Born Scrappy
The go-to podcast for scrap metal exporters and traders
Born Scrappy
S2E14: Boots on the ground with PNW's VP Sean Daoud
In today's episode, I’m joined by Sean Daoud.
Sean started out as a scale operator and has worked his way up through the ranks to become the Vice President, Treasurer, Director and Shareholder at PNW Metal Recycling.
Last year he was awarded the ISRI (ReMA) Young Executive of the Year and he was recently elected as the Secretary/Treasurer of ReMA - congrats Sean!
He has over 15 years of industry experience, an MBA in Finance, and is an all-round great guy.
In today’s episode we talk about:
- Combining data and gut feel
- Being boots on the ground
- Managing key person risk
- Leading by example
- Financing growth
- And much more!
WHO IS STU KAGAN ANYWAYS?
25 years in the metal recycling game and still learning and growing...
I learnt from the best and worked my way up from yard labourer to Executive Director of Trading and Operations for the largest metal recycler in sub-Saharan Africa. Responsible for 4,500 employees, 85 sites, and the overall profitability of a multi-billion dollar operation.
I brought my breadth and depth of knowledge to bear and co-founded the fastest growing, most-loved, and most awarded metal recycling company in New Zealand. No small feat in a country where people are outnumbered 4:1 by sheep (spoiler alert: sheep don’t produce much metal waste).
I thought it was time that tech worked for our industry, so I took all of my experience as an operator and trader and leveraged that to build THE killer scrap app, Buddy. That’s right - built for scrappies, by scrappies.
Father of two crazy-awesome boys. Husband to Lisa. Under 9 rugby coach. YPO member. Lifelong learner. Mentee. Mentor. Chief dog walker. Committed Stoic. Undefeated dance-off champion.
COME SAY HI ON LINKEDIN
Hi, I'm Stu Kagan and welcome to Born Scrappy, the podcast for scrap metal exporters and traders. Join me in conversation with some of the most experienced traders and operators that have helped shape this incredible industry. In today's episode, I'm joined by Sean Dowd. Sean started out as a scale operator and has worked his way up through the rings to become the vice president, treasurer, director, and shareholder at P& W Metal Recycling. Last year, he was awarded the ISRI, or ReMA, Young Executive of the Year award, and he's recently been elected as the treasurer of ReMA. Congrats, Sean. He has over 15 years of industry experience. An MBA in finance. He's even helped me change a flat tire and is an all round great guy. In today's episode, we talk about financing growth, leading by example, managing key person risk, being boots on the ground, combining data and gut feel, and so much more. So let's jump into it and hear directly from Sean, but first intro. Hey, Sean, how are you? I'm doing good. Thanks for having me. Yeah, man. Um, good to have you on the show. It's great because when, when we're recording this right now, you've just been appointed the treasurer of REMA. In fact, the first treasurer ever of REMA. Is that right? Yeah. Last, uh, last week at our, the last ISRI convention, we rebranded to, uh, REMA Recycled Materials Association. And at that, uh, At the convention during our closing board meeting, I was voted in as the newly elected secretary treasurer. I did see you've got a financial degree, don't you? Yeah, I've got a degree. My first undergrad was human resource management. I have an MBA tailored to finance and then two classes short of a baccalaureate in accounting. I probably should go back there and finish that sucker. Right. So this will be interesting. Cause not everybody we speak to are academics and necessarily learn in that way, everybody we speak to learns in a different way, everybody in the world learns in a different way, and I love having the different aspects. So great to have you here with all that behind you. Um, And being the first treasurer of Rima is quite exciting, right? Because there's been a lot in history before you, but, um, you get to path the way we'll make the path now, um, for the new association, which is pretty cool. And I got to be honest. Um, although this is going to come out in a few weeks time. Um, so it might seem a bit old. I absolutely love the new name. Like what the guys have done is incredible. I was sitting the other night at a dinner with a few friends and when I explained to them, I'll rebrand. Honestly, the one guy said to me, Oh, now I understand what you do. And i've known the guy for maybe 10 years. He never really got, he just saw junkyards. That was all he ever saw until I said Recycle material association. I was like, oh, okay. I get it. So Phenomenal work the guys have done. It's it's funny that you say that I was on a call earlier today with a networking group for communication companies up in Seattle. Right. We were talking about some, some hot topics in the industry and, and when we shared, you know, we're with Isri, you know, or, or Rima, formerly known as Isri, the gentleman on that was leading the calls. Now I finally know what you do. Same thing. So it was, uh, I think it's just to the point from the, uh, Maslansky group, right? This rebrand is really helping external parties understand what we as recyclers do every day. Yeah, exactly. Um, let's find out more about Sean. So tell me what you do on a day to day basis at Rivergate. Um, cause Rivergate's the metal recycling business, right? Yeah, exactly. So explain that a little bit and tell us what you actually do on a day to day basis there. Yeah. So, so, uh, family business, right. It's called P& W Metal Recycling, and we've got a couple of DBAs. Rivergate scrap metals, R. S. Davis recycling, and a few others where we're a merged entity of two different families, two different family businesses, three different families that came together a few years ago. And now we have foreign ownership with the Tochu Metals as an owner in our business as well. We are processors, right, of metals. That's the main thing that we do, whether it's ferrous or non ferrous. We've got five locations in Oregon, three locations in Washington. And, you know, what I do every day is, you know, help manage our financials, purchase materials, sell material, you know, uh, get in the machinery and move, move equipment, move metal around, communicate with logistics. You know, the handle our, you know, PR items, right? Um, government affairs, obviously the interaction that I have with Rima and the local chapter in Pacific Northwest. And, you know, when you're a family run business, right? You're jack of all trades, master of none and kind of have your responsibility shift every single second a day, you know, whether it's having to go talk to a customer on the scale to make sure that they're happy, or you're dealing with the vendors repairing a piece of equipment, you're buying something, you're traveling to learn about a consumer or what they, what their needs are. So. Lots of different responsibilities every day. Okay. So I wanted to clarify that you're not just the bean counter. You're not the accountant that's sitting in the office. Um, you are the next generation you come in and you're having to do everything. Yeah, myself and three other, uh, children are in the business, right? So my dad is one of our founders. George Bores is another founder and his son, Justin, works in the business. And then another gentleman, Mick and his wife, Bever, another founding couple of our business with their Children, Hank and Jamie are in the business. So there's four kids and yeah, we're boots on the ground, you know, running business every day. And I can remember my first day in the yard. I was two weeks after turning 18 fresh where I could legally work, right? Uh, should work before and grown up around it. But You know, Hey, there's a, there's something you need to clean up in the driveway. Go take care of that and push a broom and direct traffic. And there's a piece of equipment you need to learn to run and fix. And yeah, I mean, it's, it's a rule of thumb from our parents that we learn the business at every level, because when you're directing how the business is going to grow and run, right. Like our parents were doing for a long time and they still do. Um, you know, and we do that together, right. As a team. We got to understand how everyone fits into place and what each position means, because if you don't know what, wrench needs to be turned or what hammer needs to be replaced, you know, what hose line needs to be, you know, tightened or whatever it might be, you know, you don't get what the business needs, right? And I think that that helps our group is why we're so successful. Look, you, you're preaching to the converted. And I think, um, most people that listen to this over time, if they didn't believe it before, um, now know that you have to learn by being hands on in this industry. For sure. Um, you mentioned earlier, one of the things you do or have done is buying and selling metal. Can you think of a. Pivotal trade experience, something that either went wrong or went really right. Um, that you learned a hell of a lot from, uh, Zorba. so I trade ours are, are shredded metals and are not fair shred, and I can remember when the new Chinese regulations were coming out in, in 2019. And having discussions with, traders at the LA convention years ago, and talking about what was going to happen with pricing and how things were going to go. And, that was at the point in time where we had decided we need to put in this new downstream we installed in 2020. Uh, so we're, kind of moving and messing along. And so that, that instances where trade was changing so dramatically, we knew we needed to put in this new pieces of equipment to be able to make the greater product. That, you know, we were going to be successful to do and, you know, maybe we get some of the best Zorb on the west coast. I hope we do. Um, you know, but our quality has been so consistent, but I remember that because we were having our crew stay late to hand pick on the pile, right? I was getting on the pile the other day, pulling things out, just trying to get to a new work. At that time, I think a lot of companies were switching to quality over quantity, right? And especially if you had archaic systems or your systems weren't as advanced as some of the bigger players, you couldn't get every ounce of quality product you wanted out. And so you're spending more time and money to do it. And so that was probably one of my, I wouldn't say my, my favorite times, right? Because obviously spending money and transitioning is difficult, but it was definitely one of the times where you learned it. We need to stay ahead of the game, right? We need to see what trends are coming down the pipeline. What what technology is there to help me, you know, quality specifications or trade specifications and how do we make sure that we're staying ahead of the game? So our system now in regard to trading, right? Gives us the ability to, add on to it and, add sorting equipment that not any other player in the game has. Right. We're able to change that. So it's not necessarily a trade situation, but I guess more of a time frame in trading that, you know, has kind of opened my eyes and. Help us kind of look at more being proactive versus reactive. No, that's a great example. It doesn't have to be a specific trade. The period. I mean, I remember it well, but just to say, you know, you said, um, it was a great time for you. It was really important. And it was because what you learned was that you have to stay ahead of the game. What you learned was it is so important to know what's coming next. And if you can be ahead of it, um, you know, can change the trajectory for your business. George Adams spoke about it with his shredder that he put in when he put in his first mega shredder, how it absolutely changed the outcome for his business. I remember 2017 quite well. Um, the year before I had moved to New Zealand, um, and left South Africa. And I was working at Sims for a really short while. And while working at Sims, this all happened, right. And China didn't want any sort of, um, impurities in their Zorba or any of their material. And you can imagine being at Sims, right? I mean, the volume that they were handling of Zorba that they had to now really focus very quickly on. Cleaning up their act. And it wasn't, you know, it wasn't that they had a dirty act, but it was that everybody just made a, made a Zorba product that was standardized and everybody was fine with it. I remember being there and then them arriving from Australia and having to look at putting a new downstreams. And I was looking at the, the, the amount they were going to spend. And I remember at the time thinking, this is absolutely ludicrous. And I'll be honest, like I didn't see it worthwhile. I was like, just open other markets. It's like, when this happens in China. Other markets are going to come and open up and I was wrong and I'm quite happy to be wrong and it's great learning, experience. But I was like, you guys are spending way too much money. Just find a new market for your Zorba. It might affect the price slightly, but the cost that you're going to incur to go and make a cleaner product will be offset by, um, the slightly lower price. I was a hundred percent wrong. And the right thing was to get rid of all the impurities and sell it as a premium. But, um, Yeah. Those were, those were interesting times in 2017. Everybody, you know, the goalposts were moving and everybody was having to change very quickly, the way they operate. And it wasn't just Zorba. No. Yeah. It was all the commodity to be a local. I remember honey, right? I mean, honey used to be able to have a certain amount of brass impurities in there and all of a sudden containers were being stopped and opened and they were sending them back and saying, sorry, this is not allowed in the country. And you're like, but that's honey. That's like our regular honey. We've done it for. 10, 20, 30 years. Um, and everybody had to change very, very quickly. So, yeah, I remember that well, um, when you are selling your material, right? You said you sell the shredded, non ferrous material. How are you deciding who to sell to, especially if you're bringing on a new buyer, um, I'm guessing you do travel quite a bit, um, or definitely people in your team travel quite a bit. How do you decide that somebody is the right person to start selling to? Yeah, I think that's probably the, the, everyone had the perfect answer for that, that wouldn't be in the business, uh, you know, to be retired on the beach somewhere. You know, we do it a little differently, maybe the most or the same, um, you know, referrals, right. From, from other companies that, that sell similar products to us, you know, the random email that you get, do a little research on the company traveling to, you know, the Rima convention, uh, MRAI, DIR, right. Those different places. Um, You know, embedding who you're selling to. That's a part of it. You know, and when we're making a decision on who to sell to at that point in time, we're making sales. Portland is a very interesting market. Container freight is a little difficult. From our neck of the woods, it's not like Seattle Tacoma or or San Francisco. We don't have great access. It's a lot of different countries. And so we're pretty picky on who we sell to, because they need to be able to get bookings. They need to get the transportation so we can get the material out the door. You know, we also consider the price. That's 1 thing, but top price isn't always necessarily what drives us to sell payment terms or another 1 that comes into play. Right do they qualify for trade insurance? You know, all their different factors. I mean, there's a lot that we put in there. Yeah, because you have the 4 stories from 08. People not getting paid in time, right? You go off to 2015 and you go, we went through that scenario in our industry and same thing, right? Companies weren't getting paid and, you know, you burned a, you, there were some bridges burnt, right? And in that timeframe and companies definitely got shuttered because they weren't getting a are so paid in time, right? We're getting cash back for their inventory. So we have a pretty rigorous and thorough process to make sure that we don't experience that again. Because. We have and luckily we're able to get through some of those periods of time. Most of the vendors paid us back historically, but there's been a couple that didn't and luckily that dollar amount didn't amount to too much. But you just don't want to go through that again. Right. Especially when you're, you're larger and you're, you know, you're for us right bank debt funded for our growth and. And, uh, you know, equity funded now, you know, we've got, we have to be very thoughtful on how we, uh, go through that. Sorry, not equity funded, right? They own our business, but went through the equity around it to, to help, our growth. So it's pretty thorough and, and, uh, uh, some probably to the dismay of our customers, a hard process to go through, but luckily we have a good group of people and they jumped through the hoops and we've got a very, very good path of who we sell to. You made an interesting comment. You said one of the ways that you find is if you get an email, you do your due diligence and you, um, and review who they are. It's like, you can't do that to everybody. I, I still, I don't even sell any metal anymore. And I get thousands of emails from different buyers around the world. If we all checked every email and we wouldn't do any other work, especially when you register for like the BIR or the MRI, I, And they have your details, the amount of emails that come through are absolutely ludicrous. So just in case anybody's listening and heard Sean say that he reviews all the emails that come through, um, not all of them, I would have to say. Put the word consume in there and I might take a look. Yeah. Okay. Yeah, exactly. If it's getting to an end NGs, I might get a better price. So then let's flip it on the other side, Sean. So you also being involved in so many different aspects of the business on the buying side to get the metal in the door. What do you guys, what do you think your strength is and where do you really focus on to make sure the material comes in service and it's not necessarily physical service of equipment. It could be, you know, providing a truck. It could be the service stuff. Let me help you find a better logistics route, right? What information do you need? What market intel do you need? You know, constantly having contact with that supplier, but we've got a pretty good team myself. My father, Hank, Justin. JB, JB, I'm naming the names, right? Scott, Garrett, we have a lot of people that are involved in purchasing. And, you know, we don't do it based on, on locale, right? Location. We do it based on relationships. Who has the best relationship with that said company. And can they, you know, interact with them? Well, get the most out of them. Right. Can that company get the most of the person dealing with them as well? So services is our key point. Price isn't going to be, sometimes you're great on price. Sometimes we'll have the best price. Um, but most of the time, it isn't that right. And so we want to make sure that they know they pick up the phone. They're going to get a quick answer. Right or they're going to, they'll know the response is going to come quick that they get the support that they're looking for. And that's services. Bar none probably that sets us apart from our competition. And you've got to be quite careful because when you grow right, the way you guys are, um, you can start to have problems because all of a sudden you've got new levels and you might have these standards up at the top and the way you've always run it, but now you've got multiple yards and they've got people there that are servicing customers and they not necessarily, and I can give you example of some of the biggest multinationals in the world, in our industry. Have terrible service. They don't even answer the phone sometimes just because they have employees there that never really been told that this is how it works. So if they have, they don't really necessarily care. That culture is so important. How do you make sure that that rolls down into every single level in your company? Set the example, right? if one of our managers calls us or team members calls us, we acknowledge that they call, you know, if we're busy, we'll call you back, call them back as quick as we can. Uh, you visiting the facilities communicating not only with the management team that's on the ground, but the staff that's on the ground. Right? And Executing that way with that, I think it's presence as a part of it. You know, owners kind of take a path on on where to help, you know, who is over certain regions or yards. And just making sure that all our expectations are met, but at the same time, you know, being open to their feedback, right? And it's a two way street. That's what business is. So regardless of, you know, if you're the owner of the business or not, right, you need to be open to what they have to share. And I think that's how we set that culture in our companies to let them know, you know, we, yes, we have done this for a long time. Right. But we also have team members that have done it for a long time that have worked other places. And if there's something we can improve on, you know, we want to do that. So again, that's a service, right? It's it's how do we serve our employees? Right. And again, same thing, you know, they want to serve us as, as team members and, you know, it's strong team members. We have a great team. I mean, I don't know that you'll find a better team in the Pacific Northwest. We're very blessed to have who we have, but I'm sure we're, I'm biased. Right. But I think that's the, you know, the word service kind of goes both ways, whether it's to your suppliers, vendors, customers, your team members, right. It's how do you. And I guess maybe a servant leadership is kind of how I would look at it. Right. So that's how we do, do have a good culture. You said, um, quite interesting, even for the team, the internal team, it's a two way street. It leads me back to relationships. Business is relationships. Without these relationships, whether it's internal or external, you won't have a business. So a lot of people focus on external, especially the bigger you get as well. And they don't necessarily focus on internal. And I think it's Richard Branson who says, um, I'll treat my people well, and my people will treat the customers well, right? Something along those lines. And it's really, it's about if you, if your team has a good experience and a great culture and loves where they are and loves where they work, they will give your customers a great experience too. Amen. A hundred percent. So how do you guys, or just to answer this question, have you got any full time people on the road? Do you have like full time representatives or account managers who literally their job is, is looking after customers? Yes, we do. Okay. How do you manage those people? Is there an incentive? Um, is it purely, you know, you're all part of the culture. It's something that I've always wondered. It's something I try to do. We had, um, 75 at one stage in South Africa, which I had built up that team. And when you incentivize people in different ways that are on the road, um, unfortunately, you know, what they looking to do sometimes isn't for the best of the team. Um, how do you manage that? So we take the approach very similar with the rest of the staff, right? Everyone is focused on how to be the best that we can be in each facility, right? And how do we add to the bottom line? If we all do well, everybody does well. So nobody's incentivize any differently. And maybe that I, we feel that's the, it's a good way. Uh, you know, instead of having different comp structures and different incentive structures for different, you know, players on the team We're all focused on the same goal Right if you and if like your point you change the goal and you change the direction That they may be doing something different than you want. Maybe it's like if it's a buyer Maybe they're buying too many pounds or paying too much for what's coming in You know, we're we're folk we need volume But at the same time we want a healthy margin And at the same time we also want to make sure that it's an optimal amount of product coming into the facility You And every yard has different capabilities, right? So it's a balance, and ultimately, if you're all headed towards the same goal, then everyone should be, you know, incentivized the same way in a sense, right? So it's bottom line, health of the business, and as long as we're healthy, everyone's taken care of. At least we try our best. Even if we're not, we still try our best. I don't think there's any perfect way. Um, I've tried this for 20 or 25, 27 years to try and get this right. It is extremely difficult. You try and incentivize one part of the team to buy volume. They don't care about the price. You then try to make sure that they pay under a certain price. They then play around with whether it was collected or delivered. Like it's, it's really, really tricky. The only outcome I've ever had is exactly where you are now. And that is incentivizing a team. So if you work together and the outcome is what the whole company wants, everybody participates. As soon as you start splitting them up, you have the standard, always the same people fighting commercial being your buying team versus your operations team, because the buying team is just, we must buy everything. And then they're buying oversized crap, which shouldn't be coming in and overpaying for it. And the ops team is like, well, where do you want me to put this? And what do you want me to do with this? And you bought it as insides and it's actually oversized. That's it. I've seen that for so long and I think everybody has the whole thing, but that could be an entire episode on incentivizing your team and that. So we won't go too far into that. Sean, you've studied quite a lot. So this next question for me, I'm really interested to see, um, what your intake is on it. Um, how do you use data? To make better decisions. Are there any key metrics that you focus on in the company and you're trying to maybe as the next generation bring into the company, uh, where do you play there? That's an evolving, evolving structure, right? We use data from a financial stance, right? We use data from a inventory sense to kind of look at what facilities are doing to get terms, right? How are they getting them out the door? Um, can we do better with the data that is available to us? That we maybe don't have softwares to be able to process. Yes, I think it'd be interesting to look at, you know, what is the, what's the processing for per person, right? So, where you're figuring out what's the optimal level of material with the head count at one facility, you know, you've measured production from machinery. I mean, there's a, I think every yard, every company has, Different KPIs that they use, and probably many of them are the same. And I think we're probably kind of running the mill using just the general KPIs and structure that most companies are doing. We may just format it a different way. Personally, do I wish we had more? Yes, but at the same time, too much may, it may be also be, may be a hurdle, right? And it could be overwhelming for you and you're just getting, you know, diving into the data may not necessarily be the, the, the best thing in the world too. And so data, you know, that stuff helps, but at the same time, you know, like, like my, my dad grew up learning the business or, you know, the other dads in the business, right? Sometimes just walking around the yard and knowing that every piece of equipment is running really well. Isn't a bad way to judge it either, right? You can have both. And, you know, that net, that natural innate sense of knowing what to do when something's happening, data doesn't teach you that. Right. And that's also probably one of those KPIs that it's, it's, you know, I don't, you can't call it a KPI when it's an emotional thing in your head and when you know what you're looking at, but you know, that, that's something that I think everyone should also try to want to learn to do as well. But yeah, I mean, we use it every day, not wish we could do a little more, but, um, So just for everybody listening, a KPI is a key performance indicator. And that is often you might set a standard and say that I expect we sell X amount per month, right? And we monitor it based on that or whatever. Mind you have this amount of inventory, et cetera. Are there any. One that you can think of that you actually do specifically, like an example of a KPI that you use. Revenue is one, right? We sell a bulk cargo every two months. So we know that there's a revenue target we need to hit on our non ferrous products. Right. Cause that's something we're selling every month. So that's one of those, those KPIs. You know, we also know that there is a KPI on inventory. Right? So when we see inventory growing at a facility, we know that that either one, it's too much coming in. They can't keep up or 2. they're not getting the support they need on logistics or 3. their equipment's not performing. Right? So then we can dive into those things. But those are kind of the 2 big key metrics that that we measure. And I know that there are a lot of companies out there and a lot of leaders that lean on those 2 same metrics. And it's, you know, It's crazy to think that it's the most basic metrics that keep a business successful, but you sit on product, you don't do well. It's funny because it's exactly that so many people have the exact same KPIs. Um, I'm waiting for people to give me. Different examples. I had multiple, but that's because I had my wife in the business who was completely data driven. Um, she tech enabled, right? So when she was able to use tech to bring us so much data, it was incredible after maybe six months of me getting used to all these dashboards of what I needed to look for. Um, but I'm the guy who walks around the yard because that's the way I was always. But to have the data behind you was huge, but a quick story. But a point, um, when I had George Adams at the Rima convention the other day on the stage, we were talking about our KPIs and I had the exact same KPI when I was in South Africa. We had the exact same KPI. We had 85 yards. He's obviously got a lot more. Um, and we had no yard was allowed 10 percent of their purchases as inventory at the end of the month. And if you had that, it was highlighted to the management team. And then we would come out and visit you and understand why you weren't in trouble. But we wanted to understand why you couldn't clear your stock that you purchased. So that we both, so SA had the 10%, so do we. On nonferrous it's different. Um, markets can move quite a lot and you can't necessarily, um, process everything as it comes in. But ferrous you could kind of make sure that it all, it all was moving. Um, I want to ask you a quick question on with what Lisa. I ask the questions around here, Sean. Teach me a KPI. What's maybe one KPI that, that, that you were open to. When you were using more data with, the systems, you will, the two of you were putting in place. So, um, Lisa, which is my wife built a, built our entire system using Salesforce. So we use Salesforce, um, as the base. Now I'm not going to talk the tech side of it. She can, but maybe I'll do a masterclass with her. And what she did was she built a transport system because one of the things I highlighted for our business was that we're a logistics company. Number one, all the customer sees is, is in the customers we're collecting from. They see us as a transporter. They just want that material collected. So one of the KPIs were from when that customer called how long until we collected it and up until So we set a rule we wanted same day collections and we used to promote that on social media Same day collections as long as you call between before 2 p. m So if you call before 2 p. m. So I had a matrix that would show me what percentage we were able to collect within that period. And as soon as we went out of that, I would go down and speak to the transport team and go, what's going on. And it would usually be something I already knew because I walk around a lot and be drivers didn't show up or a lot of business came in on that day. And, but then the next question is how did we manage expectations with the customer? So we say, we're going to do same day. Okay. The phone call came in at midday. We didn't get to them. Uh, we were able to look on Salesforce cause every single one of our phone calls were, uh, were tracked as well. We could see if our customer service people contacted the customer to say, unfortunately, we won't get to you today. We'll only be there tomorrow morning. That was vital for us. We were logistics customer service was absolutely everything we did. That's awesome. That's like, yeah, so many companies could even use that now. Maybe they've got enough data probably with their dispatching systems. They'd be able to utilize that if they aren't already, but learn something new. That's awesome. It's, it's not rocket science. None of it is. It's just about having that. For me, it was having my partner, business partner, life partner. Who's only saw what that in that way. And I only saw it in a way that I'd been in metal recycling all my life. So I never saw that that was important. As she stepped in, she would go, what are the things that are important to our customers? We need to monitor it. If we're not monitoring it, we can't get better at it. Yeah. So there's, there's heaps of KPIs. Maybe, maybe we'll do a masterclass on, on things and data that we can use. But I tell you what, Sean. When you're sitting in your office in the morning before it opens and you go for your walk around the yard and you sit in front of a dashboard and you've got the detail that you want for the day before you kind of know where to focus straight away. I get it anyway from walking around the yard. I usually know where to focus anyway, but now I got. Shit, we didn't get to our customers yesterday. We can't have two days in a row of not servicing customers on time. First thing I'm going to is transport, right? Or we didn't get the material packed. Why didn't we pack any containers yesterday? We meant to be doing 10 or 15 a day. What happened to those containers? First thing I'm doing is going to speak to the ops team. And all of this was on a dashboard that we had created. So we don't have to go too far into that, but, um, I'm going to go back to asking the questions now. Okay. Go for it. So how do you handle key person risk? So key person risk is, you know, you lose somebody tomorrow because they go get another job or God forbid they're hit by a bus, whatever it might be. How, how do you create depth in your company? The way you phrased it hit by a bus. That's something that I say all the time and it's because you don't know what's going to happen. Um, we cross train significantly. Uh, you know, as an example, what, what I do every day, there are 5 or 6 different people that can pick up the pieces and run. Right? So, the thought is. If you lose one, you've got five or six that can take the workload on, not overwhelm themselves for a period of time. And then that, and then you can find a way to replace that person if you need to. Right. And hopefully it's because they find something grass is greener, right. Things are better for them. Uh, cause we think that way every day, right. It's to make sure, and it's not just, you know, within our management or officers or executives, right. We think about it in the yard as well to make sure that every one individual. Has somebody who knows how to do their job so that if they're sick or they end up leaving or something happens, whatever it is, we're not left hanging. Yeah, it's vital. And it's funny because I think back about when I started my company in New Zealand in the early days for any startup company, everybody weighs multiple hats. And you've got an ops guy who can jump into a truck. You know, you've got the dispatcher who can jump in the truck or jump into the yard. You've got everybody, you've got a health and safety person also doing HR. It's kind of like everybody does everything. And you as the entrepreneur founder, whatever you might be at the time, CEO, you are doing absolutely everything, whatever is needed, it's done. But as soon as you grow, you get specialization. And people I am a full time shipping person and all I do is shipping and then I'm a full time transport dispatcher and all I do is that and the one person and all of a sudden you might not have thought about key person risk or just to be called key man risk all of a sudden You now got, if somebody gets hit by a bus, if somebody isn't there, your business stops running, like nobody knows how to use that transport system. And this happens in so many companies in our industry. It's absolutely crazy. So what your answer is, is, is phenomenal, right? You've got to cross train. I mean, that's, I tell as many people as possible. If you think you're going to join our industry in this, when we used to hire people, you think you're, and you're just going to do one thing you're wrong. Like I need you to be able to do two or three or four other things. Firstly, it's going to make you extremely valuable to us. So it's beneficial for you and we're training you and we're making you better as well. Usually they end up leaving and finding, well, now they can go and get something better because they learned other things at the same time. But other than that, it creates depth, less risk for us as company owners. 100%. Yeah. It's it's it. You're thinking about it. I, I should probably get updated on some of the material handlers. I mean, you know, a little bear from 2010 or Seneboken in 2007. I'm in it. No, no problem. But, uh, uh, Seneboken or Fuchs from today, um, I'm probably in trouble. So I need to probably take a refresh class. But it gets, it gets to a stage where it's actually not good practice for you to jump in it because it's not the best use of your time, but you've got to make sure everybody else can. Like, so there are, you. And they can't. They can. Exactly. And I like, I don't think George, he probably could, George Adams, but I don't think it's the best use of his time. He needs to be managing all these yards and making, so by him jumping in, it seems like, well, that's really clever. That's brilliant. Look how amazing he is. But actually it's not a great use of his time. He should have, his management should be trained to jump in. That's kind of like you and your multiple yards. Make sure that the yard manager can jump in if there's a, an issue that he has to deal with. Amen. How have you kept key employees over the years? So. Have you dealt with the one instance for, and as an example, or, you know, how do you do it just generally? That's tough, right? I think a lot of people stay for different reasons. Whether it's the relationship that they have with a manager or it's a relationship that they have, maybe with an owner, you know, the, the, the growth that they've seen with the company and added responsibility and, being, you know, mentally stimulated. Uh, we try to promote from within, right. We try to pay fairly as best we can. We try to give good benefits, try to make sure that we're always communicating with our team, listening to them, giving them decent, you know, time off opportunities, whatever it is, invest in them. We do a lot of different things, right? And I think one person might like one of or a couple of the different things that we do. Uh, I mean, luckily for us, right? I mean, being family owned, We try to make it the, the, you know, that it's the small family business. And ultimately I think we're, you know, we're growing out of that is as much of a heartache that is for us as owners, right? We always want people to feel like it's still that, but I think that's probably part of why we do well keeping people because they can call us up and just, you know, Hey, how are you doing? How's things going? What's next? You know, I'd like to do more. Um, or they call their managers up and the manager communicates that to us, that somebody has an interest to grow and develop and we're able to do those different things, or. You know, they give us the feedback that, you know, things aren't going as well. How do I, can you help with this? So, that two way street, right, comes, comes back to it, is that we're, you know, the culture that we try to create with our team. Helps us keep them. Uh, I'm sure there's probably people that agree with in our company. There's probably people that are get on here and tell you that I'm, I'm lining up, you know, lying, but it's, uh, hopefully not. And, uh, or that number is limited. Uh, but yeah, I mean, we try with different factors. It's quite interesting because you speak about as soon as you start to grow, it's more difficult. And we spoke about it earlier about having the culture, um, an exception to that rule. Would have to be alter trading, like alter trading. And I've been there to visit them. They have this culture where, um, they really are a family business. Like it's, everybody gets treated incredibly well. And it starts right at the top with the family. And, um, you know, I got to know Michael really well. And. They really do live by what they say. They, the guys feel, I mean, I met some guys at Israel Rima the other day. They've been with him for 40 years. Um, people just don't seem to necessarily leave. So I think Sean, there is an opportunity to do it. So don't, yeah, don't be disheartened and think that as soon as you start to grow too much, it becomes too corporate. You absolutely can. Hold on to that. And I think what's quite important and I might've been Bezos that said, uh, maybe it wasn't Bezos, um, but he actually employed, I think it was his first, first like 500 employees or whatever it was, because he could sit the culture. He could sit the standard. And then when it got to a stage where it was just impossible, because it would be in meetings all day, employing people, the next level, we're called into a meeting and explained that their job was to make sure that they. Got across to the new employees and the new people coming in exactly what he got across to them. And I think if you can do something like that and you can get in view, one of your family members are involved in every single hire, you can keep that going for a certain amount of time. We're going to try our best because we would love to do that. And I know, and we still have that, thank God, but you know, then hopefully the, that, that, uh, their hope is there. Um, how do you see technology playing a role in the future for our industry? We spoke about cleaning Zorba, et cetera. Where else do you see it really playing a big role? Everywhere. You know, whether it's data analytics coming out of the shredders, uh, you know, the wire choppers it's, you know, robots on, on picking lines. It is. AI weighing in trucks and identifying material that you can, you know, that you're going to pay for. Yeah, I don't know that you ever will necessarily remove the human aspect out of what we do in certain instances, but, you know, there's a lot of things that we do. They're not necessarily on that are. Well, not necessarily. I mean, they are not safe. Right. And you would love to be able to replace that with something that, you know, if it's a robot, that's okay that something happens because it's replaceable. Right. But the human isn't. So, you know, if you're able to remove that person out of that function and promote them and have them do more and make them safer, I think that's where I'm really interested in what, you know, technology is going to do. But, I mean, you look at the X ray, XRT, XRF, I mean, you look at all this different technology that's coming into play, you know, LIBS and identifying different alloys and It is just mind boggling on what level we're going to get to down the road, right? It could be years or decades, whatever it is, but at some point, you know, you're going to put a, you know, a car through a shredder and you are literally going to sort out the grade of plastic you need, which you can already do, right? There's example in Europe, they're doing the now the loop, uh, but you're going to sort the plastic out, the foam out, you're going to, you know, the, the cardboard, you're going to get the, the copper wire in a certain grade. Your loom is going to go somewhere. I mean, it's just. Mind blowing on where we're headed. So, um, I'm excited about it because that's something that I think is great because it's going to generate, you know, whatever it might be value for the business, cleanliness for the consuming mill that comes in, right? Lowering our CO2 emissions, getting us to a different standard. International or sorry, you know, recognized by, by the public on what we do for the environment. I mean, we are headed down a path to where we could be net zero across the board and when we take something into our yard, you know, your flood, your ASR is not going to landfill anymore because you are harnessing everything out of it to be used again. I think we're talking years, not decades. I mean, no, I know you said years or decades. Uh, I think with, um, AI being so prolific right now, I think it's changing the game, you know, if we were on that sort of trajectory, I think you're going to find It's going to just have a massive, massive, um, spike. Now, I think similar to what the internet did all those years ago, I think you're going to find AI is going to have maybe even more of an effect, um, on, on the speed of change that we're going to witness. So, you know, data. Making cleaner products, robot sorting material. I mean, that sort of stuff is really exciting. And I think we keep pushing, I know of guys working on, um, goggles, glasses at the moment, AI glasses to be able to identify, um, what the grades are. You can identify, um, x ray machines, identify on your way bridge if there is, um, Certain oversized material or shreddables, things like that before it goes in and has a massive impact. So these sorts of things are going to have a huge impact on our industry. So really, really exciting. You mentioned earlier, um, you've brought on debt finance for growth. Um, I did the same thing as a period. I've also used equity for growth. What, what forms, I mean, give us a little bit more detail if you can about that and I guess how you've done that and what effect it had on your business. We've, we've been debt finance for a long time. We still are, right. We don't have generational wealth in our families to be able to fund some things that we've been doing, right. So we were continuing to take the money in our business and reinvest it. Right. And the growth trajectory we've been on, you know, the bank has been very good to us. We have a great relationship with our financial institution. Um, you know, they gave us really good terms compared to what out is out there on an average basis. And, you know, I think when, if you are in that seat, right, and you're trying to use debt to grow, communicating how our business works Is, is difficult, right? Because I think sometimes people don't understand what we do every day and why certain items on the balance sheet or the income statement, well, why do you have 3 percent loss in this product? Well, because there's shrinkage, right? There's a lot of different things and explaining that to them about how it works, you know, can become hard. So if, if. If you're a smaller company and you need debt to grow and debt can be good, right? You're, as long as the terms are good and you're comfortable with the terms, right, you can then go out and succeed. If you're not comfortable, it's probably not something that you want to do, but having someone to help you. There's a lot of different, mechanisms and tools out there, companies out there that can help tell that story. Take what you have financially and, you know, back it into, uh, you know, what a bank is looking for. Um, you know, equity financing is another one, right? We have now we have a foreign investor, it's public and, you know, we went through a process for that and we have a great partner, right? We've done business with Toju for a long time. They're a great company. You know, they, understand our space. They invest in our space, you know, all around the world, right? We're the first North American, um, recycler that they've invested into. And so it's, When you find something like that, it's good. That's it. And that's not an easy process either, right? You know, a lot of companies have gone through the equity route and Didn't maintain control and have lost certain things. And you've seen the horror stories, right? So, and obviously we've had a long period of time to date this company, right? That we brought in and told you. And, uh, and we knew the character is decent, right? Coming in. Um, but at the same time, again, if you aren't comfortable with the terms, don't do it, right? There are people out there that can help you with that. Investment bankers, right? Your auditing firm, your accounting firm. There's people that specialize in that, that can help you. So. I think if a company individuals have a want to grow, you can have those conversations, even the bank. If you have a bank now and you say, well, look, I'm tired of paying you 10 percent of my money, right? I know interest rates are that high, but what is another thing that I could do to help with this? They might have, you know, options. I mean, there's mezzanine financing, right? You can go to, you can go to companies that will do 100 percent financing on your equipment and, you know, pay higher. I mean, the cost to do that is higher, but there's so many different options out there that allow a business to grow without their own money, right? Uh, but utilizing the equity that they've built into things. that they can take them to the next level. And we've been lucky enough to be able to do that. It isn't easy, right? Because you still have reporting and different things you have to do. And there are requirements because you're bringing another mouth to the table in a sense, right? So you need to make sure that they're comfortable and fed and happy. But at the end of the day, if everyone's comfortable and fed and happy and growing and healthy, and you know what, it can work very well. Well, I, I mean, this is a whole episode. Um, you don't want to get me started. I don't know too much out. Sorry. No, this is, um, I, I've experienced the nightmares, right? So, and I still will say to people, utilize bank debt and utilize equity partners for growth. I experienced nightmares on both. I had trade finance in order. I mean, I didn't have generational wealth either. I started a company in order to take on the biggest in the world. I set up a company in Auckland and I needed to sell to the end users who only paid me when it arrived on the other side, but I needed to pay cash to buy the material. So the only way to do that is trade finance. So I got trade finance, um, and they had the invoices as security, as well as my stock on the floor out of nowhere, out of the blue, I got told, um, they don't offer that service. But they've been doing it for eight months. So they said they only did invoice financing. So, um, they came and pulled the carpet from underneath us and said, sorry, we need all the money back for the stock on your floor. And I was like, it was like 4 million somewhere. Where must I get that from? It's sold. I'm going to get paid for it. All the stocks on the floor. That's a security out of the blue that happened. Um, And, and I've experienced that. I then experienced, you know, if you listen to the pile of scrap episode the other day, um, I had my equity partner take the company from me, literally when there was a sale on the table, there was a clause and they took the whole company and I was left with nothing. I lost absolutely every cent that I put into that company, but it happens. Right. And I learned from it. It it's been the, when I look back, it's the best thing that ever happened to me. Cause I wouldn't have bought the. Built buddy if I was still running that company. So, um, yeah, there are nightmares, but I think you have to know what you're in for when you're doing it. I think you, you said it perfectly, right? As long as you know what can happen and you know who your partner is, you know, you, you had a long courting period with Toju, which is very helpful. You got to know I didn't have a courting period. We were put in this position through the trade finance to find new partners. And they ended up taking the company from me, um, If you have the time really get to know who these partners, if you're going with the bank, just know exactly what they're offering you and make sure they know what they're doing, because just like you said, they don't get shrinkage. They don't understand how our business operates. So when they're courting you, which is what happened to me, and they wanted to take us from another bank and they can offer these incredible interest rates and do all these things. And of course they can do trade finance in that way. And of course they can do everything. Eight months later, they couldn't because the back office saw what they were doing. They said, we don't do this. Wasn't my fault. I had told them I had all the emails, everything was there and said, this is how we do things, and we had actually been operating like that for eight months. Unfortunately, that can sink your business. So. Be aware of what you're doing. And I'm glad we, we got to talk about that. Sean, I wanted to ask you before we go, who would you like to see on Born Scrappy next? The list would be long. Uh, I think there's a lot of people in our industry that are great characters. Andrew Lincoln from Lincoln Recycling, I think, is a great person that would be good on the show. Uh, you know, what he's done with his family business and what he's gone through, what he's done in life is great. And then Ryan Glant at Pac Iron, uh, Pacific Iron and Metal up in Seattle. Uh, he's a good friend of mine, so is Andrew, but they're two characters that, uh, I really enjoy spending time with him. I get to see him and talk to them and have made an influence on on me. Uh, you talk about like the network of being able to call people when you're a member of Rima and Andrew is those that that person I can pick up the phone and call and not worry about what I share with him. They get pick his brain on how to deal with things. And he does the same thing. And, uh, you know, Ryan has just been a great friend. He was. Chapter president of our chapter. And I was secretary at the time of the chapter. So built a relationship with him, but they would be two great people. And, and, uh, I'll make sure I let them know that I named dropped them with you today. Yeah. Send them a message today. Cause I'm seeing them next week. So, um, yeah, I know them both. Um, as Andrew invited you over for dinner, because I think I saw he's on the table scraps with John Sacco, isn't he? No, I have not had the chance to, uh, to break bread at his home for him to cook for me yet, but I've been into his hometown, spent some time with him over there. Um, so yeah, and he's phenomenal cook. He sends me pictures of some of the stuff to cook sometimes, and I'm just like, all right, I'm going over pal. Yeah, exactly. On my way. Be there now. Keep some for me. Keep it warm. Um, before we go, let's get to know you slightly better favorite TV series or movie. Well, currently I, I love the show Yellowstone. I think it's fun. Um, and. don't get to watch very m it hasn't been, hasn't be over a year with it. So w they get to finish it. Bu of stuff, action packed, Favorite place to visit Hawaii, just because it's a great family, family place for my wife and I to go. And we've pretty much gone every single year since we've known each other. And it's the place we've been, we've taken our daughter and we've taken our son here pretty soon towards the end of the year. So Hawaii is a great place. Um, Do you have a favorite book? Favorite book would be Bleachers by John Grisham. I read this years ago when I was in high school and I've read it a few times since, but it's a good book about, you know, someone going back into their roots and learning, you know, learn about themselves again and going through life again. So it's pretty, I like that book a lot. Cool. And to finish off, have you got a favorite quote? I don't know who says this quote, but I think many people have heard me say it. If you don't know where you're going, unless you know where you've been. And I said that to somebody earlier, um, this week talking about, you know, is your dad going to retire on him? Like I don't want him to retire. Right, because he knows so much about our business and, you know, he's, he's, he's my best friend in life. Right? I mean, I've got best friends, but I mean, you know, I mean, my dad is my best friend 100 percent through and through. And, uh, you know, without him, I wouldn't be where I'm at. Right. I think that's. You always have those figures in life, right? Whether it's personal work or whatever, you know, whatever it might be, but, you know, that have experience, knowledge and wisdom, and you can't ring that sponge out and be that sponge to suck it back up, you know, you can't transition that information and, you know, I don't think there's ever going to be a point where I suck up enough. Knowledge from what he has. So yeah, it's, it's the, that whole basis, right? You don't know where you, you don't know where you're going unless you know where you've been, um, and I live by that every day. And that's like, hashtag life goals. For me, it's like to be my son's best friend, both of theirs, like be the best man at their wedding, my wife will tell you straight away, you know, what's Stuart's biggest goal. It's not. Necessarily, but he's successful, whatever else it's literally to be my, my boy's best friend and best man that they're winning. So love that. That's the best way I've had to end the show ever. So Sean, thank you so much. Love this episode, man. This was fun. Thank you for having me.
