Industry Rollup Strategy

A strategy for consolidating fragmented industries by acquiring small operators, implementing systems, and scaling through both acquisitions and organic growth. The approach focuses on finding disorganized industries where individual businesses lack capital to scale.

Core Strategy:

• Target huge, fragmented industries with many small, profitable operators
• Buy initial business around $30M in revenue
• Add 30-40 employees to double revenue
• Provide capital that smaller operators typically lack
• Build systems that can be replicated across acquisitions

Acquisition Approach:

• Buy companies at 5-10x earnings
• Focus on "trash companies" that are undervalued
• Use first acquisition to build systems/platform
• Scale through additional acquisitions using established systems
• Mix of acquisitions (2/3) and organic growth (1/3)

Sales Strategy:

• Hire hungry salespeople with low base, high incentives
• Base salary: $25-35k with significant upside
• Target people who:
  • Can make 99 calls per day
  • Score high on "need to win" metrics
  • Score low on "need to be liked" metrics
• Expect top performers to build $1M book within a year

Key Elements:

• Heavy use of debt/leverage for growth
• Focus on 30% business growth rate
• Integrate strong software systems across acquisitions
• Move quickly - can go from formation to IPO in months
• Systematic approach to industry research:
  • Read industry reports
  • Interview 100+ experts
  • Build detailed growth plans