Scope & Kickoff for Verity Market Study

Ei, how are you?

Good.

How you doing?

Good.

I had like a 30-minute-ish call with Richard after our last night call.

Yeah.

And I guess like no one ever explained, like, number one, Donna, not realizing what she was saying to Richard, said that Sean is being too accommodating. And what that— and there's a lot to unpack there, but What it was in the context of was he asked the question, why doesn't Mondo preload the trucks before they get there? And her answer was because he's too accommodating. So we'll unpack more later.

Yeah. Interesting. Yeah.

Hey, good morning.

Morning, Matt.

Good morning, sir.

Hey, JD, I got a question for you.

What's that?

What AI products are you using?

Claude. Okay.

That's what my son's been talking about.

Yeah, it's great.

The answer is still kind of all of them though, right?

Like, yeah, it depends. I mean, Claude is the most, uh, like powerful, I would say for if you're trying to actually generate something substant— of substance rather than just like spreadsheets or something and things like that. Yeah, the spreadsheet, not necessarily. I still find that kind of lacking, but if you're looking for like a, like a presentation or kind of just like a, like a, like a brief, like a summary brief from a call or something like that, it's good at transcribing and pulling out the key points from that.

Got it.

Yeah.

Is that what you use also to build those— find those APIs and kind of build that dashboard? I mean, yeah, in effect, for the last 2 weeks, JD has just re-engineered a bunch of SaaS platforms that like are getting crushed in the market, like Monday or Asana or, um, oh my God, what's that other one, JD, that Monday or— I mean, a Tableau, like the— oh yeah, basically, like, JD has built a bunch of dashboards outside of the ecosystem, and one of the companies still runs on a DOS-based system. So, you know, it's been around since before the internet.

Right.

But somehow it figured out how to, you know, generate an XML API thing to be able to feed into a dashboard we can all see on a daily basis, which has been pretty cool.

Yeah, we got to get in. We— our business here, our whatever you want to call it, our legacy business here, whatever, we really need to get on this shit.

I bet there's a ton of opportunity there.

Picking Brent's brain on just like, what does that even look like? He said that you guys were in the nascent stages of talking about that, but morning, Brent.

Hey, how are you guys? Good, good morning. Morning, JD.

So I might get a call while we're on, I might have to jump off, but okay.

All right, so JD, I, I appreciate putting this together. I'll give you credit rather than James, um, detailed and everything. I think so it's more of help me assess the risk and just being realistic, right? Like the timeline's the obvious thing, like, and, and it's tough to know until you get into it, I guess. But, um, that's one thing is just, okay, do we really think we can achieve this in, you know, the, the 6-week time period? And then the other thing as far as our scope, this is all great, But can we really answer these questions? Or what are our risks or gaps in trying to pull this stuff together? Right? Where do you— maybe position it other ways. What are the challenges you're going to see in trying to pull this together? Right? I'm not, I'm not scared as far as the engagement. I just more want to be realistic of, hey, we're gonna get this done, and we're gonna get this great deliverable, and it's going to guide us to a $20 million business or some kind of crazy exit, right?

So, well, I, yeah, I guess I want to, um, caution against the idea that the deliverable will be the, the thing that guides you to like an ultimate, ultimately successful business or execution plan, because I don't think that's our intention behind this type of scope of work because we don't know what is inside the business. We don't know what the capabilities of the business are. You guys are gonna know that better than we will. What we're trying to focus on is here is a, a comprehensive understanding of the entire industry that Verity could actually touch through their various lines of business and what they offer today. Um, I, I think we're purposely not trying to get into recommendations about what the business needs to do. One, because we just don't have the bandwidth to do that because it would require us to kind of get inside of the business and learn a lot more about it. Um, And two, that would take a lot longer, like you said, than what we're proposing here, because the, the risk to getting done what, um, what we proposed here— I mean, I don't think the only risks that I see are maybe on the interview side, where we're going out and getting into personal injury attorneys or life care planners that are actual registered RNs, and maybe just not getting the amount of information we want and having to redo that phase, um, of the deliverable for whatever one reason or another. We just— we feel like there's more questions that we need answered, or we want, uh, validation on some of the things that we've heard. Um, everything else, the information is out there. It just needs to be aggregated and, and, uh, analyzed.

Yeah, let me try and synthesize that if I could. It's that, like, What is the document? The document is not going to have an opinion one way or the other of whether or not Verity can scale to 20 million. The document is going to give you, like, 40,000-foot into lower altitude, but not in the weeds of, like, here are some, I guess, quantitative trends that can be extrapolated to mattering to this business. Um, and then from a risk standpoint, I would actually echo what JD said. The risk is that the, the qualitative piece on the interview side just has mixed results. We have no idea what that's gonna produce. We think that it'll produce something. There will definitely be like transcripts generated, but what that actually means to you guys, we, we're not sure.

Um, okay.

And then to your other question on talking to the team internally, We would, we would reserve that as maybe the last activity. We would like to go kind of form our own— we'd like to go learn enough to be dangerous before we go have a conversation with them, instead of taking what we get from them and applying that to every conversation moving forward.

Okay.

Hey, Brent, was the concern that we're going to do this and they're going to get like, why did you guys do this? —talk to them.

Yeah, yeah, right. I mean, it all sounds great. Let's do a market study or something like that. And, and the limitation could be availability of information or willingness for people to talk, and just you got gaps, right? And, and maybe there's a few nuggets to take away, but it's, um, right? And again, I get your point, JD. Like, I'm not saying that this is, hey Larry, we're going to do this and JD's going to take us to the moon type situation, right? I get that. But it's more of questions of the scope of 1, 2, 3, and 4. Like, 4 is probably a little bit more subjective as far as risk and trends, right? Because you're taking some pieces of information, trying to interpret it into what that all means.

Um, right.

But yeah, no, listen, we need to do something here. Here's the— here's what I'll say about the internal team. Um, You've got a couple people that have been into this business for a very long time that are very protective of it, right?

Uh, sounds familiar. Awesome.

Yeah, awesome.

I'm in, I'm in.

Where do I sign up?

The leader of it is also very protective of it, right? So I've, I've looped her in, man. I had a conversation with Sherry this morning just to let her know that we're going down this path. We're not trying to do something rogue behind her back.

Yeah, and how'd she take that?

Why are you doing that? Was the question, right? I mean, it's kind of the general question she asked me all the time, and I kind of gave the same thing. I was like, hey, we just want to know what— we talked about this a year and a half ago about doing something, just get a better perspective of what we play in and what this could be. Um, so again, you guys, you guys know better than me, you know. I, I would have thought getting some perspective from them is just like, hey, you don't come back with— and they say, well, we don't even do that type of work. It's similar, but it's not the same, right? That's all. Because I, I don't know that much, James, about it. That, that's my only point.

And, and like I said, I think we want to talk to them, but we want to do that last. Okay. Like, we think that that's where we'll be more prepared and the, the conversation would just be more constructive as opposed to what it sounds like is what the conversations have been like historically where it's like, there's kind of almost this logjam of like what each side is trying to wrap their arms around. Yeah, they know exactly what they want to do. You don't know what the industry looks like.

Yeah, I mean, I actually think if we were to start with them, we might get pigeonholed into one aspect of the business that we may not even get the opportunity to explore everything else that's out there because maybe they're singularly focused.

Okay, what about connecting with our largest customer, this Mark Simon? Where does that fall into the timeline, if at all?

It was really something we had on our list of like, if y'all felt comfortable, I would say we wanna put it in the middle towards the back, probably around the same time that we would— Okay. Talk to the team.

So, um, on that Mark Simon thing, that's where they're gonna get weird. What, what— maybe we should kinda understand what you're gonna talk to them about. Totally.

What we were gonna suggest is that we generate a bunch of questions for one of y'all or someone else on the team to just kind of moderate? So less us leading and more someone closer to the business. Okay. Out front. Because we don't— we don't— we were gonna actually not bring it up until y'all kind of threw it out there. But we don't— we don't want to jeopardize that.

No, I like that, Matt. It could either be Sherry and I, or you and Sherry, or all three of us. Kind of on the call, right? I think at that point I want to include her just so we're kind of covered our own ass if Dina finds out that we talked to Mark Simon. Because I think—

yeah, I 100%. So I just— yes, I mean, if I was running the business and my 60% of my business and I found out that you two guys called them without me knowing, I'd be like, what? Yeah, yeah, yeah. So, okay.

Okay. Okay. What, JD, what, what do you need? What else do you need from us to kind of, from a kickoff, get going, additional information?

Um, I think confirmation that the inform— like what we put on that scope of work is actually what the market that you guys are trying to investigate. Like, I, I assume I, I, we have not done too much background information just from a like time. Like we don't have the time to like really get into it until the engagement is finalized. But I think just from our cursory understanding, like this is the information you guys need to make a decision on Verity here. So as long as you— I think, I don't— we don't need financials, like, because we're not focused on, like, the operating business. Um, we don't need employee or, I guess, key stakeholder interviews yet because we don't have the information to actually have an informed conversation. So I think if you guys are comfortable with this scope of work and what it looks like we're ready to get started. Um, in a couple of weeks we'll probably have more in— we'll have a more— we can have a more informed conversation about where we go from there, um, with your stakeholders. Uh, we've already got the sourcing lined up.

I think the main question is just like, is this— is how this is scoped ultimately going to be helpful for whatever outcome it is you're trying to solve for? Like, I think you both have spoken to like it growing to 10 or 20 million, but is the alternative kill it? Like, are y'all working around a, a kill or fill type decision here?

Uh, I don't know if we're there yet, right? Um, but if you're able to answer 1, 2, and 3 with some meaningful substance, I mean, that would be powerful for sure.

Well, and I think— I mean, I don't know if we'll kill it, but I think from a perspective here of looking at resources, we just would kind of not worry about it anymore. That's the right way to say it. But like, you know, like, it makes money now. It's not like it's losing money. And we just kind of go on and whatever. I mean, if you came back and said, God, yeah, this is a $50 million market, you know, you guys can get $10 or $15 million of it, we probably, you know, we'd want to jump into it. Yeah, right. And figure it out a little bit more aggressively. Like, we have a salesperson now— I'm gonna take a wild guess— isn't great. Um, you know, do we try to find someone who's better? Or we have another business that's kind of whatever, who has a— I think a pretty good salesperson. I mean, maybe they come over here if it's like a much bigger market, you know, I don't know. But I mean, I think there's some, some thought around— I don't think we would kill it. I think we'd try to find somebody to buy it. But yeah.

Okay, and look, we've found I think at least two sizable PE-backed operations, like two sizable PE-backed platforms that have been kind of rolling up across the sector. One thing I do want to circle back to is that Section 4 Brent. I agree it's probably the, like, most subjective, maybe crystal ball in nature relative to everything else, but I think what it's What I was thinking here is like, okay, what feeds the life care planning industry? If it's insurance providers or personal injury attorneys, what feeds them? Car accidents. And if self-driving cars gets to the point where total amount of accidents going— are going down, is that a headwind to the life care planning industry and its and its respective feeder industries. Um, so again, that's not really— that's not really going to be us being like, what if? It's more, what does— what does a— some body corpus of data indicate might be the trend and how? And then it's really up to y'all again to inform whether or not that's going to be at play here. Okay.

Yeah.

One quick question. When you guys think about this business, and maybe JD, this is something that we do want from them, is just you guys are marketing it as expert wisnet— expert witness, um, and life care planning, and then you have this other section of damage consultation. I guess, put differently, or put simply, the— when you think about this business, do you think about it more as life care planning or expert witness or some other thing?

Uh, I'll answer first. I look at it in tandem, the way I understand, right? Because I think there's a multitude of people that can prepare a life care plan. I think the differentiating factor is the experience for that testimonial or to be an expert witness, right? So I think it just puts a little bit more oomph behind the report that if they have to go to court, they've got the chops to back it up, right? And I think that maybe then drives the rates and then also some business, right? Um, but again, I don't know a ton, right, about it. And even in these calls, I— JD, I sent you the the one deck a couple of weeks ago, the PowerPoint, which was like 10 slides. And we went through this summer with Larry, them trying to educate us again on the business.

And I still kind of walked out of there like, yeah, that wasn't a very clear, like, yeah, deck.

But well, that's— see, and I think that's our concern because they don't understand the business either, or they just can't communicate it effectively.

No one's growing it, no one's thinking about what's next, what should we be doing differently, how are we, you know, whatever might be. I mean, it'd be interesting, are there transactions or any M&A going on in this space, right? Is there a consolidation or is it all fragmented owner-operators, right?

Right, as far as we can tell, there's two consolidators out there right now, um, and we have— we're digging into the— we would dig into the shops behind them just to see what we can give you in terms of peek behind the curtain there.

Well, it's interesting if there's buyers out there that we haven't gotten calls.

Right.

I, I gotta tell you, like, part of me is wondering if it's because— look, it doesn't matter.

Because they can't find it on there. And the other thing is they might be calling those folks and not us. That's the other thing. 'Cause I mean, I get calls, they're nonstop. And I know Larry gets them too, but now Larry doesn't have a voicemail at our office. So I think I get the vast majority of them, but they're, they're nonstop. Yeah.

So yeah, that's probable.

But—

PE firms.

Yeah.

And again, we've only been able to find 2 shops that are backing platforms right now. Mm-hmm. Could be more. No reason it couldn't also be attached to like kind of like a legal services or some other professional services like assurance. Medico-legal services type stuff. But, um, yeah, we'll cross— we'll cast a dragnet and just see kind of what's out there. Um, well, I guess just to reiterate, this document, we do 1, 2, and 3. That gives you what you need. It gives you at least— you're closer to being able to make actionable decisions.

Uh, yeah, well, I think it brings a whole slew of additional questions from there, right? But Um, yeah, that would be, that would be impactful for sure. Uh, okay, just see where we go. I mean, Matt, I had a conversation with Larry and he asked me, he goes, what business do you think we have in the Shakelee world of operating companies do you think I'm most excited about? And I said FMLA. And he's like, yeah, for sure. He's like, because there's not as many boundaries, it's recurring business contract. And we can grow this thing, right? So where you look at the other ones, it's kind of geographically locked in Ohio, or it's a, it's a race to the bottom on the group rating side of things on the workers' comp. So I mean, this is where— is this another one that get excited about? I don't think he's excited about it because he just doesn't know where it could go. So yeah, right. All right. So you're still gonna start de-fleeting, JD, while you're doing this? Is that—

I'm gonna say start as if we stopped. I sold—

we sold 2 vehicles last week.

Well done, well done.

We've got a bank call on Friday. We— that's our red meat for them.

This is my weekend project, Brent. I've got a— I've got a full-time gig that I'm working on, but I've got a baby and a wife who might be going back to work, so A little extra cash never hurt.

Just strap them onto your chest. Yeah. Yeah. So, okay. All right. I'll, I'll message you back. Me, Matt and I will have a conversation too, just to make sure we're aligned. And then, you know, really the delicate matter I think is just internally here, just keeping Sherry involved to some degree of, or at least aware of what's going on. 100%.

Cause she's gonna— the one that's gonna be Yeah. Yeah.

Okay.

Can I ask, is that the Sherry that's been with ShakeWee forever or Sherry that came with the business?

It's been with us forever. Okay.

'92, I think.

Um, what'd you say, '92?

I think that's when she started. Yeah.

Yeah, and if she went to Larry and said Matt and Brent are dicks, he, he, he'd side with her.

So just so you know.

Yeah, I get it. We've got a couple of those too. Yeah.

All right. All right.

Thanks, guys. Thanks. See you guys.