Yeah. I think that’s smart. That’s very smart.

Bob Brogan:

It was, for me, again, the plant in South Africa, rhodium. Okay? Rhodium is only available there and in Japan.

Todd Merrill:

Oh, weird. Okay.

Bob Brogan:

And catalytic converters are made with rhodium, and so any exhaust system in a car needs rhodium to clean the exhaust. So when you hear this story of people stealing catalytic converters from cars in the last five years, it’s because of the rhodium.

Todd Merrill:

No kidding. It used to be like platinum, I think. Right? 

Bob Brogan:

Yeah. Right. But I mean, crazy that, you know, things I would have never learned in a million years just by taking the track. Another time, I was working with a refinancing for about a $75 million company, really kind of a recap, right? I am literally on the phone while I’m in line trying to get through the Toronto customs to come back. This was 2019, and I’m saying, “We can’t do this deal, guys, financially, because it’s going to put you in default within two weeks with your new render.” And the CEO and COO refused to keep $800,000 in the business that needed to be in the business for this to work. They pulled it out personally.

Todd Merrill:

That’s horrible.

Bob Brogan:

Yeah. When that happened, it was time for me to leave because you know what? If you’re not above board and you’re pulling money out, you know, I can lead you to water, but you’re going to have to drink and understand the implications for something that… it ended up blowing up a growth capital investment because, and of course, it was the CFO’s fault at the end of the day, is what they told us, but, or, you know, the story they were telling everybody else. But the fact of the matter was no, all of this was already articulated to you, showed to you in the numbers, and you decided that your individual greed was more important than the business that you were running. And, you know, if that’s your mode of operation, feel free to find a new CFO, which I left shortly thereafter. But I did get through immigration that day, and on the flight home, my passport fell out of my backpack. It was U.S. immigration in Toronto. Okay? It’s somewhere on a 737, flying around five years later.

Todd Merrill:

Oh God. They’re going to find it when they decommission it…

Bob Brogan:

…yeah. And so from then on, that passport will never leave my sight.

Todd Merrill:

Do you have one of those neck things where you can feel it just in case, under the sweater, under the jacket?

Bob Brogan:

Absolutely, Todd. Yeah. No, cause I always put it in the same place.

Todd Merrill:

Right. Yeah.

Bob Brogan:

And I reached in and I’m like, Oh no!

Todd Merrill:

That’s a horrible day. Yeah.

Bob Brogan:

Yeah

Todd Merrill:

So, did you just have to answer a few questions and then get through and show your job’s license kind of thing?

Bob Brogan:

Well, actually, because I was already through it and it fell out after immigration, technically in Toronto, I was in the United States already.

Todd Merrill:

So, you were on the good side of the line in that.

Bob Brogan:

Yeah. I was on the good side of the line. Otherwise, I would have been … oh, that would have been … absolutely no fun.

Todd Merrill:

That was one of the Jim Rogers, Investment Biker, I think, it was one of the books where he rode a motorcycle all over the world, and that was one of his learnings. It’s like, anytime there’s a trans, you know, a control checkpoint, get through as immediately as possible and then figure it out. Right? So, it sounds like you did that, you know, get through and then, okay. Take a breath.

Bob Brogan:

You know what? That summarizes a 40-year career time, Todd.

Todd Merrill:

Get through the checkpoint before you screw around. Yeah. Right?

Bob Brogan:

Yeah, right, right, right. Yeah.

Todd Merrill:

Right. Well. Hey, Bob, it’s been great having you here. You know, we could go on and on, but how can people get in touch with you after this? If they’d love to follow up on any of this stuff on the internet.

Bob Brogan:

Yeah, no, absolutely. Two ways that they can reach me as via email. That old-fashioned, bobbrogan2@gmail.com, or they can find me, Bob Brogan, on LinkedIn. Probably, we’ll be picking up my social media presence in my new firm, which is called Four B Partners. You can ask me why it’s Four B Partners.

Todd Merrill:

Why is it Four B, Bob? Who are these? There were three Bs.

Bob Brogan:

My nephew, I had a nickname as a child.

Todd Merrill:

Okay

Bob Brogan:

Bob Bucky

Todd Merrill:

Bucky. Okay.

Bob Brogan:

Yeah. Like, Bucky Badger.

Todd Merrill:

Like, Wisconsin?

Bob Brogan:

Wisconsin. Right. Exactly. Being from Wisconsin. So, Bob Bucky Badger Brogan.

Todd Merrill:

Oh, okay. So, you’re the four Bs. It’s got like four Hs but four Bs.

Bob Brogan:

Right, right.

Todd Merrill:

Okay

Bob Brogan:

It’s a little nod to my nephew that I just played golf in Orlando two weeks ago, a little nod to him, but we’ll continue working there. It’s been great talking with you, Todd.

Todd Merrill:

Yeah. Thanks, Bob. So, great having you and bye for now.

Bob Brogan:

All right. Terrific. Thanks.