The Brutal Reality of Running a Family Business | Brian O'Leary (REOTEMP)

Transcript is auto-generated from the episode audio and lightly edited for readability. Tap a timestamp to jump the video to that moment.

0:00Who owns the wealth creation of the business? In the world of private equity, it's shareholders first, even though the shareholders did next to nothing to actually build the business. One thing that we try to optimize for here is sharing as much wealth creation as possible in the business with the people who built it. And that first and foremost is the employees. It's a tricky thing to do, especially with companies that are our size. So we're always just trying to find creative ways. What are some of the ways that you're able to do that, maybe just beyond monetarily? How have you cracked that code? Welcome to the show. I'm Gil Welsford, third-generation valve entrepreneur and founder of ValveMan.com. Join me as I hear stories, learn wisdom, and get industry insights. This is more than valves. It's business, legacy, and resilience. Let's get into it. Hey guys, welcome to our fourth episode.

0:59I am here at the Valve Manufacturers Association, recording from Alexandria, Virginia, and I am excited to have Brian O'Leary from REOTEMP on the show. Brian is a second-generation owner, so I'm sure we're going to get into some of that today. And we have been working with the REOTEMP family — or the REOTEMP business — for a very, very long time, and they are very innovative. They've been doing a lot of amazing digital marketing stuff. So I'm really, really excited to have you on the show, Brian. Thanks so much for coming on. Yeah, it's good to see you. It's been a while. The first time I worked with your dad, I think you were in high school, so it's making me feel a little old. But yeah, good to see you. You know, it's funny — I have a lot of people that literally knew me when I was like 10 years old. And I'm like, 'No,

1:57I'm an adult now.' Exactly, yes. So yeah, it's all good. Cool. So, Brian, I'd love to just start out — give us a little bit of a background of you and who Brian O'Leary is. You can also give us a little bit of a background of REOTEMP and how it started and where you guys are today. Sure. So I think I'm one of maybe five native San Diegans in the manufacturing industry, which is kind of fun. But yeah, it's a family-owned, family-run business since the late '70s, at least since my dad has been involved. I, like you, sort of grew up making dial thermometers in the summers in middle school and high school. I wasn't too big — I had fat fingers even then. Not the best tools to go about making small instrumentation. But

2:56no, I was just sort of surrounded by this business for a while. Went to school, didn't get into it right away. Took a quick little diversion into the entertainment world and living on the East Coast, and that was a long enough time to realize, no, this is a really good gig of a business. It's a good industry to be in. It's fun. It's exciting. It's rewarding. And boy, to be able to come back and live and raise a family in San Diego is kind of the ultimate dream. And still to this day, that's what I'm running — three boys all under 11, chasing sports and all that stuff. So yeah, living the dream. That's awesome. So I know we chatted a little bit before we started, but maybe you could tell us about what you did before REOTEMP, because I think you're actually kind of coming back

3:56home to radio, right? Getting back in front of the mic. Right. Yeah, so a very highly relevant experience for running a manufacturing company. I worked at XM Radio and then Sirius Radio, and then the merged company which everybody's familiar with now, SiriusXM, from when I was 21 through 26 or 27. I co-hosted a couple of shows on those stations — at Maxim magazine's radio station, Cosmopolitan's radio station. A super fun experience, especially at that age, at that time of life, being just a single 20-something living in New York, enjoying all the benefits that come with the entertainment industry. But also, I think, hugely relevant — I try to take as

4:54much experience from that into this line of work too, in two ways. One is you have to always be focused on your brand and how your audience is understanding you. That was huge, especially working not just in radio, but specifically for big brands — at least at the time — Maxim magazine and Cosmopolitan magazine. Just understanding what the brand values are and how you project that brand, and sort of the fun with advertisers and audience. Understanding that whole thing has been pretty relevant too, in trying to bring as much marketing, advertising, and branding experience and understanding into our business. But honestly, the biggest one, probably from a life-lesson standpoint, was

5:52that that was not an industry or a lifestyle that I could see carrying through to later periods of time in my life. I think being 23, 24, living in New York, seeing all of my bosses at the time who were 35, 40, 45 with young families, grinding the corporate grind, working 12 hours a day in hopes of getting the next promotion next year or two years later. In New York City, having to live an hour, hour and a half train ride outside of the city, because the only place you could afford a house in the suburbs to raise your family was that far away. It just didn't seem like a fulfilling experience. And growing up and seeing my dad running this business in this industry,

6:50having the time flexibility, being able to coach my baseball teams and being home for dinner — it was a really good anchoring point for me to understand how I didn't want to live my life, and to be able to really allow me to enjoy this business, and hopefully enjoy what I'm doing and not at all regret having gone a different way in life. Brian, you might not know this, but you and I actually have similar paths. I actually used to be in the entertainment industry. I owned a lighting design company, and we produced lighting for literally the largest country artist in the world, whose name is Morgan Wallen. And it was awesome, it was fun, but like you said — I mean, you're working from 8:00 to 6:00, and then you're going to a

7:47show from 8:00 to 2:00. Right. And when my wife and I were about to get married — I don't think we were engaged yet, but we were moving towards that path — I looked at this life and I said, this is not a life that I want. I want to raise a family. And that's when I ended up selling the business. But I want to get back to this, because you have a really unique experience in advertising and branding and that kind of stuff. And dude, I just have to say, you are just an absolute animal when it comes to your videos and your advertisement. Anybody that hasn't seen the REOTEMP videos, you have to go on their LinkedIn and see them. You just do marketing in a way different way than I think a lot of industrial manufacturing, boring businesses do it. Can you just touch on that a little bit?

8:46Like, have you seen that create any benefit, maybe from a recruiting standpoint or from an advertising standpoint? Or is it just more like, this is fun, this is how we're going to do it? I think it all comes down to authenticity, right? And I know that's a buzzword, but ultimately — and maybe this comes from the radio training too — the one thing in radio, and this is also a very different thing in radio than in podcasting or YouTubing or other things like that, is that you have to generate — at least in my experience, we were generating — four hours of live content a day, five days a week. And you don't have time to script that, to polish it, to run it by a committee first. You just have to say what's on your mind in the plainest English possible and let it out into the world. And I think, especially in

9:44the engineering-focused businesses, or just in manufacturing — and it's also kind of an American business ideal too — the lawyerly nature of our society is that everything runs through committee first, and we just boil things down to buzzwords and platitudes that don't end up meaning anything. Ultimately, you should just speak your mind. I think there's an incredible power to just doing the most simple thing, which is you just have to say what's on your mind. And if you are in a position to have a wider audience, that doesn't mean that you should be regulating or polishing exactly what you say. Just say it. There's no real magic to it. I love that, man. I think that's awesome. And it makes it more engaging. Now, especially with the advent of AI, I

10:40mean, it's so easy to say, 'Create a script for me.' And who can't just read a script? And it's very obvious it's not authentic. It'll be interesting to see, but I don't know if AI is going to be able to replace authenticity. It's the twitch of your eye or whatever it is, right? I mean, ChatGPT loves certain words, like 'grit.' Any time I see a LinkedIn post — well, first of all, it's the LinkedIn posts with the emojis and the checkboxes. Those have got to go, man. My entire feed is full of these. No, that's ChatGPT formatting, at least. But also, there are certain words that it always defaults to. I mean, 'grit' is one that if I ever hear that word, it's like, 'Nope, I'm done. That was GPT.'

11:38Yeah, that's not a word that people usually use. Yeah. But no, you're right. I think, as this AI thing plays out, so much more human-to-human interaction is going to be valued. And truly just having people speak their mind and not running it through filters or lawyers or committees is going to be all the more important and valued by all people, all consumers. And I know you guys really value relationships. That was a huge paradigm shift for us at ValveMan. When we first launched it, we thought, all right, we're just going to have this e-commerce website, and people are going to point and click, and they're just going to buy. And we made this shift. We said, you know what? We're actually going to use that as lead gen, and now we're going

12:38to build relationships with these people, and we're actually going to help them. And that's when ValveMan just absolutely took off. And honestly, I feel very comfortable in this AI world. First off, because everybody in the industry is seasoned, we'll say — which I'm sure we'll get into in a little bit — so they're not able, willing, or even knowing how to use Lovable or Replit or even ChatGPT, right? Yes. But honestly, when it comes down to just authentic relationships and being able to talk with somebody — whether it's online, maybe it's over the phone, maybe it's in person — just having an authentic relationship is something that is really important, and one of the reasons I feel just so secure in who we are right now, when a

13:38lot of other companies are like, 'Oh my gosh, AI is going to take over.' I'm like, well, we have relationships with customers. Yeah, completely. I mean, that's not going to go away, and like we just said, I think if anything it's going to become more valued, as there are more and more experiences where consumers of all types — whether they're buying airplane tickets or hotel rooms, or they're business-to-business consumers buying from distributors, manufacturers, etc. — are going to have so many bad experiences and bad engagements with companies who tried to take the automation way too far. And that's only going to further value those companies that have an outlet to not just talk to a person, but where the person they are talking to has the agency and the

14:37freedom to build a relationship and to help them. Because I think that's the next level of it, and it's something that we personally struggled with here as we've grown: to not create a rules-based business, but instead to create a values-based business. Ultimately — and this is the classic case of a well-known catalog company that is in our industry — you call up their customer service, and it's great. You can get a person. You're not stuck in an automated phone distribution thing. You do get a person, but that person can't do anything unless you give them either a sales order number or a part number. But what if I'm just asking a question about what part I need? Or I want this part number, but with this little change? And they're like, 'Sorry, just give me a part number.' It's like,

15:34why have that person there at all if they can't answer those questions? And that is a big issue with scaling: creating a values-based business where everybody feels like they have agency to do what is right by the customer, to answer questions, to go seek help when they need to, to be able to give the customer something when it's obvious that the company did wrong, without having to appeal to layers and layers of management above them, or these rules-based systems. So that's the other side of it too — it's not just about putting the humans in place, but also giving those humans the agency to actually solve problems. I love that, man. Thank you. Having these conversations is so amazing, because we just get these little snippets of wisdom, and I end up coming out of these conversations with so many

16:33notes that are just for me. I hope everybody else does too. Don't create a rules-based business; create a values-based business. That's awesome. We actually had a situation happen last Friday where one of our manufacturers that we sell for was supposed to ship a product on Thursday, and they didn't ship it. It was Friday, and thankfully they're on the West Coast, because one of our guys, Josh, one of our territory managers, called them — it was like 7:00 at night — and he just called them and said, 'You know what? Just ship it UPS Red.' And we got it to the customer when he expected it. And we lost money on the order, and I said to him, 'Dude, you did the right thing.' He's like, 'I hope that was okay.' I was like, 'You did the right thing.' Because at the end of the day, we told the customer that they're getting this product at this time. Hopefully they come back and they're a

17:31long-term customer, and that's what we want to be known as, right? But I think I could do even more of that — of trying to just be a values-based business. Yeah. No, it's super, super hard. I mean, it's been probably our biggest struggle — definitely the burden I've carried the most as we've scaled. In my time here, when I started, I was probably employee number 37 to 40, somewhere in there. And that was in 2007. And now we're at 170-plus. Wow. And even just on the sales side, within the sales bullpen — when I started, it was like five people that were all sitting right next to each other and could easily collaborate and easily share

18:29best practices, tribal knowledge, understand culture and tone, and how to build relationships. And it's really easy to have a values-based business there. But when you scale — at this time we have 20, 25 people or so in our sales department that are spread out over multiple states; even our inside sales team is split in half between California and Texas — it's a lot harder to nurture this concept. Because everybody wants to do right by the company they work for and by their boss, and so there's that natural human nature to get it, quote-unquote, right — to do good. It's just making sure that you shift that intention to do good towards the customer and not towards the company, and assuring

19:28that your employees feel like, in the long run, if they continue to do right by the customer, you will be doing right by the company. But it's such a hard thing to do, because ultimately we all want to please the people who are around us — and even more so in the very email-forward culture that is today. You're so much more influenced by the people who are close to you, within arm's reach, who are at the desk next to you, or your supervisor who's talking to you every day, and your customer is just an email. It's just continuing to nurture and foster that idea that ultimately our job here is to do right by the customer, and over the long run that is the very best thing to be doing for the company. But it's far easier said

20:25than done. That's awesome. Again, these conversations take us into just amazing wisdom. This is awesome. Thank you so much for that. All right, so I'd love to jump into the state of the industry. So I'm here at the Valve Manufacturers Association. Jason, my brother, and I went to the VMA national conference last October, and we're heading there again this October. And man, every company there — it's mostly manufacturers, owners of manufacturers, for valves specifically — and everybody there is owned by private equity. There just aren't that many

21:22second, third-generation businesses. That's one of the reasons that I feel this sense of responsibility to try to share a lot of this wisdom from people that have actually built the businesses. So, I don't know, man. Where are we going? What do you think? Yeah, I mean, all you need to see — the only pieces of mail I get, and the emails I get, and the calls to my cell phone — it's all private equity headhunters or brokers. It's just non-stop. And honestly, I get it, because at least in our little niche, in the instrumentation world, especially the mechanical instrumentation world, we're kind of all that's left that hasn't been swallowed up. And in one sense, I'm so torn,

22:19because in one sense, from a purely selfish standpoint, it is the ultimate tailwind for our business, right? We are still the nimble ones, the eager ones, the ones who have an actual long-term vision of where we want to go with the business. We are the ones that establish the values-based business, not the rules-based business, etc. There are so many ways in which we now have competitive advantages over our competitors that we didn't used to have when they had either their founders or at least permanent owners in place. So in one sense, it's hard to bemoan the trend. In the other sense, it's like: are we the last generation who's going to know how to build things in this country?

23:15Because you don't build great things with a bunch of tourist owners in the industry, right? These owners that come in, and the second they buy, they've already planned their exit. And they're looking to do X, Y, and Z in order to financially engineer this business, in order to get out of it with an X-percent return. And that works great for them — they're incredibly successful, so there's nothing against what they are doing — other than, from the broad industry sense, I think it's threatening to the American economy. I think it's threatening to the American employee. I

24:14think that it's just not part of the vision of the industry that we work in that I want 10 years, 20 years out, where we have a bunch of these zombie companies who've been rudderless for the last 20 years but are still hanging around because they have an install base out there that's still coming back on MRO. But they haven't done anything big and bold and innovative, and they haven't retained their employees, and they've lost all their sense of know-how. It just doesn't seem healthy. We see so many manufacturers, and then also competitive distributors — this is what's going on. And so Jason, my brother — he and I run the businesses together — we high-five each other, because we're — oh yeah,

25:10for sure — we're just like, literally, if we just stick around — same here — because, I mean, literally multiple times a day, somebody's calling me, emailing me, sending me a letter: 'Hey, I want to buy your company.' And they're always private equity. It's not like a Brian O'Leary that says, 'Hey, I want to buy your company, and we're a values-based business, and this is what we want to do.' It's always private equity, right? So I do find it really, really sad. I think there's a massive opportunity that a lot of people aren't taking advantage of, that are younger, to just honestly be in this industry. I've talked to some other younger people that are in this business, and we're like, if we literally just stick around, we don't even need to be good. If we just stick around — Warren Buffett's got a great little clip on that. It's like, time is the friend of any wonderful

26:07business, right? If you're in a wonderful business and you just are patient, it's your friend. Not to mention the fact that big things, and executing on big vision, is something that takes courageous patience. And I'm sure that you feel that way with ValveMan. I mean, you guys broke through that e-commerce ceiling in the industrial instrumentation world way earlier than so many others — so many other followers now. But it takes so much time and patience to execute on that goal. And where all of the great entrepreneurs of today, and where all the venture capital

27:04money is flowing, are the things that are instant satisfaction — the new AI companies, the SaaS companies. Those are much easier to scale 10x, 20x, 100x over the first three years of the business. The things that we do, especially in the manufacturing world — I mean, man, the things that are just coming to fruition here today, like we are building half of our pressure gauges ourselves in the US — that was a seedling of an idea in 2010, right? It takes so long and so much patience to make that stuff happen. There's no way, if we are measuring our business on quarterly performance

28:01and we are constantly looking at a three or five or seven-year exit plan, there's no way that you execute on some of those big things. And those big things are what leads to innovation. And there's just this stagnancy of innovation in the entire industrial valve, instrumentation, automation world, I feel — with the exception of a very few who are big divisions of huge publicly traded companies, like Emerson and Honeywell and ABB and so forth. So, Jason and I have said this: we are building our business for the fourth generation. And whether they want to come into the business or not, that's up to them. I don't want to force it on them, because my dad didn't force it on me. So I feel very blessed about that. But our decision-making is so

28:59different. It's funny — we're actually going through our values generation right now, and we're doing all these meetings and sitting down and figuring all this stuff out, right? And vision, mission. But we're building that because we care, and we want it. And we're literally talking about, does this fit within what our family — and I'm talking about just myself and my wife and our two kids, because hopefully my 4-year-old and my 2-year-old at least have the opportunity — is this something that could stand for what they do? But I think when you're making decisions that are just — I call them bean-counter decisions, right? You're just trying to boost profits for the next

29:57quarter and the next quarter and the end of the year — you just make very, very different decisions. You don't make long-term investment decisions. Yeah, totally. You know, and I think we're in the same position too, as any good business that has survived to the second and third and fourth generation. You've obviously succeeded to the point where you've built equity and wealth that has decisions to make as to what happens to it. And this is also where the whole concept of permanent owner versus tourist owner comes into play, too. I never heard that concept, by the way. I love it, and I'm going to start using it. Yeah. It's like, who owns the wealth creation of the business?

30:55And I think, in the world of both private equity, or to a degree some of these divisions of a huge, large Fortune 100 company, it's shareholders first, right? Even though the shareholders presumably did next to nothing to actually build the business. And what I'm about to say sounds super socialist — I just want everybody to know, I believe in the free market more than anybody in the world. I love capitalism. But one thing that we try to optimize for here, and I think is kind of the moral obligation of a lot of businesses, is you have to optimize for sharing as much of the wealth creation as possible in the business with the people who built it. And that first and foremost is

31:54the employees. And it's a tricky thing to do in our industry at present, because especially with companies that are our size, we're not quite big enough to be able to afford, or want to afford, the fees that are involved with having employee stock options — going to a private-company situation with employee shares. And definitely, the ladder to climb in order to go public in this country is incredibly high — from legal, compliance, finance — all that is off the table. So we're always trying to find creative ways to do two things. One is, how do we

32:52self-fund the growth of the company? That's a hard thing altogether, and especially in manufacturing, where the return on invested capital is silly low compared to other industries. The amount of inventory and machinery and space and working capital — not a whole lot in this business scales very well. It's truly a crawl your way to scaling. So it is pretty expensive to scale, and funding your own growth is really tough. So that's sort of mission number one for us: how do we make sure that we can fund our own growth? But then mission two is, how do we make sure that not just now, but in the future, we are constantly sharing as many benefits of the business with our employees? And that's not something that is in the

33:49calculus of most tourist owners, right? These businesses are income statements and balance sheets, and they are trying to optimize the numbers in order to get an exit and get out of it, and go on and do the next thing. And the people that are actually building the business are kind of left to fend for themselves. Or they'll give them golden handcuffs, right? And they're like, well, you only get this benefit if you stay for this long, because we have to sell the business by then anyway. Exactly. So how do you do that? What are some — if you don't mind sharing — what are some of the ways that you're able to do that, maybe just beyond monetarily? Or have you cracked that code? Yeah, I mean, we're looking at so many different avenues to do that, mainly from an employee-benefit side.

34:48Whether it's — first and foremost is time flexibility. But also profit share — carving off as much of the profit that isn't needed to self-fund the business, and making sure that is shared and distributed amongst the wide employee base as much as possible. And then the other things that we are at least investigating — we're not quite ready to pull the trigger yet, but I'm okay — we're pretty open book here, so I'm okay sharing it — is we're looking at ways of how you help wealth creation amongst our employees. So things like home-ownership down-payment assistance, or additional retirement funding, or kids' education funds — things

35:45like that, where you look at what the key levers of wealth creation are in this country, and how can a company really help participate in getting as many of their employees as possible on the ramp of wealth creation. But ultimately, I feel like there is a moral obligation for businesses and owners to try to do that as much as possible within the constraints of the business. And I think we're on the same page here, with young kids. The last thing I want to do, when I'm ready to hand over the keys, or when my time on this earth is done, is hand over this giant sack of money to our entitled kids, right? No — I'd much — and my

36:43parents feel the exact same way with me and my sister, who are both in the business as well. The wealth doesn't necessarily just belong to the people who were fortunate enough to own it at the right time. 100%, man. 100%. Like, what are you going to do with all that money? I've never understood what the difference between 2 million and 20 million and 200 million dollars is. There's nothing more that I would really like to buy. Yeah, all those levels, yeah. At some point, I think it's just a game, right? I mean, it's just a game so you can tell your buddies at the country club what your number is, you know? I'm with you. I'm with you. All right, so I'm taking us into a little bit of a different realm, but it's innovation. It's what we're talking about, right?

37:39Making long-term investments. You guys have done one of the best jobs of any manufacturer that I know in this industry in innovating online. And I mean, that's obviously one of my areas of genius. But tell me a little bit about what you guys are doing, if you're able to share, and how you're doing it. I can just tell you, at least from the Welsford Company guys — I mean, they are obsessed with your website. Everybody says REOTEMP is the easiest people to work with, and they're also the nicest. And I'm not just blowing smoke — it's really true. So how did that innovation come about? Do you have developers on your team that are working internally? Because that's one of the things we struggle with: developers don't know

38:36valves, but valve guys don't know development. So yeah, tell me a little bit about how that's been going. Yeah — and it's funny, because I think you've probably seen something similar in the e-commerce world over the last 15 years. A lot of those sort of slow followers, they do it because they feel like they have to do it. So they outsource it, they find a company to try, and it's just done poorly, right? So it's like, the things that you want to do best, you have to do yourself. Yep. Dude, exactly. I have said that so many times. Literally, the reason that ValveMan is the best way to buy valves online is because I was brought up around valves and I am directing how the website's run. We're not just taking ERP, paying somebody 100 grand, and saying, make me a website. Right, exactly. Yeah. So, we make pressure gauges,

39:34thermometers, RTDs, thermocouples. We actually are making some valves now — diaphragm seals, thermowells, all the accessories. And all of this stuff is super low-cost, or low-value for the most part, in the broader instrumentation world. This is pretty lower-cost stuff that is high-customization also. So it hits an interesting part of the cost-variety matrix: low cost, high variety. So it's just a natural pain in the ass to deal with, right? It's normally a business somebody would say, don't go into that one. No, exactly. It's a total pain. So I've always thought of ourselves far more as an industrial restaurant than as a manufacturer. Because we are in the business —

40:33we are like the Cheesecake Factory of industrial restaurants, right? A menu that is 100 pages thick, and you can customize — yeah, I'm allergic to shellfish, and I'm gluten-free, and this and that. And then you get the order, and you are expected to go and make it in half an hour and return it hot to the customer. And the Cheesecake Factory's version of half an hour is, for us, five days. We've always pinned it on that. That's been our constraint: we want to be able to deliver 90-plus percent of our product line in a five-day delivery time. And really, in order to do that, so much of it starts with: how do you configure it, how do you quote it, how do you turn either a verbal description or an email description or a picture of the product into a part number, without a

41:33catalog that is 1,000 pages deep and super complicated and super ripe with opportunity to configure a part number that isn't physically buildable, right? There are a ton of if-thens, a ton of exclusions in there. If you have this size head, you can't make this range. If it's this length of a stem, you can't do this on the connection size. There's so much of that. So we started in 2005, I want to say. It was my dad who started building a lot of this stuff in Excel to help our own inside sales people quote RTDs and thermocouples — the stuff that was way more complicated to do than, say, a simple dial thermometer. And so we built a lot of these internal tools that were working really well for our own inside sales, in order to just make it

42:30a little bit easier and quicker and more convenient for our inside sales to answer questions for our distribution partners. And it happened just right at the same time that Web 2.0 was occurring in web development, and our website was starting to broaden out. And it was right at the time that I came, too, where I said, Excel's great — except this is before Google Sheets. You couldn't even share the Excel file, right? You couldn't have multiple people in the same Excel file. The rev control on Excel was crazy. It was so complicated. Every time somebody went in there to change a formula or a price, you'd have to save it as file number 102 now. So it was like, no — let's take this and let's apply it to the website. And so that's really how it started. It was an internal tool, and we said, hey, let's just open this up and

43:26make it all web-first instead of internal, and open it up to customers, to distributors. And then from there, it's been the thing that my dad has focused on almost exclusively for the last 15 to 18 years. So he's really been the primary driver of all of it, and doing, to your point, what you were saying — the product-management side of it, which is: which parts of this product do you choose first in order to determine what the exclusions are later on? How do you do this so that, at the end of the whole process, the customer can get a drawing — not just a part number and description, but a physical drawing of the product? Which, that's really our secret sauce. I was going to say, man, that's what

44:23everybody's like — oh my god. Nobody else has been able to figure that out. And I'm not going to share any secrets here, but it's shockingly simple. But again, it comes down to the fact that if you don't have either senior management or executive-level people with their fingers in this, and doing it yourself, you're never going to figure it out. You're not going to be able to outsource this. You're not going to be able to send this to a web development team that is just trained in computer science and marketing or something. No — you need to understand your product and your business in order to really do this well. And, just going back to the tourist ownership: there are just fewer and fewer people who even know the business well enough to do hard things like this. So that's the secret sauce. Is your dad still in the business? He is. Oh, I didn't know that. Yeah, he'll

45:20be 80 next year. He and I share an office, because he's only in one day a week now, but he's still chugging away on all of those configurator projects. He's got his own Jira board of items — either fix-its or new things that we're working on. We're starting to implement AI deployments inside of our configurators. So yeah, we're trying to stay on the cutting edge. But it all comes back to the main constraint that we feel in our business, which goes back to that whole industrial restaurant concept, which is: we feel like it needs to be convenient enough for a distributor, a customer, an end user — like a reliability engineer at a plant — to be able to configure any one of the 100-million-plus permutations of a part number that you can get from our configurator,

46:19to do any one of those in a couple of minutes — the amount of time that it would take you to flip through a Cheesecake Factory menu — and then to order it, and then to have us build it in five days. And ultimately — you talk about the big vision for the business and the things that we have to be courageously patient for, but at the same time eagerly aggressive to execute — we ultimately want to get that five days down to two to three days. Wow. And just slim our business down as much as possible, and ultimately have REOTEMP be the resource for all of our stuff, in order to get high-quality, American-made product conveniently in two to three days. And we feel like if we can do that,

47:15if we can execute on that within the next three to five years, then we've got a moat the size of the Pacific Ocean around us. Nobody can knock you off your block. Yeah. Dude, that's amazing. Well, I have to thank you from the Welsford Companies, the FSW Group side. Our folks are literally just obsessed with working with you guys, and you guys get more business because of it, because it's just easier to work with. I have a quick funny story about knowing more than, call it, the tech guys and the marketing guys. We always had our menu on ValveMan — and I feel like an idiot even saying this, that I let it go on too long — our menu was SEO-based, right? They would be like, oh, this keyword is best, so we're going to use the word

48:13'ball valve,' or we're going to use the word 'motorized ball valve.' So we had all these different words in our menu. And one day I was like, you know what? I'd had enough. And I just sat down and I wrote out, as a valve guy, how I would like to go through a valve catalog, and what I would like — two-way ball valves, three-way ball valves, butterfly valves, check valves. And I presented it to the SEO team, and they're like, that is going to tank your site. And I said to them, you know what? I literally don't care. I only care about usability, and at the end of the day, I feel like if we create the best usable website, it's going to work out. And so it was a huge project — I mean, it was a six-month project, because we had to rename all of our products and reconfigure a lot of things. And we ended up launching it earlier this year, actually. And the site just took off. They were

49:11like — so of course now my SEO group is like, oh yeah, well, when we launched Mega Nav — we called it Mega Nav — of course, thankfully we were there. I'm like, guys, you were the ones that were naysaying this forever, right? But it's since made it just very usable. For instance, no one looks up the word 'two-way ball valve' on Google. No one says, 'I need a two-way ball valve.' But we have two-way ball valves and we have three-way ball valves, so they're differentiated on our website. I honestly don't care, because I want to not just show up on Google — I want to be the easiest way, the smartest way to buy valves. And when you go on a website, you either need a two-way valve or you need a three-way valve. There's no in-between, right? So, just those types of things. Again, only a person that really knows what they're doing, like

50:09you said — executive leadership that's just in the trenches, getting their hands dirty — is able to make those decisions. So. Yeah, and I think what you're also reflecting there, too, is you've taken the time to get to know your customer and see the world through the eyes of your prototypical customer, right? And I remember that was a big leap for me as I got out from under the roof a little bit more, in 2009, 2010, 2011 — really trying to understand customers as much as I could, especially as we were building our pressure gauge business, because our temperature business had been established for a while. Understanding our pressure gauge business, understanding the value that pressure gauges bring to the customer — like, first of all,

51:05customers don't care. We care a ton about a pressure gauge. But understanding the fact that nobody else, other than us, is going to care even 1% as much about a pressure gauge as anybody else, right? It doesn't feed into the automation system, it's not cool and fancy — there's nothing that matters. Literally, the only time in the world in which a pressure gauge in a heavy industrial environment matters — so, it's one thing for fire extinguisher gauges or fire sprinkler system gauges; those have some importance on a daily or weekly or monthly basis — but in a heavy industrial world — refinery, chemical plant, power plant — the only time the pressure gauge matters is when there's a problem. That's what I was just going to say. It's only when there's an issue, right? Right. It's like, oh, there's a fire in the

52:02refinery. The first thing they do is they're going to shut the power off to that unit in order to not feed it anymore. Which means, when you send operators, firefighters, troubleshooters out there, all they have is their mechanical instrumentation, right? Yeah. The second I understood those two things — that, A, nobody really cares about this all that much on a daily basis, and B, the only time they care is in a dire situation — that ultimately changed the entire vision of how we go about the pressure gauge side. Which is: a pressure gauge isn't a measurement device. A pressure gauge is a billboard. It's the only thing out there where there is a dial that people's eyes are naturally attracted to. I don't know if it's because we are attracted to looking at clocks and speedometers on our cars, but for some reason the

52:59dial is like eye candy. And so it's a great place to either share things in an industrial environment, like safety notices, or to contextualize the reading — hey, if the pointer is not here, you've got a problem. Yeah. Or put right on the dial something like 'hot acid service,' 'hydrofluoric acid,' or something like that. Because in the midst of a catastrophe or a problem, you're going to need to know — the people that are out there aren't necessarily trained in what the proper reading of that thing is, or even what the product inside of that pipe or vessel is, but they'll be looking at the gauge. This is your chance to share that information with the presumably untrained person who's looking at

53:56it. And it was that understanding of our product through the lens of our customers, and sort of having the humility to understand how little our products matter in the grand scheme of things in their world, that really changed so much of our approach to how we handle not just gauges, but all of our other instrumentation too. Which is: look, our fundamental value to the customer is either convenience — hey, I don't care about this thing, but I've got a requisition to order it, so if you're the easiest place possible to order it, then that's where I'm going to get it from — so one is convenience, and two is customization. For the reliability engineer that cares about the safety of the plant that is under their ownership, they're going to go and make sure that

54:54all of these billboards, all of these safety indicators that they've got throughout the plant, are reflecting the things that they want. And once we understood that, it sort of changed the whole way that we organized our business — to go back to that industrial restaurant concept — where we're not trying to sell a commodity product one pallet load at a time, of some standardized thing that's going to sit on the shelf and move off a distributor's stock. No, we want to be where you can order one piece of a custom range with a custom logo, or a custom indicator on it, and us get it out the door real quick and easy. And that was a huge breakthrough for us, and it has led to the majority of the market-share gain that we've had in the last decade or so. That is so cool. I love that. Yeah, and I do know that a lot

55:52of the stuff that you guys sell has customized dials and logos — it might be green-yellow-red, or yellow-green, or whatever like that. That's really interesting. I don't think I've ever thought of a pressure gauge as a billboard. I actually keep just a couple customers at all times and service those customers, and sometimes it's a pain in the ass, because I'm like, oh my gosh, I need to be working on this other stuff. Totally. But first, I think it builds some credibility with my team, because they're like, oh, Gil actually still knows how to sell. But the other is, I really get to understand how a customer works, and would it be helpful if we created this customized omnichannel selling thing that we're doing, or whatever it is — or should we just not do that? And it

56:50really is very helpful. And again, it kind of comes full circle in the conversation — it comes back to having a long-term outlook, right? Like, I don't think some of these private equity owners are selling instrumentation on to the customers, right? So. Yeah, and in looking at the future there, too, is finding people — and they don't need to be — I think the other thing, too, is creating second, third, fourth, fifth-generation companies doesn't necessarily have to be about bloodline. Sometimes — and that's what I think our industry needs — is more apprenticeship programs, shadowing programs. You look at some of the really successful transitions of leadership, even at huge companies, right? Like Andy Jassy, the current CEO of Amazon — he was Jeff Bezos's technical advisor for a

57:48decade or so prior to taking that over. He was, in essence, his shadow. Tim Cook was Steve Jobs's COO and shadow for the five or so years prior to Steve dying. And at smaller businesses, I feel like that happens less, and maybe some of that is because there's this expectation: oh, it's either passed on to the family, or the family's just going to sell the business to some rando. But I almost think that maybe that's even something that we need to cultivate more in the industry — these concepts of apprenticeships, mentorships — truly identifying leaders of the next generation and making sure that they have similar experiences to what we got as kids, of being able to see multiple parts of the business, and not just

58:44going out and — whoever succeeds me as CEO, the last thing I want to do is find somebody who was a CEO of a hundred-million-dollar valve company and just say, okay, it's your job now. It's like, but you don't understand our business. Well, you know, it's funny that you say that, because episode two is with Bruce Broxterman, and he's a perfect example of that going well. Gil Richards founded the company, Richards Industries, and Bruce was basically his right-hand man, and eventually he sold the company to Bruce and a couple of the other guys in the business. But yeah, no, I think that's awesome. Well, Brian, I really appreciate this. This has been a really fun chat. Honestly, it blew away any expectations — not that I had any expectations — but this

59:42was awesome, man. Some of this wisdom that you shared is incredible. Don't create a rules-based business; create a values-based business. Man, that's going on a wall somewhere. I love that, and thank you so much for that. I took a lot of other notes, too. But yeah, thanks again. Appreciate it. Looking forward to continuing to work together and having another 20 years together as businesses, and growing together. Same here. Yeah, and I look forward to seeing the success of the podcast, too, man. Congratulations, and let it roll. I want to be back for episode 50 or something like that. My goal is 52. I want 52 episodes. So, there you go. There you go. Awesome. All right, thanks so much, Brian. Have a great rest of your day, man. Thanks, Gil. See you. Thanks for listening to Fully Open. If something stood out or sparked a

1:00:39thought, I would love to hear it. See you on the next one.