In this episode of Executive Connect, host Melissa Aarskaug speaks with entrepreneur, investor, and Collective Influence Founder Eddie Wilson. Known for building and exiting more than 90 companies, Eddie shares the operating philosophy behind sustainable scale, community-driven growth, and leadership development that builds businesses far bigger than the founder.

Rather than treating companies as purely transactional assets, Eddie explains why the strongest businesses start with people, culture, and clear operating systems. From diagnosing struggling companies to identifying the single metric that drives momentum, he reveals the frameworks he uses to scale organizations, unlock leadership potential, and create enterprise value.

The conversation also explores why many private equity strategies fail, how founders unintentionally limit scale, and how leaders can transition from founder-dependent organizations to system-driven companies that grow beyond them.

Executives, investors, and founders will gain practical insight into leadership development, scalable systems, and how purpose-driven strategy creates lasting business success.

Chapters:

(00:00) The Foot Locker scaling lesson and finding your core KPI
(00:34) Building and exiting more than 90 companies
(01:31) The foundation required to scale businesses
(02:36) The three problems inside struggling companies
(03:05) Culture as systematic behavior, not aspiration
(04:30) Accountability and leadership culture
(04:49) Rethinking private equity and community-driven growth
(06:03) Building businesses that serve existing communities
(07:53) Why transactional PE strategies fail
(10:07) The system behind scalable companies
(11:30) The five phases every business goes through
(12:54) Why founders overcomplicate hiring and leadership
(15:56) Transitioning from founder-dependent to system-driven companies
(17:55) The fastest way to identify a company that cannot scale
(20:06) Developing leaders who can operate at scale
(23:20) Traits that matter more than experience in leadership
(25:53) High performer versus scalable leader
(28:09) The BRIC metric that drives growth velocity
(31:05) Creating your own marketplace and controlling the voice
(33:04) The future of private equity and rising valuations
(36:32) Legacy thinking and purpose-driven entrepreneurship

Eddie

(0:00) Like I’ve got a company, a coffee company right now, and I have no problem putting one of my coffee shops right next to a Starbucks, mainly because I do this correctly. (0:08) Here’s an anecdotal way to look at it. (0:10) If you go back to the kind of days of Foot Locker and their massive scalable growth, Foot Locker didn’t focus on selling shoes.

(0:16) They focused on one thing. (0:17) They focused on measuring feet. (0:19) There was that time period where they decided they’re going to measure every person’s foot coming into the store because they knew that if they’ve just measured feet, 78% of the time they sold a pair of shoes.

(0:29) It’s like, what is that in your business? (0:31) What is measuring feet? (0:32) What is what we call that our brick?

Melissa

(0:34) What happens when you build, scale, and exit over 90 companies and still wake up more excited about people than profits? (0:43) Today’s guest, Eddie Wilson, has been called the king of exits, but he’s rather happy to be known for the leader that has helped build people along the way. (0:55) From private equity to purpose-driven entrepreneurship, Eddie’s track record isn’t just about selling companies.

(1:03) It’s about creating sustainable systems, unlocking leadership potential, and building a legacy that lasts far beyond the deal. (1:11) Welcome, Eddie.

Eddie

(1:13) Thank you. (1:14) Thanks for having me on the show.

Melissa

(1:15) Now, you’ve built and sold more companies than most people have ever worked for in their lifetime. (1:21) When you look back, what’s the most common thread between the businesses that scaled sustainably and those that did not scale sustainably?

Eddie

(1:31) Sure. (1:31) The common thread between businesses that scale are they have the right foundation. (1:36) Most people struggle and they hear a number like 90 companies and they think, well, that’s impossible.

(1:42) But the fact of the matter is, if you build the right foundation, you can scale anything. (1:47) I was talking to a recent executive that was overseeing about 50 companies in a private equity firm. (1:55) He said, my goal is to get to 75 to 80 within this next year.

(1:59) It’s like once you have a playbook and a foundation, it’s really not about how many people can I manage and how many assets can I manage. (2:06) It’s about data. (2:07) You’re a data analyst at the top.

(2:09) You’re making good decisions with good data, with the right foundations and the right people, and you can scale that.

Melissa

(2:14) Ready to lead smarter and invest wiser? (2:17) On the Executive Connect podcast, we unpack executive strategies for wealth and influence. (2:25) Hit the subscribe button now.

(2:27) Don’t just watch, act. (2:29) That’s so true. (2:30) I’m curious, what’s the first thing you fix when stepping into a struggling portfolio company?

Eddie

(2:36) You have really three issues that you have to fix right off the bat. (2:41) You’re either fixing financial issues, people issues, or product issues, product or service issues. (2:47) I always start with the people first.

(2:49) If you get the people right, everything else seems to make its way to the top. (2:55) There are certain situations where there’s a massive financial issue that I have to step in and solve. (3:00) The financial issues are typically the easy ones.

(3:02) The people ones are always the hard ones.

Melissa

(3:05) Do you find that culture is not as front and focus for most companies? (3:12) I feel like maybe this is just a flat statement saying this, but a lot of times it’s like, we’re having a pizza party and we’re doing these things for our company, but we talk about being people first. (3:22) I don’t hear it as often as I would want to hear people first and culture as a priority in organizations today.

Eddie

(3:31) Yeah, I think culture is a buzzword. (3:33) When you come into most companies and they say, oh, we’ve got this great culture. (3:37) I define culture not as an aspirational goal, which is what most companies have.

(3:44) It’s like, hey, we want to be more family oriented, or we want to be more people centric. (3:48) The fact of the matter is your culture is whatever you get out of the systematic behaviors of your people. (3:54) If I turn around and if you say, I really want a family culture, but you’ve got people that are biting each other and nasty and negative, then you can have that as an aspiration all you want.

(4:05) It’s the systematic behaviors of your people that are actually your culture. (4:10) In order for me to actually change culture, I have to change those systematic behaviors. (4:16) For me, it’s about setting the right tone.

(4:19) It’s about giving them a North star. (4:21) It’s about pointing them all in the right direction. (4:24) It’s about holding people accountable.

(4:26) Holding people accountable, then you get the right culture.

Melissa

(4:30) Yeah, accountability. (4:31) I love that. (4:31) I think it’s so important.

(4:34) We want to play nice, but accountability is what really comes down to holding people accountable for what matters, what’s moving the needle, and when they’re not having those difficult discussions. (4:45) Switching gears a little bit and talking about private equity. (4:49) Now, many people think private equity is just about the big checks and the fast exits, but you’ve built collective influence very different.

(4:58) Walk us through your compensation and ownership philosophy and why it drives both performance and the culture you’re speaking about.

Eddie

(5:08) I get put into that private equity box, but I’m very much not a private equity company. (5:16) I believe that there’s this massive gap in the marketplace, which is you have the average mom and pop HVAC company or electrical company or dentistry or even doctor practice. (5:29) Then you’ve got this big giant whale that’s at the end.

(5:32) They’re trying to roll things up and move the needle and put revenue together and sell it off. (5:37) That really is what private equity is known for. (5:40) Private equity really just means that I’m investing in privately held companies.

(5:44) I’m trying to make the best out of them. (5:46) If an exit or succession planning makes sense for them, then I will. (5:51) If it makes sense for me to hold on to them, I will.

(5:54) There’s really not some predetermined piece, but I’ll tell you the secret sauce of what I do from a private equity standpoint is I build community first. (6:04) Then in that community, I’m buying companies or I’m starting companies that serve that community. (6:09) If you go back to all my big exits in 2019, I had created a company called Think Realty.

(6:15) It was a real estate investment media company. (6:18) It was a community. (6:19) I built a group called the American Association of Private Lenders, the AAPL.

(6:23) Then I looked for the things that they had. (6:26) Take that big giant community. (6:28) All the private lenders out there.

(6:31) One of the big gaps they had was insurance. (6:33) I essentially built an insurance company. (6:35) I was looking at what’s already on their P&Ls that they’re being underserved in.

(6:39) Then I either go buy it or build it. (6:42) I don’t start with this theory or thesis in mind that I’m going to buy this company. (6:47) Then I’m going to 10X it.

(6:48) Then I’m going to sell it. (6:49) It really is about building community for me, serving the community. (6:53) Then when they look at the products or services I have to offer, I already have their confidence.

(7:00) They know, like, and trust me. (7:02) They’ll gladly move a lot of their service-based spending over to me. (7:07) Then now I don’t have attrition issues.

(7:10) I’ve got major trust with them. (7:13) It allows me to build companies at scale because I have the community. (7:18) For instance, we have the world’s largest business tour right now called the InspireTour.

(7:23) The InspireTour is nothing more than an aggregation of small businesses that we serve. (7:27) It’s a community. (7:28) Then this time, I’ve got this massive entrepreneurial group and community that we serve.

(7:35) We realize that they have issues with tax planning and struggles with their CPAs. (7:39) I go out and I build a tax planning firm and a CPA firm. (7:43) We’ve got insurance again.

(7:45) It’s like all I’m doing is serving that community. (7:48) Then when you serve them with the right services and products, it scales and you build massive enterprise value.

Melissa

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(8:53) Even if you don’t offer what they have, it sounds like they’re coming to you either way and whether that’s another business opportunity for you to build or a referral partnership. (9:05) I love that. (9:06) Where do you think private equity firms get it wrong?

Eddie

(9:12) Private equity firms get it wrong because they look at it as a transactional business. (9:18) They look at it as I’m going to purchase it at this level. (9:21) I’m going to sell it at this level.

(9:24) That’s fine. (9:25) That’s a model that works for a lot of these firms. (9:29) The fact of the matter is, if you serve these people right and it’s not transactional, you get exponential increases out of them.

(9:37) I’ve been able to scale a lot of these companies not because I look at it as transactional, not just trying to get it from $10 million to $100 million. (9:45) I’m looking at it to see what its potential is, how to grow it to its greatest potential. (9:51) Then if there’s an opportunity to sell later on, then we do.

(9:55) It’s not looked at as this very transactional. (9:59) I go from A to C and then I sell. (10:02) It’s very much tied to the business and the services and the communities we serve.

Melissa

(10:07) You’ve said one of your superpowers is building processes that create sustainable models. (10:15) For founders that are still stuck in the business, what does real process-driven scale look like?

Eddie

(10:24) I don’t know if you’ve read this before, but it’s like you have competent people and you have conscious competent people. (10:31) You have the competence, like I’m just good at something and then there’s somebody who can come back and say, well, let me tell you the steps that it took to be good. (10:38) I think that that’s my superpower.

(10:40) I can be a good business operator, but do I know the steps that I can replicate? (10:47) Most business owners, they’ve typically gotten success through osmosis or they’ve been guided by someone else or they were given the path by someone else, but they can’t turn around and say, here were the 10 steps that got me here. (11:02) The one thing that I’m constantly looking at is, what steps did it take?

(11:06) What steps got me here? (11:08) I would say that in my business world, I’m more of a conscious competent. (11:11) I built a system called the Empire Operating System.

(11:14) The Empire Operating System is just me looking back and saying, how did I do it? (11:18) How do I replicate it? (11:19) Then now I’ve replicated it dozens and dozens of times and there’s over 3,000 companies that run on the Empire Operating System.

(11:26) That’s just because I systematically go through the steps of business. (11:30) The foundation for that is that every business is in one of five phases. (11:35) You’re in startup, perseverance, viability, scale, or succession.

(11:39) You’re in one of those five, no matter what. (11:41) If you understand where you are and where you want to end up, some people just want to build a lifestyle business. (11:48) They just want to get to viability.

(11:49) Some people want to scale. (11:50) Some people want to scale and exit. (11:52) You have to determine where you are and where you want to go in those phases.

(11:57) Then the path begins to illuminate.

Melissa

(12:02) It also seems like to me that you’re a builder and you’re a problem solver, a quick problem solver. (12:09) It seems like you’re on your toes. (12:11) You use the same systems that work.

(12:13) When something’s out of process, you go back to what you know and outsource what you need help with and keep solving these problems. (12:22) Really, people is one of, I find, the hardest problems to solve. (12:27) If you can figure out the people part of it and get the people that know how to do what you’re talking about in the right seats, it makes scaling a little bit easier than when everything’s in disarray.

(12:41) Where do founders overcomplicate these processes instead of what you explained, clarifying it, understanding it, and then executing it?

Eddie

(12:54) Founders typically, and I’ve worked with a lot of founders of big companies. (12:58) Typically, what happens is they’re looking for this person that’s a rock star to add to the team. (13:04) You go out to Silicon Valley and it’s like, I’m going to go raise all this money.

(13:07) I’m going to put these great big pieces around me. (13:10) Then we’re off to the races. (13:11) That’s really not how it works.

(13:12) And it’s why a majority of VC companies fail. (13:18) It’s this process by which they don’t understand what it means to put good people around. (13:24) I actually reverse the entire model.

(13:26) Instead of looking for somebody with a briefcase full of experience, it’s like, I don’t need somebody who’s had 20 years worth of experience and is the greatest and best. (13:39) Typically, with all of that experience comes baggage, comes a predisposition. (13:45) What I like is to start with what drives a human.

(13:49) I use a tool called Predictive Index that predicts their drives, not their personalities. (13:55) Most people go through all the different testing, Myers-Briggs, Colby, you name it. (14:01) Most of those are personality driven.

(14:03) I can alter a person’s personality if I give them a big enough incentive. (14:08) I can make anybody clean the toilet if I’m willing to pay a million bucks. (14:12) I can alter people’s personalities.

(14:14) However, I can’t alter their drives over time. (14:17) If I get in line with their drives first, what are you driven to? (14:21) I call that the headspace.

(14:23) I want to know where you’re driven. (14:25) In five years, what are you still going to be doing or what type of work are you still going to be doing? (14:29) You can’t take a maverick who hates data and struggles to get through all the finite details of business and then turn them into that over time.

(14:40) If they’re a maverick, they’re going to be a maverick. (14:42) They’re going to fall in line with this kind of forward thinking. (14:47) The second thing is core values.

(14:49) Do we align in our purposes, in our North Star? (14:54) I’m very much an altruist in that everything I do in business is tied to some greater purpose. (15:00) I have a non-profit.

(15:01) My Impact Others non-profit is the forefront of everything I do in my businesses. (15:07) If somebody doesn’t align with that, we’re not going to continue to go down the same pathway together well over a long period of time. (15:15) Then brings in experience.

(15:18) Oftentimes, what I’m willing to do is if somebody is driven, if I know where they’re going to be in five years still doing the same thing, if we align in core values, I’ll slow down the process long enough to teach and train them versus always going for that big silver bullet of like, man, I got to have this rock star executive who has all this experience. (15:38) I built a lot of the success and scalability in my teams not from rock stars that pre-existed my working environment. (15:46) They became rock stars because we aligned together.

(15:49) We had a common goal, a common mission. (15:51) Our North Star was the same. (15:52) We were passionately driven towards making things better.

Melissa

(15:56) I love that. (15:58) Now, one of the other things I see a lot is organizations that are founder-dependent. (16:03) When you jump into an organization and it’s all founder-dependent versus what you were previously talking about, which is system-dependent and going back to these systems that are working.

(16:16) How do you transition from this founder-dependent to these system-dependent processes and companies?

Eddie

(16:23) It’s a great question. (16:25) It started with me because I created founder-dependency in all my first early companies. (16:33) Most of that is ego-driven.

(16:35) Most of it is either, A, I don’t want the company to exist or be successful without me, or B, I don’t know how to make it successful without me. (16:44) Those two pieces. (16:46) Most of it is tied to ego.

(16:49) What we have to determine is what type of empire do we want to build? (16:57) I got to the place where I wanted to build an empire that was far greater than me, far bigger than me, far more expansive than me. (17:04) What I have to get to a place is you have to get a founder to a place.

(17:08) I had to get personally to a place where I realized that building an empire is about building people, not building the company. (17:16) Once I got focused on building the people around me that built the empire versus building the empire myself, everything changed. (17:24) It’s like this red thread that touches everything.

(17:28) It’s like when I was dependent on myself to build everything, I was worried about how is Eddie Wilson going to build this empire. (17:36) Just that simple shift of getting rid of the ego and realizing I have to be dependent on people to build the empire at the scale that I want, that I have to be focused on building the people versus actually building the business. (17:48) That shift changes everything.

(17:50) You have to get most founders there as step one.

Melissa

(17:55) What’s the fastest way to spot a business that can’t scale?

Eddie

(17:59) Hmm. (18:01) My belief is that it’s the exact thing we just talked about. (18:08) Most oftentimes a business won’t scale not because it doesn’t have potential or the product isn’t good or the service isn’t good.

(18:15) It’s because the founder or operator is in the way of the scale. (18:22) It’s in the mindset of the operator or founder or owner that you find true scalability. (18:28) It’s all about their mindset and their belief about how they’re going to go about doing business.

(18:36) I typically do an assessment on the founder or operator and immediately I can tell you if I want to scale that business, whether I can do it with them or I have to do it without them. (18:49) Very few businesses are absent of the potential of scale. (18:56) There are some, but for the most part you can scale just about anything.

Melissa

(19:01) How would you go about that in looking into the founder? (19:05) Just telling them how they manage their teams, how they manage the business, how their P&L looks. (19:09) What is the formula for that?

Eddie

(19:12) It’s the emphasis that they put on themselves for success. (19:15) You hear it in their language. (19:17) You see it in their activity.

(19:20) Most of them create bottlenecks that they’re not even aware of. (19:23) When you watch how they manage their teams, how their teams cannot operate or exist without their approval. (19:31) Most of them are not doing it intentionally.

(19:33) They just don’t see it. (19:36) I was there myself. (19:38) In that, what you do is you just create this dependency at every level.

(19:43) That dependency is what kills you.

Melissa

(19:46) That’s great. (19:47) I want to switch gears a little bit and talk about unlocking potential in leaders. (19:53) You often say you’d rather be known for people you’ve built than the companies you’ve sold.

(19:59) Inside your portfolio, how do you identify and develop leaders who can truly run at scale?

Eddie

(20:06) Again, ego is one of those constant conversations I’m having with my executives. (20:14) A great book that Ryan Holiday wrote called The Enemy is something that I prescribe at every level of my organization. (20:22) What you have to do is get them to believe that they’re capable of building something beyond them, not because of them.

(20:30) When you do that, then they stop putting this emphasis on themselves at every level. (20:36) Most of them want, in the beginning, especially you take somebody, you put them in a leadership role. (20:42) All they want to do is be told that they were good, that they did something well.

(20:45) They don’t want the pat on the back. (20:47) They want that reaffirmation. (20:51) You have to teach them to see that in the success of their people, to not hear it on the lips of someone else, but to see it in the success of other people.

(20:59) You have to get them to the place where you get them to see like, hey, someone succeeding because of you is the greatest recognition that you could ever have. (21:07) You see it. (21:09) I have three boys.

(21:12) I played a little bit of basketball and stuff like that. (21:17) If you see your child succeeding, and you know it’s because you put the time and effort into them, there’s such a greater reward there. (21:27) The same thing goes with your people.

(21:29) In the end, it’s getting people to attach to a mission or a purpose versus the company. (21:37) You can get them beyond their ego in the beginning to build other people, but then their ego also attaches to the company itself. (21:45) My greatest people are the ones that are willing to go on the ride with me that don’t attach to the company.

(21:53) They’re willing to be my CFO in any company that we’re building, growing, scaling. (21:58) They’re willing to be an asset leader, no matter which one I’m selling or moving or switching or growing or building. (22:06) I have a lot of those people.

(22:07) They’ve been on the ride with me for a very long time, and they get rewarded because of it. (22:12) To me, they’re the greatest leaders. (22:14) It’s because they don’t attach to the actual product system company.

(22:18) They attach to the outcomes and to the people they’re building.

Melissa

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(23:08) Yeah, well said. (23:09) I love that. (23:10) What trades do you think matter most and more than experience itself when promoting a leader?

Eddie

(23:20) Emotional intelligence is crucial. (23:26) I think that I love people that come with a predisposition that I could be wrong at everything I do because it creates this constant sense of wonder. (23:38) It’s like, if I come to every situation believing I’m right, then it creates this stagnant sense of growth around me.

(23:47) If I come to every situation believing that I’ve put the time effort into it but also could be wrong and could adjust and could build and grow, it changes the entire dynamic around me. (24:02) That’s the trait that I want in most of my leaders. (24:06) I want them to have a constant sense of wonder, a constant passion for their own change.

(24:11) I say this to my leaders all the time. (24:13) If you’re not growing personally, then everything in your life is also not growing. (24:18) If you want to grow your company, start with you first.

(24:21) You have to spend time on yourself. (24:24) In that personal development, in the emotional intelligence, understanding that there’s always the ability to grow, always the ability to scale, always the ability to develop. (24:33) It’s like when we come at life like that, then we have the ability to truly lead others.

Melissa

(24:39) How do you help leaders outgrow the roles that you’ve hired them for?

Eddie

(24:46) That’s where the common pitfall is. (24:51) They grow to a place they never believed that they would get to. (24:56) Then they get complacent and they find their success metric there.

(25:03) If I ever leave people behind along on this journey, it’s that. (25:07) They got stuck. (25:09) I got them to a place where they never believed that they would get to themselves.

(25:13) Then they get complacent and satisfied there. (25:16) That’s okay too. (25:17) Not everybody is built the way that I’m built or built the way that some of my leaders are built.

(25:23) That’s okay. (25:24) If they decide that this is enough, I also have to reward that. (25:33) There’s just a lot of people that if you look around the world, there’s high achievers, there’s achievers, and then there’s those around you that desire to achieve.

(25:44) There’s a difference, but it’s like I just want people to possess that desire to achieve. (25:50) They don’t have to all be the high achiever.

Melissa

(25:53) Is there a difference between a high performer and a scalable leader?

Eddie

(25:58) Yes, for sure. (26:00) A high performer typically hyper focuses on their own personal output. (26:06) A scalable leader typically focuses on not their own personal output, but their collective output of those that they influence.

Melissa

(26:14) That’s great. (26:16) It’s funny because I hear that often confused a lot. (26:19) They’re a high performing leader.

(26:22) They’re able to scale. (26:23) I would absolutely agree with what you said. (26:26) I’d love to get your perspective on, I know I talked to many leaders, Eddie, that stay in positions longer than they should because it feels safe.

(26:36) It feels comfortable, even though to your point, they’re not growing. (26:39) The question is, what’s the cost of keeping someone in a role that they’ve outgrown?

Eddie

(26:46) Yeah, that’s a really, really difficult process to go through. (26:52) It could cost you everything. (26:55) I’ve got so many situations where for the sake of that person thinking I’m going to do best by them, I decided to allow them to stay when I knew in my heart it was time for them to go.

(27:10) I’ve had so many companies that just stagnate. (27:13) In business, momentum is everything. (27:15) When you lose momentum, oftentimes it’s really hard to get it back.

(27:19) That doesn’t mean that that company is not successful, but you may lose the opportunity forever. (27:24) Every business has a window. (27:28) Oftentimes when you miss the window, you never get the chance back.

(27:32) It’s not like you get the chance to all of a sudden re-perform. (27:37) It’s so important that you hit that timing and the window with momentum. (27:42) Usually when you have somebody who has hit a ceiling, you will never have the chance to actually hit that window and opportunity perfectly.

Melissa

(27:51) Yeah, well said. (27:53) Now, I’m really excited to get your perspective on this question. (27:56) You’ve built brands in tight or saturated markets and still driven massive growth with very lean spending.

(28:04) What is your go-to strategy when customer growth feels like it’s capped?

Eddie

(28:09) Yeah, I have a proprietary way that I look at business. (28:13) I use this term, and I’ll just explain it to you very quickly. (28:17) I call it the BRIC.

(28:18) In every company, there’s a BRIC. (28:21) There’s a KPI that creates lift and velocity. (28:27) The way that I go into a very red ocean strategy still dominates, still scales.

(28:33) I’ve got a coffee company right now. (28:37) I have no problem putting one of my coffee shops right next to a Starbucks, mainly because I do this correctly. (28:46) Here’s an anecdotal way to look at it.

(28:49) If you go back to the days of Foot Locker and their massive scalable growth, Foot Locker didn’t focus on selling shoes. (28:56) They focused on one thing. (28:57) They focused on measuring feet.

(28:59) There was that time period where they decided they’re going to measure every person’s foot coming into the store because they knew that if they just measured feet 78% of the time, they sold a pair of shoes. (29:09) It’s like, what is that in your business? (29:12) What is measuring feet?

(29:13) What is what we call that our BRIC? (29:15) We’ve got a very systematic way of determining what my BRIC is, but then we measure that daily, and then we speak about it broadly. (29:23) Everybody in the organization has to know what that metric is, and it’s something you have to measure daily.

(29:28) That’s your measuring feet or your BRIC, and it’s with that you create velocity. (29:34) It’s this principle. (29:35) Have you ever heard of Bernoulli’s principle?

(29:37) It’s like a principle of thermodynamics. (29:39) You take a riverbank that’s flowing. (29:41) It’s 100 feet wide, and it’s flowing at 10 miles an hour.

(29:44) All of a sudden, the riverbank shrinks down to 10 feet wide. (29:47) The water exponentially increases. (29:50) That’s what most people need to do in their business.

(29:52) They need to shrink it down to one core common KPI that they focus on on a daily basis, that everyone knows the metric and the success of that KPI, and it creates lift. (30:04) It creates velocity. (30:05) It’s Bernoulli’s principle.

Melissa

(30:08) Where do most companies misdiagnose the market saturation?

Eddie

(30:14) Most companies look at it, and they think that it’s going to be either their quality that differentiates them, which is rarely the case. (30:24) When you go into a saturated market and have a higher quality, typically what that means is you’ve paid more to produce the product or service. (30:32) That’s not where you’re going to make up the difference.

(30:35) Number two, they believe that they can insert themselves into the common voice of the marketplace, which today is almost impossible. (30:44) When people own the voice of the marketplace in any situation, trying to get into a saturated marketplace is nearly impossible. (30:54) I believe that if I’m going to go into a red ocean, saturated marketplace, I have to control the voice in the community.

(31:05) I’m going to create my own. (31:07) That’s where it goes back to. (31:08) I don’t mind building an insurance company, which is very red ocean, oversaturated, small margin, because I own the community.

(31:16) When I own that community, then I control the voice. (31:20) When I control the voice, I have all the competitive advantage. (31:27) They’re in my world now.

(31:28) I get to speak to them specifically about the product that I have, create the differentiator, and then they buy.

Melissa

(31:36) How does the positioning and messaging unlock that hidden demand that you’re talking about?

Eddie

(31:43) It’s all about controlling that voice. (31:47) For instance, I was working with a big clothing company. (31:52) You look at clothing, and you just go on Instagram, and every five scrolls, you see some new clothing company.

(32:01) We were talking about it, and he was like, I’m really struggling to cut through the noise. (32:06) He was in the health and fitness space. (32:10) What we determined was, we have to create our own marketplace, our own community.

(32:16) Can you differentiate and pull these people out of this space of all this common language and all this saturation? (32:23) Can you pull them over here and be their one voice in this community? (32:28) We did.

(32:30) I think he was doing about $3 million a year in sales to about $60 million in less than three years. (32:36) It’s because he created his own community, his own voice, and he had no competition within that voice.

Melissa

(32:43) That’s fantastic. (32:44) Well said. (32:46) Let’s talk a little bit about the future of collective influence in private equity.

(32:51) You’ve built an ecosystem of brands that feed off of each other’s strengths. (32:56) What’s next for collective influence, and how do you see private equity evolving over the next decade?

Eddie

(33:04) One big thing that just recently happened is that with the new tax bill, 401ks are allowed to invest into private equity companies and funds. (33:18) If there’s a trillion dollars in liquidity sitting on the marketplace today, there’s an estimate of somewhere between another trillion and $1.2 trillion. (33:28) You can see almost $2 trillion in liquidity sitting in private equity funds in the next year to 18 months.

(33:34) What that’s going to mean is that all that money is looking for yield, which essentially creates a seller’s marketplace. (33:41) I believe that these valuations are going to increase. (33:47) I believe that the valuations that we see today on things like AI-infused technology, SaaS-based companies tied to AI, you’re going to see crazy multiples in the next 12 to 18 months.

(34:01) Not just that, you’re going to see multiples increase on the stabilized asset classes, like all these roll-ups in HVAC, plumbing, electrical, dentistry, and chiropractic. (34:12) It’s like you’re just in these stabilized asset classes, you’re going to see a lot higher multiples. (34:18) For collective influence, the way that I’m looking at that from a timing standpoint is I have a bunch of service-based companies.

(34:25) I have a tax firm that we’ve rolled up. (34:26) I’ve got an insurance company. (34:29) We’ve got all these things that traditionally, you’re seeing lower multiples.

(34:33) Now, we’re infusing AI and not necessarily replacing the whole entire functionality with AI, but we’re giving efficiency to these models with AI. (34:46) It’s an AI-infused tax model so that the average enrolled agent or CPA in our firm could see maybe 1,000 clients. (34:56) Now, they can see 2,000 to 3,000 clients because of AI.

(34:59) You’re going to see infused and inflated multiples on these companies. (35:05) With collective influence, I’m preparing for all of that. (35:09) That way, if in the next 12 to 18 months, we see some crazy multiples, then I’ll potentially exit some of those assets.

Melissa

(35:17) Wow, that’s interesting. (35:18) Now, what will differentiate winning PE firms going forward?

Eddie

(35:23) What’s going to differentiate? (35:25) PE firms make money three ways. (35:27) Number one, they make it off of typically EBITDA or top-line revenue.

(35:32) Getting efficient with the dollars that they have, the actual income dollars that are coming in on these assets. (35:39) Number two, it’s always operating system. (35:41) The big whales that are buying, let’s just say the mid-cap private equity companies, the 50 to 100 million that are selling off to the big large cap private equity companies.

(35:52) What they want is a manual and a systemized process. (35:56) The operating system is everything because you’re not just selling a company. (35:59) You’re selling a company that’s operating efficiently and the manual that goes with it.

(36:04) They don’t want to recreate the processes. (36:07) Then thirdly, it’s the IP. (36:09) You have to look at how do I take components of technology and infuse them to create IP, to differentiate myself from everything else.

(36:21) Those three metrics, those three things, they have to be focused on to essentially sell them up or sell them back to an institutional marketplace.

Melissa

(36:32) That’s awesome. (36:34) Now, talking a little bit about legacy thinking and having three sons, how does legacy thinking change your investment strategy or does it, I guess?

Eddie

(36:47) Yeah, it does. (36:49) More than just my three sons, I think that I’m in a place where I’ve done well for myself. (36:54) I’ve got my next generation taken care of and maybe a few generations after that.

(36:59) Where I’ve been hyper-focused since 2013 is my nonprofit called Impact Others. (37:05) We have feeding centers, orphanages, we do clean water projects, and then we build sustainable businesses. (37:10) We’re in about 100 plus countries today.

(37:14) What I’m trying to do in all of my future exits and all the cash that I’m creating is creating an endowment program so that when I pass on that legacy, that Impact Others legacy, the nonprofit to the next generation that’s going to run it, I don’t want them to have to also fund it. (37:31) The burden of creating these massive outreach programs is that you have to continue funding. (37:37) I don’t want to pass the burden of funding onto them.

(37:40) My goal is to, in all these companies I’m building and selling and exiting and growing and scaling, is to create endowment for the nonprofit. (37:49) We’re getting close. (37:50) I would say in the next 10 years, I’ll have that where I want it to go.

(37:55) Then that’ll just live on in perpetuity. (37:57) That’s really my big legacy piece is everything I’m doing on the nonprofit side.

Melissa

(38:03) That’s fantastic. (38:04) I love hearing that. (38:06) I think so few people think about that these days and so few leaders.

(38:11) Thank you so much for the good work that you’re doing. (38:13) A couple final quick rapid fire questions. (38:18) One word that describes a sellable business?

Eddie

(38:24) Nimble.

Melissa

(38:26) The most overrated metric in scaling?

Eddie

(38:32) Profitability.

Melissa

(38:34) People or process, which breaks first?

Eddie

(38:38) People.

Melissa

(38:39) One leadership mistake you see constantly?

Eddie

(38:49) That’s a tough one in one word. (38:51) That’s a problem.

Melissa

(38:52) Two words, three words, whatever.

Eddie

(38:55) The biggest leadership mistake is losing faith in someone too early. (39:02) You never know when someone’s going to actually bloom.

Melissa

(39:06) The biggest exit lesson you had to learn the hard way?

Eddie

(39:13) The biggest exit lesson would be timing. (39:19) Timing is everything. (39:22) Sometimes you just hold on for just a little too long because you think you’re going to get more out of it.

Melissa

(39:27) A sign a business is not ready for private equity?

Eddie

(39:34) No systems.

Melissa

(39:37) The hardest role to replace in a growing company?

Eddie

(39:44) Marketing.

Melissa

(39:47) So true. (39:49) Okay, last question. (39:50) One habit every scalable leader must have?

Eddie

(40:00) Just constant improvement.

Melissa

(40:03) That’s great. (40:04) Thank you so much for being here and sharing your knowledge in time with our listeners. (40:09) Any final thoughts and what is the best way for our listeners to connect with you to learn more about your nonprofit or any of the good work you’re doing?

Eddie

(40:19) Just final words are this, that when you’re a growing and budding entrepreneur, you’ve got to make things bigger than just who you are and what company you’re building. (40:30) It’s got to be tied to purpose. (40:32) At some point, you’re going to hit a mountaintop and then realize, you know, this doesn’t bring me fulfillment.

(40:37) So anchor fulfillment, not in the achievements of your business or the achievements that you have in the goals of your company, but in the achievement of doing something greater for someone else. (40:47) You know, like make your company, make your pursuit about something bigger, something greater, something purposeful. (40:54) Because that’s where true success and true scale is.

(40:59) For me, one of the big things that I love doing is connecting with entrepreneurs. (41:03) And so I answer all my own DMs. I spend hours doing it, trying to answer people’s questions and help them out. (41:10) And so Eddie Wilson Official is the easiest place to get to me on all the social channels.

(41:15) And if you get a response through DM, it’s usually from me personally.

Melissa

(41:19) That’s great. (41:20) Thank you so much for being here today, Eddie. (41:22) That’s the Executive Connect podcast.