Driving Long-Term Success with Michael Sciaba

In this week’s episode, I chat with Michael Sciaba, General Manager of Allied Recycling Center. He’s one of the most hands-on, grounded operators in the game!

Michael’s journey started young, working in his family’s construction business before pivoting to metal recycling in his teens. By 21, he was running the day-to-day operations. Today, he leads a thriving, self-funded business known for transparency, trust, and long-term thinking.

Since taking the helm in 2010, he’s driven company growth, implemented strategic facility upgrades, and built a culture where operators and customers win together. And, yes… the man can cook! Just ask anyone who saw him dominate on John Sacco’s Table Scraps.

In this episode, we talk about:

👉 Turning competition into an opportunity to improve your operation

👉 Using transparency to lock in customer loyalty

👉 Using data to buy smarter and sell sharper

👉 The role of culture in keeping great people

👉 And much more!

Born Scrappy.

Brought to you by Buddy.

The only marketplace and trade OS built for scrappies, by scrappies.

https://www.tradebuddy.io/

https://www.linkedin.com/company/tradewithbuddy/

WHO IS STU KAGAN ANYWAYS?

26 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 10 football coach. YPO member. Lifelong learner. Mentee. Mentor. Chief dog walker. Committed Stoic. Undefeated dance-off champion.

COME SAY HI ON LINKEDIN

https://www.linkedin.com/in/stukagan/

https://www.linkedin.com/company/born-scrappy/

Transcript

0:00

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 this week's episode, I'm chatting with Michael Scabber, owner of Allied Recycling Center. He's one of the most hands-on and grounded operators I know. Michael's journey. Started young working in his family's construction business from around 11 years old before pivoting metal recycling in his teens. By 21, he was running the whole company. Since taking the helm, he's driven company growth champion facility upgrades, and built a culture where operators and customers win together. And yes, here's a fantastic cook and any of you would know that if you've watched table scraps. In this episode, we talk about turning competition into an opportunity to improve your operation, using transparency to lock in customer loyalty, the role of culture in keeping great people leading from the front, and so much more. So let's jump into it, Mike, but first intro. Hey Mike. How are you? Good, Stu. How you doing? I'm awesome, man. Thanks. Uh, excited to sit down with you. We haven't actually chatted in person before, so, uh, only heard rumors that you're pretty, pretty good in a kitchen. Not sure how accurate is. I, I take, I take a lot of pride in my cooking abilities. Yeah. Mm-hmm. My team did a good job out there. I think that you guys lost to them, so, well, firstly, I think, um. Like, I don't even call it a team. You pulled out, you were too scared to take on, you know, the Italian stallion and the Alta barbecue team. Yeah, I had a, uh, foot fusion surgery, so I couldn't make it, but if I did it would've been, uh, probably a blowout. Um, so I'm happy for everyone else that I didn't make it, but I can't wait to be on the next episode. I've been promised John's having another one. You know the extent your team will go through. To like not embarrass themself when they lose. I mean, um, I, I mean if you remember just, just if you talk about blowout, if you do remember on the show for those listening that dunno what we talking about. Um, table Scraps was a cooking show, um, which was hosted by John SKO at his house. And, um, the international team, which I captained was unfortunately robbed, um, of first place by Michael's Exte, which was, uh, they were pretty good in the kitchen except. Yeah. Yeah. I remember one Andrew Lincoln who, um. Forgot to put the sugar in the dessert and just saying you guys then needed extra time. The Alta barbecue team also needed extra time, whereas my international team, we finished with like an hour desp spare. We were like lending other people our time. So, uh, let's just be honest. We maybe an an asterisk, maybe an asterisk on the win. Maybe a, maybe an asterisk. Well, as my brother always told me when I was young, there's no comments column on the scoreboard. Um, that's true. You know, unfortunately. Yep. You guys took the win and, uh, I can just bitch and moan as much as I want and nothing will change. Let's talk scrap. Apparently you do that as well A little bit. I do, yes. Full time. Full time. So cooking is the hobby, not the other way around. Yes. Got you. Talk to me, Mike. How did you, how did you land in this industry? I, I, uh, is my family's business. Uh, my father had started it, uh, with a partner in 2004. Um, kind of started it by accident. He had a construction company. He was in Hyde Park, mass. He was looking for a larger facility that was not located in Boston, the more of like centrally located. He started to do some construction work in Rhode Island and Connecticut. Uh, so he found this piece of property and it had a metal recycling license. He had no intention of using it. Ran into his neighbor who was a metal recycler, um, and ran into the owner's nephew. In the line at Dunkin Donuts and they started to chat. My father said, Hey, you know, I'm not planning on using it. It's got a license. Uh, long story short, um, uh, the nephew wasn't getting any ownership shares that he was promised. So my father, uh, agreed to start a metal recycling business here. And, uh, I was kind of moved from the construction business that me and my brother were working at 11 and 12 years old into, uh, the metal recycling business at. 13, 14 years old and, uh, truly born, scrappy stripping wire with a razor blade, cutting myself, torching, uh, paying people running in and outta the office because it was a new business. Um, yeah, it was a learning experience as a high schooler. Baptism by fire, I think. Got it. Is how we all learned, right? Yeah. You get in there, it's the best way to learn, Stu. You gotta do it with your hands. Absolutely. At the time were you like upset to move into the other world? I mean, you're 1112, but like you, like you started to know construction. Was this more exciting? Was it. I wasn't really focused on that. I was focused on, you know, I didn't, you know, my father made me and my brother work, right? We were taught hard work at a very young age. So we were working, carrying plaster up, you know, five flights of stairs at a school in Brookline, mass. We were doing it to make money so we could do stuff with our friends. Uh, so for me at the time, it was just, I have to do this if I wanna make money. But it was very interesting'cause obviously I had a little more responsibility at the metal recycling. Job and it was like, you know, buying and selling, which I think anybody can kind of relate to where construction is a little more complicated and complex, especially when you're building schools and bridges and stuff like that. So I was, I was super excited and, and I started to love it right away. Did you get sent off to college? Yes. Yeah. Went out to, or went down to Miami, Florida for college, but always stayed in contact with the business. Came back in the summer. Worked. Wish I didn't wish I took a summer off and went to Europe like some of my friends did. But it was also fun watching the company grow. So coming back in the summers and getting to work to scale, getting to do dispatch, trying to earn new business. Um, I enjoyed it, you know, it was fun to watch a business grow. Um. Yeah, and, and studied business management and got a chance to put that degree to use when I got back here. Uh, it's classic because, um, without your experience, uh, you know, from 11 years old, um, you couldn't do what you did when you came back from college and having the college, you know, experience behind you as well. Put you in a great position, no doubt, to be able to take the company, I guess, to the next stage. At what sort of age did you and your brother take over and start running the shows? So it was myself, my father had opened a, a different yard with a different partner in Providence. So my brother kind of went down there, uh, and started that new business. Um, yeah, I was, it was 2011. I was 21 years old. Um. Learned a lot, didn't know much. Started really running the business. Uh, I was fortunate enough, my father was not too interested in the scrap business. He was always, he was a construction guy. He didn't like coming to one facility, so he kind of just got outta my way. I was. Just thrown into it, you know, I was in charge of selling at 20, selling, I was in 21. Wow. I was in charge of selling, I was in charge of buying. We had probably 14, 15 employees at the time. And, uh, I learned on the job and I'm very, uh, thankful that is the way that I learned. Uh, there's times where I think back and, oh, I could have taken the job and gotten mentored by one of these bigger companies, but I had to do it myself. And I learned a lot and I've learned a lot along the way. Yeah, absolutely. No doubt. I mean, I don't think there's a better way to learn than the way you did, so yeah, no, it's probably put you in a great, great position for where you are now. Mike, talk to me about, you said you are obviously 21. You started doing the buying and selling where you took over everything. You were doing it from like 13 years old as well, learning like how to buy and how to sell. Is there any experience that you have a trade that either went wrong or something that really taught you a lesson, um, and helped you kind of grow to where you are now? Not a trade, but there's a educating moment by a trader that has stuck, you know, sticks with me. And then there's an operational experience that changed me just'cause I'm an operator here and, but the trade, um, I had a trader come by, cold call, uh, and at the time my father and his partner were selling everything to one company. You know, it wasn't. Copper going to copper consumer lead, going export. It was really, we were selling to one company and I was trying to work through the right place to put material. Um, and we weren't members of Esri or now it's remit at the time. Uh, and I had a trader stop by from New Jersey. His name is, uh, also Michael. And, uh, I got taught a lesson on a grade of extrusions. We probably had, you know, six, seven loads of extrusion bailed up and I'm walking the yard with Michael. I made the time for him. He said, uh oh, what are you getting for that? And I was like, oh, that's 10, 10 extrusions. I'm selling it to this secondary smelter and this is what I'm getting. Um, and I don't know. I related to him because he was my age, you know, and I just got along with him and, uh, he's like, well, that's new bear. And I was like, I didn't know what new bear was. So he, he is like, well, there's no pain on that. That's worth 6 cents a pound more. You have six load there. It's quite a bit of money. And, you know, in that moment I was like, wow, I'm glad I've made 10 minutes outta my day where I'm trying to buy and sell and plan this and plan that to get this education. Uh, and that trader has taught me a lot over the last, you know, 15 years, still sell him a tremendous amount of metal, still learn from him. Uh, but that was one situation where I can't begrudge the company I was selling it to. I mean, you could say maybe they should have. Said, Hey, you know, it's not 10 10, it's New Bear. But he was a buyer that was making money for his, his company. And um, you know, now I sell Michael Scrap and I don't sell the other Trader scrap. So that was something that I learned kind of the hard way. And I didn't know anything else. I just was doing it the way I was taught. And since then I've gotten more involved in REMA and tried to find more, you know, consumers myself. But it's important to take the meeting, you know, and be open to price sheets. And I would say that was an experience that I learned a lot. Um, you also have an operations one, but before you go into the operations one, um, I just wonder if it changed the way you buy as well. So like, if somebody brings in material and doesn't know what it is. Are your team trained to upgrade it? Because let's be honest, I mean, if we're being brutally honest, that isn't necessarily what we all want our team to do. We want to get upgrades, and that's where we make a lot of our money. So it was always a hard one for me, right? If somebody believes it's X grade, do I need to tell them it's actually Z? Right? Um, because they're gonna leave happy. I'm gonna give them the best price for that material, but I'll then upgrade it. I agree with you. I think you have to feel out the customer. I was at a large demo walkthrough this morning and I was looking at these racks in the ceiling and you know, we want prices on this. And then I saw, you know, there were new bear extrusion. I saw these connection plates and they were telling me how they had to cut it down. And I mean, I think it's important to give the information and let the customer decide what they wanna do with it. I mean, that's the way I try to do it now. So, hey, you guys are pulling these down. This is an irony extrusion or a contaminated extrusion. If you have to cut deep down, if you decide if you do cut them in this place, it'll be worth, you know. 16, 18, 20 cents a pound more. So if you have to cut'em anyways, do it there. If you don't, I can buy it as iron. Any extrusion. So I'm a firm believer, you know, give the customer the information and let them decide.'cause Michael could have gave me that suggestion and I could have been like, ah, but that, that bail has pain in it and I'm not picking it out. Hmm. So it was a piece of information that he just put into my brain and let me made the decision. So I've kind of tried to do that with my customers.'cause some people, I'm just ripping it down. I, I don't wanna. Waste of time to cut it in that spot, and then you're like, okay, but at least you gave the customer the option. Okay. So what happens if somebody comes in with some tent and extrusion, but it's actually new bear? Um, are you telling them that at the scale that, Hey, by the way, it's actually a premium grade? Yeah. On a, on a retail customer. Probably not. Um, but obviously we have smaller scrapyards that we buy non FARs from and industrials that we would, you know, we would add that value because it's done so much for me and, and my relationship with selling the supplier that I think it outweighs the, I agree. The quick buck that you'll make, you know? Yeah. And that, and that gives your supplier a chance to buy more, which he did for me. Like you said, it certainly changed the way I buy. Mm. Because now I buy from smaller scrapyards non, I'm Ferris, and I give that same education to people that I buy from. I guess it's a, it's a decision of whether you're in the marathon or a sprint. Totally. Because if you're in a short sprint, take every margin that you can. But if you're in the marathon, somebody else is gonna pop into that industry account and offer them a price, and they're gonna go, what the hell? Yeah, Michael's been buying it at that for 15 years from me, and he's obviously known about it. And then your reputation gets screwed as well. It's a bad look. Yeah. It's a, it's a, it's a really bad look, and that's kind of how we operate. I mean, me and one of my salesmen say this all the time. I'm 37 years old. I'm not planning on stopping at 40, you know, I'm in this business for the long run, so my reputation is all I have, and I have another 30 years to go. Yeah. So we're not about the quick buck, you know, there's, there are some people in this business that are in their sixties that won't get. Give up to the next generation that are looking for the QuickBook, but that's not us. And you said there was an operational experience as well that, um, helped you? Yeah. In, uh, 20 16, 20 17, you know, in this region of New England, there was a couple publicly traded companies and we were trading with both of'em at the time. And one of'em. Had invested in the facility and opened a feeder yard about 10 minutes from us. They went in hard, they didn't give us any heads up, and they basically tried to put us out of business. Um, and we had to fight, you know, like myself, my team included. We really, really learned from that experience. We were at their facility outside ourselves, one of our trusted customers, uh, trying to see what exactly was going on every single day. You know, we weren't as concerned as we did see some customers go in there. We weren't as concerned about the inbound. I mean, it obviously bothered us. We were concerned about how much they were doing out.'cause we knew that they were a publicly traded company and, and they have to make money and it has to make dollars and cents and, you know, it made us a better yard too. We, we dropped a lot of pavement and, and invested a lot into our facility. Um. And made our experience better.'cause we knew they were gonna do that. Um, and we didn't underestimate them, but they kind of underestimated us. And at the end of the situation, it took about six months and they ended up calling us. Uh, and they ended up closing, but it was a fight for six months and they were paying. Retail customers the same at, they were paying, you know, the export dock for 20 tons. So we just lost some money, didn't lose market share, and it was, it was a fight. But uh, at the end of the day we learned a lot from it. What was that phone call like? That must have been interesting. It was, yeah. Yeah. I got a phone call from the regional manager who I hadn't spoken to since the yard opened, and it was a, Hey, I hope everything's going good. Obviously it wasn't, we probably about a half a million dollars in losses at this point, fighting them. He is like, well, um, wanna make you an offer? I wanna, I wanna offer to close the yard in mills if. You sign a supply agreement. And I was like, oh, that's interesting offer. He is like, yeah, we want you to sell us 2000 tons a month of Ferris and then we'll close the yard. And at the time I think we had it pegged to like 40 to 60 tons. They were doing a week, you know? Right. Um, there were people applying at our facility from that facility because they saw the writing on the wall. So, you know, that simply said, you know, thanks for the offer. Not interested. Uh, next morning, regional non Ferris manager for the company who I was very friendly with, still am, called me and, uh, you know, I, I gotta take you out to dinner. And I was like, yeah, I, I don't really want to go out to dinner with you. You know, we're kind of competing, uh, nothing against you, but it's your company. He is like, oh, we're closing the yard tomorrow. And I was like, he took a swing at me. Uh, and I can't blame the guy for trying, there's no way. When he made that phone call to me that he. Thought that we knew exactly what was leaving that yard. Mm-hmm. Um, so that was a fun experience. Learned a lot from it, you know, still trade with the company today. Don't talk to that gentleman anymore. But, um, you know, I admired him too. He was a Ivy League grad and he underestimated us and we didn't underestimate him. How did you, and I think this happens on a daily basis, right? I mean, your story, I've been on both sides of that, um, many times. Um. How did it change your buying strategy? So no doubt you upped your prices. Did you put people on the road? Did you do more marketing? You obviously looked at your customer experience and things like that. How did that change for, for you as a company? Yeah, we put a little bit of more money into marketing, paid ads, obviously targeted towards Millis, the area they were in, just physically going there. Um, I had hired my first salesman, not hired, he was in the company, but we had put our first salesman on the road right before that. Um. So he was very helpful. He was just on the road and he monitored the area. But um, yeah, putting buyers on the road and procuring material for yourself is definitely important and changed. The way we bought wasn't just based around that situation, but there's only so much material that's gonna come to you organically, right? No matter how much you spend on marketing. Getting, you know, now we have two buyers getting people on the road. It helped because it slowed down slightly when they opened that yard. Not too much, but you have your industrial, your contractor base coming in, um, which gives you the money to fight that fight and keep your retail business strong. Yeah. So now you've got two full-time people on the road. So it wasn't actually that occurrence that made you do it. You were already moving in that direction anyway, so the timing just happened to work out perfectly that you already had somebody ready to do that. Yeah. Similar timing. Yeah. Yeah. I mean, when we think about data, people immediately think that we talking about, often people are like, oh, that's a foreign language. And like I use my. Software system as they call it, uh, my inventory system, whatever, and that's kind of all I use, but just the information you had around that opposition yard, that's data, like that's information you knew totally. How much volume was leaving that plant. That's so important. At what sort of data do you use on a daily basis or monthly, you know, to make decisions for the company? Uh, I mean, we do a lot of costing for operations. We obviously have what we expect to buy. Uh, we monitor that, we monitor our gross margin. Um, but for us it's knowing your cost, knowing your trucking cost, knowing your processing cost. When we get a new piece of equipment, whether it's a. Non Ferris, Baylor, uh, stationary shear. If you're breaking apart strap with a shredder, you need to know your numbers. You need to know what it costs. Uh, you need to know your recoveries. And if you have those items, you can feel really confident about giving your buyers, you know, tight numbers to work on if they're trying to earn business or if you're going to bid on a large lot of scrap. So we rely a lot on processing costs and trucking. And we really monitor that because you live and die by that stuff, especially the trucking. I mean, like I've heard on your other podcast, we are in the transportation and logistics business and you have to cover your costs. I mean, there's a lot of old school people that. We'll pick it up for free. And you know, we don't believe in that. You know, we believe in knowing our cost, giving it to our customer, where's your job? You know, give me 10 minutes. Let's, let's talk to freight, let's talk to dispatch. And this is the rate. And sometimes we lose a job. People say, oh, this guy's, you know, a hundred dollars less than the haul, or$50 less in the haul. And we just simply say, that's what it costs. We're not trying to make money on the trucks. Mm-hmm. We wanna cover'em so we can buy new ones. But we're, we're just covering our cost. Um, and that data with the, the fleet tracking, um, and how many runs your, your drivers are doing and how many tons they're picking up a day, it's very important information. How do you, um, create that data? What systems are you using? So we have a scrap metal software recycling operations, um, 21st century. Then, uh, we have a dispatch software right now that we're using Box Tracker and we're transitioning into a software called Crow. And then there's a lot of manual works too. I mean, we have timed runs, we have tracking on the trucks, uh, and we'll give a freight rate, but then we'll also check on it, uh, Esmeralda, our dispatcher, and I'll, you know, I'll check in with her and say, what is that freight to Lawrence running? What's the average. Time and she'll, you know, within five minutes she can give the A route rerun and I'll be able to see how long it's taking. You know what's so interesting, what you just said right now, which was, um, your check on it. So a lot of people calculate their freight. Leave it. So they land a new industry account. They've worked out to collect the bins, it's gonna cost them X amount. Um, and that then factors it in. Six months later, they're still doing it, but there's no link between the transport division and the buying team. The transport division isn't actually saying, but hold on. It's actually now costing double because we're getting half the volume in the bins, so it's double per ton. I'm talking about, or the route is taking longer now because they've built a new building that's in the way and now we have to go through the back road or the gates never open. When you lose that, all of a sudden you start to lose money. And I've had so many times in my experiences I've had, um, my sales guys or the buying team fight with transport about that. All the transport is trying to do is just relate them the actual cost, but then the buying team feels that they're trying to push costs onto them and now all of a sudden they can't buy,'cause the buying price has to drop because you want to have the same gross margin, et cetera. Um, I mean, how do you manage that on your side? I'm the, I'm the middle, I'm the middle ground. So we will aggregate the information and then we will decide, right? Our drivers are trained to, to notify us when there's wait time. If there's an accident, they write it on their BOL, right? Uh, if there's a asbestos truck getting loaded or a c and d truck getting loaded and they have to wait an hour, they write it down on their slip. If it's a normal run, they don't make any memos. Um, we'll take that information. If it's a one-off thing, we'll tell the supplier, you know, we'll, we'll relay that information. I'll give it to the salesman. I'm lucky that one of my salesmen was a class A driver, and he's excellent and he loves to do it. So he talks to a lot of the drivers. Um, and that's a, a huge benefit for me because I get a lot from him, um, from the drivers'cause they feel comfortable talking to him. But we'll take the information in if it's a one-off thing, we're in the customer satisfaction business. So we'll bring it to the customer of attention because a lot of the times, the contact for the demolition company or the owner of the business is not on the job, especially the larger you get. So start with the site guys. Hey, just wanna let you know you're in charge of the scrap for the company. You're the owner. This is happening on this site. We're not charging you any extra, but I just wanna let you know that if it keeps happening and usually nine times outta 10, that problem will be solved. Same can be said for overloaded containers if it's addressed in a kind way in a timely fan, or is it professional? Hey, just so you know, you know this guy punches in every morning. The fuel isn't free at the gas station and the tires and everything costs money, so. You know, it, it's a real cost to us and we don't mind eating it this time, but if you could address it with your field guys, we'd really appreciate it. Um, so we don't always go back. And I think that's an also a benefit of being a privately held company, family owned business, where you can do that for your customer. Um, where a lot of these larger companies, just some of them might be able to do this, but a lot of them just charge the freights to freight. Um, but then obviously Stu, if it's a reoccurring issue, then either there's a problem with the guy on site or you have to start charging extra money and that's it. We used to, in New Zealand, we set up our transport division as its own business. So the transport team, every time the sales guy wanted to put a quote in, he would get a quote from our transport division and they would say, this is what it's going to cost them. Yeah. And at the end of every single month, they had to break even. So, uh, it wasn't about making profit. It was about breaking even. So if the sales team were fighting with them over costs and they haggled and whatever, it didn't, it had to come from somewhere else. So we made sure that it had its own income statement and all of our costs and all the income was tracked against it. It was quite a difficult thing to set up at first'cause we were invoicing ourselves basically. When we got that right, the amount of focus the transport team could put on was amazing.'cause they could analyze their numbers at the end of every month as well as, it was quite nice to be able to show the sales team that if you think that they're overcharging, but they're breaking even, then they're making, they're making too little somewhere else. So where is it? Yeah, like somewhere they're doing all your collections. And, and you know your costs and you know your tons, right? So that's what we say. There's certain months where we don't cover it and you know that, hey, I bought, you know, 10,000 tons, I ate a hundred thousand dollars. Then it goes into your cost of goods and you don't wanna have that happen. But obviously it happens. And um, but that is a great idea. And like you said, they have to break even. They're not trying to make a fortune. A lot of the contractors that we're doing business with are starting to get, the younger generation gets it, you know, the older generation, like, oh, I don't pay trucking fees. And you're like, okay, yeah, yeah, yeah. All right. Well, the, somewhere it's getting hidden, you know? So we like to put it in a flat rate and show it, you know? I think that's a good practice. And it was always, it was always interesting, right? They always had to break even. So, because they had to break even, um, the knock would've to be taken on the other side. So the sales team, we could then see all of a sudden they weren't making the margins. So when they quoted, they quoted on a fixed rate. So if you got less volume. You still paid the full rate of transport. Leica was a third party transporter and all of a sudden that then pushes it onto the rep. Oh yeah. The rep or the sales guy who has to always go back and it's them monitoring it now. Otherwise you leave it to the transport guys. And that's not their role to be customer facing. No. No. And you're right because like at the end of the day, we like to charge the freight because. The customer is more invested in their return. Mm. We have the guys that know you should put a 70 yard dumpster here. You should use a gondola here. You should do a dump trailer. But at the end of the day, if the customer is getting charged a flat rate, they're invested in how well the Absolutely. The container is packed. Yeah. You know, so they got a little skin in the game. Yeah. Let's talk, um, a little bit about, you know, using data. Let's talk a bit about technology. Like where do you see. Technology helping this industry over the next five to 10 years. I could even shorten that question now to the next one to three years because things are moving so quickly now. Where, where are you focused on? Yeah, I mean I think that AI in terms of, I mean obviously social media and things like that, I did a post this morning for our company, uh,'cause we're looking for somebody new. But how quickly chat GPT can generate a caption for your social media posts. Um. A lot of technology. I mean, we have MIT here in Boston and they've actually started coming down and visiting us. They're trying to get involved in this business, which is awesome. I think with load scanning, I'm explaining to them the hazards of lithium ion and compressed gas. Um, but they're MI t's interestingly enough, trying to focus a little bit more on the red metals, but obviously from a sortation standpoint, libs. Um, and AI is, I think, gonna be great and that's super exciting. You know, to be able to have a machine do a lot of the work that's been done by manual labor is labor is very exciting. That's, I think, what I'm most excited about, to be able to participate in that down the road. So you're doing some great work with, um, MIT. Is there anything that you're actually looking at, at the moment that you think. Or you sitting back and waiting? No, we, we, we we're kind of waiting. Uh, we're in the process of upgrading some electric on our site. Um, we do plan on getting more involved in, uh, in like Libs when the timing is right. Uh, we've spent some time visiting certain sites and going to some test centers and think it's super exciting. Um, but not currently, but I'm totally. Loving helping these people from MIT because it's nice to have somebody at an institution like that that's interested in metal recycling. It's just, I wouldn't have imagined that 15 years ago when I started. Well, it's the same as, I mean, we just had the guys from Uber Invest in Buddy, which is like, that's great. Incredible. Right? I mean, you've got guys that build probably the number one marketplace in the world, um, that are now in our industry, which is really exciting. That's amazing. Yeah, it's, and their inputs on things is incredible. So yeah, it's been, I bet it's definitely more interesting lot from those guys too. Yeah, that's for sure. Let's talk, um, new equipment. Let's talk capital. So like, how do you fund your growth? You've been doing, you've been at the helm since you were 21, or you, the guy that uses profit puts it back in the bank and buys equipment, or you saying, Hey, if I put down a 20% deposit on this piece of equipment, I'll pay off the 80% to the bank or wherever it is offering you the finance. Yeah, so, uh, 90% of what we do here is self financed. When the rates were really low, we took advantage of folks and Komatsu and all these, uh, manufacturers were giving away 0% or close to 0%. So we did some financing on those pieces of equipment. But recently, since the rates have increased, we've just kind of been self financed. We don't have a line of credit. We've been lucky to be able to do that. Held us back a little bit's, probably the reason why we only have one, one yard and one facility. My brother works for EMR and they do some interesting lending there and, and we're interested in doing like maybe some asset based lending because a lot of this equipment is unencumbered. Um, so for right now, we just bought for. New trucks. We wrote a check for'em. I made the joke with my people, I'm not paying 8% when these customers have a tough time swallowing the trucking cost anyway. So the last thing I wanna do is spend that kind of money and have to pay interest on it. But it's a, I'm a little old school in that arena. But, uh, as we, as we grow in these next, you know, few years and get another facility or two, we'll definitely be looking at some asset based lending. Look, I think as long as you can fund your own growth, um, you're in a phenomenal position. You can sleep at night. Nobody's coming to shut you down. Nobody's asking for their money back because there's something coming on the water, whether it's COVID or something crazy. We don't even know what's next. Uh, so yeah, the longer you can do that, the better. Yeah. When you said EMR has some sort of funding, they are offering asset finance or they use somebody? No, that's for them. They use their own bank. Um. Yeah, so I mean, I think it's a great way to borrow if you have the assets. Yeah, absolutely. But it's in this business too. I think one of our strengths, I always tell people when I'm earning new business or with my current business, I say the easiest thing for me to do is pay for the scrap. You know, we hear all sorts of horror stories in our region of. This guy only pays on Mondays and Fridays, and these guys have to send you a check. And if you want a wire, it can only be once a month. And I always joke, I'm like, what are your terms? You tell me. You know? I said, I'll pay you in bubble gum if you want. You know, like, just name how you want to be paid. It's the easiest part of my job, you know, and having our own money has allowed me to do that. Yeah, yeah, absolutely. It puts the control in your hands. All the power sits with you, which is amazing, and you can only grow a business in our industry. If you have some capital, like you have to have the finance. If you're gonna come in there and not be able to make payments, you might as well shut down today. No, agreed. What's the, what's the best piece of equipment or worst piece of equipment? I'd prefer the worst, but don't gimme the brand name of equipment you've ever bought. Worst, uh, it wasn't the manufacturer, it was choosing to support a new dealer that was in the quarry business, the stone business, and they decided to open a dealership in Walpole, mass. And I ended up becoming very friendly with the gentleman that opened it as a Walpole guy. And, you know, we invested maybe a million and a half dollars in their equipment. They weren't training their mechanics properly, they were diagnosing these, the bills for diagnosing problems were crazy. My father warned me. I, I didn't listen to him'cause I was 20 something years old and knew everything He said to me, they don't need to sell equipment to make a living. You know, they're, they're already fine. And I was like, yeah, yeah, whatever, you know. But because they were trying to show a profit at that new dealership, they weren't investing. Their mechanics and it ended up us in a battle with the manufacturer. We sold everything and cost us a bunch of money, you know,'cause we paid our bills, you know, so we paid, even though we didn't agree with the bills, we paid'em, we lost a bunch of money and now we care more about the dealer than anything else. Uh, and there's some really strong dealers around here, and I think all these pieces of equipment are great. Your support is, and your parts and, and how invested that company is in your success, I think is more important than the manufacturer. Yeah. Manufacturer has to have skin in the game. They have to care. But yeah, and I would say the best, and I hate to give John a plug, but uh, best piece of equipment we, we bought was definitely probably both of John's, um, the, the baler and the shear baler. Um. I think I was so happy with the seven 50 we purchased that the first year we ran it, we made so much money that I, I air mailed John some wine and steaks and wrote him a nice card thanking him and he called me up and was like, you bought the machine, Michael. And I was like, I know, I know. But you know, he's a very honest guy. He's, you know, he is kind of like a mentor to me. You know, he'll randomly call me, it's 5:00 AM in California and he's walked me through a lot of that stuff. And again, there's a guy that's invested in the success of his customers. He doesn't just say it, he really means it. Uh, I couldn't agree more. I think that's a great testament to John. Yeah. Um, how many, I, I've been to hundreds of yards in the last year alone, and every time I see a Sierra, everybody talks about their after sale service. Everybody just talks about, uh, if there's any issue, they're there right away and they've got the parts on hand. And that's rarely when you're selling equipment. Like that's the number one thing is how do you handle it after I buy that piece of equipment. What's your service like? Yeah. Yeah. And they're the best in the industry. Hmm. Mike, tell me about people and culture. So like, how do you make sure everybody stays in your operation? How do you make sure that they don't leave and, and go somewhere else? We have some turnover. It's, it's very little. I think for the amount of years and people we have, we pay our people very well, you know, um, we provide good benefits. 401k, 401k matching every year for the last. 10 years, we've offered profit sharing for every single employee that works here. I mean, everyone works together. I like to say that we're all buyers. We put our customers first and uh, but we try not to stick somebody in a hole, you know, so we give the opportunity for, you know, like I said, the salesman is very involved in trucking. He actually, the two of the new tractors we built, Kevin, designed them, you know, souped them up for the drivers to keep them happy because it's not easy to find a class A driver. So. It's, like I said, we're a private company and we're able to cross lines and help each other out, and I think when you work together as a team, not that large companies don't, but when we work together as a team, I think everybody enjoys their job more. You know, we, we have good hours too, or seven to three 30, but if a customer calls and got a load coming in at. 4 35 o'clock, we'll stay. Somebody will stay and they'll, I'll just ask and somebody will volunteer. This is not a, a demanding environment. And if scale operator says no, dispatcher says no, I'll stay. Or the salesman will drive up and sit at the scale and wait for the truck. Um, and I think that when you do that with your team, and I think it builds, you know, a good culture and, uh, yeah, we've had some turnover, like I said, but for the most part, I think people enjoy working here. You touched on saying that, um, the larger guys also do that. I, I think they don't, I think they find it extremely difficult. I think you were just being kind, I think, um, yeah, I was, the larger guys can't do that. The larger guys, um, unfortunately people are just a number on a spreadsheet because it's being assessed by the head office. The CFO, the whoever it is, who's looking at cutting costs and they're sitting somewhere far away in their ivory tower and they've never been in a I before. So it's extremely difficult for those people to. Allow other people in their operation to treat people like that and give them the ability, because you might ask the guys to stay longer and they're willing to because of the way you treat them in general. Right? Yes. And that's what buys that for you. Um, yeah. And that's extremely difficult in a large corporate. I've seen it as somebody was once talking to me about, well, why don't these large guys just do better? It's not as simple as that. It's not that these people are stupid, like, not that the guys running these companies aren't extremely smart, and it's not like they don't see that as a blind spot. The problem is you can't give authority to 120 yard managers to do whatever they please. And that's where it becomes extremely difficult. When you're accountable to your shareholders. You're looking at one thing and one thing alone, and that's the numbers. Um, and unfortunately that comes through in the culture as well. Yeah. So that's. As a trans foam manager at these big companies. And now there might be a salesman, like I just told you I have that knows more. You know, he drove truck, he ran his own, yeah. Trucking business for us here at Ally, he hauled a hundred thousand pound loads. There might be somebody at that big company that knows more about trucks somewhere else in the organization than the transportation manager, right? Mm-hmm. But because there's so many lanes. There's not enough collaboration. I think that's where they start to lose a little bit of, um, of their advantage. And that's where when your boots on the ground every day working together as a tight-knit family, you create those advantages. Absolutely. I think the private, smaller operator has got a massive advantage. Um, so don't go out there and being intimidated by the big guy. Just see their weaknesses and if you do that, you'll find opportunities, um, that come with it. Totally. Right. Mike, who would you like to hear next on Bone scrappy? I'd have to say my twin brother. Um, he's got a different set of skills that I do. He is the regional manager of EMR for the northeast region. When I got more commercial, I still like ops, but he's the commercial guy. But he loves ops. You know, he's at the shredder at from 10 to two in the morning. He is running it sometimes. So he's great. If you can't get him, if you ever do start interviewing any of the buyers for the larger companies,'cause I feel like they have a lot of knowledge different than an operator.'cause they get to deal with all of us crazy guys. My buyer from Sims, Michelle, she's a really brilliant, she's done a lot at the company from scale all the way up to assisting the, uh, vice president. So she's, uh, she's got a depth of knowledge. Yeah. Awesome. Your, your twin brother, are you guys identical fraternal? He's two minutes older. He acts like he's, you know, 20 years older than me. But it's just two minutes. I'm just wondering because uh, with the Padnos brothers, you know, I could just get Sam to put on a different cap and we can be Yeah. Josh. Yeah, no, we look different. Yeah, he, he looks more like my father. I look like my mother. So let's jump into the quick fire questions. What's your favorite TV show? Movie, uh, TV show? I got two. One is the classic, the Sopranos old time. Favorite of mine and the other, whenever I'm needing an uplifting situation, Ted Lasso. I, I don't know, it's just a feel good sports movie or show and I just really enjoy it. Is um, is uh, Sopranos more like a waste management docus document? Yes, exactly. Docuseries for you? Yeah. Yeah. It's what I look up to and favorite place to visit. Favorite place to visit if I'm going to a hotel would be this hotel in right outside of Positano. Pietro. We also used to take a trip with my father and all my buddies. He actually started this. So we would take a catamaran to the British Virgin Islands and seeing a place by boat when you can kind of just pick up and see multiple places and not get stuck in a resort. And if you want cereal for breakfast, pour yourself a bowl and not get a a hundred dollars breakfast. That's a great place to visit. And it's just beautiful. Yeah, that's awesome. Favorite book, uh, the Patron Way. The Paul Mitchell story about how he started Patron and how that brand really got going. I was reading it on vacation and I don't usually read books and really blew me away. Other than that, the cold steel book that you recommended, the UNE with Hall story was just fantastic. Yeah, so good. I recommended it again just on the weekend to a friend of mine, um, who's not in our industry at all, and he loves reading, um, biographies and I was like, well, this might be for our industry, but it's worth the read. It's amazing. Yeah. I just started reading, um, just last night, the story about Uggs, you know, the boots. Yeah. So I'll let you know what it's like. I'll to check one out. Yeah. That's my favorite genre. But yeah. I must have a read of the one you just said because, uh, I haven't heard of it. Yeah, which is in the Petro. I got a list going of all your books on my, on my iPhone on a note. My wife makes fun of me that nice. Now I read books. Yeah. What's your favorite quote? Uh, favorite quotes? I got a couple. Um, my father used to say, good waiters, get good tips. That's one that I say to a lot of people when we're trying to earn business. My guys, everyone wants the business right away and you kind of just have to sometimes be okay. Uh, he also used to say you can't do it from the trailer. And that's true. I mean, you gotta be outside. You gotta look at the material, you know, you did it, you've done every job. You have to go and physically look at the material. You can't just sit in your office and, you know, watch it pass by the scale. Um, exactly. And the last one I would say he used to say is, A man's gotta know his limitations. Um, you know, I'm certainly not perfect and think that one of my strong. Students is knowing that I'm not, and being able to listen to people that know more than me about certain things. And, uh, I think if you can do that as a manager, you can really grow your team as well, because everyone's got their weaknesses. So I know my limitations and I think it's helped me a lot. Yeah, I couldn't agree more like knowing your blind spots, is that what often say, um, is vital. Vital. So on that note, Mike, this was awesome. Thanks for being on board. Scrappy mate. Yeah, thank you so much Stu.